MediaFile

Content everywhere? More like content nowhere

Will Big Media and Big Tech companies ever stop punishing their biggest fans?

Like many people, I woke up yesterday and reached for my iPad for my morning hit of news, entertainment and information, so I could start my day. (And like many, I’m embarrassed to admit it.) Padding to the front door to get a newspaper still sounds more respectable, but my iPad gives me a far more current, rich and satisfying media experience than a still-warm printed Times could ever produce.

Except, lately, it doesn’t. Yesterday morning, I saw the exciting news that Bill Simmons, ESPN’s most popular, profane and controversial writer, had secured an interview with President Obama. Simmons published his interview in podcast, text and video form on Grantland, a longform sports journalism website he founded last year under the ESPN umbrella. I clicked over to the story from my Twitter feed and saw three YouTube excerpts of Simmons with Obama. And that’s all I saw. When I hit play on the videos, I discovered ESPN had set them to be “unavailable” on mobile devices.

Moving on, I tried to read a New York Post headline that also found its way into my Twitter feed. But when I tapped in, the Post webpage that loaded was not the story I wanted to read. Instead it was a notice, which I took as an admonition, that to read New York Post content on an iPad, I would have to download the app, which retails for $1.99.

I want to make it clear that I’m not against paying for content. But what I’ve just described aren’t paywalls, where publications warn users that they won’t be able to consume content for free.

The situations I’m describing are blanket denials of content because of a choice I made about which device to use. With these tactics, media companies aren’t creating content paywalls, they’re creating content ghettos. Big Media, set my content free! Stop messing with the user experience to deny readers their content simply because you can detect what platform they’re on. And stop punishing users who are investing in the latest devices to consume your output. In other words, grant my hyper-advanced iOS device or my friend’s fancy new Android phone just as much access to the Web as my mother’s four-year-old Windows XP PC. Which one of us do you think wants to watch Simmons talk crossover dribbles with the Commander-in-Chief?

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Tech wrap: Earnings hit as Apple reigns

Quarterly earnings suffered at major technology and telecoms companies in part because of demand for gadgets made by Apple, one day after core suppliers to Apple savored strong earnings results posted by the iPhone and iPad maker on Tuesday.

AT&T posted a $6.7 billion quarterly loss as it was weighed down by a hefty break-up fee for its failed T-Mobile USA merger and other big charges on top of costly subsidies for smartphones such as Apple’s iPhone. While the wireless provider beat analysts’ expectations for subscriber additions, the growth came at a massive cost as its wireless service margins plummeted. On top of the $4 billion break-up package charge, AT&T also took a big impairment charge for its telephone directory business, which it said it was considering selling.

Nokia reported a 73 percent fall in fourth-quarter earnings as sales of its new Windows Phones failed to dent the dominance of Apple’s iPhone or compensate for diving sales of its own old smartphones. Apple reported earlier this week sales of 37 million iPhones for the December quarter. Nokia has sold over 1 million Windows “Lumia” smartphones since its launch in mid-November. Nokia said it expected its phone business’ underlying earnings to be around breakeven in the first quarter, well below analysts’ forecasts, with sales falling more than usual in the seasonally weaker quarter.

Motorola Mobility posted a quarterly loss after it warned earlier this month that it was having a tough time competing in the smartphone market amid intense competition from rivals such as the Apple iPhone. The company, which is seeking approval to be bought by Google, reported a net loss of $80 million or 27 cents per share compared with a profit of $80 million or 27 cents per share in the same quarter the year before. Revenue rose slightly to $3.436 billion from $3.425 billion in the year ago quarter.

Nintendo posted a sharp drop in quarterly profit and forecast a bigger-than-expected full-year loss, as it battles a strong yen and its games devices lose ground to gadgets such as Apple’s iPhone. Nintendo now expects an annual operating loss of 45 billion yen ($575 million), dwarfing expectations of a 4.2 billion yen loss, based on the average of 21 analyst forecasts.

“To say that (the days of consoles) are over is likely an overstatement, but social network and Internet delivered games are growing and structurally changing the future of the industry, which is a strong wind against Nintendo,” said Shigeo Sugawara, at Sompo Japan Nipponkoa Asset Management.

Lawmakers on the House Energy and Commerce Committee asked Google to provide answers about recent changes to the search engine’s privacy policy. On Tuesday, Google announced that it was unifying its privacy policy across 60 of its Web services, which allows the company to share data between any of those services. In a letter to Google Chief Executive Larry Page, the lawmakers said the company’s announcement “raises questions about whether consumers can opt-out of the new data sharing system either globally or on a product-by-product basis.”

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Tech wrap: Kodak files for bankruptcy protection

Eastman Kodak, the photography icon that invented the hand-held camera, filed for bankruptcy protection and planned to shrink significantly after a prolonged plunge for one of America’s best-known companies. The Chapter 11 filing may give Kodak the ability to find buyers for some of its 1,100 digital patents, a major portion of its value. According to papers filed with the U.S. bankruptcy court in Manhattan, Kodak had about $5.1 billion of assets and $6.75 billion of liabilities at the end of September. Kodak now employs 17,000 people, down from 63,900 just nine years ago.

Kodak’s long decline can be traced back to one source: the former king of photography’s failure to reinvent itself in the digital age, writes Ernest Scheyder. Kodak’s film dominated the industry but the company failed to adopt modern technologies quickly enough, such as the digital camera — ironically, a product it invented. ”Kodak was very Rochester-centric and never really developed a presence in centers of the world that were developing new technologies,” said Rosabeth Kanter, a professor at Harvard Business School. “It’s like they’re living in a museum.”

Apple unveiled a new digital textbook service called iBooks 2, aiming to revitalize the U.S. education market and quicken the adoption of its market-leading iPad in that sector. The move pits Apple against Amazon.com and other content and device makers that have made inroads into the estimated $8 billion market with their electronic textbook offerings. Apple has been working on digital textbooks with publishers Pearson, McGraw-Hill and Houghton Mifflin Harcourt, a trio responsible for 90 percent of textbooks sold in the United States.

Google’s net revenue jumped more than 27 percent in the fourth quarter but fell short of Wall Street targets, sending shares down sharply in after hours trading. The No.1 Internet search engine said that it earned $2.71 billion, or $8.22 per share in the fourth quarter, compared to $2.54 billion, or $7.81 per share in the year-ago period.

Microsoft said fiscal second-quarter profit fell slightly, as lower computer sales hurt its core Windows business. The company reported net profit of $6.624 billion, or 78 cents per share, compared with $6.634 billion, or 77 cents per share, in the year-ago quarter.

Some members of Congress switched sides to oppose anti-piracy legislation as protests blanketed the Internet on Wednesday, turning Wikipedia dark and putting black slashes on Google and other sites as if they had been censored. Several sponsors of the legislation, including Senators Roy Blunt, Chuck Grassley, Orrin Hatch and John Boozman and Marco Rubio, said they were withdrawing their support. Some blamed Senate Majority Leader Harry Reid for rushing the Senate version of the bill.

Rovio, the Finnish creator of the global smash-hit Angry Birds video game will not join the stock market this year but still aims to eventually seek a listing, its marketing chief said. ”We are not in a rush. This year is way too early for an IPO, there are too many open things, and we are in a very early stage of the Angry Birds lifecycle,” marketing chief Peter Vesterbacka told Reuters.

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Research in (downward-spiraling) Motion

By Kevin Kelleher The opinions expressed are his own.

Failure is a funny thing in the tech world. An entrepreneur can get fired from a company he founded and his peers will watch to see what he does with the lesson. A young company can burn its cash like a Viking setting his ship on fire, but be remembered wistfully once it’s bankrupt. For startups, failure sometimes seems like a rite of passage – the painful second act of a three-act story with a happy ending.

But it’s different when a big company stumbles, losing its place at the top of the heap. Nobody cheers you on. You just seem like a stock character in someone else’s legend – the hoary old giant descending so that another can ascend. For big tech companies, failure is the grim final act that can stretch on for years and years. Until no one wants to watch anymore.

In the annals of tech brands that have risen and fallen – DEC and Wang in early computing, Sony in consumer electronics, AOL and Yahoo in the Internet – the declines have taken several years, at least. But few tech giants have fallen as quickly, or as dramatically, as Research in Motion.

By some measures, Research in Motion still appears healthy. Its Blackberry smartphones have 70 million subscribers around the world, and it’s far from losing money – analysts expect the company to post revenue of $19 billion and a per-share profit of $4.13 this year. But they also expect profit to fall 50% this year (even after 2000 layoffs since July) and another 30% next year. The key reason: Blackberries are quickly losing market share, which fell to 16.6% from 19.7% between August and November.

The severity of the decline is clearer in RIM’s stock, which ended 2011 near a seven-year low, having fallen more than 90% in the last two and a half years. In 2011 alone, RIM has lost $27 billion in market value – more than Nokia is worth and more than twice as much as Google is paying for Motorola Mobility.

And the highs from which RIM has fallen were high indeed. In 2009, Fortune magazine reckoned it was the fastest growing company in its survey of global companies. Back then, RIM commanded more than half of the U.S. market for smartphones. That was two years after the release of the iPhone, the Apple smartphone that would – along with the Android phones that followed – eventually eat into RIM’s dominating market share.

Failure is a funny thing in the tech world. For startups, failure sometimes seems like a rite of passage - the painful second act of a three-act story with a happy ending. But it's different when a big company stumbles. Join Discussion

Verizon vs Apple: A royal battle

By Aaron Pressman The opinions expressed are his own.

Last week’s tiff over the Google Wallet app at Verizon Wireless may seem like just another minor dust-up among hardcore phone geeks. But the debate is an opening skirmish in a potentially huge battle, particularly if, as expected, a new iPhone model arrives that runs on Verizon’s high-speed “LTE” Internet service.

At stake is whether seemingly pro-consumer “open platform” rules adopted by the Federal Communications Commission to promote choice and innovation on Verizon’s LTE network have any meaning at all.

The rules were supposed to let customers, not carriers, decide which devices and applications they could use on the LTE network. That would seemingly mean that customers who wanted to use the Google Wallet payment app on the Verizon network via the upcoming Galaxy Nexus phone would be allowed to do so.

After all, the FCC said carriers could not “block, degrade or interfere with the ability of end users to download and utilize applications of their choosing … subject to reasonable network management.” The Wallet app uses a special “near field communication” chip built into the Nexus phone which is designed to talk with the cash register at a local coffee shop, not bring down Verizon’s cellular network.

But, not so fast.

Verizon, which is backing a competing mobile payment service known as Isis, asked Google not to include the app for use on the Nexus phone. Defending the move, Verizon didn’t address the open platform rules directly. Instead, the carrier said the app “needs to be integrated into a new, secure and proprietary hardware element in our phones,” adding that “commercial discussions” with Google on the issue were “continuing.”

Last week’s tiff over the Google Wallet app at Verizon Wireless may seem like just another minor dust-up among hardcore phone geeks. But the debate is an opening skirmish in a potentially huge battle, particularly if, as expected, a new iPhone model arrives that runs on Verizon’s high-speed “LTE” Internet service. Join Discussion

Tech wrap: Twitter sings about new site

Twitter revamped its website to make the microblogging service easier to use and to help companies better showcase their brands. The new version of Twitter features a redesigned look that the company hopes will make it easier to find interesting content on the service, as well as technological improvements that it said will speed up the service. It also features a revamped profile page, in which a company can highlight specific feature, such as videos or photos. Previously, the profile pages displayed a chronological list of the company’s most recent Tweets.

Apple’s next iPad will be available in February, Business Insider’s Jay Yarrow writes, citing Citi analyst Richard Gardner. The new iPad will feature a screen with twice the resolution of the current model, Yarrow adds.

Verizon Wireless blamed technical problems for an outage on its recently launched high-speed, 4G network, which prevented some U.S. customers from accessing the Internet for about 24 hours. It is at least the second outage since Verizon launched its 4G data service. Trade publication FierceWireless said the company had a major service disruption in April.

Zynga CEO Mark Pincus said the social networking games company can double the number of its paying players, but he and other executives sidestepped questions about player retention and churn rates at an IPO roadshow luncheon in Boston. At the end of September, Zynga, known for popular games such as FarmVille and Mafia Wars, had about 6.7 million unique players. Paying players account for less than 3 percent of Zynga’s total number of players.

Google does not work with nor does it support Carrier IQ, the software maker which has been accused of violating millions of mobile phone users’ privacy rights, according to Executive Chairman Eric Schmidt. “Android is an open platform, so it’s possible for people to build software that’s actually not very good for you, and this appears to be one,” Schmidt said.

Nintendo denied a report that Shigeru Miyamoto, widely seen as the world’s most influential games designer, would step down from his current position and take a smaller role in the company. Wired magazine had quoted the 59-year-old creator of popular games franchises including Super Mario Bros and The Legend of Zelda as saying in an interview that he wanted to retire and work on smaller projects, passing the torch to younger designers.

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Tech wrap: AT&T, Sprint admit using monitoring software

Phone makers RIM and Nokia denied installing on their mobile devices an app which can monitor what users are doing without their knowledge or consent while carriers AT&T and Sprint admitted to using it. The companies responded after a security researcher demonstrated in online videos how the “Carrier IQ” software worked on Google’s Android operating system and said that phones running RIM’s BlackBerry platform and Nokia’s Symbian OS also had the software installed. AT&T and Sprint said they use “Carrier IQ” to monitor network quality.

Blackstone Group and Bain Capital are preparing a bid for all of Yahoo with Asian partners in a deal that could value the Internet company at about $25 billion, a source familiar with the matter said. The potential bid by the consortium, which would include China’s Alibaba and Japan’s Softbank, has not yet been finalized, the source and two other people familiar with the matter said. E-commerce giant Alibaba, whose primary interest is in buying back a 40 percent stake owned by Yahoo, is keeping its options open and said it has not decided whether to participate in a bid for all of Yahoo.

Apple’s iPhone edged past major news events, celebrities and pop stars as the top searched term on the Web in 2011, according to Yahoo. The media company said the smartphone proved more popular than reality television celebrity Kim Kardashian, pop star Katy Perry and singer and actress Jennifer Lopez, who placed in the top five. Casey Anthony, the woman acquitted of the murder of her young daughter after a highly publicized trial, was No. 2.

Best Buy is recalling about 32,000 Rocketfish battery cases for iPhones because of a fire hazard, the Consumer Product Safety Commission and Health Canada said. The Richfield, Minnesota, company and the CPSC have received about 14 reports of the Rocketfish Model RF-KL12 Mobile Battery Case overheating while charging in the United States, the CPSC said.

The European Commission joined forces with major technology firms including Apple, Facebook and Google to improve the protection of children online. The coalition, which includes 28 companies, will develop an age-based online ratings system and aims to strengthen privacy settings. It also plans by the end of next year to make it easier to report inappropriate content. Other measures include improving parental controls and enhancing cooperation among law enforcement and hotline authorities to remove online material showing sexual abuse.

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Windows L8?

Microsoft’s next operating system — provisionally known as Windows 8 — may not hit the shelves until early 2013, one respected company-watcher thinks, giving Apple, Google and Amazon more time to fine-tune their tablet offerings.

That’s later than most people expect for the new OS, which represents Microsoft’s first real foray into the touch-friendly, tablet-optimized world. The feeling is that Microsoft really needs to make its move before Apple’s iPad and tablets running Google’s Android march off with the whole market.

“I think it’s about a year away,” said Michael Cherry at independent research firm Directions on Microsoft, asked when Windows 8 code would be completed.

Then you have to factor in the delay between releasing the code to PC manufacturers to install on new machines — known as RTM — and general availability, said Cherry, a former Windows program manager.

“I believe there will be a RTM somewhere in the last quarter of 2012. Traditionally there’s been a 90-day gap between RTM and general availability,” he said. “To me, that means machine availability in 2013.”

In other words, don’t expect to get a Windows 8 tablet in your gift pile this Christmas or next.

Microsoft likes to keep a gap between releasing the code and allowing machines to go on sale as it gives all PC makers equal time to install the system and get machines on sale on the same day, for extra marketing buzz.

Microsoft's next operating system -- provisionally known as Windows 8 -- may not be ready for release until early 2013, one respected company-watcher thinks. Join Discussion

Tech wrap: Adobe scraps Flash for mobile browsers

Score a point for Apple. Software maker Adobe scrapped its Flash Player for mobile devices after a mutli-year battle with Apple over the merits of the technology, which is used to view videos and play games on the Web. Take a look back at the legendary tech spat in this blow-by-blow timeline that stretches back to January 2007 when Apple launched its iPhone with a browser that was not compatible with Adobe’s Flash player. The company said in a blog post it plans to focus its future mobile browsing efforts on HTML5, a competing technology that is now universally supported on all major mobile devices.

Online business reviews site Yelp has hired bankers to lead an intitial public offering that could value the company at up to $2 billion, several people familiar with the matter told DealBook’s Evelyn M. Rusli. Goldman Sachs and Citigroup will participate in the offering, which is expected in the first quarter of next year, one of the sources said.

Cisco Systems singaled a turnaround on Wednesday when it raised its forecast revenue and earnings above Wall Street expectations as demand from government and enterprises for its network equipment remained resilient despite global economic troubles. Earlier, the company reported quarterly earnings per share that beat estimates, signaling that efforts to revive growth are beginning to pay off.

Delays were being reported by some BlackBerry customers on Wednesday, but Research in Motion said it’s not experiencing problems on the scale of an outage last month that knocked out service for four days. “There is no system-wide outage,” a company spokesman told Reuters, adding that the delays being reported are limited to Europe, the Middle East, India and Africa.

Google’s Chairman Eric Schmidt reassured its Android partners embroiled in lawsuits that it will continue to support them in their disputes with other firms. That support takes the form of information sharing, industry expertise and access to Google’s patents for licensing and legal purposes, Schmidt said during a visit to Tapei on Wednesday.

Reuters tech correspondent Bill Rigby strolls the streets in Seattle’s South Lake Union district, an emerging technology hub that calls to mind Silicon Valley to the south. In addition to long-time tenant Amazon.com, the neighbourhood has seen a rush of newercomers setting up shop, including cloud computing firm Salesforce.com and online gaming company Zynga. Facebook also recently set up its new Seattle offices nearby.

(This post’s original headline was changed to make it clearer)

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Microsoft: mobile getting better, no numbers yet

Microsoft  made a big deal of the launch of three U.S. phones running its Windows Phone 7.5 software, the latest upgrade to Windows Phone 7, which represents a complete overhaul of the Microsoft mobile phone software.  They built a giant model of a phone in Herald Square, New York City and had rappers and dancers performing around it on Monday, while pizza was handed out to bemused onlookers.

Andy Lees, who leads Microsoft’s phone business, was on hand to talk up the software, which he said has been very well received by consumers.

“When people use it they love it,” he told reporters. “We’re definitely on to something.”

But he was very cagey about how many phone sales exactly this translates to, in the first year of the revamped Windows Phone offerings.

“We sold more than Android in its first year,” Lees said, referring to Google’s Android launch in the fall of 2008. Research firm IDC estimated that about 3.6 million Android phones were sold in its  first 12 months, starting in the fourth quarter of 2008.  It did not give an estimate for Microsoft’s market share in the third quarter of 2011.

Comscore says Microsoft’s share of the U.S. market actually fell by 0.2 percentage points  from the second quarter of 2011 to a 5.6 percent share in the third quarter this year, while Google’s share rose by 4.6 percentage points to 44.8 percent. So Microsoft has a long way to go to establish itself as a major player alongside Android and Apple’s iPhone.

Microsoft made a big deal of the launch of three U.S. phones running its Windows Phone 7.5 software, the latest upgrade to Windows Phone 7, which represents a complete overhaul of the Microsoft mobile phone software. Join Discussion