by ·Comments Off on No, a la carte wouldn't devastate TV programming
© Depositphotos.com / rrraum

© Depositphotos.com / rrraum

I don’t know why Laura Martin’s report on a la carte bugged me more than other, similar reports that pop up now and then. Maybe it was because it was so widely repeated, usually without skepticism. The Needham & Co. analyst said last week that unbundling TV programming would kill off all 130 channels, leaving 50 survivors in the “best case”. At worst, 173 TV channels would disappear, leaving seven?

It’s a common trick to argue that if consumers were to spend $X less on a particular business, it will mean the loss of Y thousands of jobs. (It happens all the time when pro sports teams want the public to finance a new stadium.) That job-loss figure is accurate only if you take the narrowest view; some workers in that particular business will indeed get laid off. But that $X doesn’t vanish. Consumers will use that money for something else, maybe to go to the movies, maybe to buy a tablet, maybe to visit more restaurants. Those businesses will need to hire more workers to accommodate increased demand, so any net job loss will be greatly reduced in a broader view.

With a la carte, each TV viewer could pick and choose each channel he wants to buy. The worst-case scenario in unbundling is that a viewer who now pays $60 for 180 channels might have to pay $59 for his 10 favorite channels. In that case, consumers don’t save money to spend somewhere else, but 170 channels will lose plenty of income, so many of them will dry up. Everybody loses.

Here’s why I don’t think unbundling would cause that worst-case scenario:

  • Good businesses set prices rationally. Each channel will estimate demand at different price points, then set their subscription rate to maximize profit or long-term market share.
  • Fewer than a dozen companies control almost all pay-TV programming. They’re used to playing little games during contract negotiations, such as limiting a popular channel’s price increase if the cable system will add its sibling channel for a few cents more. Those new channels, leveraging existing content and production infrastructure, are often spawned at little incremental cost. With unbundling, that popular channel will stand on its own and get the price that its viewers are willing to pay. And those spinoff channels?
  • Plenty of channels would be free. If you haven’t noticed, basic cable pay-TV channels are packed with advertising, averaging about 17 minutes per hour. Now imagine if the Esquire Network (for example) were free, but mixed in its ads were promos for the great shows on USA Network, available for $1.99/month. The combination of advertiser income and cross-promotion for more profitable channels would provide some filler to populate viewers’ guide screens.

As an aside, notice that even in the worst-case scenario, the network companies don’t lose too much cable-company cash. Instead of getting $60 fed through 180 slots, they’ll get $59 through 10 slots. If any unwanted networks fold, that will reduce expenses as well. On a la carte channels, advertisers will see fewer viewers, but they’ll know that they are dedicated viewers. I’ll admit that there’s a fair chance that the networks would lose something; that’s why they’re fighting so hard against a la carte.

Then again, I don’t know why so many people spend so much time on this question. It’s all academic. Instead, over the next few years viewers will simply continue cutting back on pay TV. Cord-cutting will continue to grow, and plenty of remaining pay-TV subscribers will drop channels to save money. Still, the cord-cutters and young cord-nevers will remain a small fraction of total households, and cable companies will still make plenty of profit on those that remain, plus high-speed internet service.

Despite occasional bills introduced by rogue representatives, Congress will not force pay TV to unbundle. The only group likely to benefit from unbundling are viewers hoping to save money. These people don’t contribute to re-election campaigns the way that media corporations do. The corporations who pay for Congress want to maintain the status quo. And they have lots of cash to pay for studies that validate their perspective and drown out anyone who would claim otherwise. I don’t know who paid for Laura Martin’s work, but I’m sure it wasn’t Consumers Union.

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Clear TV pitchmanIn yet another sign of my advancing age or of widespread education failures, I find it really, really odd that a company is selling over-the-air TV antennas through TV commercials. It’s not that ClearTV is doing anything wrong, it just sounds to me like they’re telling viewers they can drink tap water for a fraction of the cost of bottled. It’s so obvious to me that I don’t recognize that some folks might need to be told about it.

On a related note, I’ve been experimenting with Simple.TV. (I got a killer deal on a first-generation unit with a transferrable lifetime guide subscription, all for less than the cost of a lifetime subscription. But I digress.) On the Simple.TV overview page, it says, “Most of us don’t realize it, but broadcast TV is available – free – to more than 90% of the U.S. population. It might seem like a retro way to get TV, but it’s the best kept secret ever.” So you and me, dear reader, we must be part of a minority that already knows that OTA TV is free. I guess we should be proud that we already know the best kept secret ever.

The difference between ClearTV and Simple.TV is the difference between a toaster and a food processor. ClearTV is simple, and Simple.TV is potentially powerful but not simple. ClearTV is just a flat square antenna less than 8 inches wide. That antenna will run you about $28 delivered, or you can order two for about $36. I’ve never tried one, but the site WafflesAtNoon.com reported what I would expect: “The Clear TV antenna does work, but there isn’t anything particularly special about it versus other (cheaper) antennas. It’s simply an antenna, and was not superior to the 20-year old set of rabbit ears we dug out to compare it against.” TV commercials are expensive, so their products need higher profit margins. It sure sounds like the ClearTV is a $2 antenna in a $20 box, but for a lot of viewers, that $2 antenna is all they need.

On the other hand, I can review the Simple.TV receiver, which took some work to set up right. It requires an external USB hard drive and didn’t like the thumb drive that I plugged in at first. Fortunately, I found an old 160 GB external drive, an awkward size that won’t help many computers these days. After restarting the installation process, I wrestled the receiver to the point of being able to watch OTA TV.

Then came the guide problems. Simple.TV’s program guide simply wouldn’t load on my Chrome browser. (Internet Explorer isn’t supported!) No error message, no indication of loading, just a blank page under the Guide tab when I’d click it. After poking around Simple.TV’s FAQs, I saw a note about slow loading of the guide caused by selecting too many channels. I unchecked some of the digital sub-channels that the receiver had found, then the guide worked.

Another Simple.TV guide problem is “To Be Announced”. Not just for obscure channels in the middle of the night. As I type, my local CBS affiliate shows TBA for 1 pm; NBC is TBA at 2. The program after Letterman? TBA. Every other TV listing service knows those shows are The Talk, Days of Our Lives, and Craig Ferguson, respectively. (Update: Simple.TV appears to have solved this problem since it signed up with Gracenote to provide listing data.)

Recording and playback have worked great, but there are far too few viewing clients. Simple.TV’s iOS app is only for iPads, not iPhones, and there’s still no Android support. At least there’s a Simple.TV app for the Roku.

Mind you, this is a year-old, first-generation receiver, so maybe I’m being too hard on Simple.TV. (You can read a much longer review of this particular model on cnet.) This should be the inspiring story of a couple of guys who won an award at the 2012 International CES, followed by a successful Kickstarter campaign. For widespread success, the Simple.TV team needs to get closer to the ease of use of a toaster. Except for streaming TV to the few types of devices that can watch it, I prefer my do-it-yourself Windows Media TV computer. We’ll see whether Simple 2.0 changes any of that.

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View of Fenway Park from the right-field seatsRemember our old friend Aereo, the service that records and streams over-the-air TV programming to local-only subscribers for a small fee? Broadcasters are upset that Aereo is making viewers pay to watch free OTA TV. No, scratch that. Broadcasters are upset that Aereo is providing a way for some people to stop paying broadcasters (through retransmission consent fees) to watch free OTA TV.

As long as Aereo keeps winning in preliminary injunction cases in US District Court cases, it can continue to survive and expand until the matter is decided in a full trial. And then until that trial’s results are appealed and re-appealed to the US Supreme Court. A few weeks ago, broadcasters attempted to shorten that process by requesting that the Supreme Court consider the case this year. That request has brought out a lot of amicus briefs from everyone all the way down the money tree. ASCAP, The Media Institute, the Screen Actors Guild and other Hollywood unions have joined in urging the Supreme Court to slap down Aereo.

This week, the National Football League and Major League Baseball filed their anti-Aereo amicus. As reported in Multichannel News, they wrote, “If copyright holders lose their exclusive retransmission licensing rights and the substantial benefits derived from those rights when they place programming on broadcast stations, those stations will become less attractive mediums for distributing copyrighted content.” And the leagues threatened to move their games to cable TV channels which aren’t available with Aereo.

This is goofy for at least a couple of reasons. The first reason is those sports leagues have already begun moving their games to cable channels. Unless you live in New York or Chicago, when was the last time you saw your local baseball team on OTA TV? Except for a scattered handfull, those games are already gone. The NFL hasn’t done as much yet, but it moved Monday Night Football, a cultural ritual for over 40 years, from OTA to ESPN, and its expanding set of Thursday night games are on the NFL Network. For the second this is goofy, consider who’s watching those games – viewers in their home markets. Viewers who could plug in an OTA antenna and probably watch for free anyway.

(The NFL says it’s concerned that the court case could open the door to out-of-market viewers and thereby undermine its Sunday Ticket subscription service. I had speculated that this was the main worry with nimbleTV’s early offering of New York City local channels to anyone who wanted to pay for them.)

It’s all about the money. If broadcasters get less retransmission cash, then they won’t have as much to offer when it’s time to bid on rights to sporting events. Fewer bidders means a lower contract price for the winner.

Yesterday at a Bloomberg conference in Chicago, Aereo financier Barry Diller summed up the NFL and MLB’s announcement pretty well. He said, “They are just making noise.”

by ·Comments Off on New OTA TV boxes are a little expensive
Second-generation Simple.TV device

Second-generation Simple.TV device

Two small boxes made for recording and streaming over-the-air TV hit the news recently. They both sound interesting, though I’m unconvinced that they’re better than a couple of alternatives.

Simple.TV is now taking pre-orders for its second generation DVR. The newest version includes dual tuners, apps for iOS, Android and Roku, and a “Download to Go” mode for offline TV viewing. You’ve got to provide your own hard drive, and for a remote control you have to use an app on your phone or other mobile device.

If you’ve ever used a DVR, you know that an important benefit is browsing future TV listings and scheduling recordings to watch later. (Simple.TV’s new device will pull its data from TitanTV.com, my favorite source of programming information.) In free service mode, the Simple.TV will only be able to record what’s on now, and it will only be able to stream it across its local network. Subscribers to Simple.TV’s Premier service (about $60/year, $150 lifetime) also get the ability to schedule recordings in advance using a full program guide, plus unlimited global streaming for up to five users.

The Tablo sounds remarkably similar. According to its Indiegogo campaign page, the Tablo device is designed to stream OTA channels to HDTVs and devices, especially tablets. Just like Simple.TV, the Tablo requires you to add your own hard drive and uses an app on your mobile device as its remote control. The Tablo streams globally, just like a subscribed Simple.TV. And the Tablo will require a subscription of about $50/year, according to Engadget’s Tablo review.

Compare those costs to two other alternatives I’ve described here before. First, a Windows Media Center computer costs maybe $200 to put together, and its guide data is free. Side benefits: Also provides access to any video programming available over the internet. Probably plays DVDs and local video files. Also includes full computer, useful for sending email and reading blogs. Drawbacks: Microsoft might stop providing free guide data one of these years. Form factor is often unwieldy, and typically requires more electricity. Adding streaming or even a good remote isn’t that easy.

Second, consider an Aereo subscription, currently $8/month. With no upfront cost, you get the same functionality as the Simple.TV or Tablo. Side benefits: Works even where OTA antenna placement is impractical. No device to plug in or place on a shelf. Includes Bloomberg. Easily streams to lots of device types. Drawbacks: Requires third-party device to stream to most TVs. Only available in certain TV markets. Won’t stream outside of home market. Might not be legal.

That question of Aereo’s legality continues to gather amicus briefs as it heads towards a possible Supreme Court decision. More about all of that in tomorrow’s column. And later, I owe you a review of the Roku 3, which does a lot of things really well.

by ·Comments Off on How did nimbleTV add OTA sub-channels?

nimblesub2When it comes to online TV viewing, Aereo and FilmOn get all the headlines, partly because they also get all the lawsuits. Our old friend nimbleTV, on the other hand, stays supremely quiet, content for now with its single programming point of presence and its unusual relationship with Dish Network.

So I found it remarkable today when nimbleTV added over-the-air digital subchannels from New York City to my package. (Remember that I only get NYC locals because I have a NYC mailing address.) Normally, I receive the NYC locals exactly as Dish delivers them; for example, when Dish upgraded WNYE from SD to HD, so did nimbleTV’s version.

We still don’t know exactly how nimbleTV retransmits its Dish channels to its subscribers. My best guess is that nimbleTV records every program from every channel it receives, then streams a copy of that to every subscriber who requests it. If that’s true, and if Dish and nimbleTV have an agreement for such virtual Dish subscribers, that all makes sense.

So how can nimbleTV add these extra OTA sub-channels that it can’t get from Dish? Well, I know that nimbleTV’s offices are on a 12th floor in Manhattan, and when I was in a hotel room about that high, I could pick up those same sub-channels with a simple OTA antenna. (What, don’t you pack one?) In the absence of any direct knowledge, my guess would be that nimbleTV has hooked its own OTA antennas into its content retransmitter. For the reason why, I’d guess that after watching Aereo and FilmOn connect their subscribers to NYC OTA antenna banks, nimbleTV figured that it was fair game.

As we teeter on this potentially unstable pile of guesses and theories, let’s try to add just one more. If all that I supposed happened to be true, then local broadcasters would probably pounce on nimbleTV because, according to these guesses, each nimbleTV subscriber probably isn’t directly connected to an OTA antenna Aereo-style. So that means that I’m probably wrong about this logic problem somewhere along the way, but at least I showed my work.

Mind you, I do enjoy these OTA sub-channels, although they might not be available to me for long. A worker there told me that nimbleTV was just “running a test with our platform”. But as I type, those channels are still there. Update: Between the time I posted this and when I tweeted its link, the sub-channels were gone again. Let’s see whether they return.