Archive for Media devices and services – Page 2

SKY skips the satellite dish; who’s next?

SKY TV logoAlthough this is international news, it also has ramifications for the US. Europe’s Sky satellite television service is going to offer its full range of channels via streaming. Not just a skinny bundle, but all of its offerings. Starting in Italy, then Austria, and later the UK, Sky subscribers will no longer need to have a satellite dish.

Numerous MVPDs have experimented with streaming offerings. in the US. While most notable of these is DISH’s Sling TV, these have typically been low-end or incomplete offerings that do not replicate the standard MVPD levels of service (for various reasons including cost and streaming rights). But this move by Sky – albeit in a different international market and regulatory environment – is a harbinger of the future.

It’s hard to conjure up a thought experiment that doesn’t point to all video content being delivered via the internet in the not too distant future. Although Sky is still mandating the use of its set-top boxes, MVPDs could likely completely do away with them and just focus on bundling and delivering internet and content.

Of course, this will cause even more disruption than we’ve already seen. Traditional MVPDs will try to transition to a new model where revenue streams from STB and remote control rentals are important. But the savings from not having to maintain and manage several makes and generations of STBs might make the financials more tolerable.

Consumers could get rid of one of the boxes connected to their sets. Satellite viewers wouldn’t be subject to rain or weather interruptions. And, in theory, the local cable monopolies become extinct since delivery by internet means regional MVPDs can become vMVPDs everywhere. Finally consumers may see strong competition for their pay TV dollar. We may see an outcome where we have some firms with cheap bundles competing against premium-priced bundles with superior interfaces. It will be interesting to see how it plays out.

Polishing the crystal ball

In 2004, I spoke at the NAB’s Futures conference and made the somewhat accurate prediction that in 15-20 years’ time we’d be watching TV just by Googling each program. I missed the detail that we’d actually be saying “Hey Google” or “Hi Alexa” first, but close enough. It may be still another five years before all the rights and technical hurdles are crossed, but I think this Sky move could signal the final set of nails in the traditional MVPD coffin before we move to an all streaming, 5G-enabled video paradise.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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SVODs can’t skip their churn

tablet with SVOD service appsThe Wall Street Journal highlights a story that really shouldn’t surprise anyone with experience in media business – a high level of SVOD subscribers only sign up for the months in which their favorite series are released. “Churn” has been around along as HBO or other premium channels have existed. But, it does seem to bring surprise to SVOD/OTT companies and digital investors who again may have skipped over a lesson which traditional TV has for them.

That churn is at all a surprise is almost as laughable as a recent conference marketing piece. This promotes a keynote by an SVOD representative who will discuss how “TV is becoming the center of our culture.” Becoming??? I realize SVOD companies are young, but do they really have no idea that TV has been the primary shaper of culture since the late 1950s? But I digress…

One of the main drawbacks of the “full season release” strategy in use by many SVOD services is there is no incentive to stay around longer than the month of release. By enabling total bingeing, these services also make it easy for their subs to watch a whole season over one weekend. And if the subs are willing to wait, they can knock off several series in one month. As our local ShopRite stores used to say, “why pay more?”.

Perhaps not by coincidence, Amazon announced last week that it was raising the one-month Prime subscription by 20 percent (keeping the annual subscription the same). Although not directly mentioned, this move no doubt is at least a partial reaction to people dipping into Prime Video month-by-month.

Churn, churn, churn

A certain number of people will always search out ways to reduce their costs. Others can’t be bothered and keep subscriptions forever, even when it’s not being used – making the subscription model work. The digital media services will need to learn to live with this, just like old media has had to for many decades.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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Getting media companies closer to consumers

image of TV set and remoteLast week’s profile in Variety of Turner’s Kevin Reilly had an interesting line about media distribution that struck a chord. Reilly is quoted as saying “Probably the biggest frustration of the age is that we’ve tied ourselves into a distribution partnership for the most part with partners who have not been focused on the consumer experience,” in reference to MVPDs.

I recently spent about two years as the global manager for the Disney account for a market research firm, and there too one sees the interesting disconnect of “traditional” media brands from their end consumers – something I hadn’t really recognized until it sort of slapped me in the face.

For as much as media giants such as “Disney” or “Warner Bros” are household names, the truth is that (putting aside theme parks and smallish direct-to-consumer specialty sales) they have been totally dependent on third-party intermediaries to deliver their product to consumers.

TV content: whether on their owned networks or another network, it relies on an MVPD to distribute it via pay TV, or a broadcast affiliate to send it out over-the-air. Through rental services, SVOD services, or retail outlets for home video.

Movie content: distribution through movie theatre chains for first run. Through rental services, SVOD services, or retail outlets for home video.

Consumer products: almost all brand or character products are designed and manufactured by third party licensees, and sold through online or brick-and-mortar retailers.

Thus one begins to understand the great business opportunity that streaming and digital offers these giants – taking back control of their relationship with the end consumer, either directly or by using it as leverage to demand better performance from their partners.

The drawbacks of not owning your relationship

Imaging having your business tied to cable TV companies. Deservedly or not, they are among the most disliked and distrusted companies with which consumers have to deal. And they are responsible for delivering your content through networks or VOD to consumers, and the consumer relationship?

Movie chains are not so reviled but they too are no paragons of consumer value. Many people consider movies to be over-priced and most people understand that the cost of concessions are exorbitant. And don’t get me started on the up-charges for “assigned seats” and buying your tickets online. But that’s where consumers have to go to experience first-run films.

And Amazon, a bastion of home video and licensed sales, while being extremely focused to create good consumer experiences, is no bargain. To keep prices low, it drives deep discounting through wholesaler relationships, as well as other considerations that impact placement, display, promotion, and the like.

Get down(stream)

While the above covers far more ground than strictly TV or movie content, it does show that a move away from the traditional distribution channels could benefit media companies in a number of ways. By increasing their direct dealings with the consumer, it offers a way to control the experience – which is great as long as it’s done right! And, as is so important in today’s world, it would also give them first-party data from their interactions with consumers.

So whether it’s a stand-alone SVOD/OTT service, or the advent of day-and-date home distribution of theatricals, movement downstream to get closer to the consumers’ actual touch-points could pay big dividends (figuratively and literally).

David Tice is the principal of TiceVision LLC, a media research consultancy.
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MoviePass and how much are your data really worth?

MoviePass logo

An interesting article about MoviePass was recently published in the NY Times. MoviePass, for those not familiar, is a subscription service for going to the cinema. It has been around a few years, since 2011. Its original offering was priced at $50 a month, later reduced to $35. Its current offering is now a somewhat unbelievable $9.95 a month, which allows each subscriber to attend one movie a day.

The service operates outside of the movie theater chains. It uses a type of debit card that loads the value of the movie once you activate your MoviePass app – so to the theaters it just looks like any other debit card transaction. You can pretty much watch whatever film you want; you aren’t stuck with second-run or bad films, or a specific chain.

It certainly seems like an unbelievable deal for consumers. In the extreme case, for $9.95 you could attend 31 movies in a month. Assuming an average value of a movie ticket of about $9 (yes, I know it’s much higher in many metro areas, but that’s the national average per the National Association of Theater Owners), a subscriber could thus get $279 in movie value for their $9.95 monthly investment – an ROI of 28 to 1!

According to the article, the CEO of MoviePass “believes that ticketing can at least be a break-even business for MoviePass. The real treasure in this venture, he contends, is the trove of data about consumer tastes and habits that MoviePass can collect”. He believes the combination of fees and income from data sales can make this venture work.

What do the Green Bay Packers have to do with this?

The NFL and its teams are famously tight-lipped on the finances of the league and the teams. However, the Packers are owned by the community through shares. The shares really give fans little value, but like any other shareholder business, the Packers have to publish financial reports. Thus, the world finds out much of the otherwise secret financial dealings of the NFL with their TV partners, etc.

In the same vein, we sometimes can get a window into the black box of value of digital data in situations such as this with MoviePass. Now, it could be MoviePass is blowing smoke and trying to cover up a ridiculous burn rate. But if we take them at face value, it provides us with an opportunity to make a guess as to what our personal data are worth in this particular situation.

Let’s make some assumptions

Now, as the article rightly points out, a subscription model is built on the fact that few subscribers will ever make use of the total value of their subscription – some may never make use of it, and many will make infrequent use of it. Thus for the sake of argument, let’s be conservative and say only half of MoviePass subs ever use the service each month, and those who do only attend three movies a month. This would mean the average MoviePass sub attends 1.5 movies a month, putting an average monthly subscriber cost to MoviePass of $15 ($13.50 in tickets plus assume $1.50 in overhead) against a subscription of $10. If MoviePass expects to break even, then this would imply a $5 value of each subscriber’s data each month. (Please note that I have no inside information – I’m just making some educated guesses on all the above)

And there you have it, the value of your data in one particular category (movie attendance tied to your demos, overall movie viewing behaviors, and whatever other data could be appended or tied to your profile) for a particular set of clients (movie studios and theater chains) can be guesstimated to be roughly $5 a month.

Let’s do some math

We’ll go a bit further and assume that many apps we use have a similar value proposition – and some multiplied due to the wider range of potential categories and end clients. A quick look through my phone and I see Facebook, Google, LinkedIn, Twitter, Weather Channel, Fandango, Amazon, a parking app, Realtor, FiOS, The Economist, and many others. That’s a lot of apps collecting, and likely selling on, data about me. The point here is not if $5 per app per month is a correct estimate; even if it’s a few dollars off either way, the point is that the value of our personal data is a non-trivial number when summed up over the dozens of apps and websites we use each month.

Many apps/services will make the argument that the value to the consumer of their service is in excess of what they make from consumer data. This is similar to the ad-supported media argument that ads pay for your content. But a key difference here is that the assumption in the digital world is that the digital firms own your data from the start – consumers never have an opportunity to trade on the value of their data; you either sign it over via Terms of Service/opt-in or you don’t get to use the app at all. And also that the data can take on a life of their own, being sold on to or used by many advertising technology businesses that operate in the background of the digital ad ecosystem.

Whose data is it?

The EU is taking steps to address this through the General Data Protection Regulation (GDPR) that will be enforced as of May 2018; the GDPR is intended to provide for a  high level of protection of personal data and to give citizens back control over of their personal data. In the US, some consumer advocacy and consumer privacy groups are also pursuing such a flip in rights in order to provide relief to consumers whose data are being bought and sold along the digital food chain without any transparency to the consumers themselves.

That is unlikely to happen quickly in the US, although EU rules may nudge things along if digital companies want to standardize globally. Or, just as with car emissions, a large state like California could drive the US discussion. As for we consumers, there isn’t a lot to do on an individual level other than to be more aware of which app/website is tracking what. And think about if an app/website is offering $5 more in value than you’re paying for it.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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TicToc’s time to launch

Please note the TiceVision blog is on a reduced publication schedule through Jan 2.

Bloomberg TicToc logoLaunching today on Twitter is the TicToc news feed from Bloomberg News. Intended, as are many new services, to appeal to the millennial audience with fleeting attention, TicToc claims to be the “first and only global news network streaming LIVE on Twitter”. It makes use of over 2,500 Bloomberg journalists and analysts around  the world.

Perhaps singling out millennials is a bit unfair, as TicToc can also fill a need for anyone who is interested in a fast round up of news and analysis. And using the Bloomberg name and credibility, it aims to not just be “quick and dirty” news but fill the other need for trustworthy news that people increasing are calling for when Facebook – and to a great extent Twitter itself – are sources for so-called “fake news” or highly biased opinions that try to get passed off as news.

A quick viewing of the first TicToc video updates this morning show they are about 10 minutes each, featuring about 8 stories. The updates have video or photos as background to the reporting audio, no reporter headshots that I saw; they also caption the audio on-screen for those who do not want to play the audio.

I honestly can’t say these reports are significantly less informative than what one would get from a typical half hour evening network newscast. If anything, these seem to cut the news down to a few major stories without the fluff that fills a typical network newscast.

TicToc also features live coverage and updates (today it was live video of Theresa May speaking in Parliament on Brexit), adding to TicToc’s value as not only as a news aggregator but in covering breaking news.

As a boomer who has been known to comment unkindly on his millennial acquaintances’ knowledge of news and current events, this (or services like it) could fill that void – especially if it can be ported to other social platforms given Twitter’s relatively small and declining user base (was not able to determine if the partnership is exclusive).

Let’s check back in a month

Having launched in the middle of the holidays, Bloomberg is probably not counting on high sampling rates immediately but will use the next few weeks to shakedown TicToc in a live environment. The real test of consumer interest will emerge once the holidays and New Year’s periods are over.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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Neutrality is great… unless it isn’t

YouTube logo crossed outContinuing on from yesterday’s post about Amazon Echo is fresh news about those digital home assistants/smart speakers. We hear that Google will cut off access to YouTube from Echo Show devices. This is not just cutting off an app or skill, but literally cutting off access from the Show’s browser to the regular, public YouTube website. This could be a major setback for the Echo Show.

In contrast, there is positive news within the streaming media player space. Here, after a long period, Apple will finally make Amazon Prime available on Apple TV devices.

Firstly, this leads to an interesting observation. These companies that are so up in arms over net neutrality seemingly have no compunction to limit access to other digital services when it suits their business imperatives. While the Apple TV/Amazon Prime squabble is sometimes argued as a programming or app issue, the blatant blocking from Show of the public YouTube website by Google is much harder to defend.

Secondly, this whole scenario shows the potential difficulties in the marketplace of vertically integrated technology companies that act as device manufacturers, service providers, and content creators. How can devices, subscription services and stores all live together in a way that serves the consumer?

I first did research on digital media players in 2014, which at that time consisted of Roku, Apple TV, and Chromecast. Back then, it was evident that one of the advantages Roku had was its independence. Roku had all the leading streaming services because it didn’t compete against them. However, both Apple TV and Chromecast clearly left off some services that were competitive to their own offerings.

Serve the consumer, not your self-interest

As we stated back then, the consumer doesn’t care about the competitive forces at work. They just want to watch what they want, without worrying about switching between multiple devices to access content. Roku’s independence was a clear winner then and has contributed to its still-leading status in this space (and a very successful IPO). It will be interesting to see how a similar situation plays out in the digital home assistants/smart speakers space over the next few years, where a neutral party isn’t leading the market.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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Echo Show ad doesn’t show all

Amazon Echo ad screenshot

courtesy iSpot.tv

Watching TV over the weekend, it was hard to avoid the new commercial for the Amazon Echo Show. Called “Piece of Cake,” its rapid-fire hard cuts throw a lot of Echo Show capabilities at the viewer in 55 seconds with little time to digest.

Going back and reviewing the ad, I was able to identify the following capabilities being commanded or shown in the background on the Show:

  • Play a music playlist
  • Video talk with Grandma
  • Manage to-do lists
  • Check weather
  • Ask a question – spell check, find pizza place
  • Dictation of text messages
  • Home security – show front door
  • Smart home – dim lights
  • On-screen video – instructions, news, kid’s programs

Featuring music at the top of the ad is well justified, as research my team and I did last spring for GfK show that the top use – by far – of an Echo/Echo Dot is playing or streaming music. Asking questions and getting weather are also popular although far less than music. Smart home and home security require additional connected devices, which may or may not be obvious to the viewer.

New for the Show are the video capabilities enabled by its built-in screen, such as requesting and playing video content, or talking to grandparents (remember when the same tactic was used when telepresence was the flavor-of-the-month a few years ago?). The video screen could also go a long way towards what we called “building trust” with these devices – that by playing back requests on-screen, it understood your question or what you were asking it to do.

Conspicuous by absence

Most fascinating is what wasn’t shown – any retail activity. A dad asks for the local pizza place but the Show did not ask him if he wanted to place an order. Nor is there any mention of ordering direct from Amazon or its voice-shopping partners. The GfK study found shopping via Echo to be well down the list of used capabilities, so that might be a reason. But ultimately isn’t driving overall Amazon sales the main purpose of all the Amazon tech that has been developed? An interesting choice by the Echo marketers.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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ATSC and CRE Futures

CRE logoThere is much good work that has come out of the Council for Research Excellence (CRE). Funded by Nielsen, but operating independently, the CRE explores the issues surrounding media audience measurement. Although participation on committees is limited to Nielsen clients, much of the output of the CRE is made freely available on the CRE website. This allows the industry at large to review the CRE’s work and to learn from it.

A recent series of recorded briefings for the very active Futures committee within the CRE has been posted. These discuss a number of topics, including addressability, ATSC 3.0, and Advertising 2020.

ATSC logoI found the NAB’s ATSC 3.0 briefing most interesting. It helped explain more about this new TV standard that’s been popping up occasionally in the news. In a nutshell, ATSC 3.0 will allow synchronization between a broadcast signal and a broadband connection to allow the equivalent of a fully digital, addressable, and interactive viewing experience. This sounds good for the viewer (supports 4K/UHD, can call up interactive elements or VOD from the broadcast screen) and the distributor (adds more side channels to each frequency, enables addressable ads and digital tracking of viewing).

Of course, there’s a “small” problem. The standard is not compatible with any current TV sets or receivers, not even that new 70″ 4K smart TV you’re buying for Christmas. Similar to the digital transition in 2009, you will either need a new set or some sort of converter box to use ATSC 3.0 if it goes mainstream. Based on my experience with research around the 2009 digital transition, it is hard to conceive of getting the entire stock of TV sets turned over yet again, or that stations will run both ATSC 1 and ATSC 3 simultaneously for the numerous years required for a natural transition.

A solution in search of a problem?

What may be even harder to conceive is why, in five or ten years, if a house is broadband enabled, they would still use a broadcast signal and not just stream everything. As Alan Wolk recently discussed in his TV[REV] blog, local broadcast stations that made sense in the 1940s and 1950s make little sense in today’s world where almost everyone has either pay TV or broadband.  I respect my friends at the NAB and their partners, but ATSC 3.0 has the whiff of a very complex, expensive solution to an increasingly obsolescent marketplace structure.

But that’s the purpose of the CRE Futures committee and its work, to gain better understanding of emerging technologies that will impact media and surface discussions about their implications.  Check it out!

David Tice is the principal of TiceVision LLC, a media research consultancy.
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Avoiding the Pennsy problem

Comcast logo

Yesterday, Bloomberg published a story on how cable companies are cozying up to Netflix and Hulu. These moves are in order to integrate those services into their respective user interfaces. A line in the story caught my attention: “[this] moves Philadelphia-based Comcast a step closer toward its goal of becoming a one-stop shop for a variety of digital video services.”

PRR logo

The first thing that popped into my head is an apocryphal story about another Philadelphia-based company, The Pennsylvania Railroad (PRR or “The Pennsy”). The story goes that the management of the PRR saw itself as being in the railroad business – not the transportation business. It thus ignored investing in advancements such as over-the-road trucking and air transport, assuming there will always be a major role for railroads.

However, this dedication to the rails ended up with the PRR, once the largest public company in the world with more employees than the US government, laying bankrupt by 1970 with its assets distributed among Amtrak, Conrail, and others.

In recent years, Comcast has been in the forefront of trying to retain its relevance in the changing media space. This has been demonstrated by its acquisition of NBC Universal, to development of the X1 platform, to using in-home auto-authentication for TV Everywhere. Not all pay TV service providers have been so foresightful – but then again, few have Comcast’s deep pockets.

Avoiding the train at the end of the tunnel

It should be no surprise then that all pay TV services should be seeing themselves as deliverers of content – whether it’s through regular cable subscriptions, skinny bundles, or third party services delivered through broadband or mobile. Ultimately, the quality of service and excellence of user interface will win out – whether we end up in a totally “a la carte” world, or if the cable bundle morphs into some digital equivalent.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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O Canada, home of a la carte?

Roku with Canadian flag skinThe Hollywood Reporter just published an eye-opening story on the attempt in Canada to push “a la carte” channel subscriptions. In what should be no surprise – but it probably is to some people – the uptake on a la carte has not been impressive. Consumers are put off by increased pricing for their broadband, required equipment, and per-channel fees.

This is an enlightening case study for the USA. In conversations with folks outside our business, and too many within it, the opening assumption is that a skinny bundle with 20 channels should only cost something like 1/10 of a regular, 200 channel pay TV subscription. But there are a couple of things that few tend to consider…

First, in the the case of internet-based skinny bundles, cancelling the “triple play” pay TV subscription to go “broadband only” will result in a much higher fee for broadband service. For instance, Comcast’s low-end Performance broadband-only service has a list price of $75/month (potentially lower for the first 12 months via promos). This doesn’t include any required equipment fees, etc.

By comparison, Comcast offers a base level triple play, with 140 channels, higher speed broadband than the above, and unlimited calling for just $90/month. So a cord-cutter doesn’t “save” $90 a month by switching to a la carte, he or she only saves a small portion of that because of the loss of the bundling discount.

Second, unbundling networks either for pay TV or online skinny bundles means the consumer has to pay the full value of each network. If one uses CBS All Access, which costs $5.99 a month, as a benchmark for a upper tier entertainment network, then six top networks would run a consumer $36 a month. Interested in sports? Those networks are likely to be even more expensive.

Thus for the sake of argument, let’s say a ballpark cost for a broadband-only, a la carte, self-bundled TV service of six top tier networks would run something like $110 a month. Add in perhaps two of the three main SVOD services – Netflix, Hulu, or Amazon Prime @ $15/month each – and now one is at $140 a month. The consumer is able to get exactly what they want, but it’s not saving them much money on a net basis.

Just like buying pizza by the slice, or buying the individual items of a McDonald’s value meal, buying the elements of a bundled product will always cost more than the bundle. This economic logic seems to escape people when it comes to a la carte TV – maybe it’s because TV is such a personal service, or people don’t really consider how they receive TV until they actually do try to unbundle.

Unbundling the future

All that being said, I expect there to be an “a la carte” world ahead – for some people. It may even go down to a la carte at the series level. But I think for many people, “TV” (or premium video, or whatever you want to name it) will continue to be a bundled product, whether it’s provided by the evolved versions of today’s MVPDs or dMVPDs. Most consumers don’t want to worry about 20 separate subscriptions and trying to figure out what streaming service they need to turn on to watch a particular program. There will always be a place in the market for services that make consumers’ lives easier.

David Tice is the principal of TiceVision LLC, a media research consultancy.
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