Big Brother, No Really Big Business, Is Watching

When George Orwell wrote 1984, he may have been concerned that government was watching individuals. Perhaps if there was a modern rewrite, the issue would be that big business is watching and tracking our online movements. In today's news, Google is the one with their hand in the cookie jar. "Google has been "tricking" Apple's Safari browser into letting Google monitor Apple users' web-surfing behavior, the WSJ reports--even users who want this kind of tracking to be blocked." But they are not the only one out there.

With our "permission" or not, we are being tracked. On our smartphones, we are encouraged to let apps track where we physically are, when we surf the web, we are tracked on what we watch and read, and on cable, on what we watch on TV. And sophisticated programs take that data and predict what interests us and targets ads that may appeal to us.

Helpful or not, we are no longer invisible to big business. As we have become an online, mobile consumer, we no longer seem to mind who is tracking us; in fact, we are even sharing pieces of ourselves on social media sites. The thinking seems to be that as long as our financial data isn't compromised and it doesn't cost us anything, we are unconcerned. This news about Google doesn't seem to be getting much consumer response, but perhaps we should be more outraged.

Can Comcast Winback Cordcutters?

Comcast shared some exciting fourth quarter news and the stock market likes what it hears. It reported its lowest drop of cable customers along with an increase in broadband and telco subscribers. "Speaking to investors Wednesday morning, Comcast CEO Brian Roberts attributed the declining defections to added channels and better customer service. He also said that as housing growth improves, actual subscriber growth may return, too." Is the combination of an aggregate of content networks combined with a broadband pipeline enough to stem the loss of cable subs? Will a better economy cause consumers to return to Comcast or will basic losses continue to persist because the cost is too high to justify and alternative content platforms serve their purpose?

As competition for broadband service remains limited, compelling packages of cable subscription with broadband may just be enough to reverse the cord cutting trend. Once you add up the costs of individual premium services - Roku, Netflix, Amazon Prime, Redbox, with the cost of a streaming platform, the overall cost may just exceed the packaged cost from cable. And perhaps it comes down to access to the latest and greatest available content on cable verse older library content that the other streaming services provide.

Will 2012 prove Comcast right that the trend of cord cutting has reversed and basic subscribers will return to cable or is the Q4 2011 small loss simply a temporary pause in the deepening crack in the dam? We can only wait and see.

Does The FCC Want Competition In Telecommunication Or Not

First the FCC bans the merger of AT&T with T-Mobile because it will reduce competition in the telecommunication space; yet, now it bans LightSquared from moving forward despite the fact that it can increase competition and add to the economy. "A proposed wireless broadband network that would provide voice and Internet service using airwaves once reserved for satellite-telephone transmissions should be shelved because it interferes with GPS technology, the Federal Communications Commission said Tuesday." Not having an engineering background, I can simply ask, is there not room for both?

As companies are pursing new streaming businesses, the demand on the current infrastructure is becoming stressed. Current broadband and mobile companies want to change the all-you-can-eat system to usage data billing, and costs for streaming will only steadily rise. Alternative distribution choices, like LightSquared, hope to keep the system in check. But without them, consumers face a limited choice of businesses to choose from for their wireless access.

Just yesterday, IAC introduced Aereo, a new service to stream broadcast television signals to multiple platforms and devices. While the fee for the service may be low, it still relies on a wireless service to enable the connection. And cable companies that provide broadband and cable will no doubt want to charge a ton more for broadband only customers. Wireless providers also want to charge us for access to their 4G sytream. No doubt bundled services from cable and telco will make their package pricing a better value than for customers buying services a la carte.

And without a competing national wireless provider, like LightSquared, how can they consumer build their best valued combination of distribution and pipeline providers. If the FCC truly wants to enhance competition in the wireless space, why aren't they doing more to enable it? Encourage competition or not, but make up your mind!

The @Home Brand Is Coming Back

Twenty years ago, a joint venture of TCI, Cox, and Comcast formed a high speed broadband business to get homes on the web faster than dial up. It was known as Excite@Home but like other cable joint ventures, it had difficulty operating. But it started a trend. Email addresses ended with @home and AOL and Prodigy were being usurped by broadband. This venture ended a decade ago and each cable company moved over to their own exclusive broadband business. With it came the rise of triple play - cable, telco, and broadband and a new revenue stream. The Exite@Home company was quickly forgotten by most consumers.

Well it seems Google is ready to resurrect the brand name. "Among the projects, revealed by a review of public records by this newspaper, are a lab to test a new consumer product under the brand name '@home' that will wirelessly stream music or data to other household devices, apparently similar to a prototype home audio service Google demonstrated publicly last year." Despite the similar name, I doubt most consumers even remember the first @home incarnation. It is clear that Google has their eyes set to compete with Apple in the product and wireless streaming space.

Apple Over $500 A Share As New Upgrades Expected

As Apple shares closed over $500 for the first time, investors are excited for new releases of their tablet and smartphone. "It was the latest step in a rally that began more than two weeks ago, when the company reported staggering sales and profits for the holiday quarter." An iPad 3 is anticipated to be released next month as the iPhone 5 later this Summer. Rumors abound on what these next iterations will look like. And as consumers pick up these devices, they are sucked into the Apple brand and thus encouraged to also purchase laptops and other Apple products. And frankly it is hard to buy just one. An Apple device for every member of the family, from ipods to iPhone, iPads and laptops. Our homes are looking like an Apple showroom. And as Apple keeps innovating, we continue to want to own the next generation of product. As long as Apple keeps getting it right, the stock price should continue to soar.

Capitalize On The Digital Trend Or Get Left Behind

There are those businesses that are unwilling to see the trend and commit to change before it is too late. Kodak most recently comes to mind as a company that actually invented the digital camera but was afraid to commit to it for fear of losing its film business. Well they lost their film business anyway and are now bankrupt.

The same holds true in the TV business as other platforms for entertainment have grown. There is one thing that will never change. There are only 24 hours in a day. And a good portion of that is spent sleeping. The reminder is divided numerous activities including our entertainment needs. And that time with the TV set has changed. "Americans ages 12 to 34 are spending less time in front of TV sets, even as those 35 and older are spending more, according to research that will be released on Thursday by Nielsen, a company that tracks media use."

Clearly the younger demo is more relevent as their behavior will be tracked longer. "It has long been predicted that these new media would challenge traditional television viewing, but this is the first significant evidence to emerge in research data. If the trends hold, the long-term implications for the media industry are huge, possibly causing billions of dollars in annual advertising spending to shift away from old-fashioned TV."

Cable companies are striking deals to give content access to "authenticated" customers to multiple devices. Most of those devices though are restricted to inside the home. Still it is a first step in keeping customers engaged with their distribution across multiple platforms. Next step though is similar access away from the home. At the same time, this younger base is questioning the value of that product. WHile triple play is valuable to an older demo, the younger generation cares less about a hard line phone; those needs are handled by their smartphone. They care most about broadband access, but whether that comes from their cable provider or from a 3G or free WIFI access will continue to determine who gets their entertainment dollar. And as long as these customers buy a broadband subscription from their cable operator, cable companies should remain profitable.

Content Remains King as Time Warner, Fox, Viacom All Grow

Content is King in this entertainment world. Smart content creators that recognize the mantra to "follow the customer" have recognized that they are being led to digital media. What you watch, where you watch, when you watch, and on what device you watch. And it is these content creators that are finding success as distribution platforms attract audiences. Thos that do are rewarded; those that don't only see their revenue decline.

So it is valuable to note that the financial news from Time Warner, Fox, and Viacom indicate growing deals with new media providers. Yes to traditional distribution outlets, and yes also to deals with Netflix, Amazon, Hulu, Apple, and others. DVD profitsmay be suffering but streaming is advancing. Customers are buying subscriptions and seeking content for their tablets, smartphones and laptops, as well as their TVs. They are still purchasing and consuming content; it is simply in new forms.

The latest deal, with Viacom and Amazon, offers Amazon Prime subscribers "access to TV shows from MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo". The more content being offered, the more value perceived, the more desire to subscribe, and hopefully more satisfaction. How exclusive this deal is and how it affects Netflix, Hulu and others remains to be seen. Still, Viacom is not the only content company and opportunities still exist to make content deals.

And this new intersection of content and distribution offers new revenue opportunities to draw from. Most importantly, it is necessary to not view these new platforms as a zero sum game. The TV experience will not go away and customers will work best with those distributors that offer them the content they want on the screen(s) they want. The only thing that will kill it is pricing access at a point where viewers move to the next best value proposition.

MSG Drop On Time Warner Cable Not An Issue

Despite not carrying the MSG Network since January 1, Time Warner Cable seems content with not pursuing a renewal agreement. With a shortened NBA season and teams that aren't as competitive as in previous years, the effect on subscription may just be negligible. And to demonstrate just how low a concern this seems to be, "MSG Media president Mike Bair told analysts Wednesday, adding that no meaningful discussions have occurred between the parties since the network went dark on TWC systems in New York on Jan. 1." Once TWC dropped MSG it was simply time to move on to other deals. Will negotiations ever ramp up; it may not be an issue once the basketball and hockey season ends in a few months.

Another News Channel Competing For Attention

Move over CNN, Fox, Bloomberg and MSNBC; watch out online, another news operation may be forming. With the Hispanic population growing, and third generation Hispanics speaking more English while staying in touch with their Hispanic routes, a new need may have been uncovered. ABC and Univision are talking about combining their news operations to create an English language cable news channel with a Latin attitude.

"The new channel would tap into the growing population of English-speaking Hispanic viewers, a source noted. That demographic has been fueling ratings for Univision and rival Telemundo in recent years." Brilliant! Will cable operators pay a fee? With the need to capture this segment of population, offering this channel seems a no-brainer.