Commentary
We'd Do Almost Anything But Rent a Movie from the Cable Company
- by P.J. Bednarski , Staff Writer @pjbtweet, December 6, 2013
Of all the devices and video services at our fingertips, the most clunky to navigate may be the cable TV remote control. Which is sort of symbolic of the biz. Despite efforts by Comcast and others to add enticing pay-per-view VOD features, relatively few of us use them, though there it is, daring us.
A survey by Digitalsmiths says that of the 3,177 consumers in the U.S. and Canada that it polled, just about 74% never rented a movie from their cable or satellite provider. And, you know, never is a very long time in media terms. Never is what people do with newspapers, or the Current cable channel, or Blackberry phones. About 27% rent one or more. But 11.2% said “one” and 5.6% said “two.” Which is close to never in my book.
Digitalsmiths notes that even a sliver of a great big money pie is a lot of money. But it nothing like it could be.
According to this same report, 4.3% plan on quitting their cable/satellite provider in the next six months. But here’s an eye-popping figure: 27.5% said they’re thinking about it. In the next six months.
It’s true many of us think about many things we never do—volunteering, exercising—but it would seem to be true that millions of us could add “calling the cable company to disconnect” to the list of unpleasant things we may be forced to do, as much as we would like to. Love to.
I don’t think most of those 27.5% are ready to do it. But it does show they don’t have much fondness—actually quite a lot of antipathy, at best-- for cable or satellite TV. That’s another reason OTT providers and devices should be able to walk in and take over America, just like Nikita the K said the Soviet Union would do someday.
Astonishing, but according to this report, in the second quarter of 2013, 49% of the respondents thought getting VOD material from their cable/satellite provider was easy. By the third quarter, that figure slipped all the way to 37%.
Now, I doubt multi-channel video providers came out with some device that makes it even more cumbersome to rent a movie from them. More likely is that others made it easier, or, going back to the original thesis, many millions are increasingly just disenchanted. Disconnect figures seem to back up that idea.
Customers are disconnecting, figuratively and then literally.
Even seemingly convenient and more up-to-date features don’t cut it. MediaPost’s Aaron Barr in September wrote about a Digitalsmiths finding that 68% of smartphone and tablet owners have not downloaded their TV providers’ app. But 35% have subscribed to an OTT service like Netflix or Hulu.
This latest report says 55.9% of survey respondents use Redbox Kiosks at retail stores, rather than pluck a film from their cable/satellite operator. “This is nonsensical, since the cost in time and money of driving to the store for a one day rental is far greater than accessing a VOD title,” Digitalsmiths says, which is obviously, and kind of amazingly, so, so true.
pj@mediapost.com
P.J. Bednarski has written for MediaPost since 2012 on media and marketing topics. He can be reached at pj@mediapost.com
You mean the Al Jazeera America cable channel.
Redbox DVDs and VOD movies most often have different windows (of availability), so that difference mostly explains the reluctance of people to rent movies from their cable provider. Recent theatrical movies go to DVD first and then (typically weeks later) to VOD. Nobody likes driving to Redbox, but most people would rather drive to get a recent movie than wait longer for the delayed VOD window.
Clunky and slow interface, terrible search function, and HD fees of $6.99 or more = fail.
I don't agree that it is “...the cost in time and money of driving to [Redbox] for a one day rental is far greater than accessing a VOD title.” Renting "Cloud Atlas" from our local cable provider was $6; getting it at Redbox was $1.25.
Comcast has very limited movie rentals starting at $4.99 vs Redbox at the supermarket at $1. The no additional charge movies are mostly very old and many very obscure and bad.
Cable providers have dominance that may win out eventually by supplying all the wide range of things consumers want on their TVs (movies, cable, etc...). But, they are generally really poor at executing (a) easy ways to get the content and (b) educating consumers about HOW TO get the content. Most consumers remain confused about what they can get on cable and how to get it. Cable needs to learn to communicate - then their dominant strengths will win out.
You can't get Blu-Ray on cable - - -
Amazon Prime FORCES you to watch VOD within a 24-hour span for $2.99. If you don't it's another $2.99! Yet another reason Netflix has a competitive edge.
The problem is not with the cable company's delivery methods, it's the price. It probably costs the Cable company about 2c worth of bandwidth to deliver a movie, they might have to pay the studios 70c per customer in license fees, and could charge $1.00 as profit. Add 20c to cover infrastructure costs and they could charge about $2. Charging the same price as a brick-and-mortar theatre has to charge for something already paid for by the monthly access fees is a direct route to suicide. You build your pipes and charge for installation and maintenance, and I can use as much of whatever you offer on your cable, I'm not metered. If cable companies metered TV stations they'd be seeing people cutting their cords even faster. It isn't that people don't want a connection, it's that they're sick of being banged at premium rates for something that probably can be sold at a profit by the cable company for half what they charge. Phone companies and Cable companies whining about not being able to collect tolls from content providers and collecting more money are looking in the wrong place. I suspect the unlimited voice cellular providers are making a lot more money per customer at $30 a pop over the ones who are squeezing customers on monthly bills with high per-minute rates and huge data chartges. People like flat-rate even if metering might be cheaper (and sometimes metering makes it actually cost more.)
Maybe it's simply a matter of consumers feeling that they already "give" too much to their cable companies and don't want to "give" them anything more.
I agree with Melissa. As a Comcast subscriber, I constantly feel like I'm getting worked over by the cable company. Especially every time I get my bill. If they made a blanket price reduction to $4.99 per movie for new ones and improved the interface of their software (it's horrible) they'd be in much better position to own the digital delivery dollars.
The simple fact is Time Warner's VOD is too damn high!!! Seriously, $1.25 is the competitive price point. If they got VOD down to say $2.00 or $1.75, I'd reconsider driving to Redbox. $4.99, $3.99, etc. is too much.