TV, Internet, Phone- The powerful triumvirate?

Does the power of three pose a monopoly threat, or rather  greater quality and ease in paying the bills to one company?  Verizon, Time Warner, and Optimum, are three companies that provide cable for television, Internet and phone service.  They, like other companies, draw in the consumer by offering great deals and savings, however this is usually only for the first year. Purchasing the deal may be contingent on the person signing up for more than a year, during which a company could potentially jack up the rates.

With any of these Internet Protocol service providers, data is transmitted through a cable and passed onto all three mediums through Internet Protocol, or certain groupings of bits.  Thus, it can be easier for the consumer who chooses all three because the reception is simple and there is essentially unlimited bandwidth for the companies (thus far), so their is no need to worry about an overload.  IPTV, which is Internet Protocol that is specifically passed through television by IP providers, remains on a private network.

Verizon has currently set its rate at $74.99 per month for a year for all three services.  However, to find out about later rates, Verizon requires that the buyer put in personal information before they can obtain more detailed pricing information.  For Time Warner, their rates are a bit higher but they offer more perks up front such as HD DVR for three months and unlimted calling in the U.S., Canada, and Puerto Rico.  If one wanted to purchase all three services, he or she would have to sign up for each for a year to keep the fixed rate of $49.95 a month for cable, $34.95 a month for Road Runner Internet, and $39.95 per month for phone service, a total of $124.85 a month for all three, about $1,500 a year.  While this plan may seem enticing, it requires like Verizon that the consumer give personal information before they can obtain long term rates.  As for Optimum’s Triple Play plan, they provide great detail up front about the services they offer.  For example, they allow the consumer to compare their upload and download rates with other “typical” carriers, granted, Optimum is providing this information.  However, when it comes to rates, it also mandates that the buyer to purchase all three for $29.95 per month for a year.

Verizon pic from Google                Optimum pic from Google                   Time Warner pic from Google

While it is easier to pay one bill monthly and receive awesome perks for signing up for a three-for-all, in the long run, sticking with one company for all three might lead to too much power and dependency on that one company by the consumer.  On the other hand, for the company, offering television, Internet, and phone for the buyer could yield greater brand loyalty for the consumer/s, especially if they are parents because they could potentially pass that brand loyalty down to their children, who media companies have the hardest time targeting and strive the most towards pleasing.

Online and On-Demand:The not-so-linear programming of TV

IP Video, video that is streammed on the Internet, is another form of media with which television has had an axe to grind as of late.  Before this and other forms of non-linear (on-demand) programming, viewers were forced to place their behinds on the couch to watch their favorite show at the time it was aired or else they would show up to work the next day with nothing to talk about.  However, through mediums such as DVR, VOD (Video on Demand), and IP Video, people have control over what they want to watch, when they want to watch it.  This newly-given power to the consumer is largely in part of what is destroying the television industry.

When networks such as Fox, began to stream episodes of their shows online, this drew an influx of popularity from all viewers, particularly those of a younger demographic.  People could catch up on missed seasons of Family Guy without having to purchase the DVD’s or take a trip to the nearest video rental store.  However, for anyone who missed the most recent episode, they would have to wait eight days before they could view it, and since most shows occurred weekly, this upset the dynamic of viewing shows in weekly order if they couldn’t be caught at the time they were broadcasted.

Thus, the creation of absolute demand sites like youtube.com exploded, particularly for viewing clips of whole episodes.  This didn’t last long, however, because there was no revenue for the networks and people were basically pirating and uploading, a marker of huge copyright infringement.  Then came sites like hulu.com.

With this sort of a streamming website, viewers could watch whatever, whenever, for essentially “free,” with the exception of having to own a computer, internet, electricity, AND watch advertisements that the site incorporated into its programming, pretty much like the old viewing model of broadcast television but online.  The viewer must watch and cannot skip over one to two minute ads of cars and other programming, and second-long slides of advertisers that promote that the show is being brought to the viewer with “limited commercial interruption.” However, this innovative viewing model has one up on youtube for keeping a business model for advertisers while holding the interest of users who are generally younger and have the most things competing for their time.

Family Guy Picture from Google

If networks could find a way to adapt to the viewer’s preferred lifestyle either by adapting the ways of sites like hulu, at least for primetime programming and/or find a way to cut shows that function on expensive airtime that is being backed even less by advertisers, maybe these companies could find a balance in the happiness of the consumers and themselves, instead of trying to compete with non-linear programming  with bigger computer screens and less pixelation.

Although TV’s will not become antiques any time soon, broadcasting may emerge in a new form if it so wishes.  However, I will be watching the NCAA finals live on my large digital flat-screened television.