In recent years, NBC Universal’s mobile strategy has focused largely on helping carriers get its content to consumers.

Now that strategy is subtly changing.

Carrier partnerships are still "critical to what we do," Salil Dalvi, NBC Universal’s general manager for wireless said at yesterday’s Mobile Entertainment Summit. "But we also think we need to go out to market with great integration between web, TV networks and mobile phone."

Take NBC’s hit show Heroes.  This year, fans have had a series of new cross-platform ways to interact with the program, including  a toll-free number for the fictitious paper company Primatech Paper revealed during the Jan. 22 episode; and the launch of a dedicated WAP site designed to give them "two-screen" interaction with the content, including downloads and texting campaigns.

At the same time, the linear show can also be viewed on the NBC2Go channel on Verizon and soon AT&T.

The campaign points to how video and other rich media content will increasingly move beyond the closed decks of mobile carriers to the mobile Internet.

Until now, U.S. carriers have kept tight control of mobile content on their networks, fearing that allowing third parties to freely create their own mobile services will cut them out of the revenue stream.

That attitude means that "content owners do not see majority of money that goes to carriers", Dalvi notes, contrasting with the much more equitable split programmers get in cable or satellite. 

It creates a disincentive for Hollywood studios to make their content available on mobile — to say nothing of small, mobile-only content creators struggling just to survive.

The burgeoning off-deck revenue of European carriers suggests that American operators’ fears of being locked out of the mobile content chain are groundless. They may end up with a smaller piece of the pie. But the pie will be orders of magnitude greater if they loosen their grip.

See Also

• NBC’s Hero Site
• NBCU rolls out Digital2Go mobile initiative
• Mobile Entertainment Summit

Posted under Uncategorized

When I picked up today’s morning latte at Starbucks, I also picked up a free iTunes download of Brandi Carlile’s Turpentine.

From Oct. 2 through Nov. 7, Starbucks is handing out 1.5 million "Song of the Day" cards, including Carlile, Bob Dylan, Joni Mitchell and many others. Not surprisingly, you can also download the entire albums — at a cost.

Starbucks is also demo’ing the future of the music business.

As retail music sales continue to decline, record companies and artists will become increasingly open to the idea of packaging their products as add-ons to other products — coffee, perfumes, groceries, anything.

And just as websites turn free customers into paid subscribers by first offering them free content, artists and labels will need to give away free songs to entice customers to buy.  

This is a concept I’ve heard repeatedly ridiculed by music industry executives as cannibalizing CD sales and destroying the "value" — whatever that is — of their artists.

That’s silly. The ultimate value of artists lies in how much people enjoy their work; people will always be willing to pay for something once they decide they love it.

Starbucks, which gives customers free tastes of new coffees, knows all abou that. Hopefully, the music industry will also take the hint.

See Also

• Starbucks to offer free iTunes Song of the Day
• Complete artist lineup for the Starbucks/iTunes giveaway
• Dave Goldberg to Record Labels: No DRM, Please

Posted under Uncategorized

Jobs announces a third party SDK for the world’s most closed phone

I always thought that Apple got a pass from dazzled media over the closed nature of the iPhone. For all of Apple’s talk of being consumer-centric and user-friendly, the basic design of the iPhone made it by far the most closed mobile environment of all. You couldn’t even get a ringtone download until last month, and the selection of those tones on iTunes is truly pathetic. Steve Jobs trotted out a laundry list of excuses for the lack of third-party inclusion (viruses, bringing down the AT&T network, etc.) but none of it really explained why I could’t download a decent game or ringtone.

Apple apparently is moving toward a greater spirit of inclusion and true user-friendliness today. Not only did the company announce that it was lowering the price of its DRM-free iTunes Plus tracks, but it also said that an SDK would be available to third party developers for both the iPhone and the iPod Touch.

According to Jobs, the kit will be available in February because Apple is trying to ensure two things at once. First, it wants a development kit that gives third parties a good experience and access to as much of the multi-touch interface as possible. Second, they are working to ensure that these third-party apps do not comprimise the security of the phone. Jobs seems a little touchy on this matter, as he goes out of his way to rationalize his rationalizations for keeping such a tight leash on his coveted new tech hit.

Sayeth the great and powerful Jobs: "Some claim that viruses and malware are not a problem on mobile phones—this is simply not true. There have been serious viruses on other mobile phones already, including some that silently spread from phone to phone over the cell network. As our phones become more powerful, these malicious programs will become more dangerous. And since the iPhone is the most advanced phone ever, it will be a highly visible target."

What does this mean for develoeprs and the mobile eco-system? Well, it is very good news for the two million or so of us who do own the phone, but I am not sure it has that big an immediate impact on the rest of the mobile world. As has often been the case with the iPhone, its infleunce seems indirect. By giving users and developers a lush and flexible interface and palette, the iPhone obliquely pressures the rest of the mobile community to follow suit.

Posted under Michael's Blog

The big winner in Led Zeppelin’s announcement that the band’s songs will be available digitally is Verizon.

The phone giant will get ringtone and similar mobile rights first. On Nov. 13, Verizon will get full digital rights to classic songs like "Stairway to Heaven" and "Money", along with iTunes.

It’s still hard to find a kid who listens to songs on their mobile phone (my son does, but he’s a self-proclaimed geek).

Verizon is quietly building for the future, much as Microsoft takes initial losses against rivals and survives by virtue of its heft to attack again.

Verizon is a triple threat: it sells mobile phones; it sells Internet; and its TV service is expanding into millions of homes. Make that a quadruple threat: it has a mobile TV, service, too.

There are a lot more cellphones in the world than iPods. Led Zeppelin is just the beginning of Verizon’s plans.

See Also

• Led Zeppelin to Make Its Songs Available Digitally
• Mobile Entertainment Summit

Posted under Uncategorized

The free content model is all the rage, but what are the implications?

Free has become the revenue model du jour. Of course, RadioHead made waves last week by offering its latest tracks for an optional donation. SpiralFrog has already been offering downloadable music and video for free, with ads. And just yesterday Sprint expanded its free mobile TV selection on the new Sprint Exclusive Entertainment (SEE) channel.

The Sprint offering is significant because it broadens the earlier Power Vision channel, which seemed like an experiment in ad-supported mobile video. Now, Sprint is all in. With SEE it is committing to a full bore mobile video channel of homegrown programming. The channels are populated with repurposed Web material but also hours of material from its own studios and talent. And all of it is free to subscribers.

Free is the new fee. Word is out recently that Wired editor and “Long Tail” author Chris Anderson is working on a new book on this very topic. In fact, he aims to offer the book itself in some form for free. His “Long Tail” blog is beginning to test out some of the ideas.  The argument goes that content makes its money on the back end rather than the front end, via consumer fees. The back end could entail advertising. It could entail merchandising. Last year’s OzzFest concert tour, for instance, was free to attendees because the bands themselves were not paid. Instead, they made back their money from advertising. New ad-supported record labels are rumored to be ramping up, offering bands the opportunity to leverage their music as promotion for profitable concerts.

But the model also raises questions. In a world where advertising supports content so substantially, then how much more clout will marketers demand and get from content providers? On the other hand, how will a free-for-all model  affect content production? After all this is a model Google has used in part to justify its endless beta releases of half-baked products. No one is paying for it anyway, so let the users help develop it. Is this a rationale that could permeate the content production chain if a free model tends to de-value content.

Business models are not just ways of making money. They also affect content production and consumption.

Posted under Michael's Blog

In case you haven’t noticed, there’s a lot of fear in the air these days.

Intel’s announcement today shows why: its net income rises 43% for the quarter amid solid demand for its chips. And it’s laying off 2,000 employees.

Ericsson lowers its sales and earnings forecasts, calling the health of the once-booming wireless business into question.

See Also

• Intel’s Earnings Jump 43% on Demand for Laptop Chips
• Ericsson Stuns Investors, Warns of Lower Results
• Paulson Says Housing Is Likely to Adversely Affect Economy
• Economy, Intel, Chips, Ericsson, Wireless, Paulson

Posted under Uncategorized

Hollywood execs blame the videogame for bad weekend box office

According to some measures, the October 5 weekend box office was the worst for this month since 1999. And Hollywood had come to bat with Ben Stiller, the Farrelly brothers and more advance buzz than Al Gore’s Nobel Peace Prize. So what is to blame for this debacle? Some studio executives aimed their lasers at the recent release of Halo 3, the Xbox 360 game that scored boffo box office itself with over $170 million in its first day on sale.

Ad Age reports that conventional wisdom holds that movie audiences were home playing the addictive game. Microsoft says that 2.7 million players have logged into the Xbox Live service to play the multiplayer game. Apparently, the Xbox 360 beat Hollywood at its own game. "Halo 3 was marketed as an event film in terms of its partnerships, with beverage, automotive, fast feeders and mobile-phone companies all joining up," says Ad Age. 

Did Halo 3 keep us away from a film that had poor reviews along with an unimpressive menu of theater alternatives? Maybe, but I think TV networks and cable have a lot more to worry about than theatrical film. In my house, my darling daighter and her friends pretty much owned the TV for the last two weekends, all playing Halo 3 with one another, with opponents as far away as South Africa, and solo. I know I didn’t see a minute of broadcast or cable all weekend. If anything I was more inclined to catch a movie just to escape the virtual bloodshed in my living room.

Perhaps we should be theorizing less about Halo 3 hurting box office and start counting the hours that game consoles are on and cable is off in most American homes. In this generation of consoles especially, there is a premium on HD playback. These consoles are most likely to occupy the main monitor in most homes. When gaming is on, everything else is off, at least in the living room.

There is a real issue of media mindshare lurking beneath this little dust up of speculation. There is only so much time in the day, even when you do figure in multi-tasking. The real effect of video gaming on the rest of the media eco-system is only beginning to be felt. Unfortunately, too few companies in the media and advertising value chain are measuring this effect and giving all of us a firm idea of how powerful gaming is in consuemr lives, if not in ad budgets and media coverage.

See Also

• Bad Box Office? Blame ‘Halo’
• RipTen
• Portfolio: Is Halo 3 Putting film Features in the Shadows?

Posted under Michael's Blog

I’m so tired of the so-called DVD wars. Now that high-definition is clearly coming to DVDs, we’re supposed to believe that one side "wins" and the other "loses" — or even worse, they keep on fighting forever. A CNET article’s title today was typical:  "Blu-ray vs. HD DVD: War Without End".

That could happen, I suppose. But why weren’t the executives at DisplaySearch’s 5th Annual HDTV Conference and quoted in the CNET piece talking about the two formats playing on the same machine? 

Could it be that some of those executives have already picked sides or are trying to desperately not to be quoted on the whole war thing?

Hybrid machines aren’t fantasy.  LG’s Super Multi Blue Player Model BH100, released nearly a year ago at CES, does exactly that. Of course, there’s the high price  ($999 at Best Buy ) and the middling reviews, but traditional DVD players that played multiple formats like CDR-W, DVD-R, MP3 and Div-X used to have quirks and cost a bundle, too. That’s why we have product development and market forces.

See Also

• 2 disc formats play but at a price
• Total HD Dual-Format Discs Get Delayed Indefinitely

Posted under Uncategorized

Game developers are following the Consumers and the buzz to Nintendo

The Nintendo Wii could well emerge from the current generation of game console wars the victor. According to a new research report released via ReportLinker, 86 titles are slated for the Wii in Q4, while 47 are scheudled for the Xbox 360 and 38 for the Playstation 3. The momentum has shifted dramatically in recent months, as game publishers follow the customers, who are snatching up the Nintendo console as fast as the company makes them. The publishers are really putting their faith in this console by releasing many more Wii-dedicated titles than they are games specifically for the other two consoles. Also casual game developers are flocking to the Wii, while they are lukewarm about prospects for the other consoles, which, arguably are pitched more to hard core gaming.

It didn’t take sales figures or market research to figure this one out. Just ask any Wii owner who has had visitors discover they have the console. I have had 75-year-olds playing virtual tennis in my living room, even autistic kids with physical disabilities pick up the Wii-mote and bowl. Nintendo has hit an important spot in the target and done what few other tech or software ecompanies could — broaden the appeal of video gaming.

I am sure that in coming years, business historians will point to Nintendo as a great example of how not to follow conventional business wisdom. While all other media and tech companies were embracing the consumer-driven mode of designing products out of focus group results and surveys after surveys, Nintendo said it knew better. It introduced technologies and styles of play that were beyond the ken of consumers and even most critics. They actually led rather than followed the market. It was an act of corporate bravery that is paying off. You have to wonder whether any other modern corporation would have such courage in a "user-driven" world where, we are told, the consumer rules.

Would the consumer ever have dreamt up the Wii?

Posted under Uncategorized

Is there really enough interest to drive Avatarland?

When the likes of IBM, Playboy and Hearst show a serious interest in a new digital media platform, does it mean it has arrived? Ordinarily, the answer would be ‘yes’ but in the case of virtual social worlds I have to argue that the jury remains out. IBM announced today it was partnering with Second Life maker LindenLabs to work on "universal avatars," which would let users move their 3D personae to the several existing virtual worlds online. IBM is no newcomer to this technology. It has had an enterprise-facing "island" in SLfor a while, where it conducts international business meetings with avatars from around the world. The company is investing million in the technology as a next step in business communication.

IBM is smart enough to know that the model only takes off when people can maintain a peristent online avatar (as they do an email address) that is not tied to any world. Then avatars become an interface, not just a game playing environment.

Media companies have been jumping into virtual worlds, like CosmoGirl announcing that it would become present in There.com. Playboy has an SL island and a club where it sells both virtual and real world merchandise. MTV, of course, has had both Laguna Beach and The Hills turned into 3D playgrounds in which anyone can take part.

But is virtual worlding an emerging platform and interface with the Web or a niche curio? SL was the hot property only five or six months ago, but I hear more doubt and boredom with the idea than anything else from media analysts and advertisers. Clearly the buzz around virtual worlds has subsided, and you have to wonder whether IBM, cosmoGirl and Playboy are cutting edge or late to the party.

It remains an open question whether any but the geekiest among us has the patience and dedication to build and maintain an avatar day to day. When I last covered this market six months ago, I heard many media soothsayers predict that 3D avatars would be as common as a mouse cursor, just a common way to interact with the digital world of content and e-commerce. I don’t hear as much talk about that anymore, and I have to wonder if the platform just hasn’t gotten the momentum it once seemed to have.

See Also

• SecondLife

Posted under Michael's Blog