GigaOM » cable companies

Happy birthday, Cord Cutters!

Janko Roettgers — Wed, 19 Oct 2011 21:44:45 +0000

Wednesday marks a very special birthday for us over here at GigaOM’s NewTeeVee: It’s been exactly a year since we published the first episode of Cord Cutters, our web series about watching TV in new and interesting ways that don’t require a traditional pay-TV subscription. Since then, we’ve published a total of 36 episodes, held a nationwide meet-up and grown our presence on Twitter and Facebook. Most importantly, we’ve learned a whole lot about how countless viewers reinvent the way they watch television every day.

Here’s our very first episode of Cord Cutters, published on Oct. 19, 2010:

Hey, you, how do you watch TV?

NewTeeVee has covered the future of video since late 2006. We often focus on the business aspects of reinventing television, simply because the story behind the ascent of companies like Netflix and Hulu — and their recent struggles — is fascinating.

Of course, we’ve also paid attention to the consumer side all along, covering new devices like the Roku, the Apple TV and the Boxee that bring online video content to the TV screen. However, we didn’t want to become yet another gadget blog. Instead, we wanted to get a sense of how people were actually using these devices and what difference they were making in their everyday lives.

We briefly contemplated visiting people at their homes and taking tons of photos of their setups. But then we realized that it isn’t just about the boxes you stack under your TV and the cables you use to connect them — even though, for geeks like us, that can be a lot of fun as well.

No, there is something more fundamental going on, something that’s at least as disruptive as the introduction of the DVR in 1999. With online video maturing from cat videos to long-form content, people are watching TV on their own terms, liberating themselves from not only the schedule but also a single category of devices and finally from a bunch of previously pretty much mandatory services. Some people watch whole movies on the iPad, others stream Hulu content to the Xbox, while others again rediscover over-the air-television as the best HD signal there is.

We’re a nation of cord cutters

A big part of this has been cord cutting, as the act of giving up your traditional pay-TV subscription is now known. The economic crisis has forced many of us to take another look at monthly expenses, and pay-TV providers are starting to feel the consequences. Pay-TV subscriptions were down for the first time ever in two quarters of 2010. There was a slight rebound earlier this year, but things aren’t looking too good for the rest of the year. Some predict that nine million households won’t have cable by 2016.

We decided to devote a whole show to this trend not because we hate cable companies (even though everyone else seems to) or because we don’t think that the traditional $100 a month cable bundle is a very good deal for consumers (which it isn’t).

We did it because we noticed that those cord cutters were the very people who were at the forefront of reinventing television. They are the folks in the trenches who take their TV viewing back into their own hands and experiment until they find a solution that works best for them — and not the one-size-fits all approach that’s still at the core of pay TV.

And there was something else we quickly noticed: Cord cutters are everywhere, including at GigaOM. Check out this video we did late last year with a number of our employees:

Here’s to the alpha geeks

Granted, not everyone is ready to cut the cord and give up on cable or other forms of pay TV. Most households probably never will be — and working on Cord Cutters has given us a lot of invaluable feedback on why people stick with Comcast or U-verse. Sports is still a big reason; falling in love with a certain show or network that isn’t available online is yet another.

However, cord cutting still matters. Not only financially, as pay-TV providers see their slim growth margins breaking away, but also to innovation in this industry. Tim O’Reilly has long been talking about the alpha geeks – the people who impact our collective future by inventing and crash-testing it today. Cord cutters are the TV world’s alpha geeks. Watch them watch TV and you’ll get a sense of where all of our TV consumption is going.

Unfortunately, there’s a bit of a misconception, leading many people to believe that alpha geeks all work at some hot Silicon Valley startups. It’s true that folks in tech seem to be the most vocal about cord cutting and many other tech trends. But if you look at the history of technology, it’s more often than not folks outside the Valley that got the ball rolling.

Minorities, not startup CEOs, were the first to embrace cell phones in the U.S. Teenagers in Europe were getting blisters from texting long before mobile messaging became fashionable stateside. And farmers in rural Kenya have done mobile commerce long before you and I even heard about Google Wallet.

It’s not about geeks vs. have-nots

Why does this matter? Because with cord cutting, some industry insiders want to differentiate between the tech-savvy and the economically depressed, arguing that most people simply give up on pay TV when things are tough, only to sign up again once the economy recovers.

But at least judging by the feedback we’ve gotten from people of all ages and backgrounds who watch Cord Cutters, this couldn’t be further from the truth. Cord cutters are general contractors, priests, politicians, retirees, teachers, students, liberals, conservatives and libertarians — and they’re all united by a desire to watch TV differently.

Helping our viewers to make that happen — and learn a whole lot about the future of TV in the process — has been the most satisfying part of producing Cord Cutters. We can’t wait to see what’s next.

Visit the show page to browse our entire archive.

We would like to hear from you: What do you want to see on future episodes of Cord Cutters? What else should we do, or what should e do differently? Do you want more product demos, more tips and tricks, or more meet-ups? Let us know in the comments!

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Exclusive: Simulmedia Raises $9M for TV Ad Platform

Ryan Lawler — Wed, 11 May 2011 23:24:51 +0000

Media marketing firm Simulmedia has closed a $9.25 million round of financing from existing investors, GigaOM has confirmed. The financing comes as Simulmedia, which was founded by ad veteran Dave Morgan, ramps up operations and moves from working on primarily experimental pilot programs to full-blown TV ad campaigns.

Simulmedia basically applies Internet-style targeting to traditional TV, telling programmers and their agencies when they should run promos for shows. The company’s proprietary technology platform gathers anonymous data from set-top boxes and combines that with its own algorithms to predict which viewers are most likely to tune in to TV shows and to target ads to them.

During the promotional run-up to the premiere of the new Hawaii 5-0 series, for instance, CBS’s ad agency used the platform to identify likely viewers for the show. Simulmedia searched for viewers who liked programming similar to Hawaii 5-0, were available to watch the show during the Monday 10 p.m. time slot and weren’t terribly loyal to competing shows on other networks. Once it established the target audience, it then worked to make sure CBS’ agency could find ad inventory to reach those viewers.

Simulmedia was founded by serial entrepreneur Morgan, who also founded Tacoda (which was bought by AOL in 2007) and Real Media. In a phone interview, Morgan said the new money will be used to build out Simulmedia’s data platform and targeting engine, while also investing a bit in its sales organization. The company currently has about 35 employees, but it doesn’t expect to ramp up hiring substantially.

“We will add to the team, but it won’t be a major ramp up. The beauty of a data-driven business is that the power is in the platform, and that’s where the scale comes from,” Morgan said. “In TV advertising, the per-deal side is large, and it doesn’t require as many bodies to scale as the Internet ad business.”

The funding also comes as Simulmedia is beginning to prove out the value provided by his platform. According to Morgan, the company had worked on about 10 campaigns last spring, but has probably done about 65 campaigns since then. The number of clients it works with has also increased from just three a year ago to more than 20 today, Morgan said.

Simulmedia has now raised more than $20 million, which includes an $8 million Series B round led by Time Warner Investments that was announced last April. Existing investors also include Avalon Ventures and Union Square Ventures.

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Vid-Biz: Net Neutrality, MySpace Music Video App, Cable iPad Apps

Ryan Lawler — Fri, 13 Aug 2010 22:00:46 +0000

Net Neutrality Divides Media Companies; most media companies have stayed mute on the subject of net neutrality, but media mogul Barry Diller called the Google-Verizon proposal a sham. (NY Times)

MySpace Launches Romeo Music Video App; the app allows users to choose from 15 music genres such as pop or hip-hop, and 13 moods including “chill” and “studying.” (WebProNews)

Cable Firms Look to Tablet Computers; at least seven of the ten largest subscription-TV providers in the U.S. are building new tablet-computer apps that offer select TV shows and movies. (Wall Street Journal)

Hollywood: Open Net Can’t Be Pirate Haven; Hollywood studios told the FCC Thursday that reclassifiying broadband access is not necessary to achieve an open Internet, and is not a desirable method of achieving that public policy goal. (Multichannel News)

How Is 3D TV Doing? Some Data From Japan; in Japan, prices for 3D TVs offered by the two most aggressive manufacturers, Panasonic and Sony, have fallen 20% and more since they were introduced back in spring this year. (CrunchGear)

Verizon and AT&T Ban BitTorrent On Wireless Networks; BitTorrent and other types of evil traffic have already been banned for years by Verizon, AT&T and others. (TorrentFreak)

Cable Subs See Low Value For Their Money

Ryan Lawler — Mon, 01 Feb 2010 22:08:09 +0000

Cable providers could find customers defecting for other services, or possibly even cutting the cord if they don’t find ways to provide more value to their subscribers, according to a new survey from Strategy Analytics. As many as two-thirds of cable subscribers said they would switch providers if they could find cheaper services elsewhere, which could be bad news for Comcast, Time Warner Cable, Cablevision and others.

At the heart of customer dissatisfaction is the fact that most don’t believe they are getting a lot of value for the money they spend on cable. According to Strategy Analytics, less than 22 percent of pay TV subscribers said their service exceeded or greatly exceeded their expectations of value for money. With the growth of online video services like Hulu and Netflix, Ben Piper, director of the Strategy Analytics Multiplay Market Dynamics service (MMD), sayd cable subscribers see less value in paying for traditional cable subscriptions.

According to the survey, more than two-thirds of cable subscribers stated they would switch providers if offered a 20 percent discount over their existing pay TV bills. IPTV providers fared better, with half as many saying they would churn if offered a lower-priced service. That is consistent with other findings of the survey; for instance, customer satisfaction among telco and IPTV customers was about 95 percent, compared to 67 percent for cable.

Cable companies have made some advancements in the customer service portion of the survey; last year, in a similar survey, customer service was the weak component for cable providers. However, cable providers are now falling behind in articulating added value on the innovation front when compared to satellite and IPTV providers.

While the study asked specifically if pay TV customers would consider switching providers, Piper sayd that dissatisfaction among cable subscribers could also lead to cord cutting, if they continued to show dissatisfaction with the services their service providers offered.

There is some hope for cable companies, however; particularly if they have managed to get their customers to sign up for bundled services. Customers that had signed up for bundles were much more likely to be satisfied with the services that they were being offered, and 19 percent less likely to leave their cable company if an alternative service provider offered similar services at a 10 percent discount.

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TiVo Blames Big Cable for Blocking Set-Top Innovation

Ryan Lawler — Thu, 24 Dec 2009 00:30:49 +0000

TiVo, in response to an FCC request for comment on “video device innovation” yesterday, pointed to abuse by cable companies that put their own business considerations ahead of the best interests of consumers, and in so doing, have stifled creativity in the digital device realm. (A hearty hat tip to Dave Zatz for bringing the response to our attention.)

It’s easy to see why TiVo might be bitter at the cable industry. After all, with the launch of its first DVR, the company introduced a revolutionary technology that cable companies copied, co-opted, and used to create a whole new revenue stream for themselves. And now, TiVo says, those same companies are leveraging control of their networks to block it and others from innovating on that technology.

The response, attributed to Matthew Zinn, TiVo senior vice president and general counsel, claims that “innovators like TiVo…are put at risk” by cable companies that ultimately control the design and functionality of devices that compete with their own set-top boxes and DVRs. Because cable companies can disallow certain features from working with their conditional access networks, TiVo says many features that it would like to implement are either barred by cable companies, work inconsistently across different networks, or are “subject to being disabled or made less useful by MPVDs [Multichannel Video Programming Distributors -- in English, cable companies] at any time.”

At the top of the list for innovations blocked by MVPDs is the ability for TiVo and others to show Internet video and interactive applications alongside traditional cable programming. TiVo would like to incorporate interactive content into a unified user interface, but says that “tru2way products are forbidden by license from (1) providing any choice in user interface when accessing interactive services, and (2) including non-MVPD programming services, such as Internet-delivered content, in the user interface that displays the available cable programming.” As a result, TiVo says, consumers don’t have access to all the content that’s available to them, because gaining access to that content would interfere with traditional cable business models.

By blocking access to interactive applications in the user interface, TiVo says cable companies are not just protecting their pay TV business, but also limiting the ability of it and other device manufacturers to compete with leased DVR offerings. “The cable industry obviously knows that, when faced with the choice of buying or leasing a set-top box that performs exactly the same functions, in the same way, with the same user interface, consumers will opt to lease set-top boxes,” TiVo said. But by not having access to all of a cable company’s content in addition to other sources, TiVo says device makers can’t create a competitive product that people will buy instead of lease.

TiVo may have a point; after all, the company has been hemorrhaging subscribers over the last several quarters, as more consumers take to leasing DVRs from their incumbent cable providers. Without a way to provide a more compelling product or service to consumers, it’s unlikely that trend will be reversed anytime soon.

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Memo to Cable Cos: Cord Cutters Aren’t The Issue

Michael Wolf — Mon, 18 May 2009 20:00:22 +0000

It seems the press has caught cord-cutter fever. Reading a recent Washington Post piece, you’d think we’ve entered some sort of Pay-TV apocalypse in which robots battle hipster armies who consume all their video entertainment on Macs, at least when they’re not making music videos. Others are more skeptical, estimating that only a tiny fraction of users have actually canceled their pay TV services. Regardless of who’s right, cord cutting is a red herring.

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As TV Comes Online, Can Content Providers Sell ‘Premium’?

Liz Gannes — Wed, 13 May 2009 14:00:25 +0000

2009 is not shaping up to be a golden year for media. But with business models in flux, the timing may just be right for unconventional thinking about the future of entertainment distribution. As providers’ business interests and consumers’ consumption interests come into alignment over the next year, I think we’re headed toward a resurgence for paid video on the Internet.

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Vid-Biz: GRP, Metranome, Cable Cos

Chris Albrecht — Tue, 07 Apr 2009 16:43:46 +0000

Mindshare Pushes Gross Ratings Point Standard for Web Video; developed with YuMe, the metric allows ad buyers to more directly compare effectiveness of TV and and broadband buys. (Ad Age)

Metranome Launches White Label Product for Mobile Video; Poptiq Powered lets content owners create applications around their brands; 60Frames and DadLabs have signed on. (release)

Cable Companies Working on New Content Delivery Methods; would allow for easier transport of video beyond the TV to other devices in the house and could turn your cable system into a mini on-demand video Internet. (Bits Blog)

Hallmark Channel, USC Teaming Up For Lifestage Study; research will look at how content and media devices are used as people move from one stage of their lives to the next (i.e. from student to worker, from single to married, etc.). (Multichannel News)

Behind the Scenes at a Netflix Distribution Center; a neat photo gallery showing how all those red envelopes get stuffed and sent out to you. (Boston.com)

FUNimation to Stream Toei Anime Online; subtitled versions of classic cartoons such as Fist of the North Star and Captain Harlock to appear on the site. (Variety)

VLC Looking for Mac OS X Developers; popular open-source media player project suffering from a lack of active Mac programmers; those interested should get in touch with the team. (OStatic)

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