Article about cable and web based content.

[RRK_1]

I thought this was an interesting article.  I thought it relates to the new distribution rights that ATT was asking for in the Scripps deal.  It seems like U-verse isn't experiencing the effects of web based content yet, but I think that there is a true paradigm shift in the making.  Personally I am a big proponent of this type of change.

http://www.ft.com/cms/s/0/a3986a1c-f28c-11df-a2f3-00144feab49a.html#axzz15aTP00bq

Viewers pull plug on US cable television

By Matthew Garrahan in Los Angeles

Published: November 17 2010 21:31 | Last updated: November 17 2010 21:31

The number of people subscribing to US cable television services has suffered its biggest decline in 30 years as younger, tech-savvy viewers lead an exodus to web-based operations, such as Hulu and Netflix.

The total number of subscribers to TV services provided by cable, satellite and telco operators fell by 119,000 in the third quarter, compared with a gain of 346,000 in the third quarter of 2009, according to SNL Kagan, a research company.

Although television services offered by telecoms and satellite providers added subscribers over the period, cable operators were hard hit, with subscriber numbers falling by 741,000 – the largest decline in 30 years.

The figures suggest that “cord-cutting” – one of the pay-television industry’s biggest fears – is becoming a reality as viewers drift to web-based platforms.

Online TV services are stepping up their efforts to reach new viewers and become profitable: Hulu, which is owned by News Corp, Walt Disney and NBC Universal, has slashed the cost of its online subscription service by 20 per cent to $7.99 per month and offers a vast array of film and TV programming.

Jason Kilar, Hulu’s chief executive, has maintained that Hulu, which is exploring an initial public offering, complements pay-television services.

Yet the data suggest that the growth of Hulu and Netflix, the DVD subscription company which began testing a $7.99 per month streaming-only service last month, has become problematic for cable operators.

Ian Olgeirson, senior analyst at SNL Kagan, said it was becoming “increasingly difficult” to dismiss the impact of web-based services on the pay-TV industry, “particularly after seeing declines during the period of the year that tends to produce the largest subscriber gains due to seasonal shifts back to television viewing and subscription packages”.

Hulu’s revenues are increasing sharply: the company is projected to generate more than $240m in 2010, up from $108m in 2009. It has extended the number of devices that can access its subscription service to include Sony’s PlayStation 3 console and will add internet-connected devices, including Vizio, LG Electronics and Panasonic Blu-ray players, in the next few months.

Devices such as Apple’s iPad also appear to be accelerating the move away from traditional multichannel television.

Research from The Diffusion Group, a technology research company, found that more than a third of iPad users were likely to cancel their pay-TV subscriptions in the next six months.

The cable industry has launched a vigorous defence against cord-cutting: companies such as Comcast, which has agreed to buy NBC Universal, are backing “TV Everywhere”, which gives subscribers access to channels and programming online, and via their cable box.

[larry11]

Very interesting. This is one reason that Comcast is trying to get NBC(part owner of Hulu).

[spd2demun ACE - Expert]

When will govt. discover that Comcrap and others are a monopoly in the TV business?  How is it not anti-trust?

I can assure you if ATT owned channels, they'd be all over them in a minute (with Comcrap being the one to file the first complaint).   Or did that already happen with TCI?

[oufanindallas]

I'm sorry, regardless of my internet speed, quality of online programming is no where near as good as what I have.  While I do occasionally watch shows I've missed online, it's not the same. I don't have my computer hooked up to a 42" tv and it's not in HD.

[RRK_1]

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oufanindallas wrote:

I'm sorry, regardless of my internet speed, quality of online programming is no where near as good as what I have.  While I do occasionally watch shows I've missed online, it's not the same. I don't have my computer hooked up to a 42" tv and it's not in HD.

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They definetly need to get these services onto the TV rather then the computer screen but that is already happening.  My family watches King of the Hill everyday on Netflix via the Wii and the PQ is pretty excelent but  am aware that the Wii doesn't really do HD.  Its really just a matter of what quality they want to distribute in.  Actually I'd bet you would start seeing some ultra high quality special episodes over these web services.

[dhascall ACE - Master]

#1 - Cable is experiencing a huge decline because of the economy.  I see more people asking questions about ATSC tuners, antennas, DVD-Recorders and DIY DVR's than before the economy turned bad two years ago.

#2 I do agree that cable (Dish, IPTV too) has to be losing some viewers based upon Hulu, Roku and so on.  This may be where people will be able to get ala carte channels from, instead of "cable," at some point.   There was a lady who transferred to my building from another town because originally her office there was closing.  She moved here but kept her options open to return to her hometown if they stayed open after all.  She took a short term lease at an apartment complex and had NO TV service - cable, dish or OTA.  Her complex provided HSI access.  She watched all of "her shows" via Hulu or the individual networks.  She did that for 6-7 months before moving back.

[RRK_1]

For me definitely live sports will be keeping me with cable for the foreseeable future, and also there is still not enough content available yet.  I also don't want to have to wrangle more then one system for my dvr.  Also need live news and locals... etc.

I do think we are getting relatively close.  ESPN being affiliated with Disney is a good thing, I think, in terms of being open to new types of distribution.  I think my kid (soon to be kids) would be more then happy if we could get Disney/PBS content.  Seems like there is not a lot of the documentary styled programming available which we would need and for our reality show we would need some sort of simultaneous release so we don't learn about what happened before we get to see it.

Lots of things will need to happen before something like this is going to get me to switch.  Being an iPhone user I can imagine a system that has no DVR but series by series subscriptions iTunes store style and subscription apps for live things like ESPN or Big Ten or CNN.  All with modern targeted advertising.  Or maybe you could get a Scripps app and the subscription could be like the price of two series per month.  I wonder what the total amount scripps is paid and divide that by viewership to try to figure what each actual viewer would need to pay to equal their current compensation.  I don't have a grip on the numbers but you gotta think that the content providers could be compensated to the same degree that they are now for less money then we pay now if you remove the operating costs and profit of the middleman cable company.  This also would probably require a shift in the advertising industry but that is also underway since Google is basically a modern ad company.