Meanwhile, the nation’s banks are getting attention by covertly raising fees charged to customers who use their automated teller machines: a whopping $5 in some cases.

There is a striking contrast between these two business models.

Comparing the retail experience of banking and consumer technology isn’t exactly Apples-to-apples. Yet it’s closer than you might think. Like the retail-gadget industry, banks often don’t have a clear advantage on rivals. Bells and whistles are short-lived, so much of the difference comes down to marketing and consumer perception.

Read the rest of this post on the original site

I had a hunch that Viacom sold off Harmonix, which makes the Rock Band games, at a steep discount last month. But I’m still surprised it was this cheap: I’m told that investment group Columbus Nova paid $49.99–the list price for “Rock Band 3″–and got the entire company.

There’s more to the story, of course: People familiar with the transaction tell me Harmonix’s buyers also assumed the game company’s liabilities. That includes expensive music rights fees, and responsibility for lots of unsold games and equipment sitting on warehouse shelves.

And I’m told that the deal is structured in a way that will let Viacom net something like $150 million in tax benefits, similar to the AOL/Bebo fire sale last year. Given that Viacom paid $175 million for Harmonix a few years ago, things could be worse.

[UPDATE: The Los Angeles Times reports that Viacom will actually receive a $50 million tax benefit, and offload $100 million in liabilities. That makes more sense, and I've since confirmed it myself. My apology for the error.]

Still, it’s a fire sale price no matter how you look at it. And that can’t be comforting to Harmonix’s remaining employees, who are likely going to be facing a very serious restructuring.

Columbus Nova’s PR reps wouldn’t comment on the sale terms (neither would Viacom) but pointed me to an earlier statement from the company, which said it was “really excited about backing the world-class team that has consistently produced such great games and helping them grow the company and its brands.”

Those estimates, provided by comScore, include any transaction conducted over the fixed Internet, either from home or work.

That means the record-breaking year also included the intangibles in our lives that you can’t touch or feel, and can’t ship in a box, like e-books and music, and virtual goods, such as a Gingerbread House or a Poinsettia to brighten up your FarmVille home for the holidays.

While likely still a small percentage of the $1 billion-plus in sales (comScore wasn’t willing to break down the numbers), companies like Zynga that develop many popular social games on Facebook didn’t waste any time taking advantage of the shopping frenzy that hits the Monday after Thanksgiving as people return to work and click to buy.

Sales spiked as Zynga kicked off the week with a new holiday lineup. On FrontierVille, users were offered mystery animals, like a polar bear wearing a Santa hat and a penguin sporting a reindeer hat. The second most popular decoration of the day was a blanket of snow for the player’s homestead. It also debuted holiday cheer in FarmVille with a winter horse-drawn carriage and a Santa Gnome as two of the top-selling items.

But it wasn’t all about decorations. On Monday, Zynga offered its most expensive virtual item in FarmVille’s history. The so-called “Unwither Ring,” which has been offered only two other times, costs 250 in Farm Cash (roughly $40). Players who are willing to splurge will never have their crops wither again–a situation that occurs if you show up to plow too late. And if you are looking for something special for that certain someone, the Unwither Ring is also available as a gift.

Santa Clara, Calif.-based PlaySpan, which offers monetization platform services to 1,000-plus online games and social networks, was willing to be a little more specific about Cyber Monday’s spike. Sales of PlaySpan’s game card–available in North America at 7-Eleven, Rite Aid and other stores–were up 69 percent on Black Friday, compared to the previous week. Its corresponding marketplace, which features virtual goods, also reported a substantial increase in purchases over the weekend. The bump in sales increased 11 percent from Thursday through Sunday, compared to the same period a week earlier.

The lawsuit is bad timing for the small start-up, which was quickly gaining momentum. After its debut in November, it took just two weeks to generate two million downloads across BlackBerry, Android and iPhone. The free app allows users to send messages without paying text messaging fees and works across multiple platforms, unlike RIM’s own popular BlackBerry Messenger service, which is restricted to its own platform.

Worse yet, we heard Kik’s overnight success earlier this month drew the attention of several VCs, who were lining up with their checkbooks open and ready. It’s not clear if Kik was able to close that round before the lawsuit was filed on Tuesday in Canada’s Federal Court, but you can be sure that VCs will be über-vigorous in evaluating the company’s technology and any potential patents if a fight against RIM is in the works. To be sure, it will need the cash for legal fees alone.

The lawsuit was first spotted by David Lam, a lawyer in Ontario, Canada, who reported the electronic filing on his blog. Further details about RIM’s claims were unavailable, and we’ve reached out to both RIM and Kik for comment. UPDATE: In a blog post, Kik confirmed that it received the lawsuit yesterday. The company’s founder, Ted Livington, who worked at RIM as a student, writes: “I’m not afraid. I’m not surprised. But I am disappointed.”

I’m Tricia Duryee, one of the latest additions to All Things Digital. You may know me from the three years I spent at mocoNews, where I wrote about the mobile industry, or before that, as a technology reporter at the Seattle Times. Going forward, I will write about e-commerce and gaming, as well as all sorts of financial machinations.

As you might expect, I will be reporting on some of the more traditional companies in the space, such as Amazon, Walmart, Microsoft, Nintendo and Sony.

But there will also be strong emphasis on a handful of start-ups that are currently doing their best to upset the status quo. In this bucket, I see three categories emerging: Virtual goods, social-and-group-buying companies and mobile payments.

The dollars are really starting to ring up in these areas, even after such a short period of time. In just three years, Zynga has signed up 320 million registered users, has hired 1,300 employees and is estimated to have $500 million in 2010 revenues with a roughly $5 billion private-market valuation.

Likewise, the two-year-old Groupon is being sought by Google, which BoomTown’s Kara Swisher reports may offer up to $6 billion to get a foothold in the social-buying business and gain a local sales force across the country.

And finally, mobile will be an increasingly hot topic as consumers use their devices for every part of this value chain–from discovering deals to researching recommendations to substituting their wallet for a phone. Among other topics, there’s a flurry of contenders challenging Visa and MasterCard for its merchant fees, which were estimated to have totaled $7 billion in the U.S. over the past year.

Generally, when I think of this coverage area, I see one central theme: How will people make money, and how will consumers pay? Will games be purchased, or will they be ad-supported? Or, will consumers buy one virtual tractor at a time?

The debate reminds me of what Zynga’s CEO and founder, Mark Pincus, said at a recent event, where Kleiner Perkins announced a new fund dedicated to social.

Said Pincus:

“We are massively under-invested across the board in the ‘user-pay economy.’ There’s been this wrong assumption for first-generation Web services that it has to be free with ads. We believe in a model that is supported by users. That’s not just games and virtual goods. There’s a lot of newly created valuable digital goods and services products.”

What will these new services and products be? Will these new models be sustainable? How will they evolve over time? As I look at how it all adds up, I’ll be relying on a lot of you to tell me the important stories that illustrate how we’ve gotten here and where we are going.

And I’ll be wasting no time, as I immediately jump into one of the busiest times of the years–the holiday shopping season!

Online, of course.

[Photo Credit: donebythehandsofabrokenartist]

But the company’s next big move likely won’t happen in public view: Sources say Boxee is out trying to raise a significant funding round, likely in the $10 million to $15 million range.

I’m told that existing investors Union Square, Spark and General Catalyst, which have helped Boxee raise $12 million to date, all plan to re-up, and will likely pick up half of the round. No word on who the new money is, or how close the round is to closing.

CEO Avner Ronen will need it sooner than later, though. His two-year-old company now has a significant payroll–33 people, at last count–and very little revenue coming in the door.

The new Boxee Boxes shipping this week won’t change that. Boxee isn’t trying to succeed by charging manufacturers like D-Link, which is making the devices, big licensing fees.

Instead, it’s trying to build a significant audience by getting its software on lots of hardware–TVs, Blu-ray players, game machines, etc.–and figure out a way to turn that into money down the line. Boxee is at 1.4 million users now, but that’s not nearly big enough. It wants Pandora- or Netflix-like scale.

This is an interesting time for Ronen to be out pitching: The existing TV industry is ripe for disruption. And the idea that consumers will watch Web video on their TV is moving from science fiction to reality, spurred on by the likes of Hulu, Netflix, Apple TV and now Google TV.

But Google TV’s mission–to merge Web video with traditional TV on one screen–is pretty much the same as Boxee’s. If Google figures it out, it would seem to crowd out the competition.

On the other hand, TV programmers who are wary of Google’s dominance might very well welcome multiple competitors. Which may be one of the reasons that Ronen is supposedly getting a much warmer reception from traditional TV executives than he used to get.

Here’s the email that Cablevision sent to its customer base last night, explaining how they can get legal streams of the World Series delivered to their homes on the Web, via MLB.com. It’s a fancier version of the message I delivered two weeks ago, except that this time Cablevision is promising to pick up the $10 fee, too:

Is anyone going to take Cablevision up on the offer? A note from RBC Capital Markets this morning guesses that perhaps 150,000 subscribers may go for it, which would generate a $1.5 million bill for Jim Dolan and company. I’ve asked Cablevision if it can provide any numbers for the offer, which kicked off last night before Game 1 of the Series. UPDATE: “Thousands” of customers have sent in receipts for reimbursement, says a Cablevision rep.

Of course, the real risk for Cablevision isn’t the one-time payout it may have to fork over. It’s that increasing numbers of consumers learn to live without cable and get their video fix over the Web.

But that’s a risk for Fox, too: Like all of the broadcast networks, it wants the cable guys to start paying it for its programming, and if people start cord-cutting in real numbers, then the cable guys won’t have much to hand over.

Which is why it’s surprising that this rights-fee fight has lasted as long as it has–there’s no ideological difference between the two sides here, only a money gap. But the longer it remains open, the more both sides have to lose. (Disclosure: News Corp. also owns Dow Jones, which owns this Web site).

That’s an unprecedented move in the ongoing fight between cable providers, broadcasters and networks over programming fees. And the news was a big deal for the digerati and people contemplating the future of video.

But it doesn’t seem to have registered in the broader world, and you have to work hard to find any mention of the story in old-media news outlets. And even Cablevision, which uses any ammo it can in the PR fight against Fox and News Corp. (which also owns this site), hasn’t said much about it.

Here, for instance, is Cablevision’s newest message to its customers. If you fast forward to the 1:35 mark, you’ll find a two-sentence description of the Web blackout. But hard to believe many Cablevision customers will be sticking around to hear this one:

At the very least, blacking out part of the Web sounds scary. So why is Cablevision so (relatively) quiet on this?

Two theories, which are not mutually exclusive:

• It’s not worth complaining about because this stuff doesn’t really resonate with consumers–at least, not in the way that losing access to NFL games and play-off baseball does. No one spent Saturday evening or Sunday afternoon in a bar because they couldn’t watch “Glee” on Hulu.
• It’s not worth complaining about because Cablevision and News Corp. are actually on the same ideological page when it comes to this stuff. Neither side is really that happy about free TV shows on the Web. The only real difference the two sides have is about money: News Corp. wants to get more of it for its programming, while Cablevision wants to pay less.

On a related note: I still don’t understand why News Corp./Fox backed off so quickly on Saturday, once news of the blackout got out.

There’s no official reason, but there were mutterings about the technical difficulty of cutting off access to Cablevision TV subscribers while leaving Cablevision’s Internet-only subs alone. But hard to believe that News Corp. didn’t think that one through in advance. Same goes for any “optics”-related reason–the whole point of a move like this was to generate publicity, right?

Google today responded to Oracle’s (ORCL) claims that its Android OS infringes copyrights and patents related to Java, which Oracle acquired as part of its purchase of Sun Microsystems earlier this year. This morning, the search sovereign filed an answer to Oracle’s suit, denying all seven of its patent-infringement charges, and asking that the company’s copyright-infringement claim be dismissed because Google (GOOG) feels it is “legally deficient.”

And, interestingly, the answer calls Oracle out as a hypocrite–a company that pushed for a fully open Java platform when the OS was owned by Sun, only to blatantly ignore the open source community’s requests to fully open source it after its acquisition of Sun closed.

“It’s disappointing that after years of supporting open source, Oracle turned around to attack not just Android, but the entire open source Java community with vague software patent claims,” the company said in a statement. “Open platforms like Android are essential to innovation, and we will continue to support the open source community to make the mobile experience better for consumers and developers alike.”

Google’s prayer for relief makes that disappointment quite clear. In it, the company asks not only for a judgment dismissing Oracle’s complaint against it with prejudice, but also for a judgment in favor of Google on all of its counterclaims; a declaration that Google has not infringed, contributed to the infringement of, or induced others to infringe, either directly or indirectly, any valid and enforceable claims of the Patents-in-Suit; a declaration that the Patents-in-Suit are invalid; a declaration that Oracle’s claims are barred by the doctrines of laches, equitable estoppel, and/or waiver; a declaration that the Oracle’s claims are barred by the doctrine of unclean hands; a declaration that this case is exceptional and an award to Google of its reasonable costs and expenses of litigation, including attorneys’ fees and expert witness fees; and such other and further relief as this Court may deem just and proper.

Here are three of the more pointed graphs from the answer, followed by a copy of the document in its entirety.

7. Sun came under significant criticism from members of the open source community, including Oracle Corp., for its refusal to fully open source Java. For example, in August of 2006, the Apache Software Foundation (“ASF”), a not-for-profit corporation that provides organizational, legal, and financial support for open source software projects, attempted to obtain a TCK from Sun to verify Apache Harmony’s compatibility with Java. Although Sun eventually offered to open source the TCK for Java SE, Sun included field of use (“FOU”) restrictions that limited the circumstances under which Apache Harmony users could use the software that the ASF created, such as preventing the TCK from being executed on mobile devices. In April of 2007, the ASF wrote an open letter to Sun asking for either a TCK license without FOU restrictions, or an explanation as to why Sun was “protect[ing] portions of Sun’s commercial Java business at the expense of ASF’s open software” and violating “Sun’s public promise that any Sun-led specification [such as Java] would be fully implementable and distributable as open source/free software.” However, Sun continued to refuse the ASF’s requests.

8. Oracle Corp., as a member of the Executive Committee (“EC”) of the Java Community Process (“JCP”), the organization tasked with managing Java standards, voiced the same concerns regarding Sun’s refusal to fully open source the Java platform. Later that year, in December of 2007, during a JCP EC meeting, Oracle Corp. proposed that the JCP should provide “a new, simplified IPR [intellectual property rights] Policy that permits the broadest number of implementations.” At that same meeting, BEA Systems – which at the time was in negotiations that resulted in Oracle Corp. purchasing BEA – proposed a resolution that TCK licenses would be “offered without field of use restrictions . . . enabling the TCK to be used by organizations including Apache.” Oracle Corp. voted in favor of the resolution.

9. Just over a year later, in February of 2009, Oracle Corp. reiterated its position on the open-source community’s expectation of a fully open Java platform when it supported a motion that “TCK licenses must not be used to discriminate against or restrict compatible implementations of Java specifications by including field of use restrictions on the tested implementations or otherwise. Licenses containing such limitations do not meet the requirements of the JSPA, the agreement under which the JCP operates, and violate the expectations of the Java community that JCP specs can be openly implemented.”

UPDATE: Oracle has issued this statement on Google’s answer.

“In developing Android, Google chose to use Java code without obtaining a license. Additionally, it modified the technology so it is not compliant with Java’s central design principle to ‘write once and run anywhere.’ Google’s infringement and fragmentation of Java code not only damages Oracle, it clearly harms consumers, developers and device manufacturers.”

UPDATE: Engadget’s Nilay Patel has a good analysis of Google’s strategy, here — as well as some potential holes in it.

2010.10.04 – Google Answer and Counterclaims _filed_ –

DiClemente was arguing that the bundled approach to cable TV–whereby subscribers get dozens or even hundreds of channels for one big fee, no matter how many networks they actually watch–wasn’t going anywhere for quite some time. If ever.

But if you’re the kind of person who thinks we’re headed for an a la carte model in which programmers compete directly for consumer dollars, you can use this as fodder for your argument. Because you can see just how much you’re paying for stuff you don’t want.

Take a look (click to enlarge–or drag the whole image off of the browser and onto your desktop if you want a better view):

Obviously these are wholesale prices, not retail. But this gives you a very good idea of where the money goes–to a lot of channels you likely never, ever, look at.

You’ll find this particularly upsetting if you don’t watch sports. Because sports channels account for about 40 percent of cable fees.

And you’ll also be upset once you realize that the broadcast networks–GE’s (GE) NBC, News Corp.’s (NWS) Fox, Disney’s (DIS) ABC and CBS (CBS)–are going to get added to this list over the next year or so. Even though anyone who doesn’t pay for cable gets them for free.

Hence, last winter’s Fox vs. Time Warner Cable (TWC) standoff, and the Disney vs. Cablevision (CVC) fight that ended in time for the Oscars last night.

As I’ve said before, I think that many cable viewers are probably okay with most of the bundle–or at least unwilling to foot the bill for real a la carte pricing. But maybe if you waved this list in front of them, they might rethink that.

That’s the premise behind Venmo, a stealthy but buzzy start-up that just closed its first funding round. The four-man team gathered up something in the $300,000 to $400,000 range, I’m told. Investors include Betaworks, Lerer Media Ventures, and, oddly, given that it’s a modest angel funding round, RRE Ventures.

The big difference between Venmo and its much bigger mobile payment competitors–both Boku and Zong, for instance, have millions of venture capital dollars behind them–is that Venmo doesn’t involve the mobile carriers, which can take 30 percent or more of each transaction they process.

That might be okay for virtual goods, like sheep for your Farmville game, since you’re just throwing money away in the first place. But if you want to send a friend $5, you don’t want her to end up with $3.50. And you don’t want to give AT&T (T) or Verizon (VZ) another $2.14 to place the full $5 into your pal’s account.

So Venmo simply sets up an account for each user, funded by a checking account or credit card, and moves the money into other Venmo accounts. Simple and clever, if it works.

A few obvious stumbling points:

• Red ink: Venmo doesn’t charge individual users for transactions, so it’s going to lose money on each transfer since it has to eat credit card fees, etc. The plan is to make that up by charging commercial users–your local coffee shop or flea market vendor or whatever business sets up an account–a 3.5 percent fee for each transaction.
• Fine print: The Venmo team–headed by Betaworks veteran Andrew Kortina and Iqram Magdon-Ismail, his former Penn roommate–doesn’t anticipate problems. But smart folks I talk to think that at a minimum, the start-up will have to turn itself into a credit card company or a bank to satisfy regulators. Certainly doable, but that’s the kind of stuff that requires time and money and comes with big penalties if you get it wrong.
• Trust: The big one–this thing doesn’t work, period, unless people are comfortable moving money back and forth via a four-man company they’ve never heard of. But the only way to combat that is to let people try. Venmo is in private beta now, but allows friends to invite friends and plans on opening up to a wider audience in the next month. Another option for New Yorkers: Drop by tonight’s New York Tech Meetup, where the team will be handing out invites.

The characters change, but the script is always the same. A programmer wants more money from a cable provider and threatens to pull its shows. See: Viacom (VIA) versus Time Warner Cable (TWC), News Corp. (NWS) versus Time Warner Cable, Cablevision versus Scripps Networks (SNI), Etc. Etc.

Spoiler Alert! The conclusion is always the same too: Both sides compromise, and cable subscribers get to watch their shows–in exchange for paying ever-increasing fees.

My interest here is whether either side wants to use the Web as a weapon in the fight given that the Internet is an increasingly plausible alternative for TV watchers who don’t want to pay for cable. Last year, for instance, Time Warner Cable showed its customers how to get Fox shows–and everything else–onto their TVs via the Internet (you can still see those instructions here).

The problem, of course, is that by highlighting the Web option, both sides run the risk of undermining their market power in the long run. If couch potatoes really do get used to the idea of consuming their shows using their PCs, it makes it easier for them to tell both programmers and the cable guys to pound sand.

For now, though, both sides are leaving the Web alone while they rattle their swords.

Disney (DIS) reminds Cablevision’s three million New York-area viewers that they’ll still be able to get ABC shows via an old-fashioned TV antenna. But the network doesn’t mention ABC.com or Hulu, its joint venture with Fox and GE’s (GE) NBC. And Cablevision (CVC), at least so far, hasn’t brought up the Web either.

Both sides are clearly betting this gets resolved before Sunday night when ABC is set to broadcast the Oscars–not coincidentally, one of the only programs you really have to watch live.

Here’s Disney’s opening salvo:

[Image credit: Alexindigo]

But Cablevision says it will let subscribers pull this trick off without extra cables or boxes and promises they’ll love it. The Long Island-based cable company will be testing the technology later this spring, under a clunky but accurate moniker: “PC to TV Media Relay.”

That means you can move anything you can put on your monitor or laptop screen–from streaming video to photos to word processing documents, if you are so inclined–to your TV. Audio, too.

Of course, that’s the idea behind plenty of services and gadgets, from Boxee to Internet-connected TVs to Apple’s (AAPL) not very successful Apple TV box.

And, of course, you can already do this without any of that stuff, and it’s not that hard to pull off. Time Warner Cable (TWC) even showed its customers how during its fight with News Corp. (NWS) over subscription fees for Fox and other channels.*

But the do-it-yourself version still requires at least a couple steps: Figuring out what kind of cord you need to connect your computer to your TV and then, actually connecting it. From a consumer’s perspective, Cablevision’s solution is more elegant, since it’s cable-free; the company says you’ll only need to download one piece of software.

But it’s quite a bit of work on Cablevision’s end, since the company has to port your stuff from your PC through its network and back down to your TV through a set-top box to a channel reserved just for your stuff.

Why go to all this trouble?

If you sort of squint at this for a while, it sort of looks like Cablevision’s version of the “TV Everywhere” idea that Time Warner (TWX) and cable players like Comcast (CMCSA) have been pushing. But in reverse.

TV Everywhere’s offer is that if you pay for cable, you can watch your TV shows on your PC. Cablevision lets you watch your PC on your plasma. But both ideas end up at the same place: They’re meant to give cable subscribers another reason to keep subscribing to cable.

Cablevision (CVC) says the service will launch by June in a “technical trial,” which likely means just a fraction of its three million New York-area subscribers will get to try it. And they’ll have to be Windows users; the cable company says a Mac version will be introduced later.

One thing Cablevision wouldn’t tell me is what it expects to hear from Hulu, the Web video joint venture owned by Fox, GE’s (GE) NBC and Disney’s (DIS) ABC.

Hulu’s attitude about people watching the TV programming it delivers via the Web on a TV screen has ranged from disapproving to downright hostile–just ask Boxee.

That’s partly because Hulu’s TV owners want to enforce the idea that Hulu is a complement to TV, not a replacement for TV. And it’s also because Hulu’s owners see Hulu on a big screen as a feature worth paying for.

In any case, Hulu will have a hard time complaining openly about Cablevision’s plan. Because unlike Boxee’s solution, Cablevision is literally just moving what’s on your PC to your TV.

But there may still be some interesting emails flying back and forth from Long Island to Santa Monica in the next few days.

*Now that its Fox fight is resolved, Time Warner Cable has yanked its cord-cutting instructions. But I have thoughtfully archived them for you. You’re welcome!

But after receiving reader requests to review magicJack, I decided to do so. To my surprise, it worked pretty much as advertised. It has a few drawbacks, and extra fees for added services, such as vanity phone numbers. But I found magicJack easy to set up and easy to use, and it yielded decent, if not pristine, call quality. I even tested customer support—a source of complaints online—and found it friendly, fast and responsive.

MagicJack looks like an oversized USB flash drive. On one end is a standard USB connector for the PC; on the other is a standard phone jack to plug in a phone. It’s compatible with PCs running Windows XP, Vista and Windows 7, as well as with all Intel-based Macs. It works with both corded and cordless phones, and comes with software for dialing, though you can also dial directly from a connected phone.

The low annual fee covers calls to and from any phone on any telephone network—landline or cellphone—not just phones connected to computers or to other magicJacks. The only restriction is that the numbers called must be in the U.S., Canada, Puerto Rico or the U.S. Virgin Islands. You can also buy low-cost prepaid international minutes, or take your magicJack abroad to make free calls home. You can move it among different computers and locations.

MagicJack can also be used without a phone handset, via a computer headset or the computer’s built-in microphone and speakers.

YMAX’s magicJack

There’s nothing new about Internet phone calling. Companies like Vonage and Skype have been doing it for years. But magicJack is different. It emphasizes calling to and from phones on regular wired and wireless phone networks, and its prices for calls to and from such non-Internet-connected phones are much lower.

For instance, the lowest plan advertised on Vonage’s (VG) Web site for calling regular phones in the U.S., Canada and Puerto Rico is $17.99 a month, or about $216 a year, versus magicJack’s $20. And Vonage gives you only 500 minutes a month, while magicJack sets no limit. Skype charges per-minute or monthly fees for calls to regular phones and an added fee to receive incoming calls.

The maker of magicJack says its low prices are possible because the product is produced by a privately held Florida company called YMAX, which is also a phone carrier. The company also runs ads inside its software. You can buy the device at a wide variety of stores, even drugstores and convenience stores.

I tested magicJack on both a PC and a Mac. The software resides inside the magicJack itself and installs each time you connect it.

In my tests, I made and received calls on both computers, using a single landline phone and using a cordless-phone system in my house after plugging its base station into the magicJack. In the latter case, I could make and receive calls from cordless phones all over my house. I exchanged calls with both landline phones and cellphones from the magicJack.

The call quality was good, except for a few times when the connection got scratchy for a second or two. Most of the people I called said they couldn’t tell I wasn’t on a regular call. The system offers voice mail, call forwarding and conference calls, and you can save contacts.

A couple of times I didn’t get an immediate dial tone, and had to hang up and try again.

The biggest downside of the magicJack compared with regular phone service is that you have to be running an Internet-connected computer, with a magicJack installed anytime you want to make or receive calls. Also, as with all Internet phone systems, you have to register your address with 911 emergency systems.

With magicJack, you get a new phone number. The company says it is working on allowing you to port your existing landline number. You can keep your landline number for use on some phones or when you’re not using magicJack.

I found magicJack worked better on Windows than on the Mac. At one point, magicJack customer support had to send me software to patch the Mac version. But the company claims it is fixing that with a new Mac version coming soon.

YMAX also says it plans to roll out this year a Skype-like service that won’t require any magicJack hardware, just a PC or an iPhone. It also plans a new version of magicJack to turn cellphones into wireless magicJack handsets.

I don’t know if those diet pills in the TV ads work. But magicJack does.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

]]> http://allthingsd.com/20100217/magicjack-review/feed/ 0 http://allthingsd.com/20100211/rock-band-falls-flat-for-viacom-but-profits-soar/ http://allthingsd.com/20100211/rock-band-falls-flat-for-viacom-but-profits-soar/#comments Thu, 11 Feb 2010 12:39:45 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=16204 Here’s the problem for Viacom, the media conglomerate that brings you both the Rock Band videogame and the “Jersey Shore” reality show: It brings you both the Rock Band videogame and the “Jersey Shore” reality show.

The latter is a hit for Viacom’s MTV, but sales of the once hot videogame have cooled off, which helped push fourth-quarter revenue down three percent, to $4.1 billion. Wall Street was looking for revenue of $4.23 billion.

The good news: Viacom is much more profitable than it was a year ago, due to hits from its Paramount movie studio, higher license fees from its cable subscribers and some serious cost-cutting: After factoring out one-time charges, the company posted earnings of $1.09 per share, much higher than the 87 cents investors were looking for.

This follows cautiously upbeat performances from other big media companies, including News Corp. (NWS) and Disney (DIS).

Worldwide ad revenue was down three percent, and domestic ads were down four percent. But like other cable networks, the fees Viacom extracts from cable providers kept rising, pushing up 11 percent worldwide.

]]> http://allthingsd.com/20100211/rock-band-falls-flat-for-viacom-but-profits-soar/feed/ 0 http://allthingsd.com/20100202/news-corp-beats-earnings-revenue-estimates/ http://allthingsd.com/20100202/news-corp-beats-earnings-revenue-estimates/#comments Tue, 02 Feb 2010 22:41:33 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15799 Two interesting nuggets from a wide-ranging earnings call today:

• News Corp. CEO Rupert Murdoch tried to lower expectations that his Fox broadcast network would hire Conan O’Brien.
• Murdoch hinted that his book publishing unit is in line to get a new deal on e-books from Amazon, just as Macmillan has demanded (as will other publishers).

On the second point, here’s my on-the-fly transcription and paraphrasing of Murdoch’s comments about Amazon (AMZN), Apple (AAPL) and e-book pricing. It’s one of the most candid descriptions you’ll hear from a top executive about Big Media’s reluctance to embrace digital distribution at the expense of its existing system and revenue:

“We don’t like the Amazon model of $9.99….We think it really devalues books and hurts all the retailers of hardcover books. We’re not against electronic books; on the contrary, we like them very much” because they cost us less to distribute, “but we want some room to maneuver.” The Apple deal…“does allow some flexibility and higher prices” though e-books will still be lower than print versions. And now Amazon is willing to sit down with us again and renegotiate.

UPDATE: Here’s a more complete transcript from Seeking Alpha:

We don’t like the Amazon model of selling everything at $9.99. They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge. We think it really devalues books and it hurts all the retailers of the hard cover books. We are not against [inaudible] books. On the contrary we like them very much indeed. It is low cost to us and so on. But we want some room to maneuver in it. Amazon, sorry Apple in its agreement with us which has not been disclosed in detail does allow for a variety of slightly higher prices.

There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. It appears that Amazon is now ready to sit down with us again and renegotiate pricing.

Again, it’s impossible to stress how scarring the music labels’ experience has been for Big Media. And they’re determined not to repeat the experience. Their takeaway, though, seems to be that they can stave off digital distribution by keeping prices high and inventory relatively scarce. Hard to believe consumers are going to go for that.

---

Earlier

A first glimpse at News Corp.’s fourth-quarter earnings (which, due to the company’s weird fiscal calendar, is technically the company’s Q2 for 2010): Pretty good. And much better than a year ago (thankfully). After factoring out one-time charges, the company posted earnings of 25 cents on revenue of $8.7 billion.

The Street was looking for earnings of 20 cents on revenue of $8.23 billion, and analysts were also hoping the company would boost its earnings forecast, due in part to a bump from the ginormous success of “Avatar.” No word on guidance in the earnings release, though.

I’ll pick through the release for other worthwhile nuggets for the next few minutes. And then the real show begins at 4:30 Eastern, when the company’s earnings call–easily the most entertaining one in its peer group due to the censor-free presence of CEO Rupert Murdoch–begins. We’ll be looking for commentary on his battle/negotiation with Google (GOOG), upcoming content deals with Apple and the iPad, his thoughts on paid content in general, a dash of political commentary or two, and an update on the turnaround effort at MySpace.

From the release: A pretty nice quarter at most of the conglomerate’s divisions, including the previously battered broadcast TV and newspaper groups. News Corp. says print revenue at The Wall Street Journal was up five percent and ads on the Journal’s digital network were up 17 percent.

MySpace and the company’s other digital properties, shuffled into the “other” category, don’t get much of a mention, but don’t seem to have done much, not surprisingly.

But News Corp does mention that digital media earnings were down $32 million compared with a year ago, “principally due to lower search and advertising revenue.” And the company lost $29 million on “digital media dispositions”–i.e., the fire sale/giveaways of properties like Rotten Tomatoes and Photobucket.

Here’s the breakdown by segment (click table to enlarge):

Liveblog

CFO Dave DeVoe: “Extremely pleased” with the quarter.

Movies: Revenue up due to decent DVD sales (no MGM problem here). Also high costs due to “Avatar,” but big profits from the movie will be coming in during the next couple quarters.

Broadcast TV: Local ads are improving; the telecom, fast food, finance categories are all improving.

Cable: Revenue is up 18 percent. Affiliate revenue is up 21 percent (more money for Fox News subs), and there was a “single-digit” boost in ad dollars.

Newspapers: Journal dollars are up, operating costs down. Ad revenue got better as the quarter progressed.

Books: Revenue up, expenses down.

“Other”/MySpace: Digital media revenue down, but cost-cutting helped trim losses.

News Corp. is boosting its dividend by 25 percent.

Guidance: The company’s operating income growth rate is expected to grow from single digits to the high teens. Better than anticipated: Film group, TV and cable. But revenue goals for digital media, including MySpace, will take longer than anticipated.

Murdoch sings the praises of content. [I will not argue with him, for now]. “Avatar” is awesome, he says, a “harbinger of fundamental change in the industry.” Also really good: “Alvin and the Chipmunks.” Fun to hear Rupe say “Alvin and the Chipmunks.”

WSJ is the No.1 paper in U.S. in terms of circulation, influence, quality. WSJ.com is a “digital model for newspapers around the world.”

Fox News Channel’s audience is both “loyal and lucrative.” Roger Ailes is doing an “admirable job” [translation: Bite me, Michael Wolff--the author of a recent Murdoch biography].

Last year, Murdoch says, News Corp.’s pay-to-play ideas sounded nutty, but now “the content clan has gathered around our ideas.” Consumers must pay and will pay “to be entertained and informed.” All those awesome new gadgets being made in China and sold at the Consumer Electronics Show need content or they’re worthless. Content, content, content. Get it? Content, content, content.

Murdoch says he’ll be wringing more dollars from cable operators. And “when it comes to online news, we’ll be changing that model too,” adding that News Corp. is in “substantive conversations with device makers on developing subscription models” to deliver content. And don’t forget about 3-D!

Not performing well but “long-term growth drivers”: Sky Italia satellite service. Also Sky Deutschland. And MySpace is “not yet where we want it.” In the last quarter, however, MySpace “started to see signs of traffic stabilization.”

Shout-outs for Chase Carey and other managers (but not by name).

Q&A

Question: How big a deal is retransmission consent in coming years? $40 million a month? $100 million a month?

Chase Carey: No numbers, but it’s going to be a “transforming event.” We have two of top 10 distributors done, more coming. It’s a three- or four-year process to knock these deals out.

Q: Does this fix the broadcast model?

Carey: “Yes, I guess you could say simplistically, it fixes it.”

Q: What’s the timing on an “Avatar” DVD, and what about a sequel? Also, how do TV ads look this year?

Murdoch: For “Avatar,” we think about 60 percent of profits will be in the next six months. Which means the DVD will be coming “as soon as possible,” but the movie will stay in cinemas for a while because we’re doing huge dollars in theaters still. Sequel? “Very early talks about it. Jim has ideas for one. We haven’t come to any agreement with him….Being Jim Cameron, I wouldn’t hold your breath for an early one.” Asked about the economics of a future release (“Will you keep the same revenue split?”), Rupe sort of rumbles and growls and sort of doesn’t have much to say. “Ask anybody; it is very easy to drop a $100 million in a hurry on a film, and we’d like to lay off some of the risk.”

Carey: TV trends for this year are “positive.”

Murdoch: TV stations will be up 18 or 19 percent, but last year was terrible. We’re still down compared with two years ago. Hard to see more than a quarter in advance. In newspapers, it’s hard to see more than a few weeks.

[Missed a question on Sky Italia here.]

Q: What are growth prospects for cable networks? They’ve been driven a lot recently by new subscriber fees. How much longer can you get those boosts?

Murdoch: Overall, “we think we have great potential for growth. Quite a long way to go yet.” Look at how NBCU’s USA is growing.

Carey: In the U.S., we’re moving to “quality over quantity”–we can wring more out of foreign exchange, etc. Fox News is only getting more powerful; it has “great upside.”

Q: Regarding newspapers, what growth came from organic increase versus currency fluctuations?

The majority is from foreign exchange.

Q: Does your guidance assume that the “Avatar” DVD is coming in the next two quarters?

Murdoch: “Yes, but it won’t be 3-D” [which I don't think the analyst was asking about].

Q: Back to retransmission consent: You’ve been getting more and more money from cable guys. Why can’t you get $4 or $5 per subscription for Fox broadcast subs?

Murdoch: “We’re modest people.”

Carey: Hyuk, hyuk. Real answer: It takes time. “We try to approach this constructively. We’ve built businesses with [cable guys], we’ve built valuable cable channels” [translation: patience!]. We want to extract more without killing the cable guys.

Murdoch: That said, we’re asking for the same thing [for broadcast channels] that the cable networks are getting, which “certainly won’t kill the cable companies.”

Q: Please talk about value of film libraries (i.e., MGM). They’re generating big operating profits for cable now. How long will this last?

Murdoch: Regarding the MGM auction, “you can count us out of that one altogether” because others will pay more than we’re willing. And we’re not pursuing the Miramax catalog at all.

Carey: A film library by itself, without new stuff coming through, is a “depreciating asset.”

Q: On guidance: You say the ad market getting better, etc., but it sounds like you’re saying Ebidta growth is slowing.

Murdoch: “We honestly do not have any visibility about the last quarter.”

Q: On books/e-books/Apple, what’s going on with that?

Murdoch: We don’t like the Amazon model of $9.99….We think it really devalues books and hurts all the retailers of hardcover books. We’re not against electronic books; on the contrary, we like them very much, lower costs to us, but we want some room to maneuver. The Apple deal does allow “some flexibility and higher prices” though e-books will still be lower than print. And now Amazon is willing to sit down with us again.

Press Q&A

Q: What’s up with plans to charge for newspapers on the Web?

Murdoch: “Not ready to announce yet [long pause]. We won’t be ready yet to make an announcement.” A “lot of talks with a lot of people.” There will be more to say within the next two months, Murdoch adds.

Q: Are you still going to fall $100 million short on the Google deal?

Murdoch: Yes. People using social networks don’t use search a great deal. Facebook has seen this, too. It’s “really too early to make confident predictions…but from going down, we’re beginning to go up.”

Q: Can we get some details about Time Warner Cable (TWC) deal?

Nope.

What about Conan O’Brien on late night?

Murdoch: If the programming people can show us we can do it and make a profit on it, we’ll do it in a flash. I’m sure there have been conversations with Conan, but “if you mean real negotiations, no.”

[Missed two questions here.]

Q: Another late-night question: If you do go into negotiations with Conan, how do you placate your affiliates?

Murdoch: It’s a different deal than NBC. They screwed up 10 pm, which reduced the lead-in to local news. Our affiliates run syndicated programming at 11:30, though, so it will take time to adjust there.

Call ended. This one seemed short to me.

More or less redundant disclosure: News Corp. (NWS) owns this Web site.

]]> http://allthingsd.com/20100202/news-corp-beats-earnings-revenue-estimates/feed/ 0 http://allthingsd.com/20100127/fcc-to-google-a-350-%e2%80%9cequipment-recovery-fee%e2%80%9d-whats-up-with-that/ http://allthingsd.com/20100127/fcc-to-google-a-350-%e2%80%9cequipment-recovery-fee%e2%80%9d-whats-up-with-that/#comments Wed, 27 Jan 2010 14:02:30 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=33604 The Federal Communications Commission, which has sent letters to all major carriers regarding their wireless early-termination fees, has expanded its investigation to include an industry newcomer: Google.

On Tuesday, the agency sent a letter to the search company inquiring about the $350 “equipment recovery fee” it has attached to its new Nexus One phone. Levied in addition to a $200 termination fee from T-Mobile, Google’s charge means that Nexus One users who cancel service in under 120 days face a total of $550 in penalties.

“The combination of ETFs from Google and T-Mobile for the Nexus One is unique among the four major national carriers,” the FCC said in its letter. “Consumers have been surprised by this policy and by its financial impact. Please let us know your rationale(s) for these combined fees, and whether you have coordinated or will coordinate on these fees and on the disclosure of their combined effect.”

Among the other questions put to Google:

• Does the ETF itself vary by device (e.g., higher ETFs for advanced devices)? If higher ETFs apply to a certain class of devices, exactly how is that class defined?
• Are ETFs prorated so that the customer’s liability decreases over time? If so, what is the exact schedule by which they are prorated?
• Press reports and public statements from wireless companies have attributed ETFs to several different factors. What is the rationale for your ETF(s), and how specifically do the structure and level of those ETF(s) relate to that rationale?

Google (GOOG) has previously dismissed questions likes these, claiming fees like those it has implemented are “standard practice” for third-party resellers of mobile service, who are only trying to recoup subsidies they offer customers who sign up for multiyear service contracts.

But that doesn’t quite explain why the fees charged by Google and T-Mobile together amount to far more than most ETFs. Now that the FCC is asking, Google will have to offer a more complete explanation.

]]> http://allthingsd.com/20100127/fcc-to-google-a-350-%e2%80%9cequipment-recovery-fee%e2%80%9d-whats-up-with-that/feed/ 0 http://allthingsd.com/20100115/new-verizon-wireless-plans-available-monday/ http://allthingsd.com/20100115/new-verizon-wireless-plans-available-monday/#comments Fri, 15 Jan 2010 13:30:44 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=32778 As expected, Verizon Wireless rolled out some new wireless pricing plans this morning, promising “simple, affordable convenience.” And the carrier does provide that if you’re a feature phone user with little need for a data package. Or an AT&T customer.

Verizon (VZ) dropped its nationwide unlimited voice plan to $69.99 a month from $99 and began offering a nationwide unlimited voice and text plan for $89.99.

But if you’d like a data plan to go along with them, you’ll be looking at additional fees–$9.99 for a 25-megabyte package and $29.99 for an “unlimited” one. The $19.99 data package option for 3G multimedia phones has been discontinued.

So what Verizon has really done here is cut the price of voice and raise, substantially, the price of data, as Pali Research analyst Walter Piecyk pointed out in a research note to clients this morning.

“This is 30 percent cut to voice and a 50% increase to data which effectively results in about an 8-10% effective cut to the more popular high-end rate plans,” the analyst explained.

“The rate moves appear to be trying to increase the perceived relative value of data,” Piecyk added. “There is in effect a price increase for data to $30 from $20, a level that most carriers have charged. Increasing prices is not a logical way to drive adoption but Verizon mitigates that increase with steep cuts in voice and appears to be using its industry leading position to move the perception on the value of data.”

One last point worth making here: Verizon’s new plans are more expensive than those offered by Sprint Nextel (S) and T-Mobile, but cheaper than AT&T’s–at the moment, anyway. The last time Verizon lowered its plan prices, AT&T (T) followed suit within a matter of hours.

The plans go into effect Monday, Jan. 18.

Below, some comparative tables on Verizon’s new pricing plans, courtesy of Pali (click to enlarge), and the official announcement:

VERIZON WIRELESS OFFERS SIMPLE, AFFORDABLE CONVENIENCE WITH NEW UNLIMITED VOICE PLANS
New Nationwide Plan Options Include Unlimited Talk and Text to Pair with Robust Data Plans on the Latest 3G Phones

BASKING RIDGE, N.J. – New monthly service plans from Verizon Wireless make connecting to the nation’s most reliable wireless network easier than ever. Beginning Jan. 18, customers may sign up for a new Nationwide Unlimited Talk plan that allows customers to call anyone in the United States for $69.99 monthly access or a Nationwide Unlimited Talk & Text plan to call and send text, picture and video messages to anyone in the country for $89.99 monthly access.

Nationwide Family SharePlans® will also have new unlimited options. Nationwide Unlimited Talk Family SharePlans will be $119.99 monthly access while the Nationwide Unlimited Talk & Text Family SharePlans will be $149.99 monthly access. All Family SharePlan pricing includes the first two lines of service. Standard text message rates will apply for customers on the Nationwide Unlimited Talk plans who do not sign up for a text messaging bundle.

Data Packages

The company also announced the expansion of the 25 megabyte for $9.99 per month data package requirement to include all Verizon Wireless 3G Multimedia phones, which gives customers quick access to Mobile E-mail, games and the Internet. The data package requirement was introduced last year with the LG enV® TOUCH and the Samsung Rogue™. Today’s announcement expands that list to include new activations of the LG Chocolate Touch™, LG enV®3, LG VX8360, Motorola Entice™ W766, Nokia 7705 Twist™ and Samsung Alias™ 2. The company expects to introduce a host of 3G Multimedia phones in 2010. The $19.99 data package option for 3G Multimedia phones has been discontinued.

Customers using Simple Feature phones (Mobile Web-enabled) will continue to pay $1.99 per megabyte or choose either the $9.99 or $29.99 data packages. The consumer data package for 3G Smartphones such as BlackBerry®, Windows Mobile® or Android devices will remain at $29.99 per month.

Prepaid Plans

Verizon Wireless will also offer customers new prepaid plans beginning Jan. 18. For those who prefer pay-as-you-go options, but want a no-holds approach to calling and texting, new Monthly Unlimited Prepaid plans will give customers the same great calling options as monthly contract subscribers for just $5 more per month. Prepaid Monthly Unlimited Talk is now available for $74.99 per month while contract subscribers pay $69.99 for the same unlimited calling option. Prepaid Monthly Unlimited Talk & Text will be available for $94.99 per month. The 450- and 900-minute Monthly Prepaid plans will also be available for $5 more per month than comparable postpaid plans.

Existing Customers

Today’s announcement will not have an impact on existing customer contracts, although customers may choose to move to any of the new plans. The company allows customers to change their service plans at any time without penalty or contract extension. To move to the newly announced plans, customers may go online to their My Verizon accounts at www.verizonwireless.com or contact Customer Service at 1-800-922-0204.

]]> http://allthingsd.com/20100115/new-verizon-wireless-plans-available-monday/feed/ 0 http://allthingsd.com/20091231/time-warner-cable-shows-subscribers-how-to-cut-the-cord/ http://allthingsd.com/20091231/time-warner-cable-shows-subscribers-how-to-cut-the-cord/#comments Thu, 31 Dec 2009 16:41:21 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=14620 The nightmare scenario for cable companies is that customers drop their TV subscriptions and grab their video directly from the Web, turning the cable guys into mere providers of “dumb pipes.”

But here’s a comprehensive set of instructions from a big cable company showing its customers how to do just that. It suggests that they head to the likes of Hulu, Fancast or “any search engine”–weird for it not to call out Google (GOOG), no?–to find their favorite shows.

Time Warner Cable’s (TWC) instructions on “How to Connect Your PC to Your TV” are embedded at the bottom of this post. And here’s a helpful video (sorry for the clumsy screengrab; the video kicks in at about the five-second mark, and there’s some unpleasant coughing around 2:30. Yikes!):

The instructions (Time Warner Cable promised to provide them last week) are part of the company’s game of chicken with News Corp.’s (NWS) Fox, which is supposed to come to a head tonight. If you believe the posturing so far, Fox and its associated cable channels (Fox News, FX, etc.) will disappear after midnight tonight because the two sides can’t agree on  new rate.

Alternate view: This thing will go down to the wire and then get resolved, like Time Warner Cable’s back-and-forth with Viacom (VIA) a year ago.

If you want blow-by-blow coverage, let me suggest the Los Angeles Times’s tireless Joe Flint, who is updating each salvo in real time, or very close to it. Or you can just turn on your TV set after midnight tonight and take a look for yourself.

Still, no matter how this resolves, the danger for both sides is that consumers really do take up Time Warner Cable on its offer and start watching Fox stuff on the Web. And to be clear: Fox would prefer that people keep paying for cable TV, because the media company really likes subscription fees from cable TV providers.

Peoplr are already moving to the Web to watch TV, of course, but it’s not mainstream behavior yet. It may be inevitable anyway, but no matter what you hear from both sides of this contract dispute, both sides like this model very much and they’d like to keep it intact as long as possible.

Which is why discussions with would-be “over the top” providers like Apple (AAPL) are supposed to be about adding additional TV programming, not replacing cable.

The safety catch here for the TV business is that consumers who do go to the Web to watch TV, at least through sanctioned means, may be disappointed: They’ll find that programming there doesn’t show up for at least a day, and often longer, after it airs. And some stuff, notably live sports like the NFL playoffs (contrary to the image in the screenshot above) and Fox’s “American Idol” don’t make it on the Web at all.

TV_to_PC_TWC –

]]> http://allthingsd.com/20091231/time-warner-cable-shows-subscribers-how-to-cut-the-cord/feed/ 0 http://allthingsd.com/20090901/napster-dont-hold-your-breath-waiting-for-our-awesome-new-iphone-app/ http://allthingsd.com/20090901/napster-dont-hold-your-breath-waiting-for-our-awesome-new-iphone-app/#comments Tue, 01 Sep 2009 13:40:20 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=10574 Best Buy’s Napster wants you to know that you can now buy music “over the air” and beam it directly to your phone. Yawn.

What about the company’s awesome new iPhone app, the one that will let you stream music directly to your handset? You know, like the one that Apple (AAPL) just approved for Spotify, the superhyped service you can’t even get in the U.S. yet?

Don’t hold your breath says Best Buy (BBY). That Napster app is not coming anytime soon. And neither are apps for Google’s (GOOG) Android platform or Research In Motion’s (RIMM) BlackBerry.  And it’s because of those darn music labels. From a press note the company sent out this morning:

One of the most common questions Napster receives is, “When will you offer an iPhone app?” Well, Napster has created an iPhone application that allows subscribers to stream music on-demand to their iPhone—including personal playlists, albums and radio stations. You can imagine the company is also looking at streaming applications for several other mobile platforms as well (Blackberry, Android). However, due to the high licensing fees for streaming to a mobile phone, Napster has not yet submitted the iPhone app to Apple for approval or attempted to bring the application to market.

Now that’s an interesting approach–something akin to showing off a shiny new sled in a toy store window below a sign that reads “Not coming soon, not our fault.” Or that bank ad where the jerk takes the truck from the chubby kid.

I also don’t know if Napster’s explanation tells the whole story: Best Buy/Napster and the big labels already have an agreement that lets the company stream unlimited music to your PC for $5 a month. Just how much more would the company have to charge to accommodate the fees the labels want for mobile streaming? I’m supposed to talk with Napster folks later today, and if there’s anything I can pass along, I will.

UPDATE:  A little clarification from Napster president Brad Duea. His company’s position is that it doesn’t want to move about its $5 a month price, and that it would have to do so in order to offer streaming.

Why would it have to do that? Duea won’t spell it out. But henotes that RealNetworks’ (RNWK) Rhapsody, which has submitted an streaming music app to Apple, charges $15 a month for “on the go” service it already offers, and assumes it will charge the same for a service that works with the iPhone. Similarly, Spotify charges the equivalent of $16 a month for its premium service in the UK.

Of course, it’s possible that RealNetworks or Spotify will try subsidizing some of the cost for a mobile app in order to grab market share, and offer their iPhone/mobile services for something closer to Napster’s $5 fee.

]]> http://allthingsd.com/20090901/napster-dont-hold-your-breath-waiting-for-our-awesome-new-iphone-app/feed/ 0 http://allthingsd.com/20090819/a-service-to-make-401k-tweaking-a-piece-of-cake/ http://allthingsd.com/20090819/a-service-to-make-401k-tweaking-a-piece-of-cake/#comments Thu, 20 Aug 2009 01:09:04 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20090819/a-service-to-make-401k-tweaking-a-piece-of-cake/ In the current economic turmoil, with investment portfolios melting in value, it’s become harder than ever to plan for retirement. Many people lack good investment advisers, or the time and skill to do their own investment research.

So, a small San Francisco company, Cake Financial, is introducing Thursday a $99-a-year automated service that attempts to tailor a mutual-fund portfolio that will get you to retirement according to your goals. It’s designed to be simple, clear and relatively quick, using plain English, easy-to-understand graphics, and a step-by-step approach that walks you through the process. In essence, it’s a robotic, low-cost investment adviser.

The service, called Cake Premium, automatically imports your investment and 401(k) account information from any of 65 major investment companies, analyzes and categorizes your holdings, and then proposes how best to reallocate your positions. It uses its own proprietary formula to rate funds, both on their performance and on their fees, and suggests substitutes that it believes would be better.

This new Premium service evolved from two earlier Cake products, a free investment-tracking service and a $30-a-year service comparing mutual funds. Both products emphasized social networking among active investors. But the new Premium version goes much further in terms of recommendations, is aimed at average folks and doesn’t focus on the social networking. Like the others, it’s Web-based and runs in all the major browsers.

Cake (cakefinancial.com) isn’t a registered adviser or broker, and doesn’t actually conduct any transactions. So, if you choose to follow its advice, you’ll have to buy or sell the necessary funds elsewhere. The company says it doesn’t receive commissions or fees, and has no financial ties to any mutual-fund company, bank or broker. It says its income from Cake Premium comes solely from consumer subscription fees.

I’ve been testing Cake Premium, using a dummy portfolio provided by the company. Because I am not an investment expert, I can’t evaluate the merit of Cake’s recommendations. You may want to ask a trusted adviser about that after test-driving it via Cake’s 30-day free trial. But I can say that I found the service clear and easy to use, and can see how it could be helpful to average people with limited time and knowledge. However, I also found that Cake Premium has some significant limitations.

Here’s how it works. After you enter a few basic facts, like age and desired retirement date, you tell the service your login information for your retirement account, such as a 401(k). But it won’t work if your account isn’t at a major investment firm like Fidelity or Schwab (SCHW). And you can’t manually enter your data from an account that isn’t covered. The company assures users this is all done very securely.

Next, Cake Premium will assess the mix of mutual funds you hold, and decide if that mix matches your goal. It rates each fund, categorizes them by type, and then labels your current strategy by degree of risk. For example, it might tell you that your current holdings are “moderately aggressive” or “conservative.” It might also tell you “you are paying way too much in fees.” All of this is displayed in very clear text and graphs.

Then, it makes an overall judgment. In my case, Cake Premium declared that the investments in my test account weren’t properly diversified and represented the wrong level of risk for my situation.

Finally, the service will suggest a new allocation of funds, propose you substitute some funds with others it considers better, and present you with a detailed listing of which ones to sell and which to buy—naming specific funds. You can, at any time, alter Cake Premium’s proposals to see how your chances of meeting your goals will change, and you can do the same by adjusting a few factors like when you might retire and what percentage of current income you’d need.

But what about those limitations? For one thing, the service is focused only on mutual funds, and can’t give you advice about CDs or money-market funds. Also, it is all about retirement, not other goals, like saving for college.

And unlike a good investment adviser, Cake Premium learns only a portion of your financial picture, so its mutual-fund recommendations aren’t made in a complete context. For instance, it includes only a single small box into which you can type a total of your other assets. The company says it plans a more detailed information-entry process in future versions.

Finally, a maddening problem: If you are trying to reallocate the mutual funds in a 401(k) plan, Cake Premium isn’t smart enough to limit itself to suggesting substitutes that are actually available in your plan. It may in fact suggest only alternative funds that your plan doesn’t offer. The company suggests you purchase such funds for a separate account, like an individual retirement account.

Overall, Cake Premium may be a helpful tool in confusing times. But its limitations make it an incomplete solution that’s no threat to a really good, honest investment adviser.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

]]> http://allthingsd.com/20090819/a-service-to-make-401k-tweaking-a-piece-of-cake/feed/ 0 http://allthingsd.com/20090513/verizon-now-sells-subsidized-netbook-with-cell-service/ http://allthingsd.com/20090513/verizon-now-sells-subsidized-netbook-with-cell-service/#comments Thu, 14 May 2009 01:12:03 +0000 Walter S. Mossberg http://ptech.allthingsd.com/20090513/verizon-now-sells-subsidized-netbook-with-cell-service/ As laptops have shrunk in size and price, and cellphones have expanded in size and capability, the two are increasingly overlapping in function. Now, their pricing and sales models are blurring, too.

For a while, some wireless carriers in Europe and in Asia have been selling tiny laptops, called netbooks, equipped with built-in cellular modems, at low, subsidized prices, just as they do with mobile phones. And, just as with a subsidized phone or a plug-in laptop data card, there’s a catch: To get the low upfront price, the customer must agree to a contract and pay a monthly data fee.

Starting May 17, Verizon Wireless, the largest U.S. wireless carrier, will try the same thing on these shores, selling a netbook model made by Hewlett-Packard (HPQ) at $200, after a $50 mail-in rebate — less than half its usual price of $520. To get this price, the customer must sign a two-year contract and pay either $40 or $60 a month, depending on the amount of data to be consumed.

I’ve been testing this netbook, the H-P Mini 1151NR, a version of H-P’s Mini 1000 series with a cellular modem built-in. This model sports a 10.1-inch screen, and yet is very compact and easy to tote. It weighs just 2.45 pounds, is about an inch thick, and is only about 10 inches long and 6.5 inches deep. It has an Intel (INTC) Atom processor, common in netbooks; runs Windows XP; and includes one gigabyte of memory, a built-in Webcam and an 80-gigabyte hard disk. Like most netbooks, it includes Wi-Fi, but lacks a DVD drive.

My verdict: This netbook is an adequate light-duty computer, and $200 is a low price for a PC with a hard disk running Windows XP. But Verizon’s charge for Internet service is high if you intend to rely on that service as your main online connection, because the data levels covered by the carrier’s plans aren’t unlimited, and cost extra after you exceed a certain amount. It makes much more sense if you travel a lot, stay within the data limits each month, and want to avoid hotel and airport Wi-Fi fees.

But the Verizon (VZ) service is slower than many Wi-Fi connections, and it can be obtained for almost any laptop by buying a plug-in card that carries the same monthly fees. In my tests, at a typical Marriott (MAR) hotel, the Verizon cellular service achieved download speeds of around 1.6 megabits per second, while the Wi-Fi modem in the same PC got over five mbps.

The H-P Mini 1151NR

Also, even for a netbook, the computer itself is underequipped. Its 80-gigabyte hard disk is cramped by today’s netbook standards, and it has only a small three-cell battery that doesn’t last long. In my tough battery test, where I left the cellular Internet connection on, disabled all power-saving features, and played music continuously, the H-P Mini 1151NR lasted a pathetic one hour and 55 minutes. That suggests that, in normal use, you might get around 2.5 hours of use.

A bigger six-cell battery is available for $130 from Verizon, but that’s a huge price premium on a $200 PC, plus it makes the netbook 75% thicker and 30% heavier. Verizon doesn’t offer a larger internal hard disk.

By comparison, you can buy an Acer One Windows XP netbook with the same size screen as the Verizon netbook, and twice the hard disk and battery capacity, for $340. The Acer lacks the built-in cellular modem, but you can buy that from Verizon in plug-in form for $30, with the same monthly fees. Total upfront price: $370, versus $330 for the Verizon model with the bigger battery.

You could also pay much less at a RadioShack (RSH) store, which is selling a subsidized netbook with a built-in cellular modem and required contract (with AT&T) (T) at $60 a month. This model, also an Acer running XP, has a smaller 8.9-inch screen, but most other specs are similar to those on the Verizon model. Yet there’s one enormous difference: It costs only $50, plus a $36 activation fee.

In my tests, the Verizon/H-P netbook handled all common tasks well, if not at blazing speeds. It lacks Microsoft Office, but includes the lesser Microsoft Works productivity suite. I was able to download and run common third-party programs like Firefox and iTunes. The built-in Verizon software for managing the cellular and Wi-Fi connections worked very well, and can be upgraded to a new version with added features.

The hardware has some notable downsides. The keyboard feels too flexible, and some symbols on the function keys are hard to read. The mouse buttons are awkwardly arrayed on the sides of the touch pad, not below it. And the speaker, while loud, is tinny. Also, the machine has a bunch of craplets, mostly links to H-P Web sites or to companies like eBay (EBAY) and Pandora.

Still, if you travel a lot and like using a cellular modem, the machine’s $200 price is compelling, so long as you can handle the wimpy battery and small hard disk.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

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