The whole Fox vs Time Warner contracting mess was interesting to follow. For those who don’t know what happened: Fox demanded about a dollar per Time Warner subscriber while Time Warner was willing to pay 30 cents per subscriber.
What this shows is that content providers are getting power back as they are not solo dependent on cable providers delivering their content (and advertising) to viewers. Back in June I wrote a blog post that questioned how long we consumers are willing to pay for the convenience of watching content through cable versus the internet (link). Now it seems content providers have woken up and turned this up side down: how much are cable providers willing to pay to stay in the game. They can do so as virtually any program can be obtained through the content provider network, hulu.com or iTunes.
I am very curious to see how this all plays out in the next two years. One thing is for sure: during 2010 I will make steps to remove my 100+ USD per month cable contract and go to an internet solution. Thinking about a Mac Mini for that…. anybody any tips?
With great internet services like Hulu (European readers: see this image) that help you to “Watch your favorites. Anytime. For Free” you must have been wondering why we still pay for cable TV? The answer is: convenience.
The fact that cable prices are still going up (at least here in NYC) will for sure help to accelerate the transition as more and more consumers will try to find alternatives to reduce the large amount of dollars we pay to cable companies every month. Example: in New York City, USD 111.95 per month will give you internet and cable TV at Time Warner Cable… that is a lot for convenience… especially knowing that virtually all TV shows you would like to watch are available on Hulu.com. In fact: you do not even need a hard drive recorder since all the shows are available on Hulu for quite a long time. If news is your cup of tea then you just go to e.g cnn.com to watch Live TV. It is all there… on the net… for free!
So, you are convinced that paying for convenience is kind of weird since you can get it all for free on the net? Read further…
Things are still a bit complicated. Last year it was possible to use media center software (boxee) to stream Hulu content on an Apple TV box connected to your TV. Unfortunately the pleasure was for short: content providers did not want their video to go straight to the TV… As with everything I am sure that hackers, plugin writers will fix this issue and as a bonus will be able to get the Hulu desktop (image) on your media box. I think it is just a matter of time…
Now, once you can use Hulu on your Apple TV or an other media box you might wonder: would Hulu’s 480p content do any good on a 40inch screen? I think you have a point there. The alternative is easy: buy HD content for 2.99USD an episode on iTunes.
Let’s do the math to see how much convenience is worth:
– random internet connection through provider, 25USD per month
– AppleTV, USD 299, (let’s say: 13USD per month over two years)
With a 110USD Time Warner Cable contract you can still buy 24 HD episodes of your favorite TV shows or rent about 18 movies before you would spend more than your current fixed costs!
When will you switch to free?