While Comcast was making noise in advance of CES with a VOD iPad app, DISH Network had their own announcement as the satcaster unveiled its Android app that enables Google enabled Smartphone users to access DISH programming. A former professional gambler, DISH CEO Charlie Ergen has undoubtedly raised the stakes in the TV Everywhere game. While the Comcast model will provide roughly 3000 hours of VOD content plus some streaming networks, the DISH service goes one better and allows customers access to their entire line-up of channels and all of their DVR content via a Sling enabled set top box, allowing for ultimate flexibility.
At a time when cord cutting has become a primary concern among multichannel providers, operators are looking to TV Everywhere as part of the solution to deal with the estimated quarter million video subscribers lost by the industry in the second and third quarters of 2010. While the multichannel sector as a whole as seen subscriber losses, Verizon, AT&T and DirecTV have seen gains. DISH is down about 50k subs in 2 and 3Q while Comcast is down over half a million video subscribers in the same period.
Comcast’s iPad VOD and streaming app will not launch until later this year, so the jury is still out as to whether its streaming to tablets will be enough of a silver bullet to hold on to subscribers or whether digital customers will continue to vote with their feet (and wallets) that they see better value in getting a limited amount of programming for less, or even free, from on-line options like of Netflix and Hulu.
Showing posts with label Comcast. Show all posts
Showing posts with label Comcast. Show all posts
Friday, January 7, 2011
Wednesday, January 5, 2011
Comcast Announces iPAD Video App
Comcast CEO Brian Roberts got a jump on everyone at CES with an announcement on the eve of the 2011 show. It seems that Comcast will be making nearly 3000 hours of VOD content available for streaming on iPADs later this year with enhancements that will include the ability for users to tap into their social networks. In doing so, Comcast is the first cable MSO to truly take the concept of "TV Everywhere" to heart. Until now, MSOs that have launched so called "TV Everywhere" services have made their VOD content available on their branded websites in an effort to thwart other online video providers like Hulu and Netflix that have been chipping away at their subsription revenue by enabling cord cutting (more on that some other time). This move eliminates the inherent limitation of having a "TV Everywhere" product limited to home PCs and laptops and is an effort to shore up their Xfinity digital subscriber base among iPAD users; those who are aguably the early adopters who are the most prone to being cord-cutters.
Although limited to the iPAD device for now, this app is a great start to the "unleashing" or unteathering of TV Everwhere. For now Comcast is working where the content rights allow them, but I expect that a smartphone app is not too far down the road, of course, programmer rights permitting.
Although limited to the iPAD device for now, this app is a great start to the "unleashing" or unteathering of TV Everwhere. For now Comcast is working where the content rights allow them, but I expect that a smartphone app is not too far down the road, of course, programmer rights permitting.
Tuesday, August 3, 2010
Comcast - CBS Deal Completed Above the Fray
The announcement is out that Comcast and CBS have entered into a 10 year distribution deal that covers retransmission consent of CBS O&O stations as well as carriage of Showtime, Smithsonian Channel and the CBS College Sports Network and On Demand and online rights for certain CBS owned programming. This deal is notable for several reasons
First off is the term of the deal. Rather than keep the term to 3 years in order to mirror the usual retransmission consent election cycle, the deal has a 10 year term which is rather long by industry standards. As noted by CBS CEO Les Moonves, “There is a lot of flexibility built in”. I certainly hope so given the speed at which things change in the industry.
Secondly, the agreement encompasses more than just retransmission consent. Comcast was smart to tackle all of the networks at once. Strategically, it allowed them the ability to do some good old fashioned “horse trading”. As any negotiator and chess player knows, the more pieces you have to move around on the board, the better deal you are able to craft. There is no word whether CBS College Sports will be moved from the poorly penetrated Comcast sports tier to a more penetrated “digital basic” or “expanded basic”. Of course, it doesn’t hurt that Comcast is the largest player in the game either.
Lastly, the agreement was hammered out behind closed doors. Unlike recent negotiations between other cable operators and broadcasters, there were no public theatrics or threats of pulling the stations off the cable systems. Not that I expect this to change the very public way in which Time Warner Cable and The Walt Dinsey Co. are engaging over ESPN and ABC. To be sure, Comcast has traditionally handled their negotiations without high public drama. Even more so lately as the last thing that Comcast needs is a high profile struggle with a broadcaster at the same time that their deal to acquire GE’s NBC-Universal is under review. Perhaps CBS knew that and played it to their advantage.
As if to underline the nature of Comcast’s negotiation style, there was little chest thumping by CBS. While neither party disclosed the financial terms of the deal, there was no grand statement by CBS that the deal is proof that the "marketplace works". That pronouncement will be left to the NAB. However Moonves did say that Comcast negotiated in good faith and “kept their word” – just what Comcast needs the regulators to hear.
First off is the term of the deal. Rather than keep the term to 3 years in order to mirror the usual retransmission consent election cycle, the deal has a 10 year term which is rather long by industry standards. As noted by CBS CEO Les Moonves, “There is a lot of flexibility built in”. I certainly hope so given the speed at which things change in the industry.
Secondly, the agreement encompasses more than just retransmission consent. Comcast was smart to tackle all of the networks at once. Strategically, it allowed them the ability to do some good old fashioned “horse trading”. As any negotiator and chess player knows, the more pieces you have to move around on the board, the better deal you are able to craft. There is no word whether CBS College Sports will be moved from the poorly penetrated Comcast sports tier to a more penetrated “digital basic” or “expanded basic”. Of course, it doesn’t hurt that Comcast is the largest player in the game either.
Lastly, the agreement was hammered out behind closed doors. Unlike recent negotiations between other cable operators and broadcasters, there were no public theatrics or threats of pulling the stations off the cable systems. Not that I expect this to change the very public way in which Time Warner Cable and The Walt Dinsey Co. are engaging over ESPN and ABC. To be sure, Comcast has traditionally handled their negotiations without high public drama. Even more so lately as the last thing that Comcast needs is a high profile struggle with a broadcaster at the same time that their deal to acquire GE’s NBC-Universal is under review. Perhaps CBS knew that and played it to their advantage.
As if to underline the nature of Comcast’s negotiation style, there was little chest thumping by CBS. While neither party disclosed the financial terms of the deal, there was no grand statement by CBS that the deal is proof that the "marketplace works". That pronouncement will be left to the NAB. However Moonves did say that Comcast negotiated in good faith and “kept their word” – just what Comcast needs the regulators to hear.
Thursday, July 15, 2010
Retrans Rhetoric Heating Up
This week sees the formation of the American Television Alliance (ATA), a consortium of multichannel providers with a goal of raising awareness and ultimately changing policy on retransmission consent. Among the “strange bedfellows” in the ATA are Time Warner Cable, Direct TV, Cablevision and AT&T – companies that often compete against each other for multichannel subscribers, and in the case of Cablevision and AT&T, fight over access to and pricing of programming (but that’s for another day). A large part of the argument made by the ATA is that retransmission consent is essentially a consumer issue since any payment made by cable operators to broadcasters are ultimately passed on to the subscriber.
Predictably, the National Association of Broadcasters (NAB) scoffed at the ATA’s consumer rights stance, with an NAB spokesman berating it “as credible as BP executives joining Greenpeace”.
The rhetoric on both sides of the issue is just about as predictable as Keith Olbermann and Glenn Beck discussing the economy. Both sides passionately make valid points filtered through their own lenses. There is no doubt that the broadcast business model is changing and that cable operators have long benefitted from the carriage of local broadcast signals. However, cable operators are increasingly coming under pressure to keep rate increases in check and have even renewed an industry conversation on smaller and cheaper programming packages. All of this comes at a time when viewer options are expanding and much of the broadcast programming is finding its way to the web for free (Hulu’s premium aspirations notwithstanding). However, for the broadcasters to paint the formation of the ATA as an effort to do little more than protect the bottom line of the operators is a bit disingenuous given the boasting that NAB member companies have been doing on their quarterly calls about how much retrans dollars are contributing to their profits.
At the end of the day, retransmission consent is a consumer issue. It is one more cost that cable operators need to either absorb or pass along. Very often, these kinds of disputes turn into high profile corporate pissing contests, where the consumer is the one who ultimately gets soaked.
But really, is it wise for either side to be airing their grievances in public? Do viewers really need or want to peek into the “sausage factory”? I don’t think so. At the end of the day, viewers are not interested in the disagreements of corporate behemoths. Don’t ask them to take sides or get involved in the details or you may find they have little appetite for supporting either company in an argument over money. They just want to turn on their TV to get relevant entertainment and information without having to pay a whole lot of money to be advertised to in the process. But on the other hand, they do have a right to know why they might be losing access to their local news broadcast.
There is no doubt that both sides are preparing the battlefield and oiling the guns for upcoming renewals. The heightened rhetoric by both sides will certainly draw increased scrutiny from Washington should any of the negotiations get close to failing or actually fall apart and result in TV stations going dark on cable systems.
As with anything involving legislation, this is very much a matter of being careful what you wish for. The issues of Retransmission Consent and a la carte programming have been raised by legislators and interest groups in the course of the Comcast-NBCU merger hearings. Granted, what Retransmission Consent has turned into may indeed have been an unintended consequence of the 1992 Cable Act (which, by the way, was the result of Congress overriding a presidential veto), but can you really expect that the people who gave you the problem have any idea of how to fix it?
Predictably, the National Association of Broadcasters (NAB) scoffed at the ATA’s consumer rights stance, with an NAB spokesman berating it “as credible as BP executives joining Greenpeace”.
The rhetoric on both sides of the issue is just about as predictable as Keith Olbermann and Glenn Beck discussing the economy. Both sides passionately make valid points filtered through their own lenses. There is no doubt that the broadcast business model is changing and that cable operators have long benefitted from the carriage of local broadcast signals. However, cable operators are increasingly coming under pressure to keep rate increases in check and have even renewed an industry conversation on smaller and cheaper programming packages. All of this comes at a time when viewer options are expanding and much of the broadcast programming is finding its way to the web for free (Hulu’s premium aspirations notwithstanding). However, for the broadcasters to paint the formation of the ATA as an effort to do little more than protect the bottom line of the operators is a bit disingenuous given the boasting that NAB member companies have been doing on their quarterly calls about how much retrans dollars are contributing to their profits.
At the end of the day, retransmission consent is a consumer issue. It is one more cost that cable operators need to either absorb or pass along. Very often, these kinds of disputes turn into high profile corporate pissing contests, where the consumer is the one who ultimately gets soaked.
But really, is it wise for either side to be airing their grievances in public? Do viewers really need or want to peek into the “sausage factory”? I don’t think so. At the end of the day, viewers are not interested in the disagreements of corporate behemoths. Don’t ask them to take sides or get involved in the details or you may find they have little appetite for supporting either company in an argument over money. They just want to turn on their TV to get relevant entertainment and information without having to pay a whole lot of money to be advertised to in the process. But on the other hand, they do have a right to know why they might be losing access to their local news broadcast.
There is no doubt that both sides are preparing the battlefield and oiling the guns for upcoming renewals. The heightened rhetoric by both sides will certainly draw increased scrutiny from Washington should any of the negotiations get close to failing or actually fall apart and result in TV stations going dark on cable systems.
As with anything involving legislation, this is very much a matter of being careful what you wish for. The issues of Retransmission Consent and a la carte programming have been raised by legislators and interest groups in the course of the Comcast-NBCU merger hearings. Granted, what Retransmission Consent has turned into may indeed have been an unintended consequence of the 1992 Cable Act (which, by the way, was the result of Congress overriding a presidential veto), but can you really expect that the people who gave you the problem have any idea of how to fix it?
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.
Thursday, February 4, 2010
Comcast/NBC-U Hearings Post-Game Analysis
The hearings just wrapped up on the hill. Mr. Roberts and Mr. Zucker, for the most part, did a good job presenting their case, despite the flogging Al Franken (D, MN) give Brian on Comcast's seemingly contradictory behavoir on program access and program carriage in the afternoon session.
Kudos to Colleen Abdullah of WOW for patiently, calmly and without hyperbole, explaining the position of the small cable operator/competitor. It took a fair amount of guts for her to sit at the same table with Mr. Roberts and Zucker and point out the issues that the entire industry is dealing with: program carriage demands (including tiering restrictions); retransmission consent; smaller operators paying “up to 20% more” for the same channels as larger operators; the squeezing of margins as a result of programming costs increasing faster than they can raise rates to consumers; and the lack of pricing transparency.
Although he was not a witness at the morning House Communications and Internet Subcommittee hearing, Andy Schartzman from the Media Access Project was on top of the facts and presented his arguments cogently in the afternoon before the Senate Judiciary Antitrust hearing. As usual, Mark Cooper from the Consumer Federation of America was big on sweeping generalities without presenting many numbers to back up his case - kind of scary for a guy with the word “Research” in his title. Additionally, he does not seem to grasp what TV Everywhere is all about – a value-add for video subscribers and not a product designed for cable operators to get into the OTT video business. Cooper even brought up a la carte!
Unfortunately a two to two and a half hour hearing in front of each group with each legislator getting only 5-7 minutes to question the witnesses does not provide the opportunity for the depth of discussion needed to really dig into all of the issues in the matter, while only a few of the legislators seemed to have a really good grasp on the issues. House and Congressional staffers will be working hard to sort though all of the testimony and written follow-ups that were requested. There will definitely be more hearings, and I’ll be staying tuned to see what conditions get placed on the merger.
BTW – For all of you folks at Turner, Senator Arlen Specter (D, PA) loves TCM!
Kudos to Colleen Abdullah of WOW for patiently, calmly and without hyperbole, explaining the position of the small cable operator/competitor. It took a fair amount of guts for her to sit at the same table with Mr. Roberts and Zucker and point out the issues that the entire industry is dealing with: program carriage demands (including tiering restrictions); retransmission consent; smaller operators paying “up to 20% more” for the same channels as larger operators; the squeezing of margins as a result of programming costs increasing faster than they can raise rates to consumers; and the lack of pricing transparency.
Although he was not a witness at the morning House Communications and Internet Subcommittee hearing, Andy Schartzman from the Media Access Project was on top of the facts and presented his arguments cogently in the afternoon before the Senate Judiciary Antitrust hearing. As usual, Mark Cooper from the Consumer Federation of America was big on sweeping generalities without presenting many numbers to back up his case - kind of scary for a guy with the word “Research” in his title. Additionally, he does not seem to grasp what TV Everywhere is all about – a value-add for video subscribers and not a product designed for cable operators to get into the OTT video business. Cooper even brought up a la carte!
Unfortunately a two to two and a half hour hearing in front of each group with each legislator getting only 5-7 minutes to question the witnesses does not provide the opportunity for the depth of discussion needed to really dig into all of the issues in the matter, while only a few of the legislators seemed to have a really good grasp on the issues. House and Congressional staffers will be working hard to sort though all of the testimony and written follow-ups that were requested. There will definitely be more hearings, and I’ll be staying tuned to see what conditions get placed on the merger.
BTW – For all of you folks at Turner, Senator Arlen Specter (D, PA) loves TCM!
Wednesday, February 3, 2010
Comcast/GE Head to the Hill
Tomorrow is a big day for Brian Roberts and Jeff Zucker as they head back to Washington to appear at two back-to-back hearings. In the morning they are slated for the House Communications and Internet Subcommittee, while the afternoon is the Senate Judiciary Antitrust Subcommittee. Also slated to testify at both hearings is Colleen Abdoulah President and CEO of WOW (Wide Open West) and Mark Cooper of the Consumer Federation of America. It will be interesting to see if those opposed to the merger get beyond the standard “big is bad” rhetoric that is the standard backbone of their opposition to explain exactly what their issues are.
In a world where the big keep getting bigger in order to “gain scale”, there is no question that it has become increasingly difficult for the small guys to compete. Comcast has been quite public in stating that the reason they are doing the merger is to gain scale in the programming realm. Content is still king, and those who own the content and access to it are in a position to reap the greatest profits.
Perhaps of greatest concern to WOW and other competitors like RCN and Knology, not to mention Dish Network and DirecTV, is how Comcast sets the rates for its own content in terms of the rates that their programming arm charges their cable arm. It is no secret that MFNs for the largest players in the distribution game often dictate higher rates for smaller operators, including competitors. This often leaves smaller companies feeling like they are subsidizing the larger players. A scenario where a programming entity setting their rates based on what their affiliated distribution company (which, by the way, is the largest in the market) agrees pays for that content justifiably raises concerns about the unfairness of an “out of one pocket in into another” arrangement. There is sure to be even more concern now that retransmission consent is involved.
Curiously absent from list of witnesses at tomorrow’s hearings is anyone from the satellite or telephone company community. The NBC broadcast affiliate group has already suggested strings, and there is no doubt that other parties will be joining in as the regulatory approval process proceeds. There may be little doubt that the merger will ultimately be approved. However, the larger question may well be what strings will be attached and, if one is to look at the merged Comcast/GE as Jonathon Swift’s Gulliver, whether the strings will be strong enough to hold the new media giant down for long.
In a world where the big keep getting bigger in order to “gain scale”, there is no question that it has become increasingly difficult for the small guys to compete. Comcast has been quite public in stating that the reason they are doing the merger is to gain scale in the programming realm. Content is still king, and those who own the content and access to it are in a position to reap the greatest profits.
Perhaps of greatest concern to WOW and other competitors like RCN and Knology, not to mention Dish Network and DirecTV, is how Comcast sets the rates for its own content in terms of the rates that their programming arm charges their cable arm. It is no secret that MFNs for the largest players in the distribution game often dictate higher rates for smaller operators, including competitors. This often leaves smaller companies feeling like they are subsidizing the larger players. A scenario where a programming entity setting their rates based on what their affiliated distribution company (which, by the way, is the largest in the market) agrees pays for that content justifiably raises concerns about the unfairness of an “out of one pocket in into another” arrangement. There is sure to be even more concern now that retransmission consent is involved.
Curiously absent from list of witnesses at tomorrow’s hearings is anyone from the satellite or telephone company community. The NBC broadcast affiliate group has already suggested strings, and there is no doubt that other parties will be joining in as the regulatory approval process proceeds. There may be little doubt that the merger will ultimately be approved. However, the larger question may well be what strings will be attached and, if one is to look at the merged Comcast/GE as Jonathon Swift’s Gulliver, whether the strings will be strong enough to hold the new media giant down for long.
Thursday, January 14, 2010
Epix’s Epic Struggle
Officially announced in March of 2009 on the heels of a dispute with Viacom sibling’s CBS owned Showtime, Epix boasted $150 million in studio backing. The service initially made its content available online and officially launched its linear HD feed this past October. Take-up by cable operators has been slow, even if the service changed its business model from wanting to be part of a basic or digital tier at a cost of about $1.50 per subscriber the operator to being a premium service, with a premium online component only available to customers of its affiliates – making for a service with the potential to be a new revenue generator for cable operators. Until this week, the only provider that has signed on to carry the service is Verizon. This week, two more operators (Cox Communications, and Mediacomm) signed on the dotted line – both committing to an April 2010 launch.
One would think that a premium service model would be attractive to the operator, but the difficulty comes in selling a new service to subscribers on top of their existing bundle and the risk of the new service cannibalizing other premium services like HBO (owned by Time-Warner Inc.), Starz and the aforementioned Showtime. In part the need for an additional premium service in the market is why many cable and satellite operators like DirecTV and Cablevision indicated no interest in carrying the service when it was announced last spring. This is compounded by the fact that the service is made up of movies that have already been shown in their theatrical, hospitality, home video and VOD windows. Even so, revenue is revenue, and the lack of interest by major MSOs may have been more of a starting point in the negotiations than a definitive statement.
At the end of the day, unless EPIX can sign four of the top five 5 MSOs, they will struggle to become profitable and the three partner studios will be pressured to pull the plug on the service. Even though Comcast is focused on getting the NBC deal done and launching their Xfinity (TV Everywhere) service, and Time-Warner making rumblings that they are considering a rebranding, the multiplatform nature of Epix fits into Comcast’s strategic emphasis on on-demand and online video. Frankly, It’s surprising that they did not move quicker. Could it be that the Epix partners are unwilling to offer equity for carriage or is Comcast pushing for earlier VOD windows from the three partner studios as part of the deal?
On the flip side of the multiplatform aspect of the service, the online portion leaves the satellite providers out in the cold. Even if they could come up with the bandwidth to offer the linear service, DirecTV and Dish Network don’t have any local servers on the ground to cache the online HD service. Particularly telling is that, aside from Verizon, the wireline competitors like AT&T and RCN Corp. have yet to sign on. Ten months after an announcement, Epix has only announced three deals. Without the big guys in the tent, unless a whole lot more come soon, Epix could be history by the end of this year.
One would think that a premium service model would be attractive to the operator, but the difficulty comes in selling a new service to subscribers on top of their existing bundle and the risk of the new service cannibalizing other premium services like HBO (owned by Time-Warner Inc.), Starz and the aforementioned Showtime. In part the need for an additional premium service in the market is why many cable and satellite operators like DirecTV and Cablevision indicated no interest in carrying the service when it was announced last spring. This is compounded by the fact that the service is made up of movies that have already been shown in their theatrical, hospitality, home video and VOD windows. Even so, revenue is revenue, and the lack of interest by major MSOs may have been more of a starting point in the negotiations than a definitive statement.
At the end of the day, unless EPIX can sign four of the top five 5 MSOs, they will struggle to become profitable and the three partner studios will be pressured to pull the plug on the service. Even though Comcast is focused on getting the NBC deal done and launching their Xfinity (TV Everywhere) service, and Time-Warner making rumblings that they are considering a rebranding, the multiplatform nature of Epix fits into Comcast’s strategic emphasis on on-demand and online video. Frankly, It’s surprising that they did not move quicker. Could it be that the Epix partners are unwilling to offer equity for carriage or is Comcast pushing for earlier VOD windows from the three partner studios as part of the deal?
On the flip side of the multiplatform aspect of the service, the online portion leaves the satellite providers out in the cold. Even if they could come up with the bandwidth to offer the linear service, DirecTV and Dish Network don’t have any local servers on the ground to cache the online HD service. Particularly telling is that, aside from Verizon, the wireline competitors like AT&T and RCN Corp. have yet to sign on. Ten months after an announcement, Epix has only announced three deals. Without the big guys in the tent, unless a whole lot more come soon, Epix could be history by the end of this year.
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