The UpStream (Page 187)

FCC Delays Part Two of Spectrum Auction Until Mid-2015

posted Sunday Dec 8, 2013 by Nicholas DiMeo

FCC Delays Part Two of Spectrum Auction Until Mid-2015

There are two auctions coming up for a big chunk of broadcast spectrum. A smaller one is next month in January 2014 and the second, larger auction was supposed to be in June. However, FCC Chairman Tom Wheeler said in a blog post that the big auction in June will now be pushed back to 2015.

The Broadcast Television Spectrum Initiative Auction, as it is called, has been talked about a lot at the FCC over the past month, since Wheeler took over as Chairman. Wheeler said that the FCC can't just issue an auction without putting some rules and policies behind the spectrum, such as what it can be used for. Wheeler has been working with the Incentive Auction Task Force on trying to meet the deadline of June 2014 but it just isn't going to happen. Wheeler said that the FCC will wait until new technologies, software and systems are in place and have been thoroughly tested before they decide to send everything to auction.

On the decision to push the date back, he said,

There are several key ingredients to fulfilling our instructions from Congress and making the incentive auction a success. We absolutely must make fact-based policy decisions in an open and transparent manner. Beyond the policy issues, however, we must also exhaustively test the operating systems and the software necessary to conduct the world's first-of-a kind incentive auction. This includes ensuring that such systems are user-friendly to both broadcasters and wireless carriers who will participate...

I believe we can conduct a successful auction in the middle of 2015. To achieve that goal, there will be a number of important milestones along the way. The Task Force will provide more details about the timeline and milestones in a presentation at the January 2014 Commission meeting.

Here's how it will all go down. The smaller auction of the 10MHz of space will happen in January 2014 as planned. Then, based on Congress passing the Middle Class Tax Relief and Job Creation Act last year, 65MHz of spectrum must be auctioned off by the end of 2015. All of the money made from these auctions will go towards implementing first responder LTE network, FirstNet. This new network would allow first responders to have a dedicated system to be used for both their everyday and emergency operations.

So while there's not much change or news to write home about here, it was important to note that the FCC is acting in a methodical and carefully-planned manner, which is sometimes a rarity for the Commission. It's also refreshing to see that there is an actual effort being placed on making sure the spectrum can be implemented immediately and that there will even be a "mock auction" before everything actually takes place, in order to ensure that any flaws in the entire project are found before they do this for real.

Beats to Launch Music-Streaming Service, Surprisingly Called Beats Music

posted Sunday Dec 8, 2013 by Nicholas DiMeo

Beats to Launch Music-Streaming Service, Surprisingly Called Beats Music

Beats, arguably the most popular high-end headphone in the market today, is moving into the music-streaming service to compete with Pandora, Spotify and more. Jimmy Iovine, the company's co-founder and head of Interscope/Geffen Records, dove into details this week about Beats' decision to enter a new space.

In keeping with its easy naming system, the headphones, digital audio hardware technology, and now the music-streaming service will be called Beats Music. Iovine said that the way Beats is going to differentiate itself from the competition is by putting all its effort into hand-curated lists for all types of scenarios, moods and times of day.

We are making tons and tons of curated lists. If you go the gym, we'll know where you are. So when you wake up in the morning, there will be a list waiting for you.

According to the chairman and co-founder, Beats Music, codenamed Daisy, currently has over 100 professionals putting together playlists for every possible occasions they can come up with. Of the team working on the unique take on music streaming, only one of them is famous: Trent Reznor. The former 9 Inch Nails vocalist has been signed on to oversee Beats Music's curation process. Iovine also said that subscribers would be able to set up personalized playlists using a proprietary algorithm that Beats created for the service.

When asked about pricing, he interestingly responded by saying Beats Music would "charge the same thing as everybody else... $10 a month or whatever it is." Good to know that he has a firm grip on the competitors in the market space and their pricing.

Beats Music comes after the Beats picked up music-streaming service MOG last year for $10 million. Marking it as a "failed utility" but with promise, Iovine added,

The infrastructure and technology were great. It's hard to hire 50 good engineers. We were able to retain 99% of them.

There's one last caveat to add here. Beats Music should also be better for the artists whose songs are on the platform. The service will be able to give better information and access on who is listening to an artist's music. Described as "fair play," Beats Music will tell an artist how many times a song has been played, under what playlists, how it compares to other songs in its space and more. That's definitely an added bonus in a world where iTunes gives you almost no information on the demographic listening to music.

Activision Blames Consoles for Ghosts Sales

posted Saturday Dec 7, 2013 by Scott Ertz

Activision Blames Consoles for Ghosts Sales

In the latest issue of GameInformer features a discussion with Activision CEO Eric Hirshberg about the recent sales drop for Call of Duty: Ghosts. Despite being the top-selling title on next generation consoles, overall sales for the title have been lower than that company had hoped.

Obviously, the belief in the industry is that the yearly release schedule has caused people to have less of an urge to purchase each individual title. With that type of schedule, you end up with a lot of cookie cutter-style gameplay that would be better served as DLC rather than a branded title. Even EA has weighed in on the concept, publicly stating that they had abandoned the idea of annual Battlefield titles for fear of diluting the franchise.

So, what does Activision believe the problem is? Too many active consoles on the market. Apparently, since many people have the ability to purchase the title more than once, they have decided not to purchase it at all.

We've been pretty transparent all year that we think, because of the challenges of the console transition year, that that was likely in the short-term. I think it would be a mistake to conflate the challenges of the console transition year with any indications about the health of the franchise.

Of course, there is no way it could be possible that mimicking the Guitar Hero business model could lead to a similar fate. It is more likely that doing the exact same thing twice will result in significantly different outcomes. Hirshberg's response to critics of the business model is possibly the most disconnected from reality.

Well no, obviously not - and obviously I don't agree with the critics there. I know that Call of Duty's a polarising franchise with some of the critics, and it's clear to me that not all the critics like our strategy of making a game every year, but thankfully our fans do.

It's also clear to me that the critical response doesn't always mirror the fans' appreciation of a game. We actually do read the critics' comments and take them into consideration during our creative process, but we just can't measure ourselves by that yardstick alone.

It is a good thing that Activision listens to critics during the creative process, as Ghosts is the lowest rated game in the franchise of the entire generation.

Our most important audience is our fans, so we try to stay laser-focused on making games that they love. If you look at the fact that {Ghosts is} the most pre-ordered game of the year, it's the most pre-ordered next-gen game of the year, it's already the number one most played on Xbox Live, and that we're seeing longer average playtimes than ever before, we're confident that we're doing well by the criteria that matter most.

So, we listen to critics, but stay laser-focused on gamers. While that might sound like a major disconnect, in this case they are the same. Low ratings, plus low sales hopefully equals an altered release schedule with an actual focus on gamers and gameplay, rather than just saying it in an interview. We won't know until E3, but Activision is not known for making fact-based business decisions, so if there was money on it, I would bet for a new title in 2014.

Apple Testing the Waters on Customer Tracking

posted Saturday Dec 7, 2013 by Scott Ertz

Apple Testing the Waters on Customer Tracking

It has been two years since we discussed Foot Path's customer tracking service and the inevitable consumer fallout that occurred as a result. In those two years more smartphones have been sold and consumers have become even more weary of being tracked, both online and in reality. The move away from cookies on the Internet has been the biggest recent indicator.

With all of that market research available to them, Apple has decided to take the concept of tracking customers a step farther and, instead of simply anonymously watching a device as it travels through a store or mall, will be uniquely tracking iOS 7 devices as they travel through Apple stores and pushing messages to their devices.

Using their iBeacon system, they will, via low-power Bluetooth technology, determine your position in their retail store and, based on what display you might be interacting with, send your phone information about what you are looking at. For example, if you are using an iPhone 4S and have stopped in the iPhone 5s display area, the system will be able to alert you of deals on the phones, as well as your current upgrade eligibility.

Fortunately, according to Apple, there are checks involved to prevent tracking people who are not interested in participating. For example, you must have an iOS 7 device with Bluetooth 4.0, meaning the iPhone 4S and above, or the 3rd generation iPad or above, with the Apple Store app installed. When you enter the store, the app will ask your permission to track your location, then to send you notifications. Apple claims you must enable both for the system to work.

The only problem with that theory is that there is no system pairing involved in the system, meaning that there is no way to guarantee that Apple is not at least tracking your device throughout the store without permission. Of course, without the app and permissions there is no way to push notifications, but pinging the Bluetooth radio is not an impossible feat.

Apple is not the only organization in the process of implementing iBeacon: Major League Baseball and Macy's are both testing or implementing the technology in their facilities. iBeacon is also compatible with Android 4.3 and above devices with Bluetooth 4.0, meaning that having an Android device won't hide you from Apple's possibly prying eyes.

Are you willing to trade privacy for convenience? Let us know in the comments section.

SEC Investigated IPO Claims from Twitter

posted Saturday Dec 7, 2013 by Scott Ertz

SEC Investigated IPO Claims from Twitter

Between the time Twitter filed its Initial Public Offering with the Securities and Exchange Commission on July 12, 2013, and its official IPO announcement, an interesting conversation happened between the two organizations. In this time frame, it is fairly common for the filer and the SEC to discuss the details of the documents to clarify confusing or misleading information. In Twitter's case, however, the details in question were material to the valuation of the company.

For example, Twitter's 2012 financial statement showed a loss of $79 million, with a loss of $69 million in the first 2 quarters and $134 million in the first 3 quarters of 2013. Their initial filing, however, described a significant improvement in revenue instead of discussing the fact that the revenue cost more to earn. The SEC's response was,

We note your statement that you 'have experienced significant improvements in {your} operating results in recent periods.' Please revise this disclosure to address the fact that your net loss in the first quarter of 2013 was larger than the same period in 2012 and the two quarters immediately preceding it.

Twitter revised its filing to discuss the losses, but still emphasized the growth of revenue.

In addition, Twitter completely neglected to discuss the results of Facebook's acquisition of Instagram during its own IPO process. More importantly, they failed to discuss Facebook's decision to change their integration policy for Twitter.

We note that following Facebook's acquisition of Instagram, Instagram disabled photo integration with Twitter. Please describe the consequences of Facebook's decision in terms of your service and the user experience. In addition, identify any other material third-party integration that you believe is at risk for similar elimination and the potential consequences

Twitter's response was to claim that no further integration issues were known, though they did engage the topic of Instagram.

These were not the only issues raised by the SEC, but they were certainly the material information on the company. Without directly disclosing that the company has yet to make a dollar of profit in its existence and, instead, continues to lose money at an alarming rate changes the value of the company. Somehow, however, they still managed to have a fairly successful IPO.

Yahoo Adds to Media Offering with Live Concert Acquisition

posted Saturday Dec 7, 2013 by Scott Ertz

Yahoo Adds to Media Offering with Live Concert Acquisition

Since Marissa Mayer took over the company, Yahoo has been on a brand reinvention binge. With the purchse or Tumblr and reinvigorating Flickr in its rearview mirror, the future seems to belong to media streaming. After several failed attempts to purchase Hulu, Yahoo decided to purchase exclusive rights to a huge brand, Saturday Night Live.

In the past 2 weeks, Yahoo has beefed up its media offerings two new ways. First, last week, Yahoo hired veteran news anchor Katie Couric to help increase the credibility of its news division. This week, Yahoo is trying to shore up its Yahoo Screen and Yahoo Music offerings with a new acquisition.

Freshman startup EVNTLIVE has joined the Yahoo family this week for an undisclosed price tag. After publishing its beta program in April of this year, EVNTLIVE has hosted hundreds of live-streamed musical performances and festivals, in attrition to interviews and music videos. 8 of EVNTLIVE's team will be moving in to the Yahoo offices in Sunnyvale, California, though Yahoo has not commented exactly on where they will be helping out.

With their new focus on entertainment and media, however, it would seem that the new team members will be joining Yahoo's music division. While they currently offer music videos, live events is a great market to get into. Microsoft and Sony have proven that people will even watch live press events and NBC this week proved people will watch live music events despite their quality, making way for a whole industry of live music broadcasts.

This will be the first time Yahoo will be at the leading edge of an emerging market in nearly a decade. If we are in a post-transitional period and into a time to evaluate Marissa as CEO, I would say these moves are a good start to continuing Yahoo's focus on content.

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