To tech fans, the concept of “cutting the cord” — cutting loose your cable service in favor of alternate programming sources through the Internet — is as popular as finding bargain property in Medina is to those of us living around Seattle. Maybe even more popular (are there any bargains in Medina?)
The latest whack has come from Netflix, which, this week, acquired the rights to stream all seven seasons of AMC’s popular and critical hit TV series “Mad Men” on its subscription service. According to various sources, Netflix will pay nearly $1 million per episode to production company Lion’s Gate for rights to stream the series. The show’s first four seasons will be available beginning July 27.
Until this announcement, “Mad Men” has only been available for post-broadcast watching through DVDs or paid streaming. Cable companies have never had the right to air this show in their on-demand offerings.
The online video store costs are exhorbitant for a show that originated as a free cable TV series. If you want individual episodes through Apple iTunes store, for example, be prepared to shell out $2.99 an episode … or $149.50 for all. If you buy a season pass — rights to view all episodes in a season — costs run from $20 to $23 per season, or in HD, $34.99 per season.
(A personal note: I’ve bought all four seasons on DVD over the last four years for roughly $175. Fool that I was, I bought them at "new-release" retail prices.)
The Netflix announcement means that for about $8 a month, we now can watch all those episodes, plus whatever else Netflix has to offer.
Netflix’s spending spree — we recently reported that the company was producing “House of Cards,” the remake of a British political series starring Kevin Spacey, for a reported $100 million — has not gone unnoticed by the stock market. MSNBC reported that the stock plunged on Thursday by more than $6 a share, but Friday’s results showed the stock had regained its momentum.
Not to be left out of the cord-cutting movement, Google announced this week that it will spend $100 million to revamp YouTube, joining other companies that are trying to get in on the ongoing transformation of the home TV set into an all-media center. According to the The Wall Street Journal, YouTube will develop a series of channels specializing in a variety of topics such as arts and sports. Moreover, an estimated 20 channels will contain originally produced content: low-cost fare produced solely for the Internet.
Can YouTube develop original content to air on its channels that will compete with “Mad Men” and other off-network first run programming? Can Google make money with its service, which to date is arguably the single largest repository of video in the world, but shows little return to Google’s bottom line? That’s the $100 million question.
While Netflix was reaching for the stars, Blockbuster, the once-giant DVD retail chain, reached out for a liferaft. In a bankruptcy auction, Dish Networks, itself part of the EchoStar set-top box company, paid $320 million for the company. A Reuters report noted that Dish may give the company new ways to market its services. Some critics argue that its main significance may be to use its ownership of the Blockbuster name to sell more streaming movies. Blockbuster already has a streaming service but it appears to have a relatively small user base according to the website TopTenReviews.
Dish’s plans may also be far more ambitious. Reuters notes that EchoStar is buying Hughes Communications, which potentially could provide technology for a wireless network. Hughes’ technology, plus Echostar’s ownership of the popular Slingbox (which allows people to watch their home cable service on computers and on the go), could combine to not only compete with Netflix but drag even more viewers away from their living rooms and onto mobile devices.
Quiet as it’s kept, Netflix is not the only streaming company. Apple’s iTunes, Amazon’s Instant video services, and Best Buy-owned Cinema Now are well in the hunt. But so is Vudu, now owned by Wal-Mart.
Originally known for streaming one of the largest libraries of high-definition movies, and once available only via its own stand-alone set top box, Vudu is following the Netflix model by becoming an app available on a myriad of TVs, Blu-Ray players and similar devices: reportedly more than 300 total.
While Vudu itself isn’t yet a major contender, parent company Wal-Mart certainly is, doing an estimated $3.5 billion a year in Hollywod DVD sales. If all those DVDs carry promotional material on the Vudu service, plus better prices for streaming than competitive services (“X-Men” for 99 cents, anyone?), Wal-Mart’s streaming entry could be a formidable contender.
Despite the trend toward cutting the cord from your cable box, before your tear up your cable contract and toss out that shiny set-top box, there are a number of issues to consider first:
Cable comes to you in a single box: no techno skills are needed to make it work other than turning it on. You don’t worry about whether your connection is capable of showing high-definition or even 3D programming. There are hundreds of on-demand programs, from movies to TV shows, and many are free with your cable subscription. You only need to learn one remote. Your cable company supplies you with equipment add-ons such as a cable tuner/high-definition digital recorder in a single box.
If something goes wrong with your service or your equipment, the cable company is there to support you by phone any hour of the day or night. With cable service, you don’t have to worry about connecting your house to the Internet, or about your Internet service being powerful enough to handle all those high-def programs.
For more on cutting the cable, see an excellent article that came out this week on the TechCrunch website, complete with reasons for and against making the move and a rundown of some of the cable alternatives available to you.