Comcast Exec: We Need To Change Customer Behavior, Not Our Business Model

from the good-luck,-buddy dept

Brooks writes "Speaking at a cable broadcaster's summit, Steve Burke, Comcast's COO, said: "An entire generation is growing up, if we don't figure out how to change that behavior so it respects copyright and subscription revenue on the part of distributors, we're going to wake up and see cord cutting." How's that for cart before the horse?

His ultimate goal -- to maintain or increase revenue for Comcast -- makes perfect sense, and is positively what a cable COO should be focused on. From there on out, though, he's off in the weeds. How about offering this new generation new and innovative services that are worth paying for? That's challenging, of course... but how challenging will it be to change the next generation's behavior "to respect subscription revenue." Yikes.

How many consumers, in any market, are focused on "respecting" vendors' revenue streams? How, exactly, does he propose to effect this sea change? And why not just develop products that consumers will willingly pay for, rather than trying to change consumer behavior in such a fundamental way?"

The quotes really are quite stunning. Burke basically seems to be saying the focus needs to be on figuring out ways to get consumers to change, rather than changing to match what customers want. A business model based on going against what consumers want doesn't seem likely to last that long.

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Will Comcast's Own Words Kill Its Lawsuit Against The FCC?

from the seems-pretty-damning dept

Last year, when the FCC was busy slapping Comcast's wrist for its traffic shaping policies, Comcast pointed out that it wasn't clear the FCC had the authority to do so. I tend to agree, actually. It's not at all clear that the FCC really has a mandate to tell private network operators what they can do with their network -- though, if that argument gets anywhere, it seems likely that a net neutrality-friendly Congress will quickly adjust and add it to the FCC's mandate. However, what was odd was that Comcast waited over a year before finally going to court over this issue. To be honest, I can't see what Comcast "wins" here, even if it wins the case. Congress would likely change the FCC's mandate. Separately, the FTC actually might have a stronger case here, as the real problem wasn't necessarily the traffic shaping, but Comcast's refusal to tell users about it, effectively providing false advertising to customers. That's an FTC issue.

But a much bigger problem for Comcast may be the fact that the company has had no problem actively promoting the FCC's supposed "mandate" over them when it suits them. In a separate lawsuit over the very same traffic shaping, Comcast tried to get out of the lawsuit by claiming it was an issue covered by the FCC:

This issue "i.e., the reasonableness of a broadband provider's network management practices" has, however, been firmly placed within the jurisdiction of the Federal Communications Commission ("FCC"), an administrative agency whose authority to regulate internet broadband access companies' services is well-established.

You have to imagine that this quote from Comcast will be prominently displayed by the FCC in response to Comcast's latest action.

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The Return Of Cable Boxes That Spy On You

from the wave-to-the-camera dept

Remember the outcry last year when a Comcast exec mentioned in passing the idea of a set-top box that would have a built in camera to monitor who and how many people were actually watching the TV? The outcry over that forced Comcast to say that it wasn't really going to do that, but Broadband Reports points out that the technology behind such a plan is still moving forward -- and apparently cable companies are, indeed, interested in it. The idea is that it can show personalized ads and better target content. It's worth noting that the company behind the system, Prime Sense, seems to be trying to position it for less "scary" apps, such as being able to do "virtual touch" interfaces, so users could interact with menus on the screen without a remote (features found in some video games these days). Still, unless the end user is given total control over what info is recorded and where it's being sent, this technology seems like a non-starter.

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Godzilla Takes On Comcast Over Trademark

from the this-should-be-fun dept

We all know that Monster Cable has a long history of being overly aggressive when it comes to trademarks, but it's not the only trademark "monster" out there. Apparently, Toho, the owners of the trademark on the monster Godzilla are equally, if not more aggressive. In Godzilla's latest battle, he's not taking on Mothra, but Comcast. Apparently, Comcast is running some sort of ad campaign for "Comcast Town" which looks sorta like its own version of Sim City. But within this Town, there's a monster that will sometimes stop by and destroy things... and (yup) that monster bears a passing resemblance to Godzilla, and Toho is not happy. And, apparently, you don't want to make Godzilla's lawyers angry (yes, mixing fictional angry character tag lines here...). Comcast, for its part, denies that the character is Godzilla, though Toho doesn't buy it. Of course, you might ask where's the actual "harm" here, as it would seem to only help advertise Godzilla and Godzilla movies -- though, Toho would likely argue that the harm is in Comcast not licensing the character (or the potential idea that this makes Godzilla "generic").

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If You're Going To Meter Or Cap Broadband, Shouldn't You Provide A Meter?

from the where's-the-problem? dept

With various ISPs implementing forms of capped or metered broadband, you would think it would be standard (if not required) that they also provide consumers with the tools to measure their consumption. Otherwise it seems a bit unfair to say you can only use x amount, but you have no way to know when you've actually done so. But, it seems that hasn't really stopped various ISPs. News.com is noticing that despite capping broadband connections at 250 gigs/month for many months (and rumors and screenshots of it), Comcast still refuses to deliver a broadband monitoring solution for users. If that's the case, it makes you wonder how accurate/reliable its own internal monitors are, and how it can guarantee that users actually get the 250 gigs they're promised. Perhaps I'm missing something, but is it really that difficult to measure broadband usage? If so, that would seem to be yet another reason that ISPs might want to stay away from metered broadband: the cost of developing a system to actually track it.

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Cable Walled Garden TV Plans To Include Too Many Ads

from the of-course-they'd-screw-it-up... dept

We've already been incredibly skeptical of the plans by certain cable companies to get TV networks to limit their content such that it can only be accessed online if you have a cable TV subscription. The whole thing is based on setting up artificial barriers and artificial scarcity to hold back the inevitable. Such plans never do well. They piss off users and drive them to alternatives. And, of course, you just knew that the likes of Comcast and Time Warner Cable would like screw up the execution too. Many folks (myself included) have been surprised at how well (for the most part) Hulu executed, but just leave it to big cable companies not to learn from Hulu's success.

Reports are coming out claiming that when the shows are put online for this "TV Everywhere" program they'll include the full slate of ads seen during the regular TV version. Studies have shown that this is a bad, bad idea. Having so many commercials -- especially on a platform (the internet) with so many other options, simply drives people away. Hulu learned very quickly to limit the number of ads to just a few -- and it's discovered that (1) people actually pay attention to them and (2) they can charge higher rates. One more sign that this TV Everywhere program is a disaster in the making.

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Dear Comcast: The Idea When You Bundle Is That People Are Supposed To Get A Discount

from the just-saying... dept

When companies offer "bundles" of the various services they offer, part of the point is that if you're buying multiple packages together, you get some sort of "discount." It doesn't make much sense to go in the other direction, but apparently Comcast thinks it does. Reader Lucas points out that the company is currently offering the following "Digital Double Play" bundle, which consists of both the "Comcast High Speed Internet, with Powerboost" and the "Comcast Digital Starter Package" for the temporarily discounted bundle price of $69.99/month for six months (after which, the price jumps to $109.90/month).

Ok. But let's look up the components separately. It appears that the basic high speed internet with Powerboost is available separately as a promotion at $19.99/month for six months, after which it becomes $42.95/month. And then there's the Comcast Digital Starter Package. That appears to be offered as a promotion for $29.99/month for six months (after which it jumps to $59.95): So... at a first pass, it looks like you could order each package separately and pay $49.99/month for six months and $102.90... or you can buy the "bundle" and pay $69.99/month for six months and then $109.90/month afterwards. What a non-bargain! Of course, if you start to look closer, it's a little bit different. The digital TV package, even though it's described as the "Digital Starter Package" also includes the on-demand library. So if we dig deeper into Comcast's options, we find that the equivalent tier isn't actually the "Digital Starter Package" but the "Digital Preferred" package. Kind of odd that you'd sell the digital "preferred" package while claiming it's the starter package -- but that appears to be what Comcast is doing. So, with this package, the six month promotion is $44.99/month and then it jumps to $76.90/month: So, now, the "unbundled" combined offering is actually $64.99... Still $5/month cheaper than the "bundle" -- and without the bundle at least you get the satisfaction of knowing you have the "preferred" package, rather than the "starter" package (oh yeah, and of paying $5 less than the suckers who bought the bundle.). But then, finally, after six months, your price will jump to $119.85 -- or $10 more expensive than the bundle. So perhaps there is some method to the madness, but Comcast sure doesn't make that very clear.

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Comcast And Time Warner Team Up To Control What TV You Watch Online

from the consumers-anyone? dept

There's certainly been plenty of talk lately about how efforts like Hulu to move television shows online could undermine the television industry as people start to realize that they don't need to pay gobs of money to a monopoly cable provider (other than maybe for broadband). The TV content folks believe this is a problem as well, because the cable companies currently pay them corporate-sized gobs of money for the rights to offer their channels to end customers. This leads to regular fights between cable companies and content providers -- but neither really want to see that old system go away. The cable companies want end users to keep paying monopoly-inflated gobs of money, and the content creators want that hefty check from the cable companies.

So, it was no surprise back in February to hear of plans to make agreements between cable companies and content providers that would limit what kind of video you could watch online, requiring you to be a cable company subscriber and "authenticating" what you could watch. Thus, it should be no surprise that Comcast and Time Warner are now announcing exactly that.

This should raise all sorts of antitrust concerns. First, you've got industry execs working together to limit consumer choice, and these industry execs already have quasi-monopolies in certain regions. And they're doing this to keep prices high against competition from the internet. Doesn't that seem like a problem?

The real issue, of course, is that the equation is (as it so often is with such companies) backwards. Rather than embracing what the internet allows these companies to do, they're trying to remove that ability, and make it act like good old television, with those good old revenue streams -- and, amusingly, claim it's "the future of television." Not even close. It's television's past, with an attempt to move it to the internet without any real advantages. As Om Malik points out in the link above: "The deal makes it painfully obvious that everything cable companies do... is done to save their video franchises." It's not about looking forward. It's about preserving the past.

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Time Warner: No Metered Broadband... But We'll Kick You Offline If We Think You Used Too Much

from the that'll-be-good-for-PR dept

So Time Warner Cable has supposedly backed off its metered broadband until it can figure out how to do a better job presenting it (though, it's also threatening to delay upgrades if people don't accept caps or meters). Yet, as reader Matthew Henry alerts us, it appears that Time Warner Cable has instead just started kicking "unlimited" users offline without much warning. Apparently, when the user called to ask what was up, he was told he shouldn't have used so much of his unlimited broadband account. This is the sort of stuff Comcast used to do years ago and which helped contribute to its awful reputation. Nice of Time Warner Cable to try to fix its own reputation by going down the same bad path.

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Are Cable Companies Looking To 'Emulate' Web Video Sites, Or Destroy Them?

from the face-value? dept

A piece in BusinessWeek says that cable TV companies are "pushing to become more Web-like" by expanding their online video offerings and making their core TV product work more like the web than the traditional channel-delineated system. On the face of it, this is a good thing, since we've long argued that the TV channel is an outdated concept, and should be seen as being like a web bookmark more than anything. But the article largely glosses over one key point in the cable companies' push to grow their online video efforts: they want exclusivity. So instead of throwing things open and using an ad-supported model, like Hulu, they want to take TV shows and video content, and lock it up inside a walled garden for paying customers. That's not "web-like", it's exactly the same as their current business model. Of course, even if these plans don't work out, they've got another way to try and profit from online video: by introducing capped broadband plans that will charge customers based on how much traffic they use. Time Warner's CEO is quoted in BW as saying "we really need to look at what consumers want." It's hard to imagine they want capped broadband, and they want video locked up behind paywalls. The popularity of the likes of YouTube and Hulu indicate they want something very different from what the cable operators have in mind.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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No You Can't Sign Up For A Comcast Account And Resell It Throughout Your Building

from the or-do-it-35-times dept

While some progressive ISPs such as Speakeasy have allowed customers to "resell" their connections via WiFi, most broadband providers frown on the practice. They don't seem to mind the casual sharing between neighbors, but it's not too surprising to see Comcast sue a guy who tried to set up an entire wireless ISP business this way. It's almost creative... he subscribed to Comcast broadband at 35 different condos, and then advertised his own "connectivity" within each of those buildings. It's hard to believe his defense will work:

He said Comcast signals are often used to power wireless networks at places like Internet cafes and other businesses that charge users for access. "This is a practice that happens throughout any city," Clark said. "Unfortunately, we're one of the bigger guys in town - so, here we are."

I think he'll find that most businesses reselling access aren't using residential Comcast connections -- and even if they are, they're offering very short, temporary connections, rather than permanent service. While I actually think plans like the Speakeasy plan we discussed that allow subscribers to resell their connections is smart, that doesn't mean that this guy is going to get away with this "business."

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AT&T And Comcast's Non-Denial Denial Of Three Strikes

from the watch-this-space dept

Yesterday some stories broke about how AT&T and Comcast were "testing" the RIAA's "three strikes" plan. As we noted, this wasn't a surprise at all, as both companies had indicated willingness to do so -- but it was amusing to see both companies avoid fully admitting it. In fact, both companies have now come out denying that they're doing any such thing, but you have to read between the lines here, and it's not at all difficult to see what's almost certainly happening.

Both companies are "testing" a program by which they send infringement notices on to the users. That's the part that both have admitted they're doing, but they get to deny any three strikes plan, because no one's getting cut off. But, that's only because people haven't been accused multiple times yet. Thus, this way they get to start heading down that path without ever making an official statement that they support the RIAA's plan to kick people off. It's a way to ease into such a program (they hope) without the PR headaches that would come with such a plan. But, note that neither AT&T nor Comcast will take a stand like Verizon has, where it flat out said that it will not give in to the RIAA (and, in Verizon's case, the company does have a decent history fighting against the RIAA when it comes to protecting its customers' privacy).

If AT&T and Comcast really want people to believe that they're not going down this path, then why won't they come out and say the same things that Verizon is saying?

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Cable Companies Negotiating To Control What TV Shows You Can Watch Online

from the this-won't-end-well dept

Earlier this week when Hulu cut off Boxee, supposedly at the request of its content partners, there was some speculation that the real pressure may have come from the cable companies who are losing customers at a pretty rapid clip. And, while the content companies pretend to deny it, the fact that people can get so much content for free online is almost certainly contributing to that situation.

Now, in theory, this should be a good thing for the TV guys -- who you would think want as many people watching their shows/channels as possible. But, the problem is the business model. Doesn't it always seem to come down to the business model? The TV networks make so much money by selling the channels to the cable companies, that they're scared to death of losing that revenue. We saw a hint of this late last year when Viacom and Time Warner Cable played a big game of chicken over channels like Comedy Central and MTV.

However, now reports are coming out that the cable companies are negotiating with TV programmers to offer their TV content exclusively via their cable internet offerings. In other words, forget Hulu and routing around the cable company and the $80/month they're charging you. You'd have to keep your cable, even if you don't want it, just to get access to many TV shows over the internet (well, legally). Not surprisingly, both the cable companies and the TV programmers seem to like this sort of deal: the programmers continue to get their big fees from the cable companies, and the cable guys avoid losing many more subscribers. Comcast's CEO Brian Roberts is even saying "Online video is our friend, not our enemy."

And, to some extent he's right. If Comcast is going to survive it does need to look at online video as a friend, rather than an enemy -- but the problems may come about if they think that they can force customers to only get online TV if they keep their cable TV service at such a high price. Because, while these deals may make sense for the TV networks and the cable guys, they seem to be forgetting the customers -- many of whom have received a nice taste of TV online for free, and aren't going to be happy about having to pay up for it. The problem is that these cable guys aren't adding any new value. In actuality, it seems like they're looking to take away value from what's already out there -- and that never works. It will likely just lead to increased piracy, increased anger at the cable companies, and a continuing of the downward spiral. But, these days, watching old school companies accelerate their own downward spiral happens so often, you almost have to assume it's likely.

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Comcast Screws Up And Targets Innocent Customer In P2P Dragnet

from the cut-'em-off dept

Davis Freeberg writes "As if the prospect of having the big telcos looking over your shoulder wasn't bad enough, we're already seeing reports of Comcast targeting innocent customers in DRM stings.

After receiving a takedown notice from Comcast's DRM squad, John Aprigliano had to spend an hour dealing with them, in order to prove his innocence. Apparently, Comcast wasn't able to tell that one of his old modems was really being used by someone else. Lucky for him, he's a network engineer and knew the right questions to ask, but sooner or later someone will end up losing their internet access over this kind of screw up. If Comcast wants to be the top P2P cop, shouldn't they be able to accurately identify between copyright infringers and their customers. So far they aren't off to a very good start."

Doesn't that make you feel comfortable now that Comcast has indicated its willingness to cut off internet access for file sharers? Once again, it would be great if we could implement a reverse three strikes policy, where three false accusations by the entertainment industry or an ISP leads to them losing their internet access.

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AT&T And Comcast Willing To Cut Off File Sharers

from the no-surprise-there dept

While ISPs have been reluctant to admit to agreeing to be a part of the RIAA's three strikes plan, if you had to take a guess who would be involved, AT&T and Comcast would probably lead the list (along with Cox, which has already admitted to doing so). So, it probably comes as no surprise that News.com has confirmed from internal sources that, indeed, both AT&T and Comcast have agreed, in principle, to participate -- though neither will admit to it publicly for fear of public backlash. Of course, in places like where I live, what do they have to fear? The only options for broadband here are... AT&T DSL and Comcast cable. So it's not like there are alternatives. It shouldn't impact me directly, since I don't engage in any file sharing, but the principle of the thing is quite bothersome (not to mention the false positives that occur). No matter what other issues one might have with Verizon, the company should be given credit for (a) actually investing in much faster fiber networks and (b) being willing to openly stand up to the entertainment industry over the years. If only FiOS were actually available where I live.

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Dear ISPs: When Launching Value Added Services, How About Actually Adding Value?

from the just-a-suggestion dept

At the beginning of January, I thought it was amusing that Verizon was launching its own backup service for a stunning $31/month (with a limit of 50GB of backup storage). That seemed fairly ridiculous, given that you could get an unlimited backup service from Carbonite or Mozy for $5/month, or using JungleDisk with Amazon's S3 for exceptionally low prices as well (depending on how much you use -- but 50GB comes in at way less than $31). Now comes the news that Comcast is also launching its own backup service, with a few different price points, but starting at $5/month for only 10GB and going up from there. It's not a bad service to offer -- and, surely, Verizon and Comcast see these as ways to lock in consumers, since it now has possession of their backup data -- but it seems quite odd that these companies would offer "value added services" where the prices are more expensive than rolling your own, which doesn't come with the lock-in. And, as noted, with Comcast, using the service counts against their new broadband caps, so there isn't even a benefit there. These ISPs seem to be missing the point of these value added services. If you want to get people to use them, they should actually add value.

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FCC Again Wants Details From Comcast On Its Traffic-Shaping Efforts

from the fool-me-once... dept

Comcast has already been slapped down -- well, slapped on the wrist, anyway -- by the FCC for violating Commission rules with its traffic-shaping efforts, and it could be on its way for a second rebuke. The FCC has asked Comcast for some more details on its newest "congestion management" system, which throttles heavy users' speeds for periods of time. As part of the penalty for its previous infraction, Comcast had to file details of the new system with the FCC, and the commission know wants to know if Comcast treats traffic from its own VoIP system differently than traffic from competing providers' VoIP services. The company apparently advertises the fact that its VoIP service doesn't get affected by heavy network traffic and slowdowns, giving the impression that it degrades other VoIP traffic in this new system, while leaving traffic from its service alone. This will be an interesting test of the new FCC administration, to see how it handles these sorts of complaints compared to its predecessor. It could also set an important precedent, because it sounds like Comcast handles its own VoIP traffic in a way similar to other cable companies, by setting aside a portion of bandwidth that's managed separately from a subscriber's internet traffic.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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No One Can Find ISPs Who Have Agreed To RIAA's 3 Strikes Plan

from the keep-looking dept

It's been a few weeks since the WSJ announced that the RIAA was supposedly dropping its lawsuit strategy, in favor of a backroom deal with ISPs, negotiated under dubious circumstances by NY's Attorney General Andrew Cuomo, whereby those ISPs would start cutting off connections from those accused (not found guilty) of file sharing. However, since then, we've heard from a variety of ISPs who don't like the plan, and Wired went on a wild goose chase trying to find a single major ISP that has agreed to the plan and came up empty. Of course, most of them refused to comment. The only one who said anything straight up was Verizon -- who had earlier confirmed that it had no interest in doing a deal with the RIAA. The big cable companies and AT&T have shown some interest in the past -- but now refuse to admit that an agreement has been worked out.

The big question is why?

If this is such a great deal for consumers, as Cuomo and the RIAA insist, then why wouldn't an ISP want to step right up and proudly admit to such a deal? Obviously, it's because they know that such a deal is a sham, based on no legal reasoning, that will harm their position in the market and piss off customers. The RIAA will likely claim that no deals have been announced because the details haven't been finalized -- but again, that makes no sense. We've been questioning from the beginning why these negotiations haven't been more open. And with record labels like Warner Music and EMI insisting that they want to be seen as more open and willing to hold a "conversation" with critics, the fact that no one will talk openly about this backroom deal shows what a bunch of liars they are again. They don't want an open conversation. They want the government and ISPs to protect their business model, and they've convinced Andrew Cuomo to fall for it.

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FCC Just Couldn't Stop Voting

from the election-day-festivities dept

Well, it's election day and apparently the FCC commissioners liked voting so much they took votes on just about everything. Amazingly, it looks like they even made some good decisions. The big one, of course, and the one that will get the most press, is the unanimous vote to free up television "white space" spectrum. While the NAB made a last ditch effort to stop this, the FCC made the right call here. This spectrum can be put to much better use, which can have a huge impact on increasing innovation and wireless technologies. This is a big win. The FCC also approved Sprint and Clearwire's deal to set up a joint venture for their WiMax operations, as well as allowing Verizon to buy Alltel. Both of those deals make sense as well, so it's good to see them approved.

Other than that, the FCC said that it's going to start looking into the pricing policies of cable companies... and Verizon. Who's missing? FCC boss Kevin Martin's best friends over at AT&T. To be honest, while it's quite likely that the cable companies and the telcos (yes, including AT&T) are abusing their oligopoly position, the answer shouldn't be having the FCC act as a watchdog over pricing policies, but for a better system to be set up that encourages real competition. In the meantime, though, can someone explain why AT&T was left out of the bunch?

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Is There A Hidden Broadband Price War?

from the it's-all-in-the-speeds? dept

Last month, we mocked some mainstream press reports claiming both a broadband price war and the fact that broadband prices were rising. There doesn't really seem to be much of either, as broadband prices have remained pretty constant, even accounting for promotional pricing. However, with Comcast getting ready to significantly boost speeds (yes, with its broadband caps, Ryan Radia is wondering if the actual "price war" is hidden by the fact that it's in price per megabit.

In other words, if prices remain constant, but your speed doubles, isn't that something of a price decrease? Radia chalks this all up to competition in the market, but it should at least be admitted that the speeds (even these higher speeds) still pale in comparison to other countries where there is much greater competition than in the US, where most people still are limited to only two real choices. Either way, as someone who's still stuck on a home connection that runs around 500k (below the new 768k cutoff for "real" broadband) despite being in the center of Silicon Valley, I'm still not convinced that these greater speeds are so readily available yet.

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