Posts Tagged ‘Dish Network’

Time To Stop Whistling Past The Graveyard?

According to a new report from Moffett Research, pay TV services in the United States lost 316,000 subscribers between June of 2012 and June of this year. According to a story in Variety, Craig Moffett was quoted as saying, “Cord cutting used to be an urban myth.  It isn’t anymore. The numbers aren’t huge, but they are statistically significant.”

According to the story, Leichtman Research Group determined that subscribers rolls declined by 80,000 Y-Y through the first quarter of 2013. While “cord cutters” have been talked about for several years, they’ve never been statistically important – until now.

Cable TV system operators took the biggest hit, dropping 591,000 video subscriptions in Q2 ’13. AT&T’s U-Verse and Verizon’s FiOS services added 371,000 subs in the same time period, while DirecTV and Dish saw a total of 162,000 customers bail out.

There are many possible reasons, but personal experience makes a strong case that pay TV services are just too expensive. I signed up for Comcast’s Triple Play a few years back when I shut down my Verizon landline service. After asking about the monthly price without any promotional discounts, I was looking at about $140/month for two phone lines, Internet, and two digital TV channel tiers.

In a few years, that had crept up to nearly $185 per month. In the meantime, Verizon came through and “nuked” our neighborhood while pulling optical fiber, leaving a bad taste in everyone’s mouth. But they did pick up a couple of my neighbors, and several times each month, I get mailers advertising rock-bottom “triple play” FiOS deals in the neighborhood of $90 per month.

It was a useful negotiating chip to have when I called Comcast in June and complained about being raked over the coals. The result? An immediate $40 rebate for the month of July and a $30 drop in my monthly bills.

I always have the option of saying “No!” to Comcast and dumping the channel packages. True, I’d lose access to Top Gear, Copper, Homeland, The Amerikans, Dexter, Breaking Bad, Mad Men, and other cable-only shows. But I could keep my broadband package and supplement it with over-the-air TV (my rooftop antenna system reliably picks up stations from Philadelphia and New York City). And I could stream these popular programs later in their runs, or buy them as digital downloads.

Apparently, that’s what more subscribers appear to be doing – forgoing costly channel packages for day-after streaming and season-after downloads of popular shows. The concept of ‘water cooler talk’ about hit shows seems to becoming an anachronism, as more people telecommute. And of course, younger generations of viewers, many of whom are saddled with college and other debt, are always looking for ways to save money, such as Netflix and Amazon Prime streaming.

For several years now, we’ve heard from top pay TV executives that cord-cutting is a myth, or insignificant, and that younger viewers will return to traditional pay TV subscriptions when they form families and buy houses.

Well, it ain’t happening that way. Gen Ys are more comfortable streaming to tablets and computers, and value high-speed broadband more than “all you can eat” TV channel packages. The big pay TV providers have been whistling past the graveyard for some time now. Maybe they should start running…

Cord-cutting: Yet More Perspectives

On the heels of the Consumer Electronics Association’s recent study of cord-cutters comes yet more research on the phenomenon. But this one should be taken more seriously than the CEA’s efforts because it focuses on a specific demographic – Generation Y, or those born in or after 1979.

 

‘Gen Ys’ are a critical group to watch. Their viewing habits and decisions are of tremendous interest to advertisers and marketers, as they currently occupy the lion’s share of the coveted 18-35 demographic.

 

Gen Ys literally grew up with computers and embrace new electronic gadgets more quickly than Gen Xers and us ‘old fogies’ in the Baby Boomer group. They are ‘connected’ with smart phones, laptops, and tablets, and are just as likely to search out video content on the Internet as watch it through cable or satellite TV services.

 

The study, conducted by research firm Ideas and Solutions! of Los Angeles, states that pay TV service providers are at risk of losing this group due to increasing price sensitivity to subscription television. According to a story in MediaPost, 69% of so-called ‘on the fence’ Gen Y cable customers are classified as ‘at risk’ for dropping service because it’s just too expensive.

 

This group spends nearly half of their TV viewing time watching Netflix and Hulu. Of the survey group that still favors pay TV, Netflix and Hulu viewing dropped to about 25%.

 

The survey results should surprise no one who knows Gen Y well. I have two ‘connected’ Gen Ys in my family (ages 25 and 20), and they’re always looking for ways to cut down on expenses. Some Gen Ys have enormous college loans and low-paying jobs (or are unemployed, or temping), so pay TV is an expensive luxury when compared to rent, groceries, and gas for the car (if they own one!).

 

This group is also more interested in broadband access than pay TV channel packages, and that’s already having an impact on the established subscription TV business.  A story in today’s Wall Street Journal quotes Time Warner CEO Glenn Britt as saying that broadband is rapidly becoming the company’s ‘anchor product,’ and that “…people are telling us that if they were down to their last dollar, they’d drop broadband last.”

 

Britt went on to point out that TW’s broadband customer count is closing in on its residential video customer count (9.5M vs. 12.3M in Q1 ’11). Also, TW has another 2M broadband-only customers, many of which have dropped cable for satellite services. You can be sure Gen Ys are well represented in the totals for broadband service.

 

The result is that TW may shift to more of a ‘single play’ marketing effort, pushing broadband at the expense of subscription TV and voice over IP (VoIP). The latter service is a harder sell to Gen Ys, as they rely on their mobile phones and often have no wireline telephones in their apartments and homes.

 

In my experience, Gen Ys who are informed about or become aware of free, over-the-air digital TV are quite happy to watch it as a substitute for pay TV, mixing it with YouTube, Netflix, and Hulu. The question is; how many Gen Ys even know they can get free digital TV?

 

Maybe it’s time for a new outreach campaign by NAB, broadcast networks, and TV station ownership groups!

DEG Cranks Up The 3D Hype Machine

Last Tuesday, the Digital Entertainment Group, an advocacy group comprised of CE manufacturers and Hollywood content producers, released a study conducted by research firm SmithGeiger that claims 3D TV owners are overwhelmingly happy with their purchases.

This is hardly earth-shaking news, considering the source. The DEG’s job is to promote things like 3D and the Blu-ray optical disc format. Both are key parts of the revenue stream for TV manufacturers and movie studios.

The survey, which you can read here, does reveal many interesting ‘a-has!’ if you read carefully between the lines. Let’s take them in order.

Quote: “Of those who view programming in 3D, an overwhelming 88 percent rated the 3D picture quality positively, compared to 91 percent for their 2D picture quality.” Really? Why didn’t 3D picture quality rate as high as or higher than 2D picture quality? Wasn’t that a key consideration in buying a 3D TV in the first place?

Quote: “And, 24 percent of those who view 3D at home reported watching more television – in 2D and 3D – since purchasing their new 3D TV.” OK, can we break that down a bit further? How much more TV were they watching, on average? 10% more? 50%? 75%? We don’t know. And what’s the breakdown between increased 3D and 2D viewing? Again, we don’t know.

Here’s what I found much more interesting: 75% of the people in the DEG study who bought a new 3D TV did NOT report watching more 2D or 3D programming after their purchase, while 1% are actually watching less TV. Why? Because there wasn’t enough 3D programming to watch?

Does ‘watching more television’ include DVDs and Blu-ray movies? We just don’t have enough details here, so the ‘24% reported watching more TV’ claim is statistically meaningless without context. (And what about that 1% who are now watching less TV? Interesting…)

Quote: “Also, 85 percent of 3D TV owners surveyed would prefer to watch half, most, or all of their programs in 3D.” Looking at the tables actually provided by DEG, 14% said they’d watch most programs in 2D. But the group that said “it would be an even split” (using the report’s own wording) came to 23%, and a group that is stuck at 50-50 clearly does not favor either side – even though the DEG counted this group in the 85%.

I read the results this way: 62% of respondents clearly would watch everything or most programming in 3D, while 23% don’t lean either way and 14% prefer 2D. If you are trying to make a case that there is a clear preference for 3D, the numbers presented say that 37% of the sample group does not prefer to ‘watch most or all programming in 3D.’ While that still presents a 2:1 ratio favorable to 3D viewing, it is quite different from the 85% figure claimed by the DEG.

Quote: “Of the 3,100 3D TV owners surveyed, only a handful experienced any discomfort when using active shutter 3D glasses.” All right, I’m intrigued – what is “a handful?” Read further into the report and you will see that (a) 18% of respondents “never feel like I fully adjust to the glasses” while an additional 8% state that, “it takes several minutes for me to adjust to the glasses.” That is a total of 26% respondents who either have on-going problems with 3D glasses or take a long time to get used to 3D eyewear.

And the DEG survey numbers are in line with research done in human vision response by several universities and the American Optometrists Association. At the ADA/3D@Home conference in New York City a couple of months ago, the estimates I heard were that as much as 25% of the general population cannot see 3D correctly.

If the DEG thinks 26% is “a handful,” they are delusional.

Quote: “With an average of 2.38 pairs of glasses at home, it is clear that 3D TV owners are actively using their 3D TVs for viewing 3D.” If I had drawn that conclusion from the statistics presented in this survey, I would have gotten a big, fat “F” from my statistics professor at Syracuse University, not to mention my logic professor at Seton Hall!

Here’s what he would have said to me: Make sure you have all of the facts before you draw any conclusions! Facts such as: Anyone who bought a Samsung 3DTV in the past year got 2 pairs of glasses with it as part of a 3D starter kit. Did you buy an LG Infinia 3D TV bundle last fall? You got four pairs of glasses with it.

In fact, so many promotions bundled two or more pairs of glasses with the purchases of a 3D TV that the fact that the average home had 2.38 pairs doesn’t mean very much at all. Nor does it allow us to draw any definitive conclusions about how often viewers are using their TVs to watch 3D. All it means is that the average 3D TV owner has about 2 pairs of 3D glasses.

Quote: “More than 7 out of 10 of those surveyed use a Blu-ray 3D or 3D-capable player.” For what purpose, exactly? The survey question is incomplete, as it doesn’t ask specifically whether respondents “use a Blu-ray 3D or 3D-capable player” to watch 3D, a mix of 3D and 2D content, or mostly 2D content?

Here’s my question: How many of those Blu-ray players are mostly being used to watch Netflix streaming, and how often?

The accompanying chart shows that 87% use a cable or satellite set-top box, while 71% use a Blu-ray or other 3D-capable player (not a PlayStation 3), and 61% use a DVR or TiVo.

But the chart also says that 28% of respondents use a standard-definition DVD player. Why include that number, as it’s not relevant to 3D content playback? 34% of respondents have a Nintendo Wii (as I do), and it’s not a 3D delivery platform, either.

The survey goes on to mention that that “44 percent of 3D TV owners purchased their Blu-ray player bundle with their TV.” If these purchases really were 3D TV bundle deals, then 44% of 3D TV owners actually got a free Blu-ray player as part of their TV bundle. That was made quite clear in the advertising and marketing for various 3D TV bundle packages. Maybe the DEG isn’t quite clear on the meaning of the words “free” or “bundle?”

At the May 24 Connected TV and 3D event in New York City, DEG president Ron Sanders (also president of Warner Home Video) stated,  “The results of this landmark study clearly show that 3D TV owners are overwhelmingly happy with their 3D experience…this bodes well for the future of the Home 3D category.”

Really? My statistics professor would have been ROFL at hearing that. Here’s what my conclusions are.

(1) 75% of the survey respondents who bought a new 3D TV aren’t watching any more TV as a result of that purchase. That could mean they aren’t that enthusiastic about 3D, or that they just bought the TV as an upgrade and made sure it had 3D capability in it that they may or may not use. We don’t know enough to say – SmithGeiger didn’t ask.

(2) About two-thirds of the respondents want to watch most if not all of their programming in 3D. That is an interesting number and one which should be re-sampled a year from now.

(3) 26% of the respondents either cannot use 3D glasses at all or have measurable difficulty in adapting to 3D eyewear. That’s right in line with educated estimates and is a substantial impediment to widespread 3D TV adoption.

(4) The average number of pairs of 3D glasses in survey households is not substantially higher than the number of free glasses given away in 3D TV bundles. And we have NO idea how often they are being used, as SmithGeiger never bothered to ask.

(5) We know that 7 out of 10 respondents have Blu-ray players. We also know that many respondents have cable and satellite boxes. There are more of the latter than of the former. (Stop the presses!) What we DON’T know is how often those Blu-ray players and set-top boxes are being used to watch 3D content.

In fact, it’s mind-boggling that SmithGeiger didn’t ask any questions respondents about the number of hours per day, week, and month they actually spend watching 3D content!

Other fun tidbits:

(6) 78% of PlayStation 3 owners have upgraded their consoles for viewing 3D Blu-ray movies, and 76% of PS3 owners upgraded to play 3D games. Yet the following chart in the DEG study shows that only 7% of PS3 owners play 75 to 100% of their games in 3D, while 59% (by far the largest group) said that 25% or less of their game-playing is in 3D. There’s a disconnect here.

(7) 55% of 3D TV owners “would definitely” buy a 3D TV again. What – only half? I thought 88% of them loved their 3D TV picture quality! 25% of respondents said they “would probably” buy another 3D TV, while 14% said they “might or might not.” 7% said they “probably would not or definitely would not” buy a 3D TV again.

I interpret those numbers to mean that roughly half of the survey respondents are either (a) lukewarm about, (b) indifferent to, or (c) opposed to buying a 3D TV again.

That hardly constitutes a ringing endorsement for 3D TV, so it’s surprising that SmithGeiger didn’t ask the logical follow-up question: “Please list the reasons why you would buy or not buy a 3D TV again?”

Given the DEG’s position as industry cheerleader for 3D and Blu-ray, I’m not at all surprised in the way the survey results were stated. There is clearly a need for objective, in-depth analysis of why people have purchased 3D TVs, how they use them, and what their like and dislikes about 3D TV are.

But this survey and report doesn’t do the job. It’s clearly presented as more ‘spin’ that fact. There are too many holes in its methodology and flaws in its results  to be taken seriously as an objective analysis of the trends in 3D TV adoption rates and the factors that drive them.

James Cameron Says Half-Resolution 3D Is ‘Good Enough’ for the Home (Updated 4/28/11)

EDITOR’S NOTE: Some readers have taken exception with my description of James Cameron’s statements pertaining to the half-resolution side-by-side and top+bottom 3D formats. Cameron did not endorse passive 3D at NAB; his comments below were limited only to these two frame-compatible 3D delivery systems. Accordingly, I have changed the headline to more accurately reflect his statements.

 

At the NAB show a few weeks ago, James Cameron and Vince Pace announced a new company to assist cinematographers and videographers in the production of 3D movies and TV shows by developing, selling, and leasing 3D camera systems.

 

Cameron feels that in the not-too-distant future, all feature film and TV series production could be mastered in 3D with 2D versions extracted from the digital files. The company has already developed a system for simultaneous 3D/2D production at live events, known as Shadow. It was used during the recent CBS broadcast of the Masters golf tournament.

 

While none of this is earth-shattering news, something Cameron said later during the question and answer period bears mentioning. In response to a question about carrying 3D over conventional broadcast channels, Cameron replied by first describing the side-by-side and top+bottom frame-compatible 3D formats, both of which sacrifice resolution.

 

Side-by-side is used exclusively on 1080i 3D broadcasts, resulting in left eye and right eye images that are anamorphically squeezed into the same video frame. For side-by-side 3D, each image winds up with 960×1080 resolution, while top+bottom images are re-sized to 1280×360. The lost pixels must be interpolated when each frame is anamorphically stretched back to its original size, which is why neither 3D system looks particularly sharp when compared to 3D Blu-ray discs.

 

After Cameron correctly identified side-by-side and top+bottom as being the only practical systems right now for broadcast, he then went on to say, “…full HD 3D would require a doubling of bandwidth, but it’s not necessary right now…you only need full HD for each eye for cinema-sized displays. You don’t need it for home displays. That’s my opinion right now.”

 

You can watch Cameron’s response here – http://www.youtube.com/watch?v=OI8OmPdSfBw&NR=1

 

That comment opened quite a few eyes, particularly mine. Here is the most influential filmmaker of his time when it comes to advanced technology, saying that full HD isn’t needed in the home, and that half-resolution 3D is adequate for now.

 

Really?

 

What about frame-packed 3D Blu-ray discs? I’m sure the Digital Entertainment Group would like to hear Cameron’s perspective on that one. So would any manufacturer of active-shutter 3D TVs. So would any person who just purchased a 3D TV measuring 46 inches and larger.

 

What about passive 3D TVs, which throw away half the vertical resolution from any 3D content? Why would you want to watch less-than-full HD 3D movies and TV shows on one of these sets and just make the problem worse?

 

I would think that Cameron would be strongly advocating for full HD across the board, particularly since one company (Sisivel) already showed a system at NAB 2011 that would accommodate two full-resolution 1280×720 views in a standard 6 MHz channel using H.264 AVC coding. Here’s a picture of what it looks like:

And that is how you pack two full-resolution 1280x720p 3D images into one standard 6 Mhz broadcast...with the help of a little MPEG4 encoding, of course.

The Sisivel system keeps the left eye frame intact; that is the normal 2D view. The right eye frame is broken up into three smaller tiles that are stitched together in the decoder/receiver. It’s not a new trick and is relatively simple to pull off with today’s powerful software and hardware.

 

Granted, ATSC broadcasters do not use MPEG4 encoding. But that’s not the point: Sisivel tried a different approach and came up with a way to handle 720p 3D content without sacrificing any resolution, something that ought to be of interest to ESPN’s 3D content producers who could deliver this format right now over cable and DBS systems.

 

MPEG2 compression systems have also gotten a lot more efficient, perhaps 100% better than they were a decade ago. While it’s not feasible to put a pair of 1920x1080i full-frame signals into a 6 MHz channel, it can be done now with 720p, based on the demos I saw at NAB.

 

No one should ‘settle’ for lower quality 3D if they are simultaneously trying to get the format to take off. There are plenty of sharp technical people out there that are coming up with creative ways to pack multiple HD programs into standard TV channels without compromising image quality. Stay tuned!

Blockbuster And Dish Network: A Marriage Made In Bankruptcy Court

After a late night bidding session, Dish Network has emerged as the winning bidder for the assets of Blockbuster, the once-dominant player in movie rentals and sales. The winning bid was $228 million in cash, and the purchase should be wrapped up by July.

 

Why in the world would Dish want to buy a failed business model? Presumably, they’re really after the emerging kiosk and download revenue streams, and not the declining packaged media operations. But this purchase also gives Dish a new outlet to sell their pay TV services.

 

Even though Blockbuster has closed a third of its stores nationwide, that still gives Dish a good-sized footprint to try and capture more customers at retail.

 

Ergen beat out some pretty heavy hitters for BB, including Carl Icahn and an investor’s group led by Monarch Alternative Capital.

 

In a press release, Dish highlighted Blockbuster’s “more than 1,700 store locations,” as well as its “highly recognizable brand and multiple methods of delivery.” Dish is also angling to buy Hughes Communications’ Internet-by-satellite service for about $1.3 billion.