Aero, the fledgling broadcast antenna/digital recording subscribership, has filed a countersuit in New York against broadcasters and studios. Those networks and studios sought an injunction against Aereo’s proposed $12 per month subscription service in New York City which would use an antenna to stream broadcast TV digitally, and a cloud-based service to record it (a sort of digital DVR).
Those networks and studios claim that the service would infringe upon their content. But as Broadcasting & Cable describes, Aereo vigorously denies it has broken any copyright law—despite the fact that the service would pay nothing to broadcasters and rights holders for their content. Aereo’s defense is that broadcast content is essentially free, and that Aereo is charging $12 for the value it adds to that service. Consumers would use the Aereo technology to do what they do anyway—watcha nd record television.
Aereo filed its Answer and Counterclaim against one of two suits brought against it. This suit involves ABC, Disney, CBS, NBC and Telemundo, among others. A second was filed by PBS, Fox, Univision and Twentieth Century Fox Film Corp., among others.
While Aereo in its Answer and Counterclaim admits not having received written authorization from the networks, it argues that no such authorization is needed.
For advertisers, the service would add time-shifted reach for its TV placements, but time will tell. Because of the injunctions against it, Aereo was unable to launch on March 12th as it had hoped.
Aereo is a startup, funded in part by media heavyweight Barry Diller, who created both Fox Broadcasting and USA Broadcasting.
At the heart of Yahoo’s just-announced lawsuit against Facebook: patent violations, particularly with regards to targeted advertising. Yahoo lists 10 patents which upon which Facebook has supposedly and knowingly infringed, which include patents for advertising; privacy; customization; social networking and messaging.
Forbes describes the stakes. Yahoo is claiming that Facebook relies upon its patents “to direct ads to viewers who have expressed an interest in certain topics and the pay-per-click model for charging advertisers, which it says requires Yahoo!’s patented algorithms” to strip away fraudulent or unwanted clicks.
If Facebook were to be disallowed the technology, then, the personalized experience of Facebook, both in social networking and advertising, would be essentially wiped out. The New York Times in its DealBook section has listed just what those ad patents are, being three entitled “Method and system for optimum placement of advertisements on a webpage,” granted in 2005, 2006 and 2008, and one called “System and method to determine the validity of an interaction on a network,” granted 2010. Also in contention, at the sheer ability to target those ads, as the suit includes patents for generating a “community bias” and a “dynamic page generator.”
Facebook in a statement said that “We’re disappointed that Yahoo, a longtime business partner of Facebook and a company that has substantially benefited from its association with Facebook, has decided to resort to litigation.” Facebook claims that after some unsuccessful negotiations, it “learned of Yahoo’s decision simultaneously with the media. We will defend ourselves vigorously against these puzzling actions.”
How likely is this to put the brakes on Facebook advertising? Not very, frankly. This kind of suit is commonplace, “Where a company that used to be a leader asserts patent against a newcomer gaining share,” said Alexander Poltorak, chairman of the patent consulting firm General Patent, in the Forbes story. For example, Apple is fielding lawsuits from both Motorola and Samsung for smart phone technology. Settlements are more commonplace in patent disputes, and Apple last year settled with Nokia in a patent suit, for a one-time fee and royalties.
Still, Yahoo has retained a tough firm that once achieved a settlement with Facebook. As The New York Times describes, Yahoo has retained Los Angeles-based Quinn Emanuel Urquhart & Sullivan, which represented the Winklevoss twins against Facebook. The twins had hired Facebook CEO Mark Zuckerberg as a programmer to create a social network, and of course Zuckerberg went on to found Facebook, independent of the Winklevoss brothers. The Winklevoss twins took $65 million and Facebook moved on.
So Facebook ads are likely to continue, unabated. Yahoo is likely to walk away from the proceedings with some satisfaction, but not enough to recoup the leadership position it once held.
- Foursquare co-founder Naveen Selvadurai is leaving the company, reports AllThingsD, just three years after launching the check-in service. Sevaldurai will remain on the company’s board, but is unsure about “my exact next steps.” Foursquare investor Spark Capital is buying up employee stock, and Selvadurai and co-founder Dennis Crowley previously sold shares in an earlier funding round.
- The Girl Scouts are celebrating the organization’s 100th birthday by “embracing mobile technology and accepting mobile payments for their fundraising cookies,” according to BizReport. Girl Scouts in 23 States are accepting mobile payments, using Sage technology on smart phones and notebook computers, and early returns from North East Ohio troops are encouraging; they report that mobile payment is behind a 13% boost in sales. Girl Scouts estimates its annual cookie program brings in $760 million per year. Troops not using mobile technology experienced flat sales.
- Streaming TV providers “strain to retain” customers, reports Adweek. Time Warner CEO Jeff Bewkes and Comcast EVP Neil Smit are urging investors to pressure cable operators and Nielsen to support the “TV Everywhere” concept, which allows cable subscribers who can verify their memberships to access cable content digitally, on computers and mobile devices. Bewkes and Smit spoke at last week’s Deutsche Bank Media and Telecommunications Conference. “We’re giving the customers no reason to go anywhere else,” said Smit, describing the company’s Xfinity Streamplay service. The TV Everywhere initiative positions Time Warner and Comcast to better compete against streaming services from Netflix and Hulu. The Time Warner and Comcast stream would differ from Netflix or Hulu in being ad supported.
- Marketing guru and author Seth Godin is grumping at Apple, which refused to carry the digital edition of his new book Stop Stealing Dreams in its iBooks Store. As Time reports, Apple rejected the title because its bibliography included links to rival bookseller Amazon.com. Godin wrote in a blog post entitled “Who decides what gets sold in the bookstore?” “I think that Amazon and Apple and [Barnes & Noble] need to take a deep breath and make a decision on principle: what’s inside the book shouldn’t be of concern to a bookstore with a substantial choke on the marketplace.”
- Southwest Airlines is suing to shut down a website providing Southwest customers with first-in-line boarding, reports Denver Business Journal. SW Software Development’s “MySouthWestCheckin” takes $5 to offer the preferential seating, using a patch-through to the Airline’s own website. Southwest Airlines complains that this robs it of selling and advertising opportunities, and trespasses on Southwest’s website. Southwest Airlines filed its suit in the U.S. District Court in Dallas, where the airline is based.
Aereo has an interesting idea: digital “rabbit ears.” Snatch broadcast from the air, stream it like cable, add recording capability (a cloud-based DVR), and charge for the service. Test it in New York, then go national.
Not so fast, says a battalion of broadcasters, including PBS, Fox, Univision, ABC, CBS and NBC.
As Deadline New York describes, Aereo is a startup, funded in part by media heavyweight Barry Diller, who created both Fox Broadcasting and USA Broadcasting. Aereo last month announced it would launch a $12 a month subscription service in New York City on March 14. Aereo would retransmit broadcast TV signals, and enable customers to record and watch shows on demand like they would with a DVR.
ABC, CBS and NBC filed a complaint with the U.S. District Court in New York, asking for an injunction against Aereo, with the statement that “This service is based on the illegal use of our content….[Aereo] free rides on [the stations’] substantial investment in their broadcasting infrastructure.”
Nonsense, counters Aereo. The service involves renting a tiny antenna, and “Consumers are legally entitled to access broadcast television via an antenna and they are entitled to record television content for their personal use.” Aereo argues that its antenna is akin to the old rabbit ears; the network argue that the cloud-based recording capabilities make it an Internet stream, and that is illegal use of the content. Besides, Cablevision once defended itself in a similar case, with its remote digital recording technology. An appeals court distinguished recording from transmission; recording in the age of the VCR and DVR could hardly be deemed copyright infringement.
No decision yet from the court.
The Obama administration has made it formal: in a report released yesterday, the Administration calls upon Congress to enact a privacy bill of rights for web users, and it calls upon companies like Google and Facebook to develop those standards, reports Business Week. Key among the rights is a simple, one-click opt-out of data collection. President Obama said in a statement “Consumers can’t wait any longer for clear rules…consumer trust is essential for the continued growth of the digital economy.”
Putting Google and Facebook in charge is a matter of fox guarding hen houses. Google was caught last week bypassing privacy settings on Apple’s Safari browser, which by default blocks cookies. Somehow, as CNN reported, Google tricked the browser into believing the viewer had interacted with an ad, thus giving Google permission to install a test cookie and collect user data. CNN called this just “the latest high-profile flap over online data privacy.” The Federal Trade Commission in 2011 settled complaints against Google, Facebook and Twitter over their handling of consumer data.
But, those companies are just three members of a consortium, which will also include the member organizations of the Digital Advertising Alliance (DAA). Those member organizations include the American Association of Advertising Agencies (4A's), the Association of National Advertisers (ANA), the American Advertising Federation (AAF), the Direct Marketing Association (DMA), the Interactive Advertising Bureau (IAB) and the Network Advertising Initiative (NAI). DAA said in a statement that the Administration had called upon it to “[create] robust self-regulation to protect consumer privacy rights and expectations in the advertising-supported Internet,” and claimed to be “honored.”
How honored DAA is has yet to be determined. The DAA earlier in February argued that it “wanted to put all the force of self regulation” behind ensuring consumer privacy, according to an Adweek story. It would police itself. But Adweek also observed that the Google snafu would likely put the kibosh on self regulation: the Administration is likely to legislate privacy measures. In fact, The Commerce Department will with with those companies and organizations—plus privacy advocate groups like the Center for Digital Democracy—to develop those (for now) voluntary standards.
Until any such legislation passes (if indeed), The White House report prescribed broad principles for the use of personal information, which includes giving consumers clear control over what data is collected and how it is used, the Business Week story describes.
Ad Targeting and Do Not Track
As the Business Week story described, privacy advocates are simply opposed to tracking consumers without permission, for purposes of targeted advertising.
DAA General Counsel Stu Inglis argues that online ad networks are willing and able to adhere to the anti-tracking tools available in most Web browsers (e.g., the “InPrivate” option available in Internet Explorer). Thus it is up to Mozilla with Firefox, Microsoft with Internet Explorer and so forth, to solve the opt-in/opt-out dilemma. Google said yesterday it would enable a “do-not-track” button to be embedded in its browser to let users limit information gathered on browsing habits.
No experts have weighed in on the potential impact to targeted advertising. But if Google, Microsoft and the DAA have their way, behavioral tracking will remain standard, and targeted advertising will survive it—perhaps for the better. Opt-in is of course the sign of a qualified sales lead.
The Interactive Advertising Bureau (IAB) has released the final version of its “Guidelines for the Conduct of Ad Verification,” in cooperation with the Media Rating Council (MRC). The advantage to advertisers and marketers is truth in numbers: IAB is promising that with a common set of standards, “companies engaged in the verification of interactive advertising campaigns can themselves be audited against a common, transparent standard.”
The participants in creating the guildelines include both buy- and sell-side heavyweights such as the New York Times, NBCUniversal, Turner Broadcasting, Yahoo!, Google, and verification services like AdXpose and Telemetry.
In an executive summary of the guidelines, IAB claimed as one of its goals to “reduce the chaos that has surrounded ad verification practice since its inception,” and to improve the trust between both buy- and sell-side industry organizations. “While ad verification in principle is valuable to the digital advertising industry, the lack of accountability created tension between the publishers and marketers.” said Steve Sullivan, Vice President, Advertising Technology for IAB. The Bureau “developed these guidelines to introduce a level of consistency into campaign assessments commensurate the industry's standards for impression measurement.”
The guidelines provide a detailed set of common methods and practices for verification of online advertising, useful to verification vendors and users of verification services (both buyers and sellers). They include mobile, e-mail or lead generation campaigns of all types and address a wide range of topics, including:
- Ad-serving prevention (“ad blocking”) carries larger implications to the buyer and/or seller because the intended ad serving transaction is interrupted. The guidelines recommend that ad blocking may be used in instances where the relevant domain or page-level URL is already on a blocking list, for competitive separation and fraud prevention. Ad blocking should only be built into ad serving systems, so decisions are made pre-serve.
- Nested iFrames are often recognized as legitimate technology, but because of browser operational/security considerations, there is limited visibility into the legitimacy of iFrames filled with content from outside the parent domain. For that reason, the guidelines recommend ad verification vendors have procedures to classify and report whether advertising served into iFrames from other domains has been appropriately executed. In addition, the general nature of the verification tools used to view iFrame content should be disclosed. Moreover, it is recommended that the industry minimize the use of nested iFrames.
- Geo-targeting IP-based processes can vary in quality based on the geo-targeting vendor used. The guidelines recommend geo-targeting vendors subject their processes to independent auditing and that natural differences in geo targeting accuracy between vendors be taken into account.
“Consistent and transparent conduct of ad verification is vital for deepening confidence in the industry and driving the advancement of digital advertising,” said George Ivie, Executive Director and CEO of the MRC. “We believe the issuance of these guidelines represent a major step toward achieving these goals.”
IAB has made the guidelines available on its website.
- A&E Networks has signed an agreement with Internet video ad-management provider FreeWheel, reports Multichannel News. A&E will deploy FreeWheel’s Monetization Rights Management system on its mobile properties, to manage advertising on Apple's iOS smartphones and tablets. The system will also enable A&E to manage ad loads based on criteria such as highest cost per thousand (CPM) and frequency.
- Glam Media, which claims to be "the number one vertical social media company with the largest online global reach in lifestyle," has launched its newest branded vertical—Foodie.com, integrating food-related content and social networking. Foodie.com features a combination of established food critics, high-quality bloggers, chefs, restaurateurs and other food influentials. Brand Advertisers running at the launch of Foodie.com include Betty Crocker and Dannon Activia.
- Apple is using two newly-granted patents to try to halt Samsung smart phone production, reports paidContent. One of the patents covers the spelling and auto-correct feature, the second covers targeted selection and retrieval. Apple in December unsuccessfully attempted to get a preliminary injunction halting production of the Samsung Galaxy tablet. Apple has appealed and is attempting to get a permanent injunction.
- Access Intelligence reports that “Price matters with consumers when it comes to apps.” According to a survey from app analytics provider Distimo, price points and discounts drive app sales. As Access Intelligence describes, among the top 100 grossing apps, iPad apps see a 52% boost in revenue on the first day of a sale; iPhone apps by 41%; and just 7% for Android apps. But, Android apps see a 29% increased revenue during a sale, versus just 19% for iPad apps and 22% on the iPhone. , and 19% over the course of severaliPhone app
- Late-night host Jimmy Kimmel told the Wall Street Journal celebrity guests regularly request that he include them on his YouTube “Jimmy Kimmel Live” channel. Kimmel claimed "I get sort of annoyed," but as the Journal described, Kimmel’s YouTube property is driving viewership to his TV broadcast, when most other late-night shows are losing viewers. Kimmel regularly invites viewers to upload video to the YouTube channel. The channel has nearly 320,000 subscribers.
In the wake of last year’s FCC ruling that Comcast (the U.S.’s largest cable provider) had discriminated against the small and independent Tennis Channel, Comcast was forced to carry Tennis on the same tier as Versus and Golf Channel, two Comcast properties. Now Current TV, NFL Network and Bloomberg TV are following suit, reports TVNewser.
In the spirit of competition, Bloomberg is seeking a position alongside CNBC and Fox Business Network; NFL Network wants to be placed near ESPN; and Current TV nearby MSNBC, CNN and Fox News.
As part of its deal to acquire NBCUniversal in 2011, Comcast agreed with the FCC to a “neighborhooding” clause, batching similar channels (e.g., children’s programming, sports) in subsequent channels; and not to discriminate in those groupings based on who owns the channels. Bloomberg TV complains that in Washington DC, for example, it occupies Comcast’s Channel 103 while NBCU-owned rivals (including MSNBC and CNBC) occupy channels 35-39.
Comcast pushed back against Bloomberg TV that if Comcast was forced to rework its lineup, “Millions of customers would be subject to disruption and confusion required by massive channel realignments across the country all to benefit an already thriving $30 billion media company.”
Missouri’s Lee’s Summit R-7 School District is weighing advertising on school buses as a revenue generator. The move would require passing enabling legislation by the Missouri General Assembly, and Rep. Mike Kelley, R-Lamar, has filed that bill.
Keith Asel, a regional bank president and member of an education funding subcommittee, told the Lee’s Summit Journal that “Seventeen states currently permit advertising on school buses,” with a typical revenue of between $2,500 and $5,000 per bus per year. The Colorado Springs, Colo. school district generates $40,000 a year from bus ads, but Summit R-7 expects to generate $3,750 from each of 147 buses, for around $550,000 per year.
New Jersey Governor Chris Christie signed legislation a year ago, joining Arizona, Colorado, new Mexico, Tennessee and Texas, among other states that allow advertising. Alpha Media President Michael Beauchamp at the time told USA Today that his firm managed advertising on 3,000 school buses in 27 districts in Texas and Arizona. The firm and school districts generally avoided "beer, tobacco, politics, churches, anything sexual in nature." The Medford, N.J., school board policy prohibits bars, drug companies and religious organizations. As Asel observed, likely advertisers for Lee’s Summit are bank or insurance companies supporting education, with image ads.
Still, it’s a “lousy way to raise money,” complains Director Susan Linn of the Boston-based Campaign for a Commercial-free Childhood. Advertising in schools and on school property “undermines parents who are trying to limit commercialism” in a child’s life. And she points out that the $40,000 Colorado Springs pulls in amounts to less than $1 a student, and falls far short of expectations. Still—$40,000 is a bargain for outdoor advertisers and a boon to a school district.
Child privacy protection can go too far, complains the Interactive Advertising Bureau (IAB). It believes a proposal by the Federal Trade Commission (FTC) that strengthens child privacy regulations “would have substantial negative effects for parents, children and companies alike.” The 10-year-old Children's Online Privacy Protection Act (COPPA) bans website owners from collecting such “unique identifiers” from children, such as names, addresses and telephone numbers, without parental consent. The proposed changes would broaden the definition of a “unique identifier” to include tracking cookies, device serial numbers, and in some cases, IP addresses, reports MediaDailyNews. This, complains IAB, would render behavioral targeting (e.g., targeted advertising and demographic data) practically impossible.