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And The Lay-Offs Continue

Another week, another round of lay-offs.   This time ReelzChannel has dropped more than 40 people from its Los Angeles studio and cancelled its signature show, “Dailies,” reports ContentAgenda.  CBS Interative joined the fray as well, passing-out pink slips at its various entities including CNET, CBS.com, CBSNews,com, CBSSports.com, BNET, GameSpot, TV.com, last.fm, and CHOW.  Though CBS would not report the actual number, TechCrunch puts it at about 275.

In addition, OnlineMediaDaily reports that Digitas, the digital unit of Publicis Groupe, is laying off 2% of its approximately 2,100 employees in the U.S.  Meanwhile NPR is laying-off about 7% of its staff or 64 employees and cancelling two programs, reports PaidContent.  And, Netflix has let go of 50 customer service techs, citing the better customer experience of using Silverlight to stream its movies, reports DigitalMediaWire. 

PaidContent also reported that Major League Advanced Media let go of 20 employees this week while DivX cut 21 people, reports TechCrunch.

The big news in digital media came from Yahoo which laid-off about 1,500 workers and shut 6 European offices.  The PaidContent article is here.  Though Sony topped it with 8,000 pink slips in its electronics workforce, as reported in DigitalMediaWire.

Meanwhile TechCrunch reports that total tech lay-offs have topped 100,000.

Digital Copies Popular With Consumers

Digital copies of movies, available on certain DVDs or available as a download when the DVD is purchased, are popular with consumers, reports Video Business, citing an NPD Group survey.  The files are typically in the Windows Media Video (WMV) format and/or are compatible with iPods and are particularly useful to watch the movie on a portable device.  Indeed, three out of four DVD and Blu-ray buyers who watch movies or TV shows on portable devices say they’re interested in buying physical discs holding a digital copy.  NPG also reported that when given a choice, 79% of survey respondents said they would rather transfer files from discs than download the content from the Internet.  And, users also overwhelmingly say their digital copy experience is positive, as 80% of respondents who’ve bought titles with this feature say they would want to buy subsequent digital-copy-enhanced titles.

Mobile Ad Rates Dropping

Mobile CPMs, or the cost to reach 1,000 consumers, now average about $15 compared with the average earlier this year of $20 to $25 and $40 to $50 last year, reports Advertising Age.  The economy isn’t the only factor at work here: Also in play is the onslaught of inventory coming online as more brands beef up their presence in wireless; the proliferation of handset applications; and mobile applications for social media. 

Still, targeted placement on a wireless provider’s deck that accesses the mobile web still commands a premium. Pricing for high-traffic, category-leading weather, news and sports channels has stayed firm, and endemic sites are still pulling in $14 to $16.  Applications that drill deep on demographics and location can fetch as high as the mid-$30s, ad executives said. 

But branded players don’t always demand high CPMs. One advertiser said a major media site offered him $2 CPM buys while others say social-media sites now offering up oceans of inventory are likely to be pricing their CPMs below $5. 

Still, mobile impressions are costlier than online because the relative lack of clutter in the medium helps to deliver better returns: In mobile, the click-through rate is about 1.5% vs.0.15% for online.

Video Game Sales Robust

The Los Angeles Times reports that the video game industry posted a 10% sales increase in the U.S. last month to $2.91 billion, up from $2.64 billion in November 2007, according to market research firm NPD Group.  For the first 11 months of the year, dollar sales of game software grew 31%, while hardware grew 14%. 

DVD sales, however, have not done as well.  The New Tork Times reported last month that DVD sales are down by about 4 percent for the year, citing figures from Warner Brothers, with most of that weakness coming in October (November figures are not yet available).  The same article noted, however, that Nielsen VideoScan reported a 9 percent drop in overall DVD sales during the third quarter with a 22 percent decline in sales of higher-priced new titles, though its data does not include results at Wal-Mart.

SAG Strike Vote Set For January 2

The SAG leadership decided this week to send a strike authorization vote to the membership on January 2.  Seventy-five percent of the 120,000 members will need to vote in favor in order to authorize the strike.  For many reasons, a strike would be a rather stupid move.  The question is, what will the membership do?  And, how will the many members who do not have regular work vote?  Does a strike negatively affect them?  NAB365 has a good summary of the issues here.  Meanwhile, Variety reports that the leadership has admitted that if the membership does not vote for a strike authorization, the guild will likely have to accept the studios’ offer that is currently on the table.

Mobile Video on the Rise

So says this article in CED Magazine quoting analysis by mobile video provider QuickPlay Media.  Video downloads increased by more than 87 percent over the previous quarter while average download per user was up 42 percent a month.  The video streams, which include live content as well as clips consumers can view in near real time, grew by more than 27 percent while average streams per user increased by 12 percent. Average stream duration in the third quarter was two minutes, 47 seconds.  No mention of profitability for the video providers, however.  See this article regarding the problems making money from mobile video usage in South Korea.

Making a Living on YouTube Videos

Apparently some people are making a living creating videos and distributing them on YouTube, as reported in this New York Times article.  The Times reports on two people earning between $100,000 and $240,000 a year from posting videos on YouTube.  Not really a surprise that a few individuals with no overhead can create videos that people want to watch, attract advertisers a make a living.  The real question is, can full fledged compies (even small start-ups) do so?  See this OnlineMediaDaily article for a discussion about the challenges facing companies producing content for the web or this Broadcasting & Cable article regarding the same.

U.S. Army Invades Second Life

The U.S. Army has announced it will begin hosting two islands within Second Life devoted to recruitment.

The Army Second Life Island will serve as a kind of information hub for potential recruitment candidates, family members and other influencers, and for those simply wanting to know more about life as a soldier in a relaxed and obligation-free environment. Army recruiters will also be available to answer questions about career opportunities in the Army. GenerationWow has the details.

Starz, Disney Settle Internet Video Lawsuit

In 2007 Starz sued Disney alleging that Disney violated the terms of their 1993 and 1999 agreements by making movies available on an electronic sell-through (EST) basis online via outlets such as iTunes and  CinemaNow.   Starz claimed that the agreements gave Starz the exclusive “television” rights which, contractually, included the Internet.  Starz acknowledged that Disney had the right to distribute movies on a video-on-demand (VOD) and pay-per-view (PPV) basis but claimed that EST, because the user was not limited by time or number of viewings, was not a VOD or PPV transaction. 

The suit has now been settled as reports Multichannel News.  No details have been released but Disney has not removed EST offerings of their movies from iTunes, CinemaNow, etc. so presumably the settlement allows Disney to continue EST distribution of its movies.

Pay TV agreements like the Disney-Starz deal are a significant factor with respect to Internet distribution of studio films.  Those deals, for example, are the reason that most Internet video rentals (or VOD) transactions are limited to a 24 hour viewing period.  Anything beyond 24 hours is deemed, in the agreements, to be a “subscription” and the pay TV distributors (Starz, HBO, Showtime) have the exclusive subscription rights.

While this dispute was not about the definition of “subscription” or the ability to make online rentals available for more than 24 hours, it was about the studio’s ability to make films available on an EST basis.  Had the case gone to trial and been decided in favor of Starz, Disney (and presumably Sony) would not be able to make their films available on an EST basis, at least during Starz exclusive periods, thus seriously hampering the online distribution business.  And, if the Starz agreements are different from the HBO/Showtime agreements in this regard, putting Disney (and perhaps Sony) at a competitive disadvantage with respect to online distribution of their films. 

Starz reasoning in the original case is nicely laid out in this press release of theirs at the time the suit was filed or click here for the Starz complaint filed in 2007.