Interactivity Through The Set Top Box

A lot of work is happening to improve the functionality of the TV screen. The opportunity to press your select button on your TV remote to get information sent to your home, request a coupon, vote on your favorite actor, and one day order that QVC shirt right from the screen. All with a press of a button. But does the viewer want to talk to the TV or are they now accustomed to keeping their laptop open while they watch and interacting through their computer. Or even better, through their mobile phone. And once the iPad finds itself on every coffee table, through that or another table top device. Has the set top box missed the opportunity? Are they too late to the dance?

Given the cluckiness of the TV experience with buttons that can only be accessed left, right, up, or down, and no keyboard to type easily, the set top is an imperfect device. And the corresponding TV remote is so filled with buttons that it takes a moment to figure out which button is the right one to press. Take too long, miss the opportunity to interact. On the other hand, the mobile phone has fewer buttons and has become more ergonomic to use. The rise of the "jagtag" lets consumers take a picture and send to request anything they want. The phone shares where info can be sent. Does interactivity on the set top beat that experience? Can it be rebuilt to be a better experience? Cable must build a better mousetrap for set top interactivity in order to find success.

Netflix Profits Up, Revenues Down in Q3

Netflix is growing subscribers, Earnings per share is rising, but the rise of internet streaming has caused subs to downgrade their service. As a result, Netflix revenues are down in the third quarter. And here is the rub, because customers are streaming more and taking less DVDs, their plans cost less but the margins go up as mailing costs go down.

"Netflix said 61% of its subscribers are now streaming more than 15 minutes over the Internet, up from 55% in Q1 and 37% in the year-ago quarter. This trend will obviously continue as more Netflix subscribers stream more movies over the Internet. This could potentially force Netflix to raise their fees, or just to deal with lower revenue per subscriber." And with Redbox entering the internet streaming business, it will be hard for Netflix to raise fees to compete. Better margins, higher profits, lower revenue. And competition to boot, which could eat into profits. It is easy to see why the stock market lost favor in Netflix.

Redbox Challenging Netflix AND Cable

As Redbox enters the internet world to compete with Netflix, there is another competitor that they will challenge as well. "The company, the biggest division of Coinstar Inc., may use a Web service to expand its library beyond the 200 or so titles crammed into each of its 24,000 or so DVD dispensers, President Mitch Lowe said in an interview from Redbox’s headquarters in Oakbrook Terrace, Illinois." Certainly they are entering Netflix's space but it is really the space owned by cable's VOD platform. Neither Netflix nor Redbox offer the volume of titles accessible through cable, but they are seen as a cheaper alternative.

In a struggling economy, the consumer is willing to spend more time to find a cheaper alternative. Cable needs to review its pricing policy and offer a range of pricing that demonstrates to the consumer that cheaper choices are available on their TV set and they don't need to look any further.

Of course, Redbox and Netflix aren't the only other players in what is proving to become a very crowded field. "Redbox also faces competition from Apple Inc. and Best Buy Co., which sell movie downloads. Wal-Mart Stores Inc., the world’s largest retailer, bought the Vudu Inc. online entertainment service in February and Sears Holdings Corp., the largest department store owner, said on June 22 it plans to sell and rent movies online through an agreement with Sonic." For the consumer, there is good news. More competition causes price wars and results in lower prices to the consumer. Unless a real quality differentiation strategy is demonstrated, consumers will always look for the lower price choice.

Why Isn't Sirius Stock Price Rising

Despite good news on subscriber data earlier this month, Sirius can't seem to push its stock price over a buck. According to some reports there is bearish pressure pushing the stock price down. Can Sirius survive in the long run? Can it adapt to meet the changing consumer who prefers mobile to auto. Can Sirius find new revenue streams to grow its business or should it dress itself up for a future sale? Is it time for John Malone and Liberty to take it over and invigorate the brand. A great brand languishing deserves some fresh blood.

Kindle Sales Beat Hardcover Book Sales

This should be no surprise to anyone that electronic book sales by Kindle outsold its hardcover sales at Amazon. This is what technological change does. If anything, the biggest surprise may be how quickly it took for this change to occur. According to Jeff Bezos, Amazon CEO, Kindle has been selling for less than 3 years while Amazon has been selling hardcover books for over 15 years. "In the past three months, 143 Kindle books were sold for every 100 hardcovers, but when that time frame is narrowed to a month, it's 180 Kindle books for every 100 hardcovers. Total e-book sales tripled from the first half of 2009 to the first half of 2010."

But let's be clear. While this news shouldn't be surprising it should also be looked at more closely. The news is strictly about Amazon sales and doesn't look at the sale of paperback books. Overall paperback book sales have always been stronger than hardcover. The Kindle numbers also include free downloads, so a sale to sale relationship is not being measured. In addition, book sales are still growing for hardcover so it is not spelling disaster for books just yet. For most, the news is most likely meant to show that Amazon's Kindle is not losing the battle to other e-book readers, most notably, the iPad. And yet, Kindle continues to lower its price to compete so competition is clearly forefront on their mind.

So congrats to Kindle on a successful run. But keep innovating. It's time for a color monitor and more ergonomic features. It's time to look sleeker and more hi tech. Otherwise, your success might be short-lived.

Reincarnation Through Facebook

Who says you can't still communicate after death. With Facebook, death may be a physical end, but it doesn't have to stop you from sharing. In fact, Facebook hasn't figured out how to remove members after they die. "Facebook, the world’s biggest social network, knows a lot about its roughly 500 million members. Its software is quick to offer helpful nudges about things like imminent birthdays and friends you have not contacted in a while. But the company has had trouble automating the task of figuring out when one of its users has died."

Obviously the user can't remove himself prior to death so who is to tell them after the fact. So even after death, you will live on in the Facebook world.

Apple IPhone Response - Will It Be Too Little Too Late

Later today, Steve Jobs will hold a press conference in response to the iPhone antenna proble. As his initial response rubbed many the wrong way, his "second" chance should prove most interesting. Already speculation is that their will not be a recall, but what should he do? I suggest he go over the top to put customer ahead of dollars. He should offer to every iPhone customer a free casing to protect the device from disruption. And not just any casing, but one perceived as quality and value. Offer multiple colors, put the Apple logo on it, and hey, offer to print on it a free monogram or the user's name. In addition, offer an immediate and free software upgrade to correct the signal feature and improve reception. And lastly, offer a huge apology for not initially respecting his customers with a promise to never under estimate their loyalty. As a marketer, this response will have long term effects on the Apple brand.

So what will Steve say at his press conference? We must wait and see.

IPhone Blunder And Google Android Wins Fans

Many, like me, have been waiting for Verizon to get the iPhone. But now, with other smartphones gaining ground, I wonder if it makes more sense to separate the phone from the Apps. I want my phone to work as a phone. I want the battery on the phone to last as long as possible so as to never miss a call. I want my iPod device to play music, watch videos, surf the web, etc. So why not keep two devices; why marry the two? Especially when other smartphones may work just as well.

Verizon has been growing despite the lack of the Apple iPhone. "Despite the pull of the iPhone, Verizon has managed to steadily increase its share of the smartphone market, to 26 percent in May, from 20 percent in late 2008. In the same period, AT&T’s market share slipped to 40 percent, from around 45 percent, according to comScore. Those numbers do not take into account the impact of the popular iPhone 4, released last month....Verizon has since collaborated closely with Google to develop six phones running Android, helping to give Google’s mobile operating system 13 percent of the smartphone market in the United States." And the NY Times likes the Google Android.

Add to that the bad press Apple has gotten for its antenna problem AND its response to the problem, and competitive marketing is taking the phone wars to another level. I can live with two devices. I can keep my music and my videos separate from my phone. I can surf on either device and with two devices, I have a back up when one phone's battery drains. Maybe I don't need to wait for an iPhone on Verizon's plan after all.

Be Careful What You E-Mail

Starz's president, Chris Albrecht, has really demonstrated how careful you need to be with email. I am sure many people have mistakenly sent emails to people not intended to receive them. With programs that help to fill in the remainder of an address as you start typing, it is too easy to let a name slide by and not re-check that the list is accurate. Hence, never write anything in an email that couldn't be read by anyone.

Unfortunately, Chris did not heed that advice. He sent an email about the pending firing of two executives to the entre company email distribution list. And who should read it, the two people who he was targeting. "Realizing his goof, Albrecht immediately called Bill Myers, president of Starz Entertainment, to inform him of the error. During their conversation, McGurk called Albrecht and told him that he had seen the e-mail. Later that day, McGurk and Rosett tendered their resignations." They fell on their swords, an honorable way for the two execs to leave. For Chris Albrecht and others, a painful lesson to learn.