AOL is a Media Company

AOL finally has a strategy, or so they say. Its been a couple of years since AOL stopped being a portal and has had a tough time convincing people that it has what it takes to succeed. Unfortunately the AOL brand name has little cache or brand value. It's web properties, however, just may have a chance. Some of their more popular sites include Moviefone, TMZ, and 75 others. Those that front with the AOL name seem to me to have less appeal - AOL Money, AOL Music. If content continues to be king, then the AOL focus on solid content sites should eventually pay off. Still in a down economy, ads will continue to move from print to the web; building and growing content sites will allow Platfom A, their ad network, the chance to aggregate the value of all their content sites and increase their revenue.

So far, it is paying off. "According to comScore Media Metrics, traffic to the portal, which include 20 new niche such as men’s lifestyle channel Asylum.com, rose 7% to 54.3 million unique visitors in October from the same period a year ago. Page views more than doubled to 4.2 billion. The increases marked the 21st month of consecutive growth for AOL." Good luck with the road show.

Web Video Chips Away at TV

One study says that online usage complements TV viewing, others say it cannibalizes. Can we have it both ways? This study suggests the latter, but it also says "online viewers don't mind the commercials too much." My feeling is that compared to the glut on TV, web video advertising is a pleasure. Sites like Hulu limit commercials to just one spot compared to TV which could have 3 minutes of ads. Comparatively, of course you wouldn't mind online commercials.

Another interesting analysis, "almost 60 percent of the respondents said they were willing to provide to advertisers some personal information about themselves in exchange for something of value, such as access to high-quality music videos, store discounts or airline frequent-flyer points." If TV would cut back on the glut of spots and use its technology to target spots and offer interactivity, it would find a more willing viewer as well. Just imagine clicking on a TV spot that would email you a coupon to download and take in to the store. The web may have the connection, but viewers still prefer long form content on their TV set. It will be the interactive potential that will make TV the better choice for the advertising dollar. And this is what Canoe will be able to offer.

TiVo, Domino's Offer Pizza Delivery Service for DVR Subscribers

Order a pizza from your TV, if this sounds familiar, it's because we've seen this before. Now Tivo has announced that it has partnered with Dominoes to let their subscribers order a pizza delivery through their device. "The TiVo service will help Domino's reach customers who might otherwise skip through its commercials on their DVRs, the companies said." As a marketing partnership,it will put the brand in front of customers, but as a service, it will be a dud. Customers are still much more likely to order by phone; they have yet to use their PC to order from a menu. Cable operators used this same marketing ploy years ago to add features to its set top box; it did not work. Customers will gravitate to the device that is easiest and quickest to use. Until the application proves more useful than the phone, customers will find no reason to switch.


"TiVo Chief Executive Officer Thomas Rogers has added shopping and video-on-demand features to attract users as cable and satellite companies roll out their own DVRs. The Alviso, California-based company lost 178,000 net subscribers in the second quarter, finishing with a total of 3.6 million." Tivo should continue to push its partnerships across cable operators as the better DVR for the set top. In addition, it should partner with game boxes like Playstation, Xbox, and Wii, to be their interface as well. It is partnering with those companies that will bring Tivo more customers.

Cable industry group says the Web won't kill TV

Canoe Ventures has a plan, tie together the big cable operators to gain scale, target meaningful subsets within, advertise on brand name video content, and add a technological, interactive component. "Canoe has a direct pipeline into about 60 million cable-watching households in the U.S. and provides Internet service to a third of the country. It plans to use that reach." And with the cable box and remote, the ability to communicate with the consumer and get them to talk back. "For example, it's going to add voting and polling so consumers can vote for their favorite player during a football game or answer ...... the final question on "Jeopardy." It's also planning a feature that will allow you to click a button on your remote control to get a recipe, a sample or a coupon, and another feature that allows you to click on a movie ad to see the full trailer or on a video game ad to see a demo." Kinda cool.

Advertising on TV can no longer be a one-way experience. It is meant not only to build brand awareness, but advertisers also need to see meaningful results. It may not be to actually purchase a product or service, but to request more information be sent perhaps immediately to the TV, or perhaps the email address, or mobile phone, or even snail mail. It is gaining that interaction which is Canoe's next step.

The set top box provides valuable information to better target the message to the home; the cable box to interact. We rely on that box to allow the advanced features to work; VOD, DVR, and such. The challenge is getting the consumer to accept the set top box on every set. The home needs to be "connected" so that the box rests behind the set, not on top of it.

Cable Price Wars?

Is price the primary motivator for consumers to switch their cable provider? According to the survey mentioned, the answer is a resounding yes. Still it is interesting to find that cable operators in competitive markets have shown some sub growth. And while the low hanging fruit, consumers buying only one service from cable may switch to telco, the multiple service customer is growing. The triple play packaging strategy has proven very successful at retaining consumers. "It looks like that for all the technical innovation, the promise of the triple-play bundle isn’t about service, but about the bargain. " How elastic that price point is to the decision to switch needs to be analyzed.

But price is a factor and in a recessionary economy, will become more important in the consumer purchasing decision. But it is more than price for the consumer. Some channels, like NY1 and Newschannel 12 in New York, are exclusive to cable; its importance to the consumers' viewing experience will affect the choice they make. Latency, interactive features, and customer service should not be ignored. Some people will switch because of price; for many others, these other factors matter, too.

IBM to Install Broadband Over Power Line For 13 Rural Utilities

First cable operators had to worry about satellite providers, next came telcos, and now power companies. "Under the $9.6 million agreement, IBM will install IBEC’s broadband-over-power-line networks at electric cooperatives in seven states within the next two years." And while IBM is working with rural electric companies to provide broadband deployment, there is nothing to prevent them from taking this technology and deploying across the entire country. For these rural markets, it has not been cost effective to wire these homes for cable. At less than 10 homes a mile, the cost is extravagant. Existing power lines make deployment easier and helps connect the entire country, "closing the digital divide that exists between well-served and underserved America." As the technology improves, broadband over power lines will be able to provide a competitive product that could provide not only data, but phone and video as well, to all consumers.

The Connected Home - Solving The Digital Device Dilemma

There is a lot of talk about the portability of content, TV, PC, Blackberry, Phone, but how about the ability to simply move it effortlessly inside your own home. Record a show on one TV set in the living room to watch on another in the bedroom; move your songs from the pc to play on your kitchen speakers; Call your Tivo to remember to record a show. We are clearly in the early stages and it is clear the technology must operate under a common language to work most efficiently.

One idea that is just coming to fruition are using the cable backbone to connect phone with TV. When a phone call comes in, the TV displays the number, letting you know who is calling before getting out of your seat to answer the phone. Its a first step, but it recognizes the potential of connected devices. It is how cable operators can maintain a foothold on content, especially when it involves an interactive experience. And as these devices and interactions get more complex with the multitude of devices to connect, service provided by the cable operator can be its greatest asset. Most people are tech savvy and need devices that are plug and play; at the same time, they need to know they have an expertise readily at hand to support them if trouble arises. Per Apple's Steve Jobs, "The digital living room should come with the warning 'some assembly required,' he said. It's not an easy thing to set up, as evidenced by the number of people who buy high-definition (HD) television sets, hook them up incorrectly and can't use the service as intended."

As we keep putting more digital devices into our home, connecting them together becomes a necessary next step in this changing entertainment landscape.

Sony Pictures Puts ‘Pineapple Express’ iTunes Download on DVD, Blu-ray

How do you impact the revenue of dvd sales. Differentiation has helped - alternate endings, shorts, games, and other added features. Blu-ray came next, a better picture to complement your HD TV. But dvd sales have been declining as consumers are renting rather than buying content. VOD and streaming have replaced dvd purchases. Well Sony seems to see the writing on the wall and if you can't beat them, join them. Consumers want choice and cable operators have shown that bundling works. The result, is a dvd purchase gives you the stream for free. "The two-disc DVD and Blu-ray Disc offerings of Pineapple Express will include a free download of the film from iTunes, in addition to a downloadable digital copy for PCs or the PlayStation Portable." It is that flexibility that might just breathe new life into the dvd revenue stream. Consumers are seeking mobility and flexibility and Sony seems to be delivering it to them.

CTAM - Cable Has The Best Positioning

The cable industry likes how it is positioned against competition in the content distribution space, despite a bad economy. The use of bundling of communication services - cable, phone, and data, the consumer of these products is less likely to switch or drop services. "Cable subscriptions are still cheaper than taking the family to two movies a month, executives noted. The bigger challenge, going forward, is figuring out how to let consumers move content they have already paid for among the technological platforms they utilize." That mobility seems to be the next step in controlling the customer. Verizon and AT&T each bring a huge fourth component to the mix, wireless. What they have yet to do is build that product into a bundle as successfully as cable has done. And cable is looking to add a wireless partner as well.

"Ellen East, executive vice president and chief communications officer at Time Warner Cable, said her company is looking at a way consumers can authenticate themselves as paid subscribers when logging directly onto programmer’s sites. That authentication would allow the viewers to access television content on their PCs or mobile platforms. " It once again calls into question the relationship between content and distribution. Content owners are keen to control where they exhibit and how they are reimbursed; distribution companies offer the backbone and the ability to aggregate and monetize multiple pieces of content to the subscriber.

Consumers are looking for more ways to control when and where they are viewing content. And as we have become a more mobile society, the content needs to follow us, not us to it. It may not make a lot of sense that consumers may be watching long form content on tiny screens, but it is for them to decide what serves their need best.