Verizon Finally Getting The IPhone??

Per today's NY Post, the exclusive arrangement between AT&T and Apple will end on December 31. Beginning January 1, 2011, Verizon will also be offering the iPhone device to consumers. Despite this headline grabbing news, the is not official confirmation from either Verizon or AT&T. While speculated for quite a while, the discussions around the iPad may provide some clue. It was believed that exclusivity ended today but the iPad deal with AT&T extended the terms through the end of the year. If that info proves true, then 1/1/11 will be a lucky day for those wishing to have an iPhone on a Verizon plan or wishing to switch providers to improve call performance.

Wired vs Wireless

A ton of investment has gone into building a wired broadband world by both cable and telco. But the rise of iPads, iPhones, Kindles, laptops, and other wireless devices has led to the explosive demand for wireless spectrum. The government may be listening. "The Obama administration is seeking to nearly double the wireless communications spectrum available for commercial use over the next 10 years, an effort that could greatly enhance the ability of consumers to send and receive video and data with smartphones and other hand-held devices."

Can cable benefit from this change in the entertainment landscape or will they find them going from the top of the perch to the bottom of the abyss. Knowing that the consumer wants their content wherever, whenever, means they must adapt to a changing need. Should cable buy a wireless player and finally offer a fourth package of services to co-exist with its other three - cable, phone, and broadband? Will both wire and wireless co-exist nicely so that the current plan remains the strategic direction? Or should cable be worried? "Cable companies that have invested heavily in wired telecommunications networks could also lose from the new direction."

Add this new wrinkle to the FCC desire to regulate broadband and trouble may indeed be brewing. As content finds its way from scrambled on the cable line to accessible via the internet, the consumer wants it when they want it. A great example remains the World Cup where viewers watched on both wire and wireless devices. As wireless becomes faster and more abundant, consumers will seek this higher ground. Wire may need to be worried.

Soccer Proves Games Don't Need To Be On At Primetime

If the World Cup proves one thing, it is that we will watch live sporting events no matter the time. Despite games stating in the morning and afternoon on the east coast, viewers are watching in droves. "Wednesday’s United States-Algeria soccer match was watched by an average of 6.2 million people and 4 percent of American households on ESPN, both records for soccer in the history of ESPN networks." And of course that doesn't measure all the other ancillary devices and places that the game is seen. Yes work productivity may suffer a little, but viewership is not. And given its daytime viewership, we can actually watch the entire game, from beginning to final minutes. In fact, soccer has never been more popular in the US. The result of games at reasonable times may simply yield more long term fans, both young and old. Perhaps this news is something that other major league sports should consider.

With baseball, football, and other US sports, late starts mean late endings. The day when kids could come home from school in time to catch the baseball game has become a distant memory; too few and too far between. We can only hope that the networks look hard and long at the World Cup success. Maybe then, some World Series Games could actually start in the afternoon and we can watch the entire game. And as content is untethered, we can watch games regardless of here we are - at home, at work, outside. And with better scheduling, the leagues and networks may actually grow their fan base, just as soccer is growing. But if they don't, be forewarned, soccer interest could one day overtake baseball in fans and viewership.

Time Magazine Poised For The New Consumer

While Newsweek and Business Week had to sell, Time Magazine says it is thriving. It recognized the changing consumer and adapted accordingly. Among its changes, it moved its publication date from Monday to Friday to capture and adding more content to its website to bring on more viewers. And it found a strong enough core business to sustain its subscription sales. "'In terms of our category, we're not only the last guy standing — we're the only guy standing,' says Rick Stengel, Time magazine's managing editor, its most senior editorial position. 'We convert information into knowledge. Knowledge is what people want. Information is the commodity.'" In addition, they built an iPad App and other digital readers. They recognize the value that digital can offer. "Stengel says, he'll be happy even if most readers know little about Time's print edition — as long as they're paying for the magazine's electronic touch tablet editions." That is clearly someone that recognizes that change is inevitable and one must adapt to it or lose because of it. Time Magazine is clearly adapting to a changing landscape.

For Mags To Survive, More Reliance On Subscription Revenue

The cable programmer model works really well. It gets money from license fee that is passed from cable operator to consumer and it gets money from :30 advertising. It worked so well that broadcast networks are asking for license fees too. And now the print business is putting more reliance on subscription revenue. With the rise of online access, e-readers and iPads that can provide a digital version, subscription revenue may be print's lifesaver. "Publishers have been criticized for becoming overly dependent on ad dollars while letting consumers off the payment hook by selling cheap (and unprofitable) subscriptions—a disparity that became all too apparent when the ad recession hit."

A consistent license fee from consumers offers an important cushion to the health of the business. And new digital versions of a print magazine with more robust content and interactive access can be more valued by the consumer. Exclusive content access, available inside a walled garden and accessed through subscription could save the magazine business. And it may lead to the resurgence of shuttered magazines like Gourmet. "On June 22, it announced plans for a fourth-quarter launch of Gourmet Live, a food-centered social media app that will be free to download but ultimately be driven by consumer payments. Condé Nast expects to test pay approaches including subscriptions and virtual currencies popular in the gaming arena." It sounds real promising.

NBC Affiliates May Be OK With Comcast Merger

Comcast is rounding up supporters of its merger plan and agreeing to conditions to get them to voice their approval to the FCC and DOJ. The latest are the NBC affiliates, whose business could be seriously affected by a merger of content and distribution. And what seems to be the biggest condition, that live sporting events like the Olympics, Super Bowl and others are kept on free TV and not moved to cable. "The affiliates argued in a joint submission to the Federal Communications Commission that Comcast could woo new customers by putting popular sports events on channels that require monthly fees. Comcast already serves 23.8 million customers as the nation's largest cable TV provider."

Really? Sporting events. That will keep your business alive post merger. Seriously, more sports are seen on cable then broadcast today. That is not going to save your business. How about the freedom of offering your program across multiple distribution platforms NOT owned by Comcast. Telco, wireless, IP, etc. How about a financial commitment to original programming production. NBC has shown that when you reduce your programming budget, your ratings suffer. The NBC affiliates need guarantees that they will get more original programming than the cable nets. Prove to them that the broadcast platform remains their most important business. Live sports remaining on broadcast is fine; but it is not the only condition that needs to be met to support this merger.

Other programmers, like Bloomberg and Wealth TV, are lining up on the other side of the merger fight. They argue that it would create an unlevel playing field for content creators and other distributor platforms, "saying the combined entity could discriminate against competing cable channels and have too much power in negotiations with organized labor."

In the meantime, much will be said to prove that the deal will be fair to all. Only post merger will the truth eventually unfold.

Cable Competition Fiercer

I personally never thought that the two year contract was a big stumbling block for consumers choosing FIOS over cable. It certainly was something touted in cable ads to scare prospective customers from switching from cable to telco. And for public record, I am still a cable customer, but every time I see my bill, I consider switching. I actually like d the two year contract cause it guaranteed the consumer that their price wouldn't rise unexpectedly.

But in a move to create a more level competitive playing field, Verizon is offering its FIOS service without any contract. "Verizon introduced the month-to-month option last month in Tampa, Fla., as well as in Pennsylvania, which 'met with very favorable customer response,' the telco said in announcing the expansion of the program Monday." Will this marketing move result in more connects, we will have to see. For those consumers who did see a contract as a stumbling block, this option should provide some of the flexibility they desire. Considering the time it takes for both companies to install their service, and the time the consumer must stay in their home waiting for the service call, quick switching should hopefully not be an option.

Will FIOS subscriptions rise through this new pricing offer, I'm sure in the short term there will be lift. For me, the key to success remains a combination of low pricing, great service, easy use, and terrific programming content. The latter three require strong differentiation marketing to let the consumer know all they offer that their competition doesn't. In a free market, competition is good and leads to the victor providing best for the consumer.

Does Broadband Access Need Regulation?

The FCC is finding new avenues to control the world wide web highway known by many as broadband. As content files get larger and traffic jams occur, will policing help the traffic flow. When I see real police manage traffic flow, I sometimes wonder if they are easing flow or simply exacerbating delays. The same may hold true on the broadband highway. The increase in government involvement tends to have the opposite effect on innovation. Allowing economic forces to work in a free market enables companies to technically improve and build better and better mousetraps in order to compete most effectively. With regulation, the impetus to improve is sometimes squashed.

"'Today's wireless and broadband markets require significant capital investment to anticipate and meet growing consumer demand,' said Mobile Future in a statement. 'Unfortunately, today's FCC action puts future growth and investment at risk and creates unnecessary turmoil in one of the key drivers of the U.S. economy.' Mobile Future members include AT&T and T-Mobile."

This action will surely be fought over years and will not find a quick resolution. Hopefully before regulation is in place, innovation can make the need for regulation unneccessary.

Apple iPhone 4 A Hit

Apple seems to know exactly what the consumer wants from its technology. Their successes continue to pile up, the latest being the pre-sale of its latest iPhone version. "Apple said pre-orders for its iPhone 4 rang up a new single-day advance-sales record -- despite massive ordering glitches that left many potential buyers hanging." That accounts for more than 600,000 orders in one day! How many are new customers and how many are upgrades remain to be learned, but it is a significant jump in just one day. It seems Apple can't build then fast enough to satisfy the demand.

And for Apple it is not a one time sale. Each of these consumers have access to the iTune site and will most likely order app after app to make their iPhone and other devices more appealing. It is that ongoing revenue stream that is Apple's greatest strength and will ultimately raise the value of their stock. As the line from the movie Field of Dreams correctly indicates, "If you build it, they will come."

Tivo Keeps Trying to Stay Noticed

Tivo is trying awfully hard to make their service indispensable to the consumer. Beyond an easy to use interface, internet connectivity, HD abilities, and now more social networking, comes a new application. "Television recording business TiVo Inc. set up a way for its users to show information like news, weather, photos or updates from social networks like Twitter or Facebook on TV." Called FrameChannel, the service lets viewers "put sports scores or traffic reports based on their Zip codes on the screen using various apps. Pictures from sites like Flickr or from social network pages like Facebook can also be run as slideshows." Nice features.

Unfortunately, the elephant in the room continues to be the connection to the cable company's system. The difficulty in obtaining CableCards and the installation process will cause most cable customers to simply retain their existing HD/DVR box and use other devices like their Playstation 3 to connect to the web. First things first for Tivo, strike real deals with the big cable companies so that Tivo is an automatic option for consumers. Figure out how to simplify the process of enabling an external box to connect to the cable platform. All these bells and whistles are nice, but Tivo has a bigger challenge to fix.

ESPN3 on XBox Live, But There Is A Catch

Viewers like their content across all their devices and like to push their content's availability from one device to another. TV programming should play on the web and web programming should play on the TV. So ESPN is providing that multi-screen flexibility. "ESPN3’s live video of 3,500 events, including Major League Baseball, soccer, college football and basketball games, will be available to Xbox Live Gold Members". But there is a catch. One, it is not free and two, you also must have internet service from a cable company who has bought ESPN3. "Xbox Live subscribers who pay $50 a year and whose Internet provider pays to carry ESPN3.com can now access the programming, Marc Whitten, general manager of Xbox Live, said today at the E3 video-game conference in Los Angeles." So you pay the cable company and you pay Microsoft. Do the economics add up?

Ultimately, I want to pay once for content and then I want the flexibility to show it across any of my screens. Some call it the 4A's - Anywhere, Any time, Any place, Any Device. Others describe it as the 4C's - cable, cellphone, car, and computer. But again, they only want to pay once for content. When the viewer is being asked to pay twice to access on their computer or through their X Box, they will not; rather, they will push the web signal directly to their TV and bypass the Xbox.

Certainly access of ESPN 3 through the XBox offers convenience, but the cost may stop it from being a success.

First Run Movies At Home

Going to the movies getting too expensive. Can't find a babysitter to leave the home to catch a new flick. Well first run movies may be coming to your big HDTV TV set. "Families may soon get the chance to watch in-theater movies from the comfort of their living room couch -- for between $20 and $30 a flick." If you start to do the math, home viewing could replace movie houses.

A family of four going out for a movie could cost over $40 just for tickets and another $40 for popcorn and soda. A couple with the need for a babysitter could be paying even more. The cost savings could be a real boon to film distributors because at a lower cost and easier accessibility, consumers might end up watching more movies and ultimately paying more money. Unfortunately, the loser might just be the movie house who will miss admission and refreshment revenue and ultimately need to raise prices to break even. As their costs rise, attendance will drop.

The hope remains that those that like to leave the house for the movie experience will continue to do so. Offering first run films directly to the home at a premium price will result in growth and not a redirecting of dollars from one pocket to another. "One cable source said: 'A home-theater window is a better proposition than the bricks and mortar store. Cable already has movies ahead of Netflix.' Within recent weeks, key studio executives have publicly expressed support for the new window idea."

Will this new home premium window be a good thing or will it hurt the movie theater business? The rise of premium networks, VOD, and other choices has yet to impact the movie theater experience. The rise of Imax screens and 3D keep us going to the movies. Innovation remains key and new opportunities should be viewed as a good thing.

Is Apple In Trouble?

Has Apple gotten too big for its own good? Are they no longer the scrappy little guy but the biggest bully in the room. Unfortunately, that behavior gets noticed and now the government may want to get involved. "The Federal Trade Commission is about to take the lead in the federal investigation of possible anti-competitive behavior at Apple, according to a well-placed source familiar with the matter." While I am a fan of Apple, I understand the need for an open and competitive marketplace. Control and openness are hardly ever synonymous.

"FTC Commissioner Thomas Rosch, in a presentation Wednesday at the Vienna Competition Conference, spoke about Apple, a source said. Rosch said that Apple's new advertising policies preventing competitors from doing business on Apple devices seemed problematic, and were potentially significant developments." I'm sure that Apple will argue that other devices are available and the consumer is free to choose which platform they wish to use. Consequently free trade exists in the market and Apple's proprietary ad engine is not anti-competitive. But Apple's success is its own worse enemy. They have built must have products and captured significant market share as a result. They are the game with few players able to reach their level. Even Microsoft has been unable to build an iTunes type business or iPad alternative.

Will an FTC or DOJ investigation lead to a charge. I'm confident the attorneys are already hard at work defending Apple.

Does The Consumer Know About VOD

At yesterday's VOD Summit, held in Philadelphia, a number of statistics were shared. One in particular was that 45% of set top box households use VOD. And the question was asked, is the glass half full or half empty? It sure means improvement from just a few years ago; at the same time, it means that more than half the households still don't use VOD. So what is needed?

Typical consumer behavior with their TV seems as follows: Turn on the tube and surf the channels. When nothing is found, go into the pre-recorded DVR shows and decide if something is worth watching at the moment, then head into VOD. Others though bypass VOD and go right into their DVD collection. The challenge is how to raise the awareness and added value that these homes already possess with their cable subscription but are not utilizing.

The challenge of VOD usage rests in three buckets, choice, convenience, and ease of use. For all three, education remains key to sharing the benefits of VOD. And that message must be presented consistently across all media platforms to break through the clutter. With tons of choice, sometimes too much can be too much and the consumer will pick none of the above. With choice and an overwhelming list to select from, comes the need for expertise and recommendations. In general, consumers want help in picking what to watch. The convenience comes from the technology, the speed of watching what you pick over waiting for a disk to arrive in the mail or going to the store to pick up a DVD. Convenience though could also be improved inside the viewing experience. Getting to places inside the show is difficult with a fast forward button that doesn't offer 15 minute fast forward or DVD type search functionality. With convenience must also come ease of use and navigation remains problematic with the set top box. An overhaul of the navigation menu is immediately required to bring more people into the space. The current "tree and branch" and clunky search does more to drop people out of the navigation process than get them to the shows they want to watch.

Fixing navigation, providing recommendations, and improving the trick feature process will go a long way in gaining more users to the VOD platform. Educating a consistent message on how to navigate and the benefits VOD brings to the home will entice more households to see the value of VOD with their cable subscription.

Tivo Patent Struck Down

Is Tivo in trouble? First they win their lawsuit then it is stayed and now the patent that may be at the heart of the issue may be invalid. If true, can Tivo survive? "The patent in question is TiVo's "Multimedia Time Warping System," U.S. Patent No. 6,233,389, which describes a DVR system that allows for simultaneous storage and playback of TV programming from a cable or satellite source."

Of course, this action will lead to even more appeals and this case will be stuck in the courts for even more years. And while Tivo tries to keep up with the pace of innovation, cable operators have not embraced Tivo software and have remained true to their own DVR boxes. Cablevision keeps pushing a headend based DVR. And networks are putting more and more content on VOD. The DVR may soon become an unnecessary device. Tivo may be losing their competitive edge.

Is Howard Stern Retiring From Sirius Radio?

Sirius stock is just a buck, Howard Stern's contract is up for renewal, and his investment is not paying off. So what is the self proclaimed "Master of all Media" supposed to do when his listening audience is miniscule. Perhaps get back to free radio.

While Howard's humor is not appreciated by all, what makes him funnier is pushing the line, not crossing it. When he is forced to stay on one side of the line of decency, his humor becomes more biting, more targeted, more creative. With too much freedom comes the low brow humor, the easy joke, the gross simply to be gross. Rules were Howard's enemy but they also gave him something to talk about and a tension that can make for truly funny.

Will Howard resign with Sirius or go back to terrestrial radio? While it is hard to read a lot into his current comments, it is clear to me that it is time to take the risk again and get back to basics. Over the air radio misses Howard and I believe Howard misses the larger audiences also.

Apple's WWDC Conference Opens Today And...

Apple's annual Worldwide Developers Conference opens this morning in San Francisco and once again the world awaits news on what is next from Apple. Of course, we have already seen the prototype of the next generation of iPhone. Will there be more? And what is in store for the iPad, iTouch, and Mac line of computers. And will more be said on his Apple TV, a device that never really got off the ground. Not only are fans interested in hearing what is in store, the stock market is watching, too.

Will price discounts be announced, software or operating system upgrades, or changes to the iTunes store? Perhaps more partnership deals to ensure more APPs make it through the pipeline to its devices. And there is always the classic Columbo line, "Just one more thing" to wait for. The bigger the news, the bigger the swing on Wall Street. Will today be one for the record books.

iPad the Savior of Newspapers and Magazines

Apple's iPad may be what ultimately rescues the newspaper and magazine industry. "Companies are paying newspapers and magazines up to five times as much to place ads in their iPad applications as what similar advertising costs on regular websites." And add to that a rise in subscription and content will remain king once again. The iPad appeal is that it allows print to be refreshed and updated at a moment's notice. it expands the print article to include video to augment the story. Just imagine Sports Illustrated not just writing about a perfect call gone bad by an umpire's poor call, but link the video and watch it along with reading the analysis.

No longer will newspapers be thrown onto the driveway every morning; rather, downloaded to your device. Coupons sent electronically and moved from iPad to mobile phone. And like a printed piece, authorized to be shared with others in your family. Will the iPad replace print altogether. Not immediately. For some, it will be hard to give up print. But over time, it will be the norm.

Cable Can Succeed As Hulu Fails

As Hulu tries to reinvent itself as a subscription service, it loses its foothold on the consumer. "Hulu, the free online TV hub, may be coming to Microsoft's Xbox gaming console soon as a subscription service. Microsoft plans to unveil the deal with Hulu at its E3 conference on June 14, according to tech blog Gear Live." A subscription service, despite where it is offered, causes the consumer to reconsider the value proposition.

At that point, it opens the door for cable to come in with its content and provide added (free) value by offering it online. Such is the case with Comcast which is offering its Fancast service as the opportunity as an authenticated customer to watch programming across multiple screens.

Customers that cut the cord are looking for other distribution platforms beyond cable that offer them the content they desire at a more reasonable price point. And while Netflix's subscription service provides tons of movies, both as streams and DVDs, a Hulu subscription requires the consumer to reassess its value over what cable offers with on demand, DVR, and online and what else is available free to watch over the web.

Will consumers buy Hulu? I strongly doubt that they can convert themselves from free to pay and compete. There is too much free content still accessible to consume. Has Hulu outlived its usefulness - perhaps!

Steve Jobs Believes The iPad Will Help Print Media

Steve Jobs, Apple's CEO, spoke at the Wall Street Journal's AllThingsD Conference and had plenty to say. One thing said loud and clear was the belief that media should be paid and and has value. "And he offered publishers advice: 'The biggest lesson Apple has learned is: Price it aggressively and go for volume. And anytime we haven’t done that, we’ve had more attenuated success.'" That certainly has been the strategy behind the iTune platform which has led to wide usage and revenue.

The iPad and other digital devices offers consumers a faster, better distribution platform for print content. When it is physically printed, its information gets quickly old; we live in an age of now and a need for the most current updates. Offering newspaper and magazine content on a digital window encourages consumers to purchase to get access, provided that this info is not available free elsewhere. Too much free content kills the pay model.

Is Zucker Done At NBC?

When companies are put up for sale, the prevailing winds say don't rock the boat. No sudden movements, no departure from the norm, steady sailing through choppy seas till the sale is completed. Done. Over. And such is the case for the proposed sale of NBC to Comcast. But despite such best efforts, and the rhetoric that management is solid and part of the future, change is being planned. One that comes with no surprises is that Jeff Zucker, long a fixture of NBC, will depart "with an exit package of roughly $30 million to $40 million, under the proposed exit deal, those sources said."

Clearly, NBC ratings have not done well under his stewardship. The Leno - Conan moves were a fiasco. And public opinion has not been very popular. But it is also hard to feel sorry for someone that will lose their job with $30 million plus in their pocket. Change is in the air.

The question that remains is what if the sale doesn't come through. Is it already done in back room hand shakes? Is the public FCC review merely for show? And is the merger of content and distribution, especially broadcast distribution, a good thing? It seems to me that the ship is leaving port, NBC will be in the hands of Comcast, Zucker will be gone. Plans are already being developed for post sale. I leave little hope that the NBC sale to Comcast will be denied.

Flash vs HTML5, Will Apple Blink?

Steve Jobs recently wrote his reasons for not including Flash in the iPad. Content companies seem to think otherwise. NBC and Time Warner both say that they refuse to reformat their video for HTML5 and that Jobs should accept Flash. And so the consumer seeking this content from these providers will be unable to view their favorite NBC or Time Warner Shows on the iPad. Will Jobs acquiesce or will these and other content creators that refuse find themselves missing a huge chunk of audience.


Apple already claims 2 million iPad users since its release a couple months ago. That number is sure to grow as the next generation of iPads are released. For now, it only represents the early adopters. And perhaps the video component of iPad is not the sole reason to purchase one. Users will find its multiple uses so important, that it may become as indispensable to carry as a mobile phone.

So who will blink first, Apple or the content companies. I suspect at the end, Apple's device will be the home run and the others will eventually join up and stop fighting.