More Bad News for Sears

Times have been tough for Sears Holdings, the company that owns Sears and Kmart retail stores. In the fourth quarter of 2011, which is the season that retailers hope to post most of their profits for the year, Sears reported a loss of $2.4 billion. As a result, the company is looking to raise money by shedding some of its assets. According to the company’s announcement, it plans to sell an additional 11 stores in 2012. In addition, it will spin off the Hometown and Outlet stores. The company also plans to reduce inventory and implement other cost-savings measures.

This is not good news for the company and its shareholders, but it could mean that you’ll want to keep a close eye on sales at your local Sears stores. It’s possible that they may have to move some of there electronics inventory at aggressive discounts in order to raise some cash, and you might be able to snag some attractive bargains.

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YouTube: An Hour per Second

Last month, YouTube updated its stats again. The site now is getting new video content uploaded at the rate of one hour of video every second of every day. That’s 60 hours of content every minute. I find that astounding.

You might think that all this content is just falling into a black hole in the cloud somewhere. (Actually, I suspect that quite a lot of it is, and it probably deserves it.) But viewing rates are climbing as well. YouTube now reports 4 billion views every day. That’s the equivalent of more than half the world’s population watching one YouTube video a day.

If you want to see an animated infographic how much all this uploaded video is, check out this clever site: http://www.onehourpersecond.com/.

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HBO Arrives on Samsung Smart TVs

Nearly a year ago, Samsung and HBO announced a partnership that would let consumers stream HBO content to Samsung TVs. You would have to be an HBO subscriber to access the service, which meant that you had to be signed up with a pay-TV service.

Since then, you could get this HBO Go content on your computer, iPad, iPhone, Android smart phone, or even a Roku box. But not a Samsung TV. Until now.

Samsung has just announced that the service is available on certain models of their Smart TVs, with one additional restriction; not all pay-TV services are eligible. While Verizon FiOS, Charter, Cox, DISH Network, and DirecTV are supported on the Samsung screens, Comcast and Time Warner Cable are among the most conspicuously absent (though they do support the smart phone and iPad apps).

I continue to find it fascinating that the content providers such as HBO are being so timid about opening up streaming access to their content. The HBO Go service is free, but available only to HBO subscribers, perhaps so that HBO doesn’t anger the pay-TV services that provide the bulk of its revenues. On the other hand, this may simply be the company’s way of limiting demand for the streaming service, giving them time to test it out before rolling out in a big way.

It might well be that HBO is planning a streaming-only offering down the line with it’s own monthly fee. The same pay-TV service that currently gets subscriber dollars for the HBO channels would almost certainly be the same company that provides the broadband connection used to access the streaming service, so while this could mean less money for the pay-TV service, it’s not as though HBO would be cutting them off completely with the new service. There is no doubt that the cable, satellite, and telco services are going to have to be nimble and responsive over the next few years if they are going to survive the rapidly-changing video entertainment landscape.

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It’s NOT a Hologram, Folks!

The legendary rapper, Tupac Shakur, made an appearance at Coachella in California last weekend, in spite of the fact that he’s been dead for more than 15 years. He performed on stage alongside Snoop Dogg, including a “live” shout-out to the Coachella audience. Putting aside the creepy factor of performing with dead singers, let’s talk briefly about the technology.

Let me say at the outset that even though I was not there, it appears that this production was a triumph of technology. The creators apparently combined video recordings and computer animation and audio manipulation to create a completely new performance by the rapper. It is impressive, to say the least.

What I wish people would not say, however, that it is a “holographic” image. Just Google “Tupac hologram” and see how widely the term was used to describe this production. As I understand the technology, it is not a hologram; there is no 3D component to the display. It is simply a 2D image projected onto an invisible screen. It’s not clear if it’s rear or front projection, or if perhaps there is some sort of beam-splitter material involved. But in any case, it is not a 3D hologram. When you move your head from side to side, you see different views of the object; you can see details on the side of the object that were not visible before. With a projected image like this, it may look like 3D because you can move your head and see objects placed behind the image, but the image does not change. It’s as if it were constantly turning to face you, no matter where you move.

If you’re too close to the projection screen, you can see a strangely distorted image:

The image of Tupac appears strangely thin from this angle.

This is not the first time that the press has incorrectly named this sort of production a hologram, and I don’t expect it to be the last. But I still wish that they’d use the term correctly.

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Free All-Star Concert in March

Are you a Dead Head? Or perhaps a fan of Scott and Bryan Devendorf of the National? What would you say to the opportunity to attend a concert featuring the Devendorfs and Bob Weir of the Greatful Dead? They will be performing at a one-time-only event called the “Bridge Sessions” on Saturday, March 24, which is a fund-raiser for HeadCount.org. The bad news is that it will be held at Weir’s own TRI Studios so seating will be limited to just 50 people. And the worse news is that tickets are only available with a $1,000 donation to HeadCount.

But don’t give up yet; there is good news. The event will be broadcast live, streamed over the Internet. And you can watch it for free. That’s right: free. Nada. Zilch. How cool is that?

This should come as no surprise, given the Greatful Dead’s bellewether views on controling access to their performance art. Not only did the band not prohibit recording of their epic concerts over the decades that they toured worldwide, they even provide access to the soundboard mix for anyone who wanted to jack in. And then they encouraged people to share their recordings. Did this practice hurt their record sales? Probably not; they seemed to do just fine financially.

And so the same mindset seems to be at work here with this concert. Can’t make it? No problem; those who can will fund it, and there’s no need to get greedy about the rest. And you know that this will generate tremendous goodwill for fans of both the Dead and the National.

This is the kind of thinking that is made possible with video streaming over the Internet. 20 years ago, what would it have cost a band to call up NBC and say “We want to take over your network in prime time for an hour or two so that we can perform a free concert”? It could not have happened without a lot more money. But now we can have a group of people produce a live event and make it available worldwide if they want at just a fraction of the cost.

The world of video entertainment is changing rapidly, and “Bridge Sessions” just demonstrates what can be done with a little imagination and initiative. And I think it’s a Good Thing.

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The Power of Aggregated Data

What do people really watch when they watch the SuperBowl? Thanks to the new world of connected entertainment systems, TiVo has a very good idea. By monitoring an anonymous sample of 41,666 households equipped with TiVo DVRs, the company can compile a map of “live and same-day” viewing of content that was watched at “play” speed on the systems. And guess what? People really do like the SuperBowl commercials.

According to the TiVo results, the Dorito’s “Man’s Best Friend” showed the greatest increase compared with the viewing numbers for the adjacent 15 minutes. Even this was well below the numbers for Madonna’s halftime show, and the highest viewership number for the entire program was the desperation “hail mary” pass that ended the game.

The big take-away from this, however, is not about the SuperBowl. It simply demonstrates how granular our data can be now about who watches what. These “temperature” graphs showing what viewers find most interesting is going to help content producers attract sponsors both for in-line commercials and for embedded product placements in the content itself. This data is likely to become the foundation for new funding models that will make it possible to reach specific markets more effectively, which means that individual sponsors can spend more per viewer in a smaller audience, because they will know what that audience is watching and what holds their interest.

For me, the main point is that the future does not belong to the companies that can deliver the stars and blockbuster content. Instead, the winners will be those best equipped to handle Big Data and be able to match viewers with content and sponsors in a tightly-integrated system. The world of video entertainment is indeed changing.

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HDTV Expert - The Rout Is On by Pete Putman

As things go, the flat screen TV business is relatively young. Until ten years ago, large LCD TVs weren’t even viable products. And plasma dominated the large screen (42” and up) flat screen TV business.

But neither technology held any substantial market share. Instead, CRT televisions (and rear-projection CRT sets) were ‘kings of the hill.’

Going back through some of my archives, I found that in the fourth quarter of 2005, CRT TVs held a 78.9% worldwide market share. That represented a decline of 15% from Q4 of 2004, no doubt due to the 137% increase in LCD TV market share in the same time period (yes, you read that right, 137%!).

While LCD TVs held a 14.7% market share, plasma TV share grew from 1.8% of all TVs sold to 3.9%, a growth rate of 109%. CRT rear-projection TVs held .9% of the market, a drop of 60% from Q4 ’04, while microdisplay RPTVs grew to 1.6% of the pie, an increase of 52% over the same time period. (All numbers compiled from DisplaySearch reports.)

How about the major TV brands? From Q3 ’05 to Q4 ’05, it might surprise you to learn that Sony had the top TV brand revenue share and growth, with 14% of all TV sales revenue (a quarterly growth rate of 130%)! Samsung was right behind with 11% revenue share and 36% Q-Q growth, followed by Philips (9.1% revenue share, 31% Q-Q growth), Panasonic (8.3% revenue share, 13% Q-Q growth), and LG (7.8% revenue share, 28% Q-Q growth).

These five companies accounted for 50% of all TV revenue in Q4 of 2005. And there was only about a 6-point spread between #1 and #5, so the pie was being divvied up pretty equally.

In terms of TV brand unit share, the order was changed somewhat. LG captured the number one spot with 9.8% unit share in Q4 ‘05, followed by Samsung (9.2%), TTE (7.5%), Philips (7.1%), and Sony (6.9%). The remaining 60% was chopped up among a host of brands.

The eye-opener here was when I went back to the beginning of 2005. For the first quarter of the year, Sharp topped the branded TV market share with an amazing 21% (a year-to-year growth of 82%). Philips was number 2 with 14.7% share, followed by Samsung (10.8%), Sony (10%), and LG (7.3%). The five brands accounted for 60% of all TV sales back then.

So – in a little less than a year, Sony added 7% to its brand share, while Samsung marched in place, LG picked up about 2 points, Sharp fell off the map completely, and Philips lost half its brand share. (TTE didn’t show up in the 2005 listings at all.)

Now, let’s jump ahead to Q4 2011. NPD DisplaySearch’s latest numbers show that LCD flatscreen TVs now account for 86.5% of all TVs sold worldwide. Plasma continues to decline as it pushes into a larger screen ‘niche,’ grabbing a miniscule 6.9% market share. Amazingly, CRT TVs still held a 6.4% share, while RPTVs managed to eke out a .0004% market share – look for this category to be killed off completely in 2012.

And the tables have turned completely from 2005 in terms of worldwide market share. Samsung managed the amazing feat of increasing its market share to 26.3% from Q4 ’10 to Q4 ’11, an all-time record and an amazing growth rate of 18% in an otherwise-flat (no pun intended) industry. LG was far behind Samsung with a 13.4% market share, essentially unchanged since Q4 ’10.

As for Sony, they also held steady at 9.8%, basically the same as a year before, while Panasonic saw a decline of 2% to 6.9%. Sharp – who continues to sell fewer LCD TVs than Panasonic, incredibly – experienced a decline of 7% from Q4 ’10 to a 5.9% market share in Q4 ’11. These five brands accounted for 62.3% of the 74,236,000 TVs sold.

So what does this all mean? First, Samsung has clearly blown away everyone else in the TV industry, opening up a double-digit lead over their nearest competitor (LG) in market share. And those two guys waste time arguing about whether passive or active is better for 3D viewing?

Second, we’re seeing the slow, inexorable end of the Japanese television industry, just as we saw it happen in the United States in the late 1970s to the late 1980s. Sharp, Sony, and Panasonic are all hemorrhaging money for the current fiscal year that ends on March 31, and the consumer TV business is the primary reason.

When TVs sold for $50 per diagonal inch and up, there was plenty of money on the table for everyone. But now that mainstream TVs screen sizes (up to 55 inches) are selling for $10 – $15 per diagonal inch, the Japanese simply can’t compete anymore. And it will only get worse with Chinese TV brands Haier, Hisense, TCL, and others establishing beachheads on all continents.

Third, it’s over. The fat lady has sung. Samsung has won. They set out in the mid-1990s to beat Sony at their own game, and by any reasonable account, have succeeded beyond their wildest dreams. Samsung will make a nice profit on 2011 TV sales, and LG will at least get their LCD TV business back into the black.

But the story isn’t so pretty for Sharp, Sony, and Panasonic. Sharp still has no explanation for their continual slide in market share, which apparently began in 2005 and continued uninterrupted, and which has now idled (by some accounts) 50% of their LCD fab capacity. As for Panasonic, they’d already shut down one LCD and one plasma factory in 2011, because demand just isn’t there. And no one in Osaka knows how to fix the problem.

Sony is being pressured by financial analysts in Japan to get out of the TV business altogether, a decision which, as painful as it might be to management given Sony’s long and rich history with TV manufacturing, is probably the most sensible thing to do. The company’s TV business has lost money for eight straight years – never mind the strong market share numbers that popped up early on.

And it’s not going to get better any time soon, as DisplaySearch stated that 2011 worldwide TV shipments actually declined .3% in 2011, reversing six consecutive years of growth. Only the LCD TV category showed any increase with a bare-bones 1% uptick. Everything else was on a downhill slide, with plasma declining 7%, CRTs falling 43%, and RPTVs in a 51% tailspin.

Hitachi has already pulled the plug on their TV business. Toshiba and Mitsubishi will no doubt follow suit in the next 12-24 months. And that will leave us with the Hatfields & McCoys in Korea, plus a host of Chinese brands you may want to get familiar with. (The running joke at CES 2012 is that it was the “Chinese” Electronics Show, and that’s not far from the truth!)

The rout is on…

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