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This article was published on June 17, 2012

This Week in Media: A Flurry of Deals

This Week in Media: A Flurry of Deals
Anna Heim
Story by

Anna Heim

Anna Heim is the founder of MonoLibre and a freelance writer for various tech and startup publications. She is a polyglot French news junkie Anna Heim is the founder of MonoLibre and a freelance writer for various tech and startup publications. She is a polyglot French news junkie with a love for technology.

If there’s one word that characterizes the last few days in the media world, it is “deals.” From the latest acquisitions to settlements and new partnerships, here are the top media news you can’t miss.

Acquisitions, acquisitions, acquisitions

Several European media startups have been acquired this week – often by local players, but not only. For instance, the Japanese e-commerce juggernaut Rakuten bought the Spanish VOD platform – its first acquisition in Spain, and its fourth European deal in two years.

As for the French telecom giant Orange, it is reportedly set to buy the 51% of Dailymotion it doesn’t own by 2013. The deal would cost the France Télécom subsidiary around 72 million euros ($90.4m). As our European editor Robin Wauters pointed out, this would be a relatively low price tag, considering Dailymotion’s traffic. A solid YouTube challenger, its video platform attracts over 135 million unique visitors per month.

Interestingly, telcos and e-commerce companies aren’t the only players interested in buying online media companies; in the UK, supermarket chains are consolidating their role as startup buyers. Following its recent acquisition of VOD website Blinkbox, the British supermarket group Tesco has now acquired the music streaming service We7 for £10.8m ($16.75m).

As for its competitor Sainsbury’s, it is entering the e-book field with the acquisition of a 61% stake in social book discovery engine aNobii. While this deal is much smaller than Tesco’s, it confirms that startup exits can come from different kinds of players – certainly a trend to follow.

As a matter of fact, we will also keep a close eye on BBC Worldwide’s decision to launch Labs. While it is a mentoring scheme for UK digital media startups, it also has as its ultimate goal to help them strike a commercial partnership with the BBC’s commercial arm itself.

E-books on the rise

According to the March Association of American Publishers (AAP) net sales revenue report, adult e-book sales overtook adult hardcover sales in the US during the first quarter of 2012, MediaBistro reports. This is an important milestone for the digital publishing segment, and it also confirms what many already know: e-books are on the rise.

Google certainly agrees, as it keeps on pushing its ‘Google Books’ offering in new territories. Only a few days after this new section of Google Play became available in Germany, Google also announced its launch in Spain, and it wouldn’t be surprising for other European territories to follow.

Perhaps more importantly, Google has reached a landmark agreement with French publishers, with both the French Publishers Association (Syndicat national de l’édition) and the French Authors Association (Société des gens de lettres) withdrawing their respective lawsuits. As our editor Paul Sawers highlighted, “this means that publishers will not only allow their out-of-print books to be scanned by Google, but they’ll actively promote and commercialize the electronic versions.”

Yet, Google’s book scanning still faces legal hurdles, and may depend heavily on the fate of its recent appeal against a court’s decision to let a class action on book scanning go ahead. As PaidContent’s Jeff John Roberts notes, “The outcome of the appeal is likely to determine the fate of the more than 20 million books that Google has scanned but that now sit effectively locked up on the company’s servers.”

Twitter teams up with media companies on expanded tweets

One of the main media news items this week came from Twitter, with the launch of ‘expanded tweets.’ Reserved to a small list of partners, most of which are media companies such as Time and the Wall Street Journal, it breaks Twitter’s traditional 140-character limit by displaying additional content (videos, pictures, etc) right in the user’s timeline.

According to GigaOM’s writer Mathew Ingram, this is actually a double-edged sword for the content industry. While partners could benefit from this new feature, it also means that media companies may now have to compete with Twitter itself, as the startup is increasingly positioning itself on the media segment.

“Adding expanded content is clearly the company’s way of adding more value to its website and mobile experience so that users will spend more time there (and also possibly a way of cutting out third-party apps, since they won’t get the new features). And it is using content from media companies like the New York Times to do so — content that in some cases might convince people to click, but in some cases might not,” Ingram explains. Which leaves him with a question: “If you are a content creator, are you working for yourself, or are you working for Twitter?”

Content still king

After a relative content drought, fresh content is back at Netflix. Not only has the company added blockbusters such as ‘Thor’ to its US line-up, but it has also closed a content deal with the Argentine distributor Telefilms to beef up its offering in Latin America, with the addition of premium titles such as ‘The Hunger Games’ and ‘The Artist.’

As for its rival Amazon, it has now signed a licensing agreement with MGM to expand the movie & TV catalogue of its Prime Instant Video service. As a matter of fact, Amazon has closed so many content deals for Prime over the last few months that you may be wondering why it doesn’t attract more attention.

But according to VentureBeat, the answer is simple: “Despite the influx of fresh content, Amazon has moved at a snail’s pace to entice its Prime Members to actually use the instant video service instead of competitors like Netflix.” In other words, content may be there, but the user experience is disappointing, as discoverability and navigation still leave much to desire, Tom Cheredar writes.

Cloud music? Still the future

As we reported earlier this week, Amazon Cloud Player has launched on iPhone and iPod touch, allowing US users to stream and download their music stored with Amazon on their iOS device. As you may know, Amazon Cloud Player is a digital vault for digital music that doesn’t just offer more than 20 million songs and over a million albums across different formats from its retail stores — it also allows the uploading of full music libraries.

Yet, as CNet Greg Sandoval notes, Apple and Amazon seem much more excited about cloud music than consumer themselves. Says Russ Crupnick, senior vice president and industry analyst at the NPD Group:

“Despite the hullabaloo about cloud music, it hasn’t gotten traction yet. I looked at our latest numbers and unreleased data, and only about 6 percent of the Internet population has even used something like [cloud music].”

Still, with major players such as Apple and Amazon competing for this segment, it wouldn’t be surprising to see their offers gain traction, and finally help cloud music to take off.

Do you use cloud music? Let us know in the comments.

Image credit: John Blackmore