Posts Tagged ‘Cable TV’

Goodbye Flo, We Hardly Knew Ye

Last Tuesday, Web outlet paidContent.com broke the story that Qualcomm was preparing to shut down its underperforming FLO TV business unit this coming December.

FLO TV, for those readers who’ve never heard of it (and that’s a large group, apparently), is a proprietary subscription mobile TV service that broadcasts nationwide on UHF channel 55. The service, also bundled as a ‘white label’ wholesale product to Verizon and AT&T subscribers, delivered several channels of TV programming specifically formatted for mobile and handheld devices.

Among the networks offered to FLO subscribers were Fox, CBS, NBC, ESPN, MTV, Nickelodeon, and CNN. The service first launched in 2006 as MediaFLO, and picked up Verizon (VCAST) and AT&T Mobile as re-sellers in 2007.

The FLO will be cut off in December…

Unfortunately for Qualcomm, FLO never caught on with Verizon and AT&T customers. Customers didn’t care to watch movies and long-form programming on cell phones, opting instead for ‘snacking’ on news and sports clips.

The result was a decision to market the service directly to consumers in the summer of 2009, with big box stores including Best Buy and Radio Shack offering a 3.5” LCD FLO TV receiver for $250, along with a $9 per month service contract with a three-year commitment.

The total out-of-pocket expense to watch 12 channels of programming – $570 – was not appealing to potential customers, particularly with the new ATSC MH mobile digital TV service getting off the ground. Why pay all that money when you could potentially access thousands of digital TV stations across the country for free?

Another strike against FLO TV: It didn’t offer any local news, weather, and sports broadcasts, which are the three biggest drivers for mobile media consumption. To make matters worse, smart phones were already providing Web access to video content providers like Netflix and Hulu, not to mention Web podcasts of sports, news, and weather programming; all on a flat rate data plan that also included email access. That’s not a battle Qualcomm could hope to win.

Ironically, FLO viewership numbers surged with ESPN’s coverage of the 2010 World Cup as the obituary was first being drafted back in June. But it was a case of too little, too late.

Nice try, but no cigar.

Qualcomm’s plans for what’s left of FLO TV and its nationwide network of over one hundred channel 55 TV transmitters (and in some markets, channel 56) aren’t clear yet. But there doesn’t seem to be a lot of hand-wringing coming from the San Diego corporate headquarters.

That’s because Qualcomm acquired the UHF spectrum relatively inexpensively earlier this decade, and now feels that the channels are worth at least $2 billion today, based on current spectrum auction results.  So they can sell off their real estate and still pocket a nice piece of change for their efforts, which among other things included relocating (at Qualcomm’s expense) a few UHF TV stations broadcasting on channel 55 prior to the analog TV shut-down in June of 2009.

Is there a market for subscription-based mobile digital TV? It would appear not. And there’s no guarantee that the free MH services just getting off the ground will be sustainable, either.

But in a day and age of customers feeling they are being ‘nickel-and-dimed to death’ for cable and satellite TV, Internet access, cellular phone service, and landline telephone service, FLO TV never stood a chance.

Shades of Crazy Eddie…

Tomorrow (Saturday, October 2), 6th Avenue Electronics will celebrate the opening of their new store in Deptford, NJ with a chain-wide blow-out sale on TVs.

And when I say blow-out, I mean BLOW-OUT!

Can’t beat that deal with a stick!

Here’s what caught my eye this morning: 350 Panasonic TCP42C2 42-inch 720p plasma TVs will be sold for $397.95, a discount of $200 from full retail. And if you want something bigger, 250 Panasonic TCP50C2 50-inch 720p plasma TVs will be tagged at $548.95 each – almost $250 off their normal retail price.

There are other goodies to be had. Want an LG 50PK250 1080p 50-inch plasma TV? Get there early enough, and it’s yours for $788. How does an LG 60PK250 60-inch 1080p plasma TV sound for $1188? Or a Panasonic TCP58S2 58-inch 1080p plasma for $1198?

If LCD’s your thing, you can scoop up a Samsung 46-inch 1080p LCD TV for $648, or a Toshiba 46G300 1080p LCD TV for $749. 6th Avenue’s also got a Toshiba upconverting DVD player for $29.95 and a Panasonic Blu-ray player for $100.  The flier in today’s Philadelphia Inquirer goes on to list all kinds of electronic goodies for rock-bottom prices, including a $80 netbook with 7″ LCD screen, an Olympus 10 megapixel digital camera for $65, and a JVC 8 MP pocket movie camera for $70.

Face it. All electronics are commodity products nowadays. No wonder so many TV manufacturers are struggling to make a buck!

Can’t wait to see how low prices go on Black Friday…

3D: Expect a Long Slog

3D: Expect a Long Slog

It took nearly seven years before HDTV really took off. So how can we expect 3D to launch in less time?

There’s been a lot of discussion lately in the trade and consumer press that 3D is at danger of falling back into a novelty entertainment category.

Several prominent movie directors (among them J. J. Abrams) have come out against the format. Christopher Nolan (Inception) said it was too dark. And sloppy 2D-to-3D conversions, such as Clash of the Titans, may scare some people away from the format.

There’s also anecdotal evidence that the initial fascination that movie audiences had with 3D is starting to wear off. The premium for a 3D ticket can be anywhere from $3 to $5, depending on the theater chain and location. And experiences like Titans will make consumers gun-shy about spending 25% to 40% more for a 3D presentation.

But that’s a movie theater issue. What CE manufacturers want is for 3D to take off like HDTV did, back in the late 1990s.

The only problem with that thinking is that HDTV did not take off in the late 1990s at all! As a matter of fact, it moved at a glacial pace for quite a few years.

I installed my first HDTV (Princeton Graphics AF3.0HD) in the fall of 1999, and connected it to a Panasonic TU-DST51W set-top box and antenna to watch a smattering of HD movies on Saturday nights (ABC) and a few sitcoms and hour-long dramas (CBS), along with Monday Night Football games (ABC again).

My TV market (Philadelphia) didn’t have a full slate of HD content available on the top four networks until 2003, five years after the first HDTV stations lit up. Remember NBC’s experimental HD coverage of the Winter Olympics in February of 2002? Remember the Fox network’s 480i ‘high-resolution digital TV?’ in 2000 and 2001?

The fact is; HDTV set sales didn’t hit their stride until the third and fourth quarters of 2005. That’s when the price wars began in earnest and the HD DVD – Blu-ray war was just starting up.  (Coincidentally or not, 2005 was also the high-water mark for DVD sales.)

Consider that HDTV turned the idea of TV viewing upside down. Gone was analog TV, replaced by digital bits and bytes. Gone too were big, bulky cathode-ray tubes, replaced by matrices of tiny pixels actuated by LCD and plasma technology.

Good-bye, VHS tapes – DVDs were well on their way to killing off this format by the start of 2005. And of course we were no longer limited to just 480 lines of picture resolution, but could enjoy programs with 1280×720 and 1920×1080 pixels of picture detail…win widescreen, no less!

Think about it. TV was literally re-invented from 1998 to 2005. And in 2009, we pulled the plug completely and analog TV broadcasts, completing the switch. But that was 11 years after the process started.

For most viewers, 3D is still an expensive novelty

So…manufacturers want people to buy into 3D. Currently, there are a limited number of 3DTV sets for sale, and they’re not as cheap as 2D sets. And there’s not much 3D content available on Blu-ray to watch right now. You can count the number of 3D TV networks on the fingers of one hand.

And the glasses! Depending on which model 3DTV you watch, you may see ghost images. Or, the picture may get darker as you tilt your head. (You may even get a headache after a few minutes.) And the glasses are expensive, and you need a separate pair for every viewer.

Did I mention that most 3D glasses will not work with other brands of 3D TVs? Hey, you could make anyone’s HDTV set-top box work with anyone’s DTV set. Ditto DVD players and Blu-ray players, and set-top boxes. But not 3D glasses.

It also doesn’t help that we’re in a nasty recession. People are reluctant to spend money now, especially with close to 10% unemployment.  So 3DTV winds up being an exotic luxury for now.

I return to my main point, and that is the long adoption curve I anticipate for 3D. The price premium is one drawback, and the other is the fact that millions of U.S. homes just bought one or more new HDTVs within the past three years.

Depending on whose numbers you believe, we are at or around 50% penetration for HDTV, meaning 50% of all homes have at least one HDTV set. I can guarantee that more than half of those sets were purchased after Q3 of 2005. So, where’s the impetus to buy a new 3DTV?

The good thing about a long adoption curve: Within two years, all models of HDTV sets 50 inches and larger will have the capability to play back 3D programming. (They’ll all have network connections too, but that’s another story.) So it won’t matter which set you buy – you’ll have the 3D playback built-in.

The same thing will happen with Blu-ray players and set-top boxes. They’ll be able to process 3D content as easily as 2D content. So you won’t have to buy an expensive special model just to watch 3D Blu-ray discs.

How long a curve are we looking at? I’d say about five years. By then, broadband speeds will have picked up considerably and we’ll be able to access 3D content through Internet TV channels, as well as from optical disc and video-on-demand.

Content drives demand, and there just isn’t enough of it in 3D right now. By 2015, the situation will have changed dramatically and we’ll have 3D movies, games, and TV programs coming out the wazoo.

Until then, expect 3D to penetrate the TV market slowly, in fits and starts…just like HDTV did.

Redbox: A “Blu-race” to the bottom?

Don’t look now, but Blu-ray is coming to your local Acme. Or Walgreens.

Redbox, the “buck-a-night” DVD rental company, will soon be stocking Blu-ray movies at the end of the checkout counter. And you can rent ’em for $1.50 a night.

Redbox stated in a recent press release that it would initially offer Blu-ray discs in 13,300 of its kiosks, expanding across its entire network of 23,000 kiosks by the fall. Each Redbox kiosk holds 630 discs , or about 200 movie titles.

Redbox is on a roll financially, according to a story in Media and Entertainment Daily. The company’s revenue stream grew by almost 44% Y-Y for the second quarter. And they’re getting most of that revenue at the expense of traditional brick-and-mortar video rental stores (read: Blockbuster).

NCR, another player in the DVD kiosk business with the Blockbuster Express brand, hasn’t announced yet when they will be adding Blu-ray discs to their lineup.

At $1.50 per night, it really doesn’t make sense to buy a Blu-ray disc of any movie. The typical BD release is priced around $25 retail, or 16 times the Redbox rental cost. Not that there will be a huge demand for BD movies out of the gate – while the best estimates from The Digital Entertainment Group (DEG) have market penetration of Blu-ray players, Blu-ray drives in PCs, and Blu-ray equipped consoles (like PlayStation 3) at 19.4 million homes so far, there’s simply no reliable way to know how many of those PS3 consoles are being used to watch Blu-ray movies.

To put things in perspective, Netflix has over 14 million customers now. Comcast has slightly more, as does DirecTV. And any subscribers to those services can access video on demand (VOD) or streaming, if their TV and/or set-top box is so equipped. (PlayStation 3 is, and can even stream from Netflix!)

Given that some BD players are now available for less than $100, this could be an incentive for families to finally try out the BD format. Or maybe they will put that PS3 console to work to watch recent releases like The Bounty Hunter or The Book of Eli in full1080p HD…that is, if they have a HDTV screen large enough, and of the correct resolution.

Of course, if the BD movie title they want isn’t available, they’ll probably just rent the red laser version for a buck and be done with it. Redbox is a convenience service, based on a low-cost impulse purchase decision. If the movie is for a kid’s party or to keep the children otherwise entertained, it makes no difference whether it is a conventional DVD or a blue laser disc.

The question is how many videophiles will make use of the Redbox service. My theater at home is set up for HD, with a 92-inch Da-Lite projection screen and Mitsubishi HC6000 projector. So I’m definitely interested in $1.50 BD rentals!

The only problem is, I’ve been watching so many time-shifted TV shows on my 42-inch 1080p plasma in my family room (plus the occasional red laser DVD-by-mail) that the theater hasn’t been used much lately. Picture quality from an OPPO DV983 upscaling DVD player is so good that it isn’t worth bothering with Blu-ray playback on that plasma screen. I should know better, you might say…but I do, and you can’t see much of a difference between the two formats. At least, nothing to nit-pick about. That’s how good the OPPO scaler is.

In a nutshell, this move by Redbox promises to deliver additional revenue to studios, but probably not as much as they would have liked. No one in Hollywood is happy about the bottom falling out of the DVD rental market, but what other choice do they have?

The question is whether enough customers will prefer the improved quality of a BD movie over red laser DVDs and Netflix streaming to justify Redbox’ additional costs in stocking Blu-ray movies. If this doesn’t help the format take off, then nothing will.

FiOS is coming! (Yawn…)

They’re here!

The big orange spools of fiber optic jackets. The rows of white utility trucks. The polycarbonate junction boxes sitting every few feet along the curb. The spray-painted lines and alien glyphs all over my lawn, and my neighbor’s lawns.

Yes, FiOS has finally made it to our neighborhood. After nearly six years of waiting, Verizon has hired an army of subcontractors to run fiber optic cables under our lawns and breach the once-impenetrable Comcast wall.

This is FiOS! This is Big! (Well, the spools certainly are!)

Thing is, some of my neighbors are kinda blase about the whole thing. And I am, too.

Here’s why: Verizon first wired up nearby Doylestown Borough in 2003-2004, back when most people had separate telephone and cable TV hookups and broadband access was starting to pick up steam. Repeated calls to Verizon about the availability of FiOS in our township brought the same results – “We’re negotiating with your township over the franchise fees.” Seems that, unlike every other township around Doylestown, our supervisors insisted that Verizon pay the same franchise fees that Comcast had, back in the day.

This, even though Verizon had successfully negotiated discounted franchise deals with most other townships in central Bucks County.

Finally, after years of haggling, our supervisors reached an accommodation with Verizon, who had already announced they would not build out their national FiOS infrastructure any further, due to the high labor/materials costs and challenging ROI environment. Fortunately, we already had the required fiber optic ‘drops’ sitting in a Verizon service cabinet at the corner of our development from six years ago.

A few things have changed along the way since 2004. First off, Comcast’s broadband speeds have picked up considerably, and their service is quite reliable. Secondly, I, along with some of my neighbors, dropped Verizon landline telephone service and consolidated everything into the ‘triple play’ option (broadband, phone, and cable TV). And the quality of phone service is much, much better than what I had with Verizon. (Other neighbors opted to install DirecTV dishes and forego any kind of cable connection.)

I’ve also got a CableCARD-enabled TiVo HD that I use constantly to time-shift programs, and it works very well. Not only that, there are numerous ‘in the clear’ digital TV channels present on my system that can be accessed by conventional TV sets without extra set-top boxes.

I saved myself about $40 a month with the consolidation. And have gotten pretty used to the high level of service. So maybe it’s understandable that I’m not in any hurry to change over to a new provider, even if their Internet speeds are supposedly faster (something that was definitely true back in 2004, but maybe not now).

And it doesn’t help when a Verizon contractor shows up at my door, asking me if he can disconnect my cable TV wiring so he can trace the underground line back to the house. Hell, no! Not while I’m reviewing artwork for a client project!

The wires are definitely here…unless they’re somewhere else.

And that’s another thing to consider. When you call Comcast for a service problem (something I haven’t had to do in over a year), a Comcast-trained service person shows up in a Comcast truck.

When you call Verizon, you may get a Verizon tech. Or, you may get a subcontractor, particularly if you have wiring issues.  There are numerous ‘installation disaster’ stories of subcontractors puncturing gas lines and shorting out electrical lines while installing FiOS connections in the central Bucks County area. That alone gives me pause about the whole ‘switch to FiOS’ thing.

Now, don’t get me wrong. I’m not a particularly big fan of Comcast, who seems to raise their rates at the drop of a hat.  And I wonder what Comcast’s pending acquisition of NBC Universal will mean for future monthly rates and access to content.

The fact that I could switch to FiOS at any time may be useful to me to get a better rate from Comcast, or hold the line on future rate increases.

But to be honest, the service I get right right now is very good. And it’s reliable. And I can troubleshoot most of it myself with my own test equipment. And I know a lot of the service and engineering folks at Big C. So I guess I’ll stick with Comcast for a while longer, while those Verizon contractors continue to tear up everyone’s lawns and finish pulling fiber to all the houses in the ‘hood. Then we’ll see how it’s working out for any of my neighbors who decide to make the switch.

Maybe it’s simply a case of dealing with the devil you know, versus the one you don’t know?