In 2014 AT&T and DirecTV announced a merger worth almost $50 billion dollars. While this proposed deal would provide a new way for AT&T to expand its footprint, the process had been stuck in the approval phase for months, although after FCC Chairman Tom Wheeler recommended last week that the deal move ahead, industry experts now believe that it will be approved formally within ten days. It appears that the main sticking point had been ensuring that AT&T adheres to the new FCC rules pertaining to broadband speeds. While this impasse persisted, AT&T was forced to file for two extensions to close the deal, the most recent only a few weeks ago.
When the deal does receive final approval, it will make AT&T the largest TV provider in the nation and will give DirecTV customers access to broadband services. Two recent filings to the FCC detail parts of AT&T’s plan to address the Department of Justice’s concerns that the merger may create a TV and broadband monopoly. The first filling stipulates that lower and middle income families will have access to DSL services, if available, at discounted prices. Upon further review of the filling, however, there are major limitations on this provision. In particular, the program will continue for only four years and for the more remote locations, will only provide speeds of 1.5 Mbps, which is too slow to support streaming services like Hulu Plus or Netflix. This low speed option has caused experts to speculate this is a different tactic in video slowdown and wonder if AT&T will be in full compliance with the Net Neutrality ruling if they do not improve this aspect of their proposal. Prices for this service would range from $5 to $10 per month, while a higher tier with speeds up to 5 Mbps would cost $10 to $20 per month.
The second filing to the FCC also addresses coverage issues, but deals with fiber internet customers. As part of its proposed merger, AT&T has promised that it will extend its 1 Gbps fiber footprint to almost 12 million businesses and homes within the next four years. This announcement comes on the heels of one made in April 2015 that AT&T was looking at nearly 100 cities where they might roll out fiber service, including Chicago, San Francisco, and Atlanta. As mentioned in the new FCC filing, AT&T has now added a new focus on the state of Florida, in particular the cities of Miami and Fort Lauderdale. The company will draw on its recent successful expansion in the state of Texas, particularly around Dallas and Austin, to implement an efficiency plan to bring its GigaPower fiber service to the Sunshine State by the middle of 2016. Whether or not these efforts are enough to alleviate any lingering concerns still held by the Department of Justice should become clear by the middle of August 2015.
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.
Even if you consider professional wrestling, their characters and outlandish soap opera style stories a joke, their impact on cable and satellite in regard to the pay per view business is nothing to laugh about when you consider the revenue involved.
The average World Wrestling Entertainment pay per view is around $40, notwithstanding their yearly “Wrestlemania” offering which typically tips the scale at $70. The average “Wrestlemania” audience flirts with the one million buys mark, so that’s more than just a few dollars in the pockets of pay per view providers like Comcast, Direct TV and Dish Network.
The arrival of the WWE Network in February marked the beginning of the end for pay per views as relates to wrestling. The WWE Network costs fans $10, and they’ve already have close to 1 million subscribers in the United States. And here’s the catch that is infuriating cable and dish: the pay per view events held by WWE on a monthly basis are included in that $10 flat fee. It didn’t take long for Dish Network and Direct TV to recently drop WWE events and inform customers that they’ll no longer be carrying the company’s pay per views. This isn’t surprising given WWE and its newly devised network. For now, Comcast still is offering the events but that could change at a moment’s notice.
The WWE and its conclusion to collectively pull together their video library and create a network was a smart one. They’ll have complete control over the events and won’t have to shell out a percentage to the pay per view providers. It’s up to cable and satellite to start thinking about not only the WWE and its decision but also if other events like boxing or UFC decided to, at some point, follow suit. That might not be in the imminent future but if the WWE Network model works well enough, it’s not hard to imagine others at least contemplating a similar trajectory. That potential could put a bit of a squeeze on pay per view providers and start a trend headed in the wrong direction as far as losing money as more sports move toward a future that includes independently streaming their own marquee events.
You have to wonder if pay per view, on a larger scale above and beyond movies, has to start wondering just how bright their future is going to be. It’s too early to tell what pay per view might look like in the next decade but it’s hard to imagine it appearing exactly as it stands today.
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.
Something strange happens as September draws near when it comes to the competitive world of cable television and satellite. The weather starts to cool, leaves change and the millions of fans who adore the National Football League begin to cultivate a strategy for their upcoming Sunday afternoons with pinpoint accuracy and precision that is two fold: game watching schedules and fantasy football. Luckily for Direct TV, they now have both to offer.
Direct TV has had the luxury of owning the rights to Sunday NFL Ticket, and that marriage is one made in heaven for all parties involved. Sure, Direct TV pays a pretty hefty price but the return on the investment is ultimately what keeps the satellite television provider on the map. The NFL is a billion dollar business, and Direct TV knows that, which is why it pays a king’s ransom for rights to running every NFL game in every market that is available to consumers who opt to buy Direct TV and the NFL Sunday Ticket, if it isn’t already included in the package to lure customers away from their current provider.
This season, Direct TV is raising the bar and scores big with the addition of the NFL Sunday Ticket Player Tracker as part of the Direct TV Sunday NFL Ticket package. Furthermore, Direct TV isn’t charging any extra for this service.
The NFL Sunday Ticket Player Tracker allows subscribers to track up to nine players at one time, and the viewer will receive alerts on them while they’re watching the week’s games, no matter what channel you’re watching. If you like to flip around and watch multiple games, the updates follow you everywhere. Direct TV deserves high praise for its forward thinking and idea to incorporate fantasy football into its overall marketing plan with Sunday NFL Ticket.
Fantasy football hardly is a cult-like activity for the minority on Sundays but rather has morphed into an industry in and of itself. You’d be hard pressed to poll 10 NFL enthusiasts and not find at least half that are already coming up with their Week 1 lineup in July. Direct TV spotted that need and infused some amazing technology to meld a sure fire winner for Sundays this year. And the fact that the service is free is just the extra point on the touchdown the satellite provider already scored by ponying up the cash to have the rights to the NFL games as it is.
When that Sunday NFL Ticket contract comes up again, you’d better believe Direct TV is coming with the big numbers to fight off interest from other providers like Comcast or even Verizon FIOS. Given the success of the Sunday NFL Ticket as it relates to Direct TV, you wouldn’t expect anything less from their game plan.
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 mÃ©lange 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 only $35 or 40 cell phone activation charge has ever directly been linked to a consumer clinging to a credit score or filing for bankruptcy, but those who pay attention to those fees and aren’t afraid to question them certainly find themselves well ahead of the financial game. Between the cable company, your cell phone provider or just a neighborhood plumber or electrician, it seems every new device, upgrade or service call includes a fee that is dubbed anything from “activation” to “assessment.” What these companies, large or small, don’t take into consideration is the amount of competition that permeates through their respective industries. That negotiating caveat is the ultimate variable when it comes to moving forward on a new purchase or project, and saving money in the process.
Cell phones have a particular penchant for putting their so called activation charge on a new phone line, usually between $30-50. They may argue that these fees are set in stone, but that’s a promise they’ll willing to break if you play a little proverbial hard ball. That means telling them that you’re shopping around or you’ll simply take your business to another cell phone provider. Usually that’s enough incentive to get their attention so that the fee will be waived before you wave goodbye to their establishment.
The cable company usually doesn’t hit their customers with an activation fee in the same vein as cell phone providers do, but rather disguise theirs as a service fee or installation charge. This extra money coming directly out of your pocket can be circumvented in two ways: do the installation yourself or, once again, politely threaten that you’ll just call one of their competitors. Most cable related issues and installations don’t need an expert, and come complete with instructions that are remarkably easy to follow. If the thought of uploading or connecting so much as a cable cord is going to drive you crazy, then just tell Comcast, Verizon FIOS or any of the other communications companies that you’d appreciate the fee waived or you’ll be happy to call Direct TV.
Pitting these organizations against one another is no different than calling around department stores and price matching a purse. The goal is to save money, not necessarily make friends with sales associates, operators or companies. Truthfully, these extra fees account for millions of dollars in revenues for these companies but your monthly fees mean more to these corporations than a few dollars initially. Knowing that puts the consumer in control when it comes to having them eliminated and thus saving money in the process.
One billion dollars. That is the price tag the “NFL Sunday Ticket” was worth to Direct TV, which shelled out some serious cash to ensure rights to this lucrative football channel. The price tag might seem a bit hefty, but not if you consider two important facts: Direct TV is negotiating to renew its contract with the NFL, which is up after the 2014 season, and Verizon is flexing its cable television muscles to push past Direct TV to intercept the channel for its own benefit.
So far, Direct TV and the NFL Sunday Ticket haven’t convened successful and announced a new pact that would take their relationship well into the year 2020, and a lot of that has to do with the fact that Verizon and the NFL are already incredibly tight knit.
Verizon has big plans for the NFL Sunday Ticket, including potentially offering it to fans of the NFL who want to watch the channel streaming on their phones or tablets, rather than through the traditional medium of television. Feeling as though NFL Sunday Ticket is slipping through their fingers, Direct TV has been quoted numerous times that the satellite TV powerhouse would be willing to “share” the rights to the channel if the right person came to the negotiating table. And who is to say that Comcast, the largest cable communications organization in the world, won’t want a piece of this pigskin action?
All of this makes for interesting thoughts and conclusions, turning this dilemma into a soap opera that has fans wondering where their precious NFL Sunday Ticket will end up after next season. The smart money seems to be on Verizon, thanks in most part to the already strong and potent union it has with the NFL.
One hurdle the NFL and Verizon might have is if the cable heavyweight and football conglomerate decide to turn Sunday Ticket into a channel that only can be streamed, rather than how it is presented through Direct TV in a more traditional sense. You have to wonder if long time NFL fans would be comfortable and technological inclined to accept this change openly or if they’d be apt to grumble, grunt and complain about the format change. Of course, the great equalizer is the NFL in this entire equation.
The NFL is a billion dollar business and easily is the largest and most lucrative sport in the United States; they’re in the process of broadening the brand into Europe. The NFL fans and followers alike probably won’t be happy about NFL Sunday Ticket taking on a different shape, but they’ll undoubtedly conform given their love of the game and a desire to take in as much football as they can, regardless of how it is presented.
That overwhelming, monthly cable bill that might tip the scale at $200 or more is one bill that needs banished. Doing that is more difficult than you would believe, particularly if you have an affinity for all your favorite channels and lightning fast internet service you simply can’t part ways with at the moment. Still, justifying that kind of money every month is a tough sell, even if you can’t stop watching “Game of Thrones” on HBO or following your favorite team on one of the 10 sports channels you’re paying for every month.
Some of the more savvy subscribers know how to work the proverbial system and either pit the cable and satellite companies against one another or do a divide an conquer of sorts when it’s time to lower that bill. The latter plan includes taking the best of what each provider has to offer. For instance, Direct TV delivers a two year agreement for about $50 and that price includes the much lauded and coveted “NFL Sunday Direct Ticket,” which features every game, every Sunday. That package alone is worth the price of purchasing from Direct TV, especially those football fans in your family. Take that $50 price tag and add the internet speed of Comcast or Verizon FIOS for about $50-60 a month and suddenly your monthly cable bill looks a lot smaller and more manageable at about 50% of what you were paying.
If you are out to bring down the cable and television industry, you can always wage war against customer service personnel, more specifically the retention department within the walls of Comcast, Verizon or any of the satellite providers. How it works for those who have done it previously is simply calling your current provider and tell them you’re jumping ship to another company. Suddenly, that $200 monthly bill disappears and in its place is a “special promotion” they just happened to find and have available when you called. Coincidence. Probably not. It sounds more like the cable and satellite industry has a built in price buffer to insulate themselves from consumers wanting to cancel.
The more customers that realize the cable and satellite companies don’t want to lose any business already have a leg up on others who haven’t come to that realization. Accepting a high cable bill isn’t the norm any longer. Instead, it’s taking the time and indulging in the patience of putting together the right combination of phone calls and providers that works wonders for your budget.