ABC and ESPN Coming to YouTube… But Short-Form Only

If You Tube does one thing well, it is as a destination site to look for videos. And once those videos are discovered, it allows the viewer to see what people are talking about. And as a promotional vehicle it is an ideal fit for ABC, teasing viewers with short form pieces and linking them back to the brand site to watch the full episode. Brilliant! But the article only talks about ABC and ESPN, will Disney Channel content also be included? I'm hoping the answer is yes.

So why is there buzz still about a Hulu and Disney possible partnership? What does Hulu bring to Disney that adds more value than You Tube. It certainly doesn't bring added value to the brand name, only to the content piece. Certainly additional distribution points are useful for reach, but it is at an added cost that would drive viewers AWAY from their own sites.

The question that continues to be asked of Hulu and other sites that do distribute full length episodes is why; why give for free what the customer buys in a cable subscription. The model that Comcast and Time Warner have proposed is to only authorize web access to this content to households that also have a cable subscription. Disney gets a healthy subscriber fee and the revenue from Hulu surely won't offset the loss of cable subs.

This You Tube partnership makes much more sense; bringing short form content online and encouraging consumers to watch full episodes on their TV or on the Disney branded sites. Limiting full length episodes to 'authorized" cable customers could bring added subscription revenue opportunities as well. ESPN has already demonstrated that they can sell web content to cable companies; ESPN360 is a perfect example of that and Verizon currently offers it to its broadband customers. The decision to not strike a Hulu Disney agreement seems the better choice.

Time For Cable Companies To Fix Their Awful User Interfaces

As they say on SNL, it is time for the cable companies to just "Fix It!". As I have been saying on my blog, the cable set top box is what is truly killing the relationship between cable and the viewer. And in my house, I actually prefer a standalone Tivo to a cable DVR, even without access to premium or VOD on my set. Search features, trick features, speed, even an internet connection (which the cable box still doesn't have), all make the Tivo the hands down winner.

And while cable still waits to deliver, other companies, Netflix, Hulu, Boxee, Apple TV, continue to beat cable to the punch. "We are surprised by how lousy today's set-top box software is. The user interface has barely changed in ten years. Searching through programs on hundreds of channels (and various on-demand listings) requires an immense amount of patience or muscle memory. And the set-top box shows no signs that it's connected to the same pipe as the Internet." So why hasn't cable been doing anything to change? Cable seems to remain in a defensive position, worrying how to compete with satellite and telco, rather than how to be proactive and in front of the curve. Because cable is so capital intensive, the companies may be trying to recoup their investments rather than spend on better hardware and software.

But it seems the best strategy for cable is to do nothing. "They still have the benefit of owning their own dedicated pipe, having set-top boxes in tens of millions of living rooms, and having the best content, live -- which Internet-based rivals don't." At the same time, do nothing, and eventually you will be overtaken by others. Need an example, look at the internet provider life cycle - the dominance of Prodigy lost out to AOL, and AOL's grip went quickly from solid to fringe as cable broadband emerged. Eventually web access could do the same to cable. "But eventually, it's possible that most people won't need to pay a cable company $80 per month to get a solid entertainment experience. We -- admittedly, not TV junkies -- cut the cord last year, any many of our friends have, too. It's possible that through iTunes, Netflix, Hulu, TV.com, and services like Major League Baseball's MLB.TV, we'll get enough stuff to watch. And with excellent video browsing software like Boxee to put it all together, the cable companies could actually face a real challenge."

Change is a coming and cable companies need to adapt their interface now to retain their leadership position.

Could Disney Join Hulu? Sources Say Talks Are Serious

Why is Disney thinking of joining Hulu? Is it the equity stake? And why join a group with your broadcast and cable competitors and share knowledge and revenue with them. If anything, Hulu should demonstrate to Disney that high quality content, professionally created, on a good player, with strong marketing can work. That Hulu grew from nothing to second place in a couple years is amazing. But why share?

Let me look at the pros. Hulu is an amazing distribution point and has fed the hunger of online starved consumers eager to consume videos online. Its meteoric growth, its advertising model, its stickiness, all encourage viewers to watch multiple videos and stay connected with it. And despite a silly name that many people still mistype as HULA, its a slick and well managed website, easily searched and navigated, offering top views as well as variety. "Why now? One source says, 'Hulu has more scale (than the networks), which is why I think they’re back at the table.'” So why isn't Disney also talking with CBS's TV.com?

And now the cons. The web is open with low barriers to entry and Disney has a great brand and the marketing savvy to build its online business. And where will Hulu be after the departure of people like George Kliavkoff of NBC and Peter Chernin of Fox. In addition, Disney has cable distribution partners eager to keep the subscription model alive; aligning with them and offering exclusivity to cable customers with a broadband connection, may be the added value that actually helps to increase license fees, not destroy them. Certainly, Fancast, Comcast's online portal, would love to have an exclusive window on some full length ABC, Disney, and ESPN content. Hulu may bring some advertising revenue, but it may also cause some viewers to disconnect from cable to only get their shows online.

Online video is also more than just watching online. The fun is in the social networking, the message boards, the casual gaming, the quizzes, the interactive elements that extend beyond simply watching a TV show online. Hulu may be one means of entry, and certainly today a popular one, but by no means the only one. My advice to Disney, look internal first; there may not be a need to enter into a partnership.

Online Gaming -- the Family Edition

Terrific article in today's Wall Street Journal about online gaming. And yet the title truly doesn't represent the story, that of the multi-player online environment that is growing by leaps.

Still, family and games seem to go together. As an activity, it brings the family closer together, building strong bonds, new lines of communication, memories, and fun. At the very least, family games provide something to do, especially on rainy or snowy days! Before computers, we had card games, board games, dice games, etc. New technologies bring new ways to interact.

So that an "increasing number of families have become receptive to the games as more homes get high-speed Internet access and more people familiarize themselves with social networking through mini-games like Scrabble on Facebook", these are simply new access points to familiar games. Younger audiences have embraced these games; their parents need to also in order to maintain a healthy family dynamic. Whether it is online fantasy games, Wii or Playstation or Xbox, family games have moved into the 21st century. However it is played shouldn't really matter; ultimately, for the family, it is about doing these activities or games together.

The story's approach is that more online games are moving from one player, or player against machine, to multi-player engagement online. Not playing within the family, but playing with strangers. It is this blind communication that is of concern to parents. As children are easy prey to online predators, parents are seeking cures that guard against such horrific behavior and provide protection. "To alleviate concerns, game developers are taking precautions to protect children by limiting chat sessions to predetermined phrases or banning the use of numbers and proper names so players can't divulge personal information. Many games also give parents the ability to limit social-networking features." Separating the friends from strangers, and assuring that they are who they say they are, is key to a safer environment. Gaming is fun, as long as no one breaks the rules.

Blockbuster and TiVo Join to Deliver Digital Movies

I hate "me too" strategies. That Blockbuster is following the Netflix model to simply try and duplicate their business strategies makes little sense. How are they differentiating themselves? As Netflix continues to build a leader strategy, Blockbuster continues to look confused and flustered. So to join with Tivo to make online movies available through Tivo boxes produces a yawn. Netflix already owns that space. The only company that wins in this partnership is Tivo who gets another retail partner to distribute its boxes.

Worse than employing a "me too" strategy against Netflix, Blockbuster does even less to differentiate from cable and VOD. "Blockbuster will offer a smaller selection of about 5,000 to 10,000 titles at any one time, mostly newer releases like “The Dark Knight” that will typically cost $3.99 to watch over a 24-hour period. The company already offers online rentals through the Movielink service it bought from a group of studios in 2007." Cable gives me the same title at the same price for the same length of time. And while I haven't viewed either picture, my assumption is that cable will also deliver a superior picture quality.

Blockbuster is facing an uphill battle and does not seem to be doing well. If Blockbuster thinks that it will get better titles or exclusive windows on titles that other distributors don't get is hard to believe. Exclusive exhibition windows are fading away to the point that movies are released to VOD and DVD at the same time. Blockbuster needs to be more creative - better pricing models, longer access to movies, etc - something to get a competitive edge. Otherwise, this "me too" strategy appears to be a last gasp before bankruptcy.

Making More Than A Good Impression

Terrific Ad Week article that illustrates why advertising can no longer be about reach and frequency. While that measurement might work in a linear, one-way world, the web brings interaction and better ways to measure engagement. And while CPM and CPC prove a known standard for pricing, it does not measure the attentiveness and interaction with the brand. "'It's like going to a 3-D movie without the glasses,' (Morgan) Freeman (CEO of Betawave) said. 'The Internet is more dimensional, but [for the most part] measurement criteria are the same as a one-way medium. You don't have the glasses so you're not appreciating the dimensions.'" What a great a analogy.

The web, and soon interactive TV, is more than just impressions. It is about the consumer spending time and interacting with the brand, from reading its blogs, to watching a related video, from playing an on-line game to downloading a coupon. It is at the heart of social networking and affords an opportunity to build real stickiness of the consumer with the brand.

For that reason, Facebook has great revenue potential. "Facebook, for instance, has a two-tiered ad system. Its self-service ads are mostly cost per click, while it sells "engagement ads" on an impression basis. A Facebook rep said the company has no plans to change that, pointing out that 'most of the industry still expects to buy on the standard CPM/CPC models.'" Still, they seem poised to take full advantage of the trend in advertising engagement that is taking place.

And yet the ad community is slow to adapt. I recall how hard it was to convince ad agencies that cable TV offered a more effective reach, than broadcast, with niche programming rather than general entertainment. The same holds true today. Studies have shown that consumers are far more digitally savvy than agencies give them credit. Thus ad dollars are slower to be moved into this new medium. Eventually, they will catch on.

NBC Affils Launch Study to Shape 'Leno'

How to make the Jay Leno 10 pm experiment successful, or at least profitable. One is to raise the price to advertise. Another is to lower the costs to produce. Compared to the cost of scripted series, like Law and Order, that currently occupies one or more of those 10 pm blocks, Leno will be inexpensive to produce. But will it be successful and more profitable than a scripted series in that space?

Well to "assure" that success, NBC is reaching down into its distribution world, the local affiliates, for support. “'NBC has promised the affiliates' input into the structure of the show, and we believe this research will help us represent the key drivers that will best flow a Jay Leno viewer into affiliates' local late news,'" says Brian Lawlor of Scripps. "Of course, how much Leno and NBC will listen is up in the air. An NBC network spokesperson declined to comment."

I don't believe that creativity and business should be linked; good creativity may lead to profitable results, but results shouldn't guide creativity. And one rarely sees decision by committee as effective to building a show. Creativity is visionary and tends to come from one, not many. And research will not be useful in rebuilding this show for prime time. It will simply lead to death by survey. What works for 11:30 pm will not necessarily work for 10 pm. At the end of the day, all the local affiliates want is a strong rating that leads into local news, plain and simple.

Rather, think a bit out of the box. Take the creativity in a different direction and create a show that will benefit from the charms and talent of Jay Leno; not a retread of the Tonight Show earlier in the day. That will kill 10 pm and perhaps also hurt the Tonight Show franchise as well.

Charter Bankruptcy Planned for April 1

In just 11 days, Charter will go bankrupt and Paul Allen keeps his voting control, while other shareholders are not so lucky. As bondholder, private equity firm Apollo Group will convert its bonds into new equity shares of Charter. "Allen was able to retain the voting rights because of a clause in the bank loan agreements that would have allowed the banks to reprice the company's bank debt at a much higher rate if there had been a change of control in the company, two sources said." Not so others who invested in Charter hoping that it would run a profitable business.

So what will become of Charter. Some speculate that in order for Charter to survive it must sell off some assets and become smaller. But who will buy. Comcast has to be careful of exceeding its percentage of cable penetration so as to not run afoul of the FCC. Some assets, including their Los Angeles property would be a perfect fit for Time Warner and their CT property might be of interest to Cablevision. Or will Charter run as is, post bankruptcy with a cleaner liability sheet and nowhere left to go but up.

Could Facebook Eclipse Google?

Commenting on an RBC analysis, Barron's reports that Facebook could pose a major threat to Google. While both are great sites, I don't envision that to be a problem. First, today Google is making money, lots of it, and Facebook has none. Google is first and foremost about search and Facebook is about social interactions. Competitive no, complimentary, yes.

What Facebook is poised to become is more of an entry point for emails to friends, IMing and other types of immediate communication, and yes even a bit of twittering. But where Facebook is poised to excel is not search but in navigation and recommendation. With so much content to be consumed, Facebook enables you to recommend sites and videos to others and others to you. Interestingly, "according to a note from AdAge that Sandler refers to, Facebook is now directing more traffic to some key Websites than does Google, implying that over time, Facebook could eclipse Google’s function as a directory for the Web for some significant portion of computer users."

A friend recently recommended a NYT article that I had missed. That recommendation allowed me to quickly click on her link and check out the article. Another friend recently recommend an online clip, and a third friend a movie that I should go see. These "expert" recommendations and easy navigation help me stay up to date and current and ease the discovery process of new things without the clutter. Could Facebook become cluttered? The newly organized site might, but it has great potential to improve and take recommendations and rank and rate them for me.

Facebook is already becoming an easy means to connect to friends and reach out to them when they are online like me. The digital space is moving fast and anything can happen. Just look at the meteoric rise and fall of AOL. "The space is still too fragmented, the ‘cool kids’ are fickle and quick to move to the next social net, unlike the stickiness in the search marketplace.”

NBC doesn't want their web videos on TV

A TV is a TV is a TV, and web video shouldn't be viewed on your TV set. As companies like Boxee, Apple, and others are building devices to connect web video content to your TV screen, NBC is pushing back. For one simple reason, money. Too much of it, spent by cable, telco, and satellite distributors to NBC for placement on cable lineups. And that revenue stream is in addition to the advertising dollars for placement on their shows that NBC receives. The web hasn't built a subscription model to offset the one they have built with cable.

A direct connection of Hulu to the TV means that USA programming like Monk can be watched by viewers without buying a cable subscription. The bottom line, "NBC and Fox only get paid when you watch the TV shows on TV or cable, which gets them Nielsen ratings and subscriber fees. Internet revenues from the likes of Hulu are puny. So they can't afford to lose viewers to Web video shows on TV when they need them to be watching TV shows on TV."

But does a consumer really need Boxee to watch Hulu on their big screen TV. The answer is no. Savvy viewers are already connecting their TV screen to their PC and treating it as a monitor. As long as NBC enables Hulu, they will not be able to stop viewers from moving web content to the TV.

One might ask, but broadcast networks are free and over the air; they don't get a subscription so why care which platform a cosumer uses to watch 30 Rock. True, but each broadcaster also owns a number of cable nets, so it does still affect their bottom line. Also, web eyeballs aren't measured with Nielsen so they are not sold the same way. And they are presented with less advertising interruptions so less advertising dollars; Hulu might have some advertising, but it can't provide the same return as the linear network. Web videos are most valuable as promotional vehicles bringing new viewers to taste shows and hopefully move over to the TV to watch more. By themselves, they provide much less revenue to the bottom line.

So the NBC - Boxee feud may simply be about slowing down the inevitable. Companies are already coming up with more ways to easily access internet video content on TV. It is a slippery slope for NBC and Hulu and the subscription model they are trying to protect.

Building the Road to Broadband Video Profitability

Last night's Broadband Video Leadership panel brought big networks, big distributor, and big advertiser together to assure us that big media was making money and all is right with the world. Sponsored by VideoNuze and NATPE, the evening was well attended and attentive. And the company line was well represented.

Digital is making money, more than the pennies, but still less than dollars, and for both the content distributor and content creators on the panel, additive to the bottom line. Most interesting, digital was not taking eyeballs away from TV, simply enhancing it, and profitable when packaged to advertisers as a multi-platform solution.

Nor do they see consumers switching off their cable subscription to rely primarily on broadband. "Today cable, satellite and telco TV providers pay an estimated $22 billion per year in programming fees, Karin Gilford noted. 'It's pretty hard to imagine that revenue stream going away,' she said. Asked about 'cord-cutting' -- the notion that cable customers would cancel their pay-TV service and obtain all their video content online -- Gilford said that remains a theoretical idea rather than a real trend."

Also asked was the effect of competition from Netflix, You Tube, and others on the cable business. Cable's variety and depth of content far exceeds what others might offer and user generated content will not surplant the premium content that cable serves. None of the panelists seemed concern about these video aggregators. But while they may not be taking huge bites, they may be nibbling away and shouldn't be ignored. TVs are now connecting directly to the web, bypassing the settop box to access online content.

The most interesting comment was about search. Currently, You Tube appears to be the choice for the initial search for video content. And cable has done little to provide an application that easily searches for video programs, movies, VOD, or clips through its platform. It seems that search, navigation, and recommendation may be the ultimate decider for the consumer on which platform, broadband or cable, best serves a viewer's need. Missed a Daily Show, click a button watch a clip, click another button, watch the full show, click another button, watch a preview of the guest's clip that they are hyping. Will Fancast be the site that does that first, will Hulu, will Facebook, or someone else? Search, navigation, recommendation seem to be the drivers that will shape who wins the race.

Sirius Still Up For The Fight

Now that Sirius has a little financial breathing room, can they make a profitable business model. The acquisition of XM Satellite may have given them more subscribers, but is it enough to survive. The answer to both questions, per Mel Karmazin seems to be yes.

He says that they currently have 19 million customers and that their churn remains low and manageable. Even more surprising, Sirius is moving into the black. "In the fourth quarter of 2008, a devastating one for most companies, Sirius XM recorded its first operating profit ever (measured by Ebitda, or earnings before interest, taxes, depreciation, and amortization), as well as its first significant slug of free cash flow."

The Liberty deal certainly comes at a high price, but it staved off bankruptcy and may bring with it long term synergies. "Plus, one of the benefits of the Sirius/XM merger - aside from the cost savings - is that several years from now, once all Sirius and XM customers are on the same system, half of Sirius XM's spectrum will be freed for other uses. ... Premium content wouldn't necessarily be limited to audio. Sirius XM currently offers a three-channel Backseat TV service for select Chrysler and Jeep SUVs. (For an extra $7 a month, Sirius subscribers can get mobile feeds of the Disney Channel, Nickelodeon, and the Cartoon Network.) If Sirius XM wanted to launch more video channels, it would probably have a willing partner in Liberty Media, which owns half of DirecTV as well as several cable networks, including QVC and Starz."

Will this distribution spectrum be more preferable than content received wirelessly through the web. Sirius currently competes with internet radio; the same will hold true in the video space as well. Why pay for subscription if it is available elsewhere for free. Sirius, like cable, may be facing similar challenges.

Will On Demand Content Kill Linear TV

Who has time to watch a full episode of TV. As a society we have gotten use to small bites as opposed to large mouthfuls. Wasn't that the very reason USA Today was created as a newspaper, to provide short articles, quickly read, to get our fill of news. And so the internet and video sites, like Hulu, have done the very same thing. They have offered us bite sized highlights rather than sitting through the full TV shows. From SNL to Daily Show, we can watch the highlights. And for those that like the flexibility to watch the whole show, where and when and how you prefer, full shows are accessible with "limited commercial interruptions". How nice!

And from this convenience comes the problem, the profit return is far less than from the traditional TV set. While USA Today may have been charging as much as other newspapers to get their version of the news, online video does not get the same amount of advertising dollars. And while more and more people are accessing the web for their videos, the numbers watching TV are dropping. "While more and more viewers are watching TV programming online, the networks aren't getting anywhere near the amount that they would earn from commercials that run the old-fashioned way. ... As a means of siphoning away traditional TV viewers, the Internet could soon make cable's threat to the Big Four nets seem like a cakewalk. In fact, the competition posed by online distribution is equally menacing to broadcast and ad-supporting cable channels, which could make the Internet the common enemy that finally unifies the smallscreen's rival factions."

And what is TV doing about it. They are actually putting more content online and literally training the consumer to seek content on less profitable platforms. So how does TV compete? Does all TV need to be live to add a bit of danger and anything can happen to the viewing experience? Will hi definition and bigger TV screens save the TV experience. And can new interactivity through the set top box make the big screen experience more preferable?

Will we buy our networks directly off the web or still work with our "broadband" provider to get packages of content. How advertising reaches us must get more creative too. Where once viewership was merely a sampling and estimate, it is moving toward true engagement and actual views, measuring action and purchase. New interactive opportunities could enable purchasing, couponing, sweepstakes, and feedback. Measurable and accurate. Perhaps that will improve the profit margin.

I Like Lists - Digital Organization

While there is a lot going on in the digital landscape, changes in media organization structures, and new applications for iPhones and others, I was just thinking, what I really need, or perhaps would like to see as a digital media device. No not a Kindle, or HD TV, though both would be nice. I think I speak for many when I say the kitchen is the center of my house. No, not physically the center, but where a majority of activity happens. And it is there that the family calendar is kept in an attempt to keep us organized and on schedule. Add to that pieces of loose paper nearby, recording upcoming shopping lists for the supermarket, Costco, and Target. Lists get written and rewritten, and checked against the schedule for other needs like birthday presents, drinks for one of the kid's teams, and so on. And of course there is always coordinating the home schedule with the work schedule. And all this is done the old fashioned way.

So what I want is someone to invent for me a device that is about the size of a calendar, that can hang on the wall, or sit on the counter, wireless compatible and networked to the home PC and printer and synced with my cell phone. It would be a calendar, list maker, and web device. Easy to write on and have my handwriting converted to text. Mobile devices can sync to it and download information like new dates or additions to the shopping list as well as upload the same. No more printing out the list when your phone can hold it for you. Sure include some nifty apps like a calorie counter, recipe keeper, or calculator, but its primary duty remains to organize the home. Press a button, look at the month or week, or that day. Add alarms to remind you not to forget to sign a kid's permission slip or pack a lunch. And when the screen is not being used, let the screen saver rotate through the family pictures. The key remains organization, connectivity, and information.

I'd take down the family calendar and replace it in an instant. Could it do more; perhaps, but I have other devices to watch TV or play videos. Oops, gotta run, the calendar says to pick up my daughter from art class and then take my son to guitar. Nice to be reminded, nice to have it on the calendar so I can schedule other thing around it.

Sirius XM Radio planning to stream to iPhone

As new car sales dwindle, and satellite radio growth falters, new subscription sources must be uncovered. If people aren't going into their cars, perhaps they are going into their pockets. Sirius hopes so and thus it's time to reach prospective customers on their most useful device, their phone. "By streaming its music, sports and talk channels to users of the iPhone and iPod Touch, Sirius can give its existing subscribers another way to access content and let new customers sign up without buying new radios, CEO Mel Karmazin said."

In today's economy, it's all about the price point. And while the article doesn't specify, Sirius needs to be aware that they are competing with other radio type applications on these devices as well. Content exclusivity may matter, but only for so much. That is the lesson learned from the automobile side of this business. Still the appeal of getting out of market games on a phone may be appealing. I also think that Sirius may expand its distribution by bundling its services with Direct TV.

The world exists outside the auto and Sirius is recognizing that they need to be everywhere.

Google To Let Consumers Edit Their Interests

Why do I have to see car ads. I just leased a new vehicle and I am absolutely not interested in getting another. The new hot metric in advertising is behavioral, targeted to interest and intent. But, wouldn't it be nice to proactively tell sites what I am interested in and what I absolutely don't want to see.

And while we try so hard to protect our privacy, our every tap on a pc is counted and tracked. "Perhaps to forestall objections to its approach, Google said it planned to offer new ways for users to protect their privacy. Most notably, Google will be the first major company to give users the ability to see and edit the information that it has compiled about their interests for the purposes of behavioral targeting. Like rivals such as Yahoo, it also will give users the choice to opt out from what it calls 'interest-based advertising.'"

Could this same behavioral web approach be adapted for TV. Through cable TV, the set top box offers the same opportunity to interact, to customize and to reach targeted audiences. I always keep wondering though, what would happen if I became an undesirable consumer.

How proactive will users be to update their profiles. Perhaps it depends on how often we are proactively reminded that we have the ability to edit. Like most things that run in the background, out of sight, out of mind. Even though I may opt out of certain types of ads, there is still no guarantee that they won't be run.

Time Warner Cable Delivers Primetime On Demand

Who needs a DVR or Tivo when you have VOD. A DVR is proactive, you must act on an interest and set up your recording options in advance. Of course with on-going series, that needs to happen just once and all future recordings occur. And you can control the trick features - fast forwarding and rewinding to your hearts content. The beauty of VOD is that it is reactive, that even though you missed it on the linear schedule, you can still watch it later, without any advance work. Great for viewers who no longer feel physically tied to a TV schedule, and great for the programmer, especially if their ads can still get noticed. And it is easier for the programmer to disable those trick features, forcing the viewer to stick with the ads that run.

So who gets hurt. Well for all cable programmers and cable operators, VOD seems a win-win all around; but for broadcast affiliates, especially those not owned and operated by the network, they may not be so lucky. Regional network affiliates rely on regional ads to run inside national broadcasts and for viewers to watch. If a network show is DVR'd, their regional ads still get captured. But what happens when a network VOD show runs across markets. CBS gets its national ads run, but the regional ads on WCBS in NYC or KCBS in Los Angeles, or in any regional DMA are simply not seen. They have lost the viewer and they have lost the ad revenue. The network affiliate is the one who gets hurt from national broadcast of TV shows on VOD.

The network affiliate model is being uprooted as the national programmer provides VOD as an alternative for its audience to watch its programming. It may assure eyeballs, but network VOD may just kill broadcast affiliate relations. VOD delivers what you want when you want it. But for the networks, it does have a cost.

Barnes & Noble Moving Into E-book

Change is constant and the digital age is moving us away from physical content to electronic. As a bookseller, Barnes & Noble must have asked themselves the question, what is my strategic purpose and how do I stay relevant in a changing world. They have created a physical place to purchase reading materials, audios and videos, and grab a cup of coffee. But that world is changing, slowly at first, but moving toward a digital direction. And so to remain relevant as purchase behaviors shift, Barnes & Noble recognizes the importance of being the distribution point, both with brick and mortar and with virtual. Their purchase of Fictionwise is that first step.

So how do they compete with Amazon and the Kindle. Will content be available to be read on a Kindle or Sony e-reader or all or something of their own making. Will it make deals to have exclusive digital rights to certain content? And should they integrate e-books into their physical stores so that the purchase of a book includes a free or discounted e-version as well. How do they differentiate from Amazon and others to remain competitive as usage patterns evolve.

Theaters didn't go away when movies were available directly in the home. Book stores shouldn't go away either. Consumers like to get out of the house and Barnes & Nobel provides a place to hang out, discover new ideas, and relax. Creating an impetus to come in the store to download as opposed to just downloading at home could keep this bookseller relevant to the tech savvy consumer. The growth of e-books is fast although the aggregate is still a sliver of total book purchases. Change may not be quick but it seems to be coming and Barnes & Nobel seems to recognize that they need to adapt as well.

WNBC goes digital in big news update with new channel New York Nonstop

WNBC, Channel 4 in New York City is unveiling a new digital channel on Monday, part NY1, a NYC local cable news outlet, part Headline News, part web-like content. This new channel, dubbed New York Nonstop will be out there on the digital cable line-up and over the digital airwaves as channel 4.2. As viewing habits move to DVR and VOD, the best way to survive is to be live and lively; and with a regional focus meant to provide relevant flavor in short, easy bites. "'You'll get your meat - your news, weather and headlines - every 15 minutes,' McGinn ( Meredith McGinn, senior manager of special projects for NBC 4 New York) said. 'In between those 15 minutes, you may have a two-minute segment, a two-minute pod, a five-minute pod. So the shows we're looking at are in little bits, not your traditional half-hour newscasts.'"

Will audiences in this market switch from NY 1 or News 12 to taste this new dish? Will they prefer the friendly faces of Channel 4 doing double duty at 4.2? In recent months, NBC has laid off a number of anchors, reporters, and weather people, replacing them most likely with less expensive talent. In a start up, keeping costs low is important.

Why is a regional channel being created in today's climate? Frankly, it's a first strategic step that sees the end of owned and operated networks and their eventual replacement with less costly regional news and lifestyle channels. As network programming finds its way as a national feed, accessible on demand, on the web and perhaps still as a linear stream, the regional networks will be left in the dust. And why should these network affiliates promote a national show if they are also competing with that same show on other platforms like Hulu or TV.com or Fancast? Shows like 30 Rock, Heroes, Chuck, and others are all available outside the gate of WNBC. New York Nonstop might just represent the natural next phase of the local broadcaster, no longer reliant on a relationship with its national partner, and programmed 24/7 on regional interests.

Technology has changed the entertainment landscape and the current model of national networks and regional affiliates may no longer be working. The evolutionary change may just be a digital news and lifestyle network, a la New York Nonstop in every DMA. Heck, their tagline says it all - Engaging consumers where they live, work and play.

Cable Companies Target Commercials to Audience

Your gonna get the commercial included with your TV show anyway, why not get ads that are relevant to you. Technology enables ads to be targeted by set top box so that your home receives ads that match your demographic profile. And while my cable company knows I have a house and x number of cable boxes, they still don't know what I drive or what I buy; they rely on the zip code of my neighborhood to ascertain my economic situation. Or do they?

How much information is being collected and shared and cross referenced with my cable bill. And should I care. On the plus side, the ads that I get might have more interest to me. They might be more a resource than a distraction and be of great value to both me and the advertiser. And as the demographic information is aggregated, my personal information remains personal. "Cablevision says it segments its subscribers only by demographics, so that an advertiser can divide ads among various groups: General Motors, for example, could send an ad for a Cadillac Escalade to high-income houses, a Chevrolet to low-income houses, and one in Spanish to Hispanic consumers."

On the negative side, the question is one of it being a slippery slope. At what point does the aggregate data become personal data. Privacy does matter and needs to be protected. "The potential of customized ads worries some privacy advocates, despite the assurance of cable companies that they maintain anonymity about the households." Cablevision says they are extra protective that personal information is not shared.

And what of Canoe Ventures. Is Cablevision ahead of their efforts or simply not wanting to play in the same sand box as Canoe. Personalization is happening on the web, it only makes sense that it invades the TV, too.

Thomson Reuters Builds A Web-Only TV Network

Why are TV broadcasters losing money? As the internet opens up distribution and lowers the barriers to enable more content to be created and disbursed, revenue growth has not kept pace. Clearly cable advertising growth has come at the expense of broadcasters, but now web shows provide an alternative to cable. Plainly, the result is that our viewing choices have gone from a few to infinite.

Where the few UHF stations once offered an alternative to the big broadcasters, today cable and web programming has truly fragmented the market. But for how long? Marketing theory indicates that eventually fragmentation must return to segmentation. Want some examples, just look at the accounting industry, the airline industry, and even with cable operators. Where once there were many, now there are few. How quickly will content distribution consolidation occur is anyone's guess. But for the health of the marketplace, given a recessionary climate where fewer advertising dollars are available, sooner may be better than later.

Not to pick on any particular genre or network, but let's look at the abundance of choices. With Thomson Reuters Web Network now competing in a business news space currently occupied by CNBC, Bloomberg, and Fox Business News. How long can that last? Looking for a movie on TV, there is ABC Family, AMC, Bravo, Disney, FMC, FX, Hallmark, Lifetime, TBS, TNT,TCM, WE, and broadcast and premium networks like HBO and Showtime, and others. And now we can access movies on the web through Amazon and Netflix. The same holds true for sports, kids, cultural, lifestyle, and every other niche. Niche networks become general interest in an attempt to capture more advertising dollars, and new niche networks arise attempting to reach the purer interest feeling abandoned as their previous network becomes too general. A network once considered the place for culture and fine arts must broaden its appeal to grow its viewership base. How many do we really need?

The problem remains, not enough advertising dollars to support these fragments. Already magazines are beginning to shutter, some newspapers are going bankrupt, others are closing. Web content may see the loss of some of these cable channels or some consolidation must occur. This fragmentation of content cannot survive. Those managing their bottom line may win out, some others will not.

Why Media Must Charge For Web Content

The Wall Street Journal charges for it's online content, and Newsday wants to. While free content continues to exist, the premium content depends on revenue to support its business model. In the broadcast model, networks depended on advertising fees, and TV shows built in syndication as a means to further profit. In the cable model, networks depended on both subscription fees and advertising to prosper. Broadcast liked this model so much, they bought cable networks. Local stations came up with retransmission consent to get subscription fees from cable affiliates as well. And then the web showed up.

The barriers of digital distribution dropped away and content could be shared freely, copied for networks and web pages, and share with the click of a button. Why pay for content if it can found for free in alternate locations. Why pay for the chicken if the eggs are free. But eventually someone has to feed the chicken or it will die and there will be no more eggs.

Content creators and distributors are recognizing the value of their content and how it needs to be shared, as either promotional vehicles or to build brand preference. But eventually, the online viewer will have to pay. Content can't be free forever and advertising revenue may not be enough by itself to maintain the current model. Either costs have to drop or more revenues have to be found. At the moment, content companies are cutting costs, but if it is too much, the content will suffer.

WIll consumers pay. Some are already. Apple has built the iPhone that makes it too easy to buy applications and view content. Perhaps it is that simplicity and a pricing structure deemed reasonable by consumers that will build an online subscription model. Will the cable companies be able to control the pipeline enough to limit only purchased content to come through to the device? Will free content be pulled and limited to subscriptions like Netflix? The model must change to enable a real business to develop; what it eventually looks like is still to be determined.