Rhapsody, along with Best Buy’s (BBY) Napster, sell music via monthly subscription, as opposed to Apple’s (AAPL) a la carte download offering. But neither service has been able to gain much traction, despite years of effort.

Real Networks (RNWK) currently owns 51 percent of the Rhapsody, which it started, and Viacom’s (VIA) MTV the remainder. Restructuring will give both companies a 49 percent share, and “one or more minority stockholders” will own the rest.

There are a few other details, spelled out in the SEC filing below (for instance, Real needs to pony up some cash, and MTV gets released from some of the marketing agreements it signed on for a couple years ago). But the takeaway is this: Both companies get to move the money-losing music service off their books, and the new structure may theoretically give them a better chance of finding a buyer for the thing.

Last month Real’s founder, Rob Glaser, announced he was stepping down from the company’s CEO spot. But this reorg has been in the works for a bit: Real alerted shareholders to a possible move back in November.

Here’s the relevant text from the SEC filing:

On February 9, 2010, RealNetworks, Inc. (“Real” or “RealNetworks”), RealNetworks Digital Music of California, Inc., a wholly owned subsidiary of Real, MTV Networks, a division of Viacom International Inc. (“MTVN”), DMS Holdco, a wholly owned subsidiary of Viacom International Inc., and Rhapsody America LLC, a Delaware limited liability company (“Rhapsody”) and joint venture formed by Real and MTVN (together with the other parties listed above, the “Parties”), entered into a Transaction, Contribution and Purchase
Agreement (the “Transaction Agreement”), which contemplates a restructuring of Rhapsody. Real and MTVN formed Rhapsody in August 2007 to jointly own and operate a business-to-consumer digital audio music service. Real currently owns 51% of the equity of Rhapsody and Viacom owns the remaining 49%.

At the closing of the transactions contemplated by the Transaction Agreement, Rhapsody will be converted from a limited liability company to a corporation, and the Parties expect that Real and MTVN and one or more minority stockholders will hold the outstanding shares of Rhapsody such that Real and MTVN will own slightly less than 50%, but an equal amount, of such outstanding shares. Real will contribute $18 million in cash, the Rhapsody brand and certain other assets in exchange for shares of convertible preferred stock of Rhapsody, carrying a $10 million preference upon certain liquidation events. A portion of Real’s cash contribution is to repurchase the international radio business that was previously contributed to Rhapsody. MTVN will contribute a $33 million advertising commitment in exchange for shares of common stock of Rhapsody, and MTVN’s previous obligation to provide advertising of approximately $111 million as of December 31, 2009 will be cancelled. In addition, both the Stockholder Agreement, dated as of August 20, 2007, between Real and Viacom International Inc., on behalf of MTVN, and the Limited Liability Company Agreement, dated as of August 20, 2007, among the Parties will be terminated, including the put and call rights held by Real and MTVN and MTVN’s rights to receive a preferred return in connection with the exercise of Real’s put right.

Real expects that the transactions contemplated by the Transaction Agreement will be completed late in the first quarter of 2010, subject to the satisfaction of customary closing conditions. At the closing, the Parties will enter into a Stockholder Agreement that contains provisions regarding the governance of Rhapsody, stock transfer restrictions and approval of certain corporate transactions. Rhapsody will
be initially governed by a Board of Directors with two directors appointed by each of Real and MTVN and one independent director appointed by mutual agreement of Real and MTVN. At the closing of the transactions, the Parties will also amend certain existing agreements, including the expansion of the technology and intellectual property licenses from Real to Rhapsody relating to the core technologies for the Rhapsody audio digital music service to provide worldwide, perpetual licenses and certain rights for use of the core technologies in business-to-business audio music services.

Upon the completion of the transactions contemplated by the Transaction Agreement, Real expects that it will no longer consolidate Rhapsody’s financial results with Real’s consolidated financial statements.

The result? Music sales are slowing.

Warner Music Group (WMG) said this morning that it has seen unit sales growth at Apple’s (AAPL) iTunes decelerate since the price increase: Industrywide, year-over-year “digital track equivalent album unit growth” was at five percent in the December quarter, down sequentially from 10 percent in the September quarter and 11 percent in the June quarter.

And since iTunes sales make up the majority of Warner’s digital revenue, growth is contracting there, too. In the last quarter, digital revenue at the label was up eight percent compared with a year earlier, when that number was 20 percent.

The positive spin here is that music downloads are a “mature” business anyway. So by raising prices, the labels are simply extracting whatever value they can.

And indeed, Warner CEO Edgar Bronfman Jr. argued that the pricing change has been a “net positive” for Warner. But he also suggested that in hindsight, perhaps it wasn’t a great idea to raise prices 30 percent during a recession.

So here’s the question for the book industry, which has been working very hard to boost the price for its digital goods: Which lesson do you learn from this?

My gut is that the industry will see this parable the way Bronfman apparently does: If you can move prices up early in the digital adoption cycle, you’re much better off.

During the earnings call, Bronfman sounded a bit wistful as he noted the book industry’s apparent success, with the help of Apple, at raising prices above the $9.99 floor Amazon (AMZN) had set. “It’s interesting that the book publishing industry, on the iPad, has much more flexibility than the music industry had,” he noted.

The counter here is the one that seems obvious to everyone else: Lower prices and you can sell more stuff. Looks like we’ll be getting another real-world test of this economics lesson soon.

Comes now Jeff Bronikowski, who spent 11 years at Universal Music Group, the world’s biggest label, and left last year.

In an interview with Billboard, the former SVP of “global digital initiatives” explains concisely why his former employer and the other big guys are just playing out the string: CD sales are wasting away, and the digital boost they were counting on simply isn’t big enough.

Download growth is slowing down, dominated by one retailer. The ancillary revenue streams like ringtones are in decline, and the new possibilities like Nokia’s Comes With Music haven’t panned out yet either.

To be fair, Bronikowski then offers a qualifying, semihopeful note. Which he needs to do, as he’s still working with the music labels–now as the head of Yahoo’s (YHOO) small music unit.

And I occasionally talk to someone in the recorded music business who still thinks the labels can pull it off–maybe Spotify will really work or maybe Apple’s (AAPL) cloud strategy will help boost sales. Etc.

You never know! They could be right. Sony (SNE) even reported an uptick in sales last quarter. But after a decade-long slump, it is getting awfully difficult to find a bona fide optimist.

Such a glum post, so early in the morning! Time to liven it up, per request. Thanks to Tristan Mahr.

That was way back in October, though, and since then, production delays have slowed the Nook’s entry into the market. The devices were hard to buy online for the 2009 holiday season. And they haven’t been available at all in stores–you could talk to a store rep about one, and if you were lucky, you got to fondle one, but that was it.

Now Barnes & Noble (BKS) says that starting Wednesday, the $259 device will be available in the “majority” of its 775 U.S. stores.

Better late than never. But not a lot better.

Barnes & Noble’s problem, of course, is that in the last couple weeks, the e-reader market has been completely redefined, at least among the chattering classes: It’s now Amazon’s (AMZN) Kindle vs. Apple’s (AAPL) iPad.

It’s still theoretically possible for Barnes & Noble–and Sony (SNE), for that matter, as well as Plastic Logic and the other would-be competitors–to elbow their way in, since the e-book market itself is still pretty young.

But they had better move very, very fast. Even if they offer devices that are as good or better than Apple’s or Amazon’s, they’ll be hard-pressed to combat the other huge advantages those two have over the rest of the pack–established e-commerce relationships with a huge customer base.

Underwhelmed

The majority of TV ad buyers say they think their spots are less useful than they used to be. At least according to a new study from Forrester-ANA, which surveys top advertisers: 62 percent feel TV ads “are not as effective” as they were two years ago.

The Forrester (FORR) study is full of nuggets that will cheer those who want to radically transform the TV ad model. For instance:

• Ad buyers have reduced the amount they are spending on TV and are now allotting just 41 percent of their budgets to the boob tube, compared with 58 percent in 2008.
• 66 percent think DVRs “will destroy or reduce the effectiveness” of the 30-second ad.
• They overwhelmingly hate the existing metrics used to measure TV programming.
• 63 percent think Google (GOOG) will dominate “tomorrow’s big advertising winners,” ahead of cable operators (53 percent), cable networks (47 percent) and broadcast networks (nine percent).

So when can we declare traditional TV ads DOA? No time soon. Even in decline, TV ads are a $70 billion business, give or take a billion, and it’s going to take a lot effort to move an industry that size–even mighty Google has had no luck to date.

But Google also got a second promotion during last night’s game, though I’m guessing it didn’t pay for this one. An ad promoting Internet-connected TVs from Vizio featured a battery of viral video stars made famous via Google’s YouTube–without ever mentioning Google (GOOG) or YouTube by name.

The spot does give formal, if very fast, shoutouts to Web services like Facebook, Pandora, Twitter, Vudu, Yahoo (YHOO) and Yahoo’s Flickr. Oh. And Beyoncé.

Swing and a miss, in my humble amateur advertising critic’s opinion.

For one thing, anyone who’s going to recognize the likes of Tay Zonday and the Numma Numma guy knows that the whole “cramming all of YouTube’s stars into one bit” bit has been done by lots of people before, most notably South Park. Everyone else will just wonder who the fat kid and the skinny dude are.

The other problem with this ad is one common to many efforts to sell Internet-connected TVs: It doesn’t explain the most compelling use for these things.

Because you may not want to watch YouTube on your big screen (or to use Twitter or call up Pandora, etc.). But you may very well want to watch streaming movies and TV shows from services like Netflix (NFLX) and Vudu.

You’d have to squint very hard to see that the Vizio spot was showing a clip from “The Hangover,” though. And chances are that almost no one who saw the ad has heard of Vudu (hence its sale talks).

So there’d be no way for anyone to know that Internet-connected TVs make this stuff really easy. Too bad. If you see this stuff demoed in person, it’s really compelling–it gets close to the “500 channels” pitch we used to hear about in the early 90s, in the best possible way.

At some point in the next few years, there will be no need to pitch this, because the majority of new TVs sold will be Internet-connected. In the same way HD is now more or less standard on new sets.

But for now, this stuff is still a novelty. A good way to change this might be with an effective ad.

A little odd, given that a couple of days ago, the network was offering every single “Tonight Show” episode O’Brien had taped on NBC.com. But then again, everything about this story has been odd. NBC declined to comment.

NBC–at least, I’m assuming it’s NBC–has also been aggressive about taking down Conan episodes from Google’s (GOOG) YouTube. So here’s a legally sanctioned clip from CBS (CBS) employee David Letterman discussing the whole affair:

A minor UPDATE: A sharp-eyed commenter at Gawker notes that NBC hasn’t completely excised O’Brien from its site yet. It is still running a blog for the “Horny Manatee”, a long-running bit on the show. Note, in screenshot below, the reference to the now-defunct nbc.com/conan, the “official online home of all things Conan” (click image to enlarge):

Less surprising is news that O’Brien’s image has been scrubbed, Soviet-style, from NBC’s 30 Rock headquarters.

FriendFinder, a collection of porn sites and niche social networks, was supposed to start trading this week, after filing for a public offering more than a year ago. But this morning, the company pulled its IPO, citing “market conditions.”

I’m assuming this is not a euphemism for the Dow’s plunge yesterday, but instead a polite way of saying “we couldn’t find buyers.” The AP reports that FriendFinder, which was trying to sell some 20 million shares for $10 to $12, sold 15 million shares at $7 each earlier this week in pre-IPO trading.

Now FriendFinder will have to find some other way to resolve its massive debt issues. The company throws off a lot of cash, but all of that–and more–is getting hoovered up by loan payments. It reported $45 million in income from operations in the first nine months of last year and spent $75.3 million on interest payments in the same period.

Meanwhile, if you’re in the market for a high-end sports car, this may be the time to make the FriendFinder team an offer. The company has yet to sell the Ferrari 360 Modena it bought from its founder for $125,000 in 2006. FriendFinder is carrying the car on its books at $95,000, but I’ll bet it’s willing to negotiate.

But here’s a consolation prize: Android users do get to use the coolest app in New York City. At least, according to the NYC Big App competition, which awarded its Grand Prize last night to Wayfinder NYC, an Android-only app.

Wayfinder, created by Victor Sima and Steven Lao, uses jaw-dropping space-age “augmented reality” technology–which layers map info, tied to GPS data, over the camera view of a user’s phone–to help people find the nearest subway station.

I’ve seen a couple variants of these, at least in demo form, and they’re some of the coolest things I’ve seen that aren’t in “Minority Report” or some other movie.

This one looks pretty cool, too. There’s no sound in this demo, so don’t be alarmed:

I don’t know what’s nuttier about the technology that makes an app like this plausible–the fact that we can integrate this stuff into a consumer device or the fact that we don’t run around shouting about how amazing this stuff is because we already take it for granted.

Anyway, here’s hoping that New York’s Metropolitan Transit Authority doesn’t put the hammer down on this one. The MTA  has been frustratingly slow to adapt to new technology but alarmingly quick to charge innovators with half-baked claims of copyright violation.

And it would be nice if the WayFinder team ports this thing to Apple’s (AAPL) platform so that New York City’s hordes of iPhone users can get their hands on it.

Translated into more practical terms, this means Hachette will demand that Amazon (AMZN) and other retailers–but really, this is aimed at Amazon–raise the prices on their e-books from the $9.99 standard they’ve adopted. Instead, the publisher will want them to use the $12.99-$14.99 standard for new books, which Apple (AAPL) introduced last week along with its iPad.

Hachette is one of five publishers that participated in Apple’s iPad launch event last week. Macmillan, one of the other five, has spent the past week engaged in a public battle with Amazon over the pricing model. On Sunday, Amazon said it would capitulate to Macmillan’s demands.

Macmillan and Amazon have yet to actually resolve their dispute, though, and as of Thursday night, Amazon was still not selling Macmillan’s books on its electronic shelves.

In Thursday’s New York Times, Macmillan advertised one of its titles by noting that it is available “at booksellers everywhere except Amazon.” Macmillan CEO John Sargent also defended his position, again, in an open letter to his book agents.

Meanwhile, look for the other three publishers that have allied with Apple–Pearson’s Penguin Group, News Corp.’s (NWS) HarperCollins and CBS’s (CBS) Simon & Schuster–to fall in line. On Tuesday, News Corp. CEO Rupert Murdoch said he expected to renegotiate his publisher’s deal with Amazon soon.

Again, it’s important to remember that by embracing the agency model, the publishers will actually make less per book than they do with the current version, whereby they sell the books at a wholesale price. But the publishers think this is their only chance to keep the prices of e-books from plummeting and undercutting sales of their ink-and-paper books.

The publishers hope this strategy will help them escape the fate of the music labels, which saw their $15 CDs replaced by $1 singles. To hear a (mostly) persuasive argument about why they’re wrong, check out this blog post from David Pakman, a digital music veteran now working as a venture capitalist with Venrock.

The short version: Rep. Rick Boucher, the Virginia Democrat who heads the Subcommittee on Communications, Technology and the Internet, asked NBC head Jeff Zucker about last year’s incident involving Hulu’s effort to bar Boxee from using its feed.

At the time, Hulu CEO Jason Kilar said his actions were prompted by his “content owners,” which most people, including me, assumed meant GE’s (GE) NBC and/or News Corp.’s (NWS) Fox, the media conglomerates that had invested in the video service.

But today at the hearings, Zucker pointed the finger back at Hulu (full clip at bottom of this post):

This was a decision made by the Hulu management to, uh, what Boxee was doing was illegally taking the content that was on Hulu without any business deal. And, you know, all, all the, we have several distributors, actually many distributors of the Hulu content that we have legal distribution deals with so we don’t preclude distribution deals. What we preclude are those who illegally take that content.

In a blog post, Boxee CEO Avner Ronen points out the seeming inconsistency between the two statements–though he’s incorrect in saying that Kilar blamed NBC, because Kilar didn’t actually say that in his original blog post. That makes sense, because Kilar is one careful and cautious dude, which you have to be when you’re running a joint venture that’s now co-owned by three big media conglomerates.

Ronen also restates his general case–that Boxee is not much more than a Web browser, so it’s not taking anyone’s content at all, just displaying it, ads and all. And from what I can tell, that argument is gaining increasing traction among some big media players.

But while I’ve never been able to get a straight answer from Hulu or its owners about the Boxee incident, I do get the sense that it’s one issue that sticks in the collective craw of Hulu managers. So I’m not sure things are going to get resolved anytime soon at that site.

I’ve asked Hulu and NBC for comment and will update if I hear back.

The deal to bring Eun on board was finalized last night, Armstrong told employees in an all-hands email (see below). It’s not a huge shock to see him leave–he’s done a lot of heavy lifting there already, and sources say that like many Google (GOOG) executives who have left recently, Eun felt he couldn’t move much higher in the company.

Eun used to have a role that paralleled Armstrong’s at Google: Make peace with traditional content companies. But instead of trying to sell them ads or negotiate search deals, Eun was supposed to hammer out deals to help get their content onto Google. Most recently, he was focused on getting TV networks and movie studios to put stuff on YouTube, which involved new ad-supported deals (see: Turner, ESPN, etc.) as well as the possibility of renting clips by the stream.

Wilson is a longtime AOL (AOL) guy who rose up the ranks and was pushing for the original content strategy that Armstrong embraced even before the last regime change. He seems to be leaving on better terms than other pre-Armstrong executives, as he’ll be staying with the company until May to manage the transition.

By leaving just as AOL has spun off on its own, Wilson is giving up a chance at some significant upside via low-priced stock options. But sources say Wilson doesn’t have another job lined up.

In an interview this afternoon, Armstrong says that Wilson approached him about leaving the company “several weeks ago”. When I asked him if Eun’s last role–developing partnerships with big media outlets–signaled a shift in AOL’s “roll your own–cheaply” strategy, he made a point of saying that’s not the case. Eun’s hire will simply “supercharge” AOL content plans, he said.

Nonetheless, Armstrong did allow that AOL has some significant content partnerships to announce in the coming months.

Here’s an interview I conducted with Eun late last year, focused on YouTube’s efforts to turn a profit and add new content:

And here’s Armstrong’s note to the troops:

As you know, content is at the core of our strategy and we have broad aspirations in this space. We’re focused on scaling our content platforms, production and partnerships to offer quality, original content that will engage consumers and bring them–and their friends–back to our properties time and again.

The fact that we have such a strong foundation in the content space is due to the determination and dedication of Bill Wilson. He saw the opportunity presented by audience fragmentation on the Web and positioned AOL’s content offerings in a number of key verticals. Early in the new year, Bill told me that although he remains committed to the vision and strategy of AOL, he’s ready for a break.

After nine years with the company and after the significant changes we made this year moving from licensing content to becoming a principle in content, he wants to take a step back. Bill built a strong management team and laid the groundwork for the content strategy that we’re now pursuing. While I’m disappointed by his decision, I respect his intent and have asked him to work with me, not only to find his replacement but also to transition with that person to ensure that, as a company, we don’t miss a beat on the execution of our content strategy.

Bill is a talented executive and great person, and I’ll be working with him closely and supporting his transition. Bill cares about AOL, he cares about the content and the products, and he has worked incredibly hard to keep AOL on the media map.

I’m pleased to announce that David Eun will be coming on board in March to head up our content business. Some of you may remember David from his tenure at Time Warner where he helped to oversee AOL as Vice President, Operations, for the Media & Communications Group reporting to Don Logan.

David, who joins us now from YouTube and Google, has had a long career in offline and online content and is the person responsible for managing Google and YouTube’s content partnerships. David brings an impressive breadth of media experience to AOL at an exciting juncture as AOL forges a new future as a high-scale producer and partner in the content space. He will be based in New York.

Bill will be staying on until May 1 to help ensure a smooth transition with David, who begins work March 1.

You may wonder why this topic wasn’t raised during yesterday’s Q4 employee call. My preference is always to share this type of news with you in person, but the facts are that there were elements of this announcement that were not finalized until last night. This drove us to announce this news this morning–to our employees first.

As we have discussed, AOL is now in a phase of transition from playing defense to playing offense. As I said on the employee earnings call yesterday, AOL’s back in the game and we’re playing to win. We have a lot of work to do, but we’re going to do it. Please join me in welcoming David back to AOL and in thanking Bill for his dedication and leadership at AOL – TA

And here’s the release:

AOL NAMES DAVID EUN PRESIDENT OF AOL MEDIA AND STUDIOS

Eun Will Oversee All AOL Content, SEED.com and Studio Operations

New York, NY, February 4, 2010 – AOL Inc. (NYSE: AOL) today announced that David Eun will join the company as President of AOL Media and Studios, effective March 1. As AOL’s chief content executive, Eun will be responsible for the company’s more than 80 content sites, its new SEED.com publishing platform, as well as the newly acquired StudioNow video platform and AOL’s NYC and LA studios.

Eun will report to AOL Chairman and CEO Tim Armstrong and will be based in New York. He succeeds Bill Wilson, President, AOL Media, who will transition out of the role after nine years with AOL.

Until 2006, Eun helped to oversee AOL as Vice President, Operations for the Media & Communications Group at Time Warner Inc. In that role, he helped provide operational oversight and develop new businesses, particularly in digital distribution and broadband content and services, for the company’s AOL, Time Warner Cable and Time, Inc. divisions. Eun joins AOL from Google, where as Vice President, Strategic Partnerships, he was responsible for managing global content partnerships with Google and YouTube.

“David brings an impressive breadth of media experience to AOL at an exciting juncture for the company as we focus on scaling our content platforms, production and partnerships to offer quality, original content that will engage consumers and bring them–and their friends–back to our properties time and again. I’m delighted to welcome him back to AOL as we continue to pursue our strategy and mission in digital content and journalism,” Armstrong said.

“Bill Wilson has been a driving force for content at AOL and under his leadership the quantity and quality of our premium branded and niche offerings have expanded significantly. On behalf of AOL, I want to thank Bill for the energy and dedication he has brought to the role. Bill has been an outstanding leader at AOL,” Armstrong added.

“AOL has a unique opportunity to bring together its core strengths in the key areas of content and journalism, distribution, and advertising to engage its users, partners and advertisers in a way very few companies can. These three elements will be fundamental to success as the media and technology industries evolve and converge,” Eun said. ”And after nearly 15 years of seeing this convergence approach, I couldn’t be more excited to be returning to AOL to help Tim and his team capture that great promise.”

AOL is one of the largest producers of original content on the Web, with more than 80 official AOL and custom-built sites including more than 20 which rank in the top five in their U.S. comScore Media Metrix category. Approximately 80 percent of AOL’s content is originally produced by a growing team of staff and freelance journalists, including nine Pulitzer Prize Winners. AOL also produces more than 50 original video productions a month at state-of-the-art studios in New York and Los Angeles as well as through a network of freelance video producers.

SEED.com, AOL’s premium content management system, assigns, buys and distributes work for all of AOL’s properties.  StudioNow, which AOL acquired in January, allows the company to integrate a fully functional video creation platform into SEED and leverage a national network of creative professionals to develop and produce quality video in a way that is rapid, efficient and scalable.

Before joining Time Warner, Eun was a partner at Arts Alliance, a venture capital firm focusing on digital media, information technology and business services. He started his career in media at NBC, where he led some of NBC’s first cross-media initiatives involving television programming, the Internet, and retail consumer products. He is a former management consultant with Bain & Co., and attended Harvard Law School and Harvard College, where he graduated magna cum laude in government.

]]> http://mediamemo.allthingsd.com/20100204/another-googler-goes-to-aol-youtube-boss-dave-eun-replaces-bill-wilson-as-content-boss/feed/ 1 http://mediamemo.allthingsd.com/20100204/the-appfund-wants-to-make-ipad-developers-a-deal-should-they-take-it/ http://mediamemo.allthingsd.com/20100204/the-appfund-wants-to-make-ipad-developers-a-deal-should-they-take-it/#comments Thu, 04 Feb 2010 19:26:32 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15955 It’s a pretty standard chain of events: New platform opens up, investors try to attach themselves to developers who want to exploit it.

So here come the folks who want to invest in iPad apps. Last week, a U.K. group announced a very small fund to promote iPad apps in that country. Today, we hear from AppFund, which says it has a “multi-million” kitty that will allow it to invest any amount between $5,000 and $500,000 in new iPad apps.

The two obvious questions here are:

• How does this differ from any of the iPhone app funds we’ve already heard about, specifically Kleiner Perkins’s $100 million iFund? After all, one of Apple’s (AAPL) key selling points for the iPad is that all existing iPhone apps will work on it from Day 1.
• If you really only need $5,000 or so to help you build your app, does it really make sense to give up equity to get it?

Daniel Klaus, who is launching the AppFund with Kevin Wendle (bios here), says his venture differs from iFund in that it has a smaller scope–the iFund’s minimum investment starts at $100,000–and that his group is willing to buy pieces of individual apps instead of their parent companies.

As to the economics? Hard to tell, since the AppFund guys aren’t providing any transparency into their offer to developers (as opposed to groups like Y Combinator, which offer entrepreneurs a fairly boilerplate deal).

In any case, if you’re interested, here’s what the AppFund guys are looking for in an app:

• Target early adopters and urban dwellers
• Target users 16-39 with higher incomes
• Incorporate video, audio, interactivity, and other capabilities unique to the iPad
• Have a long shelf life
• Have the potential to become “hits”

]]> http://mediamemo.allthingsd.com/20100204/the-appfund-wants-to-make-ipad-developers-a-deal-should-they-take-it/feed/ 0 http://mediamemo.allthingsd.com/20100204/disney-no-decisions-have-been-made-on-hulu-premium/ http://mediamemo.allthingsd.com/20100204/disney-no-decisions-have-been-made-on-hulu-premium/#comments Thu, 04 Feb 2010 14:48:27 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15942 So, when’s that Hulu Premium service we heard about last fall going to show up?

If Disney EVP Kevin Mayer knows, he’s not telling. But for the record, he says, “no decisions have been made” about what kind of pay models and services the video site is going to use, or when they’ll roll out.

In short, the only concrete thing that the Disney (DIS) executive, speaking at the DeSilva+Phillips Dealmakers conference this morning, would allow is that the video site will indeed be asking some consumers to pay for something at some point.

That could come in the form of subscriptions, a la carte downloads, streaming rentals or all of the above, Mayer said. This would be in addition to the free ad-supported stuff Hulu is already offering. “I think we ultimately should and will have a hybrid approach,” said Mayer.

Mayer is one of the key Disney executives who pushed the company to join News Corp.’s (NWS) Fox and GE’s (GE) NBC in the joint venture last year instead of accepting a competing offer from Google (GOOG) and YouTube. YouTube, meanwhile, is still working on paid services of its own.

For the record, I followed up with Mayer after his appearance this morning and asked about the status of Disney’s talks with Apple about its proposed iTunes subscription service. Industry sources believe that Disney is the most likely of the big media companies to sign up with Apple (AAPL). But Mayer, not surprisingly, declined to comment.

]]> http://mediamemo.allthingsd.com/20100204/disney-no-decisions-have-been-made-on-hulu-premium/feed/ 0 http://mediamemo.allthingsd.com/20100204/surprise-of-the-day-people-still-buying-some-music/ http://mediamemo.allthingsd.com/20100204/surprise-of-the-day-people-still-buying-some-music/#comments Thu, 04 Feb 2010 12:48:54 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15938 The music industry’s decline has been so prolonged that this now qualifies as a man-bites-dog story: Sony says its music sales actually went up, just a bit, in the last quarter.

The conglomerate’s music division doesn’t represent much more than a footnote in its overall financial picture, but in the last quarter, it was at least a positive footnote. Sales were up two percent–seven percent if you cancel out currency fluctuations–and operating profit was up 8.2 percent.

Hard to argue that this uptick will be sustainable, though. Sony (SNE) says the boost came from a couple individual success stories that will be hard to repeat, for obvious reasons: People bought lots of copies of the soundtrack to “This Is It,” the Michael Jackson concert movie, as well as the debut album from cultural oddity/viral video favorite Susan Boyle.

Looking for more traditional music business news? I can oblige: Music industry types tell me they’re freaked out that physical sales could take another steep tumble this year if retailers like Wal-Mart (WMT) and Best Buy (BBY) shrink the tiny amount of floorspace they devote to CDs yet again. And they’re also worried that digital sales are finally flattening out.

]]> http://mediamemo.allthingsd.com/20100204/surprise-of-the-day-people-still-buying-some-music/feed/ 4