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 »