Posted on 06/15/2011 1:05:37 PM PDT by abb
Ask Netflix about cord cutting, and it’ll tell you: “It’s not happening, it’s not anything we are causing, cable and Netflix are complementary.” Then take a look at the actions of service operators, cable networks, consumers and even Netflix itself, and you’re going to see a decidedly different picture: Cable and Netflix are competing for the same eyeballs, the same money and the same TV real estate, and the fight is getting tougher by the day.
Not convinced yet? Then consider this evidence:
Consumers are ready to jump ship. Netflix users that stream the company’s videos to connected devices are twice as likely to at least downgrade, if not outright cancel their cable TV subscription than they were just a year ago, according to a new study from The Diffusion Group (TDG). Thirty-two percent of these Netflix users are thinking about calling their cable company. “Despite its rhetorical positioning, both Netflix and Pay TV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing, but antithetical to Pay TV subscription levels,” said TDG’s Michael Greeson. In other words: In the long run, Netflix will inevitably lead to cord cutting.
Content licensing is getting more competitive. Netflix Chief Content Officer Ted Sarandos revealed recently that Netflix is now at the table for pretty much any TV licensing deal. So why aren’t Netflix customers buying more content? Because some of the networks simply don’t like to share. Netflix would prefer cheaper, non-exclusive licensing deals, which would make it possible to get more bang for its buck. However, HBO and increasingly Showtime are insisting on exclusive content to prevent subscribers from jumping ship.
Many observers thought Netflix wanted in on this game when the company bought the rights to its first-ever exclusive show House of Cards this spring. Sarandos, however, said that it was exactly the other way around: Netflix was getting concerned that it would get shut out of too many deals for attractive serialized content, which is increasingly going exclusively to programmers like HBO, so it saw itself forced to act.
Cable companies castrate their TiVos. A number of cable companies now offer their customers TiVo-branded DVRs that offer access to all kinds of additional online content. But TiVo users who buy their devices at retail will be able to watch videos from Netflix and Hulu Plus with these machines, while customers who rent the same DVR from their cable company won’t have access to these two services. The logic? Netflix could get people to ditch their premium channels and ignore cable VOD.
Netflix is dominating every screen. Network operators are trying to bring TV everywhere, but they often must feel like the hare racing the porcupine: Wherever they look, Netflix is already there. The company’s service is now available on more than 250 devices, and Netflix is getting more aggressive about dominating every single screen. The latest ploy is a dedicated Netflix button on your remote control, which puts it in direct competition with your cable guide. That raises the question: Do you want to browse through thousands of channels, or simply access Netflix?
Incumbents are putting a cap on it. If you’re a network operator, how do you keep your customers from canceling premium pay TV services to watch everything online? Canadian ISPs seem to think that bandwidth caps are the answer, and they’ve been enforcing strict data diets for years. ISPs that charge consumers up to $2.50 per GB once they exceed caps as little as 2 GB per month have been a real problem for Netflix north of the border, forcing the company to default to SD-quality streaming for all Canadian customers.
There’s been some movement with regards to bandwidth pricing in Canada in recent months, but the conditions are telling: Shaw recently introduced generous 1TB caps and even unlimited data plans, but those are reserved for customers who have a pay TV subscription as well. Bandwidth caps in the U.S. are generally higher, but not really that generous either, especially if you’re a heavy Netflix user.
If so, few words of advice after I pontificate right quick. I just ditched Dish a couple months ago as well in favor of exactly what you are planning. The first couple weeks are the usual twitches and re-adjustment. Following that, your house will become nice and QUIET. The whole place will settle down.
Now, on the dish front, DEMAND they send enough boxes for ALL the gear. Dish included. They just tried hammering me for $400.00 because I did not return their HD dish. THEIR letter stated nothing of the sort; only receiver and remote. They will send you a box for the receiver and remote plus a UPS pickup tag, but truly, it's not fit for shipping electronics, so take pictures on arrival of the shipping materials and upon sealing the box before shipping.
Now, this part made me laugh. They sent the shipping materials which took a couple weeks to arrive. They also turned my account over to a collections agency because they did not receive their electronics back. Mind you, the collections agency called me BEFORE the shipping materials arrived. As well, they tried squeezing in an extra month's payment from me because they "had not received their devices back". Be careful with them and document everything. It seems if you want to exit, they get a little testy.
Honestly, I'm never getting involved with any "provider" again. Especially Dish.
Netflix shows a lot of Christian and family friendly stuff that I didn't know existed. I have often wondered what TV would look like if people could pick what shows they get, and Netflix is showing us that. I predict that eventually this will be driving more family friendly movies and other programming since HBO and Comcast aren't making the decisions anymore.
I’m looking at AT&T. They’re offering high speed internet and phone for $41. That beats Comcast all hollow. I just have to have my son check the internet speed to make sure it isn’t too slow for Netflix.
I stuck a traditional antenna in the attic and connected it up to the house cable network. I now have 30+ local channels for free, 7 different hidef feeds. We don’t watch much broadcast scheduling but the local news and weather in HD looks spectacular! Total cost about $150 including antenna, cables, booster and connectors with the cost averaging less than $20/year since installation about 8 years ago.
A real bargain.
No, they do not.
And, there are no random pop-up lower border ads for the next scheduled show with animated figures distracting you, either.
—————This is what “net neutrality” is about.-—————
I understand the argument. The sales pitch for net neutrality is indeed a good one. One that I even supported initially, before the details surfaced.
The problem is the details. With few exceptions, at all levels the details don’t stack up.
When you look at what the FCC officials are saying, they don’t speak the tongue of a regulator which seeks to keep the markets in order. The FCC officials speak the tongue of a totalitarian.
Same thing with the FCC’s preferred advocates. Not innocent bystanders, but directly involved cohorts. Free Press. They are marxists. As are many of the people that the primary leaders of the FCC surround themselves with. Indeed, Obama’s Czar over at the FCC is mark lloyd, who loves Chavez.
The point is this. Net neutrality is sold as something pro freedom.
But the details point to something that is very anti freedom. All of what I’ve said is provable, and has been posted on free republic for anybody to see for themselves.
It’s also Netflix AND cable versus free download sites.
Last week three of the biggest free sites - loombo, frogmovs and another were shut down.
All the media is out there for someone to charge for, and no one will.
“Get Smart” isn’t available for pay on the internet or cable, but it is available free.
When we cancelled DirecTV, I asked about sending back the receiver/dish/remote. They said they belonged to us, but that we would get a pre-addressed envelope for the data cards (we had 2 receivers). Hasn’t come yet, but, I am sure it will. We also got a bill saying no payment due. I suspect they hope we will resubscribe.
Explain. I have fiber to the door for everything. I saw nothing but improvements after switching to FIOS years ago.
When we cancelled DirecTV, I asked about sending back the receiver/dish/remote. They said they belonged to us, but that we would get a pre-addressed envelope for the data cards (we had 2 receivers). Hasn’t come yet, but, I am sure it will. We also got a bill saying no payment due. I suspect they hope we will resubscribe.
———————He’s not used the term “universal service” yet, but he’s hitting all around it.——————
You must mean these two:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=152457
There is a reason why JG is the FCC chairman and not Clyburn or Copps. He is slicker than they are. They are too honest about the true intent of net neutrality.
The powers that be within Obama/admin and company don’t want people seeing the truth about internet regulatory schemes until it’s too late.
I’m loving Netflix. The movie “The Vanishing on 7th street” is on instant tomorrow, “The Tourist” will be on instant July 7th, and they have all the spisodes of Veronica mars, buffy, Angel, sons of anarchy and melrose place (my guilty pleasure) on there. I really like it.
“EVERYONE WITH AN INTERNET CONNECTION WILL PAY FOR YOUR DAMN NETFLIX!!!!!!!”
“I don’t use Netflix. I don’t plan on using Netflix and I don’t feel I should have to pay for your Netflix.”
Do you work in the industry? I ask because I think that is a red herring. The wholesale cost of data is minimal. The real fight is to keep up the retail cost of data. Replacing $120/mo data with $9/mo data is a real threat to the industry. The cost of actually sending that data is inconsequential in comparison.
I can see you being upset enough to find the cap lock key if your living depends on people buying that $120 package.
http://en.wikipedia.org/wiki/Universal_service
The concept of universal service appears to have originated with Rowland Hill and the Uniform Penny Post which he introduced in the United Kingdom in 1837. Though Hill never used the term “universal service”, his postal system had the hallmarks of early universal service; postal rates were reduced to uniform rates throughout the nation which were affordable to most Britons, enabled by the postage stamp (first introduced here) and a General Post Office monopoly on mail. Hill’s reforms were quickly adopted by postal authorities worldwide, including the United States Post Office Department (now the United States Postal Service) which already held a monopoly through the Private Express Statutes. The service obligations of USPS under current law are commonly referred to as the “universal service obligation” or “USO”. Universal service is also a key objective of the Universal Postal Union.[2]
http://en.wikipedia.org/wiki/Uniform_Penny_Post
The Uniform Penny Post was a component of the comprehensive reform of the Royal Mail, the UK’s official postal service, that took place in the 19th century. The reforms were a government initiative to eradicate the abuse and corruption of the existing service. Under the reforms, the postal service became a government monopoly, but it also became more accessible to the British population at large through setting a charge of one penny for carriage and delivery between any two places in the United Kingdom of Great Britain and Ireland irrespective of distance.[1][2][3]
Fiber to the door, for those lucky enough to have it available, usually does grant a quantum boost in quality. The appropriate comparison for most customers is with DSL, and either one compared to cable companies’ internet service depends on the router infrastructure. Cable companies claim to beat the pants off of DSL but that’s best-case. When all your cable neighbors are downloading, there’s a bottleneck at the router serving them all.
DVR’s are going the way of the dodo. I’ve had one since the early Tivo, and my current DVRS get almost zero use. Why should I spend the time to record a show to watch later, when I can watch it on demand any time after it’s premier and save myself a step? I use my cable subscription in almost exactly the same manner as I use Netflix. The only thing that’s truly different is the color of the menu.
Cable companies did this to themselves. They fought against ala cart programming tooth and nail.
We cut cable because we don’t want to have to have 5 MTV’s, BET, 3 Disney’s, 15 home shopping channels, and whatever else they will force down our throats.
We don’t like blocking the channels, because it became a pain in the arse. When flipping channels, it would stop on blocked channels for 7-10 seconds. Plus, why pay for all the commercials?
If cable would end the packaging, and offer ala cart, I would pay for 1 or 2 channels at $5 a month per channel. But they know MTV, Oxygen (or the new Oprah channel) and the other crap channels would go out of business, no one is going to pay for the privileged of their kids watching MTV or Disney (both equally responsible for the horrible erosion of our society, imo).
If cable wants to survive, they will have to go to ala-cart, offer better programming, and cut back on commercials. In other words... slim down and cut the fat like every business in the world has to do.
Even their pay-per-view or “on demand”, why would I pay $5 to watch a movie instantly on cable, when I can pay $9 a month to Netflix and watch 3,000 movies on demand if I want to?
If cable companies continue to interrupt and limit streaming video, like some are, they will put themselves completely out of business, as someone will come along, maybe even Netflix, and offer Netflix plus broadband internet for a reasonable price.
Let free market dictate the winning and losing cable channels, stop bundling 150 channels of crud with 2 channels that are worthwhile.
Oh, and what’s behind a DSLAM is usually fiber.
——————God forbid the ISP has to build out its infrastructure more to accommodate the information the ISP’s paying customers request.-—————
These people are as dirty as h*#l.
Isn’t something like 90% of the nation’s fiber still dark?(left unused, unlit)
(I forget the proper lingo)
Now think back in early American history, before the Revolutionary war. Even though there was a postal system, the Founding Fathers could not trust it to convey their correspondence. They used their own trusted couriers to stay connected.
THAT’S WHY universal service is so dangerous.
http://en.wikipedia.org/wiki/Committee_of_correspondence
The Committees of Correspondence were shadow governments organized by the Patriot leaders of the Thirteen Colonies on the eve of American Revolution. They coordinated responses to Britain and shared their plans; by 1773 they had emerged as shadow governments, superseding the colonial legislature and royal officials.
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