Update to an earlier post: The Future of TV on 1/29/13:

While, in my post I suggested viewers should pay for only what they watch, Verizon is telling programmers they only want to pay for viewers.  This could be the beginning of paying for only what you watch. Article below:

On 3/17/13, The Wall St. Journal Article:

Verizon Seeks to Shake Up Fees for TV Channels

FiOS Operator Presses Smaller Media Firms for Deals Based on Audience Size

By SHALINI RAMACHANDRAN

Verizon Communications Inc. is proposing to shake up the pay-television business based on a simple premise: it wants to tie the fees it pays to carry TV channels to how many people actually watch them.

Verizon wants to tie the fees it pays to carry TV channels to how many people actually watch them. Shalini Ramachandran reports. Photo: Getty Images.

Verizon, whose FiOS TV is the nation's sixth-biggest pay-TV provider, with 4.7 million subscribers, has begun talks with several "midtier and smaller" media companies about paying for their channels based on audience size, according to Terry Denson, the phone company's chief programming negotiator. He declined to identify any of the media companies.

Under existing arrangements, distributors like cable and satellite operators pay a monthly, per-subscriber fee to carry channels based on the number of homes in which they agree to make the channels available, regardless of how many people watch those channels.

"We are paying for a customer who never goes to the channel," Mr. Denson said.

USA Network

USA Network, which carries 'Suits,' got lower fees per household in 2012 than some lesser-rated channels.

Instead, Verizon would like to offer broad distribution of a "significant number of channels," including independent networks and smaller outlets. But each channel would be paid solely according to how many subscribers tuned in each month for a "unique view," or a minimum of five minutes, Mr. Denson said. Viewership would be measured by Verizon's set-top box data, not Nielsen ratings.

"If you are willing to give a channel five minutes of your time, the cash register would ring in favor of the programmer," Mr. Denson said. For smaller and independent channels that often aren't widely distributed, he said, this model would provide much broader exposure.

The proposal, if implemented, wouldn't reduce FiOS subscribers' cable bills, Mr. Denson said. But over time, he said, he hoped the shift would "stabilize retail prices for consumers," unless more people started watching smaller and midsize channels. If retail prices increase, "it would be due to consumer consumption," he said. Mr. Denson said that for the companies with which he has negotiated so far, his plan has been a "head-scratching thing" because "it's such a disruptive model." Discussions are "inching forward," he said.

The executive said he hasn't yet raised the idea with big media companies, which own most TV channels, but he planned to bring it up with them as contract renewals roll around. He acknowledged that it would be difficult to persuade the big companies to get on board and "just go cold turkey."

Verizon's proposal comes amid rising tensions between distributors and entertainment companies. With cheaper online-video outlets now offering a wide range of TV shows, several pay-TV executives have warned of the dangers that rising pay-TV costs could prompt consumers to disconnect.

To deal with rising costs, some distributors, such as Time Warner Cable Inc., have warned they will cull small channels with low ratings from their lineups. Cablevision Systems Corp.  recently sued Viacom Inc alleging that its practice in negotiations with distributors of bundling popular channels with less-watched outlets violates antitrust laws.

If broadly accepted, Verizon's proposal could have a far-reaching impact, potentially hurting revenue for some companies but improving others. Many channels owned by big media companies are available in nearly all the roughly 100 million households with pay TV, according to media researcher SNL Kagan. And while many of the most-popular channels earn the highest fees, big disparities exist, particularly for sports channels, which cable and satellite operators view as particularly valuable.

Last year, for example, Walt Disney Co.'s ESPN averaged one million viewers watching its programming live on any given day and up to seven days after broadcast. That was slightly less, according to Nielsen, than the 1.3 million who were watching USA Network, owned by Comcast Corp.'s NBCUniversal. Yet distributors like Verizon paid ESPN an average of $5.04 a month per household last year, according to SNL Kagan, while USA got just 68 cents a month.

ESPN declined to comment on Verizon's proposal, but a person familiar with the channel's thinking said its current fees reflect the high cost of sports programming and the fact that it can't sell rerun rights for sports, which tend to be watched live, unlike entertainment channels, which viewers increasingly watch at their convenience.

Disney drew the biggest share of cable-channel fees last year, with 20.5% of the total, according to SNL Kagan, followed by Time Warner Inc., and., which own such widely available channels as TNT and Fox News, respectively. (News Corp. also owns The Wall Street Journal).

Time Warner and News Corp. spokesmen declined to comment.

One industry executive said that while big media companies with sports channels are likely to resist it fiercely, Verizon's proposal could be attractive for other companies who argue that they have a bigger share of viewers than of fees.

Viacom, which owns channels such as Nickelodeon and MTV, has said that its channels represent 20% of the aggregate ratings of cable networks, but SNL Kagan data show it receives just 7.4% of total cable fees. A Viacom spokesman said that the company wasn't aware of Verizon's proposal.

One cable-network executive said that similar ideas have been floated in past years, but they never gained traction because distributors attempted to cap how much they would pay for highly rated channels. The executive said that "unless there is a giant seismic shift" in the TV landscape, the proposal is unlikely to gain much support from programmers.

Despite a sharp audience drop in recent months at most of the major broadcast networks and at several big cable channels, media-company executives have remained bullish about wresting big fee increases from pay-TV distributors for years to come.

Verizon's proposal and Cablevision's lawsuit, however, highlight a long-standing complaint of pay-TV distributors.

"It feels like certain content players who have a suite of channels attempt to lever the strong ones to prop up the weak ones…without any empirical data to show that these channels are actually viewed or wanted," said Verizon's Mr. Denson.

To implement its proposal, Verizon said it would provide the necessary set-top box data to programmers to report active viewers.

Mr. Denson said the proposal could be extended to include viewing on demand and on other devices.

— William Launder contributed to this article.

A version of this article appeared March 18, 2013, on page B4 in the U.S. edition of The Wall Street Journal, with the headline: Verizon Sends a Strong Signal on TV Fees.

Will Apple ever offer apps for their desktop?

Ever wonder why Apple doesn't offer apps for their desktop computers? Would this cannibalize their iPad strategy?  Are we all destined to move to a tablet connected to the cloud  i.e. Chromebook for $199?

What if Apple integrated the million plus apps into iOS for laptops, would this ignite sales for laptops?  I for one believe it would.  I'm tired of carrying or using 2 devices, a tablet and a laptop all the time.  Combine these 2 functions into 1 lightweight device and I'm sold. I think Google is onto something with Chromebook, what do you think?

POST OFFICE:
NO MORE SAT. DELIVERY

Today is a milestone for USPS as they announced no more Saturday delivery starting in six months, August 2013.

What took so long?  This government agency has known for the last five years that it has to change its cost structure dramatically, while they have continued to loose billions of dollars every year.

Let's hope they can follow some of the leading profitable European postal delivery services for making even more radical changes.

Do you think USPS should stay as government agency or go private?

SUPER BOWL

So the game is over, the crowds have left, the commercials have aired and Joe Flacco, the winning MVP quarterback, has visited Disney World.  What are we to learn from this Blackout Bowl and what can we expect in the future?

There is nothing more exciting than live sports especially, when there will be only one winner "Champion" for the next 12 months.  Hats off to the NFL for a fantastic show, this event will continue to be the premier most watched video event for many years to come.

Two questions remain: 
(1) When will the economies of scale stop paying out, today its close to $4 million for a :30 second video spot, will it be worth $8 million in 10 years?
(2) Noticed I said video, not TV, because in 10 years who knows what video platform will be used, maybe its not even invented yet and which format will be the most watched?

What are your predictions?

Hybrid Cars Go Mainstream

Would you have guessed that the Toyota Prius hybrid was the top-selling car in California?  Not me by a long shot, but it’s true.  Californians registered 60,688 of new the Prius hybrids in 2012, nearly one out of every five subcompacts.  California is always on the bleeding edge of conservation but going mass market with a hybrid?  This is a major inflection point in automotive history as the hybrid now becomes a major player in an automobile manufacturer’s stable of cars.

Have you driven one or been driven in one?  It’s a totally different experience from the quietness, no engine noise when in electric mode to the LCD info screen telling you how the car is performing in real-time.

My wife recently went shopping for a car, test driving more than 6 different models and makes but when she drove the Prius it was an instant decision on both car ride and price which at the time was $250/month for 36 months with no-out-of-pocket money.  Add in at least $100 per month in gas savings and she has a ride for just $150 per month.  No wonder hybrids will be going mainstream everywhere not just California.

What do you think?

QSGUXP52HBCJ 

Future of Retailing

America has been over-stored for more than 25 years, major retailers have disappeared like Circuit City.  Major retailers recently announced they are closing hundreds of stores in their retail chain as they should have done years ago but now have come to the realization that the Internet is forcing them to make the attrition.

I believe the future of retailing lies on creating "showroom" stores.  They would show only one unit per product they sell on the floor, thus substantially reducing the square footage required to build a store.  Kind of "back to the future" where catalog stores such as Service Merchandise were a multi-billion dollar enterprise in the 60's and 70's only to die a quick death to mass merchandisers like Walmart.  

This store format can work in our day because of the advances in technology and distribution systems to make it competitive again.

Each store would be equipped with multiple kiosks for instant online ordering and have minimal staff.  Product will be warehoused in one central location per city.  Orders would be drop shipped directly to the customer's home or to the showroom, same day or next day for pick-up.  Amazon is already building the infrastructure for this delivery system, they just haven't added the retail store piece of the puzzle.

How long do think it will be before we see a store chain operate like this?

QSGUXP52HBCJ

Fast Food Restaurants 

Its time for the Fast Food Industry to embrace the smartphone for ordering and payment.  This would save on labor and speed up the process.  When ordering inside, a customer just takes a table, logs into the local restaurant menu via the free WI-FI, selects their meal(s) and pays electronically via a number of payment services.  All the restaurant has to do is view the order on their order screen, prepare it and drop off at the customer's table.  Imagine the inline and employee time saved!  For ordering through drive-thru, the restaurant could replace the drive-thru cashier with a car-runner.  Customer parks car and stays in the car ordering via their smartphone.  

Do you think this is feasible?