October 11, 2010
Volume XXXII, Issue 7
Apple Approves First BitTorrent App for App Store
Excerpted from PC Magazine Report by David Murphy
Is Apple not a big fan of BitTorrent-related applications on the App Store? That would be a mild understatement, to say the least.
Because this category of applications may be abused "for the purpose of infringing third-party rights, we have chosen to not publish this type of application to the App Store," said an Apple spokesperson in response to a uTorrent-controlling application that was submitted in August of last year.
However, the blanket ban might just be an issue of semantics. According to TorrentFreak, a BitTorrent-themed application was recently approved and published by Apple, and it's the first of its kind to skirt the alleged BitTorrent blockade.
The app, "IS Drive," gives users an interface for controlling downloads via ImageShack's web-based torrent downloading service. Perhaps more startling, given Apple's hesitance toward this application category, users can also manually add .torrent files they find on the web to their ImageShack download queue.
If that sounds a lot like a remote BitTorrent manager, that's because it is. So how was developer Derek Kepner able to get his application published where others like uMonitor's developer have failed?
"I always had the thought that if I didn't call the app a 'torrent client,' Apple would probably let it through the review process. After all, there is no real torrenting happening on the client side. It's not a torrent client. It's an ImageShack Drive client," said Kepner.
However, Kepner admits that adding new features to the application, including the ability to search BitTorrent sites like The Pirate Bay (TPB), for example, could run him and his app into a bit of trouble with Apple.
To that end, Kepner is carefully considering the updates he builds into successive versions of IS Drive. And in the case of the BitTorrent site-searching feature, he might just force users to add their online repositories manually instead of giving them a list of pre-selected sites.
"The app will not be designed to easily break the law and I hope no one intends to do so. But if a user is determined to break the law, what business is that of mine or Apple's?" Kepner said. "They could do the same in Safari anyway, right?"
Kepner's program has already enjoyed a healthy amount of popularity on the unofficial app store Cydia, which requires a jail-broken device to access. It's currently available in the official App Store for $4.99.
Cloud Computing, Dreamworks, and the Movie Industry
Excerpted from CloudTweaks Report
There is no denying that cloud computing in the movie industry will be big business. CloudTweaks has already delved into cloud gaming as well as cloud TV over the past number of months. We'd like now to focus our attention on the "cloud motion picture industry."
We have come across a cloud computing provider called Cerelink that provides private clouds for the movie industry. It has already worked out a deal to do a multi-year agreement to use on-demand, "elastic cloud computing" to render Dreamworks Animation motion picture projects.
"Shrek Forever After" and "How to Train Your Dragon" are a couple of movies that were rendered using the Cerelink cloud service over the past year. One of the major benefits for the movie industry is the cost savings involved with use of cloud providers such as Cerelink.
James Ellington, CEO at Cerelink, says, "We forecast growing our technical capacity by 20 times by the end 2011 - this will create one of the largest cloud computing arrays for motion picture production in the world."
Cerelink provides private clouds for rendering and for other content creation / management applications for the motion picture industry. Cerelink is able to offer a cost-effective, secure combination of data center space, scalable high-performance computing, and networking in the form of infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS). Cerelink is based in New Mexico.
Report from CEO Marty Lafferty
 The Distributed Computing Industry Association (DCIA) is proud to announce our agenda and speaker line-up for the first-ever CONTENT IN THE CLOUD Conference within CES.
The 2011 International Consumer Electronics Show (CES), sponsored by the Consumer Electronics Association (CEA), is scheduled for January 6th-9th in Las Vegas, NV. The DCIA is an affiliated organization of the CEA.
Our CONTENT IN THE CLOUD conference will take place on January 7th at the Las Vegas Convention Center.
As CEA exclaims, "Explore this cutting-edge technology that promises to revolutionize entertainment delivery! If the cloud touches your business, you won't want to miss these six keynotes and three panel discussions focused on cloud-managed content and its impact on consumers, the media, telecom industries, and consumer electronics (CE) manufacturers."
Our Opening Keynote - Vision for Content in the Cloud - will be presented by Geng Lin, Chief Technology Officer, IBM - Cisco Systems Alliance. Cloud computing can dramatically impact many aspects of entertainment delivery from transcoding to storage to distribution to payment collection to performance measurement. Step into the dynamic world of the cloud.
Panel Discussion 1 - The Impact on Consumers of Implementing Cloud Computing for Media Storage - will feature Todd Weaver, CEO, ivi TV; Mike Lewis, Founder, Kapost; Jason Herskowitz, VP of Product, LimeWire; Christopher Allen, General Manager, Napster; Guillermo Chialvo, Gerente de Tecnologia, Radio Mitre; Ian Donahue, Co-Founder, RedThorne Media; and Jim Rondinelli, VP of Strategic Development, Slacker. Discover how cloud storage affects users' ability to access entertainment content and to own copies of music, games, movies, and other media.
CITC Keynote 2 - Benefits of Cloud-Delivered Content for Consumers: Ubiquity, Cost, Portability Improvements - will be presented by Rob Shambro, Chairman & CEO, GenosTV. Cloud-based solutions offer consumers a number of clear advantages over older methods of online content distribution. Hear them all in this important address.
CITC Keynote 3 - Drawbacks of Cloud-Delivered Content for Consumers: Privacy, Reliability, Security Issues - will be presented by Jim Burger, Member, Dow Lohnes. What have various industries experienced with inadvertent leaks or intentional hacking of confidential data? When users go offline, how can they mitigate inaccessibility to their applications or losing data accidentally? And what happens if a cloud provider goes out of business?
Panel Discussion 2 - The Impact of Cloud Computing on the Entertainment and Telecommunications Industries - will feature Stephen Condon, Director of Market Development, AT&T; Alex Limberis, VP Business Development, Next Issue Media; Doug Heise, VP of Marketing & Strategy, Panvidea; Guy de Beer, CEO, Playcast; Mark Friedlander, National Director, New Media, Screen Actors Guild (SAG); Mark Vrieling, CEO, ScreenPlay; and Anne-Carole Nourisson, VP Licensing, Vivendi Mobile Entertainment. Content rights holders and broadband network operators are concerned that cloud storage could affect the way they manage their intellectual property (IP) and utilize network resources. Gain valuable insights on this critical issue for both industries.
CITC Keynote 4 - Benefits of Cloud-Delivered Content to the Entertainment and Telecommunications Industries: Efficiency, Control, Flexibility Improvements - will be presented by Barry Tishgart, VP, Internet Services, Comcast. Cloud-based solutions provide a number of clear advantages for content rights-holders and broadband network operators over older methods of online content distribution. Explore these benefits in this strategic overview.
CITC Keynote 5 - Drawbacks of Cloud-Delivered Content for the Entertainment and Telecommunications Industries: Infrastructure, Disruption, Accountability Issues - will be Claude Tolbert, VP, Business Development, BitTorrent. What problems do rights-holders face in adopting their internal content management processes to cloud-based media storage? What does the on-demand always-accessible nature of cloud-based entertainment delivery mean to conventional distribution systems? What new kinds of liabilities does the cloud present to participants in the distribution chain?
Panel Discussion 3 - The Impact on Consumer Electronics Manufacturers of Cloud Computing Deployment - will feature Mick Bass, VP, Strategic Alliances, Ascent Media; Sean Barger, CEO, Equilibrium; Les Ottolenghi, CEO & Founder, Fuzebox; Alexander Marquez, Director, Intel Capital; Mark Taylor, SVP, Content & Media, Level 3 Communications; Michael Papish, Product Development Director, Rovi Corporation; and David Rice, Chief Strategy Officer, Unicorn Media. Our expert panel examines the implications of remotely accessing applications and data that must be integrated into networked end-user devices. A look at servers and other edge storage hardware products rounds out the discussion.
Our Closing Keynote - The Years Ahead for Cloud Computing - will offer a comprehensive overview of the benefits and drawbacks of cloud-delivered content for CE manufacturers:
expanded opportunities for new products and features at various price points; challenges for interoperability and data security; and advantages of cloud-based solutions for popular entertainment.
We are pleased to provide DCINFO readers with these details in advance of this important upcoming event. Please plan now to attend what promises to be the most exciting International CES in its more than forty-year history. Share wisely, and take care.
Microsoft's Bob Muglia Details Cloud Strategy
Excerpted from ComputerWorld Report by John Gallant and Eric Knorr
Microsoft CEO Steve Ballmer says the software giant is "all in" when it comes to cloud computing and he's relying on Bob Muglia to play the hand in this high-stakes game. As President of the nearly $15 billion Server and Tools Division of Microsoft, Muglia controls key data center products like Windows Server, SQL Server, and System Center, as well as the Windows Azure platform-as-a-service (PaaS) offering that is a key underpinning of the company's cloud strategy.
In this interview with IDG Enterprise Chief Content Officer (CCO) John Gallant and InfoWorld Editor-in-Chief Eric Knorr, Muglia talked about how customers are making the move to the cloud and what they need to be doing right now. He also staked Microsoft's claim to leadership in the emerging cloud market, talked about the Windows Azure private-cloud appliance, and explained what customers can learn from the City of Los Angeles' challenges using Google Apps.
Q: How do you envision customers making the transition to the cloud?
A: The thing about the cloud is that it really is the delivery of IT as a service and customers being able to adopt services to run their business. It's happening at somewhat different paces based on the workload. We see some workloads like e-mail collaboration that are moving very, very rapidly towards the cloud.
Virtually every customer that we're working with on e-mail is having a conversation about whether it is time for them to move those workloads into a cloud service. Many are choosing yes. We're being very successful with our business productivity online services and helping customers make that transition with those workloads. Some are saying, 'Well, maybe it isn't really the time for me. Maybe I have some regulatory issues. Maybe I feel like I run the operation efficiently myself and it's not my business issue at the moment.' But it is a conversation that is happening almost everywhere, and it is a set of workloads that is moving very, very rapidly.
We see other workloads like CRM probably moving pretty quickly because of the distributed - geographic - nature of the force of people that work with CRM. There are other business applications that are very well suited for the cloud. I think about an application that requires significant amounts of computing horsepower for a period of time, but then may not require it all the time, like high-performance applications, simulations, modeling, things like that.
Or they're areas where you're reaching out and connecting to your supply chain or to your partners - your sales partners and distributors. Those are also good examples of business applications that need to be built. They're not standardized apps like e-mail, but they are business applications that are well suited to the cloud.
Q: How are you helping customers make the transition?
A: We're helping customers across virtually all of these workloads in the sense that we're providing world-class messaging and collaborative services that we deliver with our SharePoint Online and our Exchange Online. We're able to move customers that are on premises into those products, but also effectively move customers from other environments.
Some legacy customers are coming from, say, a Notes environment, where the cost of ownership in running that is a bit higher - significantly higher, actually - than, say, an Exchange installation is. The economic case for moving from an existing on-premises Notes installation to a cloud-provided Exchange and SharePoint is a very easy business case to justify. That's one set of examples.
In the creation of business applications, we're working to make it simple for people to take their existing applications that they've written, many of which are running on Windows Server today, and help move them into cloud environments - whether it be a private cloud or a public cloud like Windows Azure.
Q: How do you define private cloud?
A; The definitions of cloud have been something the industry has really struggled with. I think, first of all, it's helpful that the industry is really clarifying itself, saying that cloud is IT as a service, providing IT as a service. That by itself is a fairly big step in getting clarity.
Then, I think the real question is where is the cloud running and is it dedicated to an individual customer? I think of a private cloud as something that is running inside a customer data center and is dedicated to its own business applications.
Then you have public clouds, which are shared across multiple organizations. Windows Azure is an example of that. We have shared examples of our Exchange and SharePoint Online services, but we are also offering dedicated SharePoint and Exchange where we run it and, yet, it's dedicated to a customer.
Q: What do you think IT leaders should be doing differently or better in the way that they're moving toward or viewing cloud?
A: The most important thing is that customers begin to understand how cloud could be used to solve their business needs. Again, we are having that conversation with virtually every customer with workloads like messaging and collaboration. That's relatively universal.
I'm not going to say to every customer, 'You should all move to the cloud right now,' because it may not meet their business needs. But I do recommend that every customer evaluate it for those sets of workloads.
When it comes to business applications, customers are in a different state of adoption. Some are really aggressively looking at applications that they can move into a cloud environment. Some are relatively aggressively looking at how they can build their own private clouds. And there are a number of organizations that are still more nascent there.
What I would recommend that every organization do is take a look at their business applications and pick at least one to move to Windows Azure in a public cloud. I was talking to a large financial services organization not that long ago that has about 4,500 applications. And my feedback to them was, 'Choose. I know you've got all these regulatory issues. You're global, all these things. But there's one of those applications that you could move to a public cloud. Choose it and really begin and start working on that.
Q: How can customers expect licensing to change in the cloud model?
A: The biggest change as we move to the cloud model is it's a subscription-based model. It's an ongoing payment structure, because, obviously, you're running the service for the customer. If it is a well-defined service, like messaging or collaboration or CRM, it will typically be a per-user fee of some form that's paid, which is fairly consistent with the way they buy today, although they typically don't buy it by subscription. They buy it as a one-time purchase, but they, again, pay a per-user fee.
Please click here for the rest of this extensive interview.
Spotify Tries Live Concert Broadcasts, New US Murmurs
Excerpted from paidContent Report by Robert Andrews
European P2P streaming music sensation Spotify aims to add live broadcasts of music concerts to both its free and premium services.
The live broadcasts started in France with an MGMT gig from Paris on Friday evening, available to free users from within the app and to premium customers from Spotify's French blog.
It's a sponsorship campaign done with Blackberry, which has been allying itself with music; and Spotify confirmed to paidContent that it hopes to do more in future.
Aside from requiring a subscription for non-computer access and higher bit-rate, Spotify's pay-for incentives include pre-release album windows and occasional contests for things like gig tickets.
In reality, neither of these is a significant reason to pay up. Together, they may start to add small, incremental reasons to subscribe, on top of mobile access and non-exposure to ads.
A slice of the live market could prove lucrative - it's the fastest-growing part of the music business, the reason why so many old acts have re-formed lately.
If Spotify is serious about these top-up offerings, then it may need to regularize them, because they feel like filler currently - subscribers don't know which early release or gig they may get from one month to another.
Spotify's MGMT broadcast comes amid renewed skepticism, cited by CNET's Greg Sandoval, about Spotify's US chances. Spotify still aims to launch in the US by year's end.
Sandoval says Apple has been telling labels that launching a free music service would undercut its ability to sell downloads, sales of which have plateaued in North America. But we already know about US labels' reticence toward the free model, since WMG's CEO has spoken about it a few times.
What's more, Spotify appears to accept this reality and, though word is any US launch will likely be accompanied by some variation of its free offering, we would expect this to be limited.
What some observers overlook, however, is that, even at home in the UK, the service is limited rather than a Europe-wide free-for-all. New Spotify users can only stream free Spotify for 20 hours per month - it's the free part of a freemium mix. Today, 500,000 of Spotify's 10 million users pay, the company says.
Labels are looking to new unlimited-access services like Spotify as a way to reduce their iTunes dependency.
Apple, if it's serious about launching its own rumored unlimited-access service, will require a change to the existing license terms it has for a la carte downloads - but, by virtue of operating those downloads for the last six years, Apple today likely enjoys label relations that Spotify doesn't.
A new story has popped up in the NY Post, which says Apple does intend to launch an unlimited model, priced $10 to $15 a month. But there's no citation nor any further detail.
What this all boils down to - the labels want to re-ignite the digital music market by helping the transition from per-track to unlimited-access, but they want to do so on their terms.
If they are about to forever obliterate the notion that music should be priced in individual units, without going down the blanket-licensing route, they'll want to have an unlimited-access model that properly compensates them long into the future. Whether it's Apple or Spotify, these are likely the negotiating points happening behind closed doors right now.
Pando Networks Releases Online Game Delivery Report
Excerpted from Kansas City Star Report
Pando Networks, a leading provider of online game delivery and marketing services, today released its annual game delivery report showing game download performance around the globe. This year's report aggregates data from more than 12 million game downloads from January through June of 2010.
The 2010 Pando Networks Online Game Delivery Report includes performance data gathered from 124 games and 14 petabytes of data delivered across more than 14,000 Internet service providers (ISPs) in 223 countries. The report includes information about game download completion rates and delivery speeds in various countries and on leading ISPs around the globe as well as performance across different states within the United States.
Pando Networks provides web services and software that accelerate online game delivery. Pando is not a traditional content delivery network (CDN). Pando services interoperate with any CDN to improve download performance.
The Pando report illustrates how the online game business is impacted by connection speeds in different locations. For example, 8 of the 12 cities with the fastest connection speeds are in South Korea while 3 of the 12 slowest cities are in Brazil. Correspondingly, South Korea has one of the highest game download completion rates and Korean companies are online game industry market leaders.
Some highlights of the 2010 Pando Networks Online Game Delivery Report are as follows: Game download speed is 380% faster in South Korea than in the United States.
Comcast and Verizon have the fastest connections speeds of all US network carriers. Delaware has the fastest connection speed of all US states. In South Korea, which has the world's fastest Internet connection speeds, Pando delivers data 69% faster than Akamai, the world's leading CDN services company.
In the United States Pando delivers data 13% faster than Akamai. On a global basis, the average measured connection speeds for content delivered using Pando services were 188% faster than speeds reported by Akamai. Windows XP is the most popular operating system for massively multiplayer online (MMO) gamers.
Pando Networks primarily delivers free-to-play games that are downloaded to PCs.
DFC Intelligence, a strategic market research firm focused on interactive entertainment and online gaming, recently published a report about the market for downloadable online games. In this report, DFC estimates that the market for English language client-based free to play games was $249 million in 2009 and will reach $2 billion annually by 2015.
A copy of 2010 Pando Networks Online Game Delivery Report is being distributed with the DFC Market for English Language Client-based F2P PC Games report and is also available by contacting Pando directly.
Robert Levitan, CEO of Pando Networks said: "Pando is proud to work with so many of the world's leading online game companies. We are happy to share this data in an effort to help all online game companies bencmark their performance against the state of online game delivery."
"World of Warcraft" P2P Subscriber Base Exceeds 12 Million
Blizzard Entertainment announced today that the subscriber base for its P2P distributed World of Warcraft, the award-winning massively multiplayer online role-playing game (MMORPG), now exceeds 12 million players worldwide.
This milestone was reached in the wake of the mainland Chinese launch of "World of Warcraft's" second expansion, "Wrath of the Lich King," and also as global anticipation continues to mount for the December 7 release of the game's third expansion, "Cataclysm."
"The support and enthusiasm that gamers across the world continue to show for 'World of Warcraft' reaffirms our belief that it offers one of the best entertainment values available today," said Mike Morhaime, CEO and Co-Founder of Blizzard Entertainment. "We are as committed as ever to taking the game to new heights, and we look forward to demonstrating that with Cataclysm in December."
Since debuting in North America, Australia, and New Zealand on November 23, 2004, "World of Warcraft" has become the most popular subscription-based MMORPG around the world. It was the bestselling PC game of 2005 and 2006 worldwide, and finished behind only "World of Warcraft: The Burning Crusade," the first expansion pack for the game, in 2007.
For 2008, the "World of Warcraft" series represented three of the top five bestselling PC games, with "Wrath of the Lich King" finishing the year at #1, and in 2009, "World of Warcraft" titles claimed three of the top six spots.*
"World of Warcraft" is currently available in eight languages and is distributed via P2P technology to North America, Europe, mainland China, Korea, Australia, New Zealand, Singapore, Thailand, Malaysia, Indonesia, the Philippines, Chile, Argentina, and the regions of Taiwan, Hong Kong, and Macau.
QTRAX Expands Globally
Excerpted from CMU News Report
P2P-based digital music service QTRAX has launched in beta in India, Singapore, Malaysia, Hong Kong, Australia, and New Zealand, kicking off the legal file-sharing service's expansion outside of North America.
There has, of course, been much speculation about the future of QTRAX after its initial debut at Midem in 2008, and its subsequently very gradual international roll out. A lukewarm response to its DRM-heavy Microsoft-reliant platform and ongoing legal squabbles with technology partner Oracle haven't helped.
But, according to Music Week, QTRAX boss Allan Klepfisz was upbeat last week, saying, "QTRAX is beginning with a strong Asia focus. The opportunities in this part of the world are very substantial. There is massive music consumption, combined with fewer legal services. We are very excited about building our presence across Asian markets."
Further expansion is expected into South America and Russia, while the country's previously reported deal with Chinese search engine Baidu is expected to result in a launch in China.
Amadeo Now Available on All Major Smart-Phone Platforms
Excerpted from TMCNet Report by Rajani Baburajan
Damaka, a provider of mobile unified communications and collaboration (UCC) technologies, announced that its Amadeo UCC product suite is now available on all major smart-phone platforms, including Android, iPhone, iPad, BlackBerry, Symbian, and Windows Mobile.
Notable features of the new Amadeo platform include a live multi-party video-conferencing application and desktop sharing with voice, editing, presence, instant messaging (IM), and multi-party audio conferencing.
Another feature of Damaka Amadeo is its Sweeping technology, a method of transferring in-process sessions to and from multiple devices, on all networks including WiFi, 3G, and 4G (WiMAX, LTE).
Earlier in July Damaka launched what the company claimed as the industry's first complete, real-time multi-party video conferencing solution for the Apple iPhone with support for WiFi, 3G, and 4G networks.
Recently in September Damaka introduced a two-way Push-to-Video Call for BlackBerry.
According to Damaka officials, Amadeo delivers the most powerful, comprehensive, and innovative video and collaboration solution available regardless of device or network.
Ramesh Chaturvedi, chief strategy officer for Damaka, said, "As the mobile workforce continues to grow, the ability to communicate and collaborate on any device, any network and any platform will enable new levels of connectivity, productivity and efficiency for businesses of all sizes in any industry."
Damaka is specialized in live video calling for smart-phones. The company serves communication, healthcare, and other verticals through the development of a converged media and collaborative communication platform for IP based networks across the globe.
The mobile UCC solution from Damaka is available in both P2P and traditional client-server architectures. It offers a unique solution for service providers, enterprise organizations, and small- and medium-sized businesses, according to company officials.
Damaka's software application is based on patented "direct peering" P2P technology with a highly optimized footprint for smart-phones and support for various operating systems, the company said.
For Content Owners, Digital Changes Everything
Excerpted from Online Spin Report by Joe Marchese
In two weeks I will be leading two discussions at The CTAM Summit in New Orleans, LA. I will be joined by an amazing group of innovators and leaders in the content and content marketing space to dig into how "social media" is impacting the content landscape. In preparing for the discussion, it is daunting and exciting to consider the number of ways that social media is affecting every aspect of how content creators and distributors operate. When you think about the questions surrounding the viewer/consumer life cycle and touch points, you can see just how pervasive change is going to be.
Viewer acquisition/marketing - Methods for reaching consumers with advertisements are changing for every marketer, from CPG to content producers. But while many CPG brands have been around for generations, content companies are looking for ways to create brands every day. This means that finding the required effective reach to launch new shows and drive tune-in is paramount to content companies thriving in a new media landscape. How will content owners solve the challenges facing all marketers in a way that meets their unique needs? Content companies do actually have some advantages here.
Content creation/distribution - The changes in consumer content consumption habits, especially time- and screen-shifting, will forever change the way content creators produce programming and plan distribution. Should separate content be develop for mobile and web? Should the programming be pre-released or delayed for digital viewers? Is there an effective strategy for building an audience through social media distribution and then scaling distribution through traditional channels? What about the other way around? Can social media be used to test content and adjust to audience preferences in real time? (Hint: the answer to the last one is a very big YES.)
Viewer engagement - Digital media in general, and social media specifically, offer an actual solution to the long-time promise of interactive programming. How should you create programming knowing that viewers will have at least two screens, and likely three (television, PC, phone), at their disposal while watching your content? How do you create digital engagement from broadcast content? What type of interaction will consumers accept or expect during content consumption going forward? What about creating community around viewing events?
Viewer monetization - Then there are the ROI questions, and of course the TiVo question. For content creators/programmers, should digital ROI be measured in viewer acquisition? How about in viewer engagement with content? How about in viewer advocacy? Is it possible for brand sponsors to accompany content as viewers engage and spread it through social media to provide new revenue streams for content creators? Will this scale?
And of course, in order to answer the questions above, we first have to ask: Who in the organization is responsible for managing the change to new media realities? Because, in the end, every department will be impacted, so those companies that do the best job of answering the questions and building an organization around operationalizing new media best practices will not just have the best social media plan today, but will have created the model for tomorrow's media companies.
What questions did I miss? What answers would you suggest? Drop me a line on Twitter. Will use the best on stage at CTAM, with the appropriate shout-out.
Burke Has Opportunity to Reinvent NBCU, Big Media
Excerpted from On Media Report by Diane Mermigas
Steve Burke will need to reinvent - not simply integrate - portions of NBC Universal and Comcast when the entities begin their extended merger next year to make the most of the combined assets.
Comcast has nothing to lose and all of big media has everything to gain from the process. Comcast garners half of NBCU's annual cash flow and a likely 10% return on its $15 billion investment in a gradual takeover that assumes no new growth scenarios. But that's exactly what big media must forge in the burgeoning mobile interactive social networking and e-commerce space.
The NBC-TV network's fourth-place prime-time ratings and Universal's cyclical box office pale by comparison to the upending of big media economics. Even as the nation's largest cable operator, Comcast is as threatened as its peers by mobile and online streaming video competition.
Burke, Comcast COO and newly appointed NBCU CEO, understands the broader ramifications at stake - even as deal protestors claim the cabler wants to use NBCU's content to extend its market power into the Internet and mobile space.
That the deal occurs during a period of extreme uncertainty and change provides an opportunity for bold, forward-looking game plans that could stand as an industry road map. While not all of this can be put into place on day one, Burke can trigger change from the get-go.
Having frequently spoken with and written about Burke and Comcast chairman Brian Roberts, I believe they would seek to replace rather than embrace broken business models. Comcast has a unique opportunity to rejuvenate the content and advertising businesses into something much more. That is, provided it doesn't let its cable operating point-of-view get in the way.
Here are some of the many considerations: Comcast wants to control content to share new economic models. This is Comcast's steepest learning curve, as most of its content efforts have been organic and niche, from The Golf Channel to Sprout. Restructuring the content production economics and pricing proposition are two of Burke's biggest challenges. As lines continue to blur between broadcast, cable, and streaming video, Burke will need to weigh the interests of NBC-TV, NBC's cable networks, and Hulu with Fancast, Comcast's On Demand and VoD services, and TV Everywhere. Comcast's slow-to-launch interactive Canoe Ventures could help to redefine and extend existing broadcast, cable, and online TV advertising into bigger interactive marketing and transactions.
*While Comcast will have more leverage and hedge to rising and divided content pricing, the combined entity's cable networks will provide 85% of the joint venture's earnings, based on an average annual 7% growth in revenues, advertising, and subscription fees. Cracking the code on paid content across any interactive devices has to be a win-win for both sides of the merged company's ledger.
Comcast has promised that "marrying of content and distribution" will spur innovation and competition." But because content and distribution don't naturally work together, "You have to make them work together. You have to do things that sometimes aren't immediately advantageous for both sides," Burke said earlier this year. It will be interesting to see what that means.
*Regulators and the public mistakenly fixate on the new company's present influence rather than the role it will play in the rapidly changing competitive and economic landscape. Regulatory and corporate rules of play must change. Comcast will not tolerate broken business models for long. The results can be positive.
Burke will need to radically change the NBC TV network model into a broader producer and distributor of programs for local broadcasters, cable operators, and its own cable networks, streaming video, and mobile. It could make NBC-TV's hallmark live, big events and sports. It will consolidate its entertainment resources and news - NBC News, CNBC, MSNBC - across all platforms.
Such realignment would stand in sharp contrast to what Disney is reportedly contemplating: selling its ABC TV Network (most likely to Time Warner) and its owned broadcast stations to large ABC-affiliated group TV station owners, whose community ties, correctly mined, can be valuable hyper-local assets.
As a cable operator, Comcast could realign its relationship with NBC-TV owned and affiliated TV stations to, as it has said, "reinvigorate local broadcasting, expand the distribution of independent networks and accelerate the anytime, anywhere video choices that consumers are demanding today."
It is all about execution, which is far more treacherous than the decade AOL and Time Warner spent destroying more than $200 billion in merger value. Comcast will work to keep cable from being marginalized into a dumb pipe and TV from deconstructing like music and newspapers, while making bold digital interactive advances. So far, Comcast Digital Entertainment mobile websites and apps are about as digital as it gets.
While all the talk is about the appointments and who makes the cut, the boldness of Burke's plan will dictate his management team. Burke's selection signals there will be no decentralization, which means new appointees are as likely to come from outside as inside NBCU. Whether that includes NBCU's current television entertainment chairman Jeff Gaspin or former Showtime entertainment president Bob Greenblatt, or splitting the cable channels and digital operations between USA boss Bonnie Hammer and Bravo head Lauren Zalaznick, Burke's overall reorganization and two-year plan for the company will be the real star.
Burke is a hybrid media executive. At Philadelphia-based Comcast, he has stayed on the outskirts of big media's New York and Hollywood hubbub. He worked for Disney decades ago during its early struggles with EuroDisney and its retail store launch. He oversaw the ABC-owned TV stations after his father, Dan Burke, and Capital Cities CEO Tom Murphy acquired ABC and eventually flipped the entire company to Disney. After jumping to Comcast in 1998, Burke successfully executed the $72 billion integration of Comcast-AT&T Broadband with an aggressive plan that replaced most AT&T top brass.
Burke has pushed the MSO as far as it can go for now, juggling small business data and voice against softening video subscribers. Like other cable operators, Comcast is scrambling to avoid disintermediation by Internet bypass, streaming video, and mobile by segueing into wireless ubiquity.
Providing new leadership and vision to NBCU will require Burke become an innovator in a new media world, inspired by the iPad he professes to love.
French ISP Refuses to Send Hadopi Notices to Users
Excerpted from Techdirt Report by Mike Masnick
At the beginning of September, we noted that some French ISPs had indicated that, as the French "three-strikes" process began, with the Hadopi agency sending out its tens of thousands of "first strike" notices, they would ignore the requests.
It appears that may be happening. Apparently the French ISP "Free" (which is not actually free) has decided that it will not pass along the warning notices to users:
"The law says that it is the Hadopi which has to send the warning 'for his own account and under its stamp, by electronic means, through the ISPs'. It never says how it should be sent 'through the ISPs'." Furthermore, although ISPs have been given the job of identifying and matching up IP addresses with the alleged infringers' personal details (on pain of 1,500 euros per day per IP fine for failing to do so), there are no penalties in place for not sending out warnings. "But 'Free' did not agree to Hadopi using its SMTP servers without a signed agreement, which apparently was refused, probably because they required payment or other forms of compensation."
The Hadopi law says that in order to face penalties before the court, Internet subscribers must have received at a least one previous warning by paper mail. It also says that in order to send this paper mail, the HADOPI must have been noticed of new infringements which must have occurred within 6 months after an e-mail was sent. Therefore, if the e-mail was never sent, no paper mail can be sent either, and the users can't face penalties.
Currently the law does not mandate an ISP to send the e-mails. But it does mandate them to hand over personal info.
So, it sounds like this does protect users, via a bit of a loophole in the Hadopi law.
Even if Hadopi sends out the personal info, if the e-mail isn't sent, then Hadopi can't take the person to court, and Free has no obligation under the law to actually send the e-mail.
Gene Simmons on File Sharing
Excerpted from ZME Music Report by Tibi Puiu
"Sue first and ask questions later," seems to be Gene Simmons', the legendary Kiss bassist and frontman, primary strategy for handling his business. At the recent MIPCOM Convention in Cannes, France, Simmons was invited as a keynote speaker to speak about "branding" and how he managed to transfer KISS into a million dollar business, expanding the brand everywhere from guitars, to comic books, to condoms.
"Make sure your brand is protected," Said Simmons. "Make sure there are no incursions. Be litigious. Sue everybody. Take their homes, their cars. Don't let anybody cross that line."
This means no exception. In Simmons' world, anyone who downloads unauthorized music should be treated like any common criminal. Yeah, every fresh-faced, freckled kid, college boy out there. Busted, sued, and sent to jail.
This all, however, sounds preposterous considering there are over a hundred million BitTorrent users all over the world. The phenomenon simply can't be stopped. When a download fails, there are ten others to take his place. Who's to blame for all this? Simmons likes to point his finger at the RIAA.
"The music industry was asleep at the wheel," Simmons complained, "and didn't sue every fresh-faced, freckle-faced college kid who downloaded material. And so now we're left with hundreds of thousands of people without jobs. There's no industry."
The RIAA spent $16 million on attorney fees to recover $390,000. Even worse, the year prior they spend $21M on lawyer fees plus an additional $3.5M on "investigative operations" only to gain back half a million.
Even worse, in 2006 they spent $19M and $3.6M, respectively, to recover $400K. I can conclude two things from this: 1) Someone should tell the RIAA a thing or two about ROI; and 2) It's practically and financially impossible to stop file sharing. OK, shut down the Internet.
This all doesn't seem to stop him making loads of cash, however. If there's anything I would have to give Simmons credit for, besides having a big tongue, is that he's an extraordinary businessman. The man simply knows how people work, what they want, and how to package and deliver.
His most recent famous venture is a reality TV show which is already at its 5th season, called Gene Simmons' Family Jewels, where he stars with actress and former Playboy Playmate Shannon Tweed and their two children. The TV show is now celebrating its 100th episode! Worth noting is also the fact that Simmons owns over 2,500 licenses, has his own highly successful marketing company, and even is the Chairman of an Internet start-up called NGTV.com
"Everything from KISS condoms to KISS caskets," Simmons declared. "We'll get you coming and we'll get you going. We literally have everything from KISS hi-def (HD) television sets that are about to come on the market to KISS motorcycles. Well, it's Planet KISS. Oh, I've already trademarked that, I forgot that."
Coming Events of Interest
Digital Hollywood Fall - October 18th-21st in Santa Monica, CA. Digital Hollywood Spring (DHS) is the premier entertainment and technology conference in the country covering the convergence of entertainment, the web, television, and technology.
Digital Media Conference West - October 27th in San Francisco, CA. Don't miss Content in the Cloud: What Does the Future Hold? at this full day of in-depth discussions and networking focused on the top business issues impacting digital media companies.
P2P Streaming Workshop - October 29th in Firenze, Italy. ACM Multimedia presents this workshop on advanced video streaming techniques for P2P networks and social networking. The focus will be on novel contributions on all aspects of P2P-based video coding, streaming, and content distribution, which is informed by social networks.
Streaming Media West - November 2nd-3rd in Los Angeles, CA. The number-one place to come see, learn, and discuss what is taking place with all forms of online video business models and technology. Content owners, viral video creators, online marketers, enterprise corporations, broadcast professionals, ad agencies, educators, and others all come to Streaming Media West.
Fifth International Conference on P2P, Parallel, Grid, Cloud, and Internet Computing - November 4th-6th in Fukuoka, Japan. The aim of this conference is to present innovative research results, methods and development techniques from both theoretical and practical perspectives related to P2P, grid, cloud and Internet computing. A number of workshops will take place.
International CES - January 6th-9th in Las Vegas, NV. With more than four decades of success, the International CES reaches across global markets, connects the industry, and enables consumer electronics (CE) innovations to grow and thrive. The International CES is the world's largest consumer technology tradeshow featuring 2,700 exhibitors.
CONTENT IN THE CLOUD - January 7th in Las Vegas, NV. The DCIA's Conference within CES explores this cutting-edge technology that promises to revolutionize entertainment delivery. Six keynotes and three panel discussions focus on cloud-delivered content and its impact on consumers, the media, telecom industries, and consumer electronics (CE) manufacturers.
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