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.