Apple Finding Another Revenue Stream

The Apple iPad/iPhone and iTunes platform was not just smart, it was revolutionary. It has been a game changer in the phone business, music industry and book industry. As it has killed the music store and begun to cripple the book store, Apple has set its sights on its next target, the newsstand. Rather than buy your newspaper subscription from the publisher, you buy your annual subscription through Apple and get accessibility on your iPad and iPhone device. "Publishers are, wisely, worried that Apple's inserting itself as the go-to vendor for publications will make the publishers largely irrelevant, the same way it has made the music companies irrelevant."

Will publishers give up complete control? Will consumers want both print and digital version as they transition consumers. Will digital be the rebirth of the print industry and lead finally to consumers paying again for content and not just reading for free online. iTunes proved that a model can bring consumers back from stealing songs to buying them. Priced competitively with extras that are exclusive inside a walled garden of content, print subscriptions should find their subscription revenue rising.

The timing of new content with the next generation device is typical for Apple. It keeps them on the cutting edge and maintains Apple's leadership position. While Apple has never conquered the PC world with its mac line, despite being a superior product, it has found great success with the ancillary devices that we as consumers are becoming more dependent on. First the phone, then the pad. Apple is making them the must have gadgets for all.

Big Media Threatened By New Media

Scratch, scratch, scratch. Here that sound. That is the sound of streaming media taking away viewers from cable. Is it a new sound; heck no. Radio heard it from TV. Broadcast heard it from cable. And now cable is hearing it from new media. "The report said companies like Netflix were poised to see solid growth as consumers with moderate income switch to its low-cost, subscription streaming service potentially cutting cable service from companies like Comcast Corp (CMCSA.O) and Time Warner Cable (TWC.N)." It is change at its finest and brings new opportunities and new challenges. Internet content from Apple, Amazon, Netflix, My Damn Channel, Next New Networks, and many many others. ESPN.com isn't the only stream in town.

While Netflix sees growth, cable basic subscribers are declining. Right now, cable is watching its current customers either taking on more services or dropping completely. As customers figure out that they don't need digital phone, that they can downgrade their line-up removing premium services and high costing tiers for movie services that are cheaper and just as robust. And as that trend continues, that they can access broadcast still for free and don't need the cable access.

The world is broadband only and access to all of tons of content. The real worry of cable is that the triple play becomes one play again and that cable doesn't get to aggregate content anymore. TV makers are making internet ready TVs and content creators are selling shows to cable, Apple, and others. Cable must act to differentiate itself if it wants to remain competitive.

Disney, Nielsen team on Apple iPad app

Has advanced advertising on the set top box just got burned. Does interactivity on the TV screen matter when a device in your lap better augments the viewing experience. Has the Apple iPad proven itself again, beyond that of an e-reader to become the ultimate TV companion. The answer is yes.

While the show, My Generation, may not be the ultimate in water cooler conversation, it will simply be the future answer to a trivia question on which was the first show that had interactive capabilities. "Users who download the app can multi-task between the TV experience and the iPad, which will display polls, trivia and other content timed to be relevant to what is transpiring in the 'Generation' storylines." Rudimentary to start, but the future capabilities seem endless. I'd love to see what ABC and its sports counterpart, ESPN, do with a live sports game.

So how does it work; how does the iPad app know what is on the screen. To me, this is ingenious. "What Nielsen brings to the table is audio watermarking embedded in the broadcast that signals the iPhone {and iPad} through its microphone to trigger timed content. While the technology has always been used by Nielsen strictly for measurement purposes, a new mobile-friendly upgrade opened a new ancillary business for the company and Digimarc Corp., which is teaming up with Nielsen on what it has dubbed its Media Sync Platform."

Interactivity with programming without clutter on the TV screen. In fact, an iPad app seems less intrusive than on-screen. And so much easier to coordinate what you see on screen with an online purchase. The commerce opportunity could be more easily managed through your iPad than through a set top. As ABC and Apple test the partnership, I'm sure more strategic partnership opportunities will emerge along with more revenue streams. Regardless of when, Apple is certainly making its iPad a must have device in the home.

Cable Losing Shares

The story may be about Time Warner Cable announcing a loss of subscribers in the third quarter, but once the other cable companies announce their numbers, Time Warner will not be alone. But it is the second line in the NY Post story that really made me chuckle, "Poor home sales and the weak economy, which have families pinching pennies, are seen as the culprits." Perhaps there are other reasons at play too!

The cost of cable has risen faster than the inflation rate. Internet connections, whether tethered or wireless, are more valuable to the home than the cable subscription. And customers are tired of paying for more but essentially getting the same content. Customers are tired of exorbitant cable bills. My own relative recently informed me that their family recently cut the cord. A digital antennae, a broadband connection, and a Netflix subscription, and they estimate a savings of over $500/year. Sure, they are watching their pennies, but they are not doing without. They are getting all the content they want and need through alternative sources. It is competition through technology that is hurting the cable distributor. Yes price is a factor; but choice, convenience and ease of use are working against cable too. Technology is building a better user experience to compete with the cable model and at a lower price.

How will cable respond. Unfortunately, broadband pricing will begin to rise, again most likely faster than inflation. Heavier users will be penalized with additional fees. And cable will try to offset the loss of cable subs through higher pricing to their broadband subs. A wrong strategic move. The barriers to entry in wireless appear lower than cable. New competitors will rise and offer blanket coverage in your community and across the US. Content will continue to fill the IP platform and the consumer shift away from a tethered world will only grow.

The signs are there, Time Warner and the other cable companies. Stop blaming the economy and start changing your strategy to adapt to a changing entertainment landscape. Else your leadership position will fall.

Sirius Could Be More Profitable Without Howard

If Howard Stern chooses not to renew his Sirius deal, it may prove more beneficial to Sirius. Despite losing some Stern devotees, "Sirius can build sales with the money it saves on Stern." Or use some of that money to buy other talent needed to keep the content on Sirius looking exclusive and unique.

Whether it is an improving car industry or overall economy, Sirius subscriber numbers have been growing. Per the S&P analyst in this article, Sirius could add 1.1 million customers in 2010 and another 1.4 in 2011. Finally some healthy growth for them. Beyond Stern, Sirius' mix of sports, music, comedy, talk, and more may finally be appealing for consumers. With new cars including Sirius technology, the ease to subscribe is also a major boost. As Sirius uses free trial to demonstrate its value, the customer base rises. It may slowly becoming a must have feature for every car.

Is It Time To Buy An iPad

Fourth quarter is just around the corner and stores are gearing up for the holidays when sales really pick up. And in time for the holidays, the next release of the Apple iPad. "Apple is rumored to be working on a second generation of the iPad with FaceTime video conferencing ready by the holiday shopping season." Does a front facing camera on the iPad turn the corner from an intriguing device to a must have? Or, is it really necessary to rush a next version. "Apple has been racing to keep up with demand for the iPad, selling more than 3.27 million by late July and only getting to 24-hour turnaround on orders as of late last month."
With demand what it is why the rush.

I Want My MTV

Almost 30 years, the cry of "I Want My MTV" was both a song refrain and the longing of a new generation for programming geared to them. The rise of a channel devoted to music, another to news, and another to sports was the start of the 1000 channel universe of cable programming. New cable networks arose although the mythical number of channels was never met. The cry for MTV brought more programming choice to the medium we love - television, and demonstrated that niche programming can survive.

That is for a time until the desire for more profits outweigh the desire to remain true to the niche one serves. Each channel, MTV included, broadened its programming format to widen its audience interest and raise its Nielsen rating. Every channel started delivering movies, cartoon channels added live action, old movie channels added new movies and tv series. Even MTV stopped showing music videos. Not one channel today has stayed true to its niche.

But the cry for more continues to ring out and today it is in the form of on demand programming. There may not be 1000 channels, but there sure is almost 20,000 hours of on demand programming. But viewers also want to watch content beyond the four walls of their home. The cry today is now for wireless and access everywhere; and with it more choice. While on demand rises, the need remains for access to live programming remotely as well. The cry is for connection - across devices, across platforms, heck even across continents. ALL CONTENT EVERYWHERE. Perhaps we need a new song refrain today to hype our hopes for this next want. "I want my content now".

Viewers Prefer Local News And Miss Local Cable Companies

I read this short article today and it reminded me of what cable distribution initially meant. As people seem to prefer local news, cable was meant to be your local distributor. Municipalities would take bids and select their local cable provider in exchange for local channels and production facilities. Just check down in the lower numbers of your cable line-up for those channels. Yes they are still there. And cable companies built local offices manned by local management to respond to local issues. And they marketed their local presence as something unique, that the telephone company couldn't do.

Today, cable distributors have consolidated their management operations into regional or divisional levels. Most decision making has gone even higher into the corporate building. There seems to be no more local and cable distributors have opted to copy the telephone model today instead of differentiating from it. The local manager no longer exists; in fact, those local buildings may now simply be call centers or warehouses with no General Manager in attendance. Consolidation is king.

As for the story of local news still number one. people still live in neighborhoods and still want to know as much about what is going on outside their front door as in their state, country, and world. Local may have been a buzzword for the early days of cable, but local still does matter.

Apple Flashes New Apps

Apple's strategy of doing their own thing regardless of the competition has suddenly hit a sharp left turn. Their exclusivity with AT&T left Verizon open to do other deals and competition has moved down the pike fast. Along with products that compete, apps that work in one world, but not Apple's has been a real challenge. At first Steve Jobs said no to Adobe's Flash, but competition from Google has altered that position. "Apple Inc is easing restrictions for building iPhone and iPad applications, a move that should allow for the use of third-party tools such as Adobe Systems' Flash software and ease tension between the two companies."

So if apps co-exist across products, I assume the next challenge for Apple is to remain innovative with product design. That does not seem to be a problem. Apple has proven itself numerous times with the iPod, iPhone, and iPad. Files from one program easily get manipulated in another program. The fact is that Apple products are built well and function even better. It behooves Apple to open up its App development to enable even more functionality for its devices. Apple truly builds products with ergonomics in mind. Ultimately, Apple will continue to distance itself from Google in building devices that further improve the convergence of content across distribution platforms.