As long as they keep paying for TV.

But even if consumers go for that deal, the TV guys need to make sure that advertisers buy in, too.

And that won’t happen until the TV guys can get some basic stuff right. Like counting eyeballs, no matter where they watch a show.

That could still take a while. Witness Comcast’s announcement yesterday, made at the cable industry’s annual convention in Boston, that it has been working with Nielsen on a plan to count viewers when they watched video on an iPad*, using Comcast’s Xfinity app.

For various technical reasons, this is much harder than you’d think, and the two companies have already been beavering away at this for 18 months. Now they’re launching a trial, and Comcast executive Matt Strauss is optimistic that they can work the kinks out by 2013, and advertisers could have true “multiplatform measurement.”

But that only works if all of the big pay-TV providers sign on to the new technology. And the media-measurement business is full of different tests and initiatives, all shooting off in different directions.

Last week, for instance, Spanish-language powerhouse Univision announced a “video neutral” deal with media-buying agency Starcom, which is supposed to mean Univision gets credit for its stuff no matter where anyone watches it. But the announcement describing the deal doesn’t explain how Univision or Starcom will track those eyeballs.

Meanwhile, Nielsen’s rival eyeball-counter comScore recently announced that it had its own technology in place to measure mobile devices like phones and tablets. And earlier this year it announced its own “multiscreen research initiative,” where it paired up with AT&T.

But comScore isn’t tracking any traffic on connected devices, like Google TVs, Apple TVs or Microsoft Xboxes. So if any of that really is taking off, that’s yet another headache.

Shouldn’t this stuff be easier? After all, we’ve figured out how to get the video all of these places — why can’t we count it, too?

On the other hand, recall that the iPhone is still a mere five years old, and the iPad is only two. That’s a blink of an eye for the measurement guys, who move deliberately because there’s billions of ad dollars at stake, no matter what they do. But they may still have to speed things up.

*Or, theoretically, on another tablet.

(Image courtesy of Shutterstock/Liewluck)

At least that’s the arc their employers at Discovery Communications have planned for them.

The cable heavyweight has watched the pair progress from bloggers on its “How Stuff Works” site to a duo whose twice-weekly “Stuff You Should Know” audio shows generate more than a million downloads a week.

Now it’s trying to transform them into on-camera talent, by giving them their own series on its Science Channel. And if that works, it wants to repeat the process with other digital natives.

“I think it’s a template,” says Conal Byrne, who oversees editorial operations for Discovery’s digital properties. “We can do more of this.”

Discovery isn’t the only cable network trying to mount TV shows on the backs of popular podcasts. Next month, IFC will start airing “Comedy Bang Bang,” a sketch series based on the (great) weekly improv show of the same name, hosted by writer and actor Scott Aukerman. Next year, the network will do the same thing with Marc Maron, a veteran comedian who revived his career by  interviewing other comedians in his garage.

Those shows revolve around professional entertainers who have been at it for a long time. Clark and Bryant, meanwhile, are writers who can carry on an entertaining conversation. Their podcasts work — the show makes consistent appearances on iTunes’ Top 10 podcast rankings — because they’ve got a gift for turning arcana into an hour of laconic banter. (Recent topics: What Interpol actually does; why your body odor is so unpleasant.)

But they’ve only spent a few minutes in front of the camera, mostly for a couple dozen short clips they shot for Science in the last year or so.

“We started out being terrified by TV,” says Clark. “If you go back and watch our first cable appearance, it’s hilarious. I hadn’t been that scared before in my entire life, and you can see it. I was looking off camera all the time. Chuck was rocking back and forth.”

Adds Bryant: “We’re both really comfortable in that podcast booth, with no windows and no one watching.”

Discovery isn’t rushing them. It has only committed to making 10 30-minute episodes, which are in preproduction now and slated to run early in 2013.

The network won’t talk about the money it’s spending on the project, but based on the pilot it created earlier this year, they won’t be drowning it in cash. The concept is pretty straightforward — the two guys tape a podcast, just like they always do, and the camera goes behind the scenes to illustrate its “fictional life.”

The risk is that what makes podcasts work in general — that sense of conversational intimacy  – will go away. But everyone involved seems aware of that pitfall, and insist they’ll avoid it by making a new show, not a video version of the old one.

“I think one of the mistakes that people do is that they try a television show out of something that exists online, and we never wanted to do that with Chuck and Josh,” says Debbie Myers, Science Channel’s general manager. Discovery wouldn’t provide an embeddable clip of the pilot, but you can get a sense of what they’re up to with some of the interstitials they’ve already shown on Science (see below).

The notion of taking someone who’s popular on the Web and trying to turn them into “real” media stars isn’t new. But while we’ve been talking about the idea since the mid 90s, we still don’t have that many examples. And it’s even rarer for big media conglomerates to harvest their own digital talent — usually because they don’t have much on hand to begin with.

But Discovery plans to keep Clark and Bryant generating podcasts twice a week, even as they start producing TV. For starters, Discovery is hoping that they’re able to bring some of the 500,000-plus fans who listen to the podcasts over to the new shows. Even adding 20 percent of that fan base would be a big deal for Science.

And finding talent that can work on multiple platforms is part of the reason Discovery plunked down some $30 million for Revision 3, the Web network/studio.

I’m not sure the gut-busting dudes from “Epic Meal Time” are going to be on a Discovery channel anytime soon. But if they do, they’ll already be working for the network.

So why did the number of pay-TV subscribers increase in just the last three months?

They didn’t grow much — a modest 422,000 subscribers, for a very modest 0.2 percent growth rate — but they still grew.

Those numbers come from Bernstein Research’s Craig Moffett, a longtime skeptic that “cord-cutting” is a real and pervasive problem for the cable guys (at least for now). It’s not the first time he’s shown evidence of barely-there growth for cable TV — last quarter, for instance, he gathered similar numbers.

But his numbers do conflict with other reports that show evidence of cord-cutting. Earlier this month, for instance, Nielsen said that pay-TV subscribers had shrunk by 1.5 million in 2011.

The easiest way to reconcile Moffett’s numbers with other reports is to note that almost all of the analyst’s data comes from the publicly traded pay-TV providers themselves — like Comcast, Time Warner Cable and Verizon — in the reports they offer up to shareholders. Most of the other stuff you’re seeing comes from polls and surveys.

Here’s his data. You’ll need to click the image to enlarge it:

But what about all of you folks who tell me, over and over, that you’ve ditched cable for some kind of combo of Netflix, Hulu, Apple TV, or even pirate streams? Surely I’ll hear from some of you again, just as soon as I publish this.

And I believe you folks, too. I can certainly imagine many scenarios where tech-savvy people — and even not-that-tech-savvy people — are able to satisfy their video urges without paying for a TV subscription. But my operating theory, for now, remains my vegan analogy: “They’re real, and they’re out there. They’re particularly notable in certain places like New York, the Bay Area and college towns. And they over-index at certain Web gathering places, like this one. But McDonald’s sales are still chugging along.”

Eventually they settle, and you, the pay-TV customer, ends up paying more.

And that’s what’s happening in the latest dustup between Dish Networks, the satellite TV service, and AMC Networks, the programmers now best known as the guys who bring you “Mad Men,” “The Walking Dead” and “Breaking Bad.”

The slight twist here: For argument’s sake, at least, Dish is saying that because AMC is selling digital versions of those shows to other outlets, its hit shows are worth less to Dish subscribers. “It’s actually devalued,” says Dish chairman Charlie Ergen.

The fact that networks are selling or giving away their stuff online has been a minor but growing issue in carriage fights for a while now. But this is the biggest stink that a cable/pay TV provider has made about it, at least in public.*

Dish first brought this up via a press statement last week, but Ergen went on about it at length today during the Dish earnings call.

It’s worth reading. I’ve cleaned up his comments just a bit for clarity (note that AMC Networks includes multiple channels, including AMC, IFC and Sundance):

We have very, very specific viewer measurement. Much more granular than somebody like Nielsen might have. So we’re able to watch our customer base and — we realize we skew a bit more rural — between [AMC Networks] programming, they have very, very low viewership, outside of a few obviously popular [shows] on AMC.

But those particular channels are also available to our customers on a variety of other sources, like iTunes, Amazon, Netflix and so on.

One of the things that programmers have done is that they’ve devalued their programming content by making it available in many multiple outlets. So, when someone asks for price increases …

We just look at it. Our customers are not really saying “We want to pay more money,” they’re saying, “We want more flexibility in our programming, and we don’t want to pay more.”

And when you look at that from a timing perspective, that’s just a contract that we can change. And we believe that the product is actually devalued. Not that there’s not some good programs, but that they’ve been devalued, because you can get it in multiple ways. And customers are asking for more flexibility, or have more flexibility to get the programming. So it’s not quite the same as something that was exclusive.

So we look at it and say, “This is a good opportunity to make a good business judgment call.” And obviously there’s a price where an [AMC Networks] product makes sense. We just don’t think that’s where we are today.

First things first: Obviously it makes the most sense to dump all of this into the “posturing” bucket, and treat it accordingly. The easy money here is to bet that, yet again, Dish and AMC will strike a deal, which Ergen, at the end of his remarks, explicitly says is on the table.

That said, a couple of points:

• Most of the big TV programmers seem to agree with Ergen’s point when it comes to free repeats of recent shows. Which is why they have been taking stuff that they’ve been giving away via outlets like Hulu, and either pulling them off the Web entirely, or requiring that customers “authenticate” — prove that they’re paying for cable or satellite TV —  in order to see them without delay. Note that Dish was the first pay-TV service to participate in the Fox authentication plan last summer. (Fox is owned by News Corp., as is this Web site.)
• TV programmers don’t seem to think that iTunes’ and Amazon’s a la carte sales of shows that aired the night before are devaluing their product. Because they’re still selling them, and by all accounts there doesn’t seem to be a ton of volume for those episodes. If there was, advertisers would squawk long before pay-TV providers would.
• The really touchy subject here is what happens to prior-season episodes of AMC hits like “Mad Men” and “Breaking Bad” on Netflix. Netflix has been arguing that these episodes are big draws for its customers, and that this is good for networks like AMC, because people discover the old shows on Netflix and then watch the new ones as they air. There is some evidence for this, too.
• But there is also evidence that Netflix repeats hurt some cable programming — like kids’ shows — too. And that leads to speculation that Viacom and Disney will pull back their shows from the service or raise prices when their contracts expire — even though Netflix is already paying big dollars for them. Netflix will have its hands on “Mad Men” and other AMC shows for at least a couple of years more. But it will be interesting to see what Dish’s complaint means for the renegotiations.

*There is also a wrinkle involving a lawsuit between Dish and a former AMC subsidiary, but that’s par for the course, too. All of these guys sue all of these guys, all the time. No recession, ever, for TV attorneys.

Here’s a proof point: Discovery Communications, parent of the Discovery Channel, has purchased Revision3, a Web video start-up that makes and distributes its own shows, like “Tekzilla” and “Epic Meal Time.”

Discovery isn’t disclosing a purchase price, but multiple sources familiar with the transaction tell me the cable guys will pay around $30 million for the start-up. The company ended up raising about $10 million during its six-year lifespan, with the last chunk coming from a group of investors that included Mark Cuban.

All of Revision3’s 50 employees are supposed to stay on, and there’s a chance that they could end up pulling down sizeable earnouts. But they probably won’t, because that’s the nature of earnouts.

TechCrunch reported the deal talks earlier this week.

This deal isn’t an “acqhire,” as Discovery intends to keep Revision3 operating out of its San Francisco headquarters. The idea is that Revision3 will continue to make its own Web shows, which generate some 100 million streams a month, and that Discovery will eventually figure out ways to sync up some of its own stuff into the mix.

“We want them to continue doing what they’re doing, and to continue developing native digital talent,” says Discovery’s digital boss JB Perrette. To date, Discovery hasn’t done a lot with Web video, and has traditionally kept most of its cable programming off the Internet. That has changed a bit recently, via library deals with Amazon and Netflix, and may ramp up a bit more in the future.

The deal comes as big Web players are trying to convince advertisers that their video stuff is just as good as TV — see Google’s big show in New York last night.

But Discovery thinks there’s still a distinction between TV and the Web — which is why it wanted to buy Revision3 in the first place.

“We produce content on a $500,000 to $750,000-an-hour scale,” Perrette says. “Producing something at a tenth of that cost means it has to be very different.”

Meanwhile, Revision3 CEO Jim Louderback, who used to write blog posts with titles like “Cable TV Is Screwd,” now says there’s life in the cable business, after all. “One’s not going to destroy the other,” he says. “I don’t think any new media destroys the other. I think it just creates its own path.”

But people are still watching a whole lot of TV — perhaps as much as ever. So the more nuanced answer is that some people are swapping out the Web for TV, some of the time. And other times Web video consumption may end up leading to more TV-watching.

Here’s some evidence supporting that idea: New data from Bernstein Research that tracks TV viewing habits for Netflix streaming subscribers. It shows a drop in kids’ TV viewing — but an increase for networks like AMC and FX. Presumably that’s because Netflix users are discovering old episodes of shows like “Mad Men” and “Sons of Anarchy” on Netflix, which is prompting them to watch new episodes of those shows on cable.

This chart shows a dropoff for programming on kids’ networks like Disney and Nickelodeon:

And this chart shows spikes for AMC whenever the network shows new episodes of shows that have old episodes on Netflix:

Bernstein put its research together using data from TiVo users. So on the one hand the numbers are pinpoint accurate, since they’re tracking actual TV usage. And, on the other hand, it may not be representative of the entire country.

Still, it makes intuitive sense, and certainly syncs up with the way the Web gets used in our house: Our kids are unaware you can do anything with an iPad other than watch “Backyardigans” and “Dinosaur Train.”

Meanwhile, I just plowed through the first four seasons of “Breaking Bad” on Netflix (and iTunes) last month — and am going out of my mind waiting for the fifth season to start on AMC this summer. Let’s cook!

Here’s that snapshot, from the Interactive Advertising Bureau’s 2011 report.

Two important takeaways:

• Search ads (read: Google) are not only as dominant as ever, but even more so. They accounted for 47 percent of digital ad spend in the U.S. last year, up from 45 percent the year before.
• Mobile ads, which are getting a lot of attention right now courtesy of Facebook, Apple, Google and everyone else, are still fairly small. Last year they accounted for just 5 perent of total spend, or $1.6 billion — less than a couple Instagrams. But they’re growing very fast, up 149 percent over 2010. Which explains some of the ravenous appetite for Millennial Media shares when that mobile ad company went public last month (still, like most other tech IPOs, MM has given up ground since its initial pop.

Bonus chart! Here’s some red meat for people who like to talk about The End Of TV, which they are sure will be brought about by the Web. Lookit here! Last year, Web ads triumphed over cable!

Except this one comes with important contextual caveats:

• Cable TV has two revenue streams — one of them comes from advertisers, and the other comes from you, the cable TV subscriber, whose monthly bill gets redistributed to cable programmers in the form of affiliate fees. And those affiliate fees are still climbing.
• You won’t really be able to argue that the Web is beating TV until TV advertisers start moving their budgets, or big chunks of their budgets, to the Web. And that hasn’t happened yet, which is the reason the Web guys are now trying to ape the TV guys.

Here’s the promo, released this morning. The first episode, featuring Assange chatting up bird-flipping Super Bowl performer M.I.A., runs April 17. WikiLeaks says you should be able to watch it on the Web and via Russian cable news network RT, which you can get in the U.S. via the Dish Network and on some Comcast and Time Warner Cable systems.

WikiLeaks says Assange has taped 12 of these so far. I hope one of the guests turns out to be Saturday Night Live’s Bill Hader.

Oh. Sorry.

Turns out that Bravo’s upcoming “Silicon Valley” is produced by Randi Zuckerberg, described by a press release as an “Internet guru.” (Weirdly or not, it doesn’t mention that until last summer, she worked at Facebook, or that her brother is her brother.)

So maybe it will be good, after all.

Apologies for the long pre-roll ad that comes before this clip, which is also an ad. The Silicon Valley part kicks in at 1:20:

So, who wants to identify these future “techie superstars”? AllThingsD’s current techie superstar Liz Gannes flagged The Next Web’s Hermione Way for me — she’s the one who sounds like her name might be Hermione — but the rest are unknown to this cranky old New Yorker. Help me out, crowd!

But that’s not all! Bravo is doubling down on techie glamour with a second show, which will follow around Cheezburger Network’s Ben Huh and the rest of his LOLcat-ing crew. Working title is … “Huh?” Really. Sadly, no teaser clip here. But I am 100 percent confident that Kara Swisher is watching every minute of both of these.

(PS: There’s an Easter Egg at the end of this preview clip, at least for fans of Gawker’s fameball coverage, circa 2008.)

That’s the scenario Barclays analyst Anthony DiClemente sketches out in a new note. He figures that Apple could certainly come up with a cool piece of hardware — he imagines one that looks like a “large-scale iPad” — that would tie together the Internet with Apple’s existing suite of iOS apps and services.

But DiClemente doesn’t think Cook will be able to break open the traditional cable TV bundle. Which means that if you watch TV on Apple TV, it’s going to look a lot like the TV you’re already watching now. And it will cost the same to get that stuff to your set.

DiClemente is a media analyst, not a hardware guy, and his report focuses primarily on the reasons it will be so hard for Apple — or anyone — to truly disrupt the TV programming/distribution business. But here’s some of his speculation about the box, which is similar to other industry guesses:

• He doesn’t think it’s coming in 2012.
• He thinks it will use Apple’s Siri voice control as a “groundbreaking interface.”
• He imagines it could sell for $1,500.
• He thinks it could be “so much more than a TV — including gaming, video communication, content delivery, apps, computing and all the capabilities of the current Apple TV.”

All good, so far. But again, the problem will be when it comes to the TV programming part.

DiClemente argues, convincingly, that TV programmers don’t have any incentive to stop selling the bundles they’re already selling for big dollars (in seven- and 10-year deals).

The “affiliate fees” that cable providers pay for the bundles are now up to $30 billion a year, or about $30 per subscriber per month. And programmers aren’t going to do anything that weakens that revenue stream.

So whether Apple ends up working with the cable providers like Comcast and strikes deals that use Apple TVs in lieu of a cable box, or whether Apple works with the cable programmers like Viacom and uses Apple TVs for a cable-free “over the top” service, the result would be the same: Consumers would have to pay a big monthly fee for a big package of TV channels, most of which they wouldn’t use.

Here’s a screenshot of the Netflix CEO’s most recent post, where he gripes that Comcast won’t let its subscribers watch HBO Go — the pay channel’s “TV Everywhere” app — via an Xbox 360, and goes on to talk about the way the cable provider enforces its broadband usage cap.

Both of these complaints are the kind of thing that most people don’t care about, but vex a certain kind of technically savvy user. They are important, though, because they underscore some of the tensions between programmers and providers that have made “TV Everywhere” more conceptual than it ought to be, nearly three years after Time Warner and Comcast announced a grand launch plan.

Still, this is one of those stories where the form matters more than the content — it’s just interesting to see the head of a public company handling company business on Facebook. Then again, Hastings happens to be on Facebook’s board of directors.

Also note that Hastings doesn’t just gripe about Comcast on Facebook. Here he is a couple days ago, praising the company’s new Xbox app, and complimenting/wooing Comcast executive Sam Schwartz. And then he gripes, just a tiny bit, about Streampix, Comcast’s sorta-kinda Netflix-killer.

Another possibility: Over time, Apple simply builds an Apple TV set right in front of us, in bits and pieces — so slowly that we don’t really notice it.

Take the remote, for instance. PatentlyApple has its hands on an Apple application for an “advanced TV remote” that would offer some cool features. Like the ability to automatically scan your other devices and figure out the right code to control them, instead of requiring users to use a combination of manuals and trial and error.

At least as important is that, while Apple’s patent, filed back in 2010, could be a standalone device, the application makes it seem much more likely that users will use their iPhones, iPods or iPads to control their TVs.

Which makes sense, because Apple is already offering a “Remote” iOS app that handles some basic functions for its existing Apple TV. That is: There’s a good chance you’re just a download away from owning a bona-fide Apple TV remote already.

This kind of incremental building may be even more important on the content side, which is the real key to an Apple TV: If it’s simply a very nice screen that offers the same content choices that TV viewers already have, then it’s just a very nice screen. And for years, Apple has been making attempts to wrangle different TV choices, at different price points, without much success.

But instead of one grand, sweeping video package, Apple may end up just cobbling together an array of offerings, piece by piece.

To wit: The latest refresh of Apple TV didn’t offer any new content, but it did make it easier for Apple users to buy the content that’s already there. Anyone with an iTunes account can subscribe to Netflix, and soon, Major League Baseball’s MLB.TV service, directly from Apple, without having to pull out a credit card again.

Netflix + iTunes + baseball games won’t make up a full suite of programming choices for most people. But now that Reed Hastings and Bob Bowman have agreed to let Tim Cook handle their billing for them, more media moguls will likely follow in their footsteps. Get enough of them in there, and you could end up with something really compelling.

That’s the first time Netflix has handed off its customer billing to a third party. And it’s a significant step for Reed Hastings and company.

For starters, it will make it that much easier for Netflix to sign up more users. But it also sets up a model for a possible Netflix-cable provider deal.

Reuters reported yesterday that Hastings was looking to bundle his service with pay-TV operators, and to deliver movies and TV shows through cable providers’ set-top boxes. But people familiar with his thinking tell me the Apple TV model is a more plausible tie-up: Netflix would be happy to let cable operators take care of billing, but wants to send its video over the Web, just like it always has.

That assumes that the cable guys buy the argument Hastings has been making for some time — that his service isn’t for cord-cutters, but for people who like watching lots of video, and don’t mind paying another $8 for what is essentially another cable channel.

How much would Netflix be willing to pay to let a third party market its service and take on billing duties as well? I don’t know.

But I have a hunch that that it’s less than the 30 percent per month that Apple has previously required from subscription services that want to let users sign up via its iOS devices.

One hint: Though you’ll now be able to sign up for Netflix using Apple TV, you still won’t be able to do that with Apple’s iPhones, iPads and iPods. Those devices will still require you to sign up somewhere else before you can stream video on their screens.

Worth noting that Netflix isn’t the only outside service handing over billing to Apple. Major League Baseball is doing the same thing with its app, and presumably we’ll see more down the line. Curious to see if Hulu Plus joins in.

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Latest example: It appears that the pay-TV guys actually increased their subscriber totals last quarter. Not by much — something like 240,000 new accounts, which translates into a growth rate of 0.2 percent — but an increase is an increase.

Chart via Bernstein Research (click to enlarge):

So what do you want to make of that? Not much, probably — just like the subscriber declines we’ve seen in previous quarters haven’t meant that much. If we saw a sustained move in one direction or another, that would be meaningful, but for now it’s more or less a flat line.

The video service, if approved, would move the Mountain View, Calif., company into closer competition with cable and satellite companies such as Time Warner Cable Inc. that sell cable-TV service in Kansas City.

Read the rest of this post on the original site »

But if Comcast wants to, it can change that overnight, as The Wall Street Journal’s Sam Schechner reported yesterday. The cable giant’s new content deals allow it to sell its stuff nationally, to anyone with an Internet connection, if it wants to.

Comcast insists publicly that it has no interest in doing that. Privately, its executives say the same thing. They say they can’t figure out how to market and support a $5-a-month digital subscription service to noncustomers and still make money.

What if they added more content and sold it for $8 a month, like Netflix does? “That still wouldn’t work for us,” one of them told me yesterday. “We can’t figure out how it works for Netflix, either.”

So if things don’t change, then Streampix will work primarily as an anti-churn tool for Comcast — a carrot they’ll dangle to keep current subscribers happy. And it may also keep a few of them from signing up for Netflix, or renewing the subscription they already have.

Which means it will join the growing number of Netflix killers that aren’t really Netflix killers, because they don’t have the same breadth of content, or are only available to a certain number of customers.

Over the last couple of years, Amazon, Hulu and Dish/Blockbuster have all launched Web video subscription services that offer Netflix-like services. But, so far, none of them have really gone head to head with Reed Hastings.

Later this year, though, Verizon and Redbox will begin selling their own Web video service, and the companies have been very clear that that one won’t be limited to Verizon customers.

And it will definitely feel like a competitive service. There’s a good chance, for instance, that movies from the Viacom-backed Epix pay-TV channel, which currently run on Netflix, will appear on the Verizon service, too.

So that’s one full-fledged (potential) Netflix killer launching this year. And another one that might turn into one, with a flip of the switch. That ought to keep the Netflix executives, and investors, occupied for a bit.

How then to explain Cisco’s strong denials of an interest in selling — and its reaffirmation of love for — the set-top box business it got as part of its $7 billion acquisition of Scientific Atlanta six years ago?

To be clear, Cisco is no longer in the business of actually making these boxes. It unloaded the Mexico-based manufacturing portion of the business to Taiwan’s manufacturing giant Foxconn as part of its sweeping reorganization last year.

The “Cisco is selling” story appeared both in the online trade publication Light Reading and also in the New York Post (which, like this Web site, is owned by News Corp.)

This is a familiar rumor that crops up from time to time. The last time was in the fall, and the source was a speculative report in the Atlanta Business Chronicle.

Typically, companies can ignore this type of chatter and dismiss it with the standard “no comment on rumor and speculation.” But seeing how this is the kind of rumor and speculation that often turns out to be true, and as such has a way of sapping the morale of otherwise productive employees, Cisco sought to get in front of it by professing its love for its set-top box unit in a statement to Light Reading.

CEO John Chambers recently stressed his commitment to set-top boxes even as the business dragged down Cisco’s overall gross margins. Analyst Sanjiv Wadhwani of Stifel Nicolaus estimates that Cisco’s gross margins on set-tops are in the mid 30 percent range, which is about what you’d expect for competitive hardware of any kind, but it’s also half of what Cisco gets across the rest of its business. As such, a sale would boost Cisco’s gross margin overall by about 1 percent, he said in a note to clients today.

During a conference call to discuss earnings earlier this month, Chambers said Cisco is “very much committed to this marketplace.” The point for sticking with it is to help customers move from old-school set-top boxes to IP-based products like Cisco’s Videoscape, he said. Presumably, the transition work means holding on to the set-top box customers.

But if you’re one of the writers who fell for the latest bit of rumor-mongering — and who doesn’t once in awhile? — you’re probably quoting Emily Litella from 1970s-vintage “Saturday Night Live” and sheepishly saying, “Never mind.”

Some of the college basketball tourney’s games will only be available to Web users whose cable providers have deals with Turner Sports, or those who pay a $3.99 one-time fee to access the games on PCs, Google/Android and Apple/iOS devices.

Games that CBS broadcasts, though, will still be available to anyone with a Web browser, through the network’s own site.

Here’s the practical breakdown, nicely summarized by BTIG’s Rich Greenfield (registration required):

• CBS will stream the games airing on the CBS Network throughout the country live on CBSSports.com for free. Consumers will only be able to watch on PCs/Macs, with no tablet/smartphone access.
• TBS, TNT and TruTV will stream the games airing on each network live at TBS.com, TNT.tv and truTV.com for consumers who authenticate their respective MVPD service provider (currently all major MVPDs authenticate these network Web sites, except Time Warner Cable). As with CBS, the games will only be available via PC/Mac (no portability).
• Complete access to March Madness on Demand via PC/Mac, smartphone and tablets with interactive features, regardless of whether you have subscribed to MVPD service, will cost a consumer $3.99 (one-time fee for the whole tournament). Streaming online and across portable devices will be available from the selection show through the championship game.

A few more notes: CBS and Turner split the games, so you won’t run into the paywall every time you want to watch — Turner will have 41 of the games. And as Greenfield notes, most pay-TV operators have deals with Turner, which says that means about 75 million homes will have Web access via “authentication.” That said, if you’re planning on watching the games that way, better prepare now, by hunting down your subscriber info, etc. — the process isn’t nearly as easy as it ought to be.

Big picture: This is a switch from the precedent CBS established in 2006, when it started streaming all of the tournament’s games on the Web for free (for three years before that, it had charged around $15 to watch online).

Each year, the network loudly trumpeted the number of eyeballs and ad dollars that Web streams attracted, while arguing that it didn’t hurt traditional TV ratings at all. Last year, you could even watch the tournament on an iPad for free.

But it’s in keeping with the broader move we’ve seen from big media companies, who are pulling back on free Web video. Back when Hulu launched in 2008, it seemed that most big TV networks were going to put all their shows online, but in the last couple of years, we’ve seen the pendulum swing the other way, as networks tie “free” Web TV to pay-TV subscriptions.

But now that we’re in an age where celebrities and brands and businesses can speak directly to consumers, via platforms like Facebook and Twitter and YouTube, does that give someone like Stewart even more opportunity?

Stewart and Lisa Gersh, who runs Martha Stewart Living Omnimedia, batted those ideas around with Walt Mossberg at D: Dive Into Media last month.

Stewart pointed out that her publishing group immediately embraced the iPad, where it has produced some beautiful and popular tablet editions of her magazines. And the company says it has been able to use Twitter and Facebook effectively as well.

But Stewart, whose Hallmark TV deal is ending this year, will probably look to get another TV show up on the air instead of jumping feet-first into Web video. You can see her entire interview here:

]]> http://allthingsd.com/20120215/martha-stewart-on-the-web-a-good-thing-the-full-dive-into-media-interview/feed/ 0 http://allthingsd.com/20120214/why-would-you-pay-12-a-month-for-free-tv-aereo-ceo-chet-kanojia-explains/ http://allthingsd.com/20120214/why-would-you-pay-12-a-month-for-free-tv-aereo-ceo-chet-kanojia-explains/#comments Tue, 14 Feb 2012 19:49:47 +0000 Peter Kafka http://allthingsd.com/?p=174418 If you want to watch TV that comes from one of the broadcast channels, you’ve got options: You can get it for free, using an old-fashioned over-the-air antenna. Or you can pay for it as part of your cable TV package.

And now, if you live in New York City, you can pay Aereo to send it to your laptop or phone for $12 a month.

Aereo debuted today with a press conference, where reporters had lots of questions about the mechanics of the service (which are really interesting, and involve an array of thousands of dime-sized antennas, per the images below) and its legality (also interesting, and also dependent on the idea of each antenna “belonging” to an individual subscriber).

But the core question is why someone would use the service: Assuming it works as advertised, would you use it to supplement your existing TV service, or use it to replace some of the TV you’re already paying for?

The former, for now. And maybe, down the road, you could do the latter.

Today, Aereo makes the most sense as an add-on for TV super-consumers — the ones who have digital cable and HBO and Netflix and Apple TV and want to watch even more stuff on more screens.

Since it’s only delivering broadcast TV, Aereo won’t let you get lots of shows you like. But it will let you get a lot of shows you do like, and it will let you access them in new ways.

For instance: For various odd reasons, the broadcasters haven’t been able to figure out how to serve those people live TV on the go, to their iPads and iPhones, and Aereo will do that.

But Aereo’s ambition is much bigger. IAC CEO Barry Diller, who led a $20 million funding round, says Aereo will eventually be a “wedge” that will force the TV industry to give up the bundle: The idea is that eventually you’ll start by paying Aereo $12 a month for a bunch of TV, and add a series of channels and programs that you like on top of that. In theory, you’ll still end up paying much less than you do now.

CEO Chet Kanojia is slightly more diplomatic: “It’s going to start the process of putting the thought in people’s mind that says ‘I have other options.’”

Alternate scenario: If Aereo isn’t shut down by a legal challenge, it will act as a loud starting gun in the ear of cable TV providers and broadcast networks, prompting them to get their act together.

There’s no reason that, say, a Comcast cable subscriber shouldn’t be able to watch NBC or any other channel they get on their TV, live, on the go, on their iPad. And if Aereo finally convinces the cable and TV guys to make that happen, that will be good for consumers. But maybe not so good for Aereo.

But if you bet against the cable and TV guys getting their act together, you might get very good odds.

Kanojia sat down with me after his press conference to explain what he’s up to. He’s soft-spoken and the IAC lobby was loud, so you may have to turn this up a bit.

]]> http://allthingsd.com/20120214/why-would-you-pay-12-a-month-for-free-tv-aereo-ceo-chet-kanojia-explains/feed/ 0 http://allthingsd.com/20120202/viacom-says-netflix-isnt-hurting-nickelodeon-ratings/ http://allthingsd.com/20120202/viacom-says-netflix-isnt-hurting-nickelodeon-ratings/#comments Thu, 02 Feb 2012 14:28:05 +0000 Peter Kafka http://allthingsd.com/?p=170767 Viacom, which has seen ratings decline at its Nickelodeon cable channel, doesn’t think it is losing eyeballs to Netflix, which offers an array of kids programming, including Nickelodeon shows like “Dora the Explorer.” Viacom CEO Philippe Dauman, speaking during the company’s earnings call this morning, continues to argue that the ratings decline stems primarily from a Nielsen miscount. Viacom saw revenue increase 3 percent for Q4, while earnings dropped 5 percent.

]]> http://allthingsd.com/20120202/viacom-says-netflix-isnt-hurting-nickelodeon-ratings/feed/ 0 http://allthingsd.com/20120112/what-kind-of-web-video-plans-does-sony-have-video/ http://allthingsd.com/20120112/what-kind-of-web-video-plans-does-sony-have-video/#comments Thu, 12 Jan 2012 13:30:43 +0000 Peter Kafka http://allthingsd.com/?p=163093 Sony has everything you’d need to launch an interesting video service: Its TVs, DVD players and game machines are already in millions of living rooms. It owns a big Hollywood studio. And while it has taken a beating over the past few years, it has plenty of cash to fund big bets.

So no surprise that Sony is yet another company reportedly exploring “over the top” Web video. And even if it doesn’t end up launching a full package of cable-like TV programming, it seems quite reasonable to assume it’s going to be doing something with video this year.

And that’s more or less what Sony executive Tim Schaaff said near the end of the brief chat I had with him yesterday at the Consumer Electronics Show.

Schaaff is the former Apple executive hired by Howard Stringer six years ago to knit all his media and electronics businesses together. If you don’t want to hear his thoughts about his new music subscription business, or what the cloud means for Sony versus Google, Amazon, Apple, etc., skip ahead to the four-minute mark on this video.

That’s where Schaaff refuses to say that Sony is looking to get into a Netflix-style subscription business. But he does say he would love to have me “paying for video on a regular basis.”

“We’re certainly talking to lots of different people about some new possibilities, and I hope that we can have some new announcements for you later in the year.”

The guy making a cameo appearance in the background, by the way, is Sony VP Michael Aragon, who oversees video and music for Schaaff.

]]> http://allthingsd.com/20120112/what-kind-of-web-video-plans-does-sony-have-video/feed/ 0 http://allthingsd.com/20120105/where-did-nine-million-cable-subscribers-go/ http://allthingsd.com/20120105/where-did-nine-million-cable-subscribers-go/#comments Thu, 05 Jan 2012 12:24:01 +0000 Peter Kafka http://allthingsd.com/?p=159882 New year, new chance to talk about cord-cutting/shaving/avoiding. Which is either a big deal that’s going to get bigger, or basically imaginary, depending on who you like to listen to.

If you’re in the big-deal camp, then you’ll like a new survey from Deloitte, which finds that a staggering one in five U.S. residents say they have either cut the cord or are thinking about doing it. The breakdown: Nine percent of survey respondents say they’ve recently cut the cord and are getting their shows from Netflix, Hulu, iTunes, etc. And another 11 percent say they might do it. (Click image to enlarge.)

To repeat: The Deloitte survey is asking people about cutting pay TV — Comcast, Verizon, Dish, etc. Not cutting back on certain channels like HBO (that would be cord-shaving) or simply never signing up in the first place (that would be the “cord-nevers” we’ve started to hear about).

How can that possibly square with the pay-TV industry’s reported results, which show that overall subscription levels remained basically flat last year? Even if you allow for a significant margin of error, things don’t add up: If the pay-TV business had lost a single percentage point of its customers in the last year, it would be a huge deal.

But Deloitte is reporting that approximately nine million people say they’ve recently stopped paying for TV. That’s the entire population of New York, plus another million or so, vanished. Can’t be.

I’ve asked Deloitte if they’ve got any insight on the gap, but haven’t heard back. But my hunch is that — for now, at least — cord-cutters are like vegans: They’re real, and they’re out there. They’re particularly notable in certain places like New York, the Bay Area and college towns. And they over-index at certain Web gathering places, like this one. But McDonald’s sales are still chugging along.

]]> http://allthingsd.com/20120105/where-did-nine-million-cable-subscribers-go/feed/ 0 http://allthingsd.com/20111218/apple-plots-its-tv-assault/ http://allthingsd.com/20111218/apple-plots-its-tv-assault/#comments Mon, 19 Dec 2011 01:06:12 +0000 Jessica E. Vascellaro and Sam Schechner http://allthingsd.com/?p=154883 Apple Inc. is moving forward with its assault on television, following up on the ambitions of its late co-founder, Steve Jobs.

In recent weeks, Apple executives have discussed their vision for the future of TV with media executives at several large companies, according to people familiar with the matter.

Apple is also working on its own television that relies on wireless streaming technology to access shows, movies and other content, according to people briefed on the project.

Read the rest of this post on the original site »

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