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Is It Really Time for Personalized TV?

By Mark Evans in Media 2 Comments Tags: , , ,

I don’t watch a lot of television – not even those HBO shows that everyone raves about.

That said, I still have cable television because it’s really the only way to watch live sports. If there was a service that let you buy live sports on a pay-as-you-go basis, I probably wouldn’t need cable service.

For all the talk about TV’s new future and the rise of services such as Hulu and Apple TV, the world is still dominated by cable and satellite service providers. As much as people talk about being able to just buy the shows they want by downloading them or streaming them off the Web, there doesn’t appear to be a stampede of consumers yet.

But there are indications that the marketplace is changing. A recent survey Webbush Securities analyst James Dix discovered 7% of 2,500 respondents had stopped using basic cable and 12% had cut their premium or satellite services.

“There is evidence of cord cutting,” Dix told the New York Post

Perhaps the biggest hurdle facing the growth of the pay-as-you-go TV market is live sports. While there is some pay-per-view and sports packages, sports remains the reason why many people still have cable or satellite service. As much as television shows have migrated to the New TV, sports is still pretty much rooted in the Old TV.

It may have to do with the fact the networks are willing to pay billions of dollars in broadcasting rights, or maybe it simply has to do with a new model not being ready for prime time yet. For example, a Hulu for live sports in which you could watch any professionals game for $2.99 or $4.99/shot could be very interesting.

My take is we’re just moving into the New TV era. Hulu is an indication of what may be over the horizon, although it is a hybrid given it’s controlled by traditional broadcasters. Apple TV could be interesting but it’s strong ties to iTunes will be a strength and a weakness, while Google TV is still finding its feet.

For couch potatoes, it could be an interesting landscape with far more choices.

For more, check out David Pogue’s recent column in the New York Times.

Is the High-Tech IPO Really Back?

By Mark Evans in M&A, Venture Capital No Comments Tags: , , ,

The high-tech IPO is a mysterious beast. It’s attractive, seductive and irresistible. But it’s also fickle, temperamental and not always well-behaved. Still, investors have a difficult time resisting the high-tech IPO even when the fundamentals aren’t solid or even exist.

In the coming months, it looks like investors will get another opportunity to test their obsession with the high-tech IPO as companies such as Skype and Hulu prepare for public offerings. If these IPOs are successful – and there’s plenty of indication they will be enthusiastically received – it could open the floodgates for all kinds of IPOs.

The question facing investors is whether Hulu and Skype are anomalies, or whether the high-tech IPO has really come back from the dead. Hulu and Skype are solid well-established businesses with revenue, subscribers and track records. They are market leaders in markets experiencing rapid growth, which makes them strong IPO candidates.

These are the kind of IPOs that, frankly, were few and far between during the dot-com boom when anything with traction was sucked into the IPO machine. Of course, many of these IPOs bombed because the companies that did them were more projects than businesses.

As much as Skype and Hulu have investors excited, I’m concerned they are the cream of the crop, and that the high-tech IPO landscape is pretty limited. For all the talk about how costs are lower so high-tech businesses can get started with less capital, the reality is the business landscape is dominated by free and freemium. This makes the marketplace volatile and uncertain because there are competitors willing to charge little or nothing to attract customers.

The companies that succeed in attracting users and revenue will no doubt be attractive and could do an IPO if they’re not acquired but how many of these kind of companies actually exist? Probably not as many as you would think.

But the other reality is there’s a lot of venture capital that has been tied up in start-ups. The VCs sense an opportunity to cash out so there will be tremendous pressure on start-ups to do an IPO. This could lead to a glut of public offerings, including many companies that probably don’t have solid enough fundamentals.

If investors should remember anything from the past decade, it’s caveat emptor because not everything with a pretty IPO bow on them is going to have a wonderful present inside.

For more on the IPO landscape, check out this story in the Financial Post.

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