To Grow, One Must Be Original

Whether it is in our personal life or professional one, a differentiation strategy is often useful to attain ones' goals. For a network desiring to grow its ratings, low cost often evolves into a differentiation strategy involving unique original programming. There are many examples to illustrate. In pay TV, HBO was first to dive into original series to differentiate itself from other pay networks. It's first was Oz, followed of course by The Sopranos. Since then, Showtime, Starz, and yes even start up Epix have followed with their own original shows. For basic TV, who would ever expect that TV Land, the place for rerun TV would dive into originals as well. And others like AMC went from classic movies to original miniseries like Broken Trail and their first original series, Mad Men. Original is differentiation; it builds loyalty and hopefully for networks, ratings.

So it must come as no surprise that a movie service like Netflix could follow a similar pattern. "Netflix may be on the verge of acquiring its first original television series, “House of Cards,” a drama to be directed by David Fincher." The platform may be different, but the strategy is the same. Differentiation using original series improves loyalty to the service. Do it well and customers will stay and hopefully bring their friends, too.

The fact that this strategy is being used in this new space adds another wrinkle. "Picking up the exclusive rights to a television show would effectively make Netflix a network similar to ABC or HBO and would underscore just how disruptive the company has become to the media business." As opposed to being another window for films to be available for viewership, Netflix is redefining itself as the online, on demand place for new and old content. Given the costs to produce original content, Netflix will most likely need to raise its subscription rates to finance these new projects. They may also need to build an ad model as a second revenue stream. For now, Netflix remains a low cost alternative to pay as it further slides into the competitive path of the current cable model.

Cable Operators Starting To Offer Mobile Live TV

While a number of cable operators are starting to work on pushing cable channels to mobile devices, Time Warner Cable is the first to release an App. "Time Warner Cable on Tuesday is set to debut an app for Apple's iPad that will let customers watch more than 30 live channels over their home Wi-Fi networks, at no extra charge for those who take both broadband and expanded basic or higher video service." Of course their are a number of limitations. You can only watch on a mobile device within the home. Only 33 cable channels are available, no broadcast channels have been mentioned. And no ESPN, TNT or TBS yet. Still, it is a good first step for operators to satisfy the needs of today's mobile customer and create added value. Comcast and Cablevision seem to be close behind in announcing their app. It is still a baby step as the consumer is restricted to watch only at home, despite being untethered.

Of course, the competition has been offering complete remote access to all channels for a while. Dish Network has been using Slingbox to access remote viewing on both a computer and the smartphone.

Digital broadcast networks are looking at new technology to enable connections to the consumers across any device. Currently known as UltraViolet, consumers could buy once and play content anywhere. It is another step in enabling consumers to watch their TV content anywhere and everywhere. As cable offers a key aggregation approach, these stars could align to bring a robust line-up to the consumer, without the need for a wire.

Will All Roads Lead Through Facebook?

It seems that Facebook is fast becoming the big aggregator with all applications aligning themselves on your Facebook home page. Watch a movie on Facebook, share it with your friends; find a coupon on Facebook, share it with your friends. Why go to tons of different sites if Facebook brings it all to you. And isn't finding something and sharing it what Facebook is all about. While movies and coupons aren't there just yet, it is clearly the direction of the company. "Facebook Inc. plans to test a Groupon-inspired service that provides discount offers, an effort to use its 500 million-plus members to capitalize on the surging online-deal market."

Just as you open your email every day to catch up, you do the same with Facebook. Heck why not have all email go through Facebook too. Of course, the challenge of too much convergence to one source leads to putting all your eggs in one basket. What happens when the site goes down. When your email goes down and you have to get a message out, you rely on your second email account. Too much dependence on one source also limits our own acts of discovery of other deals. Still the convenience of easily sharing through your social network account is appealing and Facebook continues to capture the trend.

And for those that don't want to be an open book, sharing all their activities online with their "friends", there still remains the old fashion way of cutting coupons for the newspaper. Enjoy!

It's Not Cord Cutting, It's Cord Shaving

The concern that cable will lose subscribers entirely to alternative platforms is not necessarily true. Television remains the predominant way to enjoy video programming, especially long form while the pc and tablet are perhaps better suited for short form watching. That line is certainly blurry and based on when and where you are to watch, but the viewing preference is clear. And cable prefers that best connection to the TV set.

Still, the rising costs of the cable subscription is resulting in purchase behavior changes. Some are cutting the cord for internet only viewing; that number statistically is today very small. Others are seeking less expensive alternatives including switching providers from cable to telco or satellite who are able to provide a similar service for a lower cost; hence, a drop in basic cable subscriptions at the cable operator while these other providers grow. And lastly, the current cable subscribers, like me, who seek to downgrade their service to keep their costs from further escalating.

Some drop their hard line cable phone service (retaining their wireless phones) and others drop their programming tiers including premium services. "HBO and Cinemax, Time Warner Inc.'s (TWX) stable of premium cable networks, together lost about 1.6 million subscribers last year, while Netflix Inc. (NFLX) added nearly 8 million--a performance that was widely viewed as evidence that some consumers have an appetite for viewing movies and TV shows on broadband instead of pay-TV." This act of consumers dropping services and taking lower tier programming offerings is in essence "cord shaving".

Consumers have grown weary of paying so much for cable service and not seeing more return for their dollar. Costs are rising but value isn't. Dropping networks and programming tiers allow consumers to keep their cable subscription while using alternative platforms to appease their wants. So a Netflix subscription, costing far less than a monthly HBO subscription becomes a sufficient substitute. Cord cutting is most likely still of future concern for cable operators and programmers; but for today it is really about cord shaving.

Tablet Bubble

Should iPad competitors simply stop competing? According to analysts, they have no chance against the Apple iPad. "So far, Apple is running laps around the competition, with the launch of its second-generation iPad before many of its rivals release their first. The iPad 2 goes on sale tomorrow, and so far only a smattering of rivals have hit the market, including Motorola's Xoom and its Android software." Still, if anything is learned from history, no one is first forever. Competition is necessary and technological advancement will continue to change the outcome.

Just look back a bit at history as the guide. For example, Sony led the portable music space with its hit product, the Walkman. Why buy a substitute for the real thing. Except that technological change got the better of Sony in this category. Digital succeeded tape, but Sony was so stuck on its product that they couldn't change to meet the changing demand. For the Detroit car industry, they were so stuck on big vehicles they couldn't change to meet the new needs of small and economic.

Apple continues to be fortunate in understanding the digital landscape but as history teaches us, it gets harder to continue expand while protecting the existing turf. The iPad is the leader but Apple must continue to take risks to adapt to changing needs or they too could find themselves looking backwards and not ahead.

Step Aside Sirius, Mog Wants A Seat In The Car

It seems Sirius has another contender in the satellite radio industry. Mog, a streaming music service, is using the smartphone and a deal with BMW to bring another service to the consumer. "Mog’s controls on the Mini are integrated into the dashboard’s digital display, and activated by hooking up a smartphone through the car’s Mini Connected system. The program connects to the Internet through the phone, but otherwise it is handled entirely through the standard dashboard controls." In addition, Mog is doing deals with TV and Blu-ray manufacturers to bring their subscription service into the home as well, something Sirius has yet to do. The versatility of it's service to more places should attract more users as well.

But Sirius shouldn't be the only ones concerned. Pandora and Rhapsody also occupy the home space and Apple and Google would like nothing better than to make more inroads as well. To me, the key remains the centralization of the assets, either accessed by a server for the whole home to enjoy or as is now being pushed, the cloud. Apple wants to utilize the cloud for iTune users as are others. With content in the clouds, content is accessed easily from anywhere as long as their is a connection. And what you want, when you want, where you want is ultimately what the consumer desires.

The Merging of Facebook and Skype?

Do you want to merge your Facebook account with Skype. All those friends you have added, are you ready to talk with them every time you are posting? Or will you be encouraged to do your Facebook activity offline. Well the idea of converging the two sites may become a reality. "Facebook Inc., the world’s biggest social-networking company, is holding talks with Skype Technologies SA about offering Web video calls to its 500 million users, two people familiar with the discussions said." So does this work for you or would you prefer to keep the two separate?

Perhaps, it may require us as Facebook users to classify our "friends" in different categories, those that we want to enable full communication access and those that are enabled to simply read and write posts. Perhaps we simply don't want all our friend to know all the time whether we are online or not. Right, I mean some friends are closer than others, and in the case of Facebook, some are simply acquaintances.

Content Stored In The Cloud

We own multiple devices in the home: multiple computers, iPods, and more. And pretty soon, everyone in the household will have an iPad. At the same time, we seek ways to share and hold our content. And while it may not be necessary to have access to the content at all times, we want to make sure it is there and safe when we do want it. So we buy back up digital storage or copy content onto cd-roms. And what we get is multiple copies of the same content filling up tons of storage. We have decentralized storage across each device in each home; now is the time to start centralizing and the solution lies in the cloud.

My first introduction to this concept was when Cablevision announced that it wanted to offer a N-DVR with content saved not on the device but at the central network. For Cablevision, it was an uphill, legal fight. Since then the need for more centralized storage has been turned into the latest buzz word, cloud computing. As defined in Wikipedia, "Cloud computing describes computation, software, data access, and storage services that do not require end-user knowledge of the physical location and configuration of the system that delivers the services."

So Apple is now trying to do the same thing with iTunes. "A deal would provide iTunes customers with a permanent backup of music purchases if the originals are damaged or lost, said the people. The service also would allow downloads to iPad, iPod and iPhone devices linked to the same iTunes account, they said. The move would be a step closer to universal access to content centrally stored on the Internet." Simply, user-friendly, and convenient. Download what you need immediately and store what you want to own and hold. Hopefully Apple will secure agreements from content companies to distribute and store in this manner.

And it seems to me that convenience spells more revenue. The safety of back-up combined with the need to continue to purchase and own. We, as human beings, remain pack rats; it's just nice to know that we don't have to clutter our own drives with digital content.

Banner Year For National and Local Cable Ad Sales

The economy is picking up and businesses are advertising once again. Despite threats of cord cutting and DVR, cable ad sales revenue continues to grow, reaching $27.1 billion dollars in 2010. In fact the CAB calls it the best year ever.

And while national cable ad sales grew near 10%, more impressively, local cable ad sales increased by 20% last year. "Original programming, said CAB, helped attract more dollars across categories to the national cable networks. They also rang up gains with non-linear ads." With interactive advertising and better segmentation technology, along with on demand advertising, cable advertising should continue to advance this year, too.

Of course, the economy must continue to respond. The health of key industries, including the auto market, are necessary. While last year had tons of political advertising, this year must rely on other sectors to pick up the inventory. As employment begins to rebound and consumers are purchasing more items, the economy is rising. And it seems that for 2011, cable advertising has a lot of positive momentum supporting its growth.