Tag Archives: New Media

FTC Staff Report Recommends Ways to Improve Mobile Privacy Disclosures

On Friday, February 1, the Federal Trade Commission (FTC) released guidelines for mobile privacy.  The guidelines target key players in the growing mobile device industry, including Apple, and Google, as well as mobile app developers, advertising networks and others.  Guideline recommendations included asking industry leaders to promote best practices and let consumers know immediately what apps will do with their personal information and let those consumers give their permission for that data to be collected and used.    It was also recommended that Privacy Policies set in place by App Developers should be easier to understand and give consumers a clear sense of how their information will be used.  A “do not track” system has also been recommended.

 “The mobile world is expanding and innovating at breathtaking speed, allowing consumers to do things that would have been hard to imagine only a few years ago,” said FTC Chairman Jon Leibowitz.  “These best practices will help to safeguard consumer privacy and build trust in the mobile marketplace, ensuring that the market can continue to thrive.”

 To access the full set of FTC recommendations, click here.

 For more information about our Internet, New Media & Entertainment Practice, please contact Greg Akselrud at (818) 444-4503 or gakselrud@stubbsalderton.com

FacebookTwitterGoogle+LinkedInEmail

3 Questions – with Greg Akselrud

Greg Akselrud

Q.       I want to run a sweepstakes, why are there so many restrictions?

A.   Sweepstakes and contests offer companies a relatively inexpensive, but effective, way to market their products and services.  However, state laws have been passed to, among other things, prevent companies from operating an illegal lottery (entry into a random drawing for consideration) and to prevent false advertising.  As such, each state has statutes addressing sweepstakes/contests and advertising requirements.

Q.     What is the difference between a sweepstakes and a contest?

A.   A sweepstakes, like a lottery, is a random drawing.  The key difference, however, in operating a sweepstakes (and avoiding the operation of an illegal lottery) is consideration. To properly run a sweepstakes, a company must eliminate consideration from any entry requirement.  As such, a company must provide a free form of entry – at least as an alternative.  A contest is essentially a skill-based game or competition.   The ability to win a contest is not by random drawing, like in a sweepstakes, but is rather based on skill-based judging criteria set forth in advance.

Q.     Do I have to include all the fine print?

A.   An essential part of operating any sweepstakes or contest is to have a proper set of official rules.  These rules are designed to address the many state by state regulations of sweepstakes and contests (and advertising issues).  They also clearly set forth key information – such as, among other things, the fact that no purchase is necessary to enter or win, the method of entry (and collection of personal information), the eligibility requirements, the period of time that the promotion is offered, the manner in which winners are selected, and information about prizes and their value.  Of course, the official rules also address some of the key legal issues – like obtaining rights to use the winner’s name once they win, limitations of liability, and dispute resolution.  Certain states have registration and bonding requirements so it is also important to address whether residents of those states should be eligible (and if so, whether the company is complying with those requirements).  Also, if a promotion is intended to be international, countries regulate sweepstakes and contests differently, which will of course affect what is stated in the official rules.

Greg AkselrudGreg Akselrud is a founder and partner of the Firm. He chair’s the Firm’s Internet, New Media and Entertainment practice group. Greg advises a wide range of public and private clients across a number of industries, including companies in the entertainment, Internet, technology, and apparel industries. Greg’s practice involves providing advice in connection with general corporate matters (including company formation, stock incentive plans, executive employment agreements, and various commercial and business contracts), venture capital and angel financings, mergers and acquisitions (including public reverse mergers), private equity and debt securities offerings, public offerings, federal and state securities law reporting requirements, intellectual property strategic counseling, Internet and e-commerce matters, and entertainment, content and digital media transactional matters.

Do you have a question for one of our attorneys?  Send your questions to hhubbeling@stubbsalderton.com to be featured in future 3 Questions columns.

FacebookTwitterGoogle+LinkedInEmail

Evolution Media Growth Partners Announces Investment in SAM Client Sleepy Giant Entertainment Inc.

Evolution Media Growth Partners, a joint venture between TPG Capital and Evolution Media Capital LLC, has announced its investment in three young media and entertainment companies, one of which includes SAM client,  online gaming company Sleepy Giant Entertainment Inc.  To read the full Bloomberg press release, click here.

FacebookTwitterGoogle+LinkedInEmail

Mogreet Launches Powerful APIs for Video, Image, and Audio MMS, SMS and Content Transcoding

 

Stubbs Alderton & Markiles, LLP client Mogreet, Inc., the leading SMS and MMS text messaging platform, announced today the launch of Mogreet’s mobile API services.  To read the full press release click here.

About Mogreet
Founded in 2006, Mogreet is the leading text messaging platform for the delivery of rich media and video to mobile devices. The company works with leading retail, entertainment, media and consumer products marketers as well as developers through the Mogreet API portal. Currently supported in over 175 countries, Mogreet’s platform reaches 2 billion consumers globally. The company has raised $14.1 million in venture capital from top venture capital firms. Mogreet is headquartered in Venice, California.

For more information about Stubbs Alderton’s mobile application specialty, contact Greg Akselrud at gakselrud@stubbsalderton.com or (818) 444-4504.

FacebookTwitterGoogle+LinkedInEmail

Co-Marketing or Joint Venture? When Should I Form That JV?

 

Greg Akselrud, Chair of the Internet, New Media & Entertainment Practice Group at Stubbs Alderton & Markiles, LLP discusses the difference between co-marketing and a joint venture, and the benefits and risks involved with each.

______________________________________

Co-marketing arrangements present a wealth of opportunities to expand your business. They allow business owners to expand distribution and revenue while leveraging another’s strengths, all while providing a better offering to users.  But at a certain point, a longer term initiative presents itself – the joint venture.  Joint ventures offer many advantages to traditional co-marketing arrangements, but also bring significant disadvantages and risks.

What is co-marketing?

Co-marketing takes many forms.  When online, co-marketing can mean two parties marketing each other’s products and services, co-branding a single product or service under a combined brand or using each party’s trademarks, and bundling two pieces of software.  It is usually documented in the form of an agreement between the two parties.

What is a joint venture?

A joint venture is a form of partnership (not necessarily in the legal sense) where two or more parties agree to undertake a business, or to operate a product or service, or in the co-marketing sense, to co-market their respective products and services.  A joint venture can be documented by virtue of an agreement between parties, a more formal formation of a partnership or the formation of a limited liability company or other entity the parties determine to use to undertake the business, or to operate or co-market one or more products or services.  For example, Hulu is a joint venture of NBC, Fox and Disney, and Vevo is a joint venture of Sony Music, Universal Music and Abu Dhabi Media (to create a Hulu for music videos!).

What are some of the key differences?

  • Time – While co-marketing arrangements can be long-term commitments, they are more often structured as shorter term agreements (1-3 years) – so that the parties can facilitate key initiatives but also have an exit strategy if things are not working out.  Joint ventures, on the other hand, are by their very nature long-term arrangements.  They are an extended partnership between or among parties.
  • Commitment – Co-marketing arrangements require both parties to commit to marketing and distribution initiatives (both of which require financial commitments).  Joint ventures, however, often take a further step in that they require one or more of the joint venture partners to commit real capital to form and operate the business, obtain office space for operations, and hire employees (among other things).
  • Management – Co-marketing arrangements have both parties contributing time and resources, but it is typically through their respective company’s efforts.  A joint venture often appoints management from one or all of the joint venturers, or independent management in many cases.  Sometimes the parties appoint a board comprising of all joint venturers, while only one party manages the enterprise.  In all events, through such a combined management structure, among other factors, the joint venture takes on a life of its own.
  • Building Value – Co-marketing arrangements go far in building individual value for both parties.  With a joint venture, the parties can actually build value, equity value or otherwise, in a third party – the joint venture.

What are some of the advantages of forming a joint venture vs entering into a co-marketing agreement?

  • Additional Resources – In many cases, joint ventures require one or more parties to invest real capital to form the venture and keep it going, including funding its initial losses from operations.  Sharing these obligations allows a smaller joint venturer to have some of its operational costs subsidized by its larger partner.  This often happens in situations when a larger, well-capitalized partner desires to get in business with the smaller partner that has the “next best thing”.  In a co-marketing situation, the larger partner may be undertaking activities that ultimately help the smaller partner thrive (such as distribution or marketing of its software or website), but they may not be contributing real capital.
  • Market Entry – In many territories outside the United States, it is extraordinarily difficult to enter a market without venturing with a local partner.  In those cases, a co-marketing relationship may not work for legal reasons, or may not provide adequate incentive for the local partner to be involved.  But once achieved, a territory-based joint venture can accomplish international market expansion that would have been otherwise unachievable or at a minimum, cost prohibitive. Territories in Asia (e.g., China) are typical for these forms of joint ventures.
  • Equity Value – As mentioned above, a successful joint venture can not only have value as a stand-alone enterprise, but can also increase the value of its individual partners.  Additionally, when a joint venture is highly reliant on one of the partners and thereby mostly building value in that partner, there may be opportunities for the others to tie their equity in the joint venture to equity in the key venture partner (e.g. “put” rights for their JV equity in exchange for securities of the key partner) – thereby ensuring that a successful liquidity event for the key partner is also beneficial to the other joint venturers.  A co-marketing arrangement will not have such an arrangement in most cases.

What are some of the disadvantages of forming a joint venture vs. entering into a co-marketing agreement?

  • Loss of Control – As described above, one of the key features of a JV is the role of management, and the necessary participation in management by all joint venturers.  The result of joint management is in many cases a loss of control.  Whereas parties can direct their own activities in co-branding arrangements, subject only to their contractual obligations, in a JV, each partner must take into consideration the views of the others, and in some cases, one partner is dependent on the other (for financial support or otherwise).
  • Unwinding the JV is Difficult – While co-branding arrangements are short term in many cases, joint ventures are often times permanent.  The JV entails the conscious decision of joint venturers to enter a market or launch a product or service together – hand in hand.  If it doesn’t work out, divorce is often messy. Joint ventures necessarily have to consider what happens to office space and users, as an example, and also to other assets and liabilities (including to other joint venturers).  This unwind is complicated and often times expensive to the extent that a buy-out must be accomplished (of one JV partner by another).
  • No Exit Strategy (sometimes) – In some cases, JV partners find themselves stuck within the joint venture.  In the absence of outright breach, they may not have contemplated an exit from the JV under all circumstances.  Accordingly, even if successful, they can end up stuck.  For example, in the absence of an ability to terminate on the change of control of another joint venturer, or to participate in that venturer’s transaction, the other partners may find themselves stuck in a JV with a partner they did not expect or desire (e.g., the acquirer of the other joint venturer).

Ultimately, while their formation is more complicated than the standard co-marketing arrangement, and requires significant analysis, joint ventures can bring extraordinary value to the individual joint venture partners – particularly in co-marketing-focused arrangements – and are worth exploring.

 ________________

 For more information regarding our Internet, New Media & Entertainment Practice Group, please contact Greg Akselrud at gakselrud@stubbsalderton.com or follow him on  Twitter @gregakselrud.

 

FacebookTwitterGoogle+LinkedInEmail

Greg Akselrud to be Speaker at Digital Hollywood Fall – October 15-18, 2012

Greg Akselrud, Partner and Chair of the Internet, New Media & Entertainment Practice Group at Stubbs Alderton & Markiles, LLP will be a featured speaker on the topic of “Funding Strategy, Deal Flow & Crowdfunding: A Primer for Content and Technology Companies” at the Fall 2012 Digital Hollywood on October 15-18, 2012 in Marina del Rey, CA.

For more information about Digital Hollywood and to register, click here.

For more information about our Internet, New Media & Entertainment Practice Group, contact Greg Akselrud at (818) 444-4503, gakselrud@stubbsalderton.com or follow him on Twitter: @gregakselrud.

FacebookTwitterGoogle+LinkedInEmail

A Lucrative Partnership – Expanding Your Online Business Through Co-Marketing

Greg Akselrud, chair of the Internet, New Media & Entertainment Practice Group at Stubbs Alderton & Markiles, LLP discusses why online businesses need to pursue co-marketing strategies and the key business and legal issues to consider in any co-marketing deal.

_____________

There are many opportunities to expand your online business. Seeking co-marketing relationships is one opportunity you cannot afford to miss. Co-marketing costs less than many forms of advertising and can get you the desired traffic or distribution you need to grow your website or software

What is co-marketing?
In today’s online world, co-marketing takes on a variety of forms, including true ‘co-marketing’ (where two parties agree to market each other’s Web site or software), ‘co-branding’ (where two parties make available a Web site or software displaying both of their brands or logos), or in the pure software case, ‘bundling’ (where one or both parties ‘bundles’ one piece of software with another, giving users the opportunity to download a second piece of software when they decide to download the first). For example, the only way to log in to Foxsports.com is through an MSN account and, conversely, the sports pages on MSN take you to Foxsports.com. Also, you may have noticed that you get an offer to download the Google Toolbar when you download other software. Both of these cases are classic co-marketing relationships. The possibilities for co-marketing are endless, and are not limited to online products. Often, there are tie-ins with the brick-and-mortar world. Thus you see Oprah quite visibly using Skype as her video conferencing tool.

What are the main objectives for co-marketing, and who is an ideal partner?
The main objectives in any co-marketing deal are to build awareness of your brand, drive traffic to your Web site, increase the distribution of your software, generate additional direct or incremental revenue, and/or complement your product or service with your partner’s offering.

The best co-marketing partner is one that satisfies your co-marketing objectives and, as a result of natural synergies, operates a Web site, service or software that is complemented by the product or service you provide.

What are the key business issues in a co-marketing deal?
If your business already has traffic, downloads and revenue, then an attractive co-marketing partner would offer additional products or services that complement your own successful business. On the other hand, if you are trying to gain traffic, increase distribution or grow revenue, then you would seek a partner with established traffic and/or distribution that might see synergy in your product offering. In either case, the following are some of the key business issues (and some suggested approaches).

Integration: The level of customization is important, and you should try to have your own custom tab or section on your co-marketing partner’s service, with a shared log-in process, and the right to keep or, at a minimum, access user data; and if the transaction is a bundled download, insist on the right to have your software included in the install flow, as opposed to through a separate link on a CD or folder (the difference is usually substantial in terms of user downloads). In addition, in the install flow, ensure that your software will be presented on an ‘opt-out basis’ (where the user must un-check a box to avoid getting your software) rather than an ‘opt-in basis’ (where the user must affirmatively check a box to get your software — again, the difference is usually substantial in terms of user downloads).

Branding: You want the co-marketing relationship to present a product or service that is co-branded with both parties’ brands, particularly where you are looking for enhanced value from the partner’s brand.

Promotion: Avoid passive obligations to promote your brand (Web site and download links on a partner page), and insist on active obligations (to appear ‘above the fold’ on the home page for specified periods of time, measurable distribution obligations in connection with software updates, or joint press releases or other PR obligations).

Revenue sharing: If there is revenue to share, understand who collects and what are their reporting and payment obligations.

Other terms: Define clearly if this is a long-term relationship or one designed to ‘test the waters,’ specify limited territories or worldwide, and determine whether one or both parties are to be the exclusive partner for the given product or service offered and/or whether one party should be prevented from doing business with competitors of the other.

Should I worry about the legal ‘boilerplate’?
The legal ‘boilerplate’ provisions are just as critical to the business relationship as the business terms. They help the parties determine their level of business risk and aggregate liability, and accordingly shape how each party works with the other. The following are some of the key legal provisions.

Representations and warranties: These provide information that may be important to understanding your proposed co-marketing partner and its products/services (i.e., does their Web site/software infringe a third party’s IP).

Limitations of liability: Just like they sound, these provisions limit your liability and likely that of your co-marketing partner, so analyzing what should be limited depends on the individual business deal.

Indemnification: These require you to repay or defend lawsuits against the other party in certain events, and shape your total liability (including for third-party claims).

As is the case in any legal transaction, be sure to seek the advice of experienced lawyers to make sure your co-marketing deal achieves your desired objectives.

For more information regarding our Internet, New Media & Entertainment Practice Group, please contact Greg Akselrud at gakselrud@stubbsalderton.com or follow him on  Twitter @gregakselrud

FacebookTwitterGoogle+LinkedInEmail