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Competition’s Newest Weapon: Blimps
13 Dec, 2007
You know the competitive landscape is quite mature when competitors resort to blimps. That’s just what’s happening between DirecTV and its central Florida cable competitors. It all revolves around the cantankerous issue of the NFL Network. The NFL Network is battling cable companies to get carriage on their basic tiers. Many cable companies are resisting, and putting NFL Network on a digital or “sports” tier. Others, including Time Warner Cable don’t offer NFL Network at all. As a result, millions of cable subscribers can’t watch NFL Games on the NFL Network. DirectTV, Verizon FiOS, and other cable competitors are seizing on this issue to build competitive advantage, by offering NFL Network on less restrictive tiers. DirecTV is trying to exploit this advantage, thus the blimp.
DirecTV will be flying their Starship blimp over the Tampa/St. Petersburg market during tonight’s Denver Broncos/Houston Texans game, and displaying the actual game on the blimp’s 2,100-square foot video display. People from the ground will be able to watch the actual game on the blimp. DirecTV is taking aim at Brighthouse Networks, the local cable MSO, which does not carry NFL Network. DirecTV will continue the blimp tactic across central Florida, including Orlando, for the next few NFL Network game broadcasts. There is no end in sight for this dispute. Even Senator John Kerry has offered to try to mediate. I guess our nation’s many problems will need to take a back seat as the Senator resolves the ultra important issue of who gets to watch the game tonight.
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googleVerizon and NFL Lay Groundwork for Future of Television Sports
19 Nov, 2007
The NFL Network and Verizon are providing glimpses into the future of sports on television through their NFL Network Game Extra package this year. The package offers eight Thursday/Saturday prime time games, which are viewed online through a broadband connection. Offered to Verizon broadband subscribers (FiOS or DSL) who also subscribe to a Verizon video package (either through a FiOS or Verizon DirecTV bundle), the package provides a variety of exclusive features that are not available for traditional television viewing – at least not yet.
The features include the ability to select from up to four camera angles; live online chats with other NFL Network Game Extra viewers during the live games; game statistics, highlights and drive-chart simulations during the games; and on-demand video highlights of the games. Verizon does not intend to charge for the package. While this experiment is limited to online viewing for now, it certainly represents the future of sports on television. These are the types of features that IPTV promises to deliver – true differentiation over the traditional viewing experience. To be fair, there’s nothing here that cable can’t emulate, and DirecTV has already demonstrated that they know how to leverage interactive sports packages for competitive differentiation through their venerable NFL Sunday Ticket package. It’s just a matter of time before these features make their way to the “big screen.” The NFL Network Game Extra is also a prime example of the growing convergence of broadband content with traditional television viewing, which will fuel further innovation in the total entertainment experience. Carriers who embrace this convergence and learn how to leverage it, will certainly gain competitive advantage.
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Telecompetitor is a leading industry blog covering the telecom competitive landscape. We provide insight, analysis, and commentary on the issues and implications of the evolving telecom competitive landscape.
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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?