New Beginnings - MediaBizzBuzz.com for January 7, 2008

NEW BEGINNINGS

Just one week into 2008 and ossified business models threaten to be upended in several domains. In brief: With SonyBMG caving as the last of the four majors holding onto DRM, the music industry just might be resuscitated. Likewise, the standstill between HD DVD and Blu-Ray formats suddenly tipped in favor of Blu-Ray this past Friday at CES with Warner's surprise embrace of the format. And while Steve Jobs' AppleTV had nowhere near the success of the iPhone, with Netflix and Echostar's Sling Media each entering the fray, the time for seamless digital downloading of content may have finally come.

Name That Tune
Digital downloading of music was a rare ray of sunshine in media performance in 2007. While CD sales of music continue to crater, DVD sales are in decline, and box office is flat (but for the three blockbusters to Spiderman, Shrek, and Bourne), online music sales are up close to 45%. True, singles are wholly preferred to albums, but the public is voting with its wallet. Just ask Radiohead. After the year saw EMI, Vivendi's Universal Music Group, and Warner throw in the towel, BusinessWeek reports that SonyBMG will begin selling DRM-free music on Amazon. Wired speculates what new-fangled revenue models might be on tap with this changing of the guard.

TV Sheds Its Analog Skin
There's been more than a modicum of anxiety, if not at Y2K pitch, that we're unprepared for the February 2009 transition to digital TV. It would seem that we're wrong. In less than 40 hours after the National Telecommunications & Information Administration opened its virtual doors, there have been one MILLION requests for the coupon giveaway designed to defray the cost of digital adapters for the 13% of households who get their TV over the air. And just when it seemed that the contest between HD DVD and Blu-Ray might be a war without end, Warner's decision to abandon Toshiba's HD DVD for Blu-Ray(giving the latter five of the seven studios) puts the rival format on Death Watch. 

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Now, while Intel's Viiv never caught on, and the reception to AppleTV has been cool, it looks like this will be the long-awaited year of convergence. After outlasting Goliath's Walmart and Blockbuster, Netflix is finally prepared to move past the adored red envelope. It announced the first of its partnerships last week with South Korea's LG Electronics, which will offer VOD of the Long Tail company's 6,000 titles on set-top boxes coming in Q2. CEO Hastings was quick to add that "We want to be integrated on every Internet-connected device, game system, high-definition DVD player and dedicated Internet set-top box." LG continues to broaden its market share in the US where it will also introduce a proprietary format that will allow broadcasters to easily -- and inexpensively -- port TV content to mobiles. Its Mobile Pedestrian Handheld (MPH) format will be formally introduced this week at CES. Also at the Vegas conference Sling Media had a twofer: announcing plans to offers software to watch TV on RIM's Blackberry smartphones and that it would be debuting the PRO-HD, which would wirelessly move HD content (at 1080i) from one's TV to a networked PC or via the Internet.

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The Writers Strike became newsworthy again last week. Hirsute Late Night hosts shambled back to their desks - with Leno picketed (and Huckabee accused of being a scab), while Letterman's Worldwide Pants negotiated an interim agreement and returned with his full writing staff. That didn't stop viewers from choosing Jay over Dave. But Letterman's standalone agreement may have set a tone. By week's end it was reported that Tom Cruise's United Artists (and not parent MGM) was likewise in negotiation for an interim agreement. An ex-WGA lawyer speculates that either The Weinstein Company (TWC) or Lionsgate might follow suit. That said, next Sunday's Golden Globes remains up in the air. SAG has asked its membership not to appear, WGA has agreed not to picket, if the event is nottelecast on NBC. That, and the DGA has just begun its negotiations in view of a June deadline.

Trendwatch: People-Powered Search
Perhaps its a visceral reaction to the ubiquity of Google, but in the last six months there have been a roster of startups that aren't based on algorithms, but rather, human-assisted search. Jason Calacanis started Mahalo last summer; as of December he was getting 2.4 million pageviews a month. This week Jimmy Wales' WikiaSearch opens to public beta. And Hoosier-based ChaCha unveiled its mobile text-based search last week. Simply text "242242" and a human "guide" will answer your queries lickety split. The service is free in its trial phase. Even Amazon has a presence here. Its Askville will shortly morph into Questville, which will combine search with some elements of MMO's. Looks like Bezos' contact with Second Life has gotten in his bones.

Bedside Reading
JPMorgan's Nothing but Net report, despite the threat of a recession, makes a 312-page case for the continued growth in technology, and consequently robust e-commerce and online ad spending. Here's the full PDF.
 
Place Your Bets
Prediction market InTrade.com had it right on both counts for the Iowa Caucus.  Riffing off of this, Silicon Alley Insider has its own rudimentary futures market for next week's MacWorld. Among the bets that appear to be even money: Apple's iTunes enters into the movie rental biz (Financial Times asserts that it has Fox on tap for content.) Leave it to Jobs to overshadow CES -- and Gates!