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Date Set for Aereo Case to be Heard by Supreme Court

posted Sunday Feb 16, 2014 by Nicholas DiMeo

Date Set for Aereo Case to be Heard by Supreme Court

The Aereo saga has been an interesting one to follow. Battling legal issues, including appeals, since its inception, Aereo is looking to change the way TV content is consumed, and has even earned the backing of the Consumer Electronics Association. Now, Aereo will take on its biggest battle yet: squaring off against broadcasters in front of the Supreme Court.

After putting off expansion efforts in order to take on legal cases from all fronts, the company's efforts have now culminated in the ultimate court showdown. Broadcasters have pushed for the case to be heard in front of the Supreme Court, and now, after the Court agreed to it last month, we have a date set for the hearing. ABC TV will take on Aereo on Tuesday, April 22. The Supreme Court identifies the case as a "Copyright Act application to streaming of free broadcast TV programs via the Internet to paying customers."

What's also important to note about this case is the fact that Justice Samuel Alito has recused himself from the case. This is usually done when a Justice has a financial or other kind of personal interest involving the parties of the case. This is key because it could mean that the decision could wind up being a 4-4 tie, which would allow the lower court's decision in favor of Aereo to be upheld.

Aereo's CEO Chet Kanojia was optimistic about the case and is looking forward to the Supreme Court hearing.

We said from the beginning that it was our hope that this case would be decided on the merits and not through a wasteful war of attrition. We look forward to presenting our case to the Supreme Court and we have every confidence that the Court will validate and preserve a consumer's right to access local over-the-air television with an individual antenna, make a personal recording with a DVR, and watch that recording on a device of their choice.

So now that we have a date set, and the odds are slightly better for Aereo to come out victorious, hopefully we'll see another success for innovation to prevail. A decision in Aereo's favor would in turn benefit customers everywhere, by forcing Congress and the FCC to reassess the state of the broadcast industry. Kanojia has said from the beginning that he hopes Aereo will make TV more affordable to the average consumer in "a la carte packages" of channels, instead of hundreds of channels you might not watch but still have to pay for.

A complete schedule of hearings for the last two weeks of April is available for viewing online. You can also check out the source link below for more on the Aereo case, including key dates and decisions during the whole process, in the source link below. Hopefully, at the end of this, we'll see Aereo, and the consumer, as a winner.

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Comcast-Time Warner Cable Merger Real, Worth $45 Billion

posted Saturday Feb 15, 2014 by Scott Ertz

Comcast-Time Warner Cable Merger Real, Worth $45 Billion

This week, rising media company Comcast announced a $45 billion merger with slumping media company Time Warner Cable. The agreement, which has been approved by both Board of Directors, would be entirely in stock where Comcast will trade 2.875 shares of Comcast for each of the 284.9 million Time Warner Cable shares. When the deal is complete, TWC shareholders will own about 23 percent of Comcast's common stock.

This merger has a lot of implications in the media industry. First, with Time Warner joining the Comcast family, that will add more chefs into the kitchen that is Hulu. While it is only a stock transfer, there will be a large collection of new shareholders, as well as an expected addition of new executives, that will have ideas different from the norm inside Comcast. There is no telling if this could be better or worse, but with Comcast's seeming disinterest with the brand, also operating a competitor, we might finally see either a full buy-in or abandonment of Hulu.

The new company would also have 33 million cable subscribers and almost as many broadband subscribers. Of course, with that many customers, this will give the new Comcast absolutely incredible buying power when negotiating prices with networks. Obviously there will never be any contention with the NBCUniversal networks, which are owned by Comcast, but it will mean a lot of trouble for the Big 3 competitors: News Corp. (FOX), Disney (ABC) and CBS.

The 33 million customers also means that the company will have even more power to control the content you receive and the price you pay for it. We know that several Internet service providers have trialed tiered bandwidth throttling plans, similar to what you get with T-Mobile plans: slowing your speed after you use the service too much. Perhaps we could see something like that come back now that Comcast has even more power.

Now, with all of this bargaining and pricing power, Comcast and Time Warner Cable say that this merger is a good thing for everyone involved. D. Marcus, Chairman and CEO of Time Warner Cable, said,

This combination creates a company that delivers maximum value for our shareholders, enormous opportunities for our employees and a superior experience for our customers. Comcast and Time Warner Cable have been the leaders in all of the industry's most important innovations of the last 25 years and this merger will accelerate the pace of that innovation. Brian Roberts, Neil Smit, Michael Angelakis and the Comcast management team have built an industry-leading platform and innovative products and services, and we're excited to be part of delivering all of the possibilities of cable's superior broadband networks to more American consumers.

Comcast also reminds people, in the hopes that the Federal Trade Commission will hear, that Comcast and Time Warner Cable have zero overlap in markets, meaning nowhere in the country will this create a market-level monopoly, like Verizon's purchase of Alltel created.

Will this argument be enough to get this merger past the FTC, or will this go the way of AT&T/T-Mobile? Sound off in the comments.

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Wireless Kill Switch Heads to Congress

posted Saturday Feb 15, 2014 by Scott Ertz

Wireless Kill Switch Heads to Congress

Last week, a bill creating a state-wide wireless kill switch was proposed in California. The pitched reasoning for the capability is to terminate a phone that has been reported as lost or stolen. The state believes that, if a stolen phone can be made useless, many or all mobile thefts would be eliminated.

The problem with this theory is that the carriers, the CDMA carriers at least, already have this capability. Educated consumers know to call Verizon or Sprint before purchasing a used phone and verify that the ESN is clean. This has not slowed down the theft of Sprint or Verizon handsets, however.

On the other hand, GSM technology is not based on the device at all. In fact, many GSM carriers do not often have an accurate record of what device is on your account. This is because of SIM cards, which are the only technology that is important to the carrier. This technological difference is why GSM carriers often do not have the ability to block a handset: they do not know it exists.

So, with the track record of an existing "kill switch" not working for some carriers, and a massive technological hurdle to overcome preventing its implementation on others, why would California be trying to mandate it? Let's take a look at the national response to the proposed bill for a possible answer

Upon hearing about the state's bill, a similar bill began its process on the national level. This is the second time a kill switch has been proposed on the national stage, with the first attempt being defeated rather quickly, mostly because of the facts raised above, presented by the carriers.

With Congress knowing about the ineffective nature of the kill switch as well as the difficulty of implementing it in some cases, why are they, again, trying to mandate it? Many believe that it is a way for the government to get more involved in our lives. With the ability for the federal government to kill a phone remotely, they would have the ability to interfere with things like protest planning or documentation, or anything that they consider to be harmful to their narrative.

While this might sound a little conspiracy theorist, if you consider the history of governments vying for power, there are a few rights that are infringed early, privacy (NSA), healthcare (Obamacare) and free speech and the right to assemble (this bill), it does make those conspiracy theories sound a little more credible.

Do you believe that this bill, titled the Smartphone Theft Prevention Act, is truly intended to prevent thefts, or is this a power grab? Sound off in the comments.

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Alternate Messaging Heats Up with $900 Million Viber Purchase

posted Saturday Feb 15, 2014 by Scott Ertz

Alternate Messaging Heats Up with $900 Million Viber Purchase

It is always interesting to watch an industry who has been stable with the same players for years get shaken up when a collection of new players decide to enter. The market that currently everyone seems to be jumping into is messaging. Now, the messaging industry has been fairly consistent with Skype, AIM and Yahoo! Messenger being the big players for ages. Near the end of their run, Myspace tried to enter the market unsuccessfully, and Facebook has certainly made a name for themselves in the market, but in the last couple of years, we have seen a plethora of new names.

With services like Kik, Snapchat and Whatsapp bringing both similar and new features to the market, it is time for the big boys to rethink their places in the market. It is also time for companies who are newly successful Internet conglomerates to snap up some of the small guys, sometimes for a lot of money. For example, Microsoft recently picked up corporate messaging startup Yammer for $1.2 billion.

This week, Japanese retailer and purchaser of all things digital Rakuten has purchased Viber, a direct Skype competitor, for $900 million. This is not Rakuten's first purchase of a successful brand, with retailer Buy.com and ad platform Linkshare joining their family as well.

What can we expect from a Rakuten-owner Viber? Under Rakuten's leadership, Buy.com had their largest ever Thanksgiving weekend in 2013. Linkshare has become the first and only continually sustainable affiliate network and the largest pay for performance affiliate marketing network on the Internet. That means we can almost certainly see Viber find a financially stable place in the market, probably quickly.

Their current business model is not bad: free service-to-service calls, and paid off-network calls. This business model is almost identical to the Skype model, with Skype having the added bonus of business users, who pay a premium for added video quality options.

Hiroshi Mikitani, founder of Rakuten, gave a look into some of his plans for Viber, saying, "With Viber, we're going to link up messaging with e-commerce." Considering the company has always been focused on retail and marketing, it makes sense that the plan for the acquisition would have to do with retail. He added,

In the future, e-commerce will become a more communication-based transaction. Live interaction is going to be critical for all Internet services. Rakuten is at the start of a new era.

My guess is he is speaking about more than just "Click here to talk to a live agent" buttons on the Internet. It could mean something more like Amazon's "Mayday" button on the Kindle HD products, or it could be something more than we can come up with.

How do you think Rakuten plans on using their newest acquisition? Let us know in the comments.

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Microsoft's Commitment to PC Gaming in Question

posted Saturday Feb 15, 2014 by Scott Ertz

Microsoft's Commitment to PC Gaming in Question

There was a lot of question about Microsoft's commitment to PC gaming 6 months ago when they shuttered their Games for Windows Live brand. Some feared that the full shutdown of the brand meant the end of PC gaming from Microsoft, though Microsoft urged gamers that their commitment had shifted to the Xbox brand on Windows 8.

As a show of good faith, the company brought in Jason Holtman, a former Valve employee, who had helped shape the service we know as Steam. When he joined the company, he said that he would be working with developers to bring new titles to the platform with the goal of "making Windows a great platform for gaming and interactive entertainment." A noble goal for a new member of the Xbox family.

That goal was short-lived, it would seem, as Holtman's LinkedIn profile shows that he has left the company. Microsoft confirmed the departure to Neowin. What could Holtman's departure from Microsoft signify?

There are a lot of possibilities. The most popular this week is that Microsoft has actually nearly abandoned PC gaming in favor of a stronger focus on their Xbox One console. It would make sense that Microsoft would be putting larger than normal resources behind the console business right now with the Xbox One just hitting the market. A console without the power of a large launch catalog isn't going to have huge success.

I have an alternate theory, however. Microsoft's Ken Lobb recently said in relation to the corporate restructuring,

Now we're one {unified} Microsoft. I don't see this as pressure. I see it as an opportunity. We have more support internally to support PC more. That's great! My only expectation would be, please let us continue to do that over a five-year period so we can have real impact. That's how it feels right now. We're getting very strong support internally. So we're really going after PC.

That can be evidenced by looking at the Xbox-branded Windows titles available. There are over 60 in the store that are considered "featured" at the time of this writing. These titles span from casual games such as Solitaire and Mahjong to large titles, such as Adera. That certainly suggests some sort of commitment to gaming on the PC, though probably not the type that a hardcore gamer might be interested in. Perhaps Microsoft is going after the casual market, because that has succeeded on iOS and Android already.

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Twitter Files First Earning Statement Since Going Public, Posts $500 Million Loss

posted Sunday Feb 9, 2014 by Nicholas DiMeo

Twitter Files First Earning Statement Since Going Public, Posts $500 Million Loss

As popular as Twitter may be, if it doesn't make money, it's not going to be here forever. This week Twitter had to finally post its earnings, after going public last quarter amidst filing deceptions and SEC investigations. So how much money did Twitter make? It should be no surprise here that the company lost money in its first quarter. And a lot of it.

To start, Twitter's revenue for Q4 was up 116 percent to $243 million. You can attribute that gain to whatever reason you'd like, but one could guess that going public would cause money to come in a bit quicker than before. It apparently also causes money to fly out the door. It has to be that, or Twitter has been burning money like this since the beginning of forever, and it's now finally on record. The company posted a net loss for Q4 of $511 million and a full year net loss of $645 million. So Twitter lost half a billion dollars in one quarter. Well done.

So what does Twitter's fearless leader, Dick Costolo have to say about all of this? "Successes all around!" Of course, I'm paraphrasing.

Twitter finished a great year with our strongest financial quarter to date. We are the only platform that is public, real-time, conversational and widely distributed and I'm excited by the number of initiatives we have underway to further build upon the Twitter experience.

So his insane opening statement means one of two things. It could mean that Dick can't read or see color, because a big red "$511 million" on a piece of paper would sure cause most people to react with something more along the lines of, "well, this didn't go as expected." Or it could mean that Twitter has actually lost more than $511 million in a quarter before, so this blunder isn't too terrible in the grand scheme of things. Either way, a loss is a loss and should not be buried under touting your platform as a real-time, conversational and widely distributed money pit platform.

To be fair, in the SEC filing, Twitter does explain the loss.

GAAP net loss was $511 million for the fourth quarter of 2013 compared to a net loss of $9 million in the same period last year. The company's Q4 GAAP net loss included $521 million of stock-based compensation expense, of which $406 million was for restricted stock units previously granted to employees, for which no expense had been recognized, until the effective date of our initial public offering in accordance with GAAP.

So stock expenses make up most of the loss, with an ever-growing revenue. If this doesn't sound like 1999 all over again, I don't know what does. Because of Twitter's decision to not need a business model, we've been covering the company's disasters and predicting its downfall for a while now. This is despite investors throwing piles of money at Twitter for the past five years, like we were about to bust open some more dot coms or something. And until now, anyone questioning Twitter's decline was shot down with facts highlighting growth and popularity. Now that it's on record, perhaps the tide will finally shift and investors will begin to realize that history is merely repeating itself.

As a side note, since the filing was issued, Twitter's stock has gone down over ten points, or about 15 percent.

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