Tuesday, July 31, 2012

Will Apple Split Its Stock And Go Into The Dow?

Apple is sure in the news lately and not just because of its anticipated fall release of the iPhone 5 and Mini iPad.  And not because of their courtroom drama with Samsung over patent rights.  Now it is will Apple decide it is time to split its stock price and become a part of the Dow Jones Industrial Average.  According to Bernstein Research analyst Toni Sacconaghi, it is being discussed.  "The idea of splitting the stock does not seem to be a religious issue for Apple: the company has actually split the stock three times before, each time a 2-for-1 split – the previous splits were in June 1987, June 2000 and February 2005. One question is whether a two-for-one split would be enough to get the stock into the index without overwhelming other components; you could argue that the stock ought to split four-for-one, or even six-for-one, which would still make it one of the highest priced companies in the index."

Of all the tech companies out there, Apple has been the most fun to watch, both for investors and for consumers.  For now, Apple continues to be questioned on how long it can grow its momentum.  Once everyone has an iPhone and an iPad in their home, what is the next big product that every home and every consumer must have?  It could be the Apple TV or perhaps there is something else being secretly designed.

You Tube Channel Focus Building A Bigger Content Distribution Platform

Google's investment in You Tube continues to grow as it turns You Tube into an aggregated distribution platform of hundreds of channels.  More content, more choice, more eyeballs to online, and more ad revenue.  And perhaps secondarily, an alternative to linear cable distribution.  "The site has launched nearly 100 new channels so far this year, attracting talent such as actor Amy Poehler to create or star in original episodes in an effort to draw new audiences—and blue-chip advertisers."

It reminds me of the early days of cable, as networks tried to appeal to viewers to augment their favorite channels and give CNN or USA a try.  Over time, broadcast viewership has eroded while cable has gained.  Today, it is You Tube and other online platforms that are taking its slice of the share away from cable and broadcast.  Over time, their percentage will also become significant.

As cable programmers and now online programmers continue to learn, what you put on the platform needs to be interesting and it needs to be found.  "The channels themselves, meanwhile, are working to find their place, with a lot of trial and error along the way.  'Just because you build it doesn't mean they'll come,' says former television executive Larry Aidem, talking about YouTube viewers."  But being small allows you to make quick changes to adapt quickly to new information.  Learning what the viewer likes is a strange fickle business, just ask NBC and the other networks as they premiere new shows year over year hoping to find the next hit.  For online, there is less risk at stake so there is more opportunity to experiment.

You Tube and online has the  advantage of less barriers to entry.  It's easy to upload content.  The  bigger challenge is promoting it and helping viewers to find it.  With so much clutter, it is only getting harder and harder to get noticed.  The key is being featured and recommended so that you break through and become viral.  So far, my favorite channel on You Tube is the Above Average Network and my favorite series, The Front Desk.