Friday, October 17, 2014

The Pitfalls Of Internet TV

Although I've long been a advocate for à la carte pricing for cable TV I'm no huge fan of "internet TV". This scheme leaves out nearly 10 million Americans unable to stream video because they still use dial-up for the internet. More then 38 million more in the U.S. aren't directly plugged to the internet.

The Costs
The prices range from $5.99 to $9.00 a month for the service. Equipment cost varies from free (if app built into TV) to $50. Some charge separately for additional programs/movies not included. Several still contain advertising (which you cannot skip by fast forwarding past them)..

I also highly doubt internet providers will not respond by charging someone more when they start eating up an endless amount of bandwidth each month. Many (if not most) providers have a cap on monthly usage. Many of us use a bundled cable TV package. By unbundling my TV service my internet & phone costs would rise at minimum $25.

Each service provides different content so most likely a subscriber would want more then one of these services. Let's take for example someone selecting 3 of these services. Assuming one of these apps were built into the TV, equipment for the others would cost about $50+. Monthly cable internet/phone would then cost about $25 more. And of course the $20+ for these subscriptions. Throw in a couple of pay-per-views not included and it wouldn't be inconceivable to easily spend $55 a month. That's about what I'm paying now for 118 TV channels + 51 music channels. So too, anyone planning to watch them on their mobile devices better have a damn good cell plan!

Beware of the algorithms. Anyone using these services should be aware they are being watched closely. Internet TV providers are already salivating to gear ads specifically targeted to an individual's viewing habits,

Unlike cable TV these systems can become vulnerable. We've already seen the handiwork of hackers and what they can do to smart phones and corporate servers. Smart TV's are no different.

Right now this is an emerging market. This means companies are introducing them at lower prices to seduce people into buying them. If/when major networks accumulate enough viewers this way it will become possible to start pulling major shows off regular TV while at the same time putting the squeeze on cable TV companies forcing them to raise rates even higher. Thusly making their services look more economically desirable.

Ultimately how things turn out will be left up to consumers. We've already seen the direction this is going with pay-per-view and layered premium channels already offered by cable TV. These were the first steps towards going whole hog with 'internet TV'. These plans are moving forward and eventually intend to cut out the middle man (cable TV companies).

Will consumers buy into it?
Given past history, of course they will. Some shows already offered only on premium pay channels get more viewers then many similar shows on regular network TV. Can't blame the entertainment industry for that. Why should they rely on advertisers alone when they can get people to choke up extra money for the same thing (many still having the ads) as they used to get for free.

"A lot of times, people don't know what they want until you show it to them."
~ Steve Jobs (1997) ~

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