June 2012

Hopes for Hollywood cloud darken

Hollywood studios banking on a cloud-based locker system to revive home entertainment sales face an uphill battle after a new report showed a slowdown in purchases of film content from Apple’s iTunes store. While revenues from subscription rental services such as Netflix are increasing, sales of feature films on iTunes – the largest US online movie retailer by sales – have slowed, according to the report from IHS Screen Digest, a media research firm.

Online film revenues in the US more than doubled in 2011 to reach $992 million and are on course to double again in 2012 to $1.9 billion, said Dan Cryan, the author of the report. But subscription rental services such as Netflix drove this growth, with total digital rental revenues rising 355 percent to $727 million. Revenues from online film purchases increased by less than $6 million, or 2.4 percent, to $236 million in 2011. With consumers turning away from buying films online in favor of renting them digitally, the outlook is bleak for UltraViolet, a new industry-wide, cloud-based locker system that Hollywood hopes will stimulate purchases of film content. “When consumers go digital, they go to rental,” said Cryan. “There’s just no interest in owning anything.”

FTC chairman praises lawyer on Google case

The chairman of the Federal Trade Commission called the Washington attorney hired by the agency to help determine possible antitrust action against Google a "world-class litigator" and said it is still examining the case. Chairman Jon Leibowitz said the recent hiring of former Justice Department prosecutor Beth Wilkinson gives the FTC some ammunition to go up against Google's high-powered legal team, but said the commission is still gathering evidence to see if there is a case.

Rep. Lamar Smith, SOPA sponsor, sees critics retreat in bid to unseat him

Political action committees and Internet activist groups that sought to unseat Rep. Lamar Smith (R-TX) over his sponsorship of the Stop Online Piracy Act are going back to the drawing board after failing to muster enough support from voters.

Representatives for anti-Smith PACs such as the Americans for Internet Freedom and Test PAC are regrouping and deciding where they want to focus their energy and fundraising dollars next, now that Smith has secured his party’s nomination for another House term. “We set our goals really, really lofty this time and unfortunately, we were flying a little too close to the sun,” said Andy Posterick, treasurer for Test PAC, which was borne out of the anti-SOPA movement on the social news website Reddit. Supporters of stronger online copyright legislation weren’t surprised that the anti-SOPA efforts fell flat at the voting booth. Many never believed that SOPA would be much of an election year issue. And the Texas GOP primary proved that. Not only is Smith an incumbent in a predominately Republican district, opponents say the size of the Judiciary chairman’s campaign war chest — roughly $1.3 million — easily trumped the money the newly formed PACs raised. That included contributions from PACs for Comcast, the Recording Industry Association of America and Go Daddy, according to the Center for Responsive Politics.

Judge Weighs 'Slippery' Legality of Barry Diller's Aereo in Day 2 of Key Hearing

At the close of a two-day hearing to determine whether TV broadcasters will prevail on a motion for a preliminary injunction against Barry Diller's Aereo, a judge made no explicit indication of which way she is leaning. That said, one thing is clear from two days of testimony and arguments: If the Internet broadcaster survives, the revolution in how content is televised will be traced back to Aug. 4, 2008.

As the parties made closing arguments for and against an injunction, the potential impact of this case became apparent: It's huge. And to borrow the word used by New York Federal Court Judge Alison Nathan, what was being presented before her was "slippery." To understand why, consider that in 1984, in the famous Sony Betamax case at the U.S. Supreme Court, the VCR got legal blessing. Nearly a quarter-century later -- Aug. 4, 2008, to be exact -- remote-storage DVRs received a similar stamp of approval from the 2nd Circuit Court of Appeals in the so-called Cablevision decision. In that case, the appellate division ruled that "because each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber, we conclude that such transmissions are not performances 'to the public,' and therefore do not infringe any exclusive right of public performance."

Now consider for a second what happens if someone builds a system where a DVR-type device captures an over-the-air TV signal and transmits it to a single subscriber over the Internet. What if the subscriber is able to "play back" the "copy" of the recording "contemporaneous" with the original live transmission?

How Hulu’s Battleground changed the web TV ballgame

A TV show that won’t air on any TV network? Quite a few people were hesitant when producer J.D. Walsh told them about his political comedy series project Battleground going to Hulu last year.

Fox had fronted the money for a pilot episode, but then declined to pick up the show. “They were very polite as they showed me the door,” Walsh recalled about his exit at Fox during a phone conversation last week. Attempts to take it elsewhere were met with interest, but not commitment. Battleground seemed stuck. Walsh didn’t want that to happen to Battleground, and jumped on the opportunity when Hulu offered to pick it up as the service’s first-ever original scripted show. Others, however, were not quite as convinced. Battleground lead actor Jay Hayden recently remarked in an interview with Lost Remote that his manager and agent were pretty nervous, and Walsh acknowledged that online-only project was a tough sell: “There was definitely a stigma attached to it,” he said.

British Minister Concedes Sympathy to Murdoch TV Bid

With his career in the balance, Culture Minister Jeremy Hunt said at a judicial inquiry into the British media that he had been personally sympathetic to a bid by Rupert Murdoch to take over Britain’s most lucrative pay-television network, but that he did not act with improper bias.

Hunt, 45, was responsible for overseeing the regulatory processes for the $12 billion bid for the 61 percent of the British Sky Broadcasting network, or BSkyB, that Mr. Murdoch’s News Corporation did not already own, and held the ultimate authority to approve it. Last July, Murdoch withdrew the bid amid widespread outrage over the phone hacking scandal, which has enveloped two newspapers in Murdoch’s British stable and shaken his global media empire. At the inquiry, headed by Lord Justice Sir Brian Leveson, Hunt faced intense questioning over e-mails, phone calls, text messages and other communications with Murdoch, his son James and News Corporation executives that suggested he was sympathetic to the bid. Confronted with the cascade of supportive communications that flowed between his office and a Murdoch lobbyist — and in one case, with James Murdoch himself — Hunt admitted that he had strongly favored the takeover but insisted that he had set aside his own bias when taking on the “quasi-judicial” decision.

Good innings ensures survival till stumps

[Commentary] If you were a betting man, you would not have wagered a large amount on Jeremy Hunt surviving as culture secretary during the opening hours of the Leveson inquiry.

From the start, the embattled minister looked and sounded like a man who knew he would not be able to explain what was about to become public. When a series of his text messages from December 21, 2010 – the day he was handed responsibility for News Corp’s bid for full control of BSkyB – flashed up on the screen, it became clear why. The real damage came from the release of text messages showing Hunt offering “congratulations” to Murdoch when the BSkyB deal cleared a key European regulatory hurdle on the day he was given a quasi-judicial role overseeing the News Corp bid. Ninety minutes later, when news of the government’s U-turn on the charity tax began to circulate in Court 73, the overriding sentiment was that the culture secretary would not last the day. But, in Leveson as in cricket, a lunch break can make all the difference. Hunt returned to the inquiry more forceful, more animated in the afternoon.