You say goodbye, I say Hello Music

The artist & repertoire (A&R) reps at a record label are like reporters at a newspaper: a cost center performing an inherently inefficient task that generates no direct revenue of its own but is nonetheless critical to the operation of the rest of the enterprise. Without reporters to gather the news, publishers couldn’t aggregate reader eyeballs to sell to advertisers; without talent scouts, record companies couldn’t break new acts.

The two job descriptions also face similar dilemmas in the digital age: the high profit margins their enterprises once enjoyed, and that subsidized their inefficiency, have been undercut on new digital platforms. But digital technology has done nothing–or at least not enough–to make those functions any less inefficient. Both remain time and labor intensive and you sink a lot of dry holes in each.

That doesn’t necessarily mean digital technology couldn’t do more to make those functions more efficient, however. Or, if not more efficient than perhaps directly monetizable. The problem has been a lack of digital business-to-business tools to facilitate commerce and capture the value that functions like news gathering and A&R create for other enterprises, or for other parts of their own enterprises. Read More »

'Avatar' blogging blues

My post the other day on the Blu-ray Disc release of Avatar in France generated quite a bit of traffic and commentary on other web sites (thank you Engadget HD), as well as attracting a few comments here. Alas, most of it has been critical.

While it’s always tempting to blame the critics for missing your point, as a general rule if a large number of people appear to have missed your point you probably didn’t do a very good job making it in the first place. So: mea culpa.

Let my try to clarify some issues:

Notwithstanding Ben from Engadget’s diligent research in IMDB, there really aren’t other movies comparable to Avatar. True, there have been other blockbusters in the past five years, most or all of which may have been released on DVD/Blu-ray within six months. But there haven’t been others with a $450 million negative cost and an inherently longer theatrical cume period due to the still-limited number of 3D screens. Read More »

Is DECE about to get Lala'd? (Updated)

Updated to fix the bad link: MP3tunes CEO (and former MP3.com CEO) Michael Robertson has an interesting guest post on TechCrunch today about Apple’s emerging cloud strategy and the possible role in that strategy for Lala, the subscription music service it recently acquired. According to Robertson, the Lala acquisition does not presage the launch of a subscription iTunes service, as many have speculated. Instead, the real value of Lala to Apple is its cloud-based personal music storage service and the software for managing it:

As Apple did with the original iPods, Lala realized that any music solution must include music already possessed by the user. The Lala setup process provides software to store a personal music library online and then play it from any web browser alongside web songs they vend. This technology plus the engineering and management team is the true value of Lala to Apple.

An upcoming major revision of iTunes will copy each user’s catalog to the net making it available from any browser or net connected ipod/touch/tablet…After installation iTunes will push in the background their entire media library to their personal mobile iTunes area. Once loaded, users will be able to navigate and play their music, videos and playlists from their personal URL using a browser based iTunes experience. Read More »

For 'Avatar,' three-strikes means a quick out

From the be careful what you wish for file: Twentieth Century-Fox’s Avatar, which is rapidly approaching the top spot among all-time global box-office grosses, and would likely be the biggest selling Blu-ray title to date when released at Christmas time, will actually be released on June 1st, at least in most of the world. Amazon France is already taking pre-orders, for 28.99 euros.

Why not wait until the most propitious time of year to release such a monster title in order to maximize sales? Because it would be against the law in France to wait beyond June 1. And if you release it in France, under EU rules, you’ve effectively released it throughout the EU. And if you release it in the EU, you’ve effectively released it throughout Blu-ray’s Region B, which includes Africa and the Middle East as well as Australia and New Zealand, where they speak a version of English. And if you’re going to release a movie with an English soundtrack in Region B, you might as well release it in Region A, which includes the United States, because it’s going to end up on the Internet sooner or later, probably sooner.

Welcome to life under France’s new three-strikes regime.   Read More »

RealNetworks' real mistake

One week  after Judge Marilyn Hall Patel decisively threw out its antitrust claims against the studios and DVD CCA in the RealDVD case, RealNetworks appears to be imploding. On Wednesday COO John Giamatteo abruptly left the company, and on Thursday founder Rob Glaser stepped down as CEO (he’ll remain chairman). Although Glaser’s move had apparently been planned for some time, it came sooner than he expected and appears not to have been voluntary.

While it’s possible the timing of the events is just a coincidence I wouldn’t bet on it. Investors cheered the news of the Glaser move, sending the stock soaring 17 percent in its wake (ouch!), presumably in anticipation of a new strategic direction for the company–one not quite as provocative and confrontational with respect to the content owners.

The whole RealDVD saga, in fact, has been a disaster for Real. Not only has it been unable to distribute the product, thanks to a restraining order and temporary injunction by the court, but the litigation with the studios over the DVD copying software has produced an unending series of legal setbacks for Real, of which last week’s ruling is merely the latest. Read More »

TV vs. Cable

The Media Wonk spent last week in Las Vegas at the Consumer Electronics Show where, everybody said, 3DTV would be the big story. And sure enough, nearly everywhere you went on the show floor folks were sporting either polarized shades or the full Geordi La Forge wraparounds and squinting at the new 3D displays tucked into carefully light-controlled alcoves of the display booths, like so many bug-eyed NFL refs going under the hood.

Yet for all the hoopla over 3D, the really important TV story out of CES was the explosion of embedded applications on Internet-capable HDTVs and Blu-ray players for bringing over-the-top (i.e. Internet-delivered) video into the living room. A year ago at CES there were only a few such TV sets on display, from a handful of manufacturers, and about all you could do with them was run a few Yahoo widgets and stream Netflix movies. At this year’s show, it was hard to find a home entertainment device that wasn’t Internet-ready, and if it didn’t come with its own app store it came embedded with one of the growing number of online content platforms from the likes of Vudu, DivX, Rovi and Boxee, among others.

Far more than 3D, set-makers’ growing commitment to enabling over-the-top video delivery to HDTV screens holds the potential to shake up the future evolution of the TV business. Read More »

Getting nowhere on TV Everywhere

The Media Wonk is en route to Las Vegas for the Consumer Electronics Show as this is being written, where I expect to be inundated with all things 3D. Between taking off from Washington, DC and a stopover in Minneapolis, however (there’s a reason Delta Airlines went bankrupt awhile back, by the way), my BlackBerry was bombarded with “urgent” communiqués from all sides of what looks to be shaping up as a nasty policy fight over TV Everywhere.

The hoo-hah appears to have started with an item in the Washington Post Monday about calls on federal antitrust regulators by various public interest groups spearheaded by Free Press to begin immediately to investigate TV Everywhere. The calls were ostensibly prompted by a “study” paid for by Free Press, which purportedly discovered that TV Everywhere is actually a plot by “giant cable, satellite and phone companies,” along with Time Warner, to “eliminate the threat of online competition,” so they can continue to gouge consumers.

“This is a textbook antitrust violation,” thundered University of Nebraska law professor Marvin Ammori, the study’s author. “The old media giants are working together to kill off innovative online competitors and carve up the market for themselves…The antitrust authorities should not stand by and let the cable cartel crush Internet TV before it gets off the ground.” Read More »

Not sure I want my 3D TV, yet

Old joke: A chicken and egg are having sex. The chicken climaxes, rolls over, lights a cigarette and says, “Well I guess that settles that.”

chicken-egg-bed-came-firstPoint taken, at least as far as poultry is concerned. But it still takes both partners to get to the punchline. What about cases where you lack a partner?

I’m thinking, naturally, of 3D TV, which is rapidly emerging as the last, best hope of the consumer electronics industry. With the bottom all-but out of flat-panel display prices, major set makers are placing big bets on 3D technology heading into next month’s CES in Las Vegas. On Thursday, Sony inked a pact with RealD to license its 3D eyewear technology, and it, along with Panasonic, Samsung and LG will be showing off new 3D TV sets in their booths at the show.

Earlier in the week, the Blu-ray Disc Assn. finalized the technical spec for Blu-ray 3D, which also, no doubt, will make an appearance at CES.

The timing of all this 3D activity is in some measure fortuitous. CES will be opening on the heels of James Cameron’s $350 million 3D extravaganza, “Avatar,” which many 3D boosters in the CE industry will do for consumer interest in the process what “The Jazz Singer” did for talkies (both the movie and the 3D effects are drawing raves). Assuming it’s indeed a huge hit, “Avatar” will probably be released on Blu-ray sometime in 2011, just in time for the expected roll out of 3D-capable players (PlayStation 3 consoles can be made 3D capable sooner with a firmware upgrade). Read More »

Selecting outputs at Best Buy

The Media Wonk got a fair amount of feedback on a post from last week on the controversy over the MPAA’s petition to the FCC for a waiver on the rules on selectable output controls. Some readers liked my analysis; others were something less-than convinced. I commend both to this feature article on Best Buy in the current issue of Bloomberg BusinessWeek (nee BusinessWeek), which provides a very useful perspective on the same phenomenon I was trying to get at in my SOC post, namely, the complex and conflicbest-buy-storeting business relationships that retailers, content owners and device makers increasingly must navigate in the digital age, and how that might manifest itself in their strategic moves.

The thrust of the piece is that Best Buy, as the last CE retail giant standing since the liquidation of Circuit City earlier this year, is starting to flex its muscles with vendors to influence product design, merchandising strategies, customer service and other aspects of their business as it looks for ways to fend off new competition from the likes of Wal-Mart and Amazon. Read More »

Comcast's over-the-top lobbying

Here in Washington, DC, TV viewers are treated to an unusual array of commercials: a fairly steady drumbeat of obscure issue-advocacy ads sponsored by industry-funded front groups aimed at influencing Congress by showing off the group’s lobbying muscle. Generally speaking, the more blandly benign-sounding the group’s name, the more mendacious the policy proposal. Groups calling themselves something like Americans For Opportunity, for instance, are a good bet to have something to do with strip mining, or promoting child labor in American Samoa.

Last night, The Media Wonk saw something new: a straight-up, undisguised plug from Comcastfor its dealto gain control of NBC Universal. Presumably, the intended audience was the small group of lawyers and civil servants at the FCC, FTC and the Department of Justice who will be reviewing the deal and have the power to change or block it. How’s that for targeted advertising?

comcast-nbc-monopolyI’m puzzled by why Comcast is trumpeting this thing, though, especially here. The message of the ad (I wasn’t taking notes so I can’t quote from it) concerned all the wonderful new things Comcast would be bringing viewers now that it controls one of the largest media companies on the planet. Given all the groups here peppering the FCC et. al. with concerns over all the new things  Comcast will be able to do now that it controls one of the largest media companies on the planet, I’m not sure Comcastwouldn’t be better off laying low and not drawing any more attention to its size and reach (you can read my full analysis of the strategic implications of the deal at GigaOm Pro (very modest annual sub. req’d)). Read More »

This just in: Conventional wisdom on journalism is wrong

The Federal Trade Commission held a two-day workshop last week called How Will Journalism Survive the Internet Age?, which featured the likes of Rupert Murdoch, Arriana Huffington and former Washington Post executive editor Len Downie nattering on about who is to blame for the economic problems of newspapers and whether the government should do something to underwrite the cost of producing “quality journalism.”

Of all the ideas being kicked around about how to save journalism in the Internet age, clearly, getting the government involved seems clearly the worst of them. No good can come of that, for anyone. Nor can any good journalism.

JournalistThe bigger problem with the whole enterprise, however, was its premise. The Media Wonk is hardly the first observer to note newspaper executives’ propensity for conflating newspapering with journalism, and for insisting that if the former goes under, so will the latter (from the title of the workshop, it was clear the FTC is also at least half-way in that same bag, too). But I think  the problem goes even deeper than that, to the whole notion of “quality journalism,” itself, and its unacknowledged relationship to technology.

So much of the process that defines what we generally refer to as “journalism” is really no more than a collection of technologically determined conventions that we have mistakenly and unnecessarily elevated to the status of “principles.”

I’m talking here about the whole package, from the institutional beat structure to the inverted pyramid, to rules about sourcing and the “reached in his bunker for comment Mr. Hitler denied…” approach to balance, to the scoop and the second-day lede.

Most of those conventions are traceable, directly or indirectly, to the high fixed costs long associated with publishing newspapers, and to the particular means of production the technology imposed on publishers.

As in any business, where you have high fixed costs you need a high volume and steady flow of product through the pipeline over which to amortize those costs. That meant hiring a lot of reporters and editors to churn out “news.” High costs and high volume, in turn, create pressure for standardization and routine to insure the quality and consistency of the product.

Most newspaper publishers, moreover, serve two masters: readers and advertisers. And advertisers require predictability (i.e. standardization and routine) in order to make informed buying decisions.

The situation was much the same for news broadcasters when that technology emerged. They didn’t need printing presses but they needed well-equipped studios and transmitters. And they needed affiliates to retransmit their broadcasts to outlying areas. For most of the history of broadcasting, networks paid affiliates to carry their programs, not the other way around as it is today.

Standardization also encouraged the professionalization of journalism. As in law or medicine, the professionals became the keepers of the standards that defined them as professionals. That boosted salaries, which increased costs further, while at the same time erecting a useful barrier to entry for potential competitors.

The cost, labor and effort involved in producing a newspaper (and later a network broadcast) also created pressure to organize the work in a very particular way. In a time before cellphones, email and webcasts, and when newspapers came out once, or at most twice, a day, stationing a reporter full time in the state house, or on Capitol Hill, or monitoring the police blotter, was an efficient way to organize the work.

As with any formalized system, however, over time the system itself become its own subject matter (much as it is in law, for instance). Thus, the instutions to which the reporters were attached–for reasons largely related to costs of publishing newspapers and reinforced by professionalized standards–themselves came to be regarded as the “news,” rather than the substance of what they did or its relationship to institutions that were not part of the system (i.e. most of what made up most readers’ day-to-day existence).

The deployment of reporters also dictated the line-up of stories that went into a newspaper or an evening broadcast: The “news” was what the institution-bound reporters reported.

printing-pressCritically, for most of the past two centuries, most of costs associated with maintaining a professionalized news organization, whether fixed or variable, and which created the pressures toward standardization, routine and institutional bias, were and are related not to the expense of news gathering itself but to expense of owning a printing press or a broadcast network, of paper, ink and setting type, of the cost of  postage and delivery trucks, of maintaining affiliates, and ultimately of maintaining “professional” standards in the first place.

In short, “professional” journalism is expensive because it’s designed to be. So when publishers complain, as Rupert Murdoch did again in a Wall Street Journal op-ed on Wednesday that producing “quality journalism” is expensive, they are speaking the truth. But they are also speaking a tautology, which tells us nothing about the actual substance or value of journlism, but everything about how publishers’ capital is deployed.

Today, digital technology is removing (or has removed) most of the fixed costs long associated with reporting and publishing “news.” And the conventions of “professional” journalism that grew up as a result or in response to those costs, have lost their foundational purpose.

That leads us, inevitably, to ask at least two critical questions: What, then, is their purpose today? and, is that purpose sufficient to warrant extraordinary measures to preserve them?

Having spent the first 25 years of my professional career learning, honing and following those conventions, I certainly understand the impulse to preserve and protect them. But I have to wonder how much of that impulse is mere nostalgia.

Those conventions–the very definition of “professional journalism”–ultimately rested on a technological system that no longer obtains. So if those conventions are no longer necessary for economic and technological reasons, if the definition of “news” and the process of news-gathering is no longer constrained by the mechanical requirements of print and broadcasting, are those conventions still necessary for journalistic reasons? Could a new, equally valid set of conventions and definitions of “news”, in time, emerge to reflect the new technological system?

And should the government, or anyone else, stand in the way of that?

The un-reality of Partygate

The White House party crashers is not a subject that would usually occupy The Media Wonk. But here in Washington, with so many people running about, flapping their arms like frightened hens over the horror of it all, it’s a very difficult story to ignore. After the crashers themselves and White House social secretary Desiree Rogers declined to appear before Congress to explain themselves (the latter on separation of powers grounds) some on the Hill are talking subpoenas, three Secret Service agents have but put on leave and could lose their jobs, the crashers are lawyering up and the cable news networks have created logos and assigned theme music to the story, a sure sign we’re about to go wall-to-wall on this.

salahi-obamaFeh. I’m with White House press secretary Robert Gibbs, who had to remind overheated reporters at the daily brief Thursday that this isn’t exactly Watergate. It’s a security screw-up in which no one got hurt and the president was in no proximate danger. Worth an internal reveiw by the Secret Service and White House to be sure. But Congressional hearings? Please.

That said, if Congress is determined to start firing out subpeonas, here’s my suggestion: Bravo. The network has been asked little and said less about the incident, even though it was following Michaele Salahi around with a camera all day leading up to the state dinner as part of the preliminary screening for Real Housewives of DC. They followed when she crashed the Washington Redskins Cheerleaders reunion party, where she pretended to be a former member of the squad and made a nuisance of herself.  I’m sure more such stunts will surface in coming days (they always do, like sex tapes.) So why isn’t anyone asking Bravo about its role in encouraging, or perhaps even participating in,  what was, at a minimum, silly and annoying behavior and at worst, possible criminal activity?

Now would be the perfect time for a little reality show reality check. Bravo is owned by NBC Universal, which just announced its pending merger with cable giant Comcast, creating an new media behemoth with myriad conflicts of interest, potential antitrust problems and potential to have a significant and baleful impact on media diversity. Regulators at the FCC, FTC and DOJ are just beginning to pick through the details of the deal. I say, put Bravo under the hot lights and let’s see what the hell it thought it was doing encouraging a freak show act like the Salahis to crash a state dinner.