Turns Out That The iPad Won't Magically Bring Back Scarcity For Magazines

from the shocking,-i-know dept

Back in 2010, we suggested that the mad dash by various publications to build fee-based iPad apps was completely misguided, reminiscent of the belief in the 90s that publications could sell CD-ROM versions of their magazines. As we noted, there's nothing that special about the iPad format that takes away the natural abundance of the internet, and pretending that it was really any different than a portal to the wider internet with all its options was a fool's errand. In particular, we called out Rupert Murdoch's obsession with creating an iPad-only publication. In fact, we were confused why all the publishers investing so much in apps didn't put that same sort of effort into improving the features on their websites. A few months ago, the editor-in-chief and publisher of MIT's Tech Review more or less made the same point, saying that the future was on the web, betting on HTML 5 to make the site "look great on a laptop or desktop, tablet or smartphone" and then killing off the apps it had developed.

While others aren't going that far, there's more and more evidence that betting on apps was, in fact, the exact mistake that we predicted. Mathew Ingram summarizes how both The Huffington Post and Murdoch's The Daily have failed with their fee-based iPad app strategy. He makes the same basic point that a winner of our "most insightful comment" (by Robert Weller) made recently: that people get their news from lots of sources, so paying for a bunch of apps just doesn't make sense. In fact, it takes away from the value. As Ingram notes:

Whether media companies like it or not (and they mostly don’t), much of the news and other content we consume now comes via links shared through Twitter and Facebook and other networks, or through old-fashioned aggregators — such as Yahoo News or Google News — and newer ones like Flipboard and Zite and Prismatic that are tailored to mobile devices and a socially-driven news experience. Compared to that kind of model, a dedicated app from a magazine or a newspaper looks much less interesting, since by design it contains content from only a single outlet, and it usually doesn’t contain helpful things like links.

What he's basically saying is that the publishers focusing on apps are trying to create artificial scarcity by building digital silos. But that actually takes value away from those publications. People interact with the news in all sorts of ways that go way beyond "reading." But individual apps often make that more difficult. It involves extra effort (and cost) while providing less benefit. All because publishers are looking for something (anything!) that resembles some fencing so they can build a gate and go back to pretending they're in the gatekeeper business.

Hopefully publishers will finally stop looking to recreate the past by building artificial walls, and start looking at ways to make money that embrace the internet and what it enables.

Filed Under: apps, business models, economics, magazines, newspapers, scarcity, thedaily, web
Companies: aol, news corp.

News Corp. Accused Of Hacking Competitors Smartcards To Increase 'Piracy' Of Satellite TV Rivals

from the all's-fair-in-murdoch-land dept

Four years ago, we wrote about claims that News Corp. had hired hackers to break the encryption on DISH Networks' satellite TV smart cards, and to "flood the market" with those cards, thereby increasing "piracy" of DISH's service. News Corp., of course, owned DISH's main competitor, DirecTV. The whole thing seemed really bizarre, and we were skeptical. This kind of thing only makes sense if you actually believe that "piracy" like that directly takes away money from the company whose service is hacked. But, it seems just as likely that flooding the market with hacked smartcards would take away business from both DISH and DirecTV in the cases where it was a true substitute (rather than going to people who would never pay for either anyway). Either way, that case ended with a jury finding News Corp guilty... but of just hacking one smartcard, for which the company was fined a grand total of $49.69... and another $1,000 for "damages." Honestly, I'm not even sure that makes sense, because if it just hacked a single smartcard, it sounds like it may have just been for reverse engineering purposes.

Of course, in the intervening years, News Corp.'s name has become a lot more closely tied to the word "hacking" thanks to the News of the World scandal where reporters regularly "hacked" into voicemails (and, by "hacked" I really mean used a widely known loophole that makes it easy to listen to many people's voicemails). So with news breaking that News Corp. is again being accused of hacking, a lot of people are thinking about the recent scandals -- but the details suggest that this may have been identical to the DISH/DirecTV story above, but with a UK focus. Basically, News Corp's subsidiary NDS is accused of hacking ITV Digital, a UK competitor to News Corp's Sky TV.

In this case, there are some more details, where it certainly suggests that at least someone at News Corp. was working closely with some hackers to publish the codes necessary to make unauthorized smartcards for ITV. ITV eventually did go out of business, and of course the article linked above quotes an exec there insisting that such "piracy" was "the killer blow for the business, there is no question."

Again, this doesn't make much sense to me. Even if all of these actions were done via News Corp., how does that actually help News Corp? People who got the hacked ITV smartcards weren't going to buy Sky TV services either. The whole thing seems pretty strange, suggesting it was either exaggerated, or whoever at News Corp. decided this was a reasonable strategy didn't even think about how getting more hacked smartcards would likely be a challenge for Sky just as much as it was for ITV.

Filed Under: competition, hacking, james murdoch, piracy, rupert murdoch, satellit tv, smart cards
Companies: directv, dish network, itv, news corp., sky tv

Fox TV Finally Realizes The Internet Is Global: Launches Show Around The Globe Simultaneously

from the well,-look-at-that dept

We've talked, at length about the ridiculousness of regional restrictions when it comes to content on the internet. So, to some extent, it's nice to see that News Corp./Fox is actually more or less admitting that such restrictions are silly and has released a new TV show simultaneously around the globe:

But this week, News Corporation is staging a worldwide premiere of “Touch,” a new drama starring Kiefer Sutherland that celebrates the very kind of interconnectivity that will allow the show to start almost simultaneously in 100 countries and territories. In the United States it will appear on the Fox network on Thursday night; in Canada, on Global Television; in Germany, on ProSieben; in Russia, on Channel One.

The worldwide rollout will allow American viewers to react to “Touch” in almost real time with viewers on other continents and in other languages, presuming, of course, that they are motivated enough to do so.

Of course, part of what made that happen was they were able to find a global advertiser (Unilever) to agree to put its ads everywhere. What's still amazing to me, however, is that in 2012 this is still considered a "big thing." This should have been done a decade ago, at least. Because while the networks are finally waking up to this, internet users had routed around them ages ago anyway.

To Tim Kring, the show’s creator, the shift is stark. In spring 2007, six months after his show “Heroes” started in the United States, he watched hundreds of “Heroes” fans line up for an event in Paris, even though the show had yet to be seen on television in France.

“Every single person there had seen every episode. They had all gotten it illegally off the Internet,” he said in an interview. It was then, he said, that he realized, “Audiences will find these shows no matter where they are.”

And yet, here we are in 2012 and it's still "big news" that a show and TV network realize this. Progress certainly seems to come slowly to some industries...

Filed Under: global, internet, touch, tv shows, windows
Companies: fox, news corp.

Rather Than Bitching About The Failure Of SOPA/PIPA, Rupert Murdoch Should Take A Closer Look At His Own Policies

from the check-out-your-mirror,-rupe dept

It's well established that Rupert Murdoch threw a bit of a hissy fit on Twitter, after public protests helped put SOPA and PIPA on hold. However, as plenty of people have been pointing out, perhaps the real problem is with Murdoch's (and others') own business model choices. Danny Sullivan recently put forth an open letter to Murdoch, talking about the difficulty of getting The Simpsons legally, despite paying for it:

That’s right. I pay you three times for The Simpsons. First, I get it broadcast over the air. That’s me paying you for it, because the airwaves are mine — not yours. You’re simply allowed to lease them from the public. You’re getting a piece of that spectrum from me. In return, I expect you to deliver me valuable content through it. Well done with The Simpsons.

But you know, it’s easy to miss things broadcast live over the air. Also, my signal is pretty bad. So I pay a second time, to DirecTV, to get exactly the same content you send over the air to me through satellite TV. I get a better picture. I get the ability to DVR episodes to watch later. And I pay something like $125 per month for my subscription, some of which goes into your pocket.

That brings me to my third way of paying: Hulu Plus. I don’t DVR everything. Somehow, I missed The Simpsons when it started up again this fall. But Hulu Plus has turned into a lifesaver in these cases. It has let me catch-up on programs. It’s been well worth the $7 per month I pay for it, some of which, again, goes directly into your pocket.

Yup, triple pay. So, clearly, Sullivan can watch the Simpsons when and how he wants, right? Nope:

And now to tonight. My son fired up Hulu Plus, so we could watch The Simpsons, as we have in the past. But no luck — he got a “web only” message. Turns out, I discovered after doing a little searching with your least favorite search engine, last year you started limited next-day episodes.....

Despite paying for Hulu Plus, I cannot watch The Simpson on any device like my Roku player that is designed to play The Simpsons direct to my TV.

I gather this is because you don’t want me to buy Hulu Plus and stop paying for DirecTV, right? I get that. But it’s not like I have the same option to watch archived episodes on DirecTV, If they’re offered on demand, they are impossible to find.

Sullivan points out that all this is really doing is pushing kids to go to their search engines and to start exploring the infringing sources Murdoch seems so angry about. Seems like more of the same old story we've heard over and over again... with the twist here being the fact that Sullivan is already paying three times for the same content and still can't get it legally.

Filed Under: business models, rupert murdoch, the simpsons
Companies: news corp.

Rupert Murdoch Lashes Out Bizarrely Against The White House For Asking Congress Not To Break The Internet

from the get-your-stories-straight dept

While the lobbyists favoring SOPA/PIPA have decided that the talking point on the White House's statement opposing SOPA/PIPA as written really means that the bills, as they are, are great, it appears that no one sent Rupert Murdoch the talking points. Murdoch, who has been personally lobbying Congress in support of the bills, took to his relatively new Twitter account to lash out at the President:

So Obama has thrown in his lot withSilicon Valley paymasters who threaten allsoftware creators with piracy, plain thievery. -

— Rupert Murdoch(@rupertmurdoch) January 14, 2012

Piracy leader is Google who streams movies free, sells advts around them.No wonder pouring millions into lobbying.

— Rupert Murdoch(@rupertmurdoch) January 14, 2012

Film making risky as hell. This has to lead to less, hurting writers, actors, all concerned.

— Rupert Murdoch(@rupertmurdoch) January 14, 2012

Of course, almost nothing in those statements is true. First, it's well documented that Hollywood spends ridiculously more money lobbying than the likes of Google. Second, Silicon Valley is the heart of software development. Kind of bizarre for him to claim that Obama's "paymasters" from Silicon Valley want to... um... destroy Silicon Valley. Third, nothing in the White House's statement said that they were solely supporting the other side's view here. They simply expressed specific concerns with the existing bill. Considering that they specifically rejected parts of the bill that would lead to censorship, excess private litigation and problems for online security... is Rupert Murdoch really coming out in favor of censorship, excessive private litigation and a broken online security system? Really, Rupe?

Next, when it comes to streaming films, it's true that Google puts advertising around certain videos on YouTube. However, it's not all videos, and their system (quite famously) allows the actual copyright holder to make the money from those ads, leading to a rather lucrative new revenue stream for many content creators. Furthermore, for years, people have mocked YouTube for losing a ton of money, so it's not like this is a particularly lucrative part of Google's business. As for filmmaking being "risky as hell," so what? Lots of things are risky, but most of us don't think that the government should censor free speech, break internet security and create massive undue litigation... just to make Rupert's investments less risky. That he seems to think that's a reasonable tradeoff shows just how Rupert Murdoch views the government: as a tool to funnel extra money to himself. Furthermore, his claims that it will lead to "less" are just laughable as well. The number of movies made per year has more than tripled in the past fifteen years, just as online piracy ramped up. Also, Nigeria, China and India -- three countries known to have more infringement than the US -- all built up huge film businesses over the last few years, despite all the infringement.

After thinking about it for a few hours, Murdoch went right back to it:

Seems like universal anger with Optus from all sorts of normal supporters.Maybe backing pirates a rare miscalculation by friend Axelrod.

— Rupert Murdoch(@rupertmurdoch) January 16, 2012

More pirates.Whole entertainment ind employs 2.2 million ave salary 65 g. Good jobs and expanding foreign earnings. Made in America, too!

— Rupert Murdoch(@rupertmurdoch) January 16, 2012

He later admits that he had a "damn you autocorrect" moment in that first one. "Optus" was supposed to be POTUS, but his iPad "changed it." First of all, we haven't seen any "anger" towards Obama over this -- other than from Murdoch. Quite the opposite. We've seen widespread agreement (and surprise!) that the White House would actually dare speak out against Hollywood on an issue. And, once again, it's insulting and ridiculous (but typical of the disdain the Hollywood old guard has for the rest of the world) to claim that concern over censorship, excess litigation and online security problems means "backing piracy." As for the stats, it's nice to see him use the 2.2 million jobs number, rather than the 19 million jobs that is usually thrown around (someone in Hollywood really needs to get Rupe the talking points memo on this one), but even that is misleading.

As was highlighted in an excellent report by Zach Carter just last month, the 2.2 million jobs number is complete bunk:

[The] 2.2 million jobs figure, however, exaggerates Hollywood's contribution to the American economy. According to supplemental data provided to HuffPost by MPAA, only 272,000 people work for movie studios and television companies. The lobby group claims that an additional 430,000 people work in related "distribution" jobs dependent on Hollywood, legal web streamers like Netflix, the few remaining video store clerks and cashiers checking out DVD purchases.

But the vast majority of the jobs Dodd & Co. claim are threatened by online piracy are only peripherally related to the entertainment business. MPAA takes credit for nearly 1.6 million jobs at florists, catering companies, hardware stores and other industries that work with major movie studios, assuming that these jobs could not ultimately be out of a job without Hollywood help.

Yeah. 1.6 million of those jobs are not actually in the entertainment industry at all. Rupe, before you tweet, perhaps try learning the details of the "facts" you're about to spew so you look a little less ridiculous next time.

Filed Under: pipa, protect ip, rupert murdoch, sopa, the white house
Companies: news corp.

Rupert Murdoch Personally Lobbies Congress For SOPA And PROTECT IP

from the wouldn't-he-just-love-that? dept

Well, well. Apparently dealing with the fallout from the News of the World reporters hacking into phones in the UK isn't keeping Rupert Murdoch busy enough. He showed up in DC last week to make a personal plea to Congress to support SOPA and PIPA and censor the internet. It's been clear for quite some time that Rupert Murdoch doesn't get the internet. His history is littered with massive and expensive internet failures. So it's no surprise that he's lobbying hard for a law like SOPA and PIPA, which will restrict up and coming online competitors and help clear out some of the field so that maybe he and his son James can finally get their wish to turn the internet into something that looks a lot more like TV: with the big media conglomerates delivering the content, and everyone else just consuming (and paying for) it.

Filed Under: copyright, lobbying, pipa, protect ip, rupert murdoch, sopa
Companies: news corp.

CreativeAmerica: When Major Hollywood Studios Set Up Bogus 'Grassroots' Campaigns

from the don't-make-me-laugh dept

For a little over a week now, we've been receiving emails from various actors and musicians, telling us that they've been getting emails from various entertainment industry giants, telling them to join a new "grassroots" coalition called CreativeAmerica, whose main purpose is to advocate for passing the PROTECT IP censorship bill. The whole thing is clearly an astroturf campaign. It was registered via domains-by-proxy to hide who really bought the domain name. It highlights the video that was secretly created and owned by NBC Universal. It includes the totally false claim that "there's no such thing as a free movie."

If you dig into the website to figure out who's really behind it, it claims that it's a "grassroots organization," but fails to name a single creative individual who was behind putting the group together. Instead, it lists out the following companies and organizations who really put the site together (amusingly, they even block you from cutting and pasting this part, so I just retyped it -- meaning I circumvented their DRM... come at me, entertainment industry):

CBS Corporation, NBC Universal, the Screen Actors Guild, Sony Pictures Entertainment, Twentieth Century Fox, Viacom, the Walt Disney Company and Warner Bros. Entertainment

Well, well. That's not a grassroots effort, folks. Now, the site also includes various unions, including the American Federation of Television and Radio Artists, the Directors Guild of America and the Screen Actors Guild and IATSE (stage hands, etc.). But these are the old school, out of touch unions that who have done little to nothing to help their members adapt to the times (often doing the opposite). Do we see any of the actually creative folks who have embraced new technologies, new methods of distribution and new business models? Nope.

In the meantime, how can the website seriously claim that it's a grassroots effort when it has every single major Hollywood Studio behind it. Do they think that people are stupid? And should we remind people that these are the same studios who have all sorts of scammy tricks for "Hollywood accounting" to make sure even the most successful films are never seen as profitable, allowing them to avoid paying royalties to the actual creative folks.

Next, if you dig into the website, they have a "send a letter to your elected officials" thing. And the real evidence that it's not a real grassroots effort? Just like other faux grassroots efforts, those agreeing to send the letter have no option to edit the letter. When groups like Demand Progress and EFF let you send letters about PROTECT IP, they let you edit them to your liking -- trusting people to express themselves.

But, this "Creative America" apparently does not trust its own members to be creative. The letter is 100% locked down. You can only send their text. Honestly, if a group supposedly representing creators won't even let its own members express themselves freely, you know that it's not actually about protecting "creative" America.

This is not a grassroots effort. This is not about protecting "Creative America." This is about protecting a few megacorporations who are scared of new innovations, afraid of their dwindling monopoly rents, and trying to force the rest of the world to go back to the way things used to be.

Filed Under: astroturf, creative america, grassroots, hollywood, protect ip, studios
Companies: cbs, disney, fox, nbc universal, news corp., sony, viacom

Wall Street Journal Europe Doles Out Cash And Favors To Inflate Circulation Numbers

from the ouch dept

I can't find it now, but just a few months ago I got into a discussion in our comments with someone who insisted that newspapers or paywalls were always going to be a better place for advertisers because they actually knew who their readers were and could verify and audit that information. I noted that the newspaper industry has a long history of boosting circulation numbers through fraud. In response, I was told that doesn't happen any more. That seemed laughable. Indeed, reports have now come out that the Wall Street Journal Europe was involved in a complicated scam to massively boost its circulation numbers by giving companies cash to buy copies of the paper at greatly discounted rates. Even worse, it appears that some of the deals involved signed contracts with the WSJ, where they promised positive coverage of one of the organizations that would participate in this scheme:

The Guardian found evidence that the Journal had been channeling money through European companies in order to secretly buy thousands of copies of its own paper at a knock-down rate, misleading readers and advertisers about the Journal's true circulation.

The bizarre scheme included a formal, written contract in which the Journal persuaded one company to co-operate by agreeing to publish articles that promoted its activities, a move which led some staff to accuse the paper's management of violating journalistic ethics and jeopardising its treasured reputation for editorial quality.

Coming on the heels of the voicemail hacking scandal, this is another black eye for Murdoch's News Corp, but it looks significantly worse, given the generally positive reputation around the Wall Street Journal, when it comes to reporting and editorial ethics.

Filed Under: circulation, scams, wall street journal europe
Companies: news corp.

UK Law Enforcement Demanding Guardian's Sources On News Of The World Hacking Scandal [Updated]

from the journalist-shields? dept

There's been a growing attack on the right of journalists to keep their sources secret. In the US, we've seen attempts to expose newspaper sources using the Espionage Act, and it appears that over in the UK something similar is happening. Scotland Yard is apparently demanding that The Guardian reveal its sources for its thorough and widespread reporting on the News of the World phone hacking scandal. This would be the same UK law enforcement folks who were alerted to the phone hacking and chose to ignore it... while The Guardian pushed on doing the reporting to expose it. To then pressure The Guardian to give up its sources certainly has the feeling of attacking the guys who exposed Scotland Yard's failures in investigating News of the World earlier... Update: Looks like the press attention to this story has caused Scotland Yard to back down. Still, it seems like this could create serious chilling effects for UK press.

Filed Under: journalism, news of the world, protection, rupert murdoch, scotland yard, shield
Companies: news corp.

Fox Responds To 'Piracy Surge' By Answering A Different Question

from the you-didn't-answer-the-question dept

Exactly as we predicted, when the Fox Network hid its TV shows online behind various paywalls and delays, the rate of infringement on those shows shot way up. Eriq Gardner, over at THResq spoke to a Communications VP at Fox to get his response about all those people going to unauthorized means to get their content, and in true "Communications VP" fashion, Scott Grogin deftly ignores the key question and focuses on a secondary claim from the original TorrentFreak article, the suggestion that these delays were about getting people to watch TV live:

The TorrentFreak blog post is a little over the top. The story indicates that we 'took this drastic step in the hope of getting more people to watch shows live and thus make more revenue.' Nothing could be further from the truth.

Authenticating viewers is not about making sure they only watch live...in fact, quite the opposite—we support a 'TV Everywhere' proposition and are working with our distribution partners to benefit our businesses. It's about receiving fair value so we can continue to produce this expensive and high quality programming. We are pursuing a strategy where the 90+ million households who pay to watch our programming via cable/satellite/telco will ultimately receive maximum benefit. They can watch live, via DVR, on VOD, online, or through one of the various tablet apps that allow in-home viewing.

We are actively in negotiations with all cable/satellite/telco providers regarding authentication of their customers. We hope to announce several more agreements before the start of the new television season in mid-September.

The issue of watching "live" or not is really a side matter, and was perhaps a bit of hyperbole from TorrentFreak. What those guys clearly meant was that this is a weak effort by Fox to keep people watching via TV or via a big cable/satellite provider. And, I'm sorry, but this line is pure bull:

We are pursuing a strategy where the 90+ million households who pay to watch our programming via cable/satellite/telco will ultimately receive maximum benefit.

Anyone who claims that to offer maximum benefit to one set of people, you have to take away features from others isn't being particularly honest. To offer maximum benefit, you offer maximum benefit. Could Fox offer new additional features to such subscribers? Sure. That would be interesting and perhaps a good strategy. But taking the content away, when it's so readily available via unauthorized means doesn't help provide maximum benefit to subscribers at all. It drives more people to unauthorized means of access (where Fox gets no money at all), and actually takes away value from those subscribers. That's because one reason why people watch hit shows right away is so they can discuss them with friends. Fox has now made it more difficult to discuss with friends because it's that much harder to watch its shows.

Filed Under: downloads, fox, piracy, television
Companies: fox, news corp.