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Tag Archives: Cord cutting

Comcast Prepares For Market In Which They Can’t Be Comcast Anymore

Comcast logoComcast has made it more difficult than ever for their customers to dump cable TV.

Last year, the cable behemoth slapped one-terabyte data caps on its broadband internet service in most of its markets, then zero-rated its own streaming video service so that it wouldn’t count against those caps. Comcast customers could get unlimited internet and not have to worry about streaming more than a terabyte, but that would add $50/month to their broadband bills.

That billing scheme makes anyone considering cable alternatives like Sling TV and PlayStation Vue start doing math — and realizing that Comcast has set it up so that those alternatives would end up costing more than Comcast’s TV offering. Those data caps are an anti-competitive scheme designed to prevent its customers from dropping Comcast TV service in favor of other online TV services. AT&T institutes a similar scheme with its DirecTV Now service.

Never mind that the video market is shifting toward streaming and away from pricey cable bundles. Comcast, like most cable companies, is often the only real broadband internet service provider in the areas it serves, so it can institute these billing schemes on its customers and keep many of them tied to traditional cable for fear of higher cable bills. This scheme is made easier by the fact that FCC boss Ajit Pai is very friendly to big cable corporations and won’t call them out on this anti-competitive behavior.

And yet…

Comcast Corp. has acquired rights from cable network owners to offer their channels nationwide, according to people familiar with the negotiations, giving the biggest U.S. cable operator a backup plan if rival online-TV services catch on with consumers.

The rights allow Comcast to sell video service for the first time outside its regional territories, which include Chicago, Boston and Philadelphia, said the people, who asked not to be identified discussing private information.

In most cases, Comcast acquired the rights through “most favored nation” clauses in contracts, which let the company sell channels in the same places as new online distributors. Since Comcast doesn’t sell traditional cable-TV service in markets like New York and Los Angeles, the rights mean the company could presumably offer a package of channels as an online-streaming service in those cities.

So here’s a cable company whose CEO claims the economics of streaming TV “are unproven to us”… gathering up streaming rights from major TV networks. Here’s a company using its broadband monopoly power to squash nationwide streaming TV services… starting the process of creating its own nationwide streaming TV service.

Gee, it’s almost as if the most hated company in America is preparing for the day when it actually has to compete in an open market. Comcast is currently trying to close off that open market to its own customers in order to bolster its own bottom line. You can picture Alanis Morrissette writing a new verse for this now.

That market is crowded, too. On-demand streaming services like Netflix, Amazon Prime Video, Hulu, and YouTube are huge and still growing. Facebook and Twitter are getting into live streaming. Former cable-only services like HBO, Showtime, and Starz all offer streaming services independent of cable now. Cable alternatives like Sling TV, PlayStation Vue, and DirecTV NOW are already available, while Hulu and YouTube are expected to launch their own live streaming TV services later this year. Dozens of other niche channels — many of which could not exist in the traditional cable bundle — have popped up along the way and found audiences, too.

With all these video options on the open market, why would video customers turn to Comcast — again, the most hated company in America — for their streaming TV? Why would customers willingly sign up for service from a company with a long history of screwing over customers?

Perhaps that explains why Comcast just hired former Amazon video exec Euan McLeod as its new vice president of IP video engineering. The man who helped build Amazon into a video powerhouse with an honest-to-goodness a la carte TV service in Amazon Channels just might be capable of turning Xfinity Stream into a service that customers might actually want.

It also suggests that Comcast understands this favorable political climate won’t last forever. After all, Comcast owns NBCUniversal, which owns MSNBC, which lambasts the current GOP-dominated executive and legislative branches on a daily basis — even though that executive branch appointed an FCC chairman that will bend over backwards for Comcast, and that legislative branch is awash in Comcast campaign contributions.

That political environment, combined with the fact that Comcast isn’t expected to negotiate streaming rights deals with CBS and Disney until their current contracts are up for renewal in 2020, means Comcast won’t be in any hurry to stop being Comcast. As Matt Strauss, Comcast’s executive vice president for video services, was quoted as saying:

“There is significantly more upside and profitability in going deeper and deeper into our base first versus following a video-only offering OTT.”

“Going deeper and deeper into our base” is as graphic a description of Comcast’s treatment of its customers as anyone needs.

How Ajit Pai Will Help Comcast And AT&T Strangle TV Competition

Three years ago, comedian John Oliver brought a ton of attention to his HBO show Last Week Tonight by discussing Net Neutrality and calling the appointment of a former cable company lobbyist as chairman of the FCC “the equivalent of needing a babysitter and hiring a dingo.” After Oliver’s campaign to flood the FCC web site… Continue Reading

How ESPN’s Rising Carriage Fees Offset Its Subscriber Losses

When we last looked in on ESPN’s struggles with cord cutting in December of 2015, ESPN had lost seven million subscribers in a two-year span from 2013 to 2015. Fast forward 16 months later, and it’s clear that this trend has not abated. As of March 2017, ESPN now has only 87,437,000 subscribers. That’s a loss of… Continue Reading

Hulu’s Endgame: Eliminate The Middle Man And Become Cable TV

In 2013, Netflix Chief Content Officer Ted Sarandos told GQ writer Nancy Hass exactly what the plan was for the DVD-mailing company-turned-streaming giant: “The goal is to become HBO faster than HBO can become us.” Three years after that statement, Netflix has nearly 47 million subscribers in the U.S. and an original content budget of $5 billion for this… Continue Reading

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

CBS 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… Continue Reading

Cable Companies Will Fight Dirty Against FCC To Preserve Set-Top Box Boondoggle

The cable bundle itself is far from the only ripoff in cable television. The average American household spends about $230 a year on cable set-top box rental fees, according to an analysis by Congress released in July. Senators Edward Markey of Massachusetts and Richard Blumenthal of Connecticut, along with the Commerce, Science and Transportation Committee,… Continue Reading

Do Comcast Data Caps Violate the Sherman Act?

Let me preface this article by stating that I am not a lawyer, and this is not a full legal analysis. However, given that nearly every article published about Comcast’s data caps only discusses the net neutrality aspects, I felt it necessary to look at them from a different perspective. First, the back story: In addition to quietly announcing hefty… Continue Reading

Why Time Warner’s New NBA Deal Will Keep It From Joining Hulu (For Now)

A few weeks ago, the joint owners of online streaming service Hulu — Disney, Fox, and NBCUniversal — looked to add another big media player to its ranks. Hulu LLC, the streaming service owned by three media companies, is in talks to add Time Warner Inc. as a fourth investor, according to people with knowledge… Continue Reading

How Much Is ESPN Suffering From Losing 7 Million Subscribers In Two Years?

The Walt Disney Company dropped a bomb last month when they admitted in their 10-K filing that ESPN lost 7 million subscribers over the last two years. Everyone from Clay Travis to Ken Fang to Karl Bode has chimed in on the topic, with many pundits suggesting that this is not only clear evidence of… Continue Reading

Is Big Media Letting Broadcast TV Die On The Vine?

A couple weeks ago, while I was off cavorting in New Orleans with my new wife, Morgan Wick wrote this piece taking note of the fact that some broadcast TV stations might decide to surrender their spectrum to wireless companies rather than continue operations, and those stations that do stay in business might end up… Continue Reading


     

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