Posts Tagged ‘broadband’

Battles Rage Over Content, as Netflix Changes the Game in the Web TV and Streaming Video Space Once Again

Tuesday, December 7th, 2010

ba-netflix0811_f_SFCG1281474279With the help of Wikipedia, I learned the different types of battles that are fought. If you’ve been following what is going on in the latest turf wars between the cable providers (Time Warner Cable, Comcast), online providers (Netflix, Hulu) and media Companies (Fox, CBS) – you’d see very different strategies deployed by each side. All have one common goal in mind…control the distribution of entertainment to consumers, and all seems fair in this war. 

A “battle of attrition” aims to inflict losses on an enemy that are less sustainable compared to one’s own losses.

According to this New York Times, Netflix recently made a bold move by launching a new “streaming only” service, offering unlimited streaming movies and TV shows for a mere $7.99 a month. Also, in addition to Netflix paying the Post Office a whopping $500 million dollars a year in postage to mail out their signature red envelopes filled with disks, they will now pay studios another hefty sum for rights to their movies by recently completing a combined deal with Paramount, MGM and Lionsgate for one billion dollars. This does not include deals Netflix made earlier in the year with other major studios, such as Sony, Warner Brothers, Universal and 20th Century Fox.

So why are cable providers like Time Warner Cable and Comcast getting hot under the collar? Let’s take a closer look:

Netflix currently pays Starz, a pay TV channel, about 15 cents a month for each subscriber (which allows their customers to watch streaming movies from Sony and Disney), pennies compared to the $4 to $5 a month that cable and satellite owners pay for access to Starz, according to Rich Greenfield, an analyst at BTIG Research.

These types of deals, which allow consumers to access a larger catalogue of movies and bypass their local cable provider by accessing them online, couldn’t come at a worse time for companies like Time Warner Cable and Comcast. Cable providers already reported a net loss of 119,000 customers in the third quarter of 2010, the largest decline in 30 years.

A “battle of envelopment” involves an attack on one or both flanks.

Comcast is fighting back on two fronts by slapping Level 3 Communications, a provider of internet backbone services, which handles Netflix content, with “additional traffic fees.” Incidentally, Comcast, who’s acquisition of NBC is imminent, already competes directly with Netflix through their new acquisition of Hulu (Comcast owns 32 percent stake in Hulu). The rate hike could easily be seen as a way for Comcast to milk their competition, however, they can make the argument that Netflix’s massive volume is overtaxing their system and therefore should pay more. A recent study by Sandvine, a broadband equipment maker, showed that Netflix’s 16 million customers accounted for more than 20 percent of all Internet download traffic in North America during peak evening hours)

A “battle of encounter” is a meeting engagement where the opposing sides collide in the field without either having prepared their attack or defense.

If all of this wasn’t enough to make cable executives nervous, Netflix followed up their unlimited streaming offer by announcing a deal with newly formed film studio, FilmDistrict. As highlighted in this New York Observer article, the part of this deal that could prove to be a game changer is that it doesn’t include the standard “pay TV window” wherein new releases go to the cable industry first, then premier on Netlifx a few months later. 

According to The New York Post, Netflix is also in talks with studios about gaining access to “current episodes” of primetime TV shows and is willing to pay between $70,000 and $100,000 per episode. This is a first since Netflix has always offered only TV shows from past seasons.

Through all of this, media companies have been in constant negotiations with all of the “content distributors” – cable providers (Time Warner Cable and Comcast) and online providers (Netflix) – with behemoths like Google, Sony and Apple waiting in the wings as all three plan to compete in the game of online streaming distribution. Google, however, has already met heavy resistance from the networks. ABC, CBS, and NBC who all said they would not allow Google TV to stream full episodes of their shows. This should make for some interesting future negotiations between the two sides. But I wouldn’t be surprised if the networks suddenly changed their mind if Google TV’s relatively new service begins to take off.

A “battle of annihilation” is one in which the defeated party is destroyed in the field.

So what about the consumer, the eyeballs everyone’s vying for in all of this? I for one couldn’t be happier with all of the choices I suddenly have to watch movies or TV shows. The Internet is once again threatening the “middleman,” or, as I like to think of it, just another case of the Internet once again replacing one of the “brokers” of the world. We’ve seen it happen to some extent with real estate, stock trading … and now entertainment.  For 30 years cable providers have been the “brokers” for entertainment, bringing media and consumers together. It appears, for the moment at least, another “broker” is in jeopardy of once again being replaced by the Internet.

So what are your thoughts? Who do you think will win the on-going battle? Are you happy with the choices you have to access entertainment content? Please share your thoughts with me and the readers of BurrellesLuce Fresh Ideas.

Will Consumer Electronics Show (CES) Shorten or Lengthen Your Mobile Leash?

Wednesday, January 6th, 2010

Valerie Simon

YoGen Consumer Electronics ShowCommunications underwent a dramatic transformation in the past decade. As Josh Berrnoff noted in his recent Groundswell blog post, in the past 10 years, broadband went from rare to ubiquitous, mobile phone subscriptions reached 270 million (out of 305 million people) and digital video recorders came into 31 million homes. Media became social, with reality television, blogs and social networks turning the tables and providing the audience with a veritable microphone. For public relations professionals, the new media landscape (including the real time web) offers new challenges and opportunities. As we move into 2010, we will continue to see more applications and devices that will help us navigate our way through this new world. Here are a few of the trends we will learn more about this week at the Consumer Electronics Show that I am particularly excited about.

  1. Consolidation My Blackberry serves as phone, camera, watch, alarm clock, and calendar in addition to being my lifeline for email, Twitter and Facebook. I have also been known  to use it as a calculator. If only it could serve as a keycard and control the thermostat and lights in my house, I might stand a better chance of getting out in the morning without forgetting. Successful apps will help you to use technology in a more efficient and convenient manner. Be on the lookout for  technologies such as the  L5 Remote, an accessory and free app that turn any iPhone or iPod touch into a universal remote control. New apps will help you to manage more media, easier and quicker than ever before.
  2. Mobility What is your workday like?  Much of my day at BurrellesLuce is spent in meetings. And let’s face it, sometimes working is not conducive to… well work. Fortunately, as we move into the next decade media smart phones are becoming even smarter, and media will move with you. Consider  Free Mobile TV, vehicles that also serve as Wi-Fi hotspots… you can’t run away from the news. Whether you are working remotely or in a traditional office setting, visiting with clients, or attending a conference, your location cannot be an excuse for missing out on important information.
  3. Connectivity. If you are a communications professional not being connected is simply not longer an option (with the exception of a well deserved vacation, I suppose!) When it comes to staying connected, few things are as frustrating (or frightening) as being on the road or in a meeting and seeing  that the power bar on your Blackberry or laptop has dropped dangerously low. Since I hate packing numerous power cords (Okay, I don’t always remember to pack them), and have found myself in more than one meeting room with limited access to outlets, I was particularly excited to hear about YoGen, a green, universal mobile device charger that generates power with a simple pull and recharges devices in just minutes. One of my Twitter friends, Mike Schaffer, director of social media for Brotman-Winter-Fried Communications, will be helping to unveil the YoGen Charger at CES, so if you are in Las Vegas next week, be sure and stop by booth 4821 N, in the North Hall and say hello for me!

While I believe that these trends will help us to do a better job of managing our work, one of my colleagues pointed out that they may well allow work to manage us. Are these devices a leash that will keep you chained to work, or are they the keys to free you to a more flexible, productive and efficient workstyle? I vote for the latter, but I am curious to hear your thoughts!