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Wednesday, December 31, 2008

What Will You Do Without Viacom Channels?


This negotiation has most likely been going on for a while, but as contracts expire and deadlines are reached, it has left the board room and reached the ears of the public. Time Warner and Viacom, owners of Nickelodeon, Comedy Central, and others, have reached an impasse where there are no winners. Each has solid points and each has big issues to overcome in a changing entertainment landscape.

For Time Warner, it means controlling costs, when customers are able to downgrade or leave for other programming providers like the telcos and satellite. As programming cannot be made exclusive to a particular provider, it provides little competitive benefit in the marketplace. At the same time, customers have shown more preference for hi speed web access and are able to get some of this disputed programming streamed to their PCs, whether they receive the linear channel or not. For Viacom, it is the need to grow revenue to offset the higher costs or original programming. A show tends to be cheaper in its first few years until it gets an audience; the power than switches to the show who is able to command higher costs for its talent and staff. And as linear advertising has flattened and in some cases declined, revenue needs to be made up in other ways. It won't all come from the internet so cable subscription remains an important opportunity. Why is Viacom publicly fighting this battle; take a look at their recent stock price and it is clear they need leverage on their side to get an agreement signed.

So what is the Time Warner consumer to do. In the long run, the choice is to switch to another provider if neither party comes to an agreement. These disagreements eventually always get resolved and programming is restored. In the short run, there are some options: for kid programs, start DVRing your favorite shows. For my kids, we have numerous Nick shows recorded for viewing. As most aren't expecting new episodes for a while, we are comfortable with repeat viewing of our shows. Or go to their websites for games, episodes, and other things to do. For Daily Show and Colbert Report fans, the internet will be the way to go. Hulu is always a popular option. Don't be surprised if some illegal peer to peer sites come up offering downloads of shows. Or you could invest in a Slingbox and put it in a family or friend's home where they are on a different cable company. Or even buy the DVDs of favorite series. As you can see, there are alternatives.

So enjoy your last hours of these networks, I expect a long battle.

Tuesday, December 30, 2008

It's Time For An Apple Tablet: Where's My iPod Touch HD?

Everyone has an idea for Apple. But with no major announcements scheduled for Macworld next month, and Steve Jobs not planning to give the opening remarks, it is unlikely to expect big news. Still, this writer, like me, has hopes for Apple; especially if it is a small device that works with the iTunes and iPhone platform, and is capable of accessing the web and downloading content. I'm ready for an eReader device from Apple, but this article wants a device to do it all - "Listening to music, watching videos, surfing the Web, reading e-books and Instapaper articles, playing games, writing blog posts, etc. " I don't need the first two on his list, but the others suit me just fine. Make it about the size of a book, thinner and lighter, and price it competitively, and I am first in line. "Apple's multi-touch, lightweight edition of OS X, iTunes sync, and App Store are exclusive. And they're exactly how to make a tablet computer work. So when can we buy ours?" Where do I stand?

Broadcast Advertising Still Works

Despite the recession, people are still watching TV. And while cable and the internet has done much to fragment audience share, broadcast television still remains a dominate landing point for content. Ratings may have declined, but large numbers are still there and advertisers continue to spend to reach these viewers. "Mr. Magel of Initiative said, 'Broadcast television may be losing ratings, but there is no other medium that has been able to supplant it in a big enough way to negatively impact it at this point.'”

CBS has done the best job, with minimal loss of audience compared to the other networks. They have invested in scripted programming and are seeing audiences come to them. They will also benefit in the after market, as they can syndicate this programming on other networks and on the web. Not as easy to do when your entire prime time is devoted to reality shows.

In general, broadcast networks also have the advantage of their size to diversify, some doing better than others. Investments by the big four include cable ownership as well as web sites. Fox even believes in social networking, investing in My Space. As the broadcast networks recognize their diversified portfolios in the aggregate and begin to sell advertising solutions across these platforms, they will become even larger and financially better off. It will be this synergy that will take broadcast companies to the next level.

Monday, December 29, 2008

Cisco Systems Is Starting a Push Into Home Electronics

What percentage of homes are wireless? Beyond connecting a laptop to the web or printer, what percentage of wireless homes, are listening to music, watching videos, and sharing content around their home? A much smaller number I am sure. Most people are not computer literate enough to do more than plug and play. Unless it is that easy, it will need the geek squad and other experts to set up. Heck, even today, most people buy an HD TV and have trouble connecting it properly to their set top box to get the best experience. My brother in law in fact had his TV set on an expanded screen set up and was missing out on the whole picture!

So Cisco is entering the consumer electronics field. "Cisco is working on other gadgets that will let people watch Internet video on their televisions more easily. And its biggest bet is that people will want to use a version of its corporate videoconferencing system called Telepresence to chat with their friends over their high-definition televisions." While I like that they want to help move music wirelessly around the house, how it interfaces with current digital players may be an uphill challenge. And I can tell you that when the phone rings, it is not often when my kids want to interrupt their TV viewing so I can see who I am talking to. In fact, I like to multi task, watching TV and talking on the phone simultaneously. I am not sure I want to always be seen and heard. Still, there are a couple times when a consumer video conference tool could work, talking with the grandparents comes to mind. But computers already offer the ability to video chat so Cisco may simply be late to the game.

For Cisco to succeed, they must figure out a way to work effortlessly with existing products and demonstrate how they can interconnect devices effortlessly so the consumer can easily enjoy the convenience. Their greatest opportunity is through their Scientific Atlanta division, makers of set top boxes. Adapting these devices to be more more user friendly and useful would be the best first step.

Online Piracy Menaces Pro Sports

Even with football upsets and head coach firings, fans love their sports. But as ticket prices rise, games are limited to specific markets, but audiences mobility continues to widen, sports cannot comprehend how to reach their fans. An out of market fan has few choices to watch a favorite team, while others in market get the same game for free. "The game between the Baltimore Ravens and Dallas Cowboys was pivotal in determining playoff teams, and it was the last home game ever for the Cowboys before they move to a new stadium. But because of a long-lasting feud between the NFL Network and many cable companies, many millions of fans could not watch the game on television. Yet they could watch any number of illicit live streams on the Internet."

Streaming is no longer limited to music or movies, but to live sports events as well. "After years of focusing on the pirating of highlight clips and photos on the Web, the major professional sports leagues are finding that pirated feeds of live games are now common and becoming a menace to their businesses, especially at a time when leagues are trying to build their own businesses offering live games on the Internet for a subscription fee."

The choice is clear, keep fighting this hard to win battle to stop illegal feeds or embrace the opportunity. Those reaching out to find these feeds are not current viewers of your games; they are highly motivated fans seeking new options to fill their enjoyment. Slingbox was one means to watch TV from one market when you are residing in another. Pandora's box is already open. If professional sports would bypass subscription revenue for a measurable higher volume audience that can be monetized via advertising means: commercials, overlays, interactive offerings, etc., they could potentially bring a bigger return. Obviously the day will come when these internet signals can be moved to the HD screen in the family room, but until they are why not capitalize on the interest.

Friday, December 26, 2008

Predicting Digital Disaster

As the digital transition approaches, if February 17 is still the date, predictions are that at least 3 million people will not get a converter box to continue to receive TV broadcast signals. Instead they will choose to give up TV. With broadcast ratings dropping because both cable networks and internet usage are rising, advertising dollars will be further redistributed as well. Hurtful to broadcast, helpful to these other distribution outlets.

"Nationally, more than 9 million people who currently receive over-the-air TV will lose at least one of the major broadcasting networks, according to David Klein, executive vice president of Centris." A quote I simply don't understand. Once the digital switch occurs, every broadcast channel will be effected. While some low power stations have a bit more time to transition, all national broadcast local affiliates will be affected. There will be no broadcast analog signal to watch. Mobile TV sets, throw them away, no more tailgating with these babies. And digital signals are harder to acquire, more easily interrupted by mountains, trees, buildings, etc. Just try listening to Sirius Radio in my neighborhood where this interference is a key problem. It may be no better for digital TV reception, even with a converter.

If cable television is available, it may be an alternative, even if it is just to receive broadcast basic channels. If IBM's project with power companies to offer TV signals through power lines keep moving forward, another alternative is available. And of course Direct TV and Dish is still out there too. But as the article suggests, some may simply turn off their TVs. The internet may be enough for them to provide video of the shows they really want to watch. If we see DSL subscriptions rise, then we will have gotten our answer.

Wednesday, December 24, 2008

Look Out, Amazon: iPhone Gets Real E-Books


Lets face it, the iPhone and iPod are not the best devices for reading books, newspapers, or magazines. Heck, the screen is too small to be a real game device either, but it does offer those apps too. What it does indicate to Apple is that they are positioned to bring an "iReader" to the marketplace, using the iTunes store to download print material across devices. Allowing its owner the flexibility to move a purchased subscription or book to one device and move it effortlessly to other devices that we own, would be the ultimate in convenience and usability.

And with Kindle slow to market with its next generation device, the timing is impeccable for Apple to announce at Macworld that they are selling their own reader. With the iTune store already in place, and consumer appetite growing for digital reading, Apple should be reading the signals. The iPhone is not the device to use "for serious readers -- the screen is small, the battery life is iffy, etc. But we could see book snackers reading a chapter a day or so -- or a magazine, or travel guidebook, or reference materials -- on their phone or iPod touch." But it is an opportunity to create a competing reader and make the content accessible across its various devices.

Until then, "there's plenty of e-books for the iPhone already, ScrollMotion has two advantages over its rivals: A gorgeous, feature-filled e-reader app called Iceberg and deals with several major publishers, including Random House, Simon and Schuster, Houghton Mifflin, Penguin, and Hachette." Nice!

Tuesday, December 23, 2008

SAG Postpones Strike Authorization Vote

It may be only a 2 week delay, but it indicates that the SAG may realize a change of strategy might be needed. "In response to a growing chorus of members who say a strike would be ill-timed given the current economic crisis, the leaders of the Screen Actors Guild have decided to postpone a planned strike-authorization vote by two weeks." What they learn over this time is unclear, but perhaps it may allow them to recognize that if a strike vote doesn't pass, their legitimacy as a union may be point into question.

As the TV union AFTRA has approved their contract, SAG may feel that their demands may be unreasonable. With many actors voicing opinions against their own union, SAG management may be using this time to assure they have the votes to succeed. If it becomes clear that they don't, I suspect, the strike vote will be further delayed or called off so as to save face. The economy is not improving, broadcast networks are creating less new content, movie audiences are declining, and acting jobs are harder to find. A SAG strike will not help them as AFTRA jobs will supplant them.

Don't be surprised to see them come to agreement with AMPTP or at least call off this vote.

Monday, December 22, 2008

In Move to Digital TV, Confusion Is in the Air

D-Day, less than 2 months away and confusion over digital transition still reigns. Many with antenna still haven't added a converter box to assure clear reception of their broadcast channels. Many with cable TV subscriptions still have TVs in their house not connected. And some cable homeowners inaccurately believe that every TV set connected by a cable wire, also needs a cable box.

Some research indicate that almost 10% of the country will be without TV signals on February 18. With a recession in our midst, the weather cold, timing seems off to stay firm to this date. "The fear is that those Americans least likely to understand or afford the transition — such as the poor, the elderly and the non-English speaking — will be most affected." And so, let it be noted that this deadline will not be met and that consumers will be given more time to understand how this digital transition will affect them and have more time to convert.

Cable is not helping, as they move channels from a non-scrambled position (normally channels 2-98) to one that requires a cable converter of its own to receive channels. For those Tivo users that connect direct to the wire, channels will be lost unless your TV has a cable card or you add a converter box and jury rig the Tivo to change converter box channels. Not ideal! And so, "... the cable TV industry has agreed not to switch some of its channels to a digital tier until March 1, to avoid further confusing consumers about the broadcast switch." Wow, 2 whole weeks; not much help truthfully. It is looking like a mess and needs more leadership and common sense to right this ship.

Friday, December 19, 2008

Extinction-Level Television Event

This is a must read editorial by Alan Sepinwall in the NY Times. Sepinwall, a television critic for the Star Ledger, has a keen sense of the direction that broadcast TV is taking. I too miss the quality dramas that once filled prime time. But as broadcast begat cable TV, broadcast is now acting more and more like cable children. This downward spiral begs the question, with nothing to watch on broadcast today, what will cable TV have in the next 10 years to fill its air waves. If it's user generated videos, I'm gone.

The article is copied below:

I’M a runt of Generation X, which means 1) I’m supposed to define myself entirely through ironic references to pop culture, and 2) as a member of the last generation to come of age in an era of only three TV networks, I assume everyone will understand when I drop a quote from “Scooby-Doo” or “The A-Team.”

But the generation immediately after mine has never known life without cable, and the generation after that won’t know a life without streaming video. Having only three TV channels to watch must sound as quaint to them as radio plays do to me. Today’s entertainment universe provides endless variety for every demographic and taste, and the things that everyone actually wants to watch together are few and far between.

That’s what makes NBC’s decision to surrender its weekday 10 p.m. timeslot to a new Jay Leno talk show as inevitable as it is sad.

NBC at 10 p.m. was once the birthplace of dramas like “Hill Street Blues,” “St. Elsewhere, ” “L.A. Law, ” “Law & Order,” “Homicide: Life on the Street" and “E.R.” These were groundbreaking shows and, for the most part, mass successes — the kind of hits that plenty of people at any school or office would be able and eager to talk about. Now, because the expanding television universe is shrinking individual audiences, and because NBC has shown depraved indifference to the idea of program development for the last decade, the network has no better option for the hour than moving Jay Leno from late night to prime time.

Next fall, when Mr. Leno assumes his new timeslot, NBC will continue to schedule football on Sunday nights and repeats on Saturdays. That leaves only 10 prime-time hours for original programming, and knowing the way NBC operates these days, at least four of those will likely go to super-sized editions of “The Biggest Loser” and “Deal or No Deal.”

This reminds me of a joke Tina Fey told at the Television Critics Association awards ceremony. She thanked us “for making ‘30 Rock’ the most successful cable show on broadcast television,” and added: “Oh, it’s a great time to be on broadcast television, isn’t it? It’s exciting! It’s like being in vaudeville in the ’60s!”

We all laughed, but it was the sort of laughter designed to fight off tears, you know? The big networks have all been trending inexorably downward for years. Shows that pulled in an audience of 20 million or more viewers only a couple of years ago are now happy with numbers in the mid-to-high teens, and the acceptable slice of the demographic pie is getting ever narrower. (Expect a press release someday soon boasting that a reality show won its timeslot among redheaded girls ages 11 to 11 ½.)

As the audience shrinks and the networks increasingly program for niches instead of the general public, they resemble cable channels more and more.

There’s a lot to be said for the cable model, where lowered expectations and a smaller inventory of original programming has led to instant classics like “The Wire,” “The Shield” and “Mad Men.” But while “Mad Men” is a wonderful show, it gets two million viewers when the winds are calm and the planets are aligned. It’s in no danger of becoming such a big hit that people at the post office will laugh at your Freddy Rumsen impression.

We’ve been heading to this point for decades, long before NBC picked Conan O’Brien to take over “The Tonight Show,” even before Jay Leno was chosen to succeed Johnny Carson.

In the late ’80s, Fox recognized the financial advantages to looking like a network without being one: the fledgling channel deliberately didn’t program the 10 o’clock hour because that would have made it, under the F.C.C.’s definition at the time, a broadcast network and subjected to much stricter regulations. (Back then, Fox couldn’t have owned its own shows, for instance.)

The F.C.C. has since relaxed those rules, and Fox is now technically a network. But the very concept of a network has lost much of its meaning.

Of course, the networks still do good work — even in its end-of-empire days, NBC has given us “30 Rock,” “The Office” and the deliriously funny “Chuck” — and on occasions like the Super Bowl or an “American Idol” finale, they even bring in big ratings that evoke the good old days of a mass medium for a mass audience. But several generations now think of NBC, ABC, CBS and Fox as just four channels in a 500-channel spectrum. Really, the only thing that distinguishes them from the cable channels is that they still try, most nights, to be broadcasters, generalists in an age of specialization.

To use a pop culture metaphor that everyone should (I hope) understand, the networks are Wile E. Coyote running off a cliff. So long as they pump their legs and assume there’s solid ground beneath their feet, they get to keep moving. But as soon as one of them gives up and looks at where it is, as NBC has with the Jay Leno deal, there’s nowhere to go but way, way down.

Thursday, December 18, 2008

Digital Media - Local Becoming Personal

It is not enough to be local anymore. Sure it's nice that a website can capture your zip code and demographics and provide potentially locally relevant content and ads. But for content and advertising to be most effective and efficient. It must be able to understand the users' interests, needs, and wants as well. Let me give a few examples:

1. Your zip code may tell you that you live in the NYC metro, but it doesn't tell where you are going. Learning that you are seeking weather information in Southern Florida could lead to multiple relevant info to be pushed to your screen including airline and rental car information, dining and tourist suggestions, and packing tips including buying sunscreen, new bathing suit etc.

2. Searching for information on having a baby might just bring up information on buying a minivan for a new family. And once you've perhaps made a minivan purchase, that content would shift to service, after market devices for the car, or perhaps car information for a smaller second car.

3. Lastly, local news may not be relevant to you. Living in the market doesn't necessarily mean you care for the local info from that market. As an out of market sports fan, I would prefer to receive sports information for my teams and not just the area sport teams. I may live in NJ and prefer that any news only include NYC and NJ and exclude Westchester and Long Island. The content must be customized for my interests.

Websites are moving in that direction. As you search on iTunes or Amazon, you are presented with options and recommendations that may be of interest to you. It is becoming clear that all media content and advertising must continue to be personalized for the users' experience. Assuming that all local is relevant may be missing valuable opportunities to effectively reach them with information and messaging that will be of interest to them. We cannot continue to inundate the user with messages that may not be of interest to them. Too many non relevant messages cause us to turn off entirely and not see anything. Staying personal to the needs of the user will make the interaction, whether it is through the TV, web, or mobile phone, more valuable and more effective.

Tuesday, December 16, 2008

Stars send anti-strike letter to SAG

Finally some dissension in the ranks as some notable actors try to bring a rational voice to the discussion. Recognizing how bad the economy is, they are urging their fellow actors to call off the strike vote which is scheduled for January 2. If SAG thinks that a strike authorization vote will give them more leverage and legitimacy at the negotiation table, then they are poorly mistaken. The writers strike hurt everyone; AFTRA, the other acting union, has an agreement, as do the DGA and other unions. SAG is not about to get a better deal. And as the current economic situation is proven, it is still about pennies and not dollars. Arguing over distribution models that aren't yet proven is not seeing the forest through the trees. yes, distribution of content is changing; but, it means negotiating a shorter agreement till a winning economic model emerges. "'None of our friends in the other unions are truly happy with the deals they made in their negotiations,' the missive said. 'Three years from now all the union contracts will be up again at roughly the same time. At that point if we plan and work together with our sister unions we will have incredible leverage.'" Now that is the voice of reason.

Monday, December 15, 2008

Pew: Most Will Access Internet Via Mobile By 2020

Our cell phones have become our mobile computers. Sure, we can still make calls with them, but they are our lifeline to content - information and entertainment. Feel lost when our cell phone has lost power, or worse still, we left it behind. Today, our cellphone takes pictures, plays our songs, locates where we are going, and gets us scores, stock prices, Facebook updates, and tons of other information. The more we use it, the more valuable it becomes.

And so the Pew Research does not surprise many. "Wireless devices will be the primary means of connecting to the Internet for most people worldwide in 2020, according to a new report by the Pew Internet & American Life Project." In fact, it is more likely to occur far sooner.

What is next for the cell phone is easy to predict: convergence. "Others believe the limitations of the mobile screen will remain a barrier to wider types of use. According to Hal Varian, chief economist at Google: 'The big problem with the cell phone is the UI (user interface), particularly on the data side. We are waiting for a breakthrough.'"

Apple's iPhone has already brought a better UI to the masses and more innovation should be on its way. What I expect is that the cell phone must more easily "talk" to the PC and TV. Watch an ad on TV or PC or mobile screen and interact with it through your phone. Capture a coupon to virtually bring to your supermarket. Get the closest car dealership to your GPS location. Play games between your mobile screen and the PC or TV. Vote, collect a recipe, share a show with a friend.

Advertising is moving toward more interactive capability. Add to that the mobility of the cell phone and let these devices interact with one another. Who needs a TV remote when your cell phone is by your side. Yes, we want to use the phone to access the internet, but we also want the phone to interact with the other devices in our lives!

Friday, December 12, 2008

Entertainment Weekly Considering Going Online-Only?


How can a weekly entertainment magazine compete when its information is being seen and consumed on a daily basis online. And while subscription may have dropped in 2008, EW says publicly that they have no plans to drop their print edition. The challenge is that subscriptions will continue to drop as their consumers stop renewing. In fact their audience seems to prefer consuming their content on the web, as their traffic their actually grows. Consumers may enjoy the content that EW offers, but their consumption patterns are changing and so must EW.

First, stopping a print subscription does not necessarily mean stopping a digital subscription. Using digital readers like Kindle and Sony will save printing costs. perhaps consider bundling your subscription with others in your family of "magazines" and offer a free reader with a 2 year subscription to three digital mags of the consumers' choice. Bundling has worked for the cable industry, it might just work for digital magazines.

Otherwise, the path seems clear. EW, like the Christian Science Monitor before it and others soon after, will be announcing the end of their magazine subscription. With online competition from its own web site as well as others like Perez Hilton and TMZ, delivering the latest entertainment news on demand, technology is killing the print edition.

Thursday, December 11, 2008

CBS May Drop Affiliate TV Stations, Les Moonves Says


While Marketwatch didn't quote Les Moonves directly, this is a CBS site and it makes the news much more credible. The comment reads "that in 10 years, CBS may no longer have traditional affiliated TV stations, but could offer its feed straight to cable and satellite operators. For now, however, the network has contracts with local stations that are binding for several years." But is 10 years too soon or too long. Today, the networks are having a hard time filling their current air time. To be responsible for 24/7 programming may be a bigger financial issue than they can already afford. NBC has already announced that they are replacing 5 hours of prime time programming with Jay Leno. How would they fill the off prime hours, too?

Technology has changed the game. Already we are seeing local affiliate news teams dismiss anchors, reporters, and staff to remain lean and mean. Cable distribution will enable local advertising breaks and access to interactive applications. Local affiliates may have to either combine into more regional than local nets or morph into stand alone networks. For WCBS and others, it means negotiating a separate channel on the cable line-up from the CBS national feed.

It seems that localism is losing to regionalism. Cable companies are closing local offices to compete more regionally against their distribution rivals. Other companies are also consolidating operations to handle more activities with less labor. Technology has had a hand in this too. Need support, your phone call to a company support desk might just be handle across the continent. Where local once mattered as a competitive distinction, cost efficiencies mean regional or even global matters more. For the local TV station, Les Moonves may just be right and their days are numbered.

Wednesday, December 10, 2008

Actors Union Urges Members to Approve Strike Authorization

Strike, strike, strike. Is it just talk or is it a serious threat? Yes, people are watching the web; Comscore just released its latest metrics and they show huge year over year growth. Hulu has jumped up to 6th place and average usage per viewer has increased. But advertising revenue is dropping and online media has been difficult to fully monetize. As Jeff Zucker has said that he fears they are turning TV dollars into digital pennies. The unions are fighting for a bigger share of the digital world when they are ignoring the fact that their bread and butter revenue is drying up more quickly. "Bill Ratner, a voice-over actor who records commercials and teasers for television programs, said he will vote against authorization “partly because of the economy” and also because not enough is known about the value of online programming." Instead of following the trend, SAG needs to look at the aggregate of usage, regardless of where the content is being consumed. Take a percentage of the whole revenue, not a percentage of each distribution piece; otherwise, they will find themselves on a wild goose chase.

Back to a potential strike, with so many layoffs being announced, cities in economic hardship, and company's revenue down, now is not the time to strike. It may be an idle threat, but if it becomes reality, it will be the final straw. NBC is already reacting to the high costs of TV programming; with the announcement of Jay Leno taking 5 hours of prime time programming, they have reduced their costs tremendously. Talk shows pay very little. Inexpensive programming that can be repurposed cheaply for the web. That is how NBC will beat SAG. Add more game shows and reality programming and the unions will be fighting for non-existent jobs. And as for the movies, independent films, foreign films, and non SAG productions will find consumption. You may kill movie theater business, but viewers will find it on the web and push it to their TV.

Tuesday, December 9, 2008

Prime Time on NBC is Changing - Can It Work?

Imagine this scenario: The writer's strike stopped production of broadcast content, TV advertising revenue, like other media is down, and forecasts are for more decline. The actors union is threatening to strike which would shut production again. Costs are going up and revenue is going down. With NBC, repeats haven't been working, new shows haven't been working, old shows are getting more expensive to produce and are seeing their audience declines. Solution, talk show programming weekdays on prime time!

When the announcement was made that Jay Leno was being taken off the Tonight Show to be replaced by Conan O'Brien, the speculation was where Leno was going. To ABC to compete against his former show? Or to Fox (which has had a lousy history with talk shows - remember Joan Rivers and Chevy Chase). Well today's announcement by NBC essentially kills two birds with one stone. They keep Leno and they fill the primetime with cheap programming. "Interesting how this news comes right after NBC Universal chief Jeff Zucker told an investors conference today that he's considering cutting the number of hours and even the number of nights that the network airs programming. Since The Tonight Show is a cash cow, Zucker no doubt figures that Leno at 10 PM could be another."

But can a talk show/variety show work on prime time, 5 days a week? I personally am a fan of seeing a variety show come back to prime time. And while Rosie Live was a fiasco, a polarizing host with frenetic pacing, the concept has potential. But it is not a five night a week show, nor should it be a talk show. Five nights will kill this experiment....FAST. And what will it do to a Conan hosted Tonight Show? I'm afraid, it will be viewed as competition and could actually kill the Tonight Show franchise once and for all.

Let me propose to NBC how this show should be developed. First, pick one night. Second, move it to the family hour - 8pm. Next, relocate the show to Vegas to utilize a different talent base. While some of Jays bits should transfer, the new local provides an endless resource of Vegas talent to draw from as well as tourists to make fun of. You also benefit by getting audiences interested in attending the show. Live or taped, your call, the viewer won't object to either. Lastly, make Jay more the master of Ceremonies and less the centerpiece. One bit a show is fine but the remainder should be the acts onstage. These changes will provide you with an inexpensive program, a greater chance of ratings success, and won't damage the Tonight Show brand.

Don't follow this advice and lets count how many shows air before this 10pm fiasco fades to distant memory.

Monday, December 8, 2008

Once Something Is Free, It Is Hard To Start Charging A Subscription


Free samples have proven a great marketing tool to get customers to try something before they buy it. But in the case of online content, when content has been given and consumed for free, it is hard to convince the user to start to pay a subscription fee, even with the incentive of no advertising. Perhaps it is that the consumer has got hardened to the fact that there is always advertising. And in most cases, even with a subscription (newspaper, magazine, cable TV, etc.), there is both subscription AND advertising.

In the case of Facebook looking to offer a premium subscription model, ad free, a paltry 2.4% would be willing to pay about $40 a year. There is some elasticity in the model. As the proposed price point is reduced 25%, another 2% would be likely to pay. And likely to pay and actually buying a premium subscription is most likely much lower than that. Linked In has tried a premium model as well, offering additional services and better information for a fee. Whether they are successful or not, only they can tell us.

Still this was an interesting study by Ad Age. In the case of the internet, the revenue is still in authorizing the connection to the web. The cat seems out of the bag to try and convert free content into paid content. With barriers of entry onto the web so low, anyone can author a website and deliver content, content can be copied and share easily, and free content has become the status quo. Today, it seems that advertising and e-commerce are the best way to produce revenue.

Friday, December 5, 2008

Magazines Rethink Strategies to Deal With Economy

Magazines should not be the only type of content companies to rethink their strategies. This same retrenchment will affect all media outlets: newspapers, radio, TV, film, etc. "A perfect storm of sectoral pressures (rising paper and printing costs, plateauing circulation across most titles) and the broader economy’s woes have swallowed profits and revenues..." This statement is relevant to every outlet that relies on either subscription or advertising or both. But it is not just today's economy that is to blame, changing technologies and environmental issues add to these economic woes.

There is good news. We are consumers on content. There is an infinite appetite to consume and a need to be entertained, interested, informed, and educated. We may change our consuming habits but those companies that read the trends will adapt to reach these new behaviors. It may be timing and a little bit of luck, combined with good strategic thinking and tactical solutions.

Thursday, December 4, 2008

Economic Turmoil As These Doors Close, Which Ones Will Open?

I consider myself a very optimistic person. As I watch our economy deal with a recession, it comes with many costs. And unfortunately the list of layoffs keeps getting longer:
AT&T - 12,000 workers
Motorola - 3000
Viacom - 850
Adobe - 600
NBC - 500
Comcast - 300
Ticketmaster - 300

And more announcements will come very shortly.

It has already affected consumer spending and retail is facing it head on. Bankruptcy is touching Linen and Things, Circuit City, Bally's, and perhaps soon one or more auto manufacturers.

I am empathetic to those affected by this retrenchment. Change does not always mean growth; sometimes it requires a step backwards before driving ahead. But I remain optimistic, even as this list is sure to expand, that the economy, and us as individuals, will be stronger and healthier in the long run. I remain optimistic that even as one door closes, another opens.

Cable - If You Can't Join Em, Beat Em!


Two interesting articles in today's New York Times. On one page an article headed, Who Needs a TV? I’m Watching on a Laptop, and on the next page, another article, YouTube and Hulu Visit the Living Room. The first highlights the fact that with video at you fingertips on the PC, you get what you want, when you want it, where you want it, and with limited commercial interruptions. The main limitations remain sports and newer movies today, but that is a short term problem that will be solved.

The second article should scare cable operators and linear networks even more. What is interesting about the article is not either Hulu or You Tube; rather, the device to connect these services to HD TV sets. "The Neuros Link is a device that connects to a television via an HDMI cable and can stream Web video to any HD display. The device requires a broadband connection and little else: there is no subscription fee, because the device brings in free content from the Internet." Now you have your streaming content and see it on a big screen Hi Def TV set.

So what saves the operator - making the set top box more ergonomic and flexible than it is today. Add a web connection, add interfaces to the Wii and PS3 for direct downloading, add Tivo, and move its functionality to a remote control that is easier to use and simpler to work. Save networks by enabling interactive advertising across all video so that it recognizes brands and connects to relevant content.It is time to think "outside the box"!

Wednesday, December 3, 2008

Are There Too Many Content Choices - Condé Nast Pulls Plug on Properties

Classic business lifecycle means that when products and services move from segmentation to fragmentation, then customer shares get smaller and smaller. Over time, these fragments can no longer sustain their business model and must get acquired or disappear. Look at any industry, any product line, and eventually, because of internal, technological, environmental, and other factors, consolidation eventually occurs and the fragments return into viable segments. Need some examples, how about the auto industry today, Accounting companies, Banks, and yes even content.

Condé Nast is shutting down sites and others will follow. If they can't adequately create a business model that will become profitable, the brands must adapt or die. What surprises me today is that TV networks have yet to see much consolidation. Currently, I would describe the number of cable networks as highly fragmented. If history is a guide, then it cannot sustain itself and reductions must occur. Initially, I expect some brand extensions to reduce back to its parent network. If the network's niche cannot sustain a positive cash flow, the network may need to go dark. In addition, alternate ways to view content, via VOD and the web, may limit available content on these extension brands. Lastly, declining ad revenue means that their is less money to support too many networks. This will filter down to ultimately affect a networks' longevity.

Networks need to own their content and all its distribution platforms. Those that rely on buying rights better buy all the rights, domestic and international, streaming, VOD, etc. Otherwise, it may lose its audience share and ultimately its value to the consumer. Streamlining the business model will become the next step. It's what the auto industry is facing today and what content companies are starting to experience.

Tuesday, December 2, 2008

Most People Don't Watch Web Video For More Than 60 Seconds


We tend to have short attention spans. If we don't like what we are watching immediately, we are quick to turn it off. Technology has put controls on the tip of our fingers and we tend to keep our finger on the button all the time. Add to that the infinite choice available on the PC and we are unlikely to watch more than a few minutes before stopping. "After clicking play, viewers only watch to the end of 5-minute long Web videos about 10% of the time. Only 16% make it through three minutes, Web video services provider TubeMogul reports, after measuring 23 million streams on six top video sites over two weeks."

Given that the PC lets us multitask, it is hard to devote our attention to one screen when we are juggling multiple projects. It becomes harder to devote attention to one screen or video for too long a time without some distraction, either on the PC or external (phone call, meeting, etc) to interrupt us. Still, this research simply looks at a moment in time. What I think confuses people is technology with content. All lengths are relevant, and ultimately the consumer decides where they want to watch their videos. How it is transmitted to a screen, TV, PC, or cell, will one day be meaningless. That is to say, we won't be differentiating between a web video and a broadcast video; rather, we will describe it as simple short form or long form. And to the question of monetization, the length of the content and the device it is displayed on may ultimately determine which type of advertising is most effective.

Monday, December 1, 2008

Recession Winner: Cable Operators

Television becomes the heart of the house. And in a recession, TV has become the place to forget our troubles. Today, TV access is through a pipe, a pipe that also connects us to more variety of content options. As household begin to watch their monthly spending, it seems clear that overall, cable TV is a low cost alternative to outside entertainment.

For a family of four going to the movies for one afternoon, the cost can exceed $30, not including popcorn. Monthly HBO is on third less for a full month of movies. And while households may even choose to downgrade their cable service to eliminate premium networks, they won't shut it down completely. They will still want networks to watch and have access to VOD and DVR entertainment to record and watch the shows they want when they want. And ask most households which service is most important and most will say their internet access. It offers cable the best profit margin and brings a continuous stream of content options to the home. Just try pulling your child off the PC.

So cable will continue to enjoy a solid monthly cash flow. Cable entertainment may even become more important than other forms of entertainment. Broadway is seeing a slew of shows close; restaurants are seeing less patrons as more dine at home. And cable feeds the home in multiple ways: TV, Internet, Phone. "People don't stop watching TV, using the Internet or making phone calls during recessions. That means the cable operators -- which offer all three services -- stand to strengthen while most everyone else hurts during the next few months."

Wednesday, November 26, 2008

Digital Sales Surpass CDs at Atlantic

When is the last time you bought a compact disc? As an avid ipod user, I rather download tracks than purchase the physical media. So it comes as no surprise to learn that digital purchases are beginning to exceed compact disc. "Atlantic, a unit of Warner Music Group, says it has reached a milestone that no other major record label has hit: more than half of its music sales in the United States are now from digital products, like downloads on iTunes and ring tones for cellphones." Listeners have changed their music habits and are consuming differently.

What is also interesting to note is that digital purchases are not simply for the music track, but that revenue is coming in from additional usages like ring tones. It reminds me of the old story about baking soda. How do you get more sales of the product; more uses and more usage. You don't just cook with it, you put it in the back of your refrigerator to make it smell better. With digital downloads, you add it to gaming and other applications and music finds more uses and usage as well.

Obviously, the fear of digital downloading is content rights and protection. With perfect copies made accessible, the technical challenge to eliminate free file swapping is a challenge. Technical innovation and marketing efficiencies will move consumers to prefer legal means to download for better content and better results versus inferior copies and less desirable experiences.

Tuesday, November 25, 2008

TiVo Dials Up Mobile DVR Site - Real Convergence

Finally, some real useful convergence. And no I am not talking about seeing the phone number of the call coming to my telephone appear on my television screen. I am talking about something better. Connecting two useful devices together in a meaningful way. For us Tivo fans, sometimes we forget to record a show. Recently a friend of mine was rushing home last Saturday because he had forgot to tape his U of M college football game. But now, even if we are forgetful, we don't have to worry. One call from our cell phone to our Tivo quickly will set a recording. "The new mobile site, at m.tivo.com, lets subscribers with broadband-connected Series2 or Series3 TiVos schedule recordings, while it’s also available to anyone to browse and search television shows." No rushing home required. If networks want to put a stop to DVRs, the answer is simple - put every show on VOD. Until technology can insert into the DVR, there is more control with the VOD; content owners should be expanding its titles and gaining better control over the experience with its viewers.

And how does Tivo take this convergence to the next level. Simple, make it two-way. Like a slingbox, enable shows I've recorded on my Tivo to be viewed on my cell phone. Now my friend can watch his Michigan football game through his Tivo to his phone. Again, no rushing home.

Monday, November 24, 2008

DVR usage making big changes in television viewing

Does it matter how you schedule your TV network if content can be found on VOD, streamed or saved to the DVR for viewing. What percentage of your TV viewing is real time? As I watch my viewing pattern shift, I rarely watch a prime time show at its scheduled time. Shows remain saved in my Tivo so I can enjoy them at my leisure. And I tend to rely more on the DVR because it allows me to watch more of the actual show in less time; yes I fast forward through the ads. I am not the only one who owns a DVR. "Nearly 30 percent of the nation's TV homes have at least one."

So what is a programmer to do. If you rely on live news, you watch in real time. Networks like CNN and CNBC become DVR proof. If you watch sports, you tend to watch live or time delay a few hours so as to not get the final score early and ruin the emotions of the game. And live shows on TV have a sense of "anything can happen" that may just encourage people to get the live feed before it is edited and sanitized for later viewing. "'More and more people are changing the way they consume television,' said Alan Wurtzel, NBC's chief research executive. 'In the next few years, we will rewrite all the rules.'" It will not take that long. In less than two years, the impact will be even more pronounced.

Some broadcasters don't realize that between streaming their content on Hulu or making accessible on VOD or even being recorded the first time it airs on their dvr, it is not necessary to air the show again. Yet some networks are using their Saturday nights to dump repeat episodes of the same show that aired earlier in the week. Perhaps it saves money, but it is driving the viewer to seek these alternative choices at a faster clip.

Networks should be less concerned about when they watch; rather, they should be more concerned about what is interesting to watch. Good content will be watched and consumed; the challenge is making better content. More distribution choices means the content will be consumed in multiple ways. Remember though, the DVR requires proactive taping by the viewer; VOD allows the viewer to be reactive. If more programmers made their content available asap on VOD, they might just reduce the need to use the dvr.

Sunday, November 23, 2008

Hollywood actors guild to seek strike

The economy is in a downward spiral, the entertainment industry has suffered badly from last year's writers strike, and every other union has agreed to a deal with the producers. So with faced with a lose - lose scenario, what should the actors do. If you guessed settle a contract, you would be wrong. The guild is planning on asking its members to strike. Let us just hope that the majority of actors in the union have a better understanding of the situation than its negotiating team. "SAG's national board has already authorized its negotiating committee to call for a strike authorization vote if mediation failed. The vote would take more than a month and require more than 75 percent approval to pass." So we could be starting the new year with another work stoppage, more unemployment, and a further blow to the economy. "But the studio alliance said it was untenable for SAG to demand a better deal than what writers, directors and another actors union accepted earlier in the year, especially now that the economy has worsened." In this case, I agree.

Beyond the troubles facing the entertainment industry, it seems that the union, regardless of the industry, has been hurting businesses from operating efficiently. From the automobile industry to New York's MTA, forced rules from unions in changing times create situations where there are jobs but no work. While there may have been a time when unions were necessary, I am hard pressed to feel for them when their demands seem untenable. Hopefully, the members of the SAG union will recognize the situation and work responsible for a cure. Another strike is not the answer.

Saturday, November 22, 2008

Comcast will close its CN8 network

"CN8, the East Coast regional television network run by Comcast Cable, will shut down by year's end, resulting in the loss of local news programs and sports coverage for millions in New Jersey. The network -- launched in 1996 and spanning the East Coast from Virginia to Maine -- will convert to two smaller operations, said company spokesman Tim Fitzpatrick."

Now I always thought that it would be the local networks that would help differentiate the cable operator from its competition. That is why Verizon will never get access to the Comcast Networks, Time Warner's NY1, and Cablevision's News 12. Interesting to learn that Comcast no longer thinks that unique content is an important differentiator. Or perhaps they felt it was simply not strong enough to matter. Whichever the case, it is a moot point. Perhaps for us New Jersey residents who will lose CN8, Comcast will be kind enough to replace it with NY1. For me, content is still king.

Friday, November 21, 2008

Senate Passes Analog Extension Bill

Last month I said that the transition date would be a mess and as most people wait till the last minute to act, an added month would be needed. Well the Senate has heard the chatter. "The Senate on Thursday passed a bill that would keep some analog TV stations on the air for 30 days beyond Feb. 17, 2009 in order to provide public safety announcements and information about the digital TV transition." I believe that they will actually need more than a month. Consumers do not understand what is going on with TV signals. When they finally turn on their TV and see static is when they will finally have to act. "'While there are claims that hundreds of millions of private sector dollars have been spent making Americans aware of the DTV transition, it seems that most Americans have no idea what it really is even if they have heard of it,' the lawmaker said." And while some have heard the message, fewer have comprehended how it will affect them. Extending the deadline is a necessary first step.

Will Web Video Kill Cable TV?

If your under 30, you probably don't own a wired phone; all your calls come to your cellular phone. And today, there are some people who don't have cable TV; rather, they rely on their broadband connection to watch their shows. "Call it Cable 2.0: You get many of the same TV shows and movies, often with fewer commercials. Better yet, you get to watch what you want on your schedule, not the cable network's, and you don't have to pay for anything more than a simple broadband Internet connection."

But will the web replace cable TV? As a distribution platform, I believe yes. But the company that serves you your connection will still charge you for that subscription, with price points to encourage you to take more of their services. Today it is called the Triple Play, tomorrow it will have a different name but essentially will be marketed to do the same thing, keep you from switching to another provider.

The big content companies don't want to give you access without subscription and advertising. That is their bread and butter. NBC and Fox own Hulu; the last thing they want to do is watch their subscriber revenue decline as a result of people downgrading their cable service to rely on web access. Unfortunately, they are on a slippery slope. "Such services offer few live broadcasts, an obvious drawback to sports fans or news hounds. And while cable and satellite services are rapidly expanding their high-definition offerings to satisfy the demand of the growing number of HDTV owners, you'll find very few high-definition video streams today." For those reasons, the numbers that do drop cable completely may be negligible. As deals start moving to the web, the change may occur more quickly.

Cable has its own toolbox to make the set top box a more valuable asset to the home. How the STB differentiates the TV experience from a web based experience will be key to success. And cable should have the backing of the branded content providers who aren't ready to lose the subscription revenue piece of the pie.

Thursday, November 20, 2008

PC Magazine Drops Print, Goes All Digital


For PC Magazine, print is dead. Will it drive other magazines and newspapers to follow, only time will tell. For a magazine devoted to computers, it makes perfect sense to drop its print format in favor of digital. It will be interesting to note how this change will affect the content and subscription. "For readers that prefer the traditional magazine feel, a digital version of PCMag will be made available to them. " Perhaps the time is right to make it especially for the Kindle and Sony Reader. This digital version should be different from its free web content. A digital subscription may be the answer.

I find it fascinating to see that the Wall Street Journal continues to make it work with both a print and digital subscription to its content. For some, the digital access may be the bonus; for others it may be the print edition that is nice, but the digital access that is most valuable. The trend is toward less printing and more online; PC Magazine may simply be leading the curve.

Wednesday, November 19, 2008

BBC America's Ancier: DVR Threat Must Be Solved

What is the threat - that viewers are skipping ads to watch the content. "The ability for viewers to fast-forward through ads using a DVR is the biggest challenge cable programmers face—and they must work with operators to figure out a solution, Garth Ancier, president of BBC Worldwide America, said in a keynote at the Future of Television conference here."

What is the solution, actually there are a few. First recognize why viewers started to use DVRs, too many ads during breaks. They found a technological cure to beat the system. It is nearly impossible to put the cat back into the bag. Still, networks should consider reducing the ad times on linear content and utilize product placement, interactive technology, and other approaches to reach consumers. Second, consider the Network DVR as an opportunity to segment and target ads more effectively and disable trick features when necessary; or perhaps put a brand ad on screen during trick feature usage. Lastly, enhance and expand VOD offerings to include all programming. If content is already recorded, the viewer won't have to take the proactive step to record their show in advance. VOD allows for pre-roll and other ad tricks. Still, if you overload the content with ads, the viewer will seek another alternative. To illustrate, look at Hulu. They limit their ads and have little or no negative consumer issues toward those ads.

These are just a few ideas to consider to solve the DVR threat. Most important it to view technological change as an opportunity, not a threat. Advertising on content is necessary to pay the bills; how it is done must be innovative, less intrusive, consumer targeted, and creative.

Tuesday, November 18, 2008

AOL is a Media Company


AOL finally has a strategy, or so they say. Its been a couple of years since AOL stopped being a portal and has had a tough time convincing people that it has what it takes to succeed. Unfortunately the AOL brand name has little cache or brand value. It's web properties, however, just may have a chance. Some of their more popular sites include Moviefone, TMZ, and 75 others. Those that front with the AOL name seem to me to have less appeal - AOL Money, AOL Music. If content continues to be king, then the AOL focus on solid content sites should eventually pay off. Still in a down economy, ads will continue to move from print to the web; building and growing content sites will allow Platfom A, their ad network, the chance to aggregate the value of all their content sites and increase their revenue.

So far, it is paying off. "According to comScore Media Metrics, traffic to the portal, which include 20 new niche such as men’s lifestyle channel Asylum.com, rose 7% to 54.3 million unique visitors in October from the same period a year ago. Page views more than doubled to 4.2 billion. The increases marked the 21st month of consecutive growth for AOL." Good luck with the road show.

Monday, November 17, 2008

Web Video Chips Away at TV

One study says that online usage complements TV viewing, others say it cannibalizes. Can we have it both ways? This study suggests the latter, but it also says "online viewers don't mind the commercials too much." My feeling is that compared to the glut on TV, web video advertising is a pleasure. Sites like Hulu limit commercials to just one spot compared to TV which could have 3 minutes of ads. Comparatively, of course you wouldn't mind online commercials.

Another interesting analysis, "almost 60 percent of the respondents said they were willing to provide to advertisers some personal information about themselves in exchange for something of value, such as access to high-quality music videos, store discounts or airline frequent-flyer points." If TV would cut back on the glut of spots and use its technology to target spots and offer interactivity, it would find a more willing viewer as well. Just imagine clicking on a TV spot that would email you a coupon to download and take in to the store. The web may have the connection, but viewers still prefer long form content on their TV set. It will be the interactive potential that will make TV the better choice for the advertising dollar. And this is what Canoe will be able to offer.

TiVo, Domino's Offer Pizza Delivery Service for DVR Subscribers


Order a pizza from your TV, if this sounds familiar, it's because we've seen this before. Now Tivo has announced that it has partnered with Dominoes to let their subscribers order a pizza delivery through their device. "The TiVo service will help Domino's reach customers who might otherwise skip through its commercials on their DVRs, the companies said." As a marketing partnership,it will put the brand in front of customers, but as a service, it will be a dud. Customers are still much more likely to order by phone; they have yet to use their PC to order from a menu. Cable operators used this same marketing ploy years ago to add features to its set top box; it did not work. Customers will gravitate to the device that is easiest and quickest to use. Until the application proves more useful than the phone, customers will find no reason to switch.


"TiVo Chief Executive Officer Thomas Rogers has added shopping and video-on-demand features to attract users as cable and satellite companies roll out their own DVRs. The Alviso, California-based company lost 178,000 net subscribers in the second quarter, finishing with a total of 3.6 million." Tivo should continue to push its partnerships across cable operators as the better DVR for the set top. In addition, it should partner with game boxes like Playstation, Xbox, and Wii, to be their interface as well. It is partnering with those companies that will bring Tivo more customers.

Friday, November 14, 2008

Cable industry group says the Web won't kill TV

Canoe Ventures has a plan, tie together the big cable operators to gain scale, target meaningful subsets within, advertise on brand name video content, and add a technological, interactive component. "Canoe has a direct pipeline into about 60 million cable-watching households in the U.S. and provides Internet service to a third of the country. It plans to use that reach." And with the cable box and remote, the ability to communicate with the consumer and get them to talk back. "For example, it's going to add voting and polling so consumers can vote for their favorite player during a football game or answer ...... the final question on "Jeopardy." It's also planning a feature that will allow you to click a button on your remote control to get a recipe, a sample or a coupon, and another feature that allows you to click on a movie ad to see the full trailer or on a video game ad to see a demo." Kinda cool.

Advertising on TV can no longer be a one-way experience. It is meant not only to build brand awareness, but advertisers also need to see meaningful results. It may not be to actually purchase a product or service, but to request more information be sent perhaps immediately to the TV, or perhaps the email address, or mobile phone, or even snail mail. It is gaining that interaction which is Canoe's next step.

The set top box provides valuable information to better target the message to the home; the cable box to interact. We rely on that box to allow the advanced features to work; VOD, DVR, and such. The challenge is getting the consumer to accept the set top box on every set. The home needs to be "connected" so that the box rests behind the set, not on top of it.

Thursday, November 13, 2008

Cable Price Wars?

Is price the primary motivator for consumers to switch their cable provider? According to the survey mentioned, the answer is a resounding yes. Still it is interesting to find that cable operators in competitive markets have shown some sub growth. And while the low hanging fruit, consumers buying only one service from cable may switch to telco, the multiple service customer is growing. The triple play packaging strategy has proven very successful at retaining consumers. "It looks like that for all the technical innovation, the promise of the triple-play bundle isn’t about service, but about the bargain. " How elastic that price point is to the decision to switch needs to be analyzed.

But price is a factor and in a recessionary economy, will become more important in the consumer purchasing decision. But it is more than price for the consumer. Some channels, like NY1 and Newschannel 12 in New York, are exclusive to cable; its importance to the consumers' viewing experience will affect the choice they make. Latency, interactive features, and customer service should not be ignored. Some people will switch because of price; for many others, these other factors matter, too.

Wednesday, November 12, 2008

IBM to Install Broadband Over Power Line For 13 Rural Utilities


First cable operators had to worry about satellite providers, next came telcos, and now power companies. "Under the $9.6 million agreement, IBM will install IBEC’s broadband-over-power-line networks at electric cooperatives in seven states within the next two years." And while IBM is working with rural electric companies to provide broadband deployment, there is nothing to prevent them from taking this technology and deploying across the entire country. For these rural markets, it has not been cost effective to wire these homes for cable. At less than 10 homes a mile, the cost is extravagant. Existing power lines make deployment easier and helps connect the entire country, "closing the digital divide that exists between well-served and underserved America." As the technology improves, broadband over power lines will be able to provide a competitive product that could provide not only data, but phone and video as well, to all consumers.

Tuesday, November 11, 2008

The Connected Home - Solving The Digital Device Dilemma

There is a lot of talk about the portability of content, TV, PC, Blackberry, Phone, but how about the ability to simply move it effortlessly inside your own home. Record a show on one TV set in the living room to watch on another in the bedroom; move your songs from the pc to play on your kitchen speakers; Call your Tivo to remember to record a show. We are clearly in the early stages and it is clear the technology must operate under a common language to work most efficiently.

One idea that is just coming to fruition are using the cable backbone to connect phone with TV. When a phone call comes in, the TV displays the number, letting you know who is calling before getting out of your seat to answer the phone. Its a first step, but it recognizes the potential of connected devices. It is how cable operators can maintain a foothold on content, especially when it involves an interactive experience. And as these devices and interactions get more complex with the multitude of devices to connect, service provided by the cable operator can be its greatest asset. Most people are tech savvy and need devices that are plug and play; at the same time, they need to know they have an expertise readily at hand to support them if trouble arises. Per Apple's Steve Jobs, "The digital living room should come with the warning 'some assembly required,' he said. It's not an easy thing to set up, as evidenced by the number of people who buy high-definition (HD) television sets, hook them up incorrectly and can't use the service as intended."

As we keep putting more digital devices into our home, connecting them together becomes a necessary next step in this changing entertainment landscape.

Sony Pictures Puts ‘Pineapple Express’ iTunes Download on DVD, Blu-ray


How do you impact the revenue of dvd sales. Differentiation has helped - alternate endings, shorts, games, and other added features. Blu-ray came next, a better picture to complement your HD TV. But dvd sales have been declining as consumers are renting rather than buying content. VOD and streaming have replaced dvd purchases. Well Sony seems to see the writing on the wall and if you can't beat them, join them. Consumers want choice and cable operators have shown that bundling works. The result, is a dvd purchase gives you the stream for free. "The two-disc DVD and Blu-ray Disc offerings of Pineapple Express will include a free download of the film from iTunes, in addition to a downloadable digital copy for PCs or the PlayStation Portable." It is that flexibility that might just breathe new life into the dvd revenue stream. Consumers are seeking mobility and flexibility and Sony seems to be delivering it to them.

Monday, November 10, 2008

CTAM - Cable Has The Best Positioning

The cable industry likes how it is positioned against competition in the content distribution space, despite a bad economy. The use of bundling of communication services - cable, phone, and data, the consumer of these products is less likely to switch or drop services. "Cable subscriptions are still cheaper than taking the family to two movies a month, executives noted. The bigger challenge, going forward, is figuring out how to let consumers move content they have already paid for among the technological platforms they utilize." That mobility seems to be the next step in controlling the customer. Verizon and AT&T each bring a huge fourth component to the mix, wireless. What they have yet to do is build that product into a bundle as successfully as cable has done. And cable is looking to add a wireless partner as well.

"Ellen East, executive vice president and chief communications officer at Time Warner Cable, said her company is looking at a way consumers can authenticate themselves as paid subscribers when logging directly onto programmer’s sites. That authentication would allow the viewers to access television content on their PCs or mobile platforms. " It once again calls into question the relationship between content and distribution. Content owners are keen to control where they exhibit and how they are reimbursed; distribution companies offer the backbone and the ability to aggregate and monetize multiple pieces of content to the subscriber.

Consumers are looking for more ways to control when and where they are viewing content. And as we have become a more mobile society, the content needs to follow us, not us to it. It may not make a lot of sense that consumers may be watching long form content on tiny screens, but it is for them to decide what serves their need best.

Thursday, November 6, 2008

Changing Face of Sports On TV


The NFL Network is back again, starting tonight with more football on TV, and less people watching. The trend continues of watching games get moved to higher priced channels.

Remember when tickets to pro games were priced at family friendly rates. Remember when local pro football games were only available on TV when the stadium was sold out; and when it wasn't, the local broadcaster or bank chipped in to buy the seats so the game could be shown on free TV. Remember when TNT and ESPN each got 8 games to air and football fans had to buy basic cable to watch more games. Baseball did it too with regional networks like Prism, Empire, then YES and SNY and others. TBS once the home of Braves games moved them to another network, Sports South to further divide the pot and increase the revenue. Our history is to keep moving our sports off free TV to tiers and now it seems to subscription. Back to football, remember when Direct TV sold a package to every out of market football game to the rabid football fan, causing them to drop their cable subscription to buy further up into a satellite subscription. And the NFL, hoping to further move fans to pay more for access, has built a set of games that only some cable operators are making available for purchase. While the NFL fights to be paid a license fee to make this channel available year round on basic, despite the fact that pro football games are only on for a couple of months. "'I’m disappointed people aren’t seeing the product,' Steve Bornstein, the president of the network, said Wednesday by telephone. 'That’s my frustration. We’re putting out a good product. It’s a product that people seem to be happy with. My viewership is up even though I have less subscribers than I did last year.'”

And what is the next step for the NFL. As the MLB has proved, create a subscription website that offers a mosaic of all the games to choose from. Buy one game a la carte or buy the subscription. TV makers are pushing internet into the TV set. Disney and others have pushed films into Tivo boxes. What is next for the NFL, the same thing. Bypass the cable operator and push subscription over the web and through other "connected" boxes. For those that want to watch their out of market games, it seems the logical next step.

Wednesday, November 5, 2008

FCC investigating cable TV pricing policies

The FCC continues to have a frosty relationship with the cable industry. While the issue may be how cable companies are tiering channels into higher priced packages, using the transition from analog to digital as the rational, it may just open another can of worms. Consumer confusion over the transition provides perfect cover to push digital boxes to every TV set in a cable home, even though these boxes are not necessary. More boxes, more fees, more opportunity to sell in more services. As the FCC looks into pricing practices, what else might emerge.

And how high can cable pricing go. Under today's economic conditions, will we soon hit the mark where homes opt out of cable and back to their over the air antennae. With a high speed line to augment their viewing habits, cable subscription may start to see a real hit.

Tuesday, November 4, 2008

Watching TV and Surfing the Web At The Same Time

Did they really underestimate peoples' abilities to multitask? How tough is it to surf the web and watch TV? In our own youth, we listened to radio or watched TV and did our homework at the same time. Could it be that different. The answer is no. But it took a Nielsen study for others to intuitively figure it out.

"The findings, part of a new study released by the ratings measurement company, revealed that broadcasters worried about losing viewers to the Internet may not have to fret after all - and explains a paradox between rising TV viewership and the growing popularity of new media....Overall, Internet usage has grown by about 9 percent compared to last year, the survey found, but TV viewing still dwarfs Internet usage. On average, people spend about 127 hours watching TV each month and 26 hours online."

It is not a zero sum game and internet surfing is not meant to replace TV viewing. And sometimes we even put down our mouses to enjoy the sit back experience of TV exclusively.

Monday, November 3, 2008

Is the Internet Killing Cable TV?

Programmers have been enjoying a duel revenue stream for quite a while; payment per cable customer and advertising revenue. Programmers then introduced VOD and viewers began enjoying video content with limited, if any, commercials to interrupt the flow of the show. And now, pressured to provide content on demand regardless of the device, added their shows on the web with Hulu, Joost, ABC.com, and many, many other platforms to stream and enjoy your favorite TV shows and movies. So why pay for cable when all this content is accessible elsewhere.

For some, continual price hikes from their cable operator has accelerated this desire to disconnect the cable box. The article calls these folks "cable-cutters". TV manufacturers, like Sony, are building TV sets that directly access the web. And don't forget Apple TV either. Tivo has partnered with numerous content providers to bring on demand through the web easily to the TV set. And when broadcasters go digital, video quality over the air will be as good as cable. Consumers are pushing back. "Thousands of hours of TV shows and movies are available for free on the Internet, or via paid download and rental sites — services made possible now that broadband service from cable and telephone companies is widely available. Local stations preparing for the digital-TV transition next year are already broadcasting free high-definition TV, sometimes at a higher level of signal quality than a cable system delivers."

A bad economy certainly does not help this trend. Cable operators have already taken notice. Those that disconnect from taking multiple products from their provider will see their discounts expire and their rates soar for an internet connection. Some will start putting a streaming meter on internet usage. Telcos are providing an alternative to cable in the streaming space. It may spell new opportunities for other wireless distributors to enter the market.

Today, the number of "cable-cutters" may be negligible; still, it is a slippery slope that cable operators should be aware of. First comes dropping premium channels, than dropping to basic service only. Price your service too high and watch the customers leave for greener pastures.

Friday, October 31, 2008

TV Watching and Internet Use Complement Each Other

"According to a new Nielsen report, the more Internet you use, the more TV you watch; 31 percent of in-home Internet activity takes place while the user watches TV. (emailed release)" I look forward to learning more about this report. I never expected to hear that this was a zero sum game; rather, it paves the way for more interactivity on the TV set. Today, I am able to size a TV screen on one portion of my monitor as I surf through the web or work on an excel spreadsheet, the sound of CNBC announcers on my speakers. When I need to answer the phone or watch a video, I simply mute the TV sound. I was raised to multitask and expect that the younger generation is even more adept at it. In fact, I am only surprised that the research doesn't indicate an even higher percentage of simultaneous usage.

Obama Ad Seen By 33.5 Million Viewers


I am not using this blog to endorse a candidate. What I find remarkable is that the Obama infomercial, airing on numerous broadcast and cable networks, delivered ratings that surpassed the normal fare on each network individually. It beat the ratings for Old Christine on CBS, it beat the ratings for Knight Rider on NBC, it beat the ratings on ABC who actually ran their show, Pushing Daisies opposite the Obama program. And on cable, it beat ratings for Keith Olbermann on MSNBC. Wow!

There is an incredible thirst to see and hear these candidates before Tuesday's election. That the interest level drove people to watch TV, regardless of the channel, tells me that interesting programming draws viewership. Does it also say that the current programming on TV today is so unappetizing that people have turned away from TV. Perhaps. I may be a big fan of SNL but how many times can NBC keep running the show on prime time. It may be topical but it may also be overkill. Or perhaps NBC has nothing else to present. "During a season where television hits are hard to find, one NBC executive suggested jokingly Wednesday that Mr. Obama might be invited back to fill the 8 p.m. Wednesday time slot on a regular basis." The writers strike may have done more damage to broadcast TV schedules than we could possibly imagine.

Back to the Obama infomercial, its rating success only lacked local commercial insertion to make it even more profitable. While the programming was duplicative, it is interesting to see where people chose to view the show. It was exactly the same show regardless of where it was watched. It speaks to brand preference and would be fascinating to learn why viewers picked the channel they did to view this show. For me, I picked Fox; Game 5 of the World Series would follow and I didn't want to miss a pitch of this Fall Classic.

Thursday, October 30, 2008

New Media's Dirty Little Word...Revenue

Internet users have become jaded; we like getting our content free of charge. Perhaps it comes from being a free TV generation, expecting ads in exchange for shows. Cable television developed the notion of subscription and found that they could push this "membership fee" while continuing to take in advertising revenue too. And so it is not unusual to hear that websites are also looking at subscription to enhance their revenue model. But when usage has been free, what to do. The answer, create a premium account that incorporates added features "-- asking customers to pay for things. Namely: Pro accounts, plus accounts, premium features, enterprise editions, and white label versions." Examples being cited in this article are sites like Ustream.tv, Meetup, vimeo, and others.

Will this please the Venture Capitalists who have been financing these business - absolutely. Content is king...cash is god.

First Disney, Now Tivo Partners With Netflix

Just a week after announcing its deal with Disney, Tivo has announced another major partnership. Joining forces with Netflix to provide the digital distribution arm for movies. And Comcast has announced that it is expanding its rollout of its DVR with Tivo into the Chicago market. Tivo seems to be successfully turning itself into the preferred box for DVR and streaming content, enabling the TV set to access an infinite assortment of content. It seems the only thing missing for Tivo is a partnership with Hulu, followed by putting a Tivo into your PS3!

Back to Tivo and Netflix, it seems like a win-win relationship. "Under the partnership announced Thursday, the latest generation of TiVo's digital video recorders will be able to beam selections from 12,000 movies and TV shows offered through Netflix's streaming service, which must be piped over high-speed Internet connections. TiVo's DVRs will start catering to Netflix subscribers in early December."

At the same time, a number of cable companies have announced that they are raising their monthly subscription rates. In a recessionary economy, is this the right move. While Netflix competes with premium nets like HBO and Showtime, consumers may find that they need to cut back on their spending. One move might be to reduce your cable bill down to basic channels only and buy a Netflix subscription. The cost savings may just be worth the move.

Wednesday, October 29, 2008

Mourning Old Media’s Decline

David Carr of the New York Times asks an interesting question regarding his article, "Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web." I am in the minority, I guess. I still get the New York Times delivered to my house and still enjoy reading the newspaper. At the same time, as I share it with my wife, I tend to go to the web to read stories in sections that she may have taken. And when I am in full commuting mode, I just might consider a Kindle to support my reading habit.

Newspapers, like cable television, has enjoyed a two-tiered revenue model of subscription and advertising. The growth of new technology has moved content outside the gated, subscription window, into an open access model. Consequently, the subscription model has lost as it is no longer necessary to "pay to play". Cable operators should take notice of this trend. As video content leaves the gated walls of its liner channel for Hulu and online consumption, the consumer may stop paying for its cable subscription and devotes itself to a web based experience. Any monetization will come from advertising until the industry figures out a new media subscription model.

Web based advertising is cheaper than print advertising. It is far easier to measure hits and target segments. At lower CPMs, it is harder for the gain in web advertising to offset the loss in print advertising. For the print industry today, it has led to a reduction in costs to offset the lower revenues. Mistakenly, some of that reduction is coming in the form of editorial cuts, the writers and creators of content. But without content, what do you have to monetize? "At the recent American Magazine Conference, one of the speakers worried that if the great brands of journalism — the trusted news sources readers have relied on — were to vanish, then the Web itself would quickly become a “cesspool” of useless information. That kind of hand-wringing is a staple of industry gatherings. But in this case, it wasn’t an old journalism hack lamenting his industry. It was Eric Schmidt, the chief executive of Google." Content is king and branded, respected content has value.

Web Video Revenue Problem Solved


How do you monetize web videos; well, according to Silicon Alley its product placement. They cite 6 reasons why product placement works including anti-skip, always connected with the video, and measurable. At the same time, Silicon Alley warns in a separate editorial that product placement can prove embarrassing. Not sure I totally agree; none of their examples seemed horrible. What may be worse is missed opportunities. One example would be M&Ms choosing to not be featured in the movie, ET; instead, Reeses Pieces were substituted as the candy that attracts the alien.

For advertisers trying to determine where to place their brand, the key is that the brand name should already be known and its brand message understood. While an unknown brand may be featured, it may be unrealistic to expect that the viewer makes a connection to the brand and its value or preference. Product placement is not the only way to be successful with web video. Hulu's strategy that less is more, is also proving valuable. Less clutter means more likelihood that the message is heard and the message resonates with the viewer. "Fewer ads make the ones on the site more memorable, Hulu executives say, allowing the site to charge higher prices for the ad units."