Liberty Garage Hosted on ZooomrArchive for November, 2006
Liberty City Garage
Nov 15
Liberty Garage Hosted on ZooomrDivX let their CFO, John Tanner take a break from his usual stuffy day to day activities of dealing with Sarbanes Oxley requirements, so that he could give a presentation at the UBS Paine Webber Global Technology conference on November 14th. During his presentation he gave a detailed overview of DivX’s business prospects and described an industry that was fighting a war between open standards and proprietary systems.
In addressing the audience of financial professionals, Tanner started out by giving some background information on the history of DivX and their goals over the next year. While the presentation was largely geared towards investors, during his talk, he made it clear that despite the success of their recent public offering, DivX was committed to staying true to their community roots and pointed out that none of their success would have been possible, if consumers hadn’t created billions of DivX files in the first few years that DivX was released.
In looking at the future of the industry, Tanner painted a picture of a video industry that is locked in a crucial format war that will set the stage for how VOD will operate in the future. With many businesses trying to force consumers into a closed system, it offers little interoperability between various consumer electronic devices. The most striking example of this has been Apple, who has obtained a stranglehold on the music industry and now refuses to licence their iTunes music files to outside mp3 developers. DivX believes that this proprietary approach is the wrong one and that, particularly when it comes to video, that it will fail. To highlight the importance of this issue, Tanner said that at DivX, “there is a maxim that open systems win. We’ve seen a number of expamples of closed systems and open systems at war, especially in high technology over the years and we believe one is being waged right now.”
He later went on to compare the current battle over the VOD codec to the battle that Apple Computer first lost against the more open Wintel. He also pointed to Compuserve’s attempt to lock their subscribers into their own internet vs. the competition of the World Wide Web, as an example of how proprietary systems won’t work in a digitally connected world. In looking at the VOD landscape, DivX is clearly concerned by attempts from Microsoft and Apple to lock their customers into proprietary formats for video, yet they seem to feel that neither company has acheived very much traction to date.
Because of Microsoft’s size, they’ve made little to no progress in licensing their own .wmv file to DVD manufactuers. Other then a few cell phones and their own proprietary products, there has been little demand for .wmv outside of the Zune and Xbox 360. Apple has had some success with their iTunes movie downloads, yet they still don’t offer a way for consumers to easily bring this entertainment to their television sets. To a certain extent, there was some irony in Tanner calling for a more open standard because of DivX’s own proprietary codec, but his point that they are willing to licence their technology to multiple manufacturing partners was not lost on his audience.
In discussing the future direction for DivX, Tanner highlighted that there were several different ways in which he felt the company could grow, “We talk about growth within the company in three different ways. Across new devices, across new georgraphies and across new device categories.”
When it comes to new devices, DivX is currently focused on bringing their technology to the digital camera. They are doing this, in part, to earn licensing revenue, but also to help create more DivX content that will ultimately drive demand for other DivX supported products. Instead of focusing on video camera manufactuers themselves, Tanner instead believes that the company can offer a greater benefit to traditional digital camera makers because their DivX codec, allows consumers to compress video content onto limited capacity memory cards and still leave room for photos. In discussing their progress on this front, Tanner pointed out that Canon and Pentax are currently licensing their technology and that they expect to add two more digital camera partners by the end of the year.
As far as increasing DivX’s growth in terms of geography, it’s important to note that while DivX has had strong success in Europe and Japan, they’ve received limited support here in the US. Tanner estimated that approximately 25% of all DVD players sold incorporate the DivX brand. If you break this down to North America, this percentage drops to 14% at the time of their IPO, but it is now 19% after just a few short months. Part of DivX’s growth strategy will be to continue to try and build support from OEMs in geographic areas where they are not satisfied with their penetration levels.
In reference to new device categories, Tanner specifically mentioned that he believed the DVD player was a fading technology and that it would eventually be replaced by the DVR. While none of the major DVR players currently support DivX, Tanner sees a real value opportunity for them to utilize DivX technology and claims that by using their codec to directly record television onto a hard drive, that they can offer DVR manufacturers 10 times more storage capacity then what their current codec allows.
One of the more interesting comments that Tanner made during his presentation, was in regards to the company’s partnership with Google and now YouTube. While it’s been no secret that Google makes up approximately 20% of DivX’s revenue, 17% of that has been from advertising. During the company’s last conference call, DivX CEO Jordan Greenhall had said that while they were optimistic that YouTube would consider using DivX’s codec, their current agreement only extended to Google Video, yet during the presentation Tanner specifically said “YouTube, we believe, is going to be a solid endorsement of DivX Tech, Uh it already is a solid endorsement of DivX technology.” He then went on to add that “Google pays us for the exclusive right to use our website to download their toolbar, in addition to having YouTube recommend DivX on it’s website.”
While Tanner didn’t clarify his statement and no one at UBS asked any follow up questions on the statement, I can tell you that I’ve never seen a DivX advertisement on YouTube and found the comment to be very puzzling. While it would make sense for Google to incorporate DivX’s technology into the hottest video sharing site on the net, I could only scratch my head and wonder if Tanner’s comments alluded to something that was going on behind the scenes or if “YouTube endorsing DivX’s technology” really meant something more benign. Google’s payment for the use of DivX’s codec was a one time licensing event in the third quarter, but management did say that if YouTube decided to also use their codec, they would be thrilled by this.
During the half hour investor presentation, Tanner also warned investors to keep in mind that their revenue and net income was highly seasonal. Because they don’t recognize revenue until their OEM partners report their sales, it means that that their 1st quarter is typically the biggest because it reflects the 4th quarter holiday sales from their partners. The second quarter of each year is typically the slowest time of the year. While this situation is hardly unique to DivX, it still seemed strange to think of DivX’s business as a lagging indicator of the consumer electronic industry.
While the UBS’ dog and pony show didn’t offer any major new insights into DivX’s strategy in how they plan on fighting the VOD format wars, it was still nice to have another opportunity to hear DivX publically comment on their business plans. Yet again, no one asked about the potential of the Xbox 360 or PS3 licensing questions and surprisingly Tanner did not mention their plans to offer a direct competitor to Apple’s recently announced iTV product.
Whether or not DivX will be able to take on industry giants like Apple and Microsoft is still a big question mark for the company, but after surviving the guerrilla war of the P2P revolution and emerging from this environment with a successful business built around a single codec, DivX has proved itself to be a survivor. While there are limitations as to how far they can take their business on a single codec alone, plans by the company to expand their product offerings into media distribution and alternative products could go a long way in diversifying a very concentrated revenue stream.
Video: Streaming Media West 2006: Keynote by Evan Young, Dir. Broadband Services, TiVo
With TiVo announcing today, that they plan on ushering in a new era of broadband based television, I was left with more questions then answers when it came to how this impacted their long term strategy as a business. In a series of press releases that addressed everything from celebrity recommendations to additions to their TiVoCast service, I found myself almost dizzy trying to understand the broader implications of their recent broadband announcements.
While many details, involving the program were only announced today, late last week, Evan Young, the Director of broadband services for TiVo, gave a keynote address at the Streaming Media West 2006 conference where he offered a significant amount of insight into what TiVo’s future may hold, when it comes to broadband television. During his presentation, Young gave a startlingly honest assessment of the challenges that TiVo faces, as well as the opportunities that lie ahead.
After viewing his presentation, if there was one impression I was left with, it was the importance that broadband distribution will play to TiVo’s future. In the past there have been a lot of gate keepers that have prevented independent producers from bringing their content to television viewers and whether it was the cable companies, the Hollywood studios or the film distribution networks, the web now threatens to end the monopoly that they’ve held on television. While the internet has served as a great democratizer for publishers, it still can’t match the large scale distribution power of television and with their broadband strategy in hand, TiVo hopes to make a direct assault on the 22 minute half hour and 44 minute hour that that big media providers have built their businesses around.
While there will undoubtably be challenges in monetizing this revenue stream, TiVo intends to capitalize on the active nature of their service vs. the passive nature of traditional television by taking advantage of branded content at the browser level and by allowing consumers to opt into advertisments, instead of forcing irrelevant 30 second spots on them. While the major media companies have done a great job of addressing mass distribution for advertisers, they’ve done a terrible job of addressing the micro opportunities that exist today and TiVo hopes to fill the gap between short head content and longtail demand by opening up their subscriber base to the entire world wide web of video.
One of the things that I found so refreshing about Young’s presentation was that he clearly spoke from his heart. Instead of trying to censor everything he said, he showed conviction in the thoughts that he expressed. While some may consider his presentation to be a less polished approach then what members of the executive team may have given, I found his direct and honest assesment of TiVo’s broadband inititives to be a breath of fresh air, after listening to TiVo Executives dodge question after question after question over the last 12 months.
One of the more juicy tidbits that Young disclosed during his presentation was the actual number of TiVo subscribers that have connected their DVR’s to the internet, as well as the total number of DVRs that are eligible to be connected to the net. In the past TiVo has refused to disclose these numbers, but have said that they’ve seen a massive jump in customer satisfaction, between subscribers who have their TiVo DVRs connected via broadband vs. those who use a traditional phone line. As it turns out, of the approximately 4.5 million TiVo subscribers, a little over 2 million of them have the ability to connect their DVRs to the internet, but only 520,000 customers actually have access to broadband based services through their TiVo.
Other juicy details that Young revealed, were some of the more interesting background information on consumer adoption of these services. Despite only having 520,000 subscribers with the ability to use TiVo’s enhanced services, an astonishing 80% of them actually take advantage of it. Whether it’s listening to their favorite podcasts, tuning into Cnet’s weekly tech show or interacting with long form advertisements, broadband enabled TiVo subscribers are clearly making use of their connections. When asked specifically about advertisment acceptance rates, Young said that when it comes to general interest ads like movies and consumer products, the response rate is greater then 50%, but when it comes to luxury goods like financial services and high end vehicles, the number drops into the single digits.
When asked about how many people were taking advantage of TiVo to Go, surprisingly, Young responded that it was still a minority of TiVo subscribers that actually made use of the service. While I would have expected there to easily be a majority or users taking advantage of this service, to a certain extent, I can personally understand why this hasn’t been more popular. As someone who travels fairly infrequently, who has a very limited commute and who would prefer watching television on my gorgeous 60″ HDTV big screen TV, I can tell you that TiVo to Go has limited appeal to me. I am by far, much more excited about the possiblity of not only downloading video from the internet to my TiVo, but at the possiblity of uploading my own videos for my friends, family and readers to be able to watch from the comfort of their living rooms.
At the end of the presentation, Young was asked about two hot topic issues. The first was whether or not TiVo intended to introduce placeshifting to their service and the second was whether or not TiVo intended to allow PC functionality on their systems. In regards to placeshifting, Young said that TiVo wasn’t ready to address some of the DMCA concerns when it came to streaming live TV into other regions. While he stopped short of agreeing with the television industry’s position on this issue, I did get the sense that TiVo may have learned something when Replay TV was sued into oblivion over their commercial skipping functionality.
When it came to PC functionality, I was a little surprised at his answer. Earlier this year, when Davina Kent, TiVo’s VP of National advertising gave a presentation on TiVo’s advertising inititives, she said that TiVo subscribers had demonstrated, in consumer surveys, that they really didn’t want their DVR to function like a PC, yet Young seemed to indicate that it was less of a desire by TiVo to offer this functionality and more of a technological issue.
I’ve long wanted TiVo to introduce a linux based operating system that would allow internet browsing and PC functionality from my couch. While I don’t intend on doing any intense document editing from the comfort of my living room, it would be nice to be able to tap into a friendly poker game, email or any other web application that might be more interesting then watching TV. When this issue was raised Young responded that even though people may think of TiVo as a computer, deep down inside it really isn’t. Between their dual tuners, broadband downloading and their always on functionality, 99% of TiVo’s capacity is typically in use and it would be difficult for an operating system to run on top of this. He instead pointed to some of the open APIs that existed for developers who are interested in building home media engine applications for TiVo, but did admit that the video API would remain closed for now.
While he did say that TiVo expects to open their video API, at some point in the future, for the time being, TiVo is sensitive to the fact that their users expect a premium experience when using their box. By allowing people to download any content through the TiVoCast service, TiVo is concerned that poor video quality could taint the customer experience. Instead, they intend on allowing any non-copyrighted video to be played, but consumers must first download it from the web. By doing so, they hope that it will differentiate the content delivered via TiVoCast, from the content that users choose to bring to the service, even if it still ends up being poor quality.
Regardless of where the content comes from though, one thing that Young made absolutely clear, was that TiVo has no intention of discriminating against web based content. They intend not only to include your net downloads directly into your now playing list, but are currently working on ways that they can incorporate their TiVo suggestion technology into internet content as well.
During the presentation, Young discussed in great detail their experience with Rocketboom and the learning process that it’s been for the company. When they approached Rocketboom to take part in their TiVoCast program, one of the things that they asked Andrew Baron for, was higher resolution copies of the video files that they were posting online. By utilizing mpeg2 copies of the files, instead of flash videos online, it improved the experience from a television perspective and this is something that potential TiVoCast producers should consider, if they’d like to be added to the program.
When it comes to distribution costs, TiVo employs a BYOB strategy (bring your own broadband). By requiring producers to use their own broadband to distribute their fims, TiVo avoids becoming a hosting solution provider and instead acts as a distribution content portal. In exchange for providing your own broadband to TiVo subscribers, content owners are allowed to sell their own advertising in their video streams, very much in the same way that traditional television does today. Because TiVo is providing access to their subscribers through the TivoCast program, they do reserve the right to use advertising tags and long form opt-in commericials around the content, but it sounded like this hasn’t been very controversial for their existing content providers so far.
Monetizing video in a TiVo environment certainly has it’s challenges, but at some point TiVo hopes to create a system where microcasters will be able to charge subscription revenues and then split these fees with TiVo. While this is clearly a process that is still in development, as more compelling content becomes available we could see a world where a la carte television actually becomes a reality for TiVo subscribers.
While the video of Young’s presentation runs nearly an hour and it’s filled with side tangents between his love for the Ask A Ninja video blog to highly technical commentary, I would still strongly encourage readers, who are interested in TiVo, to watch the entire interview. Despite the presentation being a keynote address at a stuffy industry event, I found this to be one of the most fascinating TiVo presentations that I’ve seen in a very long time. Whether it was Young’s remarkable candor in admiting the challenges that Tivo faces, or his willingness to talk about issues that executives from the company have consistently dodged, his open dialouge was a breath of fresh air from the usual PR spin and it made me very excited about the upcoming changes that are in store for the company.
Fire Escape From My Heart
Nov 14
Fire Escape From My Heart Hosted on ZooomrNo sooner do I publish speculation on which middleware company Motorola was interested in acquiring, when they come out and announce that they’ve agreed to buyout Netopia for $208 million in cash. While Netopia wasn’t included on the list of companies that I profiled, the acquisition makes a ton of sense and will certainly bolster Motorola’s IPTV portfolio. By intergrating Netopia’s telco experience into Motorola’s set top boxes, it should allow the company to offer a much more compelling IPTV solution to their telephone partners.
Deep down inside, Netopia is really more of a DSL router provider then a pure middleware play, but last year the company unveiled their MiAVo triple-play gateway, which is a customized video, telephone and internet solution specifically designed for DSL providers to use.
In looking at the number, Netopia has earned approximately $105 million in revenue over the last 12 months. They did lose approximately $3.5 million during that same time, but recently, their earnings had been picking up and over the last six months, they did squeek out a modest profit. With a little over $30 million in assets on their balance sheet, Motorola may have gotten a very good deal by purchasing the company for slightly less then two times their trailing 12 month sales, particularly if the acquisition leads to more IPTV agreements.
Over the last few years, Wall St. has been less then kind to Netopia’s stock. After it hit a high of $18.68 at the beginning of 2004, the company’s stock went into freefall mode and hit a low of $2.90 later that year. After moving from the pink sheets to the over the counter bulletin boards, the company recently went prime time and was able to get listed on the Nasdaq. Since then they’ve seen a modest appreciation on their stock price, but with Netopia facing a less then certain market for their IPTV services and a volatile market capitalization, they may have welcomed the opportunity to be absorbed by a deep pocket partner.
The transaction is expected to close in early 2007 and with the acquisition, Motorola will convert Netopia’s Emeryville office into their voice and data customer premise headquarters. Netopia certainly fills in a piece of Motorola’s IPTV puzzle, but is not necessarily an ideal cable middleware solution for the company. While it’s entirely possible that Motorola may have more acquisitions lined up in the middleware space, at the very minimum the Netopia acquisition should help Motorola to reduce their dependence on Microsoft.
Things I Don’t Remember
Nov 14
According to a recent survey conducted by In-Stat, there are now over 1.2 billion households watching TV on a global basis. Of those households 349 million are cable customers with 106 million of those cable customers being in China and 69 million being in the US.
These numbers are a bit surprising to me. On one hand, I always knew that internationally, there was a much larger television base then in the US, but considering that the global population is around 6.5 billion people, even if you assume that 1.2 billion households represent three people each, it still means that half of the world doesn’t watch TV. I found it a little shocking to see how large of a percentage of the US population watches TV, in comparison to the larger global population.
At the same time, seeing the study also makes me realize how insignificant the US really is when it comes to the number of eyeballs that we are advertising to. Given how much advertisers are willing to pay for a show that might be lucky to pick up 10 million viewers, it makes me wonder if there is a premium on the advertisments shown on China’s TV programs. Given the larger population base, I would expect that marketers would be willing to pay quite a bit more, but given the currency differences, in reality this may not be the case.
Anyway you slice it though, 1.2 Billion is a pretty large number. With only 25% of the global population currently subscribing to cable, it’s still quite likely that we’ll see the cable and media companies continue to grow for at least another decade. While the US is a much more mature market for cable, there is still clearly quite a bit of growth left to take place outside of the US. As broadband internet changes the nature of film distribution, it will be interesting to see which players are the winners and losers from a global entertainment perspective.
I Want My Motorola TV Hosted on ZooomrAlmost two weeks before retailers prepare for the shopping frenzy that surrounds black Friday, Light Reading reports that “several industry sources” have indicated that Motorola may have started their holiday shopping early and are rumored to be in the market for an IPTV middleware acquisition.
Middleware is the software that allows set top boxes and cable operators to talk to each other. While I won’t pretend to understand the intricacies behind the technology, I do know that it typically involves coordinating DRM, electronic guide data and the software interface on a DVR, with the back end cable and IPTV systems that are required to bring television into your home. By bridging the gap between the home users and the cable operator, middleware providers allow cable and IPTV services to seemingless communicate with the signals that you receive to that hot new HDTV DVR that sits on top of your big screen TV.
While I’m not exactly sure why there have been so many underlying issues, middleware has turned out to be a pretty tricky business for most tech companies. Siemens has done the best job of providing reliable middleware and currently leads all middleware providers in the number of households served. Microsoft has made IPTV a big focus for their company and has done an excellent job of getting IPTV contracts, but several companies have already complained at their inability to deliver on their promises, due largely to middleware issues.
DirecTV hired NDS to build and support their set top boxes, but they’ve had one set back after another and while their product is now in the wild, some still consider it to be in beta testing, even though it’s been publically released.
Motorola and Cisco have turned to TV Guide to help provide the middleware for their cable rollouts, but the software is clunky at best and has been met with derision by those who’ve used it.
With Motorola currently partnering with Microsoft for their IPTV solutions, and TV Guide for their cable offerings, it would be a natural fit for them to acquire a middleware solution, that they could then bundle directly into their hardware. By supplying both the software and the hardware to the telcos, it would make for a much more compelling sales pitch to the telecoms, who have been locked in a death match with the cable companies that are now attacking their core telephone customer base. As Light Reading points out, in their article on the rumor, “middleware alone isn’t a cash cow, but has a lot to do with owning the service and selling other equipment as part of the larger IPTV investment.”
When I think of middleware solutions the first two public companies that jump to my mind are TiVo and OpenTV. While both could meet Motorola’s middleware needs, I don’t think that either would make for a likely acquisition by Motorola.
TiVo has set the gold standard for seemlessly integrating their software with cable and satellite video streams and they are currently in beta testing for a TiVo software download to Motorola boxes, but the company has been reluctant to sell out to other partners and they don’t have any experience building an IPTV solution for the phone companies. To top it all off, TiVo currently has three different poison pills in place, which would make a hostile takeover nearly impossible. The first prevents any company from buying more then 15% of TiVo in a hostile transaction, the second two are embedded in their contracts with Cox and Comcast which allow both cable partners to back out of their agreements, if TiVo changes hands.
OpenTV has been working on their own Motorola download solution and they recently struck a less then lucrative agreement to provide an OpenTV software download to Motorola Time Warner subscribers. While OpenTV would make a nice fit for Motorola, their capital structure would make them less then ideal as an acquisition canidate. Recently, the Kudelski group took a controlling stake in the company and while they could always flip the company to Motorola, the acquisition made more sense as an addition to their own middleware business then as a short term investment. Motorola could try a hostile takeover of OpenTV but it would be pointless because Kudelski owns preferred shares that gives them super voting powers over the company. The shares were originally issued to Liberty Media, in exchange for financing when the tech bubble burst, and it gives Kudelski a 74% voting stake and a 25% economic stake in the company despite their holding a minimal position in the common shares.
NDS Group could also sell out to Motorola, but with a current market cap of $2.75 billion and Rupert Murdoch’s interest in the company, this also seems like an unlikely target for Motorola to go after.
With several of the major public companies in this space, being a less then perfect acquisition target, I think it’s far more likely that Motorola would seek to buyout a private company, if the middleware rumor turns out to be true. Light Reading lists the Espial Group, Orca Interactive and Minerva Networks as all being possible canidates.
The Espial Group currently has a relationship with Motorola and has direct experience in the IPTV space. They also have business relationships with Tandberg, Thomson, Broadcom and IBM to name a few. The company focuses on enabling VOD, EPG data caching, & interactive television functionality for an open system that is then skinable depending on the telco provider being served. The company started in 1997 and is based in Ontario Canada.
Orca Interactive also has a relationship with Motorola. They count Humax, C-Cor, Nagravision, and NDS Group all as business partners. Recently they partnered with Ruckus to help create a wifi solution for their customers. The company trades on the London stock exchange, but they’ve been losing money since going public and their stock has taken a nose dive as a result.
Minerva Networks is located in Santa Clara CA and while they have experience deploying IPTV solutions it hasn’t been without hiccups. According to Hancock Telecom, a small IPTV customer, the Minerva software has had problems with freezing up and “subtle incompatibilities between the middleware and set-tops.” Minerva has primarily been backed by venture capital firms, including Cypress Ventures and US Ventures. Because of the VC backing, Minerva would likely be more open to selling to Motorola, but it would need to be at the right price.
Whether or not Motorola’s middleware ambitions are merely industry chatter, or a more legitimate direction they are taking, in my mind, it seems like a logical step for the company to take. Microsoft has gotten a good head start on the market, but the more that Motorola ties themselves to Microsoft, the greater the disadvantage they are at when it comes to offering a complete and compelling solution to their IPTV partners.
With as much difficulty as Microsoft and other middleware providers have had in deploying an IPTV solution, Motorola could fill an important void in the market. If they can produce a compelling end to end product it would make them all that much more appealing for the telecoms that are so desperate to get a piece of the TV market.
While the companies mentioned would all make interesting acquisition canidates for Motorola, it is worth noting that they are not the only options for Motorola. Recently ABI Research listed the following middleware providers as the top ten middleware providers in this space.
Siemens
Microsoft
Alcatel
Orca Interactive
Tandberg Television
Minerva Networks
Infogate
Kasenna
Alticast
NDS Group
While some of these companies would obviously be, too large of a fish for Motorola to swallow, there are several very well run companies on and off of this list. If Motorola moves forward with a middleware acquisition, it would be interesting to see if Cisco would follow suit or continue in their middleware agnotic approach to the market. It would also be interesting to see if a Motorola acquisition would lead to consolidation in a very crowed industry. Only time will tell how things unfold, but I sense that it’s a very crucial time in the middleware industry and with as many middleware providers fighting for the telco’s attention, Motorola likely faces a sellers market when it comes to this technology.
Over the last few months I’ve been playing around with the music site Sonific. The site has signed agreements with over 40,000 artists that allow people to listen and to share their catalog with their readers. Unlike the studio fat cats, Sonific understands that by allowing people to share quality music, it directly benefits the artists involved by selling more mp3s, concert tickets and increasing their brand band exposure.
As a fan of anyone who is willing to think outside the box, I’ve been impressed with Sonific’s flexibility and the catalog that they offer to their users. I do however, have a few suggestions that I think would improve the service.
First off, I’ve found that embeding their songs can be a bit obnoxious. In order to embed a song into a blog post, I must first publish the post and then give the specific location where the song will be published. This contrasts with the more blog friendly approach that YouTube takes, where they give you the embeded code up front, without requiring that you register or specify the destination. This is a small thing, but it’s still annoying to have to identify where I’m going to put a song before I actually put the song into a post.
My second complaint though is that the licensing of the songs doesn’t go far enough. It’s great that I can go to the site and listen to any of the songs on demand and that I can embed an original song into my website, but I still don’t have the authorization to use any of the songs in a podcast. This is something that I’ve wanted to do for a long time, but without legal access to the music, it means that any podcast I do would just be boring chat instead of good independent rockin music. It would be great if Sonific could clear the digital music rights for me to incorporate their music into any podcast that I wanted to do.
While I understand that Sonific can’t just give me carte blanche access to incorporate their songs into any webcast, I think that they could create a program allowing podcasters to upload their programs directly to Sonific’s website and then use the songs in their podcast from there. These could either be clips of the songs that lead into interviews and show promos or they could be the whole song with a skip forward button that would allow listeners to skip past any songs they didn’t particularly care for.
If I had the ability to upload a podcast to Sonific, it would not only add to their content by creating a platform for independent podcasters to build on, but it would also give greater exposure to the artists who show up in the shows because it would mean that each song featured would likely get an endorsement, in addition to internet radio exposure.
By extending their digital agreements beyond just a single song and into a set of songs, Sonific could open up “traditional radio” programs to anyone who has the desire to sort through their 40,000 artist list and highlight songs that they enjoy. I’m not sure how they’d embrace downloading of the podcasts, but maybe they could create a program where users could pay a small fee if they wanted to download vs. stream a show.
While this wouldn’t allow me to add some of the more mainstream songs into my radio show, it would still give me a pretty big resource to pull music from and would make Davis Freeberg’s Midnight Hour one step closer to becoming a reality.
There has been a pretty negative reaction to Microsoft’s announcement that they will start paying a $1 sin tax to Universal Music Group on all Zune sales, but super blogger Om Malik has taken the rhetoric one step further and has declared a one week blogcott on all UMG purchases. His boycott stems from seeing yet another comment by Universal where they accuse their customers of being theives.
I’m all for supporting GigaOm on this one. Universal’s tax on the Zune is going to be passed directly onto consumers and as someone who doesn’t steal music, it’s hardly fair for me to pay this tax just because Microsoft wants to offer the ability to play mp3s that I’ve legitimately ripped from my own collection. I’ve paid for my music once already and if Universal wants me to pay for my music a second time, then they can kick rocks for all I care.
Universal can spin this anyway they want, but Microsoft did the tech community a major disservice by agreeing to pay this tax and Universal’s continued rhetoric on the issue show just how wide the rift between the media and their customers really is.
If Universal wants to call me a thief that’s their right, but for the next week I’m going to support Om by showing Universal what it’s like when the “theives” stop buying their music and I would encourage my readers to join in on this boycott as well.
I’m also going to take this one step further by not only boycotting any music purchases, but I will also refuse to watch any of their films or TV shows during this period.
This may mean that I’ll have to go without seeing Heroes or checking out the new movie, Let’s Go To Prison, but I’d rather miss out on this entertainment, then to be the biggest loser and support a company that would rather call their customers theives then try to adapt to the new digital landscape.
The internet has changed the music and film industry forever. The studios may not be ready to change, but instead of dragging their feet on the digital revolution, they should be working with technology to enhance the experience for everyone involved. Consumers have more options now and if they won’t fill those options we’ll find someone who will. Universal Music Group may own a third of the music out there, but I’d much rather support an independent label where the artist makes more selling a $10 CD then to spend my hard earned money on a corporate machine that sucks the soul out of musicians and then accuses their customers of being the ones that are stealing.