AMC Nets - Eat Or Be Eaten

With all the media moves being made on the distribution front, Comcast and Time Warner Cable, AT&T and DirecTv, and on the content front with Fox trying to buy Time Warner, consolidation has become the key buzzword.  To remain competitive and to build leverage, strength comes with size and content needs that size to demand higher license fees for its programming. 

Speculation on how will do the acquiring and who will be acquired have included nets like Discovery, Scripps, and AMC Networks. Well it seems that AMC would rather eat than be eaten.  It has mad a bid to own a major piece of BBC America.  Once sold by Discovery Networks, although never owned by them, BBC America has been a small but steady network.  And like AMC, BBC has distributed some original programming, like Orphan Black, that has received critical attention.  These two nets have partnered in the past so such a move could be a good programming fit.

But the question is whether it is enough to maintain independence or simply delay it.  AMC owners, the Dolan family, have demonstrated that they can both buy networks, like Sundance Channel, and also sell networks, including Bravo Network to NBC and fuse to Nuvo.  They spun off both AMC Nets and MSG into separate companies from each other as well as from its cable distribution arm, Cablevision Systems.  So if the timing and dollars are right, AMC Networks could take either approach.  If staying strong is the approach, a BBC America acquisition may not be enough to stay independent. 

Twitter Finds Growth While Losing Money

Sports, especially the World Cup, was kind to Twitter last quarter.  The social media site grew users and usage and exceeded its revenue projections.  It also led, as CEO Dick Costolo suggests, new user engagement "from people checking out special feeds set up by Twitter. This gives Costolo confidence that Twitter can build more 'experiences' around big events and big topics in the future."  Still, the service continues to lose money although at a smaller pace than the previous quarter.

So is the quarter a one shot wonder brought in by a rabid international World Cup interest or can Twitter figure out other ways for users to stay connected to the app ans use it for longer and longer periods?  It certainly is an easy way to connect with fans over sports and live events.  The Emmys are next month and the World Series in October but can they equal the impact that World Cup offered.  Also, they are US centric events while World Cup was a global phenomenon that comes every 4 years.  And while the Olympics are a couple years away, they hardly seem to deliver that same passion. 

Twitter has a lot to be proud of while it continues to focus on monetizing its social engagements.  Too much apparent advertising might spoil the process, too little won't pay the bills. Its a big job for Costolo to keep dollars flowing into the site. 

Windstream Gains Could Help All Telecom

Per the WSJ, thanks to IRS approval, Windstream, a rural telecommunications company, will be able to "spin off some of its telecommunications network assets into an independent, publicly traded real estate investment trust, a move that comes as a wave of U.S. companies look for ways to lower their tax burdens."  That news has lifted the telecom sector resulting in telephone and cable companies, those with a wireline infrastructure, with a potential tax benefit as well.  And whether they also decide to spin off assets into a REIT or not, the stock market expects they will, leading to higher stock prices today. 

How it translates into better service, more investment in the infrastructure, more employment, and other capital investment programs remains to be seen.  Should that be the case, it demonstrates that a heavy tax burden actually reduces the opportunity for new dollars to grow and other benefits to be taken.

Will Apple's iWatch Embrace Mobile Payments

Given the strong ties between Apple and Disney as a result of Steve Jobs and Pixar, we continue to hear that Apple's forthcoming iWatch could include a commerce feature.  Similar to the Magic Bands that are being used in Disney Resorts, the iWatch could potentially offer similar features.  "Within the past few weeks we've been hearing a lot about Near Field Communication (NFC) technology coming to the iPhone and iWatch."  The start perhaps of being able to leave your wallet at home and to pay for goods and services with a flick of the iWatch and a security code. 

The success of the Apple iWatch seems to depend on it being more than what is currently on the market in the smartwatch category.  Time and heart rate monitoring aside, easier communication functionality, mobile payment features, and perhaps a self-winding feature that enables ones own movement to continue to power the watch.  The more functionality and ergonomic design, the better the chance for success. 

Comcast Improving Broadband

On Monday, I wrote about FIOS success in broadband and its use of fiber optics to improve speed and bandwidth.  Historically, cable operators have used coaxial cable to the home which can slow down speeds as more users are attached to the node.  Well as broadband becomes more valuable to a consumer than cable TV, Comcast is now upgrading its infrastructure in certain markets, replacing cable with fiber to the home.  Great for consumers but most likely an expensive upgrade that will need to be reimbursed through higher fees.

According to the Wall Street Journal, Comcast and other cable operators are using fiber in any new builds that they are doing.  Unfortunately, the report goes on to say that Comcast does not have plans to replace all existing coaxial with fiber.  It certainly will get more expensive the longer they wait.  With more consumers adding broadband subscriptions, usage will increase, and speeds will decrease at peak periods on coaxial cable systems.  And with more homes streaming, the situation will continue to worsen.  Fiber systems have higher capacity to handle increased usage. 

In addition to fiber, more investment will be needed in technology that improves streaming capabilities and enhances speed.  Given the limited number of players offering broadband, cable and telco, new competitors are needed to enter the space to help keep pricing in line; otherwise, consumers will only continue to see their data usage bills rise and rise some more.  Demand for fast broadband access will only continue to rise. 

Facebook Conquers Mobile

When Facebook users began to migrate from their pc to smartphone and tablet, shareholders were concerned that the ad model would crumble and Facebook would take a hit.  But given their recent quarterly earnings report, Facebook has embraced the mobile platform and uncovered a growing revenue stream. 

"The social network reported that profit more than doubled and revenue topped estimates for the ninth straight quarter."  It is a world of more than just display advertising; rather, sponsored content with video and a targeted approach.  And as CEO Mark Zuckerberg knows so well, this world changes at an ever quickening pace.  He is making new investments in untried products, all to stay relevant for the long haul.  Products like Oculus VR and services like WhatsApp can potentially bring new sources of revenue back to Facebook. 

For the present, Facebook must contend with user satisfaction and usage.  It is harder to find new users to the service and a challenge to keep them active users too.  Constant reinvention that encourages tune-in rather than pushes current users away.  It is the challenge every time an upgrade is released.  Still, Facebook seems up to the challenge and certainly has the financial resources to invest and grow.  It was a great quarter and as some shareholders have speculated, facebook could now be considered undervalued. 

Apple Patents Smartwatch Called iTime

On the heels of its quarterly earnings, Apple also received a patent on its smartwatch design, labeled iTime.  Of course, this patent was first submitted 3 years ago, an eternity ago in the world of internet connectivity.  Much has changed, digitally, creatively, ergonomically that the smartwatch device could be either a breakthrough or an expensive timepiece.  Certainly, the design elements, as described back in 2011 didn't consider as much.  It seems almost as a placeholder.  While iWatch was a media created brand, thought up as an extension to its iPod, iPhone, iMac, iPad branding format, the release of the patent name iTime will not be the official brand name. 

Many expect Apple to schedule a product announcement release in the late Summer/ early Fall with a sale of the device in October, in time for the Holiday Season.  I suspect neither iTime or iWatch will be the official brand name for this smartwatch device when it is finally announced.  Its announcement would also tie in to one for the next generation iPhone.  

Netflix Surges As More Consumers Join

I joined Netflix first when it offered DVDs through the mail.  I lasted a year.  I preferred the immediacy and choice that cable offered.  How simple to scroll through on demand and watch shows and movies from a wide sources of content.  My daughter encouraged us, after the latest snow day this winter, to join Netflix again.  This time for its streaming content.  And we are now loyal users.

For each of us in the family, Netflix offers and recommends content that matches our interests.  Easy to discover content, easy to use, and easy to watch.  Like many others, I am currently fixated on Orange Is The New Black.    And it is fair to say that some of my TV time has switched from cable to streaming. 

I take my own experiences and can easily see why Netflix has been doing so well.  Since their misstep a few years back with trying to separate their DVD business from streaming, they have recognized the value of original content and used it to drive subscriber growth.  Whether it is OISTNB or House of Cards, it has led to both Emmy nominations and awards.  With their quarterly earnings announcement, Netflix continues to attract viewers, "signing on 1.69 million during the period, extending its total to 50.05 million, of which 47.99 million are paid subs."  In the US alone, they have now over 36 mm households.  And while the stock market always wonders how long such growth can last, I expect Netflix will find new revenue models to further improve their value.

signing on 1.69 million during the period, extending its total to 50.05 million, of which 47.99 million are paid subs. - See more at: http://www.multichannel.com/news/tv-apps/netflix-pushes-past-50-million-subs/382645#sthash.b3NKB1Z8.dpuf

signing on 1.69 million during the period, extending its total to 50.05 million, of which 47.99 million are paid subs. - See more at: http://www.multichannel.com/news/tv-apps/netflix-pushes-past-50-million-subs/382645#sthash.b3NKB1Z8.dpuf

This years Emmy awards are next month and most likely Netflix original shows will win more statues.  That kind of publicity will cause more households to want to watch its programs.  And once they watch one episode, the Netflix feature that automatically loads the next show to start will keep them tuned in.  It encourages binge viewing, but it also encourages loyalty. 

To Better Compete, FIOS Improves Broadband

Verizon FIOS has a competitive advantage over cable; its broadband speed, mainly because of fiber to the home, is greater than cable's coaxial connections.  And as customers seeks more streaming media to view and upload more content to the cloud, the faster the connection, the better the experience.  FIOS can, with minimal investment, support that objective by increasing its upload speed to match its download speed.  "FiOS says the rollout should be done by the fall, and 95% of customers will receive it automatically."  And FIOS says this enhancement is being delivered at no additional charge.

While concern over net neutrality still mounts, most customers really just care that their content is accessible, without delay, when they want it.  When they encounter buffering, no matter what the reason, it creates a bad user experience.  The more speeds are improved, no matter the content, no matter the direction, the better the customer will value the service. 

FIOS growth has been slowing while cable operators have seen gains as well in broadband customers.  But as broadband continues to become more valuable than cable, FIOS may have the advantage when marketing superior broadband speed.  And while upload speed may not yet be as important as download speed, the need is coming.  Cable operators need to push more investment into improving their lines. The total broadband experience matters and slow internet only frustrates consumers who then start looking for a new provider. 

Microsoft Giving Up On Xbox Original Content

With the news that Microsoft was cutting jobs came word that their Xbox Division would also be giving up on an original content strategy,  Back in March, I wrote in my blog that I did not think it was in the best interest of either Xbox or the Sony Playstation to create exclusive video content when the primary intent for these devices was gaming.  Nadella must agree.  Per Re/code, "Microsoft will shut down the Xbox Entertainment Studios, ending an ambitious foray into original video programming."  Instead, the focus for Xbox for now will be video gaming.  I couldn't agree more.  Sorry to see Xbox Entertainment Studios go, but it was not a good fit. 

Given the device appeal as gaming, the clear driver is video games that stretch the uses and the imagination of the consumer, interactive, challenging, and fun.  It is a unique ecosystem that reaches an important core audience.  And while the extension of the product as a distributor of video content adds value to the device, exclusive entertainment content does not.  Microsoft is smart to leave that now to Netflix, Amazon and others and be an aggregator of these platforms.  Xbox now can create exclusive gaming content instead. 

As to video content, I would suggest that Xbox reach out to Apple; given the new direction of each, Apple might just be willing to let Xbox also connect to its iTune library.  That type of partnership could deliver terrific entertainment value to both parties.  For now, Microsoft is slimming down and focusing on its future.  It is the proper means to a stronger company. 

Microsoft Slimming Down To Better Compete

With a plan to cut about 14% of their employees, Microsoft hopes that a smaller company is a stronger company.  Most cuts seem to come from their recently acquired Nokia phone business whose phone line was Android based.  The division will now devote its time and energy to phones running Windows instead.  Where the rest of the cuts come from will be known in the next few months.

Clearly though, cutting jobs is not the means to a more nimble, more customer focused company.  Corporate culture starts at the top and it will be Nardella's job to shape and instill a new mission and strategy down into the ranks.  That change will not come easy.  Where the other business units fit in to the new strategy has already caused some to speculate that XBox could be spun or sold off.  Given the success of XBox to the bottom line, such a move could also hurt the business.  On the other hand, it could also allow Microsoft to apply a more laser focus on what it needs to do well to stay relevant in the coming years.  These layoffs are simply the first step in a long process. 

Why Net Neutrality Matters

A funny take on a very real issue.  

Time Warner Says Its Content Is King

Time Warner, owner of HBO, CNN, TBS, TNT, Warner Bros. and more, sees its worth more than the huge sums being thrown at it by Fox.  It should come as no surprise that Time Warner is being pursued.  By streamlining themselves over the years, first by splitting off Time Warner Cable, itself up for sale by Comcast, and most recently its Time Inc group, Time Warner has turned itself into a video content pure play.  And while they have initially rejected the Fox and Rupert Murdoch offer, I believe this is more a negotiation process to get to a higher valuation.  As content is king, it demands  a premium price.  And if not Fox seeking to acquire, then perhaps CBS or Viacom or Liberty.  So let the dance begin, the end of Time Warner is approaching. 

Apple And IBM Becoming Friends

Back in 1984, Apple's Super Bowl commercial was clearly aimed at big business and its most present leader IBM.  Much has happened since then.  IBM sold off its PC business and put its emphasis into the corporate customer; Apple pursued the home customer with phones and tablets that have simply revolutionized the world.  And today, these once brand enemies are becoming partners.

Working together, Apple and IBM have forged a partnership to provide corporations with the devices and apps to improve productivity, manage communication, and drive revenue growth.  "The two companies said they hope to use the expertise of IBM's consultants and relationships with corporate customers to create business apps that offer the simplicity—a hallmark of Apple products—of today's consumer apps. The apps will draw on IBM computing services such as security, device management and big-data analytics."  The immediacy of these devices to support the business selling chain and to draw out improved data for analysis and response will surely be a game changer.  For one, it will lead to improved customer service, quicker managing of the order process, and a more secure experience.  Specifically how it will work will come soon.  "The companies said Apple and IBM engineers are together developing more than 100 new apps for various industries. "The companies said Apple and IBM engineers are together developing more than 100 new apps for various industries."  But it is a big step for Apple into the enterprise world and an opportunity for IBM to connect its services, through Apple devices, more effectively across industries. 

This partnership seems to be a win-win.  Where once they were rivals, now they are partners to an ever changing mobile landscape.  In the meantime, we will wait and see more specifically how they will put this partnership into action.  But should it prove effective, it certainly will produce another strong revenue stream. 

FCC Listening To Net Neutrality Comments

With the rise in merger activity likely affecting the future of broadband, there is no doubt that the FCC is taking a serious look at net neutrality.  Net neutrality requires that all digital content, whether it is e-mail or streaming content from Netflix, be handled the same way with equal access through the pipeline to the consumer.  And while some net neutrality remains in effect, some wonder whether there has been some throttling where some content essentially is able to bump ahead in the line. 

This Multichannel article provides an interesting take on what FCC Chairman, Tom Wheeler is facing.  First, John Oliver overwhelmed the FCC website with his take on the issue a few weeks ago and consumers continue to flood the site with comments.  According to the article, they have received over 600,000 comments and are extending the deadline to handle the influx. 

Issues regarding net neutrality verse the creation of HOV or high frequency toll lanes for those that pay more lay at the heart of the discussion.  So too the notion of reclassification of broadband as a utility, like electricity and water, could hurt growth of the industry.  A better broadband system requires a better infrastructure and that requires capital.  More competition is also required to enable consumers to choose their broadband provider and allow competition to help lower pricing.  And lastly disruptive technological innovation that improves speed and reliability is important as well.  Governmental regulation tends to limit growth not engage it.  How much the FCC tinkers could affect all these efforts. 

Our Loss Of Privacy Through Social Media

When was the last time you checked your privacy settings on any of your social network sites, last week, last month, never?  We may be under the false impression that we are sharing with just our "friends" or a particular group, but most of us are sharing our lives with the entire world.  The question to ask is do you care?

With each press of a like button, we tell advertisers that we want them to continue to pitch products to us; with every GPS link to our location and the place we are visiting, we tell the world that we are not at home.  For me, it seems like an invitation to the world that our house is empty as we regale the world with our vacation photos while we are on vacation.  And while we think we are only sharing with a specific number of people, our privacy settings may be saying otherwise.

It may simply be a fine line between sharing and privacy; how much we want to share and how often we want to share the events of our lives.  It is both a blessing and a curse.  For families and friends spread far and wide, social networking becomes a means to stay connected.  For those seeing financial inducement to share what you've purchased or where you are eating, it may offer discounts or more. Sites like Foursquare and Living Social are especially helpful in this matter.

But the negative effects include telling the world that you were invited somewhere that others were not.  In children, that seems to happen frequently when postings of gatherings and parties tell others that they were not included.  A level of social awkwardness amplified through sites like Instagram, Facebook, and others.  And because the information lives on for eternity, it remains a permanent reminder of who is in and who is out.  Heartbreaking at times for kids going through adolescence and figuring out their own self-worth.

There is no easy answers for social networking and privacy.  It comes with both benefits and risks.  But it is clear that we at least know the settings that are enabled on each of our social networking sites and how, where, and who we are sharing our lives with.  So take a moment to check your settings and consider with every post, the possible ramifications it might cause. 

Will We Ever Get To Leave Our Wallet At Home

I recently was forced to buy a new wallet.  The old one was starting to crumble but it could at least hold everything and every new one I found seemed to small for my needs.  Eventually I found one but I also came upon the realization that I needed to pare down what I carried.  Between the necessary amount of cash, credit cards, courtesy cards, business cards, train tickets, subway card, drivers license, AAA card, health cards, receipts, etc., my wallet was overflowing.  I needed to pare down and as I did, I kept wondering will there ever be a day I can keep my wallet at home.

For some courtesy cards, I was able to transfer them into my iPhone into an app called CardStar and for others, I rely on my phone number as the identifier.  But Costco wants me to carry a card and others, too.  I'd love to move my drivers license into an app but I am bot sure the police would be so pleased.  And while I have cut down on the number of credit cards I carry, I would be happy to transfer all my credit card activity into my smartphone and let it tell the retailer which one I wanted to charge my purchase against.

We are slowly moving away from carrying physical cards and currency, but the transition seems to be taking a very long time.  There are still places that require cash on hand.  I could try flashing my phone to the beach parking attendant or try to pay for my beach tag through Venmo or some other payment sharing app, but I don't see too many companies announcing that they accept payments that way.  The MTA Subway once required coins and now it is a MetroCard but one day soon all payments could happen through an app too.

And so I still carry a wallet and it still feels too stuffed with unnecessary items.  I can only hope that one day in the near future, all identification, courtesy cards, cash and credit payments, and even payment receipts can all be managed via our mobile devices.  Then my pocket will no longer feel dragged down by the bulk and weight of a wallet, bending and cracking cards, over the course of its lifetime.  The world is moving in that direction but not as quickly as I might hope. 

Microsoft's Changing Focus

The old adage that what gets you there can't keep you there seems to run across every industry and every company.  It seems especially so in the technology industry where the pace of change ever increases.  And for Microsoft, in particular, what got them there, licensing Windows and Office content on every computer, isn't keeping them there either.  They have been usurped by companies like Apple, Google, and others who keep reinventing themselves and delivering new products and services.  According to Satya Nadella, new CEO of Microsoft, now it is Microsoft's turn. 

His memo to Microsoft employees lets them know that they are no longer a device or services company; rather, "Microsoft is the productivity and platform company for the mobile-first and cloud-first world."  With this new direction, many wonder where Xbox fits in this new strategy.  Should it be sold off or is there a place in this new business model.  For now, given its current success, no changes are planned.

For the rest of Microsoft, employees are wondering if it means layoffs especially from its acquisition of the Nokia mobile phone business.  Can Microsoft turn this new mission into a reality and once again claim market share?  What new tools and apps does Microsoft have to attract more customers to their platform?  Many believe that Nadella has the skill set to make this turn around happen.  In the end, the technology industry continues to evolve quickly and Microsoft could be the ones to lead consumers through the next turn. 

Should Content Owners Consolidate Too

While battles loom regarding the proposed distribution consolidation occurring, those on the content side expect the same.  Speaking at the Allen & Co. Conference, David Zaslav, CEO of Discovery Networks, believes that "'In the next couple of years, I think it's likely there will be consolidation on the content side,' he said."  Discovery has been mentioned both as a potential buyer of content as well as a possible seller of its content business.  Others mentioned include Scripps, AMC Networks, Viacom, and even Time Warner, holder of TBS, TNT, and HBO.

And while there are challenges brought in by the increased size brought on by cable consolidation, the rise in digital disruption continues to alter the playing field.  How we get our broadband access, what we want to watch, and where we want to watch our content, have made traditional linear programming that much harder to grow.  Live programming, sports, events, award shows, have all been best at driving linear viewing.  The success of World Cup ratings in the US is the most recent example to cite.

Consolidation of content owners could provide some level of leverage against the big cable distributors.  It certainly assures carriage of better watched networks while hoping to support an increase in carriage of smaller cable networks. Their challenge continues to be their niche appeal.  Success of smaller cable networks that have found audience growth has come from broadening their programming format, building show brands, and driving reach and interest.  But in the end, these networks become hard to differentiate one from the other for the sake of the bigger rating.  Consolidation of content owners may simply help these niche networks to stay around a little bit longer. 

Analysts Think Content May Not Be King For Long

There are some that worry that content will no longer be king as media distribution platforms continue their consolidation.  With the FCC looking at both the planned merger of Comcast and Time Warner Cable and AT&T with DirecTv, analysts fear that the power will shift from content to distribution.  The solution though is not content consolidation, according to Barclays Capital’s Kannan Venkateshwar.  Given the fixed costs of content production, less synergies can be derived if content creators merge; their power will not be enhanced in negotiating with these potentially larger distributors. 

While his insights ring true, I am not so sure that I agree that the merging of cable distributors will change the fact that content is and will continue to be king.  Good content drives viewership and builds value.  Netflix has emerged as a strong player with original content like "Orange Is The New Black" and other digital properties are doing the same, whether it is for subscription or ad revenue or both.  Yes, cable has the strongest platform, but their high cost continues to hurt future growth. The younger generation continues to embrace broadband and digital streaming, uncovering new content like You Tube's PewDiePi. 

As a result, content creators actually face a lower barrier to entry to getting their content produced and viewed.  The challenge for digital content to better compete with cable consolidation requires an aggregator that can not only combine and present all the digital channels, but deliver a search and recommendation engine across these content properties to help the consumer best choose what to watch.  Cable distributors have their interactive screen guide for linear and on demand, helping cable customers to find shows across all networks.  The Apple TV device, Amazon Fire, Roku, and others certainly work to the first point of delivering digital content, but need that aggregated search app to aid in the content discovery. 

So, I wouldn't worry that the threat of content distribution mergers will lessen the power of content.  Disruption is already occurring and content will continue to remain king.

Cameras Everywhere

Here in NY, the latest news was that a women left her baby at a subway station and casually walked away.  A good Samaritan made sure the infant was watched till police showed.  The news reports at the time indicated that no cameras were at this particular stop and so no footage available of the woman.  But hours later, other footage was found that showed the woman pushing the stroller elsewhere and she was eventually discovered.  What is particularly noteworthy is that we have become more and more used to cameras and surveillance in our lives.  At every airport, store, and even on streets, cameras seem to be almost everywhere.  And we seem ok with that.

Certainly in an age where terrorism affects us, cameras help to find perpetrators and victims.  It is used as a defense to help thwart potential crimes and we live by the notion that a good defense is a good offense.  Take for example the story a week ago of a trucker who watched a state trooper speed and talk on his cell, honked his horn and caused the trooper to pull the trucker over.  Quickly, the trucker started filming the interaction with his smartphone which led, not to a ticket for excessive honking, but to an apology from the trucker for not following the rules of the road, no cell phone while driving.  Without the video, a ticket would certainly have been the more likely outcome.

It demonstrates that we have become okay with cameras recording us in life just as we have the same ability with our smart phones to video our interactions.  Camera security is now more prevalent in our homes as wireless and remote cameras protect us from break-ins and help lead to capture. Cameras are in every store too recording us entering and leaving as well as waiting at the cash register. 

But the rise in camera coverage in almost every step we take comes with a price.  A loss of anonymity for one thing, and perhaps a bit of individual freedom.  Private may never be private anymore.  With every recording, everything we say or do becomes a permanent record.  Donald Sterling, "former" owner of the LA Clippers, certainly feels this way.  His anti-social rant was captured and shared with the county, resulting in his loss of team ownership. 

Overall, the use of cameras, both publicly and privately, tries to assure that safety and security are improved.  But it is at the cost of some personal freedoms.  And while it provides an added level of information, we also know that we can't be naive to believing that it represents all the facts either.  Technology also enables clever editing, Photoshopping, and other visual and audio tricks.  Still cameras are a tool that we as the public seem to be very comfortable knowing that we are always being recorded. 

Music - Rent Or Buy

The music industry is facing a difficult hurdle as the rise of streaming services like Spotify, Pandora, and others are affecting the sales of downloadable music.  Consumers seems happy with a monthly subscription service that in fact lets them listen but not own their music.  The result, "listeners in the United States used such audio and video streaming services to listen to 70.3 billion songs in the first half of 2014, an increase of 42 percent from the first half of 2013."  Unfortunately, "According to Nielsen, 120.9 million albums have been sold so far this year, down 14.9 percent from the first half of 2013. Of those albums, 62.9 million were on CD (down 19.6 percent) and 53.8 million were digital downloads (down 11.6 percent)."  What isn't clear is whether the net effect is good news or bad news, revenue wise, for the music industry.

Certainly, on the video side, the success of Netflix and Amazon Prime, echos a similar path as streaming video growth expands.  Its effect on dvd sales must be equally noticeable.  No longer is there a need to buy the movie or TV series if the content is just as easily offered in a streaming subscription service.  The challenge, of course for both video and music are the license fee rights.  When they go away, the content is no longer accessible by the subscriber.  Netflix subscribers just saw that recently as some content vanished as new content entered the library. 

At least with ownership of content, music and video, it is owned in perpetuity, or until we lose the cd or scratch the dvd.  Oh well.

Apple and Google Becoming Great Rivals

I think as humans we all enjoy great rivalries.  We were pitted to our screens to watch World Cup action, we root passionately for our sports rivals, especially Red Sox and Yankees, and in the corporate world we have had notable rivalries like ATT and Verizon in the cellular world, Starbucks and Dunkin Donuts in coffee, and lately Apple and Google. 

The latest indication of this rivalry is the acquisition of Songza, a music streaming service by Google, a month after Apple buys Beats.  Last week Google announced Android based smart watches while we all wait for Apple to finally announce its own iWatch smartwatch.  Each competes with devices and libraries, while Google has gone a step further with a build-out of fiber in a few communities.  It makes one wonder if Apple will turn around and buy a cable company.  And while Google has You Tube, some also speculate that Aple needs to buy a content company (Disney was a suggestion) as well. 

And while their business models and strategies don't overlap completely, it is clear that each looks as the other as a rival in the technology field.  The race is not a two man race.  Amazon makes a significant third leg of this stool.  It also competes with devices and content and may one day announce their own smartwatch. 

Google may be Apple's current rival but certainly not its first.  For many years, the rivalry with Microsoft has taken center stage.  But Microsoft has made a number of mistakes including Zune, its iPod substitute.  The Surface tablet may be out there but it pales in comparison to what Google and Amazon are offering nor is there any real smartphone offering.  And Microsoft has had best success most recently in gaming with XBox, competing much more with Sony and Playstation. 

Rivalries make for excitement and keep the competitive juices humming.  We are in store for more announcements by Google and Apple in the coming months.  Will it last as long as a Red Sox and Yankee rivalry, we will just have to keep watching. 

Twitter Shakes Up Executive Team To Spur Growth

Twitter has lost a COO, CFO, Head of Engineering, and VP of Consumer Products as it tries to pursue new growth opportunities.  But Twitter user growth has slowed while losses mount.  But let's be fair to Twitter, their usage is growing, just at a slower pace than previous quarters.  "Twitter’s membership in the first quarter rose 25 percent from a year earlier to 255 million, decelerating from 30 percent growth in the prior period and 39 percent in the third quarter of 2013."  And while 255 million users sounds impressive, it also matters how many are active users. 

Certainly great content helps drive users to share their thoughts through the service.  World Cup matches provide a great example of this as does all the snarky comments for every major awards show.  Still, users may also be growing tired of the service and the limit of 140 characters.  They say a picture paints a thousand words and sites like Instagram and Facebook may be providing too great a competition to the mix.  And the younger demos seem to lately prefer the Instagram route.  Or as I mentioned yesterday, we may simply be getting tired of too much sharing, especially when their ramifications lead to the need to apologize for our too quick tweeting.  Users may finally have figured out that it is time to put down that keyboard. 

For Twitter, the challenge to grow should not overshadow the need to drive revenue over costs and to build out a profitable business.  Changes in the type indicate that the current strategy was not working well enough and a new direction might be needed.  What that new direction will be could interesting.  May I suggest creating subset feeds, some that are categorized as strictly news, sports, or entertainment so that more relevant tweets reach us more quickly.  Just a thought.

Facebook Controlling What We See

I sometimes wonder if social networking is not such a good thing.  It's nice to acknowledge someone's birthday, share photos with friends and family, and engage in meaningful social discourse over politics and policies; but it also comes with a cost.  From coveting our friends vacation destinations, celebrity connections, to social miscues of not being invited to another friend's party, to the despair of cyber-bullying, it brings the full range of both positive and negative behavior.  And this is what we do to ourselves.

When we read that Facebook is experimenting on us, determining whether we see more positive vs. negative posts, then we might want to reconsider the value it brings and whether the animal has broken free too many times from the pen. 

Facebook, Instagram, and other social networking apps are a great sharing opportunity but do we have to be so open to what we share.  Are we doing it to satisfy ourselves or to let the world know just how exciting our life is.  Or should I say, how much more our life is than your life.  Is that the ultimate reason we share?  Psychologists could have a field day understanding why we post and engage in such an open way.  I frankly don't want to read that you visited Dunkin Donuts although I am sure that Dunkin Donuts loves it.  I do love seeing pics of family and friends and to see news of graduations, weddings, and babies.  What that line in the sand is between sharing and boasting is not a clear one.  And perhaps we need to do a better job determining which posts get viewed by which of our groups - family, friends, and acquaintances. 

But I don't need Facebook determining for me what I see or inundating me with too many ads that clutter my feed. Let me decide who can see what I post and what I want to see.  I'm starting to be more careful what I post these days.  And maybe, just maybe, we will all get tired of "eavesdropping" on other peoples' lives through social networking and concentrate more on leading our own lives.