Starz Follows HBO And Showtime

It only took about half a year for Starz to recognize that the leader in the premium cable space, HBO, was on the right track.  In a classic follower move, Starz has announced that they too will offer an over the top (OTT) app to consumers seeking its content, without also buying a cable subscription.  It has become a necessary step as their cable subscribers continue to downgrade and turn them off as well as their sister Encore networks.  Per Multichannel, the OTT platform is weeks away from being released. 

At the same time, rumors continue that Starz could be an acquisition target; however, given their lackluster results, their full value may be dropping precipitously.  The hope is that they can rebound by finding new customers interested in this new OTT service.  Most likely, the overall reason for an OTT distribution stream is to become more valuable for an inevitable sale of the company. 

NY Times Likes The Apple TV

Quite an endorsement today in the New York Times for the new Apple TV set top box.  The writer, Brian Chen, speaks glowingly of this new generation box, applauding it for both unique apps and a better remote.  It may be more expensive than other OTT boxes, but Chen remarks that "Apple TV is on the path to turning the television set into a smarter connected screen." 

The price point may drive some people away, but seeing how consumers are willing to pay more for a better built product has been the history of Apple.  They have done it with their iPod, iPhone, and iPad, and have kept their price point higher with the Apple Watch and now the Apple TV. The Apple TV starts at $149 while a Google Chromecast could access OTT streams for just $35.  Given the features described for the Apple TV, the higher price point might just be justified. 

Will the Apple TV be a holiday winner?  I'm sure it will be highly touted in all the Apple stores along with Apple Watches and other products.  For Apple it could be another strong quarter. 

Apple Measured On Growth Not Absolute Size

Despite stellar sales, multiple product lines, and a meaningful cash horde, Apple gets measured more on growth increases and not on total size.  That being said, Apple released its quarterly earnings last night and continues to outperform expectations.  Its just that most analysts focus strictly on its iPhone sales and much less on its other product lines. Can Apple continue this growth trajectory?  It depends.

It depends on how often consumers upgrade their iPhones.  That seems to be every 2 years or so.  it depends on how much bigger their international release can get, and it depends on what else consumers are willing to buy.  We certainly don't upgrade our iPads nearly as fast; mine is almost 5 years old and performs quite well.  It depends on how many folks finally switch from PCs to Mac laptops and desktops and how long they hold them till it is time to buy another.  It depends on how fast consumers accept that an Apple Watch is a must have product and how many choose to become Apple Music subscribers.  And now it depends on how well the Apple TV box, just available for purchase, is integrated into the home.  Lastly, it depends on the next innovation to come from Apple, whether an Apple Car, Apple streaming TV content subscription, Apple business services, Apple advertising, or another Apple technological product offering. 

And even if Apple turns from a growth company to a value company with sustainable revenue, free cash, and a steady focus on innovation, Apple can continue to be a major piece of our daily lives.  It is much easier to fall off the mountaintop then to climb it and Apple must continue to innovate or risk technological change making them irrelevant.  If they don't, they could one day be seen as the next Circuit City, Tandy, or Casio. 

Was The Yahoo Streamed Football Game Successful?

Last Sunday at 9:30 am ET, two small market teams, the Buffalo Bills and the Jacksonville Jaguars, played an NFL football game in London.  But unlike the last London game that was seen on CBS, this game was available on Yahoo.  And the question was whether it was a success.

It is the kind of question that is filled with too many variables.  The fact that it was in London, which no NFL fan thinks makes sense, or the fact that because of the time zone, it was seen at 9:30 am in the East, 6:30 am in the West, or that it was between two small market teams, all affects how successful such an experiment could be.  The NFL at least knows not to show a big market team or air it against another broadcast game; that would be economic suicide.  Still, the question of its success matters little. 

How a game is delivered to a TV set matters much more than whether it was through cable or satellite or wireless.  The NFL fan will watch the game.  The question really for the NFL remains how do they make the most money and for now broadcast and satellite beat Yahoo streaming any day of the week.  It is only when there is no other game to watch or at an absurd time that Yahoo has a chance to own more NFL games.  Will Yahoo outbid NBC for the Sunday Night Game or will Yahoo outbid ESPN for the Monday Night Game?  When they do, they will charge as much as they can get for access to the game and for advertisers to promote in the game.

For this first experiment, Yahoo charged a fraction of what advertisers pay for broadcast.  Most likely they reached only a fraction of the audience that such a game could get if on at a regular time.  The New York Times looks deeper at the numbers and questions how successful the Yahoo game was in reaching an audience.  I did turn it on for maybe 2 minutes of the game.  It looked like any other game with all the graphics similar to what a broadcaster would do.  But watching football on the tablet or computer is not like watching on the TV.  Maybe I could have pushed it to the TV, but I knew there were better matchups later in the day at 1pm ET, 4:30 pm, and 8:30 pm. 

Will we one day watch football streamed to our TV; absolutely.  As a technological shift, it is inevitable; but, as for when we watch it, 9:30 am is way too early. 

TiVo Wants To Give Away Its TV Research

TiVo saw an interesting way to congratulate the merger of ComScore and Rentrak.  It announced plans to offer free its TV research data next year.  While consumers may not care so much, neither should research companies.  Whether this news affects any companies seems unlikely although the point TiVo is trying to make does resonate.  Per Fierce Cable article, Frank Foster, Senior Vice President and General Manager of TiVo Research states "The focus needs to be on how you connect advertisers with audiences they really want to reach, with data that can ensure that, and metrics that can verify it." 

As consumers get more and more annoyed with ads that interrupt our programming and ad messages that border on the inane, both how the message reaches us and how it builds a positive relationship with the consumer seem more important.  Does the Gecko or Flo really sell more insurance or do they push us away; does Jan sell more Toyotos or make us cringe.  And as we seek content off the TV set, do ratings really matter?

Another Paid Streaming Service Joins The Mix

If you thought that cord cutting could save you money, think again.  The rise of so many streaming digital services could find yourself one day paying more for content then you were paying for cable.  With Amazon, Hulu, and Netflix each wanting you to pay $10 a month for their exclusive content, you can add a premium version of You Tube called YouTube Red.  Priced also at about $10 a month, do we see a price point that all these services like to reach, "YouTube Red will allow users to surf the site completely ad-free, across multiple sources, from desktop to mobile. Original programming and movies will also be available to YouTube Red subscribers, beginning next year. " This according to today's Multichannel News. 

And the more content you want, the more you will pay.  Last week, NBCU announced the launch of Seeso, a digital streaming content service that will cost about $4 a month.  It will include NBC shows as well as some original comedy content.  You might also decide you need HBO Now to assure you are receiving Game Of Thrones and other HBO content.  That will set you back another $15 every month.  If you like that, you may decide to add Showtime Now at $11 more a month.  And while Disney doesn't have a pay streaming service in the US, they are just announcing one to launch in the UK, per Variety.  And while there are still a number of free video content services, it is easy to see that the more content we want, the more we have to pay for.  Sorry, no bundling in the world of digital streaming. 

So lets add up what we know.  Netflix, Amazon Prime, and Hulu costs $30 a month for all three.  YouTube Red is $10, Seeso is $4, HBO Now is $15 and Showtime Now is $11 for a total of $70 a month for the 7 services.  Add your favorite music streaming service, Apple Music, Pandora, Spotify, and watch your dollars fly out of your wallet.  Our cable bill could one day look like a steal. 

Apple Music Singing Its Success

The three month free trial for Apple Music is ending for many early adopters and it is now time to pay the piper.  And according to Apple, 6.5 million subscribers have converted to the paid streaming model with another 6 million still under the free period.  Of course, once consumers see the bill appear on their credit card bill, they may have second thoughts.  But if they decide to remain committed to Apple Music, at about $10 a month, Apple would see a nice revenue lift of over $700 million dollars a year.  Should Apple capture more of those trial users, that number could continue to rise.

Still, it is hard to call this new streaming business a success.  With Pandora, Rdio, and Spotify still leading in users, and Tidal pushing too, Apple has a long way to go to turn this Music business into a leader.  Apple Music's options include adding an ad supported version as well as packaging it with its release with the new Apple TV box.  Bundling has worked in the past with cable and may just make sense with this model too. 

Can Apple Music become a leader?  That may depend on how aggressive they are with the business, whether they compete with pricing packages, modeling, or even through the acquisition of a rival.  And given the deep pockets and free cash that Apple has, it can take any route.  For this moment, adding $6.5 million dollars a month from Apple Music may be chump change, but it doesn't hurt either. 

Undateable Shows Live To Catch Viewers

There is something about live television that works.  Perhaps it is reminiscent of the Golden Age when TV was learning its craft and partly the notion that with live TV comes the danger of mistakes and unknown outcomes.  Live has made Saturday Night Live a better comedy show able to capture the latest news into its broadcast and deliver immediate outcomes.  And the format is being used at 8pm on Friday Nights with the show Undateable.

A serviceable comedy from creator Bill Lawrence, the series in its third season has decided to broadcast Live to create a more lively product.  The set looks like parts of the old Cheers set, and hopefully the magic pays off for Undateable.  The jokes are a bit lame but the writing incorporates the jokes of being live with breaking the fourth wall and of course mistakes from flubbing lines.  But somehow, it all seems to work.  The show is fun to watch and the cast seems to like the danger of live TV.  Music and special guests inhabit the bar to make a breezy comedy.  The hope is that the plots continue to tighten and the second bananas on the show further shine to create a more complete ensemble.  Overall, broadcasting the show live has raised the bar and the potential to becoming a better show. 

I will watch but I worry that shows I like tend to get cancelled.  I can only hope that this show is one of the exceptions. 

Netflix - How Much More Can They Grow

Netflix released their earnings this afternoon and the market didn't seem to like what they heard.  Earnings are down and costs are up and despite their plans to raise monthly subscription fees by a dollar, the market may be getting to saturated to expect more increases in growth.  Sure there is still growth but when it comes to the stock market, how much you grow matters more.  And Netflix might be leveling off.

As competition for content increases, costs to obtain more videos, either through acquisition or original content, will only continue to mount.  And given that Netflix has a one stream revenue model limits how much more they can keep producing.  Dollar increases a year may be nice but it may not be enough to offset subscription and content costs.  The stock market may not find Netflix the darling of streaming anymore until they produce a new revenue stream. 

When will advertising come to Netflix?  The push to produce is on and that strategic move might be the necessary price.  How they add advertising could also affect the subscriber base.  Commercial breaks are definitely not the solution; other ad tools are more desirable to keep its base engaged and paying.  Done well, ads will immediately boost the stock price,