With this week's release of the movie "Noah", a now distinct animal was late to board the ark. Noah had just closed the doors and the animal and his mate were left out to the elements. Today, with the announcement that Microsoft Office is available on the iPad, Apple CEO Tim Cook could have said the same thing. He didn't but it still won't matter. iPad users have found other alternatives to Microsoft Office, some that work quite well in collaborative user environments.
The Office app may get downloaded and some may actually use it, but will it spark additional revenue in the Office suite of services? I doubt it. The rise of cloud based applications from Google and others have made the Office a less important piece of software. In addition, PC sales have dropped while tablet sales continue to grow. And users have found apps to support their business and personal needs. Microsoft's Office has come late to the ark and while it may be lucky enough to get inside, will most likely be soon ignored.
Personally, I have always liked the Microsoft Office suite and use it daily on my computer. But it is a different story on my tablet. That Microsoft has finally acknowledged the need to play in the mobile sandbox is great and with its new leader, the hope is that their is innovation on its way, to become the next generation Microsoft. It is the potential of what can come next out of Microsoft that I look forward to hearing about. As to Office on iPad, let the downloads and revenue numbers speak for themselves.
Friday, March 28, 2014
Thursday, March 27, 2014
If Comcast Can Do It, Then Why Can't Dish
The maturity of the cable industry, the rise of broadband streaming platforms, and the need for more cost efficiencies have led to Comcast pursing an acquisition of Time Warner Cable. And if Comcast can do it, then why can't Dish. That's the thinking of Dish Chairman Charlie Ergan to reach out to his competitor DirecTv to merge. But while Comcast and Time Warner Cable don't compete given that they each oversee different markets, Dish and DirecTv compete 100% for satellite coverage. Yet the rationale for the latter to merge makes complete sense.
The threat of wired and wireless cable, telco, and broadband carriage from businesses from Comcast to Verizon to Netflix are much more of a threat to business for Dish then competing with DirecTv. As they lack an owned broadband platform, they are both much more at risk from future growth. Combining businesses may not give them programming cost efficiencies, but it will give them technical ones.
Still a Dish- DirecTv merger has no chance to move forward until the Comcast - Time Warner deal is fully vetted and approved. Then a real case can be made for these two satellite behemoths to continue. Ultimately though, as Ergan has correctly tried to do with his efforts with LightSquared, the satellite business needs a two-way broadband connection to position itself against cable and telco. That is truly the means for getting a more competitive broadband landscape for consumers.
The threat of wired and wireless cable, telco, and broadband carriage from businesses from Comcast to Verizon to Netflix are much more of a threat to business for Dish then competing with DirecTv. As they lack an owned broadband platform, they are both much more at risk from future growth. Combining businesses may not give them programming cost efficiencies, but it will give them technical ones.
Still a Dish- DirecTv merger has no chance to move forward until the Comcast - Time Warner deal is fully vetted and approved. Then a real case can be made for these two satellite behemoths to continue. Ultimately though, as Ergan has correctly tried to do with his efforts with LightSquared, the satellite business needs a two-way broadband connection to position itself against cable and telco. That is truly the means for getting a more competitive broadband landscape for consumers.
Wednesday, March 26, 2014
Movie Attendance in US Dropping
Despite the insatiable interest in movies, attendance at movie houses are dropping. Revenues grew slightly but only because of increases in ticket prices. And technology may be partially to blame for this drop in demand but it isn't the only reason.
Consumers today have far more choice to watch movies, from premium cable channels and same day as theater movies on demand through your cable box to subscription streaming services that can provide an all you can eat buffet for a month at less than the cost to individually go to the movies. And for many on a budget, their entertainment appetite can be satisfied.
But for those that seek a night away from home and desire a "just released" movie, going to the theater becomes a date night or time to hang with your friends. But for that important college age group, they are choosing to not go that route. "Frequent filmgoers from 12-24 are likely spending much of their previous moviegoing time watching a variety of other screens." And that also includes the rise of gaming devices like XBox and Playstation. They are also on a budget and may be more particular but which movie they will watch in a theater and which ones they will wait for its later release on another platform.
So what are the solutions? There is some speculation that movie prices may drop although only on a pre-determined night and certainly not a weekend. But I think that will not win back the millennial audience. That demographic needs for the movie house to once again become a destination point, not just for watching movies, but as a gathering to relax, play, and share. My ideas range from a one fee to stay all day to a refreshing of the lobby with seating and arcade games and wireless. From there, sell a richer assortment of refreshments and merchandise. I might borrow the marketing efforts of gamers and offer to certain films added extras not available elsewhere, ranging from merchandise to mobile links to additional content to connected game play.
As to the older demographic, the key is convenience, comfort, and cost. Off peak discounts continue to work as well to stay within their budget. There is nothing like a night out, away from the home or apartment and with the company of friends and family. The movies may be watched quietly, but it is and always will be a social experience that allows us to communicate our likes and dislikes about the film and to transport us to other times, worlds, and ideas. Attendance may be down but there is opportunities to get it growing again.
Consumers today have far more choice to watch movies, from premium cable channels and same day as theater movies on demand through your cable box to subscription streaming services that can provide an all you can eat buffet for a month at less than the cost to individually go to the movies. And for many on a budget, their entertainment appetite can be satisfied.
But for those that seek a night away from home and desire a "just released" movie, going to the theater becomes a date night or time to hang with your friends. But for that important college age group, they are choosing to not go that route. "Frequent filmgoers from 12-24 are likely spending much of their previous moviegoing time watching a variety of other screens." And that also includes the rise of gaming devices like XBox and Playstation. They are also on a budget and may be more particular but which movie they will watch in a theater and which ones they will wait for its later release on another platform.
So what are the solutions? There is some speculation that movie prices may drop although only on a pre-determined night and certainly not a weekend. But I think that will not win back the millennial audience. That demographic needs for the movie house to once again become a destination point, not just for watching movies, but as a gathering to relax, play, and share. My ideas range from a one fee to stay all day to a refreshing of the lobby with seating and arcade games and wireless. From there, sell a richer assortment of refreshments and merchandise. I might borrow the marketing efforts of gamers and offer to certain films added extras not available elsewhere, ranging from merchandise to mobile links to additional content to connected game play.
As to the older demographic, the key is convenience, comfort, and cost. Off peak discounts continue to work as well to stay within their budget. There is nothing like a night out, away from the home or apartment and with the company of friends and family. The movies may be watched quietly, but it is and always will be a social experience that allows us to communicate our likes and dislikes about the film and to transport us to other times, worlds, and ideas. Attendance may be down but there is opportunities to get it growing again.
Tuesday, March 25, 2014
Disney Acquires More Online Content
The mouse wants to be more hip and that means going where the millennials roam. While Disney produces tons of content, new generations of viewers are more web focused. So to capture that audience, Disney is acquiring Maker Studios, an online content company with substantial distribution on You Tube.
As we know, this online millennial demographic can be very fickle. Maker has been able to reach them with discovered talent including PewDiePie, but as Disney knows, what is in the pipeline is also important. Also key for Disney is the synergy of such a purchase. How will Maker Studios fit in with its broadcast, cable, and theme park businesses? Will PewDiePie get a show on Disney XD? This acquisition is clearly opportunistic for Disney and gets them closer inside the You Tube platform and its data, but is that where Disney really wants to be? Could they have used their current stable of Disney talent to migrate from the cable platform to the online space without investing in the Maker business?
Yes Maker has currently proven itself as a leader in online video content and Disney sees that as a important piece of the puzzle. In a make it or buy it world, I wonder if Disney's acquisition of Maker Studios best serves its long term interests. Disney continues to create a large stable of new talent for its young audience base; that they could do the same in building out a stronger online base would have seemed a more preferred strategy. Yet they have chosen to acquire and the hope is that Maker Studios talent base will bring new ideas to the Disney model and integrate well with all the businesses.
As we know, this online millennial demographic can be very fickle. Maker has been able to reach them with discovered talent including PewDiePie, but as Disney knows, what is in the pipeline is also important. Also key for Disney is the synergy of such a purchase. How will Maker Studios fit in with its broadcast, cable, and theme park businesses? Will PewDiePie get a show on Disney XD? This acquisition is clearly opportunistic for Disney and gets them closer inside the You Tube platform and its data, but is that where Disney really wants to be? Could they have used their current stable of Disney talent to migrate from the cable platform to the online space without investing in the Maker business?
Yes Maker has currently proven itself as a leader in online video content and Disney sees that as a important piece of the puzzle. In a make it or buy it world, I wonder if Disney's acquisition of Maker Studios best serves its long term interests. Disney continues to create a large stable of new talent for its young audience base; that they could do the same in building out a stronger online base would have seemed a more preferred strategy. Yet they have chosen to acquire and the hope is that Maker Studios talent base will bring new ideas to the Disney model and integrate well with all the businesses.
Monday, March 24, 2014
Consolidation Meets Indie Film Market
Industry consolidation isn't anything new. On the operator side of the world, all the news is about the proposed Comcast acquisition of Time Warner Cable. And on the independent film side, the latest plan is that MSG Networks is buying 50% of Tribeca Enterprises and the Tribeca Film Festival. So where is the consolidation, in the hands of the Dolan family.
Before MSG spun off, it was part of a larger company, Cablevision Systems, which also owned Rainbow Networks. Each was spun out into its own public company with Rainbow rebranded after its largest network, AMC Networks which is also the home for IFC and the Sundance Network, both independent film networks. All these companies, Cablevision, AMC and MSG are owned by the Dolan family with patriarch Charles Dolan heading Cablevision and son Jim heading MSG. And Jim also sits on the board of directors of AMC.
Ultimately, with the purchase of Tribeca Film, Jim Dolan will be involved in all three independent film companies - IFC, Sundance, and Tribeca. Three major players who are also involved in production and distribution of independent films. Consolidation indeed. The purchase of Tribeca Films may not kill the world of independent films, but it certainly limits it. But such is the nature of an industry's life cycle, birth, growth, and maturity. And we now simply see indie films as smaller budgets run by bigger companies.
Before MSG spun off, it was part of a larger company, Cablevision Systems, which also owned Rainbow Networks. Each was spun out into its own public company with Rainbow rebranded after its largest network, AMC Networks which is also the home for IFC and the Sundance Network, both independent film networks. All these companies, Cablevision, AMC and MSG are owned by the Dolan family with patriarch Charles Dolan heading Cablevision and son Jim heading MSG. And Jim also sits on the board of directors of AMC.
Ultimately, with the purchase of Tribeca Film, Jim Dolan will be involved in all three independent film companies - IFC, Sundance, and Tribeca. Three major players who are also involved in production and distribution of independent films. Consolidation indeed. The purchase of Tribeca Films may not kill the world of independent films, but it certainly limits it. But such is the nature of an industry's life cycle, birth, growth, and maturity. And we now simply see indie films as smaller budgets run by bigger companies.
Friday, March 21, 2014
Cord Cutters Take A Small Bite
The headline reads that TV subscriptions fall but when you look at the number of cable cord cutters in 2013, about a quarter of a million homes, total cable subscription remains north of 100 million subscribers. In total drop, that equates to a quarter of 1 percent. So, will the number of cord cutters continue to increase, the answer is yes, but given consolidation of cable operators, the rise of broadband subscription, and the close ties of cable operators and programmers to authenticate the TV Everywhere experience, it seems unlikely that cord cutting will impact the economic model for quite some time.
Certainly there will be a transition to a more IP world through the cable box, but the box to the home will still be controlled by the cable operator, offering important revenue opportunities and big data for research and better advertising. Most likely, OTT content like Netflix will end up working along side the cable universe and no longer seen as a competitor to cable; rather, as another option for the cable customer.
Unfortunately the costs for cable will continue to rise, causing more households to cut the cord. But I expect that cable operators will smarten up and figure out new revenue models to win back those cord cutters and creating a better cable/broadband experience for a reasonable monthly fee. Because as a connected customer, the cable operator has more opportunity to sell in more services too, like security and e-commerce. As for the cord cutter news, a .25% drop may be a tickle on the back of the throat, but how big it gets remains to be seen.
Certainly there will be a transition to a more IP world through the cable box, but the box to the home will still be controlled by the cable operator, offering important revenue opportunities and big data for research and better advertising. Most likely, OTT content like Netflix will end up working along side the cable universe and no longer seen as a competitor to cable; rather, as another option for the cable customer.
Unfortunately the costs for cable will continue to rise, causing more households to cut the cord. But I expect that cable operators will smarten up and figure out new revenue models to win back those cord cutters and creating a better cable/broadband experience for a reasonable monthly fee. Because as a connected customer, the cable operator has more opportunity to sell in more services too, like security and e-commerce. As for the cord cutter news, a .25% drop may be a tickle on the back of the throat, but how big it gets remains to be seen.
Thursday, March 20, 2014
Playstation Venturing Beyond Gaming to Video
Given the competition between the Microsoft XBox One platform and Sony Playstation 4 platform, it comes as no surprise Sony is following Microsoft into the world of original video streaming. They seem to be sharing the same strategy playbook, premiere gaming, original video content, and connectivity with other online streaming platforms. What differentiates the one from the other certainly depends on the exclusivity and appeal of the games and content that they carry.
"Sony's foray is the latest example of how videogaming devices are incorporating more entertainment features as they try to broaden their appeal in the living room. The PlayStation already allows users to buy an array of digital downloads, such as TV shows and movies, and can access streaming services. The company recently said it also plans to launch a service to stream games." These gaming platforms would certainly love to be a cable box , but unlikely as the value of that connection is too important to the cable operator. Still, we find ourselves with multiple OTT boxes connecting to our TV set, side by side with our cable box.
Original content, exclusive to one platform, will prove difficult for both Sony and Microsoft to demonstrate success. It certainly creates added value for the owner of these gaming devices but I contend that their primary motivation for owning is the exclusive games themselves. Besides the fact that the content can only be found on one device, it competes for awareness against other OTT content distributors like Amazon, Netflix, and Hulu, that allow themselves to be watched through multiple OTT platforms as well as through mobile devices. And given the ease of connecting to a show like Netflix's "House of Cards" verse a Playstation show like the newly announced "Powers", consumers will have a far easier time finding and connecting to Netflix.
So does that mean that Microsoft and Sony eventually open up these "exclusive" shows to other platforms? By keeping them behind their own pay walls, they retain exclusive charm, but limit viewership. And once they are syndicated to other sites like an Amazon or Netflix, lose their exclusivity and value to the gaming platform. My advice to both Sony and Microsoft, stick strictly to exclusive games and let your boxes connect to other streaming services like Netflix or Hulu or MLB and compete head-on with the Roku's Chromecast and Apple TV as the preferred device.
"Sony's foray is the latest example of how videogaming devices are incorporating more entertainment features as they try to broaden their appeal in the living room. The PlayStation already allows users to buy an array of digital downloads, such as TV shows and movies, and can access streaming services. The company recently said it also plans to launch a service to stream games." These gaming platforms would certainly love to be a cable box , but unlikely as the value of that connection is too important to the cable operator. Still, we find ourselves with multiple OTT boxes connecting to our TV set, side by side with our cable box.
Original content, exclusive to one platform, will prove difficult for both Sony and Microsoft to demonstrate success. It certainly creates added value for the owner of these gaming devices but I contend that their primary motivation for owning is the exclusive games themselves. Besides the fact that the content can only be found on one device, it competes for awareness against other OTT content distributors like Amazon, Netflix, and Hulu, that allow themselves to be watched through multiple OTT platforms as well as through mobile devices. And given the ease of connecting to a show like Netflix's "House of Cards" verse a Playstation show like the newly announced "Powers", consumers will have a far easier time finding and connecting to Netflix.
So does that mean that Microsoft and Sony eventually open up these "exclusive" shows to other platforms? By keeping them behind their own pay walls, they retain exclusive charm, but limit viewership. And once they are syndicated to other sites like an Amazon or Netflix, lose their exclusivity and value to the gaming platform. My advice to both Sony and Microsoft, stick strictly to exclusive games and let your boxes connect to other streaming services like Netflix or Hulu or MLB and compete head-on with the Roku's Chromecast and Apple TV as the preferred device.
Wednesday, March 19, 2014
Pandora Following Amazon Price Increase
With so little backlash to the 25% Amazon Prime price increase, it comes as no surprise that other digital streamers would also follow along. While I speculated that Netflix could easily do the same thing, word comes that Pandora is next to increase its digital subscription. Pandora, currently the largest online music streamer thinks it can increase its rate even more than Amazon's 25%.
"Listeners who now pay $36 a year for the service will be asked to pay $3.99 a month, Pandora said today on its blog. For new subscribers, the price will be $4.99 a month, starting in May." So existing subscribers see a 33% annual increase while new subscribers will pay even more, a 66% increase from earlier pricing. Customers already paying $3.99 will not see an increase but don't be surprised that even those $3.99 customers will find themselves by next year also paying a dollar more each month. And given how well the Amazon increase was delivered, this news will blow over just as quickly.
What does it all mean? As consumers get more and more value and enjoyment from their digital services, the companies can start increasing rates figuring that the value received will leave many to pay the higher amounts. With revenue coming from either subscription or advertising, both must rise for them to continue to succeed. And once consumers are loyal to the value of these services, we pay more in order to stay connected in order to continue to enjoy the content they deliver. As a percentage, the increase seems high, but when seen as about a buck more a month, we are willing to accept it.
"Listeners who now pay $36 a year for the service will be asked to pay $3.99 a month, Pandora said today on its blog. For new subscribers, the price will be $4.99 a month, starting in May." So existing subscribers see a 33% annual increase while new subscribers will pay even more, a 66% increase from earlier pricing. Customers already paying $3.99 will not see an increase but don't be surprised that even those $3.99 customers will find themselves by next year also paying a dollar more each month. And given how well the Amazon increase was delivered, this news will blow over just as quickly.
What does it all mean? As consumers get more and more value and enjoyment from their digital services, the companies can start increasing rates figuring that the value received will leave many to pay the higher amounts. With revenue coming from either subscription or advertising, both must rise for them to continue to succeed. And once consumers are loyal to the value of these services, we pay more in order to stay connected in order to continue to enjoy the content they deliver. As a percentage, the increase seems high, but when seen as about a buck more a month, we are willing to accept it.
Tuesday, March 18, 2014
Who Needs A Smart TV?
With so much video content accessible on the web, we all need our TV's to be smart, but we may not need smart TVs. In a new book on Steve Jobs, we are hearing a different story regarding his interest in selling a smart HDTV. Where the Isaacson biography said it was part of Job's vision, the latest book says it was not the future for Jobs or Apple, because of little profit margin and product longevity.
I have always felt that Apple shouldn't invest in a TV set; make monitors of many sizes, but an integrated, smart, cable ready HDTV set, no. A smart TV becomes less important with the release of many connected products that can turn any monitor into a smart TV. First is the Apple TV box, rumored to be refreshed shortly, that connects to an iTunes library, and other web content. We also have the Google Chromecast and Roku stick, plus gaming platforms from Microsoft and Sony and of course TiVo. And now more news of a connected device from Amazon, long rumored and possibly a must have device for Amazon Prime subscribers.
With so many connected devices, who needs to upgrade their TV set to a smart TV? Unless marketing can demonstrate to the consumer that a smart TV can deliver a better user experience, unlike what they could get from these other boxes, dongles, and sticks, then the added costs may not be justified. Plus, it is about the content and the device that better connects to the sources of that content that matters most to the consumer. Deliver with it a better search experience and recommendation engine, sharing and availability across all your viewing devices, and you have a very valuable connected device. With Amazon's box launch, competition will only get fiercer.
I have always felt that Apple shouldn't invest in a TV set; make monitors of many sizes, but an integrated, smart, cable ready HDTV set, no. A smart TV becomes less important with the release of many connected products that can turn any monitor into a smart TV. First is the Apple TV box, rumored to be refreshed shortly, that connects to an iTunes library, and other web content. We also have the Google Chromecast and Roku stick, plus gaming platforms from Microsoft and Sony and of course TiVo. And now more news of a connected device from Amazon, long rumored and possibly a must have device for Amazon Prime subscribers.
With so many connected devices, who needs to upgrade their TV set to a smart TV? Unless marketing can demonstrate to the consumer that a smart TV can deliver a better user experience, unlike what they could get from these other boxes, dongles, and sticks, then the added costs may not be justified. Plus, it is about the content and the device that better connects to the sources of that content that matters most to the consumer. Deliver with it a better search experience and recommendation engine, sharing and availability across all your viewing devices, and you have a very valuable connected device. With Amazon's box launch, competition will only get fiercer.
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