DirecTv Follows Dish With Price Increase

Just one week after Dish announced their plans to raise their subscription fees to consumers, DirecTv has followed suit raising their rates as well.  "On Thursday, the satellite service announced that beginning Feb. 7, it will boost monthly subscription fees by about 4.5%. The hike is a response to an 8% rise in carriage fees demanded by cable channels included in DirecTV’s service, Reuters noted."  So costs for programming are rising 8% but as consumers we should be happy because DirecTv is only raising their rates 4.5%.  Regardless, both are rising too fast.

But here is the problem, inflation is not rising that fast and consumers are not seeing their salaries rise that high either.  And worse, the "fiscal cliff" may be here soon and consumers will also face higher taxes resulting in less disposable income.  So what is a DirecTv customer, or a Dish customer, or any cable customer going have to do as they watch their costs for service continue to rise?

The choices are pretty obvious and the rate of increases (4.5% by DirecTv as an example) continue to push more families to look at alternatives.  There is cord shaving, cutting back on premium channels, taking lower levels of service, to lower their monthly costs.  Some might give everyone in the family their own cellphone and drop their hard line phone bill as well.  More drastically, families will be more inclined to completely cut the cord and drop their cable service all together.  With Netflix, Amazon, Hulu, and others offering compelling content, consumers will pay less while being more selective in their viewing choices. 

The facts are clear.  Rates for cable are rising faster than inflation and income declines and higher taxes may only exacerbate the cord cutting phenomenon.  Fiscal cliff... we are inching closer to the cable cliff.

Can Blackberry Rebound?

With Apple taking a majority of the US Smartphone market and corporate IT departments and employees embracing the iPhone, the Blackberry continues to lose customers and market share and "says it lost subscribers for the first time in the latest quarter, as the global number of BlackBerry users dipped to 79 million." And while actual numbers  were better than analyst estimates, Blackberry is clearly moving in the wrong direction.

Blackberry is scheduled to release its latest smartphone, but can they win back customers?  Certainly design is critical and everyone is emulating the touch screen approach, but also important are the applications that run and how how is the functionality of the phone is to use.  For personal use, I have an iPhone; my company cell phone is a Blackberry Bold.  Functionally, the Blackberry is a brick to me.  Confusing buttons, functionality that is not easy to understand, and a temperamental touch screen. I can see why people are switching to Apple and Android devices.

Will the new Blackberry attract users back to the fold or is it too little too late?  The Blackberry image from its older models may be hard for consumers to except a new look and a new approach.  Current Blackberry customers may be set in their ways with their current phones, ones that they have mastered over time, and not appreciate that the newest phones may be more clone-like than consistent with the brand they have grown up with. What is clear is that Blackberry was once the leader and has been thrown off the top of the hill.  They must now fight with the new leader to retake the top and that requires continual innovation and imaginative marketing.

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Hulu - Free or Pay, Successful or a Loser?

Hulu seems to have a problem; it doesn't know what it wants to be.  With multiple owners with different ideas of Hulu's strategy, they are going nowhere fast.  Perhaps the biggest question posed by it's owners, should Hulu be a free website or subscription. According to the Wall Street Journal, Disney wants Hulu to be a free service, getting revenue through advertising; Fox/News Corp wants a pure subscription model.  

Operating as a mixture of both has perhaps limited their ability to eke out a profit. The result has been that Hulu remains dwarfed by competitors like Netflix, Amazon, and You Tube.  Less video views, less unique viewers, and less paid subscribers.  And Hulu is not only losing money, it is asking its owners to pony up additional dollars to invest in more content.  But is there enough incentive by its owners to want to work together to build out a business that eventually cannibalizes on the revenue they get from cutting their own deals with cable operators and others?  Why share your content's revenue when you can keep it all for yourself.

It may be a no win situation.  "The fact is,  (CEO Jason) Kilar has, in a couple years, built a Web brand that you have heard of. "  But with multiple owners with different, competing interests, it seems necessary for Hulu to find a single owner and a committed strategy to compete effectively.  

Dish Network Announces A Price Increase

This post is not meant to single out Dish Network.  The truth is every cable operator will be raising their monthly subscriber fees.  The issue is that these price hikes tend to be larger than the inflation rate.  And for consumers facing less income due to job cuts, smaller bonuses, and what is expected to be higher taxes, the cost of cable is looking more and more like a luxury than a staple in the household.

For Dish, their claim is that they haven't raised rates in 2 years;regardless, "Dish Network will increase the price of its core TV bundles between 7% and 20% effective January 2013, with most packages rising $5 per month."  Yes, 20% increase.  The very size of the increase sounds incredulous.  But Dish Network, as I am sure other cable operators believe, will expect that the number of subscribers dropping their service will be smaller than the amount raked in by these higher prices.  And that is because the monthly increase isn't the only price increase that Dish customers will see.  Premium packages, including Spanish Tiers, will see price increases.  So too, the cost of some older cable box monthly rentals in the home.

What effect will these price increases have on their customers?  Will a higher number than expected cut the service?  Dish argues that the need for raising prices is because of higher programming costs.  Time Warner Cable, seeing the same issue, is dropping services.  Dish tried with AMC Networks till their lawsuit with Voom resulted in signing a new carriage agreement. But Dish might just look for other networks to drop to lower those programming expenses.

So this is what consumers will be facing with cable cost increases, and lesser channels on the line-up. And as more and more TV sets become internet enabled, subscribers may just look more closely at cutting their cable cord for broadband enabled viewing.  Household budgets can handle only so much and these announced increases could cause Dish and others even more subscriber losses. 

Digital Pennies Growing Nicely With Online Ads

Compared to television, online ad spending is still small, but one thing is clear, online ad spending is growing rapidly.  "According to the to Interactive Advertising Bureau, total online ad revenue reached $9.26 billion in the third quarter of 2012, which is up six percent from the previous quarter and 18 percent from Q3 figure of $7.8 billion a year ago."  And with the rise of tablets and smartphones, online advertising should continue at this healthy pace for quite some time.

Of course, online businesses are still trying to figure out better mousetraps to monetized their content.  Smaller screens, targeted advertising, paid search, and other means to attract an audience and advertising dollars.  The virtually infinite number of online sites and choices has created a very long tail from which to choose.  Online, unlike other media platforms has become so vast and fragmented that the top of the pile grows through acquisition and integrated marketing efforts while smaller sites hope to find traction to grow its audience and reach.  And unless these sites can find a business model to sustain themselves financially, they must eventually fade from site.

The online marketplace is a very young place, unlike the cable and print platforms.  But the  similarities are clear.  Eventually, the big fish will either absorb the little ones or the little ones will thrash around until they can grow themselves into bigger fish or simply fade away.

Time Warner Cable - Penny Wise, Pound Foolish

At first blush, Time Warner Cable (TWC) appears to be acting as a protector of the consumer, dropping cable networks to keep the costs of service down and thus the cost of monthly cable service for consumers. By dropping networks they believe lack enough interest, the back end of the long tail of programming content, only the most popular is viewed and so should be paid for.  And so, in TWC's mind those unfortunate networks include Ovation, and others,"including Current TV, Hallmark Movie Channel, IFC and WE tv—whose carriage agreements are 'due to expire soon' and which could be dropped 'in the near future.'"

But for the most part, these "low rated" channels are also the lowest cost channels.  Their fee structure is less than a number of the bigger channels including USA, ESPN, and Fox News.  Of course, each of these channels are part of a media empire also owned by broadcasters, NBC, ABC, and FOX, respectively.  Their fees, and their sister networks, are not only higher, but most likely their annual license fee increases are growing faster than our current annual inflation rate.  So any drop of penny services by Time Warner won't protect consumers from the price increases of other services.  Time Warner Cable consumer bills, like other cable operators, will still continue to climb.

At the same time, TWC has invested in a regional sports network, demanding huge license fees by cable operators for carriage of their new network.  It is more than a question about sports verse the arts, it is a question about how to best manage a cable operator business that is getting more and more expensive to operate.  Dropping smaller, less viewed channels like Ovation may appear to be a solution, but it is like plugging a whole in the dam with your finger; it will not fix the bigger problem.

For Sale: Cable Set Top Box Business

When Google purchased Motorola Mobility, assets included the line of phone products, a number of patents, and a cable set top box product line used by a number of cable operators.  And perhaps the thought was that Google saw an opportunity to align itself with cable operators through the box.  Instead came word that Google was testing fiber in Kansas City and perhaps that Google's new set top box could have a place in this new world.  But that didn't come to pass either.

Now we learn that Google has little interest in the converter box business and has plans to sell the unit.  "According to the report, Google received multiple offers on Dec. 7 for the Motorola Home unit, which it acquired as part of its $12.5 billion takeover of Motorola Mobility in May."  Also reported, that Arris Group and Pace PLC have submitted bids.  I am surprised that a certain company was not mentioned in the  bidding process. That company, TiVo.

Part of the value of the cable set top box is the DVR functionality inside it.  With access to so many cable operators using the Motorola box as their interface to the  home, a new owner of the business could have an immediate reach into many more homes.  How quickly boxes could be moved into the field or older boxes could be upgraded may be part of the decision why TiVo did not choose to participate in bidding for this business.  I just wonder if they even seriously considered making an offer?

Cable Prediction - All Sports Off Broadcast in 10 Years

Broadcasters are jealous of ESPN and ABC.  As the first national sports network, they pushed their way up the food chain, from ping pong and bowling to professional games including baseball and football.  And along the way, they were able to grow the number of sports channels adding ESPN 2 and Classic Sports along the way.  But most importantly, they were able to get from cable operators the largest license fees for transmitting these games to their subscribers.  And where did most of this content air before cable?  The best stuff came from broadcast TV.

As ESPN picked up national rights, other sports networks formed to distribute regional rights.  From that list came Sportschannel, NESN, YES, Pac-10 and other area networks, all getting license fees to present their games on cable TV.  More and more games were taken from broadcasters and "free TV" saw less and less "over the air" sports.  Today, media companies are trying to recreate the ESPN model; NBC has taken Versus and turned it into the NBC Sports Network.  CBS Sports Network came from the earlier CSTV (College Sports TV), and now Fox is planning their Fox Sports 1 channel.

So what will feed these national sports networks as well as the current regional ones.  First, their will be bidding wars for current assets on cable like MLB, NFL, and NHL (when they stop striking).  But games that are still shown free on broadcast networks, regional baseball games, Saturday college games, and yes, I believe Sunday afternoon football games will leave broadcast for cable. The demand for content and the dollars promised to air will eventually move all these games to cable.  No more games on NBC, CBS, Fox, or ABC; all will migrate to cable.  How long?  My prediction is within 10 years.

And as the license fees for these cable sports networks rise, the cost of cable subscriptions will as well.  The consumer will either have to pay much more for sports on TV or do without.  And as audiences decline, so will interest in the game.  Some viewers may migrate backwards to their radio feed for games, while others will simply learn to do without.  Younger audiences have already found it hard to enjoy the games; the costs for families to attend professional games make it a special event rather than a frequent outing.  And some younger fans have migrated to their gaming devices and are less interested in watching a game on TV.  Costs are out of hand and the rise of another sports network simply quickens the pace of change.

What Does Liberty Media Want To Be?

What is the ultimate strategy for Liberty Media?  It acquires companies, it spins them off.  As a share owner, they spin off assets like dividends, on a regular basis.  Companies come into their business while others become separate stock holdings.  Among the pickups are Discovery, QVC, and Sirius.  But Liberty and its chairman don't mind letting go either.  The latest to be spun off into a separate stock is Starz.  "Liberty has reached out to media companies ahead of the expected mid-January spinoff of its pay-TV division, which includes the Starz and Encore channels, sources said."  So step one, spin off; step two, sale.

Liberty Media keeps busy in both content and distribution across the globe.  From positions in Sirius, Barnes & Noble, and more, Liberty at times looks more like a media holding company, without a particular focus in any one area of the business. For stockholders, value continues to grow from all this bit of horsetrading.  But is there enough focus in each of the core businesses?  Will Starz be better off with an owner more committed to its growth?  And with the acquisition of assets like Sirius and the loss of leadership, like Karmazin, can Liberty add incremental value?  Or is the future to once again acquire and then spin off?

Sports Deemed Culprit Of Cable Subscription Increases

Remember the days when sports telecasts were only on broadcast networks and the costs were paid entirely by advertising?  If so, you live in a different generation.  Today, most sports telecasts, except for the major telecasts, are on cable.  And with the launch of more and more "sports" networks, we have more regional sports networks like MSG, NESN, and others, more professional league networks, from MLB, NFL, and others, and of course basic sports networks like ESPN, Versus (now NBC Sports) and others.  For sports junkies, every professional, college, and yes even high school games can be found on cable television.

But each of these channels have license fees that the cable operator and ultimately the subscriber ends up paying.  "Sports costs are driving up bills, with cable and satellite-TV providers paying increasingly higher rates to carry national sports channels such as ESPN, as well as regional channels like the YES Network." And according to the NY Post, rates over two years are expected to increase over 16%.  That is far greater than the cost of inflation and worse, hitting households facing smaller after tax budgets.

Some cable operators are trying to move sports to separately priced tiers so only consumers interested in buying them would spend the extra cash.  But most of these networks prefer to be on the first level of service reaching the largest possible audience.  But their costs are driving away customers to basic cable.  The result, cord shaving (taking less services) or worse, cord cutting and dropping their cable subscription entirely.

But the fault is not only with sports networks.  Cable operators face annual increases in fees for non-sports networks as well.  And with broadcast networks like ABC, CBS, NBC, Fox, and even Univision getting cable operators to pay them a retransmission fee for carriage, free TV is a misnomer. With operators not likely to reduce their profit margin on their cable subscription business, monthly subscriber fees will only continue to rise and rise.  And consumers will respond by cutting the cord and using broadband to access content that they specifically wish to buy and watch.

So the article blames sports networks, but they are not the only cause.  Each network seeks higher and higher license fees and as consumers, we all pay the price.
 

Dish Network Goes Cellular

Dish Network has plans for wireless and the FCC has approved them.  What those plans are remain to be seen although it certainly makes Dish a bigger competitor in the cable and mobile space.  Whether they use the spectrum for broadband to their customers or to build a new cellular phone competitor remains to be seen.  "The rule would allow Dish to use the airwaves for a ground-based cellular network. It may partner with another cellular company to build a network from the spectrum." With Sprint looking to buy out Clearwire, this could add a wrinkle to the conversation.

Gaining full support from the FCC must be a great holiday present for Dish as it opens up brand new business opportunities.  It might also be a present to broadband and cellular consumers wishing that there was more competition in the wireless space.  With the door finally open for Dish to proceed in mobile, we must wait to see how fast their business plan can be executed.

Broadband Access To Cost More

As consumers see more value from their broadband access then their cable subscription, cable operators are grabbing revenue growth by pushing up broadband rates.  Both Cablevision and Time Warner Cable have announced plans to raise monthly fees, $5 and $3.95 respectively.  "Broadband is now the biggest cash driver for cable companies, in an era when a fast Internet connection is the gateway to online video applications that can be viewed on TVs and computers."

While consumers are more likely to shed cable networks, the price elasticity for a broadband connection is much more flexible.  These two cable behemoths are less likely to feel any drop in broadband subscribers as a result of such a move.  Yet analysts don't believe that other cable operators will also raise broadband rates.  "Marci Ryvicker, media and cable analyst at Wells Fargo Securities, told MarketWatch Friday that Cablevision and Time Warner are unlikely to start a trend."  I disagree.

When cable operators see that their was no backlash from the price increase, they will indeed follow.  Frankly, it's easy money.  Less likely, and subject to a far greater outcry would be if cable operators moved completely over to a usage model from the current "all you can eat" model.  As more an more consumers take their print, audio, and video content off the web, the desire to track household usage would create such an outcry.

Clearly broadband usage will continue to grow and grow. The rise in smartphone and tablet purchases this year all rely on the same access to broadband via WIFI.  And consumers are building more and more wireless into their homes while the cable operators enable WIFI in their communities.  The hunger for broadband access will only continue to grow at an exponentially faster rate and that is why cable operators can get some additional dollars today raising their monthly broadband subscriber fees.

Brand Integration Across Platforms To Grow Magazine

In a move to grab more brand awareness, gain audience, and build a multi-platform position, Esquire Magazine has joined forces with NBCUniversal to rebrand G4 Cable Network as its own.  "The move is the first time that the international men’s magazine will debut as a television brand and will see the channel rebranded as a more mature and sophisticated channel, albeit one still with a male skew."  The cache of a TV brand and magazine brand working together could mean a seamless integration of content across multiple fronts, TV, print, and web.  Tactically making it work is another factor.

With a shifting older format, "The new Esquire Channel is expected to focus on lifestyle programming as well as cooking formats, travel and fashion series and the rebrand is expected to take place during the first six months of the new year."  The new look is a shift from the current G4 and a 180 degree turn from where the cable network started as a computer geek channel called TechTV.  Perhaps its only consistency is that the network has always strived to reach a male skewed demo.

For Esquire, it seems an ideal opportunity to extend its branding further into the digital age.  With video content from the channel to augment print stories, the value of the content can be nicely enhanced.  Few other magazine brands seem to be doing this.  Bloomberg's media empire includes a cable network as well and its magazine, Bloomberg Business Week, has potential to build out a fuller media integration plan as well.   Food Network and HGTV went the other root, building magazine brands from scratch to extend its video platform into print.  For other magazine brands, the timing might be ripe to find a cable network to partner with to build out better use and value of the content.

iPhone Finds Another Carrier

T-Mobile customers have finally gotten their Christmas wish as Apple has authorized them to begin selling iPhones in their phone plan in 2013.   "The fourth-largest mobile carrier in America is partnering with Apple after going over half a decade without America's most popular smartphone, the company announced Thursday morning."  For those that have waited this long, it means good long; but for those that couldn't wait, they most certainly have switched from T-Mobile to other carriers.  It will be interesting to see what 2013 looks like for incremental phone sales thanks to this new carriage.  And while the article didn't confirm which Apple products, most are hoping that it includes both iPhone and iPad devices.

For Netflix, Content Is King

Nothing attracts consumers to a location like great content.  The right assortment, easy to find, at the right price, can promote strong interest and high usage.  Netflix believes that to be the leader of streaming services, one must have great content that the consumer believes is worth the price to subscribe.  And no one produces family friendly content like Disney.  So in a bold move, Netflix is paying a very large sum of money to gain an exclusive window for their content, ahead of the premium cable distributors like Starz.  In fact, Starz is most hurt by this deal as they had the previous contract.  While this agreement for new releases doesn't start for a few years, "Disney has also agreed to give Netflix nonexclusive streaming rights to more of its older titles — including "Dumbo," "Pocahontas" and "Alice in Wonderland" — starting immediately."

For families watching their budgets, Disney content could be the carrot that encourages them to switch from premium services through cable to streaming services through Netflix.  The cost of a monthly Netflix subscription is certainly less than the cost of premium channels.  Still, consumers may be hard pressed to disconnect.  HBO, Showtime, and Starz have known for quite some time that distributing movies was not the only way to attract consumers.  It has led to the rise of original programming on each of these networks like "Boardwalk Empire", "Homeland", and "Spartacus".

While this Disney - Netflix agreement provides for streaming exclusivity of titles, consumers can still access these same titles through download, pay per view, and of course DVD sales. Netflix though realizes the value of content, both acquired and original, and is following a similar programming strategy as their network rivals, including their own original series, House of Cards".  It has been written that  about 50% of Netflix's budget  goes to content.  Clearly, content is king in attracting new consumers to their subscription service.

Time Warner Cable Cure To Lower Costs, Drop Networks

With cable network programming fees rising, and subscribers leaving, some due to the high monthly fees, Time Warner Cable has a solution.  The public decree, to drop cable networks that are no longer performing.  "AMC Networks Inc. (AMCX)’s IFC and WE TV are among the networks at risk of being dropped by Time Warner Cable (TWC) Inc. now that Chief Executive Officer Glenn Britt is taking a harder line on renewing channels with low ratings." According to Britt, programming fees are rising almost twice faster than the fees that the cable operator is charging, and so the profit margin is declining.

Perhaps there are too many linear channels these days, but the fact is that most networks are not standalone; they are part of a family of networks owned by big media companies.  NBC/Comcast may own USA, but they also own Style.  Scripps may own HGTV, but they also own Fine Living, AMC Nets owns AMC, but they also own WE and IFC, and Viacom owns MTV, but they also own Spike.  And Britt knows that these companies love to use the leverage of their best networks to gain distribution of their others; it is in fact a common practice.

And while consumers complain whenever any channel is dropped, typically as they are out of contract and up for renewal, a much smaller number actually drop their cable service as a result.  Dish Network successfully kept all of the AMC Networks off the air until an agreement regarding Voom gave the family of channels distribution again.  Consumers have learned to do without channels, finding alternative ways to watch their shows.

Should Time Warner Cable follow through with their threat to drop networks, they should market the drop in subscriber fees that the consumer will benefit from.  That unfortunately is less likely to happen. The truth is, these lesser, lower rated networks are not what is causing fees to rise so high; rather, it is the higher rated entertainment and sports networks that command the highest rates.  The loss of a couple pennies per month here and there from the dropping of lower rated services will not improve the business model.  And Time Warner Cable is not about to drop higher rated channels like ESPN, USA, HGTV, TNT, Nickelodeon, and others.  They may command higher rates, but they also deliver higher viewer satisfaction.  And consumers may be quicker to depart.

Bing Asks "Have You Been Scroogled?"

The latest ad in today's Wall Street Journal and other publications asks the quest, "Have you been Scroogled?"  Microsoft's search engine, Bing, wants consumers to know that they believe search results have been tampered with to no longer provide us with a meaningful order of possible results.  "Microsoft’s claim is this: Because Google Shopping’s search results are determined by how much companies are willing to pay for them, they’re unavoidably inaccurate." Check out the Scroogled page here.

The question the author asks is whether a better alternative for search exists.  "The core Bing search product is still pretty bad. Bing has been my default browser for a few months now (for Science!) but I find myself almost always reverting to Google when Bing fails to give me useful results. That’s not the way a search engine should work."  As for me, Google has been by default search engine and has delivered on the task.  I did in fact also use Bing for a search on "fleece fabrics" for my daughters school project last night but didn't find additional meaningful results different from Google.

So Bing may have some truth in its ad against Google, but to get people to switch, build a better product.  Put these two search engines side by side and ask, is there anything really different or better to lead to a change in behavior.  If you want to knock the leader off the mountain, prove it

Can Discount Websites Survive?

Consumers love deals and that very nature would make one believe that a business offering discounts and deals would be well received.  We love knowing that something that should cost $20 only costs us $10.  It's a win for us as long as we are willing to pre-pay for it in order to use the coupon at a later date.  And yet, for businesses like Living Social and Groupon, the appeal doesn't translate yet into a winning business model.  "Online deals company LivingSocial is cutting 400 jobs worldwide, or about 9 percent of its work force, as the deals market continues to face challenges."  And Groupon faces similar challenges as discussions over replacing their CEO have been questioned as their results also suffer.

So is this a sustainable business or will Groupon, Living Social and others lose their investors and their profitability?  The problem is clearly not with the consumer; who wouldn't like to pay less for something.  The problem may lie in the retailers offering these discounts.  Not only must they reduce their profit margin to attract customers, they must offer additional monies to these sites to promote these discounted deals.  Their costs then only increase as their profitability falls.  In addition, these retailers must determine if these deals attract new customers to their business or simply give their current customers a deal.

As a consumer, I love a good deal; as a business model, it is hard to imagine retailers regularly using these discounters.  Thus the constant searching for more prospects to use the service must get more and more difficult.  At the same time, the business model could be replicated inside these retailers own websites.  Build out loyalty programs, offer discounts on your site, and not worry about a middleman like Groupon and Living Social.  Want to see an example of it, go to Lord & Taylor or Justice websites; must wife never goes to these stores without a coupon. 

TiVo Strategy Paying Off

Control your intellectual rights, grow your subscriber base, manage your costs.  TiVo seems to be on the right course having "posted a third-quarter profit after settling patent litigation with Verizon Communications Inc. (VZ), signing more subscribers and boosting pay-TV revenue."  Given their track record, future litigation with Cisco and Motorola should likely also lead to favorable outcomes.  Add the recent agreement with Cable One and TiVo "has service agreements with nine of the top 21 U.S. pay-TV companies and is expanding with Comcast Corp. and operators overseas".

Can more service deals be signed or will cloud-based DVR overtake everything TiVo has done?  Hopefully TiVo continues to innovate to remain the leader in this space.

Google Voice vs Apple Siri

While I haven't found voice commands so useful that I prefer it to typing out my searches; still the day will come when voice recognition will overtake physical typing.  And leading the pack are Apple Siri and Google Voice.  For each, the win will likely lead to more ad revenue and greater information about the user, enabling more targeted advertising.

The use of voice recognition will matter in many ways we use our devices; not just in asking for directions or information, but in having our words dictated on documents. Less typing, more talking.  Of course that is fine in a quiet area; I'd hate to be exposed to all that talking while on my train to and from work.  Perhaps the next leap will be not even having to say it, but simply think the task and have our devices sync to our brain waves.  Science fiction or future science fact.

TiVo Adds Another Cable Operator

TiVo wants to be the de facto DVR in the cable set top box.  One way to achieve such a position is to partner directly with each cable operator.  And with fewer and fewer cable operators to work with, the target list is well known.  Well move one more name from prospect to customer.  "TiVo has landed yet another cable operator customer, signing a deal with Cable One to provide DVR software and multiscreen-video applications to the 10th-largest MSO in the U.S."  With a footprint of 600,000 video customers, TiVo will see another nice bump to their subscriber base.

Through legal patent fights and cable deals, TiVo has been growing both revenue and subs.  With a legal fight against Time Warner Cable, one might see a possible solution being Time Warner finally taking Dish as their DVR partner as well.  With TiVo legal victories already against Verizon and Dish, Time Warner might consider a partnership less costly than a financial settlement.

The Next Great Energy Source To Run Our Technology...Ourselves

What if the days of recharging our devices on a daily basis was a thing of the past?  What if our battery devices were always being recharged so that batteries rarely needed to be replaced?  And what if this energy sources was free and abundant?  As we become constantly reliant on mobile devices to be powered up and ready to go, we are in constant need for a quantum leap in our battery technology.

Well, perhaps some progress is being made.  Well today's WSJ article has focused on a new energy source. "Scientists are studying how to tap the energy naturally created by people's bodies—such as heat, sound and movement—to power medical devices without the need to change batteries."  These experiments are focusing on technology that is running on the human body, devices such as "hearing aids, insulin pumps and pain-management devices".  But perhaps this energy source could power even more. "Some experts expect the first medical devices that tap the body's energy—known as bioenergy harvesting—could be available within a decade."

Do we produce enough energy, that devices in our hand could also act as a conduit to act as a power source?  Could even the proximity to a person enable transference of power, perhaps by wearing a device that is then bluetooth connected to a mobile device?  Our reliance on power was never more apparent than during the recent hurricane when power was out for days and one had to find charging stations to stay powered up.  As we become more and more reliant on technology, that quantum leap in battery power is much needed.

Happy Holidays, Apple

It could be a busy holiday season for Apple this year and the iPad Mini could be the must have gift.  According to Forbes, "Though the WiiU is a hotly anticipated new console with 39% of kids aged 6-12 wanting one, it’s bested by the iPad, which nearly a majority of kids want at 48%.  And the next three items on the list after the WiiU? An iPod touch, an iPad mini and an iPhone."  And if my household is any indication, Apple devices top the list.

Nintendo's WiiU has been expected for quite a while; my house has both a Wii and XBox, though the latter gets far greater play.  No one in my house is clamoring for the next generation of either product.  The tablet though, with all its gaming, is appealing to both my son and daughter.  Add all the other apps as well as its mobility, and it is in hot demand.  And despite the higher than expected price for a Mini iPad, demand for it keeps rising.   As to the research, while the iPad is at the top of the wish list, the Microsoft Surface, along with the Apple TV, rank at the very bottom of the list.  Does this portend another Zune type product for Microsoft?

Once the rush to the stores is over this holiday season, it will be fun to look back at sales and see which devices sold more.  Was the iPad the top seller?  Did the Surface surprise and rank higher?  Will the WiiU prove a success for Nintendo?  Black Friday is gone but Cyber Monday is upon us.  Let the games begin.

Apple Should Avoid Selling an HDTV Set

The 2012 Holiday Season is upon us and there is no Apple TV Set.  According to "Piper Jaffray analyst Gene Munster said he believes Apple will kick off the TV in November 2013."  But perhaps it is time to reconsider.

While Apple could use another new product to add to its inventory, an HDTV set is ripe with problems.  For one, consumers have already invested in big screen HDTVs.  Best Buy, a leading seller of electronics, is facing a tough fiscal year.  Prices for TVs in general continue to fall, making margins harder to reach and their is a glut of competitive product already on the shelf.  Second, the cable operators have no reason to trust Apple with their content and let them bypass their set top box.  Heck, Apple can't even get them to agree to use Apple's current TV product.  Third, the younger generation has already figured out how to bypass the cable box.  Xbox, Wii, Roku, and many others already can bring web content to the HDTV set.  And fourth,  the next generation is far more interested in smaller devices than larger ones.

So what should Apple release next.  The current Apple TV box still exists and has room to get better.  It integrates the iTunes library and for the Apple home, enables a conduit to the current TV screen.  It could get even better if Apple sought to build out a gaming model to compete with Xbox.  Integrating iPads, iPods, iPhones and other  new gaming devices to build an interactive experience across multiple screens.  Add to that a new visual approach, perhaps borrowing a bit from Google Glasses, and other  controller devices to make a more immersive experience.  Lastly, sell and/or rent games from iTunes.  No hard copies to clutter the living room; everything is stored in the cloud or downloaded onto the box.

So Apple, don't waste your time on the big HDTV screen.  It lacks the growth and margins to serve your needs.  Your opportunities are best served elsewhere.

Dish and AT&T Partnership Rumors Continue

If not a Google - Dish partnership, talks of AT&T acquiring Dish have also been around for a while.  What value the wireless spectrum has may just depend on what the FCC determines, but AT&T might also like to work with Dish on how best to use that asset.  And that may affect Dish's future stock value.  "Dish's premium could reflect lingering hopes that it will decide to sell off the spectrum, whose value Bernstein estimates at about $8 billion, equivalent to 50% of the company's current market capitalization. Mr. Ergen has said this isn't his intention."

Dish's possible future continues to take many turns.  Google and AT&T have been mentioned, but so has DirecTv. A merger of the two satellite providers, if approved by the FCC would rival the size of Comcast.  Whether that merger was viewed as anti competitive in the satellite space, as opposed to bringing more size parity to the cable space, remains to be seen.  Regardless, Dish seems to be in play and the question is who will they hook up with.

Dish Wants A Wireless Business And So Does Google

Dish Network is the second largest cable satellite provider in the US.  They also have clear intentions to be a leader in the broader wireless world. Having picked up wireless spectrum for the past few years, Dish is trying to figure out how to get the FCC approval to utilize it for two way mobile communication.  And while Dish has tried to find another mobile partner to gain a foothold, nothing has taken root.

At the same time, Google has been pushing to enter the broadband space as well.  Their fiber build in Kansas City has been one way to control a broadband pipeline but capital to build a national fiber frame may be too big, even for Google.  "According to 'people familiar with the discussions,' Google has talked with Dish Network about the possibility of creating a new wireless service."  For Google, the collaboration could mean greater connection between content and distribution for all of its mobile devices; for Dish, a possible larger audience to sell cable product and interactivity.  And the challenge for both, sharing and not owning outright.

"Don’t get too excited, though. Dish still doesn’t have regulatory approval to build a wireless network with its spectrum, and it doesn’t have the necessary infrastructure, either. If Google and Dish formed an alliance, they’d either have to build their network from scratch–a massive investment, no doubt–or partner with another company that had its own infrastructure already."  Still the size of this collaboration might give them the leverage and credibility that they need to move a project of this size forward.  Could they attract enough customers away from their current wireless provider; well as costs rise, customers are always attracted to lower cost alternatives.  And this new potential entrant could just disrupt the current model.

Is Rupert Murdoch An Anti Semite - A Bad Tweet

Sometimes kids say the funniest things: sometime, so do adults.  And sometimes, when they don't realize it, they can forget who they are talking to, or more importantly, who may be listening.  Mitt Romney forgot that when he mentioned the 47%.  And now it it Rupert Murdoch's turn.  Murdoch, the head of a media conglomerate, and one who clearly should understand the power of communication, got caught in the headlights.  His tweet, “Why is Jewish owned press so consistently anti-Israel in every crisis?”, begs the question, what were you thinking.  But Mr. Murdoch, you own huge media conglomerates including The Wall Street Journal, The Times of London, and even Fox News.

And while Mr. Murdoch did back track, perhaps what we really want to hear is your editorial telling us what you really believe.  The trouble with 180 characters, it's hard to know more than a a nice headline; it's time to fill in the blanks and tell us your full position.

TV Watching On My Terms

It is a difficult job these days being a corporate television scheduler.  You may want to program your show on Monday Night at 10 pm, but your audience wants to watch it on Thursday at 8:30 pm.  With the help of DVRs, on-demand, and other platforms, the choice of when to watch is in our hands.  "This fall, 38% of young-adult prime-time viewing on the major networks (and 23% of all viewing) consists of previously recorded shows, Nielsen says. That's up from nearly zero a decade ago."  And while great for the consumer, it has brought a bit of havoc to the television and advertising industry.

As we have found, live TV viewing is down and consumers are watching shows past the 3 days that networks get credited for their ads to run.  Plus with Hulu, Netflix, iTunes, and other platforms, are choices have become unlimited.  But in that fragmentation, we have lost a bit of that water cooler mentality.  Very rarely now is there a TV show that encourages us to watch it live only to report back the next day and share in the gossip of retelling events and character lines. While some of it may exist in live reality TV, like America's Got Talent or The Voice, the scripted series has suffered.  No giving away plot lines as I have the show on my DVR to watch this weekend.

is this necessarily a bad thing?  I don't think so.  The access to content means that a show once aired has the ability to be watched on our schedule.  We are no longer forced to wait for a repeat airing over the summer. That the ads are being skipped over with technology.  Blame that on overloading ads into our shows.  DVRs have become both "payback" and "playback".  Innovative ad opportunities still exist.  Disruptive technology certainly changes the old business model but that always tends to lead to a better mousetrap.

DVR Usage Also Dropping

Yesterday's news indicated a drop in live viewing, due no doubt to all the other platforms juggling for our time.  Today's WSJ report now tells us that DVR usage this year is also down.  Of the four big networks, only NBC saw growth and the rationale for this is that they are finally airing more watchable programming than last season.  Overall, the downward trend makes network executives ponder these changing viewership trends.  "The data are likely to underscore concerns about traditional television viewing, suggesting that people are either watching broadcast television shows through on-demand services, or are turning to alternatives such as online video."  Still the additive viewership of both live and 7 day DVR viewing is up.

Of course this study is only talking about the broadcasters and not cable networks.  Yet, I would speculate that the same trend holds true.  Our attention span has become shorter and our sights keep shifting.  We are surrounded by so many alternative platforms, from tablets and laptops to smartphones, that the TV at times becomes secondary.  The cost of TV service could also be a contributory factor to this decline.  And lastly, this notion to measure networks when, especially on other devices, consumers watch shows.

More Video Platform Choices, Less Live TV Viewing

The rise of internet streaming, DVD and on-demand, as well as alternative TV usage for gaming has led to a small year over year reduction in live TV viewing, down 5 minutes.  At the same time, "Americans added another 5 hours in front of the computer screen in Q2 2012 as well, using the Internet or watching video content."  While this usage is being done at the same time as the TV is on or separate, 5 hours seems a substantial increase.  In fact, Nielsen research shows "Close to 40 percent of Americans say they now use their tablets and smartphones while watching TV at least once a day. As many as twice that amount of people do it at least once a month."

Our viewing preferences are clearly shifting but is this problematic for live TV?  Does a 5 minute reduction mean a growing trend?  It seems we have always been multi-taskers in front of our TV sets.  Whether reading a magazine, talking on the phone, eating a snack, or playing a game, we have treated the TV as background noise.  Only with high involvement type programming, especially sports, are we drawn more into the TV set. So the growing use of computers and tablets while the TV is on seems consistent with how we have always treated our relationship with the TV set.  In fact, the large screen size of the TV set makes it ideal for other non-live usage, from Netflix viewing to X-Box gaming.  Live TV usage may decline as viewing our our terms becomes more and more valued.

At the same time, content companies may need to shift to more live programming to keep audiences attentive.  Live showings of The Voice or American Idol and end of show voting and results are great examples of TV networks taking advantage of the benefit of live programming. News and sports also attract live viewing. It seems the most important requirement remains that the TV set remain in the on position.

Hurricanes and Technology

Like many others in the Northeast, our home was without power for a number of days.  Compared to many others, we were luckier; no property damage, no flooding and no loss of life.  And like many, our routines were disrupted.  As a family, the loss of power meant no heat, loss of food, and no light.  During the day, natural light was plentiful, but night meant candles, flashlights, and a fire in the fireplace.

Worse, was the threat that our mobile devices would run out of power; cellphones for communication, laptop and iPad for entertainment.  At night we played games on the iPod, watched DVDs on the laptop or on movies previously downloaded on the iPad.  We are a power hungry family.  And one night's use meant that they needed recharging

So what did we learn.  First, that we needed to go daily to the charging station at the  town hall or rec center to juice up.  We learned which restaurants had power and which didn't.  And the same with neighbors and friends that got power first.  We learned that the cloud may be a great way to get content, but that ultimately we need to keep a copy of the content at our fingertips.  More downloaded films and more DVDs for that "rainy" day.

Andy while my Verizon cellphone could make calls and get emails, my AT&T phone could not connect.   "Among the concerns: that backup-power strategies for cellphone towers based on batteries that can run for eight or 12 hours aren't sufficient in the face of outages that can go on for days."  Our electric grid that powers these towers as well as homes and businesses have glaring weaknesses.  Lines on poles above ground crash down as trees fall over and poles split.  We are held hostage by our respective power companies as they grapple with both the storm and public officials.  From town mayors to Governors, all expecting immediate results while some homes have been without power for more  than 2 weeks.  And our patience gets more and more strained.

Natural forces are not going away.  It is not a question of if, but when will the next one strike.  In a month, in a year, or in a decade.  Regardless, as technology improves, more must be done to protect our power infrastructure and improve how our devices are powered.  Solar charging, kinetic charging, or some other quantum leap to stay "juiced".  And while we expect the cloud to hold all our data, and our entertainment, we should always consider having backups accessible and ready to use.  The hurricane may be over but hopefully it provides an impetus to a better "powered' future.

The Death Of Channel Surfing

Perhaps, I am being overly dramatic, but the truth is that channel surfing is dramatically different today.   With the rise of digital channels and the latency of switching the clicker one channel at a time, it is less efficient to click through channels, watching each one for a moment to decide whether to stay on the channel or switch to the next channel on the line-up.  Today, it is all about the meta data and the interactive guide that presents 5 channels at a time and what is playing at the moment.  With a flick of the page up (or down) button, it is off to the next 5 until one show catches our eye and we either click in on it or click the info button to read the description of the show. In addition, we now search by show, by category (like movies or sports), or take our search to the next level and look deeper in our on-demand or DVR menu for content to view on our schedule.

The art of channel surfing by peaking in on each channel is no longer efficient,.  It has become a loss skill.  Of course, with all the tons of content accessible to watch, it was time for a new mouse trap to be built, a new way to find and watch.  Old fashioned channel surfing may be dead, but the choice of content is alive and well.

You Tube Following Darwin's Law

The investment in tons of content for You Tube appears to be over.  It is "eat or be eaten" for more than half the content projects that You Tube funded.  "YouTube figures it will end up re-investing in up to 40 percent of its original channels by the time the renewal process is done."  So who gets picked and who doesn't?  Well most likely it just takes a look at Google Analytics and ad revenue generated over a period of time.  But should the  decision be all quantitative or is there something to be said for a good idea.

As broadcasters have come to know, not every series does well immediately out of the gate.  Some, including Seinfeld as a great example, need time to get discovered and enjoyed.  A little nurturing of the right content can go a long way.  And of course the costs associated with getting an idea on air.

But what is Google's true plan, is it to cut its total investments by 60% or take the total dollars and offer to the fewer content companies they are extending renewals to?  Is content creation still part of the You Tube strategy or do they have another direction in mind?  Certainly working the long tail of content may be a difficult one compared to usage generated from folks like Hulu and Netflix who each aggregate content from major broadcast, cable, and movie studio providers.  And perhaps there is more need to focus on a competitive subscription service.

As for the near future, we will let Darwin continue to rule and watch the more successful You Tube Channels survive while the others must either find alternative funding to stay afloat or go away.

Comics Go Digital

Comic Magazines seem to me to be a lost art. As kids find more colorful comic on the web, the desire to regularly buy the latest print editions seem an activity for past generations.  Still, our comic book characters continue to perform extremely well on the big screen.  Just look at The Avengers, Iron Man, and The Dark Night as a few examples.

It is time for the content of comics to merge with the digital generation.  "DC Comics is making all of its periodical comic books, like Superman, Batman and Wonder Woman, available digitally through Amazon, Barnes & Noble and Apple. With those companies all launching new tablets, DC clearly sees them as an important platform for reading comics."  Congratulations comic book fans.  Let's hope that DC takes advantage of the interactivity that also comes with digital.  At the same time, those stores still devoted to selling print copies better start to diversify their inventory to stay in business.

With the rise of more tables of different sizes into the hands of more consumers, comic content fits especially well. That tablets can do a terrific job of presenting this artwork in full rich colors can add a new appreciation to the material.  From zooming further into the picture to enhancing detail, the digital platform seems a real win for both consumers and DC.

Connected TVs and Online Content

With the quickening growth of internet connected TVs and the rise of content available online, consumers are finding it easier to cut the cable cord and focus on the broadband stream.  "Nearly 600 million televisions will be connected to the Internet by 2017, which is up from the 212 million expected at the end of this year, according to a new report from Digital TV Research."  Add to that the recent announcement that CBS has finally agreed to a deal with Hulu to provide its programming for digital streaming and TV programming is now more accessible to consumers without a cable connection. 

Consumers are buying these devices, from smart TVs to tablets and smartphones so that they can easily access content, print, audio, and video.  As it becomes easier and easier to watch full length shows and movies over the web, the need to subscribe to cable depends on the value the household derives from the subscription.  With each price increase, that decision gets revisited.   

It is easy to spot the trend, the question is when does it level off and at what level will cable subscription land.

 

More Cord Cutting Confirmed

Today's Wall Street Journal echos what Time Warner Cable reported, the loss of quarterly video subscribers.  Cablevision, Charter, Dish, Comcast, and others are all reporting sub losses.  The only exception for this quarter is DirecTv and they may be benefiting from subs switching from cable to a lower cost provider.  And it is apparent that this redistribution of video subscribers will only continue until costs for cable are reduced.

Cable Video Subs Dropping for Time Warner Cable

Whether we choose to believe that cord cutting is the reason cable operators are losing subscribers, the truth is that they are.  The high costs of a cable subscription service coupled with the cost for broadband access and hardline telephone service means that users are taking it all, dropping all services or cutting back.  And with a high cost to subscribe to cable services, the decision to drop the service when budgets are tight can be an easy one.  Especially as we rate our broadband access higher than cable. 

For Time Warner Cable, the proof in this loss of video subscribers is found in its quarterly earnings statement.  "Time Warner Cable lost 140,000 residential video subscribers, more than the 128,000 that analysts had estimated. The cable provider also added fewer Internet and voice customers than analysts projected, a sign Time Warner Cable is struggling to market the correct bundles of services to its customers, said Paul Sweeney, an analyst at Bloomberg Industries."  So while broadband and phone is showing gains, video is not.  But Time Warner Cable is not alone.  other cable operators are facing the same results.

Costs are most likely to blame.  As consumers find themselves spending more time on the webthan in front of the TV, the value proposition has changed.  And while consumers would prefer a lower cost cable bill, paying for the channels they watch, programming agreements make it difficult for cable operators to carve out lower bundles of service or offer a la carte pricing.  As Dish customers learned, if you can't watch The Walking Dead on AMC, you can watch episodes on the web.  And it is that transition that is hurting video subscriptions for all cable operators. 

We have become show watchers, not network watchers.  We barely know what network a show is carried on, especially when we DVR it or watch on demand.  We search for the show, not the network.  And as these shows are offered on Hulu, Netflix, and other platforms, we can choose the best platform value for our household to watch on.  Unfortunately, costs of service continue to rise.  And as consumers seek lower, cheaper ground to watch from, eventually, the costs to watch on these new digital platforms will rise as well, and consumers will eventually transition again. 

Current TV A Good Buy For A Digital Website

The USA Today article on Current TV makes a terrific argument for digital content to be multi-platform.  With Current TV up for sale, a likely buyer could be a web brand seeking to expand its presence through cable TV.  Sure, CBS could use additional cable networks to add to its roster.  Why they spun off Viacom always seemed a questionable move.  And other cable networks would love to have access to 60 million homes although any owner change could affect distribution.  But additional buyers should come from the web, according to Michael Wolfe, USA Today writer. 

"For the likes of The Huffington Post, Vice, TMZ, The Daily Beast, Gawker, BuzzFeed, CollegeHumor, Deadline Hollywood and Business Insider, Current TV could finally be a way to real money. These enterprises, having built major digital brands, now find themselves handicapped by digital business models."  His rationale, while web properties barely showed a profit, if any, Current TV "took in $101 million with nearly $12 million in cash flow."  Yes, there is still money in TV advertising.

Huffington Post/AOL seems a likely buyer.  With a streaming channel on their website, they could provide this additional content to cable homes and grow their audience substantially.  To be successful in this digital world seems to require being accessible across multiple platforms.  Cable networks have been able to use the web to share its content, both as clips and full shows. TMZ has gone the other direction, moving from a web presence to syndicated programming.  Success ultimately comes from being available across multiple platforms to reach an audience wherever they are.  While streaming media is making its way to the smart TV, full blown cable access, preferred by many still, may be the best way to grow both revenue and profit.  And for that reason alone, Current TV could be a great asset to the right media company.

Is Microsoft Buying Netflix?

With the release of their tablet, Surface, Microsoft may feel the need to have a content strategy, too.  For Apple, it is all about iTunes; for Microsoft, the rumor is that they are thinking of acquiring Netflix.  "Meanwhile, buying Netflix would be in keeping with Microsoft’s revamped philosophy on the Xbox 360, which treats the device more like an entertainment device and less like a video game console."  How Microsoft can use this for their competitive advantage remains to be seen.  Netflix has had a difficult time growing its streaming business while its DVD business drops.  That Microsoft can bring something new to Netflix is a big question mark. Netflix plays more like an agnostic player while Microsoft needs a content partner that can specifically make its own devices look and act superior.  My guess is that this is all rumor and not a strategic possibility.

All Hail The DVR

The must-have device in the home, it just might be the DVR.  For those of us that like to watch our shows on a big screen TV, the DVR is the ultimate device to watch what you want, when you want, and to be able to fast forward through the commercials.  In my home, the DVR is used regularly, except for watching news and sports.  Well, it seems my family is not alone.  " If the digital video recorder were a network — with you, the viewer, as chief programmer — it would rank as tops among total viewers and in the key young-adult demographics."  According to the report, DVR usage has jumped 30%, year over year.  And to measure the success of a TV show, it is now crucial to include  viewing post live, up to 7 days after the initial broadcast.  Sometimes longer in my household.

Of course the DVR requires us to be proactive.  To seek out and set a show or series "taping" in advance.  Yes I still say taping even though no real tape exists.  Blame my previous use of the VCR.  Still, it requires advance notice.  And when a time shifts due to unannounced changes in the schedule, the result is a missed recording.  Networks don't seem to care, they seem to purposely have their show run a few seconds if not a minute or two longer just saw the DVR misses copying the end.  Ultimately, each recording needs to be manually extended to try and catch the entire program.

Sometimes, the back up is the on-demand service that is provided.  For networks that have enabled their shows to be available on-demand, viewers have a second means to watch their shows.  Sometimes though, operators are required to disable the fast forward features so that we are required  to sit through the ads played.  Luckily the ad inventory seems to be less than on live TV; for now.

So all hail the DVR, our resource to watch TV on our schedule and not the networks.

New York Times Sees A Digital Lift

The New York Times seeks a similar strategy as Gannett, pursue the digital business while managing the decline of print.  If costs can be contained, a leaner company can also be a stronger one.  With that, the NYT saw a double digit increase in digital subscriptions.  On the other hand, "Print advertising at the company’s newspapers, which include The New York Times, The Boston Globe and The International Herald Tribune, shrank 10.9 percent, and digital advertising across the company fell 2.2 percent."

Pushing great, exclusive content, only available behind a paid wall, that is of value to the consumer, should propel the company forward.  As more and more tablets get into the hands of more people, the desire for content becomes greater.  Marketing to these consumers the value of a digital subscription is essential.  Getting them to part with their hard earned dollars is necessary, especially as there is also so much free content to consume as well.  For those, like me that have grown up on the NYT, the value proposition to digital is an easier one to make; for the younger audience, the push to compete against other news outlets for share of the digital market may be a bigger challenge.

Netflix Not Growing Fast Enough

Netflix continues to face challenging times.  Unable to successfully transition from DVD to streaming, it faces a battle of watching its DVD subscriber rental base declining, but its streaming base not rising fast enough.  Add to that mix the higher costs associated with streaming verse DVD, and the profit margins are dropping faster then desired.  Still the streaming base is growing, just not as fast as expected, and certainly not fast enough for Wall Street.

Netflix has tried to recapture a higher revenue by raising prices on its streaming business, but consumer uproar nixed it.  "Netflix also needs more subscribers because it is sticking to its price of $8-a-month for unlimited video streaming. The company faced a huge backlash last year when it raised prices as much as 60 percent for people who subscribed for both DVD service and streaming. The company says its reputation has yet to recover."  Still, Netflix may have to keep trying to raise its prices.

It also faces a hurdle from competition.  Cable operators continue to push their on demand line-up as comparable to Netflix and as an added value to cable subscribers.  Amazon, Apple, and others are there to offer similar content as well.  The launch of new tablets and mobile customers may enlarge the marketplace and further grow the subscriber base.  Content feeds these devices and video is a perfect fit.

Can Netflix contain its costs and grow its streaming business?  Can it stop the excessive bleeding of DVD subscribers as it continues to transition to a digital business? Its CEO Reed Hastings sees great opportunities, both domestically and internationally.  That is certainly what investors are hoping for.

iPad Mini Starting at $329

iPad Mini is $329, iPad 2 is $399.  Did Apple price the mini too high to compete effectively against the Nexus, Kindle, and Nook?  Will you buy a Mini?

How Much For An iPad Mini?

Today is the big day.  The iTunes Store is down, the Apple devotees are waiting, and in a few hours the announcement will confirm what has been buzzing for months.  The release of a smaller version of the iPad.  But at what price?  "The Kindle Fire starts at $159, and the Nexus 7 at $199. Meanwhile, Apple sells the iPad 2 for $399 and the 4-inch iPod Touch for $199. Company watchers are pegging the price of the smaller iPad somewhere in between."    Will the iPad Mini be priced at a comparable value as Nexus and compete on price with Amazon, or price itself a bit higher expecting that consumers may pay a bit more?

If the Apple magic can extend to the iPad Mini, it could become the next huge holiday gift.  But the price must be right.  And what else will be announced today; new laptop, revamped iTunes store, are all a possibility.  Even as we wait for the announcement, questions swirl as to the next product innovation for Apple, the next new piece of hardware that we must buy and own.  Apple has struck gold with the iPod, iPhone, and iPad.  Will an Apple TV be next or something else?  Stay tuned.

Dish Settles And Former Cablevision Networks Relaunch

It seemed to take the threat of a witness stand to put the final nail into a case and cause Dish to settle with Cablevision.  Cablevision clearly won as Dish will pay a settlement fee and relaunch all of the AMC Networks, including AMC, WE, and Sundance, as well as finally launch the Fuse Network.  And as both sides begin to play nice again, the rancorous feelings between both companies and their respective leaders has most probably not subsided. Publicly, both sides are saying nice things, using the old expression, "it's just business, not personal".  But it is hard to believe that is true.

For Dish, the win may be that the $2.4 billion suit was settled for $700 million and saving four months of not paying for these channels.  For Cablevision, it was a recoup of some of the loss of Voom and to regain a healthy number of subscribers across its networks.  And for now, one more fight between network and distributor has ended; no worries though, another should begin again as we get closer to the end of the year and another contract is set to expire.

Sprint Intends To Be A Player

It's amazing what a little cash can do for a company.  Softbank's investment into Sprint has enabled Sprint to take a majority ownership in Clearwire.  "Clearwire’s spectrum is crucial to planned high-speed upgrades to Sprint’s network."  Certainly the plan is to build the widest, most efficient next generation broadband communication system to rival its competitors, AT&T and Verizon.  As we become a nation requiring more access to wireless at the fastest speeds possible, a leap like this could propel Sprint well forward and continue to force its competitors to hasten its capital expenditures to manage an increasing demand.

With Softbank, a Japanese owned investment group with businesses in mobile and fixed communication, Sprint becomes an international player as well.  The world becomes a smaller and smaller place as companies entrench themselves, not only in the US, but across the globe.  We do indeed live in interesting times.

For Newsweek, The Digital Switch Turns Quickly

In a changing media landscape, transitioning becomes part timing, part luck, part skill, and part intuition.  No change is deemed right or wrong until after the fact when we look back and see who has survived and who has fallen.  Across industries, the past is littered with brands and companies that couldn't adapt to change  and are no longer in business.  For print, the media landscape is changing rapidly from physical to digital as consumers embrace tablet and mobile technology.

Gannett has  taken one path to the digital transition, embracing a subscription paywall as a means to increase its digital subscriber base and improve revenues.  At the same time, they continue to print and sell print subscriptions.  For Newsweek, now under the control of Barry Diller and IAC, is to pull the bandage off quickly.  "The last print edition in the U.S. will be the Dec. 31 issue, Tina Brown, editor-in-chief and founder of The Newsweek Daily Beast Company, said today on the company’s website. The all-digital publication, to be called Newsweek Global, will require subscriptions and will be available on tablet computers and on the Web, Brown said."  Cost to print and mail drop effectively to zero although revenues are also expected to drop.  Most significantly felt will be the loss of single issue sales off newsstands.

Can a leaner, meaner Newsweek survive as a digital only weekly magazine?  Is such a quick transition the best course of action or does Gannett have a better strategy?  Such are the questions and challenges facing these two companies as well as others in the print media space.  Perhaps the answer lies in how well marketing can attract subscribers and how valuable the content is measured by the consumer.  Wherever one is led to get access, the hope of these companies follow the famous line from "Field of Dreams", "If you build it, they will come."

TiVo Seeks New Revenue Sources Through Litigation

Ideally, TiVo would be able to take its superior product and integrate into each and every cable operators cable box to create a world class cable DVR box.  But that has not happened as quickly as possible.  Especially as the top cable operator have done little to embrace TiVo.  Instead, new revenue has come from another source, lawsuits.  With wins and settlements, TiVo has been doing quite well.

The latest source for funds may just come from another lawsuit.  "TiVo Inc. said it may be entitled to billions of dollars in damages should it win its patent- infringement lawsuit against Google Inc.’s Motorola Mobility unit over digital-video recording technology." Should this fight find a similar outcome as others, TiVo will once again see a financial lift from litigation.

It is certainly nice to see that TiVo is working over time to protect its patents.  It simply needs to work equally as hard to get its products in the home.  Perhaps the outcome of this latest litigation is that Google and Motorola make TiVo the official DVR of its cable box.  Thus cable operators  using Motorola set top boxes will automatically be using TiVo.  Perhaps.

Pay Wall Working For Gannett

Gannett may just be turning the corner on its business model as it takes more and more revenue from the digital side of their business.  With digital subscription expected to rise 25% this year and digital ad revenue rising, it seems that Gannett is transitioning well from a print to digital business.  "Digital 'now represents more than 25 percent of total revenues,' CEO Gracia Martore said in a statement accompanying the earnings release."  It is likely that as more effort is made to build out the digital model, costs can be reduced in the print model to build out a healthy profit margin.  Exciting times ahead.

Are Newspaper Paywalls Working?

One thing is clear, the success of media, be it cable, print, or radio, rests with multiple revenue streams.  As companies demand more and more return for their investment, a single ad sales model has a hard time generating investor interest than one that relies on revenue from subscription, e-commerce, and other streams.  In today's digital world, newspapers especially have suffered as free content on the web has cost papers their subscription base.  But the cure, putting content behind a subscription service or paywall may be the cure.  As today's Wall Street Journal asks, are these paywalls working?

Investor mentality certainly reflects the improvements and future expectations of the digital business model. If today's earnings from Gannett are any indication, then an improvement in revenue because of an increase in paid digital subscribers will be welcome news of the success of the web subscription business  "The big risk of paywalls is that by restricting online audiences, newspapers can hurt their ability to sell online advertising. Until recently, that concern had prevented many publishers—other than those with market-moving financial information like The Wall Street Journal and the Financial Times—from charging readers for online access."  But if the subscription model leads to a scalable business, then there is hope that the ad model also works.

Consumers are being asked more an more to pay for digital services.  Cable television, Sirius Radio, MLB online, Amazon Prime, Hulu Prime, Netflix, and others are pushing a paid subscription model.  Free on the web just doesn't financially work and the free ride of content may be harder and harder to offer.  We are getting more and more comfortable paying for digital content provided that it delivers for us a worthwhile value.  it is when we believe we are being charged to much, that we threaten with cord cutting.  And that opens the door for competition.

All I Want For Christmas Is An iPad Mini

Just in time for the holiday season.  That just might be some of the rational for the launch of the iPad Mini.  With a scheduled announcement date of Tuesday, October 23, iPad Minis may be on the shelf and ready for purchase for all those good little boys and girls.  Good news for consumers looking for something special to stuff in the stockings.  Of course there may be another reason Apple is announcing the launch of the Mini on October 23.  "It also happens to be just three days prior to the street date for Microsoft’s new Surface tablet and two days before Apple reports earnings for its latest quarter."  A great way to diffuse Microsoft's announcement; maybe too, to offset a not so spectacular quarter for Apple.

Broadcast And Cable Viewership Declining

Not that TV viewership is in a death spiral, but it should be noted that TV viewing through the television set is declining.  And while the older generation continues to watch at the same levels, it is the younger generations that are bypassing television for other platform consumption.  The Wall Street Journal notes that "The viewing slump suggests traditional television is being hurt by intensifying competition from online video outlets such as Google Inc's YouTube and Netflix Inc."  But according to the networks, the news isn't all that gloomy.  They believe that there is still DVR viewing that will improve these disappointing figures.

For content creators, it doesn't mean that viewers don't like what you are developing, just that they have found alternative platforms to use to watch.  Why watch AMC Network's premiere of Breaking Bad when you can watch it at your convenience at a later time through your cheaper Netflix subscription.  Except for live programming such as sports, there is less and less desire to watch at the premiere date.  Rather consumers can decide at any later point when they wish to watch and where and how to view it.

Should broadcast and cable be worried about this viewership drop.  For some, perhaps.  "Some big-name cable channels have also experienced sharp declines in the 18-49 demographic, with a 41% decline at MTV and a 27% drop at Comedy Central, both owned by Viacom Inc., and a 13% drop at News Corp's FX. Meanwhile, cable news channels like Fox News, CNN and MSNBC have drawn larger audiences as the presidential election approaches in November."  Live breaking news encourages television viewership, but shows like South Park or The Daily Show are just as easily watched away from the television.

And as radio changed as television became more rooted in the home, so too must television programming change as the web takes more of an audience.  Perhaps it means bringing back live drama and sitcom TV where the possibility of "an anything can happen" approach makes folks want to watch.  Or television has to build up some exclusivity of its content that limits how people can watch.  As web programming moves from more short form to long form shows, the threat to broadcast and cable will only get greater.

For Sale: Premium Network Seeks Like Minded Partner

Liberty Media and John Malone are keeping pretty busy these days.  In one corner, they are actively buying shares of SiriusXM while planning a spin off and hopeful merger of Starz with another programmer.  "Speculation of a possible future sale ran high shortly after the spin announcement, with some reports that Time Warner Inc.’s Home Box Office unit or CBS’s Showtime premium channel could be possible suitors. Other possible suitors include Comcast (which controls the NBC Universal partnership), News Corp., The Walt Disney Co., and Netflix."

My question is where the value may be for a merger, in the content license deals that Starz owns or in the distribution of its service across cable operators.  Does HBO or Showtime really want to manage another distribution channel or do they like the content deals that Starz can bring to their respective premium channels.     For folks like Comcast and Disney, I think that it is the subscription revenue that Starz offers and the opportunity to build another vertical path from content creation to distribution.

I also wonder why is Liberty Media willing to sell their asset.  Does the premium window no longer interest them?  According to Malone, "Unfortunately, other than financial synergies, Liberty really can’t provide Starz with much in the way of operational synergies in this space in the U.S.” Doesn't the same hold true for its other programming entities like Discovery and QVC?  Clearly, there may be other reasons stoking this strategic change.

Slingbox Gets An Update

Do you travel frequently?  Do you wish you could watch your shows on multiple devices outside the home.  If you can't wait to watch shows when you are resting comfortably in your own home, then Slingbox may just be the right box for you.  And it's redesign includes an added benefit, the ability to push content from your smartphone and laptop back to the Slingbox and the TV set.  "Both products support up to full 1080p HD-quality streaming of live or recorded TV programming and Ethernet connectivity. In addition, the 500 -- which looks like a conventional set-top box that has been twisted in half -- includes HDMI inputs and outputs, plus dual-band Wi-Fi."  So Hi Def and a new design.

Echostar and Slingbox hope this new product will expand its audience reach beyond "sports fans and techno-geeks”, according to their VP of marketing.  Still, like TiVo, their biggest source of growth will be working with other cable operators to integrate their software into the cable box that currently controls the home.  If not, then the marketing push will be demonstrating just how easy the box can plug and play with the current box sitting under the TV set.

iTunes Meet Google Play, On Demand Meet Streaming

Movie night in America, when the family settles down in front of the TV to watch a movie together.  But that situation continues to take many twists and turns.  Today, the tablet and laptop allows more individuals to watch their personal favorite show and no longer need to let majority rule for the control of the content.  And on demand, cable's choice for movies and TV shows on the television set is being usurped by online streaming.  In fact, the rise of the connected TV means that these same web streaming shows can be shown on the television as well as on a mobile device.  The future growth of on demand will compete head on with iTunes, Amazon Prime, Netflix, and Google Play.  "Google TV launched initially back in 2010, a service co-developed by Intel, Sony and Logitech. Now, in an announcement on its blog earlier today, the Internet giant said it would be rolling out the content on its smart TV platform over the coming weeks, starting today."

Big news for Google, more competition in the streaming space for Apple and iTunes.  Certainly Apple fans have been waiting to hear more news about Apple TV.  As these competing services gain more content, they demonstrate that the iTunes model can be copied and their size can be matched.  With so much choice of content to view, consumers will have to decide which service provides the right assortment of content accessible, which service is easiest to navigate, and which service provides an ergonomically better usage and viewing experience.  All this while the cable box, and on demand struggle to compete for consumers with its clunky technology and difficult navigation. And with the rise of tablets, the edge may just to streaming media.

Online Channels Growing To Compete With Cable

Can the rise of online video channels disrupt the current model of cable TV or can both live peacefully together?  Certainly broadcast survived the growth of cable although eventually broadcast networks had to buy their cable counterparts.  With the growth in online video, consumers may be excited to have more choice or they may decide that they don't need cable TV and will continue to cut the cord to their cable subscription.

The disruptive change is coming from Google and their video arm, You Tube.  "Acting more like a TV network every day, YouTube says it will pay money to professional producers of more than 60 new shows it is adding through its YouTube Originals program in the UK, France, Germany and the US."  And You Tube is spending tons of cash to support these endeavors to create original content on their online distribution platform. And while the content quality will improve with professionally produced video, the other side of You Tube, consumer generated videos, may just be relegated to lower placement or worse, lose their place on the platform.

As these original You Tube programs become long form, 30 minutes or longer, they will truly compete head to head with cable television viewing.  With only so many hours in the day to watch, attention to cable will be diverted to online just as, years ago, cable TV diverted attention from broadcast channels to cable programming.  How will the networks respond?  Most likely, an even more truly integrated TV Everywhere approach to assure that all linear content is accessible across multiple devices, both inside AND outside the home.  Today, some cable operators only offer access to mobile devices inside their home.  Networks and Cable Operators may also have to consider buying up these upstarts in order to have more contact in the space. 

As online video takes root, the likely end scenario will be that the big broadcast networks will have the largest audiences as they will have a true TV Everywhere model. The best online video will most likely be behind a pay window and the cable model, if flexible to more a la carte, build your own line-up of channels type of model, could be most customer friendly and successful.  The content model frankly cannot live on advertising revenue alone.  The need for a second stream of revenue, like a subscription service, is necessary to pay the bills.  Without it, the online video model cannot continue to attract the top talent; eventually they all want to be paid more. 

The Washington Post Loves Cord Cutters

If you have successfully weened yourself from cable TV and the various news outlets, then you may have already found alternative sources for your news fix.  But if you haven't or need another push to cut the cord on your cable subscription, The Washington Post may have the answer.  "The Washington Post’s new daily news show The Fold is interesting for a number of reasons: It debuts on Google TV and was made specifically to be viewed on connected TVs, and its target audience are cord cutters who don’t watch cable news anymore."  Will a 15 minute news program satisfy your need?  For those that keep their TV tuned to MSNBC or Fox News, it frankly may not be enough.  But it may be the first step in a 24 hour, online only, linear news stream.

Blockbuster Has No Future

When Dish Network purchased Blockbuster a year and a half ago, the thought was that they would be able to build up a rival streaming business to Netflix.  And despite Toys R Us now announcing their entry into the video streaming space, Dish has decided their is no future streaming business for Blockbuster.  "Dish no longer has plans to use Blockbuster as a nationwide video streaming or DVD-by-mail service, (CEO Charlie) Ergen said."  An interesting decision considering Coinstar and Verizon are now developing their own video streaming business.  What has changed for Dish?

While Ergen did not say what those future plans are, one has to wonder if the plans are simply to shut it down.  "The company has other plans for Blockbuster on which Ergen declined to comment. Dish has spent 'a lot of time' talking with cable networks about an Internet streaming service for live programming, although the service is probably still 'years away,' Ergen said. 'Worst case, we’ll take our money after having wasted some time, not much money, and life goes on,' Ergen said."  As relationships in general between Dish and cable networks have been less than warm, it seems more likely that the reality is closer to a shut down or sale of Blockbuster.

Overall, the streaming space seems already crowded with platforms selling the same video libraries - Apple, Netflix, Amazon, Wal-Mart, Toys R Us, Coinstar/Verizon, etc.  While Blockbuster has a brand value, it may also suffer from being a brick and mortar experience with dvd rentals and not an online identity.  And the struggle of changing its value proposition from store front to a digital business is what ultimately hurt Blockbuster's chances for success.

Toys R Us Continues Its Push Into Digital

The video streaming business just got more crowded with the arrival of a brand new service from Toys R Us (TRU).  On the  heels of its announcement of its own tablet, TRU will be streaming television and movies under a rental model.  " The site will be powered by Rovi (ROVI)Corp, a digital entertainment technology company." Future plans include apps for Apple and Android devices, as well as their own Tabeo tablet.

Unfortunately, it is a very crowded field already dominated by iTunes, Amazon, and Netflix, with Wal-Mart's Vudu pushing its service as well.  If the titles being offered are all the same, won't customers simply be motivated to seek the lowest priced streaming service.  TRU must also contend with building a video streaming library of comparable size as its competition.  It is hard to imagine that customers will want to use too many different platforms to serve their video consumption strategies.  Netflix and Amazon have built an all you can eat buffet of videos while Apple likes to sell a la carte.  How TRU differentiates its service is crucial to gaining a measurable market share.

Motorola Drops Patent Suit Against Apple

The news that Google's Motorola unit was dropping its suit against Apple must be somewhat attributable from Sun Tzu's, "The Art of War". There are times to attack and there are times to withdraw.  And Google must have assessed their chances and given the recent ruling against Samsung, determined that their best move was to retreat.  "In a brief filing with the International Trade Commission on Monday, Motorola Mobility said it was dropping without prejudice a complaint that Apple had infringed on seven Motorola patents."  And so another patent fight with Apple is over and points again to an Apple victory.

Of course The Art of War also says  that strategies continue to change and a withdrawal one day may only lead to a direct confrontation in other ways.  And in a competitive environment, there are differences in a battle victory and the entire war.  Competition between Google and Apple does not end with this patent fight; the war is still on.

What Makes A Popular TV Show

The new TV season is here and networks are pushing their promotional blitz touting the most watched, funniest, best show on TV.  And TV execs scour the ratings the day after their show airs to see just how popular and successful their show is.  For some, it may determine whether the show gets picked up for the year or cancelled after only a few episodes.  TV execs have become less and less patient to let a show find its legs and its audience.  Some shows get lucky; Seinfeld really took till its third season to become a hit.  It was the pushing of certain execs that kept it going when it would have been too easy to cancel.

Today, those same execs might want to practice more patience because it is not just ho many are watching their show live, but also how many are watching their show on a delayed basis.  " The biggest takeaway in the television business from the season’s first week is that first impressions of a new show’s success may mean next to nothing now. With about 20 percent of viewers watching episodes of network series on a delayed basis, the initial ratings have to be seasoned with much larger quantities of salt."  I count myself among those 20% and I suspect that number is higher.  Between DVR and on demand, there are many shows I want to watch.  Two of them are on my DVR and are almost a week old, but I intend to record them and get to them even if I fall two or even three weeks behind.

The pleasure of watching shows on my schedule and not the networks is appealing, both because I can watch when it is most convenient to me and that I can watch and fast forward through the commercials.  In fact, it is becoming rarer for me to watch live shows, except for sporting events and award shows.  And so networks need to take total viewing into consideration, not just live, not just 3 days delayed, but in much longer  periods than even 7 days.  Add to that the online and on demand viewing of previous seasons and shows can actually start to demonstrate a growing audience appeal.  Heck I still need to watch the first season of Homeland to catch up to this season's story.