Could Apple iWatch Beat Google Glasses?

In the classic game, Who'd you rather, comes the question regarding wearable devices.  Would you rather wear glasses or a watch?  Google Glasses is a real product while the Apple iWatch is a term not yet coined officially by Apple.  And until it is official, we can only speculate about what it can offer.  The folks at Business Insider have an idea.  And they see 95 reasons consumers would use an iWatch.  Their bottom line, "An iWatch will be very useful – and useful things sell by the boatload."

So would you rather wear glasses or a watch or can the answer be both?

Are We Facing Video Gluttony?

At time, I am struck by how often history repeats itself.  And how change, when you notice it at a macro level, follows some very similar behaviors.  Classic marketing has taught us about cycles of segmentation and fragmentation, and we are forever seeking new ways to behave that ultimately makes our lives easier and perhaps simpler.  It could also be said that we sometimes overindulge when faced with too much of a good thing. 

That is how I see what we seem to be facing in the world of video content.  Choosing what to watch and when to watch it gets harder and harder.  When there were fewer outlets for viewing, others (notably the broadcast networks), programmed the best of the best for us to watch.  Choice was much more limited but ultimately we were only seeing the best shows.  The rise of cable meant more outlets for viewing and more choice.  And now the rise of online has led to not only user generated content but now more choices for professionally produced content.  A feast of video content that for some has resulted in binge viewing.  In an attempt to catch up and watch entire series of programs, we sit for many many hours in a row.  Thus the reference to gluttony.

But is it starting to be too much?  As classic marketing cycles suggest, we seem to be in a period of intense fragmentation of video content, both long and short form.  And not that the highest quality still exists among this infinite increase in supply, only that it is now so much harder to find it and enough hours to consume it.  A day is still only 24 hours long and we sleep through about a third of it. 

Despite this path toward gluttony, we now have more control over what we watch, when we watch and where we watch it.  And that approach, TV Everywhere, continues to expand.  Over time, this fragmented marketplace will indeed consolidate again and bring forth a more segmented content platform.  Cable has seen it as networks are owned by large media conglomerates, many with broadcasters themselves.  And this segmentation should happen in the online world as well at least until the next disruptive change comes along.

So enjoy the video feast but perhaps be wary of what you choose to consume and view.  I'd hate to find it leading to such disenchantment of video in general that we move from gluttony to starvation. 

Dish Network Pushing Hard For Wireless

Two interesting articles in the news.  The first article from Reuters was that Dish Network has raised their bid for Clearwire while simultaneously trying to buy Sprint as well.  The second article, in the business section of The Wall Street Journal, talks about cord cutters not only dropping their cable subscription, but their wired internet subscription as well.  "Hundreds of thousands of Americans canceled their home Internet service last year, surveys suggest, taking advantage of the proliferation of Wi-Fi hot spots and fast new wireless networks that have made Web connections on smartphones and tablets ubiquitous."

Does Dish Network see the same trend?  Along with a satellite business, Dish must certainly believe as well that owning a wireless universe could make them a stronger competitive threat to cable.  And as long as the Wi-Fi cost to the subscriber is seen as a good value,  a likely disruptor to the wired world. 

For light users of video streaming, a Wi-Fi solution is seen as far cheaper than a cable and wired broadband subscription.  But wireless providers may not be willing to support the heavy streaming user with an "all you can stream" solution at one low monthly price.   Those users may indeed find more value staying with their cable and broadband provider.  That is until a company can build out a scalable solution of wireless that can be offered at a lower cost and with higher connectivity speeds.  And that is likely the direction Dish may seek to take in buying up companies like Sprint, Clearwire, and Lightsquared. 

A Drought of New Product Releases At Apple

The Business Insider points out in today's article that "there is also evidence to suggest that something big has gone wrong at Apple over the past year. And that something, we would guess, is likely problems with the launch of a major new product category--namely, Apple's television set."  Certainly the rumor mill has gone on for some time that an Apple TV set was in the works but it has yet to materialize.  And neither has any other new product release.  And according to their chart, "Apple is in the midst of an unprecedented drought in terms of new product launches."

So while that article presses on the problems at Apple, today's Bloomberg article from an All Things Digital interview with CEO Tim Cook is meant to let us know that a little patience will produce great results.  "He singled out television and wearable computing as areas of interest."  When and what those new products will be remains to be seen.  But if you have faith in Apple, they will deliver.  

Aereo TV Reviewed On Cape Cod

Aereo TV is expanding despite lawsuits and threats to turn broadcasters into cablecasters.  In a review in today's "capecodtoday", the review deemed the service as worth it.  And for $8 a month, Aereo offered a cheaper alternative to cable for access to about 20 channels of content.  The stream is accessible on computers and mobile devices as well as through a Roku box for access on a TV screen.  In fact, the service reminds me of the early days of cable when cable boxes only got about 36 channels of content for an affordable low price.  But of course those days are gone.

So here is the most interesting part of the review for me.  "For the geeks in the audience, our testing was done on a Comcast home network connection that read 25 MBPS down and 11 MBPS up. We tested on a Wireless G, Wireless N and wired Ethernet connection."  That's right, you still need to buy broadband access, either from your cable provider or if available a telco provider.  And while the overall cost may be cheaper for the consumer, the cable/telco company is still getting a monthly subscription fee for their service.

So what should it say to the broadband side of the company?  You can win back those cord cutters to Aereo if you offer a competitive low cost package.  Tout the lower bundled cost of cable and broadband and enable authenticated streaming of cable content.  Rather than fight the battle in the courtroom, market your superior service and easier access.  Enable third party boxes like Roku, TiVo and others to work with your infrastructure and build the better mousetrap.  Till then, this is the message that the consumer is hearing.  "Aereo is a service that works well and is available right now. It does what the company promises and at a highly affordable price. Aereo provides a rich channel selection and a free virtual DVR service – far more than “basic cable” offers."

Aereo TV is here because you left the door open for them.  But you may still have time to shut it and offer different sizes for different customer needs.

Hulu Has Many Buyers

There are at least 7 buyers interested in Hulu, the streaming video service.  Along with a few equity companies, bids came from DirecTv, Time Warner Cable, and most recently Yahoo.  No Apple, no Amazon, or any other cable or broadcast network or operator.  "The Los Angeles-based Hulu board began seeking the latest round of bidding in March. Now the question is whether Disney, News Corp, and Comcast will look for an exit and take their content with them, then license it back to Hulu for bigger fees but no exclusivity. If so, then what in the world are bidders actually buying?"  A good question and I also wonder why these current owners don't see the value their platform has built for them.  Perhaps they rather offer streaming content through their own sites without seeing the incremental value an aggregator like Hulu can offer. Perhaps they fear the disruptive nature of streaming to their current cable license fee model.  They may fear this change but they can't stop it.

Without ABC, NBC, and News Corp as owners, the financial model will indeed change.  Unless quite long term content deals can be locked up, Hulu may lose both the exclusivity and the breadth of content that enables them to compete effectively and charge subscription and advertising fees.  And that could potentially make the purchase of Hulu a less than ideal business venture. 

Hulu Next Steps

The owners of Hulu, Disney, NBC, and Fox, may have created a monster.  While it provides a new revenue stream from online subscription and advertising, it also appeals to cord-cutters, those consumers that have dropped their cable subscription for online content only.  For the parents of these owners, ABC, Comcast, and News Corp, that means the loss of monthly cable license fees and TV dollars.  And no doubt, the new revenue stream won't cover the loss of the old revenue stream for quite some time.  So what to do?

Some owners want to sell Hulu and there are a number of possible buyers kicking the tires, including Time Warner Cable and DirecTv.  But once sold, would the former owners continue to license their content to the venture.  Other ideas include converting Hulu into a TV Everywhere platform for authenticated cable subscribers.  But what about those current subscribers that are not cable customers?  Dropping them would mean a loss of subscriber revenue and hurt the growth of the venture.

The truth is that the genie is already out of the bottle.  If Hulu doesn't want to reach cord cutters, others will and have already.  In fact, Netflix and You Tube rank as the top two sites in online video consumption.  Hulu owners should actually look at this platform as actually recapturing lost cable customers.  And Hulu is already trying to gain more revenue with a heavier load of advertising content. 

The simple fact is that the cost of cable for consumers has risen so fast and gotten so expensive that some folks can no longer afford it.  Broadband has become more crucial to their home than cable and the content online can be enough to satisfy.  Hulu becomes that next platform that at $7.99 a month is much easier to afford.  And online video, whether offered by Hulu or someone else, will not go away.  Cord cutting will increase but the decline in cable subscription will be gradual.  Hulu owners need to embrace this evolutionary change in viewing as it is inevitable and growing quickly.

If the current Hulu owners can get along and agree, they would find that maintaining their current approach while exploring more TV Everywhere approaches is the way to go.  If they can't agree, then it is indeed time to sell and let others with the passion for innovation  take the reins. 

Waiting For The Next Apple Innovation - Keep Waiting

While tweaks to the operating system are always meant to keep current product lines from becoming obsolete, Apple seems to be spending more time fighting tax code questions and less on new product innovation.  Since the release of the iPad three plus years ago, fans of Apple have waiting patiently for the next new product release.  Is it the death of Steve Jobs, is it loss of talent, did the product R&D group take a holiday? Despite rumors of smart TVs and watches, we are left waiting.

And it appears we may have to wait longer.  "Consumers awaiting Apple's rumored wearable, watch-like device might need to wait until next year before the gadget sees the light of day."  While the buzz is about wearable technology and Google is already pushing the Google Glass design, Apple appears not ready to announce or release its own wearable technology. 

And if not an iWatch, then what can we expect in 2013?  Will Apple finalize its deal with Sony and announce a streaming music service to compete with Pandora?  Will Apple pursue a rental video or subscription video service?  Will it be an iTV or more innovation of the Apple TV box?  Or are we just left with the next release of an iPhone and iPad?   And so, the Apple consumer continues to wait.

Is Next Gen XBox A Winner?

Microsoft just announced the pending release of the next generation of its gaming device dubbed XBox One set to replace Microsoft 360.  Certainly the freshening of the franchise is necessary as gaming tastes change and new uses are uncovered.  With both voice and gesture controls, XBox One seems to push a more interactive experience.  And whether gamers care or not, the box plugs into your cable box to enable live viewing.  It also features Skype controls, Blu-ray, and a whole new variety of games to play.

Of course, to pull forward, one must push away from the past and that means that old XBox 360 games will not play on the new system.  Unless gamers want to go cold turkey on their old games to trade in their 360 box for the new system, they will be working with two different boxes through the transition.  Some might not mind, others may be annoyed but will ultimately embrace the new system should they find the game playing to be a better experience.

But XBox, Wii, and Playstation all have to worry about the rise of tablets and mobile game playing on these devices.  Enabling better interactivity between tablet and game platform will help.  Still gamers are embracing these casual games on handheld devices.  And how many different versions of shooting games can there be.  Already, they try to push the limits with more blood and sexual content in the games.  Most games of any interest to gamers get rated M for mature; a ratings system that does little to stop younger gamers, 13 and under, from buying these games.  Tablet games seem to rely more on strategy and speed, less on violence and sex. 

For X-Box, this new console is a big change for the product line.  For Microsoft it means adding more functionality and a better experience for the price point to encourage current users to upgrade and new users to buy up into the new box.  Once released, we will be able to better see the execution of this Microsoft strategy.

VOD Gaining Traction

I am a firm believer in Video on Demand (VOD).  I have had the good fortune to work with it from the early days when networks were overly cautious about pushing viewers off linear to recognizing its power today to actually encourage linear viewership.  But VOD relies on content and immediacy to it.  Missed last night's Saturday Night Live.  Unless you DVR it, you will have to wait a few days to watch it on VOD.  Even then, the show will be missing the musical performances.  Missed the finale of your favorite TV show, it may take a week before it appears on VOD.  Those challenges are but one reason viewers seek content off the TV set.  The other is the limitations where to watch, strictly through the set top box on the TV screen.

Finally, it seems, networks are embracing VOD.  "Some television networks are also big believers in the technology because it can help partially piece back together their splintered audiences and protect their advertising revenue."  VOD can provide some advantages including disabling the fast forward button to require viewership of commercials.  But more importantly, "for the first time, Nielsen counted VOD views of ABC’s shows the same way it counts digital video recorder playback — that is, within three days of an episode’s premiere." And that means more advertising eyeballs and higher revenue for the shows these networks aired.

And viewers are embracing VOD, watching more hours then ever before.  "This television season, VOD views of ABC’s shows are up 32 percent versus the same period last season, according to the network."  A big motivation to continue to launch more shows, past and present, on VOD.  For consumers already subscribed to cable, VOD brings a ton of extra value.  But challenges still exist.  In addition to the lack immediacy to content comes the difficulty of finding content through search and tree and branch movement through the menu.  It is clunky, inefficient, and detrimental to the discovery process.  Improving the menu process should help to further improve usage. 

Comcast strategy of promotion of content from subscription services like HBO and Showtime with free on demand usage both brings more viewers to use the VOD menu and build interest in purchasing these premium networks.  And that's a good start.  Improving the on screen menu and extending the VOD reach on IP devices of authenticated viewers are the next big steps.

Dish Wants Spectrum

It seems that Dish is very intent on acquiring spectrum to extend beyond its satellite delivery.  Not only have they put a bid for Sprint/Clearwire but they are also bidding on the assets of bankrupt Lightsquared.  And Dish remains in the hunt with Sprint.  "Dish Network’s month-long attempt to acquire Sprint Nextel moved a step forward Monday after the wireless giant said it had received a waiver of various provisions in its merger agreement with Softbank that would allow it to conduct due diligence discussions with the satellite TV service provider." 

Of course both acquisitions come with hurdles and may take years to help Dish compete more effectively in the wireless space.  And the biggest challenge, overtaking the current leaders in the broadband and cellular space.

Target Adds Streaming Media To The Business Plan

The retail giant Target knows that to compete with Walmart in the brick and mortar space and Amazon in the online space, you have to offer competitive markets.  But with an early jump in streaming media, Target was left behind.  Till now.  "Target is currently testing a service called Target Ticket. According to a Web site running a beta version of Target Ticket, the service is providing 'instant access to 15,000 titles,' including new releases, classic movies and 'next-day TV' shows."  And Target will not only find themselves competing with the above group, but add also Apple, Netflix, Redbox,  and others to a growing list of distribution platforms. 

Like Amazon Prime, Target might use its branded credit card business as a means to incent usage through loyalty.  But Target will also learn that they not also need to increase the size of their inventory but look to exclusive windows and original content to better and more effectively compete.  Of course all this talk is about a beta test.  Where Target goes and how aggressively they choose to roll out such a program remains to be seen.  Still, the blending of physical and online stores continue to demonstrate the trend of retail to compete effectively in the marketplace.  And that is why Target needs to enter this space. 

Broadband Hurt By Lack Of Competition

David Carr's article in today's New York Times shares with us a new book.  "Susan Crawford, a professor at the school, has written a book, 'Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age,' that offers a calm but chilling state-of-play on the information age in the United States." It is unfortunate, but true, that there is a lack of broadband and wireless competition in this country and as any good economist can tell us, monopolistic industries tend to cause higher prices and less innovation.  As Professor Crawford shares, "that the airwaves, the cable systems and even access to the Internet itself have been overtaken by monopolists who resist innovation and chronically overcharge consumers."

When the concern was once about telephone, the government forced the break-up of AT&T into the Baby Bells.  One baby bell ended up owning AT&T while the other NYNEX became Verizon.  Cable, too has seen its share of consolidation with two cable operators owning a majority of franchises and two satellite providers.   But government intervention to force breakups is clearly not the answer.  That stopgap proved temporary at best.  Rather the solution is to simply encourage new broadband and wireless infrastructure to be built.  Google is trying to become a player but is currently in just a couple markets.  Lightsquared tried but is now in bankruptcy.  Clearwire is looking for a partner either with Sprint or Dish.  But are these few enough?

Other utilities are already touching the home.  Water, electric, and gas companies are all connected to the home.  Could government support encourage these utilities to expand into the broadband field?  The cost to build broadband infrastructure is expensive, communities continue to fight back the rise of cellular towers.  But if we are pushing to be a wireless, always on, society, then more competition and more improvement in the speed of the networks are desperately needed.  But government's support of new entrants does not appear likely.  According to Professor Crawford, "And because telecoms and cable companies have done a great job of developing relationships in Washington — as a business, it is more generous in terms of donations than the banking industry — there is little pressure from politicians or regulators."  And that spells bad news for consumers.

US Open Tennis Moves To Cable

We have seen the rise of regional and national cable sports nets, we have watched more and more sporting events move from free TV to cable.  Our NBA Playoff games are now on TNT, our Monday Night Football on ESPN, and boxing on HBO and Showtime.  Broadcast networks have let the cable networks rule the sports programming niche.  And so it should come to no surprise for anyone that the US Open Tennis final matches will move off CBS to ESPN.  Already weekday matches are found on ESPN and Tennis Channel, so this move only brings all the matches to one network.

Moving high profile sports events off broadcast to cable also helps cable operators and the cable networks.  These events are not likely to available to non-cable customers on the web and so it encourages consumers to stay subscribed to cable.  Sports may be a niche, yet there always seems to be a sports fan in every household.  Adding another signature sports event to cable only makes it harder to cut the cable cord.  Of course, the high costs of these programming events causes licenses fees to rise and subscriber fees to rise with it.  So at some point, the cost to view will become too costly for a larger and larger audience.

And so where does that take this trend?  Well don't be surprised if within the decade, a major sporting event is available as a subscribed PPV event.  It logically follows as the next way to capture a higher revenue stream.  As costs for rights skyrocket and old media outlets unable or unwilling to buy, new sources emerge; regardless, ultimately, the consumer will end up paying more. 

What If The Cable Providers Owned Hulu?

Today, Hulu is owned by three cable/broadcast networks - NBC, ABC, and FOX.  And according to reports, they can't seem to agree on the strategic direction of the company, free or subscription.  Most likely, because of the nature of the deals they also have with their cable distribution partners.  Jason Kilar, the founder of CEO is no longer running the show and the partners have been discussing plans to sell.

So while a number of names have been bandied about, now comes word that Time Warner Cable was interested in purchasing it.  Perhaps, too, the Comcast side of the NBC family would want to stay invested and work with TWC on the next stage of Hulu.  If owned by cable distribution companies, the thought is that Hulu would be used to provide content authentication for cable.  Possible, but a sure fire way to end the subscription side of the Hulu revenue business model. And ABC is already moving forward with its own authenticated streaming app for live programming.  If I were running Time Warner Cable, I would rather want to build my own TWC authenticated streaming app so that my brand remained front and center to the consumer.  That my own air line-up was linked to the app and that it was ergonomic in design and simple to use, both for search and recommendation, and for advancing the TV Everywhere concept.  I don't believe a Hulu acquisition delivers that to TWC or Comcast.

And while TWC may have their own reasons to wanting to buy Hulu, others are also kicking the tires.  "Last month, former News Corp. chief Peter Chernin was reported to have a $500 million bid for Hulu, which he helped found in 2007. Bloomberg reported earlier this month that Yahoo CEO Marissa Mayer was exploring a bid for Hulu as she looks to reignite Yahoo's online video strategy.  Amazon.com and Guggenheim Partners reportedly have also shown interest in Hulu."

Turner Follows ABC With Authenticated Live Streaming

Following on the news that ABC will be releasing a live streaming app of its broadcast network in local markets, TNT and TBS have announced a similar venture.  "TBS and TNT are about to become the first national entertainment networks in the industry to stream on-air content live across multiple platforms 24/7, including through the networks’ websites and a pair of newly created Watch TNT and Watch TBS apps."  As national cable networks, Turner (parent of TNT and TBS as well as other cable networks) doesn't need to contend with local broadcast affiliates, which adds wrinkles to the ABC streaming approach. 

Still, they need to revise their cable agreements to support this streaming initiative.  Which cable and satellite networks have signed on board remains to be seen.  But with a Summer launch of the apps, Turner still has time to negotiate deals.  I just wonder whether this addendum comes with any asks on the part of the network or various cable operators.  For operators, streaming brings great added value to the subscription service, but it may hurt local ad sales from lower cable viewership caused by viewers leaving the TV set and no local insertion advertising on the live stream.   Of course it could be argued that these live stream apps also help reduce churn and keep subscribers paying their cable bill.  A tricky negotiation for both sides to support a much asked for TV Everywhere environment. 

Viewers Love To Stream And They Love Their Mobile Devices

According to bandwidth management supplier, Sandvine, consumers online streaming continues to grow.  And not surprisingly, consumers are not just watching on their hardwired devices via broadband, but are actively using WIFI in their homes to stream content to their mobile devices.  And smartphones and tablets have enabled consumers to increase their video viewing habits.  "Median usage more than doubled – from 25.5 MB to 58.7 MB over the past year."  A healthy year over year increase and one powered by the availability of more and more content accessible online.

The players in the online streaming space are well known.  Per the tone of the article, Netflix remains at the top of the pile while others are also in the mix.  Also that more long form video is being consumed via mobile devices accessed through WIFI; as the study notes,  consumers are more accepting of this platform for their long term viewing.

This is good news to those content creators that presented at this year's digital upfronts.  Consumer demand for more long form streaming content is growing and users are watching it on both fixed and mobile devices.  The 1000 channel universe has come and gone; we have reached a level of an unlimited number of channels and shows from an ever expanding platform for content distribution.

ABC Brings TV Everywhere One Step Closer

In a world where video follows us, the broadcasters have been slow to get on board.  Viewers may like on demand programming, but they also like to be fed video in a linear format.  And ABC has seen the light.  "Marking a first for a broadcast network, ABC on Sunday announced the launch of its Watch ABC app to allow pay-TV subscribers access to live, linear streaming of viewers' local ABC station programming -- including network, local and syndicated content -- starting in the New York and Philadelphia markets."  For both the ABC affiliate in each market and the consumer, ABC live programming will be presented across mobile devices, tablets and smartphones.  And authenticated cable and satellite subscribers will be able to get this access at no additional charge.

This must come as good news for the operators.  It is a first competitive step against Aereo in offering the same streaming video content to their consumers.  Of course, the next step for operators is to package and heavily promote a low cost broadcast only tier and broadband package at a competitive rate to Aereo.  Price sensitive consumers might just come back to cable and new subscriber growth might just reverse the trend cable operators have been facing. 

It is interesting to note that despite streaming the live local market stream to authenticated devices, ABC is not putting the same commercials as TV in their stream.  "The live streams will carry different ads but the same ad break lengths, according to an ABC spokesman."  It has been noted that Nielsen does not measure usage on the streaming side so ABC will sell digital only ads.  TV advertisers might be concerned that they do not get this bonus coverage.  It may also prove a lucrative new ad revenue stream for ABC.

As this streaming app requires new cable deals in the markets being covered, not all operators have revised their agreements yet.  In the New York DMA, it looks like Cablevision, Charter, Comcast, and AT&T, no Time Warner, RCN, Dish or DirecTv.  To enable deals to get signed, ABC is first "previewing"the app in the New York and Philadelphia markets for 6 weeks before requiring authentication.  Sampling is a great way to demonstrate interest and promote usage to all before a potential plug is pulled on unsigned operators in the respective markets.  And a free preview might delay subscribers from signing on to Aereo to quickly. 

For ABC, this push toward live streaming is the next evolution for broadcasters and a welcome step for consumers and viewers.

Is Unbundling Cable The Answer - Sen. McCain Thinks So

As William Shakespeare once said, To Bundle Or Not To Bundle, That Is The Question," an age-old question that plagues us to this day.  So perhaps the real question to ask is whether bundling is a good thing or not.  The concept of bundling has been around a very long time.  Products that we buy come with other pieces, "all included" in our purchase; from electronics to vacuum cleaners those "bundled extras" make our purchase easier than trying to figure out all the pieces to buy, from cords to attachments.  In cable TV, bundling gives consumers access to a ton of channels at one price, some we may want, some we don't, but in a single purchase we have a big pile to access.   We tend to believe that if we only pay for what we watch, our price will decline, but that is not necessarily the case; buying in bulk enables all to share from the pile and keeps the individual channel prices low. 

Sometimes too we say we don't want to watch something until a show appears on a channel we never have watched before and we add that piece to our own favorite pile.  That case happened in my own family.  We never watched the Nat Geo Channel.  Unbundled we never would have paid for it.  Yet with their new show, Brain Games, advertised, my kids sought out the show and the channel and have now become viewers of both.  It was included in our package; had it been unbundled, I cannot say that we would have individually purchased the network to watch the show.  The result, the show, the network, and the viewer all lose. 

Certainly there are arguments to unbundle some more expensive programming with sports channels being the biggest culprit.  But the bill, called the Television Consumer Freedom Act, doesn't talk about expensive networks verse the inexpensive ones.  "The bill would require programmers to make their channels available to cable operators on an a la carte basis; does not allow the bundling of co-owned cable channels and TV stations in carriage negotiations;  and gets rid of the sports blackout rule for stadiums built with any public money."  The industry has matured rapidly where once broadcasters competed against cable, they now own cable networks.  Where once there were a ton of independently owned cable networks (like the old world of cable operators), today the big ones are all owned by the media giants.  In the world of cable, like elsewhere, the big fish have swallowed the little fish. There is consolidation in the industry with fewer players owning the networks.  

And while the motive of this bill to unbundle is to keep consumer costs low, it is unlikely to achieve that result.  Costs per cable network will rise and ultimately the consumer will pay more for less.  What can McCain do?  Encourage disruptive technologies to exist against the mainstream.  Aereo is one such player.  Netflix, YouTube, Google and others are all invading the media content and distribution space.  And with their arrival and development, monopolistic industries are put to the test.  Innovative disruptive is to be encouraged, not law making.  In the case of unbundling, it will only lead to other problems.

Microsoft May Have A Plan For The Nook

Did it take Barnes & Noble creating a partnership with Google for Microsoft to finally take notice?  Despite their investment in the Nook digital book reader and tablet, little has been mentioned about their involvement.  So now comes rumor that Microsoft will buy the digital assets of the Nook business to help support its own line of tablets.  "A deal to buy the digital assets of Nook Media is the natural next step for Microsoft, which first announced a plan to work with Barnes & Noble on its Nook devices and content in April 2012, ponying up $300 million at the time to help." 

Also of interest is the future of Nook tablets.  "The documents also reveal that Nook Media plans to discontinue its Android-based tablet business by the end of its 2014 fiscal year as it transitions to a model where Nook content is distributed through apps on “third-party partner” devices."  It seems that the hardware experiment for B&N could not work, despite having a strong presence in college bookstores across the country.

What Microsoft will do with the digital assets and their own devices remain to be seen.  Nook apps are already available across other competitor products including Apple and Android tablets.  I wonder what the competitive advantage for Microsoft is unless they plan to change the relationships with these other tablet makers. 

Broadband Speeds Still Need To Improve

We have grown dependent on our broadband connection.  In the past, we expected that our telephone connection was always working and that our TV could always turn on to watch our shows.  Today, we not only want a constant broadband connection; we want the fastest speed possible at the lowest possible cost.  In homes, we share the telephone, we share the TV, but we each have our own personal monitor, tablet, or smartphone, each demanding access to the broadband stream coming into the home.  The result, the more usage, the slower the speed to each device.  Videos start running slow, web pages stop loading and we are forced to wait for our device to connect.  In our household, we feel the pain of this slowdown. 

"Yet broadband seems to be the one area of the information economy that has not followed Moore’s law, named after the proposition by Intel’s co-founder Gordon Moore that the power of digital devices would roughly double every couple of years, radically expanding their capability and driving down their cost."  Our demand for faster speeds at low prices grow, but there is little competition in the marketplace to help drive down pricing and force innovation.  "That means that in most American neighborhoods, consumers are stuck with a broadband monopoly. And monopolies don’t strive to offer the best, cheapest service." 

Will new competitors, like Google Fiber, emerge to compete against telco and cable for broadband share.   Dish Network certainly wants to expand by buying Clearwire and Sprint but other entrants are also needed.  Till then, there may not be much impetus for current companies to aggressively improve their broadband infrastructure.

Internet Sales Tax Moving Forward

Main Street has been fighting the web for years over the discrepancy in state sales tax collection.  And online consumers have benefited from this "discount", using brick and mortar stores to check items and then purchase online without paying an additional tax on the purchase.  But that advantage seems destined to end.  "The Marketplace Fairness Act — which will force online merchants to collect tax on behalf of other states — passed the Senate on Monday."

While Amazon has been building out distribution centers and managing state agreements to gain incentives to build in exchange for a tax-free status, other online retailers like the simplicity in neither collecting or reporting state sales tax across all 50 states.  And while it may cause new accounting issues, it will certainly help states (those with sales tax) add revenue back into their budgets.  

Certainly, the bill still has a long way to go to pass the House and some changes to it could occur.  "eBay, one of the law’s prime opponents, said in a statement that it will keep pushing for merchants who collect less than $10 million to be exempt."  But it seems an inevitability that such a law will eventually pass now that the size of internet sales is no longer a niche business.

You Tube Subscription Service

Multiple revenue streams matter.  Broadcast learned from cable and caused cable operators to pay for carriage to assure more revenue.  Hulu built Hulu Plus to add a subscription service above its free streaming platform.  And You Tube wants to do the same.  "The subscription service would not be for general use of the web site. Reports suggest it would be for specialist video channels. However, it could involve as many as 50 video channels, with single channel subscriptions for $1.99 a month. Details of the plan were told to the The Financial Times over the weekend."  So will consumers pay for You Tube original channels?

For Hulu Plus, the offer includes theatrical movies and network series.  Netflix and Redbox offer similar know content.  But for You Tube, the hope is that these original networks offer unique content that consumers will pay a monthly subscription to gain access.  It works IF consumers value this premium content and see value in paying.  It works IF these same consumers have a credit card or have parents willing to pay for their children to watch. It works IF the consumers sees enough original content each month for the cost to determine that it makes sense to not cancel their subscription.  So You Tube has some big IFs to overcome. 

Other streaming networks have discovered different paths to new revenue.  Partnering with known media brands in the print and tv space works.  AwesomenessTV was purchased by Dreamworks Animation.  HuffPost TV is airing on cable network AXS TV.  I see the key to success for streaming content is based on multi-platform partnerships.  With so much content being created to fill new distribution growth, breaking through the clutter is key.  That is best done by working across platforms.  A great example is Defiance, a video game partnering with SyFy Channel.  It creates exposure, interest, and hopefully most important, engagement that leads to revenue growth.  Not that content on a single platform can't survive; it is just that it is harder to get off the long tail and into a quantifiable audience share.

Can You Tube Channels survive in a subscription model?  Perhaps tied with another media platform, like a magazine subscription, the chance for success is greater.  Without, I wonder if consumers will indeed pay a monthly subscription fee for original You Tube content.

Barnes & Noble Looks To Play With Google

Any mobile device is only as good as the content that drives it.  Today, the two biggest libraries for apps and content are Apple and Google.  But while Apple is a closed architecture built around its exclusive product line, Google Play has taken the opposite approach to open itself to multiple devices.  So add to that list the Nook devices. 

"Barnes & Noble is adding Google Play’s full complement of videos, music and apps (and ebooks) to its Nook HD and HD+ tablets. The tablets will also include Google services like Gmail, Google Maps, YouTube and the Chrome browser."  Nook devices will continue to access its own store as well.  Certainly more is better than less and should result in a better user experience for consumers who use the Nook tablets. 

But the article speculates, and rightly so, what about Microsoft.  Despite partnering with B&N, Microsoft has seemed to do little to take advantage of the deal.  Where is Microsoft in the device, where is Microsoft in the retail space of B&N, where is Microsoft in the content?  And I must suspect that Microsoft must be a little upset that B&N is now cavorting with the "competition".  But since Microsoft has done little to utilize this partnership and the Nook needs content to gain popularity for its device, B&N made the right decision to push ahead. 

Liberty Buys Into Charter...Time To Takeover?

According to reports, Liberty has completed its quarter ownership of Charter Communications.  With its ownership, Liberty also gets seats on the Charter Board.  So what is next?  Does Liberty let Charter run independently with its current management team or is Liberty already thinking of full ownership.  It would not be the first time, as SiriusXm has found out first hand.  That is not to say that having Liberty and its management team on your board is a bad thing; rather, John Malone and his team have proven themselves successful in running these businesses.  It is more conjecture as to what Charter may become in the next few years. 

CE Study 47% IP Devices Connected - Really?

Numbers are a funny thing.  They can be manipulated any number of ways to tell a story.  Yet sometimes those analyses tend to cause a bit of head scratching.  One in particular appeared in Multichannel suggesting that less than half of all IP capable CE devices are actually connected to broadband.  "Makers of Blu-ray players, gaming consoles, smart TVs and streaming media devices are banking on users to connect to revenue-generating services over broadband, but less than half of those devices are actually tapped into the Internet, The NPD Group revealed in its latest a Connected Home report."  Do you spot the device that may have brought down this percentage?

If you guessed blu-ray player, you are right.  Now I admit to not seeing the actual study, but I do wonder what the numbers look like without Blu-ray in the mix.  But this item also was a head scratcher, "According to NPD’s survey of 4,000 U.S. consumers, streaming media players are connected at the highest rate, followed by game consoles, Blu-ray players and IP-capable TVs."  You mean to tell me that IP connected, smart TVs are not actually connected; in fact, they are less likely to be connected than Blu-ray players. I can understand people buying Blu-ray players solely to play discs and not to connect online, but why would a consumer buy an IP connected set if they had no plans to connect.  Was the price of the set cheaper than another without the feature? 

But back to the numbers.  So with a sample of 4000, were they equally divided among the 4 devices?  Perhaps it would be more interesting to dig deeper into each of these devices specifically to see how each is utilized.  Certainly, consumers are buying more and more connected devices AND actually connecting to broadband.  My final thought, I think these numbers seem skewed and another study might prove that consumers are quickly embracing IP connectivity and the percentage is higher.   And households with more than one of these devices in their home are using a particular one as the primary connecting source.  Of note, what they are currently connecting to. "The study also found that 40% of TVs connected to the Internet either through the TV itself or via a separate device are used to stream Netflix content, while 17 percent tap into YouTube, and just 11 percent head to Hulu."  

Should Apple Buy Or Build A Subscription Service?

I keep wondering whether it makes sense for Apple to expand its iTunes' business to include a subscription model.  For Wall Street, a regular monthly revenue stream from paid subscribers is easy to forecast and certainly increases the connection that Apple can make with its customers.  And Apple has never shied away from new innovation that can possible eat in to old revenue models.  So the threat that a subscription model has on its purchase model shouldn't be an issue either.  And a subscription model opens the doors for Apple to build out its own ad model around the rental business.  Apple has shown itself to be both a hardware and software leader so I keep wondering if Apple is even considering such a strategic move.

I could see three possible scenarios shaping up.  If the intention is to buy, Hulu most certainly could be at the top of the list.  While smaller than others, it has built a growing reputation for original content and usage.  Whether Apple is interested in kicking the tires of this business or another remains to be seen.  Certainly, the business is still a nascent one and Apple could simply build a subscription model from scratch.  With relationships already in place on the purchase side of the business, a library of content could be available quickly.  It may take time to build it as large as Amazon, Netflix, or Redbox, but it is doable. The third scenario would be to partner with one of the current platforms.  A little cash from Apple could go along way in moving a business further ahead of the pack while limiting any downside for Apple.  And adding iTunes as a platform to entry would help to extend reach and performance.  For now, we can only speculate.