USA Today Validates Cord Cutting Prediction

Just to help us to keep track for our end-of-year- report card on our trends, USA Today recently wrote about cord cutting.

Check out the article: "Are you ready to cut the cord? As many drop their cable provider in favor of streaming, is cutting the cord worth it?"

Personally, I think the number of services you need to subscribe to ends up being more complicated and incomplete -- though still less expensive on a monthly basis. Hulu Plus, Netflix and Amazon come to $22 per month (if you exclude Netflix's DVD-by-mail service). If you cut the cord, you lose access to live programing but you save $80 per month. That's a lot of money you can save if you don't mind an imperfect solution.

Over the next 18 months, given devices like the new Xbox One (See USA Today article: "How the Apple TV can compete with Xbox One"), which aim to be an all-in-one entertainment box for your living room, we think more people will consider cutting the cord.

One question is will services like HBO, Showtime and Cinemax, which all have apps for cable subscribers, will open up access to non-cable subscribers. How much would streaming customers be willing to pay for Game of Thrones?

Birnbach Communications' Top Predictions for 2013, Part II

We expect the media to report on several tech battles in 2013 including:

·         The Battle for the Living Room.  Who can supply the highest of the ultra high definition TVs? At CES, there was a battle between OLED (organic light-emitting diode) versus 4K high definition known as UHD (ultra high def), which offers four times the pixels of 1080p high-def displays. However, a similar problem that plagues 3D TV – lack of 3D content – will likely plague UHD because UHD TVs work best with video shot in UHD. Additionally, UHD requires a lot of memory: UHD movies need 10 terabytes, which is about 2,500 times more than a standard HD movie and comes at a time when most Americans don’t even have one terabyte to hold all their movies and music. Another problem: The huge cost of UHD sets: an 84-inch set currently costs $25,000 – raising two important questions: “For the same money, do you buy a car instead?” And “Who has the wall space to display a seven-foot screen?

·         Battle between different streaming services and cable’s embrace of streaming.  Until last year, this was basically a battle between Hulu and Netflix and Amazon Prime. This year, the market got more crowded, with the entry of Redbox along with cable and satellite companies now offering streaming video.  Don’t expect prices to drop from around $5 to $10 per month.  (If people are subscribing to streamed video services to watch on their tablets, what are the implications for TV manufacturers getting ready to sell $25,000 TVs?) Because Netflix is the only public company offering streamed video, we expect that its earnings will get a lot of coverage because it will be seen as a belle weather for the entire industry.

·         The battle among huge companies. Apple v. Google v. Samsung and Microsoft. Oracle v. Everyone Else. The media have a boxing ring mentality: They love to report on the battle between two competing companies. So we expect continued high level of coverage of Apple, Google, Samsung and Microsoft in their battle for supremacy. Of course, those four hypercompetitive companies are often battling other companies as well. (Yes, we've included this prediction in prior years – we feel that the media continues to be fascinated by this story and see no end in sight.) Interestingly, over the past year, Samsung has leveraged Android to become a major global player in the smartphone and tablet sectors, which is having an impact on both Apple (as an iPhone and iPad competitor) and on Google (since Samsung, as the de facto Android leader, could ask to renegotiate its agreements with Google, cutting Google’s margins).

·         The Battle for Map Supremacy: Apple v. Google v. Nokia v. Microsoft v., Amazon. Apparently there’s big business in offering maps – even though most map providers don’t charge users for directions. Instead, they make money through mobile ads and services. We think that this should get more attention in 2013 as a result of Apple’s initial map app fail. Mapping is important because in order to be successful at enabling (and charging for) hyperlocal marketing, those companies need to be proficient at mapping.

 
Let us know if you agree or disagree. Check back tomorrow for additional predictions or click here for Part I predictions.

More Validation of our Cutting the Cord Prediction

Lots of stories appearing in print and online are validating our "Cutting the Cable" prediction that people are moving away from cable.

Here are some recent validation:

• WSJ: "Glenn Beck Rallies Troops for Revolution Against TV": I didn't expect to agree with Glenn, but he's right. People are now actively looking for alternatives to traditional TV networks that they can access from their PCs, tablets and smartphones.
• WSJ: "Plans for 'TV Everywhere' Bog Down in Tangled Pacts": provides insights how "TV Everywhere" is more at the concept stage, and has not yet reached the service phase. This article makes the point that it's not so much a technology issue that's holding back "TV Everywhere," as much as it is the legal/licensing issues that are gumming the works.
• NYTimes: "Netflix Said to Be Aiming for a Cable Partnership": Again, it's not the technology, it's the licensing.
• WSJ: "The New Cable-TV Guy: Intel; Chip Maker Working on a Web-Based Video Service to Compete With Cable, Satellite Providers": Intel wants to get in the video streaming game (can't really call it just TV anymore).
•  NYTimes: "DVRs and Streaming Prompt a Shift in the Top-Rated TV Shows": Oh yeah, DVRs are not dead. Yet. But the shift in viewing habits is already here -- the tech and legal solutions have to catch up to demand, in our opinion.

In going through some clips, we realized there's one story prediction we did not make -- but should have. We think that the car of the future will continue to be a big ongoing story trend. The car of the future includes all sorts of built-in technology like web access, iPod/iPhone/iPad interfaces, etc. as well as the big concept: the driverless car. Google and others have already demonstrated driverless cars. But there are legal and security issues involved before driverless cars go mainstream.  (Based on the people I see driving around me, personally, I can't wait for driverless cars -- they've got to be safer!)