The UpStream

Sprint-SoftBank Purchase Approved by DOJ, SoftBank Begins Talks with T-Mobile

posted Saturday Jun 8, 2013 by Scott Ertz

Sprint-SoftBank Purchase Approved by DOJ, SoftBank Begins Talks with T-Mobile

Since discussions were first confirmed, the road to success has not been an easy one for the Sprint-SoftBank merger. SoftBank agreed to purchase 70% of Sprint for $20.1 billion last year, but since then they have hit interesting road blocks; the most notable being DISH Network.

DISH offered more money for the network and has done everything in its power to distract Sprint from Softbank's offer. Last week they took it a step farther by taking out an ad in The Washington Post questioning the national security issues raised by the acquisition. Unfortunately for DISH their plan didn't work, as this week the Department of Justice cleared the deal. This just leaves the FCC approval pending, that is except for Sprint's shareholders.

Wednesday will see a shareholder vote to approve the acquisition, but not everyone wants the deal to go through. There is a lawsuit trying to block the vote, as well as major investors who want it delayed. Why? Because they want the board, who has already recommended to the shareholders, that they approve the SoftBank deal, to reconsider the DISH deal. A change of direction like that would certainly spell trouble for SoftBank.

That is except for the fact that SoftBank has also been in talks with Deutsche Telekom to purchase their 74% stake in T-Mobile US, according to anonymous sources. The sources say that SoftBank has been in talks for a while, but it is as a "Plan B" and are more interested in Sprint than T-Mobile. Obviously position 3 is better than position 4 no matter how you stack it.

So, will Sprint go to SoftBank or DISH Network? If they choose the latter, will Deutsche Telekom leave their stake in floundering T-Mobile US, or will they abandon their attempts at the US market? I predict that DISH Network will lose their bids for both Sprint and Clearwire, leaving them with no option but to purchase T-Mobile.

What is your prediction? Let us know in the comments.

HTC COO Gets Added to List of Chief Departures from Company Over Past Two Years

posted Saturday Jun 8, 2013 by Nicholas DiMeo

HTC COO Gets Added to List of Chief Departures from Company Over Past Two Years

Things haven't been looking so great for HTC. While some phones have been fantastic, like the HTC One, others haven't seen such great results, like the Facebook-heavy HTC First. Sales haven't been the best and the company has faced some tough times. With less than three years under his belt, Chief Operating Officer Matthew Costello has resigned from his position with HTC after another dismal sales quarter and shares being down over 75 percent from two years ago.

According to HTC, Fred Liu, the president of engineering and operations, will be handling the COO position until further notice. For Costello, oddly enough he will not be departing the company entirely. Instead, the former COO will move to Europe and will become an executive adviser to the company. Odds are that this will be the case until Liu is comfortable in his new position, and then Costello will be let go. All of this is happening after HTC posted a net income loss of almost 100 percent in the last quarter. Plus, Costello isn't the only person who has left the company. Before him, the finance, design and marketing chiefs have all left the company in the past two years as well.

New Chief Marketing Officer Ben Ho said that things have to turn around for HTC. He mentioned in a statement that the company is going to be more bold and prominent in its advertising campaigns. Of course, the HTC One is probably going to be at the helm of the marketing campaign moving forward. However, Ho didn't speak on any budget for any campaigns moving forward.

We're going to be bolder with marketing in the second half. We're not going to hide our brand anymore.

HTC's CEO, Peter Chou, spoke on driving sales back to the brand as a whole, and said that their highlight phone, the HTC One, will have what it takes to do that.

Response for our flagship device has been strong and demand has exceeded our expectations. We are confident that the business steps we have taken and continue to take are the right ones to lead to a strong resurgence of the HTC brand.

Could the new wave of execs running the company be what HTC needs to make a profit next quarter? Seeing as though this quarter marked the lowest recorded profit in company history, it is obvious things need to change, and fast. I would love to see HTC get into more Windows Phone devices, as people are starting to become frustrated and confused by seeing so many different HTC-branded devices out there all running different iterations of Android. The user experience from one phone to the next, even with the same version of Android, can be completely different depending on the carrier and I think customers are getting tired of re-adjusting to the same stifled product. What do you think? Comment below.

Intel to Pay Extra to Get Started in Media Streaming Business

posted Saturday Jun 8, 2013 by Scott Ertz

Intel to Pay Extra to Get Started in Media Streaming Business

Media streaming is a big business: Netflix, Hulu, Amazon and even Aereo have built an entire, massive industry around the idea. As these companies see success, other, large companies will try to get into the game. Verizon recently backed RedBox's entry into the market, but they are not alone. Intel is in the process of joining the market with a set-top box, but not in the same way that Boxee or Roku have; instead Intel will provide the hardware and service together.

As part of this move, Intel is working to secure streaming rights to content from companies like Disney, News Corp and Viacom. Because the service has not launched and content providers are concerned about the possible success of yet another streaming service on a dedicated piece of hardware, several companies are reportedly charging Intel up to a 75% premium per subscriber.

Traditionally content providers charge streaming services a set fee per subscriber per month. Disney is, of course, the highest fee at $5.15 per subscriber last year. With premiums up to 75% over market value, that would be over $9 per subscriber per month just for Disney's content. How would it be possible for Intel to make money and stay in this business?

Obviously they will need to prove their value to get better prices, but until then they will probably have to eat the cost. Lucky for Intel they have a lot of cash. Hopefully for Intel this service will not go the way Google TV has, with no one seeming to care.

Microsoft Wins Case Against Motorola with the ITC

posted Sunday Jun 2, 2013 by Nicholas DiMeo

Microsoft Wins Case Against Motorola with the ITC

If you've been following our coverage, you'll know we've been keeping you plugged in to what was happening with the whole "Motorola wants to ban the Xbox 360" saga. Back in December there was an update in which the International Trade Commission (ITC) said they would not decide on the matter until next year. Well, next year is now here and we have another update for you; it just happened to slip through the cracks last week because, you know, there was a bunch of other news involving Microsoft happening.

Start up your Xbox 360s and rejoice at the fact that Microsoft has won the case versus Motorola. The ITC has found that Microsoft is not guilty of any sort of patent infringement that Motorola was claiming they were doing. These patents, by the way, were involving the methods in which the 360 handled video transmission and compression, along with several claims on the console's Wi-Fi capabilities. So, as it stands, Microsoft only has to pay Motorola 3.5 cents per Xbox 360 sold, but Google - who owns Motorola - still has to pay Microsoft in upwards of $10 per Android handset sold. I believe this makes Microsoft the clear victor, no matter which way you look at it.

Obviously happy, a Microsoft spokesperson said,

This is a win for Xbox customers and confirms our view that Google had no grounds to block our products.

And, with their tail between their legs, a Motorola rep said,

We're disappointed with this decision and are evaluating our options.

Best Buy Cuts DVD Floor Space, FYE Says They Will Profit from it

posted Sunday Jun 2, 2013 by Nicholas DiMeo

Best Buy has been in the news a lot lately. From cutting its workforce in August along with its retail footprint to posting an $81 million loss this quarter, trouble seems to keep up with the yellow tag store. This week, in the earnings call that the company announced the big loss in, Best Buy also said they will be shrinking the amount of floor space they give DVDs and Blu-ray discs. They, like many people, have discovered that people are buying physical media less and less, and have decided to - albeit a little late - actively do something about losing money in this area. So, who hasn't seen this radical outlook on the current state of the entertainment industry yet? FYE.

Yes, the company FYE, who has been closing stores down nationwide to a point where they don't even exist in some large markets, has decided to go the other route and instead expand its DVD section to cater to the customers who will be potentially ousted by Best Buy. With FYE posting a $1.8 million profit gain, $800,000 lower than the previous year's Q1, along with an almost $30 million revenue drop year-to-year, the company needs to take drastic measures to really stop the bleeding. And, with as many store closures as we've seen from them, you'd think it would be enough, but sadly FYE feels that this move will actually have them seeing more positive numbers moving forward.

Of course there are some stats to look at. FYE has seen a 6.6 percent drop, on average, in sales overall with each passing quarter. This, they say, is due to less foot traffic and very lackluster sales in the music department. For DVDs and Blu-ray discs, sales haven't even gone up a percent, but still make up almost half of the total income for FYE. So why bank on that category providing revenue and profit growth instead of closing 26 more stores? CEO Bob Higgins, said,

Video sales continue to be driven by strong sales of Blu-ray as competitors exit the DVD business, and the strength and depth of our (disc) selection provides us with a competitive advantage. We've always considered (Best Buy) our No. 1 competitor (in packaged media). We didn't get any impact in the last quarter, but I would expect that in the future we will.

I don't know how far into the future FYE will even make it in the first place. Some analysts are thinking FYE is genius for taking this tactic, but even rental services like Netflix and Redbox are seeing a decline in physical disc rentals, especially now that even Redbox has moved to video streaming. What do you make of this? Is this a smart move for FYE? Sound off in the comments below.

Spotify Finds You New Music with New Discover Tab

posted Sunday Jun 2, 2013 by Nicholas DiMeo

Spotify Finds You New Music with New Discover Tab

When Spotify picked up a second round of funding late last year I knew big things were going to be in store for the music-streaming service, and it wasn't just going to be expanding to eight new markets. Instead, Spotify finally introduced something I've been wanting to see for ages now - a "find new music" feature that isn't the current What's New tab of common Billboard hits.

Six months ago Spotify announced the Discover tab in a press conference but, until this week, nobody saw or heard anything else about. Now, using a better system than what Pandora uses to play you your next track based on what you've "liked," Spotify's Discover software uses your current listening habits, artists and playlists to come up with relevant artists that they think you may be interested it. Further, the service also offers curated content from Tunigo, Pitchfork and Songkick, just to add some more options to your music diet.

Even better, there's an option called Audio Preview, giving you the ability to hear a new track without leaving your place in your current music-listening cycle. Simply click and hold on any play button on any song in the Discover tab and you'll hear said song. Let go of the mouse button and you're right back to where you were. Now, if you don't see all of this yet, don't worry, as this is being rolled out to the web player first, and gradually to mobile and the PC software, so some may get it before others.

Overall, I really like the direction of where Spotify is heading. The company has found the right mix of social to include into its offering, and then has extended the option to listen to music the way you want to, in a very natural and unforced way. The only other competitor that has been able to do that somewhat seamlessly is Xbox Music - and that's simply because you have to get used to not calling it Zune anymore. In the case of Spotify, I'm finally able to have new, and in some cases relatively unknown, artists come right to my screen, without having to search out specific songs and hopefully stumble across some new tunes. Oh, on that note, has anyone else heard of the group RAC? They do some fantastic remixes!

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