Sony Changing The Window On Digital Movies

Sometimes you have to just move on. While we like to hang on to old ways and old habits, change is inevitable. And when you finally give change a chance, positive things can happen. For Sony, it means no longer being rigid on the order in which a movie gets sold or rented. The DVD model is no longer the customer choice for purchase; the world is digital and so it means changing the order to move digital sales up in the pipeline.

Sony's first step in change is with it's release "Bad Teacher". By moving up digital purchases ahead of rentals and DVDs, they saw a marked increase in revenue. "More good news for Sony: It says demand for digital rentals didn’t seem to drop once they became available two weeks after digital sales started. And physical sales — still the most important source of income for the studio — don’t seem to have suffered, either." Sounds to me like a successful test and one that should be repeated with every movie release. How quickly Sony embraces this new strategy remains to be seen; for now, they seem to like to classify it as a test only.

With the rise of cloud based services from Apple and Amazon, the switch to digital will only progress more rapidly. As digital becomes the preferred distribution choice, DVD sales are destined to decrease faster. It is the inevitable results of change in consumer preference. The pace of this switch can be slowed with aggressive pricing discounts. Where once DVDs cost $20 or more, today they are in the $5 bin. And at that price they become a great stocking stuffer too.

Cable Viewing Trending Like Broadcast

The most notable thing about history is that it tends to repeat itself, whether in political conflict, economic, and yes even in media. It is a common pattern, one that seems to surprise us every time it occurs. These changes occur, both in good and bad ways, but inevitably they always happen. Nothing is constant and human patterns tend to repeat themselves.

In the media world, we have watched as technological change has caused changes in viewing pattens, from radio to TV, TV, to cable, and cable to online. And yet, we seem surprised that the upstart is taking share away from the established media. So it should be no surprise to read that cable viewership is declining and streaming is increasing. "Several factors could explain the downward ratings trend. For one thing, the number of households with DVRs has reached 43 percent, and viewers tend to record broadcast network shows more than they do cable shows. Also more people are watching shows via tablets, smartphones and computers, where Nielsen’s traditional ratings methods have struggled to keep up with changing viewing habits." Count this household as one that has adopted more DVR, on demand, and streaming to its viewing patterns.

My kids watch a ton of their shows either on DVR or on the computer. In fact, they are finding more online only programs that they are preferring to watch and enjoy. For my wife and I, the DVR is our way to watch what we want when we want. As broadcast tends to play once and repeat months later, a lot of broadcast viewing is done on the DVR. The notable exceptions are sports and news. Heck even the award shows are watched on a delayed DVR basis. Cable shows on the other hand repeat and repeat and repeat. There is less of a desire to schedule to watch and they become filler until a better choice is found. And with on demand and streaming services like Netflix, it is easier to watch a movie any time of day.

The only thing that doesn't change is the time available to watch shows. With so many alternative viewing choices, the long tail of programming choices gets longer and longer. It chips away at the bigger networks just as cable stripped viewers from broadcast. The DVR, on demand, and web streaming have changed how we as viewers watch our shows. Linear becomes less relevant and too many linear channels only continues to dilute the ratings.

Apple TV Sets Coming in 2012

The Steve Jobs' biography refers to products in the pipeline even after his death and news around an internet TV continues to spread. There is word that Apple is working with Sharp to create the screen and that the set will do for TV what the iPod did for music. "Last month, it was reported that Apple had created a prototype of an internet-connected television product that can stream content from the cloud and use voice-control via Siri, the system incorporated into Apple's new iPhone 4S."

Great for those that don't use a cable box to receive their TV content, but what will Apple do to work successfully with cable operators. The cable remote has been repeatedly chastised as too many buttons, with too few features. It is too easy to press the wrong button and mistakenly turn off the TV or switch the channel. Apple successfully took a device and made it work with 1 button and then ultimately with simple touch. Today, a number of functions are successfully launched with voice, through Siri. It is less about the TV set and more about how one accesses its features.

What else is in store and what will a Job-less Apple look like, we can only wait and see. Let's hope that innovation remains its mantra.

The DVR Is Not Dead - TiVo Posts Gains

With so much talk lately about cloud services, streaming services, and on demand viewing, it's nice to hear some encouraging news about the growth of DVR subscribers from the premier service, TiVo. In Q3, TiVo grew over 100,000 units a complete turnaround from the previous quarter when they lost more than 30,000. So what changed? "Basically, the key takeaway point is that TiVo stopped focusing heavily on retail sales and is distributing more through cable companies -- a strategy that appears to have worked." New deals with cable partners like RCN, and better relationships with DirecTV and Comcast.

So what is TiVo's next step? Perhaps a better relationship with Echostar and a discussion to integrate Slingbox technology with TiVo. A stronger push with its cable partners to increase its rollout of TiVo set top boxes with a ton of marketing promotion behind it.

So here is to TiVo. Let's hope that this first quarterly increase in four years is not an anomaly but rather the start of renewed growth for the company. A great product deserves great marketing and higher use.

Will Siri Be In Every Apple Product

Everyone that has an iPhone 4S marvels how much they enjoy using Siri. It represents a major change with how we use our phone to call up apps or get answers to our questions. Whether it is a simple search, math question, emotional response or simply a phone number, Siri continues to prove itself as useful. And as we as users become more comfortable using our voices rather than our fingers to generate commands, it represents a turning point in our interaction with technology.

"But experts say that Siri – and what it represents – might be as subtly revolutionary as the iPhone’s multi-touch screen was when unveiled in January 2007. That’s because Siri isn’t just “voice dialling” or “voice recognition” (which tries to turn speech into its text equivalent); it’s “natural language understanding” – NLU, in the lingo." So how much longer before Siri is integrated in our next iPad or laptop. When will I be able to say "Siri, open word document...type please...To Whom It May Concern..." or "Open iTunes...play Best of Playlist".

As I finish reading the Steve Job biography, I marvel at how many devices he created that never existed before and how he made us want things we never thought we would need. Siri is one more technology that in his legacy he will have successfully launched within his closed end to end architecture. Siri will become the heart of all future Apple devices, future TVs included.

Is There Too Much Fragmentation In Media

Is it possible to have too much choice? The proliferation of cable networks, websites, and other forms of media have made it harder for consumers to find what they want. Even worse, while the tail keeps getting longer, revenue growth is limited. No doubt the big brands continue to provide great content but some still struggle to grow revenue. Low cost rivals scratch away at market share, and in some cases, find that lean and mean can thrive against fat and bloated. But is it time for some consolidation and fewer choices.

Industry life cycles result in the big firms swallowing up smaller rivals and proceed to create oligopolies in their industry. Product life cycles follow their corporate brands which results in companies buying and merging other products into their family of products. And some products simply vanish as their usefulness erodes and they can no longer sustain their business model.

So as I look specifically at the number of cable networks and watch as viewers begin to prefer shows over networks, watching them on demand or through streaming devices, I wonder if it is time for consolidation of network brands. Where once UHF and VHF dominated, then to analog feeds and now all digital, networks have spawned more and more offshoots of their lead brand. One example is the arrival of OWN, the Oprah network from the folks at Discovery. She excelled on broadcast but her show and her network cannot find a meaningful audience. Would it have been better to put her show on the Discovery or TLC networks?

But Discovery is not the only network that has built new networks as niche offshoots of its main brands. HGTV has DIY, Food has Cooking, NBC has Sleuth now rebranded as Cloo, WE tried with Wedding Central, VH1 has VH1 Classic. Is it time for consolidation and a movement away from linear networks to on demand? Are these niche networks only hurting viewership of their parent networks and is it time for the 500 channel universe to reduce to 100?

Like the music industry, we are moving away from album sales to individual songs. For TV, viewers watch shows not networks. Couldn't a reduced number of linear networks help keep them more viable as aggregators and recommenders of the best content. Too much sometimes just lowers the quality bar of TV content. And with the rise of DVRs, on demand, and streaming, viewers watch what they want when they want, where they want. Perhaps it is time to bring expertise back to TV network scheduling. Drop networks that aren't performing and let people watch those niche shows on demand only.

Boxee Encouraging Cord Cutting

While the economy and poor housing market have been repeatedly cited as reasons for consumers to downgrade or cut their services, there is still a desire to watch TV. Boxee has developed an alternative to the cable box to provide a cheaper choice for web and broadcast viewing. They are "preparing a new add-on product in January that will let users pull out the cable cord and plug a USB device into their cable box, giving them access to broadcast TV channels like ABC, CBS, Fox, and NBC for free."

You pay a one time fee to purchase the box and USB add-on and no more monthly cable charges. Unfortunately, consumers will have to pay for broadband access. And costs for broadband access are higher than when they are bundled with other cable services. Ultimately, we still pay.

So while Boxee remains a choice, so does switching cable providers and haggling for better pricing. We like the variety and quantity available on cable and thatmakes it hard to turn off completely. In a tough economy, we all become more astute consumers seeking out better choices and lower prices.

Authenticated Cable TV Viewing Outside The Home

Content companies, especially those with TV networks, have been negotiating with cable operators to receive incremental license fee payments for access to their networks outside the home on iPads and other mobile devices. Today, that access has been mostly limited to mobile devices inside the home. But why should a cable operator agree to pay more for these rights with any network when that access is already possible with technology? Why pay each network when cable companies could be integrating Slingbox technology into their current cable box?

The latest news from Slingbox is the integration of a player within Facebook, enabling a bit of sharing about what you are watching. Cute, but not so earth shattering. Couldn't this be better done with 2 screens.

Is it that consumers don't yet feel the need to have immediate access to their TV outside the home. Slingbox has been around for some time and consumers could on their own buy a box and add it to their system. But we don't seem to hear much news about how Slingbox sales are growing, although all of Echostar's equipment sales were down double digit in the third quarter. Is the idea of TV viewing outside the home what consumers really want? Do we prefer an out of home experience to strictly be an on demand one, where we can access a particular show when and where we want? Do we really desire linear access outside our home?

As to the pull on cable operators to negotiate higher license fees for out of home authentication, perhaps current technology is an alternative to raising costs and ultimately raising fees.

The Future Of TV

A terrific presentation that may just help us better understand where TV and the web are headed. The one adage that continues to play out is that "History repeats itself". We try to learn from it, we try to avoid the same pitfalls, but we continue to be faced with the same results. In business, that is seen as a disruptive influence on the mature model, causing a change in purchase behavior.

The music industry has watched sales of albums be replaced with single song downloads. In cable, networks have been bundled and sold together while the web enables single streams of video. And that, according to the presenter, is how TV will change. "My analogy is that 'cable & satellite bundles are the album. and given choice consumers prefer either singles or to make their own bundles.'” It is what consumers are already clamoring for, a la carte network choices as opposed to tiers, all to pay only for what you eat, and not ordering the whole buffet.

The web already enables a la carte and web viewership continues to grow while TV viewership declines. TV manufacturers are embracing this change by building connected TV sets, offering direct to internet connections along with a plug for a cable box. But their hope may be that the cable box will just go away.

And as our presenter acknowledges, the need for more content will only be greater. Content remains king in this changed model although how much more people can earn is subject for debate. What the web does do is to lower the barrier to entry so that more creative folks are able to produce and distribute content. The long tail lengthens and more people will earn money from creating content.