Cable Companies Aren't Immune From The Economy As More People Go Online-Only For TV

from the take-your-500-channels-and... dept

Mon, Jun 1st 2009 3:58am — Carlo Longino

People are cutting back on lots of spending these days, but one area that was supposedly relatively safe was in-home entertainment expenditures. Things like cable and satellite TV and Netflix were thought to even thrive during economic downturns as people looked to limit going out, choosing instead to stay in and be entertained. While that seems to be working out for Netflix, cable companies are starting to feel the pinch as people drop their subscriptions and get their TV fix online. While it's a relatively small number of people that are making the move, it's the sort of thing that cable companies have been concerned about for a while. The WSJ story talks about some moves by the likes of Comcast and Time Warner to grab more online viewers, but if the cable companies continue to try and treat their online efforts in the same way as their traditional offerings, it's hard to see much success. It doesn't seem like a coincidence that this is happening as cable companies are looking to introduce caps on their broadband services. They say it's because some consumers are creating too much traffic, in part because of their online video viewing, and it's straining their networks. But perhaps it's just a way to try and capture lost TV revenue from cord-cutters? Of course, trying to get users who are going broadband-only for their TV to take on metered broadband seems like a good way to drive them to competitors with uncapped plans.

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Filed Under: cable, online, tv, video

25 Comments

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Steven (profile), 1 Jun 2009 @ 4:30am

Well...
"drive them to competitors with uncapped plans."

At least for the three people who have a choice. This has been talked to death, but the real problem (as you well know) is the lack of competition.
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Chronno S. Trigger (profile), 1 Jun 2009 @ 5:27am

I call bulls**t
"They say it's because some consumers are creating too much traffic,"

If that were true Comcast and Verizon here won't be competing for the fastest download. Comcast raised their speeds then Verizon raised theirs. Comcast did it again and Verizon dropped their price. Cocast did it again, Verizon got FiOS. Comcast is now supposidly raising their speeds to 50 down and 20 up to compete. If there was a bandwidth crunch then they would keep the speeds down to around 6Mbps (fast but won't properly support live streaming) to compensate.
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MrGutts, 1 Jun 2009 @ 5:28am

Re: Well...
I would agree with this. Plus the cable companies have been leeching money out of the American public for decades.

Hell they have a non written word about not competing in each others territory for customers.

Plus if they loose to much money, they can always bitch for a bailout.
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Walter (profile), 1 Jun 2009 @ 5:34am

"it's straining their networks"
Perhaps eventually. I know I have cut the cord myself. No phone+DSL and no Sat TV. Saving me over $200 a month. I've got a VZW BBand card and HULU works just fine. I've got an old account with an unlimited plan... let's see how long that goes until they see how much bandwidth I've sucked down the last few months.

I see more people saving money this way and by using redbox or netflix.
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R. Miles (profile), 1 Jun 2009 @ 5:34am

My two cents
I've been toying with this idea as well. Having connected my plasma and laptop, I'm very impressed. So much I can do, and the remote is replaced with a mouse.

$25/mo for HD and its DVR seems rather outrageous, especially since I haven't watched TV in quite some time.

I'd love to set up a home network for streaming TV online, but not yet ready to do so as my wife seems a bit adamant about learning/adapting to a new way to watch her shows.

I'm guessing this trend is going to continue as people seem to be more willing to watch a show on their schedule.

Could it be the channel is dead in 5 years? Doubtful, but I'm sure a decline at this time will be evident.

The problem I see, though, is the lost revenue from TV ads. Given their cost, I see a huge increase online or adaption of "pay per view" episodes.

It's going to suck, that's for sure.
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Pablo Sanchez, 1 Jun 2009 @ 5:42am

Time Warner Sucks
I just recently cut out Time Warner's Cable TV, because we realized that we weren't using it, and instead using Netflix and Hulu. I called them and told them I wanted to keep the internet and cut the TV. They told me that would be $40 (This is a disconnect fee, NOT unpaid bill). I of course told them they were wrong.

I asked them how much it would cost to turn it all off, and they told me it would be free. It took me 2 days to finally get them to waive that fee. But I can't imagine how many people just say ok.
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tack, 1 Jun 2009 @ 5:46am

meh
I've tried to watch TV online. For example south park, all their shows are online unedited with only a couple commercials. I still find myself DVRing it to watch it in better quality on a real tv.
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mrtraver (profile), 1 Jun 2009 @ 6:00am

We just went from the highest tier of DirecTV to the lowest, saving about $75 a month. I don't watch much TV, but nearly everything my wife and I do watch we can find online or rent, so we just kept the family pack with channels the kids watch.

Lack of local competition in our rural town is hurting us in the ISP area, though. I'm glad we have broadband available, but there is only one game in town, so 3Mbps DSL costs a total of $80 a month once you include the phone we never use. If we drop the phone number, the DSL "access fee" is conveniently the same amount.
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Overcast (profile), 1 Jun 2009 @ 6:58am

If it wasn't for the DVR, I would also drop cable. but I DVR a number of shows, and I still prefer kicking back on the couch when I watch TV.

Although; if I get a new PC and convert the old one to a media PC, that may be a thing of the past too.
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minijedimaster (profile), 1 Jun 2009 @ 6:59am

Re: My two cents
I see a huge increase online or adaption of "pay per view" episodes.
Except that won't work because you can still get the majority of television shows for free off of the bittorrent networks, other p2p networks and sites like hulu. If they start charging other sources will be sought.

The only way it would work is if the prices were VERY reasonable and they added some sort of value or reason to buy the episodes.
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R. Miles (profile), 1 Jun 2009 @ 7:11am

Re: Re: My two cents
Except that won't work because you can still get the majority of television shows for free off of the bittorrent networks
The average consumer isn't going to bit torrent. This seems to be reserved to those who understand the technical aspects of doing such.

I don't see myself doing it, either. Download, then extract, and hope it's the episode? I'll pass on chance.
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minijedimaster (profile), 1 Jun 2009 @ 7:13am

Re:
A cheap and easy alternative to a media center computer is something like a WDTV. You can find them for around $100 and all you have to do is copy your video/audio/picture files to a memory stick or external hdd and play them through this device on your tv. Kinda like a modern day vcr.
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minijedimaster (profile), 1 Jun 2009 @ 7:18am

Re: Re: Re: My two cents
Really? Because my father who is in his 50's started doing it on his own. I never showed him a thing about it, and he is definitely NOT "technical". I think you under estimate "regular" people as a whole. What's the saying? Where there is a will there is a way? Something like that.
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Chuck, 1 Jun 2009 @ 7:33am

OTA HD and TiVo/DVR
I've been using a TiVo HD with OTA HD for a few years now and love it. There are only a few channels I miss, but I feel $60+ for those isn't justifiable. I only wish TiVo HD had builtin HD Radio.
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Dane, 1 Jun 2009 @ 7:37am

Picking Nits
One is 'immune TO' something, not 'immune FROM'.
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Joe, 1 Jun 2009 @ 7:49am

I wrote in to adage about this in November 2008...
they laughed at me about the transition from TV to broadband TV, even though I noted it was mostly for the tech savvy group. Of course in April they did write an article about the trend, but no word about the fact that they have heard from people who have made the move themselves.

Only real problems with playing broadband video on your TV is that you will notice slowdown via the ISP, and broadband quality video doesn't always translate well on a 42" plasma.
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Anonymous Coward, 1 Jun 2009 @ 8:11am

I have to laugh.

As some of you (who know who I am) might know, I watch a ton of Chinese TV. I would say that probably 25% of my total TV / video time in a week is in Chinese, more if I happen to pick up some good movies at the Chinese mall (Anthony Wong rules!).

Anyway, there is a product called KyLinTV, which is an IP set top box to allow access to chinese channels. takes about 1/2 meg per second to run the box, and the picture quality is about as good as can be expected for near real time streaming video. That is to say it is lower quality than old style compressed VCD discs played on a first generation player. Some of it is good, some of it is bad, and buffering and other issues are reported by many end users. I looked at a demo unit, and decided not to use it, even if there was a significant number of new channels to enjoy. Also, changing channels was a pain, literally having to rebuffer before you could see the next channel. The concept of channel surfer ain't in the cards here. Going through 30 channels might take the better part of a half hour.

If everyone switches to IP tv, I have a feeling that every cable company in the world will switch to capped bandwidth. Do the math on 500k per second, how much bandwidth in a month? Oh oh!

Nobody is sticking it to the cable companies, they are just shifting their money to another part of the same company. WTG!
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Anon, 1 Jun 2009 @ 8:18am

I've done this.
I got myself a little program called Playon from MediaMall that streams Netflix and Hulu to my Playstation 3. So far so good. That combined with my Netflix Blu-Ray DVD's keep me quite entertained.

I did however buy a new HD - flatscreen for the first time, which I've put on my CC and am using my once monthly cable bill to pay off.
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Frustrated, 1 Jun 2009 @ 9:00am

Satallite bundle practices....
I actually canceled Dish because they were bundled with my phone provider and were taking advantage of this issue. They would send the provider a bill for two months, skip a month, then one month, skip a month, two and so on.... Of course, this means they could send late fees through and pass it off as, "We can't move your billing date to match the phone company we have agreements with."
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Patty, 1 Jun 2009 @ 9:26am

FIOS replaces TV set
I think they ought to be a tad more worried. I'm a 61 year old retired female and I gave my TV to the neighbors 18 months ago. I download all the TV shows I want including those from ITV and the BBC. Granted, I am the only person in my peer group who does this but I am getting more requests for instructions from fellow retirees.

I find it hysterical when a Verizon rep tries to sell me the TV package. I reply that I have a 20mbps FIOS connection, dude, I don't need no stinking TV! For the most part they do not get what I am telling them.
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Azure, 1 Jun 2009 @ 9:38am

Handbrake - Good Open Source (Free) DVD ripping software
I just downloaded a nifty (and free) little ripping program called Handbrake. The DVDs I ripped to play on my video IPOD also play just fine on my Google phone (the G1). I stumbled onto Handbrake after downloading and trying at least a dozen different freeware and try-before-you-buy programs, all of which were bloated junk that didn't work.

If you want to play ripped videos on your G1, I recommend downloading a free program called Meridian from the G1 marketplace. It plays videos stored on your memory card without any hang-ups or glitches.

Like some of the other message posters, I felt almost gleeful when I finally mastered the beast. I am not a pirate, but I expect that I should be able to play the DVD that I paid for on my other devices, including my video IPOD, without coughing up more money.
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The Infamous Joe (profile), 1 Jun 2009 @ 10:15am

Re: Re: Re: My two cents
You are obviously confusing bit torrent with Limewire. :P

Bit Torrent has never let me down when it comes to TV shows, and, during those rare times I use a public site, if I take the time to read the comments, I can avoid all the fake movies.

All you really need is a bit torrent client that can play well with an RSS feed (uTorrent would be the best bet) and a way to get it to your TV. I have had success with a D-Link Media Server, which just streams shared network media to your TV, though it might be more than you're willing to pay (~$250USD) but it streams in HD, so I don't even have to worry about poor quality.

Now, if I could convince my girlfriend that we don't need cable anymore.. some people just resist new things. :P
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CableTechTalk, 1 Jun 2009 @ 10:19am

The numbers aren't there.
This is clearly an emerging trend, but the numbers just aren't there to support the contention that "cable companies are starting to feel the pinch." I blogged about this very issue on Friday and specifically looked at this WSJ article.
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chris (profile), 1 Jun 2009 @ 10:36am

Re: Re: Re: My two cents
Download, then extract, and hope it's the episode? I'll pass on chance.

it was like that 5 years ago, but the scene is way different now. bit torrent is a meritocracy. the good stuff gets seeded and the bad stuff dies on the vine.

pick a tracker that specializes in tv (like EZTV) and check it a few hours after the show aired on TV.

i do this, plus trade stuff with friends via USB hard drives.
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another mike (profile), 2 Jun 2009 @ 1:34pm

Re: I've done this.
Put together a MythTV linux media center with 8.1 channel audio and an HD projector. Beam that across the room for 103" screen on the far wall. All paid for by my canceled cable TV subscription.
(Dropping cell for skype bought the kegerator lol)
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