Three thoughts to ponder while waiting to test out a video-enabled iPod or read the press release (hopefully coming soon) from Sprint Nextel and three big cable operators about their wireless plans.
Paid On-Demand Views of Hit Shows. We asked readers to make a choice last week, in our online poll (see below). Granted, this was a small and unscientific sampling of opinion. But the popular view as of last Wednesday was to advise cable companies not to seek $1.99 downloads of hit shows (such as are starting to come onto the iPod) and instead to try and build libraries of free on-demand programming.
It was a loaded question because it assumed an either-or proposition — and cable companies could do both. But so far they haven’t.
Cable can certainly continue to extract on-demand freebies like the news programs NBC Universal agreed to provide Time Warner Cable last week amid an overall distribution agreement that, by the way, provides a hefty license-fee hike to USA Network. That’s a cost of doing business, and can provide promotional benefits to both programmers and distributors. But it seems clear no real hit shows are going to be offered up for free.
Question: Why aren’t there more experiments like the one that Fox Cable Networks did with Cablevision Systems Corp. in 2002 and 2003, to air Fox broadcast hit 24 and FX’s The Shield on demand, at first for free and later for $1.99 an episode?
Getting the rights to those shows was a tricky tap dance for Fox; it was only a trial and it ran its course. But striking other such arrangements — which programmers seem eager to do — would further test viewers’ willingness to pay a small fee for convenient viewing of the kind of shows they have to schedule time to watch or set aside hard drive space on a digital recorder to store. Doing it soon would capitalize on the iPod buzz — and keep those shows from locking into arrangements that exclude cable.
Sprint Could Have Stayed in the Cable Fold. The news that Comcast Corp., Time Warner Cable and Cox Communications Inc. were close to getting a mobile-phone partnership done was not a big surprise. The cable companies were known to be collectively shopping for a partner, and Sprint already has existing ties with several cable firms as part of voice-over-Internet protocol rollouts.
Once upon a time, in 1994, Sprint and several top cable companies had even closer ties. They got together to buy the wireless licenses needed to create the Sprint Personal Communication Services (PCS) network.
Sprint itself owned 40% and the rest was split among Tele-Communications Inc., Comcast and Cox. Beyond funding the digital network’s buildout, the partners had big plans to jointly develop wireless phone services for the cable companies to sell. (Time Warner at that time chose to start moving into wired phone service, then abandoned that approach and then made the more recent IP-telephony push.)
But the strategic part of the partnership — the joint development of phone services that would have benefited from Sprint’s expertise and brand — never came about. The cable operators agreed to sell their interests to Sprint in late 1998. The venture had become a mere financial investment, albeit one that paid off for the shareholders — at least until Sprint PCS’s stock tanked the last few years.
Question: Why didn’t they just hold the Sprint PCS partnership together? Cable would have had a wireless play long ago and be cashing in on all those text-messaging and ringtone-download charges they’re now coveting.
Cable Guys Speak to Telecom Crowd. Another reason for getting the Sprint deal done soon: it would fit Cox CEO Jim Robbins’s stated desire to obtain a wireless-phone option for cable companies before he retires at year’s end.
Robbins’s final months included a visit to the U.S. Telecom convention in Las Vegas last week. The definition of telecommunications providers has been expanding for years. It’s even the “T” in cable’s biggest trade association, the NCTA. Cox, even without Sprint PCS as a strategic partner, added landline phone service to its bundle of analog and digital TV and high-speed Internet service, starting in Orange County, Calif. Now Cox has 1.5 million phone customers, increasingly from voice calls over Internet protocols.
Question: Why did it take so long for the U.S. Telecom Association to invite cable and phone guy Jim Robbins to attend and speak? And, now, will cable conferences — including the National Cable & Telecommunications Association’s National Show — bring in some phone-and-video company bigwigs?