Market Talk

The latest spat between Disney (DIS) and Cablevision (CVC) prompts some to wonder whether the cable industry will ever embrace an a la carte pricing structure.

The long-running feud between TV broadcasters and cable operators has intensified in recent months. Disney and Cablevision struck a deal last night to restore ABC’s feed to Cablevision subscribers just as the Academy Awards were kicking off. Same sort of dispute occurred a few months ago as talks between Time Warner Cable (TWC) and News Corp (NWS NWSA) went down to the wire, with News Corp threatening to pull access to the Fox network. But the two sides agreed to a last-minute deal on New Year’s Day. (News Corp owns Dow Jones Newswires, publisher of this blog.)

Other disputes haven’t ended without major disputes. The Food Network and HGTV – owned by Scripps Networks (SNI) – were blacked out on Cablevision for three weeks in January before the sides could reach a deal.

The longer these battles between broadcasters and cable operators last, the more likely consumer outrage will increase and FCC “will have the cause it seems to have wanted to require a la carte pricing for cable,” says CUNY journalism professor Jeff Jarvis.

A la carte pricing essentially allows consumers to pick and choose which stations they will pay for instead of paying higher rates for access to hundreds (if not thousands) of stations that most people don’t even watch.

“Then both broadcasters and cable operators and their parent companies will get their just desserts,” he writes. “I will not pay for 90% of the channels I am forced to pay for now. That will reduce revenue to cable. It will mean that many channels will no longer be subsidized. It will kill marginal channels.”

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An Italian court convicting three Google (GOOG) executives for privacy violation isn’t sitting well with the Internet giant and has bloggers fuming about future implications. WSJ has the details:

An Italian court on Wednesday convicted three Google Inc. executives of violating the privacy of a disabled boy by allowing a 2006 video of students bullying the boy to air on the now-defunct Google Video site. The ruling could restrict the way Internet companies operate in Italy.

Judge Oscar Magi in Milan gave six-month prison sentences to David Drummond, Google’s senior vice president and chief legal officer, Peter Fleischer, its chief privacy counsel, and George Reyes, the company’s former chief financial officer…

The ruling sets a legal precedent in Europe for one of the most-sensitive issues facing video sites such as Google’s YouTube: whether Internet companies can be held legally liable for content that is posted on video sites by third parties.

Google slams the ruling on its corporate blog, as it “attacks the very principles of freedom on which the Internet is built,” Google VP Matt Sucherman writes on the corporate blog.

“Common sense dictates that only the person who films and uploads a video to a hosting platform could take the steps necessary to protect [someone's] privacy,” Sucherman says. The goal is to “support free speech while protecting personal privacy,” he adds. “If that principle is swept aside…then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.”

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Oh, the honeymoon is definitely over.

Google (GOOG) threatening to pull out of China after major cyber attacks is garnering praise as it represents a tough stance against the Chinese government that no one else seems willing to take.

The decision, which would hurt Google’s market share, shows the company may be willing to sacrifice search share in favor of valuing its reputation. Heard on the Street columnist Andrew Peaple calls it a “watershed moment” for Google.

WSJ discusses the ramifications if Google were actually to take such drastic measures:

For Google to withdraw from China would be an extremely rare repudiation by a Western company of what is almost universally seen in business circles as one of the world’s most important markets. The country has 338 million Internet users as of June, more than any other country. Even the public suggestion that it is considering such a move is likely to infuriate Chinese authorities. Google’s statement could complicate matters for other tech companies sensitive to being seen as accomplices of the Chinese government.

The big focus from Google’s warning should “sit squarely on exactly how appalling the Chinese government behaves regarding the Web,” Kara Swisher writes at All Things D. She commends Google for taking this critical step in the increasingly transparent digital world.

“We should only hope their actions will spur other tech companies to try to change China the only way its government understands: By saying that enough is enough to how China behaves in the digital community and…to actually do something that will make a difference,” Swisher says. “Because, let’s be honest, enough was enough a very long time ago.”

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Back in the fall, Google (GOOG) CEO Eric Schmidt said his company would get back into M&A.

He wasn’t kidding.

Google’s reportedly in talks to purchase local review site Yelp for about $500 million. NY Times says talks have been on going for a few years, but entered a more serious stage about two months ago.

“If the deal does go through, then Google will have snapped up seven companies since August, for what I estimate is a total of $1.5 billion,” MediaMemo blogger Peter Kafka says.

Yelp’s known for its community of users who’ve produced about eight million reviews in 30 different cities. “Those reviews help draw local advertisers, and that’s a market that Google, along with everyone else on the Web, has been trying to crack for years, with limited success,” Kafka says.

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The government’s new guidelines forcing bloggers to disclose endorsements takes the freedom of speech debate over the Web to a new level.

Federal Trade Commission is taking a tougher stance on bloggers, tweeters and other folks who tout products on the Web in exchange for endorsements, money and other gifts. If connections between advertisers and endorsers aren’t disclosed, FTC can issue fines up to $11,000 per post.

The Journal has additional details:

Some First Amendment advocates worry that the guidelines could represent a restriction of free speech. They point out that, while the FTC has long regulated advertising claims in traditional media, the agency generally has allowed publications to police themselves when it comes to editorial content. For instance, newspapers generally prohibit reporters from accepting gifts from a company they write about to protect their credibility with readers.

It is “good journalism” to fully disclose your potential influences, “but that is not the government’s business to regulate,” said Gregg Leslie, the legal defense director for the nonprofit Reporters Committee for Freedom of the Press. “It is a matter of ethics, not a matter of law.”

Bloggers are equally incensed about the new guidelines. Many agree that disclosing endorsements is ethically correct, but not something the government should get involved in.

“It is a monument to unintended consequence, hidden dangers, and dangerous assumptions,” says CUNY journalism professor and BuzzMachine blogger Jeff Jarvis. He favors transparency and openness. “But mandating this for anyone who dares speak online? Foolish,” Jarvis writes.

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Microsoft and Google keep throwing jabs.

Not only is Google’s (GOOG) decision to launch an operating system a bold move against Microsoft (MSFT), it’s the perfect counterattack to MSFT investing billions in beefing up Bing.

Google, which announced the news in a blog post late yesterday, says the software will be available in the second half of 2010 and initially only target netbooks. Google directly competing with MSFT franchises isn’t new – its email and office software, mobile operating system and browser are directly aimed at MSFT, MediaMemo blogger Peter Kafka says.

But all of them have succeeded just by existing: The chief aim here is to force Microsoft to defend its existing business, which makes it even harder for the company to attack Google’s search franchise. Now comes a full-fledged OS, the core of Redmond’s business.

And with MSFT prepping its Windows 7 launch later this year, not only must it deal with the “ghost of Vista, but the spectre of an OS that doesn’t even exist yet,” he says.

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NY Times (NYT) already failed once trying to charge for online content. Now it looks like it’s going to try the same mistake again.

NY Observer has the details, but the Times is essentially considering two strategies: one is similar to the Financial Times in which a certain amount of content is free and everything after that limit requires a paid subscription. The second option leaves Web content free, but paid “members” are given access to merchandise, Times events and other goodies. From the Observer:

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Twitter’s exponential growth has received a ton of press lately. But a new study shows many of those folks experimenting with the site don’t actually come back.

The microblogging service’s website generates 6M unique viewers a month. But Nielsen Online says 60% of Twitter.com’s users leave the site the following month, meaning Twitter retains less than half of its new users.

“Twitter has enjoyed a nice ride over the last few months,” says David Martin, the VP of primary research at Nielsen Online. “But it will not be able to sustain its meteoric rise without establishing a higher level of user loyalty.”

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Conde Nast folding Portfolio isn’t a good indicator for the future of new magazines, and current ones shouldn’t be boasting either.

As magazines fold because of the recession and deteriorating ad market, it’ll become even riskier to start new publications, Jeff Jarvis, author of “What Would Google Do,” writes at BuzzMachine.

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Lots of chatter surrounding Sen. Benjamin Cardin’s (D-Maryland) bill that would restructure ailing newspaper companies into non-profits with a variety of tax breaks.

Cardin’s plan hasn’t yet attracted co-sponsors, but it has sparked the interest of many within the media, according to Reuters. The plan would give newspapers similar status to public broadcasting companies. They’d be able to report the news as they usually do, but would be restricted from making political endorsements.

Media observers, however, are skeptical such a plan would actually be in the newspaper industry’s best interests. Alan Mutter, managing partner of Tapit Partners and author of the Reflections of a Newsosaur blog, notes the St. Petersburg Times and Christian Science Monitor are two newspapers already owned by non-profits that are struggling.

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