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Why Internet Television Isn't Quite Ready To Save Us From Cable TV
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. "
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?
doesn't like internet TV. It's customers are the big Network and TV cable companies!
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.
OTA digital subchannels are what saved me from cable. Between and DIY and educational shows on 3 PBS channels, and the old reruns on various commercial "retro" subchannels, I'm now getting much better programming than the "reality" crap played 24/7 on the burned out carcasses of what used to be decent cable channels. Best of all, it's free.
I pirate because the uploaders provide an infinitely better service than the cable companies or even Hulu/Netflix etc. I get DRM/region free ad-free files that work on any device, at great resolutions and quality, barely minutes after the episode has aired. Why the hell would I go back to their terrible services when that option is open to me? Now yes i'm not paying for the content, but often that's not an option anyway, (see The Oatmeal's comic on trying to buy Game of Thrones online). As has been voiced a million times, if these companies fired all their old idiot suits and brought out a 'Steam for movies/tv' that had all the added value that Steam brings it would take off like a rocket.
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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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.
You can never go home again... but I guess you can shop there.
I have an exclusive deal with the Pirate bay that trumps all those deals. Netflix, Youtube and Amazon are NOT the future of video. They are just extensions of the same relics the cable companies are. Internet killed the video star.
Interesting question. I am going to guess no. Sports are surprisingly tied to modern culture.
While it is clearly not 'high culture' in the way that Opera, art galleries, ballet, and such manage to, sports are surprisingly important to modern culture. Humans are competitive with one another. Sports are one of the few acceptable physical outlets for that. Competition in sports allow humans to compete with one another, either individually or in groups, without resorting to violence. Humans are tribal, and sports teams push several psychological buttons for people (belong to a group, and lets kick the ass of those other guys from across the river).
Individual sports may increase or decrease in importance over time, but I expect that some form of sports will continue to be culturally relevant and important as long as humans are both competitive with one another and want to impress women by showing off how dominant they are.
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Because TPB has instant streaming, good recommendations, integrates as an instant streaming source for all of my house-hold devices, and has a lovely children's mode? TPB is only a good deal if you don't value your time or you just can't find something you want somewhere else for a decent price or ease of access.
if you've got kids, particularly girls, you're stuck. They all want to watch the same shows and the same night. I'm too broke for cable right now (When it hit $170/mo for Internet+tv I had to bail) and it drives my kid nuts. Sure, the shows might show up on Netflix, but it takes months. I can get them on iTunes, but it's so expensive I might as well buy cable (and I'm sure that's by design).
/. crowd) TV is a social thing. It genuinely puts my kid at a social disadvantage that she doesn't have it.
I know a lot of people will rant about Television being brain rot and all that, but for most normal people (hint: Not the
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If you have 11 guys bidding on your 10 camels then you will get a great price. If 2 of the guys buy cars so you now have 9 guys bidding for your 10 camels then you are going to get hosed. This is the same situation combined with the fact that people are angry at being abused for a long time. Being forced to pay outrageous prices for crappy programming. Then spreading out the desired channels in to 4 different packages so that we have to buy all 4 to get the 5 channels that we only wanted. Plus commercials that drive us up the wall. Moving programs around based on this weeks insider political clout of the producer. Then cancelling shows when the political clout of the producer dropped below some imaginary threshold.
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.
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.
Learn to love Alaska
If you read TFA, you will find his claims are contradictory.
First it states the premise:-
So far so good. Then it states the facts relied on to suggest OTT TV doesnt appeal enough to customers :-
Note the assumptions- It assumes that "average consumers" must watch 157 hours of traditional television every month to be satisfied. The article very carefully never explains why it thinks this is a valid assumption. Do we even have any numbers to show that those who watch 157 hours of traditional television every month are happier with their service than those who watch less?
The irony is that right at the beginning of the article, it admits that
So we do know that customers of cable companies are very unhappy with their cable service. This directly contradicts his assumption that"average consumers" must watch 157 hours of traditional television every month to be satisfied, since on average they are obviously unhappy even after watching that much.
This is a badly written article trolling for hits.
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.
In the Netherlands, the main sports people watch on television is soccer. Nothing more. The national soccer bond has their own live streaming of the 2 leagues and all the international games service which you can subscribe on. National television usually broadcasts the national team if they play a match and there is public television that is streamed by the station itself for "other sports". We have a crowd of people watching Formula 1 on any of two or three channels that usually provide the feed on television, but it's the only sport that can be found "free" on cable that isn't streamed "free" on the internet that has a significant of people watch.
It's being done, it's proven commercially viable because we have enough density of high speed internet to satisfy "the fans". The reason it won't work in the USA yet, is because there aren't enough people able to watch these streams. Once broadband gets enough penetration, Cable and satellite TV will be dead as disco, unless they will start providing a-la-carte channels instead of bundles.
Don't forget that Netflix has their own exclusive series now. You can't get those on cable or satellite and this means that people will eventually be going to want both services. Given the netflix pricing schedule, it will be relatively cheap for people to have both and only pay for the netflix stuff they can't get on cable, or not when they want it. Paying cable for expensive upgrades like a DVR feature will happen less and less because of this.
Advertising income from channels will be lower because fewer people will be watching, even if the potential viewer number doesn't change. That means that the channels offering the content and the producers of the content will look for different ways of making money. They could charge the cable companies more, making cable more unattractive for more and more people, or they could go on the internet. They could do both. Regardless which they choose, the cable companies will have to choose to either get more expensive, or cut costs somewhere internally in their organization. The end result will be that they will have to spend more money on marketing to compensate for the lower quality and/or the higher price, again resulting in a less satisfied customer.
It doesn't take much more than what is already happening to trip the balance for the cable and satellite companies. It's already happening and it will be a matter of time until they will start to change their pricing model and offer you to pay per channel. It may take some bankruptcies for this to happen, but it will happen soon enough. That won't be the end, but they'll be around as long as enough people can't get high speed internet in their homes. Cable TV will probably die sooner than Satellite, but in the end, we'll all be watching IP-based streams, or whatever the prevailing technology is by then.
I was promised a flying car. Where is my flying car?
And, unfortunately, when someone does compete with P2P as a competitor and beats it, they treat that company as an enemy. Example, Netflix. It's an easy to use service and is on virtually all devices. You can buy an inexpensive Roku box for $50 and then get thousands of shows for $10 a month. How have the content providers treated Netflix? Many are trying to keep their content off of it as if having their content stream via Netflix (and getting paid for that) is a horrible thing. Imagine how much better Netflix's service would be if the content providers opened their vaults and let Netflix have access to everything? Even if Netflix doubled their price, it would be a wonderful service that millions more would sign up for. However, it would also seriously disrupt the business model that content providers know and love and so they try their best to withhold content from Netflix. Ironically, this just helps piracy, not the content providers.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.