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Cable, Satellite, and Internet Television

Chapter 11

© 2009, The McGraw-Hill Companies, Inc. All rights reserved.

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CHAPTER OUTLINE

• History of Cable, Satellite and Internet TV

• Cable, Satellite and Internet TV in the Digital Age

• Defining Features of Cable, Satellite and Internet TV

• Organization

• Ownership

• Internet Television

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HISTORY OF CABLE, SATELLITE AND INTERNET TV (1 of 2)

• Cable: 1950s; brought TV to remote areas. – Satellite TV transmissions gave people more

reasons to subscribe to cable– MSOs: Multiple Systems Operators; large

cable systems dominate industry

• DBS: Direct Broadcast Satellites• 1992 Cable Television Consumer

Protection Act– Must carry vs. retransmission consent

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HISTORY OF CABLE, SATELLITE AND INTERNET TV (2 of 2)

• Telecommunications Act of 1996 – Telephone companies could provide cable TV– Cable could provide telephone service

• VOIP: Voice over Internet protocol

• New cable networks find it hard to gain access• Cable TV audiences are fragmenting• Internet TV (webcasting); late 1990s

– Buffering & broadband have helped– Podcasts

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CABLE, SATELLITE AND INTERNET TV IN THE DIGITAL

AGE• Satellite and cable systems use digital

technologies to support– Video on demand, interactive program guides, high-

definition TV, digital video recorders– Compression of signals, increasing channel capacity

• Cable systems can also provide telephone and Internet service– Bundling multiple services

• Easier for telephone or cable systems than satellite systems

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Mobile Media

• Cable and satellite content can be sent to– Cell phones, PDAs, laptop computers

• User-generated content on cell phones

• Mobile video-sharing web sites

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User-Generated Content

• Cable and satellite networks increasingly turning to user-generated video– CNN I-Report

• The Internet is biggest place for user-generated content– YouTube

• Used by politicians, advertisers, aspiring entertainers

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DEFINING FEATURES OF CABLE, SATELLITE AND

INTERNET TV

• Requires extra equipment

• Extra fees for service

• Specialized channels, appealing to highly differentiated audiences– Even when mass appeal content (TV shows,

movies) is available on the Internet, the audience is not mass

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ORGANIZATION

• We will first consider the organization of the cable and satellite TV industries, then turn to Internet video

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Structure: Cable TV

• Head end

• Distribution system– Trunk

• House drop– One-way or two-way

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Programming and Financing: Cable TV (1 of 2)

• Local operators – Program sources

• Local origination, local broadcast TV stations, superstations, special cable networks, pay services, pay-per-view channels.

– Income sources • Subscription fees, local advertising

– Expenses• Hardware (installing/maintaining system), content

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Programming and Financing: Cable TV (2 of 2)

• National operators– Program sources

• Original productions, movies, syndicated programs

– Income sources• Subscription fees, carriage fees, advertising

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Pay-Per-View (PPV)

• Sporting events, movies, concerts, adult content

• Though the potential for big money remains, PPV has fallen on hard times due to – Video on Demand (VOD)– Digital channels

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Video-on-Demand (VOD)

• Users search for content stored on cable/satellite company’s server– Select desired content, and it becomes available,

usually for a fee

• VOD has been slow to catch on– Relative lack of content; complicated user interfaces

• VOD use is up, but VOD is lower priority for cable/satellite companies– YouTube content creates more “buzz”; more

competitors are appearing

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Structure: Satellite TV

• Content providers

• Broadcast centers

• Geosynchronous satellites– Signals are encrypted

• Small satellite receiving dish

• Satellite receiver

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Programming and Financing: Satellite TV

• Programming sources carried by major cable companies are also distributed by satellite– Difference: satellite networks are national, with no

local generation of programs• Revenue sources

– Subscription fees, extra charges for DVRs, HDTV, etc. Local advertising not significant revenue.

• Expenses– Hardware, content

• Challenges– Competing with cable’s ability to bundle voice, video,

high-speed Internet access

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OWNERSHIP

• Ownership trend is toward consolidation

• Cable– Comcast & Time-Warner

• Satellite– DirecTV and Dish Network

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INTERNET TELEVISION

• Starting an Internet channel requires only– Camera, computer, software, website

• Convergence between TV set and computer is well under way

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Structure: Sources and Content

• Sources of web video– Amateurs– Professionals

• Content– Original– Repurposed

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Microcasting

• How broad of an audience is being sought?– Broadcasting– Narrowcasting– Microcasting

• As it evolves, will the Internet be used more for broadcast or microcast applications?

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Feedback

• Cable/satellite networks– Nielsen Media Research

• Same techniques as with broadcast TV

• Internet video– ComScore Media Matrix– Nielsen/NetRatings

• VideoCensus

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Audience

• 85% of US households subscribe to cable or satellite providers– Subscribers tend to be younger, more affluent, and

have more children.

• Demographic makeup of cable/satellite networks varies, due to the specialized content

• 25% of Internet users watch online videos at least once a week– People who share videos tend to be male, and young