Even amongst the giants of music streaming, financial situations are unstable. Both Spotify and Pandora, two streaming services with millions of users, are losing money because of music royalties, according to The New York Times.
“Pandora, which went public last summer, has never had a profitable year, and in its most recently reported quarter lost $20 million on $81 million in revenue,” writes NYT, also reporting that “Spotify’s accounts for the last year, recently filed in Luxembourg, show that it lost $57 million in 2011, despite a big increase in revenue, to $236 million.”
Pandora, which offers both free and paid services, relies most heavily on advertising for revenue, but can’t earn enough to offset its royalty costs. “Last year, Pandora paid $149 million, or 54 percent of its revenue, for ‘content acquisition,’ otherwise known as royalties,” notes the article.
Spotify was able to earn 83 percent of its revenue from subscriptions, with 4 million of its 32.8 million users paying the $5-$10 monthly fee rate.
Its royalty negotiations with labels are private, but “Spotify’s chief executive, Daniel Ek, has said that the company had paid in its history about 70 percent of its income ‘back to the industry.’ But a closer look at its recent financial statements shows that the ratio may be even higher,” reports NYT.
It’s difficult to predict what might solve the music industry’s issues, as declining sales over the past decade make it difficult to imagine record labels will lower their royalty rates. “But the graveyard of failed digital services, and the financial struggles of Pandora and Spotify show that the music industry hasn’t yet figured out the balance between licensing costs and how much money a digital service can make,” concludes the article.
Bloomberg L.P. expanded its analytics offerings with the launch of Bloomberg Sports in 2010. The service now serves 25 Major League Baseball teams, will launch a soccer-based service in the United Kingdom in September, and offers a fantasy football tool called Decision Maker 2012.
President of Bloomberg Sports Bill Squadron expects “to be within all major sports in two years, maybe three on the outside.”
The company’s most successful product to date has been its tablet application for Major League Baseball players. The application offers video of upcoming pitching opponents, including individualized videos of past performances against opponents.
The soccer application targets fanatical soccer supporters and betters in Europe. The app will use metrics, statistical comparisons, and projections to aid betters.
Squadron told Mashable that the growth of Bloomberg Sports has essentially followed his projections, and that when he formed the entity he had planned to establish a presence “in baseball especially, then build a platform that could be expanded to other sports from there.”
Created ten years ago by MLB Advanced Media, the online video service MLB.tv has since become one of the most successful video services, earning millions of dollars in revenue for its popular baseball content.
MLB.tv’s success is due in part to its devoted fans. The first game offered on the service — NY Yankees vs. Texas Rangers in 2002 — had 30,000 viewers worldwide.
“Those 30,000 fans have turned into millions of fans across the world and that little experiment is now a mega-million dollar business,” GigaOM reports. “Since its launch, the service has broadcast 1.5 billion live video streams and has accumulated a total of 3.7 million subscribers.”
The service also rose to the top by being ubiquitous. Offered on a variety of platforms and devices — from Apple TV to the Kindle Fire — MLB.tv is available to customers no matter how they access their content.
“So far in 2012, MLB.tv has seen 27.3 million mobile live video streams,” notes the post. “In the first week of 2012 baseball season, MLB saw 3 million downloads of its At Bat 2012 iPad app. At present there isn’t a professional sports league that holds a candle to MLB’s online arm.”
According to new figures from Nielsen and Kantar Media based on TV viewing data from ad targeting company Simulmedia, many U.S. TV advertising campaigns are failing to reach a “large portion of their target audiences,” reports the Financial Times.
The data shows that “in many cases as many as three-quarters of marketers’ TV ad impressions are viewed by just 20 percent of their target audiences,” notes the article.
Multi-million dollar campaigns for Axe body spray and Progressive insurance, for example, are falling far short of expectations.
Even as viewing habits are changing, “TV ad spending remains the bulk of many companies’ marketing budgets,” explains the article. In fact, U.S. advertisers are still expected to allocate 42.2 percent of their total spending to TV ads this year, a figure up from 39 percent five years ago.
While the allocations are still proving to be profitable, a change should be considered in light of those evolving viewing habits, says David Cohen, global chief media officer at Interpublic’s Universal McCann.
“When you are sitting fat and happy, there is not a lot of impetus to make a change,” he suggests. “But I am fairly certain that whether we like it or not, the horse is out of the stable.”
Analysts attribute recent cost-cuts at NBC, which included the elimination of about two dozen jobs on “The Tonight Show with Jay Leno,” to Comcast focusing on “improving the financial performance” of the network.
In an opinion piece published in Multichannel News, Gary Arlen writes that this reported 10 percent decrease in payroll for the “Tonight Show” staff (Leno reportedly took a significant salary cut to avoid further layoffs) won’t likely be detectable to the average viewer, perhaps making it a good move for Comcast.
“More significant to the TV industry as a whole — and especially to the growing stable of Comcast-owned content channels — are the implications of this cost-cutting,” suggests Arlen.
“Beyond the lavish pay scales for celebrities (both in front of and behind the camera) is a new TV economic landscape,” he writes. “Improved, and admittedly costly, technology is bringing down the price of production and making possible new kinds of appealing entertainment. (Let’s not even talk about el-cheapo reality programs.)”
This new landscape includes individuals with online video channels and hundreds or thousands or more subscribers.
“These conditions and more are paving the way for what I’ll call ‘good enough TV,'” notes Arlen. “Certainly, second-tier cable channels have survived for years on ‘adequate’ quality shows: well-produced made-for-video movies and series that would have qualified as ‘B’ films a half-century ago. They’re good enough for prime time, a launch-pad for young talent and a sinecure for past-their-prime performers.”
Google’s financial infusions into its YouTube channels, much of it designated for original programming, is a great example of the “good enough TV” ethos, writes Arlen. “Other ‘good enough’ shows take advantage of the interactive capabilities that young producers can now create on a financial shoestring.”
TV screens are becoming an increasingly popular way to consume online video — a medium that’s grown exponentially in the last three years.
According to a study by NPD, about 18 percent of 14,000 users surveyed are accessing online video on TVs on a daily basis while around 25 percent access it several times a week. Movies are driving much of that growth, reports TechCrunch.
The rise in online video viewing on TV has been made possible by televisions with built-in Internet as well as game consoles such as the Xbox and set-top boxes that link up with broadband-enabled on-demand services.
“China is coming out as the most online-video-friendly country at the moment,” notes the post. “China’s urban users beat every other country surveyed, across every device. This may be down to simple user behavior, but it’s also, NPD says, because Chinese users can access a lot more video content online than they can from domestic broadcasters and pay TV providers.”
“Online content is mostly viewed on computers or mobile devices such as tablets and smart phones, but TVs are increasingly becoming devices of choice for consumers, particularly since an increasing numbers of sets have either built-in connectivity or can be connected to the Internet via a peripheral device such as a connected Blu-ray player or set top box, among others,” said Riddhi Patel, NPD DisplaySearch research director, in a statement.
Some music services let you stream music based on mood, but how would you like to watch videos based on how you’re feeling? This is a new concept that YouTube is trying out with its Moodwall.
Featured on YouTube’s home page in random limited testing, the Moodwall shows a collection of video thumbnails for various categories including “funny,” “adorable” or “catchy.” The page offers users the option to “explore videos by vibe.”
Google gave exclusive access to various users to test out the new feature, but most feedback has been bewilderment, Mashable reports.
“My browse page in YouTube has been replaced with some weird page that calls itself Moodwall,” commented one user. “Does anybody [know] what is a Moodwall and how it can be removed?” asked another.
According to insiders, YouTube will be cutting some less successful original channels by the end of the year, continuing its effort to clean up the quality of its content.
YouTube execs will also be deciding on new projects to fund, “as it hones in one the most lucrative models,” the New York Post writes.
“The weeding out of the less-popular videos comes amid a new emphasis at YouTube on the time viewers spend on the channel — and not just how many views each channel gets,” explains the article. “YouTube is also looking to upgrade the quality of its videos and tweaked its algorithm in April to help the move.”
The added emphasis on quality and the funding of original content may have contributed to an increase in viewing. “Since January total hours watched on YouTube jumped 33 percent to 4 billion from 3 billion,” notes the article.
And as viewing goes up, so does YouTube’s advertising revenue. One Citigroup analyst anticipates the site’s revenue to increase 50 percent from 2011 to $3.6 billion.
As part of its plan to emerge from bankruptcy, Kodak is selling off more of its businesses. This time, its claim to fame, the camera-film business, is getting axed.
Within the first six months of 2013, Kodak hopes to break from bankruptcy protection, which involves paying off $660 million owed to banks.
“In addition to print film, Kodak’s businesses for sale include kiosks that develop digital photos as well as heavy-duty commercial scanners and related software used by large companies such as health-insurance firms to process thousands of forms from customers. A business that takes photos of theme park visitors for souvenirs is also up for sale,” the Wall Street Journal reports.
The article explains the businesses for sale are categorized as either “personalized imaging” or “document imaging.” The two groups make $1.3 billion and $466 million a year in revenues, respectively.
Kodak was hoping to get between $2.2 billion and $2.6 billion from selling its patent portfolio. The auction for the patents has dragged on and, according to insiders, the company will have a difficult time getting that much for its portfolio.
Kodak has already cut off other businesses to raise money, including its photo-sharing website, digital cameras, video cameras and digital picture frames. Ultimately, the company will focus on consumer businesses, primarily printing.
Facebook implemented a new technology in the messaging features on its iOS app. According to ReadWriteWeb, the new update “could have a potentially big impact on the future of the Internet of Things.”
“The technology is called Message Queuing Telemetry Transport (MQTT), an IBM-developed protocol for real-time messaging over networks with low power and bandwidth,” the post explains. “For Facebook app end-users, the immediate effect of using the push-driven protocol for the updated app won’t immediately be apparent, but it portends some potentially big features down the line.”
For the Internet of Things to become a reality, devices needs to seamlessly communicate with each other and users.
“Messaging in the Internet of Things sector is still gelling around one standard implementation, as device manufacturers figure out how to get sensors and other micro-devices to best communicate with the Internet and from there the rest of the world. MQTT is one such protocol,” suggests ReadWriteWeb.
Being adopted by Facebook could be the first step in MMQT becoming the standard.
Is the freemium strategy too costly for some businesses? According to the Wall Street Journal, giving away products for free to build a user base “is turning out to be a costly trap, leaving them with higher operating costs and thousands of freeloaders.”
While selling advertising was once the most common way for a digital start-up to make money, the freemium model has taken off as companies like Dropbox, LinkedIn and Skype have implemented it successfully.
“The freemium approach doesn’t make sense for any business that can’t eventually reach millions of users,” explains the article. “Typically only 1 percent or 2 percent of users will upgrade to a paid product, said David Cohen, founder and CEO of TechStars.”
“The strategy also often isn’t effective for businesses whose range of products is limited in scope, because paid users generally expect to get better or different versions of what they’ve already received free of charge,” notes WSJ. “And it rarely makes sense for companies that sell products or services mostly to large businesses. Enterprise clients typically have budgets for buying goods and services, thus, they aren’t as drawn to free products.”
Yet the reach of the freemium model is expanding. “About 77 percent of the top 100 grossing mobile apps inApple Inc.’s App Store use a freemium pricing plan, up from just 4 percent in 2010, according to Velti PLC, a mobile advertising and marketing company,” says the article.
“Awareness has been spreading among individuals, businesses and other organizations that DRM is a completely unnecessary restriction of freedom, and it drives people away,” claims Defective by Design, a campaign of the Free Software Foundation.
The post suggests that going “DRM-free” is becoming increasingly valuable for patrons. To address this, the organization has created a logo to be placed on products, making it easier for consumers to locate legitimate DRM-free products.
The label reads: “DRM-Free: All files are provided without restrictive technologies.”
“We are excited to already have a list of several first adopters using our DRM-free label,” notes the post. “ClearBits, a BitTorrent distributor of various digital media, much of which is under free culture licenses, is displaying the logo in the footer of each page, and Go Faster Stripe, a distributor of DRM-free DVDs, has the logo on their about page.”
“Music sharing sites ccMixter and TuneTrack display the label on each track’s download page while independent record label, Magnatune, uses it on an about page,” adds Defective by Design.
The post also includes a list of DRM-free publishers and distributors including Foboko, Momentum Books, O’Reilly Media, Weightless Books, Obooko, Pragmatic Bookshelf and others.
The new Ultra High Definition Television (UHDTV) format that has 16 times the resolution of current HDTV has been approved by international standards body the International Telecommunication Union, according to Japanese sources and reported by TechWorld.
UHDTV will allow “for programming and broadcasting at resolutions of up to 7680 by 4320, along with frame refresh rates of up to 120Hz, double that of most current HDTV broadcasts. The format also calls for a broader palette of colors that can be displayed on screen,” explains the article.
This new format was designed and developed in Japan, which is why the country has been pushing hard for international approval.
“It is hoped that international adoption will give the country an advantage as television progresses to the next generation,” writes TechWorld. “The standard also includes a smaller layout, which is 3840 by 2160 pixels. The two arrangements are commonly referred to by their horizontal pixel counts, or 8K and 4K.”
The same standards will be used in home entertainment sets and public spaces, including screens in movie theaters and sports venues, according to a report posted by the ITU earlier this year.
Sources indicate Apple will debut the next iteration of its iPhone during an event slated for September 12.
A second event, currently scheduled for October, is expected to feature the so-called “iPad mini” — a smaller version of the company’s popular tablet with a display of less than eight inches.
Recent speculation hinted at both products being announced at a single event. However, sources have debunked that theory.
“I don’t think Apple would want reviews of both a new iPhone and new-size iPad appearing at the same time,” writes John Gruber on his Daring Fireball blog. “Why share the spotlight? Why have another Apple product battling with the iPhone for the top spots in news coverage?”
“With a new iPhone and a new, diminutive iPad in the pipeline, Apple has two opportunities to commandeer the tech news cycle ahead of the annual holiday shopping binge, and it’s going to take them both,” suggests AllThingsD.
In the wake of its patent infringement case with Samsung, Apple has filed a notice stating which Samsung products it is looking to have banned in the U.S.
“Despite having received a finding of infringement from the jury on most of the 28 products in play in the case, it looks like Apple is only going after an injunction on eight of them — all smartphones,” reports The Verge. “That’s not terribly surprising given the fact that many of the products in the case are no longer available in the U.S.”
The filing lists the following devices: Galaxy S 4G, Galaxy S2 (AT&T), Galaxy S2 (Skyrocket), Galaxy S2 (T-Mobile), Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail.
“With infringement already established… Apple must convince the court that it will be irreparably harmed if these handsets are not banned in the country. It’s easier to make this argument after a positive jury verdict, but an injunction is by no means a foregone conclusion,” notes the post. “It’s easier for Apple to establish irreparable harm when the focus of the injunction is on products it may actually compete against in the market.”
“We will take all necessary measures to ensure the availability of our products in the U.S. market,” responded Samsung in a statement.