Microsoft Sees A Future With The B&N Nook

Microsoft just took a position with the Nook, Barnes and Noble's stock is rising and Liberty Media must be feeling good too.   The resulting investment by Microsoft to Nook adds a well needed boost to help it expand in the e-book and tablet space and fight off Amazon and Apple.  So will the Nook technology improve?  Will Windows 8 become its operating system?  And how will the added dollars help to win customers from its rivals?

Some see this investment as the push to separate Nook from its physical bookstore.  "Some on Wall Street see the Nook as a fast-growing technology asset trapped within a slower retail stock. They have theorized that Barnes & Noble would spin off the Nook business to give it a chance to trade at a higher valuation." I wonder if the Nook is a stand alone business would it only hasten the loss of the Barnes & Noble Bookstores.  And that would be a sad day.

For now, Nook and B&N must feel a sigh of relief with this new investment.  This added capital will certainly help to speed up innovation and bring better products to market.  It could be the kick in the pants that the Nook needs to be competitive.

Hulu Could Stop Being Free

It's time to teach the younger generation one of the great tenets of business, nothing of value is given for free.  Everything has a price and that price will continue to rise as more and more entities want their fair share of the revenue.  So for those that have enjoyed quality long form content from the cable pay model for free on Hulu, it may one day be time to announce that the "free lunch is over".

"In fact, the move by Hulu toward the new model — called authentication because viewers would have to log in with their cable or satellite TV account number — was behind the move last week by Providence Equity Partners to cash out of Hulu after five years, these sources said." As the NY Post has  reported, the cable companies are seeking to stop cord cutting, customers dropping their cable subscriptions, by turning Hulu from a digital competitor to its partner  in TV Everywhere.

But the move to authentication may take a while to coordinate.  "To be sure, Hulu’s slow move toward authentication comes amid a jumble of cable and network game plans for streaming — which remain a strategic nightmare thanks to the complicated nature of the TV Everywhere initiative, which is aimed at keeping top shelf digital video exclusive to pay-TV subscribers."

For customers tired of paying  high rates for cable subscriptions, quality programming is being created for other OTT distribution; for example, You Tube is building out live channels.  But as we have discovered, nothing stays free and as we look ahead a decade, all this free content will eventually find itself behind different types of pay models.  For now, enjoy the free lunch while it lasts.

Why Can't Television Be More Like A Tablet

A terrific article in today's NYT that shows the direction that TV usage is taking.  The rise of tablets and web viewing showcases just how clunky the cable box interface is and how the consumer ideally wants to interact with their TV set.  TV manufacturers are going around cable operators by building sets with web access and app interfaces.  "Already, apps for Hulu Plus, Netflix and Wal-Mart’s Vudu streaming service, among others, are built into Internet-enabled televisions. Devices like Microsoft’s Xbox 360 and the streaming video player Roku let viewers watch apps that mimic channels. New sets by Samsung and others come with built-in apps loaded with television shows, movies and sports."  And Apple is speculated to have its own TV set in the works, perhaps to be called the iPanel, that will could become the ideal way to navigate TV.  All this while cable still must rely on set top box.

The biggest complaint for cable is the high cost of its monthly subscription and consumers feeling like they are paying too much for channels they don't watch.  But "buffets" have always helped to provide an all you can eat model for one price and make the total price lower than buying less and paying about the same.  Most cable programmers don't want to give up this model; it provides great revenue whether the network is watched or not.  Authenticated viewing on mobile devices, like tablets, extends the value of the cable subscription and keeps the cable subscriber from cutting the cord. 

Still, cable operators must do more to make viewing on the TV set as easy as navigating a tablet.  New guides, better remotes, supporting web connections through a better set top box could go a long way to customer satisfaction.  Up, down, left, right just doesn't work anymore.  Revolutionize the set top box and the on screen experience or watch as more and more consumers switch to other sources.

Can Hulu Survive Its Owners?

For viewers seeking online sites to watch their favorite TV shows, Hulu has been a welcome addition.  Missed episodes or catching up on a series, Hulu can be a great site to visit.  But Hulu seems ripe for self implosion; why?, because it competes with itself.

Hulu is owned by broadcast and cable networks battling each other in the linear space.  To come together in the digital space seems only a recipe for disaster.  And one that looks to get even more dicey.  One of its four owners, the only one without a cable or broadcast network, Providence Equity, is looking to sell out its share to the remaining partners.  "The approximately $200 million payment would allow Providence Equity to double its investment. The firm contributed $100 million in 2007 to help founding companies NBCUniversal and News Corp. launch Hulu. Disney came aboard as a partner in 2009."

All the folks at the networks that started Hulu 5 years ago are gone.  Comcast's purchase of NBC required them to give up a management role and be a silent partner.  Can one really expect that those running Hulu today, Fox/News Corp. and ABC/Disney, really want to work together?  Last year, they tried to sell Hulu, but then changed their mind.  Hulu may be making money but at the expense of their deals with their cable distributors.  And while it may be better to take money in this new platform through Hulu, it is hard to imagine that they can mutually manage this partnership without a lot of arguing and disagreements as to strategy and execution of tactics.  Without a middleman like Providence Equity to referee those battles, one wonders post their withdrawal from the business whether the remaining partners can still work together.

Last point, if they can agree to come together, is it time to pursue CBS to join the Hulu team?  The big 4 broadcasters partnering to own the digital streaming landscape.  Not likely, but what if.

Web Upfronts Like The Early Days Of Cable

Cable Networks changed the video landscape for broadcast when they arrived on the scene.  Early on, broadcast networks pooh poohed cable.  Most offered short form content, lots of informercials, and little original content.  And what was delivered was everything from music videos to ping pong to old syndicated programming.  But cable networks kept chugging away, building content and creating their own award show to celebrate it - the heralded CableAce award.  Of course cable networks made it when they were accepted as Emmy nominations and soon after as multiple winners.  And broadcast responded by buying up cable networks.

Today, it is the web that is the upstart to cable and broadcast.  And like history repeating itself, they are pushing through with their own version of an advertising upfront and their own version of an award show.  But it is only time when the original web productions from folks like Netflix, Hulu, and others get accepted into the Emmy awards and Web TV is as viewed as much or more than a cable network.  They may be in the long tail now, but they are doing to cable networks what the cable networks did to broadcasters.

For Time Warner Cable, Data and Phone Matter Most

Time Warner Cable just released their quarterly financials and they confirm everything that has been speculated.  Operators may be losing cable subscribers, but they more than make up for it with broadband and telco customer growth.  The profit margin for cable distribution is eaten up by rising license fee costs, where the pipeline is a cash cow, already built and pushing profit like water through a faucet.

The broadband and telephone business have the best profit margins for Time Warner Cable and others; so that any gain more than offsets their cable sub drops.  It may also suggest that cord cutting as it relates to cable doesn't bother the  cable companies as long as the cord for broadband and phone remain attached.  TWC may have lost almost 100k cable customers in the quarter, but they added over 200k broadband and over 100k residential telephone customers.  As a result, their profit margin grew above expectations.  Frankly there is gold in that pipeline.

So shedding cable customers becomes less and less of a problem for cable operators.  There are other services that can better utilize the existing pipeline to the home.  It is why cable companies are adding security services to their business offerings.  The pipeline provides the conduit for communicating the security system back to base.  Cord cutting cable service; as costs for programming rises, it becomes a less profitable business.  The money is in the pipe to the home, not the content that runs through it.

For Consuming Content, Its All About The Pipe

Great article in Gigaom, entitled The Future of TV isn't TV, that should be must reading.  As far as consumers are concerned, its no longer about TV consumption, whether broadcast or cable, it is about their broadband and wireless access.  Ask any cable home that subscribes to the triple play of cable, data, and phone, and ask them which service is most valuable to them, the vast majority will point to their data or broadband connection.  The cable can go out and the TV can't get your favorite show; there will be grumbling till it is fixed.  But lose your broadband or wireless connection, and you can probably hear the yelling and screaming coming from the home.  Broadband is the most important product for the home.

The challenge as it faces government oversight is the same battle that has been around for years and years.  It is the intersection between content and distribution and whether these two businesses should have a common owner.  This discussion first came to head when movie studios had hard times getting their movies onto screens in local communities.  Studios that owned movie houses wouldn't let competing studios distribute their movies.  It became a legal antitrust battle that resulted in studios divesting themselves of theaters.

Today we have distribution companies also owning content.  Net neutrality laws tried to prevent distribution companies from showing favoritism to their content while slowing down the streaming of others.  It seems that antitrust permeates today new world of content and distribution.  "The two are now intertwined, so from a regulatory perspective the fight will now be about who holds the power in terms of relationships with consumers and in terms of their relationships with content companies." The author asks great questions to get to the heart of the battle and how to best serve consumer interests.  How much or little regulation we need is a political battle.  Some argue that a free economy and encouraging technological innovation will lead to solutions; others, that regulation is needed to protect its constituents.

The TV model has changed to a broadband one and content is being delivered to fill the demand.  How its distribution is enable, slowed down, or even denied, is what raises question for both sides of the problem.

Apple: Profit Taking Or Future Profit

The faster the ascent, the harder they fall; so seems to be the case recently with Apple and its stock price.  With its earnings call looming this evening, the stock price has dropped quickly.  Can Apple keep its momentum, how many more iPhones can they sell, and what is next in the pipeline? We should get some of those answers soon enough.   But unlike the internet bubble, Apple manufactures actual products, sells digital content and has a world to conquer.  One quarter may be slow...

But, the future for Apple remains bright.  I believe in the market predictors that see Apple's price rising to $800 or higher.  It is not just one product but the whole package they offer that causes customers to start with one Apple product and end up buying more.  Happy with your iPhone, buy an iPad.  Love your iPad, buy a Mac to replace your PC.  Love your Mac, buy an Apple TV.  And with multiple devices in the home, let the iCloud and purchases from your iTunes account bring content to each device.

So bring on the financials. At the end of the year when the next gen iPhone and other products are announced, Apple will once again be the technical and media darling of Wall Street.
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Post announcement - Another record quarter and Apple again delivers.  Looks like after close market has stock bouncing back.

Netflix Not Growing Fast Enough For Some

All companies seem to suffer from the same problem, the classic bell curve.  In its youth, the growth curve is steep; in its maturity, the growth slows and then declines.  For those companies that can spot the next new product or service, new growth emerges as company strategies shift.  Apple has found new growth with the introduction of new and improved product lines; Netflix has attempted to grow with its move from DVD to streaming business.  But for these and other companies, the question that shareholders and the stock market always ask is what will you do for me next?

In the world of media, Netflix's streaming business has grown to a size comparable to Comcast's cable subscription business.  At almost 25 million customers paying $9 or more a month, Netflix is not constrained by franchise or continent.  "The company is racing to add viewers to confront competition from Comcast Corp. (CMCSA)’s StreamPix and Verizon Communication Inc. (VZ)’s online venture with Coinstar Inc. (CSTR)’s Redbox. While Netflix may post a second-quarter profit, investors are focused on subscriber additions."  And there it is, that same question, what are you going to do next, where are you getting more customers.

While I don't own a position in Netflix, I do see that they have an advantage to others; they can operate internationally.  With content rights, they can go everywhere.  Streaming also enables a second stream of advertising revenue.  And a potential to push into e-commerce and other revenue programs.  Eventually subscriber growth has to stall, it is inevitable; the challenge is finding other revenue models and other businesses that start new growth trends.

Is NimbleTV The Next Generation Slingbox For TV Everywhere

There's a new service being talked about that could bring true TV Everywhere to the consumer, across any device, and without a set top box.  The service, NimbleTV, says on its website that they work with both content providers and content producers to accomplish that task.  To me, that means that the cost of the service is an additional fee to take your cable, satellite, or telco line-up and access it from the cloud.

In today's New York Times, NimbleTV is the next generation of Slingbox, as labeled by its former executive, Jason Hirschhorn.  "NimbleTV says it has the same functionality as a Slingbox and DVR, but without the actual boxes". But will the content distributors and producers accept this use of their product without some incremental payoff.  And like anything, those costs will only increase the total costs for content to the consumer.

Consumers do want TV Everywhere; they want the flexibility, the variety, and the access, so that content follows them and not the other way around.  But what they don't want is the cost.  Consumers are seeking ways to lower their bills, not raise them.  It is why consumers are flocking to You Tube, Netflix, and Hulu as lower cost alternatives that also give them mobility.  For those currently subscribing to cable, they want the added value of TV Everywhere, but not the added costs.  For them, their cable bill needs more value attached to it to accept the high costs of their cable bills.  Higher rates will only cause further cord cutting to these OTT alternatives.

Can NimbleTV find success?  If embraced by cable operators and networks, yes; but as they have yet to embrace Slingbox, I doubt they will find this next player a friend either.

Cablevision Brings Linear TV To The iPad And More

Untethered, but still required to be inside the home, Cablevision subscribers can now watch their linear TV without a set top box or big screen TV.  With an iPad, iPod, iPhone, laptop, or PC, the TV experience can now be watched in any room in the house.  Multichannel states "To use the software, a customer must have a subscription to iO TV and a Cablevision-supplied modem. (If a customer is not an Optimum Online customer, Cablevision will provide a specialized modem that allows access to the streaming TV apps but not the Internet.)"

The limitation is obvious, access is limited to the home.  For those that don't want to string a cable line to every room in the house, this feature brings a new benefit to the subscriber.  For others, it may not be enough.  For those that want access away from the home, "Dish Network provides similar functionality through its Slingbox-enabled products."

So far the Cablevision App has been downloaded more than 1 million times, indicative of a successful first step in bringing TV Everywhere to the customer.

CW Network Leading Push Away From Traditional TV

Terrific WSJ read today about how the CW Network is risking viewership on traditional TV to embrace new media.  With content clearly aimed to a younger, technology loving audience, the CW has recognized that its future growth rests with new media.  Like others before them, the CW must risk the loss of viewers in one platform for hopefully a bigger gain and more revenue in another. It is a risk Netflix also has been dealing with as it too has moved from a mail order DVD business to a streaming model.   Knowing that their audience is embracing mobile and web platforms and dropping their reliance on a cable subscription, CW is betting heavily on the strategy of getting its content quickly onto these other platforms.

While ratings on TV have dropped since 2010, views on Hulu, Netflix, and other apps have grown.  And it appears that revenue from these "deals has helped partially offset losses that in recent years had topped $100 million a year".  Embracing new media at the expense of the old may have short term problems; still, recognizing  that the consumer  has moved to these other platforms and that they need to be accessible, is in the long run a very smart move.  Like everything else, the question that looms is timing.

Keeping one foot in the old platform while stepping forward in the new comes with many dangers.  Old technology does not want to compete with the new and seeing content available in both platforms is not well received.  Cable operators of the CW will fight back to protect their "exclusivity" of content from online.  How much is shared and how recent is the content that is on TV before it hits online will result in plenty of fights when license agreements come up for renewal.  With the CW owned by both CBS and Time Warner, a larger fight could be looming.

There Is Money in VOD

Linear TV has  taken a backseat to on demand viewing.  Except for live programming, especially sports, waiting for 8PM for prime time programming to start in order to watch is ancient history.  Now we have VOD and DVR to watch what we want, when we want.  And as more and more households have embraced this technology, the money trail has certainly followed.  "With free video on demand usage continuing to surge, Rentrak estimates the platform represents at minimum, a $1 billion advertising opportunity."  Good news for content companies seeking a ROI from these different platforms.

Of course, all this on demand viewing is not limited to the TV screen.  Consumers also want to consume this content on other devices, including laptops and tablets.  This quoted ad dollar number may be limited to the TV screen which means that their is more ad dollars at play.  And at the end of the day, if you create great content, you will find a large audience willing to consume it.  The more flexibility you offer on where it can be consumed, linear, on demand, online, the more you can monetize it.

The iPad Is A Game Changer

The iPad has changed my media consumption behavior; but then again, so did my iPhone.  For each platform, my use of my previous technology has changed.  Where I once used the laptop for social media, gaming, email, and online viewing, I now prefer the iPad or iPhone.  For me, the iPad tablet has been the second screen that has overshadowed the traditional TV; but it only replaced the laptop before it.  That the study is suggesting that tablets are "an alternative to television and to other devices for users to watch full-length TV episodes" is true.  It is lighter than the laptop, easier to hold, and possesses a great screen for personal consumption.  The TV set continues to retain its hold for family or group settings with multiple eyes watching.  A tablet won't ever replace that experience.

The iPad is a game changer  because  it does an enable a more personalized, individual experience.  Great screen for game-playing both in size and clarity, touch screen for a different type of control that a mouse can't offer, and a jaw dropping amount of content, from apps to web browser, that provides what can only be described as an infinite number of opportunities.  And yet more continue to be developed every day.

Sure, it can work for full length episodes if that is what you are seeking; for others, it may just be You Tube clips or a downloadable game.  For me, it is a perfect way to watch my out of market games on MLB.  And yes, the big screen TV may still be on and occupying a space as background noise and the occasional look up from the iPad to see what was just said.

Are iPads and other tablets a threat to the TV platform; yes and no.  Yes, if your content is only available in one form on the TV, and No if your content is accessible across multiple platforms and in multiple forms.  The synergy of a full length show with previous seasons online and social networking and gaming connected to the video can make for a more valuable experience.  But for those that occupy their space in one platform as a one trick pony, online is a threat.  But it has been a threat long before tablets came along to overtake the laptop.  If this study has just discovered this trend now, then they are frankly too late.

Consumers Want A La Carte Programming So They Can Pay Less

Why the threat of cord cutting?  It is because consumers have grown tired of watching their cost of cable explode and are seeking alternatives to a cable subscription.  Those consumers in markets with telco overbuilders like to play the game of switching, or at least threatening to switch, in order to get discount pricing from their cable operator.  Others, according to the latest survey, would rather pay just for the channels they watch.

"U.S. consumers would overwhelmingly prefer to pay for just 19 TV channels at $1.50 a pop than their current multichannel packages, according to a new survey.  RBC Capital Markets found that 92% of over 1,000 respondents are interested in a a la carte TV offering that would cost them far less than the $84 they pay for access to at least 91 channels on average."  Unfortunately, a number of the notable networks would want much more than a $1.50 for their service.  And cable operators don't have the ability to unbundle networks and sell individually because of contractual issues.  Most networks require that they be offered to the largest group of customers and that their reach exceeds 90% of total homes that subscribe.  In today's marketplace, a la carte offerings by a cable operator are not realistically possible.

So consumers seek other alternative means to watch programs that they want at a price point that they are willing to pay.  Hulu just announced that their premium subscription service, priced at just $8 a month, already has over 2 million subscribers.  Netflix is offering its own low priced streaming service as well.  What percentage of these customers are also cable subscribers was not released; it would be interesting to learn if these customers are cord cutters or not.  Are these services complementary to cable or indeed upstarts?

Consumers may want to find alternatives to their cable subscription or they may simply want to complain and won't really act to cut that cord.  A la carte sounds like an ideal solution but it won't happen in the current cable operator model.

Don't Fret An Apple Stock Drop

To all those shareholders of Apple, don't sweat the small stuff.  We have seen a huge uptick in Apple's price per share of stock so it is not unreasonable to expect some profit taking.  But just because the stock is down 4%, it still has too much upward potential to not remain optimistic.  By the end of this year, we should see the release of the next iteration of the iPhone, and everyone expects it to be called the iPhone5.  Second there is talk of a smaller screen sized iPad to compete with Kindle and the Nook.  Third comes the release of the secretive TV many assume will be called the iPanel.  And whether it comes end of this year or next, it is in the pipeline.

But perhaps most exciting is what Apple could do with its access to company credit cards, an aggregated platform for apps, and a product line capable of making quick purchases.  "The person with hundreds of millions of stored credit cards wins big. There are only two people on the planet who have stored over a hundred million active credit card numbers that I can think of: Apple and Amazon.  One is in commerce and one isn't -- yet.  Apple iPay "  That could be the next Apple homerun!

RIP Chris Lonergan

I am very saddened to read the news of Chris Lonergan's passing late last week.  He has been an important staple in the cable industry and someone who I met very early in my cable days.  As a fellow programmer, I knew him as a fellow traveler, at cable shows, at system visits, and at association meetings. And the more I got to know Chris, the more I respected him.  He was always well liked, and passionate about his work.  He was a rock, the ideal embodiment of what a successful affiliate guy was meant to be.  But his true character emerged as he learned about his medical issues and dealt with his problems.  Brave and hopeful.

When I last saw him at a cable show, after he had bounced back and hoped to be in remission, he maintained a headstrong attitude that he was going to beat this thing.  Outwardly he may have looked weak and tired, but inside he had a resolve and will that could not be missed.

His family has lost a good man; the cable industry has lost someone that made a lasting impact on everyone he  touched.  I am proud to have know Chris; I wish I had known him better for he made me a better cable guy in trying to match his energy and work ethic.  With his death, the world is worse off.

Nook With Light Costs How Much More?

The latest tech news has Barnes & Noble's Nook updated with an internal light to read in the dark.  And the cost for this added feature is an incremental $40.  WHAT?  No outrage, no laughter.  Now I am a big fan of B&N; I love their bookstores and my wife owns a Nook.  Unfortunately, she has gotten so angry with it unable to keep a charge for longer than a few days, even with the wireless off, that she has gone back to print.  Still, I believe it is a terrific device, yet I am moving toward the iPad and Nook app as opposed to an e-reader.

To read that the update model with internal light is priced a whopping $40 bucks more, especially as the non-light devices are even being given away with new newspaper subscriptions, makes me wonder if B&N has thought their pricing strategy through thoroughly. No other changes to the model, no bigger battery, no new screen clarity, just $40 more for a light.  Given our current issues with battery life, a light must lead to more drainage of the battery and an even shorter life per charge.

Will customers flock to the new light emitting device or simply add a clip on light to their device for less than $10?   I think the price point is problematic and I think it will either get people to buy up to the tablet or back down to the basic.  This Nook goes on sale next month so we can only wait and see if there is actual customer demand or not.

Digital Growth Driving Media Spending

It seems that digital pennies are becoming digital dollars.  The pace of digital spending continues to grow and there are more opportunities than ever before for media to target efficient audiences and effective reach.  And this annual growth is huge.  "The fastest growth by far is in Consumer Internet & Mobile Services, tipped to swell 18.1% in 2012."  Certainly the pace is poised to accelerate as other segments embrace the web.  Print publications, newspapers, magazines, and books, are pushing more consumers to the tablets and computers.

In fact, David Pogue's article in The New York Times discusses plans for the five big magazine publishers to come together for a buffet of digital magazines that consumers can receive for a low monthly price.  While the price point, $120 - $180/year, doesn't yet sound attractive enough for consumers to purchase, it will initially reach the early adopter and heavy users of multiple magazines as they test the price elasticity for their mags.  It is a good start.

Consumers are becoming more and more accustomed to paying for digital content, whether it is music or e-books, movies, newspapers, and magazines.  As advertising has been everywhere, consumers are not even surprised when it invades devices like our mobile phones.  Whether we have become so overwhelmed by the number of messages flying at us that we ignore 95% or more of them is a topic for another day.  How marketing messages break through the clutter to gain are attention becomes the challenge for today's marketer.  But as the article forecasts, dollars are being spent.

Facebook Should Keep Buying Companies

Terrific article in today's Wall Street Journal posing the question in its headline, What Facebook Should Buy Next.  Company acquisitions, both for the acquiring company and the one being acquired, requires great work to integrate and grow.  Different cultures, different core missions, different executives all trying to blend together into a new union with a common goal.  Some acquisitions are successful; others like Fox's acquisition of My Space, prove disastrous.

Google is figuring out what they need to do with their acquisition of Motorola Mobility.  The former is a search engine and open software company, the later a hardware manufacturer.  Time will tell whether a blended company will work or if Google will sell off the pieces that don't matter to their business.  Facebook will now take on Instagram; but the question posed for Facebook is what else should they being doing to grow.

I love the direction that the author is taking.  If content is king and if Facebook has rich data on users, the next piece is the content to drive the advertising engine.  "Facebook should buy ABC, CBS and NBC. It should buy the New York Times website and the satellite radio broadcaster Sirius XM. It should buy a stake in Microsoft's search engine Bing. It should buy Pandora, Spotify, Hulu and any other digital platform where Facebook can follow users and hit them with targeted ads using their Facebook data without it seeming like Facebook is doing it."  Add to that any number of large cable networks too; the end result is that owning the content with the social engine of Facebook could be a boon to advertisers.

The question is can Facebook do more with their data by owning content then they do now as a third party linking to all content across all platforms.  Does ownership imply that their are other hurdles that could be best  managed when linked together by common management?  If it takes ownership of a content brand to unlock that value, then it sounds like a good investment.  But if it can't be better quantified, than perhaps the current relationship just needs to be further tweaked and improved to unlock that consumer information to the content they consume, owned or not by Facebook.

Cable Pricing Itself Out Of The Consumers' Budget

The rising cost of cable programming, especially sports networks, may be to blame for the high cost of cable subscriptions and the drop in consumer purchases.  According to NPD Group, cable monthly fees have risen on average 6% annually while consumer income has remained flat.  "The dramatically rising cost of pay TV could lead to more consumers cancelling service in favor of more affordable over-the-top video services and free-to-air broadcast, NPD said."

Certainly consumers have sought ways to lower their costs, from downgrading services and switching to lower cost providers.  At the same time, ask a consumer which cable service they couldn't do without and it would be broadband.  Consumers may drop their cable service for broadband only and take advantage of over the top programming through web based devices.  Cable operators may be watching their business model change from pushing cable programming to pushing wire and wireless connectivity. With profit margins favoring broadband subscriptions, a gained broadband subscriber can more than offset the loss of a cable subscriber.

Xbox and MLB.TV Don't Go Well Together

I have a beef so I will use today's blog to complain about Xbox and MLB.TV.  First Xbox, while it is technically my box, it was bought from my credit card, it was a gift for my son.  But the result of being honest and putting his true birthdate on the account has been more problematic than helpful.  Microsoft and their Xbox machine may think that they are preventing underage usage of certain apps and games, but it only works to prevent all from enjoying the full capabilities of the machine.  And according to Microsoft, birth date once entered can never be altered.

Some may argue that it provides security from buying or playing certain games.  That is not true.  Those in the know all ready know to not use a true birth date; honest folks only learn later that they have lost their own parental right to determine what their child can or cannot play.  Game Stop asks me each time my son wants to buy a Mature game if I approve; Microsoft does not.   And it is my credit card info and my password that should enable me to allow or not allow any online download.

So my recent hassle with Xbox concerned our MLB.TV subscription.  I can play my baseball games on the iPad but to play them on the Xbox was not nearly as easy.  It seems that my son's birthdate has once again stopped us from enjoying content.  You see, no one under the age of 18 can have an MLB subscription on Xbox.  My MLB subscription, my son's LIVE  Xbox subscription don't match.  Who knew that baseball games were now considered "for mature audiences only".  And so, we were back to watching the baseball game on the iPad and disappointed that the Xbox MLB TV app would not function properly.

So my advice to all parents buying a Xbox for their child; use your birthdate not your childs.  Make them 40 and then you can be the one to ultimately decide what you want them to play and watch on their Xbox account.  And I am left trying to teach my son not to lie, except to Xbox.

Apple TV To Be Called The iPanel

We all love Apple rumors.  The latest is that the Apple TV will be called the iPanel.  Love the name but the challenge will be in what kind of content it can offer without the need for a set top box behind it, and whether the consumer will want to buy it.  The article suggests a price point of $1250 with an expectation that 2 million units at a 30% profit margin could be sold.

At the same time, rumors are that a smaller screen iPad is on the drawing boards.  Halfway between an iPhone screen and current iPad, a mid size screen at a lower price point could be quite appealing.

Cable Nets - That Was Then, This Is Now

Today's list of cable nets weren't always known by their current names.  Some moved from names to letters, others from one name to another.  And for some, the names and focus continue to change.  The most recent news comes from Discovery Channel who is giving a name change to Planet Green.  Prior to that  incarnation, they were known as Discovery Home and beginning on May 28, they will be known as Destination America.

Will this new brand name finally catch hold, we can only wait and see.  In the meantime, here's a list of other networks that have changed their name.  It is not a complete list so go ahead and add other names in the comment section. As too many nets changed from names to initials, I will exclude those from this list.

Then And Now
Discover Health ... OWN
Movietime... E!
Financial News Network ... CNBC
Court TV ... TruTV
The Comedy Channel and Ha! ... Comedy Central
SciFi ... SyFy
Romance Classics ... WeTV
ZDTV ... TechTV ... G4
CBN Cable Network ... The Family Channel ... Fox Family ... ABC Family
CNN2 ... CNN Headline News ... HLN

So long Planet Green.  We hardly had any time to watch ya.

Does Too Big Help Or Hurt The US Economy?

Today's opinion article in the Wall Street Journal, "How Huge Banks Threaten The Economy" could easily be applied to every other oligopoly operating in the economy.  Certainly, we have all felt the effects that the banks have had on the housing market and mortgages and how the US Government was needed to protect them as they were "too big to fail".  The editorial position is that too big is anti-competitive and that small can "improve competition and market discipline, important forces that were reduced as the industry consolidated."

So should this movement to limit consolidation be applied to other industries?  If we are consistent in our approach, then shouldn't the same principals be applied to the wireless industry.  The FCC did stop AT&T from acquiring T-Mobile but they haven't stopped Verizon and AT&T from having the majority of the market.  Wasn't the break up of AT&T into the Baby Bells that first step only to find the Baby Bells merging into a bigger powerhouse than the original parent.

We've seen consolidation in the airline industry too.  United has merged with Continental and USAir wants American.  The result, less competition and higher fares.  Like the banking industry, the airlines have little competition to alter the marketplace.

And what about the consolidation of cable operators.  Time Warner Cable just acquired the assets of Insight Communication.  Comcast, Time Warner, Cox, Charter, and Cablevision have risen to control almost the entire marketplace.

Each of these industries and company leaders would tell you that big drives employment, innovation, cost efficiencies, and better products.  They would argue that government interference only hurts growth and profitability.  Of course in the case of the banks, without the bailout, most may have gone bankrupt and the economy might have been ruined for a decade or longer.

Limiting the size of companies within industries may be a noble attempt, but eventually the big fish always eat the little fish and subsequently keep getting larger.  Just like the breakup of Ma Bell tried to make the communication smaller, it eventually led to consolidation again.  We may think that small is preferable; but eventually, companies either get bigger, get acquired, or go out of business.

Clash Of The Morning News Titans

For those that are fans of the morning news shows, the big story this week has been the return of Katie Couric to a morning co-anchor role; this time however, it is with a different network, ABC and Good Morning America. NBC's Today Show countered by bringing back another former host, their own Meredith Viera, as well as Sarah Palin.  And CBS, pushing with a rare guest  appearance by Oprah Winfrey.  Who needs soap operas when the drams is on which morning show will win the ratings for the week.  Will NBC finally lose its ratings dominance after an extremely long period on top of the leader board?

My wife and I are regular Today Show viewers. But frankly, we have gotten a little tired of the format.  We are in want of more news at the 7 am hour but instead get hit with more programming oriented or other non news interviews.  The personal stories, especially when Ann interviews a guest, have become hard to watch.  She takes on a different voice when she wants to show empathy, but frankly I find it more cringe worthy.  But the Today Show problem is larger than Ann.  It has become about hype not news stories.  The personalities of Al and Ann on screen have  become  larger than the news itself.  And I have struggled to stay tuned in.

Seeing Katie back on the air caused me to switch over and watch.  But beside her, the stories and the way they were hyped and presented, looked almost identical to the Today Show approach.  ABC may see a lift this week, but I don't believe that many will switch over permanently from NBC.

Phone Hacking Gets James Murdoch To Resign, Is Rupert Next?

The British phone hacking scandal that resulted in the closing of News Of The World has claimed another victim.  This time it is BSkyB Chairman James Murdoch, son of Rupert Murdoch.  The phone hacking issue continues to have legs and has not been forgotten; rather, it may truly indicate that more was going on than was first announced.

"The phone-hacking revelations have led to an ongoing public inquiry, conducted by Lord Justice Leveson, into the culture and ethics of the British press.  Mr Murdoch and his father Rupert are expected to give evidence to the inquiry in the coming weeks."  Could that lead to another resignation?  Perhaps more was known from the  top leadership than initially announced.  We can only watch as the drama continues to unfold.

Hey Mel Karmazin, Why Is Everybody Picking On You

As Rodney Dangerfield liked to always say, "I get no respect", it seems that Mel Karmazin may feel the same way.  Known for his very public fight with Sumner Redstone when he headed up Viacom and now he is facing another fight, this with John Malone.  When you are owned by shareholders, there is always a risk of loss of control, unless you hold enough of the shares; in this case, it may be John Malone, who has that control.

A few years ago, Malone was the white knight, coming in to rescue Karmazin and Sirius from the clutches of another player, Charlie Ergan and Dish Network.  Again, someone was trying to push Karmazin out but at the last minute Malone arrived to save him.  Now as Malone turns from white knight to king, it is his turn to take something away from Karmazin.  Will Mel ever get a break?

John Malone has good reasons to want and pick up Sirius.  "If Liberty gets approval, which could be a lengthy process, the company would be able to use its existing stake to take control. Approval also would let Liberty more easily lift its holding in Sirius above 50%, a move that offers Liberty lucrative tax advantages."  How this plays out and what happens next to Karmazin remains to be seen.  But Karmazin likes to be in charge and if Malone takes control, it is likely that once again, Mel will be looking for the next business to manage.  One piece of advice; own it, or someone else will again try to disrespect you.  Thanks Rodney!