SAG stays in stall mode

Sometimes its hard to admit defeat. SAG has no leverage to construct a better deal now that AFTRA and the writers have come to terms on new media participation. Given also that the economy is in a state of flux and the new media market still remains undefined, a short term deal is reasonable. As they fight over digital downloads, mobile usage is another screen with some potential. But as one area grows, another declines. The revenue coming from advertising is not an unlimited bucket of money. It flows to different media, from one screen to another. Ultimately, compensation should be measured regardless of where it is seen, but as a percentage of total business over a period of time.

Kindle is Doing Pretty Well

It seems Kindle is doing pretty well, with celebrities talking it up gratis. Martha Stewart and others continue to mention that they are Kindle users. Increased production, price cuts to appeal to abroader audience, should help drive revenues and increase brand presence. As consumrs continue to embrace the concept of e-books, as they have books on tape, Kindle may be the ultimate device to provide both a video and audio presence for one low price. "The retailer sold 25,000 to 50,000 devices during the first three months of 2008, according to an estimate by Mitchell. Amazon doesn't disclose Kindle figures."

Need a reason to switch from hard copy to e-copy, "The paper edition of ``Sail,'' by James Patterson and Howard Roughan, ranked second on the New York Times bestseller list, sells for $16.79 on Amazon.com while the Kindle version costs $9.99. Customers don't pay extra for download time. Users can also transfer text documents and MP3 music files from their computers, according to Amazon's Web site." Add enough extras, like reading blogs and free books on the web, and the voracious reader will see savings with their Kindle very quickly.

In Deepening Ad Decline, Sales Fall 8% at Magazines

Advertising money seems to move from one pocket to another, leaving magazines for other vehicles. And as digital distribution continues to provide more opportunities to segment the market and reach particular demos, it will become increasingly more difficult to get the biggest slice of the pie. it seems the best opportunities will be with thoise content creators who can make and distribute content acoss multiple platforms and subsequently can charge for this wide access. Be everywhere, do everything: print, video, mobil, VOD, etc.

Video on the web to quadruple over next few years

Content remains king and distribution opportunities grow as more consumers discover the web for video. Add to that the convergence of web to TV being pursued by Apple, Netflix, and others, and it is easy to understand why broadband usage is growing rapidly.

It challenges the very ecosystem that has been proving profitable to cable companies and traditional cable programmers, getting a license fee to carry content on a "channel lineup" and charging consumers for packages of channels on a monthly basis. As content creators bypass these old channels for a direct path to the consumer via the internet, it taxes the broadband pipeline and treats the pipe as a commodity rather than a unique relationship. With that in mind, cable companies are testing usage charges for access as opposed to single monthly fees. It kinda reminds you of the old days when your telephone bill was based on the number and length of each call; it sure feels like a step backwards from unlimited usage.

Wallstrip has some timely comments about this bandwidth charge:



Charging for bandwidth usage will impede growth not create revenue opportunities. This approach is not the answer. Still the rise of broadband will enable more IP applications to associate with the content. That unique added value is what can ultimately improve this relationship and provide new revenue streams to replace the old ones. "For the network operator, the ability to bundle a video package with movie access to their other broadband offerings for a specific fee could be a sticky element to keep customers coming back. Then, the broadcaster and video maker can boast more eyeballs viewing their content."

Once this interactive ecosystem is fully realized, the companies that can provide access and support to interact across multiple devices, seamlessly and intuitively, will gain market share. These devices include gaming, mobile, computer, tv, and others that can utilize and interact with these digital streams of content.

AFTRA Approves Three-Year AMPTP Pact

With a 62% approval vote, AFTRA has ratified their agreement with the producers and put the squeeze on their union counterpart. SAG was waiting and hoping that this deal would be rejected so that they would have more leverage going into their negotiation. But this vote severely weakens SAG's position and further indicates that actors do not want to strike.

"In a prepared statement, the AMPTP said, 'We appreciate today's vote of confidence by actors in the agreement we negotiated with AFTRA, and hope that it demonstrates to SAG's Hollywood leadership that there is support for the new economic relationships we have built with writers, directors and actors -- and not much support for a strike, whether de facto or real.'"

Approximately 40,000 actors are members of both unions, another indication that SAG needs to work with the current deals already agreed to by AFTRA and the writers union. The digital landscape is changing rapidly and a three year deal by AFTRA is not so long to continue to have a seat at the table as technology, content, and distribution keep developing and to reflect changing usage.

As a recent CTAM report indicates, online usage is growing rapidly, but television viewing remains king. The dvr is an important device for tv use and continues to rank highest against other content screens. As HD becomes more available and tv screens become larger, the television set should remain the key driver for video usage over the foreseeable future. SAG should accept a short term deal, study the trends and work across unions to devise an adequate revenue split. Then they should approach AMPTP to negotiate a future agreement.

SAG/AMPTP On Hold Until AFTRA Result

Will there be a deal between AFTRA and AMPTP? The vote is imminent and the results may just determine SAGs next steps. If AFTRA votes to accept the terms, SAG will be hard presses to not agree to a deal. If the vote fails, negotiations between SAG and AMPTP may get more complicated. The vote results are due tonight... "So everyone's watching and waiting for the results that could change the entire nature of these actor-employer negotiations."

Portable analog TVs may be lost in digital transition

This article caught my attention because I had asked myself a similar question. We recently lost our electricity for 24 hours after a heavy storm that knocked down trees and power lines. With candles lit and flashlights in my kids hands, I found an old portable radio that was capable of getting TV audio. And I once again felt safe and connected to the outside world and at that moment, reconnected to the NBA Finals on TV.

And it was then that I thought, what would I need to do to replace this trusty old radio, that only comes out once in a blue moon, when the digital transition occurs on February 18, 2009. Frankly, I forgot all about it till I read this article. "About 7% of households, or 8 million homes, owned hand-held TVs in 2006, according to the latest data from the Consumer Electronics Assn. With such a low figure, and more options for watching video on cellphones and laptop computers, it's no surprise there are few battery-powered digital TVs on the market, said Tim Herbert, senior director of market research for the trade association."

As mobile TV becomes more available and embraced, portable analog sets may become a thing of the past. Still, when the power goes out for extended periods of time, back up batteries and generators may become more a necessity than ever before. As we rely on these devices to do many things, they consume more and more power. Options to recharge them under adverse conditions could become a bigger business.

This digital transition creates many new opportunities, but it takes away a trusted source and in a sense creates a digital divide between the haves and the havenots. Most take cable service and will continue to get their TV; but those poorer areas and older Americans may be less able to or accustomed to change. Will they be willing to purchase new portable digital devices; will they embrace the new digital converters? As we get closer to the transition date, it will become more apparent. In fact, it may be worse than when computers changed from 1999 to 2000.

Studios still trying to manage copying

The longevity of the dvd may just depend on whether it allows its owner to copy its file from one device to another. While the concern that others will freely share titles, most consumers are more likely to see it as a benefit of ownership and prefer the simplicity of copying than searching for peer to peer transfer.

"Yet while each studio is pursuing its own second-copy strategy, as a group they haven't given up on an industry-standard approach. Yesterday, the studios in the DVD Copy Control Assn., which administers the CSS license, circulated a new proposed "managed-copy" amendment to the CSS licensing agreement, several DVD-CCA sources told Media Wonk."

The other question to ask is what the next device will be to hold audio and digital files; what will replace the cd and dvd. Will movies and music be sold on their own unique thumb drive? Will we take our iPod to the store and have the file digitally uploaded to our portable device. Will these devices limit how many copies we will be able to make? Digital rights management will remain a big issue for quite some time. And there will always be those trying to rip their own free copies.

CD sales down 11% in 2008

When is the last time you bought a cd? Besides taking up space on an already crowded shelf, most of the music I listen to is through the iPod. So I am more likely to download than purchase. At the same time, while I recently downloaded Camp Rock for my daughter, I burned the songs on a cdrom for her to play on the stereo. And once I finally upgrade the stereo to connect to the mac and play by itunes library, I'll stop burning cds altogether.

So it is not surprising to learn that my habits emulate the changes in the music business. Despite declining cd sales, download sales continue to rise at a steady pace. "Digital sales, however, continue to grow dramatically. Digital album sales are up 34% to 31.6 million units, which represent 15.5% of all album sales."

Brick and mortar stores like the once powerful Tower Records and Virgin have not adapted to change. Other stores selling physical copies of digital content, like Game Stop, should be careful with their growth plans, as games will soon be downloaded directly to devices. General merchandise stores like Target and Best Buy have already cut back shelf space in their music department, and can benefit from diversification of merchandise.

Once consumers becoming increasingly more comfortable with a digital copy of their audio video and audio content, they will no longer need to retain a physical copy in the form of a cd or dvd. That is the direction consumer purchases are taking and stores devoted to selling these copies will become part of our economic history, like HMV, Silo, Tweeter, Highland, and others that couldn't adapt to change.