THE CABLE PIPELINE

There is no question that Comcast (Nasdaq: CMCSA, CMCSK) Broadband Customers, sports enthusiasts in particular, will be happy now that an ESPN (NYSE: DIS) and Comcast deal finally aired this past weekend carrying ESPN 360.com. “ESPN360.com is ESPN’s signature 24/7 broadband sports network, and the online home for live sports – delivering more than 3,500 live global sports events a year.”  It is available via more than 20 providers around the country including AT&T, Verizon, RCN, Insight, Frontier, Cavalier, Charter, Mediacom, Conway, Grande Communications, and many more, which now includes Comcast.  It is also available at no cost to approximately 18 million U.S. college students and U.S.-based military personnel. Comcast IP customers are now able to enjoy a sports package including College Football, Soccer, The X Games, Baseball, the U.S Open, Tennis and more.

 While Comcast was late to the game here, reference (Hell Freezes Over: ESPN360 to Comcast), a May 17, 2009 deal with ESPNU and ESPN360 does indicate that the largest cable provider is taking the migration to broadband viewing seriously with 15.3 million high-speed Internet customers. Comcast’s history, when striking a deal with any content programmer, would demand terms which are financially beneficial on a long-term basis. ESPN would also have an added incentive of jumping on board with the largest Cable provider in the nation, but only after losing the Champions League rights.

 This continues to be another milestone in the company migration to broadband content. I have been focusing on this scenario recently, but companies move into new territory based on their particular business plans. If you do not have to make a deal which is not deemed attractive at the time; wait until the circumstances are more favorable. Evidently, this is what Comcast chose to do by acting when their timing was right. Again, what is intriguing about ESPN 360 is that it has been available since 2007 and has been carried by more than twenty Broadband/Cable providers. So visit www.comcast.net , if you are a Comcast Broadband customer, and enjoy ESPN360.com

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 With the recession causing consumers, to search for ways to save money, yet have their fix on entertainment and news; media industries are seeing a migration which may be happening faster than they either wanted, or can keep up with, in current business models.

I’m referring to the consumer who is integrating their internet connection with their TV’s to watch and consume copious amounts of content. While this is not surprising, since we knew this was happening to some degree; a study by Pew Internet and American Life Project reveals it is probably moving faster than Pipeline Executives would like to see.

As evidenced with the “TV Everywhere” initiative by Comcast and Time Warner Cable, the industry is moving faster to lure customers to their content offerings on the Web.  As with any business, “if you snooze, you loose”; this maybe what executives are thinking about at 2:00am in the morning while also trying to get some snooze. Again, I applaud both Comcast and Time Warner for their rush to create a business, marrying the Internet with TV’s, as it was probably just in the “nick of time” in taking some advantage of this revolution.

How will this new business model play out in the future since content has been offered “free” for the most part online, with the likes of Hulu? Ad revenue has not come anywhere near the amount needed to off-set the revenues being lost from consumers migrating away from traditional TV to the hybrid internet/TV connection. Can the industry comeback later and begin charging extra for content viewing? Operators should be contemplating that next move into agreements with content providers, ad supported vendors, and consumer pricing which will ultimately decide the success of this new model. Stay tuned for the outcome of Internet/TV Viewing!

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In an interview with Reuter’s, Disney’s Chairman, Robert Iger gave a prediction that consumer preferences and habits would be monitored and probably sold to advertisers, thereby generating needed revenues to content providers. While this statement was forthcoming by the Chairman, it brings up the question of “Consumer Privacy”. Do consumers consider this a pressing issue? According to Iger older consumers might have a problem with the sophistication of advertisers on the Web, but the younger generation simply, does not think so, and also have a hard time understanding the concept of privacy on the Web.
His prediction insists that there are fundamental changes on the way which will change the Broadcast and Cable TV Industry’s current Business Model which relies heavily on current advertising supported revenues. “If we could sell your behavior to an advertiser — I am actually pretty bullish about what technology is going to allow in terms of behavioral tracking. I think we are going to have information to sell to marketers.”
It seems as though Disney is looking to the future of the Web as not only an advertising revenue solution, but also a subscription based model as well. If customers are willing to go to a movie and pay $5.00 to $6.00 per person, then it would reasonable to believe they would pay $5.00 to watch Disney content on the Web, if the content is good. I believe the Disney Chairman has a good handle on where the industry is going in the future, but agreements have to be made with the pipelines like Comcast, Time Warner, Cox .etc…and the Telco’s. In essence, my question to Mr. Iger would be; how will this effect consumer pricing?

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I think the Cable Industry needs to take heed to a consumer backlash that continues to emerge from a history of exploiting a “good business model”; the advent of Fiber Optics, Digital Programming, Increased Bandwidth, The Addition of Hundreds of Channels, and the resulting Tier Packages which consumers “love to hate.”

TV Everywher e is a start; Tru2Way has exciting potential; Remote Content Storage is another; but the Industry has to go further in figuring out how to merge Broadband and Digital TV to consumers satisfaction. Currently, it is the (price points of offering an economic model of hundreds of channels) which has the Industry out of favor with many consumers. The Ala Carte Scenario, which seems to be more and more in demand than ever, may not be such a foreign business model as one once thought.

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The Real Threat To Web Video   The referenced article by John Kosinski, a guest contributor to Tubefilter News and the Political Director for the Writers Guild of America, West is somewhat misguided in its attempt to indicate that “web neutrality” is in jeopardy from large pipeline conglomerates like Comcast, Time Warner and others.

The upcoming test with five-thousand Comcast customers will provide a real window of consumer demand for exclusive content on the Internet, and is just a sample of companies who want to provide the best possible customer experience with the growing venue of Internet Content.

To say that this is an attempt to control viewing habits of the Internet users is, I think, a form of “fear tactics”, to stop the monetization of exclusively created programming. The companies involved, cable/Telco pipelines, and programmers are using the “free market system” to enhance their business interests in an ever increasing competitive broadband environment. It does not, in my opinion, hamper the free and open viewing habits of Internet users, after all Hulu, an Internet content competitor, is offering its version of of the same consumer demand.

Sufficed to say, let the ‘free market” system work out the details of content viewing since the bottom line is ultimately whether consumers will accept or deny these advances of exclusive content providers. Over-regulation of markets will dampen innovation and therefore, choice for consumers, not the other way around.

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Paid Video to Overtake Free Video on the Web in 2009

While the free online video segment continues to be quite a business at $3.5 billion this year, as one can surmise paid subscriptions will out pace this by a good clip. Research indicates that through 2012 paid subscriptions, which includes download-to-own, rental and subscription services, will continue to outpace free video online at 39% compound annual growth, compared to free video at 37%.

This trend indicates that the Cable Industry will continue to close ranks in offering exclusive video content online as evidenced by the Comcast/Time Warner “TV Everywhere” trial with 5,000 customers. As stated in earlier blogs, content will be king in the future and cable companies will be solidifying the exclusiveness of preferred content to increase revenues in an effort to keep consumers from “jumping ship”.

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STARZ Entertainment is the latest premium programmer to jump on board with Comcast in linking content to the web. Comcast will pick 5,000 customers randomly to participate in the test and will offer additionally, Time Warner Inc.’s TNT and TBS; Rainbow Media’s AMC, Sundance Channel, IFC and WE TV; Scripps Networks; A&E Television Networks; and Comcast Networks.
Customers will enjoy the online programming as soon as it reaches the On-Demand premiere service of Comcast. The test will will be to see how the authentication process will work to capture only Comcast customers for viewing.

It seems that programmers are lining up to be in the test mix which means Comcast is on the right track with programmer and consumer technology relationships. It will be interesting to see how this test will play out in the market, and whether Comcast, as a leader in the industry, can leverage it’s powerful reach to garner continued support from all parties concerned. Other cable operators will be looking at this test as a “bell-weather” in business models going forward.

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Comcast and Time Warner Cable are now closing ranks to protect their subscriber base from defecting to internet content providers like Hulu. They will be offering their own content online from a variety of sources, if you can first prove you are one of their customers.
While this is a competitive move for both companies, it will start the beginning of exclusive agreements with programmers to offer their content to companies who are willing to pay for it. Yes, this is the “free market” system at work and it will become an exclusive club. If both companies team together and strike a deal with content providers, a sweet offer could be coming your way via the internet. But first you will have to sign up to both company services, and then be able to sit back to enjoy exclusive content via the broadband connection.
This is a good move by both companies, in light of Hulu, and a threat to the video customer base for cable. So, good job for creating the exclusive club and working to deter further erosion of the subscriber count.

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A good article about the effects of “Hulu” on the Broadcast Industry Households. Hulu has certainly taken off with a model that is attracting a large audience. The term now being used to describe Hulu’s impact on the market is, “Hulu Households”. How will this impact the Cable TV Industry and Broadcasters; we will have to wait and see? Broadcasters, according this article will have the most to loose with the changing landscape. It is, and will continue to be an industry to watch.

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LG has just launched new HDTV Content Connected TV’s that will hit the market at prices ranging from $1,599 and $1,999 online. These new models allow streaming video from NetFlix with over 12,000 titles.

For those not ready for the Broadband Content Market, this is the time to gear up and take advantage of a new future for TV viewing. The Cable Industry, along with Cable Labs, are working on the Tru-2Way interactive Open ID Software which will allow all TV manufacturer’s to synchronize TV components for consumer viewing of broadband content and other interactive features.

The consumer technology landscape is changing fast, so be ready with your business plan.

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