Sorry for being late in posting this. Long couple of days.
Anyway it was a big week in the changing video services landscape. The least impactful is the announcement that our friends at Aereo have filed to becoma a Pay-TV operator. If you remember, Aereo’s model was denied by the courts. The intent of the model was low cost delivery of Over The Air (OTA) services via the Internet. You may not be clear on this but ABC, NBC, and CBS still represent the largest part of the viewing audience. We shall see what becomes of Aereo.
Bigger news were the announcements by both HBO and CBS that they were entering the direct Over The Top (OTT) video service. In the long term we may see this as the beginning of the end for the current Pay-TV model. I have not signed up for these services yet and there is more information available about the CBS offering. The CBS is going to be $6 a month, while HBO is going to be $15 a month.
The big thing that people wonder about is sports. All 4 major US sports (NFL, NBA, MLB, and NHL) have a package that allows video streaming of games. The MLB and NHL packages have viewing restrictions around teams in the local market. But I think that even in some areas, that might be filled in with other services. The NFL is the most expensive of the packages at $330 per year – the rest are between $100 and $150 per year.
So, I think there is still work to be done on the pricing and models but it is now reasonable that most anyone could start considering cord cutting. You could get Netflix + HBO + CBS + Hulu Plus would cost a total of $37 per month. If you added all 4 sports packages, you would add about 60 bucks a month. That package seems extreme, but you can see that you are on the same order of content that you get from cable. All of this assumes that specific usage of competing services like Amazon Prime, Apple iTunes, or Sony Entertainment won’t provide better value.
Moving to opinion mode, this means that you need to keep your eyes open. We are now clearly entering a phase of disruption. More and more services are going to be tried. Some will fly and some will fail. As a consumer, keep your options open. Don’t get locked into a long term contract on a set of failing services. So, your eyes open. Do not assume you will recognize the winners. They are all obvious in hindsight, but not so at the time.
Have a great weekend!
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