Major sports leagues earn BILLIONS of dollars every year. That money comes directly from YOUR cable bill.

Playstation Vue Is Yet Another Sign That Cable TV Is Moving Online

PlayStation Vue logoCBS and Turner are paying roughly $771 million this year for the rights to the NCAA Men’s Basketball Tournament. Reports such as this and this suggest that advertising revenue for March Madness will easily surpass last year’s $1.19 billion haul.

If you’ve been watching any of the games this year, you’ve probably seen some cable company-bashing ads for something called PlayStation Vue. Sony’s new IPTV service, which went nationwide this week, offers a package of 55 cable channels — including ESPN, Fox Sports 1, NBCSN, TBS, TNT, and TruTV, which, as it turns out, is a thing — for $29.99/month. Despite its name, PlayStation Vue does not require owning a PlayStation; Vue apps are available for Amazon’s Fire TV (but not Roku) and iOS (but not Android), and the iOS app has Chromecast support.

With the nationwide launch of Vue, Sony becomes the second major player in the internet TV market. Sling TV pioneered this market when in launched its $20/month package last year. It now faces formidable competition from Vue, which offers a more complete selection of pay TV channels for only $10 more per month.

More competition is coming, too. AT&T recently announced that it plans to launch its own internet TV service called DirecTV Now, which will allow TV lovers to ditch the satellite dish in favor of online streaming. What’s more, Time Warner Cable launched a trial program within its New York City footprint that offers a free Roku 3 and access to local channels for $9.99/month. Its Roku Trial could extend to other TWC-controlled regions before the end of the year. Charter has a similar Roku app for TV customers in its footprint.

All of these moves are signs that cable television as we know it is moving toward becoming an online video service. Several factors are driving this sea change:

  1. The amazing growth of streaming services like Netflix and Amazon Prime,
  2. The increase in sales for set-top devices like Roku and Chromecast, and
  3. The recent increases in cord-cutting and cord-shaving, which are driving interest in “skinny bundles” — smaller, more focused packages of cable channels that don’t cost as much as bloated pay TV bundles full of channels nobody watches.

These trends appear to be dragging big TV networks in their wake, and the likes of Disney, Fox, Turner, and even Comcast-owned NBC suddenly feel the urge to mimic Netflix’s winning strategy of being on as many devices as possible. What’s more, the mere notion of AT&T — a company that fought net neutrality every step of the way, that lobbied against municipal broadband to ward off potential competition, and that claimed that no company would use “their pipes” for “free” — wanting to send live HD video down other ISPs’ pipes is a clear sign that this trend isn’t reversing course any time soon. (Not to mention an irony richer than Donald Trump.)

Two major changes will come about as more of these cable-like streaming packages come online:

  1. Comcast (and other ISPs) will be forced to eliminate bandwidth caps.

It’s one thing if Netflix CEO Reed Hastings or Sling TV CEO Roger Lynch complain about data usage caps to stifle competition and force customers to subscribe to Comcast’s TV services for video. Just wait until AT&T CEO Randall Stephenson lays into Comcast. What does FCC Commissioner Ajit Pai, a notorious big-cable flunky, do then? His head might explode if he finds himself stuck between AT&T and Comcast on any net neutrality-related issue.

What’s more, if history is any indication, FCC Chairman Tom Wheeler seems very likely to side with AT&T, forcing Comcast to be competitive (for a change) and remove those excess bandwidth charges. (Such a rule would apply to all ISPs, too — including AT&T.)

  1. At least one major cable company will offer a nationwide skinny-bundle streaming package similar to PS Vue before the decade ends.

And it could very well be Charter. The FCC appears to be on the verge of approving Charter’s merger with Time Warner Cable and Bright House Networks, and the combined corporation could wind up carrying nearly $66 billion in debt. Price hikes in cities without major broadband competition seem likely, but they might not be enough. With the right collection of apps, however, Charter could launch a nationwide streaming TV package of its own to increase its revenue streams.

This would result in a first — two major cable companies actually competing with each other for TV service in the same city. Try to imagine all the dirty tricks that Comcast would utilize to prevent that. (Hint: they still have plenty.)

Of course, if Charter crosses that Rubicon, Comcast could turn around and offer its Stream TV service nationwide. Why anyone would willingly give Comcast money when they have other options, however, is a mystery.

Regardless, PS Vue is yet another sign that television is shifting from traditional cable and satellite service to… just another app on your smartphone. This shift hasn’t quite broken down the cable bundle yet, but at least it’s making those bundles smaller and cheaper. Perhaps the next question is how soon we’ll see a streaming service that offers a skinny bundle of cable channels without sports. That might have a bigger impact on TV than either Sling TV or PS Vue could have.

2 Responses to Playstation Vue Is Yet Another Sign That Cable TV Is Moving Online

  1. Two problems with your thinking:

    1. AT&T won’t do anything that would jeopardize their own ability to impose data caps and exempt DirecTV Now from them.

    2. Comcast won’t offer Stream TV to people that aren’t their own customers and thus undermine their argument that it doesn’t violate net neutrality because it goes through the TV portion of the pipe.

  2. Great article! So I thought when I read about it on CCN you needed a PS or Fire TV. So you can mirror on the ATV.


     

Site created by Tenth Key Digital Media.