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Linear Television: Bring it on Internet Video!
18 Jul, 2007
CTAM and Nielsen released a study titled, A Barometer of Broadband Content and Its Users, that reveals 81 million people have viewed online video, either at work or at home. 'This number increased from 70 million in September 2006 to 81 million in March 2007, a jump of 16% in just six months.' One of the more interesting findings is that online video viewing appears to be having minimal impact on traditional television viewing. In fact, the study postulates that online viewing may increase traditional television viewing. 'Thirty-three percent of those surveyed indicated that watching video over broadband Internet increased their television viewing time, vs. 13 percent who indicated it decreased their traditional television viewing.' Good news for the subscription video market of cable, IPTV, and DBS.
Perhaps the early demise predictions of traditional television have been premature. One potential issue raised by the study’s results is the link between viewing web distributed video on the television and consumption of that content. 'Based on respondent feedback, widespread consumer use of broadband video seems to be contingent on Internet platform video content becoming more easily accessible via home television sets. At that point, consumers say, Internet video fare could assume its place as another source for content on demand.' When Internet based video is as easily accessed via the television as is traditional linear content (a la, 'assumes its place as another source for content on demand'), will future statistics be in line with these current results? In other words, this may not be a ‘fair fight’ right now, because you have two different experiences and access methodologies for consuming Internet and linear content respectively. But as those two experiences converge, and you can seamlessly access content from either source, the implications may be much more pronounced.
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googleCTAM: No Denying HDTV Demand
11 Jul, 2007
The Cable & Telecommunications Association for Marketing (CTAM) released a report today that says 29% of cable TV customers own an HDTV set, compared with 15% a year ago. “HD sets are flying off the shelves and digital cable consumers are getting an HDTV programming package to gain the full benefits of their new sets,” says CTAM CEO Char Beatles.
The issue for video service providers, particularly IPTV via DSL carriers, is not how to deliver HDTV, rather how do you deliver multiple HDTV feeds. Many are hoping that MPEG4 is the answer. But even with MPEG4, many a IPTV carrier will be challenged to meet this multiple HDTV feed demand, and thus competitively disadvantaged.
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Should Telephone Service be Free?
12 Oct, 2008
Comcast announced a new promotion last week that offers 12 months of free basic cable service for new customers who also sign up for an additional service. Customers who don’t want an additional service can get Comcast’s basic service of about 20 -30 channels for $10/month. The promotion is tied to the digital TV transition of February 2009 and entices potential customers to avoid the transition “hassle” by getting “free” cable service. “The simple fact is that basic cable is the easiest path through the digital transition and now consumers can get it for free,” said Derek Harrar, General Manager and Senior Vice President, Video Services for Comcast in a company statement. This move is similar to strategies pursued by other video service providers, who are hoping to leverage the digital TV transition for new subscriber additions.
But is this strategy a leading indicator for the future? Should basic core services like basic cable and basic telephone service be offered for free, used as a “carrot” to entice customers to buy “more important” services like broadband? Maybe a very basic phone service, with no LD, access to landline 911, and maybe outgoing service only (to avoid telemarketers) should be a free component of a bundled offering. Such a wireline service may appeal to a customer who previously cut the cord for wireless only, but also needs broadband. There is a growing portion of the population who find the value of traditional wireline phone service elsewhere – either through wireless or broadband/IP services. But, if they could get the security of landline 911, and an extra dial tone in their home as a free value add for subscribing to broadband (or video from a telco’s perspective), maybe a telco’s bundled offering may look more attractive than a comparable cable offering. I realize this idea is not appealing to the hundreds of ILECs who are a part of the current access/settlement system (in fact, it couldn’t work in the context of today’s regulatory structure), but I wonder whether it’s inevitable. In this possible future scenario, the current settlement system adapts to broadband as the underlying service, as opposed to voice.
This scenario cuts both ways. From a cable company’s perspective, a growing portion of the population is turning to the Internet as a source for their video content, and no longer see value in paying for a broad package of video as a part of a traditional subscription pay-TV service. But, if they could receive basic TV (which includes local broadcast affiliates) as a free value add for buying broadband, maybe the cable bundle is more attractive. In a true IP/broadband world, very basic phone and video service is relatively easy to deliver, and has little impact on bandwidth and network performance. Maybe the digital transition is opening the door to a future where free basic services are a regular component of a bundled offering. Thoughts?