August 2011

Pay-TV Subscriber Losses Felt at Cablevision, Dish

Declining numbers of video subscribers undercut the improved bottom lines at Cablevision Systems and Dish Network, a reminder of how the pay-TV industry faces increased competition for a stagnant number of customers in a weak economy. For years, cable operators have been losing video subscribers for three reasons: new competition from telecom companies expanding into video; customers opting to cut the cord and watch video on the Web; and lower home sales, which reduce new-customer cable installations. Now, the drops are accelerating.

Legal battles in secret world of set-top boxes

Before a phone-hacking scandal forced Rupert Murdoch to close the News of the World or his News America Marketing division was accused of hacking into computers at Floorgraphics, a US rival, another News Corp offshoot faced allegations that it had hacked into competitors’ security systems, costing them more than $2 billion.

Lawsuits since 2002 from several pay-TV groups claimed that NDS, a digital technology company that was at the time about 80 per cent owned by News Corp, cracked the codes of rivals’ smartcards that are used to secure pay-TV set-top boxes, then released them to pirates, who flooded the market with counterfeit cards. The lawsuits were filed by Canal Plus Technologies, a division of the French pay-TV operator Canal Plus, Echostar and DirecTV in the US and Sogecable, the Spanish pay-TV company.

Google Lost U.S. Search Share to Yahoo in July

Google lost share among US online searches in July while Yahoo gained, researcher ComScore said. Google’s share of the U.S. search market declined to 65.1 percent last month from 65.5 percent in June, while Yahoo’s rose to 16.1 percent from 15.9 percent. Microsoft was unchanged at 14.4 percent.

'Playboy Club': Gloria Steinem Advocates Boycott of NBC Series

Women's rights leader Gloria Steinem will not be tuning into NBC's Playboy Club when it premieres in September.

Steinem once worked undercover at the New York City nightclub to report on conditions at the club, and told Reuters she doubts the drama will depict the scene realistically. Her essay on the club, "I Was a Playboy Bunny," depicts a workplace where its employees were regularly harassed and mistreated. She went on to say she hopes there's a viewer backlash about the subject, "I expect that The Playboy Club will be a net minus and I hope people boycott it. It's just not telling the truth about the era. It normalizes a passive dominant idea of gender. So it normalizes prostitution and male dominance. I just know that over the years, women have called me and told me horror stories of what they experienced at the Playboy Club and at the Playboy Mansion."

Senator: ISPs hijacking searches is a violation of trust

A group of US technology companies may face federal and congressional action after they were revealed to have been hijacking and redirecting search queries destined for Google, Bing and Yahoo.

The group, which includes more than 10 Internet service providers (ISPs) with several million customers between them, were intercepting searches for brand-name companies and products. Rather than returning search results, the ISPs sent customers to retail websites. When users searched for "motorola", for example, they were sent to an online store run by the electronic manufacturer of the same name. The redirect took place via an online marketing network, which may have been paying the ISPs a commission. The technology behind the process appears to have been supplied by Paxfire, an advertising technology company based in Sterling, Virginia.

Both Paxfire and the ISPs could be summoned before the Senate Subcommittee on the Privacy, Technology and the Law, says Sen Richard Blumenthal (D-CT). Sen Blumenthal says he will discuss the possibility with Sen Al Franken (D-MN), who heads the committee.

Groupon, Twitter, other tech firms grapple with hypergrowth

As the larger economy swoons amidst a downgrade in the U.S. credit rating and an extremely volatile stock market , some tech companies are bucking the trend.

Perhaps no tech start-up has grown as fast as IPO-bound Groupon: to more than 1,700 workers in North America from 300 in March 2010. Since July, Facebook has moved 500 workers to a sparkling, 1-million-square-foot campus in nearby Menlo Park. The company employs more than 2,000 worldwide. Technology businesses large and small are trying to manage what LinkedIn CEO Jeff Weiner and others call hypergrowth, or onboarding. In the midst of a hiring frenzy in Silicon Valley and other tech hotbeds that has put a premium on talent and swelled workforces, the kerfuffle for some companies is how to add new workers without gumming up operations and fracturing the corporate DNA. The stampede for tech talent, whether through hiring or acquisition, has been well documented. Established companies and start-ups alike are courting top talent in engineering, social media, website and product design, data crunching and analysis, and management with money and stock options — even goodies such as iPads, nifty work spaces and shuttle service. But landing a prized recruit may be the easy part.

The real work comes in finding a suitable, larger workplace, packing and moving computer and networking equipment, then integrating new people and equipment — all while trying to preserve a company's culture, says Christine Comaford, an executive coach and serial entrepreneur who has started and sold four tech companies. "You don't want to lose your (corporate) soul," she says.

The Numbers Behind Verizon's High-Wire Act With Strikers

Verizon's management has little choice but to take a hard line with 45,000 striking workers. Despite the health of Verizon's wireless business, cutting costs and improving profits from its landline business remain crucial.

Most of Verizon's consolidated debt -- $40.4 billion out of $47.7 billion at June 30, net of cash -- is at either the parent company or the fully owned wireline business. And thanks to steadily falling landline subscribers, wireline's earnings before interest, taxes, depreciation and amortization dropped to $9.2 billion in 2010 from $14 billion in 2006. Wireline's ebitda declines may reverse in coming years, if Verizon's newly rebuilt network offering services like TV keeps attracting new subscribers. But other headwinds loom. As Sanford C. Bernstein has noted, the federal government's bonus depreciation tax break is due to phase out over the next couple of years. This break has kept Verizon's taxes low: Verizon's reported tax expense in 2010 was $2.5 billion, but filings show it only paid $430 million. Assuming the break doesn't get extended, Moody's estimates Verizon's cash taxes will rise to as high as $2 billion next year and to between $4 billion and $6 billion in 2013.

New York Democrats siding with unions in Verizon contract battle

Several House Democrats from New York have sent letters to Verizon siding with the company’s unionized workers in the negotiations over a new contract. Communications Workers of America President Larry Cohen wrote to every member of Congress on August 9, claiming Verizon is looking for $1 billion in concessions from its organized employees and refusing to budge from its demands.

“It has come to our attention that many of the contract changes that Verizon has proposed may potentially undermine the financial security of CWA and the International Brotherhood of Electrical Workers (IBEW) employees,” Reps. Tim Bishop and Steve Israel wrote on Aug. 3, before the strike began. “We are specifically troubled by the proposal to eliminate limits on low-wage contracting and overseas outsourcing. Now more than ever, we need businesses that are willing to invest in keeping skilled workers on our shores and willing to negotiate with those workers in good faith for the benefit of the employees, the company and the U.S. economy."

“From what I have been told, the company’s proposals could reduce the standard of living of thousands of middle-class employees who live in New York State and potentially lead to the elimination of thousands of those jobs,” wrote Rep Edolphus Towns (D-NY) on July 29. “While I am well aware of the changes that have taken place in the telecommunications industry, the need to preserve a robust landline network maintained and service by skilled technicians remains the same."

Other New York Democrats backing the workers’ position include Reps. Louise Slaughter and Maurice Hinchey, whose spokesman called for Verizon “to act responsibly and take care of their employees.”

Media Stocks Soar as Dow Pulls Out of Death Spiral

The day after a 635-point plunge in the Dow Jones industrial Average saw share prices take a pounding, the market seesawed back August 9, closing up 429 points. As Wall Street rebounded, media and entertainment companies followed suit. At the closing bell, the Dow Jones U.S. Broadcasting & Entertainment Total Stock Market Index was up $161.59, or 4.82 percent, to $3,517.49.

Capped data plan got you down? There’s an app for that

Mobile data efficiency isn't a sexy feature that moves a lot of apps and devices, but it’s increasingly going to be a selling point, as mobile consumers look for savings in an data-capped world. Take a look at Onavo, a mobile data management and compression app that launched on the iPhone in April.

The company can save more than 7 million iPhone users almost $1 billion a year collectively if they used the free Onavo app. Onavo, which recently raised $3 million from Sequoia, said based on data consumption figures from Nielsen as well as AT&T’s own figures, it estimates it could save $828 million for about 6.9 million AT&T iPhone users who move from a $25-per-month plan to a $10 monthly plan by using Onavo. An additional 460,000 iPhone users would save $110 million collectively if they moved from a $45 monthly plan to the $25 plan.