When Time Warner Inc. announced lower earnings expectations in the future, the stock market responded by selling off a list of cable network stocks. From Time Warner to Discovery, from Disney and Viacom to AMC, a consistent sell off was evident. But what drastically changed? Just a week or so ago, ESPN cut 300 jobs to lower costs and hopefully improve earnings. Cord cutting has been much discussed over the last number of years; in fact, many cable operators have been posting much smaller sub losses in their latest quarter. And content companies have been pursuing new streaming deals and other revenue lines to boost earnings. So what really changed?
Sure, the announcement that Time Warner Inc. now expected lower earnings in the near future. But just yesterday, its premium network HBO announced it was the new home for future Jon Stewart content. And that news was positively received. As to the daily price fluctuations of media stocks like Time Warner, Inc., the likely means to restore earnings will be to cut costs. Expect some layoffs from a number of these companies to boost earnings for its stockholders.
Wednesday, November 4, 2015
Tuesday, November 3, 2015
Star Trek Boldly Goes Back To CBS
For Trekkers, or Trekkies, the news that another Star Trek series would be coming back to television was met with very loud cheers. That it won't be seen for 15 months, not until January 2017, tempered that applause. Star Trek, first created by Gene Roddenberry in the 1960's, has seen itself grow from TV show to movies back to TV show and back to movies with different casts embracing the sci fi drama.
CBS seems to be using this popular series in a two-fold strategy with first-run episodes appearing on the flagship CBS network and subsequent runs of the show seen exclusively on its streaming subscription app, CBS All Access. Currently, the $5.99 monthly app offers other CBS programs including the original Star Trek episodes. Is the Star Trek universe large enough to entice more subscribers to CBS All Access? Probably not but I would be on the look out for more deals to be announced like this. As CBS is not an owner in Hulu, this streaming property is their own strategy to retain the CBS brand in a digital world.
As to the new Star Trek series, little is known about the series. Its place, characters, story lines are all a mystery for now. But for those waiting for the follow up to Star Trek Enterprise, we will boldy go where CBS takes us.
Note: Some are suggesting that CBS will air only the first episode on CBS with the remainder of the season exclusively on CBS All Access. Will that encourage consumers to subscribe to the service or fail miserably? I think it would be a mistake to all of its constituents from the TV viewer to the local affiliate, from the cable operator to the cable subscriber to not air the series first on broadcast. The greatest revenue opportunity for CBS still lies with traditional television.
CBS seems to be using this popular series in a two-fold strategy with first-run episodes appearing on the flagship CBS network and subsequent runs of the show seen exclusively on its streaming subscription app, CBS All Access. Currently, the $5.99 monthly app offers other CBS programs including the original Star Trek episodes. Is the Star Trek universe large enough to entice more subscribers to CBS All Access? Probably not but I would be on the look out for more deals to be announced like this. As CBS is not an owner in Hulu, this streaming property is their own strategy to retain the CBS brand in a digital world.
As to the new Star Trek series, little is known about the series. Its place, characters, story lines are all a mystery for now. But for those waiting for the follow up to Star Trek Enterprise, we will boldy go where CBS takes us.
Note: Some are suggesting that CBS will air only the first episode on CBS with the remainder of the season exclusively on CBS All Access. Will that encourage consumers to subscribe to the service or fail miserably? I think it would be a mistake to all of its constituents from the TV viewer to the local affiliate, from the cable operator to the cable subscriber to not air the series first on broadcast. The greatest revenue opportunity for CBS still lies with traditional television.
Monday, November 2, 2015
Serial Adds Another Platform
The popular podcast Serial, known for its analysis of the Adnan Syed murder trial, has expanded its distribution platform. Previously, Serial was only available as a free downloadable podcast, but the next season's episodes will also be available on Pandora. Good news for those that don't know how to download a Podcast. It should continue to be available for Pandora.
As a fan of Serial, part of me would hope that they would deliver a new update focusing on what has transpired and changed since their report was first made. It seems that may not yet be in the cards. Some expect that season 2 of Serial will instead focus on U.S. Army soldier Bowe Bergdhal who deserted his post.
According to Polygon, Pandora will put season one on their site later this month. The date for season two has not yet been released.
As a fan of Serial, part of me would hope that they would deliver a new update focusing on what has transpired and changed since their report was first made. It seems that may not yet be in the cards. Some expect that season 2 of Serial will instead focus on U.S. Army soldier Bowe Bergdhal who deserted his post.
According to Polygon, Pandora will put season one on their site later this month. The date for season two has not yet been released.
Saturday, October 31, 2015
ESPN Cut Jobs, Others Will Too
300 ESPN employees lost their jobs last week, but they are not the first media company to do so. While content matters, employees don't, and the ultimate bottom line, when you are a public company, is to appease the shareholders. And when revenues don't rise, costs must be cut to sustain and ideally grow profits. As The Godfather likes to remind us, "It's not personal, it's strictly business."
Truth is, it is personal and affects many individuals as well as their families. While content costs rise, and sports content costs skyrocket, cord cutting has led to lost subscribers and advertising dollars have shifted from TV to digital. ESPN made those same high programming cost deals while watching its base erode. Its parent company, Walt Disney, demanded that ESPN cut costs to support profit goals. And while other networks have tried to recapture lost subs by offering OTT services, including CBS, HBO, Showtime, and most recently Starz, to name a few, ESPN has not because its license fee agreements could lead to cable operators dropping the service from their cable line-ups.
Its happened to in other media. The Daily News in NYC is cutting writers and other personnel to keep afloat, too. The sad truth is that this trend will only continue to mount as subscribers flee, costs rise, and the easiest way to make up the difference is to cut labor. And while ESPN may be in the news today, other networks have done the same thing in other years and will continue to announce cuts in the near future. It is not the end of job cuts, only the beginning. For my friends at ESPN and at other networks, I can only hope that as this door closes, other opportunities open.
Truth is, it is personal and affects many individuals as well as their families. While content costs rise, and sports content costs skyrocket, cord cutting has led to lost subscribers and advertising dollars have shifted from TV to digital. ESPN made those same high programming cost deals while watching its base erode. Its parent company, Walt Disney, demanded that ESPN cut costs to support profit goals. And while other networks have tried to recapture lost subs by offering OTT services, including CBS, HBO, Showtime, and most recently Starz, to name a few, ESPN has not because its license fee agreements could lead to cable operators dropping the service from their cable line-ups.
Its happened to in other media. The Daily News in NYC is cutting writers and other personnel to keep afloat, too. The sad truth is that this trend will only continue to mount as subscribers flee, costs rise, and the easiest way to make up the difference is to cut labor. And while ESPN may be in the news today, other networks have done the same thing in other years and will continue to announce cuts in the near future. It is not the end of job cuts, only the beginning. For my friends at ESPN and at other networks, I can only hope that as this door closes, other opportunities open.
Friday, October 30, 2015
Starz Follows HBO And Showtime
It only took about half a year for Starz to recognize that the leader in the premium cable space, HBO, was on the right track. In a classic follower move, Starz has announced that they too will offer an over the top (OTT) app to consumers seeking its content, without also buying a cable subscription. It has become a necessary step as their cable subscribers continue to downgrade and turn them off as well as their sister Encore networks. Per Multichannel, the OTT platform is weeks away from being released.
At the same time, rumors continue that Starz could be an acquisition target; however, given their lackluster results, their full value may be dropping precipitously. The hope is that they can rebound by finding new customers interested in this new OTT service. Most likely, the overall reason for an OTT distribution stream is to become more valuable for an inevitable sale of the company.
At the same time, rumors continue that Starz could be an acquisition target; however, given their lackluster results, their full value may be dropping precipitously. The hope is that they can rebound by finding new customers interested in this new OTT service. Most likely, the overall reason for an OTT distribution stream is to become more valuable for an inevitable sale of the company.
Thursday, October 29, 2015
NY Times Likes The Apple TV
Quite an endorsement today in the New York Times for the new Apple TV set top box. The writer, Brian Chen, speaks glowingly of this new generation box, applauding it for both unique apps and a better remote. It may be more expensive than other OTT boxes, but Chen remarks that "Apple TV is on the path to turning the television set into a smarter connected screen."
The price point may drive some people away, but seeing how consumers are willing to pay more for a better built product has been the history of Apple. They have done it with their iPod, iPhone, and iPad, and have kept their price point higher with the Apple Watch and now the Apple TV. The Apple TV starts at $149 while a Google Chromecast could access OTT streams for just $35. Given the features described for the Apple TV, the higher price point might just be justified.
Will the Apple TV be a holiday winner? I'm sure it will be highly touted in all the Apple stores along with Apple Watches and other products. For Apple it could be another strong quarter.
The price point may drive some people away, but seeing how consumers are willing to pay more for a better built product has been the history of Apple. They have done it with their iPod, iPhone, and iPad, and have kept their price point higher with the Apple Watch and now the Apple TV. The Apple TV starts at $149 while a Google Chromecast could access OTT streams for just $35. Given the features described for the Apple TV, the higher price point might just be justified.
Will the Apple TV be a holiday winner? I'm sure it will be highly touted in all the Apple stores along with Apple Watches and other products. For Apple it could be another strong quarter.
Wednesday, October 28, 2015
Apple Measured On Growth Not Absolute Size
Despite stellar sales, multiple product lines, and a meaningful cash horde, Apple gets measured more on growth increases and not on total size. That being said, Apple released its quarterly earnings last night and continues to outperform expectations. Its just that most analysts focus strictly on its iPhone sales and much less on its other product lines. Can Apple continue this growth trajectory? It depends.
It depends on how often consumers upgrade their iPhones. That seems to be every 2 years or so. it depends on how much bigger their international release can get, and it depends on what else consumers are willing to buy. We certainly don't upgrade our iPads nearly as fast; mine is almost 5 years old and performs quite well. It depends on how many folks finally switch from PCs to Mac laptops and desktops and how long they hold them till it is time to buy another. It depends on how fast consumers accept that an Apple Watch is a must have product and how many choose to become Apple Music subscribers. And now it depends on how well the Apple TV box, just available for purchase, is integrated into the home. Lastly, it depends on the next innovation to come from Apple, whether an Apple Car, Apple streaming TV content subscription, Apple business services, Apple advertising, or another Apple technological product offering.
And even if Apple turns from a growth company to a value company with sustainable revenue, free cash, and a steady focus on innovation, Apple can continue to be a major piece of our daily lives. It is much easier to fall off the mountaintop then to climb it and Apple must continue to innovate or risk technological change making them irrelevant. If they don't, they could one day be seen as the next Circuit City, Tandy, or Casio.
It depends on how often consumers upgrade their iPhones. That seems to be every 2 years or so. it depends on how much bigger their international release can get, and it depends on what else consumers are willing to buy. We certainly don't upgrade our iPads nearly as fast; mine is almost 5 years old and performs quite well. It depends on how many folks finally switch from PCs to Mac laptops and desktops and how long they hold them till it is time to buy another. It depends on how fast consumers accept that an Apple Watch is a must have product and how many choose to become Apple Music subscribers. And now it depends on how well the Apple TV box, just available for purchase, is integrated into the home. Lastly, it depends on the next innovation to come from Apple, whether an Apple Car, Apple streaming TV content subscription, Apple business services, Apple advertising, or another Apple technological product offering.
And even if Apple turns from a growth company to a value company with sustainable revenue, free cash, and a steady focus on innovation, Apple can continue to be a major piece of our daily lives. It is much easier to fall off the mountaintop then to climb it and Apple must continue to innovate or risk technological change making them irrelevant. If they don't, they could one day be seen as the next Circuit City, Tandy, or Casio.
Tuesday, October 27, 2015
Was The Yahoo Streamed Football Game Successful?
Last Sunday at 9:30 am ET, two small market teams, the Buffalo Bills and the Jacksonville Jaguars, played an NFL football game in London. But unlike the last London game that was seen on CBS, this game was available on Yahoo. And the question was whether it was a success.
It is the kind of question that is filled with too many variables. The fact that it was in London, which no NFL fan thinks makes sense, or the fact that because of the time zone, it was seen at 9:30 am in the East, 6:30 am in the West, or that it was between two small market teams, all affects how successful such an experiment could be. The NFL at least knows not to show a big market team or air it against another broadcast game; that would be economic suicide. Still, the question of its success matters little.
How a game is delivered to a TV set matters much more than whether it was through cable or satellite or wireless. The NFL fan will watch the game. The question really for the NFL remains how do they make the most money and for now broadcast and satellite beat Yahoo streaming any day of the week. It is only when there is no other game to watch or at an absurd time that Yahoo has a chance to own more NFL games. Will Yahoo outbid NBC for the Sunday Night Game or will Yahoo outbid ESPN for the Monday Night Game? When they do, they will charge as much as they can get for access to the game and for advertisers to promote in the game.
For this first experiment, Yahoo charged a fraction of what advertisers pay for broadcast. Most likely they reached only a fraction of the audience that such a game could get if on at a regular time. The New York Times looks deeper at the numbers and questions how successful the Yahoo game was in reaching an audience. I did turn it on for maybe 2 minutes of the game. It looked like any other game with all the graphics similar to what a broadcaster would do. But watching football on the tablet or computer is not like watching on the TV. Maybe I could have pushed it to the TV, but I knew there were better matchups later in the day at 1pm ET, 4:30 pm, and 8:30 pm.
Will we one day watch football streamed to our TV; absolutely. As a technological shift, it is inevitable; but, as for when we watch it, 9:30 am is way too early.
It is the kind of question that is filled with too many variables. The fact that it was in London, which no NFL fan thinks makes sense, or the fact that because of the time zone, it was seen at 9:30 am in the East, 6:30 am in the West, or that it was between two small market teams, all affects how successful such an experiment could be. The NFL at least knows not to show a big market team or air it against another broadcast game; that would be economic suicide. Still, the question of its success matters little.
How a game is delivered to a TV set matters much more than whether it was through cable or satellite or wireless. The NFL fan will watch the game. The question really for the NFL remains how do they make the most money and for now broadcast and satellite beat Yahoo streaming any day of the week. It is only when there is no other game to watch or at an absurd time that Yahoo has a chance to own more NFL games. Will Yahoo outbid NBC for the Sunday Night Game or will Yahoo outbid ESPN for the Monday Night Game? When they do, they will charge as much as they can get for access to the game and for advertisers to promote in the game.
For this first experiment, Yahoo charged a fraction of what advertisers pay for broadcast. Most likely they reached only a fraction of the audience that such a game could get if on at a regular time. The New York Times looks deeper at the numbers and questions how successful the Yahoo game was in reaching an audience. I did turn it on for maybe 2 minutes of the game. It looked like any other game with all the graphics similar to what a broadcaster would do. But watching football on the tablet or computer is not like watching on the TV. Maybe I could have pushed it to the TV, but I knew there were better matchups later in the day at 1pm ET, 4:30 pm, and 8:30 pm.
Will we one day watch football streamed to our TV; absolutely. As a technological shift, it is inevitable; but, as for when we watch it, 9:30 am is way too early.
Monday, October 26, 2015
TiVo Wants To Give Away Its TV Research
TiVo saw an interesting way to congratulate the merger of ComScore and Rentrak. It announced plans to offer free its TV research data next year. While consumers may not care so much, neither should research companies. Whether this news affects any companies seems unlikely although the point TiVo is trying to make does resonate. Per Fierce Cable article, Frank Foster, Senior Vice President and General Manager of TiVo Research states "The focus needs to be on how you connect advertisers with audiences they
really want to reach, with data that can ensure that, and metrics that
can verify it."
As consumers get more and more annoyed with ads that interrupt our programming and ad messages that border on the inane, both how the message reaches us and how it builds a positive relationship with the consumer seem more important. Does the Gecko or Flo really sell more insurance or do they push us away; does Jan sell more Toyotos or make us cringe. And as we seek content off the TV set, do ratings really matter?
As consumers get more and more annoyed with ads that interrupt our programming and ad messages that border on the inane, both how the message reaches us and how it builds a positive relationship with the consumer seem more important. Does the Gecko or Flo really sell more insurance or do they push us away; does Jan sell more Toyotos or make us cringe. And as we seek content off the TV set, do ratings really matter?
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