November 2011

Networks' Reverse Compensation Take to Hit $1B in 2014

Reverse compensation from affiliated stations could become a billion dollar revenue stream for the major broadcast networks by 2014, according to a new analysis by SNL Kagan.

"For major networks, sharing in affiliates' retrans [retransmission] revenue stream is now a given, and although slightly different models are emerging, network partners appear to be planning to receive at least half of the income flowing to affiliates," according to the Kagan report. "Reverse retrans, added to the retrans revenues going to the nets' owned-and-operated stations, produces a major new revenue stream for broadcast networks." For 2011, Disney, which owns ABC, will be getting the most in reverse compensation at $53 million, followed by Fox and MyNetwork TV owner News Corp. at $39 million, CBS at $28 million (also including the CW). Comcast gets $5 million for NBC and Telemundo. News Corp. generates the most retrans revenue from cable and satellite operators at $257 million in 2011, according to Kagan. CBS gets $181, Disney gets $104 million and Comcast gets $16 million. Kagan says ABC gets the most in reverse comp because it's completed agreements with 60% of its non-owned footprint, more than the other networks. Those figures should grow significantly in the next few years. In 2014, News Corp. will rake in $296 million from affiliates, CBS $284 million, Disney $231 million, and Comcast $202 million, for a total of $1.037 billion. At the same time, the broadcasters trans payments from operators will be $1.562 billion.

Our relationship with e-books: It’s too complicated

One of the best things about media going digital is that it can be easily shared and distributed to others with just a click — except of course that it often doesn’t work like that, thanks to copyright or licensing restrictions and competing platforms.

E-books are a great example: Theoretically, it should be easy to share not just books, but passages we like, and there are a number of startups and services like OpenMargin and Readmill and Findings that are trying to make this happen. But competing rights, standards and platforms mean these kinds of features are available on only a tiny fraction of books, and that keeps most readers inside their little reading silos.

Economy Reemerges as Top Story

Driven by coverage of both a presidential housing relief plan and the Occupy Wall Street protests, the economy accounted for 25% of the newshole last week, marking its highest level of coverage in almost two months.

From October 24-30, the economy filled 25% of the newshole, according to the Pew Research Center’s Project for Excellence in Journalism. That is the most media attention to the subject since the week of September 5-11, (28%) when President Obama’s job speech helped fuel much of the coverage. Last week, Obama’s plan to make it easier to refinance mortgages and the Occupy Wall Street story combined to account for almost 40% of all the economic coverage. At 5% of the overall newshole, however, Occupy Wall Street fell far below its biggest week of coverage (October 10-16), when it filled 10% of the overall newshole. That was the case despite a spike in drama in a number of cities last week as police clashed with protestors, with one encounter that resulting in a critical injury of an Iraq war veteran in Oakland (CA).

Request for Comments on Government Cloud Computing Technology Roadmap

The National Institute of Standards and Technology (NIST) publishes this notice to seek public comments on the first draft of Special Publication 500–293, US Government Cloud Computing Technology Roadmap, Release 1.0 (Draft).

This document is intended to be the mechanism to define and communicate interoperability, portability, and security requirement priorities that must be met in terms of standards, guidance and technology for U.S. Government (USG) agencies to accelerate their adoption of cloud computing. The roadmap has been developed through a transparent working group process, which included five NIST Cloud Computing Working Groups that were established in November 2010.

Comments must be received on or before 5 p.m. Eastern time on December 2, 2011.

CBO Scores Data Breach Notification Act

The Data Breach Notification Act (S. 1408) would require most federal agencies and business entities that collect, transmit, store, or use sensitive personal information to notify any individuals whose information has been unlawfully accessed through a breach in security systems designed to protect such information from unauthorized access.

The legislation defines sensitive personal information as combinations of an individual’s name, address or phone number, and Social Security number, driver’s license number, financial account information, or biometric data (that is, finger print, voice print, or retina scan). Under certain circumstances, entities could apply to the federal government for exemptions from those notification requirements. In addition, the affected entities would be required to notify the Department of Homeland Security (DHS) and the Federal Trade Commission (FTC) of a security breach. Finally, S. 1408 would impose civil penalties on entities that fail to provide notice to affected individuals.

CBO estimates that, assuming appropriation of the necessary amounts, implementing the bill would cost about $15 million over the 2012-2016 period. Enacting the bill also could affect direct spending and revenues; therefore, pay-as-you-go procedures apply. However, any such effects would not be significant.

S. 1408 contains intergovernmental and private-sector mandates, as defined in the Unfunded Mandates Reform Act (UMRA), but CBO estimates the costs to comply with those mandates would not exceed the thresholds in that act ($71 million and $142 million, respectively, in 2011, adjusted annually for inflation).

Google-Motorola bears its first fruit

It's been nearly three months since Google caught the tech world off guard by offering to buy Motorola Mobility Holdings for $12.5 billion. That's 11 weeks of head scratching, followed by second guessing, followed by some daring analysis, followed by more head scratching. Just what is Google getting out of this deal? Aside from patents, that is. A hint may lie in the release of Motorola's Droid Razr. The latest in Motorola's popular Droid line of Android-powered phones, the Droid Razr will reportedly launch on Verizon's wireless network on Nov. 10. While it's unlikely to lure any iPhone lovers away from Apple, it could help Motorola gain back some market share from Samsung, which saw revenue from mobile handset sales rise 40% last quarter, compared with a 20% rise in Motorola's mobile devices.

Motorola's Droid Razr won't be the first smartphone to run Ice Cream Sandwich early. That honor goes to Samsung's Galaxy Nexus. But unlike that phone, the Droid Razr will soon become a Google-owned phone. Google has acted like it wanted to manufacture its own phones ever since the first Nexus, which saw disappointing sales but at least came close to Google's own vision of what an Android phone should look like. The Droid Razr will combine Motorola's hardware design with Google's software design. Once it owns Motorola, Google can design smartphones exactly as it wants them to be, only with the brand and expertise of one of the world's top mobile firms. Which gets at the real reason I suspect motivated Google's purchase of Motorola, beyond its patent portfolio: Google has no idea what will happen if it manufactures its own smartphones. Nobody does, really. But the only way for it to find out for sure is to try it. The mobile industry is young and competitive and rapidly evolving. It is by nature unpredictable. So it's just as easy to say Google will regret buying Motorola as it is to say it will look back on the deal as a shrewd move. This is a risky transaction that my not pan out, but where there is risk, there can also be reward. And if it doesn't pan out? There is a downside, but it's not so terrible. Google can shut down its phone manufacturing operations, or sell it off. Or, most likely, spin it off into a subsidiary and let Motorola return to the public markets. Minus the patents, of course.

The race for education tech heats up

Selling out, cashing in and calling it a day seems to be many startup founders' dream these days. And in a shaky market, who can really blame them? New York-based Knewton is hanging tough.

The online learning company announced that it is pairing up with Pearson to add its adaptive learning technology to all of the publisher's online courses, starting with its college-level programs. Instead of selling itself, Knewton has entered into an agreement with the industry giant, which might otherwise have been an acquirer. The deal is just the latest sign that some startups are holding their own with the industry's heavyweights as the market for new educational technology heats up. Knewton uses an algorithm to track how students learn, tailoring courses incrementally based on a student's individual strengths and weaknesses. The system is intended to grow more intelligent as more students use it, much like Google's search results. Pearson's close to 9 million college-age digital students will work within Knewton's system, creating a massive amount of coveted data on how student learn online. Pearson will get semi-exclusive access to Knewton's adaptive learning technology. And Knewton, which recently raised $33 million in venture capital funding in a round led by Pearson and Founders Fund, will get a share of proceeds based on the number of Pearson's online students.

The Case of the Missing We The People Petitions

[Commentary] On October 20, 30 days after the launch of the We The People Website and the last day before the first petitions started to be removed from the White House website, there were 208 posted petitions. On October 26, 2011, the number of posted petitions was 161 (by October 28 it had dropped to 125, of which only 76 had reached the 150 signature threshold in the last 30 days). Although most of the 161 double count those in the 208 tally, this suggests that well under 4 percent of the submitted petitions have reached the 150 signature threshold necessary to be publicly posted on the White House website. Why is this? One important factor is that it is far harder than most people suppose to get to the 150 signatures. Surprisingly, given the way the White House set up the registration, getting 150 print signatures is vastly easier than getting 150 electronic ones. My guess is that petition creators, in order to yield 150 actual signatures, need about 600 people willing to both click on the URL to sign the petition and then click on the register button. Given all the unannounced and unexplained downtime for the White House petition website, the ratio may exceed 1,000:150 for those unlucky petition creators who send out their publicity when the White House website is down.

Free Wi-Fi in central London promotion launched

Nokia has switched on a trial of a free Wi-Fi service in central London. From November 1 until the end of 2011, the public will be able to use the high-speed service in certain parts of the city courtesy of the phone firm. If the two-month trial is deemed a success, the Finnish company plans to turn it into a fully fledged free Wi-Fi service early in 2012. The initiative is one of many that will eventually see London dotted with hotspots offering free net browsing.

How Turkcell built one of the world's fastest networks

As the CEO of Turkcell Group, Sureyya Ciliv sits at the helm of one of Europe's most important telecom giants. He is also a key player in the roaring Turkish economy. (Turkish GDP growth even outpaced China's earlier this year.) And that has put the 53-year-old executive in the position of offering some guidance to neighbors in the much-troubled Eurozone as well as to stagnating Western powers farther abroad. His idea? Privately funded investment in infrastructure.

Ciliv has the clout to be doling out advice. Since he was made CEO four years ago, Turkcell has grown from 44.9 million subscribers to 61.7 million in Turkey and eight other countries in the region. Ciliv pushed Turkcell into new markets, most recently Germany, while building on positions through its Fintur subsidiary and others. Overall, Turkcell leads the market in Turkey, Kazakhstan, Azerbaijan, Georgia and Northern Cyprus. It also has toeholds in Ukraine, Belarus and Moldova. In an August study, Turkcell's data download speeds in Turkey for phones on its 3G network were rated the fastest for those of 53 industrial nations -- including ones in North America -- by telecom giant Ericsson. Now plugged into his home country's centers of power, Ciliv spent many years in the United States, graduating from Harvard Business School in 1983 before co-founding an information management solutions company, Novasoft Systems. He left Novasoft in 1997 to head up Microsoft's operations in Turkey. By 2000, he'd risen to an executive role in worldwide sales and marketing back in Redmond, WA. He's been CEO of Turkcell, based in Istanbul, since January 2007.

Benton

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