How To Stop Cord Cutting And Raise Revenues

Want to hear an old idea that keeps popping up.  An idea that wants households to spend more and depress the growth in online streaming.  It is called broadband usage fees and it means that heavier streaming users would pay more, depending on the number of bytes fed through the system.  Think utility bills like electricity, gas, and water; this time for broadband.  "Some Wall Street analysts have suggested that cable operators could eventually start charging subscribers or broadband video providers based on broadband usage."  And John Malone, Chairman of Liberty Media, seems fully behind "'various tiers of connectivity,' possibly with built-in video offerings or bundles." And I am sure that these fees are hoping to encourage cable customers to retain their cable subscription and take advantage of lower cost bundles of broadband service.

Current streaming is already clogging the broadband pipeline and cable operators are charging more for higher speeds.  Not happy with unleaded, pay more for ultra supreme.  But consumers who find themselves charged by actual usage will want to have a counter attached to their system to keep track of how much cost is flowing out.  Hit your peak before the end of the month and you might feel the need to turn off broadband till the new billing cycle starts.  And don't forget to password protect your home WIFI; no one wants to pay for non-family members.

It harkens back to the day when we feared making a long distance phone call for an extended length of time. It took some time before we moved to an all you can call phone bill.  And no one wants to move backward.  We can only hope that through technological innovation and more competition, broadband access becomes ubiquitous and the cost of a stream so low that usage fees won't matter.

Content Deals Continue To Prove Its Title As King

A couple recent content deals only seems to confirm the importance of content to distribution.  When Viacom didn't renew its streaming deal with Netflix, there may have been some thought that cable operators convinced them to give it that exclusivity.  But that is clearly not the case as Viacom has struck a new streaming deal with Amazon Prime.  "In a letter to customers, Jeffrey P. Bezos, Amazon’s chief executive, said the deal gave Prime Instant Video more than 250 TV seasons and more than 3,900 episodes from Nick Jr., Nickelodeon, MTV and Comedy Central." The quantity and quality of shows can certainly bring enormous value to the Amazon subscription service.

Another renewal sure to please football fans, Verizon Wireless and the NFL have renewed their streaming service.  DirecTv may get all the games on TV, but Verizon Wireless once again has the streaming rights.  And for those hardcore fans that need their fix away from the TV set, Verizon can deliver an exclusive content experience. 

It is these types of content deals, offering exclusivity in the streaming space, that further differentiates and adds value to the online subscription model.   Whether consumers cut their cable cord to rely on streaming solely for their viewing entertainment or add these streaming services to their entertainment budget may just be the question that haunts cable operators. 

With competition growing in the online space, content deal negotiations will only grow and the costs for rights will only increase.  Content is King in the battle for distribution growth. 

Zynga Needs Another Hit

With the news that Zynga is laying off staff and closing offices, it speaks directly to the fickleness and changing interests of consumers.  Where once its games were the hot properties, from Farmville to Words With Friends, today it is Candy Crush Saga and Dots.  And tomorrow it will be something else.  The challenge for Zynga and every other company with a hot product or service is sustainability.  To be a one hit wonder is nice but it tends to rise too flash and drop just as sharply.  Companies that build a steady presence and look ahead at a pipeline of new ventures are the ones to stay relevant in the long run.

Zynga can survive if it can once again capture the hearts and minds of users with a next new game; otherwise, players will only continue to tire of the current games and seek out new challenges elsewhere.  It is happening to Zynga but it happens to every other company that seeks to stay competitive.  NBC for example saw its Must See TV on Thursday evaporate as show ratings declined and audiences didn't embrace the next series.  They fell from first to fourth place on Thursday nights.  Unlike Zynga, they have the advantage of other nights and other shows to keep surviving. Atari was once the king of TV gaming, but new products and new games changed the landscape.  And even Apple feels the pressure to keep innovating or to see product share decline. 

And so Zynga needs to cut costs while increasing its spend on new ideas.  Zynga needs another hit.  And for today's hot games; don't worry Zynga, they too will feel the same pressure you are feeling as the next new game hits the market.

If Your Product Starts With An "i", Does That Make It An Apple

Apple seems to be the king of the little "i" as most of its products start with this letter.  There is iMac, iPod, iPad, iPhone, iMovie, iTunes, and more.  So whenever we guess the name of the next product to come from Apple, like iWatch, we assume that it too will start with the little "i".  And so we now expect that Apple will announce next week a new streaming radio service to augment the iTunes brand with the name iRadio.  "Apple is said to have broader ambitions for iRadio than existing streaming radio services, including the ability to purchase a song from the iTunes download store after listening to it and software that predicts what tracks listeners will enjoy based on their existing iTunes collections."

Will iRadio indeed become the name for this new service?   We should know on June 10 at its developer conference.  Of course it may still depend on how many music deals are finalized.  With Pandora and others already serving this marketplace, Apple may need more differentiation to attract these current users to try their new service.  And Apple's marketing hardly ever disappoints. 

Could Apple iWatch Beat Google Glasses?

In the classic game, Who'd you rather, comes the question regarding wearable devices.  Would you rather wear glasses or a watch?  Google Glasses is a real product while the Apple iWatch is a term not yet coined officially by Apple.  And until it is official, we can only speculate about what it can offer.  The folks at Business Insider have an idea.  And they see 95 reasons consumers would use an iWatch.  Their bottom line, "An iWatch will be very useful – and useful things sell by the boatload."

So would you rather wear glasses or a watch or can the answer be both?

Are We Facing Video Gluttony?

At time, I am struck by how often history repeats itself.  And how change, when you notice it at a macro level, follows some very similar behaviors.  Classic marketing has taught us about cycles of segmentation and fragmentation, and we are forever seeking new ways to behave that ultimately makes our lives easier and perhaps simpler.  It could also be said that we sometimes overindulge when faced with too much of a good thing. 

That is how I see what we seem to be facing in the world of video content.  Choosing what to watch and when to watch it gets harder and harder.  When there were fewer outlets for viewing, others (notably the broadcast networks), programmed the best of the best for us to watch.  Choice was much more limited but ultimately we were only seeing the best shows.  The rise of cable meant more outlets for viewing and more choice.  And now the rise of online has led to not only user generated content but now more choices for professionally produced content.  A feast of video content that for some has resulted in binge viewing.  In an attempt to catch up and watch entire series of programs, we sit for many many hours in a row.  Thus the reference to gluttony.

But is it starting to be too much?  As classic marketing cycles suggest, we seem to be in a period of intense fragmentation of video content, both long and short form.  And not that the highest quality still exists among this infinite increase in supply, only that it is now so much harder to find it and enough hours to consume it.  A day is still only 24 hours long and we sleep through about a third of it. 

Despite this path toward gluttony, we now have more control over what we watch, when we watch and where we watch it.  And that approach, TV Everywhere, continues to expand.  Over time, this fragmented marketplace will indeed consolidate again and bring forth a more segmented content platform.  Cable has seen it as networks are owned by large media conglomerates, many with broadcasters themselves.  And this segmentation should happen in the online world as well at least until the next disruptive change comes along.

So enjoy the video feast but perhaps be wary of what you choose to consume and view.  I'd hate to find it leading to such disenchantment of video in general that we move from gluttony to starvation. 

Dish Network Pushing Hard For Wireless

Two interesting articles in the news.  The first article from Reuters was that Dish Network has raised their bid for Clearwire while simultaneously trying to buy Sprint as well.  The second article, in the business section of The Wall Street Journal, talks about cord cutters not only dropping their cable subscription, but their wired internet subscription as well.  "Hundreds of thousands of Americans canceled their home Internet service last year, surveys suggest, taking advantage of the proliferation of Wi-Fi hot spots and fast new wireless networks that have made Web connections on smartphones and tablets ubiquitous."

Does Dish Network see the same trend?  Along with a satellite business, Dish must certainly believe as well that owning a wireless universe could make them a stronger competitive threat to cable.  And as long as the Wi-Fi cost to the subscriber is seen as a good value,  a likely disruptor to the wired world. 

For light users of video streaming, a Wi-Fi solution is seen as far cheaper than a cable and wired broadband subscription.  But wireless providers may not be willing to support the heavy streaming user with an "all you can stream" solution at one low monthly price.   Those users may indeed find more value staying with their cable and broadband provider.  That is until a company can build out a scalable solution of wireless that can be offered at a lower cost and with higher connectivity speeds.  And that is likely the direction Dish may seek to take in buying up companies like Sprint, Clearwire, and Lightsquared. 

A Drought of New Product Releases At Apple

The Business Insider points out in today's article that "there is also evidence to suggest that something big has gone wrong at Apple over the past year. And that something, we would guess, is likely problems with the launch of a major new product category--namely, Apple's television set."  Certainly the rumor mill has gone on for some time that an Apple TV set was in the works but it has yet to materialize.  And neither has any other new product release.  And according to their chart, "Apple is in the midst of an unprecedented drought in terms of new product launches."

So while that article presses on the problems at Apple, today's Bloomberg article from an All Things Digital interview with CEO Tim Cook is meant to let us know that a little patience will produce great results.  "He singled out television and wearable computing as areas of interest."  When and what those new products will be remains to be seen.  But if you have faith in Apple, they will deliver.  

Aereo TV Reviewed On Cape Cod

Aereo TV is expanding despite lawsuits and threats to turn broadcasters into cablecasters.  In a review in today's "capecodtoday", the review deemed the service as worth it.  And for $8 a month, Aereo offered a cheaper alternative to cable for access to about 20 channels of content.  The stream is accessible on computers and mobile devices as well as through a Roku box for access on a TV screen.  In fact, the service reminds me of the early days of cable when cable boxes only got about 36 channels of content for an affordable low price.  But of course those days are gone.

So here is the most interesting part of the review for me.  "For the geeks in the audience, our testing was done on a Comcast home network connection that read 25 MBPS down and 11 MBPS up. We tested on a Wireless G, Wireless N and wired Ethernet connection."  That's right, you still need to buy broadband access, either from your cable provider or if available a telco provider.  And while the overall cost may be cheaper for the consumer, the cable/telco company is still getting a monthly subscription fee for their service.

So what should it say to the broadband side of the company?  You can win back those cord cutters to Aereo if you offer a competitive low cost package.  Tout the lower bundled cost of cable and broadband and enable authenticated streaming of cable content.  Rather than fight the battle in the courtroom, market your superior service and easier access.  Enable third party boxes like Roku, TiVo and others to work with your infrastructure and build the better mousetrap.  Till then, this is the message that the consumer is hearing.  "Aereo is a service that works well and is available right now. It does what the company promises and at a highly affordable price. Aereo provides a rich channel selection and a free virtual DVR service – far more than “basic cable” offers."

Aereo TV is here because you left the door open for them.  But you may still have time to shut it and offer different sizes for different customer needs.