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Google, Apple, Intel Can't Break TV's Bundles

Discussion in 'Off-Topic Discussion' started by CatfishRivers, Jun 12, 2012.

  1. CatfishRivers

    CatfishRivers Well-Known Member

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    Apple's TV problem (everyone else's, too) - CBS News (click for full article)

    From the article: "making inroads into the TV business will be difficult because there's a lot of money in the status quo.


    Everyone wants in


    That's exactly what Intel (INTC) is finding. Although the company wants to get into the virtual TV business, the media content companies don't want to play ball. That's because Intel, like Apple or Google (GOOG), must offer something to consumers that they can't get any other way.


    The trick is in what they must make available. Apps? Nice, but not a big reason to drop the equipment and carrier you have for something else. What all the would-be powerhouses must do is negotiate the right to make things more convenient for consumers. Another way of putting that is an end to bundling programs so people order only what they want.


    However, there is one little problem. The content producers and distributors have made a lot of money by bundling programming, as Peter Kafka at AllThingsD points out:


    Disney, for instance, charges TV distributors about $5 for every subscriber that gets ESPN. And, by some estimates, only about 25 percent of cable customers actually watch ESPN on a regular basis. So if you unbundled ESPN, the per-subscriber cost might shoot up to $20 or more, to account for the 75 percent drop in its customer base.


    This is the equivalent of the music album, where if you bought a record for a song or two that you really wanted, you might effectively pay $6 or $7 for each. Compare that to being able to download a tune for 99 cents and get only what you wanted."
     
    Last edited: Jun 12, 2012
  2. CatfishRivers

    CatfishRivers Well-Known Member

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    Intel Can't Break TV's Bundles - Peter Kafka - Media - AllThingsD (click for full article)

    "Lots of people who want to disrupt TV are counting on "over the top" services, which would deliver TV over the Web instead of via traditional cable pipes. But Intel's struggles show just how difficult that will be.


    A Reuters report says Intel is promising programmers some cool new tech, including facial-recognition technology, that will make it easier for networks and advertisers to see exactly who's watching their stuff.


    This might creep the bejesus out of normal folks, who don't like the idea of their TV watching them. But Intel thinks it will make it easier to get the content it wants for less, because targeted ads could be so much more valuable than the spray-and-pray model the industry uses today.


    The real problem: None of the content guys have shown any interest in giving Intel their stuff at a discount. More important: None of them have any interest in breaking their programming bundles, which force consumers to pay for lots of shows/networks they don't want, in exchange for access to the stuff they do want.


    Those bundles are core to today's TV ecosystem. And the TV guys insist that consumers really don't want "a la carte" programming, because if they do, the channels/shows they like today will end up costing much, much more."
     
    Last edited: Jun 12, 2012
  3. zen2go

    zen2go New Member

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    TV guys don't like to admit that consumers demand a la carte because they don't want all the other crap that comes bundled with the few channels they really watch.

    Sooner or later the Internet will render TV guys' 1980's business model obsolete. Content owners should also re-evaluate their current relationship with TV guys and make adjustments.

    Consumers are becoming more mobile. Content streaming to laptops and tablets etc. will be the norm. Many households have already cut the cable, and this trend will only rise in the foreseeable future. Resistance is futile - and shortsighted.
     
  4. bidger

    bidger Member

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    Where exactly in posts CR provided do you see any evidence that is on the horizon? The print and music industry proved to be sitting ducks for High Speed Internet. The articles show no such vulnerability for TV. The companies that are looking make inroads are far from "Mom 'n Pop Shops" and they're finding it tough going. If you have solid evidence to the contrary, please provide.
     
  5. ChrisG8

    ChrisG8 Well-Known Member

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    I am cord cutter, using a bunch of different boxes to avoid the monthly cable bill. Anybody that sees the hoops I jump through to accomplish that goal isn't impressed and would rather stick with a pay TV service. Google TV sure isn't ready for the average cable user to move to and be happy, it is too much work. Apple TV and Roku are selling much better but still not very well and I think the same as Google TV most often are supplemental to cable or satellite TV regardless of the smart TV platform being used.

    If somebody could be happy with an antenna on the roof and Netflix or Amazon Prime Instant Video, that works easily enough but that combination is a pretty lame replacement for a good cable or satellite TV package.
     
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  6. bidger

    bidger Member

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    I appreciate the honesty Chris. It seems too often that cord cutters paint the process as "nirvana" and maybe for some it truly is, but as someone who does truly love what pay TV can offer and who tried doing without before it was "cool", it's not all it's cracked up to be, in my experience. If it's truly a matter of monetary necessity then, yeah, I can relate. I have an outdoor antenna installed for when that can arise. Unfortunately, not all the networks are available in HD. I need either DirecTV or TWC for FOX or CBS, DISH doesn't currently offer HD locals. I called Netflix about suspending streaming through the Summer, but apparently you can only suspend if you're doing physical discs, so they canceled. I have to say my usage has dropped significantly, so no big loss. The idea of paying Amazon $80 upfront for a year doesn't appeal. I know in the long run it's cheaper than Netflix, but $80 would put a dent in my monthly expenses.

    I'm coming to the end of a one year promo for adding digital TV and HD to my TWC Internet and on Mon. I got a mailing from TWC that it would auto renew for another year. I have a low cost monthly HD TiVo, one of the few perks of retail, with expanded storage, Cable Card and tuning adapter, so I'm staying put. Plus my DirecTV account is set to resume in late August, so I'll see what offer they provide when I call to cancel.

    I personally have no interest in watching TV on a 4" screen. And the idea that pay TV is a barren wasteland is ridiculous. There's always been waste, but there's also gems. I wouldn't miss Season 5 of "Breaking Bad" on AMC starting 7/15 for anything.
     
  7. zen2go

    zen2go New Member

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    For our family cable TV is just not a good value. We watch maybe 5% of it, so paying for the other 95% makes no economic sense. My wife gets all her favorite shows online anyway and watches them on her iPad or laptop wherever she likes. If she wants to watch something on a big screen she simply connects to it using an HDMI cable.

    I get my sports fix on ESPN3, which has many more events than what I used to get on cable anyway. I don't have statistics on current cable subscriptions, but I doubt the number is growing like it used to back in the late 20th century. I do know, however, many friends who have ditched cable TV for reasons similar to mine, and they all report having more time now to do other things.

    Your mileage may vary.
     
  8. Carlszone

    Carlszone Well-Known Member

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    Hi

    I loved my cable! If someone had suggested a year ago that I'd not be the same happy customer by Jan. '12, I would have laughed at em. But in Dec I added a premium combo. On my birthday I was charged a $5.00 late fee. When I asked why, I was told that because I ordered a new service 1 day before my billing date, the payment for the added service was considered late. I asked them if this was a wise trade-off. Would you rather have my $165 dollars or lose it to a $5.00. fee.

    Well, here I am enjoying NOT paying their exorbitant fees, and I'm still alive! Every time I get an offer in the mail for 'Free 1st Month/3 free months Premium channels, I just look at my last bill and see the date, wish myself a belated happy birthday and move on.

    With the web, when I upgrade a service they leave me alone to enjoy it. W/cable I had everything and they just wouldn't leave me alone. They used my phone service w/them to offer me promotions some of which I already had! And when I finally got fed up they charged me $40.00 to disconnect the service.

    Best $40.00 I ever spent...

    Carl
     
  9. zen2go

    zen2go New Member

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    http://gigaom.com/video/cord-cutters-q2-2011/

    As seen in the chart below, public pay-TV providers collectively shed 193,000 subscribers in the most recent quarter. While losses by cable providers are nothing new, they are usually offset by stronger growth in satellite and IPTV providers picking up the slack. That didn’t happen this quarter, as somewhat weak growth by IPTV providers and a big loss at Dish highlighted what seems to be an exodus of pay TV subscribers amidst a weak economy...
     
  10. Carlszone

    Carlszone Well-Known Member

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    Yes, Zen

    And don't forget, there is another trick to the game that might explain the lack of customer loyalty incentives. Whereas the subscriber of a few years ago was rewarded for continued service w/a cable company w/free video on demand movies and discounts, the opposite seems to be the norm. Now a new customer is offered free services, modems and free or discounted Premium channels on the backs of the tried & true loyal subscribers.

    So, one way the companies had of legally cooking their books was to boast how many new subscribers they attracted during a specific quarter. But what they failed to show was that these were customers that were lured back w/even steeper discounts and free services. Meanwhile the fees were steadily rising for long term subscribers.

    Really, what incentive is there to stick w/a service that offered ya 2 months free only to find out a year later that they are now offering 3 months free and 3 months free premium channels to new subscribers. Guess who's paying for it???

    Carl
     
    Last edited: Jun 20, 2012
  11. zen2go

    zen2go New Member

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    Good points, Carl. I've often wondered how much churn there is in the Pay TV business, as providers constantly try to lure customers away from competitors by offering discounts and other bargains. In the end, loyal customers are the ones left holding the bag. This model is not sustainable, IMO.

    Pay TV is not going away, but it will have to adapt and change in order to survive. Below is an analysis I found that also has some interesting data and charts:

    http://m.readwriteweb.com/archives/cable_tvs_erosion_is_real_its_just_very_slow.php


    Cable is indeed losing subscribers, but it's happening very slowly. According to the latest data from Nielsen, the number of U.S. homes with cable subscriptions has declined 4.1% in the last year. Meanwhile, TV service provided by telephone companies like Verizon increased 21.1%.

    So, it's not that traditional, non-Web television service in general is going down. Cable subscription rates are dropping slowly, while satellite and other pay TV services are on the rise. Web TV may not be exploding in the way that many might have expected, but it is on the rise.

    Nielsen reports considerable growth in the sector of consumers who watch a combination of Web-based and non-cable broadcast television. This is the crowd that Boxee hopes to target with its live TV antennae dongle. They watch half as much TV and stream twice as much online video as the general population...
     
  12. ChrisG8

    ChrisG8 Well-Known Member

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    The cable subscriber losses may be nothing more than a result of a poor economy, out of a job for a year or two and certain things have to go. I would expect eventually cable will lose significant marketshare to internet streaming services but so far, I don't think it has happened.
     
  13. Carlszone

    Carlszone Well-Known Member

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    Hi Chris

    You present an interesting perspective. But in a way you make the point of many who believe that cable IS significantly on the decline. Economic constraints achieve far more in curtailing the subscriber base of cable than the development of more choices among less traditional methods of accessing entertainment. Once loyal customers find they can no longer afford cable, they will inevitably turn to the internet. A Broadband connection w/the same company is a lot more affordable then the cheapest cable lineup.

    Once, as I'm experiencing, users realize they can actually survive w/out cable TV & get used to a new world of free and/or cheap entertainment and realize how much money they have left over each month...well, the chances that they will return to cable is iffy. But I know if I ever go back, I'll never go full service again. I will choose the basic lineup and use services like Netflix, Amazon and Youtube in place of Premium channels. And I might even resist their free offers keeping me free of the 2 year minimal service contract.

    But that's just me...

    Carl
     
  14. zen2go

    zen2go New Member

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    The economy is doing many people a favor by showing them how pay TV is not that essential to their quality of life. When the economy recovers, it will be interesting to see how many cord cutters go back. I know I won't.

    Instead of paying for Golf Channel, which was the only channel I regularly watched, we now spend money on golf lessons for our young son. Being on the driving range with him is much more rewarding than sitting at home watching the pros (and not so pros).
     
  15. CatfishRivers

    CatfishRivers Well-Known Member

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    I don't think Comcast is feeling any "pinch" or worrying much at the moment. Let's take a look at their stock. It's sitting right near a 52 week high at $30.83 (as of the close of trading on June 22nd). The 52 week high is $31.65 and the 52 week low is $19.19.

    Comcast Corporation: NASDAQ:CMCSA quotes & news - Google Finance

    Netflix (that many consider to be the big cord-cutter alternative) however is very near a 52 week low. Netflix stock closed at $67.86 on June 22nd. The 52 week high for Netfix is $304.79 and the 52 week low is $60.70.

    Netflix, Inc.: NASDAQ:NFLX quotes & news - Google Finance
     
    Last edited: Jun 23, 2012
  16. zen2go

    zen2go New Member

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    http://mobile.bloomberg.com/news/2012-06-27/netflix-wants-help-from-u-s-against-cable-data-caps.html

    The hearing is “the opening shot in a 2013 congressional battle that could reshape the pay TV landscape” as lawmakers look to recast old rules, Paul Gallant, a Washington-based analyst with Guggenheim Securities, said in a note to investors today.

    Republicans said they want to trim regulations, and members of the Democratic minority said new rules may be needed to protect nascent companies.

    “The creative chaos in the marketplace is healthy as parties fight to out-innovate each other and win viewers,” said Representative Greg Walden, the Oregon Republican who is chairman of the panel. “The last thing we want is to shackle everyone’s entrepreneurial spirit with one-size-fits-all rules.”

    Representative Henry Waxman, of California, the top Democrat on the Energy and Commerce Committee that houses the subcommittee, said Congress needs to ensure video innovation can continue to flourish.
     
  17. zen2go

    zen2go New Member

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    http://www.pcworld.com/businesscent...solve_fcc_standalone_broadband_complaint.html

    Comcast will pay US$800,000 and agree to a yearlong extension of a requirement to provide inexpensive stand-alone broadband service after a U.S. Federal Communications Commission investigation into the company's compliance with conditions on its 2011 merger with NBCUniversal.

    Comcast was not adequately marketing its stand-alone broadband services as required in the FCC merger conditions, the FCC said. The FCC's Enforcement Bureau, in a consent decree announced Wednesday, requires Comcast to continue to offer its Performance Starter service until Feb. 21, 2015, and make the $800,000 payment to the U.S. Treasury, the FCC said in a press release.
     

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