The Connected Home - Solving The Digital Device Dilemma

There is a lot of talk about the portability of content, TV, PC, Blackberry, Phone, but how about the ability to simply move it effortlessly inside your own home. Record a show on one TV set in the living room to watch on another in the bedroom; move your songs from the pc to play on your kitchen speakers; Call your Tivo to remember to record a show. We are clearly in the early stages and it is clear the technology must operate under a common language to work most efficiently.

One idea that is just coming to fruition are using the cable backbone to connect phone with TV. When a phone call comes in, the TV displays the number, letting you know who is calling before getting out of your seat to answer the phone. Its a first step, but it recognizes the potential of connected devices. It is how cable operators can maintain a foothold on content, especially when it involves an interactive experience. And as these devices and interactions get more complex with the multitude of devices to connect, service provided by the cable operator can be its greatest asset. Most people are tech savvy and need devices that are plug and play; at the same time, they need to know they have an expertise readily at hand to support them if trouble arises. Per Apple's Steve Jobs, "The digital living room should come with the warning 'some assembly required,' he said. It's not an easy thing to set up, as evidenced by the number of people who buy high-definition (HD) television sets, hook them up incorrectly and can't use the service as intended."

As we keep putting more digital devices into our home, connecting them together becomes a necessary next step in this changing entertainment landscape.

Sony Pictures Puts ‘Pineapple Express’ iTunes Download on DVD, Blu-ray

How do you impact the revenue of dvd sales. Differentiation has helped - alternate endings, shorts, games, and other added features. Blu-ray came next, a better picture to complement your HD TV. But dvd sales have been declining as consumers are renting rather than buying content. VOD and streaming have replaced dvd purchases. Well Sony seems to see the writing on the wall and if you can't beat them, join them. Consumers want choice and cable operators have shown that bundling works. The result, is a dvd purchase gives you the stream for free. "The two-disc DVD and Blu-ray Disc offerings of Pineapple Express will include a free download of the film from iTunes, in addition to a downloadable digital copy for PCs or the PlayStation Portable." It is that flexibility that might just breathe new life into the dvd revenue stream. Consumers are seeking mobility and flexibility and Sony seems to be delivering it to them.

CTAM - Cable Has The Best Positioning

The cable industry likes how it is positioned against competition in the content distribution space, despite a bad economy. The use of bundling of communication services - cable, phone, and data, the consumer of these products is less likely to switch or drop services. "Cable subscriptions are still cheaper than taking the family to two movies a month, executives noted. The bigger challenge, going forward, is figuring out how to let consumers move content they have already paid for among the technological platforms they utilize." That mobility seems to be the next step in controlling the customer. Verizon and AT&T each bring a huge fourth component to the mix, wireless. What they have yet to do is build that product into a bundle as successfully as cable has done. And cable is looking to add a wireless partner as well.

"Ellen East, executive vice president and chief communications officer at Time Warner Cable, said her company is looking at a way consumers can authenticate themselves as paid subscribers when logging directly onto programmer’s sites. That authentication would allow the viewers to access television content on their PCs or mobile platforms. " It once again calls into question the relationship between content and distribution. Content owners are keen to control where they exhibit and how they are reimbursed; distribution companies offer the backbone and the ability to aggregate and monetize multiple pieces of content to the subscriber.

Consumers are looking for more ways to control when and where they are viewing content. And as we have become a more mobile society, the content needs to follow us, not us to it. It may not make a lot of sense that consumers may be watching long form content on tiny screens, but it is for them to decide what serves their need best.

Changing Face of Sports On TV

The NFL Network is back again, starting tonight with more football on TV, and less people watching. The trend continues of watching games get moved to higher priced channels.

Remember when tickets to pro games were priced at family friendly rates. Remember when local pro football games were only available on TV when the stadium was sold out; and when it wasn't, the local broadcaster or bank chipped in to buy the seats so the game could be shown on free TV. Remember when TNT and ESPN each got 8 games to air and football fans had to buy basic cable to watch more games. Baseball did it too with regional networks like Prism, Empire, then YES and SNY and others. TBS once the home of Braves games moved them to another network, Sports South to further divide the pot and increase the revenue. Our history is to keep moving our sports off free TV to tiers and now it seems to subscription. Back to football, remember when Direct TV sold a package to every out of market football game to the rabid football fan, causing them to drop their cable subscription to buy further up into a satellite subscription. And the NFL, hoping to further move fans to pay more for access, has built a set of games that only some cable operators are making available for purchase. While the NFL fights to be paid a license fee to make this channel available year round on basic, despite the fact that pro football games are only on for a couple of months. "'I’m disappointed people aren’t seeing the product,' Steve Bornstein, the president of the network, said Wednesday by telephone. 'That’s my frustration. We’re putting out a good product. It’s a product that people seem to be happy with. My viewership is up even though I have less subscribers than I did last year.'”

And what is the next step for the NFL. As the MLB has proved, create a subscription website that offers a mosaic of all the games to choose from. Buy one game a la carte or buy the subscription. TV makers are pushing internet into the TV set. Disney and others have pushed films into Tivo boxes. What is next for the NFL, the same thing. Bypass the cable operator and push subscription over the web and through other "connected" boxes. For those that want to watch their out of market games, it seems the logical next step.

FCC investigating cable TV pricing policies

The FCC continues to have a frosty relationship with the cable industry. While the issue may be how cable companies are tiering channels into higher priced packages, using the transition from analog to digital as the rational, it may just open another can of worms. Consumer confusion over the transition provides perfect cover to push digital boxes to every TV set in a cable home, even though these boxes are not necessary. More boxes, more fees, more opportunity to sell in more services. As the FCC looks into pricing practices, what else might emerge.

And how high can cable pricing go. Under today's economic conditions, will we soon hit the mark where homes opt out of cable and back to their over the air antennae. With a high speed line to augment their viewing habits, cable subscription may start to see a real hit.

Watching TV and Surfing the Web At The Same Time

Did they really underestimate peoples' abilities to multitask? How tough is it to surf the web and watch TV? In our own youth, we listened to radio or watched TV and did our homework at the same time. Could it be that different. The answer is no. But it took a Nielsen study for others to intuitively figure it out.

"The findings, part of a new study released by the ratings measurement company, revealed that broadcasters worried about losing viewers to the Internet may not have to fret after all - and explains a paradox between rising TV viewership and the growing popularity of new media....Overall, Internet usage has grown by about 9 percent compared to last year, the survey found, but TV viewing still dwarfs Internet usage. On average, people spend about 127 hours watching TV each month and 26 hours online."

It is not a zero sum game and internet surfing is not meant to replace TV viewing. And sometimes we even put down our mouses to enjoy the sit back experience of TV exclusively.

Is the Internet Killing Cable TV?

Programmers have been enjoying a duel revenue stream for quite a while; payment per cable customer and advertising revenue. Programmers then introduced VOD and viewers began enjoying video content with limited, if any, commercials to interrupt the flow of the show. And now, pressured to provide content on demand regardless of the device, added their shows on the web with Hulu, Joost, ABC.com, and many, many other platforms to stream and enjoy your favorite TV shows and movies. So why pay for cable when all this content is accessible elsewhere.

For some, continual price hikes from their cable operator has accelerated this desire to disconnect the cable box. The article calls these folks "cable-cutters". TV manufacturers, like Sony, are building TV sets that directly access the web. And don't forget Apple TV either. Tivo has partnered with numerous content providers to bring on demand through the web easily to the TV set. And when broadcasters go digital, video quality over the air will be as good as cable. Consumers are pushing back. "Thousands of hours of TV shows and movies are available for free on the Internet, or via paid download and rental sites — services made possible now that broadband service from cable and telephone companies is widely available. Local stations preparing for the digital-TV transition next year are already broadcasting free high-definition TV, sometimes at a higher level of signal quality than a cable system delivers."

A bad economy certainly does not help this trend. Cable operators have already taken notice. Those that disconnect from taking multiple products from their provider will see their discounts expire and their rates soar for an internet connection. Some will start putting a streaming meter on internet usage. Telcos are providing an alternative to cable in the streaming space. It may spell new opportunities for other wireless distributors to enter the market.

Today, the number of "cable-cutters" may be negligible; still, it is a slippery slope that cable operators should be aware of. First comes dropping premium channels, than dropping to basic service only. Price your service too high and watch the customers leave for greener pastures.

TV Watching and Internet Use Complement Each Other

"According to a new Nielsen report, the more Internet you use, the more TV you watch; 31 percent of in-home Internet activity takes place while the user watches TV. (emailed release)" I look forward to learning more about this report. I never expected to hear that this was a zero sum game; rather, it paves the way for more interactivity on the TV set. Today, I am able to size a TV screen on one portion of my monitor as I surf through the web or work on an excel spreadsheet, the sound of CNBC announcers on my speakers. When I need to answer the phone or watch a video, I simply mute the TV sound. I was raised to multitask and expect that the younger generation is even more adept at it. In fact, I am only surprised that the research doesn't indicate an even higher percentage of simultaneous usage.

Obama Ad Seen By 33.5 Million Viewers

I am not using this blog to endorse a candidate. What I find remarkable is that the Obama infomercial, airing on numerous broadcast and cable networks, delivered ratings that surpassed the normal fare on each network individually. It beat the ratings for Old Christine on CBS, it beat the ratings for Knight Rider on NBC, it beat the ratings on ABC who actually ran their show, Pushing Daisies opposite the Obama program. And on cable, it beat ratings for Keith Olbermann on MSNBC. Wow!

There is an incredible thirst to see and hear these candidates before Tuesday's election. That the interest level drove people to watch TV, regardless of the channel, tells me that interesting programming draws viewership. Does it also say that the current programming on TV today is so unappetizing that people have turned away from TV. Perhaps. I may be a big fan of SNL but how many times can NBC keep running the show on prime time. It may be topical but it may also be overkill. Or perhaps NBC has nothing else to present. "During a season where television hits are hard to find, one NBC executive suggested jokingly Wednesday that Mr. Obama might be invited back to fill the 8 p.m. Wednesday time slot on a regular basis." The writers strike may have done more damage to broadcast TV schedules than we could possibly imagine.

Back to the Obama infomercial, its rating success only lacked local commercial insertion to make it even more profitable. While the programming was duplicative, it is interesting to see where people chose to view the show. It was exactly the same show regardless of where it was watched. It speaks to brand preference and would be fascinating to learn why viewers picked the channel they did to view this show. For me, I picked Fox; Game 5 of the World Series would follow and I didn't want to miss a pitch of this Fall Classic.