Digital Growth Driving Media Spending

It seems that digital pennies are becoming digital dollars.  The pace of digital spending continues to grow and there are more opportunities than ever before for media to target efficient audiences and effective reach.  And this annual growth is huge.  "The fastest growth by far is in Consumer Internet & Mobile Services, tipped to swell 18.1% in 2012."  Certainly the pace is poised to accelerate as other segments embrace the web.  Print publications, newspapers, magazines, and books, are pushing more consumers to the tablets and computers.

In fact, David Pogue's article in The New York Times discusses plans for the five big magazine publishers to come together for a buffet of digital magazines that consumers can receive for a low monthly price.  While the price point, $120 - $180/year, doesn't yet sound attractive enough for consumers to purchase, it will initially reach the early adopter and heavy users of multiple magazines as they test the price elasticity for their mags.  It is a good start.

Consumers are becoming more and more accustomed to paying for digital content, whether it is music or e-books, movies, newspapers, and magazines.  As advertising has been everywhere, consumers are not even surprised when it invades devices like our mobile phones.  Whether we have become so overwhelmed by the number of messages flying at us that we ignore 95% or more of them is a topic for another day.  How marketing messages break through the clutter to gain are attention becomes the challenge for today's marketer.  But as the article forecasts, dollars are being spent.

Facebook Should Keep Buying Companies

Terrific article in today's Wall Street Journal posing the question in its headline, What Facebook Should Buy Next.  Company acquisitions, both for the acquiring company and the one being acquired, requires great work to integrate and grow.  Different cultures, different core missions, different executives all trying to blend together into a new union with a common goal.  Some acquisitions are successful; others like Fox's acquisition of My Space, prove disastrous.

Google is figuring out what they need to do with their acquisition of Motorola Mobility.  The former is a search engine and open software company, the later a hardware manufacturer.  Time will tell whether a blended company will work or if Google will sell off the pieces that don't matter to their business.  Facebook will now take on Instagram; but the question posed for Facebook is what else should they being doing to grow.

I love the direction that the author is taking.  If content is king and if Facebook has rich data on users, the next piece is the content to drive the advertising engine.  "Facebook should buy ABC, CBS and NBC. It should buy the New York Times website and the satellite radio broadcaster Sirius XM. It should buy a stake in Microsoft's search engine Bing. It should buy Pandora, Spotify, Hulu and any other digital platform where Facebook can follow users and hit them with targeted ads using their Facebook data without it seeming like Facebook is doing it."  Add to that any number of large cable networks too; the end result is that owning the content with the social engine of Facebook could be a boon to advertisers.

The question is can Facebook do more with their data by owning content then they do now as a third party linking to all content across all platforms.  Does ownership imply that their are other hurdles that could be best  managed when linked together by common management?  If it takes ownership of a content brand to unlock that value, then it sounds like a good investment.  But if it can't be better quantified, than perhaps the current relationship just needs to be further tweaked and improved to unlock that consumer information to the content they consume, owned or not by Facebook.

Cable Pricing Itself Out Of The Consumers' Budget

The rising cost of cable programming, especially sports networks, may be to blame for the high cost of cable subscriptions and the drop in consumer purchases.  According to NPD Group, cable monthly fees have risen on average 6% annually while consumer income has remained flat.  "The dramatically rising cost of pay TV could lead to more consumers cancelling service in favor of more affordable over-the-top video services and free-to-air broadcast, NPD said."

Certainly consumers have sought ways to lower their costs, from downgrading services and switching to lower cost providers.  At the same time, ask a consumer which cable service they couldn't do without and it would be broadband.  Consumers may drop their cable service for broadband only and take advantage of over the top programming through web based devices.  Cable operators may be watching their business model change from pushing cable programming to pushing wire and wireless connectivity. With profit margins favoring broadband subscriptions, a gained broadband subscriber can more than offset the loss of a cable subscriber.

Xbox and MLB.TV Don't Go Well Together

I have a beef so I will use today's blog to complain about Xbox and MLB.TV.  First Xbox, while it is technically my box, it was bought from my credit card, it was a gift for my son.  But the result of being honest and putting his true birthdate on the account has been more problematic than helpful.  Microsoft and their Xbox machine may think that they are preventing underage usage of certain apps and games, but it only works to prevent all from enjoying the full capabilities of the machine.  And according to Microsoft, birth date once entered can never be altered.

Some may argue that it provides security from buying or playing certain games.  That is not true.  Those in the know all ready know to not use a true birth date; honest folks only learn later that they have lost their own parental right to determine what their child can or cannot play.  Game Stop asks me each time my son wants to buy a Mature game if I approve; Microsoft does not.   And it is my credit card info and my password that should enable me to allow or not allow any online download.

So my recent hassle with Xbox concerned our MLB.TV subscription.  I can play my baseball games on the iPad but to play them on the Xbox was not nearly as easy.  It seems that my son's birthdate has once again stopped us from enjoying content.  You see, no one under the age of 18 can have an MLB subscription on Xbox.  My MLB subscription, my son's LIVE  Xbox subscription don't match.  Who knew that baseball games were now considered "for mature audiences only".  And so, we were back to watching the baseball game on the iPad and disappointed that the Xbox MLB TV app would not function properly.

So my advice to all parents buying a Xbox for their child; use your birthdate not your childs.  Make them 40 and then you can be the one to ultimately decide what you want them to play and watch on their Xbox account.  And I am left trying to teach my son not to lie, except to Xbox.

Apple TV To Be Called The iPanel

We all love Apple rumors.  The latest is that the Apple TV will be called the iPanel.  Love the name but the challenge will be in what kind of content it can offer without the need for a set top box behind it, and whether the consumer will want to buy it.  The article suggests a price point of $1250 with an expectation that 2 million units at a 30% profit margin could be sold.

At the same time, rumors are that a smaller screen iPad is on the drawing boards.  Halfway between an iPhone screen and current iPad, a mid size screen at a lower price point could be quite appealing.

Cable Nets - That Was Then, This Is Now

Today's list of cable nets weren't always known by their current names.  Some moved from names to letters, others from one name to another.  And for some, the names and focus continue to change.  The most recent news comes from Discovery Channel who is giving a name change to Planet Green.  Prior to that  incarnation, they were known as Discovery Home and beginning on May 28, they will be known as Destination America.

Will this new brand name finally catch hold, we can only wait and see.  In the meantime, here's a list of other networks that have changed their name.  It is not a complete list so go ahead and add other names in the comment section. As too many nets changed from names to initials, I will exclude those from this list.

Then And Now
Discover Health ... OWN
Movietime... E!
Financial News Network ... CNBC
Court TV ... TruTV
The Comedy Channel and Ha! ... Comedy Central
SciFi ... SyFy
Romance Classics ... WeTV
ZDTV ... TechTV ... G4
CBN Cable Network ... The Family Channel ... Fox Family ... ABC Family
CNN2 ... CNN Headline News ... HLN

So long Planet Green.  We hardly had any time to watch ya.

Does Too Big Help Or Hurt The US Economy?

Today's opinion article in the Wall Street Journal, "How Huge Banks Threaten The Economy" could easily be applied to every other oligopoly operating in the economy.  Certainly, we have all felt the effects that the banks have had on the housing market and mortgages and how the US Government was needed to protect them as they were "too big to fail".  The editorial position is that too big is anti-competitive and that small can "improve competition and market discipline, important forces that were reduced as the industry consolidated."

So should this movement to limit consolidation be applied to other industries?  If we are consistent in our approach, then shouldn't the same principals be applied to the wireless industry.  The FCC did stop AT&T from acquiring T-Mobile but they haven't stopped Verizon and AT&T from having the majority of the market.  Wasn't the break up of AT&T into the Baby Bells that first step only to find the Baby Bells merging into a bigger powerhouse than the original parent.

We've seen consolidation in the airline industry too.  United has merged with Continental and USAir wants American.  The result, less competition and higher fares.  Like the banking industry, the airlines have little competition to alter the marketplace.

And what about the consolidation of cable operators.  Time Warner Cable just acquired the assets of Insight Communication.  Comcast, Time Warner, Cox, Charter, and Cablevision have risen to control almost the entire marketplace.

Each of these industries and company leaders would tell you that big drives employment, innovation, cost efficiencies, and better products.  They would argue that government interference only hurts growth and profitability.  Of course in the case of the banks, without the bailout, most may have gone bankrupt and the economy might have been ruined for a decade or longer.

Limiting the size of companies within industries may be a noble attempt, but eventually the big fish always eat the little fish and subsequently keep getting larger.  Just like the breakup of Ma Bell tried to make the communication smaller, it eventually led to consolidation again.  We may think that small is preferable; but eventually, companies either get bigger, get acquired, or go out of business.

Clash Of The Morning News Titans

For those that are fans of the morning news shows, the big story this week has been the return of Katie Couric to a morning co-anchor role; this time however, it is with a different network, ABC and Good Morning America. NBC's Today Show countered by bringing back another former host, their own Meredith Viera, as well as Sarah Palin.  And CBS, pushing with a rare guest  appearance by Oprah Winfrey.  Who needs soap operas when the drams is on which morning show will win the ratings for the week.  Will NBC finally lose its ratings dominance after an extremely long period on top of the leader board?

My wife and I are regular Today Show viewers. But frankly, we have gotten a little tired of the format.  We are in want of more news at the 7 am hour but instead get hit with more programming oriented or other non news interviews.  The personal stories, especially when Ann interviews a guest, have become hard to watch.  She takes on a different voice when she wants to show empathy, but frankly I find it more cringe worthy.  But the Today Show problem is larger than Ann.  It has become about hype not news stories.  The personalities of Al and Ann on screen have  become  larger than the news itself.  And I have struggled to stay tuned in.

Seeing Katie back on the air caused me to switch over and watch.  But beside her, the stories and the way they were hyped and presented, looked almost identical to the Today Show approach.  ABC may see a lift this week, but I don't believe that many will switch over permanently from NBC.

Phone Hacking Gets James Murdoch To Resign, Is Rupert Next?

The British phone hacking scandal that resulted in the closing of News Of The World has claimed another victim.  This time it is BSkyB Chairman James Murdoch, son of Rupert Murdoch.  The phone hacking issue continues to have legs and has not been forgotten; rather, it may truly indicate that more was going on than was first announced.

"The phone-hacking revelations have led to an ongoing public inquiry, conducted by Lord Justice Leveson, into the culture and ethics of the British press.  Mr Murdoch and his father Rupert are expected to give evidence to the inquiry in the coming weeks."  Could that lead to another resignation?  Perhaps more was known from the  top leadership than initially announced.  We can only watch as the drama continues to unfold.