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 »

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 is Google really building?

Cloud Whatever the mysterious “entertainment device” is that Google is seeking permission from the FCC to test in the homes of its employees, it almost certainly is not a device for streaming music wirelessly around the home, as the Wall Street Journal speculated last week. While I’m sure it will be capable of streaming music wirelessly, I’m certain it will be capable of a lot more than that, too.

The device itself isn’t really much of a mystery. Google pretty much told us what it would be last year, at Google I/O 2011, when it showed off a pair of “Tungston” devices. Among other things it does, Google described the Tungston as an “end point for Google Music Beta,” that would retrieve music stored in users’ Google cloud locker and stream it wirelessly around the house.

That really can’t be all there is to it, however. For one thing, as noted by Tom Cullen, co-founder of Sonos, which already sells a device for streaming music wirelessly around the home, his company’s total annual revenue is only about $200 million a year, which would barely register for Google, which raked in $38 billion last year. For another, the “home entertainment device” referred to in Google’s 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 »

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 »

Face(book)ing the music

Cloud Facebook is rumored to be set to unveil major new media-related features at the f8 developer conference on Thursday, including partnerships with seven or eight leading music streaming services and the introduction of a music/movie/TV “ticker” to home pages that will let your friends know what you’re watching or listening to.

According to reports, a key element of the new streaming music integrations will be audio “bridging” between otherwise competing services. The idea is that, if you’re listening to Rdio, and a track goes up on your profile, a friend who uses MOG for music would be able to click on the track and listen to the same song even if they’ve never subscribed to Rdio.

It’s not clear from the reports exactly how that bridging will work, from either a technical or a rights perspective. Will competing streaming services need to have identical rights deals with the labels for a bridge to work? Will Facebook itself host and stream any music? How will conflicting DRMs and authentication systems be reconciled?  Read More »

Why publishers should embrace Amazon’s Netflix for e-books plan

Copyright As a lover of used bookstores and delighted owner of many dusty old, out-of-print volumes plucked from $2 and 3-for$5, bins I hate to hear myself say this. But if I were a publisher I would leap at Amazon’s purported plans to offer Kindle users a Netflix-like subscription plan for e-books.

Traditionally, publishers have had only two bites at the apple: the hardcover/trade paperback window, followed by the mass market paperback release. E-books have introduced a new format but it has not yet created a new release window. Instead, the e-book release is wedged in awkwardly between or alongside the traditional windows, cannibalizing both. 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 »

Apple still searching for a way to disrupt the TV business

Online Video The TV business is proving remarkably resistant to disruption. Google tried it, with Google TV, which met with disaster (Google is getting ready to try again, this time in Europe). Apple has tried it more than once but has yet to find a way to disrupt the TV content value chain to its own advantage.

Apple’s most recent bid — 99 cent TV show rentals through Apple TV set-tops — has proved a bust. On Friday, while most Apple-watchers were still buzzing about Steve Jobs’ decision to step down as CEO, the company quietly announced that its nine-month experiment with low-cost rentals would end. Read More »

Oops; looks like the iCloud will be televised after all

Digital Living Room Looks like my confident claim last month that “The iCloud will not be televised,” was bunk. Apple released a software update for Apple TV today that adds limited iCloud support.

Apple TV owners will now be able to watch TV shows they have previously purchased from iTunes through the set-top box. The content will be stored remotely in iCloud instead of on the Apple TV device itself, which has very limited on-board storage. Ironically enough, the new Apple TV feature is actually the first implementation of iCloud, as the audio service hasn’t actually launched yet.

Users can also now purchase new TV shows directly through Apple TV for storage in iCloud. Previously, Apple TV was streaming rental-only. Read More »

Walmart tries some e-commerce Vudu

Retail Walmart’s integration of Vudu into could help propel the online movie service the retailer bought 18 months ago into the first ranks of digital VOD providers, alongside Apple’s iTunes, Microsoft’s Xbox Live and Amazon VOD. Walmart’s web site gets over 5 million visits a day from shoppers, giving Vudu a high-profile platform on which to build up its user base. But there’s likely more behind the move than merely ramping up Vudu’s VOD business. Read More »

The Facebook OS

Social Networks The addendum to Zynga’s S-1 filed with the SEC yesterday is raising eyebrows for what it reveals about the extent of Zynga’s dependence on the continued goodwill of the social network.  But content creators and publishers should also take note of what it reveals of Facebook’s own ambitions.

Exhibit G to the addendum sets out (partially redacted) terms of the agreement between the two companies for something called the Zynga Platform. Zynga’s precise plans for the platform are not revealed in the document (they may be discussed in redacted portions). But it would appear to be a quasi proprietary game-development platform built by Zynga that would sit on top of the Facebook platform and allow third-party developers to create games that leverage Zynga’s deep integration with Facebook.

At the heart of the Zynga platform will be a “Facebook Zynga SDK: Read More »

EU wants to knock down digital borders

Streaming Video The European Commission on Wednesday kicked off a “consultation” (something like an agency rulemaking in the U.S.) that could fundamentally transform long-standing elements of film financing on the Old Continent.

The goal of the consultation is to gather views on “how Europe can seize these opportunities [for creators and distributors] and move towards a digital single market,” according to the press release. The comment period runs through mid-November, after which the commission will assess the need for Europe-wide legislation and make specific recommendations to the European Parliament. Read More »