So, the Retransmission Consent hearings are over (for now) and all of the usual suspects got to have their say on the issue. Keeping to the script, the MSOs asked for some changes in the regime, arguing that Retransmission Consent is another in the long litany of special privileges that broadcasters enjoy. Broadcasters insisted that they need a dual revenue stream to compete. Small programmers argued that the tying involved in many Retransmission Consent agreements makes it difficult for them to gain carriage. For the most part, the hearing was predictable and civil. It was, however, suprising to hear Jay Rockefeller (D WV) rant on the record about the polarizing nature of Fox News and MSNBC and his wish that the FCC could somehow make them go away. It was no suprise either that several Senators suggested the popular notion that the time may have come for the industry to consider a la carte pricing models. Other than that there was not much newsworthy that came of it as John Kerry (D MA) tried to keep the hearing focused on finding a solution to keep broadcast signals on cable systems during retransmission consent negotiations.
It's always easy to tell who benefits the most from the status quo - it's the guy who defends it the most vigorously. That was the role that Chase Carey from Fox played. Carey insisted that taking away the ability to deny carriage strips him of his leverage and eliminates any incentive for a cable operator to get a deal done. He also pointed fingers at Cablevision as the party that used it subscribers to win political gain. Well, there was a hearing after all.
More than a few eyebrows were raised by the fact that different cable providers in the same market can be charged different rates by the same broadcaster for the same signal. In an effort to bring a modicum of transparency to the process, it was suggested that the numbers involved no longer be subject to confidentiality (gasp!).
More than once the lawmakers suggested (or threatened) that if "the market" can't figure things out on their own, then Washington will get involved. With that stance it won't be a suprise that there will be more high profile retransmission consent disputes that result in temporary drops of broadcast feeds. For now it is hard to see what the appetite inside the beltway is for taking another swipe at cable regulation given the much larger problems that the country faces. One thing is for sure, once the ball gets rolling it may be a matter of "being careful what you wish for". Washington is a sausage factory. You can start out with the best of intentions, but along the way it inevitably gets ground up and flavoered beyond all recognition. But for now Retransmission Consent is like the weather, everyone talks about it but nobody does anything about it.
Showing posts with label distributors. Show all posts
Showing posts with label distributors. Show all posts
Tuesday, November 23, 2010
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.
Tuesday, September 7, 2010
CableLabs 3D Specs Paves One More Lane on the Road to Mass Adoption
Multichannel video providers have been dabbling in 3D programming for the past few months in order to prove the technology, test the waters with their consumers and enhance the perception that they are keeping up with new technologies. All of the 3D programming aired to date has been event driven content. With the adoption of 3D specs, CableLabs has taken the first step in paving the way for mass adoption of 3DTV.
In a way, as with HDTV 3D is a “chicken and egg” proposition. Is it that readily available 3D content will drive purchases of sets, or will content providers wait until there is a “critical mass” of 3D sets in homes before making the content available? ESPN and Discovery (who were both early movers in the HD) have already made their bets. As with any new technology, multiple specs lead to consumer confusion, which results in the delaying of a purchasing decision. Now that CableLabs has written 3DTV specs, it seems that there is one more lane of certainty on the road to mass adoption of 3DTV.
As is always the case on cable systems, it comes down to bandwidth. Fortunately, the move to all digital, switched digital, and ultimately IPTV systems will alleviate bandwidth problems for cable operators. The other pieces that still need to be understood are consumer appetite and elasticity of demand, programmer willingness to create content, the carriage/distribution deal and how operators will charge to recover the costs of 3DTV programming. Hey, we’re just getting started, folks!
In a way, as with HDTV 3D is a “chicken and egg” proposition. Is it that readily available 3D content will drive purchases of sets, or will content providers wait until there is a “critical mass” of 3D sets in homes before making the content available? ESPN and Discovery (who were both early movers in the HD) have already made their bets. As with any new technology, multiple specs lead to consumer confusion, which results in the delaying of a purchasing decision. Now that CableLabs has written 3DTV specs, it seems that there is one more lane of certainty on the road to mass adoption of 3DTV.
As is always the case on cable systems, it comes down to bandwidth. Fortunately, the move to all digital, switched digital, and ultimately IPTV systems will alleviate bandwidth problems for cable operators. The other pieces that still need to be understood are consumer appetite and elasticity of demand, programmer willingness to create content, the carriage/distribution deal and how operators will charge to recover the costs of 3DTV programming. Hey, we’re just getting started, folks!
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!
Friday, January 8, 2010
3DTV: Is it Really Coming at You, Or Does it Just Look That Way?
Announcements are coming fast and furious about new 3DTV technologies for the home as many TV manufacturers at this week’s CES in Las Vegas are showcasing their latest efforts to make in home TV viewing more realistic. The question that many have yet to ask is whether 3DTV is ready for prime time. To answer the question it may be helpful to draw parallels to the growth of HDTV.
Current statistics state that nearly 50% of US homes have at least one high definition TV set, indicating that HDTVs, once the domain of videophiles early adopters, have become a mass market consumer good. That said high income households ($75,000+ annually) still over-index while lower income homes lag. This trend has been helped along by the HD wars that have been brewing between cable distributors, telcos and satellite providers. Early on, there were only a few HD channels available. In recent years, the number has ballooned to the point where 100 HD channels has become the standard offering with cable providers touting even more “HD choices” on their On Demand platforms.
To be sure, the adoption of HDTV has been impressive, given that it has been only ten years since the introduction of early consumer sets. However, one would be wise to consider the “chicken and egg” nature of new TV technologies. Adoption tends to follow rather than lead content availability. In recent years, programmers like NBC-Universal, Discovery Communications, Disney and MTV Networks have been aggressively rolling out HDTV simulcast channels. By converting their popular programming to HDTV they are in essence acting as arms dealers in the HD wars between multichannel providers. For the most part those channels have been provided to the consumer for little or no incremental cost. For the cable and satellite operators and programmers, plant and studio upgrades to provide HDTV has been seen as a cost of doing business to attract and maintain the growing legion of HDTV set owners. The availability of top rated programming (particularly sports) in HDTV has certainly spurred the growth of HDTV adoption.
Enter 3DTV. While 3D programming on TV has been presented from time to time as a gimmick to attract viewers (e.g. the 1997 Third Rock from the Sun two part “Nightmare on Dick Street” episode) or in an effort to heighten awareness for commercial products (e.g., the combined “Monsters vs. Aliens” trailer/SoBe commercial aired during Super Bowl XLIII in 2009), the jury is still out on whether 3DTV has a true future. Like HDTV (and DVD) a large deal of the growth potential for 3DTV rests on a three legged stool: 1.) the adoption of industry standards, 2.) the speed at which content is provided in the new format, and 3.) the ability for distributors to carry enough 3DTV signals to make adoption compelling for subscribers.
When considering standards, it is important to consider whether the goal is to present 3D images with the use of eyewear or headwear (i.e., traditional red-cyan glasses, polarized glasses, or synchronized shutter glasses) or without eyewear using an autostereoscopic display. In large part this is a matter of the consumers’ willingness to use eyewear. There is certainly a willingness to do so in a movie theater or theme park setting where the image is projected on a large screen and viewer immersion is near total. Where offered, 3D versions of movies generate on and a half times the revenue of the standard 2D version. However, there is doubt as to whether consumers are willing to don eyewear in home for extended periods of time for content presented on a smaller screen. One thing is for sure, consumer will not stand for multiple formats delivered on the same screen, constantly having to switch between different sets of glasses. The inconvenience and confusion will undoubtedly lead to high rates of dissatisfaction which will be communicated at lightning speed via online blogs and word of mouth, dooming 3DTV immediately. By far, the most impressive technology from a viewer standpoint does not rely on the use of eyewear, so called autostereoscopic display.
From a standards perspective, little is needed to display images that require eyewear. Most of those technologies have already been used on existing networks and TV sets. As far as the more impressive autostereoscopic display, last February SCTE (Society of Cable Telecommunications Engineers) announced a committee to work on standards for the provision of 3DTV over cable networks. When formed, they announced that standards like these typically take 12-18 months to be created. So far there is no word out of this group. Likewise the MPEG (Motion Pictures Experts Group) Industry Forum has recently formed the 3DTV Working Group which will be meeting for the first time CES on Saturday, Jan. 9. The purpose of the group is to coordinate 3D standards activities between mastering and display technologies. That means that 3DTV are being showcased at CES before the industry has even met to discuss standards!
Until these standards are developed and costs to produce or upconvert content to 3D is known, it is difficult to say at what rate programmers will deploy full time HDTV channels. Suffice it to say that if recent HDTV history is any indication, it will be a matter of programmers and distributors working together taking the lead in making content available to viewers. From the programmers’ standpoint, their involvement will be driven by the operators pressuring them to provide 3D content as the operators see the demand from their customers and the distributors have the bandwidth on their plant to make the content available. As with HDTV, once/if 3DTV sets reach a critical mass, the floodgates will open and all of the programmers will want to jump into the pool. However, the bottleneck will remain in the distribution plants. From the operators viewpoint, the provision of additional feeds of programming (whether in HD or 3D - requiring eyewear or not) will require the use of additional bandwidth, which is an already precious and scarce commodity. How operators deal with this dilemma, either by expensive rebuilds, further division of plant by pushing fiber further out, through the deployment of IPTV technologies, or improved compression technologies, will determine how quickly 3DTV is deployed.
At the end of the day, for all of the talk about 3DTV at CES, the consumer electronics side of the equation - which has yet to even set standards - is at the mercy of the programmers and distributors when it comes to the future of the sales of 3DTV sets. For now it seems that the future of 3DTV is best viewed using eyewear of the rose colored variety.
Current statistics state that nearly 50% of US homes have at least one high definition TV set, indicating that HDTVs, once the domain of videophiles early adopters, have become a mass market consumer good. That said high income households ($75,000+ annually) still over-index while lower income homes lag. This trend has been helped along by the HD wars that have been brewing between cable distributors, telcos and satellite providers. Early on, there were only a few HD channels available. In recent years, the number has ballooned to the point where 100 HD channels has become the standard offering with cable providers touting even more “HD choices” on their On Demand platforms.
To be sure, the adoption of HDTV has been impressive, given that it has been only ten years since the introduction of early consumer sets. However, one would be wise to consider the “chicken and egg” nature of new TV technologies. Adoption tends to follow rather than lead content availability. In recent years, programmers like NBC-Universal, Discovery Communications, Disney and MTV Networks have been aggressively rolling out HDTV simulcast channels. By converting their popular programming to HDTV they are in essence acting as arms dealers in the HD wars between multichannel providers. For the most part those channels have been provided to the consumer for little or no incremental cost. For the cable and satellite operators and programmers, plant and studio upgrades to provide HDTV has been seen as a cost of doing business to attract and maintain the growing legion of HDTV set owners. The availability of top rated programming (particularly sports) in HDTV has certainly spurred the growth of HDTV adoption.
Enter 3DTV. While 3D programming on TV has been presented from time to time as a gimmick to attract viewers (e.g. the 1997 Third Rock from the Sun two part “Nightmare on Dick Street” episode) or in an effort to heighten awareness for commercial products (e.g., the combined “Monsters vs. Aliens” trailer/SoBe commercial aired during Super Bowl XLIII in 2009), the jury is still out on whether 3DTV has a true future. Like HDTV (and DVD) a large deal of the growth potential for 3DTV rests on a three legged stool: 1.) the adoption of industry standards, 2.) the speed at which content is provided in the new format, and 3.) the ability for distributors to carry enough 3DTV signals to make adoption compelling for subscribers.
When considering standards, it is important to consider whether the goal is to present 3D images with the use of eyewear or headwear (i.e., traditional red-cyan glasses, polarized glasses, or synchronized shutter glasses) or without eyewear using an autostereoscopic display. In large part this is a matter of the consumers’ willingness to use eyewear. There is certainly a willingness to do so in a movie theater or theme park setting where the image is projected on a large screen and viewer immersion is near total. Where offered, 3D versions of movies generate on and a half times the revenue of the standard 2D version. However, there is doubt as to whether consumers are willing to don eyewear in home for extended periods of time for content presented on a smaller screen. One thing is for sure, consumer will not stand for multiple formats delivered on the same screen, constantly having to switch between different sets of glasses. The inconvenience and confusion will undoubtedly lead to high rates of dissatisfaction which will be communicated at lightning speed via online blogs and word of mouth, dooming 3DTV immediately. By far, the most impressive technology from a viewer standpoint does not rely on the use of eyewear, so called autostereoscopic display.
From a standards perspective, little is needed to display images that require eyewear. Most of those technologies have already been used on existing networks and TV sets. As far as the more impressive autostereoscopic display, last February SCTE (Society of Cable Telecommunications Engineers) announced a committee to work on standards for the provision of 3DTV over cable networks. When formed, they announced that standards like these typically take 12-18 months to be created. So far there is no word out of this group. Likewise the MPEG (Motion Pictures Experts Group) Industry Forum has recently formed the 3DTV Working Group which will be meeting for the first time CES on Saturday, Jan. 9. The purpose of the group is to coordinate 3D standards activities between mastering and display technologies. That means that 3DTV are being showcased at CES before the industry has even met to discuss standards!
Until these standards are developed and costs to produce or upconvert content to 3D is known, it is difficult to say at what rate programmers will deploy full time HDTV channels. Suffice it to say that if recent HDTV history is any indication, it will be a matter of programmers and distributors working together taking the lead in making content available to viewers. From the programmers’ standpoint, their involvement will be driven by the operators pressuring them to provide 3D content as the operators see the demand from their customers and the distributors have the bandwidth on their plant to make the content available. As with HDTV, once/if 3DTV sets reach a critical mass, the floodgates will open and all of the programmers will want to jump into the pool. However, the bottleneck will remain in the distribution plants. From the operators viewpoint, the provision of additional feeds of programming (whether in HD or 3D - requiring eyewear or not) will require the use of additional bandwidth, which is an already precious and scarce commodity. How operators deal with this dilemma, either by expensive rebuilds, further division of plant by pushing fiber further out, through the deployment of IPTV technologies, or improved compression technologies, will determine how quickly 3DTV is deployed.
At the end of the day, for all of the talk about 3DTV at CES, the consumer electronics side of the equation - which has yet to even set standards - is at the mercy of the programmers and distributors when it comes to the future of the sales of 3DTV sets. For now it seems that the future of 3DTV is best viewed using eyewear of the rose colored variety.
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