Competitors Cooperative: Microsoft Creates Advertising Council

msft pub councilLong before the word frenemy hit the buzzword bingo board, the proverb of complex relations was “the enemy of my enemy is my friend.”  In the increasingly tangled melting pot that is online media and advertising, the sentiment is as true now  as ever.   Today, competitors are often cooperative colleagues at the same time.  Proof: rivals Fox (News Corp) and NBC/Universal jointly developed popular web video portal Hulu despite otherwise battling each other for prime time TV audiences.  More proof: Microsoft is drawing competitors together to guide the development of its newest ad management tool, Pub Center. 

Using the Interactive Advertising Bureau’s annual meeting as a launching platform, Microsoft announced a Publisher Leadership Council on Monday.  The group joins together rivals including Dow Jones Online and the New York Times, as well as Time Inc., Viacom and IAC/Interactive.  Normally, these companies compete aggressively with each other for ad dollars and audiences online.

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Chernin Leaving News Corp: Details and Departure Memos

chernin news corpAs the President, COO and number two executive at News Corp for the last twelve years, Peter Chernin has long been counted among the most powerful men in the media industry but his position has always had a footnote.  Unlike other executives in similar roles, outsiders have rarely considered Chernin a likely candidate to ascend to the company’s CEO throne.  The honor of one day leading News Corp, though ultimately a board decision, has generally been assumed reserved for one of Rupert Murdoch’s sons.   This lack of upward mobility has fueled consistent rumors about Chernin’s eventual departure. Today, they’re now fact.

Reports are confirmed that when Chernin’s five year old employment contract expires June 30th, it won’t be renewed.  Both Chernin and Murdoch have issued memos to staff making the announcement.  (The letters are reprinted below in their entirety as is the company’s description of his employment agreement).

Chernin joined News Corp in 1989.  After heading up Fox Broadcasting and Twentieth Century Fox, he became President and COO in 1996.

After twenty years at the company, Chernin characterized his decision as a difficult one saying ultimately that he’s “ready for new entrepreneurial challenges.”

Murdoch in a long memo to staff (see below) acknowledged Chernin’s service and hinted a management restructuring will likely follow to streamline reporting between the company’s LA based businesses (Fox) and the rest of its operations.  Calling Chernin a “close colleague and an ally,” and deeming his contributions “immeasurable,”  Murdoch said “now is also an ideal opportunity to streamline and enhance many of the corporate and administrative functions of the business.”

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Blockbuster to Try Mail Order Game Rentals

bbi games metueThe U.S. video game industry chalked up almost$22b in retail sales last year and is continuing to grow steadily.   In 2008,   approximately 20.7m current generation consoles were sold (NPD data).  That number may be relatively small compared to the install base for DVD players (estimated at about 87% of TV owning households in 2007 according to Nielsen), but life to date US sales of consoles as of December were above 81.6m  units (including the PS2, 38.4m, without).  No matter how you count it, that is a substantial market and a sizable number of households. 

Blockbuster in its continuing struggles to reinvent and improve its business wants to reach the gaming market more efficiently than they currently do.  To achieve that, the company announced Wednesday they’ll begin including games in their “Total Access” mail-order rental service.

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Amazon Debuts Kindle 2.0

kindle 2When Amazon launched its Kindle eBook reader in late 2007, opinions on the device ran the spectrum.  Some analysts and pundits criticized it.  To them, the execution was bad. The device was unwieldy and immature.  The market opportunity for eBooks was narrow at best.   With Kindle, they thought, Amazon was chasing rainbows.   Others looked at the vision and thought the opposite.  They projected the Kindle would be transformational.  Even with its warts, they lauded the first generation device and proclaimed it the publishing industry’s equivalent to the iPod.     

After more than a year of sales, the verdict is still out but the Kindle has proven one thing: it’s no joke.  The device has been in short supply since launch.  Customers have raved about it and thanks to Kindle, eBook sales have climbed to ten percent of Amazon’s total book sales.

This morning, Amazon rolled out the second generation. 

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Corbis Migrating Microstock Photos from Snap Village to Veer

cash photos sale smallIn the past few years, the advent, and rapid growth, of low cost royalty-free photo licensing services like iStockphoto (dubbed “microstock” agencies) gave amateur photographers an entrance into the previously exclusive world of image sales and caused a sea change in how some large licensing businesses operate.  Undercutting pricing and pinching sales, the upstarts arguably even forced the privatization of image licensing giant, Getty Images.

Bill Gates owned Corbis came late to the game but planned to capitalize with the launch of its own microstock service, Snap Village. A beta opened to the public in June of 2007 and the site launched commercially a year later.  The idea at the start was to differentiate by offering image owners the luxury of setting their own pricing schedules (in set stops between $1 to $50).  Two years later, Snap Village has found chasing down the market leader with this approach was harder than anticipated.  

Rather than revise, Corbis will of start over – sort of.  Click to Read More

Earnings: News Corp Comes In Low, Takes Huge Charge

earnings wrap metueAnalysts expected 19 cents per share in earnings.  They got 12 cents, and that’s not taking into account an $8.4b writedown.   So much for expectations.

Like other major media companies (Time Warner (PDF), and Disney (article) to name a pair), it’s currently a struggle to balance ad inventory against reduced spending.  In the face of this, News Corporation reported weak earnings Thursday.

In a statement Rupert Murdoch explained saying the “downturn is more severe and likely longer lasting than previously thought.”

Revenue for the company’s fiscal second quarter came in at $7.87b, down 8.4% and below Wall Street’s expected draw of $8.35 to $8.38b.  Factoring in the pre-tax onetime charge related to goodwill and intangible assets, the net loss was $6.4b, or $2.45 a share compared to net income of $832m (27 cents a share) for the same period last year.

The result was News Corps. First loss in more than three years.

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Tribune Centralizing Online Entertainment Coverage

inside papers. metueOperational efficiency is important for any well run business.  It’s essential for those trying to work from struggle to success. The Tribune Co, still under the protective umbrella of bankruptcy, will try and get leaner by sharing resources across its properties.  The first focus: entertainment.

A joint online entertainment news bureau, apparently to be called “the syndicate” is being created from assets at the LA Times and Zap2it.

According to the company, this new bureau will focus on expanded coverage of movies and TV.  “It will leverage writers and reporters from across [Tribune] properties to bring readers constantly updated blogs and other multimedia news on more than 60 top TV shows,” Click to Read More

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