The Future Of Fox News

It should come as no surprise that nothing lasts forever.  But we sometimes do seem surprised when news of change arrives.  Even more so, when that change is a result of the classic Lord Acton phrase, "power tends to corrupt, and absolute power corrupts absolutely".  We find it time and time again that those who see themselves above the law may not be inclined to follow those laws.  Such wisdom may now apply to Roger Ailes, CEO of Fox News.

The success of Fox News has been acknowledged as the direct result of Ailes.  He brilliantly created a tactic that paid millions of marketing dollars in exchange for basic launches on cable systems, built a conservative point of view and attracted a huge audience to it, and created such demand for the channel that those same cable operators ultimately paid back those marketing dollars and much more in higher and higher license fees.  Add a rising ad marketplace and Fox News under the command of Ailes flourished.  The news niche attracted viewers not happy with the viewpoints of CNN or MSNBC. 

But times are changing and the Murdoch empire, owner of 21st Century Fox, is now in the hands of Rupert Murdoch's two sons.  They may see a different direction for Fox News.  And the recent allegations about Ailes regarding sexual misconduct may simply be the catalyst for his dismissal.  Per the Daily Beast, Ailes is "poised to step down in the wake of a sensational lawsuit alleging sexual harassment, discrimination and retaliation, filed barely two weeks ago by fired Fox anchor Gretchen Carlson."  Whether Ailes is guilty or not may not change the ultimate outcome. 

What does a Fox News, without Ailes in command, looklike?  Do notable anchors and personalities on the channel stay or leave post-Ailes?  Some may even have out clauses in their contracts that make them null and void should Ailes leave the company.  Will the channel retain its conservative viewpoint or seek another.  20 years for Fox News is a long time but as I said upfront, nothing lasts forever.  Look at almost every other cable network and it looks quite different today from 20 years ago.  With the expected end of the Ailes era at Fox News, change is coming. 

Netflix "Ungrandfathered" Me

Hey Webster Dictionary, it's time to add a new word - ungrandfathered.  Per Netflix, it is the act of eliminating any price discount associated with being a long time subscriber and substantially raise your monthly fee to match with new subscribers.  And while Netflix may see a revenue bump, they may also face higher than typical churn rates too.  And with significant competition from Amazon, Hulu and others, Netflix can't expect rate increases to help their future. 

Of course, Netflix has more to worry about as my blog yesterday detailed.  When quarterly financials came out, Netflix failed to hit a number of metrics, including important growth numbers.  And while there was some growth, it was well short of expectations.  Churn will only erode those gains.  It is time for Netflix to actively find additional revenue streams to drive business growth.  And they must start soon. 

The Future Success Of Netflix

Nothing lasts forever.  Even Netflix knows that; they watched their DVD business erode while working to navigate the streaming world.  It was a bumpy ride along the way but the result so far has been quite impressive.  But growth appears to be declining, according to the Wall Street Journal, and international challenges and content costs aren't helping. 

In August, the remainder of the U.S. subscriber base will see its monthly fee rise to $9.99; for my household that is $2 more a month or a 25% increase.  Yet that is not enough to satisfy investors in the business seeking more future growth from the streaming giant against greater competition from Amazon and Hulu.  So what is Netflix to do as its Act 3?

Of the options to consider, Netflix might want to build out a streaming tier of live content, at an incremental cost, as a skinny bundle to drive more cord cutting. They could add more advertising to the mix, either with an ad supported option or with more sponsored content to the stream.  Netflix might consider growing through expansion; perhaps the purchase of a studio like Paramount or some cable networks.  For Netflix, standing still is not an option.  They learned that lesson from their DVD rental business.  Existing growth of its subscriber base will dry up and future revenue growth must come from other business platforms. 

The Sharks Are Circling Viacom

Given the health issues surrounding Sumner Redstone and the management conflicts hitting Viacom, I am surprised that it has taken this long for the sharks to circle Viacom. But such seems to be the case with news that folks are looking at pieces of the company.  That piece is Paramount Studios, a once proud film making company that has had a hard time finding financial hits.  Spongebob is not as popular as Dory it seems.

According to Bloomberg, "Chinese billionaire Wang Jianlin’s Dalian Wanda Group Co. is in talks to buy 49 percent of Paramount Pictures from the company."  Whether such a deal gets approved remains to be seen but it shows that the company is having problems.  Still, if Redstone has any control left, why wouldn't he try to see his other company, CBS, take back Viacom and help recharge its engines.  With Comedy Central and Nickelodeon still valuable cable networks and a storied history from Paramount, the hope is that there is still value left to unlock.  New management for Viacom may be the answer and CBS could use the assets to stay strong and competitive against NBC and ABC. 

Comcast Outage Outrage

Are you a Comcast customer?  Then you were likely affected by the outage of service.  It seemed to have started earlier in the day when Comcast business phone customers lost telephone service.  And this wasn't a localized problem; rather multiple markets coast to coast were impacted.  Yet, it was barely reported by media and the possible outrage contained.  One must wonder the economic loss of business that resulted from this outage.  Not for Comcast but for those businesses that rely on the technology to deliver. 

Those outages became personal last night when our cable, internet and phone all went down in the early evening, preventing us from enjoying the MLB All Star Game, and our connectivity to the world.  Our initial call to Comcast required multiple dials to get from automated attendant to a real service rep.  They knew little of the problem in the area and spoke like no one else was having any problems at all.  No matter how pissed off I might have been, it would not quicken the repair to our service.   We were at the mercy of Comcast. 

Our dependency to the internet is especially disconcerting. We are linked to it with every key stroke and despondent when we are cut off.  Luckily, our cell phones are linked to a different provider, enabling us to ultimately get connected and feed our fix.  But, the loss of service was a reminder just how dependent we are. 

Video Snacking To Drive Revenue Growth

We are about to get overwhelmed with tons of short form video content as the long tail of video consumption is about to get longer.  In today's NY Times, Tronc, once known as Tribune Publishing, has revealed their plans to increase video content 1000% daily.  And other online publishers are following this trend.  With video content attached to every online article, the hope is that more viewers will stay on the page longer, click the video, watch the ads, and continue to snack on other articles and other video content.  A very sound strategy.

Whether the content is created specifically for the page or linked via syndication or other means, the direction is clear.  More video snacking with content that connects with the viewer should create a better user experience.  And hopefully drive online revenue higher.


Two online companies, Wochit and Wibbitz, seem to have the means to quickly and efficiently link content to articles.  "The two services’ automation features work in similar ways. They analyze, and may summarize, text, be it a script or a traditional news article, and then automatically find photographs and video clips to go with it." Whether users find the additional content useful to them or simply clutter may determine the long term viability of these services.  But done right, the use of video on the page should be good news for these content companies. 

Cameras Are Everywhere

In the wake of recent news events, the accessibility and use of cameras has provided a video record of what has often been a he said, she said exchange.  That 1 picture is worth a 1000 words may be true, but it may not be the whole truth either.  Still, that video cameras are everywhere is becoming a more important part of our daily lives.

It seems that every sidewalk has a video camera focused on it, every store has a video camera recording each corner, and in everybody's pocket there is a video camera, our smartphone, ready to record events as they happen.  And we are being record in our good times and in our bad.  Cameras are everywhere.

That it catches criminals and criminal intent is a very good thing, that it provides a potentially independent view of a situation is also good, and that it hopes to enhance security and provide protection is important.  But the reverse is a loss of privacy, individual freedom, and a likely permanent record of our actions, good ones as well as our indiscretions.  Personal privacy is lost for the greater good. 

I've always enjoyed catching video moments of my family's lives.  They are a permanent reminder of the events of our lives.  I'm happy too when citizens with their phones capture everything from silly moments to criminal activity.  The hope is that truth of the moment shines through.

But when it comes to media and the availability of these "videos", I worry that sensationalism outweighs truth, ratings over discretion.  Is it necessary to show everything, no matter how insensitive or gory it might be?  Does it make our society more compassionate or does it start to desensitize us?  There was once a time where media withheld material that wasn't relevant to the situation; today, the need to beat out other news organizations means that faces are no longer blurred, blood is no longer ignored, and pain and violence are showed in all its glory.  In the drive to show everything, we may be becoming more hardened to it.  Our scale of restraint has vanished.  And I worry that we, as a society, are heading down a very dark path. 

Netflix And Comcast Are Now Frenemies

In a not so surprising move, Comcast and Netflix have found a way to cohabitate.  Comcast customers that have the latest set top box, the X1, in their homes will be able to watch Netflix on their TV by simply switching to the Netflix channel.  Previously, users would have to switch inputs from the set top to another box, their Chromecast, Apple TV or Xbox, before accessing their Netflix subscription.  One less step, but for those looking for simplicity, an important one.

So why did Comcast agree to let Netflix in the front door?  Perhaps they recognized that Netflix was not the reason folks dropped cable.  Perhaps by being customer friendly, Comcast sees customers take full value of their cable subscription.  Perhaps it provides a bit of revenue or maybe even some additional research into the minds of their subscribers.  And perhaps they realize that set top boxes may one day be history and best to get some incremental value before it is too late.

Regardless, the press has reacted quite positively the news.  I suspect that customers will as well. And a happy customer may just stay a Comcast customer. 

Apple Should Not Buy Tidal

Subscription content services are a nice business to own.  They provide a nice monthly stream of revenue that can be accounted for with limited risks in subscriber loss.  Heck even cable has seen a very small percentage still from cord cutting.  In music, the big player is Spotify and Apple Music would surely like to beat them.  But recent news that they might purchase Tidal is not the answer.  Sure it has Jay Z but that does not a business make.  And it certainly won't make Apple Music any better or bigger.  Whether it secures any exclusivity is questionable, especially when you consider what Apple may have learned from the book side of the business and dealing with both book publishers and eventially the Judicial Department.

Still, the strategy of building better content businesses is a good one for Apple.  Could that mean buying someone as big as Netflix or perhaps even a Time Warner Inc, home of Turner, HBO, and Warner Bros?  I would love that move.  But maybe something smaller is a better first step.  Given the Viacom issues and Sumner Redstone lunacy, Showtime and sister networks might be a better idea.  Lionsgate is picking up Starz; once owned, they could be in play too.  And let's not forget Scripps or AMC.  Overall, I believe that video subscription should be Apple's next big content move.

And as for SIRI and the Amazon Alexa competition.  That is a blog for another time.