Did XBox Hurt Its Future?

The Xbox One has yet to be released, but it certainly has raised the voices and irked a number of gamers.  "Earlier in the day, Microsoft had elicited groans from gamers when it announced restrictions on used games for the Xbox One and said players had to log onto the Internet for authentication."  With a price tag hitting $500 and an always on and connected platform, some wonder who the audience for the new box really is.  Perhaps too it is trying to be more than what gamers really want from a device, trying to replace the cable box in the home.  Will current XBox 360 owners upgrade or not and will the XBox One attract new users?

For Sony, the release of a new Playstation 4 at this time might just encourage some loyalties to switch to them.  First, the PS4 will cost $100 less.  "Sony also drew cheers from the audience at the Electronic Entertainment Expo (E3) in Los Angeles when it said the PS4 would run secondhand games and did not require an always-on Internet connection."  If gamers find compelling titles and a welcoming user experience, they might just find the share of market shift to their favor. 

Given the two different directions each platform is taking, the gloves are coming off, and a fight is imminent.  For other platforms, like the Nintendo Wii, timing is crucial for them to share how they wish to compete in a very tough gaming battle.  For this household, I can only share what my son, a current XBox user, is thinking.  He hates the authentication and always on issue as well as the fact that older games won't play on the new device.  It might just be time to look at the PS 4 and its games.  Put head to head, it will be fascinating to see which new platform, XBox One or PS4 wins this battle.

Social Media Can Hurt DVR Viewing

For live events and high involvement, edge of your seat viewing, it is harder and harder to watch them on a DVR on a delayed basis.  That is if you are also socially connected to sites like Twitter and Facebook.  So we are reminded in this story entitled "Game of Spoilers".  "The VCR, DVR and video on demand have freed us from the tyranny of TV schedules but the Internet imposes its own dictatorship — at least if the show is worth it. Raging at tweets for spilling the beans, or shouting "Shut up! I haven't watched it yet!" at your co-workers, proves increasingly futile."

Truth is, we have faced this issue for some time.  Want to watch a baseball or football game a few hours after the game may have already ended, don't check your Facebook feed.  But also don't turn on sports radio.  Want to watch the Oscars or last night's Tony Awards, stay away from Twitter as well as the next day's TV or newspaper.  Spoilers can get exposed at all times, especially for shows that knowing how it ends effects the enjoyment of the show itself.  Social media simply provides another means for revealing those spoilers.  And perhaps because it is so immediate and so pervasive, it is harder to ignore when we are delayed in viewing certain programming.

The article also correctly points out that not all shows possess the spoiler issue.  "Spoiling 'Big Bang Theory' is never an issue, says Thompson, even though its got a far larger audience than "Game of Thrones" — 18.68 million vs. 13.6 million, according to Nielsen."  Knowing its outcome doesn't hurt the comedy of the show. 

For advertisers hoping to keep their audience engaged and overcoming the other concern of the DVR, like fast forwarding through commercials, live and appointment viewing type programming can assure that a majority will watch at the immediate time and day the show is being presented.  And that means better ratings and higher ad revenue. 

TiVo's Win Is A Loss To Some Shareholders

TiVo may be the premier DVR on the market.  It may have the edge on the technology and the patents to back it up.  And they may be winning their legal fights, either by court order or by settlement, but sometimes good isn't good enough.  And shareholders not happy with the verdict sold their shares and watched the stock price go markedly lower.  Apparently, they expected a bigger payday.

Today, TiVo has a superior product; yet, as we all know, that technological superiority only lasts till the next technical improvement or disruption comes along.  TiVo still need to get deeper in with the cable operators where the heart of their growth lies.  TiVo needs to be integrated in every cable set top DVR box.  That is where the subscription revenue, ad revenue, and research revenue lies. 

Until consumers can buy their TiVo box at retail and install without a cable truck roll to get connectivity to the cable pipe, most consumers will let their cable company give them a generic DVR box.  If it is too much of a hassle, a majority of consumers won't take the extra time to do it themselves.  Should TiVo get the cable operators to agree to a simple connectivity and authorization online without a CableCard, then consumers might just be willing to buy their own set top box.

Shareholders may be bothered short term by the outcome, but long term, TiVo still offers a great product. 

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.