3D Movies More Fad Than Fancy

As I have written previously, I am not a fan of 3D movies, didn't consider buying a 3D HDTV, or have ever found the experience of watching 3D unbelievable. It seems I am not alone. "The novelty has apparently worn off and Americans are now opting for cheaper, less gimmicky 2D movies, such as the recent huge hit 'Hangover 2.'"

Is the economy partly to blame, perhaps. Is it that the experience of watching 3D requires special glass an issue; for me, absolutely. "Because 3D movies are significantly more expensive to attend, and because only a few movies like 'Avatar' have ever really made 3D seem truly amazing. For most movies, it's a lame add-on that doesn't add much." Hopefully, one day there will be a technology that supports a truly 3D visual experience. Once again, Star Trek may have had it right with their holodeck idea.

Entrepreneur Opportunity For Broadband Business

Attention Entrepreneurs! Seeking a continuous source of subscriber revenue? Interested in competing in a business where demand for consumption is only growing? Then have I got an opportunity for you. Because cable companies are fearful that their triple play business model is reducing to a pipe only world, they are seeking to clamp down on broadband usage by their current customers. "With companies like Netflix and Hulu threatening their subscription-cable business, companies including AT&T, Comcast and Charter no longer want to aid the competition by offering consumers all-you-can-eat broaband." And logically it makes sense, only it doesn't satisfy the consumers' need for more streaming. Charging on a per bit cost is reminiscent of the days when phone companies charged per minute for calls.

So who could ideally get into this business to compete with cable and provide consumers with an alternative broadband company. I have a couple suggestions. First would be for the utility companies to consider broadening their business. Electric, gas, and water companies already reach out to every home in their community. Using existing relationships and local service, they could build out a wired and wireless grid to offer competing broadband coverage.

Mobile phone companies could also offer more streams to homes and build out a WIFI platform in their communities. And lastly, let's build out a national WIFI network. No doubt, a subscription model could open up an ad sales opportunity as well bringing an additional revenue stream into the equation.

Clearly the cable companies have something at risk, with cord cutters and cord shavers scaling back their subscription for broadband access only. Offering an "all you can eat model" only hurts the cable subscription business structure. But there are consumers who only want broadband access, inexpensive and accessible. Hence a new business ripe for the taking requiring some capital expenditure to get it off the ground. Good luck. I'd love to help start it.

The Challenge of Vertical Integration for Comcast and Bloomberg

Back in the 1940's, an antitrust case was decided that had long lasting effects on distribution and content. In US vs Paramount Pictures, the courts decided that vertical integration, in this case the owning of both a studio and a movie theater, was illegal. Studios were forced to sell their theaters and an oligopoly was destroyed.

So it is of no surprise that the vertical integration of content and distribution is popping up once again in cable. That was the concern behind the merger of NBC Universal and Comcast and thus rises the latest accusation between Bloomberg and Comcast. "In order to win antitrust approval to purchase a controlling stake in NBC Universal, Comcast promised not to favor its dominant business news network, CNBC, over rivals such as Bloomberg TV. Bloomberg claims that as a condition of the deal, Comcast is obligated to place its business channel closer to other news channels, including Comcast's CNBC and MSNBC."

Smaller studios faced similar troubles. With big studios owning all the movie theaters, smaller studios couldn't get placement of their films. They were in blocked out. And while the media world has changed and digital has opened up distribution alternatives, cable remains the leader at the moment. Limiting or restricting viewership of cable channels is simply history repeating itself; vertical integration causing smaller networks to not get their content in front of audiences. While Bloomberg may have deep pockets to fight this battle, there are other networks paying close attention to this fight so as to demonstrate why they also deserve equal access.

Thus begins another chapter in cable, a fight over antitrust behavior. yes the entertainment landscape may have changed but history is a funny thing; when we don't learn from our mistakes, we repeat them.

EBIF Dying Part Two, Comcast Testing IP

How timely. Shortly after sending out my previous blog do I find this terrific article in today's Wall Street Journal. The old maxim, if you can't beat em, join em, seems to have prevailed as Comcast begins to accept that for now the future is IP over EBIF. "Using the MIT campus as its proving ground, Comcast in coming months will try delivering TV channels using the same standard used to deliver data over the Internet, known as the Internet protocol, or IP. Like other cable providers, Comcast currently delivers channels over less versatile digital television technology that sends the video in streams to set-top boxes and isn't compatible with the Internet." And should it prove a successful test, cable interactivity and convergence could take a large progressive leap forward.

"The new technology could enable Comcast to deliver video service to any customer with an Internet connection, regardless of whether they live in an area covered by Comcast's cable system. A move to do so would shake up the pay-TV market, where cable systems largely operate in separate regions of the country, known as 'footprints.'" It is this very notion of competition across the entire USA by cable operators that causes competing satellite companies to worry. Their competitive edge is to merge Direct TV and Dish and compete with cable universally.

And a web based approached better gives the consumer what they seek most, content what they want, when they want, where they want, and how they want. No set top boxes, better interactive guides, easier set up and servicing. Overall, an IP approach delivers a better experience than EBIF. So push that test and start rolling out.

Cable's EBIF Is Dying On The Vine

What happens when an industry is so resolute in its plans to protect it's turf against the competition that it draws a line in the sand only to see others attack from a different front. They lose. Such is the case in battle and so too in business. To stay so narrowly focused and unbending to changing external factors is a recipe in disaster. And so too the ultimate end of EBIF, Enhanced TV Binary Interchange Format, designed exclusively for cable.

"It was invented as a way to add more oomph to the fielded base of digital cable set-top boxes, which obsolesced almost before they were installed. Ten years ago." But the world became Internet Protocol (IP) based and TV and other consumer electronic manufacturers, found more flexibility working with IP than with the cable operators and their EBIF technology. The result are not helping cable with the rise of more over the top competitors offering similar video content. These competitors found the different front and did an end around on the cable operators.

Can EBIF and IP work together? Some Apps are working to make it so for better connectivity and TV on the go. But it may not be the ideal technological approach. Ever wonder what those blue pop up screens are that come up on your TV for on demand movies and other ads. They are achieved with EBIF. And they look like decades old graphics. Clunky and downright ugly. Certainly not as clean and easy to interact with as other means. Communication has changed and EBIF has not. The consumer seeks more convergence and ease of use in their interactions with their video content. EBIF has to change or cable operators will continue to lose.

Dish Desires Direct TV

Speculation has arisen yet again that the two major satellite players may look to merge. What once might have been thought of as unthinkable now seems possible, especially with others before them being approved. Look no further than the merger of Sirius Satellite and XM Radio, despite being the only two satellite radio companies. But they were approved because competition still exists via the web and terrestrial radio. Other mergers like Comcast and NBC Universal also demonstrates that even vertically integrated media companies get approved. So it seems that a merger of Dish and Direct TV could also pass because of wire and wireless competition.

"DirecTV has 19 million subscribers, while Dish has 14 million. Together, they would form the biggest pay-TV provider with enough clout to push back against rising programming costs." Currently Comcast has over 22 million subscribers; a satellite merger would make Dish-Direct TV number 1. For cable, the next step is clear to them, continued consolidation of cable operators. With Cablevision recently owning Bresnan and Charter selling its LA systems, MSOs and systems should be ripe for the taking. Logically, Charter, Cox, and Cablevision should be viewed as ripe for the taking.

Is the Direct TV - Dish merger speculation or reality? Today it may be just talk, but as the industry life cycle for cable continues to mature, consolidation and convergence are necessary next steps. It brings better synergies, better efficiencies, and lower costs to compete in an ever changing media landscape.

If Content is Sold Everywhere and Anywhere, Does It Become A Commodity?

Content deals are everywhere with sales to cable, Hulu, Netflix, Tivo, Apple,and others. Then it is repackaged and offered to the consumers. To compete in the mobile space, cable has now pushed its on demand extension onto iPads and iPhones. And as a consumer, we can decide where we want to watch our Spongebob episode, whether on TV, on our computer, on our tablet, or on our smartphone. With sales across all platforms and all devices, all this video content is becoming ubiquitous. Soon it could be at a tipping point where the content itself is viewed by the consumer as a commodity. With no exclusivity or other distinguishing differences, the consumer will make decisions on how to watch on a pricing basis. The cheapest viewing platform wins.

Could that hurt the cable model as content owners sell to mobile devices? The cable model is certainly not the cheapest and the threat of cord cutting already exists. Do these content deals simply increase the threat of more lost subscribers? For viewers, the concept of content everywhere and anywhere is appealing. For content platforms, like cable, it means figuring out new strategies to maintain a differentiated value to offset the content commodity issue.

Content creators are pursuing more platform deals to raise revenue. Distributors will find competition become more fierce. Over time, the big fish will swallow the smaller fish and the distribution choices will get smaller. It is the pattern of every industry and already at play strictly within the cable industry. It is the industry and product life cycles at play. With ultimately the many leading to the few.

Two Screens Are Better Than One

Count me in the majority, I look at my smartphone when I am watching TV. "About 70% of tablet owners and 68% of smartphone owners said they use their devices while watching television, according to Nielsen’s mobile connected device report for the first quarter of 2011". And I suspect this percentage will only continue to grow. What are we doing with our devices while concurrently watching TV. For me, it is to catch up on email, get scores of out-of-market baseball games, and play Words With Friends and other silly games. Commercial breaks become an obvious time to sneak a peak but I also escape to my second screen in program. The reasons seems to be that most content on TV is what I call "low involvement" programming. It requires little attention to know what is occurring and one can drop in and out of viewing the show and still feel engaged in the plot. On the other hand, "high involvement" programming requires more attentiveness to remain engaged in the on-screen plot. Losing focus causes the viewer to feel lost in what may have transpired on the screen. For these types of programs, less 2 screen viewing would seem to occur.

Would viewers want to engage with the TV program on their smartphone or tablet? I see a fit with those who want that water cooler social approach during the show. Others may simply want related content pertaining to on-screen action on their handheld device. For now, the second screen provides unrelated content to the TV screen, but still of interest to the user. For the moment, we are building a comfort level with a 2 screen viewing approach and I doubt that will ever diminish.

Nook Nabs Niche

Ok, not quite a niche, but the Barnes and Noble Color Nook seems to have caught the eye of the female demographic. Whether a purposeful strategic approach or not, the Nook seems to have drawn in a far larger skewing female audience. "On the surface, the reason for the strong performance of female-oriented publications on the Nook is relatively straightforward. Generically speaking, the iPad and other tablets are men's toys, while the Nook Color and other e-readers are more popular with women. According to data from Forrester Research, 56 percent of tablet owners are male, while 55 percent of e-reader owners are female." Is this because of a technological need or a content one?

Certainly, Barnes & Noble's marketing push has aimed squarely at the female audience to start. "And Barnes & Noble has marketed the $249 Nook Color toward females. Ads show women and girls reading it in various states of relaxation and repose: at the beach, in bed, on the couch." Executives at B&N have also been more collaborative with magazine publishers, with both the negotiation of the pricing model and with the actual production to get the print repurposed to digital. They recognized that content was needed to make the devices more valuable to its audience. More female magazines, more female readers, more female Nook purchasers.

It seems where the Apple iPad has excelled has been in mobile web application. But with printed content, the e-book readers have been excelling. Also too, Apple has been slower to approving subscription models for its iPad then the Nook or Kindle has been for their devices. Consequently, female readers have flocked to e-books to get book and magazine content in a digital form while male web users have flocked to the iPad. If we consider that all of these devices are still in their early acceptance stages, once content availability becomes ubiquitous across all devices, so should the percentages of male and female users also split evenly across all these same devices.

At that point, will consumers feel the need to own both devices or will the preference be to have tablets and e-readers start to look and work more like the other? For now, each is defining it's space and having a successful time doing it. And that may mean we own both a table and a e-book reader.