October 2014

“Sky Is Rising” Entertainment Industry Economic Report Shows More Creative Output, Opportunities For Creators

A new report finds online services and tools for distribution are fueling more creative opportunities and content than ever before. The economic report on entertainment has found growth in sales and availability of online video, music and e-books, and that this increased growth of content has brought more competition. The report demonstrates there are actually more opportunities for creators than ever before.

Among the findings:

Music: Legal digital music consumption continues to grow, with users streaming more than 118 billion tracks in 2013. Total music transactions reached record highs in 2011 and 2012, with legal downloads of current releases growing by 9.1% that year.
Video: Projections showing a steady increase in the U.S. video sector, driven by online services, estimated to exceed $36 billion by 2017. The global and domestic box offices continue to break records; international returns exceeded $35 billion in 2013 according to the MPAA, up 20% over 2009.
Books: The e-book explosion continues, growing from $64 million in 2008 to more than $3 billion in sales in 2012, with independent and self-published authors contributing to the growth. Even as total book market revenues are down, U.S. printed title production has tripled over recent years.
Games: While total gaming sales fell off during the economic downturn, games grew from $79 billion to $93 billion between 2012 and 2013, and forecasts continue to look up. Estimates suggest even brighter futures for mobile game revenues, which tripled from 2011 to 2013, reaching between $1.78 and $3 billion, depending on the estimate.

Fine Tuning the Incentive Auction Rules for Competition

The Federal Communications Commission is planning to auction returned TV broadcast spectrum for commercial wireless services as early as next year, and in T-Mobile’s view, it can’t happen soon enough.

As our competitors well know, arming T-Mobile with low-band spectrum is a competitive game-changer, enabling our service to penetrate building walls better and travel longer distances than we can with the spectrum we have today. Imagine a T-Mobile with even greater coverage, offering innovative Un-carrier deals to even more customers in even more places - in direct competition with the Twin Bells! We would ask, however, that a few small -- but crucial -- changes to the rules be made. In particular, T-Mobile has asked the FCC to increase the size of the “reserve” so that no matter how much spectrum is up for sale, at least 50 percent of it will be held in reserve for competitors with little or no low-band spectrum in that market.

Dish Blitzes FCC With Block Comcast/TWC Message

The clock may be stopped on the Federal Communications Commission's review of the Comcast/Time Warner Cable merger, but Dish Network gave the commission a lot to chew on.

In what amounted to a full-court press, Dish execs, led by Chairman Charlie Ergen, met with a laundry list of FCC officials Oct. 21-22 (more than three dozen on Oct. 21 alone) either in person or by phone asking them not to approve the deal, which it has formally requested in a petition to deny. The officials included commissioners and bureau chiefs and bureau staffers as well as special counsels and advisors. The pitch emphasized what they said would be the combined company's control of half the broadband pipes with speeds sufficient to provide the 25 Mbps that FCC Chairman Tom Wheeler has suggested are the new table stakes for defining access to high-speed broadband. Dish suggested that both companies are working on over-the-top services that would otherwise compete if they did not merge.

Google's Campaign Spending Is Exploding, But Is It All Going to Democrats?

Google's campaign spending has grown fortyfold in the past eight years.

Google's political action committee, called NetPAC, hit a high-water mark this campaign cycle by giving nearly $1.6 million to date, according to campaign finance disclosures. That's up from $1 million spent on the 2012 cycle -- a presidential-election year. And it's orders of magnitude beyond the $37,000 Google spent the first time it ventured into political contributions: the 2006 midterm elections. This election cycle, Google's political giving places it slightly ahead of Goldman Sach's PAC -- a frequent target of those who claim corporate cash translates into too much corporate influence into government. And it's quickly catching up with Microsoft, the longtime leader in tech spending.

But though Google's top brass have ties to President Obama's White House and the company has a reputation for leaning left, the tech giant's campaign spending isn't all heading to the left.

NBC Surprised as HBO, CBS Make Move to Online-Only Television

Online-only TV came on faster than NBCUniversal was expecting. Steve Burke, chief executive officer of the broadcaster owned by Comcast, was taken aback by the announcements that HBO and CBS are offering online-only services that don’t require a cable subscription, he said. “I was surprised,” Burke said. “CBS I was surprised because they’ve been such a defender of retransmission consent and the traditional ecosystem and been so successful in the broadcast business. And HBO, because I think it’s going to be such a challenge for them to not cannibalize what is already a really, really good business.”

Meet ‘forbearance,’ the obscure governing tool that just might resolve the net neutrality debate

The network neutrality debate might soon be wrapping up, as the Federal Communications Commission prepares to issue a new round of rules. And as the FCC does so, it's exceptionally likely that we'll hear one word again and again: forbearance.

It is worth taking a moment to understand exactly what that deceptively dull concept means and where it came from. For that, we turn to Harold Feld, a senior vice president at the advocacy group Public Knowledge (which supports strong net neutrality regulation). "Forbearance" means much the same in normal English as it does in telecommunications law -- to restrain oneself from doing something. In short, it might be key to resolving the net neutrality fight. And yet it is one of modern governing's most poorly-understood tools.

Chairman Leahy asks big Web companies to pledge against ‘fast lanes’

Four top Internet service providers are receiving letters from Sen Patrick Leahy (D-VT) asking them to pledge not to create “fast lanes” on the Internet.

The Senate Judiciary Committee chairman is “gravely concerned” about the possibility that the Federal Communications Commission will allow companies to cut deals with websites so users have faster access to their sites. That would amount to a “fast lane” for them and “slow lanes” for everyone else, he warned. “If the Internet is to remain an open, accessible platform for the free flow of ideas, we need strong rules of the road in place to guarantee those protections,” he wrote. “We also need meaningful pledges from our nation’s broadband providers that they share the American public’s commitment to an Internet that remains open and equally accessible to all.”

Will The FCC Break The Internet?

[Commentary] Actions speak louder than words. The world is watching to see where the Federal Communications Commission’s actions will lead international telecommunications regulators going forward. Will FCC leadership reinforce the successful Internet policy status quo? Or will the FCC reverse course and risk breaking the global Internet by leading international telecommunications regulators to price-regulate their sovereign parts of the global Internet to restore the national postal and telecom utilities of the 20th century? History will be the judge of the FCC’s actions, not its words.

[Cleland is President of Precursor LLC, a research consultancy for Fortune 500 companies]

The cable bundle may be weakening, but Comcast is poised to be stronger than ever

A curious thing happened to the cable television industry after HBO and CBS announced streaming services that deeply threaten the lucrative cable bundle: the companies’ stocks have been climbing higher. The great unbundling of the cable television package is closer in sight, but it’s far from the end of cable companies. The same companies that for decades have offered all-or-nothing TV plans with hundreds of channels will still sit at the center of the new online video economy for one simple reason: They control the Internet pipes. And for consumers, it’s not clear if they will actually end up with better and more affordable options if only a few companies control broadband access.

TV Is Disrupting the Internet

[Commentary] The solipsism of the tech community sees the CBS and HBO migrations to stand-alone streaming services as a satisfying disruption of the TV business. But that's a striking inversion of what's actually happening: TV is disrupting the Internet.

A funny thing happened during the Internet's seemingly epochal displacement of mainstream media. While digital media was becoming overwhelmingly ad-supported -- a mass-media model reminiscent of the three-network era -- television gained a subscription revenue stream. Paid television -- that is, cable subscriptions -- became the most powerful growth driver in the media world, producing a new kind of high-value, culture-shaping programming. Meanwhile, digital media, from Yahoo to BuzzFeed to the websites and apps of magazines and newspapers -- and including even Google and Facebook -- found itself overwhelmingly reliant on advertising income.

Benton

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