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WaPo “Star Wars” Blog Limping Along May 11, 2005

Posted by David Card in Media.
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Gold star for trying, anyway. Washingtonpost.com’s Star Wars blog appears to be struggling, at least in terms of engaging readers interactively. The daily – weekdays anyway – posts have been running since June 5th and have attracted two – count ’em, two – reader comments. Maybe readership is doing better; today the blog is promoted on the front page (below the fold).

I can’t resist quoting the first reader comment:

    Star Wars are the best movies I’ve ever seen. I think the third movie will be the best. I’m wondering if there will be a seventh one because on my Star Wars game Luke has daughter with someone I don’t know who but Luke’s daughter has a pink lightsaber and she beomes the strongest Jedi. I’m also thinking Luke go’s to the Darkside because he got his hand cut off like his father and also his dad was on the Darkside and he found out all the power he could have on the Darkside that’s why I’m wondering if there’le be a seventh movie so if there is a seventh movie please write me back if not just send me a letter saying there won’t be a seventh one or say the creator ain’t going to make a nother movie THANKYOU.

It is a Star Wars blog, after all. But where’s the Post’s response to that burning question?? Anxious fans are waiting.

Yahoo Music Re-Launches Early May 10, 2005

Posted by David Card in Media.
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Yahoo slipped out its big Music announcement early. Here are some tidbits and a first take. The combination of a solid subscription service offering and a big media company will be powerful, but it’s all about execution. I don’t think this is a winner-take-all-market, and even if it is, it’s too early for that anyway. I suspect music services – like most media and entertainment businesses – will support multiple companies without a clear market share leader, where companies differentiate by audience, niche, programming, exclusives, pricing, etc. But clearly, companies without big media partners need to compensate with other forms of marketing.


Yahoo Music Unlimited – beta version new subs’n service, including portable rentals
Yahoo Music Engine – new free jukebox app


– All the usual features. Shockingly low introductory offer: $6.99/mo (includes portable rentals ); $4.99 with a one-year commitment
-Let me assure you labels will not be happy with this pricing: they hate the precedent of a low price being set. Most labels want to establish three tiers of service – $5 radio, $10 PC-tethered downloads or streaming, $15 device-tethered downloads.
– Yahoo didn’t get any new deals: it is eating the cost if it has guaranteed minimums or pennies per play. If the Yahoo contracts are all revenue sharing, well, the contracts won’t last forever. I doubt this pricing is sustainable without new contracts.
– This is all very exciting, but there is no proven price elasticity in the market for music services, and seeing as it’s very early in this market’s development cycle, it would be far more natural to “screw the early adopters,” and only lower prices when mass markets or late adopters come on board.
– YMU subscribers get 79-cent downloads


– MusicNet built the back end for subs’n and downloads; very little or no Musicmatch technology or integration yet; Yahoo did all the front end & jukebox themselves way before they bought Musicmatch
– Musicmatch is not dead, and Yahoo will continue to market it. It claims little customer overlap. That’s possible, as Launch users are younger than the average Musicmatch boomer music aficionado. Yahoo says it will ultimately bring the two products together, and that MM has good personalization technologies
– Still, one wonders what they got for their $160M
– Tech underpinnings are Windows Media 10; Janus; jukebox will recognize AAC, Ogg Vorbis, etc.


– From what I understand, though this is preliminary, the Dell DJ is the only supported device (Musicmatch deal still in place). Yahoo acknowledges portability across WMA devices is sketchy so far

Differentiation Strategy

– Besides price, brand, market reach, Yahoo’s intended differentiation strategy is via personalization and community: Yahoo’s IM is integrated. In the long run, community is cool – but right now this market is all about awareness and teaching consumers just what exactly is a “jukebox in the sky”. It’s not about competing on nuanced features
– YMU user can listen to music on YE users’ hard drive, if the song has been cleared & is in the YMU catalog (not necessarily purchased)
– One-click playlists based on songs or artists; also will scan your collection; recommendations on day 1; personalization is based more on ratings (MM pzn is more implicit)
– Content is mostly links to Yahoo Music
– Launchcast Plus radio is built in


– No comment on how long intro pricing will last; or how long beta period will last.
– Yahoo is excited about flash-based music players; but no announcements right now.
– Yahoo also likes music phones a lot. It doesn’t think that it’s necessary to to deliver music over the air to a phone, but rather to fill up the phone with a service like this, with the PC as the hub for management, playlist creation, etc. I don’t disagree, though I’m a minority opinion at Jupiter on this, and I observe that carriers and labels need to be in on the service revenues, and lose some of their over-the-air obsession. Jupiter projects that there there will be more music phones than MP3 players in five years, but that doesn’t mean that they will be people’s primary music device, nor that much of the device business is at risk.

Bertelsmann to Merge BMG Direct with Columbia House May 10, 2005

Posted by David Card in Media.
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The Journal’s take on Bertelsmann’s intent to acquire Columbia House – reportedly for $400M – and merge the record and DVD club with its own BMG Direct. It says:

Book and record clubs have an anachronistic feel in the digital age.

Well, sort of. One might ask, isn’t a record club a logical migration path to a digital music subscription? You know Jupiter loves the music subscription business. Well, not really. The customers that subscribe to music clubs are mostly CD purists. But still, you’d like to see a company that knows the subscription music and DVD business experiment a little more with online cataloging, at least.

Actually BMG Direct has a very interesting online project. Yourmusic is very low-key, but it’s a great way to buy bargain CDs with a subscription rather than the old “we’ll mail it to you first” plan.

What, Are They Embarrassed? May 9, 2005

Posted by David Card in Media.
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The Journal manages to avoid using the word “tabloid” until the 11th graf of a 14-paragraph story announcing that the Asian Wall Street Journal and the Wall Street Journal Europe are adopting that format. The move is supposed to save $17M a year in production costs, starting in 2006. Jobs will be cut and the pubs will be more tightly integrated with the mother ship.

Surprise! Old Media Blog Obsession Continues! May 8, 2005

Posted by David Card in Media.
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Gawker Media publisher Nick Denton says it best:

    “The hype comes from unemployed or partially employed marketing professionals and people who never made it as journalists wanting to believe,” he said. “They want to believe there’s going to be this new revolution and their lives are going to be changed.”

Ah, but the Times still devotes 2,470 words to Denton’s self-proclaimed “pathetic” empire.

NY Post Registration Follies Continue May 6, 2005

Posted by David Card in Media.
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Since I started on this topic, I’ll ride it out. Registration still doesn’t work today, and online visitors are blocked from entertainment, business, and other sections that are below the fold on the front page. But you can get to:

    Thank you for your request to register.

    Due to the large demand, we are currently servicing a backlog in registration data.

    We apologize for any delays you may have experienced and to save you time, the site will automatically invite you to register on a future visit when this backlog has been cleared.

    In the meantime, please enjoy the following without registration:

    Post Opinion
    Celebrity Photos

A couple of old but still valid pieces on site relaunch that the folks at the Post must have missed.

Newspaper Registration: Bad Execution, Not Bad Idea May 5, 2005

Posted by David Card in Media.
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Apparently, the NY Post really blew it in its attemp to get online readers to register. Here’s today’s pitch, which I think is pretty good:

Register for the New York Post Online Edition Today!
It’s FREE! Become a member – it’s the only way to access every story on NYPOST.COM. Don’t miss a day – click here to sign up now!

Today at least, nothing is blocked if you don’t register. But clicking to register gets you:

We apologize: We are currently undergoing very heavy traffic to the site.

Thank you for your patience. We are experiencing a backlog in processing registration data. Please try to register again. In the meantime, click on the following to access the New York Post Online Edition.

The FAQ also does a pretty good job of developing the pitch for the benefits of registration:

As a registered user you have virtually unlimited access to The NYPOE (registration does not cover a few specialized areas of our site, such as our paid archives). You also have full access to – and can easily and quickly customize – special services, including our Daily Newsletters and our customizable online real estate listings service in NYP Home. In addition, entering contests and sweepstakes on The NYPOE is easy when you are a registered user. All the information you’ve provided during registration will be automatically pre-filled for you on our sweepstakes form. As a registered user, our site now remembers your information when you login regardless of whether you’re entering a sweepstakes or subscribing to home delivery.

I didn’t try to register yesterday, so I missed what appears to be the bad execution. Dunno whether it was number of fields, response time, or what.

Just get an email address and password first, and maybe zip code in trade for weather (that will probably work, even for locals). Promise newsletter or alerts – they have weirdly high acceptance levels (if not actual usage). Then follow up later. This Jupiter report is an oldie but goodie, and even though it’s targeted at retailers, the advice is good for media sites.

Time Warner 1Q05 Earnings Call May 4, 2005

Posted by David Card in Media.
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Industry and market – rather than financial – tidbits from the call. Details are here.

Time Warner had a pretty good quarter, and reaffirmed its guidance for the year. Total revenues were up 3% to $10.5 billion. It paid down another $1B of debt, and then, at the beginning of Q2, sold off the rest of its Google stock for $940M to bring its current debt to about $14B. Cable was up 10% to $2.2B. Filmed entertainment was up 1% to $3B, which was better than expected due to very tough comparisons a year ago (Lord of the Rings DVD sales). TV Networks was up 4% to $2.3B. AOL was down 3% to $2.1B as subscriptions continued to shrink. Publishing was up 8% to $1.2B.


– Subscription revenues shrank 8% to $1.8B while advertising was up 45% to $311M. Management said AOL is doing just what it should be, according to plan, and had its highest profit in over three years.
– A lot of the advertising growth, however, is from the acquired Advertising.com, which totalled $60M. Pro-forma growth was 20%. A questioner who estimated display ad growth at 7% was not challenged.
– AOL subscriber ARPU declined a little to $18.91, due to both a higher percentage of low-priced users and lower spending by the over $15 spenders (presumably more trial offers, etc.)
– Management said a story about an aggressively priced AOL offer got some pick up, but that it did not indicate a change in pricing strategy. AOL supposedly tries out 100 different offers a year.
– Cross-promotions between AOL and Time Warner Cable are still in test stages. There are no meaningful results yet. Integration of billing, provisioning, customer service, etc. is still not complete.
– AOL.com re-launch is on track for this summer.

Cable and Broadband

– 4.9M digital subs, 45% penetration. Over 100K net adds, which is pretty healthy.
– 4.1M broadband subs, 22% penetration. 209K net adds, which is the first time that figure’s been over 200K in a while. Broadband ARPU is roughly flat.
– 372K paying VOIP customers; 3% penetration. 152K net adds. Time Warner is still focused on selling triple-play bundles (about 75% of VOIP subs are part of triple play deals) – it thinks that’s a good lock-in and competitive strategy, and that it raises customer satisfaction and reduces churn. It’s adding 15K new users a week, and expects that number “to creep up for the balance of the year.” VOIP is not profitable yet, but should be in 2H05 and break-even for the year.
– Digital ARPU is over $80, the 5th consecutive quarter of growth.
– DVRs just under 1M; 20% penetration
– SVOD 1.65M subscribers, 30+% penetration. SVOD accounts for 45% of total VOD usage (Time Warner served up 20% more streams in March than in December), and Time Warner content (including HBO, etc.) comprises over half the total usage.


– Turner grew fees and advertising by 12% each.
– Scatter is “fairly strong.” Ratings across Turner are strong, and management expects it will be the growth leader in the coming upfront. It also expects CNN will outperform the projected overall 10-11% upfront sales growth that is the consensus.


– People, InStyle, Real Simple and new pubs all had solid growth. However, management expects a tough 2Q in advertising for Time, Sports Illustrated, and Fortune.

Filmed Entertainment

– Jeff Bewkes brushed off a comment that Warner Bros. wasn’t pursuing computer-generated animation aggressively enough. He said Polar Express did better in dollars than in critical reviews, and that TW’s animation efforts at Cartoon Network and elsewhere showed you didn’t have to spend hundreds of millions on CGI to have a successful animation business.


So, the current tally for the first quarter in online advertising growth stands at:

MSN 4% (ouch)
AOL 20%
Yahoo 55%
Google 93%

Old-Media Attitude from NBC Chief May 3, 2005

Posted by David Card in Media.
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Broadcasting & Cable doesn’t get much out of Bob Wright in its cover story on NBC Universal one year later. There is this damning bit on that Internet thing (you know, that one that’s going to be HUGE someday):

Q: In digital, what’s the fear versus the opportunity?

There’s plenty to worry about, and there’s also plenty to be happy about. The Internet is a friend and a foe. We need to feel as comfortable dealing with the Internet as, for instance, we do dealing with broadcast operations or cable operations. We need to feel our content is protected, that it’s valued properly, that it’s paid for—and we need to deal with the piracy issues there. You have to kind of roll with the times and sort out the elements. But other people are in the same boat, and we’ll figure that out.

It doesn’t seem that attitude permeates the corporation: NBC does okay in our TV Network online CORE score, and MSNBC does pretty well in online news. Maybe he’s just obsessing about movies.

Knelling Newspaper Deaths…One More Time May 2, 2005

Posted by David Card in Media.
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The Journal has (yet another) Page One story on the death of newspapers, based in part on these data points (the rest of the story is good):

Circulation numbers to be released today by the Audit Bureau of Circulations probably will show industrywide declines of 1% to 3%, according to people familiar with the situation — possibly the highest for daily newspapers since the industry shed 2.6% of subscribers in 1990-91….Daily circulation of American newspapers peaked in 1984 and had fallen nearly 13% to 55.2 million copies in 2003, according to the Newspaper Association of America.

Well, maybe circulation by some accounting method really did peak in 1984, but the important pattern is declining daily readership. That has been going on since the invention of TeeVee. On the NAA’s own site are stats that show these declines in the percentage of the adult population that reads a daily paper:

1964 &nbsp 81%
1974 &nbsp 72% &nbsp (-11%)
1984 &nbsp 65% &nbsp (-10%)
1994 &nbsp 62% &nbsp ( -6%)
2004 &nbsp 53% &nbsp (-14%)

TeeVee “killed” newspapers; the Internet is driving the nail in the coffin. But there’s no reasons news organizations should die, it’s just the pulp part of the business that’s fading.

True, online advertising is tricky. While local spending accounts for 29 percent of online advertising, that figure is bulked up by online classifieds. Local spending totals only five percent of online display ad dollars, and accounted for approximately 20 percent of paid search in 2004. Off-line, local spending is 40 percent of total US advertising.

I admit I’m seriously worried that if the Journal and the Times and the Post and a few others go under, no one will fund investigative journalism. It sure won’t be TeeVee or Public Broadcasting, both of which are heavilly reliant on the best papers for setting the news agenda and doing a ton of the work. And then who would Google spider?

But anyway, circ is probably down this year because everyone’s counting more tightly, in light of all the print circulation accounting scandals.