CDs Purchases Down, Video Games Help Sales

Sales of physical CDs continued to decline in the third quarter while digital download sales saw a small uptick, according to data from NPD Group. Artists who participated in music-based video games, meanwhile, also saw a bump in album sales.
The number of CDs sold during the third quarter dropped 19 percent from the same period last year, leading to a 2 percent decline in overall music sales.
About 34 percent of teenagers abandoned CDs, while 36 percent of buyers aged 26 to 35 did the same. CD sales only saw about a 10 percent decline among those 36 and older.
Digital downloads from online stores like iTunes and AmazonMP3, however, were up about 2 percent from last year, while legal music download volumes increased 29 percent during the quarter. About 15 percent of Internet users get their music from online music stores, NPD said.
"Alternative distribution deals in mobile and social networking are important ways for the music industry to fill the gap left by the decline in traditional revenue streams," said Russ Crupnick, NPD's entertainment industry analyst.
The popularity of music-based video games like Guitar Hero and Rock Band helped increase album sales for the artists featured in the games. About 22 percent of overall music buyers and 35 percent of those who are younger than 35 said they play these games and were inspired to purchase the music after playing.
"Year-to-date through November, the music and dance genre was the best- selling genre in video games, representing 16 percent of total software sales for the year," NPD video games analyst Anita Frazier said in a statement.
"Even though gaming competes with music for the consumer's entertainment wallet share, music-related games are evolving into an important source for music discovery that can have positive revenue implications for the recording industry," Crupnick said.
PC Mag Dec 08

Mobile video slow

"This year, for the first time, consumers will buy more video-enabled smartphones than TVs.
According to forecaster Research and Markets, sales of such devices will tip 300 million in 2008, which trounces the expected sales of tellies.And since there’s been a global financial meltdown since then (which should affect sales of plasmas far more than handsets) the difference could be even more marked.So will families be gathering around their LG Secrets to watch American Idol? No, of course they won’t. Don’t be stupid. But the point is that they could if they wanted. Why? Because handsets are big, screens are bright and, most important of all, data tariffs that make such high bandwidth activity tenable are breaking out all over the place. It’s these underlying factors that make the market watchers so excited about the future of mobile video.To pluck one of many forecasts out of the air, MultiMedia Intelligence says revenue from the sector will soar from $3.5 billion in 2008 to $15 billion by 2012.Every week seems to bring with it a dramatic new service launch. In the last few months, for example, Paramount and Motorola launched a service offering users access to full streamed or downloaded movies.At around the same time France-based Actimagine gave broadcasters and second tier operators an easy route to the mobile video market with Mobiclip, a storefront that lets users stream or download DVD-quality video via sideload, wi-fi or 3G. Weeks later Nokia confirmed that its flagship N96 would not only link to a made-for-purpose mobile TV channel, but also run BBC’s iPlayer video replay app.The latter is fascinating. BBC iPlayer has been wildly successful on the wired web, with more than 20 million programmes watched through the service in August alone. This has put huge pressure on broadband networks and caused some tension between the Beeb and ISPs.What kind of aggro could a mobile iPlayer be storing up? Jeremy Flynn, a former Vodafone exec now heading up the video-calling specialist D2See, has a view. He believes the limits on data allowances will ensure that the billshock issue doesn’t go away – and that this will inhibit the market.He says: “The fundamental hindrance to growth surrounds the actual and perceived cost of data. Most data plans allow at least 200Mb of data per month, and that’s about three hours of IP streamed data. That’s okay for video usage, but the cost of exceeding the bundle can be very high. On Vodafone UK’s prepaid tariff, you get charged £1 for up to 15Mb in a day, but the run-on rate is £2/Mb. So while watching 15 minutes of video would cost £1 in data charges, watching 30 minutes would cost £31 in data charges. Then there are contractual issues – T-Mobile reserves the right to block off-portal video streaming, and on Orange contracts it’s specifically excluded from the plan.”These issues are clearly still holding the market back. Matthew Feldman, CEO of Versaly, which runs the video aggregator Vmbc.tv, says: “Although I see the number of mobile video services and destinations increasing, our average number of views per service has been flat. As with any content, its all about marketing and promotion. Many video services have too much content and less than optimal navigation. Thus, only the featured or top video programming get all the views. We don’t see a big different between branded and unbranded, provided they are featured/promoted equally.”Most insiders would agree with Feldman. In the UK, Saffron Digital, which runs video on demand services for T-Mobile and Vodafone and is powering the Motorola/Paramount store, is witnessing steady growth – into the tens of thousands on the most popular clips. But it too recognises the need for promotion.CEO Shashi Fernando says: “I look at the made-for-mobile content available and I think some of it is genuinely fantastic. But it’s never been properly marketed to consumers. I still believe that the biggest demographic among mobile video watchers is people in the industry. They’re the ones watching. Still, by spreading the word this group can reach millions.”Fernando is not alone in believing that the Apple iPhone/App Store is transforming the mindset of everyone that uses it – and focusing the minds of everyone else. He adds: “Motorola, for example, is being brave and wise to take on Apple with its own store. It had to put a marker in the sand.”Damian Mulcock, CEO of video services specialist Mobix, agrees that Apple is raising the game. “The iPhone has gone a long way towards creating greater awareness amongst consumers of mobile media services. The industry needs to learn from this and make propositions that focus on value and not jargon,” he says. Still, not everyone is of the opinion that video is just for the future. At MTV, the current numbers are truly impressive, with the broadcaster reporting nine million streams in the US in August, up from five million in January.Greg Clayman, EVP of digital distribution and business development at MTV Networks, has no doubt that the simplicity of the operator offer is what lies behind this success.He says: “We don’t really have pay-per-download over here. You sign up for a simple subscription for VOD clips (as well as other mobile services) and pay one price for all you can view. That’s what VCast on Verizon and CV on AT&T are. And it’s working wonders for adoption.”MTV’s success has been achieved on the back of paid-for clips (albeit within a subscription) but the company is now set to explore ad-funded video too, with the US Air Force already signed up to provide pre-roll ads on made-for-mobile series The How To Show.Many believe this model will provide the bulk of video revenues to the business in years to come, even though there are still doubts about the level of demographic targeting possible and the quality of metrics returned to advertisers. These factors seem to have done for provider Rhythm New Media in the UK despite high profile deals with 3.Still, others are tackling the issue head on. Users who subscribe to services delivered by Velti's enhanced Mobile Marketing Platform (MMP) are asked to provide personal data the first time they sign up. This information, combined with carrier and network characteristics provided by Vantrix, is used to target consumers with more relevant material. Of course, there’s more to video on mobile than the downloading/ streaming of short clips. Take video ringtones, for example. The ringtone remains the foundation of the entire mobile content biz, so its video successor represents an intriguing proposition. Israeli firm Vringo is trying to make it work, but developing the concept around user generated rather than commercial content.Andrew Perlman, Vringo’s SVP of content and community, says: “The ringtone is still the most consumed form of mobile content… and now sophisticated users are using their own clips and inserting them as ringtones.” ME Nov 08

Games 'to outsell' music, video

UK sales of games will outstrip music and video for the first time in 2008, says a report from Verdict Research. A huge shift in consumer attitudes has turned video games into the UK's most popular form of entertainment, say the retail analysts. It predicts spending on games software and hardware will rise by 42% to £4.64bn in 2008, with sales on music and video at £4.46bn. In the last five years the video games market has more than doubled in value, while music sales have stagnated. The good news for game makers in the report was balanced by grim tidings for high street retailers. "The music and video market is not just suffering from a slowing of growth but a massive transfer of spend to online," says Malcolm Pinkerton of Verdict Research. It is online sales of CDs and DVDs that have grown rapidly, rather than digital downloads, which still only account for around 4% of music and video sales. In contrast, video games spending has enjoyed explosive growth, with the launch of major new titles such as Grand Theft Auto IV and FIFA 08, and the Nintendo Wii continuing to broaden the appeal of games. High street music retailers are diversifying as sales of CDs continue to fall. Pinkerton says firms such as HMV and Zavvi are changing store layouts: "They're cutting back on space in music and re-allocating it to more lucrative areas such as MP3 players, books, clothing and video games." BBC Nov 08

Videogames reduce childhood obesity

One of the evils that's been blamed for contributing toward obesity in children - video games - is now being used to promote physical activity. It's called exergaming, video games that spur children (as well as their parents) to use all their limbs rather than only their thumbs. "When we talk about obesity, we often talk about the fast-food industry," said Laurette Dube, organizer of the 2008 McGill Health Challenge Think Tank. "But that's only one side of the equation - the energy-in side. We also have to look at the energy-out side, and that's why it's very important to look at ways in which we can reduce kids' inactive time and increase their share of time that gets them moving." Linda Carson, a professor of physical education West Virginia University, acknowledged that exergaming, popularized by such games as Dance Dance Revolution and Nintendo's Wii Sports, is controversial. "There are some folks who feel that by promoting physical activity through the use of video games, children are being socially isolated or not encouraged to go outside and play," Carson said. "There are some opponents who say that it takes away from traditional physical education exercise." But Carson argued that exergaming is a "wholesome" activity that is free of the violence that plagues so many of today's video games. With the Wii console, for example, children can simulate snowboarding and many other sports in a safe manner. Carson and her colleagues have just completed a study showing that obese and overweight children who play exergames don't gain weight and improve their physiological function. In her study, Carson created two groups of overweight children. The first group spent 12 weeks with a variety of exergames. The second group continued with their regular routine. After the 12 weeks were up, the researchers discovered that the children in the second group gained weight. But the children in the exergaming group maintained their weight, while improving their aerobic ability and endothelial capacity (how well the arteries respond to blood flow.) What's more, some children in the exergaming group expressed for the first time an interest and confidence in trying out for some outdoor sports, Carson said. "I think exergaming needs to be recognized as an exciting alternative to traditional physical education," she added. "There is a lot of value to children having physical activity options in their home and even at school." © Montreal Gazette November 2008

Study shoes videogaamers have richer, better lives

So often seen as the exclusive haunt of hormonal and reclusive teenagers, videogames could well be seen in a whole new light after new studies revealed that games players have great family interaction, enjoy better social lives, and even make more money than those who avoid the popular pastime.
The findings of the studies, one emanating from Canada and one from America, fly in the face of typical stereotypes portraying gamers as overweight teenage couch potatoes leading a largely sedentary lifestyle while wholly devoted to their console of choice.
Some of the statistics unearthed by the Entertainment Software Association of Canada study suggest that one in two Canadians is a gamer and has actively played a software title within the last month, while half of the country’s game-playing demographic is female, over 80 percent indulge in a world of videogames for around 7.1 hours per week, and the average age of a Canadian gamer is actually 40.
“Family gaming is becoming a big part of Canadian families’ pastime. Mom, dad and the kids are all playing together,” enthused Nicole Helsburg, spokeswoman for the Entertainment Software Association of Canada. “Those who grew up playing games have taken that into their adult lives and are now embracing that as a way to spend time with their kids.”
Similarly, an American study conducted by Ipsos MediaCT on behalf of leading videogame Web site IGN concluded that some 55 percent of those polled were married, while 48 percent had children, and 57 percent of parents played videogames on a regular basis with the children, reports the Ottawa Citizen.
And, when separated from the game pad and/or keyboard, the American study found that young and single gamers are considerably more socially active than those who do not game. Specifically, unattached gamers players are twice as likely to be dating, are almost 10 percent more likely to be spending time with their friends, and 11 percent more inclined to partake in sporting activities.
Perhaps surprisingly given gaming preconceptions, the American study discovered that regular videogames players also matched those who do not game when it comes to the time per week they spend with their heads in a good book.
From a professional standpoint, the study also revealed that the average income of a U.S. household closely associated with videogame entertainment is around $79,000 USD, while households without videogame access make approximately $55,000 USD.
According to Adam Wright, director of research for Ipsos MediaCT, its study “underscores the fact that gaming has become a mainstream medium in this country that appeals to people from all walks of life.”
The Entertainment Software Association of Canada study was conducted across 652 Canadian adults and 100 children aged between six and 13. The two-stage IGN study covered both online and single-player respondents and was spread across more than 3,000 American citizens.

Mobile games market consolidation

"Analysis of the UK's ELSPA mobile games chart shows the increasing power of the Big Three publishers - EA Mobile, Gameloft and Glu - and the utter dominance of branded mobile games.The number of games charting in the ELSPA Top 10 hasn't changed much over the years: in 2005 45 games charted, compared to 44 in 2006 and 2007. However, pretty much everything else has.For example, in 2005, 42 per cent of the games that appeared in ELSPA's monthly Top 10 list were own-IP titles. In 2006, this plummeted to 11 per cent, and then 9% in 2007.Meanwhile, in 2005 eight publishers had more than three games appear in the chart: Iomo (7), Digital Bridges (6), Mforma (6), Gameloft (5), Sumea (5), Macrospace (4), iFone (3) and Jamdat (3).By 2007, the top three charting publishers were EA Mobile (12), Glu Mobile (9) and Gameloft (7). Those three publishers accounted for 63.6 per cent of the games that charted last year. All this, remember, is based on sales across all the UK's mobile operators.Is that a bad thing? Your view largely depends on how big a publisher you are (or working with). However, the brand to own-IP ratio is more troubling, since it indicates that the hit-driven mobile games industry isn't having many hits with its own IP.Although based purely on UK sales, our research is also a stark reminder of the problems facing mid-tier publishers when it comes to driving on-deck sales.In 2005, Mforma and Sumea had six and five charting titles respectively. In 2007, by now rebranded as Hands-On Mobile and Digital Chocolate, neither company had a single game appear in the ELSPA chart." Pocket Gamer

Jetix Europe & Wildbrain debut series online

"Jetix Europe will team up with Wildbrain on a new short-form series that will premiere on its website across Europe in early 2009. Wildbrain's Team Smitereen will be the first new short-form series that Jetix will debut in Europe as an exclusive premiere on its websites. Users across Europe will be able to access the new content with new eps being regularly updated on the Jetix sites in Germany, the UK, Spain, Italy, France, Netherlands, Sweden, Denmark, Norway, Hungary and Poland. The slapstick tween comedy was created by The Dan Clark Company and will debut exclusively on the new look Jetix websites beginning early 2009." Kidscreen October 2008

Real world bust means virtual world boom

"Worldwide, economies are slowing and consumers are worried sick about their future.
Despite all the doom and gloom, one tiny sector is offering a glimmer of hope: virtual worlds. Companies such as Gaia Interactive and Habbo are expecting a boost as consumers reduce spending on real-world goods and luxuries and console themselves with so-called virtual goods--digital copies of products that can cost just pennies, allowing users to indulge their materialistic fantasies without spending much.
"As the 'real world' gets worse, virtual worlds get better," Gaia Chief Executive Craig Sherman told Forbes.com in an e-mail. "As things get worse, people spend more time at movies or spend more time on a site like Gaia Online, which provides a relatively inexpensive respite from the offline world." Gaia, which targets U.S. teens and twenty-somethings, had more than 7 million unique visitors in September.
Teen-focused virtual world Habbo boasts a similar outlook. While there is some concern the down economy will reduce the site's ad sales, 85% of Habbo's revenue is derived from virtual goods transactions. The site's 2.5 million U.S. users spend an average of $18 a month, and the average time spent on the site has doubled to 40 minutes per session in the past year, says Executive Vice President Teemu Huuhtanen. He expects the number of unique users--currently 10 million globally--to grow as the site introduces new services and activities.
Kid-focused virtual worlds like Club Penguin and Neopets have boomed over the past two years, becoming an attractive investment niche for large media companies. These sites provide a way for kids to interact with a media property--say, Nickelodeon's legion of characters--in an environment that is cheaper on a per hour basis than seeing the latest flick in the theaters.
EVE Online, a science fiction-themed massively multiplayer game, is going gangbusters. The subscription-based virtual world has gone from 220,000 users to nearly a quarter of a million since the beginning of the year. EVE's on-staff economist Eyjo Gudmundsson expects the game's growth to continue over the next six months--particularly as people look for more inexpensive forms of entertainment. The basic EVE subscription cost is $14.95 per month.
Gudmundsson cautions, though, that virtual worlds that are directly linked to the real world may fall victim to some real-world economic frustrations.
Indeed, the number of registered and active users of Second Life, a virtual world that simulates real-world experiences, have flattened out, says Parks Associates analyst Michael Cai. But this might not be a reaction to the economy; it could be due to consumers shifting to other virtual worlds. Cai predicts that corporations will start using Second Life or custom 3D virtual worlds to hold meetings and cut travel costs." FORBES October 2008

Goochicoo boosts web presence

'Two new media experts have joined The Backland Studio to strengthen the web presence of its baby brand Goochicoo.Anna Farmery, one of the UK's top bloggers and new media experts, will consult on the web presence and search engine rankings for the brand's website, www.goochicoo.com.In addition, Matt Kenyon arrives from advertising agency Attik and is regarded as something of a web design guru among his peers."This is a major coup for Goochicoo, our internal new media strategy 'Have you clicked yet?' couldn't have got a better start than the recruitment of two top class social media experts," said Ged and Kaely Backland, owners of the Goochicoo brand. The ambitious target for the campaign is to ensure the Goochicoo community appears on the first page of search results when the word 'baby' is typed into a search engine. The company believes that this is attainable within one year.Rob Corney, MD of Bulldog Licensing which represents the brand, added: "Building a strong online presence will further boost the ever growing Goochicoo community. The Backland Studio has put together a world class team, which will produce world class results." ' Licensing.biz Sept 08

Ecommerce works

' HOLLY TUCKER and Sophie Cornish are struggling to cope with the rapid growth of Notonthehighstreet.com, the business they set up two years ago. Sales are up 350% on last year and are predicted to reach £3.5m this year.
Despite gloomy predictions for the economy, Tucker and Cornish don’t plan to stop there. They have just secured £1m from a private investor for further expansion.
The online boom is helping many other small retailers and suppliers to flourish in the downturn. Online shopping grew 38% year on year in the first six months of this year, says IMRG, a trade body for online retailers. This is in stark contrast to the trend of falling high-street sales, which declined 3.9% in June, according to the latest figures from the Office for National Statistics.
In fact there is evidence that as consumers are squeezed by the soaring cost of petrol, energy and food they are searching for the keenest prices, something that is easier to do on the web, according to Michael Petevinos of Cap Gemini, which tracks online retailing.
As internet shopping enters the mainstream it offers a powerful advantage for small, nimble players. “Setting up online gives you a much greater reach for your products and at much lower cost,” said Petevinos. “It has completely changed the proposition for many smaller retailers and suppliers.”
The future looks bright. Online spending now represents 17% of consumer spending, and web shopping is expected to account for 30%-50% in the next five years.
Smaller players with the right strategies are already benefiting, according to David Smith of IMRG.
“It is often the smaller retailers with niche products or with interesting retail propositions that seem to be having success. There will be a lot of opportunities for smaller players to profit if they can manage their start-up costs, get their supply chains right and work closely with their customers.”
Notonthehighstreet sources good-quality clothes, gifts and homewares from small producers who could never survive with their own retail outlets or by dealing with the big chains, said Tucker.
“We provide an opportunity for thousands of independent suppliers to sell their products,” she said. “Sites like ours are acting as a kind of shop window for the long tail of the internet.” ' Sunday Times, July 2008

UK Views Most Videos Online

"UK audiences are the largest consumers of online video, watching more than 3.1bn videos in April, according to data from measurement company ComScore. It found 27.4m UK users watched an average of 127.7 videos each, putting the UK ahead of the US, Canada, France and Germany. YouTube continues to dominate the space. Of all online video watched in April, 48.2% (1.53bn videos) were on YouTube." New Media Age, July 2008

Shhhheepz

'Launched at the 2006 Brand Licensing by Cathy Nolan, Shhhheepz is aimed at three to five year-olds and features three sheep named Lili, Blaine and Mouton which appear only in children’s dreams, helping them conquer their fears and accomplish their dreams while fending off nightmarish wolf Awoof.The mission of the property is simple; to enable children to use their own problem solving skills to handle difficult situations. Shhhheepz is available for licensing in the publishing, stationery, gift wrap and apparel categories.Earlier this month saw the launch of a new website (MAKE LINK LIVE), which enables pre-schoolers to test their memory, match shapes and learn words, created by Nolan and Stephanie Preston from Fireboar LLP. “The internet is a great way to build brand awareness and develop its audience base. Instead of board games, families are playing online games together more than ever,” says Nolan. “Online virtual play is now the new play pattern.” ' Licensing.biz, July 2008

Neopets founders launch new studio

"Neopets' co-founders Adam Powell and Donna Williams have set up a new games studio, Meteor Games, based in West Hollywood, California. The pair launched the studio following the success of Neopets, the virtual pets website, which they founded in 1999 and sold to MTV Networks in 2005 for USD 160 million. Powell will serve as Meteor Games chief executive officer and creative director, while Williams takes the role of chief operating officer and president. "Our experience developing the world and characters of Neopets provides us with a unique advantage as we create a more robust and in-depth experience with Meteor Games," said Powell. "Our goal is to create a game world that is immersive, technologically advanced and more accessible than the current slate of online games available today. We want gamers to play on their terms - when, where and how they want." Meteor Games' first project is an, as yet unnamed, MMO aimed at the younger market. "Massively multiplayer games, casual web-based games, and social networking are all areas of explosive growth and taken together, they are defining how the Internet Generation communicates with one another and are entertained," said Williams. "Meteor Games is creating an online world that will blend these emerging elements into a single persistent experience that gamers of all ages can enjoy." Gamesindustry.biz July 2008

UK 16-24 year olds research

"According to recent research from the British Market Research Bureau (BMRB), the average 16-24-year-old has a total of 146 friends on the social network they use most. In the same study, these 16-24-year-olds revealed that they texted an average of 34 people but met up with only 11 in the last month.Men have the higher number of friends on their most-used social network, with 161 on average, versus 129 for females. It's the 16-19-year-olds who have more social network friends: 184 versus 131 for 20-24-year-olds. Women are more likely to have spoken to more friends and family on their mobile in the past month, with 14 people on average, compared to only nine for men.The research revealed mobiles and text dominate when making social arrangements, used by 68% and 61% of 16-24-year-olds respectively. And over half stay in touch with friends through social networks and instant messaging - all factors that can influence marketing communications.But digital doesn't dominate all communication among this age group. Over 70% of 16-24-year-olds claim to meet face to face when splitting up with a partner, for instance. When complaining to a company, 58% do so by letter and 55% via their home phone.BMRB's latest TGI survey also highlights the complexity of the current media environment, where old media still rubs alongside newer forms of communication. 96% of 16-24-year-olds now have a mobile, and while 55% have email on their mobile phone, only 7% use this feature, indicating the gap between application provision and usage. Also, despite recent communication trends, 75% of 16-24-year-olds still went to a post office in the past 12 months.It's undeniable that the internet is now a crucial part of 16-24-year-olds' lives, as they spend an average of almost three hours of every weekday on the internet. According to TGI Net, 44% use it to look for job opportunities, 46% for making holiday plans and 53% for listening to music. A total of 57% of 16-24-year-olds have paid for something over the internet in the past six months, with 21% paying for DVDs, music or videos, 15% buying books and 9% paying for travel products.There are limits, though, as to what the youth of today are prepared to do online. Just 2% spend their time in a virtual world like Second Life. Additionally, it appears the young people are less willing to part with their money for certain forms of entertainment over the internet, with only 6% paying to play online games and 4% willing to pay to download a movie. Second-guessing the online activities of 16-24-year-olds can be very dangerous." NMA May 2008

Entertainment markets UK values

"Regulator PhonepayPlus puts the value of the UK mobile content market at £350 million for 2007.Official figures pin the UK box office at £904 million, DVD sales at £2.2 billion, West End Theatres at £470 million and the music industry at £1.8 billion. Games were the star performer, generating £1.5 billion (up a bumper 25 per cent)." ME May 2008

BBC Signs Multiplatform Property Kamira

"BBC Worldwide has secured a development deal with Star Farm Productions for an innovative new fantasy property.The deal for Kaimira encompasses investment in TV, MMOG and other media.Gill Pritchard (pictured), BBC Worldwide's director of children's, said: "Kaimira represents everything we want to be part of in our growth strategy in the children's business here at Worldwide. The development deal we have agreed with Star Farm allows us to collaborate in a 360-degree approach to the creative and business strategy of Kaimira, including the development of TV, web, gaming and feature film."Kaimira's launch will begin in the summer with Walker Books and Candlewick Press releasing Book One: The Sky Village in the UK, US, South Africa, New Zealand and Australia.Star Farm is planning to develop a website where fans will be able to decode mysteries highlighted in the book." Licensing.biz, April 2008

MySpace to put its shows on TV.

"Social networking site MySpace has signed a deal to put its shows on TV.
The deal means that MySpaceTV shows such as Quarterlife, Roommates and Special Delivery will soon air on screens outside the US. The deal was signed with the Shine Group which is run by Elizabeth Murdoch - daughter of Rupert Murdoch who owns MySpace parent News International. The deal covers DVDs and merchandise but MySpace retains all net rights to its programmes. "MySpace is essentially the world's largest focus group," said Travis Katz, head of MySpace's international arm, announcing the deal at the MipTV-Milia conference in Cannes.
"You can see what resonates with people and then take that content and blow it out worldwide," he added. Mr Katz said MySpace was developing local versions of its existing programmes plus original content in the 26 countries in which it operated and added that the company was discussing with hundreds of others about deals on its shows. The deal marks a fresh attempt by MySpace to find an audience for its programmes beyond the internet. US network NBC broadcast MySpace's "Quarterlife" in February but viewing figures suggest it ranked dead last among all shows aired in that time slot. Many media companies have tried, and failed, to use the web as a testing ground for new shows, Forrester Research analyst James McQuivey told the Reuters news agency. "It hasn't produced bankable shows outside of the internet, or even on the internet," he said. "If you look at it (Web shows), there's a good reason why -- it's mostly bad."
The MySpaceTV deal comes only days after the social networking site announced a partnership with three record labels to create an online music store. MySpace Music will be launched in conjunction with Universal, Sony BMG and Warner." BBC April 2008

What Do Kids Want?

"For children raised on the Web browser, a new computer proved to be less of a hit than one parent expected
When offered a chance last fall to buy a computer engineered with a new kid-friendly design, I had visions of my children using its specialized software to do creative-writing projects, make short animations and learn basics of music composition.
Three months later, a different reality has emerged: My kids have barely touched the software designed for creative expression. They prefer our five-year-old PC because it's easier to play simple games and watch videos on the Web.
WSJ's Kevin Delaney bought the XO laptop for his kids, but he's found they prefer the family's PC. His son Jack discusses what he likes to do with computers.
The experience has reminded me of the hazards of projecting expectations for your children's happiness or development onto any prospective purchase. But even more, it has made me realize that the Web is a defining media experience of my kids' childhoods in the way that TV and videogames were for me. Any technology aimed at kids needs to be able to deliver the richest experiences available on the Web or face an uphill battle in winning the attention of this browser generation." WSJ Mar 08

The $47bn mobile content market?

"Mass 3G adoption will drive mobile entertainment revenues to $47.5 billion by 2010, says Juniper Research. Its report claims China and the Far East region currently provide the largest market for content services and contribute around 41 per cent of global revenues. Despite rapid growth in developing markets, the Asia Pacific region will retain its leadership through to 2012, when it will still contribute 33 per cent of sales. However, Juniper cautions that entertainment service adoption will stumble unless improvements are made in User Interface, network coverage, data charges and regulation of gambling, adult content and some social networking services." Mobile Entertainment, Mar 08

YoYoGames hits 100,000 user landmark

"Casual development community experiences huge growth
The YoYoGames.com development community has attracted its 100,000th visitor within ten months.The site gives away a free Lite version of the popular Game Maker software and gives a space for users to share their creations with the community at large. CEO Sandy Duncan, ex Microsoft X Box says the 'best way to describe it is as the YouTube of games.' " Develop, March 08

Channel 4 to fund multiplatform kids TV

"UK's voice of the independent production community PACT is welcoming the decision by Channel 4 to begin commissioning for children's TV as part of its "Next on 4" strategic initiative.
C4's plan to increase its spend on multiplatform kids projects follows the successful re-distribution of its education budget to online. A substantial part of the new US$61 million budget is expected to be allocated to online fare. PACT is also lauding C4's announced intention to up its support of indies outside of London by 50% by 2012." Kidscreen, March 08

US: Online winning over TV for kids

"New study finds that the internet is encroaching more and more into children's TV viewing habits. According to a study by research firm Grunwald Associates, TV is no longer capturing the undivided attention of kids in the US. The Kids' Social Networking Study found that internet activity is becoming a growing factor in what children choose to watch and 64 per cent of kids go online while watching TV. Nearly half of teens (49 per cent) said that they go online frequently while watching TV. In addition, 47 per cent said they focus their attention primarily online while multi-tasking between TV and the internet, and 42 per cent said they focus on TV and online activities equally. Just 11 per cent said that TV held their primary attention while multi-tasking."Active multi-tasking and social networking present a tremendous opportunity to inform, engage and empower kids more deeply than ever before," said Grunwald Associates founder Peter Grunwald. "At the same time, it's important for commercial efforts to be credible and respect kids' intelligence - and the content they product. Kids are using social networking tools to create personal content and share their opinions with great speed, passion and influence." The study is made up of three parallel surveys conducted in the US: and online survey of 1,277 nine to 17 year-olds, an online survey of 1,039 parents and telephone interviews with 250 district leaders who make decisions on internet policy." Kidscreen Mar 08

Disney CEO Iger Champions Digital Media

"PROCLAIMING THE WEB "JUST AS important as TV" for kids, Disney CEO Robert Iger urged fellow executives on Wednesday to join the digital revolution--or hire people who can. "Hire new people," Iger declared to nervous laughter during a morning keynote at the McGraw-Hill Media Summit in New York. Reiterating Disney's aim to grow digital revenue from $750 million to $1 billion this year, Iger outlined several areas where the company is investing online. In the area of social networks, Disney is readying the launch of a "Cars"-related virtual world dubbed "Radiator Springs." Another virtual world, "Pixie Hollow," is in the works for Disney's "Fairies" franchise. (Disney recently established a new group, Disney Online Studios, dedicated to the creation of virtual worlds, games and branded communities online.) Eying global expansion, Disney is tailoring a slew of new and existing content for consumers in foreign markets from Paris to Shanghai, Iger said. Iger also impelled media companies and marketers to shed their protectionist stances on new and emerging technologies. "Most classic brand managers look at technology with a deep-rooted aversion," Iger said. "Technology is good," he said, explaining how it allows brands to distribute more broadly, and to be more relevant in the marketplace. "You have to keep the consumer in mind and use technology to do that." Beyond corporate strategy, Iger took time on Wednesday to regale the audience of new- and old-media types with his personal adventures in online media. He admitted to having a Facebook page, but only two friends in the hot social network. "It's important for executives to experience all of this," Iger said, referring to the myriad new platforms available to media companies, marketers, and consumers, from video-sharing sites and mobile services to social networks and virtual worlds.
Perhaps showing bias, Iger said his presence was more established within Club Penguin, the virtual world for kids that Disney acquired last August. "I've got some pretty cool stuff in my igloo"--which, he said, boasts a flat-screen TV, a fireplace, and a basketball hoop. "I've never been to an igloo with a basketball hoop, which is pretty great." Noted Iger, since Disney entered into a distribution deal with Apple's iTunes a year and a half ago, the company has sold between 40 million and 50 million TV episodes, and some 4 million Disney movies. Disney's digital revenue comes from ads sold alongside content streamed on ABC.com, and syndicated on sites like AOL.com; ads sold on other Disney Web properties like ESPN; subscriptions to ad-free sites like Club Penguin and various online games; downloads of movies and music; and e-commerce not related to Disney theme parks." Online Media Daily, March 08

Endemol USA appoints casual games director

'Web games based on Deal or No Deal and 1 vs 100 in development
The US division of Endemol - creator of the likes of Big Brotherand and Deal or No Deal - is targetting casual games development.The firm has opened a division to produce web games based on the US versions of Deal or No Deal and 1 vs 100.Eric LaVanchy, previously founder and vice president of creative development for New York-based Bottle Rocket, has been named as director of gaming for Endemol USA.LaVancy will be looking after the games strategy as part of Endemol's Digital Media division and will develop casual games for new and existing Endemol programming, and also create original games. Although focusing only on the North America market, where he will be appointing a core group of technical, creative and business development staff, he will also work closely with Endemol's London-based games group."Our view is that TV and videogames are coming closer and closer together, and the casual games group will be right in that sweet spot," digital media and branded entertainment Jon Vlassopulos told Variety.In the official announcement Valssopulos added: "With the formation of a casual games group, we have an opportunity to expand our digital media business into a new and exciting growth area where we will create engaging entertainment experiences for fans worldwide." ' Develop Feb 08

Kabillion and uWink

"Taffy Entertainment's Kabillion, the multi-platform kids' entertainment service, has launched a new cross-promotion with uWink - a new interactive restaurant that allows customers to order food, drinks, games and other digital media through proprietary touch screen terminals.
Under the new agreement, uWink will offer new Kabillion-branded video games for kids, in addition to kids' meals featuring characters from Kabillion series, as well as toys and plush from Taffy. The new promotion kicks off at uWink's first outlet, located in Woodland Hills, California and will be integrated into two new uWinks slated to open this spring in Hollywood and Mountain View, California." Kidscreen Feb 08 www.uwink.com http://www.youtube.com/watch?v=ufSy00U8LS0

More people playing mobile games than ever before

'...but the percentage of people downloading games has not increased over the past year, says M:Metrics. Three quarters of the 98.4 million people in France, Germany, Italy, Spain, the UK and the US that played a mobile game in December played a game that was found natively on the device.Meanwhile, M:Metrics says 38.5 million (8.8 per cent of mobile subscribers) played a game they had downloaded and stored on their phone, but that number has been relatively flat from the year before, when 35.3 million (8.7 per cent) played a downloaded game.Only 14.4 million (3.3 per cent) of mobile subscribers in the US and Western Europe downloaded a game in the month, compared to 14.6 million (3.6 per cent) in December 2006. At 12.7 per cent, Spain has the highest penetration of those playing a downloaded game, and the highest rate of mobile games downloads, at 5.6 per cent. France lags all other markets, at 3.5 per cent playing a downloaded game and 1.3 per cent downloading a new game in the month.Seamus McAteer, chief product architect and senior analyst at M:Metrics, said: "To succeed in such a market game publishers will have to foster new models that may include subscriptions to online gaming communities, ad-funded or subsidized gaming, and physical distribution." ' ME Feb 08

Afterworld multi platform show

'Sony Pictures Television International will kick off a new multi-platform strategy with content from Afterworld, which it has licensed from Stan Rogow Productions. The licence marks SPTI’s first acquisition of third party IP for exploitation across mobile, web and TV, and involves SPTI’s distribution, international networks and digital business divisions. The company has acquired 130 two-minute episodes of the futuristic Afterworld 2.5D animated series, which will also be made available as 13 half-hour episodes for broadcast.The series was created by Emmy Award nominated producer Stan Rogow (Lizzie McGuire, All I Want for Christmas) and multi-platform writer Brent Friedman (Command & Conquer: Tiberium Wars video game, Dark Skies, Mortal Kombat 2). Dedicated web content will be housed on Afterworld.tv, as will archived back episodes, daily journal entries, community blogs, interactive content applications and online games. Marie Jacobson, SVP of programming and production, international networks, SPTI said: “Afterworld is just the property SPTI is actively seeking out to propel our mobile and digital content efforts around the world. It’s fresh and relevant and exactly what our global partners expect from Sony. This is an excellent opportunity for SPTI to cross-stream content across our international mobile, digital and cable outlets and an ideal multi-platform offering for global and regional sponsors.” ' Mobile Entertainment February 2008

Senior TV exec says future is digital

"Fred Seibert, president of Channel Frederator, did not mince words when he described today's animation landscape during his headlining Q & A session at KidScreen Summit 2008. "It's dull as dishwater," he told Rita Street, president of Radar Cartoons, and the crowd in the Hilton's West Ballroom. Seibert, former president of Hanna-Barbera, and famously MTV's first employee, described what he believes to be a five-year lull in the animation industry after titles such as Fairly Odd Parents hit the small screen. The downswing, as Seibert sees it, is a perfect time to try something new, and that is exactly what he set out to do when he joined partners to form Next New Networks in late 2006, with the bold goal to create, brand and distribute 101 micro-niche television offerings. While Next New Networks is, as the name indicates, new, Seibert still looks to the past to find inspiration on how to launch a successful property. "The first Bugs Bunny wasn't a pilot," he said. "Pilots get loaded up with all the things that execs think you have to have. I just want to make a film that's good and works, and see if works again and again."
The short that he is most excited about now is Adventure Time, created by Aussie Pendelton Ward. The surrealistic short that aired as one of Seibert' produced Nickelodeon's Random! Cartoons last January and has since become a www.youtube.com/watch?v=LNVYWJOEy9AYouTube sensation. "I know that it will get picked up before the end of the year," he said. "I have nothing to base that on, but I just know it." Never one to shy away from risk, the man that helped make MTV the symbol of a generation is blazing his way through more uncharted territory. This time, it's digital and he readily admits there is no real business model yet. "I hope I won't be the pioneer with arrows in his back," he laughed." Kidscreen February 2008

Mobile games companies going from stength to strength

"The mobile games industry it seems is not the volatile climate of start-ups and shut-downs that it once was. More mobile games companies are staying in the black and keeping their doors open for business for longer than ever before. According to The Multimedia Research Consultancy's data, about 53 per cent of all mobile games companies have now been trading for at least five years, with almost 20 per cent laying claim to more than seven years' worth of successful business. Interestingly, despite the fact that the industry is in apparent good health, the number of new start-up mobile games companies is down drastically from 451 new entrants in 2003 to a mere 78 last year. Still, it is quality not quantity that counts and the fact that fewer studios are opening can be seen as a reflection that the standards are higher and the market more competitive." Pocket Gamer, February 2008

7 year old American girl using Webkinz, where virtual stuffed animals come to life.

Copyright Disney

Virtual worlds before TV

'Trying to duplicate the success of blockbuster Web sites like Club Penguin and Webkinz, children’s entertainment companies are greatly accelerating efforts to build virtual worlds for children. Media conglomerates in particular think these sites — part online role-playing game and part social scene — can deliver quick growth, help keep movie franchises alive and instill brand loyalty in a generation of new customers.
Second Life and other virtual worlds for grown-ups have enjoyed intense media attention in the last year but fallen far short of breathless expectations. The children’s versions are proving much more popular, to the dismay of some parents and child advocacy groups. Now the likes of the Walt Disney Company, which owns Club Penguin, are working at warp speed to pump out sister sites.
“Get ready for total inundation,” said Debra Aho Williamson, an analyst at the research firm eMarketer, who estimates that 20 million children will be members of a virtual world by 2011, up from 8.2 million today.
Worlds like Webkinz, where children care for stuffed animals that come to life, have become some of the Web’s fastest-growing businesses. More than six million unique visitors logged on to Webkinz in November, up 342 percent from November 2006, according to ComScore Media Metrix, a research firm.
Club Penguin, where members pay $5.95 a month to dress and groom penguin characters and play games with them, attracts seven times more traffic than Second Life. In one sign of the times, Electric Sheep, a software developer that helps companies market their brands in virtual worlds like Second Life and There.com, last week laid off 22 people, about a third of its staff.
By contrast, Disney last month introduced a “Pirates of the Caribbean” world aimed at children 10 and older, and it has worlds on the way for “Cars” and Tinker Bell, among others. Nickelodeon, already home to Neopets, is spending $100 million to develop a string of worlds. Coming soon from Warner Brothers Entertainment, part of Time Warner: a cluster of worlds based on its Looney Tunes, Hanna-Barbera and D. C. comics properties.
Add to the mix similar offerings from toy manufacturers like Lego and Mattel. Upstart technology companies, particularly from overseas, are also elbowing for market share. Mind Candy, a British company that last month introduced a world called Moshi Monsters, and Stardoll, a site from Sweden, sign up thousands of members in the United States each day.
“There is a massive opportunity here,” said Steve Wadsworth, president of the Walt Disney Internet Group, in an interview last week.
Behind the virtual world gravy train are fraying traditional business models. As growth engines like television syndication and movie DVD sales sputter or plateau — and the Internet disrupts entertainment distribution in general — Disney, Warner Brothers and Viacom see online games and social networking as a way to keep profits growing.
But more is at stake than cultivating new revenue streams. For nearly 50 years, since the start of Saturday morning cartoons, the television set has served as the front door to the children’s entertainment business. A child encounters Mickey Mouse on the Disney Channel or Buzz Lightyear on a DVD and before long seeks out related merchandise and yearns to visit Walt Disney World.
Now the proliferation of broadband Internet access is forcing players to rethink the ways they reach young people. “Kids are starting to go to the Internet first,” Mr. Wadsworth said.
Disney’s biggest online world is Club Penguin, which it bought in August from three Canadians in a deal worth $700 million. At the time, more than 700,000 members paid fees of $5.95 a month, delivering annual revenue of almost $50 million.
Still, one world, even a very successful one, does not alter the financial landscape at a $35.5 billion company like Disney. So Disney is pursuing a portfolio approach, investing $5 million to $10 million per world to develop a string of as many as 10 virtual properties, people familiar with Disney’s plans said.
Tinker Bell’s world, called Pixie Hollow, illustrates the company’s game plan. Disney is developing the site internally — creative executives who help design new theme park attractions are working on it — and will introduce it this summer to help build buzz for “Tinker Bell,” a big-budget feature film set for a fall 2008 release.
Visitors to a rudimentary version of Pixie Hollow, reachable through Disney.com, have already created four million fairy avatars, or online alter egos, according to Disney. The site will ultimately allow users to play games (“help create the seasons”) and interact with other “fairies.” When avatars move across the screen, they leave a sparkling trail of pixie dust, a carefully designed part of the experience.
“We wanted to come up with a way to make flying around the site feel really good,” said Paul Yanover, executive vice president and managing director of Disney Online.
Disney’s goal is to develop a network of worlds that appeal to various age groups, much like the company’s model. Preschool children might start with Pixie Hollow or Toon Town, another of Disney’s worlds, grow into Club Penguin and the one for “Cars” and graduate to “Pirates of the Caribbean” and beyond, perhaps to fantasy football at ESPN.com.
“All the stars are aligning for virtual worlds to become a mass-market form of entertainment, especially for kids and families,” Mr. Yanover said.
If virtual worlds for adults are about escaping from run-of-the-mill lives, sites for children tap into the desire to escape from the confines of reality as run by mom and dad. “I get to decide everything on Club Penguin,” said Nathaniel Wartzman, age 9, of Los Angeles, who also has a membership to a world called RuneScape.
But shopping is a powerful draw, too; most sites let children accumulate virtual points or spend their allowance money to buy digital loot. “It’s really fun to buy whatever you want inside the game,” Nathaniel said in a telephone interview. For his penguin, “like for Christmas I bought a fireplace, a flat-screen TV and a Christmas tree,” he said.
Online worlds, which typically have low overhead and fat profit margins once they are up and running, charge a monthly fee of $5 to $15 and require the adoption of an avatar. Some sites are free and rely on advertising to make money; others are advertising and subscription hybrids. Webkinz relies on the sale of stuffed animals, which come with tags that unlock digital content.
The power of the virtual worlds business was shown recently when Vivendi announced a plan to buy Activision, a publisher of video games for consoles like the Sony PlayStation 3. Vivendi owns World of Warcraft, a virtual world for adults with more than nine million members and revenue of more than $1 billion.
Still, the long-term appetite for the youth-oriented sites is unclear. Fads have always whipsawed the children’s toy market, and Web sites are no different, analysts warn. Parents could tire of paying the fees, while intense competition threatens to undercut the novelty. There are now at least 10 virtual worlds that involve caring for virtual pets.
Privacy and safety are a growing concern, particularly as companies aim at younger children. Some virtual worlds are now meant to appeal to preschoolers, using pictures to control actions so that reading is not required.
And critics are sharpening their knives. “We cannot allow the media and marketing industries to construct a childhood that is all screens, all the time,” said Susan Linn, a Boston psychologist and the director of the Campaign for a Commercial-Free Childhood, a nonprofit group that has complained of ads for movies on Webkinz.com.
Operators shrug off worries about fads and competition. “Are features like creating an avatar a long-term advantage for anyone? Probably not,” Mr. Yanover said. “The viability and sustainability of this business comes from the shifting behavior of kids and how they spend their leisure time.”
As for privacy and safety, companies point to a grid of controls. For instance, Neopets restricts children under 13 from certain areas unless their parents give permission in a fax. Several Neopets employees patrol the site around the clock, and messaging features are limited to approved words and phrases.
“Parents know they can trust our brand to protect kids,” said Steve Youngwood, executive vice president for digital media at Nickelodeon. “We see that as a competitive advantage.” ' NY Times January 2008

UK videogame sales up 16% in 2007

'2007 sees staggering growth for video games market, with licensed titles playing key part.
The UK interactive entertainment software market hit a new all time time high in 2007, according to its trade body ELSPA.Chart-Track figures for the year showed that the industry saw a 16 per cent increase on units sold from the previous year, taking the total to an impressive 75.9 million units sold.These record sales across all formats totalled £1.72 billion, an increase of over 26 per cent on 2006's record figures.FIFA 08 from EA Sport was the top selling game, followed by Dr Kawashima's Brain Training by Nintendo, Call of Duty 4 from Activision and Pro Evolution Soccer 2008 from Konami.Halo 3 (Microsoft), The Simpsons Game (EA) and WWE Smackdown vs RAW 2008 (THQ) also featured in the top ten."We are thrilled to see the industry growing and software sales continuing to rise," commented Paul Jackson, director general of ELSPA.
"This is a real testament to the industry, and the creativity and the talent we have in the UK."2007 was the biggest year ever for handheld systems, with the Nintendo DS software actually ranking as number one in terms of units sold, and Sony's PSP ranking number five in units and number six by value.The entire console handheld sector broke previous records and claimed nearly a third of the entire software units market, up 45 per cent and just over one quarter of the entire software market by value, up 28 per cent.The biggest static console format in terms of value generation was Microsoft's Xbox 360, followed by Sony's PS3.' Licensing.biz Jan 08

Ted Baker branded mobile

"Fashion retailer Ted Baker teamed up with The Carphone Warehouse to launch two Ted Baker exclusive handsets in the run up to Christmas.With mobile phones already at 110% penetration in the UK - Samsung Electronics clearly need another reason to make us want one. The central menu button looks like a shirt button." Golden Goose Jan 08

Social network ad stats

"According to online market research firm eMarketer Inc., worldwide advertising spending at social networking sites jumped from US$480-million in 2006 to US$1.2-billion this year. By 2011, that number is expected to grow to US$4-billion.
Those numbers are backed up by British online advertising trade group, the Internet Advertising Bureau. In October, the IAB reported Internet marketing had grown 41.3% in the first half of 2007 and now accounts for 14.7% of the British ad market.
No other Web site has taken advantage of the online advertising cash windfall more than MySpace. After Rupert Murdoch's News Corp, purchased MySpace for US$580-million in July 2005, analysts questioned the hefty price tag for what was then a crowded online hangout for kids. But as the Web site boasts more than 220 million registered users and is finally turning a profit, that price seems a bargain now.
According to News Corp. officials, MySpace exceeded US$500-million in revenues in the 2007 fiscal year. While News Corp. doesn't release specific numbers on its subsidiaries, its Fox Interactive Media unit, which largely consists of MySpace, turned a profit of US$10-million. And with last year's US$900-million contract with Google to provide the back-end for the search engine's online advertising network, those profits should continue to grow.
Facebook, MySpace's closest competitor, grew from a Harvard University dormitory experiment to the darling of Silicon Valley in only two years. With 47 million users around the world and growing at a rate of 200% per year, Facebook made headlines last month after Microsoft Corp. purchased a 1.6% stake in the company worth US$240-million, thus indcating Facebook had a value of US$15-billion." Financial Post, Jan 08