How High Can Apple Shares Go?

For those investors that bought Apple, and those that wish they did, the question being asked remains, how much is Apple worth. In the last year, it has traded for as low as $310 dollars per share and today at a high of $545. Today's article asks the question, how high can Apple reach with the figure of $1000 per share being the pinnacle to attain.

With an iPad 3 possible announcement next week and talk of Apple TV, Apple has a lot of products in the pipeline. It also has a huge cash reserve, and buzz regarding a possible dividend to shareholders. All this talk must make investors salivate. I like the fact that all products point to the iTune and App Store. And the simplicity of working with products is enhanced through connectivity through the cloud. Thus owners of iPads or iPhones will want to add an iMac to their home so as to take advantage of its easy sharing of data. An Apple consumer owns more than one of its products, consumes from its online store, and is slowly adding more devices and more connectivity in the home and among the family members.

Apple shares could certainoly hit a bump in the road, but as they have survived through a bad economic period of history and the death of its visionary, Steve Jobs, the future outlook appears brighter and more profitable.

Will DVD Sales Rise From A Link With The Cloud?

When was the last time you bought a cassette tape? When CDs were created, no one tried to sell you a cassette with every CD you bought. Most likely because you were still buying a manufactured item. But with the rise of digital and now the cloud, the need for manufactured CDs and even DVDs is less and less. Yet, it seems that companies aren't ready to breakaway completely.

The rise of UltraViolet and in the UK, Blinkbox, is still being tied to the purchase of a DVD. All with the hopes of improving a dying distribution model. And while this strategy may lengthen the product life, the patient will eventually die and be buried. Such as it was for the 8 Track, the cassette, and soon the CD and DVD.

For the short run, a dual purchase makes everyone happy. "This is a fascinating link-up between atoms (DVD) and bits (streaming). The added value of the dual option could drive more plastic-disc sales at the checkouts." Ultimately, the customer no longer seeks to clutter their homes with jewel boxes of various shapes and sizes when their digital devices both store and play. The arrival of cloud based storage enables access of this same content wherever and whenever you want, although it requires that wireless access is present.

How long will this shared model last? The speed of adoption of tablets indicates that this process should only last a few more years at best. Notice that no tablet comes equipped with a DVD or CD reader; even laptops are being built without the hardware. Change is a coming and like the Laser Disc, the DVD will also become part of our history.

Sony Changing The Window On Digital Movies

Sometimes you have to just move on. While we like to hang on to old ways and old habits, change is inevitable. And when you finally give change a chance, positive things can happen. For Sony, it means no longer being rigid on the order in which a movie gets sold or rented. The DVD model is no longer the customer choice for purchase; the world is digital and so it means changing the order to move digital sales up in the pipeline.

Sony's first step in change is with it's release "Bad Teacher". By moving up digital purchases ahead of rentals and DVDs, they saw a marked increase in revenue. "More good news for Sony: It says demand for digital rentals didn’t seem to drop once they became available two weeks after digital sales started. And physical sales — still the most important source of income for the studio — don’t seem to have suffered, either." Sounds to me like a successful test and one that should be repeated with every movie release. How quickly Sony embraces this new strategy remains to be seen; for now, they seem to like to classify it as a test only.

With the rise of cloud based services from Apple and Amazon, the switch to digital will only progress more rapidly. As digital becomes the preferred distribution choice, DVD sales are destined to decrease faster. It is the inevitable results of change in consumer preference. The pace of this switch can be slowed with aggressive pricing discounts. Where once DVDs cost $20 or more, today they are in the $5 bin. And at that price they become a great stocking stuffer too.

Apple TV Sets Coming in 2012

The Steve Jobs' biography refers to products in the pipeline even after his death and news around an internet TV continues to spread. There is word that Apple is working with Sharp to create the screen and that the set will do for TV what the iPod did for music. "Last month, it was reported that Apple had created a prototype of an internet-connected television product that can stream content from the cloud and use voice-control via Siri, the system incorporated into Apple's new iPhone 4S."

Great for those that don't use a cable box to receive their TV content, but what will Apple do to work successfully with cable operators. The cable remote has been repeatedly chastised as too many buttons, with too few features. It is too easy to press the wrong button and mistakenly turn off the TV or switch the channel. Apple successfully took a device and made it work with 1 button and then ultimately with simple touch. Today, a number of functions are successfully launched with voice, through Siri. It is less about the TV set and more about how one accesses its features.

What else is in store and what will a Job-less Apple look like, we can only wait and see. Let's hope that innovation remains its mantra.

Premium On-Demand Derailed

DirecTv tried to offer theatrical releases 8 weeks after they hit theaters into the home at premium prices and the results were negligible. Universal and Comcast tried to put an even higher priced model together for a film released just three weeks after it hit the theater and that program has been dropped. "After drawing boycott threats from Cinemark and a few small theater chains across the country, Universal has decided that it will no longer release their Ben Stiller/Eddie Murphy vehicle, Tower Heist, on-demand." It seems the backlash from theater exhibitors has sent a message to online distributors, "don't mess with us."

But perhaps the analysts also saw that the consumer was not interested in paying such an exorbitant price, almost $60, for a 1 day rental. And while the thought was that families would throw a movie party and invite friends over to watch; in my family, that sometimes happens when my kids invite friends over for a sleepover and they are looking for something to watch on TV.

With the loss of DVD rentals, content creators, especially movie companies are seeking other windows to recapture lost revenue. But replacing a DVD window with a premium on demand window doesn't seem to accomplish that result. Rather than add revenue it causes a backlash that resulted in theaters dropping those films from screens. It seems, consumers, faced with an overwhelming array of online choice, prefer now to simply rent or buy digital copies. With renting, the choices are plentiful at prices far lower than the premium model. Subscriptions for endless titles at under $10 a month and even on demand from HBO, Starz, and others. For those that prefer to own, digital copies from Apple and Amazon top the list, also at prices far lower than a $60 rental.

With DVD sales declining, will consumers rent more or buy more digital downloads? Certainly Apple and Amazon are being aggressive as they build up their cloud-based services. And as car manufacturers better enable their back seat screens to connect with more than just a DVD player (iPods, iPhones, et al), consumers will buy more digital downloads for their families. Movie studios need to better embrace these new opportunities; distribution windows should continue to matter and it makes no sense to hurt theater owners when there is no revenue upside. The easier you make digital distribution, the more it will be used.

Apple Prefers to Build Than Buy

Why buy from someone else when you have the resources and vision to build it from scratch. For those like me thinking that Apple might just buy Hulu or Netflix and merge it with it's own iTunes Store, comes word that the opposite may be true. "Apple might be ready to roll out its own video subscription service similar to Amazon and Netflix, Peter Misek at Jefferies reports in a note this morning. Specifically, he says, 'As part of Apple's roll-out of cloud video services (and eventually an iTV), we believe Apple has unannounced deals with all/most of the studios/TV networks that are similar to the subscription streaming deal between Amazon and CBS.'"

Frankly, not too hard to believe. Apple has always been a tough negotiator. Heck their 30/70 subscription deal with newspapers and magazines for the iPad indicates that ability. Rather than accept the current deals tucked inside an acquisition, why not negotiate independently and build the best possible subscription model. Hopefully, with such a deal, Apple will enable a video content platform as large, if not larger than Amazon, Hulu, and Netflix. If the content deals are thin, this may not be the most desired outcome.

When could such an announcement be made, most suspect not till later next month. Apple has never been shy about doing things on their own timeline. Coupled with the re-release of Apple TV and its iCloud platform, this could potentially be a very big news story.

Apple Needs Content

Apple has taken another leap into the TV set with a new and improved "converter box" experience. No longer will the Apple TV need to access content from a mac, now it can go directly to the clouds. "Apple TV had previously allowed users to rent television shows from iTunes, but the new update essentially allows them to use iTunes like a storage locker for purchased shows that can be watched at any time. Rentals are still allowed, but part of Apple’s pitch for iCloud has been the ability to access your files essentially anywhere at any time if you’re using an Apple mobile device." Easier to access, easier to watch, it's a whole new experience.

But like the boy in "Oliver", we want more. For Apple it means more content. Netflix users have argued that their is limited content available to stream. Apple users will demand even more content for viewing. As Apple moves down this path of cloud access for content, consumers will expect that they will have ultimate choice: Do they want to rent or own the content, do they want a hard copy or just streamed, can they rent for one day or get a discount for multiple days. And that there will be choice.

If Apple is truly in the hunt for acquiring a content distributor, a Hulu or Netflix to fill the queue. Or Apple needs to make more aggressive deals with networks to access their content directly. The consumer is yelling for more and Apple is clearly moving in that direction to deliver.

Wal-Mart Trying Hard To Compete With Netflix, Apple And Others

Big box stores like Wal-Mart are recognizing that they need to have a strong digital business to survive and compete. And a dot com strategy must be more thaan simply selling its in-store merchandise online. It is why Wal-Mart continues to push a streaming media video play. "A cloud-based video movie service, Vudu lets customers rent or buy movies over the Internet and stream them to their TVs, Blu-ray players and a variety of Vudu-enabled devices such as Sony's (SNE) PlayStation 3 and HDTVs from LG Electronics, Sharp and Panasonic (PC)." Vudu was bought by Wal-Mart last year and is being rolled out next week.

Wal-Mart hopes that it is not too late to the game, with Apple, Netflix, Amazon, and others also in this space. "Unlike competing services such as Netflix, the Vudu platform on Walmart.com does not offer any subscription service, and the retailer said it does not currently plan to offer such a service." A one off strategy may not be enough to work as companies are looking hard at subscription strategies as a means to better forecast and achieve higher revenues. And Wal-Mart may need to add music and other digital deliverables to its mix as demand for these other downloads grow as well.

Like the early days of cable, when there were many operators, the streaming media business will quick enough find that it needs to consolidate with others to control and own the platform. Perhaps Wal-Mart needs a partner like Barnes and Noble to add a digital book component to its mix. Or perhaps it could align with Apple to mutually support their new cloud approach. At the end of the day, many platforms for distribution streaming will merge into few and the leaders will be the ones to pursue consolidation and growth strategies.

New York Times - Short Term Pain, Long Term Gain

The printed piece is having a hard time, as is all physical media. The technological revolution that has transformed information, both video and audio, from disk and paper to bits and bytes, is only changing faster. Data is no longer simply delivered, but shared in the cloud, available wherever, whenever, and however you want. For companies whose fortunes have been in physical media, their future lies in digital media. But there is a cost to the ROI and if you don't pay, your company will die.

Netflix is transforming, Blockbuster didn't. Barnes & Noble is transforming, Borders didn't. And newspapers and magazines are transforming, some faster than others. For The New York Times, it means a growth in digital subscribers as print subscription declines. "For those tracking the success of the NYTimes.com (NYSE: NYT) meter that started ticking in March, the New York Times says it ended the second quarter with more than 1 million digital subscribers." A quarter million are digital only customers, a number that will surely increase as tablets and e-readers continue to gain momentum.

And with that shift comes lower operating costs, both in the printing and distribution, and higher margins. For consumers, faster access, as well as more timely, able to refresh and add new content to meet the demand for breaking news. Consumers are getting more comfortable accessing newspaper and magazine articles off digital devices. Subscription models still need to be tweaked to provide flexibility for purchase options with a value proposition marketing message. In the early days of print, you got a cool phone with your Sports Illustrated subscription, today it could be access to other digital products - a month of MLB.com, a month of Sirius.com, or a free movie download. A little incentive marketing can go along way.

For The New York Times, the short term pain will only result in future profitability. These steps into the digital world are necessary if publications like these want to survive and compete. Stay focused and innovative, NYT, digital is here to stay and you are heading in the right direction.

Apple's Fourth Screen, the HDTV?

Terrific article today in AllthingsD.com on speculation that Apple will manufacture and sell Hi Def TV sets. "At $328 billion, Apple’s market capitalization is the second largest among U.S. companies. How much higher can it go? Plenty — particularly if the company launches that Internet-connected HDTV it’s rumored to be developing." An Apple TV set would stand with the Mac, Ipad and iPhone as a fourth screen for the consumer. The key, as the article notes, is differentiation. Unlike the other devices, an Apple HDTV set would have to manage TV viewing in a whole new way. And it is hard to imagine a big screen set with touchpad technology, so important in the other three devices.

What I would love to see from Apple is more of their Airplay and cloud technology incorporated behind the TV set enabling any TV to easily share content from numerous sources, the mac with iPhoto slide shows or iMovie videos, from the iPhone with recently taken pictures, or from the cloud with iTune theatrical movies and TV shows. Some might call that the essence of the Apple TV. Where Apple excels is the simplicity of connection, the easy of use, and the mobility across devices. Why build a TV set when so many other manufacturers are already selling at many different price points.

The article contends that the lack of cord cutting may make an Apple HDTV a non issue. I believe that more innovation and marketing of the AppleTV, currently available, is the connection Apple needs to own the fourth screen and the home.

New Settop Box, New Modem For Comcast Xfinity

From this week's Cable Show, Brian Roberts, CEO of Comcast introduces the audience to it's next generation converter box and modem.



Utilizing a Rovi guide and data stored in the cloud, the set top is designed to provide a graphically richer and faster user experience. Roberts "...used the time for a demo of one technology the company hadn’t yet decided how to deploy—1 Gbps downloads over a cable modem, which we were first to report. But most of the demo went to Xfinity TV features already used in Comcast’s Augusta, Ga. system, including nimble and robust search, apps and DVR management." I have to admit, I had seen this guide demonstration last year inside Comcast Corp as well as other projects including 3D. It will be a very impressive undertaking to switchout boxes and move subscribers to this new experience. With so much legacy set top boxes in the field and the capital costs associated with conversion, I wonder the time frame to bring this rich new experience into the home. And I worry that by the time Comcast gets even to scale, that consumers may have already ditched the set top and cut the cord to cable.

As this rich data is coming from the clouds, so should the content. The boxes seem to continue to rely on an EBIF approach while CE manufacturers are gaining ground with web connections for online content. It is this threat that should most concern the cable industry. Can Comcast deploy these new boxes fast enough to keep subscribers from downgrading and dropping video service? And can Comcast get it's programming partners on board to enable live streaming of channels to authenticated mobile devices outside the home. Certainly Comcast has the deep pockets but it needs to happen sooner rather than later.

Networking DVRs Finding More Opportunity

Cablevision's early push for a cloud based DVR service for its subscribers showed that they clearly saw the future. And yet they were also forced to go it alone against content companies concerned with remote digital copies. It has taken Cablevision some time to settle lawsuits and move forward. And only recently has Cablevision "...started providing a remote-storage recording service in the city and that it had stopped buying physical digital video recorders." Well another cable operator may have also seen the light.

"Comcast will test the so-called cloud-based recording service in some markets late this year or early next year," according to Tony Werner, their CTO. With the legitimacy of the cloud pushed by Cablevision, Apple, and others, the time to remove the set top box from the TV seems to have arrived. And a cloud based or Network DVR (N-DVR) should also help cable operators to offer DVR content to other non TV devices, providing more benefits to a cable subscription package.

Certainly, this should be a concern to TV manufacturers, like Tivo. Hopefully, their software may be of value to cable operators in a N-DVR world; otherwise, there may be little reason for cable operators to want to negotiate with Tivo, simply because cable operators stop buying set top boxes.

But there are concerns with a N-DVR approach. For customers, a concern might be that a network version might have limited trick features attached to it. It is likely that a N-DVR will limit the commercial skipping fast forward feature that has been so widely applauded by DVR users. Another concern is that some content providers may force operators to not allow N-DVR of their content. For example, live sporting events like MLB or NFL games that viewers might N-DVR at home and then would watch on a mobile device. It limits for the sport content the chance to sell a second subscription web package to that cable customer. And customers might get annoyed that some content cannot be saved for later.

Regardless, the cloud is pushing ahead and will no doubt create some initial unsettling conditions. Over time, it will be the ideal choice for the sharing and watching of content, whenever, wherever, and whatever you choose.

Should Sirius Worry About Amazon Cloud Drive Service

Amazon may have just beat Apple to the punch with it's Cloud Drive Storage Service, though Apple has been probably not too far behind. It seems that if we are all saving the same songs, video,and other data, wouldn't their be economies of scale to centralize this content and avoid the waste of replication. It turns our devices into receivers and requires constant access to the web, but it makes a ton of sense.

Should Apple be nervous; probably not. Consumers still like to own and the cost to access may be high. Sirius has little to worry about, too. "What does Cloud Drive mean to Sirius XM? Initially very little, but as consumers adopt the service, and combine it with smart phones connected to the dashboard, people will have access to a wealth of personalized playlists that they may begin to listen to instead of Sirius XM." Sirius has already had to contend with iPods and have survived quite well. Consumers don't want to purchase every song they want to listen to; Sirius and terrestrial radio allow listeners to enjoy without incremental purchase. And Sirius brings exclusive content that Amazon can not offer. "Cloud Drive does not offer live content, nor does it provide the depth of news, talk, and sports that Sirius XM does."

Cloud Drive Service will be the buzzword of this decade. DVR content should soon find its way in the clouds as opposed to individual set top boxes. And consumers will get more and more comfortable saving their personal pictures and data in the clouds instead of a hard drive. In our quest for easier mobility, remote access means constant availability whenever and wherever we are. And that is what makes Cloud Drive Service a winner.