850,000 Android Devices are Activated Every Day -- What Does That Mean to You?
-- More than 850,000 Android phones are now activated each day, according to a tweet on Monday by Google senior VP Andy Rubin, who heads the company's mobile division.
That 850,000-per-day figure is global and Rubin did not break out activations for any single country. However, other sources give us an idea of Android's overall market share and what consumers have been buying lately. Nielsen's latest figure for Android's share of U.S. smartphone purchases within the last three months is 51.7% for the fourth-quarter of 2011. Apple's iOS, the operating system for the iPhone, had a 37% share during that span but was nearly neck-and-neck with Android in December (thanks to the iPhone 4S's launch). Overall, Android has a commanding lead in U.S. smartphone market share. ComScore puts Android's share of the U.S. smartphone market at 47.3% in December, well ahead of Apple's 29.6% and BlackBerry's 16%.
The big question for Billboard readers is what, if anything, such a big number like 850,000 means to the music business. Unfortunately, there is no immediate answer other than an obvious one: a lot of people are using the Android platform and downloading apps built specifically for Android. App developers have already noted the popularity of Android and regularly build apps for the platform -- although Android is usually a second priority after iOS for music apps.
Whether or not Android's huge footprint will return meaningful revenue to record labels and music publishers is an unanswered question. We don't know if Android users will buy digital goods at the same rate iOS users have bought music, movies, TV show and books. We don't know if Google will be able to leverage its purchase of Motorola to create an ecosystem in which consumers will spend freely, although Rubin's statement that a "firewall" exists between Android and Motorola hints Motorola won't get any special treatment at the expense of its competitors. And we don't know how successful Google will be in its efforts to create a multi-screen entertainment system where people can stream content on any kind of device.
But we do know a few things that suggest Android owners aren't the big spenders Apple owners are. For example, we know that an iOS app delivers four times the revenue as the same app for Android. According to Flurry, this discrepancy can be attributed to a lack of payment processing more than Android customers' readiness to pay. But we also know that Android owners are less likely than iOS owners to want to use their mobile phones as a credit card. Nielsen research has found that 30% of Android owners are extremely or very interested in mobile credit card payments compared to 41% of iPhone owners.
Google will need time to compete in entertainment. Android's massive mobile footprint, combined with the 187.4 million Americans who visited a Google site in January, according to comScore, certainly gives it a lot to work with. But that footprint won't translate into instant customers -- the three-month-old Google Music has yet to make a dent. Ad-supported streaming services such as YouTube, Vevo and Pandora could get value out of Android fairly quickly. But as far as purchases, we'll have to wait and see.
Sony Files Application With European Union
-- Sony filed a merger application related to its acquisition of EMI Music Publishing with the European Union on Monday, 10 days after Universal Music Group did the same -- with much greater fanfare -- for its acquisition of EMI's recorded music division. One reason Sony attracted less attention is because Sony Corporation of America owns just a 38% share in EMI Music Publishing.
The remainder is owned by the other parties in the investment group that acquired EMI's publishing division in November: the estate of Michael Jackson, Mubadala Development Company PJSC, GSO Capital Partners, Jynwel Capital and David Geffen. With a non-controlling stake in EMI Music Publishing, Sony's market share in music publishing is not eliciting warning sirens. Universal is in a different boat. The company's share of recorded music would dwarf each of the two remaining indies and the collective independents.
On his last day as Warner Music Group chairman, Edgar Bronfman Jr. said what has been on many executives' minds when he vowed to fight the merger "tooth and nail" at the Wall Street Journal's D: Dive Into Media conference in January. "I think it's dangerous," Bronfman said of Universal's post-merger market share, "I think it's problematic and I think it's got to be stopped."
( New York Times' Media Decoder)
Live Nation Shares Dive After Earnings Call
-- Live Nation shares dipped as much as 10% and finished down nearly 5% on Friday as investors reacted to the company's earnings release on Thursday. Shares of Live Nation closed at $10.50 on Thursday, then fell to as low as $9.45 on Friday before closing down $0.50 at $10.00. Shares fell just 1.4% to $9.86 on Monday.
The company's small net losses in the fourth quarter and the full calendar year were one reason for the decline in share price. The company's fourth-quarter net loss of $98.2 million was deeper than the net loss of $55.5 million expected by five analysts polled by Thomsom Reuters.
Friday's decline was probably a bit of a reaction to the cost of becoming a better technology company. Live Nation has thin margins but generates a great amount of cash ($203 million of free cash flow in 2011 and $165 million in 2010). It can ably cover its interest expense and is far from the money-losing company often depicted in the media. But the company's capital expenditures are growing as Ticketmaster rebuilds its platform, and that means less cash left over at the end of each period.
Innovation, the theme during Live Nation's earnings call, isn't always free. Investing in a rebuilding process stretches the time span during which a company can be judged. Gauging the effectiveness of Live Nation's LiveAnalytics and its investment in BigChampagne also demand a long time horizon. As a result, we won't know for a few years if Live Nation has become more valuable by becoming a smarter, more technologically adept company. We won't know if it has properly put together the various pieces and built a smooth-running machine.