Okay, Okay, Maybe Netflix Is a Problem for Cable After All | Hacker News Reader

Okay, Okay, Maybe Netflix Is a Problem for Cable After All

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61 pointsjsherry54 comments

What's crazy is that Comcast is in a great postion to go head-to-head Netflix. They are positioned to go vertical in a way that Netflix can't even dream of.

* They have a relationship with a huge base of existing customers. They're one of the few players with a subscriber base close to Netflix (who just passed Comcast).

* They have a large network based on good technology. Sure, it's not fiber, but it's a lot better than what most of the RBOCs are sitting on, and Netflix has zero.

* As part of NBC, they have established relationships with all the major content providers.

* They own the distribution channel from content library, transport, and the end-user equipment.

The problem, from my experience, with Xfinity is that the "experience" sucks. Their cable box is a slow, buggy pile of crap. Browsing content on my cable box is only marginally better than the craptastic PPV movie systems in a cheap hotel. The new Xfinity apps for my iOS devices are a huge step up, but I'm not convinced that using my iOS device as a remote for my television is where I want to be. This is what the experience is like:

* Pick up my iPad and browser for "OnDemand" content * Initiate playback from my iPad * Switch to the Comcast remote to play/pause, ffwd/rwnd * Experience huge lag in response to my control inputs from any of these devices

I've measured it, and it can take up to three full seconds for my cable box to respond to inputs. Three seconds is an eternity when you compare it to the Netflix app running on my PS3. Not to mention, with Netflix, I don't have to keep my iPad around. I can just use the PS3 remote to browse, select, play, and ffwd/rwnd content. And it's responsive.

Comcast has only themselves to blame for this situation. They're sitting on all the right pieces, and no individual component is a huge weakness if you believe that going vertical is the right approach.

Such a shame.

In my experience, Comcast has one thing that Netflix doesn't: customers that hate them.

1. Comcast is expensive. My rates have nearly doubled, but I haven't seen any change in my service or their offerings.

2. Comcast wants you to install their hardware because they "switched to digital." Fine, but I don't need or want another appliance between me and my TV. I already have several (Wii, Xbox, etc).

3. Charging you extra to see HD. Here's a tip: if I can see HD versions of the stations that I'm already paying for just by running the tuning auto-scan, then I feel ripped off. Esp. because old 4:3 format looks terrible on my wide screen.

I agree with your sentiment that Comcast has only themselves to blame. They're trying to squeeze more and more money out of their consumers and offering little in response. Which is why I dropped them like a hot rock and got netflix and hulu accounts.

That's what blows my mind. There are very few good business reasons for Comcast to be in the position they're in. "Customers hate them" is a symptom of the underlying disease: chronic-head-up-the-ass. They have the technology and relationships to make huge headway on every one of the items you complained about. The only problem not directly addressable by technology is price, but I think there's a solution to that as well.

Apple does very well selling hardware (at a premium) that is typically 6-8 months (often more) behind the rest of the market. When they upgrade their lineup, prices typically don't change much, but the hardware is upgraded. How do they get away with this? Because they have something consumers want. They provide a great experience.

What's the lesson? Consumers will pay what you ask, and they won't complain (much), provided you give them what they want. Use your technology for good! Provide awesome services that consumers want, and no, running down a check list saying, "But we have streaming movies 'On Demand™'" isn't what we want. We want an experience that makes us happy we bought your service. Get with it!

IMHO, they should just get out of the media game and focus on their network as a service. If they are going to play the "natural monopoly" card then they need to act like it and not be buying up media outlets. It's incredible that nobody call them on this (particular) bullshit.

I reciently had cable installed in my apartment just for internet. I previously did not need internet because WiFi is available almost everywhere in my city and I can teather to my cellphone when I can't connect otherhow. In fact, the only reason I got cable internet was for torrents, streaming (netflix and hulu) and gaming. I had no TV or internet in my residence prior.

"IMHO, they should just get out of the media game and focus on their network as a service."

From a business strategy perspective, that is the absolute worst decision Comcast could make. The lower you go in the network stack, the more commoditized you become. Selling their product as a network service only would effectively make them a utility. With that comes a ton of regulation and no room to innovate.

That's my entire point though! They seem to think that they are a "utility" that deserves a "natural monopoly" status, in the meantime, they continue to inovate and compete, often unfairly, to both taxpayers and buisnesses.

I pay Comcast ~$70/month for internet. I can get DSL cheaper, but only at lower performance tiers. It's decent service, I'm not too upset.

I pay Netflix $8/month.

Comcast may experience some creative destruction, but even with their physical infrastructure they really ought to be able to survive at those rates. I'm "sorry" they're losing their content business, but it's not as if they didn't have years of opportunity to figure out what to do about it.

How have your rates been the past some months? With no change in service, mine have gone up 24% since late last year.

Cry my a river, Comcast.

Because they haven't gone up, yet. They just called us a few days ago to announce that they want to upgrade my speed from 12-ish to 20-ish, and they will send us a digital cable box for basic digital, for 4 cents more a month for a year (no typo, four-hundredths of a dollar). Presumably at the end of that year, the rates don't go down.

I assume, though I don't know, that they are doing this to finally get the analog cable channels off their network (which I approve of, they are a shocking waste of bandwidth even at SD), and are complying with their legal obligation to continue to broadcast the local stations to me even though I am only an Internet customer by "giving" me the digital cable box. I broadly approve of this. I am hoping they're trying to "hook" me back on digital cable and that I can get back to my original rates (or a reasonable facsimile thereof) by turning the box back in. Or... if necessary, switching to some of that DSL. (Or threatening to switch to DSL.)

I have the analog TV service -- because the final, discounted price is almost the same as the price for Internet only -- and I can say they've done a lousy job of providing that negotiated, legislated analog support. Noise, severe (upstream, I'm assuming, as the last leg is analog) digital compression artifacts, channels literally "freezing" for hours or a day before someone "unsticks" them. Flickering letterboxing.

They also eliminated two additional PBS stations that had been in the basic cable lineup here, prior to the digital conversion. The channels I most valued.

(At least I'm really subscribing for Internet service. But those depending upon the promised basic analog support are really being screwed.)

All this seems to be a combination of spending no money on the analog support, and pressuring customers to "upgrade".

It's interesting that you received the offer you describe. I've had nothing similar.

Technological trade-offs aside, I'm upset with them because, in my view, they have not adhered to the agreement they entered. And no regulatory body is making any effort to correct this.

And just how have my rates increased 24% in the span of six or eight months, without those same regulators asking Comcast WTF?

Although it's been some years, I've had my DSL experience with SBC/AT&T. And, amazingly, they managed to be yet worse.

(Three service calls -- each a half-day off work for me -- until they actually showed. Exterior, bare, twisted wire connections left dangling on the side of the building. Regular service drops. Phone support that finally admitted: We're outsourced; we can't even see the status of the tickets we file when you call.)

Sorry, this is way too long -- I'm venting.

At least the Comcast Internet service is fairly reliable. They just make you pay through the nose for it, and push similar tactics with their TV service.

Where I am, now, there is no good choice. (Not even a competitor's DSL, as -- last I checked -- AT&T refused to extend support the extra mile to my community of several thousand.

I have NO sympathy for either of these company's "laments". Based on personal experience, I believe everything they say is bullsh-t.

(Final tidbit: About a decade ago, SBC/AT&T received upwards of $1 billion in tax breaks and other incentives in Illinois in return for "universal service", then lobbied the legislature to change the law and let them out of the obligations they'd assumed in return for this largesse.)

Sorry for turning this into a long rant. But the lesson I've learned is to not believe a word they say.

I only do business with these companies because I simply have no other choice. A position a lot of other people are also in. Monopoly or duopoly, the resulting behavior is straight out of the textbook.

I'm in the same boat as many of you, paying the cable company for internet access and relying on Netflix and Hulu for content (I subscribe to Hulu plus, though I confess I was largely looking for some way, any way, to give Hulu some of my money for the service they provide me).

My question, though, for others like me...how many of you have more than two adults and/or teenagers in the house? Right now it's just me and my wife and my young daughter. I remember growing up, though...in my family, we had multiple TVs in the house, with everybody often watching something different. Cable TV provides the bandwidth for that, but I was thinking it may be awhile before cable internet provides enough bandwidth for that use case.

Of course, it could be that as this generation of new parents gets used to not having a cable bill, families may grow used to watching TV together or watching it less overall. That might be the greatest contribution that TV-over-Internet provides us, in the long run.

Cable Internet already provides more than enough bandwidth. There are been many times where my room mate and I are both streaming content from NetFlix, and our third room mate is watching Hulu in the living room.

No issues with lag, or slow downs or anything like that.

Between Hulu (free) & Netflix ($8/mo), the only bill I pay to cable is for internet.

It seems to me that Hulu is way worse for cable companies than Netflix, as Hulu lets me watch current shows nearly immediately. If I didn't have Hulu, I might get basic cable for current shows.

If I could get decent french-language programming, I would also give up Dish. As it is, TV5 Monde is only available on Comcast (in some areas) and Dish (everywhere).

Anyone know of good streaming options for French language programming?

I don't even use Netflix, as Hulu satisfies all* my TV needs.

I know it's not a representative sample, but all but 1 of my friends have cancelled cable in favor of Netflix + Hulu. So I'm continually surprised to hear that cable subscriptions aren't falling.

What I really don't get is why HBO won't sell to me directly. I think that would be the last nail in $100/month cable bills.

"Can I get HBO On Demand if I don't have HBO? No. HBO On Demand is exclusively for HBO subscribers." from http://www.hboondemand.com/faq.html#faq7

HBO Go is godsend. I can watch the entire series of any HBO show from the pilot to the series finale and watch new episodes of awesome shows like Game of Thrones on a computer or on my iPad. The second Showtime copies them and offers this direct, subscription based, with clients on the Roku and the like, it'll be over for cable.

Are you saying that you can get HBO Go without cable? From what I can see of the signup, I need to pick my cable provider to sign up (something I don't have). I'd be willing to pay for HBO, but I'm not willing to pay for other cable as netflix satisfies my needs there.

I've got a Roku too if there's some integration there that I'm missing.

Unfortunately, HBO is owned by...Time Warner Inc, and it seems their executives like to talk about the two-year old TV Everywhere initiative[1], but continue to fail to ship it.

An interesting quotation from that blog post, "Bewkes, who helped spearhead the TV Everywhere initiative with Comcast two years ago, reiterated the need for the industry to “take every channel on television and put all of it on demand [...]"

[1]http://gigaom.com/video/cable-show-panel/

No, HBO Go is included in a cable subscription. Fortunately for me I've got family that watch HBO but aren't tech savvy enough to realize I'm using their HBO Go account.

My point though is that I would pay a monthly fee for HBO Go having experienced it.

This has forced me to just go back to pirating TV Shows instead of giving them my money. I'd gladly pay for it, but they won't let me.

Count me in the 40% who has cut their cable bill (I.e. no more premium channels) since buying an Apple TV.

I've been without cable TV for over 10 years and don't miss it at all. Just another industry with lazy incumbents whose lunch is being eaten by a competitor that is giving customers what they've been asking for for decades.

Now I wish someone would just break up the sports broadcasting cartel. ESPN has way too much power to dictate how its customers can view its contents. What the hell is an ESPN 360 compatible cable internet provider? One that is willing to pay their tariff?

I am surprised that ESPN (with all their control) haven't adopted a better online presence.

I would pay them directly $10 a month to access their sports and TV shows. Can't be doing better through the cable contracts...

ESPN makes more then 1 Billion Dollars a year in cable carriage fees. As stated in another response they get between $2-5 per cable subscriber from these deals. This is all subs including many that don't view their channel.

No, $10 a month ala carte is not a better option for them. ESPN likes their position in cable, its hugely profitable.

ESPN makes more the $4 billion from those fees. And then they get to show advertisments as well.

I wonder if there's some kind of agreement that prohibits them from pulling the end-around on cable? Anyone know? Even if they could pull it off, they probably don't want to bite the hand that feeds.

I guess that's what I am saying. I am surprised they haven't done both yet. Get the non-cable subscribers with a separate package...

ESPN is owned by Disney[1], and I believe it is considered a channel conflict (i.e. don't compete with your customers). In effect, by making their content less scarce, their customers (Comcast, Dish) would ask for a discount during the negotiations because the content is now perceived as less valuable. In addition, advertisers simply won't pay the same rates to advertise against "internet content" as they will for cable or broadcast. My suspicion is that it has something to do with the potential for divided attention of the viewer.

[1]http://mediakit.go.com/espn/

ESPN is the costliest "basic" channel that the cable companies provide. As of 2008, it was $3.65 per subscriber per month, and ever increasing as new broadcast contracts are signed with various leagues. It's very debatable whether a $10 / month ala carte alternative would do better for them.

Comacast was charging me 4 or 5 times more than Netflix per month and still, twenty minutes of every hour consisted of advertising. That is, a third of my watching time was spent muting the television and twiddling my thumbs.

Pretty much Comcast can go jump in a lake as far as I'm concerned. Of course, now that Comcast, through MSNBC, provides both service AND content, I'm sure they'll put a stop to Netflix as soon as possible. Thanks, FCC!

I've just spent three months trying cable and have decided to cancel it. At this point one thing would entice me back: channels a la carte. I like watching sports sometimes and occasionally like watching a Discovery Channel-type show in Spanish and seeing how much I can understand, but aside from those two things, I don't get much out of it that I couldn't get from Hulu.

The problem with channels a la carte is if you have two competitors, one of whom bundles content and the other of whom competes a la carte, there is a strong tendency for them to get into a ruinous price war.

Since people already do bundle, that makes getting into an a la carte variation very dangerous.

See http://www.dtc.umn.edu/~odlyzko/doc/price.war.ps for details.

I got rid of my cable service about a year ago and haven't regretted it. It seems to me there is a lot of room for cable companies to easily improve their service, yet IMO it remains consistently poor.

- On demand selections are limited, and the interface is usually pretty clunky. If I have a DVR, I have to remember in advance to record something, rather than being able to just grab it after the fact.

- You need to have a physical box, which either arrives outdated or quickly becomes outdated, and they never replace it.

- It costs $60-$70/month for decent cable service where I live, versus $8/month for Netflix. Combine that with Hulu and free on-demand streaming from major TV networks, and it's a great bargain.

The only thing I miss about having cable is being able to channel surf when I'm bored. Honestly, I am probably a more productive human being without wasting my time doing that, so I'm not too disappointed.

I'm not going to shed a tear. Cable companies had to know their business plans weren't going to work forever when pay-per-view movie rates started exceeding the cost of renting a DVD, or in some cases actually buying the DVD.

Now... about those pesky 5000% profit margin usage-based-billing rates...

I have a smart Sony BD player that lets me watch Crackle, Hulu Plus, Netflix and half a dozen other things. It upgrades automatically and adds new services every few months. (I believe most of these are available on the PS3 as well). I was on this crazy cable plan that had all the bells and whistles but I actually only watched 5 channels. When cable lets me subscribe on a channel by channel basis I might switch back. The only thing I missed is live sports but networks are broadcasting live web streams as well, so 'cut the cord' = 'more money in my pocket'.

Also, something to note was that I dint have TiVo or DVR and so could almost never watch shows on TV. Hulu for me is free DVR (unless they dont have my show which is rare).

The Internet and Cable companies here in Canada are already trying to circumvent the issue and bring back the sheep by capping regular internet plans in the same way you see with data plans on phones--Most companies allot 100gb (and then you pay huge sums if you go over) which isn't very much in today's world, so it's gotten to the point where I had to cancel my netflix (its inferior in Canada anyways) because by watching it regularly, I far exceeded my internet cap. It's gotten to the point where excessive streaming/downloading for entertainment is about on par with traditional cable in terms of costs.

Instead of cancelling Netflix, why not stick it to the people giving you prohibitive caps and switch to an independent 3rd party ISP. I switched from Rogers to Teksavvy (and later Teksavvy Cable) and have loved every second of it.

The best part is that the customer service and tech support people don't treat you like an idiot and don't just read their script and transfer you around when you say something not on their script. (Not bitter.)

Do you know what? I really appreciate that, and I might just do that. Thanks a lot. :)

Between OTA HDTV, Netflix, Redbox, and Hulu, I've been without cable TV for quite a few years now. Actually, I've been without a TV completely for the last year and frankly it's quite enjoyable. Just not having that TV as the focal point of the house is really nice, especially since I have a 1 year old to be a dad to.

Considering that digital cable is $50+ a month(not including internet), that's enough to buy new laptop or HDTV or iPad every year. Cable won't die, but I wouldn't be surprised if they are forced to eventually morph all of their offerings into a digital package like Netflix where you get Streaming TV + Internet for say $50. Right now I'm paying $35 for cable internet and $8 for Netflix, and a few dollars here and there for Redbox rentals, so $50 a month is just about right for what it should cost for cable companies to do that.

"Just not having that TV as the focal point of the house is really nice"

This. I've always envied friends who didn't have a TV in their living room. It totally changes the character of the home. It's somewhat perverted that TV literally dictates how people setup their floorplans.

I keep on toying with getting rid of the TV (currently use a 42" lcd hooked up to an HTPC w/ no cable) but spend at least 4-5 hours per week w/ the girlfriend on the couch watching netflix, daily show, TED, etc. If I may ask how does your family consume content? Have something like a 27" iMac in the den?

I live in a small apartment, so arranging things around a TV would be a big pain in the ass.

Instead, our table is on gliders and slides easily out of the way, and a small projector (next to the couch) projects onto the wall where the table was. This is great, as there is zero sign of a TV when using the room to eat, receive guests, work or read.

This was a practicality at first, but now I love it. It's dead simple to convert the whole space into a movie theater, but you have to actually initiate that mode switch. It's quite different than coming home and sitting down in a room which is already oriented around a TV (where I would end up watching TV even though that wasn't my intention).

Similarly, no cable connection means we have to be proactive about what content we'd like to consume. Nearly all Dutch TV shows can be streamed online, US shows and movies we like are downloaded ahead of time.

Result: I'm just as likely to read a book as watch TV when I come home, when I do watch it's always something I chose, and none of the time spent watching involves any commercials.

Laptops and an MacMini in the living room.

Watching video is not a family activity in our house though. Dinner time and games are family activities and we do plenty of that. The only reason we have the Mini in the living room is because we want to monitor the kids usage, otherwise It would be elsewhere.

>If I may ask how does your family consume content?

If I may ask, what makes you assume they do? I haven't followed any shows since BSG ended, and my wife watches 2-4 hours a week of stuff she probably wouldn't miss all that much. Our daughter watches an hour of kid stuff (Dora, etc.) every day (1/2 hour during breakfast, another 1/2 hour while I cook dinner), but generally prefers to spend her time playing with my wife and I. If I were to sell the TV on craigslist tomorrow there would probably be some whining for a week or three, but eventually we'd settle down into a new routine and probably never miss it.

When I "consume content," it generally comes sandwiched between a couple of paper or cardboard covers.

>If I may ask, what makes you assume they do?

I'm guessing the part where they said that they use Netflix and Redbox is probably a good indicator.

Yes we still watch about 30-45 minutes at dinner on the laptop. Usually a show like Dr. Who or Top Gear on Netflix, or Castle when new episodes are on. Some nights we just sit and talk. It's nice.

A laptop is plenty of screen if you're just sitting at the table. Also, if you want to watch a movie and get cozy on a couch, put the laptop on a chair in front of the couch and watch.

Frankly, I can get more work done and spend more time with my family if I don't have a giant HDTV practically begging to be watched. Removing that time wasting magnet makes a much bigger impact than you would realize.

Once you go TV free you start noticing things like how when you visit friends or family TV is almost always on. It's like a buzzing that people get addicted to, but don't realize it. Now I can't even go to many restaurants without there being a TV in there too.

It's like a bizarre form of mind control.

Also, since getting a Nook last year, I read a lot more, which is nice.

(When did "this." become a sentence? It became cliche in, what, a week?) That said, I agree with the sentiment.

I've gone cable free for two years thanks largely in part to Netflix (and Xbox 360 for my ESPN3 stream). Cable was one thing that should have been getting cheaper over the years, but instead kept getting more expensive. Like Blockbuster before it, I don't think anyone will be too sorry for Comcast and the rest of their lot.

My wife and I have been experimenting with reducing the content that we buy from Directv. Directv is a great service, great content, but we watch so many streaming Netflix movies that Directv is less relevant. That said, we are scaling back on what we purchase from Directv, but definitely not canceling it.

We cut the cable three years ago. And in our community, no cable means no TV. It's probably not the much cheaper, to be honest. The big difference for us has been the cutting random channel-surfing and our family's exposure to loud, mentally corrosive cable TV advertising.

The day I can get NFL Sunday Ticket streaming to a set-top box (with a decent user experience, not a computer-hooked-to-a-TV one) is the day I'm finished with normal TV service.

Wait, it's 2011 and people are still surprised by the threat that Netflix poses? Jesus, when is anyone in any media industry going to get, anything?

I don't think that the author was expressing his astonishment with the fact that Netflix is threatening cable. He was just reporting the findings of a new study which show hard evidence. In fact, he states that "this jibes with both common sense and other anecdotal evidence we’ve seen.", so he's clearly not surprised.

Instead of dropping cable for Netflix: why not drop them all together and get an active hobby? We spend enough time indoors already in my opinion.

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