Video #1:
In this clip we hit up the GDGT Launch Meetup party to find out what the coolest tech and gadget gifts are for 2009, and chat briefly with company founders Peter Rojas and Ryan Block.
Video #2:
In this clip we get a peek at the latest in the Blackberry Curve family with a look at the new 8520 smartphone. I also asked Blackberry about the Apple iPhone rivalry is affecting them, though it’s worth noting Blackberry’s sales since the iPhone launched have soared exponentially.
Video #3:
In this clip we check out the 2009 GDGT Launch Meetup to get up to date on the latest tech gadgets including head-mounted HD camera (Contour HD), printers and portable TV.
Video #4:
In this clip we talk with a Playstation fanatic for his top 5 games and Al De Leon from Sony Playstation to find out whats in store for the PSP in 2010.
From AdAge.com:
Warner Music Group is calling on a startup to help execute the lynchpin in its new approach the web. The company struck a deal with Outrigger Media, a small group spun out of video site Veoh, to package artists such as Madonna, Ashley Tisdale and Green Day for advertisers.
Hmmm… what happened to Veoh? Read more about the story. But seriously, Veoh’s raised $99M, I would not spin anything out of it, I would be cramming things into it. There is an accounting/legal reason to do this, but it doesn’t look good for Veoh if that is the case.
MySpace is about to buy iLike to galvanize its leader in music, and the deal, if it goes through, is a sign of the times for 2 reasons:
1 - At a rumored $20M price tag, the deal is anything but a hit, from TC:
The company has raised a total of $16.5 million from the founders, Scott Banister, Bob Pittman, Vinod Khosla and Ticketmaster to date. But their last round of funding was in 2006, where Ticketmaster put the bulk of the capital in via a third round of financing that valued the company at a whopping $53.2 million.
In Q4 2008 Ticketmaster wrote down a number of their venture investments, including a $5.8 million charge for iLike. Internally, they valued that $13.3 million investment at just $7.5 million. Last month we reported that iLike was considering a new round of financing that would cash TicketMaster out of the company.
But, music is a bitch to monetize and everyone is facing down rounds… which is a major threat to VCs, in my opinion, as entrepreneurs will rather walk than see their already squeezed ownership stakes get diluted even further.
2 - Distribution over Destination
You will see more and more companies look to extend their reach outside of their owned and operated properties. iLike is the top music application on every social network (including Facebook) aside from MySpace, which owns MySpace music.
Ultimately, with the exodus of talent from MySpace, I think a major driver here is the talent that will come with the deal, namely: Ali Partovi, Hadi Partovi and Nat Brown, and the underlying technology.
When CBS hired Quincy Smith to head up its online efforts, the former Netscape dealmaker and Allen & Co. investment banker joked that CBS’ efforts at building a video destination called Innertube might have been called CBS.com/NoOneComesHere.
Lacking much presence online (as in, it was not in the Top 10 properties) it then embroached a “distribution over destination strategy”, launching the CBS Interactive Network. Indeed, with online video it is possible to build distribution on third party sites (as we’ve done quite well) but near impossible to build a destination without considerable investment.
Then, of course, it bought CNET for $1.8B - something that we called a couple of months before the deal was announced.
While the meltdown in media stocks (and all assets, in fact) might make that deal seem foolish in the present - even CEO head honcho Les Moonves said he might not pull the trigger on that deal if he knew how much equity prices would tumble and ad market would slow down - long term it will prove to be a decent buy, as it catapulted the Tiffany network into the Top 10 rankings of largest Web properties (Last.fm, the other $100M+ deal it did also helped, of course). Another reason why it was a savvy deal was the portfolio of URLs that over time should prove accretive, too.
With the Web 2.0 era firmly a bust, you will see the merits of a 1.0 notion - the portal - return. As such, with the large Web audience under its wings, today we get confirmation that CBS will toss its hat in the ring by relaunching TV.com and take on (though the corporate spin might very well be that they’re not competitors, etc.) Hulu, Joost, Sling.com, etc… while success in these endeavors is anything but certain, if CBS can leverage its content to build something of value and hatch a successful destination at TV.com, then it might make everything else it got in the CNET deal the cherry on the sundae. After all, it has been reported that Hulu.com might generate more revenue in 2009 than Google’s $1.65B pet project YouTube will…
TV.com’s success is anything but guaranteed, but this does seem to prove a nice lesson: with the right content, you can always catch up on distribution and build a destination yourself… but without the right content, you’re dead on arrival. Of course, it helps to make one key acquisition, regardless of its form.
Disclaimer: Joost, YouTube, Hulu, Sling are all WatchMojo.com’s distribution partners.
YouTube vs. Hulu? That is the question record labels are asking themselves as they look for options to tackle declining offline sales and piracy.
Actually, there is a third option, which is building their own Hulu-style site. Hulu is a NBC and News Corp.-backed joint venture.
Ultimately, the conundrum for the labels is “which option will drive higher revenues?”
Somewhere in all of this we should mention that News Corp. has recently launched MySpace Music, which has a legitimate chance of being a major player in music; it already is, of course.
The Specific Reality Facing Music Labels
Music labels are going about this latest fork in the road in the wrong manner, as always. Hulu vs. YouTube vs. Proprietary Site is the wrong question to ask, which in turn will yield the wrong answer. We’ve already covered why from a business model perspective the two properties are different, but even from a partnership perspective, they are vastly different. WatchMojo.com distributes content to both companies, by the way. With a new media company, individual distribution channels can over time generate incremental revenues that, when taken as a whole across all distribution partners, can represent a meaningful revenue stream.
But honestly, neither site will drive enough revenues for the record labels. Let me explain. Music executives have seen billions of dollars in sales evaporate in the face of piracy. As such, nothing online can represent a meaningful alternative to the analog dollars they’ve lost. Not ringtones, not digital downloads, nothing. Of course, digital media is a more profitable distribution strategy, so if the music companies cut costs, they can remain wildly profitable. That they have chosen to stick to their old ways with their cost structures is consistent with their desire to stick to outdated distribution models.
The reality is that music piracy means that if someone really wants to find a particular tune, they can do so quite easily. Napster made it easy, YouTube makes it easier (even if of course, they don’t encourage it). So for music companies, they have to find a way to make it as easy to be found and make their offerings of higher quality. The only way to win and remain relevant is by doing both. Then by doing both, does the revenue factor become relevant.
Over time, yes, if the labels aggressively and frequently publish online, then they can generate meaningful revenues, especially if they then hire sales teams to sell the inventory and get creative with ad packages. But to add a 100 or even 1,000 clips from their respective catalogs and then expect a million dollar check is a recipe for failure.
Option 1: YouTube
Labels have to be on YouTube because YouTube has such a huge audience that it literally will be their loss if they’re not on it.
Option 2: Hulu
Do they have to be on Hulu? Not yet, because Hulu is basically become a TV show hub.
Awareness, Relevance and Revenue
We distribute our content to both, but I personally don’t think anyone goes to Hulu for made-for-Web programming such as ours, so the hundreds of thousands of streams that we generate on Hulu are bonus; whereas the millions of streams we generate on YouTube become part of our overall business strategy.
I think if labels want to unleas the value of their catalogs, they need to be online, so they should look at being in more places than less. But this might not translate into revenues, which means they won’t stick to it over time.
Missed Opportunities
The music labels have essentially missed every major opportunity since the 1980s, starting with MTV. To read more on why MTV was in fact a missed opportunity, read this.
But they then botched Napster, digital music in general and even how they (and Viacom) are using MTV.com. After years of taking the MTV brand away from music (by playing anything but music), we are now seeing MTV.com trying to add music videos… but the convulated copyrights and distorted licensing deals means that in nations where the advertising growth rates will surpass that of the US, there is a good chance users see this:
Which is, by the way, what most people still see on Hulu… explaining why despite the top notch programming, YouTube remains king of the hill.
Strange Bedfellows
I personally think that FOX and NBC will eventually spar over Hulu (they own the venture 50-50%) because while FOX has to decide if it wants to push MySpace TV (and increasingly MySpace Music) over Hulu, NBC has been loading the site with content from SNL and other shows. But ultimately, I will go against the grain and say that Hulu will hit a wall because the business model for a “rerun hub” is limited, and TV companies - while desperate - are not stupid enough to totally embrace online because I am not even sure of the online pennies that await them are over time going to become dollars, let alone replace the analog dollars they are losing.
Option 3: Build it and they will come?
So this leaves option 3, creating their own Hulu-style site.
Well, back in the day, Bertelsmann decided to tame Napster by investing in it and bringing it over to the dark side. Instead of aligning themselves with the leading online file sharing network, the other record labels tagged team against Bertelsmann and killed Napster. By doing so, they let Gnutella and KaZaa grow and those non-centralized P2P networks made Napster look like a RIAA project.
The point being: the labels disdain of consumers is only rivaled by the disdain and distrust they have for one another…
I think media companies are the same way. As the Web develops and becomes more regulated, the media companies’ foes go from these “rogue properties” to one another.
NBC and News Corp. deserve a lot of credit for putting aside their differences and bringing in Jason Kilar to run the company without necessarily operating under the thumb of either company’s senior management.
But over time, I expect that to change, because traditional media firms are getting increasingly desperate in the face of the severe market meltdown they faced in 2008 and the “acceleration of the deceleration” of their traditional revenue streams in 2009.
To quote Al Pacino’s character in Any Given Sunday, as you get closer to the end zone, every inch becomes harder to gain. For the media companies, it might become easier to start pushing one another out of bounds instead of trying to get ahead of the new media reality avalanche that is catching up to their business models.
With our 2009 predictions out of the way, we’ll be publishing a number of previews per sector and by theme over the next few days to close out the year. For the last item, we’ll exceptionally look back at the year that was for the company and look ahead for 2009.
Here’s the tentative list:
Monday December 22 2008 - Video
Tuesday December 23 2008 - Online Advertising
Wednesday December 24 2008 - Social Networking
Thursday December 25 Wednesday December 31 2008 - Venture Capital
Friday December 26 2008 TBD - Mergers & Acquisitions
Saturday December 27 2008 TBD - Search
Sunday December 28 2008 TBD - Digital Music
Monday December 29 2008 TBD - Wireless
Tuesday December 30 2008 TBD - The Economy
Wednesday December 31 2008 TBD - WatchMojo.com 2008 Year in Review and 2009 Preview
It’s official: record labels are making a lot of money on YouTube, from CNET:
Universal’s YouTube channel is overwhelmingly the largest on the video site. The record label is the all-time most viewed channel, with nearly 3 billion views. Second-place Sony BMG, the second largest recording company, trails by more than 2 billion views with 485 million total views.
Of the top 10 channels on YouTube, 7 are music related. They include channels from Warner Bros. Records, Soulja Boy, and Disney’s Hollywood Records.
Only a few years ago, the record labels saw music videos as promotional vehicles only. Some argue one of the music industry’s biggest mistakes was giving videos away to MTV nearly 30 years ago.
That’s the key: the lesson from MTV was simple, by giving away the music or licensing it, the revenue the labels earned was capped, while MTV reaped the upside. With YouTube, the labels stand to gain on the upside. Of course, with YouTube garnering over 50% of the streams online, I am not surprised to see the following, either:
A music industry source close to the label said Universal will likely book nearly $100 million in revenue from video streaming this year. That figure includes video-streaming money from all of the company’s partners, such as iMeem, MTV, and MySpace. The source said, however, that most of the cash comes from YouTube.
I won’t comment on specifics, but indeed, if based strictly on revenue share, then YouTube would lead the way. I think the record labels should get the smaller companies to chip in straight licensing fees, otherwise it becomes nearly impossible for the other destinations to generate tangible revenues, especially alongside YouTube’s contribution.
The fact that MySpace launched MySpace Music does create an intertesting storyline: after all, MySpace is kicking Facebook’s arse in the ad sales department, partially because they can leverage News Corp.’s sales organization whereas Facebook has to define a sales strategy and then build a team from scratch… so one has to ask: seeing how YouTube’s parent Google is a master of search advertising but a relative newbie at display/video advertising, can MySpace Music generate more revenue than YouTube?
Just asking.
Disclaimer: we provide video content to all of these sites… but we haven’t generated $100M thus far - not quite yet anyway…
Paid Content quotes Economist publisher Paul Rossi, who suggested at the Future Of Business Media conference last month:
Just 12 percent of European web users paid for online content last year, but that’s due to rise to 19 percent by 2013, a new Jupiterresearch report says: “While free content will continue to dominate, as overall online audiences for all content categories continue to grow, so the number of European users willing to pay for content online will grow at an even greater rate.”
That sounds like salvation for formerly premium publishers who had come out from behind their pay walls just in time for an advertising recession. But what’s driving it? A seismic shift in the number of people who will begin paying for music, Jupiter says. Though freeloaders outnumbered paying listeners by 53 million to 6.9 million last year, by 2013, it’s reckoned European efforts to drive consumers to legal downloads will see payers become the majority - 63.7 million against just 55 million. That’s one factor will drive paid content income to €5 billion in 2013, from €1.4 billion last year.
I ask: will consumers really shell for content? I think some will. But ultimately, I see the following being more likely:
I see aggregators licensing content from content owners as being far more likely than individual users paying content. Individual users will look for free options primarily… and be drawn to free models. I am not saying that distribution sites who aggregate content will be able to recoup the licensing fees initially, but they will create enough value to make it worth their while. We’ve seen many companies outright license content from us at WatchMojo.com, how many users would pay for the content? I am not sure.
Online music-focused social network Imeem is on the block, according to our sources, and has hired investment banker Montgomery and Co. to lead the sale. Coincidentally, we have also learned that the company is announcing some layoffs internally today—as much as 25 percent of its around 80-strong workforce.
Imeem has raised above $50 million in funding over the last two years, including a $15 million round from Warner Music Group earlier this year. Other previously disclosed investors include Sequoia Capital and Morgenthaler Ventures…we have also learned that DAG Ventures was the last one to invest in the company this summer, with the valuation north of $200 million. They would probably like more than that, but with the current market, anything in nine figures would be, well, reality-rational.
It is worth noting that DAG did the last funding at $200M. Depending on what, if any, liquidation preference they put in the deal, it is very possible that the founders, management and employees will be wiped out in any deal.
This is why I would never agree to a liquiditation preference, frankly.
Disclosure: Imeem is one of WatchMojo.com’s distribution partners. We have absolutely no insight on the company’s layoffs etc.
MySpace is certainly this generation’s MTV. So it was pretty fitting that Sumner Redstone would seek to acquire MySpace, of course, as history would have it, Mr. Redstone’s foe Rupert Murdoch stepped in, outbid Viacom, and lo and behold, MySpace fell in News Corp.’s domain.
MySpace has gone on to become the largest music community, no doubt, and now they will have to give both Amazon and Apple’s iTunes a run for its money. Amazon is in the running to be powering the “Buy Music” function of the ad-supported site, by the way.
This should be getting interesting. Read more here and here. Tech Crunch is running with the rumor that MySpace will pull a Hulu and raise private equity/VC money and essentially spin off MySpace Music. Thus far, this paid off with Hulu, though I don’t think anyone within NBC or News Corp. (the owners of the joint venture that is Hulu) really know what the end game / outcome / exit will look like… but in a world where YouTube generated 5B monthly streams and owns the video space, who cares about end games and outcomes right now?
For this reason, considering just how bloodied the music industry has been, and the fact that Apple and Amazon basically own the online music, Rupert Murdoch’s strategy of opening up MySpace Music and sharing ownership with the media companies that own the intellectual property (the muzzak) is a wise bet, after all, Hulu’s content library was helped considerably thanks to NBC and News Corp.’s vaults.
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