Spotify Loses While Taylor Swift Gains

Aside from her musical talent, Taylor Swift could also be described as a marketing expert.  Faced with digital disruption in the music industry, she caused a disturbance in the streaming music industry that helped to drive her album sales.  Fans couldn't listen to her album without paying for it, so they opted to pay for it.  The result, 1.3 million album sales in the first week.  We can only expect for total album sales to go higher.

Certainly Spotify was not truly hurt by the loss of one artist.  The challenge will be that others will follow the Taylor Swift strategy of promotion, limited streaming availability, and other marketing tactics.  Access to current musical content could cause Spotify and others to remodel themselves to maintain subscription growth. 

By the way, Swift's album 1989 was the first album to top a million in its first week in 2014 and currently ranks as the "second-highest seller overall, behind the Frozen soundtrack." 

Dish Network Not Afraid To Drop Channels

Last month, Dish Network dropped most of the Turner Networks, the most notable being CNN, especially given this being an election year.  And while, they reported a small drop in subscribers for the third quarter, the belief was that the loss of Turner nets was not a big deal.  Rather, according to the Wall Street Journal article, "Subscriber growth has been hurt by quality-of-service issues, Dish said, including not meeting its own standards for installations, answering subscriber calls in an acceptable time frame, and equipment reliability. The company warned that these issues could affect revenue growth in the future."

Cost control is a driving factor in the cable game as consumers fight the high cost of cable television by dropping their service for OTT programming.  Dish recognizes the challenge of keeping their subscribers and limiting price hikes, especially those caused by higher license fees.  At the same time, Dish is focusing on the online market with possible plans to build out their own low priced video service.  That may be a hard business to pull off unless Dish can integrate its license fee deals for online content with its satellite deals to assure the best rate for license fees. 

Turner won't be their only problem.  The article reports that the CBS deal will also expire by year end.  Watching what happened to Time Warner Cable after its war with CBS, Dish may be more willing to negotiate with a broadcaster like CBS, then with a cable programmer like Turner. 

Taylor Swift Tells Spotify To Shake It Off

Free does not seem to be a good business model in the music business.  Faced with a digital disruption, music sales have been seriously hurt.  Music stores like Tower Records and HMV are gone and customers who once bought physical copies of music on vinyl or cd are now moving to digital downloads, while others are enjoying the access of music through streaming services.  But artists are also seeing less of a return on their creative expression and Taylor Swift has decided to do something about it.

On Monday, she pulled all of her music from the free streaming service Spotify.  Certainly, the decision was a financial one.  With single and album digital downloads down, and streaming usage up, the economics don't favor the artist.  The limited streaming availability may be part of a supply and demand relationship.  Cut back the supply and demand for Swift music will rise with purchase the more accessible option over streaming. 

And while Spotify has lost access to Swift's entire music library, Mashable notes "that Swift's music, sans 1989, is available on the Apple-owned Beats Music service, a smaller streaming rival whose executives have stressed a desire to secure artist exclusives." How long that lasts or what the business move is behind the arrangement may soon come to light.

As single artist pulling music from Spotify and other streaming music services may not cause major disruptions, but the success of such a move could be the disruption that causes other artists to do the same thing and alter the entire streaming business model.  Spotify needs content to attract its audience; without it, consumers will seek other sources.  The biggest concern though for the artists are that such a move leads consumers back to the Napster days of illegal downloads.  Some revenue may be better than none at all. 

CNET Adds Print To The MultiPlatform Mix

It sounds a little bit old school, but CNET, the technology website wants to recapture attention with a new quarterly print magazine.  Unfortunately, CNET's owner CBS no longer has a magazine publishing arm, so its back to square one.  But it may just recapture the sparkle in CNET that it needs.

So what is the broader market strategy for CNET.  According to the NY Times, "The arrival of CNET in print is indicative of a trend: Brands that began digitally are turning every day into #ThrowbackThursday by adding versions in traditional forms."  But print is somewhat of an odd partner for a technologically oriented brand, one that already has its own You Tube channel.  Would it have made more sense to build out a tablet magazine model?  Its choice of outlets for magazine distribution, including Target, Walmart, and Costco, may indicate its desire to get the CNET name more known across Middle America.  Brand awareness drives more attention then back to its website.

The move to the magazine though is built on synergy.  The inaugural Winter 2014 cover includes LL Cool J, star of the CBS drama NCIS: Los Angeles.  With a first issue circulation of 200,000, the financial risk may also be minimal; the reward more impactful given the number of stories being written just as the issue hits the stands.   Food Network and HGTV have found relative success with their respective magazine brands and with the departure of the Macworld magazine, there may just be room for the CNET magazine to thrive.  So hail to the multi-platform strategy; the more available you are, the easier it may be to grow.   

Scripps Pushes Branded Content Across Its Networks

Its hard to know if viewers are watching commercials that invade their shows and movies.  Those two minute or longer breaks are the perfect time to switch the channel, go to the bathroom, look away from the TV to a tablet or smartphone, and other distractions to avoid watching those dreaded ads.  But make the advertising part of the show without hurting the credibility or momentum of the plot, and it becomes a very compelling win-win outcome.  Branded content, native advertising, and sponsorship done well can work great; done poorly, it is one long ad.

It seems that Scripps has found a terrific content sponsorship opportunity to coincide with Veterans Day.  Per today's NY Times, Scripps "is preparing an hourlong special — centered on the celebration of the Hawaiian homecoming of a wounded serviceman — that is to run on all six of its cable channels and be sponsored by major marketers like ConAgra Foods, Liberty Mutual Insurance and Union Pacific." As an indication of production integration into the format of the program, "There is a glimpse during the trailer of a scene from the special in which members of the military are served food bearing logos of a ConAgra brand, Marie Callender’s, that became the presenting sponsor of 'A Hero’s Welcome' as part of a cause-marketing initiative, the Comforts From Home Project, which benefits the U.S.O. and the USO2GO program."

A great cause, a great partner, and a great commitment to an important segment of our population.  Most important, it seems that the use of the product does not overwhelm the core element of the show.  This content sponsorship and promotion nicely extends across all of Scripps' available platforms.  Using its media synergy, ads are also being placed on its two magazine brands.  Hopefully, interest in the programming will translate to viewership and more branded content opportunities will emerge.

Amazon Still Pursuing Hardware At Their Own Peril

Last Friday, I wrote about Amazon's identity problem with their hands in too many places and their financial results deemed disappointing.  They have clearly embarked on a strategy of forsaking short term results for long term opportunities.  And they continue to invest across the board, sometimes at the risk of losing money. 

Hardware products continue to attract the attention of CEO Jeff Bezos.  According to the NY Times, "Amazon now looks to be preparing a full-scale ground invasion of the rest of the gadget landscape. In addition to a new Kindle reader, this year the company entered two new device categories, and it expanded the rest of its hardware lineup."   Their latest release is the Fire TV Stick, a Chromecast-like device to distribute OTT content on your TV.  At the same time, they are updating their Kindle e-reader and tablets.  Unfortunately, their attempt to get market share in the competitive mobile phone arena has failed.  Again from the NY Times, "Amazon disclosed last week that it was sitting on $83 million in unsold Fire Phones, and would be taking a $170 million write-down on that program."  With Apple and Samsung releasing larger mobile phones, many see cannibalization of  the tablet market. In fact, while Apple iPad sales slow, their iMac sales have grown. 

Is hardware the right business for Amazon; The e-reader market helped them to drive e-book sales.  But in the world of tablets, smartphones, and OTT, Amazon may not be so lucky.  Their strength as an e-commerce retailer might be better suited working with the Apple's Samsung, and Google, not competing against them. 

Digital Driving NFL Offenses, but Penalties Are Key

A terrific read in today's Wall Street Journal on technology's effect on NFL offense playmaking.  Where the sidelines once relied on photographic print outs to make their way down to the field, they now have tablets, courtesy of a Microsoft sponsorship putting their Surface tablets on the sidelines.  Instantaneously, players can see not only images of the last play but actual footage as well.  For the offense, it seems to have had an effect on yardage and scores. 

And according to the article, it has been a boost mainly to the NFL offense.  While tablets have been on the field for four years, according to the report, somehow this year is different.  I'm not sure that I believe that having this access favors the offense.   The defensive side of the ball gets the same information and can make similar adjustments.  As a fan of the NFL, I believe that it is the rule changes that have had a bigger effect on playmaking then tablets on the sideline.  New rules on defensive holding and illegal contact give a big advantage to offenses.  Penalties can enable offenses to get a fresh set of downs.  The NFL recognizes that more points on the scoreboard tends to make games more exciting, resulting in more viewership and fan interest.  With more penalties being called on the defense, the offense has more success. 

Yes, the technological changes have helped the offense, but they are there to help the defense too. Is it giving the offense an unfair advantage.  I'm not so sure. 

Layoffs Abound Across Cable Networks

Mergers across cable operators, the fear of cord cutting, and disruptive changes in distribution and content are driving a rise in layoffs in the cable industry.  This summer, we heard of layoffs at Fox and Al Jazeera America, last month it was CNN, Cartoon, TNT and Scripps (HGTV, Food), last week it was AMC Networks ( home of AMC, IFC, WE and Sundance), and today it is HBO.  Not surprising in that both CNN and HBO are part of the Time Warner and Turner conglomerate.  With layoffs hitting 10% of total staff, it is clear that consolidation and disruption in the cable and media industry are affecting the size of the workforce. 

It doesn't take a fortune teller to recognize that more layoffs will come in this fourth quarter.  The announcement that AMC has bought a 49.9% stake in BBC America with plans to run that cable network will likely come with additional layoffs too.  NBC and Disney saw their share of layoffs last year but could see more in the future.  This is not a knock on any of these companies; the industry has followed the classic life cycle curve and as it matures, less growth means less labor.  This change is inevitable but the hope is that from disruption springs new job opportunities for all. 

DVR Fails For SNL, While Yahoo! Screen Delivers

Our cable dvr is set to automatically record certain programs, but doesn't always succeed.  In most cases, it cuts off programs before they end and every now and then fails to record at all.  Such was the case when I turned to the dvr on Sunday to catch up on last night's Saturday Night Live only to find that it didn't record.  I looked through the history but it failed as well to tell me what went wrong.  And going to our cable's on demand function was no better as the SNL episode was not immediately accessible.  But thanks to streaming, I had another option.

Opening up the iPad, I clicked on Yahoo! Screen and there was every skit and all the musical performances from the show.  And while You Tube carries certain clips from the show, it doesn't show it all.  The best part watching was that I did not have to endure one commercial to watch; the worst part was that buffering created certain delays that forced refreshing in order to watch.  Once each clip played, I was shown a short promo to watch SNL on NBC  and then the next clip would automatically start to play.  Yahoo! Screen proved to be a great solution to a cable dvr catastrophe.