[opendtv] NYT: Unraveling the Cable Bundle
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 5 Dec 2014 02:41:10 +0000
This piece, like many others, understands what the sea change is. Nothing to do
with VOD. For example:
"Companies like HBO and CBS are betting that they can reach more subscribers by
cutting out the middleman and selling directly to consumers."
And,
"Some niche networks that have a small but strong followings might find it more
lucrative to ditch cable companies and establish a direct relationship with
viewers."
(Especially true if the cord cutting/shaving trend continues.)
And,
"That is why it is important that the Federal Communications Commission enact
strong rules prohibiting broadband companies from blocking or interfering with
Internet content."
Bert
-------------------------------------
http://www.nytimes.com/2014/10/22/opinion/hbo-and-cbs-move-toward-selling-content-directly-to-consumers.html?_r=0
Unraveling the Cable Bundle
HBO and CBS Move Toward Selling Content Directly to Consumers
By THE EDITORIAL BOARD
OCT. 21, 2014
Executives at media and cable companies have been resisting the idea of selling
TV channels à la carte for years, saying it was not financially feasible. But
that resistance is starting to give way to a more pragmatic approach that
should benefit consumers.
Last week, officials at HBO said they would start selling an Internet-only
subscription to the network's movies and shows next year. Also last week, CBS
started selling all its programming online for $5.99 a month. And companies
like Dish Network and Verizon are planning to sell Web-based TV subscriptions.
The cable bundle - that overflowing buffet of hundreds of TV channels that can
cost $80 a month or more - has understandably frustrated consumers. Many
Americans would prefer to pay less for their favorite channels. But cable
companies like Comcast and Time Warner and media conglomerates like Viacom and
Disney have had a huge financial incentive to push consumers to buy ever larger
bundles for higher prices. These companies have also successfully lobbied
against bills introduced by lawmakers like Senator John McCain that would
encourage cable companies to sell channels à la carte.
But the success of streaming video companies like Netflix and Hulu and the fear
that many younger Americans may never subscribe to cable or satellite TV have
forced media and telecommunications executives to rethink their positions.
Companies like HBO and CBS are betting that they can reach more subscribers by
cutting out the middleman and selling directly to consumers.
That could, indeed, help some Americans save money. For example, people who
only want to watch "Game of Thrones" and "Girls" might be able to buy an online
HBO subscription for, say, $20 a month, not the $70 they would have to pay
Comcast for a cable subscription that includes HBO and dozens of channels they
do not want. (Consumers will, of course, have to pay separately for a
high-speed Internet connection.)
The coming wave of Internet-based TV services might also make the cable and
media industries more efficient. Some niche networks that have a small but
strong followings might find it more lucrative to ditch cable companies and
establish a direct relationship with viewers.
Nonetheless, there will be problems. Some companies might try to make up for
the revenue they lose as consumers cancel cable-TV subscriptions by raising the
price of high-speed Internet service. Most American households buy broadband
Internet service from a cable or phone company, and those companies could
interfere with or block online video streams.
Earlier this year, Netflix complained that some of its customers had a hard
time watching its movies on their Internet connections from Comcast, Verizon
and other companies. Those problems were resolved when Netflix agreed to pay
the broadband companies to connect its system directly to their networks.
That is why it is important that the Federal Communications Commission enact
strong rules prohibiting broadband companies from blocking or interfering with
Internet content. Regulators must also be careful not to allow the industry to
become even less competitive as large companies like Comcast and AT&T seek to
acquire smaller companies like Time Warner Cable and DirecTV.
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