Internet radio provider Pandora has gained 150 million registered users in the U.S. but hasn’t been able to make a profit due to prohibitive music licensing fees. The company is now suing the American Society of Composers, Authors and Publishers (ASCAP) for “reasonable” fees.
“Pandora is seeking a blanket licensing fee that would cover all songs represented by the 435,000-member group,” Bloomberg reports.
Pandora and ASCAP had an experimental fee agreement from 2005 to 2010, which Pandora said was “effectively non-negotiable” and “ill-suited and not reasonable,” according to court papers. Following that arrangement, the two sides haven’t been able to reach another agreement, which leaves the decision to the U.S. District Court in New York.
However, ASCAP and the Radio Music Licensing Committee were able to come to a fee agreement, one that Pandora was not offered. The Radio Music Licensing Committee represents Clear Channel, which runs a rival Internet service called iHeartRadio.
“Pandora also claims that it’s entitled to lower rates because some large music publishers have announced they are withdrawing new media rights from ASCAP and negotiating licensing fees directly with Web radio services,” Bloomberg writes.
The proposed Internet Radio Fairness Act of 2012 could help to solve licensing disputes by requiring “music royalty rates for Web broadcasters to be comparable to what satellite radio and cable companies pay,” the article explains.
Last year, nearly half of Pandora’s revenues went to royalties — more than six times the percentage satellite radio Sirius XM paid. “For the six months that ended July 31, Pandora reported that its net loss increased to $25.6 million from $8.57 million a year earlier, while revenue rose 54 percent to $182 million,” notes the article.
Normally on opposing sides, top Silicon Valley companies are coming together with media giants and cable operators to resist the Federal Trade Commission’s proposed update to the Children’s Online Privacy Protection Act.
Apple, Facebook, Google, Microsoft, Twitter, Viacom, Disney, cable operators, a toy makers trade group and others have argued that the changes are so arduous that, “rather than enhance online protections for children, they threaten to deter companies from offering children’s Web sites and services altogether,” reports The New York Times.
“But the underlying concern, for both the industry and regulators,” the article continues, “is not so much about online products for children themselves. It is about the data collection and data mining mechanisms that facilitate digital marketing on apps and Web sites for children — and a debate over whether these practices could put children at greater risk.”
The update would institute persistent ID systems and require further parental permissions for data collection for ads.
Alan L. Friel, chairman of the media and technology practice at Edwards Wildman Palmer law firm, rebuts concerns that tracking is inherently bad.
“What is the harm we are trying to prevent here?” he asks. “We risk losing a lot of the really good educational and entertaining content if we make things too difficult for people to operate the sites or generate revenue from the sites.”
“The economic issue at stake is much bigger than just the narrow children’s audience,” suggests the article. “If the F.T.C. were to include customer code numbers among the information that requires a parent’s consent, industry analysts say, it might someday require companies to get similar consent for a practice that represents the backbone of digital marketing and advertising — using such code numbers to track the online activities of adults.”
During ShowEast’s International Day in Hollywood, Florida, media executives discussed the pressing need to convert from film to digital projection.
“I don’t know when the end [of film] will be, but it could be tomorrow,” said Mark Christiansen, executive VP of operations at Paramount Pictures. “It won’t be a studio decision… there simply won’t be stock.”
Christiansen explained that Fuji no longer takes film orders and Agfa has also stopped producing film, “to the best of my knowledge,” he said.
“That leaves Kodak,” Christiansen continued, noting the company’s battle with bankruptcy. “The judge could look at 35mm tomorrow and ask them to stop doing it. And they won’t have a choice.”
In Latin America, this evolution could be problematic with less than half of the region’s 10,000 screens being digital.
Speakers at the conference also discussed delivery methods, favoring satellite distribution over hard drives. However, physical delivery may get a second wind as capacity increases and prices decrease.
“We think satellite is the best choice for now,” said Randolph Blotky, chairman and CEO of Technology Convergence Partners. “Once they figure out how to deliver IP streams point to multipoint, you are going to see a lot of delivery that way.”
If you don’t know what a MOOC is, you soon will as massive open online courses continue to proliferate through higher education, attracting noteworthy numbers of students as well as top universities.
“I like to call this the year of disruption and the year is not over yet,” says Anant Agarwal, president of non-profit educational startup edX, which has 370,000 students enrolled this fall.
Another MOOC provider Coursera launched this January and has already attracted 1.7 million users, growing faster than Facebook according to founder and Stanford professor Andrew Ng.
“MOOCs have been around for a few years as collaborative techie learning events,” notes The New York Times, “but this is the year everyone wants in. Elite universities are partnering with Coursera at a furious pace. It now offers courses from 33 of the biggest names in postsecondary education, including Princeton, Brown, Columbia and Duke. In September, Google unleashed a MOOC-building online tool, and Stanford unveiled Class2Go with two courses.”
Many courses see a high number of signups, but a smaller number of certificates awarded as students drop off. There is also limited faculty interaction because of the volume of students, so users have to rely more heavily on other students for help.
“But the vibe is decidedly Facebook — build a profile, upload your photo — with tools for students to plan ‘meet-ups’ with Courserians in about 1,400 cities worldwide,” explains the article. “These gatherings may be bona fide study groups or social sessions. Membership may be many or sparse.”
The MOOCs also peer-source the grading; each student grades five others’ work and scores for each user are averaged out. Those who give inaccurate grades are flagged and their scores count for less. Cheating has been a concern, leading to proctored exams.
Piracy has turned its attention to the $10.1 billion mobile-app business. “The order of magnitude is tens of thousands to hundreds of thousands of dollars in losses per developer,” notes Carl Howe, VP of researcher Yankee Group, adding that sales might be 20-50 percent higher without piracy.
“There are lots of ways to steal an app; it usually involves copying its code and publishing it on an online forum or a legitimate app store,” writes Businessweek.
App piracy is different than other types of piracy because it often targets students or small firms that do not have the means or resources to pursue piracy.
The issue is especially problematic on Android, as according to Howe, Google’s “tools have been relatively ineffective because there are multiple Android stores, and Google can’t possibly control all the non-Google stores.”
Google hopes to combat the issue by offering encryption keys with paid applications to verify that the app matches the device from which it was purchased. This is intended to avoid copying the code and redistributing it to multiple devices.
Other app developers are turning to anti-tampering tools from companies like Arxan Technologies, which help monitor and fight piracy.
Many developers have switched to the freemium app model because it shows advertisements both to legitimate downloaders and to pirates. Other developers convince people to download the real version of the application by offering frequent updates.
Technology startup PredictGaze uses gaze detection, gesture recognition, and facial-feature recognition to control devices like televisions and cars. The company thinks that as front-facing cameras become more common on devices, gesture control will become a preferred method to operate electronics.
The product is currently being tested on an iOS game that allows users to control a monster using head motions.
It is also being tested in Japan to track customer interest in products. The technology determines the customer’s smile, gender, and time spent in front of a product, and can offer coupons if it feels it is losing a hesitant customer.
“The company’s technology combines machine-learning and computer-vision algorithms in software that can use a standard VGA camera to figure out where you’re looking, what your gender is, if you’re smiling, and more. It can also identify gestures — all of which can then be translated into actions taken by devices,” reports Technology Review.
Founder Ketan Banjara says PredictGaze’s technology is unique in its ability to bring together “face, gesture, and gaze” under one technology.
The technology can perform tasks such as pausing a video if it determines no one is watching, and can also turn the pages of an e-book by tracking the reader’s eyes.
Japan Display has developed a video-playing paper-like LCD that runs on low power. “The results could be of great use to device makers who want to simulate a paper-like experience while adding the capabilities of color video,” writes Technology Review.
A press release from Japan Display notes that “an optical property optimization adopting a newly-developed scattering layer” and a low power consumption method are integral aspects of the technology.
The technology’s Light Control Layer does not reflect light like most LCDs, but rather “the display collects light to some extent, in the direction of the user’s eyes, making it look similar to paper,” according to Japan Display.
The lower power consumption comes from the company’s Memory in Pixels technology. This technology retains signals when it displays still pictures, which saves energy.
Japan Display has developed one version of the technology that is bright, but has relatively low color purity, and another version that is dim, but has high color purity. The company is ready to market the bright, low color purity model, while it continues research and development on the high color purity display.
Swedish service Magine hopes to reshape cloud distribution to make television a streaming service through an iPad or in-TV application, reports paidContent.
The service, which is still in its beta form, offers 16 premium channels for free in Sweden. Users can rewind live streams, and can access shows for up to a month after they air.
“We transcode all the channels in real-time, then put it through DRM and upload it in real-time to our cloud storage, and out through any CDN,” explains co-founder Mattias Hjelmsted.
The service has the potential to replace set-top boxes, notes the article. Many people already have broadband or Wi-Fi devices that can handle the duties traditionally assigned to set-top boxes.
While the service is currently free, the company plans to start charging for its service once it removes the beta label.
Apple has sold three million units of the fourth-generation iPad and iPad mini since launching them on Friday, beating analysts’ expectations and setting a new sales record.
“We set a new launch weekend record and practically sold out of iPad minis,” notes CEO Tim Cook. “We’re working hard to build more quickly to meet the incredible demand.”
According to Apple, sales of the 7.9-inch mini and the fourth-gen iPad “easily topped the 1.5 million Wi-Fi only tablets sold during the third-generation iPad’s opening weekend in March,” reports the Wall Street Journal. “Apple will start shipping cellular-enabled versions of both new iPads in the U.S. within a few weeks.”
However, the company has been tight-lipped regarding the actual number of minis sold.
“ISI Group analyst Brian Marshall estimated iPad minis accounted for about two million of those initial iPad purchases over the past three days, putting sales well on their way toward meeting the research firm’s estimate of about five million iPad mini sales this December quarter,” explains the article.
The mini, which starts at $329, provides competition with rivals that offer 7-inch tablets running Google’s Android OS.
The Netflix board of directors has adopted a stockholder rights plan known as a poison-pill defense to prevent billionaire investor Carl Icahn from acquiring more shares in the company.
“The stockholder rights plan, approved unanimously by Netflix’s board on November 2, would be triggered if an ‘activist shareholder’ acquired 10 percent of the stock, or an institutional investor bought 20 percent,” reports Bloomberg.
The move is designed to make a potential hostile takeover too expensive, and fend off larger companies such as Amazon and Verizon.
“Netflix has received no takeover offer and has had no discussions with Icahn, said a person familiar with the matter who asked not to be identified because it is private,” explains the article.
Icahn, who owns nearly 10 percent of Netflix’s shares, said in a regulatory filing that the company’s new poison pill was “particularly troubling” and criticized Netflix for “poor corporate governance.”
Last week, analyst Anthony DiClemente of Barclays Capital issued a report suggesting Icahn might have purchased his stake in Netflix with the intent of eventually selling the company. The assertion was based on Icahn’s prior history at Blockbuster and Lionsgate.
Amazon may be targeting Netflix and Hulu with its new monthly payment option for Amazon Prime.
The new subscription “includes free two-day shipping, access to e-books and instant streaming of movies and TV shows,” reports the Los Angeles Times.
Priced at $7.99, the new monthly option is actually more expensive than the $79 subscribers currently pay annually for Prime. However, this may not be an issue for consumers when they look at Netflix, Hulu Plus and Amazon Prime, and realize all three have the same monthly fee — but Prime includes more perks.
“The monthly subscription comes as brick-and-mortar retailers are furiously battling with Amazon for shoppers this holiday season and rolling out all kinds of promotions such as price matching and free layaway,” notes the article.
“Analysts say the option could entice shoppers who don’t want to be locked into Amazon Prime for an entire year to sign up during the holiday months for free shipping.”
Additionally, Amazon has been installing “lockers” in retail, convenience and grocery stores, hoping that online shoppers looking for a more secure pick-up location will turn to the lockers. Staples announced on Monday that it will also install Amazon Lockers in its stores.
Hulu has announced a deal with CBS that will bring 2,600 episodes of shows such as “Medium,” “Star Trek,” “I Love Lucy,” “The Twilight Zone” and “CSI: Miami” to the video service starting in January.
CBS content will be restricted to classic series and recently canceled shows. The CBS website will continue as the sole venue for ad-driven episodes of current series.
The network finally joins competitors such as NBC and Fox, which have been offering content via Hulu for years. The streaming service currently has more than 400 content partners.
“Hulu says that the deal with CBS will be in effect for multiple years, but the company did not provide financial details on the agreement,” reports CNET. “Some CBS library shows will be available on the free Hulu.com, though Hulu wouldn’t say which programs will make the list.”
The majority of titles from the CBS library will be made available on the premium version, Hulu Plus, for customers who pay the $8 per month subscription fee.
“The CBS deal comes as Hulu faces a number of internal questions in the wake of buying out early investor Providence Equity Partners,” notes TechCrunch in a related post. That means that Hulu is controlled entirely by its parents and content partners Fox, Disney, and NBCUniversal.”
“That deal triggered a liquidity event, through which all employees with stock were able to cash out, leaving some key executives — like CEO Jason Kilar — little reason to stick around. There’s a lot to change ahead for Hulu in the next 12 months, so getting an unexpected content partner on board is positive news.”
With various freemium alternatives, it seems that consumers aren’t as willing to pay for content. However, a new study from Forrester suggests otherwise, finding that the number of people in western Europe purchasing digital content will grow by eight to 12 percent in five years.
The findings predict that by 2017, 20 percent of tablet users in western Europe will pay for news; the number of people who pay for online games will increase 27 percent; digital content will account for 60 percent of video-buying; and the number of music subscribers will double.
“The boom will be fueled partly by the currently-radiating explosion in new devices designed for media consumption, many with attractive built-in payment mechanisms,” paidContent reports.
“The potential impact on marketers is huge,” says Forrester analyst Darika Ahrens. “Successful online content providers no longer need to rely on ad spend. (There will be) fewer chances to reach consumers with ads.”
“She says marketers should respond by building their own content channels, sponsoring content packages within a paid content environment and otherwise start advertising as though it were creating content for end consumers,” explains the article.
“The consequence of such a model is that as more content becomes marketer-created, disclosures describing the relationship between advertiser and publisher must be visible to readers, who are as used to the traditional church-and-state separation of editorial and commercial as content producers themselves are.”
The article notes some companies that offer subscriptions still rely on advertising revenue, like Hulu and the Financial Times. Even so, ad rates and premium ad opportunities are shrinking as advertising becomes available on more websites.
Remember Furby? Hasbro’s hit robot from the 1990s is getting a second life thanks to a tech upgrade in which the furry little critter develops a personality as a child interacts with it.
An expensive and complex development project for Hasbro, the Furby reboot is already being promoted by Walmart, Target and Toys R Us.
The new Furby is one of more than 20 products that Hasbro is bringing back with improved tech capabilities. The company needs a hit, as the popularity of mobile devices has led to sagging sales for traditional toys.
Manufacturers are hoping that kids familiar with smartphones and tablets will gravitate toward a new generation of “app toys” (a new product category dubbed by toymakers).
“One of the best-selling gadgets at electronics chain Brookstone is the Rover Spy Tank, which is remotely controlled by an app on an iPhone or iPad,” reports Businessweek. “Mattel has a line that it calls ‘apptivity’ toys that includes Hot Wheels cars a child can move along the screen of a tablet as a digital racetrack scrolls underneath. Mattel’s Fisher-Price brand is even incorporating smart devices into toys for preschoolers.”
Upgraded sensors and a computerized brain will lead to each Furby behaving somewhat differently, depending on how it is treated by its owner.
“Furby also works with mobile devices,” notes the article. “A free app for Apple’s iOS operating software and one for Google’s Android later this year will allow users to translate what Furby is saying and feed him everything from coffee to a dirty sock, potentially eliciting a burp or other adorably rude noises.”
Microsoft is betting big on “Halo 4,” the latest installment of the popular Xbox 360 game, a series many gamers thought had concluded with “Halo 3.”
To convince consumers that “Halo” lives on and to advertise today’s debut, Microsoft has ramped up promotion. The company has launched a slick two-minute trailer from director David Fincher (included in article). Microsoft has also teamed up to put out “Halo”-themed Mountain Dew, Doritos and Axe deodorant, targeting the predominantly male gaming demographic.
The upcoming game is only available on the Xbox console, unlike its rival “Call of Duty,” which is also available on Sony’s PlayStation 3 and Nintendo’s new Wii U.
“The intense competition has put pressure on the ‘Halo’ developers to make sure the game arrives on time,” reports the Wall Street Journal. “Microsoft estimates a week of lost momentum could wipe out roughly a third of projected ‘Halo’ sales.”
“‘Halo 4,’ with roughly 340 employees working on the project, cost about $40 million to produce, more than twice the industry average, estimates Michael Pachter, an analyst at Wedbush Securities,” notes the article. “That compares to Internet games which can have development teams a fraction of that size and cost as little as $1 million to $5 million. Some mobile games are created by single developers in a matter of months with almost no investment.”
Development of “Halo 4” started in 2008 but just 19 weeks before launch, only about a fourth of the game was ready for shipment. Improved technology helped game makers create a more realistic and rich game but slowed the game down. Numerous bugs also plagued developers.