February 2012

Discovering the Riches of TV Advertising

In these uncertain times, advertisers are taking solace in the glow of a television. Can investors also find a seat?

Growth in overall U.S. advertising spending began to slow early last year and may have declined in the fourth quarter. Preliminary data for October and November show total ad spending fell 0.3% from a year earlier, having risen 1.5% in the first nine months of 2011, according to Kantar Media's Jon Swallen. But TV ad spending was a standout, rising 4.2% in the two-month period, following a 2.3% rise in the year through September. Even spending on Internet ads, which had grown faster than TV in the first three quarters, declined 5.3% in October and November, Swallen says. TV's relative strength may seem surprising, given that the number of homes with pay television has stopped growing and people are spending more time on the Web. But advertisers still look to the most successful TV channels as a rare place to reach large, captive audiences. That said, the TV industry isn't sharing the ad dollars evenly.

Telecom's New Dividend Strike

Telecom dividends are falling like bowling pins in Europe.

France Télécom cut its 2012 payout by about 9%, following cuts by Spain's Telefónica and Telekom Austria in December. Lowering payments to shareholders is one way telecom groups are addressing concerns over debt as their cash flow declines. More could be on the line. Falling cash flows are bringing high debt levels across Europe's telecom groups into greater focus. Among the most indebted are Telefónica and Telecom Italia, where home-market revenue fell 9% and 4%, respectively, in their most recent quarters. Telefónica's estimated €20 billion ($26.5 billion) refinancing needs and Telecom Italia's €12 billion over the next three years make retaining investment-grade status crucial, notes Goldman Sachs. That remains a concern: Their ratings are only three and two notches, respectively, above high yield.

T-Mobile USA Reports Huge Customer Defections, Says It Will Launch LTE in 2013

Deutsche Telekom announced that T-Mobile USA will launch high-speed LTE service sometime next year, but noted that the most recent quarter was a brutal one for its US mobile business.

“For T-Mobile USA, the past year was characterized by significant challenges, particularly in the fourth quarter, following the market launch of the new Apple iPhone model by the three major national competitors in October,” T-Mobile said. In the fourth quarter alone, T-Mobile USA lost 802,000 contract customers. Revenue dropped 3.3 percent to $20.6 billion. The company is the last major U.S. carrier to announce LTE plans and it has been questioned whether it would be able to amass enough spectrum to offer the service. T-Mobile said it will use a combination of spectrum acquired from AT&T, a further $1.4 billion in additional investment and “refarmed frequencies” to launch LTE service. It also plans to continue its “challenger” brand strategy and more aggressively pursue business customers.

Apple’s big chance to ‘act different’ on labor

[Commentary] There’s been quite a bit of controversy swirling lately around iPhones and iPads — not about whether the products are good, or whether Google or Microsoft can beat Apple at its game. The questions, rather, have centered on just where Apple’s products come from and how they’re made.

This week, the ABC News program “Nightline” aired a report from inside factories at Foxconn, one of the largest contractors in China tasked with assembling the technology that Americans (and the rest of the world) can’t get enough of. It’s also the place where a spate of seemingly work-related suicides forced management to install “suicide nets” on buildings to stop workers from jumping to their deaths. While the ABC report didn’t shed a lot of new light on practices at the factory, it did raise some interesting points that most Americans are probably unaware of. For instance, did you know that it takes five days and 325 sets of hands to make a single iPad? Did you know that those hands belong to workers who get paid about $1.78 an hour and work 12-hour days?

The important question is -- what are we doing — as individuals, as governments — to enforce fair treatment around the world? Are Americans willing to pay more for an iPhone if it means fair treatment of workers? Would you be willing to wait longer to get the latest gadget if you knew it was humanely produced? If you didn’t have to worry that the work could drive someone to suicide? This isn’t an Apple problem, it’s an industry problem. More to the point, it’s a human rights problem, one that needs to be dealt with head-on.

WAMU management speaks out

WAMU management responds to allegations of former news director Jim Asendio:

“WAMU maintains a firewall between journalists and funders; journalists may not — and do not — discuss coverage planning with grant-making officials or individual donors. It is senior management’s responsibility to manage contacts for their respective divisions with funders. Any one-on-one, private contact between a non-management journalist and a funder has high potential for putting that journalist in an awkward position and communicating the wrong message to the funder, and there is no situation where this should be allowed to occur…. Allowing people to see the impact that their investment makes in our work is completely appropriate. However, the station does not permit crossing the line between a funder seeing that impact and a funder being allowed input into the planning process for coverage.”

The dispute boils down to just what constitutes a “firewall” violation. Asendio appears to believe that the alarm should sound whenever a WAMU journo gets close enough to a WAMU donor to smell her breath.

Innovation on agenda for 'technology mayor' Ed Lee

San Francisco Mayor Ed Lee laid out his "innovation portfolio" for 2012 during an industry awards ceremony, articulating his plan to harness technology to improve city services and reiterating his self-appointed role as the "Technology Mayor."

"I think there's a technical, local solution to three-fourths if not four-fifths of a lot of the issues we're facing," Mayor Lee said ahead of the TechFellow Awards in San Francisco. "We'll think through everything, try to see how people are innovating in the private sector, and ask how we can use that same spirit in the public sector." Mayor Lee and his chief innovation officer, Jay Nath, said they hope to employ online technology, mobile apps, so-called hackathons and more to make strides in economic development, community engagement and making San Francisco "smarter." One of the highest priority projects will be to build an online platform that streamlines the city's famously cumbersome and confusing process for setting up a business.

Monitoring Your Health With Mobile Devices

The smartphone will be a sensor that will help people take better control of their health by tracking it with increasing precision.

“The Creative Destruction of Medicine” lays out Dr. Eric Topol’s vision for how people will start running common medical tests, skipping office visits and sharing their data with people other than their physicians. Dr. Topol, a cardiologist at the Scripps Medical Institute, is already seeing signs of this as companies find ways to hook medical devices to the computing power of smartphones. Devices to measure blood pressure, monitor blood sugar, hear heartbeats and chart heart activity are already in the hands of patients. More are coming. He acknowledges that some doctors are skeptical of these devices. “Of course, the medical profession doesn’t like D.I.Y. anything,” he said. “There are some really progressive digital doctors who are recognizing the opportunities here for better care and prevention, but most are resistant to change.”

London no safer for all its CCTV cameras

London is considered the most spied-on city in the world, courtesy of its ubiquitous CCTV cameras, purportedly there to reduce crime. But according to a recent report, there's been little or no change in London's crime rates since they were more widely installed in the mid 1980s.

Privacy activists are worried that Britain will become the bleak totalitarian society George Orwell painted in his classic novel “1984,” where citizens were spied on and personal freedom sacrificed for the benefit of an all-powerful state. In the report released this week, civil rights group Big Brother Watch revealed that local councils spent £515 million (about $807 million) on new cameras over the past four years, the equivalent of 4,121 police officers. Birmingham, England’s second most populous city, has spent the most: £14.3 million ($22 million) over past four years, followed by Westminster at £11.8 million ($18.5 million), and Leeds at £8.7 million ($13.6 million). BBW estimates there are now some 51,000 police-run cameras watching British citizens in urban areas, not including private cameras or cameras situated in other public buildings like train stations or bus depots.

KT reviewing network fees on Youtube, Internet TVs

South Korea's top Internet provider, KT Corp plans to charge data-heavy content providers such as Google's YouTube and Internet-enabled TV service operators to subsidize costly network upgrades, a KT executive said.

KT fired its first salvo on "free riding" Internet services earlier this month by blocking access to certain TV applications offered by Samsung Electronics, the top manufacturer of Internet TVs, with the burgeoning TV industry set to generate profits from advertising and applications at the expense of heavy investments by network operators. "We want to set a rule that we can equally apply to every platform operator that offers data-heavy content as those services threaten to black out our network. They should pay for using our network," said Kim Taehwan, vice president of KT's smart network policy task force.

Barney Rosset Defied Censors, Making Racy a Literary Staple

Barney Rosset, the flamboyant, provocative publisher who helped change the course of publishing in the United States, bringing masters like Samuel Beckett to Americans’ attention under his Grove Press imprint and winning celebrated First Amendment slugfests against censorship, died in Manhattan. He was 89.

Over a long career Mr. Rosset championed Beat poets, French Surrealists, German Expressionists and dramatists of the absurd, helping to bring them all to prominence. Besides publishing Beckett, he brought early exposure to European writers like Eugène Ionesco and Jean Genet and gave intellectual ammunition to the New Left by publishing Che Guevara, Ho Chi Minh and “The Autobiography of Malcolm X.” Most of all, beginning in high school, when he published a mimeographed journal titled “The Anti-Everything,” Mr. Rosset, slightly built and sometimes irascible, savored a fight. He defied censors in the 1960s by publishing D. H. Lawrence’s “Lady Chatterley’s Lover” and Henry Miller’s “Tropic of Cancer,” ultimately winning legal victories that opened the door to sexually provocative language and subject matter in literature published in the United States. He did the same thing on movie screens by importing the sexually frank Swedish film “I Am Curious (Yellow).”

Benton

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