CBS changes channels

The CBS broadcast network is starting to behave much more like its sister premium cable network, Showtime.

Spotify revenue up, profits down

The good news, for investors at least, is that Spotify managed to convert free users to paid users at an impressive rate. According to CEO Daniel Ek, 20 percent of people who use the service regularly end up paying for a subscription, a much higher conversion rate than for most freemium services.

Today in Connected Consumer

Based on earnings reports this week from Comcast, Time Warner Cable, DirecTV and Dish Network, it appears some 400,000 Americans cut the cord for one reason or another during the second quarter, Reuters reports. That number is likely to grow after Cablevision and Cox report next week. The data set off the usual debate over whether the losses represent a cyclical downturn due to the tough economy or a secular trend. At AllThingsD, Peter Kafka even disputes that the data represent a trend at all, noting normal seasonal variations in subscriber churn could explain the numbers. The really interesting twist in the data this time around, though, is that Comcast, TWC and DirecTV all reported significant increases in net profits for the quarter, thanks to increased broadband subscriptions and increased ARPU. So maybe the debate over the trend line is moot?

Today in Connected Consumer

The unraveling of the Japanese consumer electronics industry continues apace. The flood of red ink at Sony grew worse in its fiscal first-quarter results posted Thursday. Some of the loss was attributed to restructuring costs and an unfavorable exchange rate, but Sony also suffered a major hit to its home entertainment and sound division, which includes its TV unit. Even its once-thriving game unit took a hit. That was followed by equally grim news from Sharp Electronics, which posted a sharply wider loss in the quarter and said it plans to lay off 5,000 workers. Both Sony and Sharp also slashed their forecasts for the rest of the year. The mighty truly have fallen.

Today in Connected Consumer

The Facebook-Zynga relationship has become deeply unhealthy. Shares of Zynga were falling through the floor in mid-morning trading today after it posted disastrous second-quarter earnings Wednesday. The online game developer was hit hard by tweaks Facebook made to its platform that favor newer games over Zynga’s established brands like FarmVille and CityVille. Now, Zynga is returning the favor by turning into a significant drag on Facebook shares ahead of the social network’s first quarterly earnings report as a public company later today. Time for couples’ therapy?

Today in Connected Consumer

Yesterday was a big day for earnings in the connected consumer space, with both Apple and Netflix reporting. Today is a big day for selling their shares. Apple was off nearly 5 percent in midday trading after it reported slower than expected iPhone sales. In this case, Apple seems to be partly a victim of the rumor mill that usually serves it well. With everyone expecting the iPhone 5 later this year, with its dramatically larger screen, the iPhone 4 suddenly looks outdated. As for Netflix, its shares were down a vertiginous 25 percent in midday trading, despite swinging to a larger profit in the second quarter than analysts had projected. Subscriber growth slowed slightly, however, and the company warned that the upcoming Olympics could take a bite of subscriber growth for the third quarter as well. It also reiterated its plans to plow future profits into international expansion, which will keep a lid on GAAP earnings going forward. Lookout below.

Today in Connected Consumer

Today is a big day on the connected consumer earnings front, with Apple and Netflix set report second quarter earnings after market close. For a change, analysts’ expectations for Apple vary widely, with non-bank analysts generally more bullish than their in-house peers. As for Netflix, analysts are cautiously optimistic, with most seeing a swing to profit after the first quarter’s loss. But BTIG Research analyst Rich Greenfield has a long list of questions for Netflix management anyway.

Today in Connected Consumer

Unless you were an investor, there hasn’t been much reason to tune into Yahoo earnings calls recently. But today’s Q2 call at 5:00pm EDT will no doubt attract a (virtual) crowd hoping to hear something about how new CEO Marissa Mayer plans to turn the struggling web brand around. Mayer will have been on the job less than a day by the time of the call, of course, so odds are she’ll keep it short and sweet, if she says anything at all. While most of the reviews in the popular press have been positive, analysts are taking a wait-and-see approach to the news for now.

Today in Connected Consumer

I will be taking a few days off after the 4th, so posting will be light the rest of this week. Meanwhile, Microsoft must be hoping a lot of people will be out of the office this week, or at least not paying much attention. After garnishing some good notices for its SmartGlass and Surface announcements, Redmond let the bad news slip this week: a $6.2 billion write-off of aQuantitative, the ad-placement agency it bought in 2007 in a failed bid to compete with Google and DoubleClick in placing display ads online.  The write-down will wipe out Microsoft’s profit for its fiscal fourth quarter ended June 30. The company is also about to get hit by an expose in Vanity Fair highlighting the gory details on why Microsoft for so long was institutionally incapable of competing with the likes of Apple and Google. Have a safe and happy Fourth of July.

Today in Connected Consumer

Shares of Amazon went up like a rocket in after-market trading Thursday following the company’s unexpectedly strong first quarter earnings report. And they kept going following the opening bell Friday. As of mid-morning trading the shares were up more than 12 percent, as investors applauded Amazon’s biggest year-on-year increase in operating profit in 10 years. Much of that uptick can be attributed to the increasing share of Amazon’s sales coming from digital products, including e-books, movies, music and apps, which cost nothing to ship. The company saw a 19 percent increase in media sales in the quarter and nine of the top 10 selling items at Amazon.com are now digital. The increase in digital sales is also a testament to the success so far of Amazon’s Kindle Fire strategy. According to the latest comScore data, the Kindle Fire has captured more than half the Android tablet market.