Despite early concerns, it turns out music streaming services may actually be a great source of revenue for labels, if Warner Music Group is any indication. The company brought in about $54 million from streaming services in the second quarter, reports AllThingsD.
Streaming services such as Spotify, Rhapsody, Pandora and others made up 25 percent of Warner’s digital revenue in Q2, amounting to around 8 percent of the label’s total revenue for that period.
For these purposes, Warner defines its “streaming” revenue as money earned from subscription services (Spotify, Rhapsody) and Web radio (Pandora, Sirius, Clear Channel). Warner does not include cloud/locker services (Apple, Amazon), but does include YouTube.
“What’s more encouraging for Warner — and, presumably, the rest of the big labels — is that streaming revenue is growing quickly, but doesn’t seem to be cutting into traditional digital sales from outlets like iTunes,” the article states.
Another positive sign for the music industry: According to Warner, the jump in digital sales was larger than the loss in physical sales. “That’s the goal the industry has been aiming for since the late 1990s,” notes AllThingsD.
Retail sales of physical video games dropped 29 percent in June. Digital sales, however, rose 17 percent in Q2 from a year ago.
“Traditional boxed retail sales of video games have been down throughout 2012, including a 29 percent dip in sales in June 2012 with $699.8 million generated, according to The NPD Group. But a new report from that research firm… shows new revenue streams are bolstering revenue for retailers and game makers alike,” notes The Hollywood Reporter.
Despite the promising digital growth, U.S. consumer gaming spending dropped 16 percent in the second quarter with the lagging demand for physical software and hardware.
“In addition to the $1 billion spent in the U.S. by consumers on new physical video games and PC games in the second quarter of 2012 (April-June), the total consumer spend on other physical forms of content (used and rental) reached $386 million, and content in digital format (full game and add-on content downloads, subscriptions, mobile games and social network games) generated $1.47 billion,” explains THR.
“In the second quarter of this year, sales of content in a digital format have grown 17 percent over Q2 2011,” said analyst Anita Frazier of The NPD Group. “While this growth is in stark contrast to the declines in new physical software and hardware sales, the size of digital sales is not quite large enough to offset these declines, leading to an overall drop in consumer spending in Q2 by 16 percent.”
Research in the UK, France and Germany indicates a similar trend; however, it “differed from the U.S. in terms of softer mobile spending, but greater stability in rental trends,” notes the report. “Growth in full-game and add-on content downloads in the second quarter is surprisingly similar as the content behind this increase is suitable to both markets.”
From the second quarter of 2010 to the second quarter of 2012, high-definition advertising has risen 150 percent.
Additionally, more than 70 percent of all American homes have an HDTV set and 69 percent of all TV outlets are able to receive and air HD ads, according to a new report from video ad distribution and services provider Extreme Reach Inc.
Even so, HD advertisements still only account for 25 percent of all ads.
“Local broadcasters also continued lag in both viewer adoption and the rest of the U.S. industry, with only 53 percent of local stations being able to accept and air HD ads, much lower than local cable (74 percent), network broadcast (73 percent) and national cable (76 percent),” reports Broadcasting & Cable.
The “Q2 2012 HD Advertising Trends Report” found that political ads created a strong push for HD adoption and that cloud computing has significantly impacted the HD expansion.
“By taking advantage of advanced cloud-based solutions, advertisers have been able to leverage higher performance/lower cost workflows, and those efficiencies have helped fuel the rapid growth in HD advertising,” says Dan Brackett, chief technology officer of Extreme Reach.
Reports from Strategy Analytics and Piper Jaffray indicate nearly half of Americans and iPhone users would buy an Apple television soon after its release.
But beyond the innovative design and simple user interface Apple is known for, the Apple television could very well reinvent how TV is distributed while essentially replacing gaming consoles and computers.
The Olympics has shown the power of social media on viewing as people choose which events to watch based on trending topics. It has also demonstrated consumers’ frustration with the current TV model, like being forced to watch time-delayed NBC coverage.
The Apple television could be the answer to these issues by incorporating multiple windows for social media tracking while also providing more content than just traditional broadcasting.
Many have speculated the TV “would carry channel content through conventional broadcasting, via iTunes and also through individual apps from broadcasters, which raises interesting opportunities,” reports Computerworld.
Companies like the BBC could then provide free apps with some free content and a wider catalog available to monthly subscribers — allowing Americans to access content from networks outside the U.S., such as real-time Olympics.
And from there, the Apple television could completely transfigure how people interact with their TVs — with iPhone or iPad remotes featuring Siri voice navigation — and what they use them for.
“Gaming is an obvious extra string to the bow. In theory any iOS app should be usable on the television. This would devour the console market,” the post suggests. “Image editing seems possible, as does full Web surfing (existing Web surfing on smart televisions remains an unsatisfying experience); email and social media communications; note-taking; FaceTime conversations; time-shifting of broadcast content.”
Huawei is a private $32 billion business that supplies 140 countries with inexpensive telecom equipment, recently outpacing Sweden’s Ericsson for the “world’s largest telecom equipment maker” title.
For some, its success ignites fear. “Westerners fret that the networks the firm is building are used by Chinese spooks to eavesdrop during peacetime and could be shut down suddenly during wartime,” reports The Economist. “They see the firm as a potent weapon in China’s burgeoning cyber-arsenal.”
“Western governments are also suspicious of the subsidies, low-interest loans and generous export credits lavished on favored champions, including Huawei,” the article continues.
The Economist validates some concerns of telecom security, noting Huawei’s position is ideal for sneaking malware in and sensitive data out through its networks. The article also notes reports of Chinese state-sponsored hackers who have targeted Western commercial secrets.
However, the article warns against blocking Huawei and imports, which could hurt competition and growth. Also, most telecom equipment comes from China today.
“The answer is to insist on greater scrutiny all round, not just of Chinese firms,” the article suggests. “Governments should be crystal clear about what conditions telecoms firms need to meet to win business — something America’s secretive security-review process does not do today. They should also do more to ensure that equipment is secure, no matter who makes it.”
“Such scrutiny will drive up costs, but these pale in comparison with those imposed by bans on Chinese firms, which diminish competition and push up prices,” the article states, adding that Huawei could also reduce worries with improved openness.
Google is releasing an update to its built-in YouTube Video Editor this week, possibly making video production as simple and fun as editing pictures on Instagram.
“The user interface has been redesigned, removing some of the clutter from the previous version, and the many Instagram-style filters can now easily be seen during the editing process,” reports The Verge. “Changes are also easier to make on the fly, with the help of real-time, interactive previews. Combined with the service’s improved audio editing options, YouTube’s Video Editor is shaping up to be a rather resourceful tool for quickly cleaning up footage.”
In a related TechCrunch post, ReelSurfer launched in public beta this week. The Menlo Park-based start-up from Christian Yang and Neil Joglekar allows users to clip and share video content from any website.
“ReelSurfer set out to solve the problem of finding the right video clips online, which, using YouTube as an example, can often be a fool’s errand,” explains the post. “So the co-founders developed technology to convert long-form video into 30-second clips, allowing users to then save, share and buy that content.”
As part of the beta launch, ReelSurfer is offering built-in clip commenting and advanced profiles so users can link reel collections to a central page.
“This start-up is a complement to my ‘hyper-personalized offer’ project,” notes ETCentric staffer Phil Lelyveld. “It is also an opportunity for the entertainment industry to either negotiate new revenue streams or repeat the mistakes of the past.”
Google is rolling out its “smart” recognition program Knowledge Graph for improved search results. The Graph will include location-aware searching as well as more accurate results for wider search queries, like “famous graffiti artists,” CNET explains.
“The Knowledge Graph results will appear to the right of the traditional search results, but when clicked they’ll appear across the top,” the article states. “Visual components of the results, such as pictures, will appear as a horizontal scroll bar for easy navigation.”
Another update brings Gmail to Graph search results for U.S. users who opt-in. To find a certain email, just type “Gmail” and whatever the message pertains to.
“However, you’ll also be able to use more natural queries to bring up the e-mails you want to see. Type in ‘My Flights,’ and your upcoming flight itinerary will appear, complete with confirmation number and flight information such as number, time, and seat number,” CNET writes. “The feature will also leverage the Knowledge Graph so that a real-time update of the flight status appears, a quick way to check whether your flight has been delayed.”
The Google Search iOS app will also be updated in the next few days to include voice searches.
Calendar and Drive are expected to be integrated into Knowledge Graph search eventually, bringing all your personal data into the same sphere of global results — something privacy advocates are likely to dispute.
“If we are to build the future of search, we have to solve the hard scientific problems of speech recognition and natural language understanding,” says Amit Singhal, senior vice president for Engineering Search at Google. “We will have to build artificial intelligence. We’re not there yet, but we’re taking baby steps today.”
Amazon has released “Living Classics” for Facebook. It is the company’s first “moving object” game on the social network and represents another foray into the mobile gaming market.
In the game, players control a family of foxes as it ventures through fairy tales like “Alice in Wonderland” and “The Wizard of Oz.”
Amazon continues to expand into mobile gaming with its new gaming options — such as tracking achievements, accessing leaderboards and syncing devices — offered through GameCircle for the Kindle Fire.
“In addition to debuting the above-mentioned Facebook app, the Seattle-based retailer took the opportunity to introduce its newly minted Game Studios, which Amazon says will focus on creating innovative, fun and well-crafted titles,” TG Daily reports.
“Amazon’s decision to debut GameCircle and ‘Living Classics’ at this juncture is likely anything but arbitrary,” notes the post, “as the Seattle-based corporation is reportedly prepping at least three new Fire devices for launch later this fall. ”
Link to the post to access the “Living Classics” video trailer.
Tablet shipments are expected to outpace those of notebooks by 2016, the same year an estimated 350 million smartphones will be used in the work place. In response, corporate America is starting to reorganize to meet the demands of new technology.
“Companies will soon be spending upwards of $1.3 trillion annually to equip employees with mobile devices and apps, according to Forrester Research,” reports Fortune.
Already, research shows 41 percent of companies accommodate the use of individually purchased tablets. Another 30 percent of companies even have sanctioned programs for partial deployment.
In the future, Fortune expects to see six new tech adaptations become commonplace: 1) projectors with tablet-friendly VGA adapters; 2) more robust Wi-Fi networks to combat cellular dead zones; 3) wireless printing from Web-connected printers; 4) desks outfitted with docking stations and mounts for mobile devices; 5) mobile shops for troubleshooting, which reinvent the IT experience; and 6) a chief mobility officer who manages the expansion of mobile for both employees and customers.
“It certainly seems that the industry as a whole is in a slump,” IHS iSuppli analyst Craig Stice says of the PC market. The bad economy paired with the growth of tablets has created a very weak demand for new PCs.
“Market research firm IDC reported that PC shipments totaled 86.7 million units last quarter, down 0.1 percent from the year earlier period. This was far below IDC’s projection of 2.1 percent growth,” reports Fortune. “Gartner also reported the decline in sales, counting approximately 87.5 million units.”
“Who out there now needs a PC and doesn’t have one?” says Bob O’Donnell, vice president of clients and displays for IDC. As sales in the developed world are slowing down, PC makers are looking to promising developing markets like Brazil, “…but that isn’t enough to keep the industry in good shape,” O’Donnell continues.
“A shaky economy, meanwhile, is convincing consumers they don’t really need an upgrade,” the article states. For example, high prices probably contributed to the lackluster adoption of the highly-anticipated Ultrabooks.
Windows 8 is unlikely to be able to help the flailing PC market as it will possibly also drive up prices. Users may also hold off if the update isn’t easy.
If you count tablets as PCs, Apple has surpassed HP as the top PC vendor, selling 17 million iPads and 4 million Macs in the second quarter of 2012. While the rest of the market struggles, Apple’s prospects are still positive; “… as Apple continues to dominate in the tablet space it could see some growth with its desktops and notebooks,” Fortune concludes.
New computer software is now outsourcing menial tasks to people across the world, creating jobs in areas with dramatic unemployment.
“That software, developed by a start-up called MobileWorks, represents the latest trend in crowdsourcing: organizing foreign workers on a mass scale to do routine jobs that computers aren’t yet good at, like checking spreadsheets or reading receipts,” writes Technology Review.
MobileWorks assigns tasks using an algorithm, having multiple workers do the same jobs to ensure accuracy. While workers only get paid cents for each task (maybe a few dollars an hour), “overseas crowds have become essential to legitimate businesses,” the article states.
“The price of having MobileWorks have five people look over a receipt is cheaper than the cost of hiring a high-school student at minimum wage to do the task once,” says Jessica Mah, CEO of Web start-up inDinero.
Unfortunately, some jobs posted to MobileWorks and other crowdsourcing sites were for more nefarious purposes, like influencing search results, generating clicks on ads or proliferating spam.
MobileWorks co-founder Anand Kulkarni expressed his frustration about “spammy jobs.”
Despite setbacks, his goal is to have crowdsourcing “behave much more like an automatic resource than like individual and unreliable human beings.”
The UK Ministry of Defense recruited a group of academics to develop over-arching estimates of the financial cost of Internet crime.
The numbers are high — to no surprise — but our “extremely inefficient” efforts to control cyber crime are misplaced, according to the researchers.
“Our figures suggest that we should spend less in anticipation of cyber crime (on antivirus, firewalls, etc.) and more in response — that is, on the prosaic business of hunting down cyber criminals and throwing them in jail,” the team wrote in their report.
The full findings, linked on the Businessweek article, break down the costs in various categories. Some interesting numbers:
The money stolen via cyber crime amounts to roughly $1.997 billion, with conservative estimates. By comparison, the money spent on defense comes in at around $25.84 billion.
The most money was spent for user cleanup (when antivirus programs fail) and business security, each amounting to $10 billion.
The most successful cyber crime was the Advanced Fee Fraud, which takes about $1 billion from consumers who pay a small amount upfront or a larger fortune to be released.
Ever gotten an email from your contact, saying they’re stranded traveling abroad and need your money? That scam has accrued over $10 million.
Other defense costs include $400 million for law enforcement, $1 billion each for patching vulnerabilities and bank countermeasures, $3.4 billion on antivirus protection and $40 million on ISP cleanup.
“People renting DVDs and Blu-ray Discs through retail stores, kiosks, and Netflix’s mail service totaled more than 62 percent of all movie rentals in the first half of the year, according to NPD Group,” CNET reports. “In contrast, those renting digital movies via subscription streaming, pay TV video on demand, and Internet VOD added up to only 38 percent.”
However, the popularity of discs is waning, with rentals dropping 17 percent in the last year. Kiosks now represent 45 percent of physical rentals after video stores have faded away.
Digital movie rentals, on the other hand, have increased 5 percent so far this year.
Netflix’s Watch Instantly service played an important part in this jump, accounting for 66 percent of all digital movie rentals. “The company recently announced that it had added 530,000 U.S. streaming subscribers in the second quarter while losing 850,000 customers of its DVD service,” notes CNET.
While Netflix maintains popularity on connected devices (tablets, smart TVs), much of its content is still only available as physical rentals. Also, the streaming content lacks special features like commentary or bonus material.
So it’s not over for discs just yet. “Video streaming needs to catch up with physical rentals in both availability and options for it to truly take off in the market,” the article suggests.
According to media consultancy Attentional, 113,000 people in the UK donned their 3D glasses for the London Olympics 2012 opening ceremony. Pocket-lint takes a closer look at the number to determine whether it is good or bad news for 3D adoption.
By comparison, 27 million people watched the opening ceremony on BBC. Another way to look at it is comparing the number of 3D-enabled TVs.
Taking into account the number of people who have 3D TV sets and access to 3D content from BBC, “…just 1 in 10 people who own a 3D-ready TV watched the opening ceremony in 3D. Not great,” the article suggests.
However, there are caveats. For one, the opening ceremony could be considered a more social, group viewing experience — one inhibited by limited numbers of 3D glasses and dark viewing.
The technology does show some sign of growth: Wimbledon 2011 saw a 3D audience of 18,000, which grew to 30,000 in 2012. While it still only accounted for 0.18 percent share of overall 2012 Wimbledon viewing, the London 2012 ceremony had 0.4 percent 3D viewing.
“So the verdict?” Pocket-lint asks. “It seems 3D TV numbers are growing, but at a very slow pace, especially when you consider just how many people still prefer to watch television without glasses.”
The NBC Olympics website “has served up over 744 million page views, up from a mere 160 million during the Beijing games four years ago,” reports Wired. “The site has also streamed over 75 million video feeds to viewers around the globe, according to NBC.”
The network has faced criticism of its delayed TV coverage of the 2012 Olympic Games, but Wired suggests online coverage is now a viable alternative. “If you don’t like NBC’s TV coverage, just stick with your browser,” the article says.
NBC reports that five of the events it has live-streamed were watched by over a million online viewers.
“Hundreds of millions of users doesn’t necessarily qualify NBC for a medal in traffic management,” notes the article. “But it still deserves some praise.”
In a related post from Mashable, the popular #NBCFail trend may actually be overstated, according to a new report from Pew Research.
“According to the survey of just over a thousand adults, 76 percent of Olympic fans say say the NBC is doing an excellent (29 percent) or good (47 percent) job covering the Summer Games. Just 18 percent rate the coverage as fair (13 percent) or poor (5 percent),” notes the post.
Of the people surveyed who were following the Olympics online or via social media, 70 percent said the coverage was excellent or good. TV viewers were even more generous with 77 percent giving positive reviews.
“The Pew survey, though — coupled with strong ratings for NBC’s primetime coverage — indicates that Twitter carpers may simply be a peanut gallery the network can afford to ignore,” Mashable concludes.