January 2012

Internet distributors are changing the TV syndication game

Television production studio executives long have been wary of Hulu and other forms of Internet distribution, fearing they would lead to increased piracy and destroy lucrative secondary markets, including syndication and DVD sales. But video streaming services offered by Netflix, Hulu and Amazon are becoming an unexpected boon to the TV syndication market.

By writing checks to license library content from networks, the Internet services are injecting new revenue into the TV business and breathing new life into middling shows. "The introduction of the subscription video-on-demand platform has broadened the opportunities for exploitation of product in a very positive way for consumers and studios," said Ken Werner, president of Warner Bros. domestic television distribution. "You do not need to accumulate 100 episodes of a series because 40 hours of programming is a lot, so many of these shows work perfectly well on these new services." (Dec 31)

Telecom customers may sue government over wiretapping, court says

Residential telephone customers can sue the government for allegedly eavesdropping on their private communications in a warrantless "dragnet of ordinary Americans," a federal appeals court ruled.

Lawyers for customers of AT&T and other telecommunications providers hailed the ruling for allowing the courts to decide whether widespread warrantless wiretapping violated their constitutional rights. "It's huge. It means six years after we started trying, the American people may get a judicial ruling on whether the massive spying done on them since 9/11 is legal or not," said Cindy Cohn, legal director for the Electronic Frontier Foundation, which was among those fighting for a day in court. The three-judge panel of the U.S. 9th Circuit Court of Appeals, however, upheld dismissal of other cases that sought to hold the telecommunications companies liable, citing Congress' decision to grant them retroactive immunity. (Dec 29)

Network TV season defies expectations

The hot stars on the TV screen this fall were supposed to be Playboy bunnies, Pan Am stewardesses and angry dinosaurs. Instead the winners were broke waitresses, snarky suburbanites and Snow White.

Welcome to the 2011-12 television season, where the costly shows that were supposed to be hits tanked and the ones that prognosticators had overlooked turned into ratings gold. Among the biggest disappointments have been NBC's short-lived "The Playboy Club," ABC's "Pan Am," which is struggling to stay airborne, and Fox's prehistoric drama "Terra Nova," which may end up going extinct in its first year. "Those shows got a lot of buzz and attention, and they just flopped," said Brad Adgate, an analyst at media buying firm Horizon Media. Each year, the networks spend hundreds of millions of dollars making and marketing shows, and advertisers drop billions of dollars buying commercials to run in them. If a show does not deliver the ratings a network promised advertisers, the network provides additional commercial inventory to the advertiser. For example, Fox's new singing talent show "The X Factor" delivered fewer viewers than advertisers expected, so the network provided what's known in the industry as make-goods. Ratings are not the only factor in judging a show's performance. On paper, "Terra Nova" has been a solid performer for Fox, averaging almost 10 million viewers. However, the show — whose pilot alone cost $15 million to make — is far more expensive than the typical network drama. Given that, Fox was hoping it would deliver a bigger audience. (Dec 27)

Consumers turn to do-not-track software to maintain privacy

Suppliers of the best-known anti-tracking tools — Ghostery, Adblock Plus and TrackerBlock — all reported big jumps in usage in the second half of 2011.

Ghostery, for instance, is being downloaded by 140,000 new users each month, with total downloads doubling to 4.5 million in the past 12 months, says Scott Meyer, CEO of parent company Evidon. Adblock Plus has been downloaded more than 140 million times and is currently in daily use by more than 17 million Internet users worldwide, managing director Till Faida says. TrackerBlock usage continues to steadily rise, with total daily users numbering in the hundreds of thousands, says Jim Brock, founder of parent company PrivacyChoice. Meanwhile, the goal of newcomer Abine, supplier of Do Not Track Plus, is to make anti-tracking as common as anti-virus for personal computing devices, says CEO Bill Kerrigan, who formerly headed anti-virus giant McAfee's global consumer business. Abine projects the number of Internet users in North America using anti-tracking tools and services will be 28.1 million by the end of 2012, up from 17.2 million today. "We want to drive the next level of adoption," Kerrigan says. "No one is suggesting don't use Facebook or Google. At the same time, we are suggesting there is a better way for consumers to experience those type of products without necessarily being tracked at every step they take in their digital life." (Dec 29)

FCC one member away from being out of commission

With Sen. Chuck Grassley (R-Iowa) blocking President Barack Obama's two nominees to the Federal Communications Commission (FCC), the five-member board is set to begin the new year with the bare minimum of members needed to take official action.

The FCC needs the presence of three members for official agency business. "So if one of the members is out of town or disabled, the commission is unable to act," Andrew Schwartzman, policy director for public interest law firm the Media Access Project, said. Any one of the commissioners could block a vote by refusing to show up, but Schwartzman noted that would be an extreme action that he doesn't believe has ever happened at the FCC. The agency does not compile data on the number of commissioners serving at any given time, but Schwartzman said he believes the last time the commission had only three members was for a several-month period in the early 1990s. (Dec 23)

Watchdogs say Obama has not done enough on government transparency

Government reform groups say President Barack Obama has fallen short on several of his promises to make the White House more ethical and transparent. Overall, the groups gave President Obama a decent record on improving transparency, particularly compared to past administrations. Still, given the promises in 2008, there’s disappointment President Obama has not done more.

“This is the first administration that has made a very concerted effort to enhance transparency of most aspects of the governmental process,” said Craig Holman, a government affairs lobbyist for Public Citizen. “We’ve seen a great deal accomplished under the Obama administration, but there has been somewhat of a letdown for those of us in the reform community because we want more.” Holman lauded the website the administration created to track how taxpayer dollars are spent under the bailout of banks and other financial institutions. He also praised the decision to disclose the names of most visitors to the White House, as well as the ban on gifts to executive branch employees. But on issues of campaign finance transparency and the promise of creating a centralized and searchable public database for all government data, watchdog groups say they’ve been starkly disappointed. “I have to give them the benefit of the doubt a little bit,” said Meredith McGehee, the Campaign Legal Center’s policy director. “There was just so many things on their plate, so many competing priorities, and it’s hard to make it all happen. That’s why I’d give them a B- on transparency. They got a good start, but it’s kind of a mile wide and an inch deep,” McGehee said. Some experts on ethics say the steps Obama has taken have been watered down in implementation. (Dec 25)

Small cable firms want transparency on retransmission negotiations

A group representing smaller cable operators is calling on the Federal Communications Commission (FCC) to impose transparency requirements on TV station owners that coordinate their retransmission consent negotiations in order to expose potential price-fixing.

“The public needs to know whether broadcasters are trying to eliminate competition in local markets through collusion and drive up the prices pay-television providers pay to deliver free, over-the-air television to their customers,” said American Cable Association President Matthew Polka. The ACA argues coordinated negotiations between separately owned broadcasters in the same market violate the FCC's media ownership rules, reduce competition in local TV markets and lead to higher bills for consumers. (Dec 27)

Groups ask regulators to stop the online tracking of children

A coalition of public interest groups and privacy advocates has endorsed a proposal from the Federal Trade Commission (FTC) that would protect children from unauthorized tracking online.

The groups, including the Center for Digital Democracy (CDD), the Benton Foundation and World Privacy Forum, support the agency's recommended updates to the Children's Online Privacy Protection Act (COPPA) aimed at curbing the use of cookies and other tracking mechanisms in sites targeted at children. “Given children’s limited cognitive abilities and the sophisticated nature of contemporary digital marketing and data collection, strong arguments can be made that behavioral targeting is an inappropriate, unfair and deceptive practice when used to influence children under 13,” the groups said. “At the very least, marketers should be constrained from engaging in such practices without obtaining meaningful, prior consent from parents.” (Dec 27)

Tribune Company bankruptcy likely to last into summer

Tribune Company likely will not emerge from bankruptcy protection until at least this summer. Tribune, which has been under Chapter 11 protection for three years, had hoped to end the case in 2011.

But in October, U.S. Bankruptcy Judge Kevin Carey rejected the company's plan to reorganize its finances, along with a rival plan from dissident creditors. Tribune has since submitted a revised plan. Approval of the plan is the key step in ending the case. Carey said Thursday that a confirmation hearing on that likely won't take place until May. It could take weeks or months longer to get a ruling. (Dec 30)

Sen Rockefeller Seeks NTIA Help in Delaying Domain Name Increase

Senate Commerce Committee Chairman Jay Rockefeller (D-WV) says the Internet Corporation for Assigned Names and Numbers (ICANN) is not taking the slow and steady approach to expanding generic top level domain names (gTLDs), which could have "adverse consequences" for consumers, companies and nonprofits.

In a letter to Lawrence Strickling, head of the National Telecommunications & Information Administration, Chairman Rockefeller said he wanted Strickling to work with ICANN to make sure that the expansion, which begins with an application window that opens Jan. 12, is done in a "cautious, limited manner." Chairman Rockefeller raised similar concerns at a Senate Commerce Committee hearing earlier this month on the expansion. (Dec 28)

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