Theatrical Movies Coming Even Quicker To Your Home

If a family of four wants to go to the movies, admission alone could be $40 or more. Add popcorn, candy, and drinks and that amount could double. We have become a society that can not wait; instant gratification is our mantra. And so the movie windows, the times when a film moves from one distribution platform to another, has shortened. We once had to wait a year to watch a movie go from theater to DVD. But the rise of on demand and the demise of DVD sales has shortened that time period. And now movies are coming to On Demand even sooner.

"Right now, theaters get an exclusive period — 120 days, on average — to serve up new movies. Then the releases appear on television video-on-demand services at a price of about $4.99. Armed with the new copy-blocking technology, studios want to offer new movies on video-on-demand services about 45 days after they arrive in theaters, for a premium price of $24.99." So that family of four can avoid the theater and not wait many months to watch the film. For a higher price, access can come quicker. For the family it translates to a savings of $15 and more when you add refreshments. For studios, it brings a greater share of the revenue split. And if the consumer still thinks the cost to watch is too high, they can wait for the next distribution window, when the On Demand price point drops back down to $5.

It will also mean shorter windows for movies staying in theaters. Why should theater owners show a film at the same time it is accessible at a lower price at home. Movies will rotate through theater screens quickly. Theater owners must improve their business strategy and do more to improve their business. 3D has proved successful. Better seats, better food, better overall experience is another. Cleanliness would also help. Customers want to leave their home for a night out. A night at the movies will now need t be more special to keep the customer coming back for more. Otherwise, theatrical dollars will fall and On Demand dollars will keep rising.

New Content Challenging Old Content

It must be thirty years when the cry of "I want my MTV" first began as the battle cry for consumers pushing cable TV over broadcast. The rise of cable programming has deeply affected broadcast operations and ratings. Finally, the only thing left for broadcast to do was to buy out these cable networks. Why is NBC and ABC healthy - their sister programming and cable channels.

Well nothing lasts forever and the evolution continues with the rise of non cable, online programming. Now we have an upstart going after a cable channel directly. "Vevo, the Web music-video service backed by major labels Universal, Sony and EMI, is moving onto MTV's television turf. As part of a plan to make its music-themed content as widely viewed as possible, Vevo is working to launch a regular TV network that would compete with MTV's music-video network, MTV Hits." And here is the key distribution move. "While Vevo has no deals with the cable or satellite-TV firms at this stage, it is working closely with Web-enabled TV manufacturers, set-top boxes and other devices."

As TV manufacturers are bypassing the set top box, they are incorporating web enable technology into their screens. Programming without a cable cord. Broadband access yes, cable no. Will Vevo and other succeed. The beauty of cable channels is that they discovered a two-tiered revenue stream that broadcast did not till recently. Subscription license fees and ad revenue. That capital enables expenditure in more expensive and hopefully more desirable programming. Internet programming has yet to capture a license fee model although Hulu is trying with its premium level of service. Vevo may not have high programming costs to start but as they grow, new revenue streams will be a necessity.

Blackpad vs iPad

Obviously, I haven't touched a Blackpad. But I can already tell you why it won't be as successful as the Apple iPad. The App Store. Ones has to look only as far at the success of the iPod to see why. Not only is the device simple to use right out of the box, it has the power of the iTune Store behind it to make it even more powerful. No other mp3 wannabe has come close to emulating the appeal of the device. And market share of the iPod confirms it.

Blackberry's new device faces the same problem. It has nothing to back it up. And as it tries to add features to get ahead of the curve, Apple will undoubtedly get to the market faster with its next generation. The iPad strategy will most likely follow its brother the iPod, with each generation giving us more while the past model is given a price discount to keep it on the market. "The BlackPad reportedly will sport as many as two cameras, with one pointed at the user for videoconferencing. " I'm confident that Apple has already planned for its next generation device to also have a camera.

The good news is that competition will keep Apple hungry, working its magic to bring better devices to the public.

Blockbuster To Declare Bankruptcy

Not verified, but likely, the news that today Blockbuster will announce bankruptcy. The end of the brick and mortar video store. The rise of digital and on demand. Buy the DVD at Target or Walmart or rent it inside the home. And while Netflix has been successfully transitioning itself to digital, Blockbuster found itself too late to the game. Once the leader and now looking like a footnote in history. Is it Chapter 7 or 13, I haven't heard. But with Blockbuster already closing stores, the end is near.

Is this a precursor to other brick and mortar stores where digital replaces hard copy. Should Game Stop be worried? Is Barnes & Noble on its last legs? The rise of new technology does not necessarily harbor the end of another. For B&N, it is the rise of the Nook. Being on top doesn't mean staying on top. The leader must continue to innovate and adapt or like Blockbuster, they will eventually fail.

Cable companies are facing the same threat from digital leading to cord cutting of cable and phone in the home. The same learnings apply. Innovate, adapt, or else.

Smartphones Leading Way to More Media Consumption

Need to check a sports score, go on your phone. Looking for a nearby restaurant idea, go on your phone. Catching up on Facebook, go on your phone. And in my case, blocked from reading personal emails at work, go on your phone. The cell phone is the connection to media and information, wherever and whenever. Convenient, compact, and always with you.

"And this rabid consumption only stands to intensify as second-generation devices become more ubiquitous. According to the study, 24 percent of people now own a web-enabled smartphone, while cellphone ownership has fallen from 81 percent to 65 percent since 2009." Also worth noting, consumption of media is not a zero sum game; that is, it is not simply being moved from one device to another. We are consuming more because it has become effortless to interact wherever we are. And the variety of content online continues to grow.

"Indeed, the barriers between traditional TV, DVR, and video-on-demand are rapidly vanishing. Watching television live still commands 78 percent of the total hours viewed, but almost a quarter of TV viewing today occurs through a mixture of DVR, VOD, and online video -- an increase of 49 percent year-to-year." This is good news for content creators developing valuable content for TV. That content can now being viewed live on TV, on DVR, through on demand, online, and on DVD.

And smartphones are being made better to support our media requirements. The iPhone from Apple took them a quantum leap forward with it's touch pad concept and now other device makers have followed with their own versions. Still, our next hump to overcome remains the power source. Longer battery life will only lead to even more media consumption.

Apple Finding Another Revenue Stream

The Apple iPad/iPhone and iTunes platform was not just smart, it was revolutionary. It has been a game changer in the phone business, music industry and book industry. As it has killed the music store and begun to cripple the book store, Apple has set its sights on its next target, the newsstand. Rather than buy your newspaper subscription from the publisher, you buy your annual subscription through Apple and get accessibility on your iPad and iPhone device. "Publishers are, wisely, worried that Apple's inserting itself as the go-to vendor for publications will make the publishers largely irrelevant, the same way it has made the music companies irrelevant."

Will publishers give up complete control? Will consumers want both print and digital version as they transition consumers. Will digital be the rebirth of the print industry and lead finally to consumers paying again for content and not just reading for free online. iTunes proved that a model can bring consumers back from stealing songs to buying them. Priced competitively with extras that are exclusive inside a walled garden of content, print subscriptions should find their subscription revenue rising.

The timing of new content with the next generation device is typical for Apple. It keeps them on the cutting edge and maintains Apple's leadership position. While Apple has never conquered the PC world with its mac line, despite being a superior product, it has found great success with the ancillary devices that we as consumers are becoming more dependent on. First the phone, then the pad. Apple is making them the must have gadgets for all.

Big Media Threatened By New Media

Scratch, scratch, scratch. Here that sound. That is the sound of streaming media taking away viewers from cable. Is it a new sound; heck no. Radio heard it from TV. Broadcast heard it from cable. And now cable is hearing it from new media. "The report said companies like Netflix were poised to see solid growth as consumers with moderate income switch to its low-cost, subscription streaming service potentially cutting cable service from companies like Comcast Corp (CMCSA.O) and Time Warner Cable (TWC.N)." It is change at its finest and brings new opportunities and new challenges. Internet content from Apple, Amazon, Netflix, My Damn Channel, Next New Networks, and many many others. ESPN.com isn't the only stream in town.

While Netflix sees growth, cable basic subscribers are declining. Right now, cable is watching its current customers either taking on more services or dropping completely. As customers figure out that they don't need digital phone, that they can downgrade their line-up removing premium services and high costing tiers for movie services that are cheaper and just as robust. And as that trend continues, that they can access broadcast still for free and don't need the cable access.

The world is broadband only and access to all of tons of content. The real worry of cable is that the triple play becomes one play again and that cable doesn't get to aggregate content anymore. TV makers are making internet ready TVs and content creators are selling shows to cable, Apple, and others. Cable must act to differentiate itself if it wants to remain competitive.

Disney, Nielsen team on Apple iPad app

Has advanced advertising on the set top box just got burned. Does interactivity on the TV screen matter when a device in your lap better augments the viewing experience. Has the Apple iPad proven itself again, beyond that of an e-reader to become the ultimate TV companion. The answer is yes.

While the show, My Generation, may not be the ultimate in water cooler conversation, it will simply be the future answer to a trivia question on which was the first show that had interactive capabilities. "Users who download the app can multi-task between the TV experience and the iPad, which will display polls, trivia and other content timed to be relevant to what is transpiring in the 'Generation' storylines." Rudimentary to start, but the future capabilities seem endless. I'd love to see what ABC and its sports counterpart, ESPN, do with a live sports game.

So how does it work; how does the iPad app know what is on the screen. To me, this is ingenious. "What Nielsen brings to the table is audio watermarking embedded in the broadcast that signals the iPhone {and iPad} through its microphone to trigger timed content. While the technology has always been used by Nielsen strictly for measurement purposes, a new mobile-friendly upgrade opened a new ancillary business for the company and Digimarc Corp., which is teaming up with Nielsen on what it has dubbed its Media Sync Platform."

Interactivity with programming without clutter on the TV screen. In fact, an iPad app seems less intrusive than on-screen. And so much easier to coordinate what you see on screen with an online purchase. The commerce opportunity could be more easily managed through your iPad than through a set top. As ABC and Apple test the partnership, I'm sure more strategic partnership opportunities will emerge along with more revenue streams. Regardless of when, Apple is certainly making its iPad a must have device in the home.

Cable Losing Shares

The story may be about Time Warner Cable announcing a loss of subscribers in the third quarter, but once the other cable companies announce their numbers, Time Warner will not be alone. But it is the second line in the NY Post story that really made me chuckle, "Poor home sales and the weak economy, which have families pinching pennies, are seen as the culprits." Perhaps there are other reasons at play too!

The cost of cable has risen faster than the inflation rate. Internet connections, whether tethered or wireless, are more valuable to the home than the cable subscription. And customers are tired of paying for more but essentially getting the same content. Customers are tired of exorbitant cable bills. My own relative recently informed me that their family recently cut the cord. A digital antennae, a broadband connection, and a Netflix subscription, and they estimate a savings of over $500/year. Sure, they are watching their pennies, but they are not doing without. They are getting all the content they want and need through alternative sources. It is competition through technology that is hurting the cable distributor. Yes price is a factor; but choice, convenience and ease of use are working against cable too. Technology is building a better user experience to compete with the cable model and at a lower price.

How will cable respond. Unfortunately, broadband pricing will begin to rise, again most likely faster than inflation. Heavier users will be penalized with additional fees. And cable will try to offset the loss of cable subs through higher pricing to their broadband subs. A wrong strategic move. The barriers to entry in wireless appear lower than cable. New competitors will rise and offer blanket coverage in your community and across the US. Content will continue to fill the IP platform and the consumer shift away from a tethered world will only grow.

The signs are there, Time Warner and the other cable companies. Stop blaming the economy and start changing your strategy to adapt to a changing entertainment landscape. Else your leadership position will fall.