Streaming is the future. We’re focused on it. DVD will do whatever it’s going to do. We’re not — we’re going to try to not hurt it, but we’re not putting a lot of time and energy into doing anything particular around it and then we’re focused on, how do we take advantage of this incredible global streaming opportunity.

That was Netflix CEO Reed Hastings, at the UBS media conference earlier this month, reiterating the point that Netflix has been making over and over again for some time: They want out of the DVD business, even though it is generating more than $1 billion a year for them.

Hastings and his team are convinced that even though consumers say that discs are important to them, their usage data shows that few people … use them. “Old fogey discs,” Hastings calls them.

Netflix tried very hard to accelerate the decline of DVDs with the Qwikster fiasco. Since then, Netflix has been careful to tell its subscribers who are still paying for DVDs that it is happy to have them around.

New subscribers are a different story, though. Netflix exclusively pushes its $8-a-month unlimited-streaming option, on its site and in its promotional materials. You have to work very hard to discover that the company still rents DVDs, and that’s by design.

Same deal for former subscribers that Netflix is trying to woo back: Even if you used to get both DVDs and streaming videos from Netflix, the company will only tell you about its streaming plan in its “come back!” emails. (See the screenshot of an email my colleague Tricia Duryee, who quit her hybrid plan this fall, got recently, at the bottom of this post.)

But the message is most clear for people who want to give someone a Netflix subscription as a present: The company no longer allows you to gift a subscription that includes a DVD plan, period.

Go ahead and see for yourself — there’s no way to give Reed Hastings and company an extra $8 a month for a service they’re still providing to some 11 million subscribers.

The one tiny workaround that the company offers (if you look very, very hard — or do what I did, and call up Netflix PR and ask) is the ability to let current subscribers extend their current deal. So, for instance, if you’re currently getting the equivalent of a $16-a-month hybrid disc-and-streaming option, and someone gives you a year-long $8-a-month streaming gift, you can convert that into a six-month hybrid plan.

But, boy, that’s complicated. Easier to just give someone a year of streaming, and then send them a check so they can add the DVD portion on their own. Which is what we just did this morning, here at the AllThingsD Brooklyn outpost.

So to repeat: If you work very, very hard, Netflix will let you give it money, and will let you rent DVDs in return. But it would really prefer that you didn’t.

The NPD Group released a new report today that calculated the amount of money Americans are spending on games from the nontraditional market. That includes a lot of digital content, such as subscriptions, digital downloads, social games and mobile games, but also used games and rentals.

In the third quarter, it found that the amount spent on that “other content” totaled $1.64 billion.

While significant, NPD said it wasn’t enough to offset lower revenue from the traditional game market. NPD defines the traditional market as packaged goods sold at retail. In the third quarter, that totaled $1.3 billion.

“New physical retail sales had a rough third quarter,” said Anita Frazier, an analyst with NPD. “Increases in sales from some of these other monetization methods, and full game and add-on digital downloads in particular, only partially offset the decline see in the new physical retail channel.”

She said the overall market, including hardware, totaled $4.2 billion, down 11 percent compared to the same period a year ago.

For companies like Electronic Arts, which is investing heavily in mobile and social games and is placing big bets on online content, like today’s release of Star Wars: The Old Republic, the results of these monthly and quarterly reports are unrepresentative of the trends they are seeing.

“Everything is growing. If you look at the total interactive business, it’s a $50 billion market internationally, and that’s up double digits. That’s where we play,” said EA’s President of Labels Frank Gibeau. “We find it frustrating because it doesn’t tell the whole picture.”

In the second quarter, EA’s digital revenue, which includes downloadable console content, mobile and social — was up 30 percent year over year.

Even a company like Activision, which has been slower to develop games on Facebook and mobile, said that during the second quarter, revenue from digital channels — mostly downloadable content — increased 27 percent year ove year, and accounted for 37 percent of the company’s total net revenue.

For all-digital companies, like Zynga, which went public last week to raise $1 billion, its impact hardly seems to register.

“I think that ultimately we are an interactive entertainment company, not a packaged goods company,” Gibeau said. “We are platform and channel agnostic. The physical channel is a great channel and it’s going to be around longer than people think. … We are fine with that model, but then, when you bring that game home, you should be able to connect to the larger online world.”

Ahead of the dinner, Anderson stopped by my office to let me have a peek at his 10 predictions, and we talked them over a bit. All 10 are below, along with some comments from Anderson that emerged from our conversation.

Before diving into the predictions, Anderson tells me there is a grand theme that unifies them all: “Integrating everything.”

What does that mean? “It means a whole lot of stuff that needs to be integrated. We don’t need anything new at all. There’s so much work that needs to be done with the existing tool sets. Steve Jobs didn’t really invent anything at all. But he was great at integrating things into a product. There’s a lot more of that work to do. We have to do it in the phone world and the TV world and the health care world. We have lots of devices and lots of chips and lots of operating systems and lots of content. The bigger question is, how do human beings use it all efficiently?”

As an example, he cites the collaboration between Nuance, the speech software company, and IBM, bringing the Watson computer of “Jeopardy” fame into the area of health care. “For the first time, the idea of evidence-based medicine won’t just be in a magazine article,” Anderson says. “A doctor will be able to pick up his phone and describe four symptoms, and find out what the likely diagnosis is, what the indications are. It’s fantastic.”

So here are those 10 predictions, with additional comments from Anderson:

1. TV becomes the new center of gravity in the tech universe. All the other devices find their niches in the TV galaxy. Microsoft’s attempt to integrate Kinect into TV is a strong if qualified success. Smart phone-TV integration software becomes a new category. Pad-TV integration becomes common.

“Apple will hustle to launch the next version of Apple TV, and it will be a roaring success and be seen as Tim Cook’s first great product success. But what it really will be is Steve’s last product.”

2. 2012 will see tectonic shifts in phone markets. “Nokia will fail to come back, which is pretty clear to everyone except the people in Finland.” Samsung, Anderson says, will retain its spot as the new global leader in mobile phones by volume, and will keep this crown despite the debut of Microsoft’s Windows Phone 7.

Meanwhile, Anderson says, Google will lose control over the Android operating system, mainly because unlicensed versions of Android will multiply in type and in installed base, especially in Asian countries. “It’s already a balkanized environment. Now Google loses control of the technology entirely. China is already running an unlicensed version of Android, and I think there will be more of that.”

Finally, the smartphone will finally emerge as the dominant category of wireless phone. “Why would you have anything else? And why would sellers of content and services want you to?” he says. “It doesn’t matter if you’re in a rich country or a poor country. This stuff is cheap.”

3. Clouds are for consumers, and for start-ups. Even as a large number of big companies move pilot projects onto external clouds, it will become clear that the real trend is for enterprise to stay away from clouds in all key areas, for reasons of both security and reliability.

“The cloud guys hate this because they want to sell to enterprises,” Anderson says. “But the security issues are becoming really intense. If you’re a CIO, it’s a terrible environment, and you’re a target, for sure, especially if you’re a company with a lot of intellectual property. I’m not implying that things like SAAS (software as a service) aren’t a big trend. But no one is going to put their valuable IP on the cloud.”

4. Security splits the tech world in two, finally getting attention from CEOs. Companies with real IP start to realize they have to “go big or go home” with their security response, and their spending on protecting their “crown jewels” rises dramatically.

5. Siri stuns the world. Siri, on Apple’s iPhone 4S, has sounded the arrival of Internet personal assistants, and the world will spend this year marveling at what Siri and its rivals can and cannot do — and what they can learn to do.

“I think we’ll see a bunch of these things,” Anderson says. “Siri will get much better. It will learn how you learn. We’ve never seen people have long-term relationships with machines before, but it will be a long-term relationship, and she will remember everything, but make good use of it. She will know you learn better by seeing than hearing, or that it takes three times to tell you something. All those things that you have to program today should be learnable. None of that has been done yet. That creates a real friendship. And I think we’re going to start seeing personal assistants not just for everyday life, but for professions like medicine or car repair. Instead of just having Siri be everything, there will be many Siris for different contexts.”

6. We enter the amazing world of Dave and HAL, as voice recognition comes of age. From hospital to car, mobile to home, Kinect to Siri, exercise to play, work to entertainment, remote control to direct action, from Microsoft to Apple, from Tellme to Nuance — the time has come for computers and humans to talk to each other. With lots of funny stories, big bloopers and amazing breakthroughs, humanity at the end of 2012 will be talking to machines in a normal voice, and it will not seem unusual, nor be the cause of unending frustration.

“The voice-recognition part is almost trivial,” Anderson says. “The important part is context-sensitive understanding. It used to be that all the researchers at Carnegie Mellon used to think that all you needed was more computing horsepower to do better at voice. It turned out that was wrong. It was right for a little while, but the real problem is context. And so, if you can build up that database where you can search it contextually for what to expect, that is where you get all the mileage.”

7. E-readers prosper, but pads continue to dominate what Anderson calls the “carry-along” market. Pads and tablets will come down in price and get closer to prices of e-readers. Meanwhile, Anderson says, Amazon’s Fire will move upmarket and evolve into a full-fledged tablet.

“If you look at the specs on the Fire, it’s a tablet, but it’s hobbled,” Anderson says. “So I think that this is part of the whole strategy: Come in and sell at a low price, and then later unveil a more complete tablet. Apple will stay ahead, though. A lot of people are asking me if Amazon will catch Apple, and the answer is no. The way it’s configured right now, there’s no way the Fire will catch up with the iPad.”

8. The consumption world explodes. Get ready for new devices, new content, new bundles, new connection techniques, new distribution channels, new aggregators, new tablets, new phones, new players, new self-published authors, new garage bands, new consumption models riding on social networks. There is nothing but high energy in the content consumer market. People are now ready to spend subscription money, and the publisher response will be huge. “It’s going to be a huge melee of stuff,” Anderson says. “We’ll invent more stuff to consume, and it will be very hard to figure out who the players are from week to week, and how they’re doing. They may not even know themselves.”

9. Governments and corporations focus on intellectual property as though it were their most prized asset. It is. This new global understanding leads to a reevaluation regarding giving critical IP away for nothing versus protecting it. The age of what Anderson calls “IP naïveté” is over, and the question of proper IP valuation is here.

What is IP naïveté? “When Jeff Immelt stood on the steps of the White House the day after he was named jobs czar, and handed the plans for GE’s most important jet-engine project to Hu Jintao in order to get the permission to be allowed to bid on maybe selling engines to China — that’s IP naïveté,” Anderson says. “Thinking that’s not going to come back and show up for sale in Houston from some Chinese company in about six months is IP naïveté.”

During 2012, he says, companies and countries will start valuing their intellectual property not for its replacement value, but for figures that are magnitudes larger. State-sponsored IP theft will shift from being considered a nuisance and more along the lines of an act of aggression.

10. Amazon gets it all. Between outdoing Wal-Mart online, to beating the booksellers and delivering groceries, and making new inroads in video streaming, Amazon will prove that one company can indeed have it all. Strong Kindle and Fire sales will only be icing on the cake.

The tool will be similar to the “Like” button plugin, which connects users to Facebook fan and brand pages from around the Web. It’s also close to Twitter’s follow button, and for that matter it could be an alternative to the standard Web format of RSS feeds.

Of course, the reporters and public figures actually have to write the updates they send to subscribers. That part is not necessarily automatic.

Until recently, Facebook had allowed users to create “Notes” (the Facebook version of blogs) automatically by importing posts from RSS feeds. It removed support for that feature last month.

(Image credit: Flickr user tlillis4)

Please see the disclosure about Facebook in my ethics statement.

That has yet to happen. And if it ever does, it won’t be anytime soon: Gartner projects that by the end of 2015 digital music revenue may hit $7.7 billion worldwide, while CD sales will still be around $10 billion.

But there’s something else that really struck me about Gartner’s newest numbers. Take a look and see if you can figure it out:

Catch it? Took me a minute, because I couldn’t figure out what “Personalization Services” were. What kind of name is that for a $2.1 billion industry?

Here’s the English-language definition, via Garnter’s PR team: “The ringtones and ring-back tones that consumers pay for to use on their mobile devices. Typically, these can be acquired directly from service providers and synched to the mobile phone over the air, or can be acquired via a PC or connected device and then synched to the mobile phone.”

To sum up: More than 10 years after Napster, one of the key pillars of the music business is ringtones, a business that peaked around 2005, when some of you would have recognized the image at the top right of this post.

If you’re reading this, you probably haven’t paid for a ringtone since 2007, and you probably don’t know anyone who does. But there it is, generating two-point-one-billion dollars.

And Gartner thinks ringtones won’t die off anytime soon — four year from now, it thinks it’s still a billion-dollar business. Meanwhile downloads, dominated by Apple’s iTunes, are going to grow ever so slowly. Which means that if digital music is ever really going to take off, it’s going to be up to subscription services like Spotify, which up until now haven’t gained any real traction.

Gartner figures that will change, and who knows? Perhaps the Facebook fire hose that’s spraying Spotify at the social network’s 800 million users will work. So far, the signs are encouraging.

But if that doesn’t work, things are going to look as grim as ever — a flatlined CD business, a slow-growth download business controlled by Tim Cook, and … Crazy Frog.

[Image via Wikipedia]

The Paris-based company’s CEO Dan Serfaty has moved to Beijing with plans to help Tianji establish a new subscription revenue model. The Chinese website currently earns the bulk of its revenue from recruiting tools, but is free to regular users. Globally, Viadeo earns 30 percent of revenue from recruiting, 20 percent from advertising, and 50 percent from subscription fees paid by users.

The company plans to explore various models, including small, incremental payments (like those online game and instant messaging operator Tencent charges users for virtual goods) and subscriptions. Viadeo will also soon be launching a platform for third-party applications on its website, which is expected to earn some revenue as well.

Read the rest of this post on the original site »

Online dating is “quite fun,” said Nick Yuan, a 34-year-old computer technician from Shaoxing, China, who signed up for Jiayuan.com International Ltd. to meet new people after his divorce. During his first few months on the site, Mr. Yuan received about 30 messages a day.

“‘IT technician’ seemed to be an appealing job,” he said. Most of the women who contacted him asked about his salary and whether he owns a home.

Mr. Yuan is among roughly a million users a month who pay to exchange messages on Jiayuan—signaling a shift for some Chinese Internet companies toward generating revenue from user fees and subscriptions rather than from typical, and highly competitive, advertising.

Read the rest of this post on the original site »

And when word broke yesterday that RIM was working with the music labels to launch yet another music service, it was time to reach — slowly, because at this point who really cares? — for the bat again.

But it’s possible that RIM may not have a half-bad idea here: A scaled-back feature that gives some of its remaining customers something they’d like, and not much more.

As described by The Wall Street Journal’s Ethan Smith, the new service will give users access to a mere 50 songs at a time, and will let them share the songs with their friends via BlackBerry Messenger.

Is that it? For RIM’s sake, I hope so. Because at a certain price, it sort of makes sense: Yes, everyone says they want access to an unlimited world of music. But lots of people listen to the same small group of songs over and over.

And if RIM is smart — I know — they won’t position it as a competitor to Apple’s dominant iTunes, or the subscription services like Spotify that have yet to take off. They’ll sell it as a cool way to show off your favorite few songs of the moment, and tell your friends about it.

Again, if this works, it will depend on pricing — a couple bucks a month would make sense — and execution. And RIM hasn’t given us much reason to think it will get either element right. But the modest scope of RIM’s ambitions — pulling this off sure isn’t as hard as making a credible iPad competitor — gives them a shot here.

And if BBM Music does work, it wouldn’t be a reason to buy a new BlackBerry, but it might make you happier you own one. And that would be a modest win for a company searching for any kind of victory, anywhere.

And now, just because I can, a Rick Rubin Queen remix from back in the days when mobile phones were shoe-sized:

“We continue to believe it would be appropriate for us to increase our pricing to be able to continue investing in and delivering the best audio content in the world,” Karmazin said. “Early next year, for the first time since the merger, we will be able to price our service as we see fit.”

He offered no further details beyond that and said nothing about the size of the increase the company is mulling. But the company’s clearly aware it’s treading toward dangerous territory here. As CFO David Frear observed during the call, higher prices could result in subscriber attrition, something the company would prefer to avoid.

“Generally, when you raise prices you tend to dampen demand,” Frear said. “But I think you’ve heard us say that pretty clearly that overall, for this business, that we think that price increases make a lot of sense, given the programming we’re delivering and given how long we’ve left the price unchanged. It just makes a lot of sense to increase it in the future.”

I’m sure it does. With aggregate subscriber levels that exceeded 21 million this quarter, Sirius is by far the most popular music subscription service in the world (Spotify isn’t even a distant second with a self-reported 1.6 million). With the federally mandated freeze lifted, it’s time to milk it for all it’s worth.

The Times saw Q2 revenue drop two percent and overall ad dollars drop four percent — digital ad dollars were up a modest 2.6 percent, and that wasn’t enough to make up for a 6.4 percent drop in print.

Circulation revenue was flat, but that number masks an interesting split. Print circulation dollars were down — the publisher didn’t disclose the size of the drop — but digital subscription dollars made up for the loss.

The Times says it now has 224,000 subscribers to the digital editions it rolled out in March; a month after launch, it said subscriptions for that service had “surpassed 100,000.” The paper also says it has 57,000 subscribers for digital subscriptions it sells via platforms like Amazon’s Kindle.

The Times also said it had signed up 100,000 free digital subscribers via a giveaway sponsored by Ford’s Lincoln brand, and that 756,000 home delivery subscribers were getting digital delivery as well, which comes free with their print subscriptions.

The Times says it expects to see circulation revenue in the “low single digits” next quarter, presumably because of more digital dollars. “Our ability to further monetize our digital content will provide us with a significant new revenue stream in the second half of this year,” says CEO Janet Robinson via press release.

Other notes:

• The paper’s About Group, once the major engine of its digital operations, saw revenue shrink yet again, this time by 17.3 percent. And again, the Times blamed part of the drop on Google: “Design changes in the cost-per-click advertisements served by Google had a negative effect,” as did “algorithm changes Google implemented during the first quarter of 2011.” The Times also cited “an increase in competition in the content space”; it didn’t mention that in May it had pushed out About CEO Cella Irvine.
• If you ignore a $161 million goodwill write-down for some of the publisher’s regional papers and other one-time charges and gains, the Times’s earnings would have been 14 cents per share, down from 18 cents a year ago. Operating profit, minus one-time charges and depreciation, amortization, etc., was $83 million, down from $93 million.
• The Times says it expects to see similar ad results next quarter.

The weekly is rolling out an “all-access” plan that kicks in Thursday. It will give readers a chance to purchase bundles that will give them access to the magazine in multiple formats: Print editions delivered to their mailboxes, app versions beamed to their iPads and other tablets, and Web versions at Time.com.

This is the second time Time Inc., Time Warner’s publishing unit, has rolled out a print/digital bundle. Earlier this year it announced a similar “magazines everywhere” package for Sports Illustrated.

You can read pricing details in the press release below. What you won’t see there: News that, along with the bundles, the magazine will put up a paywall on its site which will keep non-subscribers from reading the print version for three months after it hits the newsstand.

If that sounds familiar, there’s a reason. Time.com put up a wall for its print magazine content almost exactly a year ago, and said at that time it would be doing that for most of its titles.

It’s unclear to me when and why the title knocked down its Web barriers — right now, for instance, you can read all of Time’s most recent issue for free — but they are going back up this week, and some Time staffers I’ve heard from are grumbling about the move. But as I’ve said before, it’s likely that the vast majority of Time.com’s visits and page views come from stuff that isn’t in the magazine, and that will continue to be free, so most site visitors may not notice any change at all.

Also worth noting is that while last spring’s Sports Illustrated announcement focused on Time Inc.’s deal to sell magazine subscriptions via Google’s Android platform, today’s news notes that the subscriptions will also work with Apple’s iPad.

That is: Even though Time Inc. isn’t using Apple’s new iTunes subscription service, it’s able to use Apple’s new iTunes subscription terms to deliver iPad subscriptions on its own. Time won’t sell subscriptions to the magazine through iTunes or via the app, but it will encourage readers to head to a Time Inc. Web page to sign up for a bundle. That means the company loses a marketing resource, but retains 100 percent of its subscription revenue, and all of the subscriber information it treasures.

TIME LAUNCHES “ALL ACCESS”
Readers Will Now Pay A One-Time Subscription Fee To Get the Print Edition
Plus Access to Tablet Apps and the New Magazine Channel On TIME.com

(New York, July 19, 2011)—TIME announced today that, starting this week, subscribers
will now pay one price for an “All Access” subscription to TIME magazine content wherever
they want to read it: in print, online and on tablet apps. This subscription model rewards loyal
customers with more choice and quality at no additional cost.

With TIME’s “All Access,” current subscribers to TIME will continue to receive the print
magazine, plus have access to a new paid magazine channel on TIME.com and be able to
download their issues on Apple iPad, HP Touchpad and Samsung Galaxy Tab. The TIME.com
magazine channel will be a paid section of the website that will contain all new magazine
content on an ongoing basis beginning with this week’s issue. Subscribers will activate their “All
Access” accounts using their existing magazine account number or mailing address.

New subscribers will have three options to access TIME magazine content:
1. Subscribe to TIME “All Access” for $30/year and receive 56 print issues, full online
access and all tablet apps
2. Sign up for a 1-week short term pass to access magazine content on TIME.com for $4.99/
week
3. Sign up for a $2.99/month “All Access” subscription. Each month readers get all of the
print editions of TIME, the tablet editions and access to magazine content on TIME.com.
This subscription can be cancelled anytime.

The new magazine channel on TIME.com is one of a series of new content verticals the site
has launched in the past year and a half, including Newsfeed, Swampland, Lightbox, Techland,
Healthland and MoneyLand. TIME.com has 95% original content separate and distinct from
magazine content and has broken multiple traffic records in 2011. In June, the site had 93 million
pages views, up 31% year over year, and 11.3 million unique visitors, up 27% year over year,
according to comScore. TIME is up in ad pages and revenue for the first six months of the year,
up 8.1% in pages and 11.2% in revenue. TIME is the #1 magazine brand on Twitter with more
than 2.6 million followers.

TIME is the second Time Inc. title to launch a subscription plan allowing consumers to pay once
and access their content across multiple platforms. Sports Illustrated announced a similar “All
Access” plan in February 2011.

Even though the majority of Netflix’s 24 million subscribers are still paying it to get DVDs by mail, Reed Hastings and company see themselves as Internet guys, not putting-discs-in-envelopes guys.

Now they’re making it even more clear, by raising the prices in a way that makes it much more expensive to get both Web streaming and DVDs from the service.

Technically, the company is continuing to sell streaming video subscriptions for $8 a month, and reducing the price of DVD-only subscriptions to $8 a month. But by eliminating an option where streaming video customers could also get discs for another $2 month, the company is effectively raising the price for its combined service by 60 percent, from $10 to $16 a month.

The changes go into effect immediately for new customers, and on September 1 for existing subscribers. Wall Street seems to think this is a good idea, and has pushed NFLX shares up since the news broke this afternoon.

(Congrats, by the way, to Engadget, for getting most of this early this morning. Journalism!)

This is a real turnaround from previous pricing plans, where Netflix sold itself as a DVD-by-mail service that gave you Web streaming for free.

Last year, the company introduced an $8-a-month, all-you-can-eat, streaming-only package, and people seem to like it, a lot.

Earlier this year, Netflix announced that a third of its new customers are choosing the Web-only option, even though doing so severely limits their choice of TV shows and movies. Netflix’s digital catalog runs around 20,000 titles, while its DVD catalog boasts more than 100,000.

But even if Netflix customers are embracing streaming, the majority of Netflix subscribers are still paying for discs, whether they use them or not. I recently discovered, for instance, that I’ve had a Netflix-owned “Battlestar Galactica” disc in my player. Which means I haven’t used it in more than a year, because Netflix started streaming the show almost exactly a year ago.

Netflix explains the rationale for the price hike in a blog post, but the short version is that it would like its DVD customers to move to the Web, or pay up. Doing so helps it cut down on discs costs and/or generate more money to help buy digital titles, which are only going to get more expensive.

I’m guessing I’ll dump the discs. I’m already inclined to start cutting back on the subscription services my family pays for, and certainly don’t want to add more. But I’ll be a little disappointed.

One of the reasons I really enjoyed Netflix was the notion that it provided instant gratification — I can stream anything they have with a click — but that it gave me the option to get even more, with a little bit of planning : Add a disc to your queue, then wait a day (or two, max), then boot up the DVD player.

I rarely took them up on the offer — see the Battlestar Galactica anecdote above. But it was nice to know it was there. And it made me feel like I was getting good value for my $10 a month. Now I’m a little less enthusiastic, and I bet I’m not the only subscriber in that boat.

*SPOILER ALERT: It turns out the Cylons are [REDACTED], or something. Frankly, I got a little confused and frustrated by the end of this thing. Still, great show!

The company is offering “All Access” subscription packages for the Web and an array of mobile devices, including iPhones, iPads and Android devices.

Although the company offered some rider-tracking features last year, the GPS tracking is greatly expanded. On the mobile side, Android and iPad support are new, while iPhone coverage is expanded from the $14.95 live video package offered last year.

“It is a world where you can definitely not say we want to do what we did last year,” said NBCSports.com coordinating producer Tom Seeley. “That’s not acceptable.”

Last year, the tour was under the auspices of then-separate cable channel Versus, which has since become part of NBC Sports, thanks to the Comcast acquisition. On the TV side, the networks are splitting coverage, with the first few stages on NBC and the remainder on Versus. While there was some tracking of each cyclist, this year there will be more detailed GPS tracking for every rider in the race.

Even those who don’t want to pay will still have access to some Web and mobile features that complement the broadcast coverage, such as overall standings, news articles and highlights. Before the tour starts on July 2, there is also free content on NBCSports.com, including breakdowns of each of the race’s 21 stages, details on the top contenders, a variety of historical Top 10 lists and a look back at last year’s event.

On the mobile side, all but the live video and GPS tracking will be free, including video highlights, rider profiles, detailed standings, course maps and more. For Android users, there will be a free and a paid app, while iPhone and iPad users will be able to download an app for free and then upgrade to premium content from within the app. The pricing for all of the mobile apps is the same: $14.99 for those subscribing from now through July 11. Those who subscribe while the event is already in its second week (July 12-16) can do so for $9.99, while those who only want the final week (July 17-25) can do so for $6.99.

The Web-based online package ranges from $4.95 for a daily pass to $29.95 for the full subscription.

Here’s the old version of the Hulu Plus subscription app for the iPad:

And here’s the new version, built to comply with Apple edicts that kick in at the end of the month:

Easy, right? All Hulu had to do was strip out the link that sent potential subscribers to its Web site, because Apple’s new rule will ban “apps that link to external mechanisms for purchases or subscriptions to be used in the app.”

That means that the app can no longer function as an effective advertising tool for the video service, which is a bummer for Hulu (which is owned by Comcast’s NBC, Disney’s ABC and News Corp.’s Fox; News Corp. also owns this Web site). It’d be quite useful to offer a smattering of free content on the app, then encourage users who want more stuff to click through to Hulu.com to pony up $8 a month.

But that’s much better than the previous choice Apple offered app developers that wanted to sell access to content: Use Apple’s in-house purchase system — and give Apple 30 percent of all sales that flow from that — or don’t do it at all.

Lots of developers have no problem using Apple’s system, which gives them access to a customer base of 225 million people. But others won’t want to give up that much revenue.

So now we’ll see how other content companies that currently use external links in their apps decide to play it over the next couple weeks.

My hunch is that digital video and music companies like Netflix and Rhapsody will follow Hulu’s lead and drop their “buy” buttons. The New York Times has already said it would work with Apple’s rules, but that was back when it announced its paywall/subscription plan in March, when it had a different set of options. I asked Times officials about their plans 10 days ago, and they declined to comment.

Also not commenting: The Wall Street Journal — which again, like this Web site, is owned by News Corp. The Journal hasn’t said a peep about its Apple subscription plans, which seems a bit odd, given that News Corp. and Apple rolled out the first iteration of Apple’s subscription offering, via The Daily, back in February.

Rival business daily the Financial Times, meanwhile, has quite clearly signaled what it plans to do: It has built an HTML5 Web app so it can control every part of the subscription process itself.

Then there’s Amazon, which seems to be one of the clear targets of Apple’s revised rules – note that they specifically rule out the use of a “buy” button that goes to a Web site to purchase a digital book. Hard to believe that Amazon will get rid of its Kindle iOS apps altogether, since they’re a key feature of the Kindle ecosystem. But dropping the app’s “buy” button will be a real drag for the bookseller, too.

Now, apps can offer access to content purchased outside of Apple’s walls, as long as the app doesn’t have a “buy” button that connects consumers directly to an external store. That is: Apple won’t make it easy for users to buy in-app content without going through Apple’s store, but it won’t outlaw it, either.

The changes to Apple’s App Store Review Guidelines, published today and first noted by MacRumor’s Jordan Golson, don’t address Apple’s control of credit card information.

Which means that some print publishers, including the Financial Times and The Wall Street Journal, may still not be willing to adopt Apple’s subscription rules, which kick in at the end of the month. (The Wall Street Journal is owned by News Corp., as is this Web site). But if those publishers are willing to forgo selling subscriptions through Apple, which just announced it has billing relationships with 225 million customers, it shouldn’t be a problem.

And for many other content companies, including Netflix and music services like Rhapsody, the bigger issue has always been the 30 percent revenue cut that Apple was going to extract every month for all in-app subscriptions.

Many of them appeared ready to accept Apple’s rules anyway, and simply try to persuade most customers to sign up outside of Apple’s walls, so they could keep 100 percent of their revenue. Now, as long as they’re willing to give up access to Apple’s marketing might, they don’t have to worry about it.

And as PaidContent notes, Apple also appears to be offering developers another option — raise prices on content they sell through iTunes so that Apple’s 30 percent cut doesn’t eat into their revenue.

Apple previously required developers who sold content within its apps to do so “at the same price or less than it is offered outside the app” — that is, the Apple price couldn’t be higher than anywhere else. Now that language has disappeared from Apple’s rules.

But Apple’s rules still appear to pose a problem for book sellers like Amazon. You can’t purchase books directly from Amazon’s Kindle app, but the software does have a “Kindle Store” button that takes buyers to Amazon’s Web store. But Apple’s new rules look designed to ban exactly that sort of thing.

Here is the language governing subscriptions that Apple introduced back in February:

11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.

And here are the new rules:

11.13 Apps that link to external mechanisms for purchases or subscriptions to be used in the app, such as a “buy” button that goes to a web site to purchase a digital book, will be rejected.
11.14 Apps can read or play approved content (specifically magazines, newspapers, books, audio, music, and video) that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content. Apple will not receive any portion of the revenues for approved content that is subscribed to or purchased outside of the app.

It will be interesting to see now if some companies that had said they’d start selling subscriptions via iTunes change course. Conde Nast and Hearst have recently begun selling monthly and yearly subscriptions to some of their magazines via iTunes.

And the New York Times has made a point of saying it would “comply” with Apple’s rules once they kicked in, but so far the publisher has only been selling digital subscriptions from its Web site.

It will also be interesting to see what happens to app companies that don’t adopt Apple’s rules but continue to offer their stuff through iTunes anyway: Will Apple forcibly remove them from the store, and/or disable their apps? Or will the company take less drastic measures, like refusing to approve new updates to their apps? We may see within a few weeks.

The move is important because:

• It’s the first major attempt by a publisher to create an HTML5-based Web app that for all intents and purposes works exactly like an iTunes-purchased app.
• It gives the FT a real alternative to iTunes if the FT doesn’t want to accept Apple’s subscription terms.

Apple’s subscription rules have rankled many content owners because they require them to hand over 30 percent of all subscription revenue, every month, for all “in-app” subscriptions sold through iPad and iPhone apps. Even more problematic for print publishers like Pearson’s FT is Apple’s insistence on keeping subscriber data like credit card information to itself.

But since Apple announced the new rules in February, a growing number of content companies, from the New York Times to MLB.com, have announced that they’ll accept them,

Some publishers, like Conde Nast and Hearst, have been able to wring small concessions out of Apple that give them a bit more flexibility, but the general gist remains the same; many content companies are now hoping that they’ll be able to convince most customers to subscribe to their content outside of iTunes, which will let them keep 100 percent of revenue and all subscriber data.

Apple’s deadline to accept the new terms kicks in later this month, and the FT has yet to declare if it’s going to play along. The FT, citing FT.com managing director Rob Grimshaw (registration required), says the paper has “no plans to pull out of any apps store,” but that’s not the same as saying it plans to stick around, either. Note opening lines in the promotional video for the app’s, below: “The FT app is moving.”

Spokesman Tom Glover tells me the publisher is “still talking to Apple about the terms for selling subscriptions through iTunes.”

The Web app only works on iOS devices for now, but the paper says versions for Google’s Android platform are in the works. More technical details here.

UPDATE: The FT’s news reminds me that it’s a good time to check in with the Wall Street Journal, which like this Web site is owned by News Corp. The Journal, which has played up its success on Apple’s platform in the past, hasn’t said what it’s going to do about Apple’s subscription rules, and a spokeswoman says that hasn’t changed: “We’re exploring our options.”

He also added some color to the perceived trend of “cord-cutting,” where consumers forsake cable or satellite TV subscriptions in favor of Internet-based video entertainment. He said the small decline in conventional TV subscriptions seen in 2009 had more to do with the recession and the uptick in residential foreclosures. Netflix, he says, is complementary to cable and satellite subscriptions.

Here are some highlights of the conversation.

]]> http://allthingsd.com/20110601/netflix-ceo-were-not-causing-cord-cutting/feed/ 0 http://allthingsd.com/20110601/netflix-ceo-reed-hastings-live-at-d9/ http://allthingsd.com/20110601/netflix-ceo-reed-hastings-live-at-d9/#comments Wed, 01 Jun 2011 15:09:09 +0000 Peter Kafka http://allthingsd.com/?p=80321 Netflix has turned itself from a DVD rental company into a Web video subscription service, and consumers love it: Millions are signing up each quarter.

Investors love it, too: They’ve pushed the stock up in an amazing run over the last couple years.

Hollywood, the TV networks and the cable companies aren’t exactly sure what to make of it, though: Sometimes they seem to view Netflix as a threat, and sometimes they seem very happy to take Hastings’ business.

(Note: We’re streaming this interview live; more details here.)

8:09 am: Good morning! News Corp. digital chief Jon Miller is welcoming the crowd, and thanking sponsors.

8:10 am: Now Miller is agog at valuations, reminding us that we were close to living in boxes in the fall of 2008.

8:12 am: Now on to world affairs, and the impact of the Web on places like Egypt. Also, a shout-out to the bin Laden raid live-tweeter.

8:13 am: Did you know Jon Miller is a serious practitioner of martial arts? It’s true! Do not mess with him.

8:15 am: Miller reminds us that Google is really, really, really dominant in online advertising. And that Microsoft’s Kinect is doing well.

8:16 am: Miller on Web video: We’re moving to a streaming world instead of a download world. That will happen in music, too.

8:17 am: Miller says he’s surprised Michael Arrington is still at AOL, and a little less surprised that Walt Mossberg and Kara Swisher are still at News Corp.

8:17 am: And hey, here they are!

8:17 am: Now Walt and Kara’s time to vamp a bit. They’re explaining the origins of the D9 hoodie. (Two words: Mark Zuckerberg.)

8:18 am: The Latin phrase “Shut Up and Listen,” btw, is both W&K’s motto and the name of their LLC. (Really–it’s where I get my checks.)

8:19 am: Hey, remember when Mark Pincus was supposed to be on stage here? What happened with that? W&K offer some theories.

8:20 am: And here’s Reed Hastings.

8:21 am: Kara, via PaidContent’s Staci Kramer: Are you driving up the content so high that even you can’t afford it?

Hastings: No. How could I be doing that?

Kara: Good point!

Hastings: It’s a virtuous cycle. We get more customers, we get more money, we can afford more content, we get more customers.

8:22 am: Kara: You used to be the scourge of Hollywood. Now they like you. Is that just about money?

Hastings: Yes. “The whole relationship thing is overstated.” Pay them and they like you.

8:23 am: Kara: What’s up with the Starz deal? It’s over in 2012. You’re going to pay $200M a year to renew this, right?

Hastings: No deal yet, but “that wouldn’t be shocking.”

8:24 am: Kara: And then what happens next? You go to the rest of Hollywood and offer them more money?

Hastings: Pretty much.

8:24 am: Hastings: Consumers want us to have all the new stuff. But it’s very expensive, and we can’t afford all the new stuff and offer the service for $8. So at $8, we’re a compliment to the new-release business. “The new-release business will stay as pay-per- view, because that’s a higher margin for the distributor.”

8:26 am: Kara: Lots of the ads for movies say “you can’t get this on Netflix.”

Hastings: Yep, and a year ago we had 14 million subs and now we’re at 23 million. “So keep going.”

8:26 am: Kara: Please talk about your relationship with studios, cable guys. Are you encouraging cord-cutting?

Hastings: Nope. There was cord-cutting last year, but that was due to the economy. Now cable subs are up, and we’re growing, now at 23 million subs. “So it appears that to the consumer, Netflix is complementary.”

8:28 am: Kara: I was in the Polo Lounge (!) recently and saw your Hollywood guy Ted Sarandos talking to Jeffrey Katzenberg from Dreamworks. What were they talking about?

Hastings: Content.

8:29 am: Hastings: Going forward, our main competition is going to be from the cable guys’ TV Everywhere offerings, like Comcast’s Xfinity app. What we have to do is continue to go the next level. Have to make our HD great, and interface great, and get lots of content, and figure out social. “We have to continue to push the edge on Internet television, because we’re a national, and trying to be a global, company.”

Hastings says it’s not “natural” for cable competitors to compete nationally.

8:31 am: Kara: Ultimately, you’re going to sell to Apple, right?

Hastings: Nope. We’re at 23, 24 million subs (keeps growing!) and across the globe 5 billion people have mobile phones. Big opportunity.

Kara: So you don’t feel pressure from Amazon, Apple, etc?

Hastings: Nope, competition is healthy. Bing has been good for Google.

8:32 am: Kara: Where are you going to expand internationally?

We started in Canada, and we wanted to see how streaming-only works. Big success, and we’ll do worldwide. YouTube is a global brand, and they don’t have to do specific content deals. But we do, and we have to go country by country.

8:34 am: Kara: Right. So what’s next?

8:34 am: Hastings doesn’t answer (reports say South America).

Hastings: It takes us one to three years to get a new country profitable for us. Canada we’ll be profitable within a year, which is very fast.

8:35 am: Kara: Asia’s big for you, right?

Hastings: Sure. China will be tough but other countries offer a lot of opportunity.

8:36 am: Kara: Explain your original programming strategy. Also, will you save “Firefly”? Walt Mossberg’s son really wants you to do that.

Hastings: “Firefly” is very interesting. 10-year-old show that lasted one season. That shows wasn’t getting monetized at all, and now we’re paying Fox for it. It’s a good example of what we can do for content guys.

As far as original content, what we want is prior season for all the big shows. We have some Showtime, we’d like to get HBO.

But back to our “House of Cards” show with Kevin Spacey. We’re not producing it, we’re licensing it. Really, we’d like to spend that money on Showtime and HBO shows, but they’re not taking it yet. So we’re doing this instead.

HBO won’t take our checks yet, because they’re not big enough. But we’ll get there.

8:40 am: Kara: More “House of Cards” deals coming?

Hastings: Yep. We’ll do a few things. Serialized shows, where you can go back and catch old shows, those are good for us.

8:41 am: Kara: What do you think about competitors like Hulu?

8:42 am: There are a lot of players on the Internet, but “mostly we don’t compete with each other. We compete for time and hours” with cable and satellite. When you sit down, “you pick up one remote or another.”

8:43 am: Kara: What about mobile, other platforms?

Hastings: TV is most important for video, as opposed to music, which works well on mobile. In coming years we’ll be on lots of Web TV app stores.

8:45 am: Kara: What’s up with tablets? It’s a big deal, right?

Hastings: Meh. Apple TV is more important for us. Tablets not a revolution. The big deal for us is Internet-connected TVs.

8:47 am: Also big for us is fiber optic density. It’s “phenomeonal.” Outstripping Moore’s law. What Google is doing in Kansas City with broadband is amazing.

8:48 am: Kara: What about these stories that say you’re clogging the Internet?

Hastings: We prefer to say that “consumers are choosing Netflix.” We don’t put any strain on backbone at all–it’s only a last-mile thing.

8:48 am: Kara: Hey, you’re on the Microsoft board. How’d you get there?

8:49 am: They wanted someone from tech, and they compete with everyone, so they ended up with me.

Kara: What about what David Einhorn just said about Ballmer?

Hastings: Best thing for me to say is no comment.

8:50 am: Kara: How long will you run Netflix?

Hastings: Dunno. “At least for forseable future, I’m definitely in.”

8:50 am: I do worry about companies becoming long in the tooth. It happens to everyone, and that’s why we spend so much time on culture and talent density.

Kara: What’s talent density?

Hastings: Smallest number of highly talented people possible. We don’t dream of thousands of engineers. We want a small number of great ones.

8:53 am: Q&A:

Q: Your selection of old movies doesn’t seem that great, and Amazon seems better. What am I missing?

A: We have just about everything on DVD. If you want to rent a movie, you can get what you want from Apple, etc. If you want unlimited streaming, which we offer, it’s a much smaller universe. If you want Terrence Malick films, you’re going to have to go to DVD and Blu-ray. We can’t do unlimited streaming of everything for $7.99 a month.

Q: Would you raise prices for people who want more?

A: Nah. Our strength is our focus. We can’t try to be comprehensive like Amazon, that’s their strength.

Q: A while back you told Whitney Tilson to cover his short, and he did. What do you think about other public companies communicating to investors like this?

A: I’m not trying generally to battle with shorts. I think shorts are healthy. I just didn’t want Whitney to get hosed.

Q: You’re competing with Comcast via the Internet. When do you think they’ll start competing on the Web, too? (If I understood Q correctly.)

A: Hastings repeats mantra that he’s not going to be a cable competitor, but a complement.

Q: What’s the show you really, really want to offer?

A: “The Wire.” (Right!) But’s it’s an HBO show. Won’t get it without a big, big check.

Q: I don’t care what the stats say, I see kids cutting cable, not getting cable.

A: Cable guys added subs last quarter. If it did start shrinking, then there would be a much bigger battle. “But it’s not happening.” Maybe with some kids, but once kids get a job, they hook up. Maybe in 50, 100 years it’s an issue. Goes on to explain how great cable is. (Hear that, Comcast?)

Q: Would you offer news, sports, stuff that cable offers?

A: Nope. We want to be focused. We could do how-to stuff, for instance, but that doesn’t make sense for our brand.

Q: Could you start another brand?

A: We could do that. We have no plans to do that, and it’s not likely.

“We’re going stick in movies and TV shows.”

Q: Lots of companies want to get online-video ad dollars, please talk about that.

A: Video ad market will be big, but we’re not going to play there. Will help us differentiate over time from the ad-supported guys.

Q: Thanks for picking up “Firefly”! It’s awesome! Also: What do bandwidth caps mean for you guys? Also, please talk about net neutrality.

A: In general, the Internet is going to grow. We’ll have a gigabit for everyone within 10 years. “The world is going to get fiber everywhere.”

Q: Should the U.S. be speeding fiber deployment to homes?

A: Not going to happen in the U.S.

Q: Why isn’t Netflix social yet?

A: It should be. We launched Netflix Friends in 2005. That didn’t work. People want to use Facebook. “We’re working now to figure out the right integration with Facebook” with proper privacy controls. Think of it as a “five year” plan, at least, to integrate into Facebook, social networks.

Q: Licensing content kills most tech companies. You made it work. “What would you do if you were God” to change rules on content licensing?

A: Well, it’s worked well for us so far. Content companies want to make money. If you can help them, it works out. We’ve very proud that were outcompeting piracy in the U.S. Love to see if we can do it in Korea.

]]> http://allthingsd.com/20110601/netflix-ceo-reed-hastings-live-at-d9/feed/ 0 http://allthingsd.com/20110601/another-magazine-publisher-tries-a-non-magazine-ipad-app-esquires-hardest-puzzle-ever/ http://allthingsd.com/20110601/another-magazine-publisher-tries-a-non-magazine-ipad-app-esquires-hardest-puzzle-ever/#comments Wed, 01 Jun 2011 10:30:17 +0000 Peter Kafka http://allthingsd.com/?p=80630 Magazines on the iPad haven’t blown anyone away yet, though the publishing industry is hopeful that deals to sell subscriptions on the tablet will give things a kick start.

But there’s another way for magazines to approach the iPad: Sell apps that aren’t magazines.

The idea is to take the publishers’ powerful brands and intellectual capital, and make something that isn’t a digital replica of a print publication.

We’ve started to see these over the last six months, and I think we’re going to see many more. Today’s example: Esquire’s “Hardest Puzzle Ever.”

The app springboards off some brainteasers the Hearst magazine has run in the past, but it’s an entirely new product–half Rubik’s Cube, half trivia game. It’s free, but after the first level you’ll need to shell out $4.99 (once) to keep going; there’s also a free minigame sponsored by Lincoln.

I only got a few seconds with the app the other day, and found it awfully frustrating. But I’m also one of those people who has never, ever solved a Rubik’s Cube without breaking the thing apart, which isn’t really solving it. So maybe this one isn’t for me. (I do like trivia, though! Maybe I needed a “Not the Hardest Puzzle Ever” version.)

In any case, I like that Hearst is taking a crack at this, and that it plans to do other one-offs. It’s easy to imagine an Esquire drinks app, fashion app, etc.

]]> http://allthingsd.com/20110601/another-magazine-publisher-tries-a-non-magazine-ipad-app-esquires-hardest-puzzle-ever/feed/ 0 http://allthingsd.com/20110519/how-to-sell-an-itunes-subscription-charge-a-few-bucks-a-month-or-nothing-at-all/ http://allthingsd.com/20110519/how-to-sell-an-itunes-subscription-charge-a-few-bucks-a-month-or-nothing-at-all/#comments Thu, 19 May 2011 11:41:26 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=32994 Article of faith for content companies: If they take stuff that’s free on the Web and put it on a mobile gadget, they can get consumers to pay for it.

Sort of true, says Nielsen.

Nielsen’s latest survey of “connected device” owners–basically, people who own smartphones and iPads–shows that they’re willing to shell out money for movies, music, magazines, etc. Sometimes. If the price is right.

Essentially, Nielsen finds the price point sweet spot is $9.99 a month or less for monthly subscription services. Except when it’s not: For news, streaming radio and sports services, most people say they won’t pay anything at all.

Here’s the question Nielsen asked device owners: “For each of the media content types that you could potentially access through your connected devices, please indicate how much you would be willing to pay for a monthly subscription to access it.”

And here are the results (click the image to enlarge):

Caveats: Again, this is what people say they’re willing to pay, not what they’re actually paying for–it’s poll data, not sales data.

And because it’s about subscription services, much of this is theoretical, anyway–most of the content people are getting on their phones and tablets comes via free apps, or those paid for with a one-time purchase.

But we should be getting real world data we can match up against this survey data soon: Apple has started to roll out its subscription services via iTunes (next month is a crucial deadline for content owners who want to distribute subscription services on iOS) and Google’s Android is headed that way, too.

]]> http://allthingsd.com/20110519/how-to-sell-an-itunes-subscription-charge-a-few-bucks-a-month-or-nothing-at-all/feed/ 0 http://allthingsd.com/20110517/hulu-for-magazines-opens-its-android-newsstand/ http://allthingsd.com/20110517/hulu-for-magazines-opens-its-android-newsstand/#comments Wed, 18 May 2011 04:01:35 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=32943 Apple has won over some of the big magazine publishers, who have reached deals to sell subscriptions via iTunes. But it’s not an exclusive arrangement: Now the magazine guys are starting to sell on Google’s Android, too.

Starting Wednesday, some Samsung Galaxy tablet users will be able to buy app versions of seven magazines, as single copies or monthly subscriptions. The deal comes via Next Issue Media, the “Hulu for Magazines” consortium five big publishers put together to build their own digital newsstand.

This is a cautious first step, with lots of caveats, and Next Issue is taking pains to play down expectations, calling it an “early preview.”

And by my calendar, it’s a bit behind Next Issue’s previously announced plans to have something in the market early this year.

But it’s still something. And you could argue that while the digital magazine market formally kicked off last year when Apple introduced the iPad, it’s been moving pretty slowly since then. So Next Issue really hasn’t missed that much.

Details:

• Four of the consortium’s partners are selling titles: Esquire and Popular Mechanics from Hearst; Fitness and Parents from Meredith; the New Yorker from Conde Nast; and Fortune and Time from Time Warner’s Time Inc. News Corp., the other partner, doesn’t publish any print magazines (they do own this Web site, though).
• Prices are set by publishers, who will be able to offer existing print subscribers free digital editions. For now, though, they can’t offer new subscribers print + digital bundles like the ones that Conde Nast has started selling via iTunes. Next Issue CEO Morgan Guenther says that’s coming, along with the possibility of more interesting offers, like Netflix-style subscriptions that let customers swap titles in and out.
• The titles are only available to Galaxy owners who have bought a model with wireless service from Verizon, which sells the titles through a single app available in its Vcast app store.
• Next Issue plans to offer more magazines, on more devices, in the fall. CEO Morgan Guenther says that by the end of the year the consortium will be selling at least 40 titles, and should also have a version of its app available for HP’s WebOS.
• Apple gives publishers 70 percent of each transaction, and Guenther says magazine publishers will get “at least” that much; device-makers or carriers will split the rest with the consortium.
• Crucially, the publishers will get full access to all subscriber information, including credit card numbers. Apple won’t do that.

Again, these magazines will only be available to a subset of a subset of Android tablet owners, which isn’t that big a market to begin with, for now.

But it is a working demonstration of the concept the consortium promised way back in 2009: A single place to get magazines from multiple publishers, controlled by the publishers themselves.

And theoretically, selling magazines on the terms they want on Android will give the publishers more leverage to get what they want from Apple. But they’re a long way from getting Steve Jobs to back down from his terms–let’s see how sales play out on the two different platforms first.

]]> http://allthingsd.com/20110517/hulu-for-magazines-opens-its-android-newsstand/feed/ 8 http://allthingsd.com/20110508/apple-brings-conde-nast-aboard-the-subscription-bandwagon-starting-with-the-new-yorker/ http://allthingsd.com/20110508/apple-brings-conde-nast-aboard-the-subscription-bandwagon-starting-with-the-new-yorker/#comments Mon, 09 May 2011 05:15:38 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=32605 Apple is winning over the big publishers. Last week, Hearst Corp. said it planned to start selling its magazines using Apple’s new iTunes subscription service. Now rival Conde Nast is actually doing it, via the publisher’s New Yorker title.

An updated version of that magazine’s iPad app lets users subscribe to the weekly magazine for $5.99 a month, or the equivalent of a $1.50 an issue. That’s a steep discount from the app’s old model, which only sold individual issues for $4.99 a pop.

Conde Nast is selling an annual subscription to the iPad app for $59.99; a yearly subscription to the print version of the magazine costs $69.95. Very important: Conde says print subscribers will get iPad access for free.

At least, I think that’s the case. I’m basing all of this off the New Yorker app’s description in iTunes, but I haven’t been able to get the updated app to work yet on my iPad. The information syncs up, though, with what both AdAge and the New York Post reported last week. (UPDATE: After some futzing about, I’ve got it to work, as advertised. The app still allows you to buy an individual copy for $4.99.)

Assuming Hearst goes through with its plans, Time Warner’s Time Inc. will be the most conspicuous magazine holdout. Time Inc. and Apple just agreed to a deal that allows print subscribers to get app versions of Sports Illustrated, Fortune and Time for free, but they still haven’t agreed to subscription terms–which they’ve been stuck on since last summer.

Other big print publishers who have agreed to Apple’s terms include the New York Times, which has said it will start using iTunes to sell subscriptions in June. In February, Conde also announced it would sell digital editions of its magazines for Google’s Android platform, but has yet to do so.

Publishers–and other media companies–have previously balked at both Apple’s proposed cut–it will take 30 percent of each sale–and its control of subscriber data, including credit card information.

But it’s possible that Apple has backed off some of its original terms. Last week Hearst suggested it had gotten Apple to modify at least some of its conditions. And if that’s the case then Apple may be offering revised terms to all subscription partners. I’ve asked Apple and Conde Nast for comment.

The notion of iPad apps enthralled magazine executives a year ago, but sales have been underwhelming for many titles. One common complaint: Publishers have sold the digital titles at the same price as paper-and-ink versions, while most customers have expected to buy them at a steep discount, and to get them free with existing subscriptions.

Now that big publishers are starting to actually do just that, we’ll see if sales improve.

UPDATE: Just got some clarity on the agreement Conde hammered out with Apple. Apple’s fundamental proposition hasn’t changed, but the publisher has gotten a few concessions out of Steve Jobs and Co. Examples via people familiar with the publisher:

• Apple still controls crucial subscriber information, and only allows Conde Nast to ask for name, zip and email. But the publisher now has two chances to ask for user’s email: The first as a standard opt-in screen, and then again on a screen that asks for email and a password in order to get exclusive content.
• Conde has more flexibility on pricing than Apple originally offered. For instance, at one point, Apple didn’t want the publisher to be able to offer a print+digital bundle at a $10 premium to digital-only, but wanted all prices to be the same (which they will be when GQ offers subscriptions later this month: $19.99 a year for digital-only, or digital + print).
• The agreement extends to international markets, etc.

Small stuff, but important to the publisher. Meanwhile, Apple gets what it wants without giving up much it cares about. Steve Jobs wins.

]]> http://allthingsd.com/20110508/apple-brings-conde-nast-aboard-the-subscription-bandwagon-starting-with-the-new-yorker/feed/ 11 http://allthingsd.com/20110504/hearst-strikes-deal-with-apple-on-ipad-subscriptions/ http://allthingsd.com/20110504/hearst-strikes-deal-with-apple-on-ipad-subscriptions/#comments Wed, 04 May 2011 22:29:11 +0000 Russell Adams http://voices.allthingsd.com/?p=40580 In a big win for Apple Inc., magazine publisher Hearst Corp. has agreed to sell subscriptions to the iPad editions of a range of its publications through iTunes, beginning with three of its popular magazines, the publisher said.

Starting with their July issues, apps for Esquire, Popular Mechanics and O, The Oprah Magazine, will be available through a new service from Apple that allows customers to sign up for subscriptions inside the apps and get billed automatically. Subscriptions to all three publications will be sold for $1.99 a month or $19.99 a year.

Hearst said it will eventually sell newspaper apps and other content it owns on a subscription basis through iTunes too.

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]]> http://allthingsd.com/20110504/hearst-strikes-deal-with-apple-on-ipad-subscriptions/feed/ 0 http://allthingsd.com/20110501/time-inc-in-ipad-deal-with-apple/ http://allthingsd.com/20110501/time-inc-in-ipad-deal-with-apple/#comments Mon, 02 May 2011 05:49:44 +0000 Russell Adams http://voices.allthingsd.com/?p=39649 Time Inc., the country’s largest magazine publisher, has reached a deal with Apple Inc. to make all its iPad editions free for print subscribers, marking a break in the impasse between publishers and Apple and lending support to Time’s contention that it’s business-as-usual after the ouster of its chief executive.

Starting Monday, subscribers to Sports Illustrated, Time and Fortune magazines will be able to access the iPad editions via the apps, which will be able to authenticate them as subscribers. Time Inc.’s People magazine already had such an arrangement, but readers of most publications have had to pay separately for the iPad version regardless of their subscriber status.

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]]> http://allthingsd.com/20110501/time-inc-in-ipad-deal-with-apple/feed/ 0 http://allthingsd.com/20110411/bloomberg-signs-up-for-apple-subscriptions/ http://allthingsd.com/20110411/bloomberg-signs-up-for-apple-subscriptions/#comments Mon, 11 Apr 2011 10:30:24 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=31629 Here’s another name-brand media company signing on for Apple’s iTunes subscription service: Bloomberg, via its Bloomberg Businessweek magazine iPad app.

Stuff you need to know:

• The pricing makes sense: $2.99 for a four-issue digital subscription, versus $4.99 at newsstands–and, just as important, close to the $0.77 an issue price for an introductory print subscription. Also sensible: Print subscribers get the digital version free.
• Unlike other magazine apps, Bloomberg isn’t straining hard to add multimedia bells and whistles: There’s an introductory video with editor Josh Tyrangiel, and an audio interview featuring Charlie Rose, but the rest of the design is as utilitarian as the print version–no 3-D animation here.
• That stripped-down design means the app will only run a modest 30 megabytes per issue.
• Unlike other publishers, Bloomberg isn’t making a point of reaching out to Apple’s competitors: It’s not promising to launch on Google’s Android or any other platform soon. Instead, it notes that 17 percent of the print magazine’s subscribers already own iPads.

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