WSJ Adding Options To Its Pay App

Sometimes you don't want to buy the whole loaf for a single piece of bread, or the whole album for a single song. So too is the case with digital newspapers. As The New York Times looks to enter the digital subscription market, The Wall Street Journal continues to be one step ahead. "Looking to get more subscribers for its iPad app, The Wall Street Journal will start selling single-issue digital versions of its morning paper for $1.99 in the within the existing free app." Understanding that there are occasional readers who may not want a subscription, WSJ is now ready to offer a single day's issue. Isn't that how newsstands function, selling daily papers. Offering single sales to the "casual" reader also provides for great sampling as a means to pushing a subscription later. It seems the virtual newsstand is finally coming together.

Howard Stern Fighting With Sirius

I guess things aren't so rosy between Howard and Sirius despite the recent renewal of his contract. "In a lawsuit filed Tuesday in New York, Stern, his agent Don Buchwald and Stern's production company, One Twelve Inc., claim Sirius failed to pay stock awards due in exchange for helping the satellite radio service exceed its subscriber growth targets." So one must wonder, is there more to this story. Contracts are never as clear cut as they are meant to be. Has Sirius found a loop hole to stop paying Howard stock or is something else amiss?

Writers Guild and Producers Sign New Agreement

Remember the writers' strike a few years ago. Tons of people out of work. Movie and TV show production stopped. Neither side could agree how digital dollars were to be shared. And at the end, the writers lost and the studios and networks saved tons of money. And how quickly the viewers forget the wasteland of programming including the rise and fall of The Jay Leno Show.

Well as far the WGA seems to be concerned, there will be no repeat behavior as a new deal was quickly and silently signed. "The agreement comes after less than three weeks of bargaining, in contrast to a writers' strike in 2008 shut that down much of Hollywood's production for 100 days." Members still have to sign off on the deal, but it seems certain to be sealed. No one wants to repeat that fiasco again for quite some time.

Will FCC Approve AT&T and T Mobile Merger - Absolutely

Can the FCC and Department of Justice ever say no to a deal? It may feel warranted initially but it never happens. These deals go through and for the most part it is for the better. It is the dragging out of the process that seems to hurt both companies and the competitive process. The NYT touts some pretty well known mega deals and most have been approved. But beyond these mergers, including the most recent NBC Comcast deal, what about others in the broader communication industry.

When AT&T was split up into baby bells who would have thought that they would merge and merge again. But despite the threat of oligopoly, new technological changes enabled new competition. The rise of the cable IP phone allowed cable companies to offer competing telephone service. That most likely was never envisioned.

The merger of Sirius and XM into a monopolistic satellite radio company seemed to appear as a huge concern too. But the merger was approved and there remains competition because of both terrestrial radio and mobile music devices. The delay in getting this merger approved only hurt Sirius in maintaining a competitive stance in an ever changing technology world.

And so to the question of the AT&T/T Mobile merger, it too should be approved ASAP. True it reduces the cellular competition into the big two with Verizon (perhaps 3 if you count Sprint), but cellular is facing growing competition from a WIFI world. And I am confident that work is on-going on the next innovation in wireless communication. For AT&T and others, they need to gain economies of scale as the wired side of their business erodes. This merger step forward seems necessary to simply remain competitive in an ever evolving and changing media landscape.

NYT vs The Daily: Can Either Overcome The Pay Wall

Next Monday, The New York Times ends its free web content and puts up a subscription wall. Today, one week sooner, The Daily erects its own pay wall as it too wonders, will anyone start buying its online newspaper. "News Corp. gets its first sense of whether readers will pony up $1 a week for a newspaper rendered in a mobile app, or if The Daily fades into the downloaded-and-forgotten oblivion that afflicts so many in Apple's App Store." Certainly, between the two content creators, the NYT has the bigger lead but it also has the most to risk. The Times has been offering free content for quite some time while The Wall Street Journal was fast to build what has become a successful pay model. The Daily comes from a strict online space with only a couple of months of sampling to urge consumers to fork over dollars for content.

Can the newcomer survive? Can the gray old lady get back into shape and adapt to a rapidly changing marketplace? Or will iPad and smartphone users simply continue to consumer content that is free to read? Is it all, one or no winners in this battle. For consumers that see the value in the product, success should come. The Times has that edge with its consumers and the online platform adds convenience for the customer. The Daily has not earned that credibility yet. Form without substance may not be enough to gain a viable base. Deep pockets however may carry the day. As tablets and smartphones grab a bigger footprint, and consumers begin to accept that they have to pay for quality content, success may come for both. At the same time, they should not stop innovating; as competition in this space will only ramp up, too.

Sirius Outside The Car

Have you been a Howard Stern fan but unwilling to put Sirius in your car? Perhaps it is because you don't commute that much and do more radio listening at the office or in the home. Well, it seems that Howard will finally make it to the App Store. "The SiriusXM Internet Radio App gives you access to over 120 channels of great SiriusXM programming, including Howard Stern, on your iPhone, iPad, and iPod touch so you can have the best in audio entertainment anywhere you go!" Adding a new distribution platform with access to original content like Howard should help to drive up subscription revenue for Sirius. And while they have to share that download fee with Apple, Sirius probably had a similar revenue share plan with the auto dealers in exchange for adding it into a car's features.

For Sirius subscribers, there is an incremental cost to add this app. How many existing customers add this platform may be a good indication of the how strong the value proposition is for Sirius. New customers to the App will be charged a higher monthly subscription plan. Still, this new distribution platform offers much wider access to content and could be seen as quite a deal. I know it is for me.

New York Times Requiring Paid Subscription For Online Content

The wall is slowly going up around The New York Times web content. For the occasional user, sampling will be free; but once you've read too much, a subscription to the site will be required. "There are three pricing plans for people to choose from; at each pricing level, the level of access readers have to the paper's content increases. The cheapest costs $15 per month. The most costly plan costs $35 per month, and allows unlimited access to the Times' website, smartphone and tablet apps. People who subscribe to the print edition of the paper will also have unlimited access." For print subscribers, it will be like getting a bonus edition. For newsstand purchasers, it might be financially more attractive to buy the online version.

Other newspapers and magazines will watch and see how well this change is treated by The New York Times' customer and what the financial ramifications may be. It could lead to higher subscription revenue; it could also lead to a drop in online usage and consequently online revenue. And should it prove successful, watch as the free amount of content drops. They will initially offer 20 free article views per month. Success could drive that sampling number down; instead, they could offer a daily fee for access.

Given the rise in iPads and smartphone usage, the timing may just be right. With other content competing in this space, however, the Times must really push its brand value to justify its cost. Otherwise, free and lower cost content from other sources will simply push the Times further out of the picture.

Content Wants To Be Paid On Every Platform

Consumers have always wanted content on their terms. The rise of the VCR first enabled viewers to tape their favorite shows and watch at their convenience. The challenge was those that couldn't even set the clock. VCRs begat the Tivo and the DVR experience. No clocks to set and an easier way to record. And the DVR has led to On Demand where the content has already been recorded and simply waits to be called up and viewed. Yet throughout this evolution, the content view has been limited to the TV screen. The most recent innovation has been the Time Warner App to push TV content from the TV to the iPad.

Great for consumers, but a challenge to TV Networks. Programmers want to be paid for this new distribution platform. "Network legal reps are issuing a flock of heated missives to the nation’s No. 2 cable operator, calling for an immediate halt to a new service that allows subscribers to stream video content to iPads and other tablet devices." When On Demand was released, revised agreements were needed for use; content owners argue that their agreements don't enable usage on mobile devices. These agreements tend to describe the technology used to transmit and the security to protect it. Time Warner argues that its use is limited to inside the home, but that may not matter in their programming agreements.

And while I can understand the Networks trying to increase their license fees, more views of their channels would also mean more advertising dollars. Perhaps more emphasis should be on measurement of iPad TV views. I also wonder if Programmers are so opposed to Time Warner pushing their content to more consumers, then why haven't they also sued Slingbox and Dish. Their boxes have been out on the market for a while and apps to access on mobile devices already exist, without any limits on where the content is viewed. Slingbox doesn't pay license fees for pushing content either.

Should Networks be entitled to more dollars for rights to more platforms? That certainly is what contract negotiation is all about. Value for value. But at the same time, recognize that when consumers are asked to pay too much or are restricted in accessing content, they tend to find innovative ways to move forward. Look no further than the music industry and Napster as an example. For TV, Tivo was developed to skip commercials and Slingbox was built to access content remotely. Networks not working together with Cable Operators to find a viable solution will find that consumers will simply build a work around solution. The Time Warner App adds value to the cable subscription. And keeping cable subscribers keeps Network annual license fees from declining.

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.