Content is King in this entertainment world. Smart content creators that recognize the mantra to "follow the customer" have recognized that they are being led to digital media. What you watch, where you watch, when you watch, and on what device you watch. And it is these content creators that are finding success as distribution platforms attract audiences. Thos that do are rewarded; those that don't only see their revenue decline.
So it is valuable to note that the financial news from Time Warner, Fox, and Viacom indicate growing deals with new media providers. Yes to traditional distribution outlets, and yes also to deals with Netflix, Amazon, Hulu, Apple, and others. DVD profitsmay be suffering but streaming is advancing. Customers are buying subscriptions and seeking content for their tablets, smartphones and laptops, as well as their TVs. They are still purchasing and consuming content; it is simply in new forms.
The latest deal, with Viacom and Amazon, offers Amazon Prime subscribers "access to TV shows from MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo". The more content being offered, the more value perceived, the more desire to subscribe, and hopefully more satisfaction. How exclusive this deal is and how it affects Netflix, Hulu and others remains to be seen. Still, Viacom is not the only content company and opportunities still exist to make content deals.
And this new intersection of content and distribution offers new revenue opportunities to draw from. Most importantly, it is necessary to not view these new platforms as a zero sum game. The TV experience will not go away and customers will work best with those distributors that offer them the content they want on the screen(s) they want. The only thing that will kill it is pricing access at a point where viewers move to the next best value proposition.
Thursday, February 9, 2012
Wednesday, February 8, 2012
MSG Drop On Time Warner Cable Not An Issue
Despite not carrying the MSG Network since January 1, Time Warner Cable seems content with not pursuing a renewal agreement. With a shortened NBA season and teams that aren't as competitive as in previous years, the effect on subscription may just be negligible. And to demonstrate just how low a concern this seems to be, "MSG Media president Mike Bair told analysts Wednesday, adding that no meaningful discussions have occurred between the parties since the network went dark on TWC systems in New York on Jan. 1." Once TWC dropped MSG it was simply time to move on to other deals. Will negotiations ever ramp up; it may not be an issue once the basketball and hockey season ends in a few months.
Tuesday, February 7, 2012
Another News Channel Competing For Attention
Move over CNN, Fox, Bloomberg and MSNBC; watch out online, another news operation may be forming. With the Hispanic population growing, and third generation Hispanics speaking more English while staying in touch with their Hispanic routes, a new need may have been uncovered. ABC and Univision are talking about combining their news operations to create an English language cable news channel with a Latin attitude.
"The new channel would tap into the growing population of English-speaking Hispanic viewers, a source noted. That demographic has been fueling ratings for Univision and rival Telemundo in recent years." Brilliant! Will cable operators pay a fee? With the need to capture this segment of population, offering this channel seems a no-brainer.
"The new channel would tap into the growing population of English-speaking Hispanic viewers, a source noted. That demographic has been fueling ratings for Univision and rival Telemundo in recent years." Brilliant! Will cable operators pay a fee? With the need to capture this segment of population, offering this channel seems a no-brainer.
Monday, February 6, 2012
Amazon Adding a Retail Business
As Barnes and Noble tries to fight Amazon in the digital hallways, Amazon is fighting back by competing head on with a brick and mortar retail presence. "Quidsi, an online retailer Amazon acquired in 2010, opened its first retail store in Manhasset, New York, last year to sell expensive cosmetics and perfumes under the BeautyBar name.
Amazon also plans to open a physical store in its home town of Seattle in coming months to showcase and sell its growing line of gadgets, including the Kindle Fire tablet, industry blog Good E-Reader reported this weekend."
Despite the e-commerce push, retail still seems to matter and Amazon recognizes that stores count. B&N has a great physical presence, one that will take Amazon years to emulate; at the same time, B&N has to figure out how to evolve it into the next winning formula. It is what JC Penny is doing by taking Apple's retail guru to update its stores. B&N must do the same as well. Amazon recognizes that retail is a component of success.
Amazon also plans to open a physical store in its home town of Seattle in coming months to showcase and sell its growing line of gadgets, including the Kindle Fire tablet, industry blog Good E-Reader reported this weekend."
Despite the e-commerce push, retail still seems to matter and Amazon recognizes that stores count. B&N has a great physical presence, one that will take Amazon years to emulate; at the same time, B&N has to figure out how to evolve it into the next winning formula. It is what JC Penny is doing by taking Apple's retail guru to update its stores. B&N must do the same as well. Amazon recognizes that retail is a component of success.
Friday, February 3, 2012
Still No Knicks/Rangers For Time Warner Cable Customers
Tom Brady announces that he watched last year's Super Bowl from an illegal website and Time Warner Cable customers may be needing these sites with their MSG Network cut off their air for over a month. So in wanting to watch their beloved Knicks or Rangers, they most likely are also watching through these sites as well. Well I guess it has gotten a little tougher. "Investigators seized 16 sites and brought criminal charges against a Michigan man who controlled nine of them."
As the TWC and MSG dispute continues, no NY doubt sport fans are seeking alternatives like these websites to watch their games. And as these sites are stopped, will others simply pop up and take their place.
As the TWC and MSG dispute continues, no NY doubt sport fans are seeking alternatives like these websites to watch their games. And as these sites are stopped, will others simply pop up and take their place.
The Cost Of Streaming
Let's face it, we are becoming data hogs. With our tablets, e-readers, smartphones and laptops, we are consuming more and more data. Cell phone companies want to charge us more for our exceeding our monthly use and broadband companies would like to charge us like a utility. The buffet may soon end as our streaming habits grow and each piece of content requires more data in it. This is especially true with video and the move toward streaming HD content.
There are a number of solutions. We could reduce our usage although that seems unlikely, especially as more connected devices are being manufactured and bought. The cell companies want us to use WIFI as much as possible to avoid their caps and usage bills. A short term fix but eventually even free WIFI may one day come to an end. Or rely on more innovation to make our streaming and downloading less bulky and more efficient.
Netflix is doing just that and I wouldn't be surprised to see more companies join in. "The movie and TV show streaming company is the first client of Palo Alto-based start-up eyeIO, a maker of a video encoding system it claims reduces the bandwidth needs of Netflix streams by more than 50 percent without sacrificing picture and sound quality." That is a significant improvement for the moment but in a few short years, as users and usage doubles, a quantum leap must occur to vastly improve streaming efficiency. For the moment eyeIO seems the company to bet on for a better streaming experience and lower broadband costs.
There are a number of solutions. We could reduce our usage although that seems unlikely, especially as more connected devices are being manufactured and bought. The cell companies want us to use WIFI as much as possible to avoid their caps and usage bills. A short term fix but eventually even free WIFI may one day come to an end. Or rely on more innovation to make our streaming and downloading less bulky and more efficient.
Netflix is doing just that and I wouldn't be surprised to see more companies join in. "The movie and TV show streaming company is the first client of Palo Alto-based start-up eyeIO, a maker of a video encoding system it claims reduces the bandwidth needs of Netflix streams by more than 50 percent without sacrificing picture and sound quality." That is a significant improvement for the moment but in a few short years, as users and usage doubles, a quantum leap must occur to vastly improve streaming efficiency. For the moment eyeIO seems the company to bet on for a better streaming experience and lower broadband costs.
Thursday, February 2, 2012
Facebook IPO - A Stock To Buy?
Investors seem to be going gaga over the initial public offering of Facebook (FB). While institutional investors and will be first to buy, should the average investor get in early or wait for the early hype to die down? And ultimately will Facebook become the next Google or Apple in terms of rising stock value or a dud like My Space became for News Corp? The one thing for certain, on paper, Mark Zuckerberg will become a very rich man.
"Facebook mostly depends on display advertising, which amounted to $3.154 billion in revenue during 2011. However, revenue from sources other than ads have grown from 10 percent a year ago to 17 percent today. The documents also reveal that Facebook is highly dependent upon its partnership with Zynga. Zynga accounted for about 12 percent of Facebook’s revenues in 2011, as the leading third-party developer also generates a large number of pages that the social network displays advertising on, according to the filing."
Has Facebook overcome the hurdle and moved from fad to necessity? The numbers indicate that users still frequently visit their FB page as well as use it as a portal to online games. But what if Zynga no longer wants to play in the sandbox with FB? Or we become more reliant on our other iPhone apps for casual gaming and bypass FB. Or will the continual changes on the FB screen or issues with personal security finally turn us away from FB. We are a fickle bunch that could drop FB for the next big thing. Is FB here to stay?
That is the risk of the stock market, forecasting the future of a company based on present information. For those that believe that Facebook has more room to conquer and new revenue opportunities to expand on, the stock price will continue to reflect a positive direction. But if one expects that the lower barrier to entry into the digital world means that it is easier to compete in the social and gaming media space, and that consumers can switch their loyalty in a heartbeat, then a FB investment may not be as profitable as other investments.
"Facebook mostly depends on display advertising, which amounted to $3.154 billion in revenue during 2011. However, revenue from sources other than ads have grown from 10 percent a year ago to 17 percent today. The documents also reveal that Facebook is highly dependent upon its partnership with Zynga. Zynga accounted for about 12 percent of Facebook’s revenues in 2011, as the leading third-party developer also generates a large number of pages that the social network displays advertising on, according to the filing."
Has Facebook overcome the hurdle and moved from fad to necessity? The numbers indicate that users still frequently visit their FB page as well as use it as a portal to online games. But what if Zynga no longer wants to play in the sandbox with FB? Or we become more reliant on our other iPhone apps for casual gaming and bypass FB. Or will the continual changes on the FB screen or issues with personal security finally turn us away from FB. We are a fickle bunch that could drop FB for the next big thing. Is FB here to stay?
That is the risk of the stock market, forecasting the future of a company based on present information. For those that believe that Facebook has more room to conquer and new revenue opportunities to expand on, the stock price will continue to reflect a positive direction. But if one expects that the lower barrier to entry into the digital world means that it is easier to compete in the social and gaming media space, and that consumers can switch their loyalty in a heartbeat, then a FB investment may not be as profitable as other investments.
Wednesday, February 1, 2012
Could A Broadband MSO Replace A Cable MSO?
A terrific read in Light Cable Reading of the rise of Virtual MSOs. If the definition of an MSO is one that aggregates and bundles licensed content and then resells to subscribers, then we may not find one that will offer the same abundance of content as cable. Most of the best networks license their content based on volume and the costs to get these providers to deliver the same content at rates being offered for MSOs the size of Time Warner or Comcast is quite unlikely. The rate per sub for reaching 10 million customers is far less than the rate per sub to a smaller MSO with say 1 million customers.
But the world of the virtual MSO aggregating content via the broadband platform may not need to duplicate cables' lineup. Rather, it simply needs to enable the connection. Xbox, Boxee, Tivo, and other OTT devices already use broadband to watch content from YouTube, Netflix, Hulu, and other streams. In essence, a "virtual MSO". TV manufacturers are doing the same to create a "connected" TV. And Boxee is enabling their box to bring digital broadcast signals to the TV set. Between these channels and streaming web programming, an alternative aggregator has been enabled already.
Still, if it is about duplicating the cable programming line-up, the costs must be absorbed until the "virtual MSO" gets up to a significant number of active subscribers. Perhaps the NCTC (National Cable TV Cooperative) would be willing to take one of these new entrants into their group. "There's seemingly no shortage of candidates that have the scratch, and perhaps the will, to give it a go. Not Microsoft (see above), but maybe Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) or Amazon." The one concern for a customer switching to a "Virtual MSO", they still have to pay their current broadband/cable provider for their broadband service. And no doubt that broadband cost would rise should they drop their cable service.
But the world of the virtual MSO aggregating content via the broadband platform may not need to duplicate cables' lineup. Rather, it simply needs to enable the connection. Xbox, Boxee, Tivo, and other OTT devices already use broadband to watch content from YouTube, Netflix, Hulu, and other streams. In essence, a "virtual MSO". TV manufacturers are doing the same to create a "connected" TV. And Boxee is enabling their box to bring digital broadcast signals to the TV set. Between these channels and streaming web programming, an alternative aggregator has been enabled already.
Still, if it is about duplicating the cable programming line-up, the costs must be absorbed until the "virtual MSO" gets up to a significant number of active subscribers. Perhaps the NCTC (National Cable TV Cooperative) would be willing to take one of these new entrants into their group. "There's seemingly no shortage of candidates that have the scratch, and perhaps the will, to give it a go. Not Microsoft (see above), but maybe Apple Inc. (Nasdaq: AAPL), Google (Nasdaq: GOOG) or Amazon." The one concern for a customer switching to a "Virtual MSO", they still have to pay their current broadband/cable provider for their broadband service. And no doubt that broadband cost would rise should they drop their cable service.
Cellular Verse WIFI, The Heart Of The Issue
What a great editorial in today's Wall Street Journal called The Wireless Equivalent of Fracking. In a wonderful analogy to the fracking process to release more natural gas, he offers a wireless comparison. "The mobile equivalent of fracking is Wi-Fi. Wi-Fi is free, unregulated spectrum, separate from the regulated spectrum that mobile operators buy from the government." And the most serious question he asked, why did the government need to block a cellular merger when access to WIFI is cheaper and becoming more abundant.
Web streaming is growing more steadily. Larger data files are being downloaded. Cellular monthly bills attempt to charge more for exceeding caps on usage. And these same companies remind us to use our WIFI often so as to not exceed their own caps. But be careful what you push; as WIFI becomes more prevalent and easier to stay constantly connected, consumers might just drop their cellular companies and communicate solely via WIFI. Hello Skype, goodbye AT&T cellular service.
Need a connection, sit down at your Starbucks. Waiting at the train station, chat through a Comcast or Time Warner Cable WIFI connection. In fact, a great added value for broadband cable customers to access the web away from their home. As more free wireless hot spots pop up, the need to be on 3G or 4G diminishes. Such a relief to listen to Pandora or watch a movie on Netflix without running up a cellular usage bill.
"Cellular operators offer the highest-cost path to the Internet; customers have both motive and opportunity to shift demand to other paths. The operators themselves have not been slow to figure this out. AT&T, the nation's second-biggest cell carrier, is also its biggest operator of Wi-Fi hot spots because it's a cheaper way to meet the data demand of its iPhone customers." So why worry that AT&T wants to buy T-Mobile? The cellular industry, like the cable industry, an oligopoly with fewer and fewer companies. But technological changes have meant that the cellular industry now has new competition from cable, and perhaps soon, Lightsquared. Rather than stopping the merger, the government should be working with other industries to encourage more investment in wireless alternatives. Cellular vs. WIFI, as costs for cellular usage rises, consumers continue to embrace their cheaper WIFI hot spots.
Web streaming is growing more steadily. Larger data files are being downloaded. Cellular monthly bills attempt to charge more for exceeding caps on usage. And these same companies remind us to use our WIFI often so as to not exceed their own caps. But be careful what you push; as WIFI becomes more prevalent and easier to stay constantly connected, consumers might just drop their cellular companies and communicate solely via WIFI. Hello Skype, goodbye AT&T cellular service.
Need a connection, sit down at your Starbucks. Waiting at the train station, chat through a Comcast or Time Warner Cable WIFI connection. In fact, a great added value for broadband cable customers to access the web away from their home. As more free wireless hot spots pop up, the need to be on 3G or 4G diminishes. Such a relief to listen to Pandora or watch a movie on Netflix without running up a cellular usage bill.
"Cellular operators offer the highest-cost path to the Internet; customers have both motive and opportunity to shift demand to other paths. The operators themselves have not been slow to figure this out. AT&T, the nation's second-biggest cell carrier, is also its biggest operator of Wi-Fi hot spots because it's a cheaper way to meet the data demand of its iPhone customers." So why worry that AT&T wants to buy T-Mobile? The cellular industry, like the cable industry, an oligopoly with fewer and fewer companies. But technological changes have meant that the cellular industry now has new competition from cable, and perhaps soon, Lightsquared. Rather than stopping the merger, the government should be working with other industries to encourage more investment in wireless alternatives. Cellular vs. WIFI, as costs for cellular usage rises, consumers continue to embrace their cheaper WIFI hot spots.
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