New data from IHS iSuppli shows that cloud-based storage subscriptions are expected to pass the half billion mark this year, a sizable increase from the 300 million in 2011.
Next year, the growth is expected to remain high at 25 percent for a total of 625 million subscriptions. By 2017, IHS iSuppli expects 1.3 billion cloud-storage subscriptions.
Independent providers such as Dropbox have been strong players in the early cloud market, but powerful consumer technology and IT companies are now crowding in with new cloud services — Apple’s iCloud, Amazon’s CloudDrive, GoogleDrive and Microsoft SkyDrive, for example.
“The big question is how many of these consumers are using the freemium, as opposed to the paid, versions of these products,” notes GigaOM.
“Profitability is the tricky part. Ragdish Rebello, Ph.D., IHS’ director for consumer and communications, said these companies should realize — if they don’t already — that cloud services in and of themselves are not profitable so these vendors better be prepared to identify and provide value-added services that actually make money.”
LinkedIn announced it is adding Company Pages and a Facebook-style notification stream in its effort to increase user engagement.
“Launching today is our new notifications feature, which will keep you notified in real-time when someone likes what you’ve shared on LinkedIn, views your profile, accepts your invitation, and much more,” explains a September 5th blog post from Angela Yang, associate product manager at LinkedIn.
CNET reports that the notifications feature will take several weeks to go live to all members, “and push notifications for Android and iOS devices are also in the works.”
“LinkedIn is trying to graduate from a simple resumé-and-headhunting site into something big — Facebook big — in a sector where increased communication pays real dividends,” Ryan Tate writes in a related Wired article.
“LinkedIn’s ambitions are no doubt stoked by enthusiasm from Wall Street, which has bid up LinkedIn stock 36 percent since the company’s May 2011 IPO,” notes Tate. “Since Facebook went public in mid May, LinkedIn stock has climbed 14 percent, compared to a decline of 51 percent for Facebook shares.”
Facebook recently increased its automated efforts to remove “likes” that were generated from fraudulent accounts, according to a post on the company’s security blog.
Since Facebook often bills advertisers on a per click basis, Facebook’s own admission of fake likes will possibly cause an uproar in the advertising world.
“Facebook’s advertising system is built on the idea that consumers will be willing to build closer relationships with advertisers, ‘liking’ the advertiser’s pages, reading the advertiser’s status updates, and circulating content about the advertiser to friends,” explains Wired.
“If an advertiser’s popularity is exaggerated by fake ‘likes,’ it makes the business less trustworthy and less likely to be engaged by real consumers,” contends the article.
Facebook’s blog post references “vendors” of fake likes and the illegal practices of purchasing or selling Facebook likes. Facebook says businesses will only lose about 1 percent of their likes, but this could represent a huge loss for some of the most popular businesses on Facebook.
Facebook has almost seven times Twitter’s number of monthly users, sitting at one billion compared with Twitter’s 150 million. But Forbes contributor Eric Jackson argues that Twitter is now in fact a bigger company than Facebook because of mobile ads.
According to eMarketer figures, Twitter’s 2012 mobile ad revenue is $129.7 million, compared to Facebook’s $72.7 million. In the world of social media, mobile ad dollars mean everything.
“The stock market is obsessed with who will make money in the mobile space because the stock market — correctly — believes that all of us (or 90+ percent of us) will only access these services from mobile devices in a very short period,” writes Jackson.
Facebook is “really only a PC-based ad company,” he suggests, adding that Facebook’s Payments business has also struggled due to the rapid shift in mobile.
Admittedly, Facebook only began selling mobile ads in the second half of 2012 but Jackson counters, saying “Twitter’s mobile ad sales were likely also light in the first half of the year.”
“Maybe Facebook is going to ramp things up in the future,” concludes Jackson. “But given that they’re 7x as big as Twitter and to have their heads handed to them like this from the quirky little San Francisco company, it’s embarrassing.”
“Never mind the fact that nearly 40 percent of mobile ad clicks are either accidental or fraudulent — the folks from eMarketer say that mobile ad revenues in the U.S. will grow from $1.45 billion in 2011 to $6.62 billion in 2014,” reports GigaOM. “The New York-based research group projects that by 2016, the U.S. mobile advertising market will be close to $12 billion.”
The posts notes that Google (Android OS) dominates the mobile ad industry, while Pandora and Twitter also stand out.
“On a net basis, Pandora Media has emerged as one of the strongest U.S. mobile display-ad sellers, and its share of the total U.S. mobile display market is expected to reach 20.5 percent in 2012,” according to the eMarketer press release.
However, Om Malik argues that mobile ads in heavy rotation could eventually have a negative impact on the Pandora audience.
“While Twitter is beating Facebook as of now, it won’t be long before Facebook makes a comeback,” notes GigaOM. “Apple’s iAd continues to struggle” and is expected to steadily decline, according to eMarketer.
Projections from eMarketer suggest that by 2014, U.S. net mobile display ad revenue share will be comprised of: Facebook (20.5 percent), Google (17.6 percent), Pandora (16.3 percent), Twitter (14.5 percent), Millennial Media (5.3 percent), Apple iAd (4.8 percent) and Other (21.1 percent).
A recent Nielsen consumer survey found more adults reported using radio streaming service Pandora to listen to music than Apple’s iTunes.
“Apple has dominated the sale of song downloads since 2003 when it launched what was then the iTunes Music Store. It has since become the largest music retailer, physical or digital, in the world,” reports the Wall Street Journal. “But if services like Pandora and Spotify gain popularity, Apple could lose its edge.”
Apple is reportedly working on creating a custom-radio service, according to people familiar with the matter. The service would be available across all Apple products and possibly on Windows computers. It would not, however, work with devices using Google’s Android operating system.
“Apple is negotiating for its own licensing deals with record companies, these people said, because it wants to offer users a greater degree of interactivity than allowed by so-called compulsory licenses used by Pandora and other webcasters,” notes WSJ.
Pandora’s free, ad-supported service has yet to be profitable due to high royalty payments. Research firm eMarketer expects the company to earn $226.4 million in mobile ad revenue this year, but Pandora’s “content-acquisition costs for [Q2] increased 79 percent compared with the same quarter in 2011, far outstripping its revenue growth of 51 percent,” explains the article.
Apple’s service would also take the ad-supported approach with its iAd platform, a move that could make achieving profitability difficult. Competing music service Spotify instead relies on subscription fees for ad-free versions, and has noted that less than 15 percent of its revenue comes from ad sales.
Business Insider discusses the evolution of online video and its potential future impact on content creation and distribution. It cites video streaming providers like Netflix and Hulu, the emerging success of YouTube’s original channels and the influence of social media and crowd-funding site Kickstarter.
“So what’s this mean for online video?” asks the article. “Web series and their increasing popularity are extremely revealing when it comes to foreseeing the future of online video.”
“The emerging popularity of online video can most definitely be accredited to the obsession and dependence on social media present in our world today. Online videos are going ‘viral’ because of the accessibility of a simple click of a button to share with our ever-connecting networks.”
Cisco predicts that the number of people accessing video via the Web will nearly double over the next four years. However, advances in Internet TV and a surge in mobile subscribers will lead to fewer viewers using PCs to view content.
By 2016, Cisco expects mobile devices to generate dramatic growth in video traffic, while HD video streamed to Internet TVs will grow sixfold, and comprise 6 percent of all worldwide consumer Web traffic.
“Our smartphones and tablets are predicted to be responsible for an 18-fold growth in mobile video traffic between 2011 and 2016,” notes Business Insider. “Not to mention, the number of worldwide mobile users will reach 1.6 billion, sooner rather than later.”
Verizon FiOS views cord-cutting as a potential game-changer that could launch a new revenue stream through a la carte content.
Cord-cutting “is not stopping. It’s growing. The question is: Is it growing enough for us?” asks Maitreyi Krishnaswamy, Verizon’s director of interactive video services, responsible for the company’s FiOS TV.
Verizon is planning a Netflix competitor with Redbox to launch later this year. GigaOM notes that “cord cutting is fundamentally changing the parameters of Verizon’s TV business.”
“Is the migration to a-la-carte enough that we can go that route?” says Krishnaswamy. “It impacts how we negotiate TV contracts with studios. It’s not something we can do overnight, but definitely something we’ve been looking at.”
“Krishnaswamy didn’t spell out all the details, but here is what I read between the lines of this statement: Cord cutting isn’t just about some people not paying for TV anymore, but also about enabling new and innovative business models, including unbundled subscriptions to individual channels,” suggests Janko Roettgers, writing for GigaOM. “And Verizon is apparently ready to take the plunge as soon as the wave is big enough.”
According to new data from Ericsson, 62 percent of people each week participate in social media activities during their TV viewing time, an increase of 18 percent over last year.
Four in 10 of those consumers are using social media to discuss the TV content they are watching.
Additionally, 67 percent of consumers are using tablets, smartphones or laptops for “their everyday TV viewing, both for video consumption and to enable a social media experience while watching TV,” according to Ericsson.
“But despite the growing popularity of on-demand viewing across many platforms, watching broadcast TV programming live is still the dominant viewing preference, the study found. Pair that insight with the social TV stat and you can see why a social TV strategy is so vital,” reports MediaPost. “Yes — consumers are watching on other devices, but by and large they’re watching on TV and they’re often also talking about the show thanks to social networks on their phones or mobile devices.”
“This research underscores how deeply habits are changing, and how essential it is for programmers and marketers to capture the TV viewer not only on the ‘first screen’ but also on the screen they use for interaction — the mobile one in most cases,” explains MediaPost.
Smart TVs have become more advanced with high-speed processors, built-in cameras and Internet connections. Even so, consumers are still opting to use their set-top boxes to access the Internet and other services because of the poor user experience on smart TV interfaces.
“While many TVs now offer the same functionality and connectivity that previously only existed in such set-top boxes as Apple TV or Roku, most consumers simply aren’t connecting this way,” reports Fortune. “Jupiter Research predicts that by 2017 some 650 million users worldwide could be connected online via a TV, including through set-top boxes.”
Some TV interfaces are not intuitive and there is no standard among the various manufacturers. “Imagine if each computer you used had an entirely different operating system, one of eight or 10 types, rather than simply Mac or Windows,” the article suggests.
“Set-top boxes have other benefits over smart TVs,” the article adds. “For one, most larger screen HDTV sets can cost upwards to $2,000 and have an eight to 10 year life cycle, while a set-top box costs far less to replace.”
“The TV stays in the house for eight years or more, and it can’t keep pace with the changing technology of the Internet,” says Colin Dixon, senior partner of The Diffusion Group.
Dixon “noted in a recent study that this fragmentation could result in $1 billion in lost ad revenue alone,” explains Fortune. “Advertisers are struggling to decide which smart TV platforms to support.”
“The problem with Smart TVs is they aren’t smart, not by a long shot,” suggests Rob Enderle, principal analyst for the Enderle Group. “They are more of an oxymoron.”
Fox Filmed Entertainment is planning a new digital window for its films by offering HD versions at newly lowered prices about three weeks prior to disc and VOD availability.
The new model will begin this month with director Ridley Scott’s sci-fi thriller “Prometheus,” which will be made available via digital purchase on September 18. The film is slated for DVD, Blu-ray and VOD release on October 11.
Fox will join the UltraViolet digital locker system used by Warner Brothers, Universal Pictures and others.
“The new system is an aggressive bid to revive consumers’ interest in the purchase of movies, by giving them an earlier shot at films for about $15 each, down from a purchase price that is currently about $20,” reports The New York Times.
“That will nibble into what has been a waiting period of roughly four months in which pictures play exclusively in theaters before their release in home entertainment formats,” notes the article.
Home video sales have dropped from a $21.8 billion high in 2004 to $18.4 billion in 2011.
“According to figures from the Digital Entertainment Group, an industry consortium, digital sales of films and television shows — as opposed to revenue from rentals or on-demand viewings — rose almost 22 percent in the first six months of this year, to $329.4 million, from $270.3 million in the first half of 2011,” according to the article.
We’d like to remind our readers that Silicon Beach @ USC is scheduled for this week. USC’s Marshall School of Business and the School of Cinematic Arts will host the event on the USC campus September 12-13.
For those attending the conference program on Thursday, September 13, please note the start time has been changed to 9:00 AM (with registration and coffee at 8:00 AM).
Presenters and panelists for the September 13 conference will include Andrew Stalbow of Rovio, Paul Bricault of Amplify.LA, Chris DeWolfe of Social Games Network, Mitch Singer of Sony Pictures Entertainment, David Wertheimer of Fox and others.
The event will also feature the first-ever Silicon Beach Award competition (September 12, invitation-only) for new ventures pursuing opportunities in innovative media platforms and digital content and services, in which teams will compete for three awards totaling $50,000 in prize money.
Silicon Beach @ USC — led by the Lloyd Greif Center for Entrepreneurial Studies, the Institute for Communication Technology Management, and the Entertainment Technology Center — will focus on innovation and entrepreneurship in digital media and technology.
Keynotes and panels will focus on the intersection of technology and digital content, the future of media, and the monetization of new applications, devices and services.
For more information or to register for the September 13 conference, visit the Silicon Beach @ USC event website.
Each month, SMPTE presents a one-hour, online, interactive webcast that addresses a hot-topic technology.
“Each educational webcast is designed to address specific technology and technical challenge facing the motion imaging industry,” explains SMPTE. “These convenient, non-commercial webcasts provide an excellent opportunity to learn more about highly relevant technology related topics.”
ETC members may be interested in the September 13 session with Jim Whittlesey of Deluxe: “High Frame Rates — A Technical Discussion on the Impact it Will Have on Motion Imaging Workflows.”
The session will address how HFR technology affects production, storage, delivery, distribution and the theatrical experience.
You can register via SMPTE. The sessions are offered for free to members and for $49 to non-members.
Cambodian police have arrested 27-year-old Gottfrid Svartholm Warg in Phnom Penh, months after his one-year prison sentence was due to begin in Sweden.
Svartholm, one of the individuals behind file-sharing website The Pirate Bay, was arrested in connection with the alleged illegal use of information technology. The Pirate Bay was launched in 2003 by Svartholm and Fredrik Neij.
“In 2009, Messrs. Svartholm and Neji were tried in Stockholm with Peter Sunde and businessman Carl Lundstrom for facilitating the breach of copyright law,” reports the Wall Street Journal. “The four men were found guilty, and each was sentenced to one year in prison. They appealed, and all except Mr. Svartholm received reduced prison terms.”
“Svartholm left Sweden before the appeal verdict, and an international warrant for his arrest was issued when he failed to return to Stockholm to serve his sentence,” notes the article.
WSJ suggests the case could potentially reignite “the debate over how the Internet should be used to share copyrighted material.”
General Keith Alexander, commander of U.S. Cyber Command and head of the National Security Agency, stresses the importance of an Internet infrastructure redesign. He wants automatic triggers to help the NSA track hacking efforts against both public and private infrastructure.
Alexander emphasizes denial of service attacks — a common tactic used by groups like Anonymous to disrupt websites. “My concern is that it’s going to flow into destructive attacks that could have consequences for our critical national infrastructure and the Internet itself,” he notes.
The Internet is currently a web of independent networks. This makes it difficult for agencies like the NSA to easily track activity and catch offenders.
The NSA has implemented a plan to help prevent attacks, including development of the Defense Industrial Base Cyber Pilot to automatically alert the agency when a company’s security has been breached.
Many people are critical of the NSA and their attempts to control the Internet. Alexander dismisses these privacy concerns, explaining that when “you go down the highway, and you go down the EZ Pass lane, what you’re doing is sending that code. That system is not looking in your car, reading the e-mail, or intercepting anything, it’s just getting that code.”
