But here’s the guy to ask: Bill Carr, who heads up Amazon’s digital music and digital video groups, which now include Amazon Studios, the unit that is going to make original movies and TV shows for the e-commerce giant.

Carr doesn’t talk much, but last week I got the chance to sit down with him at Amazon’s Seattle headquarters. Amazon is as tight-lipped as Apple when it comes to new product discussions — or lots of other stuff you and I would like hear about — so I didn’t even bother asking him about Amazon’s new TV box. (Still: Count on it.)

But if you read between the lines, you should at least be able to get a sense of what Amazon is thinking as it contemplates beefing up its music offerings, and as it goes head to head with Netflix (and everyone else) in digital video. Here’s an edited version of our chat:

Peter Kafka: A couple years ago, Amazon and Google and Apple were all racing to develop music-locker services. But we don’t hear much about them anymore. How is Amazon’s locker working?

Bill Carr: The fundamental things about cloud music storage that works for all consumers is that it backs up everything, it’s in a safe place. I can access it from all of my devices, it’s simple. I don’t have to think about it. People don’t want to manage their music, they want to enjoy their music. Every consumer likes that.

What may have more limited appeal is how many consumers want to pay $25 a year to do that for all of their music.

Are you surprised about the take-up rates for the $25 a year option?

No. I don’t find that surprising.

The locker services seem like part of a larger trend where big platform companies like you, Apple, Google, are trying to get people to move their media into your own clouds, and end up committing to one ecosystem or another.

It may be that other companies think about it that way, because their goal is that you only use their devices. But that’s not our goal. Our goal is to free you up to use whatever device you want. Which is why we support any kind of PC, any kind of Mac, iOS devices, Android.

Our goal is to be ubiquitous on any device people might want to use. It’s a big investment for us to make all those apps avilable. But our goal is not to lock you into any one ecosystem.

Do you think you can keep doing that? It seems like we’re moving back toward a walled-garden world.

I can’t speak to other people, and what decisions they may make that may prohibit us from enabling our app. But we’ll work very hard on behalf of our customers to make sure our app is available on the devices they use.

You first started selling MP3s in 2007, and for a while it seemed like you weren’t making any headway against iTunes, which dominates the business. But now, at least according to NPD, you have 22 percent of the download market. What changed?

We don’t release any details about where we stand. But what I can say is that we have seen customer growth in our service every year. We have year-over-year growth in sales and in customers. And the way we’ve accomplished that is by building more solutions for customers.

Is your locker service helping sell more music? Are Kindle Fires helping you sell more music?

There’s no doubt that with the trend toward connected devices, mobile devices, our customers are realizing that it is super convenient to buy once and play it anywhere, and make it available on any of their devices. That’s working, and driving more sales.

Now it seems like there’s a move away from music sales and toward access — either from subscription services like Spotify, or free Internet radio like Pandora. You guys don’t offer anything like either one of those, but there are reports you are considering them. Should we expect an Amazon version?

We don’t speculate on what we might do in the future. But we’re also listening to our customers about other ways they’d like to enjoy their music. We’ll always look for the next innovation.

But you’re not philosophically opposed to subscription or ad-supported music?

Not at all. As a company, if we constrained ourselves to certain definitions, then we wouldn’t have gone nearly as far for our customers.

What about the idea of bundling music into Amazon Prime, like you do with video? Right now, there’s no connection between Amazon Prime and music.

We’re always thinking about distinctive experiences — how can we provide something for our customers that’s going to solve important problems for them? We’re always thinking about those things.

When it comes to video and Prime, it seems like your approach to your subscription service has changed. From the outside, it looked like, initially, you simply wanted to build up a catalog, and you weren’t very picky. More recently, it looks like you’re focusing on specific titles and catalogs.

The part I would disagree with is that we’ve never been thoughtful, or cared about the content. We have reams of data, based on years of being in both the transaction video business and the DVD/Blu-ray business, to know what our customers want to watch. And we’ve used that information to help bring them the right videos.

I think what has changed is — yeah, obviously, we have been increasing our investment over the last two years that we’ve been in this business. And I think it’s fair to say that increasingly you’ll see more and more content on Amazon that’s exclusive.

Why does exclusivity matter?

I think it’s very important for our customers. In some cases, it’s the only way to get some of the best shows. If we want those shows, in many cases the way that business shakes out is you can either have it exclusively, or not have it. More importantly, we are looking at what our customers like, and we want to have a set of movies and TV shows that are only on Amazon.

Why does that matter?

For the same reason that you can only see “30 Rock” on NBC, or “House of Cards” on Netflix, or “Girls” on HBO. It gives users a reason to tune in and try our service.

Are people watching many videos via Prime? Again, from the outside, it seems like there’s not a lot of use. There was a Sandvine study that showed Amazon very far behind Netflix last fall, and people I talk to who sell you programming don’t think you have a a lot of viewers.

We don’t disclose the details. But I would say we’ve seen strong triple-digit growth in terms of rate of use. We’re very pleased.

In the investor letter he published last week, Reed Hastings set up Netflix as a direct competitor with HBO. Do you also think Amazon is competing with them?

HBO’s a wonderful company, and has been a great partner to us. Our customers love HBO programming. I can’t speak to Reed’s strategy. But we’re building … I don’t think there is a another service like ours. It’s not like HBO. There’s at least three, four different ways to get movies and TV shows that you want on Amazon.

Hastings said he’s competing with HBO for customers’ time and money, but also now for content. Are you seeing that conflict coming with Amazon?

My ambition is to make sure that we create something that is its own service, that is not like HBO, Netflix or any other service, with its own unique value proposition. A lot of companies have a competitor focus. We have a customer focus.

Like Netflix, you are producing your own original programming. Earlier this month, you put up 14 TV pilots and asked people to vote on them. Why are you getting into originals, and why are you doing it that way?

The primary reason is because we’re committed to the idea of reinvention, and that we think that there’s great value for our customers if we get this right. And the reinvention is, “How do we get a lot more feedback from our customers early in the process? How do we remove gatekeepers from the process, so that great ideas can come from anywhere in the world, and get made into movies and TV shows? And how do we create a collaborative environment, where different creators can work in an open environment, to produce more exciting ideas and exciting stories that customers want to hear?”

So you think there’s video out there that could be made, and should be made, but isn’t, because of the way the existing production process works?

A simple example of that is what we’ve done in books, where we’ve created an open platform for any author to submit their books, through Kindle Direct Publishing. That removes gatekeepers from the process, and opens up all kinds of possibilities for people to become authors. So, why can’t there be great possibilities for people who have great stories to tell, whether it’s a script or screenplay?

It’s a journey for us. We’re flexible on the tactics of how we get there, but firm on the strategy.

If you look at the pilots you put out this month, it seems you’ve used a fairly traditional approach, and are working with lots of established talent. Only one of the 14 pilots — “Those Who Can’t” — came in over the transom. And even in that case, those guys were fairly established. Will that change?

Just the fact that that show came in from an online submission — I would consider that to be remarkable. That possiblity doesn’t exist in the traditional system today. And the idea that we’ve put all 14 pilots out for free, for anyone to watch, with the explicit ask for customers to give us feedback — I think both of those things are remarkable.

Are you surprised by any of the feedback you’re getting on the shows so far?

The point isn’t what I think about it. I didn’t spend a lot of time forming my opinions about it. I have shows that I prefer, but my views don’t represent the views of all of my customers. It really isn’t what I think about the shows, it’s what my customers think.

Do you think the comments you’re getting on the shows will be useful?

I think we’re getting really insightful information on all of the shows. How accurate it is is something we’ll discover over time. Because there has to be a feedback loop, and you have to see what happens in the real world.

This is a multiyear process. If you’re focused on reinvention, it requires you to experiment and collect data. And then try new experiments.

As of 3:05 pm ET today, Fusion shares were trading at $19.89, up $3.26 (or 19.6 percent) from a $16.63 closing price Wednesday. For one thing, the company reported quarterly results yesterday, and gave forward guidance for the current quarter that was better than anyone expected.

Another thing? There’s a new Facebook data center going up in Iowa. And as everyone who follows Fusion-io knows, Facebook and Apple are its marquee customers. A new data center means that a lot of new Fusion-io products are selling.

As CEO David Flynn pointed out in an interview this morning, that can be a blessing and a bit of a curse. Earlier this year, Facebook and Apple trimmed orders and Fusion was forced to trim its outlook. Now, with Facebook building again on a site that’s big enough to accommodate at least two more facilities just like it, there’s a brighter outlook. But if you take out the up-and-down side of Fusion’s business that caters to Apple and Facebook growth, Flynn said, there has been a nice, steady, predictable ramp.

There are also new customers to report: Box, the fast-growing enterprise cloud services company, has started adding Fusion-io products to its servers. So has music service Spotify.

Then there’s the matter of the $119 million acquisition of NexGen, a Louisville-based company that specializes in taking traditional hard-drive-based storage products aimed at mid-range companies and combining them with Fusion-io’s flash-based technology. The combination gives Fusion access to a base of customers it wasn’t previously reaching. “We started out reaching the companies at the top of the pyramid, and the fact is the size of the market opportunity in the middle market is bigger,” Flynn said.

The deal has Fusion paying $114 million in cash and $5 million in stock. It’s Fusion’s second acquisition this year. Last month, it acquired ID7, a British software firm.

The company plans initially to launch in select markets, such as Mexico, Singapore and Hong Kong, and will start making announcements on specific plans in coming weeks, the person said.

Read the rest of this post on the original site »

So it’s advertising on the Web’s most popular music service: Starting tonight, Spotify is running a one-day “takeover” ad on YouTube’s homepage, which you should be able to see now.

The spot, as Spotify folks describe it, sounds pretty clever: The idea is that fans are supposed to “follow” the band Phoenix for a day, via an 18-minute documentary that will roll out in pieces, in what’s supposed to mimic real time.

That is — if you click on the videos early Tuesday morning, you’ll only see a few minutes of clips, but you’ll see more in the afternoon, and the whole thing by the end of the day. The “follow” idea is also supposed to remind you that Spotify has introduced a Twitter-like discovery metaphor/feature, so you can see what your friends, or famous people, are listening to.

The bigger picture is that Spotify, which has grown quickly in the last few years, needs to get much bigger to satisfy investor and management ambitions. Lots of digitally savvy people still don’t understand what the service is, or how it differs from rivals like Pandora or iTunes; plenty of normals simply haven’t heard about it, period.

Hence Spotify’s first real TV ad campaign, which launched last month with big-budget buys on broadcast TV shows. The YouTube homepage isn’t cheap, either — it reportedly costs $400,000 a day.

But what about the fact that Spotify CEO Daniel Ek has long argued that YouTube, which offers an unlimited supply of music, for free, is his biggest competition? And that one day, perhaps this year, Spotify may be competing with YouTube when it comes to a paid subscription service?

Isn’t this a little like Fox taking out an ad for “American Idol” on NBC’s “The Voice”?

Sort of! But not really, says Spotify marketing boss Erin Clift: ”We are running an integrated marketing campaign, and when you think about where you get the most reach … YouTube is certainly right up there with television.”

Image copyright Norm Hall | Getty Images Sport

It’s a stark contrast from the glory days, where distribution was fixed and scarce, and all we had to do was put a great product out there. At the time, all content had found its own native distribution outlet — a channel on the dial, a spot on the newsstand, a movie theater, video store — that delivered it to the bulk of its audience. That distribution was beautifully limited — there’s only room for 12 channels on the old VHF dial, 16 movies at a multiplex and maybe several thousand titles at video rental stores.

But today, distribution and consumption are in constant flux. Look at TV. To be truly “Everywhere” these days, a TV show has to be on network, cable, YouTube, Netflix, Hulu, iTunes, Facebook and Amazon, have its own native app in Apple and Android stores — at a minimum — and a presence in Google’s mighty search index.

To succeed today, digital media companies need to get control of their distribution. The opportunity for savvy media companies is to abandon the outdated if-we-build-it-they-will-come mentality, and master the craft and science of programming.

Programming is the skill of matching content to audience. Programming is what built the global TV and film industry from $200 billion to $300 billion in the last decade. If you want to succeed in digital media going forward, programming is everything.

I spent time recently with a friend from CBS and told him about what my company Wetpaint does to program social as a channel: In short, we deterministically deliver the right content to each audience at the right time. That might mean, for example, a recap of yesterday’s news timed for the morning bus ride, a short-form video clip posted to coincide with a mid-morning coffee break, a gossipy tidbit just as lunch begins. “That may work in entertainment,” he said. “But it would never work in breaking news. In news, everything needs to go out immediately.”

So I did some research, and it turns out he’s wrong. When you look at what our editors consider breaking news within the entertainment category, the vast majority of stories — more than 75 percent — perform better when they’re packaged and presented at another time of day, and not when they first break.

While immediacy became the mandate in the ages of CNN and Google, smart programming is far superior in an age of multiple distribution outlets.

The expertise of digital programming is in its infancy, but some of the secrets for success have emerged. Here are a few:

• You don’t have one big audience.
  Digital media companies need to know who their audience is and what they like, and then customize their product and pitch accordingly. But convention on the Web has been to serve everyone the same thing — and the folly of that is a massive missed opportunity. Instead, understand your value to all your major audience segments. After all, each person you reach thinks of herself as an audience of one. Meet her where she’s at, and you’ll find your resonance — and performance — will be much greater.

  For decades, the National Football League operated on the basic assumption that football is for guys. That conventional wisdom was upended in 2010 when research by the NFL and Nielsen found that more than 40 percent of the league’s fans were women. (It’s upward of 44 percent now.) Of course, football fans (both male and female), segment along many lines — and NFL marketers will have to find ways to speak to, sell to and grow all those demographics. But acknowledging women was a huge and lucrative step to grow the league’s opportunity massively.

• Learn what will resonate. (Hint: In the battle for consumer hearts and minds, heart wins every time.)
  Once you know who your customers really are and can group them by their common interests, the world opens up. You have the freedom to design new content and experiences to delight them. It doesn’t have to be one-size-fits-all any longer; your brand doesn’t have to be watered down to its most basic and neutral. Many brands and publishers struggle for relevance — but once you articulate who your audiences are and understand what they’re interested in, the door is open to all kinds of new conversations. Research, feedback and analytics can all help you become expert in each of your audience segments. Then use those insights to grow your brand.

  Sticking with the NFL as an example, when the league learned about its popularity with women, it took that finding and ran with it, introducing a new website, ad campaign and product lines — all aimed at the now 80 million women who tune into NFL games each weekend. Female fans rewarded the new attention by dropping millions on NFL apparel, jewelry, nail polish, yoga mats, etc. The league went further and partnered with the American Cancer Society to raise awareness about breast cancer, which explains all the pink flourishes (gloves, socks, wristbands, etc.) on the field and the sidelines these days. This overdue — and heartfelt — outreach strengthened the bond between the NFL and its huge female fan base. The league’s bottom line smiled. In 2012, NFL fans spent $3.2 billion on consumer products.

• Timing is everything.
  Of course, the most basic element of the art of content programming, one that has been mastered by the TV networks, is knowing what performs when. Prime-time shows don’t work in the mornings, and re-runs would squander the huge opportunity of evening viewing. There’s a time for opinion and a slot for hard news, and reversing them tanks performance and tunes out audiences.

  But on the Web, well, somehow the only rule of thumb our industry seems to know is “the best time to post is now.” And that’s preposterous.

  In terms of social, the state of the art sounds better, at least at first: There are lots of generalizations out there about when to post content: Mornings are better than evenings, Facebook sharing spikes on weekends, tweeting peaks on Fridays. Well, that’s all great in theory, since it documents average behavior of average audiences. But the point isn’t to get it right for someone else’s average consumer. Whether we’re talking about work or play, we all develop our own individual routines and habits. Discovering the personal quirks of your particular audience is a goldmine for programmers.

  How powerful is it? Several years ago, a U.K. content agency called Collective Content was helping a small management firm develop its programming strategy. Traffic to the client’s website waned on weekends. Nothing surprising there. But Collective Content began to notice an uptick in Sunday visits. “Sunday evenings had become the new Monday morning,” wrote Collective Content founder Tony Hallett. “Execs and other managers were getting a jump on the working week. This was a great time to feed their need for information.”

  At Wetpaint, we try to time content delivery to the distinct habits of our audiences, which vary from show to show. The very young (13-24) “Pretty Little Liars” audience likes a fast-paced, high volume content diet, so we serve them fresh stuff all day long. Older (55 percent are over 24) “Grey’s Anatomy” fans catch up on new content in the evening, just before they get into TV-viewing mode. So we freshen our “Grey’s Anatomy” pages late in the day. If you program according to someone else’s guidelines, all your best shots will miss your target. Instead, know your audience and you will hit the mark.

• Like it or not, people judge books by their covers. Design your packaging to resonate.
  In pre-digital days, content packaging discussions went like this: How long is the story? Do we need photos or illustrations? Today, fuhgeddaboutit. Digital editors have lots more arrows in the quiver. They can trot out old packaging chestnuts like long-form profiles or Q&As, or they can present content in slideshows, video, audio, polls, quizzes, clickable infographics, Spotify playlists, etc. The packaging options just keep growing — and so does the menu of social media megaphones you can use to trumpet the final product.

  Working all those levers in a way that engages your audience and exploits the strengths of each packaging and delivery option is an art and a science. BuzzFeed is one of its master practitioners. In its self-proclaimed rules for “How to Go Viral” (an infographic, of course), Buzzfeed recommends making lists (“9 out of ten Internet lists go viral”), using quizzes to appeal to user vanity (“People online love talking about themselves”) and staying relevant. We won’t quibble with the BuzzFeed rulebook. But in our own experience, packaging — like timing and just about everything else — is audience-specific. Fans of “Vampire Diaries” like to vote, for example; so we give them polls. And it works — to the tune of thousands of Facebook ballots click-cast for star Nina Dobrev in our sexiest legs poll.

• Test, test, test, for insights you can use.
  If you follow my Digital Quarters blog and Media Success newsletter you know I’m a nut for data. I firmly believe that the only way you can truly know your audience in all its wondrous eccentricity is to embrace testing with a gusto that borders on obsession. (Yes, I am seeing somebody about this.) Every shred of content you produce, from the glossy video to the tiniest tweet, is an opportunity to learn something about the consumers who visit your site. Don’t waste it.

  As you generate (via surveys, focus groups or, our favorite, A/B testing) and then sift through the mounds of data, trends will unfailingly emerge. These insights into user preferences help drive programming decisions at Wetpaint.

  Testing tells us that our “Bachelor” and “Bachelorette” fans revel in relationship gossip. Stories about dating, cheating, break-ups, pregnancy rumors, etc., perform four times better than episode-related news like recaps or sneak peeks. But within that relationship news subcategory, the two audiences diverge: Bachelorette watchers are scandalmongers. Bachelor fans are sentimentalists. We tailor our content accordingly. Testing has also made us smarter about social media. Facebook posts with photos work best when we’re promoting content for scripted (“Grey’s Anatomy”) or reality (“Bachelor”) shows. For breaking news, text-only posts do just fine. If the news is big, words are enough to catch the eye.

• The News Feed is the new EPG, and you must be present to win.
  The greatest opportunity of all in digital media is the chance to be relevant to your audience — not once a day, not on an appointment basis once a week, but minute by minute. To do that means being where your users are at all hours of the day — with exactly the right content at the ready. For consumers, it would be like the “Electronic Program Guide” that we’ve had on TV for the last 20 years — only it would be completely personalized and constantly refreshed. Quel fantasme, n’est-ce pas?

  Lo, there’s an app for that — and it’s the No.1 app on every smartphone. Yes, Facebook is the new Electronic Program Guide. Consumers check Facebook many times a day — usually just briefly, sometimes longer — to see “what’s on” in their lives. In fact, 23 percent of all time spent on smartphones is spent on Facebook mobile apps.

  For media companies, the great opportunity here is to cement your relationship with your audience by getting in their network — and then turning up the content they’ll enjoy to whatever frequency interests them. Do it right — with great audience targeting, insight, timing, packaging and testing — and you earn a position at the top of the News Feed hour after hour, day after day.

  Who understands this well in media? Of late, Yahoo’s Marissa Mayer has been talking about building a “daily habit” with consumers. Why not twice a day, or more? That is the power of presence in the feed. And it comes from meeting each member of your audience where she is.

Smart programming is like a good relationship. It requires paying attention, being responsive, trying new things. It’s hard work, but the rewards are enduring — a loyal, ongoing relationship with a growing audience. And that surely makes it worth the effort.

This is a guest post by Ben Elowitz (@elowitz). Elowitz is the co-founder and CEO of next-generation media company Wetpaint, and the author of the Digital Quarters blog about the future of digital media. Prior to Wetpaint, Elowitz co-founded Blue Nile.

While the Théâtrophone was an impressive invention in its day, the subscription model itself has a prolific and fascinating history of enabling innovation throughout the world. Subscriptions have helped companies pioneer new distribution models across a diverse set of business applications; all in the name of seeking efficient annuity revenue streams that outweigh the cost of production and distribution. From an end-customer “subscriber” perspective, the convenience of easy access or repeat consumption can greatly outweigh the incremental cost of subscribing.

Subscriptions have historically also found ways to take on greater social meaning through the signaling of a certain status by way of access to a secret society, social club or charitable organization. In the 1700s, by “subscribing” to become a benefactor to a charitable organization or society, individuals were able to achieve certain significance among their peers. Subscriptions to charity balls and full-seasons of theatre access were as much of a status symbol as they were convenient. Country clubs, yacht clubs, athletic clubs, fraternities and other private clubs have almost always been entirely member funded by way of the subscription membership model. Memberships, dues, donations and even tithing from the Catholic Church were achieved via scheduled “subscription” payments.

During the 18th century, the notion of subscription that we know today arrived when subscriptions to periodicals, magazines, books and theatre events became common. These subscriptions typically included delivery of the printed material and were sold for a specified number of issues or a period of time.

During the 1800s, the idea of pay-as-you-go subscriptions emerged to support the need for staple items such as heating oil, coal, milk, ice and even diapers to be delivered to your home. In Paris, a five-franc annual tariff was levied on all residents for their “subscription” to a hectoliter of drinking water per day.

Throughout history, we observe some interesting commonality across each of these examples. Whether we’re talking about subscriptions for the purpose of convenience, pay-as-you-go consumption, engagement or status, the underlying business driver has always been that subscriptions provide the ability to generate capital in the form of an attractive annuity revenue stream. From a financial perspective, companies that are able to generate a growing audience of subscribers producing predictable revenue streams are far more capital-efficient than companies that need to acquire, and then re-acquire, each customer interaction. (If you’re ever curious about this assertion, just ask yourself why so many insurance companies occupy the largest buildings across all major cities in the United States.² By definition, insurance is an annuity-based, subscription business.)

Fast forward to today. We are in the midst of yet another explosive expansion of subscription business models. From traditional media moving to digital media, to the rapid adoption of SaaS and cloud-based businesses, mobile and social products, applications and services are all careening toward some form of subscription-based offering. This is largely because the cost of developing and launching new businesses has declined to such an extent that it requires a very different level of up-front capital investment to chase these opportunities.

Why are subscription models everywhere today? The following intersection of trends is powering the recent appeal for subscriptions:

From the business perspective, there has always been a strong appeal in creating a predictable stream of revenue. Beyond that, the notion of maximizing lifetime value from existing customers is something that has always existed, but is now enabled through better visibility into activity. Traditional e-commerce companies like eBay have long focused on optimizing the “Triple A’s” — Acquisition, Activation and Activity. With today’s technology in place, we now have the ability to solve for all of these variables in a way that is not only more palatable to the end customer, but in many respects the optimization is couched in a way that is actually a benefit to the customer. (Think about the recent reminders you’ve likely received from your oil changer, dentist or even hair stylist that it is time for you to come back for your next appointment.)

Consumers have evolved a long way from the cable and magazine subscriber of yesterday as well. Today, consumers expect to have a range of choice in their offerings. They’ll commit to subscribe particularly if they have the ability to select from a range of feature/pricing options that best suit their own preferences.

There exists a psychological minimum. If a service is offered at a price level that feels low enough in relation to the marginal benefit that they receive, a consumer will subscribe. Conversely, they will elect to cancel if the marginal benefit wanes and is no longer worth the cost to continue subscribing. Managing the perceived value of any subscription product or service over time creates a relationship between the consumer and the service provider, each of whom seeks to maximize the value they are receiving from the other.

At the same time, the upfront capital investment required to launch a new enterprise service has declined to such an extent that it affords businesses a greater opportunity to test and learn as they go. As recently as 10 or 12 years ago, during the first dot-com boom, companies raised massive amounts of money not only to signal a coveted first-mover market position, but also to fund the huge amount of investment required to scale out a company. Today, we have cloud services and SaaS/PaaS offerings like Amazon Web Services and RackSpace.

The Web has become too fragmented to sustain ad-only revenue models.
Ten years ago, venture capitalists were inundated with companies seeking funding for ad-supported business models. Today, the Web is far too fragmented to support businesses seeking to aggregate massive ad dollars.

There has been a 100X reduction in the cost of software infrastructure within 10 years.
Here is an example: In just over 10 years, the “rented” application infrastructure model once offered by Kontiki (before it was called SaaS/PaaS) would have cost a customer approximately $100,000 per month to launch a business. Today, the same offering is delivered by Amazon Web Services for approximately $1,000 per month.

The cost of storage has plummeted 16X in the last 10 years.
Today, it costs you $0.085 per GB to store data. Ten years ago, it cost $1.39/GB. This decline in storage costs has created the opportunity for subscription-based file-sharing and backup companies like Box.net and Dropbox.³

The cost of Internet bandwidth “transit” has declined 75X in the past 10 years.
Entirely new business models have emerged due to the proliferation of inexpensive and ubiquitous broadband connectivity. This has allowed companies like Hulu and Netflix to have distribution to large markets at economically sustainable rates.⁴

Open-source software has eliminated the need for expensive licenses.
Ten years ago, companies aiming to deliver a service at scale were likely to sign up for expensive Oracle and Microsoft licenses. Today, startups have an impressive roster of free open-source software to choose from to run their operations.

On the Web today, the confluence of these trends is creating new markets and opportunities. The functional role of marketing has evolved to become increasingly data-driven.

Financial CRM allows the consumer to get what they want, and the business to provide a well-crafted migration path of high-probability options for cross-sell and up-sell options in the future. The management of this path for monetizing users post-sale has become an even more critical discipline for maximizing enterprise profitability than the sexy and creative brand-building efforts on which companies have traditionally focused.

All of these factors combined increasingly lead entrepreneurs to a similar conclusion. It is now far more efficient to offer products and services via subscriptions. Subscription pricing easily attracts customers, eliminates their purchase anxiety and, if designed well, keeps them happily paying over a longer period of time. Subscription models not only allow for attractive and efficient pricing, but also alleviate the need for a heavy-handed sales pitch. Ultimately, customers appreciate that they are in more control — always having the ability to upgrade their service, or to cancel and move on to something better.

Based in San Francisco, Dan Burkhart is the CEO and co-founder of subscription billing service Recurly, Inc. He was also an executive at eBay and NBC Internet.

Back? Okay. Here are a few more details I’ve gleaned from people familiar with Twitter’s plans for the app:

• SoundCloud and iTunes won’t be the only third-party services integrating into the app. Twitter would like multiple companies to participate, and has signed on at least one: Music video service Vevo will display its clips on the app, using a Twitter-built player.
• Those Vevo videos are also likely to be the only way you can hear full songs from acts you’ve heard of when you use the app. SoundCloud has the ability to play lots of music, but for the most part it can’t play songs owned by the big music labels and publishers; Apple can only offer up partial clips of the songs in its music stores. And music-only services that do have licenses for complete songs, like Spotify, generally don’t have the ability to play them on third-party apps.* So for now, at least, the emphasis on the app will be about sampling.
• While Twitter purchased music discovery startup We Are Hunted to design the app, this isn’t like Vine, where Twitter bought an existing product and added it to its portfolio. This one has been spearheaded internally by Kevin Thau, Twitter’s first business development head. Thau’s Twitter profile no longer identifies his job at the company, and he no longer has a LinkedIn listing, either. But I’m told he’s been running a sort-of-secret “skunkworks” for Twitter for some time, and this project is either the result or part of it.

Silky smooth.#NowPlaying @bullionness – Even Steven ♪ soundcloud.com/deekrecordings…

— Kevin Thau (@kevinthau) March 12, 2013

Now let’s zoom out and look at the big picture. Why exactly is Twitter building its own music app?

Perhaps because it agrees with Facebook: There’s a benefit in breaking up the feed.

That’s what Mark Zuckerberg and company did last week, when they offered users a chance to look at everything Facebook had to offer, or to slice it up into smaller streams. Now you can go to the site and just look at your friends’ pictures, or just check out what games they’re playing, or just find out what music they like.

When the music app launches, Twitter will be offering its own take on the idea. You’ll still be able see what music your friends talk about on the main service. But if you want your music recommendations without Pope jokes, Google Reader obituaries or whatever else is filling up your stream, you can use the app.

The analogy isn’t perfect, because the Twitter music app won’t just be what your friends care about, but what other people on Twitter are listening to as well. That’s where We Are Hunted’s design skills and discovery algorithms come in. But close enough.

It’s possible that Twitter thinks the app may help it round up eyeballs it wasn’t reaching before, but my gut is that if the app works, it’s simply going to segment Twitter’s existing audience into multiple containers.

That’s not necessarily a bad thing, businesswise. You can imagine all sorts of advertisers that would be interested in participating in a music-only app. Like Pepsi, which did a big music promotion with Twitter last summer.

And if that works with music, why not carve up the feed into other strips? Easy enough to imagine all sorts of takes on the idea — either by medium (TV, movies, photos) or topics (politics, sports, gossip).

Or maybe Twitter will be resistant to atomizing its audience, and will only want to do this a few different ways. It would be great to get some comment from Twitter itself, but they’re profoundly uninterested in providing one. So for now, speculate away, and we’ll come back when we have more.

*Note that when you want to hear a Spotify song via Facebook, for instance, you still have to open the Spotify client on your desktop before you can listen.

At this point, there is no existing and widely used social network which can effectively manage the volume of photos that will result from accessible and wearable social tech.

There is a glaring problem with current social networks, specifically those that deal in photos, which is demonstrated by this funny picture I saw the other day comparing a teenage girl with Neil Armstrong. She went to the bathroom and took 37 pictures of herself in the mirror. He went to the moon and took five pictures of the universe. Over time, people change their habits because of the technology they have available to them and because of changes in social mores.

My Instagram feed is busy enough now at a time when, in order to take a picture, people still need to actively push a button on a device that otherwise resides in their pockets. When these frequent photographers get their hands (or heads) on a device that enables them to constantly share pictures of everything that interests them without them having to lift a finger — well, you see the problem.

At this point, there is no existing and widely used social network which effectively presents the information that will come along with those pictures.

When there is too much information, aggregators and hosts look for ways of slowing down the stream. Take Facebook’s use of Edge Rank, for example, as a way to fight the flow of information. You don’t see every post from each of your friends when you look at your Facebook News Feed. Instead, Facebook assigns a rank to each item, or “edge,” which would be visible to you and displays only a fraction of them.

However, using this form of social sieve comes with a cost: Information gets buried quickly. The assumption that “if it’s old, it’s not relevant” is not accurate. Information about your significant other doesn’t lose value over time. What your room or house or car looks like does not lose actuality over time. Who wants an “edge” (if we are to use Facebook parlance) — on which they spent time and energy — to simply disappear, buried under the mountains of data generated every day?

The next generation of social networks will enable users to easily digest and access large amounts of information.

I say next generation, and not new iteration, because existing social networks would need to rebuild themselves from scratch in order to do this, since it’s such a drastic change in how social information is curated. This is not an issue of redesigning the flow of a feed, it requires looking at information from a different angle. Structures suitable for social have existed among us for a while in different forms. For example, without Spotify’s or Netflix’s structure of genres, all you would find is a long list of recent tracks and films.

Social networks need to embrace pictures as primary user data points.

Technology like Google Glass will enable and encourage users to take many more pictures than they do now. Developers need to take this into account when building the next-generation social networks. Pictures are not momentary events which lose value over time. Instead, we value older photographs over newer ones. Why hide them behind a wall of recent information which some algorithm deemed more “relevant”? The next-generation social network will need to understand and support this. Even someone without $1,500 glasses can see that this is what we all should be striving toward.

Jared Barol connects We Heart Pics, a photo-based social network, with the outside world. You can reach him at jared@weheartpics.com or by following @jbarol on Twitter.

There were, of course, the questions on his famously huge Facebook investment many years ago, and why he’s put money in Y Combinator to spur startup innovation.

But it’s clear from his mainstage interview at the SXSW interactive festival in Austin this morning that high-profile Russian investor Yuri Milner of DST Global has been striving to think much bigger thoughts of late.

While he’s gotten a lot of attention for his big bets in the social networking site, as well as with Twitter, Spotify, Airbnb and many others, he’s slowed his investing in the U.S. considerably to focus more on what he and many others in Silicon Valley are calling “moon shot” ideas.

“Somehow, we have lost interest in big ideas,” said Milner, in an onstage interview with Vanity Fair contributing editor Bethany McLean about shifting away from thinking — which he has funded, in part — that has gotten more short-term and pragmatic. “I think we still have a destiny as human beings.”

That has included starting up his Fundamental Physics Prize, which has now become the priciest academic award, last year. And, more recently — with Facebook co-founder Mark Zuckerberg, Google co-founder Sergey Brin, and Genentech mogul and Apple Chairman Art Levinson, among others — the launch of the Breakthrough Prize in Life Sciences Foundation.

As Mike Isaac wrote when that initiative was announced less than a month ago:

“The first round of prize recipients includes 11 scientists from a range of research disciplines, including studies in genetics, cancer research and neural behavior. Each of the 11 prize winners will receive a $3 million award for their work, and Brin, Zuckerberg, Milner and the rest of the sponsors have agreed to a five-year commitment to awarding prizes.”

Milner, who was a physicist in his early career, said onstage that he has been disheartened to see that not enough younger people choose to go into fundamental science anymore. Thus he is aming to make it more attractive via his prizes.

“We don’t have enough heroes who are admired by a large portion of the population due to their scientific achievements,” he said, noting that it will require rewarding individuals in a “disproportionate manner.”

Still, in the Q&A session, the crowd in the Austin Convention Center wanted to know mostly about more earthbound questions, such as what tech company would last 100 years, as IBM has.

According to Milner: Google, Facebook and Wikipedia, due to network effects.

Another attendee wanted to know what he thought it takes to be an entrepreneur these days.

“It’s almost a heroic effort, and kind of goes against set ways of doing things,” answered Milner.

Then someone wanted to know how the political arena could be similarly transformed.

“That, I don’t know,” said Milner.

Moon shot, indeed.

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What are you going to do with it?

The legendary music producer, executive and headphone marketer hasn’t spelled out all of his plans just yet. We’ll have to wait until later this year to see exactly what he’s going to roll out to compete with the likes of Apple, Spotify, Pandora and perhaps Google (x2).

But last month at D: Dive Into Media, he gave Walt Mossberg a pretty good sense of what he’s working on — a highly curated service, as opposed to the robot+friends approach most of his competitors use — as well as a history lesson on the rise and fall of the music industry.

Here’s the entire interview:

]]> http://allthingsd.com/20130306/jimmy-iovine-explains-his-60-million-music-plan/feed/ 0 http://allthingsd.com/20130305/why-google-thinks-two-music-subscription-services-are-better-than-none/ http://allthingsd.com/20130305/why-google-thinks-two-music-subscription-services-are-better-than-none/#comments Wed, 06 Mar 2013 05:58:14 +0000 Peter Kafka http://allthingsd.com/?p=300724 Alrighty. Time to start sorting out what Google is up to with music. And why it thinks it may make sense to launch two different music subscription services.

Spoiler alert! No one outside of a handful of Googlers really knows.

But we can make some educated guesses:

As previously reported, Google’s Android unit wants to launch a subscription service.

This one’s a no-brainer. Music is a key part of mobile, and Andy Rubin doesn’t want to cede that to outsiders like Spotify and Pandora. (Android’s effort to break into music via a download store and a scan-and-match locker have had little take-up.) And this one is relatively easy for music owners to sign off on, since they’ve already bought into the Spotify model — free ad-supported music that pushes users into a $10-a-month mobile offer.

As previously reported, Google’s YouTube unit wants to do … something with a subscription service.

At a minimum, YouTube is trying to collect the rights to sell music, in both audio and video form, via subscriptions. But it hasn’t told music owners what it actually wants to do with those rights, and it hasn’t shown outsiders a prototype of what it’s working on.

This one also has some logic to it, but it’s not quite as clear-cut. More on that shortly.

Before we get there, though: Regardless of what you’ve read about timelines (“imminent,” or “Q3,” or “2013,” or “sometime” are all options), none of this can happen if Google doesn’t get deals with the music owners.

Right now, as Billboard reports, Warner Music Group has signed on to both ideas. I hear that Universal Music Group, the world’s biggest music label, is interested, but is at least a month or so removed from inking a deal. But industry sources say that Sony Music is resistant to all of this. For now.

Even if Google gets all three of the big labels on board, it’s not home free. It needs buy-in not just from the people who own music, but from the ones who own the publishing rights — the underlying compositions for each song.

Sometimes those rights are owned by the big-three labels, but sometimes they’re not. And particularly outside the U.S., Google will need to make peace with the agencies that represent music owners. That could be tough, given that its relationship with some of them is frequently fractious.

So there are lots of ways this could get slowed down/crippled/derailed.

One encouraging sign that all of this could get done is the fact that Google is no longer insisting that music owners negotiate their deals with both an Android team and a YouTube team. Instead, YouTube content head Robert Kyncl is representing the search giant in all of its talks — though the deals are still going to get done separately.

Small beans? Sure. But at least it shows the Googlebots are beginning to grok the way the humanoids in the content business would like to work.

For argument’s sake, let’s say Google does get all of its deals done. What next?

The Android scenario is relatively easy to map out. Google has yet to show a competence for selling content, but its huge installed base will still make it a serious contender. And that will be an issue not just for Spotify, but Pandora and Apple and anyone else with a vested interest in digital music. At a minimum, it could make Android phones more attractive and/or harder to switch away from. And that may be enough to make Rubin happy.

The YouTube version is harder to nail down. As many people have pointed out, YouTube already functions as the world’s biggest digital music service. That’s in part because of the official music videos it serves up in conjunction with Vevo, the video company it is set to invest in.* But mostly because of all the music that its users upload to the service, with homemade visuals and without permission, which ends up staying there with the blessing of the music owners.

So why does it need to sell music? As Eliot Van Buskirk notes, all of that free music may be the reason YouTube is talking about subscriptions. Offering a paid version may make the music owners more likely to keep their free stuff up there, too.

Background: In olden days, music owners got paid a small fee every time someone played their stuff on YouTube. All those small fees added up, which was nice for the labels, but a real problem for YouTube, particularly when it didn’t have much of an ad business to absorb those costs.

Fast-forward to today: Now the music owners get a cut of the ads YouTube shows when it plays their songs. Much better for YouTube, but music owners grumble that they’re not making enough. And their deals are all up for renewal right now.

Subscriptions can solve problems for both sides. YouTube can tell music owners that it’s providing a funnel to encourage people to actually pay for music. And the music owners can let YouTube hang on to what may be its most valuable asset, which it can keep offering for free.

I don’t believe music subscriptions indicate a real change in Google’s plans for YouTube, though. As far as I can tell, Google fundamentally sees the site as a giant advertising platform, and I don’t think a new music product changes that. Just like the talks YouTube is holding with other content owners about other subscriptions.

I also don’t see how YouTube’s audience, which skews very young and probably hasn’t bought a thing from Google in their lives, is likely to pay for any of this stuff.

But if subscriptions — or even the idea of subscriptions — help convince YouTube’s partners to keep supplying their stuff to the site, then that’s probably good enough to keep everyone happy.

*As far as I can tell, none of the subscription talk affects Google’s plan to renew its Vevo deal and put money in the site. The reason the Vevo deal hasn’t been finalized, I’m told, is because its closing has always been contingent on Google wrapping up other deals with the labels, including subscription rights, as I reported earlier.

]]> http://allthingsd.com/20130305/why-google-thinks-two-music-subscription-services-are-better-than-none/feed/ 0 http://allthingsd.com/20130226/for-the-first-time-since-napster-music-sales-are-growing/ http://allthingsd.com/20130226/for-the-first-time-since-napster-music-sales-are-growing/#comments Tue, 26 Feb 2013 13:45:52 +0000 Peter Kafka http://allthingsd.com/?p=298386 The last time music was a growth business was 1999 — back when people bought millions of Britney Spears CDs, and GeoCities was the third-most popular Web property in the world. You know what’s happened since then.

But music’s slide may have finally stopped. Last year, recorded-music sales inched up 0.3 percent worldwide, to $16.5 billion, according to industry trade group IFPI. That’s the first time global sales have increased since the Napster era, and it echoes bumps we’ve seen earlier in the U.S. and other markets.

If the growth sustains, it means that the predictions we’ve been hearing for a decade and a half have finally come true: Digital sales are increasing fast enough to outpace the decline in physical. Last year, digital grew 9 percent and accounted for 34 percent of revenue.

Some of that growth comes from the rise of subscription services like Spotify and Deezer, which now represent more than 10 percent of worldwide digital revenue. But digital sales are still primarily about iTunes and download sales, which account for 70 percent of the total. Sales on iTunes have been flattening for some time in the U.S., but as Apple expands internationally, its numbers keep growing.

And just like last year, the music industry is also a synonym for the Adele industry. Just like last year, her “21″ album was the world’s best-seller, moving 8.3 million units (this would have been a pretty good number in 1999, too). Taylor Swift’s “Red” came in second with 5.2 million units. Brit boy band of the moment One Direction had the next two spots, with total sales close to nine million.

]]> http://allthingsd.com/20130226/for-the-first-time-since-napster-music-sales-are-growing/feed/ 0 http://allthingsd.com/20130222/google-said-to-be-eyeing-spotify-style-streaming/ http://allthingsd.com/20130222/google-said-to-be-eyeing-spotify-style-streaming/#comments Sat, 23 Feb 2013 04:50:01 +0000 Ethan Smith and Amir Efrati http://allthingsd.com/?p=297551 Google Inc.’s Android unit has been negotiating with music companies to start a paid subscription music-streaming service akin to Spotify AB, according to people familiar with the matter.

Separately, Google’s YouTube video website is trying to obtain licenses from music labels to start a paid subscription service for music videos and potentially also for audio-only songs, these people said.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20130222/google-said-to-be-eyeing-spotify-style-streaming/feed/ 0 http://allthingsd.com/20130221/big-music-says-google-isnt-cracking-down-on-pirate-sites-after-all/ http://allthingsd.com/20130221/big-music-says-google-isnt-cracking-down-on-pirate-sites-after-all/#comments Thu, 21 Feb 2013 13:50:55 +0000 Peter Kafka http://allthingsd.com/?p=296918 Six months ago, in the wake of the SOPA/PIPA debate, Google made a peace offering to the Big Media companies: It said it would try to make pirate sites harder to find in its search results.

That’s not happening, says the group that represents the big music labels. A new report from the Recording Industry Association of America says it’s as easy as ever to find links to pirate sites via Google search, and that it’s often easier than finding it from approved outlets like Spotify or iTunes: “We have found no evidence that Google’s policy has had a demonstrable impact on demoting sites with large amounts of piracy.”

You can see the full report below; I’ve asked Google for a response. In the meantime, note that Google’s initial offer never made any ironclad promises about stamping out piracy, or even booting pirate sites from its results: “Sites with high numbers of removal notices may appear lower in our results. This ranking change should help users find legitimate, quality sources of content more easily…” (emphasis added).

Update: Here’s the Google response:

“We have invested heavily in copyright tools for content owners and process takedown notices faster than ever. In the last month we received more than 14 million copyright removal requests for Google Search, quickly removing more than 97% from search results. In addition, Google’s growing partnerships and distribution deals with the content industry benefit both creators and users, and generate hundreds of millions of dollars for the industry each year.”

Google report card 2013 final _1_

]]> http://allthingsd.com/20130221/big-music-says-google-isnt-cracking-down-on-pirate-sites-after-all/feed/ 0 http://allthingsd.com/20130124/listen-up-beats-boss-jimmy-iovine-comes-to-dive-into-media/ http://allthingsd.com/20130124/listen-up-beats-boss-jimmy-iovine-comes-to-dive-into-media/#comments Thu, 24 Jan 2013 18:56:22 +0000 Peter Kafka http://allthingsd.com/?p=288284 We’re just a couple weeks away from our D: Dive into Media conference, but there’s always time to add an icon to the lineup: We’re very pleased to announce that music kingpin Jimmy Iovine will be joining us onstage.

Iovine is the studio engineer turned producer turned label executive turned headphone impressario, and he’s worked with everyone from Bruce Springsteen to U2 to Eminem to Lady Gaga. Current titles: Chairman, Interscope Records, and co-founder, Beats By Dre.

Those credentials alone would make him a fascinating interview, but now he has added another line to his resume: He’s trying to create a digital music subscription service with mass market appeal.

Lots of folks have tried this, but only Spotify seems to have had some success so far. Iovine thinks he can do much better, with a secret sauce that has something to do with a lot of curation and hand-holding.

That kind of confidence in your own taste-making ability runs counter to a lot of today’s digital ethos, which holds that people will figure out what they want to hear (or watch, or whatever) on their own, or with the help of friends, or with code. And Iovine thinks that’s bunk. So this should be a fun conversation!

And we’ll have a bunch of them next month. Here’s the lineup of speakers for Dive, which we’re holding Feb. 11 and 12 at the Ritz-Carlton in Laguna Niguel, Calif: Sony Entertainment CEO Michael Lynton, Hearst Magazines president David Carey, Google chief business officer Nikesh Arora, Facebook partnership vice president Dan Rose, HBO co-President Eric Kessler, Live Nation CEO Michael Rapino, CollegeHumor co-founder Ricky Van Veen, Vice Media co-founder Shane Smith, Intel media head Erik Huggers and Samsung media head David Eun, Netflix content chief Ted Sarandos (and guests), New Republic owner Chris Hughes, USA Today publisher Larry Kramer, Dish Network founder Charlie Ergen, and Microsoft Xbox executives Yusuf Mehdi and Nancy Tellem.

Want to join them? Head here, and we’ll see you soon.

]]> http://allthingsd.com/20130124/listen-up-beats-boss-jimmy-iovine-comes-to-dive-into-media/feed/ 0 http://allthingsd.com/20130116/youtubes-reign-threatened-by-a-spotified-revolution-and-other-reel-truths-for-video-in-2013/ http://allthingsd.com/20130116/youtubes-reign-threatened-by-a-spotified-revolution-and-other-reel-truths-for-video-in-2013/#comments Wed, 16 Jan 2013 23:50:29 +0000 Mo Al Adham http://allthingsd.com/?p=286162 From the continued growth of online video to Socialcam and Viddy’s up and down spiral, 2012 was a crazy year for the world of digital video, and I expect it to take a turn for the insane in 2013.

In the past year, we’ve seen several niche social media networks blow up around images, music and ideas — Instagram, Spotify and Pinterest. But what happened in the digital video space? Many mobile video start-ups entered the scene this year, yet despite the increasing demand among consumers for Web video, none of these companies could crack the code on the most critical element of digital video: Discovery. But as content multiplies at an increasing rate, 2013 will finally be the year that the future becomes clear on the next advancement in video.

• Online video consumption hits a historic inflection point, doubling in 2013
  We are at the threshold of the second digital video revolution spurred by better and more affordable hardware and connectivity. Smartphones are in the hands of nearly one billion across the globe, and tablets, or “the second television,” are blowing up. The iPad alone has climbed the ladder of adoption three times faster than the iPhone and Gartner predicts tablet sales will hit 13 million in 2012, with this number expected to triple by 2016.

  Couple the rapidly increasing penetration of tablets and smartphones with LTE connectivity, and it’s pretty much guaranteed that consumer appetite for video will grow, transforming mobile video consumption into a daily habit. This will ignite a digital video revolution that mirrors the shift from dial-up Internet to broadband. The revolution that happened on desktop years back is about to transpire on mobile, as 2G and 3G are traded up for LTE networks on smartphones. Even with its incredible user adoption, the broadband’s impact on desktop video will pale in comparison to the more accelerated mobile video craze that’s about to kick off.

  In the last three years we’ve seen about a 140 percent increase in the amount of video content viewed online. comScore’s Video Metrix from April 2009 — when total video views hit 17 billion — sharply contrasts with 40 billion videos viewed across Web on November 2012. As consumption of video continues its march from the living room and desktop to smartphones and tablets, I predict that demand, production and consumption of video will double, and video views will hit 80 billion per month by the end of 2013.

• A newcomer will challenge YouTube for the other half of video consumption
  Declining hardware and distribution costs coupled with a steady increase in consumer demand for video has provoked a huge surge in production of pro and semi-pro video. Because of this increase in more professional-grade video, we have seen a major shift in where people are going to find digital video content.

  People are still watching just as much video — but they are now looking to different sources on the Web. In the past five months there has been a 34 percent drop in the total volume of video consumed on YouTube compared with the rest of the Web. YouTube views peaked in June 2012 at 18.3 billion, but have since declined to 12 billion on November 2012. comScore’s Video Metrix measured total Web video views in June 2012 at 32.9 billion; fast-forward to November 2012 and total video views across the Web hit 40 billion. While YouTube lost about six billion views within that five-month period, the other half of Web video shot up by 13 billion. As online video fragmentation increases in 2013, so will the need for a newcomer that aggregates YouTube and the second half of the Web’s video under one roof.

• TV networks and the top content creators will be forced into unchartered distribution and economic models
  Big media has seen the rapid shift toward Web and mobile consumption, and sites like Discovery.com, Disney, MTV and CNN continue to produce more online content. Now the real challenge becomes the fight for more audience, monetization and market share. These content creators and their advertisers won’t be satisfied with the results they get within their own silos, and will start looking for a way to expand their reach while still maintaining control over their videos.

  We have seen that relying on social networks like Facebook and Twitter for viral spread is not enough. At Twitvid, we saw major brands with over five million followers post videos to Twitter and receive only a few thousand views. Even major television networks such as CBS and ABC are struggling with this issue. ABC’s Modern Family and Glee, which previously only distributed episodes to Hulu, are now opening distribution to anyone as the effort to reach viewers continues. But no one has found a sustainable combination of large audiences and ability to drive traffic and revenue back to content creators.

  In 2013, studios and networks will be eager to experiment with new disruptive models, and expect to see a new breed of startups that can cater to their desire for both large audiences and strong control over content.

• All of this will lead to a new opportunity in video discovery that resembles something more like Spotify and less like Instagram
  Digital video is currently plagued by the lack of any real means of video discovery capable of meeting the needs of a social, mobile world. I’m confident that in 2013, someone will solve video discovery through social content aggregation — not just from YouTube, but from the exploding long-tail of semi-pro video. Many have pointed to an “Instagram for video” as the cure-all for the video space’s current state of disarray. But this is much bigger than that. Instagram focuses on user-generated content, which as Socialcam and Viddy proved this year, is not the way to win in the long term. Digital video is insanely larger than just user-generated content. The long-tail of video content is where consumer eyes draw the brands, and ultimately, revenue.

  In the same way that Spotify, Instagram and Pinterest successfully solved discovery for music, pictures and ideas, new models will emerge aiming to figure out a way to tap into this massive new world of video and somehow find a way to weave it all together.

What other predictions do you see for the world of digital video in 2013? Please submit your predictions in the comment section below.

Mo is the CEO and Founder of Telly, a social video network for discovering and sharing the best videos. You can follow him on Twitter @maladham and on Telly.

]]> http://allthingsd.com/20130116/youtubes-reign-threatened-by-a-spotified-revolution-and-other-reel-truths-for-video-in-2013/feed/ 1 http://allthingsd.com/20130114/special-projects-head-shakil-khan-moves-on-from-path/ http://allthingsd.com/20130114/special-projects-head-shakil-khan-moves-on-from-path/#comments Tue, 15 Jan 2013 07:30:17 +0000 Kara Swisher http://allthingsd.com/?p=285399

Shakil Khan — the well-known head of special projects for the popular Spotify music service, who took the same kind of job at Path last year — is departing the personal social networking site.

He will remain a special adviser, and is also an investor in the San Francisco-based startup.

The globe-trotting Khan (pictured here), who arrived at the startup only last March, had worked with Path on a number of efforts, especially in expanding its international presence. Path recently hired Shindo Kimihiko to turbocharge the company’s efforts in the fast-growing Asian markets.

A Path spokeswoman confirmed the departure after I inquired, and the London-based Khan also emailed me this statement:

When I joined Path, the company was just 20 people, only available in a handful of languages and the resources were mainly U.S.-focused. During my time there, we launched in 17 languages, established great teams in marketing, localization, growth and international and doubled the number of staff. As more than 50 percent of Path’s usage is now international, I’d say that my original objective of helping Path to think in more international terms and capitalize on global opportunities is done :) Moving to the next stage of Path’s growth, I remain as a Special Advisor to the company, as well as continuing to spend time with my other investment companies, including Spotify, SecondMarket, Summly, Blackjet and a couple of exciting startups at incubation stage.

Path recently announced that the service — which has raised $55 million in funding — had five million users.

]]> http://allthingsd.com/20130114/special-projects-head-shakil-khan-moves-on-from-path/feed/ 0