Video: Sports Illustrated Shows Off a Google-Ready Digital Magazine

Sports Illustrated hasn’t come to Apple’s iPad yet, but the magazine is already showing off a new version of its future: A digital version designed with Google in mind.

This one, which Editor Terry McDonell showed off at Google’s I/O developer conference today, looks a whole lot like the one the publisher says it is bringing to Apple’s gadget soon. The real difference here is the way readers/buyers get their hands on the thing: Rather than buying it from Apple’s App Store and downloading it to your iPad, you would access it via your Web browser, after purchasing it from an app store Google manages.

For most users, this may not matter very much. Regardless of which store you buy it from, the magazine should function the same way. (Don’t get hung up on the fact that it’s a Web-based app.)

But for publishers like Time Inc., the Time Warner (TWX) unit that puts out Sports Illustrated and titles like Time and People, it’s potentially a big deal: It opens up a much wider audience for the company’s publications, since they should work on any device that supports Google’s Chrome browser. Just as important, it gives Time Inc. another vendor to work with, one that might be willing to grant it concessions Apple (AAPL) won’t–like control over subscriber information, perhaps.

But all of this is a little speculative, as neither Time Inc. nor Google (GOOG) has released concrete details about the app store or the magazine. But the hope is that both will be ready in the fall.

Meantime, here’s McDonell’s presentation. He’s introduced at the event by Sundar Pichai, Google’s vice president of product management.

[ See post to watch video ]

And here’s cleaner version of a similar demo, which McDonell taped in advance:

This doesn’t look remarkably different from the tabletized magazine demos Time Inc. and Sports Illustrated have shown off before. That is, SI (and mag publishers in general) are still primarily concerned with porting their printed product to digital form, adding some audio and video, as well as selected links to the Web. This makes sense given that both demos were produced with the Wonder Factory design shop.

See for yourself: Compare and contrast today’s demo with the one SI showed off last fall:

Face It – In Music, Devaluation Is The New Reality

Happy smiling man listening to music on headphones

Spotify is offering access to the most well-organized, comprehensive catalog of music ever assembled in history.  So why are they being forced to beg?

Sure, Spotify is limiting offline and mobile access with its middle-tier, ‘Unlimited’ offering.  They needed to create some differentiation.  But 5 pounds, 5 euros, 5 whatevers?

The internet did this to recorded music.  Removing the 2.0-friendly hat for one moment, the reality is that the perceived value of recordings has been eviscerated.  And Spotify just can’t ramp its premium percentages to a reasonable level.

The devaluation is the new reality.  At Digital Hollywood, one panelist spoke of the ‘awkwardness’ that arises when artists charge their fans.  At NARM, everyone was trying to figure out how to CPR the CD with cheaper price points and special packages.  And months earlier, David Hyman of MOG stuffed an entire catalog of six million songs, a smart radio player, and a community of like-minded fans for five bucks a month.

USA Today called us when MOG All Access launched, asking if it would work.  When the answer was ‘maybe, let’s see,’ the reporter was a bit surprised.  But it’s only five bucks, how could it not work?  Sure, Hyman could convince the investors, you can almost see the pitch right now.  But consumers are getting high for free.

We’re talking about the price of a beer.  But MOG (and now Spotify) are giving you the entire keg for that price, always full and with whatever beer you want.  And for another five, Spotify (and later MOG) will give you a smartphone backpack to carry it around.  So why is it still a major question as to whether fans will pay?

Actually, Rhapsody and Napster - and labels - have been asking this very question since the early part of last decade.  When digital music conferences were packed and billions were at stake, subscription success was almost viewed as a future truism by some.  A matter of time.  So many songs, so much access, how could it not make sense?

Maybe the new rule is that, if it looks good on paper, it’ll never work.  If it seems like an obvious winner, maybe it’s destined to lose.  But the seemingly-illogical consumer reaction can be dissected.

Let’s see.  They’ll still pay for Netflix (NSDQ: NFLX), smartphones and endless apps, games, iPads, and Kindles.  And, far more than five bucks for cable channels, most of which they’ll never watch.  And, they’ll pay for broadband upstream, but music downstream must be free.

The toll booth is out of reach, and European labels are determined to do something about it.  Just take a look at the average hard drive and iPod.  Sure, the cloud will save the music industry, except that everyone is already carrying thousands of pre-selected, ripped or swapped (and occassionally paid-for) songs with them at all times.  Shuffling through playlists, tuning the world out with gigs of music.  So, why do they need more?

And sure, they ‘pay for music’.  Believe that and you’ll believe that they also ‘go to the show’.  But online, rationalizations aren’t required, and music floweth for free - download, on-demand, whatever.  To the point that consumers now expect it, they are entitled to gratis.

And that is why Spotify finds itself struggling to convince majors in the US.  And, why they are suddenly throwing their award-winning interface into the bargain bin and curtailing free access.  The recording industry was thrust into digital disruption before the others, and the perceived value of its output is therefore different.

So will the latest Spotify retread work?  The short, post-Napster history suggests no.  It says that even well-priced propositions will struggle against free.  And it shows that a consumer stuffed is not a consumer in need.  The gods of free have won, and Spotify is just making its sacrifices.

This story has been provided by our content partner Digital Music News.

Blip.TV Raises $10 Million for More Web Video You (Probably) Won’t See on Hulu

YouTube isn’t the only Web video company celebrating its fifth anniversary. Blip.TV doesn’t have a celebratory channel, but it is marking the occasion in style: The New York-based company has raised $10 million in a C round led by Canaan Partners and Bain Capital.

Blip doesn’t make Web video–almost none of the Web video companies that survived the last bubble do that. Instead, Blip helps distribute clips, generally made by small-time producers, and sells ads against them. It splits the proceeds with the producers.

And like many other Web video outfits, Blip still isn’t profitable, though I’m told that could change by the end of the year. But Blip has a modest burn rate and has been steadily ramping up its list of big brand advertisers. Which is why it has been able to get away with raising only $8 million prior to its newest round.

Here’s an interview I shot with CEO Mike Hudack yesterday, in which he explains how a Web video company can survive without the backing of Google (GOOG) or big media companies. And he sketches out his vision for Web video’s future: Lots of people spending very little to make interesting stuff, and making enough money to keep on doing it.

Following that, a clip of Nostalgia Critic, one of Blip’s most successful shows. I don’t get it, but plenty of people do.

[ See post to watch video ]


Online Media Company Secures Capital from Canaan Partners and Bain Capital Ventures.

NEW YORK, NY – May 19, 2010 — Next generation television network today announced the closing of its third round of institutional capital, led by Canaan Partners and existing investors Bain Capital Ventures. The company will use its new funding to accelerate the growth of the independent Web shows that hosts and distributes, expand its content services team, continue to grow its international advertising sales force and develop new products for viewers and producers.

“ turns five this year, and I couldn’t be happier with our success to date and our growth plans for the future,” said CEO and co-founder Mike Hudack. “We started in 2005 with a simple mission: to change the entertainment industry by making independent show production sustainable and scalable. We’re moving on to the next phase of executing against that mission, and with help from both Canaan Partners and Bain Capital Ventures I’m confident that we’ll be successful. We’re making more shows sustainable every single day, and now we’re going to accelerate that change even faster. This is an extremely exciting time.”

More than 44,000 independent show producers visit the show creator dashboard every day to review statistics, engage with their communities of viewers, manage their shows, and release new episodes across’s extensive distribution network. Together these shows attract more than 90 million video views a month. Eighty-five percent of those views are paired with targeted, direct-sold advertising from brands such as PepsiCo, Chevrolet, Samsung, Starbucks, AT&T and Scion.

“We’ve been following’s growth for years, and we’re excited to invest in the company as it continues to change the entertainment industry,” said Warren Lee, Venture Partner at Canaan Partners. “ has executed on its vision, and the company is creating a new Web television industry that is drawing top talent from traditional television networks, the film industry and garages across America. We look forward to working with Mike and his team to continue transforming entertainment together.”

Best Buy’s Digital Movie Service Launches Under CinemaNow Name

Best Buy storefront

Best Buy’s long-awaited entry to the online video download market is here. Best Buy said last June that under an agreement with Sonic Solutions’ CinemaNow movie service it would make movies and TV shows available for download and rent through, as well as various devices it sells. The company now says, however, that starting this month it will be marketing the service using the CinemaNow trademark (which it owns) and make the films available at as well as through Blu-ray Disc players and HDTVs from several manufacturers, including LG Electronics.

Seemingly odd choice to use the CinemaNow brand instead of Best Buy since CinemaNow, which has been around since 1999, never took off. At the same time, since Best Buy will be marketing the new CinemaNow at its stores through its salespeople, it will be hard for users not to notice the connection. Best Buy’s official explanation for the naming, provided to the LA Times: “We spent nine months testing and focus-grouping and had an agency come up with names and couldn’t find any we wanted. It ended up being the perfect marriage because Sonic was not looking to be customer-facing.”

As for the service itself, Best Buy says the new CinemaNow will have a “highly-functional, straightforward user interface, and will deliver a high-quality viewing experience through enhanced playback technology.” One differentiator between its offering and that of rival Netflix: At least for now, users won’t need subscriptions to watch CinemaNow’s titles. Here’s the release.


Playdom’s Latest Acquisition: Acclaim Games

Acclaim Games

Playdom continues to spend the $43 million it raised in its first round of funding in November: The social game maker is buying Acclaim Games, which offers a number of free massively multiplayer role-playing games on its website and has also developed the RockFree Facebook game; a second Acclaim Facebook game is set to launch this summer. The Acclaim brand has a storied history; Acclaim Games was a major video game developer in the 80s and 90s, although it declared bankruptcy in 2004 and the name was subsequently sold to Howard Marks, a former co-owner of Activision (NSDQ: ATVI), who started the new Acclaim in 2005. This is Playdom’s seventh investment in seven months.


Facebook, Zynga Settle Dispute; Announce Five-Year Partnership

Zynga's Mafia Wars

Facebook and social games maker Zynga, which had been battling over their relationship, have settled their differences, ensuring that Zynga titles—like FarmVille and Mafia Wars—will remain on the site.

Zynga is the top app developer on Facebook, but in recent weeks had been reportedly preparing to exit the social network, after negotiations with Facebook over the use of Facebook’s virtual currency system, Facebook Credits, fell apart. Under a new five-year agreement, however, Zynga has agreed to expand the use of Facebook Credits and Facebook has agreed to a “long-term commitment” to Zynga.

The two companies aren’t disclosing any details about the agreement, as you can see from the vague release posted below. The deal, however, saves Zynga from a big revenue drop (and possible collapse) if it had to leave Facebook. Despite the launch of its own standalone gaming sites, as well as a new partnership with MSN, the company was still very dependent on Facebook as a platform. Likely at stake: The bulk of the more than $355 million in revenue Zynga is expected to bring in this year.

Facebook, meanwhile, gets to keep a slate of games on its site that have been credited for helping to fuel its growth.

Another possible factor in the resolution: Russian investment group Digital Sky Technologies is a major investor in both companies.


Palo Alto and San Francisco, Calif., May 18, 2010 – Facebook and Zynga announced today that they have entered into a five-year strategic relationship that increases their shared commitment to social gaming on Facebook and expands use of Facebook Credits in Zynga’s games. The agreement provides a solid foundation for both companies to continue to work together to provide millions of people with a compelling user experience for social games.

“Facebook was a pioneer in opening their platform in 2007 and in just three years tens of millions of Facebook users play our games every day, from FarmVille and Café World to Treasure Isle and Mafia Wars,” said Mark Pincus, founder and chief executive officer at Zynga. “We are excited about Facebook’s long-term commitment to social gaming and Zynga, and look forward to working with them and other platform providers to bring the best social gaming experience to users worldwide.”

“We are pleased to enter into a new agreement with Zynga to enhance the experience for Facebook users who play Zynga games,” said Sheryl Sandberg, chief operating officer at Facebook. “We look forward to continuing our work with Zynga and all of our developers to increase the opportunities on our platform.”

Zynga is currently testing Facebook Credits in select games and will expand to more titles over the coming months.  Terms of the agreement between Facebook and Zynga were not disclosed.


GQ’s iPad App Does…Okay

So we’re six weeks past the iPad launch. Has Apple’s gadget saved the publishing business yet?

Nope. But it might be generating a few extra bucks.

Publishers are being tight-lipped and/or vague about their iPad sales, but here’s some directional news from Condé Nast, which launched one of the first magazine apps for the device: Condé says its iPhone/iPad version of GQ has sold 57,000 copies since its launch in December. (By comparison, Condé moves 900,000 print copies a month to subscribers and newsstand buyers.)

Fine. But what about iPad sales, which kicked off in April? Astonishingly, Condé doesn’t actually know, because it doesn’t sell an iPad-specific app. So it can’t tell if any particular app was bought with the iPhone, iPod touch or iPad in mind.

GQ spokeswoman Peri Dorset allows that the company did see a spike with the April 3 launch of the iPad. And then again with the launch of the 3G model. But that’s about as precise as she’ll get.

We do know, though, that three weeks into January, GQ had sold 12,000 copies of that month’s app, and that was just iPhone/iPods. So I’m not convinced the iPad has provided GQ with a huge boost.

Best-case scenario, for now, is that the apps provide some ancillary income. How much? GQ sells its app for $2.99, but repeat buyers can get subsequent issues (or back issues) for $1.99. For argument’s sake, let’s guess that two-thirds of GQ’s app buyers are first-time buyers. By my math, that’s about $150,000 in gross sales revenue–$112,400 from $2.99 sales, and $37,400 from $1.99 sales. Knock off 30 percent for Apple’s (AAPL) take and you’re down to $105,000.

Needle mover? Nope. But Condé also gets the chance to sell some advertisers the right to be a premium app sponsor, so the dollars could pile up, eventually. Enough to cover development costs, at the very least. Call it a decent start.

Okay, Condé rivals: Ready to share your numbers?