Monday, October 20, 2014

CBS Streaming Service Already Available

While HBO announced its unbundled streaming service, it is not available; CBS not only announced but it is already available for purchase at this website.  At $5.99, consumers can access both the live stream from their affiliate and a large library of on demand TV shows, from I Love Lucy and Twilight Zone to NCIS and The Good Wife.  And while the NFL won't be available, some live sporting events and other live events will be made accessible on the streaming app. 

For cord cutters wishing to still get TV programming, it might be a good deal.  But take the CBS model and watch it get copied by other broadcasters and cable nets, and the costs to subscribe to multiple channels quickly rise.  Buy 10 streaming channels at $60 or 60+ cable channels from your cable operator for $60.  Still, happy with access to a few channels will certainly make a subscription to CBS a cheaper deal.

There is one other advantage that the CBS streaming model offers.  When broadcaster and cable operator get into a license fee battle and their channel is removed from a cable line-up once the contract expires, CBS can now promote their CBS app to access their channel and not promote switching to another cable provider.  It may not be a perfect short term solution, but it is certainly an elegant one. 

Friday, October 17, 2014

Online A La Carte Could Make Cable Subscriptions A Better Deal

Bundling, in the cable vernacular, has been seen by consumers as a bit of a dirty word.  Forced to take a number of channels that they would never watch, consumers heard the pitch that they would get better value for all its accessible networks.  Bundling applied to the services received as well; the Triple Play enabled consumers to purchase cable, broadband, and phone for one low price, getting discounts for being a multi-platform customer.  But as the costs for cable keeping inching up, customers have felt that a la carte would get them a lower price for only the services they truly wanted.

With threats of cord cutting and cable nevers, broadcast and cable channels are finally opening the door to a la carte subscription models.  HBO announced plans to offer their HBO GO digital subscription to non-cable customers and now CBS has announced their plans to offer a stand-alone digital content platform outside the cable spectrum.  Their hope, and that of others, like Univision, is that incremental revenue growth can be found in the digital subscription model.  Plus, it protects and competes on the same web platform with current online rivals like Netflix, Hulu, You Tube, and Amazon Prime.  Will CBS or Univision offer these digital services as added extras to authenticated cable customers like HBO offers with HBO GO?  The allure of an added revenue stream might just prevent them. 

Current cable subscribers might be encouraged by such content availability online and consider finally cutting their cable cord.  Those tired of paying exorbitant fees for their cable subscription could now get just what they want for less.  Or can they?  Online content usage shows that consumers have an insatiable appetite for video.  We keep searching for more and more to watch.  And as we sign up for more of these online services, the costs add up to the tipping point where a cable bundle just might start to become a better content deal.  And consumers that opt out of their cable subscription may start to see their Triple Play discounts evaporate.  They will pay more for broadband only service from cable, and even more to up the speed for download, as cable operators keep raising their prices. 

Cable operators are certainly hoping that cord cutting will be minimal.  Because consumers' demand for online content is growing, operators hope that subscribers will buy cable AND buy these monthly online digital services. And that might encourage networks to shift programming off on demand and onto their paid subscription models.  A la carte might just win the day but consumers will find that they are not only paying more but receiving less content as a result of cutting the cord. 

Thursday, October 16, 2014

Could Cellphone Beacons Ruin Our Lives

As humans, we follow Pavlovian tendencies.  And with our mobile phones, it seems that every buzz or ring causes us to quickly stop what we do to look at our phones.  In some cases we even look at our phones when it is someone else's phone that is ringing.  But the worse problem is when we look down at our phone and end up tripping or running into something.  Embarrassing when we are walking, deadly when we are driving.

So the NY Times article on beacons may at first seem promising, it poses problems too.  "Beacons, tiny low-powered radio transmitters that send signals to phones just feet away, have quickly become a new front in the advertising industry’s chase to find you whenever, and exactly wherever, you are."  In a store, they can alert you to coupons and specials, notify you to new information, offer rewards, and other one-on-one engagements.  But they also cause us to look down at our phones and not around us in the space we are occupying.  We may think we can be good multi-taskers, but we end up not seeing what may be right in front of us. 

In some cases, beacons can create some unique opportunities; but, overused can become a big problem.  Used properly, "They could enrich museum experiences, deliver the right recipe in the grocery store aisle, take us on interactive tours of cities and towns, let us quickly and easily check in to hotels or even pay at the gas pump."  Misused and we will walk into other people, crash into a  cart, trip and fall, or simply be so busy looking down that we fail to see the world we are living in.  Unfortunately, I doubt that restraint will be used and we will need to become even more careful as we navigate around so many people looking down at their cell phones.

Wednesday, October 15, 2014

HBO GOes Without Cable

HBO just announced that in 2015 it will start to offer the HBO GO digital content, without a cable subscription.  While there are limited details, HBO has clearly been feeling the heat from Netflix, Hulu, Amazon and others.  And while HBO cable subscriptions continues to deliver valuable revenue, the threat of cord cutting can damage their leadership position.

I wouldn't be surprised to learn that HBO offered some deals with their current cable providers to move in this direction.  Such alternatives might have included revenue guarantees against current customers that might drop HBO cable for HBO GO.  I believe that HBO's research would indicate that they won't experience this shift in viewing.  I suspect that current cable/HBO subscribers will maintain their subscriptions and HBO GO being offered directly to consumers will actually result in more additive growth than shifting of platforms. 

There is certainly a risk that this move by HBO to offer HBO GO and the likely repercussions of other premium services like Showtime and Starz developing a similar move, will ultimately lead to greater cord cutting.  It may also lead to cable companies pursuing more a la carte offerings to deliver a lower priced set of networks for consumers still seeking a cable platform.  At the same time, cable companies must also push for a complete TV Everywhere experience that lets every linear and on demand channel to be accessible via authenticated viewership to its customers.  Till then, this move by HBO is a necessary one to stay competitive against its digital rivals.

The Proliferation Of Sports Networks

The Fall always seems to be the busiest time for sports on television.  You have the end of baseball, the start of football, hockey, and basketball, plus soccer and tons of college football games.  And for each of these games, a network, or two, or four, or eight, etc. to meet the need.  We have in fact over the course of a couple decades seen many of our games move off of network TV onto newly branded cable nets.  And for each new network that is created, the demand for live sports programming helps to raise content fees which ultimately get passed through to the viewer in higher subscription or license fees. 

Where once the broadcast networks were the face for professional and college sports, each has a cable network or more to off load its sports programming.  ABC has the well known ESPN brand including ESPN, ESPN2, ESPN News and more, NBC now has the NBC Sports Network as well as Golf Channel, CBS has its CBS Sports Network and Fox with Fox Soccer, Fox Sports 1 and Fox Sports 2.  Each pro league has its own network, too.  We have NFL and NFL Redzone, MLB Network, NHL Net and NBA Net.  Even non sports cable networks like TBS has deals to carry pro baseball and pro basketball.  And for regional college and professional interests, networks like YES, MSG, NESN, Sportsnet and more make sure your local team is covered.  Plus the Big Ten, SEC, and more.  Tennis Channel makes sure its fans get access to matches while outdoor sport fans have Outdoor Channel, Sportsman Channel, World Fishing Net, ONE World Sports, and more.  And each network wants a license fee for cable carriage.

Wonder why our cable bills continue to rise.  The proliferation of sports networks, especially the ones showing live games, is a primary cause for such high rates.  The demand for live sports are also rating winners too.  But too much of a good thing has the potential to kill the golden goose.  Consumers can only pay so much and need to shave the cable cord on channels or cut the cord on their cable subscription all together.  Its great to have access to such a diverse array of sports and dozens and dozens of channels to view them all, but too much may be too much. 

Tuesday, October 14, 2014

Multi Media Multitasking

Today's Wall Street Journal highlights a research analysis by two high school seniors on teens' ability to engage in multi media usage while undertaking various projects.   They presented their findings at a conference in San Diego.  "The findings: Though most teens perform better when focusing on a single task, those who are 'high media multitaskers'—about 15% of the study participants—performed better when working with the distractions of email and music than when focusing on a single activity."  A small percentage can satisfactorily complete their primary tasks while other attention grabbing stimuli is present. 

I, like those teens, grew up doing homework while a TV or music was on in the background.  I, too, found that it filled a void, and I was successful in school.  Did it slow down the time to complete tasks, likely.  Today, I have two teens, one who likes having the TV on while doing homework, the other prefers it off.  Some days the conflict requires the wisdom of Solomon to gain resolution. And whether multitasking or not, homework is completed.

We are constantly evolving creatures and our brains adapt constantly to changing internal and external demands.  The rise of digital media has only extended the supply and perhaps even the demand for multitasking.  Like Darwin's theory, we adapt to handle our new surroundings.   And that process is a constant one.  Teens have been more and more exposed to multiple media outputs, from video to music, Email, Tweets, Likes, etc.  And they are responding.  And while this current research indicates some teens are able to multitask successfully, we also know that depending on the situation it may not always be encouraged.

Listening to music or watching TV and doing homework may slow us down but all tasks can be done fairly well; Texting and driving is one example of multitasking that should never be encouraged.  Regardless of the research, multitasking does cause some distraction and those cases where life is at risk, it should be avoided. 

Monday, October 13, 2014

Comic Con NY

I had the pleasure of attending Comic Con with my son in NY this past weekend.  Along with the many characters we passed, we were encouraged to buy a ton of merchandise from t shirts to costumes, dancing dragons, swords and shafts, comic books, posters, and much much more.  The highpoint was certainly the people watching.  And despite the huge crowds, everyone seemed friendly, happy, and appreciative.

My biggest surprise, that the autograph section was filled with "former" celebrities charging $40 or more.  Outrageous.  So many great panels.  To assure a seat you have to get in line very early.  So much to see and do that one day may not be enough to see and do everything.  All in all, a wonderful experience.

Friday, October 10, 2014

Cord Shaving Hurting Expensive Networks

On March 11 2011 I wrote my first blog about cord shaving entitled It's Not Cord Cutting, It's Cord Shaving.   In it I wrote that "the rising costs of the cable subscription is resulting in purchase behavior changes."  Cable television continues to get more expensive and OTT services like Netflix continue to siphon funds that once went to cable TV. 

Fast forward three and half years and the topic of cord shaving may finally be taken more seriously.  In today's Wall Street Journal, the article titled Pay TV’s New Worry: ‘Shaving’ the Cord, discusses how "the top 40 most widely distributed channels in 2010—household names like CNN, ESPN and USA—have lost an average of 3.2 million subscribers, or more than 3% of their distribution, according to a Wall Street Journal analysis of data from measurement firm Nielsen."  Not really so new.  Customers have been cord shaving dropping their level of service to lower the price of their cable subscription.  The cost of packaging with too many of these cable nets have simply made the price of customer subscriptions cost prohibitive.  Step one, customers are cutting back or shaving nets off their subscription; but as costs continue to rise, step two will be to cut the cable cord entirely. 

Network license fee models generally require that not only are they placed on a channel line-up with the largest number of subscribers, but that their penetration of service against all customers is greater than 85 or 90%.  As subscribers continue to shave off nets with smaller packages of service, network penetration rates for that cable operator decreases. Consequently, the cable operator will have to either introduce these nets into the lower priced tiers or raise their cable rates to cover the penalty costs of not meeting the network subscriber penetration benchmarks.  The cycle is complete and customer cable costs will rise. 

Consumers can only shave off so much before the only recourse will be to cut the cable cord entirely.  Aereo tried to be that service that could inexpensively offer broadcast streaming programming.  The Supreme Court ruled against them.  Other customers are once again putting up antennas in their home to capture broadcast signals. 

The other great truth is that cable is no longer the number one priority for homeowners; broadband is.  Given all the content accessible via an internet connection, consumers would rather pay for their broadband subscription before paying for a cable subscription. Cord shaving today, cord cutting tomorrow. 

Thursday, October 9, 2014

Content vs. Distribution vs. Data

If you have the chance, a terrific article by Will Richmond entitled Data Is The Real King, as Netflix Keeps Proving, adds another wrinkle to the debate as to who is king, distribution, content, or data.  As we move further and further into a digital world, data, uncovered at the individual level, has become more and more important, especially for driving revenue. 

As a result, the debate of which comes first the chicken or the egg, content or distribution, may be no more.  Instead, we may have to start looking at content and distribution and data as a three-legged stool, each needing the other two to stand upright and remain functional. 

Netflix, in the article's example, works in this new model.  It has thrived because of original content, accessibility across an agnostic array of devices, and data to enable Netflix to make risk averse decisions.  All three work in tandem to propel Netflix to new highs, continuing to reach more and more subscribers.

No one attribute is king.  Content, distribution, and data simply must share the crown.  At the same time, they must each communicate with one another effectively to continue to rule. If data, or the information they hold, is not shared with content and distribution, then the other legs become weak.  And if content or distribution falters, then data is limited and unable to deliver good information.  Perhaps the new mantra should borrow from the Three Musketeers, "All For One And One For All".