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Hulu + Live TV Hiking Rates $10/Mo; Most Customers Will Pay $55 a Month for Live TV Streaming

Phillip Dampier November 18, 2019 Competition, Consumer News, Hulu, Online Video 1 Comment

Hulu + Live TV is celebrating its successful signup of over an estimated 2.7 million customers with a major rate increase the company says reflects the service’s true value in the marketplace.

Most customers will see their subscription price increase by $10 a month, from $45 to $55 a month.

“Today, we’re letting customers know that the monthly base price of Hulu + Live TV will increase to $54.99, beginning December 18,” the company wrote in a blog post. “The new price better reflects the substantial value of Hulu + Live TV and allows us to continue offering all of the popular live news, sports and entertainment programming included in the plan.”

Craig Moffett, a chief analyst at MoffettNathanson, told readers of his Cord Cutting Monitor quarterly newsletter that Hulu + Live TV, which combines Hulu’s on demand plan with a selection of about 60 streaming live TV networks, is likely America’s largest cable TV replacement service, topping Sling TV’s estimated 2.686 million customers.

Moffett also reported that cord cutting is becoming a more costly proposition.

“Eighteen months ago, the cheapest video packages for vMVPDs were clustered around $30 to $35 per month,” Moffett wrote. “Eighteen months later, most are in the $45 to $50 per month range, an increase of roughly 50%.”

Cable One’s Costly Internet Service Helps Cable Company Achieve Record Profits

Phillip Dampier November 12, 2019 Cable One, Competition, Consumer News, Data Caps 1 Comment

Using a combination of lack of competition, high-priced service plans, and data caps, Cable One is once again the nation’s most profitable cable broadband provider, charging residential customers a record-breaking average of $72.09 a month.

Late last week, the country’s fifth largest cable company reported excellent results to its shareholders, as the company collected the proceeds from increasing rates on broadband service while shedding unprofitable cable television customers.

Cable One serves small and mid-sized cities, mostly in the mid-south, Rockies, New Mexico and Arizona. It has grown larger with the acquisition of NewWave and Fidelity Communications, and told investors on a quarterly results conference call the company would take some of its recent gains and move towards further acquisitions in the near future. NewWave customers will now face Cable One’s stiff data caps, rolling out across legacy NewWave service areas in November and December. NewWave customers have already found their cable television package pruned back to match the current Cable One package, which omits Viacom-owned networks. The same will hold true for Fidelity’s customers once the two companies merge systems.

 

Laulis

Revenues for the third quarter were $285 million compared to $268.3 million at the same time last year, representing a 6.2% increase. Even with the high cost of service, the number of Cable One internet customers is increasing, primarily because competing phone companies typically offer little beyond DSL. In the last quarter, Cable One added 7,400 new internet customers and boosted broadband revenue by 8.2%.

“Cable One still has one of the industry’s lowest broadband penetration of homes passed at just 32.2% and, with limited fiber-based competition, their ceiling is arguably one of the highest in the industry,” Moffett Nathanson analyst Craig Moffett told investors. “They are at last growing the broadband business at a rate fast enough to drive meaningfully higher penetration.”

Cable One makes no secret it now calls itself a broadband company and has been de-emphasizing cable television service over the last few years. In fact, customers who cut the cord are doing Cable One a favor because broadband-only customers boost their overall profit margins. Unlike cable television, where licensing expenses are growing, the cost to provide and support broadband service is dropping — even as Cable One raises internet pricing and constrains customer usage with industry-low data caps. That forces customers to upgrade to more costly, higher speed service plans to get a larger data allowance. Cable One also offers a $40/mo add-on that restores unlimited service, which is popular with their premium customers. Once a customer uses more than 5 TB, their speed is throttled.

“I think the interesting thing that I took note of is that the higher [the] speed that our consumer takes the higher the percentage of unlimited [plan] selling. So that is to say if you take our gig service the percentage of customers that take unlimited there is the highest of any consumer group,” noted Cable One CEO Julia M. Laulis.

Pricing is expected to rise further unless phone companies compete with fiber broadband, an unlikely scenario in the rural and exurban areas Cable One serves.

Analyst Predicts More Streaming TV Providers Will Close as Programming Prices Soar

The era of fierce competition among live streamed video providers that has fueled cord-cutting will face new challenges as providers cope with rising programming costs and some may exit the business.

Last week, Sony’s PlayStation Vue announced it was planning to cease service in early 2020 because it was not profitable for the game console manufacturer. But Cowen analyst Gregory Williams believes it won’t be the last to close its doors.

Williams told Multichannel News that despite the growing phenomenon of cord-cutting, new streaming subscriptions are slowing down as subscribers choose between a half-dozen major services that are all raising prices, including AT&T TV Now, fuboTV, Hulu Live TV, Philo, Sling TV, and YouTube TV. Williams called the current marketplace for streaming services irrational in the business sense, because providers are at the mercy of programmers that are continuing to raise wholesale prices.

Another serious problem is price disparity. Programmers offer huge volume discounts to large cable, satellite, and telco TV providers, charging smaller streaming services considerably more. That could eventually bring streaming subscription prices to parity with the same traditional cable and satellite providers many consumers left looking for a better deal.

Most streaming TV providers have built business models on slimmed-down packages of channels, rejecting the difficult-to-negotiate a-la-carte “choose your own channels” model many customers have been asking for since the days of 100 channel cable TV lineups. As a result, consumers are still paying for lots of channels they do not watch or want, and as subscription costs advance beyond the $50 a month many services are now charging for a healthy package of most popular cable and broadcast networks, some subscribers may end up going back to their old providers.

Ironically, one of the few a-la-carte providers available is a very large cable company you may already know. Charter’s Spectrum has been quietly selling TV Choice, a package of 10 ‘you-pick’ networks (mostly a part of Spectrum’s Standard TV package) combined with C-SPAN, public, educational, and government access channels, home shopping, and local over-the-air stations, to its internet-only customers for $24.95 a month (not including a $6/mo Broadcast TV Fee and an extra $4.95 a month for a cloud-based DVR service). The resulting bill of around $35-40 a month is at least $10 less than many streaming service providers that may not offer the exact channel lineup you are looking for.

The closest alternative is Sling TV, which has very slim packages of networks in three different configurations, ranging from $15-25 a month. But chances are, some channels you watch won’t be included.

Williams predicts that just three to five services will survive the consolidation wave or exit that is expected to be triggered by Sony’s decision to leave the marketplace. The services most vulnerable are likely those lacking a deep-pocketed, healthy corporate backer or those with the least market share.

An executive for one of PlayStation Vue’s rivals told Multichannel News Sony faced platform costs that “were simply too high.” Sony paid broadcast retransmission consent fees to local stations in every market the service was offered and also licensed popular, but very expensive regional sports channels. Sony also outsourced its streaming technology to Disney-owned BAMTech, among the more expensive platform providers.

T-Mobile Fixed 4G Wireless Home Internet: $50/month With No Data Caps

T-Mobile is gradually expanding its new fixed wireless home broadband service, prioritizing rural areas next to major highways where the mobile provider has strong 4G LTE service.

T-Mobile Home Internet is initially being targeted to rural customers unlikely to have high speed internet access from a cable company or are stuck with low speed DSL from the phone company. It offers “unlimited service” with no data caps, but T-Mobile reserves the right to temporarily throttle speeds of users exceeding 50 GB of usage per month when their local cell tower is congested. Customers can check T-Mobile’s fixed wireless website to see if they qualify for service.

A Stop the Cap! reader in Indiana testing the service over the last month reports speeds averaging around 50/3 Mbps, with ping times often 30 ms or much more, which makes the service problematic for video games. But T-Mobile Home Internet works fine with streaming video services.

(Image: The Gadgeteer)

The service is currently available only in a few areas. T-Mobile is carefully managing the service by registering the customer’s wireless home internet equipment to a specific cell tower. Customers are not allowed to take the service on the road, such as on vacation. Since the service relies on T-Mobile’s existing 4G LTE cell tower network, it is essential to balance capacity between fixed wireless customers and T-Mobile’s existing mobile users. Pricing is comparable to Verizon’s 5G Home Internet and in most cases the price includes taxes and fees.

T-Mobile began marketing the service to its existing customers in qualified service areas over the summer. Among those enrolled, none have reported speed throttling, despite the fine print warning to heavy users.

“I consistently use over 250 GB a month and speeds have never been impacted,” our reader told us. “However, speeds can suffer around rush hour, when I suspect more people are using their cell phones. But they are still 25+ Mbps for downloads.”

Customers signing up for the service will receive:

  • a T-Mobile LTE Wi-Fi Gateway with a pre-installed T-Mobile SIM card;
  • A 5200mAh battery backup, also likely for future portability options;
  • AC Adapter;
  • Quick Setup Manual.

(Image: The Gadgeteer)

There is no charge for the equipment and start-up kit, but it remains the property of T-Mobile and needs to be returned if you cancel, otherwise T-Mobile will charge you $207.

Users plug in the equipment in an area of their home that gets the strongest T-Mobile reception. Once T-Mobile’s LTE network is detected, the service will register and activate service on the T-Mobile cell tower. Customers manage the rest of the service with a smartphone app, which configures Wi-Fi capable devices, sets streaming speeds, and allows customers to check usage. There are two LAN ports on the back of the device for Ethernet connections and a phone jack, presumably to support landline service sometime in the future. Most will be able to configure the service in less than 10 minutes.

Ironically, one service T-Mobile explicitly says won’t work with its fixed wireless offering is T-Mobile’s new TVision live TV service. But customers report no problems using AT&T TV Now and Hulu’s Live TV service.

The included backup battery provides long lasting power to stay connected during a power interruption.

Customers have reported favorable impressions of the service, assuming they have a solid signal from a nearby cell tower. T-Mobile is cautiously marketing the service only to customers where cell towers are not already congested, and only in areas relatively close to a nearby cell tower, to assure good reception. T-Mobile can also self-limit the number of fixed wireless customers signed up for each cell tower. That means most of its fixed wireless customers will be in semi-rural areas, often nearby a major road or highway where a T-Mobile tower provides service. It is not likely T-Mobile will initially market fixed wireless service in dense suburban or urban areas, because cell towers are much more likely to be congested. It also seems unlikely T-Mobile will sell the service in deeply rural areas where it lacks good cell coverage because T-Mobile is relying on its existing network of cell towers to support the fixed wireless service.

An excellent review of the service and its features has been written by The Gadgeteer.

T-Mobile explains how its fixed wireless home internet service works. (1:15)

Sony Shutting Down PlayStation Vue Streaming TV Service

Sony is throwing in the towel on its streaming TV service, PlayStation Vue, with the announcement the service will close down early next year.

“Today we are announcing that we will shut down the PlayStation Vue service on January 30, 2020. Unfortunately, the highly competitive Pay TV industry, with expensive content and network deals, has been slower to change than we expected. Because of this, we have decided to remain focused on our core gaming business,” the company said on its blog.

PlayStation Vue debuted over four years ago, but was immediately met with two difficulties that proved insurmountable:

  1. Many wrongly believed the service was only available to those owning a PlayStation gaming console. While there are over 100 million PlayStation 4 units in use today, a significant number of cord-cutters do not own any gaming console and thought that put PlayStation Vue out of reach.
  2. Sony has no ties to other TV providers, making it impossible to get the kinds of volume discounts available to large satellite, telco TV, and cable operators. As the costs of video programming continue to increase, PlayStation Vue losses widened for Sony and left customers looking for savings off a traditional cable TV bill frustrated by increasing rates for streaming providers. PlayStation Vue hiked rates $5 a month last July, reaching $50 a month, and it was clear more rate hikes would be needed in the future.

PlayStation Vue was always a money loser for Sony and reportedly has around 500,000 subscribers — a relatively small number in comparison to services like Sling and AT&T TV Now. Within the last week, reports leaked out that Sony was looking for a buyer for PlayStation Vue, but apparently could not find one that met the company’s terms. Sony is under pressure by Wall Street activist investor Daniel Loeb, who wants the company to restructure and eliminate money-losing services like PlayStation Vue to boost Sony’s stock price.

PlayStation Vue primarily offered live feeds of linear TV channels. Linear TV viewing is on the decline as viewers increasingly move towards on-demand viewing and services like Netflix and Hulu that deliver plenty of that content at a much lower cost.

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