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Tuesday, September 23, 2014

Digital Continues Its Growth Over Traditional Media

Advertising dollars are not limitless.  Total dollars spent may grow every year, but with choice comes more allocation.  And the more that new media demonstrates its value to reach and convey marketing messages, the more that dollars will move out of one pocket into another. 

According to ZenithOptimedia, digital will see an increase in media share while the big losers will be TV and print media.  The rapid increase in digital, due in part by its ability to target and segment by actual user as opposed to household, offers greater cost efficiency and effectiveness.  Its easy to see why. 

With a user having more than one digital device, a smartphone and a tablet, perhaps also a laptop or desktop, they are reachable on a one to one level.  Television may know that the household owns a TV set, or two or even three, but they don't know for sure who in the household is watching the show.  is it the father, the mother, the daughter or son, the grandparent, or combination of any or all.  And while television advertising can be effective in reaching an audience, a table can more accurately count the time spent, the click, the purchase, and more.  And the better the experience gets, the more dollars that will keep flowing to digital ad budgets. 

Monday, September 22, 2014

Consumers Want the iPhone

Apple's latest iPhone incarnation, the iPhone 6 and 6 Plus, seems to have pleased its fans.  Already 10 million iPhones have been purchased and the phone has been out less than a week.  Also good news for Apple fans looking for more functionality, the operating system for it and older phones and iPads has been upgraded to iOS 8.  And while the Apple Watch has been announced, it will not be ready for retail till sometime next year.

So with all these new phone orders, I would love to hear how the iTunes and App store are doing.  Were these new phones sold to existing Apple customers, or did Apple gain new subscribers of their devices and new customers to their store.  I see their store as a money tree with easy opportunities to get larger revenue gains from customers needing content to feed their devices.  More phones, more tablets, more apps and downloads.  Add to that the new Apple Pay business, and Apple will profit from every transaction it services.  It is a business that keeps on giving and giving to Apple. 

Friday, September 19, 2014

Will Yahoo Buy AOL?

The stock market is abuzz this morning with the IPO of Alibaba and as a shareholder of the now public company, Yahoo could have some extra cash available.   Given the enormous rise in value the ROI on the investment could be a major assist in making a play on a company like AOL.  And for Yahoo, potential synergies of such an acquisition or merger could help both grow. 

MarketWatch refers to a note out of BGC Partners seeing upside in such a combination.  In terms of original content and video content syndication, economies of scale can help to further improve profit margins.  At the same time, television is not going away and those same dollars could be used instead to acquire a cable network and extend its digital expertise across another media platform.  A CNN-Yahoo merger perhaps or MSNBC-Yahoo stake?  And if not a news network, a general entertainment company like AMC Networks or Scripps might be appealing too.  The upsides are tremendous and Yahoo is no doubt considering all its options. 

Thursday, September 18, 2014

Couple Cable Nets To Rebrand

Despite the fragmentation that is occurring in the cable net universe, the idea of networks staying true to their niche identities continues to evaporate.  We have watched as highly focused networks continue to broaden their format to embrace as wide an audience as possible.  And the result is that it has become harder and harder to differentiate one network from another.  Original programming does try to enable differentiation but overall the goal is to become more general entertainment to the masses. 

The latest round of branding goes to The Hub, a joint venture between Discovery and Hasbro.  The new network will be called Discovery Family (eerily familiar to ABC Family) and most likely going after the same demo.  The other network, TV Guide Network or TVGN will be rebranded as Pop, a broad entertainment net most likely reaching the same audience as TBS, USA, and others.  Will a new suit help these nets to drive more share of audience.  The pot is so fragmented now and with a leak in the boat as audiences embrace digital, total audience reach will be difficult. 

New Tech Announcements As Amazon Launches New Devices

The old joke goes, 'what is the secret to comedy'...

September has become crowded with tech announcements as Amazon makes its announcement one week after Apple.  And while Apple and Tim Cooke went splashy with a huge event, Amazon went PR with multiple upgrades including a low end tablet and a high end e-reader.  According to the Wall Street Journal, "Amazon extended some additional services to its new tablets, as well. Family Library will let users link their Amazon accounts to one another so they can share purchases of e-books, music, video and apps. And, as with the Fire phone, the retailer is offering unlimited cloud storage for photos taken with the new Fire tablets."

Certainly, Amazon is not afraid of Apple and the timing of this announcement may have been an attempt to divert attention off Apple and back to Amazon.  But as consumers start downloading their iOS 8 upgrade, their focus might be on all the new tricks the Apple operating system offers instead.  Amazon's hope is that they create their own buzz in time for the holiday buying rush.  And likely Samsung is waiting in the wings to make their more announcements too.  Clearly the timing of this Amazon announcement was strategic and the hope for Amazon is that it pays off with strong product reviews and high consumer interest. 

'Timing!'

Wednesday, September 17, 2014

Clear Channel Rebrands To Reflect Its New Direction

Turn on an iHeart radio station and you know quickly where you have landed.  We are reminded incessantly about its iHeart radio app and that is not a bad thing.  No longer are they a single 'Clear Channel', the iHeart tag is multi-media.  And unlike subscription services, the iHeart app is free.  To me, the heart symbolizes more personalization and more emotion.  And the radio stations deliver with big energy.  So now, the corporate name has rebranded to reflect a this new connection and multi-platform experience.

Headed by CEO Robert Pittman, former head of AOL, this rebranding reminds us that iHeart Inc. is more than just a radio station, they are digital as well as event focused.  Other than the corporate name change though, what else is changing.  While this announcement enables multiple press releases, tweets, and blogs, like this one, the rebrand simply puts another stamp on what iHeart Inc. has been doing for quite a while.  I'm more interested in what comes next.

With a focus that includes digital, shouldn't Pittman consider adding video to the list of businesses that they run.  Live events could be syndicated or sold as pay per view and video adds more dimension to their reach.  Just check out You Tube as others post video music performances from iHeart festivals.  I'm not suggesting Pittman buy a music cable network but consider developing a robust video offering to add another platform to their business model.  The iHeart Inc rebrand move is a good first step,but what's next.

  

Tuesday, September 16, 2014

Does Wireless Need Net Neutrality?

Net neutrality has been a hot topic.  While the FCC attempts to revise its rules, many are still unclear what it all means.  In essence, net neutrality for the internet means that all web sites would have equal access to consumers accessing them, whether the data is light use email or heavy use video streaming.  Netflix, leading the way with heavy usage, has made deals with cable companies to assure that it gets premiere broadband access.  And while they can afford it, many argue that lack of net neutrality favors big business at the expense of start up web companies.

But as net neutrality rules are being reworked, you would be surprise to hear that these rules have been strictly toward wired broadband connections.  The mobile space has been mainly unregulated in the broadband space.  According to the NY Times, that exemption is being reviewed.  "On Tuesday, the Federal Communications Commission will hold a round-table discussion to examine whether proposed net neutrality rules should cover mobile broadband."  With so many consumers accessing the web through their cellular connections verse a WIFI one, it is hard to believe that the two platforms were being treated differently. 

Technological change as wireless carriers have upgraded their systems has led to such a move. And again, according to the NY Times, "Now, with advanced LTE networks complete, a growing portion of consumers use mobile as their primary method of connecting to the Internet, meaning a wireless exemption would leave those consumers without net neutrality protection."  And as younger consumers cut the cord on cable connections, their cellular subscription becomes their primary communication, information, and entertainment portal."  If my children didn't have access to WIFI inside the house, they would definitely be using their cellular connection.  In fact, I sometimes check that their smartphones are still connected to the WIFI so that our cell bill doesn't get impacted.

Does wireless need net neutrality?  All broadband, whether wireless or wired, should be treated similarly.  While I oppose to much government regulation and prefer an open economy to manage supply and demand, broadband has become as essential a basic right as shelter, food, and the right to education.  I would prefer that the FCC spend more time lowering the barrier to entry to enable more companies to compete in the broadband space.  The rise of competition is the best means to assure consumers right to choose a source for their broadband connection. 

Monday, September 15, 2014

Should Amazon Buy Radio Shack

What business isn't Amazon into these days, from web retailer of a vast array of merchandise to streaming video platform to digital hardware maker.  And thanks to the web, their reach is limitless; wherever there is delivery, there is Amazon.  And Amazon scares many other retailers because they do it without the added costs of brick and mortar, rent, property taxes, utilities, that add to the costs of merchandise and causes retail prices to rise. 

But Amazon also knows that customers like to touch and test and taste before they price compare and buy and why not do it in an Amazon store.  So speculation comes that Radio Shack, close to bankruptcy, but nationwide with retail locations, might be an opportune acquisition to rebrand as an Amazon store.  According to Marketwatch, "it would enhance Seattle-based Amazon’s already robust focus on local, showcase more Amazon products and services, such as the Fire smartphone and Kindle, and enhance pickup and distribution, making for a more seamless transition between clicks and bricks."

While  the idea is sound, it raises the costs that have previously allowed Amazon to price its product lower than brick and mortar.  And is RadioShack the right choice?  Most of their stores have a small footprint making it difficult to display a lot of merchandise.  Would another larger retailer with bigger stores make more sense?  Could Barnes & Noble or Best Buy be a better target?  If the strategy is to enter the brick and mortar business, then Amazon should keep its options open. 

Friday, September 12, 2014

Is It Time To Throw Away The Newspaper?

Given the ease and immediacy of the tablet, the advantages of home delivery of the newspaper has shrunk.  But change is hard and I have enjoyed getting the paper delivered to the home every morning for a very long time.  I still remember back in school when our teacher wanted us to get the Wall Street Journal to best understand the market and the economy.  For those that love the morning paper and a good cup of coffee, it is endless joy to read "all the news that's fit to print". 

But over the last year, my home delivery has been sporadic.  Missed delivery, late delivery, previous day's paper delivery have all added up to a poor customer experience.  And each time that happens, I turn to the web or to the paper's corresponding app to get my news instead.  I have resigned myself to one last mistake before pulling the plug on home delivery of the newspaper.

What will I save? First, peace of mind that the newspaper will be automatically accessible in my iPad as I have become more comfortable reading the paper on a smaller electronic device.  Second, a cost savings that drives up the cost of a print edition higher than digital.  And third, less time wasted calling the newspaper to complain, getting a one-day credit, and arguing that its delivery service will cost them a subscriber.  I know I am not alone.

Funny, the paper that causes me the most angst is the NY Post.  My NY Times and Wall Street Journal print subscription both give me app access to their papers.  And I appreciate it.  My NY Post subscription does not give me access to their app.  And their website is difficult to navigate and limited in the articles posted to what is in the paper.   So one last mistake and I am making the switch.  And once I do, I will likely do the same with my other papers.  Perhaps I will keep the Sunday print edition of the NY Times, but the more comfortable I get with reading on the tablet and the less I have to deal with shoddy home delivery, the better I will be.