Recently on Videonuze
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VideoNuze Podcast #181 - Xbox One's TV Integration Comes Up Short
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Study Shows Short-Form and Syndication Are Critical for Video Ad Growth
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Xbox One: Very Pretty Face, But No Fundamental TV Disruption
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Tipping Point? Q1 '13 Broadband Subscriber Growth Was 6x Bigger Than Pay-TV's
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VideoHub Gets MRC Accreditation for Video Viewability and Other Metrics
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LAST DAY for Early Bird Discount - June 4th Video Ad Summit
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VideoNuze Podcast #180 - Does Live Streaming TV Make Sense?
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Turns Out Most "Mobile Video" Experiences Actually Happen at Home
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Multiscreen Live Linear - Consumer Values and Perceptions
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Live Streaming Gets Another Boost As Brightcove Rolls Out New Live Module
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Analysis for 'Telcos'
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Tipping Point? Q1 '13 Broadband Subscriber Growth Was 6x Bigger Than Pay-TV's
New industry data compiled by Leichtman Research Group shows that broadband ISPs that account for 93% of the U.S. market added over 1.1 million subscribers in Q1 '13, nearly 6 times the 194K pay-TV subscribers that were added in the period by pay-TV operators that account for 94% of the market.
Broadband subscriber additions have outstripped pay-TV's for years, but the 6x ratio is more than double the average of 2.8x from the prior 2 years. The 194K pay-TV additions in Q1 were down 56% vs. the 445K added in Q1 '12, while the 1.1M broadband additions were off 15% from the 1.3M in each of the prior 2 years.
On the surface the data suggests that cord-cutting - a shift from viewing video via pay-TV to via broadband - may finally be taking hold. But while LRG's Bruce Leichtman has indeed found an uptick in his calculations of cord-cutting (up from .2% of U.S. homes to .4%-.5%), he sees a far more nuanced picture of what accounted for Q1's swing, plus lots of uncertainty going forward.Categories: Broadband ISPs, Cable TV Operators, Research, Satellite, Telcos
Topics: DirecTV, Leichtman Research Group
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Aereo's Court Victory Puts Retransmission Consent Fees Into Spotlight
Yesterday's victory by Aereo in federal appeals court is certain to have at least one consequence: it will put retransmission consent fees into the spotlight. For those unfamiliar with "retrans" as it is known, these are fees that broadcast TV networks and stations have negotiated from pay-TV operators. Much like the fees pay-TV operators pay to carry cable TV networks (e.g. MTV, USA, ESPN, etc.), retrans allows operators to carry broadcast networks.
Retrans fees are already a billion dollar plus revenue stream for broadcasters and by some estimates, could be a multiple of this in several years. Broadcasters see the payments as vital to keeping them on parity economic footing with cable networks. Conversely, operators see retrans as a broadcast subsidy, effectively inflating their already bloated programming costs. Retrans has been at the heart of most of the blackout battles between broadcasters and operators over the last several years.Categories: Broadcasters, Cable TV Operators, Satellite, Startups, Telcos
Topics: Aereo
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Verizon's Latest Discount Illustrates Why Intel Media Faces a Tough Road Ahead in Pay-TV
Several weeks ago, after watching Intel Media chief Erik Huggers interviewed at the D: Dive Into Media Conference, I expressed skepticism that the company's marketing plan for its forthcoming pay-TV service would work. Huggers explained that Intel would emphasize a breakthrough, high-quality video experience, rather than a "value approach" where consumers could possibly save money by switching to Intel.
While I agree with Huggers that there's a lot left to be desired in today's pay-TV experience, the reality is that the industry's big players have set the tone for how consumers make their decisions to switch providers: price first, features second. The latest evidence of this was another Verizon mailer that arrived at my house last week (see below), offering a 2-year, $89.99/month bundle of video/broadband/voice and a $250 Visa card. Verizon will also bump the broadband speed to 50/25 mbps as a bonus.Categories: Cable TV Operators, Startups, Telcos
Topics: Comcast, Intel Media, Verizon
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Study: Cord-Cutters and Cord-Nevers Will Soar to 17.2 Million U.S. Homes by 2017
New research from The Diffusion Group forecasts that the number of "pay-TV refugees" - U.S. homes subscribing to broadband, but not to pay-TV services - will increase 58%, from 10.9 million in 2012 to 17.2 million in 2017. Pay-TV refugees consist of both "cord-cutters" (homes that once subscribed to pay-TV, but no longer do) and "cord-nevers" (homes that have never subscribed to pay-TV). The percentage of broadband subscribers who are pay-TV refugees will increase from 12.5% in 2012 to 17.2% in 2017.
Although it forecasts the number of cord-cutters to increase over the next 5 years, TDG's founding partner and director of research Michael Greeson believes the pay-TV industry's main concern should be with cord-nevers which will more than double during that period. Of the 17.2 million pay-TV refugees in 2017, TDG forecasts 40% or 6.9 million of them to be cord-nevers, up from 29%, or 3.2 million, in 2012.Categories: Cable Networks, Cable TV Operators, Research, Satellite, Telcos
Topics: The Diffusion Group
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Mark Cuban: An Apple Set-Top Box "Would Be A Huge Success." Right, And That's The Problem.
In a brief interview in AdWeek yesterday, Mark Cuban said "if Apple released a set-top box that supported authentication for multichannel video programming distributors (like cable and satellite companies), it would be a huge success." I agree with him - and that's exactly why such a product won't see the light of day.
As I asserted in August ("Apple to Make Cable Set-Top Boxes? Not. Going. To. Happen."), if pay-TV operators invited Apple to make set-tops it would be like letting the proverbial fox into the henhouse. They would be turning over their user experience to Apple, allowing the company to drive the UI and therefore reshape the video experience as it determined, just as it has done in music with iTunes. While there might be some short-term benefits (e.g. lower capex, etc.), the pay-TV industry's ability to sustain its multi-channel bundle long-term would be undermined.Categories: Cable TV Operators, Devices, Satellite, Telcos
Topics: Apple, Mark Cuban
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Why Has the Definition of "Cord-Cutting" Become So Squishy?
Since Q2 '11, when the pay-TV industry lost video subscribers for the first time, there has been a debate raging over the impact of "cord-cutting." Flash forward a year, and anyone hoping for some clarity on this critical question would arguably be even more confused. Read certain media coverage of the pay-TV industry's Q2 '12 results and you'd conclude cord-cutting was gaining traction; read others and you'd conclude it wasn't. A key reason for the murkiness: somehow over the past year the definition of "cord-cutting" has become very squishy.
Categories: Cable TV Operators, Satellite, Telcos
Topics: Sanford Bernstein
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VideoNuze-TDG Report Podcast #142 - NBC Olympics Streaming; Pay-TV Losses; Aereo's Low Pricing
I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 142nd edition of the VideoNuze-TDG Report podcast. In this week's podcast Colin and I first discuss NBC's Olympics video streaming. Despite some high profile criticism, we agree that NBC has actually done a pretty good job and has laid a foundation for live streaming to be an expected part of all Olympics coverage in the future.
Next we review Q2 '12 results from some of the largest pay-TV operators. Video subscriber losses continue, although Q2 is historically a soft quarter. Colin notes that recent TDG research shows the pay-TV value proposition is increasingly challenged and he believes that means higher churn is ahead, with bigger opportunities for OTT options.
Speaking of those options, Aereo announced new low-cost plans and both Colin and I agree that they're a clever way to reduce entry barriers and increase viewing flexibility. It's still early, but we like Aereo's odds of success.
Last up, we note the early demise of the Nexus Q media streaming device, a product that both us called a dud a couple of weeks ago.
Listen in to learn more.
Click here to listen to the podcast (21 minutes, 43 seconds)
Click here for previous podcasts
The VideoNuze-TDG Report podcast is available in iTunes...subscribe today!Categories: Broadcasters, Cable TV Operators, Podcasts, Satellite, Sports, Startups, Telcos
Topics: Aereo, Comcast, Google, NBC Sports, Olympics, Podcast
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It's Time to Get Real About the Limits of the Multichannel TV Bundle
One of the big side effects of the current Viacom-DirecTV and Dish-AMC carriage disputes has been a renewed questioning of the durability of the traditional multichannel TV bundle by many industry observers. But while outsiders and consumers may be looking for the pay-TV industry to reinvent the way it packages and prices its services, attending the NECTA cable industry conference last Friday was yet another reminder of how committed the industry is to preserving the multichannel TV model.
To be fair, for many households (particularly heavy viewers), multichannel service is optimal and a great value. But consumers aren't monolithic, and it's time for the pay-TV industry to get real about multichannel's limits. Operators' main approach continues to be promoting an entry level tier of digital TV that has grown ever more expensive (moderator Bruce Leichtman pegs the mean monthly spending on multichannel TV service at $78.63, 7% higher than in 2011). This has, in turn, created a well-documented affordability issue for the industry.Categories: Cable Networks, Cable TV Operators, Satellite, Telcos
Topics: AMC, DirecTV, Dish Network, Viacom
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VideoNuze Report Podcast #126 - Sky's NOW TV; iPad's Data Cap Problems
I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 126th edition of the VideoNuze Report podcast, for Mar. 23, 2012. This week finds Colin in London, providing him an even better perspective on our first topic this week, Sky's new over-the-top service called NOW TV, which it will launch this summer. Colin is bullish on NOW TV and likes the lessons it provides for U.S. pay-TV operators.
Categories: Advertising, Aggregators, Analytics, Books, Devices, International, Podcasts, Satellite, Telcos
Topics: iPad, Sky, Verizon Wireless
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Verizon-Redbox Joint Venture Announced; Netflix is in Bullseye
Verizon and Redbox parent Coinstar announced their much-rumored joint venture this morning, promising a "new single-source, national multi-platform" service to be launched in the second half of 2012. The new service is squarely aimed at competing with Netflix. However, neither the press release nor a 5-minute press call revealed any substantive details about the service (e.g. content available, pricing, geographic availability, etc.). Verizon will own 65% of the JV, with Coinstar owning the remainder.
On the surface the alliance makes sense, marrying streaming and DVD rentals. Verizon brings its massive wireless footprint and tens of millions of subscriber relationships to the JV, a huge promotional platform. Also, via its FiOS roll-outs, it has relationships with key content providers. For its part, Redbox brings its 35,000+ rental kiosks along with its own Hollywood relationships. Theoretically, some combination of the two could yield a compelling offering.Categories: Aggregators, Telcos
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Even Microsoft Can't Afford to Break Into the Pay-TV Business
Here's just how expensive it has become to break into the pay-TV business: even mighty Microsoft can't afford it. Reuters reported late yesterday that Microsoft has put on hold its plan to create a pay-TV meets Netflix type
subscription service, after getting sticker shock over the cost of content distribution deals. When you have $52 billion of cash and equivalents on your balance sheet and still can't figure out how to make the numbers work, that's a pretty significant statement about how expensive licensing linear content has become.Categories: Cable Networks, Cable TV Operators, Satellite, Telcos
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Why Albert Pujols is Over-the-Top's New Best Friend
When baseball great Albert Pujols signed a staggering 10-year, $254 million deal with the Los Angeles Angels of Anaheim last week, he became
over-the-top's (OTT) new best friend. That's right, everyone including Netflix, Hulu, YouTube and Amazon, plus countless online-only content producers, should have been celebrating Pujols's new riches. Why? Because the Pujols deal is the latest example of how pay-TV seems determined to price itself out of reach for certain segments of the population, opening up a huge window for OTT to succeed.
Categories: Cable Networks, Cable TV Operators, Indie Video, Satellite, Sports, Telcos
Topics: Albert Pujols, Angels, ESPN, FOX, Liberty Global, TNT
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VideoNuze Report Podcast #113 - Verizon and the OTT Market
I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 113th edition of the VideoNuze Report podcast, for Dec. 9, 2011. In today's podcast Colin and I discuss this week's rumors of Verizon potentially launching an OTT subscription video service outside its market areas. As I wrote earlier this week, I'm skeptical of their ability to succeed, but Colin is more sanguine.
Adding to this week's intrigue was a separate report suggesting that Verizon intends to team up with Redbox on the initiative. Meanwhile Verizon isn't willing to talk about any of this, and these days you can't be sure what to believe. Beyond Verizon, in the podcast we also discuss other players' role in the OTT space such as YouTube, Dish, Amazon and Vudu, and how they're each positioned. Listen in to learn more!
Click here to listen to the podcast (16 minutes, 27 seconds)
Click here for previous podcasts
The VideoNuze Report is available in iTunes...subscribe today!Categories: Aggregators, Podcasts, Telcos
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Verizon Needs to Bring More than a Knife to the OTT Gunfight
Late yesterday Reuters reported that Verizon is looking at launching an online-only subscription service for streaming movies and TV shows outside its geographical footprint. While
such a move initially seems disruptive to incumbents like Netflix and others, the folks at Verizon better remember the old adage about not bringing a knife to a gunfight; if they really want to compete, significant investments in content and promotions are going to be required. Even then, it's not yet clear to me how Verizon succeeds in this highly competitive space.
Categories: Aggregators, Telcos
Topics: Amazon, CBS, EPIX, HBO, Netflix, Starz, Time Warner, UltraViolet, Verizon, VUDU, YouTube
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YouTube's Redesign: The Long-Term Siege on Pay-TV Begins
Yesterday YouTube launched its most significant redesign yet, with a strong emphasis on channelizing the site, deeply personalizing the experience, and integrating social interaction throughout. As the introductory blog post says, the redesign is all about helping users "discover a broader range of entertainment on YouTube." And though YouTube would never admit it, I think the redesign marks the start of a long-term siege on the traditional pay-TV model. YouTube is squarely focused on would-be cord-cutters and especially the younger generation of "cord-nevers" for whom the web has already become a bona fide alternative to expensive pay-TV services.
Categories: Aggregators, Cable Networks, Cable TV Operators, Satellite, Telcos
Topics: YouTube
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Boxee Aggressively Pursues Cord-Cutters With New Live TV Dongle
Connected device maker Boxee is aggressively going after pay-TV cord-cutters with a new Live TV dongle it is introducing this morning. The dongle plugs into a USB slot on the Boxee box and takes in a feed of live broadcast channels accessed from either an HD antenna or via a pay-TV provider (note there's always a tier of local broadcast channels available without a set-top box, however the number and quality varies widely). Boxee's CEO Avner Ronen walked me through the logic of who it is appealing to as well as the key challenges for success.
Categories: Cable TV Operators, Devices, Satellite, Telcos
Topics: Boxee
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Google To Go Over-the-Top and Compete With Pay-TV Operators? Don't Bet On Success.
Is Google planning to go over-the-top and compete with pay-TV operators for subscribers? That's the tantalizing possibility the WSJ is reporting this morning, though its article is long on speculation and short on hard facts and on-the-record sources (as best I could tell, the only concrete thing
reported is that Google has hired Jeremy Stern - a former colleague of mine at Continental Cablevision - who's "spearheading talks with media companies"). Regardless, the possibility that Google could be looking to disrupt the pay-TV business, using its own high-speed fiber network in Kansas City and maybe elsewhere, deserves attention if for no other reason than the fact that its deep-pockets and robust ad model would potentially allow it to cause trouble for incumbents.
"Potentially" is the operative word however, because any subscription TV service Google would offer would only be as good as the channels it could deliver (see Sezmi's recent retreat for proof of that). As such, the critical question here is whether the most important cable network owners - Disney, NBCU, Viacom, Time Warner, Fox, Discovery, Scripps, A&E Networks, AMC Networks, numerous regional sports networks (RSNs) and others - would agree to deals with Google. Though they would no doubt be enticed by Google as another well-funded buyer, barring some huge unknown, I'd bet that most would say "Thanks, but no thanks," effectively stymieing the search giant's ambitions.
Categories: Cable Networks, Cable TV Operators, Satellite, Telcos, TV Everywhere
Topics: Google
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Xbox 360 Poised to Deliver Pay-TV Service In Shift to Video App Model
If you believe the rumor mill, Microsoft will announce as early as today that Xbox 360 will be able to deliver pay-TV services from Comcast and Verizon, as well as additional content from HBO, Sony, Amazon and others, as the
gaming console continues its transformation into a full-fledged entertainment hub. Focusing specifically on the Comcast and Verizon aspects, the integration would mark a milestone for the pay-TV industry in moving from a services model delivered through the traditional, set-top box control point to one where video becomes more like an app (albeit an expensive one!) to be delivered through multiple CE devices.
Categories: Cable TV Operators, Devices, Telcos
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Expensive Regional Sports Networks Are Becoming Pay-TV's Achilles Heel
An article in the NY Times over the weekend, "Regional Sports Networks Show the Money," highlighted the mega-profitable and symbiotic relationship between marquee sports teams/conferences and the regional sports networks (RSNs) they have spawned. RSNs aren't new, but as the article pointed out, teams and conferences are getting increasingly creative and aggressive about their TV rights, in turn driving up the fees pay-TV operators and ultimately subscribers are required to pay. All of this suggests that RSNs are becoming pay-TV's Achilles Heel especially when it comes to non-sports fans.
This is a topic I covered back in January, in "Not a Sports Fan? Then You're Getting Sacked For At Least $2 Billion Per Year" and subsequently in "Time Warner Cable-LA Lakers Deal Is More Bad News For Pay-TV's Non-Sports Fans," in each case noting that as sports programming fees drive pay-TV rates ever higher, some portion of non-sports fans will eventually defect for lower-cost entertainment-centric options (e.g. Netflix, Hulu, over-the-air/ antenna reception, etc.).
Categories: Cable Networks, Cable TV Operators, Satellite, Sports, Telcos
Topics: LA Dodgers, LA Lakers, Pac-12, RSNs
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Here's the Real Story Behind Pay-TV's Record Q2 '11 Subscriber Losses and the Role of Cord-Cutting
Today I'm pleased to present a special 2-part VideoNuze Report podcast with guest Bruce Leichtman, who is president and principal analyst of Leichtman Research Group. Bruce has been doing primary consumer research on the pay-TV industry for 15 years and is one of the foremost industry authorities.
In part 1 of the podcast, Bruce gives a detailed analysis of the industry's record Q2 '11 loss of over 300K subscribers among its 14 largest providers. Bruce explains the industry's historical context, drills down on which companies had the biggest year-over-year change and what accounted for this. Importantly, Bruce focuses on larger macro and micro-economic factors that are influencing the industry's results in a bigger way than new technologies and innovation which often take center stage.
Then in part 2 we turn our attention to the role of cord-cutting on the industry and the influence of Netflix specifically. First, Bruce clarifies the difference between non-video subscribers and "cord-cutters," a crucial distinction which he believes has recently been overlooked by many. Bruce shares his research on how many actual cord-cutters there are, which types of pay-TV subscribers are most vulnerable to cord-cutting and what role Netflix is playing. We wrap up by discussing what's ahead and how concerned industry CEOs should be about the threat of cord-cutting.
Categories: Cable TV Operators, Podcasts, Satellite, Telcos
Topics: Leichtman Research Group
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