Rising Programming Costs Hit Smaller Providers Harder; More Flexibility Needed
Posted by Steve Pastorkovich on Monday, May 6, 2013 · 
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A new report from market research firm Moody’s Investors Services confirms that smaller video providers are harder hit by rising programming costs than their larger counterparts. Of course, this comes as no surprise to rural multichannel video programming distributors (MVPDs). The report also does not exactly go out on a limb when it predicts that the gap between what small and large MVPDs pay for content will probably continue to increase in the coming years. Smaller companies’ relative lack of bargaining power leads to steeper cost increases, according to Moody’s. In contrast, companies like Comcast, with 22 million subscribers, and Time Warner Cable, with about 12 million, can leverage their scale to contain their content costs to less damaging levels (in addition to, in some cases, leveraging their ownership of sizeable parts of the content in question).
Moody’s does not expect major changes in the structure of programming contracts in the foreseeable future. Therefore, retransmission costs will continue to grow, and become a greater percentage of an MVPD’s (and thus consumers’) overall costs. As media consolidation continues, the bargaining disadvantage of smaller providers will only get worse, according to Moody’s. This, in turn, could lead to more consolidation among smaller MVPDs. Read more
Amazon Reportedly Developing Set-Top Box
Posted by Rick Schadelbauer on Monday, April 29, 2013 · ·
According to sources not at liberty to speak on the record, online retailer Amazon is in the process of developing a set-top box (STB) that would allow its customers to stream video over the Internet.
The device would place Amazon in direct competition with Apple and its “Apple TV” box, as well as Roku and Boxee. Sony and Microsoft also deliver video programming through their gaming consoles.
The STB would be a logical next step for Amazon, which already offers a wide variety of hardware, including tablets and e-readers, as well as a smartphone still currently in development.
Though the retail price of box is yet to be determined, Amazon’s pricing model with its popular Kindle has been to sell the device at a steep discount, and then generate revenue through increased content sales.
Customers using the STB could select from Amazon’s on-demand video service, which offers first-run movies and TV shows, as well as the Amazon Prime video offerings, which are made available to users of the company’s two-day shipping service.
Also in the video arena, Amazon recently followed NetFlix into the original programming arena, developing original pilots and allowing its customers to decide which will become full-fledged series.
As OTT Revenue Continues to Surge, Cable Fights Back
Posted by Steve Pastorkovich on Monday, April 29, 2013 · ·
Worldwide revenue for the over-the-top (OTT) video market exceeded $8 billion last year, according to ABI Research, a technology analysis firm. ABI forecasts that the OTT market will continue to grow, rising to $20 billion by 2015. Not surprisingly, much of the expansion is predicted to take place in the North American, European and Asia-Pacific markets, where growth rates exceeded 50% in 2012 alone.
However, Parks Associates, another market research company, observes that the cable industry is experiencing some success in luring customers back with free or discounted subscriptions to premium channels. Parks says that its research shows that of those who have re-subscribed to cable services within the past 18 months after they had previously cut the cable TV cord, 44% cited these promotional offers as a large factor in their decision. Promotions were the leading factor for those who re-subscribed with major cable or satellite firms. Customers who re-subscribed to video services from AT&T or Verizon did so most often based on the ability to access specific content, according to Parks.
ABI states that while it does not see the end of traditional media, changing market dynamics will clearly redistribute revenue streams as consumers alter how they view content. Even the OTT market is itself changing. For example, ABI says that 58% of OTT revenue came from a subscription service last year. However, the company forecasts that this will decline to less than 32% within five years as customers shift toward more one-time viewing purchases. Subscription services may not go away, but these latest figures clearly confirm that consumers increasingly have the ability and desire to exert more control over how, where and when they view content.
Pay-TV Providers Allowing Live TV Streaming Outside of Customer’s Home
Posted by Rick Schadelbauer on Monday, April 22, 2013 · ·
Time Warner Cable has announced a new app that would allow subscribers with a WiFi connection to stream real-time programming outside of their home. The app, known as TWC TV, offers subscribers access to eight networks, including Aspire, Big Ten Network and BBC America, as well as 16 local news stations.
Cox and Verizon FiOS offer their customers live-TV streaming at home. TWC TV is aimed at those viewers who do not want to be separated from their television when they are outside the comfort of their own home.
Time Warner’s announcement is widely seen as a competitive response to Aereo, a service which would allow consumers to view live television over the Internet.
A number of other providers already offer out-of-home streaming. DirecTV launched such a service last September and currently offers the Audience Network, AXS TV and Sony Movie Channel, as well as others. Comcast streams 12 networks through XfinityTV.com, and Dish offers live TV streaming though its well-publicized Hopper service.
Many of the channels that are available for live streaming have done so in order to raise their visibility. So far, the larger, more established networks have adopted a “wait and see” approach.
DISH Muscles SoftBank with Sprint Bid
Posted by Josh Seidemann on Monday, April 15, 2013 · ·
Dish Network Corp. (NASDAQ: DISH) today made an unsolicited offer of $25.5 billion for Sprint Nextel (NYSE: S). The offer bests Japanese SoftBank Corp. by $5.4 billion.
The offer includes a mix of cash and stock; as of mid-afternoon, Sprint stocks rose about 14% while DISH dropped about three-percent.
If DISH prevails, the company could offer wireless voice and video nationwide. DISH would bring 40 MHz of S-band spectrum and lower 700 MHz in the E-block to the table; DISH has stated plans to develop a nationwide LTE network. A combined Sprint/DISH entity could emerge as a unique competitor on the national communications industry stage, but could implicate relationships in which DISH offerings are bundled with unaffiliated voice or broadband providers. Read more
Verizon Estimates 50% of Their Wireless Traffic is Video
Posted by Rick Schadelbauer on Monday, April 15, 2013 · ·
Speaking at the National Associations of Broadcasters convention in Las Vegas, Verizon Communications CEO Lowell McAdam estimated that half of the data carried on Verizon’s wireless network is video, and that he expects the total to reach 75% by 2017.
McAdam credited Verizon’s investment in its LTE network as the key factor enabling such large scale video delivery. “With 3G you have video clips but there is buffering,” he told the audience. “With 4G you can stream video.” Read more
Ericsson Moves Into Microsoft’s Mediaroom; New Emphasis on X-box
Posted by Steve Pastorkovich on Monday, April 15, 2013 · ·
Ericsson has announced that it is buying the Mediaroom IPTV platform from Microsoft in a deal expected to close later this year. Ericsson said that the acquisition will make it the leading IPTV and multi-screen solution provider in the world, with a market share of 25 percent. The company noted that 40 service providers, including AT&T, currently use Mediaroom’s middleware to bring video services to over 22 million set-top boxes found in 11 million households worldwide. Read more