Tag Archives: Netflix

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.


The Pirate Bay Shutdown Has No Effect On Torrenting

The Rights Alliance managed to get the Swedish government to cut The Pirate Bay’s server room power, but it looks like the raid has absolutely no effect on torrenting numbers.

On Dec. 8, torrenting numbers were at 101 million, on Dec. 9 (when The Pirate Bay shutdown) numbers dropped to 98 million, dropping ever further between Dec. 10 and Dec. 11 to 95 million, but on Dec. 12 hit over 100 million.

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Netflix Claims Broadcast TV Will Be Dead By 2030

Netflix CEO Reed Hastings has been visiting various events in Latin America, revealed 5 million subscribers come from the region and it is one of the fastest developing markets for Netflix.

On his trip, Hastings has given a good numbers of figures to suggest Netflix’s growth is not diminishing. The global total for subscribers has hit 53 million, with over 30 million in the U.S. alone.

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FCC Delays Net Neutrality Ruling Until 2015

After U.S. President Barack Obama announced his support for net neutrality and called for the FCC to implement Title II reclassification of both broadband and wireless companies, the FCC has decided to delay the ruling until 2015.

This is not the first delay to the FCC net neutrality ruling, the first coming after the overwhelming response of U.S. citizens to the proposed bill put forward by the FCC, allowing fast-lanes and other anti-consumer plans to go forward.

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Rupert Murdoch Wants Media Giants To Create Netflix Competitor

Rupert Murdoch appeared on the WSJ.D conference earlier this week, with a host of other guests from the technology and business world.

One of the biggest things Murdoch said was the need for a Netflix competitor. He said media giants should work together to create this competitor, to stop Netflix from growing to the point where it has more influence than cable networks.

Cable networks are already feeling the sting of Netflix, with around 40 million subscribers, it has already surpassed one of the most popular paid cable TV broadcasters, HBO, in monthly subscribers.

Netflix Competitor


Hulu Plus has been the streaming service most programmers backed, until it started to fail against Netflix. Comcast, Fox and Disney all had 33 percent share in the streaming provider, but have been actively looking for a buyer for months.

Rupert Murdoch might claim the cable industry needs a Netflix competitor, but to compete against Netflix they need a service which actually provides quality content, not washed up shows from the three companies.

In order to do that, the cable industry needs to cannibalize their own market. They need to give subscribers the option of either cable TV or Internet TV; similar to what HBO are willing to do with the new streaming service coming in 2015.

This might hurt the company in the short term, but imagine all of the great content coming on cable TV, on the Internet. The only problem would be making the Internet customers pay the same amount as regular cable TV buyers.

Al-a-carte systems might be put in place on cable in the new few years, lowering the price for customers – this might open more cable companies to Internet TV, but right now, it would hurt their own market too much to create a genuine competitor to Netflix.

HBO Streaming Service To Cost $15 Per Month

HBO announced a new streaming service would be coming to broadband-only customers in 2015 – but revealed little about how the service would operate or how much it would cost.

In a new report from The Information, it appears the streaming service will cost $15 per month. This would be the same as the cable-version of the service, and in the report it claims the price could go even higher than the regular cable-version.

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