Hulu’s owners, including Walt Disney Co., News Corp., and Comcast Corp., are considering various strategic options for the site including a sale. Other firms that have bid or expressed interest in Hulu include cable operator Time Warner Cable Inc., Guggenheim Partners, Yahoo Inc. and former News Corp. president Peter Chernin’s investment group.

Read the rest of this post on the original site »

Look out Facebook! Hours spent participating per member dropping seriously. First really bad sign as seen by crappy MySpace years ago.

– Rupert Murdoch, still steamed about that whole MySpace thing, tweets a warning to Facebook

That’s the gist of a new U.S. Department of Justice filing against Apple in the agency’s upcoming lawsuit against the company. According to the DOJ, Apple was the “ringmaster” of a plan that raised mainstream e-book pricing well above the $9.99 price point Amazon had established by shifting the industry from a wholesale model, where retailers set prices, to an agency model where publishers set prices. Among the agency’s evidence supporting that allegation:

• An e-mail from Apple co-founder Steve Jobs to James Murdoch of News Corp. — parent company of HarperCollins — that reads in part, “Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”
• A comment Jobs made to biographer Walter Isaacson, explaining that Apple “told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.’”

According to the DOJ, those statements are clear evidence of collusion. “Apple knew that the plan it was proposing involved a ‘dramatic business change’ for publisher defendants,” the agency argued in its filing. “Accordingly, Apple kept each publisher defendant aware that it was orchestrating and coordinating a common approach for all of them.”

Apple is now the lone holdout in the DOJ’s lawsuit, originally brought against the company and five major publishing houses last April. HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster have all since settled. But Apple, the alleged “ringmaster,” continues to dig its heels in.

“Apple did not conspire to fix eBook pricing,” Apple spokesman Tom Neumayr said in a statement. “We helped transform the eBook market with the introduction of the iBookstore in 2010 bringing consumers an expanded selection of eBooks and delivering innovative new features. The market has been thriving and innovating since Apple’s entry and we look forward to going to trial to defend ourselves.”

Below, the DOJ’s latest filing:

apple7 –

Now the New Yorker magazine says it can help journalists, and their sources, cover their tracks. It is rolling out an electronic tip box it says will give leakers and tipsters the ability to cloak their identity when they reach out to the magazine.

And it’s releasing the software that built the box, created by the late Web activist Aaron Swartz, via an open-source license. Which means that it expects and encourages other news organizations to build their own versions.

You can find detailed information about the New Yorker’s Strongbox here, along with posts from Joshua Rothman, the magazine’s archive editor, and Kevin Poulsen, the investigations editor at Wired, which, like the New Yorker, is published by Conde Nast. Poulsen’s post, which explains how he and Swartz collaborated to create Strongbox, makes for particularly good reading.

Strongbox isn’t the first attempt to create a secure tipbox in recent years. In 2011, following WikiLeaks’ rise to prominence, The Wall Street Journal launched SafeHouse, a similar project. But the security experts quickly pointed out flaws in the Journal’s technology, and if the paper has gotten much use out of it since then, they’re not saying (the Journal, like this website, is owned by News Corp.).

I have zero ability to judge the relative security of the New Yorker’s box, but I’m sure that Swartz’s connection to the project will reassure lots of people. (For the record, both the Journal and the New Yorker’s boxes use Tor, an anonymizing Web tool/network.)

I can try to explain the basic principle behind the box, though: It’s supposed to allow anyone to submit a letter, document or any thing else, while keeping their identity secret. If a New Yorker staffer wants to try to contact the tipster, they can reach out through an electronic version of a dead drop, which gives the original tipster the ability to re-contact the magazine.

The New Yorker had planned on introducing Strongbox last month, but delayed it for technical tweaks. But the last week’s revelations about the federal government’s surveillance of the Associated Press helps illustrate the need for the tech, said Poulsen.

“We see governments around the world putting a lot of resources into tracking journalistic sources,” he said. “So far, technology has been an ally not of journalists but the government.”

Senator John McCain is going to try, via legislation he is set to introduce soon, perhaps today. McCain’s office has given a sneak preview to some TV industry officials, and while reports about what’s actually in it are still a bit hazy, here are the broad strokes:

• McCain wants to force pay TV operators to break up the programming bundles, by offering channels in smaller groups or on an individual basis.
• He wants to penalize programmers who move their most valuable shows from broadcast networks, which are theoretically free, to paid cable networks.
• He also wants to change the FCC’s rules about sports “blackouts,” which currently prohibit cable channels from carrying NFL games if the local broadcasters don’t air them because the tickets to the games aren’t sold out.

Before you go any further, note that McCain has pushed for similar changes before, without success. And while the Arizona Republican used to be on the Senate Commerce Committee, which oversees the FCC and has a lot of impact on the U.S. media business, he isn’t anymore. So any discussion of what McCain’s bill could mean for TV-land might be completely moot.

That said!

If McCain got his way, and truly forced the TV business to unbundle, you’d see a dramatic shift in the way the industry works. And while you can’t exactly predict how that shift would play out, you can make a couple guesses: Prices for individual networks would increase,  and programming costs would come down.

For instance: Pay TV providers currently pay ESPN, the king of the cable networks, more than $5 per month for each subscriber that gets the service. But, by some accounts, only 25 percent of pay TV customers actually watch ESPN.

So, in an a la carte world, if 75 percent of ESPN’s subscribers melted away, it would need to charge more than $20 per month (wholesale) just to keep its revenue steady. Of course, ESPN is certain to turn around and tell the sports leagues it does business with that it can no longer pay billions to show their games — or at least not as many billions. Imagine that same scenario playing out with all kinds of programming.

As for the broadcast-to-cable component of McCain’s bill, which everyone is describing as “pro Aereo”: Hard to see how McCain would be able to describe exactly which programs, or how much programming, couldn’t move from broadcast to cable.

And as we’ve pointed out before, that’s already been happening for a while, particularly with big-time sports.

So would McCain require Disney to move “Monday Night Football” back to ABC from ESPN? And, in any case, note that threats about the networks moving all their shows from broadcast to cable if Aereo wins all its court battles are just that — threats, which are hard to take seriously. Even News Corp. COO Chase Carey, who first floated that balloon last month, tried to deflate it yesterday during News Corp.’s earnings call. (News Corp. also owns this website.)

According to numerous sources close to the situation, Yahoo CEO Marissa Mayer recently met with top execs at Hulu, the premium video service whose big media company owners have been considering selling it for some months.

Sources said Yahoo is “in the process,” although the Silicon Valley Internet giant has not made any kind of formal bid. Other players whom sources said are considering purchasing all or parts of Hulu include: Former News Corp. COO Peter Chernin, who now has a successful and well-funded multimedia and investment company called the Chernin Group; Guggenheim Partners digital arm, which is led by former Yahoo interim CEO Ross Levinsohn; and Amazon.

Sources said Mayer also had an extensive getting-to-know-you meeting, which was apparently not held at Hulu’s offices in Santa Monica, Calif., along with COO Henrique De Castro. The discussion is taking place in the wake of Yahoo’s failed bid — largely engineered by De Castro — to purchase a majority stake in France Télécom’s Dailymotion video service, after a top French government official said Yahoo could not own 75 percent of the company.

Had the deal — which was reportedly valued at $300 million — gone through, it would have been the most significant by Mayer since she took over at the company last July. Thus far, she has limited her purchases to small mobile startup.

While the meetings with Hulu are only preliminary, Yahoo has been to this video rodeo before, having seriously considering buying Hulu when it was previously being shopped by its owners, News Corp., Disney and Comcast. (News Corp. also owns this site.)

Of course, if Yahoo’s interest becomes more serious, Mayer will have to make important visits to top execs at those media giants, since they control the rights to critical content, and thus Hulu’s value.

As Peter Kafka noted in a previous post about Hulu’s possible sale, “much hinges on the licensing rights News Corp., Disney and Comcast would provide for the money-losing site, as well as what happens to the $300 million debt its owners have taken on in the last year.”

Without those rights, Hulu by itself is a very pretty Web site and video platform, but not worth the billions it would be with very long-term television rights, content that attracts users. Currently, sources said its media owners are offering two to three years of rights, with a lot of flexibility over removing content from the site, which is not quite as attractive a deal (to say the least).

But video is a key component of Yahoo’s strategy going forward. Along with mobile efforts, Mayer has explicitly told investors that video was a key to company under her tenure.

Coincidentally, today in an onstage interview at a Wired conference in New York, Mayer broadly addressed the video issue when asked a question about the topic, noting it was important across all of Yahoo’s properties.

“I think video is really important … video is something that we’re all innately designed and born to experience, everyone is born being able to watch and to hear,” she said. “Video is just this amazing format.”

Mayer would know that well, having been at Google when the search giant bought YouTube, ironically snatching it at the last minute from a competing bid by Yahoo, which was then led by Terry Semel. Since then, YouTube has become the most important and powerful player in the space by far.

Yahoo, despite being one of the largest video players on the Web, has mostly been a lackluster competitor in the arena, pinging over the years from creating original content to doing branded deals with media companies, but never establishing a major beachhead with consumers as Hulu did from scratch.

Short of a full acquisition, there may be a way for Yahoo to partner and invest in Hulu, instead of buying it outright that works for all sides — owners get a new owner to foot part of the bill and also increase distribution, and Yahoo can claim that it’s providing users with exponentially more content that would help Yahoo’s long-declining engagement problem.

Sources said News Corp. and Disney have mulled scenarios where one or both companies hang on to the site, while Comcast has no control over Hulu’s fate, having given up its management rights to the site as a concession to federal regulators.

But the strength of the Hulu brand is clear and it has had some success in building a more significant business. While a lot of its video offerings are free, about four million people are paying for a Hulu Plus subscription.

Still, Hulu’s strength might be lagging, especially given after talented founding leader Jason Kilar recently left. Last year, Hulu was a top 10 video site, according to comScore. No longer — in a report in March, it had dropped out of the top 10.

While this likely has more to do with methodology than real decline in Hulu ratings, it does show that while it’s the biggest thing Yahoo could buy or invest in, Yahoo itself has plenty of video views, many more than Hulu.

The question for Mayer then is how much of Yahoo’s multi-billon-dollar cash kitty she wants to bet on a big video play. She might also be considering buying several smaller ones, said sources, with Yahoo having also looked at some smaller video sites, including Blip and Grab Media.

A spokeswoman for Hulu declined to comment and Yahoo PR has not responded to a query for comment (if ever).

So how about Hulu Plus, the subscription service that runs ads in the middle of its TV reruns? Turns out it is doing just fine: Hulu says its paid service now has four million subscribers paying $8 a month.

That’s not nearly as much Netflix, which boast some 30 million subscribers for its ad-free service (also $8 a month). But that seems awfully respectable to me, considering that Hulu Plus has been around (in one form or another) for less than three years.

Maybe even impressive, since much of what Hulu Plus offers are TV shows you can see for free on broadcast TV, or even on “regular” Hulu.com. The main selling point for Hulu Plus, I think, is that you can watch the service on a variety of screens, including phones, tablets and your actual TV, via devices like Apple TV.

The announcement comes as Hulu puts on a show for advertisers in New York, part of the week-long “newfront” presentations the big video websites are hosting. (Yesterday: Yahoo! Tomorrow: YouTube!)

While Hulu is still best known as the place to watch last night’s TV (or in some cases, last week’s TV), it is interested in promoting the stuff it has that you can’t see on TV.

Like Netflix and Amazon, it is investing in its own original programming; unlike Netflix and Amazon, its efforts have gotten much less attention, a fact that steams Hulu’s management team. So if you want to help them out, go ahead and look at the preview reel for “The Awesomes,” an “animated show for adults,” co-created by Seth Meyers of “Saturday Night Live”; it seems to be the new show Hulu is most excited about.

The good news for Andy Forsell, Hulu’s acting CEO, is that advertisers are already receptive to Hulu’s pitches, both for the reruns it airs and the new stuff it is showing. It looks like TV and Hulu is selling it like TV, and many ad guys like that a lot, especially compared to Google’s more … Googley approach with YouTube.

The bad news for Forsell is that he’s acting CEO, because Hulu’s corporate future is completely unsettled. It’s entirely possible, and probably likely, that the site, currently owned by News Corp.,* Disney and Comcast, will have a different ownership structure by the end of the year, and may have a different agenda, as well.

I’m guessing that doesn’t come up during this morning’s presentation. What I don’t know is whether that matters to advertisers or viewers.

*News Corp. also owns this website.

1. Apple’s Ouster of AppGratis Is Just the Start of an App Store Crackdown
2. Confirmed: Apple Kicks AppGratis Out of the Store for Being Too Pushy
3. Yep, LinkedIn Acquires Newsreader Startup Pulse for $90 Million
4. WhatsApp: We’re Not Selling to Google
5. Twitter’s New Music App Launches Friday
6. BlackBerry Tops iPhone and Android … In a “Don’t Want” Poll
7. Salesforce Just Made Another Quiet Acquisition

[note: this article is from February, but resurfaced this week]

8. PC Sales Show Biggest Q1 Decline Ever
9. California Court: Even Checking Maps on Phone While Driving Not Okay
10. News Corp. Threatens to Pull Fox off the Airwaves if Aereo Wins

For more of the week in review, you should follow us on Facebook and Twitter.

That’s very cool, and that’s a reason to cheer on Google as it starts to expand its Fiber project outside of Kansas City — if Google really does prompt other pipe guys to improve their product to compete, you can’t ask for more.

But again, a reminder: When it comes to the TV part of Fiber, Google is acting just like any other pay TV company — you give it a bunch of money, and it gives you a bunch of channels, no matter which ones you actually watch.

That’s the bundle concept that ties together the entire TV Industrial Complex, and while lots of people are always talking about breaking the bundle, no one’s done it yet. And Google doesn’t seem interested in trying to do it here.

Google is annoyingly vague about the TV channels it will have in Austin (and any other details about its offering). But it’s reasonable to assume that it’s going to look a lot* like the ones it offers in Kansas City.

At least some of the programmers it works with in Kansas City have deals that will allow Google to roll over the same offering into new territories, industry executives say. (See, Google? Not that hard.)

And there’s no reason for the channels not to support the move. Google gives the cable programmers what they want, which means deals to take all of their networks, at rates that are as least as high as the ones they negotiated with AT&T and Verizon, the last two big guys to enter the pay TV world.

Note that when Google announced its Kansas City rollout, it didn’t have programming deals with all of the big programmers nailed down. But since then, News Corp., Disney and Time Warner’s Turner channels have all signed on; the only real glaring holes are AMC’s networks, including AMC and IFC, and Time Warner’s HBO premium channel.

*One Austin channel Google is bragging about today that should be available is ESPN’s Longhorn Network, a must-have for University of Texas football fans. (Correction: An earlier version of this story incorrectly stated that Longhorn was not available via Google Fiber in Kansas City.)

Pres Panayotov / Shutterstock.com

Is News Corp. really going to yank Fox off the airwaves in response to Aereo?

Snap consensus judgement from the various corners of the TV Industrial Complex: No way. At least, not anytime soon.

People I’ve talked to who work in TVland think that News Corp. COO Chase Carey’s comments are just that — comments, not a plan.

It’s possible that over time, if broadcasters do think that Aereo or Aereo-like technology really threatens the fees they get from pay TV operators for their over-the-air programming, they’ll move more of it to cable networks. And, in fact, programmers have already started moving lots of high-profile sporting events from free TV to pay TV.

Near-term, however, people seem to think that both practical and legal restrictions — for instance, deals that Fox and CBS have with the NFL for football broadcast rights — would prevent this from happening. More important: There isn’t any reason to do so right now, since only a handful of people are actually using Aereo to get broadcast TV for free.

All that said, Wall Street seems to like the idea.

Earlier this year, Bernstein analyst Todd Juenger gamed out a scenario where all four broadcasters moved from over-the-air to pay networks, and concluded that it wouldn’t be a terrible idea, at least financially. By Juenger’s thinking, the lost “retransmission fees” and advertising dollars the broadcasters would lose from over-the-air programming would be replaced by even higher “affiliate fees” and advertising dollars they could get on cable.

And Juenger thinks that move might benefit pay TV distributors, too: “There is enough logic here to suggest it wouldn’t be completely crazy for a cable operator to make a pre-emptive offer to broadcast networks in a given market to convert to a cable model.”

In any case, for whatever reason, TV investors are cheering Carey on. Look what happened to shares at Fox owner News Corp. (which also owns this website), ABC owner Disney and CBS this afternoon after 1:30 pm ET, when Carey made his remarks at an industry conference:

The outlier here is NBC owner Comcast, whose shares also moved up after Carey’s remarks, then down again. Perhaps some investors are less comfortable with what this means for America’s biggest pay TV operator.

(Image courtesy of Pres Panayotov / Shutterstock.com)

Multiple sources say Chernin, via his Chernin Group holding company, has made a formal bid for the site, which is owned by Disney, Comcast and News Corp. (News Corp. also owns this site).

Reuters, which first reported Chernin’s interest in Hulu, says he offered $500 million for the site; two years ago, when Hulu’s owners put the site on the block, they were looking for $2 billion.

A source familiar with the bid says Reuters’ $500 million number is low. In any case, it’s likely to be the starting point for a negotiation, which would hinge on the licensing rights News Corp., Disney and Comcast would provide for the money-losing site, as well as what happens to the $300 million debt its owners have taken on in the last year. (UPDATE: Here’s a bit more clarity: Someone else familiar with the bid suggests that Chernin’s initial bid is for Hulu, along with a limited set of rights to programming from its three owners, but says that the bid could increase if those rights increased. That makes more sense.)

That is, if its owners decide to sell it. Though Hulu’s owners are talking to other would-be buyers, including Ross Levinsohn, the former News Corp. executive who once managed the site, News Corp. and Disney are still discussing scenarios where one or both companies hang on to the site (co-owner Comcast gave up its management rights to the site as a concession to federal regulators a few years ago).

If Chernin ended up with Hulu, it’d be an excellent full-circle story, if nothing else. During his News Corp. tenure, Chernin was one of the site’s primary architects and boosters; many people think that his departure from News Corp. was a huge blow for former Hulu CEO Jason Kilar.

Also interesting: Chernin has a big slug of funding from Providence Equity Partners, Hulu’s initial investor, which sold its stake in Hulu last year. If Chernin ended up buying the site, Providence would essentially end up as a Hulu backer again.

Chernin has also mused in the past about what it would take to create an online competitor to HBO, starting from scratch. Perhaps a well-known video property could help him jump start those plans.

Here’s a highlight reel of a chat I had with Chernin at our Asia:D conference in Hong Kong in 2011; we spent some of that time talking about Hulu’s past and then-present.

]]> http://allthingsd.com/20130405/peter-chernin-wants-hulu-too/feed/ 0 http://allthingsd.com/20130404/chernin-comcast-investing-in-youtube-tools-startup-fullscreen/ http://allthingsd.com/20130404/chernin-comcast-investing-in-youtube-tools-startup-fullscreen/#comments Thu, 04 Apr 2013 22:16:22 +0000 Peter Kafka http://allthingsd.com/?p=309441
Old media companies keep lining up to invest in YouTube. Here’s the latest: The Chernin Group and Comcast are putting money into Fullscreen, a startup that’s supposed to help video makers manage their presence on the world’s largest video site.

Sources say the two companies are part of a $30 million round that gives Los Angeles-based Fullscreen a pre-money valuation of $110 million.

I don’t know if any of the money is coming from secondary sales; I’m told the deal hasn’t closed yet but is supposed to soon.

No comment from Chernin Group, led by former News Corp. COO Peter Chernin, or Comcast, which is investing in the round via its Comcast Ventures arm. I haven’t heard back from Fullscreen CEO George Strompolos.

The round follows other recent Big/Old Media bets on YouTube startups, including Time Warner’s investment in Maker Studios and Bertelsmann’s investment in fashion network StyleHaul.

Like those two companies, Fullscreen generates revenue by representing a pool of semi-pro video makers on YouTube. Unlike those “multi channel networks,” though, it also has a software service it sells to content owners who want to navigate Google’s video site; customers include Disney Interactive, Comcast’s NBCUniversal and News Corp.’s Fox (News Corp. also owns this website).

Strompolos started Fullscreen a couple years ago; prior to that he had worked at Google and YouTube, where he worked with many of the YouTube content makers he represents now.

You can get a brief sense of what Fullscreen is up to in this video Strompolos made for how-to video maker Howcast; you can see the full series of his clips here.

]]> http://allthingsd.com/20130404/chernin-comcast-investing-in-youtube-tools-startup-fullscreen/feed/ 0 http://allthingsd.com/20130403/how-to-buy-netflixs-house-of-cards-on-amazon/ http://allthingsd.com/20130403/how-to-buy-netflixs-house-of-cards-on-amazon/#comments Wed, 03 Apr 2013 21:12:47 +0000 Peter Kafka http://allthingsd.com/?p=308985 Perhaps you’ve heard that Netflix is showing “House of Cards,” a new TV series starring Kevin Spacey.

But maybe you don’t have an $8-a-month Netflix subscription, or don’t want to try the service’s free one-month trial. Or maybe you just don’t like streaming video.

Here’s your answer: You can buy the series, on DVD, this summer. From Amazon, Netflix’s most serious video rival.

This isn’t a cost-effective solution — the series’ first 13 episodes will cost $44.96 on standard DVD, and $52.99 on Blu-ray – but presumably some of you will find value in a physical object. (For one thing, you can re-sell your discs.) UPDATE: We should also note that Netflix subscribers with DVD plans will also be able to get the series that way.

The bigger (but smallish) point here is that even though this is a series commissioned for and funded by Netflix, it still isn’t Netflix’s series.

Netflix’s money bought it an exclusive first “window” to stream the show. But Media Rights Capital, which actually produced the show, has the rights to sell it in other venues; Sony is handling distribution duties in the U.S. and abroad.

That is to say: While “House of Cards” is different in many ways from traditional TV, it’s also quite similar — you’ll see that kind of set-up up and down your TV guide.

And you’ll see it again with other Netflix original programming: The new season of “Arrested Development” that debuts next month, for instance, is owned by News Corp.’s Fox studio (News Corp. also owns this website).

]]> http://allthingsd.com/20130403/how-to-buy-netflixs-house-of-cards-on-amazon/feed/ 0 http://allthingsd.com/20130401/barry-diller-and-aereo-win-another-legal-battle/ http://allthingsd.com/20130401/barry-diller-and-aereo-win-another-legal-battle/#comments Mon, 01 Apr 2013 15:41:48 +0000 Peter Kafka http://allthingsd.com/?p=308155 Another legal victory for Aereo, the Internet video startup that wants to upend the TV industry: A Federal appeals court has rejected a request from broadcasters and TV station owners to halt Aereo’s TV-over-the-Web service.

By a vote of 2 to 1, the Second Circuit appeals court denied a preliminary injunction motion filed by big media companies including Disney, CBS and News Corp. (which also owns this website), upholding an original decision from last summer. You can read the entire decision at the bottom of this post.

In essence, the court said that Aereo’s technical architecture — which pulls down broadcast TV signals from the air, stores them on a computer and retransmits them to its users over the Web, without paying broadcasters for the rights to do so — may well hold up to further legal scrutiny.

The ruling doesn’t mean Aereo’s court battles are over by any stretch, but it is another win for a company that knew from the outset that it would spend a lot of time and money on lawyers. Aereo is specifically designed to fit a legal precedent established by Cablevision, the cable TV company that won the right to create a “cloud-based” DVR for its customers a few years ago. So far that plan seems to be working.

If Aereo, backed by Barry Diller’s IAC, does end up winning in court, it doesn’t ensure that the company will succeed. But it would most definitely affect the bottom line of the broadcast TV networks, which pull in huge fees from pay TV providers for the right to show their programming. Aereo has already received overtures from pay TV providers like Dish Network and AT&T that are intrigued by the notion of bundling the company with Internet-only broadband packages, as the Wall Street Journal reported yesterday.

It is worth noting the dissenting opinion from District Court Judge Denny Chin, who doesn’t buy the Cablevision argument at all: “The system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.” We’ll have plenty of time to watch the two sides hash this out some more.

Meanwhile, if you want to see Aereo CEO Chet Kanojia demonstrate how his service actually works, here he is in action at our D: Dive Into Media conference from February.

AEREO decision –

]]> http://allthingsd.com/20130401/barry-diller-and-aereo-win-another-legal-battle/feed/ 0 http://allthingsd.com/20130329/huffpost-live-thrives-on-tape/ http://allthingsd.com/20130329/huffpost-live-thrives-on-tape/#comments Fri, 29 Mar 2013 13:28:44 +0000 Peter Kafka http://allthingsd.com/?p=307762 Late last summer, Huffington Post launched a streaming video news service, backed by 100 employees, lots of cash and a heap of hype.

So how’s it going?

Pretty good, says HuffPost Live boss Roy Sekoff. Especially if you choose to look at HuffPost Live as a video clip generator: Sekoff says his service is set to serve up 48 million streams this month, up from 17 million in November.

The vast majority of those views don’t come from people who are watching HuffPost Live itself, but are finding embedded videos on AOL and HuffPo pages, like this story about Sasha and Malia Obama’s spring break plans.

If you’re looking at HuffPost Live as a standalone news “channel” a la CNN or Fox News, it has a much more modest reach: A bit more than 2 million viewers a month, and a live audience that wouldn’t register by TV standards. Sekoff says its concurrent viewership tops out around 40,000 people.

But those patterns are standard for the Web right now. Just about everyone who does live video, including AllThingsD’s corporate cousins at The Wall Street Journal, gets almost all of its viewership after the fact, on demand.

It’s possible that all of that changes if and when we get True Convergence Of All Devices All The Time. But it also may be that in the brave new world, truly “live” video is less important to most people, because there’s very little out there that everyone needs to see at the same time; dudes dropping out of spaceships on YouTube are the exception that proves the rule.

My hunch is that in most cases, actual live viewing will be a relatively niche activity, for people who really, really care about a particular topic, band, political issue, etc. And if the rest of us catch up later, that works fine, too.

Speaking of on-demand video, here’s Sekoff, along with a cameo from one of my digits:

]]> http://allthingsd.com/20130329/huffpost-live-thrives-on-tape/feed/ 0 http://allthingsd.com/20130326/everybodys-a-curator-flipboards-mike-mccue-talks-about-new-version-of-social-magazine-video/ http://allthingsd.com/20130326/everybodys-a-curator-flipboards-mike-mccue-talks-about-new-version-of-social-magazine-video/#comments Wed, 27 Mar 2013 01:01:36 +0000 Kara Swisher http://allthingsd.com/?p=306686

There’s no doubt that the highly-valued Flipboard has been at the forefront of social publishing.

With its popular app for the Apple iPhone and iPads, the Silicon Valley startup now has 50 million readers, who use it to elegantly consume content from Facebook, Twitter and a myriad of sources from all over the Web.

Now, in its new second version, the company is moving from a show-me paradigm to a make-something one, allowing users to “create magazines,” according to Flipboard.

In fact, that’s a bit of a broad definition of create — Flipboard 2.0 is more about allowing regular people or professional publishers to curate any kind of magazine in any niche.

For example, in testing the app, I made a magazine about Pop-Tarts. (Does anyone have a problem with that?)

Using a new “plus” button and a pretty easy interface, it is meant to take self-expression to new levels using video, images, text and even music. To help grow audiences for these quasi-creators, as well as find stuff to use, Flipboard has also launched a new content search feature.

There should be some fun stuff created to keep users flipping on the service, but it’s clear the offering is also a lot about finding more revenue for the startup. Using specialized magazines, for example, publishers can instantly create one-offs of previously published content — from Vanity Fair’s “Royal Weddings” to Martha Stewart Living’s “Home How-Tos” — and presumably sell advertising against it.

Flipboard has also partnered with crafts retailer Etsy to make what is essentially a prettified catalog, complete with an integrated shopping cart, for which there are all kinds of lead fees.

Since it has remained independent so far despite some big acquisition interest, figuring out a solid business plan is important, especially since Flipboard did a massive $50 million fundraising round that valued it at $200 million two years ago.

Its investors include Insight Venture Partners, Comcast Ventures, Kleiner Perkins Caufield & Byers, Index Ventures and a spate of well known angels, such as Jack Dorsey of Twitter and Square, Facebook co-founder and Asana co-founder Dustin Moskovitz, investor Ron Conway, actor Ashton Kutcher and the investment company run by former News Corp. exec Peter Chernin.

There are a lot of other new features in the latest Flipboard, but you can read Walt Mossberg’s review of it here, as well as watch my video interview below of Flipboard CEO and co-founder Mike McCue about it all, as well as its business outlook:

And here are some pretty screenshots to give you an idea of the magazine-mania possible:

]]> http://allthingsd.com/20130326/everybodys-a-curator-flipboards-mike-mccue-talks-about-new-version-of-social-magazine-video/feed/ 0 http://allthingsd.com/20130325/hulu-isnt-for-sale-yet-but-buyers-are-asking/ http://allthingsd.com/20130325/hulu-isnt-for-sale-yet-but-buyers-are-asking/#comments Mon, 25 Mar 2013 20:56:08 +0000 Peter Kafka http://allthingsd.com/?p=306515 Two years ago, Hulu’s corporate owners put the video site up for sale — and then took it off the block.

New version of a similar story: Hulu’s corporate owners still aren’t sure what they want to do with the site. But they are starting to hear from would-be buyers, anyway.

One of those potential purchasers is Ross Levinsohn, who worked hard to buy Hulu when he was running Yahoo in 2011.

Now Levinsohn is working for Guggenheim Partners, the $160 billion fund manager that owns the Los Angeles Dodgers and media assets like the Hollywood Reporter, and industry sources say he has talked about buying the site again.

Other companies that have kicked tires — or indicated an interest in kicking tires — include Yahoo and Amazon, sources say.

No prospective buyer has made anything like a formal offer, though. And no one can buy anything until Hulu owners Disney and News Corp. (News Corp. also owns this Web site) figure out a plan for the video hub.

They’ve been trying to do that for a couple years, and in the interim there have been some significant changes at the site. Last year early backer Providence Equity Partners sold its stake, and in January CEO Jason Kilar announced his plan to depart.

But Disney and News Corp. still haven’t agreed on whether the site should focus on an ad-supported model or a subscription one, and while both have talked about buying out the other partner, those discussions are still “fluid,” according to people familiar with the negotiations. (Comcast’s NBCUniversal also owns a stake in the site, but gave up its management role a few years ago in a concession to federal regulators.)

And just like 2011, the key issue for any Hulu buyer would be the content licenses Disney and News Corp. are willing to extend to an outsider.

In the past, the two companies were unwilling to offer long-term deals for their content, which meant anyone who bought Hulu was really buying a Web site and a chance to renegotiate for new content deals in a couple years — that is, they weren’t buying much.

Maybe that will change when and if Disney and News Corp. resolve their differences. If not, hard to see anyone buying the site this time around, either.

]]> http://allthingsd.com/20130325/hulu-isnt-for-sale-yet-but-buyers-are-asking/feed/ 0 http://allthingsd.com/20130325/yahoo-acquires-hipster-mobile-news-reader-summly-like-we-said-it-might/ http://allthingsd.com/20130325/yahoo-acquires-hipster-mobile-news-reader-summly-like-we-said-it-might/#comments Mon, 25 Mar 2013 13:13:58 +0000 Kara Swisher http://allthingsd.com/?p=306305

Yahoo has bought Summly, the mobile news reader app founded by a young British entrepreneur.

In a statement, the London-based company said it had bought the tiny outfit, which will close its app. The price was not disclosed (although I will try to find out soon enough). But the company had been seeking additional funding recently at a big valuation, in stark contrast to its small size (less than one million downloads), staff (five) and business model (zero revenue).

(Update: Sources tell me Yahoo paid just about $30 million for Summly, mostly in cash, with 10 percent in stock, for three employees.)

AllThingsD.com reported in December that Yahoo was looking closely at the startup, with CEO Marissa Mayer meeting with its founder Nick D’Aloisio. As we noted then, Yahoo was aiming at trendy mobile “acq-hires” to give the sleepy Silicon Valley Internet giant some sizzle and improve its moribund mobile offerings.

Mayer has been buying up a range of similar small mobile startups, largely for their teams of talented and innovative engineers. And, at a recent employee meeting, its M&A head Jackie Reses said the Silicon Valley company was looking at two significant purchases and a half-dozen smaller ones.

Said Yahoo: “Founder Nick D’Aloisio and the Summly team are joining Yahoo! in the coming weeks. While the Summly app will close, we will acquire the technology and you’ll see it come to life throughout Yahoo!’s mobile experiences soon. We’re not disclosing purchase price or other terms of the deal.”

Yahoo mobile head Adam Cahan wrote a blog post about the deal, as did D’Aloisio, who also tweeted news of it:

@summly has signed an agreement to be acquired by Yahoo!! Excited for the next chapter of Summly! Thanks to all who have supported me.

— Nick D’Aloisio (@nickdaloisio) March 25, 2013

News readers have been getting snapped up of late. CNN acquired Zite for $20 million in 2011, while we reported that LinkedIn was in the midst of buying Pulse for upwards of $50 million.

The 17-year-old D’Aloisio created the high-profile news reading app, which garnered much attention in the last year in the mobile space, which is probably what attracted Yahoo to it.

As I wrote:

D’Aloisio — who looks like he could easily be a member of One Direction if this tech thing did not work out — is perhaps a perfect storm for Yahoo, which is seeking to show that it can attract innovative, young entrepreneurs to the company, while also looking to strengthen its nearly bare mobile cupboard.

Summly is all that and a bag of (fish and) chips, with a very slick app for the Apple iPhone that has become one of the more popular in the App Store since it was re-launched last month. The company has said it has been downloaded 500,000 times.

It deserves the attention, as it is a pleasure to use — think an even hipper version of Flipboard with some more sass. The handsomely designed app summarizes news stories — all using a natural language processing algorithm — in only a few sentences and in under 400 characters. Users can then swipe through topics and stories quickly and click in to be directed to the full story on the original news site.

Summly originally started as a prototype app called Trimit, which soon garnered attention and seed funding from Hong Kong billionaire Li Ka-Shing’s investment firm. In no time, it had a range of other investors, ponying up about $1.5 million, including trendy ones like Ashton Kutcher and tech types like Zynga’s Mark Pincus, Automattic’s Matt Mullenweg and Airbnb’s Brian Chesky.

Since then, it has been striking content deals, including with News Corp. (which owns this site) and others, which seem to be attracted by its investor pedigree, its solid technology and — perhaps most of all — its media-darling founder.

To get an idea of the adorable hip factor involved, here’s a really clever video D’Aloisio did with actor Stephen Fry, who is also an investor in the startup:

Summly Launch from Summly on Vimeo.

]]> http://allthingsd.com/20130325/yahoo-acquires-hipster-mobile-news-reader-summly-like-we-said-it-might/feed/ 0 http://allthingsd.com/20130314/why-you-can-watch-ncis-on-your-ipad-but-not-big-bang-theory/ http://allthingsd.com/20130314/why-you-can-watch-ncis-on-your-ipad-but-not-big-bang-theory/#comments Thu, 14 Mar 2013 19:58:09 +0000 Peter Kafka http://allthingsd.com/?p=303709 CBS has a new iPad and iPhone app that will let you watch many of its shows for free. That’s not interesting at all.

What is interesting are the decisions the network has made about what you can watch on the apps, and when you can watch them. Because they say a lot about the state of the TV business, and the way it is and isn’t adapting to digital reality.

Stuff to pay attention to:

• CBS, which for a long time kept most of its shows off the Web, now offers almost all of them on the Web, and you can see most of those on the apps. The omissions in the mobile lineup are the shows that CBS doesn’t own. “Big Bang Theory,” for instance, comes from Time Warner’s Warner Bros. studio, so it’s not on the app.
• You can see most of CBS’ daytime and nighttime programming (soaps, “David Letterman”) on the apps the day after they air. But its primetime stuff — (“NCIS,” “The Good Wife,” etc.) won’t show up until eight days after it airs on the network.

The state of mobile, or at least the state of TV’s thinking about mobile, has a lot to do with both of those decisions.

For starters, while regular human beings recognize that stuff they look at on a tablet or a phone is the same as the stuff they see on TV or a Web browser, that’s not how biz dev and legal people think. So CBS, for instance, doesn’t have the rights to show “Big Bang Theory” on your iPad, even though it can let you watch it on its website.

And even when CBS does have mobile rights, it can’t convince advertisers to give it full credit for the eyeballs that watch its shows on phones and tablets, for technical/measurement reasons. So it’s not going to put stuff on mobile until it has wrung out the full value of its TV ad dollars.

When it comes to “Letterman” and “The Young and the Restless,” that’s the next day. But CBS and other networks are trying to convince advertisers that they should get credit for shows and ads that people watch in the seven days after an episode first airs. That’s not happening right now — currently, they get credit for shows watched live or on DVRs in the first three days after air — but CBS is hoping/assuming they’ll get what they want in the next couple years.

CBS isn’t the only network paying attention to the so-called “C7” window; you can see evidence of that in Fox’s decision to keep its shows off the Web except for “authenticated” viewers who are also paying for cable TV. (News Corp., which owns Fox, also owns this website.)

But that thinking isn’t universal, either: Right now you can watch the episode of “The Neighbors” that aired last night on ABC, on the network’s site or its iPad app, or on Hulu, for free, without any kind of sign-in/registration.

Actually, you can watch it here, too (unless you’re reading this on a tablet or mobile, because, see above). Enjoy.

]]> http://allthingsd.com/20130314/why-you-can-watch-ncis-on-your-ipad-but-not-big-bang-theory/feed/ 0 http://allthingsd.com/20130311/william-morris-endeavor-invests-in-app-maker-chaotic-moon/ http://allthingsd.com/20130311/william-morris-endeavor-invests-in-app-maker-chaotic-moon/#comments Mon, 11 Mar 2013 17:42:37 +0000 Peter Kafka http://allthingsd.com/?p=302336 Talent agency William Morris Endeavor says it has taken an undisclosed but “significant” stake in Chaotic Moon, an Austin, Texas-based software company. Chaotic Moon makes apps and other products for a range of companies including Disney’s Marvel, Microsoft and CBS; it also did much of the work on The Daily, News Corp.’s now-shuttered iPad app.

]]> http://allthingsd.com/20130311/william-morris-endeavor-invests-in-app-maker-chaotic-moon/feed/ 0 http://allthingsd.com/20130309/some-more-inconvenient-truths-al-gore-talks-about-the-future-at-sxsw/ http://allthingsd.com/20130309/some-more-inconvenient-truths-al-gore-talks-about-the-future-at-sxsw/#comments Sat, 09 Mar 2013 22:06:12 +0000 Kara Swisher http://allthingsd.com/?p=301972

Former Vice President Al Gore took to the stage at the SXSW interactive festival today to tell a packed auditorium at the Austin Convention Center about the future.

No, really, “The Future,” which is the name of his new book, with the heavy-duty subhead “Six Drivers of Global Change.”

Among these drivers are — no surprise for him — severe environmental damage, as well as overpopulation and changes in biology via technology, and all the problems that come with that. Among the other critical issues, Gore also noted money politics, the ever-more-sophisticated antibiotics for livestock, and the reliance on supercomputers for stock market trading.

Gore told AllThingsD editor Walt Mossberg in an interview that some of these global developments were both a “peril and opportunity.”

But, in all, it’s a pretty depressing picture overall that he is painting, despite pointing out that knowing you have a problem is the first step.

“Our country is in very serious trouble,” he said. “But that does not mean I am not optimistic.”

Which is right before Gore started reeling off the problematic pressure that money has put on politics. “Our democracy has been hacked,” he said.

“American democracy has never been perfect, but more often than not, the will of the people did drive policy,” he added. “Congress today is utterly incapable of passing any reform of any significance unless they get permission from special interests.”

For example: “The NRA is a fraud,” about the National Rifle Association and its links to gun manufacturers.

“I wish I could get you to be more outspoken,” joked Mossberg.

“Timidity has always been an issue with me,” joshed Gore back.

Gore, who often likes to talk in full and very extended paragraphs, slowly worked through the rest of the list, before he got to the issue of spider goats.

Indeed, spider goats, which are created using genetics to mix the genes of spiders and goats.

“You can’t farm spiders for a number of reasons, so people are talking the genes from spiders and splicing them into goats,” explained Gore. “They look like goats, then these spider goats secret silk through their udders. ‘Everyone okay with that?’”

Um, no.

Still, Gore added that there are “blessings” that come with genetic engineering, including the elimination of a range of devastating diseases.

Gore soon moved onto the issue for which he is best known — global warming — after his movie “An Inconvenient Truth” gained worldwide attention.

“It’s not me saying it — I’m delivering the message. Every single national academy of science on the planet agrees with this, he said, before moving onto the recent devastation of Hurricane Sandy on the East Coast. “Mother Nature has the most powerful voice in this debate.”

But Mossberg and Gore soon parried over the sale of Gore’s media company, Current, to Al Jazeera.

You sold your network to Al Jazeera, which is owned by a government that’s a big oil producer,” asked Mossberg. “How could you do that?”

While hemming and hawing about that, Gore then came back with a good one: “I don’t ask you why you continue working for Rupert Murdoch.”

This meant war, since this site is owned by News Corp. “Last I checked, he’s not in the oil business,” countered Mossberg.

“He’s also not strictly in the news business, either,” said Gore.

Oh dear, time to get back to global warming, because it’s getting hot in here.

It was then onto a short Q&A, with one question about the Internet — an issue near and dear to Gore’s heart. In truth, despite all the jokes, he was critical when a senator to turning the Internet over to the people, from its origins as a government project.

And in this Gore finally pointed to a bright glimmer of hope. “The future of democracy,” he said, “may well depend on the continued freedom and independence of the Internet.”

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]]> http://allthingsd.com/20130309/some-more-inconvenient-truths-al-gore-talks-about-the-future-at-sxsw/feed/ 0 http://allthingsd.com/20130306/why-the-time-inc-spinoff-could-work-spoiler-requires-miracle/ http://allthingsd.com/20130306/why-the-time-inc-spinoff-could-work-spoiler-requires-miracle/#comments Thu, 07 Mar 2013 04:07:31 +0000 Peter Kafka http://allthingsd.com/?p=301202 Good news, remaining Time Inc. employees! You don’t have to go work for a company based in Des Moines.*

As far as the bad news … we’ll get to that. But let’s stay upbeat for a minute, and I’ll try to generate more optimism for you.

Start with some charts, via Google Finance.

Here’s what happened to AOL stock after the company split off from Time Warner, just like you’re set to do:

And here’s what happened to Time Warner Cable shares when that company did the same thing:

And for good measure, let’s mash them together:

So, on the whole, not too terrible. Two companies that Jeff Bewkes didn’t want weighing down his cable and movie business, and they’ve done okay once he cut them loose. AOL shares are up 62 percent since the split.** Time Warner Cable is down 21 percent, but shareholders have gotten another $6.41 per share in dividends, so things are a bit better than they look here.

Let’s continue to stay upbeat, and channel the talking points you’re likely to hear in months leading up to the split:

• Hey, just because this is Plan B for Jeff Bewkes doesn’t mean he doesn’t want this to succeed. Time Warner, after all, will end up owning a chunk of the spun-off company, so it has a vested interest in this thing working.
• And, seriously, this could be good for Time Inc.! After all, in the last few years the thing has just been in stasis/shrinking mode, and no one cared. Now they’ll have to care, and maybe the newco will go do some serious re-orging and perhaps some investing, too. After all, it’s good enough for News Corp.!

And all of that is potentially true. Or at least truthy. Or something.

Alas:

• Jeff Bewkes doesn’t care about Time Inc., and investors don’t either — they’ve wanted him to dump it forever. If they haven’t priced the spinoff into the share price already, they will do so immediately, and then that will be that.
• It’s hard to imagine any scenario where Time Inc. is able to navigate the print-to-digital shift effectively. But it certainly won’t get its best odds as a public company made to answer to the Street’s quarterly demands. And even if, say, a deep-pocketed and semi-benevolent benefactor materialized to buy the thing, Bewkes wouldn’t sell, because of the tax hit that would generate (the spinoff will be tax-free for shareholders).
• For better and worse, the News Corp. spin (which is set to include this website) is going to be steered by Rupert Murdoch, a man with a lot of money invested in the company’s perfomance, and even more ego tied up in it. Time Inc. will be run by … someone, and they’ll get a nice paycheck and some options for their effort, but no one expects them to work a miracle here.
• And that’s what Time Inc,. stripped of Time Warner’s corporate shield, will need to turn around. It has the classic analog/digital channel conflict, where the latter is the only way out, but the former generates all the cash. And that’s hard enough to deal with at the most nimble and most flexible companies. This one, shoved out of the nest and into the market without any kind of cushion, seems set up to fail. I hope I’m wrong.

*Des Moines is nice enough, by the way. But the Meredith/Time Inc. culture clash stories you heard were very true.
** True, AOL has fired a lot of people since it went its own way. But that’s going to happen at Time Inc., no matter what. And, yes, the stock’s rise has a lot to do with a $1 billion patent sale, but let’s stay positive!

(Image courtesy of Shutterstock/mikeledray)

]]> http://allthingsd.com/20130306/why-the-time-inc-spinoff-could-work-spoiler-requires-miracle/feed/ 0 http://allthingsd.com/20130303/in-the-ever-crowded-online-learning-space-tsl-education-aims-at-teacher-lessons-video/ http://allthingsd.com/20130303/in-the-ever-crowded-online-learning-space-tsl-education-aims-at-teacher-lessons-video/#comments Sun, 03 Mar 2013 21:04:54 +0000 Kara Swisher http://allthingsd.com/?p=299917

Last week, I had a very erudite meeting with Louise Rogers, who runs one of the fastest growing social networking sites for educators — first in Britain and now operating in about 197 countries including the U.S.

The London-based TSL is a fascinating glimpse into how education is changing quickly online, catering to teachers who primarily share lesson plans, but also tips and techniques with others for free. It’s been signing up many thousands per month, who download 2.8 million plans weekly to help them better do their job — often in a resource-starved environment.

While running a number of English-language products, TSL struck a partnership called Share My Lesson with the American Federation of Teachers and its mainstay TES Connect service to expand here.

The company started a century ago as a newspaper supplement for teachers in the Times in Britain, which was owned by News Corp. at one point (which also owns this site) and was then sold to a private equity firm for $400 million and then sold again.

TSL, now largely online with $120 million in annual revenues garnered from a robust jobs listing service for teachers and other premium products, competes with other similar online services, like Curriki and LessonPlan.it.

Here is my video interview with Rogers about how it all works — listen and learn:

]]> http://allthingsd.com/20130303/in-the-ever-crowded-online-learning-space-tsl-education-aims-at-teacher-lessons-video/feed/ 0 http://allthingsd.com/20130301/disney-news-corp-discuss-hulus-future/ http://allthingsd.com/20130301/disney-news-corp-discuss-hulus-future/#comments Fri, 01 Mar 2013 23:45:54 +0000 Martin Peers and Christopher S. Stewart http://allthingsd.com/?p=299814 News Corp and Walt Disney Co. have begun discussions about resolving uncertainty over their jointly controlled online video site Hulu, with one possible outcome being that one or the other company sells their stake.

The two companies, which each own about a third of Hulu, have each indicated at different times over the past few months their willingness to buy the other out, the people say. There is also the possibility both companies will decide to sell to an outsider, the people said.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20130301/disney-news-corp-discuss-hulus-future/feed/ 0 http://allthingsd.com/20130226/maybe-youll-get-the-pay-tv-you-want-after-all-cablevision-sues-viacom-to-break-up-the-bundle/ http://allthingsd.com/20130226/maybe-youll-get-the-pay-tv-you-want-after-all-cablevision-sues-viacom-to-break-up-the-bundle/#comments Tue, 26 Feb 2013 17:54:07 +0000 Peter Kafka http://allthingsd.com/?p=298499 Pay TV has a simple model: If you want to watch one channel, you have to pay for dozens — or hundreds — of others, whether you watch them or not. That model drives lots of consumers nuts, but it has looked very, very hard to dislodge.

Now one cable provider says it will try to break up the bundle: Cablevision has sued Viacom for “illegally forcing Cablevision to carry and pay for 14 lesser-watched ancillary networks its customers do not want.”

On the face of it, Cablevision is directly attacking the core bundling principle the industry has used for years, and continues to implement as pay-TV providers and programmers sign new, long-term deals. It is accusing Viacom of an “illegal tying arrangement in violation of the federal antitrust laws,” and if it is successful, the repercussions could be widespread and significant.

But note that the conventional wisdom in the pay-TV industry is that “tying” rules aren’t applicable to cable bundles — people have tried repeatedly to break the bundle using the courts and failed (here’s the most recent attempt, from last year). And the main remedy Cablevision seems to be seeking is to get out of a carriage agreement it signed with Viacom a few months ago, in December 2012.

If that’s the case, the suit would fit into a familiar pattern in the pay-TV business, where programmers and pay-TV providers joust with lawyers and press releases before agreeing to keep the status quo.

That seems to be what Viacom is suggesting with its response:

“At the request of distributors, Viacom and other programmers have long offered discounts to those who agree to provide additional network distribution. Many distributors take advantage of these win-win and pro-consumer arrangements. Reflecting the highly competitive cable programming business, these arrangements have been upheld by a number of federal courts and on appeal. Viacom will vigorously defend this transparent attempt by Cablevision to use the courts to renegotiate our existing two month old agreement.”

All that said, if the case does go all the way through the court system and ends up in Cablevision’s favor, then we might finally see real change in the pay-TV world: You could imagine a scenario where pay-TV providers and their customers end up paying Disney for ESPN, but not ESPN 2 or ESPN3. Or the Disney channel. Or where News Corp. (which owns this website) wouldn’t be able to require Fox News viewers to take the FX channel as well.

It’s also possible that, given all those choices, consumers might end up choosing the bundles anyway, since pay-TV buyers could experience sticker shock when they see the “real” price of unbundled programming. If ESPN is currently getting more than $5 per subscriber when it sells as part of Disney’s bundle, it’s going to have to charge a multiple of that in an on-demand world — or cut its programming costs way, way, way down.

And even that scenario will take years to play out. Which means that, in the meantime, anyone who’s looking to get into the pay-TV business right now — like, say, an Apple — is still going to have work with the bundle. That’s what Google has already worked out as it steps cautiously into the pay-TV world, and that’s what Intel is doing as it prepares its Web TV subscription service.

Here’s Cablevision’s press release:

CABLEVISION FILES FEDERAL ANTITRUST LAWSUIT AGAINST VIACOM FOR ILLEGALLY FORCING PURCHASE OF PROGRAMMING SERVICES

BETHPAGE, NY, February 26, 2013 – Cablevision Systems Corporation (NYSE: CVC) filed an antitrust lawsuit today against Viacom (NYSE: VIA), in federal court in Manhattan, for illegally forcing Cablevision to carry and pay for 14 lesser-watched ancillary networks its customers do not want, such as Palladia, MTV Hits and VH1 Classic, in order to carry must-have networks such as Nickelodeon, MTV and Comedy Central.

Commenting on the lawsuit and Viacom, Cablevision offered the following statement:

“The manner in which Viacom sells its programming is illegal, anti-consumer, and wrong. Viacom effectively forces Cablevision’s customers to pay for and receive little-watched channels in order to get the channels they actually want. Viacom’s abuse of its market power is not only illegal, but also prevents Cablevision from delivering the programming that its customers want and that competes with Viacom’s less popular channels.”

Cablevision’s suit contends that:

[-] Viacom abused its market power over commercially critical networks, including must-have networks such as Nickelodeon, Comedy Central, and MTV, to coerce Cablevision into carrying the 14 far less popular ancillary channels.

[-] Viacom coerced Cablevision by threatening to impose massive financial penalties unless Cablevision complied with Viacom’s demands.

[-] Viacom’s conduct harms Cablevision and its customers, and impairs competition by making Cablevision pay for and carry networks that many subscribers do not want to watch, while other networks are excluded from distribution, preventing Cablevision from being able to differentiate its services and harming subscribers.

Cablevision’s complaint asserts that Viacom engaged in a “per se” illegal tying arrangement in violation of the federal antitrust laws. Cablevision’s antitrust lawsuit also asserts that Viacom has engaged in unlawful “block booking,” which is a form of tying that conditions the sale of a package of rights on the purchaser’s taking of other rights. Viacom’s conduct also violates the Donnelly Act in New York State Law, which parallels federal anti-trust laws.

The complaint was filed under seal and a public version is not yet available.

Cablevision is seeking a number of remedies including:

[-] Declaratory relief voiding the December 2012 carriage agreement.

[-] A permanent injunction barring Viacom from conditioning carriage of any or all of its Core networks on Cablevision’s licensing any or all of Viacom’s ancillary networks.

[-] To effectuate the permanent relief, a requirement that Viacom permit Cablevision to carry the Core networks and ancillary products on terms pending negotiation of a new, lawful agreement

[-] Treble damages and legal fees.

Viacom’s eight core networks:

MTV
MTV2
Nickelodeon
VH1
Spike
TV Land
Comedy Central
BET

Viacom’s 14 ancillary networks:

Centric
CMT
MTV Hits
MTV Tr3s
Nick Jr.
Nicktoons
Palladia
Teen Nick
VH1 Classic
VH1 Soul
Logo*
CMT Pure Country**
Nick 2**
MTV Jams**

*Optimum East Only
**Optimum West Only

Antitrust Legal Background
[-] Federal antitrust laws protect competition. By protecting competition, antitrust laws secure lower prices, higher quality, and other benefits for consumers.

[-] The antitrust laws prohibit tying, where a powerful firm wields its leverage from a product in one market, called the “tying” product, to compel a customer to take another product, called the “tied” product, when that customer would have preferred instead to take a product that competes with the “tied” product.

[-] The reason antitrust law prohibits such tie-ins is to protect competition and consumers. If powerful firms can leverage their power from one market to another, they can insulate the tied product from competition. Forcing customers such as Cablevision to take Viacom networks instead of competing networks, in turn, hurts consumers because they get less for what they pay for video services.

Cablevision officials indicated that there would be no immediate disruption in programming offerings pending the resolution of this matter.

]]> http://allthingsd.com/20130226/maybe-youll-get-the-pay-tv-you-want-after-all-cablevision-sues-viacom-to-break-up-the-bundle/feed/ 0