Wired vs Wireless

A ton of investment has gone into building a wired broadband world by both cable and telco. But the rise of iPads, iPhones, Kindles, laptops, and other wireless devices has led to the explosive demand for wireless spectrum. The government may be listening. "The Obama administration is seeking to nearly double the wireless communications spectrum available for commercial use over the next 10 years, an effort that could greatly enhance the ability of consumers to send and receive video and data with smartphones and other hand-held devices."

Can cable benefit from this change in the entertainment landscape or will they find them going from the top of the perch to the bottom of the abyss. Knowing that the consumer wants their content wherever, whenever, means they must adapt to a changing need. Should cable buy a wireless player and finally offer a fourth package of services to co-exist with its other three - cable, phone, and broadband? Will both wire and wireless co-exist nicely so that the current plan remains the strategic direction? Or should cable be worried? "Cable companies that have invested heavily in wired telecommunications networks could also lose from the new direction."

Add this new wrinkle to the FCC desire to regulate broadband and trouble may indeed be brewing. As content finds its way from scrambled on the cable line to accessible via the internet, the consumer wants it when they want it. A great example remains the World Cup where viewers watched on both wire and wireless devices. As wireless becomes faster and more abundant, consumers will seek this higher ground. Wire may need to be worried.

Soccer Proves Games Don't Need To Be On At Primetime

If the World Cup proves one thing, it is that we will watch live sporting events no matter the time. Despite games stating in the morning and afternoon on the east coast, viewers are watching in droves. "Wednesday’s United States-Algeria soccer match was watched by an average of 6.2 million people and 4 percent of American households on ESPN, both records for soccer in the history of ESPN networks." And of course that doesn't measure all the other ancillary devices and places that the game is seen. Yes work productivity may suffer a little, but viewership is not. And given its daytime viewership, we can actually watch the entire game, from beginning to final minutes. In fact, soccer has never been more popular in the US. The result of games at reasonable times may simply yield more long term fans, both young and old. Perhaps this news is something that other major league sports should consider.

With baseball, football, and other US sports, late starts mean late endings. The day when kids could come home from school in time to catch the baseball game has become a distant memory; too few and too far between. We can only hope that the networks look hard and long at the World Cup success. Maybe then, some World Series Games could actually start in the afternoon and we can watch the entire game. And as content is untethered, we can watch games regardless of here we are - at home, at work, outside. And with better scheduling, the leagues and networks may actually grow their fan base, just as soccer is growing. But if they don't, be forewarned, soccer interest could one day overtake baseball in fans and viewership.

Time Magazine Poised For The New Consumer

While Newsweek and Business Week had to sell, Time Magazine says it is thriving. It recognized the changing consumer and adapted accordingly. Among its changes, it moved its publication date from Monday to Friday to capture and adding more content to its website to bring on more viewers. And it found a strong enough core business to sustain its subscription sales. "'In terms of our category, we're not only the last guy standing — we're the only guy standing,' says Rick Stengel, Time magazine's managing editor, its most senior editorial position. 'We convert information into knowledge. Knowledge is what people want. Information is the commodity.'" In addition, they built an iPad App and other digital readers. They recognize the value that digital can offer. "Stengel says, he'll be happy even if most readers know little about Time's print edition — as long as they're paying for the magazine's electronic touch tablet editions." That is clearly someone that recognizes that change is inevitable and one must adapt to it or lose because of it. Time Magazine is clearly adapting to a changing landscape.

For Mags To Survive, More Reliance On Subscription Revenue

The cable programmer model works really well. It gets money from license fee that is passed from cable operator to consumer and it gets money from :30 advertising. It worked so well that broadcast networks are asking for license fees too. And now the print business is putting more reliance on subscription revenue. With the rise of online access, e-readers and iPads that can provide a digital version, subscription revenue may be print's lifesaver. "Publishers have been criticized for becoming overly dependent on ad dollars while letting consumers off the payment hook by selling cheap (and unprofitable) subscriptions—a disparity that became all too apparent when the ad recession hit."

A consistent license fee from consumers offers an important cushion to the health of the business. And new digital versions of a print magazine with more robust content and interactive access can be more valued by the consumer. Exclusive content access, available inside a walled garden and accessed through subscription could save the magazine business. And it may lead to the resurgence of shuttered magazines like Gourmet. "On June 22, it announced plans for a fourth-quarter launch of Gourmet Live, a food-centered social media app that will be free to download but ultimately be driven by consumer payments. Condé Nast expects to test pay approaches including subscriptions and virtual currencies popular in the gaming arena." It sounds real promising.

NBC Affiliates May Be OK With Comcast Merger

Comcast is rounding up supporters of its merger plan and agreeing to conditions to get them to voice their approval to the FCC and DOJ. The latest are the NBC affiliates, whose business could be seriously affected by a merger of content and distribution. And what seems to be the biggest condition, that live sporting events like the Olympics, Super Bowl and others are kept on free TV and not moved to cable. "The affiliates argued in a joint submission to the Federal Communications Commission that Comcast could woo new customers by putting popular sports events on channels that require monthly fees. Comcast already serves 23.8 million customers as the nation's largest cable TV provider."

Really? Sporting events. That will keep your business alive post merger. Seriously, more sports are seen on cable then broadcast today. That is not going to save your business. How about the freedom of offering your program across multiple distribution platforms NOT owned by Comcast. Telco, wireless, IP, etc. How about a financial commitment to original programming production. NBC has shown that when you reduce your programming budget, your ratings suffer. The NBC affiliates need guarantees that they will get more original programming than the cable nets. Prove to them that the broadcast platform remains their most important business. Live sports remaining on broadcast is fine; but it is not the only condition that needs to be met to support this merger.

Other programmers, like Bloomberg and Wealth TV, are lining up on the other side of the merger fight. They argue that it would create an unlevel playing field for content creators and other distributor platforms, "saying the combined entity could discriminate against competing cable channels and have too much power in negotiations with organized labor."

In the meantime, much will be said to prove that the deal will be fair to all. Only post merger will the truth eventually unfold.

Cable Competition Fiercer

I personally never thought that the two year contract was a big stumbling block for consumers choosing FIOS over cable. It certainly was something touted in cable ads to scare prospective customers from switching from cable to telco. And for public record, I am still a cable customer, but every time I see my bill, I consider switching. I actually like d the two year contract cause it guaranteed the consumer that their price wouldn't rise unexpectedly.

But in a move to create a more level competitive playing field, Verizon is offering its FIOS service without any contract. "Verizon introduced the month-to-month option last month in Tampa, Fla., as well as in Pennsylvania, which 'met with very favorable customer response,' the telco said in announcing the expansion of the program Monday." Will this marketing move result in more connects, we will have to see. For those consumers who did see a contract as a stumbling block, this option should provide some of the flexibility they desire. Considering the time it takes for both companies to install their service, and the time the consumer must stay in their home waiting for the service call, quick switching should hopefully not be an option.

Will FIOS subscriptions rise through this new pricing offer, I'm sure in the short term there will be lift. For me, the key to success remains a combination of low pricing, great service, easy use, and terrific programming content. The latter three require strong differentiation marketing to let the consumer know all they offer that their competition doesn't. In a free market, competition is good and leads to the victor providing best for the consumer.

Does Broadband Access Need Regulation?

The FCC is finding new avenues to control the world wide web highway known by many as broadband. As content files get larger and traffic jams occur, will policing help the traffic flow. When I see real police manage traffic flow, I sometimes wonder if they are easing flow or simply exacerbating delays. The same may hold true on the broadband highway. The increase in government involvement tends to have the opposite effect on innovation. Allowing economic forces to work in a free market enables companies to technically improve and build better and better mousetraps in order to compete most effectively. With regulation, the impetus to improve is sometimes squashed.

"'Today's wireless and broadband markets require significant capital investment to anticipate and meet growing consumer demand,' said Mobile Future in a statement. 'Unfortunately, today's FCC action puts future growth and investment at risk and creates unnecessary turmoil in one of the key drivers of the U.S. economy.' Mobile Future members include AT&T and T-Mobile."

This action will surely be fought over years and will not find a quick resolution. Hopefully before regulation is in place, innovation can make the need for regulation unneccessary.

Apple iPhone 4 A Hit

Apple seems to know exactly what the consumer wants from its technology. Their successes continue to pile up, the latest being the pre-sale of its latest iPhone version. "Apple said pre-orders for its iPhone 4 rang up a new single-day advance-sales record -- despite massive ordering glitches that left many potential buyers hanging." That accounts for more than 600,000 orders in one day! How many are new customers and how many are upgrades remain to be learned, but it is a significant jump in just one day. It seems Apple can't build then fast enough to satisfy the demand.

And for Apple it is not a one time sale. Each of these consumers have access to the iTune site and will most likely order app after app to make their iPhone and other devices more appealing. It is that ongoing revenue stream that is Apple's greatest strength and will ultimately raise the value of their stock. As the line from the movie Field of Dreams correctly indicates, "If you build it, they will come."

Tivo Keeps Trying to Stay Noticed

Tivo is trying awfully hard to make their service indispensable to the consumer. Beyond an easy to use interface, internet connectivity, HD abilities, and now more social networking, comes a new application. "Television recording business TiVo Inc. set up a way for its users to show information like news, weather, photos or updates from social networks like Twitter or Facebook on TV." Called FrameChannel, the service lets viewers "put sports scores or traffic reports based on their Zip codes on the screen using various apps. Pictures from sites like Flickr or from social network pages like Facebook can also be run as slideshows." Nice features.

Unfortunately, the elephant in the room continues to be the connection to the cable company's system. The difficulty in obtaining CableCards and the installation process will cause most cable customers to simply retain their existing HD/DVR box and use other devices like their Playstation 3 to connect to the web. First things first for Tivo, strike real deals with the big cable companies so that Tivo is an automatic option for consumers. Figure out how to simplify the process of enabling an external box to connect to the cable platform. All these bells and whistles are nice, but Tivo has a bigger challenge to fix.