Wednesday, November 25, 2015

TiVo Keeps Adding Subscribers

TiVo seems to be doing what other cable boxes cannot.  With a single box to manage all cable and OTT content to the television screen and mobile devices, customers seem to like their approach.  Their latest third quarter results have them gaining over 400,000 customers in the quarter through their cable partnerships and now have almost 6.5 million total customers.  According to Multichannel, its one of their strongest quarters to date.  With the release of their latest set top box Bolt and the start of the holiday season, the fourth quarter could continue to be strong for them.

Of course this is all happening as cord cutters continue to strike at the cable operator.  It seems that offering TiVo to their customers might be a good defensive strategy to keep customers from dropping cable.  Internal pressures might also worry TiVo with current CEO Tom Rogers leaving his post in February 2016.  How that might affect the future strategy of TiVo remains to be seen.  For now, TiVo is on track to exceed 7 million homes by early next year.

Monday, November 23, 2015

Adele Has A Distribution Strategy

Whether you care for her music or not, you still must admire Adele's business strategy with the release of her latest album, 25.  If the big money is in sales, then it makes sense not to rent out the music.  And that seems to be what a streaming strategy must feel like.  Like Taylor Swift, Adele has decided to limit her initial audience to a sale only strategy, from downloading tracks or the album to selling the physical CD.  For now, streaming subscription music services like Pandora, Spotify, or Apple Music are not allowed to play her latest music.  That means that fans must purchase and so far, the strategy has worked. 

In the first week, Adele has sold 2.5 million copies of her album.  With the holiday season just starting, the album is likely to continue to sell quite well.  It seems like a smart way to maximize revenues, using a windowing type strategy to create a high demand through a particular output platform.  And certainly, as sales begin to slow, the timing might become appropriate to add new platforms of distribution. 

Saturday, November 21, 2015

NY Times Virtual Reality Delivered To The Home

I admit it, I still like getting the paper editions of newspapers.  And while I also like reading breaking news on my iPad and iPhone, I most enjoy drinking that morning cup of coffee and reading the paper.  Of course, the more times the paper delivery is delayed, the more I find myself ready to pull the trigger on receiving the paper editions.

Still, the arrival of an extra gift has kept me a subscriber for a bit longer.  A couple of weeks ago, the NY Times was accompanied by a cardboard box, that when folded together, became a virtual reality machine.  Download the app and a few videos and place your smartphone into the cardboard constructed device.  Instantly you are transported into your own VR world, 360 degrees of video. Look up, look down, look left, look right and watch as the action unfurls.  When others come to the house, the device becomes one of much discussion.  It is a new toy.  We may not use it much, be we have continued to keep it on our coffee table.  At least for now it has not made it to the trash can.

What next steps does the NY Times have in store for us with this VR machine?  Will they send another with home delivery?  If anything, it did cause some buzz and for the print industry that is hard to come by. 

Wednesday, November 18, 2015

Comcast Says No To YES

It's that time of year again and by that I mean the time of year when cable contracts expire and the game of drops and accusations start to air.  To start the holidays, the regional sports network YES, owned by Fox and the Yankees, have been dropped by Comcast Cable as no renewal deal could be reached.  For customers in the NY, NJ, and CT region, almost 1 million customers, that means the loss of the Brooklyn Nets on television. 

According to reports, the contract has expired for some time but it has reached the tipping point today with the network dropping off the line-up.  For how long, who knows.  Like every other negotiation, it eventually will come back, whether in a day, a week, a month, or even after the start of the Yankees, it will come back on the air.  But in the meantime both sides lose.

Is it possible that the drop could be permanent?  Despite a small, but loud percentage of sports fans, sports networks are hard to drop forever.  They may have some of the highest, most expensive license fees of any basic network, but the passion for the programming is always there.  So watch as we get radio, newspaper, and TV ads telling us how bad the other side is in the negotiation.  Programming contracts are all about the money and nothing else.

Tuesday, November 17, 2015

As Streaming Music Grows, It Starts To Consolidate

The streaming music industry is transforming quickly.  Apple buys Beats and creates Apple Music, then closes Beats.  Jay Z buys Tidal to bring the art of the music to those with a passion for high fidelity.  And today we learn that Pandora plans to buy out Rdio.  Per reports, Rdio must first declare bankruptcy before Pandora can buy out all their assets and hopefully retain most of their subscribers.  I'm surprised that Apple was not mentioned as a possible suitor for Rdio, but such is the fast changing nature of this industry.

With Pandora and Spotify still the market leaders, one wonders if Apple sees an opportunity as a niche player in this market or a desire to buy out one of the top dogs.  And given the employee turnover at Tidal, one can wonder how much longer they will be in the mix.  As I wrote last week in my blog on free music, streaming subscription music services still have to compete with commercial radio, many that have created their own apps to provide an alternative choice.  If you don't mind the commercials, its not a bad alternative.  Heck, even Sirius, the paid car and streaming audio service has channels that include commercials too. 

As for Rdio, the ride was a short one.  You will be a footnote in the history of streaming music but not the only one as consolidation is likely to continue.  The pace of change may be quicker but it is the nature of a very quickly changing media landscape. 

Monday, November 16, 2015

The iPad Pro Goes Big

While Millennials seems to enjoy their smaller smartphone screens over a tablet, they like the larger size smartphones over the smaller screens.  So the introduction of the iPad Pro, a much larger size screen seems counter intuitive to the mass appeal audience.  Walt Mossberg, in his re/code review, doesn't see the iPad Pro as a replacement for the laptop.  I agree.  I believe the laptop is uniquely qualified to handle certain applications, and especially useful for student and business applications.

Still, I believe the iPad Pro can find a strong niche use in commercial and industrial applications.  The added value of the stylus may be appealing to some, although the shear size of the screen may be the most important feature.  Will the average consumer want to go big with the Pro?  We will have to watch the Christmas Holiday sales to see who might be purchasing the device. 

Thursday, November 12, 2015

Time Warner Wants A Piece Of Hulu

Time Warner wants another streaming business and that might include a piece of Hulu.  Per Deadline Hollywood, they are in early discussions to take a piece of the pie and join the Disney, Fox, NBC partnership.  But does it make sense?

I ask that question for a number of reasons.  First, they already own HBO Now and HBO Go and have a successful platform and subscription business that they control 100%.  Second, the idea of being a partial owner in Hulu will only add to the dysfunction of running the Hulu brand.  The old adage that "too many cooks spoil the broth" means that one more owner will further handcuff the strategic growth and tactical abilities of the Hulu brand to grow.  And third, that Time Warner's other cable content brands lack enough quality content to be anything more than long tail entertainment. 

Can an investment by Time Warner in the Hulu business draw a positive ROI?  I am sure the financial analysts are asking all the same questions in determining how to best improve revenue.  There is no guarantee of success.  Time Warner only needs to look internally at some of their failed networks like CNN SI, the Sports Illustrated Network.  I am sure there are other misses as well.  That is not to say an investment in digital doesn't make sense; but, wouldn't you rather have total control in your next business opportunity then a 25% position.

Wednesday, November 11, 2015

What's Wrong With Free Music

The rise in premium music services shouldn't surprise me, but it does.  I grew up on AM and FM radio and enjoyed listening to everything from talk to news, pop to Dr. Demento.  In exchange for free music, I also heard ads that ultimately paid for all those stations to air.  Today, a number of these same stations offer commercial-free blocks to entice us to stay connected, but we find ourselves with more and more choices, many requiring a monthly subscription fee.

Sirius and XM Satellite, who later merged, seem to have started this game of offering a premium experience while sitting in your car.  Sirius brought Howard Stern over from free radio and many joined him in his move.  Today, fans of music can pay monthly fees to listen to streaming radio from choices ranging from Spotify and Pandora to Apple Music.  And today's NY Times reminds us that your Amazon Prime subscription includes both a video platform as well as a music platform.  And consumers seem willing to pay for the milk when it is also available free. 

Is it the greater choice, the lack of ads, the portability, the freedom to choose what to play next, the convenience?  They all come to play.  We have switched from carrying a portable transistor radio to carrying our smartphone and technology has played a large role in opening up new competition.  But I still come back to the point of free verse pay.  Commercial radio stations also present themselves online as well, as easily acceptable as any paid app.  The music industry certainly presents itself as a terrific case study in the world of content vs. distribution, free vs. pay.  How it continues to evolve remains to be seen. 

Friday, November 6, 2015

ESPN Not In Trouble, Despite Firing 300 Employees

ESPN parent company, Walt Disney, released its quarterly financials last night and let us know that the Magic Kingdom is as healthy as ever.  Profits and revenues have both grown and the media division that includes ESPN rose 27% from the period last year.  According to the NY Times, "Disney said the increase was primarily due to higher ESPN affiliate and ad revenues, partly offset by higher programming costs".  Yet, as a Christmas present to 300 employees, they received their layoff packages.

ESPN and Disney are not suffering.  In fact, their bottom line was never stronger.  No the decision to fire 300 employees was to appease investors and not the business.  I don't mean to suggest that Disney or other public companies need to be charity centers to their employees; but, couldn't ESPN do something else with these 300.  Given the diversification of the empire, why couldn't these 300 be given internal opportunities to apply to other divisions within the company.  They have already demonstrated a fit to the organization, many have provided multiple years of impressive service and their experience might be truly welcome as other lines of businesses seek sales, marketing, production and other types of support.  I doubt that ESPN or Disney even considered that option.

So ESPN laid off 300 employees only to tell us that the company and brands are "stronger than ever".  I just don't believe the two stories jibe.  Thoughts?