Media Mogul Barry Diller is making headlines with his investment in Aereo, a new media company that will provide remote DVR storage and streaming of broadcast content. Aereo announced that it has raised $20.5 million in Series A funding led by Diller’s IAC. Diller also has a board seat.
Aereo plans to provide up to 40 hours of DVR space for $12 per month with the content being streamed to internet enabled devices (smart phones, tablets, web enabled TVs, etc.). For starters, Aereo in intends to offer the service to consumers in the New York City DMA starting in mid March. Initial reports of the technology are that it involves an array of tiny antennas, each dedicated to a single customer, feeding the hard drive (DVR) storage. It seems that the company is taking this tact in order to make the claim that they are an antenna rental service and not a multichannel service provider. In doing so, Aereo hopes to avoid the need to negotiate and pay retransmission consent fees and capture the “cord cutting” segment of the market with a product that would complement a consumer’s ability to receive cable programming via the likes of Netflix and Hulu+.
In the mean time, cable operators are reacting to declining subscriber numbers by starting to test and deploy lower cost packages that that have been stripped of expensive sports programming. Broadcasters are still talking about mobile digital broadcast services without much to show for it in the market. Both the cable ops and the broadcasters continue to arm wrestle over retransmission consent fees with the FCC almost a year into the process of a proposed notice of rulemaking on retransmission consent – but that’s another blog entry.
For now the initial news is out about Aereo’s plans have been announced. It is more than likely that New York area broadcasters are huddling with their attorneys this morning on the news to explore their options. One just has to wonder if the next headline will be “Broadcasters Attempt to Shoot Down Aereo with Cease and Desist Orders”.
Showing posts with label cable competition. Show all posts
Showing posts with label cable competition. Show all posts
Wednesday, February 15, 2012
Wednesday, February 23, 2011
Online Video Upstart Smacked Down
Online video provider ivi raised more than a few eyebrows last year when it launched an internet based service that streamed the linear feeds of local broadcasters to subscribers. Auguring that they fit the definition of a “cable system”, ivi claimed that simply by paying a compulsory copyright license fee they were able to receive and retransmit broadcast signals without the permission of the station owners and that because they were an internet service they were able to do so without the permission of the broadcasters or paying additional fees for retransmission consent.
U.S. District Judge Naomi Reice Buchwald begged to differ, ruling that ivi is not a cable system as defined by law. Furthermore the judge found that ivi could not selectively determine which regulations applied to them and which did not. In short, they could not be a “cable system” only when it was convenient. She further commented that taken to its extreme, ivi’s argument is absurd and would make anyone with a computer, TV antenna and internet connection a “cable system”
In a statement, ivi CEO Todd Weaver insists that Buchwald’s ruling is incorrect and vowed to appeal the decision. For now, ivi subscribers have seen their service taken down pending the next steps in the process. While an appeal is certainly likely, it is almost certain that this marks the beginning of the end of the road for ivi. While they may be able to proceed with a modified business model that provides for payments to the broadcasters they carry, they will certainly not continue operation as a “pseudo cable system”. With the courts placing control back in the hands of the content owners, chances are that ivi will be lucky to be remembered as a footnote in the history of over the top video.
U.S. District Judge Naomi Reice Buchwald begged to differ, ruling that ivi is not a cable system as defined by law. Furthermore the judge found that ivi could not selectively determine which regulations applied to them and which did not. In short, they could not be a “cable system” only when it was convenient. She further commented that taken to its extreme, ivi’s argument is absurd and would make anyone with a computer, TV antenna and internet connection a “cable system”
In a statement, ivi CEO Todd Weaver insists that Buchwald’s ruling is incorrect and vowed to appeal the decision. For now, ivi subscribers have seen their service taken down pending the next steps in the process. While an appeal is certainly likely, it is almost certain that this marks the beginning of the end of the road for ivi. While they may be able to proceed with a modified business model that provides for payments to the broadcasters they carry, they will certainly not continue operation as a “pseudo cable system”. With the courts placing control back in the hands of the content owners, chances are that ivi will be lucky to be remembered as a footnote in the history of over the top video.
Friday, September 24, 2010
Programmers Seek Increases, Higher Cable Rates to Follow
An adage in investigative journalism was made popular during the heyday of the Watergate investigation; “Follow the Money”. Nowadays it seems you can follow the money spent for your cable or satellite service right back to the big media companies. Bob Iger at Disney is pointing to ABC Network taking a higher share of its broadcast affiliates retransmission consent fees, while Chase Carey over at Fox is telling his investors that National Geographic Channel and FX network should be receiving higher license fees from cable operators. Meanwhile, independent programmers like Hallmark Channel are seeing themselves dropped from line-up as providers like AT&T seek ways to reduce programming costs.
Guess what going to happen to your cable bill as ABC, FOX and others continue to demand increases in their license fees? That’s right; those increases are going to be passed directly on to the consumer. Anyone who thinks different or is of the belief that cable operators should absorb the increases should refer back to their Business 101 textbook. After all, Comcast, Time Warner Cable and all the rest have investors to answer to as well. With programming costs being one of the biggest line-items that cable operators have to deal with, what else would you expect?
Meanwhile cable operators seem to be whistling past the graveyard while they are losing subscribers and insisting that cord-cutting has nothing to do with it. All the while they are rolling out their own “TV Everywhere” services, providing a collection of video to their customers in a “walled garden” fashion.
Where does that leave the multichannel industry? Is cable dying a slow death, choking on ever increasing fees and programmer demands to carry a plethora of new channels that seem to come about with every contract renewal while customers are warming to the idea of program-by-program a la carte on line? Recent reports suggest that the industry is at the precipice of a long, slow decline. This isn’t the first time that the cable industry has seemingly stood at the edge of the abyss. No doubt the cable industry will find a way to survive this too.
Guess what going to happen to your cable bill as ABC, FOX and others continue to demand increases in their license fees? That’s right; those increases are going to be passed directly on to the consumer. Anyone who thinks different or is of the belief that cable operators should absorb the increases should refer back to their Business 101 textbook. After all, Comcast, Time Warner Cable and all the rest have investors to answer to as well. With programming costs being one of the biggest line-items that cable operators have to deal with, what else would you expect?
Meanwhile cable operators seem to be whistling past the graveyard while they are losing subscribers and insisting that cord-cutting has nothing to do with it. All the while they are rolling out their own “TV Everywhere” services, providing a collection of video to their customers in a “walled garden” fashion.
Where does that leave the multichannel industry? Is cable dying a slow death, choking on ever increasing fees and programmer demands to carry a plethora of new channels that seem to come about with every contract renewal while customers are warming to the idea of program-by-program a la carte on line? Recent reports suggest that the industry is at the precipice of a long, slow decline. This isn’t the first time that the cable industry has seemingly stood at the edge of the abyss. No doubt the cable industry will find a way to survive this too.
Wednesday, July 14, 2010
Is it Time for Cable MSOs to Think Small?
The coverage continues to fly about Time Warner Cable CEO Glenn Britt’s comments about the possibility of smaller packages of cable programming at a lower price. While not going so far as to endorse a la carte carriage of cable services, Britt’s comments does point towards a package of programming made up of 40 or 50 channels. The tricky part will be what gets put in the package and what gets left out.
Industry research shows that the average cable viewer watches only between 10 and 17 networks on their service on a regular basis. However, each individual cable subscriber has a different list of favorite channels. The issue is compounded even more in households where mom, dad and each of the kids all have a different list.
While Glenn Britt should be applauded for moving the conversation forward, we have yet to hear from the content providers (one wonders if Mr. Britt would have made these types of comments before Time Warner Cable was spun off by its parent company). In the final analysis, the cable operators can only do what the programmers will allow. There is an expectation that smaller operators with no programming interests would love to get in on this plan. The stumbling block in the plan is that most of the programmers currently in the large “expanded basic” package likely require broad penetration as a condition of carriage. Even networks with limited appeal like Food Network and Versus could have these kinds of packaging requirements. I ask you, what network owned by a major media company will be the first to step up and permit a cable operator to reduce their distribution by putting them on a lower penetrated tier?
If it is truly a matter of controlling costs, then logic would dictate that the networks with the highest license fees would be the first to go. While some subscribers may be indifferent to the loss of highly priced sports services like ESPN and the local regional sports networks (which are typically owned by cable operators like Comcast and Cox) in return for a reduction of their cable bill, other subscribers will certainly not be happy. Of course, all it would take to derail the plan by Time Warner would be a competitor like Verizon, AT&T, DISH or DirecTV committing to keeping these services on their expanded basic service.
An alternate strategy of placing a bunch of inexpensive and relatively low viewed services like home shopping and religious networks services on a low cost introductory tier and bundling the popular services like Discovery, Disney Channel, Nickelodeon and TNT on a more expensive tier will do nothing to truly address the issue and will further damage the low reputation that cable providers tend to have among the public.
While many cable subscribers intuitively like the idea of a la carte, the average consumer’s concept of how it would likely operate is ill informed at best. Subscribers currently now getting 100 channels for $50, will not be able to simply choose any twenty channels and only pay $10. It’s not going to work that way, as cable networks will need to increase their per subscriber rate as they lose subscribers in order to be kept whole, especially taking into account the resulting loss of advertising dollars.
At the end of the day it’s all about total revenues for the programmers with the operators increasingly feeling like collection agencies for the networks. Something tells me that we haven’t seen the last of this kind of talk. If anything, the operator/programmer relationships will continue to be thorny. Networks continue to insist on wider distribution for their new and emerging services and operators of all sizes continue to find their margins squeezed by an increasingly frugal subscriber base that is beginning to look at other options for video.
Industry research shows that the average cable viewer watches only between 10 and 17 networks on their service on a regular basis. However, each individual cable subscriber has a different list of favorite channels. The issue is compounded even more in households where mom, dad and each of the kids all have a different list.
While Glenn Britt should be applauded for moving the conversation forward, we have yet to hear from the content providers (one wonders if Mr. Britt would have made these types of comments before Time Warner Cable was spun off by its parent company). In the final analysis, the cable operators can only do what the programmers will allow. There is an expectation that smaller operators with no programming interests would love to get in on this plan. The stumbling block in the plan is that most of the programmers currently in the large “expanded basic” package likely require broad penetration as a condition of carriage. Even networks with limited appeal like Food Network and Versus could have these kinds of packaging requirements. I ask you, what network owned by a major media company will be the first to step up and permit a cable operator to reduce their distribution by putting them on a lower penetrated tier?
If it is truly a matter of controlling costs, then logic would dictate that the networks with the highest license fees would be the first to go. While some subscribers may be indifferent to the loss of highly priced sports services like ESPN and the local regional sports networks (which are typically owned by cable operators like Comcast and Cox) in return for a reduction of their cable bill, other subscribers will certainly not be happy. Of course, all it would take to derail the plan by Time Warner would be a competitor like Verizon, AT&T, DISH or DirecTV committing to keeping these services on their expanded basic service.
An alternate strategy of placing a bunch of inexpensive and relatively low viewed services like home shopping and religious networks services on a low cost introductory tier and bundling the popular services like Discovery, Disney Channel, Nickelodeon and TNT on a more expensive tier will do nothing to truly address the issue and will further damage the low reputation that cable providers tend to have among the public.
While many cable subscribers intuitively like the idea of a la carte, the average consumer’s concept of how it would likely operate is ill informed at best. Subscribers currently now getting 100 channels for $50, will not be able to simply choose any twenty channels and only pay $10. It’s not going to work that way, as cable networks will need to increase their per subscriber rate as they lose subscribers in order to be kept whole, especially taking into account the resulting loss of advertising dollars.
At the end of the day it’s all about total revenues for the programmers with the operators increasingly feeling like collection agencies for the networks. Something tells me that we haven’t seen the last of this kind of talk. If anything, the operator/programmer relationships will continue to be thorny. Networks continue to insist on wider distribution for their new and emerging services and operators of all sizes continue to find their margins squeezed by an increasingly frugal subscriber base that is beginning to look at other options for video.
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