Google Ponders Pay-TV Business

And so it begins...

The Wall Street Journal reported this morning that Google is looking to crash the cable TV party, which the Digital Media and Entertainment group predicted in our view of the 2016 landscape for the sector, that software companies such as Google would soon become a force in the home video market. While Google has launched (rather unsuccessfully) the Google TV platform, they lacked the deals with major distribution companies like Walt Disney (ABC), CBS, NBC Universal (owned by Comcast), Time Warner, and others, to really compete in the offering of traditional TV service to consumers. This move would certainly address those concerns. What's interesting in this story is that Google recently hired a former cable-TV executive (Jeremy Stern) in September to hold talks with media companies on possible distribution deals. By relying on an insider, Google is clearly serious about entering this business, even though they continue to downplay their efforts.

As reported in the article, it will be interesting to see how Google fits this move into its YouTube strategy of offering free, ad-supported online channels, which it is currently rolling out with deals with celebrities and production companies. Could YouTube be their platform for delivering traditional TV content?

I also think their choice of Kansas City as the test market for this service is very intriguing. This market is reportedly serviced by Time Warner Cable, Dish Network, and DirecTV. Comcast doesn't appear to have a foothold in this market, so Google looks to have chosen a region where the nation's leading cable provider cannot put up much of a fight.

Digital Media and Entertainment: Comcast

A LEADER ON THE BRINK OF DISRUPTION

Company Overview: Comcast is the leading cable provider of video, internet, and phone services in the U.S., and after their recent acquisition of NBC Universal, they are also a global leader in the development, production, and distribution of media and entertainment. But despite their leadership position, Comcast is definitely on the defensive, understanding that the disruption of digital technology is approaching. While they have made several moves in recent years, acquiring NBC Universal and partnering with software and technology companies, they also have to deal with the internal issues centered around customer service and reputation in an increasingly service-oriented digital world.

Expansion into the Mobile Space: Comcast has recently introduced services that expand their business model into mobile, including the introduction of Xfinity TV and Xfinity 2go. Xfinity TV is a mobile application available for free on iPad and Android tablets that offers current subscribers the opportunity to watch TV shows and movies anywhere and anytime they want. Xfinity TV may also later serve as a platform for other applications, as they look to partner with Samsung and incorporate the Xfinity TV in with the Samsung Smart TV. Xfinity 2go is a mobile broadband wireless solution that allows customers to take the internet with them wherever they go, at 3G and 4G speeds courtesy of their partnership with Clearwire and Sprint Nextel.

Strategic Acquisitions: Comcast recently acquired broadcast network and production studio NBC Universal from GE in 2011. This mega-merger sets the stage for other large-scale deals for content on behalf of competitors in the internet delivery of entertainment. Comcast was faced with increased competition from Netflix, Vudu, Hulu, and other internet streaming companies, and their response was to vertically integrate content into their service offering. Only time will tell whether this was the right move for Comcast to make, but what is certain is that Comcast is

Partnerships to Prepare for What’s Next: Comcast has made several strategic partnership deals in the past several years in anticipation of the digital transformation of the media and entertainment industry. By partnering with Samsung, Clearwire, Sprint Nextel, Microsoft, Skype, and Facebook, Comcast is looking to maintain their leadership position by teaming up with technology companies in the face of this digital transformation. This offers some insight into the fact that Comcast knows the future of Hollywood, like many other digitally transformed industries in recent years, will go through Silicon Valley.

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Information Players in the Healthcare Industry

Here is one view of an industry map of the Healthcare industry. Because of the many linkages that exist, we see the potential for disruption coming from the players that best use Technology to create and capture value.

Our team will examine companies who are positioned to offer Software and Analytics capabilities. Specifically:

Allscripts	(Katy Perkins)
Athena Health	(Nader Mousa)
Microsoft	(Wishwas Mohan)
Verisk	(Eli Mather)

Additionally non-profit institutions have a cause and effect relationship with potential disruptions. Therefore, we will also explore the analytics capabilities of

MassHealth.

(Chris Glenn)

Do you agree with our view of the industry? Can you think of other companies that are positioned to enter or exit the industry? Do you think incumbency or capability will win out in the next 5 years?