In business there are several ways you can win. You can be head and shoulders above everyone else. Your competition can be total screw ups. You can gain a defacto monopoly by political legerdemain. Or some mix of all of them. Case in point –

In just over two weeks, Emmy-winning AMC drama Mad Men is slated to begin its fourth season on the basic cable channel. But with negotiations between its parent company and AT&T U-Verse over carriage fees, the cable and internet provider might force subscribers to relocate their premiere parties to the apartment of someone with Comcast.

It’s not just AMC that faces being dropped by U-Verse. Female-oriented channel WE tv and the Independent Film Channel could also face the firing squad if AT&T can’t reach an agreement with parent company Rainbow Media before July 25.

This is similar to the situation faced by Cablevision last March when its pricing squabble with ABC resulted in customers missing a bit of the live Oscars telecast.

Source

It is crazy that a channel customer should be losing any access to the entertainment over some internal provider-carrier squabble. That is fighting over who washes the dishes kind of silliness. And the customer be damned thank you very much.

The better model is the carrier is paid by the subscription of the consumer not by the channel provider. No squabbles occur. In fact under that scheme the two parties work in concert to maximize subscription rates. The whole effort become customer focused rather than channel focused as it is now on cable.

And that is why the likes of Netflix and Hulu will be winners in the space.

Tom Silverman is a guy who has been in the music biz longer than I have been in IT. So he knows the trade and its tricks. It is refreshing to hear an insider to state that the current music model is broken —

One of the biggest problems with the old model, which has been going for 50 years, is thinking, “We’re the labels, they’re the artists, and we make money even if they don’t make money. We reduce our risk, they put their blood, sweat and tears into it, and we only give them money when we sign them and when they deliver a new album.”

In between, the only place where they get money is from their booking agent, because they’re touring. They all love their booking agent, because their booking agent gives them a check every month, or every week, and we only give them a check every year and a half when they deliver a new record — and most of that money goes to their lawyer, manager, the taxman, and making the record. Not much of it ever goes in their pocket, and that’s been true for 20 years. Unless they have a five million seller, most of that money goes into that project. Of course they don’t like the labels, because they’re not getting that reinforcement of regular cash flow. They see the labels making money, and them not making money on records.

He also considers the use of the Internet and social networking much a waste of time. Even though in this same article he admits that Susan Boyle broke thorugh on the basis of internet presence. –

No, I think you have to be out there. You have to spread the word to get exposure, but I think the problem is context. When you’re in a glutted environment, you need to differentiate yourself more than ever, so you need a great story. Story is context; it’s not content. The songs on Susan Boyle’s record are forgettable, and her performance is just okay. There are a million singers who can sing that well at least. It’s just the story that sold it. If people could learn from her, regardless of what kind of music they did — “How can I make my story so that when people hear it, they have to spread the word?” That would activate the medium more effectively than trying to get another 50,000 followers on Twitter, which doesn’t seem to do much at all.

Silverman also suggests a different management model. Using LLC’s and Silicon Valley type investment techniques. Oddly we suggested that very thing on this blog well over a year ago. And it is right.

But there are some pieces that Silverman I think is missing –

• The first is good talent is extremely common, and extreme talent is in good supply. Go into any good size church in the USA and there are probably 2 singers in the choir equal to or better than what is screamed out of Hollywood. Is that the case?

  Empirical evidence. Neil Sedaka held a contest with several radio stations as part of a record tour/sale 5-6 years ago. Thousands were screened by the radio stations. Sedaka was floored that several hundred were good enough to be considered by his measure of talent. Anecdotal I know, but good talent recognizes that in others.

  Value in many ways is a perception, especially when the goods are of a nonphysical nature. So when the perceived supply of the goods rises dramatically because consumers perceptions are altered by the sheer volume of good choice the cost curve must drop. Its supply and demand. There is a huge talent supply and only a finite consumer supply.

• The other is this one. Silverman sees it, calls it the ‘clutter the marketplace’. He is of course, right. $3k and you can foam a garage, buy mikes and stands, a 2yo PC and a midi/mixer card and have the equivalent of what a decade ago cost $500k. So anybody can be in it if they want it enough, such is modern technology.

  But again that is not the biggest issue as I see it. Look the big labels are soon to be gone. They are right now where the major studios were back in the 60’s. Then as now, every release had to be a mega blockbuster as that what the audience expected but the costs were beyond belief. The end game will be the same too. Fundamentals now are also different.

  A band, even if it does not break thru to the levels that Silverman expects which is 100k distribution as the floor. Well run the numbers at $10 per disc. $1m gross. Deduct 5% for production costs. (Yes that cheap.) Zero out distribution costs as most bands at this level would sell either direct over the internet or more likely direct at the concerts wher they make most of their money anyway So out of say $900k split 10 ways with band, light, stage men that is still $80-100k. No you won’t get overnight rich at those numbers, but that is a descent upper middle class income with unlimited upside you you do break thru.

To an extent Mr. Silverman’s lament recognized for what it is runs head long into supply chain economics. The Internet has eliminated the middle man in most cases. Producer and retailer become one. No industry is immune from it even music. And for a lack of a better analogy, iTunes IS WalMart in the music industry.

Linky

Sorta, as in right now its register, then get an invite. Its not a bad strategy either. Run a test case with a small body of users to get the kinks out. A method I would heartily support.

But the question I have is it it worth $10? For the money you get –

• Access to more shows from the major networks.
• Access to the past seasons archives.
• It will be viewable on more devices (iPod, iPhone, Samsung devices, Sony PS3, Xbox, your PC)
• All of it available in HD.
• Oh, and you still have to watch all the ads. The price of entry does not spare one from this.

Now ole Fuddy-Duddy here says maybe its worth $10. Fact if they would ditch the ads I would give a serious thumbs up. I would also suggest they consider bringing in other partners like USA Network as well. Finally I could really care less that HuluPlus runs on an Xbox or PS3. I don’t game.

But with a little jiggering of the content. Dropping of the ads. Then getting some of the channel partners like HBO on board in an ala carte fashion this could fly. There is only one problem. HD already exists over the air and that ole trusty Tivo is still there with the FF button. So questions boils down to does access to the archive of shows worth the $10.

My last Ah-Ha. Does HuluPlus set the new price model for broadband content? Personally I think it does. Not because I think the content is competitive as what $40/mo cable provides. No, its a market perception thing. Once the public gets it in their mind that $10 is the value proposition the cable Cos won’t be able to shake it. Serious downward pressure waits in the wings.

Now, do the networks have the guts to pull content off the cable providers?

Linky

A blonde is praying to God

[Blonde] Dear God, I pray night after night to win the lottery and never do.
[Blonde] Do you hear me Lord?
[God] Child, I hear everyone.
[Blonde] But I don’t win the lottery, ever.
[God] Child, meet me half way at least — Buy a ticket!

Oh yes, it is a dear old joke. Been around for years. But there is a reason I mention it. There is a corollary in today news feeds –

Apple has re-instated the popular iPad news-reading application Pulse. The move seems to overturn a decision earlier today to remove the app because of objections from The New York Times that the app violated its terms of service by encouraging readers to read the Times.

Apple did not respond to a request for explanation, but it looks to be sticking a finger in the eye of the Times, which it has heavily partnered with to promote the iPad.

The Times objects to the news-reading app because it includes it as one of five default publications whose RSS feeds can be read. The Times also objects that the two Stanford student programmers charge for the app, which the Times says violates its non-commercial license for the feed. And it objects that the app launches links from excerpts of its stories to the full Times site in a browser window inside the app, rather than to an external browser.

Read More here

So lets get this straight. NYT who is in the business of pushing news, even via RSS feeds, is objecting to somebody READING their news? There is alot of sidebar legal mumbo-jumbo, but the nit is that it sounds like NYT is objecting to that very action.

So am supposed to show sympathy for the Media, when an organization like the NYT sends a cease and desist letter to Apple to remove the Pulse application? Pleeeeze, that is like driving a stake through your eye and wondering why it hurts. Not only that but there is another old saying — “When you are the piker, stay away from the poker table.” You can’t afford the ante. For most of the industry that is exactly where they are. NYT should be thankful that somebody even thinks they are worth the time to develop the app.

Not one dime of my tax money to these idiots!

YouTube, the place where the 10min vid is king. Not much prime time going on there of course. But if you count views, well then program directors at ABC, NBC, CBS better listen up –

America’s Funniest Home Videos may have pioneered the YouTube concept, but as the site reaches the five-year mark, its audience size is no laughing matter. YouTube’s viewership now exceeds that of all three networks combined during their “primetime” evening time slot, with more than 2 billion views per day, Google announced Sunday.

Granted, YouTube’s numbers come from worldwide views, while ABC, CBS and NBC broadcast their primetime channels within the United States. But this is a significant milestone nonetheless, and hints at an eventual tipping point when the internet could become the world’s dominant video-delivery system, Mark Cuban’s predictions aside.

Google also trumpeted some other key stats: People upload over a day’s worth of video to YouTube every minute; the average user spends only 15 minutes a day on the site, which YouTube would like to increase in part by renting full-length films; and YouTube has broadcast live sports to more than 200 countries.

To celebrate its fifth birthday, YouTube asks the site’s users to upload videos of how the site has affected their lives, some of which will appear on a specially curated channel. In addition, celebrities including Conan O’Brien — whose best next career move might be to become official curator of YouTube — marked the occasion by posting a playlist consisting of their favorite videos (view his above).

Should the networks really be worried about being overtaken by YouTube? Yes and no. They own their content, YouTube has professed a wish to lengthen viewing times. Licensing currently-airing full-length network television shows (in addition to the older shows they currently license) would be a great way to do that. And the networks are in a more favorable negotiating position than the record labels were when they made similar deals, due to Hulu (ABC and NBC) and CBS.com already attracting large audiences for that content.

Perhaps a more serious threat to the networks is that YouTube is changing our viewing behavior, and that our viewing habits on the computer will soon migrate to the living room.

That last bit about changing viewing habits has already happened in our household. We have not had cable for almost a year and to tell you the truth, we don’t miss it.

Linky.

The parent company, Washington Post Co., posted a $45m profit for the quarter balanced against a $13M loss for the newspaper. –

The Washington Post Co. reported a first-quarter 2010 profit of $45.4 million ($4.91 per share) compared with a net loss of $19.2 million ($2.04) in the first quarter of 2009.

First-quarter revenue was $1.17 billion, up 11 percent from the same period last year, when revenue was $1.05 billion.

The revenue increase came from gains in The Post Co.’s Kaplan education division, its CableOne cable company and its six television stations, which offset losses at its newspaper and magazine divisions.

Kaplan reported a 20 percent gain in first-quarter revenue to $711.4 million, compared with the first quarter of 2009. Kaplan’s first-quarter operating income surged to $57.9 million, compared with $11.1 million in the first quarter of 2009.

The Post Co.’s newspaper division, which is dominated by the flagship newspaper, lost $13.8 million in the first quarter of 2010, compared with a loss of $53.8 million in the same period last year. This comes after a fourth quarter of 2009 when the newspaper moved into the black on the strength of cost cutting and holiday ad spending.

Clearly if a newspaper can’t make a go of it in the largest rumor mill in the country then what is the hope for any dead tree paper anywhere else? Nil to non-existent is what.

I lament their ultimate demise but Journalism killed the brand. Yes I distinguish between Journalism and Reporting. They are poles apart. We have not seen objective reporting in this country in probably a decade.

The paper is dead, long live the paper.

Linky.

We hear constantly of the peril if the entertainment industry is not protected from miscreants and thieves. Now we don’t condone theft here at ThirdPipe. Never will. But we never hear of the fair use argument. Till now —

The IT industry’s US lobby group has released a report calculating the size of the “fair use economy” in the US — all the businesses that rely on fair use, including web hosting companies, private schools, search engines and many others. The total for 2007 (the last year for which stats are available) is a whopping $4.7 trillion — one sixth of US GDP — with over 17 million people employed.

The report is a counterpoint to those crazy Hollywood stats that show that every job in America will disappear unless copyright is extended to infinity, all network connections are surveilled, and every infringer is fined her entire net worth and stuck in jail.

Fair Use provisions are inherently useful in whole industries. Teaching for example would be extremely difficult if it were not for fair use. Same with certain entertainment venues like stand up comedy.

Read the whole piece at BoingBoing.

Linky.

MGM has been in a protracted battle to stay alive and keep the creditors at bay. But is this PR release from EON Productions is any indication things might be more woeful than expected –

LONDON, April 19, 2010 /PRNewswire/ — 007 producers, Michael G Wilson and Barbara Broccoli of EON Productions, today announced they have suspended development on the next James Bond film previously scheduled for release 2011/2012.

“Due to the continuing uncertainty surrounding the future of MGM and the failure to close a sale of the studio, we have suspended development on BOND 23 indefinitely. We do not know when development will resume and do not have a date for the release of BOND 23,” stated Michael G Wilson and Barbara Broccoli jointly.

EON Productions have produced twenty two James Bond films since 1962. In 1995, Michael G Wilson and Barbara Broccoli took over the 007 franchise from Albert R ‘Cubby’ Broccoli and are responsible for producing some of the most successful James Bond films ever, including CASINO ROYALE and more recently QUANTUM OF SOLACE. The James Bond franchise is the longest running in film history. EON Productions and Danjaq LLC are affiliate companies and control all worldwide merchandising for James Bond.

The time must be neigh for this venerable studio if production companies are hedging their bets as to whether MGM shutters doors or not. You see, once you commit to certain contractual obligations then you are tied to the studio, and ultimately tied to any bankruptcy settlement that results. EON like others would rather avoid that altogether, hence the halt in production of the latest Bond film.

Samuel B. is probably spinning in his grave.

Not satisfied with laws that potentially make any computer owner a criminal, Big Media continues on its quest to criminalize its customers under the guise of catching a few thieves.

The U.S. government is actively trying to figure out how best to handle intellectual property rights, so it has asked the concerned parties to submit all sorts of information in order to better understand what’s going no. The person in charge of this is the Intellectual Property Enforcement Coordinator, and what the RIAA and MPAA have submitted borders on the insane. Well, it would border on the insane if it weren’t totally their modus operandi. The most glaring “suggestion”? That computer users install software that would scan the contents of their hard drives, looking for examples of “infringement.” If the software discovers what it thinks it infringement, bam! Deleted! I’d be surprised if this were the year 2001, but after so many years of insane RIAA/MPAA stories it’s hard to be shocked anymore.

The exact verbiage of the suggestion reads:

There are several technologies and methods that can be used by network administrators and providers…these include [consumer] tools for managing copyright infringement from the home (based on tools used to protect consumers from viruses and malware). (Crunchgear)

A federally mandated scanner with a back door on every computer at the very least violates the right of privacy. With the likes of Google pushing to eliminate that right by claiming it doe not exist, this would only steepen the slippery slope. With license checks and automated updates, there are already too may back doors into our systems with no laws regulating how they are used. Currently the deployers of these back doors are under fire for gathering more information than the should. Rampant misuse of such “legitimately collected” information is totally  out of control and growing.  Giving Big Media and the Feds another back door only magnifies the potential for wholesale violation of our rights and presents a real and present danger to our freedom.

And……. I’ve only begun to cover why this is a bad idea.

Well it appears that BlockBuster, once the darling of Wall Street in the ’90’s is about to go poof. The NYSE has indicated that there are very close to being delisted by the exchange. And now this –

Notorious shareholder activist Carl Icahn recently filed a Form 4 with the SEC regarding shares of Blockbuster (BBI). Icahn, through his various investment vehicles, recently dumped a ton of both Class A and Class B shares of Blockbuster. On March 25th he owned 19,905,190 shares and as of March 30th, he now owns only 4,358,223 shares. The majority of sales took place on March 29th and 30th at prices of $0.24 and $0.25 per share. In total, Icahn’s various entities sold 14,362,708 …

Essentially Ichan sold off 78% of his holdings in BlockBuster. Icahn is the Jay Gould of our age, but he is nobody’s fool. He see’s the handwriting on the wall for the video rental industry. It can’t survive brick and mortar. BlockBuster is a causality of the broadband market growth.

So who is the winner short term? Why Red Box of course. Those that frequent BlockBuster will go somewhere. That somewhere is a Red Box kiosk.

Linky.