One Million Cord Cutters

We are #Winning!!

An estimated 1 million homes decided to cut their cable television and depend on their antenna, Netflix subscription and the web for entertainment last year, according to an April report from the Convergence Consulting Group Ltd.

That comes on top of the 550,000 homes that ended their cable TV subscriptions in 2009. It predicts another 520,000 homes will cut their cable TV this year.

Have you cut your cable tv cord?
Ellen Lee, April 7, 2011

Collateral Damage

Duck and cover. Are you on Time Warner Cable? Hopefully not. Otherwise, the newest installment of the Programming Wars will place you right in the firing lines.

On Tuesday, Sinclair announced in a press release that it had ended negotiations with Time Warner after the cable company rejected Sinclair’s most recent offer — which would hike fees by about 10 cents per subscriber. Time Warner also said that it wouldn’t make a counter-proposal.

As a result, the cable company may end up dropping Sinclair television stations — it owns 58 local affiliates in markets around the country — once their contract ends at midnight Dec. 31.

What does this mean? Well, if you are on Time Warner Cable, you will no longer have access to 33 television stations, including the Fox affiliates and the Disney ABC affiliates. The full list of affected channels are below.

Q: Where’s the best way to avoid getting caught in the shrapnel?
A: Go outside! The perfect New Year’s resolution is to get up off the couch and enjoy the wintery weather. Instead of cussing the greedy cable company and broadcast groups, spend time away from the boob tube in the great outdoors.

Q: What do you think of this paragraph from the Sinclair FAQ.

This is simply a good commonsense business decision on the part of Time Warner that would benefit their subscribers. Right now, subscribers are paying for Time Warner Cable to carry hundreds of channels, even though many of the subscribers never watch many of these channels they are forced to pay for. This is sort of like a restaurant charging you for dessert even though you aren’t interested in eating it. Ratings indicate that our stations are the “main course” for most television viewers and Time Warner Cable should pay an appropriate amount for the right to resell that programming, rather than using their subscribers’ money to pay for programming that most of them don’t ever watch.

Sinclair is tapping into our food analogy. Unfortunately, Sinclair doesn’t push this logic to the ultimate conclusion… if the programming is like food served at restaurants with the MVPD as the restaurant owner and Sinclair as one of the wholesale suppliers, the customers should be able to SELECT which items to order off the menu and ONLY pay for the food they order. Instead, we are being forcefed programming. And you, the customer, are paying for what the average customer consumes at the “restaurant.” We are already struggling with obesity without you subsidizing your neighbor’s cable bill.

I’m a football fanatic! Does that mean that I’m not going to get my NFL Sundays?
Football Fanatic. You’re lucky. The suits at Time Warner had some perceptive foresight. They included a clause in the most recent deal with News Corp to provide continued access with ALL content for the Fox broadcast network. That’s right, you can still watch “Glee,” “House,” and even NFL Sundays. Are you ready for some football?!?!

Sinclair Ends Talks With Time Warner
Theresa McCabe, December 29, 2010
The Street

The list from the Sinclair website:
“The following 33 television stations located in 21 markets are currently carried by Time Warner and Brighthouse under the agreement with Time Warner which is scheduled to terminate on December 31, 2010: FOX AFFILIATES: KABB (San Antonio, TX), KBSI (Girardeau, MO), WDKY (Lexington, KY), WPGH (Pittsburgh, PA), WRGT (Dayton, OH), WSYT (Syracuse, NY), WTAT (Charleston, SC), WTTE (Columbus, OH), WUHF (Rochester, NY), WUTV (Buffalo, NY) and WVAH (Charleston, WV); ABC AFFILIATES: WCHS (Charleston, WV), WEAR (Pensacola, FL/Mobile, AL), WKEF (Dayton, OH), WSYX (Columbus, OH) and WXLV (Greensboro, NC); CBS AFFILIATE WGME (Portland, ME): NBC AFFILIATE WTWC (Tallahassee, FL): CW AFFILIATES: KMYS (San Antonio, TX), WLFL (Raleigh, NC), WTTO (Birmingham, AL) and WVTV (Milwaukee, WI) and MY NETWORK AFFILIATES: WABM (Birmingham, AL), WCGV (Milwaukee, WI), WMMP (Charleston, SC), WMYV (Greensboro, NC), WNYO (Buffalo, NY), WNYS (Syracuse, NY), WPMY (Pittsburgh, PA), WRDC (Raleigh, NC); WSTR (Cincinnati. OH), WTTA (Tampa, FL) and WTVZ (Norfolk, VA).”

Be Yewy Quiet… We’re Hunting Wabbit (ears)

That’s right Elmer Fudd, households across America are going rabbit hunting. Not for Bugs, but for the rabbit ears. Today, the NY Times had a front page exposé on some households, hit hard by the recession, deciding to forego their cable. Bye bye $150/month bill. Curious? Think you might only get a few TV channels? Guess again.

In St. Paul, for example, where Ms. Bayerl lives, there are extra channels from ABC and NBC with local news and weather, four public television channels and a music video channel. Big markets like Los Angeles have 40 or more channels, according to Nielsen.

Like a fine wine, the rabbit ears could use a good pairing. What about the personal wi-fi hotspot through a mi-fi device? Reasonably-priced high speed internet and over the air basic cable? The modern household is going back to the future.

Rabbit Ears Perk Up for Free HDTV
NY Times
Richtel, Matt and Jenna Wortham
December 5, 2010

How to Really Get What You Paid For

This morning, I was asked for a reaction to this ad running on many websites in our area:

Get the Facts from FOX
DISH Network may not have FOX as of Nov 1. Learn more now!

First, you’re welcome FOX for the free advertising. Please feel free to reciprocate if you can’t sell through all your ad units for the World Series. This is simply another fight pitting network vs cable/satellite company over fees… yup, are fights ever over something other than land rights or money?

But it would be tough to have a sense of humor about these ongoing disputes if you were the one settling into a relaxing evening on your couch. You grab the remote… channel over to FOX… and WHAT THE HEY? How come I can’t watch the World Series?

Well, it’s because we have a outdated system. The FOX network is looking to ratchet up the amount they receive in retransmission fees and subscriber fees. DISH wants access to the channels for their subscribers but they don’t want to overpay… or else, they will be forced to pass through the price increase to their subscribers. If this dispute goes much longer, DISH is at risk for losing a substantial number of their viewers who might switch to DirecTV or another provider. Customer attrition would create even more pressure on profitability. Long-term, DISH could be at risk for going out of business. One less multichannel video provider probably means less competition and potentially higher prices for all viewers.

The question, my friend… what is fair?

Well, I have a pretty good idea that $1.99 for a cup of coffee. Why? Because that’s what I paid at the coffee shop this morning. If they priced it at $2.99… I might have decided to get something else because it was too expensive. Or maybe it would’ve been worth the premium.

But what did you pay to watch all the programs on FOX this past month? 10 cents? $1? $5? Or more to the point, what would you pay to watch all the shows? FOX believes that you are willing to pay more… potentially a lot more because their programming is killer. DISH believes that you might like to watch FOX but there are hundreds of other channels that their households are also watching. They need to pay for them all.

Until we move away from bundled pricing, we will continue to be stuck with these disputes. It’s time for us to band together. Instead of being stuck in a tug-o-war, let’s join together and push for a la carte pricing. Then you will truly get what you paid for!

No MadMen – I’m Sad Man

“Advertising is based on one thing, happiness. And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams reassurance that whatever you are doing is okay. You are okay.”
– Don Draper, Mad Men

And TV is based on one thing… advertising. Well, that was a long time ago. Now, it’s all about subscriber fees and retransmission fees. And as long as we are stuck in the current paradigm, these programming wars will be the norm.

So it’s no great surprise that AT&T U-Verse is now going to the mat against Rainbow Media. And of course, they are taking their fight to the streets… well, the intertubes. vs I think Round 1 goes to Rainbow Media cause I know you want your TV channels. You see, TV is the entrancing tractor beam that lulls you into reassurance while you allow your brain slow to an idle before going to sleep. Nevermind, I like the Don Draper quote better.

That said, there’s a hint of hypocrisy here as Rainbow Media is owned by Cablevision. Yup, the same Cablevision that was on the other end of a Programming war with ABC over retransmission fees.

But who really cares. The problem is for the innocent viewers caught in this tug-o-war and all they want to watch is their favorite show. If only there was an option to purchase channels a la carte. Then channels could set the fair price and the viewers would vote with their wallets.

And if you haven’t become addicted to Mad Men, check out this 3 minute clip:
The Carousel
“Technology is a glittering lure… but there is the rare occasion when the public can be engage on a level above flash if they have a sentimental bond with a product.”

MadMen premiere may go dark for AT&T customers
SF Chronicle
July 14, 2010

Fire the Cable Company

In the Bay Area, we have our fair share of contrarians, counter-culture, and captains of contradictions. It’s a lot easier for me to create an alliteration than for us to get 10 people in a room and have them agree on anything.

Today, when reading the front page article in the San Francisco Chronicle about cord-cutters and the coming challenge to the cable companies, I was surprised to read a certain comment. Actually, it wasn’t so much the comment that surprised me, but the fact that 53 people agreed with the sentiment and not a single person chose the “thumbs down.” (as of 10:50am on Sunday, July 4th… Happy Birthday America!)

I could make a comment that I’m anti-Osama or that I like puppies, and I’d still have at least 10% of my fellow residents disagree.

Nothing would make me happier than to fire the cable TV company and rid myself of its arrogance, poor service, forced unwanted channels, regular unwarranted rate increases, and unwanted foreign language channels I am forced to pay for.
9:23 PM on July 3, 2010

So if everyone is so anti-cable, how come no one has stepped up to offer up a better alternative?
Internet products ready to challenge cable TV
James Temple, San Francisco Chronicle
July 3, 2010

Death of TV

“Death of TV”… not my words. It was the latest hyperbolic tag used by Bill Gurley, GP at Benchmark, in writing about the cable industry. His garrulous manifesto basically says that the status quo will remain for longer than what others might think. I’d prefer such a creative thinker to use his talents sharing insightful tidbits on what might happen when… instead of simply concluding that there could be digital Armageddon, “[b]ut with $32 billion on the line, don’t expect it to happen overnight.”

Bill, the cable industry will come unraveled… and my prediction is 2012. That’s right. The next two years will be marked by consumers complaining about increased rates and cable providers sparring with networks over affiliate fees. There might be a couple flare ups, but over 98% of households will continue to watch TV in their own homes. Comcast might even continue to be a good investment even though I can’t go to a cocktail party in SF without hearing someone complain about their cable provider. Of course… Comcast has a neighborhood monopoly.

But then, a CRASH! Think Black Monday. October 1987. The cable industry is like a giant Jenga game. It might take a long time to build, but trying to get that last piece positioned perfectly on the very tippity top of the wobbly structure is just enough to make it FALL! JENGA!

Comcast households pay on average almost $120/month.. that’s almost $1,500 per year for their content. As un- and underemployment continuing to increase, there are more pressures on a household to cut their costs. Entertainment is ripe for the trimming.

Bundling masks the true economics of the cable industry. The enormous issue, dare I say bubble, is that we are forcefed a gluttonous amount of content when most of us would be better served with smaller portions of quality programming. As soon as a small cable provider creates this option… watch out! the floodgates will open, households will be able to selectively pick their programming and in most cases trim their costs anywhere from 20% to 80%.

It is already happening in Hong Kong and Canada. When will it happen in the United States?

Bill Gurley
Here’s How The TV Business Actually Works
Business Insider
April 30, 2010

Stay Rich, Bundle Up

Do you recall that timeless Malt-O-Meal commercial from the 1980’s? A mom is preparing her child for a trudge through a storm… packing on layers of sweaters and coats. He walks out into the blizzard, but a moment later, he opens the door and exclaims, “I think I need some more Malt-O-Meal.” Spare the 30 seconds and rewatch this classic.

Our economy is in a deep freeze. Unemployment rates continue to spike and almost all businesses are discounting their services to keep the lights on. Except for cable. They continue to ratchet up the cost of their service year after year. Like the kid in the commercial though, we don’t need more layers, we need our Malt-O-Meal. Stated differently, we have hundreds of channels… what we really want is quality programming.

Why is Big Cable giving us bundles of “sweaters” and “jackets?”

Unbundled business models would threaten $25.4 billion in annual affiliate retransmission fees paid by cable TV operators to programmers, according to Barclays Capital’s Anthony DiClemente. Even as traditional TV advertising and DVD sales decline, nascent digital ad and pay-to-play revenues remain too small to make up the difference.

Big Cable seems has too much to lose to offer a la carte to their subscribers. 25,400,000,000 reasons per year to keep bundling us up. Sure it is cold outside, but wouldn’t it be wonderful to pick your own programming. That, like Malt-O-Meal, will keep you warm on the inside.

To Bundle Or Unbundle? That Is The Question
Diane Mermigas
MediaPost, March 5, 2010

Say’s Who? Sezmi!

A quick welcome to our newest members! You must have a great friend to have heard about our growing movement. Although some of our most loyal members have come to this site out of hatred of their current cable provider, let’s take a moment to reset our focus. We are most likely to make true progress only when we are able to join together and agree on a mission. We seek a telecommunications package that is personal, reliable, and affordable.

Recently, Sezmi has launched a new product/service providing local TV, web and thousands of movies through their souped up DVR. Although they are limiting this initial launch to SoCal, we hear that their service will be made available across the U.S. over the next year. For the local TV programming, they are relying on the ATSC standard… also includes HD feeds of these over-the-air stations.

Before you rush over to the store to purchase, there are a few drawbacks. You must already have a connection to the intertubes. And they do not currently have access to the most popular sporting content including the stable of ESPN channels or the RSNs. Ugh!

But for those willing to make a compromise here, they have a very affordable package for popular cable channels and on-demand movies. The basic package is $4.99/month with the premium select-plus package at $19.99/month. I believe Best Buy is their exclusive distributor of the DVR unit starting around $300.

Although the Sezmi is not a true à la carte service, they are one step closer to providing a more affordable, personalized entertainment console.

Hat Tip to David Gehring for sharing this nugget.


The Eagle Has Landed

“Houston, Tranquility Base here. The Eagle has landed.”

Ok, maybe not quite as epic as the first words from landing on the moon. But given the incredible… no make that INCREDIBLE resistance by Big Cable to contemplate incorporating progressive technologies and business models that would benefit us, the consumers, this move might portend space travel coming to the airways.

Bell TV… just gave their customers a whole lot more flexibility with how they subscribe to TV channels. In a first for the North American continent, you can now subscribe to exactly the channels you want for $2 a channel. Given that the average person only watches 15 to 17 channels of the 300 or so they have access to, this is quite a deal.

Smart move Bell TV. You will now be blessed with something we like to call FREE ADVERTISING! Instead of hiring Shaq and Ben Stein as pitchmen for lots of $$$, you opted to created a service with more FLEXIBILITY and better pricing for your viewers. How novel! And instead of creating some crazy complex pricing model, you decided on setting a reasonable fixed price and $2 a channel. Ahhh, simplicity.

UPDATE 3/5/10:
Vidéotron, another Canadian media company, offers a twist on à la carte with a basic service allowing the subscriber to pick 15 channels for $37/month. Thank you Genesboys for the heads up!

The one problem for us… Bell TV is located in Quebec. And since you’ve been watching the Olympic Games, you know that Quebec is a province in Canada. Still, with this experiment now underway, we are that much closer to this type of service in the States. Of course, it only counts when this is offered on our block. Join your neighbors and bring the TV a la carte movement to your block!

À La Carte Hits North America
Colin Dixon
February 12, 2010, TDG Opinions