January 2010

In the App Economy, Newspapers Are Apps

[Commentary] If news media outlets want to thrive in this new environment, they need to start thinking of themselves as apps.

Being an app is the condition of not only allowing, but thriving, having your content live elsewhere. On the flip side, being the platform -- or the 'giant', if you will -- fuels that growth through attracting an audience. The app environment represents a revised means of consuming content. In a way, it's a Darwinistic solution to a problem that's bred out of too much noise. With the platform/app structure, consumers visit one place to get content from numerous sources. But while some content-based industries -- especially casual gaming -- have been able to thrive in this new environment via organic business models (e.g., in-game payments and social goods), others -- namely news organizations -- haven't yet. This may be partially due to the fact that newspapers don't really see themselves as apps yet. But for a media company to survive in this type of web economy, it's becoming increasingly clear that it needs to play the role of an app or a platform. And if you're a content provider, you typically fall in the second bucket, as platforms offer the stage to spread your product or word.

Apple pushes for lower TV prices

Apple is pressing US television networks to reduce their prices for TV shows offered on its iTunes digital store in order to cut the charge to consumers and to help spur demand.

The push is seen as an integral part of the iPhone maker's long-term strategy for the tablet computer, which it is expected to unveil on Wednesday. However, networks are resisting the move as they fear a repeat of the music industry's pact with Apple in 2003 to sell individual songs for 99 cents on iTunes. The price helped to simplify and boost downloads of digital music but dented album sales. In recent months, Apple has suggested during meetings with media executives that the price it charges consumers for TV shows be halved from $1.99 to $1, people close to the discussions said. Apple's belief, media executives said, is that drastically cutting prices could spur sales of TV shows on the iTunes digital entertainment storefront, which have so far frustrated Apple executives.

Liberty Media Seeks Up to 35 Percent of Live Nation

John Malone's Liberty Media plans to acquire as much as 35 percent of Live Nation Entertainment, the concert and ticketing company formed by yesterday's merger with Ticketmaster.

Liberty Media plans a tender offer for as many as 34.5 million Live Nation shares at $12 each, the Englewood, Colorado-based company said today in a statement. Malone's company, owner of the Starz cable network, was the largest shareholder in Ticketmaster, with a 29 percent stake before yesterday's deal and now holds 14.6 percent of the combined enterprise. Liberty said it is a party to a stockholder agreement with Live Nation that allows it to buy as much as 35 percent of the stock.

Mexico Seeks at Least $66 Million for Fiber Network

Mexico's government will auction two unused fiber-optic lines for at least 858.6 million pesos ($66 million), Communications and Transportation Minister Juan Molinar said. The auction will include two cables covering about 20,000 kilometers (12,400 miles). Rules for the auction, published in the official gazette, say a bidder could win one, two or all three divisions being offered as a 20-year lease. Results will be announced June 9.

FCC's Telecommunications Provider Locator

The Federal Communications Commission (FCC) released its annual Telecommunications Provider Locator report. The report lists 6,493 companies registered to provide interstate telecommunications as of October 2008, as compared to 6,252 companies as of October 2007. For each of these providers, the report identifies whether it reported revenue for local, wireless, payphone, operator and prepaid calling card, or other toll services, and whether it contributed to support universal service. The report also provides contact information for each company.

Tapscott: Digital natives need tech-rich education

Educators should change the way they view technology's role in everyday life in order to understand students' educational needs, said Don Tapscott, chairman of nGenera Insight, during a Jan. 19 Consortium for School Networking webinar on the digital generation.

The nation is at a turning point, Tapscott said, and many institutions that have served us well for decades or even centuries—including education—have come to the end of their life cycle and must be "rebooted" or reinvented for a new age. "This is an age where human communication is possible on a global basis," he said. Tapscott's newest book, Grown Up Digital, looks at the so-called digital natives, some of whom are now college graduates, and how this generation is shaping education and the workforce. These digital natives are truly shaping the way technology is used and the things it is used for, he noted.

Data on Data.gov Disappears

New downloadable statistics that agencies posted online on Jan. 22 disappeared on Monday, according to a government Web site tracking department participation. Agencies uploaded almost 300 new data sets on Friday, as required by the open government directive. But researchers at transparency group Openthegovernment.org noticed on Monday that some of the listings had been taken down.

Consumers are at the heart of IT efforts, top official says

The common denominator driving the Obama administration's push for widespread use of electronic health records, smart meters and downloadable agency statistics is consumer empowerment, the top federal technology official said on Monday.

All three initiatives are intended to equip citizens with information that can help them make better life decisions, federal Chief Technology Officer Aneesh Chopra told attendees of a health information technology conference sponsored by the eHealth Initiative, an independent organization that works to improve health care through IT. "2010 will be the year of implementation and results," Chopra said. "This will be the year we are going to see . . . newer products, services, tools and capabilities -- changes in the plumbing of our industry."

Gap between Verizon's wireless and wireline arms widens

Verizon may have always been a regional Bell operating company with a major wireless business, but as its fourth quarter results show, it's becoming a wireless company with a wireline company along for the ride. Once again, gains at Verizon Wireless continued to shore up losses at Verizon Communications, further broadening the gap between parent and daughter companies, but in the last quarter the chasm grew particularly wide.

VZW added 2.2 million net subscribers in the last three months of year, 1.2 million of which were postpaid and 1 million wholesale. Verizon remains the marker leader in size, quickly approaching the 100 million-sub mark with 91.2 million total mobile customers. Total wireless service revenues remained flat quarter-over-quarter at $13.5 billion and were up only 5% year-over-year, showing the continued pricing pressure US operators are seeing on voice. But VZW's data revenues continued to balloon, increasing $200 million over the third quarter to $4.3 billion and 26.6% year-over-year. Data now accounts for 31.9% of all service revenues. Almost half of that revenue now comes from advanced data services such as web access and e-mail, rather than messaging, driven by higher penetration of smartphones (15% of total subscribers) and 3G multimedia handsets and devices (11% of total subscribers). Average revenue per user (ARPU) for data breached $16 in Q4, up 18% year-over-year. And with a $20 to $30 data plans now required on all 3G phones based on VZW's revamped pricing structure, data revenues will likely spike further in 2010 even as voice revenues drop.

But total wireline service revenues fell $100 million quarter over-quarter to $11.5 billion, representing a 3.9% drop year-over-year. On the residential side, access line loss showed no signs of improving with Verizon posting a further 12.3% decline, and Verizon continued to shed DSL customers, shedding 107,000 broadband lines. Its FiOS service didn't do much to make up the difference, adding only 153,000 new customers for both video and broadband services in the fourth quarter. That demonstrates a sizable slowdown in customer acquisition since last year even though it has expanded the FiOS footprint to cover nearly half of the homes in its footprint.

Federal Ban on Texting for Commercial Truck Drivers

Transportation Secretary Ray LaHood announced federal guidance to expressly prohibit texting by drivers of commercial vehicles such as large trucks and buses. The prohibition is effective immediately and is the latest in a series of actions taken by the Department to combat distracted driving since the Secretary convened a national summit on the issue last September.

"We want the drivers of big rigs and buses and those who share the roads with them to be safe," said Secretary LaHood. "This is an important safety step and we will be taking more to eliminate the threat of distracted driving." The action is the result of the Department's interpretation of standing rules. Truck and bus drivers who text while driving commercial vehicles may be subject to civil or criminal penalties of up to $2,750.

Federal Motor Carrier Safety Administration (FMCSA) research shows that drivers who send and receive text messages take their eyes off the road for an average of 4.6 seconds out of every 6 seconds while texting. At 55 miles per hour, this means that the driver is traveling the length of a football field, including the end zones, without looking at the road. Drivers who text while driving are more than 20 times more likely to get in an accident than non-distracted drivers. Because of the safety risks associated with the use of electronic devices while driving, FMCSA is also working on additional regulatory measures that will be announced in the coming months.

Benton

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