New Media Can Save The Magazine Industry

News Flash - people still read! People seek content and view it in ways that adapt to their lifestyle. In that regard, we've become a nation on the go, needing the latest information in the shortest amount of time. Why is traditional mail decreasing; because, email brings us communication faster. And now instant messaging becomes faster than email. The same holds true for print magazines. Consumers want their content at their fingertips and they want it now. Digital media can save the print media industry.

And perhaps the magazine industry is finally taking notice. "Some of the magazine industry’s biggest names are on the verge of forming a new company that would allow them to take the digital future into their own hands. The company would make up one of the biggest alliances among rival publishers ever formed in print media, with Time Inc., Condé Nast and Hearst all expected to join, houses that together publish more than 50 magazines, including The New Yorker, Vanity Fair, Vogue, Time, People, Sports Illustrated, Esquire and O, The Oprah Magazine."

There is leverage in aggregating resources, building out common platforms and striking deals. The rise of the smartphone, iPhone, Kindle, and Nook, should pave the way for new revenue streams. Initially, the industry should follow the Wall Street Journal route and offer a digital subscription with the print one. Heck even DVDs offer a digital copy with their disc.

After NBC-Comcast, Who Is The Next M&A Target

Whether Vivendi agrees to sell its stake to GE or not, the media industry is poised for even more merger and acquisition activity. So what will be the next announcement. Is News Corp and Time Warner interested in buying MGM? Is Direct TV about to merge with AT&T or Verizon? Or will they buy a Sirius instead? And what happens to Cablevision after it spins off its MSG unit? Will it sell off its cable nets or finally sell its NY cable systems to Time Warner?

There are also a number of other independent cable networks in need of some leverage. Which one of those could be next to be bought by a bigger fish - HGTV, Hallmark, or others?

Always fun to speculate, and the announcement always seems to surprise some. But in a maturing industry facing consolidation because of technological and other changes, growth through acquisition is no surprise at all. The question remains, who is next.

Will Vivendi Approve the Sale of NBC

When M&A activity takes place in the open, it certainly lets everyone show their hands. As Comcast and GE try to set the value for a deal, the third party, Vivendi gets to pull some leverage. And so this sale will not be easy as Vivendi plays a bit of hardball. "General Electric and Vivendi are at least $1bn apart in their valuation of the French group’s stake in NBC Universal, damping hopes of a quick resolution to a stand-off that is holding up Comcast’s planned bid for a majority stake in the US broadcast, cable and film group."

Does Vivendi need the money? Does it pay to wait and see. They certainly have the option each year to sell their piece of NBC; do they really need to sell when NBC's value is depressed for many reasons. "The annual window for exercising that option opened on Sunday and will close on December 10. " This fourth place network has purposely put Jay Leno on at 10 pm. Was it done in anticipation of depressing the value of Vivendi's stake. GE would maintain ownership. Perhaps they felt that once Vivendi was out, they could raise its value with better programming again and then sell its remaining share to Comcast at an even higher amount. Sneaky, if true.

if Vivendi is simply using this leverage to force a higher price, does it make more sense to go out as an IPO. "Under an agreement struck when Vivendi sold Universal Studios to the GE-controlled NBC in 2004, Vivendi can force an initial public offering of its stake unless GE offers a more attractive price." Would Comcast still buy up shares in an open market or does the price become unattractive to them? This soap opera drama could become the stuff that might soon air where Leno now sits. Let's call this the new "Dallas" and wait for the Ewings to make a play. Now that was good TV.

Cable Has Spent $935 Million On CableCards

Set top boxes are supposed to require cablecards so that they can make sure that they do indeed work. "s intended to improve the way CableCards work in third-party devices, by forcing cable operators to use the technology themselves." Yet I doubt that if you ask a consumer what a cablecard looks like, they could tell you or show you where it is in their cable box. And ask a consumer if they have seen an ad talking about cablecards, and the answer will be no. Cablecards have yet to make an impact in the market. In fact, try to get a cablecard, say for a Tivo HD device, from your cable company and you face more resistance than support. They will remind you, that the card won't enable VOD and other interactive features that the set top box offers.

And truthfully, aren't we beyond the need for cards to verify third party boxes. Can't the consumer electronic industry with cable come up with algorithms that can insure that there is both security and functionality. In my estimation, cablecards are a joke, a delay tactic that has yet to make an impact in third party devices.

TVs are being equipped to get broadband connectivity directly to provide interactivity. Once connected, TV sets and game consoles are getting content without cable. Just yesterday, Sony announced their new agreement with Netflix. "Users can now access the DVD rental company's Watch Instantly catalogue on Sony BRAVIA TV W5100, Z5100, XBR9, and XBR10 series in 40-inch, 46-inch and 52-inch screen sizes; the Sony N460 Network Blu-ray Disc Player; and via Sony's BRAVIA Internet video link module." If you can't work with the cable industry, work around them. Who needs a cablecard? Truthfully, the cable industry cause they are risking their subscribers defection from premium channels, VOD, and perhaps even basic cable!

Karmazin Sticking with Sirius; Not Considering NBC-Comcast

Why would Mel Karmazin ever think of leaving his number one spot for working under another back inside cable. Already having that experience with Viacom, why expect that it will be any different at a proposed NBC-Comcast company. Well, to squash those rumors, Mel addressed them recently. "Speaking Monday to Neil Cavuto on Fox Business Network, Sirius XM CEO Mel Karmazin said he's got no intention of leaving the satellite radio company." Frankly, I was a little surprised to hear that it would be a possibility. Sirius has an opportunity to be so much more. Rather, Mel should stay close with John Malone and consider heading a merger of Direct TV and Sirius. That could provide greater synergy and give Mel a bigger company to run.

Time Warner To Spin Off AOL Dec. 9

According to Time Warner, content and distribution don't mix. There is no synergy and no gain to try to build out a vertical business that both creates content and distributes on a cable or web platform. First came the separation of the cable business from networks and studios and in a few weeks the web. On December 9, AOL will no longer be a Time Warner company. "AOL common stock will begin trading on the New York Stock Exchange Dec. 10 under the symbol 'AOL.' On Dec. 9, Time Warner shareholders of record as of Nov. 27 will receive one share of AOL stock for every 11 shares of Time Warner stock they own."

It was AOL that many years ago actually purchased Time Warner. But the parent soon became the child and now the orphan to the business. As broadband overtake dial up, AOL lost subscribers. It switched from pay to free and built up unique branded content to keep users engaged with their site. But it could never reach its former profitable glory and Time Warner saw AOL as its albatross.

To be fair, Time Warner didn't do much to engage AOL either. At the time it was purchased, it had its own broadband service, Roadrunner. Rather than combine the entities, it allowed them to compete with each other with its own customer base. AOL lost then and AOL lost now.

For stockholders of AOL, the question will be whether to hold onto these new shares or trade them while they still have value. Can AOL survive as a standalone entity? For Time Warner, the answer may simply be, "who cares."

Twitter usage falls for second month

Is Twitter in trouble? Are users less enthralled with the service? Does this decline in usage indicate a trend? Certainly the numbers may not paint a true picture. "The number of Americans using Twitter dropped 8 percent in October from September, marking the second monthly decline for the social-networking site this year, according to research firm ComScore Inc." Twitter is being incorporated into a number of other sites, Facebook, Linked In, etc.; are they being counted, too? I am not a fan of Twitter but I didn't expect the Twitter train to fall off the tracks that fast. Still, I find myself less glued to a screen with Twitter updates. In the meantime, let's just keep watching the activity to see if this decline continues into month 3.

Cable Basic Subscribers Continue to Decline

Quarter after quarter, basic cable subscription continues to drop. While cable continues to sell more services to is customers, their core base is declining. And where are they headed? Well, with basic subs are leaving cable every quarter, telco and satellite basic subs are increasing.

Eventually, that declining base will limit who can be upsold; cable is losing its base and those are the folks that buy high speed and wireline services. Its time to start differentiating cable from its competitors; better converter boxes and top service. Otherwise, cable will keep bleeding subs and find itself losing revenue in as prices drop to match competitive pressures.

Blockbuster's loss widens in Q3

Blockbuster is certainly having its issues. With competition from cable's on demand platform, Netflix, Redbox, and other online sources, consumers feel less compelled to go to a big box store to rent movies. And so the financial news released from them should come at no surprise. "Blockbuster said today that its third-quarter loss widened from a year earlier, as the largest U.S. movie-rental chain closed stores, saw a 14% drop in same-store sales and conserved cash by cutting advertising costs in preparation to refinance debt." And while cost cutting can slow down the bleeding, the bigger issue will be how to get more consumers back into their stores to rent from them.

Among the ideas, kiosks similar to Redbox, that bring the movies to other retail outlets in an easier to touch strategy. Another is to emulate Netflix and its online approach to extend the value of the relationship with the consumer. All me too, follower strategies, that show little of Blockbusters leadership potential. Lastly, they will expand their inventory by renting and selling video games as well. Per the report, video games represents their next big opportunity.

So if I were Game Stop, it is time for a preemptive stop. Currently they offer used games in addition to new ones. How about expanding that model with rentals. Consumers already see Game Stop as the destination for video games; this new venture would add revenue to their coffers while taking more wind out of Blockbuster's sails (sales, too).