New TV Season

Okay, it's September and time for the TV premieres. I'm sorry, was that the sound of a pin hitting the floor. That now seems to describer the state of broadcast TV these days. Little buzz, little fanfare. While cable revs up in the summer, broadcast snoozes. And rather than push big messages about the coming of new shows, premiere week may simply drift by. Has broadcast given up? Will new shows be seen and quickly yanked because viewership didn't come quickly. Who knew they showed up in the first place. If broadcast ratings drop, they have only themselves to blame.

Net Neutrality Regulation

Terrific article in this Saturday's NY Times, and certainly worth the read. "Net neutrality, of course, is the principle that Internet service providers should not be allowed to favor some Internet content over other content by delivering it faster." And yet, as Joe Nocera describes it, "that this was a big mess?"

He presents a clear understanding of what is happening with net neutrality. Two points stick with me after reading it. One is that equal availability of content doesn't exist in cable, so why should it be equal in broadband. Your cable provider decides whether you can see a certain channel or not and prices it accordingly on a basic, tier or premium level of service. Think every home is capable of receiving a channel like Hallmark Movie Channel or Epix. The answer is no. But with competition, you can decide which provider you want for cable carriage. And perhaps part of that decision is predicated on a particular channel they carry.

The second point that is conveyed is that the consumer should have the ultimate power. "Consumers have come to expect an open Internet, and companies will violate net neutrality at their peril. That is just the way the Internet has evolved." Allowing a free market where businesses that offer broadband can decide how to offer it. Favor one content piece over another; why not. What is most important for the FCC is that their are low barriers to entry for providing broadband service. Encourage utility companies like electric and water to expand their offerings to also bring broadband into the home. Let telcos and other overbuilders ease of entry as well. Enable multiple companies through tax breaks to build the infrastructure to provide wire and wireless broadband everywhere. And then let free market decide how to proceed. One company signs a deal to give Hulu priority stream; another gives it to Netflix. The consumer ultimately decides which broadband service they prefer.

It seems an open market will solve the problem, not a heavily regulated one. Until then, Nocera is right, it is a big mess.

Disney and Time Warner Cable Deal Renewed

A done deal. No dropped signals. Consumers kept their ESPN. In fact, they get their ESPN3! "In the deal announced on Thursday, 12.7 million Time Warner video subscribers and 2.4 million Bright House Networks video subscribers will get access to ESPN3.com without an extra charge." I'm sorry, without an extra charge. This is not really truthful. For the moment, the consumer will not spend extra to receive this internet channel, but trust me, they will spend more. "Disney also won a cash payment for granting Time Warner Cable the right to retransmit signals from four ABC stations and secured carriage of a new 24-hour channel called Disney Junior, a rebranding of its SOAPnet channel, when it starts up in 2012." These "extra costs" will be quickly bundled together and the cable bill will go up by even more than the amount spent. Heck, you gotta keep those margins up.

It certainly helps position Time Warner as the aggregator for branded cable and web content, working through Time Warner to authenticate these users to watch their ESPN 3 on a computer or other mobile device. Perhaps it is how TV Anywhere will ultimately be monetized.

Apple Again Innovates

While still no news on the Verizon version of the iPhone, Apple did come to the press conference with a number of improvements. Apple TV is back with a Netflix rental deal, the iPod Nano has a touch screen, and Apple has launched a music oriented social networking site. "Unlike other social networks used with Web browsers, Ping requires iTunes software on a computer or an Apple device. Apple could face an uphill battle convincing customers who already invest time updating and keeping track of friends in other social networks to also do so through Ping."

But wait, doesn't My Space also go after the music fan. To me, the key here is the convergence of the music to the networking. This natural link could easily bring people over to Ping. As iTunes dominates the music listening space, the key benefit is in the simplicity of communicating while your listening. Will consumers embrace Ping? It seems the infrastructure already exists and that Apple has little to lose in trying.

As to the rest of the announcements, the biggest story had been the re-introduction of Apple TV. To me, Netflix online seems everywhere and adding one more distribution device doesn't mean much. Normally, Apple is first in to the market, but this makeover seems less exciting than his other announcements. Will consumers rush back to embrace Apple TV? Apple needs to tell its base all the impressive things that this device can do that others can't. I need a real reason to buy it and I don't see one yet.

Time Warner and ABC Still Negotiating

The bad news is that the renewal has not been completed; the good news, they continue to negotiate in good faith. And by that I mean, they have not resorted to shutting down channels. Time Warner Cable customers can still get their programming despite being out of contract. Let's hope that discussions don't turn acrimonious at the last minute and that either side leaves the table. Dropping signals does not help either party.

Content v Distribution - Another Channel Dropped

Sorry, the news today isn't about ABC and Time Warner as that deal appears to be done; no, in this case it is between an independent network, Hallmark, and a telco, AT&T U-Verse. And as a renewal couldn't be reached before expiration of the contract, the channels of Hallmark were taken off the air. "For its part, the programmer said the telco had dropped Hallmark Channel and Hallmark Movie Channel from its channel lineup at 12:01 due to an inability to reach a new carriage agreement."

AT&T did replace Hallmark with two other channels, but is dropping channels the expected choice of action. What of the consumer. Are negotiations always so acrimonious that the last resort, dropping signals, becomes the first choice of action. Couldn't they at least agree to keep on air for the sake of the consumer as a sign of good faith negotiation. Unfortunately, in this case, and a majority of others, the consumer comes last.

I do understand the negotiation process and I respect both sides; but this drama is bigger than both the two current combatants. it seems to be replayed with each negotiation as part of the playbook. At some point content creators will get tired of this dance and reach out directly to the consumer. And if they do that distributors will have a harder time getting linear and on demand product. It will simply be streamed directly to the viewer's device from Hallmark and others.

Distributors and Content have a symbiotic relationship that relies on each other to be successful. Aggregated content enables costs to be shared and provides more choice (hopefully) for a better price. Thus the argument against a la carte pricing. But technology shifts also lower the barrier to entry so that the content company can bypass distribution and talk directly to a customer. At the same time, Distribution can control the flow of streams and could favor one stream over another. Hence the argument for net neutrality. And so these content and distribution negotiations are all impacting a slippery slope. Better to work together than to push forward potential distribution alternatives.

Apple Event Scheduled for Thursday

So what is the big announcement on Thursday. That iTunes will offer ABC TV shows. That Verizon will have an iPhone. That the Apple TV has been updated. "Apple has held an annual media event in September every year for several years now, each focused on the iPod. Though many Apple fans keep their fingers crossed that Apple will discuss other things (such as iPhones and Macs) in September, this is not usually the case. Typically, Apple updates the iPod touch and introduces a newly designed iPod nano, among other things." The clock is ticking and like every event, perhaps the hype is greater than the truth.

ABC and Time Warner Cable Settle

It seems that Time Warner Cable customers won't have to worry about losing their ESPN or Disney or even ABC on Thursday. According to reports, negotiations have led to an agreement with the only thing left to do is dot the i's and cross the t's. Which means simply that business terms have been settled and legal terms need to be ironed out. "One big unanswered question is how much Disney was able to extract for ABC, which is seeking distinct carriage fees for the first time." We can only assume that rates went up and ultimately so will subscriber fees. Higher costs for more of the same. And you thought we were in a recession.

Content Everywhere and Anywhere

There is so much talk about video content being accessible everywhere and anywhere. And for the consumer, it is all about paying once for that content. Cable companies like to talk about bundling, triple play packages of voice, data, and video and discounting for buying these bundles of services. The same holds true outside of cable.

People Magazine is bundling the price of online and subscription. "The iPad application for People will be free to readers who subscribe to the magazine, the first step toward what Time Inc., the world’s largest magazine publisher, hopes is a model for the bundling of print and digital sales for all its publications." Not a new concept as the Wall Street Journal also packages a print and digital subscription this way, but one that needs more active marketing to push the value back to the consumer. Until print goes away entirely, the bundle is a good way to move consumers into paying for digital subscriptions. At some point, they can nix the print and perhaps the package can increase the number of digital downloads for the family in exchange for not sending out the print issue. Less production and mail costs, hopefully more net income.

And it keeps pushing value back to Apple and the iPad. A tablet may be a smaller computer but it needs software and content to make it a must-have product. The more content Apple secures for the iPad, the more valuable a device it becomes and more difficult it becomes to compete with.