September 2013

How Netflix’s Bet on Originals Is Already Paying Off

Netflix original series like “House of Cards” and “Orange Is the New Black” aren’t great for attracting new subscribers — but they’ve become a key way for the No. 1 streaming service to retain them.

That’s according to a new consumer survey by RBC Capital Markets. In a survey of 1,078 US Internet users, the Wall Street firm found that 43% of Netflix customers said original content was a “moderately” to “extremely” important factor influencing their decision to keep the service. In addition, 64% of Netflix subs said they had viewed original content over the last three months, with approximately 20% of those surveyed saying original content made up at least half of their Netflix viewing, according to the RBC study. The survey results “show tentative evidence that original content is a customer retention tool…or an anticipatory anti-churn factor,” RBC analyst Mark Mahaney and associate Brian Peak wrote in the report. “And this is a new element to Netflix that may not be adequately appreciated by the financial markets.”

Mack Tapped for Homeland Security Civil Rights Post

President Barack Obama announced his intent to appoint Megan H. Mack as Officer for Civil Rights and Civil Liberties at the Department of Homeland Security.

She is the Director of the American Bar Association Commission on Immigration, a position she has held since 2009. Previously, Mack was the Associate Director of the American Bar Association Commission on Immigration, from 2005 to 2009. From 2002 to 2005, she was the Supervisor of Legal Services for Hogar Hispano, Catholic Charities Diocese of Arlington in Falls Church, VA. From 2000 to 2002, she was a Litigation Associate at Foley Hoag LLP in Boston, MA. Mack served as a Law Clerk to Judge Fred I. Parker in the US Court of Appeals for the Second Circuit in Burlington, VT from 1999 to 2000. She received a BA from Brown University, an MA from the University of Chicago, and a JD from the University of Michigan Law School.

September 12, 2013
2:00-3:00 p.m. EST
via phone
To register: https://docs.google.com/forms/d/1eawsZCaiEVT2bSTwHRywm3REHNcKrWbdzF0FgWf...

Join Representative Doris Matsui (D. CA-6), California Public Utilities Commissioner Catherine J.K. Sandoval, advocates, and experts for a national conference call to discuss the importance of protecting and expanding Lifeline. Speakers will discuss the most recent attacks on the program and how you can take action to protect and expand this essential service. There will be time for Q&A with speakers at the end of the call.

Presenters

Keynote Address: Representative Doris Matsui, D. CA-6
Edyael Casaperalta, Program and Research Associate, Center for Rural Strategies
Commissioner Catherine J.K. Sandoval, California Public Utilities Commission
Professor David Super, Georgetown Law School
Jessica González, Vice President, Policy & Legal Affairs, National Hispanic Media Coalition

Moderated by Nancy Zirkin, Executive Vice President, The Leadership Conference on Civil and Human Rights

Read more about A National Call on Protecting and Expanding the Lifeline Program

Subcommittee on Communications and Technology
House Commerce Committee
Wednesday, September 11
2 p.m.
http://energycommerce.house.gov/hearing/innovation-versus-regulation-vid...

Increased competition and evolving technology have made for a more robust video marketplace but current laws and regulations vary depending on the technology used for delivery. The hearing is an extension of the ongoing work of the subcommittee to examine the Satellite Television Extension and Localism Act (STELA), portions of which are set to sunset on December 31, 2014. Previously the subcommittee has examined whether STELA still serves an important function or if it is out of step with today’s video marketplace and are discussing whether Congress should reauthorize the law as is, allow it to lapse, or revise it.

Read more about Innovation Versus Regulation in the Video Marketplace

Verizon Eats Itself (And Why It Matters)

[Commentary] Prior to the Verizon buyout of Vodafone, shared ownership of Verizon Wireless meant Verizon couldn't fully claim its cash and profit. Now Verizon can. Owning Verizon Wireless will mean much higher cash flows for Verizon. But if margins fall and growth falters, $130 billion could look like a very high price indeed. Many question if the US wireless market – with its slowed growth and ramped up competition – may have already peaked. Verizon is betting the answer is no; Vodafone, on the other hand, seems to believe that the value of its stake did not have much further to rise. The next step in realizing Verizon’s vision, whatever it is, is gaining regulatory approval for the deal. Public Knowledge Senior Vice President Harold Feld said we should think of this FCC review “as more like a change of address notification than as a full on application” since Verizon already controlled the wireless company.

Judge lays down Apple’s punishment in e-books case. It’s largely in line with what the feds wanted

Judge Denise Cote issued an injunction against Apple.

The Department of Justice will be happy, because the final injunction contains a lot of what it had asked for. The injunction, which is set to go into place in 30 days, will last for five years — but the court can extend it for “one or more one-year periods” after that, either on its own or at the request of the DOJ or the states. Apple may seek a stay of the injunction pending its appeal. The injunction forbids Apple from enforcing most-favored-nation clauses in any e-book publishing contracts for five years, and also forbids the company from entering into any book publishing contracts that contain them for five years. Apple had wanted this provision to be less broad, relating only to MFN clauses with the five publishers in the case who have already settled. Instead, it applies to all publishers. The DOJ had wanted to change Apple’s in-app purchase policies, and had wanted to force Apple to allow competing e-book retailers — like Amazon — to sell e-books through their apps without taking its customary 30 percent commission. Luckily for Apple, none of that is included in the final injunction.

Washington Post Magazine struggles with advertising relationship

[Commentary] The Washington Post Magazine’s Aug. 11 Education Issue did not include a couple of articles because objections from the business side of the Washington Post.

“They didn’t feel it was appropriate,” says Lynn Medford, the magazine’s top editor. “They were adamant about it.” What’s noteworthy about the adjustments to the magazine’s education issue is the pre-publication intervention by the advertising folks at the Post. “They have their opinions, they express their opinions in the same ways their colleagues down here [in editorial] do, and sometimes I listen and sometimes I don’t,” says Medford. There would be no Washington Post Magazine without its revenue issues. Whether it’s education, home and design, travel or dining, this cluster of themed publications accounts for the “bulk” of magazine revenues, to use Medford’s characterization. The news industry has long since made peace with the wink-wink corruption involved in producing these money-makers. Conceived to be friendly to the relevant industry, they’re often filled with content that makes for pleasant adjacencies to advertisements from companies with a stake in the topics at hand. Editors know not get too edgy with their story choices, lest the business side lose all credibility with their accounts and the publication move closer to bankruptcy.

The case supporting the NSA's PRISM decrypting

A consensus is gelling that the National Security Agency -- in using brute-force password hacking techniques, cracking into Virtual Private Networks and Secure Sockets Layer services, and taking steps to weaken certain inherently weak encryption protocols -- is simply doing what the NSA has always done, and was, in fact, created to do: keep the US competitive in the spy-vs-spy world. Dave Jevans, chief technology officer of mobile security firm Marble Security, says it's possible that with the NSA's multi-billion dollar budget and tens of thousands of employees, the agency may have discovered mathematical techniques to weaken certain cryptographic systems. "However, such fundamental mathematical research doesn't constitute back doors or other covert agendas," Jevans says. "Perhaps the NSA has discovered ways to crack these systems that have not been discovered by the smartest researchers in academia and industry. But there's no law against clever mathematicians creating new encryption schemes."

FCC Heads to Court to Defend Network Neutrality Rules

Whether or not the Federal Communications Commission (FCC) has the authority to regulate the Internet comes back in the spotlight when the DC Circuit Court of Appeals hears oral arguments in Verizon v. FCC. How the court decides could have profound implications for the Internet: whether Internet service providers will be prohibited from slowing down or blocking legal content.

"The case is ostensibly about net neutrality, but what is really at stake is the FCC's jurisdiction over all things broadband," wrote Craig Moffett, senior analyst with MoffettNathanson Research. The FCC has already been slapped down once by the same court for trying to assert authority to regulate the Internet in the Comcast/BitTorrent case. If the court strikes down the rules, the FCC would have to either appeal or bank on Congress giving it new authority. The court could also just send the FCC back to the drawing boards to craft better rules.

Benton

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