In Les Misérables, the storekeeper's big number extols how to get more money from the customer, "charge them for the mice..." and all the other "extras". In the airline industry, baggage, food, and perhaps soon, pillows and blankets, all cost extra. For the cable industry, the big extra is the cable box. As cable operators transitioned from analog to digital, TV sets all required a cable box to connect the cable wire to the TV set and unscramble each channel's signal. More TV sets to connect in the home, the more cable boxes to rent, the more revenue per household.
In the past, Comcast offered "special adapters and that those adapters - two per household - would be free." But not in Philly anymore or perhaps anywhere. These are not the big boxes, the ones that access on demand or can DVR programs, or even pause and rewind the show being watched. These low level adapters simply unscramble signals. More costs to get access to what was once free to the consumer.
But perhaps this is just one more tipping point to move from big screen to tablet, from connected to wireless. As costs rise, consumers will be less likely to want to connect more TVs. Bedrooms will be more likely to find laptops and tablets, then TVs, for consumers to watch content. It may even cause consumers to more quickly cut their cable cord. It may be an attempt to grow the revenue stream and improve the profit margins of cable, but it may also lead to more detrimental results.
Thursday, January 31, 2013
Netflix Is A TV Network
With tomorrow's launch of its premier series House of Cards, Netflix could be considered a TV network. While it does not yet have a daily news show, I wouldn't be surprised if that was in their future. What they do have is a mix of old and now new TV series. First comes House of Cards, second is Arrested Development, and more is certainly in the pipeline. Couldn't this describe a TV network.
In the infancy of cable TV, reruns were the staple of a network's programming wheel. Each charged a monthly license fee that the cable operator passed on to the consumer, and each tried to find an advertising model to build a second screen. With revenue growth came investment in original series, first just one to test the waters and then more as each series brought more and more revenue back to the network. So now it is Netflix following the same cable strategy.
Unlike a cable network, Netflix is using the web to talk build a business model directly with the consumer. With a monthly fee of $8, Netflix costs more than many single cable networks, but acts more like a cable operator in providing a library of content that exceeds what any one network could offer. And consumers have been willing to pay the fee as it can be less expensive than a cable subscription. Netflix hopes that offering exclusive original series, like what a cable network creates, can successfully bring more subscribers to their world. Bring a successful ad model to augment subscription fees and Netflix will be a true competitor to cable.
In the infancy of cable TV, reruns were the staple of a network's programming wheel. Each charged a monthly license fee that the cable operator passed on to the consumer, and each tried to find an advertising model to build a second screen. With revenue growth came investment in original series, first just one to test the waters and then more as each series brought more and more revenue back to the network. So now it is Netflix following the same cable strategy.
Unlike a cable network, Netflix is using the web to talk build a business model directly with the consumer. With a monthly fee of $8, Netflix costs more than many single cable networks, but acts more like a cable operator in providing a library of content that exceeds what any one network could offer. And consumers have been willing to pay the fee as it can be less expensive than a cable subscription. Netflix hopes that offering exclusive original series, like what a cable network creates, can successfully bring more subscribers to their world. Bring a successful ad model to augment subscription fees and Netflix will be a true competitor to cable.
Wednesday, January 30, 2013
You Tube Likes The Subscription Model
The formula that cable networks have masterminded, a dual revenue stream from advertising and subscription, has been quite successful. So much so that even broadcast networks moved from "must-carry" basis to license fee to take advantage of subscription revenue. Hulu and Amazon have each built their own subscription models as well. So the news that You Tube wants to enter this world should not only been expected, but one could wonder what took so long.
Per the news, "YouTube has reached out to a small group of channel producers and asked them to submit applications to create channels that users would have to pay to access. As of now it appears that the first paid channels will cost somewhere between $1 and $5 a month, two of these people said." Will consumers seek out these services and can You Tube prove the value? Obviously, if the content is proved compelling, unique, and different enough to justify a fee, consumers will embrace it. Selling unknown content, unlike Hulu and others selling known shows, may make the value harder to prove. Others have used well known actors to entice views. So building a pay model is possible.
On the other hand, consumers may feel beaten down that they are asked to subscribe everywhere they go. Cable continues to own the market and adding a TV everywhere approach to extend its content to multiple platforms helps to maintain their dominance. Hulu, Netflix, and Amazon are building out successful models too. With the right content, As You Tube and others add to the mix, fragmentation results and the landscape looks cluttered until a tipping point occurs. Ultimately, the big fish will eat the little fish and the fewer survivors will remain.
Per the news, "YouTube has reached out to a small group of channel producers and asked them to submit applications to create channels that users would have to pay to access. As of now it appears that the first paid channels will cost somewhere between $1 and $5 a month, two of these people said." Will consumers seek out these services and can You Tube prove the value? Obviously, if the content is proved compelling, unique, and different enough to justify a fee, consumers will embrace it. Selling unknown content, unlike Hulu and others selling known shows, may make the value harder to prove. Others have used well known actors to entice views. So building a pay model is possible.
On the other hand, consumers may feel beaten down that they are asked to subscribe everywhere they go. Cable continues to own the market and adding a TV everywhere approach to extend its content to multiple platforms helps to maintain their dominance. Hulu, Netflix, and Amazon are building out successful models too. With the right content, As You Tube and others add to the mix, fragmentation results and the landscape looks cluttered until a tipping point occurs. Ultimately, the big fish will eat the little fish and the fewer survivors will remain.
Tuesday, January 29, 2013
We Are Media Multi-Taskers
Do you multi-task? Watch TV as you read the newspaper, read a book while listening to music, or at the very least drive and change radio stations? Then you probably surf the web and watch TV at the same time, too. So this research news should come as absolutely no surprise, "A new study from KPMG finds that 60% of American television viewers are devoted multitaskers, watching TV and accessing the Internet at the same time." We seem to have short levels of attention and the web is a perfect distraction to active TV watching.
Many companies are hoping that we will multi-task with second screens that are connected to the TV and augment the content that we are watching; in some cases, like a live sporting event or awards show, we might align screens. But it seems to me that most of the time, the two screens are doing different things. From reading emails to playing games or checking on websites, we keep one eye on one screen as the other plays on. Add another person into the room and into the equation and our heads are probably spinning as we concentrate on each activity. Thank goodness the cable box has a pause button.
The other research finding confirms that more people still like to watch video on their big screen TV. The flexibility of smartphones and tablets are great, but when it comes to long form programming, it is hard to beat the big HDTV screen.
Many companies are hoping that we will multi-task with second screens that are connected to the TV and augment the content that we are watching; in some cases, like a live sporting event or awards show, we might align screens. But it seems to me that most of the time, the two screens are doing different things. From reading emails to playing games or checking on websites, we keep one eye on one screen as the other plays on. Add another person into the room and into the equation and our heads are probably spinning as we concentrate on each activity. Thank goodness the cable box has a pause button.
The other research finding confirms that more people still like to watch video on their big screen TV. The flexibility of smartphones and tablets are great, but when it comes to long form programming, it is hard to beat the big HDTV screen.
Monday, January 28, 2013
Has Apple "Jumped The Shark"?
Apple, once seen as the cool kid in town, has faced tons of pressure from competition in the smartphone and tablet space. And while Apple continues to upgrade its product line, it has been slow to announce the "next new thing", a line that Samsung has used in its marketing to knock down Apple. So has Apple "jumped the shark", that popular expression best know when Fonzie tried the stunt on Happy Days and it was regarded as the moment the show turned from good to bad. Has Apple lost its footing and been knocked off the mountain?
"Apple continues to lead in the tablet market with 53.8 percent market share in 2012, according to IDC. It sold 22.9 million during the last quarter of 2012, compared to 15.5 million during the same period in 2011. But its mark share slipped a little from the previous year as Android increased its share with 43.7 percent of estimated 2012 shipments." But despite the numbers, Apple may longer be as "hip" to the younger generation as it once was considered. But then again, hip and trendy never last forever. Stable has always had a longer life span. But in tech geek coolness, being hip is crucial and Apple needs another "hip" product to rise again.
"Apple continues to lead in the tablet market with 53.8 percent market share in 2012, according to IDC. It sold 22.9 million during the last quarter of 2012, compared to 15.5 million during the same period in 2011. But its mark share slipped a little from the previous year as Android increased its share with 43.7 percent of estimated 2012 shipments." But despite the numbers, Apple may longer be as "hip" to the younger generation as it once was considered. But then again, hip and trendy never last forever. Stable has always had a longer life span. But in tech geek coolness, being hip is crucial and Apple needs another "hip" product to rise again.
Friday, January 25, 2013
Latest Social Networking Link - Vine
Is your social networking apps growing? Are you paying enough attention to your current connections via Facebook, Twitter, Pinterest, etc. or are you in need of another connection? If you haven't had enough, then say hello to Vine. Growing quickly on the app charts, Vine enables members to upload and share short form videos. "It lets users thread together tiny clips into one looping six-second video, with a UI very similar to Instagram’s." And as it comes from Twitter, it might just have some opportunity to succeed. "And if that weren’t enough, Vine actually stands to make Twitter a more valuable company and a stronger social network. Not only does it start the process of building a bridge from platform to true social network, but it creates another stream of user-generated content for Twitter that the company actually owns." Time will tell whether it is a short term fad or has real future to it.
FYI, it is Vine.co, not Vine.com, which may just bring this healthy living site some new uniques to their traffic.
FYI, it is Vine.co, not Vine.com, which may just bring this healthy living site some new uniques to their traffic.
Transitioning From Print To Digital
The print world, newspaper and magazine subscriptions specifically, is dealing with a massive change in the media landscape. Where once they enjoyed delivering print subscriptions via the mail and door to door service, they are facing a consumer that is shifting more and more from hard copy to digital. The direction and pace are clear, just cite the rise in tablets. But this paid business model is also facing the wrath of competition offering free access to print content. Where once you had to buy a subscription to The National Enquirer or Us Weekly, today you can read similar coverage on TMZ on a website or app. As "mom" would say, why buy the cow when the milk is free.
And that is the struggle that print media faces as they manage this transition from print to digital subscriptions and online advertising. The costs of printing and delivery may decrease, but can the revenue continue to grow? As there are many ways to "skin a cat", publishers have too. "Publishing companies like Hearst Magazines, Condé Nast and Time Inc are pursuing diverse strategies to drive up digital sales, and have all seen online readership numbers rise as a result."
People will pay for content if they perceive value. Publishers can do that with a walled garden approach as well as marketing the value of those dispensing the information. Digital also can be valuable because of the time sensitivity it allows; printed news is old the moment it is on the paper while digital news can constantly be updated to reflect the most current information. Digital also enables multimedia, video and audio, to augment the written word. As long as the consumer believes their is value, they will pay for it.
The move from print to digital will not happen overnight; but it is moving down that path at the moment. And at some point soon, publishers will meet and pass through that tipping point where there won't be a need to print a publication at all.
And that is the struggle that print media faces as they manage this transition from print to digital subscriptions and online advertising. The costs of printing and delivery may decrease, but can the revenue continue to grow? As there are many ways to "skin a cat", publishers have too. "Publishing companies like Hearst Magazines, Condé Nast and Time Inc are pursuing diverse strategies to drive up digital sales, and have all seen online readership numbers rise as a result."
People will pay for content if they perceive value. Publishers can do that with a walled garden approach as well as marketing the value of those dispensing the information. Digital also can be valuable because of the time sensitivity it allows; printed news is old the moment it is on the paper while digital news can constantly be updated to reflect the most current information. Digital also enables multimedia, video and audio, to augment the written word. As long as the consumer believes their is value, they will pay for it.
The move from print to digital will not happen overnight; but it is moving down that path at the moment. And at some point soon, publishers will meet and pass through that tipping point where there won't be a need to print a publication at all.
Thursday, January 24, 2013
Netflix Amazes, Apple Disappoints
The stock market is all about expectations; not just what is achieved but what is determined by analysts to be the results. Meet or exceed and get rewarded, miss and watch the stock price drop. For Netflix, a company that changed its business model from DVD to streaming, the turnaround has achieved results far greater than analysts projected. "That bold outlook comes at a day when Netflix beat market expectations by ending 2012 in black as well as with more than 33 million worldwide subscribers." With a push toward original content and managing subscriber growth, consumers are once again enjoying the Netflix business. To rebound from a bad business decision and end the year with solid revenue growth. Still the numbers demonstrate what expectations do to market sentiment. "The company booked a net income of $8 million. That may look low when compared to $35 million in Q4 of 2011, but is above its own Q4 guidance, which topped out at $2 million."
Apple may have had record sales and huge earnings, but compared to analyst expectations, they under delivered. Does it make Apple a less successful business, no. They have in fact been growing market share. But in a growing competitive marketplace, it is that expectation that they can continue to grow at an outlandish pace. Unfortunately, that is an impossible task to achieve on a continual basis. Apple, like Netflix, will rebound, as long as it focuses on the business and grows as an innovator in the marketplace.
Apple may have had record sales and huge earnings, but compared to analyst expectations, they under delivered. Does it make Apple a less successful business, no. They have in fact been growing market share. But in a growing competitive marketplace, it is that expectation that they can continue to grow at an outlandish pace. Unfortunately, that is an impossible task to achieve on a continual basis. Apple, like Netflix, will rebound, as long as it focuses on the business and grows as an innovator in the marketplace.
Wednesday, January 23, 2013
Original Content Growth To Gain Distribution
The content vs. distribution scenario is a bit of a chicken and the egg discussion. Each is symbiotically attached to the other and rely complete on the other. So to ask the question, which matters more, becomes an endless debate. In a cable operators' world, exclusive programming content has been key in trying to differentiate itself from overbuilders and other competitors. And regional sports networks have been channel that has been used aggressively in that fight. And in the world of market share, networks fight among them selves for programming that gets better ratings than another. In the aggregate, cable has taken share from broadcast because of an increasing reliance on original programming.
So the next fight for share is between cable and broadband. The concern of cord cutting by cable operators is because consumers are seeking their programming content outside their distribution path. Like cable did to broadcast, the web may take share from cable. So as we watch history continue to repeat itself, the push for original content is coming from folks like Netflix, Hulu, and now Amazon. "The company recently acquired the rights to Zombieland, the 2009 horror comedy that featured Jesse Eisenberg, Emma Stone, and Woody Harrelson." The more compelling, the more interesting, the more desirable, the more likely this strategy will work again for broadband distribution. Market share will again shift down the pipeline as consumers sense a better "value" for content from these online providers. All distribution entities will continue to survive, but space is being taken by streaming distribution in this ever changing landscape.
So the next fight for share is between cable and broadband. The concern of cord cutting by cable operators is because consumers are seeking their programming content outside their distribution path. Like cable did to broadcast, the web may take share from cable. So as we watch history continue to repeat itself, the push for original content is coming from folks like Netflix, Hulu, and now Amazon. "The company recently acquired the rights to Zombieland, the 2009 horror comedy that featured Jesse Eisenberg, Emma Stone, and Woody Harrelson." The more compelling, the more interesting, the more desirable, the more likely this strategy will work again for broadband distribution. Market share will again shift down the pipeline as consumers sense a better "value" for content from these online providers. All distribution entities will continue to survive, but space is being taken by streaming distribution in this ever changing landscape.
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