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NETFLIX STOCK HITS ALL-TIME HIGH ON NEWS NETFLIX PLANS TO ENTER CHINA, IN PARTNERSHIP TALKS WITH JACK MA'S WASU

On May 19, 2015, NETFLIX’S STOCK REACHED an all time high for the third day in a row.  Shares peaked at $628.50 a share.  And some analysts expect the price to keep climbing.

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The record share price peak followed reports from two Wall Street analysts that called Netflix undervalued.  Last week, analysts at Apex Capital largely agreed.   The firm said.  

"Netflix is quickly becoming one of the most powerful media companies in the world.”

The firm added that the streaming video giant could soon become the next $100 billion tech company.

Wall Street, it seems, sees the future much the way Netflix does—a future where Netflix takes over everywhere. Netflix CEO Reed Hastings said in an earnings call last month.

“Internet TV is growing around the world at incredible rates.  And so we’re really propelled by that big macro trend.”

These skyrocketing expectations, and accompanying stock price, are in large part due to Netflix’s rapid expansion abroad—in particular, reports since Friday, May 22, 2015, that Netflix is in talks to expand into a huge new market: China. But as all conquerors know far too well, the path to world domination doesn’t come without resistance. Despite its aggressive growth, the company has already experienced pressure from its European markets to improve its service—and fast. 

The Path of More Resistance

Netflix is growing, and quickly, even in its more mature markets like the US, but especially abroad. In the past few years, Netflix has been rapidly expanding to reach beyond US shores. The service now touts more than 20 million international subscribers in more than 50 countries, including the more recent additions of Australia, New Zealand, and even Cuba. By 2017, the company says it wants to be in 200 markets. But even in Europe, Internet speed and access has been a limiting factor. In a recent talk in Germany, Hastings was asked if Netflix would consider a download option so German subscribers wouldn’t have to be dependent on streaming. Hastings’ answer amounted to “no.”

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What’s more, if content is king, European subscribers have been markedly disappointed with Netflix’s offerings. In France and Germany, for example, the original content selections are not as wide as those offered in the US, in part due to licensing deals with local broadcasters  and distribution rules in different countries. (To get around that, some are opting to use a VPN to access the American service, according to The New York Times.) European filmmakers are also unhappy that Netflix is encroaching on their turf—one recently shouting at the Cannes Film Festival that Netflix “will destroy the film ecosystem in Europe.”

Piracy is another major concern for Netflix abroad, according to the company’s latest letter to shareholders. In the Netherlands, for example, Netflix has seen competition from apps such as Popcorn Time that make illegal streaming as easy as a legal service. (Netflix has called the app’s success in the Netherlands “sobering.”) In fact, House of Cards has become hugely successful in China thanks to pirating.

More World to Conquer

Rather than being deterred, Netflix seems to be confronting those obstacles by growing even more. The streaming giant has plans to expand to Japan later this year, and analysts expect the company will try to break into the Chinese and Korean markets soon, too. For any company dependent on subscribers, the biggest fear in any single market is reaching the saturation point. For Netflix—and its share price—to keep growing, the company is betting it will need to continue to expand.

But a new market brings new demands. In its letter to shareholders, Netflix said that early signs indicate that promoting original content helps bring in new members. So, to get new subscribers in France, Netflix is launching an upcoming French-language drama Marseille, advertised as House of Cards for the French. But for an expansion into China, despite being a market already primed to love shows like House of Cards, censorship and stringent regulations on content could prove tough, which is why Netflix seems to be looking to find a partner to smooth its entry.

Netflix has enormously popular original content, the revenue to invest in new shows, and the data to predict the programming subscribers will like best. It’s a recipe for world domination. The company, and now Wall Street, just better hope it translates.

COMMENTARY:

Q1 2015 Earnings Report Highlights

Here are some of the highlights of Netflix earnings report compared to forecasts that were announced on April 15, 2015: 

• Earnings per share: $0.77 (adjusted for foreign-exchange rate changes since last year) vs. $0.69 expected.
• Revenue: $1.57 billion vs. $1.57 billion expected; $1.4 billion total streaming revenue; $415 million international streaming revenue.
• Subscribers: 62.30 million vs. 61.44 million forecast; US streaming net additions 2.28 million vs expectations of 1.8 million; international user additions 2.6 million vs. 2.25 million

Netflix shares increased by more than 12% in after hours, largely because of the big increase in new-user additions.  It added a record 4.9 million new users globally in the last quarter, bringing total number of users to 62.3 million. Both its US and international user additions beat expectations.

Its total streaming revenue was largely in line with expectations, up about 32% from last year. The subscriber growth was higher than expected as its total paid members came in at 59.6 million, slightly more than the 58.7 million forecast. All in all, Netflix added about 14 million new users over the past 12 months.

Netflix said in a statement.

"We think strong US growth benefited from our ever-improving content, including the launch of the third season of House of Cards and new shows Unbreakable Kimmy Schmidt and Bloodline. In addition, retention continued to improve due to the growing value of our service overall. We are forecasting Q2 US net adds of 0.6 million, similar to the year ago quarter." 

In Q4 2014, Netflix launched its streaming service in Australia and New Zealand as part of its plan to finish its global expansion within the next two years. Netflix said it expects to add 1.9 million international users in the next quarter.

Netflix also confirmed that it's seeking shareholder approval for a stock split.  Its stock closed at $475.46 per share on Wednesday, April 15.

Here's what Netflix CEO Reed Hastings had to say about the quarter's performance:

"During Q1, higher-than-forecast net adds and US revenue, coupled with lower-than-forecast content spending, resulted in a US contribution margin of 31.7%, ahead of our 30.1% estimate. In 2015, we expect to run ahead of our US contribution margin growth target of 200 bps/year on average because a greater share of global and original content costs will be absorbed by existing and new international territories as we continue to expand globally (since we allocate global content costs by geography).

In addition, starting in Q2 we intend to shift some of our US marketing budget to international to take advantage of the substantial available growth opportunities. This, in the short term, drives down international contribution profits and drives up US contribution profits. We are still targeting 40% contribution margin in the US in 2020.

Our international segment was fueled by continued strong growth across our 50+ countries as well as a successful March 24 launch in Australia and New Zealand, which adds about 8 million1 broadband households to our addressable market. In ANZ, Netflix benefited from high consumer awareness, a fervent fan base for original series like House of Cards and Orange Is The New Black and operator relationships with Optus and iiNet, the second and third largest broadband providers. We expect international Q2 net adds of 1.90 million, up 70% vs. last year. Later in 2015, we will launch additional markets, starting with Japan.

The strong dollar hurt financial results during the quarter, negatively affecting International segment revenue (lower by $48 million y/y using Q1 2014 forex rates) which carried through into a $15M negative forex impact on international contribution loss. These forex headwinds offset better than expected subscriber growth to result in contribution losses close to our expectations. As a reminder, we absorbed on average 5% higher VAT rates across our European markets starting January 1. We’ll have a full quarter of content expenses in ANZ in Q2 and expect the international segment loss to grow to $101 million, increasing throughout the back half of 2015 as we expand to additional markets (consistent with what we’ve said).

Our strong performance led to overall operating income that exceeded our projections ($97m actual versus $79m forecast). Net income was negatively affected by currency-related transaction losses included in other expense; excluding these forex losses, Q1 EPS would have been $0.77 vs. our $0.60 forecast and our actual EPS of $0.38."

Netflix reported total worldwide streaming revenues of $1.4 billion for the quarter, up 7.28% from Q4 2014 and up 31.33% from Q1 2014.  U.S. streaming revenues for the quarter were $985 million, up 7.41% from Q4 2014 and up 23.28% from Q1 2014.   International streaming revenues for the quarter were $415 million, up 6.9% from Q4 2014 and up 55.43% from Q1 2014.     

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Profitability and Cash Flow Are Down

Netflix's operating income for the quarter was $97 million, up 49.23% from Q4 2014 and slightly down 1% from Q1 2014.  Net income for the quarter was $24 million, down 71.1% from Q4 2014 and down 54.7% from Q1 2014.  

Netflix's reported a free cash flow deficit of $163 million for the quarter, this was up 114.86% from the free cash flow deficit of $74 million reported in Q4 2014.  

Both profitability and free cash flow have been negatively impacted by higher content and marketing costs incurred to improve its film entertainment offerings and higher marketing and promotions costs in order to increase subscriptions and streamings, particularly as it expands into new markets like Australia, New Zealand and Japan.

Netflix Plans To Enter China

According to Bloomberg, Netflix is in talks with Wasu Media Holding Co (000156.SZ), a Chinese media company backed by Jack Ma and other possible partners as it seeks entry into the country’s $5.9 billion online video market, according to people familiar with the matter.

Netflix has held discussions with companies including Wasu Media Holding about forming a partnership, according to the people, who asked not to be identified because the talks are private. Netflix plans “to be nearly global by the end of 2016,” a spokeswoman, Anne Marie Squeo, said in response to questions about a possible China partnership.

Entering China would allow Netflix to take advantage of what’s forecast to be explosive growth in online television in the nation of 1.4 billion people. The market is expected to almost triple to 90 billion yuan by 2018, according to Shanghai- based Internet consultant IResearch.

A local partnership would be essential given the Chinese government’s strict controls over licensing for online content. Netflix wants a partner that has licenses for content on all devices — including mobile phones, computers and set-top boxes, according to the people. China’s State Administration of Press, Publication, Radio, Film and Television has given Internet TV licenses to seven companies, including Wasu.

Wasu didn’t immediately respond to an e-mail seeking comment. Two phone calls to Wasu’s general line weren’t answered.

Courtesy of an article dated May 19, 2015 appearing in Wired, the letter dated April 15, 2015 to Netflix Shareholders, an article dated April 15, 2015 appearing in Business Insider, and an article dated April 16, 2015 appearing in Informitv, and an article dated May 24, 2015 appearing in The Day

APP ANNIE'S WORLDWIDE APP INDEX AND GAME INDEX FOR APRIL 2015

Each month, the App Annie Index highlights the top-performing games and apps for the iOS App Store and Google Play. Our analysis covers trends among the leading apps across countries and categories, and is the industry standard for professionals looking to compare leading apps and publishers. 

Top Android Apps Worldwide For April 2015

In the Android category, Dubsmash gets a boost from celebrities

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In its December 2014 Index for Apps, App Annie reported the rise of selfie video app Dubsmash, which allows users to record and share videos of themselves mouthing along to well-known phrases and songs. In April, the app saw its second round of explosive growth, reaching #5 on April’s combined iOS and Google Play downloads rankings. Starting with a Dubsmash-exclusive tease of Rihanna’s new single on March 26, numerous celebrities (including Hugh Jackman, Kevin Hart and Kate Upton) fell in love with the app. This celebrity endorsement helped renew interest in the United States, where it saw a rise in its download ranks.

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Dubsmash shot up the rankings in Brazil during April 2015

However, it was in Brazil where Dubsmash grew at truly neckbreak speeds. The app spent more than a week as Brazil’s most downloaded app on both the Google Play Store and iOS App Store. As in the United States, celebrities in Brazil (such as singer Cláudia Leite and soccer star Neymar) used the app to record videos of themselves for their fans’ enjoyment. Brazil’s attachment to social media (the country has been called the “social media capital of the universe”), combined with the app’s focus on sharing through social networking apps, helps explain this remarkable growth.

Top iOS Apps Worldwide For April 2015

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Tax day in the United States has come and gone, and TurboTax leveraged this increasingly mobile-first trend for tax preparation, reaching #6 on App Annie iOS revenue charts. While February is historically a successful month for TurboTax, its biggest spike comes from the mad rush in the last few days leading up to the tax deadline on April 15.

The app offers a simple drag-and-drop interface, integration with the desktop TurboTax software, and the ability for users to take a picture of their W-2 to automatically fill out forms. All said, TurboTax is a prime example of apps blurring the lines between the digital and real world.

Top iOS Games Apps Worldwide By Downloads and Revenues for April 2015 

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Top Android Games Apps Worldwide By Downloads & Revenues for Apr 2015

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In App Annie's March Games Index, it wrote about the success of Chinese massively multiplayer online role-playing game (MMORPG) Shenwu, which reached #9 in monthly iOS revenue. In April, another Chinese MMO took the spotlight: NetEase’s Fantasy Westward Journey. This name should be familiar to followers of the desktop MMO scene in China: the original Fantasy Westward Journey was an immensely popular PC MMO that reached over 2.6 million peak concurrent users in 2010.

The mobile version seems poised to repeat that success. The game was by far the highest grossing iOS app in China throughout April and shows no sign of slowing down. The app began its ascent in late March when it became the top grossing app in China and remained there throughout most of April.

The original 2004 PC version’s decade of continued success was largely restricted to China (the game is based on the classic Chinese novel Journey to the West).  It will be interesting to see whether NetEase attempts to bring Fantasy Westward Journey to audiences outside China, seeing as it has struck distribution deals with foreign publishers before.  Regardless of this, however, App Annie looks forward to seeing whether NetEase manages to join the ranks of the Chinese core game giants Tencent and Perfect World who successfully made the transition to mobile.

Top iOS Game Companies by Downloads and Revenues For April 2015

American and Chinese game producers dominated iOS game downloads with Tencent (China), and three U.S. gamemakers (Electronic Arts, Times Warner, and Glo) leading the way.  Chinese game producers dominated iOS revenues with Tencent and Netease leading the way followed by three Japanese gamemakers (Gung Ho Online, Mixi and Line).     

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Top Android Game Companies by Downloads and Revenues For April 2015

King Games was the leader in Android game downloads followed by Gameloft (France), Doodle Mobile, Electronic Arts (USA) and Ketchapp Studio (France).  Japan dominated Android game revenues with a few exceptions. Supercell (Finland) was the leader in Android game revenues followed Netmarble (South Korea) and Gung Ho Online (Japan).  

 

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Courtesy of the Worldwide App Annie Index for Apps dated May 20, 2015  appearing in App Annie Blog and the Worldwide App Annie Index for Games April 2015 dated May 20, 2015 appearing in App Annie Blog

GAMEMAKER ZYNGA ANNOUNCES 18% STAFF CUT AND FOCUS ON FEWER GAMES JUST TWO WEEKS AFTER RETURN OF CEO MARK PINCUS

Just weeks after returning to the helm of the videogame company he founded, Zynga Inc. CEO Mark Pincus is slashing nearly a fifth of the workforce.

The job cuts, announced Wednesday, come as Zynga grinds away at a turnaround. The company reported a 9.1% increase in its first-quarter revenue and a narrower loss, both better than what Wall Street expected. It also forecast a second quarter slightly stronger than analysts’ projections.

Shares jumped hours before the close in New York, finishing up 4.4% to $2.61. In after-hours trading, Zynga’s shares were up 6.1%.

Zynga’s stock price over the nearly two-year period since the hiring of former CEO Don Mattrick on July 1, 2013 (Click Image To Enlarge)

Zynga is cutting 364 employees, or about 18% of its workforce. It is one of the first strategic moves from Mr. Pincus since he returned in early April to retake the reins from Don Mattrick, a former Electronic Arts Inc. and Microsoft Corp. executive who held the top job nearly two years.

Departed Zynga CEO Don Mattrick (left) with founder Mark Pincus (right) who returned from a nearly two-year hiatus to retake the reins as CEO (Click Image To Enlarge) 

The cuts, expected to be completed before year-end, will result in charges of between $18 million and $22 million in the second quarter, Zynga said. The company expects annualized savings of about $45 million excluding those charges, with another $55 million down the road through other belt-tightening, such as letting Amazon.com Inc. manage its servers.

It’s not the first time Zynga has cut into its ranks. In June 2013, it let go of nearly a fifth of its payroll. This latest round will leave Zynga with about 1,600 employees, less than half its peak of 3,400 in 2012, when Zynga acquired OMGPOP Inc. for $180 million.

In an interview, Mr. Pincus said Zynga was trying to do too much. He plans to focus on a few popular areas like casino games. One casualty is sports, a category Zynga entered less than a year ago with a new studio in Orlando, Fla. That studio is closing, stopping development of a Tiger Woods golf game and putting a countdown clock on an NFL game.

Mr. Pincus said.  

“We just have been spread too thin.  Zynga hasn't done a great job of funding our best opportunities.”

One hole in Zynga’s mobile portfolio is action-strategy games. Earlier this week, Zynga released “Empires & Allies” to compete with the likes of Supercell Oy’s “Clash of Clans,” a top-grossing game on app stores.  It took two years to develop, compared with less than three months to make one of Zynga’s first-ever hits, “Mafia Wars” for PCs, Mr. Pincus said.

Sean McGowan, an analyst at Needham & Co., called the ax-wielding a positive step.  He said.  

“Even after all the rounds of cost reductions that we’ve seen, this was still a company with a cost structure that was higher than you’d expect.” 

But he questioned the strategy of making fewer games.

“There isn’t a lot of evidence yet that fewer games will lead to bigger games.”

Zynga expects to launch six to eight new mobile games in 2015, including a second strategy game called “Dawn of Titans.”

Getting strategy games out the door is just one step toward an elusive finish line—profitability. That slow march continued in the first quarter, when Zynga reported a loss of $46.5 million, or five cents a share, compared with a year-earlier loss of $61.2 million, or seven cents a share.

Excluding certain items, the loss was a penny a share, on par with a year earlier but better than the two-cent loss analysts expected, according to Thomson Reuters.

Revenue climbed to $183.3 million, ahead of the $147.7 million expected by analysts, according to Thomson Reuters. Zynga said mobile accounted for 63% of its $167.4 million in bookings—money spent on games—in the quarter.

For the second quarter, Zynga expects revenue of between $175 million and $190 million, better than the $156 million Wall Street expects, according to Thomson Reuters. The company expects another net loss, of between $54 million and $50 million, in line with Wall Street’s forecasts. In the second quarter 2014, Zynga had a loss of $62.5 million.

Write to Sarah E. Needleman at [email protected]

COMMENTARY:   When Zynga announced that former CEO Mark Pincus, who was on a nearly year and a half hiatus, was returning to replace departing CEO Don Mattrick, I was flabbergasted and very disappointed.  It was during Pincus' watch that Zynga tried to make the transition from a desktop social game company that used Facebook as its user platform to attract gamers to an indepenent mobile game company.   There was also a lot of controversy surrounding Mark Pincus' treatment of employees, most notably taking back stock options from staffers he considered poor performers.     

Under Pincus leadership, Zynga's active users, revenue growth and share prices dropped precipitously.  Here's what I am talking about:

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In an article dated June 3, 2013, Business Insider's Jay Yarow and Nicholas Carlson discuss in great detal what went wrong with Zynga under CEO Mark Pincus.  Richard Greenberg, an analyst covering technology stocks, like many analysts on Wall Street were "stunned" by Zynga's board of directors announcement that Mark Pincus was returning to replace departing CEO Don Mattrick.

  

Let's hope that the "new" and "improved" Mark Pincus can turn things around at Zynga.  Zynga's financials for the year ending December 31, 2014 and Q1 2015 show declines and red ink across all important company financial performance metrics.

Financial Data FY Ending December 31, 2014 

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Financial Data Quarter Ending March 31, 2015

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Under departed CEO Don Mattrick, Zynga's both daily and monthly active users have suffered significant declines. This is a condition that must be reversed in order to avoid even larger operating losses.  It will require new games with the potential to become hits and revenue generators.      

 

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As you can readily see, turning around Zynga will present a huge challenge for Mark Pincus.   In Zynga's Q1 2015 Earnings Report, Mark will employ a "Narrowed Focus" strategy that will focus on five game categories:

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Social games like "Farmville", "Farmville 2" and "Mafia Wars" which were Zynga's "bread-and-butter" revenue sources  have matured and lost favor with gamers and have shown dramatic declines in active users and revenue contributions.  Pincus must now hope that its two newest "Action" games "Empires & Allies" and "Dawn of Titans," become big hits.     

Courtesy of an article dated May 6, 2015 appearing in The Wall Street Journal, an article dated April 8, 2015 appearing in the New York Times, an article dated May 28, 2014 appearing in ValueWalk, an article dated June 3, 2013 appearing in Business Insider, and data reported in Zynga's Q1 2015 Earnings Report

THE NEW REALITY OF WATCHIG TELEVISION WITH DEVICES VIEWERS USE TO WATCH VIDEO PROGRAMMING WHILE WATCHING TV

Our viewing patterns are shifting and can now watch where we want, when we want. The explosion of devices has given us more access to content and brands than ever before. While the television is still the screen of choice for viewing video content, device proliferation and social-media interaction is shifting the power from the provider to the people.

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HOW WE WATCH: SCREEN SIZE MATTERS

Two-in-five New Zealanders (40%) say video programmes are an important part of their lives, but when it comes to the way we like to watch video programming, size does matter. Over half of respondents (51%) think bigger is better when it comes to screen size, but they also appreciate the convenience and portability of mobile devices. Nearly four-in-10 respondents (37%) think watching video programming on their mobile device is convenient. In addition, the same number (37%) say a tablet is just as good as a PC or laptop computer for watching programming. 

WHY WE WATCH LIVE: PUSH HAS NOW BECOME THE PULL

Real-time conversations on social media are replacing physical gatherings around the water cooler to talk about our favourite TV show. Live TV has become a social event that goes way beyond the confines of our living rooms. Nearly a third of Kiwis (30%) said they like to keep up with shows so they can join the conversation on social media, and a fifth (21%) say they watch live video programming more if it has a social media tie in. Thirty percent of respondents say they engage with social media while watching video programming. And nearly half of respondents (47%) say they browse the Internet while watching video programming.

Social media can increase programme awareness, make the experience more enjoyable and keep viewers engaged. Second-screen strategies should include an interactive component that allows users to take part – making them feel involved and deepening their connection to the programme. But the content needs to be fresh to maximise time spent and to drive repeat visitation. Designers can not focus on one screen, they need to ensure accessibility wherever users are and that the user experience is enjoyable across all devices.

WHAT WE WATCH: DEVICES PROLIFERATE BUT THE TELEVISION DOMINATES

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Whether it is watching a sporting event, news show, documentary or movie, TV remains at the centre of video consumption. It is the most frequently cited device for watching nearly all types of programming genres included in the survey—by a wide margin. The exception: short-form video (typically less than 10 minutes long), which is cited as more commonly viewed on computers, mobile phones and tablets. A computer is the second-most commonly mentioned viewing device for nearly all genres, and it tops the list of devices used to watch short-form content. A smaller, but notable, proportion of consumers watch video content on a mobile phone or tablet, while viewing on e-readers and/or gaming consoles has not yet gained traction.

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ABOUT THE NIELSEN GLOBAL DIGITAL SURVEY

The Nielsen Global Digital Landscape Survey polled 30,000 online respondents in 60 countries, including 500 New Zealanders, to understand how the changing digital landscape is affecting how, where and why we watch video programming. Video programming was defined as any type of content, such as TV, professional video or user-generated content that is watched on a TV, PC, mobile device such as a phone, tablet or e-reader. The study also examines consumption preferences for video programming, including the devices most commonly used for selected genres and the devices used to view video at home and on the go. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective only on the habits of existing Internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population of that country. In addition, survey responses are based on claimed behaviour rather than actual metered data.

COMMENTARY:  The Nielsen survey of devices being used by viewers when they watch television should give marketers food for thought and insights as to how they should target mobile device consumers.  Not only should their marketing message be targeted to these viewers according to their video content preferences, but how they consume that content on their mobile devices.  TV programming content should make references to social networks and mobile apps where they can discuss the specific TV programming.  In short, marketers should provide a tie-in or connection between the TV programming and the mobile device preferences of their target customers.  This provides a means for marketers to harvest valuable marketing informaton about what they thought about the TV programming and how it could be improved.  Furthermore, you can now provide a way for these consumer/viewers to provide feedback through rewards and contests geared to create brand ambassadors.

Courtesy of an article dated April 19, 2015 appearing in Nielsen Insights 

MUSIC MAPPED OUT: HOW CONSUMERS ARE INTERACTING WITH MUSIC ACROSS THE U.S.A.

Just about everyone connects with music, but where we live plays a big part of how we listen to, buy and engage with our tunes. For example, music aficionados in the Pacific region (California, Alaska, Oregon, Hawaii and Washington) make up the largest group of subscription streamers in the U.S., at more than 7.5 percent. Meanwhile, tune enthusiasts in the Mountain region (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming) rank second-highest for listening to music (CDs, digital tracks, albums, etc.) as a primary activity—meaning they listen specifically to listen rather than being in a space where music is playing in the background. When you add in background music, the Mountain region boasts one of the highest overall listening rates across the country.

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Courtesy of an article dated May 9, 2014 appearing in Nielsen

THE PORN INDUSTRY GOES SOCIAL WITH PINSEX, A NEW PINTEREST-LIKE SITE FEATURING ADULT CONTENT

A NEW PINTEREST-LIKE SITE FEATURING ADULT CONTENT IS ON THE RISE.

Social media + porn = ?

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The answer to that equation lies in two fairly new sites, PinSex and its sister company, PinGay (both NSFW). The two domains are outlets to exchange naughty videos, GIFs, and images. Based on the Pinterest model (but completely separate from Pinterest itself), users are encouraged to share, save, browse, and even upload content. There is also an online toy store and interactive webcam features, oftentimes offering the chance to interact with adult stars of the industry.

 

For the most part, porn-laden sites and users alike have not been lucky in the realm of social media. With social media outlets like Facebook and Twitter placing stronger restrictions on lewd content (Instagram lightened up a bit recently by permitting the use of some questionable hashtags), porn indulgers are being driven to less restrictive social sites.

PinSex is currently getting between 120,000 and 150,000 unique visits per day, with a goal of breaking 1 million by the end of the year, according to Christian Thorn, the CEO of PinDigital, the startup behind both PinSex and PinGay. With little market competition, Thorn's sites could become social erotica giants.

COMMENTARY:    Pinsex allows users to save, share, upload, and browse adult content. It also features an online sex toy store, interactive camming services, and a platform for porn stars to interact with fans, the most recent being adult performer and cam girl Hailey Morgan, who announced that she was joining Pinsex as a porn star “investor” last month.

Helmed by CEO Christian Thorn, who launched the site a little less than a year ago, Pinsex touts itself as one of the few social porn sites on the market to successfully merge adult content and social media. Thorn says it gets 120 to 150,000 unique visits a day, and the company hopes to break a million by next year.

Pinsex is far from the only site of its kind. There are a slew of adult social-networking services like Bang With Friends, as well as similarly Pinterest-inspired adult pinboards like Snatchly and Sex.com’s Pornterest. There are hubs like Reddit's GoneWild, where women trade revealing photos for comments and upvotes. 

Yet with the exception of Tumblr, which hosts thousands of porn-oriented blogs (one estimate suggests that they make up 11.4 percent of the site’s total content), Thorn believes that most attempts to merge adult content and social media have been “quite failed.”

Thorn says.

“For some reason so far no one has really managed to make sex and porn social.  In my opinion, it’s because the products haven’t been good enough, or maybe they’ve not been easy enough to [navigate] and maybe also if you come into a site and it starts popping up advertising left, right under and above, people might feel scared and probably don’t wanna use a service like that. …We think that in today’s new world, there are a lot of people who wanna share their likings.”

Because watching porn is traditionally thought of as a solitary and private activity, it’s understandable that attempts to get users to connect with one another would achieve limited success. That’s why Pinsex gives users the option to pin anonymously, using an interface that’s as clean and accessible as possible.

Thorn says.  

“We don’t wanna make it look like the typical porn site.  We tried to make it softer, easy, simple. Our advertising is never pop-ups, to make the user experience as streamlined as possible. So what comes into focus is what people wanna share.”

Like Tumblr, which hosts a panoply of female-friendly porn blogs, Pinsex is also attempting to cater to a female audience. According to Thorn, it offers female-friendly content among its 75-odd categories, and the most pinned images are moody, black-and-white nudes rather than penetration GIFs or yawning vaginal close-ups (although those are certainly present as well).  

Unlike Tumblr, however—which, after it was acquired by Yahoo, dealt with its “porn problem” by making it more difficult for users to search for porn tags—Pinsex is first and foremost a platform for adult content.  That might make it less palatable to mainstream consumers, but it also ensures that those looking for a place to share their favorite clips, GIFs, and images will have a place to do so without fear of getting banned or censored.

Thorn says.  

“When powerful companies do their best to block a lot of porn, in my opinion, they’re inviting their users to find another place to share it.  If that’s the case, they’re very welcome to Pinsex.”

Courtesy of an article dated November 13, 2013 appearing in Fast Company

DISTIMO'S TOP GLOBAL APPLE, GOOGLE, AND AMAZON MOBILE APPS FOR NOVEMBER 2013

Distimo proudly presents the top performing applications for November 2013 in this blog post. We highlight the leading free, paid, and grossing apps for the Apple App Store, Google Play, and the Amazon Appstore. The charts in this blog post are based on Distimo AppIQ data, covering the full month of November 2013 on a globally aggregated level.

Top Free Apps

In November, the top global free charts of the Apple App Store showed three new entries in the top five. Clumsy Ninja was first seen in early October, but the family/ adventure game “stumbled upon” the number one position, after generating more downloads than YouTube, which followed close during November. Rank number three also showed a new entry with the entertainment app Bitstrips. The app enables an interactive comic design and was also released in early October, but in November the downloads more than doubled, which caused the developer team and their servers to be positively “overwhelmed by the success”, while they are now working on making the app faster and better.

Facebook remained with a stable download volume on rank four, while a newly released app from November followed close on rank five: the simulation-game My Talking Tom. While the largest portion, 27 percent, of all downloads was generated from the United States, it was interesting to see that almost 20 percent of the downloads came from China.

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On Google Play, the top five free apps did hardly change. The titles on rank one through three remained the same and Instagram moved one spot down from rank four to five. Rank four in contrast showed a re-entry: the Facebook Messenger app showed increased device installs by 20 percent, compared to October, and moved back up to rank four. After the United States, the most device installs were generated in India during November.

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In the Amazon Appstore, Candy Crush Saga held up the number one position during November. Playsino, Inc. landed on rank two with Bingo World. The classy casino game was first seen in July, but with a recent update, it came with a special Thanksgiving theme design, which might have contributed to reaching a top position in the free charts of the United States. The quiz game Guess what? HD by Blue Sky Games moved up in the charts again to rank number three, followed by a newer quiz app: Cartoons Shadow Quiz on rank four, which was released in mid-October 2013. Despicable Me: Minion Rush rounded out the top five, once again, on rank number five.

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Top Paid Apps

Minecraft – Pocket Edition on rank one and Angry Birds Star Wars II on rank two traded places compared to October, but remained the two most successful paid apps in the Apple App Store during November. Also Plague Inc. and Heads Up! did not move from their ranks three and five, respectively. The only new name in the paid charts was Backflip Madness, which – based on our estimates – increased its download volume almost by factor 10 when compared to October.

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Much in line with the free charts, Google Play’s top paid titles did not move a lot during November. The global top five paid apps remained the same, while only little changes in their positions took place. Titanium Backup PRO Key ★ root was more popular than Minecraft – Pocket Edition, which moved one spot down to rank three. Nova Launcher Prime moved in a similar way up to rank four, and switched again ranks with Poweramp Full Version Unlocker, which landed on rank five in November.

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Unlike on Google Play, the top position remained in Mojang’s hand with the Amazon version of Minecraft – Pocket Edition. Most of the other apps in the top five paid overview of the Amazon Appstore just swapped ranks. Plants vs. Zombies (Kindle Tablet Edition) by PopCap Games, Inc. and Warner Bros’ Scribblenauts Remix both gained one rank toward the top compared to October, whereas Angry Birds Star Wars II moved down from rank two to rank five. A new addition to the top five was the (on Amazon) newly ranked adventure game Terraria on rank number four. The game was introduced by its developer 505 Games with the line: “…the sandbox adventure has finally arrived on the Amazon Store”. After the game was ranked on top positions before in the Apple App Store and on Google Play, it also scored a top position in the Amazon Appstore in the first month of its initial release. With this performance, the indie adventure game is just another example of a well performing app across multiple app stores.

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Top Grossing Apps

Looking at the top performing apps in terms of revenue, the players in the Apple App Store remained stable in November. Candy Crush Saga kept the number one rank before Clash of Clans.  The number five position showed a new name though: Game of War – Fire Age entered the top five at the expense of Pet Rescue Saga, which moved one rank down to number six.

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Unlike in the Apple App Store, Candy Crush Saga did not hold on to the number one position during November on Google Play. The popular match-three puzzle game moved two spots down to rank three, behind パズル＆ドラゴンズ(Puzzle & Dragons) on rank two.  This movement was caused by Supercell’s Clash of Clans, which claimed for the first time the number one spot in the global grossing charts, since it was released in early October on Google Play.  LINE Pokopang and 몬스터 길들이기 for Kakao followed on rank four and five.

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Supercell’s claim of the number one grossing position for Clash of Clans in November on Google Play, is one of the main findings in the analysis of November’s Top Global Apps. Following the success of this developer, it is showing no signs of slowing, whether it is based on mobile app strategies like localization or releasing across multiple app stores, Supercell’s games are continuing to perform well in the top charts. Along with the current number two spot in the Apple App Store global grossing chart, this performance proves that Clash of Clans has longevity and appeal on both iOS and Android.

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The graph above displays the past six months, showing the development of the relative market shares between the Apple App Store and Google Play*.

The relative market shares changed once again only slightly by one percent. Google Play increased its revenue share, growing by seven percentage points since June 2013. The revenue share of the Apple App Store decreased over the last six months from 70 percent in June to 63 percent in November. Apple is therefore still leading with the larger revenue share, but Google Play accounts now for 37 percent. The general market growth slowed down a bit during November, but we are looking forward to analyze the continued development during the upcoming holidays.

^* This analysis is based on comparing the revenue generated from the app stores of the following 34 countries: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Hong Kong, India, Indonesia, Ireland, Israel, Italy, Japan, Korea, Mexico, Netherlands, New Zealand, Norway, Philippines, Russia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom, United States, and Vietnam. These countries are chosen for this analysis, as revenue is generated for both stores in each country.

For those of you interested in data about the most popular free, paid and grossing applications on a daily, weekly, monthly, or quarterly basis, Distimo’s leaderboards are a great resource for further research. These leaderboards list applications and publishers per country and per category for the Apple App Store for iPhone, the Apple App Store for iPad, Google Play and the Amazon Appstore.

Combining the data from the monthly leaderboards across all countries with enriched Distimo AppIQ data allows us to analyze the most successful apps worldwide as presented in this blog post.

Courtesy of an article dated December 5, 2013 appearing in Distimo

SINGER BEYONCE RELEASES SURPRISE ALBUM TITLED 'BEYONCE', SELLS 450,000 ALBUMS VIA SOCIAL MEDIA IN 24 HOURS

Beyoncé’s surprise album launch last week says so much about the changing media landscape that it’s kind of hard to know where to start. But one thing that stands out to me is the way social media has enabled the music business to revive a business model that looked increasingly moribund: whole album sales.

According to Billboard, Beyoncé’s self-titled album, which is only available for download in its entirety, sold 450,000 units within 24 hours of its release on iTunes Friday night, and close to 850,000 by the end of the weekend, putting it on course to sell one million copies by Monday evening. At $15.99 per album, that makes a tidy sum indeed. Fans will be able to buy individual tracks beginning December 20.

 

Naturally the unusual approach to launching the album has elicited a great deal of comment: Beyoncé and Columbia dispensed with the usual months-long promotional blitz, with its tired routine of TV appearances, releasing singles, heavy radio rotation, and all that. Instead she just announced the album on Instagram with the single word “Surprise!” and counted on social media to do the rest. Of course this generated plenty of coverage on news Web sites, blogs, and then more “traditional” media like broadcast radio and TV (she also graced fans with a live performance of future single “XO”).

The album itself is very au courant: a complete multimedia product, it includes videos for every song and four bonus videos, making it a “visual album.” But there’s a pleasant irony in the fact that all this digital media innovation is focused on selling a complete album with 14 songs, all (presumably) forming one coherent artistic statement; why, it could be 1973 again.

 

Seriously, I can’t remember the last time I bought a whole album. Sure, people of a certain age still venerate and celebrate the great albums of the past: the 35^th anniversary edition of Fleetwood Mac’s “Rumors” generated quite a bit of buzz (and probably a good number of tokes) earlier this year. But more recently it seemed that, in our world of on-demand media consumption, where we are dismayed to find our attention spans challenged by Vine, the album was a thing of the past.

The numbers certainly seemed to suggest as much: from 2004 to 2012, total album sales fell 53% from 667 million to 316 million, according to Nielsen SoundScan and Nielsen BDS, even as total music sales (including singles, music videos, and so on) rose from around 820 million units to 1.66 billion units over the same period.

Beyonce album cover. (Click To View Promotional Video)

There’s no question that Beyoncé is atypical: first and foremost, she is Beyoncé, and this, in combination with other factors -- the novelty of the surprise album, a holiday season debut -- probably combined to make her release a success where others might have flopped. But if a million fans are willing to shell out $15.99 for a whole album, rather than waiting six days for individual tracks, maybe there’s life in the long form after all.

 

COMMENTARY:   Beyonce explained on her Facebook page that Beyonce is a “visual album,” and that she “sees music.” We’re glad she does, because the videos onBeyonce are awe-inspiring.

Beyonce said.  

“It’s more than just what I hear.  When I’m connected to something, I immediately see a visual or a series of images that are tied to a feeling or an emotion, a memory from my childhood, thoughts about life, my dreams or my fantasies. And they’re all connected to the music… I didn’t want to release my music the way I’ve done it. I am bored with that. I feel like I am able to speak directly to my fans. There’s so much that gets between the music, the artist and the fans.”

Here are a few images taken from the 14 sounds included in her Beyonce album.

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Courtesy of an article dated December 16 2013 appearing in MediaPost Publications The Social Graf

TV'S 'SHARK TANK': VENTURE CAPITAL'S AMERICAN IDOL, INVESTED $28 MILLION IN 116 DEALS SINCE 2009, BUT NO HUGE ROI'S

ABC's series "Shark Tank" cast for the 2013 season includes successful entrepreneurs Mark Cuban, Barbara Corcoran, Kevin O'Leary, Lori Grelner, Daymond John and Robert Herjavec (Click Image To Enlarge)

WITH ITS HOPEFUL ENTREPRENEURS, REAL INVESTORS, AND SERIOUS CASH, ABC'SSHARK TANK IS BRINGING STARTUP CULTURE TO PRIME TIME. IS IT TEACHING VIEWERS GOOD BUSINESS HABITS?

Mike Hartwick and Sarah Ponn were getting worried. Their company, Surfset--which makes training surfboards that mimic the movement of the ocean--was starting to take off, and they had more orders than they could handle. They tried to get a bank loan, but that didn't work out. So Hartwick and Ponn decided to audition for ABC's Shark Tank, where entrepreneurs pitch their businesses to a panel of mega-successful "sharks," hoping one or more will invest their (real) money in exchange for a stake in contestants' companies. They came in offering 10% of Surfset for $150,000.

 

Hartwick and Ponn joined thousands of other entrepreneurs hoping to jumpstart their companies through prime time's first-ever venture-capital reality show. For its first season, Shark Tank received 2,000 online applicants. Its fifth, which premiered on September 20, attracted 30,000 hopefuls. Of the 262 contestants who had gone in front of the sharks by the time season 5 kicked off, 116 walked away with deals--a total investment of about $28 million of the sharks' own cash.

The show has launched other highly successful products:

Drop Stop, a device that prevents objects from falling between a car's seat and center console ($3.5 million in sales since it debuted on the show, on March 29).  

Drop Stop on Shark Tank from Greg Johnson on Vimeo.

Scrub Daddy, a sponge that changes texture based on water temperature (more than $13 million since its Shark Tank appearance).

  

And it isn't just aspiring moguls who love the program. After Shark Tank premiered in August of 2009, it was first a cult favorite, then a popular one. Audiences came for the inventions, the "how did I not think of that?" head slap. They stayed for the deal-point negotiations and tense talk of valuation and equity. By last season, an average 7 million viewers were tuning in during its humble time slot of Fridays at 9 p.m., making the show--essentially an on-screen business meeting--an unlikely hit.

The people behind Shark Tank are convinced that they're helping reinvigorate innovation and entrepreneurship by bringing startup culture to mainstream America in an unprecedented way. Shark Mark Cuban, the billionaire owner of the NBA's Dallas Mavericks, says.

"It used to be you learned about how business works through a lemonade stand.  Now you watch Shark Tank."

As the show has grown into a phenomenon among audiences and entrepreneurs alike, it has begun to waken long-dormant dreams as it whispers into the ear of its audience: Why not you?

Shark Daymond John, founder of clothing label Fubu, says. 

"This is some ugly stuff."

It's a Sunday afternoon on Shark Tank's Culver City, California, set, and John is talking to a pair of nervous-looking young men in bow ties who are pitching a clothing line, called Fraternity Collection.  The sharks are not impressed by the shirts.  Shark Kevin O'Leary, a venture capitalist, says. 

"I saw one of these on a scarecrow." 

Sweating noticeably, the guys start to defend the duds, but John reassures them that ugly is fine with him.   It's not beauty or genius that sharks are looking for in an investment, but rather a proven sales history and the potential for huge profits.  Over the course of about an hour of taping, an interesting thing happens.

The guys impress the pants off John, O'Leary, Cuban, and the rest of the panel--inventor and QVC host Lori Greiner and software magnate Robert Herjavec. (Real estate mogul Barbara Corcoran also often serves as a shark.)  They have an answer for every question, have valued the company accurately, and had $1.8 million in sales for the prior year.  The sharks are shocked. Herjavec says. 

"You're one of the best presentations we've ever seen." 

Which is not to say they necessarily walked away with an investment (to find out, you'll have to watch the episode). But that's what makes Shark Tankcompelling TV: You never know who is going to kill it.  British-born executive producer Mark Burnett (Survivor), who adapted the show from the Japanese program Dragon's Den, says. 

"Everybody's got an idea and certainly this nation is a country of small businesses.  I just knew it would spark America."

Shark Tank lets its audience eavesdrop on a process one normally doesn't get to see. And it doesn't hurt that it features a panel of wealthy investors who seem unexpectedly relatable. Why not you? indeed. Herjavec says later in his dressing room.  

"With our show, you get five friends--the sharks--who come to your living room, who are successful, who really aren't that special, don't have a special education, don't come from wealth.  And if we can do it, absolutely anybody in this country can. Trust me. Look at us."

Yet the show may, at its core, obscure how hard it really is to succeed. None of the sharks have seen a life-altering payback from their deals--some even pity-laugh at me when I ask if any of the returns constituted a significant contribution to their wealth. While appearing on the program has made a huge difference for quite a few of the contestants, it could be that exposure is the crucial payoff.   O'Leary says. 

"Shark Tank is a platform.  You can launch a product or service where tens of millions of people see it, and sales quadruple in a matter of hours."

Could the show's success catapulting businesses owe more to its role as a massive advertising platform than to anything offered by the sharks? Maybe the millions of attentive eyeballs are the real prize.

Consider an investment O'Leary made in Wicked Good Cupcakes, which sells treats in a jar. He says.  

"They [had been] doing $16,000 a week.  Within seven days of appearing on Shark Tank, their sales grew to $280,000. There's no venture-capital firm that can do that for you. We are the American Idol of venture capital."

 

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Before pitching themselves in the Tank, Surfset's Hartwick and Ponn (along with cofounder Bill Ninteau) wooed some potential investors in case the show didn't pan out. They knew that no matter what happened, hawking their product on TV would create big interest. They needn't have worried. All five sharks made bids--a rare occurrence--and Cuban won, buying 30% for $300,000. Corcoran, who had tried to partner with Cuban on the deal, told Hartwick and Ponn,

"You just made yourselves millionaires."

She might just be right. Hartwick, the company's CEO, says they had 250,000 visits to their website the night their episode aired on September 20, 2012, along with thousands of emails. Orders have been coming in steadily ever since. Hartwick says they're on track to do $5 million in sales this year. A few months after the Surfset episode aired, Shark Tank did a segment on the company's progress. In it, Hartwick and Ponn talk about what a windfall Shark Tank was. Ponn sits next to her business partner, her voice softening.  She says, smiling.  

"It sounds corny.  But it is the American dream, and we honestly feel like we're living it."

THE PERFECT PITCH

if you're going on the show, Be passionate. Or maybe don't be passionate? Hmm.

"We had a guy come out yesterday and he was very even-keeled. Everyone was making fun of him: 'Oh, you're not excited.' I said, 'What did you do before this?' He said, 'I was a corporate lawyer. I left a $175,000-a-year job to start this business.' For me, he's all-in. I'd rather have commitment than passion."
-Robert Herjavec

"Charisma is big. I don't invest anymore in entrepreneurs who don't have charisma."
-Barbara Corcoran

"How you impress somebody is confidence. That's what the sharks are looking for." 
-Clay Newbill, Executive Producer

"I'm passionate about basketball, but that doesn't make me a good basketball player. That's typically the biggest mistake, because they get so excited about what they're doing that they think they're just going to overwhelm us with their passion and energy. That doesn't work. Lots of people are passionate, but it doesn't mean they put the determination and effort into it."
-Mark Cuban

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SHARK TANK SUCCESSES

 

• The Product -Talbott flavored teas
  • The People - Oprah's hair colorist Shane Talbott and his business partner, Steven Nakisher
  • The Payoff - Jamba Juice acquired Talbott Teas for an undisclosed amount not long after the episode aired 

• The Product - Lip balm KissTixx. Smooching creates a new taste
  • The People - Dallas Robinson and Mike Buonomo, who hoped to improve their game with the ladies
  • The Payoff - Former fashion designer Fleetwood Hicks

• The Product - Villy Customs, a bicycle business that allows customers to design their own beach cruisers
  • The People - More than 5,000 sold when the episode ran. You can buy them in stores across the country
  • The Payoff - After appearing on the show, Villy started selling more than 100 bikes a week

Courtesy of an article dated October 14, 2013 appearing in Fast Company 

KATY PERRY CELEBRATES HER 29TH BIRTHDAY WITH A SPECIAL 'ROAR' CONCERT AT A COLORADO HIGH SCHOOL

Katy Perry celebrated her 29th birthday by giving a private concert at the Colorado high school whose spirited lip dub video to her pop anthem "Roar" became a 

Perry chose the winning video, which was shot in a single take and featured over 2,000 students and staff at Lakewood High School in Lakewood, Colo., lip-syncing to Perry's lyrics group by group, from student athletes to cheerleaders to members of the pep band and more, for its school spirit. 

Perry told "GMA."

"It was thousands of kids coming together to 'Roar' and that's what this competition means to me."

That tremendous sense of school spirit was on display today as Perry arrived in the ultimate pep rally fashion at the school, walking through a sea of thousands of students in orange and black, and took to the stage in a cheerleading uniform to perform, live on "Good Morning America."

The students, whose school mascot is fittingly a tiger, transformed their gym into a concert venue, complete with banners and signs reading "One World, One Roar," for the singer arrival.

Perry, who just released her new album, "Prism," turned 29 today, but said she often feels like a teen at heart. 

Perry said to a packed audience of thousands. 

"I'm 29. I feel great.  I still feel like I'm 13 sometimes. Obviously you can tell by my music and my spirit. I'm so excited about this record and I just love all the participation and the unification …of all of you guys coming together and roaring."

Perry got the crowd roaring with a spirited performance of her hit, "Roar," which featured a jump-rope routine. She also sang her new single, "Walking on Air," and her classic, "Firework."

 Courtney Coddington, Lakewood High School's student body president who directed and produced the winning video, and fellow senior Gavin Rudy, an aspiring filmmaker, edited it. Coddington said it was "awesome" how the entire student body collaborated on the winning video.

The school presented Perry with a special Varsity letter jacket and a birthday cake for the occasion.

Lakewood High School's "Roar" video was one of hundreds submitted after Perry put a call out on "Good Morning America" for high schools to submit their own rendition of her mega-hit "Roar," igniting an online frenzy that made local headlines around the country.

Perry scoured through submissions and was inspired by the stories and the creativity. The singer narrowed it down to Lakewood High School and four other finalists -- Pickerington High School Central in Ohio, Cooper High School in Abilene, Texas, Spanish Springs High School in Sparks, Nev., and Verrado High School in Buckeye, Ariz. -- and said picking a winner was "one of the hardest decisions" she's ever had to make.

Courtesy of an article dated October 25, 2013 appearing in ABC News