Are you a little price conscious. Wanted a Kindle by Amazon, but waiting for a lower price point. If you don't mind ads with your e-books, your wish has been granted. "Amazon will sell its e-book reader at the lower price by showing ads as screen savers and at the bottom of the home screen, and by selling special offers, similar to Groupon and other daily deal sites." Sounds like a great deal until you hear that the cost savings is only $25.
Considering that your Kindle should last at least 3 years, a $25 savings doesn't seem worth the aggravation of putting up with advertising. "Amazon will show ads from brands like Buick, Procter & Gamble and Visa. The ads will also show up on the home screen, but they will not appear inside e-books." Considering that you get an ad every time you turn it on, the advertising revenue must surely pay for the cost of the Kindle. But $25 less seems hardly worth it. Couldn't Amazon have knocked the price point to well under $100, perhaps $50. I believe at that price point, consumers would flock to grab a Kindle and would further position Amazon the leader in the e-book space. And at that low a price point, consumers would more readily accept the ads.
But at this current discount, the price point is $114, and I don't believe that this particular marketing move will gain much traction. Will some consumers see a $25 savings for ads worth it, sure; but I am doubtful that it will be considered a hit. At the same time, it will be worth watching to see what else comes out from Amazon. They speculate a competing touch screen with the Android OS. Perhaps this ad move is short term till that formal announcement is made.
Tuesday, April 12, 2011
Monday, April 11, 2011
New And Improved Business Week Adding iPad App
It seems a change of ownership has helped Business Week to survive and blossom in a changing media landscape. On the print side, subscription remains stable and ad pages are up. The magazine reads better and provides a rich variety of content. And recognizing the power of the tablet, Business Week is launching it's iPad App as a free added value for print subscribers, "while non-subs will be charged $2.99 a month for access—a pretty good deal, considering a single newsstand issue goes for $4.99." Notice that the app is purchased by the month, 4 issues, as opposed to singular issues or even an annual subscription.
"Bloomberg’s two main goals are to preserve and expand the print readership, but also appeal to newer, younger readers who prefer to do their reading digitally." As a transition is occurring with consumers from wholly print to wholly digital consumption, this strategy of packaging both plans together builds value, comfort with both platforms, credibility in the digital space, and hopefully increased subscriber loyalty. That the application doesn't simply regurgitate the magazine but utilizes additional content to make it a complementary experience, should surely work to build a larger fan base. That Business Week is embracing the tablet app space shows they are positioning for the future and no longer stuck in the past.
"Bloomberg’s two main goals are to preserve and expand the print readership, but also appeal to newer, younger readers who prefer to do their reading digitally." As a transition is occurring with consumers from wholly print to wholly digital consumption, this strategy of packaging both plans together builds value, comfort with both platforms, credibility in the digital space, and hopefully increased subscriber loyalty. That the application doesn't simply regurgitate the magazine but utilizes additional content to make it a complementary experience, should surely work to build a larger fan base. That Business Week is embracing the tablet app space shows they are positioning for the future and no longer stuck in the past.
Friday, April 8, 2011
QR Codes Appearing In More Places
Open up The New York Times, or any other newspaper, and look at the ads. If your seeing more and more QR codes, you are not mistake. Print advertising is becoming more and more interactive and the smartphone the conduit to this information. And as consumers we seem to be getting more comfortable keeping our smartphones at the ready, whether to snap a photo, record a video, or click a QR code. Fad or future may be the question, but for now it is the it thing.
So to hear that stores are also using QR codes on the shelves to make their products more interesting should come as no surprise. "According to survey results recently published by Arc Worldwide, 50% of consumers are using their mobile devices while shopping. In response to the increase in smartphone usage and QR code awareness, Macy's, Home Depot, Best Buy and other large retailers have integrated QR codes into retail displays." While I have yet to see these codes appear in any of these stores, I will be on the look out. While TV screens have popped out in these retailers, their loop of programming may quickly be ignored. A QR code linking to a website or video can talk more directly to the consumer about a particular product or service of interest.
If you haven't downloaded a QR code App, the timing is right to start. You just might find yourself reading your morning newspaper with a smartphone in one hand and a coffee in the other; or walking down the aisle with your shopping list and phone out at the ready. But please, don't QR and Drive. :)
Cable Operator and Programmer Fight Over Streaming Rights
The legal fight is on and I suspect that more will be on there way. For the first round, it is between Time Warner Cable and Viacom, and it puts into question what rights are implied in their legal agreement. Time Warner believes that the rights to exhibit in the home extend to streaming devices; Viacom, home for MTV, Nick, Comedy Central and others, believes those are additional rights with additional fees required. "Viacom says the rights are technology and device specific to be negotiated with each distributor and that it 'has always negotiated rights to distribute our content based on specific technologies and devices to ensure that the unique business issues, such as security, product quality and audience measurement, are properly addressed.'” And while Viacom networks were removed from the TWC App, the desire is to have as much robust content available as possible.
And these streaming rights truly represent a slippery slope for operator and programmer alike. While it is nice to extend live and on demand viewing on streaming devices INSIDE the home, the real effort is to enable these same streaming devices to authenticate and receive the full channel line OUTSIDE the home. Hence, the line in the sand by Viacom.
Add to that the fact that they are receiving payment by other over the top distribution platforms, like Hulu and Netflix, demonstrates to the programmers that another revenue distribution stream exists. Giving cable operators this stream for free would seem to hurt that business model. The cable operator's concern is that customers will forsake their cable subscription for over the top. They argue that programmers may gain streaming media revenue but lose out on their cable subscription license fee. But programmers are not seeing it as a zero sum game and believe that it will indeed bring strong revenue growth.
So the fight for streaming rights will be headed to court. Most likely a settlement will be struck and this argument will continue to be negotiated between operator and programmer. Ultimately programmers want to be paid for each platform and cable operators may have to pay and also reduce their profit margin to retain their customer base.
And these streaming rights truly represent a slippery slope for operator and programmer alike. While it is nice to extend live and on demand viewing on streaming devices INSIDE the home, the real effort is to enable these same streaming devices to authenticate and receive the full channel line OUTSIDE the home. Hence, the line in the sand by Viacom.
Add to that the fact that they are receiving payment by other over the top distribution platforms, like Hulu and Netflix, demonstrates to the programmers that another revenue distribution stream exists. Giving cable operators this stream for free would seem to hurt that business model. The cable operator's concern is that customers will forsake their cable subscription for over the top. They argue that programmers may gain streaming media revenue but lose out on their cable subscription license fee. But programmers are not seeing it as a zero sum game and believe that it will indeed bring strong revenue growth.
So the fight for streaming rights will be headed to court. Most likely a settlement will be struck and this argument will continue to be negotiated between operator and programmer. Ultimately programmers want to be paid for each platform and cable operators may have to pay and also reduce their profit margin to retain their customer base.
Thursday, April 7, 2011
You Tube Offers Another Reason to Shaving or Cutting The Cord
You Tube's latest announcement, a better organization of its content into channels and a push toward more original programming, adds another reason for the consumer to downgrade (shave) or cut their cable subscription. And You Tube believes it can legitimately compete against cable and satellite for viewers. "The site is planning a series of changes to its home page to highlight sets of 'channels' around topics such as arts and sports. About 20 or so of those channels will feature several hours of professionally produced original programming a week, some of these people said. Additional channels would be assembled from content already on the site." Last month, You Tube acquired NextNewNetworks as one step to acquiring original content. Along with Hulu, Netflix, Apple, Amazon, and others, the web is becoming a serious alternative to cable viewership.
In this CNET article, cord cutting remains hard for most households to accomplish. "Between 2008 and 2009 alone, the firm said that 550,000 households cut the cord. Last year, it estimates 1 million households did the same." And those that do sometimes find themselves missing some of the programming unavailable yet on streaming platforms and come back to cable. Still the cable operators are today more affected then telco or satellite as their basic subs are leaving to go to the lower priced alternatives suc as FIOS, U-Verse, Dish, and Direct. Dish may already feel concerned with eventual cord cutting and has just bought out Blockbuster as a potential move to enter the streaming space.
The programmers seem pleased with this new stream and I suspect they don't see these new deals as revenue neutral. Liongate's recent agreement to sell Mad Men syndication to Netflix assumes that this new distribution platform won't hurt its cable and on demand deals. It is why Networks aren't excited about giving away streaming rights to cable for mobile devices when others are willing to pay for those streaming rights. And since cord cutting has not hurt the industry yet, programmers are enjoying the revenue from another revenue stream.
As for You Tube, their mission is now to keep their viewers engaged for longer periods of time. While they enjoy attracting a huge number of uniques, short form video encourages viewers to leave and not necessarily watch more. It is the same strategy some cable networks had when they first introduced their channels. Count TV Guide, E!, Comedy, MTV and others who moved their programming to 30 minutes and longer to keep eyeballs longer, grow ratings, and capture higher ad revenue. Where short form programming was once ideal on the web, viewers have not gotten more accustomed to viewing TV shows and movies on computers, tablets, and smartphones. And that is what is presenting serious competition to the cable platform.
In this CNET article, cord cutting remains hard for most households to accomplish. "Between 2008 and 2009 alone, the firm said that 550,000 households cut the cord. Last year, it estimates 1 million households did the same." And those that do sometimes find themselves missing some of the programming unavailable yet on streaming platforms and come back to cable. Still the cable operators are today more affected then telco or satellite as their basic subs are leaving to go to the lower priced alternatives suc as FIOS, U-Verse, Dish, and Direct. Dish may already feel concerned with eventual cord cutting and has just bought out Blockbuster as a potential move to enter the streaming space.
The programmers seem pleased with this new stream and I suspect they don't see these new deals as revenue neutral. Liongate's recent agreement to sell Mad Men syndication to Netflix assumes that this new distribution platform won't hurt its cable and on demand deals. It is why Networks aren't excited about giving away streaming rights to cable for mobile devices when others are willing to pay for those streaming rights. And since cord cutting has not hurt the industry yet, programmers are enjoying the revenue from another revenue stream.
As for You Tube, their mission is now to keep their viewers engaged for longer periods of time. While they enjoy attracting a huge number of uniques, short form video encourages viewers to leave and not necessarily watch more. It is the same strategy some cable networks had when they first introduced their channels. Count TV Guide, E!, Comedy, MTV and others who moved their programming to 30 minutes and longer to keep eyeballs longer, grow ratings, and capture higher ad revenue. Where short form programming was once ideal on the web, viewers have not gotten more accustomed to viewing TV shows and movies on computers, tablets, and smartphones. And that is what is presenting serious competition to the cable platform.
Wednesday, April 6, 2011
Dish Satellite Acquires Blockbuster
Blockbuster Video, once the darling of the rental DVD business has gone bankrupt and now sold to Dish Network. The question is why. Where is the synergy between a satellite company and a brick and mortar retail chain. And does Dish have the magic to reinvent Blockbuster to compete again.
Blockbuster's management missed the boat when accessing its competition; Netflix brought an online and mail alternative while Redbox delivered a vendor strategy to bring the DVD closer to where the consumer shopped. Redbox also hurt Blockbuster with a cheaper rental alternative. Dish needs to reinvent the Blockbuster brand to get back into the game. But does a satellite company understand the retail game.
I recall a decade ago when Cablevision bought Nobody Beats The Wiz out of bankruptcy. With so much debt owed Cablevision for its media buys, owning The Wiz must have been better than writing it off. Yet their success as a satellite company could not fix the problems of The Wiz and today the brand is long gone. I fear the same will be true for Blockbuster.
A complete overhaul of Blockbuster and perhaps a name change too to reinvigorate the brand. Expand from DVDs to add game products. Compete in the used market with Game Stop and seek other entertainment software to the mix. Push further into the subscription model to compete with Netflix and others and use a low cost strategy to gain a customer base. Will it be enough? Let's just say the odds aren't in Blockbusters favor.
Univision Ratings Catching Up To NBC
As the latest Census revealed, the rapid growth in the Hispanic population is quickly being felt. In media, the launch of more Hispanic cable networks including Nat Geo Mundo and others are to take advantage in this large population as Hispanic TV isn't niche programming anymore. "Univision last week attracted more prime-time viewers than NBC, the second time in four weeks that the Spanish-language network edged out one of the Big Four." And while Univision is not consistently beating out NBC and NBC has had some programming issues of late (Jay Leno Show), it shouldn't take away the direction that viewership and ratings are going. From the big three to four when Fox joined and now the five with Univision taking a seat at the table.
It certainly isn't lost on NBC the need to embrace the Hispanic population. In fact, "separately on Tuesday, NBC corporate parent NBCUniversal said it was launching a sales initiative called 'Hispanics at NBCU.'" No doubt other networks, wether publicly or not, will embrace similar initiatives. But it shouldn't extend as a hiring initiative. More importantly, it means more multicultural faces on TV shows too.
It certainly isn't lost on NBC the need to embrace the Hispanic population. In fact, "separately on Tuesday, NBC corporate parent NBCUniversal said it was launching a sales initiative called 'Hispanics at NBCU.'" No doubt other networks, wether publicly or not, will embrace similar initiatives. But it shouldn't extend as a hiring initiative. More importantly, it means more multicultural faces on TV shows too.
Tuesday, April 5, 2011
Hulu Plus Could Cause More Cord Shaving
As we discuss the cable operator's concern with downgrades and other cord shaving tactics, let's not forget the success that Hulu is having. Hard to believe, but its subscription service is attracting consumers and is poised to exceed one million subscribers this year. And with a two tier revenue stream of subscriber fees and advertising, Hulu is turning those digital pennies into digital dollars quicker than anyone might have predicted. "Mr. Kilar (Hulu's CEO) also reiterated that the company is on track to approach $500 million in revenue in 2011, up from $263 million in 2010. Its first-quarter revenue grew 90% from 2010."
The warning signs are there for the cable operators to act and to act loudly. What starts out as a small leak in the dam could quickly become a serious problem as more consumers switch to online only for their video consumption. Cable operators must do more to establish themselves as the communication aggregator in the home. Bring on mobility; develop a video security business; build out a national WIFI consortium with the other cable operators; become the indispensable link to the home and its inhabitants. Otherwise, consumers will keep shaving and cutting their service.
The warning signs are there for the cable operators to act and to act loudly. What starts out as a small leak in the dam could quickly become a serious problem as more consumers switch to online only for their video consumption. Cable operators must do more to establish themselves as the communication aggregator in the home. Bring on mobility; develop a video security business; build out a national WIFI consortium with the other cable operators; become the indispensable link to the home and its inhabitants. Otherwise, consumers will keep shaving and cutting their service.
Consumer Reports Supports Cord Shaving
In this May's issue of Consumer Reports, the cable operators are ranked for service with FIOS and AT&T U-Verse coming out on top. In addition, the magazine reports a growing trend toward cord cutting and cord shaving. "While only 1.4% of consumers have cut the cord in the last two years, 7% of current pay-television subscribers are considering canceling their service, according to a Consumer Reports survey."
In fact, Consumer Reports provides suggestions to help consumers lower their monthly cable bills, "including dropping premium channels such as HBO and Showtime; canceling TV service in favor of free, over-to-air broadcast supplemented by a service such as Netflix; and downgrading to a lower-speed broadband tier."
It is precisely this trend that is pushing the cable operators to build mobile apps to augment their delivery of programming and extend the reach of their platform. It is why programmers who fight these mobile apps may find their revenues from license fees begin to drop as consumers shave services to lower their bills. Unless programmers are getting the same license fee from these alternate distribution platforms, they may be in fact getting Netflix pennies for cable dollars.
For now, the premium networks have a far greater chance to be hurt by Netflix and Amazon then the basic networks. For cable subscriptions, consumers are switching providers in their neighborhoods to the lower cost service. So while cable basic subscription drops, telco and satellite subscription is still rising. But as the trend to downgrade accelerates, even those providers will eventually see drops in their base. Adding value to the cable subscription with access to the linear line-up, DVR, and on demand channels remotely can help slow down or perhaps even reverse cord cutting and cord shaving.
In fact, Consumer Reports provides suggestions to help consumers lower their monthly cable bills, "including dropping premium channels such as HBO and Showtime; canceling TV service in favor of free, over-to-air broadcast supplemented by a service such as Netflix; and downgrading to a lower-speed broadband tier."
It is precisely this trend that is pushing the cable operators to build mobile apps to augment their delivery of programming and extend the reach of their platform. It is why programmers who fight these mobile apps may find their revenues from license fees begin to drop as consumers shave services to lower their bills. Unless programmers are getting the same license fee from these alternate distribution platforms, they may be in fact getting Netflix pennies for cable dollars.
For now, the premium networks have a far greater chance to be hurt by Netflix and Amazon then the basic networks. For cable subscriptions, consumers are switching providers in their neighborhoods to the lower cost service. So while cable basic subscription drops, telco and satellite subscription is still rising. But as the trend to downgrade accelerates, even those providers will eventually see drops in their base. Adding value to the cable subscription with access to the linear line-up, DVR, and on demand channels remotely can help slow down or perhaps even reverse cord cutting and cord shaving.
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