Sirius XM's 2Q Subscriber Base at Record High

Sirius is showing signs of recovery. As car sales grow, so too do Sirius customers. They had one of their best quarters in a long while. "The satellite radio company ended the second quarter with a record 19,527,448 subscribers, marking an increase of more than 1.1 million subscribers since June 30, 2009." That is more than a half a million customer adds in the last quarter. Sirius is revising third quarter growth estimates higher as a result.

While I am not a Sirius customer, I am a Sirius stockholder. I remain cautious given the growth in wireless and the ease of bringing mobile devices like blackberries, ipods, ipads, and others into the car. Since these devices receive internet radio, why buy a Sirius subscription. As sports, music, and news are just as easily received through these devices, will the customer prefer to buy content for a mobile device that can go into the car. That remains the bigger challenge for Sirius to overcome.

Tivo Adds Another Cable Partnership

While Tivo patiently waits for Comcast and Cox to make Tivo its primary DVR partner, it has found another friend with Suddenlink. "Suddenlink, the eighth-largest MSO in the U.S. with 1.2 million basic video subs, will offer TiVo Premiere DVRs as well as non-DVR set-tops from TiVo." Great news for Suddenlink customers to get more functionality and easier controls from their settop box and for Tivo to get further into the cable model. Add Suddenlink to the DVR list that includes Direct TV, RCN, as well as other international operators.

At the same time, Tivo continues to fight the patent issues with Dish along with recent suits against Verizon and AT&T. I'm excited to see Tivo grow and only wish that my own cable provider would bring the Tivo technology into their settop box.

Wall Street Journal King of Digital Media

Talk about adapting to the digital age. While some newspapers and magazines look backwards at how wonderful the past was and "if only" we could relive the good old days, others are embracing new media. The Wall Street Journal leads that category. Unlike others, they resisted giving too much away for free and were quick to institute a subscription model for the web. It is that forethought that has led them to success in the e-book platform. "The Wall Street Journal has by far the highest e-reader circulation of any newspaper in the U.S., according to Audit Bureau of Circulations data cited in a recent report by the World Association of Newspapers. The Journal had sold 414,025 e-subscriptions as of April 2010, up 8% from 383,199 in April 2009." The New York Times is at #3, but their digital e-book circulation is one-fifth that of WSJ.

In addition, WSJ is leading in iPad apps as well. "As we've recently reported, The Journal is killing it in the iPad department, with more than 10,000 subscriptions sold, and $2.4 million in revenue generated from them, as of June. The Journal's iPad app costs $17.99/month. The Times' is free." Seems like a heckuva subscription revenue model that will only grow as the iPad becomes more universally embraced.

Something for magazines to pay attention to as well. The WSJ model is working and it is time to duplicate their success.

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.