The Future of TV Remains Bright

While the buzz remains on how to successfully converge the web and TV, the financial state of television today remains healthy. The growth of large HDTV screens, the consumer preference for a "sit-back" experience for longer content, and the social elements of families viewing together, means that the ad dollars continue to be effectively spent on TV viewing, live as well as on-demand. And as Reuters suggests, "TV advertising sales are weathering the current economic storm better than media categories like radio and publishing, and perhaps even the Internet."

The writers strike may have hurt broadcast TV today, but once they get their machines running effectively again, good content should return. In the meantime, cable TV continues to offer a diverse listing of content appealing to unique audience segments. Clip viewing may be ideal for the computer, but most viewers would rather watch a half hour or longer program on a big screen. As web shows are easily downloaded to the big screen, the viewer will only have more choice to confuse them. It will then take a great on-screen navigation device and an expert or list of recommendations to help find relevant and targeted content based on the individuals likes and dislikes.

TV uniquely brings a multimedia experience to the consumer that other media do not. "For advertisers, the big advantage that TV holds over other media is that it still allows them to reach the biggest audiences at any given moment in time. It's also familiar to advertisers, who have decades of experience with 30-second spots and vast research about audience behavior." Its no secret that newspaper and magazines have seen advertising and subscription revenue fall. "Other traditional media have not held up as well, with radio and publishing both hard hit by the downturn, continuing trends that were evident even in a healthier economy. Local advertising has been the culprit, deteriorating faster than national advertising across media, even TV."

How content reaches the TV screen, from the cable company or directly from the web, may matter to the technologists. The average viewer seeks a plug and play device that simply delivers the content to their ideal screen, simply and in a straight forward way. That convergence will also enable a more accurate measurement of usage. The content that attracts the largest audience, relevant to a target demo, will appeal to advertisers, regardless of the device they view it on. And advertisers will embrace a more targeted approach to effectively reach its core demos.

Synergies or Spin offs

What's a major corporation to do - get larger or slim down. Find vertical or horizontal collaborations and build cost efficiencies or sell or spin off assets into separate and distinct entities. And is either strategy good for the goose or for the gander; that is, does it benefit the health of the company or the shareholder. And are the two beneficiaries on the same page or at odds with one another.

That seems to be the question as more companies are choosing to shed assets or being pushed by shareholders to do so. From Time Warner to Liberty, the move is on to split. For Cablevision, investors are grabbing stock with the hope that by spinning off Rainbow, the stock price will rise. For GE, shareholders believe that NBC should be spun off as it is unrelated to its other business ventures. But maybe it is being done for another reason. As Business Week speculates, "some of the world's top media companies may just be shedding noncore or incompatible businesses to give themselves leeway to nab new assets in growing areas, such as the Web and digital television." But does that mean that distribution and content are incompatible while staying a pure content company is more strategic.

At the end of the day, it is about unlocking value and companies may see the spin off of one entity to acquire another better aligned with its future endeavors. "Time Warner's cable unit, which officially spins off later this year, could become an acquisition machine if its stock—separated from Time Warner's advertising-intensive businesses—takes off. Maybe the new company makes a bid to buy Cablevision, the New York-area cable system it has long coveted." At any rate the entertainment landscape seems to be changing rapidly.

NBC Teams Up With Google

NBC is testing letting other companies sell its advertising by enabling Google time on some of its smaller cable channels. No you can't buy an ad through Google on NBC or even on USA, but you will be able to buy through Google on MSNBC, Sci Fi, Sleuth, Chiller, and Oxygen. For Google, it is a "desire to sell ads in different places besides next to its search engine, and NBC's efforts to get access to advertisers who currently advertise online through Google but don't place any ads on TV."

How long this "test" will last, only NBC will know. Will they decide to take back this inventory once they realize that they have the ad team in place to handle TV or because of the large number of cable channels they own and the even larger number of spots needed to fill, they have more than enough supply and it represents a chance to eke out a bit more revenue. Will NBC release more supply from some of its bigger properties or not? Time will tell. Once Project Canoe is fully functioning, this partnership may not be necessary.

Google is also using data from its partnership with Dish to gain more insight into targeting the ad to the viewer. Whether the Dish sample is enough to claim reliable, statistically relevant data, I wonder, but it is what they have available at the moment. For the time being though, Google can measure what ads are working and who may be watching.

I give credit to NBC for trying new ways to bridge the gap between internet and TV. They are clearly thinking about the future of TV.

New E-Newspaper Reader Echoes Look of the Paper

Seems like there is new competition for the Amazon Kindle. Plastic Logic has come up with a similar device utilizing the same E-ink technology to create an alternative to paper. It differentiates itself from the Sony Reader and Kindle with a larger screen size. While it has not been released just yet, it demonstrates the direction newspaper and magazine reading is taking. Once the public becomes more comfortable with a different tactile experience when reading their daily paper, this type of technology might just take off.

While I applaud the larger size, what is even more important will be the flexibility of a device to fold and bend to fit into a pocket for easy mobility. " The ideal format, a flexible display that could be rolled or folded like a newspaper, is still years off, says E Ink. But it foresees color displays with moving images and interactive clickable advertising coming in only a few more years, according to Sriram K. Peruvemba, vice president for marketing for E Ink."

Wireless downloads, long battery life, perhaps even the ability to self recharge, and color pictures and fonts would make this a must have product and an ecological game changer. "The big question for newspaper companies is how much people will pay for a device and the newspaper subscription for it."

Unbox Now Amazon Video on Demand

Hulu, Netflix, and iTunes have another competitor in the digital download arena. Unbox is new and improved with a revised name that more accurately describes what it is. While some have applauded the new look, others have found the Amazon viewing experience less than enjoyable. "Amazon bridges current offerings from iTunes, Hulu, and Netflix, though it’s important to note that, like iTunes, none of its content is ad-supported. It beats iTunes on TV because it has NBC, and it beats Hulu on movies because it has far more of them. Netflix’s movie service, meanwhile, only provides streaming for PCs." We are clearly in a learning mode with rapid change of these players. The average viewer is still trying to get the hang out of VOD and DVR on their cable box, but internet viewing will surely grow extremely quickly as more players emerge and more marketing reaches the masses.

Comcast and Fancast better watch out. As a Comcast user I wonder, how many shows can I watch before I hit my limit. Competition in streaming will only get more intense and your customers will not put up with slow downloads and jerky pictures, especially if it is determined that the cause is their ISP and not the web page.

Direct TV Learns its Lesson, Re-ups With Tivo

Tivo was once the DVR for Direct TV, but ended that relationship 3 years ago to bring consumers a generic DVR device. Echostar tried to copy the Tivo software but ended up losing its case in court. And Comcast sees the opportunity to offer Tivo as a choice of DVRs to its users and is expanding its rollout.

So as the on demand and viewer controlled world continues to gain traction, Direct TV has gone back to its former partner to once again offer the Tivo DVR to its consumers. "Under the nonexclusive pact, DirecTV and TiVo will work together to develop a broadband-enabled HD DVR service, slated to launch in the second half of 2009. The product will support the latest TiVo and DirecTV features and services, including TiVo's Universal Swivel Search and TiVo KidZone."

It seems a good deal for both Direct TV and Tivo, bringing an exceptional product in front of the consumer and offering them the choice of which DVR to take for their home. But is it too little, too late? Now that the Network DVR approach that Cablevision has pushed and was recently okayed by the courts, the next iteration of the DVR. Can the box in the home simply become a dumb device while the brains and content are centralized at the server? Perhaps Tivo is already thinking about how best to convert its decentralized software approach to a N-DVR device. In the meantime, this deal wants again puts Tivo in front of more customers and that sounds like a good deal.

Will The Web Become the New Testing Ground For Pilots?

Would you rather watch an old episode of Lou Grant on Hulu or a new episode or webisode of Gemini Division? If either shows huge interest will it lead to a show on broadcast or cable TV? It seems renewed interest in Lou Grant might just lead to a remake. Heck NBC is giving us Knight Rider AGAIN. But it could also be the place to try out concepts, test characters, gain consumer insights and build interests in brand new series like Gemini Division, N, Sorority Forever, and many others.

What sounds familiar is that shows are being built around sponsors. "Over at cbs.com the product placement is the product in “Stephen King’s N.,” a 25-episode series that serves as a teaser for a new short-story collection from Mr. King. (A combined effort of CBS, Simon & Schuster and Marvel Entertainment". And Gemini Division promotes a series of ads for Microsoft’s Windows Mobile operating system. In the Golden Age of Television, those shows had sponsors, too. And they were just as blatant. It is the ad dollars that pay the bills/

So will we see these shows pop up on network TV later in the year. Quarterlife tried but failed miserable. Still a good concept, well executed, with marketing promotion around it could prove successful. Only time and money behind it will tell.

For Web TV, a Handful of Hits but No Formula for Success

So which TV shows are you watching on the web? These "webisodes", from both amateur and professionals have filled the distribution pipe with more and more choice. And with all this glut, it becomes increasingly harder to know what to watch. Certainly the writers strike limited the choices from the established TV networks, allowing viewers to seek more alternatives. The problem is that the average viewer relies on the expertise of the TV network and their promotional skills to educate and inform us of new programs. In a web world, that promotion seems to be more viral.

Most seek out known web channels - You Tube, Hulu, Nextnewnetworks, My Damn Channel, Funny or Die, and others. But as these choices continue to multiply, the possible audience continues to fragment. And that fragmentation makes it hard to aggregate viewers into a meaningful number to advertise against. In the short run, they can get meaningful hits; but in the long run, it is hard to maintain those numbers on a consistent basis. The big networks have felt that firsthand.

So what is the viewer to do. I believe it spells opportunity for the big networks to once again use the power of the TV medium to distribute on its main channels and promote its associated web channels as the place to watch more. Tying these web channels back to a bigger network can create a more segmented approach. Those we channels without a meaningful partner must either get larger to compete or will soon fade away. It may be challenging and fun to create shows without big budgets or unions to control labor costs, but once the business model is determined, this gratis programming cannot continue to function. Goodwill will work for only so long.

Comcast Sets Subscriber Bandwidth Limit

How much is 250 Gigabytes/Month? To me, its like asking how much Electricity do you consume per month or how many gallons of water you use. What if those companies limited you to an amount. If you don't know how much you currently consume, how can you know whether it is enough or not. And how would you measure your usage so you don't run out before the end of the month. And what would happen if or when you exceed that amount.

Comcast is painting the picture that it represents more than enough. "To hit the 250-Gbyte ceiling, a customer would have to do any one of the following, according to Comcast: send 50 million e-mails; download 62,500 songs or 125 standard-definition movies; or upload 25,000 hi-resolution digital photos." It is made to sound impossible to hit, doesn't it. So then why that number? If its so unreachable, why worry.

Clearly, Comcast is most concerned with who they describe as bandwidth hogs. More typical users are meant to feel that it won't affect them. But I look at these heavy users and see opportunity for Comcast, not a problem. These are your best customers, consuming your product at a high rate. "If a customer uses more than 250 Gbytes, he or she may be contacted by Comcast to notify them of excessive use, the company said. 'At that time, we'll tell them exactly how much data per month they had used,' Comcast said. 'We know from experience the vast majority of customers we ask to curb usage do so voluntarily.'" Could their be a way to monetize and manage that important customer base without causing such bad pr. It's almost like you want to drive them away to your competitors. And I'm sure Verizon would love to take them!

To Comcast's credit, they are trying to support the speeds to the many, by limiting the heavy user fews. But today's heavy users will in the near future become the majority. As more of us utilize the web and grow increasingly more comfortable with large file downloads, more of us will be affected by these download limits. It is a bandaid cure to a much bigger problem. A better solution is clearly needed.