Posts Tagged ‘Cord cutting’

By The Numbers – Or Maybe Not

Several news stories crossed my desk this morning that are each worth closer scrutiny. The first one comes from Reuters and says that Dish Network’s quarterly revenue missed forecasts as more customers disconnected their satellite antennas.

Dish stated that they had lost 23,000 subscribers on a net basis for the quarter ending September 30. In the same time period a year earlier, the net loss was 12,000 subs, almost half as many. And apparently the company’s new $20/month streaming service, Sling TV, isn’t proving to be as popular as expected.

The combination of DirecTV with AT&T also puts Dish at a competitive advantage, since AT&T can offer bundles of service (including mobile telephone) at competitive prices. Satellite TV has always been at a disadvantage to cable and fiber optic services due to issues with reception during inclement weather and the inability of some home and apartment sites to “see” the satellites, ruling out installations.

In my neighborhood, several folks canceled service from Comcast in recent years and picked up Dish and DirecTV as a cost-saving measure, only to drop both when Verizon laid fiber optic cables for FiOS and offered some low-cost, triple-play bundles that Dish and DirecTV couldn’t beat. (Internet service via satellite isn’t exactly fast and reliable.)

Right now, Dish’s most valuable asset is the UHF frequency spectrum acquired in FCC auctions- but it looks like that spectrum may go back for re-auction next February. And the DirecTV / AT&T juggernaut may force Dish into a merger to stay alive – or perhaps an outright sale.

So things aren’t looking too good for pay TV service providers? Not according to TDG Research. In a story on the Multichannel News site, TDG claims that “the percentage of adult broadband users (ADUs) who were moderately or highly likely to cancel their pay TV service in the next six months dropped 20% since last year.”

TDG went on to say that the group of consumers saying they “definitely will cancel” their pay TV service in the next six months has been cut in half — down from 2.9% in early 2014 to 1.4% in early 2015.” They cite the fact that Comcast only lost 48,000 video subscribers in Q3 2015, as opposed to 81,000 in the same quarter a year ago.

The problem with opinion surveys vs. market trends is that opinions can change abruptly. After a series of mishaps with Comcast’s Xfinity platform earlier this year (and well-documented on this site), I was about ready to throw in the towel and switch over to FiOS myself! But after my original complaint was resolved (replacing the buried cable from the drop to my house) and I wound up with a new modem (802.11ac 2.4/5 GHz), plus much faster Internet speeds and new Xfinity set-top boxes, I decided to stay with the devil I know – for now.

So the TDG data may reflect consumer preferences right now, but what will actually happen remains to be seen when the next set of quarterly data becomes available in January or February of next year.

There’s no arguing with numbers, however. From the Digital Entertainment Group (DEG) comes a report that consumers spent more money on digital video downloads and video streaming through the first nine months of 2015 than on rentals and purchases of DVDs and Blu-ray discs.

According to a story on the TWICE Web site, consumers forked over almost $6.5 billion on downloaded and streamed videos. The “digital” category includes subscription streaming and video-on-demand (VOD), plus digital downloads such as movies to tablets and smartphones. (Like I do when I fly cross-country).

In contrast, the dollar amount spent on rentals and purchases of optical disc media amounted to $6.3 billion – close, but still in 2nd place. From January through September, revenue from downloads and streaming rose by almost 16% Y-Y, while revenue from DVD/BD purchases declined by 14% and disc rentals dropped 7.1%.

Within the streaming/downloads category, the lion’s share of revenue (3.65B, or 57%) went to subscription streaming, while digital downloads captured 21% or $1.34B. The rest went to subscription video-on-demand ($1.41B, or 22%).

What’s interesting is that in 2014, the DEG states that “consumers spent more on physical media, about $6.93 billion, compared with $7.53 billion spent on digital downloads and streaming.” Overall, that means that in 2014, consumers whipped out their credit cards to the tune of $14.46B, or about $1.2B per month. Through September of 2015, that number is $12.74B total, or $1.42B per month – an increase of about 15%.

So there you have it. Cord-cutting (or “dish dumping”) is on the rise. Or maybe it isn’t, if we are to believe the preferences of consumers. Or maybe it’s the HDMI cable we’re cutting, preferring to stream and download videos as opposed to playing them back from optical discs.

One statistic I wish the DEG would delve deeper into concerns the installed base of Blu-ray players – almost 80 million households own one now, according to DEG. But how often are they used for playing movies, as opposed to streaming movies and TV shows from Netflix, Hulu, Amazon Prime, and other services? We just don’t know.

 

USEFUL GADGETS: Three Antennas and a Preamplifier for Cord-Cutters

The cord-cutting landscape has changed considerably in the past twelve months, and it’s no longer a fad, but a growing trend as more and more consumers decide that they can get by just fine without expensive pay TV channel packages.

In fact, Comcast reported yesterday that they now have more subscribers for broadband service than for pay TV channels, which accords greater importance to Comcast’s failure to acquire Time Warner: The combined companies would have controlled broadband distribution to a disproportionate number of U.S. homes.

While Internet service is the key part of cord-cutting, free over-the-air television still pays an important part. Think of the Super Bowl, the NHL Stanley Cup and NBA championships, and the NCAA Final Four championship game.

But there’s also a lot of good programming on free TV right now. In recent months, my wife and I have used our Channel Master DVR+ and TiVo HD to time-shift and watch The Blacklist, American Crime, Brooklyn 9-9, The Good Wife, 60 Minutes, American Odyssey, CSI, Blackish, Saturday Night Live, and Mr. Selfridge (plus a host of one-time PBS programs).

Throw in some Netflix streaming (House of Cards) and there’s plenty to watch without Big Cable. So a balanced cord-cutting approach should incorporate both broadband and terrestrial broadcast TV.

To get the former, you need a fast Internet connection and a late-model Wi-Fi router. To get the latter, you only need some sort of antenna to connect to your television or receiver/DVR, like the Channel Master box, TiVo’s Roamio, Tablo, or Mohu’s new Channels product.

Blessed with a few days of nice weather, I decided to excavate my pile of review products and found three antennas patiently waiting for testing. The first was a rather odd-looking design from HD Frequency, called the CC Aerowave ($49 with 12’ cable from www.hdfrequency.com). It resembles a small window with a 75-ohm coaxial balun attached to the inner corners of two panes.

The second antenna came all the way from Australia and goes by the name HD Quad ($39.99 from www.hd-quad.com). It’s a flexible, transparent antenna with UHF collinear elements, not unlike many other antennas I’ve tested.

The last antenna is a bit larger and is a six-element VHF/UHF yagi, and comes from Channel Master. The StealthTenna 50 (CM3010HD, $29.00 from www.channelmaster.com) can be mounted indoors or outdoors. It’s small enough to sit in a closet or attic space, or even in a room – think of it as functional art.

I also found a new inline signal preamplifier from Antennas Direct. The Juice UHF/VHF Amplifier ($79.99 from www.antennasdirect.com) can be used inside or outside and provides about 18 dB of signal boost with a low noise figure, which is real handy in areas where TV reception can be problematic. (Successful digital TV reception is all about signal-to-noise ratio!)

The tried-and-true bowtie antenna under test. Note the high-tech antenna mount.

The tried-and-true bowtie antenna under test. Note the high-tech antenna mount.

The HD Quad under test.

The HD Quad under test.

The CC Aerowave under test.

The CC Aerowave under test.

Channel Master's StealthTenna 50 under test.

Channel Master’s StealthTenna 50 under test.

THE SET-UP

For this round of testing, I dusted off my tried-and-true UHF bowtie antenna, once available from Radio Shack but largely ignored by retailers today. (Seriously – how many of them want to sell a $5 TV product?)

I set the bowtie up on a folding table in my home office and attached it to a large cardboard box with masking tape. While that part of the test was decidedly low-tech, I then connected the antenna lead into a two-way splitter, with one leg going to a spectrum analyzer and the other going to a Hauppauge Aero-M USB tuner, connected to my Toshiba laptop.

This arrangement allowed me to see the actual waveform and signal strength of each TV station under test. I could then verify successful reception with the Aero-M, and to close the deal, look at the actual MPEG-2 video stream from each station using TS Reader. These three measurements gave me a very concise report on the performance of each antenna.

If you go back to my last round of testing in November of 2014, you’ll see that I used the same antenna position (different box, though!) and same test gear. The only possible differences in testing would come from the amount of foliage on nearby trees, as my house is partially blocked from the Philadelphia/Roxborough antenna towers over a20+ mile path. (In other words, an ideal site for indoor TV antenna testing!)

The Philadelphia TV market is unique in that it has two high-power, low-band VHF TV stations – KJWP (IND) on channel 2, and WPVI (ABC) on channel 6. There are only 40 or so low-band DTVs in operation nowadays as that part of the RF spectrum is susceptible to impulse noise and strange propagation enhancement. Antennas that work well from channels 2 through 6 (about 54 to 88 MHz) are also very large – a half-wavelength dipole for channel 6 needs to be about 68 inches long!

There’s also one high-band VHF operation on channel 12, WHYY (PBS). The rest of the Philly DTV stations are active on the UHF band, starting at channel 17 (WPHL) and ending at channel 42 (WTXF (FOX)). In addition, I can easily pick up three DTV stations from the Allentown area: WBPH-9, WLVT-39 (PBS), and WFMZ-46 (IND). There’s even a repeater for WTXF on channel 38 that shows up on my home antenna array, plus WNJT-43 in Trenton.

The performance of each antenna was verified with an AVCOM spectrum analyzer, Hauppauge Aero-M USB stick receiver, and TS Reader software.

The performance of each antenna was verified with an AVCOM spectrum analyzer, Hauppauge Aero-M USB stick receiver, and TS Reader software.

THE TESTS

I picked a handful of stations to verify reception: WPVI-6, WBPH-9, WHYY-12, WPHL-17, KYW-26 (CBS), WUVP-29 (UNI), WCAU-34 (NBC), WYBE-35 (IND), WLVT-39, WTXF-42, and WFMZ-46. Any of these antennas would be doing an outstanding job if they grabbed all of these stations, as their signal levels vary widely and there’s about 113 degrees directional offset between the Roxborough and Allentown antenna towers.

The first measurements were made with the bowtie, but unamplified and with the Juice amplifier connected. I then repeated these measurements with the HD Quad, CC Aerowave, and StealthTenna 50; again, unamplified and amplified. (I’ll have separate comments at the end of this article on the performance of the Juice amplifier.)

Perhaps the toughest signal to pull in is WPVI on channel 6. Two of the review antennas aren’t really designed for low-band VHF reception, but WPVI runs quite a bit of power and manages to get picked up by brute force on many antennas. (None of the test antennas could pull in KJWP-2 reliably). The rest of the stations aren’t quite as challenging to pull in.

Table 1. Here's how each antenna performed with 11 VHF/UHF  test channels.

Table 1. Here’s how each antenna performed with 11 VHF/UHF test channels.

Table 1 shows the results of my tests. Amplifiers do make a big difference, and helped the lowly bowtie antenna and StealthTenna 50 capture first place with 9 out of 11 stations received reliably (i.e. no drop-outs for at least a full minute). To be fair, the StealthTenna 50 is a much larger, directional antenna than the CC Aerowave and HD Quad, both of which should behave like dipoles with classic figure-8 patterns.

Table 2 ranks the antennas by performance. The bowtie by itself wound up in a three-way tie for second place with the amplified HD Quad and bare-bones StealthTenna 50, grabbing 8 out of 11 signals. Following behind was the amplified CC Aerowave, having received 7 out of 11 stations successfully and the bare-bones HD Quad with 6 out of 11 stations.

Table 2. And here's how each antenna/amplifier combination ranked after the tests.

Table 2. And here’s how each antenna/amplifier combination ranked after the tests.

 

The Aerowave was a puzzler. By itself, it only received one station – WFMZ on channel 46. I experimented with laying it flat and orienting it at right-angles to the Roxborough antenna farm to try and improve reception, and oddly enough, both of these alignments were more successful than simply positioning the antenna with its face in the correct compass heading. Lying flat, it picked up 4 of 11 stations successfully, while angled at 90 degrees, it grabbed 6 of 11.

The literature supplied with the Aerowave says you can “position the antenna in any desired location,” but based on my results, you may be futzing with it for a while to get the best reception – something I didn’t have any problems with when using the Mohu Leaf, Ultimate, and Winegard FlatWave antennas last November.

Just how much difference does an amplifier make? Here's a view of channel 2 through 6, as received by the bowtie antenna, unamplified. WPVI's signal on channel 6 is at the center of the screen.

Just how much difference does an amplifier make? Here’s a view of channel 2 through 6, as received by the bowtie antenna, unamplified. WPVI’s signal on channel 6 is at the center of the screen.

And here's the spectral view with the Juice amplifier inline. You can actually see KJWP's signal on channel 2 now (far left).

And here’s the spectral view with the Juice amplifier inline. You can actually see KJWP’s signal on channel 2 now (far left).

 

ADDING SOME JUICE

Antenna Direct’s Juice amplifier worked much better than expected. Its specifications call for 17.5 dB of gain on VHF channels and 19 dB of gain on UHF channels. (10 dB = 10 times the signal strength, with each 3 dB in gain doubling the previous signal level.) The amplifier’s noise figure was specified as below 2 dB in the VHF bands and below 3 dB in the UHF bands.

In my tests, the Juice boosted WPVI’s signal on channel 6 by about 15 dB and raised the noise floor from about -87 dBm to -85 dBm – or 2 dB, as the specifications claim. All amplifiers generate noise, and a good design will keep that to a minimum to avoid spurious signals and interference to desired signals. (Cheap amplifiers won’t!) Performance was comparable on channels 9, 12, and even 17, where I saw signal levels increase by about 18 dB.

At the high end of the UHF band, I saw an improvement of 20 dB with an increase in noise figure of about 2.5 dB, using WFMZ’s powerful signal on channel 46 for testing. That’s excellent performance for a UHF amplifier and rivals that of the Channel Master Titan-series mast-mounted amplifiers I’ve been using for years. (Titan 2 VHF/UHF 16 dB $65.00, Titan 2 VHF/UHF 30 dB $69, both available from www.channelmaster.com)

I don’t have any data on the Juice’s resistance to intermodulation signal distortion (or overloading from very strong in-band and adjacent-band signals), other than to say that the dozens of very strong FM radio carriers that also broadcast from Roxborough didn’t create any reception issues for me with channel 6 when the amplifier was inline.

Here's a spectral view of WBPH-9 and WHYY-12 with no amplification...

Here’s a spectral view of WBPH-9 and WHYY-12 with no amplification…

And here are both channels after turning on

And here are both channels after turning on “the Juice.”

 

Here is a view of the UHF TV spectrum from channel 17 to channel 46, as received by the Aerowave with the Juice amplifier. (I could only pick up one signal without amplification.)

Here is a view of the UHF TV spectrum from channel 17 to channel 46, as received by the Aerowave with the Juice amplifier. (I could only pick up one signal without amplification.) Many of the TV signal waveforms are quite distorted, which makes the job of the adaptive equalizers that much harder.

Here's the same view of the UHF TV spectrum, this time received by the HD Quad equipped with the Juice amplifier.

Here’s the same view of the UHF TV spectrum, this time received by the HD Quad equipped with the Juice amplifier. Note that the TV signal waveforms are somewhat cleaner with less multipath distortion.

One more look at the UHF TV spectrum, this time through the elements on Channel Master's StealthTenna 50 and Juice amplifier.

One more look at the UHF TV spectrum, this time through the elements on Channel Master’s StealthTenna 50 and Juice amplifier. Most received channels are very clean with little multipath distortion.

Finally, the same UHF TV spectrum, this time as received by the lowly bowtie, again with

Finally, the same UHF TV spectrum, this time as received by the lowly bowtie, again with “Juice.” Amazing how well such a simple antenna works, isn’t it? That big spike on the far right is WFMZ-46, whose operating frequency is close to resonance with the half-wave loop created by the bowtie antenna. Hence, the very strong signal. (At one time, channel 46 was near the middle of the UHF band, believe it or not!)

CONCLUSIONS

It is amazing how little antenna you need to achieve indoor TV reception. My location is sub-optimal in this regard, given my distance to Roxborough and the number of obstructions in my path.

Yet, with just a $5 bowtie antenna, I was able to receive eight TV stations reliably (5 from Philadelphia and 3 from Allentown), including all major networks (CBS, NBC, ABC, Fox, and PBS). Adding the Juice amplifier brought in one more station, and probably fiddling with the bowtie position would have captured the remaining two on my list.

Channel Master’s StealthTenna 50 isn’t exactly small, but you can put it in tight locations indoors for reception, such as a townhouse attic. You can even install it on top of a shelf, or in a closet, and with an amplifier, it will do an excellent job – just use one of the many TV reception Web sites (TVFool.com is the best) to determine the compass heading and where to aim your antenna.

The HD Quad behaves like many other collinear antenna designs I’ve tested. It’s transparent, so you can hang it in a window, and it is a better performer on UHF channels than on VHF. Add an amplifier to it and you may grab a few more channels. One bonus – you can roll it up and take it with you on trips, as I often do. Hook it up to a USB tuner stick and you can watch local HDTV on your computer in hotel rooms.

The CC Aerowave was, to put it mildly, a disappointment. I even tried moving it to different locations, using the spectrum analyzer to peak the signal and see if I could improve those reception numbers. No dice! Some signals that wouldn’t come in at all were now just intermittent with frequent dropouts and frozen images. Adding the Juice amplifier didn’t help much, so I can’t recommend this antenna.

Finally, Antennas Direct’s Juice amplifier is a solid performer and delivers the goods. A noise figure approaching 2 dB in the UHF TV band is excellent performance for the price. There is a puzzler, though – although this amplifier is obviously weatherized, it doesn’t come with a mounting bracket for installation on a mast, which is the best place to out it to overcome signal loss and noise in the antenna downlead. Something for the AD folks to figure out…

It’s All About The Pipes

It has become increasingly clear that consumers are moving to streaming and cloud downloads to watch TV shows and movies at home. This trend, which has been documented by numerous research firms and news organizations, reached a “tipping point” in 2011 when more video was acquired via streaming and downloads than by the traditional method of renting or purchasing optical discs.

I’ve been staying on top of this phenomenon ever since 2005, when optical disc purchases began a slow, steady decline. A few years later, DVD rentals also turned south and have stayed there ever since. The blue laser format wars of 2005 – 2006 did nothing to reverse this trend: Blu-ray disc sales have not nearly made up for the fall-off in packaged media sales and rentals.

Netflix, of course, carries the blame (or credit) for this reversal of fortune. The company now has over 50 million subscribers worldwide, with over 30 million of them stateside. Their clout has increased to the point where agreements have been negotiated with Comcast, Time Warner, Verizon, and other MSOs to ensure Netflix can stream its movies and TV shows with minimum guaranteed bit rates.

At the receiving end, we’ve seen increasing competition by Internet service providers to boost their download speeds. Although Verizon’s FiOS service lies buried in my front yard, ready for tapping, I still rely on Comcast for video, VoIP, and broadband. (For now, Verizon is a “useful idiot” when I complain to Comcast about ever-escalating costs.)

A quick check with the CNET Broadband Speed Test shows my download speeds at 10 AM average 17 – 20 Mb/s, which is certainly faster than they were a year ago. But they’re not nearly as fast as those encountered in South Korea, Zurich, Brussels, Hong Kong, or even Chattanooga, Tennessee.

An article in Friday’s New York Times explores why the U.S. has fallen behind in providing faster Internet service and offers up some intriguing data from a group called the New America Foundation’s Open Technology Institute. In many countries, governments regulate or control telecommunications services and have made the necessary investments to upgrade their broadband networks.

In contrast, broadband delivery in the U.S. is largely dominated by Comcast, Time Warner, AT&T, and Verizon, who appear to be motivated solely by the bottom line. There are exceptions, such as the aforementioned Chattanooga, where the city offers service through a publicly-owned and operated fiber optic backbone, and Kansas City, where Google took over an existing ISP and has been upgrading to fiber with haste.

What about the rest of Americans, particularly those in areas limited to DSL or even satellite broadband (always unpredictable?) Some hope may lie in the new High Efficiency Video Codec (HEVC), a.k.a. MPEG-H H.265. This codec promises to reduce bit rates by 50% over H.264, allowing delivery of 1080p/60 content to homes with adaptive bit rates in the vicinity of 1 – 2 Mb/s. Not coincidentally, that is the average download speed found in a majority of U.S. homes between 9 and 11 PM at night, when video streaming is heaviest.

Hand-in-hand with improved broadband service comes cord-cutting, or dropping pay TV channel packages in favor of streaming. A recent report by The Diffusion Group shows that 14% of all broadband homes don’t subscribe to pay TV, up from 9% in 2011. The report states that about 75% of U.S. households now have broadband service, so 13 million homes are doing just fine without the likes of DirecTV and Comcast.

I’ve written previously about the growing outflow of pay TV customers and how the pay TV industry saw its first net loss in subscribers in 2013. This trend hasn’t gone unnoticed by media companies: HBO announced last month that it would launch a streaming service for $15 per month that would reach a large, younger population of viewers who have no interest in cable subscriptions.

CBS followed suit the next day, announcing an “all access” subscription for $6/month to all its owned stations, current programming (viewed a day later), and an enormous archive of older yet still popular TV shows such as Star Trek and Cheers (two shows that, ironically, originally ran on NBC!). And yes, there are mobile apps for all of this.

The convergence of cord-cutting and improved broadband connections has economists wondering if we are finally reaching the era of “a la carte TV.” In an intriguing paper posted on the Knowledge@Wharton Web site, the author ponders if consumers would be better off with a la carte (pick your own channels) services, or if costs would skyrocket and diminish the value of choice.

One thing is for certain: Speed drives need. Just as improvements to the highway system in this country led to bigger, faster, and more comfortable cars, faster broadband access (no matter where it comes from), coupled with more efficient video codecs, will lead to more cord-cutting and a shift in video content delivery and consumption online at the expense of conventional TV channel viewing.

It’s all about the pipes…

Trends: Ignore Them At Your Peril

On August 15, Leichtman Research Group of Durham, NH released its quarterly revenue and subscription numbers for U.S. cable TV providers. And there was a surprise to be found in the calculations.

For the first time ever, the number of broadband service subscribers for major cable TV service providers exceeded (barely) the number of cable TV channel subscribers. This happened during the 2nd quarter of 2014 and represents a milestone for pay TV services. (And yours truly predicted it would happen a year earlier, in a DD posted a few years back. Oh well, close enough for government work…)

The actual differential favoring broadband subscriptions was small, amounting to about 5,000 more broadband customers. The actual totals for cable TV systems (not including Wide Open West, an overbuilder) were 49,915,000 for broadband, and 49,910,000 for cable channel service. What’s more interesting is that thirteen largest pay TV providers in the US (about 95% of the market) lost about 300,000 net video subscribers in 2Q 2014, compared to a loss of about 350,000 video subscribers in 2Q 2013.

To offset that decline, the 17 largest pay TV providers added about 385,000 broadband customers during the same time period. Cable TV companies control the lion’s share of broadband service revenue and have a 59% market share vs. AT&T’s U-Verse and Verizon’s FiOS services. The latter companies stayed essentially flat in new subscribers as an almost equal number of customers dropped DSL service (627,000) compared to those who signed up for faster broadband (636,000).

For all cable and telcos that Leichtman surveyed, the total number of broadband subscribers was about 85 million. Of that total, industry giant Comcast claimed 21.27 million and #2 service provider Time Warner Cable accounted for 11.97 million. Among cable TV companies, those numbers represent 42% and 23% market shares, respectively. (Keep that in mind as you ponder the consequences of a potential Comcast – Time Warner merger.)

Now for some additional perspective: Netflix recently broke the 50 million worldwide subscriber mark, with 36 million of those subscribers located in the United States. That’s larger than any cable TV or telco subscriber base. In fact, it’s more than Comcast and Time Warner combined, and is indicative of the meteoric growth Netflix has experienced since it commenced a streaming service in 2007.

Combined with the shift toward consumption of digital media online vs. renting or buying optical discs (as outlined in my last Display Daily), it’s clear that broadband is becoming the more desirable service for many households. I’d also venture an educated guess that customers who subscribe only to broadband services tend to skew much younger (Millennials) while traditional cable TV channel subscribers skew older (Baby Boomers).

While AT&T and Verizon have a smaller share of the pie, it’s still a large enough slice to motivate Comcast, Time warner et al to keep increasing their broadband speeds and not lose any competitive edge. I am a Comcast subscriber and while writing this article, checked my download speeds using CNET’s Internet Speed Test. The result? 20 Mb/s downstream at 5 PM, which is a considerable boost from what I had three years ago. Could the fact that Verizon ran optical fiber through my front yard a few years ago have anything to do with it?

What does all of this mean, long term? First off, the preference for faster broadband vs. a pile of pay TV channels that most people never watch will continue to re-shape the business model for cable TV companies. (The median number of channels watched in pay TV households currently stands at 17.) Continued price increases and increasing reliance on wireless (and not wired) phone service will prompt more customers to drop so-called “triple play” offerings and just go with broadband (and probably use services like Ooma for VoIP calling).

Secondly, the sheer size of Netflix and its expanding category of both rental movies and original series provide even more impetus for disgruntled pay TV subscribers to dump costly channel packages and stream everything from the Big Red Father. Both House of Cards and Orange Is The New Black are wildly popular – there’s no reason to assume Netflix won’t hit a few more home runs. (And their success is prompting HBO to finally discuss publicly a subscription streaming service independent of cable TV delivery.)

Finally; it may take more time than I prognosticated several years ago, but cable TV companies and telcos will slowly and inevitably morph into something that looks more like your local electric company, providing metered high-speed broadband connections and letting customers decide what they want to watch, and when. The DVR may even pay the ultimate price and fall by the wayside in favor of streaming from cloud servers as this comes to pass.

Even the biggest fires start with a tiny spark, and most people don’t even notice trends until they are well under way. Ignore them at your peril…

Aereo And The Law Of Unintended Consequences

For readers who aren’t up to speed, Aereo is a new service that receives terrestrial digital TV broadcasts in major markets and re-transmits them over the Internet, using AVC coding with IP headers. The concept is to provide local reception for those who can’t pick up these signals for one reason or another on their regular TV.

Now, the devil in the details: Ever since Aereo launched a couple of years ago, it has been in court, fighting off challenges by the major broadcast networks who are crying “foul!” and saying that Aereo’s retransmission is a violation of copyright laws. They also claim that Aereo owes them retransmission fees.

Aereo’s rebuttal and defense centers around a flimsy (to me) technical argument: Each subscriber gains access to an individual antenna about the size of a dime, which then is connected to an individual receiver, decoder, DVR, and encoder. It’s as if the subscriber built his or her own TV antenna system, which is certainly within their rights.

I remain skeptical because the cost of actually setting up thousands of individual antennas, terrestrial receivers, video decoders, and video encoders would be prohibitively expensive and never be recovered by the $8 monthly subscriber fee (for 20 hours of recording time, $12 for 40 hours).

And anyone who has ever taken a modicum of courses in electrical physics and RF theory knows that (a) the tiny antennas Aereo assigns to each subscriber can’t possibly have enough gain to work for high band VHF reception, let along UHF reception, and (b) the close spacing of those antennas – as seen from earlier PR photos released by the service – means they interact with each other to form a larger array, based on the principles of inductive and capacitive coupling. That, in essence, is a master antenna TV system – delivering TV channels to many viewers, not one.

Thanks to a sub-par presentation by expert witnesses called by broadcasters at the first hearing, the 2nd Circuit Court (New York City) ruled 2-1 that Aereo didn’t infringe on copyrights and cited the earlier Cablevision “cloud” DVR decision as precedent. Aereo’s right to operate was subsequently upheld in the 1st Circuit (Boston). Service is active in both cities now.

However; two weeks ago, Aereo was rebuffed by a 10th Circuit judge in Salt Lake City, who unequivocally stated that “The plain language of the 1976 Copyright Act supports the plaintiffs’ position. Aereo’s retransmission of plaintiffs’ copyrighted programs is indistinguishable from a cable company.” As a result, Aereo had to shut down its service in Salt Lake City and Denver for the time being.

While this case winds its way on to the Supreme Court, another twist in the story has surfaced. Apparently subscribers in New York City had massive problems with the Aereo stream of the Oscars telecast on WABC-TV a week ago Sunday. Consequently, the company’s Twitter feed was lit up with complaints about “buffering” and “locked-up pictures.”

Here are some of the dozens of tweets I found: “Awful service, bad image quality & not recording scheduled shows but it sad you treat ORIGINAL customers the way you do.” “It goes out now and then requiring me to select Oscars all over again. Common? I have it on auto quality.”  “Thanks for doing work on the site tonight. It’s not like I wanted to watch the Oscars. No big deal.” (Gotta LOVE that sarcasm!)

And more: “C’mon Aereo. Get your s–t together.” “Anyone else watching the Oscars using Aereo like me? S–t keeps buffering every 30 seconds. Frustrating the hell out of me.” “Hmm is Aereo down for anyone else? Is it just an East Village or Roku thing? #CordCutting fail during the Oscars” “@Aereo Support I keep getting the message “The Oscars has ended.” A total of 8 seconds recorded. Worst. Oscars. Ever.”

This one was my personal favorite: “@Aereo I don’t have time to run to Best Buy and buy some rabbit ears right now.” Well, maybe that would have been the best thing to do.

A couple of observations are in order. First, I don’t know how exactly Aereo has its front end configured, but if they’ve actually tried to keep every single subscriber’s hardware separate by various technical tricks to pass legal review, then they might have run out of server capacity and brought this service failure on themselves. (Apparently this also happened during the Golden Globes, according to a story on the Quartz Web site.)

There is a reason why cable and satellite companies use a single receiver for each broadcast and premium channel they carry, and multiplex (copy and repeat) those channels on their outgoing RF and IP channels: It’s WAY more cost-effective and less troublesome! So they have to pay a retransmission fee: Big deal! What will the cost be now to Aereo in dropped subscriptions, not to mention bad publicity from these service problems?

Second, I’ll bet that more than a few Aereo subscribers could actually pick up the HD broadcasts from New York City stations if they tried. Over the years, I’ve tested numerous indoor TV antennas and there have been some real winners out there like the Mohu Leaf Ultimate series and Winegard’s amplified FlatWave antenna.

Both are reasonably priced and perform adequately on VHF channels and very well on UHF channels, which in New York City means you can also use them to watch WNBC, WCBS, and WNYW among the major networks. (By the way, those are the three networks that carry NFL games in the New York City metro area.)

Third; if you can pick up local TV broadcasts with one of the aforementioned antennas, there are terrestrial DVR products that will let you record those channels, like Channel Master’s new DVR+. It has dual tuners, built-in capacity for about 2 hours of HD recording (expandable with any external hard drives or solid state drives through USB ports), plus Wi-Fi connectivity and support for Internet video services like Vudu.

Or you can pick up one of Hauppauge’s WinTV receivers that plug directly into a USB port on your computer and provide terrestrial digital TV reception, letting you use your hard drive as a DVR. I carry around a few of the Hauppauge Aero-M stick receivers and a Mohu Leaf for reception on the road, and they work great.

We’ll never know the actual reason for Aereo’s system failures during the Golden Globes and Oscars, but it’s entirely possible that the company was too clever for its own good by engineering and building a system that was designed to neatly parse and side-step copyright laws.

It’s funny how the law of unintended consequences works, isn’t it?