Can Sony Bounce Back?

Can Sony become the innovative leader again. Consumers once turned to Sony for its Walkman, Handycam, and other products and the Sony brand was synonymous with technological superiority and top of the line product. Sony indeed produces a very expensive HD TV set, but it is losing share quickly to other rivals that are bringing lower price and innovation into the home. So what is Sony to do?

"Sony’s chief executive, Howard Stringer, has a grand idea: an all-in-one online network that pipes Sony’s films, music, games and other content to its TVs, Walkmans and PlayStation game machines." But isn't Apple already doing this? What's so great and different about this. Stringer has been there for a while but each of its product line is losing quickly to others. Playstation to Wii and X Box, Walkman have already lost the battle to ipods, and LCD TV to Vizio and LG, and Handycam to Cisco's acquisition of the flip.

Sony has much more to worry about! Connectivity is great, but consumers are not using Sony products. It's time for some innovation and state of the art products to regain market share.

NBC To Have A New Owner

Vivendi is out, Comcast is in. "Comcast Corp. agreed to take majority ownership of NBC Universal from General Electric Corp. in a complex deal valued at more than $30 billion, ending the conglomerate's more than two-decade rule over the peacock network and satisfying the cable giant's push to own more content."

I remember when RCA owned NBC and when it was sold to GE, Dave Letterman tried unsuccessfully to deliver a gift basket welcoming his new owners. Not well received by GE but certainly great television. That awkward relationship between the NBC and GE has remained ever since, with creativity often hitting a wall with Six Sigma. So an era is finally ending and another one is poised to begin. Should all the legal issues be resolved, Comcast will be the next owner of NBC.

So what does it mean for the broadcast entity and its library of cable networks? Will Bravo, USA, et al become the favorite kids while NBC, the broadcast channel and its affiliated stations around the country, are treated more as Cinderella was to her step mother? Will they simply be cast aside or embraced? Certainly the NBC Sports entity has value as a competitive product to ESPN, but what of the news division? And how can Comcast the distributor of cable, telco, and hi speed partner with ESPN on one side of its business and compete with them on another? I'm sure Disney-ESPN, Verizon, AT&T, and other companies as well as the FCC will have lots to say about this sale as well.

Change is coming but how it shakes out is far, far from over!

Rent or Buy, You Tube Goes After iTunes

Would you rather pay $2 to download and own content or pay $2 to simply stream and rent it. That seems to be the choice that You Tube is bringing to the public. Free content works for only so long and on-line advertising revenue alone isn't enough to support the venture. So next step for You Tube, on-line rental. "Google is talking to networks about a pay-per-episode plan that would put it in direct competition with similar offerings from Apple's iTunes and Amazon, according to MediaMemo, an industry blog that first reported the talks." For Google, it's another opportunity to build a revenue model. For Apple and Amazon, it should only remind them that other competitors are out there ready to strike. Hulu and Fancast might just be next.

Certainly, Google has the deep pockets to test the water and doesn't think logic should get in the way of a potential revenue stream. Will it pay off; probably not but then the next step will be to convert from stream to download or monthly subscription. And this could lead to some nice competition and perhaps lower pricing in the long run for the consumer.

"I'm Outa Here"; Vivendi Agrees to Sell NBC

Money talks and Vivendi walks! GE found the number that Vivendi took to sell its 20% back to GE and opening up round two, a majority stake to Comcast. "Under terms of the deal, G.E. will buy Vivendi’s 20 percent stake in NBC Universal for about $5.8 billion. It removes one of the few remaining hurdles in its plan to sell control of the television and movie company to Comcast in a $30 billion agreement that reflects the changing landscape of broadcast television." But what does it mean for NBC. Is it a good thing having a cable distributor as your owner or is it simply "out of the frying pan and into the fire." Business can take many funny turns.

A potential sale of NBC to Comcast will not be an easy one and will come with many hurdles. Expect FCC scrutiny and perhaps a number of lawsuits from other distributors and programmers weighing in on unfair competition. I suspect that a sale will also result in a dismantling of NBC properties. While the cable nets and movie studio are highly valued by Comcast, it is hard to believe that they want to involve themselves in its other businesses, namely broadcast and theme parks. In order to get this deal approved, promises might have to be made to spin off these businesses into a separately traded company. Comcast gets what they want and NBC Network becomes a standalone company.

DVR turning Leno slot into a black hole

Headline in this morning's NY Post. But not a surprise; in fact the very reason NBC stated for turning 10pm over to Leno. DVR use is rising at 10 pm and Leno may be the cause. "DVR usage, which like live programming is measured by Nielsen Co., is up by 1.4 household ratings points in the 10 p.m. slot, while NBC has lost an average of 1.8 points compared to fall 2008." Consumers are turning regularly to their DVR and NBC saw Leno as a way to put a Live-like experience on in the spot to divert DVR activity and reach the live viewer. NBC says they expected lower ratings but felt that the lower revenue potential was offset by a much lower cost of production. While no one has seen their books on Leno, it clearly has backlashed on shows before it as well as the news and late night programming after it. And viewers are using their DVR more to watch Law and Order at 10p, by recording it at 9 pm.

Ratings for Leno slide and NBC is consistently in fourth place, except when they present Sunday Night Football. One more month and they lose that night, too. Perhaps that is the indication when Leno will end. Should we count January as the countdown to Jay Leno being axed. Just watch how reruns do better against Leno in December and that may further indicate that its demise is near.

New Media Can Save The Magazine Industry

News Flash - people still read! People seek content and view it in ways that adapt to their lifestyle. In that regard, we've become a nation on the go, needing the latest information in the shortest amount of time. Why is traditional mail decreasing; because, email brings us communication faster. And now instant messaging becomes faster than email. The same holds true for print magazines. Consumers want their content at their fingertips and they want it now. Digital media can save the print media industry.

And perhaps the magazine industry is finally taking notice. "Some of the magazine industry’s biggest names are on the verge of forming a new company that would allow them to take the digital future into their own hands. The company would make up one of the biggest alliances among rival publishers ever formed in print media, with Time Inc., Condé Nast and Hearst all expected to join, houses that together publish more than 50 magazines, including The New Yorker, Vanity Fair, Vogue, Time, People, Sports Illustrated, Esquire and O, The Oprah Magazine."

There is leverage in aggregating resources, building out common platforms and striking deals. The rise of the smartphone, iPhone, Kindle, and Nook, should pave the way for new revenue streams. Initially, the industry should follow the Wall Street Journal route and offer a digital subscription with the print one. Heck even DVDs offer a digital copy with their disc.

After NBC-Comcast, Who Is The Next M&A Target

Whether Vivendi agrees to sell its stake to GE or not, the media industry is poised for even more merger and acquisition activity. So what will be the next announcement. Is News Corp and Time Warner interested in buying MGM? Is Direct TV about to merge with AT&T or Verizon? Or will they buy a Sirius instead? And what happens to Cablevision after it spins off its MSG unit? Will it sell off its cable nets or finally sell its NY cable systems to Time Warner?

There are also a number of other independent cable networks in need of some leverage. Which one of those could be next to be bought by a bigger fish - HGTV, Hallmark, or others?

Always fun to speculate, and the announcement always seems to surprise some. But in a maturing industry facing consolidation because of technological and other changes, growth through acquisition is no surprise at all. The question remains, who is next.

Will Vivendi Approve the Sale of NBC

When M&A activity takes place in the open, it certainly lets everyone show their hands. As Comcast and GE try to set the value for a deal, the third party, Vivendi gets to pull some leverage. And so this sale will not be easy as Vivendi plays a bit of hardball. "General Electric and Vivendi are at least $1bn apart in their valuation of the French group’s stake in NBC Universal, damping hopes of a quick resolution to a stand-off that is holding up Comcast’s planned bid for a majority stake in the US broadcast, cable and film group."

Does Vivendi need the money? Does it pay to wait and see. They certainly have the option each year to sell their piece of NBC; do they really need to sell when NBC's value is depressed for many reasons. "The annual window for exercising that option opened on Sunday and will close on December 10. " This fourth place network has purposely put Jay Leno on at 10 pm. Was it done in anticipation of depressing the value of Vivendi's stake. GE would maintain ownership. Perhaps they felt that once Vivendi was out, they could raise its value with better programming again and then sell its remaining share to Comcast at an even higher amount. Sneaky, if true.

if Vivendi is simply using this leverage to force a higher price, does it make more sense to go out as an IPO. "Under an agreement struck when Vivendi sold Universal Studios to the GE-controlled NBC in 2004, Vivendi can force an initial public offering of its stake unless GE offers a more attractive price." Would Comcast still buy up shares in an open market or does the price become unattractive to them? This soap opera drama could become the stuff that might soon air where Leno now sits. Let's call this the new "Dallas" and wait for the Ewings to make a play. Now that was good TV.

Cable Has Spent $935 Million On CableCards

Set top boxes are supposed to require cablecards so that they can make sure that they do indeed work. "s intended to improve the way CableCards work in third-party devices, by forcing cable operators to use the technology themselves." Yet I doubt that if you ask a consumer what a cablecard looks like, they could tell you or show you where it is in their cable box. And ask a consumer if they have seen an ad talking about cablecards, and the answer will be no. Cablecards have yet to make an impact in the market. In fact, try to get a cablecard, say for a Tivo HD device, from your cable company and you face more resistance than support. They will remind you, that the card won't enable VOD and other interactive features that the set top box offers.

And truthfully, aren't we beyond the need for cards to verify third party boxes. Can't the consumer electronic industry with cable come up with algorithms that can insure that there is both security and functionality. In my estimation, cablecards are a joke, a delay tactic that has yet to make an impact in third party devices.

TVs are being equipped to get broadband connectivity directly to provide interactivity. Once connected, TV sets and game consoles are getting content without cable. Just yesterday, Sony announced their new agreement with Netflix. "Users can now access the DVD rental company's Watch Instantly catalogue on Sony BRAVIA TV W5100, Z5100, XBR9, and XBR10 series in 40-inch, 46-inch and 52-inch screen sizes; the Sony N460 Network Blu-ray Disc Player; and via Sony's BRAVIA Internet video link module." If you can't work with the cable industry, work around them. Who needs a cablecard? Truthfully, the cable industry cause they are risking their subscribers defection from premium channels, VOD, and perhaps even basic cable!