Entertainment Giants Looking At The Future... And See Cable?

from the future-hazy,-please-try-again dept

Wed, Dec 2nd 2009 3:48am — Mike Masnick

We've discussed in the past why we think that the cable companies' "TV Everywhere" strategy is destined to fail. If you don't recall, it's the way the cable companies are looking to respond to the rise of competition in the form of Hulu, Netflix, Redbox, Boxee and others -- not by offering something more compelling, but by putting up a giant wall around content and forcing you to keep your cable subscription (which fewer and fewer people seem to want) if you want to access TV shows online. Reid Rosefelt has a nice rant explaining why this won't work, pointing out (quite accurately) that all those competitors are winning because they deliver what people want, and locking things up doesn't make customers want cable any more:

Why do we enjoy free-with-ads sites like Hulu and Crackle? THEY HAVE FEWER ADS! And we can watch what we want whenever we want to.

What do we like about Netflix? For a fraction of the cost of cable, it gives you DVDs by mail plus the ability watch a lot of movies instantly, either on your computer or with their many compatible set-top boxes.

What do people like about Redbox. One buck! Pick it up and return it to the supermarket!

What do we like about cable?

Ummm, cable is a monopoly. You only get one store. You may only want a pair of socks and a shirt, but you are forced to buy a Yankee cap (even if you are a Mets or a Sox fan), cufflinks, perfume, towels, ladies underwear, two ties, a bedspread, low-slung hip-hop shorts, and a lamp. The kicker is that the price goes up all the time and the Calvin Klein shirt you actually came to buy costs extra. And of course LOTS AND LOTS OF ADS!

It's not that we don't like cable any more--we've always hated it!

But the key insight in the piece is how this, combined with Comcast's attempt to buy NBC Universal, show the backwards thinking of industry execs:

There's one tiny hitch though. Every single TV show and movie from NBC and Universal is available for free to anybody who has ten seconds to look for them. So what exactly is Comcast locking up? This isn't 1995, you know. Either you just shrug your shoulders about file-sharing or you start offering some alternatives that have benefits that people are willing to pay for like Hulu, Netflix, Redbox, and iTunes. Or maybe you work a little and come up with something new? Bill Maher said recently that the Republicans looked into the future and saw... radio. These entertainment giants are looking into the future and they see... cable.

Bingo. It's yet another case of execs looking to lock up content and block value, rather than providing additional value to users. It's people thinking about the way things used to work and trying to recreate it with a digital facelift, rather than looking to actually take advantage of what the new technology enables. That's only a snippet of Reid's analysis, so go read the whole thing.

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Filed Under: business models, cable, content

26 Comments

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Anonymous Coward, 2 Dec 2009 @ 5:03am

Someone's rant, total opinion, light on facts.
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- CastorTroy-Libertarian, 2 Dec 2009 @ 5:33am
  
  Re:
  Some ones spin, total crap, forgets what bloggs are...
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  - Anonymous Coward, 2 Dec 2009 @ 5:54am
    
    Re: Re:
    Nope, I don't forget what a blog is. But I will remind you when Mike links to this story in the future with a line like "Entertainment Giants want cable only", which would be attempting to make a fact out of opinion.
    
    You can always tell how impressed Mike is with an opinion by the way he runs the story, it's a long post which is mostly someone else's post. That is usually a sign that he likes the idea enough to use it in the future as a "Masnick-fact"
    [ link to this | view in chronology ]
    - Anonymous Coward, 2 Dec 2009 @ 7:07am
      
      Re: Re: Re:
      Looks like someone woke up on the wrong side of the bed again.
      
      But, sadly, if my dog ran away every day (like yours does), I'd be crabby too. So, you better go find him.
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    - The Groove Tiger (profile), 2 Dec 2009 @ 8:02am
      
      Re: Re: Re:
      "But I will remind you when Mike links to this story in the future with a line like "Entertainment Giants want cable only", which would be attempting to make a fact out of opinion."
      
      It seems to me you're making a fact out of your opinion right now. Bad AC, bad!
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    - Anonymous Coward, 2 Dec 2009 @ 8:22am
      
      Re: Re: Re:
      CastorTroy's response still works.
      
      Some ones spin, total crap, forgets what bloggs are...
      [ link to this | view in chronology ]
Haywood, 2 Dec 2009 @ 5:31am

I'm just glad the target is NBC
Of all the major networks, it would be missed the least if it went away. The Law and order variants ceased to be anything but a platform for the liberal agenda a long time ago, & little meaningful or even entertaining programing is available there. In my area, I couldn't get cable if I wanted it, the simply won't run a wire to such a sparsely populated area, I've asked. Faced with a problem, I worked it out by getting a nice media center PC & getting content from the internet. Now I'm quite spoiled, and wouldn't take cable if it was offered, it would be a downgrade. I watch what I want when I want, with content from any English speaking country.
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Designerfx (profile), 2 Dec 2009 @ 5:33am

competition (lack of)
check how lovely comcast is, and this is no surprise. http://www.chicagobusiness.com/cgi-bin/article.pl?article_id=32721&seenIt=1
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Hephaestus (profile), 2 Dec 2009 @ 7:30am

Oh no!!!
Comcast is slowly being turned into a last mile provider by technology. Eventually they will be nothing more than a pipe for content.

Imagine this ... Someone starts a site or creates a device that allows you to preview shows, and records what you want to watch, recording it for later viewing or viewing as the show is broadcast. Oh wait thats already been done ... never mind ;)
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Brad Morrison, 2 Dec 2009 @ 7:47am

p2p
As someone pointed out elsewhere, people will find a way to see what they want. This particular bloke lives in rural UK and says there's no cable, poor satellite view, and almost non-existent broadcast signals. And the internet service is too unreliable for streaming. So he uses bittorrent to get what he wants overnight and puts the shows on USB drives to play on his Philips DVD player.

IMHO, all of this dramatic thrashing about is an enormous waste of money, time, and effort to ... prevent the future?

I think the world has already changed, and these industry behemoths are simply making a futile run to catch a train that left the station years ago.
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BigJulieFromChicago, 2 Dec 2009 @ 8:30am

Where cable still rules
Live sports.
Hulu the Super Bowl? Get the World Series from Nexflix? NOT.
Olympics? World Cup? Massive audiences...in the billions. Content completely useless after the fact.
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- JEDIDIAH, 2 Dec 2009 @ 9:47am
  
  Re: Where cable still rules
  Are you sure you have cable?
  
  'cause there entire channels dedicated to the idea of showing old SuperBowl or World Series games.
  
  As far as the Olympics goes, that's just silly. They just aren't that big. Plus they tend to be mutilated by American networks or they happen on the other side of the planet anyways (so there will ALWAYS be a big delay).
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  - BigJulieFromChicago, 2 Dec 2009 @ 11:52am
    
    Re: Re: Where cable still rules
    "'cause there entire channels dedicated to the idea of showing old SuperBowl or World Series games."
    
    I'll guess that the cumulative audience for one year for these channels is less than 1% of the Super Bowl audience.
    
    "As far as the Olympics goes, that's just silly. They just aren't that big."
    
    Wha? Maybe not among your "True Blood" watching hipster friends. Think China, India, Brazil, Europe. Cricket audience in India is bigger than anything on US TV.
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hank mitchell, 2 Dec 2009 @ 8:32am

I challenge DirecTV to go 100% free
That's why I challenge DirecTV to go 100% free. DirecTV's business model is totally backwards from rational logic -- it is based on keeping 95% of their potential customers OUT of the system via incredibly complex encryption walls, when everyone in the US could be receiving 1000 HD/SD channels with no drain on DirecTV's resources. Instead of selling artificial protections to a small amount of the population, take 100% of the cable market instantly overnight, putting every one else out of business. If need be, buy out dish and other sat operators, so that DirecTV is the only provider, and it's FREE. Unless you were an insane idiot, everyone in the US would run out the next day and buy a cheap dish and decoder. Their broadcast is an infinite supply to every home in the USA -- they reach every state plus parts of canada and mexico, yet 95% of people are not decoding the signal onto their TVs because it costs $50 a month. It's a perfect example of a company artificially influencing the market by damaging their own product (DRM) to fit a weird business model. They need to wake up and see the big picture, a broadcast model where they would have all the leverage. Yeah, they would have to work out the whole HBO/showtime thing obviously, but with half a billion subscribers and their own advertising network, they would be holding all the cards.
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- Haywood, 2 Dec 2009 @ 9:14am
  
  Re: I challenge DirecTV to go 100% free
  I never thought about that, but you are right. They would own TV outright, & advertisers would throw themselves at their feet
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- dkp, 2 Dec 2009 @ 9:44am
  
  Re: I challenge DirecTV to go 100% free
  this would be ay advertisers dream
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GeneralEmergency (profile), 2 Dec 2009 @ 8:41am

Cable/Sat...YOU ARE ON NOTICE.
You have 18 months at most to implement ala carte pricing by network or you WILL be pulled out of my home.

I am NOT interested in your lame arguments about the economic efficiencies of bundling. Do NOT lie to me about it not being technically possible.

I only care about ONE thing. Every month when I write that check to you, it's like Drano in my veins knowing that some of MY MONEY is going to support LEFTIST LYING CRAP HOLES like Olberman, Maddow and Matthews.

This FORCED financial support of the LEFT's "Spew Machine" IS GOING TO STOP.

And, yes, I am pissed about this.
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- Laughing Crow, 2 Dec 2009 @ 8:51am
  
  Re: Cable/Sat...YOU ARE ON NOTICE.
  Cable Exec says: oooh! I'm frightened! If I lose your $50 I might might have to get my shoes shined every other day instead of every day!
  You, tiny peon subscriber, are of no interest to me. Do you know where the real money is?
  Pathetic...........
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- Anonymous Coward, 2 Dec 2009 @ 9:14am
  
  Re: Cable/Sat...YOU ARE ON NOTICE.
  Haha... no problem, they will give you a la carte service, every channel is $50 a month.
  
  Now would you like a bundle?
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- Anonymous Coward, 2 Dec 2009 @ 9:48am
  
  Re: Cable/Sat...YOU ARE ON NOTICE.
  I thought Glenn only watched the satellite beamed into his brain by aliens?
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Anonymous Coward, 2 Dec 2009 @ 12:36pm

from the article-
"section 49 notice under RIPA Part III, which gives a suspect a time limit to supply encryption keys or make target data intelligible. "

I argue the data is already intelligible, if they can't can't read it, how can they prove he can? clearly no knowledgeable cryptographers were interviewed in the making of this law.

This man needs to be mentally evaluated,if he is considered competent and he has not committed any crimes, he should be released, or he should be held for the crimes they have proof he committed. If he is diagnosed with schizophrenia, that should be taken into account and he should receive help, not jail-time. Jail time will only increase his fears of authority.
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deadzone (profile), 2 Dec 2009 @ 1:32pm

No surprise
More depressingly backwards thinking about the future of content.

These guys will never learn and that is the main reason why they are having such a hard time right now and why they will more than likely be no more at some point in time.

Let's merge and then make the content hard to get! Sounds like a plan....
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gorehound (profile), 2 Dec 2009 @ 2:33pm

as much a waste of time and money as the asshole DRM put on DVD & blu-ray,etc.

once again these greeedbags will lose out.
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Mitchell, 2 Dec 2009 @ 3:05pm

Australian Providers
Over here in Australia, TV and Cable companies seem to be starting to realise that if they don't make big changes in what they offer, they are going to lose out to online based services.

Our free-to-air channels have all started broadcasting a second channel in the last 12 months that plays all the stuff they never had time for on their regular channels such as American Sitcoms and American sports, random other shows, anything they feel will keep people watching. They've also started forums where people can post what shows they want to see (and are actually listening to them), moving the show "The Office" from the midnight time slot to the 8pm time slot as many people were requesting that it be put on at a more reasonable time.

Our major cable provider "Foxtel" has also started to make changes, just releasing an update that included an extra 2 or 3 movie channels, extra sports, and extra HD channels. They've also given users the ability to login online to the Foxtel website and watch a large number of TV shows from anywhere they have a computer and Internet.

Seems like a few people here in Oz are doing the right thing, expanding content to make their products more appealing, rather than locking it and complaining about the Internet being the devil.
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John Smith, 2 Dec 2009 @ 6:24pm

People dont want TV anymore because
People dont want tv anymore because its overrun by ads while you are watching the show you desired ,weather alerts,tv channel logo boxes and just plain bad programming.
The internet is the future TV.
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PJ Rodriguez, 3 Dec 2009 @ 2:22pm

Rise of the Cord-cutters!
Certainly, online video is rising in prominence. But your claims aren't supported by research. You say media companies will put "a giant wall around content," but there's already plenty of content you can't get for free online. You say that TV Everywhere programs are an attempt to force you to "keep your cable subscription (which fewer and fewer people seem to want);" subscriptions for multichannel video service seem pretty stable. You say that the "competitors are winning," but no matter how much online viewing has gone up, it's still well below TV viewing. The tide may be turning, but awfully slowly.
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