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Tag: Bryan Gonzalez

  • Is Cord Cutting Really Happening?

    With consumers continuing to be unhappy with cable providers, a trend known as “cord cutting” has quickly risen up. The concept has gained a lot of attention over the past couple of years especially since more Internet alternatives have become available.

    Is cord cutting actually a trend or is it simply a threat that consumers are sending to cable companies? What’s your take? Please share.

    According to a report from ISI Group, cable went from having more than 53 percent of the video market in 2010 to less than 50 percent in 2011:

    While it appears that cord cutting is a growing trend, a couple of other reports actually indicate the opposite. Bernstein Research found that pay-TV subscribers grew last quarter. Although the increase (0.2 percent) wasn’t significant, it’s enough to raise some questions about the so-called trend of cord cutting.

    What’s more, Business Insider Intelligence found that there was “no meaningful evidence to bolster the much-heralded ‘decline of TV.’” (Emphasis not added.) Alex Cocotas explained that, while cable has lost some subscribers, bundled Internet, telephone, and TV packages have grown.

    Bryan Gonzalez, Director of Social Entertainment Labs at the Entertainment Technology Center at USC It’s clear that a lot of consumers are unhappy with cable options, but these recent reports can’t help but make one wonder what is actually happening. According to Bryan Gonzalez, the Director of Social Entertainment Labs at the Entertainment Technology Center at USC, there are many challenges to cord cutting.

    Services such as Netflix, Hulu, and Apple TV can be very effective, but there is a downside to some Internet options. For instance, with March Madness in full swing, basketball lovers may not be able to find all their favorite games online. In addition, a lot of the Internet services don’t have current content, which is a problem for some consumers.

    As Gonzalez explained, many consumers are trying to get away from cable and are looking to Internet and satellite options instead. However, some appear, as the above charts suggest, to be going back to traditional content even though they aren’t completely happy with their choice.

    Time Warner’s CEO Glenn Britt, in a move to counter some of the negativity from consumers, recently laid out a plan for a low-cost package of channels to offer. This experiment has yet to be implemented but some, including Gonzalez, believe that it could be effective.

    “By creating these smaller, cheaper packages, you’re really gonna bring back some of the folks who might have gone away for a little bit,” he said.

    Another challenge to cord cutting is bandwidth issues. Unfortunately, this is a problem that is expected to increase as more devices such as the new iPad come out. With these types of devices combined with growing families, consumers are going to need more bandwidth.

    Britt also discussed a second experiment that Time Warner is working on that addresses bandwidth issues. According to him, Time Warner is testing a metered-usage Internet subscription plan in Texas, which means that tiered data cap could be proposed in the future.

    “As soon as you start to limit that, I think that they’re gonna run into that wall pretty quickly,” said Gonzalez.

    “You’re gonna see a lot of consumer pushback on that,” he added.

    Over on InverstorPlace, Anthony John Agnello issued a warning to Time Warner in regards to this experiment:

    “Time Warner needs to tread very carefully, though, or it will lose more than just cable subscribers. For years now, Web users have been vocal opponents of usage-based billing and attempts to cap data. Time Warner attempted to introduce usage-based billing in 2009, but consumer outrage prompted the company to abandon its plans. The same thing happened to competitor Comcast (NASDAQ:CMCSA) when rumors swirled that it intended to start billing based on usage, but Comcast gave up those plans by December 2010. As reported by Stop the Cap, a consumer advocacy group devoted to blocking usage-based data plans and data caps, Comcast applauded Time Warner’s announcement but shied away from saying whether or not it would follow suit in the future.”

    In an effort to solve some of these challenges and bring cable and Internet streaming together, Netflix attempted to partner with Comcast but was rejected. According to FierceCable, Comcast issued this response to the offer:

    “We have no plans to offer access to Netflix to our customers through our Xfinity TV service, no matter what device,” said Comcast spokeswoman Alana Davis.

    The marriage of the companies was a puzzle to many since Netflix has, for a long time, distinguished itself as an alternative to cable. Gonzalez told us that, even though the companies did not reach an agreement, it was encouraging that an attempt was made. Furthermore, without Netflix’s existence, products such as TV Everywhere would probably not be around either.

    “Before Netflix, Comcast and Time Warner would have never offered that or thought about that,” he said.

    In other words, the advent of Internet alternatives has brought more choices to consumers. While the issue of cord cutting is still being debated, it is clear that these services will play a large role in the future of pay TV. In fact, Avner Ronen, the CEO of Boxee, told WebProNews that the trend toward viewing content online would increase going forward.

    “The transition toward more video over the top that’s coming over the Internet such as Netflix and Hulu and iTunes is inevitable,” he said.

    (Here’s the full interview:)

    Gonzalez agrees that Internet options will be significant but believes that consumers will ultimately gravitate toward some sort of combination of online and traditional services.

    “In the short term, I think cable and satellite and broadcast are still… the most effective way and efficient way to distribute video,” he said. “However, I see the future more as a hybrid.”

    What would you like to see going forward? Are online services the answer, or, do you still need what cable and satellite operators offer? Let us know your thoughts in the comments.

  • Verizon & Redbox Join Forces, But Will It Really Hurt Netflix?

    Verizon & Redbox Join Forces, But Will It Really Hurt Netflix?

    The digital streaming space is about to get more crowded as Verizon and Redbox prepare to launch their own service. Yesterday, Coinstar, Redbox’s parent company, and Verizon announced they were partnering in a new venture. The companies are combining Verizon’s video on-demand streaming and download service with Redbox’s popular DVD kiosk service.

    Does the venture from Redbox and Verizon sound like something you would want to purchase? We’d love to know.

    Verizon and Redbox hope to give consumers an option that is a “simple and affordable way to access the video entertainment they crave.”

    Speaking about the partnership, Coinstar CEO Pau Davis said:

    “Consumers rely on Redbox for the latest new release movies at a great value, and our joint venture with Verizon will enable us to bring them even more value by offering expanded content offerings and greater flexibility for how and when they enjoy entertainment.”

    “Together, we are erasing old technology boundaries, freeing people to spontaneously enjoy the entertainment they want, whenever they choose, using the devices and media they prefer, at home or away,” added Bob Mudge, Verizon’s President of Consumer and Mass Business Markets.

    Since the unnamed service is very similar to Netflix, a lot of people are wondering what will happen to it once this new venture launches. What’s more, the past several months have been rather rough for Netflix after it dramatically raised its prices last September. Consumers were outraged and some even dropped the service, as Bryan Gonzalez, the Director of Social Entertainment Labs at the Entertainment Technology Center at USC, explained in this video:

    Bryan Gonzalez, Director of Social Entertainment Labs at the Entertainment Technology Center at USC WebProNews recently caught up with Gonzalez again to talk about this latest development. According to him, Netflix has to continue to focus on its content in order to effectively compete with Verizon and Redbox’s service.

    “For Netflix to really continue competing, I think they’re really gonna need to push hard and try to get as much content up front as possible,” he said.

    “As long as Netflix keeps that drum beat of fresh content – new content – to their streaming sector, I think they’ll do fine,” he added.

    Should Netflix be worried? What do you think?

    Gonzalez went on to raise an interesting point about the deal between Verizon and Redbox. As he explained, Netflix’s actions last year were part of a bigger effort to move away from its DVD service. However, it seems that this new venture focuses on the DVD side, which he believes could be due to accessibility issues that so many Americans face.

    “A lot of Americans still don’t have very fast Internet connections, so streaming quality isn’t as great necessarily for everyone as a DVD or a Blu Ray,” Gonzalez pointed out.

    Another potential issue he raised was in regards to Verizon’s current FIOS cable TV service. At this point, Verizon’s FIOS program is not national, but one can’t help but wonder what will happen since the new venture seems to contradict it.

    These details and others were not disclosed in the announcement but are expected to come as the launch date gets closer. The companies said the new service would be available during the second half of the year.

  • Google’s Strategic Move to Buy Motorola: Will It Work?

    Can Google pull off its bid to buy Motorola Mobility for $12.5 billion? This is the question that many people in the tech and mobile spaces are asking. There’s no doubt that it’s a strategic move on Google’s part, but it does raise some issues.

    How do you see this deal impacting both handset makers and consumers? Share your thoughts.

    For instance, the deal would definitely change the mobile landscape. Google, which of course has its Android platform, would also become a mobile handset maker, if the merger goes through. With this in mind, one cannot help but speculate that Google could use Motorola to build all its flagship phones. Although Google makes it clear that it would run Motorola separately from Android, the speculation is still present.

    “The truth of the matter is, when you have yourself a hardware company, and an amazing one at that, it’s going to be hard not to want to encourage them to create the best product out there,” said Bryan Gonzalez, the Director of Social and Digital Media Technology Labs at the Entertainment Technology Center at the University of Southern California.

    What’s interesting is that other mobile manufacturers including HTC, Samsung, Sony Ericsson, and LG, have actually spoken out with praise for the acquisition. Gonzalez told us that these companies are committed to Android and want it to succeed, even at the expense of a competitor being bought by the platform creator.

    He went on to say that the companies are hoping the acquisition will help Google make Android better, so that they, in turn, can become more effective when competing with Apple.

    “By Google getting close with a hardware company, maybe Google will learn to appreciate the hardware side of it much more, and even be able to leverage better functionality in the future,” he added.

    There have also been some questions raised in regards to the openness of the Android platform. Google has also said that it will keep it open, and while Gonzalez believes that it will for a while, he doesn’t know if it will be able to keep it open for the long term, especially with all malware issues that the Android app store has experienced over past few months.

    With this acquisition, Google is also hoping to solve some of its patent woes. Through the deal, it would have access to Motorola’s existent and pending patents, which would help it avoid legal trouble from Apple and Microsoft.

    “They’re really just trying to protect themselves from future litigation,” said Gonzalez.

    The other part of this deal that has not been covered as extensively as the mobile side is the home devices and video solutions side of Motorola Mobility. Through this division of the business, Motorola makes set-top boxes for cable companies. For Google, this means that it could incorporate Google TV into these set-top boxes and potentially create a Netflix competitor.

    The problem with this is that Google doesn’t have the same relationship with content creators that Netflix has. Gonzalez believes that the reason for this is, in part, because Google needs to find a business model.

    “Up to this point, I think Google has been so focused on the technology that they really missed the business aspect of it,” he said.

    In regards to how the acquisition would impact consumers, Gonzalez told us that the deal could be beneficial since it would likely encourage all the handset makers to produce better phones. He also believes it will pass regulatory approval because the mobile market would still be large and therefore, prices would still be low.

    Do you think the acquisition should go through?

  • Netflix: Is It Worth the Price Increase?

    Netflix: Is It Worth the Price Increase?

    Before last month, Netflix was loved and praised. Although it wasn’t perfect, it was still considered a great service for a really great price. This dynamic, however, changed when the company announced some major changes to its pricing structure last month.

    In summary, the changes did away with the joint streaming and DVD subscription service and made each service its own at a rate of $7.99 apiece per month. For users that had the joint plan, they will have to pay 60 percent more if they want to keep the same services.

    Have you decided to drop Netflix or at least part of the service? Let us know.

    According to Bryan Gonzalez, the director of Social Media Labs at the Entertainment Technology Center at the University of Southern California, a lot of people are trying to determine whether or not they want to keep both the streaming and the DVD services. Other users have said that they are dropping the Netflix completely.

    It seems clear that Netflix’s action was a step toward moving away from DVDs. Although video streaming is still a very young industry, the company didn’t want to get left behind like Blockbuster did. There was also an obvious financial motivation, because, as Gonzalez explained, the company would have to have a lot of cash in order to obtain all the high quality content that it wants distribute.

    The user reaction to the news was quite loud, from what we could tell, but Netflix CEO Reed Hastings apparently thought otherwise. In the company’s recent earnings call, he said, “Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers.”

    Gonzalez told us that he thinks Hastings was trying to be optimistic about the situation. It is, however, worth noting that a recent report from The Diffusion Group found that even though 70 percent of users were disappointed by Netflix’s price hike, only 12-15 percent would actually cancel their services.

    “The fact that there were so many Netflix users that were upset, kind of really proves to you how much Netflix is really loved, or at least used,” Gonzalez said. “Truth be told, Netflix is still a pretty good deal compared to all the other offerings out there.”

    If users do decide to jump the Netflix ship, he pointed out that there were other alternatives for them such as Amazon Prime or pay per view models like Apple iTunes or Vudu, Walmart’s new streaming service.

    “The positive news for consumers, and everyone, is that there are tons of options out there and maybe this will expose the market or the user to this great market of content,” he said.

    Gonzalez believes that there are other players that could benefit from Netflix’s move as well. For instance, any company that is trying to figure out how to distribute content could take this as a learning experience. Additionally, he thinks that consumer electronics manufacturers who have TVs with built-in apps other than Netflix will have more streaming opportunities as a result.

    “I think, ultimately, a lot of companies will benefit, not just because it will expose users to more options, but also, users will benefit because they’ll move outside of Netflix and see what else is out there,” he said.

    From the entertainment side of the business, it’s no secret that the studios are struggling to establish a business model around streaming. As a result, Gonzalex believes they are pleased to see Netflix and other players experiment with revenue models because “high quality content does demand a certain price.”