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- Don D., California
Thinking Outside the Set-Top Box
A number of recent deals in the subscription television arena are providing users with innovative ways to view and interact with content. These developments may well turn out to be the beginning of the end for TV as we know it.
Verizon (VZ ) was first to market with a new application store designed exclusively for its FiOS TV service. This new offering, dubbed “Widget Bazaar” will function similar to the app stores currently being used by millions of smartphone owners the world over. The most promising apps include versions of popular social-networking Web sites Facebook and Twitter. Third-party developers will also get a crack at producing software for the Widget Bazaar when development kits get released in the fourth quarter. The company will screen submissions to ensure that they meet certain standards before adding them to the store and hooking developers into their billing system. Although pricing specifics have been lacking, we expect Verizon to eventually reveal a revenue sharing model similar to the one used by Apple (AAPL ) for its iPhone app store. This will mean Verizon pockets a minority share of the revenues generated by app sales, and leaves the rest for the developers.
While the initial Facebook application won’t include many of the bells and whistles offered on the immensely popular Web site, it will provide users with the ability to update their profiles and view pictures of friends and family on their flat screens. And although more advanced versions are likely far off, we believe the wealth of user information Facebook has locked up in its databases could potentially give rise to some impressive custom tailored TV advertising in future generations of the technology.
Fans of micro-blogging should be pleased with Verizon’s Twitter app which gives users the ability to message (a.k.a. “tweet”) friends in real time during a sporting event, or episode of American Idol, for example. Twitter’s split screen format will make it easy to read your neighbor’s thoughts on the local news, but physically typing your counterpoint may prove tedious as users must rely on the standard Verizon remote and an on-screen virtual keyboard. The company indicated that a separate QWERTY remote is not in the works and that a more likely input device would be a user’s smartphone.
Rest assured, the titans of cable are certainly not sitting idle. The nation’s two largest cable operators, Comcast (CMCSK ) and Time Warner (TWX ) are trying to fend off the new kid in town with a brainchild of their own, which the former is calling “On Demand Online” and the latter “TV Everywhere”. The services will allow cable TV subscribers to login to certain secure Web sites and access content at no additional charge. The concept is similar to Hulu, a popular web site where users can find ad-supported, predominantly broadcast TV content in an easy to use centralized location. Both companies are currently testing the services in select states. Over 20 programmers including broadcasters, premium channels, and cable networks are supplying content. Highlights of the list include A&E, BBC America, CBS, Food Network, HGTV, HBO, History, E! Entertainment, TNT, TBS, and Starz.
Comcast says “The service will significantly expand the number of TV shows available for online viewing” and “the trial will offer hundreds of movies and TV shows most of which have never before been available online”. With most cable TV networks already offering their highest rated shows on their individual Web sites it’s hard to say just what this newly available web content may be. Perhaps Comcast and Time Warner subscribers will gain access to the archives of vintage cable TV shows or niche programming not popular enough to devote Web space to.
Alas, we will probably have to wait until the testing periods are over and the new service gets rolled out before we have a definitive answer, as both cable companies are being fairly tight lipped on specifics. Verizon has also been reluctant to elaborate much on upcoming widgets or give any numbers regarding application users. Consequently, it may take some time before we can quantify how the new services will impact these companies’ bottom lines. One thing is for sure though, the landscape of the TV industry is changing at a rapid pace and major market share swings may well be forthcoming as the battle for the hearts and minds of the TV faithful rages on.