As cable rates rise, networks and cable companies are getting into what amount to blackout wars. Like AMC and Dish, Cablevision and the Tribune Co., and, well, crap, name it: Every market has been experiencing channel blackouts, annoying customers and causing problems.
Now Sony is coming to the channels with an offer. Namely, screw over the networks and use them to just stream to customers directly via a new service. Don’t forget, Intel is also plotting to screw cable companies. Oh, 2013 is going to be fun.
Very little is known about Sony’s backroom deals. What we do know is that it’s a fairly serious one, coming from a company heavily invested in video streaming, unlike relative newbies like Intel. Although right now buying just the channels you want are by the boards.
Few specifics are known about the proposed service, but it would be a package of linear channels akin to what pay-TV distributors traditionally provide, only delivered via broadband connection. In contrast to the cable operators who are bound by a geographic footprint, a virtual MSO can conceivably offer TV service to any subscriber nationwide.
This is attention-getting for reasons well beyond just maybe being able to dump your cable for good. Sony has a fairly large install base of customers for the PlayStation 3, and it’s the worst kept secret in the gaming industry that the PlayStation 4 will be arriving late next year… right around the time Sony is expected to announce this massive streaming deal.
It’s particularly tempting for channels because Sony already has plenty of streaming infrastructure. They’ve been fighting Microsoft to have the most streaming content, and Microsoft has been getting cozy with the cable companies. Hey, there’s just something about an enormous, crumbling monopoly that appeals to Microsoft, what can they say.
Who knows what will come with it, but channels are starting to realize they may have more options than cable providers. How the cable providers will react is anyone’s guess, but we’re guessing this won’t be an easy transition.
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I spent a dozen years in the cable business, generally working to overcome competitive threats with rate strategies. Here’s “how the cable providers will react” to this: they will raise the price of broadband, particularly at the high-usage level, to the point where you lose money streaming.
And if you take that deal, the cable operators may actually be more profitable, because they pay the various network owners for programming, and those costs go away if you only buy broadband. Until broadband is a competitive market, the cable operators still win.
Sorry, but (to quote the great Sarah Bird): “It is what it is, it ain’t what it ain’t. Now give me your money.”
This. Dammit.
But there are broadband options other than cable. Would the cable companies really jack up their prices that high when DSL and fiber companies stand to reap a windfall of consumers unwilling to pay those suddenly-spiking cable prices?
@JJ: The broadband component is mostly the same price, at least where the incumbent phone company is the competitor to the cable operator. Where I live, for example, the only alternative to Comcast is CenturyLink, which is actually more expensive for the same services. Both cable and phone companies have huge unbreakable infrastructure, like wire and unions and trucks.
The other thing is inertia: a lot of people don’t want to switch over to a system that requires new technology, new equipment, etc.
Until there’s a true wireless-type solution that doesn’t require legacy wiring to the home (like phone or cable), there won’t be a price war.
So this won’t work until we all have google fiber? Maybe we should just move to St Louis (or where ever the hell those 10 lucky bastards live)
1) Right, or something like it like WiMax or 10G or whatever the phone companies are holding back from us like the sweet sweet drug we crave.
2) And it’s Kansas CIty. Having lived three long-ass years in St. Louis, I can tell you that there’s no reason to live there, ever.
Don’t forget whitespace broadband! Tasty, tasty wireless signals from TV towers already in place, owned by people who would dearly love to screw the cable company! That’ll be entertaining.