And the award for greed goes to…
Unbelievable. Disney decided to pull the plug on WABC-TV with Cablevision in the New York area on Academy Awards Sunday. Sports fans throughout New York are thankful ABC didn’t have the broadcast rights to the Olympics or the Super Bowl. As of 7:30 PM EST, still no agreement.
Let’s assume there won’t be an agreement. Both Disney and Cablevision lose. ABC will face the ire of advertisers who won’t be reaching a couple of million viewers in an affluent market. Cablevision, already among the least loved companies in Greater New York, will rise to the top of the most hated list with a bullet. No small feat in a metro area that sports AIG, Citibank, ConEd, and the LIRR.
Cablevision is claiming Disney wants $1 per subscriber per month for the right to distribute WABC-TV. Cablevision already pays Disney for the Disney Chaneel, ESPN, ESPN2, ESPN News, and the half dozen or so other outlets that provide repeats of SportsCenter round the clock. What am I not getting? Disney already broadcasts WABC over the air for free. WABC’s business model is to sell advertising. Cablevision helps Disney reach more ABC viewers, so ABC can sell more advertising.I’d
Let’s say Disney prevails, and every New Yorker’s cable bill goes up a buck. Customers get mad and switch to FIOS. Disney shakes down Verizon. Customers get mad and give up on TV. By then Lost will have run its course. Who’s going to miss TV? Customers might be mad at Cablevision tonight, but it won’t be long before Disney pays a price as well.
Everyone involved understands Disney’s challenges. Ad revenues for broadcasters across the spectrum are down as audiences shrink, but Disney needs to learn from those who have gone before — music labels and newspapers. Raising the price to the customer only exacerbates the problem.
Updated 9:00 PM 3/7/10 – New York Times reports someone blinked. This kind of brinkmanship is no way to treat customers.
Google gets in the man’s face
This morning while taking a shower I heard an interesting piece on NPR. The Obama stimulus plan included $7 billion to upgrade the nation’s broadband infrastructure. Looking back at FDR’s rural electrification program, what’s not to like? For one, a lot of applicants are applying from places that already have broadband access – they just don’t like how much it costs. That’s not in the spirit of this supporter’s backing of the program. But I digress. For as much as I don’t like the idea of parts of the nation geiting cheaper broadband before other parts of the nation get any, the more egregious behavior (as we’ve learned to expect) comes from the near monopolies who have chosen not to deliver broadband access to the outer reaches of their territories. Somehow this public option (and someone on the AM dial will call it such) is patently unfair.
Look, if the second most hated industry, the health insurance behemoths can get the very people they’ve spent the last couple of decades screwing to pile onto the street en masse to defend those insurance companies’ right to screw them. Why shouldn’t the most hated industry, the cable and phone companies stand up for their constitutional right to screw Americans? Surely Glenn Beck will rally the troops. Yep, the largest (and bankrupt) ISP in Maine, FairPoint is fighting rural broadband. I can just see it — they get a bunch of folks storming the Augusta legislature demanding the socialists in Washington keep their paws of their cherished 56k connections.
Typically this is one of those stories where the outrage lasts all as long as a sound bite, but I was reminded of it reading this Times article. Google’s decided the Internet is too slow. Megabits? Who cares? We need at least a gigabit to the home.
First the company stands up to the Chinese Communists, then it prods the US telecom industry to deliver decent service. How about Larry Page and Sergey Brin run in 2012? Unlike most corporate weasels, Google doesn’t throw its money at lobbyists to plead their case in the halls of corruption and moral bankruptcy. Google spends its money proving its point in the real world.
In an interview, Richard S. Whitt, Google’s Washington telecommunications and media counsel, said Google did not see the test as a new business venture as an Internet service provider, but rather as an effort to push the industry into offering faster Internet access at lower cost.
“We are not getting into the I.S.P. or broadband business,” said Mr. Whitt, using the industry shorthand for Internet service provider. “This is a business model nudge and an innovation nudge.”
Whatever. Just keep sticking it to the man and we’re good. Now if only Google wanted to nudge the healthcare industry.
Final nail in my newspaper’s coffin
I canceled my newspaper subscription today. I’ve subscribed to the Boston Globe for over 17 years without interruption. The role the newspaper plays in my life has changed in some significant ways. For example, I have no idea when the paper stopped publishing stock quotes. Sometime in the late 1990s I began consuming that data online. Virtually the same story applies to out of town sports scores, election results, and weather. In fact, the newspaper is no longer a significant source of news. My typical 15 minutes in the morning with the paper would be a scan of the Op-Ed page, the obituaries, sports (for background pieces on the local teams), and the puzzles. The bulk of that 15 minutes would be spent on the crossword.
Let’s do the math. A lot’s been said about the deteriorating business model of print journalism, but let’s take a look at the value proposition made to the consumer. In my case, with the exception of the crossword, I can get everything online and I get it fresher with access to voices from all over the globe. (Online crosswords don’t do it for me, but some of the Facebook word games are downright addictive and make a fine substitute.) I’m down from spending about 30 minutes with the daily paper a decade ago to 15 minutes. Home delivery costs approximately $40/month. That’s not much, but it’s much more than what I pay for the sports package or the movie package on cable, and I spend far more time with Curb Your Enthusiasm and Sports Center. Netflix with Roku and PlayStation 3 access is only $20/month. Time spent and value received from broadband and 3G services are similar.
There’s not much news here. Every media consumer gets the math, and many took action long before me. Here’s the thing… I’m old-fashioned. I like reading the paper with my morning coffee and Corn Flakes. While many consider reading at the morning table rude, it’s somewhat more sociable than hunkering down behind a laptop screen, and you can share the paper much more easily than a laptop.
The newspapers counter that all that “free” content on the Web costs money to produce, and much of it is the product of the print team’s labors. Kill the newspaper and there’s no free online content. Agreed. So here’s my proposal. Rather than sell individual subscriptions to the New York Times, the Wall Street Journal, and the Washington Post, I would be happy to pay single monthly fee for all the news I consume online. That fee is shared proportionally among all the publishers whose sites I regularly visit. This could be added to my broadband bill or charged separately. The news outlets already know how much I’m willing to pay for decent journalism.
So why did I take action today? I’d like to say that something like anticipation of Apple’s tablet announcement was the spur. Or maybe the latest rev of the Kindle caught my eye. But it’s none of those. The driver delivering the paper has decided he no longer wants to deliver the paper to my door. He just tosses it on the driveway. Winters are cold here in New England, and I like my neighbors just enough not to subject them to the daily sight of me marching out for the paper in my PJs. It turns out that $40/month is exactly my limit – remove just one more feature from the offering and I’m gone. How many other newspaper subscribers are at that point?
Maybe now I’ll get through the Economist and the New Yorker every week while waiting on my tablet.
Fuze Movie announced
Years ago when we were launching Xprove, we met Michael Buday who was working on a very impressive synchronous online video review and approval system. SyncVue might have been a little ahead of its time, but in its latest incarnation as Fuze Movie it might gain traction. Here’s the PR announcement from my friend Kevin Bourke with links.
Apple TV’s next moves?
Before the Christmas holiday, rumors of Apple’s overtures to the networks abounded like so many visions of sugar plums. Journalists and bloggers posited about the effect of Apple’s entrance into the subscription television market. Most of the analysis was solid. The Seeking Alpha blog featured this succinct write up. Most expect a successful Apple offering would threaten cable and satellite subscription models. Others note that an invigorated Apple TV could put the pinch on the Netflix Roku service. Light Reading’s Cable Digital News noted the following.
While cable operators likely won’t face an immediate threat from the subscription service Apple Inc. (Nasdaq: AAPL) is purportedly pitching to major content suppliers, the offering may instead put the hurt on over-the-top video service providers like Boxee and Roku Inc.
It should be noted that Apple TV employs a hard disk. Content is downloaded before it’s played. Roku receives streams, so it’s a lower cost, lower footprint device. Most importantly streaming allows more delivery flexibility. Netflix doesn’t care whether I watch my content on a PC or a TV. Apple TV is anchored to a television. While an iTunes account can be managed from multiple devices, content needs to be downloaded to each to play it. Even with improved progressive download performance, this model has its limitations. One blog noted that a full season of an HD network television series can take up to 50 GB of hard disk space. So there’s a limit to how much content can be delivered to an Apple TV.
For Apple to leverage the strong iTunes brand it has to unhitch content from the device – a fundamental change in business model for a device manufacturer. But if any company has shown the ability to adapt to the digital media marketplace of the early 21st century, it’s Apple. If Apple succeeds at getting content deals in place, I expect a next-generation Apple TV to emerge shortly thereafter.
