Can cable TV keep its ‘teflon’ coat afloat?
August 30th, 2010 § Leave a Comment
Cable TV. Its been resilient during the recession. Almost like Teflon. Will online video providers emerge as direct competitors or complements to the $69.8 billion U.S. TV subscription market? If over 88% of all the full-length TV program episodes available in the $10/mo subscription service are already freely accessible on Hulu.com. For clips, it’s almost 98%, then why would I buy a subscription to Hulu +? “Online video is not a substitute” for multichannel video programming, Comcast recently wrote in a filing to the FCC responding to complaints from competitors this month. “In addition, several impediments – technological, pricing related, and rights related – make it highly unlikely that online video will become a substitute” for such service “in the foreseeable future,” it continued.
So is cable really safe? Today, Google announced that it will jump into the pay-per-view market, via YouTube. Newer film titles would cost about $5–a bit more than the $.99 to $3.99 YouTube charges for the older films currently available in its fledgling pay-per-view catalog. Presumably, there will be some sort of integration with Google’s forthcoming Google TV platform, though details are scant. If the company does manage to roll such a service out, we’ll soon see YouTube going head-to-head with Apple’s (AAPL) iTunes, Netflix (NFLX) and Hulu–and in a big way.
Yes, Google’s got reach and numbers. Yes, they could market this probably better than most. But the cable TV business has been in this market for years. And they are terrible at marketing the service and always have been. Part of the problem has been a rights issue with Hollywood (the old ‘day and date’ issue with DVD releases). Day and date issue won’t go away either, in part because Red Box is putting too much $$ into the studios pockets and it a hedge against Netflix. However, Netflix is also putting a lot of $$ in the same pockets. And, most of us still prefer the large flat screen TV over a laptop screen any day. But one of the most fervent and least discussed impediments happens to be pay TV. The likes of HBO and they swing a very big stick. HBO gets rights to movies, and BIG titles, for many, many years. Its the ‘pay-tv’ window that keeps coming back and back and back. You see HBO has 41+ million, HBO and Cinemax U.S. subscribers (as of December 31, 2009). At an average subscription fee of $12.00 per month, that $492,000,000 million dollars PER MONTH in subscription fees. Yes, part of that goes to the cable ops for carriage, but thats still a BIG number. So, when HBO goes shopping for films and locks up movies, it does so for years. AND, those rights prevent many forms of PPV exposure, both online and terrestrial.
Which bring me back to cable TV as a whole. I recently disconnected 3 out of 4 HD boxes in my home and got rid of my last ‘extra’ tier. I have kids in the home, so luckily Nick Jr. and Disney for Kids is carried on plain the old basic tier (are you listening cable operators?). Had those two channels been on a tier that I would have to pay for, guess what? I would be buying that tier. Other than that, ABC, NBC, CBS and Fox are the most valuable channels to me. Why? I can’t rent tonight’s Network Television programs. I might be able to see some of them online but I’m back to my computer screen for that. The Emmy’s, Football, Baseball, The Academy Awards, local news and network news and other programs of this sort we all get for free – today. And its all delivered over cable TV.
Until I am able to transmit an online URL to my flat screen TV, Hulu +, Netflix, Google TV, Apple TV and the rest are not compelling enough to pay…$5.00 a movie or $ 10.00 a month on top of my basic cable subscription. So, yes, cable TV is fairly resistant to the recession and ‘online’ competition today. My guess is that Steve Jobs will announce a ‘rental’ service for Apple TV. And yes, others will come. But for today, cable is king.
And please don’t move Disney for Kids and Nick Jr. to another tier!
Hollywood to sell movies online – Monday, April 3, 2006
August 30th, 2010 § Leave a Comment
It is 4 years and 4 months later and look where we are now. CinemaNow, Movielink and other services have all failed. What’s a studio to do? Blockbuster will be filing for Bankruptcy shortly and they plan to re-emerge from Bankruptcy to do what? Put kiosks into stores next to other kiosks? I feel for the debt holders who have lost quite a bit of money. I wonder if Blockbuster ever paid attention to what happened in the music business? Apple certainly did. Maybe Steve Jobs will have a partial answer comes September 1st. And now Google will be offering pay-per-view movies.
Hollywood to sell movies online
Monday, April 3, 2006; Posted: 5:38 a.m. EDT (09:38 GMT)
“Brokeback Mountain” will be one of the first films available to download.
LOS ANGELES (AP) — Hollywood studios will start selling digital versions of films such as “Brokeback Mountain” and “King Kong” on the Internet this week, the first time major movies have been available online to own.The films can’t be burned onto a disc for viewing on a DVD player. Still, the move is seen as a step toward full digital distribution of movies over the Internet. Six studios said they would announce Monday that sales will begin through the download Web site Movielink. The site is jointly owned by five of the seven major studios. Warner Bros., Universal Pictures, Sony Pictures, Paramount Pictures, Twentieth Century Fox and MGM will offer some first-run and older titles on Movielink. New films will be priced similar to DVDs — between $20 and $30 — while older titles will sell for $10 to $20. In a separate announcement, Sony and Lionsgate said they will sell films through the CinemaNow site. Only films from The Walt Disney Co. will not be available, although both services say talks are ongoing.
“Digital delivery hasn’t arrived until the major studios allow home ownership, and now they have and now digital delivery is very real,” said Jim Ramo, Movielink’s chief executive.
Studios will sell some new films online the same day they become available on DVD. Most films will be made available within 45 days. Studios began renting films online several years ago as a way to combat illegal downloading. Movies have been available through the Internet 30 to 45 days after hitting video stores, with rentals lasting just 24 hours for viewing primarily on computer screens.
Digital delivery of video grew rapidly after Apple Computer Inc. began selling episodes of TV shows through its iTunes online store last October. This year, devices powered by new Intel computer chips and TV service delivered over the Internet will allow more consumers to watch Web video on their TVs instead of their computer screens, a key factor in downloading to own, analysts said. Studios are being cautious about selling films online in part because DVD sales produce more profit than box office receipts.
But studios are also preparing for the day when major retailers such as Wal-Mart and Amazon.combegin offering their own movie download services.
“The important thing is to embrace the future, respect the economics of DVD but move forward into digital delivery,” said Ben Feingold, president of Worldwide Home Entertainment at Sony Pictures. The films available on Movielink can be stored indefinitely on a computer hard drive or transferred to as many as two other computers. The movies can be played on a TV if the computer is part of a home network. A copy can be burned to a DVD as a backup. Discs can be played on up three PCs authorized by Movielink but cannot be viewed on a standard DVD player because of special security coding.
Consumers will not be able to transfer the films from a PC or laptop to a handheld portable viewing device. But that capability should be available sometime within the next year, Ramo said. Films on CinemaNow will be playable on just one computer. The company said it eventually expects studios to allow consumers to burn movies on DVD and transfer them to portable devices.
- Blockbuster tells Hollywood studios it’s preparing for mid-September bankruptcy (latimesblogs.latimes.com)
- Google Jumps on the Hollywood Bandwagon (fool.com)
