NBCU Chief, Steve Burke, Sees Synergy As A Symphony

A terrific article in today's Wall Street Journal highlights Steve Burke's plans to add more synergy to the company. And while synergy strikes some with a negative connotation, he uses words like "symphony" to describe his cross-marketing efforts. "While other media companies are breaking apart to streamline, Mr. Burke is fixated on strengthening ties between assets as diverse as theme parks and cable channels like CNBC to pump up interest in NBCU's franchises."

One of the hardest things for a corporate culture to do is work together. Individual businesses work very hard to protect their fiefdoms, sometimes at the expense of the other business lines. Sharing and collaborating when viewed by companies as a zero sum game means that one unit loses for another to win. Thus building synergy among different business units is often a struggle. It takes strong leadership at the top with teams tasked with developing cross-marketing tactics across units. For when different units collaborate and play well together, the result, as Burke notes, is like a symphony, and the result can be a whole that is actually greater than the sum of it's parts.

Simple to say but extremely difficult to implement. That Burke is pushing the process early on is admirable and seems to have yielded early positive results. They include The Golf Channel - NBC Sports tie in, the promotion of Universal Pictures "Hop" with NBC, and the marketing of NBC's new singing competition, "The Voice".

This synergy strategy is against the grain of what other media companies have done to date. In fact, a number have gone as far as divesting themselves. "Several conglomerates have even re-shaped their empires, abandoning sprawling corporate models. In 2006, Viacom Inc. split into two separate firms, CBS Corp. that covered broadcast TV, radio and book-publishing and Viacom that kept most cable TV and cinema assets. Time Warner Inc. followed suit, spinning off AOL Inc. and Time Warner Cable Inc. in 2009." In addition, Cablevision is spinning Rainbow Media Holdings (to be renamed AMC Networks) off into a separate company as well later this year. As these other companies have had difficult times building synergy across their business units, divesting may have been their only recourse. For NBCU and their parent Comcast, it will be a huge challenge to maintain a synergy approach, but if accomplished will present them with a wonderful "Symphony".

Time Warner Cable Prefers The Web

CEO Glenn Britt sees Time Warner Cable's future and it isn't the set top box. Growth in broadband and over the top competition appears to have TWC finally embracing the internet. "Combined with the idea that they could some day raise prices on those who use the most data, the company painted a picture of a business that would survive the transition from traditional cable video to the Internet. 'High-speed data is quickly becoming the anchor product in the eyes of our customers,' Chief Executive Glenn Britt told analysts Thursday." This awareness certainly is based on the trends of the business although it should have been acknowledged much earlier. While their broadband subscriptions rise, even greater than forecast, video subscriptions continue to drop each quarter.

That broadband data, whether e mail or video content, is what is driving the cable business. It is also what is pushing TWC and other cable operators to push their channel line-up out on the web to PCs and tablets. But to embrace IP is to move away from EBIF and set top boxes. "The company's engineers are focused on delivering more video over the Internet to an array of devices include Apple Inc.'s iPad, developing technology that could eventually make cable set-top boxes unnecessary, Britt said." And necessary for a TV Everywhere experience.

This announcement might also be a blow to set top makers like Motorolla and Cisco (Scientific Atlantic), as well as companies building EBIF tools for the set top - Canoe Ventures, Ensequence, and others. TWC is a partner of Canoe and Britt's remarks about the obsolescence of the set top seriously undermines these companies' business models. It is the web and cloud computing that is the future of TV - network DVRs, interactivity, mobile content, and not a set top box in sight.

For Time Warner Cable, the numbers aren't lying. The challenge is how fast TWC and other cable operators can turn their ships to take more advantage of the web before other over the top competitors take too many subscribers away.

Comcast Adds More Broadcast On Demand Shows

With competition for eyeballs growing, Comcast knows that its on demand serve must be the biggest and the best. Combined with its Fancast streaming platform, Comcast can push its subscription value to its consumers. But to stay competitive and valued, the supply must continue to grow. Thus the latest deal to add more shows to its library of on demand.

"The largest U.S. cable-television company will include TV series from Walt Disney Co. (DIS)’s ABC and News Corp.’s Fox for the first time, including “Grey’s Anatomy” and “Glee,” the Philadelphia-based company said in a statement. Comcast will offer the four most recent episodes of each series on demand beginning tomorrow. Comcast is competing against other cable and satellite providers and online sites including Google Inc. (GOOG)’s YouTube and Netflix Inc. for viewers and advertisers. With the show additions, Comcast said it becomes the first pay-TV provider to offer original series from NBC, CBS, ABC and Fox on demand." Ahhhh, here those key differentiation words, first and original. Clearly, Comcast is feeling the pressure from these over the top providers as well as from telcos like Fios who will announce their own extended deals as well.

The on demand space isn't perfect. Some agreements will limit trick features like fast forward, a win for advertisers. For viewers that don't mind, it means more flexibility to watch on your terms and not on a schedule. And for those that know how to use their DVR, a non-issue. The day will come where every show is on demand and that could make DVRs unnecessary. Until then, Comcast and others will continue to push to increase their on demand library.

TV Everywhere - From Many Not Just One Source

In a wired world, the cost of maintaining and growing the platform, as well as the laws and regulations surrounding a wire, has led to a high barrier to entry and a monopoly of sorts. In the cable industry, you have the choice of only a few - cable company, telco provider, or satellite - to receive your cable signals. Otherwise, it is a digital antenna to receive TV programs. In a digital streaming world, your choices are infinitely wider.

As a consumer, you are not reliant on your cable company to watch shows. With digital streaming, barriers have dropped and multiple video providers have moved in to stream shows to you; not just tethered to your wired TV, but available everywhere and anywhere. Programs can be viewed on your smart phone, your tablet, your laptop, and yes, even on your TV. TV manufacturers have developed connected TVs that bypass the cable wire to enable streaming media to be enjoyed in a big screen experience. They have bypassed the cable operators to work directly with streaming media.

This upheaval in the entertainment landscape has challenged cable to push out streaming apps of its channels on tablets to compete with Netflix, Amazon, Apple, Google and scores of others. Want to watch Austin Powers, you can price shop - buy the DVD, watch on demand from cable, rent from Netflix, download from iTunes. And decide which service gives you the movie where you prefer to watch it - big screen HDTV, laptop, iPad, or iPhone.

It is this new world of TV Everywhere from many sources verse just one that will impact the cable industry. With many players competing for the viewers' attention, each service will compete on price, original content, speed and mobility. And it is that last factor that can hurt cable. HBO is helping cable with its Go product, but one network support is not enough. Dish Network has found its work around with Slingbox. Until then, Netflix and others will forge ahead with more content deals to become more valuable to its growing subscriber base. They are doing deals with many consumer electronic manufacturers and content creators to fill and distribute their pipeline of programming. And that means cord shaving, or worse, cord cutting, of cable subscriptions.

The Tablet Concept Developed By the Newspaper Industry

In 1994, Knight Ridder had already imagined a Tablet computer. I guess the fear of losing their print business may have stopped them from making this leap. Still a fun video to watch, especially that is was created over 17 years ago.

Can Netflix Keep Growing?

Netflix has successfully transitioned itself from DVD rental to streaming media giant. And consumers have flocked to join the service. "At the end of the first quarter, Netflix had 22.8 million subscribers in the United States, giving it as big a footprint as the biggest American cable operator, Comcast, which reported 22.8 million subscribers at the end of last year." At the same time, Netflix has recognized that content is king and is pushing into original content. So will this bubble burst?

Netflix faces a couple of challenges as well as opportunities. The challenges include a platform with low barriers to entry. Cable companies, Apple, Amazon, Dish/Blockbuster and others make it a very crowded space. Competition also pushes up the price of content. It follows a very simple supply and demand economic pricing model. And lastly, the product is only as good as the broadband path that enables it.

But Netflix also has opportunities. Its large customer base is ripe for an advertising model that would add another revenue stream to their bottom line. And as a leader, they continue to remain innovative and forward-thinking. As they learned from DVDs, the business is ever evolving. And lastly, Netflix might also want to consider new partnerships to compete. As Comcast is owning content networks, Netflix might need to do the same. Vertical models are forming and Netflix may need its own to remain ahead.

DVRs Are Helping TV Shows and Ad Revenues Are Improving

The NYT reports that DVRs are saving TV shows by demonstrating that the audiences are watching. "Instead the playback device is offering some shows a lifeline — so much so that network programmers now factor in ratings a full week after a show’s scheduled appearance." And in today's WSJ, Ad Revenues are improving. "For the second consecutive year, marketers are poised to spend more money in advance on commercials for the coming TV season than they did a year earlier, driven in part by unusually high prices for last-minute commercials this spring, according to both buyers and sellers of TV advertising." Put the two articles together, and DVRs are bringing in larger audiences and advertisers are paying for them. Certainly opposite from the thought that DVRs would hurt the TV ad model.

Truth be told, households still watch ads, even on DVRs. Especially when the content of the ads break through the clutter to resonate with the audience watching. Catch them quickly with a hook and hands don't reach for the remote to fast forward through them. In addition, Tivo is working with advertisers to provide better data to improve ad performance. With its latest legal victory, Tivo has also been in the news. Should more cable companies consider including Tivo in their own DVR, viewers would actually appreciate a better search as well as viewing experience. DVRs are in the news and it seems TV has nothing to fear.

Apple In The Clouds

Apple continues to prove itself a leader, not resting on its current success, and quick to adapt to a changing entertainment landscape. As consumers seek a purchase once, play everywhere (POPE) model, businesses have been pushing to centralize content to achieve a successful model. And while Google and others have announced such intentions, Apple seems nimble enough to actually move ahead of them. "Apple Inc has completed work on an online music storage service and is set to launch it ahead of Google Inc, whose own music efforts have stalled, according to several people familiar with both companies' plans."

Obviously the challenge of centralized content is that when the system is down, there is no access. Of course the same holds true when one's own iPod stops working, too. The question is, which model is sturdier and likely to withstand constant use. A centralized approach has perhaps an easier ability to backup and protect it's content and to have secondary means to keep the systems working. "Apple, Amazon and Google are battling for control of new digital media platforms through which everyday users will access their music and videos." It also pushes hard though the WIFI and cellular systems that connect content to device. Apple and others have no control on that piece of the communication puzzle.

But who knows; perhaps, that is the next step in the Apple world. To own a communication company that makes those connections. These vertical businesses are happening in cable. Comcast owning NBC Universal being the latest example. What is stopping Apple from doing the same.

Tivo Wins Again

Talk about a court case never ending and monies that may never appear, but Tivo has won again against Dish and the lawsuit still continues. "A panel of federal appeals judges has found Dish Network Corp. and EchoStar Corp. in contempt of court for failing to abide by an injunction barring them from using technology patented by TiVo Inc. in older Dish set-top boxes. The judges are sending the case back to a lower court to consider whether a work-around technology being used in newer Dish boxes still infringes on TiVo's patents." What is sure to follow is another round of appeals and more delays and by then, the technology will probably be obsolete.

Today, Tivo is to DVRs what Kleenex is to tissues, synonymous in the minds of most consumers. While certainly different in the benefits they offer, not understood by most consumers. And so while this legal fight will surely continue, Tivo must do more to ingratiate itself with both cable and over the top platforms. That means Tivo approved set top boxes, Tivo inside of XBox and Playstation and even a Tivo Apple combination. That is where the real winning will occur.

How Much Would You Pay for An On Demand Movie

If you enjoy the ease of watching a newer released movie in your living room as opposed to driving to your local theater, then the question to you is how much are you willing to pay to get those movies in your home sooner. Movie studios are willing to find out. They are proposing to bring films to your home in 2 months after its theater release as opposed to 4 to 6 months. Direct TV is scheduled to test this new service. "The El Segundo-based satellite television provider will launch so-called premium video on demand Thursday with the Adam Sandler comedy, just 69 days after the film premiered in theaters. Consumers will have to pay $29.99 to rent the Sony Pictures movie for 48 hours. That's the first time a major studio movie has been available on television sets that soon after playing in theaters and at that high a price." Other films will follow.

For consumers who weren't able to watch the film in the theater and can't wait till it premieres in the next window, this option gives them more immediate enjoyment. But at $30 it hardly seems worth it, especially when the price to view in the regular on demand window is under 6 dollars. There is perhaps the rare film, like Avatar, that might justify this higher cost for an earlier window, but I doubt the returns will be impressive.

Still as DVD sales have lost ground to the digital market, studios' willingness to try new ideas is impressive. If for $30 I would own a digital copy of the film and I could access on all my devices, then I might be more inclined to consider. But to rent a movie for that amount, I might as well wait for the cheaper DVD or normal on demand window. With so much product in the marketplace, there is always something to watch.

Bigger Push In Over The Top Content Could Hurt Cable Operators

Cable operators should not be surprised by this story in Ad Age. "A group of deep-pocketed companies, including Microsoft and Verizon, are exploring delivering TV service over the web, a move that could disrupt the economics of cable TV and lead to a new generation of "virtual" cable companies that provide TV without owning the pipe into the home." XBox Live is there already; it is simply trying to dominate the home screen in a bigger way. And don't discount Sony Playstation and Wii as well as the rise of web connected TVs. The push is on to bypass cable subscription to bring content directly to the home.

And as these businesses are competing in the cable space, cable operators are doing the same with mobile apps to access cable programming. "The talks point to a future where consumers have the option of buying broadband internet service from one provider and TV service from another. It also promises to make the current dispute between programmers and cable companies over the right to stream content to new devices like iPads look like child's play." A sea change that could change the relationship between cable operator and consumer.

Cable operators with a broadband pipe to the home will have some leverage. The challenge will be in differentiating the value of the service from other broadband suppliers. Access to broadband may not require that a home be wired and wireless players could hit cable revenues hard. If broadband access is seen as a commodity, ultimately the lowest priced service will come out the winner.

Are we talking a revolutionary change in viewing habits; obviously not. But we are seeing a rise in cord shaving and ultimately cord cutting. Early adopters are already using over the top programming while eliminating their cable bill. Others are actually paying cable higher fees for broadband service to improve their streaming. But the rise of alternative players and the competitiveness of broadband services will force cable operators to rethink their business strategies.

UltraViolet Helping Warner Bros' Push of Digital Everywhere

Consumers love simplicity. And the rise of Apps on smartphones, iPads, and PCs have enabled consumers to connect with the things they love - music, wine, TV, and movies. Warner Bros. is continuing its leadership approach by working with other movie content companies and distributors to create a seamless application, currently titled 'Digital Everywhere", to find, organize, watch, and share movies.

"'Digital Everywhere' isn't a retailer like iTunes, but rather it gathers all the various ways movies can be bought or rented. It also organizes an individual's entire library of digital movies and TV shows - not just Warner brothers. And it will consumers to access their library from any internet-connected device - a TV, laptop, iPad or smartphone - through a cloud authentication system, called UltraViolet, that will be released this summer from a studio consortium." It aggregates information, organizes your current film library, searches and shares recommendations of new films, and enables you to buy or rent to your platform of choice: iTunes, Amazon, Netflix, etc. With Ultraviolet, information is managed centrally and shared across different technological platforms. And by making search, organization, and purchase easier, consumers should appreciate the ease of use and sales should surely rise.

Warner Bros. maintains a leadership in Hollywood with a willingness to collaborate with its rivals for the good of the movie industry. Ultimately, the consumer will pick the content and not the studio; building an app that strengthens the movie industry as a whole will also bring good fortune to Warner Bros. individually. It is a smart strategic move.

Not yet included in this future App is the role that the cable on demand platform plays. As the TV on demand piece brings a big financial segment, let us hope that Comcast, Time Warner Cable, and other cable operators come on board. Ultimately the consumer will choose which platform to view a movie from. While the app makes it a more level playing field for distribution, it also pushes each distributor to find new ways to differentiate itself from the competition. Without cable in the mix, 'Digital Everywhere' could still succeed and cable operators could find that they are only hurting themselves.

Fox, Discovery Nets Back On Time Warner Cable's iPad App

Fox, Discovery Nets Back On Time Warner Cable's iPad App: "Viacom is the only programmer still withholding its programming from Time War..."

They're Back!!!! The networks of Fox and Discovery have been returned to the Time Warner Cable App on the iPad. Was payment made; agreements to launch new channels for the streaming digital rights? No comments yet but an awfully quick turnaround.

Comcast Feels The Need For Speed

In Top Gun, one of the classic films of the 1980s, a memorable line continues to be recited today, "I feel the need — the need for speed!". So true in fact as Comcast has raised the speed limit on broadband download. "Comcast's Extreme 105 service, one of the fastest residential broadband offerings in the U.S. with download speeds of up to 105 Megabits per second, is now available to 40 million households or approximately 80% of the operator's footprint." And $105/month is the price when bundled with other services. For over the top consumers, that speed means that movies can download in minutes rather than hours. But the cost savings of cord cutting or cord shaving gets lost when you purchase this "extreme" level of service.

And perhaps that is the point. For cable companies like Comcast, Cablevision, and others that are now concerned about lost revenue from over the top streaming services like Hulu and Netflix, more bandwidth can provide the revenue lost from the cable subscription platform. And likely done with a greater profit margin to boot. As long as consumers need wired broadband to receive content, cable and telco companies will maintain a leadership position.

Still, the concern remains that cable could lose too much revenue from cord cutting and especially cord shaving practices. Customers may not flock to higher speeds and remain comfortable with their current bandwidth speeds. And cable companies should still be concerned that alternative wireless platforms could become sufficient enough to replace wired homes. For cable operators, it is a good first step, and definitely not their last.

Is Twitter In Trouble

We probably know someone that uses Twitter. You might have a Twitter account. I link my blog at @amhunn. And I enjoy reading some other tweets. But I find that some abuse it and tweet too often. So much so that anything of real value gets drowned out by the inane volume of meaningless announcements. And so as we get smarter with Twitter, the fad elements fade and its real value hopefully shines through. Hence the issues facing Twitter. "Just two years ago Twitter was the hottest thing on the web. But in the past year U.S. traffic at Twitter.com, the site users visit to read and broadcast 140-character messages, has leveled off. Nearly half the people who have Twitter accounts are no longer active on the network, according to an ExactTarget report from January 2011."

Can Twitter adapt to a changing landscape and can it find a sustaining revenue stream to support it? I for one would not use Twitter if it required a subscription fee. And if its ads became too prominent, it may also turn off more users. Serious challenges face the company to freshen up its space and turn on more revenue making opportunities.

"Yet even as management tackles its executive and product problems, a major challenge looms: Twitter needs to figure out what it wants to be when it grows up." According to the linked Fortune article, Twitter is actively working on its next move. In the meantime, other social networks are popping up to more quickly take its share of revenue.

To be fair, Twitter offers a real immediacy to news and events and as a conduit of information, has changed the media landscape. But can they generate enough real dollars to continue or will they need to merge with another more established player, like Google or Facebook, to remain viable? Until they prove their independence, a merger seems more than likely, it seems imminent.

Webby Nominations Announced

Another Webby On The Mantle. Hey a 5 word acceptance speech, typical for winners of the annual Webby Award. "The list included Justin Bieber, Angry Birds, Arcade Fire, Foursquare and the Old Spice guy. Presented by The International Academy of Digital Arts and Sciences, the awards will be handed out on May 3." It is time to vote!

Nominations are across numerous categories, not just viral videos. There are awards for websites, interactive advertising, and even mobile. The award recognizes excellence in digital media and legitimizes online video. A worry if viewers ignore their cable subscription and prefer more online content.

So check out some very inventive campaigns, great websites, and wonderful videos. And when it's time for the winners to be announced, enjoy their 5 word acceptance speeches. Its a Truly Remarkable Pleasure - - 5 words!

Cheaper Kindle With Ads...So What

Are you a little price conscious. Wanted a Kindle by Amazon, but waiting for a lower price point. If you don't mind ads with your e-books, your wish has been granted. "Amazon will sell its e-book reader at the lower price by showing ads as screen savers and at the bottom of the home screen, and by selling special offers, similar to Groupon and other daily deal sites." Sounds like a great deal until you hear that the cost savings is only $25.

Considering that your Kindle should last at least 3 years, a $25 savings doesn't seem worth the aggravation of putting up with advertising. "Amazon will show ads from brands like Buick, Procter & Gamble and Visa. The ads will also show up on the home screen, but they will not appear inside e-books." Considering that you get an ad every time you turn it on, the advertising revenue must surely pay for the cost of the Kindle. But $25 less seems hardly worth it. Couldn't Amazon have knocked the price point to well under $100, perhaps $50. I believe at that price point, consumers would flock to grab a Kindle and would further position Amazon the leader in the e-book space. And at that low a price point, consumers would more readily accept the ads.

But at this current discount, the price point is $114, and I don't believe that this particular marketing move will gain much traction. Will some consumers see a $25 savings for ads worth it, sure; but I am doubtful that it will be considered a hit. At the same time, it will be worth watching to see what else comes out from Amazon. They speculate a competing touch screen with the Android OS. Perhaps this ad move is short term till that formal announcement is made.

New And Improved Business Week Adding iPad App

It seems a change of ownership has helped Business Week to survive and blossom in a changing media landscape. On the print side, subscription remains stable and ad pages are up. The magazine reads better and provides a rich variety of content. And recognizing the power of the tablet, Business Week is launching it's iPad App as a free added value for print subscribers, "while non-subs will be charged $2.99 a month for access—a pretty good deal, considering a single newsstand issue goes for $4.99." Notice that the app is purchased by the month, 4 issues, as opposed to singular issues or even an annual subscription.

"Bloomberg’s two main goals are to preserve and expand the print readership, but also appeal to newer, younger readers who prefer to do their reading digitally." As a transition is occurring with consumers from wholly print to wholly digital consumption, this strategy of packaging both plans together builds value, comfort with both platforms, credibility in the digital space, and hopefully increased subscriber loyalty. That the application doesn't simply regurgitate the magazine but utilizes additional content to make it a complementary experience, should surely work to build a larger fan base. That Business Week is embracing the tablet app space shows they are positioning for the future and no longer stuck in the past.

QR Codes Appearing In More Places

Open up The New York Times, or any other newspaper, and look at the ads. If your seeing more and more QR codes, you are not mistake. Print advertising is becoming more and more interactive and the smartphone the conduit to this information. And as consumers we seem to be getting more comfortable keeping our smartphones at the ready, whether to snap a photo, record a video, or click a QR code. Fad or future may be the question, but for now it is the it thing.

So to hear that stores are also using QR codes on the shelves to make their products more interesting should come as no surprise. "According to survey results recently published by Arc Worldwide, 50% of consumers are using their mobile devices while shopping. In response to the increase in smartphone usage and QR code awareness, Macy's, Home Depot, Best Buy and other large retailers have integrated QR codes into retail displays." While I have yet to see these codes appear in any of these stores, I will be on the look out. While TV screens have popped out in these retailers, their loop of programming may quickly be ignored. A QR code linking to a website or video can talk more directly to the consumer about a particular product or service of interest.

If you haven't downloaded a QR code App, the timing is right to start. You just might find yourself reading your morning newspaper with a smartphone in one hand and a coffee in the other; or walking down the aisle with your shopping list and phone out at the ready. But please, don't QR and Drive. :)

Cable Operator and Programmer Fight Over Streaming Rights

The legal fight is on and I suspect that more will be on there way. For the first round, it is between Time Warner Cable and Viacom, and it puts into question what rights are implied in their legal agreement. Time Warner believes that the rights to exhibit in the home extend to streaming devices; Viacom, home for MTV, Nick, Comedy Central and others, believes those are additional rights with additional fees required. "Viacom says the rights are technology and device specific to be negotiated with each distributor and that it 'has always negotiated rights to distribute our content based on specific technologies and devices to ensure that the unique business issues, such as security, product quality and audience measurement, are properly addressed.'” And while Viacom networks were removed from the TWC App, the desire is to have as much robust content available as possible.

And these streaming rights truly represent a slippery slope for operator and programmer alike. While it is nice to extend live and on demand viewing on streaming devices INSIDE the home, the real effort is to enable these same streaming devices to authenticate and receive the full channel line OUTSIDE the home. Hence, the line in the sand by Viacom.

Add to that the fact that they are receiving payment by other over the top distribution platforms, like Hulu and Netflix, demonstrates to the programmers that another revenue distribution stream exists. Giving cable operators this stream for free would seem to hurt that business model. The cable operator's concern is that customers will forsake their cable subscription for over the top. They argue that programmers may gain streaming media revenue but lose out on their cable subscription license fee. But programmers are not seeing it as a zero sum game and believe that it will indeed bring strong revenue growth.

So the fight for streaming rights will be headed to court. Most likely a settlement will be struck and this argument will continue to be negotiated between operator and programmer. Ultimately programmers want to be paid for each platform and cable operators may have to pay and also reduce their profit margin to retain their customer base.

You Tube Offers Another Reason to Shaving or Cutting The Cord

You Tube's latest announcement, a better organization of its content into channels and a push toward more original programming, adds another reason for the consumer to downgrade (shave) or cut their cable subscription. And You Tube believes it can legitimately compete against cable and satellite for viewers. "The site is planning a series of changes to its home page to highlight sets of 'channels' around topics such as arts and sports. About 20 or so of those channels will feature several hours of professionally produced original programming a week, some of these people said. Additional channels would be assembled from content already on the site." Last month, You Tube acquired NextNewNetworks as one step to acquiring original content. Along with Hulu, Netflix, Apple, Amazon, and others, the web is becoming a serious alternative to cable viewership.

In this CNET article, cord cutting remains hard for most households to accomplish. "Between 2008 and 2009 alone, the firm said that 550,000 households cut the cord. Last year, it estimates 1 million households did the same." And those that do sometimes find themselves missing some of the programming unavailable yet on streaming platforms and come back to cable. Still the cable operators are today more affected then telco or satellite as their basic subs are leaving to go to the lower priced alternatives suc as FIOS, U-Verse, Dish, and Direct. Dish may already feel concerned with eventual cord cutting and has just bought out Blockbuster as a potential move to enter the streaming space.

The programmers seem pleased with this new stream and I suspect they don't see these new deals as revenue neutral. Liongate's recent agreement to sell Mad Men syndication to Netflix assumes that this new distribution platform won't hurt its cable and on demand deals. It is why Networks aren't excited about giving away streaming rights to cable for mobile devices when others are willing to pay for those streaming rights. And since cord cutting has not hurt the industry yet, programmers are enjoying the revenue from another revenue stream.

As for You Tube, their mission is now to keep their viewers engaged for longer periods of time. While they enjoy attracting a huge number of uniques, short form video encourages viewers to leave and not necessarily watch more. It is the same strategy some cable networks had when they first introduced their channels. Count TV Guide, E!, Comedy, MTV and others who moved their programming to 30 minutes and longer to keep eyeballs longer, grow ratings, and capture higher ad revenue. Where short form programming was once ideal on the web, viewers have not gotten more accustomed to viewing TV shows and movies on computers, tablets, and smartphones. And that is what is presenting serious competition to the cable platform.

Dish Satellite Acquires Blockbuster

Blockbuster Video, once the darling of the rental DVD business has gone bankrupt and now sold to Dish Network. The question is why. Where is the synergy between a satellite company and a brick and mortar retail chain. And does Dish have the magic to reinvent Blockbuster to compete again.

Blockbuster's management missed the boat when accessing its competition; Netflix brought an online and mail alternative while Redbox delivered a vendor strategy to bring the DVD closer to where the consumer shopped. Redbox also hurt Blockbuster with a cheaper rental alternative. Dish needs to reinvent the Blockbuster brand to get back into the game. But does a satellite company understand the retail game.

I recall a decade ago when Cablevision bought Nobody Beats The Wiz out of bankruptcy. With so much debt owed Cablevision for its media buys, owning The Wiz must have been better than writing it off. Yet their success as a satellite company could not fix the problems of The Wiz and today the brand is long gone. I fear the same will be true for Blockbuster.

A complete overhaul of Blockbuster and perhaps a name change too to reinvigorate the brand. Expand from DVDs to add game products. Compete in the used market with Game Stop and seek other entertainment software to the mix. Push further into the subscription model to compete with Netflix and others and use a low cost strategy to gain a customer base. Will it be enough? Let's just say the odds aren't in Blockbusters favor.

Univision Ratings Catching Up To NBC

As the latest Census revealed, the rapid growth in the Hispanic population is quickly being felt. In media, the launch of more Hispanic cable networks including Nat Geo Mundo and others are to take advantage in this large population as Hispanic TV isn't niche programming anymore. "Univision last week attracted more prime-time viewers than NBC, the second time in four weeks that the Spanish-language network edged out one of the Big Four." And while Univision is not consistently beating out NBC and NBC has had some programming issues of late (Jay Leno Show), it shouldn't take away the direction that viewership and ratings are going. From the big three to four when Fox joined and now the five with Univision taking a seat at the table.

It certainly isn't lost on NBC the need to embrace the Hispanic population. In fact, "separately on Tuesday, NBC corporate parent NBCUniversal said it was launching a sales initiative called 'Hispanics at NBCU.'" No doubt other networks, wether publicly or not, will embrace similar initiatives. But it shouldn't extend as a hiring initiative. More importantly, it means more multicultural faces on TV shows too.

Hulu Plus Could Cause More Cord Shaving

As we discuss the cable operator's concern with downgrades and other cord shaving tactics, let's not forget the success that Hulu is having. Hard to believe, but its subscription service is attracting consumers and is poised to exceed one million subscribers this year. And with a two tier revenue stream of subscriber fees and advertising, Hulu is turning those digital pennies into digital dollars quicker than anyone might have predicted. "Mr. Kilar (Hulu's CEO) also reiterated that the company is on track to approach $500 million in revenue in 2011, up from $263 million in 2010. Its first-quarter revenue grew 90% from 2010."

The warning signs are there for the cable operators to act and to act loudly. What starts out as a small leak in the dam could quickly become a serious problem as more consumers switch to online only for their video consumption. Cable operators must do more to establish themselves as the communication aggregator in the home. Bring on mobility; develop a video security business; build out a national WIFI consortium with the other cable operators; become the indispensable link to the home and its inhabitants. Otherwise, consumers will keep shaving and cutting their service.

Consumer Reports Supports Cord Shaving

In this May's issue of Consumer Reports, the cable operators are ranked for service with FIOS and AT&T U-Verse coming out on top. In addition, the magazine reports a growing trend toward cord cutting and cord shaving. "While only 1.4% of consumers have cut the cord in the last two years, 7% of current pay-television subscribers are considering canceling their service, according to a Consumer Reports survey."

In fact, Consumer Reports provides suggestions to help consumers lower their monthly cable bills, "including dropping premium channels such as HBO and Showtime; canceling TV service in favor of free, over-to-air broadcast supplemented by a service such as Netflix; and downgrading to a lower-speed broadband tier."

It is precisely this trend that is pushing the cable operators to build mobile apps to augment their delivery of programming and extend the reach of their platform. It is why programmers who fight these mobile apps may find their revenues from license fees begin to drop as consumers shave services to lower their bills. Unless programmers are getting the same license fee from these alternate distribution platforms, they may be in fact getting Netflix pennies for cable dollars.

For now, the premium networks have a far greater chance to be hurt by Netflix and Amazon then the basic networks. For cable subscriptions, consumers are switching providers in their neighborhoods to the lower cost service. So while cable basic subscription drops, telco and satellite subscription is still rising. But as the trend to downgrade accelerates, even those providers will eventually see drops in their base. Adding value to the cable subscription with access to the linear line-up, DVR, and on demand channels remotely can help slow down or perhaps even reverse cord cutting and cord shaving.

YES Says Cablevision's iPad App Is Unauthorized

Time Warner Cable wasn't the only cable operator to get backlash from their programming partners... YES Says Cablevision's iPad App Is Unauthorized: "YES Network, the regional sports network home of the New York Yankees and N..."

Cablevision Launches Its iPad App

While Time Warner Cable could only go out with a few dozen linear channels, Cablevision is launching its App with 300 live channels. And like TWC, Cablevision believes it has the rights to stream these channels inside the home. "The company insists the streaming option, which requires WiFi but not internet access, is covered by existing contracts that allow it to transmit to screens within the home. It also says it meets advertising standards." Technically, I would love to learn more how Cablevision's methods differentiate from TWC. I would also believe that the Cablevision legal team have also poured over their agreements to confirm their rights. And Cablevision doesn't tend to back off from a legal challenge.

From the article, the technical elements are both physical and customer requirements. "The tech requirements include Optimum digital cable, at least one digital cable box, an Optimum cable modem and WiFi. But subscribers don’t have to get broadband; Cablevision will supply an internet-blocked modem that works with the cable network and the WiFi network. The terms of service spell out several conditions for use, including the need to password protect the home network for security and a ban on using Apple (NSDQ: AAPL) Airplay to transfer audio or video viewed through the app to any other device inside the home." It seems Cablevision has taken additional steps to assure that more channels are accessible. But if I was a customer, I would want to play the app outside my home or at least in the backyard. Customers may agree to the terms but that doesn't mean they will heed them.

For Time Warner Cable, the next steps now include advertising. I saw the full page ad in The New York Times this morning. Will this PR effort help; I doubt it. With such animosity between Programmer and Operator, the only thing that matters are dollars.

TWC Adds 17 New Channels To iPad App Overnight

TWC Adds 17 New Channels To iPad App Overnight: "The channel count on Time Warner Cable's iPad app is now up to 37 national ..."

Networks Pulled Off Time Warner Cable App

It seems the TWC lawyers are rethinking their position on their current programmer agreements in enabling streaming of channels on their newest App. "Time Warner Cable pulled 12 networks from Discovery Communications, Fox Cable Networks and Viacom off its iPad streaming-video application on Thursday". And though they claim that the agreements offer TWC these streaming rights, better to work together than bicker.

At the end of the day, what TWC really wants is full live streaming rights of channels that they can offer on a tablet or smartphone to authenticated customers; not strictly inside the confines of the home, but everywhere and anywhere. Will consumers pay dollars for this added feature or will it be demanded as added value to their already high cable bills? Programmers expect higher license fees for new distribution platforms while operators are trying to embrace the new technology to retain and perhaps even grow the subscription base. Without these rights, the threat of cord shaving or worse, cord cutting, remains present.

It may also be in the Networks best interest to work out an extension of these rights. Unless license fee deals are better with streaming media providers, a lost cable sub's revenue will not be matched or exceeded with fees from Netflix or others. And with Hulu and Netflix gaining ground, cable operators and programmers should work together. But be careful, if Networks are getting higher license fees from new platforms, then they will not be compelled to give these streaming rights away to cable operators. And higher fees will only translate in higher cable bills.