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HBO Go, Netflix, and The Beginning of The End?

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Who would have thought that Game of Thrones would save the future of mass media consumption in America?

Cord cutting, or the act of cancelling cable TV, is not just for broke twenty-somethings anymore. It’s gone mainstream. Recent studies show that educated, employed consumers make up most of the people choosing to cut ties with the cable box.

With the economy still struggling to keep us all afloat, people all over have been searching for ways to trim their budget and cable companies are quickly becoming first on the list. While cable providers still run the whole show off an infrastructure that is decades old and a technology that was new back when Seinfeld was still on NBC, consumers have just accepted their inordinately high cable bills. Providers have moved the pieces around the board for the last thirty years putting themselves in this position. Millions of people rely on their services for home entertainment, and they have reaped billions in the meantime. Just look at Comcast sitting up there on top of the world, owning a once-great broadcast channel and makin’ movies.. Awww… Aren’t they cute when they try to look as popular as Disney?

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This all started with the Telecommunications Reform Act of 1996. Where corporate lobbying and political corruption joined forces to sell us one of the biggest pieces of garbage legislation this country has ever seen. We’ve been eating it by the spoonful ever since. I don’t think the Act is the first time corporations have joined forces with the government to defraud the American people, but passing a law that supposedly promotes mass media diversity and air wave independence seemed like a great idea at the time.

Maybe I was just younger then, but I don’t remember always feeling like I’m getting fleeced from the moment I get up in the morning til the time I drop off at night.

Hindsight being 20/20, they basically all lied. Surprise! What the Act was supposed to do was make it possible for consumers to have more entertainment choices because all these independent cable/internet/phone providers were going to start up out of the woodwork, and Fiscal Nirvana was on its way. What really happened was it cleared the way for any company to buy any media outlet anywhere. Mergers, acquisitions, and twenty years later, there are four companies that provide comparable phone service. Three companies that own all of the radio stations. Two corporations that sell comparable cable services… And just one mega-conglomerate that owns the tap on high-speed broadband internet. These providers got us all hooked with the promise of freedom, then they created arbitrary price structures and manufactured obsolescence right into the system. With things like cable boxes, yearly cell phone model updates, and higher-definition picture quality, consumers just keep paying and paying. Not only are we thereby dependent on these monopolies to provide us the very things that make modern life modern, but they are free to charge us whatever they want for it. The only recourse we have is to stop using the services they know we’ve become dependent on.

So much for fostering a free and independent media market.

People are catching on, and the Comcasts of the world are living on borrowed time. Every time a budget-concerned consumer has to shell out more than they’re willing to for a “luxury” like internet or television, an anti-corporate angel gets its wings. The internet has accomplished one thing if has anything else, and that is to give a previously scattered and jumbled crowd of voices one giant megaphone with which to bitch in unison.

The collective kvetch might just save us all.

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Enter Game of Thrones, the wildly popular HBO series based on George R.R. Martin’s fantasy novels. On the air for four seasons now, Game of Thrones holds the special prize of being the most pirated show ever. The solitary fact that Game of Thrones is watched by millions of viewers that don’t pay for the right to do so has caught the attention of HBO execs who see a potential goldmine of opportunity there.

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Ever since Netflix began offering it’s cheap, reliable streaming service a few years ago for $8 a month, the company that started by sending DVDs to your mailbox quickly has transformed into a multimedia powerhouse. Watching one company rise from sending discs in envelopes into a critically-acclaimed entertainment studio in under a decade has other corporations scrambling for a piece of the pie. However, the major setback has always been the deals that cable companies struck with production studios and television channels. While there has always been an outcry for a stand-alone HBO Go app, the company wouldn’t risk losing the choice deals it has with packaged-channel providers.

Until now.

As of last week, HBO announced that in 2015, it will start offering access to its HBO Go app for a monthly fee, instead of making it exclusively available to cable customers, as it is now. I would like to believe that this is the beginning of the end that sparked when Netflix offered it’s first streaming service. I would like to believe that from here, cable companies will have to find another way to line their pockets while their customers jump ship for more and more stand alone products like Netflix and HBO Go.

The simple truth is that the Comcasts of the world rely on laziness. They rely on the fact that Americans want a shiny, reliable package. But as modern life gets busier and busier, and our time becomes more and more valuable to us, having a cable package that offers 700 channels of crap versus the one thing consumers want to watch at any given moment… Well that’s just insane.

When we cut the cord in our house two years ago we thought that getting to watch out favorite shows would be a hassle. Guess what happened? The opposite, it got easier. Without 700 channels of crap to distract us, we only watch the shows and movies that we want to watch. While it does take the always enjoyable “what’s this random movie/show?” scenario out of our daily life, paying another $50-75 a month to Comcast to watch a handful of hours of television a week is just crazy. That is, until all these new stand alone services start adding up to more than a cable package of course, but I’m just cynical like that.

Watching shows and movies across a handful of devices and consoles might not be as simple as picking up one remote and pushing buttons, but I’m not so lazy that I won’t spend a few moments setting up a show online to save myself a chunk of cash.

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I see a future where there are no set-top boxes where you have to skip page after page of programming you don’t want to watch to find the one thing you do. I see a future where you sit down at your television, queue up the next show you want to watch from your HBO Go or your FX Now app, and start watching on your home theater all seamlessly integrated. I see a future where cable companies that used to gorge themselves on the trough of our uninformed spending now have to fight for every dollar we choose to give them. I see a future where deregulation has actually created opportunity, instead of taking choices away from us.

Do I actually think that Digital Cable is going anywhere? No, there are way too many lazy people and Luddites out there to make that happen anytime soon. But at least I’ll be able to watch the next season of Game of Thrones by paying the studio that created it instead of some cable company that packaged it with 10,000 cooking shows and singing competitions.

Comcast’s $2 Billion-a-Year Secret

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How would you like to earn a $300-400 return on a $70 investment, give or take a few dollars? Let me ask you something else, are you happy with your internet provider? If you’re like millions of Americans who use Xfinity/Comcast’s high-speed internet, chances are you’re not.

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What if I told you that sending a message to Comcast is as easy as driving to the local big box store and making a simple phone call? Intrigued?

Let me explain:

Comcast is the big brother of cable providers, especially here in the Northwest. If you want digital cable and high-speed internet without a dish, you’ve pretty much got no other choice. While supposedly their conglomerate is not big enough to warrant an anti-trust fine, Comcast is a monopoly in the true sense of the word. They have a lock and key on the internet above 30mps speeds, and if you want to get that high-speed bandwidth, at some point you have to go through Comcast.

IMG_0481But what does getting internet from Comcast entail? For those already customers, we know this story front and back. The phone calls, the technician appointments, the service call windows that last all day and the guy shows up early anyway because another job was cancelled and you’ve got to go get the kids from school… Then there’s the equipment. With any internet package, you need a modem to translate that signal from the cable line into Netflix or Call of Duty or Cat Videos.

When you think about it, equipment rentals are the bread and butter of Comcast’s quarterly income. Think about the last time you looked at your Comcast bill. They have a piece of equipment for each service they provide. Whether you want digital cable (which means you pay at least $10 a month for a set-top box), or phone (which takes a different huge, expensive modem) or just plain-old high-speed internet, Comcast is going to charge you a monthly fee for renting that equipment… That’s just to get the service you’re paying for already.

I don’t know about you, but it doesn’t make any sense to charge customers a certain price for a certain service, and then turn around and say, “We’re going to need another $25 a month to allow your TV/computer to receive that service.”

In my book, that’s called “The Ol Okie-Doke.”

The truth is that these huge “providers’ get away with this kind of behavior all the time. They laugh in the face of government regulation because they pay lobbyists a lot of money to make sure congress keeps passing legislation that helps companies like Xfinity/Comcast grow even more powerful. Because seriously, when was the last time a Senator worried about his internet bill? The people that have the power to make decisions about whether huge multi-national conglomerates are not fleecing the rest of the 99% just don’t think about these kind of things… Not because they’re bent, corrupt stooges, but because they’ve never had to sit down and decide whether they can afford to keep INTERNET or not.

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The way to send a message to Comcast, and get a return on your investment, somewhere in the vicinity of 11% is simple. Most of the equipment you rent from Comcast is specific to the service they’re selling, for instance you can’t just go buy a set-top cable box and expect 700 channels. You have to “rent” Comcast’s.

This isn’t so for internet.

Last Saturday night, when our internet died, panic gripped the Toomb household. We’d been having issues for a while, with dropped signals and spotty connectivity… But we figured it was just the fact that we’ve got a house full of people that are constantly plugged in. We are bandwidth hogs. From high definition multiplayer video games to streaming HD movies and tv shows, we cut the cable cord almost two years ago and get all our entertainment through the internet. Therefore we rely on every drop of juice we can squeeze out of that connection. That plus the fact that my wife and I both work from home, when the internet goes out in our household, alarm bells go off and a ticking clock starts... The ever-constant pressure to get the network back up before Monday hits.

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I spend most of the night troubleshooting with the friendly Comcast operator before he confirmed my suspicions by letting me know the modem was dead and I needed to take it in to the nearest Comcast office to swap it out for a new one. That and take the opportunity to tell me how he can save me such and such by switching to whatever.

That’s when I realized that I could just go out and just buy a new modem and have Comcast register it over the phone… And it hit me… I’m paying $8 a month for nothing. I’ve had a Comcast account in my name since 2002, a fairly long-term customer. At $8 a month for 12 years, that’s a cool $1,152 I’ve paid in rental fees for a modem alone.

It actually makes me cringe.

If you figure the average lifespan of a modem is 3-5 years, I could have bought 3 brand new from the store and saved myself $989 in the mean time. This time I didn’t hesitate. I looked up the exact same model that Comcast rents now and found it for $69 at Walmart. That $69 will save me $315 if the modem only lasts 4 years, and $411 if it hangs in there for 5.

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Comcast has something like 22 million customers, and at $8 a month, modem rentals are a $2 billion a year business. That’s $2,000,000,000, with 9 zeros. Imagine if every person that pays that $8 a month took their next paycheck and bought a comparable $60-80 cable modem. When was the last time you heard about a company losing $2 billion a year and not get shaken to the foundation?

The only way to let Comcast know that we are unhappy with this system is to do just that.

The numbers don’t lie, if any company lost $2 billion in profits, their stockholders would be screaming for their heads, holding pitchforks and torches high. I don’t know about you, but I personally think Comcast has a little pitchforkin’ coming. I mean, seriously, if $8 a month is worth two billion a year, imagine what they make from HD DVR boxes that they charge upwards of $15-20, and that’s just for one television. If you’re crazy like me and want high definition on the various high definition televisions in the house, you’re shelling out rental fees like nobody’s business. So go ahead, grab your pitchfork…

Here is the modem I bought, I’m not being paid to recommend it, there are just a boat load of options and this one is a good, solid bet that is compatible with Comcast’s system.

http://www.walmart.com/ip/Motorola-SB6121-SURFboard-DOCSIS-3.0-Cable-Modem/20742485