Cord-shaving report causes irritation

It didn’t help the pay-TV networks’ mood that the NPD report came out in the same week that Netflix reported huge fourth-quarter and full-year subscriber growth and crushed its Q4 earnings’ forecast.

Must-see TV still must-see

The findings of a new study by Ericcson give empirical support to the points actor Kevin Spacey made in his widely quoted comments at the Edinburgh International Television festival last week.

Today in Connected Consumer

Connected TVs and over-the-top streaming don’t have to mean lost advertising revenue for content owners and could even create new advertising opportunities, according to a new report by Frank Magid Associates and commissioned by digital ad network YuMe. A national survey of connected TV users found a marked preference for ad-supported content over paid, ad-free content. Moreover 90 percent of viewers say they notice the ads in OTT streams and two-thirds say they are “likely” to interact with them. Even if that’s over-stated it’s an impressive number. Meanwhile, Fortune contributor Nigam Arora dives into the Apple TV 2.0 patent I discussed in my latest Weekly Update to uncover this nugget: a method for replacing ads in broadcast streams with locally cached ads on the fly. While Arora suggests it could be used to replace ads inserted by broadcasters with ads from third-party sources, I suspect it has more to do with giving the networks a way to target individual Apple TV users based on various metrics collected by Apple. That would be more of a win-win.

Today in Connected Consumer

For all the attention going to HTML 5 and browser-based apps, native apps are still the most popular way to access mobile media content, according to comScore. The The analytics firm rolled out a new mobile measurement product today called Mobile Metrix 2.0, along with the first set of data on consumer usage. Overall, more than 80 percent of the time spent consuming mobile media was spent using an app, rather than a browser. With Google sites, for instance, which include YouTube, 81.1 percent of time was spent using an app, while only 18.9 percent of the time engaging with the site was spent using a browser. There were some notable anomalies, however. More than half the time consumers spent engaging with ESPN on a mobile device was done using a browser. For AOL and The Weather Channel, just under half the time spent engaged with the site was spent using a browser. Without at least a few more months of data it’s probably not worth trying to read too much into those figures. But it’s certainly worth keeping an eye on.

Today in Connected Consumer

Is it time for Amazon investors to panic over the Kindle Fire? According to IDC, Amazon’s “#1 bestselling, most gifted, most wished for product” of last year apparently became one of the least bought tablets in the first quarter of this year. Shipments of the Fire fell from 4.8 million in the holiday quarter to 750,000 in the first quarter of 2012. Meanwhile, E-Ink Holdings, the sole supplier of black-and-white screens Amazon’s Kindle line of e-readers, reported last week that “Our major customer [i.e. Amazon] was too optimistic about its sales in the fourth quarter of last year and ordered too much from us. That made the customer order almost nothing from us in the first quarter.” The reports set off alarm bells among analysts. Some even compared the Kindle Fire to a holiday fruitcake: suitable for gift-giving but otherwise inedible. As NPD notes in a new report, however, these are very early days in the tablet market, which it expects to grow by 5X over the next five years. Manufacturers are still figuring out consumer preferences and habits, and the market is liable to take many twists and turns between now and 2017. One bad quarter, in other words, does not a trend make. Still, if the Kindle Fire turns out to be a highly seasonal product, that could become a problem for Amazon as it seeks to leverage the device to increase e-commerce.

Today in Connected Consumer

Say you were a publisher and you were contemplating your electronic future. A new survey by the Pew Research Center tells you that more than one-in-five U.S. adults has read an e-book at some point, and that 15 percent of U.S. readers are reading an e-book on any given day, four times the number who were e-reading two years ago. What’s more, all that e-reading seems to be spurring people’s appetites for books of all kinds, both print and electronic, causing them to buy, borrow and read more of both. How should you try to shape the future of the e-book business? Should you hold firm to the agency pricing model that gives you control over e-book retail pricing, even at the risk of anti-trust litigation, or should you cede control over pricing to the market, avoid litigation and hope it leads to more e-book reading overall? According to the Wall Street Journal this morning, the Justice Department is pushing publishers, as well as Apple, to tear up their agency pricing deals and let retailers set their own e-book prices, or slse face litigation. Decisions, decisions.

Today in Connected Consumer

With paywalls coming back into fashion among online news sites, publishers are trying to figure out how high to build them. The Wall Street Journal is hosting a 24-hour “digital open house” today, courtesy of Jaguar, temporarily taking down one of the steepest paywalls in the business. The model is similar to one adopted by the New York Times, which partnered with Ford to offer free digital subscriptions when it erected its new paywall. Chris Hughes, the new, 28-year old owner of The New Republic, just partially dismantled the magazine’s paywall, making more content free but limiting comments and access to the archive to subscribers. The biggest news, though, comes from Google, which is partnering with AdWeek and about two dozen publishers on a new paywall alternative. Under the new Google Consumer Surveys model, some articles on web sites will be partially blocked. To continue reading, users will be asked to answer a multiple-choice, one-question survey. Advertisers will pay Google to place the surveys, and Google will pay publishers 5 cents per answer. Now if Google could just figure out how to keep the surveys embedded in articles as they get aggregated by third parties they might really have something.

Today in Connected Consumer

According to new research released by Parks Associations, 87 percent of iPhone 4S users make use of at least one feature of its Siri virtual assistant monthly, which would seem to indicate strong adoption of voice-activated services. But despite heavy advertising from Apple about Siri’s capabilities, iPhone users are not being very adventurous with her yet. The most popular use for Siri is for making calls and sending text messages — basically what people ordinarily use their phones for, and which many phones can already do using standard voice recognition technology. Roughly a third of iPhone 4S owners say they have never used Siri for playing music, scheduling a meeting or most of the other cool Siri tricks Apple highlights in its ads. Part of the problem is that the iPhone 4S version of Siri still has a 1.0 feel to it. It’s going to take a lot more third-party content and service providers stepping up to integrate with Siri before it feels like a genuine game-changer.

Today in Connected Consumer

Cisco is out today with its latest Global Mobile Internet Data Traffic Forecast, which projects an 18-fold increase by 2016. A whopping 71 percent of that traffic will be video by 2016, according to Cisco, driven by an expected boom in tablet ownership. The growth in mobile video traffic will put tremendous strain on wireless networks over the next five years, which Cisco believes will force service providers to look for new ways to off-load traffic to fixed networks via Wi-Fi. One bit of good news for service providers, tablet usage seems to skew heavily toward evening hours presumably when tablet owners are at home and have access to their home Wi-Fi networks. Whether that’s simply because most tablets today are Wi-Fi only or because tablet behavior is genuinely different from smartphone behavior could turn out to be a very important question.

Today in Connected Consumer

Remember when smart-aleck bloggers were asking what people would actually do with a tablet? Yeah, well, never mind. People seem to have figured out plenty to do with them. According to the Pew Research Center, nearly one-in-five U.S. adults now own a tablet or e-book reader. That’s nearly double what it was in the middle of 2011. Tablet ownership is even higher among college-educated adults, nearly one-third of whom know own one of the devices. That latter number is likely to go higher still if the preliminary results from Apple’s new digital textbook initiatives are any indication. Full results from the Pew Center research are available here.