When I re-tweeted this link to the SAI article, I received a number of comments that agreed with the DOJ decision to block this purchase. Good news for the consumer, more choice were cited. But is that really true? T-Mobile is the fourth and smallest of the major players; Verizon and AT&T already own at least two-thirds of the market. With Sprint in third place and with half the customers of AT&T. So did the government do us any favors blocking this merger?
Without T-Mobile, AT&T remains number two behind Verizon. T-Mobile, struggling already, has two alternatives, find another buyer or drop out. They may have gotten monies from AT&T from reneging on the deal, but they have a long way to go to build out and bulk up. They need help. Should that buyer be the number three carrier, Sprint, would the DOJ nix that deal as well? The argument of loss of major competitors still holds true, it just brings Sprint up closer to AT&T although it still would keep them third place. If competition is the concern, then the argument to nix this deal as well still holds.
And what if T-Mobile decides it can't remain in this mobile world without a partner? What if they simply drop out and break up to smaller competitors? Competition is still reduced and all the DOJ did was hasten the death of T-Mobile. So despite the comments of the government actually looking out for the consumer, the likelihood remains that we still lose T-Mobile. The only difference, AT&T doesn't capitalize on the assets of a purchase.
The author of this article makes another good point. "Of course, this is (basically) the same government that still grants monopoly licenses to cable and phone operators in most regions, thus giving massive companies MONOPOLY control over those markets. And given how much most people hate their cable and telephone companies, if the government wanted to protect us from any monopolistic communications-company abuses, they could have started there."
Communication exists both in the carrier space and broadband world. With wireless hotspots growing around the country, competition for spectrum still exists. Technological changes continue to find new competitors to the space. Let's not forget that Lightsquared is still out there seeking approval to compete as well.
So yes, I agree that with the author that the government's decision to block this merger was wrong; inconsistent given the monopolies that it has already allowed to flourish, and not likely to change the competitive landscape because it kept a fourth competitor from leaving us sooner rather than later. In the next couple of years, we will likely still see the big four become the big three carriers. DOJ simply slowed down the process of change.
Wednesday, December 21, 2011
Tuesday, December 20, 2011
Ex-Cablevision COO New Charter Cable CEO
It must have taken a lot to cause Tom Rutledge to finally leave the roost at Cablevision and to quickly turn up at Charter Cable. And one has to wonder when his right hand man, John Bickham, will once again turn up at his side. As they say, third time is the charm, right.
But what caused Rutledge to so quickly depart from Cablevision after almost a decade of service? So far I have heard a few possibilities. One is that as a family business owned by the Dolans, the COO position was the highest role he could attain on the ladder. He simply isn't "family", unless he married into it. And with the programming networks, AMC and MSG, sold off, he had less to control. Perhaps Charter's offer of a CEO role and more "ownership" was compelling.
Another possibility brewing was that there was a big fight internally and a riff that made dealing with the Dolan's more difficult. Another newspaper has speculated that Rutledge was fighting with Jim Dolan's wife, Kristen, a marketing executive on the senior team. If true, I can only say that family and business never mixes well. But I personally find it unlikely that this is the cause of his departure. They have worked together from the beginning and it is hard to believe that any disagreement would have caused Rutledge to walk away. It just doesn't seem like his personality.
And the third possibility is that Cablevision has quietly been exploring a sale to another cable operator and Rutledge's days would be numbered if he stayed. That seems especially true if the new owner would be Time Warner Cable, the company he was at before joining Cablevision. That John Bickham also left a month earlier seems to put more credibility into this third scenario. Should Bickham actually join Rutledge at Charter Cable, I think that is more proof that this possibility has validity.
The truth will continue to emerge in the coming days and weeks. Rutledge has been described as a strong leader and he certainly led Cablevision to great success under his tenure. His hiring at Charter spells great potential for them to finally emerge as a cable leader. Despite being larger than Cablevision in number of subscribers, Charter lacks a clear center, both geographically and managerially. A Rutledge led team is good news for Charter's future.
But what caused Rutledge to so quickly depart from Cablevision after almost a decade of service? So far I have heard a few possibilities. One is that as a family business owned by the Dolans, the COO position was the highest role he could attain on the ladder. He simply isn't "family", unless he married into it. And with the programming networks, AMC and MSG, sold off, he had less to control. Perhaps Charter's offer of a CEO role and more "ownership" was compelling.
Another possibility brewing was that there was a big fight internally and a riff that made dealing with the Dolan's more difficult. Another newspaper has speculated that Rutledge was fighting with Jim Dolan's wife, Kristen, a marketing executive on the senior team. If true, I can only say that family and business never mixes well. But I personally find it unlikely that this is the cause of his departure. They have worked together from the beginning and it is hard to believe that any disagreement would have caused Rutledge to walk away. It just doesn't seem like his personality.
And the third possibility is that Cablevision has quietly been exploring a sale to another cable operator and Rutledge's days would be numbered if he stayed. That seems especially true if the new owner would be Time Warner Cable, the company he was at before joining Cablevision. That John Bickham also left a month earlier seems to put more credibility into this third scenario. Should Bickham actually join Rutledge at Charter Cable, I think that is more proof that this possibility has validity.
The truth will continue to emerge in the coming days and weeks. Rutledge has been described as a strong leader and he certainly led Cablevision to great success under his tenure. His hiring at Charter spells great potential for them to finally emerge as a cable leader. Despite being larger than Cablevision in number of subscribers, Charter lacks a clear center, both geographically and managerially. A Rutledge led team is good news for Charter's future.
Monday, December 19, 2011
If You Understand The Digital Distribution Platform, Can You Build Better Content?
Certainly the future of print lies in digital distribution. The rise in penetration of tablets and e-readers with digital content is that proverbial chicken and egg scenario where one continues to drive the other, perpetually linked. And this latest piece of news demonstrates the commitment that how well this digital content gets purposed in a digital form is just as crucial.
"Rodale is expected to announce that it has hired Anthony Astarita as senior vice president and general manager for digital and brand development. Before joining Rodale, Mr. Astarita served as Barnes & Noble’s vice president and general manager for e-commerce and digital products." It indicates to me that Rodale understands that delivering content to a digital platform is not enough. Maximizing the value of the new space requires understanding its strengths and weaknesses more completely. Bringing someone from the platform side can help Rodale reshape and deliver the content in a way that enhances the value of the content and fulfills the expectations of the viewing receiving it in this different form.
And I don't see this hiring as a means for Rodale to get into the hardware space. It is not their business nor should it be. Theirs is to drive content across multiple platforms and hopefully to be agnostic about which one the consumer might ultimately choose to view its content on. With Apple, Amazon, and Barnes & Noble vigorously competing along with other CE manufacturers, it is not in Rodale or other publishers' best interest to join this side of the fight.
The Nook and other tablets are not simple replacements for a magazine or newspaper. These devices bring more capabilities and more opportunities and this hiring should help Rodale and others to make its content more compelling, more interesting, and more necessary. Knowing the hardware side means faster loading, streaming, viewing options, interactivity, and other technological feats to improve the experience. And that can drive more subscriptions and more ad revenue.
"Rodale is expected to announce that it has hired Anthony Astarita as senior vice president and general manager for digital and brand development. Before joining Rodale, Mr. Astarita served as Barnes & Noble’s vice president and general manager for e-commerce and digital products." It indicates to me that Rodale understands that delivering content to a digital platform is not enough. Maximizing the value of the new space requires understanding its strengths and weaknesses more completely. Bringing someone from the platform side can help Rodale reshape and deliver the content in a way that enhances the value of the content and fulfills the expectations of the viewing receiving it in this different form.
And I don't see this hiring as a means for Rodale to get into the hardware space. It is not their business nor should it be. Theirs is to drive content across multiple platforms and hopefully to be agnostic about which one the consumer might ultimately choose to view its content on. With Apple, Amazon, and Barnes & Noble vigorously competing along with other CE manufacturers, it is not in Rodale or other publishers' best interest to join this side of the fight.
The Nook and other tablets are not simple replacements for a magazine or newspaper. These devices bring more capabilities and more opportunities and this hiring should help Rodale and others to make its content more compelling, more interesting, and more necessary. Knowing the hardware side means faster loading, streaming, viewing options, interactivity, and other technological feats to improve the experience. And that can drive more subscriptions and more ad revenue.
Friday, December 16, 2011
Cablevision For Sale
Cablevision, the fifth largest cable operator in the US, is a very successful company. From its humble roots, it has grown and prospered with innovative marketing and an unabashed style of management. They coined the triple play campaign of cable, voice and data at $99 and heard initial jeers from other cable companies. But the campaign was wildly successful and soon these same naysayers were following Cablevision's marketing strategy. Even with Verizon FIOS in their neighborhood, they never wavered in their competitive fight.
At one time, they were operator and programmer with ownership of networks like AMC and MSG. But now each have been spun off into standalone, publicly traded companies. And Cablevision sits as simply a cable operator. So the loss of two executives, John Bickham, and Tom Rutledge, raises speculation that Cablevision may finally be for sale...for real this time. With Jim Dolan managing his primary interests of music and sports under the MSG Network, it may just be easier to sell the operation side.
And who might be interested? Time Warner Cable has longed for this operation since it has owned New York City. Other investors may simply be waiting to come in and snatch what has long been considered prime property. Is Cablevision for sale finally. The answer may shortly come out.
At one time, they were operator and programmer with ownership of networks like AMC and MSG. But now each have been spun off into standalone, publicly traded companies. And Cablevision sits as simply a cable operator. So the loss of two executives, John Bickham, and Tom Rutledge, raises speculation that Cablevision may finally be for sale...for real this time. With Jim Dolan managing his primary interests of music and sports under the MSG Network, it may just be easier to sell the operation side.
And who might be interested? Time Warner Cable has longed for this operation since it has owned New York City. Other investors may simply be waiting to come in and snatch what has long been considered prime property. Is Cablevision for sale finally. The answer may shortly come out.
Thursday, December 15, 2011
Content is King Especially For Sports Programming
Attention NFL Football fans, their TV deal has been renewed and pro football will remain on "free" television. "The broadcast networks will pay a total of nearly $28 billion in fees over nine years under the new contracts, which take effect after the NFL's 2013 season." Oh did I say free, I doubt it because ultimately those fees will be paid by a rise in cable subscription pricing. Broadcast networks will seek higher retransmission deals for carriage and those fees will be paid by increases in our basic cable bills. Advertising revenue will also rise as networks will demand higher fees for each :30 spot. And companies that pay higher fees will eventually price higher their goods and services to the consumer. It is the trickle down theory hard at work.
Occasionally operators push back on cable license fees but ultimately find agreement at some higher amount. Today that fight is occurring between Time Warner Cable and MSG Networks; their deal expires at the end of the year unless a renewal deal is reached. The likely scenario will be that no deal gets done at midnight of December 31 and the network is dropped. Other networks, print, and radio will blare messages from each side blaming the other for loss of programming. Fans of the network holler and ultimately some weeks or maybe months later, a deal is finally reached and the network is back on the air. It is then quickly forgotten until the next cable bill increase arrives in the mail.
Ultimately content is king and sports especially remains high on the list. How price elastic is this model remains to be seen. It may simply cause additional cord cutting by those no longer able or willing to pay for what they don't want to watch.
Occasionally operators push back on cable license fees but ultimately find agreement at some higher amount. Today that fight is occurring between Time Warner Cable and MSG Networks; their deal expires at the end of the year unless a renewal deal is reached. The likely scenario will be that no deal gets done at midnight of December 31 and the network is dropped. Other networks, print, and radio will blare messages from each side blaming the other for loss of programming. Fans of the network holler and ultimately some weeks or maybe months later, a deal is finally reached and the network is back on the air. It is then quickly forgotten until the next cable bill increase arrives in the mail.
Ultimately content is king and sports especially remains high on the list. How price elastic is this model remains to be seen. It may simply cause additional cord cutting by those no longer able or willing to pay for what they don't want to watch.
Wednesday, December 14, 2011
If You Have An Xbox, Will You Need An Apple TV
Connected TVs are emerging to be more valuable than even 3D. Manufacturers are building sets with wireless and wired connectivity to the web while at the same time streaming media is finding spots on guides of various set top boxes. All this while cable operators push to keep their cable subscriptions growing.
For younger audiences, more entertainment is happening through their XBox, Playstation and Wii gaming boxes. And streaming media companies like Hulu and Netflix are attaching their subscription services to these boxes. "According to a new survey and projections by Strategy Analytics, the connected TV player will sell 4 million units this year to capture 32% of the streaming media player market. The media player market includes competitors such as the Roku and Boxee boxes."
And while the first generation of Apple TV boxes haven't caught on yet, hope is on the horizon with a next generation Apple box incorporating its cloud service and app connectivity with iPads and iPhones. "But more importantly, the AirPlay feature in iOS allows the mobile devices to move media to the TV from the devices and allows the iPhone or iPad to serve as complementary screens." And of course the rumor that Apple will manufacture its own television set. I also hope that Apple improves the remote control experience and perhaps includes Siri in the set top and TV set.
The XBox game controller is also a more adept device in enabling search choosing what to watch. And consumers that own a gaming device may not see the need to buy another set top box controller. Still the Apple appeal should never be minimized. The TV set in the home is becoming more a centerpiece for viewing and interacting with content.
Competition for alternative ways to connect to the web is growing rapidly; at the same time, cable operators are doing nothing to make their cable boxes more user friendly. As more meaningful content moves over to web devices, the threat of cord cutting becomes much more pronounced.
For younger audiences, more entertainment is happening through their XBox, Playstation and Wii gaming boxes. And streaming media companies like Hulu and Netflix are attaching their subscription services to these boxes. "According to a new survey and projections by Strategy Analytics, the connected TV player will sell 4 million units this year to capture 32% of the streaming media player market. The media player market includes competitors such as the Roku and Boxee boxes."
And while the first generation of Apple TV boxes haven't caught on yet, hope is on the horizon with a next generation Apple box incorporating its cloud service and app connectivity with iPads and iPhones. "But more importantly, the AirPlay feature in iOS allows the mobile devices to move media to the TV from the devices and allows the iPhone or iPad to serve as complementary screens." And of course the rumor that Apple will manufacture its own television set. I also hope that Apple improves the remote control experience and perhaps includes Siri in the set top and TV set.
The XBox game controller is also a more adept device in enabling search choosing what to watch. And consumers that own a gaming device may not see the need to buy another set top box controller. Still the Apple appeal should never be minimized. The TV set in the home is becoming more a centerpiece for viewing and interacting with content.
Competition for alternative ways to connect to the web is growing rapidly; at the same time, cable operators are doing nothing to make their cable boxes more user friendly. As more meaningful content moves over to web devices, the threat of cord cutting becomes much more pronounced.
Is You Tube Redesign Favoring Professional Over Amateur?
Once again, despite or desire for new things, we dislike change that affects what we are comfortable with. Change with the look of Twitter, change when our cable networks change their channel numbers, and now change with the You Tube redesign are all examples that get people frustrated. But change is meant to drive innovation and hopefully, once people get used to it, proves better, easier, faster, smarter than the previous version.
With the redesign of YouTube, the other question is being asked, is it meant to favor professional content over uploaded amateur content? Is it a move that raises barriers to viewership by guiding viewers to content that brings more revenue to YouTube? "In place of that free-for-all will be a new YouTube, more commercial, more predictable and, its owners hope, more televisionlike. The underlying reason is money, of course, but the immediate issue is control. By cutting away the user-driven underbrush and shepherding viewers, especially those with YouTube accounts, toward TV-like content channels — an increasing number of them produced by corporate media partners — YouTube and its owner, Google, will gain more control by giving amateur videographers less exposure and funneling viewers toward fewer choices." TV experience on the web, professionally produced, fewer but better content. Are the lines between the TV set and the web becoming more and more blurrier?
YouTube's original objective was to enable consumers to share their videos with family and friends. Upload once and share among all. But that primary mission has evolved over time as its original owners sold YouTube to Google. The business plan is all about revenue and "the redesign is to push the viewer toward the higher, more brand-name end." More clicks, more ads, more revenue, more profit. The amateur video will be pushed further down the long tail. And the higher the viewership on a particular "channel", the easier it is to charge higher advertising. Is the article calls it, "predictable viewership for specific content". It is the TV model pushing ratings to garner premium pricing.
Will the amateur videos still exist on YouTube? They still generate ad dollars based on total views across all video clicks, but they will be harder to find. How the search button will push these viral videos over professional content remains to be seen. It may affect too how the next piece of amateur content is or isn't discovered. Search and recommendations may be pushing more professional content over amateur and that might be the worst sin of all for You Tube users.
Last point, like any good business model, the more revenue streams the better. Currently, YouTube has only the ad revenue stream. That may change as well as You Tube ponders a premium model to gain a subscription footprint. It worked with Hulu Plus, why not YouTube. Free only works for so long.
With the redesign of YouTube, the other question is being asked, is it meant to favor professional content over uploaded amateur content? Is it a move that raises barriers to viewership by guiding viewers to content that brings more revenue to YouTube? "In place of that free-for-all will be a new YouTube, more commercial, more predictable and, its owners hope, more televisionlike. The underlying reason is money, of course, but the immediate issue is control. By cutting away the user-driven underbrush and shepherding viewers, especially those with YouTube accounts, toward TV-like content channels — an increasing number of them produced by corporate media partners — YouTube and its owner, Google, will gain more control by giving amateur videographers less exposure and funneling viewers toward fewer choices." TV experience on the web, professionally produced, fewer but better content. Are the lines between the TV set and the web becoming more and more blurrier?
YouTube's original objective was to enable consumers to share their videos with family and friends. Upload once and share among all. But that primary mission has evolved over time as its original owners sold YouTube to Google. The business plan is all about revenue and "the redesign is to push the viewer toward the higher, more brand-name end." More clicks, more ads, more revenue, more profit. The amateur video will be pushed further down the long tail. And the higher the viewership on a particular "channel", the easier it is to charge higher advertising. Is the article calls it, "predictable viewership for specific content". It is the TV model pushing ratings to garner premium pricing.
Will the amateur videos still exist on YouTube? They still generate ad dollars based on total views across all video clicks, but they will be harder to find. How the search button will push these viral videos over professional content remains to be seen. It may affect too how the next piece of amateur content is or isn't discovered. Search and recommendations may be pushing more professional content over amateur and that might be the worst sin of all for You Tube users.
Last point, like any good business model, the more revenue streams the better. Currently, YouTube has only the ad revenue stream. That may change as well as You Tube ponders a premium model to gain a subscription footprint. It worked with Hulu Plus, why not YouTube. Free only works for so long.
Tuesday, December 13, 2011
Should Verizon Buy Netflix?
Build it or buy it may be the discussion inside Verizon these days on what to do about a movie rental business. It seems owning the wireless spectrum isn't enough, it is important to also have services to sell on that pipeline and the movie business can be lucrative.
As video consumption shifts more and more from DVD to online, so too changes the consumer preference to either own or rent. Studios pushing the sale strategy are pushing consumers with cloud ownership of digital copies with every DVD sold. And of course Apple and Amazon are there as well with their cloud strategies.
The movie rental business has been shaken up in recent months with the various missteps made by Netflix. And Blockbuster is trying to refocus their business with the help of their new owners Dish/Echostar. So now Verizon is considering making a play for Netflix and perhaps to help them re-establish their formal glory. "Chief Executive Officer Lowell McAdam told an investor conference on Dec. 7 that the company aims to move beyond its Fios TV service into the streaming-video business." And while the speculation is that Netflix is on the Verizon radar, why isn't Hulu also being considered. Hulu has indicated an interest in being sold while Netflix has not. Both require bandwidth that Verizon can support and Hulu offers a duel revenue stream of subscription and advertising. Plus Hulu doesn't have the burden of mailing DVDs and could support a theatrical film streaming service expansion.
Yes, I like the idea of Verizon pursuing a streaming distribution strategy. I just wonder if all the baggage hanging over Netflix will not allow them to recover and prosper again. My vote is for Verizon to consider a Hulu acquisition but should it be Netflix, the first order of business would be to roll back the pricing model, market to all former customers with an additional special incentive, and consider rebranding. How does NetFios sound?
As video consumption shifts more and more from DVD to online, so too changes the consumer preference to either own or rent. Studios pushing the sale strategy are pushing consumers with cloud ownership of digital copies with every DVD sold. And of course Apple and Amazon are there as well with their cloud strategies.
The movie rental business has been shaken up in recent months with the various missteps made by Netflix. And Blockbuster is trying to refocus their business with the help of their new owners Dish/Echostar. So now Verizon is considering making a play for Netflix and perhaps to help them re-establish their formal glory. "Chief Executive Officer Lowell McAdam told an investor conference on Dec. 7 that the company aims to move beyond its Fios TV service into the streaming-video business." And while the speculation is that Netflix is on the Verizon radar, why isn't Hulu also being considered. Hulu has indicated an interest in being sold while Netflix has not. Both require bandwidth that Verizon can support and Hulu offers a duel revenue stream of subscription and advertising. Plus Hulu doesn't have the burden of mailing DVDs and could support a theatrical film streaming service expansion.
Yes, I like the idea of Verizon pursuing a streaming distribution strategy. I just wonder if all the baggage hanging over Netflix will not allow them to recover and prosper again. My vote is for Verizon to consider a Hulu acquisition but should it be Netflix, the first order of business would be to roll back the pricing model, market to all former customers with an additional special incentive, and consider rebranding. How does NetFios sound?
Monday, December 12, 2011
Don't Write Off The Kindle Fire Or Amazon Just Yet
Today's New York Times' article might have left you feeling that Amazon's Kindle Fire was a failure. Sure there are complaints but that is not unheard of in this new unknown space. The tablet is still a very young product that has yet to reach its full potential and first generation problems can be cured if Amazon stays front and center with its customers. Empathize with them, recognize the inherent problems and come back ASAP with solutions; some may need to be short term fixes, others long term changes, but by being honest and agreeable with the customer, Amazon will retain them and continue to grow their share of the business. "Despite Amazon’s silence on the matter, analysts have been estimating the company will sell from three to five million Fires this quarter."
Amazon still needs to speak up loudly. Again history being a guide, how Tylenol quickly reacted t their packaging challenges many years ago enabled them to survive through a PR nightmare and remain a dominant brand. It is that truthfulness and commitment to act that can save or bury any brand. Even successful companies have made missteps. "All this would be enough to send some products directly to the graveyard where the Apple Newton, the Edsel, New Coke and McDonald’s Arch Deluxe languish. But as a range of retailers and tech firms could tell you, it would be foolish to underestimate Amazon." In fact, as many have seen, we learn much more from our failures than from our successes. Unfortunately some companies are not as quick to manage their mistakes. Look no farther than Netflix and the troubles they have had.
Amazon and the Kindle brand have built a ton of loyalty over the years just as Apple has had with its products. Communicating with that audience and managing that trust in a proactive way while resolving technical issues is the ultimate PR cure. Especially as articles, like the one in the NYT, appear. Otherwise, the opinion in the article's first two lines will be recited over and over again as fact..."The Kindle Fire, Amazon’s heavily promoted tablet, is less than a blazing success with many of its early users. The most disgruntled are packing the device up and firing it back to the retailer." And that is not the kind of perception Amazon wants to have floating around.
Amazon still needs to speak up loudly. Again history being a guide, how Tylenol quickly reacted t their packaging challenges many years ago enabled them to survive through a PR nightmare and remain a dominant brand. It is that truthfulness and commitment to act that can save or bury any brand. Even successful companies have made missteps. "All this would be enough to send some products directly to the graveyard where the Apple Newton, the Edsel, New Coke and McDonald’s Arch Deluxe languish. But as a range of retailers and tech firms could tell you, it would be foolish to underestimate Amazon." In fact, as many have seen, we learn much more from our failures than from our successes. Unfortunately some companies are not as quick to manage their mistakes. Look no farther than Netflix and the troubles they have had.
Amazon and the Kindle brand have built a ton of loyalty over the years just as Apple has had with its products. Communicating with that audience and managing that trust in a proactive way while resolving technical issues is the ultimate PR cure. Especially as articles, like the one in the NYT, appear. Otherwise, the opinion in the article's first two lines will be recited over and over again as fact..."The Kindle Fire, Amazon’s heavily promoted tablet, is less than a blazing success with many of its early users. The most disgruntled are packing the device up and firing it back to the retailer." And that is not the kind of perception Amazon wants to have floating around.
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