Netflix May Be Worried

I love competition. Competition makes everyone work harder. Competition pushes innovation. And it keeps the economy humming. And hopefully, it keeps prices to the consumer at reasonable levels. As digital media becomes the product of the future, it pushes companies to reinvent themselves in this space.

Netflix has done it, converting from a mail house of DVDs to a streaming media mecca. And at the same time raised the competitive eyebrows of cable. But just as quickly as Netflix is chasing cable, Amazon may be chasing Netflix, based on a rumor circulating around. What is Amazon's true competitive play. The article also speculates a purchase if Redbox as well as distribution deals with premium providers.

And where does Apple want to be in this competitive arena. How does Apple TV partner or compete with this cord cutting rivals? "Netflix may be vulnerable, according to Michael Pachter, an analyst with WedBush Securities. 'It's a giant opportunity, and Amazon and Apple are the only two guys that have all the elements necessary to effectively compete: access to content, big balance sheets, good technology to deliver content, and some installed customer base they can easily market to.'" I couldn't agree more.

Hey Brother, Can You Spare A Charge

One of my favorite Twilight Zone episodes had a character finally getting what he wanted, to be left alone to read his books. As he bends over to grab one, his glasses fall and smash. He was left with all he could read, but without the ability to see. And so goes the nature of the mobile device. Left untethered, we have the capability to phone others, read, listen to iTunes, watch videos, tweet, and surf. But what do we do when the power runs out.

This is my dilemma with buying one device to do it all. Knowing my un-smart phone can make and receive calls, I don't want to risk draining it on other uses. Letting a second device manage the other non-essential tasks provides some relief that an important call won't be missed. It also means carrying 2 devices. Buying one device, say an iPhone or Android to do it all concerns me. What if the phone loses power after surfing and yet I still need to receive an important call. Do I rush into the nearest Starbucks for a charge and a latte? Am I charging my phone every time I am near an outlet just to be certain I have power during the day? How can I both use this mobile wonder that connects me without losing a complete charge to connect me?

Will we find ourselves begging for a charge wherever we go. Searching for an outlet at every meal. Or is it time for companies to make that quantum leap of sustained battery use. Today I am charging my iPod every night and that is for a device that doesn't make a phone call. It is that concern that keeps me from trusting one smartphone to do it all.

Interactive Content, Take Two - ABC Tries Again

A big argument, when watching sports on TV has been the amount of clutter filling the screen. Banners, bugs, pop ups, and often meaningless data meant to divert our attention form the action on the field. And sometimes, the statistics aren't what we want, when we want it. So what does work. Well with the rise of tablets and smartphones, incremental and interactive info can be shared concurrently with the action.

I haven't seen it offered yet with sports programming, but ABC keeps trying interactivity with its own TV series. The first was the show My Generation, but as it was not highly watched, it was lost on the radar. In this second attempt, a ratings winner will be used, Grey's Anatomy. Using a technology called Sync, the action on screen matches the interactive application on the iPad. "Sync is able to time content to a TV broadcast via Nielsen’s Media-Sync Platform, which allows mobile apps to automatically detect and synchronize with TV programming using audio watermarks. Programmers like ABC have been experimenting with all sorts of interactive-TV strategies for years in hopes of increasing viewer engagement and opening up new advertising opportunities."

I like where this is going. I would love to see this application tied to sporting events. The Super Bowl is a week away. An interactive iPad app tied to the on screen action would be a huge win. So much potential.

Linked In to Go IPO

LinkedIn is surely a terrific networking tool. I am constantly surprised the connections and information it has enabled. Like the Kevin Bacon game, it helps us recognize just how close we may be to another, especially in a job hunt and business development world. And it is those relationships and those connections that help to develop new ones.

So it is no surprise that such a business tool should find itself ready to go public and capitalize on such value. "LinkedIn Corp. plans to raise as much as $175 million in what’s likely to be the first public offering for a major U.S. social-networking site." Can incremental revenue continue to rise through subscription, advertising, and other means? Will users continue to upgrade to paid subscriptions and can advertising break through the clutter? Certainly those buying this IPO would believe that their is far more growth ahead. In a bad economy LinkedIn has done well; will it also prosper once the unemployment numbers decline? That it has multiple revenue streams is a huge plus. And for now LinkedIn is an amazing business and job search tool.

Netflix Has More Cable Subs Than Many Cable Operators

Netflix subscriptions have hit a milestone, exceeding 20 million subscribers. Few cable operators come close to that number. And while the subscription fee is far lower than a cable subscription, so are the costs. "Netflix said it added 500,000 subscribers during the quarter, giving it a total of 20 million, and expects to end the first quarter with 21.9 million to 22.8 million." That is some exceptional growth.

As winter snows have kept us homebound, we have pushed through our on demand choices, free, premium, and yes even transactional. Trying to find shows that would appeal to a boy and girls' sensibilities as well as their parents. Not too violent, not too romantic, but enough to appeal to the very wide interests of my family. Not easy. And yes, we also make concessions, one action movie for one romantic one. But as we sift through the on demand choices, we wonder, should we consider adding Netflix. And with that purchase, do we drop a premium, two, or more.

So I wonder, is Netflix an additive purchase by these 20 million consumers or a shift? Are these new subscribers dropping services or even cord cutting to take advantage of a Netflix subscription, or are they adding to their choice? Is Netflix playing a zero sum game against cable or simply augmenting the playing field for consumers eager to get content across more devices? I certainly would love to see that percentage of homes that have both a cable and Netflix subscription and those that have dropped a premium in favor of Netflix. An interesting research study of the entertainment landscape.

Tivo Sues Dish, Microsoft Sues Tivo

The waters are certainly muddy in regard to DVR intellectual property. Their are suits galore, and you can add Verizon and AT&T to the list. "Citing its customer AT&T, Microsoft on Monday filed complaints with the U.S. District Court for the Western District of Washington and the International Trade Commission against TiVo, alleging the DVR company infringes four Microsoft patents." Each company claims the other stole one patent or another and each is seeking licensing agreements in an effort to halt going to trial. Yet as the Dish and Tivo suit has shown, resolution takes years and years AND YEARS to untangle. And so what does it all mean? I can assure you this, the only ones winning will be the lawyers.

No Wallet Required - Use Your Phone Instead

How many credit cards, bank cards, business cards, medical cards, and other papers are you holding in your wallet? How about membership cards from Costco, CVS, the supermarket, all wanting to track you and your purchases. So that bulge in your pocket or pocketbook only gets bigger as more and more companies want to give you another card to hold. Well recently, Starbucks announced that you can buy its coffee with just a wave of your smartphone. And Apple is right there too. "Apple Inc. plans to introduce services that would let customers use its iPhone and iPad computer to make purchases, said Richard Doherty, director of consulting firm Envisioneering Group." A wave of your phone and your credit card is processing the purchase.

Sure there are always downsides. Your phone could get stolen; so can your wallet. Other problems though could include no battery left to power a transaction or a simple dropped and broken phone could leave you stranded without funds or information. Still there is something to be said for a thinner wallet now that the smartphone has become an equal part of your apparel.

Will Apple be a competitor with the credit card companies? I doubt it, unless Apple would decide to use its cash to buy a company like Pay Pal to handle the transactions. But, I believe that working together could be a win-win partnership for Apple and the credit card companies.

Tivo Snags Another Cable Operator

Count Charter, a top 5 cable provider to a lengthening list of cable operators now offering a Tivo set top box. Along with Comcast and Cox (although I have yet to see a full rollout), others include Suddenlink, RCN, and Direct TV. "Under the deal -- which represents one of TiVo's biggest service provider wins in years -- Charter this year will launch TiVo's Premiere DVR in unspecified markets, along with forthcoming multiroom DVR features. The MSO also will use the TiVo guide on non-DVR set-tops."

Even more exciting, is the level of sophistication that Tivo adds to the Charter and Tivo-enabled home. "The initial TiVo market launches in Charter territories will include Web applications, such as access to local news, sports and weather, as well as Facebook and Twitter updates, right from the TV, plus access to Charter's VOD library, including more than 900 high-definition titles." Truly added value and appeal.

As the volume of choice on television increases, Tivo has proven itself superior with better search capabilities than anything that other set top boxes offer. Add to that the expertise they bring, recording shows that it intuitively thinks may be of interest to the home. It is ultimately those devices that bring better search and recommendation to the home, that as a result, brings value to the consumer. And value hopefully translates as acquisition and retention for the cable operator.

10 Billion Served

No, not McDonalds' hamburgers, rather 10 billion iTune downloads and growing. So it is no wonder that online competition exists. The latest into the fray is Sony. "'Music Unlimited powered by Qriocity,' which Sony unveiled in September, started in the U.K. and Ireland in December and in France, Germany, Italy and Spain this weekend. It’s available on Sony’s Playstation 3 game console, Blu-ray Disc player, Bravia televisions, personal computers, and will be on smartphones using Google Inc.’s Android operating systems." So non-Apple devices can now get an online music store. As Apple and it's devices own the market share, should Apple even be worried? Doubtful.

Still, should the same providers of such content choose to stop offering to Apple, it would certainly affect sales. I doubt any such move would be in the best interest of the content companies, especially given the market share that Apple serves. And as Apple products have proved superior to other smartphones and music players, it is hard to imagine that such an offering will have a big dent on Apple. As long as Apple continues to innovate and improve, they will keep attracting more users and such their iTune and App stores will only continue to provide a greater source of revenue and growth.