1. Eventually Cable will go all OTT (over the top).

2. Eventually,  some day, Cable will go a la carte.

Here are some of the top stories supporting these points:

Netflix adding their own content

Netflix spent $100M on House of Cards and has already earned it back in new subscribers.  Industry watchers know the challenge and threat for Netflix has

courtesy WayTru on Flickr

been getting access to  content.  If they don’t own it they cant stop Comcast/NBC or Starz from pulling the rug out.  Well now Netflix has shown they  have a strategy to counter that. House of Cards is OTT and it’s free with your Netflix subscription.

Verizon considering OTT

At this year’s NAB show the news broke that Verizon would actually consider a la carte pricing for its FIOS service. Verizon has over 4M TV service subscribers and competes with Comcast, TWC etc. This move would likely spur similar action from competitors.

Google Fiber scaring the Bejesus out of traditional Cable operators

If you aren’t living in Kansas City, Austin, or Provo UT you might not realize that Google has entered the cable operator business.  The scary part for legacy MSO’s is that Google offers either a FULL Gigabit (up and down) of internet bandwidth, or believe it or not, a FREE low speed plan. (More on this in a later post).  A Gigabit of bandwidth is enough to carry a couple hundred HDTV signals (MPEG 2 type). Yeah,  that’s enough to make OTT run without buffering issues.

Google (YouTube) adding pay channels

This  news arrived courtesy of my friend Len over at The Beer’s on COMAST! with the comment “Did that just turn every modern BD player and smart TV into a Roku competitor?” So Google now owns a  fiber to the home “cable” system, and offers new “paid channels”.  I just wonder if they’ll combine these features somehow.

Century Link considering offering a full Gb too

So perhaps Century Link is responding to Google Fiber with the announcement they plan to offer a full  Gigabit of bandwidth in this  fiber to the home project in Omaha. Which operator will be next? (Keep your eyes on TWC in KC and Austin).

Aereo still going strong

Aereo, the startup that offers a mini line-up strictly OTT, has survived several court challenges from the big boys.  If they can’t be stopped we will likely see some similar competing formats from others . Netflix could probably replicate Aereo in no time.

Television Consumer Freedom Act

This bill introduced recently by John McCain, would force networks to un-bundle their offerings to Cable operators and in theory lead to an a la carte system.  I don’t expect to see something this big pass through congress without a huge fight, but it will be fun to watch.

There we have it. All signs leading to an OTT/a la carte world. Let me know your thoughts on any others in the comments below.

Now comes along FOX who says they’re not going to stand around and watch Aereo “steal” the signal. No, FOX is threatening to turn off the over the air broadcast, in the NYC area at least.

Would FOX actually do that? The downside is wiping out reception for viewers that legitimately receive the signal with a roof-top antenna. And if CBS NBC etc follow suit it would mean the end of an era for broadcast TV.

On a technical sidebar, I wonder if the broadcast engineers over at FOX couldn’t be more clever, i.e. surgical. If there exists a mini-antenna matrix on a single building there may be a  way to create a “hole” in the RF signal strength at that point. Maybe.

In any case if Aereo’s success leads to the elimination of over the air broadcasts, Aereo turns out not to be a cord cutters friend so much as a “cable operator lite”. For $12/month or $80/year you get about 31 channels right now in NYC, basically everything you can pull off the air.

Have any of you tried Aereo? What do you think of the business model and it’s impact on cord cutting? Let me know in the comments below.

Screen capture from Y! “Burning Love”

None the less I see that both Yahoo and Google (aka YouTube) are giving it a go. And I wonder just how many people regularly watch such content.

Take a look at  one of Yahoo’s offerings on Yahoo Screen. In what is a spoof of the oh so familiar reality dating show, Burning Love follows Julie’s attempt to select the right guy. Clicking on one of the episodes I’m first greeted by a 30 second ad for Sleep Number beds before the show starts. One nice thing about watching on your laptop: you can be checking your email, or another web page during commercials. I find the show mildly entertaining but not compelling enough to be a regular viewer. Episode 14 generates  over 80 comments by viewers, perhaps one indicator of moderate viewership.

Yahoo offers a few other shows of what appear to be Yahoo original content. Most of them seem to tend toward the comedy/satire genre.

Compared to Yahoo,  YouTube originals offers a lot more content. I count 22 categories e.g. Comedy and Sports with each of these offering sub-categories. Clearly Google has invested more than Yahoo has, reportedly $100 million.

Screen capture from YouTube Originals GolfLink

Recently I ranted about how the Golf  Channel is not really available as OTT content. YouTube originals has a channel called GolfLink. Again I get commercials (checking my email again) before content starts. But these are shorter clips on the order of a few minutes, so the commercial to content ratio might be a lot bigger.

Thanks to Google’s obsession with data, I can see the GolfLink channel has over 27,000 subscribers. Not very many but then golf is kind of a specialty sport. With a little work I could probably figure out which of these channels is getting the most viewers.

What YouTube and to some extent Yahoo illustrate, is the ease at which an a la carte delivery system could be created. In fact Google which is already making their own set top box, and functioning as a cable operator in Kansas City, has almost everything they need to reinvent the system.YouTube originals and Yahoo Screen, show what an a la carte system looks like minus a few key factors: live sports content and premium/expensively produced programs. Will these transition into the new a la carte model?  Possibly. For that to happen the content bundles currently controlled by cable operators will have to break.

Let me know in the comments if you watch any of this streaming content and your opinion of where we’re headed.

The internet has been one of the biggest forces of such disintermediation. Some good examples include:

In all of the above cases either information, or content is found quicker and easier using a browser than with the traditional method. So who are the hold-outs? I can think of two major cases:

Do you see the similarity? Now excuse me while I digress on a side-rant about the high cost of a college education today.

Colleges and universities assemble course content and deliver it on their terms. You want a degree? Sign up with USC at $50,000 per year. But wait. Isn’t 90% of this just a large room with desks and chairs and some guy talking up front? Now imagine taking that same class and webcasting it. Hundreds or even thousands of students could take the class from their home. The cost per student per class would plummet. If this became the accepted way to earn a college degree, the entire industry of over-priced education might be wiped out.

So let’s get back on topic now and talk about cable TV. In the US we have dozens of cable and satellite television operators all assembling channel line-ups, delivering set top boxes, sending out bills, and employing sales people, administrators, technicians and executives. But do we need all this duplication? Not really. All we really need is a “dumb” internet pipe to our house, and the ability to assemble our own channel line up, a la carte, from a list of things like Fox.com, ESPN.com, etc etc.  5Mb/s and a Roku would do the trick.

In either of the above I do worry about the economic ramifications. A lot of well paid jobs would vanish. Perhaps  that is why the university model is holding on. What would you do with all those professors and teachers? Same thing for cable which employs thousands. None the less I do think both models will eventually break. Let me know your thoughts in the comments below.

Comcast Center Paul J Everett Flickr

What does this data mean? I’ll speculate. Someone who signs up for cable modem service only wants internet, and either doesn’t want a video channel line-up or gets it from somewhere else. Where? Well it seems unlikely that this new cable modem customer also has Dish or DirecTV (although the DirecTV combo might make sense for a hard core NFL fan). What is more likely is that the new cable modem customer has decided he or she does not want a video channel plan. Cord cutters and cord nevers, are slowly having an impact.

Another interesting set of numbers (table below) is high speed internet vs video customers in 2011 vs 2012.

Notice that as of 2012 these numbers are moving in opposite directions and if this trend continues soon the number of internet customers will exceed video customers .

Comcast will become more of  an ISP (internet service provider) than  a “cable company”.

Actually the highest growth area for Comcast (and other US cable operators) right now is neither video nor residential internet.  The fastest growing area in cable is “business services”.  These are typically Ethernet services to local businesses of 10Mb up to 1Gb.  This puts Comcast in direct competition with AT&T and other traditional telco type providers.

So if this whole traditional cable operator model should someday go “poof”, and be replaced by one big a la carte OTT (aka iTunes) deal you need not fret about Comcast. They have a game plan.

The official website for Grammy’s content is http://www.grammy.com/live .

Note that these supplemental streams are live, and have the same spoiler effect as social media and internet news. If you’re watching on the west coast you’ll get the information 3 hours earlier online. At this moment (6:39pm PST)  the  show hasn’t started, yet I can say congratulations  Kelly Clarkson on your win. Of course the irony is that we in California are in the same time zone as the actual live event.  But the network will delay it.

Why can the Superbowl be streamed, but not the Grammy’s nor the Oscars?  I have my theories as discussed in this post on the 64th  Emmy Awards and this one about the 2012 Superbowl. If you have your own ideas please share in the comments.

screen capture from “Red Carpet” stream

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I haven’t worried too much about the cord cutting angle on this year’s Superbowl. It doesn’t take much work to find out that CBS will offer a live stream this year. And for many more details about Supbowl 2013 streams I defer to this excellent review by Janko at Gigaom.

And I really don’t care that much about Ravens or 49ers except that being on the West Coast it would be nice  to see a team from our side of the country win.

But what actually I find more interesting is the hoopla and big money that surrounds the Superowl and yes, whether or not Beyonce is willing and capable of performing the her half time show live – without the benefit of lip syncing. Well according to recent reports, despite the recent kerfuffle about her inaugural performance, Beyonce says she  will not be lip  syncing during the half time show.

Actually that’s not such a big deal. Why? Because the half time show is typically a muddy noisy mash-up with so many people on a movable stage that little slips get lost in the sauce. I didn’t even  know about Janet Jackson’s famous wardrobe failure in 2004  until I heard about it after the game.

What really takes guts – and talent – is to sing the national anthem live. In that couple of minutes you have the world listening to basically just your voice. This year we have Alicia Keys kicking off so to speak and my bet is that this performance is going to be lip synced.  Unfortunately I don’t see one of those novelty bets for that or I’d be putting some money down.  It will be easy to tell. Live performances seldom sound flawless. Lip synced ones almost always do.

Take this most famous performance by Whitney Houston in 1991 (embedded below). It’s perfect.  If Alicia sounds that impeccable she’ll be lip syncing. If she stutters a bit, drifts just a little off key, then that’s live, and that’s really what I’d like to see. Enjoy the game.

According to Wikipedia, Blockbuster opened in 1985, peaked at 9000 stores  in 2004, and filed for bankruptcy in 2010.

Distressed Blockbuster Video Sign: trebomb on flickr

Two things killed Blockbuster. One was Netflix. Netflix started taking off after 2002. And that was when you had to fill up your rental queue and wait two or three  days for the DVD by mail. No  Netflix instant!

The other  was Blockbuster’s poor customer service model. I like many, were annoyed that my $2.99 rental would end up costing several times more because of late fees. The late fee rate was much higher then the rental rate giving a feeling of being gouged.  Screwing  your customers is seldom a good way to retain them – unless you are the only game in town.

This confluence of events – Blockbuster’s late fees, and Netflix’ new model is what I believed killed off Blockbuster. Do you remember Netflix advertising that there was never a late fee? So it was a flat rate of $20 per month vs who knows what at Blockbuster.  After Netflix added online streaming, Blockbuster’s prospects became even gloomier.

Blockbuster had the titles and the customer base but lost out to Netflix big time. Had the company been managed better perhaps all our Roku boxes would be set to the Blockbuster channel.

Just out of curiosity I checked, and  yes you can stream movies from Blockbuster.  But there are some limitations. “Blockbuster On Demand” works on your PC or mobile device, some smart TV’s and some Blu-ray devices. Conspicuously absent is any mention of set tops such as the Roku or Boxee.

Well all good things must come to an end. Sooner than later when your’re really not that good.

Academy Award Winner by Dave_B_ on Flickr

So who is this a problem for anyway? Last year the  complaints I heard were from two categories:

1. Rural households without access to an ABC broadcast.

2. Americans living abroad wanting to tune in.

In either of these cases the viewer has a broadband connection but no ABC connection. So what can you do?

Well my first thought was maybe the new Roku TWC partnership would at least enable someone willing to actually pay for ABC to get it, but after reading through some of the comments over at DSLreports I realized that’s not gonna happen.

Then I thought maybe a VPN set-up might work, similar to the way we watched the BBC version of the  2012 Olympics.  But no, that only worked because BBC live streamed it.

Damned it this isn’t feeling just like the live sports situation. Sure you could have a friend DVR it for you, or even use a torrent but what good is that? The event loses all it’s mojo after real-time.

Unfortunately I know of NO LEGAL WAY TO WATCH ABC LIVE FROM OVERSEAS.  ABC has given you little choice but to scan around the net for some sketchy streaming site.  Caution: if you Google something like 2013 Oscars streaming you’ll be overwhelmed with garbage sites filled with ads and malware. At the present my old standby sports sites are not streaming anything but sports. Check back between now and the broadcast and I’ll update below with any streams that seem to work. Add comments if you have info.

Possible streaming sites for ABC 2013 Oscars:

1.  An article by MIT Technology Review points out that Aereo may be streaming the Oscars.

2. First Row shows ABC links on Saturday, but no guarantee these will be working Sunday with the Oscars.

3. This looks legitimate. Canada’s CTV site says they will live stream the Oscars. Will we need a proxy to access it?

Amazon

Proud maker of the Kindle Fire. Amazon has what it takes to rival Netflix and Apple.  A must see.

• Amazon: Booth: Venetian, Lvl 3 - Toscana 3710

CES booth babes: Courtesy matze_ott flickr

 Apple 

Not so surprisingly Apple and Apple TV will NOT be at CES. Apple has  done their own events for years. We’ll miss the legendary Steve Jobs at the next one.

Aereo

Another no show. With all the publicity Aereo received last year maybe they don’t need this.

UPDATE: Perhaps they had no booth but they did take advantage of CES to drop a bombshell, see below.

Boxee

Hello Boxee? You launched in Walmart this year but didn’t have time to attend I guess. Perhaps the problems with Boxee returns at Walmart mean there is some redesign in the works.

Intel

A must see. Intel is rumored to have some knew kind of break through set top box that will make Intel a “Virtual Cable MSO”.

               Intel: Booth LVCC, Central Hall - 7252

 TV Manufacturers

Expect a big splash form these two. Maybe get some good tchotchkes and talk to a couple of the booth babes.  If you can find one of their product engineers ask for a demo of their latest smart TV features.  Is it really better than adding a Roku to a dumb TV?

• LG Electronics Mobile DTV: LVCC, Central Hall - 14340

• Samsung Electronics: LVCC, Central Hall - 12004, 12527

Roku

Yes our favorite OTT box will be here. Perhaps not on the floor but at three separate hospitality suites in the LV Hilton.  Pas the shrimp and I’ll take a Heineken please?

• Roku: LVH Hospitality, - Suite 2569, Suite 2876, Suite 2880

 Simple.TV

Yet another surprising no show considering how Simple.TV was big news at CES 2012. I know Simple.TV has some bugs to work out. Perhaps we’ll see them again in 2014.

And Much More

Trade shows can be challenging to navigate, especially whey there are thousands of exhibitors. But for a start I’d check out a list of those that fall into Roku’s category of

Category Search “Entertainment/Content > Entertainment/Content”

Good luck, have fun and let us  know what you think we left out in the comments below.

PS: I’ll post updates to any particularly cord cutter related news (or in some cases the “anti-cord cutter news” below:

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Updates:

Time Warner Cable to stream 300 cable networks through Roku devices

Aereo is Expanding to 22 New Cities This Spring