DVD Tops for Entertainment; Online Delivery Small But Growing

Consumers are still buying DVD's, but streaming usage is growing. And " even digital downloaders have not abandoned those shiny little discs. Eight out of 10 who downloaded movies also said they bought or rented a DVD," which indicates that physical media is not going away. For me though, the huge library of content online and easily accessible, makes me less inclined to have to own content. That rent or own philosophy seems to dictate my decision.

With the ease of VOD to watch on TV, and the lower cost to view, why purchase a DVD that has no long term interest to me. Those rare exceptions seem to be children's movies, including many Disney and Pixar titles, that get repeat viewing in my household. Other films, like the Oscar-winning Slumdog Millionaire, was great to watch on VOD; but having watched once, I find no need watch again. Still renting or streaming a film first lets me decide whether I want to make a bigger commitment to purchase.

How will I feel once I own an HDTV and will I feel the need to buy a blu-ray player and own blu-ray DVDs; I just don't know. Will HD keep the DVD the predominate choice? It may slow down the trend to streaming, but it won't stop it.

While Netflix enjoys a healthy relationship of DVD media with its customers, the customer still treats those disks as rentals not purchases. Blockbuster and other video stores are expanding their offerings to gaming disks and other non-film product to increase their revenue streams. Will customers want to own the physical asset? That media must change and get smaller and easier to manipulate. Whether saved on thumb drives or other smaller transportable device, the current DVD must give way to these new media choices, just as the LP gave way to the cassette, the VHS to the DVD. We want more content packaged into smaller boxes. Customers will still buy; how they receive the content is what keeps changing.

Cablevision: MSG Is Not For Sale

Clarification from the Cablevision camp that should a spin off of MSG occur, it would not be for the purpose of selling the properties, merely to put more shareholder value back into the hands of Cablevision stock owners. And the Dolans would continue to retain majority ownership. "The MSG unit includes the Madison Square Garden arena; the MSG and MSG Plus regional sports channels; sports teams the New York Knicks, New York Rangers and New York Liberty; Radio City Music Hall; the Chicago Theater; the Beacon Theater and cable music channel Fuse."

While I did not personally read anything that stated possible selling of MSG, I did read about speculation of possible selling of the Long Island cable system and Rainbow programming unit with Time Warner and Comcast the most likely buyers. Keeping speculation low only drives up the intrigue value. Who knows what will or won't happen. The likely scenario continues to be no change.

Cablevision to Explore Madison Square Garden Spinoff

Will Cablevision spin off their Madison Square Garden businesses, including MSG, Knicks, and fuse? If you have heard about spin offs in the past, you aren't dreaming. This kind of speculation has been around for many many years. The closest they came was a tracking stock for Rainbow about a decade ago, but that was eventually re-ingested back into Cablevision.

For the public record, I once worked for Cablevision but have absolutely no inside information what they are planning to do. Still, if history is any guide, this speculation seems to be a regular occurrence and always seems to have the effect of raising the stock price. While Cablevision has recently been a buyer, having bought both Sundance and Newsday in the last year, the last time they sold something was when they sold Bravo in late 2002 to NBC.

A separation of companies has always been seen as a positive way to unlock the value of the assets. Others have speculated that it's Chairman is more interested in sports and music, than the cable business. Splitting the businesses would make it easier to get a truer market price on the cable side too with the opportunity to sell those assets to another cable company. Time Warner has always been desirous of owning the jewel of the NYC DMA, Long Island, which Cablevision runs. Cablevision continues to avoid further comment.

Will this be the time that Cablevision actually pulls the trigger on an asset spinoff? If history is a guide, don't hold your breath. It may simply be a means of pushing the stock price higher on news but not action. Still, anything is possible.

Amazon Introduces Big-Screen Kindle

It's bigger, but is it better. It's more expensive, but is it better. It's still just a black and white screen, but is it better. The answer is hard to say. And will it save or destroy the print business, that is the $100,000 question.

One thing is clear, it does not seem to be advantageous to the newspaper industry, especially as Amazon seems to take the majority of the revenue for being the distributor of the content. "Amazon does not release financial details about its relationships with newspapers, but newspaper executives say Amazon keeps 70 percent of the revenue — an arrangement the papers have been unhappy with." In fact, the newspapers are not going out of their way to strike deals to encourage Kindle's use over their current distribution and only have deals "for people who live in areas where their paper editions are not available."

Odd that the content creators are at the mercy of the distributor? Not really, but not necessarily the only solution. Just as the broadcast networks have created a digital joint partnership called Hulu to distribute online content, the newspaper companies should consider a similar solution for their digital distribution. Build a joint venture tied to your own device or work with Intel or Apple and create your own broadband service to download content. Retain a much larger percentage of the profits and reduce your printing and distribution overhead at the same time.

With The Rough TV Economy, What On-Air Talent Will Be Cut Next?

Local broadcasters are cutting costs in the wrong places, cutting talent, their faces for their news content. Here in New York, Len Berman, a fixture in sports, was hit; in Boston, Bob Lobel, another sports announcer also let go. Across the country, anchors and reporters, like Rob Morrisson on WNBC, have been laid off left and right. Frankly, their replacements, most likely cheaper, are less appealing too. To the point that a change in talent could lead me and perhaps others to a change in where we get our local news. "But TV executives say they have no choice. Gone are the days of 50% profit margins, replaced by 20% declines in the advertising revenues that support those shows."

What is even more surprising about this cost cutting is that it actually does a disservice to the local network, especially as the need to compete with other outlets. WNBC has created a local digital hyper channel called New York Nonstop to compete with Time Warner's News 1, Cablevision's News 12, as well as the national news networks. Wouldn't a show by Len Berman on their digital network add greater credibility and value to this new brand while supporting WNBC at the same time. These local broadcasters are the faces of their content and have a built in audience. Replacing them with generic news readers does little to support the local network and even less to help build up a brand new digital network. Unfortunately "some executives have long viewed talent as interchangeable parts." This short term cost cutting will have larger negative long term effects. Viewers will simply shift viewing habits faster as they become less partial to your new roster of mediocre talent.

Yes, cost is a factor and advertising revenues are down. Perhaps we have gotten too use to obscene profits and need to adjust our mindset to a new world. Yes businesses need to remain profitable but get back to more reasonable expectations. Cutting off your nose to spite your face will definitely cause more harm than good.

Microsoft Must Buy Twitter - Maybe Not!

The article suggests a number of reasons why Microsoft should buy Twitter with the most pressing being that it has changed how people share information. In a different article, another author suggests why Apple won't buy Twitter. I don't think anyone should buy Twitter.

While I currently have a Twitter account and sometimes Twitter, I post identical info on Facebook, Others have applications that let them simultaneously post across all social networks. And that is my issue, duplication. For me, Facebook is the more preferable place to post and share links, photos, information, etc. The real question should be, who will buy Facebook. I believe Facebook has more revenue opportunities ahead of it than Twitter ever will. Thoughts.

Canoe Shouldn't Recreate The Web; It Should Utilize It

Interesting argument in this article by Diffusion Group analyst Colin Dixon who thinks that the Cable Operators, through Canoe Ventures, are going at it the wrong way. He suggests that they are not building a better mouse trap than the web and should instead work with the web's successful structure. "Canoe’s products — voting, e-commerce, interactive ads — would be simpler and better if delivered via a web browser, he writes."

Intuitively, it makes more sense to build an application for TV that integrates with other apps on the web. Consumers have gotten increasingly more comfortable with web-based apps and are incorporating them in the above list (voting, e-commerce, et al) as well as social networking like Twitter and Facebook on their pc and mobile devices.

If the cable set top device doesn't interact well with these applications and instead tries to run in its own vacuum, it may be that the viewer will shun the set top all together for web based entertainment. Or rely on other boxes like Roku or PS3 to bring video to the TV. That is all ready slowly happening as younger audiences are not buying cable subscription and using the web for their video entertainment.

Looking to Big-Screen E-Readers to Help Save the Daily Press

Technology may be partly to blame for newspaper subscriptions declining, but it can also be its salvation. As Kindle and others make electronic reading possible, downloads replace paper boys and kiosks.

Half the battle is controlling the flow of content. Content has value and as the Wall Street Journal has already proved, it deserves a subscription fee. The breadth and quality of the content can no longer be free for all. Advertising alone does not pay for all its cost. And the first step is for newspapers and magazines to rein in their content and control what they release. "The move by newspapers and magazines to make their material freely available on the Web is now viewed by many as a critical blunder that encouraged readers to stop paying for the print versions." The WSJ teases non-subscribers with bits of the article and reminds them that "membership has its privileges."

The other half of the battle is the electronic device. Today's Kindle and Sony E-Reader, with their small screen and black and white e-ink, are not good enough to provide readers with the full aesthetic. An Apple iPhone with its smaller screen is no better. It will be the next generation device that offers the right size, weight, and functionality, that will win out. Many view Apple as most likely to deliver first. "Such a device, with a screen that is said to be about three or four times as large as the iPhone’s, would have an LCD screen capable of showing rich color and video, and people could use it to browse the Web."

Will this save the print business in time? It feels a little bit like the chicken and egg; cutting off access to content and releasing more readers. The timing of each matters greatly in the hunt for eyeballs. I am eager for that new type of reader at a reasonable price point to pave the way. Look at what the iPod did for music and it seems the same is possible for print.

What Disney-Hulu Means for Apple

Should Apple be more worried now that Disney is joining forces with Hulu. I don't think so. Each follows a very different business model. For Hulu, it is all about advertising; For Apple, it is all about transaction of commercially free content. Advertisers tend to be concerned about ratings of content and less likely to associate itself with content of questionable taste - whether that means language, nudity, or just subject matter. In the transaction based model, the consumer decides what is appropriate by what he or she decides to spend their money on. And while some age-based issues may exist, content appeal impacts the transactional return. Too very different models, two very different choices.

Of course the other player is You Tube, the leader of user generated content. For me, they too serve a different model than Hulu. You Tube is a great place to find clips; Hulu is for full length shows. They could in fact be seen as complementary. It could be possible that You Tube and Hulu could enter into an agreement where interest in a clip on You Tube could lead to a link to Hulu to watch the entire show. They same scenario would hold true for TV.com as well.

The most interesting assessment is this, "Never mind that Apple CEO Steve Jobs is Disney's largest shareholder. Hulu's pact with Disney serves as a reminder that if Jobs & Co. wants to make the splash in online video they appear poised to make, Apple needs to act fast."