Is Cable TV's Rip-off Tyranny Coming to an End?
Disgusted with high costs, poor service, and the abuse they get from call centers, some 4 million U.S. cable subscribers have cut the cord in the past few years. Many of them are opting for Internet television devices such as Apple TV, Roku, Fire TV, and Chromecast used to stream on-demand video services, including Netflix, Amazon Prime and Hulu Plus.
But cord cutters haven’t exactly been having their cake and keeping it. They’ve had to give up popular basic cable channels such as AMC, USA and Comedy Central. Live sports and news from networks such as ESPN and CNN are also sacrificed. And fans of popular premium channel series such as “Homeland,” “The Affair” and “Game of Thrones” might have to wait months or even years to see their favorite shows on DVD or download them with services such as iTunes. And while digital antennas might bring dozens of high-definition broadcast channels to homes, factors such as environmental conditions, physical obstructions and distance to broadcast towers might not make them a good choice for many television owners.
But all of this is changing in 2015. A few months back, CBS quietly rolled out CBSN, a 24-hour news network that streams over the Internet. Soon after, the Eye Network rolled out CBS All Access, a $6 service that streams the local affiliate station to a personal computer or mobile device. Hot on its heels, both HBO and Showtime announced plans to create standalone services not tied to cable subscriptions.
The game changer, however, might be Dish TV’s new Sling TV service, which launched last week. The $20 service has no startup fees or long-term contracts, and it allows subscribers to watch cable channels and some video-on-demand on their mobile devices, computers and televisions. And unlike other Internet-based TV services, it has packages for live streaming content from ESPN, ESPN2 and CNN. Other channels include TNT, TBS, Food Network, HGTV, Travel Channel, Adult Swim, Cartoon Network, ABC Family, Disney Channel, El Ray and Galavision.
Soon after the service launched, Sling TV sweetened the deal, offering the cable’s hottest non-premium channel, AMC, to the mix along with its sister networks BBC America and IFC. So fans of “Mad Men,” “Portlandia,” “Doctor Who,” “Better Call Saul,” and “The Walking Dead” don’t need the cable tether to watch those shows. It’s not clear yet whether this new trio of channels will be part of Sling TV’s basic $20 service or a premium add-on.
The sudden presence of Sling TV has put the net neutrality debate back on the front burner. Since broadband Internet is needed to use the service, and most of these Internet providers are the same corporations that market cable television, Sling TV could hit the cable operators hard. And Sling TV is precisely the type of service the cable companies had feared and why they rail against the very concept of net neutrality.
Yet critics have mixed feelings about Sling TV. On one hand, they’re happy that Ã la carte TV is finally here and much less expensive than cable. On the other hand, without DVR or pausing capability, they say Sling TV doesn’t jibe with evolving television viewing habits.
While it might be a complicated patchwork, television viewers can now piece together broadcast packages that suit their viewing habits, without having to rely on the cable omnibus. Still, the addition of Sling TV is not a death blow to the unpopular cable industry, as the prices of those cheap Internet TV products can add up quickly, and even surpass what one might pay for a comparable cable package. Moreover, when you remove cable television from your provider’s “double play” or “triple play” packages, the providers have a nasty habit of raising the price of Internet access. Cable customers who have ditched the TV portion of the service tell us their Internet service costs have gone up to $20 more.
So, if you live in an area with just one broadband provider, as many of us do, you might not have the power to negotiate that price down.
FCC to the Rescue?
Earlier this month, the stock prices for Comcast and Time Warner Cable, the two largest cable television providers, stopped tracking each other. While this might not seem to be such big news, it indicates that the possible merger of the two largest cable television providers in the U.S. is on the rocks. Their stocks had moved in tandem since the merger was proposed a year ago.
Comcast has suffered through a spate of bad publicity in the last year over its poor treatment of customers. Survey after survey shows that Americans wholeheartedly oppose the merger of the two companies. Industry analysts say that Comcast’s customer service debacles give the political cover for the FCC to do the right thing and deny the merger. Also, now that the FCC has redefined broadband Internet to include only services of 25 Mbps or more, it redefines Comcast as having about 56% of the U.S. broadband market before the merger.
But some analysts see even better news on the horizon; they see the redefinition of broadband and the possible killing of the Comcast/Time Warner merger to be the start of a string of consumer-friendly policies by the FCC and Department of Justice. These include striking down state laws that restrict municipalities from competing against corporate Internet broadband networks and redefining broadband Internet service as a public utility, which would ensure net neutrality.
What this means for services like Sling TV, Netflix and Hulu Plus is that Internet service providers like Comcast, Verizon FiOS and Time Warner can’t block or slow access to online content, even if it competes with one of their business models.
When and if net neutrality protections come (the cable industry says they’ll fight them in the courts), services like Sling TV could indeed redefine how we access television programming. But for now, it’s only a taste of what this media’s future might become.