TiVo Adds Another Small Cable Operator To Its List

Can slow and steady win the race?  TiVo has announced another cable partnership, this time with GCI, the Alaska cable operator, with access to over 122,000 subscribers.  How many will upgrade and take a TiVo DVR set top box remains to be seen, although most consumers don't tend to switch out their box till something goes wrong.  So the effect on growth may prove minimal given the small base.

GCI can now be added to the list.  "In the U.S., TiVo also has agreements with Charter Communications, Suddenlink Communications, RCN and Grande Communications." Of course there is also DirecTv, but missing are the other notable names from the top cable distributors.  With a need to attract millions of cable subscribers, a GCI partnership is nice, I just wish it could move TiVo's subscriber needle more.

An Uncertain Future For Hulu

Whether it is in business or in the kitchen, the notion that too many chefs spoil the broth comes into play.  It seems especially true when these multiple owners have big input and even larger expectations to the business at hand.  A single owner, like a single chef, may take recommendations and other expertise into their decision making process, but ultimately, the final decision is a singular one.  So we face crossroads with businesses who face changing landscapes with multiple owners with different viewpoints.

Case in point, Hulu, and their majority owners News Corp and Disney.  NBC is also a major owner, but it's ownership to Comcast requires them to be now a silent partner.  As Provident Equity sells its shares, speculation is that so will it's current CEO Jason Kilar.  And with that sale could come his departure. "A second consequence of the Providence buyout is that the change in the ownership structure will precipitate significant adjustments to the content licensing agreements that give Hulu its most valuable asset: next-day access to primetime programming from the TV networks owned by News Corp. and Disney." But with two different philosophies regarding online video content, the future for Hulu could become murkier.

That Hulu is mentioned constantly with being a driver of cord-cutting could determine the new shape of how and when content is made available.  The Variety article asks some additional key questions facing the future of the company, including what kind of exclusivity will they get, what about international expansion, and how best to build additional revenue.  Can these media giants work together when they are historically competitors on other distribution fronts? Without key leadership and another owner that can balance the opinions of Disney and News Corp, conflict may interfere with progress.

The Long Term Fate Of Discount Deal Sites

I was recently asked about the business model of Groupon, Living Social, and other discount deal sites. The question posed was why would businesses discount their service AND pay a fee on top of it to advertise the fact.  Printed coupon book companies charge to print discounts, why shouldn't websites.  And maybe the reason coupons work and websites don't is that people forget to tear out or hold on to the coupon when they get to the store.  Pre-purchasing on the website makes them remember to use it.  Pl-us the discounts on these websites seem to be bigger to capture any substantial interest.  But does it drive new business or simply give existing customers a cheaper price to shop?

If the stock price is any indication, these website models aren't growing.  "Groupon Inc.'s shares slumped to $5 today — a new low that borders on penny-stock status — as investors continue to flee.  Top on the list of concerns is the company's slowing revenue growth, which is a problem for an Internet company whose story is supposed to be all about growth."  Slow growth in the web, yikes.

In general, websites are under scrutiny.  Like Groupon, Facebook is under pressure to perform for its shareholders as well.  Whether for these two companies and others like them, the focus is too short term or that the long term future bleak, remains to be seen.  For now, how Groupon can grow its revenue base without crippling the businesses that use it to reach consumers, remains to be seen.

Would It Matter If Your Cable Box Came From Apple?

Since the Steve Jobs bio came out, there has been speculation that Apple was going to enter into the TV marketplace; a new manufactured television or more refinement to Apple TV.  Well the news today is that Apple has  been talking to the big cable operators about an Apple branded set top box.  "Apple is wooing cable operators for an Apple-branded set-top box for live TV and other programming, according to a report."

Today cable subscribers rent their cable boxes; the challenge would be selling consumers a set-top box.  Others, like TiVo, have tried to enter this space with a branded, beautifully built, consumer friendly box, but cable operators have made it harder to easily integrate them.  The CableCard is a lousy solution.  Still TiVo has made slow and steady inroads with some operators. Google has entered the set-top box race with its purchase of Motorola but has yet to do anything to integrate Google in those boxes.  So one wonders whether it would make any sense for Apple to jump start their push into cable by purchasing Scientific Atlanta, now owned by Cisco, or even TiVo.

With cable operators contending with cable subscriber drops, an ally like Apple could help make broadband and cable a better integrative experience, encouraging consumers to want to continue to have both a broadband and cable subscription.  Apple's ability to integrate with its iPad and iPhone could make having an Apple set top box a must have device.

Is More Cable Network Consolidation In Our Future

We've watched as cable operators have merged and the landscape is dominated by a few distributors.  The list of departed cable operators is long including American Cable, Continental, Knology, Insight, and many others.  Today the top 5 operators dominate the country, With Comcast and Time Warner Cable accounting for most of the country. 

Consolidation is happening on the other side of the aisle too, in the content landscape.  Independent cable networks are few and far between as networks have been bought up into bigger media groups.  The latest rumor is that Scripps Networks Interactive, home for HGTV and Food Network, could be on the trading block with Disney the likely buyer.  "Already, Disney is in the process of proving that in contrast to media peers like News Corp, Viacom and Time Warner, it benefits from being a media conglomerate with a pool of assets that includes broadcast and cable networks, movie studios, theme parks and resorts."

It is the economic order as big fish continually buy up the little fish.  Certainly deeper pockets can help a smaller network to grow more rapidly.  It comes with hardship too as  network identities often have to broaden more and more to capture larger audience share.  Disney has done well so far, according to the report.  "In a media industry filled with bad mergers, broken synergy promises and assets that perform better independently, Disney is judged as having succeeded in its acquisitions of Marvel and Pixar, giving investors reason to believe that they have uncovered a rare winning conglomerate formula"  And companies that can successfully find synergies across their businesses are able to better exceed their goals. 

Competition in Tablet Space Intensifying

The wonderful thing about the economy, especially when there are more than a few competitors pursuing their share of the market, is watching how it follows general marketing principles.  Specifically in the tablet market, you have your market leaders pushing their differentiation strategy while others use a low pricing strategy to gain market share.

"New stats from market research firm IHS iSuppli show Apple’s iPad surging ahead of other media tablets to gain a 70 percent market share in the second quarter of 2012."  But not resting on their laurels, expectations are that a mini iPad will be announced  shortly to add to their product line.  New entrants like the Microsoft Surface may cause a buzz while Samsung is banking on growing its share of the Galaxy and Google with the Nexus7.  And of course there is the Kindle from Amazon and the Nook from Barnes & Noble.  In the case of the Nook, they hope to grow business with a timely cut in their price just as school is about to begin.

The joys of a crowded marketplace, inciting constant innovation and pushing the others to keep their eye on the prize.  It should make for a fun Holiday Season as each of these companies sell their benefits to the consumer.

What's A CD, Teens Prefer Online

My son and I were walking through our local mall and he spotted a new store across from his favorite, GameStop.  It was simply called The CD Store and my son wondered why.  With access to songs through iTunes and YouTube, a physical CD isn't something he even thinks about. And according to the Nielsen research, he is not alone.

And for 17 and under, You Tube heads the list of preferences.  "In addition to treating YouTube as a de facto free music service, young people said they are less inclined than those 18 years old and up to listen to CDs or the radio."  The chart in the Wall Street Journal does offer some other interesting observations.



For all age groups, CDs ranked higher for usage than other media platforms, both new and old; higher than Sirius, higher than Facebook, higher than TV (Take than MTV), and even higher than Pandora.  Still it is important to note that this is a moment in time and not a trend analysis to indicate the direction of usage that teens are taking.  As we all know, they are a fickle bunch and can change quickly for many reasons.

That the article suggests that CDs are done, they are less used than even radio for teens. For adults, CDs are still a tried and true formula and perhaps that is why a CD store has popped into our mall.  Adults rank CDs second behind radio in the survey.  Ahh the older generation loves their old fashioned technology.

Does Liberty Want To Sell Starz And Is Comcast A Buyer

Liberty and John Malone love to unlock the value of a company by spinning it off into its own separately traded public company. It has been a strategy that seems to serve them well.  With the decision to spin Starz into a separate company comes speculation that Malone might actually be willing to part with the pay television network.  According to the article in Ad Age, the list of possible acquirers is growing including News Corp, Viacom, Time Warner, Netflix, and Comcast.  But is Liberty really looking to sell this asset and does it make sense for any of these "media giants" to acquire it? At the right price, almost everything can be bought.

 

Dish Network Keeping AMC Off The Air

Whether it is a license fee rate issue or bad blood regarding a lawsuit around Voom, Dish Network has decided to not carry AMC and its other networks, including WE, IFC, and Sundance, on their line-up. Clearly there are different sides to this story. If a decision not to carry certain networks with the result of lowering the monthly fee to consumers works, then other carriers may seek out this strategy to account for consumer price sensitivity.  If enough consumers complain or worse, switch to another provider, Dish may feel the bite and re-engage in a negotiation with AMC.  And other operators will figure out new ways to be the aggregator of all programming.  The fight is on.

AMC is certainly trying different ways to talk to the Dish consumer and get them to act.  One such tactic caught my eye.  I've embedded a video that is both humorous and subtle.

If you want zombies off the street and back on the AMC TV show, The Walking Dead, then this will certainly help.  Enjoy!