ABC Streaming The Oscars ... With A Catch

At first glance, the news that ABC would be streaming the Oscar telecast on Sunday was good news to cord cutters and non cable households.  But the truth is in the fine print, you must first be an authenticated cable customer.  "In order to access WATCH ABC, you must have a cable subscription through Comcast, Cablevision, Cox Communications, Charter Communications, Midcontinent Communicaitons (sp), Verizion FiOS, Google Fiber or AT&T U-Verse in either New York, Los Angeles, Chicago, Philadelphia, San Francisco, Houston, Raleigh-Durham or Fresno."  Certainly added value for cable customers not able to watch through their cable box.

But what if ABC offered the Oscars to everyone, whether they bought cable or not.  Would they really lose broadcast viewership or would they gain a much larger number of consumers who would like to watch but aren't authenticated.  And if they can monetize the advertising of the video stream, could it be a profitable tactic too.  I'm sure the big worry is to risk losing license fees that they get from their cable operator partners.  Its why they are fighting Aereo. 

And wouldn't each ABC affiliate in each market want to show their own streaming feed to maximize their local ad load too.  By limiting to authenticated viewers only, the ABC Network most likely expects that it won't materially affect its affiliates ratings in each DMA.  But would opening the stream to all web enabled devices be more favorable than problematic.  Or is the concern that it could lead to letting the genie out of the bottle and lead to widespread cord cutting.  Doubtful. 

TiVo Winning Strategy Working With Cable Operators

TiVo seems to have found the winning strategy, partnering with cable operators to get their TiVo boxes into the home.  That resulted in them installing to more than 300,000 customers in their Q4 announcement, and an increase of 34% from the same quarter last year.  TiVo now has more than 4.2 million customers, an impressive number. 

I only wish my own cable operator offered TiVo as a set top choice; instead they are pushing their own Xfinity branded IP set top device.  "TiVo said it’s poised to make more progress with Comcast, which doesn’t lease TiVo boxes but has integrated its VOD service with retail-bought TiVo DVRs in select markets. After putting that plan on pause last year, TiVo said it and Comcast have since resumed that work and expect to complete the  deployment in all Comcast markets by June 30, 2014. Comcast markets in line to support VOD on retail TiVo boxes include Chicago, Atlanta and Houston." 

As TiVo continues to grow its base, the research that it draws from their boxes become more valuable to advertisers and to agencies.  Connecting the dots between household demographics, psychographics, and preferences and watched programs helps to make a more efficient advertising buy.   Its an exciting growth story for TiVo and for the premier DVR device. 

Is Aereo Stealing Or Adding Value To Broadcaster Signals?

According to the major broadcasters, "Aereo is engaging in theft on a massive scale and must be stopped."  They will get their day in court as the Supreme Court has agreed to listen to the case.  But while everyone argues, Aereo continues to grow markets and customers. 

Aereo argues that broadcast signals are being delivered to homes over free, over the air signals.  They are simply renting to consumers an antenna to capture those signals as well as additional services like DVR.  So is it stealing signals or not?  Broadcasters have been able to get cable operators to pay for access to their networks because of previous rules known as must carry and retransmission consent.  Some smaller broadcasters relied on must carry, requiring cable operators to carry their service, at no charge, to assure that their low powered signals gained wider distribution.  Others, charged for their networks.  Univision, a Spanish language broadcaster, successfully transitioned from must carry status to retransmission consent, as their network gained popularity.  For them, it opened a brand new revenue stream.

In these cases, broadcasters provided a signal directly to cable operators' headends, but Aereo has taken a different route.  By renting individual antennas, it has created a work around that seems to stay true to the notion of antenna carriage of broadcast signals.  That they deliver added services to the consumer and charges for rental and service in no way interrupts or interferes with the broadcaster.  And as long as broadcaster continue to use over the air signals, I believe that Aereo will continue to have a successful business.  That said, I believe that Aereo will win the Supreme Court case. 

Net Neutrality Nixed, Netflix Pays Up

Netflix's deal with Comcast to pay for assured access and speed to their broadband lines is only surprising in how quickly this agreement occurred.  It's as if Netflix had expected and prepared for this day and had an agreement in its back pocket read to present to broadband companies like Comcast, Verizon, and others.  "It also comes amid growing signs that congestion deep in the Internet is causing interruptions for customers trying to stream Netflix movies and TV shows."  And it shows that Netflix wanted to put its customers' satisfaction first in accessing its content. 

But such a first deal will now force Netflix to negotiate with each and every broadband provider to assure similar access and streaming speed.  Those additional expenditures will need to be absorbed and the next likely announcement could be an increase in monthly subscription fees to its consumers for Netflix.  Yes, it is trickle down theory at work where the customer, you and I, eventually pay more for the product or service we consume.

Some might point to the need for new net neutrality rules to squash this preferential treatment and once again give all content equal access and speed.  With this Comcast - Netflix deal, the genie is out of the bottle and it is unlikely that new rules will arise.  Good or bad, net neutrality is dead.  But that shouldn't stop innovation and entrepreneur efforts to improve streaming, increase bandwidth, and uncover new technologies to transmit and access content.  Ultimately, the rise of more choice for broadband access will keep prices down, not net neutrality laws.

For now, Netflix will be paying for a spot at the front of the broadband line; Amazon, Hulu, and others may shortly follow.  And consumers will pay as well.  It just might be time for another quantum leap in broadband technology and airwave access.  Net neutrality may be nixed but innovation remains our future. 

Sports Illustrated's 2nd Attempt At A Sports Network

For those that remember, Time, Inc.'s Sports Illustrated business once started a cable network with CNN that they dubbed CNNSI.  This 24 hours sports network tried mightily to compete against ESPN without much success.  It finally closed more than a decade today.  And so now we have the new iteration of a SI sports network.  "Time Inc. will team up with MLB’s digital arm, the NHL, NBA and Nascar to form 120 Sports, a 24-hour sports network that will stream everything but live games to the ever- mobile-connected sports addict."  SI will manage advertising for this venture.  While the plan is initially streaming, "The 120 Sports app will be free but could, down the road, grow to include a premium pay service — as well as other sports."

As a product extension for Sports Illustrated, the idea makes sense.  But the space is already crowded with other sports entities.  Despite the fact that they are partnering with the leagues, they are also competing against each league's own apps.  In addition, 120 Sports faces existing competition from ESPN, Fox Sports, CBS Sports, and NBC who are already heavily invested in the space.  120 Sports success will depend on how they can uniquely approach the content and demonstrate better value for the user.  But baseball fans may be already tied to MLB apps while football fans are tightly connected to NFL apps.  Should 120 Sports find a successful angle, they could possibly break through the clutter.  But it will not be easy. 

Should Net Neutrality Be Regulated?

The recent acquisition effort for Time Warner Cable by Comcast coupled with the ruling that struck down net neutrality raised the question whether regulation on internet streaming should exist or not.  In one corner are those that argue that all content, regardless of size, should be granted equal speed to bring their content to the home.  Others believe that an open economy means that broadband pipe owners, like Comcast and Verizon, should be able to charge companies for faster streaming.  In such a case, they could force companies like Netflix to pay more to get their heavy data files through the pipe to the home without any slowdown.  The worry is that such an unregulated environment raises costs that ultimately passes through to the consumer and that it creates barriers to entry for newer entrant with heavy data requirements to get in front of the consumer. 

Their is rationale arguments on both sides of net neutrality.  "Broadband players like Verizon and Time Warner Cable have spent billions of dollars upgrading their infrastructure, and they argue that they should manage their networks as they like."  As streaming use grows, the demand on this infrastructure could lead to traffic jams without the added revenue to continue to invest in it.  On the other side, "“Preserving the Internet as an open platform for innovation and expression while providing certainty and predictability in the marketplace is an important responsibility of this agency,” Mr. (Tom) Wheeler (head of the FCC) said in a statement." 

I see a different path.  I am not a fan of net neutrality regulation and believe that Broadband companies should be free to charge for preferential access.  But I also believe that the FCC should do more to encourage other companies to enter into the broadband space to offer more competition to cable and the telcos.  That means opening up new bandwidth and helping companies like a Lightsquared to provide alternative broadband services.  Innovation can arise through competition not net neutrality rules.  And innovation comes when new mousetraps are built that change our traditional ways of doing things.  Faster streams, new means to transmit, new ideas; it is the entrepreneurial efforts of our economy that are the real solution.  

Playstation's Gaming Bests XBox's Entertainment Console

In the gaming platform wars of 2014, the PS4 has sold to date over 5.3 million units while XBox One has sold 3 million consoles.  But why did the PS4 beat the XBox One?  Certainly both are big numbers especially given that they both sold new devices for the holiday season.  But the winner is Sony over Microsoft.

In my own household, my son also made the choice to buy a PS4 having been on the XBox 360 prior to that.  His response was that the PS4 was a better gaming console.  And perhaps too that the price of the PS4 was less and that he was not required to buy the camera.  The fact though that he chose gaming over entertainment may be at the heart of the two strategies.  His primary motivation was gaming; that it also connected to Netflix and MLB TV was nice but not a decision breaker.

Still Microsoft clearly believes that its entertainment strategy is the right one.  And they are staying on that course with its recent hiring.  "Microsoft announced Tuesday that it has named Jordan Levin executive vp at Xbox Entertainment Studios. Levin will report to president Nancy Tellem and will lead the creative team responsible for developing scripted and unscripted original content for the game console and other devices."  So now Microsoft is a content creator.

The challenge though will be for them to be both content and distribution.  I question the approach.  For other content companies, like Amazon, Netflix, and Hulu, the goal is to get content accessible on many devices.  For Microsoft, putting their content on devices outside the XBox platform dilutes the purpose of making the XBox a must have product.  And I am not confident that consumers will rush out to buy the XBox for untested content.  Even if they develop a winning show, I expect many will stay pursue content more readily accessible.

The key to the XBox platform catching up on the PS4 will be a more aggressive gaming strategy of exclusive content and synergy across devices.  Yes, content is king, but in this case, the content is the games themselves.

More TVs Are Web Connected

Whether you own a smart TV or not, you are likely already able to stream video to your TV set if you have a broadband connection in the home.  In fact, "63 percent of all U.S. broadband households now have a TV connected to the internet, according to a new report from the Diffusion Group (TDG). That number is up notably from last year, when 53 percent of broadband households had at least one of their TVs connected."  That is a big jump of 10 percent in just one year.  Whether it is a smart TV, Apple TV box, Roku, PS4, Xbox, blu-ray player or other box, broadband households have the means to connect their TV set to the web.  And they are taking advantage of these devices to stream Netflix, Amazon Prime, Hulu, You Tube and more.

And I suspect that many homes have more than one device connected to more than one TV set.  According to the research, 42% are connected to multiple sets.  It certainly is true for us.  My son likes to watch Netflix on the HDTV set in the basement while my daughter likes the laptop.  Good news indeed for content creators but a challenge for broadcasters and cable concerned with the rise of cord cutting.  And with Aereo fighting for its right to stream broadcast channels, an opportunity as well. 

Should Charter Cable Pick Up The Pieces?

Given the move by Comcast to sweeten the deal to acquire Time Warner Cable, what is the next move by Charter.  Will they counter bid Comcast or work with Comcast to pick up systems that Comcast may need to give up to satisfy the FCC?  Or will Charter reach out to other cable operators, most likely Cox Cable or Cablevision, with a compelling offer to sell?  It seems unlikely that Charter, after all its positioning, will simply tuck in its tail and scamper away, with nothing to show for its efforts. 

Certainly Liberty CEO John Malone and Charter CEO Tom Rutledge are discussing their options.  And a do nothing scenario makes no sense given their interest in pursuing more consolidation of the cable industry.  So what about thinking out of the box a bit.  Should they also consider a telco for acquisition.  Verizon FIOS might be out of the question but what about AT&T and its U-verse business.  Liberty is no stranger to the wireless business and broadband is both a wired and wireless infrastructure. 

A Comcast - Time Warner merger may be only the beginning of what could be an interesting M&A year.  Charter still has the opportunity to further shake-up a rapidly changing industry.   And fiber to the home does not necessarily have to be the final solution. 

FCC Should Let Comcast Buy Time Warner Cable

Charter Cable may want Time Warner Cable (TWC), but Comcast is willing to offer the asking price.  And the FCC should let Comcast win with no strings attached.  While the concern may be that it would make Comcast too big, truth is it could enable a more improved infrastructure.  As to the worry of lack of competition, that already exists. 

In most markets, there is only one cable operator, one telco, and DirecTv or Dish.  Some markets get the an overbuilder like RCN or WOW to compete with the cable operator, but it makes little difference.  So whether the cable operator in a market is Comcast or Time Warner Cable has little effect on the consumer.  It is an oligopoly no matter how you look at it.  The only way that really changes is for the FCC to encourage new broadband competition.  Unfortunately, Lightsquared is in bankruptcy and other options don't yet exist.

So this acquisition makes sense for Comcast.  And TWC sees Comcast as the white knight and Charter as the enemy.  So marks a classic M & A scenario.  Will consumers see a reduction in their bills from consolidation, unlikely.  Programmers and vendors of Time Warner Cable will be most affected.  Comcast likely gets the lowest license fees and best prices so once TWC systems are Comcast, programmers will lose any differential they have between the two contracts.  For example, if a network charges TWC $0.10 a subscriber a month, they may only be getting $0.08 a month with Comcast.  Comcast will see more cost efficiency while the programmer immediately loses $0.02 a month on each subscriber.  Add up the channels and add up the months and it can be quite a savings for Comcast. 

At the same time, Comcast will have to spend monies on the Time Warner infrastructure in order to align it with other Comcast properties.  But in the long run, it could make for a better experience for TWC customers.  And it may help to win back some of the customers TWC lost from its nasty license fee negotiations. 

Charter may try to counter bid.  How high they would be willing to go remains to be seen.  But it is unlikely that Charter will ever get the chance again to become a much bigger player, something John Malone seemed to desire when he invested in Charter.  It could be fun to watch Charter battle Comcast for TWC systems.  But should Comcast win, they should argue to the FCC it makes sense to own all the systems.  It makes no difference given consumer choices for their cable and broadband provider. 

Streaming Video Hogs Bandwidth

Whenever my internet stops refreshing pages, I have to yell to my kids to see if they are watching a video.  It seems, especially when they are watching on their iPads, that my computer can't access a web page or even simply refresh a page.  And once they put their video on pause, a simple click gets the computer working again.  And I know that my household isn't the only one that suffers from this phenomenon. 

It seems that streaming video has become broadband hogs.  And You Tube and Netflix may just be the worst culprits.  In fact, "During peak watching times, Netflix accounts for around a third of all downstream Internet traffic in the U.S., according to Sandvine, a company that monitors networks."  The more households watching, the worse the ISP performance.  Given the growth of streaming video, this problem will not be going away anytime soon. 

An added problem is that ISPs no longer have to abide by net neutrality rules.  ISPs can slow down these streaming services thus causing more buffering issues with the user.  And while they claim they still treat all web traffic equally, consumers are noticing that Netflix and other streaming services are slowing down.  What is needed is more technological innovation in streamlining the size of files while increasing total bandwidth.  For this household, that couldn't happen fast enough.

TV Everywhere Includes The Bathroom

It's no surprise that we do are best thinking on the toilet.  Well it seems we also do our best viewing.  Whether streaming video, reading e-mail or perhaps a book, or even playing games, consumers like doing these activities even when on the toilet.  "An offbeat survey finding: 40 percent of adults between the ages of 18 and 24 use social media in the bathroom."  Well with smartphones and tablets invading our homes, they seem to never leave our side, no matter what room we are in.  Now I won't start asking if you are part of this large minority but I would suspect that this trend is growing and should exceed 50 percent in a year or so.

Not to be a stickler though about hygiene nor am I a germaphobe, but with so many devices being touched in the bathroom, how clean are our screens?  And does this 40% even consider wiping down their screens once they leave the bathroom?  I suspect that percentage to be much smaller.  We are simply obsessed with our devices.  And our mobile screens are being enjoyed in every room in our house and that includes the bathroom. 

Charter Cable Finds New Angle To Acquire Time Warner Cable

Time Warner Cable didn't feel the love from Charter's initial bid to acquire them.  And Charter Cable wqill msot likely have to raise its bid to gain control.  But in a move to assure acceptance of a revised bid, Charter is working to nominate "friends" to the Time Warner Cable Board of Directors to help move its efforts forward.  "All 13 of Time Warner Cable's board members are up for re-election at the annual meeting this spring, presenting Charter with a rare opportunity among recent hostile bidders, to take control of the board."  Why its board elections are structured this way is a big problem; at the same time, the timing works well for Charter.  Other companies would be well advised to pay attention and restructure their board elections so as to stagger them across time. 

Whether Charter tries to acquire all of Time Warner Cable or strikes separate deals to sell some systems to Comcast is another question to ponder as this acquisition move strengthens.  Should Charter find that it can swallow all of TWC, I would question whether they should even consider selling systems like New York City.  Sure, Comcast would love to connect itself from New England down to Florida, but NYC is a crown jewel of their properties.  And owning that system and Los Angeles would mean having the top 2 DMAs in the country. 

Nominations for the board occur next week so the fight will only get more interesting.  Likely Charter has a strategic plan and is weighing different approaches to get control.  It may require the help of Comcast, but then again, it may not. 

Snow Days Good For Netflix

It has been a brutal winter with snowfalls above average and cancelled school days adding up.  With the kids home, the question of what to do always gets asked.  And so it was earlier this week that I acquiesced to my daughter's urging and subscribed to Netflix.  Sure we have access to cable and on demand and a number of premium cable channels, but she had shows she wanted to watch and Netflix offered them.  The result, my daughter has become a binge viewer of these shows and my son has added the app to his PS4 and started to watch his shows and movies as well.  Frankly, at $8 a month, it was cheaper than going to the movies.  And at least for this horrible winter, some welcome relief. 

Are You Ready For More Football?

Recognizing the rating success that NBC has gotten from Sunday Night Football, CBS has shelled out additional dollars to add Thursday Night games to the prime time window.  Despite the success of its current line-up, most notably The Big Bang Theory, CBS believes football generates higher revenues and better revenues.  So moving the Big Bang to another night seems the best next step.

As a football fan, I love Sunday afternoon for football and I am lukewarm about Sunday Night and Monday Night games given how late they start and end.  But it is unlikely to believe that these night games would ever start for the east as early as 7pm.  So adding another weeknight of football only dilutes the total enjoyment of Sunday football. 

Will I watch, it depends.  Most likely only when my team is scheduled to play.  Where I love watching all the action of all the football games on a Sunday afternoon, the lone Thursday and Monday game are simply outliers to the main action.  Yes dollars over the fan always comes first.  Fans will watch but expect to hear more grumbling. 

Radio Shack Runs Super Bowl Ad, Then Closes Stores

Radio Shack decided to create a memorable and most likely expensive ad, given the talent appearing in the commercial, and to run it in the Super Bowl.  Can you say expensive?  So how do you follow up your plans to take the 80's back and show the world the new Radio Shack?



Answer, you decide to close a ton of stores.  "According to people familiar with the matter, RadioShack is planning to close around 500 locations in the coming months. It isn't clear which of RadioShack's roughly 4,300 stores will be closed and when exactly the closings will begin."  Sure your ad gets a lot of plays, but you created a PR nightmare.  The sound of cash being flushed down the toilet.  Rather than tell the country that you are embracing change, you go 360 on us. 

Truthfully, what would have made a great companion piece in the news would have been how you have an aggressive plan to revamp your stores to reflect a new approach, not close them.  How does that align with your ad?  Is operations not talking to marketing?  Heck, I would have closed out your ad with a rebranding of Radio Shack to something like "The Shack".   I would have started to redecorate the stores and refresh the facade.  It would have been a cohesive, integrated attempt to both communicate to the world of your new approach and to actually do what you say.  But closing the store simply tells the world that the left hand doesn't know what the right hand is doing. 

Take the 80's back, you may just have to start planting daisies to soon become another footnote like Circuit City, Highlands, The Wiz, and many other electronic companies that are no longer with us.  But so ironic that you spent so much money on an ad only to announce many store closures.  Dumb!

Microsoft Makes Multiple Leadership Changes

When Steve Ballmer announced last year his plans to retire as CEO of Microsoft, many wondered who would be named successor to the crown.  With that formal announcement today, we have learned that there were multiple leadership changes to be made.  First, that Satya Nadella is now the new CEO, second that Bill Gates was resigning as Chairman and one of Microsoft's current board members, John Thompson, would take that role.  And that Bill Gates would have a new title as technology advisor.  Steve Ballmer will remain on the board of directors.  Certainly bigger changes then many expected.

So what does this change mean?  With Thompson as the new Chairman and Nadella as the new CEO, will Microsoft take a new direction?  Will Microsoft devote more attention to hardware or embrace a larger software in the cloud focus?  Surely the hope is that this new leadership will invigorate the company and create more technological innovation than has been seen. 

Time Warner Cable Loses Signal, Bigger Push To Sell

Time Warner Cable saw a slew of subscriber drops when it dropped the CBS signal when its contract expired.  Their Southern California system dropped the ball again when it lost the Fox signal during the Super Bowl for about an hour.  Certainly not a good way to try and regain consumer trust.  Can you say bad timing?

And it seems Charter is not going away, either.  Reports are surfacing that Charter will indeed up their bid for Time Warner Cable.  Whether Comcast will be a part of these dealings or help Charter to get the NY and New England systems remains to be seen.  One wonders what other troubles lay ahead for Time Warner Cable.