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Looking back through centuries of history only a short list of communication technologies have fundamentally changed the way people and societies share information; things like written language, the printing press, the telegraph, the radio, and television.  Each, over years of evolution, utterly disrupted existing practices, pushing aside the antiquated and expanding the depth of possibilities.  Each, in developmental years, had critics predicting there’d be little long term value.    Each also has had champions who eagerly predicted the innovations would drastically reshape the world.

The Internet falls in to the same exclusive club but its functionality and contribution are still evolving.  It will take decades before the breadth of its impact and transformative power are fully understood.  Still, that won’t stop many  from predicting where things will go or how the Internet will continue to shape our world along the way.

Monday, Lehman Brothers took a stab at such a prediction.  Citing the disruptive power of the Internet, and its likelihood of changing business economics in the entertainment industry, they downgraded stock ratings on several companies.  The recent history of the music industry was cited as one partial justification.

The view seemed extreme.  This METUE review takes an in-depth closer look.

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The proposed marriage of Blockbuster and Circuit City always seemed wrong; like two actors that peaked early, fell from favor and were looking for mutual salvation in a questionable, improbable union.  It didn’t make sense.  It didn’t feel right.  The common ground seemed to be troubles not opportunities.   Given that, the odds of one company salvaging the other, of Blockbuster resuscitating the struggling business of Circuit City, seemed small.  Luckily for Blockbuster shareholders, CEO Jim Keyes reached the same conclusion before he walked the company into the Elvis Wedding Chapel and said “I Do.”

Wednesday, Blockbuster officially withdrew its $1.35billion ($6 to $8/share) offer.   All it took was a close inspection of Circuit City’s books.

The review process began in May Click to Read More

Advertising dollars are the fuel of the Internet but in some segments like online videos, the process of attracting it seems like something from Frankenstein’s lab.  Nobody yet knows the exact chemistry it will take to balance audience acceptance (or tolerance) for advertising against advertiser required metrics for measurement of return on investment.  By best guess, the answer could be a combination of existing tools, or even a business model not yet invented. It’s a crapshoot. Tea Leaves and gambles.

Google with its huge share of search and video traffic (YouTube) has a vested interest in figuring out the how to make it work.  Unlike all but a few companies, Google also has the kind of cash and technical expertise to take on the science project without limitation.  They can afford to fail, repeatedly, than try again until they get it right. 

The latest experiment from Mountain View Click to Read More

A week ago, at Sony’s annual meeting, Howard Stringer said the company’s top priority was “to restore profitability in [the] television and game businesses;” both of which lost money during the last fiscal year.  Thursday, Sony began to publicly outline their blueprint for making that happen.  At the center of it, a keystone they say, will be networking – connected entertainment appliances.

Sony is planning to spend $16.7b (1.8 trillion Yen) over three years (through March 2011).  The aim will be to become “the leading global provider of networking consumer electronics,” Stringer says.  By the end of the process 90% of Sony’s product categories will have networking and wireless capabilities. 

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At times during the past couple years Internet video sites have seemed like the fad du jour, like another bubble of inflated expectations waiting to burst.  Every few weeks there seemed to be another monstrous financing.  $10m invested here.  $20m gambled there.  Even a pledged $30+ million from time to time.  Super Deluxe. 60 Frames. Joost. Veoh.  Metacafe. Crackle. Revver. Daily Motion. Funny or Die. Hulu. This Just In. Deca.TV – Every week a new company name to add to the lexicon and the watch list. It was all part of the “next new thing.” The big gamble.

Like any new market, especially one with big opportunity, a certain amount of this speculation is understandable.  With billion dollar market opportunity, there is invariably going to be a lot of competition chasing the same trophy.  And unequivocally, all these sites were, and are, chasing just that same predictable future – the migration of television and video programming to a time-shifted, place-shifted, long-tail-wagging world of Internet distribution.

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Through nearly the first 180 days, 2008 has been a busy year for M&A activity .  Today, adding to the year’s tally, movie ticketing service Fandango announced the acquisition of Movies.com from Disney.

Under the prior name mrshowbiz.com, Movies.com was launched in 2000 to provide movie summaries, facts and celebrity info.  In May, the site drew 1.9m unique visitors.

Fandango, which was bought by Comcast in April 2007, provides online ticket sales for about 15,000 movie screens around the U.S.. The site drew approximately 6.3m unique visitors in May.

The company currently splits its revenue between advertising income and Click to Read More

iTunes has long been looked at as the loss leader, the bridge that links Apple’s assorted media products. It drives product sales and helps power iPods, iPhones, Apple TV and Mac multimedia.  But that role of servitude hasn’t stopped it from turning into a significant force. 

Apple announced today, the iTunes store crossed the 5 billion song barrier.  That’s 5 billion songs sold, up a billion from the 4billion announced in January.   

At 99cents a song, that means the store has generated nearly $5billion in music revenue. That’s $3.5billion to artists and labels and $1.5billion to Apple (based on widely estimated revenue sharing splits).  That’s not too shabby for an auxiliary program that helps promote hardware sales.

As this graphic shows, the escalation in pace at which songs are selling isn’t bad either:

Even more impressive, however, might be the story surrounding video sales.  Click to Read More