Already streaming most of Starz content, Netflix has reached an agreement with content provider Epix to stream its content. Now both Starz and Epix distributed programming will stream to Netflix subscribers in the same release window as cable and satellite.  While it’s still a far cry from a complete replacement for cable’s pay offerings, for many it will be enough. Especially at $8.99 a month in a recession. (More at WSJ.com)

[Update, Dr Dog] Further background from NYT on the Epix deal –

Epix has the rights to films from Paramount, Lions Gate and MGM. But in a crowded marketplace, the service has gained very little distribution on cable and satellite systems, making it invisible to most consumers. Viacom, one of the owners of Epix, disclosed last week that the joint venture continues to lose money, though it said that the service is moving closer to the break-even point.

The Netflix deal is a way to partly circumvent the cable and satellite carriers — and stem the financial losses.

Only thing missing? A feed for newer Warner Bros works. Netflix gets that and the only reason you need a cable provider might be because its your only source of broadband. Channel based servicing is dead.

In business there are several ways you can win. You can be head and shoulders above everyone else. Your competition can be total screw ups. You can gain a defacto monopoly by political legerdemain. Or some mix of all of them. Case in point –

In just over two weeks, Emmy-winning AMC drama Mad Men is slated to begin its fourth season on the basic cable channel. But with negotiations between its parent company and AT&T U-Verse over carriage fees, the cable and internet provider might force subscribers to relocate their premiere parties to the apartment of someone with Comcast.

It’s not just AMC that faces being dropped by U-Verse. Female-oriented channel WE tv and the Independent Film Channel could also face the firing squad if AT&T can’t reach an agreement with parent company Rainbow Media before July 25.

This is similar to the situation faced by Cablevision last March when its pricing squabble with ABC resulted in customers missing a bit of the live Oscars telecast.

Source

It is crazy that a channel customer should be losing any access to the entertainment over some internal provider-carrier squabble. That is fighting over who washes the dishes kind of silliness. And the customer be damned thank you very much.

The better model is the carrier is paid by the subscription of the consumer not by the channel provider. No squabbles occur. In fact under that scheme the two parties work in concert to maximize subscription rates. The whole effort become customer focused rather than channel focused as it is now on cable.

And that is why the likes of Netflix and Hulu will be winners in the space.

The battle between traditional broadcast and cable and the Internet continues to intensify with news from Netflix. Soon, the online entertainment services customers will have access to new movies from Relativity at the same time the content is made available to premium channels like HBO.  Netflix already offers some current content from Starz concurrently with the networks cable play and subscribers have access to a live Starz feed. For $8.99 a month this could be trouble for premium channels like HBO and Showtime that cost more than $8.99 in addition to basic cable fees.

The deal announced Tuesday with film financier Relativity Media LLC adds to a batch of newer movies from The Walt Disney Co. and Sony Corp. that can be watched online through Netflix’ 2-year-old deal with Starz Entertainment LLC on a service called Starz Play.

Among the first films in the deal are “The Fighter,” starring Christian Bale, Mark Wahlberg and Amy Adams, and “Season of the Witch,” starring Nicolas Cage. The films are set to hit theaters later this year.

With new movies from Relativity available early next year, about one-fifth of the rental movie chain’s 100,000 movie and TV show titles can now be streamed online. (Yahoo)

The next questions is: Will HBO and Showtine see the light soon enough to jump on the TVoIP bandwagon or will the be displaced by upstarts. This brings us even closer to the time when subscribers will demand bigger pipes from a protected duopoly  that competes directly with web based services.

The battle between IPTV and cable providers is about to begin as this Wired article intones. —

The stage is set for a showdown between television networks and cable/satellite TV services, thanks to the internet. It won’t happen overnight, but your monthly cable or satellite bill could eventually be replaced by a monthly bill from Hulu, an online service that streams TV shows on demand.

For $10 a month, viewers will reportedly have access to a wider selection of shows than the free, ad-supported version Hulu currently offers. The service would work on PCs and specialized devices such as the iPad, videogame consoles and set-top boxes. The company plans to test a version of this “Hulu Plus” subscription, an expected development, with select users as early as this month to find out whether they’ll will bite, according to sources cited by the Wall Street Journal and All Things Digital.

In order for consumers to pay for a video service like that, it will need to be reasonably comprehensive. So it’s no accident that the same week Hulu’s subscription plans came to light, a Bloomberg report surfaced that the company is talking with CBS, Viacom and Time Warner’s television studio divisions to add their shows. That would be on top of a line-up that already includes “Fox, NBC Universal, ABC, ABC Family, Biography, Lionsgate, Endemol, MGM, MTV Networks, National Geographic, Digital Rights Group, Paramount, PBS, Sony Pictures Television, Warner Bros. and more,” including Wired.com.

Source

There is one piece that I believe will not bode well —

Cable and satellite are classic middlemen. When the internet meets the middleman, the middleman tends to disappear — or at least be replaced by a thinner middleman. We’ve seen it with record stores, classified ad-dependent newspapers, video-rental stores, bookstores and any other business that delivers something that the internet can deliver more efficiently.

If you look at the Supply Chain Collapse that have gone before, in industries like retail, trucking, warehousing, etc, there is no such thing as a thinner middleman. There were only dead middlemen. There is a twist to this scenario however. For IPTV to work one has to have a fat pipe. That means Cable, FIOS, or WISP as a provider. So the carriers may not be dead but they certainly will be wounded. So how does this all play out –

• Hulu launches the premium service. Expect the cost to rise to $15-20 end game. More providers will want to get in on the act which will raise the cost.
• Expect cable costs to collapse. That $40/mo you have been charged will wilt under the shift that is about to occur.
• But that cost savings will not go without a price. Expect the Comcasts of the world to respond to this by cutting services. All those cut portals that require maintenance by high priced talent will be shelved. YOYO will be the name of the game.
• We will finally see a shot at ala-carte services. It would be a no brainer for Hulu to provide ‘The Indie Channel’ at a $1 a month. They give you a key on subscribing that is entered into your HTPC. Hulu keeps the key current as long as you are subscribed. When you drop it they cease the update and the channel stops working. That capability is the real nail in the coffin of cable tv.
• Expect in some corners to see a large shift away from network produced product to lower priced indie production. Able to tap into Hulu, these indie producers could create short run series. The model is already there with shows like Burn Notice and Royal Pains.

The content choices are going to explode here very quickly. The beauty is you may only pay for what you want. Out of a million choices you may only subscribe to 40 channels for $15-30/mo or less. I can’t wait.

It also makes Verizon’s choice to go with a Cable-like pricing model the wrong move. They should have derived the FIOS pricing on the cost to deliver the pipe as a data only service. Just like they have done for the last 150 years. Like the knight in ‘Indiana Jones’ related — “He chose poorly.” Indeed they did.

Has Art Brodsky lost his grip? His posting over at Public Knowledge has to be one of the lamest lines of defense ever offered as a basis for over turning the Rule of Law. Kindness of Strangers be damned!

Mr Brodsky starts with using the Ides of March reversal technique –

Of course, the story isn’t all that simple, is it? Because the hidden story of Comcast’s glorious victory is that if Comcast were smart, it wouldn’t in the first place have brought the case, which challenged the FCC’s authority over the company’s high-speed Internet service. Some in the telecommunications industry, perhaps even huge companies with three letters in its name, urged (begged?) Comcast not to take the FCC’s ruling to court, because of the possibility that Comcast could actually win and, potentially, win big —which is what happened.

The reason that the Telcos like the arrangement Art is that it extended their LATA boundary relationships into the non regulated digital environment without so much as a legal skirmish. And what’s this dismissive alluding but not naming? Its AT&T, VZ, Sprint. Don’t be so damn coy.

But where is the standing on damages to the industry that Mr. Brodsky intones? He offers two — Depend on the Kindness of Strangers, and Waiting for Godot. In the former case he charges that depending on the big firms for telecommunications advancement has led us on a downward spiral in terms of global competitiveness. There is some truth to that but not the whole truth. For who is the hand maiden leading the spiraling down the drain but the FCC itself. Then in the latter case we have this –

We can’t depend on unelected bureaucrats to deal with topics as essential as broadband, because the result could be “excessive and burdensome regulation” on those humble, hard-working telephone and cable companies who unfairly change the rules without any reason at all.

And to you I say, NO we cannot trust bureaucrats with damn near anything including telecommunications. If for no other reason that the concept of the Lack of Sufficient Knowledge on a continuing basis.

But thru all of Mr. Brodsky’s missive is this gem –

… Practically speaking (even if there is a very slim legal opening), broadband is free from regulation – a nirvana that the telecoms industry might once upon a time have gratefully accepted as its due, but now looks upon it with some trepidation because now the door has swung wide open to a full-scale discussion of bringing Internet broadband access services back under reasonable regulation.

Two counts here. Brodsky’s ox has been gored by this ruling yet now the door has been swung open for reasonable regulation? By what variant of a pharmaceutical does he come to this conclusion? Its an election year fella. The chances of a Democratic Congress taking this up is slim to none. Plus if the tea leaves are right the Republican Congress next year won’t have the cycle time to touch it either. The second is under proper procedure, the FCC being a creature of Congress should make the necessary request for an expansion of its authority by the proper means, not some gerrymandered legal trick with a wink and a nod. But Mr. Brodsky the FCC DOES NOT possess the authority to overstate its intended alloted powers. Or do I assume you are willing to abrogate the rule of law to achieve your statist aims under the color of consumer protection. How Stalinist.
More on Balderdash!

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?