Archive for July, 2010

Gannett and Yahoo announce local ad partnership

July 16th, 2010

Media giant Gannett today announced a local advertising partnership with Yahoo. The partnership aims to combine Gannett’s local media brands, sales capabilities and audience with Yahoo’s advertising experience and technology.

As part of the agreement, Gannett’s 81 local publishing organizations and seven of its Broadcasting Division sites will sell Yahoo ads as part of their inventory solution.

The partnership aims to give local advertisers better reach and targeting capabilities based on geography, demographics and interests. Gannet will tap into Yahoo’s targeting and ad ordering capabilities.

According to a press release issued by the two organizations, Gannett’s local media reach will cover as much as 80 percent of the digital audience in each market.

“This partnership builds on the strength of Gannett’s growing digital business and powerful local brands,” Gracia Martore said in a press release. Martore is the president, chief operating officer and chief financial officer at Gannett. “Working with Yahoo will allow us to offer targeted advertising messages with unmatched local audience reach.”

The agreement also positions Yahoo to get select local content from Gannett.

“Local advertising continues to be an important area of focus for us, and Yahoo! is committed to helping local businesses reach high quality target audiences,” said Hilary Schneider, executive vice president, Yahoo! Americas. “This partnership significantly expands our local offering and gives advertisers the technology and scale they need to reach online consumers.”

A phased rollout will begin this quarter and will continue into 2011.

Survey: iTunes users have ‘strong interest’ in paid subscriptions

July 14th, 2010

In the world of music, iTunes-style micropayments have emerged as the predominant method of paying for music online today. However, according to a new survey, people may also be willing to pay a monthly subscription fee to access their music online.

According to a survey released today by marketing researcher NPD Group, as many as seven or eight million American iTunes users say they would pay a minimum $10 monthly subscription fee if they could stream or access their music libraries online from multiple devices.

NPD estimates there are 50 million American iTunes users and says a subscription model that offers iTunes users free access to their own music libraries online could attract as many as 13 to 15 million subscribers.

If Apple were to generate subscription revenue in addition to its a-la-carte sales, it could be a big win for the company’s bottom line. Morgan Stanley Internet analyst Mary Meeker estimates iTunes accounts for about 10 percent of Apple’s overall revenue.

“After the service’s launch, user numbers could conceivably rise substantially, as they upgrade to newer connected devices and actually experience the benefits of cloud-based music,” Russ Crupnick, vice president and senior entertainment analyst for The NPD Group, said in a press release. “If the consumers who indicated strong interest in a paid subscription actually adopted one of those services at $10 per month, the market opportunity is close to $1 billion in the first year, which is roughly two-thirds the revenue garnered by the current pay-per-download model.”

NPD’s “iTunes Usage Report” surveyed Apple iTunes, iPod, iPhone, and iPod Touch users to find out how they would feel about music subscription-models. More than 25 percent of respondents expressed a strong interest in a free cloud-based option and many said they would pay to access their music from multiple platforms.

“We don’t yet know what, if any, effect these services might have on the traditional pay-per-download music model, or whether consumers will ultimately spend more on digital music overall, if or when any of these options eventually rolls out,” Crupnick said.

The findings are based on a May 2010 survey of 3,862 members of NPD’s online panel.

Consumer Reports says it won’t recommend iPhone 4

July 12th, 2010
According to a blog printed today by Consumer Reports, the Apple iPhone 4 is not a recommended buy. Despite strong sales of the phone, Consumer Reports says reception problems are real.

Apple sold 1.7 million iPhone 4 units in the first three days of sales, making it the most successful product launch in Apple’s history.

But when news surfaced about iPhone 4 reception issues, Apple went into defence mode and denied claims of widespread problems.

According to early iPhone 4 users, reception can drop when the phone is held in certain ways. Apple CEO Steve Jobs responded directly to some customer criticism, saying “Just avoid holding it in this way.”

Apple later issued a more formal statement in response to growing media reports of reception problems, saying:

“Gripping any phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases.”
Now, popular review site Consumer Reports is confirming the iPhone 4 does suffer from a defect that can affect reception.

Consumer Reports‘ engineers have just completed testing the iPhone 4, and have confirmed that there is a problem with its reception,” the publication states in a new blog post. “When your finger or hand touches a spot on the phone’s lower left side—an easy thing, especially for lefties—the signal can significantly degrade enough to cause you to lose your connection altogether if you’re in an area with a weak signal. Due to this problem, we can’t recommend the iPhone 4.”

Consumer Reports says it tested three iPhone 4 devices purchased from three separate retailers in New York. In a controlled environment not susceptible to outside interference from radio signals, Consumer Reports says the iPhone 3GS and Palm Pre did not suffer from signal-loss problems affecting the iPhone 4.

“Our findings call into question the recent claim by Apple that the iPhone 4′s signal-strength issues were largely an optical illusion caused by faulty software that ‘mistakenly displays 2 more bars than it should for a given signal strength’,” Consumer Reports writes.

Consumer Reports testing also indicated AT&T’s network may not be the primary suspect for reception problems. The signal issue is the reason Consumer Reports does not give a “recommended” rating for the iPhone 4.

To fix the issue, the publication says, users need to cover the antenna gap with a piece of duct tape.

“Apple needs to come up with a permanent—and free—fix for the antenna problem before we can recommend the iPhone 4,” Consumer Reports says.

NTP sues Apple, Google, HTC, LG, Microsoft, Motorola over email patents

July 9th, 2010

The company that successfully sued Research in Motion for $612.5 million in 2006 is back in the patent lawsuit game. NTP has filed suit against Apple, Google, HTC, LG, Microsoft and Motorola over claims the companies are infringing on an email patent.

Patent-holding company NTP filed the lawsuits late Thursday in a federal district court in Richmond, VA. According to a news release issued by NTP, the big cellphone makers are illegally using its patented wireless email technology.

“Use of NTP’s intellectual property without a license is just plain unfair to NTP and its licensees,” Donald E. Stout, NTP’s co-founder, said in the press release. “Unfortunately, litigation is our only means of ensuring the inventor of the fundamental technology on which wireless email is based, Tom Campana, and NTP shareholders are recognized, and are fairly and reasonably compensated for their innovative work and investment. We took the necessary action to protect our intellectual property.”

In 2006 NTP sued Research in Motion (RIM), makers of the BlackBerry, for $612.5 million. RIM settled after the long-running lawsuit threatened to shut down the company’s wireless e-mail service. Engineer and inventor Thomas J. Campana Jr., and lawyer Donald E. Stout founded NTP in 1992. Campana died in 2004.

The company has patents ranging from wireless email to the design of radio antennas on mobile devices.

Critics say NTP is nothing but a patent troll, producing no product or service other than demanding other companies license its patents.

According to the press release, the RIM lawsuit led to a re-examination of NTP’s patents by the U.S. Patent and Trademark Office (USPTO). In December 2009, the release says, the USPTO Board of Patent Appeals (USPTO Board) ruled 67 of NTP’s patent claims in four patents are valid, including three claims that RIM was found to have infringed.

Infringement of a single claim is all that is needed for a patent to be deemed violated.

“The filing of suit today is necessary to ensure that those companies who are infringing NTP’s patents will be required to pay a licensing fee,” Stout said. “In view of the USPTO Board’s ruling, the debate over whether Mr. Campana was an originator in the field of wireless email is over. No patents in U.S. history have received as much scrutiny as NTP’s patents. We are confident the USPTO’s rejections, which are on appeal before the U.S. Court of Appeals for the Federal Circuit, will be overturned.”

The payload for winning the lawsuits is still not clear, but some experts say it could be hundreds of millions of dollars. According to the New York Times, however, “It could be far less because technology and product designs change quickly and recent smartphone e-mail systems may well have been designed with an eye toward avoiding NTP’s patents.”

NTP has licensing agreements with Research in Motion Limited, Good Technology, Inc., Nokia Inc., and Visto Corporation.

- Credit: Steve Jobs photo by Matt Yohe (Source)

Why Time Inc.’s paywall strategy works, and why other publishers should pay attention

July 8th, 2010

In the media landscape today, many online publishers are toying with the idea of paywalls whereby they ask readers to pay to consume content, or they give them a few pages free before asking readers to fork over cash to continue reading.

The problem is consumers have become accustomed to getting content online for free. The biggest challenge for paywalls has always been: Why would a consumer pay to read content on one website if it’s free elsewhere?

So if you’re a publisher who suddenly implements a paywall, you’re almost definitely going to see a drop in readership. Furthermore, I believe there’s a long-term hit to your online brand. That is, of course, if you follow traditional paywall-building tactics. Time Inc.’s strategy, I think, is much smarter.

First, let me say Time‘s paywall strategy is not new. For those of you who are not familiar with the announcement, MediaPost describes it:

“The full versions of print content are available only to print subscribers or people who purchase the $4.99 iPad edition of the magazine; other online visitors see an abridged or abbreviated version of the print content, with a note explaining the subscription requirement.”

Sounds like a typical paywall, right? It is, except there is another element to it. As All Things D reports, Time has a two-pronged approach when it comes to its content. As Time Inc. spokeswoman Dawn Bridges told All Things D:

“We’ve said for awhile that increasingly we’ll move content from the print (and now iPad) versions of our titles off of the web. With People, we haven’t had hardly any content from the magazine on the web for a long time. Our strategy is to use the web for breaking news and ‘commodity’ type of news; (news events of any type, stock prices, sports scores) and keep (most of) the features and longer analysis for the print publication and iPad versions.”

Time‘s strategy is not the typical paywall where content is put behind bars. It’s a strategy that offers something to everyone, and it’s clearly defined. The strategy, combined with clear communication about what’s being offered, is more likely to be understood and accepted by consumers.

Time is making an important distinction about what to expect in print and what to expect online. Having breaking news, or commodity information online allows Time to address the needs of online consumers looking for free information. It also gives the company the opportunity to up-sell readers to the printed or iPad edition.

This up-sell (read: Freemium) model is not new, but Time‘s spokesperson has done a good job of very clearly defining the company’s goals. In the world of paywalls, where consumers are left confused about what’s free and what’s not, clear communication should translate into actual sales.

From both a sales and brand-reputation standpoint, Time‘s paywall strategy is far more effective than other paywall experiments because it doesn’t leave the consumer frustrated or disappointed. In many other paywall experiments, the reader visits the site and can consume a few pages per day before they’re hit with a big fat stop sign telling them they need to pay to continue browsing. That strategy won’t work unless the publisher has a very strong brand, or highly specialized or niche content. Readers who are slapped in the face with a stop sign will likely go elsewhere and not return to the publication if they learn they can’t view any content. It’s a lost opportunity for the publisher.

In Time‘s case, however, there is content that comes without a paywall, and it’s more than just a few pages. Time will provide the daily digestible news on its website for all readers while at the same time offer more for those who care to purchase it. This small difference has a tremendous impact in how the reader interacts with the brand; instead of being told to pay to keep consuming, Time directs people to content they can consume freely while at the same time offering additional info for those who want to fill up their news plate.

Assuming Time provides enough free content, its website traffic shouldn’t drop off a cliff and it gains more opportunity to convert website visitors into paid subscribers. If it places the right buttons in the right places and clearly communicates its offerings to consumers, it should be able to convert unpaid visitors into paid iPad or print subscribers.

This is the new world of freemium paywalls, and it’s incredibly simple. It’s what online publishing should have been 10 years ago as publishers struggled to figure out how to bring their brands online. The Internet is different than print (or iPad/eBook consuming), and thus needs to be treated differently from a business perspective.

Time‘s strategy, coupled with clear communication about what it offers should translate into higher conversion rates than existing paywall experiments where the reader is told to pay up or get out.