Cheaper Kindle

How low can you go, how low can you go. So goes the refrain and so goes the price of the Amazon Kindle e-book reader. Figuring a low price strategy is the one sure fire way to beat Apple and others, Kindle has built a faster device at an even lower price. "This new Kindle, Amazon's third generation, is smaller by 21 percent, and 15 percent lighter too....To date, all Kindles have used a wireless connection to a 3G network to get books and manage subscriptions. The new ones have Wi-Fi inside, so that people at home or at a coffee shop could log on via that network instead. One Kindle still costs $189, and has both 3G wireless and Wi-Fi inside. The cheaper $139 model only connects through Wi-Fi — and only comes in graphite."

So, does the new Kindle at a low price get you excited to buy one? Or is your heart still set on an Apple iPad, despite its higher price. As my briefcase seems to get heavier, I am liking the idea of a e-book device to read by as well as lighten by bag. At the same time, I like the versatility of the iPad vs. the Kindle. Am I ready to buy. I think I need one more generation shift. But regardless, I think it will be the iPad.

Hulu Usage Dropping

Hulu, the darling of internet streaming of TV shows, is losing its appeal. According to Comscore, Hulu usage dropped 45% in June. That drops their ranking down to 10th place. This is a big drop from a site that was recently at the top of the mountain. "The new figures are expected to affect Hulu's ability to win additional advertisers." Couple that with a desire to move users into a subscription package and you have users leaving in droves. Naturally advertising dollars will drop as well.

Is this simply due to Summer viewership trends and the Fall will see a bounce? Or is it something deeper. The rise of VOD and DVR usage that allows users access to the same shows on their bigger TV sets. And as cable operators, like Comcast, enable users to stream these shows through Fancast, Hulu becomes an afterthought.

iPhone Users Can Become Jailbreakers

For as much control that Apple likes to control, you can't outrun the law. And in this case it comes from, of all places, The Library of Congress. "The Library of Congress, which has the power to define exceptions to an important copyright law, said on Monday that it was legal to bypass a phone’s controls on what software it will run to get “lawfully obtained” programs to work." In truth, it is the United States Copyright Office, a division of the Library. And while Apple can disallow its warranty, it can't stop free enterprise from offering to provide more apps and even repair, if needed.

In a bizarre twist, this ruling could make the Apple iPhone even more profitable. "In addition to this decision, the Library of Congress also granted an exception to artists who remix copy-protected video content for noncommercial work, and renewed its approval for cellphone owners to “unlock” their phones or lift controls that restrict use to one wireless carrier." For Verizon, that could just mean more users and for Apple, more phones sold.

Does Sirius Need More Exclusive Content

What's it going to take for Sirius to win the hearts of both viewers and shareholders. A new contract with Howard Stern? More sports? Some suggest the answer is more content. "Sign on a big-name personality in an exclusive fashion that has a huge following on the radio --- moving over from terrestrial radio to satellite radio, following the same exact Howard model." But is that the answer?

First, Sirius should re-sign Howard Stern. That is their first obstacle. Second, they must continue to push how they differ from over the air radio. To me, more commercial free programming is the big win, especially with music. Listen to the genre you want without the interruptions of annoying ads. Push the quality of the sound, the ease of use, the endorsements. Oh and more exclusive content can only help, too!

Is ABC Time Warner Cable Fight Turning Nasty

Another broadcast contract expiring, another round of ads reminding viewers that they have choices. So goes the fight between ABC/Disney and Time Warner Cable. ABC has adds reminding viewers that while they negotiate their renewal, the contract expires September 2, and viewers may lose their signal. But there are other choices including Direct TV, Verizon FIOS, and of course over the air. If not already, Time Warner Cable will have their own ads reminding us that they want to control their costs so that the consumer doesn't see higher prices. How magnanimous. If it feels like deja vu all over again, it is because we have seen this tactic before.

Will viewers switch their cable provider in advance of what is often reconciliation at the 11th (or 13th hour). Or as I suspect, viewers will do nothing and simply get angry when, or if, their signals are temporarily dropped. In either case, this won't be the first time, or the last, that this scenario gets played out.

And just for thought. If Comcast and NBC merge, will Comcast have this same fight internally, including the potential of dropped signals and ads offering viewers the option to switch providers? And is that a good thing? Just wondering.

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.