SharkJumping

Kathleen Edwards Concert - When is it NOT OK to Record

My wife and I rarely get out to any type of live music these days due to the usual children issues, but our good friends Fred and Barbara invited us and another couple out to see Canadian singer Kathleen Edwards at the local specialty concert hall The Independent.  The short review is that she put on a GREAT concert, alternating between slower songs and rocking bigger songs, without too much conversation - the crowd loved it, she did an amazing show, the bar was easy to get to, and the acoustics were good -  you should definitely see Kathleen in concert if you like any aspect of Alt Country music.

However, the main irritation and inspiration for the blog is that some really tall guy fought his way in front of our little group in order to hold up a pretty sophisticated recording device, and then proceeded to spend 10+ minutes adjusting the various buttons on it to presumably make sure it could record her concert at the highest enough fidelity.  Having spent enough time with Rhapsody and the legal side of music, I simply don't believe you should be able to nakedly record music, presumably to do something else with it, like make it available on your site - it's simply not your right...The only possible exception would be if Kathleen had a pro-taping policy, as some bands do, but there weren't any signs of that, and he didn't act like it was legitimate.

Am I aware that there are a variety of services which allow you to steal/borrow digital rights to their music ?- Of course.  However, when I ask you in the middle of an artist's live show why you feel able to record a  full concert and your answer is "i will talk to you later, and I haven't have time to ask her", you should not be surprised when I make sure to yell into the mid-point of each concert recording, so that you eventually went away, as you did tonight.

The end result is clear - Kathleen Edwards rocks in concert, and more importantly, stop recording digital musical concerts and pretending its OK, unless the artist approves of it - otherwise, you should all drive these guys out of the arena.  Great creative music is too important to leave to music pirates.

Gay Marriage is Legalized in California

I normally keep personal topics on a small blog called SF Breeders, but today's big CA Supreme Court win was too big to not spread to a larger audience - feel free to ignore if not interested...

In a tight 4-3 vote, the California Supreme Court today ruled that same-sex couples have the constitutional right to marry.  This is a huge win for everyone, especially for the countless LGBT couples in San Francisco which want to have the full rights of a married couple when it comes to raising children in SF - why shouldn't it be easier for them to join all of us in the pain and joy of raising children in San Francisco?  Given that my brother will be marrying his boyfriend in NY in August (technically a civil ceremony), I'm now encouraging them to swing by CA at some point in August to make it fully legal.

In addition, as my father pointed out, it's going to be a big economic win for California.  For the months of June through November, we're going to have countless gay couples rushing to get married in CA, driving the economy upward since weddings are incredibly expensive affairs.  On a less favorable note, tons of right wing, conservative and religious organizations will now hurl tens of millions of dollars into CA politics and media trying to to pass the November ballot initiative banning this inevitable process - but at least it will help our economy in the meantime  :)

The anti-gay wedding bigots may win in the short run, as has happened in most states in the US where this process has gone forward. That having been said, this decision is one more chip in the wall, and as we saw in Berlin, that wall eventually comes down.  As the homophobic older voter base continues to die off, the gay marriage effort will finally pass, just as it did with inter-racial marriage in the 60's, but unfortunately, millions of loving gay couples will suffer in the meantime. 

For now, however, this is a great day for everyone, including parents in San Francisco.

CBS/Cnet Deal - Good Price/Great Fit

CBS (NYSE:CBS) announced today that it will acquire CNET Networks (NASDAQ:CNET) for $11 a share, or $1.8B, which is a big bump up from the $7-8 where Cnet has been trading in recent times.  Some analysts are questioning how CBS justified a price that high, but I think it's a great fit, and it's a really well thought-out purchase.

Like all traditional media companies (newspaper, magazine, radio, broadcast), CBS's core business is declining - no matter what CBS does, fewer people will listen to the radio and watch CBS tomorrow than they do today, although their cable businesses are doing fine.  So, the company either needs to exit those declining businesses or find complementary ones which are growing faster.  In order to do this, they need to pay higher valuation multiples than their core businesses, which is why they can justify the Cnet deal and price.   

To not do a deal like this would simply make future deals more expensive, as all traditional media companies are finding out as they watch their core assets decline - e.g. what are the big magazine conglomerates doing, waiting for their circulation to totally disappear before the make a move?  There is always risk in acquisitions, but this $1.8B bet comes with an actual business attached to it, unlike the Google YouTube deal for $1.6B, so it's a fairly good bet.

With a market cap of $16.5B, CBS needed a core, complementary Internet asset that was big enough to make a difference to their company, but not so large that a failure would pull down the entire firm, a la AOL/Time Warner.   With Cnet in house by next quarter, they can then go back to smaller, bolt-on acquisitions which fit nicely into their larger Internet strategy, which looked a little random before this deal.  On the CNet side, they (and the shareholders) get a strong price for what I regard as a top notch set of properties, and they finally get away from this unrelenting proxy fight being pursued by a group of hedge funds - it's truly a win win on both sides.

Knowing the players at both firms, the culture fit is strong, there are tons of synergies across the offline and online media groups, and on the selfish front, it means SF's only true media company lands in good hands.

27 Dresses Boutique Launches on Meez

We just launched a new sponsored boutique on Meez for the DVD release of the Katherine Heigl smash hit, 27 Dresses, from Fox (NYSE: NWS).  As one might imagine, a fashion-oriented movie is just about a perfect fit for Meez users since we built everything from cool backgrounds to the "catching the bouquet" animation, and of course, some of the great dresses from the movie - click the image to see the animation. 

Along with a terrific reception for our NikeID deal, as well as our ABC Family Princess items, we're continuing to deliver great value for branded advertisers looking for innovative and effective ways to reach an audience that is increasingly online in IM, social media and in games, all places where our 5M+ users export their Meez to represent themselves.

Meez Launches Nike, plus ABC Family Princess

Showing the breadth of what we offer consumer brands through Meez, this week we launched two new brand boutiques, NIke ID and ABC Family Princess.  Our ad agency Alloy (NASDAQ: ALOY) delivered both deals, which involved us creating a wide range of clothing items (tens of key NIKE ID shoes plus amazing Princess dresses and tiaras), fun athletic animations for NIke (NYSE: NKE), plus branded backgrounds which our users adopt by the thousands each day since launch.

The nice thing is we continue to see amazing user adoption of these advertiser-driven items since they reflect how our users want to interact with branded assets, and then use them throughout their online lives, including AIM, blogs, social media, games and  cellular phones.  And we track all of this usage, and report it back to the clients, so it's a win/win for everyone versus just doing a general media buy.

Avatars and Moms - A Key Opportunity

The bulk of the current avatar/virtual world press is focused around a younger demographic, starting with the tween worlds of Webkinz, Club Penguin and Runescape, and then followed by slightly older-leaning sites like Habbo, Zwinky and Gaia Online.  What's interesting is that at Meez we definitely see a primary user base in the late-teen audience, but we also see a hard core user base among mothers, originating mostly from Cafe Mom, Babycenter, and 2 Peas in a Bucket.

We originally thought that this was primarily due to an aspirational group of teenagers role playing as mothers in our forums and other community areas, but it became clear when looking deeper at the data that this was actually a significant group of 25-45 year old mothers, with an intense interest in online communication, but without a suitable identity until they found Meez.  Why use an avatar?  Since it is both more flexible and less personal than a photograph, it ends up that an avatar is perfect for forums, IM and social media.

So we see thousands of incoming users a day looking for our pregnant and mom's item boutiques, and those items are generally in our top 10% of all items saved or purchased each week on Meez.  Our older users repeatedly asked for additional body types ("my meez is too thin" was the top comment), and we delivered a wide set of 3D body types, including, thin, athletic, curvy, plump and pregnant, and one would be amazed at the diversity of female choices each day, unlike men who almost always choose "Buff" (who knew men were visually oriented ?).  And we continue to be surprised at the velocity and variety of You Tube Meez videos produced each day, including this Alison Krauss-themed, child-related music video (here) so we're pretty jazzed about the overall trends among a large set of users.

The key point is that avatars are used by a much wider audience than just teenagers - moms are a growing demographic for Meez, and we'll easily see a time within 5 years where literally everyone who is regularly online has a primary avatar.  This will create an additional revenue source beyond teens since this demographic is an incredibly attractive advertising target as well as a lucrative virtual item audience - e.g. most of our pregnant-related items are our top-selling virtual items.  So we're looking forward to diving more deeply into this sector.

Fantasy Avatars vs Identity Avatars

With the launch of Meez Roomz on Facebook (here), I get asked a lot about whether our avatars and those in Second Life are similar.  The short answer is that the basic purpose of an avatar, which is to represent one in a digital world, is the same in both scenarios, but that how our audience uses them is quite different.

The best way to look at this is that Second Life avatars are often used to represent fantasy versions of users, which is one of the reasons gender switching is so high in SL, as it also is in Massively Multiplayer games like World of Warcraft.   Anywhere between 1/3 and 2/3 of female avatars in these situations are said to be male in the real world.  A recent Nottingham Trent University study (here) has recently come to the same conclusion.

Meez users could technically do that as well, but because Meez avatars are used primarily to represent the user in their real world social media and IM systems (MySpace, Live Journal, AIM, Facebook, mobile phone, etc.), our studies show that only a very small percentage of our users are switching genders.  We have what we call Identity Avatars, not Fantasy Avatars.  A Meez is a more flexible way to show everyone online what type of person you are, and you can easily change it as your mood changes - it's like the ring tone of the Internet - a song that makes you feel good, and also tells everyone around you what type of music you like. 

There is certainly room for both types of avatars in the world, but we believe strongly that Identity avatars are a much larger market in the long run (although fantasy avatars are great in early adopter markets), especially as our users go increasingly portable with their Meez, vs having different ones for each online venue.  Plus the advertising opportunities are far greater in real world scenarios than in fantasy-based ones, as we've shown recently with our most recent integrated brand deals with AT&T Digital World and Snapple.

Next we'll start running an online advertising campaign - "Come to Meez, where women are actually women" (somewhat kidding)

No Chance Spitzer Survives

I normally don't cover non-tech news, but the highly amusing story today (NYT link here) of NY Governor Spitzer getting caught in a federal wire tap prostitution investigation is a story directly from TV show, "The Wire".  There is ZERO chance Spitzer doesn't resign. 

Why?  It's highly unlikely this was his first foray into the extra-curricular side of life, meaning we will now see a steady stream of prostitutes doing interviews about his particular preferences, and we'll also see a lot of time spent investigating whether state resources were used in any of these activities - he's dead in the water.

At least with our own mayor Gavin Newsom, he was already a well known "player" with sky-high approval ratings when he had an affair with his close friend's/campaign manager's wife - he immediately claimed alcohol addiction and fled into treatment, and was later re-elected.   In Spitzer's case, he's married, is known as a moral crusader, she was a prostitute, and he is generally not beloved by anybody, unless you're concerned with the state legislature battles in NY, where it was just looking pretty good for the Dems until today.  It's unfortunate since Spitzer was a possible national leader for the Dems, and now he's been dragged down by personal issues.

Richard Wolpert Starts LA Media Fund - Great Move

The news broke yesterday (here)that yet another early stage digital media investment fund is starting, this time to invest it LA-based companies.  The investment partners are William Morris Agency, Accel Ventures, Venrock and AT&T.   None of that is too surprising, and I wouldn't normally focus on it since there are numerous players chasing the Hollywood Meets Silicon Valley dream, just as there were last Bubble, and most of them go away quietly or blow up spectacularly.

However, for me the key difference here is that Richard Wolpert (picture), my former boss at RealNetworks (NASDAQ: RNWK) will be overseeing the fund.  Richard helped lead the acquisition of the Rhapsody music service when I was running it, and then he did a great job at managing Real's consumer business for the year that I was there.  For those who don't know Richard, he is one of the few executives who can actually fuse business, technology and media, and he has a great track record of doing so, including running Disney's Internet Group, being Chief Strategy Officer at Real, and originally starting his own software company, which he successfully sold.

In addition to his executive roles, Richard is an angel investor in a bunch of early stage entertainment companies, such as 3 Rings, home of casual MMO Puzzle Pirates, and he's a frequent blogger as well (here).  Finally, he's a power player in the LA media scene, having formerly had an interesting partnership with billionaire Ron Burkle and super-agent Michael Ovitz, so all in all, it's a great mix of skills, experience and relationships for the new fund. 

It's too bad Meez is located here in SF :(

Great NYT Article on Children and the Internet

New York Times technology columnist David Pogue recently posted one of the best articles I have seen rationally discussing how dangerous is the Internet actually for children.  I have posted an excerpt below, but the entire article should be read here.

“Sure, there are dangers. But they’re hugely overhyped by the media. The tales of pedophiles luring children out of their homes are like plane crashes: they happen extremely rarely, but when they do, they make headlines everywhere. The Internet is just another facet of socialization for the new generation; as always, common sense and a level head are the best safeguards.”

As a father of 3 children and CEO of social entertainment company Meez with millions of teenage users, I spend a lot of time looking at how young people use the Internet and drawing the line in the sand over different types of behavior, whether at home or at Meez.  But I find myself constantly arguing with friends who are completely and irrationally convinced that stalkers are after their children, whether it's in the local park or on a PC.  I recently even sat on a panel with a young social network CEO who repeatedly argued that the key differentiator for his service was that he had hired a former FBI profiler (Jodi Foster, maybe?) as a key part of his team.

I realize that fear-mongering is a way for certain companies or reporters to break through the clutter of every day news, and that some individuals will try to play up the risk in order to help their businesses, but it's nice to see the subject tackled in a rational way unlike most of the drivel I normally see around the topic.