For those that have cut the cord to cable TV, a new competitor may be trying to woo you back. The acquisition of DirecTv by AT&T has opened up a new streaming service of cable channels called DirecTv Now. And with an introductory price of just $35 a month, subscribers will get access initially to 60+ channels; spend a little more and get more packages of services. Of course there is the added fee of broadband access and AT&T is offering its customers no data charges to access the service. That is a huge win for AT&T Wireless and DirecTv Now customers. Data streaming costs could potentially add to customer spending should they choose these streaming services over cable.
DirecTv is the latest entrant in the streaming business for live channels. They will be competing with Dish Network's Sling TV and Sony's Playstation Vue. If live isn't important and on demand is what you care about, then you can always continue subscribing to Netflix, Amazon Prime, Hulu, and others. But should live streaming become a lucrative business, expect these services to try and build out their business to include access to live channels, too.
Can cable television operators like Comcast and Charter find subscribers coming to them or fleeing for these streaming services? It depends on what low cost packages they offer to retain their value proposition. Unfortunately where I live, Comcast has announced plans to raise fees for its various services. Comcast and others will have to rely on its other businesses to grow. What affect this cable price increase has on its subscriber base will be seen next year in its quarterly earnings statement. I fear they may be hurt as streaming services like DirecTv Now take a bigger and bigger bite from their cable business.
DirecTv Now isn't taking their new business for granted. Reaching out to younger demo audiences, they have created an exclusive channel around pop music star Taylor Swift. Expect more content exclusivity to be announced across all competitors to woo customers to subscribe and retain their respective services. Competition will be good news overall for customers.
Showing posts with label Hulu. Show all posts
Showing posts with label Hulu. Show all posts
Tuesday, November 29, 2016
Friday, August 26, 2016
CBS's Newest Revenue Stream
The rise of streaming, the challenge to increase ad revenue as well as licensing of its network to cable companies all play into the strategic mix as CBS seeks revenue growth. Certainly content matters and quality shows that generate buzz hope to find audiences that stay loyal to their plots. And building new distribution outlets to grow as a business remain relevant.
In the case of CBS, they chose not to be a partner in the Hulu streaming business. The other three broadcasters NBC, ABC, and Fox, and now Time Warner have ownership shares in the Hulu business. Instead, CBS is trying something new, its own streaming subscription service called CBS All Access. For a $5.99 monthly fee, subscribers get "more than 7,500 on-demand episodes from the current season and previous seasons of classic shows, as well as the ability to stream local CBS stations live in more than 150 markets across the U.S." according to Multichannel News. And following the learning curve of other streaming services like Amazon and Netflix, CBS All Access will offer original productions too, "including Star Trek: Discovery, a spin-off of The Good Wife and a new digital edition of Big Brother."
The question this strategy hopes to answer, is it better to build a new service or partner with an existing one. Is there enough content of interest to subscribers to entice them to join? Can marketing sell the value of adding another streaming service charge to the entertainment household budget? CBS is trying to make it easy to access its streaming service with Roku, Apple TV, Chromecast, XBox, Amazon Fire TV and more. Accessibility does not seem to be a problem.
But I wonder if going it alone and not with Hulu, CBS studied whether a brand name associated with the broadcast network or one without a connection made more sense. Will customers more likely embrace the subscription service because of the CBS name or feel that they should be getting this content already if they are current cable subscribers with on demand. Would it have better suited the service to create a more unique name like Carousel or Tainment or StreamCity to compete in the streaming media landscape? Was CBS All Access a better name choice to drive subscription revenue? We will watch and see.
In the case of CBS, they chose not to be a partner in the Hulu streaming business. The other three broadcasters NBC, ABC, and Fox, and now Time Warner have ownership shares in the Hulu business. Instead, CBS is trying something new, its own streaming subscription service called CBS All Access. For a $5.99 monthly fee, subscribers get "more than 7,500 on-demand episodes from the current season and previous seasons of classic shows, as well as the ability to stream local CBS stations live in more than 150 markets across the U.S." according to Multichannel News. And following the learning curve of other streaming services like Amazon and Netflix, CBS All Access will offer original productions too, "including Star Trek: Discovery, a spin-off of The Good Wife and a new digital edition of Big Brother."
The question this strategy hopes to answer, is it better to build a new service or partner with an existing one. Is there enough content of interest to subscribers to entice them to join? Can marketing sell the value of adding another streaming service charge to the entertainment household budget? CBS is trying to make it easy to access its streaming service with Roku, Apple TV, Chromecast, XBox, Amazon Fire TV and more. Accessibility does not seem to be a problem.
But I wonder if going it alone and not with Hulu, CBS studied whether a brand name associated with the broadcast network or one without a connection made more sense. Will customers more likely embrace the subscription service because of the CBS name or feel that they should be getting this content already if they are current cable subscribers with on demand. Would it have better suited the service to create a more unique name like Carousel or Tainment or StreamCity to compete in the streaming media landscape? Was CBS All Access a better name choice to drive subscription revenue? We will watch and see.
Tuesday, August 23, 2016
The Profit In Data - Storing And Streaming
I'm struck by an epiphany as I watch how much data I continue to acquire. I don't mean bookshelves or albums or DVDs; they get less filled as my books, my music, my photos, my videos, my life are all now bits and bytes of data. And I see too that the cost to store and stream continues to grow as I accumulate more stuff.
Already, I have on my computer over 15,000 photos, the more recent ones requiring more memory than the ones taken in 2000. My iTunes account includes more and more downloaded books, music, and videos and my computer's memory is nearly at capacity. My Carbonite account helps safeguard these digital assets, at a cost, as I sense that I will need a new computer with more memory in the not too distant future. And Apple is gracious enough (lol) to sell me more cloud backup space for my iPhone and iPad. The costs to store will only continue to rise.
And then there are the costs to stream data. Subscription fees from folks like Netflix, Hulu, and Amazon, help drive up the monthly costs. One's love of music means monthly subscription plans from Pandora, Spotify, and Apple Music. We no longer need to own when we can rent and stream as much as we want. But the costs to access also extend to the companies that sell us data plans to receive these streaming signals. The more we stream, the more we consume, the more data services we buy. Of course, the speed to receive these streams can also come with a higher cost; the faster the stream, the more we pay.
As we move further and further from physical media to digital media, the cost to access data, stream it, and receive it will only increase. And the profits will only grow. Data is our new gold and we are mining it at an ever increasing pace. It is the business to be in.
Already, I have on my computer over 15,000 photos, the more recent ones requiring more memory than the ones taken in 2000. My iTunes account includes more and more downloaded books, music, and videos and my computer's memory is nearly at capacity. My Carbonite account helps safeguard these digital assets, at a cost, as I sense that I will need a new computer with more memory in the not too distant future. And Apple is gracious enough (lol) to sell me more cloud backup space for my iPhone and iPad. The costs to store will only continue to rise.
And then there are the costs to stream data. Subscription fees from folks like Netflix, Hulu, and Amazon, help drive up the monthly costs. One's love of music means monthly subscription plans from Pandora, Spotify, and Apple Music. We no longer need to own when we can rent and stream as much as we want. But the costs to access also extend to the companies that sell us data plans to receive these streaming signals. The more we stream, the more we consume, the more data services we buy. Of course, the speed to receive these streams can also come with a higher cost; the faster the stream, the more we pay.
As we move further and further from physical media to digital media, the cost to access data, stream it, and receive it will only increase. And the profits will only grow. Data is our new gold and we are mining it at an ever increasing pace. It is the business to be in.
Friday, August 12, 2016
Cord Cutting Less Of A Worry
A CNBC story tells us that research from SNL Kagan indicates that "a flattening pace of cord-cutting and a projected broadband boost of 8
million subscribers over the next 10 years, media companies are quickly
shifting the way their content gets delivered to consumers." Truth is, the best way to stream is with broadband. The cost of data from cellular, mainly because of plans that charge by the gigabyte, makes an impact on the household. Households may not be buying higher packages of cable, but they are still getting the basic cable package and bundling broadband. With a broadband package, consumers have wireless accessibility for tablets and smartphones. And they get authenticated access to wireless outside the home. In the Northeast Xfinity, Optimum, Time Warner Cable and others have been building out their wireless platforms to support their subscribers.
Consumers have been moving toward streaming as a preferred way to view content. Streaming both cable and OTT content to watch on all their devices. NBC has just announced that they have already served over 1 billion streams of Olympic content. Time Warner Inc. made a big investment in Hulu, a streaming subscription service. And Disney/ESPN are finally looking at a streaming subscription package for their sports content.
The success of broadband enables cable companies to drive bundling packages in a way to keep households connected to cable TV as they drive broadband subscription growth. And per the report, the strategy has kept cord cutting from becoming a bigger issue.
Consumers have been moving toward streaming as a preferred way to view content. Streaming both cable and OTT content to watch on all their devices. NBC has just announced that they have already served over 1 billion streams of Olympic content. Time Warner Inc. made a big investment in Hulu, a streaming subscription service. And Disney/ESPN are finally looking at a streaming subscription package for their sports content.
The success of broadband enables cable companies to drive bundling packages in a way to keep households connected to cable TV as they drive broadband subscription growth. And per the report, the strategy has kept cord cutting from becoming a bigger issue.
Thursday, August 11, 2016
Will Content Glut Reach A Tipping Point?
The rise of digital distribution has created an insatiable thirst for more content to fill the bucket. Video content is being produced not just for broadcast or cable, but for streaming services as well. We are seeing the numbers rise for both short form content, user generated content, and scripted series as well. And as Investopedia tells us, "John Landgraf said the number of scripted television shows next year
could reach 500, from an estimated number between 430 and 450 this year,
driven mainly by a rise in shows commissioned by streaming services." Landgraf, CEO of FX Network, places responsibility on the streaming media services like Netflix and Amazon. But Hulu, of which Fox Networks are an owner, could also be named as well.
The challenges of producing so much content include finding quality programs amid the morass of choice, viewers finding the needle in a haystack of endless content possibilities, and measuring success in today's overly saturated content world. With so much content choice possible to see and hear, focus becomes close to impossible and harder even to search for and find. With such a glut of content, it becomes even more important for us to use recommendation, marketing, and advanced search to help users find a match to content they would enjoy viewing.
The drive to create content is only advancing. In coming years, the numbers will only increase. Today, in fact, Turner announced an investment in Refinery29, a female skewed destination for fashion and entertainment, and one in which Scripps is also an investor, to support more content that could possibly make its way onto their channels. Content is the fuel that runs digital media distribution. Consumer thirst for more helps to drive subscription and cable revenue streams. And with advertising alongside it in some way, deliver more profit to media companies. Have we reached a tipping point? Probably not, although the challenge for creative minds is to make the content produced quality worth watching.
The challenges of producing so much content include finding quality programs amid the morass of choice, viewers finding the needle in a haystack of endless content possibilities, and measuring success in today's overly saturated content world. With so much content choice possible to see and hear, focus becomes close to impossible and harder even to search for and find. With such a glut of content, it becomes even more important for us to use recommendation, marketing, and advanced search to help users find a match to content they would enjoy viewing.
The drive to create content is only advancing. In coming years, the numbers will only increase. Today, in fact, Turner announced an investment in Refinery29, a female skewed destination for fashion and entertainment, and one in which Scripps is also an investor, to support more content that could possibly make its way onto their channels. Content is the fuel that runs digital media distribution. Consumer thirst for more helps to drive subscription and cable revenue streams. And with advertising alongside it in some way, deliver more profit to media companies. Have we reached a tipping point? Probably not, although the challenge for creative minds is to make the content produced quality worth watching.
Wednesday, August 3, 2016
Is Time Warner More Appealing To Apple
Time Warner released its quarterly earnings and the news seems to be well received. With future earnings expected to rise, the content business is growing. At the same time, Time Warner announced plans to buy a 10% stake in Hulu, a streaming competitor of Netflix and Amazon. HBO continues to operate outside the Hulu platform with its subscription service HBO Go. That service is also growing. And lastly, there are rumors that Hulu plans to build a streaming platform to offer live feeds of cable nets. Adding services like CNN, TBS, and TNT to Disney and Fox sounds like the start of a compelling OTT competitor to cable.
Does this make Time Warner a more interesting asset for Apple? To own HBO, cable nets and a piece of Hulu could be a real get for Apple. And it would instantly propel Apple into the video streaming space with major content players. Add to that the Warner Bros studio and Apple could apply its influence into more immersive theatrical film experiences.
Does this make Time Warner a more interesting asset for Apple? To own HBO, cable nets and a piece of Hulu could be a real get for Apple. And it would instantly propel Apple into the video streaming space with major content players. Add to that the Warner Bros studio and Apple could apply its influence into more immersive theatrical film experiences.
Friday, July 22, 2016
Redbox Tries Streaming Again
When Redbox first partnered with Verizon three years ago, their joint venture, titled Redbox Instant, was seen as a possible competitor to Netflix and Hulu. It was a strategy to expand from the DVD kiosk business toward a streaming one with a partner with a great deal of experience in mobile. For whatever reason, that venture failed and Redbox Instant died last year.
Since then, Verizon has been experimenting with their own subscription streaming mobile service. And now Redbox has decided to go it alone too with a new venture dubbed Redbox Digital. But rather than be a monthly license fee subscription business, it appears that this new venture will attempt a transactional model. According to Variety, "Redbox hasn’t said anything about pricing or catalog for Redbox Digital, but one can assume that it will largely mirror that of other services that allow users to pay to rent or own individual titles, including iTunes, Vudu and Google Play. That means that streaming rentals will likely be significantly more expensive than the $1.50 Redbox customers currently pay for physical disc rentals."
Why did the Verizon - Redbox Instant partnership fail? What did each side learn as they independently create other digital streaming businesses? And can either of these two succeed against the respective incumbents. The opportunity is there as long as each can learn from their past mistakes. I'd love to help.
Since then, Verizon has been experimenting with their own subscription streaming mobile service. And now Redbox has decided to go it alone too with a new venture dubbed Redbox Digital. But rather than be a monthly license fee subscription business, it appears that this new venture will attempt a transactional model. According to Variety, "Redbox hasn’t said anything about pricing or catalog for Redbox Digital, but one can assume that it will largely mirror that of other services that allow users to pay to rent or own individual titles, including iTunes, Vudu and Google Play. That means that streaming rentals will likely be significantly more expensive than the $1.50 Redbox customers currently pay for physical disc rentals."
Why did the Verizon - Redbox Instant partnership fail? What did each side learn as they independently create other digital streaming businesses? And can either of these two succeed against the respective incumbents. The opportunity is there as long as each can learn from their past mistakes. I'd love to help.
Tuesday, July 19, 2016
Netflix "Ungrandfathered" Me
Hey Webster Dictionary, it's time to add a new word - ungrandfathered. Per Netflix, it is the act of eliminating any price discount associated with being a long time subscriber and substantially raise your monthly fee to match with new subscribers. And while Netflix may see a revenue bump, they may also face higher than typical churn rates too. And with significant competition from Amazon, Hulu and others, Netflix can't expect rate increases to help their future.
Of course, Netflix has more to worry about as my blog yesterday detailed. When quarterly financials came out, Netflix failed to hit a number of metrics, including important growth numbers. And while there was some growth, it was well short of expectations. Churn will only erode those gains. It is time for Netflix to actively find additional revenue streams to drive business growth. And they must start soon.
Of course, Netflix has more to worry about as my blog yesterday detailed. When quarterly financials came out, Netflix failed to hit a number of metrics, including important growth numbers. And while there was some growth, it was well short of expectations. Churn will only erode those gains. It is time for Netflix to actively find additional revenue streams to drive business growth. And they must start soon.
Monday, July 18, 2016
The Future Success Of Netflix
Nothing lasts forever. Even Netflix knows that; they watched their DVD business erode while working to navigate the streaming world. It was a bumpy ride along the way but the result so far has been quite impressive. But growth appears to be declining, according to the Wall Street Journal, and international challenges and content costs aren't helping.
In August, the remainder of the U.S. subscriber base will see its monthly fee rise to $9.99; for my household that is $2 more a month or a 25% increase. Yet that is not enough to satisfy investors in the business seeking more future growth from the streaming giant against greater competition from Amazon and Hulu. So what is Netflix to do as its Act 3?
Of the options to consider, Netflix might want to build out a streaming tier of live content, at an incremental cost, as a skinny bundle to drive more cord cutting. They could add more advertising to the mix, either with an ad supported option or with more sponsored content to the stream. Netflix might consider growing through expansion; perhaps the purchase of a studio like Paramount or some cable networks. For Netflix, standing still is not an option. They learned that lesson from their DVD rental business. Existing growth of its subscriber base will dry up and future revenue growth must come from other business platforms.
In August, the remainder of the U.S. subscriber base will see its monthly fee rise to $9.99; for my household that is $2 more a month or a 25% increase. Yet that is not enough to satisfy investors in the business seeking more future growth from the streaming giant against greater competition from Amazon and Hulu. So what is Netflix to do as its Act 3?
Of the options to consider, Netflix might want to build out a streaming tier of live content, at an incremental cost, as a skinny bundle to drive more cord cutting. They could add more advertising to the mix, either with an ad supported option or with more sponsored content to the stream. Netflix might consider growing through expansion; perhaps the purchase of a studio like Paramount or some cable networks. For Netflix, standing still is not an option. They learned that lesson from their DVD rental business. Existing growth of its subscriber base will dry up and future revenue growth must come from other business platforms.
Monday, April 18, 2016
Amazon Prime Has Unbundled
For those cord cutters who don't want to pay $99 a year for Amazon Prime and its entertainment video package, Amazon is offering a monthly rate instead. For only $8.99 a month you can subscribe to the service with the ability to cancel anytime. And according to Techcrunch, "You can also choose to subscribe to Prime for $10.99 per month. You get
access to expedited shipping, Prime Video, Prime Music, the Kindle
Lending Library and probably a bunch of other stuff that I’m forgetting." If cash flow is your issue, the new Amazon offering provides a smaller monthly fee.
But if a $99 yearly cash outflow doesn't hurt your pocket, the simple math proves that buying the annual membership is the better value of about $10 for the video only package, $32 more for the full package of Prime services. Heck if Netflix offered an annual discounted payment, they likely would find a strong conversion by existing subscribers although a lower revenue stream.
Will the new payment structure encourage new subscribers to try the Amazon Prime service? There is certaily no savings if all you wanted was the video offerings. Given the pricing, it seems like you might as well pay the higher fee and add books and music to the mix.
I am not an Amazon Prime customer. I don't buy that much from Amazon to see value from the expedited shipping and have yet to find a must-have show that would drive me to purchase. I do believe the ultimate driver for Amazon Prime is geared to those that utilize them frequently for purchases. The entertainment library is the added value to the package. I would love to see a comparison of Amazon Prime to Netflix and Hulu for number of monthly streams and hours per household utilized to see how each service is treated among its subscriber base. Given the proprietary nature of the business, I doubt that info will ever be shared willingly.
But if a $99 yearly cash outflow doesn't hurt your pocket, the simple math proves that buying the annual membership is the better value of about $10 for the video only package, $32 more for the full package of Prime services. Heck if Netflix offered an annual discounted payment, they likely would find a strong conversion by existing subscribers although a lower revenue stream.
Will the new payment structure encourage new subscribers to try the Amazon Prime service? There is certaily no savings if all you wanted was the video offerings. Given the pricing, it seems like you might as well pay the higher fee and add books and music to the mix.
I am not an Amazon Prime customer. I don't buy that much from Amazon to see value from the expedited shipping and have yet to find a must-have show that would drive me to purchase. I do believe the ultimate driver for Amazon Prime is geared to those that utilize them frequently for purchases. The entertainment library is the added value to the package. I would love to see a comparison of Amazon Prime to Netflix and Hulu for number of monthly streams and hours per household utilized to see how each service is treated among its subscriber base. Given the proprietary nature of the business, I doubt that info will ever be shared willingly.
Thursday, April 14, 2016
Customers Are Staying With Their Netflix
When it comes to churn, or subscribers that end their financial relationship with a company, keeping customers engaged and valued assures a company a strong revenue stream. Because once you have lost the trust of your customer, it is much harder and much more expensive to try and win them back.
In the digital media space, churn could kill a business. And folks like Netflix, Amazon, Hulu, Sirius, and HBO Now among the many others count on customers to continue to pay a subscriber fee and use their services. Well according to a Multichannel article, "Netflix is by far the largest subscription OTT video service provider, with 52% of all U.S. broadband homes taking it by the end of last year, but it also enjoys the lowest churn rate as a percentage of its total sub base, Parks Research found in a new study focused on the over-the-top video sector." Certainly, Netflix hopes that trend continues as they raise their monthly fee about a dollar a month.
Many may not notice or even care. Given the aggressive push for content aggregation and a continuous stream of original content on the service. Tomorrow, Netflix presents a new season of Unbreakable Kimmy Schmidt as one such example. And this summer comes another season of Orange Is The New Black. For those fans and others eager to binge on their favorite series or to watch a movie, Netflix keeps its customers from departing. On the other hand, one out of 5 broadband homes did drop a subscription service. How much price elasticity can a Netflix home handle? Netflix hopes to keep their churn low while eking out more revenue.
In the digital media space, churn could kill a business. And folks like Netflix, Amazon, Hulu, Sirius, and HBO Now among the many others count on customers to continue to pay a subscriber fee and use their services. Well according to a Multichannel article, "Netflix is by far the largest subscription OTT video service provider, with 52% of all U.S. broadband homes taking it by the end of last year, but it also enjoys the lowest churn rate as a percentage of its total sub base, Parks Research found in a new study focused on the over-the-top video sector." Certainly, Netflix hopes that trend continues as they raise their monthly fee about a dollar a month.
Many may not notice or even care. Given the aggressive push for content aggregation and a continuous stream of original content on the service. Tomorrow, Netflix presents a new season of Unbreakable Kimmy Schmidt as one such example. And this summer comes another season of Orange Is The New Black. For those fans and others eager to binge on their favorite series or to watch a movie, Netflix keeps its customers from departing. On the other hand, one out of 5 broadband homes did drop a subscription service. How much price elasticity can a Netflix home handle? Netflix hopes to keep their churn low while eking out more revenue.
Thursday, February 18, 2016
Content Not King Confirmed By Yahoo
So original content costs more than syndicated content. And proprietary content is more valuable to a site than open content. And some combination of each makes a successful digital content strategy. Just ask Netflix, Hulu, and Amazon Prime. But Yahoo couldn't make it work with its Yahoo Screen app, another killed idea by a company that is declining quickly in the digital universe. A once promising brand with a easy to remember brand name has lost its cache and its way. What happens next to some of their remaining "stars", like Katie Couric and David Pogue? The hour glass indicates their time at Yahoo may also be nearing an end.
Tuesday, February 9, 2016
If Content Is Not King, Then What Is
It seems that content is no longer deemed so kingly. Viacom shares are down, as are CBS, Time Warner, Fox, and Disney. The future TV viewer cares little for linear TV channels and we are all growing tired of intrusive and too many commercials. Even this year's Super Bowl ads, usually the cream of the creative crop, were duds. And given how fragmented viewership is these days, harder than ever to determine what successful content is. It seems that content may have lost its crown. So who is King of Media?
In the tug of war between content and distribution, the distribution side has to now be carved out into different verticals. Cable operators saw a reversal in their subscriber numbers, showing growth and a hopeful long term trend away from cord cutting. But that will take a few quarters to decide. The cellular companies have been pulling no punches in their ad messaging, with T-Mobile going hard against Verizon. And digital content platforms like Netflix, Amazon and Hulu may need to find more revenue streams when subscriber growth wanes. Of the three, Amazon may be more stable given its diversified business that goes beyond content distribution.
So who is King? If content has given up the crown, distribution has yet to show that it has more power. Perhaps Comcast had it right all along; be both content and distribution, NBC Universal and Xfinity, and stay the course.
In the tug of war between content and distribution, the distribution side has to now be carved out into different verticals. Cable operators saw a reversal in their subscriber numbers, showing growth and a hopeful long term trend away from cord cutting. But that will take a few quarters to decide. The cellular companies have been pulling no punches in their ad messaging, with T-Mobile going hard against Verizon. And digital content platforms like Netflix, Amazon and Hulu may need to find more revenue streams when subscriber growth wanes. Of the three, Amazon may be more stable given its diversified business that goes beyond content distribution.
So who is King? If content has given up the crown, distribution has yet to show that it has more power. Perhaps Comcast had it right all along; be both content and distribution, NBC Universal and Xfinity, and stay the course.
Monday, January 18, 2016
As Cable Rates Rise, Expect More Cord Cutting
Programming license fees continue to rise and cable operators respond by raising monthly subscription rates to its customers. According to Multichannel, cable rates are expected to rise about 3% in 2016. It amounts to a few dollars more each month but consumers are already getting tired of any and all increases. Comcast rates are rising just as they planned to move channels off basic to more expensive digital tiers. That means that consumers are paying more for less. Skinnier packages don't necessarily mean lower costs.
What will subscriber levels look like this year. Some cable operators have seen a slowdown in lost customers and try to point to a reversal in the trend toward more cord cutting. First quarter subscriber levels should dispel those myths. As OTT networks like Amazon Prime, Hulu, and Netflix continue to push more original programming, and customers become more inclined to use them over cable TV for their video offerings, the value of cable decreases. Cord cutting will only become more severe. And for households on a limited budget, cable TV will stop becoming a must have for the home.
Millennial usage has significantly shifted from the big screen television set to the handheld tablet or smartphone. Their primary video consumption, driven partly by peer pressure, to watch and binge on OTT programming. And if this next generation sees less value from cable, then when they leave their parents' home for their own residence, cable TV will not be a necessary utility for their new home.
The wire to the home will be seen only for broadband consumption, not for cable or for phone. And if cellular companies can make wireless packages that keep the price point for data reasonable, then consumers may make the cell phone company the primary provider of broadband services. That is the trend facing the cable operator and that is the challenge that this industry must focus to find its next growth opportunity.
What will subscriber levels look like this year. Some cable operators have seen a slowdown in lost customers and try to point to a reversal in the trend toward more cord cutting. First quarter subscriber levels should dispel those myths. As OTT networks like Amazon Prime, Hulu, and Netflix continue to push more original programming, and customers become more inclined to use them over cable TV for their video offerings, the value of cable decreases. Cord cutting will only become more severe. And for households on a limited budget, cable TV will stop becoming a must have for the home.
Millennial usage has significantly shifted from the big screen television set to the handheld tablet or smartphone. Their primary video consumption, driven partly by peer pressure, to watch and binge on OTT programming. And if this next generation sees less value from cable, then when they leave their parents' home for their own residence, cable TV will not be a necessary utility for their new home.
The wire to the home will be seen only for broadband consumption, not for cable or for phone. And if cellular companies can make wireless packages that keep the price point for data reasonable, then consumers may make the cell phone company the primary provider of broadband services. That is the trend facing the cable operator and that is the challenge that this industry must focus to find its next growth opportunity.
Monday, January 4, 2016
What To Watch, How To Watch It
Remember the good old days when channel surfing meant hitting channel up or down on your remote and quickly seeing what was on each channel. Stay a few seconds to watch and decide to commit or move on to the next network. And when there were only 30 or so channels, the process didn't take too long as you quickly moved through the cycle and back to the beginning. The rise of cable allowed for more choices and the process took longer but you also had more options. But as the technology moved from analog to digital, the latency rate to access each channel got longer. Switching channels was no longer instantaneous; it now took a couple seconds for each channel to pop up. And channel surfing became a lost art.
But the rise of digital cable also brought a more extensive cable guide with title and description. We now hit page up or page down to view the multitude of channel data. A title was all we really had to go on. And so familiarity with the title was all we could use to decide whether to press it or not. We now have OTT devices like Apple TV or Chromecast or Amazon Fire or XBox to connect to our TV set input and add to our possible choices. And that enabled another selection of programming from Netflix, Hulu, Amazon Prime, Crackle, and more. Surfing is now completely out of the picture.
It feels as if we have almost unlimited choice from linear, on demand, and streaming platforms. We also have more flexibility where we watch, on the HD set, the iPad or tablet, or iPhone or other smartphone. But what do we watch and where do we watch it? Has the overwhelming choice of video content led to overload? Will we continue to binge non-stop or hold up our hands and say "It's too much, I give up." Most likely not but sometimes the better choice might just be a good book.
And when we do decide to watch something what do we do first. How do we pick anymore across multiple input clicks and multiple screens within each platform? Do we pick something new or find an old reliable show that always entertains, almost like comfort food? Surfing is unwieldy, choice of content is so spread out that finding what is new or interesting or recommended is not yet easy to do. It is a huge problem in search of a viable solution.
But the rise of digital cable also brought a more extensive cable guide with title and description. We now hit page up or page down to view the multitude of channel data. A title was all we really had to go on. And so familiarity with the title was all we could use to decide whether to press it or not. We now have OTT devices like Apple TV or Chromecast or Amazon Fire or XBox to connect to our TV set input and add to our possible choices. And that enabled another selection of programming from Netflix, Hulu, Amazon Prime, Crackle, and more. Surfing is now completely out of the picture.
It feels as if we have almost unlimited choice from linear, on demand, and streaming platforms. We also have more flexibility where we watch, on the HD set, the iPad or tablet, or iPhone or other smartphone. But what do we watch and where do we watch it? Has the overwhelming choice of video content led to overload? Will we continue to binge non-stop or hold up our hands and say "It's too much, I give up." Most likely not but sometimes the better choice might just be a good book.
And when we do decide to watch something what do we do first. How do we pick anymore across multiple input clicks and multiple screens within each platform? Do we pick something new or find an old reliable show that always entertains, almost like comfort food? Surfing is unwieldy, choice of content is so spread out that finding what is new or interesting or recommended is not yet easy to do. It is a huge problem in search of a viable solution.
Thursday, November 26, 2015
Amazon Prime Seeks To Master The Bundle
I have been known to say that history repeats itself; for good and for bad. And in the world of marketing, a good idea is a good idea, often repeated under various creative strategies. One such notion is the strategy of bundling, the art of combining items into a single, larger package. Cable television did it quite successfully, first in bundling cable channels together and offering a large selection of differentiated networks at one low price, and again in creating the triple play of cable, phone, and data at one competitive price.
Amazon has repeated that strategy with the creation of Amazon Prime, a bundle of services including same day delivery, cloud storage of photos, special offers as well as Prime Music and Prime Instant Video, all at a low annual fee. And while the centerpiece is free delivery, the additional pieces help to create strong added value. And the strategy seems to be working.
But delivery alone might not be enough and the value of content cannot be minimized. Amazon seeks to strengthen its Instant Video subscription with original shows as well, including the Emmy winning Transparent. Now,Amazon Prime seeks to expand its Prime bundle with other subscription services. According to Variety, "The retail giant has been pitching the idea to add third-party video subscription services to its Prime subscription service to TV networks and online video services, offering them Amazon’s huge Prime customer base with its existing billing relationships as an incentive." That might suggest that services like HBO Now, Showtime, or perhaps even Hulu could be added to their bundle. As cable has learned, the bigger the bundle, the more value perceived, the better to attract new subscribers to the service.
But cable has also learned what can happen when too big causes the bundled price to rise and for consumers to start cutting the cord. For cable, it has led to the new term of the skinny bundle, with a lesser number of aggregated services. As Amazon plots its growth strategy, let it also recognize that it can sometimes get too big. Controlled growth, meaningful value, at a competitive price. So far, Amazon Prime continues to make itself a valuable commodity, but if it leads to price increases then it can also hurt your efforts.
Amazon has repeated that strategy with the creation of Amazon Prime, a bundle of services including same day delivery, cloud storage of photos, special offers as well as Prime Music and Prime Instant Video, all at a low annual fee. And while the centerpiece is free delivery, the additional pieces help to create strong added value. And the strategy seems to be working.
But delivery alone might not be enough and the value of content cannot be minimized. Amazon seeks to strengthen its Instant Video subscription with original shows as well, including the Emmy winning Transparent. Now,Amazon Prime seeks to expand its Prime bundle with other subscription services. According to Variety, "The retail giant has been pitching the idea to add third-party video subscription services to its Prime subscription service to TV networks and online video services, offering them Amazon’s huge Prime customer base with its existing billing relationships as an incentive." That might suggest that services like HBO Now, Showtime, or perhaps even Hulu could be added to their bundle. As cable has learned, the bigger the bundle, the more value perceived, the better to attract new subscribers to the service.
But cable has also learned what can happen when too big causes the bundled price to rise and for consumers to start cutting the cord. For cable, it has led to the new term of the skinny bundle, with a lesser number of aggregated services. As Amazon plots its growth strategy, let it also recognize that it can sometimes get too big. Controlled growth, meaningful value, at a competitive price. So far, Amazon Prime continues to make itself a valuable commodity, but if it leads to price increases then it can also hurt your efforts.
Thursday, November 12, 2015
Time Warner Wants A Piece Of Hulu
Time Warner wants another streaming business and that might include a piece of Hulu. Per Deadline Hollywood, they are in early discussions to take a piece of the pie and join the Disney, Fox, NBC partnership. But does it make sense?
I ask that question for a number of reasons. First, they already own HBO Now and HBO Go and have a successful platform and subscription business that they control 100%. Second, the idea of being a partial owner in Hulu will only add to the dysfunction of running the Hulu brand. The old adage that "too many cooks spoil the broth" means that one more owner will further handcuff the strategic growth and tactical abilities of the Hulu brand to grow. And third, that Time Warner's other cable content brands lack enough quality content to be anything more than long tail entertainment.
Can an investment by Time Warner in the Hulu business draw a positive ROI? I am sure the financial analysts are asking all the same questions in determining how to best improve revenue. There is no guarantee of success. Time Warner only needs to look internally at some of their failed networks like CNN SI, the Sports Illustrated Network. I am sure there are other misses as well. That is not to say an investment in digital doesn't make sense; but, wouldn't you rather have total control in your next business opportunity then a 25% position.
I ask that question for a number of reasons. First, they already own HBO Now and HBO Go and have a successful platform and subscription business that they control 100%. Second, the idea of being a partial owner in Hulu will only add to the dysfunction of running the Hulu brand. The old adage that "too many cooks spoil the broth" means that one more owner will further handcuff the strategic growth and tactical abilities of the Hulu brand to grow. And third, that Time Warner's other cable content brands lack enough quality content to be anything more than long tail entertainment.
Can an investment by Time Warner in the Hulu business draw a positive ROI? I am sure the financial analysts are asking all the same questions in determining how to best improve revenue. There is no guarantee of success. Time Warner only needs to look internally at some of their failed networks like CNN SI, the Sports Illustrated Network. I am sure there are other misses as well. That is not to say an investment in digital doesn't make sense; but, wouldn't you rather have total control in your next business opportunity then a 25% position.
Thursday, November 5, 2015
Digital Killed The Television Star?
If you remember back when MTV first emerged, the first music video was "Video Killed The Radio Star". It spoke to the demise of the old media with the rise of music video. It was certainly not true, radio did not die, although it too was changed as the result of technology.
Today, it is television that is being affected by the rise of new media, digital and streaming media. Consumers no longer are tethered to a box; rather, the screen moves with us and we control when and where we want to watch. It has led to cord cutting, not just because of the freedom of movement, but because the cost to access on a tethered box has gotten too high.
We want smaller bundles at lower price points. Netflix provides its bundle of TV shows and movies for a low monthly fee and Amazon, Hulu, HBO, and others each do the same. And as consumers we can pick which of these services we wish to carry. With cable television, the appeal of their large bundle of shows and movies, linear and on demand, diminished as the price of carriage kept rising faster and faster. The biggest culprit of that rise has been sports programming and the demand to license its content has enabled more channels to carry a piece of sports. Where a decade or more ago, sports was the exclusive home to a few nets; today, games are seen on dozens of regional and national sports networks. And consumers paid for access to each and everyone of these nets to be accessible on basic cable. Ultimately, consumers pay too high fees for too many networks they may not want.
Has digital killed the Television star, of course not. Neither did video kill the radio star. But digital has changed the playing field so that consumers have more control to cut the cord when their primary source for video has gotten too expensive. Lesser expensive options with a diverse supply of streaming video now makes the choice to cut the cord easier to make. Digital has changed the playing field and it is time to rethink the cable bundle.
Tuesday, November 3, 2015
Star Trek Boldly Goes Back To CBS
For Trekkers, or Trekkies, the news that another Star Trek series would be coming back to television was met with very loud cheers. That it won't be seen for 15 months, not until January 2017, tempered that applause. Star Trek, first created by Gene Roddenberry in the 1960's, has seen itself grow from TV show to movies back to TV show and back to movies with different casts embracing the sci fi drama.
CBS seems to be using this popular series in a two-fold strategy with first-run episodes appearing on the flagship CBS network and subsequent runs of the show seen exclusively on its streaming subscription app, CBS All Access. Currently, the $5.99 monthly app offers other CBS programs including the original Star Trek episodes. Is the Star Trek universe large enough to entice more subscribers to CBS All Access? Probably not but I would be on the look out for more deals to be announced like this. As CBS is not an owner in Hulu, this streaming property is their own strategy to retain the CBS brand in a digital world.
As to the new Star Trek series, little is known about the series. Its place, characters, story lines are all a mystery for now. But for those waiting for the follow up to Star Trek Enterprise, we will boldy go where CBS takes us.
Note: Some are suggesting that CBS will air only the first episode on CBS with the remainder of the season exclusively on CBS All Access. Will that encourage consumers to subscribe to the service or fail miserably? I think it would be a mistake to all of its constituents from the TV viewer to the local affiliate, from the cable operator to the cable subscriber to not air the series first on broadcast. The greatest revenue opportunity for CBS still lies with traditional television.
CBS seems to be using this popular series in a two-fold strategy with first-run episodes appearing on the flagship CBS network and subsequent runs of the show seen exclusively on its streaming subscription app, CBS All Access. Currently, the $5.99 monthly app offers other CBS programs including the original Star Trek episodes. Is the Star Trek universe large enough to entice more subscribers to CBS All Access? Probably not but I would be on the look out for more deals to be announced like this. As CBS is not an owner in Hulu, this streaming property is their own strategy to retain the CBS brand in a digital world.
As to the new Star Trek series, little is known about the series. Its place, characters, story lines are all a mystery for now. But for those waiting for the follow up to Star Trek Enterprise, we will boldy go where CBS takes us.
Note: Some are suggesting that CBS will air only the first episode on CBS with the remainder of the season exclusively on CBS All Access. Will that encourage consumers to subscribe to the service or fail miserably? I think it would be a mistake to all of its constituents from the TV viewer to the local affiliate, from the cable operator to the cable subscriber to not air the series first on broadcast. The greatest revenue opportunity for CBS still lies with traditional television.
Wednesday, October 21, 2015
Another Paid Streaming Service Joins The Mix
If you thought that cord cutting could save you money, think again. The rise of so many streaming digital services could find yourself one day paying more for content then you were paying for cable. With Amazon, Hulu, and Netflix each wanting you to pay $10 a month for their exclusive content, you can add a premium version of You Tube called YouTube Red. Priced also at about $10 a month, do we see a price point that all these services like to reach, "YouTube Red will allow users to surf the site completely ad-free, across multiple sources, from desktop to mobile. Original programming and movies will also be available to YouTube Red subscribers, beginning next year. " This according to today's Multichannel News.
And the more content you want, the more you will pay. Last week, NBCU announced the launch of Seeso, a digital streaming content service that will cost about $4 a month. It will include NBC shows as well as some original comedy content. You might also decide you need HBO Now to assure you are receiving Game Of Thrones and other HBO content. That will set you back another $15 every month. If you like that, you may decide to add Showtime Now at $11 more a month. And while Disney doesn't have a pay streaming service in the US, they are just announcing one to launch in the UK, per Variety. And while there are still a number of free video content services, it is easy to see that the more content we want, the more we have to pay for. Sorry, no bundling in the world of digital streaming.
So lets add up what we know. Netflix, Amazon Prime, and Hulu costs $30 a month for all three. YouTube Red is $10, Seeso is $4, HBO Now is $15 and Showtime Now is $11 for a total of $70 a month for the 7 services. Add your favorite music streaming service, Apple Music, Pandora, Spotify, and watch your dollars fly out of your wallet. Our cable bill could one day look like a steal.
And the more content you want, the more you will pay. Last week, NBCU announced the launch of Seeso, a digital streaming content service that will cost about $4 a month. It will include NBC shows as well as some original comedy content. You might also decide you need HBO Now to assure you are receiving Game Of Thrones and other HBO content. That will set you back another $15 every month. If you like that, you may decide to add Showtime Now at $11 more a month. And while Disney doesn't have a pay streaming service in the US, they are just announcing one to launch in the UK, per Variety. And while there are still a number of free video content services, it is easy to see that the more content we want, the more we have to pay for. Sorry, no bundling in the world of digital streaming.
So lets add up what we know. Netflix, Amazon Prime, and Hulu costs $30 a month for all three. YouTube Red is $10, Seeso is $4, HBO Now is $15 and Showtime Now is $11 for a total of $70 a month for the 7 services. Add your favorite music streaming service, Apple Music, Pandora, Spotify, and watch your dollars fly out of your wallet. Our cable bill could one day look like a steal.
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