Television history was made this week on two opposing sides of the television viewing spectrum. First, Comcast, the nation’s largest cable company won government approval to buy NBC Universal from GE, making it the first cable company to purchase a major television network. Second, with slightly less fanfare, comes word of another first. A full-blown 24/7 cable channel is now available directly to consumers without having to be part of a larger package.
What this means, according to All Things Digital writer Jim Louderback, is that cable and satellite television no longer have a duopoly on how we can watch television. The channel used in this milestone is WealthTV, while not one of the more popular channels, it is nonetheless seen as major break-through that has the potential to change of the current television business model.
As Louderback describes it, for $3 a month, you can watch WealthTV via a Roku set-top box and get exactly what any other cable or satellite customer receives in their multi-channel packages that they pay ten to 20 to 30 times more for. Granted, Louderback admits that not that many people are going to run out and sign up for WealthTV, especially at $3 a month. The point he’s trying to make is that it doesn’t matter if the channel is any good or not, the takeaway here is that you can and he believes all of us soon will watch television this way.
He may have a point here. I don’t know about you, but out of the 1,000 plus channels I pay over $100 for each month in a gold package that includes premium channels, I watch maybe 10. That’s 10 channels for $100. If I could pay $30 a month for those ten, I’d be a happy camper.
Louderback predicts that once this catches on, other, more popular networks, will transition to the direct to customer model and bypass those middlemen that take a disproportionate part of every TV dollar. One stumbling block here is that we may have to buy one of those Roku boxes. That or televisions and Blu-ray players that have an internet connection will give us the same capability.
Right now Louderback claims you need a Roku box but then admits his company, Revision3, is the No. 1 video channel on Roku. So this could also work on other devices as well similar to the Roku box that supports both 24/7 streamed channels and the payment and authorization mechanism to allow other paid services into the system.
Garden wall
Louderback calls this “the first crack in the walled garden” and says it's not going to be the last. He points out that for the last five years the internet video industry has focused on the on-demand world. But why not create linear, continuous channels? Netflix, Hulu, and Crackle are already doing this, to name a few. Louderback says he expects to see the more marginal cable channels move to this model first, and when it attracts a large enough audience, the popular channels will follow.
He and I both would like to see a Chinese menu-style package on Roku, Boxee or some of the other device that charges you $20 or $30 a month and lets you build your own lineup of channels and shows. Afterall, isn’t that really what we want. The idea of having access to 1,000 channels is not as satisfying as the reality. We tried that, it cost us a bundle, and now let’s get back to the low cost, easy to choose, method of watching the channels we love. If something new comes along, you can always add it.
It’s interesting that when the federal regulators approved Comcast's $30 billion acquisition of NBC Universal, they also imposed a number of conditions on everything from competition with rivals to the price of Internet service for poor families out of concern that the firm's vast sweep could harm consumers. This marks the first time the government has gotten involved with online video, and imposing conditions to ensure that Comcast provide some Internet versions of NBC shows and movies to Web services such as YouTube, Hulu and Apple TV is a huge step.
Christine Varney, head of antitrust at the Justice Department, said the settlement “will not chill the nascent competition posed by online competitors - competitors that have the potential to reshape the marketplace by offering innovative online services.”
Amen.