Speculation is running wild on the Web about Microsoft possibly building a content censor into the Zune software.
It comes as a result of a New York Times article that looked at why NBC pulled its TV content from Apple’s iTunes store and is now distributing it for the Zune.
NYT’s Saul Hansell writes:
Late Tuesday afternoon I reached J. B. Perrette, the president of digital distribution for NBC Universal, to ask why NBC found Microsoft’s video store more appealing than Apple’s.
He explained that NBC, like most studios, would like the broadest distribution possible for its programming. But it has two disputes with Apple.
First, Apple insists that all TV shows have an identical wholesale price so that it can sell all of them at $1.99. NBC wants to sell its programs for whatever price it chooses.
Second, Apple refused to cooperate with NBC on building filters into its iPod player to remove pirated movies and videos.
Microsoft, by contrast, will accept NBC’s pricing scheme and will work with it to try to develop a copyright “cop” to be installed on its devices.
Microsoft’s official word has been to deny this. According to Microsoft’s Cesar Menendez:
We have seen some chatter in the blogosphere over the last 24 hours around a couple of posts speculating about what Zune may or may not do in terms of putting content filtering features directly into the Zune family of devices in future releases.
We know you guys are following this discussion closely, and wanted to be absolutely clear on this issue:
We have no plans or commitments to implement any new type of content filtering in the Zune devices as part of our content distribution deal with NBC.
We think some folks in the industry were expressing hopes for how the entire industry, not just Microsoft, would come to look at content distribution, and some speculation has ensued. Again, no plans are in place toward this end.
Menendez’s comment are unlikely to clear up the controversy.
There Are Good Reasons To Fear Microsoft’s DRM & Content Filtering
DRM is still a major stumbling block limiting the consumption of digital video. With Microsoft’s dismal record with DRM’d media, the NBC deal is doomed to failure.
If NBC, and other networks, are serious about digital media, they are going to have to either figure out viable ad-supported free content models or go the way of the music industry, and sell unencrypted content that will work on any player.
HP today announced that it is making the video content of YouTube available through its MediaSmart “smart television” products, including the upcoming MediaSmart Connect digital media receiver and the high-definition MediaSmart TV.
HP joins Apple and others in a growing field of companies trying to make viewing Internet media on your television as easy as watching traditional television.
HP worked with YouTube to make it possible for people to watch and share full-screen videos on their HDTVs and to create multiple playlists from anywhere they watch TV: Viewers simply log into their YouTube accounts with a remote and start watching videos.
MediaSmart products aggregate digital media from multiple networked home PCs into one easy-to-view menu for HDTV playback using a remote control.
“People want to participate in the YouTube community in ways that fit their individual lifestyles,” said Jim Patterson, group product manager, YouTube. “To that end, we are excited to support HP in bringing YouTube into the living room through the MediaSmart platform.”(more…)
The result of these trends is that the value of traditional newspapers is in a freefall:
Avista, the PE-fund that bought the Minneapolis Star-Tribune for $530 million in late 2006, has written down 75 percent of its original investment. The leverage fund only put up $100 million of its own cash, with the rest coming form financiers. A letter to the fund’s investors, denied a report saying it was on the brink of bankruptcy, though the firm has hired Blackstone to help it deal with its financial issues.
McClatchy, the third-largest newspaper owner, has seen its shares go down over 60 percent since the end of 2006.
Shares of Journal Communications, which operates dozens of newspapers and television stations, are down by over 50 percent.
According to the Star Tribune, the write-down, taken at the end of 2007, reflects the estimated loss of value and is consistent with the falling stock prices of other publicly held newspaper companies.
Newspapers need a reboot in order to remain relevant. Much of the content in mainstream newspapers is syndicated content that readers are likely to have seen previously online. In an age of Twitter communication, newspapers can’t provide timely coverage, either.
Family media firm Entertainment Rights has announced deals that will bring a variety of classic cartoons to the Web via YouTube, Joost and Babelgum.
The launches will see Entertainment Rights provide all three platforms with a selection of retro programming, including:
He-Man
She-Ra
Trapdoor
Felix the Cat
Rocky & Bullwinkle
The Archies
Fat Albert
Casper the Friendly Ghost.
“Entertainment Rights wants to be where the audience is and online video enables the company to exploit its brands which have strong retro appeal,” said ER’s Laura Turner Laing.
The deal formed with YouTube will see a new free-to-view channel launch - Retro Heroes. The channel will feature short form (2 and 5 minute webisodes). The deals with Babelgum and Joost will feature long form content.
The guidelines focus on the most widely used current in-stream ad products, including linear video ads, non-linear video ads and companion ads.
They were created in order to meet the following needs:
Simplifying digital video ad buying across multiple sites through minimum common ad specifications for video, overlay and companion ads.
Achieving more efficient operations through a common set of creative submission guidelines.
Increasing consumer understanding of ad interactions and environments through best practice recommendations for creative development and player environments.
“Consumers have been swift to embrace the digital video experience online, and marketers have incorporated it just as rapidly into their advertising plans,” said Randall Rothenberg, president and CEO of the IAB. “With the creation and adoption of these formats and guidelines, we see no end in sight to its potential for growth.”
Universal McCann has published a new report that suggests that new media is rapidly becoming mainstream media around the world.
The comparative study looks at social media trends through three “waves”:
Wave 1 - September 2006
Wave 2 - June 2007
Wave 3 - March 2008
Research highlights:
Social media is a global phenomenon happening in all markets regardless of wider economic, social and cultural development.
Asian markets (not including Japan) are leading in terms of participation, creating more content than any other region
All social media platforms have grown significantly over the three Waves: Video Clips are the quickest growing platform, up from 31% penetration in Wave 1 to 83% in Wave 3
57% have joined a Social Network, making it the number one platform for creating and sharing content: 55% of users have uploaded photos, 22% of users have uploaded videos
The widget economy – 23% of social network users have installed an application – 18% of bloggers have installed applications in their blog templates
Blogs are a mainstream media world-wide and a collective rival to traditional media (184m bloggers world-wide, China has the largest blogging community in the world with 42m bloggers) – 73% have read a blog, 45% have started a blog
Social media has strong impacts over brand’s reputation – 34% post opinions about products and brands on their blog – 36% think more positively about companies that have blogs
The report offers additional details on Internet media use:
Video Sharing:
Brazil leads on 68%, Asian countries dominate (not including Japan)
Significant variation in involvement (Hungary 16% < Brazil 68%).
High frequency of involvement: 20% are uploading every day
Watching video clips:
Growth is universal across all countries (31% to 82% global reach seen in all markets)
Lowest difference between markets of any social media platform (Range 63% – 99%)
Very high frequency medium: 71% weekly reach
Downloading podcasts
Growth massive between Waves 2 and 3 (from 21% to 49% world-wide).
China is the world’s biggest podcast market (74% use, with an estimated 45m users)
Actively involved medium: 18% listen and download everyday
Former Rocketboomer and ABC onliner Amanda Congdon‘ has a new gig - SometimesDaily:
The teaser proves Congdon’s still got a pair of fans - but will more tune in after her long absence from podcasting? And is Jason Calacanis still ready to fight for her like a rabid dog?
ABC wants to test your limits to see how much advertising you’re willing to sit through to watch Lost, Desperate Housewives & other shows online
According to a Hollywood Reporter article, Disney-ABC Television Group plans to test inserting multiple commercials into ad breaks for primetime series on its broadband player.
“It would be premature for us to say people only want one ad,” said Albert Cheng, executive vp digital media at DATG. “We want to push it a little bit to see how it would go.”
Cheng believes the key to sustaining viewer interest in ads is tailoring them for the Internet. Although most Web ads simply are reformatted 30-second video from on-air, he noted that ABC research indicated dramatically higher results for commercials that encouraged interactivity like casual gaming.
“Those who package 30-second spots into the ad pod do poorly,” Cheng said. If research shows that users don’t want more ads per break, Disney won’t pursue that strategy, he added.
ABC would be wise to test a broader variety of options. The company’s current technology for ad insertion is weak, encouraging online viewers to check their email or switch to other tasks for the duration of the ads. Shorter ads that are much more targeted could go a long way towards minimizing this.
CNBC has published a great interview by Maria Bartiromo with Google CEO Dr. Eric Schmidt. In the interview, Schmidt says that figuring out how to make money off YouTube has become the company’s top priority:
Bartiromo: Let me ask you about YouTube and MySpace. YouTube has these phenomenal growth rates. What do you think is behind that?
Schmidt: Video is powerful. And it’s amazing. You know, we started off with Mentos and the other sort of fun videos, and now people, because they have so many digital cameras, are essentially uploading everything. Furthermore, we’re beginning to see glimpses of significant professional content on YouTube. People are using it–because there’s such a large reach, they’re learning how to reach that audience.
We’re working but have not yet in my view gotten a breakthrough around monetization. So while we have lots and lots of traffic and we have lots and lots of interesting and creative people and all sorts of controversies–we’re blocked in countries, so on and so on–I don’t think we’ve quite figured out the perfect solution of how to make money, and we’re working on that. That’s our highest priority this year.
Bartiromo: Which is a huge priority, clearly. A lot of people feel like this is an amazing opportunity for you. So, as far as monetizing that business on YouTube, do you think that takes a year? Does it take the next five years? What’s your time frame on that?
Schmidt: We believe the best products are coming out this year. And they’re new products. They’re not announced. They’re not just putting in-line ads in the things that people are trying. But we have a number–and, of course, Google is an innovative place. The Yahoo! team are trying various new forms of advertising, ones which are much more participative, much more creative, much more–much more interesting in and of themselves. Google believes that advertising itself has value. The ads literally are valuable to consumers. Not just to the advertisers, but the consumers.
Bartiromo: They want to look at them.
Schmidt: When they’re targeted. When they’re the right ad for what you’re doing or what you care about.
In a nutshell, Google’s top priority is making video advertising as contextual as its text-based advertising options.
Can Google Make Money From YouTube?
ReadWriteWeb’s Marshall Kirkpatrick has a great commentary on the interview. He suggests that Google will struggle to make money off of YouTube, because the Internet is creating a massive shift in how people use their time:
Passive media and advertising does not have a bright future, and many people in those industries who are watching the direction the internet is going know it.
Old media has assumed people just want to consume but that the internet is showing that people want to consume, produce and share. If just a tiny fraction of that consumption continues to shift towards production and sharing - there’s going to be some serious cultural and economic disruption going on.
That’s why YouTube has to come up with something fundamentally more engaging than banner ads run next to music videos.
While Kirkpatrick and others, like author Clay Shirky, make strong cases for the continued growth of user-generated content, they seem to ignore the fact that most people still like passive consumption.
Most people read Wikipedia, but never contribute to it. Most people watch YouTube videos, but never post a video. Most people watch or listen to podcasts, but never make their own.
There may be big opportunities to make money of active Internet media - but history, the current state of the Internet and human nature suggest that there’s an even brighter future for companies, like Google, trying to make money off of people entertaining themselves on the Internet.
Speculation is 
HP today 
Family media firm Entertainment Rights has 
The Interactive Advertising Bureau (IAB) has 
ABC wants to test your limits to see how much advertising you’re willing to sit through to watch Lost, Desperate Housewives & other shows online
