Will more competition finally mean better TV?
Instead of a bloody price war between cable operators and phone companies in the TV market, battle lines are now being drawn over who has the most compelling new features.
Digital video recorders, on-demand services, and more recently Web sites such as Hulu.com have taught people that they don't have to be beholden to a TV schedule. But the TV industry is about to be shaken up even more as phone companies and cable operators, which are all vying for your viewing eyeballs, add new features to their services to lure customers.
So what's it mean for you, the consumer? Well, it's not likely to mean lower prices on the services you already buy. Verizon Communications has already started moderately increasing the price of its service bundle for new customers. But what it's likely to mean is that consumers will get a lot more bang for their buck. When it comes to TV, that means a lot more access to the shows and movies you like, when you want to watch them, and on any device you want to view them on. At least that's the promise.
Whether the dream lives up to the expectation is another story. While some of these new services are being rolled out as we speak, some are still being tested and aren't quite fully baked. But at the very least the revolution is quietly under way and TV viewing could be a whole lot different in just a few short years.
"I think what we (Verizon and AT&T) are doing is pressuring the rest of the market to respond," said Shawn Strickland, vice president of Fios product management for Verizon Communications. "So Comcast can't just respond to what we are doing in a single market, but they have to respond to AT&T too and it drives innovation in the entire market."
For years, not much had changed in terms of the TV viewing experience. Programmers would highlight their popular shows and vie for top ratings in Nielsen surveys. And viewers would sit back and enjoy their favorite shows. Aside for some competition from satellite providers, for the most part, the cable industry had enjoyed a near monopoly on the TV market. That is until the phone companies came along with their dreams of marrying Internet technology to the TV.
Who would have thought just a few years ago that it would take the old stodgy phone companies to stir things up in TV? But that is exactly what's happened as AT&T has entered the TV market with its U-verse service and Verizon Communications has taken on cable operators with its Fios service.
In just a few short years, these phone companies have gone from playing catch up to their rival cable providers, to actually leading the industry in terms of innovation with new interactive services that leverage their Internet-based networks.
But the cable industry hasn't sat idly. The major players in the market, namely Comcast and Time Warner Cable, have been upgrading their networks to add more capacity both to their Internet services and to their video services. And they've been forging ahead with new digital video recording features and video on demand content. Now, they are about to take the biggest plunge yet into the uncharted territory of online on-demand access to TV shows and movies.
For consumers these new services will soon offer broader access to more content, on more screens and at times that are convenient for viewers and not TV programmers. And thanks to the wonders of the Internet, consumers will also be able to interact with what they're watching.
More interactivity for viewers
For the phone companies, the future of TV is also about deepening the experience and providing more interactivity for viewers. For Verizon's Fios customers this means being able to discover new shows by checking what is the most popular content being watched in their neighborhood. The company also offers sports and news widgets, and its working on social-networking applications that will integrate TV viewing with Twitter and Facebook.
For AT&T's U-verse customers it means taking a TV event and providing a deeper dive. During the PGA Masters golf and the March Madness NCAA basketball tournaments this spring, AT&T partnered with CBS Sports to provide Web-based applications to coincide with TV viewing (CNET News is owned by CBS.) During basketball games, statistics and scores were added to March Madness fans' online brackets so they could be viewed as the games were unfolding.
And Masters golf fans were able to view multiple video feeds on their TV screens to keep up with action at different points on the course. Viewers could also check the score board online to see how the leaders were shaping up. And this information wasn't just available online or on TV, but using an application for the iPhone, it was also available on mobile devices.
"With this kind of experience viewers start to have more control and a deeper engagement with the content," said Jeff Weber, vice president of video products for AT&T. "This is very clearly for customers who care about these types of events, but it gives them an opportunity to be engaged in a way they couldn't before."
But Weber also acknowledged that viewers were primarily interested in watching these sporting events. And he said there was a fine line between balancing the deeper richer experience with not interfering with the primary activity of TV viewing.
"At the end of the day, the killer application is still watching TV," he said. "So we needed to deliver ESPN with as good a quality or better than the cable companies into the living room. But now that we have done that, we are pushing ahead to make it a much richer experience for the consumer."
Verizon's Strickland said adding interactivity to the TV viewing experience also increases the opportunity for advertisers. And it offers a new way to monetize the TV viewing experience.
"The TV is the best entertainment storefront out there," he said. "People spend an average of six hours a day in front of the TV. And interactivity with that audience provides a lot of opportunity to advertisers."
This aspect of the new television age may or may not appeal to consumers. But the truth is that providing TV service and creating content is expensive. And as more people gravitate toward watching recorded TV shows and skipping advertising or even viewing video on demand content, TV providers and the programmers that create the content need to find ways to make money to augment losses in the traditional business model.
Because the phone companies have built their networks using IP technology, they've been able to push the envelope in terms of interactive features. And in the case of Verizon, its fiber architecture has also given it a considerable amount of bandwidth capacity to push the envelope in terms of on-demand services. As a result, today Verizon is offering more than 100 channels of high-definition content. And it's able to match cable competitors in terms of video on demand services.
Cable upgrades
But the cable companies haven't been sitting on their hands for the past few years. They've been upgrading their networks and innovating too. Comcast already has Docsis 3.0 technology, which greatly increases broadband speeds and network capacity, in at least a dozen markets. Time Warner Cable was one of the first companies to introduce its start-over solution that allows viewers to start a TV show from the beginning if they come into the show late and haven't recorded it.
But the boldest move by the cable companies is about to get off the ground. Leveraging existing relationships with TV programmers, cable is striking deals to put more video content online. The popularity of Web sites such as Hulu.com, which offers mostly broadcast TV shows for free online after they air, along with other free online video programming, has spurred the cable companies into action.
Time Warner Cable has been trialing a service with HBO that allows people in Milwaukee to watch on-demand HBO TV shows and movies on their laptops. And now Comcast and Time Warner, the media conglomerate and former parent company of Time Warner Cable, are working together to test a new authentication system for accessing Turner Broadcasting content from TNT and TBS.
On Wednesday Comcast and Time Warner announced their new plan to provide authentication to securely distribute video online to cable subscribers. The companies highlighted the importance of allowing their viewers to access content, which they've already paid for via a cable subscription, from anywhere, anytime and on any device.
"This a very logical next step in the evolution of TV," said Brian Roberts, CEO of Comcast during a press conference Wednesday in New York. "Comcast alone has had 12 billion on-demand streams. iTunes has had about 6 billion downloads. This is how consumers want to get their content."
Jeff Bewkes, CEO of Time Warner agreed. "Consumers have spoken," he said. Bewkes added that putting video online for viewers to watch anytime they want on any device will greatly expand the audience and actually provide more revenue opportunity for advertisers. He used HBO as a perfect example. He said that when the company decided to add HBO content on demand for free that viewership went up and people were able to follow more shows. He said he is willing to work with any TV provider to make the Time Warner content available elsewhere.
While it's important to give people a choice in where and when they watch something, Bewkes also noted that the most important thing is simply providing access to the content.
"There has been so much focus on broadband," he said. "But don't miss the importance of the video on demand aspect. Whether its over a set top box or broadband, it will have a dramatic increase in audience."
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
Now that we settled that, when will I see it on my iPod touch? Or how about my HD set at home with an OTA antenna?
I'm not paying Comcast $800 a year for programming.
I mostly watch sports, so the current online offerings are basically useless.
But cable still holds superior in raw internet speeds. The only one who can compete with Comcast in the United States on speed is Verizon but their service is still widely unavailable and expensive.
Many other countries (Southeast Asia, much of Europe) have leapfrogged past the U.S. In some places, you are getting 10x speed at the same price that we pay.
U.S. broadband providers are pathetic.
The thing is much of these areas are also smaller or more compact.
The United States by its could take up most of Europe.
Actually some of the countries I'm thinking about have similar population densities as the U.S. One example is Sweden -- their broadband is one of those places that's about 10x ours at the same price. They have basically the same population density.
U.S. broadband providers have no excuse.
Don't you mean "government control of corporations"? Because from where I see it, the communications industry is highly regulated by the government. Also, what about government ownership of the automotive, banking & financial, soon-to-be healthcare, energy, etc.
Look what happens in china with their poorly regulated corporations.
We get poisonous toothpaste and lead filled toys.
Did you seriously just compare the United States regulations to China?
If your government did not have partial ownership of the automotive, banking & financial, soon-to-be healthcare, energy, etc industries, they would have gone under. Are you telling me that the global recession we are undergoing right now is because of government regulation? If you believe that you're not paying attention to your history. The great depression of the 1930s was caused by greedy banks with no regulations. Afterward, the government had no choice but to regulate the greediest portion of the population (bankers) to try and prevent it from happening again. But, no, the greedy bankers found a way around the regulations and caused the current global recession, once again proving that the banking sector absolutely requires regulation or they will suck the life blood out of every other person on the face of the planet. In order to try and prevent the rest of the planet getting sucked down with them, the governments had to take partial ownership and feed them billions of dollars to try and keep them afloat and prevent another "Great Depression", the problem is the greedy bankers took those billions and put them in their pockets in the form of bonuses. How long will people like you see the obvious right in front of their noses before they realize that big business absolutely requires regulations to reign in their greed?
As for the bandwidth problem, it has to do with the area involved, not just the population density. The larger the area the harder it is to get all this highspeed bandwidth distributed to the entire population. I live in Canada, and we are the second largest country in the world behind Russia. We have even worse highspeed bandwidth than the U.S. does. Of course, being such a large country with only the population of New York State we have a hard time getting services to every area. Some areas have a huge population density and other areas have very low density, but the crappy bandwidth is basically a problem from one end of the country to the other.
What kills me is that the cable and phone companies always make large profits no matter what the state of the economy is.
Instead of bundling voip, cable tv, and internet access which is a dying model, they should offer home and mobile internet bundling. Time Warner and Comcast can't match what Verizon and AT&T can offer. If I was Time Warner or Comcast I would be in a rush to buy Sprint and T-Mobile. The major cable companies are going to need a mobile option to compete with AT&T and Verizon. Look for some big mergers in 2010 everything has changed.
They have screwed over everyone I recommended, they literately ripped us off.
So whats the future of television? Crappy productions, and the same show rerun 20x a week.
Don't believe me? look at how many times tbs puts a premiere movie for then.
Saturday, Sunday, Monday morning, Tuesday midnight and so on into the next week until the month is over. Then they run marathons of rerun shows, then they lack original content. Reality television has already passed and left its mark, its no longer the future.
While Video On Demand is nice, they still don't provide VOD premieres.
The shows are always going to be rerun on demand, and the original producers are still going to try to milk them,
Then you will get companies like time warner that no longer want to offer services out of bundle because they spent so much on upgrades that were badly needed.
There is one good thing about the new television though, the customer is behind the drivers seat.
But is that a good thing? What happens when the customer does the work of the programing director?
I already don't watch television, i get it from the net.
So i dont have a need for television services, unless its pbs, no wait i get their content online too. The local PBS station does a horrible job.........
(This also makes me sadly remember the attempt to buy TechTV watchers back in the day, I lost hope that day.)
Seriously, what we need for TV isn't more features. It's a price drop to make it more affordable!
As Bruce Springsteen once wrote "Fifty-Seven channels and nothing on"
Don't be so foolish as to think that our Government bailed out the most egregious examples of monopolies, oligopolies, Cooperate irresponsibility and exploitation because the government was controlling or regulating those companies. Meh, Quite the opposite, Large corporations for eight years under the GOP protection ran rough shot over regulations and practically dismantled citizens protections in every department, SEC, FDA, USDA, EPA, FCC... The regulations that remain in place are there in large part to make it more difficult for new competition to enter the market place. This why comcast ( which is owned by AT&T along with SBC in case you forgot) Can demand ridiculous prices, for inferior products and terrible customer service. Doesn't anybody wonder why only Comcast/AT&T can use the cable system here. The users/consumers have payed for that infrastructure years ago.
If Japan or S.Korea could compete in the U.S. to offer Broadband, Comcast would be as irrelevant as Mopar* inside of two years. There was a reason the government broke up AT&T in the 70's. It's because when Capital hungry Cooperate giants get to big, they Suck. They give you less and charge more, why? >BECAUSE THEY CAN!!! < and because you and people like you let them get away with it. Of coarse they want the Government to bail them out when they FAIL, but don't want interference while they're raping the country. You want better products? Don't call Comcast, call your Senators and Congress persons. I say Break up AT&T again. Free the cable lines and airwaves to small companies. Then you'll see some new products and job growth.
But I must admit my new Cable speeds are nice 100mb down 25mb up. Although I hear MTS is shortly coming with 100mb/100mb DSL service.
The only poor side is we can't stream a lot of TV from the US...
For anyone who read my earlier rant about Canada being so big and having even worse highspeed than the U.S., you can see just how bad they are. The funny thing is how these large companies can convince a population that doesn't know any better that their current speeds are so good. The city we live in has a population of only 500,000, so we only have five over-the-air TV stations, none of which are digital or in HD. The only way we can get HD is to pay the extortion fees for the way overpriced HD services from either cable or phone companies.
You guys in the U.S. have it better than you think you do.
It wasComcast and Time warner cable that did some fancy foot work in swapping territories.
Att uverse is in direct comptition with comcast cable via ip technology.
All free over the air. And there would be twice as many if our government had not SOLD the bandwith to the greedy cell phone companies.
Video On-Demand; reliable high-speed internet; viewing options of where and when I wish to. Never heard of ?em ? and I believe it will be many decades before I do.
But, being a slightly vengeful person, I hope I will eventually get that opportunity ? and a chance to kick ol? Charter Communications in their arrogant behind.
HA! HA! HA! HA! HA! HA! HA! ? Down the drain, you !@#$%^&*().
- by Captain Bebops June 28, 2009 12:12 PM PDT
- Welcome to the United States of Scamerica. The cable, satellite and phone companies behave like they're the descendants of the snake oil salesmen of the Old West. Maybe they are. What happened to genre type program packages? They used to have those. More is not better. It is just a way to scam you into helping their golden goose.
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(34 Comments)I was looking at a Canadian satellite provider site recently and they have genre
packages at $8 a pop and $5 for five or more. There are family, sports, movie, documentary, variety, news, etc, packages. That would work much better for me. My HD DVR costs me $40 a month rental though they say it is $10 but you can't have it unless you have the extended basic $30 package. So if I want basic cable and a couple of premium channels I still can't have the DVR. I believe that is known as three card monty.
I would throw a block party if these companies went bankrupt. They so richly deserve it.