Tag Archives: Hulu

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.

 

CUSTOMER DISSERVICE: Can cable hold off the demand for a la carte?

Don’t look now but your cable television bundle is breaking your bank. That sizable bill that tips the scales at or around $200 seems like the status quo when it comes to cable television, phone and internet service through your local provider. Sure, some companies will give you a decent promotional deal if you start new service or switch, for example, from Comcast to Verizon FIOS or vice versa. Beyond that initial special buy or introductory offer, the cable industry is loving life, and some would argue at your expense. Literally.

The slow and steady rise of alternative methods of television from the likes of streaming services like Netflix, Hulu and specialized programming from the WWE Network or Major League Baseball haven’t usurped cable’s stranglehold on the communications and entertainment industry, but it has given customers a reason to start rethinking how they spend their money on cable TV and internet. The savvier and less complacent crowd isn’t afraid to start shopping around and mixing and matching services, like perhaps going bare bones with cable, adding internet and then buying the $8 per month Netflix as a means to enjoy movies. The consumer is starting to realize that with great buying power comes great responsibility to their own bank account. In short, they’re slowing starting to ask cable to listen to their demands.

Perhaps the most common discussion from customer to cable is the need to break up these bothersome bundles and start selling television the way a vendor sells hot dogs: one at a time. Realistically, the cable industry would likely lose way too much money to start giving customers free reign over how they buy. That doesn’t mean the consumers who are asking for this can’t dream, right? It would be quite the welcoming change of pace if the average customer would tell their cable company that all they really watch is network television, and throw in an ESPN and USA Network, and a little Lifetime for the wife and Nickelodeon for the kids. Any chance you’ll see the cable a la carte system? This probably won’t happen in our lifetime, but the mounting pressure from satellite and streaming services might expedite this process.

Truthfully, cable needs to broaden their thought process and think about how consumers ultimately would buy channels if they could pick and choose at their convenience. Who knows, maybe if cable simply offered paying per channel as an option, consumers might be so overjoyed they’ll end up buying just as much, or more, than if they didn’t have this as a choice? That’s called giving customers what they want and them returning the favor in the form of loyalty to the product. Maybe if those same consumers look at cable through a different set of eyes, they’ll be more inclined to stay put or return as customers.

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.

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.

CONTRACT PLAYER: Consumers get wise when it comes to cable and satellite contracts

Customers have spoken, and Verizon FIOS is just the latest in the cable industry to listen.

Verizon FIOS recently announced plans to forgo its standard two year contract plans for consumers in favor of a pay as you go type business model, similar to that of Comcast.

FIOS did, however, put a deadline on this deal, before April 14, but the idea that the cable communications heavyweight not only considered but implemented a no contract plan shows just how drastically the combination of competition and customers voicing their likes and dislikes plays into business decisions.

Of course, FIOS isn’t totally through with their contractual plans, either. They still offer them and, like any good company with a competent marketing department, reward customers who go that route with some sort of bonus for signing on for the entire two years.

Any company, whether they’re as established and large of an entity as Verizon or Comcast, wants to ensure that their revenue stream will be consistent and able to be tracked. It’s doesn’t take a business pro to figure out that the two year agreement guarantees a company a certain amount of revenue. If you’re projecting one million customers over the course of two years at $79.99, you have a really good idea what your revenue stream is going to look like.

But industry climates change, and companies are forced to alter their business model to support what customers are clamoring for; in this instance, its cable, internet and phone from a company without being locked into a long term deal.

To FIOS’ credit, they afforded would be customers the opportunity to enjoy all that they can offer without a contract involved, while maintaining pricing integrity in the process. FIOS could have easily added an extra $10 or $20 per month to the month by month deal but chose to keep the pricing competitive.

A lot of that decision making from Verizon FIOS, Comcast or any of the other cable or satellite giants likely is driven by competition, along with other entertainment options such as Hulu and Netflix luring customers away with pricing that is less than $10 per month.

Obviously, Verizon FIOS can’t compete from a price point with those options, nor are they going to try. They’ll rely on their additional product features and services to maintain and earn more business. It also helps when they pay close attention to what their customers, and the potential ones, are saying.

PREMIUM EFFECT: Pay channels pacing cable and its desire to stay relevant

For anyone who believes cable and its reign as choice number one for customers who value their at home entertainment, the numbers don’t lie. Close to 90% off the general population still pays for cable television, a staggering figure that would suggest the online streaming community is doing great things but hasn’t quite achieved hall of fame status in their industry.

That being said, the balance of power may not have shifted but the groundswell of support for anything other than cable and satellite. Companies like Netflix and Hulu have committed to creating their own shows, and that has put an added pressure on cable to stay relevant in the face of stiffer competition. What exactly is keeping cable relevant?

Two words: premium channels. Actual television, more specifically what’s on TV, doesn’t do much to move the proverbial needle in a good way. Reality television is overblown, bloated and unrealistic. Talks shows, aside from a few, are pure nonsense, and game shows seem more formulaic than fun filled. You can get your news and sports online, and even your favorite basic cable TV shows seem to follow an uninspired pattern. And then, there’s the likes of HBO, Showtime and Starz. These premium television networks live up to their tag line and continue to produce flawless television in the vein of comedic prowess, dramatic acumen and storytelling that is second to none.

Programs like The Sopranos and Sex in the City started the ball rolling for HBO, and the award winning network hasn’t come up for air for the better part of 15 years. Since that time, Showtime and others have followed suit by pushing the envelope and keeping cable television relevant in the face of increased competition and consumers cutting cable to save money. You can’t get those remarkable and renowned premium channels as stand alone entities; you have to subscribe and pay for cable. And there in lies the genius behind it all.

Emmy nominations and winners notwithstanding, premium television has the benefit of not adhering to the rules of scriptwriting and pulls back the PG curtain to reveal a gritty, more realistic way of producing television, something that network TV can’t emulate and cable is only starting to realize with a few diamond in the rough shows like Sons of Anarchy, Justified and The Walking Dead. At the end of the viewing day, however, customers are keeping cable, and cable is staying cool thanks to what the programming that is being put forth by the premium channels.