Early 2012 Media Predictions

With the holidays fast approaching and a desire to beat others to the punch, I thought I would put together some media predictions for 2012. Some may be too obvious, others are a little more out there, but only to help my win-loss percentage! Agree or disagree, it's better to have tried to predict and fail, then never to have tried at all. So here goes.

1. Time Warner Cable drops MSG from its line-up on January 1. No contract renewal will come quickly although eventually one should happen. Should TWC and MSG agree to keep the signal on while negotiations continue into 2012, then it foretells my second prediction.

2. Cablevision is officially put on the sale block. The likely bidder is Time Warner Cable, but don't underestimate Comcast. And what about Verizon? Would the DOJ and FCC even let them bid. Let me also put under this prediction that if not Cablevision, another cable operator will certainly be acquired. Could it be as large as Cox Cable? Would Charter put itself for sale after picking up Tom Rutledge? But there are also smaller operators that might just be ready to give up the fight. Someone is going down.

3. Every prediction seems to include Apple and mine is a no brainer. There will be an iPhone 5 and iPad 3 in 2012. But I don't believe we will see an HDTV from Apple; rather, I am banking on bigger improvements to their Apple TV product. Let this little box do all the dirty work for any HDTV.

4. RIM/Blackberry gets sold. They have lost the mobile battle and need a new owner and leadership to rebrand. With no major enhancements to their product line planned for next year, it's like the white flag is already being waved. So who buys them? Google bought Motorola, so maybe Amazon needs to pick up RIM.

5. Hearing that the Super Bowl will be streamed for free next year, will cause the other major sports groups to do the same. The NBA, NHL, and World Series should all see their final games live streamed in 2012.

Okay, now a couple of more outlandish predictions. Anything is possible and here's a couple to make you think.

* A cable operator buys a wireless provider. As a wired distributor of content, the next space logically seems wireless. WIFI coverage may not be enough and perhaps there is new business opportunities in buying someone like T-Mobile or perhaps even Sprint. Would Comcast or TWC seem the likely party, absolutely. They could easily move their marketing from a triple play to quad play,offering cable, hardwire phone, broadband, and a wireless phone contract.

* There are too many discount web businesses, with Living Social and Groupon leading the list. Can they all survive or will one quickly exit? I've lost interest in checking everyday for deals.

* Another cable network loses its independence and merges with a bigger group. Who will it be/ I don't want to say, but consolidation continues to push forward and content distribution will only grow as big fish eat up the little fish.

* Barnes & Noble continues to diversify and improve its merchandising strategy in-store and sees a significant boost in retail business along with its growth with the Nook as well.

* Lightsquared figures out how to exist without hurting existing GPS signals. It will help to push additional competition in the broadband space.

So there they are. I hope you enjoyed reading my ramblings this year. If you like reading what I write, please share the link with your friends. To all, a safe and happy holiday. No plans to blog again till after the New Year. Happy and Healthy!!

Sports Networks Will Never Allow Cable Tiers

Let's just put it on the table, no major sports network will allow itself to be repositioned onto a cable sports tier. Not now, never. The latest contract negotiation involving a sports network is brewing between MSG, home of MSG networks and Fuse, and Time Warner Cable.

Come the end of this year, the contract is up and plans are underfoot to drop it from basic. Already TWC has dropped its sister network, Fuse, as a sign of things that could come if an agreement is not reached. It seems they are miles apart, MSG wants a 53% increase, TWC is willing to go up to a 6.5% increase. Of course at the end, an agreement will be reached and any increase will be added to their customers' cable bill. Don't even think that TWC or any cable operator will simply absorb that kind of a fee increase; ultimately, the consumer will pay more in their monthly bill.

TWC CEO Glenn Britt has an idea, "Shifting sports channels to a separate tier, as Mr. Britt said, would allow cable operators to shift the cost for sports channels to those sports fans who want the programs—and cut the cable bills for nonsports fans." Not a new idea and certainly not one that a sports programming network would even consider. The highest license fees for networks are with the sports networks. That includes ESPN, MSG, and others. Their monthly fees are based on full distribution across the lowest level of service reaching every household TV. Should penetration fall, those fees typically increase proportionately higher than the lost percentage. So placing sports channels on a tier that reaches half the total audience could result in fees more than double the amount than full distribution. A $5 monthly license fee could be $15 on a tier. Add together all the sports networks being placed on a sports tier and the cost to the consumer now becomes a luxury expense. The price elasticity model won't simply bend, it will break.

But it's not just with ESPN or MSG. Comcast Cable is rebranding its sports network Versus into NBC Sports Network. There is no way that they will want their channel on a tier either . And what about TNT, an entertainment network that also plays NBA games. They too charge higher fees than other networks to cover their sports costs. You also have professional sports with their own sports network, NFL and MLB. And Tennis Channel just won a suit to be repositioned on basic on Comcast systems. The thought of repositioning all sports networks from basic carriage to a separately priced tier may sound like a legitimate idea, but the cost from the loss of subscribers will price this package of sports networks to a level that most consumers won't purchase.

In fact, it may be more likely to push them to the web. Consumers will buy a la carte their NFL or MLB game and stream it through an app or their Xbox. They may watch less, but they will also pay for only what they really want to watch. And encouraging more cord cutting and driving subscribers further away from cable is a bad business decision for cable operators.

Is Gov't Blocking The AT&T - T-Mobile Deal A Good Thing

When I re-tweeted this link to the SAI article, I received a number of comments that agreed with the DOJ decision to block this purchase. Good news for the consumer, more choice were cited. But is that really true? T-Mobile is the fourth and smallest of the major players; Verizon and AT&T already own at least two-thirds of the market. With Sprint in third place and with half the customers of AT&T. So did the government do us any favors blocking this merger?

Without T-Mobile, AT&T remains number two behind Verizon. T-Mobile, struggling already, has two alternatives, find another buyer or drop out. They may have gotten monies from AT&T from reneging on the deal, but they have a long way to go to build out and bulk up. They need help. Should that buyer be the number three carrier, Sprint, would the DOJ nix that deal as well? The argument of loss of major competitors still holds true, it just brings Sprint up closer to AT&T although it still would keep them third place. If competition is the concern, then the argument to nix this deal as well still holds.

And what if T-Mobile decides it can't remain in this mobile world without a partner? What if they simply drop out and break up to smaller competitors? Competition is still reduced and all the DOJ did was hasten the death of T-Mobile. So despite the comments of the government actually looking out for the consumer, the likelihood remains that we still lose T-Mobile. The only difference, AT&T doesn't capitalize on the assets of a purchase.

The author of this article makes another good point. "Of course, this is (basically) the same government that still grants monopoly licenses to cable and phone operators in most regions, thus giving massive companies MONOPOLY control over those markets. And given how much most people hate their cable and telephone companies, if the government wanted to protect us from any monopolistic communications-company abuses, they could have started there."

Communication exists both in the carrier space and broadband world. With wireless hotspots growing around the country, competition for spectrum still exists. Technological changes continue to find new competitors to the space. Let's not forget that Lightsquared is still out there seeking approval to compete as well.

So yes, I agree that with the author that the government's decision to block this merger was wrong; inconsistent given the monopolies that it has already allowed to flourish, and not likely to change the competitive landscape because it kept a fourth competitor from leaving us sooner rather than later. In the next couple of years, we will likely still see the big four become the big three carriers. DOJ simply slowed down the process of change.

Ex-Cablevision COO New Charter Cable CEO

It must have taken a lot to cause Tom Rutledge to finally leave the roost at Cablevision and to quickly turn up at Charter Cable. And one has to wonder when his right hand man, John Bickham, will once again turn up at his side. As they say, third time is the charm, right.

But what caused Rutledge to so quickly depart from Cablevision after almost a decade of service? So far I have heard a few possibilities. One is that as a family business owned by the Dolans, the COO position was the highest role he could attain on the ladder. He simply isn't "family", unless he married into it. And with the programming networks, AMC and MSG, sold off, he had less to control. Perhaps Charter's offer of a CEO role and more "ownership" was compelling.

Another possibility brewing was that there was a big fight internally and a riff that made dealing with the Dolan's more difficult. Another newspaper has speculated that Rutledge was fighting with Jim Dolan's wife, Kristen, a marketing executive on the senior team. If true, I can only say that family and business never mixes well. But I personally find it unlikely that this is the cause of his departure. They have worked together from the beginning and it is hard to believe that any disagreement would have caused Rutledge to walk away. It just doesn't seem like his personality.

And the third possibility is that Cablevision has quietly been exploring a sale to another cable operator and Rutledge's days would be numbered if he stayed. That seems especially true if the new owner would be Time Warner Cable, the company he was at before joining Cablevision. That John Bickham also left a month earlier seems to put more credibility into this third scenario. Should Bickham actually join Rutledge at Charter Cable, I think that is more proof that this possibility has validity.

The truth will continue to emerge in the coming days and weeks. Rutledge has been described as a strong leader and he certainly led Cablevision to great success under his tenure. His hiring at Charter spells great potential for them to finally emerge as a cable leader. Despite being larger than Cablevision in number of subscribers, Charter lacks a clear center, both geographically and managerially. A Rutledge led team is good news for Charter's future.

If You Understand The Digital Distribution Platform, Can You Build Better Content?

Certainly the future of print lies in digital distribution. The rise in penetration of tablets and e-readers with digital content is that proverbial chicken and egg scenario where one continues to drive the other, perpetually linked. And this latest piece of news demonstrates the commitment that how well this digital content gets purposed in a digital form is just as crucial.

"Rodale is expected to announce that it has hired Anthony Astarita as senior vice president and general manager for digital and brand development. Before joining Rodale, Mr. Astarita served as Barnes & Noble’s vice president and general manager for e-commerce and digital products." It indicates to me that Rodale understands that delivering content to a digital platform is not enough. Maximizing the value of the new space requires understanding its strengths and weaknesses more completely. Bringing someone from the platform side can help Rodale reshape and deliver the content in a way that enhances the value of the content and fulfills the expectations of the viewing receiving it in this different form.

And I don't see this hiring as a means for Rodale to get into the hardware space. It is not their business nor should it be. Theirs is to drive content across multiple platforms and hopefully to be agnostic about which one the consumer might ultimately choose to view its content on. With Apple, Amazon, and Barnes & Noble vigorously competing along with other CE manufacturers, it is not in Rodale or other publishers' best interest to join this side of the fight.

The Nook and other tablets are not simple replacements for a magazine or newspaper. These devices bring more capabilities and more opportunities and this hiring should help Rodale and others to make its content more compelling, more interesting, and more necessary. Knowing the hardware side means faster loading, streaming, viewing options, interactivity, and other technological feats to improve the experience. And that can drive more subscriptions and more ad revenue.

Cablevision For Sale

Cablevision, the fifth largest cable operator in the US, is a very successful company. From its humble roots, it has grown and prospered with innovative marketing and an unabashed style of management. They coined the triple play campaign of cable, voice and data at $99 and heard initial jeers from other cable companies. But the campaign was wildly successful and soon these same naysayers were following Cablevision's marketing strategy. Even with Verizon FIOS in their neighborhood, they never wavered in their competitive fight.

At one time, they were operator and programmer with ownership of networks like AMC and MSG. But now each have been spun off into standalone, publicly traded companies. And Cablevision sits as simply a cable operator. So the loss of two executives, John Bickham, and Tom Rutledge, raises speculation that Cablevision may finally be for sale...for real this time. With Jim Dolan managing his primary interests of music and sports under the MSG Network, it may just be easier to sell the operation side.

And who might be interested? Time Warner Cable has longed for this operation since it has owned New York City. Other investors may simply be waiting to come in and snatch what has long been considered prime property. Is Cablevision for sale finally. The answer may shortly come out.

Content is King Especially For Sports Programming

Attention NFL Football fans, their TV deal has been renewed and pro football will remain on "free" television. "The broadcast networks will pay a total of nearly $28 billion in fees over nine years under the new contracts, which take effect after the NFL's 2013 season." Oh did I say free, I doubt it because ultimately those fees will be paid by a rise in cable subscription pricing. Broadcast networks will seek higher retransmission deals for carriage and those fees will be paid by increases in our basic cable bills. Advertising revenue will also rise as networks will demand higher fees for each :30 spot. And companies that pay higher fees will eventually price higher their goods and services to the consumer. It is the trickle down theory hard at work.

Occasionally operators push back on cable license fees but ultimately find agreement at some higher amount. Today that fight is occurring between Time Warner Cable and MSG Networks; their deal expires at the end of the year unless a renewal deal is reached. The likely scenario will be that no deal gets done at midnight of December 31 and the network is dropped. Other networks, print, and radio will blare messages from each side blaming the other for loss of programming. Fans of the network holler and ultimately some weeks or maybe months later, a deal is finally reached and the network is back on the air. It is then quickly forgotten until the next cable bill increase arrives in the mail.

Ultimately content is king and sports especially remains high on the list. How price elastic is this model remains to be seen. It may simply cause additional cord cutting by those no longer able or willing to pay for what they don't want to watch.

If You Have An Xbox, Will You Need An Apple TV

Connected TVs are emerging to be more valuable than even 3D. Manufacturers are building sets with wireless and wired connectivity to the web while at the same time streaming media is finding spots on guides of various set top boxes. All this while cable operators push to keep their cable subscriptions growing.

For younger audiences, more entertainment is happening through their XBox, Playstation and Wii gaming boxes. And streaming media companies like Hulu and Netflix are attaching their subscription services to these boxes. "According to a new survey and projections by Strategy Analytics, the connected TV player will sell 4 million units this year to capture 32% of the streaming media player market. The media player market includes competitors such as the Roku and Boxee boxes."

And while the first generation of Apple TV boxes haven't caught on yet, hope is on the horizon with a next generation Apple box incorporating its cloud service and app connectivity with iPads and iPhones. "But more importantly, the AirPlay feature in iOS allows the mobile devices to move media to the TV from the devices and allows the iPhone or iPad to serve as complementary screens." And of course the rumor that Apple will manufacture its own television set. I also hope that Apple improves the remote control experience and perhaps includes Siri in the set top and TV set.

The XBox game controller is also a more adept device in enabling search choosing what to watch. And consumers that own a gaming device may not see the need to buy another set top box controller. Still the Apple appeal should never be minimized. The TV set in the home is becoming more a centerpiece for viewing and interacting with content.

Competition for alternative ways to connect to the web is growing rapidly; at the same time, cable operators are doing nothing to make their cable boxes more user friendly. As more meaningful content moves over to web devices, the threat of cord cutting becomes much more pronounced.

Is You Tube Redesign Favoring Professional Over Amateur?

Once again, despite or desire for new things, we dislike change that affects what we are comfortable with. Change with the look of Twitter, change when our cable networks change their channel numbers, and now change with the You Tube redesign are all examples that get people frustrated. But change is meant to drive innovation and hopefully, once people get used to it, proves better, easier, faster, smarter than the previous version.

With the redesign of YouTube, the other question is being asked, is it meant to favor professional content over uploaded amateur content? Is it a move that raises barriers to viewership by guiding viewers to content that brings more revenue to YouTube? "In place of that free-for-all will be a new YouTube, more commercial, more predictable and, its owners hope, more televisionlike. The underlying reason is money, of course, but the immediate issue is control. By cutting away the user-driven underbrush and shepherding viewers, especially those with YouTube accounts, toward TV-like content channels — an increasing number of them produced by corporate media partners — YouTube and its owner, Google, will gain more control by giving amateur videographers less exposure and funneling viewers toward fewer choices." TV experience on the web, professionally produced, fewer but better content. Are the lines between the TV set and the web becoming more and more blurrier?

YouTube's original objective was to enable consumers to share their videos with family and friends. Upload once and share among all. But that primary mission has evolved over time as its original owners sold YouTube to Google. The business plan is all about revenue and "the redesign is to push the viewer toward the higher, more brand-name end." More clicks, more ads, more revenue, more profit. The amateur video will be pushed further down the long tail. And the higher the viewership on a particular "channel", the easier it is to charge higher advertising. Is the article calls it, "predictable viewership for specific content". It is the TV model pushing ratings to garner premium pricing.

Will the amateur videos still exist on YouTube? They still generate ad dollars based on total views across all video clicks, but they will be harder to find. How the search button will push these viral videos over professional content remains to be seen. It may affect too how the next piece of amateur content is or isn't discovered. Search and recommendations may be pushing more professional content over amateur and that might be the worst sin of all for You Tube users.

Last point, like any good business model, the more revenue streams the better. Currently, YouTube has only the ad revenue stream. That may change as well as You Tube ponders a premium model to gain a subscription footprint. It worked with Hulu Plus, why not YouTube. Free only works for so long.

Should Verizon Buy Netflix?

Build it or buy it may be the discussion inside Verizon these days on what to do about a movie rental business. It seems owning the wireless spectrum isn't enough, it is important to also have services to sell on that pipeline and the movie business can be lucrative.

As video consumption shifts more and more from DVD to online, so too changes the consumer preference to either own or rent. Studios pushing the sale strategy are pushing consumers with cloud ownership of digital copies with every DVD sold. And of course Apple and Amazon are there as well with their cloud strategies.

The movie rental business has been shaken up in recent months with the various missteps made by Netflix. And Blockbuster is trying to refocus their business with the help of their new owners Dish/Echostar. So now Verizon is considering making a play for Netflix and perhaps to help them re-establish their formal glory. "Chief Executive Officer Lowell McAdam told an investor conference on Dec. 7 that the company aims to move beyond its Fios TV service into the streaming-video business." And while the speculation is that Netflix is on the Verizon radar, why isn't Hulu also being considered. Hulu has indicated an interest in being sold while Netflix has not. Both require bandwidth that Verizon can support and Hulu offers a duel revenue stream of subscription and advertising. Plus Hulu doesn't have the burden of mailing DVDs and could support a theatrical film streaming service expansion.

Yes, I like the idea of Verizon pursuing a streaming distribution strategy. I just wonder if all the baggage hanging over Netflix will not allow them to recover and prosper again. My vote is for Verizon to consider a Hulu acquisition but should it be Netflix, the first order of business would be to roll back the pricing model, market to all former customers with an additional special incentive, and consider rebranding. How does NetFios sound?

Don't Write Off The Kindle Fire Or Amazon Just Yet

Today's New York Times' article might have left you feeling that Amazon's Kindle Fire was a failure. Sure there are complaints but that is not unheard of in this new unknown space. The tablet is still a very young product that has yet to reach its full potential and first generation problems can be cured if Amazon stays front and center with its customers. Empathize with them, recognize the inherent problems and come back ASAP with solutions; some may need to be short term fixes, others long term changes, but by being honest and agreeable with the customer, Amazon will retain them and continue to grow their share of the business. "Despite Amazon’s silence on the matter, analysts have been estimating the company will sell from three to five million Fires this quarter."

Amazon still needs to speak up loudly. Again history being a guide, how Tylenol quickly reacted t their packaging challenges many years ago enabled them to survive through a PR nightmare and remain a dominant brand. It is that truthfulness and commitment to act that can save or bury any brand. Even successful companies have made missteps. "All this would be enough to send some products directly to the graveyard where the Apple Newton, the Edsel, New Coke and McDonald’s Arch Deluxe languish. But as a range of retailers and tech firms could tell you, it would be foolish to underestimate Amazon." In fact, as many have seen, we learn much more from our failures than from our successes. Unfortunately some companies are not as quick to manage their mistakes. Look no farther than Netflix and the troubles they have had.

Amazon and the Kindle brand have built a ton of loyalty over the years just as Apple has had with its products. Communicating with that audience and managing that trust in a proactive way while resolving technical issues is the ultimate PR cure. Especially as articles, like the one in the NYT, appear. Otherwise, the opinion in the article's first two lines will be recited over and over again as fact..."The Kindle Fire, Amazon’s heavily promoted tablet, is less than a blazing success with many of its early users. The most disgruntled are packing the device up and firing it back to the retailer." And that is not the kind of perception Amazon wants to have floating around.

TiVo Having A Good Month

TiVo seems to be all over the news these days with more and more good news regarding its distribution. Earlier this month came word that DirecTv was pushing its TiVo box and now the rollout of TiVo on Charter in the Fort Worth system and full rollout by June 2012. This deal was announced almost one year ago so it is nice to read that it is actually available in market. "Charter-branded TiVo PremiereCharter's TiVo DVR will be $20 per month; during a limited promotion period, subscribers can get additional TiVos for $10 per month for 12 months."

"For TiVo, attracting subscribers through operators including Charter and DirecTV is critical to its future. For the quarter ended Oct. 31, TiVo gained 117,000 net subs, thanks to the rollout of a TiVo-based box by the U.K.'s Virgin Media -- its first net gain in more than four years." These US deals should give TiVo another strong quarter. As a TiVo fan, I look forward to seeing them drive distribution across the other major cable operators.

ABC Putting First Season Shows On Web

There always seems to be a little hesitancy when it comes to making TV shows available outside its linear time slot. Before web video, it was on demand and networks were extremely cautious about offering their best shows on this new distribution platform. When on demand first was offered, cable operators were lucky to find scraps of shows that networks were willing to offer. Some may argue that contractual issues prevented networks from placing shows on demand; most others were fearful that on demand would take eyeballs away from ratings and thus hurt their financial success. But there were some cable networks willing to take a risk with on demand. Some actually offered sneak peaks of their first run shows prior to their linear time slot. The result, audiences grew and ratings didn't suffer. Today we have more sophisticated research to show viewership and build ad revenue, but it has taken years to gain acceptance.

But technological change doesn't stop and the growth and demand for more online video runs rampant. So it is great to read that ABC is using the power of the web to grow interest and ratings of its first run series. "Looking to give a promotional push to two promising series, ABC will make their entire libraries available online over the next month. All episodes of new first-season shows “Once Upon A Time” and “Revenge” will be accessible on ABC.com or through the network’s iPad player." Especially for episodic shows, a great opportunity for new viewers to catch up and get engaged with the show.

Online can also provide better targeted advertising that appeals to the viewer. More interest, more viewers, and more revenue. Today's primary audience, Adults 18-49, are spending more and more of their time on their digital devices - laptops, iPads, iPods, and iPhones. Getting them to discover new TV shows is tougher given the clutter of choices that exist. Bringing shows to them online is the first step in re-engaging with them where they are most likely to view. I look forward to hearing from ABC how this digital tactic has worked to build stronger viewership and interest in their shows.

Is Research In Motion (RIM) For Sale or Going Bankrupt?

What is the long term future for Blackberry? Once the darling of all businesses, it has lost its edge to both the Apple iPhone and other smartphone devices. Blackberry has not adapted fast enough and it allowed others to successfully takeover its space and market share. In addition, it's take on the tablet market with the release of the Playbook demonstrated that they did not understand the needs of the consumer. "We are still shocked the Playbook does not have native email functionality". What is obvious is that RIM behaved like other market leaders; they were set in their ways, adverse to risk, and unable to innovate against its rivals.

So the question is what will happen to RIM. Analysts don't seem to believe that RIM is an acquisition target, although they continue to see a depressed stock price. But what if a company was kicking the tires on the maker of Blackberry and could build some synergy to advance themselves in the mobile marketplace. Google took that step with Motorola. So let me throw out one name offered to me this morning. Could Microsoft benefit from purchasing RIM? Blackberry still has its feet in the market and there are loyalists to the product. Microsoft has the operating system and as my friend speculated, Windows 7 could be built into the next generation of blackberry products. A risky purchase given the trajectory that RIM is headed but fresh legs through acquisition might just allow it to survive and prosper again. Food for thought as the mobile industry continues to expand.

Verizon and Cablevision Fighting Again

Even when I am not looking at the TV, the moment a certain music bed is played, I know that it is the Verizon FIOS ad regarding Cablevision's slow broadband speed. Then I look up to see a closeup of eyes moving in circles with the VO ..."Are you suffering from cable...vision." As an ad, it is memorable because of its unique music, copy, and video; but is it accurate? It seems it may have been true in March of this year but not anymore, not since Cablevision upgraded its plant. "According to Bloomberg, the suit states that the study was conducted before an upgrade of Cablevision plant boosted performance significantly. The Bethpage, N.Y.-based MSO said its average download speeds are more than 90% of advertised download speeds during peak hours and are above 100% of advertised speeds on a 24-hour basis." Yet, at this point, the ads are still running.

And while Verizon fights with one cable company, it has agreed to partner with three others as a result of a wireless transaction deal. At some point in the next three years, Comcast, Time Warner, and Bright House will be able to sell Verizon Wireless service packaged with a cable subscription.

Lastly, the fight between Verizon and Cablevision may not be as simple as it seems. It's not just about broadband speeds. Although MSG and AMC Networks are no longer owned by Cablevision, they do share a common family ownership. Lack of deals for the hi def channel of certain networks may have raised the notch for nastiness in this latest battle. And as the ad has successfully caught the consumer's attention, it simply spreads more salt into the wound between these two telecommunication giants. Who will win; perhaps, the damage is already done.

Every TV Seems To Need A Connected Box

The days of turning on a TV set and turning the knob to different channels are long over. Our kids have no idea what a UHF or VHF channel is and only use one button on the TV set for on and off. A channel is locked on to one frequency and then the work of the other box begins.

So how many different connected boxes are attached to your set? Of course there is the cable converter box offering us HD signals and perhaps even a DVR. Others love their TiVo box for recording shows and some have even gotten CableCards to access cable programming. Those that need their programming to follow them outside the home have attached a Slingbox to their set. And some have unplugged themselves from this cord but still need the connection to the web for their over the top boxes, including Roku. And with every new one you buy, is one finally unplugged? Perhaps you have added a Blu-Ray but disconnected your DVD player and your VHS player was removed years ago. And for the gamers in the family, a connection is needed for the Xbox, Wii, Playstation 3, or even a classic Atari (although I hope not).

And TV manufacturers have tried to incorporate connectivity to the web so homes can access their Hulu Plus or Netflix subscriptions through the TV directly and not through another box. But it seems there is a need for an external box whether we like it or not. Perhaps Apple should update their Apple TV box with Siri and enable it to talk to all the other boxes that connect to the TV set. Then at least we could reduce the number of remotes on our coffee table.

Can The Xbox Replace The Cable Box?

It seems today that every TV needs some type of box next to it to make it function better. In the early days, that box controlled the antenna which tried to tune in the best reception possible. Since then, the cable box has been the standard device to deliver a quantity of channels. But truthfully, the cable box has improved little in the eyes of the consumer and its clunky guide and search has hurt it. So is the Xbox the next box to take over our TV viewing?

"Beginning on Tuesday and continuing through the month, Microsoft will give a face-lift to its Xbox Live online entertainment service that will allow subscribers to watch a wide array of mainstream television programming from the Xbox 360 console." So if you subscribe to Xbox Live for its gaming interface, you can begin to choose whether you want to watch programming through its box or your cable box. Since Xbox requires an internet connection and owners likely also have a cable subscription, it may simply be redundant. What may sway users from using one device to another is in its access to guide and search. "Xbox Live users will be able to search for shows using voice commands and hand gestures, if they also have the popular Kinect peripheral for the Xbox."

Voice control via Siri is likely the next big news from Apple although it is not yet clear whether it will be in their existing Apple TV device or a newly manufactured TV set. Still where that programming comes from and how much is readily available is a big if.

In both the Apple and Xbox world, the missing component is the DVR. Will the Xbox enable shows to be copied for later use? Will Apple add a hard drive for DVR capture in their device? Is DVR still important in an on demand world? Certainly not everything is available on demand and customers still like the idea of ownership. "The Xbox is just one of many devices, including iPads and smartphones, on which cable operators and channels are making their content accessible. TiVo, for one, has announced a string of partnerships with cable operators to make its digital video recorder available to their customers. Unlike the Xbox, TiVo users get full access to all of the offerings of TiVo’s cable partners, Mr. Rogers, TiVo’s chief executive, said." But what if TiVo struck a deal to put its software in every Xbox.

In our household, the Xbox and cable box serve two different uses. The Xbox is playing video games and online chats with friends playing at the same time. The cable box for sit back viewing. While integrating the two boxes reduces the number of connections in the back of the TV set, they clearly have two different uses. And in a big household, two sets allows one to be used for gaming while the other is used for viewing shows. The Apple approach of simplifying search through voice may be more ideal for those just seeking the viewing option.

Will DVD Sales Rise From A Link With The Cloud?

When was the last time you bought a cassette tape? When CDs were created, no one tried to sell you a cassette with every CD you bought. Most likely because you were still buying a manufactured item. But with the rise of digital and now the cloud, the need for manufactured CDs and even DVDs is less and less. Yet, it seems that companies aren't ready to breakaway completely.

The rise of UltraViolet and in the UK, Blinkbox, is still being tied to the purchase of a DVD. All with the hopes of improving a dying distribution model. And while this strategy may lengthen the product life, the patient will eventually die and be buried. Such as it was for the 8 Track, the cassette, and soon the CD and DVD.

For the short run, a dual purchase makes everyone happy. "This is a fascinating link-up between atoms (DVD) and bits (streaming). The added value of the dual option could drive more plastic-disc sales at the checkouts." Ultimately, the customer no longer seeks to clutter their homes with jewel boxes of various shapes and sizes when their digital devices both store and play. The arrival of cloud based storage enables access of this same content wherever and whenever you want, although it requires that wireless access is present.

How long will this shared model last? The speed of adoption of tablets indicates that this process should only last a few more years at best. Notice that no tablet comes equipped with a DVD or CD reader; even laptops are being built without the hardware. Change is a coming and like the Laser Disc, the DVD will also become part of our history.

Sony Changing The Window On Digital Movies

Sometimes you have to just move on. While we like to hang on to old ways and old habits, change is inevitable. And when you finally give change a chance, positive things can happen. For Sony, it means no longer being rigid on the order in which a movie gets sold or rented. The DVD model is no longer the customer choice for purchase; the world is digital and so it means changing the order to move digital sales up in the pipeline.

Sony's first step in change is with it's release "Bad Teacher". By moving up digital purchases ahead of rentals and DVDs, they saw a marked increase in revenue. "More good news for Sony: It says demand for digital rentals didn’t seem to drop once they became available two weeks after digital sales started. And physical sales — still the most important source of income for the studio — don’t seem to have suffered, either." Sounds to me like a successful test and one that should be repeated with every movie release. How quickly Sony embraces this new strategy remains to be seen; for now, they seem to like to classify it as a test only.

With the rise of cloud based services from Apple and Amazon, the switch to digital will only progress more rapidly. As digital becomes the preferred distribution choice, DVD sales are destined to decrease faster. It is the inevitable results of change in consumer preference. The pace of this switch can be slowed with aggressive pricing discounts. Where once DVDs cost $20 or more, today they are in the $5 bin. And at that price they become a great stocking stuffer too.

Cable Viewing Trending Like Broadcast

The most notable thing about history is that it tends to repeat itself, whether in political conflict, economic, and yes even in media. It is a common pattern, one that seems to surprise us every time it occurs. These changes occur, both in good and bad ways, but inevitably they always happen. Nothing is constant and human patterns tend to repeat themselves.

In the media world, we have watched as technological change has caused changes in viewing pattens, from radio to TV, TV, to cable, and cable to online. And yet, we seem surprised that the upstart is taking share away from the established media. So it should be no surprise to read that cable viewership is declining and streaming is increasing. "Several factors could explain the downward ratings trend. For one thing, the number of households with DVRs has reached 43 percent, and viewers tend to record broadcast network shows more than they do cable shows. Also more people are watching shows via tablets, smartphones and computers, where Nielsen’s traditional ratings methods have struggled to keep up with changing viewing habits." Count this household as one that has adopted more DVR, on demand, and streaming to its viewing patterns.

My kids watch a ton of their shows either on DVR or on the computer. In fact, they are finding more online only programs that they are preferring to watch and enjoy. For my wife and I, the DVR is our way to watch what we want when we want. As broadcast tends to play once and repeat months later, a lot of broadcast viewing is done on the DVR. The notable exceptions are sports and news. Heck even the award shows are watched on a delayed DVR basis. Cable shows on the other hand repeat and repeat and repeat. There is less of a desire to schedule to watch and they become filler until a better choice is found. And with on demand and streaming services like Netflix, it is easier to watch a movie any time of day.

The only thing that doesn't change is the time available to watch shows. With so many alternative viewing choices, the long tail of programming choices gets longer and longer. It chips away at the bigger networks just as cable stripped viewers from broadcast. The DVR, on demand, and web streaming have changed how we as viewers watch our shows. Linear becomes less relevant and too many linear channels only continues to dilute the ratings.

Apple TV Sets Coming in 2012

The Steve Jobs' biography refers to products in the pipeline even after his death and news around an internet TV continues to spread. There is word that Apple is working with Sharp to create the screen and that the set will do for TV what the iPod did for music. "Last month, it was reported that Apple had created a prototype of an internet-connected television product that can stream content from the cloud and use voice-control via Siri, the system incorporated into Apple's new iPhone 4S."

Great for those that don't use a cable box to receive their TV content, but what will Apple do to work successfully with cable operators. The cable remote has been repeatedly chastised as too many buttons, with too few features. It is too easy to press the wrong button and mistakenly turn off the TV or switch the channel. Apple successfully took a device and made it work with 1 button and then ultimately with simple touch. Today, a number of functions are successfully launched with voice, through Siri. It is less about the TV set and more about how one accesses its features.

What else is in store and what will a Job-less Apple look like, we can only wait and see. Let's hope that innovation remains its mantra.

The DVR Is Not Dead - TiVo Posts Gains

With so much talk lately about cloud services, streaming services, and on demand viewing, it's nice to hear some encouraging news about the growth of DVR subscribers from the premier service, TiVo. In Q3, TiVo grew over 100,000 units a complete turnaround from the previous quarter when they lost more than 30,000. So what changed? "Basically, the key takeaway point is that TiVo stopped focusing heavily on retail sales and is distributing more through cable companies -- a strategy that appears to have worked." New deals with cable partners like RCN, and better relationships with DirecTV and Comcast.

So what is TiVo's next step? Perhaps a better relationship with Echostar and a discussion to integrate Slingbox technology with TiVo. A stronger push with its cable partners to increase its rollout of TiVo set top boxes with a ton of marketing promotion behind it.

So here is to TiVo. Let's hope that this first quarterly increase in four years is not an anomaly but rather the start of renewed growth for the company. A great product deserves great marketing and higher use.

Will Siri Be In Every Apple Product

Everyone that has an iPhone 4S marvels how much they enjoy using Siri. It represents a major change with how we use our phone to call up apps or get answers to our questions. Whether it is a simple search, math question, emotional response or simply a phone number, Siri continues to prove itself as useful. And as we as users become more comfortable using our voices rather than our fingers to generate commands, it represents a turning point in our interaction with technology.

"But experts say that Siri – and what it represents – might be as subtly revolutionary as the iPhone’s multi-touch screen was when unveiled in January 2007. That’s because Siri isn’t just “voice dialling” or “voice recognition” (which tries to turn speech into its text equivalent); it’s “natural language understanding” – NLU, in the lingo." So how much longer before Siri is integrated in our next iPad or laptop. When will I be able to say "Siri, open word document...type please...To Whom It May Concern..." or "Open iTunes...play Best of Playlist".

As I finish reading the Steve Job biography, I marvel at how many devices he created that never existed before and how he made us want things we never thought we would need. Siri is one more technology that in his legacy he will have successfully launched within his closed end to end architecture. Siri will become the heart of all future Apple devices, future TVs included.

Is There Too Much Fragmentation In Media

Is it possible to have too much choice? The proliferation of cable networks, websites, and other forms of media have made it harder for consumers to find what they want. Even worse, while the tail keeps getting longer, revenue growth is limited. No doubt the big brands continue to provide great content but some still struggle to grow revenue. Low cost rivals scratch away at market share, and in some cases, find that lean and mean can thrive against fat and bloated. But is it time for some consolidation and fewer choices.

Industry life cycles result in the big firms swallowing up smaller rivals and proceed to create oligopolies in their industry. Product life cycles follow their corporate brands which results in companies buying and merging other products into their family of products. And some products simply vanish as their usefulness erodes and they can no longer sustain their business model.

So as I look specifically at the number of cable networks and watch as viewers begin to prefer shows over networks, watching them on demand or through streaming devices, I wonder if it is time for consolidation of network brands. Where once UHF and VHF dominated, then to analog feeds and now all digital, networks have spawned more and more offshoots of their lead brand. One example is the arrival of OWN, the Oprah network from the folks at Discovery. She excelled on broadcast but her show and her network cannot find a meaningful audience. Would it have been better to put her show on the Discovery or TLC networks?

But Discovery is not the only network that has built new networks as niche offshoots of its main brands. HGTV has DIY, Food has Cooking, NBC has Sleuth now rebranded as Cloo, WE tried with Wedding Central, VH1 has VH1 Classic. Is it time for consolidation and a movement away from linear networks to on demand? Are these niche networks only hurting viewership of their parent networks and is it time for the 500 channel universe to reduce to 100?

Like the music industry, we are moving away from album sales to individual songs. For TV, viewers watch shows not networks. Couldn't a reduced number of linear networks help keep them more viable as aggregators and recommenders of the best content. Too much sometimes just lowers the quality bar of TV content. And with the rise of DVRs, on demand, and streaming, viewers watch what they want when they want, where they want. Perhaps it is time to bring expertise back to TV network scheduling. Drop networks that aren't performing and let people watch those niche shows on demand only.

Boxee Encouraging Cord Cutting

While the economy and poor housing market have been repeatedly cited as reasons for consumers to downgrade or cut their services, there is still a desire to watch TV. Boxee has developed an alternative to the cable box to provide a cheaper choice for web and broadcast viewing. They are "preparing a new add-on product in January that will let users pull out the cable cord and plug a USB device into their cable box, giving them access to broadcast TV channels like ABC, CBS, Fox, and NBC for free."

You pay a one time fee to purchase the box and USB add-on and no more monthly cable charges. Unfortunately, consumers will have to pay for broadband access. And costs for broadband access are higher than when they are bundled with other cable services. Ultimately, we still pay.

So while Boxee remains a choice, so does switching cable providers and haggling for better pricing. We like the variety and quantity available on cable and thatmakes it hard to turn off completely. In a tough economy, we all become more astute consumers seeking out better choices and lower prices.

Authenticated Cable TV Viewing Outside The Home

Content companies, especially those with TV networks, have been negotiating with cable operators to receive incremental license fee payments for access to their networks outside the home on iPads and other mobile devices. Today, that access has been mostly limited to mobile devices inside the home. But why should a cable operator agree to pay more for these rights with any network when that access is already possible with technology? Why pay each network when cable companies could be integrating Slingbox technology into their current cable box?

The latest news from Slingbox is the integration of a player within Facebook, enabling a bit of sharing about what you are watching. Cute, but not so earth shattering. Couldn't this be better done with 2 screens.

Is it that consumers don't yet feel the need to have immediate access to their TV outside the home. Slingbox has been around for some time and consumers could on their own buy a box and add it to their system. But we don't seem to hear much news about how Slingbox sales are growing, although all of Echostar's equipment sales were down double digit in the third quarter. Is the idea of TV viewing outside the home what consumers really want? Do we prefer an out of home experience to strictly be an on demand one, where we can access a particular show when and where we want? Do we really desire linear access outside our home?

As to the pull on cable operators to negotiate higher license fees for out of home authentication, perhaps current technology is an alternative to raising costs and ultimately raising fees.

The Future Of TV

A terrific presentation that may just help us better understand where TV and the web are headed. The one adage that continues to play out is that "History repeats itself". We try to learn from it, we try to avoid the same pitfalls, but we continue to be faced with the same results. In business, that is seen as a disruptive influence on the mature model, causing a change in purchase behavior.

The music industry has watched sales of albums be replaced with single song downloads. In cable, networks have been bundled and sold together while the web enables single streams of video. And that, according to the presenter, is how TV will change. "My analogy is that 'cable & satellite bundles are the album. and given choice consumers prefer either singles or to make their own bundles.'” It is what consumers are already clamoring for, a la carte network choices as opposed to tiers, all to pay only for what you eat, and not ordering the whole buffet.

The web already enables a la carte and web viewership continues to grow while TV viewership declines. TV manufacturers are embracing this change by building connected TV sets, offering direct to internet connections along with a plug for a cable box. But their hope may be that the cable box will just go away.

And as our presenter acknowledges, the need for more content will only be greater. Content remains king in this changed model although how much more people can earn is subject for debate. What the web does do is to lower the barrier to entry so that more creative folks are able to produce and distribute content. The long tail lengthens and more people will earn money from creating content.

Ready To Buy An E-Reader Or A Tablet

The Holiday Season is upon us and lists are no doubt being written on what to buy our family. And Amazon, Barnes & Noble, Apple, and others have delivered an array of choices for our purchase pleasure. So what will it be, a Nook, Kindle Fire, or iPad? With so many choices on the market, the decision only gets toucher.

Well hopefully the graph from this article will make your decision easier. Ultimately it depends on what your primary needs are for the device. Do you need it to be a reading device or is watching videos also important. Must it have a camera and do you want to Skype from it. Does budget matter and must it be a tablet when an e-reader is more than enough. And lastly, does knowing that these generations will likely be modified in another 6 months with a next version, change whether you buy the most or least expensive device.

The rise of these e-readers and tablets this Holiday Season will most certainly capture the public eye and the consumers' pocketbook. Which device becomes the De facto winner remains to be seen. We may see an e-reader winner AND a tablet winner, or one device will outweigh them all. The fight is on.

Has Twitter Changed From Sharing To Selling?

Today's article on Ashton Kutcher and his Twitter issues regarding Joe Pa raised an interesting question. Is Twitter no longer the place for naive meanderings about whatever news or gossip you wanted to share, accurate or not, and now simply a marketing tool? How many times have we made a comment about something without knowing all the facts? I can raise my hand and certainly so can Ashton. No one said that all gossip and information was true. Ashton made comments about the Penn State coach and then retracted them once he was more informed. In the world of Twitter, shouldn't that be no harm no foul. Apparently not.

According to Ashton, “When I started using twitter, it was a communication platform that people could say what they were thinking in real time and if their facts were wrong the community would quickly and helpfully reframe an opinion. It was a conversation, a community driven education tool, and opinion center that encouraged healthy debate. It seems that today that twitter has grown into a mass publishing platform, where ones tweets quickly become news that is broadcast around the world and misinformation becomes volatile fodder for critics.” It reminds me of the SNL commercial parody about a bank who's business was making change. When asked how they made money, the answer was simple, "Volume".

But in the business world and with Twitter, volume is not enough; a business runs on revenue and that is the Twitter mission. With such a wide audience, it is no longer possible to be wrong without it reaching epic proportions. So Ashton learned the age old wisdom "to look before you leap". Twitter makes it too easy to leap first and say whatever is on your mind. But that is not always a good thing and this lesson may affect more than just Ashton and his tweets. Twitter's prosperity relies on being a marketing tool and not a place for mindless rants.

Adobe Agrees With Apple, No Mobile Flash

If Steve Jobs were still alive, he certainly would be even more smug about his decision to not include Flash on his iPad or iPhone devices. Despite the negative press, despite he competitive difference it could make for Android devices, Jobs was certain it wasn't good enough for his devices. And ultimately, his decision paid off.

Where once Adobe proudly told Apple that they were wrong, they must now back track and swallow their pride. Apple was right. Flash on mobile devices is no more. "We (Adobe) are excited about this, and will continue our work with key players in the HTML community, including Google, Apple, Microsoft and RIM, to drive HTML5 innovation they can use to advance their mobile browsers."

Hard for a company to change; that Adobe continues to adapt to a changing web environment and the needs of its users should be welcome news. In the short run, Adobe's stock has been hit, but in the long run, this change was necessary. Survival means adapting to change and not remaining locked in old thinking. For Adobe to make this change is ultimately a smart move.

AOL, Yahoo, And Microsoft Build Ad Partnership

In a bid to compete effectively against Google and Facebook, it seemed the best strategy was one of partnership. AOL, Yahoo, and Microsoft have agreed to work together to sell their unsold ad inventory. The article asks a good question, "The idea may seem a bit redundant, considering that all three already have massive reach—plus, if this is inventory they can’t sell on their own, why create a larger pool? Still, with Google and Facebook cutting into the portals’ traditional hold on display, this may be an imperfect answer to a challenging problem for all three."

Google and Facebook have each grown because they have made their sites compelling and valuable to use, and use frequently. As the dominate search engine and social network site, each essentially captures a huge audience making their ad sales efforts successful. In a world where content is king, the challenge for the others is to make their content sites equally as necessary and valuable to the user. With that comes eyeballs and more sold inventory at hopefully higher prices.

It may sound like a herculean task, but it is doable. Users are fickle and their tastes and interests change. New technologies and new content partnerships will continue to shape and change the landscape. No one stays on top forever. Companies stumble and get caught up with protecting rather than innovating. For AOL, Yahoo, and Microsoft, there is no time like today to get started.

Welcome To The Tablet Wars; Excuse Me, I Need A Recharge

With the latest release of the Nook Tablet, the players are set for a big battle, Apple vs. Amazon vs Barnes & Noble. Each has a different take and each is offering it's tablet at a different price point too. The iPad is the most expensive while the Kindle is cheapest to buy. And the consumer is left to decide which offers the best value for its investment.

Both Apple and B&N have stores around the country, although the latter is far more accessible in cities large and small. Amazon has been trusted as well with the ability to get merchandise into homes quickly and just as easily accept returns. As far as the tablets themselves, experts will soon uncover what the advantages and disadvantages are for each and confirm what target market they each best serve.

At the same time, they all will struggle with the same universal problem, battery life. Having just emerged from a freak storm, with some homes out of power for a week, people were charging their mobile phones off of their car battery in order to stay connected. Tablets offering more to do than simple e-readers will also see increased consumption require frequent recharging. It will be the company that makes that quantum leap in battery life that will truly become the market leader.

Multi-Platform Content starting From A Different Direction

For years, it seems, content has moved from video to print. ESPN created a successful magazine to further reach its video audience; Food Network and HGTV has also been building a magazine brand to enhance its brand. The strategy seems to have paid off as the magazine has a built in audience to attract. But this strategy has been less attractive coming the other way. Sports Illustrated tried to build a cable brand called CNNSI, but it is now defunct.

So now comes word that Condé Nast will try to build video content as an extension of its magazine brands. "A Condé Nast insider told WWD that (Dawn) Ostroff is planning to hire a small handful of development people — aka D-girls — to plumb Condé’s titles for script ideas and to hit the town and pitch them." While these are shows and not an entire network, the challenge to grow the brand is just as real. I applaud the effort. I believe that good content can extend across multiple platforms. The three key issues to successful growth are quality content, strong distribution, and solid marketing support.

With a built in audience from the magazine, you would think it would be easy to market to your targeted audience. But as CNNSI proved, Sports Illustrated could not move viewers over to their new network. It still lacked enough distribution and awareness to impact ratings. And Condé Nast will need to determine in what new form this content will be delivered, as web video, TV shows, theatrical films, etc. Video now comes in many flavors. Still, it is an important next step and strategically building a Condé Nast seems to be a right move in the evolution and growth of their titles and brands.

AOL Still Has Paying Subscribers!

Talk about hard to believe, AOL continues to receive revenue from customers needing dial up access to email and the web. According to the article, there are 3.5 million dial up customers paying about $17 a month. That is $714 million dollars annually for dial up. That to me is an amazing figure for a dead service. So why can't AOL transition into a new digital business when it has such a cushion still to work with?

AOL still has a strong e-mail service, a number of strong content properties, and a dial up business that is still attractive to certain customers with limited internet needs. What it still needs is people with vision to help set its future course in a direction that integrates web and mobile to its growth. Otherwise, their past will surely keep them from innovating the future.

Where Did All The Cable Subs Go?

As Time Warner Cable, Comcast, Cablevision and others have been announcing their loss in cable subscribers, the question has been where have all the cable subs gone. The cause has been attributed to cord cutting, low housing starts, and of course, the economy. But now comes word where a good bit of these subs may have switched to. "DirecTV added 327,000 net new subscribers in the third quarter, soundly beating analysts' estimates of 203,000 net new additions." That certainly covers all of the lost cable subs in Q3.

It certainly puts to rest for now the argument that cord cutting and housing starts are to blame. And not knowing the cost for DirecTV, hard to tell if the switch produces a ton of economic saving. DirecTV believes the higher sub growth is due to their NFL Sunday Ticket promotion. If so, then the motives for change are actually due to content. Content is King and in this case, that content is NFL Football.

Will SiriusXM Fall Into The Netflix Hole?

As we are proud to say, "it's the economy, stupid", we still seem to follow the same mistakes rather than learn from them. Netflix clearly fumbled the ball with a huge price increase at the wrong time. And Netflix continued to heap on more misery upon itself with a whole changing of the business model. So is it Sirius' turn to fumble with a price increase?

Sirius had troubles this past quarter with subscriber growth and a price increase on January 1 will only further erode subscription. "The company also had a harder time getting customers to commit to its service once its promotions end. It acquires most of its new subscribers by offering free trials of its service when people buy new cars. The conversion rate of trial subscribers who became full paying subscribers fell to 44.4 percent in the third quarter, down from 48.1 percent a year earlier." The price elasticity model is in place whether these companies want to see it or not. Consumers are rebelling at higher prices by seeking cheaper alternatives or cutting off altogether.

But it seems clear that Sirius is not about to change its pricing policy. CEO Mel Karmazin has said that the company has not heard any issues with its price increase; then again, they haven't put it into effect either. Once consumer receive their bills, there will no doubt be backlash. How it willcompare to what happened with Netflix we can only wait and see.

Content Companies Follow The Money

Whether streaming media deals encourage cord cutting or not, content companies still want to maximize their ROI on produced content. For Disney, that means selling TV content to OTT (over the top) platforms including Amazon and renewing with Netflix. For Amazon, deals like this one and others drive value for their new Kindle Fire. Content is the gas that runs the engine.

For Disney and other content companies, negotiating these deals requires a complex series of windows that give cable operators their first window for TV content and allows enough time before this same content is accessible on OTT devices. How long that window needs to be has most likely been determined through extensive research. Consumers willing to wait till content hits this secondary window will be more willing to cut the cord with their cable operator. Content companies are banking that the choice isn't a zero game of one platform or another and that these content deals only increase the revenue on produced content.

But the demand by Amazon, Netflix, Apple, and other OTT platforms for access to TV content will only put pressure on Disney and other content creators to keep shortening the windows so that fresher content reaches their smaller screens. This trend is already occurring with theatrical films reaching on demand, premium, and basic cable in shorter and shorter windows. TV content deals will most likely follow in a similar pattern and that will continue to cause more cord cutting by consumers from their cable providers.

Is Cable Cord Cutting An Economic Or Digital Response?

As cable operators announce their quarterly earnings, it comes as no surprise that cable subscriptions are declining. But rather than cite the rise of broadband and OTT content, the decline of subscribers is attributed to the poor economy. Poor housing starts, unemployment, and household budgeting are the rationale behind cable subscription drops as well as to cord shaving, removing higher priced premium services and digital tiers from the bill. The truth is that cord cutting is a result of BOTH the economic slowdown and the rise of web content.

Broadband has become the most important of the three services coming into the home; cable phone and cable networks lag behind it. That connection to the web brings a ton of short and long form content, what you want, when you want, where you want, and at a fraction of the cost. And younger consumers especially are gravitating to the digital model. The economy will come back but the younger consumer will have been weened off of cable and onto web content.

Google is banking on that transition and recently announced their launch of new digital channels. Web content partners as well as Hollywood celebrities are jumping on board to each "program" their own "channel". Should any of this content prove compelling, their niche could become mainstream.

Cable companies are adapting by looking anew at their cable line-ups and figuring out ways to lower their costs. Time Warner Cable has built a lower cost basic model giving consumers the entry to a smaller tier of networks and to keep them connected to on demand. And the growth of broadband subscribers comes with a larger profit margin. But it may not be enough. Operators must continue to push their role as the ultimate aggregators of content, not just in the home, but also through a mobile platform. That means constructing deals with networks that enable both linear and on demand access to all programming. Operators are competing with the web for revenue. Want access to the NFL Redzone, buy the app from Verizon; want to watch a baseball game, buy the MLB web package. Alternatives to cable are popping up and consumers are finding more choice than every before.

Higher Cable Bills Encourage Cord Cutting

Whether it's the appeal of over the top distribution platforms or expensive cable bills, consumers are cutting off their cable bill. Time Warner Cable's quarterly report echos what other cable operators have been seeing a decline in their cable subscription business. At the same time, internet subscription has been rising.

Frankly, part of the problem comes from us as consumers; we have a growing appetite for more. Whether consuming food, cable, or apps, we are not satisfied with what we have; we want even more. And perhaps it is time to go on a diet. Asking for more is not always a problem - more bandwidth, faster internet speeds - sometimes we should just go on a diet.

And perhaps that is what cable operators may have to start to consider doing. Going on a diet with the number of cable networks on the line-up. With the average cable networks' license fees rising 3.5% annually, those costs are being forced on to higher cable bills to consumers. Cable operators are starting to look at ways to either move basic cable networks to higher, separately priced tiers, for consumers to choose to buy or not, or to consider the unthinkable, dropping cable networks. The latter is probably much harder to do but as contract renewals come up, certainly a consideration.

But where to cut? Does a network with a Nielsen rating less than .5 get pulled? Does a Network group get told we are only taking your top 2 or 3 channels? How many movie networks does a channel line-up need, or general entertainment networks, or women's networks, and yes even sports networks. As Networks have grown up they have broadened and spun off niche networks that have broadened and spun off their own niche networks. Perhaps it is time for cable network consolidation.

Certainly cable operators are being faced with the unenviable task of deciding what to do with their cable packages to retain subscribers. In today's economy, cost is clearly a factor. But once we get back to economic prosperity, no doubt gluttony and the desire for more will comeback again. And that being the case, networks and operators could hold out and not make any of these drastic cost cutting moves in the short term.

Content Always On And Available...Not Always

Pulling a page from the Disney marketing strategy, Warner Brothers has decided that the best way to create need is to create want. This is being done by pulling film titles out of general circulation so that a renewed desire is created. Disney has been successful at pulling their animation films out of circulation only to re-release them to a new audience. They have repeatedly done this, the most recent being the re-release of "The Lion King" in 3D. A DVD re-release is soon to follow. A whole new audience got to enjoy this film in a whole new format. And for little marketing cost, Disney saw a huge return.

Now it is Warner Brothers' turn with the Harry Potter franchise. With DVDs everywhere and the films constantly being played on ABC Family, it seems time to hide them away for a few years and build some new want for the movies. Can these movies, aimed at an older audience than Disney films achieve the same kind of renewed demand. It certainly is a strategy worth testing. At the same time, the concern could be that this franchise could be usurped by another franchise. As there are no new Harry Potter books to come out, audiences may prefer to watch other more relevant book to movie titles. Percy Jackson are you listening?

Could Siri Be The Brains Of The Apple TV?

With the death of Steve Jobs and the release of his biography comes word that Apple has been working on building a new kind of TV set. No official word from inside Apple, but a ton of speculation around what could be the neatest thing to hit TV sets, voice commands. Just as Siri is taking the iPhone to new heights, rumors are that Siri could also be the extra pop in the next evolution of TV manufacturing.

It makes me think of old Start Trek movies. Scotty speaking to the pc, "Computer,get me...". So why can't we simply get the TV to first recognize our voices and then reply as we address it. "TV, turn the channel to Bravo" or "TV, record all episodes of Saturday Night Live." "TV, display DVR recordings or TV, search web for Daily Show clips". No more remote. No more buttons. All voice commands. Siri may just be the future of TV.

Will An Internet Sales Tax Change The Consumers Use of E-Commerce?

A research question popped into my head as I watched Amazon report lower earnings and see its stock price drop 10%. Sales were up but profits dropped due to higher spending on production, technology, and acquisition. So the good news is that consumers enjoy shopping online on Amazon and other websites. And it made me ask, would consumer spending change should an internet sales tax ever be established. Certainly some states already charge a sales tax and California is pushing one, but for the most part, we save money by not paying tax with our purchase. In fact, when I purchase online, I also see if shipping is free as well, another factor in deciding whether it might be cheaper to simply drive and buy at the store.

What economic impact on internet spending would result if an internet sales tax was established? Obviously we would continue to make digital purchases online, music, videos, and of course, books. But would we continue to buy material goods through the web if the cost (with tax and shipping) actually exceeded what it cost from a store? Would Amazon and other web retailers' profits suffer even more?

Today's politicians are discussing new tax models and an internet sales tax could be one of those pieces of their puzzle. And while an internet sales tax might bring in additional revenue, it might also act as another barrier to our economic recovery. An e-commerce sales tax may sound like an easy solution but it might also come with many consequences.

Smaller Cable Co-op Seeking TV Authentication

The big cable MSO's aren't the only ones seeking a TV authentication model, so cable subscribers can access programs on non-TV devices. The smaller cable operators want the same thing, too. The NCTC, Costco for the smaller cable operators, creates deals in bulk with cable programmers. The more customers that take the network, the better and lower the license fee costs. So as a next step, the NCTC "has launched a plan to create a centralized authentication platform for multi-screen services like HBO Go or those planned around the the 2012 Summer Olympics in London." And per the Light Reading article, they are trying to build the service from the ground up rather than buy or latch on to another.

But the challenge that they will really need to work through will be the content deals associated with TV Everywhere. Unfortunately, these same networks will not be humming the Jessie J song Price Tag:

"It's not about the money, money, money
We don't need your money, money, money
We just wanna make the world dance,
Forget about the price tag"

Rather, each network will be asking for incremental fees to enable access to content. Some will offer on demand only, others may be willing to deliver a linear feed. But they each would like additional monies.

Ultimately though, content companies have to buy into TV authentication as a condition of maintaining an audience. Without TV authentication, subscribers will be more inclined to cut the cord and leave cable, reducing the total license fees that cable networks receive. At the end of the day, it's about the money. Subscription fees have hit the wall and customers are getting tired of paying more for cable.

Don't believe me. The perfect example is happening in the news today. Netflix a few months ago raised their prices to a point that caused widespread disenchantment with the product. The result, Netflix lost 800,000 subscribers. TV authentication is a means to give customers another reason to remain loyal to their cable provider. But if the price continues to rise, loyalty will erode, just as it did for Netflix. At the end of the day, it is about "the money, money, money".

We Still Use Cellphones When We Drive

Despite laws and fines, I continue to see people talking on their cellphones while they are driving. One woman refused to make the turn at the left turn light because she was too busy chatting. And my beep to remind her that the light was short and others behind her and me also wanted to turn, was met with the flipping of the bird. But her cellphone and driving use is not unique; people make and receive calls, read and write texts, and perhaps even surf the web. I have been guilty of cellphone use in the car and my wife has cured me of that habit. We are now always connected, but sometimes we should unplug.

We have gotten so comfortable being in an always on world, that we forget that it is sometimes to our advantage to be off the grid. For drivers it is the safety of the road, for them and us, and for users, it is not social media to engage when others are trying to engage us in person. Yes, I am guilt of that too. We look down at our cellphone rather than in the eyes of those that are talking to us. Socially wrong, yes, but not illegal.

Driving and using the cellphone is illegal. But whether it was or wasn't, it is simply unsafe. For ourselves and others on the street. We don't have to be always connected. And if we must, pull over and return the call.

Businesses May Want Their Cable TV, Too

It seems that Time Warner Cable, and hopefully other cable companies, have figured out that businesses want more than phone service. With their entry into digital phone, cable companies have been able to compete with the tradition phone companies for business service. And cable has been able to offer more than just a phone line with internet and cable television part of the triple play. So it would have been natural to assume that Time Warner Cable and others have been actively pursuing businesses with the triple play proposition FOR YEARS! Yet this article seems to indicate that this push is only a recent push.

Truth be told, I am not too sure how many businesses want cable TV. In the age of pushing workers farther and getting more hours out of employees, TV, like the internet could be seen as a distraction to work. Yet there is a value to put TVs in conference rooms and waiting areas. But do companies want to show more than basic broadcast? A basic connection may be more than enough for businesses, with little upside to sell up higher digital and premium packages.

"In addition, Time Warner Cable, unlike its telecom rivals, has no mobile phone offering. That could make a difference down the road as competitors bundle smartphone service with the rest of their business package." As mobility takes center stage, cable will have to fight back with its own wireless play. Today, that push has been with WIFI, but a cellular network for mobile is also essential.

NYT Transition Difficult But Profitable

No one said that change was easy. But if one doesn't continue to change and adapt to internal and external forces, then one will surely wither on the vine. For the New York Times and other print content companies, it is recognizing that digital is supplanting print. Simply look at the number of iPads and e-readers being manufactured. With Apple, Amazon, Google, Microsoft, and yes even Barnes & Noble putting dollars into digital tablets, consumers will only continue to purchase more devices and want more content to power them. Content companies that sell quality content to these devices should only benefit.

And The New York Times is capitalizing on digital. The transition is painful and much work is needed to grow, but they seem to be going in the right direction. Profit was up for the last quarter and "it’s continuing to make progress on its metered paywall, saying that it had 324,000 paid digital subscribers—compared to 224,000 in Q2—along with paid and sponsored relationships giving the NYTimes.com over 1.2 million digital users." Through subscription and advertising growth with this exclusive content, NYT can continue to be a leader in media. They should consider capitalizing further with this customer base with e-commerce activity to add another revenue stream to the mix.

Where the NYT has had issues, beyond the natural decline of print subscription, is with About.com. About is a terrific website but it has seen intense competition, both from other how-to websites as well as from viral You Tube postings. And it is hard to be a generalist when there are many other sites narrower in niche and more robust. Just sampling the site, it is easy to see that some pages are dated. A page on Baltimore wasn't updated since December 2010, 10 months ago. About has an amazing history, but it needs a facelift to remain relevant for the future. Like it's parent, it needs to change and adapt.

Ultra Violet Brings Cloud Competition

It's time to take the fight to the "clouds" as in storage, streaming and downloading. With Apple and Amazon developing their own cloud platforms, "a consortium of large Hollywood studios, gadget makers and retailers" have been also backing UltraViolet, a cloud storage locker to enable movie ownership across devices. Their hope is that combining the physical sale of a DVD with a digital copy will reinvigorate the DVD industry. But they are running in third place as Apple and Amazon have each released their own proprietary cloud product. And neither require a DVD purchase to own a movie.

To date, each have their unique pros and cons and the Wall Street Journal has a nice chart differentiating each service. Obviously too, cloud competition is in the nascent stage, with not enough movie content or device choices and flexibility to stream and/or download. As this business grows. more content will become available. I also expect that content deals will start to include exclusivity over one cloud than another, just like what Amazon has done with DC Comics and their digital graphic novels. If you can't differentiate cloud service by exclusivity and other unique attributes, then you are left with price wars. The studios and other content creators don't want that.

Can UltraViolet succeed against Apple and Amazon? Only if consumers once again want to embrace ownership of DVDs. The DVD manufacturers that have signed on to UltraViolet might be upset if a DVD purchase was no longer required. Will consumers embrace the cloud experience? Certainly the push is on and the iOS 5 system on the iPhone and iPad include an iCloud subscription. But I should tell you, I recently uploaded iOS 5 on my iPhone and have deleted my iCloud account. It seemed to have caused a faster draining of my battery life and so far, without it, I am seeing a longer usage. As we depend on our devices to do more and more, power consumption and longer battery life must become the next priority.

Are QR Codes Working? Maybe!

As a marketer, QR codes were meant to drive engagement with print materials and validate through analytics the appeal of print. For consumers, QR codes gave their smartphones more functionality and returned more relevant information. They were the secret source that put print and digital into the same room. Today's newspapers use QR codes to give more detail behind the story and ads include QR codes to drive prospects to their websites. But are these ugly squares of lines and shapes successfully transforming the business?

This article written in iMedia Connection actually defends QR codes. And while the title of the piece may assume otherwise, consumers are aware of QR codes, how they work, and how they can be of value. The problem is not with the consumer using QR codes, but with the advertiser and marketers relying on them as a tactic. "Instead of placing a QR Code on an advertisement at the last minute, marketers and creatives need to incorporate codes into a campaign during the early stages of development, and they must do so from the consumer's perspective, not their own. Just these few best practices alone can help boost consumer interaction and response rates."

An interesting read, especially as smartphones continue to become the de facto phone in our daily lives. And as phones can more quickly capture and translate these QR codes, engagement will improve as well.

WIFI, Embraced by Jobs, Competes With Telco

Terrific opinion article in this morning's Wall Street Journal that should be a must read by the FCC and DOJ. I never knew the impact that Steve Jobs had on WIFI, but I am certainly not surprised. He recognized the impact that mobility had on society and embraced it in his devices. And what I learned about usage did surprise me. "Notice, for one thing, that the biggest deliverer of data to smart phones and related devices isn't any of the wireless carriers. It's Wi-Fi, which accounts for 33% compared to 8% for AT&T and 18% for Verizon."

So as the DOJ fights AT&T in their cellular acquisition efforts, they forget to consider that competition comes from more than one source. Our wireless usage comes not from cellular but from WIFI. And with cable companies offering WIFI coverage and competition being offered by Lightsquared, does the consumer have to worry about AT&T Acquiring T-Mobile?

Ultimately, we should let the market figure out ways to enable competition to grow. Too much policy restricts and does not encourage innovation. But I think the article says it best, "In other words, let's have a little more faith in technical and contractual innovations to manage our growing bandwidth demand while Washington engages instead in a more orderly rethink of spectrum policy."

iOS 5 Upgrade Problems

My wife and I had two very different problems upgrading our iPhone 4 to the new operating system. My download and install took multiple hours. My wife's install was faster and then the screen locked up and iTunes demanded a backup password. After two hours of multiple attempts and Google searches, we ended up losing all her data in order to turn her brick back into a phone.

Do we like the new features of the iOS 5; I especially like the pull down menu and info on the locked screen. But I am experiencing a significant drain to my battery life. By the time night time approaches, the battery is at 5%. That is 15% lower than what I normally see on a typical day of usage. Last night, I deleted my iCloud account just to see if that would result in an improved battery life. It reinforces that the next notable improvement in technology must be a quantum improvement in battery life.

Will this stumbling block with iOS 5 upgrades hurt Apple? The bells and whistles resulting from the upgrade are great. Apple should respond and correct these installation issues ASAP. Regardless, customers are still looking forward; to the release of the iPhone 5 and iPad 3.

The Challenge Of Owning Content And Distribution

Hulu and its owners are facing a real challenge. No one wants to pay their price and their model causes friction with their other distribution partners. Owning both content and a distribution path seems to be causing great angst. Can a distribution window be worked out that makes every one happy?

For a number of cable operators, the ultimate decision was to sell or spin off one or the other. Viacom in the 1990's sold their cable operations; Time Warner, Inc. spun off Time Warner Cable, and Cablevision spun off Rainbow and MSG (although they all share majority sock ownership by the Dolan Family). The biggest exception of this decade was the acquisition of NBCU by Comcast. And that has made content deals with other companies a more difficult one, too.

Hulu, owned by ABC, Fox, and NBC (now non-voting because of Comcast), has a difficult job of working through its content deals for streaming without overtly hurting its other cable distribution deals. But as cable embarks on a TV Everywhere philosophy, those streaming deals do cause friction. But no one wanted to buy Hulu fearing that these companies wouldn't continue to offer great content to the new owners post sale. "There are risks in keeping Hulu. The venture rankles some of its media owners' biggest customers—cable and satellite operators, who see Hulu as a potential competitor." For them, Hulu causes cord cutting. "Some media executives said there is value in maintaining a direct connection to consumers, rather than handing it off to other companies." But that would affect their subscription fees as well as the networks' current ad sales model. So Hulu finds itself stuck in a can't sell, can't compete abyss.

Can Hulu create a streaming window that is competitive yet gives their cable customers a unique window too? Is a 1 season exclusivity enough? Or does Hulu push the older shows no longer accessible on a cable network? Or has this experiment out lasted its usefulness and it is time to close the shop? Decide where your fortunes lie, as content owners or as distributors, it may not be financially in your best interest to do both.

Netflix Righting A Sinking Ship

Netflix has been having a ton of bad press, with poor management decisions leading to a loss of subscribers, and a huge drop in its stock price. So to return to normalcy, Netflix backtracked from its Qwickster spin off (although they kept their 60% price increase). So what is their latest plan?

Well this latest move says it all, content is king. To right a sinking digital ship, Netflix is adding more content. The latest deal with the CW gives streaming rights to all their shows. "Netflix can begin showing episodes of all CW scripted shows (not unscripted ones) beginning the September after the season in which that episode aired. So, any episodes airing now will become available in Sept. 2012." Great opportunity to recapture the younger audience who have enjoyed shows like "Gossip Girl". The monies spent could reach a billion. A lucrative deal, but the timing of its start is questionable.

But will Netflix be around to start airing shows and pay out. The content doesn't flow to Netflix till next September, almost a year away. Customers, annoyed at Netflix, may not stay around much longer as their prices have gone way up. And once you lose a customer, it is harder to win them back. Netflix needs more good news to offer to enable a turnaround and keep customers on board. Content acquisition can do it but the timing to offer it is now, not next year; otherwise the Netflix ship may only continue to sink.

Premium On-Demand Derailed

DirecTv tried to offer theatrical releases 8 weeks after they hit theaters into the home at premium prices and the results were negligible. Universal and Comcast tried to put an even higher priced model together for a film released just three weeks after it hit the theater and that program has been dropped. "After drawing boycott threats from Cinemark and a few small theater chains across the country, Universal has decided that it will no longer release their Ben Stiller/Eddie Murphy vehicle, Tower Heist, on-demand." It seems the backlash from theater exhibitors has sent a message to online distributors, "don't mess with us."

But perhaps the analysts also saw that the consumer was not interested in paying such an exorbitant price, almost $60, for a 1 day rental. And while the thought was that families would throw a movie party and invite friends over to watch; in my family, that sometimes happens when my kids invite friends over for a sleepover and they are looking for something to watch on TV.

With the loss of DVD rentals, content creators, especially movie companies are seeking other windows to recapture lost revenue. But replacing a DVD window with a premium on demand window doesn't seem to accomplish that result. Rather than add revenue it causes a backlash that resulted in theaters dropping those films from screens. It seems, consumers, faced with an overwhelming array of online choice, prefer now to simply rent or buy digital copies. With renting, the choices are plentiful at prices far lower than the premium model. Subscriptions for endless titles at under $10 a month and even on demand from HBO, Starz, and others. For those that prefer to own, digital copies from Apple and Amazon top the list, also at prices far lower than a $60 rental.

With DVD sales declining, will consumers rent more or buy more digital downloads? Certainly Apple and Amazon are being aggressive as they build up their cloud-based services. And as car manufacturers better enable their back seat screens to connect with more than just a DVD player (iPods, iPhones, et al), consumers will buy more digital downloads for their families. Movie studios need to better embrace these new opportunities; distribution windows should continue to matter and it makes no sense to hurt theater owners when there is no revenue upside. The easier you make digital distribution, the more it will be used.

Smaller Cable Networks Growing Their Niche

First cable networks started taking viewers away from broadcast TV shows and now niche cable networks are starting to take ratings away from their big network rivals. "Analysts said niche players are benefiting at the expense of larger cable networks. After years of viewers fleeing broadcast for cable, the cable audience is now splitting into pieces." The top 20 networks are losing share to their smaller rivals. Will this trend continue? Well as audiences discover new shows, they will only continue to gravitate to them. The trend simply follows what initially cable did to broadcast. Choice begats an opportunity to change.

These smaller networks are benefiting because they are actually owned by their bigger "rivals". "Meanwhile, niche networks saw gains, including Style (up 68 percent), HLN (ahead 48 percent) and The Weather Channel (up 36 percent), thanks in part to Hurricane Irene." In truth, Style and Weather Channel are owned by NBCU (owner of USA, E!, and a ton more), and HLN by Turner (CNN, TNT, TBS). So despite where the audience goes, their ad sales team can still offer them placement. In fact, these smaller networks are being promoted across their bigger networks. Viewership may be moving around, but the owners of these cable networks are really the same players.