As The Digital Transition Nears, Broadcasters Compete To Put TV on Mobile Devices

With the digital transition in 3 more days, what is to become with all those analog signals. Well the next avenue for full video remains mobile, both on the handset and in the auto. I spoke of Sirius' need to adapt its technology to provide video as well as audio content. Portability remains a big open business opportunity as is the ability to move video across different screens.

Cellular companies and mobile handsets have a chance to gain this business if the timing and consumer need is rights. "The digital switch will let live video be sent to mobile devices -- phones, computers, car systems -- on the newly available analog spectrum. Contenders include MobiTV, Qualcomm's Flo TV and Transpera." Is this what the consumer wants? Is the timing now? "The young consumers who are more likely to watch television on their mobile phones tend to watch on-demand programs -- videos that can be played whenever the viewer chooses -- rather than live TV, " according to Lewis Ward, Research Manager at IDC. My personal opinion is that live sports is the only reason to buy a mobile video package. Movies on demand for the kids on a long road trip might be an option, but DVDs would seem to be so much cheaper for the amount of use in the car.

I still recall so many years ago when the next big thing was video phones; seeing who you are talking to. Twenty years later, it is still not widely embraced. Skype offers that connection but in my household, 99.9% of our phone use is still over landlines and cellular. Will mobile video take off like cable, barely materialize like video phones, or takeoff and then drop like satellite radio. Digital transition is finally here and the entertainment landscape continues to change.

Is Sirius Done?

Did Sirius make wrong strategic decisions. Was too much time and money wasted buying XM Satellite instead of concentrating on its real competition, free radio and the web? And while content is king, did Sirius spend too much for it without determining whether it could afford it? And could anyone have predicted that the economy would turn south and that the auto industry decline would have hit so hard.

Sirius is in the proverbial "between a rock and a hard place." "Sirius XM, which broadcasts football and baseball games, has lost more than $300 million in the past two quarters and has lost a net of 404,422 subscribers in the first three months of this year. Mel Karmazin, CEO at the New York-based company, said in its earnings press release on May 7 that 'satellite radio is now a cash flow growth story.' That story has yet to help Sirius XM equity shares, down 86 percent in the past 12 months."

And, unfortunately, I am one of their shareholders, not smart enough to sell at the top or willing to take a loss yet while it is at the bottom. I put a lot of faith in John Malone and his financial involvement to stay in for the long haul.

Perhaps there is growth opportunity for Sirius outside the car, through the mobile device and as an Apple iPhone app to extend the subscriber base. Perhaps there is synergy with a TV satellite company like Direct TV to add more subscriber value, and getting TV signals into the car. It is those untapped opportunities that might give Sirius the chance to recover.

Digital Transition Is A Week Away

One week from today, June 12, and the digital transition will finally occur. Back in February, everyone seemed in an uproar that it had come to quickly and the public was unprepared. 4 months later and it is back page news. Still, cable hopes that consumers will rush to subscribe rather than fear a loss of TV signals. Under the guise of public service, cable is pursuing a radio campaign to remind consumers that the date is next Friday.

My one surprise in the upcoming date is that it is a Friday. Does that mean that there will be a flurry of activity over the weekend to buy a converter, calibrate the antenna, schedule a cable truck. Would the public have been better served if the transition date fell midweek.

And what will the day look like. Panic, calm... are we ready. Will it arrive like a lion or a lamb? We will soon find out.

And at the same time, my cable company is moving more channels off their non-scrambled line-up and requiring me to put a converter box on more TV sets to continue to receive these signals. While I have learned to accept the set top box, I do not feel the need to put it on every TV set. It's size alone makes it unwieldy for a place next to my kitchen TV. If it were simply much smaller and behind the TV, allowing my TV to retain all its functionality. I would add one. But cable has done a poor job of allowing consumers to buy a third party device to enable that or to even offer one itself. And so my access to channels on some of the TVs gets more and more affected. So long MSNBC; goodbye TCM, Adios Style. How many more go away to the point I finally decide to go the Fios route.

As TVs Become Monitors, How Often Do They Need to Be Replaced

I have a TV in my house over 16 years old. Others are more than 5 years old. My desktop computer is 4 years old. I hate obsolescence and expect big ticket items to have as long a shelf life as possible. That includes refrigerators and washers too. So as I consider my purchase of an HD TV, I expect it to last me at least 10 years too. According to Wilfred Martis, director of platform strategy and planning for Intel’s Digital Home Group, "research indicates that people are replacing their TV sets more often — every seven years now, down from the previous 10-year life cycle. How much lower will that number go?" Am I expecting too much from my machines?

We have become a society that throws away things too easily and it makes more sense that items be enabled to retain what is working and updated to keep them useful. Turning TVs into modular pieces that can easily switch out and upgrade sounds most promising.

Big Screen TVs Need to Act More Like Monitors

An interesting comment inside this article got me thinking: "Casual games offered through FiOS TV (think: chess) didn’t take off until the company added a video window to run television alongside game play." Ultimately, TVs need to look and act more like computer monitors, allowing us to resize various screens to fit on the TV simultaneously. Just imagine your 55" screen (or larger) with the flexibility to watch a movie or game and then have the picture shrunk so that it is not affected as you play a a casual game of chess with your "social network" on another portion of the screen. We multi task on our PC, why not multi task on our TV screen as well. Add a wireless keyboard or just as easily use your PC keyboard but display the output on the TV screen. It will require the cable companies and telcos to finally merge cable, broadband, and communication into one interchangeable connection. What fun. That would surely create real subscriber engagement.

Tivo Wins!

How many times does Echostar have to lose in court before they finally pay their fine and do a deal with Tivo. Of course, Dish will continue to appeal, clogging our judicial system, rather than recognize that they need to partner with Tivo. I am a fan of Tivo so you can tell who I am rooting for.

According to Dish, "We are disappointed in the district court's decision finding us in contempt," Dish said in a statement. "We believe a stay is warranted and that we have strong grounds for appeal. Our engineers spent close to a year designing-around TiVo's patent and removed the very features that TiVo said infringed at trial." So in an attempt to work around Tivo's technology, you still worked from it. Sounds rather fishy to me and the courts seem to agree. Stop fighting, pay your fine, license Tivo technology. Dish has bigger battles to fight to grow and retain its subscriber base.

Comcast has been taking the lead to partner with Tivo on their DVR and I for one can't wait for it to be available in my home. I currently have a standalone Tivo in one room and a Comcast DVR in another. I actually give up getting digital signals in my Tivo TV because I so prefer the functionality and ease that the Tivo box offers.

Congrats to Tivo on winning another round. Keep innovating!

John Malone Sees a Revenue Model in Broadband Content

In an interview with Walt Mossburg, the chairman of Liberty Media, John Malone, believes the very survival of online content depends on a subscriber revenue fee. He recalls a time when TV was free and the question was how to get people to pay for additional TV type content (cable). As Malone saw it, "The way it was successful was blending together the transport service with the charge for the content. When you were a cable subscriber, you weren’t sure whether you were paying for connectivity or whether you were paying for the content that was embodied in the connectivity."

The problem in comparing the launch of cable to the launch of broadband video is that the consumer already subscribes to the internet and is already receiving free video content. In the cable example, its content was not made available unless you bought it.

The issue is to get the consumer to pay more for what they are already receiving. The answer may still lie in connectivity and multi-platform viewing. Providing the consumer with the means to synchronize all their viewing platforms into one easy to use program has a value and appeal. To that end, the telcos may have a leg up on their cable rivals because they have a four screen advantage to work with: wire and wireless, cable and broadband. If I could receive my sports network on my cell phone because I am away from my home, receive my TV networks on my laptop, these extra features of connectivity have an incremental value.

Malone sees a future more pay per view. "People will pay on a per-view or on some kind of subscription basis for content on the Internet if the quality is there and there’s convenience. The question you have to ask yourself is, is there going to be an aggregator doing that? This is the role that HBO traditionally did in movies. They aggregated movies and they sold you in bulk. You got 30 movies a month for seven bucks when they started." As Mossberg correctly notes, that is what Netflix and Apple and others are doing. But then again, so is cable through VOD!

Should Time Warner Sell Itself?

Interesting opinion speculating Time Warner's next move, post AOL spin off. Now that the cable distribution and AOL businesses are spun off, what is next. It seems though that spinning off the cable networks makes little sense although it is delivered as one such option. "Option 3: Which brings us to Mr. Bewkes’s third, and possibly most attractive option. To sell the company to the likes of, say, Comcast, or News Corp. " His rationale, "though Time Warner operates a number of solid businesses, from Turner Broadcasting to Warner Bros. and HBO, none hold growth potential." And yet NBC and others see their cable networks as growth opportunities and solid business ventures. Is the Time Warner business over and done? Is Chief Executive Jeff Bewkes clueless on how to run these businesses? Has the merger of Time, Inc. and Warner Brothers been a huge missed opportunity?

I believe that Time Warner can save itself and should not consider option 3, a sell to another company. It is the home for great content in multiple forms, print, TV, film, and terrific cable networks in the basic and premium space. If content is king, then maintaining its hold on content is essential. Consumers continue to seek out great content and have shown that they are willing to pay for it too. The business does not need to stagnate; Time Warner simply need to build a new strategy and direction to take them to the next level. It can be done.

The Future Is Cable Not Broadcast

More cuts at WNBC as its movie critic Jeffrey Lyons is following Len Berman out the door. In fact the focus is no longer news as their Live At 5 news program may be replaced with general entertainment, low cost programming. "Rumors are currently swirling at WNBC-4, NBC's flagship station in New York, that executives at NBC Universal are considering the creation of a daily 5 p.m. lifestyle show that could debut on affiliate stations around the country as early as the fall of 2009."

At some point, news will leave the broadcast air and be exclusively on cable, whether national with CNN, MSNBC, Fox News, or regional with News 12, NY1, and NBC Nonstop. Perhaps soon we will rely on the local High School to supply cable with a local news program too.

Broadcast is passe and cable is where the money is. Recently, Jeff Zucker has commented that they would be very interested in acquiring more cable networks. The future is cable and the web and that is how broadcasters will make up lost broadcast revenue dollars. Research shows that the next generation of TVs will have direct internet access. "Worldwide shipments of consumer-electronics devices capable of supporting Internet video are projected to rise by nearly a factor of five from 2009 to 2013, according to research firm iSuppli." If that is the case, cable companies as well as cable programmers should be concerned that subscriber revenue will fall as consumers stop buying cable to get programming on their TV. Will consumers accept broadband rates to double to offset that lost revenue; probably not likely. And that will lead to another quantum technological leap as another new distribution choice will likely emerge.