Cynopsis: DIGITAL

05/15/09

Good morning, it’s Friday, May 15, 2009, and this is your first early morning digital briefing. 

In tough economic times TVs and gadgets aren’t high priorities, particularly ones priced above the competition. Japanese electronics giant Sony registered its first annual loss in 14 years, reporting a $1 billion loss for FY2008 and predicting further losses for the coming year. Sony is losing on so many fronts to (often lower priced) competitors, including Nintendo in gaming, Vizio in the flat-screen TV market and the iPhone in the mobile phone space. The company plans to weather the storm by shuttering factories, laying off more than the 16,000 workers previously announced and taking a hard look at its line of high-end electronics. (Perhaps Microsoft’s “but we’re cheaper” ad campaign makes sense after all; the company began pitching the Zune as a cheaper alterative to the iPod this week because its monthly subscription eliminates the need to purchase tracks.)
 

 
Amazon unveiled its Kindle publishing program for bloggers, offering registered publishers the same 30% of the subscription proceeds it is offering major publishers. Like Apple with iTunes, Amazon reserves the right to determine pricing, saying it will set the price “based on what we deem is a fair value for customers.” (And no, you can’t offer your blog for free.) The platform supports English, Spanish, French, Italian and German. The company also launched AmazonEncore is a new program mining customer reviews to identify exceptional, overlooked books. Amazon will partner with individual authors to re-introduce their books to readers offering marketing support and distribution into multiple channels and formats, including the Amazon Books Store, Kindle Store and Audible.com.
 
Hispanic video portal Terra TV completed a relaunch featuring higher quality 16:9 ratio video and new exclusive digital content in news, entertainment and sports categories. Terra TV is also available to users in RSS and iPhone formats, as well as on social networking sites such as Facebook and Orkut. The next step for portal is the “Atom Project,” providing more interactive navigation with improved functionalities.
 

 
Online video entertainment center application Boxee launched a developer’s challenge to motivate developers to create cool apps around its newly-opened API. Apps submitted in Video, Music and Photo categories will vie for a peoples choice award as well as a judged award in each category. Voting will take place between June 15 – June 22 and the winners will be announced at a Boxee event in San Francisco on June 23. (Top prize is one of those high end Sony TV’s that haven’t been selling so well as of late.)
 
Web producers are finally getting to play around with special effects. The prolific Hayden Black signed a deal with Paris-based video sharing site Dailymotion. The latter will host his next original web series, a musical comedy/sci-fi hybrid. “Think Hitchhikers Guide meets Flight of the Conchords, and you’re halfway there,” writes Hayden in the production blog. The 15-episode The Cabonauts is due later this year on Dailymotion.
 

 
Group M’s Mindshare has enlisted the talents of 30 Rock star Jane Krakowski to star in a series of new webisodes to promote Breyers’ Smooth and Dreamy brand. In modern takes on “Gone with the Wind” and “King Kong,” Krakowski comes face-to-face with Rhett Butler and King Kong. The site includes a UGC component, allowing users to upload a photo, and face-mapping technology from Oddcast will place them in the webisodes to participate in the iconic movie scenes.
 

 
Ouch. The EU levied a record $1.45 billion fine against chip maker Intel for antitrust violations as the body sent a strong message that tech companies will not be allowed to conspire with one another to shore up dominant positions in the PC market. Intel was cited for offering rebates to large computer manufactures to entice them to use their microprocessors.
 
With only 30 days left to the (once delayed) June 12 digital transition, the FCC is deploying a full-court press to increase awareness. About 180 FCC employees have been dispatched to communities in 49 markets that are home to the greatest concentrations of unprepared
households. FCC staff members are working with local governments and community-based organizations to get the word out, hosting events and staffing walk-in centers and help clinics. About 3.3 million or 2.9% of U.S. households are still unprepared, according the latest Nielsen findings. 
 
WiMax venture Clearwire shuffled its management once again (see below) and said it was on track to launch high-speed wireless broadband services in a number of new markets this year, including Atlanta in June, Las Vegas this summer and Chicago, Philadelphia and Dallas/Ft. Worth sometime later this year. Clearwire reported a Q1 loss of $71.1 million on revenues of $62.1 million, adding 25,000 net new subscribers for the quarter.
 
The French Parliament finally voted to approve the so-called three strikes measure this week, per The NYTimes. The hot potato bill enables ISPs to suspend the internet service of subscribers caught using P2P file sharing services three times.
 

 
YouTube maintained its dominance in the online video space accounting for 58% of all videos streamed in April, according to Nielsen Online. Yet longer-form portals such as Hulu and ABC.com have made terrific gains in the past year, their streams up 490% and 144% y/y respectively. Meanwhile cable brands such as MTV, Nickelodeon, Turner and CNN continue to gain market share in their perspective categories. MySpace owner FIM and Yahoo’s total streams have dropped by 38% and 8% respectively during the past year.
 
Top Online Video Brands Ranked by Total Streams – April 2009
Including Month-over-Month and Year-over-Year Growth
Video Brand             Apr-09 Streams (000)  M/M % Change Y/Y % Change Share of Streams
Online Video Usage          9,452,996                     -2.3%             24.2%            100.0%
YouTube                       5,490,204                       0.2%             35.5%              58.1%
Hulu                                373,290                       7.1%           490.4%                3.9%
Yahoo!                            203,628                     -12.2%            -8.1%                 2.2%
Fox Interactive Media         201,362                       -3.0%          -38.8%                 2.1%
Nick Kids and Family           175,917                      -10.3%          15.9%                 1.9%
MSN/Windows Live             164,422                        -2.7%            9.8%                1.7%
ABC.COM                          148,830                      -15.9%         144.8%               1.6%
MTV Networks Music          143,356                        15.7%         359.6%              1.5%
Turner Digital Network        130,559                        -5.1%           60.0%               1.4%
CNN Digital Network            112,469                         8.7%           32.7%               1.2%
Source: Nielsen VideoCensus
 
Perhaps more significantly for advertisers, viewers are spending more time viewing videos online. Hulu itself has seen average time spent by viewers spike by 119% during the past 6 months, from 147 minutes in November 2008 to 325 minutes in April 2009. Much of the growth came from the 35-49 demo, according to Nielsen, demonstrating increased comfort with online viewing among older users. In April 2009, three of the top five sites­Hulu, ABC.com and NBC.com­ranked by time spent viewing among people 35 to 49 were sites with long-form video. Compared to six months ago, only one of the top five was a long-form video viewing destination.
 
Top 5 Sites for People Aged 35-49 by Time Spent Viewing April 2009 vs Nov. 2008
                                  Nov-08                                                       Apr-09
Site                  Time Spent Viewing (000)                 Site         Time Spent Viewing (000)
YouTube                   2,740,328                           YouTube              2,983,430
Hulu                           372,407                               Hulu                   933,252
Megavideo                   225,325                          ABC.COM                 313,483
CNN Digital Network       153,705                          NBC.com                 215,302
Nick Kids and Family       143,086                   CNN Digital Network         187,471
Source: Nielsen VideoCensus
 

 
iPhone users were miffed this week when AT&T decided to disable 3G streaming capability from the popular SlingPlayer app. The Sling Media application allows Slingbox users to access recordings remotely from the iPhone from anywhere in the world. The company released an official statement explaining that such usage clogs up the 3G network and is “specifically prohibited under our terms of service.” SlingPlayer users can still access video over WiFi, where many fear video watching is likely to relegated for the phone in the future.
 
Verizon Wireless is releasing a Wi-Fi ready HP netbook this weekend for $200 with a $50 mail-in rebate and a two year service commitment – its first subsidized 3G computer and a new low for a full-function laptop. The H-P Mini 1151NR features 1GB of RAM, an 80GB hard drive, an Intel 1.6GHz Atom N270 processor and a 10-inch screen and weighs just 2.45 pounds.
 
E! Online launches its first free iPhone and iPod app today powered by Rhythm NewMedia. It features real-time celebrity news updates, including breaking “E! News Now” videos. The “My Celebs” feature allows users to create a customized news page to focus in on their favorite celebrities. Rhythm NewMedia and Comcast Network Sales will sell interactive pre-roll ads for the app.
 

 
MXP4, Paris-based developer of interactive music technology and applications, appointed former GM of Vivendi Mobile Entertainment and Musicwave founder Albin Serviant  as its new CEO. Gilles Babinet, co-founder of MXP4, takes on the role of Chairman. The company also announced the additions of former EMI Music International CEO JF Cecillon and DivX co-founder Jordan Greenhall to the MXP4 board.
 
Kirkland, WA-based Clearwire named three new executives to its management team: G. Michael Sievert will join as Chief Commercial Officer overseeing wholesale and retail sales, marketing and customer care; Kevin Hart will serve as Chief Information Officer handling IT operations; and Laurent Bentitou comes on as Chief People Officer, an HR role. The company also announced additional role alignments for a few of Clearwire’s existing management team. Barry West, who most recently served as Clearwire’s President and Chief Architect, has been named President – International, and will continue to report to newly named CEO Bill Morrow. John Saw, who remains CTO, has been given the expanded responsibility of overseeing the deployment of Clearwire’s broadband network and technologies, also reporting to Morrow.
 
Adam Nash has joined IdeaCast as SVP/National Sales in New York. Adam will report to Jason Brown, President of Sales and Marketing. Bruce Heim has also joined the company as VP/Strategic Partnerships. He will also be based in New York.
 

A CYNOPSIS MESSAGE

 
Any site that’s every experienced outages (for some reason Twitter comes to mind) must feel relieved to know that even Google goes down occasionally. Guessing the cause proved to be the parlor game of the day on Thursday as outages ran across all of Google’s properties including YouTube, Gmail, Google Analytics, Google Maps and Google Docs. After accusations flew wildly for a while, Google SVP/Operations Urs Hoelzle explained that the whole thing was caused by a “traffic jam” in Asia in a blog post, likening it to planes being held in a holding pattern. But the incident provided pause to a business world that is increasingly moving its operations to cloud computing services. Wait a minute – I see another Microsoft ad campaign in the works. “Come down from the clouds and by our new Office update.”
 
 Later — Wayne
 Wayne Karrfalt for Cynopsis: Digital
05.15.09

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