RCN Rate Hike Raises Ire

I have yet to meet or hear from a video customer who actually was happy about a rate increase, so it is no surprise RCN customers are sqwaking about the latest rate increase they are facing.

Up to this point there have not been many options. The favorite channels most of us watch (a different package for every single viewer) are not available a la carte. In truth, for a package of 10 to 15 channels, especially featuring sports content,  it is doubtful a consumer can save much over current packaged rates.

But it is unlikely distributors can "forever" expect rates to be hiked without something breaking, somewhere.

In my case, two channels plus occasional use of a couple others, justify the entire basic package. But as rates continue to climb, so does the level of irritation.

So far, those two essential channels are not available online, or a la carte.

Of course, distributors aren't dumb. They can assume lots of viewers will be sorely tempted to opt for packages that deliver several channels of most interest, possibly with a "casual viewing" video on demand feature, that might satisfy many current customers.

Nobody knows whether a la carte or expanded VOD options would be revenue neutral. Distributors and networks have reason to fear any change in that direction would not be revenue neutral.

But I don't think some move in the direction of flexibility is avoidable forever. It might be fine positioning for a distributor to say the fees are higher, but so are the variety of channels.

That does not correspond with the way most people watch linear TV, though. Most people do not watch, or even want, most of those channels. And there lies the rub.

There are some precedents, however. Premium channels such as HBO always have been offered a la carte.  But the movie channels, pay per view and VOD always have been fully subscriber-funded formats.

Ad-supported channels have reason to fear the economics of a la carte choice, though. Still, if you look at your on-screen guide, you can see some "natural" packages based around sports, news or entertainment that suggest logical packages that are more targeted than what is possible today. That might be a half step that could work, if most customers do not choose those options.

The system isn't seriously broken yet. But each rate hike increases customer dissatisfaction just a bit more. Someday, it will break.

http://www.dslreports.com/shownews/RCN-Raises-Rates-Adds-Downgrade-Fee-102035

Traffic Shaping, Not Blocking

Users of RCN broadband access services are complaining about blocking of BitTorrent connections. That seems unlikely, though traffic shaping seems certain. RCN has in the past noted that more than 90 percent of upstream traffic was composed of P2P streams. And since upstream bandwidth is the key resource constraint, RCN traffic shaping was not unexpected. When users are sharing a scarce resource, some "rationing" is simply fairness.

FiOS Takes Share from Satellite, Overbuilders and Cable

An examination of wireline video subscriber patterns in 34 Massachusetts cities and towns after the introduction of Verizon Inc.’s FiOS TV reveals three key findings, according to analysts at OneTrak, a firm loaded with cable TV trade journalists I used to work with.

FiOS tends to capture at least 10 percent penetration by taking cable customers (mostly Comcast in the study area). If there is an overbuilder in the market, the hit can be larger than that (RCN being the case in point). And as many as 40 percent of FiOS TV subscribers could well be coming from DBS.

In most markets there will not be an overbuilder with any significant market share, so FiOS gains should easily top 10 percent.