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Wall Street Analyst: Cable Monopoly Will Double Your Broadband Bill

Thought paying $65 a month for broadband service is too much? Just wait a few years when one Wall Street analyst predicts you will be paying twice that rate for internet access, all because the cable industry is gradually achieving a high-speed broadband monopoly.

Jonathan Chaplin, New Street Research analyst, predicts as a result of cord-cutting and the retreat of phone companies from offering high-speed internet service competition, the cable industry will win as much as 72.2% of the broadband market by the year 2020. With it, they also win the power to raise prices both fast and furiously.

In a note to investors, Chapin wrote the number of Americans left to sign up for broadband service for the first time has dwindled, and most of the rest of new customer additions will come at the expense of phone companies, especially those still selling nothing better than DSL.

“Our long-term penetration forecast is predicated on cable increasing its market share, given a strong network advantage in 70% of the country (this assumes that telco fiber deployment increases from 16% of the country today to close to 30% five years from now),” Chaplin wrote.

Cable companies already control 65% of the U.S. broadband market as of late last year. Chaplin points out large cable operators have largely given up on slapping usage caps and usage pricing on broadband service to replace revenue lost from TV cord-cutting, so now they are likely going to raise general broadband pricing on everyone.

“Comcast and Charter have given up on usage-based pricing for now; however, we expect them to continue annual price increases,” Chaplin said. “As the primary source of value to households shifts increasingly from pay-TV to broadband, we would expect the cable companies to reflect more of the annual rate increases they push through on their bundles to be reflected in broadband than in the past. Interestingly, Comcast is now pricing standalone broadband at $85 for their flagship product, which is a $20 premium to the rack rate bundled price.”

Chaplin himself regularly cheerleads cable operators to do exactly as he predicts: raise prices. Back in late 2015, Chaplin pestered then CEO Robert Marcus of Time Warner Cable about why TWC was avoiding data caps, and in June of that year, Chaplin sent a note to investors claiming broadband was too cheap.

“Our analysis suggests that broadband as a product is underpriced,” Chaplin wrote. new street research“Our work suggests that cable companies have room to take up broadband pricing significantly and we believe regulators should not oppose the re-pricing (it is good for competition & investment).”

“The companies will undoubtedly have to take pay-TV pricing down to help ‘fund’ the price increase for broadband, but this is a good thing for the business,” Chaplin added. “Post re-pricing, [online video] competition would cease to be a threat and the companies would grow revenue and free cash flow at a far faster rate than they would otherwise.”

Boomerang Toons Online Video on Demand Launches: $4.99/Mo or $39.99/Yr

Phillip Dampier April 11, 2017 Consumer News, Online Video No Comments

Cartoon lover? Turner Broadcasting and Warner Bros. have something for you: Boomerang’s Online Video on Demand service launches today, featuring more than 5,000 cartoons from the Looney Tunes, Hanna Barbera, and MGM toon libraries.

Boomerang is now available on Desktop, iPad, iPhone, and most Android devices with more platforms including Apple TV, Fire TV, Roku, and Chromecast coming soon.

Turner, which runs the companion Boomerang cable network, pushed aside its TV-oriented website to push the new on-demand online service instead. Turner officials said they would continue to distribute the linear-TV cable network, but the company could make even more revenue in the future putting the extensive classic animation libraries of three toon powerhouse studios online and on-demand.

Some of the cartoon characters featured on Boomerang Online Video on Demand.

Boomerang says they will add new cartoons every week to keep the service fresh and interesting to subscribers.

The introductory price:

  • $4.99 per month with a 7-day free trial;
  • $39.99 for 1 year of Boomerang with a 30-day free trial

Payments can be made with a major credit card or through iTunes or Google Play Store.

 

Comcast’s NBC Preparing Launch of Subscription “All Access”-Style Streaming Service

Comcast’s NBCUniversal is laying plans to introduce a premium online video service highlighting NBC Network content and possibly various programming from the various cable channels owned by Comcast.

After watching rival CBS amass more than 1.5 million subscribers for its “All Access Pass” ($5.99, $9.99/mo for commercial-free option), Comcast’s NBC entertainment division isn’t willing to leave money on the table any longer.

The yet unnamed service is expected to compete with services like Hulu and Netflix, but will most likely be comparable to CBS’ premium subscription offering. In addition to featuring a deep library of NBC content, the service could include a significant catalog of past and present shows from cable networks like Bravo, SyFy and USA. Also to be determined is whether NBC will follow CBS’ lead and offer viewers live streaming of their local NBC station as part of the package.

The new service may not launch in the immediate future because Comcast is still observing restrictions imposed by regulators as a condition of its 2011 acquisition of NBCUniversal. The rules make it difficult for Comcast to develop services comprised entirely of content it owns or controls. Federal regulators added the restriction out of concern Comcast could interfere with Hulu’s access to NBC content. Hulu is popular with cord-cutters, and is seen as a viable alternative to cable television. The last of these restrictions expire in September 2018, about the time Bloomberg News reports Comcast is likely to launch the service.

If all the major American networks decide to develop their own premium streaming services, it could have significant implications for Hulu, which combines content from its partners NBC, ABC, and FOX. If NBC pulls out of the partnership, it will be free to keep all the revenue earned from its own streaming platform, and could inspire ABC and FOX to follow.

Observers suspect this represents more evidence that broadcast networks increasingly expect viewers to pay for access to their programming, at least online.

Comcast Takes ‘XFINITY Instant TV’ Online Video Package Across National Footprint

The NBC and Comcast logo are displayed on top of 30 Rockefeller Plaza, formerly known as the GE building, in midtown Manhattan in New York July 1, 2015. REUTERS/Brendan McDermid/File Photo

NEW YORK (Reuters) – Comcast Corp is planning to rebrand and expand a streaming video option for broadband subscribers who do not want to pay for a traditional cable package, sources told Reuters on Monday.

The service, dubbed Xfinity Instant TV, will be priced as low as $15 a month to roughly $40 a month, sources said. It will include major broadcast networks as well as sports channels like ESPN and Spanish language channels such as Telemundo and Univision.

Xfinity Instant TV is expected to be available in the third quarter to more than 50 million homes within Comcast’s footprint, which includes cities such as Philadelphia, Washington, D.C., and Chicago.

The company is changing its video offerings to be more targeted as viewer habits evolve. Xfinity Instant TV will be aimed at high-speed Internet subscribers who cannot afford or do not want to pay for bigger cable bundles, sources said. The hope is that subscribers will eventually upgrade to Comcast’s X1 platform.

Comcast has already given a $15-a-month streaming video service known as Stream a trial run in Boston and Chicago, sources said. Xfinity Instant TV is a revamped version of that offering and will be rolled out nationwide in Comcast’s territories.

Other pay-TV providers including Dish Network Corp and AT&T Inc have started online streaming services for “cord cutting” consumers, or those who are dropping their cable packages for other options.

Comcast’s service is different in that it is limited to its territories and to its own broadband subscribers. It has yet to offer an over-the-top streaming service more broadly nationwide.

(Reporting by Anjali Athavaley; Editing by Bill Trott)

Comcast Securing Rights to Offer Nationwide Online Cable TV Replacement

Comcast could kick the door open on the traditionally closed cable-TV monopoly.

Comcast has a “Plan B” in case rival online-TV streaming providers start a major wave of cable TV cord cutting: the right to offer its own online cable TV replacement nationwide.

Bloomberg News reports Comcast is quietly acquiring national online distribution rights from cable networks, which gives the cable giant the right to sell cable TV-like packages outside of its cable company service area.

Comcast maintains “most favored nation” clauses in its contracts with cable programmers, which means if those networks agree to online distribution of their programming over online competitors like Sling TV, AT&T DirecTVNow and PlayStation Vue, those same rights are also available to Comcast.

For now, insiders claim Comcast has no immediate plans to start competing outside of its home service areas, but it wants to accumulate the necessary rights to hedge against online rivals.

“When you really try to evaluate the business model, we have not seen one that really gives us confidence that this is a real priority for us,” Matt Strauss, Comcast’s executive vice president for video services, said at a conference in November. “There is significantly more upside and profitability in going deeper and deeper into our base first versus following a video-only offering OTT,” he added, using the industry term for nationwide online video.

Comcast has been gradually picking up online distribution rights as it renews contracts with the networks it carries. A sign Comcast may imminently launch a competing product similar to DirecTVNow would come if it chooses to renegotiate contracts before they expire. Comcast last negotiated with CBS in 2010 and ESPN in 2012. Both contracts don’t expire until 2020. Without renegotiation, any online offering from Comcast would not include networks owned by those two companies.

Comcast is downplaying any interest in breaking the traditional cable television business model, which depends in part on friendly relations with other cable companies and staying out of their territories. The prospect of Comcast selling cable TV service in Charter’s service area would threaten a still lucrative source of revenue if a price war develops. Video represents about 50% of Comcast’s cable sales.

For now, Comcast’s most evident online competitor is AT&T’s DirecTVNow which has added 200,000 subscribers nationwide since launching in November. But that remains just a fraction of Comcast’s 22 million cable-TV customers, a reason why Comcast may be in no rush to enter the online streaming cable-TV business. That may change when two high-profile online video providers get into the business later this year. YouTube and Hulu are both expecting to launch cable-TV alternatives in 2017.

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