While the internet and television industry ever-so-slowly merge, people continue to flock to traditional cable subscriptions even though prices have risen 77% since 1996, roughly twice the rate of inflation. And despite the fact you're paying more, an average of $60 per month in fact, you're probably only watching 13% of what you pay for. So why has the digital revolution brought down prices of every knick-knack available, but hasn't broken tradtional cable? One reason is that channels are available in bundles thanks to an understanding between cable companies and Hollywood producers, making it tough to subscribe to channels you watch individually. Cable companies justify bundles by saying that revenues shared by Hollywood thanks to bundled channels keep cable prices from rising even more. They also say that better image quality, on-demand services and bundled phone and internet packages mean viewers are getting better value for their dollar relative to inflation.
Another reason is that broadband speeds in many cases are not fast enough yet to stream and download video in a timely manner. This is changing fast though, but one problem still remains. Not a whole lot of us like to sit for hours watching video at our uncomfortable computer chairs. We want to see content on our big screens. Although, tons of companies are coming out with set-top boxes that will stream video from your computer to your TV, many of us just don't want the inconvenience of going online to find content, hooking up a middleman set-top and then streaming it to our TV's. It's easier to just push a remote button, sit back, and relax with a cable subscription.
When it really comes down to it, it looks like cable will be around for a long while. Not because the technology isn't there, but because moving web video to our home theater's is so far, just an inconvenient pain in the ass.
You should know the answer to the above question by now, because for the 8th year in a row DIRECTV is number one according to the American Customer Satisfaction Index. It was a close call though as DIRECTV's overall score of 68 only beat the overall cable and satellite industry score of 64 by a small margin. Reflecting customer survey results of perceived quality, value, and expectations prior to subscribing, the number one ranking according to the executive VP of Operations at DIRECTV Mike Palkovic is a direct result of "the hard work and dedication of all DIRECTV employees and customer service representatives".
KMEX-Univision 34, the main TV station of Univision Communications, was the number 1 station in the United States among adults aged 18-49 for the month of April, in any language. Now comes the amazing part. KMEX is actually a Spanish language station! Regularly the number one station in Los Angeles thanks to the cities large Spanish-speaking population, KMEX dominated the entire US in April. And we're talking dominated. The station was number one in all the primetime slots including primetime, total day, early local news, and late local news.
KMEX says that April's numbers from the Nielsen Station Index speak volumes about the Hispanic populations' influence on the media now and in the future.
Rumor has it that Best Buy may be buying Netflix for $44/share! This after Netflix's share price closed up 6% Friday on higher-than-normal trading volume. The infamous Henry Blodget thinks this would make sense given Netflix is number one in the digital download and mail-order subscription businesses. Best Buy could leverage this by selling Netflix subscriptions to those who purchase DVD players or HDTV's, Netflix would reduce its marketing costs, and the two combined would have alot of pull when negotiating partnerships/deals with other companies. Just remember, Blodget is rather famous for making such assumptions. I'll guess we'll have to wait and see.
This past Thursday, the Taiwanese cities of Taipei and Kaohsiung got their first HD digital TV channel thanks to the government-sponsored Public Television Service. HiHD, the new HD channel, is running on a trial basis to promote HDTV in Taiwan and is part of a government-funded US$88 million program to develop a nationwide HDTV network in three separate phases. 63 programs will be available on HiHD at the moment and once the first phase of the network development is completed at the end of 2008, the Taichung metro area will also have HiHD.
Comcast cable subscribers will have access to hundreds of MGM high-def movies via VOD and a linear TV channel. MGM HD has signed an affiliate agreement with Comcast, owner of a 20% stake in MGM, adding to other cable agreements with DirecTV, Verizon Communications, RCN and Massilon Cable TV in Ohio.
Remember that Viacom joint venture we told you about last week? You know, the one which will culminate in a new premium TV channel and VOD service rolled out in the fall of 2009? It looks like Blockbuster will be an additional partner in the JV, exchanging an investment in the business for digital rights to its content. "According to people familiar with the situation", Blockbuster would be an obvious addition to the partnership, which also features MGM, LionsGate, and Viacom's Paramount. Viacom previously owned Blockbuster and its top-level execs know its business well.
Blockbuster has been in the process of digitizing its business as its bricks-and-mortar rental stores have been struggling badly ever since the inception of Netflix. In fact, it's been struggling so badly that one CNET editor predicted an upcoming bankruptcy for the rental franchise. Last year Blockbuster acquired internet movie provider MovieLink in a bid to distribute a greater proportion of its rentals online and has been on a bullheaded run to secure as much exclusive content for the service as possible. Taking in a part in the new venture would bring some high-quality movie content to the service.
So far Blockbuster has been pretty tight-lipped about any involvement. A spokewoman for the company only had this to say: We are busy transforming Blockbuster into a multiplatform provider of convenient access to media entertainment. To that end, we're exploring our options so it's not surprising there are rumors out there. We've heard that line before and from those past experiences we'll predict that what the spokewoman meant to say was: Yes, Blockbuster will invest in the Viacom JV in exchange for exclusive MovieLink content.
You may or may not have heard that Verizon has applied to provide FiOS TV service to all five boroughs of New York City. If approved they would become the first telecommunications provider to do this, and the company jumped one big hurdle yesterday when the New York Department of Information Technology and Telecommunications approved the plan for citywide cable service. Now, come May 20, the plan must be approved by the City's Franchise and Concession Review Committee for final approval.
The agreement, pending final approval, means Verizon will provide fiber-optic cable service to every single residence in New York City. Right now, the majority of New Yorkers only have one provider option, which utilizes a hybrid/coaxial system. With Verizon entering the picture, cable competition will finally be introduced to NYC meaning market forces will finally be applied to service provisions and pricing, instead of the virtual monopoly in effect now. And, according to Verizon, the FiOS TV service provides unparalleled picture quality.
By the end of the year, Verizon has agreed to provide 30% of NYC's homes with FiOS TV availability, with 2014 the targeted completion date. Check out the full press release after the jump for all the details of the agreement...
April has been a killer busy month, and if you haven't been here everyday to catch the latest ins and outs of TV, chances are you're behind. There's probably something you don't know that's costing you money and/or picture quality, and not necessarily in that order. So, as we do at every month-end, we're posting a round-up of every single thing we clued you in on in the last 30 days. Like we said though, it's been a lot, so take a look after the jump...
Rumors has it that trading of both Matsushita and Sanyo shares have been suspended on both the Tokyo and Osaka Stock Exchanges after newspaper Yomiuri Shimbun reported that the two companies are considering a "possible capital and business tie-up". The possible merger is apparently an option Sanyo is considering to turnaround its struggling business, quite apparent after the company was investigated for cooking the books near the end of 2007.
How would this affect the two companies' respective TV businesses? Sanyo could definitely augment the Panasonic HDTV line, bringing its respectable global market share over to Matsushita, who in return would give Sanyo the backing it'll need to turnaround its overall business.
So far the problem right now is to figure out exactly whether this rumor is true or not. Both companies have denied they've ever discussed such a move and trading is set to resume on both Stock Exchanges tomorrow morning.