Yahoo Knows That Content Is King - Hires Couric And Pogue

First came the announcement that David Pogue is leaving The New York Times to start a new chapter at Yahoo.  Now comes news that Katie Couric is coming on board as well.  "Sources said that Couric is now close to completing a deal to put a Web interview show right on Yahoo’s home page."  As CEO Marissa Meyers continues to put her stamp on Yahoo, it has become clear that she too regards content as king.  Original, exclusive content that drives viewership and grows ad revenue.

That established old media stars like Katie Couric (broadcast television) and David Pogue (newspapers) are moving to digital platforms follows a path of using branded content to attract users to new platforms.  Last month, Walt Mossberg announced that he too was leaving the printed world of The Wall Street Journal to start his own website.  Perhaps Meyers can convince Mossberg that his talents can best be merchandized with the backing of the Yahoo brand.

Using content to drive adoption and usage is an important strategy that demonstrates just how important content is to a platform's success.  It is not just that you build a site but that you house it with meaningful content that consumers will seek out.  And branded, well known, credible content is far easier to market than unknown, untested content.  Certainly, both can survive and prosper, but branded, established content potentially comes with a built in base of consumers that will follow the path to a new platform.  And that is certainly what Yahoo expects to happen.

David Pogue Leaves New York Times

After 13 years writing a column for the New York Times, David Pogue has accepted a position at Yahoo, writing articles and creating videos for the web.  A big loss for print, a big gain for Yahoo. 

From his blog, "Leaving The Times is a big deal. My years there coincided with the explosion of just about everything important in today’s tech — the Web, social media, e-books, smartphones, tablets, duck-faced selfies. It’s been an amazing ride...." 

Will Broadcasters Drop Their Over The Air Signals?

As Aereo disrupts the broadcast platform, it poses a potential threat to long term retransmission fees.  The more Aereo wins court cases, the more cities it populate, and the bigger the threat to the revenue model.  If Aereo can retransmit broadcast signals for free, why can't cable operators.  And that possibility concerns broadcasters. 

In the past, Fox Network threatened to move from broadcaster to cable programmer, and now we learn that ABC Network considered it as well.  "A cable network doesn’t broadcast its signal over the air like broadcast networks, preventing Aereo from taking the signal and re-transmitting it online to paid subscribers, as it is doing with the broadcast networks in certain markets."  Of course we have also heard other rumors that ABC/Disney parent would consider selling all their owned and operated affiliates as another possibility.  Clearly, Aereo's disruptive approach has gotten the broadcasters to reexamine their current revenue models.  Aereo's approach could also quickly deflate the valuation price of any affiliate sale, unless all affiliated stations converted from broadcast to cable. 

And while Aereo may be successful in building antenna farms, I am not convinced that cable operators would bypass license fees through a similar approach.  The cost of building and maintaining verse negotiating for more streaming access to broadcaster linear and on demand programs would justify maintaining the status quo of license fees for cable operators to continue to pay.  Plus, cable operators have more flexibility in building out its broadband and wireless platforms for authenticated customers with discounts for those that subscribe to cable.  Such a radical approach like converting broadcast to cable is like killing a mouse with an elephant gun; there are simpler solutions.

Aereo Launching In Its Next Market

Tuesday, October 22, 2013, Detroit DMA consumers will be able to cut their cable cord and still gain access to broadcast and some cable networks in their market without an antenna.  A broadband feed is all that is required to sign up and get Aereo delivered into your home.  And despite numerous attempts by the broadcasters to block Aereo, the courts have yet to agree and have allowed the business to rollout into additional markets.  According to reports, "Aereo says it expects to be in 22 cities this year."  The more success that Aereo has, the harder it may be to put the genie back into the bottle. 

Rather than fight Aereo, broadcasters should spend more of their effort working with their cable/telco/satellite operators to enable their signals to be authenticated for TV Everywhere.  Give consumers the value of getting their broadcast channels, not only on the TV set, but also on their mobile devices.  Increase the value by offering more on demand programs online along with the linear feed.  Consumers may just prefer maintaining their cable subscription for this added level of value.  And that minimizes the losses that Aereo might present in each market.

ABC Networks' O&O For Sale?

According to reports, Disney/ABC may be considering a sales of its eight owned and operated affiliated broadcast networks.  Although denied by the network, the timing might be right to separate the distribution side of the business from the content side.  And there may be a significant ROI, too.  "Disney CEO Bob Iger is interested in what the broadcast business could fetch now that station valuations are much higher than when the company last explored a sale in 2010." 

Of course, it was CapCities, the owners of broadcast networks that originally bought ABC, the content side.  That was prior to Disney buying the merged company.  Now with talk of unlocking shareholder value by concentrating on one side or the other, ABC/Disney may prefer to work in the world of content over distribution. They certainly aren't the first to make such a move.  Time Warner made the same decision when it spun out the Time Warner Cable business.  

Such a sale would certainly free ABC/Disney to construct interesting distribution partnership deals without having its internal businesses in a perpetual state of conflict.  It would enable more freedom to push a TV Everywhere approach for both linear and on demand streaming of all of its shows.  Still it would be hard to part with all the dollars flowing into the company from rising retransmission fees.  "RBC Capital analyst David Bank said rising retrans dollars are one reason Disney may be loath to part with the stations right now despite soaring valuations."  But if your strategists are telling you that the threat of companies like Aereo could disrupt the retrans model and future fees, it may be smart to gamble on other ventures, take your profits and concentrate on content focused ventures that better support the goals of the Disney/ABC brands. 

Certainly the rumors of a possible sale are flowing.  They will never be confirmed until the deal is consummated. Still, the timing and the opportunity to focus on content never felt more right.  To me, such a sale makes sense. 

Time Warner Cable To Bring Back Ovation Network

Despite dropping the Ovation Network the beginning of the year under the guise of controlling costs by dropping low rated channels, Time Warner Cable plans to relaunch the network the beginning of next year.  The rationale given, an increase in original arts programming on the network.  A wonderful benefit to present to the subscriber.  I am a fan of the arts and a fan of Ovation so my comments are not about the value that the network provides, especially as art programming is underrepresented on linear television.  It is simply that the original reason Time Warner Cable dropped the channel was to cut costs for little viewed programming. 

I doubt that the investment that Ovation is making in original programming will substantially change the ratings of the channel.  Other arts networks, like A&E and Bravo, ultimately moved away from high art programming for more "pop culture" shows to attract a broader audience.  I suspect that the deal was also predicated on a lower license fee cost and "marketing investment" back to Time Warner Cable.  Fine in the short run, but not consistent with its earlier "public push by the cable operator to cull its lineup of poorly rated channels. CEO Glenn Britt made much of that plan, aimed at controlling rising programming costs."  So if you start adding channels and costs, has your strategy changed?

Ultimately, low rated channels likely also have the lowest license fee costs to the operator; they would have little or no effect on the subscriber fees that are passed through to consumers.  Those higher fees tend to be tied to the highest rated cable networks and especially regional and national sports networks.  According to the article, "A Time Warner Cable spokeswoman said that the company continues to look at 'three primary factors: cost, viewership and unique content' when it comes to assessing the value of a channel."  SO will TWC start to drop other low rated channels.  It remains to be seen if we ever hear that cable operators are actually lowering their monthly subscription fees to consumers as a result of cutting costs.  Frankly, I doubt it.  And as cable costs rise, consumers will seek to shed those fees for streaming video alternatives.  And it is in the OTT platform that networks like Ovation could have the chance to shine and breakout. 

Are You Ready For More Football?

I love football.  I love the strategy, the athletics, the march down the field toward the endzone.  And there is nothing more enjoyable then a Sunday afternoon on the couch watching the game(s).  But truth be told, too much of a good thing can be too much.  So I find Sunday Night and Monday Night Football to test my enjoyable, unless of course it is my team.  And still, it is difficult to stay up to the bitter end. 

So when I read that the NFL is considering adding a second football game to the Thursday schedule, my heart sinks.  "The NFL's belief is that adding another Thursday game would generate more national interest, plus it would give the league a chance to sell rights to another round of games."  It may also be that not enough people are watching the NFL Network while in-market teams get the simulcast on a broadcast channel.  Truth is that the search for more money is what will likely find a cable network bidding for a second Thursday game.  But I believe it is also killing future fan interest in the game that I love.  Too much of a good thing can indeed be too much.

In an earlier blog, I wrote about the DirecTv agreement expiring next year and who might want to buy those rights.  I suggested that an OTT platform like Apple TV or Netflix or Amazon could afford the investment and attract additional subscribers to their base.  That kind of viewership deal makes sense, a second Thursday night game does not.  It pushes one more game off the Sunday afternoon line-up.  And as a fan, reduces the impact of watching results of games across the day.  It simply extends the game week too far.  My vote, let's limit football to Sunday and Monday.  Enough is enough.

TiVo Would Make It Easier For Cable Operators To Add Netflix

TiVo has the technology and the software ready to go to integrate Netflix with traditional linear and on demand programming.  Should it quickly be able to integrate all the content under a simple interactive search menu, TiVo could become the preferred cable set top box for cable operators.  And for those that already have a deal with TiVo, the ability to quickly support a Netflix addition to their offerings.  Certainly, a partnership between Netflix and cable operators would be a win for Netflix and consumers.  "For Netflix, forging ties with cable providers could fuel expansion by putting its Web-based programs alongside traditional TV shows" according to Tom Rogers, CEO of TiVo. TiVo would certainly benefit as well.

But like John Malone, CEO of Liberty Media, I wonder of such a deal, in the short term is good for the cable operator.  Would operators be better suited providing their own streaming video service and fully enable TV Everywhere of their current linear and on demand offerings.  For instance, why shouldn't cable operators be enabled to stream all the back seasons of Breaking Bad to authenticated viewers on any device as a result of its carriage of the parent network, AMC.  Netflix's edge would then be limited to original programming, not yet offered to cable. 

Cable operators though worry that not embracing services like Netflix could lead to full cord cutting.  Making it a choice within the cable infrastructure could result in consumers maintaining their cable subscriptions and not cutting their cable cord all together.  What should worry cable operators more is that their total cost of service is what is driving customers to drop cable.  Offering a Netflix option on the cable box works if cable customers can access without having to buy an expensive package of service. 

I would love to see some research on what percentage of Netflix customers also have a cable subscription, what percentage watch premium services like HBO, Showtime, and Starz, and what percentage has dropped premium channels or cable service completely in the past year.  Cable operators may find that Netflix is not a competitor to its business model but rather an additive choice that customers will embrace while also staying loyal to cable.  And if that is the case, Netflix should present those findings to cable operators and operators should be quick to start a partnership with Netflix.

Should Cable Operators Partner With OTT Or Syndicate Their Own?

Today's Wall Street Journal talks about Netflix's efforts to build a partnership with cable operators to place its app on the cable set top box.  For consumers it would make for easier usage; it might also lead to a more enhanced interactive menu and search screen that added Netflix programming alongside linear and on demand.  For cable operators, it could bring leverage when dealing with network contracts, offering programming otherwise blacked out on the linear network.  But there are risks too.  One that consumers bypass more expensive premium services like HBO or Showtime for a lower priced Netflix subscription.  Still if it encouraged Netflix subscribers to remain cable subscribers, cord shaving is certainly preferred over cord cutting.

But John Malone, CEO of Liberty Media has another idea.  Why partner with a competitor when we can work with our own partners to provide a streaming video service.  "Cable operators may be able to monetize TV Everywhere programming by forming a joint venture which would syndicate a product like Comcast's Xfinity TV or Hulu nationwide".  Consider too that Redbox has been in need of additional support and cable could come in as well.  There is certainly some logic to cable operators embracing a shared OTT strategy while maintaining their physical footprint for linear and on demand.  The core of such a partnership still requires a broadband line into the home and strengthens the value for the cable operators' customer base.  And the same advantages of a better onscreen search engine and simpler access across platforms can be created and offered. 

In fact, cable operators might actually have more to gain by Malone's vision of a syndicated OTT offering then by a 3rd party partnership.  Not that Netflix would not be well received by customers on a cable set top box, but that cable operators have more to lose.  Plus, the rise of other smart devices and TV sets already makes it fairly easy to access and watch Netflix programming on a television screen.  Malone sees a future where platforms converge.  He also sees the need for cable operators to continue to consolidate to better compete and gain further economies of scale.  And he might just be right.