One of the things that’s fascinating about the impending collapse of the cable and satellite TV business model is how it exposes that the number of fucks given by any of the players about their customers is precisely none. Two examples:
* AMC and DISH have parted ways in a very non-amicable way. Since AMC has popular shows (Mad Men, Breaking Bad, Walking Dead and Portlandia), this puts DISH in a spot and AMC is piling on. As a DISH subscriber whose contract term is over, I could cancel my service at any time. So far, I’ve received 3 free months of HBO, a Roku box (allows streaming AMC shows from Amazon) and a $30 credit over 6 months to pay for streaming those those shows. Since it costs almost $3 an episode to stream it in HD, this isn’t a full solution, but since AMC will live stream the first episode of Breaking Bad for free, I’m getting a free Roku (worth at least $50) and a credit for something that so far has cost me nothing. (I’ll leave the insanity of an incumbent provider giving subscribers a device from what’s essentially the competition for another post.)
* Viacom and DirecTV are also at odds, but Viacom has decided to stop streaming The Daily Show, Colbert Report, Spongebob and other popular shows on their site. Immediately before the two parted ways, Viacom ran ads on Nickelodeon telling kids that Viacom DirecTV wants to take away their Dora the Explorer, which made some three-year-olds cry.
I realize that losing your favorite TV show isn’t like having an arm amputated, but DISH and DirecTV are contract services–viewers buy them on two-year contracts with cancellation penalties. Apparently, those contracts require very little on DISH or DirectTV’s part, since they can remove major chunks of their basic cable lineup without regard to their outstanding commitments to viewers. Even the cutthroat cell phone monopolists wait until your contract has expired to fuck you with new, more restrictive terms. Since satellite TV corporations are free to fuck consumers however and whenever they please, with no apparent regulatory oversight, I guess we just have to wait for the invisible hand to sort this out.
J.A.F. Rusty Shackleford
This is a white person problem.
http://whitepeopleproblems.us/
RossInDetroit, Rational Subjectivist
And it won’t be pretty. Get between Americans and their TV shows and you’re in for a world of hurt.
High quality new content is a minuscule fraction of the programming on cable at any moment. People just won’t settle for reruns of Rio Bravo and The Mary Tyler Moore Show in place of a new Mad Men episode.
aimai
I don’t understand this at all since I don’t get cable and just wait for a year to buy anything good on DVD, or take it out of the library. HOwever my mother, who is very politically active but also rather old, got freaked out by the full page add that featured Colbert and Stewart because she thought it was a major incursion by the Republican Party to cut “the people” out of getting useful comedic takes on the news. She demanded that I explain to her what was happening and all I could come up with was “uh…capitalism?”
aimai
Cassidy
@J.A.F. Rusty Shackleford: Actually, it’s a poor people problem. What you’re seeing is that once poor people do get work and make a little money, they shop around for the best entertainment deal for their money. Dish, my preferred sattelite provider over Direct TV, provides a lot of channels and shows for a relatively cheap price and the sports packages are cheaper and the DVR, HD, etc. They also provide more premium channels in their lower packages than cable and Direct TV do. So, once you’re done shopping around and you decide which provider to go with to get the most bang for your buck because you don’t have a lot of disposable income to go out and do entertaining stuff, there is a good chance that you’ll go with Dish. And then, you’re locked intoa contract and they don’t have to do much of anything. Even if you lose service, they don’t have to give you any money back untila certain amount of time has expired. Lose channels? Oh well, you’re in a contract. Lose signal due to storms? Oh well, take it up with god. Need your receiver adjusted? Sure, for a fee. So, not a “white people problem”, but a “people who don’t have a lot of money to throw away” problem.
This is why we went with basic cable and high speed internet and now do everything through XBox Live, Netflix and Hulu plus.
Cris (without an H)
I’m amazed that I can still watch TV for free. Cable and satellite have practically become a utility, something every household pays for and considers a necessary service — even people with low incomes. I keep expecting the terrestrial broadcast stations to call it a day and leave antenna-only households like mine to fend for ourselves, but maybe it’s still profitable, I don’t know.
debbie
For at least 5 years in central Ohio, some local station has threatened to take their programming away from Time Warner or Insight because they can’t get the terms they want. AMC and Viacom are just larger versions of the same old drama.
It’s all due to the current U.S. business model: Extortion. And considering I don’t even need cable or cash to see any of the decent stuff (I can just borrow DVDs from my local library), they’re all doomed to eventual failure.
schrodinger's cat
@Cris (without an H): I live in a valley, so don’t get any reception through an antenna, our town is too small, so no cable either. I was thinking of getting either Dish Network or Direct TV before the Olympics but this latest fracas gives me a pause.
Why aren’t cable companies hit with antitrust legislation? The market for cable is not a free market at all more like a monopsony (one buyer many sellers)
Punchy
Dish/DirectTV never made sense to me, as the shit goes out the minute more than 4 raindrops hit your back patio.
Face
Either Viacom is the dumbest company ever, or else something in this sentence does not compute.
burnspbesq
Impending collapse? Nope, not even close to impending, and the primary reason for that is ESPN.
Cris (without an H)
@schrodinger’s cat: Well yeah, it seems like MOST people are in your situation. I’m in a rural area, where not only are there all kinds of physical barriers to reception, but the stations are all low power. Why do they continue to exist at all? How many households like mine can there really be?
Niques
I subscribe to local cable with high-speed internet, and have no contract. Same channels. Can un-subscribe at any time, with no penalty. I have actually requested they cut my service for a few months until I could get back on my feet, and then had service restored with just a phone call. They are very pleasant, and seem to realize they are a service organization that wants my business.
Comrade Mary
I appreciate my antenna, which pulls in a few Toronto stations consistently and one Buffalo station if the weather gods cooperate, more and more. I watch a lot less tv these days — I can go days without turning the set on — and I’d wish I had done this a long time ago. I can now see gorgeous, perfect HD broadcasts over the air for free.
I’m hooked on Breaking Bad and Doctor Who, which I can buy guilt-free from iTunes. Other shows I crave but which are not made available for many months — I’m looking at you, game of thrones — are obtained by alternate means.
I think you have to be rich, an addict or insane to pay $50 to $150 a month for cable or satellite.
jh
The cable/satellite oligopy is shitting bricks because high-speed internet is a direct threat to their business model.
The only thing saving them is the fact that so many Americans get their internet access from their cable provider.
Right now, I have the cheapest cable package that will allow me to get high-speed internet. This allows me to watch 90% of what I want via Xbox w/ Netflix, Hulu, Zune and at least three other streaming apps/services.
I have stopped watching cable programming entirely.
c u n d gulag
I worked in Cable TV for almost 20 years, for the same company, 4 different times, before finally leaving.
Neither the cable nor the dish companies give a single solitary sh*t about their “subscribers.”
Often, they don’t call the people who pay these providers “customers,” because it humanizes them. And also, no one has ever said, “The subscriber IS ALWAYS RIGHT!”
Another problem, is that many of the Cable Telecommunications companies own certain channels.
That is an advantage that cable has over satellite.
But this causes internecine problems, like one cable company owns one channel which is in direct competition with another cable companies channel.
This often happened with sports. In the 80’s and 90’s, the basic cable TV rights were pulled in NY by both Cablevision and Time-Warner, arguing that carrying the other “companies” team, cost too much to be covered in a basic package – and thus, needed to be on a pay/premium tier.
It’s all “About Da Money!”
And, since you and I don’t have any, or not enough to be a player in cable or satellite, no company gives a sh*t about us in these “Broadband Civil Wars.”
All they care about is charging the most for the least, and to see how much they can get away with, before enough bad press starts affecting their “Screw The Fecker’s Who Pay The Money, Till It Lowers The Profit Margins Enough To Give A Sh*t!” business model.
Cable/Dish – “A Pox on all of their houses,” say I!
I may be unemployed, and have been for a long time – but I no longer have to rationalize some reason(s) to continue to work for a company that provides video crack to those who jones for their favorite TV shows, and charge them, and internet and phone customers a ton of money for sh*t that costs doesn’t cost them much – and who look at us as if we’re ants to them. Necessary – but easy to squash if they get too annoying.
The
NCSteve
@J.A.F. Rusty Shackleford:
Not to hear crazy white Republicans tell it.
Pen
I’ve never understood why, if I actually still had cable TV, I couldn’t unilaterally cancel my contract if they change my lineup mid-contract. I’m sure there’s some legalese on page 580 of the service contract where you give up that right, but I’m surprised I haven’t seen anybody force the issue with how often this has been in the news the last two weeks.
jibeaux
I cut the cord, and use Netflix and hulu, mostly. I watch everything later than everyone else, but I don’t care. There’s only so many hours in a day anyway.
NCSteve
Also, too. Time-Warner is in a pissing match with Hearst Television, which owns several local stations. They’re substituting network affiliates from other markets–usually quite distant. Many old people are becoming upset at their lack of access to local news stories about the massive crime wave that’s making one old person in three the victim of a break in. (Or, at least, that’s what I’ve gathered from watching local news).
SiubhanDuinne
@NCSteve:
Nice triple redundancy there :-)
kerFuFFler
“I guess we just have to wait for the invisible hand to sort this out.”
Is it just me or does the invisible hand seem to be populated entirely with the fickle fingers of fate?
Quincy
Perfect post title
mistermix
@Face: Fixed, thanks.
@burnspbesq: As a non-sportsfan I keep forgetting about this.
Mnemosyne (iPhone)
@jh:
I’m convinced that channels like HBO are busily trying to figure out how to renegotiate their contracts with cable and satellite companies so they can sell directly to consumers. I’m sure there are a ton of people who don’t want to spend $100+ a month for cable/satellite but would be happy to pay HBO either on a per-show basis like iTunes or a monthly subscription basis.
John of Indiana
@Cris (without an H): Cris, it’s not the broadcasters, but the FCC who’s trying to kill antenna TV. They took everything above Ch. 51 for “Wireless Broadband” and now they want everything above Channel 13 or so to give to Verizon and AT&T in exchange for lovely lobbyist jobs when Orange Julius leaves… They’re actually considering things like limiting the number of outlets in a community (“Why do you need 14 different TV stations in this city? You can get by with the Big Four and the WB”) forcing broadcaters to “share” channels, which pretty much screws getting HD if you have to pack 5 SD signals into one channel.
The idea of somebody getting video for free just doesn’t fit in with the FCC’s industry-friendly business plan.
Scott S.
I’ve been TV free for a few years — I dropped cable after getting laid off and made do with the broadcast networks. Then I moved to a town that doesn’t broadcast anything but NBC, shopping channels, Spanish channels, and religious channels. So I don’t watch TV anymore. If there’s anything I want to watch, I either wait for the DVDs or watch it online.
I never dreamed I’d be someone who willingly gave up TV, but I did it. It gives me more time to read and write, so I think it’s a good thing.
jh
@Mnemosyne (iPhone):
This is absolutley happening.
I tried to buy HBO/Showtime a al carte a few days ago. The plan was to Stream the premium channels via Comcast’s Xfinity app on my Xbox.
Well, as it turns out, I would have had to upgrade my Cable package just be allowed to have access to the Internet Streaming version of the content.
My monthly bill would have doubled instantly.
Fuck that shit.
I told the perfectly nice lady I was chatting with that she should inform her superiors that there are a lot of customers like me who would buy content if it weren’t tied to a grossly overpriced “package” that I won’t use.
Maybe one day they’ll wise up, but I predict they won’t realize what’s happening until it’s too late.
terraformer
So happy, and with quite a bit more money in my pocket, after having ditched the Dish, and bought the Leaf.
We pay $16/month for Netflix and Hulu Plus. We’ve got so many shows to watch I can hardly sleep.
BTW, MI-5 is outstanding. You never see that kind of character development, including feelings and reservations about what is being done in the name of “law and order”, on this side of the pond.
Hal
The Viacom thing pisses me off to no end. I watched The Daily Show online, rarely on tv. I don’t have Direct TV so this shouldn’t even affect me.
The real issue as I see it is a total lack of socialist, Hitleresque, regulation that might actually produce much more competition. Imagine if we had more than a handful of cable companies to provide services. But hey, I guess that’s something reserved for communist Japan, and Europe.
Cassidy
@jh: Microsoft is getting ahead of the game with all the TV and Movie apps on Xbox Live. It’s getting to the point where your gaming console is your entertainment hub.
japa21
Who is the villain, Viacom or DirecTV? The post puts all the blame on DirecTV without any evidence to support it. When I see Viacom running an ad like that, it really makes me wonder. It seems to me to be far more likely that Viacom is attempting to extort more money from DirecTV rather than the other way around. That recently happened with WGN here in Chicago. They got into a pissing match with DirecTV that took them off the air for about 1 week.
The final terms were never announced, but it did get worked out.
jheartney
Cut the cord years ago, never going back.
One thing the content industry just doesn’t get is that their audience’s number of potential viewing hours is a fixed quantity, while its access to content has been steadily growing. There are now many more hours of stuff i’d like to watch on Netflix alone than I have hours to watch it.
Internet distribution means that content is a commodity, and companies that sell it are competing for audience time as much as for audience dollars. This puts a major crimp on the sellers’ ability to extract dollars, as they are just beginning to discover. (The recording industry ran into this buzz saw some years back, and is now in an irretrievable long-term decline.)
Mnemosyne (iPhone)
@jh:
The business model of the cable and satellite companies is essentially to make you buy channels you don’t want so you can have the channels you do want. So, for example, we’re forced to buy the “tier” that includes all of the Fox News channels if we want TCM (which is our one Must Have cable channel).
If one of the big pay cable channels like HBO or Showtime is able to cut the cord and offer their programming directly to consumers, all bets are off.
Ed in NJ
@burnspbesq:
I’ll disagree. The WatchESPN app which allows for watching live sports on your phone, tablet, or XBox seems to be a precursor to offering ESPN to consumers directly. At some point, when stations wake up to offering a la carte service, ESPN will already have their infrastructure in place.
jheartney
@John of Indiana: Am I the only one that thinks “wireless broadband” is an utterly insane idea? We have a limited quantity of wireless bandwidth, which we are going to chew up sending signals to fixed locations? Huh?
jh
@Cassidy:
MS got the leap on its game console competitors because it saw the writing on the wall before they did.
Not only did they build a console with connectivity, but they set up a decent, if not perfect, infrastructure for content delivery. They also got a huge headstart by getting a more elegent Netflix solution than any other console system.
Sony dropped with ball with their PS Network which is free (unlike Xbox Live) but isn’t nearly as user friendly, and has been taken down by hackers at least two times that I know of.
Nintendo’s Wii was revolutionary in many ways but it’s onllne experience seems like an afterthought by comparison.
This is truly one of the few sectors in which MS found success by providing a better experience for its customers and charging a premium for it, much in the same way Apple has done.
KXB
I’ve had good experiences with Wide Open West (WOW). We use them for hi-speed internet and TV. With their most basic HD plan, we get every channel in HD, a bunch of on-demand shows, including NBC, ABC, FX (great for shows like Louie & Justified), almost a hundred music channels. Since we have a Google TV, we can stream Netflix using the wi-fi setup in the house. After taxes, which make up almost 15% of the bill, we spend about $87 per month. They are prompt with replacing equipment and if there is a problem that needs a technician, they send them out at no additional charge.
But I have long advocated a la carte pricing. We use maybe a dozen channels. I don’t need CMT, BET, MTV – or any of the channels that simply report what is happening on the other channels.
Pee Cee
@KXB:
Dish Network used to do this when they started up back in the late ’90s. If I recall the pricing correctly, it was either a dollar or a dollar fifty per channel with a minimum of 10 channels.
Cassidy
@jh: It may not be perfect, but streaming is damn near flawless. Hell, I ordered a PPV UFC fight off of XBox Live’s UFC Channel this past weekend and had less signal disruption than when I had dish. I’ve never ordered PPV off of cable. I counted two times where the signal scrambled for a quick moment.
dcdl
@Ed in NJ: How much is the app for WatchESPN? Also, what exactly do they have on it? Just live games or some talk? I’m really looking for something like ESPN on cable with the talk shows and such. My husband loves sports and that is one reason why we haven’t gotten rid of it. I know I can get ESPN through the computer, but my husband really wants something like the cable ESPN. I don’t want to pay $50 or even $20 a month for it. As it is only I pay $118 with taxes a month for internet, phone, and cable. Would like to have just have to pay for internet at some point.
Also, are there apps for like watching HGTV, Travel, Cooking channels, and such?
Thanks.
Cassidy
@Pee Cee: If I remember right, what changed is that Dish started bundling more premium content with lower packages, effectively making the a la carte useless.
Villago Delenda Est
Video killed the radio star
Fleem
@jheartney: You have got to be kidding me. Almost 30% of the population in my town has ZERO access to wired broadband, not even DSL. There’s no profit incentive to give it to us. I use a cellular connection, like the kind people used to plug into their laptops before that stuff was built in, for all my household internet. And I spend two days a week working from home. It costs $10/Gb to go over my 4 GB bandwidth cap. Streaming is a no-go.
If DirecTV doesn’t sort its shit out soon, we will drop it, because practically all we watch is Comedy Central and Nickelodeon.
Edit: All this to say, I am heartily sick of people saying “let them eat broadband”.
N. Eugene
They’re giving you tons of free shit to try to keep you as a subscriber and you say they give zero fucks about their customers? What sort of logic are you using there?
It’s a two-party negotiation, and DISH can’t be blamed for not simply paying whatever AMC asks. You have to blame AMC just as much for the two sides not being able to come to an agreement.
Also, we’re talking about TV. If you can’t afford to pay the prices the providers are asking, maybe you go without TV?
Ed in NJ
@dcdl:
It’s free, but unfortunately, it’s only available if you have the participating cable provider, so it’s pretty redundant right now (why do I need to watch ESPN on my Xbox if my TV has the channel?). And it’s mostly just live sports events (or replays of recent events). But I just assume the goal is to eventually be able to offer it as a free-standing, fee-based service, like Hulu or Netflix.
RossInDetroit, Rational Subjectivist
I was too busy for TV in the mid ’70s so I quit watching. I managed to keep myself busy enough that I never went back. I’m astonished at what people pay for television. I can see paying it if you’re a sports fan or want a lot of programming for your kids. But OTOH, wouldn’t you and the kids be better off outdoors watching a minor league team play than indoors watching the ‘tube?
That said, I do enjoy some of the recent shows, and my wife has talked me into renting them on DVD. Glad I did, but I’ll never go back to watching content on their schedule or watching commercials. Life is just too short.
Steve M.
Can’t wait till our Galtian overlords do this to the Internet.
Pee Cee
@Cassidy:
I used to subscribe to the package. What happened to it was that certain providers didn’t want their channels to be offered via the a la carte pricing and Dish then eliminated the option. It was great while it lasted, though – especially when paired up with a premium movie package. Ten hand-picked channels and a set of premium movie channels for just under $20 (found one of my old bills).
Martin
I’ve been warning people about this for ages.
The studios currently need ~$50 per US household per month to turn out their content. That subtracts out all of the costs to transmit – the cable, satellites, etc. That’s just the cost of content.
If consumers demand a model that delivers less than $50/month, they’re demanding that content either be reduced in quality or in volume. It’s either going to be fewer shows or worse shows (subjectively speaking), or a higher cost for the most popular shows. That $50 can be delivered any number of ways (ads, subscriptions, etc.) but it needs to be delivered and the networks and studios are going to choke off all avenues that don’t deliver it, as Viacom is doing right now, and Netflix has noticed as well.
Don’t get me wrong, ala carte is very desirable, but if everyone chooses their favorite 10 channels, and nobody pays for 100, then everyone is going to have to buck up an average of $5/channel. That’s just the economics of it. ESPN earns $11 per household. That’s your ala carte price for sports just for that channel. ESPN2 is another $6, IIRC.
There’s room for efficiency in content delivery and its a market that is desperate for disruption, but nobody will be able to disrupt it until they figure out how to preserve that $50/household number. That’s a line in the sand that the set-top box guys and Netflix knows exists, but don’t know how to meet. It’s a wicked hard problem. The technology is there to do it, but nobody knows how to make the economics work, mostly because every person I’ve talked to about this who would like to see X, Y, Z done, when you unwrap their rationalizations at the end just wants to pay less. Paying less (in aggregate) is the only thing that really can’t happen.
mattH
@Fleem
This is why we should have been treating “last mile” internet infrastructure like a public utility. Relying on private companies for infrastructure creation that also creates a monopoly for the very same companies will only make this worse.
@jl
I’m curious, do you get any free content with your current $60 a year? While admittedly not a whole lot, until the Roku came out, I’d say half or so of the Wii’s sold once it became known that it streamed Netflix was primarily for that use. I’d be interested in how many stayed as simply a media server. Most people are already buying the content through the providers, why pay extra for a service that is mostly about game connections, server hosting and rent extraction if they don’t game? Wouldn’t it just be better for non-games to buy a Roku or similar device and save the extra $60 a year? Oh, and don’t forget the layout change last year to add more advertising space on Xbox Live.
Shazza
@Punchy:
I’ve had DISH for 18 months and only had 1 problem, the snow built up in my DISH but once I swept it out, the signal returned. I’ve had more tech issues with Comcast then I have with DISH.
mattH
@Martin: A bit of clarification if you don’t mind, $50 per household that watches said content, or from every household that is plugged in, regardless of who watches it? In other words, how much of the major’s content price is a result of essentially free riding. (Of course this isn’t about the small stations, like BYUTV, essentially being supported by the big desired stations, which is an annoying aspect as well.)
Gravenstone
@Fleem: Yeah, I’ve often ranted elsewhere about this broadband snobbery bullshit. For large portions of the flyover country, broadband is a fucking myth! I live about 5 miles from the nearest town, too far to receive their cable system. Too far to receive DSL, and due to geographical features, I can’t receive the standard wireless broadband the regional isp’s offer (unless I wanted to erect a 75′ tower at my own expense, and even then not guaranteed access).
When I moved out here, I started with one of the satellite broadband providers, but they’re another joke. Actual transfer rates are normally 15-20% of nominal values, plus they have the baked in latency issues due to travel time of the signal to and from the satellite (I averaged 1300 ms, does wonders when one wants to play online games for example). I’ve since moved on to what is basically a cell based system like you described, although more robust than the laptop widgets. It started out as a nice alternative, respectable latency (~100 ms) and >80% of the nominal transfer rates. However, as the system has taken on more users without any infrastructure improvements, service is steadily declining. Now averaging 250 ms latency and often < 50% of nominal transfer rates.
There really needs to be a national effort to expand broadband, ideally fiber based, to every household in the country. It really is becoming just another utility, and like electricity or phone should be provided to all citizens. I know the administration is making efforts to expand access, seeming to focus on the wireless boradband side. But just fucking nationalize the damned thing, make it a TVA for the 21st century. Just think of all the jobs available laying that backbone.
/meandering rant off
freemark
This problem os more on the provider side than distributor side. For example if Comcast, Dish, etc want ESPN they must also buy Disney, ABC family, etc. Making it just about impossible for distributors to offer ala carte pricing.
Fleem
@Gravenstone: Hellz yeah. You could be my neighbor. I actually have two cellular connections, one is a Verizon 3G thumb drive plugged into a Cradlepoint router and attached to a truck antenna mounted on the roof of my house. The antenna is because without it, Verizon’s signal out here is so weak that the thumb drive alone can’t pick it up inside the house. With the antenna it’s pretty good. That’s my work connection, and is permanently plugged in.
The other is an AT&T MiFi (a remarkably shitty piece of hardware) that my husband and kid use to watch YouTube vids. Initially this was faster than the Verizon connection because we bought it right after AT&T put a tower a third of a mile from my house. Lately the Verizon connection has been faster, though. Maybe Verizon got space on AT&T’s tower. I can use this for failover if something funky happens to the Verizon connection, or vice versa. This HAS happened before.
We, too, tried and ditched satellite.
As for nationalizing broadband, you are preaching to the choir, as far as I’m concerned.
tones
I actually love the dish network service , and living by the coast it is literally impossible to get any channels or radio stations.
That said, the service has never gone out during any weather or storm no matter how violent -people who say it goes out during weather are not correct.
I have heard that in the past it was the case, but my dish points toward trees and the ocean and never goes out.
brettvk
@Martin: If the studios are demanding $50 per month per household, I’m proud to say that I’ve personally deprived them of revenue for more than 15 years now. It’s not like there isn’t plenty of other content — books, music, the ‘net — to fill the time. I think jheartney’s point at 32 is salient; how many eyeball/hours are you willing to give away for free to the channels, in addition to the hard cash you’re throwing at them? I say to hell with it.
YellowJournalism
All this talk about shows just makes me want to whine about how Canadian Netflix only has season three of Dexter, and I really want to catch up to season six while there’s nothing else on TV.
There. I feel better.
Maude
The prices went up after the 1996 telecommunications law.
Rob
This is late to the conversation but Portlandia is on IFC.