Cable Walled Garden TV Plans To Include Too Many Ads

from the of-course-they'd-screw-it-up... dept

We've already been incredibly skeptical of the plans by certain cable companies to get TV networks to limit their content such that it can only be accessed online if you have a cable TV subscription. The whole thing is based on setting up artificial barriers and artificial scarcity to hold back the inevitable. Such plans never do well. They piss off users and drive them to alternatives. And, of course, you just knew that the likes of Comcast and Time Warner Cable would like screw up the execution too. Many folks (myself included) have been surprised at how well (for the most part) Hulu executed, but just leave it to big cable companies not to learn from Hulu's success.

Reports are coming out claiming that when the shows are put online for this "TV Everywhere" program they'll include the full slate of ads seen during the regular TV version. Studies have shown that this is a bad, bad idea. Having so many commercials -- especially on a platform (the internet) with so many other options, simply drives people away. Hulu learned very quickly to limit the number of ads to just a few -- and it's discovered that (1) people actually pay attention to them and (2) they can charge higher rates. One more sign that this TV Everywhere program is a disaster in the making.

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Comcast And Time Warner Team Up To Control What TV You Watch Online

from the consumers-anyone? dept

There's certainly been plenty of talk lately about how efforts like Hulu to move television shows online could undermine the television industry as people start to realize that they don't need to pay gobs of money to a monopoly cable provider (other than maybe for broadband). The TV content folks believe this is a problem as well, because the cable companies currently pay them corporate-sized gobs of money for the rights to offer their channels to end customers. This leads to regular fights between cable companies and content providers -- but neither really want to see that old system go away. The cable companies want end users to keep paying monopoly-inflated gobs of money, and the content creators want that hefty check from the cable companies.

So, it was no surprise back in February to hear of plans to make agreements between cable companies and content providers that would limit what kind of video you could watch online, requiring you to be a cable company subscriber and "authenticating" what you could watch. Thus, it should be no surprise that Comcast and Time Warner are now announcing exactly that.

This should raise all sorts of antitrust concerns. First, you've got industry execs working together to limit consumer choice, and these industry execs already have quasi-monopolies in certain regions. And they're doing this to keep prices high against competition from the internet. Doesn't that seem like a problem?

The real issue, of course, is that the equation is (as it so often is with such companies) backwards. Rather than embracing what the internet allows these companies to do, they're trying to remove that ability, and make it act like good old television, with those good old revenue streams -- and, amusingly, claim it's "the future of television." Not even close. It's television's past, with an attempt to move it to the internet without any real advantages. As Om Malik points out in the link above: "The deal makes it painfully obvious that everything cable companies do... is done to save their video franchises." It's not about looking forward. It's about preserving the past.

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Time Warner: No Metered Broadband... But We'll Kick You Offline If We Think You Used Too Much

from the that'll-be-good-for-PR dept

So Time Warner Cable has supposedly backed off its metered broadband until it can figure out how to do a better job presenting it (though, it's also threatening to delay upgrades if people don't accept caps or meters). Yet, as reader Matthew Henry alerts us, it appears that Time Warner Cable has instead just started kicking "unlimited" users offline without much warning. Apparently, when the user called to ask what was up, he was told he shouldn't have used so much of his unlimited broadband account. This is the sort of stuff Comcast used to do years ago and which helped contribute to its awful reputation. Nice of Time Warner Cable to try to fix its own reputation by going down the same bad path.

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Politicians Defer To Time Warner Lobbyists Who Wrote The Bill They're Pushing

from the funny-how-that-works... dept

Following up on the earlier story of Time Warner Cable going the political route to try to block municipal competition in Wilson, North Carolina, Broadband Reports has a story pointing out two interesting side stories:

1. During hearings about the law to ban such municipal competition, the politicians pushing the bill that would ban municipal competition were asked to clarify, and rather than answer themselves, the politicians "turned to a Time Warner staff member and an attorney who represents the industry to speak on their behalf." In other words, they outright admitted they didn't understand their own legislation and that the corporate lawyers from the company that would benefit from the legislation understood it better than they did. It's certainly no surprise that lobbyists write the legislation that politicians pass, but usually they at least try to hide it a little bit. Here they're basically flaunting the fact that Time Warner Cable wrote the bill, and the politicians just shuffled it through the process without understanding it. Isn't it great to be a servant of the people?
2. Time Warner Cable is complaining about what a huge cost municipal broadband is to the people of Wilson, but leaves out the fact that Time Warner Cable's CEO's compensation from the past two years is greater than it cost the city of Wilson (via a bond measure, so not taxpayer dollars) to fund the deployment of the fiber network. And you have to wonder if Time Warner Cable will end up spending more trying to block this competition than it would have cost to have built out a competitive quality service as well.

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Yup, Broadband Providers Still Hate Muni Competition

from the why-not-compete? dept

A bunch of readers have been sending in the story of Time Warner and Embarq working overtime to try to stop a small city in North Carolina, named Wilson, from offering its own broadband service. These types of stories aren't new at all. The incumbent telco and cablecos have spent tons of time, money and effort trying to fight muni-broadband plans. Of course, the story is almost always the same. The incumbents have done little to actually provide state of the art broadband, so the municipality comes up with a plan to compete by offering a better service. The incumbents flip out and try to get the competition legally blocked. The whole thing is silly. The incumbent providers always are operating thanks to gov't subsidies and rights of way, and have often abused those positions to offer inferior service. A municipality deciding to compete is a perfectly reasonable response when the incumbent providers have not lived up to their end of the bargain by misusing those rights of way and failing to offer a competitive service. And, of course, if the incumbents are really concerned about muni-competition, they could just take some of that money they dump into legal fights and put it towards (gasp!) improving the broadband they offer.

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Is Time Warner Telling Customers No Caps, No Broadband Upgrades?

from the there's-usually-a-word-for-this-sort-of-thing dept

Time Warner Cable last week backed off its plans to implement metered broadband plans in several cities, at least until it could figure out how to pitch the plans without attracting so much bad press. But now an interesting post over at GigaOM says that Time Warner is now also rethinking rolling out network upgrades in the cities where it wanted to install the broadband caps. The implication seems to be that the company is saying it's fine if consumers in those places want to complain about the caps, but then they shouldn't expect TWC to upgrade their broadband networks and offer higher speeds. Time Warner and other ISPs like to trot out the line that the cost of providing broadband is surging alongside traffic growth, but it seems that just the opposite is actually happening. So here's some horse-trading for Time Warner: if you don't want to upgrade your networks, or if you want to implement caps, that's fine. But don't expect your customers to hang around.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Time Warner Backs Off Metered Billing... Until It Can Figure Out A Way To Not Look So Stupid Presenting It

from the we're-sorry-for-the-misunderstanding dept

After a few weeks of getting hit back and forth by pretty much everyone concerning its plans to expand metered broadband with incredibly low caps and ridiculously high profits (even as its own costs were dropping, and the growth rate of broadband was slowing), Time Warner Cable has now agreed to back off from implementing the plan... for now. From the wording, it's quite clear that the company isn't backing off because it realized that it was a bad idea, but it's retreating because it wants to rethink how it pitches the caps:

It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met.

Translation: because you crazy consumers were being so loud, we need to make it look like we're listening to feedback, and hopefully we'll get to roll this out at a later date when you're more focused on other stuff, maybe by calling it something that sounds more innocuous.

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Time Warner Says People Want Metered Billing; Cablevision Says People Hate It

from the which-do-you-think-is-right? dept

As Time Warner Cable continues to roll out metered billing/capped broadband to more locations, the company's COO is apparently defending the practice by claiming that it's actually what customers want. That argument is easily demolished by Broadband Reports at the link... but it's great to contrast it with another story, also over at Broadband Reports, where Cablevision notes that metered billing confuses and annoys customers:

"We don’t want to give consumers more to think about. We think [broadband] is a pretty powerful drug and we want people to consume more of it."

While Cablevision has had its fair share of questionable practices over the years, one thing you have to admit, is that it's always been much better than a lot of other cable companies on these sorts of issues -- and often goes against what the other big cable companies do. Unlike Time Warner Cable, which caved to Hollywood about running a remote DVR service, Cablevision stood up for its rights and won (so far). The company also has gone against the grain in suggesting a la carte cable channels isn't such a bad idea. Plus, the company offered one of the first truly high speed broadband offerings, and then combined it with cheap or free additional services that helped build marketshare, rather than following the other cable companies in trying to offer every new service at a high price. And, now, it seems like it's taking the customer-centric approach to metered broadband as well (unlike Time Warner Cable, which just claims it is).

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Look At That: Competition Helps Stop Broadband Caps

from the it's-all-about-the-competition dept

For years, many people have been pointing out that the real problem with broadband in the US isn't an issue of net neutrality or broadband caps, but the lack of competition. While having only two providers in a region usually isn't enough to ensure reasonable broadband practices, it may actually be working in upstate NY. While Frontier Communications has been talking about really low usage caps, it seems that now that Time Warner Cable has decided to launch capped broadband in one of Frontier's regions, the company may be thinking about going in the other direction, potentially even running a whole ad campaign about why TWC customers should switch to avoid the caps. Of course, given Frontier's previous statements about caps, it's difficult to believe that customers will be all that well protected from an eventual capped broadband anyway. But, still, this demonstrates that competition can sometimes keep these things in check. But, what you really need is more than just two players.

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Are Cable Companies Looking To 'Emulate' Web Video Sites, Or Destroy Them?

from the face-value? dept

A piece in BusinessWeek says that cable TV companies are "pushing to become more Web-like" by expanding their online video offerings and making their core TV product work more like the web than the traditional channel-delineated system. On the face of it, this is a good thing, since we've long argued that the TV channel is an outdated concept, and should be seen as being like a web bookmark more than anything. But the article largely glosses over one key point in the cable companies' push to grow their online video efforts: they want exclusivity. So instead of throwing things open and using an ad-supported model, like Hulu, they want to take TV shows and video content, and lock it up inside a walled garden for paying customers. That's not "web-like", it's exactly the same as their current business model. Of course, even if these plans don't work out, they've got another way to try and profit from online video: by introducing capped broadband plans that will charge customers based on how much traffic they use. Time Warner's CEO is quoted in BW as saying "we really need to look at what consumers want." It's hard to imagine they want capped broadband, and they want video locked up behind paywalls. The popularity of the likes of YouTube and Hulu indicate they want something very different from what the cable operators have in mind.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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Time Warner Expands Capped Broadband Plans

from the good-luck-with-that dept

Time Warner has been testing broadband plans with traffic caps for several months, and apparently it likes what it's seen, as it plans to soon expand the caps into four more markets. The company alleges it has to switch to capped plans in order to "support the infrastructure of the broadband business," even though the supposed bandwidth crunch ISPs cite when talking about these plans is little more than a myth. As the company's CEO notes, getting the cat back in the bag by getting consumers to switch from unlimited to capped plans is going to be very difficult. Previous studies have found that even light internet users would look to take their business elsewhere if their ISP introduced caps, mainly because they have absolutely no idea how much bandwidth they're consuming. That's a good thing, because the absence of mental transaction costs helped wired broadband take off, and laid the groundwork for all sorts of innovative internet services -- not to mention lots of revenues for ISPs. Compare this to the mobile world, where per-KB or per-MB pricing helped stymie the growth of data services.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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No One Can Find ISPs Who Have Agreed To RIAA's 3 Strikes Plan

from the keep-looking dept

It's been a few weeks since the WSJ announced that the RIAA was supposedly dropping its lawsuit strategy, in favor of a backroom deal with ISPs, negotiated under dubious circumstances by NY's Attorney General Andrew Cuomo, whereby those ISPs would start cutting off connections from those accused (not found guilty) of file sharing. However, since then, we've heard from a variety of ISPs who don't like the plan, and Wired went on a wild goose chase trying to find a single major ISP that has agreed to the plan and came up empty. Of course, most of them refused to comment. The only one who said anything straight up was Verizon -- who had earlier confirmed that it had no interest in doing a deal with the RIAA. The big cable companies and AT&T have shown some interest in the past -- but now refuse to admit that an agreement has been worked out.

The big question is why?

If this is such a great deal for consumers, as Cuomo and the RIAA insist, then why wouldn't an ISP want to step right up and proudly admit to such a deal? Obviously, it's because they know that such a deal is a sham, based on no legal reasoning, that will harm their position in the market and piss off customers. The RIAA will likely claim that no deals have been announced because the details haven't been finalized -- but again, that makes no sense. We've been questioning from the beginning why these negotiations haven't been more open. And with record labels like Warner Music and EMI insisting that they want to be seen as more open and willing to hold a "conversation" with critics, the fact that no one will talk openly about this backroom deal shows what a bunch of liars they are again. They don't want an open conversation. They want the government and ISPs to protect their business model, and they've convinced Andrew Cuomo to fall for it.

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Viacom, Time Warner Cable Fight Over Cost Of Comedy Central, MTV

from the and-so-it-goes dept

While this happens pretty frequently, you can bet that battles like the one going on between Viacom and Time Warner Cable are going to become more and more bitter in the next few years. Unless an agreement is reached (which is likely), Time Warner Cable customers may lose access to popular Viacom channels such as MTV, Nickelodian and Comedy Central. The issue is that Viacom wants to significantly raise the costs to TWC for those stations (between a 22% and 36% price increase). TWC would just pass those costs on to consumers, and the company accurately realizes that this would seriously piss off customers at a time when customers are increasingly realizing that they can drop cable TV and just go online for much of the programming they want.

And that, actually, is part of the issue. One of TWC's big complaints is that Viacom now offers most of the shows on those channels for free online -- where TWC isn't able to get any of the associated ad revenue. The real question is who is in a stronger bargaining position. If TWC dumps Viacom stations, and people start realizing they're fine with just being able to view the content online, both TWC and Viacom will likely lose out (the ad revenue that Viacom gets online won't come close to matching the carriage fees from TWC). The whole thing is a big game of chicken, but we're going to see it play out many more times, as the relative value of the cable provider as the exclusive delivery mechanism for television content starts to decrease. Of course, that only makes the content companies want to increase prices more to make up for the loss -- and the cycle actually accelerates. Both sides stand to lose out unless new arrangements are reached.

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Plenty Of Broadband Providers Pretending They're Offering Fiber To The Home

from the false-advertising dept

Earlier this year, we wrote about Verizon suing Time Warner Cable over a misleading advertisement, where Time Warner Cable claims that Verizon is "catching up" to Time Warner Cable in offering fiber optics. This is misleading, at best. Verizon is installing fiber to the home with its FiOS service, providing significantly faster connections. What Time Warner Cable is claiming is that it uses fiber in its network, not to the home. It's true that TWC and plenty of other broadband providers have used hybrid fiber solutions at the network level for many years, but that's totally different than connecting all the way to the home with a fiber optic connection.

Now it turns out that TWC is hardly the only broadband provider doing this. Apparently lots of broadband providers are now running ads against Verizon where they claim that they've offered fiber for longer than Verizon. That's totally misleading. Having fiber somewhere in the network is not at all an equal comparison to running fiber all the way to the home. As Broadband Reports asks, it's difficult to see how these claims from others isn't false advertising. They're clearly implying that their fiber is the same thing as FiOS when that's not true at all.

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Time Warner Cable Accused Of Antitrust Violation For Requiring You To Rent Your Modem

from the illegal-tying? dept

A guy in Kansas is suing Time Warner Cable for its practice of requiring customers to "rent" their cable modem boxes. He claims that this is an illegal "tying" arrangement, since most subscribers would probably prefer to just own their modem boxes outright. Modem Box rentals have always been something of a scam. It's just a way to charge more for the monthly service, without having to include this extra "cost" in the price that they advertise to consumers. The guy is even noting that this requirement of renting a specific cable modem harkens back to when AT&T required you to rent your telephone from them. The courts struck that down, so hopefully they'll strike down this practice as well.

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Time Warner Cable Using Incentives And Fine Print To Lock Customers Into Broadband Caps

from the read-the-fine-print dept

Back in January, Time Warner Cable admitted that it was considering adding usage caps and overage fees to broadband users. It recently started signing up new customers for these offerings (sometimes with absurdly low usage caps). Of course, it knows it can't just change existing customers over to such plans, realizing they'd be in for quite a set of lawsuits for selling people one thing and then completely changing the terms. However, it's now working on a way around this: trying to convince existing customers to upgrade to special triple play packages with "locked in" pricing for a year and then burying in the fine print that they also agree to the usage caps. Sneaky. Soon it won't be long before you won't be able to change anything on your plan without also agreeing to the new usage caps.

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When You Measure Broadband Caps In Terms Of How Many Emails, Something's Wrong

from the that's-not-broadband dept

We've already talked about how low it appears some ISPs are making broadband "caps." Doing so seriously destroys the value of a broadband connection and will likely backfire on the ISPs who provide it. But, for those companies that are putting in place such low broadband caps -- a small suggestion: when discussing how much the caps allow, listing out how many emails you can send or receive under the cap is probably a bad idea. If the cap is so low that the number of emails is even worth mentioning, you've got a serious problem.

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Time Warner Cable Tiered Broadband Test Begins

from the if-only-there-were-competitors dept

Earlier this year, the story came out that Time Warner Cable wanted to experiment with capping its "unlimited" broadband, trying to force the heavy users to pay more. Even worse, it appeared to want to use exceptionally low caps that would discourage innovation. Despite all of the concerns, Time Warner Cable is moving forward with the test as planned.

The end result will be taking away value from customers -- not just in limiting how much bandwidth they get, but by adding a huge mental transaction cost. Basically, what Time Warner is doing, is adding a huge overhead in terms of whether or not users are willing to actually use the bandwidth they signed up for. Just the fact that people need to think about how much they're using will decrease usage significantly. While that may be what TWC wants, what it really does is annoy customers. This would never actually happen if there were real competition, but with very little competition out there, TWC can try out this plan. Any other broadband provider competing against TWC in areas where this test is going on should be hitting on the limits in any advertising campaign. TWC is free to do whatever it wants, of course, but it's never a good business move to take away features from customers -- especially if in doing so you add an annoying mental transaction fee.

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So Much For Those Synergies Between Time Warner Cable And AOL, Huh?

from the nice-work,-guys dept

While the AOL/Time Warner merger has gone down in the record books as one of the worst mergers ever, I still contend that it could have gone much better if stronger management had been in place. Most specifically, there were obvious synergies between aspects of Time Warner and AOL -- but petty squabbles and turf wars kept most of those synergies from being realized. The most glaring and obvious of these was Time Warner Cable (or RoadRunner) and AOL. Both offered internet access, and it seemed perfectly reasonable to merge the two properties, and use RoadRunner to upgrade all those dialup users onto broadband, and then keep them engaged with all the Time Warner content. Of course, the Time Warner content people freaked out about content on the internet of course, so that would never have worked -- but the failure to link up RoadRunner and AOL never made any sense.

In fact, the two services began aggressively competing with each other. Then, after three years, someone finally realized that maybe the two should work together and made an announcement saying so. Of course... an announcement without action is worthless. So, another year goes by and another exec trots out with an announcement that the two divisions will work closely again. And again... nothing. Give it almost another year... and yet another announcement. Sense a pattern? In the end, the two groups never actually did combine, and with today's announcement that Time Warner is selling off the cable business entirely, it just puts an exclamation point on all these years of keeping the two businesses separate. Of course, in selling off Time Warner Cable, it will also likely lead to speculation that the company will sell off AOL (or merge it with Yahoo -- remember that plan?) as well -- though, as an entirely separate entity.

While I tend to be skeptical of mergers based on vague "synergies," it's still rather amazing that in all this time, no one at Time Warner ever got these two divisions together -- and now the company may end up selling each off separately. In the end, this was a deal that only worked out for the investment bankers. Remember, they love to convince companies to consolidate one year and diversify the next -- because they make money on both transactions.

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Verizon Sues Time Warner Over Misleading Ad... Has To Drop Its Own Misleading Ad

from the funny-how-that-works dept

Remember earlier this year when Verizon Wireless sued competitor Alltel Wireless for false advertising? That came right after the company had been fined for false advertising itself -- and the suit basically ignored the fact that Alltel's ad was accurate until Verizon Wireless (just a couple months earlier) had changed its policy. Now it looks like Verizon Wireless' parent company is doing something similar. Broadband Reports points us to the news that Verizon is suing Time Warner Cable over an incredibly dopey ad that suggests in a very misleading manner that Verizon's FiOS fiber optic offering was just catching up to Time Warner's use of fiber (confusing fiber in the network with fiber to the home) and also suggesting that FiOS-TV requires a satellite dish (which is simply untrue -- though, the company does offer satellite TV service for areas that can't get FiOS yet). Still, it does seem a bit aggressive to sue over this.

And, this situation is made even more amusing by the fact that Verizon itself just got caught running misleading advertising. In this case, Verizon credits CNET "experts" with claiming that FiOS is "near-flawless," which is taken entirely out of context. CNET's article wasn't a review, but about the service, and the context was: "This fierce competition reinforces how important it is for Verizon to offer a near-flawless TV experience." In other words, CNET was saying that FiOS TV needs to be near-flawless to compete -- not that it is. To its credit, Verizon admits that it was wrong in using the phrase in advertising, and won't be using those ads after its initial run is done next month. It also claims that TWC's ads are much more egregious, though I'm not sure that's true. It's quite easy for anyone investigating their options to understand that TWC's claims are false. But it may be much more difficult to confirm whether or not CNET's review really called FiOS "near flawless." Either way, these are industries that have a long history of stretching the truth as far as it can go in advertising messages. It makes you wonder if anyone takes either of their commercials seriously.

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