Apple IPhone Response - Will It Be Too Little Too Late

Later today, Steve Jobs will hold a press conference in response to the iPhone antenna proble. As his initial response rubbed many the wrong way, his "second" chance should prove most interesting. Already speculation is that their will not be a recall, but what should he do? I suggest he go over the top to put customer ahead of dollars. He should offer to every iPhone customer a free casing to protect the device from disruption. And not just any casing, but one perceived as quality and value. Offer multiple colors, put the Apple logo on it, and hey, offer to print on it a free monogram or the user's name. In addition, offer an immediate and free software upgrade to correct the signal feature and improve reception. And lastly, offer a huge apology for not initially respecting his customers with a promise to never under estimate their loyalty. As a marketer, this response will have long term effects on the Apple brand.

So what will Steve say at his press conference? We must wait and see.

IPhone Blunder And Google Android Wins Fans

Many, like me, have been waiting for Verizon to get the iPhone. But now, with other smartphones gaining ground, I wonder if it makes more sense to separate the phone from the Apps. I want my phone to work as a phone. I want the battery on the phone to last as long as possible so as to never miss a call. I want my iPod device to play music, watch videos, surf the web, etc. So why not keep two devices; why marry the two? Especially when other smartphones may work just as well.

Verizon has been growing despite the lack of the Apple iPhone. "Despite the pull of the iPhone, Verizon has managed to steadily increase its share of the smartphone market, to 26 percent in May, from 20 percent in late 2008. In the same period, AT&T’s market share slipped to 40 percent, from around 45 percent, according to comScore. Those numbers do not take into account the impact of the popular iPhone 4, released last month....Verizon has since collaborated closely with Google to develop six phones running Android, helping to give Google’s mobile operating system 13 percent of the smartphone market in the United States." And the NY Times likes the Google Android.

Add to that the bad press Apple has gotten for its antenna problem AND its response to the problem, and competitive marketing is taking the phone wars to another level. I can live with two devices. I can keep my music and my videos separate from my phone. I can surf on either device and with two devices, I have a back up when one phone's battery drains. Maybe I don't need to wait for an iPhone on Verizon's plan after all.

Be Careful What You E-Mail

Starz's president, Chris Albrecht, has really demonstrated how careful you need to be with email. I am sure many people have mistakenly sent emails to people not intended to receive them. With programs that help to fill in the remainder of an address as you start typing, it is too easy to let a name slide by and not re-check that the list is accurate. Hence, never write anything in an email that couldn't be read by anyone.

Unfortunately, Chris did not heed that advice. He sent an email about the pending firing of two executives to the entre company email distribution list. And who should read it, the two people who he was targeting. "Realizing his goof, Albrecht immediately called Bill Myers, president of Starz Entertainment, to inform him of the error. During their conversation, McGurk called Albrecht and told him that he had seen the e-mail. Later that day, McGurk and Rosett tendered their resignations." They fell on their swords, an honorable way for the two execs to leave. For Chris Albrecht and others, a painful lesson to learn.

Cursing Allowed

George Carlin is turning over in his grave; his 7 words you can't say on TV can now be said on TV! "A federal appeals court struck down a Federal Communications Commission policy on indecency Tuesday, saying that regulations barring the use of “fleeting expletives” on radio and television violated the First Amendment because they were vague and could inhibit free speech." While this ruling will most likely reach a higher court, it temporarily allows poor language to be used.

And you know what I say - hooray! It is time for a bit of self-regulation. Have we lost our way in the polite way to speak. Sure there are those that only know curse and need to populate each other word in their sentences with one; but for others, the English language holds unlimited word choices to convey our emotions, attitudes, and desires. And let the consumer and economy determine whether they will listen to poor language or not. These curse words will never go away. But we can make a conscious choice in our behavior, especially on TV and radio, not to lean on them too heavily. Do we really need government regulation to be the judge? If you don't like what you are seeing or hearing, turn the dial or the channel. That is ultimately how you can shape content.

Can Apple Face A PR Nightmare

First, Apple admits to antenna issues with the iPhone 4; then Steve Jobs comes out with a silly fix - hold the phone differently. Now Consumer Reports comes out with its findings on the phone and gives it a thumbs down. "Consumer Reports has confirmed in its own tests that there is a problem with the iPhone 4’s reception and thus does not recommend the device." How will Apple handle this situation? Do they proceed as if everything is fine or do they offer to provide a free case to every customer. And what do they do with their next version to correct their problem.

And will this negative review hurt the Apple brand and ultimately the share price? As we have learned in the past, a quick response with corrective action is the best move. Sweeping the problem under the rug never works. Let's hope Apple speaks up soon!

Content vs Distribution Fighting Again - Should They Really Merge

On Wednesday, AT&T U-Verse license deals with Rainbow Media will expire. Rainbow, who owns cable networks AMC, WE tv, IFC, Sundance, and others, may be dropped from the channel line-up if renewal agreements are not approved. But that is not the only story in town. ABC/Disney is also negotiating carriage renewal agreements for both its broadcast channel and its cable networks with Time Warner Cable. And rather than sit back and watch, Verizon is taking a proactive competitive stance to woo customers, assuming channels will be dropped. "In a move that underscored the shifting nature of these Big TV brawls, Verizon ads warned consumers that Time Warner’s contract with Disney — supplier of ESPN, ABC and Disney Channel — expires on Sept. 2. Referring to ABC’s dispute with Cablevision in March, when millions of viewers were deprived of part of the Oscars, the ads asked people to pre-emptively switch to Verizon’s FiOS service." How Bold!

Now these two negotiations are being aired in public light just as Comcast and NBC are negotiating their merger with the FCC and DOJ. Are content and distribution meant to live under the same roof? Does enabling such cohabitation hurt other relationships? How can NBC negotiate a fair deal with Time Warner, Verizon, AT&T, and others, when it is owned by a fellow cable company. What is the fair market price? Who gets hurt more, the shareholder or the customer?

These public negotiations allow consumers to see that any license fee increase will raise the subscription price of the cable service. Cable companies will not swallow the increase and reduce its profit margin. So when the negotiations are internal, who knows what the fair market price becomes. How can the other distributors be sure they are negotiating a fair market rate? Are we heading down the path where Verizon will need to buy a broadcast network in order to compete on level ground with Comcast? Does Time Warner buy a third network? And does AT&T buy the fourth. Four mega-content and distribution companies controlling media, what is released and where. Is this the direction the FCC and DOJ want to go? It is the slippery slope that comes into greater focus when content and distribution companies negotiate their license deals by the light of the day.

Will Cable Subscription Prices Drop?

As the media moguls socialize this week in Sun Valley, one inkling of cable news has emerged. "Cable operators and entertainment companies are talking about selling cheaper cable TV packages with fewer channels to attract and keep customers trying to save money in a weak economy." What, lower prices for cable. Ahhh, lower prices for less channels. But do cable agreements allow them to move networks off the lowest tier and create a new basic level of service. For some networks, programming license fees could rise should actual subscription as a percentage of total basic homes drop below a certain level. That could lead to higher programmer fees per unit. Would cable really want to be charged higher license fees?

So while this rumor sounds interesting, I doubt it can truly happen. If cable companies lower their cable pricing, then it will be used to protect their subscriber base from cord cutting and other competition. Lower profit margin from cable, higher from broadband and phone. Isn't that what the triple play bundle is all about.

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.