Posts for 'Cable TV Operators'

I'm pleased to present the 271st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

We had recorded last week's podcast just prior to the news that Comcast was dropping its merger bid for Time Warner Cable, so first up this week we share thoughts on why the deal collapsed.

In my view, the perception of the deal transformed from being cable-centric to being broadband-centric, largely due to the rise of online video usage. As a result, Comcast, post-merger, having 57% of American broadband connections under the new 25 mbps definition, became a sticking point (never mind that it actually has 56% on its own, reflecting its aggressive broadband infrastructure upgrades).

This is a key irony of the deal's failure - Comcast has invested billions in technology, but its woeful customer service ultimately undermines these investments and defines its reputation. In a hypothetical world where Comcast was a "most admired company," (like Apple, Amazon, etc.), I think it's quite possible regulators would have actually welcomed the Time Warner deal.

We then turn our attention to Verizon's "Custom TV" packaging and ESPN's lawsuit. As I explained in Has Verizon Put ESPN Into a Public Relations Headlock Over Opaque "Sports Tax?" I think Verizon is making a brazen move to reign in sports costs. Colin and I agree it's the most startling thing yet to happen in a tumultuous year for the pay-TV industry.

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Today Cablevision announced a first of its kind distribution deal with Hulu. The deal follows the introduction of Cablevision's new low-cost "cord-cutter" package (broadband plus a free OTA antenna) last week and its agreement to promote the new HBO Now OTT service. Given all of this I think it is now virtually guaranteed that Cablevision will soon announce that it will also distribute/promote Netflix.

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I'm pleased to present the 270th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

(Note, we recorded prior to the demise of the Comcast-Time Warner Cable deal; we'll discuss that next week.)

Early this week, in "Is Netflix Friend or Foe to the TV Industry? It's More Confusing Than Ever." I laid out both of the arguments. In today's podcast, Colin and I flesh out the debate further, bringing in additional perspectives and data. Importantly, Colin adds his thoughts on how Netflix should be seen internationally.

It's a fascinating debate, which our friends at MoffettNathanson coincidentally weighed in on this week as well. Using Nielsen data, they believe Netflix's audience size is already 6% of all of TV's, double its level from 2 years ago, and has accounted for 40% of TV's audience declines. They also see Netflix's share rising to low double digits over the next 4 years.

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One of the great riddles of the past few years is whether Netflix is friend or foe to the U.S. television industry, including broadcast TV networks, cable TV networks and pay-TV operators. Over the years, Netflix has downplayed in many ways its disruptive potential to the TV industry (my personal favorite is when CEO Reed Hastings would say "We're more of a bicycle to their car" in comparing Netflix to pay-TV).

But with Netflix tacking on another 2.3 million subscribers in the U.S. in Q1 '15, bringing its total to 41.4 million, the question is taking on increasing urgency. How should the TV industry REALLY think of Netflix? Below I share what I think are the best "friend" and "foe" arguments, concluding with my own assessment of what Netflix really is now.

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HBO's upcoming launch of its "HBO Now" OTT service is unquestionably one of the biggest variables for the future of the pay-TV ecosystem. Because of its marquee original content and ubiquitous brand, HBO is unique among all entertainment-oriented cable networks in having the power to attract millions of OTT subscribers.

While that's an opportunity for HBO, it's also a massive threat to the larger pay-TV industry. The ability to subscribe to HBO standalone will almost certainly make cord-cutting and cord-nevering a more appealing option for some viewers. HBO Now, coupled with other OTT options, like Netflix, Hulu, Amazon, or even Sling TV (for ESPN fans in particular) would be very enticing.

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I'm pleased to present the 263rd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

Today we return to the cord-cutting debate, discussing fresh data showing that the largest pay-TV operators lost approximately 125K subscribers in 2014, slightly worse than the 95K subscribers they lost in 2013. There's both a "glass half-full" and a "glass half-empty" way of looking at the results, and we explore both positions. You decide!

We then turn from pay-TV to broadband, where the trend was quite different. The largest broadband ISPs added 3 million subscribers in 2014, up 15% from 2.6 million in 2013, with cable operators accounting for a remarkable 89% of all additions.

With 87.3 million broadband homes in the U.S.at the end of 2014, there is no question that broadband is the foundation on which all online services now stand (a key reason why the FCC's intervention is a risky proposition, as I explained last week).

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Despite all the talk of massive cord-cutting being just around the corner, evidence continues to demonstrate that the U.S. pay-TV business remains relatively healthy. The latest, from Leichtman Research Group, shows that the 13 largest U.S. pay-TV operators, which together account for 95% of the market, lost just 125K subscribers in 2014. That was basically even with the 95K they lost in 2013 (see chart below).

LRG president and principal analyst Bruce Leichtman noted that the 220K subscribers lost over the past 2 years represents just about .2% of the operators' total subscriber base. Of course no business ever wants to lose customers, but given the dramatic rise in OTT usage and subscriber levels, along with the vast array of viewing options, losing just .2% over 2 years seems like a pretty good level of stability (consider that Netflix alone added 5.7 million U.S. subscribers in '14).

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With the FCC voting 3-2 to enact net neutrality regulations under Title II of the 1934 Communications Act, the focus now shifts to how Comcast proceeds on its planned Time Warner Cable acquisition. The $45 billion deal, combining the two largest U.S. cable TV operators, was announced in February, 2014, and has been in the regulatory slow lane for months as net neutrality took center stage.

Once perceived as virtually guaranteed to be approved given Comcast's formidable lobbying apparatus, the deal is now seen as having no better than a 50-50 chance by many analysts. While Comcast continues to express confidence the deal will be approved and close in early 2015 (and even internally circulated a combined company organizational structure), the dynamic regulatory, political and industry landscapes make any bets on the deal's outcome a total crapshoot.

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I'm pleased to present the 261st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we return to the topic of TV Everywhere, which we've discussed on previous episodes. While TV Everywhere's challenges are well-understood, this week Comcast released encouraging adoption data, which we dig into.

Comcast also announced it now offers over 70 linear networks via TVE, in addition to on-demand choices. Related, NBC said this week that it will offer authenticated access to its linear feed via its app, but only in its O&O markets. Colin notes that's a very different approach than CBS is using for linear, which is only available via its All-Access service that costs $5.99/month.

Aside from improved content for TVE, Colin and I also observe that monetization is also improving, with technology providers BlackArrow and This Technology, as examples, recently sharing product updates on dynamic ad insertion (here and here).

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Comcast said that in 2014 over 30% of its Xfinity TV subscribers used its TV Everywhere app ("Xfinity TV Go") on a monthly basis, representing a 20% year-over-year growth rate. The average Xfinity TV Go viewer watched over 7 hours per month via the app, up 40% vs. a year ago. Comcast said the Xfinity TV Go app for iOS and Android has been downloaded over 11 million times.

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Once again demonstrating the rapidly blurring lines between online video and TV on-demand, ad tech provider BlackArrow has announced that it will be powering dynamic ad insertion (DAI) in on demand content viewed on connected and mobile devices by Time Warner Cable subscribers. BlackArrow has already supporting DAI for TWC in traditional set-top box VOD and linear streams over IP.

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I'm pleased to present the 256th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week Colin and I share our predictions for the video industry in 2015. In addition, we look back at our predictions for 2014 and share how we did (yes, accountability!).

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Below is the full video of the opening season at the recent VideoSchmooze: Online Video Leadership Forum, featuring Dounia Turrill, SVP, Client Insights, Nielsen and Bruce Leichtman, President and Principal Analyst, Leichtman Research Group, with me moderating. It was a fascinating session with Bruce and Dounia dispelling many of the myths around the changing video landscape, while zeroing in on the trends that matter most.

Among the topics we explored were cord-cutting and pay-TV seasonality, how SVOD is substituting for linear TV viewing, how Netflix is penetrated across different demographics, whether CBS All Access and HBO OTT will succeed, why too much attention is paid to millennials' viewing habits, why TV Everywhere is being marketed incorrectly, and how ad dollars are shifting from TV to online video, plus others.

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Net2TV has announced this morning that its 18 branded OTT programs will be added to ARRIS Market, a platform for cable operators to combine OTT and traditional linear programming. Arris Market was announced this past July, and is powered by Wurl, which offers an API and hosted HTML5 apps. ARRIS has not yet announced any ARRIS Market deployments.

The significance of the news - and the ARRIS' Market initiative in general - is that cable operators are increasingly being presented with options to incorporate access to OTT content into their overall value proposition. This is an opportunity for operators to capitalize on viewers' ongoing shift from linear TV viewing to OTT viewing.

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Video ad technology provider BlackArrow has announced Virgin Media as its first European customer, signaling a broader international expansion starting in 2015. BlackArrow will be powering dynamic ad insertion on Virgin's VOD TV platform and its Virgin Anywhere multi-screen service. Virgin, which was acquired by Liberty Global last year for approximately $16 billion, has deployed its digital TV service to 5.3 million screens in the UK.

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Two months ago I wrote about the initial success cable operator UPC Hungary had in offering YouTube to its subscribers via existing set-top boxes. Since its May introduction, about 50% of those who could access YouTube had already done so at least once, and more than 50% of them had become repeat users. Now, 2 months later, 80% of those who have access have tried YouTube, with 80% of them returning.

The new data was revealed by Arpad Jordan, CTO of UPC Central and Eastern Europe at the OTT World Summit in London. YouTube access was rolled out in a first phase in May to around 250K HD set-top boxes. In September Jordan said that these first phase YouTube users were watching over a million minutes per day with average session lengths of 45 minutes.

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Yesterday, FCC Chairman Tom Wheeler wrote in a blog post that he intends to start a rule making proceeding to broaden the definition of what a multichannel video programming distributor (an "MVPD," or more simply, a cable, satellite, telco operator that distributes bundles of cable and broadcast TV networks) is, to include companies that don't actually own their own delivery infrastructure. My weekly podcast partner Colin Dixon and I call these non-infrastructure companies virtual pay-TV operators, or "vPops" for short.

This "technology-neutral" change would mean vPops using the Internet/broadband to deliver linear TV networks would also be considered MVPDs, therefore entitled to the same regulatory-mandated benefits. Wheeler characterized the move as being pro-consumer and pro-innovation and on the face of it, it definitely appears to be. But, digging deeper, it's not clear that this type of regulatory change would overcome actual market forces that will still determine the average viewer's video choices.

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I'm pleased to present the 247th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week we talk about so-called "hybrid set-top boxes" and why we believe they're poised to play a critical role in the video ecosystem, especially for pay-TV operators. A hybrid STB can handle both traditional linear TV feeds and also broadband/IP/apps. Comcast's X1 is a great example, as are TiVo's boxes. Another technology approach which creates the same capability is from ActiveVideo Networks.

Colin and I both like hybrid STBs because they give the operator the ability to blend pay-TV/VOD/DVR with OTT. One prime opportunity of this that I see is for Netflix to be included in Comcast's X1, as I explained earlier this week. Just to give one example of how compelling these integrations can be, Colin cites the example of UPC Hungary, which integrated the YouTube app. Within a few months, 72% of its subscribers have used YouTube, averaging 45 minutes per session.

Colin notes the big win for subscribers here is convenience - it's just easier for people to use one device to access everything. We share additional thoughts on why we think hybrid STBs are beneficial and will become a big trend going forward.

Listen in to learn more!

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The VideoNuze podcast is also available in iTunes...subscribe today!