Channel-based TV subscription to threaten cable packaging model
http://www.businessinsider.com/intel-cable-2013-1#ixzz2GkSFccYf
Pretty serious implications for the Big 10 Network?
Kelly Clay at Forbes reports Intel is going to blow up the cable industry with its own set-top box and an unbundled cable service.
Clay says Intel is planning to deliver cable content to any device with an Internet connection. And instead of having to pay $80 a month for two hundred channels you don't want, you'll be able to subscribe to specific channels of your choosing.
Here's the key paragraph:
This set-top box, said by industry insiders to be available to a limited beta of customers in March, will offer cable channels delivered “over the top” to televisions anywhere there is an Internet connection regardless of provider.
January 2nd, 2013 at 11:06 AM ^
The article suggests that the box could "kill the cable industry as we know it." If that means not having to pay $80 a month for 200 channels when you only watch about ten of them, count me in.
January 2nd, 2013 at 11:20 AM ^
January 2nd, 2013 at 11:38 AM ^
You still have to have comcast high speed internet to stream your shit, which is ridiculously expensive as it is. I would love to go off comcast cold turkey though.
January 2nd, 2013 at 6:24 PM ^
I don't get why people thing a la carte is going to be cheaper. It won't. Look at HBO. That's $15/mo. The 10 channels you watch will all go to an HBO style pricing system. Want ESPN? That'll be $15/month. Want the other ESPN channels too? They'll sell you all of them for $25/month. Add in your other channels for $5 each a month, and you'll be right back up to $80/month accept now you'll only be getting 10 channels instead of 200.
In a society that's all about buffets and buying in bulk, I don't get why people want to abandon bulk cable deals. There's no shot in hell it'll be cheaper. Content doesn't pay for itself.
January 2nd, 2013 at 11:11 AM ^
January 2nd, 2013 at 11:17 AM ^
I feel like someone said that about iTunes and Redbox too...
Completely different, I know. But the fact of the matter is, they "changed the game" in music and movies.
January 2nd, 2013 at 11:30 AM ^
Apple and Google clearly want al la carte TV as shown with products like Apple TV and Google Glass. You also see people like Netflix starting to make their own content and releasing it via streaming. Even ESPN is sniffing around the edges of this with ESPN3. Comcast, Fox, etc might not like it, but when Apple and Google (plus Intel now) put their weight behind something, you're going to see a shift in the market.
I'm still bitter about this expansion and how we fronted cash to Maryland. For what we paid for their worthless ass we could have built a whole online media footprint for the BTN. All the historical games on demand, on the new games on any device with a fast enough connection. If we want the BTN to really make money, make it so no B1G game is on anything but our network and having it work like that isn't a problem since our network is so accessible everyone can get it.
January 2nd, 2013 at 11:37 AM ^
Your idea about the BTN is excellent. If they did that, I would pay them $20/month and I would not need any other channel except maybe a Tigers channel.
January 2nd, 2013 at 1:13 PM ^
Just curious, because I watch maybe the 3 times per year M is on in football, plus maybe another 1-2 times for basketball, at most. And the rest of the year it is a vast wastelend (to me) and something I'd never watch.
January 2nd, 2013 at 3:38 PM ^
January 2nd, 2013 at 8:08 PM ^
January 2nd, 2013 at 11:38 AM ^
The main draw for those services was convenience aka I can still keep up on my favorite shows if I cut the cord but I sacrifice same day viewing (iTunes).
I will believe this when I see it but I do not forsee a future quite yet where content providers will serve up their channels a la cart as they have no incentive to do so. I've been down this road before with GoogleTV and Boxee and both have failed miserably.
January 2nd, 2013 at 1:21 PM ^
Cable is basically controlled by 3-4 companies, whom also control internet access (yeah!).
They could let Intel charge you say $20/ month for the ESPNs, BTN, + say 10-20 other channels that you like. That's fine, but then your internet bill goes up from $30 to $50, because now you are only getting Internet from the CableCo, not TV, Internet, & Phone.
Your internet price increases because you are not getting the bundling discount.
Then, it gets better. CableCo will limit your $50/ month internet access to X Gigs/ month, because you would take up way too much bandwidth otherwise. Do you want unlimited Internet? OK, that's another $X per month.
In the end you still end up paying $100/ month for phone, internet, & cable - it's just to 3 different companies (CableCo, Intel, & VoIPCo).
January 2nd, 2013 at 6:53 PM ^
And in the end, you'd probably wind up paying more for less overall content. Which in general, is how every a la carte menu I've ever eaten off of works.
January 2nd, 2013 at 3:35 PM ^
with uverse, and then the networks and cable oligopoly showed them the light.
i.e., while I would love for this to happen, I will believe it when I see it and it works reliably.
January 2nd, 2013 at 11:46 AM ^
Charter, Cox, Netflix, and probably even Dish and Dish Network in one way or another, will soon figure out how they can make more money together than stepping on each other's toes. The Super-Cable, coming soon.
January 2nd, 2013 at 1:19 PM ^
Smaller scale cable providers like Buckeye in NW-Ohio are always sending letters imploring their customers to let congress know they don't like forced bundles. I think some operations would prefer a channel by channel thing.
January 2nd, 2013 at 11:14 AM ^
I welcome our Intel channel-subscribing overloads.
My channel list:
ESPN
FSD
CNN
BTN (During hoops season only)
AMC
TBS
TNT
And really, I'd go with just the first three plus Netflix. I'm willing to hit the bar for the games I want to see on BTN, so I'm not really married to that either.
January 2nd, 2013 at 6:28 PM ^
Monthly subscriptions to those channels ain't gonna be cheap. They have to pay for their content somehow, and with les subscribers, they'll need to offset things with higher prices. And you won't be able to drop things for just basketball season. They'll make you lock in for a year at least so they can come up with budgets to produce content. You'd see pricing like this:
ESPN -- $20
FSD -- $5
CNN -- $5
BTN (During hoops season only) -- $5
AMC -- $10
TBS -- $5
TNT -- $10
So, now you're paying $60 for 7 channels.
January 2nd, 2013 at 11:05 PM ^
I literally only watch those channels. The only times I don't are when I have several days off - like during holiday breaks. Then I'll kill brain cells with TruTV and similar crap that I don't need. And like I said, I could stick with the top 3 or 4. I only watch TNT for Law & Order marathons, I only watch TBS for syndicated shows I can get elsewhere, and I only watch AMC for BB and Walking Dead. Those all can be gotten through Netflix.
I would love to pay $60 for those 7 channels (plus the over the air networks).
However, we're a long way from that being a possibility, as you point out in your other posts.
January 2nd, 2013 at 11:15 AM ^
The millions of die hard Rutgers and Maryland fans will most assuredly add the Big Ten network to their "channel-based" lineups........
:/
January 2nd, 2013 at 3:50 PM ^
There is going to be at least as many marylands fans who will do that if just to see maryland basketball/lacrosse/soccer than will sign up for purdue or northwestern anything. Rutgers on the other hand probably won't add much.
January 2nd, 2013 at 11:14 AM ^
January 2nd, 2013 at 11:16 AM ^
I have been waiting for "a la carte" selections for a while now. If this doesn't put a dent in the cable industry, something, internet based, eventually will.
January 2nd, 2013 at 11:16 AM ^
Wish I could've gotten rich off the idea like someone is about to. It makes perfect sense...for the provider and the consumer.
With that data you recieve on what people are purchasing, you adjust your pricing model. Make people pay a base price for the standard ABC, NBC, CBS, FOX, etc. and then charge by the station for everything else. Your ESPNs, MTVs, Discovery's, TNT/TBS/USAs will obviously be more than the other stations people don't watch as much.
We do this with music...TV should've did it a long time ago.
Fact of the matter is, most people pay $80-120 for 200-500 channels. If you get that down to $40-50 for 30-50 channels, people are still going to buy it. Cost wise it looks like you're getting less for your money, but the fact is no one watches 200-500 channels. I'd assume most people watch maybe 10.
Me, I'd rather pay $30 to have 10-15 channels, than $80 to have 300.
January 2nd, 2013 at 11:32 AM ^
I don't watch much TV (I'm more of a movie/XBOX guy), so I'm willing to pay a lot less for about thirty channels per month. It's amazing though, isn't it? Think about it. Back in the day, people had limited access to TV with the small amount of channels. Then satellite and digital TV came along that offered tons of channels. People loved it, even though they had to pay more per month. Now the cost of cable and Internet is so high, people are willing to have less channels in order to save money. I just think America realized that a lot of the channels are crap, pointless, and almost no one watches them, so they're unnecessary and hence a waste of money.
January 2nd, 2013 at 11:36 AM ^
any sort of capable competition is good. It will be interesting to see where the trade-off lies. We might not get 10-15 channels for $30, but would you pay $50 or $55 for 200, 250, or 300 channels?
January 2nd, 2013 at 11:16 AM ^
January 2nd, 2013 at 11:31 AM ^
This is true, however as more and more people cut the cord, content providers will have to start looking at ways to increase revenue from other sources. I heard an NPR story a year or two ago about how during whatever year that was, it was the first in which cable companies saw a net decrease in subscribers from the prior year. I do not recall if that statistic included losses to satellite providers, but the main thrust of the piece was that a lot of people were cutting the cord in favor of Hulu, etc.
If this trend continues content providers will not be able to achieve growth by squeezing a dwindling supply of cable providers with higher access fees. Changes in the revenue model will have to occur to facilitate growth. I would expect to see a la carte offerings sooner than later, along with the death of channels for which there is no significant market demand.
January 2nd, 2013 at 12:06 PM ^
You mean channels like the so-called "Discovery Channel" with such fare as "Ice Road Truckers" "Property Wars" "Deadliest Catch" "Moonshiners" and all the other shows about toothless alligator hunters and mumbling catfish noodlers and sad fucks who pretend they're professional hunters of gold in repossessed storage units, or "The Larnin' Channel" with the brilliant "Toddler Tiaras"?
January 2nd, 2013 at 12:26 PM ^
January 2nd, 2013 at 1:29 PM ^
Or at least the first season. One of my favorite shows is "Ancient Aliens" on the History Channel? Is it ridiculous? Yes. Is it awesome? Yes.
Oddly enough, I used to know someone in marketing and the "toothless alligator hunter" show was that networks most highly rated show. Keep in mind that a big part of the History Channel's targeted audience is white men over 50.
January 2nd, 2013 at 11:23 AM ^
I'm happy to see things moving in this direction, but I wouldn't get too excited for this offering. My guess is the initial pricing won't be the huge benefit to consumers that we all want. The content providers will charge Intel a premium that will of course be passed to the consumer. So unless you will subscribe to only a few channels, my guess is the current bundled model will be more cost effective FOR NOW.
But, baby steps and all that, so any progress is great news. Give this new business model time to mature and prices will come down.
January 2nd, 2013 at 11:24 AM ^
But it isn't really a smart business move for the channels to do this. That's because many companies own many of these channels. Disney wants you to have ESPN, ABC, Disney Channel, etc, regardless of if you want the Disney Channel or not. Viacom wants you to pay for MTV, Nickelodian, Comedy Central, and Spike, not just Comedy Central.
So, while it makes a ton of sense for the consumer, it makes less sense for the cable companies and even less to the channel companies. I'll believe it when I see it, but it sure would be nice.
January 2nd, 2013 at 11:49 AM ^
...But you're right. We're dealing with a relatively small number of parent companies.
January 2nd, 2013 at 11:24 AM ^
This is something I have been clamoring for. If it works, is available in my area, and allows me to save money per month, then I will do it. I love DIRECTV and to me, it's the best service available, but it's also not inexpensive. Right now I am bundling Internet and cable with AT&T and DIRECTV, costs about $130 per month, but it's going to rise in March or April when my promotion period is over.
January 2nd, 2013 at 11:24 AM ^
...there is an Internet connection regardless of provider."
This is a great idea whose time should have come ten years ago, but I can't imagine that Comcast (my local A2 internet overlord) won't fight this tooth and nail.
From Comcast's standpoint, why would they allow a third-party entity to use their internet infrastructure to provide a service that would significantly cut into their revenue stream?
January 2nd, 2013 at 11:31 AM ^
for cable providers. They make their $$ of Internet. I know quite a few cable companies would love to dump the cable TV portion and just charge for bandwidth used.
January 2nd, 2013 at 11:34 AM ^
Who's going to make them give up their business over their lines when most of the cable companies are in with the local governments to have basis monopolies over service in that area? If they're not willing to open it up to have competing cable companies in their area, why would they open up competition to this for their citizens?
January 2nd, 2013 at 11:48 AM ^
they don't have a choice.
with their purchase of NBC, NBC-comcast would be asserting monopoly power if they favored some internet traffic over others.
what they could (and will) do is institute pay-as-you-go pricing. internet that costs per mb.
January 2nd, 2013 at 11:55 AM ^
Try watching Comcast owned channels (like G4) on Direct TV...or channels you don't get on Comcast because they don't own the networks. It's not "banning", it just pricing it out of viability.
January 2nd, 2013 at 2:09 PM ^
with much respect, apples to oranges. i'm talking about internet traffic; you, cable TV packages.
comcast has in the past throttled torrent traffic downloads, and that created quite a fervor.
January 2nd, 2013 at 11:25 AM ^
Potential ala-carte apps like Youtube, Hulu, Netflix, and AppleTv have not succeeded in gathering relevant content. As much as I'd love it to happen - and I currently use Air Stream and Apple Tv as a means of staying off the grid - I'm not optimistic.
It seems as if mass media learned a valuable lesson after watching Napster and iTunes completely rework the music industry.
January 2nd, 2013 at 11:34 AM ^
Generally this is true. But i'm generally ok with being a few seasons behind on shows like Sons of Anarchy. I'm a binge watcher, and prefer to watch 3 or so episodes at a time. That said, sometimes you catch up (like I did with Vampire Diaries*... and Hulu Plus kinda works out because you can watch the episode a few days after it aired.)
*Don't judge me, it's a small penance for the ability to watch all the CFB i want on Saturdays.
January 2nd, 2013 at 11:28 AM ^
Apple is rumored to have been working on a similar setup, or maybe Apple and Intel have worked together?
Anyway, the Big Ten network is one of the only reasons I still have cable. If it wasn't for that and a few select channels, I wouldn't have cable at all.
January 2nd, 2013 at 11:37 AM ^
I have very few shows I watch and the rest is sports. I could get by with just ESPN/ABC, Fox, BTN, HBO/HBO GO, History Channel, and a small amount of others I can't think of.
January 2nd, 2013 at 11:28 AM ^
Here's the key:
Disney, for instance, charges TV distributors about $5 for every subscriber that gets ESPN. And, by some estimates, only about 25 percent of cable customers actually watch ESPN on a regular basis. So if you unbundled ESPN, the per-subscriber cost might shoot up to $20 or more, to account for the 75 percent drop in its customer base.
January 2nd, 2013 at 11:36 AM ^
The issue is we need to move passed the mindset where ESPN is king. When the MNF contract comes up for renewal next time the NFL could easily say "No thanks ESPN, we'll just stream it over NFL.com and charge people 5 dollars a game or X dollars for a season pass." College sports could do the same. The reality is, aside from things like Bowl Week, ESPN features a lot of Skip Bayless sitting in a studio and wasting oxygen, or merely functioning as a delivery boy for content. Aside from 30 for 30 and a couple other programs, ESPN only has value because it has contracts to broadast other peoples performances.
If some leagues opt to move away from ESPN and over to homegrown solutions (ex: NHL Gamecenter), ESPN becomes worthless.
January 2nd, 2013 at 11:48 AM ^
I think there are still cross promotional synergies to dealing with ESPN if you can cut a fair deal with them.
You saw what they can do when they lowballed the NHL offer and it went to Versus/NBC. Virtually no hockey highlights/coverage on sportscenter or otherwise, other than Barry Melrose (probably because he's got a big ESPN contract or something).