Monday, March 31, 2008

Qloud's Sunny Day

Rumors today that LA-based Buzznet has bought Qloud for "slightly more than Qloud's last round valuation". I don't remember what Qloud's last round valuation was, I will have to go see if I can find it mentioned online somewhere.

Congrats to Mike & Toby, I hope this is a good thing for them and their company. Selfishly, I also hope they get to keep their office in DC as I'm a big fan of the growing digital media startup landscape in this area.

I keep going back to my predictions a couple of months ago, and I'm looking pretty good so far (one quarter into the year)...

Friday, March 28, 2008

Warner Music's Take on Subscription Music

Source: WikipediaNews yesterday that Warner Music is pushing forward with their own take on subscription music... one that bundles a monthly fee (around $5/month) into your ISP bill and then lets you download any/all things you want (presumably most happening via P2P networks) with immunity from litigation.

As I have said numerous times, I am a big fan of the value proposition offered by subscription services, but this opens stirs up far more questions for me than answers based on my (assumed) use case below...

  • Comcast pays some collection agency a couple/few bucks for on every ISP customer they have
  • Comcast either then charges me an extra couple of bucks on my $50/month ISP bill or throws a few more ads at me to cover their incremental cost
  • I (and they) now have "immunity" for anything I download over their network - from MP3 search, P2P, etc.

If that is correct, then that sparks a bunch of related questions...

  1. Does it matter how many people are on my network? Theoretically, my ISP is monetizing each user but in reality they would be monetizing the household, no? What if I open up my wireless network, and invite my neighbors that don't have broadband to jump on? What if I open a coffee shop and let hundreds of users a day get on free of charge? What if I resold access, is it then different?
  2. How does my ISP cover their incremental costs via advertising? Many people don't ever visit their ISP's webpages (myself included). Do they they have to require their users to use/frequent their portals/sites? Do they require some application (like some of the old free ISP models) that throws pop-ups at me?
  3. What about wireless? Is my cellphone company considered an ISP and subject to the same fees? If so, then isn't the consumer getting charged twice for the same rights (e.g. once by Comcast and once by AT&T)?
  4. This is repeatedly denied as being "a tax", but to make this work it would have to be a *required* fee to every ISP, no? Otherwise, there is the danger of people switching to the *cheaper* ISPs that don't have cover this cost?
  5. If the ISPs need to monetize these music consumption experiences (to cover their incremental costs of contributing to the pool) that seems to dictate that they (or at least some of them) can no longer just be a dumb pipe to 3rd party music sites.
  6. Does this force Comcast and Verizon Fios (and others) to invest in building out there own music destinations to compete with Yahoo Music, AOL Music and MTV?
  7. Does this trigger an avalanche of music service acquistions by the ISPs? Does Comcast buy Napster? Does Verizon buy imeem? Does Cox Communications buy Seeqpod? If they don't "own" the music experiences of their customers then how do they cover their additional licensing costs? If the ISPs can't cover these costs (or generate additional revenue around music) then what's in it for them? Just immunity from lawsuits themselves?
Public perception will be one of the biggest hurdles (and in my opinion, most important) to overcome in this new plan. The labels have done a fabulous job painting themselves as the bad guys over the past few years and most consumers don't really care whether or not they survive. While there are lots of reasons why the blanket licensing plan has merit, it will be all for naught if the consumers aren't convinced it's in their best interest.

I suggest that Warner Music gets a great PR firm on retainer quick before this rhetoric gets loud enough to smother the plan.

The next *big* question is then... how does this ISP-fee plan work in conjunction with the other approaches that Nokia is pushing with their "comes with music" plan and rumored Apple subscription plan that would put the tax on the devices themselves. How many times do I need to pay for my music... once with my phone + once with my iPod + monthly with my ISP + monthly with my cellphone???!

Wednesday, March 26, 2008

Sony BMG to Launch Own Subscription Service (Again)

News is surfacing that Sony BMG is going to try (yet again) to a launch their own subscription music service. You know the saying about the "definition of insanity", right?

I don't get it at all. Where I used to think that Sony must have some well-thought out plan for their future (that I just didn't have visibility into), I now see them as just completely desperate, completely dis-"Connect"-ed, delusional label that has somehow convinced themselves that consumers know (and care) what label an artist is on.

Would you subscribe to a cable TV tier where you would only get access to shows produced by Ubu Productions (sit, ubu, sit.... good dog). Arguably, Ubu has stronger brand equity than Sony BMG and I still can't name what shows they produce.

It seems to me that these guys are just floating any idea to try and and stem the possibility of Apple beating to them to the punch (remember my 2008 predictions?) and taking what little semblance of power the labels once had in the music industry away from them.

Tuesday, March 25, 2008

Keep Your Eyes on the Prize

Great video highlighting the massive gap between *real* consumers and the rest of us....

Thursday, March 13, 2008

AOL Buys Bebo Just to Resell It?

News this morning that AOL is buying social network Bebo for $850 million. This comes one day after the news that Time Warner has finally gone on record that they want to dump AOL. What the hell is going on? Are they acting as middleman here? Buy Bebo for $850 mil, do some simple/basic integration with AIM and then claim it is now worth $1.5 billion in a couple of month? Perhaps Yahoo is interested in Bebo too, and the quickest way for them to get there is to have AOL as their broker? Got me... it all seems a bit odd to me.

Oh yeah, this all comes a couple of days after AOL's "Platform A" division (supposedly the company's saving grace) canned their head honcho... and then today mentioned they are going to cut half their Ad Sales force.

I hope there is some master plan behind all of this, but I have to be honest... I don't hold out hope. At this point I'm going to sit on my TWX stock until AOL is dealt away... I expect a pretty good bounce in price as soon as that happens. Considering the stock price is getting sucked down the toilet lately, that can't happen soon enough in my opinion.

Oh yeah, I consider this the death knell for Bebo. They are going to have to now go through what will likely be not one, but two, excruciating integrations. One with AOL (who have a bad record at this) and another with whoever (if anyone) buys AOL. Facebook and MySpace send your thank you cards to Dulles c/o of Ron Grant & Randy Falco.