Look Who's Playing Both Sides Of Cord Cutting

It seems that the threat of cord cutting has gotten one distribution company to look at new ways to appeal to these cable cutters. Dish Network, a cable satellite company, owns Slingbox, a terrific technology that allows users to push their linear and on demand programming from their cable box to any pc or mobile device. They recently purchased Blockbuster, to offer consumers new choices for DVD rentals, both in store and streaming. And as the third leg of their stool, they seem to be the top bidder in a race to acquire Hulu, an online video streaming company. "Two sources tell us that satellite TV provider Dish was the highest bidder, coming in around $1.9 billion. It beat out both Amazon and Yahoo."

Will Dish pick up Hulu? It seems from looking at previous behavior, that it is consistent with a new strategy to own the distribution platform and content in multiple forms. With the Echostar parent company, one hopes that the right marketing synergies can be created to enhance the messaging and promote these various services. Dish trails DirecTv, Blockbuster trails Netflix, and a consistent second strategy may not be truly effective. It may be time to turn one of their brands into a true leader.

Perhaps it is too early to talk Dish - Hulu just yet. Others, like Google, may raise their bids. Ultimately, my questions with Hulu still remain unanswered. Will the current partners of Hulu still feel obligated to sell content to them after the sale, or will these networks provide cable distributors with more authenticated exclusivity in order to reduce the threat of cord cutting, something that Hulu seems to encourage. As partners, they were inclined to support with content; once unencumbered, they may not feel such an obligation. And that, to me is a real concern of the true long term value of Hulu.

The Rise Of The Tablet, More Context And More Connectivity

Apple's iPad has led the tablet revolution with others trying desperately to make inroads. From Samsung to Blackberry to the Nook, the table is becoming the must have device. And now Amazon will soon announce its own tablet.

The age of the tablet brings a whole new paradigm to the digital landscape. Hollywood is bracing for digital distribution, Netflix is pushing streaming, and print sees a new opportunity to recapture subscriptions and grow advertising. For The New York Times, digital subscription is growing as consumers are using their iPads at night to catch up on articles they missed earlier in the day. For them, it opens up a whole new viewing time that had died with the demise of the evening newspaper. The table rests in our kitchens, on our coffee tables and in our beds. And with this connectivity, the ads served can speak directly to the users interests and relevant to the time of day. Context and connection.

And as multiple devices talk to each other, the tablet with the smart phone, or perhaps with the big screen TV, data can be shared and connected. As other devices in the home get smarter, connectivity with a mobile device will only be enhanced. Our devices can talk to the refrigerator, HVAC and security system, and every other home appliance. And information can be shared among family members. We will be informed, entertained, and enlightened.

Is LightSquared More Politics Than Capitalism

Politics exists everywhere, not just in Government. Favors are done, cronyism is established, and greed sometimes gets in the way of honest work. So one has to wonder, is LightSquared truly an opportunity for a new player to help balance the power and increase competition in the wireless and broadband industry, or is there more than meets the eye.

From today's column in the NY Post, to this article in Multichannel, it seems that personal gain over mainstream interests could possibly be at stake.

Can LightSquared be a low cost alternative to the current players or will it be so only by interfering with current GPS signals? And if they can't fix the problem, are we being told a fairy tale? That politics is leading this process is the most troublesome. It reeks of greed and may benefit few over the many. Can LightSquared truly overcome the GPS issue or is it being fast tracked to help put money into political hands? I naively hope it is the former. I'd hate to see greed cause poor long term judgment.

Competition is a good thing. If not LightSquared, there are other ways to enhance competition in the broadband industry. Perhaps the Government can incent the utilities to build out their infrastructure to offer a broadband piece. Would the electric, gas, and water companies have an interest? Job creation, economic stimulus, and more choice.

Brother, Can You Spare A Volt, My Smartphone Needs A Charge

On a recent flight cross country, my wife was concerned that her phone and e-book reader were not charged and might not make it through the trip. Luckily, prior to departing, she found two outlets hidden near the water fountain to plug in and charge. The new charging stations, complete with 4 out lets were all being used. But it got me wondering, are we asking too much from our devices.

My smartphone's most essential function is for communication. But as I use my time on board the plane to watch a movie, play games, and yes even surf the web, I am concerned that I will not have enough power to make that call when I arrive at my destination. Do I need to offload my usage to a second device to relieve me of my concern that I will be with a dead phone? Do I need to carry a back-up?

As we ask our smart phones to do more, we risk that they will be completely drained of power before the day is out. Nice to add an e-wallet to my app library, but if I am without power, I am without money. Is my back up to continue to carry a real wallet?

The smartphone is a life-changing device; web, phone, gaming, time piece, wallet, and more at your fingertips! But we still need a quantum leap in the battery for these untethered devices. Not an extra 15 minutes of reserve charge, but perhaps an ever-renewing battery. Perhaps as simple as a self-winding watch. Until then, it's almost time to plug in again.

LightSquared To Solve Its GPS Issue And Bring Wireless Competition

LightSquared wants to bring new competition into the broadband space. The concern is that their wireless platform is on a frequency that competes with GPS devices. But they now think they have a solution. "LightSquared, which is building a nationwide 4G LTE wireless broadband network using spectrum that is adjacent to the spectrum GPS device makers use, said it has developed receivers with GPS device manufacturer Javad GNSS that will eliminate concerns that the GPS community has brought forth regarding how its service would interfere with precision GPS devices."

It could add another competitor into a not so crowded wireless world offering connectivity and content to mobile devices. Could this new broadband spectrum be used to compete with cable, encouraging cord cutting for IPTV? Could it be a less expensive alternative to Verizon and AT&T? "LightSquared is building its nationwide wireless broadband network to sell capacity to other service providers, as well as retailers looking to offer wireless broadband service. The company has already signed partnerships with companies, such as Leap Wireless and Best Buy." The possibilities are there. LightSquared has the potential to bring more competition into the broadband landscape.

UltraViolet Makes Appearance Thanks To The Smurfs

Is your DVD player UltraViolet compatible? Does knowing a DVD title includes UltraViolet appealing to you? Wait, you haven't heard of UltraViolet. Well then you are definitely not alone. "UltraViolet is a "digital locker" system designed by the Hollywood-led Digital Entertainment Content Ecosystem to let users access their movies and TV content through any UltraViolet-compatible service or device, such as PCs, tablets, cable set-tops and smartphones." Hopefully by the time that CES rolls around, UltraViolet will be the hot buzz word.

The release of new platforms always involves a careful balance of content. And seems to ask the age-old question of which comes first, the chicken or the egg. In this case, Sony's release of DVD titles, including The Smurfs, recognizes that consumers respond to content to run their machines. And while Sony is the first to release titles with UltraViolet authentication, other studios will follow.

Can it jumpstart the DVD industry or will it find more acceptance with consumers seeking content anywhere via their cable provider? And with Apple on the sidelines, what will its cloud-based competitor do differently? For consumers seeking to access content outside their home on their PC or mobile device, the cloud is bringing the library to us, without requiring us to download and save on a hard drive. Good news in a connected world.

Netflix Might Not Understand Physics

The only constant is change. In Physics, change is also a component of time. But in Nexflix case, strategic change seems to be forcing time to speed up. Understandably, Netflix sees its future in streaming media. It won fans and gained strength as a company because of its DVD rental model. And its fans appreciated that Netflix has embraced streaming to its distribution platform.

The big but is that they do not appreciate that pricing is going up at a level that sent a clear message: "Out with the old, in with the new." Netflix clearly wants to position themselves in the new media world. But the change that they are embracing seems to be on caffeine. They are speeding up the transition faster than the consumer cares for and that could hurt the new business. It is clear strategically what they are doing. Price the old DVD model to pay the high shipping costs and to push consumers to convert to the streaming model. Second, spin off the old DVD model into a separate business, now called Qwikster. A separate brand to not impact the core streaming brand of Netflix. And lastly, most likely within the next year or two, disband Qwikster and make it go away. A new name so that when it does fold (and my prediction it will fold soon), it is less associated with Netflix.

The challenge remains the speed in which Netflix wants to make this change. Hence the Physics angle. And so we must add another component, Force. The force of this change is negatively affecting consumer sentiment. Netflix is hoping that this negative reaction will dissipate, but what if it doesn't. The speed of force of change to the consumer may have long lasting effects and help the competition to rebound. If Blockbuster, Redbox, and others can break through this opening, Netflix could lose valuable business. And like Physics, result in a reaction.

Netflix Strategic Shift - Were The Results Expected

Netflix made a strategic move to shift from DVD mailings to a streaming model, but did they expect the backlash. By pricing the DVD/Streaming subscription package 60% higher, Netflix was in fact telling subscribers that the future was not mailing. At the same time, they cut the cost for subscribers who only took the streaming option by $2 a month. Clearly a pricing strategy designed to move customers toward streaming. But in the analysis, did they anticipate and account for those customers that would drop the service entirely?

"The Los Gatos, Calif., company now believes that its domestic streaming business will total 9.8 million customers versus its July 25 estimate of 10 million, while its DVD business would also be down from 3 million to 2.2 million." That amounts to a decrease of one million subscribers. A hard pill to swallow especially when content deals, like the one with Starz, have dried up. Content drives the model, and exclusivity of content helps to beat competition. And while Netflix is taking a hit, its competitors are trying to reap the benefits. With Redbox offering an inexpensive DVD model, along with Wallmart, Amazon, Apple, and yes, even cable VOD, competition is only getting fiercer.

Only Netflix can answer whether this customer hit was within their range of expectations. It is unlikely that Netflix will reverse their strategic position. The future for them and others is a streaming model. But now Netflix must go back into their planning stage to determine how best to win back those lost customers and how to grow as the leader in the space. Choices range from partnerships with retailers like Target or Barnes and Noble to offer a free month of streaming with purchase or even to take the partnership to a more corporate level. Content deals remain essential to success. Opportunities with Tribeca Film or other Festivals to share indie films with customers. And don't forget an ad model to further improve the revenue stream.

It is not the end of the world for Netflix, only a bump in the road. The future of rentals is streaming and Netflix has only pushed for faster change.

Retrans Rates Good For Broadcasters, Bad For Cable

On debate teams, you learned that there were 2 sides to an argument and one had to learn how to argue each position, both for and against. Helpful too for attorneys who need to anticipate the other side of the case in order to best clarify their position. Well Steve Burke, formerly on the Comcast side and now on the NBC broadcast side, finds himself arguing for retransmission fees when he once argued against them. "Comcast bosses Brian Roberts and Burke, according to sources, have made a calculation that they’re better off focusing on creating value on the content side of their business than on the cable side because valuations are much better for content businesses." What that seems to mean is that those increased fees for broadcast add to the revenue line and those higher fees charged to cable can be matched with equal increases to cable subscription prices. Good for the company and bad news for the consumer.

It works in Comcast's favor because they own both the content and distribution platform. A position that creates a very powerful vertical strategy in entertainment. Other cable companies, like Time Warner and Cabevision have recently split their two platforms into two separate public companies. And smaller cable operators have not been so lucky as to own a piece of content. Mediacom has long argued that retrans fees are not in the best interest of the consumer.

In the past broadcasters didn't ask for fees for their broadcast channels. Some chose the must-carry rule, others used broadcast as leverage to get new carriage of their cable networks. But now that these cable networks (specifically those owned by today's broadcasters - NBC, ABC, Fox, CBS, Univision) are carried everywhere, the next avenue of growth for broadcasters is fee based.

So Steve Burke and Comcast have come to grips with retrans consent; the consumer has not. The threat of cord cutting could cause customers to stop taking cable programming. They could get their broadcast channels without fee through a digital antenna and watch their programs via a broadband connection. An increase in fees passed on to consumers may only exacerbate the situation. That seems to be what Netflix is feeling right now.