The UpStream

CBS to Begin Producing Straight-to-Internet Content

posted Sunday Aug 10, 2014 by Scott Ertz

CBS to Begin Producing Straight-to-Internet Content

It would appear that CBS is joining the Internet-first production concept, joining the ranks of Netflix, Amazon and Hulu. The difference is, CBS does not own a distribution platform like these companies, but will, instead, take advantage of their already strong presence to distribute their content.

Speaking on an earnings call, Les Moonves said,

(CBS) will be producing more and more shows for more and more outlets, including major streaming companies and other emerging distributors.

Diversifying their distribution network seems like a great idea for CBS. As the era of appointment television is coming to a close, offering content on networks designed to offset appointment television will prepare them for the future. Joining multiple platforms, which is something unique to CBS at this point, will help them reach an audience that is already wildly distracted by various competing outlets.

While I may use 3 of the big 4 platforms (Redbox being my exclusion), most people probably only subscribe to a single platform. By partnering exclusively with a single platform, CBS would be severely limiting their potential audience for new programming. Diversifying content distribution is something CBS is already familiar with, though, as Moonves explained.

We are programming for Showtime, for the CW, for other cable networks and for other broadcast networks including a straight-to-series order for ABC.

By creating original programming for Netflix, Amazon Prime and Hulu, CBS would simply be expanding their already extensive distribution network. The question is, will they keep up the already high standard they have set for themselves? How I Met Your Mother and The Big Bang Theory have been big draws for the broadcaster, but will that quality standard carry over to their Internet experiment? We can hope, but only time will tell.

Facebook Gets Support in Its New York Privacy Case

posted Sunday Aug 10, 2014 by Scott Ertz

Facebook Gets Support in Its New York Privacy Case

Last year New York City Law enforcement asked Facebook to turn over information about 381 accounts. The information included photos, messages and personal information. The targets of the request range from "high schoolers to grandparents, from all over New York and across the United States."

Collecting information from social networks is common behavior for law enforcement. What happened here was not quite ordinary, though. Facebook was prevented from informing any of the users that their information has been requested.

Unfortunately this type of broad fishing investigation is becoming more popular. In this particular case 62 of the people investigated were charged in a disability fraud case. Clearly the concept works. The problem however is that over 300 people had their information handed over to the police without being informed, seemingly for no reason.

Facebook has been fighting this practice on behalf of their users. They believe that the covert nature of this search violates the 4th Amendment. Fortunately for us they are not the only ones to feel this way. The New York Civil Liberties Union and the American Civil Liberties Union have filed in support of Facebook.

Joining these organizations is a large collection of top Internet companies. Included in the list are Dropbox, Google, LinkedIn, Microsoft, Twitter and Yelp. All of these companies have officially filed motions in support of Facebook.

They believe that Facebook should have the right to challenge these requests on behalf of their members. If they are not allowed to challenge them, they should at least have the right to inform their users of the requests. A lower court has already ruled against Facebook on this topic. These organizations are hoping that a higher court will feel differently.

Do you believe an Internet company has the right to challenge information requests on your behalf? Or should they just turn over information when they are asked? Let us know in the comments.

Zynga Still in Trouble After Second Straight Quarter of Missed Projections

posted Sunday Aug 10, 2014 by Nicholas DiMeo

Zynga Still in Trouble After Second Straight Quarter of Missed Projections

It's possible that former Xbox exec and current Zynga CEO Don Mattrick might not be able to turn the company around. Even after huge executive changes a few months ago, the game studio is still rolling down hill and both stock and morale are dropping fast.

After not reaching sales predictions for the second consecutive quarter, Mattrick was quick to point out that Zynga's best days are still ahead.

We aspire to do better and improve execution across our business. We are in the midst of a multiyear transformation, and we are building Zynga and NaturalMotion against a growing market opportunity.

What worked for Zynga this past quarter? Words with Friends is apparently still popular and reached its sales target, and the casino and farm games also did quite well. Zynga Poker's delayed launch didn't help sales though, as the game is still undergoing testing and development even though it was supposed to launch a month ago. On top of that, Mattrick mentioned that a handful of other games that were supposed to launch by holiday wouldn't come out until 2015. The good news is that mobile games continued to be a success for the company. Zynga's mobile sales surpassed those of its Web games for the first time in company history.

Zynga is also banking on its first sports game, NFL Showdown, which is currently in testing in select markets. In fact, many of Zynga's games currently reside in limited market testing, as the company believes in gaining tons of feedback from its current customer base before launching a title full-scale. Additionally, Zynga will be trying out other licensing projects too, with something possibly coming out of the Tiger Woods camp, as well as the Looney Toons franchise.

Can these games get Zynga past what Mattrick is calling "that awkward transition period" and keep its 2,000 employees working at the studio? Do you even still play Zynga games? Let us know your thoughts in the comments below.

A Rough, But Expected, Week for Twitch

posted Sunday Aug 10, 2014 by Scott Ertz

A Rough, But Expected, Week for Twitch

When Google purchased Twitch we all knew we were in for some changes. Twitch proves our point this week by announcing a number of policy changes. As you would expect, most of these changes do not make Twitch users happy.

Let's start with the positive. You can now export your videos directly to YouTube. Send YouTube is Google's one stop video repository, this addition make sense. But with Google any new addition means a loss somewhere else. That loss is on Twitch native storage.

Recorded content will now stay on Twitch for only 14 days, unless you're a paying subscriber in which case you'll get 60 days. With limited Twitch storage it will force users to move their videos to YouTube. I suppose thankfully Google has made that easy.

Unfortunately this is going to create a fracture in the ecosystem. Currently if you're looking for a Twitch streamer's content you know where to go; old, new and live alike are all in one place. Now you're going to have to look on YouTube for their previous content and Twitch for their current and live. Luckily Google is an expert on fractured ecosystems.

Next, Twitch will now mute videos that contain copyrighted music. It does make sense that copyrighted music would be muted considering Google's plan is to move the record and content to YouTube, which already has this feature. This does not apply to live streams, however, so get your fill while you're live.

Finally, Twitch's saying goodbye to its founding site Justin.tv. After 7 years in service at the site has been shut down permanently. The farewell video from the original founders was posted on Vimeo, not YouTube.

As you might expect the Twitch community is not happy with these changes. In fact many of the high profile broadcasters are looking at other options. The site Hitbox.tv is advertising directly to Twitch's customer base, posting a blog titled, "Time to switch."

What will happen to the very loyal Twitch fans? Will they stay with Google or move to a competitor? What are your plans? Let us know in the comments.

Microsoft Sues Samsung for Missing Patent Royalty Payments

posted Saturday Aug 9, 2014 by Nicholas DiMeo

Microsoft Sues Samsung for Missing Patent Royalty Payments

It is a sad time when best friends needs to face off in legal battles, but when it comes to royalty payments, Microsoft doesn't play around. The software giant is suing Samsung after the South Korean hardware manufacturer did not pay its royalties in full last fall.

Samsung is supposed to pay Microsoft on patent licenses and stopped doing so after Microsoft made its announcement to acquire Nokia. The lawsuit papers filed on Friday in Manhattan state that the company is seeking the money owed but do not disclose the actual amount.

After the papers were filed, Microsoft took to its corporate blog to talk about the matter. David Howard, Microsoft's deputy general counsel, posted a full assessment of what went down. He mentions how Microsoft doesn't like to fight, especially with its partners, but will do so when agreements are broken.

We don't take lightly filing a legal action, especially against a company with which we've enjoyed a long and productive partnership. Unfortunately, even partners sometimes disagree. After spending months trying to resolve our disagreement, Samsung has made clear in a series of letters and discussions that we have a fundamental disagreement as to the meaning of our contract...

Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market. Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones...

After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft. In September 2013, after Microsoft announced it was acquiring the Nokia Devices and Services business, Samsung began using the acquisition as an excuse to breach its contract.

Howard goes on to mention that Samsung did not ask the courts if the acquisition was indeed a breach of contract and instead simply stopped paying. So to combat this, Microsoft is asking the courts to settle the issue that Samsung seems to have a problem with. All things considered, it makes sense for Microsoft to go after this money, especially when sales have almost quadrupled and those patent license payments are directly tied to sales and performance.

With the smartphone market shifting after Samsung has taken the top spot and Microsoft has acquired a huge competitor, the ruling here will be a crucial one. Microsoft is still in battle with Motorola over the Android patent royalties and have been since 2010. Up until now, Samsung, LG and HTC have all agreed to the fees. If Samsung comes out the victor, it could be the catalyst for the rest of the group to stop paying as well.

Beats Exec Heads Up iTunes Radio After Apple Acquisition

posted Friday Aug 8, 2014 by Nicholas DiMeo

Beats Exec Heads Up iTunes Radio After Apple Acquisition

With the $3 billion acquisition now in the past, Apple is looking ahead with Beats Electronics. Aside from a possible lawsuit with Bose looming, Apple is quickly blending Beats into its everyday business operations. So much so that former head of Beats Music, Ian Rogers, will now be running iTunes Radio.

We knew that Interscope Records founder Jimmy Iovine and hip hop icon Dr. Dre were already joining the Apple family but now with Rogers coming on to lead the failing Apple music-streaming service, three of the most important people that made Beats successful are now within the Apple empire. Apple posted on its site about the acquisition, saying that,

Today we are excited to officially welcome Beats Music and Beats Electronics to the Apple family. Music has always held a special place in our hearts, and we're thrilled to join forces with a group of people who love it as much as we do. Beats cofounders Jimmy Iovine and Dr. Dre have created beautiful products that have helped millions of people deepen their connection to music. We're delighted to be working with the team to elevate that experience even further. And we can't wait to hear what's next.

So what's next? We're not sure yet. All we know is Rogers has extensive background in running media businesses, as he used to run Yahoo's media operations before moving over to Beats. Sources say that his role will include bringing iTunes Radio to the forefront of the iTunes business model to compete with Pandora and Spotify.

On top of the announcement, Apple is also slashing 200 jobs out of the 700 employees coming over from Beats. The departments losing its positions will be from HR, financing and customer support, all departments where Apple already has covered. Apple has gone on record to say it is looking for new positions for those losing their jobs.

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