Measuring TV Viewership Much More Complicated

Ahhh...the good old days of TV ratings.  Send out a survey books, ask households to tell demographic information about themselves, and to recall the shows they watched and who in the family watched them.  Mail back the form, aggregate and analyze the sample data, and predict what the whole nation watched.  Add phone call sampling to the mix and get a quicker sense which shows were watched.  But today it is no longer that simple.
Today there are a ton more viewing choices, linear views on broadcast or cable, DVR views, and On-demand views.  Households watch shows no longer live, but also hours, days and perhaps even weeks later.  They watch on televisions, computers, tablets, and smartphones.  And as each view is a digital click, they can be measured and analyzed.  And because all these devices affect ratings, their order and popularity can continue to shift. 

As for advertisers paying to get their commercials viewed with content, there are limitations.  "Total popularity does not perfectly correlate with profitability, however, since the networks all agree to sell ad time based on a metric called “C3.” It measures the average viewing of the commercials within a show within three days of the first broadcast, so it excludes people who wait to watch Wednesday’s “Modern Family” until Sunday or Monday."  Certainly the push is on to extend the time period, but until then, advertisers can consider  those extra views bonused; unless of course, that  impression is simply built into the price of the spot. 

The data may more accurately tell who has the TV on.  Whether they paid attention to the spot remains to be seen.  Certainly, the more creative the commercial, the more likely there will be buzz and views around it.  The Super Bowl ads certainly demonstrate that.       

Cellular And Broadband Want Usage-Based Pricing

AT&T wants to charge consumption of wireless usage; Time Warner Cable and others want to institute usage-based pricing for their broadband platform.  The all-you-can-eat buffet of streaming large files may be going away sooner than later as cellular and cable companies look for growing their connection revenue stream.  "While the way cable companies price and package products is changing, so will the way they are marketed, he (Glenn Britt, TWC CEO) added, especially broadband."  But the streaming pipeline is seen by the consumer as a commodity. 

Few can tell you just how fast one pipe is from the other; they simply can enable access or they can't.  And fewer still want to watch their meter every day to see how much they have consumed and how much is left in the month before they are penalized.  We have left the days where we looked at every long distance phone call and opted for a monthly unlimited price for all nationwide calls.  Asked to pay what we stream for broadband consumption seems a step backwards and one that will be met with heavy consumer dissatisfaction.

Apple Is Cheap

Interesting video on why Apple may still be a good cheap investment.

How High Can Apple Shares Go?

For those investors that bought Apple, and those that wish they did, the question being asked remains, how much is Apple worth. In the last year, it has traded for as low as $310 dollars per share and today at a high of $545. Today's article asks the question, how high can Apple reach with the figure of $1000 per share being the pinnacle to attain.

With an iPad 3 possible announcement next week and talk of Apple TV, Apple has a lot of products in the pipeline. It also has a huge cash reserve, and buzz regarding a possible dividend to shareholders. All this talk must make investors salivate. I like the fact that all products point to the iTune and App Store. And the simplicity of working with products is enhanced through connectivity through the cloud. Thus owners of iPads or iPhones will want to add an iMac to their home so as to take advantage of its easy sharing of data. An Apple consumer owns more than one of its products, consumes from its online store, and is slowly adding more devices and more connectivity in the home and among the family members.

Apple shares could certainoly hit a bump in the road, but as they have survived through a bad economic period of history and the death of its visionary, Steve Jobs, the future outlook appears brighter and more profitable.

It's Not Cord Cutting, It's Cord Switching

Customers love their TV content. But ask a cable company executive and they all point to a drop in basic subscribers quarter over quarter. They don't call it cord cutting; rather, a bad economy, unemployment, and low housing starts. Except those customers still want their TV content and they are in fact cord switching to telco and satellite providers. In fact, they have captured subs from cable operators as well as found new consumers, too.

"The growth was driven by telecom-based services AT&T (NYSE: T) U-Verse and Verizon FiOS, which added 208,000 and 194,000 video customers during the fourth quarter, respectively. Satellite companies DirecTV (NYSE: DTV) (up 125,000) and Dish Network (NSDQ: DISH) (added 22,000) also contributed to this growth." So while Comcast, Time Warner Cable, Cablevision, Charter and others lost basic subs, telco and satellite grew.

If the cable excuses hold, then the reasoning to why seems clear. Telco and satellite are offering similar services at a lower cost. Consumers may be regarding cable tv providers as a commodity industry and in such cases, the lowest price prevails. Cable companies have tried to adapt by building out lower priced entries into basic subscriber packages but it may not be enough for consumers to switch back.

And Cablevision in their recent Q4 financials announced that they may not even try this route. "Cablevision also will eliminate deep discounting for new customers, which should ease the financial impact on the company." It may lower costs, but it will lower revenue and sub numbers too. For now, they may not be cord cutting, but will only continue to switch to the lowest cost provider of TV services.

Should Broadband Usage be Priced Like A Utility

Homeowners don't seem to bat too much of an eye at their utility bills. Water, electicity, and gas bills come due monthly and we tend to not pay much attention to them unless the price changes radically. We know that prices are regulated and there is little we can do but watch how much water, electricity, and gas we use. They are tightly measured and unless there is a leak, they are secure.

But is broadband usage a different story? Should homeowners be expected to pay for broadband usage as others offer unlimited access? Can we be sure we are measured accurately and can we completely control how it is being consumed? As more and more content becomes accessible through the web and with pushes and notifications, we may be somewhat at the mercy of the app. True most content is not nearly as big as long form video content; still, we are getting more and more addicted to our web connectivity.

Unlike other cable operators, Time Warner Cable still wants to try and push through a broadband fee based on usage. While some try to throttle high users of broadband, Time Warner wants to incent low users to get measured by usage and receive a benefit for not using the web too much. They have a new test in the works. "Under the new pricing plan, consumers will get a $5 reduction in their monthly bill if they accept a cap of five gigabytes monthly." Of course, should they exceed their limit, they will pay a penalty. At only a $5 monthly savings, I find it hard to believe that any family would grab on to such a deal.

The wireless companies are all trying to get more dollars for usage billing. Unlimited access may become a thing of the past. Certainly cable would like to find more revenue by charging this way as well; Time Warner Cable may be the most aggressive, but others are watching the test.

Netflix Not About The Flix

Movie distributors are trying hard to save their business. The digital distribution field has changed the very model of how content is viewed. And pay content distributors like HBO, Showtime, and Starz walk a fine line in licensing content to cable operators, OTT providers, and other distributors like Redbox and Netflix. So when the latest agreement between Starz and Netflix expires, Starz has decided they don't wish to renew.

Netflix has used Starz movies as a driver to pursue subscribers. But knowing that this deal was not long term, Netflix determined that a better future may be in TV shows and original content. "TV series now account for more than half of all Netflix viewing. That helps to explain why this Wednesday — the long-awaited moment when motion picture classics like “Scarface” and newer hits like “Toy Story 3” will vanish from the streaming service — is not the doomsday that it was once expected to be."

This strategy for Netflix of focusing on original content is reminiscent of what HBO, Showtime, Starz, Epix and others are doing in the cable space. As movies move from one distributor to another, they no longer best represent the lifeblood of the network. Today, HBO is known for Sopranos and Game Of Thrones, Showtime for House of Lies and Dexter, and Starz for Spartacus. So naturally, Netflix needed to get into the same space with their own original series, Lilyhammer. How else to define a network than by the original series it represents.

The flix may be less a part of the Netflix brand, but it still remains a piece of the puzzle. As digital has lowered the barriers to entry and enabled more ways to access movies, it better suits Netflix and others to use original content, both TV series and original movies, to attract a loyal customer base.

Rutledge Sees Opportunity From Charter Homes Passed

With the lowest penetration of basic subs to homes passed in the industry, new CEO Tom Rutledge sees basic sub growth for Charter Cable. According to Rutledge, "It's got a huge runway in terms of opportunity and it can be a much larger company without any kind of change in potential marketplace."
With a coverage of 12 million and only 4.1 customers, a push to build out connections is necessary. But why haven't they taken advantage of the Charter offer in the past and what are customers currently using for cable, broadband and telephone. It is an obvious base to draw from, but a clear strategy to change customer habits is clearly needed. Do prospective customers have a pricing issue with Charter or is it service? Why have they been avoided and how do they overcome a possible negative sentiment. Its been a rocky ship that needs firm guidance to right.

Dish Aims To Be A Disruptive Innovator

Dish Network seems ready to compete in the next generation of connectivity. While subscription to its satellite service is growing again, it saw a yearly net loss of subs. It purchased Blockbuster Video Stores but is now ready to close 500 of them to concentrate on the streaming content business. And it sees the future of its operations as a wireless venture. "The company is awaiting approvals from the Federal Communications Commission that will let it to use the satellite spectrum it purchased from TerreStar Networks Inc. and DBSD North America Inc. to build a wireless network." To compete successfully against cable and telco, the push must be toward two way communication. A wireless network provides the backbone to compete on services to offer to the consumer and the home.

Dish's Chairman, Charlie Ergen, seems to relish this role. "'We have a history of being disruptive in the video business. I think we will be disruptive in the wireless business'", he said. With LightSquared future in doubt, Dish could be the ones to best offer a competitive package to the consumer seeking access to content and communication wherever and whenever they want. The wire is a nice tether when we are in the home; but outside, it, we want to roam free. Dish could just be a disruptive innovator to the current marketplace.