For all the bickering between television networks and Internet sites (well, iTunes, mostly), it’s interesting how often the word “free” has popped up this week.

The latest example: season premiere episodes of seven Fox Broadcasting programs will be made available for free through Apple’s iTunes, according to the Los Angeles Times. The hope is that downloads of “Prison Break,” “American Dad” and other shows will spur viewers to stick with those shows on TV, or to pay for them online later on iTunes.

The move comes on the heels of NBC’s announcement that it will make its top shows available for download to view for free. Remember, NBC recently pulled the plug on its download deal with iTunes. The shows will be free for one week immediately after their broadcasts. ABC also said its shows will be available for free on AOL.

Earlier this month, News Corp said it had no plans to pull its TV shows from iTunes like NBC, but echoed the media industry’s calls for Apple to be more flexible in its pricing.

I guess you can’t get more flexible than free.

(LATimes)

Keep and eye on:

• Those Google guys are really really rich, like richer-than-Wal-Mart rich. Google co-founders Sergey Brin and Larry Page came in at No. 5 on Forbes’ list of richest Americans with fortunes of $18.5 billion each, and helped nudge off long-time list residents — the members of the Walton family, descendants of Wal-Mart founder Sam Walton. Microsoft’s founder Bill Gates is the richest person in America for the 14th year in a row. (Forbes) (Reuters)
• The verbal sparring between principles of DreamWorks and its parent continued on Friday with DreamWorks co-founder David Geffen suggesting that he may not stick around when his contract expires next year. This comes after Viacom CEO Philippe Dauman said Geffen’s DreamWorks partner Steven Speilberg “…and his team have the right to leave if they choose at the end of next year. We’re planning for that.” (WSJ)
• “Halo 3″ hits stores on Tuesday and Microsoft projects first-day sales of the game to eclipse the $125 million mark set by its predecessor. The game is being seen as the potential rescuer of Microsoft’s Xbox video game business from six years of losses. (Reuters)

The new television season is about to begin, so cozy up to…your laptop.

The trend of watching TV shows on a computer continues to grow as the TV networks roll out more ways to see their programming in places other than the TV. On Thursday, NBC and ABC said they will make some episodes of their most popular shows available for free.

For NBC, which recently pulled the plug on its download deal with Apple’s iTunes, the shows will be free for one week immediately after their broadcasts. ABC shows will be available on AOL from today.

Vivi Zigler, executive vice president of NBC Digital Entertainment, tells PaidContent that the service will not compete with Hulu, the advertising-supported online joint venture between NBC and News Corp., parent of the Fox Network, which is also expected to launch next month.

(WSJ)
(PaidContent)
(NYT)

• Apple CEO Steve Jobs was subpoenaed by the U.S. SEC to give a deposition in a backdating lawsuit against Nancy Heinen, the company’s former general counsel. (Bloomberg)
• Scholastic reported a much smaller quarterly loss, supported by sales of the final Harry Potter book. The publisher affirmed its outlook for the current fiscal year. Harry Potter revenue soared to $240 million from $5 million a year earlier, when there was no new Potter book. (Reuters)
• Magazines Live! Consumer magazines leapfrogged newspapers in the share of the media advertising revenue pie in the first half of this year, versus the same period in 2006. Magazines had a 17.7 percent share of revenue, while newspapers slipped 1.1 percent to a 17.6 percent share. Overall, television still rules with a 44.9 percent share. (Folio)
• With strike jitters running high in Hollywood, screenwriters and studio executives reopened contract negotiations on Wednesday, after a nine-week break, but there was little sign of progress as talks adjourned for the day. (Reuters)
• Former CBS news anchor Dan Rather sued the network for $70 million, saying CBS violated his contract by depriving him of air time and made him a scapegoat to “pacify the White House.” Rather was removed as anchor of the “CBS Evening News” after 24 years in March 2005, after a scandal over a September 8, 2004, report on President George W. Bush’s military record. (Reuters)
• Viacom’s MTV will launch a Web social network to encourage youth activism. Think.MTV.com will be a resource for social and political issues, from the environment to immigration to discrimination. (Reuters)
• Sony said it was confident of doubling shipments of PlayStation 3 game consoles to 11 million in the year to March, and may buy more software firms to boost demand for its console. However it will postpone the launch of the “Home” virtual community service for the PS3 to next year, the latest setback in its videogame battle with Microsoft and Nintendo. (Reuters)

Check out a video of the PS3 story below:

(Photo: AOL.com)

Pity Peter Levinsohn, Fox Interactive Media ’s president, who is scheduled to deliver a presentation on the future of MySpace at an investor conference at the same time (2:15 pm EDT) as the Federal Open Market Committee’s much hoped-for interest rate cut.

That may explain why Levinsohn outlined his speech in a story in the New York Times on Tuesday about how the popular social network owned by News Corp will tailor ads based on personal information from its estimated 110 million members. The ads, based on the work of a 100-member “monetization technology group,” has improved the likelihood of a user clicking on an ad by 80 percent, according to MySpace.

If it works on a wide scale, it could dramatically improve targeting efficiency for one of the most highly trafficked sites on the Internet.

Meanwhile, Facebook aims to secure its popularity among developers after its backers launched a $10 million fund to dole out grants to start-ups with ideas for innovative Facebook applications.

(New York Times)
Keep an eye on:

• Google has expanded its AdSense online advertising service to allow affiliated Web site publishers to target ads for cellphone users as well as computers. (Reuters)
• Warner Music’s CEO Edgar Bronfman said the company’s business was poised to rebound as it tapped new revenue streams to counter the decline in sales of traditional CDs. (Reuters)
• Yahoo will pay about $350 million for Zimbra, a maker of Web-based mail, calendar and collaboration software that competes directly with products from Microsoft and Google. (Reuters)
• Barry Diller’s IAC/InterActiveCorp takes a majority stake in GarageGames.com Inc., a game developer, to creates a Web-based video game network. (Reuters)
• O2 UK, part of Spanish telecoms giant Telefonica, and European mobile phone retailer Carphone Warehouse have clinched a long-awaited deal to bring Apple’s iPhone to Britain. (Reuters)
• Rapper 50 Cent, who promised to quit the music business if first-week-sales of his new CD fell short of Kanye West’s new CD, has cancelled his public relations tour. (Both artists are in the family of labels owned by Vivendi’s Universal Music Group.) (PRNewser)
• Rupert Murdoch’s News Corp. is launching a pair of magazines the New York Post’s relaunch of Page Six: The Magazine this Sunday and the Wall Street Journal’s Pursuits next year with an eye on high-end advertising and the New York Times firmly planted in its crosshairs. (Folio)

Change is in the air at media conglomerate Time Warner, whose shares are down 14 percent this year. The question is, what will change, exactly how fast will they happen and who will lead the charge?

The company detailed some of that strategy on Monday, saying that it would move AOL’s corporate headquarters to New York City — where its advertising executives are already based — from Dulles, Virginia, amid a realignment of its advertising business. It also set a co-branding deal with Hewlett-Packard. Time Warner’s tweaking of AOL , however, come even as some Wall Street analysts call for the unit to be sold.

Contrast that change against what AdWeek calls “Missing Programming Initiatives” at AOL — ideas presented last April to media buyers, earmarked for 2007-2008. Little has been heard since.

At the same time, it appears that Jeffrey Bewkes is expected to be confirmed as Time Warner’s next chief executive before the end of the year, and start the job as early as Jan. 1, five months before current CEO Richard Parsons’ contract expires, according to the Wall Street Journal. (Parsons would remain chairman.) However, the paper said Bewkes may not take major action — associates say he is worried that a major restructuring may not move the stock price.

(Reuters)
(Adweek)
(WSJ)

Keep an eye on:

• Nokia said it is buying U.S. cellphone screen advertising firm Enpocket as the world’s top handset maker pushes into a market which is seen ballooning in coming years. (Reuters)
• French media group Vivendi is in advanced talks to buy a stake of about 33 percent in Dubai-based Oger Telecom, which runs fixed and mobile phone services in Turkey, a cellular business in South Africa and internet services in Saudi Arabia, Jordan and Lebanon. ( Reuters)
• The union that represents many Dow Jones & Co Inc employees supports a contract offer from the company that would provide a 3 percent salary increase to employees. The offer would cover about 2,000 employees, including reporters at Dow Jones Newswires and The Wall Street Journal. ( Reuters)
• SpiralFrog, the ad-supported music site, made its debut on Sunday evening, opening with more than 770,000 songs and 3,500 music videos from numerous independent labels and Universal Music Group. ( CNET)
• Yahoo is testing an experimental social network service called Mash that makes it easy for Yahoo users to share tidbits of their lives with friends and family online. (Reuters)
• Cable TV’s HBO and broadcasters NBC and ABC — tied the race for the most Primetime Emmys on Sunday with six apiece. Watch a Reuters video report below:


(Photo: Reuters file)

Dead Device Walking!

So says Brion Feinberg, an analyst at The Diffusion Group, of that digital audio/video player you have in your pocket (OK, if you don’t have one, one of the three people near you does).

In a strongly worded report, Feinberg says that mobile phones will rapidly rise as an option for consumers desiring media-on-the-go, eventually supplanting the iPod and all hardware based music devices. That is, once problems with battery life, ease of use, and consumers magnetism-to-all-things-Apple are overcome.

The way Feinberg sees it, that ‘pod thing will eventually end up in your basement next to your Rubik’s cube, and lava lamp.

“Within the next few years, demand for stand-alone portable music players will peak and begin to slowly fade into the background; within ten years, these devices will be relegated to museum shelves next to the vinyl LP and the 8-track player.”

The signs are everywhere, if you know where to look, he asserts. The falling prices of flash memory will aid in stuffing more memory into mobile phones, which are already “great music players.” Outside the U.S., music phones from the likes of Nokia, Sony Ericsson and LG already dominate. And Rhapsody America, a partnership of MTV, Real Networks and Verizon Wireless, has set the clock ticking for iTunes, the iPod symbiont.

Hey, even Apple knows it.

“Even Apple is aware of this inevitability, thus one reason for rolling out the iPhone. Yes, Apple will continue to introduce slight modifications and enhancements of the core iPod platform, but the iPhone represents the future of the iPod - just one feature on a mobile phone.”

This might seem a bit harsh so soon after Apple refreshed its iPod line, impressing even the most skeptical gadget watcher. Jupiter Research analyst David Card said: “if I were an iPod hardware competitor, I’d be crying in my beer.”

But the truth is, about a billion phones are sold each year, and more and more of them are letting you send email, take pictures, shop, find friends and restaurants, and watch television.

I never thought I could do all that on my mobile. So do you think you someday will put down you ‘pod and plug into your phone?

Cowen and Co. analyst Tom Watts says there’s a “high” chance that federal regulators will approve Sirius Satellite’s acquisition of XM Satellite, and says the FCC could give its approval early as October, earlier than the expectations from the companies of a year-end thumbs-up.

“With the FCC’s rebuttal period closed, positive momentum from supporters, and a strong precedent from the Whole Foods merger, we expect FCC approval before Dec. 4, the end of the FCC review period. We believe approval as early as Oct. is possible.”

FCC Chairman confirmed that there will be a vote on the deal in the fourth quarter, according to Orbitcast.

At the same time RBC Capital analyst David Bank said that a deal doesn’t wash away the risks for the nascent market. He said that since there is a better than 50 percent chance of the deal going through, it is “time to take money off of the table” — and he cut his rating on XM’s stock, which traded today at about $14.40 a share on Nasdaq.

“While we see potential upside to $16 should regulatory approval be met and all potential synergies be realized, this is balanced against remaining regulatory risk, and fundamental challenges ahead such as anemic retail demand and upcoming resolution of RIAA arbitration.”

(Photo: Reuters)

Just how many more iPhones will Apple need to sell to match pre-price cut profit levels? Nearly twice as many, Silicon Alley Insider says. Analyzing numbers compiled from iSuppli and Piper Jaffray, Alley Insider says Apple will have to sell 78 percent more, or almost 2 at the new $399 price for every 1 at the original $599. 

Alley Insider suggests Apple’s gross profit per phone tumbled 44 percent post-cut to $253 from $449. 
    
So the question is, can Apple woo twice as many buyers to iPhone with a bargain? So far, the answer is a big fat yes. Business 2.0, citing Piper Jaffray’s Gene Munster, says iPhone sales tripled to 27,000 units a day in the period between Apple’s price cut and its announcement that it had sold 1 million units. There’s little chance that sales can be sustained at such a level — Munster says a 50 percent bump is more likely.

Jupiter Research’s Michael Gartenberg looks at it another way: the specifics of near term unit sales may not be as important as Apple’s ability to sprawl its OS X operating system beyond personal computers. Essentially, it put a million Apple computers on the street in 74 days, and with its wireless iPod Touch due later this month, there may be millions more in consumers’ hands by year’s end. 
     
“We’ve already seen three new products from Apple that leverage the OS X platform that aren’t called Macintosh. There’s a whole play here leveraged around new applications, services and the like. Or to put it differently, there’s an awful lot of room for new icons on both the iPhone and iPod Touch.”
(Silicon Alley Insider)
(Business 2.0 blog)
(Jupiter Research)

Keep an eye on:

• Yahoo lands exclusive deal to manage display advertising on Bebo, United Kingdom and Ireland’s most popular Internet social network. (Reuters)
• China says it has suffered “massive” losses of state secrets through the Internet, even as it faces reports that it has raided the computer networks of Western powers. Vice Minister of Information Industry Lou Qinjian proposed a raft of counter-measures including toughened censorship, new security bodies and commercial controls. (Reuters)
• MTV’s Video Music Awards was widely panned. But Britney Spears’ opening number debacle sends ratings and Web traffic up. (Broadcasting & Cable)
• No talks on MySpace/Yahoo link-up. (Reuters)

(Photo: Reuters file)

Facebook is “seriously mulling” raising another round of financing that would be “quite large” and well beyond its last round of $25 million, Kara Swisher at All Things Digital reports. Another round would likely value the hot social network at something near what its founders believe Facebook is worth — multi-billions.

Who and how much remains unclear, but a cash infusion would help the company make acquisitions and expand operations, possibly internationally, Swisher reports, citing unnamed sources. Facebook also gets to pick the prettiest partner at the dance, among them maybe Microsoft, which reportedly offered to buy them for $6 billion. That’s not without some concern:

But some close to Facebook worry that aligning itself so closely with the software giant is a mistake… In any case, given the heat surrounding the company, there are not any lack of moneybag suitors, all waiting to rain down copious cash on (CEO Mark) Zuckerberg and his team.

Does this mean an IPO won’t come until well past 2009? What businesses could make likely acquisition targets for the company that was itself the prey not so long ago? All this confirms what everyone else has been saying over the past few months. Facebook is not for sale yet, quite the contrary.

This, from News Corp. Chief Operating Officer Peter Chernin in an interview with Reuters: I think Mark Zuckerberg is doing just fine. I don’t think he has any intention of selling it, IPO’ing it, or anything else.

(All Things Digital) (Paidcontent.org)

Keep an eye on:

• News Corp won’t pull TV shows off iTunes. In an interview with Reuters in Warsaw, News Corp. COO Peter Chernin tells us the company has no plans to follow its Hulu joint venture partner, NBC Universal, out Apple’s doors. (Reuters)
• Dow Jones Union Talking Strike Vote in Wake of Final Contract Offer - Labor woes on tap for Rupert Murdoch? After months of negotiations, some Dow Jones newsroom workers are demanding a vote to strike. ((E&P)
• Carlyle Pulls Insight Sale To Wait for a Better Time The Carlyle Group has shelved the sale of Insight Communications Co in hopes of getting a higher price later. (WSJ) (Reuters)
• Time magazine to fight an Indonesian Supreme Court libel ruling in favor of former President Suharto, which ordered the U.S. weekly to pay more than $100 million in damages and print apologies, Time’s lawyer said. (Reuters)
• XM drops Tyra, Ellen - XM Satellite Radio will be making various changes to their News and Talk offerings, including dropping brand-name talent like Ellen DeGeneres and Tyra Banks, within the next two weeks. (Orbitcast)
• Apple Eyes Wireless Auction - Google isn’t the only interesting potential bidder for the U.S. govermnment’s pending auction of wireless spectrum. The iPhone maker may join the FCC’s auction of rights to use the spectrum that analog TV broadcasters are handing back to the government in 2009. (BusinessWeek)
• iPhone inventory malfunction - Stephen Wozniak, co-founder of Apple, thinks Apple’s decision to cut the iPhone’s price sharply only two months after going on sale “an accidental error”, and says Apple has a “large inventory and they are set up to build more than they have sold.” (IBC)

The stock market is down. Mortgage markets are hurting. Right now, the economy doesn’t look so hot. Perhaps you’re thinking twice about getting that flat panel TV for the holidays or a family vacation. Give up your holiday cards featuring your youngest child wearing oversized snow boots? No way!

Shutterfly Chief Executive Jeffrey Housenbold says money woes won’t stop consumers from using online photoprinting services to buy personalized calendars with last year’s family vacation on them, or from making photobooks of Grandma’s 70th birthday celebration.

In a recent interview with Reuters, Housenbold, an Internet veteran who boasts executive tenures at eBay, AltaVista and CMGI, responded to the question of whether he was seeing any affect of the tough macroeconomic environment on Shutterfly’s business.

We’re not. When I was at eBay we thought of ourselves as recession-proof because in bad times people bring out stuff that’s in their garage and basements and generate extra income, and in good times people are searching for that hard to get toy or exclusive tickets.

At Shutterfly I don’t think we are recession-proof. I think people are going to give up that extra pair of Jimmy Choo’s or Manolo Blahniks before they are going to give up preserving or sharing their family’s memories, or that one time of year they take the time to communicate through their holiday cards. They still want it to be personal.

I don’t think the macroeconomics are going to affect our business in a meaningful way.

Perhaps not. But The Deal’s blog suggests that what might be best for its business in the end is to remain open to any buyout offers, given its much larger rivals.

(Photo: Shutterfly.com)

Net neutrality proponents such as Google were dealt a blow yesterday after the U.S. Department of Justice warned regulators against imposing regulation that would bar broadband Internet service providers from charging extra to some content providers.

The DOJ said proposals “could deter service providers from upgrading and expanding their networks to reach more Americans.” Making its case, the DOJ compared the practice of setting different price levels for service to options offered by the U.S. Postal Service.

A group representing consumer groups and Internet companies in favor of net neutrality legislation fired back: “This lack of competition and consumer choice for broadband access is the reason why (we support) preemptive safeguards to ensure that cable and telephone companies do not destroy the Internet as we know it,” said the Open Internet Coalition.

GigaOm’s Om Malik:  It is strange logic most believe that the U.S. broadband duopoly is one of the main reasons why some of the more innovative and dynamic services arent coming to market.
(Reuters)
(CNET)
(GigaOm)

Keep an eye on: 

• Steve Jobs is $100 worth of sorry: Apple’s Steve Jobs on Thursday offered a $100 store credit to early buyers of the iPhone, seeking to calm customers angry over an unexpected $200 price cut on new iPhones. (Reuters)
• Sony needs a consistent PS3 strategy, so says Japanese videogame publisher Square Enix. It  called for an unwavering marketing strategy from the once top console maker. (Reuters) 
• Bugs Bunny and the rest of Warner Bros.’s Looney Tunes gang get their own portal “Toon Works.” The advertising-supported site goes live in April and might resemble something between what Walt Disney Co. and Viacom Inc. are doing. Users will be able to watch classic cartoons, original shows, play in virtual worlds, play games and remix cartoons. (Wall Street Journal)