Video Subscription Price Hikes Aren't a Problem, Yet, Analyst Claims

Are complaints about ever-growing video subscription prices overblown? At least one equity analyst thinks they are, at least for the moment.

Programming-rate increases keep driving subscription TV prices higher, but other consumer expenditures are rising faster, according to Sanford Bernstein senior analyst Todd Juenger. That's a bit like saying people shouldn't claim about continually rising prices because some products they buy are inflating faster. 

From 2005 to 2011, the price of pay TV has grown 4.7 percent on an annual basis, faster than the broader inflation rate. The consumer price index, for example, rose 2.4 percent annually over that period.

Juenger points out that pet food prices rose 4.8 percent, a New York City subway ride grew seven percent, a gallon of gas grew about eight percent and a cup of coffee grew nearly 16 percent, Juenger argues. 

Few consumers are going to buy that argument. For starters, some of those products are used only by some people. Video subscriptions and gas are used by most people, and represent significant amounts of money, compared to other purchases of smaller amounts that are spread out over a month's time. 

In other words, gasoline and video subscription bills are large and noticeable. One way of looking at matters is that, every 30 days, subscribers get a highly visible reminder of how much they are paying when they get their bills. For that reason, service providers long have worried about "sticker shock," especially with the advent of triple play services. 

Also, video subscription prices have tended to rise by more than the overall rate of inflation every year, for decades, not just for limited periods of time. 

Also, as Juenger and all studies have shown, any single viewer watches only about 10 to 14 channels, making all the rest seem like waste, even if suppliers would say all that "waste" means a more affordable product. 

That isn't to say a shift to an a la carte retail pricing model necessary would save consumers money. All other things being equal, consumers probably wouldn't save money. But that's the point. Over time, all other things will not be equal. 

The existing cost structure of the video business will be disrupted. The analogy, for those of you with telecommunications backgrounds, is the level of profits and profit margin in the old monopoly business, compared to the level of profits and margin in the competitive business. 

The cost structure of the business has changed. The same thing will happen to the video entertainment business, eventually. 

Turkcell Launches Unified Mobile Wallet

Turkcell is introducing a mobile wallet service, working with MasterCard and Garanti top create what it claims is a unified wallet offering contactless payments, peer to peer payments, money transfers, airtime top-up, utility payuments, loyalty programs, offers and coupons, both online and at participating retailer locations.

Turkcell Chief New Technology Business Officer Cenk Bayrakdar says 13 other banks will become participating partners. Notably, the platform also will be accessible by Turkcell customers who do not have bank accounts.

Turkcell customers activate Turkcell Wallet by adding their cards using text messaging,, or by loading cash to their wallets through Garanti ATMs or Turkcell Communication Centers.

"Mobile Elite" Finds They Must Supply Their Own Tools

“Consumerization,” the trend of employees using personal devices and cloud services for work, not only is widespread, but also shows a trend at work for more than a decade, namely that although “enterprise” information technology traditionally has been more advanced than consumer tools, that now is reversed, in many ways.

A study by Forrester Research suggests that more employees have better technology at home than they have at work. Today, 52 percent of all global workers Forrester Research surveyed, and 62 percent of younger employees, feel that they have better technology at home than at work.

“When we analyzed the data on information workers, we found that a subset of highly connected mobile employees is also using multiple personal devices and applications,” Forrester Research says. Forrester calls this group of employees the “mobile elite.”

“Mobile elite workers are those who make the most intensive use of multiple personally acquired technologies for work and who use them for improving their work with customers and business partners. Those technologies include smartphones, tablets, home computers, and non-authorized software applications and web/cloud services.”

What makes them elite? It starts with their willingness to spend their own money for work: 58 percent  buy the devices and applications that help them to be productive and to collaborate with customers, partners, and other employees, Forrester Research says.

That trend also has been described by other studies.

About 16 percent of respondents pay for their own smart phones used for work. Some eight percent purchased their own tablets and use them for work. Some 35 percent of respondents use their own home computer for work purposes. About 38 perent use software that is not specifically authorized by their employers.

These mobile elite users wind up relying on personally procured technology for work because they need to, not because they just want to, Forrester Research says.

Twenty-seven percent of the information workforce uses two or more personally procured technologies, including personal cloud apps, personal smartphones, tablets, and home computers, to get work done.

Among employees who use unauthorized personal apps and sites, more than half do it to get work done; “because I needed it and my company didn’t provide an alternative,” Forrester Research says.


In fact, one of the reasons some think consumer technology is more important or disruptive than traditional enterprise technology is precisely this transformation of roles. In the past, advanced technology has been adopted first by enterprises, then mid-market firms, then medium and small business and finally consumers.

These days, advanced technology increasingly is created first for consumers, and then adapted for enterprise use.

Mobile Shopping Reaches $20 Billion

Mobile purchasing now represents $20.7 billion worth of shopping using mobile devices, Javelin Strategy and Research reports. 

About $5 billion of mobile purchases were made through tablets in 2011. The number of people owning tablets is expected to more than double within the next three years, which should lead to an explosion in retail purchasing using tablet devices. 

U.S. VoLTE Delayed Until 2013 or 2014?

The outlook for Voice over LTE (VoLTE) in the U.S. market is pretty dire, with sources saying it might be until late 2013 before Verizon lights up nationwide coverage. and 2014 for Sprint, says Doug Doug Mohney. 

That might matter if you believe VoLTE really will resonate with end users, allowing service providers to integrate other media with voice, or match features offered by over the top voice and messaging providers. 

But the potential advantage VoLTE represents is debated. VoLTE is supposed to allow mobile service providers to operate at lower cost, and add value. 

The issue is that, in most cases, lower price tends to beat "more features." No matter what people think "should" be the case, consumers and businesses shift to VoIP to save money, mostly, though the new features sometimes are a nice plus. 

If people are using over the top voice and messaging, it typically is because of the lower price. Matching those features, using VoLTE, probably won't resonate much if the carrier VoLTE prices are not close to those of OTT alternatives. 

Put Millennials First

Most elections, one supposes, are about perceived self interest. Candidates or parties are perceived, rightly or wrongly to “support my interests,” or “harm my interests.” But without overplaying the theme, the 2012 U.S. elections might unusually be less about “my interests,” and more about “my children’s interests, or my grandchildren’s interests.”

That might tend to explain why single (no children) voters might tend to lean one way, while parents might tend to lean a different way. I don’t mean that in a simple party affiliation sense, or a marital status sense, but in a time frame sense.

Parents, you might argue, naturally have a longer time frame than people without children. That isn’t to say parents necessarily agree about what should be done to ensure better life chances for their children and grandchildren, only to say that the behavioral time frame is different from that of any particular person without children. Those differences in perspective are not universal, nor exclusive, just arguably different in magnitude, by some significant amount.

Perhaps this is an election that is a bit unusual. Maybe some people will choose to act in ways that potentially harm their own interests, to protect the interests of their children. In other words, they will choose to put the interests of their Millennial children ahead of their own interests.

Some might say that is what they should do. Parents will get this. It's what they do, every day.

Generation Opportunity, which describes itself as “the largest non-profit, non-partisan organization in the United States engaging and mobilizing young Americans on the important economic issues facing the nation,” might be a case in point for parents and their grown children to be thinking in similar ways about the future.

The youth unemployment rate for 18 to 29 year olds specifically for September 2012 is 11.8  percent. The youth unemployment rate for 18 to 29 year old African-Americans for September 2012 is 21.0  percent. The youth unemployment rate for 18 to 29 year old Hispanics for September 2012 is 12.1  percent and the youth unemployment rate for 18 to 29 year old women for September 2012 is 11.6  percent.

The declining labor force participation rate has created an additional 1.7 million young adults that are not counted as “unemployed” by the U.S. Department of Labor because they are not in the labor force, meaning that those young people have given up looking for work due to the lack of jobs.

If the labor force participation rate were factored into the 18 to 29 youth unemployment calculation, the actual 18 to 29 unemployment rate would rise to 16.6  percent,
Generation Opportunity says.

Some “11.8  percent of young Americans are now unemployed through no fault of their own and more still are falling out of the workforce due to an historic lack of opportunity,” says  President Paul T. Conway, former Chief of Staff of the United States Department of Labor and former Chief of Staff of the United States Office of Personnel Management.

“Young Americans know this is not fair,” Conway simply notes.

For Generation Opportunity, the polling company WomanTrend conducted a nationwide online survey of 1,003 adults ages 18 to 29 between July 27 and July 31, 2012.

Some 29  percent of Millennials believe that the economic policies coming out of Washington are helping them, while 47  percent of Millennials say that the economic policies coming out of Washington are hurting them. The point here is that, perhaps unusually, a significant  percentage of parents might be thinking they need to act in ways that further their childrens’ interests, and their grandchildrens’ interests, not their own.

And that would mean the job market first and foremost. Some 89  percent of young people ages 18 to 29 say the current state of the economy is impacting their day-to-day lives.

Some 51 percent reduced their entertainment budget;

• 43 percent reduced their grocery/food budget;
• 43 percent cut back on gifts for friends and family;
• 40 percent skipped a vacation;
• 38 percent driven less;
• 36 percent taken active steps to reduce home energy costs;
• 32 percent tried to find an additional job;
• 27 percent sold personal items or property (cars, electronic appliances, or other possessions);
• 26 percent changed their living situation (moved in with family, taken extra roommates, downgraded apartment or home);
• 17 percent skipped a wedding, family reunion, or other significant social event;
• 1 percent other;
• 8 percent none of the above (accepted only this response);
• 3 percent do not know/cannot judge (accepted only this response)
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• Longer term decisions also are being affected, apparently. Some 84 percent of young people ages 18 to 29 had planned to but now might delay or not make at all a major life change or move forward on a major purchase due to the current state of the economy.
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• Those postponed actions include 38 percent who are delaying buying their own place, as well as:

• 32 percent go back to school/getting more education or training;
• 31 percent start a family;
• 27 percent change jobs/cities;
• 26 percent pay off student loans or other debt;
• 25 percent save for retirement;
• 23 percent get married;
• 12 percent none of the above (accepted only this response);
• 4 percent do not know/cannot judge

80,000 Koreans, Gangnam Style

Sorry, couldn't resist. There's no accounting for what goes viral.