Sony Unveils PlayStation-Based TV Service

Sony last week announced its long-anticipated online TV service, which the company hopes will pose a formidable challenge to cable and satellite providers.

Dubbed PlayStation Vue, the service initially will offer approximately 75 channels. These will reportedly include CBS, NBC and FOX, as well as USA, FX, Discovery, MTV, the Food Network, Bravo and Comedy Central. Conspicuously absent are ABC’s networks (including the Disney Channel and ESPN) and Time Warner’s channels (which include HBO).

The service initially will be delivered through Sony’s PlayStation 3 and PlayStation 4 game consoles.

While a specific price point has not been publicly announced, it is speculated that PlayStation Vue will cost approximately $60 per month, with no long-term commitment. This price point would make it extremely competitive with cable and satellite service.

“Everyday TV is about to become extraordinary,” Sony Computer Entertainment Group CEO Andrew House said in a statement. “PlayStation Vue reinvents the traditional viewing experience so your programming effortlessly finds you, enabling you to watch much more of what you want and search a lot less.”

Sony plans to offer the service to selected beta testers in the New York area, before expanding to testers in other major markets. PlayStation Vue is expected to be widely available in early 2015.

Consumer Cord Cutting Continues

Nearly one in seven broadband adopters does not subscribe to a pay-TV service, a new study finds. This marks a dramatic increase from one in 11 in 2011.

The study, “Pay TV Refugees, 2014,” was prepared by The Diffusion Group (TDG). In it, TDG estimates that 14% of broadband households do not subscribe to a pay-TV service, up from 12% a year ago and 9% in 2010.

“Today, residential broadband services are used in 75% of U.S. households, meaning 13 million broadband households are currently doing without a traditional pay-TV service,” said TDG president and author of the report Michael Greeson. While bad news for many pay-TV providers, the report’s findings illustrate “an excellent opportunity for new video purveyors, whether pure-play online ventures like Netflix or the growing list of television networks going direct-to-consumer,” he said. “Minimizing damage and maximizing opportunity presupposes an understanding of who these consumers are, what drives their decisions and what they expect from a pay-TV service, be it legacy or online.”

TDG further predicts that in the coming months the number of home broadband subscriptions will surpass the number of home pay-TV subscriptions for the first time ever.

TDG separates the non-subscribers into two distinct categories: cord cutters and cord nevers. The two groups exhibit completely different demand patterns and demographics. TDG warns that reaching these consumers will require distinctly different and sharply focused marketing techniques on the part of video service providers.

CBS Climbs Aboard the Standalone Bandwagon

If you can’t beat ‘em, adapt—CBS announced plans last week to go after the cord-cutting market through CBS All Access, a stand-alone streaming service that will offer subscribers access to both current and archived CBS content.

“With video consumption habits changing all the time, it is very important that we continue to provide the best local news, entertainment and sports via a service like CBS All Access,” said CBS Television Stations’ president Peter Dunn. “Television stations have been the fabric of local broadcasting for 75 years, and today’s announcement is part of paving the way for the next 75.”

CBS’ announcement follows on the heels of HBO going public with plans for HBO Go, which will allow viewers the ability to access HBO programming without an HBO subscription. “We will use all measures to go after” the estimated 80 million homes that do not have HBO, said HBO chairman and CEO Richard Plepler in announcing HBO Go.

The actions by CBS and HBO are a response to studies showing that more and more Americans are streaming content. Research firm emarketer, for example, estimates that 45% of Americans stream television shows at least once a month.

Not coincidentally, it has also been reported that HBO’s “Game of Thrones” series is the most pirated program in television history

Updates (Tesla), Happenings (Amazon), Taxes (Netflix), and TVs (Apple) – A Survey of Tech Things I Care About

Astute readers of the New Edge may assume that this column is the product of a lack of imagination or an unwillingness to come up with a new, original topic. You are partially correct. The other explanation for this “What’s Happening?” (what’s happening in the sense of this being an update, not the underrated 1970’s TV show) is that I tend to follow all of the topics from previous New Edge posts and found some of the updates and happenings discussed below fascinating and thought that you may agree. Hopefully it doesn’t feel too much like a Rerun.

Amazon is going to open a brick-and-mortar store. Seriously. Think back now to my previous ruminations on how Amazon is destroying the brick-and-mortar bookstore, one of my favorite institutions that is slowing dying. Now, Amazon is planning a brick-and-mortar store of its own. It will be in New York’s Herald Square next to the famous Macy’s of Thanksgiving Day parade legend and will accept returns and probably show off the Kindle and the Fire.

This article here actually has some great data and explanations for why Amazon would do this. In short, most purchases are still made in brick-and-mortar retail stores and so there is money to be made. Bezos is no dummy. Read more

Average U.S. Broadband Speed Increases, Even as World Ranking Lags

According to a new study released by cloud services provider Akamai, the average broadband speed in the U.S. was 11.4 Mbps in the second quarter of 2014. This represents an increase of 8.9% from 1Q 2014, and a 39% increase from the same quarter a year ago.

However, despite the growth in average speed, the U.S. was unable to reclaim a spot in the world top 10. According to Akamai, the U.S. dropped out of the top 10 for the first time ever in the first quarter of 2014, and remained outside the top 10 in the second quarter.

The eastern U.S. led the way in average broadband speeds, with seven states in the top 10. At 16.2 Mbps, Delaware led all states. The other eastern states in the top 10 were Virginia, D.C., Massachusetts, Connecticut, Rhode Island and New Hampshire. Three western states made the top 10: Washington, Utah and Oregon. All of the top 10 states had average speeds in excess of 12.8 Mbps.

Akamai further sought to classify customer readiness for ultra-high definition video, commonly known as 4K. In order to be considered 4K-ready, customers need an average connection speed of at least 15 Mbps. Nationwide, Akamai found that 19% of all consumers were 4K-ready. Again, Delaware was first, with 35% of customers at or above 15 Mbps, followed by Massachusetts, New Hampshire, D.C., New Jersey, Connecticut, Washington, Rhode Island, Virginia and Oregon, all exceeding 23% of customers at or above 4K-ready speed.

Got Plans Between Now and 2017?

In the latest sign that the apocalypse must surely be close at hand, TiVo has announced that it is ready to market the world’s largest DVR.

The six-tuner TiVo Mega boasts 24 terabytes of storage space. In case that doesn’t impress you, look at it this way: the Mega can record and store more than 26,000 hours of standard definition content. That’s more than three years of local news, singing competitions, and Seinfeld reruns. Three Years. 

For HD recording, Mega’s capacity dips to 4,000 hours, or about five and a half months of razor sharp local news, singing competitions, and Seinfeld reruns.

TiVo hopes to bring the Mega to market sometime in early 2015. The retail price will be approximately $5,000.

“Size matters,” said TiVO chief marketing officer Ira Bahr. “People hate being forced to delete cool stuff from their DVR before they want to or finding a TV show they had recorded is now gone. Now, with TiVo Mega they can always know their show or movie is still there to watch later. TiVo Mega offers more than 12 times the storage of any cable or satellite DVR. TiVo Mega is the solution for the power user who wants to record everything.”

And, apparently, also has the time to watch everything.

Is HBO Planning a Direct Shot on Netflix in the Direct-To-Consumer Video Market?

In most things related to the online video market, Netflix gets most of the attention. It makes sense, they have 36 million U.S. subscribers, got into a high-profile spat with Verizon and Comcast, and are basically seen as the leader in the online video content space. The question has always been, when will they have a more serious competitor?

Well, HBO may be that competitor. That is, HBO could transition to a direct-to-consumer option, that, like Netflix, can be accessed without subscribing to a pay-TV service such as cable or satellite.

The speculation about such a move started with some statements made by Jeff Bewkes, the Chairman and Chief Executive of Time Warner, HBO’s parent company. He was talking about HBO Go, which is available only to those with a pay-TV subscription, and he stated that the over-the-top market was looking more and more attractive. Indeed, HBO already launched in 2012 a direct-to-consumer product (called HBO Nordic) in Denmark, Sweden, Norway and Finland.

Obviously, the U.S. market is much different, but success with HBO Nordic may spur HBO into the direct-to-consumer market in the United States. On one hand, as Jeff Bewkes noted in 2013, there are about 70 million people in the United States that subscribe to a pay-TV service but don’t also subscribe to HBO. There are only about five to 10 million “cord cutters.” So, while HBO may want to focus on the 70 million versus the 10 million, going direct-to-consumer and increasing the available library of over-the-top content may get a number of those 70 million to look more closely at HBO Go. So, stay tuned.



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