Apple and ad-skipping

I stopped putting a lot of stock in TV-related Apple rumors awhile ago, so I don’t want to over-analyze today’s edition, by former Wall Street Journal reporter Jessica Lessin, citing unnamed “media executives” that Apple is in talks with the networks about some sort of combined live-and-on-demand video service via Apple set-top box (or perhaps a TV). But for the sake of conversation, here are a few speculative thoughts on what they might be talking about.

Apple already offers ala carte downloads of TV content via iTunes, so presumably what we’re talking about here is a streaming service, probably via subscription. Recreating the full cable bundle wouldn’t make a lot of sense for Apple (and would likely be cost-prohibitive) so, again presumably, we’re talking about some sort of smaller bundle of channels or (less likely) an ala carte channel offering. For the most part, those deals would simply be a matter of price…

Read the rest at GigaOM Pro.

Following the Flipboard flip-flops

Publishing The New York Times and Conde Nast each reversed its policy recently regarding aggregation of their content through the iPad and Android reading app Flipboard, and the reversals are revealing on the question of value-capture for online content publishers.

After originally allowing all digital content from The New Yorker and Wired to be pulled into the Flipboard app, Conde Nast is now pulling back. From now own, Flipboard users will be limited to a hyperlinked headline and a few sentences for stories from those publications. To read the full story, users will have to click through to the magazines’ own web site — that is, out of the Flipboard app. Conde Nast is also pulling back from its efforts to sell ads in the Flipboard feeds for the two publications. Read More »

Old media falling out of favor at DOJ

Antitrust The U.S. Justice Department has opened a “wide-ranging antitrust investigation” into whether cable operators are illegally using bandwidth caps and other tactics to try to squash growing competition from online video services like Netflix, the Wall Street Journal reported last week.  Subsequent reporting by the Journal revealed the investigation also covers the satellite TV services Dish Network and DirecTV, and that the feds are also looking into whether pay-TV operators are using so-called most-favored nation clauses in carriage agreements with the networks to restrict the network’s ability to license their content to online, over-the-top distributors.

The investigation and the issues at stake, particularly the department’s apparent focus on most-favored nation agreements, carry distinct echoes of the lawsuit the Justice Department filed in April against Apple and several leading publishers over an alleged conspiracy to fix prices in the e-book market. As in the cable industry investigation, the e-book lawsuit charges Apple with using most-favored nation clauses in its agency licensing agreements with the publishers to ensure that neither Amazon nor any other e-book retailer gets a better deal than Apple got or can sell e-books at prices lower than Apple’s price. Read More »

Aereo combat: Why the networks should be worried

Copyright There are certainly cheaper markets to operate in than New York City. And if you were preparing to launch a risky media startup, you might be expected to try opening out of town, where the downside would be smaller, before taking your show to Broadway. Not so for Aereo, the Barry Diller-backed startup formerly know as Bamboom, which offers to stream broadcast TV channels to subscribers over the Internet for viewing on connected devices for $12 a month. Subscribers will also be able to record programs as they would with a DVR and store them in the cloud for later viewing.

Perhaps Diller just craved the spotlight, and wanted to launch in center of the media universe. But a more likely reason for picking New York is that it’s the seat of the federal Second Circuit Court of Appeals, which in 2008 handed down an opinion in Cartoon Network, et. al. v. CSC Holdings, better known as the Cablevision remote-DVR case.  That case, in which the cable operator’s cloud-based DVR service was challenged unsuccessfully by the networks,  is Read More »

Online publishers need an edge

Digital Publishing A key nugget from the Pew Center’s annual State of the News Media report, out today, neatly captures a critical dynamic of the online content economy that makes it so confounding to content owners.

As Pew notes, the online audience for news is enormous and still growing rapidly. The top 25 news sites in the U.S. topped 342 million average monthly unique visitors in 2011, up 17 percent over 2010. At the same time, online advertising continues to grow at a much faster pace than the general ad market. Total online ad spending hit $32 billion last year, up 23 percent, and online ads now account for 20 percent of total ad spending.

Those two trend lines ought to ad up to good news for online publishers. But as Pew also notes, publishers themselves are capturing very little of the added value created around their content by all that additional advertising revenue. Instead, five top technology providers — Google, Yahoo, Facebook, Microsoft and AOL — captured 68 percent of the online ad revenue in 2011, up from 63 percent in 2010. Read More »

What happens in Vegas

Las Vegas — The first annual International CES opens here this week and is expected to attract somewhere north of 140,000 gadget makers, press, politicos, and buyers and sellers of stripes, to say nothing of your humble correspondent. Normally this time of year, those same folks would be attending the Consumer Electronics Show here. But the organization that puts on the show, the Consumer Electronics Association, has decided to drop the reference to “consumer electronics” in the name of its signature confab. From now on, the “CES” in International CES won’t actually stand for anything. It’s just the group of three letters people have been using as a handy abbreviation for the Consumer Electronics Show since it stopped being the Radio Manufacturers Show sometime in the 1960s.

The “rebranding,” as the marketing folks say, comes as the show is in fact experiencing something of an identity crisis, underscored last month by word that Microsoft would no longer send its CEO to keynote the confab after this year and would significantly scale back its participation in the show. To longtime show-goers, Microsoft’s decision to drop out is no great loss. Neither Steve Ballmer, nor Bill Gates before him, had said anything worth hearing at Microsoft’s traditional night-before keynote in years. And much of what they did talk about often turned out to be vaporware (Spot watch, anyone?). Read More »

Don’t bet on a Netflix sale

Video Streaming Another Netflix bubble burst: On Monday, its shares soared more than 6 percent on reports that Verizon was in talks to acquire the video streaming and DVD-by-mail company. By the closing bell Tuesday, the shares had given back nearly all of those gains after several analysts shot down the initial reports.

Still, hope springs eternal, and the shares were up again in the after hours market, perhaps on speculation that even if Verizon isn’t a buyer for the currently beleaguered service, someone else might be.  Maybe, but I wouldn’t bet on it.

The Verizon rumors gained traction initially because Verizon CEO Lowell McAdam acknowledged publicly last week that the telco was interested in the online video streaming business, going so far as to admit to kicking the tires at Hulu when it was being shopped. But of all the potential suitors for Netflix, Verizon is among the least likely.

Most of Netflix’s growth over the next several years is likely to come from outside the U.S., which is not a good fit for Verizon strategically. It also certainly doesn’t want any part of Netflix’s DVD Read More »

Cable networks no longer thick as thieves

Programming Lots of grumbling out of the UBS Media & Communications conference yesterday over the soaring costs of cable TV programming. As usual whenever the subject of programming costs comes up, much of the ire was directed at ESPN, which squeezes an estimated $4.69 per subscriber from cable and satellite operators — orders of magnitude higher than what any other pay-TV network commands.

What was not usual was the source of the grumbling. It came not from cable and satellite operators, who have long griped about the cost of ESPN, but from other cable network owners, who presumably would love to be in ESPN’s position. Under the growing strain of falling video subscriber numbers industrywide, other networks are growing concerned that ESPN’s position is coming at the expense of their own.

On Monday, Liberty Media CEO Greg Maffei called the rising cost of ESPN a “tax on every American household,” that threatened the long-term economics of the pay-TV business, to say nothing of the long-term comity of the pay-TV industry. “What happens to the bundle of cable if you keep pushing [the price] higher and higher?” he wondered, as reported by the Wall Street JournalRead More »

Microsoft’s non-disruptive disruption

Digital Living Room Microsoft will roll out a major makeover of Xbox Live Tuesday, adding a raft of new OTT video and music services. The update will also deliver a new user interface and enhanced voice-recognition capability for the Xbox Kinect platform, enabling Kinect owners to control their Xbox Live experience through a combination of voice and gesture control.

While Microsoft is hardly the only technology giant looking to plant its flag in the living room its approach is notably different from that of Apple or Google, to name two of the other leading contenders.

The first iteration of Google TV represented a bald attempt to establish browser-based search as primary means of finding and accessing video content. The reason for the emphasis on search was obvious: Google dominates the search business and has a proven and highly efficient engine for monetizing search results through advertising. Read More »

Netflix and the cost of doing business

Licensing Netflix really, really doesn’t want you using both its streaming service and it’s DVD-by-mail service. As of this month, it costs subscribers 60 percent more to use both services than it used to, thanks to the company’s recent price changes. As of today, it’s a bigger pain in the ass as well.

In a post on the company blog Sunday night, CEO Reed Hastings announced yet more changes that will force subscribers who want both streaming and DVDS not only to maintain two, separately billed accounts, but manage them on two entirely separate web sites, one of which is not even branded Netflix anymore. To order a DVD, users must now log on to the newly christened Qwikster web site, while their streaming business will be transacted through the Netflix site at a different URL.

There’s more: Read More »

Taking Hulu global

Deals The auction for Hulu has been nothing if not fluid, with bidders dropping in an out of the process and conflicting signals from the sellers as to how committed they are to selling. But with the deadline for offers fast approaching, the pool of serious bidders had boiled down to three, according to the Financial Times — Yahoo, Amazon and Dish Network — with each expected to enter a bid somewhere between $1.5 and $2.0 billion.

Until last night, that is. That’s when word broke of a possible last-minute mega-bid from Google — previously thought to have bowed out of the bidding — that could scramble the whole process yet again. Sources told Peter Kafka of AllThingsD that Google may be willing to put up “a couple billion dollars more” than the purported $1.5-$2.0 billion competing bids as part of “a different [proposed] acquisition, on a larger scale.” Read More »

How Apple could disrupt the TV business

Digital Living Room With the news last week that Apple is pulling the plug on 99-cent TV show rentals through Apple TV, the tech media has again been ablaze with speculation about how Apple might still do unto the TV business as it has the music and mobile phone businesses, complete with a reappearance of the zombie rumor that it will introduce an App Store-enabled Apple HDTV set sometime next year.

As I noted in my last post, however, the TV business has thus-far proved remarkably resistant to disruption, the sine qua non for Apple to invest seriously in the market. The networks and cable operators successfully resisted Google TV’s bid to disaggregate the TV bundle with search technology, as well as Apple’s efforts to drive down the price of  accessing TV content on Apple TV. As I noted yesterday, I’m skeptical that Apple’s introducing a different form factor — a 42-inch display  instead of Read More »