Week in review: News Corp. and fiestas

(from the TC+M web site on Friday if you missed it...)

It's been another good week for big fish eating up smaller fish in the media world. This week that seemed to largely translate to big media giants consolidating smaller social media plays into their strategies.

On the same day that CBS snapped up the hipster online radio community last.fm for a relatively modest sum of $280m,, News Corp.'s online division, Fox Interactive, itself bought up two more social networking sites: the online photo organising site Photobucket and Flektor, a site that lets users create mashups, slide shows and other presentations of their user-generated content.

The two unknown-value deals will give News Corp.'s social networking sites, namely MySpace, another way of trying to monetise its still-growing user base.

Both sites are already popular with MySpace users who use them to incorporate graphics on their pages, so in a sense it was a matter of solidifying a relationship already in place.

It will mean that Fox will be able to embed the functionality of Photobucket and Flektor directly into its own site, which will make the experience easier for users.

But more importantly it helps the company consolidate any traffic that might be passing through Photobucket's and Flektor's services for its own financial gain.

This in fact was a touchy subject between Photobucket and MySpace only weeks earlier. MySpace had started blocking Photobucket usage when it said the image sharing site was using its service to encourage users to run ad-supported slideshows on their pages.

Now that MySpace owns the two sites, any potential ad revenue gained in such a way will be theirs to keep.

According to Fox, the two products will continue to operate as standalone entities and will still be able to be used on other sites like YouTube and Facebook.

(For a closer look at the Last.fm deal with CBS, you can read a blog entry I wrote on the day of the deal. There will also be a longer analysis, including an interview with one of the Last.fm founders, in the upcoming monthly issue of TC+M, out in two weeks).

Burritos in China
Saw an interesting item on the wires today about how Grupo Televisa, the largest broadcaster in Mexico, has done a deal with the Chinese government to export its reality TV shows and soap operas to the Mainland. Chinese broadcasters, like broadcasters in many other parts of the world, already dub Mexican programmes for their market, but this deal will let Chinese producers recreate the various shows for their own market.

The terms of the deal were not disclosed. But what stands out about this to me is that despite the huge potential of the Chinese market, there seems to be a distinct dearth of content to fill the airwaves.

Back in Mexico, the Chinese government broadcaster CCTV will be providing a feed of its channel to Grupo Televisa, who will deliver it in its domestic market dubbed.

The two countries of China and Mexico may have more in common than previously thought, in addition to their tastes for telenovelas and raucous variety shows with mariachi bands. This week, the high court in Mexico struck down a ruling that effectively lets the country's two dominant TV companies, Grupo Televisa (70% of the market) and TV Azteca (30% of the market), to continue to stay on top. In fact, the CCTV deal shows that today there is an opening for smaller new channels to emerge, but it takes a deal with a big player to make it happen. Perhaps in the future you won't need a tie-up with one of the big-two to do this.

Last.fm gets snapped up by CBS

When Google bought video sharing site YouTube for $1.65bn in 2006, it triggered a lot of media companies into action. Among them, the longtime U.S. broadcaster and television producer CBS set out to position itself as a forward-thinking member of the digital media vanguard.

“We don’t want to buy YouTube, we want to buy the next YouTube,” said Leslie Moonves, the chief executive of cross-media broadcaster CBS, not long after the deal.

Today CBS made a little move toward filling in Moonves' strategy when it announced it would pay $280m for online user-generated radio site Last.fm.

The London-based company has been quietly building up a loyal user base since 2002. When I recently spoke to one of the founders, Martin Stiksel, he told me that on average the site has 20 million active users every month and is 'generating substantial revenue' from several income streams, from amazon music retailing to ticket sales.

There's some interesting synergies between CBS and Last.fm. I'll be curious to see if the two companies them. For one, CBS has relaunched its own music label, CBS Records, which had originally been sold to Sony. And while Last.fm is in many ways a product of the web 2.0 juggernaut, it's also run a little like a broadcaster: it may have 20m active users, but it only has some 5.5 million registered visitors. That means that like CBS's TV channels, it banks on advertising to a critical mass for revenue generation.

I have to say, though, that as a long-time fan of Last.fm, one of the things I've always loved about it is its quirky, quiet approach to offering music: the exact opposite of many radio stations, and definitely the opposite of the 'big media' kind of experience offered by other online radio sites like Yahoo's.

It's also been frighteningly good at sussing out my tastes (if at times I seem to get into jags where all I get are songs by The Decemberists).

For now the management will remain in place and all they can talk about is how the deal will give them the money to do all the things they've always wanted to do. I'll look forward to seeing if CBS really lets Last.fm keep control of the jukebox.