According to Disney/ABC, "people watching television shows on video recorders sit through a similar number of commercials as those watching live." And their President of ABC Entertainment, Paul Lee, noted that the numbers watching are equivalent to those that watch the same shows live. Interesting perspective although I wonder if this is being said out of hope or reality. The article doesn't include statistics to back up his statement.
In my family, depending on who is watching DVR programming determines whether the fast forward button is pressed or not. For my wife and I, we are quick to retrieve the remote to skip ahead to the content. It seems with less time available to relax and watch TV, those precious minutes shouldn't be wasted on commercials. But with my kids, it is a different story. Once the show is selected to be watched through the DVR, the remote goes untouched. Commercials don't bother them; in fact, it is how they gain new wants. "As seen on TV" equates to I want that.
Perhaps too, it is laziest that most determines whether the DVR commercials get skipped or not. While they might not reach over to the coffee table to press the button, they will scream for a parent to do the "chore" for them. And so it goes untouched and the commercials play on.
And so I will surmise that for advertisers on kid oriented programming, your commercials are more likely viewed than for adult viewership. But as TVs become more web connected and voice control will bypass the remote, we may see more of us raising our voices to the TV to say "Siri, skip ahead past commercials."
Wednesday, January 11, 2012
Tuesday, January 10, 2012
Nook Competing With A Pricing Strategy
The marketing strategy of business works predominantly on two different scenarios, product differentiation or price differentiation. In the tablet and e-reader space, Barnes and Noble is employing the low price strategy to compete with Amazon and others. Their latest announcement, following on the heels of the idea to split the businesses, is to discount the price of the Nook; "the bookstore chain is offering discounted or free Nooks to those who purchase one-year subscriptions to the Nook editions of People or the New York Times. It’s the first time a major retailer has offered an e-reader free with a content subscription." Their Nook Tablet promotion offers a cash discount.
For those who are price sensitive, such a marketing move will draw consumer interest. And partnering with content is not such a bad idea. This particular promotion runs about two months so it will be noteworthy to measure the effect on sales for both partners. At the same time, pricing discounts are easily matched by competition until they become lose-lose for both.
I also wonder what happens to these new customers, especially the ones receiving free e-readers with their NYT subscription. Does B&N have a strategy in place to push additional product purchase by these consumers? Or is it naturally assumed that they will become enlightened consumers once they pick up their first Nook.
It also seems to me that with the push toward more tablets, the e-reader as a product may quickly become obsolete. The tablet offers more versatility and gives the digital reader more choices, including access to video stories connected to the written materials. Perhaps B&N recognizes that as well and sees this promotion as a means to unload inventory as it readies for its next generation of Nook Tablet.
For those who are price sensitive, such a marketing move will draw consumer interest. And partnering with content is not such a bad idea. This particular promotion runs about two months so it will be noteworthy to measure the effect on sales for both partners. At the same time, pricing discounts are easily matched by competition until they become lose-lose for both.
I also wonder what happens to these new customers, especially the ones receiving free e-readers with their NYT subscription. Does B&N have a strategy in place to push additional product purchase by these consumers? Or is it naturally assumed that they will become enlightened consumers once they pick up their first Nook.
It also seems to me that with the push toward more tablets, the e-reader as a product may quickly become obsolete. The tablet offers more versatility and gives the digital reader more choices, including access to video stories connected to the written materials. Perhaps B&N recognizes that as well and sees this promotion as a means to unload inventory as it readies for its next generation of Nook Tablet.
Monday, January 9, 2012
What The F@#%&*$ Is Happening At the Supreme Court Regarding Obscenity on TV
The line between obscene and acceptable behavior on television continues to get fuzzier with different rules applying to broadcast and cable programming. Yet technology has made both best available via a cable or satellite signal as opposed to an antenna, so why should the rules be different? Whether it is swear words, body parts, or even blatant euphemisms, some activities go unnoticed while others get fined. Some even mouth the words even though there is no sound to hear. It seems silly to fine such behavior when the rules are not consistent.
Unfortunately the days pictured in "The Dick Van Dyke Show" when couple slept in two twin beds is over. "South Park" and Comedy Central Roasts may bleep some words, but they are not fooling anyone who watches, including my 11 and 9 year olds. Would it make it funnier if these words were not bleeped; definitely not. It might make it funnier if these words weren't even used, but that is a subject for later. Regarding language, sometime curse words are necessary and sometimes they are a crutch to try to make an unfunny line funnier.
Language aside, nudity is another issue that causes great grief among families. Are cartoon butts any different from real ones, does a breast shown on a Super Bowl halftime show such a big deal. Like language, is the nudity with purpose or a crutch to draw ratings at the expense of quality? And does Freedom of Speech cover both language and nudity on broadcast TV.
No doubt, I am not in favor of fines or punishment. Cable has already done its part to relax those rules and to enable language and nudity to enter the TV screen. An end of these rules may push broadcasters to be more open in what they allow. At the same time, shouldn't the public have the freedom to decide whether it is what they want to view or not. The right to boycott a show or its advertisers should be just as present as the right to allow so-called obscene behavior on TV. With free will, one can only hope that it is used prudently with the most important piece being the quality of what is being put on the TV for viewers to watch.
Unfortunately the days pictured in "The Dick Van Dyke Show" when couple slept in two twin beds is over. "South Park" and Comedy Central Roasts may bleep some words, but they are not fooling anyone who watches, including my 11 and 9 year olds. Would it make it funnier if these words were not bleeped; definitely not. It might make it funnier if these words weren't even used, but that is a subject for later. Regarding language, sometime curse words are necessary and sometimes they are a crutch to try to make an unfunny line funnier.
Language aside, nudity is another issue that causes great grief among families. Are cartoon butts any different from real ones, does a breast shown on a Super Bowl halftime show such a big deal. Like language, is the nudity with purpose or a crutch to draw ratings at the expense of quality? And does Freedom of Speech cover both language and nudity on broadcast TV.
No doubt, I am not in favor of fines or punishment. Cable has already done its part to relax those rules and to enable language and nudity to enter the TV screen. An end of these rules may push broadcasters to be more open in what they allow. At the same time, shouldn't the public have the freedom to decide whether it is what they want to view or not. The right to boycott a show or its advertisers should be just as present as the right to allow so-called obscene behavior on TV. With free will, one can only hope that it is used prudently with the most important piece being the quality of what is being put on the TV for viewers to watch.
Friday, January 6, 2012
Is John Malone Responsible for B&N Desire To Split?
John Malone has been a master at building shareholder value for his companies. He acquires, he invests, and he splits his companies into separate stocks each producing value for its shareholders. It is what he has successfully done with Liberty Media, but his role as a shareholder of Barnes and Noble, may not do well by this strategy.
Like Netflix, B&N watched its share price drop significantly on the news of a possible split of digital and store. Certainly the remainder of the financial report did not help but as they say in the market, much of that was already priced in; it is the future that pushes a price's direction. B&N might have learned from the Netflix fiasco what not to do; unfortunately, it looks like history repeating itself.
I simply wonder if these two businesses, Nook and bookstore, have two separate P&L businesses, each competing with the other. As the Steve Job's book brilliantly articulated, Steve made everyone accountable for the whole business. The rise of the iPhone would hurt the iPod business, but rather than take a conventional business strategy to work independently, Apple worked together to move the iPhone forward despite a negative hit on the other business. If you also consider the DVD/streaming business, film distributors have been pressed to keep the DVD alive. These distributors had different teams with different P&Ls so the concern for lost DVD business actually slowed then down in releasing films on a new streaming platform. It is when the streaming and DVD businesses were combined that they could embrace the new world despite the fear in the old one.
Barnes & Noble faces the same challenge and separating the business will only quicken the death of the bookstore and not propel the Nook forward any faster. Working together as one unit is the key. One example would be to embrace the B&N reward card with the Nook. Currently the membership does not support Nook book purchases, only physical books. Why? It's affect for this family was to simply not renew our membership fee. And I am confident there are more marketing moves that B&N can undertake to improve and build a successful relationship between Nook and store.
Breaking up the B&N business is not the cure. It is in better operational and marketing strategies that embrace the synergies of the products and services they offer and the consumers that use them. I can only hope that wiser heads prevail.
Like Netflix, B&N watched its share price drop significantly on the news of a possible split of digital and store. Certainly the remainder of the financial report did not help but as they say in the market, much of that was already priced in; it is the future that pushes a price's direction. B&N might have learned from the Netflix fiasco what not to do; unfortunately, it looks like history repeating itself.
I simply wonder if these two businesses, Nook and bookstore, have two separate P&L businesses, each competing with the other. As the Steve Job's book brilliantly articulated, Steve made everyone accountable for the whole business. The rise of the iPhone would hurt the iPod business, but rather than take a conventional business strategy to work independently, Apple worked together to move the iPhone forward despite a negative hit on the other business. If you also consider the DVD/streaming business, film distributors have been pressed to keep the DVD alive. These distributors had different teams with different P&Ls so the concern for lost DVD business actually slowed then down in releasing films on a new streaming platform. It is when the streaming and DVD businesses were combined that they could embrace the new world despite the fear in the old one.
Barnes & Noble faces the same challenge and separating the business will only quicken the death of the bookstore and not propel the Nook forward any faster. Working together as one unit is the key. One example would be to embrace the B&N reward card with the Nook. Currently the membership does not support Nook book purchases, only physical books. Why? It's affect for this family was to simply not renew our membership fee. And I am confident there are more marketing moves that B&N can undertake to improve and build a successful relationship between Nook and store.
Breaking up the B&N business is not the cure. It is in better operational and marketing strategies that embrace the synergies of the products and services they offer and the consumers that use them. I can only hope that wiser heads prevail.
Occupy Broadband
How's this for a headline, "Top 1% of Mobile Users Consume Half of World’s Bandwidth, and Gap Is Growing". So where are the protesters, the sit ins, the marches? The top 1% are taking more than their fair share and it will only get worse. Yet it is a story that doesn't seem to bother anyone.
Broadband seems to be like a natural resource, although one that will surely slow down get slower to use unless more capacity is found. And the demand will surely grow fast as more smartphones, tablets, and laptops hit the market, not to mention a greater reliance on cloud computing. Is it more capacity or perhaps a more efficient way to download so as to lessen the burden on the stream? Perhaps a combination of both.
"The world’s congested mobile airwaves are being divided in a lopsided manner, with 1 percent of consumers generating half of all traffic. The top 10 percent of users, meanwhile, are consuming 90 percent of wireless bandwidth." And it is not simply a USA issue, technology is worldwide and consumption across all continents continue to grow. Isn't Apple beginning to sell its iPhone into China.
Another recent article spoke about web access as almost a natural right, like food, shelter, and clothing. It recognized that the greater issue was the right to free speech and communication and limitations to that right in countries that regulate the web is like a barrier to freedom. Access to all is driving businesses today and the pipeline will only get more congested. As the other 99% adapt toward a broadband world, perhaps the gap will shrink, but the congestion will surely grow.
Broadband seems to be like a natural resource, although one that will surely slow down get slower to use unless more capacity is found. And the demand will surely grow fast as more smartphones, tablets, and laptops hit the market, not to mention a greater reliance on cloud computing. Is it more capacity or perhaps a more efficient way to download so as to lessen the burden on the stream? Perhaps a combination of both.
"The world’s congested mobile airwaves are being divided in a lopsided manner, with 1 percent of consumers generating half of all traffic. The top 10 percent of users, meanwhile, are consuming 90 percent of wireless bandwidth." And it is not simply a USA issue, technology is worldwide and consumption across all continents continue to grow. Isn't Apple beginning to sell its iPhone into China.
Another recent article spoke about web access as almost a natural right, like food, shelter, and clothing. It recognized that the greater issue was the right to free speech and communication and limitations to that right in countries that regulate the web is like a barrier to freedom. Access to all is driving businesses today and the pipeline will only get more congested. As the other 99% adapt toward a broadband world, perhaps the gap will shrink, but the congestion will surely grow.
Thursday, January 5, 2012
Hopefully NOT True, B&N To Split Off Nook Business
Here's a story that makes me give pause and hope that it is not accurate. Per the MSNBC site, Barnes and Noble plans to split off its Nook digital business from its retail business. I am dumbfounded and find this strategy a sure sign of the collapse of the B&N book business. I can only point them at the fiasco generated when Netflix announced its plan to separate its streaming business from its DVD business. Was no business lesson learned.
The Nook is a wonderful product for the digital age and the B&N bookstores are, like the DVD, a declining business. But there is tremendous synergy and sticking together longer. Like Apple, the store provide both a distribution and service platform that set it apart from its other rival, Amazon. The stores offer tremendous opportunities to adapt its retail business by expanding its merchandising with other goods. And the stores enable more marketing opportunities to futher the Noook brand. A separation of the two businesses does neither side any goog.
So hopefully smarter heads prevail; otherwise, such a split will lead to the loss of a great bookstore chain and a collapse of the Nook business as well. And that would be a great shame.
The Nook is a wonderful product for the digital age and the B&N bookstores are, like the DVD, a declining business. But there is tremendous synergy and sticking together longer. Like Apple, the store provide both a distribution and service platform that set it apart from its other rival, Amazon. The stores offer tremendous opportunities to adapt its retail business by expanding its merchandising with other goods. And the stores enable more marketing opportunities to futher the Noook brand. A separation of the two businesses does neither side any goog.
So hopefully smarter heads prevail; otherwise, such a split will lead to the loss of a great bookstore chain and a collapse of the Nook business as well. And that would be a great shame.
Consumers Still Using Netflix
Despite some of the biggest missteps in management, Netflix continues to push forward. Whether it will recapture the consumers it hurt remains to be seen, but the ones that have stayed with Netflix continue to use the service. "Netflix would now be the 15th most-watched TV 'network' in the U.S. and could be the second most-watched in Netflix homes, BTIG analyst Richard Greenfield wrote in a blog post Wednesday." That equates to a ton of hours being watched on connected devices. And higher in viewing hours than a number of channels.
It seems that current Netflix users still love the service. Still Netflix has a ton of work to do to re-engage its lost subscriber and try to bring them back to the fold. Streaming is the future for media and Netflix is pushing forward with original content to fill the demand.
At the same time, cable operators are becoming more competitive in this space. Comcast just announced its new long term deal with ABC/Disney to assure that the content it produces is available to Comcast subscribers on all devices including TV, computer, tablet, and smartphone. The concept of TV Everywhere paints Comcast as an aggregator of content delivering authenticated content to its subscribers, linear and on demand, whenever and wherever they want it.
The Netflix numbers are a sure sign that they are still in it for the long run and intend to keep pushing their streaming strategy.
It seems that current Netflix users still love the service. Still Netflix has a ton of work to do to re-engage its lost subscriber and try to bring them back to the fold. Streaming is the future for media and Netflix is pushing forward with original content to fill the demand.
At the same time, cable operators are becoming more competitive in this space. Comcast just announced its new long term deal with ABC/Disney to assure that the content it produces is available to Comcast subscribers on all devices including TV, computer, tablet, and smartphone. The concept of TV Everywhere paints Comcast as an aggregator of content delivering authenticated content to its subscribers, linear and on demand, whenever and wherever they want it.
The Netflix numbers are a sure sign that they are still in it for the long run and intend to keep pushing their streaming strategy.
Wednesday, January 4, 2012
Tivo Wins Again
After a very protracted fight, Dish finally succumbed to the law and paid TiVo for its DVR technology. Next up, AT&T, decided it was better to pay up rather than fight and is paying 215 million dollars to settle. "TiVo sued AT&T and Verizon in August 2009 alleging infringement of the Time Warp patent"; so the next question must be, what will Verizon do? Will they fight like Dish paying lawyer fees that will only raise their cost of doing business or will they rollover like AT&T and pay out a sum in order to settle. Clearly, TiVo appears to be the likely winner in that next match. TiVo also has pending litigation against Microsoft and Motorola Mobility, two more companies that must also be looking at the writing on the wall.
Of course, any time TiVo comes up in the news, speculation grows whether they may be a possible takeover target. With deals in place with a number of cable and satellite companies, TiVo has the potential to grow even larger. The timing has never seemed better.
Of course, any time TiVo comes up in the news, speculation grows whether they may be a possible takeover target. With deals in place with a number of cable and satellite companies, TiVo has the potential to grow even larger. The timing has never seemed better.
Tuesday, January 3, 2012
I Know Why Movie Attendance And Revenue Are Down
With 2011 coming to a close, the latest movie industry report declares that attendance was down 4.2% and US revenue was down 3.4%. And from the Bloomberg article comes the reason for this downturn, "'It’s the movies themselves, it’s the economy and it’s all the competing technology,' said Paul Dergarabedian, president of the box-office division of Hollywood.com." So my question is, are these the real reasons for the downturn or is something else at play. Let's dive deeper.
1. It's the movies - we didn't have an Avatar this year, but we did have a Harry Potter and Mission Impossible. Were there less movies distributed in 2011 or more bad movies? Regardless, people like to be entertained and the movies are a release from reality. And yes, even bad movies get watched. Perhaps people don't care as much for 3D, but a number still attend 3D movies and pay more for that right. So I don't believe the drop in numbers is about the movies themselves.
2. It's the economy - the cause for every problem these days. But in the early days of movies, a bad economy and job loss was a reason people went to the movies. It was an inexpensive way to escape our problems, even if it was just for a couple hours. So why is the economy the culprit now? There is more here then meets the eye.
3. It's competing technology - blame on-demand, blame the internet, and you may be right. It is less expensive to watch a movie this way then at the theater. And with new releases hitting the smaller screen just 3 to 6 months after its initial release, the wait to watch is not so long. It is a reason for shifting viewership, but it also represents money back in the distributors' hands, simply through another window. But it shouldn't be blamed for lowering theater attendance. People like to escape their homes too and the movie theater offers the bigger screen, better sound, and especially that key word, "escape". Sure some indie films are direct to TV, but they are not the cause for lost theater attendance.
So why is attendance and revenue down? Perhaps, the cause is price elasticity of ticket prices. The cost for a family of four at the movies for tickets alone nears $40. In the cities, it is even higher. Could a rollback of 50% in price of a ticket encourage an increase in attendance? Perhaps a marketing test is in order. I believe that the price of tickets are too high, especially when you consider the other revenue that theater owners are gaining.
When ticket prices were lower, there was also no advertising on the screen. Today we pay a ton more to sit and watch multiple commercials. Is this revenue being separated from the revenue theater owners are receiving from receipts. Perhaps the bigger picture shows that theater owners are actually seeing total revenue growing. It's a true number I would like to see. By lowering ticket prices, attendance should rise significantly and advertisers will likely pay more for more eyeballs. A win-win scenario.
Lastly, one can not blame what you can't control. Technology is here and will continue to improve the home screen experience. But more can be done at the movie theater to keep customers coming in for more. How about more IMAX screens for popular movies. A 3D experience without glasses, and lastly the rise of the 4D experience with vibrating seats and other special effects in the auditoriium to make the movie watching experience more immersive. And make the theater a destination with more retail opportunity to buy items featured in films. As kids leave a movie, they are going to want to buy a Harry Potter wand or an Alvin plush doll or even a Mission Impossible poster. It is an opportunity that seems to be largely ignored.
It's easy to blame the movies themselves, the economy, and the technology; but the solution for theater owners is in your grasp. Don't blame, lead the change.
1. It's the movies - we didn't have an Avatar this year, but we did have a Harry Potter and Mission Impossible. Were there less movies distributed in 2011 or more bad movies? Regardless, people like to be entertained and the movies are a release from reality. And yes, even bad movies get watched. Perhaps people don't care as much for 3D, but a number still attend 3D movies and pay more for that right. So I don't believe the drop in numbers is about the movies themselves.
2. It's the economy - the cause for every problem these days. But in the early days of movies, a bad economy and job loss was a reason people went to the movies. It was an inexpensive way to escape our problems, even if it was just for a couple hours. So why is the economy the culprit now? There is more here then meets the eye.
3. It's competing technology - blame on-demand, blame the internet, and you may be right. It is less expensive to watch a movie this way then at the theater. And with new releases hitting the smaller screen just 3 to 6 months after its initial release, the wait to watch is not so long. It is a reason for shifting viewership, but it also represents money back in the distributors' hands, simply through another window. But it shouldn't be blamed for lowering theater attendance. People like to escape their homes too and the movie theater offers the bigger screen, better sound, and especially that key word, "escape". Sure some indie films are direct to TV, but they are not the cause for lost theater attendance.
So why is attendance and revenue down? Perhaps, the cause is price elasticity of ticket prices. The cost for a family of four at the movies for tickets alone nears $40. In the cities, it is even higher. Could a rollback of 50% in price of a ticket encourage an increase in attendance? Perhaps a marketing test is in order. I believe that the price of tickets are too high, especially when you consider the other revenue that theater owners are gaining.
When ticket prices were lower, there was also no advertising on the screen. Today we pay a ton more to sit and watch multiple commercials. Is this revenue being separated from the revenue theater owners are receiving from receipts. Perhaps the bigger picture shows that theater owners are actually seeing total revenue growing. It's a true number I would like to see. By lowering ticket prices, attendance should rise significantly and advertisers will likely pay more for more eyeballs. A win-win scenario.
Lastly, one can not blame what you can't control. Technology is here and will continue to improve the home screen experience. But more can be done at the movie theater to keep customers coming in for more. How about more IMAX screens for popular movies. A 3D experience without glasses, and lastly the rise of the 4D experience with vibrating seats and other special effects in the auditoriium to make the movie watching experience more immersive. And make the theater a destination with more retail opportunity to buy items featured in films. As kids leave a movie, they are going to want to buy a Harry Potter wand or an Alvin plush doll or even a Mission Impossible poster. It is an opportunity that seems to be largely ignored.
It's easy to blame the movies themselves, the economy, and the technology; but the solution for theater owners is in your grasp. Don't blame, lead the change.
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