The state of New York has not escaped the current economic downturn and has seen its budget deficit swell.  In a recent proposal, NY Governor David Paterson announced his intent to implement a variety of new taxes – 88 in total – covering everything from gas and beer, luxury items like $60,000 cars or $500,000 planes and entertainment services such as movie theaters or sports venues.  Overall, these new taxes are expected to bring in an additional $4 billion in revenue for the state and plug some of its deficit.

As with the TARP program, Gallop Services performed an in-depth review of the specifics of the Governor’s Budget Briefing Book and 2009-10 Executive Budget Economic and Revenue Outlook.  Paterson’s proposed budget identified several areas which may impact technology services users including Cable and Satellite Television and Radio, Digital Content, Telephone and Internet Sales.  

Read the rest of this entry »
©2008-2009, Gallop Services, Inc. All rights reserved.

Compared to the slew of new media delivery solutions that have developed over the past few years like  iTunes (Etilities Forum), Netflix (Etilities Forum), Hulu (Etilities Forum) or Joost (Etilities Forum), Cable TV seems a bit like a dinosaur.  Along with radio, it is one of the older content delivery services, and it shows.

Research group Parks Associates released a study in late October explaining that Cable TV has customer satisfaction issues compared to Satellite TV and IPTV providers.  Although the details of the study are not publically available, my thought is that this is primarily due to a shift in how much control consumers expect to have on what they watch and when they watch it.  The old, familiar model is that you need to tune in to the right channel at the right time.  You arrange your schedule around the TV network schedules and hope you don’t get interrupted.  What products like Tivo (Etilities Forum) and the Apple TV have introduced is the ability to make your own entertainment schedule.

The answer to this was Digital Cable, specifically Video On Demand (VOD) offerings which let you select movies, TV shows or documentaries out of a library of media that your subscription gives you access to.  But there are still problems.  First, VOD tends to have a more limited selection than the alternatives listed above.  Second, the interface is often sluggish and poorly designed.  Lastly, and perhaps most importantly, this offering still rides on a service that is very expensive: according to the FCC, cable prices have more than doubled over the last decade!

The main thing Cable TV has going for it is that it has a very large established consumer base, and old habits die hard.  But Cable providers should probably realize, for their own good, that we are in the middle of the danger zone: a tough economic downturn that makes everyone try to save money.  Once enough people realize the alternatives out there, Cable TV will need to make a choice: adapt or wither.

©2008-2009, Gallop Services, Inc. All rights reserved.

You’re most likely familiar with bundled technology services.  Your cable provider probably offers you “a better value” if you subscribe to their Cable TV, Internet, and Telephone services.  If you’re lucky, you may also have the choice of FIOS service from Verizon (Etilities Forum), which provides the same package deal, just through the phone company.

Now, cable companies are planning to expand their bundled offerings by putting wireless data services into the mix.  Om Malik reports on his GigaOm site that Comcast (Etilities Forum), Cox Communications (Etilities Forum), Cablevision (Etilities Forum), Charter Communications (Etilities Forum), and Bend (Etilities Forum) have all announced some degree of planned wireless service.  Certainly, their competitors won’t be far behind.  In addition, the recent sale of a wide swath of the wireless spectrum to some of these and other providers will boost their ability to provide ever further-reaching coverage to mobile devices at home and on the road.  Since those spectrum purchases cost hundreds of millions of dollars, there’s no doubt that providers will be aggressive in selling services to recoup their expenses quickly.

At first glance, this seems to be a great benefit to consumers, and in many situations that may be the case.  However, the other side of this development is that your choices may be inefficiently limited to those that come with the provider’s specific bundles.  Consumers need to remain far more aware of exactly what services they are paying for and at what cost.  For example, I do not use a landline telephone enough to justify bundling the cable company’s VOIP service with my other services solely because (according to them), it will “save me hundreds of dollars per year!”  Instead, I use a third-party VOIP service that costs a few dollars per month.  This is perfect since the service is to call 911 if ever needed.

Instead, the widening bundle represents a potentially cost-saving mechanism for consumers whose usage of all of those services warrants the consolidation.  There will certainly be those that feel paying a little more for the convenience of fewer bills is worth the cost as well, but in a leveling economy (or whatever it’s being called this week), the number of folks able to take that route are dwindling.

©2008-2009, Gallop Services, Inc. All rights reserved.