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The next generation won’t be interested in paying for cable.

"Over the top" appears to be taking over.   A recent survey released by Credit Suisse indicates that over-the-top TV and content delivery options like Netflix, along with Hulu and the Microsoft Xbox 360 are becoming strong contenders in the television viewership market.   

After surveying an estimated 250 Netflix subscribers, Credit Suisse found that nearly 40 percent of Netflix subscribers between the ages of 25 and 34, and almost 30 percent of subscribers between 18 and 24 used Netflix streaming services instead of cable or satellite television.   

At a media conference this week, Verizon CEO Ivan Seidenberg predicted that cable is headed in the same direction as the wire line telephone business, according to
 All Things Digital

"Young people are pretty smart. They’re not going to pay for something they don’t need to,” he said. Seidenburg added that “Over the top" is going to be a big issue in the future for the cable industry. I think cable has some life left in its model… but that it is going to get disintermediated over the next several years."

Comcast CFO Michael Angelakis obviously disagrees.
"When people say there's cord cutting, we really just don't see it," said Angelakis. "And when we think about cord cutting or the flavor of the day, we look at that as primarily competition to our VOD business, not to our core business."

In addition to the rise of over the top play options like Netflix and Hulu, Google TV and Apple's revamped TV service are expected later this year. It is rumored that Amazon may also have plans for a similar product coming soon.

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If cable/satellite TV wants to survive...
By Motoman on 9/24/2010 9:48:31 AM , Rating: 5
...they need to do what consumers have always wanted them to do, and sell channels on a cafeteria plan.

NO ONE has ever *wanted* their BS bundling. It's anti-consumer, and forces you to pay for crap you don't want...the reason there's 500 channels out there is because they're being subsidized by the packaging. If there are 500 channels, at least 400 of them need to

Cable & satellite TV will do just fine if they sell channel access individually - a cafeteria plan. Say, major networks like NBC, ESPN, and CNN are $1.50 a month. Second-tier networks like Discovery, Comedy Central, and Nickelodeon are $1.00 a month. And third-tier crap, like Oxygen, Lifetime, the bajillion Fox Sports channels, etc., are maybe $0.50 per month. Maybe movie channels like HBO and Showtime are $2.00 a month - dunno, have never had any of them anyway. They also need to let you change your lineup at least once a month...I would suggest having a menu-driven channel ordering system via cable/satellite already, so that the consumer can just pay for whatever channels they want that month from their couch.

That way, consumers can get the channels they want at a reasonable price, without having to subsidize all the BS that they don't want. Because the pricing is reasonable, fewer people will go to streaming/download products because of quality and convenience.

If they stick with their anti-consumer bundling and high prices, their disgruntled consumer base (who has been irritated with their packaging and pricing since...forever) will be encouraged to drop them and go streaming/download/OTA only. The only reason that consumers have put up with their bundling/pricing so far is because they have traditionally had no choice - either live with the few channels you can get OTA, or you pay out the nose for cable/satellite. The success of cable/satellite so far is actually *not* a story of their success - it's a story of the failure of OTA. Now that consumers are starting to have better alternatives, the time is nigh for cable/ change your model, or we'll be seeing you go the way of Blockbuster in a few years.

Oh, and did anybody notice that the whole "fewer commercials because it's paid-for TV" thing never actually happened? Yeah, that doesn't help either. Consumers don't want to *pay* for the privilege of sitting through commercials - another reason why streaming/download is so popular. If OTA can survive on just advertising, and cable/satellite has just as much advertising as OTA...why are we having to pay for cable/satellite again?

RE: If cable/satellite TV wants to survive...
By wempa on 9/24/2010 12:37:14 PM , Rating: 2
You hit the nail on the head with everything here ! I totally welcome all new technology that will compete with cable TV. Right now, we are paying for a higher service tier just to get 2 kids stations that our daughter watches. The cable companies easily have the technology to let us pick and choose channels, but they don't want to go that way for a few reasons.

(1) smaller cable networks couldn't survive since hardly anybody would pay for those channels
(2) the cable company would lose money since you'll only be paying for what you want
(3) more overhead on them to manage

One other thing I'd like to add is the ridiculous costs of the converter boxes. They are one of the biggest scams. The tuners in your TVs are worthless now that basically everything is encrypted. As a result, you usually have no choice but to rent their converter boxes. We need 3 of them, so we pay about $30 a month just for the converter boxes. I also love how they never include the price of converter boxes in any of their advertised prices, even though you will be forced to have at least 1, if not more, of these damn things. That's borderline false advertising to me.

By Lerianis on 9/24/2010 2:00:14 PM , Rating: 2
Smaller cable companies could survive VERY well with a 'pick and choose' plan compared to the big guys. In fact, it's big guys like Comcast whose price models and business are based on gouging people who most likely wouldn't survive.

RE: If cable/satellite TV wants to survive...
By sprockkets on 9/24/2010 4:52:37 PM , Rating: 2
The problem with your proposal is that they will then have to either charge a base cost instead of padding all the costs as you said into the channel packages, or charge more for the initial channels, and if you buy more, each one becomes cheaper.

Sounds great in theory, but it won't work in practice. You really think the cable company can just charge you $2-$4 a month and make a profit? Not only will they have to charge for channels, they'll start putting on other charges a la carte.

After having to price it all out and setup the system to do so, you end up creating more overhead which ironically drives up the price, thereby negating any savings by not purchasing x amount of channels.

The old Picadilly cafeteria did this. Imagine everything sold a la carte, that you even paid 30 cents for butter for your bread. It's exact, but its also makes them look like they nickel and dime you for every stupid little thing, and it looks stingy.

By Motoman on 9/24/2010 5:39:22 PM , Rating: 2
If they don't charge what people are willing to pay, they will fail.

Might they go to a cafeteria plan and make it financially unattractive...perhaps to drive you to their packages anyway? Maybe.

If they did, though, it wouldn't solve their problem - which is people abandoning them for download/streaming/OTA.

If they can't make a profit selling their services for what people are willing to pay, then they need to go out of business. The apparent trend is that less and less people are going to be willing to pay what they're charging currently - so unless they actually want to go out of business, they need to change.

If that means that vast numbers of relatively unwanted TV channels go be it. If it means that Comcast has to radically re-organize to make a be it. If it means that every current cable/satellite TV company in the country simply goes be it. Others will rise from their ashes and prosper where they failed.

RE: If cable/satellite TV wants to survive...
By Belegost on 9/24/2010 9:28:08 PM , Rating: 2
Why bother with this? The streaming services give me that flexibility and more. Even with a cable system such as described I still have to watch broadcasts at the time aired, or buy an extra piece of equipment to record it.

How retarded is that? Hell if I want to be bound to the schedule as dictated by some broadcast manager.

With Netflix/Hulu I can watch exactly what I want, when I want to.

By Motoman on 9/25/2010 10:43:43 AM , Rating: 2
If absolutely everything you ever want to watch is on Netflix/Hulu, then be my guest.

Other people may want to watch sports, the local news, and other stuff that isn't on Netflix or Hulu.

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