A discussion draft of proposals from FTC staffers shows how out of touch and dangerous these folks could be if given free reign. Seeming to believe that the news business is dying, many of these wunderkinds’ brainstorms nudge closely to the edge of proposing a state run media:

* Expanding copyright law and restricting the doctrine of fair comment to benefit legacy publishers.

* Granting antitrust exemptions to allow publishers to collude on pricing to consumers and to business partners.

* Giving news organizations tax exemptions.

* Subsidizing news organizations by increasing government funding to public broadcasting; establishing an AmeriCorps to pay reporters; giving news companies tax credits for employing journalists; creating a national fund for local news, and giving the press an increased postal subsidy.

To its credit, the FTC does ask how to pay for all this. So the staffers speculated about what I’ll dub the iPad tax — a 5 percent surcharge on consumer electronics to raise $4 billion for news. They also consider a tax on broadcast spectrum and even on advertising. (NY Post)

Anyone who can use a search engine will find no shortage of news. There are so many outlets and so much information that the devoted news junkie can go into overload 24×7 with a few clicks. Many news sites make a tidy profit, and many don’t. Not everyone reporting on events expects to profit.

Information has become abundant, because  reporting and publishing is now the business of anyone, not just a few elitists. When cars took over the roads, the horse shoe business died. Metal working did not. Old media can’t survive in it’s current format, but it can adapt. The FTC staff has no place in attempting to interfere in a robust and competitive news market. If the FTC really wants to make life easier for fledgling journalists, it would work to make broadband as cheap and pervasive as the news is .

As in the traditional reverie of the fallen. This time it is Movie Gallery and its two subs Game Crazy and Hollywood Video will be closing down operations. –

Citing people familiar with the matter, the Journal said that the company, which operates the Hollywood Video chain, will liquidate all of its stores over the next couple of months.

The company employed about 19,100 people when it filed for bankruptcy. According to the online edition of the newspaper, Movie Gallery notified employees on Friday of the added closures.

It is the second largest movie rental chain behind Blockbuster. This is the second bankruptcy filing for the company.

Is this any relief for BlockBuster? Some. But the Hollywood Video chain was not across the street from every BB store like McDonalds vs Burger King. The fact is the B&M video rental industry is on the way out. BB can only hold out so long before office costs exceed income.

Linky.

A most unusual source, Linux Journal, has a scathing but humorous observation about television offerings and the Suits that provide them. –

For the purpose of discussion, let’s suppose that you are a *huge* fan of NBC’s 30 ROCK. I’m not, even though I think Tina Fey is really, really hot, but let’s just pretend for a moment. Further, let’s suppose that you missed last week’s episode, so now you are pointing your Linux-powered Firefox browser at www.nbc.com to catch it. After a quick search and a couple of video advertisements you find the link to last week’s episode.

You click it.

You get a pretty Flash animation of the NBC peacock, and a pop up window containing the following message:

Sorry but we do not support that browser, please use one of these
= = = = = = = = = = = = = = = = = = = =
Windows
Internet Explorer 7
Internet Explorer 6
Firefox 3
Firefox 2
Chrome

Mac
Firefox 3
Firefox 2
Safari
Chrome
Camino

See what I’m getting at? What a stupid message! What a stupid policy to block Linux users! And how rude to not even tell us up front that we are being blocked! There are xx million Linux users in the United States. Nobody knows what xx is, but we’re pretty sure that the number of Linux users in the US is in the tens of millions. …”

Yes. NBC opts to pass over Linux viewership thinking of little consequence. The sad thing is it will only get worse for them as embedded linux browsers are appearing in internet ready TV’s, set top boxes, etc. So to watch that 30Rock episode one will have to go over to Hulu as described in the article.

We have never said that the Suits were smart, they are only well heeled.

Read the whole piece at the link.

Linky.

Aaaah yes, case you have not heard the word, the Fox Avatar Blu-Ray release may not work in your Blu-Ray player! Even though you paid for the privilige. This ladies and gentlemen is why DRM is broke. Forget the technical details, et. al. For the most part this is fraud on the part of Fox —

Bought Avatar Blu-ray today along with ten gazillian other people. Only problem is that the digital rights mgmt or copy protection seems to be causing errors on a large number of players (even with updated firmware). Comments are pilling up on the web (see amazon link below). Nice job Fox, keep law abiding cash paying customers from viewing their DVDs so you can keep a few people from ripping copies to their iPods for road trips….

From Consumerist.

There is also a lively discussion up on Amazon on this whole issue, here.

The primary reason DRM will not work is this simple fact. So long as the last interface — our eyes and ears. Then the next to last interface can be cracked. Yes I can pump the output of the speakers to an audio file. It may not be the most high fidelity but it can be copied. Same for video. The Suits seem to forget that fact.

The best way for the Suits to prevent piracy is to lower their prices. When a DVD is under $5, and a Blu-Ray under $10 then there is less compunction to steal the content. The lower price also sells more copies. But hey, what do I know?

A while back, Long Island, NY paper Newsday put up a pay wall and asked $5 a month to access its online site. After three months, it had attracted 35 subscribers. Will Americans pay for online news? Well at least in this  affluent part of New York state, the answer is no.

So, three months later, how many people have signed up to pay $5 a week, or $260 a year, to get unfettered access to newsday.com?

The answer: 35 people. As in fewer than three dozen. As in a decent-sized elementary-school class.

That astoundingly low figure was revealed in a newsroom-wide meeting last week by publisher Terry Jimenez when a reporter asked how many people had signed up for the site. Mr. Jimenez didn’t know the number off the top of his head, so he asked a deputy sitting near him. He replied 35. (observer.com)

Before the Internet, the serious news came to you on a large wad of paper via a kid on a bike. At the risk of dating my self, I was one of those kids, so I know of what I write.  Subscribers contributed enough to cover cost of delivering and maybe part of the printing.  That pocket change paid to the paper boy each month contributed nothing to the editorial and news gathering operations. Advertising was what kept the paper running.  Since most news consumers already pay for the internet delivery channel, and there are plentiful sources of news, is anyone really surprised no one wants to pay to read?

The news business is far from dead, but it’s changed. The cost of delivery has gone to zero as the industry moves to online publications. With site traffic, comes ad dollars, just not as many as when the kid bought ink on dead trees to you. The ad dollars have not gone away, but advertisers have more options than ever and news has to compete effectively to win them. Until newspapers provide more balanced coverage and engage their readers, I doubt they will have much luck selling more ads. Competition can be brutal when readers have alternatives. Back when the kid on a bike brought you the news, the very few.

With traditional print newspapers struggling to turn a profit, many have turned to the Web as a means to stay afloat. While some offer their online content free of charge, other papers have played around with subscriptions by charging readers a monthly fee. But that strategy may backfire, says a Harris poll released Wednesday.

Among more than 2,000 online adults surveyed, 77 percent said they wouldn’t pay anything to read a newspaper’s stories on the Web. And among those willing to pay, 19 percent would cough up between $1 and $10 a month; only 5 percent would shell out more than $10 each month. (Cnet)

EDGEWATER, Colo. — A man who claimed he was attacked and stabbed in Edgewater Monday night has admitted he stabbed himself because he didn’t want to go to work.

Aaron Siebers, 29, reported the stabbing at about 6:30 p.m. when he walked to his job at Blockbuster Video, 1921 Sheridan Blvd.

Siebers was rushed to St. Anthony Hospital where he received stitches to close his wound.

Meanwhile, officers from Edgewater, Mountain View, Lakewood, Lakeside and Jefferson County began a search for the suspects, who had been described as three skinheads or Hispanic males dressed in black. He told police they tried to rob him and then stabbed him with a knife.

Investigators reviewed surveillance video taken at a nearby business. It failed to show an attack where Siebers claimed it had happened.

Now Retail can be stressful at times. Dealing with customers all day can be a demanding situation. But commit Seppuku so you don’t have to report to work? Wouldn’t quitting been easier??

Linky.

In a continuing saga the fortunes of a couple of media titans continue to face hard times –

Conde –

The whole golf section is being revamped to get costs in line with revenue.

A Conde insider tells us that the layoffs came down this morning with little notice, claiming at least ten sales staffers at Golf World and at least one more at Golf Digest. The company “basically gutted [Golf World] and are merging the sales and marketing team with Golf Digest,” our tipster says.

It has been widely reported that nearly every surviving title at Condé Nast has been tasked with cutting 25% of their overall budgets. Condé Nast Editors-in-Chief at each title have been given the leeway to make cuts as they see fit, on their own schedule. The timing of these cuts has been closely guarded until now, and it remains unclear when cuts will come for each title. We will have more as the story develops.

CNN –

Once the unassailable leader in video news content. CNN now is at the bottom of the barrel in the cable news race, finishing dead last no matter how you slice the demographic.

• For the 7th consecutive weekday, CNN finished fourth on cable news in the prime time A25-54 demographic. It was the 77th time CNN finished 4th in that category this year. FNC was way out in front, followed by HLN just edging MSNBC by 1,000 viewers.

• Fox News’ total viewer average during prime time of 2,735,000 beat the other three cable news networks combined. Bill O’Reilly, who had the top show, had more than 1,000,000 in the demo

What’s happening? Well part is that the current recession this go round is impacting everyone. Unlike the last recession that hit IT hard. Or the one previous, that hit manufacturing. This particular downturn is hitting financial markets hard, but is not discriminating. Main street is feeling the effects. Couple that with small business sitting on the sidelines waiting for the regulatory environment to clear and the result is the perfect stom of inaction.

Sources.

Imagine you are a studio exec, who just flew into Bentonville, AR on the corporate Gulfstream. The product manager for Wally World tells you in private that your shelf presence in WM will be cut by half. Do you –

A) Barf up the $250 of Thailand Prawns on the PM’s desk.
B) Quickly recalculate your retirement valuation.
C) Have a stroke right there knowing your life insurance is paid up and the kids will be ok.

A recent shift in merchandising strategy by the world’s largest retailer spells more trouble for DVD sales and the entertainment industry that depends on them for profits.

As part of a larger effort to clean up its aisles and appeal to higher-end shoppers, Wal-Mart Stores Inc. is doing away with display cases to promote the latest hot movie titles.

The move comes as major film studios are reeling from declines in revenue from DVD sales as cash-strapped consumers turn to low-cost rental services and digital downloads for home movies.

“We think the new strategy implies Wal-Mart no longer sees DVDs and Blu-ray discs as traffic drivers,” J.P. Morgan analyst Imran Khan said.

Studio chiefs dispute that conclusion, noting the importance of DVDs as a sales category for Wal-Mart, but none would speak publicly for this story.

Wal-Mart, which accounts for nearly a third of DVD retail sales in the U.S., didn’t respond to inquiries for comment.

Is it really that bad for the studios? Yes. Consider that WM represents a third of DVD sales. WM is equivalent in the DVD game as Tower Records was in the world of LPs/CDs. Losing that shelf space will represent a sizable loss of revenue.

Surprisingly, DVDs and BluRay is a convenient format. You can do a million unit press run, get the best price in town for the press, ride the long tail over 5 years to burn through the stock and only eat up a small pallet in the warehouse. Presuming you keep the disks wholesale wrapped and only box set them as demand needs it.

Disks also represent a decent profit margin for the studios. Much better than returns via NetFlix or Pay-per-View. A magnitude better profit than what the returns are from RedBox. So the Studios have a serious problem on their hands. Keep in mind that BlockBuster is scaling back by about 1/4th their store presence. Used to be Box Office could turn a profit for the studios. Production costs soon made that an impossibility. With the advent of VCR, then DVD/BluRay sales, Box Office paid for production and the studio lives or dies profit wise on the disk sales. Now it looks like that is becoming a problem as well.

What will they do?

WSJ article here.

You have heard us rail here more than once that the Legacy Media are in deep dodo. Whether its content, positioning, cost structure, or technology issues. Well now we can add one more — management issues –

Only 51% of pubs think pay walls will fly

A bare 51% of the newspaper publishers in the United States believe they can charge successfully for access to their interactive content, according to a survey released today. The other 49% of publishers either fear that pay walls will fail or just aren’t sure.

The survey, which was conducted for the latest in the series of industry conferences this year studyng how to monetize the valuable content most newspapers give away for free, shows that publishers who are worried about charging for content have good reason to be concerned.

While 68% of the publishers responding to the survey said they thought readers who objected to paying for content would have a difficult time replacing the information they get from newspaper websites, 52% of polled readers said it would be either “very easy” or “somewhat easy” to do so.

These findings – and the others summarized below – are contained in an exhaustive survey by industry consultants Greg Harmon and Greg Swanson. They were hired by the American Press Institute to conduct the research for an invitation-only meeting of about three dozen industry executives being held today at a hotel in suburban Washington, DC.

Well first, just to get it out of my system, the snarky comment — Well Duh! If you are pitching a crappy product, and you are their editors and publishers, then what do you expect. Of course the public won’t follow you thru a pay wall system to get their news content. Wen your print side won’t even cover the Van Jones Bus Throw or Dear God the shameless ACORN story that is now all over the ‘Net then why should they?

But the publishers are now admitting that they cannot make it over to digital content. 49% of them are saying that they will fade into oblivion no matter what. Well I’ll tell you, if I were a subscriber to a daily today I would want to know that. Why expend money today for a publication that even they know will not be around say 5-6 years from now?

Read the whole thing over at Reflections of a Newsosaur. Pay particular attention to the various schemes that those that are going digital are brewing up.