i on digital content

Murdoch finally closes in on Dow Jones: report

noreply@blogger.com (ingrid) — Fri, 06 Jul 2007 12:49:00 +0000

The Business magazine today reports that Rupert Murdoch's News Corp. has finally clinched its $5bn deal to buy financial publishing powerhouse Dow Jones, and that a deal is expected to be announced next week.

Apparently, younger members of the Bancroft family -- which controls Dow Jones, owner of the Wall Street Journal -- had been pressuring the family to accept the offer, a 67% premium on the company's stock price when the offer was made in April, because they didn't think a comparable bid was likely.

The deal reportedly includes a legally-binding contract that will ensure the editorial independence of the WSJ. News Corp. can still hire and fire the top editors and publishers, but a five-member committee will be allowed to veto those decisions.

In what may be a very telling anecdote, though, the story points out that a similar (but not as strong) agreement had been made when Murdoch bought the Times and Sunday Times in 1981. A UK lawmaker refers to that agreement now as a 'fig leaf' used to get the deal approaved by antitrust regulators in the UK.

The scoop has some News Corp. pedigree behind it: it was co-written by Andrew Neil and James Forsyth. In addition to Neal's affiliation with The Business (he is editor-in-chief of Press Holdings, which owns The Business and The Spectator), he is a broadcaster who also once was very much also a part of the News Corp. stable, editing the Sunday Times for 11 years.

Here's a link to the original story.

Sky's the limit

noreply@blogger.com (ingrid) — Tue, 03 Jul 2007 16:44:00 +0000

A couple of notable news items today around the UK satellite TV provider BSkyB. In the morning, the Guardian ran a story that said Sky was in talks with Microsoft to offer its proposed DTT service over its new PC-based TV platform. The DTT service that Sky hopes to launch, pending approval from regulator Ofcom, will see the provider use MPEG4 technology to put four pay-TV channels into the spectrum currently being used by Sky to offer three free channels over the DTT service, which is sold as Freeview in the UK.

If it happens, it will be an interesting step in the convergence of media in the UK. Although Sky, which is 39.1% owned by News Corp., bought a broadband service provider a couple of years back, it is using this asset in its consumer business primarily as a triple play bundle. Putting its channels on Microsoft's Windows Media Centre will be the first time that the provider actually attempts to offer its services to the PC.

It also builds on the announcement Sky made last week that it would provide its premium channels to Tiscali for its IPTV service.

Presumably both of these moves are being done for Sky to test the broadband waters rather than really hope for big paybacks for the services. Indeed, if reports from moneysupermarket are to be believed, there's such a speed gap between what consumers are being promised and what they are getting that it may be a while because PC/broadband-based television services really take off in this country.

The other Sky story is that this week it launched a counter attack in its ongoing fight with cable provider Virgin Media over whether the latter was right to claim that Sky was really abusing its market position in negotiating over channels (or not negotiating, as the case may be). If the UK courts rule in Sky's favour after all, it will likely have a negative impact on Virgin Media's bargaining position in the future, not just over channels but for the price at which it potentially gets sold.

EMI: the latest on Terra Firma and Warner Music

noreply@blogger.com (ingrid) — Fri, 29 Jun 2007 11:38:00 +0000

An update on Warner's other, ongoing story, its will-they-won't-they bid for rival music firm EMI: Terra Firma is only slowly drumming up acceptances for its £2.5bn offer for the EMI Group. Yesterday morning, the private equity firm said it would extend the offer period to 4 July after only 3.53% of EMI's shareholders accepted the bid (TF will need 90% to get control of the company).

One Numis Securities analyst speaking to AFX said he thought most shareholders would not vote on the Terra Firma offer of 265 pence a share until Warner Music either made a counter bid, or officially pulled out of the process.

But investors might not want to hold their breath for too long: A story in this morning's Daily Telegraph notes that Warner insiders think there is only a 50-50 chance of Warner Music Group finally coughing up an offer. Issues in the balance include WMG's assessment of EMI's balance sheets, which WMG has only recently started to examine; and of course whether the EU competition commission will the give the deal its regulatory blessing.

If EMI doesn't fly in the end, it will make Warner's new business move into the Russian market (see my post from earlier today) all the more poignant and worth watching.

Warner Music: with EMI bid still up in the air, next stop Russia

noreply@blogger.com (ingrid) — Thu, 28 Jun 2007 15:42:00 +0000

Is it possible to run a profitable, legit business in a market that's already established a thriving but illegal trade in the same item? If you look at the music industry, and how it's tried to make money out of Internet music distribution in the wake of successful sites predicated on piracy (and of course cheaper/free content), it's not entirely impossible. But it may take a very long time, if it ever happens at all.

In the latest attempt by Big Music to create a market in a thriving but illicit environment, yesterday Warner Music and Sony BMG announced they would team up with Russian firm Access Industries to start a wholesale digital music distribution business in Russia and former Soviet-bloc countries.

Digital Access, as the JV will be called, will aim to create a new distribution channel for legitimate digital music, including wholesale deals for full-track downloads, ringtones and video clips. It anticipates its customers will be online music portals, mobile operators, rights owners and other content providers; and it doesn't have plans to launch its own retail operation.

The news comes at a time when the Russian digital music industry is thriving, but at a controversial cost. Sites like Allofmp3.com, owned by Media Services, have been hugely popular for music downloads, not just in the region but worldwide—it sells music by the megabyte, which works out to a fraction of what a track would cost on a site like iTunes. This has meant the site usually ranks as number-two or number-one for music downloads in different markets.

MediaServices says allofMP3.com has a license to operate from the Russian government, but in recent months, it has come under a lot of pressure to close down its international operation. Major credit card companies will no longer allow payments to the site, and it appears to be blocked in many countries. (In London, where I live, I cannot access the site or its mirror domain, allofMP3.ru.)

But like many a black market Lazarus, MediaServices has launched several other sites to siphon new business. Among them are the punny allTunes and mp3Sparks. These do allow credit card purchases and seem to work on the same business model as allofMP3.com. And I can access them in London.

Big music's domestic partner, Access Industries, is an interesting company to watch. It may hold the key for Western labels to at least get a foothold in the market, rather than continue to be taken for a ride by the likes of MediaServices. Access Industries is controlled by the uber-influential Russian-American billionaire Leonid Blavatnik, who also has investments in oil, aluminum, coal and telecoms (ie the typical portfolio of Russian ex-state commodities held by most oligarchs). He is on the board of Warner Music and owns Russian music labels Soyuz and Nikikin Records, which will also join the venture.

The plan is to launch Digital Access in the 4th quarter of this year.

UK: Google: pole position, Facebook: shooting star

noreply@blogger.com (ingrid) — Wed, 27 Jun 2007 10:03:00 +0000

News today that Google has managed to hold on to its top spot yet again in the rankings for most visited web property in the UK, bringing in some 28m visitors to its web sites in May 07, according to figures from comScore. Microsoft and eBay were ranked second and third, with 27.4m and 22.2m respective visitors to their sites. Yahoo was in fourth place with an estimated 20.6m visitors.

Interesting to note that Facebook had the biggest growth in traffic of all sites. Between April and May of this year, traffic on the social network went up by 30%, and comScore says Facebook's traffic has gone up by 2,123% over the last year. Despite this, with visitor numbers totalling 4.8m for the month of May, Facebook still doesn't make the top-20 rankings for the UK.

Part of the explosive growth surely must be down to the company having recently opened the site to new members--in the past it was restricted to people with college/university email addresses. That makes me wonder whether its growth will be sustainable in the longer term.

The way Facebook allows users to invite the entirety of their email address books in one click has definitely been used a lot lately. I'm not a high-volume Internet community type myself, but even I have had loads emails saying I've been added as a Facebook friend to other people's pages. (Each invite requires me to click in and approve the friendship, meaning more traffic for Facebook.)

When Google bought YouTube in 2006, there was a lot of speculation over whether Yahoo or a big media player would buy up Facebook. Founder Mark Zuckerberg has said he doesn't want to sell, but if this momentum keeps up beyond the 'signing up' stage, I won't be at all surprised if this actually happens.

Yahoo reshuffles, and Google follows it in Asia

noreply@blogger.com (ingrid) — Mon, 18 Jun 2007 15:29:00 +0000

Today's news, slipped in after the markets closed, was that Yahoo has finally reshuffled its top management, with Terry Semel out as CEO and Jerry Yang in. In an attempt to appease frustrated shareholders as Yahoo continues to lag behind Google in popularity (both for searches and for ad sales), Susan Decker has also been promoted up to the newly-created role of president to support Yang.

Jerry Yang, who was one of the founders of Yahoo, has in recent years focussed a lot of his attention on the company's growth in Asia. The search giant has struck some very fruitful deals in the East, for example partnering with Softbank in Japan to offer a hugely popular Internet and broadband service. And when things started to go awry in China, Yahoo decided to bank on a similar type of arrangement, striking up a joint venture with local partner Alibaba, of which it now owns 40%. It's also attracted controversy for complying with Chinese authorities to provide information about its users (with them subsequently landing in jail for making anti-government statements).

Human rights notwithstanding, if Yahoo was hoping that it had stolen a march on Google in the East, Jerry Yang might have to rethink the strategy. Last week, Google announced it would team up with the Chinese portal Sina to offer services on the mainland. Google already has a respectable portion of the market for search in China (some 19% according to Analysys International), but it has found it difficult to gain the same kind of dominance in China as it has in other (western) parts of the world. Now Google is following in the footsteps of its rival Yahoo in teaming up to target the market. Google has also taken a similar route in South Korea, and one wonders if Japan or other Asian countries might also be JV targets.

Chatting about this deal with our Hong Kong-based correspondent Craig, he relayed this anecdote: "I tried using Google inside China's great firewall and it was amazing how frustrating and useless it is as everything's blocked. The way China controls stuff, you really need a partner."

He went on to say that the Sina deal makes sense as China will continue to focus on holding up national Internet champions. China doesn't have laws enforcing joint ventures for foreign Internet companies that want to do business in the country (as it does for infrastructure-based businesses like telecoms). But the moves by Yahoo aligning with Alibaba and Yahoo teaming with Sina demonstrates that this seems to be the de facto route anyway.

Mobile music: to boldly go where no one has gone before

noreply@blogger.com (ingrid) — Mon, 18 Jun 2007 11:28:00 +0000

This was published last Friday on Total Content + Media's web site....

This week saw the launch of a new mobile music service called MusicStation.

For those of you who think that mobile music—downloading tracks over a cellular network and listening to them on your phone—has been a non-starter so far, you are right. In the UK, for example, only 1.7 million people used their phones to listen to music downloaded from operators in the course of a month, says M-Metrics; another 5.4 million used their phones to listen to sideloaded music (taken off PCs). But compare both of those figures to the number of MP3 players in use in the UK: nearly 19 million; or the number of mobile phones in the UK: over 60 million.

Even Rob Lewis, the CEO of Omnifone (the company behind MusicStation) admitted to me that “Mobile music today is not a grown up experience.”

But put your scepticism aside! MusicStation is hoping its new approach will prove you wrong. It claims to have the most comprehensive catalogue—having signed global agreements with the four major labels of Sony BMG, Universal Music, Warner Music and EMI, and many of the minor ones—the most deals with mobile operators to run the service, and the most agreements with important vendors to preload the service onto handsets (although it admits that the number-two handset maker Motorola, is not pre-loading it on its music models just yet).

And instead of selling a la carte tracks, it is based around a subscription model, where a user pays one price per week for an unlimited amount of music. (The catch is that you don’t get to own any of the tracks you listen to.)

It’s no surprise that the labels have signed up—after all, they couldn’t possibly be doing any worse in mobile music than they are now. What’s interesting is that the operators and vendors, who have usually relied on exclusivity in their data offerings, have all agreed to try out a collaborative approach. (Compare this for example to AT&T, which has a five-year exclusive agreement to distribute the iPhone in the US, hoping this will migrate mobile users to its network.)

Still, MusicStation is not going all guns blazing from the start: the service launched first this week in the tech-happy but small market of Sweden, not with the incumbent but with Telenor’s network, charging users €2.99 per week for the service. Lewis tells me that the “lion’s share” of the revenues—well over 50%—will go to the music labels. Operators will get a cut in the billing and also a provision for letting the data pass over the network for no charge.

Lewis says Omnifone does not want to target the US market at this point because of the high penetration of MP3 players and the patchy availability of high-speed mobile data networks, which are necessary for the service to work.

“It’s really a landgrab right now in the digital music market, and we can’t catch up in the US,” Lewis told me when I met him earlier this week. Omnifone will instead aim for Europe and Asia, where they want the service to be on 100 million devices in the next 12 months. But the company would not give a target for subscriptions, or indeed how many would be needed to break even as a business.

There’s a lot to be pointed out in how MusicStation will differ from what is already available on the market today.

For one, because the tracks you hear will not be download-to-own, they will be quicker to get from the network than ordinary tracks.

And given that people have not been prepared cough up much money at the price points set for a la carte mobile music today (or any digital music, for that matter), it’s about time that the subscription model be tried out, even it’s unfamiliar to the music industry (and crucially to music consumers). It’s worth noting MusicStation isn’t the only one trying to push this: both Yahoo and Rhapsody are also trying out subscription models in their PC-based music services.

Plus it’s launching at what Paul Goode, an analyst at M-Metrics, told me was “the perfect time,” with “a raft” of music phones about to hit the market later this year. He said that of the 730 phones in the UK market today, only about 10 could really be classified as “true music phones.” An appallingly low number like that goes some way towards explaining why mobile music hasn’t worked so far.

A few thoughts on News Corp. and Dow Jones

noreply@blogger.com (ingrid) — Fri, 15 Jun 2007 14:01:00 +0000

News Corp. is slowly inching its way into getting what it wants out of Dow Jones—which is of course to own it. There's been a huge amount written on this story since it broke several weeks ago, not least by DJ publications themselves. One thing hasn't been pointed out by anyone, though, is the irony of a company that has made free market economics the cornerstone of its publishing content, concerning itself not with the best offer it may ever get, but whether its legacy and integrity will be maintained if they decide to sell. I'm not saying this is bad, but it does underscore how any theory can often be undermined when it comes to your personal predicament.

It was also interesting to read in last week's The Business magazine (the one that was once a weekly broadsheet and is published by Andrew Neil, a former News International acolyte) about how Murdoch Senior brought along Murdoch Junior (that is, James) along to the meeting he recently had with the controlling Bancroft family—their first face-to-face. James of course had experience at the News Corp. Asia pay-TV subsidiary Star before moving to the UK to head up BSkyB, and this was certainly one of the reasons why he would have been brought into the meeting (since apparently the Bancrofts and DJ journalists are concerned about Murdoch's chummy relationships in China). But it was also a way of telling the sceptical Bancrofts, "Hey! I'm a family guy, too, and I care about legacy as much as the next one."

It may have also been Rupert's way of introducing the Bancrofts to the man who may end up getting tasked with running the business, should it become a division of his family's empire.

James Murdoch has definitely come a long way since his scruffier days of running a small music label in New York City, shrugging off the inevitable family association that has now become the centre of what he does, and a huge force in the media industry.

The Daily Telegraph offers free print ads to online recruitment advertisers - Brand Republic News - Brand Republic

noreply@blogger.com (Unknown) — Tue, 05 Jun 2007 07:58:00 +0000

The Daily Telegraph offers free print ads to online recruitment advertisers - Brand Republic News - Brand Republic

OK, so it may be a short term initiative, but how the tide has turned. It wasn't so long ago that publishers gave away presence on their website to clients who booked in print, but now the Daily Telegraph has turned the tables offering free print advertising in return for placing a recruitment listing.

I don't know what the Telegraph online recruitment ratecard looks like, but I would presume the value add is worth more than the purchased product!

Week in review: News Corp. and fiestas

noreply@blogger.com (ingrid) — Mon, 04 Jun 2007 16:43:00 +0000

(from the TC+M web site on Friday if you missed it...)

It's been another good week for big fish eating up smaller fish in the media world. This week that seemed to largely translate to big media giants consolidating smaller social media plays into their strategies.

On the same day that CBS snapped up the hipster online radio community last.fm for a relatively modest sum of $280m,, News Corp.'s online division, Fox Interactive, itself bought up two more social networking sites: the online photo organising site Photobucket and Flektor, a site that lets users create mashups, slide shows and other presentations of their user-generated content.

The two unknown-value deals will give News Corp.'s social networking sites, namely MySpace, another way of trying to monetise its still-growing user base.

Both sites are already popular with MySpace users who use them to incorporate graphics on their pages, so in a sense it was a matter of solidifying a relationship already in place.

It will mean that Fox will be able to embed the functionality of Photobucket and Flektor directly into its own site, which will make the experience easier for users.

But more importantly it helps the company consolidate any traffic that might be passing through Photobucket's and Flektor's services for its own financial gain.

This in fact was a touchy subject between Photobucket and MySpace only weeks earlier. MySpace had started blocking Photobucket usage when it said the image sharing site was using its service to encourage users to run ad-supported slideshows on their pages.

Now that MySpace owns the two sites, any potential ad revenue gained in such a way will be theirs to keep.

According to Fox, the two products will continue to operate as standalone entities and will still be able to be used on other sites like YouTube and Facebook.

(For a closer look at the Last.fm deal with CBS, you can read a blog entry I wrote on the day of the deal. There will also be a longer analysis, including an interview with one of the Last.fm founders, in the upcoming monthly issue of TC+M, out in two weeks).

Burritos in China
Saw an interesting item on the wires today about how Grupo Televisa, the largest broadcaster in Mexico, has done a deal with the Chinese government to export its reality TV shows and soap operas to the Mainland. Chinese broadcasters, like broadcasters in many other parts of the world, already dub Mexican programmes for their market, but this deal will let Chinese producers recreate the various shows for their own market.

The terms of the deal were not disclosed. But what stands out about this to me is that despite the huge potential of the Chinese market, there seems to be a distinct dearth of content to fill the airwaves.

Back in Mexico, the Chinese government broadcaster CCTV will be providing a feed of its channel to Grupo Televisa, who will deliver it in its domestic market dubbed.

The two countries of China and Mexico may have more in common than previously thought, in addition to their tastes for telenovelas and raucous variety shows with mariachi bands. This week, the high court in Mexico struck down a ruling that effectively lets the country's two dominant TV companies, Grupo Televisa (70% of the market) and TV Azteca (30% of the market), to continue to stay on top. In fact, the CCTV deal shows that today there is an opening for smaller new channels to emerge, but it takes a deal with a big player to make it happen. Perhaps in the future you won't need a tie-up with one of the big-two to do this.

Last.fm gets snapped up by CBS

noreply@blogger.com (ingrid) — Wed, 30 May 2007 14:16:00 +0000

When Google bought video sharing site YouTube for $1.65bn in 2006, it triggered a lot of media companies into action. Among them, the longtime U.S. broadcaster and television producer CBS set out to position itself as a forward-thinking member of the digital media vanguard.

“We don’t want to buy YouTube, we want to buy the next YouTube,” said Leslie Moonves, the chief executive of cross-media broadcaster CBS, not long after the deal.

Today CBS made a little move toward filling in Moonves' strategy when it announced it would pay $280m for online user-generated radio site Last.fm.

The London-based company has been quietly building up a loyal user base since 2002. When I recently spoke to one of the founders, Martin Stiksel, he told me that on average the site has 20 million active users every month and is 'generating substantial revenue' from several income streams, from amazon music retailing to ticket sales.

There's some interesting synergies between CBS and Last.fm. I'll be curious to see if the two companies them. For one, CBS has relaunched its own music label, CBS Records, which had originally been sold to Sony. And while Last.fm is in many ways a product of the web 2.0 juggernaut, it's also run a little like a broadcaster: it may have 20m active users, but it only has some 5.5 million registered visitors. That means that like CBS's TV channels, it banks on advertising to a critical mass for revenue generation.

I have to say, though, that as a long-time fan of Last.fm, one of the things I've always loved about it is its quirky, quiet approach to offering music: the exact opposite of many radio stations, and definitely the opposite of the 'big media' kind of experience offered by other online radio sites like Yahoo's.

It's also been frighteningly good at sussing out my tastes (if at times I seem to get into jags where all I get are songs by The Decemberists).

For now the management will remain in place and all they can talk about is how the deal will give them the money to do all the things they've always wanted to do. I'll look forward to seeing if CBS really lets Last.fm keep control of the jukebox.

Google Zeitgeist Europe 2007: Frenemies become friends of me

noreply@blogger.com (ingrid) — Fri, 25 May 2007 16:45:00 +0000

[this was originally published on www.totalcontentandmedia.com]

The days preceding a long weekend, especially in an early summer period, can be slow for news. This conversely makes it a good week for pow-wows among the titans of the media industry.

Monday kicked off with Google Zeitgeist Europe outside of London, a get-together for high-level executives—heads of industry, media giants, and leading technologists—to speak about Google and the latest in how technology and information will impact our lives. Of course, if the event's host has its way, those two topics will become even less mutually exclusive as time goes on.

Journalist attendance, according Google's European PR, was restricted to a "handful of general columnists" (meaning I was not invited). This also meant there wouldn't be lots of press coverage.

So, I decided to use Google Zeitgeist as to test of the search giant's usefulness in information gathering today.

The advances of social media and online video are such that many of the event's speeches were posted around the Internet. But there was a lot less 'chatter' about the event than I thought I would find. Perhaps this is a testament to attendees' loyalty to the big G.

Most of the speeches were quite high level—eg, the CEO of Orange, Sanjiv Ahuja, spoke about the need to extend communication to all parts of the developing world. He also pointed out that Orange's year-on-year revenue growth in Africa is 'north of 30%' and its margins in the region are some of the highest. "As human beings, we should be doing business everywhere," he concluded.

Stelios Haji-Ioannou, founder of Easy Jet and its affiliated companies, talked about climate change, chiding his executive audience for using private jets to get to events like Google Zeitgeist.

Among the info-bytes I came across, Google makes 40% of its advertising revenue outside of the US, with 19% in the UK alone. This is interesting information because in the past the company's not broken out these figures. (I found this on a Twitter entry from Loïc LeMeur, a social media entrepreneur and obsessive-compulsive user of its many tools.)

I also found an interview between Google's chief Eric Schmidt and the editor of the Economist, John Micklethwait. This had originally been posted on YouTube by Google, but curiously the first result for it in Google's weblog search was on what appears to be a Ninja-fan blog called Mung Ning Ryu. I'll leave it to you to make the connection between Ninjas and Google.

(Google incidentally has posted a number of other videos from the event on YouTube, many of which focus on topics like the environment.)

Schmidt uses public appearances to articulate what Google's ambitions are as a business. But he also spends quite a lot of time acting frankly surprised at the company's impact.

"We're beginning to see significant issues about our role in the world," he said during his interview at the Zeitgeist event. "We're trying to be more transparent and clear [about] how information is being used and what is available. "

Acting wide-eyed is not a bad way of deflecting negative attention Google might get as a result of its newfound power. But this doesn't work all the time:

Dylan Thwaites, CEO of search marketing company Latitude, he writes in his blog: "The audience got the chance to ask [one panel of advertising executives] questions – ostensibly about the panel topic “branding”. Zero interest in branding - two of the three questions were on the theme 'Is Google the enemy?' [Martin] Sorrell [WPP's CEO] says he invented the word 'Frenemy' to describe his $200m relationship with Google. Nikesh Arora, CEO EMEA for Google, pretended to mistake this for 'Friend of Me', so Sorrell now uses Froe (Friend /Foe). All very light hearted, but at the root of this there is an earthquake of change."

More specifics on change were not spelled out by attendees, but there has definitely been a shift in how Google thinks about itself. Back in his Economist-editor interview, Schmidt said: "One of the key messages [to Google employees] in the last month or two is that we want people to be focussed around the core business of Google, which is textual advertising." Note that he did not say "search," which used to be what Google would say their core business was.

What about the future? Danny Rimer, general partner at VC firm Index Ventures, served as the moderator for a group of European entrepreneur panellists who spoke on the second day of the conference. Speaking with Nathalie Massenet, the founder of online retailer net-a-porter.com (a video I also found on Loïc LeMeur's blog), he made a distinction between exploration and fulfilment online: some sites are good at one, some are good at the other, but it's very hard to be good at both. He seemed to think that net-a-porter.com was succeeding, though.

HSN launches interactive TV in the US: why the wait?

noreply@blogger.com (ingrid) — Thu, 24 May 2007 13:33:00 +0000

Saw today that the IAC/InterActive Corp.'s Home Shopping Network is launching a new interactive TV service in the US where viewers will be able to use their remote controls to buy goods being peddled on television. HSN is initially teaming up with satellite broadcaster EchoStar to offer the service, which means it will at first reach 12 million households.

I find it interesting that the US has taken so long to implment an interactive TV service. In other media, such as online, it has been a trail blazer. Just think of how almost all the innovations--and popular surge in usage--in 'Web 2.0' sites has come out of the US.

The UK, which has adopted a wait-and-see attitude regarding other new services such as online TV, has for once been a leader: the red button on a UK consumer's remote has become synonymous with interactive elements for a range of channels, from news and sport networks to home shopping programmes.

Yet maybe there has been some method to this US madness. The article notes that in trial markets interactive TV is accounting for 10% of all sales. I know that in the UK there have been lots of hiccups with very low usage for interactive TV services—despite their ubiquity.

The trend right now for broadcasters is to inject money into developing their online presence rather than expanding how to make their traditional TV services more dynamic. But I wouldn't be surprised if the rise of user-participation in online media has a knock-on effect in flagging interactive TV services. Perhaps being a late adopter in this case might not have been such a bad move after all?

Facebook: a new social media ad model

noreply@blogger.com (ingrid) — Mon, 21 May 2007 18:46:00 +0000

Following on from Rob's post on the growth of Internet advertising, a lot of people have been noting how ad spend online is still wildly disproportionate to the amount of people surfing the net and spending time online.

One area this is particularly true is social networking, where sites like MySpace and Bebo are drawing in huge crowds but not the ad dollars to match it (although this is growing I hear).

Now one of their newer competitors, Facebook, is getting ready to initiate a new spin on how to promote brands and products on social networks: sell pages to partners like Amazon and Apple and Ebay (I guess...), where they can create portals to sell their wares, and then make it possible for Facebook members to embed into their pages links/portals/widgets to links to these. According to this article Facebook won't be taking a cut from the sales so presumably they will be charging a pretty penny for the privilege of accessing Facebook users (anonymously of course).

(I'm still waiting for a reply from Facebook about all this directly. Will post it here when/if I get it.)

From what I understand this isn't being done by the other sites yet but if the premium on these sites is their dedicated eyeball count, then this could be a good way of capitalising on it.

And it positions a social network like Facebook in a new position as a portal of sorts, like Google or Yahoo but more recommended.

Internet advertising exceeds 10% for first time

noreply@blogger.com (Unknown) — Mon, 21 May 2007 13:39:00 +0000

WARC News - WARC.com
Research for the Advertising Association yearbook compiled by WARC noted that for the first time in 2006 internet advertising in Great Britain exceeded 10% of the total. As they estimated advertising expenditure in Great Britain as £19 billion in 2006, this is nearly £2 billion online!

Television was still the biggest element of spend, followed by Press (inc newspapers and magazines), but both saw falls in their share.

Week in review: Endemol and Telefonica's fear factor

noreply@blogger.com (ingrid) — Fri, 18 May 2007 17:03:00 +0000

(Originally published in Total Content + Media earlier today.)

Among the noteworthy M&A deals this week in the media industry—they included online advertising companies snapped up by Microsoft, WPP and AOL and Thomson finalising its deal to buy Reuters—Telefonica finally offloaded its 75% stake in Endemol to the tune of €2.6 billion.

It sounds like a nice sum, except for the fact that the Spanish telco had actually bought the stake in the TV production company in 2000 for €5.5 billion.

The consortium of successful buyers was led by Endemol’s founder, John de Mol and his investment vehicle Cyrte Fund, and included the Italian media giant Mediaset as well as Goldman Sachs.

"John de Mol did a great deal," one executive from a major broadcaster, told me this week. "He’s basically bought back his company for almost half of what he sold it for a few years ago! We should all try to do that.”

Putting aside the obvious waste of money in buying Endemol at a high and selling it for a low, one has to ask whether Telefonica would have ever been able to capitalise on its asset.

Endemol has been hugely successful in its traditional market of TV, producing franchises in largely in non-scripted formats: shows like Big Brother, Deal or No Deal and Fear Factor now grace millions of TV sets in dozens of countries.

But it’s also been setting the pace in new markets, too, developing mobile-only programming, games and products for other new formats like IPTV. Endemol has made some interesting progress here, signing distribution deals not just with Telefonica properties like mobile operator O2 but with a number of other distributors (mobile and otherwise). And it partners with a number of content companies to develop the products themselves.

Now it may not be your particular cup of tea, but a recent product, a mobile-only TV programme called Get Close To…Sugababes, was done in partnership with Universal Music, appeared exclusively on the O2 network, and really works to push the idea of how to use a small, short mobile format in a compelling way not just for the viewer, but also as part of the programme itself.

In the mobile space alone, Endemol claims that mobile users have downloaded 10 million minutes of Endemol-produced content, and that one million people have streamed endemol shows on their phones.

But all this still didn’t seem to be enough to make Endemol a compelling asset for Telefonica to keep, or to raise its price above what the telco had paid in 2000.

To be fair, Telefonica did try to work some convergence magic on Endemol over the last seven years. This apparently was why the telco didn’t sell it sooner. According to a source, Telefonica had actually wanted to sell off Endemol as far back as 2005 but held off after it bought mobile phone operator O2.

“They didn’t want to upset the relationship between the two,” he said, referring to the deal Endemol had struck with the mobile operator to run text voting for programmes like Big Brother, a lucrative mobile data deal for O2.

“Telefonica seemed to do the right thing buying Endemol,” said the executive. “They just did it at the wrong time.”

Looking to the future, early days under its new owners might be rocky for Endemol. From the moment the deal was announced, there were reports that the company would lose some key executives. Stephane Courbit, the chairman and founder of Endemol France, who was one of the unsuccessful bidders, said he would leave if John de Mol returned to the helm. And the chief creative officer and chairman of Endemol UK, Peter Bazalgette is also rumoured to be eyeing up the exit.

Mediaset, the Berlusconi-owned Italian media conglomerate, may have less time for new projects like mobile TV and IPTV as previous owner Telefonica did. Mediaset has been quick to release a statement saying that Endemol will retain its editorial independence, but this wouldn’t rule out trying to shape the production company’s product line up to better fit with its own media assets.

And Goldman Sachs could stay on the sidelines as a pure financial punter, but it too wouldn’t be in this deal if it didn’t think it could make some money out of it at some point. Perhaps those bankers know something that Telefonica did not.

Microsoft Pays $6 billion for aQuantive: Massive Ad Network Consolidation Is Occuring

noreply@blogger.com (Unknown) — Fri, 18 May 2007 13:50:00 +0000

Microsoft Pays $6 billion for aQuantive: Massive Ad Network Consolidation Is Occuring
Advertising in the digital arena is one of the hottest subjects around at the moment, especially as we observe numerous reports of falling value of and importance for traditional media. Microsofts aquisition of aQuantive is yet another demonstration of just how seriously the major IT players are taking the opportunity to become media (or at least advertising) companies, coming as it does hot on the heels of Googles aquisition of Doubleclick.

Another demonstration of this shift comes from the Magazine Publishers of America who have noted 57 major digital initiatives in Q1 2007, ranging from blogs to podcasts to video to UGC. For a full list of those noted, visit the MPA website

Interactive TV: 1; Online TV: 0

noreply@blogger.com (ingrid) — Thu, 17 May 2007 10:12:00 +0000

Went to two conferences this week, FT Mobile Media and Online TV and Video, organised by Informa.

Ironically, one message that came out of the Online TV conference was that, in fact, computers and broadband still don't have a patch on traditional TVs when it comes to viewer numbers for video.

Channel 4, which launched its 4OD on-demand service at the end of 2006, has been running it simultaneously as a digital interactive service with pay-TV providers (Virgin Media, Homechoice and BT Vision), and as a PC-based service accessed via broadband. 4OD is a mixture of catch-up TV with a selection of archived programmes and films.

"4OD is overwhelmingly viewed more on TVs than it is on PCs," said Cosmo Lush, head of product development, told me. "I would say that pay-TV viewers outnumber PC viewers at a ratio of four to one."

He did point out that the PC user base has doubled since Channel 4 added extra free content earlier this year--but that potentially means that only one in eight people were using the PC service before.

One issue might be the hurdle of getting people to download a client onto their computers just to be able to use the service. (Another exec I met a few weeks ago from Channel 4 noted that while more men than women downloaded the client, women tended to use it more regularly-- meaning that among those that bother to download it, some never actually register and use it.)

But Lush at Channel 4 said the PC version of the service "will continue to evolve."

They have good reasons to keep pushing it, even if it's much less popular than the TV version. Since Channel 4 can offer the PC version direct to consumers without the need for partnerships with pay-TV providers, it gives them potentially a much better return on any revenues they make from it (from advertising or subs for premium content).

And it's of course so much easier to promote it and get people to click straight into the service direct from other places online. (Lush pointed out that search advertising, a la Google and Yahoo, has been an excellent investment for them so far.)

That's not to say that there's not room for developments of the TV version of 4OD. Channel 4 has yet to sign up the U.K. pay-TV market leader, BSkyB, to the service.

MySpace moves up the age ladder

noreply@blogger.com (ingrid) — Wed, 16 May 2007 17:10:00 +0000

Is MySpace getting older and wiser?

Yesterday the News Corp.-owned social networking giant launched their new 'professional content' video service. (This is presumably where the News Corp./NBC Universal video will fit in once it is rolled out this summer.)

Of course most of MySpace's new video partners will be serving the 16-24 user base that makes up the bulk of MySpace members: Kush TV, LX.TV, Ripe TV, Octane TV, Flow, Young Hollywood and VBS.tv will be among the companies supplying content to its new lifestyle and news channels.

But other partners - National Geographic, the New York Times and Reuters - are definitely more synonomous with a distinctly older kind of consumer.

True, one of the sample segments from Reuters will be 'off-beat news stories from around the world' (and won't those be funny!) but there is every possibility that MySpace will tap more of what Reuters is known for--financial data and analysis--as (and if) the partnership develops.

The deal also gives companies like National Geographic and New York Times another way of trying to refresh their own demographic pools, which are of course getting older too.

Total Content + Media

noreply@blogger.com (Unknown) — Tue, 15 May 2007 13:31:00 +0000

Total Content + Media

Informa to buy Datamonitor. It's a funny old world. Ovum buys RHK. Datamonitor buys Ovum, and now Informa buys the lot. At the same time, as recently as the end of last year, Informa is fending off the advances of Springer Science & Business Media.

Bottom line is yet another list of quality brands get lost to Informa. How long will it be before they buy Yankee, Gartner et al and totally remove the option of independent research?

Hello again, and a week in review

noreply@blogger.com (ingrid) — Mon, 14 May 2007 09:07:00 +0000

Apologies for the extended neglect of this blog. It will start to get updated much more regularly from now on...

The following article was published last Friday on TC+M's web site, which you can access free of charge for the latest media news: http://www.totalcontentandmedia.com

The Cable Cabal

As the dominant pay-TV service in a market of committed couch potatoes, cable has had a good ride in the U.S. so far.

This week, the feelgood factor continued as media figures extolled the virtues of cable at The Cable Show, the annual confab for the National Cable and Telecommunications Association (NCTA), in Las Vegas. Jeff Bewkes, the COO of Time Warner, said he believed that cable could potentially rival the Internet in terms of its flexibility of use and attractiveness to advertising.

The investments the cable operators have made in innovation have paid off so far: Comcast, Time Warner Cable and Cablevision have all posted double-digit revenue growth as a result of their triple-play service offerings.

Now some cable providers are getting even more bullish and suggesting even bolder offerings, such as screening films as they are premiered on big screens.

Outside the Vegas desert, there are clouds, of course.

In addition to heavy investment from IPTV competitors like Verizon and AT&T, U.S. cableco's are bracing themselves for regulation that could threaten their pole position.

In the name of letting parents opt out of violence-peddling channels, the FCC is considering forcing companies to liberalise how they offer channels, from their current package structure to an a la carte selection. This would hit margins hard for cable operators.

They may also be forced to 'unlock' their digital set-top boxes so that people potentially can use them to switch from one provider to another. But as yet neither of these issues is squeezing margins—and the powerful cable lobbies will make sure that it stays this way.

Further afield, the message of strength coming out of the U.S. this week was countered by a more sombre picture in the U.K, where Virgin Media reported an operating loss of £15.3m for the quarter that ended 31 March, compared to a profit of £9.2m for the quarter before.

Virgin Media is blaming satellite competitor BSkyB. The breakdown in negotiations to carry Sky-owned channels on Virgin Media's cable service has played a role particularly in terms of customer acquisitions, said chief executive Steve Burch. These fell by 11.9%, their lowest level for a year, with subscribers to its cable TV and broadband services falling by 46,900 over the quarter. A year earlier subscribers had grown by 28,500.

But another issue for U.K. pay-TV providers is what the addressable market is for new customers really is.

When BT launched IPTV at the end of 2006, it wanted to target people not yet receiving any kind of premium TV service. This is actually a big number—at the time of the BT Vision launch, it was some 14 million homes (compared to 11 million already getting pay-TV services). But so far BT has only reported some 5,000 subscribers, and Virgin Media too has shown some difficulty in reaching what Gavin Patterson, the consumer products MD for BT Vision, calls 'the refuseniks.' BT incidentally kicked off a £1 million ad campaign this week; we'll see where that takes them.

The silver lining for Virgin Media has been in the area of triple play. Currently 42.9% of its subscribers take television, broadband and phone services in combined packages, compared with 34.9% in the year earlier period. This however is still not offsetting other losses as it has in the U.S. market.

One example of how to cope with the loss of select content on your cable network might be found in Germany. Premiere, the largest cable provider in the country, had some good news this week as it swung back to profit in the first quarter (which ended 31 March), posting net income of €4.5m compared to a loss of €18.3m in the same quarter a year ago.

While revenues decreased to €224.3 million versus €273.3 million a year ago, largely on a reduced customer ARPU (€261 from €308), Premiere's biggest achievements were cuts in its operating costs by some 29% over the same period the year before; and a rise in customer acquisition rate over the fourth quarter of 2006: 50,582 versus 36,058. The total number of customers to date is 3.46 million.

Premiere is still adjusting to losing exclusive rights to show the highly popular Bundesliga football league fixtures, which went to its competitor arena, owned by Unity Media.

Premiere has a resale deal to continue providing coverage of the games, but there are still questions in the air about how this will impact the company. Currently the marketing around those channels is being investigated by Germany's Cartel office, and the outcome of that may affect Premiere's full-year forecasts.

Yet Premiere is not hanging its star on the outcome of the Bundesliga decision, or even on its successful cost cutting. Later this year, it's launching a new pay-TV satellite package. Using a new wholesale service from SES, it will play on the long-tail concept and offer a variety smaller channels that have not yet been seen in the German market. The name for the service? Premiere Sky.

So what happened to the digital revolution?

noreply@blogger.com (Unknown) — Tue, 20 Mar 2007 14:04:00 +0000

The IHT reports that a recent survey of global magazine and newspaper executives at Magazine 2.0, in Hannover last week found only a few were making more than 3% of their revenues from digital. And unsurprisingly that most revenues that are being made are from advertising and subscription referrals, not from direct content sales.

Philippe Hautrive, EVP for business operations at Hachette Distribution Services speculated that this would change once consumers embrace a handheld viewer of magazines and newspapers, but surely this isn't true? The recent experience of the MP3 players seems to demonstrate that given the choice consumers prefer to have their music and their mobile phone as a single device, but I doubt many are going to want to carry a mobile phone / device large enough to read a newspaper on....

The week in review: Fast moves

noreply@blogger.com (ingrid) — Mon, 19 Mar 2007 13:02:00 +0000

This was last Friday's week in review from the web site...

The week kicked off with an interesting series of M&A news items coming out of Italy. Swiss incumbent operator Swisscom has made a €3.7bn bid for Milan-based Fastweb, the triple play pioneer. It’s an interesting move from the usually staid Helvetic republic. Swisscom has itself been trying to make a business out of IPTV, not terribly successfully: after many technical hiccups, it launched its own Microsoft-powered service a year behind schedule. The company now says it has picked up some 30,000 users since launching the service in November. But a tie-up with Fastweb could inject Swisscom with some expertise from a veteran of the IPTV/triple play model. And it could mark the establishment of one of the first international IPTV players in Europe.

That is if Mediaset decides to sit back after all. The Silvio Berlusconi-owned concern, which is Italy’s largest media company encompassing television, film and publishing, is also reportedly interested in Fastweb. Although the company denied such interest, late Thursday another report emerged that seemed to say Mediaset wouldn’t rule anything out as far as Fastweb was concerned. Mediaset is also figuring very strongly in speculation about possible buyers for TV production company Endemol, which seems to finally, finally be getting ready for a sale by majority-owners Telefonica.

The executives that ruled out a Fastweb buy said that Mediaset wanted to focus its attentions on an Endemol bid, but I can see that if private equity houses and others start to look like more credible Endemol buyers, perhaps Mediaset might just pick itself up and look for a more local buy like Fastweb. In any case, both Endemol and Fastweb would add bows to Mediaset’s strings, albeit of entirely different tones.

On the subject of dominant media companies, ITV, the UK’s largest commercial broadcaster, had to take another big step down in interactive TV this week, as it formally lost its broadcast slot for its currently suspended ITV Play channel. ITV Play had been under major scrutiny by regulators for irregular accounting in its various interactive, money-based games. The issue of how consumers are charged for premium rate interactive TV phone lines, used not only for games like the ones on ITV Play but for all those popular voting-based shows like Big Brother and Pop Idol, is still not resolved and could have very far ranging repercussions in the industry, considering how popular the participation format has become.

In the UK, it’s not just the commercial broadcasters getting heat from regulators, though. The BBC said that it would suspend its BBC Jam educational web site from 20 March after complaints from educational companies that the site was putting commercial education publishers at an unfair disadvantage because of the BBC’s market dominance. It’s crazy that a non-profit company like the BBC can get in trouble for creating a good educational site—I’d always thought that the less profit-motivated educational tools are, the better.

The suspension of BBC Jam was also interesting because it’s one of the first instances in which the BBC has been taken to task for potentially stifling competition amongst commercial organisations. This is the same issue that is at the heart of other new initiatives that the BBC would like to pursue, such as its iPlayer, which some have said could put other content companies at an unfair disadvantage in the market. We should watch this space to see how this plays out.

Viacom this week took their dispute with YouTube one step further by filing a $1bn lawsuit for copyright infringement. Viacom’s argument is that Google’s YouTube has profited enormously from the traffic they’ve had over the site from people who come to view clips from programmes owned by Viacom—these include shows from Comedy Central, Nickelodeon and MTV among others. And, the argument continues, despite Viacom’s request earlier this month for YouTube to remove some 100,000 clips from the site, other clips continue to be posted and YouTube is not doing enough to stop the problem at the gate.

Various pundits think that the suit is more posturing than anything else, and that there might be a settlement out of court in the end. The outspoken Internet entrepreneur Mark Cuban, who himself is subpoenaing YouTube for the names of people who upload unauthorised clips from movies made by his production company, pointed out in his blog that whether or not Viacom settles or goes through with the suit, it will be a win-win situation, since at most the legal fees could be around $10 million but a settlement would be much more substantial, and certainly a $1bn award would be even more substantial than that. And in any case the company will most likely come out with an agreement not unlike the ones struck between YouTube and music companies. The upshot will be more proactive filtering from YouTube and/or legitimate content posts from Viacom itself.

I think that other companies may well follow in Viacom’s shoes, but just as many will continue to strike deals with this video giant, until the next virally popular service comes along.

IPTV goes international: Swisscom eyes up Fastweb

noreply@blogger.com (ingrid) — Mon, 12 Mar 2007 15:52:00 +0000

Today presented a new chapter in the young story of IPTV: Swisscom made an all-cash offer of €3.7 billion for Fastweb, the Italian broadband company that has been a pioneer in IPTV and triple play services. If the sale goes through, it could mark the first instance of an international IPTV merger.

A tie-up would put Swisscom back on the map as an international player after it spun off/outsourced its international carrier network in a joint venture with Belgacom.

Of course, what Swisscom would be buying with Fastweb wouldn't be an international wholesale business but an Italian retail customer base and expertise in television/IPTV services. Fastweb, which has 1 million customers, was called an "innovation leader" by Swisscom's CEO Carsten Schloter in a conference call.

Reportedly, Swisscom had tried to expand last year by buying Telekom Austria (another IPTV leader) but that deal fell through.

Swisscom could do with the Fastweb experience: it has had some hiccups with its own IPTV service, Bluewin. Bluewin, which is powered by Microsoft's IPTV software and servers, launched last November, a year behind schedule (technical/quality of service issues were to blame, according to reports). The delay was a major embarrassment to Microsoft, which had been touting the Swisscom deployment as a key deal in its strategy to target the telco market for TV services.

From what I can see, telcos offering IPTV will have a long road ahead of them before those services are profitable. Operators in the US and elsewhere have spent billions on new networks. And even Fastweb, which has been around since 1999 and has benefitted from using some fibre that Telecom Italia had in the ground already, says that it expects turn a net profit for the first time only this year. With that in mind, getting some scale into the business through acquisitions will only help them along that road.

The week in review: new ideas for avatars

noreply@blogger.com (ingrid) — Mon, 12 Mar 2007 15:49:00 +0000

This was published last Friday on the Total Content + Media web site. For past weeks in review not posted here, go to http://www.totalcontentandmedia.com.

Today, Spanish telco Telefonica finally announced that it would start the process to sell off the remainder of its 75% stake in TV production company Endemol. The company is being valued at a whopping €3 billion. Since Telefonica floated 25% of its Endemol stock in November 2005, the share price of the company has gradually worked its way up from €9 per share to current prices of around €22 as speculation about interested buyers has ratcheted up over the last 15 months. According to this article, private equity firms including Apax, KKR, Providence and CVD are all circling around the company. Mediaset and Telecinco, bidding jointly, are among the media companies that have also expressed interest in the producer of formats like Big Brother and Deal or No Deal.

On Wednesday I shared a cowhide-upholstered sofa in Soho with Silvio Scaglia, founder of IPTV pioneer Fastweb in Italy, to talk about his newest venture, an online P2P video company called Babelgum. The company is coming in on a wave of online video aggregators, some of which are also based on peer-to-peer networking technology—BitTorrent (which relaunched the other week as a legit, commercial enterprise) and Joost among them. (Joost, incidentally, has signed a deal with Endemol.)

This is what Scaglia told me would be Babelgum's unique selling points: it will have a transparent pricing structure for content providers ($5 for every 1,000 CPMs when providers upload the content themselves); a strong mix of "professional" rather than user-generated content; and an intuitive "smart channel" service that morphs to your tastes based on what you choose to watch, and what you choose to skip. The channel will be advertising-supported and free to watch, as Scaglia says he doesn't believe people will ever pay much for these services.

Folks will be able to see for themselves when the site launches its beta later this spring, but I think Babelgum will have a challenge ahead of it amidst this glut of other online video contenders.

A case in point: online video market got another player this week in the form of Amazon linking up with TiVo for its Unbox service. Users of the service can now use their TiVo boxes to transfer their films directly to their televisions for viewing—something that seems simple and obvious but actually is not that common in the majority of video downloading services, which still largely expect people to watch programmes on their computer screens. I expect that with deals like the one signed between Yahoo and Akimbo at the beginning of this year, the area of transferring Internet content to televisions will be a focus for other companies too in the months ahead.

In another piece of news that underscores the bridge between the television set and the Internet, Sony this week announced a new dimension to its PlayStation 3 that will offer users the chance to play games with other users in "3D." The service, to be called Home, will use interactive elements, virtual worlds and avatars, a la Second Life, but all be accessible via your television rather than your computer monitor. Analysts have greeted the news positively—Sony's been lagging behind Microsoft's Xbox and Nintendo's Wii in the games console stakes and needs a boost of something fresh to drive sales.

I've thought of a good application for business people in this emerging 3D world: This week has been a big one for media conferences: the IPTV World Forum and the FT Media Conference and the Digital TV Group's Annual Summit in London; and the Bear Stearns annual media confab in Florida were among them. As we were finishing with the second issue of Total Content + Media magazine, I didn't manage to attend any of them. But it strikes me as a very good idea for these conferences to eventually move into the 3D world so that at least my avatar could have come in my place.