This would be problematic for league networks--especially B1G

[rrlbees]

(Sorry for length in advance). I have spoken to many cable industry executives about this issue and they KNOW that this is coming one way or another. They have been very fearful of this until relatively recently. In private they will admit that bundling allows them to generate more ARPU - average revenue per user. They will also admit that they are only able to do this because they essentially operate monopolies. Adding a couple of channels every year justified price increases that have been 3 to 5 % above inflation for basic cable since the 80's. The argument that bundling increases the consumer choice held water for a while, but it is rapidly breaking down and the cable companies are quietly preparing for the shift in the business model - though their strategy is unlikely to save them from losing their monopoly level profit margins.

The telecom/cable lobby is very aggressive and powerful and McCain's bill is in fact likely to go close to nowhere despite the fact that most voters would happily embrace it. But it won't matter. It won't matter because internet enabled TVs, along with people in their 20's and 30's who have already cut the cord on cable, will push the major content players - those with programming that people will pay up for (sports, movies, special interest channels with big audiences) - to shift their content on to the internet and completely bypass the traditional broadcast/cable model. Revenues will come from subscription and/or pay per view type of structure,a long with traditional and interactive advertising. Why let the cable company control when were and how your content is delivered and why let them have access to advertising time during your premium programming?? The range of content you can provide is so much greater, as is the ability to directly target prime consumers in a very very personal way if you are and advertiser - these companies are really only scratching the surface on this stuff now. But the point is it is the content providers who will drive the push to a-la-carte, and a-la-carte will eventually give way to direct provisioning of programming via the internet. This is not 20 years away, it's more like 5.

The cable companies are responding in a number of ways - first, comcast essentially paid off verizon via a co-selling deal with verizon wireless to get them to stop the expansion of fios. At&t has stopped its rollout of Uverse as well and Uverse was never really a competetive product. So - they have a monopoly on the 'pipe into the home' and play to raise prices on top tier data services to well above $100 which will allow them to maintain their ARPU even without the bundles. The other thing they are doing is buying content companies because they understand that content is going to be higher margin than just owning the pipe over the long-term.

That will work for a while, but eventually the cable industry will decline into a commodity business. Google fore example is launching 1GBPS internet in Kansas City and then is going to bring it to Austin Texas. The new wireless standard promises nearly 1GBPS as well and that will be rolling out in a few years around the country. Google could care less about earning a decent return on their network investments in these cities - they care about shifting content to the internet and branding/advertising via google software as the system of interacting with that content (eg - they make a killing off of their android software which they distribute for free to the mobile phone manufacturers). On the wireless side, the price of hanging equipment on a tower vs the price of burying a network that goes in to every single building is not even close. They will price Time warner into oblivion. Meanwhile Time warner gives you 30 mbps with their premium package. Compeition will force them to deliver a better product, better service, at prices that allow them to earn minimal profits.

content is king. the ACC network will have a huge advantage if it is built for digital right from the start. Exciting times ahead.

Thank you. Monopoly is hitting the nail on the head.

Sent using my Commodore 64

 

[Moontan]

Why let the cable company control when were and how your content is delivered and why let them have access to advertising time during your premium programming??

It costs money to set up and maintain a server farm to distribute programming. Not many content creators are capable of doing this not want to get in that business. There could be other/new aggregators that can do this. How will the new aggregators do vs. the current aggregators?

But the point is it is the content providers who will drive the push to a-la-carte, and a-la-carte will eventually give way to direct provisioning of programming via the internet. This is not 20 years away, it's more like 5.

Possibly.
Imagine a household of four, each wanting to watch their own HD content while recording another program or two. Unless you're OK with compressed video, this won't work.

The cable companies are responding in a number of ways - first, comcast essentially paid off verizon via a co-selling deal with verizon wireless to get them to stop the expansion of fios.

While Comcast and Verizon could have some agreements, there are plenty of areas in the country where there is no service overlap. Do you really expect Verizon to lay down against Time Warner, Cox or Charter because they allegedly have an agreement with Comcast?

At&t has stopped its rollout of Uverse as well and Uverse was never really a competetive product.

I guess I should tell the local (re-)sellers to stop selling the service.

Google fore example is launching 1GBPS internet in Kansas City and then is going to bring it to Austin Texas. The new wireless standard promises nearly 1GBPS as well and that will be rolling out in a few years around the country.

1Gbps demos are nice. I doubt it become a reality in much of America in your previously mentioned 5-year window. 100Mbps would be giant leap for most.

It's much more likely that other utilities (gas, electric) will provide 100Mbps access.

They will price Time warner into oblivion. Meanwhile Time warner gives you 30 mbps with their premium package. Compeition will force them to deliver a better product, better service, at prices that allow them to earn minimal profits.

Competition is usually good. The major SPs will respond appropriately. Time Warner will survive

 

[SUinNYC]

(Sorry for length in advance). I have spoken to many cable industry executives about this issue and they KNOW that this is coming one way or another. They have been very fearful of this until relatively recently. In private they will admit that bundling allows them to generate more ARPU - average revenue per user. They will also admit that they are only able to do this because they essentially operate monopolies. Adding a couple of channels every year justified price increases that have been 3 to 5 % above inflation for basic cable since the 80's. The argument that bundling increases the consumer choice held water for a while, but it is rapidly breaking down and the cable companies are quietly preparing for the shift in the business model - though their strategy is unlikely to save them from losing their monopoly level profit margins.

ACC network will have a huge advantage if it is built for digital right from the start. Exciting times ahead.

Thanks for your insights. Informative post.

 

[Toga]

The monopolies (and resulting lack of competition) that have dominated the landscape appear to be coming to at least close to an end. This might all shake itself out on its own. Maybe.

No one said you had to... Just cancel cable - or whatever service you're subscribing to.

But since you have cable (or a satellite provider) you've already AGREED to buy the package(s) that they are offering.

No one said to had to buy the super-duper triple platinum pack with 950+ channels. You can keep it pretty basic if you so desire.

If you don't want the package as is, buy a different package or find a cheaper provider.

Sometimes I only want two hotdogs while at the grocery, but they're sold in 8-packs... Should I have my congressman contact the major grocery chains so that I can purchase the exact number of hot dogs I desire?

I don't need half the bells and whistles on my mobile phone, but I can't force them to make a cheaper version because I don't want/need a camera that shoots HD video. I simply find a phone that comes with the features I desire for a price I'm willing to pay.

Forcing the system to change via legislation won't make things better for the greater majority of television viewers... The system will adapt when it must do so in order to compete.

 

[rrlbees]

The theory goes that cable companies charge you for the channels you watch. the other 300 are thrown in for free (basically). If this bill passes, you'll still pay what you pay now, they'll just drop the other 300 channels that you hardly ever watch.

I like a la carte in theory, but in practice, it may not be so good.

That's not necessarily true. At least once a year they add channels I don't want and my bill goes up.

Sent using my Commodore 64

 

[cuseinchina]

It costs money to set up and maintain a server farm to distribute programming. Not many content creators are capable of doing this not want to get in that business. There could be other/new aggregators that can do this. How will the new aggregators do vs. the current aggregators?


Possibly.
Imagine a household of four, each wanting to watch their own HD content while recording another program or two. Unless you're OK with compressed video, this won't work.


While Comcast and Verizon could have some agreements, there are plenty of areas in the country where there is no service overlap. Do you really expect Verizon to lay down against Time Warner, Cox or Charter because they allegedly have an agreement with Comcast?


I guess I should tell the local (re-)sellers to stop selling the service.


1Gbps demos are nice. I doubt it become a reality in much of America in your previously mentioned 5-year window. 100Mbps would be giant leap for most.

It's much more likely that other utilities (gas, electric) will provide 100Mbps access.



Competition is usually good. The major SPs will respond appropriately. Time Warner will survive

I don't have it in me to respond to all of this in depth (aka the wife is less of a fan of syracusefan.com at 10:45 pm then I am). But just let me re-iterate that this is not something I've just come up with doing a bit of reading - I talk with cable industry execs as part of my job and this is the medium term future as they see it and is what they are planning for and basing their strategy on. Strategy no. 1 is of course to maintain the status quo for as long as possible because the status quo is very very good for the cable companies - which is why this bill will go nowhere fast. But they know that this strategy is not viable within the corporate lifespan of the current ceos of these companies.

On the google 1 gpbs 'demo' - Austin texas is no demo - it's a smaller city but the population of young people there are very much like those in Brooklyn or San Fran and so the word of mouth factor is going to be huge. not to mention the fact that they plan to roll out to a large west coast city soon after. But remember - google doesn't need to provide 1gbps in every market it just needs to do it in a few and then force the incumbent cable provider to do the same. Once the incumbent does this in a few markets, the public, the fcc, and the threat of competitive entry into more of their markets will force them to do it around the country -- they essentially obstruct bandwidth to prevent the migration of content from their video system to the intenet - increased competition forces them to just be the best pipe going at the lowest cost and when bandwidth jumps by multiples of 10, 20 50x - the content migration is a forgone conclusion. Google doesn't want to be an ISP - they just want to be the android of online media content. But really with internet enabled TV all you need are the content providers (who the cable co's rely on) to demand faster speeds for their add on content and you'll still wind up in the same place - enough bandwidth to shift content. It doesn't matter how you get there -just that the technology ramping now demands that you do in fact get there.

As for the verizon / comcast deal it is not some hypothetical it is a fact and was approved by the FCC despite the protests of consumer groups and fios lovers everywhere. Both comcast and time warner are selling their spectrum to verizon - this is an industry detante to preserve margins in the wireless business and the broadband business respectively - they agree to sell each others products at a monopoly price point. This is part of strategy number 1 above which they all know has a limited shelf life.

and yeah the cable industry will survive as a commoditized utility type business with no pricing power - but good content will thrive - and that is really my point that the ACC network has a big advantage in approaching this thing with an eye to 5 or even 10 years down the road when this is reality.

 

[Toga]

Yeah that Verizon deal was bullshit.

I don't have it in me to respond to all of this in depth (aka the wife is less of a fan of syracusefan.com at 10:45 pm then I am). But just let me re-iterate that this is not something I've just come up with doing a bit of reading - I talk with cable industry execs as part of my job and this is the medium term future as they see it and is what they are planning for and basing their strategy on. Strategy no. 1 is of course to maintain the status quo for as long as possible because the status quo is very very good for the cable companies - which is why this bill will go nowhere fast. But they know that this strategy is not viable within the corporate lifespan of the current ceos of these companies.

On the google 1 gpbs 'demo' - Austin texas is no demo - it's a smaller city but the population of young people there are very much like those in Brooklyn or San Fran and so the word of mouth factor is going to be huge. not to mention the fact that they plan to roll out to a large west coast city soon after. But remember - google doesn't need to provide 1gbps in every market it just needs to do it in a few and then force the incumbent cable provider to do the same. Once the incumbent does this in a few markets, the public, the fcc, and the threat of competitive entry into more of their markets will force them to do it around the country -- they essentially obstruct bandwidth to prevent the migration of content from their video system to the intenet - increased competition forces them to just be the best pipe going at the lowest cost and when bandwidth jumps by multiples of 10, 20 50x - the content migration is a forgone conclusion. Google doesn't want to be an ISP - they just want to be the android of online media content. But really with internet enabled TV all you need are the content providers (who the cable co's rely on) to demand faster speeds for their add on content and you'll still wind up in the same place - enough bandwidth to shift content. It doesn't matter how you get there -just that the technology ramping now demands that you do in fact get there.

As for the verizon / comcast deal it is not some hypothetical it is a fact and was approved by the FCC despite the protests of consumer groups and fios lovers everywhere. Both comcast and time warner are selling their spectrum to verizon - this is an industry detante to preserve margins in the wireless business and the broadband business respectively - they agree to sell each others products at a monopoly price point. This is part of strategy number 1 above which they all know has a limited shelf life.

and yeah the cable industry will survive as a commoditized utility type business with no pricing power - but good content will thrive - and that is really my point that the ACC network has a big advantage in approaching this thing with an eye to 5 or even 10 years down the road when this is reality.

 

[TheCusian]

(Sorry for length in advance). I have spoken to many cable industry executives about this issue and they KNOW that this is coming one way or another. They have been very fearful of this until relatively recently. In private they will admit that bundling allows them to generate more ARPU - average revenue per user. They will also admit that they are only able to do this because they essentially operate monopolies. Adding a couple of channels every year justified price increases that have been 3 to 5 % above inflation for basic cable since the 80's. The argument that bundling increases the consumer choice held water for a while, but it is rapidly breaking down and the cable companies are quietly preparing for the shift in the business model - though their strategy is unlikely to save them from losing their monopoly level profit margins.

The telecom/cable lobby is very aggressive and powerful and McCain's bill is in fact likely to go close to nowhere despite the fact that most voters would happily embrace it. But it won't matter. It won't matter because internet enabled TVs, along with people in their 20's and 30's who have already cut the cord on cable, will push the major content players - those with programming that people will pay up for (sports, movies, special interest channels with big audiences) - to shift their content on to the internet and completely bypass the traditional broadcast/cable model. Revenues will come from subscription and/or pay per view type of structure,a long with traditional and interactive advertising. Why let the cable company control when were and how your content is delivered and why let them have access to advertising time during your premium programming?? The range of content you can provide is so much greater, as is the ability to directly target prime consumers in a very very personal way if you are and advertiser - these companies are really only scratching the surface on this stuff now. But the point is it is the content providers who will drive the push to a-la-carte, and a-la-carte will eventually give way to direct provisioning of programming via the internet. This is not 20 years away, it's more like 5.

The cable companies are responding in a number of ways - first, comcast essentially paid off verizon via a co-selling deal with verizon wireless to get them to stop the expansion of fios. At&t has stopped its rollout of Uverse as well and Uverse was never really a competetive product. So - they have a monopoly on the 'pipe into the home' and play to raise prices on top tier data services to well above $100 which will allow them to maintain their ARPU even without the bundles. The other thing they are doing is buying content companies because they understand that content is going to be higher margin than just owning the pipe over the long-term.

That will work for a while, but eventually the cable industry will decline into a commodity business. Google fore example is launching 1GBPS internet in Kansas City and then is going to bring it to Austin Texas. The new wireless standard promises nearly 1GBPS as well and that will be rolling out in a few years around the country. Google could care less about earning a decent return on their network investments in these cities - they care about shifting content to the internet and branding/advertising via google software as the system of interacting with that content (eg - they make a killing off of their android software which they distribute for free to the mobile phone manufacturers). On the wireless side, the price of hanging equipment on a tower vs the price of burying a network that goes in to every single building is not even close. They will price Time warner into oblivion. Meanwhile Time warner gives you 30 mbps with their premium package. Compeition will force them to deliver a better product, better service, at prices that allow them to earn minimal profits.

content is king. the ACC network will have a huge advantage if it is built for digital right from the start. Exciting times ahead.

Agreed with everything here except that Google is making a killing with Android. Samsung is making a killing on it - Google is making money the way they always have: ads.

ISP's should be terrified of the google project - it could truly disrupt everything. Aside from not trusting Google to be my ISP (selling my info to advertisers), market needs some shake up.

Along with the crappy channels we're forced to pay for - we are also forced to overpay for crappy Internet, relative to other modern countries. Change is coming.

 

[cuseinchina]

Yeah that Verizon deal was bullshit.

It was pretty blatant. Problem with the FCC is that they by and large come from and go back to the industry they regulate. I've got fios within a two blocks of me in all 4 directions - but it will never come to my place post this deal. pisses me off just thinking about it.

 

[SUinNYC]

Agreed with everything here except that Google is making a killing with Android. Samsung is making a killing on it - Google is making money the way they always have: ads.

ISP's should be terrified of the google project - it could truly disrupt everything. Aside from not trusting Google to be my ISP (selling my info to advertisers), market needs some shake up.

Along with the crappy channels we're forced to pay for - we are also forced to overpay for crappy Internet, relative to other modern countries. Change is coming.

From tomorrow's NY Times...Google? Yanking Broadband from the Slow Lane

http://www.nytimes.com/2013/05/08/b...html?partner=rss&emc=rss&smid=tw-nytimes&_r=0

 

[cuseinchina]

Agreed with everything here except that Google is making a killing with Android. Samsung is making a killing on it - Google is making money the way they always have: ads.

ISP's should be terrified of the google project - it could truly disrupt everything. Aside from not trusting Google to be my ISP (selling my info to advertisers), market needs some shake up.

Along with the crappy channels we're forced to pay for - we are also forced to overpay for crappy Internet, relative to other modern countries. Change is coming.

Good point on Android - the revenue generation was indirect - but by developing and giving away software that is becoming ubiquitous on non-apple mobile devices - they expose themselves to a tidal wave of mobile search ad revenue. Similarly I don't think google wants to replace the cable company as ISP they just want to push it into enough communities to force the increase in bandwidth which enables content to jump fro the cable co to the network - meanwhile google will run the software Samsung and LG use on their smart tvs. so the same model - just a roundabout way to get there.

 

[WickedOrange]

It costs money to set up and maintain a server farm to distribute programming. Not many content creators are capable of doing this not want to get in that business.

They don't need to start up or maintain a server farm. You go with a cloud solution. Netflix is using Amazon's Elastic Compute Cloud (EC2) and Simple Storage Service (S3). Netflix alone is over 33 percent of prime-time Internet traffic in the US.

Imagine a household of four, each wanting to watch their own HD content while recording another program or two. Unless you're OK with compressed video, this won't work.

I'm 40 and cut the cord over four years ago. My kids (5 and 3) will probably never know what traditional cable is. It will be a sad day in my household, if we are regularly consuming six concurrent video/video game streams.

I pay $55 for a broadband connection, $10 for netflix and augment with an antenna for OTA. I still have room for a la carte streaming services (I'm looking at you ACC/ESPN) and still be under $100.

Stonybrook was the only football game I had to leave the couch for, everything else, I could see from my livingroom.

I also think you're ignoring the gains being made in compression.

https://brendaneich.com/2013/05/today-i-saw-the-future/

ORBX.js, a downloadable HD codec written in JS and WebGL. The advantages are many. On the good-for-the-open-web side: no encumbered-format burden on web browsers, they are just IP-blind runtimes. Technical wins start with the ability to evolve and improve the codec over time, instead of taking ten years to specify and burn it into silicon.

After these come more wins: 25% better compression than H.264 for competitive quality, adaptive bit-rate while streaming, integer and (soon) floating point coding, better color depth, better intra-frame coding, a more parallelizable design — the list goes on.

 

[KaiserUEO]

They don't need to start up or maintain a server farm. You go with a cloud solution. Netflix is using Amazon's Elastic Compute Cloud (EC2) and Simple Storage Service (S3). Netflix alone is over 33 percent of prime-time Internet traffic in the US.



I'm 40 and cut the cord over four years ago. My kids (5 and 3) will probably never know what traditional cable is. It will be a sad day in my household, if we are regularly consuming six concurrent video/video game streams.

I pay $55 for a broadband connection, $10 for netflix and augment with an antenna for OTA. I still have room for a la carte streaming services (I'm looking at you ACC/ESPN) and still be under $100.

Stonybrook was the only football game I had to leave the couch for, everything else, I could see from my livingroom.

I also think you're ignoring the gains being made in compression.

https://brendaneich.com/2013/05/today-i-saw-the-future/

ORBX.js, a downloadable HD codec written in JS and WebGL. The advantages are many. On the good-for-the-open-web side: no encumbered-format burden on web browsers, they are just IP-blind runtimes. Technical wins start with the ability to evolve and improve the codec over time, instead of taking ten years to specify and burn it into silicon.

After these come more wins: 25% better compression than H.264 for competitive quality, adaptive bit-rate while streaming, integer and (soon) floating point coding, better color depth, better intra-frame coding, a more parallelizable design — the list goes on.

serious ?'s

does this all work in HD, on a 60" screen??

how do your kids know whats new and fresh if the only option they have is what used to be new and fresh, but is now just in a library on netflix??

does the emergency broadcast system break in with acts of god or terrorist warnings??

:noidea:

 

[orangenirvana]

This question was probably already asked in this long thread - but why the heck is Congress sticking its nose in the cable television industry? Of all the problems in the country and world that the government can focus on, John McCain thinks his time and taxpayer money should be spent on control over who has access to SpikeTV and the Disney Channel?

 

[cuseinchina]

A timely piece this morning from Bloomberg illuminates the beginnings of this shift. ABC and Disney are going to stream archived and ALL LIVE CONTENT and is working with advertisers to develop metrics and systems that allow them to measure eyeballs and thus charge for advertising - eg something that goes beyond neilson. This is being 'sold' as something that allows viewers to access content via their mobile devices, and you will need to enter in a userid and password from your cable provider (like ESPN 3) to have access. But this content is coming directly from the content provider via the internet, it completely bypasses cable's video system. And of course while they sell it as an add on for watching remotely, it will obviously run on the internet enabled TVs. Smart TV's will penetrate 40% of the US market by the end of 2015 and by that time every 'replacement' set will be internet enabled. Once you get enough people watching via the stream from the network, if you are a popular content provider, WHY would you ever want to share your profits with a able operator who is providing a commodity service at a monopoly price point?? Especially when the way in which the cable co deliver content limits the extent to which you can monetize your content in other ways using new technologies. The answer is they won't, middle man gets cut out, cable is the dumb pipe. Disney is the best media company in the world, it is very good to have these guys working with the ACC on their network we should feel lucky and be excited for what is to come with all this.

By Christopher Palmeri and Andy Fixmer
May 9 (Bloomberg) -- Walt Disney Co.’s ABC network, staking
a claim to growth in online video ads, will brief advertisers
next week on a service giving viewers live shows on mobile
phones and tablets, people with knowledge of the plan said.
Watch ABC, a first-of-its-kind application from a
broadcaster, will stream live and archived shows to pay-TV
subscribers, said the people, who sought anonymity because the
plans aren’t public. It could be released near the new TV season
in September, they said.
With online video ad sales growing faster than network TV
revenue, Disney and other programmers such as News Corp.’s Fox
are developing ways to let audiences watch away from home on
smartphones and products such as Apple Inc.’s iPad. The move
pits entertainment companies against Google Inc.’s YouTube and
Facebook Inc. for an ad market that Morgan Stanley predicts will
grow 18 percent to $2.73 billion this year.
“While the audience online is still small, it’s growing
fast and represents one of the biggest opportunities for the
media companies,” Ben Swinburne, a Morgan Stanley analyst in
New York, said in an interview.
As with Watch ESPN, the mobile TV service offered by
Burbank, California-based Disney’s sports channel, Watch ABC
represents a potential new revenue source. The network will
outline the product to advertisers in New York next week during
upfront sales presentations for the September 2013 TV season.

‘Already Talking’

“We’re already talking as it relates to ABC and the
upfronts of selling packages to advertisers that go across all
media,” Disney Chief Executive Officer Robert Iger said May 7
on a conference call.
Disney fell 0.1 percent to $65.99 yesterday in New York.
The stock has advanced 33 percent this year, second most in the
Dow Jones Industrial Average, which is up 15 percent.
Broadcast networks will receive about $9.18 billion in
advance ad commitments, a 1.2 percent increase from a year ago,
Swinburne wrote in an April 25 report. Cable programmers will
get $10.7 billion, a 6 percent gain, he wrote.
All four major broadcast networks offer some programming on
computers, tablets and smartphones. Later this year, Fox plans
to release Fox Now, an app giving pay-TV viewers expanded on-
demand access to recent shows. News Corp. is releasing similar
apps for /X, Fox Sports and NatGeo, said Mike Hopkins,
president of distribution for Fox Networks Group.
Live streaming will come later, he said in an interview.
CBS Corp.’s TV network and Comcast Corp.’s NBC have
released ad-supported apps that don’t require viewers to have a
pay-TV subscription, like an earlier version of ABC’s product.
The apps offer access to some archived programs.

Local News

ABC’s step marks the biggest effort yet by a broadcaster to
capture the nation’s 101 million pay-TV subscribers while
they’re away from the living-room set and more apt to be posting
on Facebook or watching a YouTube video.
The network’s “Modern Family” and “Grey’s Anatomy” draw
viewers that advertisers want, unlike the user-generated, low-
budget clips on YouTube, Swinburne wrote.
“Much of the YouTube inventory is not attractive for
traditional brand advertising,” he wrote.
With the Watch ABC app, a cable subscriber will be able to
view programs on the road or in a room where there’s no TV, as
long as there’s a Web connection. The service can provide
travelers access to their local ABC station from anywhere.
By limiting the service to pay TV customers, it puts mobile
access behind a paywall and protects the fees that the network’s
eight owned stations and many affiliate broadcasters collect
from services like Comcast Corp. and DirecTV.

Live Feed

Last June, Disney released Watch Disney Channel, which lets
pay TV viewers with a mobile device see a live feed of the cable
network and archived shows. Disney Channel applications,
including ones for Disney XD and Disney Junior, have been
downloaded more than 13 million times, according to the company.
The existing ABC Player, introduced in 2010, has been downloaded
about 10 million times. Unlike the new product, it doesn’t offer
live TV or as extensive library access.
One challenge facing all of the programmers, cable and
broadcast, is measuring online audiences and demonstrating to
marketers that they are reaching the viewers they expect.
Currently the ratings distributor Nielsen only counts
online audiences for a show when it’s seen within three days of
its original airdate and only when the commercials are the same.
That excludes later viewing on digital video recorders, on
a TV network’s website or on Hulu.com, the ad-supported site
owned by Disney, News Corp. and Comcast’s NBC Universal.
In next week’s meetings with advertisers, Disney will
outline plans to use Nielsen’s online campaign ratings, a system
for counting Internet audiences, Swinburne said.
“The key is to get a measurement system in place that
allows us to monetize, because I’m convinced there’s a lot of
consumption going on there,” Iger said on the call.

 

[Millhouse]

quick and dirty bundling

Mr Millhouse loves ESPN but watches Bravo occasionally for milfs in hot tubs. Mrs Millhouse loves Bravo but occasionally watches gymnastics.

Ala carte world, Bravo is better off with only Mrs Millhouse paying what she thinks bravo is worth.

Same for espn

Here a bundle gives Mr Millhouse and Mrs Millhouse programming worth more than what they paid for it and the cable company makes more.

Win win.

Simple example but the principle is the same with hundreds of channels and millions of customers, it's just the math is way harder.

Worth
Mr Millhouse ESPN $10
Mr Millhouse Bravo $4
Mrs Millhouse ESPN $3
Mrs Millhouse Bravo $10

Bundle cost $12
Cable makes $24.
Mr Millhouse gets $14 for $12
Mrs Millhouse gets $13 for $12

Ala carte
Both channels cost $10.
Mr Millhouse gets espn worth $10 to him for $10
Mrs Millhouse gets bravo worth $10 to her for $10. No surplus
Cable makes $20

forcing ala carte destroys value. viewers lose $3 of value to them, cable loses $4 of revenue

Bundle is best option for everyone

 

[thorpedo]

Come on now Heater...ESPNU, CW, FOX, FOXSPORTS, SPIKE, FX, A&E, HISTORY, WE. These channels are almost must haves for many people. And some channels will only be available in packages. They'll figure out a way to comp0ly with this regulation and still make money. It'll be a good thing for some people, won't affect others.

No OWN or BET or MTV? You may have forgotten history 2, military channel, military history (Verizon) and NFL Network

 

[Lou_C]

There is no way my house watches more than 20 channels in month:

NBC, CBS, ABC, ESPN, ESPN2, TWC Sports, USA, Discovery, MSG, SNY, TNT, TBS, NICK, CARTOON, GOLF, TRU TV, CNN, DISNEY

$18.00, I'll take it.

You are so not paying $18 for that lineup. Those are some of the most popular channels there are. My guess is that bill would be $90 or more in an a la carte system. Maybe that saves you a couple dollars, I don't know what you pay.

A la carte is bad for someone like you, who watches several popular channels, but will no longer have other people sharing the load.

A la carte is bad for someone who watches more niche networks like Lifetime Movie Channel, Game Show Network, VH1 Classic, etc, because not enough people will by them a la carte for them to exist anymore, without the popular channels subsidizing them.

A la carte is good ONLY for folks who want just one or maybe two very popular channels for their whole family and that's it. You might be able to get the ESPN Networks for $30 and CNN for $15 and cut your cable bill from $100 to $45.

For everyone else, it's going to suck. Once people see what the a la carte world looks like, they aren't going to want it. Even if this passes, once people are given the "option" and start seeing how much they'll pay to get 10 or 20 channels, they will reject it.

Yes, the system is collectivist, but you aren't forced to have cable. But if you do buy cable, this current method (maybe with some tweaks) serves the most people.

 

[Lou_C]

A timely piece this morning from Bloomberg illuminates the beginnings of this shift. ABC and Disney are going to stream archived and ALL LIVE CONTENT and is working with advertisers to develop metrics and systems that allow them to measure eyeballs and thus charge for advertising - eg something that goes beyond neilson. This is being 'sold' as something that allows viewers to access content via their mobile devices, and you will need to enter in a userid and password from your cable provider (like ESPN 3) to have access. But this content is coming directly from the content provider via the internet, it completely bypasses cable's video system. And of course while they sell it as an add on for watching remotely, it will obviously run on the internet enabled TVs. Smart TV's will penetrate 40% of the US market by the end of 2015 and by that time every 'replacement' set will be internet enabled. Once you get enough people watching via the stream from the network, if you are a popular content provider, WHY would you ever want to share your profits with a able operator who is providing a commodity service at a monopoly price point?? Especially when the way in which the cable co deliver content limits the extent to which you can monetize your content in other ways using new technologies. The answer is they won't, middle man gets cut out, cable is the dumb pipe. Disney is the best media company in the world, it is very good to have these guys working with the ACC on their network we should feel lucky and be excited for what is to come with all this.

Agree, ESPN, all popular channels, even the BTN, are all prepared for the new reality. ESPN has been built out for years with ESPN3 and now WatchESPN. The content providers will get paid. Instead of the BTN getting $1 from every house in their footprint, they'll get $7 from 10% of the people in their footprint to stream it, plus $7 for every hardcore Big 10 fan outside the footprint, and they won't share it with the cable provider.

 

[SU2NASA]

This will never, ever, ever pass.

Cable networks are built around the dual network stream (subscription fees + advertising). Even the big ones like ESPN and CNN go unwatched by millions, but still collect payment from each and every cable subscriber.

The cut in subscribers (and many people would cut channels they watch, just to save money) would put just about everybody out of business, not just the Big 10 Network.

This will never pass. But if it did, they'd just hike the rate for people that do subscribe. They're not going to lose revenue and the average bill won't be any smaller. It would probably weed out some of the lesser cable stations though.

 

[cuseinchina]

quick and dirty bundling

Mr Millhouse loves ESPN but watches Bravo occasionally for milfs in hot tubs. Mrs Millhouse loves Bravo but occasionally watches gymnastics.

Ala carte world, Bravo is better off with only Mrs Millhouse paying what she thinks bravo is worth.

Same for espn

Here a bundle gives Mr Millhouse and Mrs Millhouse programming worth more than what they paid for it and the cable company makes more.

Win win.

Simple example but the principle is the same with hundreds of channels and millions of customers, it's just the math is way harder.

Worth
Mr Millhouse ESPN $10
Mr Millhouse Bravo $4
Mrs Millhouse ESPN $3
Mrs Millhouse Bravo $10

Bundle cost $12
Cable makes $24.
Mr Millhouse gets $14 for $12
Mrs Millhouse gets $13 for $12

Ala carte
Both channels cost $10.
Mr Millhouse gets espn worth $10 to him for $10
Mrs Millhouse gets bravo worth $10 to her for $10. No surplus
Cable makes $10

Bundle is best option for everyone

This is marginally true under al-a-carte via the cable company but totally breaks down once content is delivered directly from the content providers to the end user via some android style interface that organizes and streamlines access. There is a finite pie of consumer dollars that will be allocated to media - why should the content providers allow cable companies to take monopoly margins out of that pie for delivering content over a dumb pipe and controlling the ways in which content providers can monetize? Bundling was the best thing for content providers, but only when there was no viable distribution alternative. For reasons I have outlined previously the cable companies will be forced by competition, end user demand, and content providers who see the future, to boost bandwidth to a level where it is economically superior for content providers to drop their antiquated video distribution system. Even if you lose viewers you get a few things in return as a content provider: 1. you get to take back the monopoly margins the cable company was forcing you to give up; 2 . You get to monetize your content in many many different ways rather than just broad blush advertising based on neilson demographic studies; 3. you can interact with your customers in a way that provides a great deal of information to advertisers - so their advertising becomes far more valuable because it will be personalized and interactive in nature.

 

[PhatOrange]

Why should I have to pay for something I don't want?

Sent using my Commodore 64

Exactly, and I guess it's so people like OttoBF can produce tv shows. There is so much CRAP on television who cares if it dries up and dies. Nobody is going to care.

 

[WickedOrange]

serious ?'s

does this all work in HD, on a 60" screen??

how do your kids know whats new and fresh if the only option they have is what used to be new and fresh, but is now just in a library on netflix??

does the emergency broadcast system break in with acts of god or terrorist warnings??

:noidea:

On a my 55 inch screen:
OTA – The signal comes in uncompressed, so anything on 2,4,5,7,11 etc is superior to the the HD being provided by your cable provider.

Now that I think about it… someone posted a list of OTA ACC broadcasting towers. I think one was in NJ. I may already get the ACC network. I’ll have to take a look when I get home.

Netflix – great HD quality no issues there. This is not live broadcast, so the App can load up the buffer, insuring a solid HD stream.

WatchESPN – When my connection is solid the HD quality is great, at times it becomes pixelated, if my connection slows. This does not happen enough for me to pay for anything more than lowest broadband tier. The stream runs with about a 10-15 second delay to the live event. This will get better as compression and broadband speeds improve.

Emergency Alerts will come in on the OTA channels, plus I get the NOAA channel OTA. FEMA is rolling out Wireless Emergency Alerts this year (http://www.fema.gov/wireless-emergency-alerts). I got through Hurricane Sandy with my current set up, so really no issues there.

As for my kids keeping up with pop culture… not really concerned. With a computer, tablet, and PlayStation they will have plenty of access to the stuff I’m trying to shield them from.

Granted if you watch a lot of television or need to be able to channel surf, this set up is not for you. But if you want to avoid paying $200 an month (and for the big ten network), it’s well worth the $65 a month. It took some time to transition to, but after four years my wife and I barely remember what channel surfing was like.

Anecdotally, people in their twenties are shunning cable, I doubt the trend reverses itself when they begin to form households and have less free time. Also, they would rather go to prison with their mobile device than live free without them.

 

[PhatOrange]

I'd imagine channels like ESPN will be bundled. For $16 a month you'd get all the ESPN's just like now you get all the HBO's such as HBO 7 and their inDemands.

Of course the companies are not going to lose money and that's fine with me, I don’t want them to, they employ a lot of people. However as consumers we want choices. I can guarantee my bill would get lowered, but somebody else’s bill will be raised because they’ll want everything. People and their TV is sickening. It’ll all even out in the end.

The point is though, that 30 million NYC and NJ residents ain’t going to opt in to the Big 10 package.

And if there’s less crap programming and small channels whither up and die who cares. If people like your small niche channel they’ll opt in and the channel will survive. This will also force channels to seek out or produce good content to get more subscribers. That’s a win win.

 

[Millhouse]

This is marginally true under al-a-carte via the cable company but totally breaks down once content is delivered directly from the content providers to the end user via some android style interface that organizes and streamlines access. There is a finite pie of consumer dollars that will be allocated to media - why should the content providers allow cable companies to take monopoly margins out of that pie for delivering content over a dumb pipe and controlling the ways in which content providers can monetize? Bundling was the best thing for content providers, but only when there was no viable distribution alternative. For reasons I have outlined previously the cable companies will be forced by competition, end user demand, and content providers who see the future, to boost bandwidth to a level where it is economically superior for content providers to drop their antiquated video distribution system. Even if you lose viewers you get a few things in return as a content provider: 1. you get to take back the monopoly margins the cable company was forcing you to give up; 2 . You get to monetize your content in many many different ways rather than just broad blush advertising based on neilson demographic studies; 3. you can interact with your customers in a way that provides a great deal of information to advertisers - so their advertising becomes far more valuable because it will be personalized and interactive in nature.

it doesn't break down. with alternative distribution, they will still charge a higher price for each channel than they would in a bundle. netflix is a bundle too because it works out for everyone.

if people can get their content in more ways, prices will decrease due to competition, not because of dumb laws about bundling.

i'm all for competition. that will lower prices. i'm against laws against bundling that don't help anyone