Friday, July 26, 2013

The Globe and the New Media: Web Killing Cable

Well, you and I are here and the set is off.

"Many households cutting cable, but not their favorite TV shows" by Michael B. Farrell |  Globe Staff, May 16, 2013

They often like to watch their favorite shows on their laptops, and when they do turn to the TV, they bypass their cable provider, Comcast, and watch video over a Web-streaming device from Roku....

The McElhennys are among a growing number of American families who are increasingly using Internet-based services to watch their favorites when they want and where they want, and in the process reducing or bypassing cable or satellite television.

That might be a good thing. 

See: Is Your TV Watching You?

Of course, government is also logging all your other communications, kids.

Though enabled by a more robust Internet and sophisticated mobile devices, the driving force behind this shift is as much cultural as it is technological: Consumers such as the McElhennys are balking at the complicated packages offered by their cable or satellite providers and at paying for channels they don’t watch or services they don’t need, and now finally have more convenient and less expensive options.

“Consumers now have more control over their viewing habits than ever before,” said Mike McGuire, an analyst at technology research firm Gartner Inc.

Services such as Hulu, Netflix, Apple’s iTunes, and YouTube allow consumers to essentially narrowcast their own entertainment channels, often paying less in the process.

“We are starting to see the great unbundling of the pay TV business,” McGuire said....

Just this week another new option debuted in Boston. Aereo Inc. is rolling out its service that allows consumers to watch broadcast television shows on tablets, smartphones, and computers, for $8 a month. The Aereo service is only for shows broadcast “over the airwaves,” such as “American Idol” or “Modern Family,” not for those delivered solely by cable or satellite, such as “Mad Men.”

Related: Fox News Channel No Longer Free on Cable 

I'm sorry, readers, but I haven't been keeping up or watching what happens with Aereo.

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When Alley Stoetzel, 27, recently moved into her Newton apartment she opted not to get a television at all, and instead watches “The Colbert Report” and “The Walking Dead” and other shows on her MacBook.

“I just found that I didn’t really want one,” Stoetzel said. “I bought a toaster instead.”

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To be sure, viewers such as Stoetzel are still in a minority, but the upstart Web-only companies insist their services have a major advantage over the big legacy providers: They’re much easier to understand and buy, compared with elaborate bundles offered by cable or satellite providers that can include terms that make it difficult to switch or drop.

“Consumers want simple. They don’t want to deal with too many rules and restrictions,” said Chet Kanojia, chief executive of Aereo.

That's why they are going to hate Obamacare even more.

The implications of these trends are huge for both broadcasters and service providers, and the established players in the video entertainment industry are facing a fundamental shift to their business model much as the music industry did more than a decade ago.

In the case of Aereo, for example, the service is encountering opposition from broadcasters. It is being sued on the grounds it is taking their content without paying.

Meanwhile consumers’ pent-up frustrations over their cable or satellite service has surfaced in Congress, where Senator John McCain of Arizona this week testified on his plan to let consumers buy service on a per channel, or a la carte, basis. McCain said one reason for his bill, which he calls the Television Consumer Freedom Act, was the rising cost of cable....

That's what happens when near-monopolies form.

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