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October 13, 2005
Steven Jobs stars in remake of the Iger Sanction
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By now you have read Apple’s news yesterday about a video capable iPod. I am using that phrase because Steven Jobs himself said that it was really a music iPod with video thrown in for free. It seems obvious that while the master showman basked in the buzz generated by the video iPod idea, he was unwilling to say that the video business model would pan out.
It is important to note a few things.
The success of the original music iPod did not require Apple to create new consumer behaviors. Portable music has been with us for decades and MP3 music downloading is also common place. What Apple brought to the table was what Apple does best – made it mainstream, made it easy, and made it ‘cool’ to own. In the process they also became a significant conduit of music distribution.
Portable video is a behavior that has yet to mature and I don’t know if even the Apple juggernaught can will it into existence. On a side note, cell phone video enthusiasts that believe that their handhelds will become the next television device should pay attention.
Is the portable video concept new? No. There have been other attempts at video and they have yet to catch on with the public as MP3 players did pre-iPod. Even the mighty Microsoft has not succeeded in this yet.
Will the public pay $1.99 to watch Desperate Housewives? Doubtful. Comcast with it connection to millions of televisions in HDTV in Technicolor splendor could not get consumers to spend anything for video on demand. Even the pay-per-view business, which is easier than video downloading, only generates hundred of millions annually.
Can Apple continue signing up content owners to sign onto its distribution channel? Sure. Recently even this blog ran a posting about how CBS Chairman Les Moonves would release CSI for video on demand if he could get $0.99 per episode.
Will a video iPod change consumer video habits? I say no. But if anyone can get a generation of mobile video watchers kick-started, Steven Jobs can.
An interesting outcome to contemplate is what happens if the video on demand conduit resonates well with consumers but not the $1.99 download fee. You can already feel the marketing sharks circling in the water; wondering how to make the medium ad supported instead.
“This is video on demand without the problem of cable operators,” said Tim Hanlon, senior VP, Publicis Media, noting that “Apple has trumped Comcast” in the area of on-demand programming.
My prediction is this: the video feature will feel cool, but don't expect any change in the television/movie distribution landscape anytime soon. More likely the popular content will be free video-podcasting clips provided by repurposing news and sports and by individuals having fun.
Posted by Martino Mingione at 09:03 AM | Comments (355) | TrackBackOctober 11, 2005
Psst, just 30 cents a channel
Analysts from Citigroup Research believe that rising energy prices will affect consumer spending on entertainment and telecommunications services, giving an edge to companies with bundles or cheaper alternatives.
Maybe. It might be more accurate to say that cheaper alternatives are always attractive no matter what the price of gasoline is. The nugget of information I thought interesting was this:
Verizon's "FiOS TV pricing could put pressure on other service providers, since its standard basic package equates to 30 cents per channel per month, below cable and DBS."
If Comcast or Time Warner were ever to reduce their subscription fees in response, shareholders watch out!
Posted by Martino Mingione at 08:22 AM | Comments (25) | TrackBackAre you getting your fiber?
Fiber-to-the-home (FTTH) technology is available in 652 communities connecting 322,700 homes, according to research released last week at the FTTH Conference in Las Vegas.
Those figures should only increase as Verizon continues its FiOS buildouts.
The report was released by the Fiber-to-the-Home Council, the Telecommunications Industry Association and Fiber Optic Communities of the United States.
October 03, 2005
On Demand is In Demand
Last week SeaChange International purchased the remaining 72% of the outstanding capital stock of the On Demand Group Limited (ODG) that it did not previously own. ODG is London-based; aggregating movies and other television programming for on-demand and pay-per-view services throughout Europe.
SeaChange paid around $13.4 million. Taking into account around $6 million that On Demand Group has in the bank, the actual cost to SeaChange is nearer $7 million, with future earnout payments taking that up to $17 million at most.
Cable: "I have the eyeballs" Broadcast: "I have the ad dollars"
The Cabletelevision Advertising Bureau is pointing out that cable's ad-supported networks have a 9 share point advantage over broadcast for the first week of the new TV season, representing the biggest gap ever for a premiere week, Mediapost reports. Cable's share, in the week of Sept. 19-25, was 54.3, while broadcast's was 45.0.
Dig a little into the numbers and we see that cable's viewership growth is coming from smaller networks, not the biggies. Just another reminder that television media consumption is increasingly made up of numerous micro-audiences.
Posted by Martino Mingione at 11:45 AM | Comments (190) | TrackBack
