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Cable Technology Feature Article

July 12, 2014

Cable Technology Week in Review

By Tara Seals, TMCnet Contributor

News in entertainment video this past week focused on the deluge of new and returning original series launching now and opportunities for advertisers. The big original series story, however, is what the future holds for one-time “movie channels” that are under attack by online streamers and are also competing with non-premium channels.

The days of premium channels holding long-standing supremacy with original programming may have already passed in some scenarios, with cable channels such as FX, AMC and TNT adding breadth-and-depth to their lineup. Online streamers Netflix and Amazon are doing exactly the same and with newer approaches. Nobody’s arguing the huge success of HBO’s Game of Thrones or Showtime’s long-running pipeline of entries. Beyond viewing success, they have helped retain consumers during the devaluation of “new” movie debuts as these channels’ once-main draw. That’s a life saver for these pay extra premium channels. But how long will it last with stiffening competition on multiple fronts?

Check out all of the angles in our full analysis.

In the wake of a Supreme Court ruling that determined Aereo is essentially a cable TV system retransmitting off-air TV signals, and therefore must pay TV broadcasters fees, the start-up is asking to officially take on the designation. In its initial incarnation, Aereo was selling access to local over the air stations for $8 a month. If Aereo were to win approval to operate as a cable TV operator, it would pay local broadcasters for access to their signals. But the retail price would have to be higher. Just how much higher is perhaps the issue. Aereo content would still have the advantage of being viewable on a variety of devices with Internet access, not just through a fixed connection to TVs. Whether that is a realistic option for Aereo is not so clear.

Some think Aereo ultimately could be used by local broadcasters as an owned distribution platform to get their existing content “online” in a scalable way.

Find out more about Aereo’s next move, click here.

The battle of public opinion has been playing out when it comes to the Comcast (News - Alert)-Time Warner Cable merger and whether or not it will be a good thing for consumers—and everyone has an opinion. But real regulatory review will now commence thanks to the Federal Communications Commission naming its review committee for the deal.

The members include FCC (News - Alert) head counsel Jon Sallet and other FCC department heads, and  three outside voices. William Rogerson, the economics chair at Northwestern University, was chief economist of the FCC during the Clinton administration and is considered a “merger hawk”—as in, he won’t be inclined to be soft on the companies. He opposed the Comcast-NBCUniversal merger, as an example. Jamillia Ferris is joining the team as well and also has a left-leaning background, having worked during the first Obama administration as chief of staff in the Justice Department's antitrust division. And, another Northwestern professor from the Kellogg School of Management, Shane Greenstein, will come to the table with expertise in management and communications.

For full details and analysis, click here.

Meanwhile, SpinCo, the company to spun off Comcast if the aforementioned mega-merger with Time Warner (News - Alert) Cable goes through, is fleshing out its executive management team. Matt Siegel has been appointed as its CFO to help as SpinCo takes shape—he is for now the senior vice president and treasurer of Time Warner Cable. He has been with the company since May 2008, and prior to it, he worked with Time Warner Inc as its vice president and assistant treasurer since 2001. Before joining Time Warner, Siegal was the senior vice president of finance and treasurer at Insight Communications, a multi-system cable operator located in the Midwest and New York.

Read the full low-down on the appointment, detailed here.

Meanwhile, pay-TV seems to be holding its own, merger or no merger. Some 77 percent of U.S. adults say they regularly watch television shows using either cable TV (55 percent) or satellite TV (23 percent), while 43 percent view streamed video. About 67 percent of Millennials report they watch streamed video, according to Harris Interactive (News - Alert).

About 38 percent of respondents say they've subscribed to premium cable TV channels in order to watch specific shows, while 24 percent have subscribed to one or more streaming services for the same reason, Harris Interactive reports among those who regularly watch television shows using streaming, 74 percent use a computer to do so, while 55 percent use a television (attached to a set-top box, a game system or a television with integrated online capabilities).

It isn’t clear how those preferences might change, though, as more content traditionally available only from a bundled linear video subscription gets “unbundled,” albeit slowly. Ironically, the drive for content uniqueness also will drive demand for more bundling, despite the clear demand for "unbundled" access. Looking specifically at streaming TV's likely "core" constituents, half of those who list streaming among their top venues for television shows say they've subscribed to streaming services for access to specific shows.

Read more about our shifting viewing habits, by clicking here.

Moving on from video, this week it became clear that a circle of telecom voices has been pushing to mandate HD voice quality—whatever that is on any particular day of the week—as a part of the PSTN to IP transition.  By the time the Federal Communications Commission gets around to deciding when that transition takes place, carriers may have little option but to offer HD voice as a part of the upgrade.  

The Voice Communication Exchange Committee (VCXC) meanwhile has filed paperwork with the FCC to "investigate the benefits of a common HD voice implementation to replace standard definition" -- not narrowband, "standard"—PSTN voice services. VCXC's goal is to get the global telecom to all-IP and upgraded to HD voice by June 15, 2018—roughly four years from now. But Congress hasn't even talked about it, so how effective could any initiative be?

Read our columnist’s analysis, here.

Speaking of HD voice, without a lot of fanfare, Cablevision is rolling out an HD voice service to its home subscribers in New York and surrounding areas. This marks the first time a large cable company has introduced HD voice to its consumers and could indicate how the rest of the cable industry will go over the next 12 to 18 months. Cablevision was the first large cable company to roll out HD voice to its business customers five years ago.  Other firms only started rolling out HD voice over the past two years, so Cablevision has clearly been ahead of the pack in terms of embracing HD voice. The company reported it had 2.8 million on voice customers at the end of the first quarter of 2014, so this is a pretty significant "HD voice capable" island.

The most intriguing statement buried within Cablevision's release is an announcement of "Interoperability" with other HD voice services. Exactly what this means is unclear, but connectivity either via IntelPeer or another independent exchange would open up a number of existing G.722 landline based services, while the cable companies themselves already support HD voice "islands" within their business services. Will Cablevision be able to exchange HD voice calls via transcoding with the mobile world? The company didn't say.

Read more about this pioneering move, here.

To check out more details on all of this and more, visit our homepage. And have a great weekend!

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