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  • The Cord-Cutters Dilemma: Still Missing the Obvious

    March 19th, 2015

    It’s a sure thing that, whenever Apple is mentioned, it’s apt to start a media frenzy. So in the wake of renewed reports that Apple is trying to finalize deals with the entertainment companies ahead of launching a TV subscription service, the subject of streaming TV has gotten lots of play.

    Unfortunately, key issues confronting cord-cutters are being ignored.

    One of these is clutter. With Netflix, Amazon Instant Video, Hulu Plus, Sling TV, the rumored Apple or iTunes TV service, HBO Now and all the rest, how does one deal with managing all these disparate services? One key reason to ditch cable or satellite is to cut costs. Another is to simplify your life.

    So the logic to cut the cord is to avoid haing to pay $100 or $150, or even more, for a bucket of 400 channels when you’ll only watch a dozen or so. Isn’t it easier, and far cheaper, to choose a few streaming packages to get the shows you want?

    Well, published reports peg the rumored Apple subscription TV service as costing from $20 to $40, in the same range as a basic cable that also includes your local stations. Will Apple? Or does Apple believe you no longer need to watch local news, or traditional network programming?

    So where’s the advantage? Apple will supposedly offer 25 channels, but evidently not NBC at the start because of the supposed falling out between Apple and the NBCUniversal division of Comcast. But there will be an NBC app that is expected to work on Apple TV. It’s a curious contradiction.

    What about premium channels, such as HBO/Cinemax and Showtime? Do you want to miss the next seasons of Homeland or Ray Donovan, not to mention Game of Thrones? An HBO Now subscription will cost you $15 per month when it debuts, first on Apple TV. Assuming other premium networks charge similar rates, and you add the basic cost of the Apple TV service, just what are you really saving for the added inconvenience of having to manage separate accounts rather than just one?

    Forgetting the cost of multiple services to replace cable, how does Apple manage to sort things out? This is a key question that’s already front and center on any of the streaming set-top boxes. With a few dozen channels, consider the complexities of seeing up a separate login and billing arrangement with each of the content services you want to use. Yes, you can hide the channels you don’t care about, but you can see where it gets cluttered. It’s even worse on Roku, which offers north of 1,000 separate channels, but again you only need to display the ones you want.

    Now I suppose Apple might consider integrating the premium channels for a higher fee. You still may want to add Netflix at $8.99 per month. Indeed, a recent report estimates that 40% of Americans already subscribe to Netflix, Amazon Instant Video, Hulu, or more than one. You don’t even need a set-top box, since most new TVs offer these alternatives under some sort of “smart” option. I have them on my VIZIO TV and my VIZIO Blu-ray. Why do I need to buy another appliance to connect to my system, other than Apple TV for iTunes and AirPlay?

    All right, maybe the next Apple TV will sort things out. I hope so, because I’m still waiting for a compelling pitch to make me want to ditch cable. Maybe a practical ala carte scheme, since I only watch maybe 15-20 channels. Today, cable/satellite divides the lineup into a small number of packages. You may find yourself paying a lot more because you want to watch the one or two channels that are restricted to a higher tier. I’m sure it’s a way to rope you in, but a more defined setup allows customers to get only what they want at a lower price might reduce the cord cutting.

    It’s also being suggested that young people are really moving to alternative content delivery schemes. According to a Wall Street Journal report, “One risk of the media companies’ strategy is that by bringing TV channels to the Web they aren’t thinking far enough beyond their current business models. Their real competition for young audiences in coming years will come from companies like Face-book, Vimeo and Vessel that are attracting content creators from entirely outside the pay-TV ecosystem…”

    Maybe. But the more services that become available, the more opportunities arise for confusion.

    But I still remain perplexed why the elephant in the room continues to be ignored. That’s your ISP’s bandwidth cap. If you’re not using your ISP’s own TV service, or satellite, whatever is streamed to your TV  counts against the bandwidth limits. So after you choose a package of one or more providers that meets your needs, how many hours a day can you watch your set unimpeded before you consume too much bandwidth?

    While I understand the need for limited bandwidth so as not to saturate a cell phone network, does it make sense for wire-based broadband? Maybe for chronic abusers, but someone just spending a few hours a day pulling content via an Apple TV shouldn’t be faced with high overage charges, or having their broadband throttled or blocked. The FCC’s new rules on net neutrality don’t address this issue.

    And why is it being ignored by the media?



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    3 Responses to “The Cord-Cutters Dilemma: Still Missing the Obvious”

    1. DaveD says:

      I skipped all the write-ups driven from a media frenzy about a mythical Apple TV service. Just more rumors from the gossip rags.

      My vision of a mythical Apple TV service is called the “iWatch.” A low-cost, DVR-based iTunes Store service that provides viewing contents. I would determine the content by purchasing viewing rights like 99 cents for a TV show, ten bucks for a season pass, $1.99 for a movie. All purchases are downloaded to the DVR and it monitors the data usage. Contents can be viewed often until deleted (and are not owned) by the purchaser. The monthly cost would vary. There would be a small basic rate for the service plus purchased viewing rights. Local and national network programming included in the basic rate.

    2. Tony Vitale says:

      While the Author has a point a bigger problem exists. The real Problem I feel and I am not sure if the FCC ruling controls it , is that most broadband is provided by the cable companies so one will not be able to truly cut the cord. What is to stop cable companies from raising the price of internet only service so high that it makes it impossible to compete ?

    3. DJ says:

      You raise a very good point about the bandwidth caps. And it’s not like they’re going to get more generous as the cable industry loses more and more revenue to OTT competition. If they can’t make it on TV subs, they’ll try to make it on the captive high-speed internet audiences.

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