Get Ready for Even More Retrans Fights in 2011

The New Year has barely begun, but already consumers are faced with TV blackouts after broadcasters and pay TV distributors have been unable to reach new agreements for retransmission rights. But while the latest disputes have hit a limited number of satellite subscribers, the ongoing trend shows a rift that could permanently change the pay TV landscape.

Local stations went dark for some DirecTV subscribers over the weekend, as Northwest Broadcasting pulled local stations Binghamton, N.Y.; Medford, Ore.; Yakima and Spokane, Wash.; and Laredo, Texas when the two failed to reach a retransmission agreement before a Jan. 1 deadline. And Dish Network failed to reach a deal with Frontier Radio Management, which licenses local Fox affiliate WGXA in Macon, Georgia and digital multicast ABC affiliate WGXA-D, Broadcasting & Cable reports.

Time Warner Cable has avoided the same fate in its retrans negotiations with Sinclair Broadcasting, which the cable provider says carries broadcast programming that is viewed by 4 million of its subscribers. By agreeing to a two-week extension at the 11th hour, Time Warner Cable has bought itself some time, but it is not out of the woods yet. That said, Sinclair could have lost a good deal of leverage in its negotiations; as BTIG Research analyst Richard Greenfield points out, all college football games and all local NFL games will be played by January 15.

TV blackouts were all the rage in 2010, as negotiations got increasingly heated between TV programmers and distributors. Last year, the number of blackouts that consumers faced broke records, as broadcasters asked for higher rates while distributors attempted to hold the line on the rates they charged consumers. For the most part, pay TV distributors have been unsuccessful on that front, with rates rising between 5 and 10 percent last year, and more increases being on the way.

The negotiations between Time Warner Cable and Sinclair are particularly interesting. The cable provider says it has offered a number of different options to the programmer, including the option of arbitration and the ability to offer Sinclair stations on an a la carte basis – a proposal that would be anathema even just a few years ago.

If Time Warner Cable is serious about making channels available a la carte, it could be the beginning of the end for how we think about the cable bundle. Already the cable company has announced a lower-cost cable package targeted at low-income subscribers that strips out some of its more expensive programming. But that bundle is a half-measure that seems unlikely to gain real traction. True a la carte would allow consumers to cut out programming they didn’t want to pay for, but could be disastrous for cable programmers — especially niche programmers — that don’t draw huge audiences.

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Survey Says: Netflix Turns TV Viewers Into Cord Cutters

Almost every other user of Netflix’s online video offering is considering canceling his pay TV service, according to a new J.P. Morgan Consumer survey, MediaMemo reports. Netflix has long said that it doesn’t see itself as a replacement for cable television, but it’s becoming increasingly clear that its customers beg to differ: J.P. Morgan research found that 47 percent of all active users of Netflix’s streaming service (people who stream at least one to two videos per month) would consider to drop pay TV or have already done so.

Even Netflix customers that don’t make use of the company’s online offering seem to be tempted by the fact that they could always access it as a replacement for pay TV. 42 percent of these DVD-only customers said they’d be open to consider going cable-free. All in all, 28 percent of all cable or satellite TV subscribers said they’d consider to switch from pay TV to broadband video.

That’s in itself a huge number — in fact, J.P Morgan Analyst Imran Khan calls it “consumer-driven Tsunami.” However, the fact that Netflix usage has such a strong impact on this sentiment should clearly worry pay TV providers. These are not consumers that cancel cable out of economic necessity or because they don’t have another choice. These are consumers that have tried an alternative, and liked it enough to consider cutting the cord.

Of course, not all of these consumers will follow through with the idea. The absence of sports content and the presence of really tempting retention deals you get offered when you call to cancel your cable service will likely help to keep the majority of customers on board for the time being. But with Netflix making inroads with TV content deals, it’s only a question of time before a significant amount of its customers actually follow through.

Adding to this is the temptation of connected devices. Roku CEO Anthony Wood told us last year that every fifth Roku user has already cut the cord. Netflix is now available on more than 200 devices, and the company has been actively advertising the combination of such devices and its online service as a way to get movie and TV shows onto the TV screen. It recently launched a new ad campaign with TV commercials that exclusively focus on the $8 a month streaming plan and don’t mention DVDs at all. And where are those ads running? You guessed it: On cable.

Check out the most recent episode of our weekly web series Cord Cutters below:

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Anna Chapman Stars In Sexy Spy Parody On Russian TV

Erotic model, lion tamer and now–playing a sultry spy in a comedy skit on Russian TV. Yes, Anna Chapman is the story that keeps on giving.

As you may remember, the 28 year old–or, as the New York Post put it, the “red-hot beauty” and “007-worthy beauty”–was caught up in a bizarre string of spy arrests in New York last summer. The FBI at the time accused Chapman of passing secrets to an undercover agent posing as a Russian official.

Now, back home in Russia, Chapman’s cashing in on her notoriety with a high-profile turn as an actress on the Russian TV show Seventeen Moments of Spring. As the Toronto Star describes the scene (sorry our college Russian failed us):

With a piano setting the mood, an announcer embarks on the romantic tale where Chapman sits at a New Year’s party, staring longingly at Maxim Isayev, (a fictional James Bond-like hero from the legendary Soviet series), a few tables away from her.

“They had never met, because in the United States they do not show Seventeen Moments of Spring,” the voice says according to AFP.

Doesn’t sound all that funny, but then we don’t exactly have a modern Russian sensibility for humor, now do we? The skit–which was part of a big blowout New Year’s Eve special–ends with Chapman speaking:

If you have love hidden deep your heart, you will never succeed in concealing it. It is best to come out with it. And New Year’s night is the best time for this.

The Star suggests that Chapman may be thinking of a future in politics, saying she’s joined a pro-Putin youth group, and may run for parliamentary elections later in 2011. Of course we’ll keep you posted.

In the meantime, here’s the skit, in Russian and sadly fully safe for work, from YouTube:

Intel Moves DRM Into Chips for PC Streaming

Intel is taking a massive step toward controlling the way viewers get their content online with the introduction of a new processor that moves graphic processing and content protection into the CPU, according to multiple reports. The chip maker is also planning to launch a new video service, called Intel Insider, that will allow viewers to wirelessly stream 1080p HD video directly to their TVs.

The new processor, codenamed Sandy Bridge, has already been shipped to PC manufacturers and represents a major change in the way that content is protected from piracy. Until now, most premium content providers relied on software-based solutions to keep users from copying videos streamed to PCs. But by moving its content protection into the processor, Intel can keep those streams safe with no need for additional software from vendors like Widevine, which recently agreed to be bought by Google.

Intel’s creation of a processor with content protection built in also comes as the media and technology industries are seeking to create a standard that would enable consumers to buy a piece of content once and stream it on multiple devices. The Digital Entertainment Content Ecosystem (DECE), of which Intel is a member, recently announced the introduction of its Ultraviolet digital rights locker, which is designed to make this a reality. Intel’s content protection initiatives could theoretically make the PC portion of delivery easier by introducing a chip-based solution.

That could mean more content becoming available online, and in better quality. Already, Intel has signed up Warner Bros. to make its movies available in 1080p HD online at the same time they are available on DVD, according to the Wall Street Journal, something the studio has resisted in the past. Sonic Solutions’ RoxioNow will also reportedly take advantage of the chip, which could open up streaming for a number of digital storefronts; RoxioNow powers the digital video-on-demand platform for Best Buy, Sears, Blockbuster and others.

Sandy Bridge also integrates Intel’s Wireless Display (WiDi) technology, which the chip maker has enhanced to also support 1080p video. With WiDi, Intel will enable users with supporting TVs and receivers to stream HD video wirelessly to them.

While enabling graphics computing and content protection in the CPU may sound like a step in the right direction for Intel, it’s been down this road before. The chip maker failed with its Viiv-branded media chip platform, and has had a difficult time getting its chips into connected devices.

Photo courtesy of Flickr user Uwe Hermann.

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Another Reason Android Tablets Will Be Huge: TV

With dozens of Android tablets to be unveiled at CES this week, many wonder how these devices can possibly compete with the iPad. Looks like Vizio just found an answer: The company will tie its upcoming Via tablet closely to its best-selling TVs. Not only will the slate have the same user interface as the TV screen, but it will also work as a remote control for any Vizio TV.

We’ve been kind of obsessed with the idea of tablets as second screens here at NewTeeVee, and remote control functionality is a big part of that. A number of companies have already started to explore this space. Comcast recently made its iPad remote control app available to end users, and Apple TVs can be controlled via the iPad as well.

However, no one has made a massive push yet to offer millions of TV buyers easier access to built-in apps and online video services like Netflix. Vizio could do just that with its new tablet. Consumers could finally be able to navigate the Netflix catalog or search for Amazon VOD titles with a device that doesn’t require them to use a painful online keyboard. Plus, Vizio’s remote app will even work with legacy TV sets: The device will come with a built-in IR blaster, so you’ll always be able to change the channels on your TV set, whether it’s hooked up to the ‘Net or not.

That’s huge, and it’s one of those features that you’ll never see from Apple. Steve Jobs hates legacy technologies, and he doesn’t want his devices to interact with anything but Apple products and services. However, most people hate their TV and home entertainment remote controls, and they’d love nothing more than to replace them with something universal. Not everyone wants to pay a few hundred bucks for a Harmony remote, but a tablet that offers web browsing, video conferencing and an easy way to control your TV and Blu-ray player? Now we’re talking.

Of course, there’s no reason other Android tablet manufacturers couldn’t jump onto this bandwagon as well, and we should expect some of them to also embrace TV as a selling point for their tablets. The thing that Vizio has going for its Via tablet is its huge TV market share as well as its retail presence.

The company sold TVs worth $2.5 billion in 2009 and has been the number one TV seller during most of 2010. Offer all these customers an inexpensive tablet that works out of a the box as a TV remote, and you’ll enter a market with a huge potential audience. Sell the tablet alongside your inexpensive TVs in stores like Walmart or Costco, and you’ve got yourself a combo that’s hard to beat.

Check out the video interview with Method Inc. VP of Engagement John Gilles explaining why tablets work great as remote controls.

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Cord Cutters Survival Stories: It’s All About Value

What is it like to cut the cord from pay TV? What’s working, what’s missing, and what kind of equipment does the best job replacing the cable box? In our new weekend series, we’re asking cord cutters to tell us about their experiences. This week, reader Doug van Kirk talks about upgrading his gadgets and ditching his provider.

Like a lot of families, we signed up for Comcast’s triple play (basic cable, internet and phone) for $99 a month for the first year. Then the price went up. We got them to extend our intro price for 6 months, but after that our subscription skyrocked to over $150 per month. That’s a lot of money for a rarely used home phone, decent internet connection and 60 channels of highly pixilated and commercial-laden TV.

So we bought a new TV. Seriously. We finally tossed the old 27” Sony and bought a nice Samsung LED-LCD flat panel. But instead of upgrading to HD cable service, we got a refurbished HP slimline PC with Windows Media Center and a 1TB drive, added an HD Homerun networked TV tuner, and put an antenna on the roof. We pick up 79 digital channels here in San Jose, including about 10-12 public TV channels. WMC is my DVR and while it’s not as easy to use or as feature-rich as the TiVo Series 2 it replaces, it does record hi-def broadcasts. And of course, we use Netflix streaming to watch a lot of stuff.

Also, after installing an antenna and taking the box back to Comcast, I discovered that they send local digital channels – in HD, where available – unencrypted down the wire (QAM format) when you have broadband service. They also include unencrypted SD versions of a few cable channels. No ESPN unfortunately, but our system has Discovery, History, HG and a few others. Getting this working with Windows Media Center was a bear, but now that I’ve got it set up, it’s going well.

This was primarily a value-driven decision. It seems ridiculous that we should have to pay money to watch advertising-sponsored programming, especially when so much of that programming is such poor quality. For example, I used to like the Discovery Channel, but most of their stuff follows the same tired formulas (ax men, ice road truckers, guys fishing, etc. ad nauseum), and the commercial interruptions are just incessant. And every year it costs more?

In short, cable TV is a lousy value. So now we pay Comcast $60 a month for internet access only. Between Netflix (discs and streaming) and recorded over-the-air broadcasts, we have more than enough content to watch. We particularly love Netflix for TV because there are no commercials (really important when you have kids). I’ve missed an occasional football game (I didn’t know Monday night Football was cable-only until after I unplugged), but when I total up the money we’re saving, I don’t miss it that much.

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Poll for the New Year: What Will Shake Up 2011?

2010 was a year of shifts and experiments as the power of streaming content began to truly change the business of entertainment. And 2011′s undoubtedly only going to be more crazy in that regard, as new deals are made and business models get tested. But what’s going to be the source of those changes?

We want to know what you think will be the biggest force of disruption over the upcoming year. Which is why we made you this handy poll!

If you chose the last option, by the way, feel free to expound in the comments on what you think that unknown service could be. What do you think the industry needs to continue growing? A new set-top box? A new universal content provider? The possibilities seem endless. It’s a big wide world out there. A fresh new year.

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