Monday, January 28, 2013

What is a TV viewer worth?

I don't watch alot of TV, but when I ride my exercise bike I turn on the TV to try to distract myself from the boring ride.  Many (most) days I simply can't find a single thing on worth watching anymore - and even when I can find something to watch I began to notice all the advertising that keeps interrupting the shows.  And it got me to thinking about how much I pay to have the TV channels, and that I'm paying for them to ship all this advertising to me, and I should at least get something that can sufficiently distract me for the hour a day I ride my exercise bike.

So I got to wondering how much me watching a show was actually worth to the networks - and some of the estimates I've seen are pretty low.

Here's an estimate of $0.10 per hour that advertisers pay per viewer.

Here's another estimate of $0.04 per hour.

So I'm thinking the days of cable TV being able to charge $50-$60 per month are about to end, because even if I watch an outrageous amount of 40 hours of TV per week - that's only $4 a week at prices advertisers are paying for my eyeballs / or $16 per month.  If a forum is setup for me to buy my programming directly from the networks via internet download - costs should drop dramatically.   Should....

Here's a quote saying the Superbowl is getting $3.5 to $4 million for a 30 second spot.  Apparently 111 million viewers - or about $0.04 per single viewer for 30 second slot - (or $0.08 per viewer per advertising minute) and they run alot of ads on the superbowl - so obviously the superbowl per hour is much higher.  But lets say they run 20 minutes of ads during an hour of the Superbowl - so that comes in at 20 x $0.08 = $1.60 per hour per viewer, and that's the absolute upper bound of cost for the most watched show in the history of TV.

So my thought is related to digital products in this way -
- We have self publishing where authors sell directly to end customer without intermediary.  Amazon/Barnes and Noble.
- Music is being sold this way - we can all publish our own albums now.
- Why are TV shows not being sold this way via micro-transactions at closer to the cost that they're paying advertisers?  It seems the networks and content providers could make a good bite of cash and improve margins by selling direct to the end user digitally.

I'll pay more than $0.04/hr of content, more than $0.10/hr of content, just to watch the stuff without all the ads and actually have something interesting to watch when I want to ride my bike.  And I don't feel like I need to pay very high cable fees, or monthly charges for the access to DVR or whatever other technology exists.

An internet connection is a must, but it seems to me TV is doing to itself what radio did many years ago - through consolidation and by diluting and degrading the product in many ways.  This drove many to other outlets like satellite radio, and to their own portable music/entertainment on their phones/mp3 players.  Is TV programming not far behind from going this same route?

Some will say that it already has, but from what I can tell the costs for alternate methods can still be quite a bit higher than the costs I'm quoting ($0.04 to $0.10 per hour of viewing) - so I'm thinking there's considerable room for the market to shake out.  Buying DVD's or streaming services still seems to come in at considerably higher prices than what advertisers say I'm worth.

I really want something I can hook to my router - pick the shows I want to watch - and buy them ala-carte.  Of course I can't count on anything to stream via my internet connection right now - but in theory I would like to sit down at my exercise bike - click a button - and buy a couple old Seinfeld episodes to watch for $0.10-$0.20 or so and be done with it for that day.

I sortof agree with this post:  Here's what buying movies and TV shows looks like 
quote:  "people are actually trying to give Hollywood money, and Hollywood is just ignoring them."

Sunday, January 27, 2013

Gravity Wells

I thought this image portraying the gravity wells in the solar system was pretty good.

Monday, January 21, 2013

Holdings 1-21

Just a listing of top holdings as of 1-18 from more to less

CMI  Cummins
BRK.B  Berkshire Hathaway - B class
WDC  Western Digital
NEU  NewMarket Corp
AAPL  Apple
CSTR  Coinstar
INTC  Intel
JOY   Joy Global
CF   CF Industries
GES   Guess
APEI   American Public Education

- I'm a little concerned that NEU's value has run up quite a bit and their last quarter was slower.  They have earnings coming up on 1-29.  Currently they seem to be at or near upper bounds of valuation ranges, so I'm taking it that the market expects good results.  If not I'm a little worried.
- INTC Intel  issued cautious outlook, but I'm hanging in there with them.  I have a difficult time seeing them not being major player w/ big cost advantages.
- JOY Joy Global is the most recent addition.  They make heavy capital equipment for mining.

Looking out there - if I add money to the market right now it'll probably be more to these existing positions, or only in a few smaller positions in smaller companies I have my eye on.  I've looked at MSFT some, but am going to hold off now due to margins and slow revenue - but I'm going to keep eye open.  They look so inexpensive and are paying an easily sustainable 3.4% or so yield right now.   I'm also looking a bit at a dividend payer YZC, the largest chinese coal mining company with ADRs here.  Growth demands need energy, but it is coal and I read many stories about air quality problems in China, so not sure how demand situation will play out.

Sunday, January 13, 2013

On Shareholders

I've been thinking a bit about the fallacy of shareholder "ownership" in the context of stock ownership.  My thoughts on the matter increasingly have me thinking many (most?) companies are run for the benefit of the managers and that aligning incentives w/ those of managers is key.  Some of this stems from a book by Jack Bogle discussing how capitalism doesn't work without effective owners - sorry can't remember which book - but also stems from observations that most corporate execs make out pretty well whether the company does well or not (unlike shareholders).

Now granted, stockholders aren't really "all that."   In reality stockholders are largely a diluted group often without any long-term stake and without any real say in anything that goes on in the company.  There's this idea that decisions in the company should be made with consideration of interests of shareholders, but in reality it's fair to question how high on the list shareholders are. I mean really, what more have most shareholders done than provide liquidity in capital markets?  To make shareholders paramount greatly overstates their importance in the scheme of things.

Right now I'm reading a book by Lynn Stout called The Shareholder Value Myth that says we'd probably be better off being honest with ourselves and stop trying to say we run companies for the benefit of shareholders, because even though it's a nice idea - we don't (although sometimes short term shareholders can gain sway at expense of longer term holders).  Often the only say shareholders get in anything is either to buy or sell stock.  

I found this link on the web that has a good article arguing a similar point called "What do shareholders own?"

Wednesday, January 9, 2013

Just listened to my first LP (aka "record album") in decades

Hi all,   I just listened to my first LP / album / "record" in decades - probably since high school.  I've heard the children today call them "those big CDs."

Anyhow, my Mom used to have a Gemini turntable that she'd use for her square dancing classes, and I've had it here at the house planning to make sure that it works and probably list it for sale on craigslist assuming all works well.

Anyhow, I hooked it up and went and got one of the old albums I had from high school back in the 1980s to play to test it on.  The album was Van Halen's "Diver Down."  Yes, I'm such a pack rat that I still have albums in storage that I haven't played in 20+ years - "just in case."

As I was listening to the album it struck me how the listening experience of music has changed since when I was younger.    I couldn't just skip the songs very easily like I can now.  Instead I put the album on and let it play through one side continuously, and then flipped the records and listened to the other side - also continuously - until I got to the last song - the cover of "Happy Trails"- and I couldn't quite make it through that one.  But it made me realize how the format of the music influenced how I listened.  If a song came on that I didn't care for I couldn't just skip forward - I had to patiently listen.  It makes for a different listening experience - and I actually kindof enjoyed it.  It makes me want to hook up my "good" speakers and listen through them instead of my "sortof OK" PC speakers.

I have a small pile of records to go through, both 33s and 45s, so I'll probably pull out another one an listen tomorrow - maybe that big foldout Boston album!