|
THE
online
REPORTER
is
published weekly by Rider
Research; 13188 Perkins Road; Baton Rouge, LA 70810, USA Subscription
: $595 / £395 single reader e-mail; available at
quantity discounts to groups, departments and companies. |
|
TiVo president Marty Yudkovitz has resigned only weeks after CEO and co-founder Mike Ramsay said he would step down. Yudkovitz joined the company in 2003 from NBC. He said he's leaving in order to spend more time with his family but would stay with TiVo for a time in a consulting capacity "on certain continuing matters." Yudkovitz explained his leaving: "When I joined TiVo I planned to move my family to California, but as the demands of my role grew, the need to spend even more time on both coasts grew as well, requiring a heavy commute no matter where I lived. I've chosen instead to find the most logical time to resign as president and re-acquaint myself with my wife and kids." Yudkovitz told Reuters that he is still working on alternative distribution deals for TiVo. Ramsay told Reuters, "While we are sorry he is departing, his resignation is not a change for us in terms of strategic initiative or the direction of the company, nor is it a change in terms of our focus on distribution." Yudkovitz and Ramsay's departures come as the company appears to be running out of market opportunities and with the stock down to $3.57 from $12.94 a year ago. Despite record sales of TiVo DVRs by DirecTV, TiVo posted a loss of $26 million on revenue of $38 million in its third quarter. Last year it launched an aggressive $50 million marketing campaign to get new subscribers and warned about the impact the spend would have on its short-term earnings. The goal, it said at the time, was to have three million subscribers - a target it says would put it on the road to profitability by year-end 2005. The campaign included signing up more retail stores - bringing the total to over 4,000, a $99 after-rebate unit and extensive print and radio advertising. The campaign's purpose was to increase sales of "standalone" TiVos (the non-DirecTV ones) through retail stores in order to reduce its dependence on DirecTV, which has of late accounted for most of its unit sales. TiVo has not yet announced the results of the marketing campaign but is expected to do so when it reports on its fourth-quarter results for the period ending January 31. At last count, DirecTV accounted for about 60% of TiVo's 2.3 million users. Research firm Magna Global estimates there were 5.3 million DVR users in the US as of September. EchoStar's Dish Network, which offers its own DVR service, accounted for about 1.5 million users. The cable TV companies, after a late start and seeing the satellite companies suck-up all the industry growth, have been using non-TiVo DVR technology to catch up. Time Warner Cable had roughly 709,000 DVR subscribers as of September and Comcast had 168,000, according to Magna Global. There is speculation that the resignation of TiVo's top two executives perhaps portends poor results from the pricey marketing campaign as well as the company's inability to land a cable TV deal. Some analysts expect TiVo's Q4 losses to be less than previously forecast but also expect standalone TiVo sales to be less than hoped for. TiVo's dependence on DirecTV for volume sales and its inability to sell large quantities of the standalone model has led to speculation that the company would sell itself to a bigger company, perhaps Microsoft or DirecTV - or maybe even to one of the cable TV companies - none of whom have come up with a DVR set-top box that is as well designed and integrated as the one that TiVo developed for DirecTV. TiVo executives, though, insist no deal is in the offing. "TiVo is not for sale," Ramsay said. "We intend to remain an independent entity." If TiVo can get to a million users, it can, it says, become profitable from the $13 a month it collects from each of its users - that comes to about $156 million a year. Add to that some amount of monthly revenue that TiVos get from DirecTV for the two million or so TiVo's it'll have sold and TiVo becomes a profitable company, small perhaps, but operating in the black. Additional revenue could come from advertising that TiVo is testing - "long-form" commercials that are downloaded. They are short infomercials that offer more detail about a product, say a 10-15 minute video that provides more in-depth information about a car than a 30-second commercial can. Someone considering buying a car would be interested in watching. Perhaps, if a free drawing offered the chance to win a car, the viewer would supply his name and details for follow-up. TiVo is developing technology that will permit users to download content directly off the Net. This would bypass the traditional cable and satellite TV companies and perhaps give users access to content that they might not otherwise be able to get - "how-to's" travel info, educational videos - even the unspoken pornographic stuff for which there seems to be an insatiable demand. TiVo's policy has always been that it would never participate in any content aggregation that included porn, but once TiVo users are able to browse around the Net looking for content, the company would no longer be in control. TiVo has captured the love of thousands of users, but the opportunities to sell large quantities of TiVos and become the dominant DVR supplier appears to be closing: The Retail Opportunity: TiVo's much-ballyhooed attempt to sell large quantities of TiVo through retail outlets seems to have faltered. Stand-alone TiVo units appear to have serious feature limitations such as only being able to record the channel that the TV is tuned to - no "watch one, record another" capability like the DirecTV-TiVo model has. The DirecTV Opportunity: TiVo has been unable to land any big deal other than the one with DirecTV. News Corp-controlled DirecTV has said it will begin selling a DVR developed by NDS, another News Corp operation. DirecTV has disabled the networking and remote access functions in the TiVo model it sells and limits TiVo's ability to download ads and other "non-broadcast" content. However, DirecTV, because of increased competition from the cable companies, is not going to walk away from the TiVos it has sold - it wants to keep those subscribers from being tempted to switch to a cable TV service. This will assure TiVo of continuing income from the monthly fee that DirecTV pays it. The Dish Network Opportunity: If there ever was one, it disappeared long ago in a lawsuit between the two companies. The Cable TV Opportunity: The cable TV services in the US and the UK have given every indication that they intend to get their DVRs from their two set-top box suppliers: Scientific-Atlanta and Motorola. TiVo has been unable to land even one cable company, although there are reports that it came close to landing Comcast last year. The Phone Companies Opportunities: It appears that Microsoft has a lock on the phone companies with deals already in hand from SBC, Verizon and BellSouth. The Licensed Technology Opportunity: Scientific-Atlanta and Motorola appear to control the road to the cable TV services. One TiVo opportunity might have been to license its technology to those two set-top box makers. Scientific-Atlanta is using its own and Digeo's DVR technology. Motorola recently purchased Ucentric for its DVR and home networking technology. Wanting a competitive differentiation, the cable TV services may have shied away from using any "me-too" TiVo technology that DirecTV, their biggest competitor, uses. The two set-top boxers would, of course, include TiVo technology in their gear if one or more of the larger cable TV companies told them to. It is likely, in fact, that the cable companies will expect more advanced DVR technology to be included in future set-top boxes so they can compete with DirecTV, EchoStar and the phone companies. That would re-open the door to the cable TV business for TiVo but would also open the door for Microsoft, Digeo and Gemstar. TiVo could have the advantage in such a scenario. The cable TV companies are afraid of Microsoft and its control obsession. From several accounts, Digeo, although an attractive technology, is pricey - perhaps adding as much as $600 in software and hardware to the cost of a set-top box. That is too much when the expectations are that by this time next year, every set-top box will have DVR capabilities. To its advantage, Gemstar, the electronic program guide developer, has a joint effort with Comcast but appears short on DVR technology. The people who know best know what opportunities TiVo still has open to it are its top two executives, who are now leaving the company. US DVR Usage* Dish Netowrk DVRs
1,500,000 Can Open Source Save TiVo? TiVo, whose box uses the open source Linux operating system, this week announced the availability of an early access software development kit that will allow third parties to create entertainment and information applications that extend the TiVo service. Several years ago, RealNetworks was faced with more demand for customized versions of its software for cell phones, particularly from Nokia, than it could do. Unable to muster up enough engineers to make all the implementations on various cell phone models, RealNetworks' solution was to implement an open source product architecture that allowed the cell phone makers to do their own software-hardware integration. TiVo appears to be making a similar move. TiVo recently announced a new product strategy called Tahiti. The new development kit appears to give broadcasters and developers a way to deliver media rich broadband applications to TiVo subscribers. Competing with Microsoft, News
Corp's NDS, Motorola, Scientific-Atlanta, Paul Allen's Digeo
and the like will require all the engineering know-how that
TiVo can assemble. Giving third parties the ability to enhance
TiVos and add-on functions could be a win-win proposition that
gives TiVo a competitive edge over the cable TV companies
whose products are more likely to use technology with a closed
architecture. Back
to Headlines Robertson Wants to Bring 'Limelight' Back to MP3 MP3.com founder Michael Robertson is a true serial entrepreneur. Since selling digital music site MP3.com to Vivendi Universal in 2001, Robertson has launched desktop Linux house Lindows (now Linspire) and SIPphone, a VoIP company that lets users call anywhere in the world for free using its plug-and-play Internet phone. Now, after more than three years away, Robertson is heading back into the music biz with his latest venture that's he's "officially" launching at the Desktop Summit in San Diego next week. MP3tunes promises to deliver a variety of music-related products and services that - as its name suggests - focus on the MP3 format. The goal is to drive interoperability and give consumers maximum choice for the music they download and what they do with it. "When I started MP3.com, the term 'MP3' was an obscure acronym recognizable only by geeks," Robertson said. Now, the word's part of the everyday lexicon - MP3 players and MP3 files are everywhere - much to the chagrin of digital content owners everywhere. Robertson notes that "Today, certain market forces are trying to drive consumers away from MP3 towards proprietary systems, which lock out some consumers and force everyone to buy a particular company's player or software program." His goal is to give consumers more choice, "so I felt compelled to reenter the music space to bring the limelight back to MP3," he said. The first MP3tunes service will be an online music store that will offer hundreds of thousands of digital music files - all in MP3 format and without any DRM. This way, consumers who pay to download tracks from MP3tunes can listen to the tunes on any player or computer, make unlimited copies and burn the music to CD. The only other major digital music service to offer unrestricted tracks is eMusic, which is home to some 500,000 MP3 files, all from independent artists and labels. Pricing for eMusic starts at $9.99 a month for 40 downloads. Since relaunching in September, eMusic has sold more than three million tracks. So far MP3tunes doesn't have any major label music, either, and doesn't expect to get a licensing deal anytime soon. It will launch with several hundred thousand indie tracks that will start at 88 cents each to download. Robertson also plans to come
out with additional MP3tunes products - both hardware and
software - over the coming months. According to CNET's
News.com, the company is working on a Linux-based gadget
"that will help people access their music collections
from other devices." No further details on the device are
available yet. Back
to Headlines Microsoft Looks to Entertainment Products for Growth Much of Microsoft's drive to succeed in the home digital market is caused by the drop off in the growth rate for conventional PCs - desktops and laptops - that use so-called "client" versions of Windows as opposed to server and mobile phone versions. Microsoft's revenue from its Windows client operating systems grew only 5% last quarter, compared to a 12% compound growth rate in prior years. Windows client software accounted for $2.5 billion of the company's total earnings of $4.7 billion during the last quarter. Microsoft is counting on sales of the entertainment version of Windows - Windows Media Center - to add much of its future growth. It has also increased its efforts in other digital media areas such as its IPTV and MSN TV. However, Microsoft has had
nowhere near the success, so far, with its non-office products
as it does with its office PC software. Apple's iPod and
iTunes, with their Windows-free technology, dominate the music
player and online music service business respectively. TiVo
with its Linux operating system is the market share leader for
DVRs. The cable and satellite TV companies have steered away
from using Microsoft in their set-top boxes, out of fear of
Microsoft's heavy "duty" per-unit charges, its heavy
hand of control and its inability to control the spam, viruses
and hackers that now plague the PC market. PCs based on
Microsoft's XP Media Center software are the only game in town
when it comes to entertainment PCs but have not sold as well
as many expected. Back
to Headlines The producers of Australia's GDay World audio program, featuring interviews with technology writers, developers and entrepreneurs, are launching the Podcast Network, according to CBS Marketwatch. The network will offer "the best collection of Podcasts available anywhere, managed and aggregated under one roof," according to the site www.thepodcastnetwork.com. Podcast producers can submit audio programs for inclusion. Contributors will be able to take part in a revenue-sharing model that is being developed. The launch date was not announced. Podcasts are audio files delivered over the Net for automatic downloading it portable media players such as the iPod. Adam Curry's Podcastalley.com offers links to as many as 3,000 programs, with new submissions coming in at the rate of 15 a day. Dave Winer, who some regard as the inventor of Weblogs, is not working with Curry as we previously reported. Winer said that his " current thinking is that Podcasting is part of what I'm doing, and not in itself a business." Change is coming to the ways
that entertainment, information and education are delivered to
and viewed in the home. Read all about it!
Back
to Headlines Loudeye Shakes Up Executive Ranks, Ups Revenue Expectations Digital media tech firm Loudeye has a new chief exec. Michael Brochu, who's had a seat on Loudeye's board since December 2003, is replacing Jeff Cavins as president and CEO. Cavins left the company "to pursue other opportunities." Most recently, Brochu was chairman, president and CEO of e-business solutions provider Primus Knowledge Solutions. Additionally, Loudeye made changes to the ranks in its European operations. Charles Grimsdale, who had been the president and general manager of Loudeye's international business operations, has been promoted to chief strategy officer for Loudeye globally. Grimsdale joined the company in June of last year when it purchased rival OD2 where he was co-founder and CEO. In his new role, Grimsdale is charged with developing corporate strategy including product strategy and global market development initiatives. Ed Averdieck, formerly director of international sales and marketing, has been promoted to general manager of Loudeye's European operations. Tiff Pike, who was the finance director at OD2, has been named COO of Loudeye's European operations. Separately, the company has raised guidance for its Q4 financials. It now expects revenue for the quarter to reach a record $6.3 million, up from $5.1 million in Q3. Previous guidance called for fourth-quarter revenue of $5.2 million-$5.7 million. The company attributes the higher revenue expectations to increased revenue from its digital distribution services, most notably the dozens of Loudeye-powered digital music stores around the globe. GAAP net loss is expected to come in at the higher end of the $4.8 million-$5.2 million range. Loudeye will report actual 2004
results on March 1. Back
to Headlines Kazaa BV Assets Cost Sharman $1m Sharman Networks paid Kazaa BV about $1 million (600,000 euros) in January 2002 to acquire Kazaa's business including the Web site, accounts receivables, goodwill and intellectual property including the Kazaa desktop software. The deal did not include the FastTrack network software. An Australian court released the previously confidential contract as evidence in the case in which the Australian record labels are accusing Sharman and its business partner Altnet of copyright infringement on a massive scale. Niklas Zennstrom and Janus Friss, who owned the Dutch-based Kazaa BV, agreed not to work on file-sharing software for three years after Sharman made the deal. Sharman's lawyer Tony Meagher said that the deal's details should remain confidential, particularly the selling price. Presiding Judge Murray Wilcox overruled Meagher, saying that confidentiality should apply only to documents that related to current business transactions. Justice Wilcox did, however,
rule that certain parts of two licensing agreements between
Sharman and Joltid, developer of the FastTrack software,
should remain confidential as they related to a current
agreement. And Then There Were Four: SBC, Verizon, BellSouth and Qwest And then there were four - four phone companies remaining from the breakup of the AT&T monopoly into seven "Baby Bells" plus AT&T by a federal judge. The 1984 attempt to deregulate the US phone monolith by breaking it up into smaller operations has nearly been undone. SBC this week acquired AT&T for $16 billion, leaving only SBC, Verizon, BellSouth and Qwest. Qwest acquired US West in 2000. The original regional Bell operating companies - RBOCs - were Ameritech, Bell Atlantic, BellSouth, Nynex, Pacific Telesis (subsequently renamed PacBell), Southwestern Bell and US West. The Telecommunications Reform Act of 1996 permitted the RBOCs merge. As a result, the number of regional telcos started dwindling. The following mergers have occurred: - SBC Communications and
PacBell (Pacific Telesis) merged in April 1996. SBC's revenue comes primarily from local phone service in the West and Midwest with only a tiny amount coming from long distance service. AT&T, on the other hand, is primarily a long distance and business services company. The primary driving force behind the acquisition is cost-cutting through elimination of duplicate operations such as accounting, IT, advertising and the like. They expect annual cost savings of at least $2 billion by 2008. AT&T investors will receive 0.78 SBC shares for each of their AT&T shares. They will also get a special dividend payment of $1.30 per share. SBC's offer is barely 2% more than AT&T's market value of $15.7 billion. Federal and state regulators plus AT&T shareholders still have to approve the deal. The two companies expect the deal to be done during the first half of 2006. Expectations are that long distance provider MCI is the next most likely to be acquired. MCI was never part of AT&T, but was the first major company to arise as a result of the AT&T breakup. It took advantage of the breakup and governmental deregulation to build up a successful long-distance service business before it was beguiled into being acquired by WorldCom's highly "cooked" books. There was also some speculation on Wall Street last week, probably incorrectly, that SBC was negotiating to acquire BellSouth. SBC (60%) and BellSouth (40%) jointly own the Cingular cell phone company, which recently acquired AT&T's cell phone business. The phone business is in a high state of turmoil these days in large part due to the cable TV companies' entrance into the broadband and local phone service business. There has been a lot of talk during the last several years about how much revenue AOL has lost because of consumers switching from dial-up (narrowband) to broadband for their Internet connection. In two out of three such switches, the phone companies, who supplied AOL with the dial-up connection, also lost because the cable TV companies have about two-thirds of all US broadband connections. Potential "acquirees"
in the telecommunications turmoil could include MCI,
BellSouth, EchoStar with its Dish Network and Qwest. Qwest and
MCI were in merger talks as we went to press.
Back
to Headlines The cable TV services gave SBC a shot across the bow this week when Robert Sachs, the outgoing president of the National Cable &Telecommunications Association (NCTA), said that cable TV operators must fight efforts by SBC to circumvent local franchise requirements and offer broadband-delivered TV only to the more affluent neighborhoods. He said that SBC was trying to discriminate and gain an unfair advantage by not offering broadband TV to people in poorer or rural areas. SBC has said it would expand its fiber optic broadband network to offer TV-over-broadband to 18 million consumers in its current territory by the end of 2007. SBC strongly denies such
charges, saying it wants to provide improved and expanded
broadband technology to even more people. Cable TV companies
have to abide by local franchise agreements that force them to
offer service to all residents. Sachs said that the cable TV
companies "must be vigilant about plans by phone
companies to circumvent the local franchising process to gain
an unfair competitive advantage."
Back
to Headlines BSkyB Expected to Add 108,000 DVR Subscribers BSkyB is expected to announce
an increase of 108,000 subscribers who took its Sky Plus
personal video recorder service, bringing the total close to
600,000. It is also expected to announce that it added more
than 170,000 new subscribers in the last three months of 2004,
beating consensus forecasts of 150,000. The company's stated
goal is to have eight million subscribers by the end of 2005
and 10 million by 2010, up from 7.4 million at the end of
3Q04. Back
to Headlines EchoStar Passes 11m Subscriber Milestone EchoStar's Dish Network has passed Time Warner Cable to become the third-largest US pay TV service by passing the 11-million-subscriber milestone. The company says that record numbers of cable TV customers are switching to its service because of its low-cost price for all digital TV and its "superior" customer service. The cable TV services have only recently started offering digital services, and then at significantly higher prices. The cablecos, like the phone companies, are not known for their customer service. Dish Network has added more than 7.6 million net new customers in the last five years and passed the 10-million-customer milestone in June. "We are pleased that one out of every 10 US households now subscribes to Dish Network, an achievement that took just over eight years," said EchoStar chairman and CEO Charles Ergen. The company says it's targeting the "110 million US households seeking home entertainment." It claims a number of DVR firsts: - DVRs at no cost. EchoStar says it will offer a multi-room DVR that records in high definition, plus a DVR that will allow Dish Network to offer true video-on-demand - a first for satellite providers - sometime this year. In addition to competing with the cable TV services, EchoStar competes with satellite TV provider DirecTV and will soon compete with three, perhaps four, of the large Regional Bell Operating Companies. SBC, Verizon and BellSouth have each said that they would install fiber optic cables to the home in order to provide TV service. SBC currently has a deal with EchoStar to bundle the Dish Network's TV service with SBC's phone and broadband service. During 2004, rival DirecTV
increased its net subscriber base by 14% to 13.9 million,
compared to 12.2 million subscribers at the end of 2003. The
company said it added more new customers in 2004 than any
other pay TV service in the country. Back
to Headlines Sweden Getting World's Largest IP TV Network
TeliaSonera Sweden has finally come out with its long anticipated is IPTV services launching it simultaneously in 15 of Sweden's largest cities and towns. The service looks like overnight it's becoming one of the largest IP TV rollouts in Europe, if not the world. Back in November TeliaSonera launched its ADSL2+ 24 Mbps broadband service in preparation to carry this service to a wider audience at higher speeds, and was one of the first ADSL2+ ready carriers in Europe. TeliaSonera already offers fixed line telephony and this completes the full triple play suite in Sweden. The TV service is available now in Borås, Gävle, Gothenburg, Helsingborg, Jönköping, Linköping, Lund, Malmö, Norrköping, Stockholm, Sundsvall, Umeå, Uppsala, Västerås and Örebro. The service has two packages of channels. Channel Package I with 23 channels, including the television channels SVT 1 and 2 from Sveriges Television, The Knowledge Channel, Children's Channel, TV4, TV4+, TV400, TV Film, Channel 5, several Discovery channels, Animal Planet, MTV, VH1, Nickelodeon and Eurosport. Channel Package II includes more of SVT's channels, TV4 and the movie and sports channels from Canal+. TeliaSonera Sweden's digital TV subscribers can rent movies through the video-on-demand service. The film providers are SF Anytime and Live Networks, which together offer around 150 movie titles. Customers have access to a rented movie for 20 hours, in the same way as rentals from video stores, and can start, stop, rewind and pause in the same way as you can on a video recorder or DVD player. The company said that it expects a rapid build out and that 70% of Sweden's households will be able to order digital TV from TeliaSonera by the end of the year. Up to March 13, 2005, customers who order the new digital television service will receive the digital box free of charge and will not have to pay the one-time connection fee, or the card fee for the first six months. Channel Package 1 costs 129
Swedish krona per month ($18.50), while Channel Package 2
costs 229 Swedish krona a month ($33).
Back
to Headlines NDS Revenues Increase 85% to $142m News Corp's NDS Group, the UK-based set-top box maker, announced preliminary results for the second quarter ended December 31. Revenues were up 85% to $142 million and operating income up 134% to $22 million. NDS will soon begin supplying DVR-equipped set-top boxes to DirecTV, a fellow News Corp operation. DirecTV sells more DVRs than any other satellite or cable TV service. "This quarter was a
landmark quarter for NDS as we activated our 50 millionth
digital-TV smart card further strengthening our lead in the
sector. I recently attended the Consumer Electronics Show in
the US and was delighted to see the results of our work over
the last year highlighted on the DirecTV stand," said NDS
president and CEO Dr Abe Peled. Back
to Headlines News Flash: AOL, Time Warner Operation Do Jointly Beneficial Deal "This agreement aligns the strategies of America Online and Time Warner Cable and will enable each to focus on its key areas of growth" must have been the kind of statement that Steve Case and Gerald Levin dreamed about back in 2000 when they announced that AOL would acquire Time Warner for the synergetic benefits it would bring both companies. It took five years, however, and followed long after the ignominious ouster of both Case and Levin, before someone like Don Logan, chairman of Time Warner's Media & Communications Group would make such a statement. This week AOL and Time Warner Cable (TWC) did a "strategic" deal under which AOL will manage the search and advertising for Time Warner Cable's Road Runner broadband customers. The main goal is to get as many AOL dial-up subscribers in the geography covered by TWC to upgrade to TWC's broadband service. The two will work to migrate existing AOL and Road Runner subscribers and prospects to the new offering. They estimate that there are about three million AOL dial-up customers in the Time Warner Cable territory. The companies believe they can get the majority of them to upgrade to TWC's broadband, but gave no specific numbers. AOL chairman and CEO Jonathan Miller said the deal helps answers the question, "What happens to AOL in a broadband world?" The agreement, he said, would make it easier for AOL customers to use its premium content and services that are designed for broadband - and at an affordable price. He said it provides a way to extend the subscription lifetime of AOL's dial-up customers. For AOL, it gets a shot at a larger pool of broadband subscribers, which it can monetize through advertising, search, e-commerce and premium services. TWC will manage the subscription billing and customer support and provide a share of the subscription revenue to AOL. AOL will provide a share of its advertising, search, commerce and premium services to Time Warner Cable. The service kicks off this week in Raleigh and will eventually be offered in all of TWC's geography. Prices will vary by region. AOL said it would like to sign
up other cable TV companies for a similar deal. Other cablecos
do not, of course, compete in TWC territory. However, when
asked if AOL was trying to sign-up any of the telephone
companies, TWC made it clear that the deal it has with AOL
would only be available through TWC in TWC's geography, not
through any phone company. TWC will be the primary seller of
access, not AOL, according to the two companies. "Growing
our high-speed data business is a top strategic priority for
Time Warner Cable," said TWC CEO Glenn Britt. He made it
clear that he does not want AOL's services to be available to
help the phone companies that his operation competes with.
Back
to Headlines Comcast Approaching 7m Broadband Users Comcast, the largest US cable TV company, increased its revenue from high-speed Internet service 36% to $855 million. It added more than 437,000 subscribers to end the quarter with almost seven million broadband users. Comcast and the other cable companies have been able to hold their monthly rates, unlike the phone companies, which have been dropping their broadband fees. Comcast's monthly revenue per broadband subscriber increased to $42.07 from $41.33. The company said it expects to see continued rapid growth in its broadband business and accelerate signing up broadband subscribers for its Internet telephony service. Comcast added about 60,000 new
cable customers in the second half of the year after a second
quarter decline. However, some analysts expect the total
number of Comcast's basic cable subscribers to remain flat at
about 21.5 million. The cable companies are facing increased
competition from the two satellite TV services, DirecTV and
the Dish Network. Comcast added more than 250,000
digital-cable subscribers during the quarter, ending with more
than 8.6 million subscribers. Back
to Headlines Verizon Latest Telco to Opt for Microsoft IPTV Verizon Communications said this week that it would, after all, also use the Microsoft IPTV software platform when it launches its triple play services, later this year. This is more or less a clean sweep for Microsoft in offering software that will manage the gateway into the home from the big telcos in the US who are entering TV services for the first time later this year. Verizon is the only player that is taking fiber right into its homes in its planned service, and so is progressing at a lower number of homes per year than either SBC or BellSouth, although it is likely to cost more. BellSouth has not yet said that it will go with the Microsoft platform, but the move is expected. This clean sweep is an incredible feat for a piece of software that no one has actually seen work yet. Microsoft is said to be showing code to people, but anyone that has seen it says that it is not yet ready for deployment and probably won't be for another 18 months. Meanwhile a handful of small software companies ranging from 2Wire and Digeo in the US and Orca outside of it, have all of the experience, but can only dream of the kinds of orders that the Microsoft vaporware is gaining. Somehow that type of stultified decision making at the slow moving, highly traditional US telcos, could easily backfire, with their services offering "blue screens of death" as PC crashes are called, instead of the TV pictures they are supposed to. The article appeared in Rethink
Research's Faultline weekly report. For a sample issue or
subscription details, e-mail sales@riderresearch.com.
Back
to Headlines Broadband Approaching Cable TV Penetration Rates In some parts of the world, the
number of homes using a broadband connection to access the Net
will over the next five years achieve the same penetration
rate as cable TV achieved in North America over the past 20
years and the same achieved by dial-up in less than 10 years,
according to a report from Dell'Oro Group. The company also
forecasts that sales of the gear that goes in consumers homes
- consumer premises equipment (CPE) - for both cable modems (DOCSIS)
and DSL will increase 20% in 2005 to almost $3 billion.
Back
to Headlines Citywide Broadband Speeds Up to 8 Mbps Teliasonera this week completed
a citywide broadband network in Mölndal, on Sweden's west
coast. Residents can access to broadband speeds of up to 8
Mbps. Approximately half of Mölndal's residents can also have
speeds up to 24 Mbps. Residents can select from various ISPs
that sell access to the network. Speeds can go up to 24 Mbps
within 2.5 km (1.5 miles) of a switching center, up to 8 Mbps
within 3.5 km (2 miles), 0.5 Mbps within 9 km (5.5 miles). The
switching centers were upgraded to ADSL technology using
copper cable. Teliasonera has deals in hand to provide
broadband networks to more than 75 municipalities in Sweden.
Back
to Headlines Alcatel Gets Into Black, Misses Analysts' Forecast Alcatel, the world's largest
maker of broadband gear, missed analysts' fourth-quarter
profit forecast. Net income was 40 million euros ($51.9
million), compared with a loss of 524 million euros ($679.7
million) a year earlier. Analysts had predicted a 154 million
euro ($200 million) profit. Alcatel sacrificed profit to gain
market share in the fourth quarter, according to CFO
Jean-Pascal Beaufret. Back
to Headlines Verizon Wireless V CAST Goes Live Verizon Wireless officially launched its V CAST 3G wireless broadband multimedia service on Tuesday along with a slew of content partner announcements. The company claims that V CAST, the first such service for US mobile users, "will break all conceived notions about wireless multimedia services." V CAST is an add-on to a user's regular Verizon Wireless service. It only works with new 3G mobile phones and runs on the company EV-DO 3G network to deliver short-form content on-demand, live-action 3D games, music videos and more. At launch, the coverage area includes more than 30 major metro areas and more than 75 million people. "What wireless broadband means for consumers is a whole new wireless experience," said Verizon Wireless president and CEO Denny Strigl. "This will be the year that consumers look at their wireless phones as a must-have multi-functional entertainment device, as well as something that's indispensable for staying in touch. Now our customers can turn to their phones purely for entertainment value, with their favorite music, movies, news and games traveling with them. Unlike other wireless video and multimedia services available, our V CAST service is fast, clear and cutting edge." Folks who sign up for V CAST can watch video clips from "The Daily Show with Jon Stewart," get video news updates from NBC News or CNN, view sports highlights, play 3D games and download music videos from Warner Music Group artists. The "basic" V CAST service is $15 a month on top of the subscriber's existing monthly payment. It includes the "VPak," which provides unlimited access to more than 300 daily updated video clips from top news, sports, weather and entertainment content providers. Premium content, including 3D games and downloadable music videos, is extra. There are no airtime charges to download, stream or watch V CAST content. V CAST subscribers also get monthly access and unlimited browsing on the Verizon Wireless Mobile Web 2.0 news and information service. V CAST Content available at
launch: "The value of V CAST comes
not only from the quality of the experience our network
provides, but also from the compelling content line-up we've
assembled," said Verizon Wireless VP and chief marketing
officer John Stratton. "Our list of content providers
reads like a who's who of the news, sports, entertainment and
game industries." Back
to Headlines German Ringtone Chart To Launch in April Building on the successful launch of the first official ringtone chart in the UK in June, the Mobile Entertainment Forum (MEF) is readying a German version of the chart. The first chart, encompassing all ringtone formats, is expected to appear in April in the German music industry trade weekly Musikwoche. Additional charts will be launched in other European countries throughout the year. The German ringtone market was worth an estimated $239.8 million in 2004, accounting for 17% of total European ringtone sales, according to the Informa Telecoms & Media Mobile Music Report 2004. Market researcher GfK estimates ringtone sales made up roughly 6% of overall music industry revenues in Germany last year. Separately, MEF and CTIA - The Wireless Association joined forces in an effort to advance the development of mobile entertainment. Through the partnership, the
two groups intend to monitor and support emerging trends
within the mobile entertainment industry. Their collaboration
plans include a possible series of conferences, seminars and
workshops to educate wireless industry executives,
policymakers and consumers "on the endless mobile
entertainment opportunities."
Back
to Headlines BRS Launches Mobile Content Sites BRS Media has launched two new mobile content sites. iMobz.com is a new ringtone and mobile entertainment content site. The second site, at http://mobile.web-radio.fm, is an addition to the company's Web-Radio Internet radio portal. It features ringtones categorized by musical genre including oldies, classical, country, rock and the Top 100 Ringtones among others. In addition to ringtones, both sites will offer other mobile content such as truetones, videos, games, picture messages, wallpaper and screensavers. In partnership with mobile content solution provider Mediaplazza, the new sites will be able to hook up with 134 wireless providers and offer content that is compatible with more than 465 models of cell phones in 50+ countries. Both sites are available in over 20 languages. BRS Media helps radio and
multimedia Web sties "build and brand on the power of the
Web." It is also the registrar for the ".am"
and ".fm" Internet domains.
Back
to Headlines Wireless entertainment
publisher Jamdat Mobile and Atari have extended their
licensing agreement through 2008. Under the terms of the
extension, Jamdat will publish wireless versions of Atari's
games that are based on Hasbro properties Scrabble, Scrabble
Blast, Yahtzee and Boggle properties for mobile phones.
Jamdat's mobile games are available on both BREW- and
Java-enabled phones. Back
to Headlines Philips: Phones Will Overtake TVs Within a Decade Interest in television services over cellular or broadband wireless networks is intensifying as operators seek a new, high-margin application. If the boom materializes, it will also be a major boost for chipmakers. We have already seen Qualcomm unveiling its FLO OFDM-based network technology for television, and now Philips Semiconductors is predicting that, within a decade, the majority of its television chips will go into cell phones, not conventional TV sets. Leon Husson, executive VP for the consumer businesses at Philips Semiconductors, forecasts that 50% of cell phones will come with television capability by 2013. At that time, he predicts, volume will be about 600 million handsets per year in total, with 300 million featuring TV. Philips is currently testing handset TV services in Berlin with Nokia, Vodafone and Universal Studios Network Germany. Chipmakers still face important hurdles to overcome, including developing "a global digital TV feature that enables a user to tune into a television anywhere in the world." Another challenge for chipmakers will be creating intelligent digital signal processors (DSPs) that will enable consumers easily to transfer content from in-home televisions and set-top boxes to phones, not only decoding audio and video streams but also encoding in the right format for the home devices. These DSPs will be able to change frame rates or resolution automatically to match the end product's capability. Meanwhile, as the R&D departments work on next-generation handsets, operators are already launching first-stage services. Cingular is now offering MobiTV, a 22-channel service created by Idetic, featuring content from MSNBC, ABC News Now, Fox Sports, C-SPAN and others. AT&T Wireless had originally signed for MobiTV. Cingular adopted it for the whole company after acquiring AT&T Wireless. MobiTV, which is $9.99 a month, is also available from Sprint PCS as part of the PCS Vision service. Before full TV programming, many operators are experimenting with short episodes and clips. Most recently, Verizon Wireless has joined with production company Twentieth Television to deliver direct-to-mobile shows as part of its new V CAST service. The deal will also be extended to Verizon Wireless co-owner Vodafone's Live! platform outside the US. The TV company plans to produce 52 one-minute "mobisodes" of two original soap operas. V CAST will also feature a streaming video service based on Microsoft's Windows Media, in a deal announced this week. Verizon Wireless is a valuable partner for the software giant, which has had problems establishing itself in the mobile world - Windows Media's rival RealPlayer, is far stronger in this world. Microsoft now partners with PacketVideo, which provides multimedia software for many cellcos. V CAST is expected to be the most advanced phone video service available in the US. This article was published in
Wireless Watch, a weekly newsletter that delivers in-depth
analysis and market research of mobile and wireless for
business. Wireless Watch is published by Rethink Research, a
London-based IT publishing and consulting firm. For
subscription information, e-mail Wireless games and service provider In-Fusio has acquired German mobile game publisher Mobile Scope. The deal strengthens In-Fusio's position both in Europe and around the globe, as it gains access to Mobile Scope's full range of products and publishing services, as well as content partners. Mobile Scope will be integrated into In-Fusio's publishing division, with Mobile Scope CEO Jurgen Goeldner taking on the role of executive VP of publishing. Among its other properties, Mobile Scope has licensing agreements to produce mobile games based on hit films "Die Hard" and Ice Age," which complement In-Fusio's titles based on Comedy Central's "South Park," motion pictures "ET" and "Jurassic Park III," and videogame "Tomb Raider" to name a few. This latest acquisition comes
just a week after In-Fusio purchased US game publisher
Thumbworks. Back
to Headlines Korean File Sharer Given Jail Sentence A Korean criminal court last week found Park Sung-hun, CEO of Bugs Co, the country's most popular online music site, guilty of violating copyright laws. He was given an 18 month suspended jail sentence and fined 20 million Korean won (about $20,000), according to Yonhap News. Seoul Central District Court Judge Lee Han-sup said, "Park distributed tens of thousands of music files on the Internet without permission from musicians and recording companies." He said that Bugs' free download service violated the right to distribute to the public copyrighted materials that musicians and recording companies own. Earlier last week, a court ordered the two developers of the free online music file-sharing site Soribada to pay 19 million won (about $19,000) to the Korea Music Copyright Association, Korea's association of recording companies and musicians. The court said that the online operators had "overlooked" the illegal file swapping that their users were doing. The operators of music site AD200 Co and of ISP Cybertalk Co were also given suspended prison sentences. Korea's high Internet usage has
severely impacted the music industry - 36 million people,
about 70% of the population, are frequent users of the Net.
Unauthorized downloading has become so common, according to
Yonhap News, that conventional music distribution through CDs
and cassette tapes has sharply dropped.
Back
to Headlines Norway High Court: Links to Illegal Music Files Violate Law Norway's High Court upheld a lower court ruling that fined Norwegian student Frank Allan Bruvik about $15,900 (100,000 Norwegian kroner or 12,126 euros) because he provided links from his Napster.no Web site to about 170 illegal copies of copyrighted music on other sites, according to the Associated Press. The High Court overturned an appeals court by ruling that Bruvik had violated copyright law by showing where illegal files could be downloaded. The appeals court earlier had ruled that Bruvik was not violating copyright laws because he was not making files available for downloading, merely showing where they were located. The appeals court said that Bruvik did not violate copyright laws because the files were available before Bruvik showed links to them. The High Court reversed the Appeals Court decision and upheld the decision of the district court. Tono, the music industry's lobby group in Norway, initiated the case. The Inquirer concluded that the
ruling means that in Norway, search companies such as Google,
Yahoo and MSN can be sued, closed down and their owners thrown
into jail because they also provide links to sites that
distribute illegal copies of copyrighted music.
Back
to Headlines The Digital Age Communications Act Begins The Progress & Freedom Foundation (PFF) has assembled working groups of people that served in one or more of the last five presidential administrations to draft language to use in a future communications bill that some are urging Congress to enact. The group says the move is meant "to ensure deregulated competition in services and platforms now, while crafting language that can anticipate future technologies and services." Called The Digital Age Communications Act (DACA), the initiative was launched at a press conference this week. Several Congressmen are considering an overhaul of existing communications laws. "There is but one ideological premise to this undertaking," said PFF president Ray Gifford, "that the nation's communications laws, policies and institutions are in need of reform. We start with no presuppositions except that reform is necessary, and have no predetermined outcomes." The Progress & Freedom Foundation released a Declaration of Principles that will guide the participants. It states that the current communications regulatory regime rests on an outdated and inconsistent regulatory framework. DACA participants agree that the aims of both the Communications Act of 1934 - to provide communications services to all Americans - and the Telecom Act of 1996 - to provide for a pro-competitive, deregulatory national policy framework - were sound and remain applicable today. However, they say, given the instability of the current universal service regime, a lack of coordination among state and federal regulatory bodies, wasteful use of spectrum and the inability of Congress to keep pace with rapid evolution in technology and markets, DACA participants are seeking a new regulatory approach. DACA's goal is to produce a
model bill that can be presented to Capitol Hill later this
year in the hope that it can contribute to the ongoing debate
regarding what some are calling "the next Telecom
Act." Back
to Headlines Spam - unsolicited e-mail sent out in bulk - has increased to 80% or more of all e-mail sent, up from 50% to 60% before the Can Spam Act went into effect in January 2004 in the US, according to an article in the New York Times. Anti-spam crusaders have been arguing that the law makes the spam problem worse because it in effect gives spammers permission to send junk e-mail as long as they follow the specified rules. The article quotes Steve Linford, the founder of the Spamhaus Project, a London organization that is one of the leading groups intent on eliminating junk e-mail, as saying, "Can Spam legalized spamming itself." It reports that a survey from Stanford University in December showed that a typical Internet user now spends about 10 working days a year dealing with incoming spam. Other industry analysts estimate that the global cost of spam to businesses in 2005, in terms of lost productivity and network maintenance, will be about $50 billion ($17 billion in the US alone). Another report concludes that most legislative measures in the US, Europe and Australia have had little impact on the problem. The numbers still work
overwhelmingly in the spammers' favor. Working on a 25% to 50%
commission, spammers make money even if only 2,000 of 200
million recipients of a spam campaign respond on a single day.
According to the article, if those 2,000 go to a merchant's
Web site to purchase a $50 bottle of an herbal supplement, a
spammer working at a 25% commission will take in $25,000.
Spammers cut their operating costs by hijacking others' PC to
send the e-mails, which also reduces "the likelihood of
anyone tracking down who pushed the 'send' button,"
according to the paper. Back
to Headlines French Teacher Convicted of File Sharing A court in France made an example out of a 28-year-old schoolteacher convicted of illegally sharing copyrighted music files over the Internet. The teacher was fined 10,200 euros ($13,300) after being found guilty of making some 30GB of music files - some 10,000 tracks - available over peer-to-peer networks. The fine was less than half the 28,400 euros ($36,840) that the copyrighted holders reportedly asked for. In addition to the fine, the
teacher's PC was confiscated and the court ordered him to take
out ads in two newspapers notifying the public of the verdict,
according to Agence France-Presse.
Back
to Headlines RIAA Sues Another 717 Alleged Infringers The RIAA this week sued another
717 US residents, accusing them of distributing music
illegally on P2P networks. Included are 68 suits directed at
unnamed people at US universities. The RIAA has now filed
suits against almost 8,500 individuals. Its last round was in
December when it sued 754 alleged copyright infringers.
Back
to Headlines LIES, DAMN LIES, AND STATISTICS Looks like all those iPod and iTunes TV commercials, print ads and the holiday season did a great job of making the Apple brand a household name around the world. Readers of Webzine Brandchannel.com bestowed the company with the 2004 Readers' Choice Award as the brand with the most global impact. Google, which held the title for the two prior years, slipped down a notch despite all the hype over its much-awaited IPO. In 2004, Apple sold many million iPods, with 4.6 million in the December quarter alone. The iTunes Music Store, online since April 2003, has now sold more than 250 million downloads, a milestone that no other digital music store has any hope of reaching any time soon. Readers vote for a brand based
on its impact on their lives. The award has nothing to do with
the financial valuation of the company. Back
to Headlines There'll be over two billion
mobile phone users by year-end, according to Deloitte's
Technology, Media and Telecommunications Group. The bulk of
the growth will be in new markets such as Asia and Latin
America. Some countries will have more than one cell phone per
person, such as one for business and one for personal. Most
calls will still be made on traditional phones, however, the
report says. Data transmissions - Internet, e-mail, downloads
- will account for about 20% of mobile operators' revenues and
profits with voice accounting for the other 80%.
Back
to Headlines Photography, Gaming To Drive 'Place Shifting' Market Digital photography and multiplayer gaming will drive consumer interest in "place-shifting" solutions - the ability to access stuff like pictures and games from other rooms in the home and from locations outside the home, according to Parks Associates. Its research found that those are the two primary applications that hold the greatest potential for success in developing portable content and services for the mass market. "Content owners,
networking component manufacturers, and mobile applications
players all stand to benefit from this high consumer interest
in 'place-shifted' content," said Kurt Scherf, VP and
principal analyst for Parks Associates. "Approximately
one-quarter of US households serve as crucial leading adopters
of residential and mobile solutions," Scherf said.
"When questioned about new means of access to personal
and stored content, they expressed the highest interest in
sharing photographs with friends and loved ones. That is the
application with the highest potential for success in this
budding market for mobile 'place-shifting' solutions."
Back
to Headlines Mobile Games Gaining on Ringtones Games are on track to overtake ringtones as the biggest mobile application category this year in terms of revenue, according to a recent IDC study. The market researcher projects that revenue for mobile games will near $1.5 billion annually by 2008, with the majority coming from casual, community-oriented subscription gaming. According to IDC, the key trend in wireless gaming is the shift away from single-player games toward virtual community-oriented gaming. While multiplayer gaming can be difficult for networks, content providers and device manufacturers, it's what consumers want. Support for head-to-head play requires enhanced features such as player-to-player text communications, player profiles, game information, player matching features and leader boards. For multiplayer mobile gaming to be successful, cooperation among carriers, handset manufacturers, game developers and aggregators is a necessity. IDC says that, given the interdependence of the market participants, a company that refuses to collaborate is unlikely to succeed in this market. "Broad cooperation between market players is essential, both for individual success and the success of the market as a whole," the report says. IDC cites the recent
cross-carrier mobile gaming tournament presented by InfoSpace
Mobile and Blue Lava Wireless as a good example of this type
of cooperation. Competitors in the "Tetris Tournament
Mobile Championship" played more than a million games in
September and October for a chance to win $10,000 in prizes.
The winner reportedly played 2,300 games. Back
to Headlines Acacia Research, Thomson Sign License Deal Acacia Research, which holds a
number of digital media patents, has signed up France's
Thomson to license several of its patents that apply to
interactive television. Terms were not announced. Acacia is
suing several satellite and cable TV operators for infringing
its patents. Multi-room DVRs Coming, Big Time The cable and satellite television services will step up deployment of multi-room DVR products this year to such an extent that the number of installed units in the states will exceed 25 million in 2009, according to Parks Associates. EchoStar's Dish Network was the first to ship multi-room DVRs. DirecTV has the largest user base of DVRs, but has purposely crippled the TiVo box that it ships so that it can only be used on one TV - the one from which it recorded the program. The cable TV services are, by and large, already shipping multi-room DVRs made by Motorola and Scientific-Atlanta. The two set-top box makers are using their own DVR technology or that of the Paul Allen-backed Digeo. Motorola last week acquired Ucentric and its DVR and home networking technology. Parks forecasts that multi-room DVRs will be deployed in limited numbers in 2005, but penetration will grow to approximately 16 million US households by the end of 2009. "Just as TiVo and its ilk introduced 'time-shifting' to the consumption of television content, multi-room DVR solutions will offer 'place-shifting' capabilities," said Kurt Scherf, VP and principal analyst at Parks Associates. "Recorded programming will be available throughout the home as these devices bring new levels of convenience and flexibility to TV use." Scherf said that the beneficiaries of the growth in multi-room DVRs will be set-top box developers and manufacturers, their cable and satellite partners plus home networking chipset developers. "The home networking industry hopes to expand the notion of connectivity beyond broadband connections and PC-centric content," Scherf said. "This year holds many opportunities for players developing technologies using wireless, powerline, phone line, and coaxial networking solutions as they are applied to multi-room DVR solutions." Parks said it will launch two new primary consumer research studies, "Digital Entertainment: Changing Consumer Habits" and "Mobile Entertainment Platforms & Services" that will focus on how consumers interact with and use digital media, including recorded television programming, digital music, gaming, and personal and self-created content. The studies will focus on the ways in which consumers will seek to "play-shift" their content in both home and mobile ecosystems.
"Technology is not kind. It does not wait. It does not say please. It slams into existing systems. And often destroys them. While creating a new system." - Joseph Schumpeter in Juan Enriquez's book "As the Future Catches You" Don't Get Left Behind In The
Digital Media Market. One publication covers Digital Media like no other - The Online Reporter weekly newsletter. Find out what's happening every
Friday in the Digital Media world by subscribing to The Online
Reporter - VISA, MasterCard or American Express. Rider Research
The US District Court for the District of Delaware has ruled that Movielink's broadband video-on-demand service does not infringe on a patent held by USA Video Technology. USA Video first filed suit against the studio-owned Movielink in April 2003, alleging that Movielink was willfully infringing USA Video's patent "for a system and method for a user to request, and have delivered over an electronic network, a digitized video program." The court's order granting Movielink's motion for summary judgment on the grounds of non-infringement was entered on January 28. USA Video, which has held its video-on-demand patent since 1992, was seeking injunctive relief as well as compensatory and willful infringement damages. Movielink has always denied any
wrongdoing in the matter. "Movielink's vision for a
robust broadband VOD market is founded on respecting
legitimate intellectual property rights and encouraging other
businesses in the market to respect them as well," said
CEO Jim Ramo. "Based on these principles, which are at
the ore of our business, we vigorously defended against the
USA Video infringement claims because we know that Movielink
was not infringing its patent. We are pleased, but not
surprised, that the Court has agreed with us."
Back
to Headlines Any TV Show, Any Time - Not Quite It's a long way from "any
TV show, any time, anywhere" but it's a start. The small
UK broadband entertainment and communications provider Video
Networks Limited (VNL) is adding the ability for its
HomeChoice subscribers to access programming from the BBC,
Channel 4 and Chelsea TV for up to seven days after it has
been broadcast. Four new BBC channels will be added and the
number of hours available will increase. Roger Lynch, VNL
chairman and CEO, said the move demonstrated how the company
is offering the "the most advanced mass market on-demand
service in the UK today." About 1.4 million homes in
London and the Borough of Stevenage can access the VNL
service. The company plans to have it available to 2.4 million
homes by June. Back
to Headlines Live Six Nations Matches Over the Net from BBC The BBC will use broadband to
deliver live streaming of complete matches in the upcoming Six
Nations rugby union series from its Web site, according to
DMeurope.com. The BBC is testing its streaming technology as
it did during last year's summer Olympics. The technology
enables the BBC to block non-UK residents from seeing the
streams; they will only be able to see highlights.
Back
to Headlines India's first broadband
delivered TV channel CTBUZZ was launched by US-based TV Asia
and will be delivered under the banner of Kallz Entertainment.
The channel targets the youth and upper socio-economic
classes. Back
to Headlines Private Media Brings Broadband-Delivered Adult Video Entertainment Private Media Group, a Spain-based producer of adult entertainment and the first bidder for the Napster assets, will soon launch a secure TV channel and video-on-demand (VOD) service on a new, state-of-the-art broadband site. Through a deal with Alfa Audiovisuales, the new service, which uses proprietary technology, enables broadband subscribers to watch the TV channel and stream or download full-motion, full-screen, DVD-quality Private Media titles. Both TV and VOD can be watched on the consumer's TV screen through a cable connection. The TV Channel will first be
offered in Spanish and then English, followed by German and
eventually all languages in which Private currently provides
content. TV programming will be in six hour blocks including
adult industry news, interviews, "behind the
scenes," news coverage of special events and financial
news coverage of Private Media and the adult entertainment
industry. Back
to Headlines Internet Film Sales to Increase Fourfold by 2010 The revenue generated by the
sales of films over the Internet, including both hardcopy (DVDs
and tapes) and download/streaming sales, will increase
fourfold from 2002 to 2010, reaching $3.6 billion by 2010,
according to the report "Film on the Internet"
published by Informa Media and Telecoms. It forecasts that
hardcopy formats had a 99.3% share of the online film market
in 2004. However, by 2010 the share of hardcopy sales is
expected to drop to 72.9% due to increased sales of online
film downloads and streams. It says that online film piracy
cost the film industry $858.5 million in 2004, which will
increase to about $1.7 billion in 2010. Piracy of hardcopy
movies cost the film industry an estimated $3.5 billion in
2004, and is expected to reach $4.5 billion by 2010.
Back
to Headlines CinemaNow Licenses NBC Universal Content NBC Universal has agreed to license first-run pay-per-view and library titles to online movie service CinemaNow. The deal allows consumers to "rent" movies and TV programs, but only allows them to stream, not download, the new content. NBC Universal joins the likes of 20th Century Fox, Disney, Lions Gate, MGM, Sony, Warner Bros and some 200 others licensing their content to CinemaNow for streaming or downloading from the Net. CinemaNow now has distribution rights to more than 6,500 titles. Along with previously released
movies and pay-per-view TV programming, CinemaNow will also
offer NBC Universal's new release films on the same day they
become available in traditional pay-per-view outlets. The
first current pay-per-view title is the spy thriller "The
Bourne Supremacy," which rents for $3.99. All titles will
be made available for streaming on a 24-hour rental basis.
Back
to Headlines The Orchard Adds Distributors
in China, Mid-East Independent music distributor The Orchard has expanded its distributor network in Asia and the Middle East. A partnership with China-based Asia Markets Development Limited (AMDL) will enable the Orchard to source indie music from China and other Far East territories. AMDL will also serve as the orchard's local liaison for label partners. New Sound, a music distributor based in Ramalla in Palestine, will expand the Orchard's reach in the Middle East. The addition of these new
partners enhances the Orchard's global network of aggregation
partners, which includes The Orchard Japan, Carmel Music
(Middle East), EPSA (South America) and Amped Music
(Australia). Back
to Headlines Virgin Digital Buys Shift Music Virgin Digital, the digital music entertainment platform of the Virgin Group, has acquired Los Angeles-based Shift Music, a start-up that converts hard-copy music into a digital format. The Shift technology as well as its training and consulting services will serve as the basis for a new Virgin Digital business line focused on helping consumers make the transition to digital media. To use Shift's conversion service, consumers send in their CDs and get back a collection of digital audio files that are stored on external hard drives or DVDs, plus a catalog of everything in the music collection. Shift also provides archive and back-up services, home entertainment networking, training on whatever equipment it installs and digital music consultation services to help "outfit you and your home from top to bottom" so "you'll never have to step into a crowded electronics store again." As part of the acquisition, Shift founder Aaron Grosky will join Virgin Digital as head of digital services and artist and label relations. "Digital music services bring new and exciting opportunities for consumers to enjoy their music," said Virgin Digital president Zack Zalon. "However, figuring out how everything can sync together can be a scary proposition for users when they attempt to merge their physical music collections with their digital music collections. Virgin Digital is committed to offering consumers with the most comprehensive and superior digital music experience. With Shift, we can make a new connection with consumers who have been hesitant about making the move to the world of digital music and help those already adopting the digital way to expand their collections seamlessly." Financial terms were not
disclosed. Back
to Headlines Live365, PlanetaTV Deliver Net Radio to Latin America Internet radio network Live365 and Spanish-language broadband network PlanetaTV.com have partnered to develop and deliver up to 150 Spanish-language Internet radio stations. The two plan to make the stations available for free to listeners on PlanetaTV's network of broadband portals. The online radio stations will play Latin music including tropical and salsa, rock in Espanol as well as mainstream stations such as pop, rock and hip-hop. PlanetaTV will also promote Live365's create-your-own radio station offering through its network of sites in the US, Spain and Latin America. In addition to the forthcoming
Net radio, PlanetaTV's broadband portals deliver video
content, including 20 exclusive video channels. Content
includes interviews, music video clips, movie trailers and
more from the music, TV and movie industries. The portals also
provide on-demand and live access to breaking news from Latin
American broadcasters in broadcasters in Mexico, Argentina,
Venezuela, Ecuador and other Spanish-speaking countries.
Back
to Headlines Nearly five months after unveiling the preview version, Napster has officially launched its Napster To Go portable music subscription service. Napster To Go lets subscribers transfer as many songs from the Napster catalog to a compatible MP3 player as often as they like for $14.95 a month. Taking a shot at iTunes, the company, calls the new service "the most significant milestone to date in the rapidly growing digital music industry and makes costly download-only stores seem antiquated by comparison." Napster chairman and CEO Chris Gorog aimed a barb of his own at Apple with the claim that "Napster To Go provides infinitely greater value and is much more exciting than the iTunes pay-per-download model," he said. "This is what consumers want and Napster is once again proud to lead the industry by being the first in the world to offer this revolutionary new way to enjoy music." Apple CEO Steve Jobs has spoken publicly about his desire to keep iTunes as an a la carte-only download service. When hyping iTunes in the past, Jobs stuck by his belief that consumers want to own music - not rent it, as is the case with digital music subscription services and the new Napster To Go. However, the notion of filling up a 10GB or 20GB MP3 player with any music you want, deleting the songs you don't like and then replacing them with new tunes, may very well appeal to commuters, travelers and other folks who take full advantage of portable music players. Creative, Dell, iRiver, Samsung and Gateway all offer MP3 players that are compatible with Napster To Go. Folks who buy a Creative Zen Micro, Dell Pocket DJ or iRiver HP10 player, which all support the "Works with Napster To Go" logo program, will get a free one-month trial of the service. Napster is accompanying the launch with a $30 million marketing campaign. The company also unveiled
Napster 3.0, a new version of its software that adds new
community features. These include Playlists To Go, which lets
fans transfer ready-made playlists of up to 50 songs to a
portable device with a single mouse click. Back
to Headlines Cdigix Plans Portable Music Service; Adds More Schools Cdigix, which provides digital music and movie download services to colleges and universities, has enhanced its Ctrax music service and signed up five additional campuses. The biggest addition to Ctrax is the planned Ctrax2Go portable subscription service that's similar to the Napster To Go service that launched this week. Ctrax2Go lets students sign up for a monthly subscription and transfer an unlimited number of tracks to any compatible portable MP3 player. All the music is "tethered" to the service - when the subscription lapses, the music goes away. Ctrax2Go will launch later this month. Ctrax upgrades available now include live radio with genre-specific stations as well as stations customized for the schools, enhanced playlists and a selection of some 500 music videos on-demand. Cdigix offers four types of services. -Ctrax offers access to more
than a million downloadable music tracks through a partnership
with MusicNet. New schools now offering Cdigix services include DePaul University in Chicago, Goucher College in Baltimore, Indiana University-Purdue University Ft Wayne, Purdue University Calumet and Trinity University in San Antonio. The two additional Purdue campuses signed on after the Purdue campus in West Lafayette got a good initial response to Cdigix, which it introduced to its students in September. The new locations bring the
number of Cdigix campuses up to 18, and broaden its reach to
nearly 300,000 students. It is in the process of rolling out
the services to several more schools and will be announcing
the new partnerships in the near future.
Back
to Headlines
This
Last Artist/Title 1
1 Green Day/American Idiot
(Reprise) iHoopla, Hip Solve Media Intro iHoopla Label Edition iHoopla, a combo online record label/music store, and music industry technology provider Hip Solve Media have unveiled iHoopla Label Edition software, a digital rights management solution that "encourages consumers to share digital downloads and unlocks a new no-middleman business model for record labels and other digital content owners. The software, which gets embedded directly into music and video downloads, is a Web-based application designed to let content owners securely sell their digital content over the Net. It includes: -Templates for creating a
custom digital music storefront. Content owners pay a five-cent fee per transaction when using the software, but cut out all fees to the middleman, such as third-party digital music sites. Consumers who buy iHoopla-protected tracks can burn them directly to CD or transfer them to WMA-supported portable digital music player. In addition to the iHoopla Label Edition Software, the companies also offer complete hosting and maintenance services. Hip Solve Media is the exclusive distributor of the software. Hip Solve and iHoopla also
announced the first iHoopla-powered store. Muse-Wrapped
Records (http://muse-wrapped.com) is the exclusive digital
distributor for Musea Records of France and select independent
artists including former Kansas frontman Steve Walsh. Muse-Wrapped.com
will eventually offer a wide variety of content ranging from
commercially available and out-of-print albums to previously
unreleased live recordings. Back
to Headlines Sony Sets US PSP Launch; Expects to Sell 1m in First Week The Sony PSP handheld video gaming console goes on sale in the US on March 24 for $249, with an initial slate of 24 games that are priced at $39 each. Sony's PSP Value Pack includes a 32MB Memory Stick Duo; headphones; a sampler disc containing movies, music and video games on its proprietary 1.8GB Universal Media Disc (UMD) format and, for the first one million shipments, a UMD video disc featuring the Sony Pictures film "Spider-Man 2." Sony will manufacture one
million PSPs for sale in North America by March 31. The unit
went on sale in Japan on December 12 with 200,000 sold on the
first day. Sony plans to ship a total of three million PSPs
worldwide by the end of March. Back
to Headlines Microsoft, Macrovision Team on Copy Protection Microsoft is advancing its digital rights management efforts through a partnership with Macrovision. The two plan to support interoperability between Microsoft's Windows Media DRM and Macrovision's copy management technology. The agreement is meant to give content owners more flexibility in distributing their content while still allowing them to maintain rights protection whether the content is on PCs, digital video recorders or portable media devices. The idea, apparently, is to let the entertainment industry "take full advantage of new usage models for today's digital home. Under the deal, Windows Media DRM will "recognize" the Macrovision signals, allowing Macrovision-protected content to be temporarily stored on digital devices. Additionally, an Internet-delivered movie downloaded to a PC can now be protected even if the analog video playback occurs on a different device. The companies plan to roll out the functionality over the next year. "With the growing popularity of video-on-demand and Internet-delivered on-demand entertainment, the is agreement is good news for consumers who want more recent movies and other entertainment delivered straight to their home," said Steve Weinstein, VP and general manager of Macrovision's Entertainment Technologies Group. "It also benefits the entertainment industry, which can take advantage of emerging revenue channels while remaining confident their rights are protected." For this to happen, Microsoft has licensed some of Macrovision's IP relating to managing and preventing unauthorized copies on analog video interfaces. The licensed technologies include Macrovision's original analog copy protection (ACP), new enhanced ACP capabilities for such new uses as video-on-demand and pay-per-view, and other rights signaling technologies. The agreement will make it possible for device manufacturers who use Microsoft software to license the new Macrovision ACP technologies and be ensured that it will all work together. "Macrovision and Microsoft
have a similar vision of the networked home where consumers
have freedom to choose when and where they are entertained, as
copyrights are used consistently as agreed by consumers and
their rights owners," said Weinstein. "With this
agreement, the networked home moves one step closer to
realizing that vision." Back
to Headlines SunnComm Adds More Copy Management Tools to MediaMax SunnComm International, whose MediaMax technology protects and enhances audio CDs, has enhanced its product suite with additional copy management components. The new passive protection elements are supposed to make it harder for consumers to bypass the MediaMax copy management structure on the CD. With the new technology, consumers will have to install SunnComm software on their PC in order to access the additional features and bonus content not found on conventional audio CDs. Folks who just want to listen to music will still be able to play the disc in any CD or DVD player. Software companies have struggled for years trying to come up with a copy protection scheme that can't be circumvented by a quick cheat, such as the so-called "shift-key workaround." According to SunnComm CTO Eric Vandewater, the industry has yet to come up with a "bullet-proof solution that continues to provide 100% playability on all consumer CD and DVD devices. Our new version of MediaMax represents the best solution to date and surpasses anything commercially available for audio CDs." Separately, SunnComm has released what it considers to be a "conservative" forecast for the number of MediaMax discs to be released this year. Based on feedback from more than 25 North American record labels that already use the technology, SunnComm expects MediaMax to be applied to more than 145 million audio CDs in 2005. That's more than a tenfold increase over 2004, when MediaMax was included on about 10 million CDs, nearly 100% of all copy-managed audio CDs in the US. Rival Macrovision's copy protection is more often found in CDs distributed overseas. If its numbers are correct,
SunnComm is in for a great year - it gets royalties on every
CD that contains its MediaMax technology.
Back
to Headlines EZ2Stream Protects Streaming Video EZ2 Companies, which operates a bunch of Web portals offering everything from a dating service to mortgages, vacation packages and DVD rentals, has moved beyond the portal world to launch the EZ2Stream DRM Streaming Media delivery system. EZ2 companies will license EZ2Stream to third parties as well as use the technology in its own yet-to-be-launched online movie theater. The EZ2Stream movie delivery system authenticates the user and then connects to the movie or video clip. The unique user ID is automatically created and inserted into the video at random points. If the user tries to duplicate and share the movie, it can be traced back to the offender. In December the Miami-based e-commerce service provider acquired UplinkUSA, which develops Flash-driven media delivery systems. The UplinkUSA technology is the basis for EZ2Stream and the movie streaming/download service EZ2 Companies plans to launch at its EZ2Movies.com Netflix-like online DVD rental service. "UplinkUSA has developed several Media Players with an endless list of customizable options. With typical Media Players there is no cThe software also lets content providers rotate the clips or movies available for viewing, serve up ads and embed links into the video. Video served up with EZ2Stream can play directly in most Web browsers, so there's no third-party media player to install. ontrol over the programming or logo, colors or layout. Companies can now use this kind of player to grow their own brand instead of Windows or Real," said EZ2 CEO Otto Bethlen. "Further advances include no waiting when viewing movies online. Full-length two- or four-hour movies can be delivered securely to a PC in a matter of seconds instead of the traditional 'buffering' wait. We will integrate this technology to our DVD rental business and looking to lead a segment of 'EZ DVD on Demand' for as low as 99 cents a movie." Back to Headlines
"The first key to wisdom
is constant and frequent questioning…for by doubting we are
led to question and by questioning we arrive at truth." - We try to arrive at the truth each week by questioning the people who run companies like yours. Try some of the wisdom yourself by subscribing to The Online Reporter. At $595 a year, it's a pittance for the knowledge and intelligence we provide. Rider Research Inc
5 Year Anniversary of the Dot.com Boom Five years ago, in March 2000,
the NASDAQ stock exchange hit the peak of the dot.com boom.
Lots of people wrote off the commercial opportunities that the
Net offered in the months that followed the high. Not so today
with Amazon, Google and eBay showing the way. The latest
industries that are challenged by the Net are the consumer
electronics, entertainment and phone industries.
Back
to Headlines Gates: Microsoft To Spend Another $1b on Entertainment Products Microsoft chairman and chief
software architect Bill Gates is betting that Microsoft will
land enough TV deals to make it play as significant a role in
the living room as it does in the office, according to
Business Week. Gates said there would come a day when set-top
boxes snap into a home's network of digital media products,
with a Windows-based PC serving as the centerpiece, of course.
The network will distribute video, music and pictures to
various devices in the home. Gates did not provide any
specific revenue forecast for Microsoft's digital media
efforts but did predict that the company would recoup the more
than $500 million it has spent on TV software over the last
decade, including the purchase of WebTV and its development
into MSN TV. "It will absolutely pay back those early
years," Gates said. He also said Microsoft had committed
to spend another $1 billion on entertainment products. He said
he's sure that consumers would want IPTV. "People care
about the TV viewing experience. If you can really make it
better, it has a really profound impact."
Back
to Headlines EchoStar is running print and
outdoor billboard ads for its Dish Network satellite TV
service that are targeted directly at TiVo. The ads play on
the perception that TiVos are expensive, although TiVos can be
purchased for as little as $50. Tag lines include: "Sure,
TiVo is hot. TiVo is also expensive" and "For people
who think the idea behind TiVo is cool, but the price
isn't." EchoStar was the first major TV service to market
DVRs directly to consumers. It has also taken the lead with
its multi-room DVR - start watching a recorded show in the
living room and finish in the bedroom.
Back
to Headlines Yahoo Taking Long-term View Net for Entertainment Delivery Lloyd Braun, the new head of
the Yahoo Media Group, will work on creating an entertainment
delivery business for the company. Braun, who helped create
shows such as "The Sopranos" and "Desperate
Housewives," told the Hollywood Reporter last week that
Yahoo will be in a position to seriously speak with content
creators in two or three months. He said that the Yahoo Media
Group is looking at a five to 10 year evolution of the medium.
Yahoo already provides its subscribers with extra episodes of
"The Apprentice." Back
to Headlines The Key Issue for Napster To Go
"It sounds like a cool idea, though. Too bad we can't try
Napster's new plan with our iPod. Damn, there's that
compatibility issue again." - typical quote from an iPod
user regarding Napster's new Napster To Go portable music
subscription service in Media Post. Which, in our mind begs
the question - why did Napster limit itself to 30% of the
media players? That's like selling gasoline that only works
with 30% of cars. Back
to Headlines Napster Attacks Apple with Super Bowl Ad Napster is continuing its
frontal assault on Apple with a $30 million ad campaign that
starts on this Sunday's Super Bowl. The commercial will
spotlight Napster's portable subscription service called
"Napster To Go." Apple offers no such service, only
selling à la carte track downloads. The ad compares the costs
of spending $10,000 to buy and upload 10,000 tracks from the
iTunes to an iPod with the $15 a month fee Napster charges to
download the same number of songs on Napster-compatible
players such as those from Samsung and iRiver. Apple dominates
the download market with 250 million tracks sold and the media
player market with about 10 million iPods sold, a 70% market
share. Back
to Headlines Sony Sponsors Lifehacker.com Weblog Sony Consumer Electronics is
spending $75,000 over three months to sponsor Gawker Media's
Lifehacker.com Weblog, according to Ad Age. Lifehacker.com
offers downloads (legal ones), links to Web sites and
shortcuts "that actually save time."
Back
to Headlines GoDaddy.com, a Web hosting and
domain name registry online company whose low prices and
customer support is attracting lots of customers, is running
its first Super Bowl ad. The little-known outfit ranked first
among all domain name registrars in net new domain name
registrations for the years 2002, 2003 and 2004. The pricey
Super Bowl ad is sure to give GoDaddy.com some visibility -
it's a parody of the "wardrobe malfunction" that
occurred in last year's Super Bowl half-time show.
Back
to Headlines With some 60% of MP3 player owners choosing an Apple iPod over the competition, it's not surprising that the musical gadgets are everywhere - even on the Microsoft campus. According to Wired News, this phenomenon is making some Microsoft execs very unhappy. So unhappy, in fact, that they've reportedly sent out memos saying that working at Microsoft and using an iPod - which doesn't work with Microsoft technology - is a bad idea and pointing employees to a Web site showcasing Microsoft-friendly alternatives.
(c) Copyright 2005 Rider Research, Inc. No portion of this publication may be reproduced, stored in a retrieval system, posted on an Internet/Intranet site, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, forwarded by e-mail or otherwise without prior written permission of Rider Research, Inc. Comments? Group rates? e-mail: paperboy#riderresearch.com ----------------------------------------------------------------THE
online
REPORTER
provides weekly reports and strategic analysis about digital
consumer technology and the e-commerce activities of the movie
and music companies.. It reports on all the power struggles that
have been unleashed.
If ever that overused phrase "paradigm shift" was apt, it's now, about the Digital Media industry. There's not a company in the industry that's not worried about where it'll still be standing after the deluge - and that goes for leaders like AOL Time Warner as well as that feared monolith Microsoft. Its format is concise and pointed, its style a touch brash and, with any luck, a bit controversial. Its object is to break the stories that give its readers the real inside track. It is pledged to fact and fair comment. THE online REPORTER - Intelligence for decision makers.
North American
Subscriptions: sales@riderresearch.com;
Tel 225-769-7130; FAX: 225-769-7166 Europe
: Simon
Thompson simon@riderresearch.com ---------------------------------------------------------------- Subscribe now. Only $595/£395 per year. Group Discounts available.
|
