As usual in this space, I found a ton of articles that are signals of bigger things to come. Here are a few that caught my interest:
FCC may be helping consumers pay more for less
In the article FCC Chief Backs Usage-Based Broadband Pricing, I learned about the FCC Chairman’s proposal that has serious implications for all of us broadband hogs who love to stream lots of video. Basically, there is a movement toward a pay-as-you-go bandwidth model that cable companies would love, and consumers would undoubtedly hate. We consumers will hate it because not only our privacy, but our wallets are at stake. Stay tuned for December 21 when the vote on the proposal is due at the FCC. Here’s an excerpt:
The top U.S. telecommunications regulator on Wednesday endorsed the idea that broadband providers could charge extra for providing heavy Internet users with lots of online video or data-heavy services such as videogames.
Julius Genachowski, chairman of the Federal Communications Commission, backed “usage-based pricing” while outlining proposed rules that would bar Internet providers from deliberately tampering or slowing legal Web traffic.
Mr. Genachowski’s support for pay-as-you-go pricing represents a victory for cable and telecommunications companies because it clarified whether broadband providers had the power to charge by what users consumed.
For some great reading, check out the contentious comments and debate at the end of the article. Go there to find some quirky and rambling anti-government sentiment.
Netflix may need to prepare for a storm
Netflix needs to start preparing for some rough waters ahead, even though they hit $200 a share last week. At a recent Reuters Media Summit, studio executives talked about their thoughts on how to slow the much-loathed company. According to the execs, Netflix cannibalizes physical sales and encourages customers to rent and not buy videos. And this is severely hurting the studios’ bottom line.
Senior executives at three of the big six television and movie studios said they were seeking ways to contain Netflix — from delaying when Netflix can make new DVDs available to rent to raising the prices for digital programs.
This containment strategy was summed up well by Craig Kornblau from NBCU when he said rather bluntly last month:
“While there are things in the Netflix system that are clearly cannibalistic [to sales], there are things we can change,” he noted. “They can pay us more or we can reduce the quality of what we give them.”
Bah humbug. Between increased pressures from studios and upcoming legislation from the FCC, Netflix needs to prepare for some rough weather.
In other news, I continue to be amazed at Google’s insatiable hunger and huge stomach to buy, well, just about anything. Besides offering close to $6 billion for Groupon (which by the way as of today, the talks are off), they acquired a DRM company called Widevine.
What I found interesting with this move is that Google is continuing its march toward legitimate online video distribution. A key factor of this acquisition is that Widevine is a not only a member of Ultraviolet, but it is one of the approved DRMs. Therefore, in one quick acquisition, Google has become an integral part of Ultraviolet.
And it will be very interesting to see how Hollywood embraces Google in the inner circles of entertainment.
Questions for thought:
Is the FCC confused and/or evil?
Will Netflix continue its parabolic rise?
Will Google be welcomed in Hollywood?