Thursday, July 14, 2016

Vevo Is The Music Industry's Secret Weapon


A musician currently gets around eight times less if their song is played on YouTube than they do if played on Spotify and, not surprisingly, are finally asking -'why?'.

Artists as such as Taylor Swift, Kate Perry, Billy Joel, Lionel Richie and Rod Stewart are petitioning for change (there goes my playlists...) and negotiations are onging between the industry and the Google video service.

Common wisdom has it that musicians need YouTube more than YouTube needs musicians, but is this actually true any more ?

A service owned by the music industry, Vevo, actually provides over half of the music video plays on YouTube and has other outlets such as its own apps for Smart TV and mobiles.

There's little doubt that other major online players from Apple to Facebook and even Twitter and the Verizon owned AOL are keen to break the YouTube monopoly.

As a result, Vevo is a very valuable property that might do best by staring a bidding war between these players, or setting a minimum royalty level for any service taking its videos, ostensibly becoming a clearing service and agent for the digital age. 

There is one factor complicating this, which is that YouTube hides behind DMCA legislation (which has recently been strengthened by judicial decisions) and can keep playing any music video until it receives a take down request, without sanction. Whilst YouTube was a hosting service, this was perhaps defensible, but today it is a content producer and broadcaster in its own right. But it has this safe harbour provision behind it in negotiating rates for musicians downwards. Spotify does not have this luxury, nor do traditional broadcasters.

Artists need to put their money where their mouths are and pull their copyright from YouTube to strengthen their case and then use Vevo as their trump card.


Thursday, July 07, 2016

Brexit & The Media Industry

Image result for brexit

Someone asked me yesterday what Brexit would mean for the media industry. It's something I've written and talked about here and there, but the actual consequences now that this eventuality has befallen us demands greater consideration.

First of all, there's the macro economic climate. The pound is weak and tax is being lowered, meaning that investing in the UK becomes cheaper and discourages buying from abroad.

However, from all the discussions I've had, the psychological impact of the divorce from the EU will put off potential partners not just from Europe but around the world. I keep on hearing the phrase 'little Englanders' from all kinds of people dismayed at the outcome of the referendum. It does not bode well.

However, the break up will derail the grand plan to make the EU one market for content, which was set to hit the rights industry very badly. This also has the added benefit of keeping things complicated for the US Big Internet companies trying to take over the media industry. As proposals stood, they could have waved their chequebooks and pretty much bought or wiped out the whole media sector in Europe in the straight-to-streaming (STS) era.

The fact that the UK will not be signing up to TTIP for the near future is also a book to our creative companies and will give them breathing room to try and compete again with US companies. Moreover, already the tax regime seems to be levelling out after the Chancellor's announcement on reducing Corporation Tax.

Pretty much every major UK media company has already been taken over by major US players, and they are likely to be impacted - Liberty Global and Virgin Media had firm plans to build pan-European businesses, ready for the time when sports rights for most of the continent would be sold as a block. They will continue to have to treat the UK, the most lucrative of all markets, as a separate entity, which means that footballers' agents will be dragging on their cigars at the Leave vote.

Meanwhile, the move may well take ITV off the marketplace, since it will prove to be a somewhat less attractive stepping stone to pan European ambitions for the likes of Discovery and even Comcast.

The BBC is also probably in a better place, with its future already recently settled, it would be difficult to see any UK politician daring to undermine our national treasures for the foreseeable future.

The UK has a tradition of heavily subsidising the creative industries, from the promotion of local TV stations to tax breaks on film investment, and with the 'austerity government' coming to an end it's likely that there will need to be further inducements in the future to 'make up' for the effects of losing EU funding, such as it is. The media industry needs to be lobbying heavily as soon as the UK has an effective Government again.

It's difficult to predict what will happen to cross border productions: this is already a mishmash or regional, national and pan European funding. Obviously, in time, the European funding will go away. However, the UK is the stepping stone to the global English language market so it's difficult to see a major impact here, although some producers and distributors dependent on EU sources of funding have been distraught.

Movement of actors and talent will become more problematic, especially for UK talent wanting to film or work overseas. But more important will be that recruiting staff for developing web and mobile will become tougher unless the UK stops churning out graduates who cannot code.

Also, it's worth considering things far more difficult to quantify and predict. The zeitgeist of the media industry is made up of millions of moving parts and they have been thrown into a state of turmoil. There will be a creative backlash without doubt, although it is depressing how un-political the media industry has become. Perhaps that will change on the back of the ill-founded will of the British democratic process.

Tuesday, July 05, 2016

Channel Rights Set For Revamp

Stories are circulating that the Government is set to repeal section 73 of the Copyright, Designs and Patents Act, which means that cable companies (that would be Virgin Media by now) do not have to oay ca riage fees to national channels such as ITV and Channel 4. It's more than possible that this provision will be extended to Sky also.

The resulting situation might see the BBC and ITV getti paid for their channels on cable and satellite, but with a significant distribution cost on internet delivery.

Whereas there is a fair amount written about rights around programmes and TV brands, little has been said about the rights of whole channels (or apps, or services, or whatever we should call them these days.

Could the logical conclusion be that the likes of Netflix become the carriers and pay ITV and the BBC to add their content to their lineup ?

Or will it result in the concept of a channel bis coming irrelevant, with TV broadcasters more akin to publishers, expoliting their rights across multiple distribution channels and seeking the best return from each.

One thing is for rtain, it's going to be an uncertain and rocky ride for every comoany involved in the TV delivery ecosystem.

Monday, June 20, 2016

Safe Haven In Any Storm

In 2009 Capitol Records sued Vimeo over copyright infringement, and in yet another example of how slowly the legal process moves, the case was last week dismissed in Vimeo's favour, citing the DMCA again, but seemingly broadening its interpretation in favour of service providers.

Essentially the ruling upholds the key tenet of the Act, that unknowingly hosting content without the necessary rights clearances is not illegal, provided the hosting company then takes down the infringing media. But in this instance it was ruled that the law was on Vimeo's side even though some of its staff were aware of the infringements and may have even posted them themselves. The rationale, seemingly is that these were a tiny part of the service's overall content.

There are a number of troubling elements to this judgement, perhaps the most important being how modern publishers such as Google, Apple and Vimeo obfuscate their roles as publishers and circumvent regulatory scrutiny as a result. Imagine if CBS had broadcast a show to which it had no rights and then argued that it was sorry and anyway, it was inly a small part of its output.

Ironically, this is a similar argument to Uber not employing its drivers and Air BnB not being a hotel company.

The DCMA has been essential in enabling the internet to flourish, but it should protect genuine arm's length businesses such as ISPs not companies that compete directly with broadcasters and publishers.

Tuesday, June 14, 2016

Why The UK Government Is Letting Technology Down

Silicon Valley went from being a place where you grew citrus fruits to a place where you grew the world's largest companies due to a single factor. US Government defence spending.

Governments should both invest in and be patrons of innovation. Such thinking has given us Concorde, CERN and Space Stations.

It shouldn't give us HS2, black cabs and a new bypass for Newport. It should give us hyperloops, driverless cars and ultra fast broadband for everyone.

Government should aspire to champion, promote and implement technology, like it implemented the NHS.

There should be a Department for Technology which could point out that billion pound aircraft carriers could pay for a million drones, that a guy with a gun is more ineffective than a guy with a computer. It should champion home grown tech companies who can take on the world, not sell out to Big Internet at the first sniff of success. It should reform the health industry using software management and innovative hardware.

Where is the technology Aneurin Bevan or the British Al Gore ?

The EU has become a proxy for all the things a government doesn't want to risk, a convenient excuse. A cop out, if you like.

Let's get out of the EU and challenge our government to use and support technology to build and create wealth for us all.


Monday, June 13, 2016

Microsoft Makes Its Move

Microsoft's $26.2 billion acquisition of LinkedIn aptly reveals the strategy of CEO Satya Nadella for the software titan.

The focus is on business and enterprise. There is no longer much value to the operating system business where the company famously made its fortune and built its reputation - Google and open source developers give that away for free, and Microsoft has been forced to follow suite with Windows 10. But there is hug value in Microsoft's Office business, and it has quietly been acquiring apps such as Sunrise and Wunderlist which comoete with features in its outdated Outlook platform.

Indeed, I use LinkedIn for contacts, Wunderlist for Tasks and have pretty much given up on ever getting a decent calendar app that I can access on all my devices.

So, Microsoft is doubling up cleverly and is seeking to become the cloud enablers for comoanies big and small. You also have to factor in some of LinkedIn's acquisitions such as Slideshow, Pulse and Lynda.com.

Execution will be tough - Nadella is trying not only trying to turn around a supertanker, he's trying go turn it into a fleet of speedboats. We deal a lot with Microsoft at TV Everywhere (our main platforms are largely hosted on Azure) and it's clear that the will is there and, in my opinion, they are a far better bet for business than Amazon or Google and their megalomania.

But there remain gaps in the Microsoft strategy, especially around video, and units such as MSN and X-Bix may be wondering what future there is for them in this brave new world (oh to roll those divisions up with Yahoo! Into a new super publisher...).


Wednesday, May 18, 2016

Termination Day for Netflix

I don't have 'telly'. I have truly cord cut since my aerial was blown over in a storm last winter and watch all content via online apps, either generic to my LG screen, or more usually through a Roku dongle (go and buy one, they rock!).

I have swapped my stupid expensive Skye and Virgin subscriptions for Amazon Prime, Now TV, Netflix and the usual gamut of UK online apps (BBC, ITV, Channel 4 and Channel 5).

Over the past few weeks I've been analysing how I've been using these services.

Now TV accounts for around 70% of viewing time with its extensive range of box sets from Sky in the UK and HBO and ABC amongs many others. This would definitely be my desert island IPTV (or OTT as it now seems to be called) service.

Second is the BBC app, followed by Channel 4 (with a great range of foreign box sets in their 'Walter' series) and then ITV. The expiry of content after a month is a real frustration here since you can often miss the first programme in a season.

Next comes Amazon Prime with some nice series such as Vikings and Turn.

Finally, there's Netflix, which is almost an irrelevance. It has very, very little good, new, original TV box set type content - House of Cards once a year doesn't cut it. The movies are languid. It may be taking over the world, but I reckon we spend less than 1% of our time on Netflix, so it's time to cut another cord and move on...