With most of the big names in the media/tech space reported, it’s been an up and down earnings season. There have been some hits and some misses. There’s been some positive guidance and some suspect. Now three of the remaining big names have reported their performances. Summing them up, here’s the tally from News Corp., Marvel Entertainment and Time Warner:
Copyright law is a funny beast. Even in its most recent incarnations, freshly stamped with Congressional approval, it rarely keeps pace with changing business models and new invention. It’s evolutionary law subject to seemingly constant interpretation (and re-interpretation) to match legislative intent to new market paradigms. A case in point: in March 2007, the U.S. District Court in New York ruled a digital video recorder (DVR) that used remote storage instead of a local hard drive violated copyright laws. Yesterday, the U.S. Court of Appeals (2nd Circuit) reversed the ruling and said Cablevision’s planned remote storage DVR (RS-DVR) is legal.
In January, Netflix announced the first of several ambitious partnerships to integrate the software behind their “Watch Now” streaming video service into TV-connected consumer electronics. The deal, they revealed just prior to the Consumer Electronics show, was with LG for a set-top box. At the time, the battle for next-gen DVD standards was still ongoing so it was unclear if “set top box” meant we might see a DVD player (HD DVD or Blu-ray) or some other device. Little clarifying information was provided. Today, long after the standards war ended, the mail-order DVD pioneer and the South Korean electronics giant filled in the blanks with detail.
Earnings season is always a busy time in the corporate finance world but for those watching the media and entertainment sectors, Tuesday was a day of particular information overload. DreamWorks Animation, Electronic Arts, Sony and Viacom all reported quarterly results. The news was mixed. There were some bright spots and some unpleasant surprises too. One by one we’ve got the four consolidated into one place; a single stop to summarize all four quarterly performances.
Everyone’s doing it. It’s the new, old thing. There’s Apple and Microsoft, Netflix and Amazon, there’s TiVo, Roku, Sony, Sezmi (formerly Building B), Vudu and more. They’re all bringing some form of video on-demand services over the Internet; rentals and purchases, some even free. It’s the promise of TV and movies as you like it, when you like it. Thursday, Amazon became the latest entry into the crowded market. Technically, though, it’s a re-entry.
Since 2006, Amazon has offered a video on demand service called Unbox. Click to Read More
When Netflix first revealed their strategy to bring their streamed video service software to consumer electronics by licensing their software, they promised the licensing partnerships would be broad reaching. When the next earnings conference calls comes around, executives at the company will be able to say they have kept their word. After first announcing a deal with LG to tie into consumer electronics (DVD players and Set-Top boxes), then offering a standalone player in partnership with Roku, Netflix is now tackling gaming hardware.
Monday, using the E3 gaming convention in LA as a forum, Netflix revealed a plan to bring their Watch Now on-demand video service to Xbox 360 owners.
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.
