More TVs Are Web Connected

Whether you own a smart TV or not, you are likely already able to stream video to your TV set if you have a broadband connection in the home.  In fact, "63 percent of all U.S. broadband households now have a TV connected to the internet, according to a new report from the Diffusion Group (TDG). That number is up notably from last year, when 53 percent of broadband households had at least one of their TVs connected."  That is a big jump of 10 percent in just one year.  Whether it is a smart TV, Apple TV box, Roku, PS4, Xbox, blu-ray player or other box, broadband households have the means to connect their TV set to the web.  And they are taking advantage of these devices to stream Netflix, Amazon Prime, Hulu, You Tube and more.

And I suspect that many homes have more than one device connected to more than one TV set.  According to the research, 42% are connected to multiple sets.  It certainly is true for us.  My son likes to watch Netflix on the HDTV set in the basement while my daughter likes the laptop.  Good news indeed for content creators but a challenge for broadcasters and cable concerned with the rise of cord cutting.  And with Aereo fighting for its right to stream broadcast channels, an opportunity as well. 

Should Charter Cable Pick Up The Pieces?

Given the move by Comcast to sweeten the deal to acquire Time Warner Cable, what is the next move by Charter.  Will they counter bid Comcast or work with Comcast to pick up systems that Comcast may need to give up to satisfy the FCC?  Or will Charter reach out to other cable operators, most likely Cox Cable or Cablevision, with a compelling offer to sell?  It seems unlikely that Charter, after all its positioning, will simply tuck in its tail and scamper away, with nothing to show for its efforts. 

Certainly Liberty CEO John Malone and Charter CEO Tom Rutledge are discussing their options.  And a do nothing scenario makes no sense given their interest in pursuing more consolidation of the cable industry.  So what about thinking out of the box a bit.  Should they also consider a telco for acquisition.  Verizon FIOS might be out of the question but what about AT&T and its U-verse business.  Liberty is no stranger to the wireless business and broadband is both a wired and wireless infrastructure. 

A Comcast - Time Warner merger may be only the beginning of what could be an interesting M&A year.  Charter still has the opportunity to further shake-up a rapidly changing industry.   And fiber to the home does not necessarily have to be the final solution. 

FCC Should Let Comcast Buy Time Warner Cable

Charter Cable may want Time Warner Cable (TWC), but Comcast is willing to offer the asking price.  And the FCC should let Comcast win with no strings attached.  While the concern may be that it would make Comcast too big, truth is it could enable a more improved infrastructure.  As to the worry of lack of competition, that already exists. 

In most markets, there is only one cable operator, one telco, and DirecTv or Dish.  Some markets get the an overbuilder like RCN or WOW to compete with the cable operator, but it makes little difference.  So whether the cable operator in a market is Comcast or Time Warner Cable has little effect on the consumer.  It is an oligopoly no matter how you look at it.  The only way that really changes is for the FCC to encourage new broadband competition.  Unfortunately, Lightsquared is in bankruptcy and other options don't yet exist.

So this acquisition makes sense for Comcast.  And TWC sees Comcast as the white knight and Charter as the enemy.  So marks a classic M & A scenario.  Will consumers see a reduction in their bills from consolidation, unlikely.  Programmers and vendors of Time Warner Cable will be most affected.  Comcast likely gets the lowest license fees and best prices so once TWC systems are Comcast, programmers will lose any differential they have between the two contracts.  For example, if a network charges TWC $0.10 a subscriber a month, they may only be getting $0.08 a month with Comcast.  Comcast will see more cost efficiency while the programmer immediately loses $0.02 a month on each subscriber.  Add up the channels and add up the months and it can be quite a savings for Comcast. 

At the same time, Comcast will have to spend monies on the Time Warner infrastructure in order to align it with other Comcast properties.  But in the long run, it could make for a better experience for TWC customers.  And it may help to win back some of the customers TWC lost from its nasty license fee negotiations. 

Charter may try to counter bid.  How high they would be willing to go remains to be seen.  But it is unlikely that Charter will ever get the chance again to become a much bigger player, something John Malone seemed to desire when he invested in Charter.  It could be fun to watch Charter battle Comcast for TWC systems.  But should Comcast win, they should argue to the FCC it makes sense to own all the systems.  It makes no difference given consumer choices for their cable and broadband provider. 

Streaming Video Hogs Bandwidth

Whenever my internet stops refreshing pages, I have to yell to my kids to see if they are watching a video.  It seems, especially when they are watching on their iPads, that my computer can't access a web page or even simply refresh a page.  And once they put their video on pause, a simple click gets the computer working again.  And I know that my household isn't the only one that suffers from this phenomenon. 

It seems that streaming video has become broadband hogs.  And You Tube and Netflix may just be the worst culprits.  In fact, "During peak watching times, Netflix accounts for around a third of all downstream Internet traffic in the U.S., according to Sandvine, a company that monitors networks."  The more households watching, the worse the ISP performance.  Given the growth of streaming video, this problem will not be going away anytime soon. 

An added problem is that ISPs no longer have to abide by net neutrality rules.  ISPs can slow down these streaming services thus causing more buffering issues with the user.  And while they claim they still treat all web traffic equally, consumers are noticing that Netflix and other streaming services are slowing down.  What is needed is more technological innovation in streamlining the size of files while increasing total bandwidth.  For this household, that couldn't happen fast enough.

TV Everywhere Includes The Bathroom

It's no surprise that we do are best thinking on the toilet.  Well it seems we also do our best viewing.  Whether streaming video, reading e-mail or perhaps a book, or even playing games, consumers like doing these activities even when on the toilet.  "An offbeat survey finding: 40 percent of adults between the ages of 18 and 24 use social media in the bathroom."  Well with smartphones and tablets invading our homes, they seem to never leave our side, no matter what room we are in.  Now I won't start asking if you are part of this large minority but I would suspect that this trend is growing and should exceed 50 percent in a year or so.

Not to be a stickler though about hygiene nor am I a germaphobe, but with so many devices being touched in the bathroom, how clean are our screens?  And does this 40% even consider wiping down their screens once they leave the bathroom?  I suspect that percentage to be much smaller.  We are simply obsessed with our devices.  And our mobile screens are being enjoyed in every room in our house and that includes the bathroom. 

Charter Cable Finds New Angle To Acquire Time Warner Cable

Time Warner Cable didn't feel the love from Charter's initial bid to acquire them.  And Charter Cable wqill msot likely have to raise its bid to gain control.  But in a move to assure acceptance of a revised bid, Charter is working to nominate "friends" to the Time Warner Cable Board of Directors to help move its efforts forward.  "All 13 of Time Warner Cable's board members are up for re-election at the annual meeting this spring, presenting Charter with a rare opportunity among recent hostile bidders, to take control of the board."  Why its board elections are structured this way is a big problem; at the same time, the timing works well for Charter.  Other companies would be well advised to pay attention and restructure their board elections so as to stagger them across time. 

Whether Charter tries to acquire all of Time Warner Cable or strikes separate deals to sell some systems to Comcast is another question to ponder as this acquisition move strengthens.  Should Charter find that it can swallow all of TWC, I would question whether they should even consider selling systems like New York City.  Sure, Comcast would love to connect itself from New England down to Florida, but NYC is a crown jewel of their properties.  And owning that system and Los Angeles would mean having the top 2 DMAs in the country. 

Nominations for the board occur next week so the fight will only get more interesting.  Likely Charter has a strategic plan and is weighing different approaches to get control.  It may require the help of Comcast, but then again, it may not. 

Snow Days Good For Netflix

It has been a brutal winter with snowfalls above average and cancelled school days adding up.  With the kids home, the question of what to do always gets asked.  And so it was earlier this week that I acquiesced to my daughter's urging and subscribed to Netflix.  Sure we have access to cable and on demand and a number of premium cable channels, but she had shows she wanted to watch and Netflix offered them.  The result, my daughter has become a binge viewer of these shows and my son has added the app to his PS4 and started to watch his shows and movies as well.  Frankly, at $8 a month, it was cheaper than going to the movies.  And at least for this horrible winter, some welcome relief. 

Are You Ready For More Football?

Recognizing the rating success that NBC has gotten from Sunday Night Football, CBS has shelled out additional dollars to add Thursday Night games to the prime time window.  Despite the success of its current line-up, most notably The Big Bang Theory, CBS believes football generates higher revenues and better revenues.  So moving the Big Bang to another night seems the best next step.

As a football fan, I love Sunday afternoon for football and I am lukewarm about Sunday Night and Monday Night games given how late they start and end.  But it is unlikely to believe that these night games would ever start for the east as early as 7pm.  So adding another weeknight of football only dilutes the total enjoyment of Sunday football. 

Will I watch, it depends.  Most likely only when my team is scheduled to play.  Where I love watching all the action of all the football games on a Sunday afternoon, the lone Thursday and Monday game are simply outliers to the main action.  Yes dollars over the fan always comes first.  Fans will watch but expect to hear more grumbling. 

Radio Shack Runs Super Bowl Ad, Then Closes Stores

Radio Shack decided to create a memorable and most likely expensive ad, given the talent appearing in the commercial, and to run it in the Super Bowl.  Can you say expensive?  So how do you follow up your plans to take the 80's back and show the world the new Radio Shack?



Answer, you decide to close a ton of stores.  "According to people familiar with the matter, RadioShack is planning to close around 500 locations in the coming months. It isn't clear which of RadioShack's roughly 4,300 stores will be closed and when exactly the closings will begin."  Sure your ad gets a lot of plays, but you created a PR nightmare.  The sound of cash being flushed down the toilet.  Rather than tell the country that you are embracing change, you go 360 on us. 

Truthfully, what would have made a great companion piece in the news would have been how you have an aggressive plan to revamp your stores to reflect a new approach, not close them.  How does that align with your ad?  Is operations not talking to marketing?  Heck, I would have closed out your ad with a rebranding of Radio Shack to something like "The Shack".   I would have started to redecorate the stores and refresh the facade.  It would have been a cohesive, integrated attempt to both communicate to the world of your new approach and to actually do what you say.  But closing the store simply tells the world that the left hand doesn't know what the right hand is doing. 

Take the 80's back, you may just have to start planting daisies to soon become another footnote like Circuit City, Highlands, The Wiz, and many other electronic companies that are no longer with us.  But so ironic that you spent so much money on an ad only to announce many store closures.  Dumb!