How many slices of a pie can you make before the serving size gets too small? Cable operators have impressed us with the number of channels they offer, creating value in aggregating so much content for one low price. But with the advent of on demand programming and the rise in streaming, channels have become a bit dated. Asked to define a network by the shows they offer and you can become glassy-eyed trying to figure it out. As viewers, we simply want to watch and aggregators like Netflix allow us to watch our Mad Men and other shows without caring what "channel" it is on.
Companies with multiple channels under their ownership air shows across those channels to gain audience interest. Most recently, the Jim Gaffigan Show appeared not only on TV Land, but Comedy Central as well. These networks are owned by Viacom. Other media companies have followed similar strategies. Orphan Black was seen across AMC Networks and BBC America Channels.
With so many channels asking for license fees, cable operators realize they now must cut back to save on costs. Viewers watch shows, not 'channels' these days, and aggregators like Netflix, Hulu, and Amazon are capturing consumers with a single source for watching episodes or movies. No channel names involved. And so it may be time to consolidate and drop channel brands. Channels have become too fragmented so that no one network has a sufficiently unique brand. Channel individuality has been lost as each tries to reach the same demographic to drive advertising sales.
Cable operators realize too that a skinnier bundle with less channel offerings, combined with on demand and streaming capability through their menu, will keep price points more attractive and subscription from dropping.
It may now be time for the media industry to drop nets and better segment their brands. Can MTV and VH1 be combined, Can A&E, History, and H2 become one brand; Can IFC, Sundance, and BBC be combined. Could TBS, TNT, TruTV become one brand? And will independent networks like GSN, Ovation, WFN, and others find that they will also fall off the cable line-up. It might just be time to watch network fragmentation evolve back into fewer more sustainable brands. r they might go away altogether ac consumers cut the cord to cable TV and seek only their programs on other aggregator platforms.
Friday, August 7, 2015
Thursday, August 6, 2015
It's The End Of The Bundle As We Know It
With apologies to R.E.M., it looks like the end of the bundle as we know it (and I feel fine). Prophetic perhaps, but the stock market these last couple of days sure feels like the bundle today is broke and that media companies will be the losers.
For cable, the bundle was originally laughed at when Cablevision first introduced a triple play bundle of cable, phone, and broadband for under a hundred dollars a month. And with an assortment of cable networks, consumers felt like they got a good deal. Other cable companies scoffed but soon found themselves following along as it proved to be a very successful marketing strategy.
Fast forward almost 20 years and cable subscription fees have grown faster than inflation. Cable operators kept aggregating more and more networks to their line-up and license fees of all networks kept rising. And so did our cable bills. We may have enjoyed the wide variety of programming and the rise of on demand viewing, but we were also inundated with more and more commercials. For consumers, a breaking point was near and the solution has been cord cutting.
But in order to enjoy content, alternatives also had to be found. The quantum leap happened as Netflix emerged with a broadband streaming solution at a price point of under $8 a month. Amazon Prime, Hulu, and others saw a shift occurring and have found a way to attract viewers with low fees, syndicated and well known content, and as to really entice viewers, original content to drive adoption. For price/value, cable was losing the race.
Unfortunately cable networks are not about to lower their license fees that they charge operators. So cable operators have now started to drop networks off their basic line-up and create skinnier versions at lower costs. For some cable networks, it is a double hit; lost subscribers first due to cord cutting, and second, drops in their subscriber base due to being dropped from basic levels of service. With lower subscriber bases, advertising revenue creates a third hit to the networks bottom line. Verizon FIOS has announced such a move and Charter Cable is not far behind.
Today, the bundle is not the technology choices; we have essentially watched as the triple play can essentially be managed through the broadband fiber with web, streaming, and VOIP. The bundle is now the aggregated content that we are consuming across our devices. And price elasticity is playing a huge part. AT&T, now with DirecTv in its stable, is trying its own bundle of cellular and satellite to drive subscription. Netflix, Amazon, and Hulu continue to advance with more original content to their bundle of content.
Media networks that own their content should find that they will survive cord cutting with more platform alternatives to place their content. And branded opportunities within the content will drive forward more advertising revenue as well. For cable operators, the bundle as we know it has changed; Driving value of the fiber pipeline to the home, services that rely on the broadband pipe, and TV Everywhere content accessibility at more competitive price points will keep the business thriving.
For cable, the bundle was originally laughed at when Cablevision first introduced a triple play bundle of cable, phone, and broadband for under a hundred dollars a month. And with an assortment of cable networks, consumers felt like they got a good deal. Other cable companies scoffed but soon found themselves following along as it proved to be a very successful marketing strategy.
Fast forward almost 20 years and cable subscription fees have grown faster than inflation. Cable operators kept aggregating more and more networks to their line-up and license fees of all networks kept rising. And so did our cable bills. We may have enjoyed the wide variety of programming and the rise of on demand viewing, but we were also inundated with more and more commercials. For consumers, a breaking point was near and the solution has been cord cutting.
But in order to enjoy content, alternatives also had to be found. The quantum leap happened as Netflix emerged with a broadband streaming solution at a price point of under $8 a month. Amazon Prime, Hulu, and others saw a shift occurring and have found a way to attract viewers with low fees, syndicated and well known content, and as to really entice viewers, original content to drive adoption. For price/value, cable was losing the race.
Unfortunately cable networks are not about to lower their license fees that they charge operators. So cable operators have now started to drop networks off their basic line-up and create skinnier versions at lower costs. For some cable networks, it is a double hit; lost subscribers first due to cord cutting, and second, drops in their subscriber base due to being dropped from basic levels of service. With lower subscriber bases, advertising revenue creates a third hit to the networks bottom line. Verizon FIOS has announced such a move and Charter Cable is not far behind.
Today, the bundle is not the technology choices; we have essentially watched as the triple play can essentially be managed through the broadband fiber with web, streaming, and VOIP. The bundle is now the aggregated content that we are consuming across our devices. And price elasticity is playing a huge part. AT&T, now with DirecTv in its stable, is trying its own bundle of cellular and satellite to drive subscription. Netflix, Amazon, and Hulu continue to advance with more original content to their bundle of content.
Media networks that own their content should find that they will survive cord cutting with more platform alternatives to place their content. And branded opportunities within the content will drive forward more advertising revenue as well. For cable operators, the bundle as we know it has changed; Driving value of the fiber pipeline to the home, services that rely on the broadband pipe, and TV Everywhere content accessibility at more competitive price points will keep the business thriving.
Tuesday, August 4, 2015
Could You Live Without Your Voicemail
According to a number of articles, Apple is testing ways to have voicemails transcribed into text. Currently, my Comcast phone service does the exact same thing. Messages left on my home phone, including reminders from CVS that my prescription is ready gets transcribed and sent to my Apple iPhone. It certainly enables me to delete the voicemail without ever having to listen to it.
Of course, not all efforts at transcribing go off perfectly. It always seems that the Comcast service mishears a portion of some messages and that requires me to listen to get the true message. In those cases, I am grateful that I have both options. That Apple wants to offer a similar service for cellphone voicemails would be a nice option; still, I wouldn't want to eliminate the original voicemail just yet. Will a SIRI transcription service eventually replace voicemail entirely. The sad truth is that text loses inflection, it misses humor or sarcasm or just the unique marvel of each person's unique speaking habits. For commercial voicemails, text is preferred; but I still like hearing the voices of friends.
Of course, not all efforts at transcribing go off perfectly. It always seems that the Comcast service mishears a portion of some messages and that requires me to listen to get the true message. In those cases, I am grateful that I have both options. That Apple wants to offer a similar service for cellphone voicemails would be a nice option; still, I wouldn't want to eliminate the original voicemail just yet. Will a SIRI transcription service eventually replace voicemail entirely. The sad truth is that text loses inflection, it misses humor or sarcasm or just the unique marvel of each person's unique speaking habits. For commercial voicemails, text is preferred; but I still like hearing the voices of friends.
Friday, July 31, 2015
Even Digital Content Is King
Not satisfied with owning a leading broadcast network, cable networks, and a movie studio, NBC Universal and its parent company Comcast want to own digital content creation companies too. The latest on their radar are Buzzfeed and Vox Media. Buzzfeed has positioned itself as a leader in creating social commentary, news, and entertainment with an eye to creating eye-catching, shareable, viral content. Vox Media has created some well known sports blog along with its recent acquisition of re/code. In an ironic twist, it is re/code passing on some of this news on the potential partnership plans.
For NBCUniversal, adding a stable of digital content companies to its video rodeo seems like a good fit. Synergies between networks, shows, advertising, and promotion could all help drive viewership and usage gains. But synergy is also a tricky animal that in many cases culture and personal politics can end up building roadblocks to success. Done well, digital content, like any other content, is king and as many believe is what drives consumers to certain platforms. Should this deal succeed, it will be fun to watch how it is utilized.
For NBCUniversal, adding a stable of digital content companies to its video rodeo seems like a good fit. Synergies between networks, shows, advertising, and promotion could all help drive viewership and usage gains. But synergy is also a tricky animal that in many cases culture and personal politics can end up building roadblocks to success. Done well, digital content, like any other content, is king and as many believe is what drives consumers to certain platforms. Should this deal succeed, it will be fun to watch how it is utilized.
Wednesday, July 29, 2015
Yelp Needs Help
As far as the stock market is concerned, Yelp is the sound a dog makes. Earnings don't look so good and the stock price is falling drastically. But the problem isn't that consumers aren't using the service or that revenue is falling, the opposite is true; the problem is that they are not growing fast enough. I am an active user of Yelp. I use it for restaurant suggestions, I use it for hotels. I even just looked at online reviews on Yelp for local car dealers. It is a useful and practical service. But I can see on the business side, the difficulty they must have in growing revenue. As it's main charm is social media, users posting personal reviews, companies with great reviews don't need to advertise on it as social media is providing a credible ad message without them paying for it. And a company with bad reviews may simply want to not advertise on a site that is badmouthing it. Rather, they can just respond to specific reviews. So the old adage, 'why buy the cow if the milk is free', seems to come into play with Yelp.
It may be that the future success of Yelp comes from synergy it can create by merging with another entity. Could Google, Facebook, or Twitter be interested in joining forces with yelp/ It seems that a partner is needed if Yelp is to have future financial success. For now, I will continue to use Yelp; I love it and appreciate getting important feedback and reviews
on different businesses.
Tuesday, July 28, 2015
What If ESPN Became A Stand Alone Service
Disney/ESPN CEO Bob Iger admitted earlier this week that ESPN could one day offer itself like HBO Now. Given the loss of cable subscribers, primarily due to cord cutting, Iger expects that they could recapture homes with a streaming sports service. But sports content is one of the most expensive line items resulting in nets like ESPN charging the highest amounts for a cable network compared to other cable license fees. And it is those costs that consistently rise annually resulting in cable bills rising as well. That is one of the likely causes of cord cutting.
So would non-cable customers pay about $30 a month, according to the Huffington Post article, for a streaming ESPN service? Those consumers that cannot live without their sports are not likely the ones cutting the cable cord. So I find it highly doubtful that consumers would pay that much. It seems that $10 per month might be the threshold that some would pay. I say that given that Netflix and Hulu are able to get away with fees at that level. Overall, sports fans tend to retain a cable subscription, while non sports fans are the bigger cord cutters.
In the meantime, ESPN will likely follow more austere cost cutting measures, with a larger percentage going to the big sport leagues, to counter the loss of cable subscribers and a drop in revenue. The rising costs of sports programming, leagues, players, games, TV rights, etc. is making access to these games, through broadcast or in-person tickets, more expensive and harder to enjoy. Over time, fan interest continues to fall, and consumers will be harder to reach.
So would non-cable customers pay about $30 a month, according to the Huffington Post article, for a streaming ESPN service? Those consumers that cannot live without their sports are not likely the ones cutting the cable cord. So I find it highly doubtful that consumers would pay that much. It seems that $10 per month might be the threshold that some would pay. I say that given that Netflix and Hulu are able to get away with fees at that level. Overall, sports fans tend to retain a cable subscription, while non sports fans are the bigger cord cutters.
In the meantime, ESPN will likely follow more austere cost cutting measures, with a larger percentage going to the big sport leagues, to counter the loss of cable subscribers and a drop in revenue. The rising costs of sports programming, leagues, players, games, TV rights, etc. is making access to these games, through broadcast or in-person tickets, more expensive and harder to enjoy. Over time, fan interest continues to fall, and consumers will be harder to reach.
Monday, July 27, 2015
Podcasts Make for Great Listening
First of all, I admit to not having Sirius in my car. With no daily commute driving, most trips tend to be short, with the exception of vacation driving. My friends, on the other hand, with longer commutes, love to share the latest on Howard Stern, a Sirius favorite. So without Howard, most trips are made with the news station on or a pop radio format playing the same songs over and over and over again. No matter how good a song they might be, they start to irritate at some point.
Last year, our longer vacation driving trips were made enjoyable by listening to Serial, a podcast that most everyone has either listened to themselves or at least heard about. If you haven't, it is exceptional in its telling of a murder and the accused, his trial and incarceration, and whether he is truly guilty or not. This year, my wife and I decided to try out a couple other podcasts for our longer car trips. Some were excruciatingly bad, with comedians talking to much about themselves or with others and some were made worse with bad audio that made them either too hard to hear followed by screaming into the mic. My wife and I easily agreed that we had given each one enough time to decide that we had heard (or not heard) enough.
And while we found a couple that were enjoyable in their recounting of the early days of movies and their stars, one such podcast really made us laugh throughout our rides this summer. What caught our attention and kept us coming back to download more episodes was the podcast By The Way, In Conversation With Jeff Garlin. While we knew some of his work from Wall-E to Curb Your Enthusiasm, we have yet to really watch his latest TV show, The Goldbergs. But that will certainly change after listening to his podcast.
They are not for younger audiences filled with endless curses throughout, but his style of speaking, his easy-going nature, and his interaction with his guests are stream of consciousness, funny and fast. From a chat with Larry David to Amy Poehler, Jon Favreau to Bill Burr, each hour or so goes by with tears running down our faces. It is at times like "Olde Time Radio" for the 21st Century. And as entertaining as you could expect. We may have become a video nation and some podcasts seem to forget that we are listening to them and not watching, but for others like the Garlin program, it is a treat to listen to. If you are looking for a good laugh or need some interesting listening for a long car ride, a podcast may be just the answer.
Last year, our longer vacation driving trips were made enjoyable by listening to Serial, a podcast that most everyone has either listened to themselves or at least heard about. If you haven't, it is exceptional in its telling of a murder and the accused, his trial and incarceration, and whether he is truly guilty or not. This year, my wife and I decided to try out a couple other podcasts for our longer car trips. Some were excruciatingly bad, with comedians talking to much about themselves or with others and some were made worse with bad audio that made them either too hard to hear followed by screaming into the mic. My wife and I easily agreed that we had given each one enough time to decide that we had heard (or not heard) enough.
And while we found a couple that were enjoyable in their recounting of the early days of movies and their stars, one such podcast really made us laugh throughout our rides this summer. What caught our attention and kept us coming back to download more episodes was the podcast By The Way, In Conversation With Jeff Garlin. While we knew some of his work from Wall-E to Curb Your Enthusiasm, we have yet to really watch his latest TV show, The Goldbergs. But that will certainly change after listening to his podcast.
They are not for younger audiences filled with endless curses throughout, but his style of speaking, his easy-going nature, and his interaction with his guests are stream of consciousness, funny and fast. From a chat with Larry David to Amy Poehler, Jon Favreau to Bill Burr, each hour or so goes by with tears running down our faces. It is at times like "Olde Time Radio" for the 21st Century. And as entertaining as you could expect. We may have become a video nation and some podcasts seem to forget that we are listening to them and not watching, but for others like the Garlin program, it is a treat to listen to. If you are looking for a good laugh or need some interesting listening for a long car ride, a podcast may be just the answer.
Thursday, July 23, 2015
Comcast Broadband Subs Exceed Video Subs
With its release of quarterly earnings, Comcast Cable has watched its number of broadband subscribers grow while its video subscribers continue to drop. And for the first time, the total of broadband subs at 22.54 mm is now higher than video subs at 22.3 mm. That differential is only expected to widen for some time as video cord cutting accelerates. At the same time, Comcast also said that the increase in both broadband and phone subscriptions are also slowing, according to the Multichannel article. Of interesting note, Comcast currently sees 37% of its subscribers taking the triple play products, video, broadband, and phone.
As consumers continue to embrace streaming to the home and to their mobile devices, companies that provide broadband or cellular platforms to the consumer are few and far between. There is still only a few choices for a broadband subscription, depending on where you live, from a franchised cable provider like Comcast and perhaps an overbuilder like RCN or FIOS or U-verse, to a cellular provider like Verizon Wireless, AT&T, T-Mobile or Sprint, or your phone company's DSL offerings, a slower version of broadband. And most of us likely take advantage of both a broadband subscription and a cellular subscription.
Cell companies today enjoy offering data plans that let them charge more as you exceed certain usage benchmarks. Cable still provides an all-you-can-eat model for broadband usage. Given the loss of video subs, at some point the economic model for Comcast and others will be to pursue a more stringent broadband usage model that charges more as more data is consumed. But given the limited competition for broadband offerings, there seems little the consumer can do today to fight back as broadband fees continue to rise.
As consumers continue to embrace streaming to the home and to their mobile devices, companies that provide broadband or cellular platforms to the consumer are few and far between. There is still only a few choices for a broadband subscription, depending on where you live, from a franchised cable provider like Comcast and perhaps an overbuilder like RCN or FIOS or U-verse, to a cellular provider like Verizon Wireless, AT&T, T-Mobile or Sprint, or your phone company's DSL offerings, a slower version of broadband. And most of us likely take advantage of both a broadband subscription and a cellular subscription.
Cell companies today enjoy offering data plans that let them charge more as you exceed certain usage benchmarks. Cable still provides an all-you-can-eat model for broadband usage. Given the loss of video subs, at some point the economic model for Comcast and others will be to pursue a more stringent broadband usage model that charges more as more data is consumed. But given the limited competition for broadband offerings, there seems little the consumer can do today to fight back as broadband fees continue to rise.
Wednesday, July 22, 2015
Mobile Winning Over Settop Devices
Multichannel just shared a telling study by Arris on consumer video viewing patterns. Their research "found that 59% of consumers now watch mobile TV, a figure that jumps to 72% of 16-24 year-olds." And older consumers 65+ are also embracing mobile to watch video. And while this study sampled 19,000 consumers in 19 countries, it certainly supports the value that mobile viewing is playing in our lives.
Of course it would be helpful to know more about this study including which devices are being used, percentage of mobile verse wired viewing, which video platforms are gaining usage, and more. And a better definition of mobile which I believe is meant to include WIFI and cellular platforms. The rise of short form video on Facebook, long form content on Netflix, Hulu, and Amazon, and viewership platforms like Apple TV, Roku, Chromecast, Sling TV, tablets, and smartphones are all an integral part of the trend in viewing away from the settop box.
It seems clear that with a younger demo embracing mobile over other platforms, consumers will continue to re-evaluate the value of their cable subscription, their investment in more data packages on cellular, the speed of their broadband and WIFI connection, and content aggregators to drive further adoption. And the trends described at the end of the article strengthens the argument that more devices are being connected for WIFI viewing and more usage is being diverted to streaming media. The TV Everywhere mentality is arriving.
Of course it would be helpful to know more about this study including which devices are being used, percentage of mobile verse wired viewing, which video platforms are gaining usage, and more. And a better definition of mobile which I believe is meant to include WIFI and cellular platforms. The rise of short form video on Facebook, long form content on Netflix, Hulu, and Amazon, and viewership platforms like Apple TV, Roku, Chromecast, Sling TV, tablets, and smartphones are all an integral part of the trend in viewing away from the settop box.
It seems clear that with a younger demo embracing mobile over other platforms, consumers will continue to re-evaluate the value of their cable subscription, their investment in more data packages on cellular, the speed of their broadband and WIFI connection, and content aggregators to drive further adoption. And the trends described at the end of the article strengthens the argument that more devices are being connected for WIFI viewing and more usage is being diverted to streaming media. The TV Everywhere mentality is arriving.
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