There has been a debate brewing for decades about the importance and the role of networks who provide content and that of those who transmit it to end-users. Each side, of course, supports its own self-interest. Over the past few days, several fairly heated discussions have occurred between companies on both sides. Most notably, Viacom recently threatened to pull some programming from Time Warner Cable. In light of these problems, the news of CBS and Time Warner Cable reaching a fresh broadcasting deal without major fireworks led to a large sigh of relief from the industry and all of us as consumers.
Cable companies have also been increasing their rates, a move parallel and related to these discussions. As we’ve mentioned, Comcast
(Etilities Forum) is planning to raise rates in February, and today Time Warner Cable
(Etilities Forum) announced a planned increase in fees as well. A spokesperson for the company explained that the move is required in order to overcome higher fees from programmers: “The programmers, we are wholesaler distributors of them, we have to purchase their product, biggest expense”.
These conflicts and their impact on consumers are unlikely to cease any time soon. Content providers have many more delivery options, due to the ever-increasing availability of broadband, new services such as Verizon FiOS
or AT&T
(Etilities Forum) and its U-Verse offering, and alternate internet-based distributors such as Joost
(Etilities Forum) or Hulu
(Etilities Forum), which means they can reach customers through means other than cable. Changes in the industry have brought new options and broader competition. In response to their disappearing monopoly in delivering TV content, Cable Providers have been expanding to become Internet Providers, Telephone Providers and some, like Cox Communications
(Etilities Forum), are getting into the wireless business. These moves to expand their business segments and service offerings are likely necessary in order to compete against new players and thrive in this redefined market. Those that do not or cannot change and adapt are surely likely to follow the path of the dinosaurs.
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A number of analysts speculate that the cable companies, most notably Comcast, is implementing a monthly download cap to combat the trend of users dropping their cable service and solely viewing their programming through online means such as iTunes, Hulu, Netflix Streaming, network websites, etc. Comcast’s current cap of 250GB will not likely impact the average user’s viewing or browsing habits; however, I believe it will not be long before users begin approaching this cap as they discover the convenience of high definition streaming and download services.
Absolutely…and keep in mind that Comcast is really the exception in that they’ve adopted a very high cap. The cap for most others ranges in the 5-50Gb which are MUCH easier to approach. I’m personally waiting to get a phone call from Cox about exceeding my cap between VoIP, Apple TV, Netflix online, Hulu, etc…