Sports Programming Causes Higher Cable Fees

Players demand higher salaries, owners want bigger profits, ticket prices go up and so does the cost of TV rights to air games.  And ultimately, the payer of all these fees is us the consumer.  So it is that cause and effect that has led cable operators to raise their monthly cable subscription rates to consumers taking sports programming.  "DIRECTV last September added a $3 monthly sports fee to the bills of new customers in roughly 20 percent of U.S. markets. ... Verizon followed DIRECTV's lead, adding a $2.42 surcharge for sports in select markets with all markets getting it by April."  And third on the list is Cablevision, adding $3 a month to cable bills for rising sports costs.  

None of the articles I read mentioned particularly which sports networks were in this package.  Was it just the regional sports networks (RSN) like YES or SNY in New York or did it also include national sports networks like ESPN.  Still, the question will be, will consumers accept this high increase to their monthly bill or will it only lead to more cord shaving and cord cutting.  Will consumers stop taking the sports package or go as far as to stop taking their cable subscription all together?  The one fact is crystal clear, cable rates are not going down and as each cable operator follows suit with these higher package fees, the web may be the only escape. 

Yahoo Refresh

As many companies have learned, it is hard to stay cool and hip.  Just ask MTV, AOL, Microsoft, even Apple and Yahoo.  To stay relevant, one must continually innovate and capture new interest.  With each new age group comes new challenges to capture their loyalty.  And as all companies have learned, once you do get to the top of the hill, it is easier to fall then to continue to climb.

Yahoo hopes it can recapture the glory of old through its latest refresh.  "Yahoo Inc is rolling out a revamped look for its website aimed at making the Web portal more modern and attractive to users."  With Marissa Meyer on board as the the newest CEO, her challenge is to keep growing her  metrics while improving a slumping revenue stream.  Can Yahoo find growth amid increased competition from social media sites and other content portal sites?  Certainly there needs to be some secret sauce to get viewers to seek out taste Yahoo again.  With so many sites offering articles and videos and social sharing, Yahoo needs something unique and exclusive that intrigues enough people to check it out.  And that hot new thing for all companies remains elusive and hard  to capture.

Nick Has The App For That

I believe that Nickelodeon's slower entry into the mobile app space just might pay off.  Rather than rush in with an assumption of their users' behavior, "Nickelodeon has spent the last two years asking 9- and 10-year-olds what they want to watch on the iPad. The result: Very little actual television."  And judging by my own kids' behavior, I couldn't agree more.  "Instead of simply making its programs available on tablets, Nickelodeon designed its first app as a noisy, colorful smorgasbord of animated clips, irreverent music videos and the occasional deluge of the network’s trademark green slime."

My daughter falls right into their world and while we watch all the shows, either live or on DVR, her online use is not about watching the same shows; rather, online she is playing games, interacting with friends, and watching clips.  As the majority of her online use is in the home, her iPad doesn't replace the TV, it provides its own unique added value.  It is clear that the Nickelodeon app is designed to do the same, to expand the value of the brand through other means, not long form shows.  Not that those shows should be ignored on the device; for the sake of TV Everywhere, making shows available makes sense.  It just shouldn't be the centerpiece of the app's value.

"Nickelodeon’s strategy — based on extras rather than episodes — signals how Viacom may approach apps for its other cable channels, including MTV, Comedy Central and VH1. Until this week, Viacom had not introduced authenticated apps for its channels, unlike Time Warner’s HBO and its popular HBO Go app."  Will an adult's use mimic a child's, I'm not sure.  But I do believe that it involves being creative, ever changing, and always seeking to build the next big thing.  As "Harlem Shake" has proved, anything can go viral and kids love discovering the next cool thing.  For that matter, so do adults. 

Google Wants A Retail Presence

The web scared away brick and mortar businesses.  Many are gone or facing collapse because of the rise of online businesses.  Sharper Image and Circuit City are gone while Best Buy is having trouble surviving.  Many complain that Amazon has been able to under price because they don't have the same expenses as a brick and mortar retailer.  Computer and electronic retailers are having trouble, all but one.  Apple continues to thrive while others have suffered.  And Google wants to prove that they can compete is this space too.

According to the Wall Street Journal, Google is ready to follow Apple and Microsoft into the retail space.  "As the report points out, Google would have several options for technology to showcase in potential stores, such as Chromebook laptops and Google TV."  But following Apple may not be easy.  Even Ron Johnson hasn't been able to take the learnings from his days at Apple to growing the J.C. Penny retail presence.  But that may not stop Google.

It may be hard for Google to build a retail brand.  Apple sells just Apple products; Google may own Motorola but they also license their software to other brands.  A Google store might simple end up looking like another Best Buy.  How Google differentiates its store may be difficult.  Apple controls the pricing of its products, whether at their store, at Target, or online; Google  may not be able to control the price of products and so their store may not be able to provide the same or better price than elsewhere.  And that might ultimately limit the success of their retail business.

Known By The E-Mail We Keep

Do you judge others by the e-mail provider they keep?  And does the email we use say anything about who we are.  I expect that most people keep more than one email addresses.  For some it is as simple as a work email and a personal one.  For others, different email addresses for different purposes, one for close friends, one for applications like Facebook, LinkedIn and Twitter and commerce sites like Amazon and E-Bay.  An email address for every occasion.  And some of us have emails that have been around forever but because everyone we know has it, it has become hard to give up. Count folks that have Netscape, AOL, and Hotmail.  But it is time to remove one of those from the list.

"Microsoft said Tuesday it had begun switching Hotmail accounts to Outlook.com as it officially launches its revamped email service."  Hotmail email addresses are now set to become outlook.com.  Alert the friends. Change the preferences.  RIP Hotmail.

Will Dolan's Sell AMC Networks?

It is hard to be an independent network, that is, one that doesn't have a big media empire behind it.  It is especially true for single nets looking for a spot on the channel line-up of a big cable provider.  No leverage, niche ratings, and the need to get noticed.  For larger networks, and companies with multiple nets to offer, a hit show or two can help one network to propel its smaller sister networks along. 

With AMC Networks, the appeal has been great shows like Mad Men, Breaking Bad, and The Walking Dead; but, for its siblings, IFC, WE, Sundance, the terms of the deal always seem to tie around AMC.  And yet fights do happen.  The most recent, with Dish Network, was only settled and the networks restored to the line-up, because of Voom litigation.  But the fight with other cable providers continues.   And now that AMC Networks has spun itself off from its former parent, Cablevision, offers of carriage on Long Island is harder to accomplishment.

And many have speculated before that one day the AMC Networks would be sold.  That they actually spun off into a separate company was considered to be a first steps to maximize the value for eventual sale.  With the fight for renewals only getting more and more acrimonious and the concern that another hit show might not be in the makings, the timing might now be right.  "Comcast Corp., News Corp. and CBS Corp. are likely buyers due to AMC’s record of developing hit shows, BTIG LLC said."  And as some have speculated, the timing may be right. 

Will Time Warner Inc Change Its Name To Warner Bros?

The big magazine news is the plan by Time Warner Inc. to sell off the majority of its magazine brands to Meredith.  "The deal under consideration is one of several options Time Warner is exploring to reduce its troubled publishing unit. As part of the agreement, existing shareholders in Time Warner and Meredith would receive stakes in the new venture."  Titles that would stay with Time Warner include its flagship brand Time, Fortune, and Sports Illustrated.

It certainly indicates that Time Warner no longer sees any synergy between its magazine group and its television team.  Despite the need for magazine brands to become more interactive and add video to its online components, the transition of print to digital has been a difficult one for revenue monetization.  Those that can hang through it will indeed find future revenue growth from digital subscriptions and ad revenue.  Where Time Warner is shedding these titles, Meredith still has faith that their is opportunity ahead.

So without a powerful Time, Inc. in the businesses of Time Warner, is it time to rename the corporation to reflect a larger reliance on film and television.  Is it time for them to once again raise up their Warner Bros. business to be the official corporate name of the company?  With this spin off of Time Inc, it might just be the time.

Streaming Wars, Part III, Amazon CBS Expand Deal

No surprises here.  The race is on for content to stream and Netflix and Amazon are racing to expand their inventory.  As CBS is not an owner of Hulu, they have gone out to the marketplace for their streaming syndication deals and have found a partner with Amazon.  "CBS and Showtime series coming to Prime for the first time include America's Next Top Model, Everybody Loves Raymond, Jericho, The L Word, Undercover Boss and United States of Tara, among others."  Syndication has found new opportunities outside local affiliate and cable deals.  In the streaming rental business, viewers can now subscribe to Amazon Prime to view their favorite CBS series on demand online.  Earlier this month, Amazon also got the streaming rights to the hit PBS series, "Downton Abbey".

The race is on for exclusive new content as well as exclusive windows of streaming syndicated content.  And at the end of the day, consumers may find value in subscribing to more than one streaming service.  That can spell good news to all the competitors in the marketplace, provided that they have their own share of exclusive and original content to offer.  It is why in the premium cable space (HBO, Showtime, Starz, etc), consumers buy more than one pay TV service.

Streaming Wars Part II, Netflix Responds

How do you build a subscription base?  It's all about the content and Netflix is following the strategy of cable TV in building out original exclusive content.  And while the cost of acquisition must certainly be great, it is the content that acts as bait to attract new consumers.  So how best to attract an audience, recognize the different demographics that need to be reached.  And what is more powerful than families, and more specifically, those with young children.  That leads to their latest content deal with Dreamworks Animation.

"The series, "Turbo: F.A.S.T.," is based on DWA's movie "Turbo," which is scheduled to open in theaters this summer. "Turbo: F.A.S.T." will debut exclusively on Netflix in the U.S. and 40 other countries." Prior to this deal, Dreamworks Animation has done content deals with Nickelodean and Cartoon Network.

For Netflix families, access to quality children programming makes them that much more essential to the home.  And as an alternative to cable, Netflix brings a cheaper alternative for content into the home.  In addition, Netflix brings another benefit to families. "Parents like Netflix's easy way to find family friendly movies and shows on-demand and ad-free."  For parents concerned about their kids exposure to tempting commercials, an ad-free model should have enormous appeal.

Can Netflix afford all these programming costs for original and exclusive programming?  Kids bring parents and parents will have their own shows with ads.  Add to that a constant and growing subscription model and Netflix may be the streaming brand to beat.  If Netflix can add an e-commerce revenue stream to the ad and subscriber models, then they will indeed become a triple threat.