Barnes & Noble Looks To Play With Google

Any mobile device is only as good as the content that drives it.  Today, the two biggest libraries for apps and content are Apple and Google.  But while Apple is a closed architecture built around its exclusive product line, Google Play has taken the opposite approach to open itself to multiple devices.  So add to that list the Nook devices. 

"Barnes & Noble is adding Google Play’s full complement of videos, music and apps (and ebooks) to its Nook HD and HD+ tablets. The tablets will also include Google services like Gmail, Google Maps, YouTube and the Chrome browser."  Nook devices will continue to access its own store as well.  Certainly more is better than less and should result in a better user experience for consumers who use the Nook tablets. 

But the article speculates, and rightly so, what about Microsoft.  Despite partnering with B&N, Microsoft has seemed to do little to take advantage of the deal.  Where is Microsoft in the device, where is Microsoft in the retail space of B&N, where is Microsoft in the content?  And I must suspect that Microsoft must be a little upset that B&N is now cavorting with the "competition".  But since Microsoft has done little to utilize this partnership and the Nook needs content to gain popularity for its device, B&N made the right decision to push ahead. 

Liberty Buys Into Charter...Time To Takeover?

According to reports, Liberty has completed its quarter ownership of Charter Communications.  With its ownership, Liberty also gets seats on the Charter Board.  So what is next?  Does Liberty let Charter run independently with its current management team or is Liberty already thinking of full ownership.  It would not be the first time, as SiriusXm has found out first hand.  That is not to say that having Liberty and its management team on your board is a bad thing; rather, John Malone and his team have proven themselves successful in running these businesses.  It is more conjecture as to what Charter may become in the next few years. 

CE Study 47% IP Devices Connected - Really?

Numbers are a funny thing.  They can be manipulated any number of ways to tell a story.  Yet sometimes those analyses tend to cause a bit of head scratching.  One in particular appeared in Multichannel suggesting that less than half of all IP capable CE devices are actually connected to broadband.  "Makers of Blu-ray players, gaming consoles, smart TVs and streaming media devices are banking on users to connect to revenue-generating services over broadband, but less than half of those devices are actually tapped into the Internet, The NPD Group revealed in its latest a Connected Home report."  Do you spot the device that may have brought down this percentage?

If you guessed blu-ray player, you are right.  Now I admit to not seeing the actual study, but I do wonder what the numbers look like without Blu-ray in the mix.  But this item also was a head scratcher, "According to NPD’s survey of 4,000 U.S. consumers, streaming media players are connected at the highest rate, followed by game consoles, Blu-ray players and IP-capable TVs."  You mean to tell me that IP connected, smart TVs are not actually connected; in fact, they are less likely to be connected than Blu-ray players. I can understand people buying Blu-ray players solely to play discs and not to connect online, but why would a consumer buy an IP connected set if they had no plans to connect.  Was the price of the set cheaper than another without the feature? 

But back to the numbers.  So with a sample of 4000, were they equally divided among the 4 devices?  Perhaps it would be more interesting to dig deeper into each of these devices specifically to see how each is utilized.  Certainly, consumers are buying more and more connected devices AND actually connecting to broadband.  My final thought, I think these numbers seem skewed and another study might prove that consumers are quickly embracing IP connectivity and the percentage is higher.   And households with more than one of these devices in their home are using a particular one as the primary connecting source.  Of note, what they are currently connecting to. "The study also found that 40% of TVs connected to the Internet either through the TV itself or via a separate device are used to stream Netflix content, while 17 percent tap into YouTube, and just 11 percent head to Hulu."  

Should Apple Buy Or Build A Subscription Service?

I keep wondering whether it makes sense for Apple to expand its iTunes' business to include a subscription model.  For Wall Street, a regular monthly revenue stream from paid subscribers is easy to forecast and certainly increases the connection that Apple can make with its customers.  And Apple has never shied away from new innovation that can possible eat in to old revenue models.  So the threat that a subscription model has on its purchase model shouldn't be an issue either.  And a subscription model opens the doors for Apple to build out its own ad model around the rental business.  Apple has shown itself to be both a hardware and software leader so I keep wondering if Apple is even considering such a strategic move.

I could see three possible scenarios shaping up.  If the intention is to buy, Hulu most certainly could be at the top of the list.  While smaller than others, it has built a growing reputation for original content and usage.  Whether Apple is interested in kicking the tires of this business or another remains to be seen.  Certainly, the business is still a nascent one and Apple could simply build a subscription model from scratch.  With relationships already in place on the purchase side of the business, a library of content could be available quickly.  It may take time to build it as large as Amazon, Netflix, or Redbox, but it is doable. The third scenario would be to partner with one of the current platforms.  A little cash from Apple could go along way in moving a business further ahead of the pack while limiting any downside for Apple.  And adding iTunes as a platform to entry would help to extend reach and performance.  For now, we can only speculate.

Hulu Growing Despite Sale Rumors

Hulu's owners might need to stop thinking about whether to sell their positions in what looks to be a very successful business.  Perhaps it is because they compete with each other in the broadcast and cable space, but if the Fox, NBC, and ABC parents can put their differences aside, they have a partnership in Hulu that continues to grow and perform.  "Hulu said today during its upfront presentation in New York that it set a revenue record in the first quarter of this year with $695M, and that Hulu Plus subscriptions passed 4 million subscribers after doubling in 2012."  And while that is quite a bit smaller than Netflix and Amazon Prime, it means that there is still quite a bit more growth ahead of it. 

By following a strategy of developing original exclusive content for its site, Hulu recognizes a similar strategy being deployed by others.  Keeping the pipeline full and flowing assures that consumers continue to pay their subscription fees and use the streaming service.  And as these upfronts show, there are some original productions already in the mix and prepping for release, including The Awesomes and The Wrong Mans that sound quite good.

Whether the Hulu partners wish to compete in this space through this entity or sell off this asset, remains to be seen.  If they do sell, I can predict that their should be a number of parties eager to bid for it in order to own the Hulu business. 

SiriusXM Replaces Karmazin And Reports Growth

With Mel Karmazin now gone, Sirius looks to his replacement Jim Meyer to continue to grow the company.  For the first quarter, Sirius saw subscribers, revenue, and income all grow, but perhaps not as high as the stock market would like.  Most concerning may be the cost associated with keeping subscribers paying and not leaving or churning from the service.  As more and more automakers include Sirius in their audio package, the challenge is getting these customers to take the service past the free period.

As a new car owner, I enjoyed the free period but admit to not purchasing the service when the free trial ended.  We tend to drive less and use mass transit more.  Most car use for us is short trips around the area with few long distance driving.  The result, the radio is not on that long in the car.  And local radio stations provide the news, sports, and music that we need.  We can also link to our iPod when we desire to personalize the music we want to hear.  I would however consider a Sirius subscription if my driving habits required more long distance, out of area trips, where station strength fades and switching stations is a requirement.  Sirius provides a valuable assortment of entertainment for those kind of drivers.

Whether Sirius can reduce its churn to increase subscription above expectations remains a challenge.  Price point also plays into the consumer decision to retain or leave the service.  But given that Sirius has an opportunity to also grow ad revenue can help improve their bottom line.  It also helps that better research can be gleaned from listeners to help sell a more targeted ad campaign.  The hope I'm sure for Sirius is that an improved economy means more call sales and more customers testing the service. 

As One Show Moves To Cable, Two Move To The Web

The rise of online distribution means more content viewing choices; at the same time, cable and broadcast still are where most viewers look first to consume content.  We have seen the rise of original content going directly to streaming, like Netflix's "House of Cards", and now we are seeing shows move from one platform to another.  Actually, we are seeing three!

For soap opera fans, the loss of two long time series on ABC, “All My Children” and “One Life to Live”,  are finding new life and new original shows on streaming media.  According to the NY Times, "Some fans have set their alarm clocks for 5 a.m. Monday, the precise time when the shows will have their premieres on Hulu and iTunes — and complete the closely watched transition from TV to the Internet."  Will viewers follow these two shows?  Like Netflix did for "Arrested Development", rabid fans may be very happy to find new episodes can be found online.

But this trend to move a show from one platform to another is not a one way road.  For HuffPost Live, an online, live news program on the Huffington Post web site, a new audience may soon discover them.  Also according to today's NY Times, "The company announced Sunday night that Mr. Cuban’s cable channel AXS TV, previously known as HDNet, would soon carry HuffPost Live’s programming for six hours a day."  That means that HuffPost Live will extend its reach to around 41 million cable subscribers. Cable and broadcast networks, looking for potential new series can let online sites incubate new shows and take them to their audience once they mature.  The same could hold true for TV pilots being tested online. 

As much as cable and broadcast networks worry that online will steal viewers and subscription revenue, they may also find that working collaboratively can perhaps work, too.  For now, we can watch and wait as more original shows move back and forth between online and on TV. 

Netflix CEO Sees The End Of Linear TV

Netflix, despite its bumps and bruises, has navigated from a DVD subscription model to a digital one.  And according to their CEO, Reed Hastings, imagines a TV future that is all streaming and non-linear.  "People love TV viewing, but they hate linear TV, including DVRs and cable VOD services, argued Hastings: 'The linear TV channel model is ripe for replacement.' Stepping up to replace it are apps from companies like Netflix, HBO and ESPN, which deliver programming to multiple screens."And while I agree that the viewing model for consumers is changing rapidly, I believe that consumers will find a viewing experience balanced between linear and non-linear video consumption. 

As I read the article, I admit a bit of confusion when Hastings describes linear TV to include DVR and VOD. But I believe his description is more between the current cable/satellite model and a digital streaming one.  "Technical advances, including 4k streaming and personalized advertising, will speed up the transition from linear TV to app-based on demand programming, and TV Everywhere will make it easier for cable networks to transition into this new world." 

I prefer to describe linear TV as a sit back model where we are fed video that has been pre-programmed to air at a particular time and once aired is not accessible till its next airing.  A non-linear model for me is one that includes DVR and VOD and streaming services where the consumer chooses when and what to watch.  And  consumers are moving toward the streaming model because of the mobility and personalization factors.  But some streaming is in fact linear.  Huffington Post offers its HuffPost Live channel on its website.  And linear still matters for live events, especially sports, as well as news, weather, and other big events.  I expect broadcast and cable to deliver more live programming as a means to capture audience share from on demand.  With live comes an anything goes factor that is harder to edit out.  And for viewers that simply want a sit back TV experience, linear reduces the choices a viewer has to make.

So Hastings is right that streaming will impact viewing choices more and more.  And his decision to build a brand experience that defines and positions itself above the fray is a smart strategy.  "'For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish.'”  Competition for audience will only get fiercer when you add up all the choices a consumer can access for their viewing pleasure.  And with so much non-linear choice, we may sometimes simply revert back to linear programming to simplify the viewing experience.

Set-Top Boxes Not Going Away

As much as TV sets come with a remote control, most of us rely on the remote from our set-top box to turn the channel and adjust the channel, even turn on and off the TV set.  Cable operators rely on their set-top boxes to unscramble signals, record programming for later viewing, and access video on demand.  We only tend to use the remote from our TV to switch inputs to our other devices. And it is those other "set-tops" that want a piece of our TV screen. 

Apple has its box, Apple TV, to access programming from our iTunes library and other streaming accounts.  And Rovi offers its own video streaming box. X-Box, Playstation, and Wii have their set-top box for gaming while also enabling streaming content to play.  And TiVo has built a solid DVR set-top box  while Boxee has a set-top box to record programming in the cloud; both with features that enable video streaming as well.  So, many of us most likely have more than one set-top box lurking around our TV set.  And more devices are arriving. 

Although it offers its video streaming Prime services to some of the above set-top boxes, Amazon is preparing to release its own Kindle TV set top-box.  "By building its own system, Amazon can put its content more directly in front of consumers while expanding its lineup of devices and giving developers another reason to create apps for Amazon’s digital ecosystem."  While set-top boxes have been around a long time, their functionality and ergonomics have improved greatly.  Which boxes the consumer prefers and how they wish to access their streaming content, whether through the TV set or other mobile devices, remains to be seen.  And most importantly, the exclusivity, variety, and amount of content accessible to consume will be where the consumer is most likely to dine and view.