Big Media Seek 21st Century Business Models

Media moguls at this week's Sun Valley conference have spent as much time discussing how to reconfigure business models disrupted by the Web as they have worrying about the weak economy.

With difficult credit markets and an unclear future, talk of dealmaking has been at a minimum this year. Yet there has never been a more important time for media conglomerates and their financiers to act and adapt to the Internet age. The mood at the conference was described as "somber" and "very bearish" by executives. While the recession was a key reason, the other was the uncertainty over how future profits can be made from distributing news and entertainment online and across devices like smartphones.

"We're not using long-form content on the Web because it's not clear to us that's the way people want to consume content, said David Zaslav, chief executive of Discovery Communications Inc, which owns the Discovery Channel. "But also the business model isn't there yet, so we're taking it slow," he said in an interview on the sidelines of the event organized by boutique investment bank Allen & Co.

In the late-night bar at the Sun Valley Lodge, from which the press was banned, most of the discussions were around the issue of free versus paid content, said one senior executive who asked not to be named as his conversations with other executives were private. The challenge is how media companies can keep alive the lucrative cable business model at a time when consumers are increasingly used to getting content for free online. Cable operators pay affiliate fees to cable networks for their programming, and both share advertising revenue.

Plans such as Time Warner Inc's "TV Everywhere" and Comcast Corp's "On Demand Online" seek to preserve that business model by offering cable shows on the Web to authenticated, paying cable TV subscribers.

"Authentication is an interesting intermediate step and is something that we're looking at," said Zaslav. The conversations about TV Everywhere are heating up. Google Inc CEO Eric Schmidt confirmed to reporters that he has had early talks with Time Warner about the possibility of getting paid cable shows up on YouTube. But he did not elaborate.

TV VS PRINT AND MUSIC

Television studio executives do not want to repeat the experience of their colleagues in the hard-hit newspaper and music businesses, and are worried that consumers will expect TV shows, movies and all professional programing to be free. Hulu.com, owned by News Corp, NBC Universal and Walt Disney Co, offers broadcast TV shows and movies for free on the Web, but there has been talk at Sun Valley among executives of introducing a paid content model.

Wired editor Chris Anderson argues in his book 'Free' that many companies, with media at the forefront, could build bigger and better businesses around the notion of giving away their content for free. Many executives in Sun Valley would not agree. 'Free' -- supported by advertising -- is not a new concept. After all, broadcast TV is free but its dominance has been eroded by cable channels and its future as an advertising outlet is bleak.

Newspapers owned by News Corp and others are fervently examining news-bundling pricing models to seek ways to get users to pay to read news online. One consideration may be to bundle different properties along vertical lines, such as business and sports news, for a monthly fee.

Far from free, what media moguls would want to preserve on the Web and mobile platforms is the dual-revenue stream from subscriptions and advertising. "The big thing for these guys is how do you come up with that dual revenue streams online," said Jeremy Alliare, chief executive of Brightcove, an online video company that partners with many major media companies. "Cable TV is a part of that but I think it's a broader industry discussion."

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Source: http://tech.yahoo.com/news/nm/20090711/wr_nm/us_sunvalley_media_5

Tags: Hulu, News Corp, NBC Universal, Walt Disney Co, YouTube, Brightcove, Cable TV, Comcast, Chris Anderson, Wired, Global Blog Network, Paid content Model, Media moguls, Sun Valley conference,

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Internet Service Providers Not Keeping Up with User Trends

There's a revolution happening on the Internet — though broadband providers have not seemed to notice.

Thanks to new gadgets, programs and Web services, consumers are sending, sharing and swapping more data than ever over the global network. Yet many are stuck with Internet connections that give them upload speeds much slower than download speeds. What that means is that it takes a lot longer to send a movie or picture out to the Internet than it takes to download the same file. Uploading a video, a roll of pictures or a backup of key files on your hard drive can take hours, or even days. I ran into this issue earlier this month when I sent some pictures to Kodak to get them printed for my dad for Father's Day. I uploaded 170 pictures, which was about 800 megabytes of data.

Admittedly, I have a relatively poky connection: EarthLink says my maximum download speed is 3 megabits per second, but I rarely get more than 2.2 megabits per second. Even at that rate, it would have taken me less than an hour to download that much data. But because I was uploading — at a mere 384 kilobits per second maximum throughput — it took me more than three hours.

I'm not the only one affected. Internet users as a whole are sending increasing amounts of data out on to the Net. They are blogging, posting messages on Twitter, using Loopt to tell others where they are hanging out, or writing messages on friend's profile pages on Facebook. They're sharing videos and pictures on sites such as Flickr, YouTube or Facebook. And they're playing multiplayer games over the Internet such as "World of Warcraft'' or via services such as Xbox Live.

Those on the cutting edge are doing even more. They're swapping videos or software — sometimes illicitly — through services such as BitTorrent. They're using gadgets such as the SlingPlayer, programs such as Simplify Media or services such as Apple's Mobile Me to remotely access videos, music or files from their home PCs or other devices. And they're backing up their home PCs to online storage sites.

And their ranks are growing. YouTube users upload 20 hours of video to the site every minute. That's up from six hours of video every minute just two years ago. Meanwhile, Facebook users upload 850 million photos and 10 million videos to its site every month.

But broadband companies seem oblivious to this trend. If you look at the plans offered by the Bay Area's two main providers, Comcast and AT&T, it's all but impossible to find one in which the upload speed comes anywhere close to the download speed. To get an upload speed that's faster than a slow DSL download rate, you have to subscribe to one of the pricier plans, like Comcast's Extreme 50, which gives you a 10 megabit per second upload connect — at a cost of $100 a month.

Comcast and AT&T officials say they are watching consumer Internet usage trends. They note that as their companies have ramped up download speeds, they've tended to increase upload speeds as well and will continue to do so. The download and upload speeds they offer are simply a response to market demand, they say, claiming that the vast majority of their customers still download far more data than they upload.

"We're designing our products based on how we see consumers using them," John Britton, an AT&T spokesman, told me. Over the course of a month, a week or even a day, it's undoubtedly true that consumers tend to download more data than they upload. But for a growing number of Internet users, there are times when they want to upload data.

When I was uploading my pictures, I was sending far more data than I was receiving. During that time, I couldn't have cared less how fast my download speed was. Indeed, I would have loved to have been able to allocate my download bandwidth to upload my pictures.

But there's no way for me to do that. In terms of Internet access providers, the Bay Area essentially has a duopoly. There are numerous small players such as EarthLink, but Comcast and AT&T dominate — and duopolies tend to not have a good read on real market demand. People often buy one of their products because they don't have any other choices — not because they meet their needs.

In other words, if the market were more competitive, a company might be able to build a successful business by catering to people who want faster upload speeds. Just because consumers use their connections to download more data than they upload isn't proof that they don't want to upload more. The slow speeds could well discourage folks from doing more uploading. And they may well find a use for faster upload speeds — if they had them.

I'd love to be able to back up the videos, songs and documents on my computer to a server on the Internet. But with my slow upload connection, that's not really an option because it would take days of uninterrupted uploading to back up any significant portion of my hard drive. Here's hoping broadband providers join the revolution and make faster upload speeds an option soon.

Source: http://www.mercurynews.com/business/ci_12689652?source=email

Tags: AT&T, EarthLink, Comcast, ISP’s, uploading rates, downloading rates, Internet infrastructure, Global IT and Business News, YouTube, Loopt, Twitter, Facebook, Flickr, World of warcraft, Xbox live, BitTorrent. SlingPlayer, Simplify Media, Apple's Mobile Me,

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