Samsung The Media Company; Selling Video Online

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December 19, 2011 – 12:06 am

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Samsung: The Media Company

Samsung is certainly well regarded as a maker of televisions, mobile devices, refrigerators and other electronic goods. But can the Korean manufacturer also become a media player as a producer and distributor of content in its own right?

That appears to be what Samsung has in mind with two announcements this past week. The company is in the process of splitting itself in to two independent operating units, with one end focusing on consumer goods and the other on enterprise. In the middle of both those sides will be David Eun, the former Google and AOL content executive, who will Eun will be responsible for charting Samsung’s global media strategy.

As the Seoul—based company says in its press release heralding Eun’s arrival, it wants to take better advantage of its growing number of digital televisions and displays, mobile phones, tablets and other connected devices. In other words, it’s coming right after Apple.

Given its strength on the manufacturing side, one would be excused for not being aware that last year, Samsung introduced its own media hub and more recently, an app store and music download service. As paidContent’s Ingrid Lunden notes, “Media and content are clearly areas where Samsung feels it needs to grow to better compete not only with Apple and its one-two-punch of devices and content, but also companies like Amazon (NSDQ: AMZN) and even HTC, which has made investments in media companies like Saffron Digital, OnLive and Beats Audio to beef up how it delivers content, to try to be seen as not just another Android OEM.”

Samsung is already embroiled in patent lawsuits with Apple in courtrooms around the world, as detailed by AppleInsider’s Slash Lane. But the biggest battle shaping up between the two is going to be fought in the living rooms and palms of consumers. With premature excitement building over whether Apple will actually build its own interactive TV – as opposed to simply revamping its existing (and hardly earth-shattering) over-the-top device Apple TV – there is a chance that the two might actually find ways of working together in order to complement their respective weaknesses.

In the interim, however, any rapprochement is unlikely. But it will be interesting to see how fast Eun can move to reshape Samsung and find a way to put its media offerings on the map.

Why Louis CK’s Video Sales Success Is The Exception

You could feel the palpable elation on the part of media companies this past week when comedian Louis CK blogged that he actually made a profit on selling his downloads of concert performance of his. Sure, people could – and did, since there was no DRM protection on the video – view pirated copies, but enough fans were willing to fork over $5 despite the easy availability of the same show for free. (The NYT’s Dave Itzkoff has a good rundown of broadband video’s web-only sales, which, after four days, covered hundreds of thousands of dollars in production costs and made a $200,000 profit).

The success of the online-only sales suggested to media companies that it is possible to count on paying customers in the face of internet piracy. Given the way those SOPA (“Stop Online Piracy Act”) hearings are going, you can’t blame new and old media executives from looking for hope wherever it appears, as the Washington Post’s coverage of the Congressional back and forth shows.

Why did it work? GigaOm’s Mathew Ingram has some excellent answers:

  • It was cheap enough: $0.99 is way too low, $20 is too prohibitive, but $5 feels just right
  • It was easy: no DRM or other restrictions takes away a lot of the friction of finding different systems for different computers and regions.
  • He reached out directly to fans on community sites like Reddit with the understanding the direct-to-fan approach gives users a distinct and personal reason to buy.

It’s that last one that could prove tricky for media companies. People generally aren’t fans of distributors or channels. And if performers like Louis CK only need a cult following to make a profit, why should they go to cable companies for their next big special?

At some point, it probably will be more beneficial to some performers to go it alone. Certainly, that’s a pretty appealing model for most up and coming indie musical artists. But one thing that people seem to demand in exchange for parting with their cash is evidence of production values. And Louis CK needed hundreds of thousands to stage the video for his performance at New York’s Beacon Theater. And unless performers can find independent producers to back them, they’ll depend on big media to support their efforts. Of course, once they’ve made a few million on their own, they certainly will have the wherewithal for a profitable Do-It-Yourself video concert. But for right now at least, Louis CK’s big video sales hit will likely be the exception.

But Wait. There’s More!

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December 19, 2011 – 12:06 am

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