Apple recently announced its iPhone 6 sales and the increase in share in the smartphone market. But whether it is the iPhone or iPad or soon to be released Apple Watch, what makes these products run are applications and content. And with iTunes and the App Store, this software marketplace offer s the fuel to make Apple's technology that much more valuable.
Apple certainly knew the value of the App Store and we know too. According to Mashable, "Apple says billings for its App Store jumped 50% year-over-year in 2014,
suggesting App Store sales totaled at least $15 billion for the year,
based on the more than $10 billion in sales it did in 2013." How many companies would love to have a $15 billion dollar business that is growing at a rapid rate. And with new iPhones and other new products on the way in 2015, the App Store should only continue to excel. What is also amazing is that this little side business must have a huge margin with minimal operating costs.
And despite not being a huge percentage of Apple's total business, it is becoming a substantial one on its own. As more consumers embrace the Apple ecosystem, more consumers will rely on the online Apple store for software applications and content to keep running their technology. And that is what the secret sauce is all about.
Thursday, January 8, 2015
How High Def Should A Television Be
When Hi Definition TV screens came on the market, it was a quantum leap in television viewing for consumer. No longer were we confined by a 4:3 panel, now with a wider screen and more pixels, pictures were sharper then ever. We faced a choice between a plasma screen and LCD and as competition increased, prices dropped. HD TV was a revolution in the TV experience.
But since then, improvements in the TV screen have been less than enchanting. With the push toward 3D, we pushed back, not willing to invest in 3D goggles to put over our faces. And at this year's CES, the push is on for the next evolution of high def, ultra hi def or 4K. But can a picture get any sharper?
It took a number of years for content creators to upgrade their programs to HD and most decided to not even bother with 3D. So will content companies invest again to upgrade to an ultra HD output in order for these new TV sets to be worth their price? Certainly the early adopters will pay more for a big screen ultra HD TV set, but the average consumer will not. Even as Ultra HD prices drop, current HD sets will likely drop even more. And today's millennials are consuming more content through smaller mobile tablets and smartphones anyway. For me, I don't have the same desire to own an Ultra HD or 4K set like I did when HD TV were first introduced. Eventually content will be created for 4K, but I suspect that adoption and sales of 4K sets will take a much longer time to occur.
But since then, improvements in the TV screen have been less than enchanting. With the push toward 3D, we pushed back, not willing to invest in 3D goggles to put over our faces. And at this year's CES, the push is on for the next evolution of high def, ultra hi def or 4K. But can a picture get any sharper?
It took a number of years for content creators to upgrade their programs to HD and most decided to not even bother with 3D. So will content companies invest again to upgrade to an ultra HD output in order for these new TV sets to be worth their price? Certainly the early adopters will pay more for a big screen ultra HD TV set, but the average consumer will not. Even as Ultra HD prices drop, current HD sets will likely drop even more. And today's millennials are consuming more content through smaller mobile tablets and smartphones anyway. For me, I don't have the same desire to own an Ultra HD or 4K set like I did when HD TV were first introduced. Eventually content will be created for 4K, but I suspect that adoption and sales of 4K sets will take a much longer time to occur.
Wednesday, January 7, 2015
Digital Continues To Hurt DVD Sales, VOD Down Too
While digital media sales continue to grow, DVDs are not. It seems that consumers are fully adopting digital sales and subscription media over ownership of DVDs and other physical media. Not surprising as more televisions are internet ready, more computers have dropped the DVD slot, and consumers are enjoying easy access of content through subscription services like Netflix. In fact, DVDs and blu-ray discs were down over 10% from last year. That trend seems likely to continue.
It should be noted that when all the figures of digital and physical media are totaled up, "Total home-video spending was $17.8 billion, dropping 1.8 percent from 2013, according to the report in LA Biz. This total decline may be partly due to a weak box office, according to the report, but other factors may also be a result. Consumer spending in general and less dollars focused on entertainment verse other needs may also be to blame. Like cord cutting and cord shaving, consumers may be using subscription services and digital to pay less but get more content.
Another interesting note from the report, while consumers have pushed back on physical formats, they also pushed back on VOD. Total sales fell 6.7% from last year. Again cord cutting and cord shaving may be to blame with consumers preferring to watch on mobile devices and getting access to programming via You Tube, Netflix, Hulu, Amazon, and other OTT outlets. Given the push of these subscription services, I would not be surprised to see VOD numbers to continue to drop in 2015. Until cable operators create an alternative online platform that is added value to its wired approach and touts a true TV Everywhere mentality, VOD will only continue to find a backseat to digital.
It should be noted that when all the figures of digital and physical media are totaled up, "Total home-video spending was $17.8 billion, dropping 1.8 percent from 2013, according to the report in LA Biz. This total decline may be partly due to a weak box office, according to the report, but other factors may also be a result. Consumer spending in general and less dollars focused on entertainment verse other needs may also be to blame. Like cord cutting and cord shaving, consumers may be using subscription services and digital to pay less but get more content.
Another interesting note from the report, while consumers have pushed back on physical formats, they also pushed back on VOD. Total sales fell 6.7% from last year. Again cord cutting and cord shaving may be to blame with consumers preferring to watch on mobile devices and getting access to programming via You Tube, Netflix, Hulu, Amazon, and other OTT outlets. Given the push of these subscription services, I would not be surprised to see VOD numbers to continue to drop in 2015. Until cable operators create an alternative online platform that is added value to its wired approach and touts a true TV Everywhere mentality, VOD will only continue to find a backseat to digital.
Tuesday, January 6, 2015
Will Cord Cutters Buy Sling TV?
At the CES, Dish announced the release of Sling TV, a $20 a month bundle of cable networks that include ESPN, Disney, Discovery, HGTV, and Food. Dish isn't worried that their customer base will switch to this lower priced service and I doubt that cable operators will worry either. Despite being at a very attractive price point, the new service will not include any broadcast networks, but does include an odd assortment of cable nets, with a little bit for every interest. I'm not sure how appealing the service will be.
Sling TV will include ESPN, but that might not be enough for the real sports fan who would want all the regional and national sports channels. The sitcom and drama fan might like TBS and TNT, but they would also want more from other channels like AMC and USA. The news junky gets CNN but nothing else. And homes with children might like that Disney is being offered but they most likely would want Nick and Sprout and others. For me, Sling TV is a little bit for everybody, not enough for anybody. It looks more like a starter package to upgrade later with a cable operator.
As to the cord cutters and nevers, Sling TV may be the appetizer to return them to full cord status. But for the younger demo raised on You Tube, Netflix, and other OTT programming, Sling TV won't offer much incentive to purchase the subscription based service. And while an OTT service of linear cable nets sounds nice, these same consumers have become more accustomed to on demand of programming they choose to watch at the time they determine. Will Sling TV become an instant success; I doubt it and will have to wait and see how it is received.
Sling TV will include ESPN, but that might not be enough for the real sports fan who would want all the regional and national sports channels. The sitcom and drama fan might like TBS and TNT, but they would also want more from other channels like AMC and USA. The news junky gets CNN but nothing else. And homes with children might like that Disney is being offered but they most likely would want Nick and Sprout and others. For me, Sling TV is a little bit for everybody, not enough for anybody. It looks more like a starter package to upgrade later with a cable operator.
As to the cord cutters and nevers, Sling TV may be the appetizer to return them to full cord status. But for the younger demo raised on You Tube, Netflix, and other OTT programming, Sling TV won't offer much incentive to purchase the subscription based service. And while an OTT service of linear cable nets sounds nice, these same consumers have become more accustomed to on demand of programming they choose to watch at the time they determine. Will Sling TV become an instant success; I doubt it and will have to wait and see how it is received.
Friday, January 2, 2015
TV Viewing On Your Terms
According to the Leichtman Research Group, "
76%
of U.S. homes have a DVR, subscribe to Netflix or use video-on-demand from a
cable or telco provider …26% of homes use two of those services, and 11% use
all three ". As for my household, we are in the 11%. We are getting more comfortable with technology in the home and more apt to use it more frequently. Income levels certainly play a part in this research study, as indicated. But I would also like to know if geography also is an issue. is DVR, VOD, and Netflix usage higher in major cities than in rural markets. And is Netflix access taken more through broadband access or by cellular. Clearly, the study demonstrates a trend toward ubiquitous behavior.
(76%)
of U.S. homes have a DVR, subscribe to Netflix or use video-on-demand
from a cable or telco provider - See more at:
http://www.multichannel.com/news/technology/76-homes-have-dvr-netflix-or-use-vod-study/386584#sthash.zFv2q2Xu.dpuf
(76%)
of U.S. homes have a DVR, subscribe to Netflix or use video-on-demand
from a cable or telco provider - See more at:
http://www.multichannel.com/news/technology/76-homes-have-dvr-netflix-or-use-vod-study/386584#sthash.zFv2q2Xu.dpuf
Friday, December 26, 2014
We've Got A Security Problem Here
2014 may best be known as the year of the hacker. Most prominent has been the hacking of Sony, causing personal emails to be shared, a movie to be denied, and threats to be held on management. And most recently, Sony's Playstation network and Microsoft's XBox network have both been hacked as well, resulting in an overloading of those systems. Gamers are furious and we can all fear that 2015 will consist of even more cyber security problems.
The simple truth is that our internet security is at risk for all of us. As long as we are connected to the web, we are subject to potential hacking of our private data. And there are so many different ways that hackers try to get us, from bogus emails to tapping our devices when we use an open WIFI connection. Secure is simply not secure enough. And from individuals to huge corporations like Sony, we have huge security issues.
For some, the idea of hacking is just a game, a challenge to see if you can break the code. But for others, the purpose of hacking may be more sinister. Locks and passwords may not be enough; if there is a will, there seems to always be a way to break the code. Isn't that what the movie, The Imitation Game, is all about. Whether for good or evil purposes, many love the idea of a good challenge. And we are constantly facing threats to our cyber data.
2014 may represent a pivotal mark, but it wasn't the first. Last year, it was Edward Snowden that shared classified government information. We also had the hacking of financial data from The Home Depot and Target. And next year, I am quite certain that more corporations will face similar hacking issues. We should all be worried; unfortunately, as long as their is secrecy and privacy, there will be others trying to expose it. For good or evil purposes, it will be a constant in our lives.
The simple truth is that our internet security is at risk for all of us. As long as we are connected to the web, we are subject to potential hacking of our private data. And there are so many different ways that hackers try to get us, from bogus emails to tapping our devices when we use an open WIFI connection. Secure is simply not secure enough. And from individuals to huge corporations like Sony, we have huge security issues.
For some, the idea of hacking is just a game, a challenge to see if you can break the code. But for others, the purpose of hacking may be more sinister. Locks and passwords may not be enough; if there is a will, there seems to always be a way to break the code. Isn't that what the movie, The Imitation Game, is all about. Whether for good or evil purposes, many love the idea of a good challenge. And we are constantly facing threats to our cyber data.
2014 may represent a pivotal mark, but it wasn't the first. Last year, it was Edward Snowden that shared classified government information. We also had the hacking of financial data from The Home Depot and Target. And next year, I am quite certain that more corporations will face similar hacking issues. We should all be worried; unfortunately, as long as their is secrecy and privacy, there will be others trying to expose it. For good or evil purposes, it will be a constant in our lives.
Tuesday, December 23, 2014
Another Year Ends, Another Network Blackout
What would an end of year be if a cable operator and a cable network weren't in the midst of a license fee renewal. It seems that it is a constant occurrence with always the same outcome, a network or two gets dropped for a period of time and then it is reinstated at a later date. This year the battle is between Dish and Fox regarding just two of its channels, Fox News Channel and Fox Business Network. As of this moment, carriage agreements have expired and both have been pulled from the Dish line-up.
And like before, there is the necessary pr and paid advertising telling customers their side of the story in a time where consumers are simply tired of being part of every battle. Frankly a no win scenario. Some consumers switch cable operators as a result of the loss of channels, most remain. Dish and its customers are used to such drops and re-launches. Remember the AMC fight, the CNN battle? The dance is ongoing with short term suffering for fans of those respective networks.
Of course there are two sides to every story and the cost of cable programming certainly drives at the heart of such negotiations. Operators will have a hard time paying to carry every possible linear network; those costs cause cable bills to rise. Sports are a huge component of those costs, yet those networks are the hardest to drop. Also because most major networks are owned by multi network businesses, leverage becomes a big factor in driving all of its networks to be launched. Don't think Fox won't use pressure from its Fox Broadcasting, Fox Sports, FX, and others to drive a Fox News and Fox Business renewal. Size does matter in these fights. For now, Dish customers have lost access to a couple channels; in the long run, they will be renewed and added back to the line-up. It is how the dance is done.
And like before, there is the necessary pr and paid advertising telling customers their side of the story in a time where consumers are simply tired of being part of every battle. Frankly a no win scenario. Some consumers switch cable operators as a result of the loss of channels, most remain. Dish and its customers are used to such drops and re-launches. Remember the AMC fight, the CNN battle? The dance is ongoing with short term suffering for fans of those respective networks.
Of course there are two sides to every story and the cost of cable programming certainly drives at the heart of such negotiations. Operators will have a hard time paying to carry every possible linear network; those costs cause cable bills to rise. Sports are a huge component of those costs, yet those networks are the hardest to drop. Also because most major networks are owned by multi network businesses, leverage becomes a big factor in driving all of its networks to be launched. Don't think Fox won't use pressure from its Fox Broadcasting, Fox Sports, FX, and others to drive a Fox News and Fox Business renewal. Size does matter in these fights. For now, Dish customers have lost access to a couple channels; in the long run, they will be renewed and added back to the line-up. It is how the dance is done.
Friday, December 19, 2014
Apple iPhone Portends Good Things To Come
With Apple's release of the iPhone 6 and 6 Plus, it regained market interest and put tons of pressure on other smartphone companies. The latest iPhone release could also generate over 70 million units just in this latest quarter. And with that number on the street, Apple should see even more good news in 2015.
For one, the release of the Apple iWatch likely requires the iPhone 6 to fully function. With 70 million plus in sales, the iWatch could prove quite popular. In addition, Apple Pay also requires the latest iPhone. With security issues facing us today and credit card numbers getting hacked as well, Apple Pay will enjoy increased acceptance and usage. And that spells another driver in Apple revenue next year. Lastly, more converts to the iPhone means more usage of the app store and growth in iTunes revenue. A Beats music subscription might just attract new users too.
Beyond the iPhone and another model in late 2015, Apple will surely update its laptops, Apple TV, and iPads. With schools embracing Apple computers and tablets and IBM partnering in enterprise applications, Apple can make significant inroads in new industries. And lastly, Apple might actually surprise some of us with an Apple smart television set. You never know.
For one, the release of the Apple iWatch likely requires the iPhone 6 to fully function. With 70 million plus in sales, the iWatch could prove quite popular. In addition, Apple Pay also requires the latest iPhone. With security issues facing us today and credit card numbers getting hacked as well, Apple Pay will enjoy increased acceptance and usage. And that spells another driver in Apple revenue next year. Lastly, more converts to the iPhone means more usage of the app store and growth in iTunes revenue. A Beats music subscription might just attract new users too.
Beyond the iPhone and another model in late 2015, Apple will surely update its laptops, Apple TV, and iPads. With schools embracing Apple computers and tablets and IBM partnering in enterprise applications, Apple can make significant inroads in new industries. And lastly, Apple might actually surprise some of us with an Apple smart television set. You never know.
Thursday, December 18, 2014
Dish Finds a Frenemy With Netflix
Demonstrating that cable and streaming content can live side by side, Dish Network has become the first major cable distributor to include Netflix on its set top box. And like HBO or Showtime, Netflix will be treated as an add on package, purchased separately. Consumers though don't need to jump from one box to another to enjoy all the content they want. By including the Netflix app, Dish gives its customers convenience and simplicity in watching whatever content they choose.
Per the Dish press release, "Additionally, in the future, titles available on Netflix could be integrated into the search functionality across live, recorded and Video On Demand programs for both the Hopper as well as DISH’s forthcoming OTT service." To me, a fully integrated search feature encompassing all content on Netflix and cable would be truly valued by consumers. Partnering with Netflix, Dish demonstrates that consumers simply want more content wherever accessible and that consumers will not drop Dish but value the content that is being offered through the set top box.
Per the Dish press release, "Additionally, in the future, titles available on Netflix could be integrated into the search functionality across live, recorded and Video On Demand programs for both the Hopper as well as DISH’s forthcoming OTT service." To me, a fully integrated search feature encompassing all content on Netflix and cable would be truly valued by consumers. Partnering with Netflix, Dish demonstrates that consumers simply want more content wherever accessible and that consumers will not drop Dish but value the content that is being offered through the set top box.
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