Should Comcast Buy Tivo

Since I felt it necessary to tell Apple what to buy with its money, I feel compelled to do the same with other companies. No attaching article, just my own thoughts to best serve my needs. And so my first recommendation is for Comcast to buy Tivo. If you don't mind proactively recording future shows, then the DVR is your friend. Having used both the Tivo and DVR, I wish that Comcast would buy them so as to quickly integrate them into their DVR service. Sure Comcast has a deal with Tivo, but do they market it, no. A Tivo DVR should be standard on every Comcast DVR box. And it might make it a lot easier for Tivo to get traction with other cable operators as well.

Okay, so Comcast has a lot on their plate, still arguing with the DOJ about their NBC merger. So if not Comcast, then Cisco should step up. They bought Scientific Atlanta, the company that makes the DVR boxes, they should buy Tivo and thus make their DVR superior. Why am I obsessed with upgrading the cable DVR experience? Because when you have driven a better car, it is hard to go back to the old clunker.

Okay, one more acquisition idea. Ultimately, I want Apple to have a second distribution platform and Sirius could be the company that also supports their cloud based approach. Add to that the content that Sirius produces, and Apple gets the one two punch with an acquisition of both content and distribution. Far-fetched or brilliant, it may initially seem like an odd couple but it could just be the next spark for what you want, when you want, where you want, how you want. As long as Steve Jobs and Howard Stern get along.

How Should Apple Spend It's Money

Record profits and earnings, Apple has more money, over 76 billion dollars, in the bank, than even our own government. So what should Apple and Steve Jobs do with it besides hide it in the mattress.

There has been some speculation that Apple should release a dividend or buy back it's stock, pleasing to shareholders, but not a long term strategy for growth. Others want Apple to purchase another company, and the latest talk is Hulu. Where Apple has had a purchase strategy through its iTunes' store, Hulu has delivered a rental and subscription strategy. But it's owners, a consortium of programmers, may have deals in place with Hulu that may not be ideal in the long term. I don't believe that Hulu and Apple would be a great fit.

So let me throw out other possible acquisitions for Apple that would excite me more. Apple needs a streaming rental play; Netflix is pushing hard in that space. With Amazon and You Tube on its heels, Netflix could use a strategic partner in Apple and Apple could easily integrate the Netflix model into it's products and software stores. It would also enable a better fit to the Apple TV device pushing rental content as well as purchased content into the TV. And as content drives use of iPads and iPhones, Netflix brings Apple more content and another streaming platform.

Another idea for Apple is Barnes and Noble. While Liberty Media may be making a run, Apple could benefit again with another content play. E-books are growing, a Nook powered by Apple, gives it additional credibility and broadens Apple's product line, and the digital print platform fits nicely with the iTunes library. Add to that the retail locations, which gives Apple even more access across the country.

Lastly, and perhaps a long shot, Apple should buy a company like Lightsquared. To own a wireless platform to enable broadband access across the country means that Apple could have more control of its content delivery directly into the hands of the consumer. At the same time, it puts them into a stronger competitive position against the cable operators, and lead to even faster cord cutting. The challenge for such an acquisition is that it would also put them against the telcos as well, who currently sell 3G and 4G distribution for their products.

Now I wouldn't mind if Apple sent me a check for a 100G, but that is not going to happen. Still with so much cash on its hands, and a shareholder desire for Apple to keep growing, Apple must either be spending more on R&D or looking for an acquisition to build out better synergies. It is unlikely that Apple will simply issue a cash dividend or stock buyback. It is their nature to innovate and grow. With that in mind, a content or distribution play is the likely next step.

How Do You Like To Watch?

Get your minds out of the gutter, it is an innocent question asked about how viewers like to watch their video content. With cable operators reporting drops in cable subscription, online consumption has only been growing. And there not watching just on their PC. "Video game consoles have a lot to do with the discrepancy: Half of all Netflix users connect to its streaming service through their Nintendo Wii, Sony PlayStation 3 or Microsoft Xbox consoles, according to the survey. ... The findings highlight the strong appeal of TV sets for streaming digital video, connected through myriad Internet-enabled devices. Other methods of connecting include Blu-Ray players, TVs with Internet access and Roku boxes."

We like our big TVs, we just don't need a cable box to receive video programming. And with internet connected devices, we can watch what we want, when we want, where we want, what we want. With Wal-Mart, Amazon, and others pushing streaming content, demand for it should only increase. I only expect that future research studies will show a larger percentage of viewing will be watched through streaming devices. It also speaks well for the future of Apple TV, as a device that easily transmits content into the TV. We watch our content at our convenience where it makes most sense at the time. So how do you prefer to watch streaming media content?

Wal-Mart Trying Hard To Compete With Netflix, Apple And Others

Big box stores like Wal-Mart are recognizing that they need to have a strong digital business to survive and compete. And a dot com strategy must be more thaan simply selling its in-store merchandise online. It is why Wal-Mart continues to push a streaming media video play. "A cloud-based video movie service, Vudu lets customers rent or buy movies over the Internet and stream them to their TVs, Blu-ray players and a variety of Vudu-enabled devices such as Sony's (SNE) PlayStation 3 and HDTVs from LG Electronics, Sharp and Panasonic (PC)." Vudu was bought by Wal-Mart last year and is being rolled out next week.

Wal-Mart hopes that it is not too late to the game, with Apple, Netflix, Amazon, and others also in this space. "Unlike competing services such as Netflix, the Vudu platform on Walmart.com does not offer any subscription service, and the retailer said it does not currently plan to offer such a service." A one off strategy may not be enough to work as companies are looking hard at subscription strategies as a means to better forecast and achieve higher revenues. And Wal-Mart may need to add music and other digital deliverables to its mix as demand for these other downloads grow as well.

Like the early days of cable, when there were many operators, the streaming media business will quick enough find that it needs to consolidate with others to control and own the platform. Perhaps Wal-Mart needs a partner like Barnes and Noble to add a digital book component to its mix. Or perhaps it could align with Apple to mutually support their new cloud approach. At the end of the day, many platforms for distribution streaming will merge into few and the leaders will be the ones to pursue consolidation and growth strategies.

More Reasons Apples New App In-Purchase Policy May Hurt Them

Check out this article in Wired Magazine. Apple is only opening the doors to other means to not use an Apple app.

"No Soup (I mean No Book) For You"

If your used to buying your e-books off your iPad, the process has gotten trickier. But if you are a Nook or Kindle owner, purchasing new books off your devices, but sometime reading them on your iPad or iPhone, there should be nothing to worry about. It's just that Apple doesn't want to enable purchase behavior without getting a piece of the pie. And at a 30% piece, Amazon, Barnes and Noble, and others have decided to remove the purchase feature from their respective apps. So if you were previously buying through the app, the process has gotten a bit more cumbersome, as you have to go into the website; if your buying off your e-reader, you just won't notice.

Does Apple have a point? Well it is their store and there is a cost for the convenience. They are the Wallmart of App Stores with little competition at the moment. At the same time, a 30% piece of the sale may also sound awfully high, especially for simply being a pass through. How will consumers react? If they find a comfort level by going through the website, it may also enable individual content producers to recognize an opportunity to create a unique value proposition by going direct to the web. And should more and more content companies find value in marketing directly to the consumer, and consumers find satisfaction from this approach, Apple may have initiated a big sea change, all for a 30% short term margin. It is these strategic decisions that make Apple and other companies constantly re-evaluate their processes so as to understand consumers changing purchase behavior. Hopefully Apple is paying close attention to the repercussions of this app strategy.

Has Bing Gone Bong?

Google's cornerstone revenue stream comes from search. For Microsoft, it remains their operating system. And their expansion into a competitive search engine to rival Google was designed to diversify and grow profitability. Alas, no such luck. "The division that houses Bing lost $2.6 billion in the latest fiscal year." That doesn't sound like a distraction; rather, a full on problem! Does Google simply have the upper hand, does the consumer not want choice of search engines, or does Microsoft simply not have the marketing juice to overtake an incumbent?

Could Bing be more successful in the hands of another company, one that can better utilize the value from a search engine. "Moreover, there are potential buyers. Facebook already works with Bing. It might be interested in buying the site, keeping more traffic onsite, and perhaps using its data to better tweak search results. That would be a potent weapon in its fight with Google, which recently introduced a rival social network, Google+. Apple might even be interested, given its growing online ambitions, evidenced by its consideration of a bid for Hulu."

Truthfully, no incumbent is ever safe; change is rampant, especially in the technology industry, and today's winner is tomorrow's failure. As consumers, we will change search engines, just like we change ISP and cable providers, video platforms, and other businesses, when the buzz and value gets noticed by the consumer and sways us to change behavior. It is why Google must continue to innovate, why it must add new products and services, and why it must take risks.

Microsoft has had amazing success with it's operating system and with XBox. But it has had many failures too. Bing may not have had a chance in the Microsoft culture. It may be a better fit with Facebook or Apple or Yahoo. It may be hard for Microsoft to concentrate on Bing when it's core business is being hurt by tablets and cloud applications. With Apple owning the mobile and tablet space, and netbooks not requiring a Microsoft operating system to function, computing is slowly moving away from Microsoft. For that reason, Bing has become an expensive distraction for Microsoft in maintaining their PC leadership position.

New York Times - Short Term Pain, Long Term Gain

The printed piece is having a hard time, as is all physical media. The technological revolution that has transformed information, both video and audio, from disk and paper to bits and bytes, is only changing faster. Data is no longer simply delivered, but shared in the cloud, available wherever, whenever, and however you want. For companies whose fortunes have been in physical media, their future lies in digital media. But there is a cost to the ROI and if you don't pay, your company will die.

Netflix is transforming, Blockbuster didn't. Barnes & Noble is transforming, Borders didn't. And newspapers and magazines are transforming, some faster than others. For The New York Times, it means a growth in digital subscribers as print subscription declines. "For those tracking the success of the NYTimes.com (NYSE: NYT) meter that started ticking in March, the New York Times says it ended the second quarter with more than 1 million digital subscribers." A quarter million are digital only customers, a number that will surely increase as tablets and e-readers continue to gain momentum.

And with that shift comes lower operating costs, both in the printing and distribution, and higher margins. For consumers, faster access, as well as more timely, able to refresh and add new content to meet the demand for breaking news. Consumers are getting more comfortable accessing newspaper and magazine articles off digital devices. Subscription models still need to be tweaked to provide flexibility for purchase options with a value proposition marketing message. In the early days of print, you got a cool phone with your Sports Illustrated subscription, today it could be access to other digital products - a month of MLB.com, a month of Sirius.com, or a free movie download. A little incentive marketing can go along way.

For The New York Times, the short term pain will only result in future profitability. These steps into the digital world are necessary if publications like these want to survive and compete. Stay focused and innovative, NYT, digital is here to stay and you are heading in the right direction.

Should Yahoo Buy Hulu?

A simple question in a quickly changing digital landscape. Is Hulu a good asset to purchase and if so, should Yahoo buy it. "Bloomberg published a report yesterday that suggested Hulu's owners are only willing to offer Hulu's new owner five years of access, but only two years of exclusivity. 'If [Hulu's content creating owners] came out and said, we've renewed [Hulu's exclusive rights] for four years at the same terms we have today – it's really easy to model [a valuation between] $1 billion and $2 billion – maybe more,' says this source. Without four or five years of exclusive streaming rights to TV shows and movies, Hulu is 'not worth anything.'"

While I agree with the Bloomberg statement, I'm not entirely convinced that even a five year rights deal is enough to make this a good investment opportunity. The current landscape has cable operators pushing these same content owners and others for rights to their linear and on demand programming outside the cable box, on smartphones and tablets, outside the home. Apple, Amazon, Netflix and others are negotiating licensed deals as well. Hulu gets no special treatment once the current content owners sell off. And in 5 years time, content owners could begin to sell their programming directly to consumers.

Finally, I don't believe there is enough program exclusivity to differentiate distribution, the only exceptions being sports and live programming. Want an example, look at DirecTV offering Damages exclusively this year, Friday Night Lights last year. While the programming is great, I doubt it is enough to cause a consumer to switch their distribution provider.

In 5 years, cable operators will get online distribution rights from the networks. Their marketing pitch will be "TV Everywhere" and consumers will be drawn to one distributor giving them access to viewing, wherever and whenever they want. For those seeking other movies and TV shows not available from these programmers, they will access via rental or purchase from Netflix, Redbox, Apple, Amazon, and others. Hulu's play only works because of its programmer partners; without them, Hulu may not have the long term value to compete in this crowded marketplace.