November 22, 2005

Warner Settles With Spitzer [3:28 pm]

Warner Music to pay $5 million in “payola” probe

Warner Music Group, one of the largest U.S. record companies, will pay $5 million to settle a New York state probe into how it influenced which songs are played on the radio, New York State Attorney General Eliot Spitzer said on Tuesday.

The probe involved “pay-for-play” practices, commonly known as “payola,” in which companies are accused of paying radio stations or promoters to secure air time for songs.

In July, Sony BMG agreed to pay $10 million to settle a related pay-to-play probe.

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AOL Makes A Move [3:26 pm]

AOL Joins Start-Up Company to Offer Web Video Distribution

America Online reached an unusual arrangement yesterday with a start-up company that will allow almost any producer of video content to distribute programming on its service, splitting revenue from advertising or fees.

AOL made its arrangement with Brightcove of Cambridge, Mass., which is building a system that gathers and distributes video content. Brightcove gives producers a way to put video on their Web sites while also making the video available on other sites, with AOL being first.

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Faith in Standards [3:25 pm]

Well, there are standards and there are standards. It will be interesting to see how this evolves, for real. And don’t miss the inescapable NYTimes Microsoft cheerleading: Microsoft Plans to Ease Format Rules

Microsoft said on Monday that it would seek approval to make the software formats behind its Office programs an “open standard” that it would license free to competitors, partners and developers.

[...] In some cases, the concern of those weighing alternatives is the amount of control Microsoft holds over the most common document formats, and over which computers and programs can manipulate them.

If the Microsoft Office Open XML format becomes an endorsed standard, “customers will have a choice” between Open Document and Open XML, said Alan Yates, Microsoft’s general manager of Office.

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Google: Spreading The Risk Around [3:21 pm]

Google Gift to Digital Library

The Library of Congress will announce today a $3 million gift from Google to help the library begin building a World Digital Library, a project that aims to digitize and place on the Web significant primary materials from national libraries and other institutions worldwide.

The LoC’s press release: Library of Congress Launches Effort to Create World Digital Library

The WaPo has an op-ed from the librarian of Congress - A Library for The New World

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Slate Speculation on Creative Destruction [11:54 am]

Nothing stays the same: The Great Google Wipeout - Chronicle of a corporate death foretold

Then Amazon threw Google a curve it couldn’t hit. Google had alienated the entire book-publishing business with its universal book-scanning project, one that paid the publishers in lip service rather than cash. Amazon leveraged this alienation to convince the major New York publishers—including Murdoch’s HarperCollins, of course—to make nearly every book in print available via its “Search Inside” feature, which could already be searched in tandem with Amazon’s A9 search engine. Giving publishers a cut of the book sales and book rentals obtained through search was an essential part of the deal. The book feature of the A9 search engine made it another Club Web, almost as useful as Murdoch’s. Amazon added music lyrics, composers, titles, and artists and extended its IMDb.com database of film and TV artists and film dialogue. It became the dominant online seller of CDs, DVDs, books, and downloadable music, movies, and TV. Information didn’t want to be free, Amazon figured out. It just wanted to be sold at a variety of price points, just like feature films were—at the theater, on pay-per-view, on DVD, or free thanks to the largesse of advertisers. The only ones who mourned the passing of iTunes were the deranged iPod people.

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A Bleak Look At Hollywood; From Hollywood [10:26 am]

Can this industry “embrace the future?”: In a losing race with the zeitgeist [pdf]

The era of moviegoing as a mass audience ritual is slowly but inexorably drawing to a close, eroded by many of the same forces that have eviscerated the music industry, decimated network TV and, yes, are clobbering the newspaper business. Put simply, an explosion of new technology — the Internet, DVDs, video games, downloading, cellphones and iPods — now offers more compelling diversion than 90% of the movies in theaters, the exceptions being “Harry Potter”-style must-see events or the occasional youth-oriented comedy or thriller.

[...] Although the media have focused on the economic issues behind this slump, the problem is cultural too. It’s become cool to dismiss movies as awful. Wherever I go, teenagers say, with chillingly casual adolescent contempt, that movies suck and cost too much — the same stance they took about CDs when the music business went into free fall. When MPAA chief Dan Glickman goes to colleges, preaching his anti-piracy gospel, kids hiss, telling him his efforts don’t help the public, only a few rich media giants. Say what you will about their logic, but, as anyone in the music business can attest, those sneers are the deadly sign of a truly disgruntled consumer.

[...] One of the movie industry’s crucial failings is that it’s simply too slow to keep up with the lightning speed of new technology. Who would’ve believed six months ago that the day after “Desperate Housewives” aired on ABC you could download the whole show on your video iPod? But when someone pitches a movie, it takes at least 18 to 24 months — if not far longer — between conception and delivery to the movie theaters. In a world now dominated by the Internet, studios are at a huge disadvantage in terms of ever lassoing the zeitgeist. Everybody is making movies based on video games, but it seems clear from the abject failure of movies such as “Doom” that it’s almost impossible, given the slow pace of filmmaking, to launch a video game movie before the game has started to lose its sizzle.

New technology is also accelerating word of mouth. Thanks to instant messaging and BlackBerries, bad buzz about a bad movie hits the streets fast enough to stop suckers from lining up to see a new stinker. Even worse, the people who run studios are living in such cocoons that they’ve become wildly out of touch with reality.

[...] Hollywood needs a new mindset, one that sees a movie as something that comes in all shapes and sizes, not something that is wedded to the big screen. Studios have to do what record companies refused to do until they nearly went out of business: embrace the future.

People increasingly want to see movies on their terms [....]

[...] As it stands, Hollywood has become a prisoner of a corporate mindset that is squeezing the entrepreneurial vitality out of the system. It’s not just that studios are making bad movies — they’ve been doing that for years. They’ve lost touch with any real cultural creativity. When you walk down the corridors at Apple or a video game company, there’s an electricity in the air that encourages people into believing they could dream up a new idea that could blow somebody’s mind.

At the big studios, the creative voltage is sometimes so low that you wonder if you’ve wandered into an insurance office. [...]

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A (No-So) New Distribution Outlet [10:19 am]

With Custom CDs, Retailers Hear Cash Registers Jingle [pdf]

Custom CDs aimed at promoting a retailer’s brand have been growing since the mid-1990s. Rock River alone has shipped more than 12 million albums in the last decade, all to non-music retailers. This year, analysts estimate that stores such as Restoration Hardware, Polo Ralph Lauren and Kohl’s will distribute more than 20 million albums bearing their company names.

Retailers say the albums serve as inexpensive advertisements and make money. On average, stores pay $4 each for the Rock River compact discs, then sell them to customers for about $15.

“Shoppers think of Victoria’s Secret every time they slip our CDs into their stereo and relax,” said Ed Razek, chief creative officer at the lingerie giant.

“How else could we get advertising that intimate? And we make a few dollars on every CD we sell.”

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And California …. [10:14 am]

Sony BMG Sued Over Anti-Piracy Software [pdf]

A California-based digital-rights group and the Texas attorney general sued Sony BMG Music Entertainment on Monday for selling compact discs with anti-piracy software that allegedly leaves computers vulnerable to hackers and viruses.

The cases highlight the narrow line walked by the recording industry as it experiments with ways to deter bootleggers. To be effective, copy-protection systems must be tough to crack. But software that’s too intrusive risks alienating music buyers — as Sony BMG’s so-called XCP technology has.

[...] However, copy protection isn’t ceasing. EMI Group, the nation’s fourth-largest record label, intends to include some form of copy protection on most of its releases by the end of next year. An EMI spokesman said the company had manufactured more than 175 million CDs that limit copying and received complaints from less than 1% of customers.

[...] Analysts said EMI’s low incidence of complaints demonstrated that the music industry could deploy technology that didn’t alienate listeners.

“The reason why people don’t complain is because most aren’t really copying CDs in the first place,” said analyst Phil Leigh of Inside Digital Media Inc. “If you can sell music at reasonable prices, consumers will gravitate away from piracy. Eventually companies will stop fighting their customers and just lower their prices.”

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