New media is giving cable stations problems, as viewers flee to online alternatives, but ESPN's mobile apps and online presence offer a model for traditional media to transition into the future.
Media-Mind is our column charting how technology's opportunities and challenges transform traditional media and entertainment, for better or for worse.
The worldwide sports leader has several cable networks, including ESPN, ESPN2 and ESPNU, each of which is viewed via the company's comprehensive mobile app, Watch ESPN. The app is available for iOS and Android and provides access to popular shows like "SportsCenter," "Pardon the Interruption" and "Mike and Mike in the Morning."
In addition to giving viewers the opportunity to watch ESPN wherever they go, the app is available for free to customers with Bright House Networks, Comcast, Time Warner Cable and Verizon FiOS TV as an extension of their cable subscription.
Broadcasters like NBC, CBS and FOX, along with pay cable stations, are losing ratings as customers look to Hulu and Netflix to watch their favorite shows on demand. The loss of live viewers diminishes the stations' worth to cable providers and hurts advertising revenue, something ESPN's strategy is helping it avoid.
ESPN's decision to offer its own app rather than license its product to other companies allows the network to control the way it redistributes its content. Watch ESPN puts all the company's broadcast content in one place, making it the best option for viewers who want to watch the station's programming on-the-go. In addition, the station's partnership with cable companies make sure it is still valuable to providers at the same time, serving its customer better.
One of the only flaws the Watch ESPN app has is it's only available to subscribers of specific cable providers. For example, a New York viewer who has Cablevision as their provider does not have access to the Watch ESPN app. However, as ESPN continues to work out deals with remaining cable providers, the app will become even more of an asset to the company as it attempts to reach viewers all over the world.
There is even an alternative for customers who aren't somewhere they can watch ESPN. The company's new ESPN Radio app allows customers to stream more than 30 of its radio stations across the company. Users can download the app for a one-time fee of $5 and stream unlimited for as long as their data plan will allow, and they'll have access to podcasts featuring commentary from the station's analysts and reporters.
ESPN Gets It
Any time new media arises, the automatic reaction of content providers seems to be to stick with traditional methods for as long as possible. However, by embracing mobile devices' ability to carry its product beyond the TV, ESPN is blazing a trail to increase its audience and reach markets it may never would have otherwise.
ESPN specializes in live programming, the one type of show that analysts say is immune to DVR and capable of sustaining ratings. However, the company still went out of its way to create new ways for its fans to view its content and its future-focused emphasis is paying dividends. The network adopted a philosophy that viewers should be able to watch ESPN on "the best available screen," and its digital portfolio has added value to its affiliates, its rights holders and advertisers.
ESPN's model for offering content digitally may not work for other cable stations, but the company's success suggests that embracing new media is a good thing, if done correctly.
Research in Motion's BlackBerry 10 operating system has some appealing features, but its glaring absence of available apps will hurt the company's efforts to regain relevance.
The Waterloo, Ont.-based company focuses on making the user experience on its updated platform as "fluid" as possible. This includes new gestures so customers can see all notifications without leaving the device's home screen, a messaging app that includes IMs, emails and text messages in the same space and a new live tile system and app drawer.
When the iPhone and Android smartphones began to emerge, RIM missed the boat by failing to evolve its OS to keep up. Now, the company is missing it again as it spends all its time updating BlackBerry's user interface while ignoring the health of its mobile app store. Features like live tiles on the home screen and an updated, intuitive keyboard are nice interface ideas, but they may not be enough to make customers go with BlackBerry over platforms with more established app stores.
BlackBerry 10's ability to run apps fully in the background without having to pause them could be a standout feature for the platform. However, most of what RIM is doing with its new OS are things that Apple and Google have already accomplished with iOS and Android, simply in a new packaging.
Android and iOS offer hundreds of thousands of mobile apps, giving customers hundreds of different ways to use their devices. Developers are eager to support the platforms due to the number of users each has, but they will likely shy away from BlackBerry 10 until the OS builds a larger customer base.
RIM was eager to show off the new look of BlackBerry 10, and with good reason. It offers a fresh take on some classic smartphone features and is the biggest leap the operating system has ever taken. But the company's failure to aggressively recruit developers and give them incentive to support the platform will ultimately be its undoing. RIM has promised developers $10,000 for apps for the BlackBerry platform, but that may not be enough compared to the potential audience and profits rival systems offer.
The BlackBerry 10 platform will launch later this year, but it may end up being the best platform no one is using because of its dire app situation.
Apple plans to pay Foxconn half the cost of improving its labor conditions, as the company seeks to help Chinese workers while increasing overall consumer satisfaction.
Foxconn chief Terry Gou, speaking at his company's new headquarters in Shanghai, affirmed Apple's financial commitment to assisting its Chinese iPad and iPhone factories.
"We've discovered that this is not a cost. It is a competitive strength," Gou explained of plans to improve Foxconn working conditions. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."
Gou did not, however, disclose a specific dollar amount or show exactly where Apple would spend its money.
The idea of fair labor practices being a competitive strength for Apple nearly reverses the previous mindset of the Cupertino company, which first largely ignored reports from civil rights advocates and environmentalists about Foxconn's excessive overtime and unsafe working conditions.
But both the iPhone maker and its manufacturing partner now realize the negative publicity could tarnish Apple's reputation, as well as acknowledge many consumers care deeply about the provenance of their products' origins. Apple's abundant profits and huge cash chest -- juxtaposed with the persistent image of beleaguered iPad workers laboring in dangerous factories and strenuous conditions -- likely also created a contradictory tension many found difficult to reconcile.
Helping to shoulder the costs to address working conditions will likely be a wise investment on Apple's part, not only to help the workers that manufacture and assemble their products, but maintain their company reputation, especially as these issues continue to come under fire.
Some workers injured in factory explosions say they never received compensation, for example, while other employees committed a rash of suicides, reportedly in desperation over low wages.
In response to these incidents, consumer advocates like Change.org and Beijing's Institute of Public and Environmental Affairs condemned Apple for standing aside while its main supplier mistreated workers and polluted ground water.
But starting in February this year, Apple asked the Fair Labor Association to investigate alleged abuses at several Foxconn plants and has worked to address the FLA's concerns since.
Cook himself visited a factory in Zhengzhou, promising to actively oversee improvements. As Apple began to show increased interest, even the Chinese government took steps to placate its biggest contractor by vowing to crack down on Foxconn exploitations.
In response to these pressures, Foxconn raised wages from 16 to 25 percent as well as reducing the workweek to 48 hours. The company also has plans to hire thousands of new workers and improve employee housing conditions.
These measures are just a start, but Apple's recent campaign to improve Foxconn factories may eventually win the company points with its erstwhile detractors, but they come at a cost.
Apple warns its planned investment in Foxconn improvements may raise iPad and iPhone prices, which at first seems counterproductive to consumer relations.
But buyers are more likely to fork over cash if they can do so with a clean conscience, which consumers may think is worth an extra hundred dollars for the latest Apple gadget.
Apple plans to pay Foxconn half the cost of improving its labor conditions, as the company seeks to help Chinese workers while increasing overall consumer satisfaction.
Foxconn chief Terry Gou, speaking at his company's new headquarters in Shanghai, affirmed Apple's financial commitment to assisting its Chinese iPad and iPhone factories.
"We've discovered that this is not a cost. It is a competitive strength," Gou explained of plans to improve Foxconn working conditions. "I believe Apple sees this as a competitive strength along with us, and so we will split the initial costs."
Gou did not, however, disclose a specific dollar amount or show exactly where Apple would spend its money.
The idea of fair labor practices being a competitive strength for Apple nearly reverses the previous mindset of the Cupertino company, which first largely ignored reports from civil rights advocates and environmentalists about Foxconn's excessive overtime and unsafe working conditions.
But both the iPhone maker and its manufacturing partner now realize the negative publicity could tarnish Apple's reputation, as well as acknowledge many consumers care deeply about the provenance of their products' origins. Apple's abundant profits and huge cash chest -- juxtaposed with the persistent image of beleaguered iPad workers laboring in dangerous factories and strenuous conditions -- likely also created a contradictory tension many found difficult to reconcile.
Helping to shoulder the costs to address working conditions will likely be a wise investment on Apple's part, not only to help the workers that manufacture and assemble their products, but maintain their company reputation, especially as these issues continue to come under fire.
Some workers injured in factory explosions say they never received compensation, for example, while other employees committed a rash of suicides, reportedly in desperation over low wages.
In response to these incidents, consumer advocates like Change.org and Beijing's Institute of Public and Environmental Affairs condemned Apple for standing aside while its main supplier mistreated workers and polluted ground water.
But starting in February this year, Apple asked the Fair Labor Association to investigate alleged abuses at several Foxconn plants and has worked to address the FLA's concerns since.
Cook himself visited a factory in Zhengzhou, promising to actively oversee improvements. As Apple began to show increased interest, even the Chinese government took steps to placate its biggest contractor by vowing to crack down on Foxconn exploitations.
In response to these pressures, Foxconn raised wages from 16 to 25 percent as well as reducing the workweek to 48 hours. The company also has plans to hire thousands of new workers and improve employee housing conditions.
These measures are just a start, but Apple's recent campaign to improve Foxconn factories may eventually win the company points with its erstwhile detractors, but they come at a cost.
Apple warns its planned investment in Foxconn improvements may raise iPad and iPhone prices, which at first seems counterproductive to consumer relations.
But buyers are more likely to fork over cash if they can do so with a clean conscience, which consumers may think is worth an extra hundred dollars for the latest Apple gadget.
Facebook is opening the App Center, an app store for iOS and Android, a venture determining the social network's ability to monetize its mobile customers.
As Facebook's IPO approaches, the company is aggressively pursuing ways to monetize its more than 400 million mobile users. When users access the site on personal computers, they see ads, which generate revenue, but Facebook's mobile app has no means to do so just yet, and the company is prepping to plug the hole.
Forrester Research predicts apps will generate $38 billion by 2015, so Facebook could gain a substantial revenue stream if it is able to jump full-throttle into the market.
Facebook hinted at its intentions to create an app store at the Mobile World Congress this year, partnering with a group of carriers and mobile device makers to encourage standardizing Web browsing, a move positioning the company to open its App Center.
Partnerships with popular sites like Pinterest, eBay and Foursquare may help generate interest in Facebook's app store and propel the company's monetizing effort. Still, many mobile users have already installed apps relating to these sites on their mobile phones, and may be reluctant to download another version for Facebook.
Also, Facebook could run into bumps along the road as it attempts to lure app developers to make the project a success. A study found developers are more likely to use Google+ to create social networking apps, despite Facebook's wider audience.
Facebook's decision to redirect customers to Google and Apple's app stores illustrates the company is making strides to compensate for some holes in its App Center, but its model may have a hard time going against Google+, which integrates Google's YouTube and Gmail, as well as Android and Apple's larger offerings.
However, developers may be drawn to the cross-platform nature of Facebook's app store, and the network's large audience will also be a draw. Android is losing cachet with developers, possibly due to the platform's fragmentation and malware issues, though it still pulls in a fair amount of money from its apps.
For its part, Apple's easy-to-use mobile payment system helped build its iOS and iPad apps empire, which make billions. Taking a page from Apple, Facebook will need to set up a simple mobile payment system if it has any hope of approaching Apple's success.
Facebook's mobile base continues to grow without bringing the company financial rewards, and the upcoming App Center may change that -- but Facebook needs to prove why downloading an app from them, and not Apple or Google, is better for the user. Otherwise, Facebook admits its mobile user growth may be a liability and not a boon, and it could damage the company's IPO and stymie revenue, since Facebook Mobile struggles to generate money as is.
Facebook is opening the App Center, an app store for iOS and Android, a venture determining the social network's ability to monetize its mobile customers.
As Facebook's IPO approaches, the company is aggressively pursuing ways to monetize its more than 400 million mobile users. When users access the site on personal computers, they see ads, which generate revenue, but Facebook's mobile app has no means to do so just yet, and the company is prepping to plug the hole.
Forrester Research predicts apps will generate $38 billion by 2015, so Facebook could gain a substantial revenue stream if it is able to jump full-throttle into the market.
Facebook hinted at its intentions to create an app store at the Mobile World Congress this year, partnering with a group of carriers and mobile device makers to encourage standardizing Web browsing, a move positioning the company to open its App Center.
Partnerships with popular sites like Pinterest, eBay and Foursquare may help generate interest in Facebook's app store and propel the company's monetizing effort. Still, many mobile users have already installed apps relating to these sites on their mobile phones, and may be reluctant to download another version for Facebook.
Also, Facebook could run into bumps along the road as it attempts to lure app developers to make the project a success. A study found developers are more likely to use Google+ to create social networking apps, despite Facebook's wider audience.
Facebook's decision to redirect customers to Google and Apple's app stores illustrates the company is making strides to compensate for some holes in its App Center, but its model may have a hard time going against Google+, which integrates Google's YouTube and Gmail, as well as Android and Apple's larger offerings.
However, developers may be drawn to the cross-platform nature of Facebook's app store, and the network's large audience will also be a draw. Android is losing cachet with developers, possibly due to the platform's fragmentation and malware issues, though it still pulls in a fair amount of money from its apps.
For its part, Apple's easy-to-use mobile payment system helped build its iOS and iPad apps empire, which make billions. Taking a page from Apple, Facebook will need to set up a simple mobile payment system if it has any hope of approaching Apple's success.
Facebook's mobile base continues to grow without bringing the company financial rewards, and the upcoming App Center may change that -- but Facebook needs to prove why downloading an app from them, and not Apple or Google, is better for the user. Otherwise, Facebook admits its mobile user growth may be a liability and not a boon, and it could damage the company's IPO and stymie revenue, since Facebook Mobile struggles to generate money as is.
T-Mobile is working with Ericsson and Nokia-Siemens on a $4 billion plan to build out its LTE network, hoping to carry the iPhone 5 and keep up with competition.
The Bellevue, Wash.-based company is also expanding its HSPA-plus network, which will allow the iPhone 4S to run at 4G levels speeds.
T-Mobile's network upgrade puts it in a better position to land the next-generation iPhone, as well unlocked versions of the handset. Customers can use an unlocked iPhone on the carrier's network, but the device's data speeds are much slower than if used on Verizon, AT&T or Sprint's services.
An iPhone-compatible HSPA-plus network will allow the 4S to run at the fastest speed possible.
The 4S's ability to run at its maximum speed at T-Mobile may draw some iPhone customers to the carrier, but the company still does not offer the device at a subsidized price. Apple has resisted officially offering the iPhone at T-Mobile, but the carrier's plans to rollout an LTE network next year may help its chances of getting the next-generation version of the device.
Analysts expect Apple's next iPhone to be powered by LTE. Although there is no confirmation a new iPhone would come to T-Mobile, the carrier is at least keeping itself in the running by having its network up to date. Apple's smartphone has been the source of major booms at AT&T, Verizon and Sprint, and T-Mobile suffered mightily without it. The ability to offer a new iPhone would go a long way in helping the fourth-place carrier level the playing field with its competition.
Regardless of whether Apple and T-Mobile can work out a deal to offer the next iPhone or not, the network upgrades are still a good step for the carrier. The improvements to the HSPA-plus network will make current devices even faster and LTE service means T-Mobile will be a likely landing spot for top-of-the-line Android and Windows Phone devices in the future.
Still, while T-Mobile is taking the next step with its network, the company may always be behind the pack if it can't offer the iPhone.
Most think the success of e-books, coupled the with the absence of printing costs, means big bucks for publishers, but there is more to the story on why prices of books on the Kindle and iPad are on the rise.
When Amazon first launched the Kindle, publishers maintained the wholesale model it used with traditional book retailers. But the online retailer chose to sell books on the Kindle at a loss to make its new e-reader more appealing to buyers.
The strategy eventually worked out for Amazon, but left publishers a product whose price value was greatly diminished.
At the time of the original Kindle's launch, best-selling e-books were available for $10, less than half of what most physical retailers were charging. The low price of e-books on the Kindle misled customers to believe that publishers were now able to produce books electronically at a fraction of the cost of a physical copy. However, that is not the case.
Whether a publisher publishes a book electronically or digitally it is still responsible for paying the author, editor, copy editor and design team. Compared to these expenses, the cost of actually creating a physical copy of the book is cheap.
The cost of converting a book into e-text, for example, can range from 20 cents to 90 cents a page for a simple conversion, according to Sriram Panchanathan, senior vice president for digital solutions at Aptara, to Digital Book World.
Larger publishers often hire teams of ten to fifteen people devoted to managing the digital conversion process, while smaller publishers hire two to three managers. Salaries for low-level managers average at $73,000 and can top out at $200,000, since their technology skills are at a premium.
The technology costs can be high, but once Apple's iPad emerged and publishers had another vendor to sell books to, an opportunity for a new model emerged. Publishers were able to set the price of the e-book themselves. For every copy sold in the iBooks Store, the publisher took 70 percent of the cost and Apple took the remaining 30. As a result, publishers began selling books in Apple's bookstore at a higher price, and eventually started doing the same thing on the Kindle.
This sudden increase in price gave users the perception that publishers were money- hungry, but what these companies were actually doing was trying to restore lost value to their product. The rising price of e-books may cause some readers to revert to buying physical copies of their favorite titles, but publishers are okay with that too. Profit margins for publishers are still better on print books than e-books.
Although publishers may have reaped the benefits of increased e-book prices on both ends, that looks as if it will soon come to an end. Apple and publishers now find themselves embroiled in a lawsuit with the Department of Justice over colluding to raise e-book prices.
If the DoJ has its way, e-book prices will likely drop, and the value of publishers products will change forever as the industry moves to find a new model.
Research in Motion is pinning its hopes for a rebound on its BlackBerry 10 platform, but no matter how good the system is, it may be too late to save the troubled Canadian company.
RIM touted BlackBerry 10 at its "World" conference in Orlando, Fla., but the software still remains under development. The company did, however, give initial software tools to developers looking to create for the platform, moving a step closer to its launch, expected later this year.
CEO Thorsten Heins gave an enthusiastic keynote address at the conference, but even releasing the development tools didn't appease investors and analysts. RIM's market shares dropped by more than 5 percent after Heins' address, instead of rising on the news.
The company's Alpha Dev device prototype, which has no physical keyboard, will help developers test how their creations will perform on the new platform. Company officials were quick to point out the BlackBerry 10 will differ greatly from the Alpha Dev, but many analysts said the prototype device looks like a smaller RIM PlayBook.
BlackBerry 10 is reportedly a vast improvement over RIM's current system, but unless developers create apps for it, the Canadian company will have pinned its hopes on yet another failure -- and this one may finally put the smartphone pioneer out of business.
RIM, which at one time had topped the highly-competitive smartphone market, has fallen far behind Apple and Android, despite being favored by government and enterprise users for its security capabilities. While RIM rested on its laurels and waited too long to release updated devices, Apple and Android passed it by with their increasingly more advanced touchscreen phones.
However, RIM is returning to the basics that built the company. After Heins took the CEO reins from co-CEOs Jim Balsillie and Mike Lazaridis in late January, he said the company will revert to its core focus on enterprise to keep BlackBerry alive, due in part to its well-known security systems popular in business markets.
However, BlackBerry 10 -- which may determine if RIM remains alive -- is still on the planning table, and won't come out before this fall, at the earliest. This will give Samsung's newest Galaxy line, set to come out this summer, even more time to snatch away BlackBerry users. It also puts the BlackBerry 10 out just in time to compete with the next iPhone, due to come out this fall as well. No matter how many features the BlackBerry 10 has, it will likely pale in comparison with the iPhone's features and the thousands of apps it will have available.
In addition, if the public doesn't embrace the BlackBerry 10, RIM can't attract developers to build apps, which, of course, means people won't buy the new device. However, a recent survey said only about 16 percent of developers are interested in writing apps for BlackBerry, compared with 90 percent for Apple and 80 percent for Android. RIM is dangling a $10,000 lure for developers to write apps for BlackBerry 10, according to allthingsd.com, but a top app on the more popular platforms could bring developers far more than that in the long run.
Some developers could be attracted by more than money. RIM's head of developer relations Alec Saunders said developers "building for BlackBerry 10 will be able to easily create the kind of cutting-edge apps that deliver truly engaging experiences."
For example, the tools RIM distributed included native code coverwork, the Cascades user interface framework and HTML5, Reuters reports. Cascades will help developers create graphically rich work, and the native code will give developers access to the device's core features, like the camera.
RIM plans to add more tools in coming months and announced the developed apps will also run on the PlayBook, once owners upgrade the tablets with the new OS.
Meanwhile, Heins admitted BlackBerry 10 is taking some time to come out, but RIM is "taking our time to make sure we get this right."
The time and attention devoted to perfection may well backfire, however, if the BlackBerry 10 once again trails the new iPhone and Android phones and doesn't come out in time -- or have the features and apps it needs -- to attract at least some users away from RIM's far-more-powerful competitors.
Barnes & Noble is revolutionizing e-readers by adding mobile payment technology to its Nook, through a partnership with Microsoft to challenge rivals Apple and Amazon.
Big Plans For Mobile Payments and Microsoft
The bookseller is adding NFC technology to the Nook, and plans to integrate mobile payments with its in-store browsing experience.
"You can walk up to any of our pictures, any of our aisles, any of our bestseller lists, and just touch the book, and get information on that physical book on your Nook and have some frictionless purchase experience. That's coming, and we could lead in that area," CEO William Lynch told Fortune, highlighting how the company plans to wield NFC to give it a leg up on competitors without in-store components.
Barnes & Noble's foray into NFC will help the Nook stand out from other e-readers, and its partnership with Microsoft is fostering deep integration, which will further boost the Nook's credentials.
Lynch discussed the potential for running the Nook on Windows 8 instead of Android, which would be a huge boon for Microsoft and give the e-reader a distinguishing characteristic. Windows 8 is set to connect mobile devices with laptops and computers, and connecting an e-reader to the wider Microsoft ecosystem opens up possibilities for the Nook to take advantage of.
Lynch, for example, envisioned integration with Microsoft's Office suite and other publishing tools, so authors could put materials composed through Microsoft directly to the Nook. Apple already does this with iBook Author, but Office is the most-used word processor, so the Nook will have a big advantage in luring authors. Moreover, the controversy surrounding Apple's publishing deals may further push writers into Barnes & Noble's arms.
... But Rivals Won't Take This Lying Down
The Nook will have formidable competition no matter how well it innovates. Apple may lose authors if Barnes & Noble incorporates Microsoft's publishing tools, but the iPad is still the premiere tablet, and other companies are also striving to make revolutionary changes to e-publishing, like LG with its upcoming flexible, paper-like e-reader.
Amazon's Kindle sales are still brisk, and the company is testing an app purchasing system, looking to recruit the best app developers. Also, one of Microsoft's problems with its OS is its lack of apps, so Barnes & Noble may need to figure out a way to compensate or risk losing business.
The Bottom Line
Barnes & Noble's embrace of NFC shows the company is looking for ways to stand out, but it may run into problems convincing customers to adopt the technology, as research shows buyers are less enthusiastic about mobile purchasing than the retailers implementing it. No matter how cutting-edge the NFC debut looks, unless customers are open to using it -- and unless there is enough content and apps to take advantage of it -- the benefits will be negligible.
Barnes & Noble's recent ventures with Microsoft and NFC may give the company a boost, but it has to convince customers to use NFC technology and prove Windows' worth as a mobile OS to sway consumers. The publishing advantages Barnes & Noble's integration with Office are likely to attract authors, but it may take time to reap the benefits from other customers.
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