Why Internet Television Isn't Quite Ready To Save Us From Cable TV 304
smaxp writes "It's no surprise that few people love their pay TV providers. In May, Variety reported that the American Consumer Satisfaction Index ranked cable television providers last in all consumer categories. Pent up frustration with cable and satellite TV providers fuels a steady buzz that Amazon, Apple, Google and Netflix will disrupt TV. These new entrants promise to offer variability in pricing and greater choice fueling notions that Americans have officially cut their proverbial cords. But true disruption is wishful thinking. Data from the PricewaterhouseCooper’s (PwC) global entertainment and media outlook for 2013-2017 doesn’t support a disruptive market scenario. Incumbent cable and satellite pay TV providers and over-the-top (OTT) challengers such as Amazon and Netflix are both forecasted to grow. OTT TV has only reinvented a single part of the TV business, streaming archival movie and television content over the internet replacing physical DVDs and time-shifted DVR replay of TV programs. To displace incumbents, OTT TV has to continue to change TV business models in ways that appeal to consumers and attract content owners. "
Dunno, I'm pretty happy without cable... (Score:4, Insightful)
Admittedly, I have no idea who got voted off the island, but I'm coping pretty well. I can watch all the shows I care about on streaming, when I want, with no ads. Sure, people will continue to pay for cable for years to come, out of habit, but it's a business model that's failing to deliver value to new customers, so the population that consumes it will age out over time even if the streaming services don't change anything.
Meanwhile, big cable is doing everything they legally can to prevent the streaming providers from delivering good service. And yet streaming providers are attracting plenty of customers, and plenty of people are cutting the cable. Why the hurry?
BTW, can we please stop calling it "over the top?" That implies something about the business model that's total nonsense: the idea that IP service is a side business, and cable is the real business. Where did this term come from, anyway?
Of course Price Waterhouse... (Score:4, Insightful)
doesn't like internet TV. It's customers are the big Network and TV cable companies!
It's been dead to me for years (Score:4, Insightful)
I haven't paid for TV in years. I just pirate everything that I can't find on Netflix. Not because I don't want to pay for something, or because I'm some kind of cheap ass looking to save a few bucks. I simply don't like paying $100+ a month to watch a few TV shows a week, which of course are laden with commercials. Unfortunately, this will always be an underground "war" until either the knowledge on how to safely pirate shows is commonplace, or there becomes actual competition in cable providers.
I'm content with things the way they are now, however. I watch what I want, when I want, and how I want, for either free or cheap. The ball is in their court now.
Piracy (Score:5, Insightful)
I on the other hand am very happy with cable (Score:4, Insightful)
I have no idea who got voted off the island. But I am very satisfied with what I get from having Cable tv.
- New episodes of good tv shows like Sons of Anarchy, The Walking Dead, Dexter, and Breaking bad show up on broadcast first. Streaming is absolutely more convenient. But running up against spoilers is too damn easy to do by accident if you use any kind of social media sites.
- New tv shows like 'The Amerikans' on FX show up on broadcast long before going to streaming sites, unless they are Netflix Originals.
- Live sports matter. Turns out I like watching people fight in a cage for money. The UFC puts out a surprising amount of events on free TV; 9 events on 'Free TV' (each being 6 hours (prelims and main card) plus an additional 9 events with prelim fights, and another event on Fox Sports 1 tomorrow. Watching these events legally through the official streaming service is much more expensive. Watching illegally is a pain in the ass. On top of that is more content from Bellator on Spike and regional promotions on Fight Network. MMA is not for everyone, but it is for me. And for others, its the NFL, or NBA, or NHL, or MLB.
- Also, as far as social media + spoilers, as much as it can hurt the experience of seeing a show to know the ending, it fucking kills any kind of sporting event.
- Not all content that you may wish to watch is going to be streamed easily. My wife is a fan of the Food Network. Not much demand for streams of those shows.
Personally, I love that Netflix and others are doing their own content now, but we are still pretty far off from being able to cherry pick only the shows I want to see and then pay only for that content.
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Re:no shit (Score:3, Insightful)
Erm, Netflix, Youtube and Amazon make deals for content all the time. Kevin Spacey has a deal with Media Rights Capital, that company has a specific (exclusive) distribution deal with Netflix for House of Cards. The web companies are adopting business tactics networks have used for decades, while demanding free access to the cable to your house, while the cable networks have to negotiate with cable providers for access.
ESPN is the key (Score:5, Insightful)
I think the biggest player that keeps people locked into subscription TV is ESPN, and they know it. Everything else can be found via acceptable delays whether it's Netflix/Hulu/whatever, DVD release, or even torrents. But most fans still strongly prefer to watch sports live.
Most people I know who still subscribe would gladly ditch cable/satellite if they could stream ESPN even if it cost $20/month, which is far more than ESPN gets from the cable companies and would allow them to offer features they can't run through non-interactive media. The number of people who have cut the cord (or know how to) hasn't reached critical mass yet, but once it does, ESPN is either going to be able to start dictating higher fees from cable companies or will take a shot at streaming (or both). I expect a strong drop in the cable/satellite subscriber base in the first year after this happens, which will be devastating to their share prices because jacking up rates to make up for lost revenues and profits will just encourage more people to leave.
Re:no shit (Score:5, Insightful)
Wrong spreadsheet (Score:5, Insightful)
Then you get the ultimate competitor, piracy. Piracy set the bar as to what the consumer can have. Basically commercial free, on demand, and with no bizarre strings such as time-limits, device limits, or weirdo delays for countries that aren't the US. All this plus it was almost free. The two gate charges were that you had to mess with torrents, and you once in a while get a dud. But Netflix showed that there is a business model that can compete with piracy. Month after month they get money from people who are now getting nearly all the benefits of piracy with none of the downsides.
Is Netflix the be all and end all? Probably not. One great quote I heard went like this, "Will Netflix become more like HBO faster than HBO will become like Netflix."
There are exceptions. Nightly news. Live sports. And highly topical TV such as Big Brother. Those don't quite fit the download netflix model.
Now where this whole thing breaks down is that I suspect that the big producers are all going to think, "Hey we can build out our own netflix with our giant library." They are wrong. If you open up your overpriced hotdog stand next to McDonald's that just went all-you-can-eat you will do 1/1000th of the business. These other companies have little hope of becoming even Pepsi to Netflix's Coke. People aren't going to drop cable to discover the wonders of Netflix at under $10 month only to start tagging on Disney, Warner, Sony, etc bringing them back up to their old obscene cable TV bill. Maybe people will subscribe to 2 services but with their all-you-can-eat libraries growing and getting better why would you need 3+ services?
The one I can't figure out is iTunes. Why would anyone buy anything that you can get on Netflix for the price of many months of Netflix? The prices on iTunes are bonkers.
Re:no shit (Score:5, Insightful)
The web companies are adopting business tactics networks have used for decades, while demanding free access to the cable to your house,
You lost us with the lie about demanding free access to the cable to my house. They demand equal access to the cable to my house that *I* pay for. When my ISP sends me a check for all the ads I've viewed, then I'll listen to that lie. Until then, I'll consider an ISP blocking access to content to be fraud and a breach of contract, not a fair move to block the greedy content companies. Who, incidentally, pay for their access to the Internet.
Re:ESPN is the key (Score:5, Insightful)
Disclosure: I work for Comcast
You have no idea how much of your cable bill goes to pay ESPN, if you did, you would be sick. Let's just say that a $20/month streaming bill wouldn't actually be 'far more than what they get from the cable company'.
Sports channels are easily the biggest cost, and the biggest driver of increased costs.
Re:no shit (Score:5, Insightful)
The "HOW" part isn't that hard... They could switch to a video on demand model allowing you to choose only the individual shows you want, when you want them and available worldwide at the same time.
The problem isn't "how" to compete, it's the realization that they have to compete... that's the part they haven't got to yet.