October 2015

YouTube, the world’s biggest video site, is readying a slate of programming that will only be available to people who join its upcoming subscription services. YouTube will announce some of that programming, which it is helping to fund, on Oct 21. Industry sources say the programming is the product of an initiative the site announced in 2014, when YouTube said it would “fund new content from some of our top creators." At the time, YouTube didn’t say that stuff it was funding would be placed behind a paywall. But industry sources say the site now intends to use at least some of the content it is bankrolling as a bonus for its premium subscription service, which will also include features like ad-free videos.

YouTube will continue to operate a free, ad-supported version of the site, and has said that all of the videos that appear on the free site will be available on its paid version -- which is why YouTube is insisting that all video makers who make money from YouTube ads need to participate in the subscription service as well.

Chinese government hackers have attempted in the past few weeks to penetrate the networks of US companies to steal their secrets despite a pledge by Chinese President Xi Jinping that they would not do so. Chinese hackers have targeted at least seven US companies since President Xi vowed in September that his country would not conduct economic cyberespionage -- the theft of trade secrets and intellectual property for the benefit of the nation’s industries.

In the three weeks since President Xi left Washington -- including the day after he left, on Sept. 26 -- hackers linked to the Chinese government have attempted to gain access to tech and pharmaceutical companies’ networks, said Dmitri Alperovitch, CrowdStrike co-founder and chief technology officer, who released a report on the issue. The efforts continue to the present, sometimes several times a day, and appear to be distinct from traditional intelligence gathering, which is not covered by President Xi’s pledge, Alperovitch noted. The US intelligence community is also seeing continued signs of economic cyberespionage by Chinese hackers, apparently.

Investors will get fresh insight into old telecommunication’s new media strategies when Verizon and AT&T report quarterly results. The two companies have long resembled each other but they are on different paths to find growth in the video business. AT&T made a bet on television with its $49 billion purchase of DirecTV in July that vaulted it to become the largest pay-TV company in the U.S. Verizon is building out a mobile video service, costing at least a few hundred million dollars, called go90 to target millennials. While AT&T pursues a satellite-based business, Verizon is sticking to its knitting by focusing on wireless.

Chief Executive Lowell McAdam has ruled out an AT&T-like strategy saying the company isn’t interested in buying the television business of DirecTV’s rival Dish Network. Instead, Verizon recently launched its own stand-alone wireless video service -- which was preceded by a number of deals including the $4.4 billion acquisition of AOL. Wall Street is eager to hear any adoption and usage details, along with plans to get more content on the app when Verizon reports its third-quarter results on Oct 20. “For the first time we are seeing a divergence in strategy,” says Barclays analyst Amir Rozwadowski. Wall Street, he says, is still learning about their tactics and the companies’ relevant milestones along the way. “We are trying to distill what is success,” he says. Both strategies have been hit with questions on whether the hulking telecom companies possess the nimbleness needed to navigate rapidly shifting video-consumption habits.