VOD Price Wars

Cable has more than Redbox and Netflix to worry about. Now they have Dish getting more aggressive with lower pricing for hit movies. "Through July 7, the No. 2 DBS provider is offering the following films on Dish Cinema for 99 cents: Alice in Wonderland, She's Out of My League, Green Zone and Hot Tub Time Machine. The movies are presented in the standard- and high-definition formats, with Green Zone and Hot Tub Time Machine available weeks before they are available on Netflix and Redbox, according to Dish officials."

Should cable worry? Is Dish setting precedent for lower pricing for first run VOD? Or is this just a temporary break and won't make a ripple in viewership or cable subscription.

Apple TV Coming Back

Plenty of buzz from unnamed sources but no official word on the next iteration of Apple TV. What is also speculated is that Apple must gear itself for a less memory-centric model and move to a cloud computing world where info is centralized and not kept in individual devices. "So it’s almost certain that an iOS / A4-based Apple TV is on the horizon, but it will only be ready once Apple completely revamps iTunes for the cloud." Is that in the clouds or the next reality?

For me, the Apple TV device should connect with the cable box to extend its range and value and bring the internet to the TV and TV to Apple devices in the home. A server of sorts that can talk to iPads, iPhones, iMacs, etc. Sharing shows, videos, movies, calendars, and more. And making the cable set top box easier to navigate, working behind the TV and not in plane view.

What does Steve Jobs have planned for Apple TV? It seems something is coming.

Fuse On Receiving End Of What Dolan Dishes Out

Distribution platforms like Cablevision, Dish and others don't like paying for content. Contract negotiations tend to be acrimonious and ultimately the consumer is affected. Recent events with Cablevision and Time Warner resulted in channels being dropped off of cable line-ups while negotiations continued past deadlines. Ads got nasty and ultimately settlement got reached. And consumers found themselves with higher cable bills as a result of this outcome.

So now, Cablevision, who recently spun off Fuse into its own company, yet still owned by the Dolan Family, are on the opposite side of the negotiation table with another distributor. "After playing hardball in talks with Scripps Networks over carriage fees, Dolan now finds himself in a fee fight with satellite-TV operator Dish Network over his Fuse music channel." Now it is Fuse's turn to ask for higher license fees and for Dish to turn of the channel while negotiations continue.

Dish and Dolan have had a bad relationship of late. A previous HD service, Voom, was dropped by Dish. Bad blood, lawsuits, and most likely hurt feelings still remain. Fuse may simply be the next nail in the coffin by Dish to go after Dolan. Is either party right in this negotiation? No. But the old adage of what goes around comes around seems to apply. Yes programming fees go up as do ad rates. Yes Operators want costs down to keep margins up. And ultimately the consumer pays these higher costs anyway!

Is Hulu Competing With Cable?

Is there no profit in a single revenue stream business? Hulu has done the math and now plans to offer a pay subscription model to bring in a second revenue stream. "For $9.99 a month, subscribers of Hulu Plus get access to a full season's worth of their favorite TV shows--and even past seasons in some cases--and 'not just a handful of trailing episodes' that the free-version of Hulu offers, according to CEO Jason Kilar, who wrote the note." So in essence, a cheaper alternative to cable programming than cable.

Will consumers pay $10 a month for programming that is available elsewhere? As cable puts more and more product on demand, as DVRs fill up, and as DVDs line the shelves with season after season of TV shows, will the consumer pick Hulu as their paid model of choice? With cable companies, like Comcast, putting more of its programming online too, aren't the owners of Hulu competing with themselves as they offer their product free on demand, on TV and online, to cable subscribers. Viewers love free. Viewers love added value. Viewers love the ability to watch what they want, when they want, and where they want. But will they pay $120 for the service?

Those consumers that currently have cable may be encouraged to switch to a cheaper provider in Hulu, but I doubt that the value proposition works in Hulu's favor. Those consumers that have already cut the cord on cable did so because they couldn't justify the value and liked what was available free on the web. It is hard to imagine that they will find a Hulu paid service differentiated enough to part with their cash. So how successful can a free model, converting to pay, be? I am skeptical that this is their winning formula. I doubt that Hulu can reach scale with a paid subscription service to justify this new endeavor.

Verizon Finally Getting The IPhone??

Per today's NY Post, the exclusive arrangement between AT&T and Apple will end on December 31. Beginning January 1, 2011, Verizon will also be offering the iPhone device to consumers. Despite this headline grabbing news, the is not official confirmation from either Verizon or AT&T. While speculated for quite a while, the discussions around the iPad may provide some clue. It was believed that exclusivity ended today but the iPad deal with AT&T extended the terms through the end of the year. If that info proves true, then 1/1/11 will be a lucky day for those wishing to have an iPhone on a Verizon plan or wishing to switch providers to improve call performance.

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.