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Ringing In 2012

2011-12-31T06:24:00.000-08:00

So we close out another year with much news in media and tech, new people and companies, ones that are no longer around. More consolidation is taking place in these two industries and I am anticipating what 2012 will bring us. I have been vacationing in an undisclosed location during most of December and will be back in action mid-January. As I have been reflecting on things, I would like to truly thank all of you you have read my comments posted here during 2011 and have emailed or facebooked me to respond with your own ideas and thoughts. May you have a safe and prosperous 2012. I am very excited to get started, see you in the new year!

Netflix Flounders As Pay TV Stops Bleeding

2011-11-30T05:05:00.001-08:00

Oh dear dear, in case you have been living in a cave and haven't kept up with current doings, Netflix, the one-time Wall Street darling and probably the marquee Internet streaming service, has fallen on some tough ass times. As the cost of its content dramatically increased, the bumbling Netflix raised prices. Customer backlash was predictably significant. The desperate company lost about 800,000 customers in the third quarter from its roughly 25 million subscriber base. As most everybody knows, Netflix offers movies and some TV shows for streaming. Hulu Plus, which is partially owned by TV networks, offers popular TV shows. But there are other over-the-top services, including Amazon’s video on demand or iTunes downloads. There are also Internet streaming boxes from Roku, Apple TV and others. Yet today, pay TV providers largely have dismissed over-the-top Internet video as a threat. The overall number of households with pay TV from cable, satellite and telephone company services has held up pretty well in the past 12 months. Why is this so?

It would seem to me that, at long last, pay TV providers have recognized that at least a portion of their subscribers want to watch video on their computers, tablets and smartphones. So, guess what? They’re starting to give it to them. What a novel idea! Several cable companies, including Cox Communications and Time Warner Cable in San Diego, allow subscribers to view content from the Internet on devices other than TVs — as long as they’re subscribers. These services have been dubbed TV Everywhere. “Rather than be afraid of over-the-top, the pay TV providers are just integrating it,” Mike Paxton, an analyst with industry research firm In-Stat. said. “Eighteen months or a year ago, there was some genuine concern among pay TV providers that over-the-top was causing them to lose subscribers. Now that concern is pretty much gone and the thought is, ‘Hey, we need to integrate this type of experience into our services.’ ”

But the stubborn fact remains; if people don’t have an interest in paying their monthly cable bill anymore, they now have an alternative that they didn’t have five or 10 years ago. “It does require some sacrifice. You don’t trade your $70-a-month pay TV package for a $20 combination of Netflix and Hulu Plus and get access to exactly the same thing,” said Ian Olgeirson, senior analyst with SNL Kagan, an industry research firm. “Maybe the content isn’t as fresh. You lose access to certain content.” Still, young adults, such as recent college graduates, may be less inclined to sign up for pay TV because they’re used to getting video over the Internet, Olgeirson said. These people aren’t cord cutters but they are substituting Internet video for pay TV. SNL Kagan estimates that over-the-top substitution, which includes cord cutters as well as people who never signed up for pay TV, will grow from 2.5 million households to 4.5 million households by the end of 2011.

Pay TV providers have rolled out TV Everywhere to combat over-the-top rivals. Cox Communications in San Diego, for example, offers Cox TV Online. Subscribers can indeed access certain shows from their TV package, as well as Hulu Plus, on computers, tablets and smartphones no matter where they are. The programming is streamed over the Internet and password-protected. Ryland Madison, director of broadband marketing for Cox, said the company believes most people still want to watch most programs on a big-screen TV in their living room. Since Cox TV Online was introduced in May, it has had a modest number of users. “We see it more as complementary — an added value to our service,” he said. Time Warner Cable offers an iPad app that allows customers to access their cable programming via a Wi-Fi connection — but only in their homes or yards. “It’s really kind of a defensive strategy” for pay TV providers, Mark Kersey, head of industry consulting firm Kersey Research Strategies said. “They don’t charge for it. They’re investing in a technology that is not going to provide a direct return. It’s more about preventing subscriber loss.”

What are your experiences? Have you cut the cord for a period of time or full time? Do you think this is the future and are the TV execs on the right track? Please feel free to email me with you thoughts, I always enjoy your insights.

Thank You Steve Jobs

2011-10-06T08:22:00.000-07:00

(Aldo Bender (left) and Scott Powel with Aldo's first Mac in 1994, yes, floppies in Scott's hand...)

My first computer was a Tandy Color Computer 2 (back in the '80s) and you had to learn Basic to make it do anything. The experience really sucked and the damn thing ended up sitting on my desk and looked impressive (at least to me) at the time even though I couldn't be bothered to turn it on more than a couple of times. Fast forward about ten years (to the picture above) and I had just returned from my second trip to DJ in Japan and had a few extra bucks. My first major purchase with that money was a Mac Quadra with a Motorola 040 chip set and 512 megs of memory. It changed my life, I learned to love and use that machine and I ended up sticking with the Mac platform during those dark years of Steve's absence (the Gil Amelio years, oof!). When I eventually got into producing music, Steve Jobs and the Mac were there for me (and all my friends). Quite a few of us made more than a few dollars using the computers and, later, the music software his company was responsible for "mainstreaming" into the world. Some of us made even more money on that once laughable Apple stock. Once Steve came back full time to run the company he co-founded in his parent's garage with "the Woz", it wasn't long before the laughing ended up occurring on the way to the bank. Even though we all knew he was indeed, very, very sick, for me it was a extremely sad moment to see the news (I literally groaned out loud) splashed across the Fox Business Network yesterday and into the night. Goodbye Steven Paul Jobs, and thank you for everything...

Doh!

2011-09-29T05:47:00.000-07:00

Fresh on the heels of putting the brakes on the ATT/T-Moble merger, the U.S. Department of Justice has asked Google for more information about its planned $12.5 billion purchase of Motorola Mobility, potentially slowing the transaction, Google said in a blog post Wednesday. Google received a so-called “second request” from the DOJ asking for more details with which to evaluate the deal. The acquisition is Google’s largest ever and would marry the top search company with one of the biggest sellers of Android-based devices.

“While this means we won’t be closing (the deal) right away, we’re confident that the DOJ will conclude that the rapidly growing mobile ecosystem will remain highly competitive after this deal closes,” Google said in a post on its Public Policy Blog. It called the request “pretty routine.” Its dominance of the search market means Google is no stranger to regulatory scrutiny. Its acquisitions of AdMob and ITA Software, among others, were examined closely, and the Justice Department also reviewed its settlement with publishers over Google Books. Google said last month it would buy Motorola Mobility, a move that will bring it a large patent portfolio and give it control over the development of some Android-based devices.

With all the messes this current DOJ has created, (anybody remember gitmo trials in NYC, Mexican gun-running or how about Arizona's immigration laws? ), shouldn't they just step back, chill, and let our Tech sector create the jobs America so badly needs at this point in time? Are the only jobs this administration wants to create "green jobs" like the ones at Solyndra? Is the Obama admin really this inept? What do you think? Is massive government regulation and interference the way to create jobs today? Are we really stuck in this horrible cycle until we elect new leadership in Washington D.C.? In my opinion, this current team of ham-fisted politicians at the top are really stuck in reverse... Please email me with your thoughts, I always love the feedback...

Summer Vacation

2011-08-31T13:18:00.000-07:00

I have been enjoying some down time and will rejoin the world in September.

Apple Loves Hulu?

2011-07-30T10:24:00.000-07:00

As most of you who have read my columns and research papers over the years know all too well, I have been a proponent of many things Apple, including their various media plays. While the iTunes Store has been offering video content since 2006, it doesn't take a analyst to notice that the company rarely talks about the number of movies and TV shows that it delivers. Rather, the big numbers are actually in apps for all their mobile gadgets because, honestly, sales of movies and TV shows through the years have not proven to be "the cat's meow" as Apple might have hoped. If nothing else, that should be a glaring indication that video is not exactly a cornerstone of the company’s business thus far.

Meanwhile, companies like Netflix and Hulu have been attracting plenty of consumer attention but are struggling mightily to make even a small profit. And oh yes, my friends, Apple has done TV, but alas, it’s never really done it right. So while all the recent hubbub has focused around why a Hulu-Apple deal doesn’t make sense, in some ways these two companies actually make perfect partners. Consider these nuggets; Hulu has a large catalog of video content that consumers want to watch, and the licenses to stream them; Apple has proven experience in delivering content to users on a variety of devices. Despite what might seem like a considerable amount of overlap, there are pretty good reasons why Apple might seriously consider acquiring "The Hulu". A company such as Hulu would give Apple a strong position in the quickly burgeoning streaming video business, a pretty hip move, but is that a business Apple definitely wants to be in? The Apple TV—specifically the one I use, the tiny Apple TV 2 , which has a decided emphasis on steaming over storage, suggests it does. While the company has continually described its own foray into the living room as a “hobby,” chief operating officer Tim Cook recently said that the company would continue investing in the device because it thinks there’s something there. But clearly, reading between the lines of Mr. Cook’s comment, it’s obviously not all there yet.

Some have suggested that Apple’s purposes might be just as well served by a deal streaming Hulu to the Apple TV, as Apple has done with Netflix. I don't like that option because of the obvious risk that Apple might cannibalize its own video sales without necessarily driving enough Apple TV adoption to compensate. The outright owning of a company like Hulu would instead give Apple the power to shape the service to its own needs. Hulu indeed has been weighed down by its own problems; but being acquired by Apple might be very beneficial for the company, which has seen its share of friction between "content" management and ownership and knows the ropes. The content providers (and co-owners) have increasingly hamstrung Hulu’s offerings and I proffer one glaring example. It really was once a simple matter to find and watch a show, but consumers now have to contend a totally bizarre maze of hoops to jump through, depending on your operating system or device you will ultimately watch the content on. Frankly, this absurdity won't fly under potential Apple rule. Devices are the Apple’s bread-and-butter, and the smart money would bet heavily that expanded licensing for streaming to devices would be a big part of any deal Apple tried to strike with Hulu’s current owners. A streaming service whose prime focus is the Web wouldn’t fit very well with Apple’s business, but streaming TV shows to the iPhone, iPad, iPod touch, and Apple TV is, well, ahem, exactly what the folks in Cupertino have been (and continue to be) angling for.

Okay Aldo, and what about the owners of the precious content? Simple, I can just imagine what with more than 220 million iOS devices out there, a streaming service for these iOS users could prove very, very lucrative. And Apple will, no doubt, utilize the iTunes accounts that all those users already have. That means money, big money, plain and simple. The real potential win for Apple, though, is adding a subscription media service. The forward thinking tech company hasn’t ever really, genuinely tried this model, unless you count the Season Pass offerings on the iTunes Store, and in my opinion, those are a joke. Apple’s approach of à-la-carte purchases and rentals looks decidedly old-school for a company that’s otherwise in the forefront of the digital media revolution and the addition of Hulu could vastly change that landscape forever. What do you think? Do you already subscribe to any of these streaming services? Does Apple's addition of Hulu make sense to you? Please email me with your thoughts and experiences, I enjoy the give and take, even if you think I have been smoking the "hippy lettuce"....

The Future Of Social Music Online?

2011-06-28T07:47:00.000-07:00

I have been testing a new music service that, as a former DJ, immediately caught my eye because of the name. One big reason Turntable.fm is so great is that it includes nearly every song in the world, literally. The service’s impressive catalog already includes more than 11 million tracks from MediaNet and if you can’t find what you’re looking for there, you can upload any MP3 from your computer, for real. And let me tell you, at this moment in time, people are simply flooding into Turntable.fm. The service has occasionally had to put the brakes on new invites, but it would appear you can still get in if you’re Facebook friends with someone who uses it. Additionally, Turntable.fm says it plays by the rules of the Digital Millennium Copyright Act by complying with any copyright holder’s request to remove content from its catalog, which should cover whatever music its users wants to play, although that DMCA take-down approach doesn’t always work. No surprise there...

There’s also the sticky and often far-too-expensive matter of paying for all that music. Turntable.fm appears to be covered by the DMCA’s non-interactive rules. That makes licensing affordable enough for a company like, say, Pandora to remain in business, although Turntable.fm might violate at least the part of the DMCA about honoring user requests. That's because as of this date, if you’re a DJ in a small room on Turntable.fm, you can “request” a song and hear it in under an hour. In this past month it has, without a doubt, become the most "chatted up" development in digital music. By one unofficial count, there are more than 140,000 people on Turntable.fm to DJ or listen to what someone else is playing.

To those who regularly read this blog I say, this is social music, the actual thing as opposed to the buzzword. And out of all the social music apps we’ve seen so far, Turntable.fm demonstrates most clearly the allure of such services. It's funky-as-hell design immediately evokes a place where people listen socially, together as one, unlike the time-delayed social experience of sharing Pandora stations or YouTube videos on Facebook. One problem with these crowds is that in a full room, you can no longer see the needle move when you designate something as Lame or Awesome, giving the impression that one’s vote doesn’t matter. Yes Virginia, there actually is a "coolness meter".

Billy Chasen, whose company, Stickybits, created Turntable.fm in part by using investments in its business of making barcode stickers, was recently asked what he thinks about this massive expansion of his new music destination. Surprise of surprises, he’s not talking about that and furthermore, he also declined to address Turntable.fm’s business plan but while Chasen wouldn’t speak to Turntable.fm’s future plans, it definitely has a few options: It can implement ads; let marketers sponsor branded listening rooms; charge a monthly subscription; and/or charge for points currently earned by DJs for pleasing audiences. Regardless of which way it goes, some people are going to be upset about it, because we like to get free stuff (why wouldn’t we?) and can be annoyed when ads show up where they didn’t used to appear. Turntable has other scalability issues — like how to fight spam in the chat feed, currently non-existent, and how to keep its servers running smoothly as hundreds of thousands or millions of new users find out about the service. That’s going to be even harder if it has no money coming in.

Then there is the 800 pound gorilla in the room named Facebook. Let's see how it all plays out but, in my opinion, this is moving the game forward, big time. What do you think? Have you been sucked into Turntable.fm yet and if so, what was you experience like? Please feel free to email me with your thoughts as I always enjoy your feedback.

A Nation Of Laggards?

2011-05-23T06:28:00.000-07:00

I have always felt that the promise of a speedy internet is the simple understanding that a true broadband connection is yet another content pipeline into our homes and businesses, nothing more and nothing less. Yet these United States continue to lag far behind other countries in broadband adoption and download speeds, according to a report released by the Federal Communications Commission last Friday. Extending affordable Internet access to all Americans is a priority of the FCC. This bloated government agency released its National Broadband Plan last year, a blueprint for expanding coverage, making more airwaves available for mobile services and upgrading Internet speeds up to 25 times the current average. Why on earth is the good ol' USA ranked ninth out of 29 countries for mobile broadband adoption on a per capita basis, and 12th out of 33 countries for percentage of households with fixed broadband? Didn't our military develop this technology back in the day?

Currently, the United Kingdom, South Korea and Iceland were among countries to top the United States' 63 percent broadband adoption rate. If you find that discouraging, check this factoid out; the average download speed was found to be 11.7 Mbps in New York with a population of nearly 8.4 million people compared with 35.8 Mbps for the 10 million residents of Seoul, South Korea. It is pretty shabby that consumers in some large European and Asian cities reported faster download speeds than consumers in comparable U.S. cities, as this FCC report makes obvious.

But while the agency acknowledged that gaps and variations in data collection methodologies across countries prevent any definitive conclusions from being made, it has been apparent to those of us who monitor these things, we are indeed a nation of broadband laggards! Even more frustrating, a completely separate FCC report (also released on Friday) found that about 26 million Americans, most of whom live in rural areas, do not have access to broadband. A third of Americans with access do not subscribe to broadband, likely due to high costs, low digital literacy and concerns about privacy, the FCC said. Having spent a fair amount of time in such areas, download speeds really are beyond pathetic and while smartphones and 3g have made life bearable, it still is quite embarrassing to have so few broadband options and it makes moving out of the city far less appealing right now.

A quick glance at this growing gap between the USA and other countries with faster broadband leads me to obvious glaring differences in land mass, we are a huge country and it will take massive infrastructural investments to catch up in speed and coverage. Is government the only answer? Michael Powell, president and chief executive of the National Cable and Telecommunications Association doesn't think so. "While the Commission's headline proclaims that 20 million Americans are denied access to broadband, by that measure private investment has fueled the build-out of broadband networks to nearly 300 million consumers and is responsible for the jobs that flow from that investment" he was recently quoted as saying. I tend to agree with him, even though he was a recent chairman of the FCC. USTelecom's Walter McCormick Jr pointed to FCC data showing that 95 percent of Americans have access to fixed broadband, and 93 percent are happy with their service. He also said private sector investment in broadband grew by $3 billion from 2009 to 2010 to $66 billion. "Clearly the private sector is doing its part, broadband has been deployed to virtually every corner of America where a business case can be made for investment," McCormick said.

Powell and McCormick are, at least, partly right and I have the proof! I have been spending more and more time on my 11 acre ranch in a rural SoCal area and finally "ditched the dish" (HughsNet Sat Services) in favor of a privately owned wireless "mesh network" that currently runs off a couple of T1 lines but that will be upgraded soon to the ATT fibre optic network (26 strands, mind you) that has been off limits to us thus far. Is the Obama government bringing this faster internet speed to my ranch? Nope, but the private sector is... and that, friends, is where the ultimate answer to real broadband speed lies.

What is your experience in these matters? Are you living in an under-served area in year 2011 or perhaps you are under a rock, in a cave? Please email me with your thoughts and experiences, I am always happy to read your feedback.

TV Is Everywhere

2011-04-22T05:14:00.000-07:00

While the fight heats up over Time Warner Cable and Cablevision delivering conventional television programming to their customers' iPads, other companies are trying to use the tablet to redefine exactly what TV might someday become. A decent example is the San Francisco-based Remixation, the company behind Vodpod, which unveiled an intriguing online video application for the iPad this past Wednesday.

This cool free app, Showyou, enables people to create and watch very personalized streams of online video. Instead of relying on the (dubious) talents of TV studios and network programming executives, it draws from user-generated content sites (YouTube, Vimeo and TED at the moment) and social networks (Facebook, Twitter and Vodpod). It also takes advantage of the touch screen on the iPad (or iPhone or iPod Touch) to make it easier to navigate through the grid of shows, rather than the up-down and left-right buttons of a TV remote. Chief Executive Mark Hall explains that the short-term goal is to be "the best app on your phone or your tablet for finding video and sharing it with your friends," but "the more provocative long-term vision" is to become a prime-time TV alternative.

That should rattle some cages in Hollywood and, frankly, it's quite a reach, especially considering that Showyou doesn't accommodate videos from the major TV networks' websites or Hulu, and , importantly, it doesn't support Flash. It can, however, be displayed on a big television screen if you've got an Apple TV set-top box, using Apple's excellent Airplay technololgy to stream video wirelessly from the iPad, iPhone or iPod Touch.

And, in truth, Showyou can be quite addictive. The iPad application aggregates 800 clips in a grid that can be scrolled in two dimensions. The ones displayed closest to the starting point (that is, the upper left corner of the grid) are the newest clips posted by the people you follow on Showyou, Facebook, Twitter or Vodpod. The app then leavens your feed with clips popular among other Showyou users.

Even better, it works on an iPhone or iPod Touch, although the interface is one-dimensional -- you scroll up and down, not left and right -- and it's divided into three streams: a feed from Showyou users, another from your social networks, and third filled with Showyou's most popular clips. Unlike the one-way broadcasting platform of conventional TV, Showyou actually encourages users to interact with the material. For example, people can leave comments about videos, share the clips posted by users they're not following with the ones in their own network, and actually push the videos they like up Showyou's popularity ladder.

So what about the revenue stream? The company plans to support itself by selling advertisements, although CEO Hall said users will be able to choose whether to watch them. It also hopes to sell subscriptions to premium tiers of programming that probably would be longer-form videos. No details yet, but it sounds like a way for Showyou to integrate something like Hulu Plus, the $8-a-month service I have written about that enables people to watch Hulu on iPads and other mobile devices. With major TV networks having second (and third) thoughts about providing new programming for free over the Net, services such as Showyou will eventually have no choice but to create premium tiers if they want to offer TV shows that aren't weeks or months old, but that's just my opinion. Then again, Showyou may not need full episodes of "30 Rock" and "The Daily Show" to be sufficiently entertaining (yawn). YouTube is a rich universe crying out for the kind of culling that Showyou promises. Naturally, one's Showyou experience depends on how intensely the people you follow on Facebook and Twitter are about sharing the videos they stumble upon at YouTube and other sites that don't rely on Flash.

In all fairness though, as with any app that relies on social networking tools, the experience will vastly improve as more people use it. Will you (or do you already) watch more TV on these mobile devices? Please feel free to email me with your thoughts, I am always looking forward to your comments...

Is It Time For Caps?

2011-03-14T05:56:00.000-07:00

I have been waiting for this news for quite awhile and finally, the wait appears to be ending as AT&T on Sunday confirmed that it will impose a 150GB data cap for its DSL customers, effective May 2.

Users who exceed 150GB will be charged $10 for ever additional 50GB they consume. The company said that less than 2 percent of its customers will be affected; the average DSL customer user about 18GB per month.

"We are committed to providing a great experience for all of our Internet customers. Less than 2 percent of our Internet customers could be impacted by this approach - those who are using a disproportionate amount of bandwidth," AT&T said in a statement. "We will communicate early and often with these customers so they are well aware of their options before they incur any additional usage charges."

AT&T said it will notify customers when they have exceeded 60 percent, 90 percent, and 100 percent of their monthly data allowance. The provider will also provide access to a usage report as well as tools like a usage calculator and examples of the kind of activity that will eat up data.

I have quite extensive experience with these broadband caps and they can be quite restrictive, and those living in rural areas, even in Southern California have very few options for broadband. And before you get too irate at these proposed limits, allow me to tell you that satellite services like HughesNet limit you to 500 mbs per 24 hours, that's less than 30 gigs per month compared with the data caps first reported by DSL Reports, which said that U-Verse high-speed Internet customers will have a 250GB cap, which AT&T also confirmed. Anyway you choose to look at it, that is a gaggle of bandwidth and far more than a average user will currently use!

Reports of a 150GB data cap for AT&T customers date all the way back to 2008. At that point, AT&T kicked off a test for new customers in Reno, Nevada, allowing them to use between 20GB and 150GB of bandwidth per month depending on their speed tier.

That came one month after Comcast announced that all its residential customers would be subject to a 250GB per month data limit. Comcast had come under fire in 2007 for cutting off service to customers who consumed a large amount of bandwidth but refusing to provide those customers with information on how much bandwidth they were able to use. That led to accusations of Comcast cutting off access to P2P services like BitTorrent, an FCC enforcement action, and a net neutrality debate that continues today.

That year, Time Warner Cable also experimented with bandwidth caps, but a public backlash prompted the provider to scrap the test in April 2009. Time Warner took some heat because its caps were relatively low – between 5GB and 40GB. The company eventually announced it would also offer a 100GB "super tier" and unlimited service for $150 per month, but by then, Congress was already up in arms and interest groups were circulating online petitions against the caps.

With all the audio and visual content continuing to move online, the caps are here to stay, it was always going to shake out this way, but let's keep the private sector in control, the government will just muck it up! Are you chaffing at broadband caps as I am? Have you ever bump up against a cap on a regular basis? Please feel free to email me with your thoughts, I always enjoy reading your comments.

Going legit...

2011-01-04T13:08:00.000-08:00

It's another new year and I wonder if it is time for the music companies to admit the era of stealing music via the Internet is officially over. Don't hold your breathe but in my opinion, it is time for them to drop that silly argument, it's so, last decade! And, I think it's high time for all of us digital music lovers to go legit because the simple truth is that we won that nasty DRM war. It's over, call it a day! And at the beginning of this new year, maybe today is a good time to examine some of the obvious reasons for this.

When Apple launched the fledgling iTunes Music Store back in 2003 there was quite a lot to complain about. Tracks you bought on one machine were stuck there, thanks to that old netizen bogeyman, DRM (digital rights management). I remember reading about the day when an Apple store was actually picketed by nerds in hazmat suits attempting to educate passersby on the evils of DRM. Maybe this wasn't a seminal moment in this sordid history, but alas, in January 2009, Apple announced that it would remove the entire copyright protection wrapper from every song in its store. Today, Amazon and Walmart both sell music encoded as MP3s, which don’t even have hooks for copyright-protection locks.

A few years ago, audiophiles dismissed iTunes’ 128-Kbps resolution as anemic, even though it supposedly passed rigid blind testing against full-bandwidth CD tracks of the same song. The sound is compressed, connoisseurs said. The high end is mangled. Have you heard that argument recently? Probably not and one reason is that online stores have cranked up the audio quality to a fat 256 Kbps. To most ears, it’s indistinguishable from a CD. It’s certainly better than most of the stuff out on any of the torrent servers. For those of you reading this that still hate the sound of digital music, you probably need to go back to vinyl. You can get a pretty good turntable from around $500 to over $2500.

Let's be real honest with each other here; most all of today's music is so cheap, there’s no reason not to buy. Besides, many downloads send 20 cents straight to the band. You read that right, straight to the band, baby! If you are still a digital music hater, you might get a bit more traction with the major gripe that official stores still don’t carry every track ever recorded. But, over time, you might finally see AC/DC join the Beatles in iTunes. For other artists, contract restrictions mean some songs can’t be downloaded in every country, which indeed seems rather out-dated and very backward for a store on the border-free Internet. Here in the Sates for example, we can’t buy Daniel Zueras’ 2007 Spanish hit “No Quiero Enamorarme” from the iTunes store for Spain. Still, the available inventory keeps growing, including many artists’ back catalogs. I have recently discovered more and more tracks that I used to spin weekends at the massive events I was involved with are available from iTunes, Amazon and others. Way back in the day, only a couple of years ago, I was struggling to find digital copies of many of these same tunes!

So, for most of today's remaining digital pirates, that leaves one last lonely war cry: Music should be free! It’s art! My response to that is; are you kidding me? I mean, a song costs but 99 cents. Walmart has pushed some of its MP3s down to 64 cents. At most online stores, you can sample any song you want before you buy. Still too much for you cheapskates? Rdio charges $5 a month for all the music you can eat, served up via the cloud! So then, when all is said and done, there’s really no reason not to buy.

After reading this, surely I have convinced you that there are reasons why you should buy. The most obvious; when you buy instead of steal, you’re actually paying the band. Most download retailers send about 70 percent of each sale to the record companies that own the music. Artists with 15 percent royalty deals get 15 percent of that 70 percent, or about 10.5 cents per dollar of sales. Musician who write their own music and own their own music publishing companies, like me, for instance, get another 9.1 cents in “mechanical royalties.” So, when you add it all up, every download actually does send 20 cents straight to the band and those are pretty firm numbers. The real truth for me in 2011? If you are still stealing music nowadays, you're just cheap!

Taking A Break

2010-09-29T05:33:00.000-07:00

I have been swamped with some new projects that are very time intensive so my posting will be sporadic for the next couple of months or so. I will try to keep all of you informed on media and tech matters the best I can, but there may be some blank spots and I thank you for your patience. Some big things are in the offing, keep checking back in when you can...

Digital Doings And The Demise Of Blockbuster

2010-08-30T05:37:00.000-07:00

Those of you who regularly read my rants on this website know I still feel digital distribution of movies and TV shows is barely in its infancy. Services such as Hulu, YouTube, and Boxee are still developing. Apple is reportedly working on some kind of new digital-video service perhaps tied to a new generation of Apple TV perhaps due out as soon as this week. While we still have a long way to go, it doesn't look to me like the brick-and-mortar video stores will be making the trip. There was a time when the girlfriend and I would roam the isles on a Friday night along with many other movie lovers picking up our selections for a coming weekend, the video rental stores were seemingly on every corner...

Those days are in the rear view mirror folks and the car is picking up speed. The Los Angeles Times has reported Blockbuster reportedly plans to file something called a "pre-planned bankruptcy" and will continue to pay the studios and other most other major creditors. This development shouldn't surprise those paying attention to media tends. For many years now, Blockbuster has closed stores, laid off thousands, and generally been tumbling towards extinction. Driving to a video store to rent a movie has become as passe as hiring a travel agent, developing film, or listening to music on compact discs! Mainstream consumers have opted for renting movies via rental kiosks such as Redbox, cable's video-on-demand, and especially Internet rental services--most specifically Netflix. Since 2008, the once industry-dominant Blockbuster has lost more than a $1 billion and, adding insult to injury, just this month, Netflix penned a five-year deal worth nearly $1 billion to stream movies from Paramount, Lionsgate, and MGM.

The Northern California based Netflix will likely top 20 million subscribers next year and last year generated $115 million in net profit on $1.6 billion in revenue. This is just the beginning of things to come and this new digital landscape continues to evolve at a rapid pace and cloud computing only promises to speed this process up. What do you think? Will these massive chains like Blockbuster and Movie Gallery just go away or will they somehow adapt to a Redbox business model? I welcome your thoughts and comments via email, Facebook or AIM, they are always great reading.

Bad Times In The Music Biz

2010-07-28T06:31:00.000-07:00

I have been watching music sales here in the USA and it seems to me that the bad times are just getting worse. To be perfectly frank, listening to FM radio here in the States, it doesn't take very long to sort out one glaring reason why they continue to slump, but, I digress.... What caught me by surprise was an interview I came across the first week of June where Universal Music Group Distribution president Jim Urie was actually quoted saying "We think this is the lowest week ever, or at least of the Soundscan era". This was at the end of May 2010 on a week when sales totaled a less than stellar 4.98 million. By quick comparison, the previous year's sales total at the same point in time (May 2009) was 5.79 million units. Anybody but me notice an ugly trend here? Today, we use a company known as Soundscan to help us compile these numbers and while there is no precise way to compare the latest total against pre-Soundscan tallies, Billboard Magazine estimates that weekly album sales volume could, in fact, be at its lowest point since the early 1970s. The highest one-week tally recorded during this current Soundscan era is 45.4 million albums, in late December 2000. Ten years later? 4.98 million a week! Ouch, those numbers really hurt the bottom line...

What scares me more than these paltry sales numbers is the fact that the top execs continue to point the finger at the internet as the problem and refuse to look in the mirror. UMGD's Jim Urie had the gall to claim the drop off in sales gives "all the more reason why everyone in the industry should be focused on getting the U.S. Congress to introduce legislation that makes the Internet service providers our allies in fighting piracy. Piracy is getting worse and worse, and the government needs to focus on that." Oh dear, let's play the blame game... What had he been smoking before that interview? Did he skip his meds? I have pointed out in the past that the sales are definitely still out there, simply look at Lady Gaga (whose music I avoid whenever I can). Believe it or not folks, you actually have to be quite clever in today's market and get back to the basics, MARKETING YOUR ARTISTS. This task is quite different than it has been in the past and (apparently something lost on the top execs) you can actually use the internet as a tool today if you know what you are doing. There are plenty of examples of this, all you have to do is look around, but, if you are running a music company today, do you expect the sales this month to grow as you rely on the same tired business models that once produced 388.2 million units in 1973? Times have changed, not only in the recording studio but out on the street too. The honchos at the top better wake up to this new reality quick, because, this is the new reality and we are never going back to those heady days of the 70's, thankfully...

A Battle Royale; Apple v. Google

2010-06-23T12:53:00.000-07:00

Have you ever wondered when you would feel the real need to upgrade your flat panel TV set to a technology that included an Ethernet connection on the back right next to the HDMI plug? Well, that day is coming and maybe sooner than we all thought. The battle lines are being formed today and it would appear to me that the two major players are.... wait for it.... Apple and Google.

It has only been a few weeks since Google announced it would create a brave, new world with its Google TV platform and here have been many reactions and much commentary and to be honest, and, in my opinion, most of it misses the big picture and that is disappointing. A couple of points I will proffer so you can get your head around the future TV viewing experience and why it even matters, financially.

First, some in my line of work have expressed surprise that Google would even care about TV in the first place. Google does, in fact, already suck nearly $7 billion dollars into its coffers each quarter from that little old search engine it sports, a run-rate of $27 billion a year. At first glance, not too bad, right? Take a close second look though and it could be viewed as a hindrance. Looking at it this second way, Google's core business is so terribly profitable that it's hard to justify investing in its acquisitions and side projects which have zero hope of ever contributing meaningfully to the Google business bottom line.

Second, nearly 10 million homes in America already connect their PCs to their TVs to watch that content today and believe it or not, there's now enough content online between YouTube, Hulu, and Netflix, to make it worth the bother of connecting the TV to your Ethernet or wireless network, something that simply wasn't there just a year ago.

Third, Apple itself will have to respond and in a big way. Factoid; Apple will kick itself that it didn't tackle TV in a more focused fashion sooner, when it had the chance. Jobs has admitted the Apple TV was a hobby and in earlier interviews, has painted the entire TV market as nearly impossible to overhaul. The Apple TV, on a good day, is capable of taking your attention for no more than an hour, two at most, and then only if you have paid to rent or download a movie from iTunes. That's an infrequent scenario at best and to be perfectly frank, Steve Jobs is actually ignoring the fact that his solution (and all the other solutions tried so far) didn't really bring the kind of power to the TV that Google TV has the ability to.

Think of the battle this way; with broadband penetration at two-thirds of US households, higher in many European and Asian markets, and with home networks in more than a third of US homes, the base layer of high-speed connectivity to and in the home can very soon support Google's ambitions, large as they are. Google TV could be the persistent interface that resides on your TV, giving you access to search functions (searching linear programming, web video, and even the general Web to get IMDB facts or background on the series finale of 24) any time you're watching TV, not just when you switch the input. That's far beyond what we can do today with that Ethernet port that seems out of place on the newest TV you can purchase at Best Buy this month.

The bottom line is this: TV matters in a way that nothing else does. Each year, the television sets in our house drive roughly $70 billion in advertising and an equal amount in cable and satellite fees, and another $25 billion in consumer electronics sales. Apple has become the largest tech company in the USA due, in part, to staying on top of (and indeed creating) trends while Google simply wants to run the world, always has, always will. However, when really thinking it through, when was the last time you saw Steve Jobs and Apple backed down from any fight? Thus, the battle lines are being drawn and this coming "war" will take place in front of our eyes. What do you think? Are you already plugged into the internet on your flat screen TV rig? Who do you trust more (or less) to deliver the content you want, the way you want it? Please feel free to email me with your thoughts, they are always welcome.

The Reality Of TV Programming

2010-05-11T05:30:00.000-07:00

Could it be that the far-too-long reign of reality shows on American television is ending, finally? I, for one, can only hope so! A close look and in depth analysis of pilot orders by Barclays Capital analyst Anthony DiClemente, ABC, CBS, NBC and Fox have ordered a total of 84 pilots, and of those 44 are comedies. Last year, the big four ordered 81 pilots, of which 34 were comedies. The drama orders are basically flat, with 35 ordered this spring compared to 34 last year. DiClemente did not include the CW, but that network has six drama pilots. The CW does not program comedies, at least not on purpose.

Taking a massive hit are these awful reality shows. DiClemente, who is sourcing the trades, says there are only five unscripted shows in development at ABC, CBS and NBC combined. Fox has none for the fall but a few for the spring. What a relief! The CW has four reality show possibilities for the fall. Last year at this time, there were already 13 unscripted shows in development for fall on the big four. Of course, keep in mind reality shows don't always require quite the prep time as traditional sitcoms and comedies. Murdoch's Fox has ordered the most comedy pilots, with 13 in the works, per the report. Disney's ABC, which has already said it will bring back three of its Wednesday night comedies ("Modern Family," "Cougar Town" and "The Middle") for second seasons has 12 comedy pilots, while (GE's) NBC has 11. CBS, which has the fewest holes to fill, ordered just eight sitcoms.

While too many analysts try to identify trends with what genres are being ordered, it often has just as much to do with what an individual network needs at a given time. Last year, NBC ordered only 15 pilots because it was banking on Jay Leno filling the 10 p.m. hour. We all know now how that turned out. This year it has ordered 22, including 11 dramas.

Owning your own content is still a big and necessary priority for the networks. Even NBC, which has obviously struggled this season, has 14 pilots that are in-house. Of Fox's 17 pilots, 11 are in-house. Anyone for some laughs this fall? It seems the networks are betting on it. What do you see for the future of programming on the big four? Are you as burned out on reality shows as I obviously am? Feel free to let me know your thoughts via email, I always welcome your viewpoints.

What's Next For MGM?

2010-03-24T06:41:00.000-07:00

I have been watching the saga of the once mighty MGM, which, struggling with $3.7 billion of debt, said in November it was exploring a potential sale of the company. At the time, its other options included operating as a stand-alone entity or forming strategic partnerships. Now, close to six months later, we can see the possible formation of a final decision on what to do with all those great old films in it's massive library. MGM's debt mostly stems from its 2005 buyout for $2.85 billion by a group including four private equity firms -- Providence Equity Partners, TPG, Quadrangle Group and DLJ Merchant Banking Partners, a unit of Credit Suisse -- and media companies Sony Corp and Comcast Corp. This buyout obviously didn't end up as planned and the downturn in the global economic picture certainly didn't help the deal's fortunes. At one point, MGM had earlier this year even considered a prepackaged bankruptcy along with a sale.

Now comes the word that Time Warner, late Monday afternoon, finally submitted it's much rumored all-cash $1.5 billion offer for Metro-Goldwyn-Mayer Inc., joining two other known bidders, independent studio Lions Gate Entertainment and industrialist Len Blavatnik's Access Industries. MGM declined to comment on the specifics of the offers other than to say in a statement that the company had received "a number of bids as part of its ongoing process of exploring strategic alternatives, which include continuing to operate as a standalone entity and evaluating a potential sale of the company." MGM said it will evaluate all the bids over the next several weeks, while working with its lenders to extend the current forbearance period for paying interest on its $3.7 billion bank debt, which ends March 31, 2010. Additionally, MGM is hoping to strike a (different) forbearance agreement for its separate $250 million revolving credit facility with JP Morgan Chase, which is due in full on April 8. What a mess! Although the exact amounts of the offers are not binding, these current bidders were required to demonstrate how they would finance a purchase of MGM, said a person close to the situation. Since MGM was first put on the sales block last fall, a number of suitors have dropped by the wayside, including, most recently, John Malone's Liberty Media and hedge fund Elliott Associates, which backs Ryan Kavanaugh's Relativity Media.

This current Time Warner bid is the deal that makes most sense to this observer. MGM has a renowned film library, home to the very popular James Bond movie franchise and other fine gems, but has been struggling to create new hits as sales of DVDs shrink and people access more of their entertainment online. Time Warner has this weak spot of MGM covered quite nicely, they continue to crank out the hits and also have a (semi) forward thinking strategy (cable, fiber-optic, pay-per-view, etc.) to take advantage of the trend to an all digital universe. We won't have to wait much longer to see how this situation works itself out. What do you think of this potential marriage of partners (and film libraries)? Does it make financial sense to you? Please feel free to email me and let me know your thoughts, as always, I am happy to respond...

My 2010 Winter Musings

2010-02-02T07:19:00.000-08:00

While I was on my winter break, skiing in many feet of fresh pow, I had many opportunities to discuss music trends with the younger set, those mainly on snowboards while I still use the traditional ski. I find that catching up with people while they recreate provides some of the most honest opinions and you can certainly learn a lot that way if you listen up. Last year was a very interesting year in music and I though I would share my thoughts on a breakthrough star and what it could mean to the (near) future of music.
I want to confess right off the bat, I am no fan of Lady Gaga's music and while I freely admit that some of her tunes are quite catchy and her (1001) costumes are indeed eye popping, she is, in fact, far too "pop music" for my tastes. However, when it comes to marketing herself and selling music in a digital age, she takes a back seat to nobody. It is really an excellent case study in how to sell music in today's digital age.
Case in point; Lady Gaga's massive digital sales, almost all of them iTunes downloads, really only tell a small part of the overall story. The real truth is, much of Gaga's audience got her music for free, and legally. They have listened to free streams, indeed by the hundreds of millions, on YouTube and the other online services that Gaga currently leads, according to research firm BigChampagne. On MySpace, Gaga has had 321.5 million plays. By extreme contrast, singer Susan Boyle tallied only 133,000 plays, despite scoring the No. 2 selling album of 2009. A difference (among many) between Gaga and the frumpy Scotswoman discovered on a British TV talent show: Ms. Boyle's material, including "Amazing Grace," was traditional—and so were most of her buyers. Some 97% of her albums were sold on compact disc.
"That tells you how pronounced the generational divide is," says BigChampagne founder Eric Garland. When it comes to the free streams that dwarf her still-impressive sales, Gaga isn't giving it away for nothing—musicians typically earn fractions of a penny each time a song is streamed on Yahoo, for instance. While most artists stand to profit more from high-margin CD sales, being embedded across the Web can pay dividends in exposure and the loyalty of fans.
In my humble opinion, the music biz needs many more Gagas. The failure to realize what digital music means over the last decade has forced the major record companies to cut their work force by 60% or more, just last month, dozens of Universal Music Group employees were laid off. Even Gaga's own publicist took a buyout and his job won't be filled. Labels have had to change their relationship with artists and lean on new partners, including the talent managers they often squabbled with in the past and the live show is becoming the important staple it was back in the 1960s, yes, do I ever feel old...
All of this upheaval has given rise to, in industry speak, the 360 deal, in which a label invests more money up front (for marketing, for example) in exchange for a piece of merchandise sales, touring revenue and other earnings that artists had long kept for themselves. Think Live Nation. This is more and more the future of mainstream music and I think the future bodes well for the industry if it can produce more Lady Gagas. What do you think? Please feel free to email me with your comments, I love to read them, even if you think I am crazy.

The Peacock Fades Fast...

2009-11-18T12:32:00.000-08:00

I have a lot of respect for Jack Welch, but his final years at GE could have been better spent trying to rid the company of a boat anchor named NBC. GE probably had no business acquiring it to begin with but while he was at the helm, NBC was still a fine broadcasting company. Times have changed and so have things at the once proud peacock. Example; NBC News and MSNBC have gone so far left in the editorial content, it is an embarrassment now days and utterly unwatchable unless you have hate in your heart for former President Bush and the GOP. Example; Sunday Night Football has been polluted by the likes of the spiteful and petty Keith Olberman from the aforementioned MSNBC and the NBC Sports mental midget Bob Costas, who together have run the pre-game broadcast (and halftime show) into the ground. It has been beyond horrible this year and you can thank the washed up (sports programming guru) Dick Ebersol for that genius move in the booth. He has been in the job too damn long and has apparently lost his bearings. And what knucklehead thought moving Jay Leno to the 10pm slot was going to work out? Loading up his guest list for the first two weeks with the liberal tripe from it's own shell of a news division (can we really call it that?) certainly didn't help matters and booking conservative talker Rush Limbaugh once in the subsequent weeks seemed a desperate move to me. Even Jay looks uncomfortable as of late. NBC has been mired in third (or fourth/last) place for so long it would take a novel to chronicle all the programming boondoggles that have taken place in recent years and I won't be going there in this short missive. The whole NBC Universal Telemundo idea was about as bad as AOL Time Warner and look how that all worked out!

Now, we have the news that General Electric Co. and Comcast Corp have agreed on a valuation of around $30 billion for what remains of NBC Universal. Besides the real estate and the Universal movie catalog, what will Comcast actually get for it's money? Probably just the NBC name, because, sadly, there just isn't much anything left of value at the peacock network anymore. Anybody remember what happened to the once mighty ATT brand we all grew up with? I see the same scenario working out here because, to be frank, the way I see it, the "NBC brand" is all that's left as the once mighty peacock fades into the future...

Digital Shrink Wrap

2009-09-07T06:00:00.000-07:00

As CD sales continue to slide and digital music sites such as iTunes and Amazon are very slow to add new artists and independent labels, ideas, both good and bad, continue to generate talk among some of the forward thinking minds in the music industry. One such idea whose time is rapidly approaching could help completely change the music landscape and also generate much needed revenue streams for music labels, big and small. I am talking about the "digital shrink wrap" concept which, at this particular time, could easily be summed up as an iPhone app but in the future will likely expand to include all matter of portable media devices as more and more of us drop the CD/DVD and just go completely digital.

A recent perusal of submitted music apps in the iTunes App Store turns up the fact that out of 20 submissions, 6 of them are "single artist apps", basically apps written around a popular musician or group that in one degree or another showcases music videos, photos, news, photo-jumble games, concert listings, and/or community features that let fans share photos with each other. The one thing they all have in common is that they were made with iLike’s iPhone app toolkit, a relatively simple process from a service I recommended over a year ago. These artist-specific apps, which music labels currently develop in-house, place a constantly-updating tattoo on fans’ phones. It’s like having a music subscription, but in the sense of a fan club, rather than in the sense of subscribing to music in general as one would with a company like Rhapsody. If you have a Blackberry, it works like your (push) email, always updating every now and then, keeping you completely up to date on what the artist or label is promoting at any given date. Today, many of the apps are free, but I see the future as more of a monetized affair where apps cost anywhere from 1-5 dollars or even more for the hardcore fan who is willing to pay for in depth material the casual listener may not have the time for.

So things continue to percolate in the digital world of distribution and it is becoming clear to me that the real innovation right now sits with the audio heads rather than the visual geeks. That makes sense because the music industry has been dealing with a more pronounced downturn in sales for a longer period of time. I am sure things will start to even out between the two sides though, innovation does actually spur more innovation. In all complete candor, the app store broke the rules for selling music through iTunes, and the ramifications of that fact are just now beginning to be felt. Today, many other mobile platforms are emulating (or attempting to) Apple’s modular app concept whether Apple likes it or not. The app trend is truly massive and leads me think the "artist-specific app" could actually become a formidable music format in its own right, and, if that happens, the idea of buying a bundle of music won’t die with the album/CD, it will survive with the app. That should make music lovers everywhere happy...

What do you think about (music) apps for mobile devices? Is it all too much or something that will possibly change the way you digest music today or in the future? Email me with your thoughts, I always look forward to getting your comments.

Aldo's Summer Vacation

2009-07-31T13:53:00.000-07:00

I am in the middle of a much needed summer break. I will post again at some point in August or September...

What's The Deal At MTV?

2009-06-29T10:39:00.000-07:00

One of the many things that has struck me in the days since "The King Of Pop" died last week is the dearth of music videos on TV nowadays. One can hardly avoid being reminded about it with the endless roll of MJ music videos (of yesteryear) that have been seen with every mention of the untimely death. Which brings me to the recent changes at MTV... The headline story, Brian Graden leaving the network, could not have come sooner, at least for me. It is my opinion that along with Judy McGrath, he is ultimately responsible for a ratings slide that rivals that of the CBS evening news, and believe me, that is no small feat to accomplish! According to respected media research firm SNL Kagan, MTV's ad revenue has fallen from $1 billion in 2005 to a projected $846 million in 2009. It's a similar story at VH1. That channel took in a record $484 million in 2007, according to SNL Kagan, but this year is expected to generate about $400 million, an ugly 9% drop.

What in hell happened during his tenure? Well, some shows that were launched during his time at the helm include the reality hits (?) "The Hills" and "The Osbournes", "Pimp My Ride", "Jackass" and yes, even "Laguna Beach". They all have two things in common, they are all at the bottom of their genre, "Reality TV", which means they are outright horrible, and the second common thread is obvious, they are not "music programming" in any shape or form. Mr. Graden, 46, had once been the darling of MTV. Although the network had been moving away from its roots of music videos to reality programming before he came aboard, once he was there he kicked it into high gear. Jessica Simpson, Lauren Conrad, and Heidi and Spencer Pratt all became household names during Graden's reign. Ouch! His role is not going to be filled, people inside the company confirmed (and that's a good thing!). Parent company Viacom's cable networks, particularly MTV, have always been and still are the lifeblood of the company. MTV has been struggling to grow ad revenue for the last few years and, although the economy is certainly partly to blame, the problem has been exacerbated by ratings declines over the last few years.

Now, is it really surprising to anyone that MTV is struggling with the reality format they embraced years ago? You can see this god-awful genre everywhere you look on TV today and over time, it has truly devolved into a watered down formula that is very tired and spent... Oh yeah, so is paying a guy like Graden about 7 million a year to continue to run a once innovative network into a brick wall. Music videos still have a place in this world, and while it would be nice if MTV got back to it roots, looking at where they are heading post-Graden, I won't bet my ranch on it...

Hollywood On A Roll?

2009-05-26T07:27:00.000-07:00

Amid all the arguments about this new age of digital distribution and how it affects the "bottom line", I proffer one small fact that is often overlooked. Hollywood has never made more than $10 billion in domestic box office in a year before, but that may change, and sooner than you think. In fact, both January and February of this year were record-breaking months; and after a March lull, April came back roaring, with three record-crushing weekends in a row. Also this small fact; overall some 49 million more movie tickets have been sold so far this year as compared to last, according to box office tracking company Media by Numbers. As of last weekend of April, movies in North America had taken in $2.7 billion in 2009, up from $2.3 billion at the same point last year. Now I don't care how you arrive at your position, these are damn good numbers!

Indeed, a somewhat steep drop-off in DVD sales, the continued waning of superstar power, corporate culture and a strong lack of enthusiasm on Wall Street (not to mention the after effects of one strike and the threat of a second) are all having major effects on Hollywood these days. Layoffs are common and fewer movies are planned for release in 2009 than in previous years. But unlike most other industries, the movie business is still making tons of money. Box-office receipts are going bonkers. More people are spending more money to go to movies than at any time in recent memory. How in the hell is this happening and why now?

The answer most often tossed about is the age old tried and tested one; People escape to the movies during times of economic recession and depression. Remember, the greatest boom time for film was actually during the Great Depression and Brandon Gray, chief analyst for boxofficemojo.com was recently quoted as saying "If the current pace continues, you would easily have a $10 billion-plus year, maybe even close to $11 billion." Simply put, that is far more loot than the estimates we were from the execs hearing last year. Now there, that is some great news, right? Not so quick...

The sad facts are, even as the box-office dosh is currently pouring in, the film industry is struggling in a variety of ways. Let me quickly look at just one, the DVD. Are you aware that DVD sales actually dropped more than 5 percent in 2008 and are continuing to trend downward? The top-selling DVD of 2008 was "The Dark Knight," which sold nearly 11 million units -- which sounds pretty impressive until you realize the top-selling DVD of 2007 was "Pirates of the Caribbean: At World's End," which sold more than 13.5 million. (Ouch!) Overall, more than 200 million more DVDs were sold in 2007 than in 2008. Why is that?

What is really worrying to me, though, is that Wall Street investors have stopped investing in just about everything, including films. However, more crucial in the current crop of layoffs and restructurings among the major studios is that those studios are now parts of larger corporations. This is the conundrum in my opinion, As things continue to go corporate, (to survive, in fact) we won't necessarily have better movies (pink slips for the creative talent) and as the economy picks back up, while we will again see the rise of highly profitable on-demand movies through cable television and satellite, in the long run the "villain", always lurking about, will still be Internet piracy. Case in point; a recently unfinished version of "X-Men Origins: Wolverine" surfaced online, drawing some 100,000 viewers a month before Twentieth Century Fox's planned big summer blockbuster was due to be released. Not only do the studios lose the money from potential ticket sales when such films are posted, their rough-cut look may also lead to bad pre-release buzz, which again hurts ticket sales, at least to some amount.

Combine these new (digital) issues with the not-so-secret fact that many people have already bought the old favorites and classics they wanted after switching to DVD and there can be no question that the current Hollywood revenue model we have been enjoying may be short lived, even with Blu-Ray. Where, exactly will the industry be then? How independent can the (movie) industry as whole continue to be as it gets caught up in larger corporate realities? Email and let me know your thoughts, I am always thrilled to have your input...

Why I Don't Tweet

2009-04-21T06:03:00.000-07:00

First off, this missive isn't intended to belittle any of my many friends who have been after me to join the tweeting universe but, so much has been made recently of the "race" to 1 million followers on this social networking service called Twitter that I have to get a few things off my chest. The race I refer to was between CNN, the cable news "has been", and a 31-year-old actor, best known for "That 70s Show" and for marrying actress Demi Moore, 15 years his senior, indeed, we are speaking of Mr. Ashton Kutcher. The big "Twitter" news that you are hearing about on an almost daily basis has nothing to do with how much money the service pulls in (or doesn't), but rather, which celeb has discovered it lately. Last week's breathless news to go alongside the CNN/Kutcher event? The Oprah! Kutcher told talk show host Oprah Winfrey that "there are giant things you can do on this platform at 140 characters at a time." Winfrey -- who used a recent Friday's live broadcast to send out her first tweet "ASHTON IS NEXT" -- admitted she doesn't really know what Twitter is -- but spent most of her show responding to messages she received. "Now I've joined Twitter. Here's my first -- it's called a Tweet? I'm stepping into the Twitterverse!" Winfrey said. "It's too cool. I'm still not sure I really get it. I left my building today and my doorman said I hear you're Tweeting today."

Are we serious? With all due respect to the average armchair commentator, I'm sure there's something more interesting to write about in the wider world of technology. But you wouldn't get that impression after randomly scanning headlines on the tech news aggregation sites these days. That's where the usual suspects are again cluttering up the transom with their latest random brain farts about what Twitter co-founders Evan Williams and Biz Stone ought to do with their amazing little toy. YEESH! Twitter's a terrific conversational and research tool. Still, can we get a grip? I, for one, am so thoroughly bored by the mandatory wide-eyed wonder that now accompanies any news event where the story is that people actually post updates on Twitter. "Wow, they're tweeting about the earthquake;" "they're tweeting about the airplane in the East River;" "they're tweeting about the bunion on the president's left toe." The President's tele-prompter has a twitter feed for goodness sake! (Okay, maybe it's not the real deal.)

The only real news about Twitter that I have found even remotely interesting is the latest trend that has started on the social service, marketing. A new question is becoming quite prescient in many circles; Are marketers ruining the Twitter experience? Bloomberg News recently talked to several people who think so. One woman, who says she signed up for Twitter to keep in touch with friends, is now considering discontinuing her use of the microblogging service because random marketers keep contacting her. Home Depot, for example, wished her luck painting her room, a medical company recommended a device for helping her with her ear infection, and a DJ recently told her to check out his new single. "I don't want random people contacting me," she said. "Don't try to sell yourself through my Twitter." Currently, most approaches to using the site are not intrusive, but some companies are using it solely to send unsolicited marketing messages. Twitter tried to stamp out the problem earlier this month by disabling a feature that allows users to automatically follow people who follow them.

Meanwhile, the microblogging service continues to grow like a weed. According to the most recent data from comScore, visitors to Twitter.com increased to 9.31 million in March, compared to just 524,000 last year. But buyer beware here; the more Twitter grows, the more companies are interested in reaching its users and that's a trend that shows no sign of abating. And while lots of serious, smart people take a more sober view of Twitter, viewing it as one (possibly useful) technology tool among others in their daily routine, they're not close to drinking the Kool-Aid, and that's something the media forgets. You can include me in this mob.

The bottom line to all of this here is the simple fact that Twitter does not and has not made a dime in profit, full stop. I view it as yet another "look at me" tool in our modern social networking craze. I will give you this though; if founders Ev & Biz ever do figure out how to harness Twitter's financial potential, awesome! That would rate as big news, and at that point, I'll give a damn and might even write about it again. Until then, I'm leaving the daily hand-wringing hype to others.

The Future Of Music Distribution?

2009-03-10T09:02:00.000-07:00

It was over a decade ago when the major record labels began to worry about online piracy... They suddenly seem to realize that people illegally swapped music over peer-to-peer networks like Napster and later LimeWire. That wasn't the only problem at that point, either, although they were very slow to pick up on that small fact. Mostly in a panicked, knee jerk manner, their response to the piracy threat and the newer issue of sliding CD sales, music companies began to experiment with licensing their records to new online services. The original idea was that services like Imeem, Last.fm, and Pandora would let people listen to music on computers, mobile devices, and even home stereos. They in turn would collect small fees and advertising revenue that the services would potentially share with labels and artists. Music fans (they meant pirates) would be discouraged from stealing tunes, and the major labels like the Warner Music Group, Sony Music, Universal Music, and EMI—might even get a sales boost as listeners discovered new kinds of music.

Ah, and what a plan it was... the only problem is, things haven't quite worked out the way they envisioned. Many industry consultants say online music sites are being used by a growing number of listeners as a substitute for purchasing music, rather than serving as a catalyst for more purchases. Indeed, overall music sales have continued their years-long slide and in most genres, the decline has quickened. And while the money from digital download services like Apple iTunes and Amazon MP3 still grows at a strong pace, the music labels are not generating enough revenue to make up for the sharp decline in CD sales. Total industry sales were about $10 billion last year, down from $14 billion in 2000, according to the Recording Industry Association of America (RIAA). Even worse and more stressful is the fact that overall spending on music is forecast to shrink 4% through 2013, according to a recent report by Forrester Research.

What does this mean for the future of recorded music? In my humble opinion, by the year 2013 (maybe as early as 2011) it’ll make much more sense for the remaining labels to (finally) reorganize their business models around the reality created by the Internet and person to person (p2p) file sharing services. Most certainly by then, most or all artists will be under 360 music contracts (think Live Nation) that give the labels a cut of virtually every revenue stream artists can tap into - fan sites, concerts, merchandise, endorsement deals, and everything else, meaning these labels will no longer be tied to revenue limited to sales of master recordings.

So far though, precious little real money is actually changing hands. Check this out, for every 1,000 songs streamed at Lala, users pay the 99¢ download fee for only 72 of them. They pay 10¢ for only 108 out of 1,000. The remaining 820 songs are played for free. It doesn't take a math whiz to figure out that the labels need to do much more with this new business model to make it all work for everyone's benefit. Let's face it, the biggest labels still do have a lock on talent, and there’s currently no reason to believe that new artists won’t continue to strive to place themselves in to one of them. It is still a very rare day when the artist can navigate the murky waters of revenue streams and make the financially prudent decision on their own. It may still take a while for things to sort themselves out but sometime in the next decade we’ll most likely see a real renaissance in how music is distributed and consumed. Depending on the way things finally shake out, who knows, a decade after that we may have all forgiven the music labels for the way they treated us during the growing pains. (But, I doubt it...)

The Bitter Losers

2009-02-04T05:25:00.001-08:00

The Bitter Losers: Alan Rosenberg, left, Anne-Marie Johnson, Kent McCord and Diane Ladd (Getty Images photos)

Just when I thought things in Hollywood were starting to get back to "normal", whatever that is nowadays, I got some news that really made me scratch my bald head. At second glance, maybe it shouldn't, after all, this wrecking crew of four, which I have renamed The Bitter Losers, hasn't shown me anything approaching sanity during this (current) protracted SAG contract dispute. The lastest bit of drama in this long running saga finds SAG honcho Alan Rosenberg seeking to nullify an action taken by a national board majority last week that removed national executive director and chief negotiator Doug Allen from his post via written assent. Rosenberg, first vp Anne-Marie Johnson and board members Kent McCord and Diane Ladd filed the complaint before Los Angeles Superior Court Judge James Chalfant, however, the request for a temporary restraining order filed by Rosenberg and his confederates was rejected out of hand because of errors in the petition. Somehow, I don't think this will deter The Bitter Losers and as a practical matter, this now extends indefinitely the seven-month stalemate between the actors and the movie and television producers with whom SAG is negotiating a new TV/theatrical contract since Rosenberg's legal action scotches any new negotiating sessions until the internal matter of who's actually in charge is resolved.

The immediate fallout from this desperate act was to scuttle Tuesday's scheduled round of talks with the AMPTP, which SAG was planning to resume with a new negotiating task force in the place of the dissolved hardline-heavy negotiating committee under Mr. Allen. This is a disaster in the making as the economy continues to sink further and Hollywood's newest action hero, Barack Obama, is obviously "in over his head" at this time (and won't be able to "help" the economy for quite a while, if ever). I personally don't see things shaking out for our suspect money issues in the near future, in all candor, it took some time for us to get to this point and no matter who is in charge, it will take time to dig out of this financial mess. Now is certainly not the time to haggle over future (possible) profits but if Rosenberg and his allies are successful in getting a restraining order, that could have much more than a direct impact on film production. Credit markets are still extremely tight, and lenders might be even more reluctant to finance films the longer this impasse continues. The state of the economy -- and the perceived indifference to that by Allen and his negotiating team -- is one of the reasons SAG moderates wanted that team removed. Allen may have played pro football in the past but this is a delicate dance and his tactics have been more bullying than subtle, and subtlety is the trait desired for most successful negotiations. SAG has been working under an expired contract since July. There have been a few attempts to restart negotiations, including a few days of federal mediation in November, and while TV production in Hollywood remains healthy at the moment, film production has definitely slowed, for factors that go far beyond labor turmoil. The bottom line to all of this is the simple question; Even if Rosenberg's freaky faction wins an injunction that invalidates the written assent and reinstates Allen, where does that leave us? All parties are back to the impasse of 10 days ago, only with any remaining possibility of compromise thrown under a two ton bus and run over (twice).

Even worse, in my opinion, this latest SAG leadership struggle soon could wreak major havoc on the guild's commercials contract negotiations, scheduled to begin Feb. 23rd. SAG and AFTRA recently agreed to negotiate its deal with the ad industry jointly, and the two unions are scheduled to hold a joint plenary meeting Saturday to approve their contract proposal. The Bitter Losers could really screw all this up, big time... What do you think about all of this nonsense? Do you support Rosenberg's faction? Please feel free to email me back and let me have your opinions, I always love the feedback...

I Want My (Own) MTV

2009-01-05T08:09:00.000-08:00

I've got issues... actually, they are digital issues, to be specific. In this day and age when we can easily access and download music, movies, our favorite television shows and other digital delights, I still find there are almost no classic music videos to be found, anywhere... Sure, you can do the peer to peer thing (and almost always end up with junk videos) or go to the very limited selection of the iTunes store and try your luck there. Not all that long ago, weeks actually, music industry honchos had hailed deals struck with YouTube during the last year as a new way of driving profits from the popularity of professional music videos and the soundtracks to amateur efforts on such user generated content sites. YouTube, a horrific, flawed platform for any kind of viewing, in my opinion, really isn't even an option for those among us who want to own, not rent, or stream quality digital content. And now, finally, a generation after the launch of MTV, major record labels are hoping to revive the music video business online by creating a single digital destination for their artists’ output.

I have been advocating this for years now, it is simply another revenue stream to make some much needed money along side the other staple of the business, the live show. Universal Music, the industry leader, has said that it makes “tens of millions of dollars” from YouTube. I would sure like to know how! Many in the entertainment world besides me are questioning whether either side has made much money from arrangements which require YouTube to share advertising revenues and, in many cases, pay a few tenths of a cent to the music company each time a video is streamed, regardless of how much advertising is sold. However, there is trouble on the horizon for this early but odd agreement. For example, a couple of weeks back, Warner Music failed to agree a new deal with the site, saying it was not being adequately compensated and demanding that the site take down its artists’ videos and amateur content using songs from its publishing arm such as “Happy Birthday To You”. I have long thought this current version of YouTube is a weak model for monetizing a very large back catalog of old music videos and it's about time one of these majors actually took some action.

Although I am not at liberty to reveal many of the details, I see much more of this kind of backlash in the cards for Google's YouTube. I will suggest to you that Hulu, the online television and film joint venture between News Corp and NBC Universal, is aggressively pushing for more of this kind of content and they seem to be revving up discussions with several "unnamed" big music companies with initial positive responses thus far. Personally, I think the best option for this content would be a standalone venture between some or all of the four largest recorded music groups. They could either build their content distribution vehicle themselves or simply farm it out to the folks at Apple who have demonstrated their prowess in making money for the music industry. Either way, those of us who were weened on MTV's earliest music videos, and who have the disposable income required, could purchase our favorite videos, continue building our content libraries, and, at the same time, help those poor record companies still in business recoup some of the major dosh that went into making all those music videos in the first place! Anybody for Falco's Der Kommisar in HiDef? (just kidding...)

Aldo is on vacation until 2009

2008-11-06T06:04:00.000-08:00

More Idiocy From The Hollywood Crew

2008-10-06T07:40:00.000-07:00

The Hollywood community at large has some serious soul searching to do... again. It seems like we go through this issue far too often with the decidedly disastrous results for the Southern California economy as sure to follow as the fact the sun will rise in the morning. The Screen Actors Guild (SAG) negotiating committee voted a week or so ago to support a strike authorization vote, a tactic meant to break stalled contract talks with Hollywood studios. Oh yeah, that worked well last time, right?

On the other side of the coin, with the debt markets depressed and money drying up, studios like Paramount Pictures and MGM -- which for months have been looking to raise new "slate" financing -- could find themselves living on leaner movie budgets, making fewer pictures or turning to offshore sources such as India. Can anyone say Reliance ADA Group with me? It doesn't take a genius to sort out what this spells near term for my Hollywood friends and colleagues. Less movies on the slate for the year means less work for those in front (and behind and around) of the lens, plain and simple fact...

While it remains unclear how the current film financing crisis will play out at each studio, several, including 20th Century Fox, Sony Pictures, Universal Pictures and Warner Bros., have deals in place to co-finance their movies at least over the next 18 to 24 months. Walt Disney Studios, which makes fewer movies than its rivals, has a fund called Kingdom Films but relies less on outside financing, and hey, that's the Disney way, folks.

This funding problem is clearly becoming a giant issue with a current banking meltdown, and yet, Anne Marie Johnson, a spokeswoman for Membership First, (a faction of actors that had controlled SAG's national board) was recently quoted as saying "My personal opinion is, yes, we will achieve a strike authorization." Thank God these fools lost their majority in (internal SAG) elections last month. "Membership First has always been a strong advocate of having a strike authorization with us while we're negotiating," Johnson said. "That's really a wise way to negotiate." Uh, yes, it is, I guess ... if you want to loose more members in your dwindling quasi-union. With friends like these, who needs a pink slip?

Some Wall Street experts remain confident that studios will continue to be resourceful in attracting new sources of money and that there has never been a shortage of investors eager to get into business with A-list actors and filmmakers. But seriously now, that collapse of Paramount Pictures' $450-million film financing deal a couple months ago simply underscores how dramatically the global credit crunch is prompting weary investors and several industry-friendly banks to shy away from a popular form of funding that has fueled Hollywood's production growth in recent years. And like I point out, this was all months ago, before this current market and banking meltdown.

I grant that actors have been laboring under the terms of the old deal in hopes of avoiding a repeat of a 100-day writers strike that ended in February. That fine strike (which accomplished very little) shut down production of dozens of TV shows and cost the Los Angeles area economy an estimated $2.5 billion. Does anybody else remember this small fact? For their part, the Studios, represented by the Alliance of Motion Picture and Television Producers (AMPTP), said the economy is in trouble and urged actors not to strike. What comes next has (almost) regularly become a recurring nightmare for many in the industry and beyond. We get more layoffs and hardship, threatening what to many in the L.A. region has become a very comfortable, liberal way of life. We can all thank those great champions of capitalism, the (fill in the blank here) union, again. So here it is; "Thanks for protecting us" (not!). Surely, these for a strike at this time are fools running errands in the rain. What a selfish scene, redux...

Think I have been smoking hippy lettuce? Are you on the other side of this issue? Please feel free to email me with you viewpoint, I am always happy to have more input.

AOL's Death Spiral Continues

2008-09-10T09:58:00.000-07:00

Those of us who have been online since the early 90s didn't have many options in the beginning, speeds were not fast (maybe 1/100th of what we have today) and the internet browser we know today was just being developed. Early on, AOL and CompuServe were so successful in part because they provided their own browsers and way back then, many of us were not that bothered that AOL, uniquely, kept us inside of a "walled garden" of sorts. Netscape wasn't fully developed yet and hey, we were online...

Lot's of internet history has taken place since then involving this once storied company, the most major milestone, it's disastrous merger with Time Warner Inc. (TWX). Synergies were never realized and in many cases never attempted between the two operations and a once promising dream was turned into a corporate boondoggle. The most glaring example, in my opinion, was the obvious tie-up with Time Warner's early high speed broadband interest, Roadrunner which never had a chance. At that point in time, the only way AOL could have continued to grow subscribers at a respectable rate was to ditch the dial-up method in favor of broadband, which Time Warner, quite prudently, had been busy building in the years before the two companies got married.

We all know what has happened since, AOL lost massive subscribers, ad revenue and market share. Nowadays, Time Warner can't wait to dump it and it's prestige has been badly damaged if not ruined. Now, in a desperate effort to increase user loyalty and bring more visitors to AOL.com, AOL is taking a step in yet another new direction by adding outside content, including e-mail from rival providers like Yahoo and Google and updates from social sites like Facebook and MySpace. Wow, how novel, um... not.

Internet users' changing surfing habits and their reduced dependence on one-stop portals has long been a thorn in the side of the company and these days, AOL is hoping people will at least use its ad-supported site as a starting point. This latest strategy, combined with the free email account policy instituted several years back indicate to me that we are seeing some of the last tricks in their bag. Other adjustments - including a box that lets users see their friends' status updates on Facebook and a few other social sites - are set to be unveiled along with a refreshed-looking home page in October.

This week, the Time Warner unit is rolling out the first round of changes, which includes the aggregation of e-mail previews in a manner similar to the site's current AOL e-mail previews. Bill Wilson, AOL's executive vice president of programming, said the changes are designed to give consumers more choices and control over content. "If you can come to this screen and find it relevant, you'll find it valuable," he said. He made clear that this was just the beginning, commenting that a bit later in the year, the portal is expected to take on another twist, automatically adjusting content based on user preferences. Simply put, users who click more on fashion-related news stories and less on finance stories will start seeing more of the former and less of the latter.

Will any of these changes save the company or, at least, make it an attractive asset that can be sold at a decent price? Is it all too little, too late? I also used and paid 29.99/month for my own AOL account many moons ago and can remember when many of my friends who were online had the email address which ended with aol.com, and while those days will never come again for this company, it would be in Time Warner's interest to refocus management on one purpose; innovation. This technological landscape changes far too quickly today, and, even at this late date, AOL still needs to lead and not follow. These latest moves strike me as completely reactive, what do you think? Please feel free to email me with your comments, I always enjoy reading them.

Why I Like iLike

2008-07-22T06:59:00.000-07:00

Being a former recording artist does, on occasion, have it's perks. I still have many finished and yes, unfinished compositions lying around (on my computer's hard disc) doing virtually nothing. Several years back, I decided to give up on making serious money in the music industry, I realized I was never going to "make it" big enough to survive the digital transition that was just starting to take hold and I could see the writing on the wall. So what to do with all of these musical efforts that would never see their way to 12" vinyl or worse, the tired CD compilation? My own answer was to use several of them as test cases for the burgeoning social music sites that were starting to pop up all over the web (and to integrate the real life knowledge into my then nascent consulting career).

Over these past couple of years, I have experimented, rather extensively, with several social music sites including Last.fm, MP3.com, MySpace and several others and while they all have their own merits, one, in particular, is starting to stand out from the others. I thought I should share some of the reasons with you as the different services seem to be taking divergent paths.

iLike, the music service with a truly massive following on Facebook and increasing popularity elsewhere, has introduced full-song playback on its flagship site, iLike.com. Through its partnership with music subscription service Rhapsody, the site will be offering over 5 million songs from all of the major labels and a variety of indie artists, too.

Unfortunately for schlubs like me, the full-song playback will be partially restricted for users that aren't Rhapsody subscribers. The company still is, after all, attempting to do business. We non-subscribers will only be able to listen to a maximum of 25 songs per month, while Rhapsody users under the service's $12.99 monthly plan will be able to listen to an unlimited number of songs. iLike competitor Last.fm began offering less restrictive playback options in January, but has had issues with keeping its content-providers satisfied (a very short sited Warner Music Group pulled out of the deal in June).

In conjunction with the launch of full song playback, the site is also launching a new self-serve ad platform for concert promoters, something long needed. This new ad-platform, which launches this week, is designed to give concert promoters a way to create feature-rich ads without much effort or technical know-how. These new ads will be distributed across iLike's network (namely their website and social network applications), and will display content depending on a user's geographical location. On social networks, the ads will also include very user friendly elements like "invite your friends" and "see who's going". In my opinion, these are (finally) the new kind of ads that users of these social sites will actually click on and I say bravo.

iLike has also announced plans for a new developer platform that will be launching in the near future, probably in the next few weeks (according to the scuttlebutt I hear on the street). Even though iLike has offered widgets for syndication in the past, the new platform will allow developers to customize their own web applications. And while I still adore Last.fm and find it's business model quite forward thinking, iLike is my current favorite. Have you tried any of these online music services yourself? Email me and let me know what your current preference is and why, I would be very interested in what you have to say...

Show Me The Money!

2008-06-24T06:39:00.000-07:00

Twitter, one of Silicon Valley’s most talked-about companies these days, is in a very familiar situation. The “micro-blogging” service, whose users post messages no more than 40 characters long, has yet to find a way to make money, but its early adoption by a group of enthusiastic users is seen as a sign that it will eventually be successful. If you feel you have heard all this before, it's because you have, and not that long ago, (can we all say "tech bubble" together?).

The absolute dearth of revenue among social networks, blogs and other “social media” has persisted despite more than four years of intense and sometimes numbing experimentation all aimed at turning such sites into money-makers. Social media, one of the bedrocks of Web 2.0, encompasses sites that put user-generated content and communications at their core, think MySpace and Facebook if you haven't caught on yet.

Together with the US economic downturn and a shortage of initial public offerings, the monetary failure of Web 2.0 thus far has damped the mood in internet start-up circles. However, in one hopeful sign of the continued hopes for start-ups that have yet to alight on a solid business model, several major VC (venture capital) financiers expressed support for the private fundraising being undertaken by Twitter, the aforementioned company. Trouble, always right around the corner, is starting to rear it's ugly head in Silicon Valley and there is, at this time, much disagreement and discussion on exactly where we are headed in terms of long term funding, uncharted waters as it were. Roger Lee, a Battery Ventures partner, was quoted recently as saying "There is going to be a lot of shake out here in the next year or two" as many of these Web 2.0 companies go under and disappear.

Personally speaking here, the coming shake out can't come quick enough for tech sector. When recent venture capital deals include fundings that have put valuations of about $500m each on Slide, a maker of “widgets”, small applications that are carried on social networks, and Ning, a social networking platform founded by (Netscape founder) Marc Andreessen, many things are starting to remind me of the May/June 2000 meltdown of the tech sector and all the waisted money and effort that went with it. Today, I remind my clients that we still have not recovered fully from that debacle and I often counsel listening to more people like Mitchell Kertzman, a partner at Silicon Valley venture capital firm Hummer Winblad. He puts it all in perspective for me by simply stating the obvious, “If you look at some of the valuations, you wonder what fantasy of revenues they’re based on.” A nice diplomatic way of saying, show me the money already!

Have you been thinking something different while reading my opinion? Think I am smoking the "hippy lettuce"? Feel free to email me with your thoughts and let me know.

Checking Back In With Hulu...

2008-05-27T05:01:00.000-07:00

When I first wrote about NBCU/FOX teaming up on a online video service, this researcher, like many others in the know, was skeptical at best. And while Hulu's figures do remain a far cry from those of YouTube, where users watched more than 4 billion videos in April, Hulu has, impressively, attracted some heavy hitters in the advertising world including the likes of the McDonald's Corp, Bank of America Corp, and Blackberry-maker Research In Motion Ltd. All of the aforementioned have contracts for commercials on Hulu. In addition, technology-savvy users and blogs alike give Hulu.com high marks for its cleanly designed site and trove of full-length shows and its viewers spend about 90 minutes per month watching.

The hard numbers are a bit more encouraging and prove Hulu may very well be on the right track after-all, despite the critics and nay-sayers. According to Nielsen, users watched 63.2 million videos on Hulu and its partners' sites and its viewers spent on average viewing 129.3 minutes per month, beating nearest rival Walt Disney Co's ABC.com, where users watched 60.8 million videos and spent an average of 57.3 minutes, all last month in April. Most importantly though, in my opinion, Hulu's launch has also inspired a much needed and long sought debate on the value of homemade videos and videos made outside of established television studios. These are the video clips hosted internationally on France's Dailymotion and domestically here in the USA via YouTube, and compared side by side with the professional shows hosted on Hulu and other network-owned sites, they have been exposed as, well, amateurish. Shock of all shocks, imagine that!

And while they have quite a ways to go, (try finding Hulu videos yourself on AOL.com, for example), the powers that be at Hulu are thinking global already, which is the only thing to do in a world of global broadband. Head honcho Jason Kilar recently stated "I personally would be very disappointed if we don't bring Hulu out in the next several years to countries around the globe". That sounds to me like the rumors of international expansion (reported on several tech blogs in April 2008 after one Web head in Switzerland reported seeing a default page that said Hulu was working on international availability), might well become more fact than fiction in the near future. Check out Hulu.com for yourself and email me with your thoughts, I'd be interested to know what you think!

The Future Of The (Music) CD?

2008-04-27T11:30:00.000-07:00

Don't look now but the new digital landscape we have become more and more reliant on in our daily lives has come full circle in the music industry, at least in historical terms. Not that long ago, users of a one-time obscure computer program called Napster led the charge and help change the way music is distributed, at least in these United States. Illegal to a point, yes, but it still forced rapid change in the industry. Don't get me wrong here, U.S. consumers still buy more CDs than digital downloads, but the gulf is narrowing rapidly. Only five years after launching its iTunes digital store, Apple has dominated the fast-growing download market so completely that it jumped ahead of individual CD sellers such as Wal-Mart, Best Buy and Target. Oh yes, that computer company many, indeed most people wrote off not that far back in memory, Apple Inc. has surpassed Wal-Mart to become America's No. 1 music store, the first time that a seller of digital downloads has ever beaten the big CD retailers, period.

This really is quite big news and it caught the eye of United States Congress and even the legislature of my fine State of California. In a very predictable move, no sooner had the ink dried on the news of Apple's coup in music sales, the politicians who all spend quicker that they could ever take in, jumped on the opportunity to stifle the booming online success of pioneers such as Amazon and Apple by offering to slap a nice tax on every tune or book we want to buy. Alas that's another column entirely, and I digress...

"If you look at what is happening to the CD and the growth of the digital side, it's a pattern that is going to hold," NPD Group analyst Russ Crupnick said while predicting that Apple's music industry power would only continue. Apple indeed sold more albums in January and February than any other U.S. retailer, the NPD Group said Thursday, underscoring how the music industry is on the front edge of a digital media shift that is upending businesses as diverse as bookstores and video game makers.

NPD Group, a market research firm based in Port Washington, N.Y., said it counted every 12 singles sold as one album, and that Apple probably received a boost during the two months by people cashing in iTunes gift cards -- which Wal-Mart and other retailers also sell -- received during the holiday season.

No matter how they arrive at the current numbers, these are heady times in the music industry and I only wish more of these so-called music moguls (or whatever they are) at the top would embrace digital downloads as simply a single source of revenue along with the other, more established ones. They still seem to be fighting it, and believe you me, it's a losing battle. The CD should be relegated to yet another sales item you get at live concerts or music festivals such as Coachella, which did great business this past weekend in the blistering heat of the SoCal desert. You could find CDs right next to the t-shirts and other goodies (as is happening more and more often). The music industry needs to get back to what it used to be about long ago, the live show. America is so big, touring actually makes sound financial sense with every sized market available and endless promotion through college music radio to boot! The bottom line; this strategy would involve a lot of talent and a lot of work, and both seem to be in short supply these days which is why it's easier to fight the change, or at the least, slow it down... Long term though folks, forget about the compact disc, damn thing's a relic.

Anyone For Mobile TV (On Your Cellphone)?

2008-03-10T06:21:00.000-07:00

Let me put forth a question; When was the last time you watched TV on your cellphone? Recently, on Feb. 28, Sprint Nextel introduced a $100 all-inclusive monthly plan with unlimited calling and mobile Internet services—including Sprint TV, which costs $15 to $20 extra with other calling plans. This summer, it plans to roll out premium packages, offering extra content for sports and movie fans. If you haven't yet caught the fever, not to worry, you are far from alone...

As recently as last year, a survey of 1,004 users by In-Stat found that while many people were interested in viewing mobile video, 80% of the respondents said they wouldn't pay $15 a month for it and that's not the total downside at all. In my opinion, there is another major problem with all of this: there's almost no evidence that anyone wants mobile TV. In fact, some new studies I have come across lately suggests just the opposite. People "on the go" just aren't that interested in watching live TV, full stop, period, end of story. Another sad factoid, among the small percentage of cell-phone subscribers who do watch video on their phones, the vast majority opt for the occasional $2 download over monthly subscriptions, according to IDC (International Data Corp).

But many (I suspect most) experts believe that, to take off, mobile video will have to be ad-supported and possibly free, much like it is on the Internet. My shining example, MobiTV has revved up its ad sales efforts and now derives about 10% of its revenue from advertising, says Paul Scanlan, it's president and co-founder. Check this one out though; MobiTV Inc., which provides TV services on Sprint Nextel Corp. cell phones, is trying to shut down a Web forum that is carrying instructions on how to get access to its channels for free. MobiTV recently sent a nasty letter to Howardforums.com, asking the site to take down links that provide MobiTV streams from Fox News, MSNBC, Animal Planet and other networks when entered in the Web browsers of certain phones. After Howardforums refused to comply, MobiTV sent yet another letter last Thursday to the site's Web host, Atlanta-based Global Net Access LLC, asking that it shut down Howardforums. Yeah folks, hmm, that will work great, won't it? Let's totally upset and criminalize the few pioneers that are actually watching the damn thing! How numbingly backasswards is that? Seriously now, when will these fools at MobiTV get a clue, if ever? Based on my past experience, don't hold your breath...

The bottom line here is that broadcast video remains something that people watch when they have the time. It doesn't "fit in" with what people are doing when they're on the go. There are, quite clearly, a few niche exceptions, but it's not at all clear a few niches are worth nearly a billion dollars to build such a network while hoping that an audience exists. This is the conundrum for the majority of this new media today, how does broadcast video truly fit in with today's ultra busy lifestyles and how can today's media titans discreetly monetize it successfully. This point kind of ties in neatly with last month's musings on the writer's strike, doesn't it? Everybody is still trying to divide up the pie before it has been properly cooked. What do you think? You can email me and share your thoughts. I might even (stop fidgeting with the videos on my iPod and) have the time to get back to you...

The Writer's Strike: Upfronts, Pilots And Lost Plots

2008-02-11T05:14:00.000-08:00

Ah, yes, what else are unions good at besides the good old fashioned strike! Looking at the deal they are going to be voting on soon, this strike has enabled them to gain more... well, actually, next to nothing. But, to all concerned, there is some good news to be found here. This strike may well end up changing some of the mechanics of the overall process including the creation of pilots and how a TV show is marketed to advertisers. During the upfronts week each May, the networks sell the bulk of their advertising airtime for the upcoming TV season. Last year, advertisers committed more than $16bn (yes, billion) to airtime on terrestrial networks and cable channels. These events have gotten costlier as each season has passed adding to the bottom line of the networks and their parent companies. Even before the strike, many Hollywood studios and the US broadcasters were already looking at ways of streamlining this costly annual cycle of developing and piloting dozens of scripted comedy and drama pilots as the growth of digital media eats into the traditional network TV advertising model. In my opinion, not soon enough and I am not alone at that table.

With the dispute estimated to have cost Hollywood studios $500m, Peter Chernin, the chief operating officer of the Fox TV network and Hollywood studio owner News Corporation, recently said he was looking to cut costs in production. "We were moving toward probably making fewer pilots and trying to get some waste out of the system before the strike," Chernin told journalists at News Corp's presentation of its financial results last week. "We will continue to look at that." But don't get to excited about your bottom line yet Mr. Murdoch. "You're not going to see Fox abandon the upfront," Chernin said. "We believe the upfront is a valuable platform to interact with our advertisers and from a marketer point of view, it's a good opportunity for them to plan their spending in advance for the year. We think it's a valuable part of the process for both sides." Maybe it is valuable, but so are many other aspects of the business model, such as good story lines and plots that make sense to the viewer. Has anyone at Chernin's level ever paused to ask themselves, 'hey, why not make pilots for our movies too'! Of course not as it would be financial suicide, next(!)...

Mr. Chernin's comments come just weeks after the NBC Universal chief executive, Jeff Zucker, vowed to cut back on extravagant pilots for new series, saving around $50m a year. Zucker estimated that the cost of a pilot had risen from $3m to $7m in three years and in no way guaranteed the show's eventual success. Nice work, big fella! Last month, Zucker hinted that NBC's upfront, where the network presents its autumn schedule, to advertisers, would be axed as part of an efficiency drive. Terrestrial TV network rivals ABC, CBS and the CW and cable channels have yet to comment on their own upfronts. I have been advocating for some time that Hollywood should take a closer look to what is happening across the pond at EMI as private capital takes over. Many of the excesses known to the Music industry (and by default TV and Film) are being examined and several cases, done away with in "efficiency drives", yes, including the (US$)400,000 per year in flowers at EMI headquarters. And this is just the tip of the proverbial iceberg!

During the writers' strike, the studios have terminated scores of development deals, which usually cost between $500,000 and $2m a year per writer. Who actually won what during this round of the Hollywood greed-fest? Maybe nobody really knows at the present time, but clearly, very deep changes are afoot and the vast differences in the strategies deployed by FOX and NBC illustrate this point clearly. What do you think? Email me and let me know...

Who's To Blame For Slow Sales Of Music?

2008-01-11T11:31:00.000-08:00

As many of you know, I am a long time San Diego Chargers fan (having come from the area, originally) and there has been, understandably, a bit of build up and hype surrounding the current playoffs and all things related. The local sports radio affiliate, XX Sports 1090's morning team of Scott and BR started a promo called "Charger Idol" in which fans were invited to create and submit songs related to and about the 2007/08 Chargers. The submissions started rolling on Wednesday morning and ended on Thursday at 12 noon, roughly 54 hours of contest time. I was listening to the show this morning via Internet and while I will not judge the quality of the content, the amount of content submitted, songs in many styles was indeed, staggering. Which brings me to a sad point I have begun to realize over the past decade.

The dirty secrets well known for a while inside the media world are starting to seep outside the industry. Total album sales plunged 15 percent in 2007, and retailers waited until October for the year's top release, California tenor Josh Groban's holiday-themed "Noel," (which sold 3.7 million copies) according to sales data issued shortly after the new year began by industry tracker Nielsen SoundScan. This was one of many mainstream Reuters stories I have been deluged with via my Nokia E90 while recreating on the slopes of Mammoth Lakes since before Christmas.

Overall music sales -- including albums, singles, and digital tracks -- rose 14 percent to 1.4 billion units, also down from a 19 percent rise in 2006. The main driver of growth was a 45 percent jump in digital track sales to 844.2 million units and even then, the pace slackened from 65 percent in 2006.

As an indicator of how far the business has fallen, Mariah Carey topped the 2005 list, selling almost 5 million units of "The Emancipation of Mimi." The top album of 2004, R&B singer Usher's "Confessions," sold nearly 8 million copies that year. Anybody remember those days?

This past year, Universal Music Group, a unit of France's Vivendi Universal SA, was the top distributor with 31.9 percent of total album sales, up from 31.6 percent in 2006. Sony BMG Music Entertainment, a joint venture between Sony Corp and Bertelsmann AG, was second in market share with 25 percent, down from 27.4 percent in 2006. Warner Music Group Corp was No. 3 with 20.3 percent of the market, up from 2006 when it had 18.1 percent.

What ties all of this together you ask? Well, I have been observing a trend that I started noticing way back when I was flying all over the world playing 12' vinyl records at various events and parties. There has been more and more (music) recording taking places in less conventional "recording studios". This is obviously due to the proliferation of cheaper and cheaper computing power and cheaper yet more complex music software. Placed in the wrong hands, this combo can be deadly, to your ears.... The quality of music in all genres, other than say, Country and Heavy Metal, has fallen quite drastically in the past decade and while the "Gang Of Four" (Major music companies) all insist that it has been due to piracy and the difficult transformation to the digital age thus far, a reasoned long term look turns up other primary issues such as the absolute lack of talent on both sides of the aisle. All of this readily available technology has spawned so many horrible bedroom wanna-bees, the "Gang Of Four" have recently taken to actually signing a percentage of them, adding to the clutter in the vastly changing, (and shrinking) music marketplace.

Meanwhile, there were well over 100 submissions in the Charger Idol contest, which incidentally, sends the winner(s), expenses paid, to the weekend playoff game versus the Colts in Indianapolis, and while a winner was eventually picked, what struck me was the sheer volume of material submitted. It's obvious to me that what I was experiencing shopping for vinyl way back when, is the same type of phenomena I just listened to on this radio show. I would buy a couple records for every 50 or so I listened to (and who, by the way, made this other junk I just subjected myself to?) How does this affect a record companies' bottom line no matter how big or how small the label might be? It has to be ugly...

These big music companies today face the same damn issue they have been facing down for many years, they just don't ever look inward! Honchos at the top need to go back into the hiring business and get themselves better A&R staffs because the mediocrity of today's bedroom studios and the music that comes from them is killing the sales figures far more than piracy. My friends from overseas who travel here on business claim they simply can't listen to FM radio in the States it is so foul. Cheap computers, amazing music software for next to nothing, DRM, and lazy, inept A&R staffs at the corporate level, a recipe for financial failure... My advice to the "Gang Of Four"; do yourself a favor, take a minute to look in the mirror and stop blaming piracy and the iPod.

Aldo Is On Vacation Until Next Year...

2007-11-02T06:07:00.000-07:00

Why I Like Mike (Eisner)

2007-10-08T13:44:00.000-07:00

When Michael Eisner was unceremoniously dumped from Disney a couple of years back, I, for one, never expected him to pop open his massive "golden parachute" and disappear into oblivion. Even as he was being ushered out the door by his hand picked successor, one Robert A. Iger, he was still making moves to try to stay in the picture somehow. Fate intervened however, he was gone and many books have been written about it with several proving pretty good reads, my favorite being DisneyWar by James B Stewart. But I digress...

The timing of Eisner's departure from the Magic Kingdom coincided neatly with the rise of what is currently referred to as Web2.0. In layman's language; the Internet, with the much faster pipelines such as Cable/DSL/Sat Broadband, was starting to vastly multiply with video and audio, with download speeds the media world had never contemplated before. This brought not only piracy (Napster, Kazzaa, iSwipe, etc.), but also the promise of more creative content with out the corporate controls that many of us "creative types" chaffed at.

Enter stage right, Eisner's newest creation, "Prom Queen" which has drawn much media industry interest by making a case for how entertainment tailored to the Internet can be extended to cell phones and other media outlets. Now it will take a step further, with overseas deals to develop it into programming for everything from television to DVDs. "It is one of the first few ventures to take dramatic programming created for the Web and revamp it for television and other audiences", Eisner recently said, and you know what? This time he's dead on...

Eisner's new media studio Vuguru will produce and distribute the localized versions with Japan's Rights Entertainment, including manga and anime formats, and France's Cyber Groupe in deals built with former Disney executives. Vuguru is part of Eisner's investment firm, The Tornante Company, which also holds ownership stakes in media start-ups Veoh Networks and Team Baby Entertainment. Cyber Groupe was set up by former Disney executives Pierre Sissmann and Dominique Bourse. The series will be ready for overseas audiences in 2008.

The original "Prom Queen" was produced in conjunction with Big Fantastic and viewed by nearly 15 million people since its debut in April 2007. In my world, this is the deal of the future. The Internet holds vast new opportunities for not only the corporate types (if they are willing to embrace it) but for the content creators as well. No longer held back by the constraints of a limited, albeit expanding, number of TV channels, producers can more often now, turn to these new distribution methods to get the viewers needed to make financial sense. And that makes good sense to the folks on Madison Avenue.

ABC: Better Late Than Never

2007-09-21T14:42:00.000-07:00

Rumors abound in this great media town and the most current one that abounds is that a certain ABC TV Network is in talks with several Web sites as it tries to create a broad digital distribution platform for its programming, becoming the latest network to signal a reversal in its online strategy. Like other networks, ABC initially took a go-it-alone stance, but is now looking to partner with Internet players they don’t own or operate in an effort to maximize and monetize their programming online. Privately, network officials have finally been forced (by reality) to concede that their previous plans simply didn't generate the online revenue they believe reflects the full value of their content. In addition, the recent partnerships are intended to drive more viewers online, thereby generating more ad revenue.

Said ABC is (supposedly) talking to AOL, Comcast, MSN, MySpace and Yahoo about new distribution agreements my sources tell me, however, network officials I spoke to declined to identify any of the parties. One big wig, Albert Cheng, executive VP, digital media for Disney-ABC Television Group, would only say one deal will be announced this fall. Cheers for that one, fella!

Interestingly enough, the four networks are taking completely different approaches to achieve similar results. NBC will start offering limited free downloads of shows such as "Heroes" and "The Office" as part of its bid to expand the digital distribution of its programs and compete with Apple Inc.'s iTunes Store, the network announced Wednesday. I say, good luck on that idea, the iTunes store is about much more than just hawking TV shows, but that is another column, entirely.

NBC's new service, dubbed "NBC Direct," will allow users to download episodes to computers running Microsoft Windows software for up to a week after the show has aired on television. The file will contain embedded advertising that cannot be skipped. Seven days after the episode's TV debut, the digital file will expire. The network is also experimenting with a variety of business models and technology to give viewers more options for watching shows, something made vastly more important since NBC Universal, a unit of General Electric Co., said it would no longer sell TV episodes on iTunes because it wants the ability to sell its shows at a variety of prices instead of the $1.99 standard enforced by Apple.

Vivi Zigler, executive vice president of NBC Digital Entertainment recently proclaimed "With the creation of this new service, we are acknowledging that now, more than ever, viewers want to be in control of how, when and where they consumer their favorite entertainment." Gee lady, ya think? Other TV content that will be available at launch include "Life,""Bionic Woman,""30 Rock,""Friday Night Lights,""Late Night with Conan O'Brien" and "The Tonight Show with Jay Leno." It is becoming clear to me that ABC threw in the towel, albeit belatedly, realizing it's better to be way late than a complete no-show. Bring on the content, that's good news for all of us....

Here Comes Hulu

2007-08-30T10:49:00.000-07:00

The newest of the wannabe "YouTube Killers" has arrived and it's name is HULU.
"Why Hulu?" writes the venture's CEO Jason Kilar on the site. "Objectively, Hulu is short, easy to spell, easy to pronounce, and rhymes with itself. Subjectively, Hulu strikes us as an inherently fun name, one that captures the spirit of the service we're building." Well, while lamer names and even lamer explanations have been batted around since before the late 90's Tech bubble, this explanation (of the name) is still pretty bad. But hey, whose counting, right?

News Corp. and NBCU have certainly been very hush hush about the video destination's moniker since the announcement of the venture came earler, in March of this year. Hulu - which many others beside this author have said looks to be a "YouTube killer" since it will offer full episodes of network and cable hits, plus movies, as opposed to a heavy emphasis on user-generated low-quality videos - recently received a financial infusion via a reported $100 million investment by private equity firm Providence Equity Partners which gave that group a 10% stake.

The 100 million for 10% isn't what catches my attention but the possibility that Major Media will finally stream full episodes of hit series such as "The Simpsons" and "My Name is Earl" certainly does. Something in the background here also tells me that the quality of the actual stream will help differentiate this new venture of Fox/NBC/Universal from it's longtime online nemesis, the ubiquitous YouTube.

As of this posting, visitors to Hulu.com can now sign up to receive an invitation to use the site once the content actually is available for viewing and the site - which will be free and ad-supported -- will go live in October. Check it out, this may be something worth watching, then again, maybe not, time will tell.

Low Hanging Fruit?

2007-07-27T07:35:00.000-07:00

As the stock analysts were all watching to see how he does it, (but not paying close enough attention to grasp it), Steve Jobs pulled yet another rabbit from his hat. While most investors were obsessed with iPhone sales--Apple reported it sold 270,000 of the all-in-one gadgets during the final two days of its latest quarter--the most telling figures Apple reported were its gross margins. Apple managed to wring out 36.9 cents of profit for every dollar in sales, up from 30.32 cents during the same period last year. This is directly due to very strong demand for their computers, laptops in particular.

The company sold a record 1.76 million Macintosh computers during the quarter, up 33 percent from the year-ago period, far out pacing the industry's growth rate. Mac sales and services accounted for more than 60 percent of the quarter's revenue, the company said. By contrast, Dell managed just 18.28% gross margins, and HP, 24.67%, in their latest quarters. Perhaps that explains why, on a day when the market loses 350 points, Apple gained over 7 points, up at one point over 10 points on the day. My prediction is that the move to the Intel chip set will continue to pay rich rewards for a while longer, look for Apple to go north of 150 by Christmas...

My Musings On FM Radio In America

2007-07-26T09:29:00.000-07:00

Something strange is happening in the New York City radio market, I should clarify, the terrestrial radio market, specifically on the FM side of the dial. Management at WCBS-FM, at long last, finally caved in and did the right thing, abruptly dumping the horrible JACK-FM format, one of the worst formats ever dreamed up in the short history of FM radio in my opinion. It was a hodge-podge mismatch of music that never really caught on in NYC, thankfully, but is still heard in several major markets including Los Angeles. What to replace it with? In the WCBS case, the programmers have gone back to where they were before the JACK format blunder, kind of...

While long remaining the last "Oldies" outlet in the greater NYC market before the switch, WCBS had always played an updated version of the "Oldies" format, including certain musical selections from the late 70s and indeed even the 80s. With the recent change back from JACK to OLDIES, programmers have foolishly decided to add even more 80s at the expense of the classics that are truly the foundations of modern Rock n' Roll. They have even included the 80s theme in their marketing strategies, in effect, watering down the brand even more. Perhaps I have been spoiled living in Southern California where we have a real oldies station, K-EARTH 101 and another station, Alernative Rock outlet KROQ, which will still on occasion have "Flashback" weekends which devotes the airtime to an all 80s format, which incidentally, is the format that put the station on the map, years ago. At this point, in truth, the only real OLDIES show in NYC now is a 4 hour slot on Saturday night on mega-talker WABC-AM and I'll wager their ratings won't even dip a bit.

Hopefully, soon, more programmers in NYC and other major markets will belatedly figure out they can actually program two stations instead of one. It seems beyond pathetic to me that with all the over saturation of TOP 40 in many markets, the powers that be can't seem to find not one, but two very low rated stations to do format changes with. Leave the 50's and 60's in the oldie category as they always have been, obvious changes in the audio and creative processes alone dictate that. But please, let's find another home for the 70s and 80s, after all, the music deserves it and there is more than enough room on the dial for two "Oldies" formats. If you really want to prevent a XM/Surius merger and beat Satellite radio at their own game (narrow-casting vs. broadcasting), do something really simple; stop the herd-like mentality! Do what management had to do in the early days of FM, get creative and take some programming and format chances again...

Oh Dear, CD Sales Drop, Again...

2007-07-09T08:03:00.001-07:00

According to data from our good friends at Nielsen SoundScan, U.S. sales of digital music albums grew by 60 percent in the first six months of 2007 but failed to offset the rapid sales decline of compact discs, what a shocker! Neilsen reports that total sales of albums were down by 15 percent for both digital and CDs, with CDs alone falling 19.3 percent to 205.7 million units. Meanwhile, digital album sales jumped about 60 percent to 23.5 million units. Now it doesn't take a rocket scientist to figure out that, yes, Houston, we have a problem....

The big news here is that while the recorded music industry is struggling in the early stages of a transition to digital formats, such as MP3, from the dominant CD format, the actual CD sales are declining faster than industry executives and analysts have expected. Digital music sales are currently dominated by Apple Inc.'s iTunes music site, which by some estimates has more than 70 percent of the market, making them a powerful "gatekeeper" of sorts. Gee, anyone wonder about Universal's (UMG) attempt to renegotiate their deal with Apple at this very minute?

Here is how the overall sales numbers currently break down; Universal Music Group, owned by French media giant Vivendi, had the biggest share -- about 27 percent -- of digital sales, and nearly 31.6 percent of the total market share. That makes some sense as they are the largest music company in the world, yawn. Warner Music Group Corp., the fourth largest music company globally, had the second largest share of U.S. digital album sales with 23 percent. Warner had 20 percent share of music sales overall, placing it third after Sony BMG Entertainment, at 25.2 percent, still well ahead of EMI Group Plc at 10.3 percent.

When the biggest selling albums in the first half of the year were Daughtry's self-titled work with 1.7 million units, Norah Jones' "Not Too Late" at 1.4 million units and Akon's "Konvicted" at 1.3 million, it is my opinion that the problem continues to lie with content and not distribution. I mean this is the absolute worst dearth of talent I have seen in decades, in short, the music just sucks, period! This has less than nothing to do with (lack of) DRM, ballooning marketing costs, or any of the other common red herrings thrown up by the honchos in the boardroom. I have a suggestion though, maybe the A&R staff at these music companies should start working on commission because their current crop of artists is horrible and isn't working for anybody, including the end user... you. It's hard to argue with the numbers, ain't it a bitch.

iPhone buzz/hype for real?

2007-06-29T10:44:00.001-07:00

Folks, all this buzz is for real because Apple has consistently designed better products and Steve Jobs & Co have a marketing strategy that has been pretty top notch over these past years. I own a Nokia 9300 which I am sticking with at the moment because I love it and it does everything I need at this time with my current carrier, AT&T, as they still need to (and are) building out their 3G network. I have, over the years owned several Macs at a time, some in my recording studio (doing hard work) so I trust the brand because these machines give me no trouble, EVER! Will I own the iPhone, absolutely without a doubt! Am I standing in line right now? NOT! There are many improvements which will take place with the next model, I suspect very much on purpose. That is the Apple way, bring out a groundbreaking gadget or operating system, then improve on it (i.e. iPod and OS X). I won't even expound on some of these content deals the team at Apple have pulled together for their various platforms, I will leave it at two though, it's iTunes store and YouTube. Apple has proven their tech/design/marketing savvy time and time again, have you ever looked at the stock chart over the past five years in relation to their product lines and then matched the subsequent stock movement? When you get a chance, check it out, do the research and you will see exactly what I am talking about for yourself. Aldo's bottom line: BELIEVE THE HYPE!

Aldo, Say It Ain't So!

2007-06-07T06:27:00.000-07:00

Gee whiz, why can't all of my picks and predictions play out like this one (see Jan 15, 2007 in my archives)! This little nugget came across my desk a couple of days back courtesy of The Hollywood Reporter and I couldn't resist sharing...

Beckham series becoming special
By Nellie Andreeva and Kimberly Nordyke

June 5, 2007
NBC is expected to turn Victoria Beckham's upcoming reality series into a prime time special, sources said. If a success, the special could lead to more specials or a series.

The network announced the six-episode series, centering on the former Spice Girl's move to Los Angeles with her family, in February.

Sources said NBC cameras were following Beckham, aka Posh Spice, as recently as Sunday. However, there has been a lot of speculation in the British media about problems on the show that arose once her husband, soccer star David Beckham, was recalled to play with the English national team late last month. The Beckhams had been in a process of relocating to Los Angeles, where David Beckham is set to play with Major League Soccer's Los Angeles Galaxy after his contract with Real Madrid expires June 30.

NBC declined comment Monday.

Anybody For TV a la Carte?

2007-06-05T07:47:00.000-07:00

A little over one-half of consumers surveyed by Forrester Research in 2006 support a la carte pricing of cable programming but have unrealistic expectations of what it would cost for the privilege of picking only the channels they want to watch. The research was conducted in 2006, questioning 5,000 consumers about their attitudes on a la carte, which channels they’d most likely pick and the desired price points for those channels.

Respondents indicated that they’d pick a package of 26 channels for which they’d like to pay $24 per month. That’s about 53% of what they currently pay for only one-quarter of the channels in a typical expanded-basic package. And it computes to about 10 cents per viewing hour per week -- economics that would not financially support program development or delivery, according to the report. Cable viewers currently spend about 22 cents per viewing hour, according to Forrester.

Forrester analyst James McQuivey noted that Federal Communications Commission chairman Kevin Martin spoke of his support for a la carte at last month’s Cable Show ’07 convention in Las Vegas. By the way, next year's convention is in New Orleans, and, er, um, I might be missing that one (for sure).

FCC boss Martin has stated that a la carte pricing would help parents to edit violent content out of their homes and would save consumers money. But McQuivey said the survey results don’t support that claim and I agree in total. Viewers who identified their households as heavy watchers of Disney Channel and Nickelodeon, family-friendly fare, were also shown to be heavy users of channels with adult content such as Spike TV or Comedy Central, the analyst said.

“Even if they were offered a la carte, they’d choose channels cited as problems. So using violence as a pretext [for a la carte pricing] doesn’t hold water,” he added. Consumers weren’t asked why they’d like a la carte, such as the desire for control or specific price savings. Left to their own devices, consumer responses on pricing “were all over the map,” the analyst said. “Without a lot of consumer education, we won’t see the benefits the FCC is describing,” McQuivey said. Consumers are “not prepared to understand why a la carte may or may not be good for them.”

This current FCC viewpoint sounds to me like more big government hogwash. Why not devise a plan, complete with tier pricing for select packages and let the consumer truly determine if the pricing is high or low by either keeping their current plan or switching to a la carte. For many TV viewers, including myself, violence is not the issue here but quality programming surely is!

A Quick Thought

2007-05-15T09:56:00.000-07:00

*As I am still officially "on vacation", a quick note is all the time I can afford to give this blog at the moment*

It is truly unfortunate for consumers that the TV and Movie industries are not under the same financial pressure that the Music companies are today. They (Music) are slowly discovering that while DRM doesn't work, better content still does. I am loathe to admit it, but until the media companies (TV and Film) become desperate, some type of this pathetic and cumbersome attempt to "safeguard" digital property (DRM) will thrive for the near future. So will the successful attempts to crack it.

The Future Of Online Video?

2007-03-27T10:31:00.000-07:00

So here we go again, round two, three, I forget. While YouTube rolls on, distributing everybody's content while ignoring who owns the rights, competition has again started to rear it's head. Not only have NBC and News Corp. (Fox) banded together at the hip to form their own "streaming" content viewing experience, Apple Inc. has quietly begun shipping it's iTV device. These two events are the tip of a new wave of consumer opportunities for having a true, pure, video-on-demand encounter in their homes and will forever change the way we view this kind of content. Just as the DVR ushered in a new era, one that excludes commercials unless desired, so too will real competition for YouTube, such as the NBC/Fox deal and Joost, speed up the adoption of these new technologies by the public in mass. Joost, founded by the creators of Kazzaa (a peer to peer service ) and very unlike unlike YouTube, have been methodical in making sure every intellectual property it will stream has a set value, legitimate license, and the proper advertising to go with it. You can bet the folks NBC and News Corp. are very like minded with their respective properties and forthcoming service!

Even with all this hubbub and activity on the corporate front, this still leaves the content on your computer and you at your desk or in front of a laptop, viewing it on a smallish screen. Which brings me to iTV from Apple... This device, which I have been testing, really does bring content from the computer to a wide screen HD television in a manner that is far from complicated. Combined with the iTunes store, which sells many, many TV shows (sans commercials) and movies, it doesn't take long to realize that this is the pure video-on-demand play that all the techies have been promising us for years. No longer relegated to the set top Cable or Satellite box, consumers are soon going realize even more content can be easily culled from the web via legal means such as the iTunes Store, Joost or the new "YouTube-like" services being developed by the big players like Viacom, Fox/NBC, and even Barry Diller's IAC. Not only has Apple has sorted out "the last 50 feet" issue, there are other options out there similar to iTV, just not as bulletproof or easy to use yet, in my opinion. I can even see the day fast approaching that the DVR and all of the services it offers, will become a dinosaur. This is most certainly the direction we are headed, a day where we download TV programs without commercials and watch them at our convenience in our bedrooms, living rooms, wherever we want, the future of online video...

The New Rules

2007-03-11T10:26:00.000-07:00

A realignment of resources and content is well under way in the rapidly changing world of high tech and telecommunications. If you have a tech heavy portfolio, I am recommending that you get ready for a bumpy ride. Let's take a look at a timely example and one I feel portends a trend to come.

Yahoo Inc.'s recently resurgent stock retreated by more than 5 percent Friday amid fears that a setback in a lucrative partnership with AT&T Inc. will undercut the anticipated gains from an overhaul of the Web portal's advertising platform. I read in The Wall Street Journal that AT&T wants to stop giving Yahoo a slice of the subscriber fees from the aging 6-year-old co-branding agreement to sell Internet access in most of the country. I think it's about time AT&T woke up from it's slumber as the business model for this type of arrangement has been the exact opposite for some time now! Investors drew the same negative conclusions as Yahoo shares fell $1.59, or 5.2 percent, to close at $29.12 on the Nasdaq Stock Market on Friday, the 9th.

What's alarming to me is the fact that before Friday's downturn, Yahoo's stock had climbed by 20 percent this year, rebounding from a horrible 2006 performance. This reflected Wall Street's widespread belief that Yahoo will prosper from a month-old upgrade to its formula for linking ads to search requests and believe me, any restructuring of this current AT&T deal would deliver a substantial blow to that theory. AT&T is believed to pay Yahoo $200 to $250 million annually, accounting for more than 25 percent of the $798 million in total fees that the Internet powerhouse collected last year. That is a lot of money at stake and Wall Street obviously took that into account, lopping off 5% of the stock price in a single day.

This is the old way of doing business, companies like Google have changed these rules forever by flipping the old model on it's head and nowadays being the one doing the paying of fees. Why is this? Simple really, it's the AT&T's of the world that own the coveted pipelines into your house and these companies are now in the position to start flexing their muscles and choosing are the content and making new financial arrangements reflecting this new landscape. Many of these antiquated deals made long ago will soon come up for renegotiating and tech investors had better grab their wallets as the "old guard" adapts to the new rules...

Viacom Getting It Right This Time

2007-02-12T05:44:00.000-08:00

Finally giving up after months of meaningless negotiations, media giant Viacom a week or so ago, demanded that YouTube Remove 100,000 clips that featured the company's TV shows or movies. This move, in my opinion, is both brilliant and timely because there is a strategy involved that has got me thinking that the folks at Viacom might really be getting it right this time. During an interview with Cnet on Thursday, February 8th, Erik Flannigan, VP of digital media at the Comedy Central said "YouTube throws down the gauntlet for any television network or content producer to ask, 'Why is it better for people to consume our video on YouTube rather than on my site?'" That is a welcome comment from a big wig on the inside because it has a forward thinking thought process behind it and apparently, a strategy too.

The idea behind this strategy, experts believe, is to find a halfway decent "workaround" to the service YouTube provides. After all the talk, the relationship between Sumner Redstone and the guys at Google must be kinda chilly and while Viacom is indeed big, it has proven it will learn quickly from it's past blunders in a digital world. This time around, the company has recently begun offering what are called embed codes. These codes allow fans of the Viacom's most popular shows such as The Daily Show and The Colbert Report to post clips to their MySpace.com pages or blogs, effectively duplicating one of YouTube's best features: the ability to easily post videos on other web sites and blogs. Offering the embed code also, incidentally, allows them to generate advertising revenue and some of the clips already up on Comedycentral.com come built-in with the 30 second spot as seen on TVs for decades. And then there are the very savvy plans to seriously market the web site and the upgrades to it, new territory for an old media company, indeed.

I say "bravo" to Viacom for this change of heart and, while there remains much work to be done to fully implement the new strategy, this certainly represents a step or two in the right direction. I have been advocating this kind of aggressive action ever since my first couple of months of DSL service. Why did it take so long for Viacom to reach this conclusion and will others follow the lead? Time will tell, stay tuned for that...

CES 2007: Open vs. Closed

2007-01-22T05:54:00.000-08:00

The Open vs. Closed business models are each becoming more entrenched these days and increasingly the consumer seems caught in the middle. In this new ultra-high tech world that is gaining more traction by the minute, I am fast starting to realize that the "Open Model" will eventually take over and most likely, by default. It is becoming quite evident that consumers prefer it. At CES Las Vegas (Consumer Electronic Show) this year, nowhere was that corporate battle more evident than the match up of CBS and Disney and the keynote speeches of their respective CEOs. While Apple did indeed steal some of the hype (from far away MacWorld with it's iPhone announcement), these two speeches in particular, set the stage for the open and closed approaches to media content and it's use by the consumer.

Les Moonves, the President and CEO of CBS, wholly owned by Viacom (by the way) presented the stunning news that his company had just recently done deals with the ubiquitous YouTube and another up and comer, Second Life. Grant it, while each of these deals are currently in the form of a "contest", YouTube and the 15 second "inspirational video" coupled with Second Life's "Virtual Star Trek plot line", it importantly signals to it's audience, "we want your input". To this media observer, these ideas represent the very essence of openness in today's digital world. (See my column on DRM below)

In contrast, Bob Iger, the main honcho at Disney/ABC/ESPN left many with the impression that what Disney really cares about at the moment is Disney! In fact, he didn't even come close to sharing the stage with anybody who wasn't a Disney star. He seemed to be reflecting the corporate mood of "Hey, we have the hit shows right now (Grey's Anatomy, Desperate Housewives, Lost) and how 'bout that folks!" From the sidelines, the only moves Disney is making in the digital world right now is from it's portal disney.com which allows for some interaction but is walled off, similar to how AOL used to be "Closed". That is the main reason I bailed out on AOL (long ago) as soon as I had a clue! Apparently, millions of others felt the same way and followed suite.

So there it is for us to see, good examples of embracing new tech and attempting to ignore it for as long as possible. While Disney certainly has more going for it than the old AOL, it is clear to me that they need to bring fresh ideas and employees to execute these tech strategies into the company sooner than later to avoid problems in the very near future. Disney CEO Iger can learn a lesson or two from his buddy Steve Jobs at Apple, a CEO whose computers run both Windows and the Mac OS. Maybe the first lesson could be; open is better than closed...

They're Coming To America

2007-01-15T08:50:00.000-08:00

Posh and Becks? America? Tom Cruise involved? Now I know this column should be my latest musings on or about varied themes media related but believe you me, this move of the world's current most famous "soccer" star (does anybody still remember Pele?) is nothing more than a simple media move! David Beckham is so famous outside the States, the press follow and many times document his every move along with his wife Victoria, the former Posh Spice of the Spice Girls. That's correct, one of the UK's great gifts to the music world, the Spice Girls, I remember them but not really for their music. Back to Beckham, so where is he going to play after a less than stellar 2006 World Cup and a much ballyhooed stint at Real Madrid, why, Los Angeles of course. Come on now, you know, that great mecca of soccer in the USA, Southern California... Los Angeles Galaxy head coach Frank Yallop wants David Beckham to be his midfield general. Tom Cruise wants a new best friend and photogenic partner about-the-town and who knows what the Church Of Scientology will end up with in this reported (US$) 250 million Beckham/Galaxy deal. The formula as to who pays who is rather convoluted, but it is in all American sports nowadays.

My take on this is that America will continue to reject soccer/futbol en masse and that while Becks, as he has been known to his legions of fans the world over, will attempt to promote and play the sport here, he will soon be taking up acting lessons and preparing for a career change (with Tom Cruise's help and deep pockets). No big mystery here at all, why else would the aging sports legend come to Hollywood, er, L.A. of all places? He certainly does not need the money, and there are far more comfortable digs to be found in much more palatable places in the world. The L.A. Galaxy head coach recently said: 'I'm not giving too much away but I would think he'll play centrally for us. We need him on the ball as much as possible and that's the best place to play him I would think." My stunning advice to the coach: hubba hubba big bubba, you better get what you want quickly because like many before him, David Beckham won't last long once it dawns on him; nobody in the U.S.A. cares. Corporate America needs him like they need a hole in the head! All is not lost though, his wife, the still lovely Posh, will be thrilled... In the immediate future; great shopping, his and hers acting classes and a wonderful climate the whole family can look forward to living in... My congrats on that quarter bil big fella, you've really earned it.

Brave New Media Frontier

2007-01-08T06:30:00.000-08:00

At last, the long entrenched monopoly of our cable companies to provide us the subscription TV services we really (don't) want is now officially over. Now that the telcos and other communication companies will be able to more easily acquire the licenses to compete with Time Warner, Comcast, Cox and others, the market will finally fragment to the extent that subscription prices will fall back to reality, or, at least be substantially lower. Even more exciting, the many new internet based TV services promise huge landscape changes and will vastly broaden consumer choice. Just one quick example; Apple Computer is expected to soon roll out it's new iTV device which promises to seamlessly integrate your media content from the home computer to your (flat panel, wide screen) TV and we all know how that effort will probably turn out, just look at the iTunes/iPod business model.

Of the telcos I have been keeping tabs on, AT&T has apparently been the busiest to date and it has recently given birth to it's newest "baby bell", a fledgling pure-telco TV service called AT&T U-verse, albeit only in the extended San Francisco area. While it is indeed struggling to meet the deadlines it promises for a national rollout, the massive telecom concern has concrete plans to announce 11 markets and possibly more shortly after the beginning of the new year (2007). One potential advantage that AT&T U-verse could hold over the largest cable operators in this country: extremely large amounts of bandwidth capacity (you have gotta love AT&T's fiber-optic system) most probably allowing it to offer significantly more programming than current cable systems can. Again, a timely example; they have no problem offering the NFL network, which some of the cable companies won't carry because of rights fees disputes. This is the kind of pettiness that can be completely avoided in the future. Indeed, AT&T claims it will offer it's new TV service to 19 million homes by the end if next year and Verizon's new FIOS service is not far behind with claims of 18 million by 2010. These companies currently or will shortly provide all the TV "bells and whistles" we expect today such as DVRs, on-screen programming guides and on-demand downloads. You can also expect the obvious bundling of other (wholly owned) services such as cellphones, obsolete land lines, other hardware, and any other services they can dream up.

The day is finally dawning, however slowly, on a brave new media world....

YouTube Madness

2006-12-26T09:28:00.000-08:00

Why has it been so hard for old media to learn from it's recent missteps as it tries to find it's way in a new media world? A recent article I happened across in the Wall Street Journal, actually it was December 9th, reminded me yet again that NBC, CBS, ABC, & FOX are struggling mightily to even play catch-up in a new tech savvy world. I mean, this move of theirs to supposedly come together and create a credible challenge to YouTube is really just another limp attempt to test the waters of web 2.0 culture. This brilliant, brainstorming idea comes floating out shortly after these same TV executives dismissed this very same YouTube as a flash in the pan, and a largely illegal one at that. "They really want to do it, " claims one anonymous executive. "Ten minutes after they do it they'll want to kill themselves" he exclaimed. Now, I'm not sure about you, but to me, this all smells about as bad as a popcorn fart...

For starters, Google's recent acquisition of YouTube (for about 1.8 billion in stock), has sped up already dervish activity that surrounds the complex and often very high-stakes dance that these media empires are currently having with new online partners for control of their wares and the profits. More importantly though, CBS/Viacom is already licensing material to YouTube and FOX is insisting that any combined effort to supplant this upstart be hosted on FOX sister property MySpace. This will most certainly end up a nonstarter and will eventually open the door for a new Google inspired ad revenue stream of some sort to gain traction while these titans of old media bang their heads (and egos) together. Even the lethargic, sluggish AOL isn't sitting this one out and is rapidly re-engineering it's video site to mirror YouTube's, albeit rather lamely, at the current time of this publishing. They have renamed it "AOL UnCut Video". Wow, what surprise, huh? The one cool thing here is that they have tied it into the AIM service, which is still the market crusher in my opinion and already has the desired demos (18-24) for this kind of thing. There are many more YouTube rivals including Eefoof.com, Panjea.com, Revver and Blip.TV. These new kids on the block are getting their acts together quite rapidly, further changing the already crowding landscape. And, oh yeah, CNN is launching CNN Exchange which will house, you guessed it, user-contributed videos, yeesh.

Maybe what the major networks should do is concentrate on making TV shows the viewing public want to watch. If they really want in on the "cool stuff" so bad, the last time I checked, the broadband pipeline still runs right into millions of American homes and that number is growing. Why not learn for themselves how to truly embrace the broadband era and just stop with this attempted "knock-off" of the Tube. The new media community is screaming, "For goodness sake, stop stinkin' the joint up!"

Satellite Radio Falls Back To Earth

2006-12-08T15:04:00.000-08:00

In the space of a year, the two most popular satellite radio companies are closer than ever to falling out of space. Let's face it, in U.S. business history, the first players, or pioneers don't have the commercial field all to themselves for very long. When XM and Sirius Satellite Radio were start-ups, not all that long ago, they were showered with venture capital and I mean big time funded. This resulted in massive bidding wars for on-air talent, programming and even extended into the executive boardroom (i.e Mel Karmazin, formerly of Viacom) setting the stage for the tight spot they are in at the present day. Share prices of these stocks are tanking as XM closed recently at 14.81 and Sirius at 3.88. High watermarks for the year were 30.99 and 7.99 respectively. Both companies continue to revise their numbers downward on a semi regular basis and their forecasts, and, in my opinion are still far from realistic. Why do I say this? One reason might be the churn rate which, at Sirius is a staggering 100,000 customers a month. Another might be the balance sheet, or lack of one. At XM in the 3rd quarter alone, the operational loss was 60 million compared to a measly 285 million in cash. Sirius is even more more of a freak with 352 million cash on hand while saddled with 1 billion in debt.

These business models clearly are not sustainable for much longer, American investors understandably like winners (big surprise) and neither of these companies fit the bill. The short life of a grand idea is getting shorter still as are our attention spans, welcome to the 21st century! I have begun to realize one of the few possible solutions for this predicament of satellite radio is for these two to merge. The FCC has not come out against the idea when the question has come up thus far though I suspect the real problem here would be the merger of egos, not equals. Taking part of Howard Sterns money back isn't an option and unless one of these competitors buys the other outright, the bloated and overpaid talent pool (a massive list including Oprah, the NFL, Stern, Opie & Anthony, Cardinal Egan (?), NASCAR, etc.) might well end up in the death of both of these wannabes. Recently, investors lopped off 8 percent of Sirius' stock in one day alone. Certainly, this won't continue forever, most on Wall Street still remember the Tech Bubble...

A Day Late, Many Dollars Short

2006-12-07T08:56:00.000-08:00

I would like to take some time out of my busy morning to welcome the "major record companies" to the 21st century. This industry in particular has stayed in the "dark ages" while the rest of the universe has embraced and learned how to profit in this new digital age. These "giants" of today's music landscape can thank themselves for the dire circumstances they find themselves stuck in. The main culprit that I can see, having been a keen observer and a peripheral player, has been the industry-wide reliance on DRM (Digital Rights Management). While I understand the knee jerk reaction to the old Napster business model (i.e. stealing), DRM has proved an unmitigated financial disaster and has by default put both the consumer and artist in most uncomfortable positions.

For years, recording artists and bands have been stuck releasing (many times behind the back of their own labels) new music in the unrestricted MP3 format on their own websites. That way fans can put these files on the iPod or another MP3 player as well as burn them to CDs and any other way they want to use them. The other options, post-Napster, include companies like Apple/iTunes, Yahoo Music, eMusic and many others, not including the illegal file sharing services such as Limewire and the likes. Of these digital download options, only Apple did the DRM dance with the major Music Companies and this was for their own purposes, they have deals with all the big boys, they sell iPods and music through the iTunes store, and that's a brilliant idea and solid business model. They make a lot of money this way! However, this DRM mindset has helped create numerous default "gatekeeper" situations much the same way as in the past we have had radio broadcasters and MTV serve as the arbitrators of what we were exposed to at the time. Apple is a great example of a modern gatekeeper, many unknown and upcoming artists would love to have tracks available on iTunes, but they aren't. You see what I mean? That's a hell of a bottleneck...

Now, many days late and millions of dollars short, EMI, based in the UK, has decided to dip it's toes in the DRM-free waters and begun selling a tiny number of songs in the unrestricted MP3 format (Yahoo! Music). I can only assume that this is the beginning of a new mindset for these timid executives. It has become plain to many of these old fools that imposing DRM restrictions has been the main issue behind the lost sales, while digital piracy continues to run rampant as ever. Companies such as Emusic have sold almost 100 million MP3 files legally and maybe, just maybe, the "major labels" will figure it all out in 2007. I am sure that these companies will take a bit more convincing, perhaps in the form of increased sales figures and no noticeable uptick in file sharing, before they fully embrace technologies such as MP3 downloading, but hey, at least EMI is giving it a fair shot...

Hey Man, What's The Deal At Yahoo?

2006-12-06T16:04:00.000-08:00

Yahoo, once the darling of Wall Street has indeed fallen on hard times. Not only is the stock price down some 30% plus this year but the latest "reorganization" has the whiff of desperation. What started out with such fanfare and promise, Santa Monica based YMG (Yahoo Media), and it's association with former ABC honcho Lloyd Braun, now apparently meeting it's demise and, in my humble opinion, not soon enough. Mr. Braun has been sitting on top one of the greatest opportunities to come down the internet pike in quite some time. Put aside utter debacles from the late 90's tech bubble (i.e. DEN, also based in Santa Monica), this idea of Yahoo's to bring in a serious media heavyweight was well timed, they just got the wrong guy at the time. Now that broadband internet access has reached a critical mass here in the US, the time has been so right for someone to be in a position to start pushing quality original content made on a budget right down this new pipeline into millions of homes. Instead, Mr. Braun apparently dithered for a little over a year before making lukewarm attempts to put programming in play.

While many detractors on Wall Street will surely point to other major problems at Yahoo, one such example being a failure to deploy software that could prioritize the placement of the most lucrative ads on it's vast internet properties (along with other advertising woes as of late), I still maintain these issues would have been of much less significance with a red hot and vital YMG. The only thing really at play here is Yahoo's streamlining of it's departments and a better executive command structure for a fast changing, extremely competitive environment. Big Boss Terry Semel could certainly use it. As for YMG, who really knows what is in store for Yahoo's next attempt at creative "TV-styled" content for the web but, at this point, it can only get better.

post

2005-07-19T08:51:00.000-07:00

posting soon