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Once Conservative Adelphia Adds Hard-Core Porn to Cable 

(Do we want that?! Remember to use your VCHIP)


February 2, 2005  
By Sallie Hofmeister

Porn is suddenly sexy to a cable TV company once considered the industry prude.

Adelphia Communications Corp. has quietly become the nation's only leading cable operator to offer the most explicit category of hard-core porn. Come Friday, triple-X-rated programming will be available on cable for the first time in a major media market: Southern California.

"People want it, so we are trying to provide it," Adelphia spokeswoman Erica Stull said. "The more Xs, the more popular."

Stull stressed that the programming, supplied by Playboy Enterprises Inc., would not be advertised and could be blocked to prevent children from watching. It will be delivered through video-on-demand technology, available now to about two-thirds of Adelphia's 1.2 million Southern California subscribers.

The move is a radical departure for Adelphia, the largest cable provider in Southern California and the nation's fifth biggest. Five years ago, Adelphia stirred a local controversy by dropping Spice — a popular soft-porn channel — from newly acquired cable systems here because Adelphia founder John Rigas considered X-rated programming immoral.

Today, the 80-year-old Rigas and one of his sons are facing prison terms after being convicted last summer for looting the company and engaging in fraudulent accounting.

Adelphia, which filed for Chapter 11 bankruptcy protection in 2002, currently is on the block. During the last year, in an effort to bolster Adelphia's bottom line, the company's new management has begun offering softer porn in various areas of the country and, in recent months, has introduced the hardest-core programming in a few markets.

The ratings system was developed informally by the adult entertainment industry and has become an integral part of how pornographic movies are edited for specific audiences.

Single-X-rated movies feature nudity, long-range or panoramic and medium-range camera shots, simulated sex and sex between women. Double-X-rated movies show intercourse, oral sex and close-up shots. Triple-X-rated movies feature anal sex and visible ejaculation.

Cable executives said Adelphia's decision to air hard-core porn was unlikely to scare bidders in the current auction. Some predicted that if Adelphia subscribers flock to the new triple-X programs, other cable operators could follow.

Greenwood Village, Colo.-based Adelphia joins a marketplace already teeming with ways to procure hard-core sexual content.

The Internet has become a carnal cornucopia, with graphic images, videos and cartoons. Satellite providers also have gotten in on the act. EchoStar Communications Corp., the nation's second-ranked satellite TV provider, has offered triple-X programming for several years on its Dish Network. Satellite leader DirecTV Group Inc., owned by Rupert Murdoch's News Corp., peddles fare that falls just shy of triple-X.

Some industry experts say explicit programming has helped satellite providers carve out a 20% share of the pay TV market.

"It's scary how much money is made on porn," said Tim Connelly, editor and publisher of Adult Video News, an industry trade magazine that estimates that when strip clubs, magazines, the Internet, TV and DVDs are included, porn is a $10-billion industry. "That's more than Hollywood makes at the box office. And it just grows and grows and grows. It's mainstream now."

Despite an outcry among some religious organizations, parent groups and political figures over the coarsening content coming into homes, the "indecency" backlash could lead to even more graphic programming on subscription services.

"The conservative groups that want to clean up the airwaves have forced people looking for racier stuff to pay for it," said Bill Asher, co-chairman of Van Nuys-based Vivid Entertainment, the world's largest producer of adult programming. "It's given pay TV more authority to go further than before."

Insiders and analysts estimate that consumers spend more than $1 billion a year buying sexually graphic movies and other explicit fare on TV through pay-per-view and video-on-demand services. (That's not counting orders from hotel rooms, where 50% of all movies purchased are from the adult category.)

The revenues have quadrupled since the late 1990s, when cable operators first began moving beyond "soft" porn to embrace double-X fare.

Today, analysts say, adult programming gives cable and satellite distributors their highest profit margins. Such suppliers of adult programming as New Frontier Media Inc. and Playboy get from 5% to 15% of the average $9 consumers pay for a movie, according to industry sources. By comparison, distributors typically give Hollywood studios half of the revenue on pay-per-view movies, which usually costs under $5 per rental.

Although the prospect of more money is enticing, most cable TV providers have been loath to move beyond double-X-rated movies for fear of inciting the anger of investors, subscribers and local politicians who regulate them. But Adelphia executives say that new digital technology, which allows programs to be blocked, has given them more comfort and cover in offering hard-core fare to subscribers.

Adelphia's new strategy also has opened new opportunities for Playboy, which is providing triple-X programming to television for the first time.

"We're all public companies that want to make a lot of money," said James Griffiths, Playboy's top entertainment executive. "Playboy needs to supply whatever programming our distributors need to be successful. What do customers want? All you have to do is look at what's available on the Internet."

Playboy, the Chicago-based company founded by Hugh Hefner, once was one of the most conservative players in the world of adult entertainment.

Industry sources say Hefner's daughter Christie, who now runs Playboy, was uncomfortable going harder core and was protective of the company's carefully cultivated image as a gentleman's brand.

In the meantime, rivals began to chip away at Playboy's dominance. Chief among them were Boulder, Colo.-based New Frontier and Vivid, which produced harder-core fare for pay TV operators looking to keep pace with Internet and satellite rivals. In 2001, to protect itself, Playboy bought three channels owned by Vivid that aired the company's double-X programming.

Industry sources said Larry Flynt also was attempting to become a force in the triple-X world of television, offering distributors attractive terms to carry his new HustlerTV. One adult industry veteran, however, said Flynt had received a lukewarm reception in the cable industry because of his notoriety for pushing the envelope.

In the bigger scheme, the partnership between Playboy and Adelphia in Southern California is a small step in a more ambitious plan to lure viewers away from the Internet and make television their primary destination for porn.

Playboy is gearing up to supply a variety of programs on demand that will keep subscribers running up the bill. One goal: to increase the seven-minute viewing time historically clocked by the average person who orders an adult pay-per-view movie.

Said Playboy's Griffiths: "We would love for people to sample more of our programming."

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
R G V  N E W S L E T T E R


FEBRUARY 2005

Welcome to the Rockbridge Global Village, Inc. Newsletter. We have selectively found information and articles that may be of interest to our customers.  We hope that you find information and topics within this newsletter interesting and useful.

Topics in this newsletter:

Vonage, AT&T Resolve VOIP Branding Suit
Wireless VOIP Making Headway with Enterprises
Bloggers Fighting Astroturf
Once Conservative Adelphia Adds Hard-Core Porn to Cable (Do we want that?! VCHIP Everyone!)
Survey Finds Strong In-Flight Access Internet
Yahoo Local Goes Mobile
Spyware, A Customer Relations Problem

Vonage, AT&T Resolve VOIP Branding Suit
February 9, 2005  By Colin C. Haley

A trademark infringement lawsuit brought by Vonage against AT&T has been resolved, officials at both companies confirmed today.

Last year, the broadband telephony upstart sued the venerable carrier, charging Ma Bell's Voice over IP (define) service infringed on its brand.

The action claimed AT&T's CallVantage offering, and some of the Web sites registered to support it, sound too similar to Vonage's corporate name and could confuse consumers.

"It has been settled," Vonage spokeswoman Brooke Schulz told internetnews.com. "Each party came to an agreement on terms."

As a result of the pact, Schulz said AT&T's corporate moniker will precede the name of its VoIP service in marketing and advertising materials. So, the company will push "AT&T CallVantage," but not "CallVantage."

Other agreements were struck on domain names, she said. The settlement, which Schulz described as "amicable," was hammered out over several months.

AT&T spokesman Gary Morgenstern confirmed that the suit had been "closed out," but declined to discuss details.

This was the first time Vonage filed suit to protect its brand. The privately held, venture-backed firm has spent significant sums on advertising and marketing.

The effort is working. Last month, the Edison, N.J., firm passed the 400,000 subscriber mark and estimates that it adds about 30,000 new customers per month.

Meanwhile, AT&T continues to step up efforts to sell AT&T CallVantage. Yesterday, it began marketing a customized version of the service to small office/home office customers.

The Bedminster, N.J., telecom first announced VoIP plans in December 2003 and started rolling out service to residential customers in late March as part of a strategy to retain customers it was losing to regional carriers and wireless providers.

 

Wireless VOIP Making Headway with Enterprises
February 8, 2005  By Mobile Pipeline Staff

Wireless voice-over-IP is starting to make headway in the enterprise, according to a survey released Tuesday by market research firm In-Stat.

The survey of more than 300 medium to large-sized businesses found that 23 percent had already deployed some level of wireless VoIP service and 30 percent said they planned to evaluate the technology in the next six to 12 months. Overall, about 60 percent of the respondents, which In-Stat described as "decision-makers," believed that VoWLAN would be beneficial to their enterprises.

In addition, the survey found significant interest among respondents in the ability to make phone calls from laptops and PDAs. It also found strong interest in unified messaging capabilities that mix both e-mail and voice mail.

Overall, the study predicted that the number of subscribers to cellular and/or wireless LAN networks that can deliver VoIP will reach 256 million by 2009, which is about 12 percent of the total number of cellular subscribers, according to the study. That presents opportunities to wireless carriers that they should take advantage of, Becky Diercks, an In-stat analyst.

"It is important to remember that VoIP is a technology and not a product," Becky Diercks said in a statement. "The product is telephone service, and customers don't generally care what the underlying technology is, as long as it works. Carriers should look at wireless VoIP as just one other manner in which to provide seamless access to customers."

 

Survey Finds Strong In-Flight Access Internet
February 2, 2005  By Mobile Pipeline Staff

A survey released Wednesday found strong interest in in-flight Internet access.

The In-Stat survey found that more than 44 percent of respondents were interested in in-flight wireless access. However, only about half of those who were interested said they'd pay a premium for the service. The study found that sales professionals and consultants were most interested in in-flight access.

In-flight access is just starting as a number of international carriers started offering it in late 2004 on long-haul flights. Initially, the service is being offered by Connexion, a subsidiary of Boeing. However, European aircraft maker Airbus also is working on an in-flight access system.

The survey also found strong interest in in-flight wireless voice service, although that type of service isn't expected until at least next year. In the U.S., the Federal Communications Commission is examining whether to end its ban on in-flight wireless voice service. 

 

YAHOO Local Goes Mobile
January 28, 2005  By Susan Shor

In the never-ending march of new search engine features, Yahoo Local this week added a "send to phone" option to its search results.

Now customers who have mobile phone service from Cingular/AT&T, Verizon, T-Mobile, Sprint or Nextel will be able to send text messages with the address and phone number of, for instance, a restaurant directly from their PCs to their mobile phones using SMS messaging service.

Yahoo Won't Charge

Users of the service would have to pay any fees charged by their mobile service providers to receive the messages, but Yahoo will not charge to send the message.

The new service is unlikely to create a big stir, one analyst said. "I think most people will still prefer to make notes with pen and paper," John Barrett, director of research at Parks Associates, told TechNewsWorld when asked if he imagined widespread use of the feature.

Stuck Behind the Computer

Users still have to be sitting in front of a PC or laptop in order to conduct the search.

Mobile phone users can already search for business listings, dictionary entries and product prices using their phones with Google SMS, launched in beta in October. Users send specific queries to Google and the results are sent via SMS to their phones.

At the same time, Yahoo launched Yahoo Search for Mobile for browser-enabled mobile devices, which allows users to conduct Yahoo Web searches from their phones.

Yahoo's new SMS service can make life a little easier, especially when communicating to a group.

"It offers a little added convenience. In most cases it just saves the 30 seconds it would take to print off the [search] listing or write it down on paper," Barrett said. "It offers greater value in coordinating a group. For example, you could text-message the lunch location to everyone in the office, class, club, etc."

Drawing in Users

Yahoo, Google and, increasingly, MSN, are embroiled in a battle for users. The services are designed to attract more unique views to their sites.

"Yahoo's strategy is to make itself a hub of online activity with spokes reaching out to many different devices. This is another feature along those lines," Barrett said.

The more unique users, the more eyes are likely to see the sponsored links companies sell on their search engines.

 

Spyware, A Customer Relations Problem
February 9, 2005  By Denis Pombriant

A while ago I wrote about the problems caused by various forms of malicious software that download to your computer while you are surfing the Internet.

Spyware is probably the most dangerous. Like the flu, it comes in several forms. Some are used to steal personal information and therefore play an important role in identity theft. Less virulent forms set up shop on your hard drive and capture data about your activities on the Internet. At some point these programs transmit back to central servers that crunch the data.

The people on the other end function much like market researchers, selling the information to vendors who use it to refine products and offers. Some vendors even send the pop-up ads that we all love so much. Spyware and pop-ups can degrade the performance of your unprotected computer to the point where the machine might not run.

Spyware has become such a problem that even Congress is getting involved. But here's my question: Why is it that technology companies are not getting more involved in supporting and promoting the battle against spyware? These companies don't seem to recognize that spyware may be the most important customer relationship management issue of this decade.

Dell's Case

Back in October Dell (Nasdaq: DELL) formed a coalition to fight spyware. Along with other vendors, it is providing spyware removal programs. According to Mike George, vice president and general manager of Dell's U.S. consumer business, upwards of 12 percent of service calls to Dell in 2004 -- that's one in eight -- were spyware related. One in five, or 20 percent, of calls to Dell's help desk were spyware related. If you are an executive, seeing one in eight support calls caused by a preventable problem might make you see red. Having been on the initiating end of one such call, I can also tell you that they can take a while.

Thus far the remedies for the spyware problem have largely been marketplace-based. People are advised to be careful, buy and install firewalls, and use spyware and adware removal software, some of which is available free. And now government is getting into the act.

Uncle Sam

Depending on your world view, you might think of government involvement as a potential problem, or you might think it's about time. I am of the latter persuasion.

I know there is a strong current in our political life that essentially says that we are free individuals and don't need government interference in our lives. That's fine as far as it goes, but in this case in particular, I think there is an important role for government -- a role that is as important as, and not much different from, putting police on the streets.

On the surface, spyware might look like a problem faced by individual computers -- sort of like getting a flat tire while driving on the highway. If that were the case, then fixing our own flats wouldn't be a problem. But what is really happening is that a sophisticated group of pirates is spreading nails on the cyber highway and giving everyone flats. Individuals are relatively powerless to thwart this kind of organized crime -- unless you think of lynching as an important precedent in the evolution of Western legal theory. So there is a role for government in this situation.

Right now there's a bill -- HR29, sponsored by Mary Bono (R-Calif.) -- working its way through Congress to eliminate spyware. I have read the bill, and it's more than pretty good. It covers the most egregious offenses committed by spyware and other forms of malware, such as surreptitiously capturing personal data and transmitting it back to a faceless "market research" firm. But the bill also makes it illegal to take over your browser and change your start page and lots of other things.

A Business Problem

So why aren't technology companies getting more involved in promoting this legislation? Why is it that companies like Dell need to see the bottom line implications before taking even a private enterprise action?

For technology companies, spyware is a crucial customer relationship management issue for the simple reason that spyware prevents customers from receiving the full benefits of their technology investments. Many companies are now offering anti-spyware software, which is a good thing to do. But they need to look beyond the engineering solutions and recognize that this is a business problem as much as a technology problem.

Spyware is first and foremost a business problem because it challenges the integrity of the Internet as a 21st-century business tool. This must be solved with a business solution. There are already too many flavors of protection, from firewalls to virus scanners to spyware removal programs and a good deal in between. These solutions will not solve the larger problem. Some will be more effective than others, and one result will be an Internet that is the equivalent of Swiss cheese.

But a more devastating result will be to stunt the growth of the Internet as a business tool. That's why HR29 is so important. It sets a standard for proper behavior on the Internet -- a standard that can be expanded and improved upon as successive generations of technologies and users come to rely more heavily on the information superhighway.

And that is precisely why technology companies -- and especially CRM companies -- ought to be tripping over themselves to endorse and support swift passage of this bill. It is the ultimate act of customer service that has long-term benefits for the health of our industries.

Rockbridge Global Village, Inc.
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Bloggers
 


Bloggers Fighting Astroturf
February 4, 2005
By John Borland

A traditional tactic in political campaigns is "astroturfing," or creating a seemingly grassroots group that in fact is backed by a political or corporate entity. Big phone companies have been particularly adept at using this tactic – one might even say they've abused it – over the years, as they've fought for policies that help their bottom lines.

The phone giants' latest battle is against cities or regions creating their own Wi-Fi or fiber optic broadband networks. There are serious case-specific questions about the idea, but the phone companies are bringing all their old tools to bear against the concept as a whole, including the publishing of critical studies and think tank reports.

Yesterday came one from the New Millennium Research Council, a group which eWeek wrote is actually owned and sponsored by Issue Dynamics, a Washington lobbying firm that represents many of the country's biggest telecommunications firms. This little fact is now bounding quickly around the blogosphere.

This is a promising development. Blogs are the real grassroots. Just as bloggers were able to be instrumental in exposing some of the flaws in CBS's national guard memo story, they may be devastatingly effective in exposing and undermining astroturf political campaigns on this and other issues.