As Barnes and Noble tries to fight Amazon in the digital hallways, Amazon is fighting back by competing head on with a brick and mortar retail presence. "Quidsi, an online retailer Amazon acquired in 2010, opened its first retail store in Manhasset, New York, last year to sell expensive cosmetics and perfumes under the BeautyBar name.
Amazon also plans to open a physical store in its home town of Seattle in coming months to showcase and sell its growing line of gadgets, including the Kindle Fire tablet, industry blog Good E-Reader reported this weekend."
Despite the e-commerce push, retail still seems to matter and Amazon recognizes that stores count. B&N has a great physical presence, one that will take Amazon years to emulate; at the same time, B&N has to figure out how to evolve it into the next winning formula. It is what JC Penny is doing by taking Apple's retail guru to update its stores. B&N must do the same as well. Amazon recognizes that retail is a component of success.
Monday, February 6, 2012
Friday, February 3, 2012
Still No Knicks/Rangers For Time Warner Cable Customers
Tom Brady announces that he watched last year's Super Bowl from an illegal website and Time Warner Cable customers may be needing these sites with their MSG Network cut off their air for over a month. So in wanting to watch their beloved Knicks or Rangers, they most likely are also watching through these sites as well. Well I guess it has gotten a little tougher. "Investigators seized 16 sites and brought criminal charges against a Michigan man who controlled nine of them."
As the TWC and MSG dispute continues, no NY doubt sport fans are seeking alternatives like these websites to watch their games. And as these sites are stopped, will others simply pop up and take their place.
As the TWC and MSG dispute continues, no NY doubt sport fans are seeking alternatives like these websites to watch their games. And as these sites are stopped, will others simply pop up and take their place.
The Cost Of Streaming
Let's face it, we are becoming data hogs. With our tablets, e-readers, smartphones and laptops, we are consuming more and more data. Cell phone companies want to charge us more for our exceeding our monthly use and broadband companies would like to charge us like a utility. The buffet may soon end as our streaming habits grow and each piece of content requires more data in it. This is especially true with video and the move toward streaming HD content.
There are a number of solutions. We could reduce our usage although that seems unlikely, especially as more connected devices are being manufactured and bought. The cell companies want us to use WIFI as much as possible to avoid their caps and usage bills. A short term fix but eventually even free WIFI may one day come to an end. Or rely on more innovation to make our streaming and downloading less bulky and more efficient.
Netflix is doing just that and I wouldn't be surprised to see more companies join in. "The movie and TV show streaming company is the first client of Palo Alto-based start-up eyeIO, a maker of a video encoding system it claims reduces the bandwidth needs of Netflix streams by more than 50 percent without sacrificing picture and sound quality." That is a significant improvement for the moment but in a few short years, as users and usage doubles, a quantum leap must occur to vastly improve streaming efficiency. For the moment eyeIO seems the company to bet on for a better streaming experience and lower broadband costs.
There are a number of solutions. We could reduce our usage although that seems unlikely, especially as more connected devices are being manufactured and bought. The cell companies want us to use WIFI as much as possible to avoid their caps and usage bills. A short term fix but eventually even free WIFI may one day come to an end. Or rely on more innovation to make our streaming and downloading less bulky and more efficient.
Netflix is doing just that and I wouldn't be surprised to see more companies join in. "The movie and TV show streaming company is the first client of Palo Alto-based start-up eyeIO, a maker of a video encoding system it claims reduces the bandwidth needs of Netflix streams by more than 50 percent without sacrificing picture and sound quality." That is a significant improvement for the moment but in a few short years, as users and usage doubles, a quantum leap must occur to vastly improve streaming efficiency. For the moment eyeIO seems the company to bet on for a better streaming experience and lower broadband costs.
Thursday, February 2, 2012
Facebook IPO - A Stock To Buy?
Investors seem to be going gaga over the initial public offering of Facebook (FB). While institutional investors and will be first to buy, should the average investor get in early or wait for the early hype to die down? And ultimately will Facebook become the next Google or Apple in terms of rising stock value or a dud like My Space became for News Corp? The one thing for certain, on paper, Mark Zuckerberg will become a very rich man.
"Facebook mostly depends on display advertising, which amounted to $3.154 billion in revenue during 2011. However, revenue from sources other than ads have grown from 10 percent a year ago to 17 percent today. The documents also reveal that Facebook is highly dependent upon its partnership with Zynga. Zynga accounted for about 12 percent of Facebook’s revenues in 2011, as the leading third-party developer also generates a large number of pages that the social network displays advertising on, according to the filing."
Has Facebook overcome the hurdle and moved from fad to necessity? The numbers indicate that users still frequently visit their FB page as well as use it as a portal to online games. But what if Zynga no longer wants to play in the sandbox with FB? Or we become more reliant on our other iPhone apps for casual gaming and bypass FB. Or will the continual changes on the FB screen or issues with personal security finally turn us away from FB. We are a fickle bunch that could drop FB for the next big thing. Is FB here to stay?
That is the risk of the stock market, forecasting the future of a company based on present information. For those that believe that Facebook has more room to conquer and new revenue opportunities to expand on, the stock price will continue to reflect a positive direction. But if one expects that the lower barrier to entry into the digital world means that it is easier to compete in the social and gaming media space, and that consumers can switch their loyalty in a heartbeat, then a FB investment may not be as profitable as other investments.
"Facebook mostly depends on display advertising, which amounted to $3.154 billion in revenue during 2011. However, revenue from sources other than ads have grown from 10 percent a year ago to 17 percent today. The documents also reveal that Facebook is highly dependent upon its partnership with Zynga. Zynga accounted for about 12 percent of Facebook’s revenues in 2011, as the leading third-party developer also generates a large number of pages that the social network displays advertising on, according to the filing."
Has Facebook overcome the hurdle and moved from fad to necessity? The numbers indicate that users still frequently visit their FB page as well as use it as a portal to online games. But what if Zynga no longer wants to play in the sandbox with FB? Or we become more reliant on our other iPhone apps for casual gaming and bypass FB. Or will the continual changes on the FB screen or issues with personal security finally turn us away from FB. We are a fickle bunch that could drop FB for the next big thing. Is FB here to stay?
That is the risk of the stock market, forecasting the future of a company based on present information. For those that believe that Facebook has more room to conquer and new revenue opportunities to expand on, the stock price will continue to reflect a positive direction. But if one expects that the lower barrier to entry into the digital world means that it is easier to compete in the social and gaming media space, and that consumers can switch their loyalty in a heartbeat, then a FB investment may not be as profitable as other investments.
Wednesday, February 1, 2012
Could A Broadband MSO Replace A Cable MSO?
A terrific read in Light Cable Reading of the rise of Virtual MSOs. If the definition of an MSO is one that aggregates and bundles licensed content and then resells to subscribers, then we may not find one that will offer the same abundance of content as cable. Most of the best networks license their content based on volume and the costs to get these providers to deliver the same content at rates being offered for MSOs the size of Time Warner or Comcast is quite unlikely. The rate per sub for reaching 10 million customers is far less than the rate per sub to a smaller MSO with say 1 million customers.
But the world of the virtual MSO aggregating content via the broadband platform may not need to duplicate cables' lineup. Rather, it simply needs to enable the connection. Xbox, Boxee, Tivo, and other OTT devices already use broadband to watch content from YouTube, Netflix, Hulu, and other streams. In essence, a "virtual MSO". TV manufacturers are doing the same to create a "connected" TV. And Boxee is enabling their box to bring digital broadcast signals to the TV set. Between these channels and streaming web programming, an alternative aggregator has been enabled already.
Still, if it is about duplicating the cable programming line-up, the costs must be absorbed until the "virtual MSO" gets up to a significant number of active subscribers. Perhaps the NCTC (National Cable TV Cooperative) would be willing to take one of these new entrants into their group. "There's seemingly no shortage of candidates that have the scratch, and perhaps the will, to give it a go. Not Microsoft (see above), but maybe Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) or Amazon." The one concern for a customer switching to a "Virtual MSO", they still have to pay their current broadband/cable provider for their broadband service. And no doubt that broadband cost would rise should they drop their cable service.
But the world of the virtual MSO aggregating content via the broadband platform may not need to duplicate cables' lineup. Rather, it simply needs to enable the connection. Xbox, Boxee, Tivo, and other OTT devices already use broadband to watch content from YouTube, Netflix, Hulu, and other streams. In essence, a "virtual MSO". TV manufacturers are doing the same to create a "connected" TV. And Boxee is enabling their box to bring digital broadcast signals to the TV set. Between these channels and streaming web programming, an alternative aggregator has been enabled already.
Still, if it is about duplicating the cable programming line-up, the costs must be absorbed until the "virtual MSO" gets up to a significant number of active subscribers. Perhaps the NCTC (National Cable TV Cooperative) would be willing to take one of these new entrants into their group. "There's seemingly no shortage of candidates that have the scratch, and perhaps the will, to give it a go. Not Microsoft (see above), but maybe Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) or Amazon." The one concern for a customer switching to a "Virtual MSO", they still have to pay their current broadband/cable provider for their broadband service. And no doubt that broadband cost would rise should they drop their cable service.
Cellular Verse WIFI, The Heart Of The Issue
What a great editorial in today's Wall Street Journal called The Wireless Equivalent of Fracking. In a wonderful analogy to the fracking process to release more natural gas, he offers a wireless comparison. "The mobile equivalent of fracking is Wi-Fi. Wi-Fi is free, unregulated spectrum, separate from the regulated spectrum that mobile operators buy from the government." And the most serious question he asked, why did the government need to block a cellular merger when access to WIFI is cheaper and becoming more abundant.
Web streaming is growing more steadily. Larger data files are being downloaded. Cellular monthly bills attempt to charge more for exceeding caps on usage. And these same companies remind us to use our WIFI often so as to not exceed their own caps. But be careful what you push; as WIFI becomes more prevalent and easier to stay constantly connected, consumers might just drop their cellular companies and communicate solely via WIFI. Hello Skype, goodbye AT&T cellular service.
Need a connection, sit down at your Starbucks. Waiting at the train station, chat through a Comcast or Time Warner Cable WIFI connection. In fact, a great added value for broadband cable customers to access the web away from their home. As more free wireless hot spots pop up, the need to be on 3G or 4G diminishes. Such a relief to listen to Pandora or watch a movie on Netflix without running up a cellular usage bill.
"Cellular operators offer the highest-cost path to the Internet; customers have both motive and opportunity to shift demand to other paths. The operators themselves have not been slow to figure this out. AT&T, the nation's second-biggest cell carrier, is also its biggest operator of Wi-Fi hot spots because it's a cheaper way to meet the data demand of its iPhone customers." So why worry that AT&T wants to buy T-Mobile? The cellular industry, like the cable industry, an oligopoly with fewer and fewer companies. But technological changes have meant that the cellular industry now has new competition from cable, and perhaps soon, Lightsquared. Rather than stopping the merger, the government should be working with other industries to encourage more investment in wireless alternatives. Cellular vs. WIFI, as costs for cellular usage rises, consumers continue to embrace their cheaper WIFI hot spots.
Web streaming is growing more steadily. Larger data files are being downloaded. Cellular monthly bills attempt to charge more for exceeding caps on usage. And these same companies remind us to use our WIFI often so as to not exceed their own caps. But be careful what you push; as WIFI becomes more prevalent and easier to stay constantly connected, consumers might just drop their cellular companies and communicate solely via WIFI. Hello Skype, goodbye AT&T cellular service.
Need a connection, sit down at your Starbucks. Waiting at the train station, chat through a Comcast or Time Warner Cable WIFI connection. In fact, a great added value for broadband cable customers to access the web away from their home. As more free wireless hot spots pop up, the need to be on 3G or 4G diminishes. Such a relief to listen to Pandora or watch a movie on Netflix without running up a cellular usage bill.
"Cellular operators offer the highest-cost path to the Internet; customers have both motive and opportunity to shift demand to other paths. The operators themselves have not been slow to figure this out. AT&T, the nation's second-biggest cell carrier, is also its biggest operator of Wi-Fi hot spots because it's a cheaper way to meet the data demand of its iPhone customers." So why worry that AT&T wants to buy T-Mobile? The cellular industry, like the cable industry, an oligopoly with fewer and fewer companies. But technological changes have meant that the cellular industry now has new competition from cable, and perhaps soon, Lightsquared. Rather than stopping the merger, the government should be working with other industries to encourage more investment in wireless alternatives. Cellular vs. WIFI, as costs for cellular usage rises, consumers continue to embrace their cheaper WIFI hot spots.
Tuesday, January 31, 2012
Content Companies Will Remain Successful As Viewership Patterns Shift
Consider this article from Deadline Hollywood a no brainer. The analyst cited is "encouraged by the prospects for TV Everywhere — where pay TV companies make it possible for subscribers to watch their shows on mobile devices." That content accessibility across different platforms will encourage viewership and new revenue models. But this assessment of the media marketplace does not apply to all big companies. While she has high hopes for Time Warner Communications, News Corp/Fox, and CBS, she has doubts about ABC/Disney/ESPN and Viacom. Noticably absent in the article is the other major broadcaster/content company. Is NBC/Comcast a different animal because they are the only one that is both a distribution and programming company? Does that help them or hurt them more than the others?
Ultimately, one has to believe that content is king should remain the mantra. Creating content that is compelling and can be monetized across multiple distribution platforms seems to be key. Being smart enough to recognize the shifts in viewing habits of the viewer is essential. The syndication market may change, the DVD market may drop, the mobile space may grow, second screens may gel, and new undiscovered platforms are pushing to be formed. Staying forward in those trends to ride the changes without getting stuck in the past will drive future revenue and profitability.
Ultimately, one has to believe that content is king should remain the mantra. Creating content that is compelling and can be monetized across multiple distribution platforms seems to be key. Being smart enough to recognize the shifts in viewing habits of the viewer is essential. The syndication market may change, the DVD market may drop, the mobile space may grow, second screens may gel, and new undiscovered platforms are pushing to be formed. Staying forward in those trends to ride the changes without getting stuck in the past will drive future revenue and profitability.
Is Improvement in Cable Basic Sub Losses An Oxymoron?
Financial reports are coming out for fourth quarter and Time Warner Cable has announced smaller losses of Q4 basic subs with broadband and wireline reporting increases. Other cable company announcements will follow but most likely they too will report losses in their basic sub numbers as well. Where are these cable cord cutters going? Both FIOS and U-Verse have reported increases in this same period.
But what I like most in reading these articles has been how these basic cable losses have been described, "improvement in basic losses" which means that we are still leaking water from the dam, but at a slower stream. Is this a trend that will lead to an eventual rebound in growth or just a slowness until another crack in the dam occurs and more subs flee?
My point is this, a loss is a loss, and saying that your are improving in the area of basic sub loss is like the classic George Carlin oxymorons, "Jumbo Shrimp", "Hot Water Heater", and my favorite "Military Intelligence". You may have seen a small slowdown, but the problem is not going away. Consumers are shopping for better deals, switching providers, or just dropping their cable service.
Will lower priced entry into basic packages work? Better access to networks and on demand programming on mobile screens, better service? Staying ahead of the curve and preparing for increased online competition are essential for cable operators to remain more than just a broadband pipeline to the home.
But what I like most in reading these articles has been how these basic cable losses have been described, "improvement in basic losses" which means that we are still leaking water from the dam, but at a slower stream. Is this a trend that will lead to an eventual rebound in growth or just a slowness until another crack in the dam occurs and more subs flee?
My point is this, a loss is a loss, and saying that your are improving in the area of basic sub loss is like the classic George Carlin oxymorons, "Jumbo Shrimp", "Hot Water Heater", and my favorite "Military Intelligence". You may have seen a small slowdown, but the problem is not going away. Consumers are shopping for better deals, switching providers, or just dropping their cable service.
Will lower priced entry into basic packages work? Better access to networks and on demand programming on mobile screens, better service? Staying ahead of the curve and preparing for increased online competition are essential for cable operators to remain more than just a broadband pipeline to the home.
Monday, January 30, 2012
Building A Broadband Channel Line-up To Compete With Your Cable Company
YouTube is building out its broadband lineup of channels and the question to cable operators is this, will a broadband channel aggregator divert enough subscribers and their viewership away from your cable line-up or will the TV Everywhere approach ultimately keep your cable subscribers engaged and paying?
Certainly a very serious threat by Google and YouTube is designed to attract and pull away viewership. Some of the channels being discussed seem very niche. But isn't that how cable first began before morphing into broader programming. Bravo was once high art, now it is pop culture. MTV is not music but young and hip lifestyle programming. In almost every cable networks' case, what started as a niche has grown into broader programming to increase ratings.
For YouTube, the initial channels may be limited in scope but are surely designed to expand and attract greater share as well. One such channel backed by IGN, a game publisher owned by News Corp, is to be called Start. Another is coming from Electus and IAC and will be a Food Channel. It will likely try to attract viewers that like Food Network on their cable line-up. YouTube is planning more than 100 channels to compete and perhaps cause cable subscribers to cut the cord.
Will these niche channels pose a threat to cable? Early on broadcast networks didn't pay attention to upstart cable either. But gradually, the broadcast viewership share was reduced as cable viewership rose. Is the same likely with the rise of these online channels? It is if cable operators and their respective networks don't embrace a TV Everywhere approach that offers authenticated viewers unlimited access to linear and on demand programming on any platform. And while some of this is enabled already for WIFI viewing "inside" the home, full accessibility must be granted to enable viewership anywhere and everywhere.
I believe full availability is necessary for cable to retain and maintain its base. Otherwise, consumers may perceive a choice and start preferring these online rising networks to limited cable only availability. While the quality of the programming online and on cable may get compared, the choice of access will be a non issue. Then it will be up to smart programmers and marketers to continue to innovate to keep customers watching and engaging with their respective networks across all platforms.
Certainly a very serious threat by Google and YouTube is designed to attract and pull away viewership. Some of the channels being discussed seem very niche. But isn't that how cable first began before morphing into broader programming. Bravo was once high art, now it is pop culture. MTV is not music but young and hip lifestyle programming. In almost every cable networks' case, what started as a niche has grown into broader programming to increase ratings.
For YouTube, the initial channels may be limited in scope but are surely designed to expand and attract greater share as well. One such channel backed by IGN, a game publisher owned by News Corp, is to be called Start. Another is coming from Electus and IAC and will be a Food Channel. It will likely try to attract viewers that like Food Network on their cable line-up. YouTube is planning more than 100 channels to compete and perhaps cause cable subscribers to cut the cord.
Will these niche channels pose a threat to cable? Early on broadcast networks didn't pay attention to upstart cable either. But gradually, the broadcast viewership share was reduced as cable viewership rose. Is the same likely with the rise of these online channels? It is if cable operators and their respective networks don't embrace a TV Everywhere approach that offers authenticated viewers unlimited access to linear and on demand programming on any platform. And while some of this is enabled already for WIFI viewing "inside" the home, full accessibility must be granted to enable viewership anywhere and everywhere.
I believe full availability is necessary for cable to retain and maintain its base. Otherwise, consumers may perceive a choice and start preferring these online rising networks to limited cable only availability. While the quality of the programming online and on cable may get compared, the choice of access will be a non issue. Then it will be up to smart programmers and marketers to continue to innovate to keep customers watching and engaging with their respective networks across all platforms.
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