Hulu Update Despite Ownership Issues

Hulu's online view is getting a makeover and the new look and functionality should be good news for viewers.  An advance look can be found at  new.hulu.com.  And here's their video:



As to the ownership quarrels, well that will be news for another day.  Good to see that the day to day operations are still moving forward.

Broadband Not Everywhere

If you live in a big city, not to worry, you probably have not only broadband access, but perhaps even a second provider; however, if you live in the rural parts of this country, you are not so lucky.  According to the FCC, "approximately 19 million Americans 'in areas still unserved by terrestrial-fixed broadband' and concludes that for that, and 'other reasons,' it must conclude 'that broadband is not yet being deployed to all Americans' in a reasonable and timely fashion.'" In addition, of those areas getting broadband, over a quarter are not getting the speeds of 100 Mbps or more today.

For the cable operator, the argument is that their rollout has been moving along at a fast pace, the FCC believes that accessibility and speed goals have not been reached.  Broadband, it seems, has  been treated like a necessity, equivalent to food, shelter, and clothing.  It has joined the ranks of telephone and cable TV accessibility.  In the private enterprise, the cost to string a city, with many homes passed per mile verse rural america where you may be lucky to pass 1 home every 10 miles, demonstrates the challenge of rolling out broadband service, cost-effectively, to a widely dispersed geographical base.  As broadband gets perceived as necessity, and not luxury, the demand to speed that rollout simply grows in the public government's opinion.  As noted in the article, "cable operators and others have made [a major impact] toward deployment and adoption, including 'billions invested by the communications industry in broadband deployment, including next-generation wired and wireless services'".  Unfortunately, today, our patience seems to be wearing thin.

ABC Pushing Nightline Back for Jimmy Kimmel

In 2013, the Tonight Show and David Letterman will face new competition; ABC is moving Jimmy Kimmel Live up from midnight to 11:35 to compete head on.  Good for Jimmy Kimmel, bad for the fans of Nightline who won't be able to stay up till 12:30 am to watch their news program.  "As a consolation prize, Nightline will resume a prime-time edition Fridays at 9 staring March 1, and will expand to 30 minutes nightly."

Why January and not with the start of the Fall premieres.  You can thank the presidential election for that; political news junkies win.  Nightline performs when certain news stories emerge above the typical level of noise.   Nightline provided alternative programming on broadcast that truly differentiated from the other talk shows.  Now Kimmel will be going head to head against Leno and Letterman and news audiences will have to seek other ground from cable and online alternatives.

Will Kimmel take more from Leno or Letterman and where will the Nightline audience go?  The fight heats up January 8.

TiVo Adds Another Small Cable Operator To Its List

Can slow and steady win the race?  TiVo has announced another cable partnership, this time with GCI, the Alaska cable operator, with access to over 122,000 subscribers.  How many will upgrade and take a TiVo DVR set top box remains to be seen, although most consumers don't tend to switch out their box till something goes wrong.  So the effect on growth may prove minimal given the small base.

GCI can now be added to the list.  "In the U.S., TiVo also has agreements with Charter Communications, Suddenlink Communications, RCN and Grande Communications." Of course there is also DirecTv, but missing are the other notable names from the top cable distributors.  With a need to attract millions of cable subscribers, a GCI partnership is nice, I just wish it could move TiVo's subscriber needle more.

An Uncertain Future For Hulu

Whether it is in business or in the kitchen, the notion that too many chefs spoil the broth comes into play.  It seems especially true when these multiple owners have big input and even larger expectations to the business at hand.  A single owner, like a single chef, may take recommendations and other expertise into their decision making process, but ultimately, the final decision is a singular one.  So we face crossroads with businesses who face changing landscapes with multiple owners with different viewpoints.

Case in point, Hulu, and their majority owners News Corp and Disney.  NBC is also a major owner, but it's ownership to Comcast requires them to be now a silent partner.  As Provident Equity sells its shares, speculation is that so will it's current CEO Jason Kilar.  And with that sale could come his departure. "A second consequence of the Providence buyout is that the change in the ownership structure will precipitate significant adjustments to the content licensing agreements that give Hulu its most valuable asset: next-day access to primetime programming from the TV networks owned by News Corp. and Disney." But with two different philosophies regarding online video content, the future for Hulu could become murkier.

That Hulu is mentioned constantly with being a driver of cord-cutting could determine the new shape of how and when content is made available.  The Variety article asks some additional key questions facing the future of the company, including what kind of exclusivity will they get, what about international expansion, and how best to build additional revenue.  Can these media giants work together when they are historically competitors on other distribution fronts? Without key leadership and another owner that can balance the opinions of Disney and News Corp, conflict may interfere with progress.

The Long Term Fate Of Discount Deal Sites

I was recently asked about the business model of Groupon, Living Social, and other discount deal sites. The question posed was why would businesses discount their service AND pay a fee on top of it to advertise the fact.  Printed coupon book companies charge to print discounts, why shouldn't websites.  And maybe the reason coupons work and websites don't is that people forget to tear out or hold on to the coupon when they get to the store.  Pre-purchasing on the website makes them remember to use it.  Pl-us the discounts on these websites seem to be bigger to capture any substantial interest.  But does it drive new business or simply give existing customers a cheaper price to shop?

If the stock price is any indication, these website models aren't growing.  "Groupon Inc.'s shares slumped to $5 today — a new low that borders on penny-stock status — as investors continue to flee.  Top on the list of concerns is the company's slowing revenue growth, which is a problem for an Internet company whose story is supposed to be all about growth."  Slow growth in the web, yikes.

In general, websites are under scrutiny.  Like Groupon, Facebook is under pressure to perform for its shareholders as well.  Whether for these two companies and others like them, the focus is too short term or that the long term future bleak, remains to be seen.  For now, how Groupon can grow its revenue base without crippling the businesses that use it to reach consumers, remains to be seen.

Would It Matter If Your Cable Box Came From Apple?

Since the Steve Jobs bio came out, there has been speculation that Apple was going to enter into the TV marketplace; a new manufactured television or more refinement to Apple TV.  Well the news today is that Apple has  been talking to the big cable operators about an Apple branded set top box.  "Apple is wooing cable operators for an Apple-branded set-top box for live TV and other programming, according to a report."

Today cable subscribers rent their cable boxes; the challenge would be selling consumers a set-top box.  Others, like TiVo, have tried to enter this space with a branded, beautifully built, consumer friendly box, but cable operators have made it harder to easily integrate them.  The CableCard is a lousy solution.  Still TiVo has made slow and steady inroads with some operators. Google has entered the set-top box race with its purchase of Motorola but has yet to do anything to integrate Google in those boxes.  So one wonders whether it would make any sense for Apple to jump start their push into cable by purchasing Scientific Atlanta, now owned by Cisco, or even TiVo.

With cable operators contending with cable subscriber drops, an ally like Apple could help make broadband and cable a better integrative experience, encouraging consumers to want to continue to have both a broadband and cable subscription.  Apple's ability to integrate with its iPad and iPhone could make having an Apple set top box a must have device.

Is More Cable Network Consolidation In Our Future

We've watched as cable operators have merged and the landscape is dominated by a few distributors.  The list of departed cable operators is long including American Cable, Continental, Knology, Insight, and many others.  Today the top 5 operators dominate the country, With Comcast and Time Warner Cable accounting for most of the country. 

Consolidation is happening on the other side of the aisle too, in the content landscape.  Independent cable networks are few and far between as networks have been bought up into bigger media groups.  The latest rumor is that Scripps Networks Interactive, home for HGTV and Food Network, could be on the trading block with Disney the likely buyer.  "Already, Disney is in the process of proving that in contrast to media peers like News Corp, Viacom and Time Warner, it benefits from being a media conglomerate with a pool of assets that includes broadcast and cable networks, movie studios, theme parks and resorts."

It is the economic order as big fish continually buy up the little fish.  Certainly deeper pockets can help a smaller network to grow more rapidly.  It comes with hardship too as  network identities often have to broaden more and more to capture larger audience share.  Disney has done well so far, according to the report.  "In a media industry filled with bad mergers, broken synergy promises and assets that perform better independently, Disney is judged as having succeeded in its acquisitions of Marvel and Pixar, giving investors reason to believe that they have uncovered a rare winning conglomerate formula"  And companies that can successfully find synergies across their businesses are able to better exceed their goals. 

Competition in Tablet Space Intensifying

The wonderful thing about the economy, especially when there are more than a few competitors pursuing their share of the market, is watching how it follows general marketing principles.  Specifically in the tablet market, you have your market leaders pushing their differentiation strategy while others use a low pricing strategy to gain market share.

"New stats from market research firm IHS iSuppli show Apple’s iPad surging ahead of other media tablets to gain a 70 percent market share in the second quarter of 2012."  But not resting on their laurels, expectations are that a mini iPad will be announced  shortly to add to their product line.  New entrants like the Microsoft Surface may cause a buzz while Samsung is banking on growing its share of the Galaxy and Google with the Nexus7.  And of course there is the Kindle from Amazon and the Nook from Barnes & Noble.  In the case of the Nook, they hope to grow business with a timely cut in their price just as school is about to begin.

The joys of a crowded marketplace, inciting constant innovation and pushing the others to keep their eye on the prize.  It should make for a fun Holiday Season as each of these companies sell their benefits to the consumer.