Native Advertising By John Oliver

A very insightful piece.  Funny, yet true.

Print No Longer Part Of A Multi Media Strategy

Content synergy, enabling companies to diversify and present its media across multiple platforms, seems to have a black sheep in the family.  While it seems crucial that content be accessible wherever and whenever the consumer chooses, there are limits.  The notion of content everywhere, on TV, on mobile, on computer, but not on print.  And companies are jettisoning their print businesses to focus on content everywhere else. 

This spinning off of print businesses has increased of late.  Earlier this year we watched Time Warner unload its Time magazine business into a separate company.  Last week, E. W. Scripps and Journal Communications announced plans to "spin off the Milwaukee Journal Sentinel and Scripps' newspapers into a new publicly traded company, Journal Media Group" while merging their broadcast business into its own business.  And today, Tribune Company is splitting its broadcast operations from its printing business and brands like The Chicago Tribune and Los Angeles Times.  Synergy with print media can't be done according to Scripps, Time Warner, and Tribune. 

Each of these new independent print publishing businesses, competing in what is assuredly a very mature business, have to work alone to create new multimedia partnerships.  Pushing hard to transition from print to digital, from test and photo only to the incorporation of video and audio content from new sources.  Each of their parent companies couldn't see ways to do it across businesses and sharing content internally.  Its time for these print companies to either sink or swim.

What went wrong?  Why couldn't they find internal economies of scale to support the old business model while new ones are established?  Why couldn't synergy work?  I think that part of the problem lies in the fact that public owned companies are hard pressed to grow quickly and anything that slows them down must be jettisoned off.  Until print finds its footing in a digital space, it is a mature business with high costs and an uncertain future.  Public companies can't always afford to nurture and be patient. 

Another possibility is that new digital content companies are already pursing old print customers; consumers can go online today and find the news they need from websites and social networks.  Of course, they lack the credibility or full resources of an established news gathering organization.  And in a world of immediacy, we seem to prefer now our news quickly at our fingertips and in short, easy to digest bursts.  That puts print at a disadvantage until they can better connect to the consumer with a continuous and noticeable update of their news feed.  And consumers have to see enough differentiation to agree to pay a subscription fee as opposed to trolling the web for free content.  That may be the most difficult model to maintain.

So expect more companies with broadcast and print businesses to follow suit.  Spin off their old newspaper and print distribution businesses and focus on their broadcast and digital content instead. 

AMC Nets - Eat Or Be Eaten

With all the media moves being made on the distribution front, Comcast and Time Warner Cable, AT&T and DirecTv, and on the content front with Fox trying to buy Time Warner, consolidation has become the key buzzword.  To remain competitive and to build leverage, strength comes with size and content needs that size to demand higher license fees for its programming. 

Speculation on how will do the acquiring and who will be acquired have included nets like Discovery, Scripps, and AMC Networks. Well it seems that AMC would rather eat than be eaten.  It has mad a bid to own a major piece of BBC America.  Once sold by Discovery Networks, although never owned by them, BBC America has been a small but steady network.  And like AMC, BBC has distributed some original programming, like Orphan Black, that has received critical attention.  These two nets have partnered in the past so such a move could be a good programming fit.

But the question is whether it is enough to maintain independence or simply delay it.  AMC owners, the Dolan family, have demonstrated that they can both buy networks, like Sundance Channel, and also sell networks, including Bravo Network to NBC and fuse to Nuvo.  They spun off both AMC Nets and MSG into separate companies from each other as well as from its cable distribution arm, Cablevision Systems.  So if the timing and dollars are right, AMC Networks could take either approach.  If staying strong is the approach, a BBC America acquisition may not be enough to stay independent. 

Twitter Finds Growth While Losing Money

Sports, especially the World Cup, was kind to Twitter last quarter.  The social media site grew users and usage and exceeded its revenue projections.  It also led, as CEO Dick Costolo suggests, new user engagement "from people checking out special feeds set up by Twitter. This gives Costolo confidence that Twitter can build more 'experiences' around big events and big topics in the future."  Still, the service continues to lose money although at a smaller pace than the previous quarter.

So is the quarter a one shot wonder brought in by a rabid international World Cup interest or can Twitter figure out other ways for users to stay connected to the app ans use it for longer and longer periods?  It certainly is an easy way to connect with fans over sports and live events.  The Emmys are next month and the World Series in October but can they equal the impact that World Cup offered.  Also, they are US centric events while World Cup was a global phenomenon that comes every 4 years.  And while the Olympics are a couple years away, they hardly seem to deliver that same passion. 

Twitter has a lot to be proud of while it continues to focus on monetizing its social engagements.  Too much apparent advertising might spoil the process, too little won't pay the bills. Its a big job for Costolo to keep dollars flowing into the site. 

Windstream Gains Could Help All Telecom

Per the WSJ, thanks to IRS approval, Windstream, a rural telecommunications company, will be able to "spin off some of its telecommunications network assets into an independent, publicly traded real estate investment trust, a move that comes as a wave of U.S. companies look for ways to lower their tax burdens."  That news has lifted the telecom sector resulting in telephone and cable companies, those with a wireline infrastructure, with a potential tax benefit as well.  And whether they also decide to spin off assets into a REIT or not, the stock market expects they will, leading to higher stock prices today. 

How it translates into better service, more investment in the infrastructure, more employment, and other capital investment programs remains to be seen.  Should that be the case, it demonstrates that a heavy tax burden actually reduces the opportunity for new dollars to grow and other benefits to be taken.

Will Apple's iWatch Embrace Mobile Payments

Given the strong ties between Apple and Disney as a result of Steve Jobs and Pixar, we continue to hear that Apple's forthcoming iWatch could include a commerce feature.  Similar to the Magic Bands that are being used in Disney Resorts, the iWatch could potentially offer similar features.  "Within the past few weeks we've been hearing a lot about Near Field Communication (NFC) technology coming to the iPhone and iWatch."  The start perhaps of being able to leave your wallet at home and to pay for goods and services with a flick of the iWatch and a security code. 

The success of the Apple iWatch seems to depend on it being more than what is currently on the market in the smartwatch category.  Time and heart rate monitoring aside, easier communication functionality, mobile payment features, and perhaps a self-winding feature that enables ones own movement to continue to power the watch.  The more functionality and ergonomic design, the better the chance for success. 

Comcast Improving Broadband

On Monday, I wrote about FIOS success in broadband and its use of fiber optics to improve speed and bandwidth.  Historically, cable operators have used coaxial cable to the home which can slow down speeds as more users are attached to the node.  Well as broadband becomes more valuable to a consumer than cable TV, Comcast is now upgrading its infrastructure in certain markets, replacing cable with fiber to the home.  Great for consumers but most likely an expensive upgrade that will need to be reimbursed through higher fees.

According to the Wall Street Journal, Comcast and other cable operators are using fiber in any new builds that they are doing.  Unfortunately, the report goes on to say that Comcast does not have plans to replace all existing coaxial with fiber.  It certainly will get more expensive the longer they wait.  With more consumers adding broadband subscriptions, usage will increase, and speeds will decrease at peak periods on coaxial cable systems.  And with more homes streaming, the situation will continue to worsen.  Fiber systems have higher capacity to handle increased usage. 

In addition to fiber, more investment will be needed in technology that improves streaming capabilities and enhances speed.  Given the limited number of players offering broadband, cable and telco, new competitors are needed to enter the space to help keep pricing in line; otherwise, consumers will only continue to see their data usage bills rise and rise some more.  Demand for fast broadband access will only continue to rise. 

Facebook Conquers Mobile

When Facebook users began to migrate from their pc to smartphone and tablet, shareholders were concerned that the ad model would crumble and Facebook would take a hit.  But given their recent quarterly earnings report, Facebook has embraced the mobile platform and uncovered a growing revenue stream. 

"The social network reported that profit more than doubled and revenue topped estimates for the ninth straight quarter."  It is a world of more than just display advertising; rather, sponsored content with video and a targeted approach.  And as CEO Mark Zuckerberg knows so well, this world changes at an ever quickening pace.  He is making new investments in untried products, all to stay relevant for the long haul.  Products like Oculus VR and services like WhatsApp can potentially bring new sources of revenue back to Facebook. 

For the present, Facebook must contend with user satisfaction and usage.  It is harder to find new users to the service and a challenge to keep them active users too.  Constant reinvention that encourages tune-in rather than pushes current users away.  It is the challenge every time an upgrade is released.  Still, Facebook seems up to the challenge and certainly has the financial resources to invest and grow.  It was a great quarter and as some shareholders have speculated, facebook could now be considered undervalued. 

Apple Patents Smartwatch Called iTime

On the heels of its quarterly earnings, Apple also received a patent on its smartwatch design, labeled iTime.  Of course, this patent was first submitted 3 years ago, an eternity ago in the world of internet connectivity.  Much has changed, digitally, creatively, ergonomically that the smartwatch device could be either a breakthrough or an expensive timepiece.  Certainly, the design elements, as described back in 2011 didn't consider as much.  It seems almost as a placeholder.  While iWatch was a media created brand, thought up as an extension to its iPod, iPhone, iMac, iPad branding format, the release of the patent name iTime will not be the official brand name. 

Many expect Apple to schedule a product announcement release in the late Summer/ early Fall with a sale of the device in October, in time for the Holiday Season.  I suspect neither iTime or iWatch will be the official brand name for this smartwatch device when it is finally announced.  Its announcement would also tie in to one for the next generation iPhone.