Cable Subs Not Being Lured to Dish Network

While cable has been losing subs and Direct TV recently announced that they added almost 300,000 customers in the last quarter, you would have expected that DIsh would announce similar growth. That is not the case. "The number of subscribers fell by 156,000 in the fourth quarter, Dish’s worst quarterly performance ever." So hard to believe, especially as Dish has positioned themselves in the marketplace as appealing to the budget conscious consumer. CEO Charlie "Ergen blamed the subscriber losses on a combination of a sluggish economy, a blackout of some News Corp. channels, heightened competition and poor execution by the company’s management." Can Dish turn it around. With what seems like an opportunity in the market, the telcos and Direct TV have found the winning formula.

Verizon FIOS, Your "Local" Cable Operator

Verizon Fios has started running television and radio advertising in the NYC market touting itself as your local cable operator. The spots feature installers and support staff talking about being your neighbors and in your community. A terrific ad positioning Verizon FIOS as more than just a business, but also part of the neighborhood.

The most amazing part about this new ad campaign is that it borrows from the cable operator playbook from a decade ago. Back then cable pushed its support of local community activities including parades, its local offices, and especially local management and staff ready to serve. It positioned itself against satellite as local and direct, not nationally based like satellite. It pushed this same advantage when the "phone" company became competition, first with its digital phone service, and then when FIOS was formed.

As the telcos became more competitive in the digital cable space, the cable operators responded by becoming less local. Through consolidation of offices, management responsibilities went from local to divisional to regional. The many local offices and management teams closed to be replaced by multi-state regional offices. Cable consciously left the local space to concentrate on economies of scale and cost efficiencies. And with that change, cable operators lost their market positioning as your "local" company.

With the latest Verizon FIOS ads, it is now the telcos positioning themselves as your "local" cable operator. How ironic for the cable companies to lose this competitive edge and so apparent that the telcos have become the aggressors in the market fight. Do consumers truly believe that either FIOS or cable are local; doubtful, but if you say it enough times, a percentage of people slowly begin to believe it is true.

TV Is A Multi-Screen Experience

TV watching is not only for one screen anymore. We blog about it, twitter opinions, and share experiences on Facebook. And when it concerns big events, like the Super Bowl and Academy Awards, we want to be as immersed in it as possible. "The most promising, and interesting, of the list is Oscar Backstage Pass. The app will work on iPhones and iPod Touches (as long as you have a Wi-Fi connection), but those with iPads will have a much better time with it.... ABC plans to provide users with options for eight camera angles not shown to network viewers. So if ABC’s on-air commentators are interviewing someone you care little for, you can watch elsewhere. The app’s live video feed continues during commercials." Viewer controlled experiences that change our behavior from passive to active. And that may mean a rise in ratings too.

And if you seek more interaction, there are other applications that will allow you to vote for your winners, the fashions, trivia, and other contents. It seems we are now no longer satisfied with just a sitback only experience. We want more and we want our opinion heard. These apps may be more prominent among the big night TV events, but it is heading across all TV, from sports to sitcoms. We seek more interaction and control to enjoy the show on our terms. And it just may help the content that we watch.

Cable Operators Cannot Win The Battle With Just Content

Attention cable operators, while linear and on demand content is an important element of the fight for subscription, it is not the only element. Content creators are selling their content to everyone. For example, CBS has sold their content to an over the top competitor, Netflix. Other content companies have done similar deals with them and Amazon and others. So no matter what store a customer goes into, their content is there to be viewed. And these competitors are selling their service for a fraction of what cable operators are charging.

Yes, content is king, and cable needs to also carry this same content. But to remain competitive, they must do more. TV Everywhere is one means to remain competitive. While on demand TV Everywhere is important, so is linear carriage on TV Everywhere. It is what Dish offers its customers through Slingbox. Cable operators have to be more price sensitive with packages to suit every economic level. And there is nothing like great service. Best Buy offers the Geek Squad; cable operators need to brand their service to help customers sort through their technological questions. Cable operators cannot underestimate how service can be valued by consumers.

Competitors are grabbing at cable operators' customer base. Some are cutting the cord altogether; others are going to less expensive alternatives like Direct, Dish, and the telcos. While operators are seeing declines in basic subscription, their competitors are enjoying growth. Operators can't keep squeezing more revenue from these remaining subs. They must recapture customers. Better set top box interfaces, better service, more technological innovation, and more competitive pricing are key to that growth. Otherwise, with the same content being offered to their competition and no longer remaining differentiated, customers will continue to flee for better pastures.

Social Media, Political Change

The internet has quickly changed the media landscape, eliminating paper and plastic in the form of letters, newspapers, cds and other manufactured products for digital ones. The rise of e-mail, iTunes, and of course Facebook and other social media tools. And the speed of this change and the convergence of devices have enabled quicker communications and sharing of information.

So is it no surprise that the internet has also made the world a much smaller place in collaborating ideas. The rise of these social media, sharing tools has provided a power for change unlike anything else in history. The speed of interaction and the breadth of coverage means more people are knowledgeable of what is happening both near and abroad. And it has given rise to political change.

The uprisings in Egypt, Libya and other nations, most notably where freedom is limited, all comes from this access to social media and communication tools. Where that change leads to is any one's guess. In Egypt, the movement was mainly peaceful although there were noticeable levels of violence. In Libya, the violence is more severe. The challenge remains though, at what cost freedom. Is there enlightenment among those involved in change that leads to a more democratic future or is it one that simply leads to more anarchy, terrorism, and hatred?

We ask, do the means justify the end but we should also ask do the ends justify the means. Will the end be more enlightenment of freedom for all, equality, and real justice? Social media may have quickened the pace of change but are these countries, ruled also by some religious beliefs that force ones ideology onto another, the best means for change. Can the more moderate factions outweigh the extremists who will fight to the death of all? One can only hope that with all the unrest in these third world countries, moderation and enlightenment can also emerge and prevail. Social media is an amazing tool and has now proven itself as a valuable means for sharing and disseminating information and knowledge in the fight for freedom. The hope is that the future is one that better serves the country and its people and the rest of mankind.

What if Your IPhone Was A Wristwatch?

The older generation love their wristwatch. It is a necessary article of clothing to keep us informed of the time. And it replaced the once fashionable pocket watch. But today's tech savvy generation don't need a wristwatch anymore. Their pocket watch is their cellphone or iPod. And as the Apple iPod Touch has gotten smaller, there is interest in making it the next generation wrist watch. "When Scott Wilson posted his idea for an iPod Nano transformed into a wristwatch on crowd-funding website Kickstarter, he hoped to raise $15,000 to bring his invention to life. Two weeks later, he had $600,000 and new record: Wilson's project shattered 20-month-old Kickstarter's previous fundraising tally."

But what if the next generation wrist watch was actually an iPhone. Add a bluetooth ear piece, and the iPhone Wristwatch would seem to me to be the must have device. No pockets necessary, always accessible, and small and unobtrusive. No need to place your phone on the dining table when eating. Not uncomfortable in the pocket when sitting. And so ergonomically practical. As devices get smaller, they are easily misplaced. Changeable wristbands would keep the device fashionable. It seems Apple would enjoy selling another product and an iPhone Wristwatch could be a nice complement to the iPad.

The Digital Divide

It once was important that every home have phone access. It became a basic necessity of life, along with food, clothing, and shelter. We hated our phone company, it cost a fortune to make a long distance call, but they got us service. And movies like "In Like Flint" enjoyed mocking them.

Today, phone service is an afterthought. Even cell phones are so last year. Today it is all about connection to the web. And today there is a digital divide between area that can access and places in America that can not. "As the world embraces its digital age — two billion people now use the Internet regularly — the line delineating two Americas has become more broadly drawn. There are those who have reliable, fast access to the Internet, and those, like about half of the 27,867 people here in Clarke County, who do not. In rural America, only 60 percent of households use broadband Internet service, according to a report released Thursday by the Department of Commerce. That is 10 percent less than urban households. Over all, 28 percent of Americans do not use the Internet at all." Of course there is a difference between having broadband and using it. For the health and wealth and welfare of this country, broadband access has become a necessity.

And where there is no broadband, dial up service remains the next best thing to connecting to the web. It is slower and more expensive, but remains an option.

Like the phone, there is a need to be connected 24/7 to all that is around us. Broadband access has made this world a smaller place. And as seen in Egypt, social networking via broadband access, has led to political change. That connection is essential to communication, information, and yes even entertainment. And when it goes down, the loss is felt. No access to email, Twitter feeds, websites, etc. In fact, a drop in service is more quickly felt than with the phone. if your phone doesn't ring, you assume that no one is calling, not that the service stopped. But when broadband is down, you quickly see that your website isn't loading.

Is Apple In Antitrust Violation?

Apple has built a powerful tablet in the iPad and the best mobile device with its iPhone. And it supports its products with an App Store to feed it content. It remains the most forward thinking company among scores of others. But that front runner status also causes trouble and the rise of online subscriptions through the App store is causing ripples. "The Justice Department and Federal Trade Commission's interest in Apple's new subscription service is at a preliminary stage, and might not develop into either a formal investigation or any action against the company. But it comes as Apple has attracted growing antitrust scrutiny in the U.S. and Europe."

So Apple has built an aggregate site; why can't others. Shouldn't companies be allowed to build apps that can be downloaded without going through the Apple digital store. Perhaps that is the crux of the issue. The app site enables convenience and that convenience is worth something. If the apps store is what drives higher subscription rates, than perhaps the commission charge is justifiable. But if good marketing can push consumers to find apps outside the store, then all the better for competition.

"To make a case against Apple, antitrust enforcers would have to show that Apple has market power and is abusing it. That depends on how they define a market. Apple's iPhone is the phone of choice for many affluent consumers, but it has only a 16% share of smartphone sales and a sliver of the broader mobile-phone market." And the tablet market is still in its infancy. I hate to see government regulation slow down innovation, but it is also important that barriers to entry remain low to encourage more competition.

Online Movie Subscription Business Getting More Crowded

Watch out HBO and Showtime, stay on your toes Netflix and Hulu, be mindful Apple and Amazon, and be concerned cable operators, another movie on demand service wants to enter the field. Redbox, who has been offering a dollar a day DVD rentals through vending machines, is looking to add a subscription service. "The online service would be combined in some way with physical DVD rentals, they said. Coinstar said in July it was developing an Internet strategy, without specifying the model. In October, Redbox said it planned a partnership with an existing digital player." Unlike Netflix who already had a DVD subscription model, Redbox's appeal was a one off strategy where customers only paid for the time they spent with the DVD. Their challenge will be turning these types of customers into a sustainable monthly package.

Their entry into the movie digital distribution field only creates more competition for the other players. Cable has the edge offering transactional, premium, as well as free on demand content for a low price. But that amount rises the more premium subscription and films are purchased. And cable customers get the sticker shock when their total bill, which also includes phone, cable, and broadband service rises above levels that customers want to pay. The Redbox traditional model of buying only what you watch at a low daily cost appeals to the budget conscious customer. The others, with their subscription packages, are appealing as their rates aren't combined with other services and so the customer is more comfortable spending $10 a month verse $200.

Having Redbox enter should ultimately help the customer. Competition in a free economy pushes pricing down. The low price verse high service models allow customers to choose which provider best serves their needs. Can Redbox adapt its model and grow its business? Clearly in a digital age, physical copies of content are becoming less necessary. It seems an inevitable move in order to remain competitive.