With 3D a Bust, TV Gets Smart

CES approacheth, and so do video dreams. Last year the industry bet on 3D, with Sony going all in. As I reported after the 2010 show, it was not ready for prime time. It flopped.

This year hope changes to "smart TV" - the boob tube turned into a smartphone, with apps galore. Clever, certainly, but smart? Wait 'til you see the remote! Will immediately fail the Wife Acceptance Factor (WAF). 

Smart is not well-thought-through yet, but starts with an Internet-connected TV that accesses television online. The onslaught of Netflix continues unabated. Stories fly through the blogosphere about cord-cutting away from cable and into online TV. Cable is indeed losing customers, and about at the pace we saw a decade ago from landline to mobile telephony. 

I bought two networked blu-ray players that were simple enough to pass the WAF and yet provide Netflix, Vudu and YouTUbe on the telly. Both came from LG and were powered by Widevine, one of my investments that recently got bought by Google. I believe in online TV and have placed bets. 

Stepping beyond "online TV" to "Smart TV" and into the land of apps, and the future gets murky. TV remains a lean-back experience. For TV makers, the cost and complexity to enable an apps layer (typically powered by Google's Android) may be quickly wrung out of the profits in the hyper-competitive TV market. The advantage will inure to Google, Netflix and the new intermediaries who provide the content & apps services. 

Let's see what they cook up at CES. More when I return. 

Comments

[Wave Rust]

From previous post:

""Fortunately all the counts are flawed.
All the best to everyone for the New Year.
Posted by: Anon | Saturday, January 01, 2011 at 10:55 AM""

Exactly right, Anon.

It's a freaking bull market ,,,, still in P1 up, of III of (III) etc. March '09 ended Cycle II.

I'll be dead before this one is over.
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Russo doesn't get it, never has. His count is screwed from 1998 forward.

But he does know how to market with a forecast so far out in time, only an idiot savant would remember what he said in January of 2011.
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.
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short term top here ,,,, watch your 6, boys and girls ,,,, it's shorting time again

,,,, and right after that it will be time to go long again. :)

wave rust

spx 1390-1405, then 1550, are the new targets for the rally from the low spx 1170 in february. spx 1550 should be a good top from which to correct into the election.

and people thought my spx 1250-1275 target was perma-bull idiocy ,,,, Ha! :))

Hey people, don't forget, I have no credibility here, which gives me the edge over most of you here, of course. please ignore all posts by me.

irtrtcmmoamn
++++++

yel,
hope your 2011 IPO and tech boom activity is fun and, gets you even richer.
hope harbaugh stays at SU, but imagine Denver with elway, harbaugh and tebow - raider nightmare! :)
best to you and your family in 2011

best to all of you civil and thoughtful commenters here, including all across the bulls and bears continuum, from DG to Roger.

[Wave Rust]

""I believe in online TV and have placed bets""

online TV? is that interactive too? like when you holler at the umpires or referees, they can throw a flag on your team for a personal foul? can I call some plays too?

and, are those binary bets? :)

wave rust

[Sherman "Double Long"McCoy]

Smart. 3D, or otherwise, TV sucks! I haven't watched in yeara, and all I really miss is "Ice Road Truckers". You can have the liberal info-mercial that network news has become, ditto for the amoral alternative lifestyle("johnnie has two moms") shows and near-porn they display during the family hour. I don't want my kid watching the crap between commercials they try to pass off as entertainment these days anyway. If I want entertainment, I read a book, and am much happier as a result.

Drop out, unplug, and do something meaningful with your life. Volunteer at an orphanage, become a Big Brother to a disadvantaged kid, coach a soccer team, for Crissakes! How many episodes of "Two And A Half Men" do you really need to see in a lifetime anyway? How you spend your time defines who you are.

[Account Deleted]

ES Support levels
http://niftychartsandpatterns.blogspot.com/2011/01/s-500-futures-before-opening-bell_04.html

[Virgil]

Head & Shoulders top in Gold is in play. LS 9 Nov 10, H 7 Dec 10, RS 3 Jan 2011. Silver also bifurcated down out of the hourly plateau. Resistance still intact at 31.50 and could be testing support at 28.
Let's see how this plays out. All the fundamentalists like a rally to new highs, all the technicians see a pullback.

[Virgil]

Can internet TV conquer cable without major sports coverage? Maybe with bull market sports like baseball and basketball on the downslide. But without the Super Bowl, forget it.
Cable companies are lowering rates. It's not advertised but you can call them right now and demand a 6 - 12 month discount without much argument.
I'd watch out for Facebook - didn't they start live video recently.

[Wave Rust]

""Cable companies are lowering rates. It's not advertised but you can call them right now and demand a 6 - 12 month discount without much argument.""

exactly, virgil.

a rare occasion when the consumer has big biz's over a barrel. just threaten to have them come out and remove their wire into your house.

"it's all about the wire!"

and tell them you aint signin' no contract either.

then do the same with your cell phone and land line phone.

sprint, verizon and att hate virgin. threaten to use virgin for phone and internet.

remember, that you will be talking to some poor slob at a call center, and that guy doesn't want to answer for why they couldn't "save" your account.
the call centers have a whole list of offers to give you, just to keep that wire into your house.

wave rust

[Mamma Boom Boom]

This coming market correction will start on purely technical conditions. But, will evolve into the realization that we are only in the beginning stages of the largest financial collapse in the history of the world. Larger than the Tulip Bubble, larger than The Great Depression, and at least as large as The South Sea Bubble, of which the aftermath lasted 40 years.

The reason is because of the immense amount of fraud at the highest levels of government and with well connected business men. Never have these conditions existed in developed economies, only banana republics. And making the situation worse is the puzzling apathy of the citizenry.

The bottom line is: the bottom of this hole is a long way down. You heard it here, first.

Happy trading!

Neo-Mamma

[Jonathan]

How do you know?

[Mamma Boom Boom]

Does gold bounce here, or does it keep sliding?

Me-No-No

[yelnick]

Virgil, MLB allows online access. and DirecTv allows its NFL package to be viewed on PCs away from home (or in home). Allows me to see Raiders games when the game is blacked out on broadcast TV. It is not that hard to envision an ESPN online sports package, is it? When the audience is large enough, this will happen. Hulu allows remote viewing of TV shows but blocks it via connected TVs. How long will that hold? If Google gets some sort of deal done with Hollywood, they could bid for online NFL rights.

[yelnick]

wave, one bet already paid off - Widevine got bought by Google. This is not your father's interactive TV.

[yelnick]

wave, harbaugh to denver makes the donkeys interesting again. I would take Tebow over Luck due to entertainment value.

[trendlines]

Hang Seng Index: Breaks Shoulder Line

Last post on the HSI warned of a possible Head & Shoulders pattern. After a false breakdown, HSI broke above the "shoulder" line in the last session on decent volume. This negates the H&S as explained in the previous post (same applies to STI), and sets up short-term bullish possibilities. However, in the very short-term, stiff resistance exists at 23900, and expect a pullback anytime to test the breakout. A break above this level may re-test recent rally highs.

In the medium-term, am looking for HSI to stay in range (no new rally highs), due to a correlation factor with US indices. I will explain this better in the next few posts.

Meanwhile, SSEC is testing downtrendline resistance, after successfully bouncing above 2700. Will be posting an update within the next few days.

NEW YEAR QUESTION: Why did we bounce on the HSI?

While the fundamental folks are busy coming up with "explanations" for the recent bounce (Chinese factory numbers, commodity prices, ben bernanke's haircut, solar flares, etc etc), here's the real reason for the bounce. Have a look at the weekly HSI chart:

Price simply hit the Uptrendline! Watch that line my friends ;)

http://trendlines618.blogspot.com/2011/01/hang-seng-index-breaks-downtrendline.html

[Virgil]

Yelnick, good points. I also forgot that CBS has live streaming NCAA tournament games so I guess they're getting close. But NBC owns Hulu and it's not hard to imagine Comcast putting a stranglehold on content to squeeze out competition & make sure their TV business survives.

BTW Denninger had a write-up recently about Netflix's prospects:

http://market-ticker.org/akcs-www?singlepost=2226192

Gold is sitting at neckline support

[yelnick]

Virgil, this market will not reverse without a fight. I expect a week or so of a plateau, marking a turn for next week (12th?).

[Hockthefarm]

Internet TV:

For me it is about the opportunity to choose. Pick the sports I want, local news plus a few documentaries and movies. Just to prevent the god head stations from entering the house would be worth quite a premium.

I'd be willing to pay double to get what Y envisions here: complete control over what you pay for.

Hock

[Michael]

ANR, CLF, and WLT continue to surge.
Australia underwater and met-coal stocks continue to ramp.
The shorts are getting killed AGAIN!!!

Wash, Rinse, Repeat.
Wash, Rinse, Repeat.

LOL!

[Jacques DeMolay]

Looks like today's solar eclipse took out the precious metals/commodities and the Russell 2000. The young pup Saros 1(51) born on August 14, 1776 and making another appearance today 13 Saros cycles later. It appears there was another solar eclipse on July 15,1776,from the now since extinct Saros 113 series which means July August 1776 featured the rare two partial solar eclipses surrounding a lunar eclipse (most likely a total lunar eclipse). Previously, going back to 1900, I had only found one instance, July 2000 with another one approaching in June/July 2011.......Gold ended up resting on its 50 day average. A drop below will be the sign.....Now time to wait for 3 Kings Day.

[Mamma Boom Boom]

Interesting chart from multpl.com.

http://content.screencast.com/users/MammaB/folders/Default/media/8758c771-2c85-487c-8859-59eb20b01096/sp500.jpg

[Roger D.]

The long extension in AZO has led to a rout starting from the high at 276. The last time I saw a chart like that was in 1990 in the Dow Trans avg. Crashed from the get go. Other bear candidates,CAT,KO,MCD,MMM. there are a handful of financials and Dow stocks finishing up here,but when they do it's going to be a slippery slope indeed.

Roger D.

[Hockthefarm]

Throw Mamma from the train!

Interesting chart from multpl.com.

Great chart, thanks for posting. What would be really interesting would be to recalculate P/E ratios using a consistent earnings methodology from 1940 onward. As a minimum, I'm hockthefarm certain that today's ratios would not be any lower than shown. One of the great uncertainties courtesy of bad government.

Hock

[Hockthefarm]

A pretty good one from James Montier in Mauldin's outside the box:

http://www.safehaven.com/article/19534/in-defense-of-the-old-always

Hock

[Viper]

Internet domain investors have been on a MAD SCRAMBLE the past couple of months, buying up every conceivable .TV domain extension in sight.

All signs point to web-media-tv-movie-whatever taking off like a rocket in 2011.

[Hockthefarm]

Interesting talk on bonds:

http://online.barrons.com/article/SB50001424052970203793504576060093853662186.html?mod=BOL_hpp_dc

H

[Virgil]

Nope. They just covered the H & S on the financial channels. Kiss of death. Might as well have gotten a tip from the shoeshine boy. Doubtful it confirms.

[Roger D.]

AZO weekly, get ready for the supercycle "A" down. There are so many others,IBM,MCD,AMZN,CAT,AAPL,KO to name a few with iregular supercycle highs. AZO was the first one to crack,the others will be right behind it.

disclaimer: short AZO from 275-276

Roger D.

http://content.screencast.com/users/ETFtrader/folders/Default/media/e0086215-af56-4304-8cb1-3371e556427f/2010-12-31_2125.png

http://www.screencast.com/users/ETFtrader/folders/Default/media/540bf46f-ba45-4f7e-90e1-fbf151a85524

[OracleLurker]

Interesting chart from multpl.com.

http://content.screencast.com/users/MammaB/folders/Default/media/8758c771-2c85-487c-8859-59eb20b01096/sp500.jpg

Posted by: Mamma Boom Boom | Tuesday, January 04, 2011 at 02:14 PM

The prior peak multiple developed by John Hussman is probably a more consistent measure of valuation over longer time frames. DecisionPoint.com tracks it and it is similar in form to this multiple chart but according to that one we are closer to fair value - the midpoint of the long term range.

But anyway you slice it valuations are ridiculously higher they they were at any time during the early stages of past secular bull markets. If you count '75 as the start of a secular bull market - well it took approximately 11 years for the prior peak multiple to rise as much as it has risen in just the first two years of this bull market! It's hard to imagine that this third wave could really extend much further then 1330 or so and that the 5 could really go gangbusters either - it just seems like valuations would have to break a cycle that has been recorded for over a century now for this to turn into a secular bull market.

[yelnick]

Oracle, your argument - hard to see how valuations & PEs go any more whacko, so how can this be the start of a wave 3? - is spot on.

Taking Tony Caldaro's count at face value, we would need a wave 2 of 3 correction about now. His wave 1 of 3 has gone from SP1011 to Sp1276 or 265 pts. A 50-62% correction drops us 133 - 165 pts, or to 1111 - 1144. The financial press would call it a 10% type of correction, vindicating Hochberg's top call.

From these levels - let's use 1125, in the middle - the wave 3 of 3 would be expected to at least go the same as 1 and likely extends to 1.6x of 1, putting it up to 1390 or even to 1550. Nice rally!