Apple Is Out to Blow Up the Cable TV Model (BusinessWeek)

(Bloomberg) -- After years of complaining about having to pay for obscure TV channels they never watch, American consumers might finally be getting their way.

 

The industry buzzword is “skinny bundles,” or Web services from providers such as Dish Network Corp. and Apple Inc. that offer just a few popular channels at a lower price.

 

The whittled-down packages are putting pressure on programmers that have relied on the 500-channel pay-TV universe to carry their less-popular niche networks. Apple plans to debut an online service this year with about 25 channels, according to people familiar with the effort. Dish’s Sling TV, unveiled in February, offers about 20 channels for $20 a month. Cable companies are pushing mini bundles with Web access, local channels and HBO for as low as $40 a month the first year -- less than half the average TV bill -- to keep customers from fleeing.

“Consumers want lower price points,” Jason Hirschhorn, chief executive officer of media newsletter REDEF, said Monday on Bloomberg TV. “That means the packages are smaller and ultimately that puts pressure” on content producers such as Viacom Inc. and Discovery Communications Inc. These companies “have bundles of channels, maybe a bunch of which you don’t watch,” he said.

 

For years, TV programmers have paired their weaker channels with stronger ones to promote new shows and boost revenue. The average U.S. home receives 189 TV channels but only watches 17 of them, according to a report last year by Nielsen. And the average cable bill rose to $87 last year from $80 in 2011, data compiled by Bloomberg Intelligence show.

‘Flexible Packages’

“Viacom works closely with distributors to create flexible packages of networks that meet the varying needs of their subscribers,” said Jeremy Zweig, a spokesman for New York-based Viacom. “While all of our distributors carry many of our networks in broad-based tiers, we also have numerous examples of tailored offerings in more niche-oriented packages.”

 

Discovery declined to comment.

 

Apple is in talks with broadcasters ABC, CBS and Fox to provide Web-based TV later this year, according to people familiar with the effort. Viacom is also negotiating with Apple, said one person. So is Discovery, although NBC isn’t included, the Wall Street Journal reported earlier.

 

In 2013, Cablevision Systems Corp. sued Viacom for requiring it to take lower-rated channels along with its most popular networks, claiming the practice was illegal and anti-consumer. Viacom, home of Comedy Central, has said its licensing arrangements are “flexible, competitive and the result of good-faith negotiations with distributors.” The suit is still pending.

‘Significant Risk’

Cable companies are already struggling to keep TV subscribers as more Americans watch video online on services like Netflix Inc. The rise of skinny bundles may lead even more people to abandon large TV packages. That poses a threat to networks that aren’t included in the new online TV services, said Paul Sweeney, an analyst at Bloomberg Intelligence.

 

“Niche networks with smaller audiences are clearly at risk in a skinny-bundle world,” Sweeney said. “Unwinding the bundle is a significant risk to the pay-TV world as we know it.”

 

The popularity of fewer-channel packages, along with consolidation among pay-TV operators, may prompt smaller media companies to merge to gain more leverage in programming negotiations, Sweeney said. And networks that aren’t included in skinny bundles may need to offer their programming over the Web, outside the pay-TV bundle, said REDEF’s Hirschhorn.

Verizon Service

Verizon Communications Inc., the largest U.S. wireless carrier, is also planning to enter the Web-based streaming market with a slimmed-down package. Verizon is negotiating with programmers to start a mobile video service featuring live TV, original shows and pay-per-view as early as June, according to a person familiar with the talks.

 

Viacom, for its part, is experimenting with going direct to consumers over the Internet. The company introduced an ad-free online channel for kids programming earlier this month. In February, Viacom agreed to let the premium cable network EPIX, which is owned by its Paramount Pictures, Lions Gate Entertainment Corp. and the MGM film studio, run on Sling TV.

 

Some analysts, including Laura Martin at Needham & Co. in New York, say the slimmed-down bundles aren’t for everyone and may prove too restrictive for viewers who want to keep up with the latest hit shows.

 

“Skinny bundles destroy a lot of optionality for the consumer,” Martin said. “They’re going to be frustrated if they want to change the channel and they’re limited to that bundle of 20 channels.”

 

Apple’s latest plans for its online TV service were first reported by the Wall Street Journal.

Contact lens with built-in telescope

You’ve probably heard that diabetes is a huge and growing problem—affecting one in every 19 people on the planet. But you may not be familiar with the daily struggle that many people with diabetes face as they try to keep their blood sugar levels under control. Uncontrolled blood sugar puts people at risk for a range of dangerous complications, some short-term and others longer term, including damage to the eyes, kidneys and heart. A friend of ours told us she worries about her mom, who once passed out from low blood sugar and drove her car off the road. 

Many people I’ve talked to say managing their diabetes is like having a part-time job. Glucose levels change frequently with normal activity like exercising or eating or even sweating. Sudden spikes or precipitous drops are dangerous and not uncommon, requiring round-the-clock monitoring. Although some people wear glucose monitors with a glucose sensor embedded under their skin, all people with diabetes must still prick their finger and test drops of blood throughout the day. It’s disruptive, and it’s painful. And, as a result, many people with diabetes check their blood glucose less often than they should. 

Over the years, many scientists have investigated various body fluids—such as tears—in the hopes of finding an easier way for people to track their glucose levels. But as you can imagine, tears are hard to collect and study. At Google[x], we wondered if miniaturized electronics—think: chips and sensors so small they look like bits of glitter, and an antenna thinner than a human hair—might be a way to crack the mystery of tear glucose and measure it with greater accuracy.

We’re now testing a smart contact lens that’s built to measure glucose levels in tears using a tiny wireless chip and miniaturized glucose sensor that are embedded between two layers of soft contact lens material. We’re testing prototypes that can generate a reading once per second. We’re also investigating the potential for this to serve as an early warning for the wearer, so we’re exploring integrating tiny LED lights that could light up to indicate that glucose levels have crossed above or below certain thresholds. It’s still early days for this technology, but we’ve completed multiple clinical research studies which are helping to refine our prototype. We hope this could someday lead to a new way for people with diabetes to manage their disease.

We’re in discussions with the FDA, but there’s still a lot more work to do to turn this technology into a system that people can use. We’re not going to do this alone: we plan to look for partners who are experts in bringing products like this to market. These partners will use our technology for a smart contact lens and develop apps that would make the measurements available to the wearer and their doctor. We’ve always said that we’d seek out projects that seem a bit speculative or strange, and at a time when the International Diabetes Federation (PDF) is declaring that the world is “losing the battle” against diabetes, we thought this project was worth a shot. 

Save the Date: June 1-4, 2015 at the Biltmore Hotel

Smart home devices increasing in popularity, awareness (Consumer Electronics)

Nearly 4 in 10 US broadband consumers are expected to purchase a device in 2015, according to market research firm Parks Associates.

According to consumer market research firm Parks Associates, 37 percent of broadband-connected US consumers intend to buy some sort of smart home device in 2015. The findings are the result of a survey of 10,000 US broadband-connected households conducted in late 2014. The products most likely to be purchased include smart light bulbs (24 percent plan to buy), home/kitchen appliances (15 percent), thermostat (14 percent) and door locks (12 percent).

Interestingly, 15 percent of all smart home devices were given as gifts in the first three quarters of 2014, down from 32 percent in 2013. This indicates that the average consumer more likely knows about and wants a connected home device now than in the recent past. Aside from the rising awareness and overall purchase intentions, retailers are also giving more attention to the product category. “Another key factor is the amount of floor and shelf space retailers like Best Buy, Apple, Home Depot, and Lowe’s are dedicating to smart home devices,” said Maia Hinkle, Research Analyst, Parks Associates.

Nevertheless, despite the intention of many consumers to purchase smart home products, category awareness is surprisingly low. While awareness is rising, consumers are more likely to recognize a specific product rather than a category of interconnected devices. As Hinkle noted, “Two-thirds of U.S. broadband households are unfamiliar with smart home products or services and nearly 70 percent are unfamiliar with where to buy smart home products.” Parks Associates noted, however, that the entrance into the market of larger brands like Apple (with Homekit), Google’s Nest, and Honeywell have increased aware

CAMACOL: kick-off for 50th Anniversary festivities

Personal Privacy...? (ZDNet)

Summary:If you think the government cannot and does not want to get its hands all over your personal data, then think again.

There is at least one truism when it comes to how the corridors of power work in Australia: Never get between a premier and a bucket of money. The second I am proposing here is to never underestimate the liberties that a politician will hand over in order to appear tough on crime and undesirables.

As evidence for my assertion, I offer up the words of Australian Prime Minister Tony Abbott, who delivered his start of the year address to the National Press Club on Monday and had the following to say about his government's proposed data-retention 'improvements'.

"The police and the security agencies have told me that they need access to telecommunications data to deal with a range of crime, from child abuse to terrorism, and -- as far as I am concerned -- they should always have the laws, money, and support they need to keep Australia safe."

Abbott's quote is mere confirmation of the will of both sides of politics to get data retention passed in Australia. Last week, data-retention hearings amply demonstrated how those who would benefit from the scheme were given a free pass, while those who were against were pilloried.

The problem with wanting to prevent Australia's data-retention scheme is that the law is a mere codification of practices already undertaken. NSW Police is seeking seven years' worth of data to be held, because that is what it already has access to with certain companies.

Despite warnings of impending doom, such as data goldmines andundeleted copies of data given to spy agencies, the sad reality is that those issues already exist, because so much data on citizens is already held.

Perhaps the best summation of where Australia finds itself was given by past chair of the Australian Privacy Foundation, Roger Clarke, when fronting the joint parliamentary committee looking at data-retention legislation on Friday.

"At no stage today has there been any real discussion of the fact that this is mass surveillance that is to be imposed by the parliament on the Australian people.

We've skirted around that and never use the word.

There has been mention of the fact that personal surveillance, the collection of data about individuals who have come to attention and about whom there is reasonable suspicion et cetera, that has been mentioned in passing, but this moves way, way beyond that to mass surveillance.

Now that's got massive consequences at all sorts of levels -- from the philosophical through the democratic, legal, social, technical -- but one that rose today, a conundrum that arose in discussion with the MEAA [Media, Entertainment, and Arts Alliance] was before you, is the question about supposing there was a decision that the media should be exempt, whatever the media means, it's inactionable. It's virtually impossible to specify how you can have a mass surveillance scheme which either fails to collect data about designated categories, or which enables it to be collected but precludes it from being accessed by law-enforcement agencies because somehow magically the holder of that data knows that the person to whom that data relates, is a member of the media.

Once you've moved into a mass surveillance scheme, you don't have any exceptions, you've built the kind of infrastructure that we used to associate with unfree countries."

But will considered arguments such as Clarke's make a lick of difference? Consider the technical nous of Philip Ruddock, a former Australian attorney-general who is the senior government member on the committee.

"I am very ignorant of these matters -- Skype is a telephone you use on a computer," he said on Thursday.

Ruddock revealed his carefree attitude toward his personal privacylater in the day.

"I do not care how many police officers find out who is talking to me, who is visiting me, and so on. I am behaving properly."

With Ruddock's blessing, his wish shall soon be reality for all of us.

Apple Will Join the Dow Jones Industrial Average (BusinessWeek)

(Bloomberg) -- Apple Inc. was added to the Dow Jones Industrial Average, ending a banishment that kept the world’s largest company out for years before a stock split made its shares palatable to the price-weighted measure.

The changes will push the number of technology-related companies in the 30-member gauge to six and boost their influence even more as Apple joins Microsoft Corp., Intel Corp., International Business Machines Corp., Cisco Systems Inc. and Visa Inc. AT&T is being kicked out after falling 4.5 percent in 2014. The changes will take effect after the close of trading on March 18.

“The Dow is supposed to be the dominant companies in each different sector of the economy and I don’t think anybody can argue that Apple isn’t by far the dominator in the phone sector,” Michael Chadwick, who manages $150 million as chief executive officer of Chadwick Financial Advisors in Unionville, Connecticut, said in a phone interview. “The digital age is taking over. It’s going to be a function of those who can adapt and change.”

The Dow average’s weighting methodology, which links a stock’s influence to its share price, had long barred Apple from joining the gauge. The timing of Apple’s addition hinged on not just its own 7-for-1 split last June but also Visa’s 4-1 split scheduled for March 19 of this year, according to David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.

‘Clear Choice’

Stocks in the index are selected by a committee of Wall Street Journal and S&P Dow Jones Indices representatives based not on quantitative rules but on the companies’ reputation, relevance to investors and growth record.

“As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average,” Blitzer said in a statement.

Apple’s split brought the stock price closer to the median price in the Dow and the Visa split will reduce the technology weight and make room for Apple, Blitzer said.

“The DJIA is price weighted so extremely high stock prices tend to distort the index while very low stock prices have little impact,” Blitzer said.

The original American Telephone & Telegraph entered the Dow in October 1916 and was taken out in April 2004. The company removed today was created in the merger of SBC Communications and AT&T in November 2005. The removal announced today will leave Verizon Communications Inc. as the only telephone stock in the Dow.

AT&T shares fell 1.5 percent Friday. Apple closed higher by 0.2 percent.

‘Some Surprise’

“There’ll be some surprise that AT&T is the name that’s being removed and Verizon is being kept,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a telephone interview. “From the historical standpoint, AT&T represents an American institution. To see that leaving the Dow is somewhat of a psychological blow. In terms of impact on the stock itself I don’t think it’s going to be overly significant.”

Charles H. Dow, the co-founder of Wall Street Journal publisher Dow Jones & Co., devised the Dow average in 1896 to provide a clear view of the stock market and “barometer of the times,” according to the S&P Dow Jones Indices website. It originally included American Tobacco, General Electric Co. and 10 other companies before expanding to 20 companies in 1916 and 30 in 1928.

Google Missing

Apple’s Dow entrance makes it only the second among the three largest U.S. companies by market capitalization to be included in the gauge. Class A shares of Google Inc., the third largest U.S. company, closed at $581.44 Thursday, effectively making them too expensive for inclusion in the Dow average even after what amounted to a 2-for-1 stock in April of 2014.

The last Dow reshuffling took place in September 2013 when Goldman Sachs Group Inc., Visa Inc. and Nike Inc. replaced Bank of America Corp., Hewlett-Packard Co. and Alcoa Inc. The changes boosted the influence of financial-related companies to five.

At $126.41, Apple’s shares will get the sixth-biggest weighting in the gauge, with a 4.3 percent share, according to data compiled by Bloomberg. AT&T was the fourth-smallest stock, priced at $34 with a weighting of 1.2 percent. Goldman Sachs will have the highest weighting following Visa’s split and Apple’s addition, based on current share prices.

There is more than $7 trillion benchmarked to the S&P 500, with index assets comprising approximately $1.9 trillion of the total, according to S&P Dow Jones’ web site. Only about $32.8 billion was directly indexed to the Dow at the end of 2013, according to Dave Guardino at S&P.

“It’s not going to change anything,” Andy Hargreaves, an analyst covering Apple at Pacific Crest Securities LLC in Portland, Oregon, said in a phone interview. “I couldn’t tell you the last time I thought about the Dow Jones Industrial Average and what it means for its constituent stocks. It has a kind of social significance, meaning the companies in it are old, and that’s the whole idea.”

To contact the reporter on this story: 

Michelle F. Davis in New York at: tmdavis194@bloomberg.net