its not illegal, somewhere there may be a breach of the EULA but there's nothing wrong with paying for the content, and just having access to it
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Have you cancelled your Cable / Satellite TV service?
- Thread starter palmerc2
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its not illegal, somewhere there may be a breach of the EULA but there's nothing wrong with paying for the content, and just having access to it
When we moved last fall, we didn't subscribe to cable/satellite. We use 2 Mohu Leaf's for the bedroom and living room TVs for the OTA content. We receive all of the major networks, except CW. When we first switched to an antenna, I didn't know of all the sub-channels that also some great shows in the way of cooking and classic TV. I LOVE classic TV shows. The sports available OTA satisfies my sports needs. Hubbs doesn't watch much sports.
We also use Hulu and Netflix through an Apple TV. When I had DVR, I always forgot to record shows, so I didn't use it much. In a sense, Hulu is now our DVR, since most of the network shows that we watch are available on it. We also discover new shows through Hulu. I would venture to say that 75% of viewing is done through Hulu.
When Network shows go into reruns this summer, we will probably watch more Netflix. Especially when new seasons of our favorite shows are added: Psych, Merlin, How I Met Your Mother, for example.
We also use Hulu and Netflix through an Apple TV. When I had DVR, I always forgot to record shows, so I didn't use it much. In a sense, Hulu is now our DVR, since most of the network shows that we watch are available on it. We also discover new shows through Hulu. I would venture to say that 75% of viewing is done through Hulu.
When Network shows go into reruns this summer, we will probably watch more Netflix. Especially when new seasons of our favorite shows are added: Psych, Merlin, How I Met Your Mother, for example.
I agree. When you factor in the fact that you aren't paying for cable TV anymore, subscribing to a show here and there is no biggie. It's not like you're paying monthly for the show--you're paying a flat fee and new episodes just show up when they're ready.
Yes, I subscribed to Walking Dead for season 3 on iTunes, but I also wasn't paying Comcast for the privilege of seeing it. I also subscribe to Breaking Bad, but when the show ends after this year, I'm not continuing to pay for it.
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Same deal at our house. When we had cable, we mostly watched NBC and Fox as far as network shows, and the other shows we miss on Hulu we just get on iTunes. And we have discovered a lot of new shows as well just because your focus is on a more refined list of options.
I'm not exaggerating when I say we watch more TV WITHOUT cable than we did with cable. During the week we can hardly keep up. I think for most people the idea of not having cable is scary. It certainly was for me. But once I got over the fact that I had just given all our cable boxes back to Comcast, I really never saw the need to get them back and these days I wonder why I ever even had it in the first place.
This. (minus racing). As soon as there's a way to watch my Hawkeyes lose, I'm cutting the cable. Regarding NFL, I realize you can get the NFL package, but IMO it's not worth $250 to watch Jay Cutler throw bad passes.
I believe with the way streaming content is going, it'll be feasible to soon to catch EVERYTHING online....the cost though -- remains to be seen.
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Ditched the Dish two years ago. We found that the very few shows we had to give up . . . we just don't miss.
My setup: OTA --> HDHR --> EyeTV --> iTunes --> ATV2's. Free Hulu (no subscription) via jailbroken ATV2's. Netflix subscription.
We get all the network shows we want popping up on our Apple TV's automatically (just like a DVR), at OTA quality (1080i or 720p), with the ability to skip commercials. The only recurring cost is the $20/year fee to TV Guide to provide the program guide data to EyeTV. That works out to $1.67/month for DVR service for any shows on the major networks.
We don't watch sports.
Cable shows and how we watch them:
-Daily Show (Comedy Central): Hulu (via XBMC on the jailbroken ATV2's. . . but we could also do it using free Hulu airplay-mirrored from mac to screen.)
-Project Runway (Lifetime): Wife streams it on iPad, Airplays to ATV2.
-Mad Men: purchase on iTunes.
-Breaking Bad
urchase on iTunes.
Any other shows that turn out to be good: typically we just stay a season behind and binge watch them on Netflix. Either streaming, or the disks. (The disks arrive sooner than the streaming option, usually. That's how we watched Homeland.)
Can't recommend it enough!
My setup: OTA --> HDHR --> EyeTV --> iTunes --> ATV2's. Free Hulu (no subscription) via jailbroken ATV2's. Netflix subscription.
We get all the network shows we want popping up on our Apple TV's automatically (just like a DVR), at OTA quality (1080i or 720p), with the ability to skip commercials. The only recurring cost is the $20/year fee to TV Guide to provide the program guide data to EyeTV. That works out to $1.67/month for DVR service for any shows on the major networks.
We don't watch sports.
Cable shows and how we watch them:
-Daily Show (Comedy Central): Hulu (via XBMC on the jailbroken ATV2's. . . but we could also do it using free Hulu airplay-mirrored from mac to screen.)
-Project Runway (Lifetime): Wife streams it on iPad, Airplays to ATV2.
-Mad Men: purchase on iTunes.
-Breaking Bad
urchase on iTunes.Any other shows that turn out to be good: typically we just stay a season behind and binge watch them on Netflix. Either streaming, or the disks. (The disks arrive sooner than the streaming option, usually. That's how we watched Homeland.)
Can't recommend it enough!
On iTunes, most of the time the first episode of a series (the pilot) is free.
Also, AMC puts the first episode of each season of Mad Men on their website to stream for free. So people can watch the first one and see if they will like it enough to either a.) pay for a cable subscription or b.) buy it on iTunes.
Netflix is funding new shows (and some resurrections of old shows, like Arrested Development): http://en.wikipedia.org/wiki/List_of_original_programs_distributed_by_Netflix
Their motto is apparently: "Let's figure out how to become HBO before HBO becomes us."
Perhaps there will be a return to syndication: Star Trek TNG did it that way, not signing with any particular major network, just being run across the country by local stations OTA.
The point: the market will find ways around the problems you are posing. And yeah the ship doesn't turn on a dime, but it's already moving in the direction of all-on-demand viewing. Who knew how important time-shifting a program could be?
The music industry got totally overhauled by single-song purchasing/downloading. Yep, a lot of people either lost their jobs or had to "adapt" to the new landscape.
But it's silly to forecast a world where no one is making good tv shows any more. Human creativity and the desire for entertainment is too strong to get destroyed just because a pricing model is changing. Especially in first-world countries where people have disposable incomes and boredom. There is the demand (the people like you and me, who want to see some stories and are willing to pay for it), and there is the supply (the creatives who make those stories). The infrastructure in-between is getting upgraded/changed now. But at the end of the day, the art will keep coming.
Meh. As long as OTA broadcasts continue, I don't think there is that significant a threat to creativity/new-pilots. The major networks (the ones that broadcast OTA), will continue business as usual: fund new pilots each season, reap revenue through advertising. Perhaps the internet ads will increase
I don't mind that OTA broadcasts come with ads. I fast-forward right through them!
Yes, the value of the OTA ads will go down if no one is watching them. Perhaps the value of the online streaming ads will go up to compensate. Or the price of purchasing individual episode will, driving people back to subscription models like Netflix.
At the end of the day, I wouldn't lose sleep worrying about this kind of thing. I'm just happy I get such a wide variety of entertainment options available to me at such a low cost (the upfront cost of the DVR software: EyeTV, and a small cost for a Netflix subscription).
HobeSoundDarryl
macrumors G5
dgalvan, appreciate the thoughts but your blending the "as is" in to make sense of the dream of al-a-carte. For example, the reason why the first pilot episode can be offered for free is because the existing model more than pays for it, and the profit to even make it in the first place. In this future where the existing model is fully replaced, where does that money come from?
More simply, put yourself in the entrepreneurs shoes who is interested in trying to turn a new idea for a show into an actual show. As is right now, this is fraught with great risk and they are going hard against the odds that the show will actually make it. The vast majority of pilots won't make it. However, there is still all the names in the credits of even one pilot episode that want to be paid in full to do their work. There's still studio space to rent to shoot the show. On location rentals. Equipment rentals. Use good, named actors in hopes of bringing some of their fans (and thus paying up for those names) or use unknowns and hope enough fans show up anyway. Promotional costs to try to drum up enough interest in the show to get the ratings that might get it picked up. And on and on.
Right now "as is", it's a long shot every time. Friends was a long shot. Seinfeld was a long shot. Every single pilot is more likely to fail than succeed.
In this new model, it still has all that cost to produce a pilot. But the revenue stream is only if enough of us decide to buy it. How can we know we want to buy it unless we get to see it- probably a few episodes (it took Seinfeld a whole year+ of episodes to find its audience). So the new model proposition is for the entrepreneur to entirely swallow the bill of probably at least several episodes that they must give away for free in hopes of wooing enough of us to "like" the show to decide to subscribe to it. Why are the entrepreneur's going to take that risk? That's making a long shot a much longer, long shot.
What makes it seem to work now is that the "old" (existing) model still throws off enough ROI that the early cord cutters get the benefit of having access to new shows for cheap or free. The consumers still attached to the old (existing) way are essentially footing the bill for the minority who have found a temporary way around the system.
As soon as the minority becomes the majority, this pool of ROI just burns right up. The incentive to take the longer, long shot risk evaporates. And all this idea of getting a few episodes for free so I can see if I like it or not becomes unjustifiable to those who put up the money for that now... especially if we expect the commercials to go too.
I appreciate that artists want to entertain and consumers want to consume art. But it is the money flows that make that work. Here's some hard realities of the new model:
-it is asking the artists to take on all of the financial risks of creating new programs for potentially several episodes, probably without even the large subsidy of commercial revenues
-this new model is still entirely dependent on the broadband pipes owned by your local cable or phone provider, both of which like their video subscription business revenues "as is" now. In other words, if the masses adapt this "replace my cable bill" model, the owners of the pipes on which the replacement entirely depends will just make up for the revenues through higher broadband rates. We don't see this now because it's only the minority "beating the "outdated" system". But that won't last if the crowd joins in.
-just the commercials revenue alone is equivalent to about $54/month for each household in the U.S. Kill the commercials and that's what we would need to all pay each month to simply replace what the rest of the players in the machine make from the commercials alone. A dream where we pay $8 or $20 per month for commercial-free television significantly takes the fuel out of the machine that delivers us old and new programming.
-etc (there's more, but there's a few good points as food for thought)
Rationalizing that it will all work out is like rationalizing that the music industry would be just fine when Napster went from fringe to mainstream. Sure "we're getting any music we want for free but the music industry is just fine and needs to change to the new financial model to keep up with the times" may be rationalized in such moments but that argument meant significant change if the industry was expected to compete with free. Even a nickel per song at the time was infinitely more expensive than free.
The cord cutter dream is not quite that harsh but still quite a mess. Generally, it is about cutting the cash flows from consumers to the middlemen (who will still be solidly in place since they own the broadband pipes) and the artists by 80%, 90% or more. It usually involves getting rid of all that commercial subsidy revenue too (which is $54/month per U.S. household). Yet, we expect that the Studios can take such a severe hit to their cash flow and just keep on cranking out the new shows we'll want to watch in the future. And we expect the cable industry who controls the pipes on which any new model entirely depends to just roll over and take the losses rather than jack up the broadband to make up the difference in their own revenues. We frame that expectation as their need to "change with the times" and "adapt to a new revenue model" but the revenue model we expect them to adapt to is to give us everything we want commercial free, keep producing existing and future shows at the same quality as now but charge us about 10% to 20% of what we pay now.
I believe we already have solid peeks at this new model. Just visit youtube to see what original programming on little-to-no budget looks like (though some of that is still propped up by some commercial revenue). I believe if the masses switch from about $100 per month to about $10 per month, that cut in the flows of cash must show in quality cuts in new programming. And I have zero faith that the broadband rates would not rise to make up the revenue loss difference for the middlemen (in other words, even if we can subscribe to Netflix & Hulu for- say $16/month), I expect the average broadband at $40 to jump to $140 to replace the loss in revenues of $100 per month in existing model revenue. Netflix & Hulu or similar have no direct path to our homes, so those middlemen are positioned to get theirs either way. Perhaps my intellect is simply not large enough but I see no way around such points. It appears to work now because the disruption is still with the minority (much like free music for all via Napster appeared to work for a while back then). All that changes if the majority tries to cut the cord in this way.
More simply, put yourself in the entrepreneurs shoes who is interested in trying to turn a new idea for a show into an actual show. As is right now, this is fraught with great risk and they are going hard against the odds that the show will actually make it. The vast majority of pilots won't make it. However, there is still all the names in the credits of even one pilot episode that want to be paid in full to do their work. There's still studio space to rent to shoot the show. On location rentals. Equipment rentals. Use good, named actors in hopes of bringing some of their fans (and thus paying up for those names) or use unknowns and hope enough fans show up anyway. Promotional costs to try to drum up enough interest in the show to get the ratings that might get it picked up. And on and on.
Right now "as is", it's a long shot every time. Friends was a long shot. Seinfeld was a long shot. Every single pilot is more likely to fail than succeed.
In this new model, it still has all that cost to produce a pilot. But the revenue stream is only if enough of us decide to buy it. How can we know we want to buy it unless we get to see it- probably a few episodes (it took Seinfeld a whole year+ of episodes to find its audience). So the new model proposition is for the entrepreneur to entirely swallow the bill of probably at least several episodes that they must give away for free in hopes of wooing enough of us to "like" the show to decide to subscribe to it. Why are the entrepreneur's going to take that risk? That's making a long shot a much longer, long shot.
What makes it seem to work now is that the "old" (existing) model still throws off enough ROI that the early cord cutters get the benefit of having access to new shows for cheap or free. The consumers still attached to the old (existing) way are essentially footing the bill for the minority who have found a temporary way around the system.
As soon as the minority becomes the majority, this pool of ROI just burns right up. The incentive to take the longer, long shot risk evaporates. And all this idea of getting a few episodes for free so I can see if I like it or not becomes unjustifiable to those who put up the money for that now... especially if we expect the commercials to go too.
I appreciate that artists want to entertain and consumers want to consume art. But it is the money flows that make that work. Here's some hard realities of the new model:
-it is asking the artists to take on all of the financial risks of creating new programs for potentially several episodes, probably without even the large subsidy of commercial revenues
-this new model is still entirely dependent on the broadband pipes owned by your local cable or phone provider, both of which like their video subscription business revenues "as is" now. In other words, if the masses adapt this "replace my cable bill" model, the owners of the pipes on which the replacement entirely depends will just make up for the revenues through higher broadband rates. We don't see this now because it's only the minority "beating the "outdated" system". But that won't last if the crowd joins in.
-just the commercials revenue alone is equivalent to about $54/month for each household in the U.S. Kill the commercials and that's what we would need to all pay each month to simply replace what the rest of the players in the machine make from the commercials alone. A dream where we pay $8 or $20 per month for commercial-free television significantly takes the fuel out of the machine that delivers us old and new programming.
-etc (there's more, but there's a few good points as food for thought)
Rationalizing that it will all work out is like rationalizing that the music industry would be just fine when Napster went from fringe to mainstream. Sure "we're getting any music we want for free but the music industry is just fine and needs to change to the new financial model to keep up with the times" may be rationalized in such moments but that argument meant significant change if the industry was expected to compete with free. Even a nickel per song at the time was infinitely more expensive than free.
The cord cutter dream is not quite that harsh but still quite a mess. Generally, it is about cutting the cash flows from consumers to the middlemen (who will still be solidly in place since they own the broadband pipes) and the artists by 80%, 90% or more. It usually involves getting rid of all that commercial subsidy revenue too (which is $54/month per U.S. household). Yet, we expect that the Studios can take such a severe hit to their cash flow and just keep on cranking out the new shows we'll want to watch in the future. And we expect the cable industry who controls the pipes on which any new model entirely depends to just roll over and take the losses rather than jack up the broadband to make up the difference in their own revenues. We frame that expectation as their need to "change with the times" and "adapt to a new revenue model" but the revenue model we expect them to adapt to is to give us everything we want commercial free, keep producing existing and future shows at the same quality as now but charge us about 10% to 20% of what we pay now.
I believe we already have solid peeks at this new model. Just visit youtube to see what original programming on little-to-no budget looks like (though some of that is still propped up by some commercial revenue). I believe if the masses switch from about $100 per month to about $10 per month, that cut in the flows of cash must show in quality cuts in new programming. And I have zero faith that the broadband rates would not rise to make up the revenue loss difference for the middlemen (in other words, even if we can subscribe to Netflix & Hulu for- say $16/month), I expect the average broadband at $40 to jump to $140 to replace the loss in revenues of $100 per month in existing model revenue. Netflix & Hulu or similar have no direct path to our homes, so those middlemen are positioned to get theirs either way. Perhaps my intellect is simply not large enough but I see no way around such points. It appears to work now because the disruption is still with the minority (much like free music for all via Napster appeared to work for a while back then). All that changes if the majority tries to cut the cord in this way.
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YOu can easily change your Ireland apple tv to a US apple tv to enjoy US netflix. Did it on both of my black boxes from Canada. Just need to change the DNS and you are set. Google it and you will be in business in a couple of minutes.
You can do it too!
You can cut cable and live a great life! Saving lots of money in the process.
I have Hulu, Netflix streaming, and Amazon Prime (not for the tv but for the shipping while it is still a tax free site).
Only gripe with Apple TV is the lack of an Amazon channel. I have a smart tv in my living room that can serve up all three but I like the Apple TV format better. Also, I can stream from my phone or home server and my Imac with the ATV3. Though on our 2nd TV we have Roku and it is just as amazing without the connections to the Imac.
Someone said you won't hear of new shows? Yes, you will...via social media, news and word of mouth. I don't have HBO but I certainly have heard of Game of Thrones!
So onto the costs
Cable Internet = $51 monthly
VOIP Phone (OOMA) $6 monthly
Hulu $8 monthly
Netflix $8 monthly
Total is $73 monthly (I do not include Amazon Prime costs since I have had it for years prior to the addition of their streaming service)
Setup costs
Roof Antenna for OTA channels = $75
Roku = $99
ATV3 = $99
Ooma unit = $99 (on sale)
Total setup is $372
My old cable, phone, internet bill for BASIC (no premium cable) service was $89 per month when I gave it up in 2004!
Success!
You can cut cable and live a great life! Saving lots of money in the process.
I have Hulu, Netflix streaming, and Amazon Prime (not for the tv but for the shipping while it is still a tax free site).
Only gripe with Apple TV is the lack of an Amazon channel. I have a smart tv in my living room that can serve up all three but I like the Apple TV format better. Also, I can stream from my phone or home server and my Imac with the ATV3. Though on our 2nd TV we have Roku and it is just as amazing without the connections to the Imac.
Someone said you won't hear of new shows? Yes, you will...via social media, news and word of mouth. I don't have HBO but I certainly have heard of Game of Thrones!
So onto the costs
Cable Internet = $51 monthly
VOIP Phone (OOMA) $6 monthly
Hulu $8 monthly
Netflix $8 monthly
Total is $73 monthly (I do not include Amazon Prime costs since I have had it for years prior to the addition of their streaming service)
Setup costs
Roof Antenna for OTA channels = $75
Roku = $99
ATV3 = $99
Ooma unit = $99 (on sale)
Total setup is $372
My old cable, phone, internet bill for BASIC (no premium cable) service was $89 per month when I gave it up in 2004!
Success!
Actually, you're realizing more than $16/month in savings. You aren't renting the equipment from the cable company either.
In this day and age, I wouldn't even lump in the internet charge. I'm going to have internet access. If you wouldn't have as much bandwidth, you might include the excess charge, but basic service isn't something I consider a replacement cost. It's a cost I already had when I cut the cord.
Could you clarify what you're doing with OTA?
We've been using Internet-Only (cable free) television in combination with Netflix and Redbox for 5 year now, but we have no choice but to subscribe to cable and pay for their base television package (which we don't watch), because there's no other way to get internet access at video speeds. As a result, we have to pay about $60/month for ~20mbps Internet access.
What are you doing with OTA? How are you getting internet access?
Thanks.
P. S. Just saw the prior posts - man you guys got good deals. We also pay for a voip phone as part of our cable package, but that ups our cost to $100/month, so it's $40/month for the phone.
We've been using Internet-Only (cable free) television in combination with Netflix and Redbox for 5 year now, but we have no choice but to subscribe to cable and pay for their base television package (which we don't watch), because there's no other way to get internet access at video speeds. As a result, we have to pay about $60/month for ~20mbps Internet access.
What are you doing with OTA? How are you getting internet access?
Thanks.
P. S. Just saw the prior posts - man you guys got good deals. We also pay for a voip phone as part of our cable package, but that ups our cost to $100/month, so it's $40/month for the phone.
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I ditched cable over a year ago. My wife and I watch OTA, stream Netflix, Hulu, and I have MLB.TV. We are also getting rid of Hulu, though, because we can airplay so much free content from apps on our phones.
We do purchase a few iTunes season passes for shows we love per year. We use Handbrake for shows we love and can watch over and over (Curb Your Enthusiasm for us) to get all the seasons on our hard drive for airplay as well.
Also, to save more $ we sometimes rent/purchase from iTunes in SD, unless it's a show or movie that's worth the awesome picture in HD due to the cinematography.
We would gladly rent shows in HD for a one time viewing (which you used to be able to do), but Apple said people would rather own than rent shows a few years ago and took away the option
I've found that there is enough football on network TV for me between Thursday and Monday night that I don't need cable to suit my own needs.
That doesn't leave much out there for the two of us to miss. In fact, I never even think about it.
We watch a lot of live TV and waiting months (or longer in the case of HBO) is just not acceptable to us and the video quality of many web sites is just not good enough. It would be a different equation if, as you said, Apple would still rent TV shows. I don't need to own CSI, I watch it once and then I am done. I do watch SportsCenter often enough that we will stay with DirecTV for the forseeable future.
I too like classic TV shows. Roseanne and reruns of cops though were not worth enough to keep paying $70/month on DirecTV. I cancelled 1.5 years ago and just buy all my shows on iTunes now. I do wait till they are on sale like below $20/season for HD. I never paid for the premium movie channels at $10 per channel, way to expensive for me.
I think we have different definitions of classic shows. I'm referring to the 70's and before. Luckily we have a few OTA channels that air these shows.HobeSoundDarryl:
When you say "new model", it seems like you are talking about one in which we have:
1. on-demand access to shows
2. at zero cost to consumers
3. with no embedded ads from the content providers.
4. and a strong majority (if not 100%) of consumers do this.
If your argument is that that particular model is unsustainable, I completely agree. If there is no revenue stream, obviously there will be no content.
But your "what if" concerns are, in my opinion, not really relevant to the reality that we see unfolding around us. Companies ARE innovating. Pricing models ARE changing. Ads are probably going to be around for the foreseeable future. In other words, that "new model" is simply not going to happen in that way. So I wouldn't worry about it.
I don't think the good quality TV shows are in any more danger today than they were 20 years ago. In fact, if anything, I think we are in a renaissance of quality TV programming, and with additional innovative competitors funding the development of original programming (ex: Netflix), the landscape is getting richer, not poorer.
The same place it comes from now: advertising revenue, ultimately.
The major broadcast networks (ABC/NBC/CBS/CW/FOX etc.) make money by selling on-air ad time. They use that money to purchase some number of episodes from production companies, based on what they think the show's chances are of being successful, based on network executives watching the pilot. They broadcast the show, and watch the ratings. If the ratings are good, then that means advertisers are convinced the prices they are paying for ad time are reasonable, since people are apparently watching the show and seeing their ads. With the advertisers willing to pay, the network's can sustainably afford to purchase more episodes and make a profit, so the show survives. If the ratings are bad, then the show is pulled and replaced with something else.
All this happens, and the end consumer (the person watching the show on his couch) pays $0. The networks have been bringing in new shows via pilots since long before the cable TV paradigm came to dominance, let alone the internet.
This part of the model doesn't change as people cut the cord. When I "cut the cord", I stopped paying Dish Network, and I started watching OTA TV. If EVERYONE quit their cable/satellite companies and started watching OTA, well then we'd be back to the dominant TV watching model of the past 50 years. And that model managed to incentivize interesting new shows, completely independent of the existence of "cable". I see no reason why it won't be sustainable in the future.
Now, you might argue that since I am using DVR software (EyeTV) to record the shows off the air and skip past the commercials, that could convince advertisers they are paying too much for their ad time since fewer people are watching their ads. And yes, that could potentially end up reducing revenues for the networks and hence result in less funds available for interesting shows.
But I don't think that effect has really been born out by the data. People have had the ability to time-shift OTA television and fast-forward through commercials since the advent of the VCR in the 1980's. I remember I used to do it a bunch as a kid. But not enough people did it for it to impact ad revenue, apparently.
Still, you might argue that DVR's are much more convenient than were VCR's; which is true. But the entry bar for using a DVR on OTA is high enough that there is no way 100% of OTA watchers are going to do it. The only real options for DVR OTA are Tivo, which is prohibitively expensive, and DIY options like EyeTV or Windows Media Center, which are more of an effort to setup/maintain than most are willing to invest.
So, I expect that not much about broadcast OTA TV is going to change, and we'll keep getting pilots from the major broadcast networks just as we always have. And there is still the syndication option: the Star Trek TNG being one of the most successful examples of a show being created by a production company, and airing without involvement from a national broadcast network.
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Now, let's forget about OTA and talk cable. Your concern is that the few gems that come out of cable original scripted programming (HBO's shows, AMC's shows, Battlestar Galactica, etc.) could not be afforded if those stations lose the revenue paid by cable subscriber fees. I agree that a new model is needed for that if a majority of current cable subscribers cut the cord. I guess I'm just more optimistic than you are that a sustainable model will indeed be found without us ending up paying more than we would now for Cable TV. That, OR I'm optimistic that cable companies will adapt enough to be able to hold onto their subscribers, so people will decide it's not worth it for them to cut the cord. And those of us who DO think it's worth it will continue to reap the benefits.
And there is enough variety that such a model might be emerging as we speak. Netflix has financed several new TV shows that it is debuting this year. It's only revenue is the user subscription (as far as I know; no commercials). If it is able to turn that revenue into one or two successful new show seasons a year, I'd say that represents a good non-cable (ie: cord-cutting) subscriber-based model that makes them competitive with the likes of HBO or AMC. It doesn't match the 1,2,3,4 "new model" I posted above. It's something we probably wouldn't have thought of a few years ago. HBO is moving heavily in the on-demand streaming direction as well. Maybe it will eventually get to a point where HBO finds that it can afford to sell HBO-only subscriptions without going through a cable TV middleman, like Netflix does now.
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To sum up: I think the reality is that the "new model" you are talking about is simply not going to manifest the way you are talking about. The cable companies and network broadcasters (and local broadcasters) are NOT going to stop including ads. They will still get revenue from companies who want to advertise their wares. They will adapt their services to continue to provide more on-demand programming, and perhaps even have more reasonable pricing strategies via bundling, and this will convince a significant number of subscribers that it's not worth it to cut. And those of us who do cut, will get the benefits we earn by sacrificing some convenience.
When you say "new model", it seems like you are talking about one in which we have:
1. on-demand access to shows
2. at zero cost to consumers
3. with no embedded ads from the content providers.
4. and a strong majority (if not 100%) of consumers do this.
If your argument is that that particular model is unsustainable, I completely agree. If there is no revenue stream, obviously there will be no content.
But your "what if" concerns are, in my opinion, not really relevant to the reality that we see unfolding around us. Companies ARE innovating. Pricing models ARE changing. Ads are probably going to be around for the foreseeable future. In other words, that "new model" is simply not going to happen in that way. So I wouldn't worry about it.
I don't think the good quality TV shows are in any more danger today than they were 20 years ago. In fact, if anything, I think we are in a renaissance of quality TV programming, and with additional innovative competitors funding the development of original programming (ex: Netflix), the landscape is getting richer, not poorer.
The same place it comes from now: advertising revenue, ultimately.
The major broadcast networks (ABC/NBC/CBS/CW/FOX etc.) make money by selling on-air ad time. They use that money to purchase some number of episodes from production companies, based on what they think the show's chances are of being successful, based on network executives watching the pilot. They broadcast the show, and watch the ratings. If the ratings are good, then that means advertisers are convinced the prices they are paying for ad time are reasonable, since people are apparently watching the show and seeing their ads. With the advertisers willing to pay, the network's can sustainably afford to purchase more episodes and make a profit, so the show survives. If the ratings are bad, then the show is pulled and replaced with something else.
All this happens, and the end consumer (the person watching the show on his couch) pays $0. The networks have been bringing in new shows via pilots since long before the cable TV paradigm came to dominance, let alone the internet.
This part of the model doesn't change as people cut the cord. When I "cut the cord", I stopped paying Dish Network, and I started watching OTA TV. If EVERYONE quit their cable/satellite companies and started watching OTA, well then we'd be back to the dominant TV watching model of the past 50 years. And that model managed to incentivize interesting new shows, completely independent of the existence of "cable". I see no reason why it won't be sustainable in the future.
Now, you might argue that since I am using DVR software (EyeTV) to record the shows off the air and skip past the commercials, that could convince advertisers they are paying too much for their ad time since fewer people are watching their ads. And yes, that could potentially end up reducing revenues for the networks and hence result in less funds available for interesting shows.
But I don't think that effect has really been born out by the data. People have had the ability to time-shift OTA television and fast-forward through commercials since the advent of the VCR in the 1980's. I remember I used to do it a bunch as a kid. But not enough people did it for it to impact ad revenue, apparently.
Still, you might argue that DVR's are much more convenient than were VCR's; which is true. But the entry bar for using a DVR on OTA is high enough that there is no way 100% of OTA watchers are going to do it. The only real options for DVR OTA are Tivo, which is prohibitively expensive, and DIY options like EyeTV or Windows Media Center, which are more of an effort to setup/maintain than most are willing to invest.
So, I expect that not much about broadcast OTA TV is going to change, and we'll keep getting pilots from the major broadcast networks just as we always have. And there is still the syndication option: the Star Trek TNG being one of the most successful examples of a show being created by a production company, and airing without involvement from a national broadcast network.
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Now, let's forget about OTA and talk cable. Your concern is that the few gems that come out of cable original scripted programming (HBO's shows, AMC's shows, Battlestar Galactica, etc.) could not be afforded if those stations lose the revenue paid by cable subscriber fees. I agree that a new model is needed for that if a majority of current cable subscribers cut the cord. I guess I'm just more optimistic than you are that a sustainable model will indeed be found without us ending up paying more than we would now for Cable TV. That, OR I'm optimistic that cable companies will adapt enough to be able to hold onto their subscribers, so people will decide it's not worth it for them to cut the cord. And those of us who DO think it's worth it will continue to reap the benefits.
And there is enough variety that such a model might be emerging as we speak. Netflix has financed several new TV shows that it is debuting this year. It's only revenue is the user subscription (as far as I know; no commercials). If it is able to turn that revenue into one or two successful new show seasons a year, I'd say that represents a good non-cable (ie: cord-cutting) subscriber-based model that makes them competitive with the likes of HBO or AMC. It doesn't match the 1,2,3,4 "new model" I posted above. It's something we probably wouldn't have thought of a few years ago. HBO is moving heavily in the on-demand streaming direction as well. Maybe it will eventually get to a point where HBO finds that it can afford to sell HBO-only subscriptions without going through a cable TV middleman, like Netflix does now.
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To sum up: I think the reality is that the "new model" you are talking about is simply not going to manifest the way you are talking about. The cable companies and network broadcasters (and local broadcasters) are NOT going to stop including ads. They will still get revenue from companies who want to advertise their wares. They will adapt their services to continue to provide more on-demand programming, and perhaps even have more reasonable pricing strategies via bundling, and this will convince a significant number of subscribers that it's not worth it to cut. And those of us who do cut, will get the benefits we earn by sacrificing some convenience.
HobeSoundDarryl
macrumors G5
dgalvan, much of what you write there is exactly right. A few observations:
It's not MY "new model" dream. I'm just highlighting the common wants of those who talk about it. THEY want commercial free. THEY want to be rid of "100's of channels they never watch so they can pay for only the channels they want" which kills thousands of commercials they never see, which removes a big bundle of subsidy money from the model. In getting to buy only the channels or shows they want, THEY expect the cost of cable to be much cheaper than it is now. Etc.
My comments about this dream pokes holes in it. For example, kill the commercials and it kills a major source of OPM that helps pay for it all. So you argue that we don't kill the commercials but switch to OTA, but that only covers the "big 4" or 5 local networks, so those wanting more than just the big 4 still need access to favorite channels or shows from the rest.
Kill the "hundreds of channels "i" never watch" kills the commercial subsidies from those channels. The bundle model throws a lot of money from those channels "I" never watch into the Studios that make some of what "I" do watch. Hit their total revenues hard and maybe they can't afford to make what "I" do want to watch.
But let's just swallow all of that mess in the "evolving pricing models" and "the cable/satt and Studios need to evolve with the times" argument. You still ignore a fundamental for ANY "new model" that is not just settling for the "big 4" OTA. That is, if the cable companies own the broadband pipe and the masses shift away to the new, cheap Netflix + Hulu + Other option and cut off the "expensive" cable bill, why does the likes of Comcast, Time Warner, etc choose NOT to make up the difference by raising broadband rates? Everybody who has some spin in how some "new model" will replace the existing one just ignores this issue.
If I'm Comcast and my lucrative TV subscription model starts feeling real pain due to some new replacement model that is entirely dependent on flowing through the same pipe, I up the broadband fees for "heavier users". In other words, take your Cable bill from $100/month to $0 but I'll raise your broadband bill by $100/month to make up the difference.
Where we going to go if they do this? Doesn't the other broadband provider (if one is lucky enough to live in an area with a second choice) also have a TV subscription model? In my area, I do have a second choice: AT&T Uverse. But I would think they would feel the "cut the cord" pain too and do the exact same thing.
Is there any precedence for the top providers of a bandwidth supply to line up at high prices and install tiers and bill for "heavier users". See AT&T, Verizon, etc cell phone plans.
I appreciate your points in full. Please don't twist mine into sounding like I've ever argued it's MY dream and/or "zero cost to consumers", etc. All comments I make about the "dream" is simply reporting what I observe other people saying they want in some new model. And, while you are apparently perfectly happy with the commercials, I don't see many people arguing for that in their dream of a new model. It's almost always al-a-carte, commercial-free, (here) Apple should get it's 30%, "I" want to pay a fraction of what "I" pay now, etc.
It's not MY "new model" dream. I'm just highlighting the common wants of those who talk about it. THEY want commercial free. THEY want to be rid of "100's of channels they never watch so they can pay for only the channels they want" which kills thousands of commercials they never see, which removes a big bundle of subsidy money from the model. In getting to buy only the channels or shows they want, THEY expect the cost of cable to be much cheaper than it is now. Etc.
My comments about this dream pokes holes in it. For example, kill the commercials and it kills a major source of OPM that helps pay for it all. So you argue that we don't kill the commercials but switch to OTA, but that only covers the "big 4" or 5 local networks, so those wanting more than just the big 4 still need access to favorite channels or shows from the rest.
Kill the "hundreds of channels "i" never watch" kills the commercial subsidies from those channels. The bundle model throws a lot of money from those channels "I" never watch into the Studios that make some of what "I" do watch. Hit their total revenues hard and maybe they can't afford to make what "I" do want to watch.
But let's just swallow all of that mess in the "evolving pricing models" and "the cable/satt and Studios need to evolve with the times" argument. You still ignore a fundamental for ANY "new model" that is not just settling for the "big 4" OTA. That is, if the cable companies own the broadband pipe and the masses shift away to the new, cheap Netflix + Hulu + Other option and cut off the "expensive" cable bill, why does the likes of Comcast, Time Warner, etc choose NOT to make up the difference by raising broadband rates? Everybody who has some spin in how some "new model" will replace the existing one just ignores this issue.
If I'm Comcast and my lucrative TV subscription model starts feeling real pain due to some new replacement model that is entirely dependent on flowing through the same pipe, I up the broadband fees for "heavier users". In other words, take your Cable bill from $100/month to $0 but I'll raise your broadband bill by $100/month to make up the difference.
Where we going to go if they do this? Doesn't the other broadband provider (if one is lucky enough to live in an area with a second choice) also have a TV subscription model? In my area, I do have a second choice: AT&T Uverse. But I would think they would feel the "cut the cord" pain too and do the exact same thing.
Is there any precedence for the top providers of a bandwidth supply to line up at high prices and install tiers and bill for "heavier users". See AT&T, Verizon, etc cell phone plans.
I appreciate your points in full. Please don't twist mine into sounding like I've ever argued it's MY dream and/or "zero cost to consumers", etc. All comments I make about the "dream" is simply reporting what I observe other people saying they want in some new model. And, while you are apparently perfectly happy with the commercials, I don't see many people arguing for that in their dream of a new model. It's almost always al-a-carte, commercial-free, (here) Apple should get it's 30%, "I" want to pay a fraction of what "I" pay now, etc.
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Dumped Dish tv in 2006. The service and equipment was fine (much better than Direct tv) but I decided I didn't want to mindlessly watch so much tv. It was a chore to get them to release their aggressive hooks in me. They kept offering reduced cost services and finally got the message when I said that I'd cancel even if it was all free.
Played the OTA route for a few months but lost interest in most of tv. I get the few 'good' shows from various places. No more appointment tv.
So now most of my mindless time is spent on the Internet.
Played the OTA route for a few months but lost interest in most of tv. I get the few 'good' shows from various places. No more appointment tv.
So now most of my mindless time is spent on the Internet.
@HobeSoundDarryl:
I hear ya. I didn't think you were questing after the "new model". I know it was just an assessment of what you observed that other people seemed to be questing after. I know it's THEY, not YOU. (I don't think I said anywhere that the "new model" was something you wanted or desired. But apologies if I somehow implied otherwise.)
I get your point: Killing cable in favor of a la carte options cuts off a revenue source that helps enable the less prominent cable channels to produce new content that some people like. Hence everybody cutting cable will result in less content available in general. I get it.
Personally, I'm fine with that. As part of cutting the cord, my wife and I both realized that we don't need to be watching as much TV as we were before we cut the cord anyway. I like the Daily Show, and I watch it now using Hulu, which has it's own ad-based revenue stream that feeds back to Comedy Central. But if that revenue model isn't sufficient and Comedy Central sinks (highly unlikely IMO, but essentially one of the things you are worried might happen if I understand you correctly). . . Meh. I'll live.
So even though I'm not convinced that the scenario you are worried about will actually happen (ie: there be nothing good on cable TV anymore), I wouldn't be all that broken up if it did. Given that's my opinion, I don't see why I should pay for a service I'm no longer interested in. And if the majority of current cable subscribers come to the same conclusion, then what's the problem? People who cut the cord are basically deciding that the service they are getting is not worth the price they are paying, so they no longer buy that service. If you decide you like the service you get for your money, then keep buying it! That's personal choice.
On the other hand, the cable providers are not taking the cord-cutting lying down. They are adapting in an effort to keep subscribers. Threaten to cancel your cable and you'll likely be transferred to their customer retention department, where someone will offer you a perk or a better deal on your monthly bill. Maybe they do that until the price is low enough that it makes sense for you to keep the cable service. If so, then great! (A macworld article with an anecdote of that happening to one of their editors: "I fought the cord, and the cord won")
Those (like me) for whom cable is no longer worth the price, can stop paying for it and rely on the broadcast networks. And those wanting more can keep paying for cable. Again, no problem.
There's an undertone in what you are saying (perhaps unintentional) that sounds sort of like: "We should keep paying the cable providers because if we stop paying them for things we don't want, they'll get us back in other ways!" or "Pay them for the shows you don't want, or else we won't get all the great shows we love!". In a free market economy, people don't make choices that way. We choose the situation that makes the most sense for us, and the market adjusts, for better or worse. And if the networks and channels are offering their content streaming on their websites, free with ads (as many do now), and that service they are providing meets my needs better than paying for a bundled cable package, then that's what I am going to do. *shrug*
They could certainly try to raise their internet broadband rates like you suggest, but if they try to do that without adding some sort of improvement to the service at the same time (ie: "Your 20 Mbps service cost you $50 this month, but I'm going to charge you $100 for the same service next month."), they are going to be in for some legal troubles. And given the government has generally come out in support of things like net neutrality and consumer protection, I don't think it would be so easy for the cable providers to get away with raising rates (at least no by a factor of $100/month) on an existing service without providing additional benefits. So I'm not too worried about that. They might bump the price by, say $10 and tack on a pseudo-benefit that most people don't use to try and justify it. they might be able to get away with that.
But don't forget they'll have other options to keep their company profitable:
They could adapt: provide shows (WITH ADS) in more of an on-demand format. The more they do this, the less attractive services like Netflix and Hulu are going to look to cable subscribers, and the fewer people are going to want to cut the cord. The cable companies are already doing this now, as you know.
They could cut expenses: If they can't afford to carry a certain channel, maybe they stop offering it. Scale down the TV services they carry, and their costs will go down as well.
Netflix seems to be doing ok without hitching itself to a cable provider. Maybe the new model follows their example: set up an internet streaming service that negotiates with the original content owners for streaming rights, charges a monthly subscription, and even manages to create some new content as well.
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We'll see for ourselves what actually happens. But in general: I'm going to make my household expense decisions based on how I can get the most value for my dollar and for my family's needs/wants. (Not based on one of many possible scenarios that might result 3 or 4 years out.) And cutting the cord allowed me to do that. I have more control over when, where, and how I can watch my entertainment, I spend less time watching ads I'm not interested in, and I'm getting all that while paying less money. I'm not doing anything shady or illegal (no torrents, pirating, etc.). Just using services of various legitimate companies (OTA broadcasters, Netflix, Elgato, SiliconDust, Hulu.)
It would be a challenging prospect to talk people out of getting more for less money. We can't close pandoras box. These changes in the ways people watch Video content are happening one way or another. Some companies will cling to the past and fall into irrelevance, others will adapt and remain relevant, and new startups and opportunists will rise into prominence. As a consumer, I'll go with the lowest bidder that still provides me with satisfactory service.
I hear ya. I didn't think you were questing after the "new model". I know it was just an assessment of what you observed that other people seemed to be questing after. I know it's THEY, not YOU. (I don't think I said anywhere that the "new model" was something you wanted or desired. But apologies if I somehow implied otherwise.)
I get your point: Killing cable in favor of a la carte options cuts off a revenue source that helps enable the less prominent cable channels to produce new content that some people like. Hence everybody cutting cable will result in less content available in general. I get it.
Personally, I'm fine with that. As part of cutting the cord, my wife and I both realized that we don't need to be watching as much TV as we were before we cut the cord anyway. I like the Daily Show, and I watch it now using Hulu, which has it's own ad-based revenue stream that feeds back to Comedy Central. But if that revenue model isn't sufficient and Comedy Central sinks (highly unlikely IMO, but essentially one of the things you are worried might happen if I understand you correctly). . . Meh. I'll live.
So even though I'm not convinced that the scenario you are worried about will actually happen (ie: there be nothing good on cable TV anymore), I wouldn't be all that broken up if it did. Given that's my opinion, I don't see why I should pay for a service I'm no longer interested in. And if the majority of current cable subscribers come to the same conclusion, then what's the problem? People who cut the cord are basically deciding that the service they are getting is not worth the price they are paying, so they no longer buy that service. If you decide you like the service you get for your money, then keep buying it! That's personal choice.
On the other hand, the cable providers are not taking the cord-cutting lying down. They are adapting in an effort to keep subscribers. Threaten to cancel your cable and you'll likely be transferred to their customer retention department, where someone will offer you a perk or a better deal on your monthly bill. Maybe they do that until the price is low enough that it makes sense for you to keep the cable service. If so, then great! (A macworld article with an anecdote of that happening to one of their editors: "I fought the cord, and the cord won")
Those (like me) for whom cable is no longer worth the price, can stop paying for it and rely on the broadcast networks. And those wanting more can keep paying for cable. Again, no problem.
There's an undertone in what you are saying (perhaps unintentional) that sounds sort of like: "We should keep paying the cable providers because if we stop paying them for things we don't want, they'll get us back in other ways!" or "Pay them for the shows you don't want, or else we won't get all the great shows we love!". In a free market economy, people don't make choices that way. We choose the situation that makes the most sense for us, and the market adjusts, for better or worse. And if the networks and channels are offering their content streaming on their websites, free with ads (as many do now), and that service they are providing meets my needs better than paying for a bundled cable package, then that's what I am going to do. *shrug*
They could certainly try to raise their internet broadband rates like you suggest, but if they try to do that without adding some sort of improvement to the service at the same time (ie: "Your 20 Mbps service cost you $50 this month, but I'm going to charge you $100 for the same service next month."), they are going to be in for some legal troubles. And given the government has generally come out in support of things like net neutrality and consumer protection, I don't think it would be so easy for the cable providers to get away with raising rates (at least no by a factor of $100/month) on an existing service without providing additional benefits. So I'm not too worried about that. They might bump the price by, say $10 and tack on a pseudo-benefit that most people don't use to try and justify it. they might be able to get away with that.
But don't forget they'll have other options to keep their company profitable:
They could adapt: provide shows (WITH ADS) in more of an on-demand format. The more they do this, the less attractive services like Netflix and Hulu are going to look to cable subscribers, and the fewer people are going to want to cut the cord. The cable companies are already doing this now, as you know.
They could cut expenses: If they can't afford to carry a certain channel, maybe they stop offering it. Scale down the TV services they carry, and their costs will go down as well.
Netflix seems to be doing ok without hitching itself to a cable provider. Maybe the new model follows their example: set up an internet streaming service that negotiates with the original content owners for streaming rights, charges a monthly subscription, and even manages to create some new content as well.
--------
We'll see for ourselves what actually happens. But in general: I'm going to make my household expense decisions based on how I can get the most value for my dollar and for my family's needs/wants. (Not based on one of many possible scenarios that might result 3 or 4 years out.) And cutting the cord allowed me to do that. I have more control over when, where, and how I can watch my entertainment, I spend less time watching ads I'm not interested in, and I'm getting all that while paying less money. I'm not doing anything shady or illegal (no torrents, pirating, etc.). Just using services of various legitimate companies (OTA broadcasters, Netflix, Elgato, SiliconDust, Hulu.)
It would be a challenging prospect to talk people out of getting more for less money. We can't close pandoras box. These changes in the ways people watch Video content are happening one way or another. Some companies will cling to the past and fall into irrelevance, others will adapt and remain relevant, and new startups and opportunists will rise into prominence. As a consumer, I'll go with the lowest bidder that still provides me with satisfactory service.