Quibi Is What Happens When Hollywood Overvalues Content And Undervalues Community

from the how-are-you-doing-fellow-kids dept

As you may have heard (and may still being bombarded by ads for) recently, a new video streaming service called Quibi launched to much fanfare. The fanfare was not around the technology or the content, mind you, but around the fact that there were some famous people involved (namely: former Disney/Dreamworks exec Jeffrey Katzenberg and, to a lesser extent, former eBay/HP CEO Meg Whitman -- who had been a Disney and Dreamworks exec earlier) and the ridiculous fact that the company raised nearly $2 billion before it even had launched. There was some buzz about it leading up to launch... but mostly from the media which always falls for the story of the company that raises a ton of money and has some famous person in charge.

So far, however, Quibi appears to be yet another example of a point I made about Hollywood and the internet over a decade ago: entertainment execs have a long history of overvaluing the content and undervaluing users and what they want. Sometimes I've described this as overvaluing content and undervaluing technology (which plays into the whole Hollywood/Silicon Valley divide), but it's actually something different than that, which is ably shown by the complete dumpster fire that Quibi has been so far. They spent silly amounts of money on content, and then seemed to focus the "technology" money on a completely pointless and weird setup where the orientation of your devices changes what you see (that is, if you hold your phone in portrait orientation, what you see is not just a scrunched up landscape mode, but something different). That seems like the kind of thing that a bunch of out-of-touch execs would sit around and brainstorm without any understanding whatsoever of how real people use devices. At best it seems like an attempt to try again with Verizon's brain-dead Go90 service that no one ever used.

And, so far Quibi's living down to expectations. Within a week of its launch, things were not looking good:

After a quick moment in the spotlight, Quibi has tanked in the US iPhone app rankings.

The streaming app had a strong debut last week as the fourth most downloaded iPhone app, but quickly fell in the rankings. Yesterday, it dropped out of the top 50, and today it's the 71st most popular app in the US, according to data from analytics firm App Annie.

Quibi is now less popular than Netflix, Hulu, Disney Plus, and Amazon Prime Video among US iPhone users. It's also ranked below an ASMR Slicing app, the Calm meditation app, and the Roku app that functions as a TV remote.

Ouch.

And it's never a good sign when your head of marketing quits two weeks after launch... in the midst of a global pandemic.

Hell, even the content -- which, again, was supposed to be central to Quibi's strategy, and which they threw a ton of money at -- isn't wowing anyone:

The app itself functions as promised. The shows, though, are a mess. Quibi shows all share a few qualities: They’re short, with episode run times under ten minutes. Short doesn’t have to mean chintzy or trivial, but Quibi shows almost universally feel cheaper and less memorable than similar stuff on other platforms. The Quibi shows that are meant to seem like TV shows do feel like TV shows (Run This Town, Shape of Pasta, Murder House Flip), but their compressed run times and thoughtless cinematography just remind you of how much better they could be if they were TV shows. Camera angles and scene edits look identical to the visual design of a typical TV show, full of panning cameras and long shots, and it’s seemingly meant to signal that “this is a serious, expensive TV show!” Instead, it signals that no one’s put much effort into thinking about what this should look like when played in a vertical format on a phone. The Quibi shows that seem closest to YouTube series (Dishmantled, Gayme Show, Memory Hole) fare better, but even those feel half-hearted, all shell and no inner oomph. The worst are the movies, like When the Streetlights Go On or Most Dangerous Game, which Quibi advertises as “movies in chapters.” In their widescreen cinematography, the beats of each scene, the way they’ve been awkwardly crammed into tiny chunks, I swear you can still hear them screaming, “I’m a movie!” even as Quibi shovels dirt over their short-form-mobile-storytelling graves.

Meanwhile, almost everything that Quibi has done suggests that they really don't understand how to build a modern internet service, which starts and ends with building up a supportive community. Instead, Quibi seems to have taken some of their way-too-large-bank-account and focused on pissing off the few people who like what they do. First, they added some dumb DRM to stop people from taking screenshots (one of a few ways that content goes viral these days):

Quibi was designed from the ground up to be a mobile experience. A big part of what people do with their phones is share. They share photos from their lives on TikTok, information with strangers on Twitter, and swap memes with people on Facebook. Quibi wants to be part of that mobile universe. But by disabling the ability to let people share what they’re seeing, it has shut down a core experience that comes with being on our phones. For a self-proclaimed game-changing mobile experience, it isn’t very mobile-friendly.

Indeed, the inability to create any kind of meme-ification of Quibi content seems to be a recognition by Quibi execs that their content just isn't very good. As Kathryn VanArendonk wrote at Vulture: Let Me Screenshot Your Quibi Show, Cowards:

Screenshots, memes, GIFs, and other small excerpts are essentially forms of quotation. They act as shareable pieces of larger works, sometimes with the goal of illuminating the work they come from, but often getting cut away from their original contexts, sent out into the world to stand on their own and gather their own meanings. GIFs are the most common out-of-context excerpts of longer video works, so expressive and self-sufficient that they can communicate an idea without carrying along any of their original framework. Screenshots can function the same way, often speaking more toward the context in which they’re being deployed than referencing the original work. They become their own form of language, but as they circulate and accrete new meanings, they also make the images, reactions, stories, and personalities from the original work more familiar, more of a bedrock part of cultural discourse. Carole Baskin’s “Hey all you cool cats and kittens!” line quickly became a reference to Tiger King, for instance, but it’s also accrued its own implications separate from the show — it’s a weird greeting, an awkwardly mannered way to start speaking, a intro with just a touch of self-awareness and also not nearly enough social awareness.

And then... apparently Quibi has money to spare on lawyers, rather than people who actually understand the internet, because they actually sent a cease-and-desist letter to what might be the only podcast that likes Quibi:

Rob Dezendorf and Danielle Gibson started a show formerly called Quibiverse, a fan space to discuss the various “quick bite” content offered by the new streamer. However, the creators say that after 17 episodes, they were sent a cease-and-desist. Per Dezendoorf: “They were like, ‘Well, you can’t use the name Quibi, you can’t tell anyone that you’re about Quibi, you can talk about Quibi, but no one can know through your title and you can’t have any artwork that resembles our stuff.’” Gibson added: “It just felt so surreal to get a cease-and-desist from a billion-dollar company, about our fan podcast, in the midst of a global health crisis.”

In the end, Quibi looks like it may be heading in the same direction as other such ideas that throw a lot of money at streaming content without actually understanding what makes an internet service work (such as a community of fans). As Paul Tassi at Forbes recently wrote, Quibi seems destined to be the service that everyone's heard of and no one uses:

And yet, since Quibi’s launch during the pandemic lockdown, I have had zero, actual organic conversation about the service with…anyone.

None of my real-life friends have even heard of it, unless they’ve been mildly annoyed by the ads like I’ve been, but none are watching. The only people on my social media channels that have seen any Quibi shows are entertainment journalists where it’s quite literally their job to watch and report back what they find.

It's sad how frequently this sort of thing happens, and it would be better if Hollywood didn't always rush into things assuming it knows best (especially about technology) and assuming that all you need to do is throw a lot of money at content to make an internet service.

Filed Under: community, content, hollywood, jeffrey katzenberg, meg whitman, overvalue, streaming video, technology, value
Companies: quibi

Former Refrigerator Manufacturer Says Companies Using Open Source, Royalty-Free Video Technology Must Pay To License 2,000 Patents

from the this-is-why-we-can't-have-nice-things dept

Video streaming is a key part of today's Internet world. According to research from Sandvine, it represents 60.6% of total downstream volume worldwide. The centrality of video to the Internet experience makes video codecs one of the hottest technologies. The most popular format today is H.264, used by 91% of video developers. But H.264 is getting long in the tooth -- its history goes back two decades. An upgrade is long overdue. There's a successor, H.265, also known as High Efficiency Video Coding, or HEVC. However, the use of H.265 has been held back by patent licensing issues. As Wikipedia explains in painful detail, there are two main patent pools demanding payment from companies that use HEVC in their devices. For one of the pools, the patent list is 164 pages long. Partly in response to this licensing mess, and HEVC's high per-device cost, the Alliance for Open Media was formed in September 2015:

Seven leading Internet companies today announced formation of the Alliance for Open Media -- an open-source project that will develop next-generation media formats, codecs and technologies in the public interest. The Alliance's founding members are Amazon, Cisco, Google, Intel Corporation, Microsoft, Mozilla and Netflix.

In contrast to the proprietary and expensive H.265, the new video standard, called AOMedia Video 1 (AV1), is open source and royalty-free. Those features, and the backing of many of the top Internet companies, would seem to make it an obvious choice for manufacturers to build into their devices, leading to better-quality video streaming for end users at no extra cost.

Life is never that simple. Back in March last year, Sisvel announced a "patent licensing program" for AV1. Sisvel is an Italian company that began as a manufacturer of white goods, particularly refrigerators, and has morphed into a group that "identifies, evaluates and maximizes the value of IP assets for its partners around the world". The AOMedia group wrote in response:

AOMedia is aware of the recent third-party announcement attempting to launch a joint patent licensing program for AV1. AOMedia was founded to leave behind the very environment that the announcement endorses -- one whose high patent royalty requirements and licensing uncertainty limit the potential of free and open online video technology. By settling patent licensing terms up front with the royalty-free AOMedia Patent License 1.0, AOMedia is confident that AV1 overcomes these challenges to help usher in the next generation of video-oriented experiences.

But refrigerator companies don't give up that easily. Sisvel has just announced that more companies have added patents to its pool. There are currently 1,050 patents that Sisvel says must be licensed, but in due course it expects that number will rise to around 2,000. The fact that people can claim that there are 2,000 separate patents involved in a video encoding format is an indication of how far the patenting madness has gone. The sheer number claimed for a single technology is an indication of how trivial most of them must be -- and thus by definition undeserving of monopoly protection.

According to an article on c|net, Sisvel is "willing to pursue companies that don't pay its AV1 licensing fees". This probably means we are in for another few years of utterly pointless legal battles over who "owns" certain ideas. That's bound to cast a chill over this whole area, and to negate some of the benefits that would otherwise flow from an open source, royalty-free video standard. Companies will waste money paying lawyers, and end users will miss out on exciting applications of the technology. And all "because patents".

Follow me @glynmoody on Twitter, Diaspora, or Mastodon.

Filed Under: appliances, av1, h.265, patent trolls, patents, refrigerators, software patents, streaming video
Companies: alliance for open media, amazon, cisco, google, intel, microsoft, mozilla, netflix

AT&T Can't Get Out Of Its Own Way As It Tries To 'Disrupt' Traditional TV

from the meet-the-new-boss... dept

So we've noted a few times how giant telecom providers, as companies that have spent the better part of the last century as government-pampered monopolies, are adorable when they try (then inevitably fail) to innovate or compete. Verizon's attempt to pivot from curmudgeonly old phone company to sexy new media darling, for example, has been a cavalcade of clumsy errors, missteps, and wasted money.

Much like that time Verizon tried to launch a "tech news" website that banned reporters from talking about net neutrality or government surveillance. Or the time it launched a Millennial-focused video streaming service nobody wanted to watch. Or the time it bought Tumblr (via Yahoo), banned porn, watched everybody leave, then had to sell the whole thing for a song.

AT&T hasn't been much better as it has tried to "disrupt" the TV space. You'll recall the company spent more than $150 billion to acquire Time Warner and DirecTV in a bid to dominate streaming and the online video advertising space. But the deals saddled AT&T with so much debt, it forced the company to raise rates despite rising competition, driving many of these customers to the exits. AT&T also launched a rotating array of video brands (more than 7!) that were so confusing, it even dumbfounded the company's own customers.

Hoping to right the ship, AT&T this week launched another variant of its streaming video platform. Despite the fact that US consumers are clearly tired of proprietary cable boxes, sneaky fees, and quickly-ballooning promotional rates, AT&T apparently thought it would be a good idea to "compete" in the streaming space by launching a platform that incorporates all three:

"After 12 months paying the promotional rate, you pay the "prevailing rate," which is double or close to double the first-year base rates before taxes and fees. Under current prices, the $49.99 promotional rate for the entry-level "Entertainment" package would rise to $93 per month in the second year. The promotional $54.99 rate for the Choice plan would double to $110; the $64.99 promotional rate for the Xtra package would rise to $124; and the $69.99 promotional rate for the Ultimate package would rise to $135.

Those prices do not include an $8.49 per-month fee for regional sports networks, which applies to the Choice, Xtra, and Ultimate packages.

It's just astonishing to watch a company that has been bleeding subscribers by the boatload survey the market, carefully consider its next steps, then double down on all of the annoying shit that brought them to this point:

"Signing up for AT&T TV requires a two-year contract, with an early termination fee of $15 for each month left on the agreement at the time of cancellation. A $20 activation fee is waived if you order online...Each customer gets one Android-powered AT&T TV device and a Google Assistant-powered voice remote included in the plan, but you have to pay $120 for each additional TV box.

Telecom has long proven to be a pretty insular industry, with executives that tend to surround themselves with yes men who applaud every misstep. It's reflected in the telecom policy analyst and think tank space, and the revolving door regulators that pass from telecom to governance. They literally can't see how clumsy monopoly dominance has frustrated consumers, broken the market, and resulted in high prices, terrible service, and a cavalcade of bad ideas. As such, they literally can't see the best way to appeal to these users either, because to them...there's no problem that needs fixing.

Filed Under: at&t tv, disruption, streaming, streaming video, tv
Companies: at&t

Investor Lawsuit Accuses AT&T Of Downplaying Streaming Video Losses

from the nothing-to-see-here dept

So we've noted how AT&T's latest round of merger mania isn't providing quite the returns the company expected. After spending $67 billion to buy DirecTV and another $86 billion to acquire Time Warner, AT&T had hoped to become a juggernaut in the internet video and online advertising space. But those efforts haven't gone quite according to plan. The company has been losing both traditional TV (DirecTV, IPTV) and streaming video (DirecTV Now) customers at an alarming rate, thanks largely due to AT&T price hikes imposed to try and recoup the massive debt load AT&T acquired during its fit of merger mania.

A new lawsuit (pdf) is now complicating AT&T's ambitions further. The lawsuit, filed last week in US District Court for the Southern District of New York, accuses AT&T executives like CEO Randall Stephenson of violating the US Securities Act by "knowingly or recklessly" making false statements to investors by failing to disclose that the company's DirecTV Now streaming platform wasn't doing all that well.

More specifically, the lawsuit accuses AT&T of issuing press releases, filings, and other public statements that actively downplayed or omitted the fact that the company's streaming customers were headed for the exits (267,000 in Q4 alone), in large part thanks to several rounds of rate hikes on the company's DirecTV Now streaming platform.

The firm backing the lawsuit focuses specifically on the June 2018 registration statement issued in connection with the stock issuance during the Time Warner Merger, which proclaimed that the losses AT&T was seeing on the traditional TV front (DirecTV) weren't that big of a deal because they'd be offset by growth at the company's new streaming service. Omitted was the fact that price hikes were actually driving subscribers away, resulting in the company's stock taking a notable dive when the collective video losses were formally announced in October of 2018:

"AT&T's registration statement touted yearly and quarterly growth trends... including quarterly subscriber gains in its DirecTV Now service sufficient to offset any decrease in traditional satellite DirecTV subscribers, such that AT&T was experiencing an ongoing trend of total video subscriber 'net additions,'" the complaint said.

But in reality, "DirecTV Now subscribers were leaving (i.e., not renewing) as soon as their promotional discount periods expired, while at the same time new potential DirecTV Now customers were unwilling to pay the higher prices and therefore not subscribing at all," the complaint said. By the time AT&T bought Time Warner, "AT&T's reported 'net additions' growth trend was already reversing into a severe 'net loss.'"

Like Verizon, AT&T had hoped to pivot from stodgy old telco to sexy new online Millennial advertising juggernaut. But also like Verizon, AT&T executives tend to have a worldview crafted by decades as a government-pampered monopoly, resulting in market behaviors that don't always make sense in context. Like hiking prices on your new streaming service in the wake of soaring video competition (despite having just received a $20 billion tax cut), for example. Or buying a satellite TV provider on the eve of the cord cutting revolution, as another example.

All told, consumers are pissed at AT&T because of rate hikes and the company's frontal assault on net neutrality. Competitors are pissed at AT&T because it immediately began using its Time Warner acquisition as a weapon to drive up the cost of "must have" channels like HBO. And investors are pissed because these deals were supposed to revolutionize AT&T's business, not result in soaring debt and subscriber declines. All in all, not quite the televised revolution AT&T had promised anybody in the chain.

Filed Under: losses, streaming video
Companies: at&t

Streaming Video Sees Wave Of Price Hikes In Apparent Bid To Mimic Cable & Embolden Piracy

from the history-repeats-itself dept

One of the major benefits of cutting the traditional TV cord and switching to streaming video services was supposed to be the lower cost of service. But because broadcasters dictate the licensing cost of content for both services, it was inevitable that the sector would increasingly mimic its traditional cable counterparts. As a result, numerous streaming video services used the July 4th holiday to obfuscate an industry wide price hike, driving up the monthly subscription costs of services like AT&T's DirecTV Now, Sony's Playstation Vue, and Dish Network's Sling TV.

AT&T's price hike, a $5 bump for all of the company's DirecTV Now streaming TV tiers, is likely getting the most attention because it's the precise type of hike AT&T repeatedly stated wouldn't be happening if regulators signed off on the company's $86 billion merger with Time Warner. AT&T lawyers repeatedly claimed during the recent court battle with the DOJ that the deal would lower prices, not raise them:

"The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies," AT&T told US District Judge Richard Leon in the brief...Price benefits should flow to consumers quickly, AT&T's filing said. "[C]ertain merger efficiencies will begin exerting downward pressure on consumer prices almost immediately [after the merger]" AT&T wrote.

As with most megamerger promises of synergies and consumer benefits, that obviously didn't happen. AT&T took on such a massive debt hit from the deal, it's now looking to raise rates wherever and however possible, whether that means a price hike for TV streaming, or obnoxious and misleading fees that can help quickly and covertly pad AT&T's bottom line.

As we've long seen with traditional cable, streaming ops are imposing the rates in quiet unison, engaging in what I've affectionately long referred to as "wink wink, nudge nudge" competition. In addition to price hikes at AT&T, Dish and Sony, Netflix says it's also experimenting with a higher-priced tier specifically targeting customers with 4K and HDR capable sets. It's a tricky balancing act; these services want to pass on higher programming rates demanded by broadcasters, but don't want to undermine the entire reason that customers cut the cord and head to cheaper streaming alternatives in the first place.

On a positive note, many correctly point out that streaming is still generally seen as a real value when compared to traditional cable, something that should remain true for the forseeable future:

"Even after the current wave of price hikes, live TV streaming services are generally much cheaper than the average traditional TV bill. For packages that include major broadcast networks, regional and national sports coverage, and major news networks, the price for live TV streaming still floats around $40 to $50 per month. That's less than half the average $106 that U.S. homes spent on traditional TV service last year, according to Leichtman Research Group."

But that value could quickly be eroded if streaming operators continue to mimic their legacy counterparts, something that's less of a strain for streaming operators that are vertically integrated broadcasters themselves (Comcast, AT&T); yet another advantage compounded by the repeal of net neutrality. Streaming operators have numerous other pitfalls awaiting them as the streaming video wars truly get underway, including the rise of exclusive content deals that could force customers back to piracy if they're forced to hunt and peck between too many pricey exclusivity silos.

Filed Under: cord cutting, price hikes, streaming video
Companies: at&t

Fresh Off Its Merger, AT&T Jacks Up Price Of Streaming Video Service

from the history-repeats-itself dept

It didn't take long for AT&T's promises of merger synergies to magically evaporate. During the company's sales pitch for its $86 billion acquisition of Time Warner, AT&T repeatedly stated how the merger would result in all manner of "synergies" and savings that would be passed on to the consumer. In reality, the massive debt load acquired in the wake of the deal has AT&T doing everything in its power to try and trim its M&A-bloated balance sheet... to the immediate detriment of the company's customers.

Last week we noted how AT&T had begun flexing its muscles in the wake of a Judge's comically-myopic ruling in the Time Warner case. First, AT&T raised the price of some of its "unlimited" data plans, then axed a deal that provided HBO for free to some wireless customers. Then the company set to work raising a misleading, nonsensical and unnecessary "administrative fee" from $0.76 to $1.99, effectively providing AT&T with roughly $800 million in additional revenue every year. Such garbage fees are routinely used to help broadband providers falsely advertise a lower rate.

Not to be outdone, AT&T is also now informing the company's DirecTV Now streaming video customers that they can look forward to a new $5 price hike starting in August. The hike is necessary, AT&T claims, in order to bring "the cost of this service in line with the market":

"In the 18 months since our launch, we have continued to evolve our DIRECTV NOW products to serve this new customer set and compare favorably with our competitors. To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market—which starts at a $40 price point."

You're to forget, apparently, that one of AT&T's core selling points during the merger approval process was that owning "must have" content like HBO was going to make it easier for AT&T to provide users cheaper, better TV service. From an AT&T brief (pdf) filed at the tail end of arguments during company's recent merger skirmish with the DOJ:

"The evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices, offer innovative video products, and compete more effectively against the increasingly powerful, vertically integrated 'FAANG' [Facebook, Apple, Amazon, Netflix, and Google] companies."

Yeah, or, you know, not. AT&T also forgot, apparently, that the whole reason users cut the cord and head to streaming services in the first place is because they're tired of often bi-annual rate hikes on traditional TV service (Dish Network's Sling TV is also issuing a $5 price hike to its own Sling TV service in perfect symmetry).

Again, none of this is new. Time and time again, Americans are promised a world of synergies and savings that can only be provided if already-massive companies are allowed to grow even larger without much oversight. And time and time again, we quickly learn that the lion's share of those promises are horse shit. We then fail utterly to actually learn anything from the experience. Meanwhile, with net neutrality on the chopping block, you can be damn sure that sneaky fees and vanilla price hikes are going to be the least of our problems in the face of a reconstituted Ma Bell.

Filed Under: directv, prices, streaming video, synergies
Companies: at&t, directv

Google And Amazon Are Harming Consumers And Behaving Like Obnoxious Toddlers

from the tit-for-tat dept

You might recall that a few years ago, Amazon began banning competing streaming hardware like Apple TV and Google's Chromecast from the Amazon store because these products competed with Amazon's own streaming hardware. At the time, you might also recall that Amazon offered up the historically stupid claim that this was done simply to avoid "customer confusion":

"Over the last three years, Prime Video has become an important part of Prime," Amazon said in the e-mail. "It’s important that the streaming media players we sell interact well with Prime Video in order to avoid customer confusion."

That decision has only resulted in an ever-escalating game of tit for tat that has started to bubble over in recent months. Around three months ago, YouTube decided to block YouTube from working on Amazon's Echo Show hardware, pushing the bogus claim it was due to a "broken user experience." In response, Amazon expanded its blacklist of Google products by refusing to sell Google Nest hardware as well. This was already bad enough, but the escalating game of "who can be the most obnoxious to paying customers" was taken to yet another level this week.

For a while, Amazon managed to create a workaround that directed Echo Show users to the web version of YouTube, but Google/YouTube managed to find a way to block that too as of today. YouTube is also now informing owners of Amazon's Fire TV products that YouTube will no longer work on that hardware either, starting January 1. Needless to say, this is creating a broken experience on both hardware platforms, and customers are clearly annoyed:

In a statement, Google all but admits that the two companies are engaged in a giant game of jackass patty cake:

"​We’ve been trying to reach agreement with Amazon to give consumers access to each other's products and services. But Amazon doesn't carry Google products like Chromecast and Google Home, doesn't make Prime Video available for Google Cast users, and last month stopped selling some of Nest's latest products. Given this lack of reciprocity, we are no longer supporting YouTube on Echo Show and FireTV. We hope we can reach an agreement to resolve these issues soon."

There are numerous problems here. One being that none of this is really necessary, and that instead of settling their grievances like professionals, the two companies thought it would be a good idea instead to engage in an epic attempt at pettiness which harms openness, innovation, consumer trust, and the consumer experience. But this is also another example of how in the modern era, you don't really own the products you think you're buying, with companies more than happy to eliminate integral functionality at a moment's notice -- without much concern for the end user.

The dispute is so idiotic, it even prompted US Telecom, an AT&T-funded ISP lobbying organization, the opportunity to take a few pot shots at Google in a statement it circulated to the media yesterday:

"Broadband ISPs are committed to providing an open internet for their customers, including protections like no content blocking or throttling. Seems like some of the biggest internet companies can’t say the same. Ironic, isn’t it?"

When you're being trash-talked by what's currently the most-hated industry in America, you know you have a problem. Granted, US Telecom is engaged in some major conflations here. One, Google hasn't really clearly supported net neutrality since around 2010 or so, making this obnoxious, but not necessarily hypocrisy. Two, Amazon customers at least have the option to use other hardware, something you can't say about broadband subscribers, who usually only have access to one ISP at the FCC's 25 Mbps broadband definition threshold. This isn't a net neutrality violation, it's just stupid.

There really is no winner here. Google and Amazon could simply settle their differences like countless businesses do every hour of every day. Instead, they've decided that the best course of action was a downward spiral that punishes millions of consumers simply because the two companies' executives are unwilling behave like functional adults.

Filed Under: alexas, chromecast, corporate fights, echo show, prime video, streaming video, toddlers
Companies: amazon, google

Streaming Video Competition Slowly Begins Killing The Bloated, Pricey Cable Bundle

from the dead-and-bloated dept

If you recall, the cable industry has spent the better part of the last decade arguing that a la carte television (offering users the ability to buy channels individually instead of in bloated bundles) would do two things: raise rates for all consumers, and kill off niche channels, which the industry argued simply couldn't survive outside of the bundle. The industry repeatedly used this logic to justify its decision to avoid delivering not only a la carte, but cheaper and more flexible channel bundles in general.

Some ten years later, and you'll be shocked to learn that higher cable TV rates and the death of niche channels... are happening anyway. The Wall Street Journal this week penned an interesting look at how cable companies are increasingly culling lesser-viewed channels from the cable lineup, largely to make way for more expensive programming (read: mostly sports). The report notes that while consumers have endlessly decried the high costs and limited flexibility in the channel bundle, the number of channels in the cable bundle has ballooned all the same:

"Since 2008, the average number of channels in U.S. cable bundles has grown from 129 to 199. But people typically watch only about 15 a week, according to Nielsen. Many networks get small audiences. Nearly 70 channels that collect an average of $13 of Americans’ monthly cable bills each accounted for about 0.5% or less of total TV viewing in January, according to a WSJ analysis of Nielsen and Kagan data."

As broadcasters demand more and more money for the same content, cable providers have started either eliminating lesser watched channels from their cable lineup entirely, or shoveling these channels off into higher-priced bundles in a desperate attempt to stave off inevitable evolution.

But the die is already cast. Customers are tired of paying $130 per month for 200 (largey unwatched) channels, and are increasingly fleeing to streaming competitors -- resulting in 2016 seeing the highest cord cutting rates on record. Despite this, broadcasters continue to demand higher and higher rates, resulting in more and more annoying content blackouts and carriage fee disputes. Said disputes, which involve users losing access to content because cable and broadcasters can't agree on new rates, only act to further drive these annoyed customers to streaming alternatives.

And while cable companies have started ejecting lesser-watched niche channels from the lineup (not really as big of a deal as claimed as the PewDiePie era should make clear), consumers are expected to happily continue paying the same amount of money:

"Don’t expect cable-TV prices to fall as channels die: Cable executives say they can’t pass on savings since their programming costs are still rising faster than cable bill increases."

That's of course why many smaller phone and cable companies are getting out of the cable TV game entirely, since their lack of size for leverage in content negotiations means their profit margins are untenable. It's also why giant companies like Comcast and AT&T are increasingly merging, consolidating, and buying content factories like NBC Universal or Time Warner, in the hopes that owning the cow helps them weather the evolutionary shitstorm to come.

The problem of course is that the cable and broadcast industry will eventually have to make less money in the face of streaming competition. It's not really a choice, but it's been marginally entertaining watching the sector try and avoid this reality.

Right now, some companies are offering so-called "skinny bundles" to appease frustrated customers, hoping these customers won't notice caveats, fees and hidden charges make these options as expensive as the traditional bundles they're supposed to supplant. But ultimately the cable and broadcast industry will have to lower traditional cable prices and begin offering more flexibility if they hope to truly compete with the original programming coming from the likes of Amazon, Netflix, YouTube, and eventually, Apple.

You'll know the entire sector has actually learned some sort of lesson when the cost of traditional cable drops. Until then, most of this shuffling around of channels is little more than a superficial, aesthetic attempt to avoid the stark reality that overlarge and overpriced cable TV bundles are doomed by the rise of streaming video competition.

Filed Under: a la carte, cable bundle, competition, streaming video