Friday, September 13, 2013

What if...Fuse And Maxim Team Up

Two separate news reports that makes one wonder if a connection should be made.  According to the New York Post, MSG may be interested in selling its Fuse music service.  And according to a separate Variety news story, Maxim magazine has been sold to a media company with the intention of starting a Maxim TV Network.  And while the Post thinks that a likely buyer of Fuse could be Mark Cuban's AXS- TV Network, formerly HDNet, I wonder if Maxim might be a more interesting fit.  With a subscriber base of around 65 million homes, Fuse would bring immediate subscribers to a start-up network like Maxim.  Of course there are a number of stand alone cable networks dying to get near 50 million homes who might be willing to pay up to dramatically improve their subscriber base. 

This of course is pure speculation that Fuse is even for sale.  The network has always been a personal passion for its CEO, James Dolan, and he may be hard pressed to want to give up control.  Selling networks has never been easy for the Dolans so we will have to watch and see how it unfolds.  But if they are indeed a seller, I see a Maxim offer as a likely next step. 

"Young People Can't Afford $100 Cable Bills"

According to Epix CEO Mark Greenberg, cord cutting is nothing new.  Whenever prices get out of whack and competition comes in with cheaper alternatives, consumers tend to choose to change.  He notes that when satellite TV came in to compete with fiber connected cable operators and he sees that today with streaming services.  Others call it cord cutting, Mark calls it competition, and he is right. 

Apple certainly faces the same issue with cheaper smartphones from competitors.  With their latest announcement that their less expensive 5C iPhone was indeed not as cheap as expected, their share price dropped considerably. 

Cable operators with rising license fees and the desire to maintain large profit margins are forced to keep raising the cost of basic cable, driving more and more consumers to seek alternatives.  And Netflix, Redbox Instant, Amazon, and others are there to offer their content at lower monthly costs.  But Mark has some ideas to compete more effectively with these OTT companies and perhaps even winback cord cutters.  "The answer could potentially lie in smaller and smarter bundles, combined with new user interfaces, integration of social networks and better content curation."  He also argues for smaller bundles of networks at lower price points as well as fully embracing the TV Everywhere concept and authenticating content viewing outside the TV box and home. 

For now, it is an acknowledgement that cord cutting is real and that its root cause is price gouging and increased competition.  It is a concept truly not unique to cable but learned across all industries, their products and services.  In cable's case, it just sounds cooler to call it cord cutting.