Time Warner Cable Prefers The Web

CEO Glenn Britt sees Time Warner Cable's future and it isn't the set top box. Growth in broadband and over the top competition appears to have TWC finally embracing the internet. "Combined with the idea that they could some day raise prices on those who use the most data, the company painted a picture of a business that would survive the transition from traditional cable video to the Internet. 'High-speed data is quickly becoming the anchor product in the eyes of our customers,' Chief Executive Glenn Britt told analysts Thursday." This awareness certainly is based on the trends of the business although it should have been acknowledged much earlier. While their broadband subscriptions rise, even greater than forecast, video subscriptions continue to drop each quarter.

That broadband data, whether e mail or video content, is what is driving the cable business. It is also what is pushing TWC and other cable operators to push their channel line-up out on the web to PCs and tablets. But to embrace IP is to move away from EBIF and set top boxes. "The company's engineers are focused on delivering more video over the Internet to an array of devices include Apple Inc.'s iPad, developing technology that could eventually make cable set-top boxes unnecessary, Britt said." And necessary for a TV Everywhere experience.

This announcement might also be a blow to set top makers like Motorolla and Cisco (Scientific Atlantic), as well as companies building EBIF tools for the set top - Canoe Ventures, Ensequence, and others. TWC is a partner of Canoe and Britt's remarks about the obsolescence of the set top seriously undermines these companies' business models. It is the web and cloud computing that is the future of TV - network DVRs, interactivity, mobile content, and not a set top box in sight.

For Time Warner Cable, the numbers aren't lying. The challenge is how fast TWC and other cable operators can turn their ships to take more advantage of the web before other over the top competitors take too many subscribers away.

Comcast Adds More Broadcast On Demand Shows

With competition for eyeballs growing, Comcast knows that its on demand serve must be the biggest and the best. Combined with its Fancast streaming platform, Comcast can push its subscription value to its consumers. But to stay competitive and valued, the supply must continue to grow. Thus the latest deal to add more shows to its library of on demand.

"The largest U.S. cable-television company will include TV series from Walt Disney Co. (DIS)’s ABC and News Corp.’s Fox for the first time, including “Grey’s Anatomy” and “Glee,” the Philadelphia-based company said in a statement. Comcast will offer the four most recent episodes of each series on demand beginning tomorrow. Comcast is competing against other cable and satellite providers and online sites including Google Inc. (GOOG)’s YouTube and Netflix Inc. for viewers and advertisers. With the show additions, Comcast said it becomes the first pay-TV provider to offer original series from NBC, CBS, ABC and Fox on demand." Ahhhh, here those key differentiation words, first and original. Clearly, Comcast is feeling the pressure from these over the top providers as well as from telcos like Fios who will announce their own extended deals as well.

The on demand space isn't perfect. Some agreements will limit trick features like fast forward, a win for advertisers. For viewers that don't mind, it means more flexibility to watch on your terms and not on a schedule. And for those that know how to use their DVR, a non-issue. The day will come where every show is on demand and that could make DVRs unnecessary. Until then, Comcast and others will continue to push to increase their on demand library.

TV Everywhere - From Many Not Just One Source

In a wired world, the cost of maintaining and growing the platform, as well as the laws and regulations surrounding a wire, has led to a high barrier to entry and a monopoly of sorts. In the cable industry, you have the choice of only a few - cable company, telco provider, or satellite - to receive your cable signals. Otherwise, it is a digital antenna to receive TV programs. In a digital streaming world, your choices are infinitely wider.

As a consumer, you are not reliant on your cable company to watch shows. With digital streaming, barriers have dropped and multiple video providers have moved in to stream shows to you; not just tethered to your wired TV, but available everywhere and anywhere. Programs can be viewed on your smart phone, your tablet, your laptop, and yes, even on your TV. TV manufacturers have developed connected TVs that bypass the cable wire to enable streaming media to be enjoyed in a big screen experience. They have bypassed the cable operators to work directly with streaming media.

This upheaval in the entertainment landscape has challenged cable to push out streaming apps of its channels on tablets to compete with Netflix, Amazon, Apple, Google and scores of others. Want to watch Austin Powers, you can price shop - buy the DVD, watch on demand from cable, rent from Netflix, download from iTunes. And decide which service gives you the movie where you prefer to watch it - big screen HDTV, laptop, iPad, or iPhone.

It is this new world of TV Everywhere from many sources verse just one that will impact the cable industry. With many players competing for the viewers' attention, each service will compete on price, original content, speed and mobility. And it is that last factor that can hurt cable. HBO is helping cable with its Go product, but one network support is not enough. Dish Network has found its work around with Slingbox. Until then, Netflix and others will forge ahead with more content deals to become more valuable to its growing subscriber base. They are doing deals with many consumer electronic manufacturers and content creators to fill and distribute their pipeline of programming. And that means cord shaving, or worse, cord cutting, of cable subscriptions.

The Tablet Concept Developed By the Newspaper Industry

In 1994, Knight Ridder had already imagined a Tablet computer. I guess the fear of losing their print business may have stopped them from making this leap. Still a fun video to watch, especially that is was created over 17 years ago.

Can Netflix Keep Growing?

Netflix has successfully transitioned itself from DVD rental to streaming media giant. And consumers have flocked to join the service. "At the end of the first quarter, Netflix had 22.8 million subscribers in the United States, giving it as big a footprint as the biggest American cable operator, Comcast, which reported 22.8 million subscribers at the end of last year." At the same time, Netflix has recognized that content is king and is pushing into original content. So will this bubble burst?

Netflix faces a couple of challenges as well as opportunities. The challenges include a platform with low barriers to entry. Cable companies, Apple, Amazon, Dish/Blockbuster and others make it a very crowded space. Competition also pushes up the price of content. It follows a very simple supply and demand economic pricing model. And lastly, the product is only as good as the broadband path that enables it.

But Netflix also has opportunities. Its large customer base is ripe for an advertising model that would add another revenue stream to their bottom line. And as a leader, they continue to remain innovative and forward-thinking. As they learned from DVDs, the business is ever evolving. And lastly, Netflix might also want to consider new partnerships to compete. As Comcast is owning content networks, Netflix might need to do the same. Vertical models are forming and Netflix may need its own to remain ahead.

DVRs Are Helping TV Shows and Ad Revenues Are Improving

The NYT reports that DVRs are saving TV shows by demonstrating that the audiences are watching. "Instead the playback device is offering some shows a lifeline — so much so that network programmers now factor in ratings a full week after a show’s scheduled appearance." And in today's WSJ, Ad Revenues are improving. "For the second consecutive year, marketers are poised to spend more money in advance on commercials for the coming TV season than they did a year earlier, driven in part by unusually high prices for last-minute commercials this spring, according to both buyers and sellers of TV advertising." Put the two articles together, and DVRs are bringing in larger audiences and advertisers are paying for them. Certainly opposite from the thought that DVRs would hurt the TV ad model.

Truth be told, households still watch ads, even on DVRs. Especially when the content of the ads break through the clutter to resonate with the audience watching. Catch them quickly with a hook and hands don't reach for the remote to fast forward through them. In addition, Tivo is working with advertisers to provide better data to improve ad performance. With its latest legal victory, Tivo has also been in the news. Should more cable companies consider including Tivo in their own DVR, viewers would actually appreciate a better search as well as viewing experience. DVRs are in the news and it seems TV has nothing to fear.

Apple In The Clouds

Apple continues to prove itself a leader, not resting on its current success, and quick to adapt to a changing entertainment landscape. As consumers seek a purchase once, play everywhere (POPE) model, businesses have been pushing to centralize content to achieve a successful model. And while Google and others have announced such intentions, Apple seems nimble enough to actually move ahead of them. "Apple Inc has completed work on an online music storage service and is set to launch it ahead of Google Inc, whose own music efforts have stalled, according to several people familiar with both companies' plans."

Obviously the challenge of centralized content is that when the system is down, there is no access. Of course the same holds true when one's own iPod stops working, too. The question is, which model is sturdier and likely to withstand constant use. A centralized approach has perhaps an easier ability to backup and protect it's content and to have secondary means to keep the systems working. "Apple, Amazon and Google are battling for control of new digital media platforms through which everyday users will access their music and videos." It also pushes hard though the WIFI and cellular systems that connect content to device. Apple and others have no control on that piece of the communication puzzle.

But who knows; perhaps, that is the next step in the Apple world. To own a communication company that makes those connections. These vertical businesses are happening in cable. Comcast owning NBC Universal being the latest example. What is stopping Apple from doing the same.

Tivo Wins Again

Talk about a court case never ending and monies that may never appear, but Tivo has won again against Dish and the lawsuit still continues. "A panel of federal appeals judges has found Dish Network Corp. and EchoStar Corp. in contempt of court for failing to abide by an injunction barring them from using technology patented by TiVo Inc. in older Dish set-top boxes. The judges are sending the case back to a lower court to consider whether a work-around technology being used in newer Dish boxes still infringes on TiVo's patents." What is sure to follow is another round of appeals and more delays and by then, the technology will probably be obsolete.

Today, Tivo is to DVRs what Kleenex is to tissues, synonymous in the minds of most consumers. While certainly different in the benefits they offer, not understood by most consumers. And so while this legal fight will surely continue, Tivo must do more to ingratiate itself with both cable and over the top platforms. That means Tivo approved set top boxes, Tivo inside of XBox and Playstation and even a Tivo Apple combination. That is where the real winning will occur.

How Much Would You Pay for An On Demand Movie

If you enjoy the ease of watching a newer released movie in your living room as opposed to driving to your local theater, then the question to you is how much are you willing to pay to get those movies in your home sooner. Movie studios are willing to find out. They are proposing to bring films to your home in 2 months after its theater release as opposed to 4 to 6 months. Direct TV is scheduled to test this new service. "The El Segundo-based satellite television provider will launch so-called premium video on demand Thursday with the Adam Sandler comedy, just 69 days after the film premiered in theaters. Consumers will have to pay $29.99 to rent the Sony Pictures movie for 48 hours. That's the first time a major studio movie has been available on television sets that soon after playing in theaters and at that high a price." Other films will follow.

For consumers who weren't able to watch the film in the theater and can't wait till it premieres in the next window, this option gives them more immediate enjoyment. But at $30 it hardly seems worth it, especially when the price to view in the regular on demand window is under 6 dollars. There is perhaps the rare film, like Avatar, that might justify this higher cost for an earlier window, but I doubt the returns will be impressive.

Still as DVD sales have lost ground to the digital market, studios' willingness to try new ideas is impressive. If for $30 I would own a digital copy of the film and I could access on all my devices, then I might be more inclined to consider. But to rent a movie for that amount, I might as well wait for the cheaper DVD or normal on demand window. With so much product in the marketplace, there is always something to watch.