If You Don't Like The Ratings, Make Up Your Own

The big media boxes might not like the ratings that Nielsen delivers, but at least they are a neutral party. So while it sounds opportunistic for the broadcasters to team up with big advertisers to devise a new measurement system, it may also be problematic. Which ratings service would you trust, one driven by the companies that you are buying advertising from or from a third party source. The answer seems pretty obvious. And Nielsen is certainly doing its part to stay on top of new technologies and new viewing habits. "Back in May, Nielsen became a part of is own TV measurement supergroup, when it hooked up with comScore, Rentrak, TiVo and TNS Media in an attempt to better define and value viewer data generated by set-top boxes." So I ask you again Mister Advertiser, which ratings company would you most trust. It seems like this new venture doesn't have a leg to stand on!

Sony Plans to Adopt Common Format for E-Books

Sony has seemed to learn their lesson - creating a unique format doesn't necessarily win you market share. The beta - VHS wars for consumer acceptance must still have battle scars, even though the DVD has replaced the videotape. And so Sony is working with the format and not against it. "On Thursday, Sony Electronics, which sells e-book devices under the Reader brand, plans to announce that by the end of the year it will sell digital books only in the ePub format, an open standard created by a group including publishers like Random House and HarperCollins." Good news for the growth of the E-book and hopefully profitable news for Sony.

On the other hand, Amazon, the current market leader with Kindle, uses its own proprietary format. But leading and staying in the lead are two different things and the electronic book is still a very immature business. I still recall the early day of internet service providers (ISP); Prodigy was the leader until upstart AOL came out with a faster, better, more user-friendly model. Today, AOL is still around; Prodigy not so lucky. Sure there were other factors, but maintaining number one position takes constant innovating and marketing. Prodigy did neither.

Issues with E-book readers, most especially digital rights management, will affect innovation and usability. The customer must see, understand, and use the benefits. Books are read and shared; e-books may need to follow a similar route. The issues are more complex with a digital format, but solutions can be found.

Blockbuster is a Copycat!

Blockbuster follows a typical follower strategy, duplicate what the leader in the marketplace does, as oppose to differentiate. When Netflix started to take market share away from them with mail order subscription, Blockbuster copied them. And now as Redbox begins to take market share through a lowcost, everywhere vending strategy, Blockbuster follows again. "Success breeds competition, and Blockbuster says it will have nearly 3,000 kiosks renting and selling discs and games by the end of this year, growing to 10,000 in late 2010." I guess if you can't beat them, copy them!

More Than Half of US Own an HDTV

According to a CTAM study, "about 53% of American households now have a high-def TV, compared with 35% in 2008 and 23% in 2007 ". So why are there still so few HD channels and why aren't there more HD shows on their channels. Unfortunately many consumers may be unaware. Excited to open their HD set, they may not see that their picture may be "stretched" to accommodate the screen. And while the picture will absolutely look better than what they had before, it is not true HD that they are watching. Consumers may mistakenly assume that 100% of the programs on their HD version of a channel is HD; that is not true. In fact,very few channels offer 100% HD programming. The challenge is knowing the difference.

HD viewing requires an HD show on an HD channel through an HD converter box on an HD TV set. Digital is not HD; while some networks may offer digital channels off of the main channel (X.1, X.7), they are not necessarily HD programming. We are in the midst of a transition and over time HD programming will become the norm. To those who recall the black and white to color transition, this must be similar, although it was far easier to know which was which.

Is The TV Ad Model Broken?

A universal truth is that choices constantly are shaped and changed. Build a better mousetrap and many will eventually see its benefits and flock to it. Some, resistant to change, will stay rooted with what works just fine. The sophistication and swiftness of change finds its early adopters and eventually, even the old models must change or die. Take radio as an example. Despite technological change that made the TV affordable, it may have stopped being the lead media choice, but found its value in other ways. As the web threatens both TV and radio, radio saw opportunities to be both terrestrial and web based to be everywhere for its listeners. TV may be slower to adapt, but may also find advantages in a multi-platform approach.

Within TV you have many "levels": broadcast, cable, premium, etc. Broadcast has primarily stayed an ad supported model while cable found a profitable middle ground by being both ad and license fee. And broadcast is jealous. But for some broadcast stations, a solution was found. Some used FCC rules to choose fee rather than must carry status. Univision recently moved away from that model and closed license deals with the major cable operators. Other broadcast networks, CBS, ABC, NBC also own cable networks. They used their size to push carriage for their smaller cable nets. And while that might not be felt in the broadcast channel's P&L, it certainly resonates as revenue for the company as a whole. So don't feel so sorry for the broadcasters.

"Murdoch grabbed headlines across the globe last week with his swing-for-the-fences suggestion that all News Corp. Websites will move to a subscription model. A shift of some sort may not be so far away for broadcast television either." Content is king and has value; Positioned across multiple platforms there are opportunities to uncover new revenue streams. But don't forget the consumer. Change can also lead to new innovation. The DVR was invented, not just for time-shifting purposes, but because of the desire to "skip" commercials. Viewers reached their threshold as the ratio of ads to content in a given hour increased. The same will happen on other platforms too as viewers feel inundated by ad messages. Don't let greed get in the way of success.

TV Everywhere may be one approach to assure that a customer on cable has access to content on other platforms. A walled garden approach that encompasses a multi-platform reach may just be acceptable for the consumer. And it will assure they don't leave a TV pay model for the same content offered on the web. Yes, smaller companies will bypass the license fee approach to hit the niches. But the vast majority will want professionally created content from the big media brands; they just want it everywhere and anywhere.

Cable vs. Telco vs Satellite - who's growing?

Growth is measured inside cable in a number of ways. The first is obviously the number of cable subscribers, but inside that subscriber number is also growth of which subscribers upgrade to the more expensive services - digital cable, digital tiers, premium channels, and the growth of transactional services like movie and event rentals. But the business is more than just television, growth is measured across other businesses like broadband and phone. It can be a very competitive business.

With the emergence of the telephone companies, Verizon and AT&T into the mix, it might be easy to forget that cable's first competition was the satellite companies. Well Primestar and others might be gone, but Direct TV and Dish still remain and they appear to be doing quite well. "DirecTV continued to outpace the competition and analysts' estimates in the second quarter, growing revenue by 9% and adding 224,000 net new subscribers, a 74% increase over the prior year." Cable is seeing growth inside its businesses, but basic may be another story, Direct TV's "cable competition continued to lose basic customers in the period -- Time Warner Cable shed 57,000 customers in the quarter and Comcast lost 214,000 basic subscribers -- DirecTV managed its second straight quarter of growth. The satellite giant gained about 460,000 net new subscribers in the first quarter." And so the fight for customers and the marketing to win back those that have left will most likely start to ramp up even more than before. You can't keep growing by selling more services to your existing customers enough to offset the loss of total customers to your store in the first place. There is real competition in the cable marketplace.

Redbox vs. Netflix vs On Demand

It seems that people are still willing to travel to a store to rent a DVD. Redbox, the vending machines now seen outside grocery stores, is appealing to a number of consumers who would rather rent their movies for the low price of one dollar a day. According to their owner Coinstar, sales have risen at an exceptionally fast pace, 43% from a year ago. At a dollar a day for top films, the price/value proves very enticing. And one retailer, Albertson, is offering a free night's rental with a purchase of more than $25. That can be viewed by the consumer as a great promotional deal. Still it requires the consumer to remember to drop off the video the next door or be faced with additional charges. At such a low price, it also is a blow to DVD sales, as most consumers now feel they can rent with ease at an extremely low cost and don't need to own.

Sony to Sell E-Readers for $199, Challenging Kindle

Electronic Readers could be poised to become the next hottest must have hi tech toy. To stay competitive in this new marketplace, Sony is lowering the price of their E-reader, and with more titles than Kindle, Sony is pushing to have the upper hand.

"Sales of electronic titles in the book publishing industry more than doubled to $25.8 million in the first three months of 2009 from a year earlier, according to the Association of American Publishers in New York. Digital books still make up less than 2 percent of total U.S. book sales, which declined 7 percent in the first quarter, the association said." There is clearly much growth ahead.

And where does Apple stand. With the iPhone and talk of a new tablet device, Apple could quickly overtake both Sony and Amazon. If any company can develop a device that is user friendly, it is Apple.

Flexible Screens for your Print Reader

As "reading screens" become lighter and resilient to everyday bangs and bumps, they become more useful and more preferred. In a world of green behavior, changing reading behavior from printed paper to digital seems on a fast track of user preference. Still, the device has to be user friendly. Well it seems that companies are listening. "A Cambridge-based company is months away from launching the world’s first flexible electronic screen. Designed by scientists at the University of Cambridge’s Cavendish Laboratory, to compete with the growing variety of electronic books from the likes of Sony and the US-only Amazon Kindle, the roll up A4-sized 'intelligent plastic' display has taken a decade of development and cost £120 million. From Plastic Logic, It is the first screen to be made from a microchip not of silicon but of cheap plastic."

Most interesting is their learning. Consumers don't actually want screens that can be rolled up like a newspaper for carrying, say in your back pocket. Too flexible is perceived as cheap and breakable. Once proven that such devices could be made to withstand folding and rolling, I wouldn't be surprised for consumers to become more accepting.

So what's next. perhaps, as the article implies, a Hogwart's paper where video images are as possible as static ones. I still wait to hear how battery life improves so that the screen doesn't go dark the moment you most need to read it.