April 7, 2008

The New Business Models [4:35 pm]

Digital music firms pay heavy price for labels support (pdf)

The last 18 months have seen the major music labels accept new technological and business models — such as dropping digital rights management and allowing ad-supported free music — that have given rise to a new generation of digital music services. But the flip side of this willingness to experiment is a demand for higher upfront advances for licensing music and in some cases a substantial equity stake in the company.

Ad-supported download service SpiralFrog, for instance, paid more than $3 million in upfront advances to Universal Music Group alone before it even went live, and has paid additional millions in licensing fees since the original term expired. Imeem is said to have paid advances as high as $20 million and gave labels equity in the company. Imeem disputes that figure but the equity stake is now a matter of public record.

Sometimes the price is so high it sabotages the deal. A mobile messaging company recently walked away from negotiations in which a label demanded 85% of the company’s gross revenue, even though the deal didn’t involve any music licensing.

Labels say its just the cost of doing business in today’s music industry. Critics say it’s stunting the establishment of a viable digital entertainment marketplace.

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Fighting Over Digital Scrabble [3:22 pm]

Scrabble Tries to Fight a Popular Impostor at Its Own Game

RealNetworks is quietly introducing a version of Scrabble on Facebook, despite pledging to save Scrabulous, the wildly popular, unauthorized online version of the board game.

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Digital Crime [3:21 pm]

High-Tech Crime Is an Online Bubble That Hasn’t Burst

Electronic crime is maturing, according to security experts, and with its evolution, criminals are adopting conventional approaches like supermarket-style pricing and outsourcing to specialists who might act as portfolio managers or computer technicians.

“It’s a remarkable development of a whole alternative business environment that’s occurred over the last couple years,” said Richard Archdeacon, a senior director of global services for Symantec, an Internet security company with 11 research centers around the world. “What’s been so astonishing is the speed with which it’s developed.”

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Fantasy Fishing [3:19 pm]

Online Fantasy and Real Money in Fishing

FLW Fantasy Fishing has gained a quick following in the cluttered world of online fantasy sports by offering $1 million to anyone who can put together the best team of professional anglers in coming months. The prize is as eye-opening as the sponsors who help underwrite it — including Wal-Mart, BP and Chevrolet — showing that even niche online fantasy sports can attract major advertisers across a range of industries.

“More and more marketers are looking for ways not to just slap their logo on a sports site but to engage the consumer and be integrated into the content,” said Chris Russo, president of FantasyPlayers.com, an online marketing service that operates a network of roughly 110 fantasy sites. “And while this all started with football and baseball, it’s really now into a whole lot of other sports.”

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Amazon and Digital Distribution [3:16 pm]

Amazon Accelerates Its Move to Digital

If there were a Committee for the Preservation of Amazon.com, it would include Steven Kessel, Bill Carr and Ian Freed. Mr. Kessel oversees digital efforts for the company. Mr. Carr is in charge of the Amazon MP3 digital music store and its Amazon Unbox video download service. Mr. Freed oversees the company’s e-book-reading device, the Kindle.

As is typical of executives at Amazon, its digital chiefs are stingy with details about their plans. But in an interview, they emphasized the importance of the company’s new online offerings and said a sense of urgency now underlies its digital efforts.

“We wake up every day thinking about digital,” said Mr. Kessel, senior vice president for worldwide digital media, who reports to Jeffrey P. Bezos, Amazon’s founder. “Jeff once said he couldn’t imagine anything more important than reinventing the book. I think that sums it up really well, if you think about that across all our media products.”

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Novelty in Distribution [3:13 pm]

A Comprehensive PBS Documentary on the Iraq War Becomes a Big Hit Online

Executives at “Frontline” do not yet know how many people watched their recent four-and-a-half hour documentary, “Bush’s War,” because of PBS’s complicated Nielsen ratings.

Online, however, “Bush’s War,” which was produced for the fifth anniversary of the United States’ invasion of Iraq, has set a record, with more than 1.5 million views of all or part of the program, which was streamed in 26 segments.

[...] David Fanning, the executive producer of “Frontline,” which has been on the air for 25 years, attributed the Web interest in this particular show to “timing, no question,” noting that PBS had been the only network taking such a comprehensive look back at the Iraq war around the time of the anniversary.

But “Frontline,” which is produced by WGBH in Boston, has also worked to improve the online video experience. With the help of a $5 million MacArthur Foundation grant last year, a new full-screen video player was introduced on the “Frontline” site in time for “Bush’s War.”

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The Difficulties of Digital Archives [10:05 am]

Nothing really new here, but another presentation of the problem — one that doesn’t even get into the DMCA wrinkles, but you take what you can get, I guess: The departed (pdf)

When people donate their lifes work to Boston Universitys Howard Gotlieb Archival Research Center to be preserved alongside Martin Luther King Jr.s letters or Bette Daviss scrapbooks, director Vita Paladino has one request: Print out the e-mails.

Its the ultimate irony of a digital world.

Cuneiform tablets, the Dead Sea scrolls, and books can still be deciphered after centuries, but the cassette tapes, Atari game cartridges, laserdiscs, 78s, and floppy disks of the modern age hold information that has already become virtually irretrievable.

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