Tuesday, August 9, 2011

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.