The media titans are pumped while the rest of us are dog-tired from tracking their multiplying deals. The Wall Street Journal is reporting that top cable operator Comcast might be collaborating with Internet giant Google to buy a minority share of America Online, the faltering dial-up leader that seems to have become a hot property over the past two months.
The report cites people close to talks among Comcast, Google and AOL parent Time Warner, who contend the investors value AOL at about $20 billion. The potential deal, which still seems very fragile at this point, makes a lot of sense.
First, the alliance between Microsoft and Yahoo on IM interconnection, announced today, did seem like a clear signal that the talks of a merger between AOL and Microsoft have been suspended, leaving open the prospect for other potential AOL partners. Or maybe the reverse is true: the AOL-Microsoft talks were interrupted by a better offer from Comcast-Google.
Secondly, Google already has a tight relationship with AOL, generating $300 million in annual revenue for AOL, while Microsoft has been a long-standing foe of the nation’s number one online service.
Finally, although Comcast seems like an odd partner in this heated mix of Internet behemoths, the Philadelphia, PA-based cable company is the number one high-speed Internet access provider in the world, not just the U.S. Comcast’s footprint, however, is not global, or even national, given that only Comcast customers can gain access to Comcast’s web portals. While highly clustered in big metro regions, Comcast serves only about 40% of all cable homes passed in the U.S.
Moreover, despite its track record of strong success, Comcast is starting to appear a little old-fashioned to investors as Google, Yahoo, Skype and other Internet companies capture the imagination of Wall Street. A pact with Google that results in expanded online presence could give Comcast a lift on the stock market.
Update: The New York Times confirms that Google and Comcast stepped into the fray after learning of the merger talks between AOL and Microsoft. The Times article says that one motivation for Comcast would be to convert some of AOL’s dial-up customers to Comcast’s high-speed service. However, that seems like a minor motivation given that Comcast won’t likely gain that many more subscribers from holding an ownership stake in AOL compared to simply stepping up advertising on AOL’s services. Moreover, only about 40% of AOL’s dial-up base is likely to be in Comcast franchise areas.
Posted by Cynthia Brumfield at 7:40 PM | Print | Comments (0)
Apple CEO Steve Jobs introduced the much-anticipated video iPod today at an event in San Jose, CA. The news comes one day after Echostar, the nation’s second largest satellite video provider, unveiled its own portable media player, dubbed PocketDish.
According to the Wall Street Journal, Jobs said Apple “would begin selling music videos and television shows on its iTunes Music Store.”
The new video iPod, which had been widely anticipated, boasts a color screen that is larger than those on standard iPods [2.5 inches, according to Bloomberg], though the device is still small enough to fit into the palm of the hand. A model that can store 30 gigabytes of data will cost $299, while a model with double the storage space will cost $399, Apple said.
In a deal with Walt Disney Co., Apple said will offer current and past episodes from several Disney shows, including “Desperate Housewives” and “Lost,” on iTunes for $1.99 an episode.
ZDNet reports that “It will take 10 to 20 minutes to download an episode, said Jobs. Each will cost $1.99 and will be ad-free.”
Bloomberg quotes Matt Kelmon, who helps manages $750 million at Palo Alto, California-based Kelmoore Investment Co., who says “[Apple] is becoming an entertainment company, not a computer company.” Bloomberg also includes some stats on sales and pricing:
Apple has sold more than 500 million songs and has more than 10 million iTunes account holders, who have bought on average 60 songs each, Jobs said in September…The company gets about a third of its sales from the iPod and sales of music through its iTunes online store. Apple said yesterday that iPod shipments reached a record 6.45 million units, short of the 6.7 million to 8.5 million analysts anticipated and prompting a drop in the shares today.
The Nano, unveiled Sept. 7, accounted for 1 million of the devices sold last quarter. Apple yesterday described demand as “staggering” and said a shortage of unnamed parts made it difficult to say when the company will be able to build enough to fill orders.
The new video player may also help bolster the iPod’s average selling price, which has fallen in the past year after Apple introduced lower-cost players such as the $99 Shuffle and cut prices across the iPod line. The Nano has started to increase the average price already, pushing it to $188 last quarter from $179 in the third quarter. Still, that is less than $266 a year ago.
ZDNet reports that “Jobs kicked off the event by revealing a new iMac that will be similar to the current model, but thinner. It will have a built-in iSight camera with still and video capabilities and a remote control with a 10-foot range for controlling music, photos and video.”
And Bloomberg notes that the iPod “is helping to drive sales of Apple’s more- profitable Mac personal computers. Mac shipments reached a five-year high of 1.24 million units, the fourth straight quarter shipments have topped 1 million machines, Apple said yesterday.”
Broadcasting & Cable reports on Echostar’s launch of PocketDish:
The PocketDish can download content from Dish Network digital video recorders (DVRs), enabling users to watch TV shows on the go. An hour of content can be transferred to the PocketDish’s hard drive in about five minutes. The units can also download or record content from PC and Mac computers, digital cameras, and many DVD players, camcorders and VCRs.
The Pocket Dish comes in three varieties. A model that costs $599 and comes with a 7-inch LCD screen and a 40 GB hard drive. It can record both video and audio from external sources like camcorders, DVD players and VCRs. A similar version, priced at $499, comes with a 4-inch screen and a 30 GB hard drive. A third version that can record only audio from external sources costs $329 and comes with a 2.2-inch screen and 20 GB hard drive.
All three models can download content from Dish Network DVRs via a USB 2.0 connection. The units do not have an output that can transfer video content, an EchoStar spokesperson said, so there is no limit (other than hard drive size) on the type or amount of programming that can be downloaded from DVRs.
Bloomberg includes some comments on competition in the portable video space:
Apple’s video device isn’t the first to hit the market. Sony currently markets a handheld computer called the Type U in Japan that can be used to watch videos. Consumers can also watch movies (with a tiny Universal Media Disc) on the PlayStation Portable.
Intel and Microsoft, meanwhile, designed a portable media player back in 2002 that some manufacturers brought to market last year. (First it was known as Media2Go and later as the Portable Media Center.) Meanwhile, Samsung and others have come out with phones that can receive TV signals, thereby allowing commuters to watch shows on their cell phones. So far, though, portable video hasn’t been a big seller.Posted by Mitch Shapiro at 3:17 PM | Print | Comments (0)
Entrepreneur and HDTV pioneer Mark Cuban is, according to Wired News, ” hiring staff that could form the nucleus of a new DVD label” with the intent of “shatter[ing] Hollywood’s release window system by making first-run films available simultaneously in theaters, on cable TV, online and on DVD.” [see this previous IPD post for a discussion of potential changes in the relationship between DVD and cable PPV windows].
The label is expected to launch in January with the release of Bubble, the first in a six-part deal between Cuban’s 2929 Entertainment and director Stephen Soderbergh, according to a source familiar with the plan.
While Cuban is considered a maverick in the media business, the Wired story suggests that even major media companies are considering potentially dramatic changes in movie release windows:
Robert Iger, who has since taken the reins as CEO of The Walt Disney Co., suggested that the theatrical “window” should be snapped shut and DVDs released at the same time. “We can’t stand in the way and can’t allow tradition to stand in the way of where the consumer can go or wants to go,” Iger told analysts. “Windows in general need to change. I don’t think it’s out of the question that DVDs could be released in the same window as the theatrical release. All the old rules should be called into question because the rules of consumption have changed so dramatically.”
The Wired story closes with a reaction from theater owners, which it says “have cried foul, saying, among other things, that DVDs only sell because theatrical exhibition heightens their profile.”
“Mr. Iger knows better than to tell consumers — or Wall Street analysts — that they can have it all, everywhere, at the same time,” said John Fithian, president of the National Association of Theater Owners. “He knows there would be no viable movie theater industry in that new world — at least not a theater industry devoted to the products of Hollywood. And he should know that Hollywood studios would be just one shriveled vendor among many in that world of movies as commodities only.”Posted by Mitch Shapiro at 1:21 PM | Print | Comments (0)
According to a Variety story at videobusiness.com, Comcast has been pitching the following idea to studios:
Sensing that the financially troubled Blockbuster is ripe for plucking, Comcast is sounding out the Hollywood studios on the following proposition: A Comcast customer with a digital box will see a menu listing for, say, The 40-Year-Old Virgin as much as six weeks in advance of its scheduled appearance on pay-per-view…For a fee of about $17, the subscriber could call up the movie for one immediate video-on-demand showing. Two days later, the DVD of Virgin shows up in the mailbox for the subscriber’s permanent collection.
Mike Egan, cable consultant and partner in Renaissance Media, says Comcast’s idea is the boldest strategy yet devised to counter “the poor treatment Hollywood has always given cable PPV in the windowing of its movies.”
“For individual subscribers who want to see movies early and are willing to pay for the DVD,” Egan adds, “it’s a good deal.”…Major studios like Disney and Sony might spark to the proposition, he says, because “they could use Comcast as leverage against the big retailers,” such as Wal-Mart and Costco.
But there are skeptics:
Tom Eagan, media analyst with Oppenheimer & Co., said… [if] the buying of DVDs on cable poses a threat to the dollar volume from video store rentals, the studios might take a pass..And NPD’s [Russ] Crupnick said that cable TV’s brainchild could sink of its own weight because most cable subscribers are unlikely to be interested in ponying up $17 to own the DVD of the typical theatrical movie. Instead, they’ll wait for six weeks until it becomes available for $3.95 on PPV. Or, if they insist on seeing it right away, they’ll get to the corner store and rent it for $4.Posted by Mitch Shapiro at 1:13 PM | Print | Comments (0)
Courtesy of Skype Journal, the Canadian government is contemplating the imposition of some pretty intrusive wire-tapping laws on telecommunications, broadband and VoIP providers. The government is asking the providers to build in the capacity for round-the-clock surveillance on the email, Internet or phone use of more than 8,000 people simultaneously.
Although the rules are complex and still in the draft stage, they reportedly require the providers to be able to duplicate their customers’ Internet and phone use and transmit it to police. Law enforcement officials still have to obtain a warrant under the proposed new rules, but privacy advocates fear abuse of such extensive tracking.
Posted by Cynthia Brumfield at 8:23 AM | Print | Comments (0)Courtesy of Search Engine Watch, this piece in the Phoenix Business Journal claims that Google will announce today a plan for setting up “major new operations” in the Phoenix market. It’s not clear what kind of operations, exactly, but the Journal piece says they relate to “online auctions and expanded Internet and technology services.”
The only new bit here is the online auctions part. Is Google planning to mount serious competition to eBay? Or is Phoenix simply the next market for Google’s expansion into the Wi-Fi arena?
Posted by Cynthia Brumfield at 8:15 AM | Print | Comments (0)Brightcove Founder and former Macromedia chief technologist Jeremy Allaire has a cogent essay that encapsulates the multiple forces at play in the new digital entertainment world and describes the new era of television on the Internet.
We’re in a period of dramatic change within the media and television industry, with a range of macro forces helping to force a collision between the Internet and the world of video and television distribution. This coming transformation—one we will not feel in full force for several years, but which will progress over the next decade-promises to reconfigure the video industry in the image of the Internet. Indeed, the Internet’s forces of openness, global reach, consumer control and participation, and Long Tail economies of scale will create a multimedia universe that no one can fully comprehend.
While Jeremy outlines a host of changes — from content creator to consumer — a few of the key factors driving the new world of TV-over-the-web are worth noting:
A range of technology and business process drivers are forcing this opportunity. These include the following:Posted by Cynthia Brumfield at 7:22 AM | Print | Comments (0)• Global broadband reach, with hundreds of millions of users worldwide now on broadband connections and the number expected to reach nearly 500 million people in the coming years, a footprint that no single carrier or operator could ever conceive of matching.
• Home and wireless networks that make it possible to move high-quality video media over open networks.
• Powerful and open media formats that deliver rich, interactive media experiences that have not been possible on television (e.g. Macromedia Flash), and compressed and downloadable formats that deliver DVD-quality experiences that can be secure and portable (e.g. MPEG-4, Windows Media).
• The convergence of the consumer electronics (CE) and personal computer (PC) industry, with an emerging explosion of open, consumer media devices (TVs, game consoles, DVD players, media center PCs, portable video players) that can acquire media from the Internet and personal computers.
• Patterns of distribution on the Internet that are disruptive, decentralized, and favor massive new economies of scale for any size Web site or content owner (e.g. Long Tail economics enabled by search, social software, recommendation systems, and new forms of syndication).
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