Can Aereo Kill The Broadcast Model?

Broadcasters seem up in arm about the disruptive force behind Aereo.  At its heart, it encourages cord cutting of cable for online access of broadcast signals.  "The start-up Aereo has been at the center of a storm in recent months because its technology threatens to blow-up the existing model of pay TV, which is based on selling viewers a bundle of channels, that include over-the-air stations like NBC, ABC, CBS and Fox."  But is the solution to fight or adapt? I propose adapting to the consumer.

Consumers want a TV Everywhere approach at a reasonable price; some don't want all the other cable networks and are happy with access to a limited base of networks.  So why not offer to your current cable and satellite distributors an authenticated model for access online of the broadcast signal.  Revise your agreements to enable a broadcast only tier of services at a limited price point.  If the concern is that Aereo will take away paying customers, then revise your model.

At the same time, a broadcasters' responsibility is to serve the community and over the air bandwidth came with certain requirements.  If it is free to receive through over the air antennas, then why shouldn't Aereo have the same right to use and repackage for consumers.  The signal is not changed in any way.  And it encourages more broadcast viewership, enabling higher ratings and higher ad revenues.  Still,  if you want to beat Aereo, then support an authenticated stream through current distributors.   A court battle is not the answer; a marketing and technological shift is what will best help broadcasters. 

Twitter, 140 characters + Video

Twitter has discovered their secret sauce. If you plan to lead your users to water, you might as well make them drink it, too.   Their model is more than just short messages, but links to other Twitter sites to enable more advertising opportunities.  And the best way to do it is with high quality, valued content.  "Twitter Inc. is close to reaching partnerships with television networks that would bring more high-quality video content and advertising to the social site, according to people familiar with the matter." 

And video, depending on its length, can provide Twitter with multiple revenue opportunities, from pre-roll to overlays to banners and more.  What sponsored messages can't do, video links can.  And video means more time spent on the linked site.  Perfect too for mobile, both smartphones and tablets, to move Twitter users to other sites.   Most importantly, it could work to build their own aggregated platform of content, like Huffington Post, Yahoo, and other sites. What the final intention may be for Twitter has not been fully disclosed, although to me, the opportunities for them to grow are enabled with video partnerships.

My Son Has Found Defiance

While he is indeed entering adolescence, Defiance is not how he treats his parents; rather, it is a multi-media piece of entertainment that has entered our home.  Even before I knew of the TV series that premiered this week on SyFy, I knew about the game.  He pre-ordered it from Amazon and waited patiently (and a little impatiently) for its arrival to play on X-Box.  He got an early chance to play an online version before its arrival too.  And he was clear that we needed to record the series for his viewing pleasure.  He was hooked.

What is Defiance?  I have no idea.  I haven't watched him play it or had a chance to watch the show with him.  But I agree that it is more than just a TV show or online game.  "The game and show have been pitched as groundbreaking transmedia, thanks to how they have been designed to complement each other and build out the world of its characters. And digging into the way both elements have been created to co-exist, it’s hard to deny the potential in the approach."  To make this work takes a lot of collaboration.  Plot points must co-exist both on the TV screen and online.  For viewers and players like my son, they make for a far richer experience.  Matching game play to linear viewing may be the biggest challenge of them all.

But does it translate into greater monetization?  The game side of the business model doesn't seem to need a lot of pushing to do well.  Some game success can be equated to box office size returns.  But rating should swell if users are engaged with the online characters and buy in to them on the TV screen as well.   "That difference, according to (Syfy head of original content Mark) Stern, is by design. '[The show] is going for a broader, older demo, but [the game] is going for a younger and more male-skewed audience,' he said. 'Hopefully we’ll be able to pull more of that younger demo into our channel and push older audience into the game.'”  Building interest to the demographics is key to higher revenue returns.

Content creators are sure to watch this series and measure the value it produces.  The success of this "transmedia" approach may just foretell the future of television programming.  How well it works remains to be seen, but it may just be the beginning of more collaborative online and on-screen ventures.

Dish Network Actively Wants Wireless

The one thing to be said about Dish Network and Charlie Ergen is that he is not afraid to go after what he wants.  With stories about wanting Clearwire, merging with DirecTv, offering the Hopper, and now buying Sprint, they have serious intentions to disrupt the media landscape.  Today it seems that if you can't get Clearwire, get the company trying to purchase it.  So why does Ergen want to add wireless to his media empire?  "DISH's Ergen said he's pursuing the merger to broaden DISH's business by offering integrated bundle packages of broadband data, voice services and home video that can be played at home or on the wireless network." 

To be competitive with cable and telecom, Dish needs a wireless business.  And Ergen rightfully recognizes that the communication landscape, whether video, audio or other data is becoming increasingly more mobile.  Dish's current distribution play requires a tethered antenna and wires to the TV.  Dish needs a wireless platform to augment and grow his distribution plans. And the acquisition of Sprint should help to take Clearwire as well. 

His bid for Sprint, a good 25% over Softbank's bid may or may not be enough. Will Softbank counterbid or will this ultimately be the move that gets Dish his wireless business.  And lastly, should a Dish/DirecTv merger be out of the question or the icing on the cake that makes their satellite play a much stronger competitor in the cable/telecom industry.

LinkedIn Buys Pulse While Google Drops Reader

LinkedIn, the social network site for building and sharing business relationships, has announced its plans to broaden into a news aggregation site.  "But more than that, it’s yet another move by LinkedIn to expand beyond being just a static resume service for recruiters and professionals."  Rather than just be a site for job seekers and hunters, LinkedIn can now be defined as an online business resource.  A smart move by LinkedIn to strengthen its relationship with its users.  "It wants to be the home page for professionals, including the place where those pros go to catch up on the biz news they care about."

As LinkedIn builds its monetization plans, both in ad and subscription models, I suspect that they will find away to build a premium version of Pulse to strengthen the LinkedIn subscription model and encourage more free users to upgrade.  The combination of LinkedIn with Pulse should build more synergies with original content that LinkedIn is creating.  And that will help to bolster their ad revenue, too.  All in all, a smart strategic purchase.

Has Social Media Jumped The Shark?

In a study by PiperJaffray survey of over 5,000 teenagers, Teens reliance on social networking has declined over the last 12 months.  While teenagers are heavily engaged in technology, smartphones and tablets, they have shifted away overall from social media.  According to the study, Facebook is still their most important social website although that interest has dropped by 9%.  Twitter and Instagram have dropped slightly from a year ago.  Google+, YouTube, and Tumblr have also dropped.  "This data measures sentiment, not usage stats. If this data is solid, though, we should see it reflected in a teen exodus from traditional social networks. Considering how unwilling some of these companies are to talk about the younger demographic, it may already be under way."

While this new generation may be fickle in what they use, their loyalty may easily shift.  Teens seem more likely to be early adopters in new activities, whether social media sites like Vine and Snapchat, content platforms like Redbox and Netflix, and music outlets like Pandora.   As to smartphones, Apple outshines the others for teens.  Speed is key and per the study, 4G is appealing to the generation as well. 

So has social media jumped the shark for teens?  The release of the Facebook Home app may just tell us what teens are thinking.  If it is embraced, then the answer is no; if it is tried and dropped, the answer is clear.

Could Dish and DirecTv Merge?

Can Charlie Ergen and John Malone work together? The report in Bloomberg suggests that Dish may be looking at a merger with its satellite rival to better compete against fiber providers.  As the article indicates, Ergen has been active in the marketplace, trying to takeover Clearwire in an attempt to gain a bigger wireless presence.  Synergies with DirecTv could also help in Dish's favor.  But would the FCC agree to such a merger?

Given what has been enabled in the airline industry with Continental/United and USAir/American Airlines, anything is possible.  Even Sirius/XM Satellite were approved to merge.  But is Malone ready to give up DirecTv or share control with Ergen?  Two strong personalities in a quickly changing media landscape.

Given the rise in wireless and broadband, competition would still remain strong. The addition of Google into the mix and the strength of cable and telephone companies in the space remain the fiercest competitors to both Dish and DirecTv.  A strong wireless play would enable them to compete more effectively against these companies.And I suspect should a merger be announced, the FCC would approve it. 

First Kansas City, Then Austin; Then...

Google's entry in the cable business is starting to take off; first has been Kansas City, a Time Warner Cable (TWC) franchise and next may be Austin, another TWC franchise market.  And to challenge TWC further, "AT&T says today that it, too, 'is prepared to build' a speedy 1 gigabit per second broadband system in Austin."  Good for competition and good for the consumer to have choice. 

While fiber is the backbone of connectivity, the rapid rise in mobility makes me wonder whether consumers need to have the last mile connection from pole to home?  Can the cable operators, as well as Google and others be able to achieve their objectives without that last connection.  As many of us have mobile devices that we use in or  homes, laptops, tablets, and smartphones, and I would imagine a large number have their own wireless network off their broadband provider's fiber to the home, is there a simpler solution.  By enabling wireless connectivity from the pole to the home, don't we assure a better wireless broadband experience.  And perhaps create some cost efficiencies for the companies. 

The fight for faster broadband connectivity is growing with the rise of larger bytes of content flowing and more consumers pushing the limits of the stream.  As consumers find themselves frustrated by slow broadband connectivity from their existing provider, the rise of new entrants like Google and others with faster speeds may become attractive.  A pre-emptive marketing campaign and capital investment in their own broadband infrastructure seems required by TWC to fend off these competitors. 

Fox Network Considers Move To Cable To Stop Aereo

Aereo, as a disruptor in the TV landscape, has certainly created buzz.  Poised to help cable cord cutters to receive broadcast channels without a cable subscription, Aereo has discovered a work around that the courts have yet to disallow.  By building an antenna farm and offering a unique signal to each subscriber. Aereo takes free, over the air signals, repurposes and sells to consumers. 

The broadcasters are angry because they don't receive compensation for their signal while cable operators do pay them.  Success by Aereo could cause cable operators to renegotiate to also get these same signals free.  And so one broadcaster has threatened to change their business strategy to assure their license fee structure remains intact.

"In an Armageddon-like declaration that could unravel network TV, a top News Corp. executive said Fox could become a subscription service if courts don’t put a halt to the retransmission of its shows for free."  That means that Fox Broadcast Network would switch from a broadcast model to cable programmer.  And while it would assure a license fee, it would alter the local broadcast affiliate world.  Does each Fox affiliate build their own digital feed or does Fox simply do away with the DMA model approach that has served it since inception.  And most at risk would be programming, syndication and sports that are exclusive to the DMA.

Are these idle threats by Fox or has some real analysis gone into the notion of changing their business model?  Regardless, Aereo has put the fear of G-d into broadcasters, Fox and others.  They are disruptors in the truest sense of the word.