Category Archives: What’s Going On

May 29, 2014 · 9:29 am

Give The People What They Want

I was working at a television network when the Internet became a “thing.”

Television

(Photo credit: Daniel Y. Go)

In those early years streaming video wasn’t really a consideration since the technology hadn’t been invented and there was no such thing as broadband in the home.  Nevertheless, the seeds of where we are today had been planted and there was a huge threat perceived by my compatriots at the network from the emerging technology.

Fast forward 15 years.  Today video streaming is a common part of the media experience and that technology has broadened the potential reach of content services (which is how one needs to think of “broadcasters”) well beyond the living room.  Forward-thinking companies embraced this new access to eyeballs while some continue to resist, entrenched in their old business models which are pretty much on their last legs.  The  way forward is seen in a study released the other day by the Viacom folks.  They studied the impact of TV Everywhere which defined as watching full-length TV programs on sites and apps by “authenticating,” or using pay TV log-in information.

The majority of users agree: TV Everywhere is additive to the TV viewing experience. Since they began using TV Everywhere apps and sites, 64% report watching more TV overall. This finding is even stronger among Millennials, with 72% watching more TV.  TV Everywhere also increases the value of pay TV subscriptions while strengthening loyalty to pay TV providers and relationships with networks.

  • A full 98% of users say TVE adds value to their pay TV subscription, with 67% saying it adds “a lot” of value.

  • The vast majority (93%) is more likely to stay with their provider due to TV Everywhere and 68% have a more favorable impression of networks that offer TVE experiences.

This points out how when we give consumers what they want instead of forcing them to choose an inferior option that may coincide with our business needs but not their appetites, companies do better.  Yes, I’m writing that in a way that extends it beyond just TV Everywhere but that’s the point I take away from the data.  Do you agree?

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April 23, 2014 · 8:30 am

New Data On A Shifting Market

Every so often we take a look at the cord-cutting phenomenon. This is the term that applies to the act of getting rid of your cable subscription,

Early 1950s Television Set

(Photo credit: gbaku)

or as is more frequently the case with young consumers, never having one to begin with. Since the folks at Experian Marketing Services just released some new information on the topic I thought this might be a good time to take another look.

As we’ve discussed here before, I think it’s probably too soon to tell if what we’re seeing in the data below as well as other data at which we’ve looked is a trend or a blip.  That said, I think we’re probably getting to the point, especially among young people, where we can begin to draw some conclusion and maybe to adjust our business plans accordingly.  Let’s see what you think.

An April 2014 survey published by Experian Marketing Services suggests that 7.6 million U.S. households, or 6.5% of all U.S. households, have now cut the cord–up 44% in the past three years. Ownership of an iPhone or iPad “noticeably increases the odds” that a household will cut the cord, Experian said. Experian notes that nearly 25% of adults between the ages of 18 and 34 who subscribe to a streaming video service like Netflix and Hulu do not pay for a traditional TV service. Experian also found that households who only watch streaming video on mobile devices are 1.5 times more likely to cut the cord, while those who watch streaming video on TV are 3.2 times more likely to cut the cord.

The above is taken from Cir.ca’s summary which also contains some other data points you might find of interest.  I think it’s pretty clear that whatever is going on it’s happening at an increasingly rapid pace.  It’s pretty apparent that as mobile devices – phones and tablets – become more able to handle high quality video streams the tether to the TV screen gets weaker.  The rapid growth of Roku devices along with Chromecasts, Amazon’s Fire TV, Apple TV, and other over-the-top devices, along with “smart” tv’s, has meant that well over half the homes have some way to access “television” on their TV screen without using a traditional cable service.  To me, that doesn’t bode well for the cable guys.

On the other hand, I’m guessing that most homes get their broadband internet service from the same people from whom they get their video service.  We’re already seeing Comcast and other providers marketing high-speed internet with a small dose of video, a very different approach.  Is the door open to others jumping in as Google has with Google Fiber?  Where are the WiMax folks?  Stay tuned – this isn’t over.  I am not sure where the trend line flattens out and the cord-cutting phenomenon stops, but we’re not there yet as this data shows.  What are your thoughts?

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April 10, 2014 · 10:02 am

Put This Thought In Your Pipe

You’re going to be hearing a lot about the proposed merger of Comcast and Time Warner Cable if you haven’t already.

pipeline

(Photo credit: LizMarie_AK)

That’s not really what today’s screed is about but it is what triggered the topic.  Many people are very outspoken against the merger; just as many seem not to care.  Whether you are for it or against it, the interesting thing is that the argument is over “the pipe.”  More and more, the pipe – the channel through which content is delivered – matters less and less.

Let’s take it out of digital terms.  Take Starbucks. Their “content” is coffee and coffee drinks.  Their pipe was initially their stores.  Then the content moved to other channels – supermarkets, airports, etc.  They also got many of their customers – 7 million of them at latest count – into a Rewards program using phones and other digital assets.  They continued to make the content experience appropriate to the channel – you get a nice china mug when you’re drinking in-store, you get free WiFi, etc.  What has that meant?

“Holiday 2013 was the first in which many traditional brick and mortar retailers experienced in-store foot traffic give way to online shopping in a major way,” said Howard Schultz, chairman, president and ceo of Starbucks Coffee Company. “As our solid traffic growth and record Q1 results demonstrate, Starbucks unique combination of physical and digital assets positions us as one of the very few consumer brands with a national and global footprint to benefit from the seismic shift underway.”

In other words, it’s the content.  If you’re really good at it, the content morphs as needed for the particular channel.  In general, however, most of us can access that content though multiple channels, and if we’re unhappy with one we generally have the option to go to another to get the content we seek.  Sure, that’s not universally true on a free basis but if you throw in the ability to rent – generally for less than the cost of one Starbucks drink – you’d be hard-pressed to find anything that’s inaccessible (and I’m not including all the illegal availability either).

Yes, it’s important that consumers are protected from monopoly control.  Yes it’s important that the Internet remain open and equally accessible to all.  Those discussions are worth having but if the concern is that one pipe will be less attractive, believe me there are other ways to get to what it is we’re really after – the content.  The demand for that will drive the market to find a way around any pipe that gets blocked.

Thoughts?

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