The UpStream (Page 193)

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.

Black Friday Sales Numbers Show Xbox One Doubles PlayStation 4

posted Wednesday Dec 4, 2013 by Nicholas DiMeo

I've always said that in the gaming industry, nothing matters until we see the sales numbers. This held especially true this past week, as Black Friday had customers shopping in stores across the country, from dusk to dawn, purchasing their favorite gadgets and other items. On their lists were video game consoles and, regardless of the initial Internet onslaught of negativity, you might be surprised at the console that came out on top.

Courtesy of Infoscout, we have sales totals for the current and next-gen consoles for Black Friday. The Xbox 360 and the Xbox One made up 61% of the entire post-Thanksgiving sales day market, with the Microsoft's latest console squeaking out a one percent edge over their former 360. The PS3 and PS4 both tied at 15% a piece and the Wii U made up six percent, leaving Nintendo's Wii to own the remaining, single percent of sales.

Of the customers polled, 80% of them said that they'd purchased a console as a gift, and 10% of those gift-givers said the console would be opened before Christmas. 85% of game system buyers said they'd also purchase two or more video games along with the system, with Call of Duty: Ghosts sadly being the top choice, by almost double of the #2 spot, Disney Infinity. Rounding out the top five choices for video games on Black Friday were Skylanders: Swap Force, GTA V and Madden 25.

Probably the most pressing question though is why did the Xbox One come out on top? There are several reasons that initially drive this number home. First, Sony chose to release their console a week earlier than Microsoft, with pre-orders and week one sales already being delivered to customers before Black Friday, to the tune of one million total PS4s. Secondly, Sony did mention that the company was having a tough time keeping up with demand, causing a shortage of next-gen PlayStations for customers on Black Friday. To be fair, Microsoft did announce one million consoles sold before Black Friday, too, and although Microsoft's gaming system was available in more markets, that still equates to a substantial amount of units moved.

There's a little more to the story, too. When asked about different consoles, here's what the majority of customers had to say about each one.

PlayStation 4

"Too much hype when Sony doesn't produce enough"

"Expensive. Games are expensive."

"It's too high tech. None if the older PS games will work with it and everything is way too expensive; I think it's more for the adults."

"My oldest child wanted a PlayStation, I have no opinion."

Xbox One

"It's the only system that has the game my kids want. I'm not happy about it."

"Waiting to see the first 'Must have game'"

Xbox 360

"I think its a great system. With the Kinect, the family can get up and move around"

Nintendo Wii

"Fun for kids and families. Love the old school games that you can download"

"Older technology, so less expensive"

To me, it's interesting to see the masses respond to the marketing campaigns, hype and overall message from both Sony and Microsoft. Even though the PS4 is $100 cheaper, Sony might have missed portraying the PS4 as something everyone could use, since they geared a lot of messaging towards the hardcore gamer who has strayed from Sony over the past eight years. Instead, Microsoft has realized for years now that customers want more than just gaming systems underneath their TV and by incorporating entertainment and media into the Xbox One marketing, the amount of sales speak for how well-received the message was. In the end, the "hardcore gaming" market is a very small percentage of the total number of people who game in today's age, and a lot of people have proven they're willing to spend money on a console that fits all of their needs in one device.

However, we still don't have the official total console sales numbers from NPD and we'll probably have to wait until after Christmas for them. Then and only then can we see the true magnitude of success of failure for either of the companies' respective launches. Did you pick up any next-gen gaming system for Black Friday? Why or why not? Tell us in the comments section.

PS4 Still Having Network Problems, Shuts Down Redemption of Promo Codes

posted Sunday Dec 1, 2013 by Nicholas DiMeo

PS4 Still Having Network Problems, Shuts Down Redemption of Promo Codes

After more than two weeks on the market and over a dozen issues being reported even before launch, the PlayStation 4 is still going through some serious growing pains. The biggest issue that still remains is the uncertainty and instability of the PlayStation Network, Sony's online gaming platform. Without mentioning any new server upgrades to handle the heavy influx of gamers coming on to the network after the E3 presentation battle, Sony's has now shut down part of the system in order to handle server loads.

If you want to redeem any PlayStation promotional codes or PSN Card codes, you won't be able to for the foreseeable future. Aside from the PS4 just sitting there at the Redeem Code screen after number entry, a blog post appeared on the PlayStation Blog about the service interruption. Social Media Manager Sid Shuman wrote,

We are aware that users are experiencing some disruption to the PSN service. To minimize the inconvenience we have suspended the "redeem voucher" functionality while we investigate further. Unfortunately this means that money cards, product vouchers, PlayStation Plus vouchers, PS3-PS4 upgrade vouchers and any other vouchers for digital content are not redeemable at this time. Other PSN features such as log in, online multiplayer gaming, PlayStation Plus trials, PlayStation Store (excluding voucher redemption), Trophies, messages, friends, etc. are all available.

We apologize for the inconvenience and will provide an update soon.

There's also a thread that has been updated a few times since the announcement, with no real answer in sight as to when the service will be brought back up. Sony says that it still does "not have an estimate on when the system will be available at this time" and to "please try again later this evening or tomorrow."

In trying since the post, I've still not seen any successful redemption of a promo code. Now, I know this may not seem like a big deal to most people, however, it speaks a lot to the stability of the network as a whole. Gamers are still reporting complete meltdowns of the PSN service, including dropped lobbies, lagging out of games in-match and trophies not saving or being lost. So while the Redeem Code screen might not be something you use, it's the place Sony is working on a stop-gap to try and fix other problems at the same time. For now, PS4 users will still have network latency issues and will have to deal with it until Sony fixes the problems.

German Court Rules Wikipedia is Responsible for Content

posted Saturday Nov 30, 2013 by Scott Ertz

German Court Rules Wikipedia is Responsible for Content

Here in the US we have a law called the Digital Millennium Copyright Act. One of the many things this law brings about is a protection for a website against content provided by its users, so long as the site complies with takedown notices in a timely manner. This law is what makes it possible for sites like YouTube to allow users to upload content without checking it before publishing it.

Unfortunately, this law and its effects do not extend beyond our borders; a fact that Wikimedia, the organization that owns Wikipedia, found out the hard way. In October, Wikimedia lost a libel case against a person identified as "H," who is the owner of a German television station. On his Wikipedia page, it was listed that he used a Nazi salute on television, downplayed the effects of having sex with children, as well as a slew of employment issues, including producing a "cult-like" environment.

This week, the court posted the full verdict on its website, which states that Wikimedia has responsibilities to its users and the content targets. The court does not claim that Wikimedia needs to fact check before publishing, but does need to look into content when a claim is received.

Now, this sounds a lot like the DMCA clause, with one important caveat: DMCA covers copyright infringement, this covers objective and subjective content written by the site's contributors. So long as the content is not ripped off from another source, Wikipedia is not required to interact with its content within the US, but will need to censor its content if it is not popular or is contested.

We know that Rick Santorum would have liked the ability to have Internet content censored in the US, but what about you? Do you think it is positive or negative for the German government to force Wikipedia to control content on their website? Let us know in the comments.

Twitch Disables PS4 Playroom Streaming

posted Saturday Nov 30, 2013 by Scott Ertz

Twitch Disables PS4 Playroom Streaming

While the premise of The Playroom on the PlayStation 4 seems innocuous, it is officially the first title in the next generation console world to be banned from Twitch. The ban comes from a series of incidents that somehow Sony and Twitch were not prepared for, but anyone who has ever spent more than 5 minutes on the Internet knew was coming: porn.

All you need to do is give people access to the Internet, a camera and the ability to broadcast their living room and the end result is always porn. Unfortunately, those are the ingredients that came together through the PlayStation 4 and The Playroom. Within moments of launch, the game was used exactly for this purpose, followed almost immediately by a reminder from Twitch what the purpose of the streaming service was.

Now, you know as well as I do that the type of people who would get naked on PlayStation on launch day are not exactly the type of people to read legal notices. As such, the problem persisted and Twitch felt the need to remove access to the game.

We removed Playroom content from the directory because a majority of it was non-gaming related. We will look into adding it back as PS4 owners become more familiar with the games-only focus of Twitch content. In the meantime, you can view all of the amazing gameplay from PS4 broadcasters in this directory page on Twitch.

The good news is that, if you are interested in viewing The Playroom streams, you will still have that ability through Ustream, though we all know you won't be able to tell what is happening and when things get good it will cut to a commercial.

Twitch has left the door open for the return of The Playroom streaming on their service. My guess is, however, with such a strict code of content for the site, we will not see this title return.

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