Fox and Scripps Want Off The Time Warner Cable App

Fox Networks has sent its official letter to TWC demanding that it's channels be removed from the App. "News Corp. joins Scripps Networks Interactive Inc. (SNI) in challenging Time Warner Cable over transmission of live TV signals via an application on Apple Inc.’s iPad without consent. Time Warner Cable customers with Internet service are able to use the app to watch programming within their homes." And at the end of the day, it is all about incremental dollars for rights to stream its content.

I would certainly guess that the Time Warner Cable lawyers pored over each Networks agreements determining which ones gave them the loophole to carry its channel in such a manner. From that analysis, TWC picked its 32 cable channels to post on its App. And as these agreements may not have even considered this kind of distribution path, it seems likely that TWC believes that legally they have the right to offer in this manner.

How popular is this App? How many people have downloaded it and are using it? The fact that usage today is limited to inside the home, it may not truly satisfy the needs of the consumer. For a few dollars more, they could attach a Slingbox and get ALL their LIVE channels, plus DVR, remotely on their smartphone and iPad. And last I heard, Fox and Scripps haven't sued Slingbox or gotten more dollars from them.

Should Sirius Worry About Amazon Cloud Drive Service

Amazon may have just beat Apple to the punch with it's Cloud Drive Storage Service, though Apple has been probably not too far behind. It seems that if we are all saving the same songs, video,and other data, wouldn't their be economies of scale to centralize this content and avoid the waste of replication. It turns our devices into receivers and requires constant access to the web, but it makes a ton of sense.

Should Apple be nervous; probably not. Consumers still like to own and the cost to access may be high. Sirius has little to worry about, too. "What does Cloud Drive mean to Sirius XM? Initially very little, but as consumers adopt the service, and combine it with smart phones connected to the dashboard, people will have access to a wealth of personalized playlists that they may begin to listen to instead of Sirius XM." Sirius has already had to contend with iPods and have survived quite well. Consumers don't want to purchase every song they want to listen to; Sirius and terrestrial radio allow listeners to enjoy without incremental purchase. And Sirius brings exclusive content that Amazon can not offer. "Cloud Drive does not offer live content, nor does it provide the depth of news, talk, and sports that Sirius XM does."

Cloud Drive Service will be the buzzword of this decade. DVR content should soon find its way in the clouds as opposed to individual set top boxes. And consumers will get more and more comfortable saving their personal pictures and data in the clouds instead of a hard drive. In our quest for easier mobility, remote access means constant availability whenever and wherever we are. And that is what makes Cloud Drive Service a winner.

Was Comcast Right - Content And Distribution Can't Be Separated

Perhaps the Comcast acquisition of NBC Universal will soon be regarded as a brilliant strategic move. While other cable distributors spun off their content companies, Comcast purchased a big fish. We applauded the separation of Time Warner from Time Warner Cable (TWC), we cheer on the soon to depart Rainbow/AMC Networks from Cablevision, and we recall fondly when programmers like Viacom kept their content and sold off their cable franchises. And the AOL-Time Warner merger a decade ago only reaffirmed that content and distribution shouldn't be combined.

But somehow, the timing today may just be right for a content and distribution merger to make sense. And it may be justified because of what is brewing between Time Warner Cable's App and the Networks it streams. It may make sense for a merger of content and distribution for cable operators as they compete with digital platforms for share. The threat of cord cutting might be described as remote, but it is that very threat that pushes Time Warner and other operators to build Apps to distribute content off the TV screen. Simply put, value added product to retain the customer as a paying subscriber, especially when the alternatives like Netflix and Hulu are cheaper. But as TWC releases its App, programmers are challenging the legality of its distribution. And other cable operators are surely watching.

Comcast, who now owns multiple Networks, can offer these streams without the risk of a legal front. Owning the vertical path of content and distribution provides them more freedom of movement and may encourage other companies to follow a similar path. "A full-on deal in which an Internet player like Netflix or Amazon.com will acquire a news organization, studio or TV-production house. Imagine Google grabbing the New York Times, or Facebook buying its own entertainment arm." And it is that threat that pushes TWC and other cable operators forward, despite the threat of lawsuit from the networks. As content and distribution move down this digital path, it may just now be the best time yet to merge. And Comcast may be a step in front.

Apple Building A Smart TV?

Check out this article from Apple Insider. Steve Jobs may not be running the day to day, but it seems Apple is still innovative in its approach. "...Apple Smart TV could be an opportunity for the Cupertino, Calif., company to consolidate 'TV/Video content, gaming, DVR, as well as other features like apps and FaceTime into one product,' much like the company did with its strategy for the iPad." Does that mean Airplay, too? And given the high customer value, an Apple TV could have great success.

The challenge for Apple will be the cable companies and gaining access to programming without a cable box. The CableCard is not the solution; Apple would need to build a solution inside the set to descramble the cable signal and provide full access to on demand programming as well. Finding those answers would make an Apple TV a real winner.

Netflix Encourages Cord Shaving

My kids are encouraging me to drop our premium services for Netflix. Maybe because we cycle through the on demand list and find little for them to watch, maybe because there is so much buzz about Netflix. And Netflix continues to aggressively build up its content to effectively compete with HBO, Showtime,and others. "Movie rental company Netflix Inc is close to an agreement with Miramax to stream the studio's library in a deal that would be worth 'well north of' $100 million over five years, according to a source familiar with the deal. Miramax's more than 700 titles include hits such as 'Pulp Fiction' and 'Good Will Hunting.'"

And here is the kicker, it is cheaper to get a Netflix subscription then cable premium networks. So it is actually in the family's best financial interest to make the move. So how can Netflix make such aggressive distribution deals. For one, they don't have to share their revenue with a cable provider. And the more content they acquire, the more value to the customer. That means more subscribers to the service and more revenue coming in.

The premium channels have one ace up their sleeve - original content. Starz has Camelot, Showtime has Dexter, HBO has the upcoming Game of Thrones. For viewers passionate for this content, cord shaving is unlikely. For those willing to wait a year for the shows to move to DVD, Netflix will be there. Oh wait, Netflix has original content, too. So that Ace may only be a deuce.

Content vs Distribution: Cable vs Network

The new Time Warner Cable App, offering its customers live feed access of its channels on mobile devices, has raised the ire of the programmers. It seems the right to show a network on a channel position through a cable wire into the home does not extend to streaming media. And Time Warner Cable has read its contracts and figures that they have the rights to in-the-home mobility. "Melinda Witmer, chief programming officer for Time Warner Cable, said in an interview that her company is "well within our rights" to transmit TV channels to any device in the home, as long as it sends signals through its cables and its "secure network," rather than the "open Internet." For that reason, the app is specifically configured to work only when linked to a subscriber's home Internet connection." But is this the real fight?

It seems that this in-home access will not be enough for the tech savvy consumer. They want the same access outside the home too. And the consumers preference is to pay once and watch anywhere and everywhere. The Time Warner App is only a small step to this next model. It is a slippery slope and one that programmers don't want to take. They want to be paid for each distribution platform that their network is placed on. "Meanwhile, TV executives have reason to be wary. Some executives see an opportunity to make more money by selling shows and networks to companies like Apple and Netflix Inc. over the Web. They aren't eager to give those rights to cable operators without additional compensation." At the end of the day, it is all about the revenue.

It has become a more contentious relationship between programmers and operators. Programmers see new revenue streams while operators are trying to save their existing base. The challenge may be for operators to show programmers that their revenue is also at risk should viewers switch to other platforms. But as the nature of their relationship continues to erode, it may be difficult to find common ground.

The cable operator not saying much is Comcast. While Time Warner Cable divested itself of its programming, and Cablevision is planning the same with its Rainbow programming business, Comcast is the only operator left with both a distribution and content business. In fact, it may just be what makes Comcast most adaptable to its consumers' demands.

Can Media Buyers Change Their Models?

The population is getting older, the older are living longer, and they are spending more, too. Yet, the holy grail of advertising appeal is to the younger demographic. It just may be that the 18-49 year old audience may not be the ideal group to reach and advertisers may be missing the true mark. In fact, age may not even be an important variable to the mix. CBS certainly believes so. "Age and sex don't matter when it comes to TV ad effectiveness, said CBS Corp. Chief Research Officer David Poltrack, who has teamed with Nielsen to create what he called a historic move to replace demographics with a new model for TV planning and buying, based on viewer behavior and attitudes." But can media buyers change their behavior and attitudes to try a new approach?

It certainly makes sense knowing the psychographic tendencies of the audience you are trying to impress. And new research tools make it much easier to aggregate and analyze this information. "The growing use of single-source data like that from Nielsen Catalina and TRA Global, which combines set-top box and shopper-card data, has started to have an impact even before this, Mr. Poltrack said. That data led marketers to restore advertising budget dollars -- to TV in particular -- faster in the recent recession than in prior ones, he said." Better targeting of messages, especially to heavy users, often lead to a higher ROI. Yet, there is nothing like simple reach and frequency to break through the clutter, too.

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?