HBO Decides It's Finally Time To Go It Alone

from the timing-and-details-are-everything dept

For years, plenty of people have been wondering why HBO absolutely refused to offer a standalone internet offering for cord cutters (and cord nevers), with the general response being that "the math" was against it. Basically, HBO gets a ton of money from cable, and every time new customers sign up, that's free money for HBO without having to spend anything on marketing. A standalone product may not even bring in as much money and would require HBO to do more marketing efforts on its own for the offering. Of course, as we pointed out in response to that argument, "waiting for the math to make sense" is a kind of predictor for legacy companies that wait too long to innovate and find that the future has become the present while they're still in the past.

Eventually, the timing was going to be right, and apparently HBO has decided that time is now. Or, at least, sometime next year. The company announced plans to launch a stand-alone internet offering leading to much speculation. Actual details are lacking, and there's some speculation that it might be a very different product than the current HBO Go offering. Some are saying it may actually be in coordination with another player (like Amazon or Hulu). Reading too much into at this point doesn't do much good.

Of course, this has also led to some speculation that it may increase people cutting the cord -- and that's likely true for the segment of the population that has cable for HBO (duh) and not for sports (a bigger driver). However, the real point here may be that where HBO goes, others are likely to follow -- including sports.

HBO's decoupling with cable TV may not single-handedly change the cable TV market, but it's a sign of a much larger shift that started long before and is now dragging HBO along with it. The traditional cable TV market has been ripe for disruption for quite some time. This is just a single mile marker in an ongoing process.

Filed Under: cable, cord cutting, hbo go, internet, pay tv, tv
Companies: hbo, time warner

Big Cable Wasting Money On Ads That Look Like They're Supporting Internet Slowdown

from the rather-incredible dept

Today, as you may have heard, is Internet Slowdown Day, in which a bunch of folks are calling attention to the fight at the FCC concerning net neutrality. The basic idea -- as you may have seen on this very site -- is to host some "spinning wheel" banners, highlighting the kind of internet that we may have to live with if the big broadband providers get their way and are allowed to set up tollbooths online, picking winners and losers based on who will pay the most. We've been hearing that the big broadband players are a bit nervous about this -- as often seems to happen when it comes to real grassroots efforts. They've attempted to set up some fake grassroots efforts. We've even heard rumors that they've been trying to "infiltrate" planning meetings for Internet Slowdown Day. But this one takes the cake. In response to this campaign, cable's main lobbying arm, NCTA, has launched an advertising campaign that... um... looks kinda like the Internet Slowdown Day campaign, reminding people that they're nervous about Big Cable cutting off access. Here are two of the ads NCTA is currently running:

Of course, if you look at those ads, they actually (1) look like they're a part of Internet Slowdown Day and (2) remind people of exactly what they fear most about Big Cable: the inability to connect to certain sites. No one (and I do mean no one) thinks that, if the FCC implements true open internet rules, they'll suddenly be "unable to connect" to any particular sites. The only place where that's a fear is if the FCC doesn't put in place good rules and allows companies, like the cable companies NCTA represents, to start blocking access to certain sites.

So, either this a case where some ad designer at NCTA is a subversive double agent really helping "Team Internet," or the folks at NCTA and Big Cable are really so buried in their own wonkdom, they don't realize just how much this ad appears to support the other team. Either way, thanks, Big Cable and your lobbyists for highlighting exactly what most of us fear. An internet where we are "unable to connect" to sites because the FCC has killed off net neutrality...

Filed Under: ads, big broadband, cable, failure, internet slowdown, net neutrality, open internet
Companies: ncta

Congressional Reps Signing Sympathy-For-The-Cable-Industry Letter Received More Than Twice As Much Funding From Cable Lobbyists

from the the-original-'pay-for-play' dept

As the ongoing net neutrality/internet fast lane issue continues to be debated by the FCC and many other interested parties, it's always helpful to know where your representatives stand on issues related to this battle.

One of the issues being considered by the FCC is the reclassification of internet service as a public utility under Title II. This sort of regulation is obviously opposed by major internet service providers, who aren't exactly smitten with the idea of being held accountable on price or service quality by a government agency.

Maplight.org has researched the political contributions flowing to the 28 Congressional representatives who signed letters opposing this particular part of the FCC's proposed rule changes and found that -- surprise! -- cable companies put far more money into the pockets of those who side with them on this issue.

The 28 representatives signing letters to the FCC against Title II reclassification of the internet as a public utility, a position allied with the cable industry, have received, on average, $26,832 from the cable industry, 2.3 times more money than the average for all members of the House of Representatives, $11,651.

Republicans seem to be asking for more in return for sympathetic letter-writing.

Republicans signing the letters against Title II reclassification of the internet as a public utility have received, on average, $59,812 from the cable industry, 5 times more than the average for all members of the House, $11,651.

In fact, Maplight notes that the top five recipients among letter signers are all Republicans. Evidence indicates that the spendthrift lobbyist may be better off contributing to Democrats.

Democrats signing the letters against Title II reclassification of the internet as a public utility have received, on average, $13,640 from the cable industry, 1.2 times more times more than the average for all members of the House, $11,651.

Maplight also points out that there's an additional layer of self-interest at play as well. According to its research, 29 members of Congress own stock in Comcast, making it the 25th most popular stock in the Congressional market.

The letter warns that this additional regulation will "stifle innovation" and "halt job creation." Comcast's FCC filing is even more succinct in transparent self-interest:

Title II would spark massive instability, create investor and marketplace uncertainty, derail planned investments, and slow broadband adoption.

I'd love to hear more about Comcast's "planned investments" that don't include funneling funds into politician's pockets or swallowing another large cable company, but the filing contains none of these insights. Like the infamous "fiber-to-the-press-release" announcements, any claim of "instability" or curbed "investments" tends to be nothing but enraged puffs of hot air.The company's true aim still seems to be figuring out how it can make more while doing less.

Filed Under: cable, congress, lobbying, merger
Companies: comcast, time warner cable

Cable Industry's Own Numbers Show General Decline In Investment Over Past Seven Years

from the net-neutrality? dept

So, yesterday we wrote about the cable industry lobbying group NCTA blatantly misleading with statistics about how much broadband investment is coming from the cable side. The story it was pushing was that investment in broadband has continued to go up and up (and thus, "changing" the rules would somehow lead to less investment). Beyond changing the number of years before showing the totals, this chart is exceptionally misleading in that it is showing cumulative investment, rather than the actual rate of investment. Matthew Yglesias called NCTA out on this, leading NCTA to more or less admit Yglesias was right, though denying that he was. Still, NCTA finally released some actual year-by-year numbers. Of course, as people quickly noted, those year-by-year numbers seemed to support Yglesias' point. Furthermore, they weren't adjusted for inflation.

Thankfully, one of our readers using the name cincinnatus (nice one), posted the inflation adjusted numbers, and we've taken the liberty of making a new chart with those numbers: From there, the story of cable continually increasing investment looks... very different. There was that big initial build-out of broadband in the late 90s/early 2000s, but then expenditures dropped, and other than minor ups and downs it's been pretty flat. In fact, since 2007, the trend is pretty clearly downward on investment. Yes, there's a tiny bump in the last two years, but that's at best flat spending, not any real increase.

Now, it's possible to claim -- as some cable industry supporters have been -- that because of greater efficiency and better technology, spending the same amount is fine because they get more value out of fewer dollars. But, if that's the case, then that's the argument the cable industry should be making, rather than the wholly misleading argument that investment in infrastructure has continued to rise over the last decade. It's quite clear from the chart that this is simply not true.

Filed Under: broadband, cable, infrastructure, investment, statistics
Companies: ncta

Cable Industry Lies Through Its Teeth: Falsely Claims Greater Broadband Investment & Support For Net Neutrality

from the lying-liars dept

So we already had the story about AT&T's FUD claiming that all sorts of horrible things would happen if the FCC went with Title II reclassification, and now Comcast and the other cable companies are ramping up the FUD efforts. They have a "friendly" Congress person, Rep. Gene Green, passing around a letter to his colleagues, which claims that:

In the years that broadband service has been subjected to relatively little regulation, investment and deployment have flourished and broadband competition has increased, all to the benefit of consumers and the American economy.

And it hints that such investment would somehow go away with reclassification. Of course, this is all a lie. In part, because Wall Street hates capital expenditure and gets angry any time broadband providers actually invest in broadband, these companies have actually been doing everything possible to decrease how much they spend on infrastructure investment over the past five years. Even worse, they're playing stupid statistical tricks to try to hide it. Thankfully, Matthew Yglesias, over at Vox.com calls them out on this. The big cable lobbying organization, NCTA, pulls two tricks with the following chart that it uses to falsely pretend that broadband investment is increasing: First, the more obvious trick is that those numbers are cumulative -- which is what you generally do when you want to hide the actual rate of investment per year. But the rate is actually slowing down quite a bit. The second trick is more subtle. Note that there are three years between each of the first four numbers? But between the second to last one and the last one, there are four years. That's because the actual numbers would show pretty clear decline in investment, so they're fudging it by combining cumulative totals and then adding an extra year to that last number. Yglesias then used that data to calculate the actual averages showing a more accurate picture: As you can see, it certainly suggests that, as they've grown more powerful, and as real competition has decreased, investment has been cut back significantly. That fits with plenty of other evidence concerning how the major cable and telco companies have acted. That story about "greater competition" is -- as we've discussed previously -- a complete joke. That's fudging statistics in a different way, lumping in totally non-competitive wireless accounts, which can't be used as broadband replacements.

Update: NCTA has responded to Yglesias's article, claiming that "the [original] chart had a few simple errors" which it claims to have now fixed. It also posted a new chart with yearly data, which still appear to show a decline from peak investment, though NCTA tries to spin at as continued growth in investment. It does appear that there are cycles, but investment has clearly declined. In fact, this new chart appears to confirm Yglesias' point, that capital expenditure hasn't grown massively as NCTA suggested (and that's because... it hasn't).

Oh, and Comcast's now even got the gall to argue that allowing it to merge with Time Warner Cable will mean more net neutrality protection and a "faster internet." It's putting those claims in big newspaper advertisements Of course, they're being misleading. It's what they do. They're defining "net neutrality" very narrowly, based on the merger terms that were forced upon it when it bought NBC Universal. But that's got little to do with the actual net neutrality issues of today. As for a "faster internet" they mean, yeah, sure, if internet companies agree to pay extra (meaning you'll pay extra too).

I'm not exactly sure what the cable companies think they accomplish with these kinds of easily debunked claims, but it really makes them look excessively desperate.

Filed Under: broadband, cable, fcc, investment, lies, net neutrality, tom wheeler
Companies: comcast, ncta, time warner

Comcast Says That If You Object To Its Merger With Time Warner Cable, You're Ignorant And Unreasonable

from the because-. dept

Oh, Comcast. Remember how it was going to try to be a bit more subtle in pushing for approval of its merger with Time Warner Cable? Well, you can only deny your true nature for so long. The main force behind getting the merger approved, Comcast's Executive VP David Cohen -- the company's most powerful lobbyist who isn't registered as a lobbyist because he's realized that as long as he says he's not lobbying, he isn't -- has announced that no one knowledgeable or reasonable has objected to the merger. By implication, of course, this means that everyone objecting to the merger is ignorant and unreasonable:

"I have been struck by the absence of rational, knowledgeable voices in this space coming out in opposition or even raising serious questions about the transaction." Cohen added.

Meanwhile, the obviously ignorant and unreasonable Writers Guild of America West has spoken out against the merger, noting that Comcast's increasing use of broadband "caps, tiers, metering or other usage-based pricing" could create serious problems in killing off competitive online video distributors. And the eminently knowledgeable and reasonable Comcast retorted that it doesn't have any caps at all. Oh no. It's merely "testing data thresholds."

"We don’t have data caps — and haven’t for about two years," said Sena Fitzmaurice, Comcast’s vice president of government communications. "We have tested data thresholds where very heavy customers can buy more if they want more — but that only affects a very small percentage of our customers in a few markets."

Apparently, spewing complete bullshit is the only thing that counts as "reasonable" and "knowledgeable" in the minds of Comcast's top execs.

Filed Under: broadband, cable, david cohen, mergers, objections
Companies: comcast, time warner cable

Comcast Still Blocking HBO Go On Roku (And Now Playstation 3), Incapable Of Explaining Why

from the crash-the-gatekeepers dept

For years, HBO and Time Warner have refused to give people what they want and offer a standalone streaming video service, because they're afraid of shaking up their cozy, promotion-heavy relationship with the cable industry. Instead, HBO's Go streaming service has been made available on desktops and a growing number of devices, TVs, set tops and game consoles -- provided you log in with your traditional cable subscriber information. It's a half-measure, and availability to this day remains a little fractured.

Case in point: Sony this week finally made HBO Go available on the Playstation 3 (despite HBO Go launching in early 2010), but not the new Playstation 4. The new Playstation 3 version works for most cable operators in the country -- except for users on Comcast. Why not? Comcast doesn't really give an answer other than to say the massive (and soon to get much larger) company only has so many people available to ensure TV Everywhere authentication works on new devices:

"With every new website, device or player we authenticate, we need to work through technical integration and customer service which takes time and resources. Moving forward, we will continue to prioritize as we partner with various players."

Which might almost sound like a reasonable explanation -- until you realize that HBO Go on Roku hasn't worked for Comcast users since 2011, despite Roku being one of the most prominent Internet streaming devices available. Apparently, it's a matter of priorities? Comcast's argument for being allowed to acquire companies is always that these acquisitions make them bigger and more efficient. So apparently, getting simple TV authentication to work takes Comcast years longer than every other pay TV operator because Comcast is simply too big, efficient and fantastic?

Now, Playstation 3 users have joined the Roku user chorus, asking Comcast in their official forums why they can't use HBO Go, and are being greeted by the same silence Roku owners have enjoyed for years. I'm not sure you can get away with calling this a net neutrality violation (I think the term is mutated to the point of uselessness anyway), given HBO Go on Roku will work if you have Comcast broadband -- but get HBO from another pay TV provider like Dish. Still, it's fairly curious how Comcast's own Internet video and on-demand offerings (which include HBO content) tend to take priority.

The problem illustrates once again how the TV Industry's "TV Everywhere" mindset fails because it winds up taking value away from the user, not delivering it. It's also another shining example of how HBO should shake off its fears, embrace innovation, leapfrog the gatekeepers and release the standalone Internet streaming app everyone has been clamoring for.

Filed Under: cable, hbo go, playstation, streaming, television, tv everywhere
Companies: comcast, hbo, roku

Comcast Paying Minority Rights Groups To Parrot Merger Support

from the repeat-after-me-if-you'd-like-to-keep-your-funding dept

I've already talked a little bit about the media sound wall Comcast will construct to try and convince the press, public and regulators that their planned $42 billion merger with Time Warner Cable is a wonderful idea for everyone involved. Like any company with a healthy lobbyist budget, Comcast pays think tanks, consultants, PR reps, editorial writers, various front groups and a myriad of other policy tendrils to all repeat the same mantra: whatever it is we want will be great and you have nothing to worry about. As we saw with AT&T's attempted takeover of T-Mobile, anybody and everybody who wants their Comcast money to keep flowing will come out in support of the deal, whether it's rural Texas school associations, the U.S. Cattlemen's Associations or even "balloonists."

One specifically important cornerstone of these lobbying efforts involves paying minority advocacy groups to parrot your positions, given lobbyists appear to believe that these groups in particular provide an important additional layer of artificial, grass roots legitimacy to your entirely-artificial support base. AT&T's T-Mobile deal, for example, received ample praise from groups like the The Hispanic Institute, the Latino Coalition, and the Minority Media and Telecommunications Council, all of which took funding from AT&T while insisting that less competition would bring great things to American consumers.

Comcast's lobbying approach for the Time Warner Cable merger isn't all that different. The New York Times notes that the company is paying groups like The United States Hispanic Chamber of Commerce to sing the praises of Comcast's latest effort to get more powerful:

"...what the Hispanic Chamber of Commerce did not mention in its statement praising the transaction was that it had collected at least $320,000 over the last five years from Comcast's charitable foundation, which is run in part by David L. Cohen, the Comcast executive who oversees the corporation's government affairs operations...And (top Comcast lobbyist David) Cohen adamantly rejected any suggestion that the corporation's history of supporting nonprofit groups and charities, particularly groups that serve African-Americans, Latinos and Asians, was motivated by a desire to build political allies."

The usual defense from companies is that this is just us being altruistic, even though the company involved usually sends these organizations an e-mail with a list of talking points they'd like to see parroted. Losing funding if you don't play along is usually strongly implied:

"But even one of Comcast's own lobbyists said in an interview that the relationship with some groups had a transactional flavor. "If you have a company like Comcast that has been with them for a long time and continues to support them, they will go to bat for them," the contract lobbyist for Comcast said, asking that he not be named because he was not authorized to discuss the matter publicly, "even if it means they have become pawns."

The sad part is that these organizations obviously wind up rooting against their constituents' own best self-interests in the quest for continued funding. An AT&T acquisition of T-Mobile, for example, would have killed off T-Mobile and driven prices up, neither of which would have helped minorities (or anybody else). While the Comcast deal is different because Time Warner Cable and Comcast don't compete, the deal could still result in greater vertical integration, a tougher time for small and minority-owned media businesses, and the imposition of data caps and broadband overages across a broader overall market area (aka: higher prices).

Combine this sound wall of artificial support with the oodles of money Comcast is throwing at Congress, The President, and the FCC, and it starts to get easier and easier to buy approval for bad ideas. That's before you even point out that former FCC boss Michael Powell now runs the NCTA, the cable industry's biggest lobbying organization, Former FCC Commissioner Meredith Attwell Baker now lobbies for Comcast, or DOJ Antitrust Division director William J. Baer represented NBCUniversal during Comcast's acquisition. Did I mention Comcast's David Cohen is a big Obama fundraiser?

While this greasy wheeling might make the deal get approved, it doesn't change the truth that your argument or idea isn't very good if you have to pay people to support it.

Filed Under: advocacy, cable, lobbying, merger, television
Companies: comcast, time warner cable

Retrans Fights Get More Annoying As Cable Hits Users With Sneaky Below-The-Line 'Broadcast TV' Fees

from the nickel-and-dime dept

If you hadn't noticed (read: are a cord cutter), the battle over higher retransmission fees between broadcasters and cable operators has grown immensely more annoying for consumers, with last year seeing a record amount of content blacked out as the two sides fought over rates. Consumers are usually put in the middle of the battle, with broadcasters blaming pay TV companies for the breakdown in negotiations and vice versa; both sides then bombarding consumers with calls or on-screen tickers insisting they act immediately and call the other guy to complain. We've seen these fights evolve over the years to include the blackout of online content as well, with the Time Warner Cable and CBS fight last year reaching entirely new levels of annoying.

After the smoke clears, confidential deals are struck, and the pretense of caring about how much consumers are paying fades away, the costs then get passed on to the consumer as the icing on an ugly process. Normally, cable companies include these hikes in the cost of doing business on your final bill. However, a growing number of cable companies are embedding a portion of these hikes in below the line fees, allowing them to jack up your cable bill, but still advertise the same price. Comcast, for example, recently started charging users a $1.50 Broadcast TV Fee that the company insists is part of improving your entertainment experience:

"At Comcast we are committed to constantly improving your entertainment and communications experience, and we continue to invest in making your services even better. As we make these and other investments, we periodically need to adjust prices due to increases we incur in programming and other business costs. Among these price changes, we have itemized a Broadcast TV Fee in order to identify some of the rising costs or retransmitting broadcast television signals. In recent years, the cost of retransmitting broadcast television signals has increased significantly, and going forward we want to address these increasing costs through a separate itemized charge."

While I know massive multi-billion-dollar new skyscrapers don't build themselves and the $45.2 billion needed for new mergers doesn't grow on trees, I was always under the impression that part of the primary cost of doing business in the cable industry was programming -- and as such, that should be included in the normal price of service (the same service broadcast and cable raises the price of sometimes as often as twice a year). Comcast certainly isn't alone in this practice; Charter has imposed this kind of charge for more than a year, and AT&T this week notified U-Verse customers they'll now be paying $3 per month instead of $2 for the fee. If you're on Time Warner Cable, you should be getting a notice soon that they're adding the fee as well.

Again, burying ordinary costs of this kind is a common tactic in the cable TV industry, and it's a form of false advertising regulators seem to believe is all in good fun. It's useful if you're a cable operator interested in jacking up prices while keeping advertised prices the same, bumping prices on people you've convinced have signed "price lock guarantees," or raising rates on users who are otherwise paying a fixed-rate under contract. It's also useful if you want to trot out statistics showing how cable rate hikes are slightly less than they actually are. Or, as Comcast phrases it, ensuring you have a really fantastic, compelling television "experience" and are getting the utmost "value" for your entertainment dollar. Enjoy!

Filed Under: broadcast, cable, retransmission, television
Companies: cbs, time warner