Alert! Will the Cable Eco-System Begin To Crash Tomorrow?

By Paul Maxwell Report Archives
Cover image for  article: Alert! Will the Cable Eco-System Begin To Crash Tomorrow?

Scary headlines.  Jittery investors.  Stock market palpitations. Paeans and gifts for Google.  M&A decision delays.  Restless subscribers.  Skinny bundles.  Retrans headaches. Linear v. streaming.  What else can happen? Well, on the 18th the Federal Confusion Commission can vote to follow Chairman Tom Wheeler’s Valentine’s gift to Google by approving the Notice of Proposed Rulemaking.  You know, the one that would throw the set-top box eco-system up for grabs.

On the face of it, it’s not the worst suggestion that Wheeler has made; just one that has more ramifications than he and the notice suggest … or admit to.

The stated goal is to promote competition in the device market. As the FCC and Wheeler see it, the rental fees for set-top boxes (STBs) are too high, too hard to figure out and more or less a scam. While some of that may be true it’s also true that the folks charging those fees did, after all, build all of that expansive and expensive infrastructure and cobbled together all those knotty contracts with programmers -- and, by the way, provide the spectrum that makes the Internet work.  Which, of course, all of those Internet-based companies use without actually paying for much of anything except pairing fees.

And, oh yeah, there are already quite a number of STBs that allow for streaming content that includes programming from so-called broadcast and cable networks as well as the major streaming services such as Netflix, Hulu, et al (Chromecast, Roku, Apple TV, Amazon Prime, etc. etc. etc.) plus some originally built for gaming (Playstation, Xbox, Wii, etc.).  Some 31% of TVHH have streaming players with a Parks Associates study indicating another 14% will add them this year!

Wheeler’s a smart guy (just ask him), so why is he doing this?  Well, for starters, because he can.  He’s got about a year left to remake the entire entertainment and media eco-systems into his view of what they should be.  He’s just getting to the second stage (after net neutrality impositions). What might the third stage be … perhaps expanding net neutrality to everything that moves?

What Wheeler and the FCC have already done and now might do are all much scarier than the headlines above.

Random Notes

The question of the day: Which of Sumner Redstone’s conglomerates has the rights to his own soap opera?  That could boost Viacom’s stock (depending upon whether Paramount or Comedy Central gets the rights) or hurt CBS’s (depending upon whether Showtime or CBS gets the rights).

Of course, Viacom itself could provide a “Sopranos”-like series with the boardroom actions of Redstone’s newly appointed executive chairman (already CEO) Philippe Dauman who famously ran off much smarter media mavens Tom Freston and Judith McGrath.  Cue the long ago hit from the Kingston Trio: “Hang Down Your Head, Tom Dooley.” (Just click on a list of Viacom directors.)

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