BoomTown » NBC Universal

Fox Slaps Back (Legally) at Redbox

Kara Swisher — Thu, 01 Oct 2009 23:03:13 +0000

In the ongoing fight between Redbox–which rents DVDs from kiosks for $1–and major Hollywood studios, 20th Century Fox Home Entertainment just filed a brief to dismiss Redbox’s lawsuit against it.

Said Fox in a statement:

“Redbox’s legal claims are fatally flawed. Fox’s filing today makes clear that, in the end, the case is all about Redbox’s refusal to make a business deal on general terms similar to those paid by others in this industry. Instead, Redbox has insisted that Fox sell DVDs to them through distributors, on the date they demand, at the price they want to pay. Unable to get the terms it wanted at the bargaining table, Redbox instead decided to file this meritless lawsuit.”

In a statement, Redbox president Mitch Lowe responded to the filing by stating that Fox was anti-consumer.

“Twentieth Century Fox continues its pursuit to prohibit consumer access to new release DVDs at affordable prices…Redbox remains steadfast in our commitment to protecting consumers’ rights and to providing our customers the DVDs they want, where they want and at the low price they want.”

In two briefs filed this afternoon, refuting Redbox’s allegations, Fox is asserting that it has not refused to provide DVDs to the outfit and has tried to negotiate a deal.

Under contention between the two are the price and terms of when DVDs of hit movies can be released to Redbox.

Redbox has asserted that Fox is violating antitrust laws and copyright misuse in not selling DVDs to the company.

Fox denied that claim in the brief, noting that Redbox simply did not want to pay up in order to get certain DVDs on the “street date,” as do other retailers.

Fox is one of three studios that have become embroiled in lawsuits with Redbox.

Located in Oakbrook Terrace, Ill., and is wholly owned by Bellevue, Wash.-based Coinstar (CSTR), Redbox is seeing strong rental growth due to its $1-a-night price for first-run movies, which the company distributes via its 15,000 freestanding machines in supermarkets and convenience stores, as well as in big chains like McDonald’s (MCD), Wal-Mart (WMT) and Walgreens (WAG).

Its fascinating legal battle with the studios centers around the issues of steep discounting, release windowing and the price for premium content.

Redbox recently sued Warner Home Video, owned by Time Warner (TWX), for denying it the opportunity to buy DVDs without being required to wait a month or more to rent them out.

It has previously gone after NBC Universal’s Universal Studios Home Entertainment, owned by GE (GE) and Fox, a unit of News Corp. (NWS), for similar release restrictions.

The trio’s movies make up 40 percent of the DVD rental market.

In its brief today, Fox noted that it was willing to sell to Redbox directly, rather than via wholesalers, but that talks collapsed over pricing issues.

And while some studios are holding fast to fighting price declines represented by consumer-friendly, idiot-proof tech solutions like Redbox, others are not.

Redbox has inked deals with Sony (SNE); Lions Gate (LGF); Paramount, a unit of Viacom (VIA); and also gets movies from Walt Disney (DIS).

Here are two briefs filed by Fox in U.S. District Court in Delaware, the first, a motion to dismiss the lawsuit by Redbox, and the second to transfer venue to California:

FINAL Opening Brief in Support of Fox’s Motion to Dismiss

Redacted Transfer Venue Brief

(Full disclosure: Fox is owned by News Corp., which also owns Dow Jones, owner of this site.)

Former Bebo CEO and AOL Top Exec Shields and Shine's Murdoch to Form Interactive Content Start-Up

Kara Swisher — Wed, 16 Sep 2009 22:53:45 +0000

Former Bebo CEO Joanna Shields and Shine Group Chairman and CEO Elisabeth Murdoch have formed a content start-up to produce across media platforms, both online and offline, with a focus on social engagement, according to sources.

The new venture, which does not have a name, is being financially backed both by Shine and by Shields, who left AOL this summer after running its community and communications division.

Shields engineered the sale of social networking site Bebo to the Time Warner (TWX) online unit for $850 million in early 2008.

Sources said this new company, based in London, will invest, develop and partner to create a variety of content offerings that also incorporate interactive and social networking elements. It will also help the vast array of Shine content in interactive efforts.

Shields will be CEO of the start-up, which will operate under Shine, an independent and private television production company with programming in 24 countries.

In the U.S., for example, its Reveille unit is responsible for such shows as “Ugly Betty” and “The Biggest Loser.” (Both of which are BoomTown faves.)

Shine’s fast growth has been spearheaded by Murdoch, who is the daughter of News Corp. (NWS) head Rupert Murdoch.

But Elisabeth Murdoch has struck out on her own in forming Shine, which already has shown a strong interactive bent for a television company.

The combination of television and Web content is an arena that many are once again jumping into, aiming at creating branded interactive content, fueled by advertising.

Former NBC Universal exec Ben Silverman–who sold Reveille to Murdoch, in fact–has recently left his programming job at the television network to start a similar kind of company with longtime entertainment and Internet kingpin Barry Diller of IAC/InteractiveCorp (IACI).

And former ABC programming and Yahoo exec Lloyd Braun also runs a television and Internet production company with longtime Hollywood player Gail Berman, including recently creating the Wonderwall celebrity news site for Microsoft (MSFT).

In addition, Yahoo (YHOO) and a spate of small content start-ups, as well as big media companies, are all trying to figure out how to create and monetize content online in a multimedia effort that bridges all kinds of distribution vehicles and more deeply involves viewers.

Bebo was actually trying to do that too. Under Shields, it had been a pioneer in creating a variety of innovative online original content, including “KateModern” and “Sofia’s Diary.”

But new management at AOL, now headed by former Google (GOOG) exec Tim Armstrong, has sidelined Bebo to its new ventures division and is likely to try to sell it. Company execs at both Time Warner and AOL now say the purchase was a costly mistake.

That might be true, but it was clearly a financial coup for Shields–who has worked at both Google and RealNetworks (RNWK)–and Bebo investors.

And, given the track record of both Shields and Murdoch, it will be interesting to see what they come up with.

Louie Swisher Hearts Redbox–But Hollywood Not So Much

Kara Swisher — Mon, 31 Aug 2009 22:10:02 +0000

If you want to get Hollywood movie studio types irked, mention Google (GOOG). And if you want them steamed, bringing up Netflix (NFLX) will usually work.

But if you want to see the tops of their heads blow off, Redbox is just the ticket.

Except not to their movies, it seems, if the major movie studio execs have their way in an ever-growing legal battle with the DVD-rental kiosk company.

Three of them have become embroiled in lawsuits with Redbox, even as the DVD market contracts.

Well, not for Redbox–which is located in Oakbrook Terrace, Ill., and is wholly owned by Bellevue, Wash.-based Coinstar (CSTR).

It is seeing strong rental growth due to its $1-a-night price for first-run movies, which the company distributes via its 15,000 freestanding machines in supermarkets and convenience stores, as well as in big chains like McDonald’s (MCD), Wal-Mart (WMT) and Walgreens (WAG).

Redbox is arguing that once it buys DVDs from the studios through wholesalers, it can charge any price it wants.

Studios beg to differ, claiming that bargain-basement pricing is hurting the market and that Redbox should not get the goods until after the first month of release of movies into the DVD market.

“These guys are simply grossly undervaluing our content,” said one studio source, in what is a typical sentiment. “We get the windowing model is changing, but we can’t just give these guys our stuff at a low, low price to essentially enable them to give it away…and that’s exactly what they wanted us to do.”

Thus, it’s a perfect set-up for legal high jinks about the issues of steep discounting, windowing and the price for premium content.

Redbox recently sued Warner Home Video, owned by Time Warner (TWX), for denying it the opportunity to buy DVDs without being required to wait a month or more to rent them out.

It has previously gone after NBC Universal’s Universal Studios Home Entertainment, owned by GE (GE) and 20th Century Fox, a unit of News Corp. (NWS), for similar release restrictions.

And while some studios are holding fast to fighting price declines represented by consumer-friendly, idiot-proof tech solutions like Redbox, others are not.

Redbox has inked deals with Sony (SNE), Lions Gate (LGF), Paramount, a unit of Viacom (VIA), and also gets movies from Disney (DIS).

It’s a fascinating case to watch–yet another wrinkle in the what-is-content-really-worth question that has been plaguing all traditional media.

Unfortunately for those companies, the kids seem to love it, as you will see from this video I did while renting movies at our local Safeway (SWY) with my seven-year-old son, Louie, at a small competitor to Redbox with about 1,400 outlets called DVDPlay.

We use both, but Louie–like a lot of consumers–is most definitely a fan of the Redbox method.

Here’s the video:

[ See post to watch video ]

[Full disclosure: News Corp. owns Dow Jones, which owns this site.]

More Local Heat: MSNBC.com Buys EveryBlock for Several Million Dollars

Kara Swisher — Mon, 17 Aug 2009 16:00:29 +0000

It looks like the local market is heating up even more, with MSNBC.com announcing the acquisition of Chicago-based EveryBlock.

MSNBC.com–a joint venture of Microsoft (MSFT) and GE (GE) unit NBC Universal–paid several million dollars for the “hyper-local” information site, which is up and running in 15 cities, including New York, San Francisco, Seattle, Chicago and Boston, sources said.

In June, Time Warner (TWX) online unit AOL paid about $10 million to buy Patch Media.

The New York-based start-up is a platform that does deeply localized coverage of communities on a range of topics, from announcements to news to events to obituaries. It is aimed at competing with local newspapers and other media.

EveryBlock takes a slightly different approach, scouring a mass of publicly available data in a variety of U.S. cities from a variety of public records–such as crime stats, building permits and restaurant inspections–and reassembling them into more comprehensible and geographically relevant news feeds, depending on what a user asks for.

It also pulls up related Flickr photos and information from Web sites like Yelp and Daily Candy and can get very granular, down to keeping track of what is happening on your block or neighborhood.

Maps are also deeply integrated into EveryBlock, as it was on an earlier effort–ChicagoCrime.org–of founder Adrian Holovaty.

The innovative little start-up has a tiny staff of a half-dozen, still calls itself a “project” on its Web site and was started with $1.1 million in grant money won from the Knight News Challenge, an annual contest held by the Knight Foundation.

MSNBC.com is the news channel for Microsoft’s MSN portal, whose execs are very interested in weaving more local results into the site, as well as into the software giant’s new search offering, Bing.

The aim of having EveryBlock data integrated, for example, would be to create a local information dashboard on MSN.

Here’s a screen grab of EveryBlock’s take on my zip code in San Francisco, below (click on the image to make it larger)–and a video interview with Holovaty on YoChicago in early 2008:

Yahoo-Microsoft Regulatory Filings Start This Week: Let the Legal Game-Playing Begin!

Kara Swisher — Tue, 04 Aug 2009 10:01:32 +0000

After all the investor hubbub over the oh-no-they-didn’t deal between Yahoo and Microsoft starts to die down a bit, the pair are now embarking on the path that is the only way toward proving the efficacy of them joining together.

That would be getting a variety of state, federal and international regulators to say yes to the wide-ranging online advertising and search arrangement they announced last week so they can start making it work.

According to sources at both companies, a variety of filings will be made this week, including one to the Securities and Exchange Commission that should provide more details of the partnership.

When it was unveiled last Wednesday, the companies said Microsoft (MSFT) will run search technology for the two, while Yahoo (YHOO) will sell the premium search advertising.

That SEC filing could answer a number of questions some still have about the deal, such as whether there is a large break-up fee that Microsoft would pay Yahoo in case the deal is scuttled.

That’s just the outcome that Microsoft and Yahoo are trying to avoid.

“We think of it as an outreach effort to explain how we are creating a strong No. 2 to Google,” said one source close to the situation. “The main goal will be to show that a better competitor in the marketplace is a good thing.”

While the companies are prepping for opposition from Google (GOOG), sources close to the thinking at the dominant search company said it is more likely to be muted and indirect.

That’s especially true since a MicroHoo makes Google–currently under a lot more government scrutiny than ever before–look like less of a bully.

Thus, Google’s tactics would entail less direct statements and more pointing out the discrepancies between what Microsoft said when Google tried to get approval for a search deal with Yahoo last year and what it argues now.

“They will probably not be that obvious, but they will be there still,” said Microsoft CEO Steve Ballmer to me, in an off-hand remark at the software giant’s Financial Analyst Meeting last week.

It’s a game of legal chicken that Ballmer knows well.

Already, for example, Microsoft and Yahoo execs have been aggressively reaching out to major publishers and advertisers to get their staunch support.

That included calls immediately after the deal was announced last Wednesday to such execs as Martin Sorrell of the WPP Group (WPPGY) and Jeff Zucker, CEO of NBC Universal, a unit of GE (GE).

In Washington, D.C., both companies have legions of lawyers to try to make sure the Justice Department, which will review the case due to its antitrust implications, has all the information it might need.

And, more to the point, they want to avoid the debacle that took place when Yahoo and Google tried to get approval for their failed deal last year.

That deal was ended by Google after it became clear that Justice was going to fight it by arguing that top search companies hooking up hurt competition and stifled innovation.

In addition, there might be Congressional scrutiny, with possible hearings, similar to those held when the Yahoogle deal was pending, such as in the Senate Judiciary Antitrust Subcommittee.

And, of course, there are actually independent groups concerned and they have also been in contact with regulators.

“There are questions that must be answered regarding the collection and sharing of consumer data by the two companies,” said Jeff Chester, executive director of the Center for Digital Democracy, a D.C.-based group that works to promote consumer privacy and protection online, in a statement last week. “While the rationale for the deal is to provide some much needed competition to Google (and income for Yahoo), the further consolidation of the global digital advertising system should be a concern to Internet users, privacy advocates, online marketers, and competition regulators.”

Sources said Microsoft and Yahoo also plan to petition regulators in the European Union this week, which is likely to be most concerned about privacy issues involved in their union.

They will also be doing the same in other key countries worldwide, such as Korea, Taiwan and Brazil.

And, finally, given how involved state attorneys general became in beaching the Yahoo deal to partner with Google, they also will be starting outreach to key states, such as California, where Silicon Valley-based Yahoo is headquartered.

“Once again, it will be the Lawyer Employment Act of 2009,” joked one person close to the deal. “At least, that shows there is some economic benefit to this deal already.”

While we all wait in breathless regulatory anticipation, here are interviews I did at last year’s Senate hearings on Yahoogle, with lawyers from Google (David Drummond), Microsoft (Brad Smith) and Yahoo (Mike Callahan).

Incredibly, they are the very same lawyers who will be pretzeling themselves in entirely different shapes than they pretzeled themselves a year ago.

I would expect nothing less!

Here’s the video:

[ See post to watch video ]

Liveblogging Fortune Brainstorm Tech: Disney CEO Bob Iger Has "One Hand in the Present and One Hand in the Future"

Kara Swisher — Wed, 22 Jul 2009 23:55:02 +0000

Bob Iger, CEO of the Walt Disney Company (DIS), was the kickoff interview onstage at Fortune magazine’s Brainstorm Tech conference, which is taking place over the next three days in Pasadena, Calif.

The event is packed full of Web and media luminaries.

So, BoomTown will be sitting in the front row and liveblogging some of the sessions here, including this one, titled, “Digital Kingdom: New Business Models for a Media Giant.”

Translation: When you Twitter upon a star, makes a–big–difference what you earn.

Which, right now, is not a whole lot, as Iger and others in the media business know all too well.

But let’s set the scene: Iger looks like a very typical old-media mogul you might order from an online catalog–handsome, suave and sophisticated, a perfect mix of Hollywood and New York.

Thank goodness, then, that he never seems to have acquired that other irksome characteristic of some of his peers–a full-bored panic over the Internet.

In fact, Iger–whom I also interviewed onstage at the fourth D: All Things Digital conference in 2006–has been unusually fast-forward among many of the big media companies in facing the digital music and dancing.

Fortune writer Richard Siklos asked him about a mishmash of subjects, from subscription services to authentication to cable providers, all of which center around a basic question:

How the heck is Disney going to be paid for its wares–because someday those agelessly lucrative “kids” from “High School Musical” are not going to agree to yet another reunion?

“This is the beginning of the beginning,” said Iger, who noted that it would be folly to guess what’s coming next in the digital arena.

A most excellent point that he made several times, adding that it was important for companies like Disney to keep trying out all sorts of things digitally, until they got it right.

“This notion of protecting the present is something that I talk a lot about [with employees],” said Iger, who wants them not to do that so much.

He noted that running a modern media company meant you had to have “one hand in the present and one hand in the future.”

Iger forgot about the hand that you might need to protect yourself from partners of the present–like big-box retailers, television affiliates, cable networks–who are going to come at you with a cudgel for giving the stuff you sell them away free on, say, Hulu.

Hulu, of course, is the popular, tiny-money-making premium online video service, which is a joint partnership of News Corp. (NWS), GE’s (GE) NBC Universal and now Disney.

“We believe in Hulu,” said Iger, who thinks its business model–currently just online advertising–might evolve over time.

But, he added, he was “somewhat skeptical” of any one answer to what is ahead.

As in: Iger just does not know, which is probably the best thing a media mogul can say right now.

Except for one thing he said is always mindful of–to follow, “where the consumer is going.”

Consumers are going online, of course, which is certainly going to require all-hands-on-deck at Disney in the years ahead.

[Update: It seems Disney was keeping its hand in the present for today, as it apparently had YouTube take down a trailer for its new "Alice in Wonderland" movie, which was set to debut at Comic-Con International in San Diego tomorrow.]

Do That Thing You Do: After Cuts, Both Yahoo and MySpace Need a Little Something

Kara Swisher — Thu, 16 Jul 2009 14:02:42 +0000

A few weeks ago, when I was having breakfast with legendary Silicon Valley entrepreneur Marc Andreessen about his new venture fund, he talked about what he thought was critical to being successful as an Internet company.

Ticking off names, from Apple (AAPL) CEO Steve Jobs to Facebook CEO Mark Zuckerberg, Andreessen said he always favored technical entrepreneurs for one key reason: “You need someone who lives and breathes product.”

It’s a refrain I have heard a lot recently from a wide range of people in the sector, most especially when talking about two of the more challenging renovations of key Internet brands going on of late.

That would be: Yahoo and MySpace.

In recent days, the focus at both Yahoo (YHOO) and MySpace, a division of News Corp. (NWS), has been on cost cuts, management rejiggering and, of course, layoffs, as new leaders at each Web giant are trying mightily to push the reset button. (News Corp owns Dow Jones, which owns this Web site.)

No surprise, their efforts have gotten a lot of attention and have been the subject of a lot of coverage (here for Yahoo and here for MySpace).

But, as those clean-up efforts wrap up, both have to show a whole lot more than that if either is to truly succeed at their tasks–which is to make both services much more relevant and exciting in the fast-changing Web arena.

While Yahoo and MySpace remain huge Web properties–and Yahoo, in particular, is very profitable in comparison to most Internet outfits–the widespread perception across the digital sector for too long now is that they are both tired in some significant ways and in desperate need of innovation.

Their big tasks include an overhaul of product offerings and features, a refreshing of brand and, most importantly, a strategic rethink that will set them on a new course for the next several years.

This is not a new thing in the Internet space, which has seen once-popular companies fall by the wayside as their products have gotten dull and consumers weary.

AOL–the Time Warner (TWX) unit whose new CEO, Tim Armstrong, is trying to reinvigorate that iconic but deeply tarnished brand too–is the classic example of this problem. But there have been too many that either hobble along, get subsumed into a larger company or just wither and die.

Sudden death is not likely to be the case for either Yahoo or MySpace, but time is most definitely running out for the pair to show some true product pizzazz and a strategic road map.

At Yahoo, most of the glitter thus far has come from the personality and charms of CEO Carol Bartz (pictured here), who has been hard at work projecting an image of moxie and decisiveness in her efforts to get some momentum at the turmoil-plagued company.

Replacing former CEO and co-founder Jerry Yang, Bartz has largely been busy cutting staff, pruning products that she recently dubbed “space debris” and rounding out her executive staff.

She’s also been prepping a new branding campaign to accompany Yahoo’s overhauled front page, which is set for the fall.

But, as the famous Peggy Lee song (see video below) goes: “Is that all there is, is that all there is?/If that’s all there is my friends, then let’s keep dancing/Let’s break out the booze and have a ball/If that’s all there is.”

But breaking out the booze and having a ball is actually not such a bad idea. To my mind, instead of tweaking what is there and emphasizing what it has been, Yahoo now has the chance to just go for broke and boldly make some dramatic choices.

That is especially true if it forgoes a search and online advertising partnership with Microsoft (MSFT), since Yahoo is going to have to do more than just what it already does better.

Interestingly, it is Microsoft, with its well-reviewed new Bing search service, that seems the most aggressively innovative these days.

So, why not, for example, make a shocking move, say, into the premium online video space? Yahoo certainly could pick up some damaged goods, like Veoh and Joost, on the cheap.

But what about buying the early winner: Hulu?

While the three studios that are its joint owners (the fourth owner is Providence Equity Partners)–News Corp., Disney (DIS) and GE (GE) unit NBC Universal–don’t seem inclined to sell, many sources close to the company said they most certainly would for the right price and perhaps a stake in Yahoo too.

Yahoo has been one of Hulu’s many distribution partners, but that effort has been lackluster. As owner, it would surely point its vast traffic and tech resources at Hulu to good effect.

In this kind of scenario, Google (GOOG) and Comcast (CMCSA) are also contenders for Hulu, but it is only Yahoo that has the truly better record of being able to create, manage and distribute Web content.

Plus, you could call it: HuHoo or YaLu or, better still, HooLu.

There are lots of ideas along these lines for Yahoo, but the overarching idea is to dominate in areas its rivals do not.

For MySpace, which was the dominator until rival Facebook cleaned its clock and then some, it is both a crisis of identity, a broken consumer experience and technology that needs a major overhaul.

It is hard to say what MySpace is, except really noisy. While the music part of that is good, the idea of making it hip again seems well-nigh impossible.

But it could be useful as an entertainment hub where it is fun to be. News Corp. CEO Rupert Murdoch raised this concept recently, in fact, and it is a good one.

That’s because Facebook is aggressively un-fun, with a fascist design sensibility and a thick ethos of utility and enforced busy-ness. Whenever I use it, I always start to feel like I am 23 minutes late.

There really is no good overall and unified entertainment hub on the Web in a massive way–one that aggregates all kinds of interests. I would, for example, love a place where I could easily live in a “Gossip Girl” universe.

Best of all, such a direction moves MySpace well away from Facebook, where is needs to get pronto.

MySpace CEO Owen Van Natta (pictured here) said as much in a memo to employees yesterday:

“As I’ve said before, simplifying and unifying our site is fundamental to our success going forward. MySpace should feel like one platform–not 15 sites loosely stitched together. We consider our diverse content offering a strength but too many logos and disorganized verticals makes the site difficult to navigate and creates confusion about our brand identity. Our users don’t know if we’re a social portal, a music site, or an entertainment hub.”

In her own memo last week, Bartz also talked about the need for speed and definition of Yahoo:

“I’ve noticed that since the reorg, people seem like they’re waiting for something. I’m not sure if it’s a sugar-low or what, but we need to stop waiting and get moving. Good things do not come to those who wait, they come to those who make things happen.”

Actually, per Marc Andreessen, good things come to those who make things. Wonderful things, fun things, memorable things and, if you are Steve Jobs, just one more thing.

Let’s just hope in the case of Yahoo and MySpace, they don’t settle for just any thing.

Until they do that thing they do, here is a catchy video from the movie, “That Thing You Do”:

Mike Volpi Jumps From Joost to Index: A BoomTown Interview (And Full Press Release)

Kara Swisher — Mon, 06 Jul 2009 12:30:39 +0000

Two years ago, Index Ventures was part of a group that invested $45 million in Joost, the then-hot-and-hyped online video service, while bringing on well-known tech exec Mike Volpi (pictured here) as CEO.

Now, he is headed to Index as a partner at the venture firm, in what some might think is an ironic move.

That’s because last week, after much effort to get traction for Joost, Volpi announced that the service was undergoing a major shakeout–drastically cutting staff and shifting its business model and strategy.

Volpi also stepped down as it top exec, although he will stay on as chairman of Joost.

The development for the much-hyped Joost caused a small hubbub across the Internet, with much second guessing over could-have, would-have and should-haves about its strategies and product.

At Index, according to the press release, Volpi will be “based in the London office as part of the venture team where he will lead early stage investments in the Internet, telecom/networking and media sectors and contribute to the firm’s later stage growth fund.”

BoomTown talked with Volpi by phone from London about the move, which will be announced today, and about what happened at Joost.

Taking a job at Index, which is also located in London, was a natural one, said Volpi, who made a $10 million investment in Index’s first fund while an exec at Cisco (CSCO).

Over the years, he has gotten to know its partners well, including Danny Rimer.

Volpi also said he thinks it is a great time to be a VC, a new job for him. “In a market downturn, it is a good time to invest,” said Volpi. “There are a lot of great opportunities out there now.”

Currently, he is very interested in Web companies built around transactional business models rather than ad-supported ones, which he thinks need a lot more development to become significant.

Volpi should know, given his recent experience at Joost, which relied on the still nascent advertising business for online video.

“At the end of the day, the consumer offering we had was not working, a lot because we did not have enough access to content we needed to build traffic,” said Volpi.

Joost was competing with outfits like Hulu, which is joint venture of two major media companies, News Corp. (NWS) and GE (GE) unit NBC Universal, as well as Google (GOOG) video unit YouTube.

The video service was started by Janus Friis and Niklas Zennström, whom Volpi met when he served on the board of their last hit, Skype.

Volpi said that to keep competing, it needed more funding. And, since no online video service was making money, he said it was decided a change was needed instead of just keeping on the same path.

Thus, the shift to a white-label video service, becoming a back end for other video players, which is still putting Joost into what is still a very competitive business.

Volpi acknowledged this, although he noted: “It is better to be competing in sector that has profitable rivals than one that does not.”

Discussions with possible acquirers of Joost also did not pan out, due mostly to price issues. But, said Volpi, it yielded some insight about Joost’s future direction.

“Not everyone wanted to pay a lot to own Joost, but a lot of people wanted to rent it,” said Volpi.

Volpi called his time at Joost “a fantastic experience,” which he also hopes will be the case at Index.

In addition, here’s a video interview I did with Volpi when I was in London last year:

[ See post to watch video ]

And here is the official press release on the move of Volpi to Index:

MICHELANGELO VOLPI JOINS INDEX VENTURES AS PARTNER

Technology Executive to Invest in the Internet, Telecoms, Networking and Media Industries

LONDON, GENEVA and JERSEY, 6 July 2009–Index Ventures today announced that Mike Volpi, a renowned technology industry veteran, joined the firm as a partner. Volpi is based in the London office as part of the venture team where he will lead early stage investments in the Internet, telecom/networking and media sectors and contribute to the firm’s later stage growth fund.

During his 13 year career at Cisco, Volpi acquired more than 75 companies and served as Chief Strategy Officer responsible for corporate strategy, business development, strategic alliances, and advanced Internet projects. Volpi then led Cisco’s billion dollar routing and service provider business. For the past two years, Volpi was CEO of Joost, an Internet startup focused on online broadcast TV, and recently transitioned into the role of Chairman. Volpi started his career at HP in 1989.

“Mike has been a close advisor to the Index family for more than 10 years. He has worked closely with several of our portfolio companies such as Skype, TrialPay, Joost, FON and Telegent, even serving on some of their boards, so it’s a natural progression to have him officially join our team,” said Giuseppe Zocco, partner and co-founder, Index Ventures. “Mike’s world-class leadership qualities, transaction experience, and network make him a great addition to our partnership and will enhance our ability to serve our portfolio companies.”

“Venture has become a global business and I’ve watched Index take their place as a marquee name by investing in industry-altering businesses such as Betfair, MySQL and Skype,’ said Volpi. “I’m excited to become part of this team and look forward to helping Index partner with the next generation of great entrepreneurs.”

“Index companies have benefited from Mike’s wide ranging experience and his perspective will be invaluable as we continue to identify disruptive companies to invest in,” said Danny Rimer, Index partner.

“Mike has been a great source of strategic advice and has opened many doors for Telegent ever since Index invested in the company,” said Weijie Yun, CEO of Telegent Systems. “We highly value his perspective and we look forward to working with him even more closely now that he is a permanent member of the Index Ventures team.”

NBC Universal President and CEO Jeff Zucker: The Full D7 Interview

Kara Swisher — Thu, 02 Jul 2009 19:37:34 +0000

Jeff Zucker runs one of the world’s leading media and entertainment content companies, which is also being caught in the throes of a major shift, due to the impact of the Internet over the last decade.

In this onstage interview with me at the seventh D: All Things Digital conference, Zucker talks about the state of the television business; the changing advertising market; the impact of Hulu, an online premium video joint venture the GE (GE) unit NBC launched with News Corp. (NWS); and precisely what he meant when he said that the Web was turning “analog dollars into digital pennies.”

Here’s the video of the full D7 session (the video does not include a short intro video done by NBC’s “Late Night” host Jimmy Fallon, which includes a ribald joke about Zucker marrying Courtney Cox):

[ See post to watch video ]

Another Top Exec Gone From FIM, as It Readies a Name and Structure Change

Kara Swisher — Mon, 22 Jun 2009 21:00:58 +0000

Mike Angus, EVP and General Counsel of Fox Interactive Media, is departing that job for another in New Corp. (NWS), as new digital head Jon Miller continues to reshape the division.

Last week, BoomTown reported that FIM CFO Ed McKenna was leaving his post and also the company, part of many changes taking place related to News Corp.’s digital properties. (News Corp. owns Dow Jones, which owns this Web site.)

It’s all part of a major rejiggering of FIM, which came into being almost four years ago, although not an elimination of the unit, as has been reported.

More likely, it will include a name change–perhaps to the Digital Media Group–as well as a much streamlined organization that gives more autonomy to FIM’s Web, online advertising and publishing technology units.

The largest of those Internet sites in FIM is, of course, MySpace.

Since Miller arrived in the early spring, he has focused on fixing the troubled, but still huge, social-networking site.

He quickly replaced its co-founder and CEO, Chris DeWolfe, with new managers.

Those execs, led by former Facebook exec Owen Van Natta, have done massive layoffs at MySpace recently and are now beginning a major overhaul of its product, which needs to innovate after a fall-off of growth and engagement.

“In a lot of ways, FIM has become an artificial construct and a lot of the infrastructure it has created should be out in the individual businesses,” said one person close to the situation. “So, since it is not really an operating unit, it will be taken down to the minimal size to make it work.”

That apparently means it does not need a separate CFO or even a general counsel.

Currently, there are about 100 FIM-only employees, mostly in human resources, accounting and legal. Some of those will likely be farmed out to the units they primarily service or be let go if those units decide they do not need the staff.

The original idea of FIM was to create a unit to house most of News Corp.’s standalone digital units, including MySpace and IGN videogame and entertainment sites, and to have common financial, legal and even ad sales execs to serve them.

The concept is that they all had tech, legal, policy and synergistic reasons for being together.

Said a News Corp. press release from July 2005, which announced both the Angus and McKenna hires:

“News Corporation today announced the formation of Fox Interactive Media (FIM), a new unit that will leverage the strength of Fox’s distinctive entertainment, news and sports brands across the Internet to offer a richer online experience to its millions of users.”

That construct, said many people I interviewed inside and outside News Corp., was built to accommodate a much larger unit, with additional large acquisitions after the MySpace one.

Those never happened, although News Corp. was in many such talks with giants such as Yahoo (YHOO), Time Warner (TWX) online unit AOL and Microsoft (MSFT) about trading assets.

“Over time, FIM became more like a shadow government,” said one person familiar with the situation. “Now, it makes sense for the properties to govern themselves, with a lot less meddling and let them rise and fall on their own.”

Many News Corp. sources point to the success of premium video service Hulu, which is run as a joint venture with GE (GE) unit NBC Universal, as being managed relatively autonomously by experienced Internet execs with less corporate involvement.

The result has been a popular and fast-growing site, which has gotten kudos for its innovative consumer offering (although it is still working on finding a highly lucrative business model).

Does that mean that some units, such as MySpace, could even be spun out again?

Doubtful for now, said several sources, but still a possibility.

In any case, the idea of a corporate layer over corporate units within a larger corporation does seem less than fleet in the faster-moving Web 2.0 world.

As to the new name of the unit, besides the chief digital officer title, Miller also was given the title of chairman and CEO of the newly created News Digital Media group.

Therefore, several sources said that the units could be under a simpler and lighter Digital Media Group umbrella.

In Case You Missed It, Here's the Print Version of D7, Um, Online!

Kara Swisher — Wed, 03 Jun 2009 09:53:06 +0000

Yesterday, The Wall Street Journal did a special Technology Report section, made up of excerpts of selected interviews from the seventh D: All Things Digital conference.

It includes sessions with Microsoft (MSFT) CEO Steve Ballmer ringing in Bing; Yahoo (YHOO) CEO Carol Bartz trying to find a reason to curse at BoomTown; Roger McNamee and Jon Rubenstein of Palm (PALM) introing the Pre; Twitter Co-Founders Biz Stone and Evan Williams saying “we do not know” was the microblogging service’s mantra; entrepreneur Mark Cuban talking smack about the Internet; cable legend and Liberty Media (LMDIA) Chairman John Malone cracking wise; and NBC Universal (GE) head Jeff Zucker doing the Hulu.

As the event’s hosts and interviewers, Walt Mossberg and I also did a mini-essay about the event, in which we continued to jest about various goofy names that digital eras had been given.

As we wrote:

“Before the seventh D: All Things Digital conference, which took place last week in Carlsbad, Calif., we declared—with our tongues firmly planted in our cheeks—that Web 2.0 was over and Web 3.0 had begun.

While we were poking fun at Silicon Valley’s incessant need to stick a hyped-up catchphrase on each and every development, the use of such jargon was actually important, because we think that the digital sector is now moving full bore into an entirely new cycle of profound change.”

We decided to focus in on smart phones and the mobile platform as critically important in the next era, although what we were talking about was the complete integration of computing into every part of our lives in a way that is seamless, ubiquitous and, ideally, dead simple.

As we also noted in the essay:

“From using easy gestures to grab any piece of information from the Web to having powerful computers in the palm of your hand to being able to quickly dip into complex social networks to getting real-time information from across the globe as it happens, this is an era when computing could become as integrated and invisible as electricity and just as important.”

So read all about online and in print (if you saved a copy) and you can also watch video highlights on this site too.

But, best of all, All Things Digital be posting the full video of all the sessions on this site soon.

Sugar Media Say Buh-Bye to NBC Universal–Raises $16 Million From Sequoia Capital, Buys Shopflick and More

Kara Swisher — Mon, 01 Jun 2009 22:33:07 +0000

San Francisco-based Sugar Media, which specializes in Web sites aimed at women, cut its ties with NBC Universal by buying back its shares and got a Series C funding of $16 million from Sequoia Capitol.

Sequoia has been an existing venture investor, having put $5 million into the start-up in late 2006. NBC, a unit of GE (GE), invested $10 million in 2007.

It is unclear at what discount the shares were bought back at, but it seems likely. NBC had been selling online advertising for the site, an arrangement which had previously ended.

Sugar, which runs the flagship PopSugar.com site, also announced it has bought video shopping start-up, Shopflick, and had hired its CEO to run a new Los Angeles-based entertainment unit called Sugar Digital Entertainment.

David Grant was former president of Fox TV Studios and his new unit will be charged with expanding into video, TV and film with Sugar-branded content.

Here’s a video interview BoomTown did with Sugar in 2007:

[ See post to watch video ]

And here’s the full press release:

Sugar Inc. Launches Sugar Digital Entertainment with former Fox TV President

New Unit to Expand Sugar Brand into Video, TV and Film; Sugar has also Acquired Video Shopping Start-Up Shopflick.com and Completed a $16 million Series C Funding from Sequoia Capital

San Francisco, CA, June 1, 2009–Sugar Inc. announced today a series of steps to expand and diversify the fast-growing woman’s lifestyle media company.

Sugar is launching Sugar Digital Entertainment, an LA-based unit that will expand the Sugar brand into online video, television, film, videogames and other content formats. David Grant, former President of Fox TV Studios, Exec VP of the FOX Network and founder and CEO of Shopflick.com, joins Sugar as President of SDE with a mandate to work with talent and media partners on Sugar-branded projects.

Sugar has acquired Shopflick.com, the video-powered fashion marketplace founded by Grant in 2008. Shopflick is a pioneer in online video-driven shopping, with a critically-acclaimed brand that has quickly built a following with both designers and shoppers. Shopflick will enable Sugar’s ShopStyle–the leading social shopping destination for women–to pioneer a new video-driven commerce offering for its merchant partners.

Sugar also announced that it has completed its Series C funding by securing $16M from existing investor Sequoia Capital. Sugar intends to use the funds for acquisitions and international expansion to support the company’s growth into a major media company targeted to women’s lifestyle. In conjunction with the transaction, the Company has repurchased shares sold in 2007 to NBC Universal.

“These moves further our rapid growth into a leading media company,” said Brian Sugar, founder and CEO of Sugar Inc. “Sugar Digital Entertainment, run by an executive with a successful track record in television and digital, will leverage our brand and expertise into online video, TV and film. Shopflick’s team and online video expertise will enable ShopStyle to further leverage the powerful relationship between content and commerce, an area of vast potential online. In short, we have become a media company with exceptionally diversified revenue streams encompassing advertising, commerce and license fees.”

David Grant, founder and CEO of Shopflick.com said: “Sugar has tapped into the passions and interests of women in a way other media companies can only dream of, so I see this as a big opportunity to help the founders take an already successful company to another level. Sugar’s brand and expertise in women will play a role in creating great video content on all platforms, including online, TV, film and wherever smart, passionate woman are gathering. I am equally excited about finding a terrific home for the Shopflick team and the opportunity to turn our vision of video-driven shopping into reality for the millions of women who visit Sugar every month.”

Exclusive: BlogHer Nabs $7 Million in New Funding

Kara Swisher — Wed, 13 May 2009 11:00:10 +0000

BlogHer, which bills itself as “the community for women who blog,” has gotten $7 million more in a Series C funding, which will bring the total investment in the site to about $15.5 million.

The new round includes a return by two existing investors, Venrock and Peacock Equity, a fund run by GE (GE) and its NBC Universal unit. Azure Capital is joining as a new investor.

In an interview with BoomTown, BlogHer CEO Lisa Stone said the site’s recent fast growth was the impetus for the new round, in order to improve tools offered to its 2,500 vetted bloggers as well as investing in better research and advertising technology.

“This is a true grassroots effort that shows the growing influence of women in social media,” said Stone. “We want to focus on taking advantage of that growth and momentum with this new funding.”

According to the start-up–which was founded in 2005 by Stone, Elisa Camahort Page and Jory Des Jardins and now has 30 employees, located mostly in Silicon Valley–the BlogHer Network reaches more than 14 million unique visitors a month.

Besides the site, BlogHer also runs a popular conference and is hoping to expand its suite of social-networking tools as well as its publishing and advertising network.

“We have been trying to create a place for women to participate in social media with civil respect and also to engage readers,” said Stone.

While it is not yet profitable, Stone added, BlogHer is ahead of its internal financial projections, and “I hope next year I can raise a glass of champagne to meeting that goal.”

Welcome to Lucky D7: Still Gambling on the Digital Future

Kara Swisher — Mon, 04 May 2009 07:15:55 +0000

Incredibly, this is the seventh year of the D: All Things Digital conference.

We feel very lucky to get here, especially in the midst of what our own site’s Digital Daily scribe, John Paczkowski, has so perfectly dubbed the “econalypse.”

Ironically, Walt Mossberg and I planned to launch the very first conference in the middle of the last major downturn for tech, in 2001. But, in the carnage of the Web 1.0 meltdown, we actually held off for two years, with our first D gathering taking place in 2003.

It’s been a real winning streak since then for D, due in large part to our great speakers–such as Microsoft (MSFT) icon Bill Gates and Apple (AAPL) legend Steve Jobs.

Both have been onstage many times over the years, including a historic interview the pair of tech titans did together in 2007 at D5.

Other amazing speakers have included: Howard Stringer of Sony (SNE), Barry Diller of InterActiveCorp (IACI), legendary director George Lucas, Time Warner (TWX) CEO Jeff Bewkes, Jeff Bezos of Amazon (AMZN), former eBay (EBAY) CEO Meg Whitman, News Corp. (NWS) head Rupert Murdoch, Microsoft head Steve Ballmer, Walt Disney (DIS) honcho Bob Iger, Bobby Kotick of Activision Blizzard (ATVI), CBS (CBS) CEO Les Moonves, Democratic and Republican pols like former Vice President Al Gore and Sen. John McCain, all the leadership of Google (GOOG) and many, many more.

We have had a lot of great moments onstage with all these tech and media players over the years, to be sure, with interviews ranging from the funny to the sublime to the truly disastrous.

But, like the digital industry and the innovation our conference focuses on, we also like to lean forward to try to figure out what the Next Big Thing is around the corner, whether it comes from Silicon Valley or not.

That’s why we’re kicking off our conference on May 26 with two of the founders of Twitter–Biz Stone and Evan Williams–who are riding high on tech’s latest hot thing, which might turn out to be either a rocket ship or a shooting star.

They’ll be followed up over the next two days by a plethora of interesting players, from the leaders of several major mobile companies to content execs hit hard by fast-moving digital forces to a new Internet leader like Yahoo (YHOO) CEO Carol Bartz, who is trying to turn around one of the Web’s great icons from its more recent lackluster path.

And, as we always do, we will be featuring a spate of demos too, trying to see if we can unearth that next next thing.

In the past, the D stage has seen the debut of start-up products like Sling Media’s Slingbox, Aliph’s Jawbone and Pure Digital’s Flip, all of which have gone onto glory. And also some, like Palm’s Foleo, which did not.

While not everyone can attend D, our crack staff is committed to bringing all the action from this year’s conference to readers of the All Things Digital site via up-to-the-minute blogs, photos, videos, tweets, digs and more. We’ll also, as soon as we can, post the videos of each of the onstage sessions, in their entirety.

Until it all kicks off, here is the list of speakers, below, in alphabetical order, who will be appearing at 2009’s D7 conference:

Irving Azoff | CEO of Ticketmaster Entertainment (TKTM)

Mitchell Baker | Chairman of Mozilla

Steve Ballmer | CEO of Microsoft

Carol Bartz | CEO of Yahoo

Mark Cuban | Chairman of HDNet and Owner of the Dallas Mavericks, Landmark Theaters and Magnolia Pictures

Eve Ensler | Playwright and Founder of V-Day

Arianna Huffington | Editor-in-Chief of the Huffington Post

Olli-Pekka Kallasvuo | CEO of Nokia (NOK)

Mike Lazaridis | Co-CEO of Research In Motion (RIMM)

John Lilly | CEO of Mozilla

John Malone | Chairman of Liberty Media Corporation (LCAPA)

Roger McNamee | Partner, Elevation Partners

Jon Miller | Chief Digital Officer of News Corp.

Jon Rubinstein | Executive Chairman, Palm (PALM)

Randall Stephenson | CEO of AT&T (T)

Biz Stone | Co-founder of Twitter

Owen Van Natta | CEO of MySpace

Katharine Weymouth | Publisher of the Washington Post (WPO)

Evan Williams | Co-founder and CEO of Twitter

Jeff Zucker | CEO of NBC Universal (GE)

Who Shot Valleywag? Gossip Bloggers Thomas (Outgoing) and Tate (Incoming) Speak!

Kara Swisher — Sat, 02 May 2009 04:20:43 +0000

Was it Facebook COO Sheryl Sandberg in Fraiche Yogurt with a Macbook Air? Or Tesla Motors CEO Elon Musk on the streets of San Francisco with a Model S? Or, most likely of all, Marissa Mayer of Google in the penthouse with a Manolo Blahnik spiked heel?

For all the invective this trio has taken from him, all would certainly be prime suspects if some nefarious fate befell always controversial Valleywag gossip blogger Owen Thomas.

Actually, the truth is a little more mundane: The self-described “scourge of [Silicon] Valley” is moving onto another digital job as head of GE (GE) unit NBC Universal’s new Bay Area Web site, whose motto is “Locals Only.”

There, the 37-year-old Thomas will run a site that focuses on news from around the San Francisco region, with a mix of national stories. But, sources said, he is still going to continue to drill down on tech too, so those burned before by him should not relax too much.

Thomas has been running Valleywag since mid-2007. Its staff got pretty large for a while, until it was recently downsized and its content stuffed into Gawker, the flagship site of Gawker Media. The Valleywag site remains, though, and will continue to.

And it will now be the domain of deceptively fresh-faced Ryan Tate, Thomas’s replacement. The Berkeley resident, 32, has been the night editor for Gawker since early last year.

Interestingly, Tate was an intern for The Wall Street Journal’s California edition and also worked for tech-oriented publications like Business 2.0, Upside and the San Francisco Business Times.

Thomas is reportedly staying on at Valleywag through the middle of the month and then it will be Tate’s turn to make mischief with tech’s more puffed-up mandarins.

In an effort to scare Tate into steering clear of BoomTown, I invited the pair to All Things Digital HQ this rainy afternoon for a little sit-down to discuss where the controversial site has been and where it is going.

Here’s the video (and below it, a video interview I did with Thomas and then-Valleywag writer Megan McCarthy, when he got the job):

[ See post to watch video ]