BROADCASTERS IN EUROPE POST DECLINES AS U.S. MEDIA ROUT SPREADS

Original Story: bloomberg.com

Broadcasters including the U.K.’s ITV Plc, Germany’s ProSiebenSat.1 Media SE and Italy’s Mediaset SpA fell in European trading on Friday, triggered by a selloff in the U.S. on concern that advertising will decline as viewers shift to online programming. A Mumbai media lawyer is following this story closely.

ITV is “down today on the read-across from U.S. media names that have got smashed in recent days on advertising fears,” Ian Whittaker, a London-based analyst at Liberum Capital Ltd, said in a note to investors.

The broadcaster of hit shows Downton Abbey and Coronation Street fell 4.7 percent to 259.20 pence in London trading at 10:08 a.m. ITV had gained 26 percent this year through Thursday. ProSiebenSat declined 4.5 percent to 45.32 euros in Frankfurt. Mediaset fell 4.2 percent and Societe Television Francaise 1 slipped 2.9 percent in Paris. A Warsaw media lawyer has experience representing a wide range of clients in media cases.

IN the U.S, the Standard & Poor’s 500 Media index had its biggest two-day slump since 2008 this week after broadcasting giants such as Viacom Inc., 21st Century Fox Inc. and Walt Disney Co. either posted results for last quarter that missed analysts’ estimates or cut forecasts. Viacom fell the most in almost seven years on Thursday.

The reports from the U.S. show the increasing influence that online streaming video services such as Netflix Inc. and YouTube are winning from broadcasters. A Belize City media lawyer is reviewing the details of this case.

U.K. industry regulator Ofcom also said Thursday that live TV viewing fell 14 percent in four years to 193 minutes per day last year. While live TV is still the way most people watch programs, streaming services and Internet-connected TVs are becoming more popular, according to the report.

Much ado about YouTube, AppleGoo and iOS 6.0

Story reported from  CNN.com

"Apple killing YouTube on iPhone just happens to be the last straw," Jeff Jarvis tweeted Monday when he learned that the next generation of iPhones won't have a YouTube app on their opening screen. "Went into the AT&T store today to begin switch to my Android phone."

That Jarvis, whose "What Would Google Do?" was a 2009 bestseller, was still using an iPhone three years later says a lot about how Apple's (AAPL) iOS stacks up against Google's (GOOG) Android.

That he's switching now says even more about the hysteria with which bloggers and tweeters greeted the news that YouTube had fallen out of the latest release of iOS.

It was still the lead story Tuesday morning on Techmeme, which provided links to more than four dozen news items on the subject. "Apple and Google both win by killing the native iOS YouTube app, but we all lose," wrote The Verge's  Niley Patel. "It's all about money and machismo," opined TheNextWeb's Matthew Panzarino.

Well, not entirely. First of all, as Google made clear before the end of the day, there will continue a YouTube app on the iPhone -- one that Google will write and maintain.

Moreover, it's not at all certain who "killed" Apple's version of the app. According to Apple, its license to put YouTube in iOS had run its course, and apparently it was in both parties' interest to let it lapse.

It's true that between Google Maps and Google's YouTube, Apple seems to be cutting the ties with the firm that seemed so close when Google  chairman Eric Schmidt shared the stage with Steve Jobs at the iPhone's 2007 unveiling and cracked a joke about how close the two firms had grown ( "If we just sort of merge the companies we could call them AppleGoo.")

But it's also true, as Panzarino points out, that from Apple's point of view the app had served its purpose:

The native YouTube app was an effort to legitimize HTML5-compatible video. Apple used it as leverage, got the entire YouTube catalog converted over to iPhone-friendly video and everyone else followed suit. If you were an iPhone user in the early days, you'll remember that the entire catalog wasn't available at launch. Google, who had recently purchased YouTube, started crunching through all of the videos, converting them over to HTML containers and caught up some months afterwards.

This was a huge factor in the sidelining of Flash video. Now, HTML5-compatible MP4 video is the standard so Apple doesn't need a native YouTube presence built into iOS any more.

Google, meanwhile, gets to design its own YouTube app, push out more frequent updates, and do something it's probably been itching to do for a long time: Sell the YouTube ads on iOS that it runs everywhere else. "Google stands to make a ton of money from ads," writes Panzarino.

More money, I would venture to guess, than it was getting from the deal it cut with Apple in simpler times, before the smartphone wars.

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Google Push to Sell Ads On YouTube Hits Snags

Video Site Is Key To Diversification; The Lawsuit Factor

Wringing ad revenue from YouTube is proving to be a challenge for Google Inc.

Although users of the popular video-sharing site view clips more than one billion times on most days, the site hasn't been as popular with big corporate advertisers. World-wide revenue from YouTube ads has fallen short of Google's expectations this year, and is likely to total about $200 million for the full year, according to two people familiar with the matter.

YouTube is critical to Google's campaign to extend its advertising reach far beyond text ads tied to Web searches, its revenue powerhouse. Google wants to sell more video ads and display ads on YouTube and elsewhere. It also wants to crack the television, radio and newspaper ad markets. Its target: the 90% of global ad dollars that don't currently flow to the Internet.
Tim Armstrong, an advertising executive at Google, says a sketch drawing -- stick figures and all -- is guiding the Internet giant toward a new ad model. WSJ's Kevin Delaney reports. (July 9)

"Most advertisers are still testing the waters on YouTube," says Sean Muzzy, media director at Neo@Ogilvy, a digital ad agency owned by WPP Group's Ogilvy & Mather. Some big advertisers, he says, haven't been comfortable that their ads might appear next to amateur videos. Google Chief Executive Officer Eric Schmidt has acknowledged that the company hasn't yet found the best formats for video advertising.

Copyright litigation has complicated the YouTube ad push. Viacom Inc. sued Google last year in connection with clips of television shows and films posted without authorization by YouTube users. Although Google says it hasn't broken copyright laws, it significantly cut back on the number of clips it would sell ads against, so as not to sell them against infringing material, according to one person familiar with the matter.

Tim Armstrong, Google's head of advertising and commerce in North America, is helping to lead the diversification push. When he dug into complaints from salespeople about Google's system for selling YouTube ads, he uncovered another part of the problem: a sales system hamstrung by inefficiencies.

Some YouTube advertisers, for example, had to pore over three separate legal contracts. Before Google salespeople around the country could propose certain deals to YouTube advertisers, they first had to get approval to do so from a temporary worker in California. And lacking a fully automated billing system for YouTube, Google staffers had to calculate some bills manually.

By May, Mr. Armstrong and his colleagues had identified some 105 problems with YouTube's ad sales, according to one person familiar with the matter. The ad difficulties extended beyond YouTube. In its successful search-ad business, Google recently counted 24 separate internal systems for helping advertisers come up with search terms to have their ads displayed alongside. "Barnacles started to build up on the outside of the process," says Mr. Armstrong.

Twenty months after Google bought YouTube for more than $1.7 billion, Mr. Armstrong and his colleagues have begun to untangle the problems with its advertising operations -- which generated 98% of Google's revenue in the first quarter. The initiative is code-named "Project Spaghetti."

The effort could affect how successful Google is at expanding beyond advertising tied to online searches. If Google is to maintain its torrid growth rate in the years ahead, it needs to tap other forms of ad revenue.

In the first quarter, Google's U.S. ad sales were up 31% from the year-earlier period to $2.5 billion. (Google doesn't break out revenue by category of ads.) That growth rate would thrill most companies, but for Google, it's a slowdown. In the first quarter of 2007, U.S. ad sales jumped 49%. Still, Google exceeded analysts' estimates for revenue and profit in the first quarter, partly because of strength outside the U.S. Google's shares have dropped about 25% from their November closing high of $741.79.

It isn't the first time Google has wrestled with advertising problems. Six years ago, it changed its sales model for so-called search ads: When Google users conduct a Web search, ads related to the search words pop up next to the results. Google began charging advertisers only when users clicked on the ads, not every time they appeared on a user's screen.

That new advertising model was hobbled initially by overlapping sales databases and disparate billing systems. In 2002, Google launched "Project Drano" to overhaul the operation. Problems instituting a new system -- many ad campaigns were inadvertently shut down -- "nearly killed" Google, said Mr. Schmidt, the chief executive, in a 2005 interview. It took Google about six months to get it right, and the search-ad business exploded. (Google has a deal with MySpace to sell ads on that social-networking site, which is owned by News Corp., owner of Dow Jones & Co., publisher of The Wall Street Journal.)

Mr. Armstrong, who is 37 years old, describes Project Spaghetti as an effort to fix the plumbing behind all of Google's ad initiatives. The inefficiencies, he says, are a product of Google's rapid growth and its innovation. Streamlining the systems and developing new ad formats, he says, should eventually improve the company's bottom line.

Mr. Armstrong, a seven-year Google veteran, says the company's traditional search-ad business is still gaining market share, and has plenty of room for growth. Nevertheless, he's been working for several years to develop ways to sell ads in other media, believing that Google could help advertisers better reach target consumers and measure the results.

In 2005, Google began trying to broker ads sales for magazines. To branch into radio advertising, in 2006 Google bought dMarc Broadcasting Inc. of Newport Beach, Calif., which ran an online system for advertisers to buy radio time. Google tested placing TV ads on a small cable system near its headquarters, then signed an ad deal with satellite-TV provider Dish Network Corp.

Big Ambitions

Google's 2006 acquisition of YouTube signaled that it had big ambitions for online video advertising. YouTube's revenue was only about $15 million that year, Bear Stearns analysts estimated. But Google believed YouTube would be attractive to traditional TV advertisers and others.

Mr. Armstrong and his team had to persuade skeptical advertisers to start spending chunks of their ad budgets on Google's new offerings. At a September 2007 meeting of Google ad executives in New York, Eileen Naughton, who heads Google's display and video ad sales, illustrated the magnitude of the challenge with photos of Mount Everest and Sherpas.

Last fall, Mr. Armstrong says, he began to realize that internal problems were interfering with progress. Newly acquired companies such as YouTube and dMarc Broadcasting had their own sales systems, and Google was building others piecemeal. The end result was overlap and inefficiency.

In March, after salespeople complained that selling YouTube ads was taking longer than it should, he kicked off Project Spaghetti. In order to get a closer look at the problems, he moved that month to a cubicle in the middle of a YouTube ad team, two floors above his New York office. He says he was determined to find out exactly how YouTube ad sales worked.

In May, Google held "weeds days" for YouTube -- it wanted to get everyone into the "weeds," or details, of the ad-sales process. The result was the list of about 105 fixes, says one person familiar with the matter. Mr. Armstrong characterizes some of them as very minor.

One of the top five suggested short-term fixes was to allow ad salespeople to discount YouTube ads by 10% without securing management approval, the person familiar with the matter says. Another was to eliminate a requirement that a certain temporary worker -- she's referred to only as Miriam in an internal presentation -- had to sign off on YouTube ad proposals, which created a bottleneck. Mr. Armstrong says that step now has been largely automated, and the worker only gets involved later in the process. He declines to comment on discounting policies.

Project Spaghetti, Mr. Armstrong says, should be completed by the end of the third quarter. But even if the internal problems are ironed out, Google still has to persuade advertisers to spend more on its new ad offerings.

One complaint from mainstream advertisers is that YouTube -- where clips uploaded by users range from raunchy to heartwarming -- lacks enough content alongside which they want to run their ads. New Line Cinema, for example, created an ad campaign on YouTube last summer to promote its movie "Hairspray." The ads performed well, New Line said, but it had a hard time finding enough YouTube videos where it wanted to put the ads.

General Motors Corp. has been a regular buyer of Google search ads. More than a year ago, it experimented with advertising its Cadillac brand on YouTube. Since then, it hasn't significantly boosted its YouTube ad buying, says Mike Devereux, GM's executive director of digital marketing and customer relationship management. He says GM is watching Google's ad-diversification plan closely. "As they get their platform ready for other media, we will get there with them," he says.

Mr. Schmidt, Google's CEO, said earlier this year that "it's taken longer than I thought for us to find the right combinations" of YouTube advertising formats. He added that he believed it "will ultimately be very, very successful for us and the industry."

The Viacom suit has complicated matters. Fearful of fueling allegations that it is profiting from copyright infringement, Google will only sell ads against YouTube clips that have been posted or approved by media companies and other partners -- roughly 4% of the total, says one person familiar with the matter. A Google spokeswoman declined to comment on how the litigation has affected where ads are placed. Last week, the federal judge overseeing the Viacom case ordered Google to turn over some data about YouTube users and viewing records, stirring privacy concerns.

Google plans to begin accepting "preroll" and "postroll" ads, which will run before and after some YouTube video clips, according to one person familiar with the matter. The plan under consideration, this person says, would give companies that post video clips the option to sell such ads, and share the revenue with Google. YouTube has long forsworn such ads because consumers don't like them. But advertisers consider them highly effective.

Google began offering Internet display ads several years ago, but they haven't gained as much traction as many at Google had expected. The display ads bring in a few hundred million dollars annually, according to one person familiar with the matter.

Acquiring DoubleClick

Google is hoping that its recent $3.2 billion acquisition of Internet ad services company DoubleClick Inc. will boost display-ad sales. Internet publishers pay DoubleClick to insert ads onto their Web sites as users visit the sites. DoubleClick also offers a system to ad agencies for managing and tracking online ads. Google wants to leverage DoubleClick's relationships with Web publishers and ad agencies to sell more display ads.

In radio and TV, where Google collects commissions for brokering ad sales, the company still doesn't reach enough top markets and consumers, some advertisers say. Sales of TV ads generated around $25 million in revenue for Google last year, while sales of radio and newspaper ads brought in even less, says one person familiar with the results.

Others in the ad industry are skeptical about whether Google's forays into these advertising categories will ever be as profitable as the company's stronghold, search ads, where it holds a major lead over rivals.

"They will do some good business, but not at the [profit] margins" the company has with search ads, said Maurice Lévy, chairman and chief executive of advertising giant Publicis Groupe SA, late last year.

Mr. Armstrong says it will take Google another five or 10 years to realize its advertising vision. He says advertisers are getting on board, but he acknowledges that the company's main rivals have adopted similar approaches. "The next five years of the Internet is about execution," he says.

By: Kevin Delaney
Wall Street Journal; July 9, 2008

YouTube Unplugged

As Foreign Governments Block Sensitive Content, Video Site Must Pick Between Bending to Censorship, Doing Business


On Sunday, access to Google Inc.'s YouTube inside China was cut off after the Web site was flooded with graphic images from Tibet, including videos of burning trucks and monks being dragged through the streets by Chinese soldiers.

Blocking Western Web sites is routine in China, where the government has tightly controlled the flow of information. But the new YouTube blackout is the latest in a string of clashes between the site and foreign governments in Asia and the Middle East that's forcing the company to grapple with the consequences of its increasingly global reach.

Google Chief Executive Eric Schmidt raised the issue in a meeting in Beijing with Cai Mingzhao, vice minister of the State Council Information Office, on Monday, the company said. The Council denied any knowledge of the blockage and promised to investigate, according to Google. On Thursday, YouTube remained inaccessible from China except to users who took extra technical steps to circumvent the ban.

Last Friday, a Turkish court banned YouTube over a clip deemed disrespectful to Mustafa Kemal Ataturk, Turkey's founder. In February, Pakistan briefly banned YouTube because of an anti-Islam video clip posted on the site that the government said was so inflammatory it could spark riots. In the fall, Thailand blocked YouTube after the site refused to remove a video considered insulting to the nation's king. (The clip showed a pair of women's feet -- considered the most offensive part of the body -- above the king's head.) And citizens in a number of other countries, including Syria, United Arab Emirates and Morocco, have reported YouTube outages after sensitive content was posted.

The clashes have implications for YouTube's growth abroad, potentially forcing the company to choose between bending to censorship and losing business opportunities.

"This is a situation that the company and all Internet companies will be facing in many countries with all types of political systems as the Internet matures and millions more people log on," says Robert Boorstin, Google's director of policy communications in Washington. "At all times, our goal is to maximize the amount of information available to citizens around the world."

Nowhere is the issue more pressing than in China -- home to the world's largest population of Web users -- where agreeing to government censorship has been a basic condition of doing business for years. YouTube is still a relatively small player in China, lagging behind homegrown competitors like Tudou.com and Yoku.com. But it has a loyal following among young urban Chinese, who use it to find cutting-edge animation clips from Korea and Japan. Many Chinese also know YouTube as a place to find sensitive clips that have been removed from other Chinese sites.

The site has been blocked in China several times before, including for an extended period in October. That was around the time that YouTube launched a site in Taiwan, the U.S. Congress awarded the Dalai Lama its gold medal and the Chinese Communist Party congress was under way. YouTube has localized versions of its site in Taiwan and Hong Kong, but not one hosted in China itself, a move that would require an Internet-content license from the Chinese government. Google has said it doesn't plan to host user-generated content, such as video, blogs or email, on computer servers in China. Such materials would be vulnerable to seizure by the government if located on servers there.

Google previously grappled with censorship issues in China when it released a Chinese search service in January 2006. At the time, it decided to censor its search results to comply with Beijing's strict limits on access to information, concluding that was better than not offering any regularly accessible service at all. On Thursday, a Google search for "Tibet" and "riots" turned up few results. The same search on Google's U.S.-based English search site produced some 461,000 results.

So far, YouTube is taking a similar approach, despite ongoing debate at Google over the strategy. In Thailand, in order to be accessible, it agreed to block Thai users from seeing clips deemed insulting to the king in violation of Thai law. In Turkey, YouTube has suspended the account of the person who uploaded the Ataturk video, though the site remains banned there. In Myanmar, YouTube was banned after clips of protesting monks appeared on the site. In that case, YouTube declined to remove the clips and remains banned.

Media analysts say YouTube's string of censorship flare-ups -- and the site's sometimes inconsistent responses -- indicate it needs to develop a more transparent strategy for dealing with these issues. YouTube's community guidelines state the site encourages "free speech and defend[s] everyone's right to express unpopular points of view." But the site also reserves the right to remove content it deems inappropriate, which gives it significant discretion when it comes to politically sensitive content.

"We have a delicate balancing act between being a platform for free expression and also obeying local laws around the world," says YouTube spokesman Ricardo Reyes.

YouTube reviews videos when they are flagged by users to determine whether they violate its terms of use, which prohibit such content as graphic violence. YouTube users can appeal the removal of videos, which can trigger a secondary review.

After being alerted by users last month, YouTube removed a video clip that appeared to document abuse of prisoners at a Russian prison camp that YouTube determined violated the site's graphic-violence policy. It eventually restored the video but required viewers to click to consent to watch a clip that "may contain content that is inappropriate for some users." YouTube says its staff hadn't initially been aware that the video was meant to document alleged human-rights abuses.

The stakes are high because material distributed on YouTube is affecting some of the world's most incendiary political situations. "It's actually changed the whole political scenario in Pakistan," says Shahzad Ahmad, an activist with the civil-rights group Bytes for All in Pakistan, who believes the site played a role in the defeat to Pervez Musharraf's party in recent elections.

Google has reached out to the U.S. State Department for assistance with the censorship issue in China, says a person familiar with the matter. The company, along with Yahoo Inc., Microsoft Corp. and others, has been working for more than 18 months with human-rights groups, academics and socially responsible investors to develop a code of conduct for operating in countries that limit free expression and individual privacy. A bill to be considered by Congress would require U.S. companies to provide the U.S. government with details of any compliance with censorship in Internet-restricting countries.

By: Jane Spencer & Kevin Delaney
Wall Street Journal; March 21, 2008

Does the Web Deserve The Power It Gained To Influence Politics?

Considering how Barack Obama is one of YouTube's biggest stars -- the video of his Philadelphia speech on race is just the latest involving the senator that, by Web metrics, went platinum -- you'd think he would be one of the site's most unalloyed fans. The other day, though, he was vigorously ambivalent.

Those enlessly played clips showing Rev. Jeremiah Wright making controversial racial statements, Sen. Obama told an interviewer, aren't representative of the man. "I don't want to suggest that somehow, the loops you have been seeing typifies the services all the time," Sen. Obama said. "That is the danger of the YouTube era. It doesn't excuse what he said. But it gives it some perspective."

As with Nixon going to China, it might take an Obama, with solid youth-tech cred, to suggest any downside to the online world. Considering the rapidly growing number of Americans who rely on the Web to follow the election and judge its players -- even if mostly via mainstream-media sites -- it's a good time to look at all the Web does very well with politics, and at what it messes up.

Web videos, especially on YouTube, are a good place to start. They have been called the death of the TV sound bite, for the way voters can experience lengthy realities without the filters of a news show constrained by time limits and commercials. The 37 minutes of Sen. Obama's race speech quickly became one of the most widely downloaded.

Less clear is whether YouTube will be just as bad, or worse, at blurring the line between a fair point and a cheap shot than newspapers or TV ever were.

Elected officials, especially those in small communities, have complained since the invention of the camera that one sure way to get their picture into the paper is to fall asleep at some legislative event, even one that has lasted all night. But if a dozing politician thinks being in the day's newspaper or the night's newscast was a problem, wait until the clip gets viewed eternally online.

Montana Republican Sen. Conrad Burns had plenty of other problems when he ran for re-election in 2006, but the campaign wasn't helped when he was caught shutting his eyes for a few seconds at a Senate hearing on a farm bill.

Videos like these may enjoy the popularity they do because they confirm ideas already held about the politicians involved, in which case blaming YouTube confuses cause and effect. But there is a danger that our politics might be shaped by insignificant events that assume an importance merely by having been caught on tape.

It's not just video that is being refashioned in the Internet age, but words, too, through blogs and other widely democratized forms of expression. Blogs are enormously useful, if only because of the way they allow communities with similar politics to follow the ups and down of a campaign as a group.

When Hillary Clinton or John McCain give major policy speeches, commentators feel compelled to have their thoughts online within a few hours -- even those who work for weekly newsmagazines. And, in keeping with the conventions of blog posts, which rarely go on for more than a screenload of type, they were often expressed in just a few hundred words.

Blogs then, make possible an amazing diversity of lucid ideas, but those ideas tend to be quickly considered and briefly expressed before everyone moves on to the next topic du jour.

Discussion such as this one about the Web and politics usually involve the newest and most glamorous parts of the Internet: the participatory, Web 2.0 neighborhoods, like blogs and YouTube.

One of the biggest electoral impacts of the Web involves one of its earliest applications: email. It's an easy and effective way for people to share ideas with friends about what might be going on with the candidates. By operating person-to-person and under the radar, email can have an enormous and injurious influence before anyone even notices.

The Obama camp learned this earlier this year when emails making false statements about the candidate's religion started showing up in millions of in-boxes. Old-fashioned whispering campaigns usually work only in relatively small, cohesive communities. With email, though, they can be national and nearly instantaneous.

Suggesting that there is both good and bad with the Web and politics isn't to say they exist in equal amounts. Say what one will about the shortcomings of blogs, I can't imagine going back in time to a world where a relatively small number of newspapers and magazines -- even though by and large they were very good ones -- had an effective monopoly on what did and didn't get printed about a campaign.

The Web isn't going away, and so its boosters should no longer feel defensive when its inanities are pointed out. The YouTube political debates where voters submitted video questions, from January, for example, were described as a singular chance for citizens to question candidates directly, which sounded good until one of the questioners presented himself as a snowman.

Because it's such a vastly powerful network, the Internet has the ability either to elevate or to debase the political discussion. Both will be occurring between now and November, though with a little luck, not in equal amounts.

By Lee Gomes
Wall Street Journal; March 26, 2008