HBO considering offering HBO GO w/o cable

[forgetful]

I wonder if you chalk that up to .. the value of football.

CBB, you might not know .. TWC in Milwaukee is fighting the local NBC affiliate .. been off the air for 30+ days now.  Every few days, one side takes out a full page ad in the paper, saying how evil the other side is. 

Meanwhile, a month has gone by and .. I think most people are thinking .. Channel 4?  Never heard of it.   Sure, there were a couple of Packer pre-season games that people had to scramble to see, but that's over now.   The value of WTMJ is evaporating each day.  I would foresee them completely losing this dispute since people have just .. moved on.  In a month or two, they'll be begging TWC to accept any offer.

But CBS .. has the NFL.  No way TWC could drop them forever.

Partially true, bur realize this is a dead time for broadcast television.  In a couple weeks the new seasons of shows will begin and I assure you people will be more upset when their favorite shows premiers begin.  TWC has a cushion of a few more weeks before people really start getting upset.

[mu_hilltopper]

Has TWC contemplated giving away vouchers for TV antennas recently? 

Yes.  They have free antennas at their TWC stores .. and if you go to Best Buy they will give you a voucher for $xx off any antenna you buy there.

Partially true, bur realize this is a dead time for broadcast television.  In a couple weeks the new seasons of shows will begin and I assure you people will be more upset when their favorite shows premiers begin.  TWC has a cushion of a few more weeks before people really start getting upset.

You're right .. but .. it's all crap!   Viewers aren't seeing the fall season promos, they won't even know what they are missing. 

My guess is the umbrage TWC is feeling from people complaining is dying down, and will continue to slope to zero.  WTMJ is in real trouble. -- This happened to the #1 station in a city in Texas .. they had a 5 month battle with the big cable company .. when they got back on cable, they were dead last.

[Spotcheck Billy]

WTMJ gave out antennas at the WI State Fair

[jesmu84]

The plot thickens...

http://qz.com/144377/time-warner-doesnt-want-you-to-know-you-can-get-hbo-without-cable/#!

http://variety.com/2013/biz/news/comcast-becomes-first-pay-tv-distributor-to-offer-hbo-without-basic-cable-1200761863/

[ChicosBailBonds]

The plot thickens...

http://qz.com/144377/time-warner-doesnt-want-you-to-know-you-can-get-hbo-without-cable/#!

http://variety.com/2013/biz/news/comcast-becomes-first-pay-tv-distributor-to-offer-hbo-without-basic-cable-1200761863/

Been going on for over a year

[jesmu84]

Been going on for over a year

Ok... But you don't think it represents any sort of change in philosophy or anything?

[ChicosBailBonds]

Ok... But you don't think it represents any sort of change in philosophy or anything?

Fair question.  I think the fundamentals for them here in the States are still the same, at least for now.  Some day, yes, but right now they risk massive dollars if this becomes the norm.  What they are doing is a test.  Their biggest issues right now are they don't have the infrastructure to do this at scale and they don't want to give up the billions of dollars from the television providers either.  They also don't want to have to launch massive number of call centers, etc.

They're giving up a lot of revenue in this test they are doing.  Typically HBO gets over half of that fee the distributor is charging, so if Dish is charging $18 then HBO is getting north of $9.  In this test, they are getting a fraction of that amount.  In the long run, they are not going to want to trade dollars for dimes, so they're going to have to figure out what is most important to them.  Remember, they don't sell advertising and ratings don't mean a whole lot to them.  This is the big difference between them and the OTA networks that will sell their stuff online all day and all night because they don't give a rip if you watch it online or via a television distributor, they'll get their piece of the advertising either way....of course they also want the retrans fees as well from the distributors, and those days might be coming to an end with Aereo, etc.  Lots of fun stuff starting.

[jesmu84]

http://www.businessinsider.com/cord-cutters-and-the-death-of-tv-2013-11

[ChicosBailBonds]

http://www.businessinsider.com/cord-cutters-and-the-death-of-tv-2013-11

DIRECTV, AT&T, FIOS, DISH all growing right now



Cable....losing and have been for over a decade....nothing new.

Follow the money Jesu, follow the money.  It all comes down to the content companies.  If they don't get their billions from the distributors, they'll get it from the OTT guys, either way they are getting their money.  This idea that by cord cutting is going to get people cheaper content isn't going to happen.  You're just going to be paying someone else, but you will be paying.

You are going to see major consolidation in my opinion.  Charter will merge with TWC IMO.  Wouldn't be surprised to see the satellites merge, or maybe one of the Telco's buy one of the satellite companies.  You'll be left with about 4 majors when all is said and done and they will have immense leverage over content because the OTT guys will not be able to go out and cut other deals without the content guys cutting their own throats.

All comes down to the $$$

[jesmu84]

You are going to see major consolidation in my opinion.  Charter will merge with TWC IMO.  Wouldn't be surprised to see the satellites merge, or maybe one of the Telco's buy one of the satellite companies.  You'll be left with about 4 majors when all is said and done and they will have immense leverage over content because the OTT guys will not be able to go out and cut other deals without the content guys cutting their own throats.

All comes down to the $$$

Awesome. Can't wait. I'm sure that'll be a positive for consumers

[ChicosBailBonds]

Awesome. Can't wait. I'm sure that'll be a positive for consumers

Well, consumers want NFL, want FS1, want their Marquette games, want their Game of Thrones want all this stuff.  It costs money.  The guys that create it or buy the rights are charging a crapload of money for it.  Those that distribute it have to pass the costs on. 

[Chicago_inferiority_complexes]

I'm sure this will work out well for another 10-20 years, but after the wealthiest generation in history dies off and the Gen-X'ers and Millenials who can't even afford free health care (sic) are supposed to replace them, the $$$ for triple digit tv packages featuring trash like 24/7 Alaska channels will disappear.

[brandx]

Well, consumers want NFL, want FS1, want their Marquette games, want their Game of Thrones want all this stuff.  It costs money.  The guys that create it or buy the rights are charging a crapload of money for it.  Those that distribute it have to pass the costs on. 

You're right!!

But the benefit for consumers is that they will probably be able to choose what the want to pay for rather than being force-fed dozens of useless channels.

It was only a few short years ago where it was unthinkable to be able to buy only the album tracks that you wanted. I buy a lot of music, but only what I want to buy. I'm no longer required to buy 'filler' tracks to get a couple good songs off of an album. While there are many artists that can fill a CD with quality music, they are many more than can't.

[ChicosBailBonds]

I'm sure this will work out well for another 10-20 years, but after the wealthiest generation in history dies off and the Gen-X'ers and Millenials who can't even afford free health care (sic) are supposed to replace them, the $$$ for triple digit tv packages featuring trash like 24/7 Alaska channels will disappear.

You may well be right.  Of course, the questions will also be asked if triple digit mobile phone bills will still be ok, triple digit a month Starbucks habits, etc, etc.

Lots of choices out there on how people spend their money. 

[ChicosBailBonds]

You're right!!

But the benefit for consumers is that they will probably be able to choose what the want to pay for rather than being force-fed dozens of useless channels.

It was only a few short years ago where it was unthinkable to be able to buy only the album tracks that you wanted. I buy a lot of music, but only what I want to buy. I'm no longer required to buy 'filler' tracks to get a couple good songs off of an album. While there are many artists that can fill a CD with quality music, they are many more than can't.

Oy vei........you guys still make the comparison of producing a music album to television \ sports \ movie.  Honestly, I don't know why you guys keep going into that trap.  Apples to monkeys comparison.

[forgetful]

You may well be right.  Of course, the questions will also be asked if triple digit mobile phone bills will still be ok, triple digit a month Starbucks habits, etc, etc.

Lots of choices out there on how people spend their money. 

Chicos, you make a good point here.  But the problem for cable/satellite television is that if gen xers or millenials are forced to decide between TV, starbucks or their phone, the first thing to go is going to be TV.

[ChicosBailBonds]

Chicos, you make a good point here.  But the problem for cable/satellite television is that if gen xers or millenials are forced to decide between TV, starbucks or their phone, the first thing to go is going to be TV.

Believe me, we know.  Millenials is a big discussion point.  The question is what happens to millenials, do they get to a point where they grow up or do they keep going down that path.  That's an interesting question and one that many are dealing with, not just tv but those companies that make money on gaming, the internet, etc, etc.

I did a project with L.A. college and post grad students about a month ago.  We interviewed random students at USC, college of Fashion and Design, etc...man on the street kind of stuff.  Totally targeting millenials and their beliefs on tv.  It was very interesting.  There was your typical "everything should be FREEEEEEEEEEEEEEEEEEEEEEEEEE" crowd, but there were many that loved their sports or loved certain shows and wanted to watch them (whether it was on TV, a tablet, or whatever).  They don't have the money, of course many don't because we've had an entire decade of economic crap, but the desire is there.  We'll see how things shake out with the economy over the next decade.  I don't see sports rights getting cheaper, certainly making quality tv isn't getting any cheaper (the crap stuff...reality tv is cheap, but not the good stuff).  That has to be paid for.  Piracy is going to be really interesting, as well, especially with some of the new counter piracy stuff coming down the pipeline. 

[brandx]

Oy vei........you guys still make the comparison of producing a music album to television \ sports \ movie.  Honestly, I don't know why you guys keep going into that trap.  Apples to monkeys comparison.

I wasn't making a comparison - I was giving an example of how things change in a way that was never expected. When I was young and buying record albums, the concepts of being able to listen to any music you desired on a computer or of purchasing, say, just 3 songs off of a record album were unheard of. I mean, the concept of CDs was not even thought of.

I guess I was saying this will still shake out in ways we may not expect rather than comparing the 2 situations

[ChicosBailBonds]

Let the fun begin

http://business.time.com/2013/11/25/comcast-time-warner-cable-one-broadband-giant-to-rule-them-all/

[ChicosBailBonds]

TV business is not the music or print business


http://gigaom.com/2013/09/25/why-the-tv-industry-wont-go-the-way-of-newspapers-and-the-music-business/

http://www.thewrap.com/why-a-la-carte-cable-could-kill-tvs-golden-age/



I believe Mr. Kagan says it well here.  It's a 3 party system, not a 2 party system and that is what so many people do not understand.

"Traditionally when customers complain pricing is too high, the company feels the pinch and cuts the price, but cable television isn't a two-part system," says Kagan. "Instead, it's a three-part system. If customers complain to the cable company, they aren't complaining to the only party that matters. The third party is the networks who always charge more, year after year."

Part of the reason they do is because the talent also wants more. In fact, a lot of stakeholders have to get paid. Complaining about the cost of accessing content might directly relate to what it costs to produce a show and what actors and actresses in hot shows are demanding for pay raises. A good example is Friends, where all six regular cast members wanted $1 million per episode. That, along with more elaborate shooting locations and larger crews, has likely contributed to this trickle-down effect.

"If the cast of Modern Family goes on strike demanding higher wages, that can trickle down, just like with the high-profile demands of the cast of Friends and for sports programming costs," says Ireland. "So consumers that clamor for a la carte need to understand that, for better or worse, depending on one's perspective, there's a bigger business model that results in the situation we now have and there are many parties on which to place blame if we're looking for someone to blame."

Calling it a "broken model" that is essentially unsustainable, Kagan believes the current system protects pay-TV companies and punishes customers unfairly. Regulators back in the day never could've imagined this scenario when the system was first set up, but reforming it now will require some trade-offs on all sides.

Are actors or actresses willing to take a pay cut? Will pay-TV operators slowly phase out niche and specialty channels? Will those channels then move to streaming online to connect with their audience, and if so, is that audience willing to pay $5 per month for just one channel?

Read more: http://www.digitaltrends.com/home-theater/a-la-carte-channels-cable-tv-viewing/#ixzz2lgXWQaJG

[ChicosBailBonds]

I wasn't making a comparison - I was giving an example of how things change in a way that was never expected. When I was young and buying record albums, the concepts of being able to listen to any music you desired on a computer or of purchasing, say, just 3 songs off of a record album were unheard of. I mean, the concept of CDs was not even thought of.

I guess I was saying this will still shake out in ways we may not expect rather than comparing the 2 situations

Fair enough...it's an argument that many others make so I thought you were going there.  I just posted a few articles that you might enjoy, they take a balanced view.  They explain what would happen to the content, but also to the pricing and why this is so much more complex than people want to make it.  For the costs to go down, the athletes, actors, directors, etc that drive the costs of the content have to go the other way.  Will that happen?  I have serious serious doubts.

[brandx]

Fair enough...it's an argument that many others make so I thought you were going there.  I just posted a few articles that you might enjoy, they take a balanced view.  They explain what would happen to the content, but also to the pricing and why this is so much more complex than people want to make it.  For the costs to go down, the athletes, actors, directors, etc that drive the costs of the content have to go the other way.  Will that happen?  I have serious serious doubts.

I guess that is what I was getting at. I think the pricing (if we are able to pick and choose rather than getting a package from a cable company), will be quite a complex issue because of what you stated.

[MU Fan in Connecticut]

I just noticed yesterday that my Cablevision/Optimum cable bill carries a separate line item $2.98 monthly fee for Sports Programming Surcharge.

[ChicosBailBonds]

I just noticed yesterday that my Cablevision/Optimum cable bill carries a separate line item $2.98 monthly fee for Sports Programming Surcharge.

Yup, you're going to see more and more of that.  That is to try to cover some of the RSN costs, but it doesn't even come close.  The RSN costs per month in a place like New York can be close to $15 a month for an operator.

MSG +
MSG
SNY
YES

So operators are trying to get some of those dollars back.  The operators would love to take the RSNs out of the base packages completely and sell them a la carte because the costs are so high, but the RSNs refuse because they want the eyeballs for the advertising. So then you have this fun situation where if you don't carry the RSN, the diehard fans leave you and go to a distributor that will.  For that distributor, it has to charge even if you don't like sports.

It's the situation currently in Houston with the Rockets and Astros where many major distributors refuse to carry.  In your neck of the woods, DISH has basically given up on sports fans entirely by not carrying most of the New York based RSNs...too costly.  In the Spring, with the new Dodgers channel coming, many distributors will have a hard decision to make for an enormously priced channel that they have to decide is it worth carrying knowing they have to raise everyone's bill and not everyone cares about the Dodgers, or do they say no to the Dodgers and lose customers as a result. 

[brandx]

"Most channels are owned by the same handful of large media companies that seek to maximize revenue across all of their channels," says Greg Ireland, a research manager at IDC who follows the industry. "By bundling channels, they're able to get carriage fees and advertising revenue on channels that perhaps wouldn't get carriage if offered on their own. This model, while problematic for some consumers (and some pay-TV operators), isn't broken from the media company perspective and they don't necessarily want to make changes that upset the current formula."

Chico's this is the most interesting paragraph to me. Using the record industry again (and I understand it isn't apples to apples) as an example - they felt the exact same way. Their old model represented max profits for them. But it was a combination of new technology and consumer demands that forced the change. No way of knowing how this shakes out price-wise, but the consumer will force changes to the current model of cable TV as well.