Bundling vs a la carte

There have always been complaints from homeowners regarding purchasing a package of channels against the ability to only purchase the individual channels you want. And at first blush, it sounds like a good move for the customer, pay for only what you want. But in reality, that might not be the case. First, people really don't watch channels, they watch programs. So if they find themselves liking a new program, they will then start moving to a transaction type model to enjoy the individual show. The more you watch, the more you spend. In most cases, buying in bulk, whether at Costco or on your channel line-up, ultimately gives you more for less.

Yes, we get channels that we may not want to watch, but the reverse also holds true, others may not like the channels we watch. Ultimately, the aggregate purchase enables all to get access. Now some channels are placed higher up in tiers and force an additional purchase, and even others may not even be available on your particular cable company's line-up. It is not an all or nothing environment for channel viewing. But the system isn't broke, so does it need to be fixed?

So how does the issue get resolved. The answer I believe does lie in the world of broadband. Channels and shows can find distribution outside the linear cable line-up. VOD enables a subscription or transaction opportunity. That cable customer can get access to on-demand without purchasing any additional channels. And the opportunities with IP delivered programming and new platforms like Joost brings more choice to your fingertips. And isn't that what we really want, more choice. So this lawsuit shouldn't be about antitrust or program packaging; the effort of these litigious individuals should be about embracing competition from Direct TV, Dish, Verizon FIOS and AT&T U-Verse in the marketplace, the choice of programming on the web and on VOD, and fair and open access to the web. That will keep the pricing of programming reasonable.

NBC to offer free episode downloads

Is NBC's digital distribution strategy clear to anyone out there. Shows are available on Amazon Unbox, Hulu, and now on NBC Direct. Where does the user end up, hard to tell. What drives them to one of these sites. Also hard to tell. How does the consumer find out that the episode is free with commercials on one distribution platform, and available for permanent ownership on another. Beats me. Why did they create Hula in the first place and when we they end that partnership with Fox. (I'm guessing it closes in a year.) We are watching NBC go through a great big learning curve. And it will be interesting to see what they do next.

CTAM NY Panel explores broadband vs cable for content

Today's panel, from CTAM's annual Blue Ribbon Breakfast, asked the question, can broadband video be cable's newest opportunity. Perhaps the bigger question to ask would be Friend or Foe.

An "A" list of panelists that included Herb Scannell, CEO of NextNewNetworks, Matt Strauss, SVP New Media Comcast, David, Eun, VP Content Partnerships Google, Dallas Clement, SVP Cox Comm, and Bruce Campbell, President Digital Media Discovery, and moderated by Will Richmond, Principal of Broadband Directions, spent the hour discussing the changes in viewing behavior and the opportunities and threats that broadband viewership brought.

The cable perspective viewed it as an opportunity provided the infrastructure included them. Matt spoke of the infrastructure to reach the user however they choose to watch and that Comcast is committed to adapt to meet that changing pattern. He points to the success of VOD and the eyeballs they are reaching as one example. And Dallas's comment regarding Hi Def programming makes the cable platform more effective for watching this type of content. Google talks publicly of its partnership philosophy, but left unsaid is how they can enter the advertising side of the cable business and be the transaction arm on the cable platform. Programmers seek eyeballs, either through the synergy from existing linear brands or by distribution efforts. As Herb Scannell suggested, we can't expect the viewer to come to us; we need to put our content out to the viewer wherever they may be. Herb also noted that the mantra is no longer "content is king", but rather "the consumer is king". The conversation even ventured into the changing pattern of subscription content, as noted by the change at Times Select.

This was a terrific panel. I must note that I am currently VP on the CTAM NY Board, but was not responsible this year for this particular event's planning. The committee outdid themselves to create a panel that will be talked about for quite a while. How consumer viewing patterns change and how the industry adapts its infrastructure to remain valuable seems the key determinant. The interactive elements of video, data, and mobile into a cohesive service may be the key win for all parties.

Murdoch making the case for free WSJ online

Is this becoming a trend?!

Can Subscription Work on the Web?

Apparently the New York Times is giving up on a dual revenue stream and no longer charging for access to special features on their site, N.Y. Times Select. Lost fees will be made up, hopefully, by more eyeballs and thus more advertising revenue. So with the Times caving in, does this lead to more sites doing the same. I was not a subscriber to their website, although we have been getting the print edition home delivered for years. I always felt that I could get the information I needed without paying extra for it. obviously others felt the same.

And yet, I am a subscriber to the Zagat subscription site, receiving both a book and full web access to their reviews. Am I in the minority; do most people find adequate info to their search without paying extra for membership. And will that type of open access lead to fundamental change in behavior. Will people stop buying the print edition of the Times or the Zagat book, when the info is so easily accessible on the web. In these two cases, and as many others are noticing, convergence is changing behavior and old methods need to be replaced with new thinking. How companies find new ways to monetize these businesses will determine their continued existence and their profitability.

Hearst to Acquire Health Web Site RealAge

The announcement by Hearst Magazines that it is buying a consumer website is further recognition how the web has changed our behavior. I was recently asked when did I make the jump from going to the newspaper to look up movie theater times to searching for that info on the web. I still read newspapers, but the immediacy of the web and the fact that the info can now be retrieved faster led to that transition.

In the case of the above announcement, what magazines need to recognize is the same shift of behavior and to adapt each to suit the user's needs. Magazines aren't dead, and the value of the Magazine brand can extend across technologies. With this acquisition, Hearst appears to be spreading the risk by sharing the content of the RealAge website across multiple magazine brands, Oprah and Cosmo.

The key is synergy of content with convergence across distribution, to satisfy user interest and keep them loyal to the brand longer. To escape the long tail of usage and find a large audience, content from the web needs partners across other media and multiple distribution paths, to build brand awareness, preference, and value. Big fish do eat small fish and that is what makes them bigger and stronger.

Video Distribution Wars Heat Up

Great article from MediaPost's Online Video Insider! Worth reading.

The bottom line - many different distribution strategies aimed to reach the user. Is it a zero sum game or can multiple approaches work. Which one does the user embrace and which don't achieve their full potential. The one thing for sure, digital distribution seems to allow for a lower barrier to entry. Own the content and you can decide which distribution plan to embrace!

The Convergence of Devices and Content

Gary Shapiro, the President of the Consumer Electronics Association, spoke recently at the International Broadcast Conference, assuring the broadcasting industry that they are far from dead. As he notes, change is inevitable and the convergence of viewing devices and content, along with the shift in viewing toward more mobility, brings greater opportunity. He points to devices like the iPhone as examples of this convergence, and also to more viewing choices such as wireless phones, computers, and PDAs.

His most interesting note is to proclaim that the broadcaster has the best direct line to the end user and that they "own the highest value spectrum there is," better than cable, satellite, wireless, and web. Interesting, since most customers that still take their broadcast signal over rabbit ears will have to buy a digital antenna, and perhaps also a new TV set that takes the digital signal. Also, broadcast has not come up with a direct to home device for hi-speed web, relying on phone lines or cable. I argue that this FCC digital transition may lead these remaining non-cable, non-satellite customers to in fact take one of these products and force the broadcaster to rely even more on their relationships with cable and satellite.

Recent ads by cable tout that competition is good and that by them entering the phone business they are bringing healthy competition to the user and thus better pricing options. The triple play by cable companies have in fact been an ideal way to lower churn and retain customer loyalty. They also have the pipeline to interactive content, like VOD, and the convergence of data and video.

At the same time, the FCC transition may also be helpful to competition. Along with a digital antenna and superior signal, comes HD programming directly to the set, without a converter. Niche programmers with an inability to get prime channel line-up space on cable or satellite might consider offering a digital signal and become a broadcaster of their own channel. As Shapiro says, "A single touch of one button and the consumer is instantly dialed in." Still, how the broadcasting industry answers the issue of interaction will have to wait for another day.

CBS interconnects local affiliate sites to its interactive network

While the MTV side of the family employs a decentralized approach to its content and websites, CBS is going at it from an opposite direction and interconnecting its diverse family of affiliates to a central site for content.

I'm kinda partial to the CBS approach. A user looking for CBS content, say Survivor, is likely to utilize search for the show and be pushed to the CBS site. There they can find ways to localize their interest to their local broadcaster. I also think the synergy of a central site allows that user to learn about other shows of the CBS Family. In addition it is keeping the brand value inside the CBS brand. Unlike NBC and Fox's shared site, Hulu, and independent sites like iTunes or YouTube.

It's still about creating a well organized site with accessible search that intuitively understands the user and what they are seeking. It's also about all these sites working together to push the website brand. "Our collaboration with CBS Interactive represents another great leap forward in the evolution and continued growth of our TV stations' digital media initiatives," said Jonathan Leess, digital media group president and general manager, CBS Television Stations. "The expanded integration of CBS Entertainment, News and Sports video content into our sites and, ultimately, the sharing of hundreds of thousands of locally produced, on-demand news clips from our award-winning, local newsrooms truly makes this a win-win partnership."