Huffington Leaving Post

On the surface, the news that Arianna Huffington is leaving the company that she founded and runs to start up a new venture doesn't sound that concerning.  Entrepreneurs enjoy the thrill of the start up.  And with an acquisition of The Huffington Post, first by AOL and then again as Verizon bought AOL, the notion of being the big fish in a small pond gets lost as the pond becomes an ocean and you become a smaller fish relative to the size. 

That Huffington is leaving to start a new venture called Thrive, a health and wellness digital site, does raise a couple questions.  One, that Verizon has also just bought Yahoo and Huffington could take the health assets from this acquisition to mold her site as a venture inside of Verizon.  Two, that digital health and wellness sites are already plentiful and no site has yet truly broken through.  I myself have worked for a couple cable health and wellness sites, including Veria and HealthiNation, and attracting a sizable audience, either on TV or on the web, has been extremely difficult.  Given all the niches, health and wellness seems to best occupy the longer tail part of viewing patterns.  And third, that Huffington's new venture might have had a better distribution shot staying inside Verizon than operating independently.

So the smell taste fails me when it comes to her motivation to leave.  The only argument is that she simply wants to be more independent and occupy the leadership chair in a much smaller business entity.  Financial motivation may simply not be an issue for her at this time.  While I wish her luck with her health and wellness venture, her best outcome for it will be its future acquisition with another site. 

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. 

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. 

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. 

What is Television?

Ask a 60 something to define what television is and they will likely point to their living room TV screen with the cable box hovering above or below it as an example of it.  Ask a 10 year old and the likely answer could be their smartphone or tablet.  The simple definition of television may refer to the transmission of sight and sound to a screen with that transmission enabled by an antenna or wire.  Another may refer strictly speaking to the box itself that turns on and off and is capable of displaying multiple channels of content. 

But it seems that with the rise of digital and wireless technology, both the traditional transmission of content and the screen it displays on has changed dramatically in the past decade.  Channels are no longer just linear or even on-demand, they are streamed to devices of any shape or size.  And the content itself is no longer just long-form or short-form, but starting to contain more interactive elements.  The water cooler has been replaced by social media apps like Twitter and Snapchat and others.  And we no longer have to wait a week to see the next episode of a particularly intense show; rather, we can binge the entire season or seasons whenever and wherever we choose to watch. 

The television is no longer tethered to the living room or kitchen or bedroom.  It can follow us to the bathroom or the park or to Starbucks if we choose.  And so we measure viewing of this content across all these screens of television with same day, +3, +7, streams, on-demand views, and whatever measurement captures who is watching a piece of content for a length of time.  And that content can appear on what we traditionally saw to be TV, on a linear channel airing at a particular day and time to on-demand viewing from our cable box to seasons worth of episodes on a subscription service.

Television, the distribution and content displayed, is monetized like never before.  With cable bills and downloads, streaming subscriptions and commercials, native sponsorships, display ads and overlays.  Today's concept of television is much broader than 50 years ago, or even just 10 years ago.  But no matter the screen we use, large or small, and no matter the location of the screen, living room or smartphone, and no matter the time we watch, pre-set or at our discretion, it is all television. And what will tomorrow's television look like?  I look forward to finding out. 

Everyone Wants To Have A Video Platform

There is a proliferation of video channels.  In fact the word channel probably doesn't apply though the word platform seems to general as well.  We no longer get video from broadcast or cable.  Short or long term video content is no longer only available on You Tube  or Hulu or Netflix or Crackle.  And video content is no longer limited to video only websites or apps.  Facebook and Twitter love to share an connect us with video as well.  Even social media companies like Snapchat, with disappearing messages, wants to offer video content from Discovery and other content providers.  Video content is so hot these days that platforms that were so focused on data or non video offerings have found compelled to bring video into their mix. 

And that brings us to Spotify, a music company offering streaming songs for free or in a subscription service, to decide that they too need to also be a video content company.  You might think that the video content would be rooted in music, like music videos or concerts, but that does not seem to be the case.  According to reports, video will come from such sources as ESPN and Comedy Central.  News, comedy and video sports content will all be added to Spotify's playlist of content.

As I watch this proliferation of content across so many sites, and as I watch niche sites become more generalized and mainstream, I recognize that once again history repeats itself.  Cable networks, once niche content providers, would limit their content to a particular format.  But to compete for the largest number of eyeballs and subscribers, to gain the larger share of the ad dollar pile, niche services all realize that eventually they must shift from niche to broad, from limited to general, in order to reach the widest and hopefully largest size audience.  For Spotify, as it is for others, that means moving away from your niche as a music service to be everything for everyone in order to keep growing.  This type of strategic shift is always inevitable. 

Binge Viewing Seems Like A Drug Overdose

The rise of streaming content and the access to entire seasons of TV shows has encouraged binge viewing by consumers.  Where new episodes of our favorite TV shows would appear once a week with a splattering of repeats to interrupt the flow, we got used to watching a season of a show, approximately 23 episodes from September to May.  But now a TV show can have a season of 12 shows to be watched from start to finish.  And we binge to get our fill as quickly as we can. 

And viewers are binging thanks to Netflix and others with seasons of House Of Cards, Unbreakable Kimmy Schmidt, and syndicated programming like The Walking Dead and Breaking Bad.   We can't watch just one and Netflix encourages us by auto-playing the next show in order before the credits even finish on the last show.  Like an addict, we are hooked.

And no sooner are we finished, we are desperate for me.  But when we are done watching the latest season of House Of Cards or other shows, we are forced to dry out till a new batch of shows are produced, edited, and available to air.  And so we switch our habit to another series to satisfy our incredible thirst for more content.  And we are never quenched. 

Our need for immediacy, instant messaging over emails, on demand over linear, and a constant flow of ready to watch video content, might possibly be creating a monster in all of us.  We can no longer live without our smartphones, checking them throughout the day.  We lack patience.  And waiting through commercials to watch cable TV sometimes drives us mad.  We are binging on content with a demand that can't ever seem to be fulfilled.  And I doubt that we will ever slow down to smell the roses.  Binge viewing is simply one more drug for our need for getting it now. 

Apple's Subscription Platform A Disruptive Force

Given the Apple infrastructure of retail, a full line of products from Apple TV to Apple Watch, plus its iTune interface and AirDrop capability, it is no wonder that the news of it's entry into an online cable subscription service has created quite a stir.  From traditional cable operators, like Comcast, to other technological rivals, like Google, Amazon, and Microsoft, Apple has challenged their current business models.  How?  Let us see.

Comcast may be concerned on a number of fronts.  While NBC is currently not in the mix for services on the new Apple subscription platform, they may be forced to launch based on their agreements with the FCC.  According to the NY Post, "As part of Comcast’s deal to acquire NBCUniversal in 2011, the cable giant agreed it would make its content available to online video distributors on a “comparable” basis to its rivals."  For Comcast, the debut of Apple TV could cause a rash of cord cutting as consumers decide they prefer the TV Everywhere advantage of Apple, the simplicity of use across all their devices, and the mobility.  They also undercut Comcast with lower subscription fees for a scaled down but desirable list of networks.  Add HBO Now and Netflix and consumers mayjust prefer the Apple TV box or iPad or iPhone over a cable TV box tethered to a single television set.  How does Comcast compete?  With an Apple launch scheduled for the Fall, they have about 6 months to build a new business and marketing plan.

As to the other streaming networks, Apple will compete with Sling TV and Playstation Network.  Amazon may feel they have lost a step.  They have the smart phone and tablet devices, but don't have the broadcast nets and most of their streaming is tied to their Prime subscription model.  Microsoft has XBox, but they have already disbanded the content side of that business to concentrate on cloud computing.  Building an infrastructure of content partners and a streaming subscription service may not be part of their current focus.  And Google has concentrated on building out fiber in limited markets.  They have Google Play and can reach outside the Apple closed infrastructure through the open Android platform.  But by being open, it may lose some control.

Still, the speed of change has increased greatly and mass adoption continues to occur at a quicker and quicker rate.  All of these technology companies have the ability to commit to change and focus on driving digital consumption.  And moving off of cable boxes and onto personalized devices delivers richer data about who is watching, when, where, and how, coupled with the same users using these same devices to make purchasing decisions.  Apple's infrastructure and usage base could potentially give them a huge edge in capturing a sizable subscription audience and rich data to drive advertising revenue. 

Aereo Files Bankruptcy

According to the NY Times, Aereo has filed for bankruptcy under Chapter 11 ending its run as a cable TV disruptor.  The Supreme Court ruled against the Aereo business model which enabled consumers to lease remote antennas to access over the air broadcast signals, digitize, and stream them for viewership.  Shows could be recorded for later viewing or streamed live to any device.  That model proved fatal for Aereo.

As to next steps, Aereo will try to sell off its assets.  And other OTT businesses will come up with different means to capture and transmit signals by placing antennas directly at the consumers' home.  Aereo's loss was the broadcasters gain. CBS has jumped on it by creating its own OTT subscription service for viewers to stream and watch its programming.  Perhaps other broadcast networks will follow.  Still, Aereos' appeal was that it aggregated all the broadcast signals onto one platform for an easier experience.  Farewell Aereo, your business model may have been in vain but as a disruptor you sure did light a fire to change. 

Taylor Swift Tells Spotify To Shake It Off

Free does not seem to be a good business model in the music business.  Faced with a digital disruption, music sales have been seriously hurt.  Music stores like Tower Records and HMV are gone and customers who once bought physical copies of music on vinyl or cd are now moving to digital downloads, while others are enjoying the access of music through streaming services.  But artists are also seeing less of a return on their creative expression and Taylor Swift has decided to do something about it.

On Monday, she pulled all of her music from the free streaming service Spotify.  Certainly, the decision was a financial one.  With single and album digital downloads down, and streaming usage up, the economics don't favor the artist.  The limited streaming availability may be part of a supply and demand relationship.  Cut back the supply and demand for Swift music will rise with purchase the more accessible option over streaming. 

And while Spotify has lost access to Swift's entire music library, Mashable notes "that Swift's music, sans 1989, is available on the Apple-owned Beats Music service, a smaller streaming rival whose executives have stressed a desire to secure artist exclusives." How long that lasts or what the business move is behind the arrangement may soon come to light.

As single artist pulling music from Spotify and other streaming music services may not cause major disruptions, but the success of such a move could be the disruption that causes other artists to do the same thing and alter the entire streaming business model.  Spotify needs content to attract its audience; without it, consumers will seek other sources.  The biggest concern though for the artists are that such a move leads consumers back to the Napster days of illegal downloads.  Some revenue may be better than none at all. 

Online A La Carte Could Make Cable Subscriptions A Better Deal

Bundling, in the cable vernacular, has been seen by consumers as a bit of a dirty word.  Forced to take a number of channels that they would never watch, consumers heard the pitch that they would get better value for all its accessible networks.  Bundling applied to the services received as well; the Triple Play enabled consumers to purchase cable, broadband, and phone for one low price, getting discounts for being a multi-platform customer.  But as the costs for cable keeping inching up, customers have felt that a la carte would get them a lower price for only the services they truly wanted.

With threats of cord cutting and cable nevers, broadcast and cable channels are finally opening the door to a la carte subscription models.  HBO announced plans to offer their HBO GO digital subscription to non-cable customers and now CBS has announced their plans to offer a stand-alone digital content platform outside the cable spectrum.  Their hope, and that of others, like Univision, is that incremental revenue growth can be found in the digital subscription model.  Plus, it protects and competes on the same web platform with current online rivals like Netflix, Hulu, You Tube, and Amazon Prime.  Will CBS or Univision offer these digital services as added extras to authenticated cable customers like HBO offers with HBO GO?  The allure of an added revenue stream might just prevent them. 

Current cable subscribers might be encouraged by such content availability online and consider finally cutting their cable cord.  Those tired of paying exorbitant fees for their cable subscription could now get just what they want for less.  Or can they?  Online content usage shows that consumers have an insatiable appetite for video.  We keep searching for more and more to watch.  And as we sign up for more of these online services, the costs add up to the tipping point where a cable bundle just might start to become a better content deal.  And consumers that opt out of their cable subscription may start to see their Triple Play discounts evaporate.  They will pay more for broadband only service from cable, and even more to up the speed for download, as cable operators keep raising their prices. 

Cable operators are certainly hoping that cord cutting will be minimal.  Because consumers' demand for online content is growing, operators hope that subscribers will buy cable AND buy these monthly online digital services. And that might encourage networks to shift programming off on demand and onto their paid subscription models.  A la carte might just win the day but consumers will find that they are not only paying more but receiving less content as a result of cutting the cord. 

Xbox Entertainment Might Still Have A Future

With Microsoft concentrating on cloud and products, their adventure into video content creation became short lived.  The Xbox gaming platform has been successful, but entertainment is a more risky business.  So with plans to shutter their Xbox Entertainment Studio (XES) arm, the possibility of a sale has emerged.  Per the Hollywood Reporter, "XES is shopping for a new home and has had preliminary talks with Warner Bros. about possibly becoming a stand-alone entity based at the studio. In that scenario, Warners would look to merge XES with Machinima, the video game-centric YouTube network in which it owns a stake." 

Given the rise of OTT platforms, this kind of deal makes tons of sense if the content inside the Xbox pipeline has some value to begin with.  A deal with XES doesn't necessarily automatically deliver a platform deal to the WB.  In addition, I would love to learn through Xbox research how many hours of video content are already being consumed through the platform.  I can only imagine that the vast majority comes through Netflix, Hulu, and You Tube access.  Lastly, one can only hope that the content coming out of XES is both desirable to the core audience and able to deliver some revenue in return.

In this case, it appears XES may have some distribution opportunities on premium cable as well.  Valuable content with cross platform interest that grows audience interest and long term appeal can do quite well.  Their hope is that their Halo franchise is case in point.  For Warner Bros, it is a continued eye on a future outside the traditional platforms of theatrical and television.  The rise of digital distribution across OTT platforms adds another market to mine.  And having content that appeals to the Xbox core audience demo may be a good fit. 

How Are You Getting Your News?

With the recent passing of Robin Williams and Lauren Bacall, it struck me how we are getting our news.  While some continue to use TV and radio for breaking news, the rise of social networking and digital feeds has taken over as the first source of information.  Some heard through push notifications from their Breaking News app, others from their Twitter or Facebook feeds.  It has become our primary source for news and information, literally moments after it happened. 

At the same time, we also find ourselves questioning the info.  Is it a hoax or true?  Do we accept the first tweet as gospel or wait for more verification to authenticate the story.  Because social networking is open to all to post, we don't trust it as much as a more verifiable news outlet.  The adage, trust, but verify, is often taken into consideration.

The other thing I noticed was how quickly online sites used this breaking news to remind us of the great work left behind.  Huffington Post, Buzzfeed , and others quickly created articles like 17 of the most memorable Robin Williams movie quotes and 10 Robin WIlliams TV appearances you forgot about.  We find ourselves both mourning as well as celebrating a life. 

As we have become more and more connected, we expect news and information to be delivered instantaneously.  No longer can we wait for the morning edition of the newspaper to arrive to learn more details or wait till the nightly news on TV for latest updates.  Our smartphones and tablets have become even more important to us in receiving content.  But don't be naive that it is entirely truthful either.  Given the speed of sharing, not all the facts may be in. 

Print No Longer Part Of A Multi Media Strategy

Content synergy, enabling companies to diversify and present its media across multiple platforms, seems to have a black sheep in the family.  While it seems crucial that content be accessible wherever and whenever the consumer chooses, there are limits.  The notion of content everywhere, on TV, on mobile, on computer, but not on print.  And companies are jettisoning their print businesses to focus on content everywhere else. 

This spinning off of print businesses has increased of late.  Earlier this year we watched Time Warner unload its Time magazine business into a separate company.  Last week, E. W. Scripps and Journal Communications announced plans to "spin off the Milwaukee Journal Sentinel and Scripps' newspapers into a new publicly traded company, Journal Media Group" while merging their broadcast business into its own business.  And today, Tribune Company is splitting its broadcast operations from its printing business and brands like The Chicago Tribune and Los Angeles Times.  Synergy with print media can't be done according to Scripps, Time Warner, and Tribune. 

Each of these new independent print publishing businesses, competing in what is assuredly a very mature business, have to work alone to create new multimedia partnerships.  Pushing hard to transition from print to digital, from test and photo only to the incorporation of video and audio content from new sources.  Each of their parent companies couldn't see ways to do it across businesses and sharing content internally.  Its time for these print companies to either sink or swim.

What went wrong?  Why couldn't they find internal economies of scale to support the old business model while new ones are established?  Why couldn't synergy work?  I think that part of the problem lies in the fact that public owned companies are hard pressed to grow quickly and anything that slows them down must be jettisoned off.  Until print finds its footing in a digital space, it is a mature business with high costs and an uncertain future.  Public companies can't always afford to nurture and be patient. 

Another possibility is that new digital content companies are already pursing old print customers; consumers can go online today and find the news they need from websites and social networks.  Of course, they lack the credibility or full resources of an established news gathering organization.  And in a world of immediacy, we seem to prefer now our news quickly at our fingertips and in short, easy to digest bursts.  That puts print at a disadvantage until they can better connect to the consumer with a continuous and noticeable update of their news feed.  And consumers have to see enough differentiation to agree to pay a subscription fee as opposed to trolling the web for free content.  That may be the most difficult model to maintain.

So expect more companies with broadcast and print businesses to follow suit.  Spin off their old newspaper and print distribution businesses and focus on their broadcast and digital content instead. 

Will Broadcasters Drop Their Over The Air Signals?

As Aereo disrupts the broadcast platform, it poses a potential threat to long term retransmission fees.  The more Aereo wins court cases, the more cities it populate, and the bigger the threat to the revenue model.  If Aereo can retransmit broadcast signals for free, why can't cable operators.  And that possibility concerns broadcasters. 

In the past, Fox Network threatened to move from broadcaster to cable programmer, and now we learn that ABC Network considered it as well.  "A cable network doesn’t broadcast its signal over the air like broadcast networks, preventing Aereo from taking the signal and re-transmitting it online to paid subscribers, as it is doing with the broadcast networks in certain markets."  Of course we have also heard other rumors that ABC/Disney parent would consider selling all their owned and operated affiliates as another possibility.  Clearly, Aereo's disruptive approach has gotten the broadcasters to reexamine their current revenue models.  Aereo's approach could also quickly deflate the valuation price of any affiliate sale, unless all affiliated stations converted from broadcast to cable. 

And while Aereo may be successful in building antenna farms, I am not convinced that cable operators would bypass license fees through a similar approach.  The cost of building and maintaining verse negotiating for more streaming access to broadcaster linear and on demand programs would justify maintaining the status quo of license fees for cable operators to continue to pay.  Plus, cable operators have more flexibility in building out its broadband and wireless platforms for authenticated customers with discounts for those that subscribe to cable.  Such a radical approach like converting broadcast to cable is like killing a mouse with an elephant gun; there are simpler solutions.

Is Print Poised For A Comeback?

In the last couple weeks, major newspapers and publications, including The Boston Globe, Newsweek, and now The Washington Post, have been sold at deep discounted prices.  At the same time, Time Warner is ready to jettison the Time, Inc. business.  Print revenues overall are down and many wonder what the future hold.  But I believe that print is poised for a comeback.

Print content distributors are at a crossroads between traditional hard copy and digital distribution.  Younger consumers are embracing the web and have found their content without paging through a newspaper or magazine.  It is the older demographics that still enjoy getting their newspaper and sorting through each section finding the articles they want to read.  The challenges that face these new owners and print overall are many, but there are also opportunities.

The Washington Post, like other publications, still have a powerful brand name.  Their history and years of publication make them a very credible resource.  And it is that brand that has to push deeper into the digital universe.  Newspapers are recognized by the region they serve.  They may offer national and international news but it is their regional and local news reporting that identifies them so strongly.  That localism can be used to better sell them in their market. 

For newspapers and for magazines,  these publications must redefine their distribution strategy as they slowly move away from traditional media.  I recommend a strategy where every print subscriber is automatically a digital subscriber.  Let the consumer then decide how they wish to receive their copy.   Print must also embrace a multi-platform approach with plenty of video and interactive content to highlight the info and articles.  The tablet and phone have become ideal mechanisms for consumers to access their subscriptions.  Make its access ergonomically attractive and easy to use.  And lastly, embrace your content and the writers that create it.  Make them exclusive to your platform and market their value and uniqueness of the stories they tell and the news they write.  These journalists are part of your brand value, too.

Digital has lowered the barriers of entry and brought more competition against print.  It is hard to sell subscriptions when websites offer their content free.  That scenario faces other businesses as well.  The bottom line I believe is staying true to the quality of the journalism and to let that uniqueness and exclusivity drive the value proposition. What Howard Stern is to Sirius, David Carr is to the New York Times and Walt Mossberg is to the Wall Street Journal.  Push that exclusivity.  Consumers will pay if they believe there is value received.  And print delivers a lot of value.  It may be a slow road back, but the "new" newspaper should soon be ready for its close-up.

Aereo Still Disrupting Cable Industry

The broadcasters are unhappy with Aereo. Aereo is taking their signal and not paying them a retransmission fee or providing any data on consumer usage.  So broadcasters can't sell a higher advertising reach or receive additional revenues.  And broadcasters believe that Aereo is reselling their service to the consumer without their consent.  And in a majority ruling the federal courts have sided with Aereo. "A New York federal appeals court has denied a bid by the major TV broadcasters to shut down New York-based tech startup Aereo, which picks up free, over-the-air TV signals and streams them onto the Internet." Aereo is disrupting normal business practices and if they are allowed to continue, broadcasters may be at risk of losing all their license fee revenue from cable operators. 

So is it stealing to take something that is offered for free over the air and repackage it, bundle it into a bigger package, put an interface around to enable programs to be recorded and viewed, enable it to be watched across multiple mobile devices, and sell it to consumers at a low price?  Aereo certainly adds unique incremental value to the broadcaster's antenna service and serves an audience seeking a low cost alternative to cable. 

Unfortunately, the Aereo win is the broadcaster loss.  Broadcasters in market are unlikely to offer broadband access when they are getting a fee from the cable operators in the DMA they serve.  And cable operators may have clauses in their agreements with broadcasters that actually prevent them from offering any kind of competitive Over The Top (OTT) offering of their signal.  If they don't cable operators might likely drop broadcasters that attempt to offer their own OTT access. 

So the likely next round for broadcasters and Aereo will be the Supreme Court.  "As of now, Aereo’s service is legal, according to the U.S. Second Circuit Court of Appeals."  Should the Supreme Court here the case, the case might just revolve around the FCC and the requirements of broadcasters to offer their signal without charge to consumers that seek access.  For those not willing to place their own digital antenna in their home, Aereo offers additional functionality for a fee, and that added value is what the consumer ultimately pays for.  As long as Aereo uses individual antennas for each account, they may ultimately be the winner.  And it may be up to broadcasters to negotiate an agreement to access usage data for a direct connection, no antenna farm required.

Tribune Follows Others on Path To Split Print From Video

Tribune has emerged from bankruptcy with a plan eerily similar to others before it, separating the video business from print.  Following on Fox and Time Warner, Tribune sees more growth potential concentrating on the video platform and selling off the print one.  "The company offers familiar justifications for the spin off of its assets in the weakening print business to create a new company called Tribune Publishing".  Fox, Time Warner, and now Tribune all see more revenue growth in the video media side of the business, while print suffers through digital conversion. 

What is sad that none of these companies wish to use internal synergies to help the print business build out a new multi-media model to reflect the rise of digital distribution through the tablet and other mobile devices.  Unfortunately, as I have said before, Tribune's focus on broadcast and acquisition of the Local TV affiliates is based on the assumption of growing affiliate fees from cable subscribers.  Disruptive companies like Aereo and the rise of cord cutting could dampen that growth and limit profitability.  Ultimately, I am sure, those factors have been discussed by their senior management.

So we are seeing media companies splitting their platforms to focus more fully on video content and distribution.  Print companies will have to go it alone but perhaps open themselves to new partnership opportunities that will enhance the digital print business. 

Job Posting: CEO of Barnes & Noble

It seems that the CEO seat was too hot for William Lynch who resigned as Chief Executive Officer of Barnes & Noble.  "The board of directors tapped Michael Huseby as CEO of NOOK Media LLC and president of Barnes & Noble; Lynch’s title has not been filled, while the NOOK CEO post is newly created."  Why a CEO of Nook when they have scrapped the their tablet is questionable, but maybe to help with the plans to close the business.

What B&N needs is a leader that sees the potential that I believe B&N still possesses, a visionary to guide their business into the next generation of book seller and digital aggregator.  It will not be an easy road and success depends on building a brick and mortar business that adapts to a digital business while diversifying and managing a retail presence.  Others before them have failed;  Borders already with books, Tower Records and others with music.  But B&N still has a chance to defy those odds and stay a competitive threat.  Unfortunately, a change at the top was most likely necessary to start to adapt.  I wish them luck.

Can AOL Make Patch Profitable?

Local was once the battle cry of cable operators.  To compete against the national, not in your backyard, satellite companies, cable operators touted local offices, local management, and local participation and pr in neighborhoods in which they operated.  And while some of that pr still remains, cable operators recognized that to be more profitable required economies of scale, regional offices over local, and national campaigns over regional ones.  Costs through consolidation were reduced and profits increased.

AOL's entry in local neighborhood news faces similar stumbling blocks.   Costs to manage sites on a local basis are both expensive and time consuming and the real ad dollars come from bigger buys.  You can try to aggregate all the sites into one number but it hardly beats one site with the same results.  "Patch, with more than 900 sites supplying news to communities or neighborhoods, has become a test case for both the online-news industry and AOL’s ability to transform itself from a dated dial-up service to an ad-driven Web publisher."  I am a fan of Patch; I check it out a couple times a day for local info on the community.  But I have found that the quantity of local news has decreased in favor of more regional news, making the site less relevant at times.  Can Patch be both local and profitable?

Consumers and users care about the former, stockholders about the latter.  And that is the conflict.  Can Patch be both relevant for the communities each site serves AND a revenue producer for the company?  One hopes that the better the quality of the content, the more clicks the site will get, and the more ad revenue it will return.  But the costs to drive content creation in each individual community must be high and so the ROI to pursue better content appears unlikely.   Companies like AOL, seeking to get to profitability, have to do what cable operators and others have done, cut costs through consolidation and raised prices on ads on the sites.  "The push for profitability has forced Patch to put single editors in charge of multiple sites, increasing burnout."   But I fear that less relevant local stories on these sites will only go to reduce its value and lower clicks.  A lose-lose scenario if ever there was one. 

I am a believe in Patch and only hope that they invest in more local content, partnerships with local and regional newspapers, and town governments.  Add more revenue opportunities through e-commerce and continue to pursue the local connections.  For me, Patch has become a resource to the neighborhood and one that I would hate to see go away.