As counter intuitive as it may seem, the emerging range of online video services might give pay TV subscribers little incentive to cut the cord, reunite existing cord-cutters back with pay TV, and even start driving would-be cord-nevers to adopt pay TV.
The conventional wisdom about OTT has been that the cost of online TV would be much lower than for traditional pay TV. Along comes DISH Network’s Sling TV, which only seems to reinforce that point. Comparing Sling TV’s $20/month with the typical entry-level pay TV package at $40/month – excluding monthly service and equipment fees – seems to bear that out.
Or does it?
A reality-check against the conventional wisdom
For the first time, there are enough actual online TV services that it’s becoming possible to make an objective comparison. So, let’s compare:
Basic Pay TV (for about $40 per month)
- Broadcast networks: CBS, NBC, ABC and Fox
- Networks found on pay TV: AMC Networks, CBS, Discovery Communications, The Walt Disney Company, Netwarko Grupo (Latino), Scripps Networks, Time Warner, Viacom and others
Online TV (…for about $40 per month!)
- DISH Sling TV ($20/month): AMC Networks, Disney/ABC, Netwarko Grupo, Scripps Networks, Time Warner
- Sony Playstation Vue (TBD, but let’s say $20/month): CBS, Discovery, Fox, NBC Universal, Scripps, Time Warner, Viacom
- Broadcast networks (live linear): Sony will offer CBS and Fox linear feeds in selected local markets.
- Or in place of Sony, you can opt for a combination of CBS All Access (which offers CBS linear feeds) plus HBO’s upcoming direct-to-consumer online TV service; probably for about the same $20/mo.
You might have noticed that Sling TV’s programming and Sony’s are almost mutually exclusive. They have only Scripps and Time Warner in common. So, an online-only subscriber who wants to come at all close to replicating a traditional MVPD’s line-up would need both DISH and Sony.
Is price the right metric for comparison?
My comparison make it look as if there’s price parity between online and pay TV, but this is not a truly fair comparison. Pay TV’s $40/mo for pay TV excludes monthly equipment rental and service fees; which bring it to about $60-70/month. Not to mention what the price might rise to after the new-subscriber promotional period wears off.
Okay: $60-$70/mo for pay TV, versus $40/mo for online. But unless the online subscriber abandons their Netflix, Hulu and/or Amazon Instant Video (or Prime) accounts – and many online subscribers take two or even all three of those, at about $10 each per month, plus or minus – the price comparison again comes closer to parity. (And let’s also acknowledge that $60-$70 price points are a lot higher than many of us envisioned…)
Both may taste great, but one may be less filling
Purely on the basis of the number of available channels, pay TV wins. Compare the lineups and prices from Comcast, AT&T U-verse and DISH Network (not SlingTV) with those from SlingTV and Sony Playstation Vue. Add all of the local and independent channels, and live local sports programming that you don’t get online.
One might protest that you can fill the local sports gap with online programming from professional sports leagues. But MLB.TV blocks programming for local games, in order to drive people back to local broadcast or pay TV. This may change, but for now, that’s the way it is. Plus, my local MLB games are included with my pay TV subscription, but MLB.TV starts at $19.95 per month. Yikes!
This situation makes me wonder: was it the plan all along to drive people back to pay TV? In the end, there may be very little incentive for pay TV subscribers to cut the cord, and very little reason for cord-nevers not to ultimately adopt the pay TV cord. DISH Network, for one, might be quite pleased with such a turn of events – and maybe this was DISH’s objective all along.
It comes down to priorities. Would you be satisfied enough with the limited lineups of online TV, and okay with filling the gaps with services from individual networks? Many people are. Many people are not.
Is TV having a dialectical moment?
In the discipline of philosophy, there is a method of resolving disagreements, called the dialectic process, which consists of a thesis, an antithesis, and a synthesis. Here, the thesis has been that OTT would drive people from pay TV. The antithesis has been the empire striking back, that pay TV would have sufficient value stem cord-cutting.
But this also can take an entirely different direction. The synthesis might be the emergence of the “hybrid subscriber,” in which one might take pay TV for local news and live sports, plus whatever else they get with the lowest cost basic subscription, and then get his or her premium content online from Hulu and perhaps HBO. In any of these scenarios, the alternatives might add up pretty close: a cord-never might end up paying the same as a pay TV subscriber would pay.
Each year, not only is there a lot of hype about the NFL Super Bowl, the advertising is always part of the entertainment. So when DISH Network announced that it’s invoking Reverse AutoHop – inverting the commercial-skipping feature of its Hopper home media gateway to skip the game, so you can watch ONLY the advertising – I could only say “Brilliant!”
(Edited Monday Feb 2nd: My favorite didn’t win, but 1) there’s always next year, and 2) baseball season is coming.)
DISH Network used the 2015 CES conference both as a review of recent announcements and as a launch pad for the new; in three areas: new content offerings, new equipment, and a new user experience. Some of it was evolutionary, and some of it pace-setting. Here’s a recap of my tour of DISH at CES.
Online video to the TV
First there were a number of content announcements. Because it was announced just before the pending holiday break, many had missed DISH’s December 17 announcement that Netflix has been integrated into the DISH Hopper home media gateway as a TV app; one of the first US pay TV operators to do so. DISH also announced a Vevo music video TV app.
TV video online
DISH’s biggest CES news was its new Sling TV service, which will be available later this year. Sling TV is a stand-alone online TV service designed expressly for Millennials, the 18-35 audience that the pay TV industry will increasingly be depending upon to sustain the business as today’s pay TV households age and gradually disengage from premium programming. No traditional satellite TV subscription required.
Rather than being cord-cutters, Millennials tend to be “cord-nevers” who feel that they can get all the video programming they need from other sources without subscribing to pay TV in the first place. Others of that demographic ‘hitch-hike’ on their family’s pay TV plan, despite having households of their own. So to characterize Millennials as “cord-cutters” isn’t fully accurate. DISH hopes to attract this demographic where others have failed.
DISH is carrying forward the traditional multi-tiered pay TV content model into this online offering, with a bit of an a-la-carte twist. The $20/month base offering consists of programming from The Walt Disney Company (ESPN and ABC), Turner (CNN, Cartoon Network and TBS) and Scripps Networks Interactive (The Food Channel, HGTV, and the Travel Channel). Announced add-on packs include a Kids Extra (Disney Junior, Disney XD, Boomerang, Baby TV and Duck TV) and a News & Info Extra (HLN, Cooking Channel, DIY and Bloomberg), for $5/month each.
Missing are DVR functionality and regionally-tailored live sports, local programming, and linear programming from TV networks other than ABC and ESPN. It isn’t perfect but it’s a promising start that is gated by content rights, not by technology.
This offering was just a matter of time in coming. Last year, DISH began to offer an international TV programming service online, called DISH World. DISH officials at CES confirmed that DISH World was essentially the Beta for Sling TV. DISH acquired online video technology pioneer Move Networks several years ago, and uses the Move software in both services.
DISH announced a 4K version of the Joey client set-top box, which later received an Editors Choice award from Reviewed.com, a USA Today division that was an official media partner with the Consumer Electronics Association, the host of CES. In picture-in-picture mode, the 4K Joey delivers two simultaneous HD-quality pictures. For DISH customers that don’t have a 4K TV, the existing Joey remains available.
New user experience
DISH was also demonstrating a new TV user interface for the Hopper, which includes a new Home screen, a Mini-guide, Favorites, and Recommendations (using TiVo’s Digitalsmiths platform) . Users will be able to see what’s ‘On Now,’ ‘On Later,’ and recommended content. Search will be across all TV content, plus VEVO. DISH is also adding a Netflix-like “choose uer profile” interface, first to the DISH Anywhere (available as a mobile app or via browser), and later, to the Hopper itself.
Another part of the new user experience is a new remote control for the Hopper with Sling home media gateway. In addition to having buttons, there’s a track pad and speech recognition. Touch and speech have become part of the autonomic nervous system of smartphone users, and DISH acknowledges that reality. The speech recognition is from Rovi’s Veveo subsidiary, with a back-end from Nuance.
DISH will also be supporting high-quality whole-home music via the Hopper and the Joey, and have access to content from IHeartRadio, TuneIn and Pandora, as well as their own music libraries via their home networks. DISH will be pushing the enabling software to the Hopper “sometime this summer.” An integration with Sonos wireless home music systems is also coming later this year.
If you want to watch your recording of The Adventures of Sherlock Holmes, you have to scroll down to the “T”s for “The.” Not the “A”s for “Adventures,” as I highlighted with the yellow box. It’s tedious to scroll all the way down to the “Ts” to watch something that starts with an “A.” Why not sequence by the first significant word in the title?
Obligatory miscellaneous distraction
In the middle of my booth tour, an impatient late-middle-aged ‘gentleman’ inserted himself between us, blurting out “Fox News! Fox News!,” then walking away mumbling about politics; apparently expecting the DISH executive to resolve the DISH-Fox carriage dispute that began on December 20, right then and there. It would take another week for that to happen.
If I had any single take-away from all of this, it’s that DISH has a clear view toward the future. The company realizes that it can’t bend new consumers to the old ways of pay TV, and instead, is taking steps to meet these consumers more on their own terms. They also realize that today’s mobile consumers aren’t going to be tied to any single access network, given the availability of LTE and wireline broadband (to say nothing of DISH’s multiple wireless spectrum acquisitions in recent years, and DISH said nothing).
Secondarily, Sling TV reinforces my existing belief that “online TV” will probably look a lot like “regular pay TV” as it matures. The content sources may be different – and multiple – but the entire bill might come to resemble what today’s consumers pay for DISH Network, Comcast or AT&T U-verse. Start with the base $20 for Sling TV, and $5/each for the add-on packs. Then add Netflix, Hulu, direct-to-consumer services from HBO and CBS, plus live TV (however that may happen, given what happened with Aereo), and it all adds up from the consumer perspective. We seem to be headed toward a world that embraces both bundling and a-la-carte.
What’s wrong with this picture is that consumers have to deal with a multitude of user experiences, instead of just one. Someone will eventually succeed in creating single user experience across all pay and online sources. It has to be someone that’s separate from the vested interests of each individual content and service provider. There are a number of third party TV Remote Control apps, but none of them quite nail it.
Competition is coming
It will be interesting to see how well DISH fares against emerging competition from Sony, HBO, CBS, DirecTV (especially if the AT&T acquisition goes through), and Verizon, which shrugged off DISH’s Sling TV announcement, despite that it shut down Redbox Instant last year.
My Bottom line
DISH has taken the old adage of retail to heart: location, location, location, while taking away any excuses not to take services from them. I think DISH is more pre-disposed to a world view of ‘virtual subscribers’ because satellite operators don’t have a direct physical connection (over a wire) with them.
At the time of announcement this week, the only two major devices not supported by Sling TV were Apple TV and the Chromecast. If that’s not enough, consumers can opt for the full pay TV experience and the Hopper’s Slingbox technology, to can get the content that online video offerings lack. Maybe that’s DISH’s real strategy: to use Sling TV as the teaser to get Millennials on to the full Hopper-based pay TV offering.
I also look forward to trying out the new user experience and remote control when they become available.
The International Consumer Electronics Show (CES) in Las Vegas sets the stage for each new year, and the 2015 edition was no exception. Once largely about home audio, TVs, and car stereo, CES has evolved into a must-attend event for every stakeholder in the digital content value chain; from content creation to the point of consumption and every stage in between. Hence, most of the TV service delivery infrastructure players either had booths on the trade show floor, had suites in the nearby hotels, or did both; and most pay TV operators were there as well.
It must be a huge challenge for the Consumer Electronics Association to select winners of the CES Innovation Awards each year, and being ‘just one guy,’ I won’t even pretend to emulate this task. But I found three items during CES to be especially noteworthy – and taken together, emblematic of the larger trend of platform and service virtualization.
Of great significance is DISH Network‘s continuing evolution as an alternative kind of ‘TV Everywhere’ provider. By launching Sling TV, DISH has both elevated the expectations of what online TV should be, and while it isn’t perfect, has deliberately moved to address the demographic that the pay TV industry is the most concerned about losing: millennials. In my opinion, DISH has been the most forward-thinking of the US pay TV operators in the area of online TV. DISH also announced a new user experience, a track-pad-based TV remote control with speech recognition and a new 4K Joey client set-top box for its Hopper with Sling home media center. DISH’s sibling company EchoStar used CES for the US launch of a new home security and home control offering called SAGE, which EchoStar also demonstrated a few months back at IBC.
Also noteworthy was cable operator Charter Communications‘ new WorldBox set-top box, Spectrum EPG and user experience. Unlike the direction being taken by other Tier-1 cable operators, and in particular with the RDK, where the adopters must have RDK-specific set-top boxes and must upgrade their networks to all-IP distribution in order to realize the full potential, Charter has partnered with Cisco and Active Video Networks to introduce an experience that can be deployed to decade-old set-top boxes as well as new IP video-capable ones. Yet, at the same time, it’s a multiscreen solution. Further details are in my article for CED Magazine.
But to me, the highlight of CES wasn’t at CES itself, but rather, was AT&T’s 2015 Developer Summit and Hackathon at the nearby Palms Resort in Las Vegas. While most pay TV operators advance their features in carefully controlled increments, AT&T offers APIs that allow it to essentially open-source its entire network, and has invited developers of all kinds to play in their sandbox. By doing so, AT&T is providing keys to the kingdom to any developer that helps drive traffic over the AT&T network. While other pay TV operators are taking their first steps into home security and home control, AT&T has not only opened AT&T Digital Life (not to mention its AT&T U-verse pay TV platform) to third party developers, but enables development for mobility, connected vehicles, wearables, and the industrial ‘Internet of Things.’ And a host of partnered developers were there in support.
DISH, AT&T and Charter are each “coloring outside the lines” of conventional wisdom, and I’ll be writing more about each of them in the coming week.
Over the weekend, AT&T announced its intentions to acquire satellite TV operator DirecTV. Should the deal pass regulatory muster and go through, it will create an operator with about 26 million pay TV subscribers, plus 17 million broadband subs, 11 million phone subscribers and 100 million wireless customers. As a merged entity, AT&T becomes a national pay TV provider, with immediate access to TV subscribers outside its fixed-line (U-verse) territory. That’s just in North America. DirecTV has about 18 million TV subs in Latin America as well. All told, this would make AT&T the largest pay TV provider in the US (and in the Western Hemisphere).
Of course, DirecTV is a high-value target for content reasons as well: particularly its exclusivity for NFL Sunday Ticket. Some major AT&T suppliers must also be taking notice. For one, AT&T has based its TV service on Microsoft Mediaroom, which Ericsson bought last year. DirecTV uses NDS TV security and middleware, and NDS is now owned by Cisco. So, two TV infrastructure leaders that also both happen to be incumbent network suppliers to AT&T.
But there’s also a bigger picture: while a combined Comcast-TWC results in a triple-play provider, DirecTV adds to AT&T’s existing quad-play advantage. Without offerings that compete against AT&T wireless and DirecTV, Comcast will remain a local carrier within its own cable TV service territory; even with Time Warner Cable. To serve any devices – mobile or fixed – outside of its territory, Comcast will remain an OTT player. (Note: TWC is partnered with Verizon Wireless – but it’s anyone’s guess as to how Verizon might treat ‘foreign’ video providers over its mobile network in the future).
The expiration of Net Neutrality was certainly a strategic consideration for both AT&T and Comcast. One of AT&T’s terms in the proposed DirecTV acquisition is to place a three-year expiration date on its commitment to the FCC’s current version of Net Neutrality. This is interesting, given that DirecTV is a satellite operator with no Internet access network of its own. My own guess is that this is really a pre-emptive move to keep Comcast from having (or making Comcast pay for) equal access to AT&T mobile subscribers; for video delivered to smartphones, tablets or the Connected Car.
And Comcast doesn’t really have an answer to that. Even if Comcast were to let its own Net Neutrality commitment expire in 2018 (which is the year specified in the terms for its NBC Universal acquisition), that will only be within Comcast’s own network. Comcast would have little power over mobile carriers which, by then, will be perfectly able to parachute right into the thick of Comcast territory, to deliver high quality pay TV over LTE mobile access. This places Comcast at the ultimate disadvantage, even with TWC, because it can’t do the same in a U-verse territory. All the more reason to keep Net Neutrality principles in place.
By missing out on DirecTV now, and by not bidding for Sprint last year, Comcast missed two strategic opportunities to reach subscribers that don’t depend on fixed lines, at a time when mobility arguably represents the biggest single opportunity in telecom. Not quite so much to see here after all.
But the competition will really get interesting when DISH finally launches a national LTE service, using all that spectrum that they’ve acquired in recent years. Or, even more interesting if DISH were to acquire T-Mobile as well.
This article continues a story that starts here.
On the same day that I contacted DISH to schedule the service move, I also called CenturyLink to schedule new service activation with them. Because there is no phone number portability for land-lines in the US, CenturyLink assigned us two new voice numbers: one for my home office and the other for residential service; to be activated on January 31.
The struggle begins
As I was arranging new voice services, I was also informed that CenturyLink could not activate broadband on the same day. Still hopeful, beginning on January 25, I began calling CenturyLink every couple of days anyway, to see whether they could align voice and broadband installations. The agent said ‘she would try’ and gave me her contact number – which was a voicemail, not a live connection. After an hour or so, each time, she would leave me a voicemail back, to say that she was trying. On January 30, the day before the activation, she left another message saying she thought that it could (not ‘would’) be done.
Soon afterward, I received an email saying that broadband would be activated on Wednesday February 5, meaning that I would have to go to the local coffee-and-donut shop for connectivity on Monday and Tuesday, and then be out of touch altogether on Wednesday while I was waiting at home for the broadband activation. Not an auspicious start.
The phones were backwards
On Monday, February 3rd, I plugged phones into the office and the kitchen. The office phone got dial tone. The kitchen phone had the fast-beep that indicated I had voicemail. When I called to retrieve my messages, it was my business voicemail. Somehow, CenturyLink was able to transfer my old business voicemail (including existing messages) to my new numbers – but the voicemail was associated with the wrong line. Then I called my office from the kitchen, and instead of ringing, it went right to voicemail, where the nice recorded lady informed me that my voice mailbox ‘had not been set up.’ This led me to conclude that both lines were provisioned backward – and that the voicemail I reached at my office number must have been the new voicemail for our residential phone. Not only that, but when I called the office line from the residential phone, the incoming caller-ID was the office phone’s and a call from the office phone to the residential phone showed caller-ID for the residential phone.
On Tuesday, a box from CenturyLink arrived at my doorstep, so I had no reason not to expect broadband installation on Wednesday. I also assumed (although CenturyLink’s email wasn’t explicit about this) that a technician would visit my site. I was also anxious to get the phone number reversal resolved.
By 3pm on Wednesday, I started to get nervous that nobody had yet shown up to connect my broadband service, so I called CenturyLink. The agent said that she had no way of knowing the status, and put me on hold to call a dispatcher. When she came back, she said that someone was in my neighborhood at the switch, so I assumed that the tech would be at the house shortly.
At 4:40pm, it was still a no-show, so I called again, only to be told that nobody would be coming that day. The agent also informed me that I was now scheduled to be installed on Friday 2/7, and that the house would need to be re-wired at a cost of $85 per hour. At which point, I lost my patience and ended the call.
Taking matters into my own hands
Suddenly I remembered the box that had shown up the previous day and decided that I could try to take matters into my own hands. Inside were an ActionTec C1000A DSL modem, an Ethernet cable and an RJ-11 cable, along with a sheet of step-by-step instructions that said that I should connect my “PC” to one of the Ethernet ports on the modem (although my home, like many others, connects to the Internet via a separate WiFi router; which in my case is an Apple AirPort Extreme).
I plugged the Ethernet cable between the ActionTec and the AirPort Extreme and turned everything on. Because nobody had ever visited or spoken with me, not only did I have any idea as to which of the wall jacks in my office would be active with which voice lines, but also, didn’t know which one was meant for broadband. After some trial-and-error, the lights went green on the Actiontec: one of the jacks worked.
The AirPort Extreme found my home network but not the ActionTec. Fortunately, Apple’s AirPort Utility software identified that the AirPort needed to be put into ‘Bridge Mode,’ which I did, which worked. The ActionTec found the DSL line but not the Internet, but that was remedied by cycling the power on the ActionTec. A browser window appeared on my screen, saying “Welcome to Qwest High Speed Internet! Please insert the QuickConnect! CD-ROM…”
Except that Qwest was acquired by CenturyLink more than a year ago, and no longer exists. And except that there was no CD-ROM in the package with the modem. Entering a different URL resulted in the same greeting.
On to Part 3
During the past week, my spouse and I moved to a new home, about 12 miles from our previous one. Accordingly, we had to move our pay TV service, and obtain new fixed-line phone and broadband access from the phone company. The two experiences could not have been more different.
This begins a multi-part article to recount my experience, and highlights how differently a service provider will treat consumers, which I believe is based on whether or not they think they have to compete for your business. Much of this is a swashbuckling tale of outsourcing and lack-of-coordination, complete with the blow-by-blow minutiae, but we’ll get back ’round to the real point before the end.
First, the good: DISH Network’s new Hopper with Sling
On January 14, two weeks in advance of our move, I called DISH Network to request the move of their services to our new place, which we scheduled for Tuesday February 4. Also, I was anxious to evaluate DISH’s new Hopper with Sling home media gateway and whole-home DVR, after having seen it demonstrated at CES. Unlike the original Hopper, the Hopper with Sling’s Broadcom BCM7425 processor incorporates the capabilities of the previously separate Slingbox right into the set-top box itself.
A couple of days ahead of the actual installation date, a DISH Network representative called me to confirm the appointment, and also asked me to take my existing set-top boxes from the old home. At 8:10am on Tuesday morning, Roman (the technician) arrived at our new home, took down the existing satellite dish, put the new one in place, and then asked where I wanted the set-top boxes installed.
The new Hopper with Sling went into the family room, and our existing Joey (client set-top box) went into one of the bedrooms. Roman had to replace the coaxial cables, as they were old and had an insufficient electrical rating. Since he was in the crawl space under the house anyway, he also offered to run wiring for my home audio system (which I didn’t request but was grateful for). Then he showed me how to transfer the DVR recordings from the original Hopper, onto the new Hopper with Sling. After about 90 minutes, Roman was gone, and everything worked great.
In summary, the DISH customer service experience exceeded my expectations. Stay tuned to this blog for an extended review of the new Hopper with Sling, Super Joey and Wireless Joey set-top boxes, as well as the “Best of CES” Virtual Joey and the other new DISH apps that go with them. My 2012 review of the original DISH Hopper is here.
New phone and broadband service options were limited
We also needed to arrange new phone and broadband services. My new neighborhood is served by two broadband providers. One is CenturyLink, the incumbent Telco, and the other is a small independent broadband provider that uses digital terrestrial microwave delivery. The microwave provider had speeds of <2.5mbps, whereas Centurylink told me their DSL lines qualified at “better than 3mbps” in our neighborhood. I opted for CenturyLink because they offered a phones-plus-broadband package at a reduced price. In any case, because we are in an outlying area, there is no local cable operator, so we will miss the 20-plus megabit speeds we got from Comcast, let alone the 40mbps promised by CenturyLink themselves.
Also because we are in an outlying area, T-Mobile’s cellular signal doesn’t reach. One of our sons is now on Verizon, which does reach, so I checked into that. Years ago, I had switched from Verizon to T-Mobile because Verizon’s CDMA phones didn’t work in Europe – you had to rent a “special” (GSM) phone from them if you wanted to travel outside of their US footprint – and unfortunately, this is still the case. Verizon’s network upgrade to LTE is supposed to resolve this later in 2014, in that subscribers will be have the option to use multi-band LTE phones which work elsewhere, but AT&T’s network reaches us today, and that’s the way we went.
On to Part 2 of this story.
We all replace our mobile phones and computers every few years, not to mention our cars and many other high-ticket items in our lives. But TVs are different. They’re supposed to last for ten or twenty years, aren’t they? But our first-generation Google TV device has reached its half-life. Read the entire article on Telecompetitor!
At CES 2013, Cisco held an event which included demos of Cox Communications new Cisco video gateway, a Cox TV app on the iPad, and a new EPG. DISH Network launched a new version of its Hopper whole home DVR and AT&T held its 2013 Developer Summit. Read the rest of the article on Telecompetitor…
Microsoft today made the long-expected announcement that it is ‘transforming TV’ by bringing the TV experience to the Xbox 360 (or, said another way, adding a ‘TV portal’ to the Xbox). My first reaction was that it was the ‘inverse’ of DISH Network’s Blockbuster Movie Pass announcement of September 23. But then, the term ‘inverse’ doesn’t really apply if there are three terms to the online video equation.
Here’s what I mean:
- Microsoft’s Xbox 360 TV initiative is ‘device-centric,’ independent of service or content provider,
- DISH’s Blockbuster Movie Pass is ‘service-centric,’ independent of content provider or device,
- Then, there’s ‘content centric,’ as in HBO GO or Max GO or WatchESPN; where the content can be just as easily delivered to an app – independent of service provider or device – as it can be to a TV set.
On the surface, ‘Xbox 360 TV’ doesn’t sound like such a big deal, but it is. On one hand, Xbox users can already get on-demand online video content through the Zune on Xbox Live marketplace, which, according to IHS Screen Digest has 16.4% market share for online movies – not to mention Hulu and Netflix.
But on the other hand, it’s live TV. This is of strategic importance for Microsoft: its ability to provide live multichannel TV instantly differentiates the Xbox 360 from other online video devices like Apple TV, Google TV, Boxee, Roku and seemingly dozens of other little boxes that have come and gone over the past couple of years.
Which brings us to DISH. Interestingly, DISH seems to have looked at their Blockbuster announcement more as a way to counter the threat of online video from Netflix, Comcast and DirecTV, when in reality, the chart that DISH published at announcement underscores – did they mean not to mention this? – what’s missing from Netflix
and Qwikster: multichannel TV itself as the differentiator.
[ Note: 5 days after this blog posting, Netflix decided to cancel Qwikster, which would have separated Netflix’ DVD rental business from its streaming business – but the point I make still remains. Just combine the two rightmost columns of this table. ]
Add in DISH’s Sling technology, Move Networks’ online video codec, the fact that DISH bought three satellite companies this year, and now owns a Telco? Hmmm…something is brewing at DISH, and I bet it will have more impact than ‘Xbox TV’
It just goes to show how much navel-gazing there is about online TV. Consider how much our industry has ruminated over OTT and cable TV cord-cutting, when in fact, the percentages (and the revenues) are still very low. The other standout stat on the chart is the fact that it underscores how many titles are not available online, compared with what’s on DVD.
The Xbox 360 gives content providers another channel to market, putting their content in front of people via a device that’s new to many of the content providers. [ Notice, by the way, that several TV programmers are going to the Xbox directly, including HBO, ESPN and SyFy. We'll see how much leverage this gives them when it comes time for pay TV providers to renew carriage agreements with them. ]
As a set-top box substitute, the Xbox 360 stands to reduce CapEx for service providers (although AT&T, BT, Telus and other service providers have deployed using the Xbox as a set-top, and none of them are are saying how widely adopted it has been). We’ll see about that too.