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Survey: 7% of Pay-TV Subs Will Cut Cord

New stats that are sure to fuel the cord-cutting debate lead today's cable news roundup.

  • Many pay-TV subscribers threaten to cancel their cable or satellite TV subscriptions, but few of them actually do it. Consumer Reports found that just 1.4 percent of pay-TV subscribers have cut the cord in the last two years, but that another 7 percent are "considering canceling their service." (See Comcast CEO Dismisses Cord-Cutting Trend .)

  • Always sure not to miss a new opportunity, video guide and software firm Rovi Corp. has launched a Smart TV Field trial in the U.S. to explore how ads can be piped to connected TVs, Blu-ray players. Rovi, which will test ad campaign metrics and consumer behavior, intends to conduct additional trials in the U.K. and Canada in the second half of the year. (See CES 2011: Samsung Puts MSOs in the Picture.)



  • Hulu LLC is managing to convince hundreds of thousands of viewers to pay US$8 monthly to access full-length TV series and movies on broadband-connected TVs and other devices. CEO Jason Kilar says Hulu is on track to top 1 million subscribers for its Hulu Plus premium service by the end of 2011. (See TiVo, Roku Hook Up Hulu Plus and Hulu Opens Toll Road .)

  • Pay-TV providers will see much of their revenue from selling premium programming shift to Internet video outlets, if you buy the prediction from Akamai Technologies Inc. (Nasdaq: AKAM) Chief Media and Entertainment Strategist Chris Van Noy that half of premium video content will be consumed by connected devices by early 2014.

  • Competition from cable overbuilder Full Channel TV isn't stopping Cox Communications Inc. from hiking rates in Rhode Island by 9.4 percent beginning April 15.

  • It didn't take long for new online movie streaming service Zediva to get slapped with a copyright infringement suit from the Motion Picture Association of America .

  • Investors are betting big on Web video, with private companies focused on online and mobile video raising $477 million in the first quarter of 2011.

  • That $30 fee that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and DirecTV Group Inc. (NYSE: DTV) will be asking subs to pay for premium video-on-demand movies appearing 60 days after their theatrical debut is too pricey to generate significant demand, according to researchers at The Diffusion Group (TDG) . (See Study: $30 VoD Titles Won't Win.)

  • Dish is the first satellite provider to launch Viacom Inc. (NYSE: VIA)'s new channel EPIX, which is distributed by Cox Communications Inc. , Charter Communications Inc. , Verizon Communications Inc. (NYSE: VZ)'s FiOS and other cable MSOs. Dish subs can also access Epix movies online. (See EPIX Gains Traction With 'TV Everywhere' Model.)

    — Steve Donohue, Special to Light Reading Cable, and Jeff Baumgartner, Site Editor, Light Reading Cable

  • tomdaily 12/5/2012 | 5:08:24 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

     


    Seven per cent of Pay-TV subs may be considering cutting the cord, but it hard to imagine that they will stay away. There is just not the content that most people want to see. I could be wrong, since more people are paying $8 for Hulu, and Netflix subscriber numbers keep growing. But it seems unlikely that those guys (or vudu or Amazon) can make the numbers work - it is just to expensive to get the content rights.  The content prices will keep going up as they get more subscribers.


    It seems that the OTT content providers are addressing the needs of a niche audience. If this trend continues, maybe it is the evidence that Pay-TV needs to offer some a la carte options...

    Tony Dassow 12/5/2012 | 5:07:45 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

    Cable TV platform is simply outdated.  The days of buying 200+ channels just so you can get a couple you actually want is terribly inefficient.  The proliferation of OTT is scalable, inexpensive, and infintely flexible.

    yarn 12/5/2012 | 5:07:43 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

    I'd disgree TonyD


    - OTT scalable? Compared to what? With single digit "penetration" of the TV market, Netflix alone is already consuming over 20% of downstream capacity. That's orders of magnitude less scalable than legacy TV distribution networks because these were purpose-built for video distribution, while the Internet is not.


    - OTT inexpensive? Depends for who and for how long. As a network provider it's very costly to up bandwidth over-scription rates from 1:100 to 1:10 or less to accommodate higher concurrency rates for long form, high-bandwidth video streaming.


    But OTT is indeed flexible and is whetting comsumer appetites. Cable TV operators are responding and putting their delivery platforms through some major transformations. Recently we saw several major TV everywhere announcements that in some cases far exceed what OTT can offer, when it comes to premium content. features like time-shifting and multiscreen viewing is already making linear TV a lot more flexible and personalized. Personalized programming and content bundles are just around the corner.


     


     


     

    Tony Dassow 12/5/2012 | 5:07:42 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

    What I mean by scalable is that with OTT the user can control content much easier.  Today I can buy one song from several vendors on the 'net, Fifteen year ago I'd have buy the CD for $20 and all of the other songs.   OTT is just beginning, sure Netflix is causing 20% of the traffic, but that is my point.  ISPs will have develop products and build networks to support the demands of the consumer.  The ISPs that don't will go away and the ISPs that do will stay.


    OTT is less expensive to the consumer.  I agree that it will bury some networks that have not anticipated the trends.


    I am surprised at some cable operators, notably, CableVision with their iPad App, but alas, let the legal wrangling begin.


     

    yarn 12/5/2012 | 5:07:41 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

    The convergence of linear and IP already happened in IPTV over 5 years ago. Currently ongoing is the expansion with scalable on-demand viewing capabilities, multiscreen delivery and cloud-content ingest.

    Tony Dassow 12/5/2012 | 5:07:41 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

    Perhaps I am putting too much faith in the market, but I beleive ISPs can make money streaming video content. Perhaps linear and IP will converge someday and the customer will not even know the difference. 

    yarn 12/5/2012 | 5:07:41 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

    Aha. Well you could also say that the possibility to unbundle content like buying individual songs or shows falls more in the flexibility than the scalability bucket.


    But granted, you could say that the linear TV model doesn't scale well because increasing choice means adding even more channels. Quality content becomes diluted over hundreds of linear TV channels to the point that many people have a hard time sifting through all the filler to find value. This situation is partly caused by the way broadcasters operate and the rigidity of the linear TV model, but it was the cheapest way to offer a lot of choice around primetime to a broad audience.


    But when you start unbundling content and allow on-demand viewing to solve the issue of choice you run into scalability issues around unicast delivery, unless you make some major infrastructure changes like SDV, all-IP delivery, on-net caching and such. Even so, the right to "cherry-pick" will content-wise be cost neutral or slightly expensive to you as a consumer. It was already factored into the original pricing that you're only watching a few programs at the time out of this large selection.


    But once an on-demand viewing infrastructure is in place I think that the amount of linear TV channels could be greatly reduced. News, live events and first airings of shows would still be very suitable for linear TV but re-runs on linear TV could become a thing of the past.

    paolo.franzoi 12/5/2012 | 5:07:41 PM
    re: Survey: 7% of Pay-TV Subs Will Cut Cord

     


    Tony,


    Question for you...suppose the ISPs don't build the required network.  Nobody is making them do it.  Not a lot of high bandwidth alternatives.  Just to put a finer point on it...if I am cable, I might want you to continue watching linear programming.  DSL is either too slow for HD or something like U-verse and has a broadcast model already.  FiOS has a model for video as well.


    So suppose they say, "Nah - you want it you build it - we don't make enough return."


    Not saying it will happen, but don't assume that the service will exist just because somebody asks for it.  Unless, of course, it is turned into a Universal Service.


    seven


     

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