When Redbox first partnered with Verizon three years ago, their joint venture, titled Redbox Instant, was seen as a possible competitor to Netflix and Hulu. It was a strategy to expand from the DVD kiosk business toward a streaming one with a partner with a great deal of experience in mobile. For whatever reason, that venture failed and Redbox Instant died last year.
Since then, Verizon has been experimenting with their own subscription streaming mobile service. And now Redbox has decided to go it alone too with a new venture dubbed Redbox Digital. But rather than be a monthly license fee subscription business, it appears that this new venture will attempt a transactional model. According to Variety, "Redbox hasn’t said anything about pricing or catalog for Redbox Digital,
but one can assume that it will largely mirror that of other services
that allow users to pay to rent or own individual titles, including
iTunes, Vudu and Google Play. That means that streaming rentals will
likely be significantly more expensive than the $1.50 Redbox customers
currently pay for physical disc rentals."
Why did the Verizon - Redbox Instant partnership fail? What did each side learn as they independently create other digital streaming businesses? And can either of these two succeed against the respective incumbents. The opportunity is there as long as each can learn from their past mistakes. I'd love to help.
Friday, July 22, 2016
U-Verse Loses Subs While DirecTv Adds Them
AT&T may just consider itself a tale of two cities. On one hand, they have the newly acquired DirecTv, a satellite service that saw a gain of 342,000 subs in the second quarter, while its competition, Dish, lost nearly as many. And on the other hand you have the telco digital service, U-Verse, what FIOS is to Verizon, dropping those DirecTv gains and more. They lost "391,000 U-verse TV users in the second quarter" per Fierce Cable. That's almost a 50,000 sub net loss for AT&T! What happened?
AT&T also reported more broadband losses as they were not able to convert their DSL base to IP. Did these customers go back to cable or did they ut the cord altogether? The challenge AT&T faces is how to keep promoting and growing the DirecTv business without taking that business away from its telco side. Is there synergy there to grow or a zero sum game? The last quarter financials questions where the business is going.
AT&T also reported more broadband losses as they were not able to convert their DSL base to IP. Did these customers go back to cable or did they ut the cord altogether? The challenge AT&T faces is how to keep promoting and growing the DirecTv business without taking that business away from its telco side. Is there synergy there to grow or a zero sum game? The last quarter financials questions where the business is going.
Thursday, July 21, 2016
Dish Loses Subs, What About DirecTv?
Today Dish announced that they lost over 280,000 subs in the second quarter. In 2015 they lost 81k subs in Q2. Springtime is not good for Dish. Coupled with a loss in broadband subscribers as well, per Multichannel News, Dish is facing some true challenges. And they will soon find out how their competition is doing. Is cord cutting at play for them or is something else occurring?
Later this afternoon, AT&T, owner of DirecTv, will be releasing its quarterly financials. Many expect DirecTv to meet or beat its numbers. According to the Wall Street Journal, AT&T expects both revenue and earnings to grow ahead of expectations. DirecTv may just benefit from the deeper pockets of its parent. Once the financials are released, we may be able to discern if DirecTv has captured some business from Dish churn.
Later this afternoon, AT&T, owner of DirecTv, will be releasing its quarterly financials. Many expect DirecTv to meet or beat its numbers. According to the Wall Street Journal, AT&T expects both revenue and earnings to grow ahead of expectations. DirecTv may just benefit from the deeper pockets of its parent. Once the financials are released, we may be able to discern if DirecTv has captured some business from Dish churn.
Wednesday, July 20, 2016
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.
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.
Tuesday, July 19, 2016
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.
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.
Monday, July 18, 2016
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.
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.
Thursday, July 14, 2016
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.
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.
Wednesday, July 13, 2016
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.
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.
Monday, July 11, 2016
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.
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.
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