We here at ThirdPipe have long held the conviction that paywalls for content on small value product really are wrong unless you are providing the service as part of a larger offering. A good example would be the Apple Store iTunes as a conjunction with the Nano MP3 player. Or the paywall is a convenience factor to an already high value information source. Say Dunn and Bradstreet where all you have to do is register if you already subscribe to the service.

But to view a paywall as a new income stream? Bonkers man. Ain’t gonna fly. NYT found that out two years ago. Now NewsDay has found out the same thing –

So, three months later, how many people have signed up to pay $5 a week, or $260 a year, to get unfettered access to newsday.com?

The answer: 35 people. As in fewer than three dozen. As in a decent-sized elementary-school class.

That astoundingly low figure was revealed in a newsroom-wide meeting last week by publisher Terry Jimenez when a reporter asked how many people had signed up for the site. Mr. Jimenez didn’t know the number off the top of his head, so he asked a deputy sitting near him. He replied 35.

Now to be fair one has to consider the context of that number. NewsDay also owns the local cable franchise as well. Plus anybody who subscribes for the pulp get the online subscription free as well. So a large swath of the potentials already have access for free. But what it does show is that a paywall is a barrier unless one is linking it to something larger. There is too much free content out there to justify paying for it. Fact one concept that none of the papers yet fathomed is that they are third person before the reader gets to it. Customers are cutting out the middleman and reading the press releases directly now, removing the filter and hence the need for the paper itself!

We have said this before. If a paper wants to make a go of digital news content they need to follow an old Telco prescription. Offer the handset for ‘free’ and pay for it and your talk time as a bundle. In the papers case, you offer the Kindle II for free bundled with a 2 year subscription to the paper at $9.95 a month. Then you make sure the digital daily is on the machine everyday. Don’t require the reader to futz with a download, it has to be a push.

Its a multimillion dollar idea offered free.

Linky.

In a groundbreaking deal for online movie rentals, Netflix and Warner Bros. Home Entertainment announced Wednesday that they have expanded their licensing arrangement for streaming movies, and Netflix now has licensing rights to more of the studio’s catalog content. In exchange, Netflix agreed to do something it has never done before. The movie-by-mail service won’t offer new releases from the studio on DVD or Blu-ray discs until 28 days after they go on sale. (Cnet)

Out of all the online distribution channels, Hollywierd seems the least annoyed by streamed content.  On the physical media side they have been increasingly upset DVD rentals - especially on the release date. While it’s debatable how many consumers would actually buy instead of rent if the rental date was pushed back a month or so, the studio suits are convinced the loss is huge.

Then there’s the realities of Netflix’s DVD distribution. If you are mostly interested in getting the  newest  release on or near to its  release date, Netflix has a limited number of DVD’s available and the waiting lists are often long.  For the average Netflix customer, a month wait for a  hot new DVD will not be much of a change from the way things have worked in the past.

For online streaming distribution, this could be a mnoster deal for both Warner and Netflix.  It gives Netflix a bigger library and will certainly attract more customers to the service. It could also put new revenue on Warner’s bottom line with no new investment.This is also a blow to the Cable operators as they lose control of more content.

Netflix subscribers who stream films over the Web will soon be getting access to a greater number of movies from Warner Bros.

What’s in a name? Quite a bit if you are Time Warner Cable. It’s not just an extension of its largely unpopular former parent’s name. It is also arguably the most hated brand in the cable business.

.. the company has launched “Project Mercury” — an effort to rename itself sometime during 2010. Given the spinoff the rebranding is an obvious move, though it may also help distance the company from last year’s public relations implosion — when the company attempted to impose low usage caps and unreasonably high overage fees on their customers.  (DSL Reports)

Now I don’t get the big bucks the cable guys’ suits do to come up with brilliant ideas, but I think this one could benefit the company. That is if the new name includes new attitude and actions. The old corporate overseer could be blamed for the prior poor service and gaffes giving something of a clean slate to the new name. But ….. if rebranding is just a new clown suit on same old monster, TWC may as well save its money. Remember when SBC rebranded to the then respected AT&T name without any change in the way it did business?

Back in the dark ages of video, content owners could only get access to viewers through broadcasters and cable operators. With pervasive broadband, mass distribution is available to anyone with the ability to buy bandwidth, and the wholesale cost of bandwidth continues to fall with each passing day.

Time Warner’s poker tell came when it ditched its cable company. Sure the cable company controls the last mile for access, but the company had grossly overpaid based on obsolete subscriber TV models. All the company really needs to reach viewers via broadband is access to a content delivery provider, who can scale immediately to fit its needs. No investment in infrastructure required. And with broadband distribution it can reach a larger cusotmer base - with no additonal up front investment.

Comcast has signaled that it too has seen the future in acquiring majority stake in NBC Universal. It seems that the Comcastic crew knows that time’s up for doing business with bundles of channels delivered to proprietary boxes.

Comcast Corp. is buying control of NBC Universal from GE largely because Comcast wants to own more movies and TV shows. The point is to give it a position of strength if fewer people sign up for its cable TV services and watch more video online.

It’s
understandable why the strategy might seem dubious: Another media
company, Time Warner Inc., just gave up on that and spun off its cable
TV division.

Yet while Comcast seems to be taking a different approach — marrying entertainment content with the largest cable TV system in the nation — it and Time Warner have arrived at the same conclusion: The future is in content, and the pipes that carry it matter less.

That’s why Time Warner could jettison the business of selling subscription TV service and focus on the Warner Bros. movie studio, cable channels such as CNN and HBO and magazines such as People and Sports Illustrated. (Yahoo)

Or should I say the channel selector? You still might want to keep the cable for data transport — to get TV. –

So say you skip the Boxee Box and go with the Zino. One of the frustrations of internet TV is finding what you want, when you want it. This show is only on Hulu, that show is only on the network’s portal, and you’re on the web…what do you care which network produced what show? Can’t someone else keep track of that?

Well another launch yesterday was Clicker, a programming guide for internet TV. What’s nice about Clicker is that it only offers full episodes of content, so you won’t get dozens of hits that lead to 15 second clips. Clicker catalogs content from both free and paid sources, such as Netflix Instant Streaming and Amazon Video-on-Demand, but it marks paid content clearly so you can skip over it if you wish. You can set up Playlists, and Clicker also offers some social features, such as Trends and connecting your Clicker account to your Facebook account.

With each passing month it seems like cutting the cable cord becomes a more viable alternative, but yesterday in particular seemed to be a Big Day for internet TV (most of these launches were probably due to the NewTeeVee event that took place in San Francisco, CA). So are you ready to ditch cable? Or have you already? Please share your thoughts in the comments!

That is from IT World. Not exactly a CES oriented publication.

But the question is, is next year, THE year more users cut out the channel side of the cable connection? It could be if things remain stable as in near free. Or that Hulu does go to a paid service that’s like $20/year and includes premium offerings at that price. Sadly for the TWC and Comcast’s of the world, whether that happens or not is out of their hands.

The deep question is could Comcast survive as a data only transport provider?

Comcast’s TV Everywhere has great potential, but short sighted marketing works overtime to make it miss the mark. Available only to Comcast cable subscribers, and with a download cap if you get your video on Comcast’s system, it seems to be a defensive measure to slow the exodus of pay TV subscribers. It’s a sad irony that the service could bring in a new customers if it was also offered as a stand alone product. As an a la carte service available to anyone regardless of broadband provider it would surely have been a hit.

If you think regional monopoly communication behemoths like AT&T and Verizon are a good thing, you’ll love the new Comcast. With the newly minted FCC blessing unrestrained growth of the MSO giant, there’s little to stop Cablezilla from gobbling up smaller operators and growing its coax monopoly footprint.  Will this be good for consumers? Don’t bet on it. While Comcast has been upgrading its network to deliver faster speeds to some end users, it’s also been leading the industry in pushing usage caps and surcharges. With an ongoing enlargement of a Cabliezilla monoculture, we’ll see this being pushed into more markets where competition is sparse. The need for cash to fund system buy outs combined with no competition from the telcos will pretty much guarantee all Comcast customers will be paying more.

Comcast issued their third quarter earnings this morning, which indicate that while growth has slowed slightly at the cable giant, the money continues to roll in thanks to a combination of rate hikes and customers adding additional services. The company recorded a quarterly profit of $944 million, up from $771 million one year earlier. The company added 361,000 net broadband subscribers and 375,000 VoIP net customers, lower than predicted growth on both fronts but still respectable in the eyes of Wall Street investors.

Respectable might be an understatement, given Comcast’s quarterly broadband subscriber additions were more than double the combined total of Qwest, AT&T and Verizon on the quarter. (DSL Reports)

It had taken the better part of a decade, but Reed Hastings was finally ready to unveil the device he thought would upend the entertainment industry. The gadget looked as unassuming as the original iPod—a sleek black box, about the size of a paperback novel, with a few jacks in back—and Hastings, CEO of Netflix, believed its impact would be just as massive. Called the Netflix Player, it would allow most of his company’s regular DVD-by-mail subscribers to stream unlimited movies and TV shows from Netflix’s library directly to their television—at no extra charge.

The potential was enormous: Although Netflix initially could offer only about 10,000 titles, Hastings planned to one day deliver the entire recorded output of Hollywood, instantly and in high definition, to any screen, anywhere. Like many tech romantics, he had harbored visions of using the Internet to rout around cable companies and network programmers for years. Even back when he formed Netflix in 1997, Hastings predicted a day when he would deliver video over the Net rather than through the mail. (There was a reason he called the company Netflix and not, say, DVDs by Mail.) Now, in mid-December 2007, the launch of the player was just weeks away. Promotional ads were being shot, and internal beta testers were thrilled.

Its an interesting read on Reed Hastings as well as the background on NetFlix and Roku. Worth your time.

Well there are discussions going on that YouTube will be offering full length pay-to-view from some of the major studios. Keep in mind that BlockBuster, NetFlix provide subscription, and we have RedBox doing the $1 thing as an impulse buy at the grocery store. So what is a Cable operator to do? –

Google Inc.’s YouTube is in discussions with major movie studios about streaming movies on a rental basis, a test of whether the online video giant can persuade its millions of users to pay for premium content.

For Hollywood, the move could represent a bold attempt to offset its dwindling DVD sales with online revenue.

YouTube is talking to Lions Gate Entertainment Corp., Sony Corp., Metro-Goldwyn-Mayer Inc. and Time Warner Inc.’s Warner Bros. about charging for new titles on the existing YouTube site. In some cases, these titles might be available on the site on the same day that they come …

Now forget for a moment the idea of ‘new’, ‘bold’, ‘innovative’. This deal is none of that. Its been done before. What is of note is the sheer size of the audience that YouTube brings to the table. That size is what is going to change the landscape somewhat. YouTube is hitting 400m visits a month. A 1% rate would yield a return that is more than all the other per play players combined.

And whither the cable cos? A YouTube deal ends up making the pay-per-view offerings from them just another also ran offering even though they pioneered the idea years ago. So what is left unique to cable? The Sopranos on HBO? If that is the case, oh man they could be hurting. There is nothing preventing the content providers like HBO, STARZ and Cinemax from also migrating over to YouTube either ala carte or as a bundle.

The cable cos should be very worried. Even with their deals with the FCC and the studio majors, the uniqueness of their packaging is just about played out. WiMax is going to make any plans for their expansion to unserved markets a moot point. Too much investment required in physical plant and right of way to be competitive in the future.

You had a nice run guys. Time to start playing the ‘how low can you go’ mamba.

Linky.

Following the bosses lead on a previous post. I it is a shame but way too many consumers are not sufficiently savvy in consumer electronics of any kind. Case in point –

SAN LEANDRO — A brand-new 37-inch Sony flat screen television for $100? Great deal — until you take it out of the box and realize you just bought an oven door.

San Leandro police Lt. Pete Ballew called it a variation on the old “rocks in a box” scam, in which a box is presented as containing new, expensive electronics for sale but is actually full of rocks.

On Wednesday San Leandro police pulled over a man who had in his car a box containing what appeared to be an expensive 37-inch flat-screen television, but in actuality was a glass oven door cleverly disguised as a TV. The man is suspected of trying to sell the item for $100 in the parking lot of the San Lorenzo Wal-Mart, 15555 Hesperian Blvd.

“It was very ingenious,” Ballew said. “If you were a bargain hunter, you might think, ‘Wow, this is the deal of the day.’”‰”

Police got an anonymous call Wednesday from someone who raised suspicions about a man who tried to sell him a television out of his beige 1980 Oldsmobile Cutlass in the Wal-Mart parking lot. The witness said the seller told him he had bought the TV for $60 at a flea market.

Flat out its just a variant of the rocks in a box routine. But there are other scams as well. Many not so obvious. One we have discussed here is the subsidized phone CPE market. Thank goodness that is finally showing cracks. Another is channel bundling by the ISPs. But no matter, any of these vehicles are ripping off the consumer.

Oh, I bet that the first complaint to the scam above is — “Where is the remote?”

Linky.