NBC Mishandling Brian Williams Apology

It is my humble opinion that NBC and the PR team at NBC are mishandling the fallout of the Brian Williams misremembering crisis.  That he "conflated" the episode in Iraq may have been the least of his problems, but using a vocabulary word that few know didn't help his effort at a half-asses apology.  And as Mr. Williams takes some time to withdraw from all public appearances, including a scheduled visit to The Late Show With David Letterman on rival CBS, it begs the question, could this PR nightmare been better handled.

I believe that NBC is using the wrong playbook.  To me, the better way to have handled this outcry would be to face it straight on with minimal delay.  I cite case book examples in the world of business from Tylenol, Coke and even Netflix to illustrate how a fast response can avert a greater disaster.  Tylenol did it by quickly recalling all product, apologizing and announcing efforts to use different packaging to demonstrate safety was their highest priority.  Coke tried a new coke formula but was quick to pull from market and announce the return of its classic formula.  And Netflix thought it could divide the company into two entities, DVD and streaming; they heard the backlash and were quick to stop the split and respond directly.

Yet the team working with Brian Williams has chosen to not follow these examples.  The apology was not to the point and direct; rather, muddled by shades of gray.  Had he then stayed out in the public, talking directly to anyone who wanted to hear his apology and how he was contrite and eager to demonstrate his trustworthiness, I believe this incident would have been minimized and Mr. Williams would have retained his good standing among the public.  Withdrawing from appearances, removing himself from his own nightly news program, has only added to the problem.  And it may now be too late for him to fully recover his good stature and high ratings. 

Are We Being Watched And Listened To?

I most recently met a colleague who had taped over the camera on her laptop.  She was concerned that the device could be accessed without her knowledge and she could be watched without knowing it.  Her concern may be a valid one; Cameras have become a way of life, whether used for traffic enforcement, shoplifting, security.  And we seem to be ok with it.

The latest concern is that the next generation of smart TVs from Samsung may also be listening to us as well.  With a capability to use verbal commands to instruct the television set what functions to initiate, comes some interesting news.  But buried deep in the privacy policy for their set is a notice that the set will also share all communication that it hears.  Surprising, it shouldn't be.  Business Insider also tells us that "the Siri dictation feature is sent to servers that reside in the US and that Apple, its related companies and agents have access to the contents of what is dictated."

Privacy may simply be a thing of the past.  As more and more devices connect to the internet, our actions and our words get more easily captured.  What others decide to do with it, whether to use for safety and security, advertising, or to uncover private and personal information remains to be seen.  But what should not be a surprise is that someone is watching and listening to us.  And so we become more responsible for our actions.  

Will Apple Get into The Subscription Video Business?

Just Monday, I mentioned Sony's plan to create an OTT video subscription service through their Playstation platform called Vue.  We also heard about Dish's plan as well with their service, Sling TV.  And of course there is Amazon Prime, Hulu, Netflix, and others with either linear or on demand streams of TV and movie content.  Now, it may be Apple's turn.

According to re/code, "Industry executives say Apple is in talks with TV programmers about deals that would allow Apple to offer an “over the top” pay-TV service".  Given their purchase last year of Beats and its music subscription service, the idea of video subscription is not far-fetched.  Apple has been thinking about such a move for quite a while.  And Apple already does quite well with video rental and purchase through its itune store.  Why not a subscription OTT service, too.

The decision to move in such a direction may lead to two possibilities, build from scratch or purchase another existing business.  Verizon tried with Redbox Instant and failed miserably.  They are trying again with the purchase of Intel's OnCue service last year.  One doubts if that acquisition will follow the same path as Redbox Instant.  It doesn't look good.    Maybe Apple sees an opportunity buying Dish and not only getting Sling TV but access to all that spectrum.  With so much cash in reserve, Apple could perhaps even buy Netflix.  A hostile bid perhaps, but who knows.

Building from scratch and negotiating license fees with today's cable and broadcast networks is a more difficult and circuitous path.  The timing might finally be right to try again but the ROI might take some time to grow.  But regardless of which path Apple chooses, the timing to add a subscription video business to its mix seems timely and right to do. 

Amazon Might Want Some Radio Shack Stores

What a shame that Radio Shack couldn't figure out a way to rebound from a dying business strategy and re-emerge as a leader again in a new mobile world.  But stuck with a name that reflects old technology, and a marketing campaign that fell flat, Radio Shack is on the verge of bankruptcy.

But others may benefit from the Radio Shack failure.  Amazon has watched as Apple has used a retail strategy to build stronger customer relationships and grow business.  Microsoft is also starting to venture into the retail world.  And now it might be Amazon's turn to create a retail presence.  By opening up stores using some of the Radio Shack footprint, Amazon would be able to let customers better interact with its product line, especially as its products are not currently getting much market share.  They could push better the Amazon brand and value and let consumers interact with its devices, including the Kindle, Fire tablet, and of course its Fire smartphone.  It would also provide a point of purchase for service issues as well as marketing events.

The challenge of acquiring Radio Shack locations might be the initial size of some stores.  In many malls, they occupy a much smaller square footage than say an Apple store and thus would limit foot traffic.  But that might be a short term problem as they renegotiate leases with malls for larger spaces.  Having a retail presence seems a strong strategic move to compete better in the product marketplace. 

Broadband To Be Considered A Utility Service

As our President faces the last 2 years of office, he no longer has to worry about reelection, rather about his legacy.  And so, as it pertains to the world of the web, he is pushing all out for full net neutrality.  Like water, electricity, and gas and oil to the home, Obama and the FCC want to regulate broadband service just as fiercely. 

Net neutrality assures that no matter what the content, whether a simple email message or full HD video, the internet would treat both pieces of data exactly the same, transmitting them at the same speed as everything else.  No blocking of content, no throttling or slow down of speed of certain data.  All will be treated exactly the same.

But it is that same heavy use of government oversight and regulation that can also slow down or even stop a free economy from doing what it does best, innovate to create new solutions to old problems.  With such freedom comes new opportunities, new industries, and new businesses.  But add government to the mix and while data is free, innovation may be what gets throttled instead.  That is certainly the line that broadband providers like Comcast and others fear buy a heavily regulated broadband industry.

Content creators and other users of the web hope that net neutrality assures that their work gets equal access and that they do not have to resort to paying broadband providers to get into the HOV lane.  Netflix agreed to pay providers to assure that their subscription service wasn't penalized; they would love to not have to pay for play. 

Is there a middle ground that assures equal access without over regulating the process?  Ultimately, a solution is needed.  Broadband access has become more essential to the home then ever before.  Some might even rank it above heat and water.  Still, at the end of the day, what is most needed is to lower barriers to entry in broadband platforms and encourage more competition.  That is ultimately what will enable consumers to find the best possible value for the best price. 

More OTT Aggregators Coming

As cable prices continue to rise, consumers eager for more provider alternatives will soon have multiple ways to watch TV networks without a cable subscription. Certainly shows from different cable networks end up coming to Hulu, Amazon, and of course Netflix, but they tend to be from past seasons and not the current one that is airing on the respective network.  But now these networks are making distribution deals with OTT services to offer their networks across streaming platforms.

Recently, Dish announced its own OTT service called Sling TV.  And now we have Sony, working through its Playstation division deliver its OTT streaming service, dubbed Vue.  According to Gigaom, "Sony announced in recent months that it has struck agreements with CBS, NBC and Fox as well as Viacom, Scripps and Discovery for Vue."  That means that networks like HGTV, Food, Discovery Channel, MTV and others will be included in this service.  Most interesting, NBC, owned by Comcast Cable, will also offer both its broadcast network as well as its cable channels including Bravo, CNBC, USA, and more.

Given the threat of cord cutting and the desire to be accessible to the next generation of consumers, the move to streaming is a necessary one.  Certainly the cable companies need to also create an authenticated streaming version of their entire cable line-up, accessible through streaming and available inside and outside the home, to best compete with competitors like Sling TV and Vue.  At the same time, the networks need to not lose their relevancy against other OTT providers like Netflix who value the show over the network and are pursuing their own original programming strategy.  Otherwise, these same networks will fear a complete erosion of not only their license fee model, but eyeballs to their network and the ad dollars they charge. 

Networks Starting to Say Who Needs Cable

License fee negotiations between network and cable operator tends to be acrimonious these days.  Where once this relationship was more friend than enemy, today, that frenemy relationship has become a more business relationship.  As a result, each time a network is up for license fee renewal, the likely outcome includes a period of being dropped before returning to the line-up.

But networks are also watching the success of subscription services like Netflix, Hulu, and Amazon, and are pushing forward with more OTT deals outside the cable-network boundaries.  Last year, CBS and HBO unveiled each of their OTT subscription services.  And Showtime soon followed the HBO announcement.  WWE offered a subscription service and just this week announced that they have reached one million subscribers.  Today, we have Viacom announcing that their children's network, Nickelodeon, is also planning to sell an OTT, direct to consumer, subscription service too.  Its success could lead to other networks in its stable, MTV, VH1, and Comedy Central doing the same thing.  And not having to work with a middleman like the cable operator may become more appealing as consumers get tired of paying high cable rates.

Consumers wanted a la carte and now they are likely to get it.  Unfortunately, buy too many of these OTT subscription services and your entertainment costs will soon exceed the cost of your cable subscription. The bundling of cable networks may have driven the total costs too high, but it did offer something for everyone.  A la carte may seem cheaper but only if a small portion is all you desire.  Cable operators had fair warning to fix their programming strategy but it got out of control.  Its time to revisit and fix their offerings and pricing. Enable TV Everywhere to authenticated customers to create a better must have subscription.  Cable can fix this mess but the time is now. 

Networks Quickening Their Demise

With viewership erosion due to streaming video, network ratings and consequently ad revenue are suffering.  But rather than seek ways to grow eyeballs, networks would rather add more ad minutes to stabilize and try and grow revenues.  But according to two different research studies, as mentioned by Deadline Hollywood, "Major TV network owners led by Viacom, A+E, and Discovery significantly increased the amount of prime time commercial minutes in their shows in Q4, helping to compensate for a decline in viewing."  It seems adding ad minutes is both short-sighted as well as likely to drive viewers to flee networks faster. 

Advertising is necessary to support content creation and cable networks in particular have enjoyed a two stream revenue model of subscription and advertising dollars.  But adding more ad minutes that interrupts content is what has driven users of TiVo and DVRs to embrace their trick features and fast forward through ads. And millennials have discovered the joy of subscription services like Netflix to enjoy content without any ad interruptions.  It is that next generation that is leaving traditional viewing patterns.

For now, networks are seeking short term results but it is leading to long term losses.  According to the research, "the most aggressive network owners were those with the worst ratings trends".  That is to say, more ads lead to lower ratings.  Perhaps it is time for TV networks to become more innovative with their advertising issues.  It is time to break away from the notion of ad breaks and think more outside the box; otherwise, sticking with the current approach is hurting your long term outlook. 

Is it time to consider again network sponsorship of shows, ad integration inside programs, and other ad efforts.  Less ad breaks insure viewers stay on the channel and deliver a higher attention span.  The longer the break, the easier it is to switch channels.  Less clutter, more impact.  It is time for networks to reassess their ad strategy.  What has worked in the past is now not working at all.  The model is broken and needs to be fixed. 

Cablevision To Sell WIFI Phone

In a move to try and displease cell phone companies, Cablevision has announced its plan to sell a WIFI only mobile phone service.  Dubbed Freewheel, not to be confused with the Comcast-owned enterprise service, FreeWheel (a capital W changes everything), Cablevision sees a market for low cost mobile phone customers. Cablevision customers can add on this new service for only $9.95/month while non-Cablevision customers can subscribe for less than $30 a month.  The service has one phone choice at the moment, the Motorola Moto G.

Certainly, the $10 a month price point undercuts all other cell phone carriers so the ideal market is Cablevision's own footprint where it has been expanding its WIFI capabilities.  But will the new service attract a sizable customer base to call it a successful business idea?  The low price point may sway some but as a society we have becoming increasingly mobile and the service will certainly have more dead spots than any cellular service.  And with cell companies already in a price war to attract new customers, coupled with more choices of smartphones, the Cablevision price difference without great connectivity, may not matter. 

My other question is how is Cablevision planning to sell its service. Has it gotten Best Buy or Target to offer it in any of its stores?  Cablevision once tried to enter the electronic business itself when it bought and ran Nobody Beats The Wiz for a number of years.  That chain is now a memory.  Cablevision could try to sell its phone in its own service centers but they don't tend to be too retail friendly either.  Online might be a consideration but consumers like to touch and try before buying; isn't that why the Apple stores are so successful. 

Cablevision's push into a WIFI phone seems one more attempt to compete with Verizon who overbuilds it across almost all of its franchise markets.  And while WIFI certainly augments the capabilities of a smartphone, the ability to be always available to accept a call or text may limit the appeal of a WIFI only phone.  Can Cablevision make it a successful business... I wonder.