Yahoo (YHOO) and AOL (TWX) are talking more seriously about a
merger as an alternative to the Microsoft (MSFT) bid,
the WSJ says. Specifically, Time Warner is preparing a
proposal that Yahoo can take to its board and shareholders. The
proposal would involve Time Warner folding AOL into Yahoo for a
sizable minority stake (we estimate 25%-35%--see
spreadsheet). As with the Microsoft option, the companies
are discussing the usual $1 billion in synergies. In our
opinion, Yahoo is unlikely to be able to persuade shareholders
that an AOL merger would be a better option than taking
Microsoft's money (plenty of integration challenges there, too,
and no quick payoff), but it's worth a try. If nothing else, a
real option here might extract a few more dollars out of
Microsoft.
----------------------------------
VOD Rising: Preferred By Some Lazy
TV Viewers Over DVR
March 7, 2008
TALK ABOUT YOUR
LETHARGIC TV viewers!
Yesterday, Disney-ABC Television chief Anne Sweeney said 20% of DVR
owners said they prefer to watch
video-on-demand
rather than use their DVRs.
How much easier can
DVRs be? At best, viewers only need to hit the same button twice
on DVR. Once to say, "Yes, record." And then again when prompted: "Are
you sure you want to record this?"
Marketers really need to concentrate on these lame TV viewers -- perhaps
find other messaging. If they are too lazy to deal with DVRs, they are
probably too lazy to respond to other media -- as well as schlep into
their cars to go out and buy products from
Target,
Best Buy, Kmart, or
Whole Foods.
Separately, Sweeney also says viewers of ABC TV shows online are
phenomenally happy to grab free viewing in exchange for sitting through
four commercials. No word on whether they are happier to do this than
watching via DVRs and zapping through commercials.
------------------------------------
Sony's Blu-ray
technology is emerging as the likely winner in the format battle
for the next generation of DVD players after Toshiba appeared ready to
ditch its HD DVD business.
Such a move would help consumers know which
system to invest in and would probably boost sales of Blu-ray gadgets,
analysts say. But it will disappoint the 1 million people around the
world that Toshiba estimates have already bought HD DVD players.
Toshiba Corp. said Monday no decision has been made but acknowledged
it had started a review of its HD DVD strategy. The comments follow a
flurry of weekend Japanese media reports that the company was close to
pulling the plug on the business.
A company official, speaking on condition of anonymity because she
isn't authorized to speak on the matter, said a board meeting could be
held today, when a decision is likely.
HD DVD has been competing against Blu-ray disc technology, backed by
Sony Corp., Matsushita Electric Industrial Co., which makes Panasonic
brand products, five major Hollywood movie studios and others.
Associated Press
----------------------
Toshiba's Plan for Life
After HD DVD
TOKYO -- In February, after a long, expensive battle
with Blu-ray over the format for next-generation DVD players,
Toshiba Corp. Chief Executive Atsutoshi Nishida pulled the plug on
the company's HD DVD business. The move surprised analysts. Japanese
companies tend to look for acceptable compromises to save corporate
pride, and the analysts had expected Toshiba to phase out the format
quietly.
Mr. Nishida: I didn't think we stood a chance after Warner
left us because it meant HD DVD would have just 20% to 30% of software
market share. One has to take calculated risks in business, but it's
also important to switch gears immediately if you think your decision
was wrong. We were doing this to win, and if we weren't going to win
then we had to pull out, especially since consumers were already asking
for a single standard.
-----------------
Nine Inch Nails just released its latest album online,
Ghost, free of DRM restrictions and at pay-what-you-wish pricing.
The group is offering nine of the album's 36 instrumental tracks for
free. Fans can purchase all tracks for as little as $5 or as much as
$300 for an autographed set. There's also a $10 version and one for $75.
For frontman Trent Reznor, the initiative marks the second time he
has experimented with letting consumers set the price. Last year, he
produced "The Inevitable Rise and Liberation of Niggy Tardust" by Saul
Williams, which he made available online. Consumers could opt to
download the album for free, or pay $5 for higher quality tracks.
------------------------------ Eighty years after the 7 1/2
-minute cartoon "Steamboat Willie" helped launch the career of a certain
iconic mouse, Walt Disney Co.
has returned to its short-form roots with the debut of a digital studio
that will develop original content for the Internet.
Stage 9 Digital Media, quietly in the works for two years, will be
unveiled today with the premiere of "Squeegees," a comedy series about
window-washer slackers, on ABC.com and YouTube. It is the first of a
planned 20 online programs currently in development.
"We've all seen the appeal of short-form content grow over the past few
years," said Anne Sweeney, president of the Disney-ABC Television Group.
"The launch of this experimental new media studio allows us to play in
this space with some quality content, while giving us an interesting
venue for telling stories in a different form."
ABC Television Group joins a growing number of TV studios, including
CBS
and Warner Bros., that have set up separate digital creative teams to
produce the kind of instant-gratification videos that are popular
online, especially among young viewers who can no longer be counted on
to watch the networks' prime-time shows.
--------------------------------
A friend of a friend who is an avid fan
of American Idol told me how she figures out who is going to win and who
will be voted off. She said, "Go to You-Tube and type in the
contestant's names, and see how many hits they have had on the videos of
them for that week. With that information you can figure out who is most
and least popular in the competition for that week.
----------------------------
SAG aims for April start date
Facing pressure to start contract
talks as soon as possible, SAG has announced it won't start formal
negotiations with the AMPTP until April at the earliest.
In a message sent to members Thursday, SAG president Alan Rosenberg
and national exec director Doug Allen said SAG plans to stress the
issues of new media, compensation for middle-class actors and forced
endorsement on product integration.
------------------------------
Google to Bid for Yahoo Stake?
TechCrunch has the hot rumor of the day:
Google is apparently far more scared of a Microsoft-Yahoo merger
than previously thought and could be preparing an offer to purchase
15-20 percent of
Yahoo's stock. Henry Blodget of the Silicon Alley Insider reminds
us that this is a play that
Google has used against
Microsoft before, when it swooped in at the 11th hour to purchase
a $1 billion 5 percent stake in
AOL.
---------------------
Oscar Didn't Win In The Key Category: Viewers
Feb 26, 2008
IN THE SPACE OF ONE month, the
Super Bowl achieved its best viewership ever, while the Academy Awards
will record its lowest ratings in history. "The 80th Annual
Academy Awards" on ABC took in a Nielsen preliminary 21.9 household
rating/33 share--a massive drop of 21% versus last year's numbers of
27.7/42.
That's not all. The 21.9 rating is also 14% below
the lowest-rated Oscar event ever, which was in 2003 during the start of
the Iraq war. Then, the telecast earned 25.5. That year, the Oscars
pulled in 33 million viewers. This year, the Oscars grabbed 1 million
fewer viewers. It also pulled in a low 10.7 rating among 18-49 viewers.
There is plenty of blame to go around, according
to analysts--everything from the writers' strike disruption, to
low-grossing, thinly seen boutique nominated films to less marketing
support for the show.
Responsibility also lies with the subject matter,
according to analysts, which was dark and depressing. However, for some,
this made a better fit for Hollywood on Sunday night, which endured
showers and rain and cool temperatures.
---------------------
Facebook Traffic Declines in U.S., U.K.
Facebook saw month-to-month traffic declines in December and
January, according to separate reports from ComScore Media Metrix and
Nielson Online.
TechCrunch suggests that the Web's No. 2 social network may be
plateauing in the U.S.
ComScore data shows the site's traffic leveling over the past few
months, dipping by about 800,000 visitors in January. In December, the
site drew 34.7 million unique visitors in the U.S. compared to 33.9
million in January.
MySpace also saw declines, but less so, drawing 68.9 million U.S.
uniques in December compared to 68.6 million in January. Is
Facebook plateauing? Are users getting fed up with the site's
dissemination of personal information? Worldwide, the site grew 3
percent in January according to
ComScore, but declines in the U.S. and U.K. are troubling,
nevertheless. TechCrunch/Times Online
--------------------------
Microsoft's "Brilliant Steps" To Remake Itself
Fortune
Microsoft is "taking brilliant steps to remake itself." Fortune
says the decisions both to buy Yahoo and to open its software up to
greater interoperability represent a "critical moment in [Microsoft's]
history." The bigger step, of course, is the $40 billion-plus Yahoo bid,
which would be the company's largest-ever acquisition and could pose
significant regulatory and restructuring complications. Shareholders are
very much against the deal, and have shaved 15 percent off
Microsoft's stock price since the company announced its
intentions.
These are huge changes for a company that built its fortune on
proprietary software.
Microsoft is more or less conceding that its monopoly days are
over, and that the future belongs to open, Web-based programs, much of
which will be ad-supported. The move to more open software is especially
positive for
Microsoft's enterprise business, which faces mounting pressure
from corporate software makers who use open source technology. The
addition of Yahoo will ease the company's transition to a more
"Web-centric" (i.e. ad-supported) approach to Internet services.
----------------------------
Industry Execs Say Gaming To Move Online
BBC News
Industry luminaries are in accord: The future of gaming is online. They
predict that content will be delivered from a central server to a
network of users, and that Internet service providers will provide
access to that network by tacking on an added charge for gaming service,
just like cable providers charge $10 extra per month for
HBO.
"A huge game changer for our industry is for there not to be a
requirement for there to be a machine in the home," said Neil Young,
general manager of EA Los Angeles. Electronic Arts is the largest
third-party developer of video games, which means the company makes
games for three major game systems--so a move to Internet delivery would
suit the company.
------------------------------
SEATTLE (Reuters) -
Microsoft Corp plans to
invest heavily in Web search to compete against
Google Inc, even if it fails to acquire
Yahoo Inc, the company's
chairman Bill Gates said on Monday.
Gates, who called
Microsoft's offer for
Yahoo "very fair," said
Google is the only company with "critical mass" in Web search.
Microsoft needs a bigger piece of the market to create a more
competitive and
profitable Web search business.
"We can afford to make big investments in the engineering and
marketing that needs to get done. We will do that with or without
Yahoo," said Gates in an interview with Reuters.
--------------------------------------------------
Wal-Mart dumps HD DVDs to back Blu-ray
Feb 15
Wal-Mart Stores Inc (WMT.N) has decided to
exclusively sell high-definition DVDs in the Blu-Ray
format, dealing what could be a crippling blow to the
rival HD DVD technology backed by Toshiba Corp (6502.T).
The move by the world's largest retailer, announced
on Friday, caps a disappointing week for HD DVD
supporters, who also saw consumer electronics chain Best
Buy Co Inc (BBY.N) and online video rental company
Netflix Inc (NFLX.O) defect to the Blu-ray camp.
In a statement on its Web site, Wal-Mart said that
over the next few months it will phase out sales of HD
DVD systems and discs. By June, it will sell only
products in the Blu-ray format which was developed by
Sony Corp (6758.T).
"We've listened to our customers, who are showing a
clear preference toward Blu-ray products and movies with
their purchases," said Gary Severson, a Wal-Mart senior
vice president.
------------------------------
News Corp./Yahoo Combo Would Yield Display-Ad Powerhouse
$50 Billion Price Tag Puts Pressure on Microsoft to Up Its Bid for
Portal
NEW YORK (AdAge.com) -- Want to talk about massive display share?
Forget Yahoo and Microsoft -- it's Yahoo and News Corp. that could shake
up that world. The two companies are discussing a deal that would make
News Corp.'s Fox Interactive Media assets part of Yahoo in exchange for
a 20% stake in the newly combined entity, according to a person familiar
with discussions.
------------------------------
GPS technology is now being put into mobile phones
BARCELONA, Spain (AFP) - After replacing paper maps for millions of
drivers, GPS technology is now being put into mobile phones and was one
of the most-hyped developments at this week's Mobile World Congress.
The biggest handset manufacturers and GPS (global positioning system)
specialists have begun building handsets with personal navigation
software, planning routes and guiding pedestrians with detailed digital
maps.
------------------------------
Yahoo Inc. hopes media
conglomerate
News Corp. can rescue it from a
Microsoft Corp. takeover — or at least
prove the slumping Internet pioneer is worth more money than its
unsolicited suitor wants to pay.
A News Corp. partnership could provide
Yahoo with the escape hatch that the Sunnyvale-based company has
been seeking since
Microsoft pounced with its takeover bid two weeks ago.
If nothing else, the possibility of Yahoo joining forces with one of
the world's largest media empires could prompt Microsoft to sweeten its
bid, which was originally valued at $44.6 billion, or $31 per share.
Yahoo is believed to want at least $40 per share, or about $56
billion.
------------------------------------
Netflix nixes HD DVD ...Net co. rolls with Blu-ray
Chalk up another one for Blu-ray: Netflix is phasing out HD DVD rentals
from its service due to underwhelming demand. Online subscription
company said it will not purchase any more HD DVD discs, phasing them
out entirely by year's end. Netflix had stocked both high-def formats
since their launch almost two years ago.Company cited studio and
customer support of Blu-ray for the decision, noting that the majority
of major studios now back Blu-ray exclusively and that the majority of
subscribers requesting high-def discs want them in Blu-ray.
Last month, Warner Bros. dropped its dual format approach to endorse
Blu-ray exclusively; the studio will continue to release HD DVD discs
for a few months at a slight delay after Blu-ray bows. Only Paramount
and Universal remain soley commited to HD DVD, and neither is
contractually bound to continue releasing on that format.
-------------------------------------
Mobile-phone companies ready wave of new Web-based
products
Nokia has put its new generation of digital maps in GPS-equipped
mobile phones, one of several ways mobile-phone companies are connecting
phone customers to the Web. "The future is about bringing context --
time, place and people -- to the Web; that is the foundation of the next
generation of the worldwide Web," said
Nokia executive Niklas Savander
-------------------------------------
AdAge.com comments on the end of
the writers strike
"Once the strike ends, the aftermath sort of begins," said Chris
Boothe, a president at Publicis Groupe's Starcom USA. "We think
repercussions will be felt for a long time."
Among the predictions: more reality TV, fewer programs overall and a
staggered series of show launches that could move away from the fall and
more toward the fourth quarter. And there will be plenty of other
questions, including whether networks can get enough big-audience
blockbusters on the air to allay concerns about ratings shortfalls
during the strike. Even after all that, there's still the question of
whether those shortfalls will mean networks are on the hook for
"make-goods" -- ad time owed to marketers for failing to deliver
promised ratings points -- at the end of this season. Below, Ad Age
looks at some of the new trends and how marketers could be affected by
them:
------------------------------------
Calling the internet "the cloud," outgoing Microsoft Chairman Bill Gates
made his predictions about the continuing change he sees in media and
marketing communications technologies in the coming decade. For
instance, he envisions a near-future world of "high-definition
experiences everywhere" on screens spanning the surfaces of furniture as
well as architectural spaces.
------------------------
Yahoo Rejects Microsoft's Offer
Portal Could Explore Alliances With Google, AOL
February 11, 2008
NEW YORK (AdAge.com) -- Following Yahoo's decision to reject Microsoft's
$44.6 billion takeover attempt, speculation has focused on what the
future holds for the slumping online-media giant.
A few scenarios have popped up. One has Microsoft continuing to press
Yahoo by taking the proposal directly to its shareholders or by
sweetening the offer to make it palatable to the Yahoo board, which
today said the bid undervalues the company. Another has Yahoo playing
defense either by partnering with Google on search advertising, sure to
draw scrutiny from regulators, or by rekindling talks with Time Warner
about a merger with its AOL unit.
Microsoft is chasing Yahoo as part of its effort to close the gap on
Google, the leader in search. The combination would combine the No. 2
and 3 players, but "Micro-hoo," as it's been unofficially dubbed, would
still trail Google.
------------------------------------
Can Jerry
Yang keep Yahoo from becoming a division of Microsoft?
Since
the 39-year-old engineer and company co-founder received a surprise
phone call from Microsoft Chief Executive Steve Ballmer on Thursday
night offering to buy Yahoo for $44.6 billion, Yang and his board of
directors have been looking for alternatives that would leave Yahoo an
independent company.
While those discussions are confidential, analysts who have studied
Yahoo's position aren't optimistic.
The Sunnyvale-based search giant has few options. There's the Disney
ending where Yahoo finds a proverbial rich white knight. There's the
tech thriller version where CEO Yang takes a knife to his workforce,
outsources Yahoo's advertising business to Google and fights to the
death in a bloody proxy battle. And there's the investment banker's
favorite script, where management accepts the deal and everyone gets a
little bit richer.
The fairy tale ending seemed less likely after Monday. At least two
media companies signaled they will not bid against Microsoft. On a
conference call Monday morning, co-hosted by JPMorgan Chase, Jeff Zucker,
president and CEO of NBC Universal, said he was "not interested in being
a white knight for Yahoo" and that the deal proposed by Microsoft would
be good for NBC.
Rupert Murdoch, chief executive of News Corp., told analysts on a
conference call Monday they could count him out as well.
----------------------------------
Yahoo! in tune with Rhapsody for digital music service
Yahoo! is in a deal with
RealNetworks' Rhapsody America, under which Yahoo! will transfer
all users of its
Yahoo! Music Unlimited subscription service to Rhapsody, whose
on-demand service will be marketed by Yahoo! on its Web site. The two
parties also reportedly plan to collaborate on other digital music
initiatives.
------------------------------------
Activision, which already announced that it was the top publisher in
2007 in large part thanks to Guitar Hero, today announced that
its popular music game franchise has set an industry record by breaking
$1 billion in North American retail sales in just 26 months (according
to data from The NPD Group). Since the Guitar Hero franchise
debuted in fall 2005, it has sold over 14 million units in North America
alone.
Furthermore, Guitar Hero III: Legends of Rock was the number
one video game in units and dollars for calendar year 2007, "making it
the #1 best-selling video game of all time in a single calendar year,"
Activision boasted. Activision has also benefited from ancillary
revenue, as gamers have downloaded more than five million songs in the
10 weeks since the game's launch. MTV Games recently said that the
competing Rock Band has seen 2.5 million song downloads.
-----------------------------------------
TV'S ADVERTISING ECONOMICS ARE NOT that hard to figure out --
even in these striking, trying times.
You don't have development. You don't have pilots. You don't have
anything to show to advertisers, at a pricey upfront presentation. So
you don't have the gaudy affair -- at least for this year.
NBC says it's nearing a decision to cut its annual "dog and pony" show,
as NBC Universal chief executive Jeff Zucker calls it. But Zucker won't
cancel the actual upfront advertising marketplace itself. That would be
stupid.
NBC, as well as the other networks, still need the cash,
especially the bulk that the upfront brings. Better to have 70% of all
advertisers' yearly TV spending in your pocket now instead of later --
even if it is for "Celebrity Biggest Loser" and "Celebrity
American Gladiators," and
USA Network reruns of "Psych," "Monk" and "Burn This."
----------------------------------------------
CBS Asks: Where Does
Last.fm Grow From Here?
CBS CORP. ON WEDNESDAY PRESENTED
its highly ambitious vision for the global music business. Anyone
familiar with Last.fm, the online community of musicians and fans that
CBS bought last year, already knows what that vision looks like.
Trying to sell Last.fm as the biggest free, ad-supported music service
online, CBS President and CEO Leslie Moonves took it upon himself to
address members of the media, Madison Avenue and Wall Street.
"Community clearly is the future," Moonves said
from Black Rock's Studio 19. "It is clear to us that communities built
around great content are increasingly driving traffic and revenue
online."
Through deals with Universal Music Group,
Sony/BMG, Warner Music Group and EMI Group, among others, Last.fm is now
offering full-length tracks and albums for a total of more than 3.5
million songs. Jan 08
----------------------------------------
Here's the good news: Digital sales of music grew to $2.9 billion
globally last year, marking a 40% increase from 2006.
But here's the bad news: Music sales overall still dwindled to $17.6
billion, a drop of 10%, as the digital growth wasn't enough to offset
lost revenue from plummeting CD sales, according to a new report by the
International Federation of the Phonographic Industry. The report comes
just several weeks after Nielsen SoundScan also reported that sales of
physical albums plunged 15% last year.
Again, the music industry is blaming piracy for the declining revenue
and renewing calls for Internet service providers to start filtering out
copyrighted material.
-------------------------------------
Record Audiences For Newspapers Online
While their print editions continued to slide, newspapers enjoyed an
online audience boom in 2007, according to the Newspaper Association of
America, which says the total unique audience for newspaper Web sites
increased 9% in the fourth quarter to an average 62.8 million per month,
compared to the same period in 2006, The figure from October, when 63.2
million people visited a newspaper Web site, is an all-time record. |