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Time Warner Deal Is How Comcast Will Fight Cord Cutters
An anonymous reader writes "This NY Times articles makes the case that Comcast's planned acquisition of Time Warner Cable is part of a strategy to fight back against the millions of people ditching cable subscriptions. 'The acquisition rests on the assumption that as people cut back on their monthly TV plans, the cable lines coming into their homes won't lose their value.' The idea is that switching away from cable TV will simply make consumers more beholden to their internet connections, and removing (i.e. acquiring) the competition will let Comcast raise rates without losing customers. The article concludes, 'The steady price increases in broadband rates cast a pall over any cord cutter's dreams. It's possible that you might still save money now by cutting off your cable. But if you plan to watch a lot of TV over the Internet, don't expect to save money forever.'"
What up to now has been unlimited data for one price over cable will become a set of plans with different rates for different data caps. For those who have been screaming about a la carte channels on cable, you'll effectively get them - you'll only pay for what you watch. But it will be on a GB basis, not a channel basis.
It's the shitty content. I got rid of cable because I don't actually watch TV any more. Call me a Luddite but I actually read books more then ever. I guess they better start investing in firemen and flame-throwers.
I wish they would stop misusing the term "cord cutting" for not subscribing to television while still getting Internet via cable, as it is confusing and stupid. The term originally came about as people stopped paying for land-lines and used their cell phones exclusively instead, and there it made sense.
In this case, as the article points out, "In most American households, the cable cord is the fastest conduit for broadband service. This suggests the canny strategy by which those once-inescapable cable providers might combat the rise of cord cutters: The cable giants will simply become even-more-inescapable Internet giants."
Well duh, it's been that way for a long time. You aren't "cutting the cord" by saving a few bucks by not paying for television but still getting Internet over cable. Even 10 year ago, it was like a $10 difference to not get basic cable. Where cable is losing the big money is on all the premium bundles.
Is not be messing with the price all the time.
Somehow, mysteriously, the price changes slightly every month and it's always up.
Once the promotions are gone, it creeps up a bit every month. (The promotion ending for '1 year sign up price" is a big jump.)
Eventually, people start looking at the bill trying to figure out how to reduce it. That act, is what kills them. You don't want people thinking about the bill, you want them to just pay it.
I'll be dropping the TV / Movie portion of my cable in a month or two (summer means outside, and moving to a single abode again). But I wouldn't if it wasn't $45 a month more than it was when I moved in.
"and removing (i.e. acquiring) the competition will let Comcast raise rates without losing customers."
Nobody in America currently has a choice between Comcast and Time Warner. I hope the DOJ rejects the merger because the resulting company is too big. But the amount of competition in the cable internet market would not change at all.
the reason cable bills go up and no one has a choice of channels is because Disney, Discovery, Viacom and everyone else constantly raise prices and only offer their channels in one big bundle. and always add more channels.
when a channel is blacked out on their TV people always blame comcast or direct TV. they should be blaming the channel owner for wanting too much money and not giving any choice of channels.
comcast might not be a saint, but a bigger comcast will mean that any time a channel owner wants a price increase they risk losing more than half their revenue during the blackout. in the past they would pick a small carrier for the price raise since the effect on revenues was pennies
and costs are increasing with salary raises
Citation please. If anything salaries have been broadly flat. I don't know maybe salary growth has exceeded averages among cable providers, possible. As you say those not as many new customers, and more customers who already have cable tv don't need cables run and being more internet savy than 10 years ago do self installs. They should if anything be able cut staff. Both on the installer side and on the back office support provisioning end.
Upstream and transport network bandwidth is getting cheaper. So that cost should be going down for them too. I don't see much evidence to support them doing any cable plant upgrades to offer more bandwidth to the home. Most of them have little or no competition so they are content to make 50Mbps down / 15 up their max offerings most places and not splitting the segments up and doing more fiber home runs to enable them to offer more. The lack of incentives to continue investment in enhanced cable plant should also if anything be lowering their costs.
Looking forward if they need more IP bandwidth they can just start scaling back the television offerings that apparently fewer and fewer customers want. Again I don't see their costs going up.
Frankly this merger if allowed looks more like an opportunity for gouging than anything else. Normally I am laissez-faire type when it comes to markets. I'd say let them merge; but this is a case where these companies only are able to operate in the first place because of government granted rights of way. Either the rights of way ought to be reconsidered and property owners allowed to charge them rent, or we should just start regulating them like public utilities.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
The only way I've been willing to deal with a price increase is when they offer me a stupid amount of extra bandwidth. Oh you want to give me 25/10 service for $5 more? Sure. Oh you want to give me 25/25 service for $1 more a month. Heck yeh! You are offering 100/65 for $35 more a month......FUCK YEH!!!!
Comcast's idea: we are raising your rates by $5 this year and we are throttling your connect to 7/1. Me: Go fuck yourself and cancel my account. Comcast: wait?! what?!
Just the past amount of bad blood I've had with cable companies would keep me from doing business with one again. When I bought my house, my real-estate lady thought I was nuts, I checked out all the houses she was going to show me to see if they had cable or FIOS for service (the area around Tampa is broken up into little monopoly zones with either one or the other) and refused to go look at houses that only had access to cable.
As far as having to "pay" things are moving so fast that in 10 years most of the new shows are going to come from any of the old broadcasters. Comcast doesn't represent so much as a horse buggy whip factory, but a store that specialized in selling and delivery horse buggy whips.
Here in Germany, I pay for 100Mbps/20Mbps (Down-/Upstream) EUR 25 per month (at current exchange rate around 34 USD/month).
Well, at least the company selling the service offers the product as "100Mbps/20Mbps", but in fact when the technician came and connected it, we saw sync-speed of 100Mbps/31Mbps and his comment: "Yeah, we actually sell only what we can guarantee".
I have measured it many times, and it is really effectively 100Mbps/30 Mbps
While I was in the US from 2009 onward, I had the feeling that the US has the worst internet connection (to homes) of all the countries I spent time in (except emerging markets). And it was the most expensive I have seen so far.
Future cost of cable will be this:
$150 per month for cable TV + internet
$140 per month for internet only
Enjoy your options.
As president of my HOA, I allowed Verizon to install FIOS capability to every unit in my complex, for free.
Now, we are not as a community beholden to Time-Warner, but can switch to Verizon as a provider of all things digital (internet, TV, and phone).
Both are desperate to sell you "packages" of services, rather than just internet. Screw them. I call once a year and threaten to ditch them for their competitor. The result is a rate reduced by about 40%.
I do not own a television, nor do I use a land-line phone. I just want internet. Well, that sort of logic falls short with their telephone salespeople. The only threat that works is, "I will totally cancel service from you and will go to your competitor."
If Comcast is paying $1B to cover a region, and another $100M a year to maintain it, it'll pay that regardless of whether it keeps or loses 50% of its customers. And likewise a competitor will pay exactly the same.
The cost structure you assume is exactly the opposite of what actually happened when phone service was deregulated to allow competition. http://en.wikipedia.org/wiki/Competitive_local_exchange_carrier Costs to maintain the shared wiring infrastructure were split amongst each operator (ILEC, CLEC) rather than multiplied by each additional operator as you suggest.
So, I attended the Streaming Media West conference last month, and one of the things I came away with was how the existing players (Hollywood, cable companies, etc.) are adamant about ensuring an "orderly transition to IP-based delivery." That is an exact quote from one of the over-the-top (OTT) sessions I went to, where over-the-top refers to content delivered over IP directly to the user from someone other than the broadband provider (e.g., watching a movie from Netflix instead of from your cable company's video-on-demand service).
This is very much the point of the "TV Everywhere" systems by which you login with your cable or satellite credentials in order to watch cable/satellite content on a mobile device or set-top box (iPad, Roku, etc.). It's basically a rear-guard action against the cord-cutters: we'll let you watch the same content on any device, provided you pay the same price for it. Keep paying your cable bill, even if you don't watch cable.
I wrote a long blog about the show here. But taking it back to the Comcast / Time Warner deal, the competitive issue is not in individual markets (where, indeed, there's usually only one cable company), but in the power of a combined Comcast / Time Warner to keep creatives in the old system, by using caps, throttling, predatory pricing, and other dirty tricks to hamper genuine Internet TV.
Presumably, once the Justice Department comes to understand the antitrust implications of this deal, they'll immediately launch an investigation. Of Apple.