DVR turning Leno slot into a black hole

Headline in this morning's NY Post. But not a surprise; in fact the very reason NBC stated for turning 10pm over to Leno. DVR use is rising at 10 pm and Leno may be the cause. "DVR usage, which like live programming is measured by Nielsen Co., is up by 1.4 household ratings points in the 10 p.m. slot, while NBC has lost an average of 1.8 points compared to fall 2008." Consumers are turning regularly to their DVR and NBC saw Leno as a way to put a Live-like experience on in the spot to divert DVR activity and reach the live viewer. NBC says they expected lower ratings but felt that the lower revenue potential was offset by a much lower cost of production. While no one has seen their books on Leno, it clearly has backlashed on shows before it as well as the news and late night programming after it. And viewers are using their DVR more to watch Law and Order at 10p, by recording it at 9 pm.

Ratings for Leno slide and NBC is consistently in fourth place, except when they present Sunday Night Football. One more month and they lose that night, too. Perhaps that is the indication when Leno will end. Should we count January as the countdown to Jay Leno being axed. Just watch how reruns do better against Leno in December and that may further indicate that its demise is near.

New Media Can Save The Magazine Industry

News Flash - people still read! People seek content and view it in ways that adapt to their lifestyle. In that regard, we've become a nation on the go, needing the latest information in the shortest amount of time. Why is traditional mail decreasing; because, email brings us communication faster. And now instant messaging becomes faster than email. The same holds true for print magazines. Consumers want their content at their fingertips and they want it now. Digital media can save the print media industry.

And perhaps the magazine industry is finally taking notice. "Some of the magazine industry’s biggest names are on the verge of forming a new company that would allow them to take the digital future into their own hands. The company would make up one of the biggest alliances among rival publishers ever formed in print media, with Time Inc., Condé Nast and Hearst all expected to join, houses that together publish more than 50 magazines, including The New Yorker, Vanity Fair, Vogue, Time, People, Sports Illustrated, Esquire and O, The Oprah Magazine."

There is leverage in aggregating resources, building out common platforms and striking deals. The rise of the smartphone, iPhone, Kindle, and Nook, should pave the way for new revenue streams. Initially, the industry should follow the Wall Street Journal route and offer a digital subscription with the print one. Heck even DVDs offer a digital copy with their disc.

After NBC-Comcast, Who Is The Next M&A Target

Whether Vivendi agrees to sell its stake to GE or not, the media industry is poised for even more merger and acquisition activity. So what will be the next announcement. Is News Corp and Time Warner interested in buying MGM? Is Direct TV about to merge with AT&T or Verizon? Or will they buy a Sirius instead? And what happens to Cablevision after it spins off its MSG unit? Will it sell off its cable nets or finally sell its NY cable systems to Time Warner?

There are also a number of other independent cable networks in need of some leverage. Which one of those could be next to be bought by a bigger fish - HGTV, Hallmark, or others?

Always fun to speculate, and the announcement always seems to surprise some. But in a maturing industry facing consolidation because of technological and other changes, growth through acquisition is no surprise at all. The question remains, who is next.

Will Vivendi Approve the Sale of NBC

When M&A activity takes place in the open, it certainly lets everyone show their hands. As Comcast and GE try to set the value for a deal, the third party, Vivendi gets to pull some leverage. And so this sale will not be easy as Vivendi plays a bit of hardball. "General Electric and Vivendi are at least $1bn apart in their valuation of the French group’s stake in NBC Universal, damping hopes of a quick resolution to a stand-off that is holding up Comcast’s planned bid for a majority stake in the US broadcast, cable and film group."

Does Vivendi need the money? Does it pay to wait and see. They certainly have the option each year to sell their piece of NBC; do they really need to sell when NBC's value is depressed for many reasons. "The annual window for exercising that option opened on Sunday and will close on December 10. " This fourth place network has purposely put Jay Leno on at 10 pm. Was it done in anticipation of depressing the value of Vivendi's stake. GE would maintain ownership. Perhaps they felt that once Vivendi was out, they could raise its value with better programming again and then sell its remaining share to Comcast at an even higher amount. Sneaky, if true.

if Vivendi is simply using this leverage to force a higher price, does it make more sense to go out as an IPO. "Under an agreement struck when Vivendi sold Universal Studios to the GE-controlled NBC in 2004, Vivendi can force an initial public offering of its stake unless GE offers a more attractive price." Would Comcast still buy up shares in an open market or does the price become unattractive to them? This soap opera drama could become the stuff that might soon air where Leno now sits. Let's call this the new "Dallas" and wait for the Ewings to make a play. Now that was good TV.

Cable Has Spent $935 Million On CableCards

Set top boxes are supposed to require cablecards so that they can make sure that they do indeed work. "s intended to improve the way CableCards work in third-party devices, by forcing cable operators to use the technology themselves." Yet I doubt that if you ask a consumer what a cablecard looks like, they could tell you or show you where it is in their cable box. And ask a consumer if they have seen an ad talking about cablecards, and the answer will be no. Cablecards have yet to make an impact in the market. In fact, try to get a cablecard, say for a Tivo HD device, from your cable company and you face more resistance than support. They will remind you, that the card won't enable VOD and other interactive features that the set top box offers.

And truthfully, aren't we beyond the need for cards to verify third party boxes. Can't the consumer electronic industry with cable come up with algorithms that can insure that there is both security and functionality. In my estimation, cablecards are a joke, a delay tactic that has yet to make an impact in third party devices.

TVs are being equipped to get broadband connectivity directly to provide interactivity. Once connected, TV sets and game consoles are getting content without cable. Just yesterday, Sony announced their new agreement with Netflix. "Users can now access the DVD rental company's Watch Instantly catalogue on Sony BRAVIA TV W5100, Z5100, XBR9, and XBR10 series in 40-inch, 46-inch and 52-inch screen sizes; the Sony N460 Network Blu-ray Disc Player; and via Sony's BRAVIA Internet video link module." If you can't work with the cable industry, work around them. Who needs a cablecard? Truthfully, the cable industry cause they are risking their subscribers defection from premium channels, VOD, and perhaps even basic cable!

Karmazin Sticking with Sirius; Not Considering NBC-Comcast

Why would Mel Karmazin ever think of leaving his number one spot for working under another back inside cable. Already having that experience with Viacom, why expect that it will be any different at a proposed NBC-Comcast company. Well, to squash those rumors, Mel addressed them recently. "Speaking Monday to Neil Cavuto on Fox Business Network, Sirius XM CEO Mel Karmazin said he's got no intention of leaving the satellite radio company." Frankly, I was a little surprised to hear that it would be a possibility. Sirius has an opportunity to be so much more. Rather, Mel should stay close with John Malone and consider heading a merger of Direct TV and Sirius. That could provide greater synergy and give Mel a bigger company to run.

Time Warner To Spin Off AOL Dec. 9

According to Time Warner, content and distribution don't mix. There is no synergy and no gain to try to build out a vertical business that both creates content and distributes on a cable or web platform. First came the separation of the cable business from networks and studios and in a few weeks the web. On December 9, AOL will no longer be a Time Warner company. "AOL common stock will begin trading on the New York Stock Exchange Dec. 10 under the symbol 'AOL.' On Dec. 9, Time Warner shareholders of record as of Nov. 27 will receive one share of AOL stock for every 11 shares of Time Warner stock they own."

It was AOL that many years ago actually purchased Time Warner. But the parent soon became the child and now the orphan to the business. As broadband overtake dial up, AOL lost subscribers. It switched from pay to free and built up unique branded content to keep users engaged with their site. But it could never reach its former profitable glory and Time Warner saw AOL as its albatross.

To be fair, Time Warner didn't do much to engage AOL either. At the time it was purchased, it had its own broadband service, Roadrunner. Rather than combine the entities, it allowed them to compete with each other with its own customer base. AOL lost then and AOL lost now.

For stockholders of AOL, the question will be whether to hold onto these new shares or trade them while they still have value. Can AOL survive as a standalone entity? For Time Warner, the answer may simply be, "who cares."

Twitter usage falls for second month

Is Twitter in trouble? Are users less enthralled with the service? Does this decline in usage indicate a trend? Certainly the numbers may not paint a true picture. "The number of Americans using Twitter dropped 8 percent in October from September, marking the second monthly decline for the social-networking site this year, according to research firm ComScore Inc." Twitter is being incorporated into a number of other sites, Facebook, Linked In, etc.; are they being counted, too? I am not a fan of Twitter but I didn't expect the Twitter train to fall off the tracks that fast. Still, I find myself less glued to a screen with Twitter updates. In the meantime, let's just keep watching the activity to see if this decline continues into month 3.

Cable Basic Subscribers Continue to Decline

Quarter after quarter, basic cable subscription continues to drop. While cable continues to sell more services to is customers, their core base is declining. And where are they headed? Well, with basic subs are leaving cable every quarter, telco and satellite basic subs are increasing.

Eventually, that declining base will limit who can be upsold; cable is losing its base and those are the folks that buy high speed and wireline services. Its time to start differentiating cable from its competitors; better converter boxes and top service. Otherwise, cable will keep bleeding subs and find itself losing revenue in as prices drop to match competitive pressures.

Blockbuster's loss widens in Q3

Blockbuster is certainly having its issues. With competition from cable's on demand platform, Netflix, Redbox, and other online sources, consumers feel less compelled to go to a big box store to rent movies. And so the financial news released from them should come at no surprise. "Blockbuster said today that its third-quarter loss widened from a year earlier, as the largest U.S. movie-rental chain closed stores, saw a 14% drop in same-store sales and conserved cash by cutting advertising costs in preparation to refinance debt." And while cost cutting can slow down the bleeding, the bigger issue will be how to get more consumers back into their stores to rent from them.

Among the ideas, kiosks similar to Redbox, that bring the movies to other retail outlets in an easier to touch strategy. Another is to emulate Netflix and its online approach to extend the value of the relationship with the consumer. All me too, follower strategies, that show little of Blockbusters leadership potential. Lastly, they will expand their inventory by renting and selling video games as well. Per the report, video games represents their next big opportunity.

So if I were Game Stop, it is time for a preemptive stop. Currently they offer used games in addition to new ones. How about expanding that model with rentals. Consumers already see Game Stop as the destination for video games; this new venture would add revenue to their coffers while taking more wind out of Blockbuster's sails (sales, too).

Greed Will Change the national Broadcaster and Affiliate Relationship

In these economically challenging times, our true intentions become clear. And in the TV world, parents eat their young! "ABC, CBS, NBC and Fox each are angling to get a cut of the compensation -- known as retransmission consent -- that cable and satellite companies pay the affiliates to carry their signals." Doesn't that national carriage enable you to charge more for your advertising. Do the local affiliates get a piece of the national buy, too? Perhaps the whole model needs to be reexamined given these changing times.

It seems we have gotten to a point where local affiliation is of lesser importance than being hyper local. Affiliates need to focus more on their own communities and less on the national programming. Heck with NBC pushing The Jay Leno Show, affiliates should be asking for compensation from NBC. Talk about hurting local news ratings at 11am.

So why shake up the model now? As ad dollars have moved from broadcast to cable, new revenue streams must be found. "Retransmission revenue isn't a huge piece of the broadcast pie, but it's a lucrative and growing one. SNL Kagan estimates total retransmission dollars at $739 million this year, but expects that to grow to $1.3 billion by 2012." Thus the desire to share in that pie. Could a revolt spell the beginning of the end of this national-local model, let's wait and see.

LinkedIn and Twitter link up - and Linkedin may have jumped the shark

According to reports, Twitter and Linked in have linked up enabling users to broadcast each others services on their respective sites. "Allen Blue, a co-founder of Twitter who is its vice president of product strategy, said LinkedIn members would be able to automatically post recent Tweets if they wanted." Perhaps good for Twitter as it adds more objective information, but does it jump the shark for Linked in? I have grown to like Linked in more and Twitter less; I find myself with less to post, but appreciate reading linked in posts of new connections made, groups joined, and updated news on their resume. I care much less what they ate for lunch or where they ate it. I'll let Twitter do that and not "check the box" to share the data on linked in. And I appreciate the same option NOT to read others' Tweets on my Linked in home page. Otherwise, Linked In will get too congested and stop working effectively for me. And it will have "Jumped The Shark".

Dish Files To Trademark 'TV Everywhere'

It's one thing to enable convergence of video across platforms, another thing to name it. Building a brand around the concept may simply be the first step. And with that in mind, Dish is quick to try and trademark the "TV Everywhere" banner. Will cable let go easily? "As outlined by Time Warner Inc. CEO Jeff Bewkes, for example, 'TV Everywhere' encompasses Web-based video services available only to pay-TV subscribers provided through cable, satellite or telco TV operators in cooperation with programmers. Dish representatives would not say whether the company is developing a service along those lines." That definition certainly goes beyond Dish's plan with Slingbox. Does Dish have a legal leg to stand on or is the definition already considered generic and not accessible to branding.

Obviously, there are plenty of other ways to brand the ability to watch TV programming across multiple non TV devices. Quick, get the marketer creative juices going. My suggestions: 1. TV Anywhere (too obvious); 2. TV2GO; 3. V2G; 4. GoTv; 5. TVWWW or TVWyW (TV What you Want, Where you want, When you Want). 6. TV On Demand; 7. TV Yourway

Love to hear your suggestions for cable to replace the TV Everywhere name with a brand they can own.

Comcast - NBCU; What Will Vivendi Do?

The acquisition of NBCU by Comcast continues to move closer as the two parties seemed to have agreed on valuing the deal at 30 billion dollars. Sounds like a lot of money, but for Vivendi, it would represent less than they hoped. "A $30 billion valuation would put Vivendi’s part at $6 billion, which would still be shy of the $6.3 billion it is said to think its share should be worth." Hasn't anyone told Vivendi that when their is a seller motivated deal, the seller tends to get less than they desire, just to get rid of their asset. Heck, it's real estate 101.

Will Vivendi take the deal? Does a Comcast-NBCU deal make sense? Would the FCC even let Comcast own the asset or would they have to quickly spin off the broadcast piece to a separate entity? For those that simply like putting together M&A deals, they must be in seventh heaven. For those on the sideline watching the outcome, sometimes deals are just bad and should be avoided. If Comcast just wants the cable networks, this deal certainly is a complicated way to get what you desire. Scripps just picked up Travel with little fanfare and other cable networks are out there to be plucked. Seems a lot of work for Bravo, USA, Sci Fi, Oxygen, and others.

How Ya Doin Sirius

The economy is slowing improving, some car dealers are finally showing a little profit, and Sirius is still around. In fact, thanks to John Malone's financial support, Sirius remains an independent company. Despite posting a net loss in the third quarter, revenue grew 3 percent for them. Not bad for a company who's stock trades for just over 2 bits.

So what does the future hold? Hopefully a company that has reined in its costs and grown revenue. One big expense still around is Howard Stern's hefty contract. But that contract ends next month and both Howard and Sirius have a decision to make. Re-sign Howard or let him go back to terrestrial radio. Does Sirius depend on Howard anymore; I dunno. I suspect that those that ordered Sirius because of Howard have found more value that would keep them customers. Howard doesn't seem to be the game changer he once was. My expectation is that Mel Karmazin will try to sign him for pennies and when Howard refuses will say that at least he made him an offer. At the end of the day, Howard will come back to terrestrial radio and the wrath of the FCC.

And for Sirius, lower costs, perhaps more non car subscribers via iPhone and other mobile devices, and a buyout by Liberty Media and Direct TV.

Cable Revenue Up, Basic Sub Growth Down

Cablevision recently announced third quarter results and the headline was that profits had tripled. In fact, revenue jumped 5.3%. Comcast is telling a similar story as their revenue rose 3 percent. The growth sectors are digital penetration, high speed connects, and triple play growth with wireline phone business.

But inside the numbers there may be a different story to tell. Digital cable growth, in my estimation, is due to the recapture of bandwidth as cable customers "force" consumers to upgrade to digital and take a digital box in order to watch networks that were once on the basic tier. Revenue growth is coming from these upsells as well as the profit margin attached to phone and broadband connects.

BUT, the troubling point for cable is in this one piece of information. For Cablevision, basic video subscribers fell 1.5% from a year earlier. For Comcast, a similar story; in the third quarter, they lost 132,000 basic cable subscribers. At some point, you can't keep selling more services to less customers!! As consumers begin to treat cable, high speed, and phone as a commodity and see little differentiation between competitors, the lower priced service will win. Fios and AT&T continue to gain basic subs as cable drops them. As cable basic sub loss grows, these triple play customers will also leave and revenue and profit will both decline.

And when will it get problematic; just wait till the next rate increase comes into customers' hands. That notice will be the impetus to compare rates and think about changing providers. Revenue growth may be growing now but don't lose sight of your basic cable base. You got to have them as customers first before you can upsell them!

VOD or Live TV On Your Cell Phone

While it is nice to read that Apple is taking its iTune application one step further, enabling an all you can watch mentality for a subscription price. And for those consuming lots of on demand content on their iPhones and iPods, it may be a more economical model. "iTunes users can already buy individual movies and episodes of shows, but the monthly subscription-fee strategy takes square aim at cable companies, because subscribers wouldn't need them to deliver their favorite programs in bulk." Frankly, I don't see this as much of a competitive threat. I don't see these mobile devices as replacement to televisions.

What does appeal to me is the ability to augment your cable viewing experience with mobile. I recently found myself on a Sunday afternoon away from watching NFL football at home; instead, I was watching my son's little league game. Next to me at the field, a friend had his blackberry on, watching a live feed of the Giant-Eagles game. I immediately wished I had the same service. Direct TV offers this mobile connection; slingbox does as well. Does cable have anything to fear from iTunes - no; but they do need to bring their TV Everywhere concept into the 21st century and use a slingbox like approach to bring your cable subscription to your other platforms. The distributor that does the better job of enabling and marketing that application will see their market share rise.

Comcast to Buy Cable Nets and Sell Rest of NBC?

Everything that NBC Universal has built up, the acquisition of USA and Sci Fi, then Bravo, Oxygen, and most recently The Weather Channel, could soon come apart. With a sale to Comcast, the only thing of value to Comcast are the cable nets, less so the broadcast network and its owned and operated stations. "One Wall Street player confirmed market rumors that bankers have already descended on the MSO's Philadelphia headquarters to work with management on selling the NBC Network and stations to a third party. Comcast had no immediate comment on that still-hypothetical possibility."

Is this what GE wants, will this provide Vivendi with the value they want for their investment? It seems Comcast knows exactly what they want and are not afraid to dismantle the infrastructure to get to their prize. It is a far more strategic plan than acquiring the whole thing. Will Universal and the theme parks go as well? I would expect so.

So who might want a broadcast network without cable networks to balance it out. Today the profit is in cable not broadcast. And with the current programming on NBC in prime time (i.e. The Jay Leno Show), this fourth placed network has less value to offer. Who would want this dog without and an affiliate network that has become less viable when the web can be much more hyper local. Is this the future for NBC Universal and who could possible want to buy this shell of an asset?