Have no doubt that we are seeing a great Paradigm Shift...in fact the past few years the pace

of the evolution of the new technologies and how they are going to change the entertainment
business as we know it make the invent of the wireless (radio), the flickers (movies), TV and

black and white TV to color and MTV look like snail pace evolution...to see some of the present

and future of the Internet...visit our 2006 coverage of CES...the Consumer Electronic Show

Marshall McLuhan said,
 "By the time one notices a cultural phenomenon, it has already happened."

Verizon Wireless to Launch Live TV

Verizon Wireless will announce its long-awaited live TV service for mobile phones Jan. 7, although it will launch with fewer than one-dozen channels, according to executives at companies involved in the launch.

The announcement is expected at a press conference Sunday at the Consumer Electronics Show in Las Vegas. Executives scheduled to speak are Denny Stringl, president and chief operating officer of Verizon Communications; John Stratton, Verizon's executive vice president and chief marketing officer; and Bob Ingalls, executive VP and CMO of the Verizon Telecom business unit.

The live-TV service, provided through Qualcomm’s MediaFLO USA subsidiary, will have channels provided by at least three broadcast networks, according to an executive familiar with the announcement. Until now, Verizon Wireless’ V CAST video service has consisted of only on-demand clips.

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NEW YORK (Reuters) - Viacom Inc. (NYSE:VIAB - news) on Friday demanded that Google Inc.'s (Nasdaq:GOOG - news) online video service YouTube remove more than 100,000 video clips after they failed to reach a distribution agreement.

Viacom said it sent a notice to YouTube on Friday morning asking the popular video-sharing site to remove clips from Viacom-owned properties including MTV Networks and BET.

The media company controlled by Sumner Redstone said its pirated programs on YouTube have generated about 1.2 billion video streams, based on a study by an outside consultant.

A YouTube spokeswoman said it would comply with the request and added, "It's unfortunate that Viacom will no longer be able to benefit from YouTube's passionate audience, which has helped to promote many of Viacom's shows."

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Digital Sales Hit New All-Time Highs
U.S. digital track sales hit a new all-time high in the week after Christmas with 30.1 million sold, according to Nielsen SoundScan. The flurry of downloading in the final week of the year marks a 51% jump from the 19.9 million digital tracks sold during the same seven-day span a year ago. Additionally, sales of digital albums were up, with volume of just over 1 million bundles - the first time digital album volume has crossed the million plateau for a single week.

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IPTV
If you can't stand to miss one night of Randy and Frances on Channel 7, Internet Protocol Television (or IPTV) may be able to deliver the news anchors to your hotel room. A number of devices use compression technology to relay whatever your set receives at home (via cable or over the air) to other PCs in your home or over the Internet.

Honest Technology Co. ( honestech.com) recently released the My-IPTV & Cam Anywhere Deluxe, a small box that doubles as a security camera and a home TV tuner for playback on PCs.

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FIRMS NOW LOOKING AT MP3 FORMAT, ONCE ANATHEMA, FOR DISTRIBUTION
By Troy Wolverton  Mercury News

For years, the recording industry has fought the popular MP3 music format.

Because consumers can potentially make unlimited copies of MP3 songs, the major record labels have seen the format as a threat to their business. But instead of continuing a battle that many think the industry is losing, some analysts believe the labels are about to embrace the technology and figure out how to make money off of it.

``The record labels recognize that it's tremendously important to protect content from unauthorized distribution,'' said Eric Garland, CEO of BigChampagne, a market research firm focusing on digital media. ``The one goal . . . that trumps that is to sell the legitimate consumer popular music in the form he wants it.''

Some in the music industry have already embraced the popularity of MP3. EMusic, for instance, which focuses on the independent labels that typically handle less popular artists and albums, offers some 1.5 million songs, all in MP3.

And there are indications that the Big Four record labels are starting to come around. This year, Yahoo's music store ran four promotions offering MP3-encoded songs from major artists including Jessica Simpson and Norah Jones.

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Toshiba, HD-DVD's biggest supporter, has been preparing to aggressively push the format at the International CES 2007. In addition, HD-DVD backers will hold a news conference the night before the exhibition, Toshiba executive Yoshihide Fujii said.  

A group of companies supporting the HD DVD format will hold a news conference on January 7 on the eve of the massive consumer electronics exhibition to announce their plans for 2007, Yoshihide Fujii, president and chief executive officer of Toshiba's digital media network company, said Thursday.

Toshiba, which is the biggest backer of the format, will join the news conference and plans an announcement, but Fujii wouldn't disclose what it will be.

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Amazon breaks one-day holiday sales record
Amazon.com logged more than 4 million orders on Dec. 11, which bested the online retailer's previous one-day holiday record of 3.6 million a year ago. Online orders ranged from Xbox 360 consoles and iPods to cold-fighting supplements and DVDs.    12/06

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DVD SALES ON THE DECLINE

Persistent year-over-year declining sales of DVDs at Best Buy and Circuit City stores might portend trouble for the movie industry, according to a Wall Street analyst report released Wednesday.

Pali Research analyst Richard Greenfield, who raised concerns about the home video industry in October with a report titled "DVD Party is Over" and again last week, said Wednesday that "2007 appears even more ominous for film studios."

His latest beef comes courtesy of Circuit City Stores Inc., which reported a $16 million quarterly loss Tuesday, sending its shares tumbling 17.5% that day.

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PBS EXECUTIVES HAVE humbly figured out they don't know what you want to watch. They have an easier way: You decide.

It's hard enough to figure out what TV viewers want and then gain buzz for new shows. That's especially true for new programs that seemingly fly under the radar on PBS.

So, PBS has decided to premiere three science series pilots on New Year's Day via streaming video on pbs.org. Then PBS television stations will run those pilots starting on Jan. 3. Viewers will then vote for their favorite, which will move on to become a new 10-week series projected to debut in fall 2007.

It's kind of smart for PBS, forming its own public focus group online while shows are more or less in their development stage.  This is the kind of TV interactivity the industry has always talked about.

Commercial broadcast networks currently don't let viewers have this kind of public input. That's what high-paying TV executives get paid for--those who make big, tough, and potential career-winning moves on a "Kidnapped" on NBC or a "3 Lbs" on CBS.

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Back Talk From YouTubers

NEW YORK (AdAge.com) -- CBS is quite happy with its director's channel on YouTube. So happy that it sent out a press release touting its 29.2 million views for its more than 300-plus video clips it has uploaded to the video-sharing site and the viewers its brought to its late night shows.

FROM THE department of I-didn’t-see-it-coming: CBS is getting back into the record business and Oprah Winfrey will start up two prime-time reality series.

CBS had been in the record business for decades until it sold the Columbia Records name to Sony in the late ‘80s. Now the music business is very different, with low start-up fees for developing artists, thanks to the low start-up fees in the digital music space.

CBS feels it can make some money. It certainly has the platform as a marketing tool for those musicians--via television, radio, or on CBS’s broadband channel. CBS doesn’t even need to make a complete CD or albums. It can just release a couple of songs on iTunes, for example. It won’t need the massive overhead of other established record companies

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Internet Leads Advertising Growth In 2007
The New York Times

The ad forecast season is well underway. Yesterday, a flood of forecasts came across our desks from industry analysts and research and consulting firms. Their numbers and prognostications vary, but all point to one glaring fact: 2007 should be a poor year for traditional media.

We don't worry about that here, because the online forecast continues to be rosy. Indeed, in a big way, the Internet will help carry the ad industry's overall growth next year to be between 2% and 5%, according to an average compiled by the New York Times. While this is a lower number than the projected 3% to 6% this year, 2006 was a World Cup, Olympics and election year--all bumped up advertising.

The forecasters peg the percentage gain in Web growth in the high-double digits for next year, while TV, radio and newspapers will either see slowing growth or flat year-to-year ad revenue and, most likely, on-going audience declines. Zenith Optimedia expects Internet ad spending to grow 29% from 2006.

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InDplay: eBay For User-Generated Video
Business Week
The user-generated content movement (or at least the ethics of it) is making its way to the silver screen. A startup called InDplay, which is backed by Google CEO Eric Schmidt, seeks to be the middle ground between sites like YouTube and the select world of theater distribution.

For the little-guy filmmakers, the traditional methods of licensing films are too expensive, exclusive and inefficient for almost everyone but major players. InDplay aims to solve that problem by being part eBay, part IMDb (the online movie database). It allows anyone who owns rights to video to register as a seller and upload their content to a database where buyers, representing theaters, DVD, TV, cable Internet sites and wireless channels, bid against one another for the right to distribute their film. They bid via email and purchases are made via PayPal or wire transfer. InDplay makes money by taking an 8% commission.

When you think about the licensing mess that is Hollywood, it seems inevitable that the Web, through digital brokers, should help simplify the process of connecting buyers and sellers of film. In other areas of content distribution, startups like Pump Audio, Zattoo and Lulu are jumping into the digital brokerage market to help niche providers of music, video and book content with audiences online.

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MySpace's Biggest China Problem Isn't Censorship
Marketwatch.com

For News Corp., success in China for MySpace will have a lot less to do with the fact that the Chinese government censors content than the reality that the social network doesn't come from there. None of the major U.S. Internet companies dominate their respective sectors in the Chinese market. Even after Google officially set up shop in the country, censoring its content at the behest of Beijing, Baidu.com lengthened its lead as China's top search engine.

Moreover, online advertising isn't the big business in China that it's become in the U.S. and the EU. The investment bank UBS estimates that the country's online ad sales will reach about $3.6 billion in 2010, up from just $538 million last year. UBS also expects search advertising to be the key driver of online sales during that time, growing at a compounded annual rate of 60% in the next three years.

While Google, Yahoo, and eBay have all stumbled in China, the other difficulty facing MySpace is that other social networks already exist. MySpace may be a powerful brand in the U.S. and certain EU countries, but in China, MSN Spaces does very well, as do video-sharing and social networking startups Tudou, Rox, Wangyou, Uume and Mop.

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Yahoo and Reuters: Now Accepting Citizen Journalist Submissions
The New York Times

A new demand for citizen journalism has come right on the heels of the user-generated video boom. Just yesterday, Reuters and Yahoo announced that anyone with a digital camera or a camera phone could submit pictures and video of news events, to be placed throughout Reuters.com and Yahoo News.

Reuters said it would also start to distribute some of the submissions to the thousands of print, online and broadcast media outlets that subscribe to its news service. It also hopes to develop a site comprised completely of user-submitted photographs and video.

"There is an ongoing demand for interesting and iconic images," said Chris Ahearn, president of the Reuters media group. Reuters and many other news organizations have always bought newsworthy pictures from "stringers," individuals and part-time contributors, but as Ahearn said,this is like seeing the whole world as potential stringers. The Yahoo-Reuters program is called "You Witness News."

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Clear Channel Sold for $26.7 Billion

Thomas H. Lee and Bain Capital Win Auction for Radio Stations, Outdoor
November 16, 2006

 

NEW YORK (AdAge.com) -- Clear Channel Radio's days of trying to get Wall Street's respect are over. The radio giant announced today its sale to a group led by Thomas H. Lee Partners and Bain Capital Partners, in a deal worth approximately $26.7 billion, which includes the company's $8 billion of net debt repayments.

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 Anheuser-Busch Cos.' 2007 media plans call for significant increases in marketing spending, but network TV shouldn't expect to see any of the No. 1 brewer's expanding largesse.

"We will be significantly increasing our total spent, with revisions in our media mix to reflect the viewing habits of our consumers," Chief Financial Officer Randy Baker told investors in New York this morning. Those revisions, Mr. Baker went on to explain, include a "significant shift into cable," and a doubling of digital spending.   CHICAGO (Adage.com) --

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Clear Channel, Google Join Web Forces
By Ken Tucker, Nashville
  Two media giants are teaming up to capture bigger shares of the online space.
As expected, Clear Channel Radio’s online unit will exclusively use the search engine Google to provide search and advertising services on its network of more than 1,100 station Web sites.
The advantage to users, according to a Clear Channel release, is that they will be able to run Google searches without leaving station sites.
The bonus for Clear Channel’s local advertisers is that they will be able to have their ads appear first, ahead of ads generated by Google and before users' search results.

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MySpace Enters Japan

MySpace.com and Tokyo-based Internet service provider SoftBank confirmed widespread speculation Tuesday (Nov. 7) by announcing the launch of MySpace Japan.

As previously reported, Tokyo-based MySpace Japan is owned 50-50 by the two companies and is MySpace's first joint venture, as well as its first entry into Asia.

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New Comedy Central Tool Lets Users Syndicate Content
The Hollywood Reporter via Reuters
Viacom on Wednesday announced that its Comedy Central network is refining its broadband strategy, in light of the uncertainty over the presence of its material on video sites like YouTube.

Motherload, Comedy Central's Web site, is now adding a video player that allows users to grab and embed their favorite clips from its shows on their own Web pages. The new video player is part of a broader effort to make over the channel's Web site. The player uses Macromedia Flash, the same format as YouTube, and the clips will be ad-supported. This, by the way, could become a trend for media companies wanting to circumvent the problem of online video copyright infringement: Let users control where your clips end up, as long as you can sell an ad on it.

At present, Viacom's policy with respect to YouTube is unclear. A month ago, the media giant asked YouTube to remove all its Comedy Central clips from the site; later, it mysteriously relented. Sources say a deal between YouTube and Viacom is imminent.

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THE LATEST NEW TECHNOLOGY COMING down the path of change is called switched broadcast. This new bandwidth-expanding technology, hotly pursued by MSOs and telecos, makes it unnecessary to deliver hundreds of channels simultaneously to a subscriber's home. Instead, switched broadcast uses the two-way digital plant to deliver digital content toward addressable nodes. The effect is that only one channel at a time is delivered to a digital set-top box (and TV), not the hundreds of channels we receive today.

This dramatic change in distribution technology, which is largely invisible to the consumer, allows operators to free up valuable bandwidth behind the scenes for (what else) additional digital services.

Switched broadcast is presently being deployed by a number of MSOs--and yes, the telecos have likewise been very keen on this from day one. The benefits to bandwidth are obvious when calculated in the "bits moved" savings realized by the operators, but consumers will also benefit by virtue of faster broadband delivery, more telephony services, improvements in on-demand services, etc. So what's the big deal? All this accomplishes is to bring more profitability to the MSOs and telecos, right? Not exactly.

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Free AOL Smells Like Bubble 2.0
The New York Times
Yes, it's 1999 all over again. Web start-ups are cropping up with names like Bebo, Squidoo and Moblabber. Start-ups like YouTube, less than 1 year old and unprofitable, are being sold for $1.65 billion. And the business plan known as Free has returned.

But the difference these days is established companies like News Corp., Google and Yahoo are taking the gamble on startups that don't make any money--not investors--although they will lose if the gambles turn out to be ill-advised. The most surprising participant in "Web Bubble 2.0," is Time Warner's AOL. Still, shareholders have applauded the company's decision to phase out of the ISP market to offer content for free.

For a small number of Web newbies, the model of trying to be all things to all people is great, but if you know how to find your IP address, subscribe to RSS feeds, or know what "FWIW" stands for, AOL, Yahoo et. al., are too mass-market for your tastes

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Social networking goes mobile
In a new twist on social networking, the startup known as loopt will team with Boost Mobile to offer the company's 3.8 million users, mostly aged under 25, the ability to track their friends through text, photos and GPS technology. "Historically, that MySpace generation has been connected to the personal computer and the personal computer only," said James Brehm, wireless analyst with Frost & Sullivan. "This is the next step and it's a giant leap -- it allows you to do it on the move."   The Mercury News (11/14
Cingular to offer wireless banking service
Cingular Wireless plans to launch a mobile-phone banking service early next year in a deal with Firethorn Holdings LLC. Cingular said the wireless banking service will work on most handsets and will allow users to check account balances, transfer funds and pay bills.   Reuters (11/15),   The Wall Street Journal (11/15)

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Six airlines, including Continental Airlines, Delta Air Lines and United Airlines, will offer passengers iPod seat connections by the middle of next year. The connections will power and charge iPods during flight and allow travelers to view the video content on seat-back displays.

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The growth potential of Internet advertising has been underestimated because the predictions did not include advertising on video, social media or mobiles, Terry Semel, CEO of Yahoo, said Tuesday.

In a speech in London, Semel said predictions for online advertising had covered only graphical and search advertising.

"Video, as you all know, will become a major factor on the Internet," he told the Internet Advertising Bureau Engage 2006 conference.

"It will be ever present throughout the Internet, and it will find its proper way to advertise," he said. "So whether it's mobile or whether it's video or whether it's more and more community (social-networking sites), these factors have not gone into those numbers, so we think the actual growth potential of advertising online is really being understated."

Semel said sponsorship, different forms of advertising, and more innovative and clever ways to integrate advertising with video online would all develop quickly.

Media-buying and -planning firm ZenithOptimedia has said the Internet will receive a greater share of global advertising spending this year than outdoor outlets such as billboards, and it is set to overtake radio soon.  Reuters Nov/06

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TV Execs View YouTube as Friend, Not Foe

At the 'Future of Television Forum'

By Andrew Hampp
Published: November 17, 2006

NEW YORK (AdAge.com) -- Here's one group of people you wouldn't expect to be big fans of YouTube: network TV executives. In a panel discussion at the Future of Television Forum at New York University's Stern School of Business, David Poltrack, CBS's chief research officer, said YouTube has yet to do anything to adversely affect his network's programming.

No one wants to take [their content] off YouTube,' said CBS chief research officer David Poltrack.

What consumers want
"We're in a position right now where no one wants to take [content off YouTube]," he said. "When you have something the public really wants, the economic value in that is to come up with a way to satisfy the rights holders and serve the consumers."

While iTunes put a legal spin on music piracy, Mr. Poltrack said TV thrives better online if users can still stream content for free from the networks' ad-supported models.

"If they're [consumers] going to steal it, give it to them anyway," he said. "But also make it easier to access and present it better than YouTube or BitTorrent or anywhere else."

With TV moving into iPods and cellphones with varying levels of features, the mobility vs. quality debate is one that is increasingly shaking up the TV business, said David Del Beccaro, president-CEO and founder of Music Choice.

High-def and high-tech
"When we survey consumers, the No. 1 technology they want is high-definition TV," he said. "So there's two things going on simultaneously -- the experience is getting more and more interactive while it expands in its distribution on small screens. But what's ideal for consumers right now is surround sound with a high-definition TV set."

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Experts predict boom in USB drives for data storage
USB drives, capable of backing up data from virtually any kind of operating system, are proving to be "one of the most useful and affordable tools anyone can have," one user says. Although the drives have been around for a while, big jumps in storage capacities and sharp drops in prices could lead to widespread adoption

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A new study from Kagan Research predicts that the video on demand business is still a "major" potential revenue stream, predicting that VOD will become a $1 billion-plus business by the end of the year.

That comes despite acknowledgment of various potential hurdles, including bandwidth constraints--cable is pushing hard to convert bandwdith-hungry analog customers to digital--competition from DVRs, and digital rights management issues.

But Kagan says that the growth will come primarily from sub growth in existing VOD operations, rather than systems adding VOD.

Kagan estimates there were 26.2 million VOD homes through the first six months of 2006, or about 86% of all digital cable homes, with that VOD component growing to as much as 65 million homes within 10 years, it predicts.

The study says subscription VOD accounted for about 10.5 million homes in 2005, projected to grow to 16.3 million by the end of 2006.

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As video sites like YouTube and Revver continue to surge with Web users, traditional media outlets are struggling to transform their Web sites into video platforms.

This morning, Jonathan Klein, president of CNN in the United States, told an audience at the Ad:Tech conference in New York that CNN streams 50 million short videos a month. YouTube, by contrast, streams more than 100 million videos a day.

"There are tricks to converting users into viewers," Klein said, implying that traditional media hasn't quite figured those tricks out. But, realistically, it's hard to imagine any tricks that will work to increase TV viewer ship online during the day. The most obvious reason: It's a lot easier for people to quietly read text at a cubicle than try to watch--and listen to--TV-like clips on CNN.com. If publishers like CNN are counting on people accessing the content from home, they're going to have to give the audience something beyond typical TV content. After all, when people want to watch Anderson Cooper, they can do so at home on a big screen, without the bandwidth-related glitches that still occur online.

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Can Daily Motion Challenge YouTube?

The French video-sharing site already has 16 million page-views a day. Can it resist its giant U.S. rival by going international?

As the video-sharing phenomenon spreads worldwide, one of the few local sites to tackle the YouTube behemoth has emerged in the heart of Old Europe. With 9,000 new videos pouring in each day and daily page views surpassing the 16 million mark, Paris-based site Daily Motion looks poised to grab a piece of Europe's fastest-growing online audience.

It's not surprising that France, with its strong cultural and linguistic identity, should give rise to a non-English video-sharing site. In fact, Daily Motion (www.dailymotion.com) actually was online before YouTube, which formally became a part of Google on Nov. 14. "Any country that has its own language is absolutely ripe for specialized content," says Mark Mulligan, an analyst with Jupiter Research in London. "There's a clear opportunity for the competition to steal a chunk of the French market."

The question is, how much? Despite its late entry into France, YouTube already has managed to grab 9.1% reach there, compared with 10.3% for Daily Motion, according to figures from market tracker comScore. Across Europe, YouTube has around 10% to 12% reach, vs. 2% for Daily Motion. About half the video clips on Daily Motion are in French, with many of the rest in English.

Outflanking Google

Of course, Daily Motion dreams of big growth. But in recognition of YouTube's clout, it is also adjusting its strategy to exploit other opportunities. That includes enabling uploads to the site directly from Webcams (something YouTube hasn't done yet), and drawing heavily on local content—say, highlights of the latest Perpignan-Béziers rugby match, or presidential hopeful Ségolène Royal's most recent TV interview.

Online Video Poised For Big Growth
eMarketer
In a recent poll, the American Association of Advertising Agencies said overwhelmingly that online video would show the greatest growth among new media in 2006. Some 50% of the group's ad agency reps said online video would show the most growth--followed by podcasting, with 30%, and blogs, the remaining 20%.

Stats from eMarketer back those claims: According to the research aggregator, spending on online video will reach $410 million this year--an 82% gain over last year's $225 million. In two years, eMarketer says spending should top $1 billion--and by 2010, as bandwidth becomes cheaper and content delivery speeds are even faster, Internet video advertising will be a nearly $3 billion business.

In a new eMarketer report, analyst David Hallerman points out that this still represents a small percentage of overall online spending. This year's $410 million contributes just 2.6 percent to the $16 billion total. Although the vast majority of dollars go to the biggest players, YouTube and other viral providers should increase their share of online spending 10%.

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Adinterax is bought by Yahoo.com

Amid criticism that is has missed out on some of the larger recent deals in the online media space due to its slow moving nature, Yahoo has announced a pair of smaller investments in companies that should help bolster its own advertising offerings.

First, the Sunnyvale, Calif.-based company has acquired a 20 percent investment in Right Media, a company that operates an automated Web-based exchange for the buying and selling on online advertising through an open auction. According to the company, more than two billion impressions are traded each day on the exchange, with more than 11,000 buyers and seller participating.

As part of the deal, Yahoo says it will begin selling some of its own remnant ad inventory within the Right Media Exchange, which mostly features inventory from second tier publishers, such as Looksmart. Yahoo said it does not plan to sell its premium ad units through the exchange.

"Yahoo believes an open and transparent ad exchange is an innovative new distribution channel for non-premium inventory and encourages competition in the market," said Greg Coleman, Yahoo's executive vp, global media sales. "Participating in Right Media's leading exchange is consistent with our strategy to extend Yahoo's audience to additional marketers, and to help them deliver the right ad to the right person at the right time."

Secondly, Yahoo said it has struck a deal to acquire AdInterax, a company that produces rich media advertising technology and tools, in its entirety for an undisclosed amount. Going forward, Yahoo said it plans to offer its graphical advertisers access to set of AdInterax tools which will enable them to produce more dynamic creative executions that boast of more sight sound and motion - free of charge.

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AOL To Offer Movie, TV Show Downloads
  Movies and television shows from Paramount Pictures will be available for sale through AOL's new video portal under a deal announced Monday.

Classics such as "Breakfast at Tiffany's" and "Chinatown" and newer releases like "Mission: Impossible III" will be sold for US$9.99 to $19.99 each, comparable to fees at online services CinemaNow, MovieLink and Guba as well as sites operated by MySpace owner News Corp.

Consumers will own the movies and can transfer them to as many as three other computers or portable devices that support Microsoft's Windows Media Player technology.

As more Americans get high-speed broadband connections at home, studios and television networks have been experimenting with ways to distribute their programs over the Internet. Some show programs for free on their Web sites or at AOL with ads, while others sell them outright through Apple Computer's iTunes Music Store, Amazon.com's Unbox and others.

The Paramount offerings, which include television specials, are for sale only.

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GOOGLE BUYS YOUTUBE.COM

SAN FRANCISCO (Reuters) - Web search leader Google Inc. on Monday said it agreed to acquire top video entertainment site YouTube Inc. for $1.65 billion in stock, putting a lofty new value on consumer-generated media sites.

The deal, the first to value one of the new crop of user-participation Web sites at more than $1 billion, combines two of the most popular Internet brands: Google, synonymous with Web search and rapid innovation, and YouTube, a Silicon Valley upstart that has spearheaded the video-sharing craze.

In anticipation of the acquisition, investors pushed shares of Google up $8.50, or 2 percent, on Nasdaq on Monday to a closing price of $429.00 -- a level not seen since late April. In extended-hours trade following the announcement of the deal, Google stock dipped to $427.63.

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AOL Needs To Narrow Focus
BusinessWeek.com
As AOL's identity crisis persists, what can Time Warner do to bring its limping Internet division back to prominence? The move to gradually dump its dinosaur Internet service was a good one, but now the company needs a content strategy to keep customers. Video, of course, has to somehow figure into that mix, and while AOL has forged some nice content deals with TV studios, music labels and parent Time Warner, its myriad competitors have done the same thing. Why should users go to AOL to see video content when you can find the highlights (however illegally) on YouTube?

Besides, content deals just aren't that big a deal anymore. Yesterday, the Time Warner company announced it would offer Paramount Studios' movies and television shows on its site, but you can already do that at Movielink. And many Web users will just continue to download content illegally, anyway.

So how does Time Warner right the ship? Some experts think the future of Web content is about specialization. For example, YouTube is the destination for user-generated video. Yahoo! Finance and MarketWatch are places you go for stock quotes and company news. Facebook is the social destination for college kids. You gotta be "relevant to me," says David Martin of Interbrand. In other words, pick a career path, and stick to it. Then fight to get to the top. - Read the whole story...

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Yahoo Sees Social-Networking Sites Competing For Ads
Reuters
There is big-time pressure now on Yahoo to make a purchase after Google's assumption of YouTube and poor third-quarter earnings. Its Web audience--Yahoo's core currency--is moving away from its portal service and spending more time on social media sites like MySpace, YouTube, and Facebook. In fact, it blames its weak fourth-quarter outlook on a glut of competing social networking sites.

Speculation is rife that Yahoo might still be trying to buy Facebook--as MySpace and YouTube are no longer for sale--but both parties appear to be deadlocked over price. "Facebook is only of value if Yahoo pays the right price," says Jim Friedland, analyst with Cowen & Co., referring to the $1 billion price tag that's been floated.

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New Tool Broadens Google's Reach, Adds Customization For Publishers
The New York Times
Google copies Yahoo? How's that for a change? On Monday, the world's No. 1 search engine rolled out a new tool that lets Web sites and blogs offer visitors a customized version of Google Web search. The new product lets Web site owners control search results, choosing which pages they want to include in their index and ranking them accordingly. It's also free.

To build a custom index, users fill out a Web-based form, and are then given a code for a search box that they cut and paste into their own Web pages. The ease is astounding, and should help drive Google's reach and usage.

Andrew Frank, a research director with market research group Gartner, also likes the move. "This definitely helps improve the relevance and skip the noise."

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Pictures, With Map and Pushpin Included

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GoogTube Deal to Change Media Economics
The Hollywood Reporter
Together, Google and YouTube present the first viable new-media successor to broadcast and cable television, which has "squandered the ad-supported critical mass they have enjoyed" for decades, says the trade press. There is no going back from a Web-based, on-demand media future, and the Google-YouTube infrastructure will offer the tools needed to manage and monetize that future.

The implications are twofold: One, the cost of content creation will fall rapidly; two, the best content from consumers and professional producers alike will rise to the top, lessening the studios' influence over media consumption.

YouTube is a brilliant buy for Google, because viral video sites reflect the demands of a younger, first-mover consumer base that, like MySpace, will broaden in age as it matures. Once you combine Google's unmatched searching technology with YouTube's 100 million-plus videos, and add the ability to charge consumers a fee to access or charge advertisers for accessing quantifiable targeted consumers, you get an efficient, lucrative new-media model.

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 AS IT DOES WITH ITS light bulbs, General Electric wants better brightness and efficiency from NBC. The network is now focusing first on effectiveness, hoping illumination comes soon afterward.

Thus GE's NBC Universal Television Group has finally gotten around to focusing on layoffs--of perhaps as many as 700 NBC employees. In 2001, with NBC still No. 1, the network cut almost 600 jobs. Now that it's in fourth place--though some programming conditions are improving--sizable layoffs will be a lot easier to understand, like throwing a light switch.

An obvious problem area is NBC's news operations-- targeting its still-in-last-place cable network MSNBC. But that's not all. Jeff Zucker, chief executive of NBC Universal Television Group, has said that scripted programming is too expensive, and not enough advertisers are interested. So for scripted shows, expect cheaper deals--or no deals.

NBC Universal Chairman Bob Wright said the company instead would move increasingly toward digital media as a way to restore the company to double-digit growth next year. GE's earnings showed NBC profitability sinking 10% in the last couple of quarters--though the company promised better profits in the fourth quarter.

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Bertelsmann Establishes Venture Capital Fund for Digital Media

Bertelsmann has established a venture capital fund for digital media investments and created a company to execute these investments. With an initial funding of Euros 50 million ($62.8 million), the mission of the new Bertelsmann Digital Media Investments (BDMI) is to tap into new technologies and digital media innovations to support Bertelsmann's divisions across the media landscape.

Richard Sarnoff, president of Random House's corporate development group and its venture arm, Random House Ventures, will also serve as president of BDMI. He will report to Bertelsmann's CFO Thomas Rabe in this capacity and will continue to be based in New York.

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UMG Enters The Media Biz
The New York Post
Universal Music Group, which just filed a copyright-infringement suit against video-sharing sites Grouper and Bolt, is launching a new Internet service that will give consumers legal access to the record label's catalog of artists. The move may be an assault on YouTube, since UMG just signed a deal last week. Rob Wells, the senior vice president of UMG International, described the subscription-based service, which launches in the UK today, as "a direct-to-consumer broadcast network which is completely under Universal Music's control."

Wells might want to note that "control" isn't the future of media, which is precisely why YouTube and MySpace are dominating media headlines while pundits continue to forecast the death of "old" media companies that are unwilling or unable to adapt to a Web-based, consumer-controlled future.

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Video-sharing Web site YouTube Inc. struck content deals Monday (Oct. 9) with Universal Music Group, Sony BMG Music Entertainment and CBS Corp.
Vivendi's Universal Music Group said Monday it agreed to give YouTube viewers access to thousands of music videos. The company said it and its artists will be compensated not just for the official videos, but also for user-generated content that incorporates Universal's music.

Financial details of the deal were not disclosed.

Universal Music Group said it will also use technology to filter out copyrighted content not authorized to appear on the YouTube site.

Sony BMG Music Entertainment, a joint venture between Sony Corp. and Bertelsmann AG, also said Monday it will make video content available on YouTube -- and will also let YouTube users include some catalog songs in their own amateur video uploads.

Sony BMG said it will share advertising revenue with YouTube for all music videos that incorporate audio or video works from the Sony BMG library.

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CBS and yahoo cut a deal

It's clear that TV networks are still experimenting to come up with the best way to place programs on the Web.

This morning, CBS and Yahoo unveiled yet another variation. A new deal between the companies calls for Yahoo to start offering news clips from 16 local CBS affiliates. Each will offer between 10 and 20 news video clips per day, while Yahoo will sell ads and share the revenue with CBS.

This deal marks the latest in a myriad of different strategies TV companies employ to distribute content on the Web. Consider, TV networks now sell entire shows on iTunes, stream programs from their own Web sites, distribute series on social networking sites, debut programs on portals, place short clips on YouTube and cut deals with Google.

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McCollum: TV industry latching on to evolving technologies

Mercury News  October 2006

Just about this time last year, Apple and the Walt Disney Co. dropped a bomb on the television industry: the announcement that series episodes from Disney-owned ABC and the Disney Channel would be available to download on Apple's new video iPod.

At the time, television executives were more than a bit skittish about new technology and delivery systems for their products. That was particularly true regarding Web-based formats, which generated fears of piracy and of diluting the viewership numbers that networks and non-premium cable channels use to sell advertising.

But the Apple-Disney deal jump-started a rush to alternative ways of bringing TV shows into American homes. Just 12 months later, the major networks and cable channels are making a growing amount of their product available for free or for nominal charges on a wide range of platforms: iTunes, Google, Yahoo, Amazon, AOL, their own Web sites and cable's video on demand (VOD).

You even can get video clips -- although rarely full episodes of shows -- via still-nascent cell-phone technology being used by Cingular, Sprint Nextel and Verizon.

The changes are taking place so rapidly that Leslie Moonves, CEO of CBS, has said, ``We are changing our tires on a car going 80 miles an hour.''

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Interview: Eric Schmidt, Google CEO
Financial Times Oct 2006
In an interview with Eric Schmidt, Google's CEO, post-YouTube, the British paper wanted to know how the company justified paying $1.65 billion for a company that had yet to earn a dime. Schmidt's answer: We have the best advertising system in the world--and soon, we'll be able to apply it to video, too. "The real reason," he added, "was not the money, and not even the advertising--it was because we believe that video is going to be, and is sort of already, one of the most important new media types on the Internet."

But isn't everyone trying to move into online video? Media companies are clamoring to find an online business model, and most would prefer to drive consumers to their Web sites rather than license it to other sites and settle for a smaller cut of the revenue. Schmidt stressed: "We see ourselves as a technology provider and a distribution network. We're not in the content business... We want those media partners to put their media content ... into this emergent new and much larger system as a result of the YouTube acquisition." In other words, Google wants to force everyone to make friends so everyone benefits, but Google most of all.

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iTunes Offers PBS Shows

Wednesday, Oct 11, 2006  PBS IS MAKING ITS POPULAR shows, including "Nova," available on Apple's iTunes download store. New additions to iTunes include "Antiques Roadshow," "Now," and "Scientific American Frontiers," plus kids' shows "Arthur," "Cyberchase," and "Fetch!"

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Tower Records, the music industry's most famous retail brand, will be liquidated

After a 30-hour auction, the process was won by the lead-bidder, Great American, who put together a consortium of other suitors who were bidding on different components of the retailer. The winning bid was $134.3 million.

“It's a sad day for the music business and I feel badly for all Tower employees," says Jim Urie, president of Universal Music Group Distribution. "Tower was probably the greatest brand that will ever exist in music retail.”

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Fox Streams Prime-time Shows On MySpace.com
by Wendy Davis
Aiming to build momentum for its Fall TV programs, News Corp. Tuesday expanded the roster of Fox shows available online for free. Fox has placed episodes from the current season of "Bones," "Prison Break," "Standoff," "Vanished," "Justice," "Talk Show With Spike Feresten," "'Til Death," and "The Loop" on MySpace.com and Web sites of 24 local affiliates

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When MySpace first launched, it had a strong following among youngsters, especially young musicians and their friends. But now, the over-35s have joined the bandwagon.

New data released this week by comScore shows the majority of MySpace visitors now are over 35. As the presence of boomers and Gen-Xers has grown, the share of visits from younger users has decreased. The proportion of MySpace's audience between the ages of 12 and 24 dropped to 30 percent from 44.3 percent over the last year, per comScore.

These numbers don't signify that teens are abandoning MySpace, but do show the site is skewing older than in the past. And for MySpace, this shift likely is welcome news, as it gives the company an opportunity to broaden its marketing efforts. After all, how many 15-year-olds are going to look at ads about mortgages?

In fact, Fox itself seems to be encouraging this demographic shift, with moves such as placing a "Simpsons" clip on the site. Considering the show is in its 18th season, Fox has reason to think a good number of fans are older than 35.

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Apple Computer Inc. has partnered with Starbucks Entertainment and launched today (Oct. 5) a Starbucks-branded area in the iTunes Music Store.

The area features the coffee retailer's entire Hear Music catalog, which includes albums by new and classic artists, plus compilations and playlists chosen by the Starbucks music staff. Customers can purchase either an entire playlist or individual tracks from the Starbucks Hear Music playlists.

No specific marketing plans or cross promotions were revealed, but Starbucks president Ken Lombard tells Billboard.biz the retailer's stores will carry "significant signage" marketing the partnership. Apple's vice president of iTunes, Eddy Cue, offered no forthcoming marketing plans exploiting the reach of the two brands.

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Will Murdoch Swap MySpace For DirecTV?
Financial Times
DirecTV, once the cornerstone of News Corporation's media strategy, no longer means what it once did to chairman Rupert Murdoch. Now, he's considering swapping his $9 billion stake in the satellite operator with rival John Malone. Liberty Media Chairman Malone actually owns a 19 percent voting stake in News Corp., 11 percent less than the Murdoch family. In 2004, Murdoch introduced a poison pill to curtail Malone from acquiring more shares. The result was that the Murdoch family could not increase their stake, either. Since then, the media moguls have gone back and forth as allies and enemies, but the most recent round of negotiations would swap Malone's stake in News Corp. for Murdoch's stake in Liberty Media Group, the owner of DirecTV. People close to the talks say a deal looked likely, although nothing is expected for several weeks. "News Corp., and Rupert Murdoch in particular, would prefer that Liberty and John Malone not control 19 percent of News Corp

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Nathan Weinberg at Inside Google is claiming that YouTube has moved ahead of Google Video in terms of popularity. I totally agree. But it’s not just Google - these guys have moved ahead of everybody! This week, I caught a roundup of the “Flickrs of video” - here’s the list:

-Clipshack
-VSocial
-Grouper
-GoogleVideo
-Metacafe
-Castpost
-Vimeo
-Revver
-OurMedia

YouTube is way ahead of many of these services - YouTube videos are appearing on blogs and websites all over the place. OurMedia is also excellent, but it’s a non-profit and I’m more interested in startups right now. I’m also a fan of Grouper - it’s definitely one to watch.

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UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT

In an unexpected turn of events, Congress early Saturday morning passed the Unlawful Internet Gambling Enforcement Act, which bars banks and credit-card companies from processing payments for Internet gambling.

There had been rumblings about shutting down the $12 billion online gambling industry for months, but it didn't seem likely that the House and Senate would agree on wording. Until last weekend, that is, when last-minute maneuvers resulted in the bill's passage in both chambers of Congress. The act hasn't been signed into law yet, but that's expected within the next two weeks.

The law's effects are already being felt. Stock of the major Web gambling companies traded in London plummeted yesterday. Additionally, three companies--Gibraltar-based PartyGaming PLC (which runs PartyPoker.com) and 888 Holdings PLC and London-based Sportingbet--said they would stop doing business with U.S. gamblers.

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Napster too had copyright issues. Mark Cuban warns that YouTube is going to have its own copyright issues--ones that have kept big media buyers at bay--or perhaps have angered them. (NBC did have an early tussle with YouTube because of a "Saturday Night Live" clip, but are now good friends and marketing partners with them.)

Cuban was speaking during last week's Advertising Week festivities, as was NBC Universal chairman Bob Wright. Wright talked about YouTube but didn't focus on its copyright issues. He was more concerned about the type of success YouTube had.

Wright called YouTube and MySpace "hits"--akin to what comes, and, unfortunately, goes, in the prime-time TV business. More stable players seem to be those like Google and Yahoo--companies more akin to what a "network" is.

For his own company, NBC Universal takes a wait-and-prove approach when it comes to Internet properties--thus the purchase of the long-time stable Web area, iVillage. Of course, that's what ex-Viacom chairman Tom Freston was trying to do--go after a proven, longtime performer--all because he had a looming boss ready to pounce on any over-priced Internet deal. MySpace, was the company, and he let it go to News Corp. Freston's boss pounced anyway--on him.

That said, even News Corp. chairman Rupert Murdoch has been shocked at the success of MySpace. News Corp. paid $580 million for MySpace. Analysts say in a few years it could be worth $15 billion to $20 billion. Yeah, that's right. Someone made a mistake at News Corp.; MySpace was supposed to be a more modest player.

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by Shankar Gupta, Thursday, Sep 28, 2006 6:00 AM ET NETWORK LIVE, THE COMPANY THAT produced Live 8, has discontinued its relationships with AOL and signed a new distribution deal with MSN to produce live concerts for Webcast. Network Live also has rebranded under the new name Control Room.

For the deal, Control Room will provide 36 concerts in the next year, starting with a Webcast of pianist John Legend's upcoming concert in London on Oct. 2.

AOL, XM Satellite and live event presenting company AEG previously worked with Network Live to produce Webcasts. That deal was entered into after last year's successful Live 8 Webcast. A spokeswoman for Network Live said that the new partnership with MSN provided global reach in its distribution network, greater than what AOL could offer.

Christine Andrews, lead product manager for MSN, said that the deal was part of the portal's push toward offering more original content. "They have the relationships with the labels and the people in the music industry to bring concerts online," she said. "We will be the distribution partners for them, offering the concerts live and on demand."

Andrews added that MSN would be responsible for monetizing the live video content with ads, and the company will sell the space through its newly formed Digital Advertising Solutions team.

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The U.S. government is loosening its grip on the domain name system and the Internet

ICANN -- the Internet Corporation for Assigned Names and Numbers -- a greater measure of autonomy in making decisions about the future of the Internet.

ICANN described the organization's new pact with the U.S. Department of Commerce as "a dramatic step forward."

ICANN, a private, nonprofit international organization, currently oversees the domain name system under a contract that was to expire on September 30. The organization has been the target of much criticism in the U.S. and abroad for conducting its business in private and for keeping the domain name system within U.S. control.

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by Shankar Gupta, Monday, Sep 25, 2006 6:00 AM ET AIMING TO STREAMLINE ITS AD sales, Microsoft Corp. is launching a new division, Microsoft Digital Advertising Solutions, that will allow marketers to purchase ad inventory across all of the company's various properties--including MSN, the adCenter paid search platform, PCs, Xbox Live, and Web-enabled mobile phones--from one sales rep.

The company is aiming to help advertisers save time and effort when buying across multiple media in an increasingly fragmented marketplace, according to Joanne Bradford, corporate vice president of global sales and marketing. "We're addressing the reality of media fragmentation and enabling advertisers to get back to what they do best: creating engaging and creative ads," she said in a statement.

The group also will handle sales into Windows Live, Office Online, and Windows Mobile, as well as through Massive Incorporated, a video game ad network that Microsoft purchased in April. Microsoft says its MSN properties garner 465 million visitors worldwide.

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by Wendy Davis, Thursday, Sep 28, 2006 6:00 AM ET ONLINE PORTAL YAHOO HAS ACQUIRED Jumpcut, a San Francisco video-sharing start-up that offers consumers the ability to not only upload clips, but also to edit them online. Terms of the deal weren't disclosed.

Jumpcut, which launched in April, has done promotional deals with several entertainment companies, including Warner Bros., Starz Entertainment, Fox Atomic and New Line Cinema. For the initiatives, studios have made their own videos available and then invited consumers to use Jumpcut's editor to re-mix the clips by incorporating their own videos.

For instance, New Line Cinema is sponsoring a contest inviting users to create videos of their own worst nightmare using footage from "Friday the 13th." Because Jumpcut has a flash-based editor, users don't have to leave their browsers to create the mash-ups.

Earlier this summer, Jumpcut posted a trailer for the Warner Bros. film "A Scanner Darkly," and then offered users the chance to compete to make the best re-mix.

Jumpcut will continue to reside on its own site, Jumpcut.com, but Yahoo also intends to integrate the feature into its other verticals, said Jason Zajac, vice president, general manager of Yahoo's Social Media Group.

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Yahoo Music's digital subscription service is now offering a complete album in unprotected MP3 format—Jesse McCartney's "Right Where You Want Me." The service's customers can choose to buy the full album in either unprotected MP3 or in the traditional Windows Media DRM format, both for the same price of $9.99.

This is a much bigger step in the unprotected sales experiment from Yahoo's original foray—a personalized single from Jessica Simpson. Both Yahoo Music and Sony BMG downplayed the DRM-free track, saying it was a result of the track's customization feature that adds buyer's names into the lyrics of the song.

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Microsoft Corp. will start testing on Tuesday (Sept. 19) an Internet video-sharing service called Soapbox, the software company's answer to Web sensation YouTube.

Soapbox (http://soapbox.msn.com) is one facet of Microsoft's strategy to create attractive Internet content to lure away billions of Web advertising dollars from market leaders Google Inc. and Yahoo Inc.

Offering everything from funny home videos made by users to clips from old TV shows, YouTube sprung out of nowhere late last year as an entertainment break for millions of broadband Web surfers. In August, the site had 34 million visitors, according to Nielsen NetRatings.

Soapbox will be offered to a limited number of users during an invitation-only test phase, but Microsoft said on Monday it will go fully live as a part of MSN Video within six months.

"We're definitely not blind to the fact that YouTube has a big lead right now," said Rob Bennett, general manager of MSN's entertainment and video services. "It's really early days in online video. This is still act one."

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AT&T Moves Into Web TV
Reuters  Sept  06
It was expected that AT&T would take a stab at Web TV, following in the footsteps of competitors like Sprint Nextel and Comcast. Today, the telecom giant is unveiling AT&T Broadband TV, which will be available to high-speed Web users for $20 per month. Subscribers get access to 20 channels, which they can watch on a computer, laptop or mobile device, provided that their Web connection is at least 500 kilobits per second. The idea is that AT&T will eventually be able to offer Web and TV service from the same place for one combined price, but their big problem is competition from all sides of the media and technology sector. The Web enables content providers to circumvent the need for distributors, allowing them to publish their content on the Web themselves. ABC is the best early example of this, showing hits like "Desperate Housewives" on its site, along with long-form ads. Then there are movie download and online video services, which are popping up all over the Web at a dime a dozen. But the biggest potential Web TV killer is Sling Media's Sling Box, which at $200 lets viewers watch their cable channels on Web-connected devices with no monthly fee. AT&T is teaming with streaming services provider MobiTV to offer the service, which supplies programming from the Food Network, the History Channel and Bloomberg TV, among others.

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YOUTUBE MAKES DEAL WITH WARNER MUSIC

YouTube might be facing the threat of litigation from Universal, but another record label, Warner Music, has forged an agreement with the video sharing site.

The deal calls for YouTube to deploy a new technology to flag videos running on the site that are owned by Warner Music, and then pay Warner a cut of any ad revenue for ads displayed in conjunction with those videos.

With the agreement, the companies appear to have forestalled a thorny copyright battle; the deal allows both YouTube and Warner to profit from the videos, while not depriving fans of access.

Of course, so far Warner has been a major brand supporter of YouTube, so it makes sense that Warner's invested in seeing the video sharing site succeed. Warner earlier this summer promoted "Pirates of the Caribbean" on YouTube, becoming the first major brand advertiser to run display ads on the site. Additionally, last month Warner became one of the first record companies to use a new YouTube ad platform to promote an upcoming album--"Paris," the debut effort from the socialite-singer Paris Hilton.            Sept 06

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Just as MySpace prepares to start selling music downloads, Universal Music Group is hinting that it will sue the social networking site for copyright infringement.

Speaking at a Merrill Lynch conference Tuesday, Universal Music CEO Doug Morris complained that YouTube and MySpace owed Universal "tens of millions of dollars" for copyright infringement.

Universal is in negotiations with the sites, but indicated yesterday that it will sue should talks fall through. "This could be the first salvo from a content player against business models based on user-generated content, much of which relies on copyrighted material," wrote Merrill Lynch analyst Jessica Reif Cohen in a report about the conference. Morris's remarks, she wrote, "strongly suggested the company was planning to take legal action in the near-term to either prevent the illegal use of their content on these Web sites or to ensure the company is compensated for the use of its content."    MediaPost.com   Sept 06

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iTunes to Sell Movies

Apple Computer Inc. said on Tuesday (Sept. 12) its iTunes online music store would begin selling movies from Disney, Pixar, and Touchstone as the company makes its most aggressive move yet into the digital home.

Chief Executive Steve Jobs said newly released movies would initially cost $12.99 if pre-ordered or bought during the first week available. Library titles would cost $9.99, Jobs said at an event in San Francisco where the company also introduced new versions of its iPod digital music devices.

He said there are about 75 films now available for purchase on iTunes and that they would take about 30 minutes to download for those using a high-speed Internet connection.

The new iPods include one with the most capacity to date and sport video games such as Pac-Man and Tetris.

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Album sales -- including those sold via digital download -- amounted to 8.91 million copies for the week ended July 23.

NBC Chief: The Future Is iVillage
Financial Times
Despite a spate of new online initiatives--including online video deals with AOL and Apple's iTunes--NBC Universal plans to center its online activities around iVillage, the women's portal the GE-controlled group bought for $600 million in March. This comes straight from Bob Wright, NBC Universal's chief executive. Wright's assertion comes in anticipation of the relaunch of iVillage's Web site, which attracts about 15 million users a month, mostly women between the ages of 30 and 50. Wright says the redesigned site will feature video and community tools, highlighting the opportunity for cross-branding with NBC programs, like the "Today" show. "You're going to see a lot more editorial combinations. It may be as common to see iVillage bringing material to the "Today" show as the "Today" show bringing material to iVillage," he says. The new iVillage will also feature original programming, like iVillage Live, a television show that will be available both on the site and on the NBC TV network

MTV Ready To Take Its Crown Back
Ad Age
It will come as little surprise that MTV wants its crown back. For years, Viacom--with brands like MTV, VH1, Comedy Central and Nickelodeon--completely ruled cool, yet suddenly it has been forced to take a back seat to sites like MySpace, Facebook and YouTube. The media conglomerate fought back this past week with two potentially key new deals: a video distribution partnership with Google in which the companies share ad revenue in exchange for use of Google's publisher network, and then the acquisition of Atom Entertainment, a company that runs an online gaming portal. MTV Networks COO Michael Wolf says that to help ring in the digital revolution, the company wants to become the on-ramp for consumer marketers to the Internet--a relatively foreign place still for many consumer brands, which MTV will work with to help them get online. He says there will be no restrictions on the Web syndication deal with Google: it was rumored that sites with less than 100,000 users would not be able to participate. "We want our content to create a network effect," he says, adding that the deal "promises to be a groundbreaking way for content to be distributed and monetized on the Internet."

Movie Studios To Allow DVD Copying
CNET News.com
How about that movie industry? Often accused of being anti-consumer when it comes to digital media, the movie biz is actually planning to relax the rules on copying DVDs. Legally downloaded digital movies, which are offered by companies like CinemaNow and Movielink, have completely failed to catch on with the general public. The biggest complaint, perhaps, is that downloaded movies are prevented from being copied to disc to be watched on TV sets. Consumers like their big TVs and massive sound systems; they don't want to have to watch movies on their laptops. Hollywood never allowed the copying of DVDs because they felt movies could be too easily pirated. They were right. But offering a legal alternative is one way to goad consumers into doing the right thing. The idea is to give people what they want, and maybe they won't feel the need to steal from you. That said, there will be encryption technology, of course. The movie biz is calling its digital rights management the Content Scramble System, which is licensed out by the DVD Copy Control Association to help those in the industry protect content

By Ed Christman, N.Y.
  Tower Records is facing an imminent Chapter 11. That’s a certainty, according to top major-label distribution and financial executives, all speaking on condition of anonymity.

But what kind of filing will it be? A prepackaged Chapter 11 deal with an equity sponsor in tow to take over ownership of the company that also has the blessing of the creditors? A Chapter 11, 363 asset-purchase agreement, with the “stalking horse” bid setting the floor price for other suitors to bid against?

That kind of filing would leave the creditors to fight over the proceeds from the asset sale and wrangle with their emotions about whether they will support a new owner going forward. Or could the filing turn into an outright liquidation?

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MTV Wants to Be Marketers' On-Ramp to the Web

COO Michael Wolf Talks About Google and Atom Film Deals

NEW YORK (AdAge.com) -- It might be Viacom's busiest week since it split off from CBS, but MTV Networks Chief Operating Officer Michael Wolf made time and talked to MediaWorks' Abbey Klaassen about its acquisition of AtomFilms.com, how MTVN sees its digital mission and the evolution of its deal with Google.

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Time Wasters Rejoice: More Broadband Options

What's New Online: TNT's DramaVision, Ripe's OctaneTV

NEW YORK (AdAge.com) -- Looking for new ways to waste time on the web? You're in luck. TNT has launched DramaVision, a new broadband channel. Its first big feature is last year's Stephen Spielberg miniseries "Into the West," but other TNT original series will be uploaded as well.

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August 06, 2006,

By Ed Christman, Kissimmee, Fla.
  In one of the most ironic moments ever at a National Assn. of Recording Merchandisers annual convention, Tower Records was named the large retailer of the year on the meeting's closing night (Aug. 5), after the previous three days of the confab were dominated by fears that the 88-unit chain would be forced into bankruptcy.

The Chapter 11 fears were prompted by the news that a pending sale of the chain had unraveled. Additionally, Tower missed a payment to one of the majors and then told all four majors it wouldn't make August payments, which are due beginning Aug. 10. The major labels—EMI Music, Sony BMG Music Ent., Universal Music Group and Warner Music Group—have stopped shipping to the chain, and every independent supplier approached by Billboard at NARM confirmed they also placed the West Sacramento, Calif.-based merchant on "hold," once news of the majors had leaked out.

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Sirius Satellite Radio Tuesday (Aug. 1) raised its year-end subscriber forecast to 6.3 million, from 6.2 million. Early in the year, the radio service forecast it would have 6 million subscribers by the end of 2006, raising it to 6.2 million in May.

The guidance, made during the company’s second quarter earnings conference call, was in stark contrast to XM Satellite Radio, which cut its year-end subscriber forecast last week to between 8.2 and 7.7 million.

In second quarter, Sirius added 600,460 subscribers for a total of 4.6 million. Despite a larger loss of $237.8 million, compared to $177.5 million a year ago, revenue tripled to more than $150 million. The company also raised its year-end revenue guidance to $615 million, from $600 million.    BillboadBiz.com   August 2006

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$900 Million Search Deal Moves Google Onto MySpace

News Corp. Partnership Includes Most Fox Interactive Websites

WASHINGTON (AdAge.com) -- News Corp. is partnering with Google in a $900 million interactive advertising and search deal that will make Google the search engine for most Fox Interactive websites -- including MySpace.com, the companies said yesterday. Under the deal, Google also becomes the prime seller for Fox web ads that Fox itself doesn't sell.

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Why Murdoch Won't Buy YouTube
GigaOM
Many felt that YouTube CEO Chad Hurley's stirring performance at Herb Allen's annual Sun Valley media conference signaled that his company would soon be acquired by the bigger fish circling the pond at the media mogul-fest. Of course, many believe it will be Rupert Murdoch and News Corp., thereby bringing together MySpace and its 80 percent share of the social networking with YouTube's 60 percent share of the online video market. But Robert Young of GigaOM says no way. At $1 billion, YouTube has priced itself out of Murdoch's bargain-hunting range. Young, speaking from his experience of selling Delphi to News Corp., says Murdoch prefers to use cash as his deal currency, not stock. That means the prospect of laying out $1 billion for a money-losing operation--particularly after shelling out $600 million for MySpace--is unlikely.

ZDNet Blog
Russell Shaw of ZDNet pegs YouTube's market value at around $1 billion. Will the company stay private, go public, become acquired, or acquire another company? Shaw seems reasonably certain that YouTube will be scooped up by one of six Internet media majors. In order of their suitability from least to most suitable: First, Adobe systems. The biggest stretch on his list makes sense. YouTube uses its Flash format for most of its videos. This would be a huge promotional platform for Flash, which lacks the distribution of other major video formats. Time Warner-AOL is next. AOL would be a great distribution channel for YouTube. Its new services-based business model would benefit greatly from the added traffic and integration with its other video offerings. Third is Sony. It's perhaps the premiere company in content distribution and video hardware. Sony also owns a movie studio. Fourth, Google. It has plenty of cash, and needs to do something if it's serious about competing in online video. Search integration would be interesting, too. Fifth, News Corp.'s MySpace and YouTube are already natural allies, and to add a video dimension to the world's largest social network means that people could spend consecutive days at its sites. Finally, Shaw says Yahoo would be the most suitable for YouTube. It owns Flickr, the best photo-sharing site. Yahoo could also syndicate YouTube content; it needs something like a key acquisition to boost its share price

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BUSINESS AND IT EXECUTIVES INCREASINGLY turn to podcasts, according to a new joint study by Universal McCann and KnowledgeStorm. The study, based on a survey of more than 3,900 executives, found that 41 percent have listened to podcasts more than once and 13 percent frequently download or listen to them. Additionally, almost 60 percent of respondents said that white papers or analyst reports would be more interesting as podcasts. More than half of respondents--57 percent--said the biggest challenge facing podcasts is that they don't have enough interesting content.

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PQ Media: Online Ad Spend To Surpass $19B This Year
Spending on online advertising will climb to around $19.96 billion this year--marking a 26 percent increase from last year's $15.83 billion, according to new research by PQ Media. National ads will account for the largest single proportion of online ad dollars--$13.57 billion, up 24 percent from last year's $10.92 billion, according to the report.  July 06

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Digital Trends
As Microsoft prepares its second (or third?) entry into digital music, the trade journal Digital Trends asks, what would it take for Microsoft to kill the iPod? The answer? Three things: better design, better ease of use, and a better marketing plan. First, the specifics. Rumor has it that Microsoft's iPod killer will utilize Wi-Fi as the syncing link between its new iTunes-like service and the new device. Wi-Fi would enable Microsoft to provide streaming music--something the iPod can't do. It would also allow consumers to buy music directly from the device--as you could with a cell phone. It would be very tough to design something cooler looking than the iPod. Apple seems to nail this with each new installment. Microsoft does have a history of creating cool looking products--the XBOX 360, for example, comes to mind. It would be equally difficult to trump Apple on ease of use. All of its products just seem to work. There have been a number of quality issues, as in defective iPods, but all in all, it's an easy device to use. Again, the XBOX is another indicator that Microsoft can compete here, but the difference is that Apple is a market leader, so Microsoft has to be that much better to give people a reason to cross over. When it comes to marketing, Apple is both the market leader in spending and execution.     July  Mediapost.com

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Web Video, Brought To You By Flash
The San Jose Mercury News
Adobe Systems' acquisition of Macromedia and Flash late last year could be one of the best tech deals since News Corp. and MySpace parent Intermix. Macromedia's Flash is poised to become the de facto Web site development software of the new entertainment industry. Adobe acquired Macromedia in December for $3.4 billion in stock; since then, consumer-generated media in the form of videos and mash-ups on sites like YouTube has exploded, as has interest in online video advertising. Online video looks set to be the next frontier in Internet entertainment, and many of the biggies--including YouTube and Google Video--use Flash as their technology. Microsoft's Windows Media is still the number 1 video format, handling 60 percent of streaming video, but Flash has soared from nowhere to number two (19 percent of the market) in two years. The San Jose Mercury News attributes the widespread Flash adoption to the proliferation of high-speed Web access and the rise of social networks. It's the easiest format to use--you can embed Flash inside Web sites very easily, and as a streaming technology, it involves no downloads, so its popularity has taken off. As such, it has quickly become the favored format of creative agencies

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Google is poised this week to launch an online electronic payment service similar to eBay's PayPal, according to a report in today's Wall Street Journal.   Rumors of the service, GBuy, have surfaced before, but today's report includes new details about pricing and integration with Google's core search business.

The product reportedly will work in conjunction with AdWords, so that consumers who visit a merchant's site after doing a Google search will have the option of going to a separate, GBuy checkout site. Google plans to charge merchants a 2.2 percent commission, in addition to a fee of 30 cents per transaction--but will also offer a discount to AdWords advertisers.

GBuy, an obvious challenge to eBay, is expected to come just several weeks after Google took on Microsoft in the software realm with a Web-based spreadsheet application.    June 06

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SONY BMG HAS UNVEILED A new ad-supported Internet broadband channel that will host a library of music videos from artists including Shakira, Franz Ferdinand, and Bon Jovi.

Broadband video firm Brightcove will provide the technology platform for the channel and also will be responsible for ad sales, said Adam Berry, Brightcove's vice president for marketing and strategy. He added that Sony BMG is the first "major" publisher that Brightcove will handle ad sales for.   The advertisers at launch are Dreamworks and Hewlett-Packard, which are jointly promoting the animated film "Over the Hedge."

The channel, dubbed Musicbox Video, will include videos from multiple labels, including Sony BMG, Columbia Records, Epic Records, and RCA Recordings. The players will reside on the Sony BMG main site, as well as the sites of individual labels and artists. All the players are powered by flash, and all the videos are streaming.

The new site will be in direct competition with other online music destinations--including those of Viacom Online, which includes MTV Networks and drew 29.5 million unique users last month, according to comScore; Yahoo Music, with 24.3 million unique users; and AOL Music, which claimed 19.4 million uniques.     June 06

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Leading marketers believe in the benefits of digital marketing--but are having trouble keeping up with the escalating pace of online advances, according to a survey released last week by the American Advertising Federation. In fact, 63 percent of those surveyed said that Fortune 500 companies are "generally behind the curve when it comes to online ad strategy." And 58 percent said that they personally are "struggling simply to manage existing online efforts, let alone stay ahead of the curve."

The study also found that an overwhelming majority of those surveyed recognize the effectiveness of digital marketing, with 91 percent citing the online media environment as "empowering to advertisers, allowing the ad industry to shape its own development." And 42 percent cited online media as offering the highest return on investment of any form of media.          mediapost.com    June 06

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NEW YORK (AdAge.com) -- Microsoft Chairman Bill Gates is leaving his day-to-day post at Microsoft in two years to work

full-time for the Bill and Melinda Gates Foundation, he announced this evening from the company's Redmond, Wash., headquarters.

The news follows a gradual passing of the torch at Microsoft that began in January 2000, when Mr. Gates relinquished the role of

CEO to Steve Ballmer, although Microsoft insiders say he continues to have a consistent presence at the company.

Mr. Gates told a press conference that the day's news was not so much a retirement as a "reordering of my priorities."

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The Pew Internet & American Life Project recently issued its Home Broadband Adoption 2006 report, which rightly devoted significant attention to consumer-generated media (CGM). Based on two U.S. telephone tracking surveys, the report estimated that:

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AOL Streams Springsteen Tour by Wendy Davis, Friday, Jun 2, 2006 6:00 AM ET

AOL MUSIC HAS STRUCK A deal with Bruce Springsteen to stream live video footage from the rock star's tour this summer. AOL is offering one song per concert, selected by the musician, with new tracks going live the morning after each of the 18 stops on Springsteen's tour.

AOL has previously Webcast entire concerts live, but hasn't yet followed an act throughout a tour. Erik Flannigan, vice president and general manager of AOL Music, said the deal's format is particularly well-suited to Springsteen--now on tour with the Seeger Sessions Ban--because the musician is known for surprising audiences by varying his set lists as well as inviting unexpected guest artists on stage.

"If you're a fan, especially a fan of someone like Springsteen--where the show changes every single night--this is something you'd dream about," Flannigan said.

The first track went live on AOL Sunday, following Springsteen's concert the night before in Boston. Footage will be available until at least 30 days after the tour ends on June 25.

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