DOJ Finally Says No

Two letters that you would never expect to hear from the Justice Department - N O. They didn't say no to Sirius and XM Satellite, nor did they say no to Comcast and NBC on their merger, not even to Continental and United. But it seems that they have finally decided to say no now. "The Justice Department filed a lawsuit on Wednesday to block the proposed $39 billion merger between AT&T and T-Mobile USA on antitrust grounds, saying a deal between the nation’s second- and fourth-largest wireless phone carriers would substantially lessen competition, result in higher prices and give consumers fewer innovative products."

Now just because a lawsuit exists doesn't mean that a merger is dead. It may simply require AT&T to agree to a number of conditions to allow this merger to move forward. It is the nature of leading companies in various industries to continue to acquire smaller fish in order to keep growing. So has been the case in cable, satellite radio, accounting, banking, airlines, and yes in telecommunications. It is the desire to have the dominant market share through mergers and acquisition to help to vanquish competition.

You would think that this recent update would paint the DOJ as the friend of consumerism. Bust as they have done nothing to limit monopolies and oligopolies recently, why are they starting now with AT&T?

Barnes and Noble Getting Traction From Its Digital Makeover

I admit to being a reader. I love books and I love bookstores. But I am also a fan of digital and the desire to always be connected. As consumers transition from print to digital, change is inevitable. Still, it doesn't mean that print will entirely go away or that bookstores can't continue to thrive. You can't stop change and B&N seem to understand that it is better to row with the stream then bump up against it.

So their digital makeover continues to help B&N to face that change and work with it to achieve better results. "Barnes & Noble Inc. said Tuesday its fiscal first-quarter loss narrowed as sales of its Nook e-book reader and e-books helped offset lower physical book sales." Is there work to do? Of course. These are still digital pennies (or perhaps nickels), but they are the future. And while store sales are down, competition is lessened with the loss of Borders. Add more merchandise into the stores and more reasons to bring in your Nook for a free coffee, and you can encourage more purchases.

It may not be an easy transition, but B&N is working with change, not trying to fight it. And that is a good thing.

Content is King For Sirius XM

Sirius XM recognizes that exclusive content is what best differentiates. It has worked with Howard Stern, with NFL, and MLB, and now with college football. "With the most recent college sports content announcement Sirius XM touted that they are the leaders in college sports radio broadcasting. There is little doubt about this since the company will be broadcasting virtually every game that happens. Again, this is great news for consumers." And as some content requires a premium subscription, there is anticipation of more revenue coming in. Given the rabid nature of college football fans, I can only expect that many will succumb and pay.

Is There An Apple iPad Killer And Will It Be The Amazon Tablet?

Apple has been enjoying quite a bit of success from its tablet. No other competitor has come close to the iPad; in fact, HP, quickly built one and then discontinued it. The iPad is even considered more valuable than an HD TV set, even with 3D. Still, it may not mean that the iPad is unbeatable. Companies love to play "king of the hill" and work to claim the top spot.

And one such competitor is Amazon with a new tablet that is expected to take the Apple iPad head on. According to Fred Wilson, investor and principal at Union Square Ventures, "'What we all want is a hybrid of the two -- a Kindle that is a full-blown tablet computer with a browser, apps, and an OS," Wilson added. "It looks like Amazon is going to bring that to market this fall ... It looks like a killer product.'" It is ultimately the success of the Google Android operating system, along with the arrival of more applications to enhance engagement, that can enable Amazon to sell an expected 3 - 5 million tablets.

Obviously Apple's iPad has a strong head star, with over 30 million sold. Still, every time a next generation device comes out, consumers experience obsolescence and the need to upgrade to the latest. If the Amazon tablet exceeds expectation, they can draw from the Apple user base. And so what we can possible see from Apple and Amazon will be a cat and mouse game with each outdoing the other with more innovation, better features and more benefits. It should be fun to watch. And it's a battle I'd love to join.

Steve Jobs Is A Change Agent

A terrific article by David Carr in the NY Times this morning on the effect that Steve Jobs had on many industries including computing, publishing, and music. And while many articles have praise Jobs, it is sad to note that they sometimes read like an obituary. Despite resigning as CEO, my hope is that he is still fighting the good fight to return his health to normal and to remain a key part of Apple.

It is this quote in Carr's article that most got to me, "In truth, Mr. Jobs’s effect on the media landscape has been less pernicious than opportunistic. He did not set out to destroy existing business models, he just noticed their lack of relevance and came up with new ones that kept consumers happy and Apple fat." Before Apple, the web was already hurting a number of industries. Illegal downloads and declining subscriptions were results of the web. Apple found business models that encouraged purchases and expanded the ways to easily watch, listen, and read. He made us need devices we didn't even know we wanted. And made iPhones, iPads, and iPods essential items.

Jobs may have had his failures (Lisa is named on many lists) but it is exactly what our parents and teachers remind us, from failure comes success. Jobs was never afraid to fail and his continual trying to make it right will be recognized for many years to come. I only hope that Steve Jobs remains with us just as long.

One Less Tablet as HP Drops Out

Hewlett Packard barely got it's foot in the tablet business and it is already conceding to the iPad. "On Thursday, HP announced that it would stop making tablets and smartphones powered by webOS, the operating system it acquired when it bought Palm last year for $1.2 billion." Does that mean that they are out entirely or simply retooling to come back later with a different tablet strategy? For now it seems to be a 2 horse race with Apple and Google; perhaps 3 if Microsoft is to be included.

Also interesting to note is that PC sales are down while Mac sales are up. This may be due to a couple of reasons. With the bad economy, consumers are keeping their computers longer and not buying the next model as frequently. It may be due to the Mac low market share which makes growth easier to achieve; and that as consumer get comfortable with their iPads and iPhones, they naturally gravitate to an Apple computer to better connect their devices.

Can HP get back into the game? Will the Google Android outshine the Apple? Will Microsoft emerge as a late entry but eventual winner. And what about tablets from Amazon and Barnes and Noble? Are tablets the ultimate tool or is a lightweight laptop the best of both worlds? The landscape continues to change at a maddening rate.

Give Me Liberty Or Give Me...So Says B&N

It's not an acquisition, but I guess we can call it the next best thing. Liberty has decided that it made better sense to buy into a piece of Barnes and Noble than to buy them out. "Liberty Media said it has agreed to purchase $204 million of Barnes & Noble preferred stock, a deal which would eventually give it a 16.6 % stake and trumps a $1 billion bid the media giant had made for the troubled book retailer in May." While this cash can certainly help B&N, one hopes that Liberty also enters into more strategic partnerships to augment the value of the relationship between its own content and distribution and their stores and Nook devices.

As a lover of books and a B&N customer, my family and I frequently visit. Sometimes we buy, sometimes we browse. I like seeing that our store has expanded its inventory a bit with more gift ideas and other merchandise. And I'd like to see more. I hope with a commitment by Liberty, more brick and mortar as well as digital growth can occur. It's not an acquisition, but it is the next best thing.

Playstation 3 Users: "Are You Ready For Some Football!"

Hello football fans. With the strike over and pre-season here, it may just be time to think about how to best watch football games. Local fans will always have access to their home teams, but for out of market fans, watching your Eagles, Cowboys, Packers or another is much harder, unless you are a DirecTv subscriber. Until now.

"The satellite service said Wednesday that it will distribute its exclusive live game out-of-market package to both current DirecTV NFL Sunday Ticket customers, as well as non-DirecTV football fans through PlayStation 3 video game consoles, joining Major League Baseball and the National Hockey League in offering games through the Sony-produced players. ... DirecTv will also offer Sunday Ticket on alternative distribution platforms via Motorola's Xoom and Samsung Galaxy tablets; Motorola's Android phones; the iPad, iPhone and iPod Touch; BlackBerry devices with 3G or Wi-Fi; Palm Pre/Pixi; and other Droid-branded phones." What isn't specified yet is whether these games will be shown in HD or not. Still, it opens up viewership to a whole new level!

I wouldn't be surprised to hear from cable operators about this new offering. They would love to have the same opportunity to offer all NFL games as well, through their cable box as well as to authenticated mobile platforms. This announcement will certainly lead to more conversations with the NFL. As for us out of market football fans, get ready for some football!

Hulu Changes, But Will It Help Its Sale

Hulu's current owners are cutting back the amount of free content available on Hulu; they prefer a more robust pay model. Consumers, however, are tired of the high cost of cable, and have enjoyed watching their shows, albeit a few days later, for free. A quandary that can lower the appeal of Hulu and may not convert viewers into pay customers. At the same time, the push is on to add more advertising to the mix, thus bringing more revenue to the model. But if viewership declines because of limited free content, how can total ad revenue grow. And ultimately, do these changes help or hurt Hulu's ability to be acquired?

It seems that digital pennies are becoming digital dollars and the early desire to get content online at no cost to the viewer has become less desirable. There is money in online content and content creators don't want to risk it at the expense of its other paid model distributors, like the cable operator. Ultimately, content companies want to be paid for content and viewers will have a harder time getting their content without paying a fee to someone. "The bottom line: There's not yet a cost-effective way to cut the cord completely. Expect the cable companies and network to work hard this year to keep it that way. The genie may have been let out of the bottle briefly, but the men and women in suits are trying desperately to shove him back inside."

If that is the case and consumers keep buying Hulu's premium model, they may be a more valuable takeover target. If the premium platform doesn't grow and free viewing drops, then Hulu may have lost its appeal. Only time will tell.

One Less Buyer For Hulu

Per Peter Kafka, we can now take Google out of the running for buying Hulu. He gives a couple reasons for taking their name off the list, including obviously the takeover plans for Motorola. He cites regulator approval and Hulu owner approval. But was Google ever a serious buyer for Hulu?

You Tube is already Google's platform for video on the web. They have the platform, the ad model, and the content. Wouldn't a Hulu deal just complicate a successful formula. They are already negotiating content deals with the same networks and programs. Are the Hulu deals that much more valuable? I never considered Google a likely buyer for Hulu.

So that leaves Apple, Yahoo, and others. The same questions to Google can be posed to these prospective buyers too. Is the Hulu platform valuable? Are it's content deals better than the deals each company has already struck with its content partners? And can these assets contribute to the long term plan? For me, Apple can build a better mousetrap and negotiate its own content deals. In fact, I'd rather see Apple buy Yahoo and grow its online content business to offset its hardware side. And where does that leave Hulu? Unfortunately, dying on the vine.

Google Buying Hardware Company

No, it is not Home Depot, or Ace, Google has set its sights on Motorola Mobility. Its one thing to make the Android software and search engine, it's another to also make the products that the software goes inside. With the acquisition of Motorola, Google gains a firmer entry into cable boxes, the Xoom tablet, and smartphones. Now they are more like Apple then ever before. Should Apple buy a search engine like Bing or Yahoo to stay on par with Google?

A good move for Google or likely to cause them to lose focus in managing internal cultures and organizational changes? Can Google turn these Motorola devices into more must have devices. At the same time will other companies that support the Google Android software start to look at Google as more of a competitor than partner? And does Apple need to react or stay their own course, regardless of a Google-Motorola merger? Interesting times.

Another Cable Operator Bites The Dust

Like most industries, the big fish eat the little fish. So too in the case of cable operators. The number 2 cable giant, Time Warner Cable, has agreed to purchase the number 9 cable operator, Insight Communications. Insight was once twice the size. About six years ago, it sold off half its operations to Comcast and went private. Today they are about three quarter of a million subscribers, with systems in the Midwest.

It is this consolidation that continues to change the state of the communication industry. Satellite has two main competitors, DirecTV and Dish; Telco has three, AT&T, Verizon, and Sprint. Cable still has more, including Comcast, Time Warner Cable, Cablevision, Charter, Cox, Mediacom, and others. To compete effectively in the communication and distribution platform business, cable needs more consolidation for more effective coverage of the US and more efficiency of operations.

At the same time, as these consolidations occur and industries become oligopolies, these industries start to enter into a "too big to fail space". Today we have fewer banking companies, car companies, accounting companies, and now cable companies. In the banking and car businesses, the government swooped in to save them when they became less adept to change and let power corrupt them. Are we in to the same mistakes occurring in the cable industry? Consolidation builds power, but it loses competition, the stuff that keeps them on their toes. As long as telco, cable, and satellite don't start merging each other, competition will keep excessive power at bay.

How Much Is Hulu Worth?

Lots of news these days of consumers dropping their cable and satellite services for an internet only connection to the home. And that cord cutting is affecting license fee revenue to networks. Some of those same networks, NBC, Fox, and Disney, today also own a piece of Hulu, a web platform for streaming TV shows and movies. And now Hulu's investors are waiting their big pay day as they put their platform up for sale and "are expecting bids of at least $1.5 billion for the site and its licenses."

But perhaps because of cord cutting, these same content companies might want to retain a piece of the web platform for future revenue growth. "It’s possible, for instance, that some of Hulu’s owners could hang on to their stakes, which could push the purchase price down. Alternately, a buyer could ask the company’s network owners to increase the length of Hulu’s exclusive online license, and end up paying even more for those rights." For buyers, the length of the existing deals and future deals will determine the value of Hulu. Without enough meaningful content and some agreement to offer exclusivity of content for a period of time, it's valuation may not be as high as possible. Web users have an insatiable appetite for video consumption, and Hulu's content partners may need to go even deeper into their libraries to satisfy the consumer demand.

The list of buyers that may be interested include Apple, Google, Yahoo, and Amazon. For each, the question remains, can they negotiate better license fee deals for content rather than buy through Hulu? Is the Hulu platform better than what they are each currently using? Is the Hulu value justified over a period of time? And will Hulu's premium subscription continue to find future growth? As the financial wizards sharpen their pencils, the strategic thinkers need to envision how the Hulu platform can benefit their business plans.

Amazon Also Bypasses Apple App Store

Yesterday, it was Wal-mart's Vudu service that was bypassing the Apple App Store to enable rental and download distribution on the iPad. Apple's 30% fee for revenue gained through an app has led others to find end around approaches as well. Amazon's Kindle reader can now buy from the web and read books on an iPad. "This new web application is Amazon's way of deftly getting around Apple's restrictions on in-app purchases without giving Apple a piece of the action. Rather than pay Apple their cut, Amazon pulled the iOS Kindle app's in-app link to the Amazon Kindle store. You could still buy Kindle books, but you would have to surf to the Amazon Web site in a browser to actually buy them and send them to you device."

Did Apple shoot itself in the foot with its high fee? It seems when individuals and companies feel threatened, they often find ways to build a better mouse trap to get around the problem. For Amazon, Wal-mart, and others, an easy web approach can work, especially if purchasing can occur with few clicks. The Apple App Store is keen on that, but a website approach, done well, could be just as satisfying for the end consumer.

As the article notes, this innovation now takes the conversation away from apps and back to web browsers. "As adoption of HTML5 matures, I'm sure there will be far fewer drastic differences between browsers as all of their implementation reach a stable plateau. Still, there's always a way to do things "better"--how long will it be until browsers start breaking away with their own extensions, just like the HTML add-ons that plagued users during the first browser war?" A fascinating next step.

No App, No Problem!

As if spouting a line from the movie Blazing Saddles, Wal-mart's Vudu service says, "We don't need your stinking apps" to Apple. But they do want to be seen via the web on Apple iPad devices. "Last month, Wal-Mart -- the world's largest retailer -- integrated Vudu into Walmart.com, which now provides links to the streaming-video service alongside DVD search results. Movies are available from Vudu to rent for 99 cents to $5.99 or to buy starting at $4.99. No app, but accessed, rented or bought via the website and watched on an iPad or other approved CE device, "including the Sony PlayStation 3 and Internet-connected HDTVs and Blu-ray Disc players from Funai Electronics (Magnavox, Sylvania), LG Electronics, Mitsubishi Digital Electronics, Panasonic, Philips, Samsung, SANYO, Sharp, Sony, Toshiba and Vizio."

With deals from most every major movie distributor, this service truly competes with Apple's not yet announced rental service. The challenge and opportunity for Apple will be to present a better, more ergonomic viewing and library experience. An Apple app can potentially mean less clicks; it could also enable a better search engine to find most efficiently exactly what you are seeking. But Vudu's advantage is that it has been released first and has the opportunity for better awareness through the Wal-mart store.

At the same time, Wal-mart made another decision. "Separately, on Tuesday Wal-Mart announced that it is exiting the digital music business and will stop selling digital music online effective Aug. 29." Funny to leave a business that could benefit from working with Vudu. To consumers, a digital download is a digital download whether it is video or music. To drop the music side of the program makes little to no sense.

So the digital video distribution platform is getting more crowded - Vudu, Netflix, Hulu, Apple, and of course cables' VOD, all offering movies and shows on multiple devices. The DVD business may be in decline, but streaming media is only growing.

You Can Re-Negotiate Your Cable Bill

Yesterday's blog focused on Cablevision's quarterly loss, but the problems in cable are not limited to Cablevision. "Cable, satellite and phone companies that provide TV services lost a combined 380,000 video customers in the second quarter, up from the 162,000 subscribers they shed in the same period a year ago." Today's print edition of the NY Post has a chart outlining all the deals that cable is offering to lure new customers to join. Among them, free access to NFL Sunday Ticket, cashback offers, and multi-platform discounts. But what should you do if you don't want to switch cable providers.

Certainly the cost to switch in terms of time spent waiting for the installer to show up at your door may offset the financial gain. But nothing should stop current customers from re-negotiating their monthly bill. That's right, just pick up the phone and threaten to switch. It may take a couple passes from customer service rep to manager to win-back department, but the half hour on the phone could shave multiple dollars off your bill or give you free upgrade to premium content from HBO, Showtime or Starz. Deals may last six months, some a year, but they can give you the same level of serve for less money.

Cable companies don't want to lose any more customers and it is cheaper to discount in order to retain than to install a new customer. So if you have some time, make the call and push for your best deal.

Competition Cuts Cablevision

In such difficult economic times, its hard enough to watch the stock market plummet and tons of shareholder value evaporate. Harder still to watch a company become what everyone asked and watch the business model change as well. Such is the case for Cablevision. Asked to spin out networks, both the Rainbow arm, to be renamed AMC Networks, and the MSG arm, are separately owned companies, and Cablevision is a "pure-play" cable distribution operator. But it didn't help in the second quarter, "losing 23,000 basic video customers and missing analysts' consensus on practically every growth metric in the period."

Well Cablevision is also one of the smartest cable operations in the country and their marketing group has delivered innovative programs to the market place. The triple play idea was successfully pushed first by Cablevision; Optimum Rewards gave their best subscribers additional savings. Sure they have stumbled some, but their batting average remains high.

Well as Cablevision most likely knows, it comes down to either new users, new uses or higher prices. With competition from FIOS and the web causing cord cutting and cord shaving, price increases may only exacerbate the video subscriber drop problem. The pipe to the home still has value and perhaps Cablevision is already considering new uses to sell like security systems and better ways to capture business customers. And even perhaps new price packaging to win-back customers from competition.

As Cablevision has been a leader in the cable industry, the news out of Cablevision's quarterly report may only reflect what is also being felt across every other cable operator today. Cable customers taking broadband but dropping subscription services. It is a pattern that has been going from quarter to quarter to quarter.

Nook Smart Marketing To Students

My son is not yet a teen, but he is clamoring for an e-reader. He's away at camp, but he will be very jealous when he sees that his mom has a Nook. Well, he and other students may have another reason to purchase one, Barnes and Noble has put together a promotion that offers some nice freebies with the purchase of a Nook. "Users who register their new Nook by October 31 will receive coupon codes for twelve Barnes & Noble Classics e-books, twelve SparkNotes e-books (which, oddly, do not match the selection of Classics), three Nook Study Guides and four Nook Color apps. B&N values the content at $107.28." B&N is not being overly generous with their gifts, the titles available are self-published.

"This promotion is an interesting reminder that Barnes & Noble is also a book publisher, and although it is publishing public domain works, it can still find interesting things to do with them." Smart marketing to build value of the Nook brand. At the same time, I would love to see how B&N uses it's Nook to also bring consumers back into their stores. Sure the key to owning an e-reader is the ease of downloading without leaving your home. Still, the success of brick and mortar stores will depend on blending together on-line with in-store.

This latest marketing push by B&N should certainly cause it's competitors, like Amazon, to react. Amazon is not encumbered with a store presence and may have more flexibility in its marketing approach. And as it comes to the student consumer, the company that can get e-book versions of high school and college textbooks may be the real winner at the end of the day.

Magazine Newsstand Sales Down in 2011

Coming as no surprise, newsstand sales of magazines are down this year. According to the article, the first half saw an 11% decrease in single issue sales while subscription sales appears to be flat. But should this newsstand decrease be a surprise to anyone. It doesn't take much of a crystal ball to see that bookstores like Borders that sell magazines aren't doing well. With businesses cutting costs to manage profit margins, business travel has declined. So too has personal air travel given the high costs to fly. Few stories, with the exception of the royal wedding, are notable enough to push readers to buy a magazine, especially when these same stories are accessible on the web.

We are seeing changing readership patterns. The challenge and the opportunity lies in the content and its exclusivity behind walled gardens. That means that a story on Justin Bieber may seem important but it is most likely covered numerous times. We need to make the writers behind the story more notable so that it is equally important who is telling the story that makes it an important read. And changes in distribution platforms need to be embraced as well. The web opens up opportunities for single and subscription sales. It also enables a multi-media approach to storytelling with better pictures and videos to accompany the words. Add to that the promise of always up-to-date so that every story that is time sensitive has the most accurate facts and information to share.

We can't rely on newsstands to return to former days of glory. New marketing partnerships need to be enhanced. A couple examples: Bring your Nook to Barnes and Noble and get a special deal on an in store download of an issue. Or bring your iPad into an Apple store and get special digital content from a magazine. Or bring your Kindle to a Hudson Newsstand at the airport and download a code for a discount on your next Amazon purchase with any in-store digital purchase. Hopefully integrated marketing strategies can lengthen the life of the newsstand while embracing single issue sales.

In these turbulent times, with a slow economy, a downturn in travel, bankruptcy of our bookstore chains, and a transition from print to digital content, newsstand sales may not ever fully recover. Their impact may need to transition to a marketing approach to encourage a digital sale rather than to push a magazine sale into the shopping cart.

Is Hulu A Good Acquisition Target?

It seems that a lot of big companies are kicking the tires on a Hulu acquisition. We've read about Apple and Google having some interest. Now comes word that DirecTV is considering a purchase. "One more potential Hulu acquirer has thrown its hat in the ring, with DirecTV admitting it has joined Apple, Yahoo, Google, Verizon, AT&T and Amazon in taking a look at the online video site’s financials. But while it’s an interesting opportunity, according to DirecTV CEO Mike White, he said the satellite TV firm has yet to determine if Hulu’s long-term business model makes sense for an acquisition." This news just when DirecTV announced a bad quarter for subscriber acquisition. Is Hulu the right fit with DirecTV let alone with any of the companies mentioned?

Apple may be kicking the tires for sport only as there is speculation that they are building their own rental business from scratch, licensing content from all the major studios and networks. DirecTV has linear and perhaps some on demand deals in place with the same content companies as Hulu. As the cable operators are fighting for streaming deals as extensions of their programming rights, DirecTV may be best served doing the same thing. Hulu may prove to be an added cost, but not the best means to promote the DirecTV brand. For Yahoo, it may be the only move left to compete with Google and You Tube.

Hulu wants to be sold because it's current partners most likely can't get along. Its hard to be a competitor in the network arena while acting as a partner in the digital space. Their best move is to sell out, take their money, and run. It just might not be the best long term deal for the buyers. Time will only tell.

Add Print, Box Store, and Digital, Then Stir

I am always intrigued when new partnerships emerge, especially when they seem so out of box. To me the latest announcement that Esquire and JC Penney are working together strikes me as a terrific opportunity. "Clad, a new e-commerce partnership between JC Penney and Esquire magazine, will launch later this month." I like it for both parties for a number of reasons. The JC Penney brand comes with a ton of pre-conceived notions; perhaps, too, so does Esquire. Each brand is known for its particular space, but less impact in the digital, e-commerce world. The two together brings upscale print with merchandising and distribution. And an e-commerce site ideally captures new business without hurting the existing business strategies of each company.

Obviously I wonder if the recent hiring of the head of Apple's retail stores to JC Penney helped to initiate such a deal. Whether it had an effect or not, it brings JC Penney further into the present and matches the editorial style of the Esquire brand. Like what you see, why not easily buy it.

Time Warner, Inc. Proves That Content Is King

Time Warner made a strategic decision to separate its distribution platform company, Time Warner Cable, from its content producing company, Time Warner, Inc. Given the name similarity, few outside business probably know that they are no longer related. Yet this split has enabled Time Warner, Inc to concentrate on building revenue building content without feeling encumbered by a particular distribution platform. The result, double digit quarterly growth.

In all of its content producing businesses, TV shows and networks, print magazines, game software, Time Warner has successfully embraced new media and found additional revenue streams. From iPad magazine subscriptions to ad-supported networks, Time Warner is finding multiple revenue streams to fill the coffers. "Time Inc. announced on Wednesday that all of its magazines would be available on tablets by the end of the year. It asserted in a news release that it would be 'the first major U.S. magazine publisher to make all of its titles available on all leading tablet platforms, with products designed specifically for this medium.'” Embracing the digital world has also helped with cable networks. They cite HBO GO, their new app, as resulting in higher HBO usage and better satisfaction.

Of course it is all about the content and Time management recognize that investment in better content lends itself to better returns. But owning the content, including digital distribution, allows Time Warner the flexibility to best present such content how and where it best serves its audience. Earlier this year, they announced that authenticated cable customers can access the live CNN linear feed on mobile devices. That is an important step. As consumers are more and more demanding that content follow them and not the other way around, Time Warner, without the burden of the cable wire, has the freedom and flexibility to serve it up in multiple ways. Today HBO GO is mobile on demand, CNN is live and mobile. Their magazines are offering iPad subscriptions. It is this digital push and recognizing that "content is king" that will serve Time Warner well in future quarters and years to come.

Apple Prefers to Build Than Buy

Why buy from someone else when you have the resources and vision to build it from scratch. For those like me thinking that Apple might just buy Hulu or Netflix and merge it with it's own iTunes Store, comes word that the opposite may be true. "Apple might be ready to roll out its own video subscription service similar to Amazon and Netflix, Peter Misek at Jefferies reports in a note this morning. Specifically, he says, 'As part of Apple's roll-out of cloud video services (and eventually an iTV), we believe Apple has unannounced deals with all/most of the studios/TV networks that are similar to the subscription streaming deal between Amazon and CBS.'"

Frankly, not too hard to believe. Apple has always been a tough negotiator. Heck their 30/70 subscription deal with newspapers and magazines for the iPad indicates that ability. Rather than accept the current deals tucked inside an acquisition, why not negotiate independently and build the best possible subscription model. Hopefully, with such a deal, Apple will enable a video content platform as large, if not larger than Amazon, Hulu, and Netflix. If the content deals are thin, this may not be the most desired outcome.

When could such an announcement be made, most suspect not till later next month. Apple has never been shy about doing things on their own timeline. Coupled with the re-release of Apple TV and its iCloud platform, this could potentially be a very big news story.

Comcast Cable Subs Drop, Broadband Grows, Content Grows

As a total business entity, Comcast had a good financial quarter. Both revenues and earnings grew at a healthy pace, and the business seems poised for more opportunity. At the same time, Comcast is experiencing a change in its business model where broadband and content are at the heart of its future.

For the last quarter, Comcast, like the second largest cable operator, Time Warner Cable, saw its video subscriber base fall. This has been a consistent theme, quarter after quarter after quarter. While Comcast's 238,000 sub loss as a percentage of total subscription is small, the fact is that it remains a consistent story. On the other hand the wire to the home, enabling broadband and telephone access, continues to reap growth, with its combined total, 337,000 customers, more than making up for the video subscription decline. And less surprising, that their recently acquired programming entity, NBCU, combines with Comcast's other cable networks, is seeing a healthy growth in license fee and advertising revenue. Content certainly remains king.

Can Comcast stem the losses in video subscription? With the rise in IP programming from other platforms, and an almost crippling cost to subscribe to digital cable, it seems highly unlikely. Consumers will continue to shift their viewing habits to other means to find ways to pay for only the programming they want to watch and to hope that the aggregated cost of buying Netflix, Hulu Premium, or other content, remains less than cables' monthly subscription fee. It is highly unlikely that cable companies can lower their rates as programming license fees rise annually. Cable's solution may need to be dropping lower performing cable nets or developing cheaper packages, to lower subscription prices. Unlikely, but perhaps necessary.

For now, the wired pipe to the home is still providing strong revenue, especially with internet and phone growth. While the cable business may continue to erode, content distribution through NBCU and an ad sales rebound will only keep growing the whole Comcast business.

Sirius See Subscriber Growth As It Raises Its Rates

Forecasters expect an increase of 1.6 million customers, 200,000 over its initial forecast. All this as the recession and auto industry have been suffering for some time. At the same time, Sirius believes it is time to raise its monthly fees. They plan to raise fees to $14.95, a $2.00 increase. That translates into a healthy 15.44% bump. Does such price elasticity exist for current subscribers or will this plan change affect the current and future subscriber base? While I have yet to read about much outcry, once the change occurs next year, I'm sure voices will be heard.

Apple Needs Content

Apple has taken another leap into the TV set with a new and improved "converter box" experience. No longer will the Apple TV need to access content from a mac, now it can go directly to the clouds. "Apple TV had previously allowed users to rent television shows from iTunes, but the new update essentially allows them to use iTunes like a storage locker for purchased shows that can be watched at any time. Rentals are still allowed, but part of Apple’s pitch for iCloud has been the ability to access your files essentially anywhere at any time if you’re using an Apple mobile device." Easier to access, easier to watch, it's a whole new experience.

But like the boy in "Oliver", we want more. For Apple it means more content. Netflix users have argued that their is limited content available to stream. Apple users will demand even more content for viewing. As Apple moves down this path of cloud access for content, consumers will expect that they will have ultimate choice: Do they want to rent or own the content, do they want a hard copy or just streamed, can they rent for one day or get a discount for multiple days. And that there will be choice.

If Apple is truly in the hunt for acquiring a content distributor, a Hulu or Netflix to fill the queue. Or Apple needs to make more aggressive deals with networks to access their content directly. The consumer is yelling for more and Apple is clearly moving in that direction to deliver.

Goodbye Versus, Hello ?

I love branding. A name can say so much...or so little. Some brands show logos, like Nike and Apple, need we say more. And initials always seems to come from names that are too long. That seems especially true in the cable network department.

Today it was announced that the Versus network will be changing its name the beginning of the year to NBC Sports Network. A mouthful. So many networks that started that eventually become just initials. Here's a partial list:

American Movie Classics to AMC
The Learning Channel ... TLC
Home Box Office ... HBO
Movietime ... E Entertainment ... E!
Romance Classics ... Women's Entertainment ... WE
Arts & Entertainment ... A&E
Black Entertainment Television ... BET
SciFi ... SYFY
and of course Outdoor Life Network ... OLN ...Versus to ?

Some have always been initials like fx, CNBC, AND MSNBC. Some have names that people barely remember. ESPN - Entertainment Sports and Programming Network, and CNN - Cable News Network. Or even defunct regional networks like PRISM - Philadelphia Regional In-Home Sports and Movies.

So I can only imagine that the newly named NBC Sports Network will soon be known simply as NBCS or SNBC or NBCSN. We love our initials and NBC Sports Network is simply too long to say.