Author: Robert Andrews

  • GyPSii Raises Another $11 Million For Mobile Location Sharing


    Gypsii Iphone

    Latitude, Foursquare. There’s no shortage of mobile social location candidates stepping up. Now GeoSentric’s GyPSii of Holland has raised a further $11 million funding for its effort – bringing its total to $40 million.

    The disclosure came in GyPSii’s announcement of a new Twitter app, Tweetsii, that puts tweets first, ahead of GypSii’s Foursquare-style place markers, which let users “check in” to a variety of locations. The funds come from Schroders.

    GeoSentric previously got $13.1 from Horizon Group and Shcroders million in 2007 and is bundled on some Samsung, Nokia (NYSE: NOK) and Telefonica (NYSE: TEF) handsets.

    It’s hard to imagine a dedicated location-based social network becoming successful unless location is just a part of a social experience, rather than its raison d’etre. And, while Twitter and Facebook have gained mass social adoption and Foursquare rising fast on the location front, GyPSii’s window may be challenged (hence, Tweetsii’s entrance). But can one imagine another mobile social acquisition by a handset maker or carrier, a la Nokia’s Dopplr purchase? Yep.

    This funding is “to support marketing and additional development of GyPSii applications”, the company says. GypSii says its OpenExperience API powers locastion-based service for outfits like China Mobile, China Unicom, Telefonica; it’s likely there it makes its money.


  • Cool-Seeking Newspapers Dream Of iPad


    De Telegraaf iPad

    Print publishers can’t wait for iPad to hit the streets next month, perhaps so they can once again start producing info in a similar-looking format to their core products of yesteryear.

    NYT’s flagship app lit the blue touch paper for iPad, Wired also got in on the act early, both Denmark’s Information paper and Penguin Books have imagined themselves on the tablet, even The Economist is getting excited.

    Now Holland’s De Telegraaf newspaper has published a concept video, showing how it’s thinking of approaching the gadget…

    Another Dutch publisher, Sanoma Magazines, says publishers have been having “secretive” talks with Apple (NSDQ: AAPL) about supporting iPad’s roll-out.

    But, for all the iPad concepts we’ve seen lately, many are still only that. De Telegraaf’s video is a corporate montage designed to depict a forward-thinking multi-platform publisher, but it doesn’t exist.

    In fact, it only renders Telegraaf.nl’s existing website on the gadget – and, as Apple watchers will know, Telegraaf’s Flash news videos seen in the clip won’t even work on the iPad.

    Via Emerce.nl.


  • Beet.tv Roundtable: Adobe, Brightcove – HTML5’s No Flash Beater, But We’ll Support It Anyway


    HTML bricks blocks

    On Monday morning, I helped Beet.tv executive producer Andy Plesser host his latest roundtable discussion on the future of online video, at The Guardian’s Kings Place HQ.

    The forthcoming HTML5 standard’s Google-backed video feature now poses a potential challenge to Adobe’s dominant Flash video standard, and is a key piece in Steve Jobs’ refusal to support web Flash in iPhone and iPad. So in this video, I ask Adobe’s EMEA technical advocate Steve Allison and Flash-dependent video player firm Brightcove’s SVP Jeff Whatcott what lays ahead.

    Their answer: HTML5 is interesting, it’s no Flash competitor just yet, but clients want to be on iPhone so we’re gonna have to support it…


  • Nevermind The States, Where Are Spotify’s Domestic Deals?


    Daniel Ek And Martin Lorentzon

    Spotify’s newest carrier partner is… well, actually, it’s an old one.

    The music service is today announcing it will be carried by Finnish telco TeliaSonera over its broadband, mobile and IPTV services. But this is really just an extension of the deal it announced in October with the telco’s Swedish subsidiary Telia.

    The question everyone’s asking about Spotify right now is: when will it find the U.S. carrier partners that will allow it to launch across the pond, circumventing American label scepticism toward the free-with-ads model… ?

    But nevermind America yet – for all the waves and in-roads it’s made so far here in Europe and Scandinavia, Spotify has racked up only two bundled-service deals since launching in October 2008 (the other with 3 UK) – despite pushing hard for premium delivery through services that already having client billing relationships, like ISPs.

    Finnish customers will get to use Spotify via TeliaSonera’s IPTV service starting this summer, but so far, a third, fourth or fifth such contract, nor possible deals to take the app on to games consoles, have not been announced. Chinese mobile carriage is likely, however, through Spotify’s investment from Li Ka-Shing, the chair of 3 UK’s parent.

    Like the Swedish deal, in today’s Finnish announcement Spotify says it’s given country-wide “exclusivity” to Telia. Telcos are keen on exclusivity because Spotify has become so buzzy in Scandinavia. This risks leaving Spotify without the ability to make its service truly ubiquitous in any one nation

    But, if they didn’t already have them, operators in the UK, for example, are already busy starting their own music servicesSky Songs and Virgin Media’s forthcoming project, rumoured to be called MusicFish, for example – while Mog.com is about to pitch for exactly the same kind of partnerships in the UK this year, all potentially reducing the window for Spotify.

    Though it has perhaps attracted more attention, Spotify knows that its free, ad-supported offering will never support the business alone; and that is not the plan. It is an important customer acquisition tool – but why hasn’t Spotify yet signs up any more partners to deliver its premium service? Could it be that ISPs are justifiably replying: “Our customers can already get your free version on our network if they want to”?

    Spotify, as it knows, needs to start tipping its income mix farther toward these premium carriage deals, because they are likely to bring in more than ads alone. Talking about music royalties at the FT’s Digital Media & Broadcasting Conference last week, CEO Daniel Ek said: “Predominantly, our deals are on a revenue share – there’s not a fixed cost – it’s based on what we get in.” That means labels only benefit from the tunes they license to Spotify if Spotify can itself make plenty of money (no wonder U.S. labels are reticent).

    But the labels, at least east of New York, can be pretty happy about this, because Spotify is so good at pulling music pirates in to a legal service that has at least a chance of making good money for everyone. “We’re taking pirates, moving them in to a legal service, getting revenue from that and upselling (to premium),” Ek said.

    Either way, it’s early days for what is still a startup in the spotlight, so let’s just see


  • First Look: How Penguin Will Reinvent Books With iPad


    Penguin's Stargazer iPad book

    As the race to be be ebook format of choice hots up, Penguin is making some bold, experimental bets. These first-look demos of forthcoming books from iPad’s iBook Store, presented by Penguin Books’ CEO John Makinson in London on Tuesday, give an idea how publishers might approach Apple’s tablet…

    Many of Penguin’s iPad books seem hardly to resemble “books” at all, but rather very interactive learning experiences, from its Dorling Kindersley and kids imprints – the Vampire Academy “book” is “an online community for vampire lovers” with live chat between readers, and the Paris travel guide switches to street map view when placed on a table.

    “The iPad represents the first real opportunity to create a paid distribution model that will be attractive to consumers,” an excited Makinson told FT’s Digital Media & Broadcasting Conference. “The psychology of payment on tablets is different to the psychology on a PC.”

    But Penguin’s thinking bigger than just the one device. Makinson said he sees ebooks hitting 10 percent of book sales next year (it’s currently four percent in the U.S. and Penguin’s ebook sales)…

    We will be embedding audio, video and streaming in to everything we do. The .epub format, which is the standard for ebooks at the present, is designed to support traditional narrative text, but not this cool stuff that we’re now talking about.

    “So for the time being at least we’ll be creating a lot of our content as applications, for sale on app stores and HTML, rather than in ebooks. The definition of the book itself is up for grabs.

    “We don’t know whether a video introduction will be valuable to a consumer. We will only find answers to these questions by trial and error.”

    Makinson’s hardly retiring in negotiation with the key players – says he met Apple, Amazon (NSDQ: AMZN) and Google (NSDQ: GOOG) last week. But he views the key issue of revenue share with each as an opportunity

    Asked if he wasn’t about to give away 30 percent of Penguin sales to Apple (as is the split with apps), Makinson told paidContent:UK, during Q&A, this is better than the equivalent print agency model, in which publishers let retailers keep 50 percent.

    Record labels are now lamenting having given Apple so much control of their industry, but Penguin appears to be relishing trying out all these new ebook formats, seeing “the opportunity to test pricing and access to consumer data”.

    Not that Makinson wouldn’t take more from Apple (NSDQ: AAPL). “There is an argument for saying Apple needs the content, that they should be paying us for our content,” he said. But that argument hasn’t worked.

    A copy of Pride And Prejucide might conceivably come with videos of Keira Knightly and Colin Firth (the movie adaptation’s cast), he said, but: “We need to understand how much the consumer will pay for that, we need to engage in dynamic pricing.


  • O2 Rises On Smartphone Usage, Telefonica Looks Strong


    O2 Palm Pre

    Telefonica (NYSE: TEF) manages to get through its 72-page 2009 annual report without making any reference to iPhone, on which its O2 lost UK exclusivity last year – but the carrier also has Palm (NSDQ: PALM) Pre and other touchscreens, and credits “smartphones” generally with growing its subscriber count by 5.1 percent

    Britain’s leading network slimmed churn to just 2.6 percent and found 15.4 percent more voice traffic, but EC-enforced lower call prices meant 8.7 percent less voice call revenue and total average customer revenue is down 4.4 percent. O2 UK more than doubled its broadband lines to 591,514.

    O2 UK clocked 3.5 percent more revenue (€6.5 billion) and 2.3 percent more operating income before amortisation and depreciation (€1.68 billion), in a year when other operators were hard-pressed.

    Across the group, Telefonica annual net profit rose 2.4 percent to €7.77 billion on 0.3 percent better revenue.

    Results | Release | Webcast


  • T-Mobile USA Focuses On Its Network As Rivals Take Share


    T-Mobile Stick Together

    T-Mobile USA 2009 revenue dropped by 1.6 percent due to lower roaming costs, but aggressive network upgrades are beginning to juice the carrier as subscribers opt for data-powered handsets.

    Total revenues were $5.41 billion in Q4, down from $5.72 billion in the year-ago period, but up compared to the third quarter when it reported $5.38 billion. German parent Deutsche Telekom (NYSE: DT) said the currency-converted income it draws form the carrier grew 3.4 percent to €15.5 billion after it doubled its 3G reach to a nationwide 205 million people and increased its download speeds from 3.6Mbps to 7.2Mbps.

    In its annual earnings published Thursday, DT said the upgrade has driven mobile data revenue, led by its flagship Android handsets. T-Mobile USA aims to make the network a 2010 centerpiece, including plans to increase 30 geographic areas to speeds of up to 21Mbps.

    But it hasn’t been all smooth sailing. “Without doubt, business in the United Sates has been difficult,” the annual report acknowledges, saying that its US market share declined slightly because AT&T (NYSE: T) and Verizon signed more customers and because they enjoy advantages like iPhone and greater scale.

    T-Mobile USA added a million customers to finish the year with 33.8 million, but churn upped from 2.9 to 3.2 percent due to “handset innovation and market launches by regional unlimited wireless carriers.” T-Mobile USA reported $1.38 billion in OIBDA in Q4, down from $1.57 billion in the fourth quarter of 2008; OIBDA margin of 30% in the fourth quarter of 2009, compared to 32% in the fourth quarter of 2008.

    Group-wide Deutsche Telekom revenue jumped 4.8 percent to €64.6 billion because it fully accounted for its Greek subsidiary OTE for the first time. But net profit collapsed 76.2 percent to €400,000, in part because of impairments like that UK write-off.

    By the year’s end, T-Mobile Deutschland had sold 1.5 million iPhones since getting Apple’s carriage in June 2009. And Telekom is looking farther ahead, too. “By 2015, we expect a typical mobile customer to require a data volume of around 14 gigabytes a month. In 2007, it was only a few megabytes,” it says in its annual report.


  • Deutsche Telekom Crosses Fingers It Can Ditch T-Mobile UK

    T-Mobile UK lost 16.3 percent of its income through 2009, finishing at €3.39 billion ahead of what parent Deutsche Telekom (NYSE: DT) hopes will be Office of Fair Trading approval for its planned merger with Orange UK.

    T-Mobile UK actually ended with 2.4 percent more customers (17.2 million) – but they were mostly prepay customers, and not the higher-value contract subscribers. DT wrote off €1.8 billion from T-Mobile UK in Q109 due to competition and EC-enforced roaming price reductions.

    Deutsche Telekom is keen to get the merger done, creating the UK’s leading mobile carrier with 32.7 million customers. It’s pledging enhanced network quality, customer service, retail opportunities and innovation as a result – but expect “synergies”, ie. job losses especially in call centres, some of which T-Mobile UK already outsourced last year.

    Group-wide Deutsche Telekom revenue jumped 4.8 percent to €64.6 billion because it fully accounted for its Greek subsidiary OTE for the first time. But net profit collapsed 76.2 percent to €400,000, in part because of impairments like that UK write-off.

    By the year’s end, T-Mobile Deutschland had sold 1.5 million iPhones since getting Apple’s carriage in June 2009. And Telekom is looking farther ahead, too. “By 2015, we expect a typical mobile customer to require a data volume of around 14 gigabytes a month. In 2007, it was only a few megabytes,” it says in its annual report.

    Results


  • The First Ever iPad Newspaper App Comes To Life In Print


    Dagbladet Information iPad app

    Is Danish newspaper Information taking the honour of being first to unveil an app for Apple’s forthcoming saviour-of-media tablet?

    Your eyes deceive you, sadly. What looks like an Information.dk iPad application was actually the front page of yesterday’s printed edition, whose cover story, was devoted to examining which digital paths might lead news economics out of its gloomy uncertainty.

    While the piece itself ran the numbers of Danish media decline and an accompanying piece heard Liberal party calls for for state handouts to be widened from print publishers alone, the mock-up allows us to imagine how first-wave publishers might approach the iPad…

    Information.dk’s fake app holds to a principle I forecast recently – that iPad apps will look a lot like their print forebears – but pares down front-page stories and ads to one apiece. That’s unlike the New York Times (NYSE: NYT) app, which will load its front page with stories; another move that’s not unlike its printed counterpart.

    Via Innovations In Newspapers and TUAW


  • Eurosport Latest To Offer Subscription TV Direct To iPhone Users


    Eurosport Player iPhone app

    Want to watch Eurosport on your iPhone? That’ll cost you £2.39 a month. The sportscaster has released a mobile-app version of Eurosport Player, its direct-to-consumer subscription live service.

    Eurosport launched Eurosport Player in 2008, offering British Eurosport 1 and British Eurosport 2, and it now costs £3.99 a month or £34.99 annually – but the iPhone service comes in cheaper, £2.39 a month or £24.99 a year. The app is free but the in-app subscriptions must renew.

    There are three trends here…
    —Media operators are gaining in confidence that they can charge on mobile where they don’t through other media (Eurosport TV channels are low-tier inclusions in standard Sky and Virgin Media (NSDQ: VMED) packages)
    —The recurring-subscription adjunct offered by Apple’s iPhone OS 3.0 is proving highly attractive to publishers and broadcasters.
    —This is an example of how content owners can go direct to viewers, routing around traditional platform gateways like pay-TV operators.

    Sport could be particularly attractive in all these regards – fans have long used mobile to get latest-score data; maybe they will also want to watch games whilst on the move, too? BSkyB’s Sky Mobile TV app offers a £6-a-month Sky Sports bundle.

    But app users say Eurosport is making them pay once for the Eurosport Player desktop app and again for the mobile app.

    Eurosport already had a free news and scores app, though we don’t know how many subscribers it has. During the 2009 Australian Open, Eurosport Player on the desktop offered coverage from five courts, says Wikipedia.

    Via Digital Spy.


  • UK Newspapers Want BBC Mobile Apps Blocked For ‘Undermining’ Them, BBC Disagrees


    BBC logo

    I wondered how long it would be before print media pointed at the BBC’s new smartphone apps plan as another example of expansion in to their commercial territory. The answer: just 24 hours

    The Newspaper Publishers Association, in an emailed statement, says its members believe BBC apps “will undermine the commercial sector’s ability to establish an economic model in an emerging but potentially important market … This, over the long term, will reduce members’ ability to invest in quality journalism.”

    The NPA already looks like a dog with a bone with this – it says it will ask the regulating BBC Trust, before the apps can go live, to submit them to its Public Value Test (PVT) for new services; it will also lobby the Department for Culture, Media & Sport and the House of Commons’ media select committee…

    But the BBC tells paidContent:UK the apps don’t need the trust’s clearance, arguing they are not a new service because they merely repackage existing content in a new form, and its trust itself tells me it’s satisfied the plans are within the terms of the Beeb’s online service licence.

    NPA’s members are all the big UK publishers – Associated Newspapers, Express Newspapers, Financial Times, Guardian News & Media, Independent Newspapers & Media, MGN, News International and Telegraph Media Group – most of which have launched or are working on their own apps.

    It’s the latest chapter in long-running frosty relations. Many of these groups already regard the BBC News website’s popularity as a barrier to them making substantial advertising or paid content income from their own sites. But if they let that genie out of the bottle, when the site launched in 1997, they’re not about to do so with other new initiatives…

    In its statement, the NPA says BBC.co.uk is "a key obstacle to the development of sustainable advertising and paid-for models for online content provision". Director David Newell…

    “Not for the first time, the BBC is preparing to muscle into a nascent market and trample over the aspirations of commercial news providers.

    “At a time when the BBC is facing unprecedented levels of criticism over its expansion, and when the wider industry is investing in new models, it is extremely disappointing that the Corporation plans to launch services that would throw into serious doubt the commercial sector’s ability to make a return on its investment, and therefore its ability to support quality journalism.

    “The impact of the BBC’s existing online presence is well known. However, this is a very different and particular case. The market for iPhone news apps is a unique and narrow commercial space, which means that the potential for market distortion by the BBC is much greater. This is not, as the BBC argues, an extension of its existing online service, but an intrusion into a very tightly defined, separate market.

    “The development of apps for a niche market does not sit comfortably with the BBC’s mission to broadcast its content to a wide, general audience. In other words, this is not about reach, and we believe the BBC’s efforts – and the considerable investment – would be better directed elsewhere.

    “We strongly urge the BBC Trust to block these damaging plans, which threaten to strangle an important new market for news and information.”

    The BBC Trust has track-record for blocking new BBC online services after commercial-sector complaints. It previously barred the addition of video bulletins to its BBC Local sites after the newspaper industry, which was investing in online video at the time, got worked up.

    The BBC has already had one impact on the commercial mobile apps space – as we’ve reported, it has been sending cease-and-desist orders to third-party app developers who were packaging up publicly-funded BBC content and were selling them for money in Apple’s iTunes Store.

    After sitting on the sidelines during the first two years of the mobile apps boom, due to concerns over app stores’ terms, the BBC is planning free BBC News, BBC Sport and BBC iPlayer apps, with more to follow, its online controller told the mobile industry’s annual summit in Barcelona on Wednesday. Seen through BBC goggles, not taking its content on to platforms is to ignore audiences it thinks it risks losing touch with, like young people.

    As BBC News multimedia editorial development head Pete Clifton wrote: “Our approach has always been simple: web equals mobile; mobile equals web.”

    BBC Trust tells paidContent:UK there was no evidence to suggest a public value test needs to be carried out, but this could change: “The BBC executive has told us the proposal falls within the existing service licence and we’ve not seen anything to suggest otherwise – we’re content on that basis – if we were to receive evidence to the future, that might change.”

    A spokesperson said the trust has other tools, beside a public value test, to scrutinise the BBC’s day-to-day functioning. “This smartphone apps announcement has not been referred to the Trust for approval, and we’ve seen no evidence to suggest that it should be.”


  • SpinVox: Domecq Out, Nuance Will Downplay Consumer Offering


    Christina Domecq

    SpinVox CEO Christina Domecq has left the company following its acquisition by Nuance, which now aims to refocus the service away from the consumer market.

    Companies House documents filed just now show six SpinVox directorships – including Domecq, co-founder Daniel Doulton and recently-named CFO Manoj Parmar –  were terminated on the December 30 acquisition date.

    Nuance’s EMEA marketing director Alan Ranger confirmed to me: “Christina is no longer actively involved in the business; Daniel is still here.”

    SpinVox accounts disclosed in Nuance SEC filings last week showed an inquiry by lawyers and accountants in to administration of the corporate finance led to Domecq repaying the company £125,000; the inquiry concluded personal expenses were not properly disclosed.

    Describing the filing, Ranger, speaking from Mobile World Congress in Barcelona, said: “We wanted to draw a line under it and look to the future.” In January, he told me whether SpinVox bosses stayed on was “down to them”.

    The extent of synergies or restructuring, eight weeks after the deal, is too early to clarify yet, he said: “We don’t have a fully integrated platform yet, but we’re well on the way to having that.”

    The future will be a “network operator proposition” rather than a consumer service. “We’re not going to focus on the direct-to-consumer market. We’ll work on providing operators with a service to their consumers,” Ranger said. But that doesn’t mean SpinVox customers who already pay the company directly will be switched off. “We’ll continue to maintain it,” he added. “It won’t be a focus for Nuance.”

    SpinVox already had several operator contracts and had won carrier contracts in Latin America last year. “There’s more than a billion voicemail boxes around the world,” Ranger said. “Many will be filled up with 10 times messages that people never get around to looking at.”

    This focus will particularly be on “markets where voicemail has been less prevalent”, ie Southern Europe. “Voicemail adoption is 90 percent in France but only 40 percent in Spain and, in Italy, only 15 percent – there’s a good chance, if you ring someone in Italy, it’s just going to ring out with no answer,” Ranger said.

    John Small of SpinVox investor GLG (SEO: 066570) Partners and John Botts, whose Tisbury fund had loaned it £30 million, also exited as directors, along with Jeff Kushner. Nuance installed its own international finance VP Jan Anthierens as a director. “It’s part of the acquisition process,” Ranger said. “Most of the staff that were there are still there.”


  • Livestation Finally Hits iPhone With Live TV Streams


    Livestation channels

    Twenty months after previewing an in-development app that would bring its live TV news service to iPhones, Livestation is finally taking its streaming offering mobile – but it’s resorting to the open web, and not Apple’s application platform.

    Livestation, which was started by Skinkers in 2007 using P2P algorithms acquired from Microsoft’s Cambridge R&D in exchange for a 10 percent stake, has instead launched a service at mobile.livestation.com that will include free channels and its growing portfolio of premium stations.

    This is a similar move to TVCatchup, the third-party web TV service that once drew controversy by letting users “record” TV shows to its online PVR but which is now re-streaming only live channels and in October launched a mobile web adjunct.

    It has 29 general-interest channels while Livestation currently has six (Al Arabiya Arabic, Euronews in English and French, Press TV and RT in English and Arabic). But Livestation CEO Matteo Berlucchi tells paidContent:UK more free channels will be added soon, along with access to the premium channels the service began offering in December for £4.99 a month.

    That freemium mix now seems to be the business model for Livestation. Unlike live-stream-app counterpart Zattoo, it has never stuffed ads in the buffer time before a viewer starts seeing a streamed channel.

    Though Livestation hasn’t got to launch its own-brand app, it has been white-labelling the software to single-channel apps offered by BBC World News, Al Jazeera and Five.

    Berlucchi says Livestation served 45 million video views in 2009 and five million in January, reaching 13 minutes per user session. He plans to make Livestation available on “other IP platforms” in the next few weeks.

    “I think the browser will still play an important role in this world populated by an increasing number of apps,” Berlucchi said.


  • iPad’s Killer App: It Looks A Bit Like A Magazine


    Steve Jobs holding iPad

    What’s the standout feature of Apple’s tablet that promises a step-change in our app economy? There isn’t one. “It’s really just the bigger screen,” says Colin McCaffery, product director at 2ergo, one of the industry’s leading mobile app developers.

    But that won’t dishearten newspaper and magazine publishers. Because, for all the bluster about iPad “saving media”, their real iPad salvation is this: they can present their editions in much the same old dead-tree format they did before that pesky HTML came along.

    “I believe the iPad will be about sitting in front of the TV whilst watching TV, browsing a ‘magazine’,” McCaffery – whose 2ergo made the apps for The Guardian, Fox News, Arsenal FC and others – told me in an interview. “It will switch on in a second, you’ll be straight in to your content – it will be almost exactly like a magazine that you pick up from the coffee table.”

    iPhone developers are currently getting to grips with the new software developers kit that includes iPad features, and 2ergo is already working on firm iPad app projects for four clients. But there don’t seem to be a significant technical upgrades from the iPhone version…

    “The good thing about iPad is all the existing iPhone apps will work,” McCaffery says. “The new SDK allows you to take advantage of a larger screen. It’s going to be even more of an opportunity for newspapers and magazines to monetise their content from a subscription point of view. It looks very much like a magazine.”

    That is likely to mean two things – using the SDK’s other best feature (split-screening) to create iPhone-like apps with multi-columned content; and digital-edition mags and newspapers (which are horribly ill-suited to reading on a PC) may finally get the platform they deserve.

    It’s perhaps no coincidence that Apple (NSDQ: AAPL) has built a device shaped like the pieces of paper that, to publishers’ chagrin, many folk no longer carry under their arm. It was Marshall McLuhan who wrote: “Media come in pairs, with one acting as the ‘content’ of the other.” As if countless digital devices hadn’t already borne that assessment out (iTunes is a CD player reborn as the ‘content’ of a computer), this – to Steve Jobs’ benefit – is also what newspapers, magazines and books will be to iPad.

    One other key development, when combined with the larger screen, may promise also to return the paradigm of paying that magazines enjoyed before the web – it’s the popularity of paid apps and the emergence of in-app charging and renewals, both introduced on mobiles before tablets.

    2ergo’s Guardian app was the first UK newspaper app brave enough to charge a one-off mobile app cost, £2.39, but drew 70,000 downloads in four weeks; mags like The Spectator and MusicWeek, built by ExactEditions, charge by the month…

    Some may remark the Guardian app means only one-off revenue for the news publisher and no recurring income, but don’t rule out in-app charging just yet. “There are different types of content and applications within the app that we’ve got in development,” McCaffery says. We understand Guardian News & Media considered charging an obvious and easy decision from the outset; its editor last week forecast “significant revenue” from iPad”.

    That app’s success may also be emulated by “a similar newspaper client” for whom 2ergo is developing “a subscription-based offering – probably advertising and a weekly subscription in the app”, McCaffery says.

    “There’s a real large opportunity for newspapers and magazines to have subscription models,” says McCaffery. “We’re now seeing print media companies come to us and, from the start, have decided it’s going to be a weekly or monthly subscription.” This works on mobile because “from a consumer point of view, it feels more like a newspaper package; they feel more comfortable with that”.

    Paid mobile apps plus a larger screen would seem to equal a kind of digital magazine that actually makes real non-advertising money. But, for now, credit iPhone, and not iPad, with being the larger contributor to that equation.

    “There’s lots of things that we are pushing the boundary on already just with iPhone,” McCaffery says – for example, the Guardian app’s off-line sync, favourite-journalist streams and gallery view; the Arsenal app’s match highlights, available a day after a game. “There’s plenty left to go with the existing SDK.

    “I’m going to withhold my views on the uptake of the iPad,” McCaffery adds. “It’s going to be a smaller uptake.

    “One school of thought says it will be nowhere near as high as iPhone – but you never know with Apple. There was dismissal of Apple entering the phone industry – supposedly, there was no way they could make it anywhere as usable as a Nokia – look what’s happened.”

    Smartphones, e-readers and tablets will be hot topics at our upcoming paidContent 2010, Feb. 19 in New York. We’re nearing a sellout but you can still register.

    Disclosure: Our publisher ContentNext is a wholly owned subsidiary of Guardian News & Media.


  • Shazam Putting More Daylight Between Free And Paid


    Shazam mobile iPhone app

    The increasingly popular mobile music app Shazam is further distancing its new paid-for apps from the free version that made its name…

    It’s introducing new features – tour information for tagged artists and starting Last.fm internet radio stations from those artists’ music – that will only be available in the £2.99/$4.99 Encore and (Shazam)Red versions of the iPhone/iPod touch app, introduced in November.

    By our reckoning, Shazam is proving one of the most successful mobile apps out there – now its freemium strategy is set to make it rich…

    —Shazam drew a respectable 20 million users between 2002 and 2008 but the rise of apps gave it 500,000 new users every week last year…

    —So it jumped to 50 million by end of 2009. Now it’s planning on doubling to 100 million this year, before a possible IPO. Don’t bet against that target – Shazam is now getting 750,000 new users every week.

    —Of two million songs Shazam users “tag” every day, 13 percent convert in to actual song purchases, CEO Andrew Fischer told Midem last month. That means a rev share from a whopping 260,000 transactions every day that Shazam sends to affiliates like iTunes.

    When it released its premium apps, Shazam also issued upgrades to the free version that now limit long-time free users to just five free tags a month. We heard one or two complaints about the tactic, but it’s proving successful for Shazam – both Encore and Red are riding high in iTunes Store’s paid-for music apps chart. The new features, lacking from the free version, may drive even more people to pay for the premium counterparts.

    The new tour feature includes geolocation and recommended gigs. The Last.fm radio feature requires Last.fm’s own app, which is fired up by Shazam when needed. Teh Shazam blog info is not as big a premium driver as either of those two.

    Related


  • SEC Watch: SpinVox CEO Used Company ‘As A Current Account’ While Clocking Up Massive Losses


    Christina Domecq

    SpinVox’s CEO Christina Domecq had to pay back £125,000 to the company after an investigation in to her use of corporate finances, according to a detailed 70-page filing made by new owner Nuance to the SEC.

    The investigation was ordered by SpinVox’s board in July, when, after paidContent:UK lifted the lid the company’s financial troubles and heard such claims from staff, a dossier of complaints was handed to the board by shareholders, advisers and suppliers.

    The SpinVox accounts released by Nuance are brutal; they are a sea of red ink, showing little inclination to protect the managers of the company it acquired in December. Amongst other things, they reveal the conclusion on CEO’s unaccounted expenses: “The company did not adequately capture all necessary information to administer PAYE properly and to identify expenses that were personal to the CEO.”

    That meant it failed to pay UK tax properly on “benefits in kind for employees including the CEO, benefits and expenditure that could fall to be treated as personal for the CEO and incorrect application of taxation to bonuses for the CEO”. Her Majesty’s Revenue & Customs fined SpinVox, but fines could keep coming, the documents warn. The company was without a full-time CFO for 15 months while this went on—filling that gap might have helped make the accounts more transparent.

    The documents concede that: “Bonuses were satisfied partly by the company meeting the cost of various personal expenses of Ms Domecq. Employment taxes withholding PAYE was not deducted on bonuses declared. The effect of these matters was to create a current account between the company and Ms Domceq.” The company even owed Domecq £72,000 at one point.

    Transfer of company funds: (1) SpinVox had paid £96,032 in 2008 to Ojala Ltd, “a company owned by a trust of which Ms Domceq is a discretionary beneficiary, in respect of its purchase and sale of shares in the company”. (2) SpinVox also paid up £38,400 in rent for a property used by Domecq, under an Ojala rental agreement, between February and January 2009.  (3) SpinVox had paid a total £153,000 for translation services to Celtic Communications, a company of which Domecq and co-founder Daniel Doulton were former directors.

    As well as paying back £125,000, Domecq also agreed to “revise certain of her employment terms” after the investigation, the documents state.

    Staff’s stock-for-salary was worthless: Much of this started to go public when we reported that staff were being offered share options in place of salary while SpinVox weathered financial woes in July and August 2009; the offer was accepted by most. But those options were useless: “During the nine months ended 30 September 2009, the company granted 104,000 stock options to employees of the company. The 2009 stock option grants were valued using a Black-Scholes option valuation model and determined to have an insignificant value”.

    Indeed, by the time the owners of SpinVox’s massive debts were paid off in Nuance’s acquisition, there was literally nothing left for employees.

    Company defaulted on loans: Management admitted in September that they failed to comply with loan covenants.

    Massive losses: January-to-September losses hit £56.4 million – a quarter higher than the year before.

    Nuance got a bargain: Although the acquisition price was $102.5 million, after debt repayments, Nuance only paid a “nominal consideration” for SpinVox. But it now plans to “rationalise and reduce” combined SpinVox-Nuance staff.


  • Rusbridger: ‘iPad Could Produce Significant Revenue Streams’

    It’s not exactly a great leap from publishing an iPhone app to offering one on the soon-to-be-released iPad – not only will the former run on the latter; the skillset for developing the latter won’t be significantly different.

    So publishers who have already found a degree of incremental revenue from iPhone are now looking for another increment from its bigger brother…

    Guardian editor-in-chief Alan Rusbridger, whose newspaper shifted 70,000 downloads of its £2.39 iPhone app in its first month despite the company opposing web paywalls in principle, tells Reuters

    “That’s not a transformative thing, but it is a signal that people are prepared to pay on mobile. It’s perfectly possible that the iPad, if we get the right functionality and design, could produce interesting, significant revenue streams.”

    If we can make people pay on mobile, then we should – what I’m against is a universal paywall that puts all your content behind.”

    Disclosure: Our publisher ContentNext is a wholly owned subsidiary of Guardian News & Media.

     


  • Updated: Amazon’s Stanza Bows To Apple’s E-book Sharing Request


    Stanza

    Does Apple’s iBooks ambition mean a new DRM regime for existing e-book app makers? Less than a week after the new iBooks store was announced alongside the iPad, the Amazon-owned Stanza iPhone e-books app has released an upgrade, the version notes for which read: “Removed ability to share books via USB as required by Apple.”

    Amongst the leading iPhone e-book apps, Stanza allowed users to transfer books from their computers to the handset using both cable and WiFi via an accompanying desktop application. The WiFi sync feature remains; it’s unclear why the wired transfer feature alone has been nobbled, the wireless method means Stanza Desktop remains effectively a free book server.

    Amazon’s Kindle, iPad’s existing e-book rival, already had a Kindle iPhone app of its own, but Amazon acquired Stanza developer Lexcycle in a further strategic move in April 2009. On Stanza’s first birthday in July, Lexcycle said the app had clocked up two million downloads and generated 12 million e-book downloads; some paid, some free. In other words, Amazon’s existing place in the iOS e-book apps market is one of the biggest challenges, if challenges exist, to Apple (NSDQ: AAPL) making a success of its upcoming iBooks store.

    Stanza’s forums have been hearing one or two complaints from users. Lexcycle tells TechCrunch it’s “forbidden from discussing the specifics of our conversations with Apple on this matter”. Apple previously required developer DigiDNA to remove a similar desktop USB file transfer feature from its FileAid app, though that decision was later turned around.

    Update: Apple tells us: “We requested Stanza remove the USB functionality in their app as it was a simple case of the developer using private APIs in violation of the developer agreement.”


  • T-Mobile/Orange UK Merger Draws Competition Scrutiny


    Orange UK's Tom Alexander and T-Mobile UK's Richard Moat

    That’s what you get for saying your merger will give you 37 percent of all UK mobile subscribers. The UK government’s Office of Fair Trading says it’s asking Europe’s permission for it – and not the European Commission – to review the proposed 50/50 merger of Orange and T-Mobile’s UK divisions, in order to decide whether to refer it for an even fuller inquiry…

    The OFT yesterday made a request to the European Commission (EC) to refer the UK aspects of the proposed joint venture between Orange UK and T-Mobile UK to the OFT.

    The OFT’s initial view, following consultation, is that the joint venture threatens significantly to affect competition in mobile telecommunications in the UK.

    If the request is granted, the OFT intends to examine the proposed joint venture with a view to deciding whether it should be referred to the Competition Commission for an in-depth investigation.

    It’s hard to see how the OFT, if it gets to review the proposal, won’t conclude that the deal is a “relevant merger situation” that will result in a ” substantial lessening of competition” under competition law. Orange and T-Mobile said they would retain separate branding for 18 months but would “review branding alternatives” afterwards – ie. form a single operator. They’re also hoping to cut costs by identifying customer support as a savings area.

    Orange and T-Mobile had wanted an inquiry to be conducted in Brussels, but rivals like O2 were keen that the UK conduct its own inquiry, Times Online reported. T-Mobile has been losing money in the UK and Orange could do with strengthening.


  • That Was Quick: Already, A Fund For iPad App Developers


    Apple iPad ibookstore Demo

    Well, that didn’t take long. Less than 24 hours after Steve Jobs announced an iPad that will support larger-resolution downloadable apps, UK regional development fund Northern Film & Media (NFM) is opening a fund with which it will specifically support iPad app developers.

    NFM is setting aside £40,000 for the fund; applications close on February 24. That may not sound like much, but consider that the fund has been created for NFM by Ewan McIntosh, the former 4iP investment commissioner who helped Channel 4 launch an iPhone app fund that eventually helped finance AudioBoo, You Booze You Lose and MirrorMe apps.

    And this may be about first-mover advantage. “There’s a good chance of apps we fund being stop of the iPad app store,” McIntosh told me. “This is about specifically highlighting iPad apps in what has become an overcrowded marketplace for iPhone apps. Even last year, newly-launched iPhone apps, whilst a good idea, have been struggling against the tide in the app store.”

    Applications must come from developers based mostly in the north-east of England. The total funds on offer could reach £80,000 in cases of match-funding and could be larger, with NFM eyeing co-equity co-investments together with NorthStar Equity.

    It’s fair to say that the iPad hasn’t saved all our media overnight – but it does extend the iPhone app opportunity, which is allowing some publishers to profit from iTunes’ billing platform, in to a realm where larger-screen apps may be attractive to some people.

    It’s highly likely that newspaper publishers will augment their iPhone apps by offering a larger-version iPad equivalent. The New York Times (NYSE: NYT) has already done so, but Bauer Media’s consumer digital product manager David Williams told me: “The Developer kit has only just been released hasn’t it? Early days.”