Check out this article in today's New York Times. Per Time Warner's CEO, Netflix has "jumped the shark" and will become a fading business. he refers particularly to the deals that Netflix has signed. "The relationship between Netflix and the media companies will most likely change drastically, beginning next year when a deal between the company and Starz, the pay-TV channel, to stream movies from Sony and Disney expires." And while Netflix may have signed some sweetheart deals, it can't be so quickly assumed that they will not find common ground in their renewals. As their growth soars, they remain a powerful force that seems to continue to add a strong and loyal customer base. Should programmers see that their deals are additive to the revenue stream, I doubt they will want to rock the boat too much.
Are Time Warner and the other cable operators worried? Can Netflix continue to sign content agreements that work for their business model? Welcome to a new era of competition in the cable industry.
Monday, December 13, 2010
Another Broadcaster - Operator Negotiation
The end of year brings Santa, cold weather, and yes, another broadcaster and Operator negotiation. In this case, it is Direct TV and Hearst, who owns a number of local affiliate broadcast networks. "The Hearst announcement is the latest salvo in the ongoing battle between programmers and TV providers over carriage fees. Subscribers to DIRECTV, Dish Network, Cablevision and others have lost access to their favorite channels for a period of time this year because their providers could not reach a new agreement before the old one expired.' Markets potentially affected include Boston, Tampa, and 28 others. And for those markets, get used to ads touting alternate platforms to watch their channels. And like every other public negotiation, it will need get resolved until near or perhaps after the deadline. The result, a short term drop in carriage. But don't worry, this negotiation like the others before it will be resolved and order restored. And like every other agreement, the loser will be the customer.
Friday, December 10, 2010
Rainbow Changes Up IFC
When Cablevision and its programming arm bought Sundance Channel a couple years ago, the big question was why. Why add a second indie film network to the roster. One reason may have been favorable financial results. Another seems to be that change was in the air. It appears that IFC is becoming less film and sponsorship. "Instead of art-house films backed by sponsorship messages, IFC is increasingly running accessible indie movies, original series, reruns of cult comedies -- and traditional commercials." No longer saying this hour sponsored by, but offering 2 minutes of 30 second commercial breaks every 15 minutes in a traditional advertising wheel for TV. That means programming to a broader base, which translates to more viewers, more advertising minutes and thus more revenue. Obviously that change will be gradual in an attempt to keep the current viewers engaged while striving to attract new one.
This strategy is not a new one for Rainbow. It has been perfected before. When Rainbow owned Bravo Network (before selling it to NBC), they successfully moved it from a cultural channel with broader interest programming to a more general interest network. They also successfully converted it from sponsorship messages to the traditional ad model. It proved a successful transition that resulted in unlocking greater value from the channel. So most likely Rainbow has dusted off and reopened this playbook for IFC. And if they follow its action plans, they will have similar results. With Sundance Channel in their stable, they still have a network for more indie films and they can push those viewers over who still seek this programming. But don't get too comfortable. I suspect in another 10 years, Sundance Channel will also convert to traditional advertising, and indie films will only be available on demand.
This strategy is not a new one for Rainbow. It has been perfected before. When Rainbow owned Bravo Network (before selling it to NBC), they successfully moved it from a cultural channel with broader interest programming to a more general interest network. They also successfully converted it from sponsorship messages to the traditional ad model. It proved a successful transition that resulted in unlocking greater value from the channel. So most likely Rainbow has dusted off and reopened this playbook for IFC. And if they follow its action plans, they will have similar results. With Sundance Channel in their stable, they still have a network for more indie films and they can push those viewers over who still seek this programming. But don't get too comfortable. I suspect in another 10 years, Sundance Channel will also convert to traditional advertising, and indie films will only be available on demand.
Thursday, December 9, 2010
Howard Stern signs new 5-year deal with Sirius
Well despite all the rumors, of Apple and iTunes, Howard Stern renews his deal with Sirius. "The deal, which runs through the end of 2015, provides that Sirius XM can now transmit Stern's show to mobile devices. No other terms will be disclosed, the company said." Good news to listeners and good news for Sirius.
The Color Nook Is Here
E-book lovers get another generation product to satisfy their reading needs, the color Nook by Barnes and Noble. To me it seems a cross between the Kindle and the iPad and blurs the line between tablet and e-reader. Which device to purchase. One that is devoted to reading or one that also serves up video and more. I guess the answer today comes down to consumer needs and price.
It reminds me of the days many years ago when buying my first stereo system. Did you buy the all in one that combined the turntable, receiver, and cassette player or did you buy components. Want to read a book, take out your reader, want to watch a video, take out your iPad. The challenge is that because these devices tend to be more mobile, carrying more than one can be cumbersome and heavy. An all-in-one device seems more appropriate although the fear is that once the power is discharged, you are done. The more you ask of the device, the more power it needs to consume and the shorter the usage between charging.
As the article says, the readers keep improving. and in 5 years, we will marvel at how much more complex they have become. Let's hope that in that time, the power issue is solved, too.
It reminds me of the days many years ago when buying my first stereo system. Did you buy the all in one that combined the turntable, receiver, and cassette player or did you buy components. Want to read a book, take out your reader, want to watch a video, take out your iPad. The challenge is that because these devices tend to be more mobile, carrying more than one can be cumbersome and heavy. An all-in-one device seems more appropriate although the fear is that once the power is discharged, you are done. The more you ask of the device, the more power it needs to consume and the shorter the usage between charging.
As the article says, the readers keep improving. and in 5 years, we will marvel at how much more complex they have become. Let's hope that in that time, the power issue is solved, too.
Wednesday, December 8, 2010
Will Broadband Become Another Utility?
As discussions on net neutrality rage on, one idea that has been pushed has been pay for play. The heavier the usage, like videos and movie streaming, the higher the fees. No more unlimited time. Well, the good folks at Comcast, in an attempt to move their merger with NBC forward, have declared, no usage fees. "Comcast Cable Communications president Neil Smit said the nation's largest cable operator won't push for hefty charges for heavy users of its broadband service, despite recent Federal Communications Commission moves that would appear to open the door for price increases." Great, but for how long? Until the merger is approved, for one year, forever? Sometimes you wonder if these types of pronouncements are more political than true. Just like a politician, much is promised, but less is delivered. Let's just not be naive to the rhetoric.
Tuesday, December 7, 2010
TV Advertising Not Dead
Despite multiple screens that access video programming, the big screen in the house (in the living room, bedroom, kitchen, or perhaps in all three rooms) remains the best experience to watch video programming. HDTV sets, DVRs, sound systems, and such all make the home viewing experience ideal. And the consumer agrees. "Mr. Wieser (Brian Wieser, global director for forecasting at Magna Global) said he foresaw no dire effects on traditional television from the growth of what is known as over-the-top TV, which is delivery of programming through the Internet".
And because TV remains popular, TV advertising is also doing well. "TV is, by his estimates, still gaining share of the overall advertising market, he added, to 40.7 percent in 2010, from 37 percent in 2005." Certainly, slow improvements in the economy are also helping other mediums as well, including print. But the fear that TV's share would erode from computers, smart phones, or tablets, may not be true. While these devices provide flexibility of viewership, they more likely increase viewership usage, not replace the TV set.
With tax cuts being extended by Congress, and more disposable income in the hands of consumers, more ad spending should occur to help push dollars from the wallet into business hands. And with more consumer spending should come more tax revenue. Television programming remains healthy; perhaps another reason Comcast wants to buy NBC.
And because TV remains popular, TV advertising is also doing well. "TV is, by his estimates, still gaining share of the overall advertising market, he added, to 40.7 percent in 2010, from 37 percent in 2005." Certainly, slow improvements in the economy are also helping other mediums as well, including print. But the fear that TV's share would erode from computers, smart phones, or tablets, may not be true. While these devices provide flexibility of viewership, they more likely increase viewership usage, not replace the TV set.
With tax cuts being extended by Congress, and more disposable income in the hands of consumers, more ad spending should occur to help push dollars from the wallet into business hands. And with more consumer spending should come more tax revenue. Television programming remains healthy; perhaps another reason Comcast wants to buy NBC.
Monday, December 6, 2010
Free HDTV
What is old is new again, especially with a tight economy. Consumers are rediscovering the rabbit ears, although this time it is to receive digital broadcast signals. "Some viewers who have decided that they are no longer willing or able to pay for cable or satellite service, including younger ones, are buying antennas and tuning in to a surprising number of free broadcast channels. These often become part of a video diet that includes the fast-growing menu of options available online."
Yes broadband is more important to the consumer than cable programming. And because of Hulu, Netflix, and other web video providers, there is satisfaction with the choice. To compensate, Time Warner has built a new tier at a lower price, offering connection to broadcast and some inexpensive basic cable channels. A downgraded customer is better than one that leaves entirely.
In a separate article in today's NY Times, ESPN conducted a study that proved that cord cutting was not a problem. "The research comes from the same sample that Nielsen uses to project TV ratings. Nielsen verified ESPN’s findings. Similarly, data from the research firm SNL Kagan found that 119,000 customers dropped their cable or satellite subscriptions in the third quarter of this year. There are about 100 million subscriptions nationwide."
Except, look deeper into the analysis, and perhaps there may be a concern. Today's consumers are leaving cable, for telco and satellite. Why? I imagine that their competitive pricing is lower. For networks like ESPN, a sub lost to cable is gained at telco and satellite growth. Subscribers will gravitate to better value. And as TV manufacturers and gaming platforms continue to build easy access to web programming, consumers will eventually gravitate to these choices in greater volume.
So today, the numbers looks low. But like the boy that stuck his finger in the dam to stop the flow of water, other cracks soon develop and the hole gets bigger. The flow moves from trickle to small stream. Programmers will be hurt less than cable companies in the current cord cutting analysis. But it is a trend that will only keep flowing.
Yes broadband is more important to the consumer than cable programming. And because of Hulu, Netflix, and other web video providers, there is satisfaction with the choice. To compensate, Time Warner has built a new tier at a lower price, offering connection to broadcast and some inexpensive basic cable channels. A downgraded customer is better than one that leaves entirely.
In a separate article in today's NY Times, ESPN conducted a study that proved that cord cutting was not a problem. "The research comes from the same sample that Nielsen uses to project TV ratings. Nielsen verified ESPN’s findings. Similarly, data from the research firm SNL Kagan found that 119,000 customers dropped their cable or satellite subscriptions in the third quarter of this year. There are about 100 million subscriptions nationwide."
Except, look deeper into the analysis, and perhaps there may be a concern. Today's consumers are leaving cable, for telco and satellite. Why? I imagine that their competitive pricing is lower. For networks like ESPN, a sub lost to cable is gained at telco and satellite growth. Subscribers will gravitate to better value. And as TV manufacturers and gaming platforms continue to build easy access to web programming, consumers will eventually gravitate to these choices in greater volume.
So today, the numbers looks low. But like the boy that stuck his finger in the dam to stop the flow of water, other cracks soon develop and the hole gets bigger. The flow moves from trickle to small stream. Programmers will be hurt less than cable companies in the current cord cutting analysis. But it is a trend that will only keep flowing.
Friday, December 3, 2010
Sirus Rumor
Not that I believe it or even think that it is a good fit, but the rumor is that Howard Stern will leave Sirius for Apple. "According to the rumor, Howard Stern is about to sign a contract with Apple for $600 million over three years to host a new internet show over iTunes." Perhaps too, this rumor is meant to encourage Sirius to renegotiate a competitive offer. We will jsut have to wait and see.
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