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DIRECTV Plans Online Services


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26 replies to this topic

#26 OFFLINE   Diana C

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Posted 02 December 2013 - 08:08 AM

While the networks and content providers are making lots of money with the current model, the cost to the consumer is reaching a point where the current model will soon be unsustainable. The reason so many young people are choosing to live without a multi-channel service is that it is too expensive for the amount of use they get from it. With options like Hulu, Netflix and, increasingly, video games, young people are getting their entertainment elsewhere.

With a gradually shrinking pool of cable and satellite subscribers the content providers are going to find it increasingly difficult to preserve their current revenue stream, never mind growing it. I picked $50 per month as the sweet spot for monthly cost. Less than that, and the offering will be fractured and incomplete, like the services offered today. More than that, and you are back in the situation of pricing yourself out of the market.

The lack of bandwidth is a spurious problem. As internet demand has grown, the capacity as grown with it. If a streaming service starts to overload the internet, the capacity will be increased. It has happened constantly ever since the internet got started over 20 years ago with dial up and SLIP connections. Sure, it will be a while before sufficient bandwidth is available in rural areas, but it will happen...and probably a lot sooner than anyone thinks. A streaming service can do quite well even if their market is restricted to users with 5 megabit download speeds or more.

I used to be on the other side of this debate, but I have become convinced that sooner or later somebody will put together a service that really makes cord cutting viable. It is inevitable. Just as a musician or an author can reach the public directly via on-line publication, eventually video producers will realize that they can make as much money, and have greater control, by taking their productions directly to the public. It is already happening on a very small scale. It won't happen tomorrow, but in the long run the system we know today, with multi-channel service operators controlling distribution, and broadcast channels controlling what gets produced and offered, will collapse - just like the big record company model and the big publishing house model have collapsed before it.

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#27 OFFLINE   slice1900

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Posted 02 December 2013 - 03:21 PM

I'm not saying it will never happen, just that it isn't practical now. Maybe in five years it will begin to be possible. I believe before that, it'll be done by big ISPs that don't have their own TV offerings, like Centurylink. The ISP can receive content via satellite like cable companies do, and distributed to customers via their internal network where they can manage bandwidth. Potentially they could provide a much wider array of channels in higher quality than any other provider.

 

I have Centurylink, and if they offered TV service in this manner I'd give it a try for a month (while keeping my cable) and consider switching if I could get live sports without any problems and save money. It isn't clear that this solution could or should cost any less than cable or satellite, however. It would give Centurylink a competitive TV/internet package that they currently lack, so it would be good for them. They have a deal to resell Directv right now, but having a partner limits their ability to offer the deals they could if they provided TV themselves.


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