Black Friday online sales in 2016 jumped 21.6 percent over 2015, compared with 12.1 percent online sales growth Cyber Monday, reported Adobe Digital Insights this week, so Black Friday may outpace Cyber Monday this year. Online holiday revenue Nov. 1-Dec. 31 grew 11 percent over 2015 to $91.7 billion, and billion dollar days were up by four to 57, said the company. Smartphone commerce traffic was up, but mobile conversion rates lagged those of PCs by 2.4 times. Conversion was highest on Cyber Monday, at 2.8 percent, some 26 percent below the desktop average, it said. Once the major shopping weekend hit, “the mobile gap disappeared and both websites that grew vs. those that didn’t tracked the same share of mobile traffic," said analyst Becky Tasker.
Over-the-top services such as DirecTV Now that offer live linear TV are projected to grow to $7 billion in worldwide revenue by 2021, from $1 billion last year, ABI Research reported. The services align with carriers’ efforts to adopt “mobile-first mindsets” as mobile subscriber bases and revenue advance beyond fixed line revenue with per-consumer, vs. per-household, connections, said the research firm. The new model “helps win the battle for exclusive content rights but poses strong technical challenges,” said analyst Sam Rosen, citing the need to develop robust content management systems, video transcoding and storage pipelines and application ecosystems. Cobbling together video distribution networks is “just the beginning,” said Rosen. As mobile video consumption increases, mobile operators are exploring policy-based approaches to meet customer expectations and manage the effects of video services on mobile data caps, said the firm. The formidable technical challenges have led operators to make investments in technology platforms, ABI noted, citing the AT&T's purchase of Quickplay Technologies (see 1605160025) and Disney’s stake in BAMTech (see 1609220053). "Despite the technical challenges, OTT services help pay-TV operators attract cord-cutters with a cheaper pay-TV alternative, as well as next-generation customers who never planned to subscribe to a traditional pay-TV service," said analyst Khin Sandi Lynn, saying live OTT services, especially those with sports packages, are gaining the most traction.
Pandora shares were up 6.5 percent in mid-day trading Friday to $12.78 after an announcement Thursday of a 7 percent workforce reduction and higher-than-forecast Q4 revenue projections. CEO Tim Westergren called the job cuts a “tough, but important” moment in evolving to a “large, enduring” business.” In a news release after markets closed Thursday, the company said it expects to exceed previously announced Q4 2016 revenue projections ($362 million to $374 million) and adjusted EBITDA loss guidance ($51 million to $39 million) ranges, crediting “strong advertising performance.” The company, due to launch its long-awaited on-demand music service this quarter, surpassed the 4.3 million paid subscriber mark in Q4, it said. Pandora launched its mid-tier Pandora Plus plan at the end of Q3 -- a remake of its Pandora One offering -- and said it generated more than 375,000 net new subscribers by year-end. It did so largely through homegrown marketing, saving on customer acquisition costs, said Westergren in a letter to shareholders. “More than 70 percent of our new subscribers came from in-app promotion,” said Westergren, saying that’s a competitive advantage that bodes well for Pandora being able to upsell existing customers to its upcoming premium subscription business. In the two months since the completion of direct agreements with music labels and publishers, the company saw a “dramatic increase” in partnership activity, with “thousands of artists” publishing more than 7,000 messages heard by Pandora listeners over 600 million times. Such artist engagement is driving listening session length, said Westergren. Dougherty & Co. analyst Steven Frankel maintained a “neutral” rating on Pandora in an investor note, citing stiff competition from Apple, Spotify and others as it rolls out its on-demand services. “Given the execution risk,” Dougherty will maintain its rating “until we have more confidence in management's ability to reach, maintain and scale profitability," Frankel said.
LAS VEGAS -- Comcast Xfinity Home was one of the few smart home companies at CES not bragging about Alexa integration -- promoting new voice control capability on its X1 remote control instead. That’s likely to change, Daniel Herscovici, general manager of Xfinity Home, told us. Xfinity has deployed over 10 million voice remotes at a clip of 800,000 per month, said Herscovici, so that homegrown technology, which offers a “great experience,” he said, isn’t going away anytime soon. “I’m open to it,” said Herscovici when asked about Alexa integration, “and I’m exploring the possibility.” Herscovici’s philosophy: “If a consumer has selected Google Home as their voice system, I shouldn’t force them to rip it out to use my system,” he said. “I want to meet the customer where they are, so I’m open to doing those integrations.” Terms have to be worked out, he said, but “I would be surprised if exiting 2017 we didn’t have those relationships established.”
Wearables could offer an opportunity for wireless power company Powercast, which has been supplying FCC-certified power transmitters, chips and modules to the industrial market for 14 years, Jason Gill, electrical engineer, told us at the company’s CES booth. The company showcased its technology, along with a development kit, with keyboards, sensors, clothing, key fobs and a smartwatch, looking to sign wearables makers looking for radio-frequency-based wireless charging. Most devices using the company’s Powerharvester chip charge at distances of 1-3 feet, said Gill. Powercast doesn’t have designs on RF charging for smartphones or PCs, he said, calling RF charging for higher-power devices “not practical.”
LAS VEGAS -- The Digital Entertainment Group, along with major music companies and industry organizations, announced at CES an expansion of Hi-Res Audio from downloads to “studio-quality” Hi-Res Audio streaming, with Rhapsody, Pandora and HD Tracks throwing support behind the initiative. Until now, Hi-Res Audio recordings, which deliver the same quality as the studio master, could be purchased from only a select number of music download stores. The expansion of Hi-Res Audio into the streaming market underscores the recent rise in subscription music services, said DEG.
LAS VEGAS -- DTS’ upcoming Connected Radio platform likely will involve a subscription, Jeff Jury, general manager of the company's HD Radio and Automotive Group, told us at CES. The platform, which Jury said will debut in 2018, will include music discovery, hi-res audio and local caching of music that will remain in the vehicle. The company used the show to make other HD Radio announcements (see the Jan. 6 issue of this publication).
HD Radio announcements from DTS at CES include new implementations from Jaguar, Dodge, Honda, Toyota, VW and Subaru and new data technology from partners Total Traffic Network and the Broadcaster Traffic Consortium, said DTS in Las Vegas. DTS will also demo its Connected Radio platform, which combines FM radio with IP-delivered content, new features and services using existing radio capabilities. Connected Radio is being prototyped by DTS original equipment manufacturer partners, it said. DTS, in its new life as a wholly owned subsidiary of Tessera, also announced an expansion of its other businesses at the electronics show.
Samsung Electronics America Chief Operating Officer Tim Baxter led off the company’s CES news conference acknowledging the “challenging year” of 2016, especially regarding the Galaxy Note7, which it had to pull from the market due to faulty battery design. The company is continuing its “intensive efforts internally and with third-party experts to understand what happened and to make sure it does not happen again," Baxter said. The company will share the root cause report on the Note7 soon, Baxter said Wednesday in Las Vegas. Areas of 2017 focus include mobile devices, he said. For TVs, another area of focus, the firm added search features to make it easier to find 4K and HDR content, said Executive Vice President WonJin Lee. It's launching Samsung Checkout to offer a fast way to find, buy and watch 4K content, partnering with Fandango Now, Rakuten and TV Digital, said Lee. Its Chromebook line now has 2 million apps, said Vice President Alanna Cotton.
LAS VEGAS -- Comcast is previewing at CES a whole-home networking solution that will be enabled automatically in first half 2017 for its 10 million existing internet customers with an Xfinity Wireless Gateway. That number is expected to grow to 15 million by year-end when its next-generation wireless gateway becomes available to customers, it announced.