February 25, 2024

Rhapsody Cuts Staff as New Investor Arrives

Rhapsody, a digital music service that pioneered the subscription model now dominated by Spotify, has laid off its president, Jon Irwin, along with 15 percent of its staff, as the service struggles to remain competitive in a crowded market.

Rhapsody International, the service’s parent company, announced the changes on Monday in connection with the arrival of a new investor, Columbus Nova Technology Partners, which has become a significant shareholder in Rhapsody in exchange for an undisclosed investment. Two of the firm’s principals, Jason Epstein and Andrew Intrater, have joined Rhapsody’s board.

The news of the layoffs was first reported by The Verge, a technology news Web site.

Introduced in 2001, Rhapsody was one of the first services to sell monthly subscriptions for access to huge libraries of music for streaming online. But with the arrival and rapid growth of Spotify — which has a paid tier as well as a free version supported by advertising — Rhapsody has fallen behind. The company says it has more than one million subscribers, although it has not announced specific numbers since it bought Napster, a competing service, in late 2011.

The layoffs will affect only staff in the United States, and about 200 employees will remain with the company worldwide, a spokeswoman said. Mr. Irwin will continue as an adviser. In its announcement, Rhapsody said it wanted to “accelerate its efforts in Europe and emerging markets.”

“Rhapsody International is poised for tremendous growth,” Mr. Epstein said in a statement. “We’ve recently launched the Napster music streaming service in 15 additional countries in Europe, rolled out a partnership with MTV in conjunction with German wireless carrier ePlus and have a strong pipeline of product innovations and global partnerships in place.”

Rhapsody is privately owned, but some of its finances are disclosed through the public reporting of Real Networks, which owns 45 percent of the service. In its most recent accounting, Real Networks said that Rhapsody had a total of $68.6 million in revenue for the first half of 2013, down 6 percent from the same period the year before; its net loss also grew to $9.2 million, from $5.6 million in 2012.

By contrast, Spotify has 24 million active users around the world, 6 million of whom pay, and it reported about $578 million in revenue last year. But net losses are common at even the most successful digital music services. Spotify, which says it is focused on growth rather than profitability, lost $78 million last year.

Article source: http://www.nytimes.com/2013/09/17/business/media/rhapsody-cuts-staff-as-new-investor-arrives.html?partner=rss&emc=rss

The Comedy Lineup Expands on Netflix

“They always mention that they watched it on Netflix,” said Mr. Ansari, the 30-year-old comedian best known as a creator of the MTV sketch-comedy series “Human Giant” and a star of the NBC sitcom “Parks and Recreation.”

Until now, Netflix has given Mr. Ansari’s fans one more chance to hear his jokes, months or years after the telling. For his third stand-up special, Mr. Ansari is moving Netflix to the front of the line. His show “Buried Alive,” based on his tour of the same name, will make its Netflix debut on Nov. 1. It will be the biggest stand-up special distributed by Netflix to date, in much the same way that “House of Cards” was that streaming service’s first high-profile original drama.

There’s more comedy coming, the company says, as it opens another front of competition with HBO. In announcing the expansion into comedy specials and feature documentaries last month, the Netflix chief executive, Reed Hastings, said that the service had “become a big destination for fans of these much loved and often underdistributed genres.”

Mr. Ansari’s conversations with his fans bolster Mr. Hastings’s assertion. Netflix “seems like it’s the closest delivery service of media we have that actually matches up to our preferences and expectations,” he said in a telephone interview during a break from “Parks and Recreation” production. (Lately he has been binge-viewing the ABC drama “Scandal” through Netflix.)

Mr. Ansari said he was amused when a fan asked him on Twitter: “When are you going to put out another stand-up special on Netflix? I need more free stand-up.” Netflix, of course, costs $8 a month. “It’s so convenient, you don’t even think about the fact that you’re paying for it,” Mr. Ansari said.

Netflix’s forays into licensing the first-run rights to television shows, much as a TV network does, are predicated on the belief that people are more likely to keep paying if the service has exclusive programming. In June, the service presented a comedy special by John Hodgman, and last week it presented the premiere of one by Mike Birbiglia, who wrote positively on Twitter of Netflix’s international reach: “I signed a crazy contract that I think included other planets.”

Netflix has comedy specials by Marc Maron and Kathleen Madigan in the works. Mr. Ansari’s show is unlike those before it, a Netflix spokeswoman said, because the company intends to put a significant promotional campaign behind “Buried Alive,” billing it as original programming on par with “Arrested Development” or “Orange Is the New Black.”

“We’ve been working to make Netflix a great home for comedians to do their best work and to support their live performance careers, and having Aziz debut his new show with us is a validation of that strategy,” Ted Sarandos, the chief content officer for Netflix, said in an e-mail.

Mr. Ansari’s special was taped in Philadelphia in April. He said the material was “a lot more mature” than that in his previous specials, focusing on the differences between the friends his age who are getting married and having children, and himself, a commitment-phobic comedian. “All that stuff seems very far away for me,” he said. His first book, announced last week by the Penguin Press,  will tackle similar themes about single life, but with new material.

Mr. Ansari plans to release “Buried Alive” as a $5 download, but only after the Netflix premiere. The straight-to-fans strategy, pioneered by Louis C. K. in 2011, was successful for Mr. Ansari last year, he said, but its downside was obvious: “You’re kind of preaching to the choir.”

He added, as modestly as possible, “I have a pretty big choir.” But with the new special, he said, “my goal is to get people that don’t know my stuff already, and maybe expand my audience.”

That’s where Netflix comes in. The service has more than 30 million subscribers in the United States, and its algorithms for recommending shows keep improving. Mr. Ansari said that when he was at home using Netflix, his own shows are recommended to him all the time.

Unlike, say, passive viewers of Comedy Central, though, Netflix watchers requires at least a bit of action, which is a potential drawback for some. On Sunday Mr. Birbiglia told his Twitter followers that “apparently the only way to find” his Netflix special “is if you type in my last name.”

Mr. Ansari’s “Buried Alive” was filmed and edited before Netflix entered the picture. He said he bumped into Mr. Sarandos at an event in New York, and he commented on the popularity of Mr. Ansari’s past specials. That conversation led to the distribution deal. (Neither side would comment on the financial terms.)

“It’s an interesting time for someone to be releasing content,” Mr. Ansari said. “No one’s quite figured out things. You can do all types of things. At this moment, it really seems like Netflix is the way to go.”

Article source: http://www.nytimes.com/2013/08/29/business/media/the-comedy-lineup-expands-on-netflix.html?partner=rss&emc=rss

Media Decoder Blog: Indian Music Service, Taking Page From Spotify, Goes Pro

Western music fans have no shortage of digital music services to choose from, and that abundance is spreading around the world. Apple’s iTunes is now in 119 countries, and others are racing to plant their digital flags everywhere. This week, for example, Spotify opened in Italy, Poland and Portugal, bringing its reach to 23 countries.

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But just as interesting, and in the long run perhaps as significant to competition, is the rise of services that serve regional markets intensely. One is Saavn, a Spotify-like streaming service that specializes in Indian music, and has garnered 10.5 million monthly users with advertising-supported free listening. This week it will announce that it has taken another page from Spotify’s book, by offering a premium version at $4 a month that eliminates the ads, lets users listen to songs offline and will eventually add other features like higher quality audio.

Saavn, which has offices in New York, India and Mountain View, Calif., has a catalog of 1.1 million songs in nine languages and is available in more than 200 countries, with about 70 percent of its consumption within India, said Rishi Malhotra, one of its founders. Like Spotify, iHeartRadio and other Western services, it is an official partner of Facebook. About 80 percent of its use is on mobile devices, Mr. Malhotra said, and when the premium service, Saavn Pro, is opened in March, it will at first be available only for Apple devices.

The pricing is significantly lower than Western services. “We wanted to make it globally acceptable,” said Mr. Malhotra, who is based in New York. “The $10 price point that you see from a lot of music services we use here is way out of reach from what would fly in India or a lot of other emerging markets.”

Saavn believes it can succeed in India not only through its catalog of Bollywood hits, but through technological touches that may be meaningful only to Indian listeners. One example is the ability to search for a Bollywood song based on the actor who lip-synchs it — often more memorable to fans than the “playback” singer who actually provided the voice.

If successful, Saavn Pro could give the company an advantage in India’s quickly developing digital music market, which already has a handful of streaming services, like Dhingana, as well as a strong presence in downloads from Nokia. Yet that market is still tiny for a country of India’s size and overall media spending. According to the International Federation of the Phonographic Industry, recorded music had only $141 million in trade (or wholesale) value in 2011. A recent report by Ernst Young said that music and radio combined count for only 2.4 percent of India’s media and entertainment spending, which for 2011 it estimated at $18 billion.

Part of the reason for music’s small proportion of India’s media economy is that popular music in India is dominated by the film industry. But a greater reason is piracy; the federation estimates that 55 percent of Internet users in India go to unlicensed music services on a monthly basis. That is slowly starting to change, music executives say, as courts there crack down on infringement and legitimate digital services proliferate. Apple’s iTunes opened there in December, and Nokia says it sells 1.4 million songs a day at its download store in India.

And Indian record companies are approaching digital business without the baggage that has been complicating deals with Western labels and services for more than a decade, Mr. Malhotra added.

“The labels in India are not reluctant about digital,” he said. “It’s not like they are protecting against some established, older revenue stream. It’s all found revenue for them.”

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/13/indian-music-service-taking-page-from-spotify-goes-pro/?partner=rss&emc=rss

Media Decoder Blog: Netflix Teams With DreamWorks Animation to Create Cartoon Series

LOS ANGELES — Continuing a campaign to deepen its appeal to children, Netflix on Tuesday announced a partnership with DreamWorks Animation to create an original cartoon series.

The show, expected to make its debut on the streaming service in December, will be based on DreamWorks Animation’s coming movie “Turbo,” about a snail who gains the power of superspeed. The Netflix spinoff will be called “Turbo: F.A.S.T.,” which stands for Fast Action Stunt Team.

Netflix is gambling that “Turbo” will be a hit when it arrives in theaters on July 19. Although DreamWorks Animation has high hopes for that movie, it’s still anyone’s guess how audiences will respond; the company’s last film, “Rise of the Guardians,” was a box-office disappointment.

Ted Sarandos, Netflix’s chief content officer, said in a statement that DreamWorks Animation had “a long track record of creating incredibly successful characters.” DreamWorks Animation’s chief executive, Jeffrey Katzenberg, never shy about making a hard sell, called the partnership “part of the television revolution.”

A rival streaming service, Amazon’s Prime Instant Video, is racing to prepare its own original series, and has five children’s shows in development.

Netflix, which recently introduced the original series “House of Cards” to strong reviews from critics, has been working over the last several years to enhance its offerings for children. In 2011, it acquired the streaming rights to DreamWorks Animation’s movies and television specials. New films from Disney, Pixar and Marvel will move from Starz to Netflix in late 2016, following a deal the streaming company made with the Walt Disney Company in December.

Netflix said its members streamed more than two billion hours of children’s content in 2012, taking care to note that it is “always commercial free.” Netflix is also trying to enhance its appeal with multiple audience niches. A new horror series called “Hemlock Grove” is on the way, for instance. “Orange is the New Black,” an original comedic drama from the “Weeds” creator Jenji Kohan, is aimed at women.

Children’s programming is particularly important to the company’s growth plans. Children are avid streaming consumers, particularly overseas, and Netflix can pitch itself to parents as a commercial-free alternative to television. Cartoons are also less likely to appear on the pirated-content sites that compete with Netflix for viewers.

For DreamWorks Animation, the agreement is part of an effort to diversify into television both as a way to grow and to avoid the sharp ups and downs of the movie business. The company’s shares rose 2.91 percent on Tuesday, to $16.63.

The company has two shows on Nickelodeon that are spinoffs of its “Madagascar” and “Kung Fu Panda” films; a third series built around “Monsters vs. Aliens” is in the works. DreamWorks Animation also has a series built around the film “How to Train Your Dragon” on the Cartoon Network, as well as a growing number of holiday-themed television specials.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/12/netflix-joins-with-dreamworks-animation-to-create-series-for-children/?partner=rss&emc=rss

Media Decoder Blog: HBO Will Offer Channel by Internet in Northern Europe

The pay television service HBO is about to make a lot of Internet users in Denmark, Finland, Norway and Sweden very happy.

HBO announced last week that it had formed a joint venture for HBO Nordic, bringing shows like “Game of Thrones” and “Sex and the City” to the four countries. Starting next month, HBO Nordic will do something that HBO has yet to do in other countries: let people subscribe to its channel via the Internet, bypassing traditional cable and satellite distributors.

“Our target group is younger and more urban than the existing premium pay TV subscribers and they consume TV on multiple screens, particularly on computers, smartphones and tablets,” Hervé Payan, the chief executive of the joint venture, said in a statement.

A similar subset of consumers in the United States has been craving a version of HBO via the Internet. The company has been resistant, because an Internet subscription option could upset its much more lucrative relationships with traditional distributors.

For now it streams a catalog of shows via the Internet to people who have subscribed the traditional way. But the European expansion hints at another way, one that some analysts say is inevitable for companies like HBO as consumers exercise more choice over their media diets.

HBO Nordic also demonstrates that HBO, a unit of Time Warner, and Netflix are increasingly competing head-to-head for subscribers. Netflix plans to start selling its online television and film service in the same four countries by the end of the year.

The Netflix chief executive Reed Hastings, who previously identified HBO as his company’s main rival, wrote on Facebook last Thursday, “Excited to see HBO join us in offering stand-alone streaming service in Scandinavia … what about the USA?”

He added, “We thought the first matchup would be in Albania.”

The Time Warner chief executive Jeffrey L. Bewkes took a shot at Netflix in a 2010 interview: “It’s a little bit like, is the Albanian Army going to take over the world? I don’t think so.”

HBO declined to respond to Mr. Hastings’ comment last week, though a spokesman said by e-mail, “I must admit it was funny.”

Article source: http://mediadecoder.blogs.nytimes.com/2012/09/02/hbo-will-offer-channel-by-internet-in-northern-europe/?partner=rss&emc=rss

Netflix Sees Angry Clients Cutting Profit

Just two weeks after announcing a price adjustment that angered many customers, Netflix came out Monday with a weaker-than-anticipated earnings outlook.

While the entertainment distributor reported a 52 percent rise in second-quarter revenue, it also reaffirmed a temporary slowdown in subscriber growth and said that its third-quarter revenue would be hampered by reactions to the price change. Netflix stock, which peaked above $300 earlier this month, dropped 10 percent in after-hours trading Monday, after closing at $281.53 earlier in the day.

Netflix posted second-quarter revenue of $789 million, up 52 percent from the same quarter last year. It said its profit for the quarter was $68 million, up 55 percent.

For the third quarter, Netflix said it expected revenue to be $799.5 million to $828.5 million, which was lower than previous projections on Wall Street.

The price adjustment, announced July 12, takes Netflix’s DVD-by-mail service, which was a $2 add-on to its $8-a-month online streaming service, and makes it a separate $8 package. For Netflix, the online streaming service, which remains $8, is growing much faster than DVD-by-mail. But some customers were outraged by what was effectively a 60 percent price increase for the combined service.

The price change “doesn’t take effect until the very end of the third quarter,” the Netflix chief executive, Reed Hastings, said in an interview Monday. “So we have to face those subscribers who are upset by the increase this quarter.” While he said he expected only “a few” to cancel or downgrade service, “that means less revenue than we otherwise would have had.”

The price change will benefit Netflix in the fourth quarter and beyond, he said, expressing no misgivings about the change in strategy. He said that Netflix intended to spend the increased revenue on its online streaming service, keeping its domestic operating margin for the year around its target of 14 percent. In the second quarter, its domestic margin was 16.3 percent.

“As our subscriber base continues to grow, we’re able to spend more on improving that service, both on the R. D. side and on the content availability side,” Mr. Hastings said, using shorthand for research and development.

Keeping online streaming customers satisfied is a critical task for Netflix, which is vulnerable to the licensing decisions of Hollywood studios. Netflix has indicated that it is confident that it can pay what is necessary to license enough content from studios.

Mr. Hastings declined to comment on a Bloomberg News report that it was in talks to license the exclusive streaming rights to DreamWorks Animation films, replacing DreamWorks’ pact with HBO. An executive with knowledge of the deal, who spoke on condition of anonymity because no announcement had been made, said that HBO had offered DreamWorks an early departure from its contract with the premium cable company.

Netflix said that it remained in talks with its single biggest supplier of films, Starz. That agreement comes up for renewal in the first quarter of 2012.

Article source: http://feeds.nytimes.com/click.phdo?i=79c8897bf3c3a095b024b765f9898327