Pay TV should be “afraid, very afraid” of Google Fiber, SNL Kagan says

While even its vast cash resources won’t allow it to roll out fiber to every TV home in the U.S., Google Fiber is something pay TV operators should be “very, very afraid of,” said a report issued Wednesday by research group SNL Kagan.

“Google Inc. is reinventing the business of pay TV and broadband — and it may not need to wire every U.S. city to make an impact,” wrote SNL Kagan analys Deborah Yao, in the report’s lead.

Also read: The economics of Google Fiber and what it means for U.S. broadband

Two weeks ago, in Kansas City, Mo., Google launched a new fiber-based broadband and video service.

For $120 a month, subscribers get uncapped internet access that’s 172 times faster than the national average. They get a 2 terabyte DVR, capable of recording up to 500 hours of programming and eight shows at one time. And they get an as yet incomplete but growing selection of basic cable channels, albeit one that currently lacks such powerful draws as Disney’s ESPN, News Corp.’s Fox News and AMC.

The research company quoted Moody’s investment analyst Gerald Granovsky, who said that even with an astounding $45 billion of cash on hand, Google lacks the resources to accomplish the staggeringly expensive task of rolling out its fiber nationally.

“They don’t have the cash for it,” Granovsky said. “We would be shocked if they were to expand this.”

But as SNL Kagan insinuates, Google — which spent $500 million to bring its Fiber to Kansas City — might just try. Quoting our own Stacey Higginbotham, the research group noted Google’s belief that it won’t lose money in Kansas City, with a customer-required $300 connection fee covering deployment cost.

SNL Kagan added that Google cut expenses by building its own set tops and running its fiber over aerial power lines instead of cutting them into the ground.

Also notable: Verizon spent $23 billion to bring FiOS fiber to 17 million homes.

“One could argue that Google may not have to wire every U.S. city, but just enough cities for pay TV operators to start changing their behavior,” reads the SNL Kagan report. “As Google proves that it can offer a superior product at lower prices, regulators could pressure cable and telecom operators to do the same.

According to the research group (and as previously noted by GigaOM) Time Warner Cable — the largest multichannel operator in Kansas City, with a 33.9 percent market share — is so concerned about Google Fiber, it’s offering employees $50 gift cards for tips about the service.

via paidContent http://paidcontent.org/2012/08/08/pay-tv-should-be-afraid-very-afraid-of-google-fiber-snl-kagan-says/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+pcorg+%28paidContent%29

Don’t get too attached to Epix, Netflix warns subscribers

The addition of movies from pay TV service Epix was supposed to fill the hole rival premium channel Starz left at Netflix earlier this year. But judging from Netflix’s second quarter earnings report Tuesday, Epix might not be long for the streaming service, either.

Also read: Netflix meets revenue target, misses on subscribers

In a memo to investors, Netflix CEO Reed Hastings and CFO David Wells said the company’s exclusive content licensing deal with Epix will run out shortly. They also said their agreement to carry Epix content non-exclusively runs out in the middle of 2013.

This is a bit of a surprise — when the licensing deal was signed in 2010, it was widely reported to be a five-year pact worth nearly $1 billion.

Also read: Netflix to investors – “We’re taking our profits to Europe!”

Epix is a premium channel jointly owned by Viacom/Paramount Pictures, Lionsgate and Metro-Goldwyn Mayer. It currently has pay-TV distribution through a limited number of major providers, Dish Network among them, covering around 30 million cable/satellite/telco homes.

But as evidenced by the recent Viacom/DirecTV renewal negotiations – during which Viacom pushed DirecTV hard to pick the service up — Epix’s pay-TV distribution outlook could soon change.

Meanwhile, with Viacom and Redbox finally releasing more details about their joint streaming venture Tuesday, several analysts wondered if an Epix deal similar to what Netflix has structured would be part of the content mix.

As the channel becomes less “exclusive” to Netflix, Hastings said it has less value — the streaming service’s biggest drivers, he told investors, are programs that are hard to find in the aftermarket outside of Netflix, such as re-runs of AMC series Mad Men and Breaking Bad.

“Epix is not a particularly large source of our viewing,” Hastings said.

What, really? It’s not important?

Certainly, with Starz taking Disney and Sony Pictures movies in the pay TV window with it when it vacated Netflix in February, the Epix deal brought the streaming service some big-name motion pictures it has been lacking. For example, this summer, Netflix subscribers have been able to stream the Paramount-distributed 2011 summer blockbuster Thor, and Lionsgate’s spring mega-hit Hunger Games is coming up.

Hastings did note, however, that any cost savings from not having Epix content on the service exclusively — or at all — would be re-invested into other programming.

via paidContent http://paidcontent.org/2012/07/24/dont-get-too-attached-to-epix-netflix-warns-subscribers/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+pcorg+%28paidContent%29

Report: 17% of HBO users considering switch to Netflix

About 17 percent of those who subscribe to premium cable networks like HBO and Showtime would consider using Netflix instead.

So said a report released Tuesday by Dallas-based research firm Parks Associates. Certainly, it’s a potentially consequential data point if premium cable channels that are experiencing stagnent subscriber growth suddenly face the prospect of having about a fifth of their subscriber bases up for grabs.

But there’s more.

The report also indicated that 16 percent of broadband subscribers would consider using online subscription video-on-demand services like Netflix and Hulu Plus rather than pay for VOD movies on their cable and satellite service.

“Consumers can pay for a month of Netflix for about the same amount as for two pay-TV VOD movies,” Parks Associates director of research Brett Sappington said in a statement. “Parks Associates research shows consumers know the quality of the [over-the-top] service is not comparable to pay-TV quality, but the cost-benefit comparison is enough to affect their purchase decisions.”

Updated: Parks and Associates’ online survey targeted 2,500 broadband households.

via paidContent http://paidcontent.org/2012/06/19/report-17-of-hbo-users-considering-switch-to-netflix/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+pcorg+%28paidContent%29

Suggested new movement: “Cord Trimming”

Critics say a pay TV business that regularly charges its customers $100 a month is doomed.

OK, so how about a cable bill that costs less than $40?

Yes, in between that revolutionary band of consumers who say they no longer want to pay for services and channels they don’t use, and a video content establishment that says you need to support the imcumbent pay TV model to fund shows like Game of Thrones, there is … compromise.

Also read: Pay TV  growth keeps slowing – 484k video users added in Q1

I call it the “cord-trimming” movement — if I’m watching my shows on my Xbox 360 and iPad most of the time, why am I paying for whole-home HD DVR service? If I’m spending half my viewing time on Netflix and HBO Go, what need do I have for Cloo, the Church Channel, CMT and dozens of other smaller cable networks I’ll never watch?

On Tuesday, I went into multi-channel downsizing mode, perusing the packages of the TV service providers in my Downtown Los Angeles area, Dish Network, DirecTV, AT&T U-Verse and Time Warner Cable.

Also read: Why HBO is once again TV’s most relevant network

Here are some of the cost-reducing options I found:

Dish Network’s Welcome Pack: This, my friends, is the welcome mat to nearly total pay TV minimalism. All your local channels, plus about 40 cable networks highlighted by TBS, Comedy Central and History, and a simple standard-def receiver box, all for $14.99 a month. I’d be almost completely cut off from my Lakers and Trojans, with no ESPN, TNT or regional network access. (Although a subscription to a service like NBA League Pass could alleviate some of that loss). I’d miss AMC, too, but I could “catch up” on all their series with Netflix.

What I would be able to do is watch streams from networks like Fox without having to wait eight days. I could also subscribe to HBO Go or Showtime Anytime, since I have the necessary pay TV papers for that, too. And if I watched on tablets and notebooks, I don’t know that I’d miss the HD.

Dish International Basic: If the ability to stream premium channels is all I want (plus maybe the BBC), I can choose this crazy-minimal package for $10 a month (which gives me just 20 foreign channels without local broadcast networks). I’d get free HBO and Showtime for three months, in addition to Dish’s Blockbuster-branded streaming. That alone might offset the $240 I’m paying on the base subscription over the two-year span of the contract.

Time Warner Digital Basic: Since I don’t know that I’m ready to give up sports and the HD big-screen, this $29.99 package might be a better option for me. It’ll give me all the basic authentication I need, plus access to ESPN and TNT’s HD channels. Notably, Time Warner is the only provider in my area that will let me authenticate WatchESPN. Then again, after 12 months, the price shoots way up.

Option 3: Negotiate a better price with my current provider, DirecTV: Heavens no, I didn’t levy threats. But I did lay out a reasonable argument to a reasonable woman. If I have to keep paying $84 a month for 200 channels, an HD DVR and a thin-client-enabled second TV room, I’m going to walk in September, when my contract runs out. I’ll be taking my check-writing talents to Dish … or AT&T … or Time Warner, or whoever can process and American Express. Turns out that in the cord-cutting era, these sales reps — or at least, the one I talked to — are flexibly empowered to trim prices mid-contract with various discounts and promotions. I got my monthly bill reduced by $20.

It’s a good deal for me because I use regional sports networks like Fox Sports West and Prime Ticket on a somewhat regular basis, and I can justify the added subscription cost by imagining what I’d spend to attend local home games, or to buy friends beer in order to see games at their place.

I can tack on Netflix and HBO subscriptions, and still keep my video budget under $100. I still have a DVR, so I reduce my exposure to unwanted advertising. But I’m kicking into the pot for re-transmission fees, so I’m not putting Disney, Viacom, Time Warner Inc, et. al. out of business.

Everybody — or most everybody — wins.


via paidContent http://paidcontent.org/2012/06/12/suggested-new-movement-cord-trimming/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+pcorg+%28paidContent%29

Why HBO is once again TV’s most relevant network

It was just one more small step for TV Everywhere. HBO Go will now be available on yet another tablet, the Kindle Fire, through eight out of the top 10 pay TV services in the U.S.

And it was just one more incremental move for HBO, as the premium cable company — the leading edge of parent Time Warner’s effort to move the traditional pay TV model into the IP-device world — re-establishes itself as television’s most relevant programming brand.

Also read: Preview – How HBO Go on Kindle Fire could boost Amazon’s revenue 

Yes, HBO is just as important to the evolution of the television business as it was a decade ago, just for different reasons. Instead of bucking the TV establishment with groundbreaking shows, the subscriber-supported service, which still touts an industry-leading 29 million customers, is now carrying the establishment on its back.

As traditional TV’s most proliferate brand — available on Xbox 360 game consoles, iPads, Roku set-tops and now Android tablets like Kindle Fire, through a consensus roster of pay TV operators — the fate of HBO Go is the fate of TV Everywhere.

Netflix is out there teaching consumers that they can stream all they want for $7.99 a month; HBO is trying un-teach the concept that eight bucks a month will really sustain the kind of truly premium television content you’ve grown accustomed to.

And until Netflix proves that it can reliably create a full slate of original hits, no other programmer is as boldly venturing into the multi-device world on the strength of its own content.

My zeitgeistiness is gone. Has anyone seen my zeitgeistiness?

Certainly, a number of media industry pundits have pondered what HBO isn’t anymore. In April, media writer Michael Wolff explained in The Guardian that in the post-Sopranos era, the network is no longer the “sine qua non of the modern television generation,” i.e. those who are “upwardly mobile, zeitgeisty with-it, and media savvy.”

Wolff’s essay followed a March New York Observer story headlined, Is HBO’s Luck Starting to Run Out? The Observer also pondered just how special HBO is anymore, competing in a business in which other cable programmers, from AMC to Showtime, have developed their own Emmy-winning, cinematic-quality adult programs, driven by sharp, independent creative voices.

I’ll concede that HBO has lost something in terms of cultural weight and artistic merit — it’ll never be 2004 again, a year in which critically beloved achievements like David Milch’s Deadwood, David Simon’s The Wire and Larry David’s Curb Your Enthusiasm all filled out HBO Sunday night schedules already anchored by still-running hits The Sopranos and Sex and the City.

That year was the middle of what Grantland writer Andy Greenwald called television’s “golden age” — an era, kicked off by the introduction of The Sopranos, when a former newspaperman like Simon could get a green light to explore, in the densest of all possible narratives, the interwoven institutional dysfunction of Baltimore (The Wire); or Matthew Weiner, a writer’s-room underling to David Chase on The Sopranos, could get license to make a period drama set in the white-collar world of an ad agency (AMC’s Mad Men).

These shows, Greenwald effectively argues, were developed when HBO and AMC were in their younger brand-building stages, able to take chances on acclaimed producers willing to work cheaply in order to freely explore out-there series concepts.

The business models — and the ratings expectations — have changed. Top level producers still enjoy ample creative freedom, but they need to be working off of source material with solid commercial foundations.

A producer like Alan Ball can make a show like HBO’s True Blood because it’s themed around a popular genre concept (vampires); Frank Darabont can create AMC’s Walking Dead because zombies have also proven to be box-office winners; HBO’s Girls (pictured above) can exist because Sex and the City already showed that female friends living in Manhattan works.

HBO’s hit period drama Game of Thrones? Lets just put it this way: the producers of that show came in with an eponymous adaptation of George R.R. Martin’s best-selling novels; when he was pitching The Sopranos in the late-1990s, David Chase was well-regarded as a top show-runner, but all he had was a resume that had Northern Exposure on it.

And, of course, it’s always tough to re-create the magic: After Deadwood (right), for example, HBO let Milch develop John From Cincinnati, a strange, etherial drama about a family of Southern California surfers that left viewers and critics trying to get water out of their ears. And last year, Milch and HBO missed again with Luck, a period drama themed around horse-racing that ended up losing the network about $35 million.

The cultural touchstones might be gone — not just from HBO, but from TV … everywhere. Has AMC come up with anything as fresh, profound and poignant as Mad Men or Breaking Bad? (I mean, come on, Walking Dead is fun, solid TV, but it is, in the end, just good genre television). And for however many comedic-dramas Showtime creates around female anti-heroes, will it ever top Weeds?

Yeah, I think Greenwald might be right — that magic hour, when desperate forces collided in the cable programming business and innovated the narrative story-telling capability of television, is gone. It probably ended in 2007, when Chris Albrecht, the brilliant architect of the programming renaissance HBO foisted upon the industry, beat up his girlfriend in a drunken rage and got fired; or when Rob Sorcher and Christina Wayne, the creative executives who introduced Mad Men and Breaking Bad, left AMC in a huff.

I wonder if, in the ultra-fragmented video age we operate in, where DVR/VOD appointments are always pending and the spoiler-alert status is always on orange, if we could even coalesce a water-cooler hit anymore. What would happen if you told your office mates about a new show you saw the night before set in 1960s-era Madison Avenue? If you weren’t told, “Don’t tell me about it — I have it recorded,” you might hear “I watched Downton Abbey on PBS” instead.

Maybe, as they try to get attention to their emerging original series accumens, Netflix or Hulu will achieve an old-fashioned HBO level of alchemy, but so far initial efforts like Lilyhammer and Battleground have fallen far short of the mark.

The brand plays on

For its part, HBO has moved on to its next phase of product innovation — proliferating across platforms. And the programming mandate is different.

Its hits may not command the national conversation as say, The Sopranos once did, or Mad Men and Breaking Bad still do. But measuring its audience across platforms — something HBO started doing several years ago, way ahead of most other traditional programmers — the audience for Game of Thrones this season has averaged over 10 million viewers. That’s twice the size of Mad Men‘s audience.

There was a time when shows like The Wire, Deadwood and the creepy, Depression-themed Carnival helped HBO stand out and distinguish its brand. The attention from TV critics was nice.

But when you’re fighting with Netflix, Hulu and other original-series aspirants, seeking to make potential cord cutters not just cable subscribers, but cable subscribers who pay an additional 12 bucks a month for premium channels, merely appealing to well-educated media consumers in Manhattan and L.A. may not be enough.

The Wire gets you the “zeitgeisty with-it.” Game of Thrones gets you authenticated.

via paidContent http://paidcontent.org/2012/06/06/why-hbo-is-once-again-tvs-most-relevant-network/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+pcorg+%28paidContent%29