Hollywood warned 'writers will move online'

Timing. That is the secret of comedy. (Wait for it).........Tiiiimiiiing. Timing!

An interesting perspective by the writers and quickly countered by Rupert Murdoch in an interview with Cavuto. But truth be told, Fox, the internet is already changing the face of television and the writers strike is simply hastening the speed for which people seek alternative content. Look at niche networks delivering original content to the web audience, from humor on Funny or Die, to financial info on Wallstrip, to an aggregate site of unique niches on NextNewNetworks. The world of entertainment and distribution is changing rapidly.

What determines the speed of change still relies on technology. Apple TV tried to bring web content to the TV screen, but has not proved effective. Tivo ties in to Amazon to download content, as does Vudu. The writers point will be seen as true only if the technology improves and the consumer rushes out to purchase. The success of the Wii and the rush to the store indicates that a good product gets purchased.

The writers threat is not just to the producers, but may prove bone chilling to the distribution model as well. Cable companies and telco have a stake in this writers strike too. Consumers will downgrade their service to basic broadcast only or drop all together and upgrade their broadband speed to improve the quality. News weather, sports, entertainment only from streaming; the broadcast model turned upside down.

So while Murdoch may not take the writers threat of going straight to the web seriously, he should be cautious. Barriers to entry are coming down and content in the hands of professionals may take the web to a whole new level. Don't believe me, just watch some of the videos the writers have created to stress their point. They have the tools to succeed. Now if only technology follows.

DVR Software Firm ReplayTV Sold To DirecTV

Direct TV's purchase of DVR company Replay TV, is the clearest signal yet to Tivo, that their relationship is over. Soon Direct TV will announce that their partnership with Tivo is over and they will no longer offer the Tivo box to their customers. Now that Tivo has learned how to work under OCAP and continues to rollout across the Comcast footprint, hopefully other cable companies make the decision to use the Tivo brand inside their DVR boxes. I believe that Tivo, marketed correctly, can be a competitive tool for cable companies to use to compete successfully against satellite and telcos. It is a superior product.

Strike may change network landscape

Don't let it be said that the producers aren't equally worried about a long writers strike. Tonight, NBC airs 3 hours of alternative programming, 2 hours of Deal or No Deal, followed by 1 hour of Dateline. And be sure to watch the same Deal re-aired soon on CNBC. Hard to expect the ratings to soar for NBC tonight. And if history repeats itself, NBC will hurt the longevity of its Deal franchise just as ABC destroyed the show Who Wants to Be A Millionaire.

And now, word comes down that the networks will borrow from their sister cable channels. CBS announced earlier the plan to use Showtime Channel shows like Dexter and Weeds, while NBC will borrow from USA and Bravo. Of course NBC has already repurposed the Law and Order franchise on these cable nets, so the circle is complete and we can enjoy Psych and Queer Eye on NBC. How long will this filler last; hopefully not too long as each party realizes they need the other to create quality content that fills the multiple pipelines.

Showtime may seem some initial gain; with a smaller premium audience who has seen these shows. Showcasing them in edited form on CBS may gain new viewers willing to upgrade to the premium channel to watch current episodes uncut and commercial free. But NBC does not have this advantage with their basic nets.

Without original scripted content, there is nothing valuable to showcase across the other screens. No one will download Deal or Dateline, especially after you repurpose them so many times.

FutureThink: The Media & Entertainment Industry 2008 and Beyond

I attended today's NY:MIEG breakfast featuring David Poltrack of EVP of CBS Television. Mr. Poltrack is EVP and Chief Research Officer, CBS Corporation and President of CBS VISION. David Poltrack oversees all research operations at CBS encompassing audience measurement, market research, program testing, advertising research, and monitoring of the national and international video marketplace. And he was brilliantly interviewed by Garrick Utley. Mr. Utley is the President of the Levin Graduate Institute of International Relations and Commerce of The State University of New York. For forty years Garrick worked as a broadcast journalist on NBC, ABC, CNN, as well as Public Radio and Public Television. With a primary focus on international affairs he has reported from more than seventy-five countries.

The conversation centered on the 3 screens: TV, Mobile, and Internet, and the explosion of choice and exponential growth of content. The TV screen continues to be the medium of choice, and while becoming highly fragmented do to the number of cable and broadcast channels, it is still experiencing strong growth. It expects to continue to grow because of retrans consent, international opportunities, and of course Hi Def. Along with technology, TV continues to reinvent itself as noted by the rise of new types of alternative/reality programming, which began as low cost summer programming, has now become a more important staple for prime time, especially now with a prolonged writers strike.

Mobile is still finding its legs in the US. Over 35% of users have phones with video capability, but currently less than 5% of them watch video. The rise of the iPhone and technological change means better video viewing opportunities. That it is still subscription based means that there is revenue attached, but the future is dependent on how this business migrates to a free, ad supported model and the portable viewing benefits. While many look at the Europe and Asia use of mobile, it was noted that they rely on this type of viewing because there is not as much TV content available for them to view.

The third screen, internet or broadband, has seen huge change. As little as 2 years ago, the first streaming of long form content occurred with Lost and Desperate Housewives. Today, broadband penetration is at 45% and their is more upside. Also, the ad supported model is being tested although its impact at the moment is small. But it offers more cross-over strengths with the TV screen. The internet has lowered the barriers to entry for content creators and has become a "virtual workshop to find new creative talent and bring them to the bigger screen." Mr. Poltrack looked at how CBS has made its distribution accessible on all sites so people won't go to the trouble to illegally download. Mak eit easy to get and you just have to watch the ads.

Mr. Poltrack spoke also of the research center in Las Vegas, able to reach immediately a cross section of America. When asked what was the biggest profound change in television, the answer was not the colorization of the tv picture, but the growth of the DVR. Now 40% watch shows in playback and growth of the DVR has also been explosive as more consumers use the fast forward feature to bypass ad spots. It has change the ad model, with advertisers now paying on the audience watching commercials. It has also caused advertisers to seek new ways to get the message communicated - bugs, product placement, sponsorship, etc.

As to the future, Mr. Poltrack says the challenge is for the user's attention and time. What it will take these screens to continue to be viable to the viewer, "make me laugh, make me cry, and inform me."

Will Cable Cos. Ever Enjoy Their ROI

It seems every time cable companies have invested lots of money into their plant, it is because of the expected windfall of revenue they will receive. But they never seem to get the chance to rest as new technology and new uses continue to require them to continue to invest in more bandwidth. Just 15 years ago, cable companies were happy to offer 30 channels, then just 10 years ago, "digital" tiers were built and 8 analog channels could fit into one digital spot. And more usage was found with hi speed. New cable boxes emerged and more investment. Just 5 years ago that same pipe saw more usage from telephony and VOD and again more capacity was needed to satisfy the increased volume on the pipe. Today, the talk is about Hi Def and again the cable pipeline is showing signs of cracking. Talk of "switched digital" has become more necessary so that the pipeline can be more efficient, allowing only one stream at a time to go down the pipe as opposed to all pushing down to the TV simultaneously. But investment is still required on cable plant to handle more streaming of larger files of internet activity at the same time.

And now competition from telcos and satellite even more threaten cable's ROI by taking away large chunks of customers. Can cable succeed on smaller profit margins? Who gets hurt as they try to squeeze down costs and raise prices? And what is the next application after HD to require more bandwidth on the pipe? Stay tuned.

Keep an eye on: Media industry job cuts

As the economy continues to shake out and unemployment rises, another industry is going through a shake-up. The writers strike will enable producers to cut back its budget and reduce head count. Today, NBC has announced job cuts across their news division. And a few days ago, the purchase of Oxygen Cable Network by NBC resulted in loss of jobs for a majority of that company.

And while other industries have gone through these similar changes as their businesses have matured, media has previously seemed protected by this tightening of budgets. New media may be what you want when you want it where you want it, but it still needs talent behind it to make the content valuable and purposeful. You can't keep asking for more work from less staff.

Comcast sees customer loss in 2008

That the stock market hasn't already taken into consideration into the price of cable stocks, the effect of competition for cable subs from phone and satellite companies, is surprising. That it takes comments from Comcast affirming that competition does exist to cause todays drop in stock value is simply reactionary and hopefully short-lived. Competition is here and it should be a surprise to no one that existing cable company subs will move to phone.

Cable companies like Comcast and Time Warner have been living the good life, competing only with satellite and offering a more robust and technically superior product. But the moment cable entered into the phone business and Verizon and AT&T recognized that to retain their wired customer they too had to offer TV, the marketing wars would begin, pricing would become competitive, and eventually the swing of subs would have to shift back to the middle; consequently, an initial loss of basic subs. Convergence of technologies and selling the bundle brought more competition, not less.

But rather than bemoan the loss of customers, cable should look at the opportunity that the pipe offers to go further into new businesses - commercial businesses, security, e-commerce, and continue to find new uses and new users to the cable pipe.

Cable has had the monopolistic grasp through exclusive franchises and lack of competitive threats till now; the phone companies have been aggressively pushing to gain a foothold into the cable business for more than a year. Their intentions have been obvious. The stock markets reaction and price drop is either short sighted or based on other issues not yet fully announced.

DVD Sales are Declining

When is the last time you bought a DVD? Like the cd and the music business, Video and the DVD are affected by technology. Should it be a surprise to anyone that DVD sales are declining. The rise of VOD, streaming, Slingbox, and even Netflix and Hulu means that the days of buying a disc are over. And those download streams are easy to copy and save a personal copy withour purchasing. The only dvds I tend to buy are kid oriented and soon will come the day that even those sales will slow down.

Unless DVD distribution finds enough of a reason to encourage buying, purchase behavior will continue to shift. DVDs do allow for mobility and can provide extra footage (deleted scenes, bloopers, commentary)that the rabid fan may fine important. The rise of the HD format may improve those sales figures, but the manufacturers have made it hard for consumers by coming out with 2 competing products; so except for the early adopter, the majority wait till one manufacturer goes away. Can you say Sony betamax!

FCC wants to set a 30% cable ownership limit

What is going on at the FCC. First they try to impose a la carte rules and contend a 70% cable penetration and now they are trying to limit a cable company's ownership. What is there underlying motivation? If it is to promote more competition, I am hard to understand how this strategy makes sense.

I am a true believer of economics and the ideal notion that normal market forces will find equalibrium. As an example, look no further than cable and the role economic forces are playing. The rise of the phone companies into cable, the growth of satellite, and the technological forces that wireless and high speed. Rather than limit cable, allow the market to be open. Let technological change bring in more competition; perhaps finally the electric company will find a way to push programming and information through their electric wires. It is true competition that will create supply and demand and set real prices. It is the FCC and franchise exclusivity that limits it.

As a second example, look at the Sirius and XM Satellite merger. Again technology and market forces should be more at play than preventing their merger. The growth of ipods, wireless, and even over the air radio, is enough competition to not interfere. Consider if Direct TV or Dish make a play for mobile and the free market rules.

My advice, sometimes hands off is the way to go!