Blackbird Blog

BlackBerry maker RIM lays off 10% of workforce

Posted by Jim on Jul 26, 2011 in Blog | 14,429 comments

via BlackBerry maker RIM lays off 10% of workforce – Jul. 25, 2011

.NEW YORK (CNNMoney) — Research In Motion, the maker of BlackBerry devices, said Monday that it would cut more than 2,000 jobs as part of a previously announced cost-cutting effort.

The Waterloo, Ontario-based company said the cuts amount to over 10% of its total workforce. RIM’s headcount will be reduced to about 17,000 after the pink slips are handed out this week.

Shares of RIM (RIMM) fell more than 1% in premarket trading.

The company also announced new responsibilities for its top management “to create greater alignment of the organization.” The most major change was the retirement of chief operating officer Don Morrison, who left the company after having been on medical leave. He was replaced by Thorsten Heins.

For several quarters, analysts’ calls for a management overhaul have grown louder. Many believe the company’s dual-CEO model, headed by Jim Balsillie and Mike Laziridis, is inefficient.

RIM’s CEOs blasted back against talk of an executive shakeup last month, arguing that they are the right men to steer the company back on track.

RIM was once the leader of the smartphone market in North America, but sales have been waning recently as many other device makers have introduced devices with broader appeal.

The latest, greatest BlackBerry smartphone, the Torch, is nearly a year old — an eon in the fast-paced mobile device market. Meanwhile, Apple (AAPL, Fortune 500) and Google (GOOG, Fortune 500) are now outselling the former heavyweight.

Very disappointing sales of BlackBerry smartphones and its PlayBook tablets during the last quarter led RIM to cut its full-year profit expectations by 30% last month. As a result, RIM announced in June that it would begin a program to “streamline operations,” which would include layoffs.

RIM said the job cuts were focused on “eliminating redundancies and reallocating resources to focus on areas that offer the highest growth opportunities.”

Last month, the company said that one of those growth areas is QNX, the new operating system that powers the PlayBook tablet.

RIM said its forthcoming operating system, BlackBerry OS 7, is also a core focus. BB7 will enable a slew of sexy, high-end product launches across the globe that some analysts hope will lift the company out of its current funk.

But the release of BB7 has been delayed until late August at the earliest. That means the majority of the company’s sales in the meantime have been — and will be for the near term — made up of cheaper, lower-end devices.

Blackbird brief: It is no surprise that RIMM continues to struggle. For a company that was once the undisputed leader in the smartphone space, it is inexcusable that the newest offering, the Torch, is almost a year old. Both Apple and Android continue to revolutionize the phone market by being more than just a phone. Both iPhones and Droids offer a solid Internet experience while the Blackberry interface is clumsy and inefficient. While I have been a big fan of the QNX operating system for some time, I think after ceding their market to two brand powerhouses in Apple and Google, RIMM is destined to become a niche player in a market they once dominated.

Walmart.com launches movie streaming with Vudu

Posted by Jim on Jul 26, 2011 in Blog | 351 comments

via Walmart.com launches movie streaming with Vudu – Jul. 26, 2011

.NEW YORK (CNNMoney) — Wal-Mart must be hoping that the third time’s a charm: It announced Tuesday that it is launching an in-house movie streaming service directly on Walmart.com.

Wal-Mart (WMT, Fortune 500), the world’s largest retailer, said it is fully integrating online video service Vudu — which it acquired last year — on Walmart.com.

A cloud-based video movie service, Vudu lets customers rent or buy movies over the Internet and stream them to their TVs, Blu-ray players and a variety of Vudu-enabled devices such as Sony’s (SNE) PlayStation 3 and HDTVs from LG Electronics, Sharp and Panasonic (PC).

Beginning Tuesday, Wal-Mart said customers on its website can rent or buy a digital movie in Vudu’s extensive library, pay for it and stream it directly from Walmart.com, Vudu.com or from a Vudu-enabled device.

The company said movie prices vary depending on whether the content is standard definition or high definition.

Vudu movie rentals on Walmart.com range from $1 to $5.99, while purchases range from $4.99 to $19.99.

Vudu 3D movie rentals range from $3.99 to $6.99, and 3D movie purchases range from $11.99 to $21.99.

Wal-Mart will also offer a daily “movie of the day” to rent for 99 cents on the Vudu platform.

Wal-Mart said every Friday the 99-cent movie of the day rental will be determined by consumers, who’ll get to vote on Wal-Mart’s Facebook page for the most popular pick among new releases.

Unlike competing services such as Netflix, the Vudu platform on Walmart.com does not offer any subscription service, and the retailer said it does not currently plan to offer such a service.

Shoppers can also buy movies on DVD or Blue-ray discs on Walmart.com.

Vudu general manager Edward Lichty said the service currently has more than 20,000 movie titles and its library is rapidly growing. He adds that movie studios are “very excited” about the service launching on Walmart.com.

Steve Nave, Walmart.com’s general manager, was equally enthusiastic, saying the initiative backs up Wal-Mart’s assertion that “it is in e-commerce to win and not to play.”

Still, it’s hard to ignore that Wal-Mart’s two prior forays into the movie download business didn’t work out.

The retailer abandoned its online DVD rental business in 2005 after it failed to take off. As part of the shutdown process, Wal-Mart directed customers to Netflix (NFLX).

Wal-Mart again launched a video download service in 2006 in partnership with major Hollywood studios and powered by Hewlett Packard (HPQ, Fortune 500). It also quietly shut down that service a year later. Nave said the the second venture failed because one of the vendors pulled out.

But citing Vudu’s “strong business model,” Nave said he’s pretty confident Wal-Mart will be successful this time around.

Blackbird Brief: Wal-Mart and streaming video for third time? It only makes sense that Wal-Mart (along with many other companies) want a piece of the streaming media pie. Wal-Mart’s real issue here is that the public does not associate Wal-Mart with a streaming service. That hurdle could be overcome by continue to brand Vudu as the service and have that as a partner on Wal-Mart’s website. However, the real issue, ironically, is value. The cost to stream a newly released movie from Vudu starts at $3.99 and goes up to $5.99. In other words, for the cost of an all-you-stream plan from Netflix you can only view two standard definition movies through Vudu. Another issue is the lack of a subscription model. Most people are not going to pay for single downloads when they have other options like HuluPlus and Netflix that provide unlimited streaming. Now, if Walmart can maintain the availability of new releases before Netflix and Hulu and combine that an unlimited HD streaming package, they might have something. Our best guess is that Walmart has got it wrong two times in the past and will get it wrong again.

DreamWorks Animation, Netflix in Streaming Deal

Posted by Jim on Jul 25, 2011 in Blog | 569 comments

via DreamWorks Animation, Netflix Finalizing Streaming Deal – The Hollywood Reporter

DreamWorks Animation, Netflix Finalizing Streaming Deal

5:00 PM 7/24/2011 by Kim Masters, George Szalai

DreamWorks Animation and Netflix have been putting the finishing touches on a streaming rights deal for DWA films that could be announced in the coming days.

According to a source familiar with the situation, the animation studio, which has a film output deal with Time Warner’s HBO that expires in 2014, and the streaming video powerhouse have reached an agreement.

According to Bloomberg News, the deal would kick in after the pay TV agreement with HBO expires, but a source tells THR that HBO has offered to end DWA’s output deal two years early because HBO recently signed a pact with Summit Entertainment that gives the pay cabler 10-12 live action films a year versus the two animated films a year that DWA offers. Plus, animated fare is more common now that HBO content partners Warner Bros., Fox and Universal are all producing those films.

Netflix is scheduled to report its latest quarterly results after the market close on Monday, and DWA is set to report Tuesday afternoon, fueling expectations that a deal could be unveiled sooner rather than later.

It wasn’t immediately clear how a streaming deal would affect future pay TV output deals for DWA.

DWA and Netflix spokespeople declined comment. HBO was not available for comment.

Analysts have predicted that Netflix would push for more streaming content deals, while they have said that DWA may look for new ways to make money off its content. DWA.

DWA and Netflix spokespeople declined to comment.

Analysts have predicted that Netflix would push for more streaming content deals, while they have said that DWA may look for new ways to make money off its content.

Blackbird Brief: With some recent stumbles in the public’s eye, Netflix needs to rebound with some strong news.  The best way to do that is by providing consumers more of what they really want: content. With Apple’s rumored pursuit of Hulu, Netflix needs to continue to differentiate itself from other streaming providers by providing a higher quality of content. This should be the first step in that process. Netflix is now at a very vulnerable position in the market. Exclusive streaming contracts with major studios will be expiring soon and with costs projected to multiply by 10X or more in the next round of negotiations with the studios, more price hikes are expected sooner rather than later. However, the biggest concern Netflix should have would be that a content provider like Sony decides to launch a competing platform on their own devices like the PS3 and TV sets or that Apple and its enormous pile of cash decides to enter the streaming market. Either way, it is an interesting time in the market for Netflix.

Apple Still Bet to Bid for Hulu | PCWorld

Posted by Jim on Jul 25, 2011 in Blog | 133 comments

via Apple Still Bet to Bid for Hulu | PCWorld

.Apple Still Bet to Bid for Hulu

By Ben Camm-Jones, Macworld-U.K.    Jul 23, 2011 4:40 pm

Apple is considering making a bid for the online video service Hulu, according to a report.

Two industry insiders with knowledge of the bid told Bloomberg that negotiations between the two companies were already taking place.

However, the sources only spoke to Bloomberg on condition of anonymity and both Apple and Hulu have declined to comment on the report.

Hulu, which is owned by Walt Disney, News Corp, Comcast, and equity firm Providence Equity Partners, was put up for sale last month. Other interested parties include Yahoo, Microsoft, and Google, according to reports.

Analysts, though, said that Apple was focused on video output and that reports that it was investigating a deal with Hulu were unsurprising. (See also “Why Apple and Hulu Aren’t Made for Each Other”).

Indeed, Hulu is expected to hit the one million subscriber milestone next month and it was estimated by Hulu CEO Jason Kilar that the company could turn over $500 million in revenue for 2011. A subscription-based service would add another string to the bow of iTunes, which currently lets customers either rent or buy video content outright.

This would put Apple in a strong position to compete with Netflix, which currently dominates the US video-on-demand market with more than 23 million subscribers.

Blackbird Brief: Without question, one weak link in the Apple iTunes empire is video delivery. AppleTV has not captured consumers’ heart in the same way that the iPad, iPod and iPhone have. Additionally, Apple does not have a subscription model either for music or video. Some criticisms of Apple’s rumored pursuit of Hulu are that 1)Hulu uses flash, 2) Hulu gives away some content, and 3) Hulu uses some competing platforms. I think these criticisms are without merit. First, youtube was primarily a flash based video system until the iPhone was released. The video platform is not an issue, Apple is interested in the video delivery infrastructure. The video itself can always be re-encoded. Second, Hulu gives away some content, but not without advertising. That does not mean that that content does not generate revenue.  Three, of course, Hulu supports competing platforms to deliver its content. This is a non-issue. This would not be the first time Apple entered a market by using a competing platform. When Apple released the iPod, it also released iTunes software for Windows, a competing platform. Apple saw that the most efficient way to distribute music was through mp3s and the computer. Why not deliver that format to as many people as possible. I believe that Apple sees video distribution the same way. Why not purchase a service that already can be delivered to many devices? It just makes sense. Additionally, with the enormous amount of cash that Apple has coupled with its enormous brand value, Apple could replace Netflix as the preferred video delivery system in most people’s homes sooner rather than later.