Apple Wins Patent Fight Against Samsung

Apple has won its case in court and the jury has agreed that Samsung did indeed infringe on a large number of Apple's patents.  And while the award damages exceed $1 billion, the court battle is likely to continue while the appeals process takes over.  At the same time, Samsung and other competitors may just have to go back to the drawing board to design tablets and smartphone devices that don't copy Apple.  Will this improve competition or limit it? Could it lead to more innovation or slow it down?

This court fight may have hurt Samsung a bit, but it is sure to affect Google and others as well.  "The verdict in the trial hardly concludes the legal battles over patents among companies in the mobile business. There are dozens of such cases winding their way through the courts; Samsung and Apple have also been battling in Germany, Australia and elsewhere. Even so, Samsung remains a major supplier of components for Apple products"  How ironic, that Samsung may have lost the fight but is also a winner when it comes to producing pieces for Apple devices.

Sometimes I Like Twitter, Sometimes I Don't

Overall I like Twitter today.  When it works, it provides me information, breaking news, updates, and, on occasion, humor; but there are times that I find it bloated with hubris and nonsense that  takes up space and floods the  stream with silliness.  The good news is that one can limit who you follow in order to flesh out the good from the drivel.  Still, when sponsored content is automatically posted, out of my control, it reduces my enjoyment of the service.

But I may be the minority as many enjoy the social networking that comes from sharing pictures, ideas, locations,  etc. with their minions.  But now it seems that Twitter is breaking those ties with other social networking sites.  I recently found that Twitter and LinkedIn are no longer connected.  But more is happening "As Twitter shuts off the access that services like Instagram and Tumblr used to have to its valuable “follower graph,” it is also promoting the new relationships it has with media players like NBC. Between them, those two moves speak volumes about the company’s future."  Will users like this transition and will it make for a better experience (as well as more profitable for Twitter) or will it turn away fans to the Twitter service?

The digital world is becoming a multi-platform play with media brands.  Promotion as a means to drive usage on its on its media sites, for viewership, readership, and subscription.  Communication has moved past the consumer talking to each other toward business driving consumer behavior.  We can only watch to see if consumers accept this switch or seek other solutions.

Digital Advertising Share Larger Than Newspaper Advertising

In sports, we always marvel when a record is broken or a player rises through the list verse other players.  In advertising, those records are seen by the size of revenue and the share verse other media choices.  And when a rookie or new platform outpaces his or her  rivals, that tends to be a big story.  Today, that story is all about digital advertising.  "This year, not the next, will be the point at which digital overtakes newspapers' share of the global advertising market to become the second largest medium, according to the latest spending forecast from Carat.  Digital, which in Carat's view comprises search, display, online video, social media and mobile, will take a 15.3% share this year with newspapers on 14.4%."  It is clear that those digital pennies are now looking like digital dollars.

Television continues to remain the number one platform for ad revenue.  Still the percentage of growth in each of these respective media platforms, TV, newspaper, magazine are somewhat flat while digital is growing at double digit rates.  With the rise in production and sales of tablets and smartphones, it is only natural to expect that the rate of digital growth will only continue to grow.   And who knows, perhaps one day digital could also overtake TV.

Hulu Update Despite Ownership Issues

Hulu's online view is getting a makeover and the new look and functionality should be good news for viewers.  An advance look can be found at  new.hulu.com.  And here's their video:



As to the ownership quarrels, well that will be news for another day.  Good to see that the day to day operations are still moving forward.

Broadband Not Everywhere

If you live in a big city, not to worry, you probably have not only broadband access, but perhaps even a second provider; however, if you live in the rural parts of this country, you are not so lucky.  According to the FCC, "approximately 19 million Americans 'in areas still unserved by terrestrial-fixed broadband' and concludes that for that, and 'other reasons,' it must conclude 'that broadband is not yet being deployed to all Americans' in a reasonable and timely fashion.'" In addition, of those areas getting broadband, over a quarter are not getting the speeds of 100 Mbps or more today.

For the cable operator, the argument is that their rollout has been moving along at a fast pace, the FCC believes that accessibility and speed goals have not been reached.  Broadband, it seems, has  been treated like a necessity, equivalent to food, shelter, and clothing.  It has joined the ranks of telephone and cable TV accessibility.  In the private enterprise, the cost to string a city, with many homes passed per mile verse rural america where you may be lucky to pass 1 home every 10 miles, demonstrates the challenge of rolling out broadband service, cost-effectively, to a widely dispersed geographical base.  As broadband gets perceived as necessity, and not luxury, the demand to speed that rollout simply grows in the public government's opinion.  As noted in the article, "cable operators and others have made [a major impact] toward deployment and adoption, including 'billions invested by the communications industry in broadband deployment, including next-generation wired and wireless services'".  Unfortunately, today, our patience seems to be wearing thin.

ABC Pushing Nightline Back for Jimmy Kimmel

In 2013, the Tonight Show and David Letterman will face new competition; ABC is moving Jimmy Kimmel Live up from midnight to 11:35 to compete head on.  Good for Jimmy Kimmel, bad for the fans of Nightline who won't be able to stay up till 12:30 am to watch their news program.  "As a consolation prize, Nightline will resume a prime-time edition Fridays at 9 staring March 1, and will expand to 30 minutes nightly."

Why January and not with the start of the Fall premieres.  You can thank the presidential election for that; political news junkies win.  Nightline performs when certain news stories emerge above the typical level of noise.   Nightline provided alternative programming on broadcast that truly differentiated from the other talk shows.  Now Kimmel will be going head to head against Leno and Letterman and news audiences will have to seek other ground from cable and online alternatives.

Will Kimmel take more from Leno or Letterman and where will the Nightline audience go?  The fight heats up January 8.

TiVo Adds Another Small Cable Operator To Its List

Can slow and steady win the race?  TiVo has announced another cable partnership, this time with GCI, the Alaska cable operator, with access to over 122,000 subscribers.  How many will upgrade and take a TiVo DVR set top box remains to be seen, although most consumers don't tend to switch out their box till something goes wrong.  So the effect on growth may prove minimal given the small base.

GCI can now be added to the list.  "In the U.S., TiVo also has agreements with Charter Communications, Suddenlink Communications, RCN and Grande Communications." Of course there is also DirecTv, but missing are the other notable names from the top cable distributors.  With a need to attract millions of cable subscribers, a GCI partnership is nice, I just wish it could move TiVo's subscriber needle more.

An Uncertain Future For Hulu

Whether it is in business or in the kitchen, the notion that too many chefs spoil the broth comes into play.  It seems especially true when these multiple owners have big input and even larger expectations to the business at hand.  A single owner, like a single chef, may take recommendations and other expertise into their decision making process, but ultimately, the final decision is a singular one.  So we face crossroads with businesses who face changing landscapes with multiple owners with different viewpoints.

Case in point, Hulu, and their majority owners News Corp and Disney.  NBC is also a major owner, but it's ownership to Comcast requires them to be now a silent partner.  As Provident Equity sells its shares, speculation is that so will it's current CEO Jason Kilar.  And with that sale could come his departure. "A second consequence of the Providence buyout is that the change in the ownership structure will precipitate significant adjustments to the content licensing agreements that give Hulu its most valuable asset: next-day access to primetime programming from the TV networks owned by News Corp. and Disney." But with two different philosophies regarding online video content, the future for Hulu could become murkier.

That Hulu is mentioned constantly with being a driver of cord-cutting could determine the new shape of how and when content is made available.  The Variety article asks some additional key questions facing the future of the company, including what kind of exclusivity will they get, what about international expansion, and how best to build additional revenue.  Can these media giants work together when they are historically competitors on other distribution fronts? Without key leadership and another owner that can balance the opinions of Disney and News Corp, conflict may interfere with progress.

The Long Term Fate Of Discount Deal Sites

I was recently asked about the business model of Groupon, Living Social, and other discount deal sites. The question posed was why would businesses discount their service AND pay a fee on top of it to advertise the fact.  Printed coupon book companies charge to print discounts, why shouldn't websites.  And maybe the reason coupons work and websites don't is that people forget to tear out or hold on to the coupon when they get to the store.  Pre-purchasing on the website makes them remember to use it.  Pl-us the discounts on these websites seem to be bigger to capture any substantial interest.  But does it drive new business or simply give existing customers a cheaper price to shop?

If the stock price is any indication, these website models aren't growing.  "Groupon Inc.'s shares slumped to $5 today — a new low that borders on penny-stock status — as investors continue to flee.  Top on the list of concerns is the company's slowing revenue growth, which is a problem for an Internet company whose story is supposed to be all about growth."  Slow growth in the web, yikes.

In general, websites are under scrutiny.  Like Groupon, Facebook is under pressure to perform for its shareholders as well.  Whether for these two companies and others like them, the focus is too short term or that the long term future bleak, remains to be seen.  For now, how Groupon can grow its revenue base without crippling the businesses that use it to reach consumers, remains to be seen.

Would It Matter If Your Cable Box Came From Apple?

Since the Steve Jobs bio came out, there has been speculation that Apple was going to enter into the TV marketplace; a new manufactured television or more refinement to Apple TV.  Well the news today is that Apple has  been talking to the big cable operators about an Apple branded set top box.  "Apple is wooing cable operators for an Apple-branded set-top box for live TV and other programming, according to a report."

Today cable subscribers rent their cable boxes; the challenge would be selling consumers a set-top box.  Others, like TiVo, have tried to enter this space with a branded, beautifully built, consumer friendly box, but cable operators have made it harder to easily integrate them.  The CableCard is a lousy solution.  Still TiVo has made slow and steady inroads with some operators. Google has entered the set-top box race with its purchase of Motorola but has yet to do anything to integrate Google in those boxes.  So one wonders whether it would make any sense for Apple to jump start their push into cable by purchasing Scientific Atlanta, now owned by Cisco, or even TiVo.

With cable operators contending with cable subscriber drops, an ally like Apple could help make broadband and cable a better integrative experience, encouraging consumers to want to continue to have both a broadband and cable subscription.  Apple's ability to integrate with its iPad and iPhone could make having an Apple set top box a must have device.

Is More Cable Network Consolidation In Our Future

We've watched as cable operators have merged and the landscape is dominated by a few distributors.  The list of departed cable operators is long including American Cable, Continental, Knology, Insight, and many others.  Today the top 5 operators dominate the country, With Comcast and Time Warner Cable accounting for most of the country. 

Consolidation is happening on the other side of the aisle too, in the content landscape.  Independent cable networks are few and far between as networks have been bought up into bigger media groups.  The latest rumor is that Scripps Networks Interactive, home for HGTV and Food Network, could be on the trading block with Disney the likely buyer.  "Already, Disney is in the process of proving that in contrast to media peers like News Corp, Viacom and Time Warner, it benefits from being a media conglomerate with a pool of assets that includes broadcast and cable networks, movie studios, theme parks and resorts."

It is the economic order as big fish continually buy up the little fish.  Certainly deeper pockets can help a smaller network to grow more rapidly.  It comes with hardship too as  network identities often have to broaden more and more to capture larger audience share.  Disney has done well so far, according to the report.  "In a media industry filled with bad mergers, broken synergy promises and assets that perform better independently, Disney is judged as having succeeded in its acquisitions of Marvel and Pixar, giving investors reason to believe that they have uncovered a rare winning conglomerate formula"  And companies that can successfully find synergies across their businesses are able to better exceed their goals. 

Competition in Tablet Space Intensifying

The wonderful thing about the economy, especially when there are more than a few competitors pursuing their share of the market, is watching how it follows general marketing principles.  Specifically in the tablet market, you have your market leaders pushing their differentiation strategy while others use a low pricing strategy to gain market share.

"New stats from market research firm IHS iSuppli show Apple’s iPad surging ahead of other media tablets to gain a 70 percent market share in the second quarter of 2012."  But not resting on their laurels, expectations are that a mini iPad will be announced  shortly to add to their product line.  New entrants like the Microsoft Surface may cause a buzz while Samsung is banking on growing its share of the Galaxy and Google with the Nexus7.  And of course there is the Kindle from Amazon and the Nook from Barnes & Noble.  In the case of the Nook, they hope to grow business with a timely cut in their price just as school is about to begin.

The joys of a crowded marketplace, inciting constant innovation and pushing the others to keep their eye on the prize.  It should make for a fun Holiday Season as each of these companies sell their benefits to the consumer.

What's A CD, Teens Prefer Online

My son and I were walking through our local mall and he spotted a new store across from his favorite, GameStop.  It was simply called The CD Store and my son wondered why.  With access to songs through iTunes and YouTube, a physical CD isn't something he even thinks about. And according to the Nielsen research, he is not alone.

And for 17 and under, You Tube heads the list of preferences.  "In addition to treating YouTube as a de facto free music service, young people said they are less inclined than those 18 years old and up to listen to CDs or the radio."  The chart in the Wall Street Journal does offer some other interesting observations.



For all age groups, CDs ranked higher for usage than other media platforms, both new and old; higher than Sirius, higher than Facebook, higher than TV (Take than MTV), and even higher than Pandora.  Still it is important to note that this is a moment in time and not a trend analysis to indicate the direction of usage that teens are taking.  As we all know, they are a fickle bunch and can change quickly for many reasons.

That the article suggests that CDs are done, they are less used than even radio for teens. For adults, CDs are still a tried and true formula and perhaps that is why a CD store has popped into our mall.  Adults rank CDs second behind radio in the survey.  Ahh the older generation loves their old fashioned technology.

Does Liberty Want To Sell Starz And Is Comcast A Buyer

Liberty and John Malone love to unlock the value of a company by spinning it off into its own separately traded public company. It has been a strategy that seems to serve them well.  With the decision to spin Starz into a separate company comes speculation that Malone might actually be willing to part with the pay television network.  According to the article in Ad Age, the list of possible acquirers is growing including News Corp, Viacom, Time Warner, Netflix, and Comcast.  But is Liberty really looking to sell this asset and does it make sense for any of these "media giants" to acquire it? At the right price, almost everything can be bought.

 

Dish Network Keeping AMC Off The Air

Whether it is a license fee rate issue or bad blood regarding a lawsuit around Voom, Dish Network has decided to not carry AMC and its other networks, including WE, IFC, and Sundance, on their line-up. Clearly there are different sides to this story. If a decision not to carry certain networks with the result of lowering the monthly fee to consumers works, then other carriers may seek out this strategy to account for consumer price sensitivity.  If enough consumers complain or worse, switch to another provider, Dish may feel the bite and re-engage in a negotiation with AMC.  And other operators will figure out new ways to be the aggregator of all programming.  The fight is on.

AMC is certainly trying different ways to talk to the Dish consumer and get them to act.  One such tactic caught my eye.  I've embedded a video that is both humorous and subtle.

If you want zombies off the street and back on the AMC TV show, The Walking Dead, then this will certainly help.  Enjoy!

What's It All About.com, Alfie/New York Times

The challenges of a media company is deciding what you are and what you want to be.  And sometimes trying to get out of your own way can cause dysfunction among the different businesses.  For the New York Times, it was their hope to augment their print media empire with the purchase of About.com, a digital content company.  In the early years, About brought profit to NYT, but recently, it has likely been ignored as NYT focused on its own subscription and advertising issues.

Perhaps some of the blame for About has been "because of a change in the way Google handles search results. That change made About.com content harder to find."  For me personally, I found the information from About  either dated or so basic to not answer my questions.  I most recently tried to find info on gas grills and sought out About for rankings, ratings, and general info on types of grills.  I luckily found what I needed through other websites.

I remember when About first appeared.  It was the leader in the how to website category, offering tons of information from its experts.  But whether it was the change in Google search or the lack of new and updated information across categories, About.com became less relevant.  With its planned sale to Answers.com, the New York Times can focus back to its core business and plans to turn themselves from the print leader to the online news leader. And with new management to lead it, About can return to a leadership position.

Liberty Media Keeping Busy

Back in the day when John Malone was heading up TCI and I was selling a small cable network to cable operators, I was taken with the style and substance of the man.  I heard him at cable conferences, read about him, and watched as he successfully sold TCI and started Liberty Media.  Since then, he has continued to do what few others are able to do; unlock the value of his company by purchasing into companies and spinning them out into separate businesses.  He continues to do it today as his plan is to spin off his ownership of Starz into a separately traded company.

"Liberty Media, based in Englewood, Colorado, has used tracking stocks and financial transactions over the years to pursue tax benefits and make its diversified assets more attractive to shareholders. They included the separation of Liberty Interactive (LINTA), owner of the shopping network QVC."  He has also done it with Discovery Networks and his next plan involves Sirius Satellite.  As Liberty moves to become the majority owner, he is ready to take those shares and spin them out as well.

For now, it seems to be the ongoing strategy of Liberty Media to be the holding company through investments in other brands.  He takes them, grows them, grows his ownership in them, and then like children, kicks them out of the nest into separate companies, all with Malone ownership behind them.  Good news for investors that like to watch their stock holdings expand through spin offs.

Facebook Faces Concerns On Size Of Its Customer Base

When is a customer not a customer?  How many times can you count a customer?  Simple questions, but as we are finally learning from Facebook, not all is what it appears to be.  "In a quarterly filing with the Securities and Exchange Commission, the social media company said that as many as 83 million of its accounts are fake." Out of the latest number of 955 million subscribers, that  is a whopping 8.7%.  In addition, 5% of the accounts are duplicates and another "1.5 percent of its accounts are likely spam or accounts set up for other malicious activity."  So all in, almost 15% are not true uniques.  And that is what is uncovered today.  How many set up pages for their pets or use different email addresses for different accounts. And of the true accounts, how many are active and how many are DOA.

Obviously the total remaining number is still large and valuable to marketers.  But the bottom line is for businesses to measure its ROI, it needs to have real numbers that can be analyzed properly.  For now, the stock market is concerned as subscriber growth has slowed and the false accounts are being separated from the real ones.

Digital Branded Entertainment Has Moved Off The TV

How do digital content creators find revenue for their productions?  Certainly pre-rolls and banner ads aren't paying all the bills.  The solution is clear, branded entertainment.  Aided by big name advertisers, online series are finding high level production values, that can include celebrity talent, and the promotional expertise to raise viewership.  "For the third time in five months, Ford's testing branded online video entertainment. The Detroit automotive brand and Schick are sponsoring the second installation of 'Dating Rules,' a Web video series by Alloy Entertainment that premiered on Hulu Wednesday (Aug. 1)."  This has been a popular strategy for a number of brands including KFC, Luis Vuitton, and many others.

But this notion of a branded series didn't start on the web.  It was a strategy first used on radio and then on television.  TV series like the Texaco Star Theater that featured Milton Berle, Kraft Television Theater, and The Jack Benny Program which had a number of different sponsors all getting exclusive advertising within the show including Jello, Lucky Strike, and Chevrolet.   It was advertising that paid 100% of the cost of programming, not license fee revenue.  But as costs rose, one advertiser couldn't pay all the costs.  Ads were no longer a part of the show but  made into distinct breaks, outside the show.

And so it is the web's turn to use this staple of advertising, branded entertainment, as a means to support the cost.  But if history is a guide, as those costs rise, the web will one day also look at license fees to watch certain online networks and series.

Comcast Growing Revenue Despite Cable Sub Declines

Comcast is a profitable, growing organization.  With one foot in distribution and the other planted in content, Comcast saw their second quarter of revenue grow over 6% while operating income grew over 4% from the same quarter last year.  In a recessionary economy, Comcast seems to be doing well. The stock market must like the numbers because the stock price is up today as well.

As for the cable part of the business, Comcast must recognize that its subscriber numbers continue to drop.  While the loss is lower than anticipated, it still adds up to almost 400,000 less subscribers for the year.  But Comcast is able to offset those losses with an increase in both broadband and telephone customers.  And that trend is likely to continue for quite some time.  The younger generation is more oriented toward a broadband connection than to cable and the cost of a cable subscription only pushes the envelope for more cord cutting.

On the programming front, NBC and their owned cable networks are performing within an expected range, the Olympics could actually break even, and Universal Studios has had some hits to offset their box office duds.  Thumbs up to "Ted", thumbs down to "Battleship".  So congrats to Comcast, content and distribution together seems to be a successful mix.