Time Warner Cable and Viacom reach deal

Despite the New Year's Ball dropping, Time Warner and Viacom were able to negotiate a deal and avoid customer complaints in 2009. Who won will never be completely known, but you can guess that rates were raised and eventually trickle down means that the consumer will pay more. It certainly got nasty as ads showing Dora the Explorer crying were in major newspapers and crawls on the channels in question were nationally broadcast. And in today's paper, an ad still appears telling consumers to go to Direct TV, Dish, or Verizon to get these channels. I guess Viacom was not expecting a quick agreement.

What Will You Do Without Viacom Channels?

This negotiation has most likely been going on for a while, but as contracts expire and deadlines are reached, it has left the board room and reached the ears of the public. Time Warner and Viacom, owners of Nickelodeon, Comedy Central, and others, have reached an impasse where there are no winners. Each has solid points and each has big issues to overcome in a changing entertainment landscape.

For Time Warner, it means controlling costs, when customers are able to downgrade or leave for other programming providers like the telcos and satellite. As programming cannot be made exclusive to a particular provider, it provides little competitive benefit in the marketplace. At the same time, customers have shown more preference for hi speed web access and are able to get some of this disputed programming streamed to their PCs, whether they receive the linear channel or not. For Viacom, it is the need to grow revenue to offset the higher costs or original programming. A show tends to be cheaper in its first few years until it gets an audience; the power than switches to the show who is able to command higher costs for its talent and staff. And as linear advertising has flattened and in some cases declined, revenue needs to be made up in other ways. It won't all come from the internet so cable subscription remains an important opportunity. Why is Viacom publicly fighting this battle; take a look at their recent stock price and it is clear they need leverage on their side to get an agreement signed.

So what is the Time Warner consumer to do. In the long run, the choice is to switch to another provider if neither party comes to an agreement. These disagreements eventually always get resolved and programming is restored. In the short run, there are some options: for kid programs, start DVRing your favorite shows. For my kids, we have numerous Nick shows recorded for viewing. As most aren't expecting new episodes for a while, we are comfortable with repeat viewing of our shows. Or go to their websites for games, episodes, and other things to do. For Daily Show and Colbert Report fans, the internet will be the way to go. Hulu is always a popular option. Don't be surprised if some illegal peer to peer sites come up offering downloads of shows. Or you could invest in a Slingbox and put it in a family or friend's home where they are on a different cable company. Or even buy the DVDs of favorite series. As you can see, there are alternatives.

So enjoy your last hours of these networks, I expect a long battle.

It's Time For An Apple Tablet: Where's My iPod Touch HD?

Everyone has an idea for Apple. But with no major announcements scheduled for Macworld next month, and Steve Jobs not planning to give the opening remarks, it is unlikely to expect big news. Still, this writer, like me, has hopes for Apple; especially if it is a small device that works with the iTunes and iPhone platform, and is capable of accessing the web and downloading content. I'm ready for an eReader device from Apple, but this article wants a device to do it all - "Listening to music, watching videos, surfing the Web, reading e-books and Instapaper articles, playing games, writing blog posts, etc. " I don't need the first two on his list, but the others suit me just fine. Make it about the size of a book, thinner and lighter, and price it competitively, and I am first in line. "Apple's multi-touch, lightweight edition of OS X, iTunes sync, and App Store are exclusive. And they're exactly how to make a tablet computer work. So when can we buy ours?" Where do I stand?

Broadcast Advertising Still Works

Despite the recession, people are still watching TV. And while cable and the internet has done much to fragment audience share, broadcast television still remains a dominate landing point for content. Ratings may have declined, but large numbers are still there and advertisers continue to spend to reach these viewers. "Mr. Magel of Initiative said, 'Broadcast television may be losing ratings, but there is no other medium that has been able to supplant it in a big enough way to negatively impact it at this point.'”

CBS has done the best job, with minimal loss of audience compared to the other networks. They have invested in scripted programming and are seeing audiences come to them. They will also benefit in the after market, as they can syndicate this programming on other networks and on the web. Not as easy to do when your entire prime time is devoted to reality shows.

In general, broadcast networks also have the advantage of their size to diversify, some doing better than others. Investments by the big four include cable ownership as well as web sites. Fox even believes in social networking, investing in My Space. As the broadcast networks recognize their diversified portfolios in the aggregate and begin to sell advertising solutions across these platforms, they will become even larger and financially better off. It will be this synergy that will take broadcast companies to the next level.

Cisco Systems Is Starting a Push Into Home Electronics

What percentage of homes are wireless? Beyond connecting a laptop to the web or printer, what percentage of wireless homes, are listening to music, watching videos, and sharing content around their home? A much smaller number I am sure. Most people are not computer literate enough to do more than plug and play. Unless it is that easy, it will need the geek squad and other experts to set up. Heck, even today, most people buy an HD TV and have trouble connecting it properly to their set top box to get the best experience. My brother in law in fact had his TV set on an expanded screen set up and was missing out on the whole picture!

So Cisco is entering the consumer electronics field. "Cisco is working on other gadgets that will let people watch Internet video on their televisions more easily. And its biggest bet is that people will want to use a version of its corporate videoconferencing system called Telepresence to chat with their friends over their high-definition televisions." While I like that they want to help move music wirelessly around the house, how it interfaces with current digital players may be an uphill challenge. And I can tell you that when the phone rings, it is not often when my kids want to interrupt their TV viewing so I can see who I am talking to. In fact, I like to multi task, watching TV and talking on the phone simultaneously. I am not sure I want to always be seen and heard. Still, there are a couple times when a consumer video conference tool could work, talking with the grandparents comes to mind. But computers already offer the ability to video chat so Cisco may simply be late to the game.

For Cisco to succeed, they must figure out a way to work effortlessly with existing products and demonstrate how they can interconnect devices effortlessly so the consumer can easily enjoy the convenience. Their greatest opportunity is through their Scientific Atlanta division, makers of set top boxes. Adapting these devices to be more more user friendly and useful would be the best first step.

Online Piracy Menaces Pro Sports

Even with football upsets and head coach firings, fans love their sports. But as ticket prices rise, games are limited to specific markets, but audiences mobility continues to widen, sports cannot comprehend how to reach their fans. An out of market fan has few choices to watch a favorite team, while others in market get the same game for free. "The game between the Baltimore Ravens and Dallas Cowboys was pivotal in determining playoff teams, and it was the last home game ever for the Cowboys before they move to a new stadium. But because of a long-lasting feud between the NFL Network and many cable companies, many millions of fans could not watch the game on television. Yet they could watch any number of illicit live streams on the Internet."

Streaming is no longer limited to music or movies, but to live sports events as well. "After years of focusing on the pirating of highlight clips and photos on the Web, the major professional sports leagues are finding that pirated feeds of live games are now common and becoming a menace to their businesses, especially at a time when leagues are trying to build their own businesses offering live games on the Internet for a subscription fee."

The choice is clear, keep fighting this hard to win battle to stop illegal feeds or embrace the opportunity. Those reaching out to find these feeds are not current viewers of your games; they are highly motivated fans seeking new options to fill their enjoyment. Slingbox was one means to watch TV from one market when you are residing in another. Pandora's box is already open. If professional sports would bypass subscription revenue for a measurable higher volume audience that can be monetized via advertising means: commercials, overlays, interactive offerings, etc., they could potentially bring a bigger return. Obviously the day will come when these internet signals can be moved to the HD screen in the family room, but until they are why not capitalize on the interest.

Predicting Digital Disaster

As the digital transition approaches, if February 17 is still the date, predictions are that at least 3 million people will not get a converter box to continue to receive TV broadcast signals. Instead they will choose to give up TV. With broadcast ratings dropping because both cable networks and internet usage are rising, advertising dollars will be further redistributed as well. Hurtful to broadcast, helpful to these other distribution outlets.

"Nationally, more than 9 million people who currently receive over-the-air TV will lose at least one of the major broadcasting networks, according to David Klein, executive vice president of Centris." A quote I simply don't understand. Once the digital switch occurs, every broadcast channel will be effected. While some low power stations have a bit more time to transition, all national broadcast local affiliates will be affected. There will be no broadcast analog signal to watch. Mobile TV sets, throw them away, no more tailgating with these babies. And digital signals are harder to acquire, more easily interrupted by mountains, trees, buildings, etc. Just try listening to Sirius Radio in my neighborhood where this interference is a key problem. It may be no better for digital TV reception, even with a converter.

If cable television is available, it may be an alternative, even if it is just to receive broadcast basic channels. If IBM's project with power companies to offer TV signals through power lines keep moving forward, another alternative is available. And of course Direct TV and Dish is still out there too. But as the article suggests, some may simply turn off their TVs. The internet may be enough for them to provide video of the shows they really want to watch. If we see DSL subscriptions rise, then we will have gotten our answer.

Look Out, Amazon: iPhone Gets Real E-Books

Lets face it, the iPhone and iPod are not the best devices for reading books, newspapers, or magazines. Heck, the screen is too small to be a real game device either, but it does offer those apps too. What it does indicate to Apple is that they are positioned to bring an "iReader" to the marketplace, using the iTunes store to download print material across devices. Allowing its owner the flexibility to move a purchased subscription or book to one device and move it effortlessly to other devices that we own, would be the ultimate in convenience and usability.

And with Kindle slow to market with its next generation device, the timing is impeccable for Apple to announce at Macworld that they are selling their own reader. With the iTune store already in place, and consumer appetite growing for digital reading, Apple should be reading the signals. The iPhone is not the device to use "for serious readers -- the screen is small, the battery life is iffy, etc. But we could see book snackers reading a chapter a day or so -- or a magazine, or travel guidebook, or reference materials -- on their phone or iPod touch." But it is an opportunity to create a competing reader and make the content accessible across its various devices.

Until then, "there's plenty of e-books for the iPhone already, ScrollMotion has two advantages over its rivals: A gorgeous, feature-filled e-reader app called Iceberg and deals with several major publishers, including Random House, Simon and Schuster, Houghton Mifflin, Penguin, and Hachette." Nice!

SAG Postpones Strike Authorization Vote

It may be only a 2 week delay, but it indicates that the SAG may realize a change of strategy might be needed. "In response to a growing chorus of members who say a strike would be ill-timed given the current economic crisis, the leaders of the Screen Actors Guild have decided to postpone a planned strike-authorization vote by two weeks." What they learn over this time is unclear, but perhaps it may allow them to recognize that if a strike vote doesn't pass, their legitimacy as a union may be point into question.

As the TV union AFTRA has approved their contract, SAG may feel that their demands may be unreasonable. With many actors voicing opinions against their own union, SAG management may be using this time to assure they have the votes to succeed. If it becomes clear that they don't, I suspect, the strike vote will be further delayed or called off so as to save face. The economy is not improving, broadcast networks are creating less new content, movie audiences are declining, and acting jobs are harder to find. A SAG strike will not help them as AFTRA jobs will supplant them.

Don't be surprised to see them come to agreement with AMPTP or at least call off this vote.