Saturday, November 22, 2014

Aereo Files Bankruptcy

According to the NY Times, Aereo has filed for bankruptcy under Chapter 11 ending its run as a cable TV disruptor.  The Supreme Court ruled against the Aereo business model which enabled consumers to lease remote antennas to access over the air broadcast signals, digitize, and stream them for viewership.  Shows could be recorded for later viewing or streamed live to any device.  That model proved fatal for Aereo.

As to next steps, Aereo will try to sell off its assets.  And other OTT businesses will come up with different means to capture and transmit signals by placing antennas directly at the consumers' home.  Aereo's loss was the broadcasters gain. CBS has jumped on it by creating its own OTT subscription service for viewers to stream and watch its programming.  Perhaps other broadcast networks will follow.  Still, Aereos' appeal was that it aggregated all the broadcast signals onto one platform for an easier experience.  Farewell Aereo, your business model may have been in vain but as a disruptor you sure did light a fire to change. 

Friday, November 21, 2014

Amazon To Offer Ad Supported Video Streaming Service

Amazon's plan to rule the online universe has taken a fresh turn with plans to expand its video strategy.  Currently offering Amazon Prime, a $99 a year service that includes video streaming, free shipping, and more, its next move is a separate free, ad supported video streaming service to attract a larger audience.  While no specific launch date was announced, the service could appeal to cord cutters among others.  And while some think it could hurt the Netflix subscription model, I actually believe it will only help it.

For Amazon, it offers another way to monetize its exclusive online content, shows like Alpha House and the new kids series, Gortimer Gibbon's Life On Normal Street, as well as acquired programs from HBO including The Sopranos, Deadwood, The Wire, and more.  Adding an ad component will also help track and perhaps even enable its advertising to lead to online purchase behavior (on the Amazon website, of course).  The data of users to the service coupled with their purchase behavior could bring premium ad pricing.  Plus, the appeal of the Amazon free streaming service might eventually upsell them to a Prime customer.

Why shouldn't Netflix be worried?  Viewer consumption of programming is based on appeal and interest.  With its blend of original and acquired TV and movie content, and a relatively inexpensive monthly price, Netflix customers will remain as long as there is always a breadth and depth of content choices.  But Netflix might just consider a free ad supported service to both monetize its video content and drive adoption to upsell to its subscription service, too.  And Netflix, because they are not tied to their own e-commerce model could also offer a click through to other online retailers to purchase after viewing an ad.  Netflix might like a piece of that action, as well.  The only downside for Netflix, that customers drop the paid subscription for the free model, but it might be worth the risk.

Thursday, November 20, 2014

Dish Facing More Network Drops

Dish Network doesn't seem to mind that it is facing multiple contract issues with its programmers.  Last month, CNN and Cartoon dropped off the channel line-up and now they have a possible CBS drop on their hands.  But to keep laying it on, the rest of the Turner Networks, TBS and TNT in particular, are also set to be turned off.  For Dish subscribers, the loss of a cable network is a nuisance, the loss of a broadcaster is a headache. 

With carriage of pro football games, rating dominant prime time programs, and more, CBS can create a major headache for Dish just as it did in its negotiations with Time Warner Cable in Los Angeles.  That drop caused a large number of subscribers to drop their cable service for another provider.  Could a CBS drop on Dish cause the same significant subscriber loss? 

Yes, these programmer - cable distributor boxing matches seem to happen every year.  A network's contract expires, the signal goes dark on the line-up, consumers complain, and eventually, after a PR blitz, the service is restored, and the cycle starts again for another programmer.  A sorrowful process that continues to repeat.  As for the subscriber, we become numb in the process and eventually figure out that no matter where we end up, the same type of fight will emerge on that distributor.  Another reason consumers are dropping their cable cord altogether and seeking content over the top. 

Wednesday, November 19, 2014

Nielsen Attempting To Measure Netflix

It is hard to get an accurate count when companies don't want to be counted.  In today's Wall Street Journal article, Nielsen hopes to measure usage of both Netflix and Amazon Prime through its audio feed.  And while it may garner some information, it comes across as half-baked.  First, it only measure on connected TV sets, "Nielsen is still working on a way to measure subscription-video viewing on mobile devices, where such technology won’t work."  And second that it is being done without Netflix or Amazon's support.

Of course, getting good data is key to essentially what content owners want to know, "Is putting content on Netflix impacting the viewership on linear and traditional VOD".  But as more and more Netflix consumption is on mobile devices, the value of the research may be strained.  Common sense may already tell content owners what they implicitly already know.  Viewership is shifting from cable and broadcast to digital streaming media.  Current research already confirms this trend. 

Why doesn't Netflix or Amazon care to be measured by Nielsen.  Their revenue comes from subscription to their services and not from advertising.  Internally, they know who has subscribed and what they are watching.  And so, doing a deal with Nielsen today doesn't seem to be a high priority for either service.  For Nielsen and its customers, the data gleaned from this workaround collection process, via audio, may tell a story, just not a complete one.  Content owners that are doing programming deals with OTT providers see it as another window of revenue opportunity. 

And while it may create an issue of cannibalization that could hurt ad revenue in other windows, it can also help to draw new audiences.  Case in point, Breaking Bad on Netflix of older seasons led new audiences to catch up on the series to then head over to AMC to watch the current season play out.  A win for both platforms.  And one day when Orange Is The New Black sells a cable distribution window, the buzz it has gotten from Netflix should draw large audiences and consequently ad dollars.  And Nielsen needs to find a way to accurately measure all streaming usage. 

Tuesday, November 18, 2014

NYC To Replace Payphones With WIFI

About a year from now, NYC will be offering free wifi access; sure Starbucks offers that now, but the city hopes to create a fast public wifi link using payphone kiosks to transmit a 150 foot perimeter in order to connect.  And NYC hopes to profit from this new business venture through advertising on payphone kiosks.

Initially, I thought that such an ambitious plan would enable apartment dwellers across the city to ditch their cable company and get high speed access to watch Netflix and other content without paying an ISP provider.  But 150 feet may not reach many people in their homes.  At the same time, New Yorkers using that end up using the new wifi service will most likely have to be outside to access.  Okay in the summer, less so in the winter.  And wouldn't you rather sit down in a nice coffee shop than stand outside and freeze your behind off as you surf the web.

As to advertising, with so many digital billboards already overwhelming our senses in the city, it is hard to imagine that more kiosks will provide a positive ad experience.  And per Mashable, "Users will only have to log into the network once, making the transition from one hotspot to the next seamless." Thus no real online ad opportunity.  

Such a program seems beneficial to NYC residents with free wifi and free domestic phone capabilities.  And if the radius of wifi access can be significantly expanded, a nice alternative to the cable and phone company; in fact, a potential competitor.  But as a business, it is hard to see it being profitable for its owners.  And while there is worry that a public wifi hotspot could affect our privacy, we have already accepted these wifi hotspots as we enter coffee shops, department stores and other establishments.  It seems few of us care about privacy. 

Monday, November 17, 2014

Apps Changing Internet Usage

Today's Wall Street Journal reminds us that when we enter a particular app on our mobile device, we are essentially entering into a walled garden of specific information, disconnected from the open world wide web.  According to the article, we have changed how we surf, spending more time with apps than with an internet browser.  "On phones, 86% of our time is spent in apps, and just 14% is spent on the Web, according to mobile-analytics company Flurry." 

And we have seemed to fall in love with our apps to find and share information fast.  The article worries that once we are inside a particular app or walled garden, we are then subject to its rules and whims, limited by what the particular app wants to allow us to see or do.  Most interesting to note, "The Web is built of links, but apps don’t have a functional equivalent."  We stay inside the garden unless we choose to venture again outside to seek additional information.  And unless we look outside the gates, we may not be exposed to new information. 

The article certainly doesn't see apps as bad, but as perhaps the next development of a changing platform.  The challenge is to find a way for openness to emerge.  The author's conclusion seems a sound one.  "It is that in the transition to a world in which services are delivered through apps, rather than the Web, we are graduating to a system that makes innovation, serendipity and experimentation that much harder for those who build things that rely on the Internet. And today, that is pretty much everyone."  If that is the case, I'm sure brighter minds are working on new types of app search. 

Saturday, November 15, 2014

Verizon To Sell A Mobile Cable Subscription

With the purchase of Intel's OnCue business, Verizon is embarking on a plan to offer a mobile version of a cable subscription business according to Wireless Week. Using their LTE mobile spectrum, Verizon plans to deliver a cable-like platform of channels for consumers.  And while launch date, subscription pricing, and other information is yet to be announced, it appears that Verizon sees an opportunity to attract cord cutters with a new approach. 

Cord cutting continues to grow as 150,000 households shed their cable subscription as of July 1 of this year.  According to Mashable, Time Warner Cable and Comcast were hit the worst.  Verizon's new pay-TV service could further attract cable customers to shed their physical cord for a mobile cable experience.  Verizon already understands the overbuild mentality as it markets its FIOS business in markets with cable providers.  Verizon's mobile business could potentially cannibalize some of its own FIOS customers although cable opertaors are more at risk.  And FIOS could market a mobile package that delivers the ultimate in a TV Everywhere approach. 

As OTT continues to mature, and platforms like Hulu and Netflix attracting subscribers, networks like HBO, SHO, and CBS are developing their own OTT models.  Verizon's mobile platform could be a boon to these networks and others.  It may also allow Verizon to start over to build and bundle services that consumers actually want to watch at a price point that is acceptable to them.  And if successful, this new business could truly disrupt the cable subscription model. 

Friday, November 14, 2014

Data May Be True King When It Comes To Success

Having content to view may not be the same thing as having content that people watch.  And when it comes to measuring success, how many watch, who they are, what they like, and where they go may ultimately determine how successful any piece of content can be.  The data behind the content, the analytics and insight derived from who is watching a piece of content is imperative to financial success.  It is reminiscent of the adage asking if a tree falls in the forest and no one is there to hear it, did it make a sound.  That data is crucial especially when it drives advertising dollars.

The buzz on measurement of content, whether linear, on demand, streaming, or download requires that it is properly being collected, that it is accurate and correct, and that the time frame in which it is collected is relevant to the process.  And for media buyers, that reaching an audience is not just a size based proposition, but also efficiency to a segment of the population you are trying to reach, whether age based, gender, income, purchasing behavior, etc. 

The system today seems far from perfect.  Do we count live only views, Live and same day delayed, or +3 day or +7 views.  Did the pre-roll play, was the sound on, was it fully visible, and is it a real impression?  Questions of fraud remain part of the conversation.  Still, with verified data, the value is essential in making content profitable.

Thursday, November 13, 2014

Like iPods Product Line, iPhones Will Also Lower iPad Sales

Technological cannibalization seems to be the norm and no one is more aware of this impact than Apple.  When they introduced the iPhone, many worried that iPod sales would be hurt.  And they were right.  But the innovation of the iPhone, while cannibalizing iPod sales, also enabled Apple to succeed.  The same cycle is now repeating with the iPad.

While iPods continue to sell, they represent a smaller business then before.  With the introduction of the iPhone 6 and 6 Plus, Apple recognizes that it will cannibalize sales of its iPad.  In fact, it could lead to the drop of the iPad Mini model.  At the same time, the iPad may fine more uses in business sectors then in the consumer market.  And as iPhone sales makes iPads less desirable, they may also help sell more laptops.

With the MacBook Air and MacBook Pro getting lighter and more powerful, Apple users may find these products, linked with their larger iPhones as the perfect combination.  MacBook sales in general have been rising as PC sales are declining.  This trend seems likely to continue.

For Apple, they seem to have no problem letting cannibalization occur.  It is in their best overall interest to not try to save declining products but to focus on the synergy of their total product line.  With the introduction of the iWatch in 2015, that synergy is likely to continue.