Okay, Okay, Maybe Netflix Is a Problem for Cable After All

http://allthingsd.com/20110615/ok-ok-maybe-netflix-is-a-problem-for-cable-after-all/

by jsherry • 15 years ago

61 54 15 years ago

jsherry3• 15 years ago

Count me in the 40% who has cut their cable bill (I.e. no more premium channels) since buying an Apple TV.

jerf2• 15 years ago

I pay Comcast ~$70/month for internet. I can get DSL cheaper, but only at lower performance tiers. It's decent service, I'm not too upset.

I pay Netflix $8/month.

Comcast may experience some creative destruction, but even with their physical infrastructure they really ought to be able to survive at those rates. I'm "sorry" they're losing their content business, but it's not as if they didn't have years of opportunity to figure out what to do about it.

pasbesoin2• 15 years ago

How have your rates been the past some months? With no change in service, mine have gone up 24% since late last year.

Cry my a river, Comcast.

jerf2• 15 years ago

Because they haven't gone up, yet. They just called us a few days ago to announce that they want to upgrade my speed from 12-ish to 20-ish, and they will send us a digital cable box for basic digital, for 4 cents more a month for a year (no typo, four-hundredths of a dollar). Presumably at the end of that year, the rates don't go down.

I assume, though I don't know, that they are doing this to finally get the analog cable channels off their network (which I approve of, they are a shocking waste of bandwidth even at SD), and are complying with their legal obligation to continue to broadcast the local stations to me even though I am only an Internet customer by "giving" me the digital cable box. I broadly approve of this. I am hoping they're trying to "hook" me back on digital cable and that I can get back to my original rates (or a reasonable facsimile thereof) by turning the box back in. Or... if necessary, switching to some of that DSL. (Or threatening to switch to DSL.)

mark_l_watson• 15 years ago

My wife and I have been experimenting with reducing the content that we buy from Directv. Directv is a great service, great content, but we watch so many streaming Netflix movies that Directv is less relevant. That said, we are scaling back on what we purchase from Directv, but definitely not canceling it.

programminggeek2• 15 years ago

Between OTA HDTV, Netflix, Redbox, and Hulu, I've been without cable TV for quite a few years now. Actually, I've been without a TV completely for the last year and frankly it's quite enjoyable. Just not having that TV as the focal point of the house is really nice, especially since I have a 1 year old to be a dad to.

Considering that digital cable is $50+ a month(not including internet), that's enough to buy new laptop or HDTV or iPad every year. Cable won't die, but I wouldn't be surprised if they are forced to eventually morph all of their offerings into a digital package like Netflix where you get Streaming TV + Internet for say $50. Right now I'm paying $35 for cable internet and $8 for Netflix, and a few dollars here and there for Redbox rentals, so $50 a month is just about right for what it should cost for cable companies to do that.

brandall10• 15 years ago

"Just not having that TV as the focal point of the house is really nice"

This. I've always envied friends who didn't have a TV in their living room. It totally changes the character of the home. It's somewhat perverted that TV literally dictates how people setup their floorplans.

I keep on toying with getting rid of the TV (currently use a 42" lcd hooked up to an HTPC w/ no cable) but spend at least 4-5 hours per week w/ the girlfriend on the couch watching netflix, daily show, TED, etc. If I may ask how does your family consume content? Have something like a 27" iMac in the den?

lucasjung• 15 years ago

>If I may ask how does your family consume content?

If I may ask, what makes you assume they do? I haven't followed any shows since BSG ended, and my wife watches 2-4 hours a week of stuff she probably wouldn't miss all that much. Our daughter watches an hour of kid stuff (Dora, etc.) every day (1/2 hour during breakfast, another 1/2 hour while I cook dinner), but generally prefers to spend her time playing with my wife and I. If I were to sell the TV on craigslist tomorrow there would probably be some whining for a week or three, but eventually we'd settle down into a new routine and probably never miss it.

When I "consume content," it generally comes sandwiched between a couple of paper or cardboard covers.

programminggeek2• 15 years ago

Yes we still watch about 30-45 minutes at dinner on the laptop. Usually a show like Dr. Who or Top Gear on Netflix, or Castle when new episodes are on. Some nights we just sit and talk. It's nice.

A laptop is plenty of screen if you're just sitting at the table. Also, if you want to watch a movie and get cozy on a couch, put the laptop on a chair in front of the couch and watch.

Frankly, I can get more work done and spend more time with my family if I don't have a giant HDTV practically begging to be watched. Removing that time wasting magnet makes a much bigger impact than you would realize.

Once you go TV free you start noticing things like how when you visit friends or family TV is almost always on. It's like a buzzing that people get addicted to, but don't realize it. Now I can't even go to many restaurants without there being a TV in there too.

It's like a bizarre form of mind control.

Also, since getting a Nook last year, I read a lot more, which is nice.

jjtheblunt• 15 years ago

(When did "this." become a sentence? It became cliche in, what, a week?) That said, I agree with the sentiment.

zaphar• 15 years ago

Laptops and an MacMini in the living room.

Watching video is not a family activity in our house though. Dinner time and games are family activities and we do plenty of that. The only reason we have the Mini in the living room is because we want to monitor the kids usage, otherwise It would be elsewhere.

furyg3• 15 years ago

I live in a small apartment, so arranging things around a TV would be a big pain in the ass.

Instead, our table is on gliders and slides easily out of the way, and a small projector (next to the couch) projects onto the wall where the table was. This is great, as there is zero sign of a TV when using the room to eat, receive guests, work or read.

This was a practicality at first, but now I love it. It's dead simple to convert the whole space into a movie theater, but you have to actually initiate that mode switch. It's quite different than coming home and sitting down in a room which is already oriented around a TV (where I would end up watching TV even though that wasn't my intention).

Similarly, no cable connection means we have to be proactive about what content we'd like to consume. Nearly all Dutch TV shows can be streamed online, US shows and movies we like are downloaded ahead of time.

Result: I'm just as likely to read a book as watch TV when I come home, when I do watch it's always something I chose, and none of the time spent watching involves any commercials.

ry0ohki• 15 years ago

I've gone cable free for two years thanks largely in part to Netflix (and Xbox 360 for my ESPN3 stream). Cable was one thing that should have been getting cheaper over the years, but instead kept getting more expensive. Like Blockbuster before it, I don't think anyone will be too sorry for Comcast and the rest of their lot.

pdovy• 15 years ago

I got rid of my cable service about a year ago and haven't regretted it. It seems to me there is a lot of room for cable companies to easily improve their service, yet IMO it remains consistently poor.

- On demand selections are limited, and the interface is usually pretty clunky. If I have a DVR, I have to remember in advance to record something, rather than being able to just grab it after the fact.

- You need to have a physical box, which either arrives outdated or quickly becomes outdated, and they never replace it.

- It costs $60-$70/month for decent cable service where I live, versus $8/month for Netflix. Combine that with Hulu and free on-demand streaming from major TV networks, and it's a great bargain.

The only thing I miss about having cable is being able to channel surf when I'm bored. Honestly, I am probably a more productive human being without wasting my time doing that, so I'm not too disappointed.

boredguy8• 15 years ago

Between Hulu (free) & Netflix ($8/mo), the only bill I pay to cable is for internet.

It seems to me that Hulu is way worse for cable companies than Netflix, as Hulu lets me watch current shows nearly immediately. If I didn't have Hulu, I might get basic cable for current shows.

Qz• 15 years ago

I don't even use Netflix, as Hulu satisfies all* my TV needs.

r00fus• 15 years ago

If I could get decent french-language programming, I would also give up Dish. As it is, TV5 Monde is only available on Comcast (in some areas) and Dish (everywhere).

Anyone know of good streaming options for French language programming?

dstein• 15 years ago

I'm not going to shed a tear. Cable companies had to know their business plans weren't going to work forever when pay-per-view movie rates started exceeding the cost of renting a DVD, or in some cases actually buying the DVD.

Now... about those pesky 5000% profit margin usage-based-billing rates...

jinushaun• 15 years ago

I've been without cable TV for over 10 years and don't miss it at all. Just another industry with lazy incumbents whose lunch is being eaten by a competitor that is giving customers what they've been asking for for decades.

Now I wish someone would just break up the sports broadcasting cartel. ESPN has way too much power to dictate how its customers can view its contents. What the hell is an ESPN 360 compatible cable internet provider? One that is willing to pay their tariff?

joshfinnie2• 15 years ago

I am surprised that ESPN (with all their control) haven't adopted a better online presence.

I would pay them directly $10 a month to access their sports and TV shows. Can't be doing better through the cable contracts...

smackfu• 15 years ago

ESPN is the costliest "basic" channel that the cable companies provide. As of 2008, it was $3.65 per subscriber per month, and ever increasing as new broadcast contracts are signed with various leagues. It's very debatable whether a $10 / month ala carte alternative would do better for them.

jsherry3• 15 years ago

I wonder if there's some kind of agreement that prohibits them from pulling the end-around on cable? Anyone know? Even if they could pull it off, they probably don't want to bite the hand that feeds.

mikeryan• 15 years ago

ESPN makes more then 1 Billion Dollars a year in cable carriage fees. As stated in another response they get between $2-5 per cable subscriber from these deals. This is all subs including many that don't view their channel.

No, $10 a month ala carte is not a better option for them. ESPN likes their position in cable, its hugely profitable.

drivebyacct2• 15 years ago

Wait, it's 2011 and people are still surprised by the threat that Netflix poses? Jesus, when is anyone in any media industry going to get, anything?

jsherry3• 15 years ago

I don't think that the author was expressing his astonishment with the fact that Netflix is threatening cable. He was just reporting the findings of a new study which show hard evidence. In fact, he states that "this jibes with both common sense and other anecdotal evidence we’ve seen.", so he's clearly not surprised.

ankimal• 15 years ago

I have a smart Sony BD player that lets me watch Crackle, Hulu Plus, Netflix and half a dozen other things. It upgrades automatically and adds new services every few months. (I believe most of these are available on the PS3 as well). I was on this crazy cable plan that had all the bells and whistles but I actually only watched 5 channels. When cable lets me subscribe on a channel by channel basis I might switch back. The only thing I missed is live sports but networks are broadcasting live web streams as well, so 'cut the cord' = 'more money in my pocket'.

Also, something to note was that I dint have TiVo or DVR and so could almost never watch shows on TV. Hulu for me is free DVR (unless they dont have my show which is rare).

theflyingswami• 15 years ago

Comacast was charging me 4 or 5 times more than Netflix per month and still, twenty minutes of every hour consisted of advertising. That is, a third of my watching time was spent muting the television and twiddling my thumbs.

Pretty much Comcast can go jump in a lake as far as I'm concerned. Of course, now that Comcast, through MSNBC, provides both service AND content, I'm sure they'll put a stop to Netflix as soon as possible. Thanks, FCC!

eyeareque• 15 years ago

Instead of dropping cable for Netflix: why not drop them all together and get an active hobby? We spend enough time indoors already in my opinion.

dkarl• 15 years ago

I've just spent three months trying cable and have decided to cancel it. At this point one thing would entice me back: channels a la carte. I like watching sports sometimes and occasionally like watching a Discovery Channel-type show in Spanish and seeing how much I can understand, but aside from those two things, I don't get much out of it that I couldn't get from Hulu.

btilly• 15 years ago

The problem with channels a la carte is if you have two competitors, one of whom bundles content and the other of whom competes a la carte, there is a strong tendency for them to get into a ruinous price war.

Since people already do bundle, that makes getting into an a la carte variation very dangerous.

See http://www.dtc.umn.edu/~odlyzko/doc/price.war.ps for details.

mediasavvy• 15 years ago

We cut the cable three years ago. And in our community, no cable means no TV. It's probably not the much cheaper, to be honest. The big difference for us has been the cutting random channel-surfing and our family's exposure to loud, mentally corrosive cable TV advertising.

jasonwocky• 15 years ago

I'm in the same boat as many of you, paying the cable company for internet access and relying on Netflix and Hulu for content (I subscribe to Hulu plus, though I confess I was largely looking for some way, any way, to give Hulu some of my money for the service they provide me).

My question, though, for others like me...how many of you have more than two adults and/or teenagers in the house? Right now it's just me and my wife and my young daughter. I remember growing up, though...in my family, we had multiple TVs in the house, with everybody often watching something different. Cable TV provides the bandwidth for that, but I was thinking it may be awhile before cable internet provides enough bandwidth for that use case.

Of course, it could be that as this generation of new parents gets used to not having a cable bill, families may grow used to watching TV together or watching it less overall. That might be the greatest contribution that TV-over-Internet provides us, in the long run.

calloc2• 15 years ago

Cable Internet already provides more than enough bandwidth. There are been many times where my room mate and I are both streaming content from NetFlix, and our third room mate is watching Hulu in the living room.

No issues with lag, or slow downs or anything like that.

int3rnaut2• 15 years ago

The Internet and Cable companies here in Canada are already trying to circumvent the issue and bring back the sheep by capping regular internet plans in the same way you see with data plans on phones--Most companies allot 100gb (and then you pay huge sums if you go over) which isn't very much in today's world, so it's gotten to the point where I had to cancel my netflix (its inferior in Canada anyways) because by watching it regularly, I far exceeded my internet cap. It's gotten to the point where excessive streaming/downloading for entertainment is about on par with traditional cable in terms of costs.

CountHackulus• 15 years ago

Instead of cancelling Netflix, why not stick it to the people giving you prohibitive caps and switch to an independent 3rd party ISP. I switched from Rogers to Teksavvy (and later Teksavvy Cable) and have loved every second of it.

The best part is that the customer service and tech support people don't treat you like an idiot and don't just read their script and transfer you around when you say something not on their script. (Not bitter.)

int3rnaut2• 15 years ago

Do you know what? I really appreciate that, and I might just do that. Thanks a lot. :)

bradleyland3• 15 years ago

What's crazy is that Comcast is in a great postion to go head-to-head Netflix. They are positioned to go vertical in a way that Netflix can't even dream of.

* They have a relationship with a huge base of existing customers. They're one of the few players with a subscriber base close to Netflix (who just passed Comcast).

* They have a large network based on good technology. Sure, it's not fiber, but it's a lot better than what most of the RBOCs are sitting on, and Netflix has zero.

* As part of NBC, they have established relationships with all the major content providers.

* They own the distribution channel from content library, transport, and the end-user equipment.

The problem, from my experience, with Xfinity is that the "experience" sucks. Their cable box is a slow, buggy pile of crap. Browsing content on my cable box is only marginally better than the craptastic PPV movie systems in a cheap hotel. The new Xfinity apps for my iOS devices are a huge step up, but I'm not convinced that using my iOS device as a remote for my television is where I want to be. This is what the experience is like:

* Pick up my iPad and browser for "OnDemand" content * Initiate playback from my iPad * Switch to the Comcast remote to play/pause, ffwd/rwnd * Experience huge lag in response to my control inputs from any of these devices

I've measured it, and it can take up to three full seconds for my cable box to respond to inputs. Three seconds is an eternity when you compare it to the Netflix app running on my PS3. Not to mention, with Netflix, I don't have to keep my iPad around. I can just use the PS3 remote to browse, select, play, and ffwd/rwnd content. And it's responsive.

Comcast has only themselves to blame for this situation. They're sitting on all the right pieces, and no individual component is a huge weakness if you believe that going vertical is the right approach.

Such a shame.

neuroelectronic2• 15 years ago

IMHO, they should just get out of the media game and focus on their network as a service. If they are going to play the "natural monopoly" card then they need to act like it and not be buying up media outlets. It's incredible that nobody call them on this (particular) bullshit.

I reciently had cable installed in my apartment just for internet. I previously did not need internet because WiFi is available almost everywhere in my city and I can teather to my cellphone when I can't connect otherhow. In fact, the only reason I got cable internet was for torrents, streaming (netflix and hulu) and gaming. I had no TV or internet in my residence prior.

bradleyland3• 15 years ago

"IMHO, they should just get out of the media game and focus on their network as a service."

From a business strategy perspective, that is the absolute worst decision Comcast could make. The lower you go in the network stack, the more commoditized you become. Selling their product as a network service only would effectively make them a utility. With that comes a ton of regulation and no room to innovate.

butterfi• 15 years ago

In my experience, Comcast has one thing that Netflix doesn't: customers that hate them.

1. Comcast is expensive. My rates have nearly doubled, but I haven't seen any change in my service or their offerings.

2. Comcast wants you to install their hardware because they "switched to digital." Fine, but I don't need or want another appliance between me and my TV. I already have several (Wii, Xbox, etc).

3. Charging you extra to see HD. Here's a tip: if I can see HD versions of the stations that I'm already paying for just by running the tuning auto-scan, then I feel ripped off. Esp. because old 4:3 format looks terrible on my wide screen.

I agree with your sentiment that Comcast has only themselves to blame. They're trying to squeeze more and more money out of their consumers and offering little in response. Which is why I dropped them like a hot rock and got netflix and hulu accounts.

bradleyland3• 15 years ago

That's what blows my mind. There are very few good business reasons for Comcast to be in the position they're in. "Customers hate them" is a symptom of the underlying disease: chronic-head-up-the-ass. They have the technology and relationships to make huge headway on every one of the items you complained about. The only problem not directly addressable by technology is price, but I think there's a solution to that as well.

Apple does very well selling hardware (at a premium) that is typically 6-8 months (often more) behind the rest of the market. When they upgrade their lineup, prices typically don't change much, but the hardware is upgraded. How do they get away with this? Because they have something consumers want. They provide a great experience.

What's the lesson? Consumers will pay what you ask, and they won't complain (much), provided you give them what they want. Use your technology for good! Provide awesome services that consumers want, and no, running down a check list saying, "But we have streaming movies 'On Demand™'" isn't what we want. We want an experience that makes us happy we bought your service. Get with it!

Legion• 15 years ago

The day I can get NFL Sunday Ticket streaming to a set-top box (with a decent user experience, not a computer-hooked-to-a-TV one) is the day I'm finished with normal TV service.

pkteison• 15 years ago

I know it's not a representative sample, but all but 1 of my friends have cancelled cable in favor of Netflix + Hulu. So I'm continually surprised to hear that cable subscriptions aren't falling.

What I really don't get is why HBO won't sell to me directly. I think that would be the last nail in $100/month cable bills.

"Can I get HBO On Demand if I don't have HBO? No. HBO On Demand is exclusively for HBO subscribers." from http://www.hboondemand.com/faq.html#faq7

kin2• 15 years ago

HBO Go is godsend. I can watch the entire series of any HBO show from the pilot to the series finale and watch new episodes of awesome shows like Game of Thrones on a computer or on my iPad. The second Showtime copies them and offers this direct, subscription based, with clients on the Roku and the like, it'll be over for cable.

tednaleid• 15 years ago

Are you saying that you can get HBO Go without cable? From what I can see of the signup, I need to pick my cable provider to sign up (something I don't have). I'd be willing to pay for HBO, but I'm not willing to pay for other cable as netflix satisfies my needs there.

I've got a Roku too if there's some integration there that I'm missing.

calloc2• 15 years ago

This has forced me to just go back to pirating TV Shows instead of giving them my money. I'd gladly pay for it, but they won't let me.

Okay, Okay, Maybe Netflix Is a Problem for Cable After All

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