The rapidly growing licensed video market has a new player. Verizon, partnering with Redbox parent company Coinstar (yes, of change-jar-disposal fame), joins Hulu, Netflix, Amazon and HBO GO in a war of business models: subscription versus advertising. But while its start date is set for the second half of the year, Verizon, which has yet to publicly pick sides, could conceivably broaden the streaming ad market. In the mobile world, Verizon’s advantages are clear: access to users in its stores and on its high-traffic service management website; the ability to block other streaming providers if need be; and its video app Flex View, which lets FiOS subscribers watch movies on their phones or tablets. But the true test of success will be the number and quality of its content licenses. So far, Verizon, which didn’t announce any partnerships last Monday when it broke news of the partnership, isn’t talking. Eric Bruno, Verizon’s vp of product management, said licenses are coming, though he declined to say whether they were in place
Read MoreHulu has Paul the Male Matchmaker , Netflix has Lilyhammer and House of Cards . And what does Amazon have in the way of original video programming? Nothing much yet. But that may soon change. New job listings on Amazon’s careers site show the company looking to recruit at least two creative executives for the “People’s Production Company,” its movie and series production arm. Specifically, it’s seeking executives to quarterback its children’s and comedy programming efforts. Both jobs’ top duty: “to help develop half hour comedies for online and traditional distribution.” And traditional distribution. Interesting. So maybe Amazon’s big digital push into the traditional television business is broader than just streaming video. Or, on the other hand, maybe it’s just toe-touch that doesn’t mean much until it means something. Like “ Amazon Studios ,” a screenplay submission factory the company created in 2010, that has yet to result in very much.
Read MoreMusic sales may have bounced back last year after a very, very long slide. But we won’t really know for some time. Meantime, a short-term marker: Warner Music says revenue didn’t increase last quarter. But it didn’t decrease, either: Sales stayed flat at $780 million. If you are looking for a more positive story here, Warner is happy to provide one. Digital revenue jumped 17 percent, and now accounts for 28 percent of the company’s sales. (As always, the label cites guy-you’re-unlikely-to-complain-about Michael Buble as one of its biggest stars. Shudder to imagine a Buble-less quarter for Warner.) Most interesting is Warner’s take on the kind of digital revenue it is seeing, which we can assume is a rough proxy for the rest of the business. Downloads — primarily from iTunes, but also Amazon and other players — accounted for $205 million in music revenue last quarter, while payments from streaming services like Spotify and Deezer generated $15 million. But that streaming revenue is growing at a 36 percent clip, compared to 15 percent for downloads. If people who used to buy albums from iTunes ditch the service for a $10 monthly subscription to Spotify, Rhapsody or the like, then the industry would see substantially more revenue, as paidContent notes. But not even the optimistic music folks think we’re heading there. A much more realistic best-case scenario: Some people who weren’t buying any music at all start shelling out a monthly fee for subscription services, turning pirates into profit centers. That still won’t be enough to replace the dollars the industry has lost since its pre-Napster party days. But it is much, much better than nothing.
Read MoreTrouble at its U.K. print division may have made a rocky 2011 for News Corp, but the media conglomerate defied expectations by pulling out of its three-straight-quarter streak of year-on-year profit declines. Revenue at the company was up 2 percent over last year in the second quarter of fiscal year 2012, coming to a solid $8.98 billion vs. last year's $8.76 billion; earnings for the quarter were up 65% to $1.06 billion against last year's $642 million. It's particularly impressive considering the obstacles News Corp. has had to overcome this quarter alone: Dave DeVoe, the company's CFO, clocked the legal cost of the News of the World phone hacking scandal at $125 million—"a figure "substantially higher than our guidance at the beginning of the first quarter," DeVoe admitted. Accordingly, earnings calls at News will no longer include that guidance—just tallies of the previous quarter's expenditures (COO Chase Carey estimated that settlements accounted for just 15 percent of that cost, with the rest taken up by legal fees). Lost revenue from the paper itself continued to dog the conglomerate's bottom line. News Corp's white knight this quarter was its cable division—strong performances by new and established series on FX and the start of the presidential campaign season for Fox News Channel gave the unit an edge, as did the division's regional sports networks (RSN's). The company said that this season's NBA lockout more or less corresponded to the prior season's contract dispute - presumably it expects higher revenue still during Q2 of 2013. Overall, the division grew $147 million year-over-year, from $735 million to $882 million. Ad revenue on domestic cable networks saw a 6% uptick, led by ratings gains at FX. with Louie , American Horror Story , and Justified among the network's hits. Carey indrectly referenced the weak scatter market: "The advertising markets, while not quite as robust as they were six months ago, remain solid," he said. Carey said that ad sales on FX had seen "strong double-digit growth," while RSN's were "up in the mid-single-digits." News Corp's digital investments paid off this quarter, as well. "The majority of the [digital] revenue predicted for this year is already captured," said DeVoe. The number so far is $200 million from deals with Netflix and Amazon, and Carey said he saw potential for a great deal of growth, as far as digital is concerned.
Read MoreLivingSocial’s financial results for the past year were reported by Amazon today, revealing that the company continues to trail behind Groupon by a wide margin. Amazon, which has a 31 percent stake in the second-largest daily deals company, released the figures as part of its quarterly filing today with the Securities & Exchange. It said LivingSocial’s 2011 net loss totaled $558 million on revenues of $245 million. The footnote was first reported by Geekwire’s Todd Bishop this morning. Chicago-based Groupon, which is the daily deals leader, will report 2011 results next week. But based on its results for the nine months ended Sept. 30, it is still much larger. In the nine-month period, Groupon recorded a net loss of $238 million on revenues of $1.1 billion. LivingSocial was always presumed to trail behind Groupon by a fair margin, but now we are able to see exactly how wide the gap is. However, a source close to LivingSocial said the numbers reported by Amazon are somewhat deceiving. They do not reflect the full year of international results, including the results from some fairly large acquisitions, such as Ticket Monster in South Korea . The source also said the losses are artificially high because of non-cash expenses, such as stock-based compensation, which soared as the company increased its employee base from 500 to 6,000 in the past year and made 11 acquisitions. According to the source, the company’s gross bookings, which include both the merchants’ and LivingSocial’s take-home sales, totaled between $750 million to $800 million, not including some foreign investments.
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Amazon (NSDQ: AMZN) disappointed investors by reporting Q4 2011 revenues of $17.4 billion this afternoon, up 35 percent from a year ago but missing analyst estimates. Net income slid to $177 million on earnings of $0.38 per share, down 58 percent from this time last year, and shares were down 8 percent in after-hours trading. Amazon says Kindle sales (of the Fire and e-readers) “nearly tripled” during the nine-week holiday period ending December 31, up 177 percent over the previous year. As usual, the company did not state how many Kindles it has actually sold. Operating income was $260 million for the
Read MoreWho is Amazon’s biggest competitor? It may be a Japanese company you’ve never heard of. Rakuten is set on challenging Amazon’s global dominance by appealing to the third-party merchants Amazon works with today and by growing it’s digital content business to compete with the Kindle. We recently learned about the company’s strategy through the eyes of Neel Grover, the CEO of Buy.com, Rakuten’s online shopping subsidiary in the U.S. For now, Rakuten is admittedly Amazon’s much smaller competitor, though it is dominant in Japan. The publicly held company is worth $14.5 billion compared to Amazon’s $85 billion market capitalization, and it pales in comparison to Amazon’s mass in the U.S. Buy.com is ranked 410th here versus Amazon’s sixth-place standing, according to Compete. But Grover said Rakuten has a two-part plan for going up against Amazon. First, it will target and partner with third-party resellers and merchants. Amazon does this, too, but often ends up competing with the merchants because it has its own warehouses and products that it is selling, he said. “Oftentimes Amazon will compete with the retailer. [Third-party merchants] teach Amazon what to buy and sell, which is ultimately not good for the merchant,” he said. Rakuten, on the other hand, does not own any warehouses or any inventory itself and instead gives retailers — brick and mortar or e-commerce — the tools and traffic to support their own businesses. In May 2010, Rakuten acquired Buy.com. “I sought out Rakuten. … I thought their model was one that would give us a unique differentiator in the U.S. and we could learn and bring their model to our site and customers,” Grover said. “We are still in the final stages of transforming, and it’s taken a bit of time to get it transformed.” But, he confidently added, “It will win out in the long-term.” A similar approach is being taken by eBay, another e-commerce giant in the U.S.
Read MoreGoogle’s head of consumer payments Vikas Gupta has resigned, AllThingsD has confirmed. Gupta joined the company 18 months ago after Google acquired Jambool, a virtual goods payment platform where he was a founder and CEO. More recently, he’d been one of the leaders on the payments team, overseeing Google Wallet and reporting to Osama Bedier, Google’s VP of Payments. “I can confirm that Vikas has left Google and we wish him all the best in his future endeavors,” a spokesman said. Jambool’s product, Social Gold, was rolled into Google’s payment products and is being used for in-app purchases on both Android Market and Google+ Games. According to Gupta’s LinkedIn page , he joined Google in August 2010 and held the title of head of consumer payments. Jambool reportedly was purchased for $55 million before any additional earn-outs. Prior to founding Jambool, Gupta worked at Amazon. Gupta’s departure is the second management move made in the Google Wallet ranks over the past week. A spokesperson declined to say if the division was undergoing a wider restructuring, but last week, I reported that Google’s VP of Commerce Stephanie Tilenius was moving into a more global position . And, as part of that, Bedier will be taking on a larger role within Google Wallet, though his title will not be changing. The Wallet is Google’s mobile payments strategy that allows users to tap their phone at the register to pay using near field communication technology. The company has already successfully formed alliances with both banks and retailers, and is leveraging its vast install base of Android users. Today, it is live with some merchants, although it does face some challenges
Read MoreTravelzoo’s stock is down almost 10 percent, or $3 a share, in late trading after its fourth-quarter revenues disappointed analysts. The New York-based company, which sells travel deals and daily deals via email and from its Web site, said fourth-quarter revenues totaled $35.2 million, falling below analyst expectations of $38.7 million. However, Travelzoo did manage to return a healthy profit of 40 cents a share, exceeding estimates of 35 cents a share, according to Thomson Reuters , which conducted a survey of analysts. The company is Groupon’s closest publicly held competitor, other than Google or Amazon, which don’t break out results from daily deals. Groupon was also trading lower today, falling about 3 percent, or 59cents, to $19.49 a share. Groupon will report fourth-quarter earnings in two weeks on Feb. 8. In a statement , CEO Chris Loughlin said despite a slower period for travel advertising in the fourth quarter, revenues in that period grew faster year-over-year than in any quarter in four years.
Read MoreLast year’s back-to-school season may not have spurred a ton of tablet and e-reader purchases, but the holidays were a different story, according to new data from the Pew Research Center. The share of U.S. adults who own tablet computers nearly doubled from 10 percent to 19 percent between mid-December and early January, while the same growth spike also applied to e-book readers, which also jumped from 10 percent to 19 percent over the same period. The driving force behind the surge in ownership, Pew said, was the relatively low cost of tablets like the $199 Kindle Fire and the $249 Barnes & Noble Nook tablet, as well as the price of some e-readers dropping below $100. The new data comes after a period — from mid-2011 into the fall — in which there wasn’t a lot of change in the ownership of tablets and e-book readers, Pew said. We already had an inkling that the Amazon Kindle Fire sold very well in its first few weeks on the market; a Barclays analyst has estimated that Amazon sold 5.5 million Kindle Fire tablets last quarter, and predicts that Amazon will sell 18.4 million Kindle Fires this year, giving Amazon half of the non-iPad tablet market. Also not entirely surprising: Households with higher incomes bought more tablets, while women’s ownership of e-readers increased more than men’s. More than a third of those living in households earning more than $75,000 — 36 percent — now own a tablet computer, Pew said. Ownership of e-readers among women grew more than among men, from 11 percent to 21 percent; compared to a 5 percent increase for men, with just 16 percent of them owning e-readers. Anecdotally, those cheaper tablets still are harder to spot “out in the wild” than the iPad, as my AllThingsD colleague, Peter Kafka, notes here , whereas iPads seem to be popping up everywhere, from the airport to the gym. Personally, I know a handful of female adults who got either Kindle Fire tablets or less expensive Kindle e-readers this holiday season
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