Facebook Troubles

We expect when we turn a light switch that the light comes on. We expect when we pick up the telephone receiver, the dial tone is there, we expect when we turn on our TV, our cable is working. And we expect when we type in our URL, that the website comes up. And when it doesn't, who do we blame. Our broadband provider, our computer, or the website itself. And so it seems with Facebook's website down for another period of time, something is up. And so while we cannot access our Facebook accounts, let us realize that we shouldn't trust any one site to hold us hostage. So climb down off the ledge. It should be back online soon.

Cablevision May Finally Spin Off Rainbow

The discussion to spin the assets of Rainbow, AMC, IFC and others, has been swirling around Cablevision for quite some time. In fact, they issued a tracking stock in the 90's before pulling Rainbow back into Cablevision. Well the results of the spin off of MSG certainly must have tasted good because the board of directors are moving forward with a Rainbow spin off. "The spin would be constructed as a tax-free pro rata distribution to stockholders and is expected to be completed by mid-year 2011." Good news to investors seeking to unlock more value for Cablevision stock and certainly healthy profits for the family and key employee stockholders.

From the article: "The new Rainbow's assets will include:
• National programming networks: AMC, WE tv, IFC, Sundance Channel and Wedding Central
• IFC Entertainment, an independent film business that consists of multiple brands - including IFC Films, IFC Productions and the IFC Center
• Rainbow Network Communications, a full service network programming origination and distribution company, delivering programming to the cable, satellite and broadcast industries
Cablevision would retain its cable and telecommunications businesses, Newsday, News 12 Networks, MSG Varsity and Clearview Cinemas.
Completion of the spin is subject to several external conditions, including receipt of a private letter ruling from the Internal Revenue Service, and final approval from its board of directors.
Cablevision reiterated that it is not considering the sale of Rainbow or its cable and telecommunications business."

Are iPad Apps Killing Newspapers?

Seems like a redundant question. The fact is that the digital age is hurting the print media. For newspapers and magazines, consumers have gone to the clouds to aggregate and access their information. And with an economy in trouble, the web has proved far less costly a means to view content. Readers have gotten more and more comfortable reading articles on their computers and smart phones. The iPad is simply another product choice for viewing.

It certainly doesn't take a survey to see what is right in front of our eyes. Still it does verify the trend. "The survey showed that 58 percent of respondents who use the Apple tablet at least an hour a day for news are very likely to cancel their subscription in the next six months. One in 10 said they had already done so and have switched to reading digital newspapers on their iPad." Still content remains king and newer delivery methods that are faster and cheaper always beat out their more cumbersome rivals. It is a natural evolution of our changing entertainment landscape.

Mark Zuckerberg Time Man Of The Year

Okay, so The Social Network movie did well with Golden Globe nominations. But Facebook has been around a few years now and nothing revolutionary seemed to occur this year. "For connecting more than half a billion people and mapping the social relations among them; for creating a new system of exchanging information; and for changing how we all live our lives, Mark Elliot Zuckerberg is TIME's 2010 Person of the Year." Runnerups were Julian Assange and the Tea Party, both interesting choices. I ask, what about Steve Jobs and the iPad. Revolutionary, I think so. Quickly a must have device for some businesses as well as individuals. I'd say yes. But I don't get to vote. So congratulations mark.

Comcast Testing New Set Top Box

As cable worries about cord cutters, those that prefer access to video over the web, cable operators have become nervous. So if you can't beat them join them. Comcast is testing a new set top box, internally called Xcalibur, that allows the TV to connect to both cable and web videos. "What little is known about Xcalibur. The device is said to bring a “smattering” of Web video and “basic connections” to social networks, but not access to the full internet. It also allows the user to search for content across live, recorded and on-demand options." Certainly anything is better than the current set top boxes used by cable.

A step in the right direction but the path has many pitfalls, including the merger plans with NBC. "A product like XCalibur would be just the kind of device where Comcast could conceivably promote its own online offerings (Hulu, Fancast, etc.) at the expense of competitors (Netflix)." Unfair competition is the crux of the concern facing the FCC and DOJ in approving this merger. But in developing a new set top box, is Comcast getting down to why it is needed.

Viewers aren't choosing the web because it is loaded with more content, or that it is in Hi Def, or that it is on demand. Cable leads in all these categories. Customers are choosing the web for two main reasons that I can see. Web access is far cheaper than a cable subscription and the web offers more flexibility across more platforms.

Today, cable is striving to provide authentication to mobile devices and computers. But to the issue of cost, cable must figure out how to lower its costs to stop the flow of customers from basic subscription. Does a new set top box do that? Not on its own. Lower prices is the real solution.

Time Warner Views Netflix as a Fading Star

Check out this article in today's New York Times. Per Time Warner's CEO, Netflix has "jumped the shark" and will become a fading business. he refers particularly to the deals that Netflix has signed. "The relationship between Netflix and the media companies will most likely change drastically, beginning next year when a deal between the company and Starz, the pay-TV channel, to stream movies from Sony and Disney expires." And while Netflix may have signed some sweetheart deals, it can't be so quickly assumed that they will not find common ground in their renewals. As their growth soars, they remain a powerful force that seems to continue to add a strong and loyal customer base. Should programmers see that their deals are additive to the revenue stream, I doubt they will want to rock the boat too much.

Are Time Warner and the other cable operators worried? Can Netflix continue to sign content agreements that work for their business model? Welcome to a new era of competition in the cable industry.

Another Broadcaster - Operator Negotiation

The end of year brings Santa, cold weather, and yes, another broadcaster and Operator negotiation. In this case, it is Direct TV and Hearst, who owns a number of local affiliate broadcast networks. "The Hearst announcement is the latest salvo in the ongoing battle between programmers and TV providers over carriage fees. Subscribers to DIRECTV, Dish Network, Cablevision and others have lost access to their favorite channels for a period of time this year because their providers could not reach a new agreement before the old one expired.' Markets potentially affected include Boston, Tampa, and 28 others. And for those markets, get used to ads touting alternate platforms to watch their channels. And like every other public negotiation, it will need get resolved until near or perhaps after the deadline. The result, a short term drop in carriage. But don't worry, this negotiation like the others before it will be resolved and order restored. And like every other agreement, the loser will be the customer.

Rainbow Changes Up IFC

When Cablevision and its programming arm bought Sundance Channel a couple years ago, the big question was why. Why add a second indie film network to the roster. One reason may have been favorable financial results. Another seems to be that change was in the air. It appears that IFC is becoming less film and sponsorship. "Instead of art-house films backed by sponsorship messages, IFC is increasingly running accessible indie movies, original series, reruns of cult comedies -- and traditional commercials." No longer saying this hour sponsored by, but offering 2 minutes of 30 second commercial breaks every 15 minutes in a traditional advertising wheel for TV. That means programming to a broader base, which translates to more viewers, more advertising minutes and thus more revenue. Obviously that change will be gradual in an attempt to keep the current viewers engaged while striving to attract new one.

This strategy is not a new one for Rainbow. It has been perfected before. When Rainbow owned Bravo Network (before selling it to NBC), they successfully moved it from a cultural channel with broader interest programming to a more general interest network. They also successfully converted it from sponsorship messages to the traditional ad model. It proved a successful transition that resulted in unlocking greater value from the channel. So most likely Rainbow has dusted off and reopened this playbook for IFC. And if they follow its action plans, they will have similar results. With Sundance Channel in their stable, they still have a network for more indie films and they can push those viewers over who still seek this programming. But don't get too comfortable. I suspect in another 10 years, Sundance Channel will also convert to traditional advertising, and indie films will only be available on demand.

Howard Stern signs new 5-year deal with Sirius

Well despite all the rumors, of Apple and iTunes, Howard Stern renews his deal with Sirius. "The deal, which runs through the end of 2015, provides that Sirius XM can now transmit Stern's show to mobile devices. No other terms will be disclosed, the company said." Good news to listeners and good news for Sirius.