Viacom Couldn't Risk Losing Dish Carriage

For all the craziness surrounding Viacom these days, including the health of founder Sumner Redstone, dealing with a potential Dish drop might just have been the death of Viacom.  Luckily, MTV, Comedy Central, and the other Viacom channels will continue to be enjoyed by the 14 mm Dish subscribers.  According to Deadline, the programmer agreed to multiple demands, including channels that "will run on the satellite company’s Sling TV streamed service."  An important need to build value as a TV Everywhere provider.

And while other terms weren't announced, one must wonder if a price increase was also passed through.  Given the threat of cord cutting, it gets harder and harder to keep passing those costs on to the subscriber.  There is now a greater need to find revenue growth through more advertising and other assets.  Sling TV counts as one more way to drive growth and customer satisfaction to the Dish customer. 

It's The End Of The Bundle As We Know It

With apologies to R.E.M., it looks like the end of the bundle as we know it (and I feel fine).  Prophetic perhaps, but the stock market these last couple of days sure feels like the bundle today is broke and that media companies will be the losers. 

For cable, the bundle was originally laughed at when Cablevision first introduced a triple play bundle of cable, phone, and broadband for under a hundred dollars a month.  And with an assortment of cable networks, consumers felt like they got a good deal.  Other cable companies scoffed but soon found themselves following along as it proved to be a very successful marketing strategy.

Fast forward almost 20 years and cable subscription fees have grown faster than inflation.  Cable operators kept aggregating more and more networks to their line-up and license fees of all networks kept rising.  And so did our cable bills.  We may have enjoyed the wide variety of programming and the rise of on demand viewing, but we were also inundated with more and more commercials.  For consumers, a breaking point was near and the solution has been cord cutting.

But in order to enjoy content, alternatives also had to be found.  The quantum leap happened as Netflix emerged with a broadband streaming solution at a price point of under $8 a month.  Amazon Prime, Hulu, and others saw a shift occurring and have found a way to attract viewers with low fees, syndicated and well known content, and as to really entice viewers, original content to drive adoption.  For price/value, cable was losing the race.

Unfortunately cable networks are not about to lower their license fees that they charge operators.  So cable operators have now started to drop networks off their basic line-up and create skinnier versions at lower costs.  For some cable networks, it is a double hit; lost subscribers first due to cord cutting, and second, drops in their subscriber base due to being dropped from basic levels of service.  With lower subscriber bases, advertising revenue creates a third hit to the networks bottom line.  Verizon FIOS has announced such a move and Charter Cable is not far behind.

Today, the bundle is not the technology choices; we have essentially watched as the triple play can essentially be managed through the broadband fiber with web, streaming, and VOIP.  The bundle is now the aggregated content that we are consuming across our devices.  And price elasticity is playing a huge part.  AT&T, now with DirecTv in its stable, is trying its own bundle of cellular and satellite to drive subscription.  Netflix, Amazon, and Hulu continue to advance with more original content to their bundle of content. 

Media networks that own their content should find that they will survive cord cutting with more platform alternatives to place their content.  And branded opportunities within the content will drive forward more advertising revenue as well.  For cable operators, the bundle as we know it has changed; Driving value of the fiber pipeline to the home, services that rely on the broadband pipe, and TV Everywhere content accessibility at more competitive price points will keep the business thriving.

Mobile Winning Over Settop Devices

Multichannel just shared a telling study by Arris on consumer video viewing patterns.  Their research "found that 59% of consumers now watch mobile TV, a figure that jumps to 72% of 16-24 year-olds."  And older consumers 65+ are also embracing mobile to watch video.  And while this study sampled 19,000 consumers in 19 countries, it certainly supports the value that mobile viewing is playing in our lives.

Of course it would be helpful to know more about this study including which devices are being used, percentage of mobile verse wired viewing, which video platforms are gaining usage, and more.  And a better definition of mobile which I believe is meant to include WIFI and cellular platforms.  The rise of short form video on Facebook, long form content on Netflix, Hulu, and Amazon, and viewership platforms like Apple TV, Roku, Chromecast, Sling TV, tablets, and smartphones are all an integral part of the trend in viewing away from the settop box.  

It seems clear that with a younger demo embracing mobile over other platforms, consumers will continue to re-evaluate the value of their cable subscription, their investment in more data packages on cellular, the speed of their broadband and WIFI connection, and content aggregators to drive further adoption.  And the trends described at the end of the article strengthens the argument that more devices are being connected for WIFI viewing and more usage is being diverted to streaming media.  The TV Everywhere mentality is arriving. 

Video Delivery Verse Viewership

Sometimes it feels like we spend too much time looking at the trees but missing the forest.  I share this trite observation as it applies to cable operators in their desire to stop cord cutting, the act of subscribers dropping their cable subscriptions for OTT content.  With notable shows on platforms like Netflix and Amazon Prime,  Hulu, Crackle, and other digital sites, cable operators watch with disdain as its viewership erodes. 

Truth is, there is nothing unusual with these trends; they follow the desires of the consumer and the companies that innovate and change to get in front of them.  And while TV sets got bigger and sharper, some tried 3D, others 4K, the consumer preference changed to smaller, more personal, handheld screens on tablets and smartphones.  This is the current future of how many are watching video content today.  And this is their choice.  Cable operators have remained more locked behind their set top boxes and tethered to wires that run around the home.  And because of the license deals that they signed, they are limited on what they can push out to subscribers on wireless outside the home.  As we have become more mobile, cable operators remain fixed.

Its not that viewers aren't watching TV shows or movies.  They are watching shows that once appeared on television and others originally created for OTT platforms.  Want to see Seinfeld as it first aired without being cut down for syndication, go to Hulu.  Ready to watch the third season of the original series Orange is the New Black, go to Netflix.  The screen may be smaller or it may not; now the consumer has more choice.  They now decide what device best suits their viewership needs, an iPhone or iPad, Roku, Chromecast or any other device can allow viewers to choose where, how and when they want to watch.  "It's Not Linear, It's Whenever", could now be HBO's new slogan.  With HBO Go and HBO Now, a consumer can access content as an authenticated cable subscriber or simply as an online monthly subscription.  And some cable networks are following along, creating streaming channels of their own to drive viewership and hopefully revenues. 

Content companies are winning because they now have more platforms to sell their programs to.  Can't get a good syndication deal, sell it to OTT.  Cable operators have been slow to get true TV Everywhere for its subscribers.  And it may get harder for them as content companies love having different platforms to negotiate with.  But those costs can only rise to purchase license fee rights to both cable and streaming platforms.  And then those costs will likely be passed through to the consumer. 

Here is what I want.  As a cable customer, I want to access the cable guide on my iPad, see what is available on channels and on demand quickly and easily, and watch on that same iPad the show I picked, regardless of where I am sitting, in the home or on the beach or in another city.  I want to decide if I want to push that content to a larger TV screen in my home instead.  And I want to do it now.  I want control, I want choice, and I want flexibility.  No set top box tree and branch searching for me, no tethering to a location; I want mobility, unlimited access, ergonomic search, with a quality picture and fast and easy functionality.  The content is the content, how you deliver it to us matters more. 

Future Of Advertising - Mobile And Social

As we engage more and more with our mobile devices, our smartphones and tablets, they become a much larger focal point for reach and frequency. More Facebook users access their accounts via through mobile rather than a computer. In fact, in Q1 of this year, Facebook's "mobile advertising revenue represented roughly 73% of advertising revenue", as mentioned in Business Insider. And given Facebook innovations, videos now automatically run as you begin to scroll down the timeline, hoping to snare you to watch and turn up the volume.  I know that I am like the majority, accessing these and other social media sites like Twitter, Pinterest, Instagram, and others on my iPad or iPhone.  And whether it is a display ad, or sponsored content, or other banner or video, this is where the future lies.  We are easily reached, personalized, and presented with relevant and hopefully engaging messages.  

And so other ad platforms may need to worry as usage patterns shift and so to the flow of ad dollars from one bucket to another.  Cord cutting on cable TV is not just an issue for subscription dollars but advertising dollars as well.  As higher percentages of our time are spent on our mobile devices and interacting with others via social platforms, so to will ad spend. 

It is why TV Everywhere is so important  for content providers.  And why many today have apps for authenticated viewing on mobile devices.  It is why the DOJ and the FCC are looking so hard at the Comcast - Time Warner Cable merger and that together they would control a majority of the broadband pipeline in the US.  Monopolistic pricing, controlled or limited access to content, and lack of a competitive threat are key concerns.  

And as I look at the growth of mobile, I am struck with an interesting idea.  For companies like Netflix, Amazon, Hulu, and others delivering content to mobile devices, the thought of complementing these services with social networks for its members to discuss content that they have consumed on their respective apps. Consider a Netflix social app that is easily accessed and used to reach other "fans" of House Of Cards, Orange Is The New Black, Unbreakable Kimmy Schmidt or other series and where they can discuss in detail.  Such a companion site would also enable these content providers to add an advertising revenue stream into their mix.  It may be a niche social platform at first but may just drive future growth.

For it is the increasing usage of mobile platforms in our daily lives and our desire to interact with others online that is driving new opportunities for advertising.  At the same time, traditional ad platforms, threatened by this new growth, must continue to play in the new space and become ubiquitous across all platforms, print, TV, radio, digital. By being accessible via the mobile platform, advertisers too will gain with better data based on individual preferences, not household ones.  And it is that one-on-one relationship that we have on our mobile devices that is the future of advertising. 

Can TV Everywhere Help The Cable Industry

Today's Variety poses an interesting question, Is Cable's 'TV Everywhere' Strategy Finally Poised to Take Off?  According to an Adobe Systems' study, viewership doubled from the previous year to reach 20% of all pay households.  That is to say that 20% of all cable subscribers were authenticated to watch TV programming away from their cable box across other streaming devices.  Reasons for authentication included streaming Olympics coverage as well as World Cup Soccer.  And come this next football season, the NFL has agreed to stream a regular season football game.  Whether that also involves authentication remains to be seen.

I've had the pleasure of downloading network apps that require my cable email and password for authentication.  I've read reviews from others that have downloaded and used apps from Xfinity to NBC to CBSN.  As for ad supported networks, a number of the reviews are unkind.  Examples include gems like this, "I do not usually write reviews but the duplicate, redundant, and excessive amount of ads thrown at me while watching a single episode ..." Or this one, "This app is hopeless streaming to Apple TV."  Or "The commercials are loud and so repetitive".  Some are more positive, "Easy to operate. Wish for less commercials."  Clearly there is need for improvement.

That consumers are using these apps and are so passionate indicates to me how valuable they can be.  Technically, more can always be done to improve the viewing experience, assuring no glitches or freezing, and an easy interface to choose and watch content.  The other issue is commercial load and how much the consumer will watch before they turn away to commercial networks, continue to cut the cord to cable, and focus exclusively on subscription services like Amazon, Netflix, and Hulu Plus.  If part of the goal of TV Everywhere is to drive value for cable TV, both on and off the cable box, then don't kill the golden goose before it even has time to fully hatch.

Clearly consumers are increasingly using these authenticated apps to enjoy their TV programming on their other devices, from iPads to iPhones to Roku.  And enabling access to live network linear feeds as well as on demand viewing benefits the authenticated viewer with a better, more personalized viewing experience.  But like any good business, it is so important to listen to the customer.  Rule One, the customer is always right.  Rule Two, when the customer is wrong, see rule number one. 

Content Networks Chasing The Cord Cutters

Cable operators and content networks have always had a difficult relationship as buyer and seller.  In the early days of cable, their relationship was more harmonious with launches coupled with marketing activities to assure that subscribers saw value from the network and networks built awareness and hopefully ratings.  But the proliferation of cable networks, a loss of brand as niche networks began looking more and more like UHF channels, and a price only mentality have turned these negotiations bitter and untrustworthy.  The result has been broadcast and cable network drops, followed by ads telling subscribers how horrible the other side is behaving, and then finally a relaunch.

Consumers are changing too.  No longer do they seek content simply from a cable operator; now, they can watch TV shows and movies via a broadband connection.  And while broadband subscription rises, cable subscription is dropping.  Cord cutting is a fact.  Recognizing that the cable operator is not the only distribution platform anymore, content networks are constructing deals on OTT platforms.  Most recently, it was announced that AMC, IFC, and Epix are joining the Sling TV digital platform.  For as little as $20 a month, subscribers can get these nets as well as ESPN, HGTV, TNT and a few others.  Less networks than a cable operator subscription package but at a lower cost to the consumer.

HBO has also announced that it too will offer its network without the requirement of a cable operator.  Tentatively titled HBO Now, it helps them to compete in the same new world that Netflix, Amazon Prime, and others compete in.  With cable nets building alternative avenues for access, the pressure for more cord cutting will only continue to mount.  And as negotiations with cable nets lead to drops on cable systems, the likelihood that these networks will relaunch may become a distant memory.  Networks can simply advertise an alternative way to get the networks they love without the cable operator as the middleman.

Cable operators have done little to compete in this changing media environment.  TV Everywhere is not available to subscribers for all its nets; rather only certain networks offer authenticated carriage, some only inside the home, and with no aggregated way to easily search across a line-up.  Cable boxes remain clunky and hard to navigate unlike IP devices.  New packaging is not being created to drive down the subscriber price point to enable stronger retention.  Rather, prices continue to go up to keep revenues stable.

What does the future hold?  I see cable operators dropping cable networks that don't perform.  Smaller packages of cable networks but at lower price points.  I see operators needing to invest in new generations of cable boxes, embracing the TiVo type boxes that access both cable and internet content and bring it to the TV screen.  And I see the emergence of a la carte pricing where a home can buy a particular network through their cable box for access across all their devices.

Networks Starting to Say Who Needs Cable

License fee negotiations between network and cable operator tends to be acrimonious these days.  Where once this relationship was more friend than enemy, today, that frenemy relationship has become a more business relationship.  As a result, each time a network is up for license fee renewal, the likely outcome includes a period of being dropped before returning to the line-up.

But networks are also watching the success of subscription services like Netflix, Hulu, and Amazon, and are pushing forward with more OTT deals outside the cable-network boundaries.  Last year, CBS and HBO unveiled each of their OTT subscription services.  And Showtime soon followed the HBO announcement.  WWE offered a subscription service and just this week announced that they have reached one million subscribers.  Today, we have Viacom announcing that their children's network, Nickelodeon, is also planning to sell an OTT, direct to consumer, subscription service too.  Its success could lead to other networks in its stable, MTV, VH1, and Comedy Central doing the same thing.  And not having to work with a middleman like the cable operator may become more appealing as consumers get tired of paying high cable rates.

Consumers wanted a la carte and now they are likely to get it.  Unfortunately, buy too many of these OTT subscription services and your entertainment costs will soon exceed the cost of your cable subscription. The bundling of cable networks may have driven the total costs too high, but it did offer something for everyone.  A la carte may seem cheaper but only if a small portion is all you desire.  Cable operators had fair warning to fix their programming strategy but it got out of control.  Its time to revisit and fix their offerings and pricing. Enable TV Everywhere to authenticated customers to create a better must have subscription.  Cable can fix this mess but the time is now. 

Digital Continues To Hurt DVD Sales, VOD Down Too

While digital media sales continue to grow, DVDs are not.  It seems that consumers are fully adopting digital sales and subscription media over ownership of DVDs and other physical media.  Not surprising as more televisions are internet ready, more computers have dropped the DVD slot, and consumers are enjoying easy access of content through subscription services like Netflix.  In fact, DVDs and blu-ray discs were down over 10% from last year.  That trend seems likely to continue.

It should be noted that when all the figures of digital and physical media are totaled up, "Total home-video spending was $17.8 billion, dropping 1.8 percent from 2013, according to the report in LA Biz.  This total decline may be partly due to a weak box office, according to the report, but other factors may also be a result.  Consumer spending in general and less dollars focused on entertainment verse other needs may also be to blame.  Like cord cutting and cord shaving, consumers may be using subscription services and digital to pay less but get more content. 

Another interesting note from the report, while consumers have pushed back on physical formats, they also pushed back on VOD.  Total sales fell 6.7% from last year.  Again cord cutting and cord shaving may be to blame with consumers preferring to watch on mobile devices and getting access to programming via You Tube, Netflix, Hulu, Amazon, and other OTT outlets.  Given the push of these subscription services, I would not be surprised to see VOD numbers to continue to drop in 2015.  Until cable operators create an alternative online platform that is added value to its wired approach and touts a true TV Everywhere mentality, VOD will only continue to find a backseat to digital. 

NBC Playing Nice With Corporate Parent

While CBS seeks to drive additional revenue through a subscription digital network service, NBC Broadcasting has chosen a different route.  Perhaps it is due to NBC being owned by a cable operator, but it also aligns both the programmer and distributor to the same synergistic goals, driving total revenue by backing an authenticated TV Everywhere platform. 

According to today's Wall Street Journal, "NBC is launching a live stream of its broadcast network, part of a broader effort at parent NBCUniversal to make more of its content available online via computers and mobile devices."  Not too many details in the article, notably if the signal will correlate to the subscribers home geography and its affiliates signal, or simply a national feed of the network.  And likely, there will be shows blacked out, including Sunday Night Football and other possible exclusions.  Other questions are whether it is just a live linear feed or if there will also be an on demand component.

Still, despite limited details, the approach by NBC clearly takes into account its parent company, Comcast Cable.  Requiring access to authenticated cable subscribers means added value to cable and an attempt to stop or slow down the rate of cord cutting.  Rather than be a revenue creator like the CBS or even HBO GO models, NBC is supporting the broader cable revenue model with hopefully greater total returns.

As to the marketing of the new authenticated service, NBC doesn't seem to like the TV Everywhere tag.  I agree.  It is reminiscent of the challenges that have plagued cable with the on demand tag being used in so many places it lost any traction with the cable brand.  But I'm not sold on “Watch TV Without the TV" either.  In a world of initials, perhaps branding it as "TVE" might be an interesting way to brand the digital feed of all its networks.  Brainstorming other phrases like Digital Broadcast (Cable) Everywhere.  Still, slowly but surely, TV Everywhere will one day become commonplace. 

Sling Media Derides Cable's Current TV Everywhere Platform

Sling Media doesn't mind slinging a little mud in its latest advertising campaign against cable TV.  As I've argued, cable needs to embrace a true TV everywhere approach to enable its authenticated customer to watch all its programming, both on and off the cable box.  Unfortunately, programming agreements and content rights management currently hampers the ability to push such a strategy.  But Sling Media has built the elegant work-around with a box that talks to the cable box and then streams it to other mobile devices. 

Sling's owner, Dish Network, integrates Sling into its box making it a more ideal approach, but cable operators have been reticent to bring Sling technology into their own cable box.  So to attract non-Dish customers to Sling, according to Deadline, "launched an ad and social-media campaign that ridicules TV Everywhere – the cable and satellite initiatives that stream programming to subscribers. The messages urge consumers not to get “C.W.A.P”, a Sling acronym for 'Can’t Watch Anywhere Pain.'” 

As I mentioned, buying Slingbox has its advantages but it also requires that you have a cable set top box that can be used specifically for streaming.  Those in the home can't use the cable box while it is being used by the Slingbox.  And only one channel can be streamed at a time so that different members of the household can't all "sling" at the same time.  Despite all this though, it does provide the opportunity to watch every linear and on demand show that comes off the cable box, through the Slingbox, and streamed to any mobile device around the world.  It is a true TV Everywhere approach. 

Will this ad campaign move sales of the Slingbox?  Most households tend to be technologically challenged.  Heck, we even need help from our cable company to set up our cable box, modem, and wifi.  For those in the know, the Slingbox can be an exceptional value. 

Hey TV, Netflix Is Your Frenemy

What do you do with an entrant in your business that spends millions of dollars for your content but also is taking viewers away from your channels?  That is certainly the question poised in today's New York Times on the Netflix Effect on television. 

Consumers are watching television differently.  The cost of cable television has skyrocketed while society has become more mobile. Linear television makes us wait while on demand and streaming lets us control when, where, and how we watch our shows.  And while advertising pays for programs to be made, subscriptions can as well while eliminating the interruptions of commercial breaks.  As a result, Netflix has disrupted the traditional model.  Truth is that linear TV will not go away.  When we don't know what to watch, we can still graze across all the choices and find a show to watch.  And live events force us to wait to watch at the appointed hour.  Netflix and other streaming services simply provides us with more choice as well as more flexibility. And advertising free is a nice benefit.

Television has been slow to change their current model.  It took years for content companies and cable operators to invest in on demand.  And their authenticated TV Everywhere model still lags as a competitive solution.  Netfix Chief Content Officer Ted Sarandos has offered a possible idea for cable operators to pursue.  "Rather than debate what is driving that change, established television companies should change their business models, Mr. Sarandos said. As an example, he said that cable operators should invest in new technologies that would allow people to watch TV episodes weeks after they have been broadcast, but allow advertisers to insert up-to-date commercials."  My one change to that idea, not weeks later but the next day and to keep it accessible for a month or longer.  And lastly, enable authenticated devices outside the cable box to access the content. 

Ultimately, Netflix will be seen by the consumer as a complement to cable TV, not as a direct threat.   Consumers will seek the platform that serves the content they want to watch.  TV viewership may continue to migrate to streaming until a new balance is found.  But cable operators can pursue a more robust authenticated TV Everywhere model that delivers a great platform of easy to find, easy to view, and easy to monetize content that will serve future generations. 

Traditional TV Viewing Drops 4%

First and foremost, television is not dead.  It may have matured quite a bit, but opportunities still abound for those companies that see growth.  Still, the news out of Nielsen, from today's Wall Street Journal, is that "traditional television dropped nearly 4% last quarter, as online video streaming jumped 60%, according to a new report from Nielsen, crystallizing a trend for TV-channel owners amid ratings declines."  Expect that percentage to continue to drop. 

The simple truth is that there is only 24 hours in a day and the rise of new media means that old media must lose some usage as users aggregate to the new trends.  Print is feeling that effect from digital, radio felt it from broadcast and broadcast from cable.  Online viewing will simply take from those platforms.  But television, and the people that control them, can still drive success and growth. 

The notion of authenticated TV Everywhere with the cable operator bridging the gap of the cable box in the home with online access anywhere and everywhere still makes sense.  It enables customization, personalization, recommendation, and ultimately owns and tracks the viewer regardless of the device used to view the media on.  That consolidation and convergence creates an advanced advertising approach and data collection so valuable these days.  But until cable operators fully envelop the consumer in this bubble, consumers will find entertainment outside the cable box with other content and other OTT platforms. 

A 4% drop in traditional TV viewing is not the death of traditional TV.  Hopefully, it is a real wake up call to once again purse a TV Everywhere strategy.  Slingbox offers the technological tools to do it.  TiVo may as well.  Cable operators need to push it further and market the TV Everywhere value that they can one day deliver.

Ad Spend Shifts To Reach Consumers

Today's Wall Street Journal reports on the shifting dollars of ad spending.  The concern is that ad dollars are flowing away from television and toward digital content.  And while it is described as shaky, it is hardly earth shattering.  Truth be told, these shifts are simply part of long term trends that have affected media buying for quite some time.  And those media that don't remain flexible to changing viewership patterns eventually become irrelevant. 

Old technology gets replaced by new technology; the horse drawn carriage by the automobile or the train by the jet.  For those that can predict the shift comes the ability to take a product or service from birth to maturity.  And while old technology like the train may lose some market share to the jet, it still can survive as a mature business.

Back to advertising, media has watched audience usage shift from print to radio to broadcast to cable to digital.  All media platforms remain available, but start to be used differently.  Radio is no longer the home for 30 minute sitcoms or dramas; today they are music, news, talk, and sports.  Those long form shows shifted to television as audiences demanded first video, then color over black and white.  Today those viewers now want portability, personalization, and on demand, something that digital can do very well.  But TV is not dead or even on shaky ground.

According to the research from MoffettNathanson, broadcast and cable are still growing, simply at a slower rate.  It is the maturation of the TV platform as another takes over.  Viewers are a fickle bunch; one year they love the content you offer on your broadcast or cable or theatrical platforms and the nest year, interest has waned with your content and moved to another content creator.  And digital platforms like Netflix and Hulu and Amazon and others let viewers watch shows and movies on their terms.

Still this shift of viewership from TV to digital could change the cable landscape.  In the beginnings of cable television, networks were created to reach segmented interests.  You had an arts channel, a sports channel, a comedy channel, a movie channel, and so on and each channel had a clear segmented identity.  Where broadcast networks reached a broad audience base, a cable network could reach a smaller, albeit passionate viewer segment.  But as cable grew up, it started to want a bigger share of the pie.  Those individual identities began to soften as networks widened their reach with more varied programming categories.  Today, most cable networks look like broadcast networks.  And with so many lookalike networks, segmentation turned into fragmentation.  It seems the next step for cable TV may be for consolidation as smaller networks get dropped off the line-up.

TV ad spend will continue to shift as new platforms emerge and audiences embrace these new ways to interact with content.  Broadcast felt it as cable networks gained better programming and more viewership.  And TV as a whole will feel it as digital gains better programming too.  The shift is inevitable and like before, the trend will only continue.  The smart content distributors will embrace digital and capture the dollars regardless of the platform its content is on.  HBO and CBS offering unique digital subscription models is one such example.  Hulu Plus, a consortium of broadcast media ownership is another.  Their is nothing wrong with TV ad spend, it is just following the same trends that have affected it before. 

Content And TV Everywhere

The challenge facing TV networks and their distribution efforts is having the best content that many people want to watch.  When you have a hit, it makes money from advertising and syndication through different windows; when you have a dud, it is a write-off.  But for networks that negotiate with production companies for content, deciding what rights to buy is a gamble.  Some networks buy the linear and on demand rights but may not also buy the streaming rights.  Some buy domestic distribution but stay away from international.  Depending on what the license rights are for content determines how much of a networks' content can be offered to a cable operator to carry with streaming media rights.  Thus TV Everywhere may not be everywhere.

AMC Network certainly had two major content hits with Mad Men and Breaking Bad.  But their deal with Lions Gate was for cable carriage; Lions Gate retained other distribution rights.  So as AMC  moves forward in its content strategy, it has evolved from a buyer of content to an owner of content.  According to the Wall Street Journal, "At a time when more people are binge-watching shows on streaming services like Netflix NFLX -0.10% and Amazon Prime, ownership could pay off handsomely with future streaming deals, as it has already done for AMC with "The Walking Dead," the first show it owned. But it also brings higher risks and more upfront costs, which have lately been spooking some investors."  Welcome to the world of risk and reward.  And should AMC find another breakout hit, it is well positioned to succeed in the new world of TV Everywhere. 

Broadcasters Are Asking...What If

What if Aereo wins its case in the Supreme Court?  Certainly both Aereo and the broadcasters are wondering what happens once the case is decided.  For Aereo, they have announced in the media that without a Supreme Court victory, their business model will cease to exist.  And broadcasters are considering their options as well should they be on the losing side of this argument.

 While it is hard to imagine that broadcasters would drop their over the air signal, networks could consider converting to a cable model.  Then Aereo would be unable to acquire an over the air feed to retransmit.  Broadcasters could also consider selling direct to consumers its own platform of linear and on demand programming via the web.   Today, all offer shows and clips streamed through their own website or through Hulu or both.  Lastly, its  possible that broadcasters will do nothing to alter their signal. 

Through cable agreements, some broadcasters offer an authenticated streaming linear feed of their line-up to customers.  Cable operators like Comcast might just continue to pay license fees for the simplicity of the delivery of the signal, but would push back hard should broadcasters attempt to sell a streaming model directly.  I find it doubtful that cable operators would put together their own antenna farm unless they could justify economically a real cost savings. 

If I were to predict an outcome it would be that Aereo wins its Supreme Court ruling.  Broadcasters continue to license their signal and a full authenticated TV Everywhere model to cable operators, and so broadcasters continue to use the over the air airwaves.  At the end of the day, if broadcasters can show that more consumers are watching their programming, via cable AND Aereo, then they will continue to increase their ad rates and generate more advertising revenue.

And one day, should cord cutting start to take a meaningful bite out of license fee revenue, broadcasters will revisit the cable model and consider transitioning away from the over the air signal and freeing up airwaves back to the FCC for other new opportunities. 

Weather Channel and DirecTV Kiss And Make Up

It seems that DirecTV and Weather Channel both needed each other.  Despite the drop of the network 3 months ago and the launch of a competitive weather service, DirecTV still felt the pressure to relaunch The Weather Channel.  It came with a price cut and concessions on programming of the network, as well as TV Everywhere access, but a deal got done.  So my question is why?

I question the deal not because Weather Channel doesn't offer programming that appeals to a weather minded audience, but that it could be easily replaced with another channel called Weather Nation and consumers could still access weather content online.  Also when weather becomes the news, all the news channels carry weather reports.  So why did DirecTV negotiate a renewal agreement?  Here are the possibilities:

1) DirecTV was feeling pressure from consumers for the drop of the network and consumers were dropping DirecTV for alternative cable service.
2) The Weather Channel's minority owner NBC Universal was involved behind the scenes and some leverage was used for negotiation.
3) The launch of the morning weather show starring Sam Champion, although not a rating winner, demonstrated important and unique programming that DirecTV felt compelled to carry.
4) The need for added value to its subscribers with an agreement that gave DirecTV users access to content inside and outside the home on mobile devices.
5) The deal was so cheap and came with "marketing incentives" to help the bottom line.

Any or all of these reasons may have been the rationale for The Weather Channel relaunching on DirecTV.  Regardless, subscribers will once again get access to their programming. 

TV Everywhere Includes The Bathroom

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

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

Live From ..., Ratings Are Up

The savior of linear television, besides folks who simply like to watch what ever is on the tube, continues to be Live Television.  It causes appointment TV where viewers plan their time to be near the TV set to watch.  And the success of live TV can be seen as ratings continue to rise for spectaculars like The Sound of Music to Football games and to last Sunday's Grammy Awards program.  "The Grammy Awards telecast remains second only to the Academy Awards in terms of popularity, with Sunday’s show on CBS drawing a big 28.51 million viewers — up slightly from last year’s 28.38 million and the second largest audience in the last 21 years."

No doubt, I would expect more and more networks to augment their line-ups with special event live shows.  NBC has tried it already with live showing of 30 Rock and Fox has had success with American Idol.  Keeping viewers tuned to the channel also benefits the networks advertising abilities.  More viewers, more dollars charged, more revenue coming in.  But it is clear that TV needs more live programming also to keep cord cutters from growing more rapidly. 

Once networks build out an authenticated TV Everywhere experience that lets their networks get enjoyed on every screen, ratings growth could skyrocket.  So congrats on the ratings success; Live television continues to demonstrate the power that linear networks bring to the public. 

There Is Nothing Like TV (Set)

Let's face it, despite the rise of tablets, smartphones, and laptops, we still like to watch out TVs.  There is nothing like a big screen HDTV to watch a movie, sporting event, or any number of TV shows.  But we must also separate where that content is coming from.  No longer is it being driven by antenna or cable operators directly into our TV set; instead, options have multiplied as more and more devices sync with our big screen monitor.  We have Roku, Apple TV, and gaming devices like XBox One and PS4, connecting video content to the set; We have Chromecast, Blu-ray players, and more all with streaming media capabilities.  And the choice of viewing is almost unlimited. 

More amazing, we also have choice when deciding whether to watch our shows on the big screen or our personal handheld devices.  TV Everywhere continues to make progress so that our linear networks are viewable where we are and not just on the TV.  Still, my original premise holds.  When we plan to be sedentary for a while, there is nothing like the size, sound, and detail coming from a big screen HDTV monitor and surround sound speakers that makes all the difference in the world.

Should Apple make an HDTV to compete in the space with Samsung and others?  Many expect a smart, internet enabled, HDTV, to be announced this year. But my recommendation.  If Apple must build a screen, make it a dumb monitor and put all the connectivity into its Apple TV box.  Its already built and besides, Apple is building so many different size screens for its iPad and iPhone, why not build a 55" screen for the living room.