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Monday, October 20, 2014

The New High Price of Cutting the Cord?

The same day CBS announced it was unleashing a streaming service, HBO did the same. These two power-players have been amongst the staunchest hold-outs in the digital switchover to streaming media and devices (although both networks have recently made content available on Amazon Prime). However, the media's reporting on the matter has been mostly doom-and-gloom.

While it's understandable for the Old School to bash the new one, traditional outlets are simply going to have to change their playbook if they plan to survive. This decades-old posturing is exactly that: Finger-pointing and name-calling at an almost childish level. Don't forget that many of the larger online media iterations are, or are owned by, subsidiaries of larger media corporations - such as Huffington Post, which is owned by AOL (formerly a division of Time-Warner).

Both cable and broadcast TV networks have a lot to lose as the streaming "revolution" begins but let's be clear: This is about as non-revolutionary as technological advances get. It's been some decade or longer in the making, after all; YouTube debuted in 2005 and I remember watching episodes of a classic, 1990's sit-com hosted from a private server back in 1999-2000 without network interruption or congestion. This means the "Broadband Revolution" played-out years ago without most of America even being aware that it was happening - in no small part due to the mainstream media's refusal to report on it in anything other than sensationalistic terms.

Hubris is definitely a factor here, as these corporations should have had the foresight to have begun research and expansion into Internet-delivery options then, instead of relying on their control over existing popular media and outlets to delay acceptance and expansion of the new technology - the same strategy it appears to be attempting to use against this "sudden" acceptance of streaming media and delivery.

Given the continued growth of YouTube, Netflix, and other streaming media sites - many of which have been around for five years or more - and the subsequent explosion of similar sites over the last several years, it's a little late in the game to call the "Digital Shift" anything other than inevitable. To be fair, few have ever argued that it was anything but, yet the negative reporting these announcements have generated hint at how desperate traditional media is to keep things in-hand.

The ongoing attempts to subvert "Net Neutrality" prove it.

I have previously admonished both industry players and home-users alike on the dangers of "subscription creep" - that ceaseless increase in price to which all cable and satellite subscribers have become resigned - and suggested keeping some of the traditional business and distribution models in-place to avoid a greater fragmentation of options, and additional costs, for the end-user. This would be beneficial to both sides. After all, it isn't everything that's changing, just the way in which home-users receive their signal - not much different from when everyone was forced to purchase digital receivers a few years back - except that now, Big Media wants even greater control over content than they already have, including the ability to impede access to competitors' content. Time and again, the consumers have been held hostage and extorted by these greedy boardroom scuffles - also something to which cable and satellite subscribers have become accustomed - without being given the information and control we need to change our viewing options.

The stingy, slapdash approach these outlets are now taking is disgraceful and doomed to fail for many reasons but overpricing for the home-user, while definitely something all sides should avoid and consumers must watch, is merely a bump in the road through these first stages. To wit, I'm not paying $7.99 a month for Warner Archives, nor do I think most people will. I love Warner Bros.' catalog and realize their collection has great breadth and depth but that's the market price-point for large distributors like Netflix and Hulu, both of which carry content from numerous sources. If this included access to Warner Bros.' extensive musical catalog, as well as a streaming iteration of at least audio from the collection, it would definitely be an option to consider. I'm damn sure not paying $5.99 per month for broadcast TV (CBS' current asking price), much less when that only includes content from a single channel!

Even when a network like HBO provides the content, the same is largely true. While I paid double-digits for the channel on cable, HBO traditionally included new-release movies that are certain to find their streaming home elsewhere - Warner Bros. movies are likely to appear in the Warner Archive, for example. However, because of its cable TV origin, HBO is as much a brand as a studio, and
based on prior experience with the channel, I think their overall media iteration will (eventually) provide value equal to whatever amount they choose to charge. That's something no one can yet say about Warner Archive - nor even CBS, the majority of whose broadcasting decisions have been based as much on a program's appeal to advertisers as to viewers.

I still don't want to pay double-digits for HBO streaming because it won't have half the content similarly-priced distribution points like Netflix and Hulu+ have - even CBS' library dwarfs HBO's - but I might acquiesce, depending on what the subscription covers (website access, live broadcast and/or "autoplay" options over set-top devices, promotional considerations [special features, behind-the-scenes access, contests, gear, et. al.], etc.). Likewise, HBO's brand is a double-edged sword in that all of its in-house content is very... "HBO," so even though its content has breadth (HBO's many productions have covered a wide range of genres and interests over its history), it lacks the depth of the streaming collections the larger distributors provide. I'm also reticent to subscribe now that I know their position on Net Neutrality.

I (and many others) raised the alarm over piecemeal pricing long before HBO, CBS, and half the would-be set-top manufacturers today even entered the market. Since then, I've come to believe that these prices will eventually balance-out as the market stabilizes. That may take a few years but it might not, depending largely on how much control the industries (or, more specifically, industry leaders) are willing to give and take. That, too, is largely dependent on the market itself, as more than half the existing set-top devices, content producers, and media curators/providers, will fail even as the industry thrives.

Copyright 2014, The Cyberculturalist

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