It's Not TV, It's Netflix

Where broadcast couldn't swear or show nudity, HBO came along with quality programming that crossed that line while it delivered growing audiences.  By going against conventional wisdom, HBO proved that what they offered went beyond anything offered on television.  But since then, HBO has faced increasing competition, both from other premium providers like Showtime and Starz, and cable networks like AMC. 

But consumers are now moving beyond cable to streaming media and Netflix is proving itself as the go to source for streaming video content.  And according to Liz Shannon Miller of Paid Content, "Orange Is the New Black confirms: Netflix is the new HBO".  Truth is Netflix has been pushing the envelope, both with original content and renewals of a show like "Arrested Development."  Their push to delivering more content, both syndicated and original, has enabled them to grow their subscriber base and compete directly against premium content and basic cable.  

For consumers seeking content that follows them, a TV Everywhere approach, Netflix enables consumers to directly buy a subscription.  HBO, on the other hand, offers its HBO GO feature, but only to authenticated cable subscribers.  Good for cable operators but bad for consumers that don't want that buy through.  

Is Netflix the next HBO as Miller suggests.  For me, it may be too soon to tell. Amazon, Hulu and others are in this space too.  But I like the direction that Netflix has taken in driving original content to their platform.  It worked for HBO, it worked for AMC, and it will continue to drive traffic to Netflix as long as the quality remains high.

Can Radio Shack Survive?

The Radio Shack chain has been a perennial establishment when kids were building electronics and transistors and other quaint products.  But with the rise of computers and smartphones, radio shack has become less relevant as kids no longer build their own telephone or light/buzzer device.  Today, Radio Shack is seen as a place to sell smartphones and other small electronic appliances.  It seems the 21st century has left Radio Shack behind.

"RadioShack Corp. said it is in talks with investment banks on ways to bolster its finances, as the money-losing electronics chain works to remake its image and reverse sliding sales."  As a century old business with a century old name, the first course of business for Radio Shack is a name change.  No matter how you cut it, the name Radio connotes old technology and not the place to sell the latest and greatest.  Identities are hold to change but Bell Atlantic successfully became NYNEX and finally Verizon and Boston Chicken became Boston Market.  It is apparent to me that step one is a name overhaul and a strategic decision as to what kind of technology store you want to be.

Steps are already being taken, according to the article, to update the merchandise and modernize the store, but it needs a name change to complete the transformation.  It also faces the same issues that Best Buy and others face, competition from the web and price comparison shopping.  A new name, modernized stores, and better merchandizing just might draw a crowd to come in and keep visiting.  But I believe it can be done.

Hulu NOT for sale

After the bids were in and reviewed, the owners of Hulu have decided to stay their owners.  If they can agree on a strategy, they have the best chance to build a valuable content portal.  Per the New York Times, "the three companies that mutually own Hulu — 21st Century Fox, the Walt Disney Company and NBCUniversal — said they would make a new investment of $750 million and use Hulu’s technology to compete against other online distributors like Netflix."  

For the bidders, it represents a real loss as Hulu is seen as a key player in the streaming video business, going after Netflix, Redbox, and others, as well as attracting cord cutters leaving cable.  For one owner, NBC and its owner Comcast, is in an unusual position, straddling the line between cable distributor and content creator.  Neither Fox or Disney have such worries although they too have to consider what the success of Hulu means to their cable license deals.  Still, with windows and exclusivity, they can build agreements that keep the dollars flowing.  

As for other M&A deals, I expect to hear a cable or satellite deal before end of year, either with Charter - Time Warner Cable - Cablevision or DirecTV -Dish.  Hulu is off the market for now but something else should be started soon.  

A Must See, "The Way, Way Back"

It has not been my nature to use this blog to recommend particular content, but having just seen the movie, "The Way, Way Back", I can only say it is the must see movie of the summer and in my own top 10 list.



Co-Directed and co-written by Nat Faxon and Jim Rash, who both also have featured roles in the movie, it stars Steve Carell, Toni Collette, Sam Rockwell, and Allison Janney.  It is a coming of age story about a 14-year-old boy, Duncan, and his summer vacation with his mother and her boyfriend.  

My wife and I saw this movie last Saturday and was talking about all through our dinner that night, while seated at the bar at Grammercy Tavern.  Toward the end of our meal, two men sat at the bar next to us.  My wife remarked to one of them their similarity to an actor and while it wasn't him, it was indeed Mr. Faxon with Mr. Rash.  Their warmth and excitement at our enjoying their film was genuine and we knew we had to leave else we would be chatting with them all evening.  Still they provided added insight and made our enjoyment of the film that much more complete.

If I need one more reason to convince you to watch this film, they also co-wrote last year's Oscar winner, The Descendents.  So seek out this film at your local theater.  The Way, Way Back will make your top list, too.

Tribune Follows Others on Path To Split Print From Video

Tribune has emerged from bankruptcy with a plan eerily similar to others before it, separating the video business from print.  Following on Fox and Time Warner, Tribune sees more growth potential concentrating on the video platform and selling off the print one.  "The company offers familiar justifications for the spin off of its assets in the weakening print business to create a new company called Tribune Publishing".  Fox, Time Warner, and now Tribune all see more revenue growth in the video media side of the business, while print suffers through digital conversion. 

What is sad that none of these companies wish to use internal synergies to help the print business build out a new multi-media model to reflect the rise of digital distribution through the tablet and other mobile devices.  Unfortunately, as I have said before, Tribune's focus on broadcast and acquisition of the Local TV affiliates is based on the assumption of growing affiliate fees from cable subscribers.  Disruptive companies like Aereo and the rise of cord cutting could dampen that growth and limit profitability.  Ultimately, I am sure, those factors have been discussed by their senior management.

So we are seeing media companies splitting their platforms to focus more fully on video content and distribution.  Print companies will have to go it alone but perhaps open themselves to new partnership opportunities that will enhance the digital print business. 

Sirius Stays Strong

Sirius continues to grow as both the economy and car sales are rebounding.  Almost 750,000 new subscribers joined Sirius for the latest quarter, bringing their total subscriber base to over 25 million customers.  In a word, impressive. "In comparison, Netflix ended the first quarter with 29.17 million U.S. subscribers, and cable giant Comcast reported 21.94 million video and 51.9 million total customers."

Can this trend continue?  Sirius thinks so and is raising their year end numbers to match this growth.  Given that some of this quarterly growth reflects customers signing on with free trials, Sirius must continue to push to convert and keep subscribers paying their monthly bills.  For customers unhappy with the current variety of content on terrestrial radio, Sirius does indeed provide a wide range of programming for all to enjoy. 

Job Posting: CEO of Barnes & Noble

It seems that the CEO seat was too hot for William Lynch who resigned as Chief Executive Officer of Barnes & Noble.  "The board of directors tapped Michael Huseby as CEO of NOOK Media LLC and president of Barnes & Noble; Lynch’s title has not been filled, while the NOOK CEO post is newly created."  Why a CEO of Nook when they have scrapped the their tablet is questionable, but maybe to help with the plans to close the business.

What B&N needs is a leader that sees the potential that I believe B&N still possesses, a visionary to guide their business into the next generation of book seller and digital aggregator.  It will not be an easy road and success depends on building a brick and mortar business that adapts to a digital business while diversifying and managing a retail presence.  Others before them have failed;  Borders already with books, Tower Records and others with music.  But B&N still has a chance to defy those odds and stay a competitive threat.  Unfortunately, a change at the top was most likely necessary to start to adapt.  I wish them luck.

Boxee Cloud DVR Going Away

With the Samsung purchase of Boxee, the Cloud DVR feature will become a thing of the past.  According to the company, "Cloud DVR functionality we provided to certain Boxee TV users will be discontinued on July 10th".  Sad news for current Boxee owners that have saved content on their cloud DVR.  But it also got me thinking, if we don't physically own digital content, but save it in the cloud, then we don't really own it. 

Some might say that the DVR is a rental type service and we don't control it, but I think that you can still take the concept to the next level.  To truly own digital content, we must maintain our own physical storage for it; if we choose to keep it purely in the cloud, then should that company business go away, just like Boxee, we could lose our ownership of it. 

But back to Boxee, I must say I am surprised to read that Samsung doesn't want to keep the cloud DVR business alive and well.  For consumers seeking a TV Everywhere approach with their DVR content, the cloud provides it and more.  While Samsung might want to support the hardware DVR approach, there should seem no problem to offer the cloud as a software complement service.

Who Will Own Hulu?

With final bids due tomorrow, July 5, we should know shortly afterwards who will be buying Hulu.  Along with hedge fund and investment groups, companies like DirecTv, Time Warner Cable, and Yahoo are still interested in owning this streaming video aggregator.  "The big question is how much bidders will offer for Hulu.  Fox and Disney want about $1B."  Samsung's purchase of Boxee, on the other hand, is a tiny $30 million.  Hulu's value certainly depends on the length of the content deals, especially from the soon to be former owners of Hulu.  Once free of the shackles of distribution, they are free to charge whatever and to whoever they choose.  So once the current content deals expire, Hulu could just be an empty vessel.  Hopefully, the content deals include a long term life.

Who will the winner of Hulu be?  We shall know soon enough.