NBC ending its relationship with iTunes

As the NBC relationship with iTunes expires in December and the launch of Hulu is expected in October, the change in distribution by NBC begs the question, what is more important, content or distribution.

I have always contended that content is king, and like the line from Field of Dreams, "If you build it, they will come." Quality content will find distribution. Recently, however, a friend of mine made the opposite assertion that distribution is king. If you have the pipeline and the access to an audience, they will come to you no matter what you offer. In fact, many cable networks have done quite well once they got access to distribution with what some may argue was not great programming.

Its the kinda question as old as the chicken or the egg.

So, what do you think. Which matters most - should an entertainment company building new content concentrate first on great quality of its content or should they spend their money first on securing great distribution deals with whatever content they can offer quickly or cheaply. Is content king or is distribution?

In the case of NBC, they seem to be saying that their content is king. Despite the huge distribution that iTunes offers, they are willing to cut that off for their own, brand new distribution platform, Hula. Content over distribution. But will the audience find Hula like they know iTunes. Only time will tell and maybe it will answer the question, content or distribution.

CondéNet, MSNBC Strike Syndie Pact

"CondéNet has struck a deal with MSNBC.com to syndicate content from a variety of its signature Web brands, including Style.com, Men.Style.com, Epicurious.com, as well as select content from several Condé Nast magazines, ranging from Vogue to the recently launched Condé Nast Portfolio."

Great initial synergistic opportunity for CondéNet and their magazines to get increased awareness for their brands on the web. For print to survive, these relationships are important strategically to take these brands to the next level. At the same time, these print brands need to augment their content with video and interactive elements to truly build sustained value for their brand. Awareness through highly trafficked sites like MSNBC.com is a good start, as CondéNet realizes the power of the distribution model; to follow that strategic plan to a next level, they should look for additional partners in cable and broadcast TV. Extend the brand with MSNBC into the on-air linear world too. And I can think of many other outlets to explore, Lifetime, WE, Style, Oxygen that could benefit from a partnership with CondéNet brands as well.

In Europe, a Push by Phone Companies Into TV

IPTV seems like an awesome technology, most notably its ability to link content programming with interactivity - call up sports stats as you watch a game, choose your American Idol favorite as you watch the show, ask and receive information at the click of a button. That combination opens up opportunities for programmers and advertisers to truly impact the user experience. So why is it not being quickly embraced. Obvious issues include digital rights, security, and acceptance. Some programmers are reluctant to license their content through this pipeline till they can legally figure out their own legal rights to the content they feature.

The article contends that the growth in Europe is dependent on consumer acceptance. AT&T is working with an IPTV model here in the US. I think that the issue is not to sell the technology, but to sell the solution. As an example, Apple took the mp3 player and made it ergonomic and attractive and valuable to the consumer with their iPod. For IP, make the content easy to navigate and interact with, an interface that consumers clamor for, say a remote resembling the Apple iPhone, and make the functionality intuitively easy to use.

NBC/Fox company NewCo is now Hula

NBC and Fox online company has a new name - Hulu

Web Niche programming Revenue - Part 2

Dell computers replacing the Mac for Lindsey on Wallstrip!

Web's Niche TV Programs Win Sponsors

Terrific article in today's WSJ targeting the long tail of programming that is popping up on the web and the small, but engaged audiences they are reaching. Two of my favorites are mentioned in this article, Wallstrip and NextNewNetworks, and how they are extremely flexible to support their partners so as to find a revenue model. Most notable, the use of in program product placement and editorial content extolling the value of the advertised brand.

Is this a good thing? Obviously, the need to find a revenue model that supports the costs of these "niche" channels is essential. But is editorial and/or entertainment standards being lowered to advance the cause of the ad model. And the fact that these channels are not yet reaching a scalable size to make a big dent, will this collaborative approach lead to more awareness and eyeballs to the channel. That is to say, perhaps the advertising drives brand recognition. As articles such as these appear, more people are learning that these channels exist. Channels like Wallstrip, with the powerful CBS brand behind it, has more potential through synergy with its parent and deep pockets to bankroll its growth.

I will say this, these niche channels are very entertaining and their key to survival is a growing audience and a sustainable revenue model. The long tail of programming can incubate many terrific ideas, but as history proves, reach and ratings do matter. Programming costs money and someone has to pay; and advertisers seek identifiable returns to keep investing their marketing budgets in this long tail of entertainment opportunities. I wish them well and I personally will keep watching!

Sony to Debut CableCARD-Ready PC

Between now and the Consumer Electronics Show next year, it will be fascinating to hear how many more announcements are made regarding CableCARD enabled products for the consumer. On my IMac, I can currently watch unscrambled TV through a ConvertX PVR while surfing on the web. The access to more channels, like HBO or Disney, currently scrambled, would be enabled with an updated box allowing for a CableCARD. And how soon will we have to wait till TIVO announces a new box with a CableCARD reader.

Are these 2 PCs the ultimate devices; I doubt it. But it is good to read that manufacturers are starting to embrace the CableCARD concept.

Taking a well earned week off for vacation!

High School Musical 2 Premieres Tonight

I grew up on Grease. The movie soared at the box office, and the record sales were through the roof. So Disney has hit the motherload, first with High School Musical, and now with its sequel, HSM2. My 5 year old daughter has become a tween because of HSM. It's runaway success, and how quickly Disney refocused its energy to maximize the synergy of this content is something the Harvard Business School should write a case study on. Its energy, story, and music appeals across generations.

No matter how many times the content plays on Disney, it gets ratings. It still sells DVDs, cds, clothing, merchandise, etc. And my family has a lot of it. HSM 2 will only keep this juggernaut going further. And Disney has capitalized with interactive content on the web and pushing across its other content. They have made the Disney Channel a must have across every home with kids.

My only surprise is with all the runs of the original HSM, it has yet to run outside Disney on ABC or even ABC Family Channel. While Disney doesn't air commercials, these other two networks would allow Disney to gain additional advertising revenue off the content airing.

Still Disney reacted very quickly when HSM's success exceeded all expectations, and that refocusing of their energy to realize additional business opportunities should be noted and applauded. No one expected this little movie to be the massive hit it became. Like other movies, it could have simply aired and been done. But Disney was willing to change its plans and move dollars to react successfully to the show's popularity. Not many major companies can adapt that fast. So, until HSM2 songs begin to be played ad nauseum, I'll stick with the first songs, after all, "We're all in this together..."

At Netflix, Victory for Voices Over Keystrokes

Service continues to be a popular subject for me. I was once told, people barely remember good service, but they never forget bad service. I think of the stories I like to tell, and some of the most interesting revolve around a bad service experience and how I resolved it. In fact, I have far more bad experiences to share, than good ones. The exception, of course is exceptional service. Because it is so rare, I do feel compelled to share those stories and in fact go the extra distance to tell others about it.

So reading that Netflix has gone to people power instead of automation, is good at first blush. But to keep the experience exceptional, Netflix needs to also do these things: remember the customer comes first, empower the service rep to resolve quickly, empathy works and rewards works better. Give the customer back more than they expect and they will share that "rare" experience with others. Over deliver!

DirecTV, WOW! Top J.D. Power Study

This study is based on customer satisfaction of cable and satellite providers. Can't be the service, must be the content. I would love to learn what made the difference. Having the triple play, and enjoying the cost advantages, the only thing that would drive me to satellite is the NFL package. I've personally experienced reception problems during bad weather, so it can't be reliability. perhaps the TIVO DVR is a factor, not sure. This announcement of results only has me asking more questions as to why they are superior. I suspect that cable operators have a built in bias against them and satellite is seen as the alternative "good guy". Timely release of research considering my last post on Direct TV.

Cable vs Satellite vs Phone - the key to victory

Listening to the local DJs rambling on this afternoon, and if you must know it was 98.5 FM and the Rocky Allen program, when the topic turned to cable installation. It seems Rocky was describing how he had been stood up by the Direct TV installer for the second time, and he was begging for Comcast to get the NFL package so he wouldn't have to put up with this nonsense anymore.

It got me to thinking, service vs content, which is more important. Like in a restaurant, are customers willing to put up with bad service for a good meal, or do they get fed up and move on. Is one particular package so important, that the customer will put up with bad service. Is Rocky's choice the minority or majority vote, to stay regardless of how bad the service might be. As a football fan, I understand the appeal. But would other customers make the same choice if their particular network was only available on one outlet, and you had to put up with bad service just to get it.

And then the light bulb went on! yes service is important, BUT content ultimately wins out. Take for example the recent launch of the Apple iPhone. Despite bad reception on the AT&T service, the value of the product won out and people switched. Content beat service.

The conclusion - in this age of competition between cable, phone, and satellite - build or acquire unique content that only you control. Customize hardware or create better software, like Time Warner's "Look Back" and "Start Over" programs, build strong brand awareness and brand preference, and grow your customer base.

Skins, Bugs or Tickers - effective video advertising?

The ultimate truth is - nothing is free. Even free TV meant we had to endure commercials to get the show. So in today's interactive would, finding the ideal mechanism to monetize the web, is what will drive the future of the web. Where pre-roll was too intrusive, new opportunities to push a message at us without destroying the value of the interactive experience has led to new types of advertising. Banner ads, skins, bugs, tickers, pop-ups, shorter commercial lengths. It's hard to imagine anyone ever claiming that they like ads, although the right creative ad to the right targeted demo, can be beneficial. But with so much clutter, how to build the interest without losing the relationship between user and website.

Of the choices so far, I like the screen concept. Perhaps test with a post-roll to see if users stay for the spot cause the skin interests them. Bugs get annoying and intrusive, especially as they clutter the screen experience. As we are beginning to learn, the web is not free, but it can be profitable if done with creativity and common sense.

The next generation of the Apple iMac, I hope

I saw this video posted and this is the product Apple should be announcing next. Their new sleek design is nice, environmentally friendly is great, but it is not innovation. I switched from a PC to Apple 2 years ago and it was the best decision. Taking the screen concept from the iPhone and moving it to the computer is the next step for Apple. Don't get rid of the mouse, just add this new screen to the mix. I want this. So Apple, I hope your watching this fake commercial and can't wait till you truly announce this new computer design.

Murdoch sets his sights on big players

There are a few business leaders who seem to have their eye on the future path of technology, information, and entertainment and Rupert Murdoch is definitely one to admire. From his recent acquisition of Dow Jones to his ownership of multiple content and technology platforms, from Fox to My Space. His latest cable channel, Fox Business News with definitely prosper with the power of Dow Jones behind it. I'm sure his lawyers are already looking for ways to break the CNBC relationship or at least work around it to help drive the growth of his business channel. As he assembles these businesses together, I'm excited to see the kind of synergies and convergence he has planned. It is clear to me that he has a definite strategic vision to build a global platform for distribution. His empire is not finished growing and the pieces missing include a search engine and an IPTV platform. Buy or build, his finger is clearly on the pulse of progress.

Is Second Life For Real

Lot's of talk about Second Life on the web, and as an escape, like Sudoku, it's great. But beyond that, I am not that jazzed about it. It looks and feels like a version of dungeons and dragons, with perhaps a more visual appeal. Still, beyond its game-like attributes, it doesn't do much for me. I feel like screaming, the Emporer isn't wearing any clothes.

Unlike other websites that offer social network interaction, My Space, Facebook, et al, Second Life lets you interact with an avatar, an on-screen character, representing you on the web, to meet, to gossip, and to lay down roots. In this NY Times article, people are spending hours fixing up their virtual homes in exotic locations. They even create kitchens and bathrooms, although these avatars neither eat or poop! I marvel at all the free time spent in Second Life; with that same amount of time, they should be fixing up their real homes.

I prefer sites that start virtual to build social interaction, like meet-up.com, that take people from the virtual world to real flesh and blood interactions. At some point, you have to get up from your chair and actually talk to people face to face!

TV's digital switchover has a downside

February 18, 2009, no this is not a blog predicting the future. It is however a special date. On that date, TVs that are not connected to a cable line, that get their broadcast signals from the free, "over the air" signal, most likely from a "rabbit ear" type antennae, will receive static instead.

That is the date the FCC has set for broadcasters to turn off their over the air, "analog", signal to deliver only a digital signal. And those homes with TVs not capable of receiving a digital signal or not connected to a cable service will have no access to broadcast TV. Why is this being done. The advent of High Def TVs, the proliferation of digital TV through cable, phone, or satellite, and the belief that most homes are already digital customers. The belief that most consumers will be unaffected. Still, a home might be signed up but not every TV may be hooked up. And for those homes that still don't want to sign up for service will now have to at least purchase a digital tuner and hope it can connect to their TV set. The population most likely to be affected, the poor and the elderly, and that is who needs to be protected. So why is it being done. The FCC will take back that spectrum of signal and resell it for other uses. Profit is always a motive.

For those people that only watch TV through a cable line, this date will pass unnoticed. But to those who have been accustomed to free TV, the date will creep up to quickly. Yes the world continues to change and progress is inevitable. Education is absolutely needed to clarify what this change means in layman terms. Profit and wireless advances will certainly result from this change; but at the same time, some of those same profits should be redirected to those groups most hard hit, to ensure a happier transition.

NBC, Fox Find Viewers With Back-to-Back Scheduling

Some interesting observations in this article, especially "Despite new technologies allowing viewers to screen programs at their convenience, Beckman said Fox’s success with audience flow this summer has shown that viewers continue to watch TV in real time." Ahem....TV is not dead and web content is not trying to replace it, but allow more voices and more entertainment choices to be heard. The audience hasn't left TV, but I think increased choice has limited the size any one program can grow.

The strategy of sticking like-minded programming together on the same night is hardly a new concept to retain viewers. "Execs at both networks said flow is only as strong as the shows they develop. But programming the right block of shows can be tricky." And this pairing of similar type formats has been around for ages...ABC did it with Happy Days and Laverne and Shirley, Love Boat with Fantasy Island. And NBC, throughout the eighties and into the nineties had Thursday Night Must See TV with 4 - 1/2 comedies. Pairing reality TV shows together, simply applies a different genre to the same old philosophy. And this Fall, NBC will take an existing hit, Heroes, and team it with another sci fi genre show. The audience is already there, why not keep them tuned in for the night. As the article opens, "On a cluttered TV landscape specked with appointment shows and time-shifted viewing, it’s not every day that a network benefits from audience flow anymore." Network execs may simply have forgotten the time tested formula for TV viewing success. Its the strategy that makes TV tick.

Yankees' TV Network For Sale

Jimmy Dolan would love to own the Yankees. WIll Cablevision bid...of course. But what will they use as collateral to buy it? Perhaps this is the impetus to sell the Rainbow Networks (AMC, IFC, WE, etc.), get the cash, and put the Yankees and MSG back together again under Cablevision. Just my 2 cents!

Kagan study: cable nets in good shape

Major media companies with cable network distribution are doing better than believed while independently owned cable networks are struggling, according to this SNL Kagan study. Not earth shattering news, I must say. The power of these large companies with multiple brands converging across multiple spaces, broadcast, cable, print, etc seems to me to be the driver of this success. Just this morning, the NBC Today show brand is pushing CNBC and their Fast Money program. In addition, references to their websites offers more synergies. Disney is the master of this synergy, too; just look at the runaway success of High School Musical, and its merchandising across many businesses. I even understand that ABC Good Morning America will be highlighting its sequal on Thursday mornings show. Across many brands, content is pushed and leveraged to create even more revenue lines.

It becomes harder and harder for content to breakthrough the sheer number of shows and networks now available on TV, on demand, and online, without the power of a larger media company behind you to get noticed. Is it possible to breakthrough, sure, but that long tail is awfully long. These same conglomerates are able to package these opportunities to their advertisers assuring metric goals are met and revenue attained. The little guys can survive; but in life, the big fish tend to eat the little fish.