That’s good for Sony, the people who paid the bill for “Dragon Tattoo,” right? Nope. Terrible, says Sony.

The studio is livid that the New Yorker is running Denby’s review today, more than a week ahead of a Dec. 13 embargo. Why does the studio care? If you want a good explanation of modern-day movie marketing and the push-pull between filmmakers and film reviewers, check out this lucid explainer from NPR’s Linda Holmes.

But for everyone else, this won’t matter at all. New Yorker readers (and now, drive-by visitors as well, since the review has been placed in front of  the magazine’s online paywall) will see the review, and a larger group of people will have a vague idea that the New Yorker likes it. That’s about it.

And that’s the moral for folks like myself in the technology-news-industrial complex, who spend way too much time thinking about, fighting with and cursing embargoes. This stuff can matter a lot (sometimes) to us, but that’s really only because we decide to agree that it matters. Readers don’t care at all.

I’d spend more time explaining this, except that if you care about this at all, you’ve already read many boring essays about it — perhaps even today! And I can’t tell you that I’m swearing off embargoes, because I can’t — I worked with three of them last week, have probably at least one more embargoed story coming this week and, I’m sure, many more down the road.

But this is a nice reminder that every time I do deal with one of these, it almost always means I’m not spending time on something geniunely interesting. Like news no one else is writing about, or a fresh take on something everyone else has already written about. Or even seeing a good movie.

You can take the Netflix CEO at face value, and read his explanation — and his introduction to Qwikster, his new DVD-only business. You can and should also read Benchmark VC Bill Gurley’s explanation about the company’s licensing deals with Hollywood, and how the move may give Netflix more money/breathing room.

(Gurley’s explanation is particularly resonant in the wake of Netflix’s Sony outage this summer, where the studio was able to pull its movies off the service because Netflix’s subscriber totals had hit a certain level. Perhaps this move solves that problem — temporarily, though, because Netflix will lose access to Sony movies again if/when its Starz deal expires in February.)

Many Netflix users don’t care about the rationale, and flocked to the company’s blog post to vent. When they did, they found … Reed Hastings, waiting for them in the comments section, fielding many of their questions/complaints/rants.

The Internet figured out right away that Netflix doesn’t own the rights to the Qwikster Twitter handle (Meet Jason Castillo, world! He is tired and/or high). But the fact that Hastings is engaging directly with (some of) his audience via Facebook (where he’s now a board member) seems at least as interesting to me.

Definitely worth scrolling through some of Hastings’s back-and-forth with users. (Note that, because it’s Facebook, he can at least be reasonably sure they are who they say they are, as opposed to a random Internet commenter or Twitter troll.)

Some of the exchanges show Hastings earning a couple points of goodwill for wading into the scrum. Many more of them show the limits of public outreach — Hastings can engage with users all they want, but he can’t tell them what they want to hear.

And there’s at least one comment from Hastings that tells you, whether he meant to do so or not, what he really thinks about Qwikster, its service and its branding: “Old Fogey discs will last a long time. Part of the reason we setup Qwikster was so it last a long time too, focused on DVD.”

That’s the question posed to Netflix content boss Ted Sarandos by News Corp. digital boss Jon Miller today at a Paley Center event in Los Angeles.

Sarandos’s response is basically a shrug: “Being able to precisely forecast and predict the behavior of that many people on fairly radical change is something that we’ll get better at all the time.”

Miller didn’t press Sarandos, and Sarandos didn’t evince any sense that the company had second thoughts about its price hike, which he argues really isn’t a price hike.

Wall Street is not nearly as sanguine, however, and has chopped NFLX shares down by 18 percent today, to $170. Recall, again, that NFLX was nearly at $300 earlier this summer.

And here I should point out that News Corp., Miller’s employer, also owns this Web site. Other disclosures, which Miller noted in his introduction: Miller is a board member of Netflix competitor Hulu, and News Corp. has content deals with Sarandos and Netflix.

So: Many conflicts here! But this is still a very good, very timely interview. Runs about 40 minutes, and well worth watching if you want to dive deeply into both Netflix and the digital media business.

If you’re looking for Sarandos’s take on the end of the Starz deal, by the way, that kicks in around the 20-minute mark. Very short version: “Buyers and sellers disagree on values and prices all the time. And that’s all that happened,” Sarandos says, adding that his plan is to “spend an enormous amount of money on things that get watched an enormous amount of time.”

That doesn’t jibe with reports that the deal broke down because of Starz’ insistence that Netflix institute a new pay tier for its content. But maybe someone can ask about that in a different interview.

Netflix says the subscriber cut won’t affect its financial guidance. In a brief note, it defends, again, its reasoning:

The strategy behind the split of our services is four-fold:
(1) to create a dedicated DVD rental division that takes pride in great execution and maximizes the opportunity for disc rental over the coming decade;
(2) to enable us to improve our global streaming service even more rapidly, because it is not meshed with a domestic DVD business;
(3) to enable us, with the growth in revenue, to license more streaming content and thereby improve our streaming service even more;
(4) to remain very price aggressive, with $7.99 per month for unlimited streaming of a huge library of TV shows and movies, and $7.99 per month for unlimited DVD rentals, 1 out at-a-time.

We know our decision to split our services has upset many of our subscribers, which we don’t take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come.

In July, after Netflix announced the price hike (for customers who want both DVD and streaming Web video services), it said that it expected a bump in Q3 revenues as customers adjusted to the pricing, but that its growth trajectory would resume by the end of the year.

But while the price hike kicked off a torrent of complaints on the Web, CEO Reed Hastings said the company had expected to hear more carping: “We knew what we were getting into, we tried to be as straightforward as we could, and that has worked out very well for us.”

Netflix shares, which had kissed $300 earlier this summer, were down to $208 by yesterday’s close. Now they’re down another another 16 percent, to $174, in premarket trading.

MailChimp, the Atlanta-based email marketing service, has bought TinyLetter, which is well-known entrepreneur Phil Kaplan’s most recent start-up.

While MailChimp focuses on more commercial clients — including AllThingsD — who want to send email newsletters and manage subscriber lists, TinyLetter is aimed at individuals who want similar services.

In an interview this morning, Kaplan said he sold the nine-month-old company, which he self-funded, in order to take advantage of MailChimp’s infrastructure and scaling capabilities.

He will remain an adviser to MailChimp, which now has about 950,000 newsletters, with about two billion emails sent monthly. It has 100 employees.

In contrast, TinyLetter has about 30,000 newsletters and sends out about one million emails a month.

Kaplan would not disclose terms of the acquisition deal, even though I asked him nicely several times. But the TinyLetter brand will remain.

As All Things Digital reported last week, Groupon filed an amended S-1 IPO offering this morning, in which it deemphasized a controversial accounting method.

Instead of a metric called ACSOI, or adjusted consolidated segment operating income, the Chicago-based social buying company noted that gross profit was the “important indicator for our business, because it is a reflection of the value of our services to our merchants.”

But the dreaded ACSOI — which leaves out important costs of marketing — is not completely gone. In its filing, Groupon said it would use it internally, noting:

We exclude those costs because, unlike our other marketing expenses, they are an up-front investment to acquire new subscribers that we expect to end when this period of rapid expansion in our subscriber base concludes. While we track this management metric internally to gauge our performance, we encourage you to base your decision on whatever metrics make you comfortable.

In other words, for the love of Pete, please ignore ACSOI completely.

Groupon also included new financials in its filing for the quarter, with a 36 percent increase in revenue to $878 million from the previous quarter and double a year ago. But its loss was $102.7 million, compared to a loss of $35.9 million a year ago.

The company also reported that its subscribers grew from 10.4 million last year to 115.7 million now.

Costs are also lower by eight percent in the new quarter, with Groupon spending $165.2 on marketing to new subscribers, compared to $179.9 million in the previous one.

The filing with the Securities and Exchange Commission is a critical one for Groupon, whose public offering has been mired in questions about how it accounts for its financial performance.

Of particular concern: ACSOI, which is a number that does not include important costs, such as critical online marketing expenses to attract new customers to Groupon.

Such accounting is called non-GAAP (generally accepted accounting principles).

In 2010, Groupon reported that it lost $413.4 million using standard accounting practices. When it excludes some costs from its calculations using ACSOI — including online marketing expenses to attract new customers — it recorded a profit of $60.6 million in 2010.

The new results were stronger, to be sure. Such growth is important, especially given investor scrutiny of Groupon in the current economic turmoil.

As I wrote last week:

And, indeed, questions from the media, investors and, most importantly, the Securities and Exchange Commission about how Groupon accounts for its revenue and profits using ACSOI were swift and decidedly negative.

Hence, a furious debate — along with much internal tension — within Groupon about what to do. At first, in another S-1 amendment, the company backed away from using ACSOI as a “valuation metric.”

But that was apparently not enough for the SEC or anyone else, so Groupon’s top managers finally thought it best to rid itself of the term entirely.

Presumably, with a cleaner S-1, Groupon can concentrate on a whole new set of issues around its IPO, such as the tumultuous state of the markets.

Here’s a handy helper for those following the fate of the Hulu premium online video service, whose noisy efforts to sell itself have gotten a lot of attention of late:

“In preliminary talks” = “hawking itself to one of a half dozen big moneybag tech companies who will visit with Hulu’s bankers and management to see its presentation at Morgan Stanley’s office in Century City in Los Angeles.”

Last Friday, for example, that meant a look-see for Microsoft execs, to show the software giant the story of how paying top dollar for the popular Hulu would be a great investment.

This week, sources said, Yahoo will get the expected gander at the books too, among the other companies targeted by Hulu as part of a sales process in its very early stages.

Among those companies on the short list, sources said, along with Microsoft and Yahoo are: Google, Verizon, AT&T and Amazon.

None of these should come as a surprise, since they all have a big interest in the digital distribution of content business.

Google is perhaps the most interesting and difficult of the group, due to both its massive YouTube unit and the even more massive interest by government regulators about its disturbing massiveness.

Amazon is the company that seems most suited as a Hulu buyer, since it already makes its business selling and distributing content. In addition, Hulu CEO Jason Kilar was a former exec — bringing a certain level of familiarity and presumably much less of the grumpy disgruntlement that he experienced with Hulu’s current media giant owners.

Microsoft seems like the longest shot and least enthusiastic, although it certainly could afford it.

As for Yahoo: Good lord, it needs something sexy to tell weary investors.

Not in the initial round, but other possible acquirers Hulu is targeting: Facebook, Netflix, Samsung and Liberty Media.

And definitely not among those kicking the tires: Disney, News Corp. and Comcast, the trio of partners who own Hulu, along with Providence Equity Partners.

The big question, of course, is whether media-focused Apple — a notorious buyer of almost nothing — would be interested in Hulu.

These blind dates with the best possible buyers will presumably give each insight into Hulu’s business and give Hulu information on what they are looking for.

Sources who have heard the pitch said Hulu is positioning itself as an inevitable competitor to cable, which seems an odd position to take, unless it can get regular access to the kind of top-drawer content that consumers want.

And that will be the most important issue for anyone buying Hulu: The time and terms of rights to the television and movie content on the site, which has been a critical part of its success.

Buyers I have interviewed said Hulu has to offer at least an 18-month license for its content and a pile of rights to hit shows to differentiate itself from competitors.

As Peter Kafka wrote, Hulu buyers would indeed get exclusive content, but with strings attached.

He also noted that the latest content licenses for Hulu’s owner/partners — Disney’s ABC and News Corp.’s Fox — have recently been completed, deals that will stay intact if Hulu is sold.

Unlike Netflix, which has had to pay top dollar for a small pile of premium content while deftly using a large archive of older content to attract subscribers, Hulu’s success has had a lot to do with more access to popular current shows offered by its media giant owners.

Those shows include TV hits such as “The Office” and “Glee.”

That access has become a point of contention with those owners, who have differed with Hulu management about what comes next for the mostly advertising-supported site, even though its slick product has been a clear hit with consumers.

Of course, some speculate that Hulu might not sell at all, just as it never went public as it had said it might do previously. In that case, it will be interesting to see what will become of Hulu once the music stops.

(And, if anyone would like to email me the Hulu presentation or notes on it, please do, so I can formulate a bid myself!)

But, until this deal churns slowly, leakily and loudly forward — let’s enjoy some apt Hulu content. As usual, the fun version of ABBA’s “Dancing Queen” by the kids from “Glee” was not available on the site.

Thus, I selected frequent “Glee” guest star Gwyneth Paltrow belting out Joan Jett’s “Do You Wanna Touch Me” on the show, as a good alternate metaphor for the sales process:

The company’s satellite radio service is pre-installed in about 60 percent of cars sold in the United States, and historically its take rate has been upward of 44 percent. So when J.D Power says that light-vehicle sales for January will hit 794,500 units, 14 percent higher than January 2010, that’s good news for Sirius. Even better is this: The research firm is raising its retail sales forecast for the entire year. Not by much–just to 10.5 million units from 10.4 million units.

But the trend is upward, and J.D. Power and Associates’ Jeff Schuster says there’s room for even more upside. “Optimism is increasing for the auto industry following a stronger outlook for the economy,” he explained. “GDP growth is expected to be in the 3 percent to 3.2 percent range for 2011. As the macro drivers continue to improve and credit availability increases, further upside potential remains.”

In other words, 2011 is shaping up to be a good year for Sirius XM.

Twitter has been ordered by a U.S. federal judge to turn over documents related to several people involved with WikiLeaks to the Justice Department.

Tonight, a Twitter spokeswoman responded to a request for comment on the situation:

“We’re not going to comment on specific requests, but, to help users protect their rights, it’s our policy to notify users about law enforcement and governmental requests for their information, unless we are prevented by law from doing so. We outline this policy in our law enforcement guidelines.”

In an onstage interview I did with Twitter CEO Dick Costolo at a D@CES event last night in Las Vegas, he referenced the issue, but would not give any specifics.

While he said he could not talk about WikiLeaks specifically, he indicated that he disliked government mandates to keep things quiet and reiterated Twitter’s desire to connect people with useful information.

“We’re going to lash out at things that prevent us from doing that, as aggressively as we can,” said Costolo, who also used Twitter crackdowns in China as an example.

It might be a Herculean task to fight the federal government, which is aggressively going after WikiLeaks and its founder, Julian Assange.

Some Web companies, such as eBay’s PayPal unit, have cut off WikiLeaks.

On the other hand, Twitter took legal action to unseal the court order, which allowed it to inform those involved, giving them 10 days to object. Otherwise, the San Francisco microblogging service would have had to turn over information without the knowledge of these users.

There will surely be more of these to other Web companies, with obvious candidates being Google and Facebook.

The order from the U.S. District Court for the Eastern District of Virginia is ordering Twitter to fork over subscriber names, user names, screen names, mailing addresses, residential addresses and more of several people involved with WikiLeaks.

But you can read for yourself–here is the court order, as well as the unsealing order:

twitter1

twitter2

In fact, Caris & Co. analyst Sandeep Aggarwal says he expects Kinect to generate about $2 billion in gross revenue for the Xbox ecosystem. Beyond sales of Kinect itself, the controller is also driving sales of most everything else Xbox related. In Aggarwal’s view, Kinect offers four distinct benefits to Microsoft:

1. Better material attach rate for the 45 million Xbox installed base
2. Higher adoption and market share gain for the console itself
3. An uptick from the sale of new titles
4. Lower attrition and higher gross new subscriber growth for Xbox Live users

“As expected, the launch of Kinect increased noticeably the overall buzz around Xbox and helped improve the adoption of the console,” he concludes. “Just before the launch, Microsoft increased its forecast for worldwide sales from 3 million to 5 million by the end of the year. This forecast seems conservative now, given the strong reception.”

“We wanted to be first, and WiMax was available” in 2008, Hesse said. “I can’t deny that LTE will be a bigger ecosystem, but we couldn’t wait. We thought the market was ready.”

Also during his talk, Dan Hesse said that during the last two quarters, Sprint has been the fastest-growing post-paid mobile brand in the U.S. and that the company’s overall subscriber numbers have been offset by losses on its older Nextel network. Hesse also said that Sprint-Nextel will begin to wind down operations of the Nextel iDen network and migrate its customers to Sprint in 2013, though not before push-to-talk features are added to Sprint. “All Gs come to an end,” he said.

And we’ve just added an exciting new speaker to the already top-drawer list: Daniel Ek, co-founder and CEO of Spotify.

For those living under a rock, Ek (pictured here with co-founder Martin Lorentzon) leads one of the most exciting music services on the Web right now.

In fact, the Swedish entrepreneur is shaking up how and where people listen to and consume music.

As MediaMemo’s Peter Kafka–who will be interviewing Ek onstage–recently wrote of Spotify’s efforts to bring its hugely popular (and legal) streaming offering to the U.S. market:

In Europe, where Spotify has been a very big success, listeners can stream an unlimited amount of music, on demand, without ever paying a cent. But in the U.S., rival streaming services like Rhapsody, MOG and Napster generally only offer a very brief trial period of a few days before requiring that a pay wall go up.

For the past two years, Spotify has insisted that free, unlimited streaming is the only way the service will work, because that’s Spotify’s most effective marketing technique. Subscribers who do pay up get benefits like ad-free music, and the ability to port their songs to mobile devices like iPhones.

But the labels, most notably Warner Music Group, have insisted that unlimited free streams only serve to strip away their product’s remaining value–if you can listen for free on Spotify, why would you ever buy another CD or iTunes single?

The whole mobile music space is a riveting one to dive into, of course, and we think Ek is the perfect person to help us do so.

Ek will appear Tuesday morning, December 6, but D: Dive Into Mobile opens on Monday, December 6, with an evening onstage interview with Google Android majordomo Andy Rubin.

The new conference represents the very first brand extension of our D: All Things Digital conference, now in its ninth year of grilling the big names in tech and media to sold-out analog audiences and scores more on the Web.

And, as always, there will be no PowerPoints, no panels and definitely no pontificating.

What there will be are unrehearsed, unscripted and unexpected interviews with top players, taking a big-picture view of the broader digital landscape.

But, unlike big D, D: Dive Into Mobile is topic-focused, drilling down deeply into the ubiquity of mobile technology and devices, and its implications for brands, organizations and consumers worldwide.

Offering a more intimate and focused conference setting, D: Dive Into Mobile will feature other industry heavyweights, including: Dan Hesse, President and CEO of Sprint Nextel; Mike Lazaridis, co-CEO of Research in Motion; Mike McCue, CEO of Flipboard; Joe Belfiore, Vice President of Windows Phone Program Management at Microsoft; Jon Rubinstein of Palm, now owned by Hewlett-Packard; Foursquare CEO and co-founder Dennis Crowley; Google Ad Products Management head Susan Wojcicki; and AT&T Emerging Devices President Glenn Lurie.

D: Dive Into Mobile will be held at the Ritz-Carlton in San Francisco and, as usual, we’ll be liveblogging the whole thing and also posting highlight videos.

Along with Walt Mossberg, Kafka and I, Mossberg Solution’s Katherine Boehret will be conducting the interviews.

You can sign up here for D: Dive Into Mobile.

With the red-hot acquisition dance between Google and Groupon sucking up all the attention, it’s easy once again to ignore the No. 2 player in the fast-growing social buying space–LivingSocial.

But not everyone is–according to sources close to the situation, the Washington, D.C.-based company that also focuses on local deals is in advanced talks for a major strategic investment–as high as $150 million–by online retail giant Amazon, at a very hefty valuation of over one billion dollars.

Sources said there will also be a deep operating partnership between the pair, as part of the deal.

Sources said the investment negotiations with Amazon is not complete yet, of course, and could fall apart.

But interest in LivingSocial has heightened of late, given the $6 billion in cash, stock and earnouts that BoomTown has reported that Google is considering ponying up to purchase the category leader, Chicago-based Groupon, and grab ahold of its 12 million users across the globe and $500 million in annual revenue.

But LivingSocial–which has been thriving even in Groupon’s flashier shadow–has 10 million subscribers worldwide in more than 120 markets and five countries, including the U.S., Canada, the U.K., Ireland and Australia.

And, as the start-up noted when LivingSocial announced its acquisition of Jump On It recently, it is currently booking an average of more than $1 million a day and is projected to book well more than $500 million in revenue in 2011.

That is what is apparently attracting Amazon, which has almost no profile in this lucrative local space, despite some attempts at its own solution. It bought a small and quirky daily deals site Woot, for $110 million in June.

But, rather than sell, sources said LivingSocial management wants to keep the company independent, and thinks a sale of Groupon will give it a huge opportunity for growth.

Why? Well, even though Groupoogle or Goopon are fun to say, the inevitable regulatory review could drag on, resulting in a slowing down of innovation in the bigger Google culture and the distinct possibility of newly rich Groupon execs flying the coop (in private planes).

More investment money should help.

LivingSocial announced in April that it had raised $14 million in a Series C round, after grabbing $25 million in a Series B venture financing only a month before. And it raised $10 million on top of that since 2008.

Sources estimated at the time that the valuation for LivingSocial was several hundred million dollars.

The newest round was led by Lightspeed Venture Partners; Earlier investors U.S. Venture Partners, Grotech Ventures and former AOL head Steve Case.

A report of the Amazon interest in LivingSocial was first posted several weeks ago in a in VentureBeat, a day before BoomTown first broke the news of the Groupon and Google discussions.

Both Amazon and LivingSocial declined to comment.

But here is an October video interview I did with LivingSocial CEO Tim O’Shaughnessy on a recent visit to Silicon Valley.

The entrepreneur has worked at AOL, as well as at Case’s Revolution Health in Washington, before moving on to the local deals start-up.

Enjoy:

]]> http://allthingsd.com/20101201/amazon-poised-to-make-a-major-strategic-investment-in-livingsocial-to-counter-groupoogle-threat/feed/ 3 http://allthingsd.com/20101124/bleacher-reports-brian-grey-talks-about-new-content-biz-as-patrick-keane-joins-board/ http://allthingsd.com/20101124/bleacher-reports-brian-grey-talks-about-new-content-biz-as-patrick-keane-joins-board/#comments Wed, 24 Nov 2010 19:30:35 +0000 Kara Swisher http://kara.allthingsd.com/?p=37654

Earlier this week, BoomTown went downtown to the San Francisco HQ of Bleacher Report, one of the many interesting efforts trying to change the way content is made and distributed.

Bleacher Report, no surprise, is focused on sports, and competes with sites such as Yardbarker and SB Nation.

All take different approaches, with Bleacher Report delivering a grassroots platform for both professional and hobbyist writers who want give their take on any topic about college and professional sports, from the latest draft to explaining what’s the deal with “Fear the Beard.”

Bleacher Report vets these writers and does not pay most of them. There are 3,000 contributors, with 750 designated as featured, delivering 500 pieces of content a day.

Bleacher Report also has one million newsletter subscribers across 150 teams.

The writers are presumably attracted to the larger audience–8.8 million unique monthly visitors–they can reach via the site, as well as via newspaper syndication deals.

Think Huffington Post–Bleacher Report’s main business model is advertising too–and you have the right idea.

So far, Bleacher Report has raised $8 million from venture firms, such as Hillsven Capital, and angel investors like Gordon Crawford and Jakob Lodwick, founder of College Humor and Vimeo.

And it recently went out and drafted a pro for a CEO–former Yahoo and News Corp. exec Brian Grey, who focused on online sports content at both those companies.

In addition, it also just added Patrick Keane–former Googler and also former CEO of Associated Content, the social content site recently bought by Yahoo–to its board.

Here’s a video interview I did with Grey–who, full disclosure, was my elder son’s Little League coach for one season (so he does know about baseball, for sure!)–about how the media is morphing, as amateur and professional content is mixed and distributed in new ways:

]]> http://allthingsd.com/20101124/bleacher-reports-brian-grey-talks-about-new-content-biz-as-patrick-keane-joins-board/feed/ 1 http://allthingsd.com/20101123/tivos-q3-isnt-a-pretty-picture/ http://allthingsd.com/20101123/tivos-q3-isnt-a-pretty-picture/#comments Tue, 23 Nov 2010 22:20:21 +0000 Voices http://voices.allthingsd.com/?p=33092 Analysts were expecting bad news out of TiVo’s third-quarter results today, and the company delivered. Citing higher operating expenses, the DVR pioneer posted a loss of of $20.6 million, or 18 cents a share (three times the loss of a year ago), on revenue of $41.3 million. Consensus estimates were looking for a loss of 17 cents a share on $41.4 million in revenue. CEO Tom Rogers said the company’s distribution deals will start paying off in subscriber growth eventually, but for now, the fourth-quarter forecast was for more of the same.

]]> http://allthingsd.com/20101123/tivos-q3-isnt-a-pretty-picture/feed/ 0 http://allthingsd.com/20101021/thank-you-vitamin-i-att-activates-record-5-2-million-iphones/ http://allthingsd.com/20101021/thank-you-vitamin-i-att-activates-record-5-2-million-iphones/#comments Thu, 21 Oct 2010 14:30:57 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=51055

Good thing AT&T Wireless CEO Ralph de la Vega is so certain the end of the carrier’s iPhone exclusivity deal doesn’t portend a mass subscriber exodus, otherwise you might look at AT&T’s latest earnings and the degree to which they were driven by the device and (cough) worry.

Reporting third quarter financials largely in line with Wall Street’s forecasts, AT&T said today it activated 5.2 million iPhones in the quarter–62 percent more than the record 3.2 million it activated earlier this year. Odd then that the device is notably absent from the “Mobile Broadband Leadership” slide in AT&T’s investor presentation. A passive-aggressive jab back at that “rumored” Verizon deal, perhaps?

Anyway…

The company posted a profit of 55 cents per share, up 3.8 percent from the 53 cents per share it managed in the third quarter of 2009 and in line with what analysts had been expecting. Revenue rose to $31.58 billion from $30.73 billion in the same period a year earlier and slightly exceeded the average analyst expectation of $31.25 billion.

So a strong quarter, but one overshadowed by that long-rumored loss of iPhone exclusivity. As Bernstein analyst Craig Moffett observed in a note to investors this morning, the heavy subsidies AT&T offers for the iPhone cut deeply into its bottom line.

“In anticipation of losing exclusivity, AT&T has rapidly served up its own inoculation–a massive campaign to upgrade existing iPhone subscribers to new two year contracts that will lock them in as new options emerge,” he wrote. “The cost of this strategy, of course, is subsidies, and that cost was front and center in AT&T’s 3Q results. In total, Wireless margins were light, but Wireline cost cutting was better-than-expected, and overall earnings were therefore in line at $0.55.”

]]> http://allthingsd.com/20101021/thank-you-vitamin-i-att-activates-record-5-2-million-iphones/feed/ 0 http://allthingsd.com/20101019/livingsocials-tim-oshaughnessy-about-local-deals-and-not-being-groupon/ http://allthingsd.com/20101019/livingsocials-tim-oshaughnessy-about-local-deals-and-not-being-groupon/#comments Tue, 19 Oct 2010 15:09:51 +0000 Kara Swisher http://kara.allthingsd.com/?p=35730 Yesterday, before LivingSocial announced the acquisition of the social adventure company Urban Escapes, BoomTown sat down to talk with its CEO and co-founder Tim O’Shaughnessy.

The entrepreneur has worked at AOL, as well as at Steve Case’s Revolution Health in Washington, D.C., before moving on to the local deals start-up. Case was an early investor.

LivingSocial now has about 10 million subscribers to its social discount offers online, where it competes head-to-head with Groupon, which has garnered much of the attention in the hot arena.

Both companies have been garnering huge fundings, which are being used in a race for dominance in the space.

O’Shaughnessy talked about all this and more in the video interview below, which we did in Palo Alto, Calif.:

]]> http://allthingsd.com/20101019/livingsocials-tim-oshaughnessy-about-local-deals-and-not-being-groupon/feed/ 4 http://allthingsd.com/20101019/livingsocial-buys-urban-escapes-as-social-discounting-market-heats-up/ http://allthingsd.com/20101019/livingsocial-buys-urban-escapes-as-social-discounting-market-heats-up/#comments Tue, 19 Oct 2010 11:15:02 +0000 Kara Swisher http://kara.allthingsd.com/?p=35729

LivingSocial, the No. 2 social local deals start-up, announced today that it has bought Urban Escapes, a social adventure company.

Terms of the deal were not disclosed.

LivingSocial now has about 10 million subscribers to its discount offers online, where it competes head-to-head with Groupon.

Both companies have been garnering huge fundings, which is being used in a race for dominance in the space.

After the recent $135 million funding of Groupon that valued the Chicago-based company at upward of an eye-popping $1 billion, LivingSocial announced to that it had raised a more modest $14 million in a Series C round.

The Washington, D.C. start-up had raised $25 million in a Series B venture financing only a month before that. And it raised $10 million on top of that since 2008.

In addition, big companies have become focused on the fast-growing arena, such as recent acquisition interest from Yahoo in Groupon.

Here is the official press release about the latest LivingSocial deal:

LivingSocial Redefines Social Adventure with Acquisition of Urban Escapes

Unique, Exclusive Experiences Now Offered to LivingSocial’s Network of 10 Million Subscribers

Washington, D.C.–October 19, 2010–Leading social shopping site LivingSocial (www.livingsocial.com) today announced the acquisition of social adventure company Urban Escapes. LivingSocial will now be able to exclusively offer its 10 million subscribers-strong worldwide community a host of diverse, fun and unique adventures and experiences, produced by a team of on-the-ground experts.

“By working closely with merchants in all of our markets, LivingSocial has helped thousands of people across the country experience fun and exciting things to do in their neighborhood,” said Tim O’Shaughnessy, CEO and Co-Founder of LivingSocial. “With the acquisition of Urban Escapes, we will now have the ability to help curate some amazing experiences and adventures exclusively for our members.”

From “Zen Escape Yoga Hikes” to “Boulder and Brew Tours™,” Urban Escapes redefines social adventure, and its unique itineraries promote a fun and active lifestyle and a chance to escape the day-to-day rat race. Urban Escapes staff will work directly with LivingSocial representatives in five introductory markets designing and creating one-of-a-kind experiences and adventures for LivingSocial customers.

“People who use LivingSocial are already looking for fun, new things to do in the area they live or where they’re visiting,” said Maia Josebachvili, founder and president of Urban Escapes. “We’re passionate about organizing experiences you could never arrange on your own and this acquisition is the perfect opportunity for us to expand these completely unique, guided experiences around the globe.”

As the premiere local activity discovery engine, LivingSocial lets anyone find restaurants, shops, activities and services popular in their area at a savings of 50% to 70%. Handpicked adventures from Urban Escapes offer unique adventures and experiences at affordable prices to the LivingSocial community.

Terms of the deal were not disclosed.

]]> http://allthingsd.com/20101019/livingsocial-buys-urban-escapes-as-social-discounting-market-heats-up/feed/ 3 http://allthingsd.com/20101006/netflix-adds-another-studio-sony-agrees-to-window/ http://allthingsd.com/20101006/netflix-adds-another-studio-sony-agrees-to-window/#comments Wed, 06 Oct 2010 16:35:46 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=24207 More movement from Netflix as it transitions from discs to digital: A  distribution deal with Sony that reduces its access to DVDs in exchange for lower fees and more rights to stream movies to your home.

Netflix (NFLX) wouldn’t release details about the pact, and hasn’t put out a press release announcing it, as it had with earlier deals with Time Warner’s (TWX) Warner Bros, GE’s (GE) Universal and News Corp.’s (NWS) 20th Century Fox.

But spokesman Steve Swasey confirmed that Netflix and Sony have reached another “28-day” arrangement, similar to the ones Netflix has reached with the other three studios.

Swasey wouldn’t release other details, but we can guess that the deal follows the pattern established with the precedent Netflix set in its January deal with Warner: Netflix agrees not to rent Sony’s (SNE) movies for the first 28 days after they go on sale. In return, it will pay the studio a reduced fee when it does rent the discs, and will get more movies to offer via its growing Web streaming service.

This seems like a win-win for the both sides: The studios get to wring every last penny out of their DVD business, and Netflix gets to build up the business it really cares about–delivering movies to your home via the Web.

But analyst Rich Greenfield, who wrote about the Sony deal in a note published Tuesday (registration required), says these deals have only been good for Netflix: Its costs have gone down, and its subscriber base has increased, but the studios have continued to see their DVD sales slip. “Clear victory for Netflix,” he writes.

His logic:

“* The studios have essentially played right into Netflix Founder and CEO Reed Hasting’s plan to reduce DVD costs to fund his company’s aggressive digital media rights acquisition plan.
* Netflix is rapidly bringing down its physical [cost of goods sold] by reaching delayed release window deals with studios and using fresher digital content to shift consumer behavior to streaming, reducing the number of DVDs utilized per customer per month (lowering its mailing costs).
* We suspect the Netflix window needed to be substantially longer than 28 days to justify the price reduction the studios have given Netflix – meaning a six month window might have impacted Netflix subscriber trends, whereas 28 days simply has not. Unfortunately studios were more focused on bolstering sell-through, which is largely complete within the first month of a DVD’s release, rather than damaging the long-term prospects of Netflix.
* Netflix continues to aggressively purchase digital movie rights having recently acquired rights to Relativity Media content and EPIX content, with Starz content increasingly important for Netflix to renew (at far higher costs) when their current agreement ends in 12 months.

]]> http://allthingsd.com/20101006/netflix-adds-another-studio-sony-agrees-to-window/feed/ 3 http://allthingsd.com/20100831/amazon-working-on-new-tv-movie-service/ http://allthingsd.com/20100831/amazon-working-on-new-tv-movie-service/#comments Tue, 31 Aug 2010 21:14:05 +0000 Sam Schechner and Geoffrey A. Fowler http://voices.allthingsd.com/?p=29056 Amazon.com Inc. (AMZN) is trying to create a service that gives paying subscribers unlimited access over the Internet to some television shows and movies, as it tries to take on Netflix Inc. (NFLX) and grab a bigger slice of the online TV business.

The Seattle retailer has in recent weeks and months proposed a Web-based subscription service to several major media companies, including General Electric Co.’s (GE) NBC Universal, Time Warner Inc. (TWX) and Viacom Inc. (VIA), among others, according to people with knowledge of the proposal.

Read the rest of this post on the original site »

]]> http://allthingsd.com/20100831/amazon-working-on-new-tv-movie-service/feed/ 0 http://allthingsd.com/20100826/netflix-hits-the-iphone/ http://allthingsd.com/20100826/netflix-hits-the-iphone/#comments Thu, 26 Aug 2010 15:00:37 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=47348
It’s been nearly three months since Netflix CEO Reed Hastings debuted the company’s iPhone app at Apple’s Worldwide Developers Conference, and this morning it finally shipped (iTunes link). Beginning today, paying Netflix (NFLX) subscribers can view the company’s “Watch Instantly” library on their iPhones and iPod touches, as well as on their iPads. Like its larger sibling, it’s a slick little app that extends a respectable and growing video-on-demand service to Apple’s (AAPL) smaller iOS devices.

]]> http://allthingsd.com/20100826/netflix-hits-the-iphone/feed/ 0 http://allthingsd.com/20100823/46972/ http://allthingsd.com/20100823/46972/#comments Mon, 23 Aug 2010 15:15:18 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=46972 Apple will likely bring the iPhone to another U.S. carrier in the next year–but that carrier may not be Verizon. While the company is said to be a front-runner for the device, Kaufman Bros. analyst Shaw Wu says it hasn’t yet finalized the deal that will add it to its handset lineup.

“From our understanding, the Verizon negotiations are not finalized with important details still being ironed out, including technology and economics,” Wu said in a note to clients this morning. “We think it is premature to rule out T-Mobile or Sprint.”

Or both of them, together. As Wu notes, adding T-Mobile and Sprint as additional carriers would almost be like adding Verizon (VZ). Together, Sprint (S) and T-Mobile have about 82 million subscribers. Verizon has 93 million subscribers.

Of course, bringing Apple’s (AAPL) iPhone to Verizon would serve another purpose as well–striking a blow against Google’s (GOOG) Android, which has claimed the carrier as its home turf. “We believe the argument for Apple to pursue Verizon sooner than later is to address the growing presence of Android,” says Wu. “What better way to do that than where Android has seen the majority of its success?”

In any event, Wu seems certain that AT&T (T) will not be the only iPhone carrier in the States next year. “From our checks with industry and supply chain sources and a recent SEC 10-Q filing by AT&T mentioning that exclusivity with ‘a number of attractive handsets’ could end, we have conviction that the iPhone could likely finally be at another carrier besides AT&T here in the U.S. in 2011 and potentially at Verizon in 2011 or 2012.”

]]> http://allthingsd.com/20100823/46972/feed/ 0 http://allthingsd.com/20100607/amid-new-iphone-expectations-att-tweaks-upgrade-policy/ http://allthingsd.com/20100607/amid-new-iphone-expectations-att-tweaks-upgrade-policy/#comments Mon, 07 Jun 2010 20:27:54 +0000 Roger Cheng http://voices.allthingsd.com/?p=25762 AT&T on Sunday changed its phone-upgrade policy to allow more of its customers to purchase a new iPhone sooner.

The move comes ahead of the expected unveiling of a new version of the iPhone from Apple (AAPL) on Monday. By letting existing iPhone users upgrade their device early, AT&T (T) can lock them in for another two years–which could be a crucial play given the speculation the carrier may eventually lose its exclusive agreement to sell the vaunted smartphone.

Customers typically have to go through a majority of their contract before they can again take advantage of the subsidized phone prices new customers enjoy. But AT&T adjusted its policy for some of its higher-value customers, allowing some iPhone 3GS users who purchased their device a year ago to upgrade to a new phone with the full subsidy.

Macquarie Securities analyst Philip Cusick said some users have seen their eligibility date moved from as late as November to June 21. Customers were only asked to pay an $18 upgrade fee, although in some cases the fee is waived.

Read the rest of this post on the original site

]]> http://allthingsd.com/20100607/amid-new-iphone-expectations-att-tweaks-upgrade-policy/feed/ 0 http://allthingsd.com/20100607/netflix-coming-to-iphone-if-att-and-your-phone-bill-can-keep-up/ http://allthingsd.com/20100607/netflix-coming-to-iphone-if-att-and-your-phone-bill-can-keep-up/#comments Mon, 07 Jun 2010 17:55:34 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=20210 Here’s another bright, shiny object for Steve Jobs to brandish in front of iPhone owners: News that Netflix is bringing its streaming video service to the iPhone.

The app, demoed onstage at Apple’s developers conference by Netflix CEO Reed Hastings, will be available later this summer. Like the company’s iPad app, it will be free, though you’ll have to be a Netflix (NFLX) subscriber to actually access the company’s catalog of digital movies and TV shows.

And like the iPad app, the app will stream video via both Wi-Fi and AT&T’s wireless service. I checked with Netflix spokesman Steve Swasey to see if Apple (AAPL) or AT&T (T) would limit the amount of bandwidth the app could chew up, and he said no: “Same catalog. Unlimited. It will be Netflix as you know it and love it, but in your pocket.”

No caching, though. Like the iPad, you’ll need to be connected to the Web to use the app.

But that’s still pretty cool. And it’s also going to be a lot of strain on AT&T’s network. Which is, um, still pretty strained. I doubt many of you are going to watch all of “District 9” on your phones, but you may well watch an episode of “Weeds” (first couple seasons are pretty good, but then…). And if the carrier can’t handle phone calls, how is it going to keep up with that?

So: Either AT&T really is going to resolve its capacity problems by the end of this summer, as Steve Jobs semi-promised last week at D8. Or everyone involved assumes that AT&T’s new data plans will cut down on the number of people using iPhones to do all the cool, cutting-edge stuff Jobs showed off today.

]]> http://allthingsd.com/20100607/netflix-coming-to-iphone-if-att-and-your-phone-bill-can-keep-up/feed/ 0 http://allthingsd.com/20100519/video-sports-illustrated-shows-off-a-google-ready-magazine/ http://allthingsd.com/20100519/video-sports-illustrated-shows-off-a-google-ready-magazine/#comments Wed, 19 May 2010 18:12:18 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=19692 Sports Illustrated hasn’t come to Apple’s iPad yet, but the magazine is already showing off a new version of its future: A digital version designed with Google in mind.

This one, which Editor Terry McDonell showed off at Google’s I/O developer conference today, looks a whole lot like the one the publisher says it is bringing to Apple’s gadget soon. The real difference here is the way readers/buyers get their hands on the thing: Rather than buying it from Apple’s App Store and downloading it to your iPad, you would access it via your Web browser, after purchasing it from an app store Google manages.

For most users, this may not matter very much. Regardless of which store you buy it from, the magazine should function the same way. (Don’t get hung up on the fact that it’s a Web-based app.)

But for publishers like Time Inc., the Time Warner (TWX) unit that puts out Sports Illustrated and titles like Time and People, it’s potentially a big deal: It opens up a much wider audience for the company’s publications, since they should work on any device that supports Google’s Chrome browser. Just as important, it gives Time Inc. another vendor to work with, one that might be willing to grant it concessions Apple (AAPL) won’t–like control over subscriber information, perhaps.

But all of this is a little speculative, as neither Time Inc. nor Google (GOOG) has released concrete details about the app store or the magazine. But the hope is that both will be ready in the fall.

Meantime, here’s McDonell’s presentation. He’s introduced at the event by Sundar Pichai, Google’s vice president of product management.

And here’s cleaner version of a similar demo, which McDonell taped in advance:

This doesn’t look remarkably different from the tabletized magazine demos Time Inc. and Sports Illustrated have shown off before. That is, SI (and mag publishers in general) are still primarily concerned with porting their printed product to digital form, adding some audio and video, as well as selected links to the Web. This makes sense given that both demos were produced with the Wonder Factory design shop.

See for yourself: Compare and contrast today’s demo with the one SI showed off last fall:

]]> http://allthingsd.com/20100519/video-sports-illustrated-shows-off-a-google-ready-magazine/feed/ 0