October 17, 2007

LeadGen and Cellphones [9:54 am]

Verizon Letter on Privacy Stirs Debate

Verizon Wireless, one of the nation’s largest cellphone carriers, has stirred up controversy with a letter it sent to customers recently telling them that it would begin sharing information from their calling records with its “affiliates, agents and parent companies.”

[...] [A]nalysts and consumer advocates suggest the company may also be interested in gathering information as it prepares to tailor the advertising it displays on cellphone screens, based on individual customer habits and attributes. Mobile advertising is an untapped source of revenue among mobile phone companies looking to expand their businesses.

The concern about the mailing, which spread quickly online and resulted in the company clarifying its position late yesterday, points to the privacy challenges facing communications companies as they seek to deliver information and advertising directly to cellphone users.

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The Business Changes [8:22 am]

Madonna Moves On

It’s official. Madonna, above, and the concert promoter Live Nation announced yesterday that they have agreed on a deal giving Live Nation a stake in her albums, tours, merchandising, films and other music-related projects. [...] Madonna [...] said in a statement: “The paradigm in the music business has shifted, and as an artist and a businesswoman I have to move with that shift. For the first time in my career, the way that my music can reach my fans is unlimited.”

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Living With Moving Targets [7:43 am]

  • House votes to extend ban on Internet taxespdf

    Fear about future tax revenue shortfalls at the state and local levels helped derail a congressional push Tuesday for a permanent federal ban on Internet access taxes. Instead, a nearly unanimous House voted for a more modest four-year moratorium.

    With the current moratorium set to expire at the end of the month, the House voted 405 to 2 to extend the politically popular exemption until 2011. Although there is a strong bipartisan consensus that Internet access should be tax-free, the length of the extension remains controversial as the types of services available online continue to evolve. That threatens to stall the legislation in the Senate.

  • L.A. City Council places phone tax on ballotpdf

    Hoping to keep up with changing telephone technology while salvaging the city’s budget, the Los Angeles City Council voted unanimously Tuesday to put a $243-million telephone utility users tax on the Feb. 15 presidential primary ballot.

    Worried that a pending court ruling could eliminate the 40-year-old tax, the council agreed to ask voters to preserve it and, to ward off future lawsuits, grant the city the power to tax telephone services that have not yet been invented.

See also the Washington Post editorial: The Web Grows Uppdf

A four-year extension is a more than fair deal for an industry whose claim to special tax treatment is tenuous at best. The Internet is not in danger of being stifled by a few extra dollars tacked on to subscribers’ monthly bills. The latest justifications for treating Internet services differently from clothing, food or numerous other goods and services that states and localities choose to tax is to spur the build-out of broadband access and reduce the “digital divide,” the gap between the rich and poor when it comes to Internet access.

These arguments are bogus. [...] It is quite a stretch for providers that have fought the development of broadband networks by municipalities now to claim to be agitating on behalf of the underserved poor.

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Competition and DRM [7:36 am]

Interesting what the market “wants:” Apple reduces price of unrestricted iTunes songspdf

Apple Inc. said Tuesday that it was lowering the price of songs it sells without anti-piracy software from $1.29 to 99 cents, the standard price for a copyright-protected song purchased on its online music store iTunes.

The move comes a month after Amazon.com Inc. launched its online music store, Amazon MP3, which sells songs without copyright restrictions for 89 cents to 99 cents.

In August, Wal-Mart Stores Inc. announced it would sell some of its songs without restrictions for 94 cents each.

Apple’s price cut was not in response to competition, spokesman Tom Neumayr said.

I see - somebody just wanted to leave some money on the table? Riiight.

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A Writer’s Guild Member Speaks [7:32 am]

Share the wealth with writerspdf

I don’t want a strike. I really don’t want a strike. [...] Yet I am voting for this strike authorization, and I urge my fellow writers to do likewise.

Why am I not hoping for peace at any price? That might seem at best counterintuitive, at worst to make no sense at all. How to explain?

The answer is that the price is too high. Here’s what’s at stake in our negotiations for a new three-year contract.

[...] First, the companies are still refusing to raise the rate they pay in DVD residuals. The theatrical release of a motion picture has become, in many ways, mere marketing for the DVD, and DVDs have in effect supplanted the traditional syndication of TV programming. Yet the companies won’t budge from a formula forged in the 1980s, before these shiny discs — now ubiquitous — were a glimmer in anyone’s eye. That decades-old formula is such a thin slice of a thin slice that on each disc, the companies pay more to the manufacturer of the box and packaging (about 50 cents) than they pay in residuals to the writer, director and actors combined (about 20 cents).

[...] [T]he companies refuse to let writers share appropriately in the revenue stream from material distributed over the Internet. They claim that this torrent is at present only a trickle, that there is no “business model,” that this all needs to be “studied.” And while they search for that elusive business model, they are offering to pay us at those antiquated fraction-of-a-fraction rates. Never mind that, even now, this unstudied trickle is making them millions: Each studio or network has cited $500 million or more a year in online revenue.

In the last two negotiations, the companies gave us little or nothing, although they graciously allowed our leadership to proclaim victory. Our membership — and the membership of our sister union, the Screen Actors Guild — believes that in 2007 this no longer cuts it.

See also Producers drop key demand in talks with writerspdf

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