paidContent turns 10: A brief history of digital media


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Remember when Friendster was the hot social network, publishers doubted that ebooks would ever sell, and Netflix thought DVDs in red envelopes was the future?

We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Internet Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

Zombie hand photo courtesy of Shutterstock user [Fer Gregory].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Flickr user [ebruli].

Book photo courtesy of Shutterstock user [Anna Chelnokova].

Cash register photo courtesy of Shutterstock user [Luiz Rocha].


paidContent turns 10: A brief history of digital media


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Remember when Friendster was the hot social network, publishers doubted that ebooks would ever sell, and Netflix thought DVDs in red envelopes was the future?

We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Internet Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

Zombie hand photo courtesy of Shutterstock user [Fer Gregory].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Flickr user [ebruli].

Book photo courtesy of Shutterstock user [Anna Chelnokova].

Cash register photo courtesy of Shutterstock user [Luiz Rocha].


paidContent turns 10: A brief history of digital media


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Remember when Friendster was the hot social network, publishers doubted that ebooks would ever sell, and Netflix thought DVDs in red envelopes was the future?

We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Internet Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

Zombie hand photo courtesy of Shutterstock user [Fer Gregory].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Flickr user [ebruli].

Book photo courtesy of Shutterstock user [Anna Chelnokova].

Cash register photo courtesy of Shutterstock user [Luiz Rocha].


paidContent turns 10: A brief history of digital media


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Remember when Friendster was the hot social network, publishers doubted that ebooks would ever sell, and Netflix thought DVDs in red envelopes was the future?

We do — that was that state of digital media when paidContent launched in 2002. Other weird things were happening back then too: People still got much of their news from television and newspapers, and they learned about major events after they had already happened.

There have been some huge shifts since 2002: Tablets and smartphones are now ubiquitous, lots of people read on their digital devices, and just about everyone is part of a social network or three. This summer is the tenth anniversary of our launch. In an effort to gain some perspective on the past decade in digital media, I’ve been reading back through paidContent’s archives — a collection of over 80,000 posts.

Since I was only a freshman in college when paidContent came to life, I often didn’t know, as I read through the stories from the early days, how things had begun or how they turned out. As I watched them unfold, I wanted to grab our readers’ arms and give them advice (“Don’t buy that Zune!” “Invest in Facebook!” “Go for the good Twitter handle now!”). But I also realized how difficult it is to predict success.

Some takeaways from my trip through the archives:  Some companies — AOL and Yahoo come to mind — have been consistently bad at predicting what consumers want. And a couple of companies, namely Apple and Amazon, have been very good at it. Also, being a native digital company helps, but it’s no guarantee of success (what up, MySpace?). And after all these years, it’s still not clear what content customers will pay for, or how much they’ll pay.

Streaming and Moviebeaming

What do analysts, CEOs and bloggers have in common? None of us can predict the future. Roger Ebert joked in 2002 that “on-demand streaming movies on the Web, like HDTV, are five years in the future — and will be for at least another 10 years.”

If Disney’s Moviebeam had been the only game in town, Ebert probably would have been right. When it launched in three cities in 2003, customers paid $6.99 a month to use a device that could hold 100 movies and plugged into the back of a TV set. They also had to pay for each movie they watched– billing was done via the phone line. The company went through various unsuccessful iterations before India’s Valuable Group bought it in 2008. It was never heard from again.

Netflix almost went down the same road. It had a plan to release a Moviebeam-like “proprietary set-top box with an Internet connection that could download movies overnight.” But instead, it decided to forge ahead with streaming — starting with a complicated “quota hours” system in 2007 and moving to unlimited streaming in 2008. By 2010, the majority of subscribers were streaming something, and the company began offering streaming-only subscriptions, though CEO Reed Hastings said that same year that the company would keep shipping DVDs until 2030. (We’ll see about that.)

ABC was the first network to sell episodes of its shows on iTunes, back in 2006, and to stream shows free with ads on ABC.com — and later on AOL. But by the time premium subscription service Hulu Plus launched in 2010, the platforms getting the attention were devices with built-in access, like Internet-enabled TVs, Blu-ray players, and tablets.

Return of the living dead

Speaking of AOL: It’s something of a miracle that the company still exists. In 2000, when it merged with Time Warner, it was valued at $350 billion, and the next year, more than 24 million people in the U.S. were paying for its Internet access service. By the end of last year, that number had dwindled to just 3.3 million subscribers. Here’s a quick recap of some of AOL’s miscues over the years:

Though AOL was once a high flier, no other company ever liked it quite enough to buy it. Google bought a five-percent, $1 billion stake in AOL in 2005, leading analysts to wonder if Microsoft missed out. That resulted in a $726 million writedown in 2009. Time Warner bought back Google’s stake and finally spun off “the albatross” in December 2009.  AOL is still promising a bounceback. “The executive team expects a profitable content business by next year,” CEO Tim Armstrong said in May 2011.

Yahoo hasn’t fared much better. The company launched Yahoo Platinum in 2003; for $9.95 a month, subscribers got access to audio and videos.  The program was dead by October of that same year. It later tried a Twitter-wannabe microblogging service (“Meme…where you share everything that you find that’s interesting,”). Perhaps the smartest move Yahoo ever made was not buying AOL.

Where did these companies go wrong? In 2010, former Time Warner CEO Gerald Levin pondered that question in an interview with the New York Times . The AOL-Time Warner deal was “undone by the Internet itself,” he said. “I think it’s something that no one could have foreseen, and to this day, whether Apple is going to dominate entertainment or whether Amazon is going to dominate publishing, all the old business plans are out the window. How do you get paid for content?”

Know what’s cool? A billion dollars

In 2006, an RBC Capital analyst estimated that a certain social networking company would be worth $15 billion in a few years, based on “raw, unprecedented user/usage growth.”

Six years later, Facebook went public with a valuation of $104 billion. Too bad the analyst wasn’t talking about Facebook but about MySpace. The social networking company that Rupert Murdoch acquired for $580 million in 2005 sold for just $35 million in 2011.

Why did Facebook soar while MySpace — and other social networking services like Friendster — sank? It allowed people to build real connections using their actual personal information, and rolled out a product that was ready to scale and had good technology. Other companies realized sharing was important too — in 2005, Yahoo SVP Jeff Weiner called sharing “the next chapter of the World Wide Web” — but Facebook was able to implement it in a way that kept users coming back. The site surpassed Yahoo and AOL for “stickiness” in 2009, when Nielsen found users spending an average of four hours and thirty-nine minutes a month on Facebook.

Social has already disrupted some industries — witness the rise of Twitter and the way it has changed the way news is reported, with stories like Osama Bin Laden’s assassination breaking there first. In a sign of the importance of these emerging platforms, newspapers like the Wall Street Journal and New York Times are launching “Everywhere” initiatives to deliver news to readers where they are already hanging out.

Fast food and music don’t mix

Hard to believe it now, but there was real skepticism that iTunes’ 99-cent songs would be able to compete with peer-to-peer file-sharing services. “According to academics who’ve studied the economics of digital music distribution,” we wrote in 2003, the year iTunes launched, “the cost still seems too high to attract users of peer-to-peer file trading services.” The piece cited an economist who believed “the appropriate price of a downloaded song is 18 cents.” In fact, Real Networks dropped its song prices to $0.49 in an attempt to compete against Apple.

In the end, consumers choose selection and convenience over P2P networks. We called iTunes “a kickstart for the micropayments industry.” Was it? While Steve Jobs said in 2004 that Apple wouldn’t hit its one-year, 100 million songs downloaded goal, global digital music sales crossed $1.1 billion in 2006. In April 2008, Apple surpassed Walmart  as the largest music seller in the United States.

The company that arguably started the digital music revolution — Napster — didn’t survive. Once it no longer offered “free,” it was done, though it tried to reincarnate itself: launching a mobile music service, “Napster To Go,” with AT&T in 2004 (the one smartphone that supported it could hold up to 6 songs), partnering with Circuit City on a digital music store, getting itself acquired by Best Buy in 2008 ,and then being bought back by Rhapsody in 2011. Unfortunately, Rhapsody was already losing out to newer (and free) streaming services like Pandora and Spotify.

The partnerships with Circuit City and Best Buy, though, were probably the kiss of death. One of the big trends of the past 10 years has been brick-and-mortar retail stores’ consistent failure to compete effectively against digital-native companies. Best Buy wasn’t the only retailer to try to crack the digital-content business — and fail: Target and Sears both took a shot. And McDonald’s sold digital content over its WiFi network and even tried DVD rentals in its restaurants.

Do you like the feel of paper?

Just as digital music didn’t really take off until Apple introduced the iPod, the ebook revolution didn’t take place until the arrival of the Kindle. In paidContent’s early years, ebooks were written off as a failure in part because publishers couldn’t figure out what to do with DRM. (In 2003, “temporary electronic ink” that would disappear after a few months was floated as a possible solution.) Barnes & Noble decided to stop selling ebooks in 2003, and Yahoo stopped selling them in 2004.

Meanwhile, Amazon and Google were pushing forward. Google launched Google Print – now called Google Book Search, and still besieged by lawsuits seven years later. Amazon tested two now-defunct programs: Amazon Pages, which allowed customers to buy access to digital copies of select pages from books, and Amazon Upgrade, which bundled print books with online access to the complete work.

Customers weren’t biting. Then Amazon came out with the Kindle in 2007 for $399. Less than two years later, Amazon was selling more Kindle books than print books, and ebooks now make up over 20 percent of some big-six publishers’ sales. Barnes & Noble has had some success with its Nook e-reader and digital bookstore, but bankrupt Borders shuttered all its stores in 2011. Meanwhile, the Department of Justice suit against Apple and five big publishers for allegedly colluding to set e-book prices drags on.

Good thing Steve Jobs looked beyond ringtones

A Forbes survey back in 2002 found that “business professionals” would be willing to pay for “news content to be delivered to their cellular devices,” and some media companies tried early mobile experiments. Verizon offered a cell phone version of the Yellow Pages — which, at $19.95 per year, gained 15,000 subscribers in three months. But starting in 2004, everyone decided the future was in ringtones. A $4 billion global business by the end of the year, one company projected.

So, so many ringtones. You could buy them from Rolling Stone or from an ATM-like device called E2Go. A fall 2004 marketing campaign let you mix your own ringtones on Levi’s website. Billboard launched a top ringtones chart.

Could ringtones “prove to be a passing fad”? we wondered late in 2004. Luckily, yes — a new technology came along to shake up the mobile market. No, it wasn’t the $500 ESPN phone, but the iPhone, which came out in 2007. And by opening its platform up to third-party app developers, Apple got users ready for its next ecosystem-changing device, the iPad, in 2010.

Monetizing mobile

Advertising has always been a fuzzy business — how exactly do you measure engagement and success? Well, that’s still the big debate about advertising in the digital era.  ”If here’s anything that’s really holding back ad spending on the web, it’s the lack of good measurements,” Tim Armstrong, then Google’s VP of national sales, said in 2007.

Mobile advertising has also faced obstacles. In 2006, mobile carriers began allowing advertising despite fears of annoying customers. Customers were indeed annoyed – 79 percent of them found mobile advertising annoying, according to a 2007 Forrester study — but they could “see the potential benefits of mobile advertising and marketing to themselves,” particularly if they could get a useful special offer or coupon.

Further complicating matters for advertisers: The smartphone market is fragmented among different brands — marketers don’t want to spend the money to create different ads for Android and iOS — and there are two mobile ad universes: mobile browser and apps.

Nevertheless, mobile advertising has gained ground, crossing  $1 billion in the U.S. for the first time in 2011, according to the Internet Advertising Bureau, totaling $1.6 billion for the year.

The next opportunity is social media advertising. And once again, it will be a challenge to figure out some standardized metrics. What’s a retweet worth, anyways?

Back to where we all began

Though micropayments worked well for music when Apple launched iTunes, the path to payments for written content has been rockier. In 2004, we wrote that “micropayments today are still characterized by a large number of competing transaction types” – including direct-to-bill, merchant aggregation, prepaid accounts and direct transfer – and “each of these face the current incumbent in digital content distribution: the flat-fee subscription model.”

Eight years later, it appears that the subscription model has won out. The iPad opened the door for magazine and newspaper publishers to create new revenue selling content on that platform, but the results have been mixed. When Rupert Murdoch’s “The Daily” iPad newspaper launched in early 2011, the company called it “the model for how stories are told and consumed.” We wrote, “The bet here is that while consumers are less and less likely to reach into their pocket for a few quarters to buy a newspaper, they might not care about the 14 cents on their credit card for a copy of an e-newspaper.” A year and a half later, The Daily has over 100,000 paying subscribers — but it’s living on borrowed time and may not get through the five years its publisher has said it needs to break even.

Writing for the web, of course, has been around for awhile. At the beginning of the decade, blogging was called “nanopublishing,” and the question was how blogs could support themselves doing it. All sorts of models have arisen. For example, Gawker tried a licensing deal with Yahoo, but that relationship ended a year later. The deal “garnered way more attention than we expected, but less traffic,” Gawker CEO Nick Denton said in 2006.

Some bloggers have stayed independent and make a living from advertising (or from their day job); others write their blogs under a newspaper, website or larger magazine’s umbrella — see the Dish’s Andrew Sullivan, FiveThirtyEight’s Nate Silver, WaPo’s Ezra Klein. Or, they go to work for the Huffington Post!

Magazine companies have grappled with whether to bundle digital editions with print subscriptions or charge for them separately. Time Inc. — which first put digital editions of its magazines behind AOL’s paywall in 2003 — started out charging separately, but today Time Inc. and Condé Nast print subscribers get the digital edition free. Hearst, meanwhile, is charging separately, and it said its digital business in the U.S. became “solidly profitable” for the first time in 2011.

Could there ever be a Netflix for magazines? Time tried it for print versions with its 2008 Maghound service. It failed, due to a lack of marketing and reader interest. Magazine publishers are trying again with joint venture Next Issue Media.

Many newspaper publishers, most notably the New York Times, tried paywalls at the start of the decade and then abandoned them – only to return to the model in the past couple years.  In its most recent earnings report, the NYT said it has 454,000 digital subscribers. Is that enough to sustain the newspaper in its 21st-century transition?  Probably the best answer to that came from  Vivian Schiller. But it was in response not to the NYT’s recent digital subscriber numbers, but to the NYT’s decision in 2004 to close the paper’s first paywall, known as TimesSelect. Schiller, then the SVP and general manager of NYTimes.com, was asked whether TimesSelect had worked.  “It did work,” she said. “It’s just a matter of as compared to what.”

Birthday cake photo courtesy of Shutterstock user [Robyn Mackenzie].

TV photo courtesy of Shutterstock user [Somchai Buddha].

Zombie hand photo courtesy of Shutterstock user [lineartestpilot].

Piggybank photo courtesy of Shutterstock user [cardiae]

Fast food photo courtesy of Shutterstock user [Sergio Martinez].

Book photo courtesy of Shutterstock user [TrotzOlga].

Ringtones and apps photo courtesy of Shutterstock user [violetkaipa].

Cash register photo courtesy of Shutterstock user [titelio].

Magazines photo courtesy of Shutterstock user [bernashafo].


Researcher: Over 1 Million U.S. Cable Subscribers Cut Cord In 2011


This post is by Daniel Frankel from paidContent


Click here to view on the original site: Original Post




Cord cutting / cutting the cord

Cable and satellite TV subscription growth slowed down more than had been previously reported, and cord-cutting was a primary factor. But don’t worry about it—a revolution that will re-create the current multi-channel access paradigm is still a long way away. Those are the conclusions of research released Monday by Canadian research firm the Convergence Consulting Group.

According to the Convergence Consulting report, “The Battle for the North American Couch Potato: Bundling, TV, Internet,Telephone, Wireless,” 2.65 million American multichannel subscribers cut their cords between 2008-2011 and switched to over-the-top (OTT) services like Netflix (NSDQ: NFLX) to get their video programming. The report says that only 112,000 cable, satellite and telco TV service subscriptions were added in the U.S. last year—less than a third of the 380,000 added subscriptions that Leichtman Research Group reported last month while auditing only the top multi-channel programming services.

Regardless of whose number you use, the news isn’t great for the cable and satellite business, which from 2000-2009 added an average of around 2 million subscribers a year. Convergence Consulting believes migration of consumers to over-the-top services to is blame for this sudden drop-off and says the trend will only accelerate further in 2012. In fact, the firm projects the number of folks ditching their cable or satellite service in 2012 for OTT services to reach nearly 3.58 million.

Rather than sounding alarm bells, however, Convergence Consulting doesn’t believe these data points signal any kind of imminent threat to the multi-channel business.

“The revolution is not coming, at least not for a very long time,” Brahm Eiley, Toronto-based co-founder of the research group, told paidContent. He says that, as content providers (i.e. TV networks) continue to try to establish greater value for their movies and shows, they’ll continue to offer them through over-the-top distribution models. However, they won’t keep supplying their programming through these channels to a point at which serious degration of the traditional multi-channel access model occurs. In other words, if the cable and satellite business were to suddenly lose millions of subscribers rather than report narrow gains, Eiley doesn’t believe the major entertainment conglomerates would be as eager to sign deals with Netflix and Hulu.

He points to the $38.5 billion spent on programming carriage and re-transmission fees in 2011 by multi-channel operators compared to the $3 billion on programming spent by Apple (NSDQ: AAPL), Netflix and other OTT players.

“The leverage is clearly on the TV access side,” Eiley said. “The content providers know where their bread is buttered.”

 

 

Related


Researcher: Over 1 Million U.S. Cable Subscribers Cut Cord In 2011


This post is by Daniel Frankel from paidContent


Click here to view on the original site: Original Post




Cord cutting / cutting the cord

Cable and satellite TV subscription growth slowed down more than had been previously reported, and cord-cutting was a primary factor. But don’t worry about it—a revolution that will re-create the current multi-channel access paradigm is still a long way away. Those are the conclusions of research released Monday by Canadian research firm the Convergence Consulting Group.

According to the Convergence Consulting report, “The Battle for the North American Couch Potato: Bundling, TV, Internet,Telephone, Wireless,” 2.65 million American multichannel subscribers cut their cords between 2008-2011 and switched to over-the-top (OTT) services like Netflix (NSDQ: NFLX) to get their video programming. The report says that only 112,000 cable, satellite and telco TV service subscriptions were added in the U.S. last year—less than a third of the 380,000 added subscriptions that Leichtman Research Group reported last month while auditing only the top multi-channel programming services.

Regardless of whose number you use, the news isn’t great for the cable and satellite business, which from 2000-2009 added an average of around 2 million subscribers a year. Convergence Consulting believes migration of consumers to over-the-top services to is blame for this sudden drop-off and says the trend will only accelerate further in 2012. In fact, the firm projects the number of folks ditching their cable or satellite service in 2012 for OTT services to reach nearly 3.58 million.

Rather than sounding alarm bells, however, Convergence Consulting doesn’t believe these data points signal any kind of imminent threat to the multi-channel business.

“The revolution is not coming, at least not for a very long time,” Brahm Eiley, Toronto-based co-founder of the research group, told paidContent. He says that, as content providers (i.e. TV networks) continue to try to establish greater value for their movies and shows, they’ll continue to offer them through over-the-top distribution models. However, they won’t keep supplying their programming through these channels to a point at which serious degration of the traditional multi-channel access model occurs. In other words, if the cable and satellite business were to suddenly lose millions of subscribers rather than report narrow gains, Eiley doesn’t believe the major entertainment conglomerates would be as eager to sign deals with Netflix and Hulu.

He points to the $38.5 billion spent on programming carriage and re-transmission fees in 2011 by multi-channel operators compared to the $3 billion on programming spent by Apple (NSDQ: AAPL), Netflix and other OTT players.

“The leverage is clearly on the TV access side,” Eiley said. “The content providers know where their bread is buttered.”

 

 

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Pinterest Cofounder Reportedly Leaving Company


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Pinterest

Pinterest cofounder Paul Sciarra is leaving the company, according to startup community site Startup Grind.

Startup Grind notes that while Sciarra is listed as CEO and founder on Pinterest’s SEC filings, he’s primarily worked in a behind-the-scenes role while Ben Silbermann has served as the public face of the fast-growing company.

Sciarra’s departure was confirmed by “multiple sources inside the company,” Startup Grind says. A source familiar with the company tells paidContent that Sciarra wanted to remain CEO. I’ve requested a comment from Pinterest.


Pinterest Cofounder Reportedly Leaving Company


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Pinterest

Pinterest cofounder Paul Sciarra is leaving the company, according to startup community site Startup Grind.

Startup Grind notes that while Sciarra is listed as CEO and founder on Pinterest’s SEC filings, he’s primarily worked in a behind-the-scenes role while Ben Silbermann has served as the public face of the fast-growing company.

Sciarra’s departure was confirmed by “multiple sources inside the company,” Startup Grind says. A source familiar with the company tells paidContent that Sciarra wanted to remain CEO. I’ve requested a comment from Pinterest.


Lawsuit Says Circumstantial Evidence Enough To Prove e-Book Conspiracy


This post is by Jeff Roberts from paidContent


Click here to view on the original site: Original Post




Crime City

The plaintiffs who are accusing Apple (NSDQ: AAPL) and publishers of fixing e-book prices say they don’t have to show an actual meeting took place. Instead, they say, indirect evidence like price jumps and a common motive are enough to establish an antitrust conspiracy.

The claims, set out in a new court filing, coincide with reports this weekend that the Justice Department is nearing a settlement in the e-book dispute.

The two-headed legal brouhaha is part of a long-running flap over publishers’ adoption of so-called agency pricing in 2010. Under this model, publishers set the price and retailers like Apple or Amazon take a commission.

So far, the plaintiffs haven’t been able to show hard evidence of a conspiracy—such as Apple and the publishing executives chomping cigars while poring over pricing charts.

But in the new filing, the plaintiffs say a 1939 Supreme Court case means that indirect evidence of price jumps and other “plus factors” is enough to establish a conspiracy. The case involved eight movie distributors found guilty of fixing screen prices.

In the e-book case, the new filing points to circumstantial evidence like:

  • A series of four deals in twelve days between Apple and the publishers

  • A trade association meeting at which senior executives from Hachette and Macmillan were seen together in a hotel bar

  • Similar terms in the contracts between Apple and the five publishers

An agreement among competitors to set prices is “horizontal price fixing” and an automatic violation of the Sherman Act.

The publishers have argued that there was no conspiracy and that they adopted the agency model independently because it made business sense. At the time, Amazon was selling e-books at below market prices; publishers feared the practice would train consumers to expect unviable prices.

The new filing also revisits Apple’s role in the alleged conspiracy. The iPad maker has pushed back against the antitrust claims by pointing out that, at the time, it had no power in an e-book market that was 90 percent dominated by Amazon (NSDQ: AMZN). Apple’s lawyers have also said that plaintiffs have “mischaracterized” comments by Steve Jobs about his relationship with the publishers.

In response to Apple’s defense, the plaintiffs said the company had a motive to be the hub of a conspiracy because:

The “situation that existed” was that Apple was late to the eBook market, Amazon had a very large installed user base, a strong appetite for discount eBook pricing, and Apple wanted to knock out a reason to buy a Kindle versus an iPad – the price of eBooks.  The scheme protected Apple from price competition from other retailers and increased Apple’s revenue per eBook unit sold compared to the wholesale model.

Finally, the filing recasts Barnes & Noble’s role in the affair. In a January complaint, the plaintiffs had implied that the bookseller may have supported the conspiracy because it wanted to protect the price of its hardcover books.

Now, the plaintiffs call attention to the fact that Barnes & Noble (NYSE: BKS) launched its Nook reader months before the iPad and that the publishers didn’t change their pricing system in response—the point appears to be that only Apple was big enough to broker a conspiracy. The new filing also repeatedly mentions reports that a Barnes & Noble executive has been deposed by the Justice Department. Earlier court filings stated that a publishing executive had tipped a law firm about the alleged conspiracy—it’s not known if that executive was from Barnes & Nobel.

If the reports of an impending Justice Department settlement are true, this would strengthen the hand of the class action plaintiffs and likely force a civil settlement. Under such settlements, lawyers typically pocket 25 percent of the payout while the rest is distributed in small amounts to consumers who claim it.

The e-book investigation is also before the European Commission and various state Attorneys General. The matter appears poised to come to a head in the next month.

eBooks Opposition to Dismiss Copy

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Magazine Publishers Start To Coalesce Around Better Digital Metrics


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




O, The Oprah Magazine from Hearst Magazines

Hearst is following Conde Nast’s lead and will start releasing metrics on its paid iPad editions, the company announced today. Separately, the Association of Magazine Media has released a new set of guidelines for digital metrics.

Hearst, which charges separately for its magazines’ digital editions instead of bundling them with print subscriptions, will immediately begin disclosing to advertisers the total number of paid iPad editions sold each month. “As soon as possible,” it will share further data about “total time spent per reader per issue and average number of sessions per issue.”

For now, Hearst is only releasing digital data about the iPad editions of its magazines, not about other digital editions sold on platforms like Kindle and Nook. Meanwhile, Condé Nast is providing advertisers with data for iPad, Kindle and Nook editions.

In a separate announcement today, the Association of Magazine Media (MPA) released a new set of “voluntary guidelines to drive growth of advertising on tablets.” To start, the MPA recommends that magazine publishers release five metrics:

1. Total consumer paid digital issues
2. The total number of tablet readers per issue
3. The total number of sessions per issue
4. The total time spent per reader per issue
5. The average number of sessions per reader per issue

The MPA recommends that those metrics be released 10 weeks after the newsstand on-sale date for monthlies and seven weeks for weeklies. “Our research tells us that magazine readers continue to engage with their tablet issues as long as a month or more after the on-sale date of the publication and we need data that reflect this engagement,” said MPA president Nina Link.

Hearst, Condé Nast and the MPA’s moves come ahead of expected changes to the Audit Bureau of Circulations’ reporting format for digital editions. If the new standards are approved in a vote this summer, large consumer magazine publishers will be required to break down digital magazine subscriptions and single-copy sales by platform starting in July 2013.

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Securities Analytics Firm Data Explorers Acquired By Markit


This post is by Robert Andrews from paidContent


Click here to view on the original site: Original Post




Wall Street Bull

Data Explorers, an analytics and analysis firm which helps subscribers track short-selling in stocks, is the latest acquisition of financial data vendor Markit.

No deal terms were announced. It’s understood Data Explorers owner Bowmark Capital had been looking to sell the firm for the last year.

The company claims to track more than 85 percent of global securities transactions.

Markit wants to inject Data Explorers’ services in to its own, including adding new services for exchange securities, dividend forecasting and quantitative research.

London-based Data Explorers says it quadrupled revenue and tripled profitability over the last four years with global expansion.

UK Companies House data shows 2009/10 annual operating profit for Data Explorers Limited, one of the firm’s companies, down 65 percent on 46 percent lower revenue.

Market also acquired Wall Street On Demand, which provides visualisations for financial data, in 2010.


Securities Analytics Firm Data Explorers Acquired By Markit


This post is by Robert Andrews from paidContent


Click here to view on the original site: Original Post




Wall Street Bull

Data Explorers, an analytics and analysis firm which helps subscribers track short-selling in stocks, is the latest acquisition of financial data vendor Markit.

No deal terms were announced. It’s understood Data Explorers owner Bowmark Capital had been looking to sell the firm for the last year.

The company claims to track more than 85 percent of global securities transactions.

Markit wants to inject Data Explorers’ services in to its own, including adding new services for exchange securities, dividend forecasting and quantitative research.

London-based Data Explorers says it quadrupled revenue and tripled profitability over the last four years with global expansion.

UK Companies House data shows 2009/10 annual operating profit for Data Explorers Limited, one of the firm’s companies, down 65 percent on 46 percent lower revenue.

Market also acquired Wall Street On Demand, which provides visualisations for financial data, in 2010.


Orange Fancies Itself As GetGlue, Miso Social TV Rival


This post is by Robert Andrews from paidContent


Click here to view on the original site: Original Post




Family Watching TV

Orange is having a run at the nascent second-screen social-TV space already occupied by the likes of GetGlue, Miso, Zeebox and Intonow.

It is bringing TVCheck, its smartphone app for checking in to TV shows, from France to the UK.

TVCheck asks users to point their phone’s camera at TV screens to identify shows by cloud-based signal processing, so they can share their viewing habit to social networks and interact with shows on the phone.

The app has garnered nearly 100,000 downloads since release in France last year, Orange business development director David Nahmani told paidContent, declining to disclose remaining active users.

In France, Orange has both a popular IPTV service and a mobile network to which it could have allied TVCheck but hasn’t. Neither will the app be bundled with Orange UK handsets, Nahmani said.

The idea is to ensure all comers can use it. To that end, it will be available to non-Orange customers through both iOS and Android. But, minus, the carriage that Orange’s services could have given it, TVCheck may be challenged to compete with GetGlue and Zeebox in particular.

Nahmani told paidContent TVCheck’s USPs over rivals are in-buit gamification, simplicity and show recommendation features. The app can recognise TV ads so the door is open to potential commercial tie-ups - just as Zeebox recently launched - Nahmani added, but Orange wants to try gathering a user base before committing to a revenue plan.

“We can imagine premium=access content, premium voting, advertising - but all those activities will come later,” Nahmani said.

He is trying to strike partnerships with broadcasters which he hopes might want to include interactive features relating to their shows in the app - again, just like some others apps are doing.


Current Unplugs Keith Olbermann


This post is by Staci D. Kramer from paidContent


Click here to view on the original site: Original Post




Keith Olbermann

Maybe Keith Olbermann should have given more thought to setting up his own outlet following his departure from MSNBC (NSDQ: CMCSA) last year. The lightning rod of an anchor was supposed to give Current.TV a jolt of viewership and energy. Instead, he’s out of the Al Gore-Joel Hyatt network after less than a year on the air—and a lot of wasted energy all around.

In a joint message featured on the front page of Current.com, Gore, the network’s chairman, and Hyatt, who took over again as CEO in recent months, tell viewers:

We created Current to give voice to those Americans who refuse to rely on corporate-controlled media and are seeking an authentic progressive outlet. We are more committed to those goals today than ever before.

Current was also founded on the values of respect, openness, collegiality, and loyalty to our viewers. Unfortunately these values are no longer reflected in our relationship with Keith Olbermann and we have ended it. 

We are moving ahead by honoring Current’s values. Current has a fundamental obligation to deliver news programming with a progressive perspective that our viewers can count on being available daily—especially now, during the presidential election campaign. Current exists because our audience desires the kind of perspective, insight and commentary that is not easily found elsewhere in this time of big media consolidation.

They also introduced his replacement, former New York Gov. Eliott Spitzer, and went on at length about the wonders of an election-year Current sans Olbermann. (Safe to say, after his performance with Sean Parker at SxSW, the former VP won’t be doing his own interview show any time soon.) What they don’t really address is their own role in a hiring that seemed like a stretch when you got beyond Olbermann’s liberal status and his following.

Olbermann’s reply via Twitter was swift, a series of 11 tweets summed up in one long statement promising legal action:

I’d like to apologize to my viewers and my staff for the failure of Current TV.

Editorially, Countdown had never been better. But for more than a year I have been imploring Al Gore and Joel Hyatt to resolve our issues internally, while I’ve been not publicizing my complaints, and keeping the show alive for the sake of its loyal viewers and even more loyal staff. Nevertheless, Mr. Gore and Mr. Hyatt, instead of abiding by their promises and obligations and investing in a quality news program, finally thought it was more economical to try to get out of my contract.

It goes almost without saying that the claims against me implied in Current’s statement are untrue and will be proved so in the legal actions I will be filing against them presently. To understand Mr. Hyatt’s ‘values of respect, openness, collegiality and loyalty,’ I encourage you to read of a previous occasion Mr. Hyatt found himself in court for having unjustly fired an employee. That employee’s name was Clarence B. Cain. http://nyti.ms/HueZsa

In due course, the truth of the ethics of Mr. Gore and Mr. Hyatt will come out. For now, it is important only to again acknowledge that joining them was a sincere and well-intentioned gesture on my part, but in retrospect a foolish one. That lack of judgment is mine and mine alone, and I apologize again for it.

Olbermann and Hyatt gave every appearance of a meeting of the minds when I interviewed them together at paidContent 2011. They were still in a honeymoon phase and Olbermann, who stayed off video for several months between MSNBC and Current, was months away from launching his show. That show involved rebuilding studios, hiring a New York staff and more. 

It was an attention-getting move that caused some to think again about Current and certainly hiring Olbermann put the network, which has yet to have its real break through, in the spotlight. But it also put it on the hot seat. Building a network on ideals, worth a shot. Hinging it on one volatile personality, not so much. Olbermann is right when he points to a resume that show how long he’s worked with some people and when he challenges his labeling as peripatetic. He’s also charming, amusing, incredibly bright, knows his baseball, reads James Thurber stories out loud, and has seen the Book of Mormon an unfair number of times.

But he’s also had a series of confrontations and missteps that often make the story more about him, than about any network or its goals.

Al Gore and Joel Hyatt knew that when they courted him. Whatever the reasons for the ultimate split—and I doubt it’s as one-sided as either party wants it to appear—they had to know honeymoons end.

As for Olbermann, he may miss cable networks for a while but he always has the Net.

Olbermann and Hyatt spoke at our paidContent 2011 conference, where they explained how Olbermann joining Current was a match made in heaven.


Thanks To E-Books, Publishers Find Flat Is The New Up


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Bookstore Front

Large book publishers’ most recent earnings reports reflect a new normal: Revenues are roughly flat, but profits are up—in large part due to e-books.

In the 2011 Bertelsmann annual report released this week, Random House said it has nearly 40,000 titles available as e-books worldwide, and while revenues were down for the year, “operating EBIT was higher year on year, especially in the United States. This rise was helped by continued cost-cutting measures and lower return rates in North America and the United Kingdom due to increased e-book sales.”

Similarly, Pearson’s 2011 annual report shows that Penguin’s sales are roughly flat, while adjusted operating profit rose by 5 percent, again due in part to e-book sales. “Penguin saw e-book revenues in 2011 double on the previous year,” the report says. “In 2011 they accounted for 12% of Penguin revenues worldwide and more than 20% in the US. Since 2008, digital downloads of apps and ebooks across Penguin have totalled approximately 50 million.”

And CBS’s most recent earnings report shows Simon & Schuster (NYSE: CBS) revenues down by 1 percent for full-year 2011, while “publishing adjusted OIBDA for 2011 rose 28% to $92 million from $72 million for the prior year, reflecting lower direct operating costs” due in part to “the decline in expenses resulting from an increase in more profitable digital sales as a percentage of total revenues.”

In other words, e-books are generally more profitable than print books for publishers. In 2012, I hope to see that reflected in higher e-book royalties for authors.

Our updated Publishers’ Digital Revenue chart is below.


DirecTV Aims To Double Latin American Revenue To $10B In 5 Years


This post is by Daniel Frankel from paidContent


Click here to view on the original site: Original Post




Directv Logo

Faced with a maturing market for satellite TV services in the U.S., DirecTV (NYSE: DTV) is pinning its future growth needs on the Latin American market. And on its Latin America Investor Day Thursday, the company outlined an ambitious agenda for doubling revenue in the region to more than $10 billion by 2017.

The company owns 100 percent of DirecTV Pan Americana, an operation with 4.1 million subscribers covering the West Coast of South America and including such countries as Columbia, Argentina, Venezuela, Chile and Ecuador. It’s a 93 percent stakeholder in SKY Brasil, which touts 3.8 million subscribers. And it owns 41 percent of SKY Mexico, which has another 4 million subscribers.

Bringing $5.1 billion in revenue in 2011, the entire Latin American region represents only a small portion of DirecTV’s $27.2 billion in total income, with the U.S. still supplying the lion’s share at $21.9 billion. But the LatAm revenue stream is growing, nearly doubling from $2.9 billion in 2009. Meanwhile, DirecTV added 590 million Latin American subscribers in the fourth quarter alone.

DirecTV’s infiltration into the region has provided enough of a model for other U.S. media companies that Netflix (NSDQ: NFLX) signaled it out as its poster child for its own expansion into the region during its fourth-quarter earnings report.

El Segundo, Calif.-based DirecTV sees key growth advantages in Latin America:

For one, the region does not have a lot of entrenched competition from technologically savvy cable companies, and DirecTV has an opportunity to be an industry leader in a pay TV industry that has room for development. In Brazil, for example, penetration of cable, satellite and telco TV is only around 22 percent. But with per-capita income rising—it was up 2 percent last year—the company projects the level of pay TV usage in the country to jump to 35 percent by 2015.

Another factor: Latin America also lacks what DirecTV officials call “programming choke points.” These include expensive carriage fees for regional sports channels, since many of region’s popular sporting events are on free-to-air television. The area is also free of broadcast network re-transmission negotiations.

Related


Amazon Frustrates With ‘Suspension’ Of Kindle Newspaper Additions


This post is by Robert Andrews from paidContent


Click here to view on the original site: Original Post




Kindle app Guardian

Amazon (NSDQ: AMZN) is denying a frustrated publisher’s claim that it has indefinitely stopped adding any more newspapers and magazines to its Kindle store around the world.

“Completely out of the blue, Amazon have told us they have decided to stop publishing any new newspapers on the Kindle indefinitely, worldwide,” says Gannett’s Herald & Times Group of Scotland, which was awaiting approval for its Kindle edition.

The Herald & Times says Amazon has suspended its approval of black-and-white editions submitted by publishers while it works through a backlog of submitted titles and reprioritises resources - a closure that is supposedly not permanent but which may be long-term.

But Amazon tells paidContent: “That’s not true—we are accepting newspapers on Kindle.

“However, we are not always able to immediately launch every publisher who contacts us using our more heavyweight integration method. For publishers that want to add their newspaper onto Kindle in self-service fashion, they can also do so via the Amazon Appstore for Android.”

Herald & Times Group, which publishes the Glasgow Herald, Sunday Herald, Evening Times and integrated HeraldScotland.com, submitted its edition two months ago and had since progressively tweaked it to Amazon’s requests. It is frustrated that, despite this back-and-forth, it received notice the edition will now not go live.

The Newspapers section of the Kindle Store currently carries nearly 200 newspapers.

Many publishers have come to operate a strategy of availability on multiple devices. Across those devices, Kindle is low in publishers’ priority list compared with iPad, but important compared with other platforms.

Somewhere between Herald & Times Group’s claim and Amazon’s statement may lay the truth. It sounds as though Amazon is facing some issues managing an influx of Kindle newspaper and magazines that include both content feeds and digital replicas. And publishers who want their papers to be available for sale immediately may have to publish them as colour Kindle Fire tablet editions for now.

Publishers have also become well used to dealing with Apple’s back-and-forth app approval process.


Will Hachette Be The First Big-6 Publisher To Drop DRM On E-Books?


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Speed bump

DRM is just “a speedbump,” Hachette’s Maja Thomas said at a copyright conference this afternoon. However, opinion within Hachette is clearly divided.

DRM “doesn’t stop anyone from pirating,” Hachette SVP digital Thomas said in a publishing panel at Copyright Clearance Center’s OnCopyright 2012. “It just makes it more difficult, and anyone who wants a free copy of any of our books can go online now and get one.

“There’s a misconception that somehow the digital format of books has made piracy increase, or become logarithmically more serious. But piracy was always very easy to do, because scanning a physical copy of a book [takes] a matter of minutes. A physical book doesn’t have DRM on it.

“Coming from the audio business, where I started, we had DRM on our audiobooks when music had DRM on it, and as that changed, a lot of audio publishers started to drop the DRM on their audiobooks. We were one of the last ones to drop it, and I was asked to monitor the destruction of my business. The business was not destroyed. If anything, it became more robust.

“You could argue that taking the DRM off e-books would be in the benefit of consumers, and possibly even publishers, because then you wouldn’t have the device lock-in you have now.

“We saw that with Pottermore this week, [watermarking and] moving a file onto eight different platforms easily. [More about Harry Potter DRM here, here and here.] That’s certainly revolutionary.”

However, Thomas’s view does not align with that expressed by Hachette UK CEO Tim Hely Hutchinson in a letter to authors and agents this week. He wrote:

DRM (Digital Rights Management encryption, on which we insist) divides opinion. Our view is that the advantages greatly outweigh any perceived disadvantages. While DRM cannot prevent file-sharing by the most determined pirates it can and does act as a brake on the casual sharing of files and, in the overwhelming majority of cases, it works in the background without causing problems for anyone.

Related


Will Hachette Be The First Big-6 Publisher To Drop DRM On E-Books?


This post is by Laura Hazard Owen from paidContent


Click here to view on the original site: Original Post




Speed bump

DRM is just “a speedbump,” Hachette’s Maja Thomas said at a copyright conference this afternoon. However, opinion within Hachette is clearly divided.

DRM “doesn’t stop anyone from pirating,” Hachette SVP digital Thomas said in a publishing panel at Copyright Clearance Center’s OnCopyright 2012. “It just makes it more difficult, and anyone who wants a free copy of any of our books can go online now and get one.

“There’s a misconception that somehow the digital format of books has made piracy increase, or become logarithmically more serious. But piracy was always very easy to do, because scanning a physical copy of a book [takes] a matter of minutes. A physical book doesn’t have DRM on it.

“Coming from the audio business, where I started, we had DRM on our audiobooks when music had DRM on it, and as that changed, a lot of audio publishers started to drop the DRM on their audiobooks. We were one of the last ones to drop it, and I was asked to monitor the destruction of my business. The business was not destroyed. If anything, it became more robust.

“You could argue that taking the DRM off e-books would be in the benefit of consumers, and possibly even publishers, because then you wouldn’t have the device lock-in you have now.

“We saw that with Pottermore this week, [watermarking and] moving a file onto eight different platforms easily. [More about Harry Potter DRM here, here and here.] That’s certainly revolutionary.”

However, Thomas’s view does not align with that expressed by Hachette UK CEO Tim Hely Hutchinson in a letter to authors and agents this week. He wrote:

DRM (Digital Rights Management encryption, on which we insist) divides opinion. Our view is that the advantages greatly outweigh any perceived disadvantages. While DRM cannot prevent file-sharing by the most determined pirates it can and does act as a brake on the casual sharing of files and, in the overwhelming majority of cases, it works in the background without causing problems for anyone.

Related


Paywall Promos: How Far Should Newspapers Open The Door?


This post is by Jeff Roberts from paidContent


Click here to view on the original site: Original Post




Great Wall Of China

As newspapers lock content behind paywalls, marketers are opening that same content right back up again through campaigns that provide readers with temporary access for free. The idea seems a good one but newspapers are still experimenting with when and how to do it.

On Thursday, for instance, the Wall Street Journal (NSDQ: NWS) launched a Jaguar-sponsored “Digital Open House” to provide free website and mobile access to the paper’s premium content. The 24-hour campaign, which gives prominent place to Jaguar ads, follows similar sponsorships last year by Sprint (NYSE: S), Citi and Acura.

The Journal’s main rival, the New York Times (NYSE: NYT), has yet to pursue a paper-wide strategy. Instead the Times has been parceling out smaller windows of free content on a section and platform basis.

In September, for instance, Ralph Lauren paid to make the entire New York Times’ fashion and lifestyle sections available for free on the iPad. The paper has also offered similar vertical-based promotions with a credit card firm and an upscale auto brand. Spokesperson Eileen Murphy said more such promotions would occur in the coming year.

Last year, the Times also ran a promotion in which car-maker Lincoln paid to subsidize subscriptions for 100,000 especially-engaged readers.

As paywalls become more commonplace, a debate may soon emerge about whether it is better to let advertisers pay to unlock the whole site for a period of time or only select pieces of it.

For advertisers, the Times’ approach promises a more granular audience but it may also lack the buzz that comes with an across-the-site sponsorship like the one the Journal offered Jaguar. Raising the entire paywall also offers a chance for the car company, which is in the first day of a new campaign, to maximize its ad exposure.

As for the newspapers, the lift-the-paywall gimmicks may produce higher page views and the potential for pulling in new subscribers. But the real value probably lies in ad money from the sponsorship themselves.

Going forward, the news sites will likely have to decide how far they can push the promotions (might we one day see “paywall free Tuesdays” or Open House Fridays?) without offending paying subscribers.

(Correction: An earlier version of this story incorrectly said the New York Times’ credit card and auto promotions were upcoming. They have already occurred and other promotions are upcoming. We regret the error)

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