That’s the real story behind the Netflix/Starz breakup, says the Los Angeles Times. The paper says that Netflix was willing to pay some $300 million a year to renew the deal — more than 10 times what it’s paying now — but that Starz insisted that the video service change its pricing, too:

“Representatives for the cable network owned by John Malone’s Liberty Media were insistent that Netflix create a new “tier” for subscribers who wanted its movies at a higher price than the $7.99 it currently charges for online video. That would have put Netflix more in line with the pricing of cable and satellite companies, a step the video company apparently wasn’t willing to take.”

That is: Starz was willing to sell access to its stuff (and stuff it controls from Disney and Sony), but only if Netflix was willing to make its service less compelling to consumers, via a price hike.

Does this sound familiar? It should. It’s the same reason, more or less, that Hulu introduced a pay service last year.

And it’s why Fox (and soon, ABC and others) has started pulling back some of the free TV it puts on the Web: The people who make money from the traditional TV/video business don’t want that business to change. Or at least they want to slow change down as much as they can.

So they’re willing to make real sacrifices to make that happen. The TV networks, for instance, are willing to give up Web advertising dollars by walling off their stuff online. And Starz, theoretically, is willing to give up $300 million a year in order to placate its cable distributors like Time Warner Cable and Comcast.

If that’s really the case, I’m hedging because it’s possible there’s a different backstory at play here (but note the LAT has excellent entertainment-biz reporters, and the spin syncs up with the official commentary from both sides).

A more practical reason to hedge is that even though both sides have pushed back from the bargaining table, there’s still quite a bit of time left before the deal expires in February.

And both sides have very good reasons to come back: That $300 million could have been about a fifth of Starz’s 2012 revenue, says Citigroup analyst Mark Mahaney.

And while Netflix says it doesn’t really need Starz’ stuff, because it’s now so diversified, that’s a little hard to stomach — after all, it was willing to pay $300 million a year for it.

That’s the scenario the Los Angeles Times floats at the bottom of its Hulu-for-sale piece today:

Hulu’s owners are pushing for the free service to require users to prove they are cable or satellite TV subscribers before they could gain next-day access to current shows, said two people privy to the discussions. Otherwise, they would be forced to wait eight days to catch up on programs they’ve missed, they said.

The industry term for this is “authentication,” and I’ve heard a similar story this month but haven’t been able to confirm that it’s true. If it is, you can go ahead and mark Hulu’s sales price way, way down.

That’s because tying Hulu to cable subscriptions is going to knock out a big chunk of the service’s viewers. Some of them will be people who don’t pay for cable and don’t have any plans to do so. And some of them will be cable TV subscribers who should be able to watch shows but can’t deal with the hassle of proving that they’re entitled.

It’s theoretically possible for Hulu and the cable guys to build a seamless, pain-free authentication process. And that will get more likely if they could do a deal with, say, Facebook (as Time Warner and Verizon have discussed). But I wouldn’t count on it any time soon.

In the meantime, authenticated Web TV services aren’t impossible to access, but they’re not easy (try signing up for the WatchESPN app and you’ll see what I mean). And Hulu is all about easy instant gratification.

Why would Hulu’s owners push to make the service less attractive? The justification I’ve heard is that most Hulu viewers are paying for TV anyway, so this really wouldn’t be a big deal.

But the real answer is that this is meant to appease cable TV providers who are paying Hulu’s owners — via “retrans” deals — for the rights to provide the shows that Hulu is giving away on the Web. And it’s also meant to protect the value of broadcast TV advertising, since the ad business still doesn’t value a Web eyeball as much as one that watches on a TV.

Again, this is the kind of tension between business models that has been a problem for Hulu almost from the get-go. And it has been the source of many of the disagreements between Hulu CEO Jason Kilar and his owners for some time.

And again, it’s the kind of problem that any potential Hulu buyer has to consider: The people who own Hulu are the ones who provide it with almost all of its killer content, and they’re not gung-ho about making the thing work. What happens if they don’t own the company at all?

That’s my translation of comments from Turner Broadcasting’s Phil Kent today. The head of Time Warner’s cable network told the crowd at a Citigroup investment conference that his company had pulled out of bidding for reruns of “Modern Family” because the show was “a little too prevalent on the Internet.”

The sitcom runs on both ABC.com and Hulu, so I’m not clear if Kent was talking about one or the other, or both. Either way, those comments have to simultaneously please and dismay “Modern Family” creator Steve Levitan, who has complained that giving away streams of his show on Hulu doesn’t do him any good and probably does him harm.

Levitan isn’t the only one who thinks that way: There are plenty of TV people who worry that free streaming on the Web is hurting their business, either by sapping ratings or cutting down on the appetite for DVDs and syndication. In this case, the supposed value shrinkage hurts News Corp., which produces the show and owns the rerun rights, more than it does Disney’s ABC, which airs the initial run. (News Corp. also owns this Web site.)

That’s one of the fundamental tensions Hulu has to deal with, and the primary reason why taking the joint venture public remains such a long shot–until all of its owner/partners are willing to make long-term programming commitments to the site, it’s hard to see the long-term value in the company.

Still, it’s important to note that Kent didn’t abstain from bidding–he simply dropped out. The Los Angeles Times’ plugged-in Joe Flint estimates that Turner was willing to pay about $1 million per episode, which isn’t as much as the winning $1.4 million bid, but isn’t immaterial, either.

Oh. And the winner of the bid? GE’s NBC Universal–one of Hulu’s three owner/partners.

Like a print newspaper.

Search Engine Land’s Danny Sullivan was flipping through the Sunday edition of the Los Angeles Times yesterday and stumbled into this Chrome ad (click image to enlarge). It’s a reference to Google’s head-scratching “Things I Learned About Browsers” e-book.

This is the part of the post where I’m supposed to point out how ridiculous it is for a Web company to advertise anything at all in offline media. And how especially ridiculous it is for someone to advertise a browser in a newspaper.

But then again: It worked!

(Almost as surprising: Search guru Danny Sullivan routinely reads the print version of the LA Times!)

The Facebook movie is finally here, the reviews are in and–no surprise–the critics are raving.

After all, it was done by Hollywood pros director David Fincher and writer Aaron Sorkin, who have apparently transformed the appalling badly penned and very fictional book “Accidental Billionaires: The Founding of Facebook A Tale of Sex, Money, Genius and Betrayal” by Ben Mezrich into some bit of cinematic art.

But that’s not BoomTown talking, so here is a rundown of five reviews by top critics, as collected by the terrific Rotten Tomaties site (you can click on the links below for the full reviews):

Kenneth Turan, Los Angeles Times:

“Smartly written by Aaron Sorkin, directed to within an inch of its life by David Fincher and anchored by a perfectly pitched performance by Jesse Eisenberg, ‘The Social Network’ is a barn-burner of a tale that unfolds at a splendid clip.”

Owen Glelbermann, Entertainment Weekly:

“‘The Social Network’ has everything you want in a thriller for the brain: Huge doses of ego and duplicity, corporate backstabbing, and some very layered performances.”

Joe Morgenstern, The Wall Street Journal:

“This account of Facebook’s founder, and of the website’s explosive growth, quickly lifts you to a state of exhilaration, and pretty much keeps you there for two hours.”

Bob Mondello, NPR:

“‘The Social Network’ is terrific entertainment–an unlikely thriller that makes business ethics, class distinctions and intellectual-property arguments sexy.”

Joe Neumaier, New York Daily News:

“Weeks after seeing it, moments from it will haunt you.”

Hauntingly sexy is simply not the Facebook CEO Mark Zuckerberg that I know or what most think of the powerful social networking site, but it seems to go on and on like that in the reviews, with every critic using the film to wax poetic about life in the digital age.

(Personally, I find all my life lessons in “The Terminator” series, but no one seems to grok my profound insight here.)

On Rotten Tomatoes, which you can see above, the movie got a 97 percent critics rating, although only an 81 percent audience vote. Still, only Ben Affleck’s “The Town” is as close.

In other words, Mark, even if it is trashing you as a person, what you represent seems to have inspired analog ecstasy and movie magic.

And for most film critics, it seems, a very happy ending.

I will be seeing “The Social Network” later today at a special screening in Silicon Valley, sponsored by Eastwick Communications, which will be followed by a panel discussion titled: “Trust, Privacy, and Ethics in the Facebook Age.”

I am the moderator, and the interviewees include M. Ryan Calo, director of the Consumer Privacy Project at Stanford Law School; Matt Cohler, one of Facebook’s earliest execs (where he remains a special advisor) and now a VC at Benchmark Capital; FutureWorks’ Brian Solis; and ReputationDefender CEO Michael Fertik.

Video TK, natch, although I am going more for wobbly, rather than exhilarating.

I certainly could not do much better than another genius version by Next Media Animation from Taiwan. While only in CGI, there is bathroom sex, beatings, peepholes and–say what?–a gay love triangle.

Really and truly–enjoy:

I’m told that Apple (AAPL) has finalized a deal with Disney (DIS) for some of its shows, which isn’t a surprise. Steve Jobs has had a hard time convincing other networks, but sources tell me News Corp.’s (NWS) Fox is likely to join in as well, particularly if Rupert Murdoch thinks he can extract some iPad favors out of Jobs down the line (the Los Angeles Times reported the same thing last night).

Big deal? Maybe. Plenty of my bloggy brethren are convinced the TV business model is going to get blowed up real good, with Apple and other Web heavyweights doing the demolition. Even some grown-ups feel the same way.

But it’s worth noting that TV has been facing off against the forces of digital disruption for a long time, and it’s been holding its own so far.

Apple–with an initial push from Disney–started selling TV shows a day after they aired back in 2005, for $1.99 a piece. Five years later, after sales have stagnated, they’re cutting prices by a buck (ignore the rental vs. download distinction–most consumers watch these things only once, anyway).

Bear in mind that you still won’t get to watch any ABC show via iTunes until it’s already aired on TV. And bear in mind that this is in lieu of the product Apple really wanted to sell: $30-a-month Web TV subscriptions.

That doesn’t sound like a tectonic move to me. It sounds like the TV industry protecting its core businesses–advertising and cable fees–while playing around at the margins looking for incremental dollars.

Meanwhile, if Apple, or Google (GOOG) or Netflix (NFLX) or whoever, really wanted to compete head-to-head with cable, it could. The network guys would be happy to sell their programming at the same price, in the same bundles, as the cable guys. That’s what the direct satellite guys started doing in the ’90s, and while the cable guys didn’t like it, there wasn’t much they could do about it.

But those license deals are expensive. Very expensive. The Disney-Time Warner Cable (TWC) license deal, which should be announced any minute (or tomorrow), will likely value each of the cable provider’s 12.7 million subscribers at something north of $8.00 per subscriber, per month. And the Web powerhouses didn’t become Web powerhouses by paying premium prices for other people’s content.

Maybe that stuff really will get devalued, a la music, because most people steal it or ignore it. But we’ve been waiting for that moment for some time and it hasn’t shown up yet.

Or maybe the new generation of devices–we’re only three years into the iPhone era, and just a few months (!) into iPad time–will make a difference this time around. And maybe Apple will use its marketing clout to push the rentals really, really hard.

Maybe! But for now, I think it means a few more dollars, and maybe a few more eyeballs, for “Modern Family.” Which should make Steve Levitan happy, but it won’t change the world.

The Los Angeles Times, which first reported the story, says Khare is sitting next to Slide founder Max Levchin, who sold his company to Google (GOOG) a few weeks ago, and now works there as a VP of engineering.

The LAT’s Jessica Guynn assumes that Khare will work with Levchin and Google’s Vic Gundotra’s efforts to roll out a “social”…well, we’re not exactly sure what it will be. But it will be something, and it will compete with Facebook. Right?

With his vision for an “open, interoperable social networks,” Khare’s a good fit for Google, which has championed that approach over Facebook’s “walled garden.”

Khare joined Google because he was sold by vice president of engineering Vic Gundotra’s pledge that Google is serious about social, a person familiar with the situation said.

“He has built a lot of interesting pieces that would be useful to anyone building a social network,” the person said.

It’s not going away. In response to questioning from the Federal Communications Commission, NBC has described its version of the incident.

But the GE (GE) unit doesn’t want everyone to see what it has to say. At NBC’s request, a large chunk of its statement has been redacted.

See for yourself, courtesy of MediaBistro’s Alex Weprin, who has been going through NBC’s filing (click image to enlarge):

The text that NBC hasn’t blacked out is relatively straightforward, and it’s consistent with NBCU boss Jeff Zucker’s comments in February: Hulu blocked Boxee because it streamed Hulu’s content without using Hulu’s wrapper.

And those comments still appear to contradict Hulu CEO Jason Kilar’s original position, which is that he blocked Boxee because his “content providers requested” that he do it.

So what about the rest of NBC’s statement, which we can’t see? Got me.

The bigger picture here is that both Comcast (CMCSA) and NBCU need to convince Washington that their proposed merger won’t consolidate enormous power in the hands on one company. Which is of course exactly what the merger is supposed to do.

But one way to appease lawmakers may be some sort of “hands off Hulu” pledge, whereby Comcast promises to leave access to the site unfettered. Question: Is that what NBC’s partners–News Corp.’s (NWS) Fox, Disney’s (DIS) ABC and Providence Equity Partners–have in mind, too?

UPDATE: The Los Angeles Times’ excellent Joe Flint notes that NBC has also revealed Hulu’s plans to launch a subscription service. And not surprisingly, it has blacked out that stuff, too. (Luckily, you can read about the broad strokes here).

Bleacher Report is a two-year old company roughly similar to the better-known SB Nation. The start-up employs lots of writers and stringers to produce lots of local content, claiming it is now churning out more than 500 stories a day.

The company is trying to make money by selling ads on its core site, which Quantcast says draws eight million monthly uniques. And it’s doing syndication deals with the likes of USAToday.com and some of Hearst’s newspapers; last I heard, it was also trying to get a deal with Tribune’s Los Angeles Times.

Bleacher Report has raised $8 million in two rounds; investments include Series A financing completed in February 2008 from Hillsven Capital, Gordon Crawford, SoftTech VC and, sort-of oddly, Vimeo founder Jakob Lodwick.

1. Print editions of newspapers are going, going, gone.
2. TV may not be going anywhere. But it will get a lot better when we can use the Web to find our favorite shows.

And here’s the Los Angeles Times’ retort: “TV Times,” a new 44-page TV guide insert that will be bundled with the paper’s Sunday edition.

Here’s what you get: “A 24-hour daily grid listings spanning morning, afternoon, primetime and late-night programming, four pages of alphabetized TV/cable/satellite movie listings, a full-page cover story, a TV-related crossword puzzle, episode highlights and synopses, and a dedicated sports programming page.”

In a Hulu/GoogleTV/iTunes/BitTorrent/Clicker/TV Everywhere/Etc., etc., etc. age, why would you possibly want this? Because you don’t use any of the aforementioned services. The LAT, owned by bankrupt Tribune Co., doesn’t spell this out, but that’s clearly the thrust here: Anyone who still reads our print edition probably doesn’t spend much time online. Let’s see if they’ll pay up for more paper.

And the Times does expect people to pay, by the way. The LAT is charging its subscribers an extra $3 a month for this.

What’s the future of the media business? Demand Media, the Google-savvy “content farm” that generates thousands of computer-assigned, low-cost Web items a day? Or ProPublica, a nonprofit that produces deep-dive investigative pieces and publishes them on its own site and in the pages of high-profile partners?

Good guess: Some of both. But let’s allow both parties to make their own case.

Brief background: Demand Media is Richard Rosenblatt’s follow-up to MySpace, which he sold to News Corp. (NWS); Paul Steiger founded ProPublica after a long career at The Wall Street Journal.

Below is the full video of the interview, followed by the liveblog:

Liveblog

9:41 am: Kara asks Paul Steiger to explain what he’s up to.

Steiger: Stories are aimed at abuse of power and empowering people to make change. I started there because when I was leaving the Journal in 2007, the traditional news business was collapsing. We had $10 million in funding and that wasn’t something I could turn down in that environment. I didn’t have time to be worried–I had to leave the Journal because of mandatory retirement age, and my wife said I couldn’t wear sweatpants during the weekday.

9:44 am: Kara to Rosenblatt–Please explain the controversy regarding Demand.

[WARNING: Rosenblatt speaks very quickly. It's unlikely that I'll be able to get more than impressionistic stabs at what he's saying.]

“We only write content that people want….We’re not journalists, all right? The only people that call us journalists are journalists.” That said, what we do is “more like service journalism….There’s no piece of content made that we think is good” because we only make content that people tell us they think is good.

9:46 am: Rosenblatt–We do no marketing. All traffic comes from organic search.

I don’t know why people call this “dreck.” When you do something 6,000 times a day, it always looks like it’s of low-quality. We’re okay with that; we’re continually trying to prove to people that we’re doing good stuff.

We have a deal with USA Today and others that we’ll be announcing.

9:47 am: Kara to Steiger–What do you think of all this?

Steiger: I see this as a reordering of the environment that we’re all going to have to live in. You [Demand] make stuff people want; you control costs, and it’s working. Another model is the Politico model, with a combination of tightly controlled print plus a big Web site. We do the most expensive, the most important journalism for democracy.

Kara: Example?

Steiger: A story we did with the Los Angeles Times about nurses getting bogus licenses. A story about police in New Orleans killing people. There are five or six things like that in the past year where we can point to changes that have taken place because of our stories. These things can cost tens of thousands or hundreds of thousands to produce.

In the old days, that could be a loss leader for for-profit newspapers. Can’t do that anymore, so we need philanthropy. “Silicon Valley, come on in!”

9:50 am: Kara to Rosenblatt–Will you do “Top 10 nurses that beat people up”?

Rosenblatt: No

Kara: Wait a minute! People may want it!

Rosenblatt: I think journalism is important, and the problem is trying to pay for it. We can help publications like USA Today, where we generate content and revenue for them, and they can take that money to fund other reporting. We’re not going to save journalism, but we can help it.

Kara to Rosenblatt: You employ a lot of journalists.

Rosenblatt: Not journalists.

Kara: Former journalists?

Rosenblatt: They may have been former journalists, and they may do journalism somewhere else. We call them freelancers, content creators.

9:53 am: Kara asks Rosenblatt to explain editing/oversight.

Rosenblatt: Eleven people touch this stuff before it gets published, etc. Anyway, let’s say we do 7,000 pieces of content a day. That’s 77,000 individual touches per day, with 10,000 freelancers around the Web. That’s amazing. That’s what the Web is made for.

9:54 am: Kara–How do they get paid?

Rosenblatt: They can get paid by piece or by revenue-share. But most of them prefer to get paid by content, because it’s guaranteed.

9:55 am: Kara–at The Wall Street Journal, we had people who worked for months on a single story. Is that done?

Steiger: The Journal, the New York Times and Washington Post are still vertically integrated and have powerful enough brands and talent that I think they can make it into the next generation.

Kara: Two of those are in dicey shape.

Steiger: Remember that there are two things going on right now. There is a secular shift, with the business model being destroyed. But there’s also a recession. So as that eases, we’ll have a better sense of who can survive.

9:58 am: Steiger–I’d love to go back to 10 years ago, or longer, to the golden age of journalism. But not even Silicon Valley can produce a time machine.

Kara: So do you think even the big newspapers that survive will switch to audience-driven content creation? That’s not what journalism is about.

Steiger: No matter what you’re doing, you’re still making stuff with an idea of what the people who are reading you want. It’s a broader way of thinking about it than Demand, but there’s a common thread.

9:59 am: Kara to Rosenblatt–Where is your actual business? Is it domains?

Rosenblatt: We have two main businesses: Registrar/domains. It’s steady, recurring revenue, and it generates a lot of data. Almost 10 percent of the Web hits our servers via these domains. It’s an exciting source of data.

Then we have the media business. That’s 50 percent bigger, in revenue, than other business and growing fast.

Of that business, less than 10 percent is domain advertising business. Google (GOOG) and Yahoo (YHOO) stick ads on tenniselbow.com, etc. We think that’s a great business also.

Kara: Is your media business profitable?

Rosenblatt: Can’t talk about that.

Kara: Does that mean it’s not profitable?

Rosenblatt: Can’t talk about that.

Kara: But you’re going public, right?

Rosenblatt: Can’t talk about that.

10:03 am: Kara–you’re dependent on Google, right?

Rosenblatt: In the way that everyone is dependent on Google. Or that the iPhone is dependent on AT&T (T). But everyone searches on the Web. So some of our sites, like eHow, are getting traffic from Google. But others aren’t.

If Google changes their algorithm, we think about that. But we spend a lot of care on what we do, and we think there’s a move to quality long-tail content that Google values.

10:05 am: Kara to Rosenblatt–AOL is doing what you’re doing. Yahoo just bought Associated Content. It has more distribution than you do. What does that mean for you?

Rosenblatt: We love that AOL (AOL) and Yahoo are validating what we’re doing. “In a market this big, that’s in the first inning, there’s plenty of room for all of us.”

10:05 am: Kara to Steiger–How do you feel about the kind of journalism you do becoming nonprofit work? Does that depress you?

Steiger: “I’m the opposite of disheartened. I’m very excited.” Yes, the business is shrinking and people are losing jobs, and I don’t want to make light of that. But we’re attracting great people; we’ve won a Pulitzer Prize. The work will get done. The work is crucial to our society, and it needs philanthropic support. But so do orchestras and clinics and universities.

10:07 am: Kara–Is there a way to actually make money doing this?

Steiger: “Conceivably, but I can’t think of what it is.” If you’re focused entirely on this, “at this stage, you need philanthropic help.”

Kara to Rosenblatt: Can you think of how to do this?

Rosenblatt: You can hold a conference and charge people $5,000 a head. [Applause in conference room and in D8 cave.]

Q&A

For Rosenblatt: Why won’t you call your people “journalists”? Steve Jobs was full of venom for “bloggers,” too. Why not call people who write for money “journalists”?

Rosenblatt: If our writers want to call themselves journalists, great. But they’re not doing reporting from Afghanistan. We’re content creators, making things that people want.

Steiger: I just think that the labels get in the way.

Q: Who are those 11 people that touch Demand Media’s content? What do they do?

Rosenblatt: Some people are involved in “titling.” For SEO or social media purposes. Three people are involved in checking each title. Then people involved in each property select stories, depending on the voice. Then copy editors, copy chiefs, writers. We’re actually going to be adding more. We can make it so efficient, that we can add more roles, and everyone can keep making the same amount of money.

Q: What about rolling out content on the domains you run?

A: Not yet. Maybe in coming years. It’s not a focus right now. We do think the assets that you own and we own, we think those assets “have great optionality later” to put content on.

Q for Steiger: Do you share Steve Jobs’s distaste for bloggers?

Steiger: I sleep with a blogger! My wife blogs from 11 pm to 2 am. I’m an enthusiastic supporter of blogging. They bring a lot of audience to ProPublica’s Web site. I think what Steve was getting at is that there’s a danger of too many people commenting and not enough people finding out what’s going on. [I don't think that's entirely what Jobs was complaining about, btw.]

This content-creation session is now over.

A note about our coverage: This liveblog is not an official transcript of the conversation that occurred onstage. Rather, it is a compilation of quotes, paraphrased statements and ad-lib observations written and posted to the Web as quickly as possible. It is not intended as a transcript and should not be interpreted as one.

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]]> http://allthingsd.com/20100603/richard-rosenblatt-paul-steiger-session/feed/ 0 http://allthingsd.com/20100518/waiting-to-pay-for-hulu-wait-a-while-longer/ http://allthingsd.com/20100518/waiting-to-pay-for-hulu-wait-a-while-longer/#comments Tue, 18 May 2010 10:30:38 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19593

A public service announcement for those of you eager to start paying for Hulu: Be patient. You’re going to have to keep waiting.

Last month, the Los Angeles Times said Hulu was set to roll out a subscription service “as soon as May 24.” That’s next Monday. But people familiar with the company say there’s no way a Hulu Plus will be up and running by then.

When will the long-discussed premium service be ready? I don’t know. I’m still not entirely convinced that the joint venture–owned by News Corp.’s (NWS) Fox, Disney’s (DIS) ABC and GE’s (GE) NBC–has completely settled on terms of the plan, though I think they’ve agreed on the broad strokes: $10 a month for access to a deeper catalog of broadcast shows and to the service on devices like Apple’s (AAPL) iPad. (Regular Hulu, which is on a pace to generate $200 million in advertising this year, remains free).

And even if Hulu and all of its partners are seeing eye-to-eye–not a given–getting the rights from various programming partners to sell their shows could be a slog.

The upside: Your patience will be rewarded, Hulu subscribers of the future. One person familiar with the company’s plans tells me the new service will be “revolutionary.” Popular claim these days. Let’s see if it holds up.

Speaking of patience–a great Jimmy Kimmel bit about last week’s infuriating epsiode of “Lost”:

]]> http://allthingsd.com/20100518/waiting-to-pay-for-hulu-wait-a-while-longer/feed/ 0 http://allthingsd.com/20100514/the-long-weird-cops-robbers-tale-of-gizmodo-apple-and-the-4g-iphone/ http://allthingsd.com/20100514/the-long-weird-cops-robbers-tale-of-gizmodo-apple-and-the-4g-iphone/#comments Fri, 14 May 2010 20:43:48 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19497 Here’s the definitive tale, so far, of iPhonegate. It comes via the search warrant affidavit filed by the San Mateo cops, who were investigating Gizmodo’s purchase of a 4G iPhone prototype as a felony.

A lot of this stuff has been out in one form or another, but the narrative is pretty fascinating. If you plow through the document embedded at the bottom of the post, bear in mind that it’s a tale told by Matthew Broad, a detective in San  Mateo County Sheriff’s office. So it’s possible that other parts of the story, and/or different versions of the same story, may still end up coming to light.

Among the highlights:

• Apple knew that Brian Hogan, the 21-year-old who found the iPhone, had the thing because his roommate, Katherine Martinson, called and told the company he had it. Her reasoning, according to Apple (AAPL) security chief Rick Orloff: “Suspect Hogan connected the stolen iPhone to her computer and she believed that Apple would eventually trace the iPhone back to her via IP addresses. Therefore she contacted Apple in order to absolve herself of criminal responsibility.”
• Martinson told police that Hogan had offered the phone to Gizmodo, AOL’s (AOL) Engadget.com and PC World. While Gizmodo owner Gawker Media had previously said it paid $5,000 for access to the phone, the affidavit is a bit fuzzier. Martinson says Hogan told her Gizmodo offered $10,000 for the gadget and later said he’d received $5,000 from Gizmodo and a total of $8,500. But she wasn’t clear where the other $3,500 came from. “Martinson said Hogan also told her that he will receive a cash bonus from Gizmodo.com in July if and when Apple makes an official product announcement regarding the new iPhone.”
• There’s a long cops-and-robbers interlude where police show up at Hogan’s house, but he takes off and is eventually tracked down at his father’s place. In the end, Hogan and Thomas Warner, another roommate, help the cops retrieve a computer, a flash drive and other equipment they’d removed from their place “in order to ‘protect’” Hogan.
• Apple CEO Steve Jobs did indeed reach out to Gizmodo to ask for the phone back. Here’s editor Brian Lam’s response to Jobs, via email (click to enlarge):

And here’s the entire affidavit, which we’re able to see because a group of media companies, including CNET, Bloomberg, Wired and the Los Angeles Times, petitioned a California judge to unseal it. Gawker Media, via COO Gaby Darbyshire, declined to comment on the affidavit and its contents.

UPDATE: Here’s Gawker’s position, via an email Darbyshire sent Saturday afternoon:

First of all, the warrant and supporting affidavit do not appear to acknowledge the sanctity of the newsroom or even address the serious issues at stake.

Second, the idea that it is a felony trade secret theft to photograph an item that was admittedly left in a bar is ridiculous.

Finally, Gizmodo from the start was attempting to investigate if this item was a genuine prototype of a product belonging to Apple; we believed that confirmation of its authenticity and ownership quite reasonably needed to be made in writing – and once we obtained that, the item was returned immediately.

EFF has a detailed piece on the warrant issue here.

Gizmodo-iPhoneOrder

]]> http://allthingsd.com/20100514/the-long-weird-cops-robbers-tale-of-gizmodo-apple-and-the-4g-iphone/feed/ 0 http://allthingsd.com/20100504/gamehouse-fusion-one-leaderboard-to-rule-them-all/ http://allthingsd.com/20100504/gamehouse-fusion-one-leaderboard-to-rule-them-all/#comments Tue, 04 May 2010 23:01:56 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=39818

When RealNetworks finally spins off its games business as a separate company it will be known as GameHouse, not RealGames, and its business will be social gaming.

At the Web 2.0 Expo in San Francisco today, Real (RNWK) announced GameHouse Fusion, a suite of tools intended to make any game social across any device or platform.

With GameHouse, developers can easily build social features like friends lists, leaderboards and virtual goods into games in such a way that they’re consistent and persistent across all the devices and platforms on which they might be used. So, for example, a user’s high score on a game might be updated across multiple social networks, not just the one on which it was achieved.

Essentially, what GameHouse is attempting to do is federate social identity. Quite a task, but one with significant rewards if the company pulls it off.

“People are looking for connected experiences,” GameHouse President John Barbour told the Los Angeles Times. “By connecting devices, you connect people. The future is about truly interconnected gameplay, where I can play with my friends across multiple systems whether it’s PC, mobile, iPad or social network.”

]]> http://allthingsd.com/20100504/gamehouse-fusion-one-leaderboard-to-rule-them-all/feed/ 0 http://allthingsd.com/20100422/why-10-a-month-for-hulu-is-too-much-and-too-little/ http://allthingsd.com/20100422/why-10-a-month-for-hulu-is-too-much-and-too-little/#comments Thu, 22 Apr 2010 10:00:45 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=18722 Is ten bucks a month too much to pay for “Hulu Plus”? Or too little?

Perhaps both.

The Web video site is getting ready to roll out its much discussed subscription offering of $9.95 a month, the Los Angeles Times reports. That jibes with chatter I heard earlier this week, though I’m not yet convinced this is a done deal.

But for argument’s sake, let’s say the report is correct, and the joint venture between GE’s (GE) NBC, Disney’s (DIS) ABC and News Corp.’s (NWS) Fox is about to test a premium plan. If they are doing so at $9.95 a month, it’s possible they’ve ended up with a price that will make both consumers and network TV guys unhappy.

How’s that?

$9.95 a month–$120 a year–is an awful lot to pay for free TV. Industry sources expect the initial plans for “Hulu Plus” to focus on access to a deep catalog from its broadcast TV owners. So instead of just getting the most recent five episodes of, say, “Family Guy”–those will still be available for free on regular Hulu–you’ll get an entire season or more.

If you’re really, really into a couple shows that run on ABC, NBC or Fox, then perhaps a Hulu subscription makes more sense than buying the shows on DVD or downloading them from iTunes.

But if you’re really into “Mad Men” on AMC or “Justified” on FX (which is great), or anything else on cable, Hulu Plus may not do much for you. And at the same time…

$9.95 a month doesn’t go that far once Hulu pays the bills. TV executives expect that Hulu will need to hand over something like $1 to $1.50 per subscriber to each of its network owners. Because that’s the same price the broadcast networks are trying to extract from cable TV operators in “retransmission” fights (see: ABC vs. Cablevision). And that money is worth a whole lot more to them than Hulu subscriptions. Which means the TV guys can’t undercut themselves on the Web.

So Hulu will need to pay out something like $3 to $5.50 off the top for every $10 it brings in. And then it has to shoulder the streaming costs, billing costs, customer service costs, etc.–figure a couple bucks a month more for that stuff. That gets you something like a 30 percent gross margin, which is nothing to brag about.

And what happens if Hulu wants to expand the service and add shows from other providers? It will either have to cut into its thin margin to pay for the programming or raise its rate above $10 a month. Which is already a lot to pay for free TV.

There are a few things Hulu and its owners can do to make Hulu Plus more attractive. Offer the service on more platforms, for one, like Apple’s iPad. And tinker with “windows,” so that Hulu subscribers get to see stuff before the freeloaders.

But moving windows is a good way to confuse/piss off most users, who don’t have any interest in digital/analog TV economics and just want to watch shows.

Also, access to Hulu on the iPad seems a bit less valuable given that Disney’s ABC, one of Hulu’s owners, is already giving away free access to its shows via a very popular app. Industry sources says Hulu CEO Jason Kilar tried desperately to get ABC not to introduce its free app for this very reason.

But while Disney is a minority owner in Hulu, Apple (AAPL) CEO Steve Jobs is the largest individual shareholder in Disney. If you want to connect the dots on that one, you’ll be doing the same thing everyone else in TV Land is doing.

]]> http://allthingsd.com/20100422/why-10-a-month-for-hulu-is-too-much-and-too-little/feed/ 0 http://allthingsd.com/20100420/tumblr-raises-another-5-million-from-spark-and-union-square-now-it-wants-your-money/ http://allthingsd.com/20100420/tumblr-raises-another-5-million-from-spark-and-union-square-now-it-wants-your-money/#comments Tue, 20 Apr 2010 10:00:16 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=18688

Who wants to bet on a Web company with lots of users but very little revenue? The same people who bet on it before. Spark Capital and Union Square Ventures have poured another $5 million into Tumblr, which lets people quickly and easily set up lightweight blogs.

Three-year-old Tumblr doesn’t charge its 4.5 million users for the service. It doesn’t sell advertising on the page views they generate. And it is only now beginning to generate “meaningful” revenue, says founder David Karp. (That’s Karp, flanked by two employees, engaged in some kind of new-fangled xtreme sport, on the cover of this week’s New York Magazine)

But this hasn’t dissuaded Spark and Union Square, the sole investors in the company’s C round, as well as its B round in 2008.* The company has raised $10.2 million to date.

So now what?

Karp, who turns 24 this summer, says his company has “carved out a real and substantial niche” in the last year, and he brandishes numbers to bolster his case. The service, for instance, is now generating one billion page views a month. Here’s a chart! (Click to enlarge.)

But until recently, Tumblr’s growing popularity hasn’t done much beyond racking up big infrastructure bills. Now Karp says the company is changing this by rolling out a series of paid services.

The Los Angeles Times has a nice summary of new services, and Karp says there are a “dozen more in the pipeline.” But the short version is that these are primarily bells and whistles–like digital “stickers” you buy for your friends at a buck a pop–that passionate Tumblr users may like, but don’t need.

This is a switch from the company’s earlier plan to bundle lots of must-have features into a “Tumblr Plus” subscription service aimed at its most passionate users.

The new strategy is a little more seat-of-the pants, but the bet is that it may be easier to coax money out of people a couple dollars at a time.

Not coincidentally, this is the same model that’s working out very well for social gaming companies like Zynga, which is also funded by Union Square Ventures (and to a lesser degree OMGPOP, which is backed by Spark).

Zynga is reportedly profitable, and many have it pegged for an IPO in the near future. I don’t see that in Tumblr’s cards, but if Karp and crew were interested, I can see them attracting interest from the likes of Google (GOOG) and Yahoo (YHOO) sooner than later.

Maybe sooner in Yahoo’s case, if it can’t snap up another company whose CEO also graces New York Magazine’s cover this week.

*“Inside rounds” like these are supposed to be no-nos in the VC world because existing investors traditionally want to find new money to validate their wagers. For the counterargument, consult Tumblr investor Bijan Sabet’s blog (hosted by Tumblr, of course).

]]> http://allthingsd.com/20100420/tumblr-raises-another-5-million-from-spark-and-union-square-now-it-wants-your-money/feed/ 0 http://allthingsd.com/20100329/china-drops-googles-call/ http://allthingsd.com/20100329/china-drops-googles-call/#comments Mon, 29 Mar 2010 14:38:46 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=17814 Another step up in the escalating battle between Google and China: The search giant reports that its mobile service is being disrupted in the People’s Republic.

Google, via a page dedicated to “Mainland China service availability,” reports that mobile services are “partially blocked” (see image below; click to enlarge). As the Los Angeles Times notes, this is the first time Google (GOOG) has changed the status of any of its services since it posted the page a week ago.

Taken at face value, the update means that China has moved beyond threats and selective search-query blocks and is now disrupting a key part of Google’s remaining business in that country. Which is pretty much what it has been promising to do over the past few weeks in response to Google’s decision to close down its Chinese search engine.

]]> http://allthingsd.com/20100329/china-drops-googles-call/feed/ 0 http://allthingsd.com/20100325/bing-gets-a-spring-revamp/ http://allthingsd.com/20100325/bing-gets-a-spring-revamp/#comments Thu, 25 Mar 2010 18:00:19 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=37348

]]> http://allthingsd.com/20100325/bing-gets-a-spring-revamp/feed/ 0 http://allthingsd.com/20100324/china-unicom-dumps-google-from-android-phones/ http://allthingsd.com/20100324/china-unicom-dumps-google-from-android-phones/#comments Wed, 24 Mar 2010 22:21:29 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=37256

Scratch China Unicom from the list of Google’s Chinese search partners. The Financial Times reports that the carrier, China’s second largest, dumped Google’s search service from the Android smartphones it’s adding to its smartphone lineup.

An obvious and, I suppose, inevitable response to Google’s recent defiance of the Chinese government. Said Unicom’s president Lu Yimin: “We are willing to work with any company that abides by Chinese law…we don’t have any co-operation with Google currently.”

Bad news for Google (GOOG), which until recently seemed poised to do quite well in the world’s largest cellphone market. As the Los Angeles Times notes, “although it is a distant second on computer searches, Google is nearly tied for first with China’s Baidu Inc. for market share in China’s nascent mobile-search sector.”

Evidently, not for long. I imagine we’ll be hearing of a similar move by China Mobile in the near future.

]]> http://allthingsd.com/20100324/china-unicom-dumps-google-from-android-phones/feed/ 0