Tag Archives: Cable

Time Warner Cable Mergers and Net Neutrality Expectations for Charter

Charter Communications and Time Warner Cable logos combined.

A little over two months ago a proposed merger between Comcast and Time Warner Cable (TWC) was called off. Almost no time passed before Charter Communications entered into an agreement to purchase TWC for roughly $57 billion. As the calendar turns to July, there remains a certain level of uncertainty surrounding the details of this proposed purchase, as well as how the FCC will respond to the bid.

 

Early after its announcement in 2014, the bid by Comcast to purchase TWC was considered a long shot. Claims from within the broadband community, consumer advocate groups, and the public all made it clear that they were concerned with the creation of what would have been the largest TV operator in the United States. Even the Chairman of the FCC, Tom Wheeler, expressed his opposition to the merger. Wheeler’s main point of contention, however, was that if the purchase were allowed to proceed, it would create an unfair competitive advantage for Comcast in the broadband market. In particular, the company would have enjoyed a controlling share of almost 60% among broadband providers. Ultimately it was this near monopoly, coupled with the lack of any penalty fee for ending the agreement, which caused Comcast to back out of the deal.

 

Drawing lessons from the failed deal between Comcast and TWC, Charter has begun to promote how its proposed purchase of TWC will not alter the television or broadband playing field on the national stage. The CEO of Charter, Tom Rutledge, has stressed that even if his company is successful in acquiring TWC and Bright House, the newly expanded company will still be only the second largest provider of cable and high speed internet services behind Comcast. At most, Charter would supply about 20% of all TV customers and 29% of all broadband customers. Another issue that Charter does not need to address is that unlike Comcast, which has a financial interest in Hulu, there is no concern that Charter may regulate speeds for video streaming services, such as Netflix or Amazon Prime.

 

Charter is also drawing on the FCC ruling which made broadband a Title II utility as a reason for why its proposed merger should be approved. Rutledge made clear that the footprint of the expanded company would not overlap geographically and that there would remain competition for broadband services offering 25 Mbps in all of its coverage areas. Additionally, he stated that since the majority of the company’s investment is in broadband, not television, it would encourage the expansion of Over the Top (OTT) streaming video services and not impose any sort of data cap on customers. Indeed, subscribers with the new Charter, if the merger is approved, could see significant savings on their broadband subscriptions as their speeds are tripled while their monthly bill is lowered.

 

While the merger works its way through regulatory checks, industry analysts appear confident that the deal will occur. The latest suggestions are that there is a 75% chance that the deal is approved. The FCC has announced that they hope to have this process decided, in favor or opposition of the merger, by the end of 2015.

 

FCC Reclassification, Broadband Access, and OTT: Does it Mean Anything?

Collection of rainbow-colored internet cables

One of the biggest hassles that people experience when they move is finding new cable and internet providers. While there are a bevy of cable packages to choose from, the options for broadband providers are not always as plentiful. With the recent FCC decision to reclassify broadband as a Title II utility, coupled with its change in what constitutes broadband, services with speeds of 25 Mbps or higher, the process of selecting a provider by a new homeowner has gotten even harder. The issue at hand is that for the vast majority of American households, there is only one, if any, Internet Service Provider (ISP) that can supply true broadband. The latest statistics are that 19.7% of American households do not have access to an ISP offering the 25 Mbps speed, while 54.3% have access to only one such ISP.

 

While the broadband provider issue appears to be changing with the development and expansion of fiber networks throughout the country, Roger Lynch, CEO of Sling TV, is stressing that consumers may see an increased strain on their finances as they purchase internet access. In particular, Lynch believes that those consumers who are broadband-only subscribers, the type who thrive in the expanding Over the Top (OTT) ecosystem of Netflix, Amazon Prime, and Hulu Plus, will feel the pinch as cable companies attempt to offset their loss of TV subscribers by raising the price on single-use consumers. While OTT-only dwellings remain a small part overall, the percentage is growing and has now reached 10.5 million households, up over 15% from 2012. This expansion is occurring at the same time that pay TV subscriptions have declined over 0.5% since the start of 2015, the largest decline ever recorded.

 

Although Lynch’s claims must be taken with a grain of salt, considering that Sling TV is a subsidiary of Dish Network and a competitor to the cable companies, there is no denying that the new OTT offering is seeing early growth. Since its February 2015 launch, the $20 per month service has expanded to over 250,000 customers. While this is a fine showing, it is not a surprise to industry analysts who predicted a fast start but see Sling TV’s subscription numbers slowing down quickly. With its focus on offering smaller channel bundles and the option to add other thematic bundles for an additional cost per month, Sling is trying to develop its own niche, no doubt assisted by the existing relationships that Dish Network enjoys with broadcasters. However, Sling’s sustained growth, especially from those consumers interested in a variety of sports offerings, of which the OTT service has limited access, remains the question.

 

Ultimately, all of the talk about falling pay TV customer totals, increasing costs for broadband-only subscribers, and the increase of OTT offerings means that consumers need to be aware of what services are available in their area before they sign a lease or close on a home.

Video Streaming Services Cut into Cable Subscriptions

Hulu Plus and Netflix logos

The way that consumers watch television and movies is changing. For the last few years attention has focused on the members of the ‘cord cutting generation’ who do not want to pay for cable television service. To fill in this void there have been two major developments: Subscription Video on Demand (SVOD) services, like Netflix and Amazon Prime, and Advertising Video on Demand (AVOD) services, like Hulu. Although these are the services most people are familiar with, there are other providers in the ever-growing Over The Top (OTT) service industry. Recent statistics related to this burgeoning industry suggest that cable companies need to act quickly and change the way they present their future content if they want to remain viable in the face of OTT competition.

 

Cable providers have looked cautiously at the latest  quarterly earnings release for the industry which the Leichtman Research firm says provides no concrete evidence that consumers are preparing to switch over completely to OTT and leave behind pay TV. However,  other experts claim that these findings undervalue the record low customer growth of only 10,000 across all the major cable companies. Parks Associates, another research firm, believes it has evidence that cord cutting has reached a new level. The latest estimates are that around 7 percent of American households, approximately 8.5 million homes, have high speed internet and OTT services, yet they are not subscribed to a pay TV service. With this number set to increase there is little wonder that upwards of 84% of all internet usage in the United States by 2019 will involve video streaming. Further supporting the belief that cord cutting is a growing trend, Limelight found in a recent survey that over 50% of the 1220 people they interviewed were willing to go completely OTT and cancel their cable subscriptions.

 

It comes as no surprise in light of all of these recent polls and studies that cable providers are attempting to find new ways to engage with this cord cutting generation. Although TV Everywhere systems have been developing for the last half decade, new providers are throwing their hats into the ring, including Sky, Rogers Communication, and Dish Network. The hope of these companies is that they will be able to tap into the OTT market while recent changes in local regulatory practices will allow them to lure some consumers back to traditional cable packages. With less overview necessitating uniform programming packages in the same geographic region, it is possible that cable providers will create even smaller, more focused packages to convince people to not cut the cord. In the meantime, it is a prime market for consumers to shop around and determine what channels and programs are most important to them, whether or not they need a cable subscription, and if they can go fully OTT.

 

FCC removes local regulation rules

FCC logo

While the much-discussed March 2015 decision by the FCC upheld the idea of Net Neutrality, there is a change taking place at the local level that cable providers are hailing as a victory for streamlining the distribution of content to their customers. For the last twenty-two years, local, city, and state committees have possessed oversight of the basic programming packages provided by the cable companies. Now, after a unanimous 5-0 ruling by the FCC to remove this restriction, the providers will be able to determine all the details of their programming packages without having to receive the approval of local authorities.

 

Up until now, the oversight provided by the local committees as part of the 1992 Cable Television Consumer Protection and Competition Act not only dictated which channels could not be excluded from the basic programming packages, but also how much those packages could cost. The new FCC ruling determined that the regulation was no longer necessary because of changes in the market that have created an elevated level of competition for the cable providers, in particular through the expanding footprint of services provided by companies like DirecTV and Dish. Another factor in the FCC’s decision was that since 2013, 220 of 224 requests for exemption from local rate-setting restrictions were approved. With such a high success rate for receiving exemptions, the FCC believes that it is simply removing an unnecessary level of red tape.

 

Cable providers state that with the removal of uniform package requirements, they will be able to present consumers with a variety of service and channel packages, ultimately providing more choices for service packages that don’t include the higher cost premium channels. At the same time the cable providers have cheered the latest FCC decision, broadcasters have been critical of the claims that satellite companies provide reliable enough competition to all parts of the United States to justify this victory for the cable providers. As a result of this rule change, and contrary to the cable companies’ claims, there is a fear among broadcasters that basic TV station signals will now be placed in costly service tiers, ultimately lowering the viewership of local programming.

 

The concern over the FCC ruling is not confined to just local regions, but also the halls of power in Washington D.C. A representative for the National Association of Broadcasters remains perplexed why the one defense available to safeguard consumers from skyrocketing prices has been removed so easily. Furthermore, members of Congress have questioned the FCC’s ruling, stating that this decision will result in increased prices and fewer channel choices for residents in rural and remote areas.

FCC Chairman Tom Wheeler Expects To Be Sued Regardless of Net Neutrality Decision

The Federal Communications Commission (FCC) has expressed clear desire to create its own net neutrality plan, outside the realm of President Obama or telecom’s own plans.

Even though nothing is set in stone, it looks like Tom Wheeler is nearing towards a more stronger set of rules against broadband companies, but they might not fall under Title II common carrier reclassification.

In a new announcement on Friday, Tom Wheeler said that no matter the decision the FCC make, the telecoms will still sue the FCC. This came after reports said Wheeler was scared of fighting the telecom, due to lawsuits.

The FCC is certainly trying to keep the peace by making the net neutrality debate about helping both parties. The only issue is neither wants to meet in the middle, especially if it means the telecoms can still get away with anti-consumer practices.

Plenty have already called for Wheeler to resign, after his failures in sorting out net neutrality and the various mergers, even before the final decision has been made on these issues.

The next six months will be crucial for the FCC and the future of the Internet. Decisions on mergers between AT&T, DirecTV and Comcast, Time Warner Cable loom over the cable and wireless industries.

Net neutrality laws in the U.S. could change for better or worse, depending on how the FCC handles the issue. It might get even harder for the FCC to push anti-telecom issues with a Republican Congress set to rule in 2015.

Whatever the case, Tom Wheeler is either siding with the telecoms or the public, 81 percent of which want stronger net neutrality laws and 72 percent do not want Comcast and Time Warner Cable to merge.

HBO jumping off the cable bandwagon in favor of broadband-only service in 2015

HBO, creators of Game of Thrones, are looking to expand their horizons with a new broadband-only service, coming in 2015.

The service, set to be a stand-alone over-the-top service, will offer all of HBOs present and past shows, for a monthly fee. The fee has not been disclosed and CEO of HBO Richard Plepler did not reveal anything about the service, citing proprietary secrets.

This is the biggest U.S. network to step out of the cable-only route, citing the 10 million broadband-only homes in the U.S. as a big opportunity for expansion – somewhere they have not tackled yet.

It also comes in the wake of the highest piracy rates ever for Game of Thrones, HBO’s blockbuster TV show. Currently, fans of the show have no choice but to download it illegally on torrents, or wait for months before it becomes available.

In an age where the show can be spoilt within a few days, it is not good enough. Plepler believes the new streaming service will be able to create million in revenue for HBO, who are owned by Time Warner Cable.

HBO has a streaming service already, HBO Go – but this requires a cable connection. The service has still received heavy use when Game of Thrones and other hit-shows air.

The Split From Cable

It looks like not just HBO are looking to split from cable. Today, CBS networks also announced they would offer a streaming platform for $5.99 per month, cheaper than Netflix.

CBS All Access will offer over 5,000 shows, including The Big Bang Theory and Star Trek. This is obviously a bigger collection than HBO, even if HBO’s show are more current and popular right now.

We expect this is not the only move away from cable to happen in the next month – with more networks looking to maximize profits in the U.S. and overseas.

COMPETITIVE SPIRIT: Why marketing battles between cable and satellite make for happier customers

As a consumer, you’re probably just fine watching from the sidelines while the cable, satellite and streaming entertainment services duke it out for the almighty dollar. Some customers would argue that the battle between these entities is more enjoyable than the actual programming that they’re offering.

Between television ads touting more channels and faster internet to celebrity spokespeople using their stardom and fame to tell you how to choose the best provider, the battle lines haven’t just been drawn between all these companies. They’re carved into our psyches. Who hasn’t found themselves ironically watching television from their current provider, only to see flashes of offers from the likes of Direct TV, Verizon FIOS or Comcast, telling you how wonderful their DVR service is now or that the NFL Direct Ticket, in the case of Direct TV for now, is included with a paid subscription?

Cable and satellite companies consistently battle for exclusive rights to programming or special events in the hopes that one extra channel or a contract for a few extra NBA or MLB games might garner a few more eyes on their service. The marketing rhetoric aside, the tooth and nail nudging between all parties involved proves to be equal parts entertaining and beneficial for the consumer.

Any time competition begins to run rampant, the customer always wins. Look no further than the notion of locking potential new customers into a long term contract or offering a low introductory rate on a monthly service only to watch it variably change over that same term. These types of business practices hardly would be considered the norm these days, as most of the major players tout no contract plans as commonplace. Even without locking you into a long term deal of sorts, cable and satellite companies continually try to outperform one another by “locking in” a rate that you’re happy with for some sort of time period, typically one or two years. So not only are you not signing up for a contract, but you’re saving money as if you did.

That competitive spirit sparked even further as the streaming services such as Netflix and Hulu, among others, entered into the fray and only added to the competitive spirit by adding a lower cost alternative that piqued the interest of those customers who want to spend the least yet still receive the most. And who do you have to thank for this windfall of good fortune when it comes to your satellite, cable or streaming selections? Competition, of course.

Netflix Factor: How the low cost streaming model has cable cowering

Traditional cable television, say hello to the new kid on the block. Online streaming services like Netflix and Hulu have traditional cable television and satellite providers contemplating their next movie, asking how they can continue charging $100 a month for their services when the aforementioned players check in for less than $10.

Cable television and satellite try to stay ahead of the curve by bundling services, offering internet and phone in conjunction with all your favorite channels. The lightning fast internet provided by the likes of Comcast and Verizon FIOS keep customers at bay and content to stay put, at least until that promotional period runs its course. Then, that $79.99 bundle that lasted for 12 glorious months has skyrocketed to $200 or more. That’s when those tired and frustrated cable TV customers start looking for a viable option to their three digit bill. Enter Netflix or Hulu. These streaming sensations feature plenty of first rate entertainment in the form of sitcoms and movies, a more than decent array of titles for a pretty penny. Of course, you won’t be getting the newest releases in most cases, but that’s what Redbox, another entity that is cutting into the stranglehold previously held by cable TV, is for.

Netflix raised its game recently by beginning its forage into first run, original shows. That move blurs the lines between being a streaming service and a rogue television provider without a country. Think of Netflix as the Notre Dame of entertainment; independent and playing by their own rules. And those rules aren’t about to conform to a cable only sector again any time soon.

Take a look at the latest television model put forth by World Wrestling Entertainment, the professional wrestling and entertainment juggernaut that scores four million viewers each week with its television programming. They’re launching their own “network,” but not within the confines of a cable provider. Rather, they’re streaming all of their back events, shows and matches straight to a tablet, phone or laptop near you. If this idea takes flight, who is to say more won’t try it. Who is to say, however, that the playing field or sandbox isn’t big enough for everyone?

Combining the likes of Netflix and cable could be the best of both worlds: saving money and having the entertainment you want at your beckon call. Between the aforementioned cable internet service and the movies and TV touted by Netflix, you can keep your communications bill under $100 and still engage in enough pop culture to stay relevant.

Kudos to Netflix for nabbing more than just a small spot under the entertainment spotlight but rather carving out a nifty niche in an ultra-competitive industry. They’ve grown considerably in recent years but probably won’t dethrone giants like Comcast and Verizon any time soon. But Netflix will, in fact, keep those cable communications companies on the tip of their toes.

POWER BUTTON: When it comes to cable or dish, you call the shots

Do you think you could live without your cable or satellite television? In this day and age, it seems the question should be flip flopped: Can cable and satellite dishes live without you?

It’s no big secret that the cable and satellite sector is somewhat concerned for their business profile. Cable and satellite dishes once ruled the world when it came to how you watched your favorite weekly shows or engaged in a two hour movie, but their reign is waning thanks to the influx of alternatives when it comes to how you spend your entertainment dollar. Heavyweights like Comcast, Verizon FIOS and Direct TV probably aren’t going to posting an “out of business” sign on the door any time soon, but the arrival of streaming video has vaulted the likes of Netflix and Hulu into the discussion alongside cable and dish, thanks mostly to the cost effective business plans of both.

Both Netflix and Hulu check in at less than $10 per month, and cable or dish simply can’t win a price war. Cable relies on the now famous marketing campaign called the “bundle,” which allows consumers to package television, internet and phone into one triumphant, tantalizing low price, typically under the $100 mark. But the savvy sector of buyers aren’t necessarily saying so long to cable and dish, but rather incorporating the best of all parties involved.

Killing cable completely or uprooting your satellite dish doesn’t have to be your end game, but rather keeping only the essentials from each entity. Maybe you only want local channels from cable, along with the internet, and you’ll leave Netflix as your first choice for films. And with Netflix, you can catch up on all television series that you may have missed. The bonus with Netflix is that they’ve also dipped their toe in the water with their own first run television shows to rave reviews. As far as dish, you can always opt for the less expensive package and build your own entertainment bundle from there.

If you have cable or dish, you probably tell yourself on a daily basis that you only watch a few channels out of the hundred or so that are offered. That might be the first inkling that it’s time to tackle cable, satellite or streaming services from a different, more streamlined angle. Not only can you carefully craft the perfect mélange of media but you’ll ultimately cut your bill in half. And the cable and satellite companies are just going to have to live with that decision, and whatever incarnation of their services you eventually opt to choose.

(NOT) CUTTING THE CORD: Think twice before saying so long to cable

Cable and satellite TV tends to get a bad rap. Monthly bills that are already high and tend to get bigger with every year, coupled with some companies even locking customers into long standing contracts, has cable and satellite struggling with their images.

The arrival of streaming, internet driven entertainment like Netflix, Hulu and other low cost alternatives isn’t doing the cable industry any favors, either. In fact, you could argue that the cable and satellite companies are fretting, at least a little bit, that the wave of the future that is streaming media and television will eventually become the standard. That notion, along consumers constantly looking to save money and aiming that cost cutting at cable first and foremost, has many canceling the service without much consideration. But as easy as it sounds to simply call your cable company or satellite provider and cease your service, you might want to consider, research and totally understand all your options before you make that determination.

First and foremost, if you don’t really want to cancel your cable and enjoy the services provided by them or your satellite company, then it’s not out of the question to call and negotiate with them. Typically, if you’ve been a loyal, paying customer, your cable company might be able to find you another “promotion” to keep you happy and satisfied for at least the next six months to a year. You also want to make sure your post cable or satellite plans won’t interfere with your favorite shows or live television. Streaming services aren’t quite at the point where they can offer you live TV, but rather stockpile movies and television shows of previous years.

Most savvy satellite and cable customers have learned to share and share alike and simply have opted to have the best of both worlds: streaming and traditional entertainment. That would kill the two proverbial birds with one stone and allow you to have a modicum of channels from your cable company and still enjoy saving money with lower cost, streaming options.

No matter what route you opt for, simply cutting the cord with cable or satellite is both equal parts bold of a move but also, in hindsight, could conceivably create a situation where you no longer are plugged into the shows and programming you still desperately want. That’s not to suggest canceling cable service still won’t happen, but it won’t hurt to at least take a long, broader look at the entire scope of your decision before your knee jerk reaction has you kicking yourself after the fact.