Wednesday, January 11, 2012

The great CES non event

What if you held a disco and nobody played any music

Like any true geek I've been following CES but it been quiet. Many sources have pointed out that large companies now release new products outside these shows because they can better manage the news and there is less noise outside the event time. Consumer electronics is also consolidating so less small players. The cost to do anything is outside the ability of any company except a huge multi-national.

Had Microsoft planned a major announcement but the product fell through? Sources (Reuters) indicate that Microsoft had planned to release a Netflix competitor based off the Hulu model. The article indicates that cable companies forced the content providers to kill the idea using a high price. It's a lot like the record industry before itunes. Given that the cable companies have cut off programming to the internet companies like Netflix, YouTube etc have started to develop their own programming. I hear that HBO is in a panic over house of cards.

I compare $16 for Hulu and Netflix and $60 for a cable subscription. Somebody has to loose money if I switch over. Remember that most cable companies are vertically integrated, they share their programming with other cable companies (usually there is only one cable provider per area) but they are not going to allow competition. They have already been burned by Satellite (DirectTv/Dish) eating into their viewership and Telco's starting their own services but each has bundled programming.

Though it would be easy for a modern cable company to sell alacart since they now digitally encrypt all the channels except for OTA channels. They have fought the idea saying it is cheaper to bundle. Given that I'm forced to pay for expensive channels like ESPN, NFL, Fox News, Fox sports & Disney I highly doubt if my package would be sixty dollars. It reminds me that I had to buy an Album rather than a single before itunes.

If a company as large as Microsoft cannot break into this industry clearly market forces have broken down and the FCC needs to intervene.

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