back to article HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'

HBO this week has finally done as Netflix said it would, admitting that it WILL provide over-the-top (OTT) streaming content to the masses in the United States. Netflix CEO Reed Hastings predicted back in May 2013 that HBO would need to make this move soon, claiming it was inevitable. When in future we teach technology …

It is an exciting development but I do wonder if it will end up being more expensive for consumers. For example, I watch a lot of HBO shows along with newish movies on Sky. I pay £30 a month for this at the moment thanks to a deal. I also subscribe to Netflix for £7 a month. I can't imagine HBO going to market for less than netflix, and other providers who go to market will likely copy their pricing levels. Add on say £10 a month for the movie package on Sky Tv, a couple of other networks and I'm back to similar pricing levels. Be interesting to see how the market develops!

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Cable is one of the few things that is a much worse deal in the US - because they never had to compete with decent broadcast TV.

Basic cable package usually costs $100/month (whatever they claim in the ad they will find some extra charges to make it $100/month). Then they still do the package layering, so if you want decent movies you have to buy the family package first and then the crap movie package and then the decent movie pack. They mostly survive on having sport tied up.

$7 for Netflix to watch a decent selection of shows with no ads whenever has cut the cable, adding HBO for another $10 is a definite

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Linux

Different day, same song.

> I can't imagine HBO going to market for less than netflix,

HBO already has a price structure with cable that places them at a higher price point than Netflix. I can't see them lowering that significantly. I am not sure they need to. They are already the classic ala carte premium cable option and always have been.

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We shall see, BigAndos

I am US-based, stuck with the options of Tweedledee and Tweedledum for my internet access, also known as Comcast and CenturyLink. The former is an "all-in-one" provider that has a single cable to rule us all... which also provides for a convenient single point of failure. CenturyLink started to roll out an IPTV model in some markets in the US, but has moved to "run silent" when it comes to expansion of that. In place of that, they offer DirecTV, the satellite provider... which works great in sunny Southern California, but not so well in places with weather.

So my option lately has been Comcast, who back in March decided to force me to interact with their "tech support" team in Malaysia or somewhere who continually insisted that they needed to send a "reset signal" to my cable box to get HBO back, followed by 60 minutes of being placed on mute while they consulted the flowchart that included every termination point besides "Issue Resolved". Only a late-season snowstorm 2 weeks later brought the neighborhood-wide problem to light because it (finally) caused a detectible voltage drop in a trunk line... after having a half dozen techs out to my house at different times, having my DVR/cable box replaced with a version containing a 120GB HDD made by Seagate back in 2006 (and running as well as one would expect), and having a new line from the trunk patched to my house.

Needless to say, I've been looking for every reason to turn Comcast or CenturyLink into a dumb utility provider with all the same value adds as my water company, power provider, or LNG supply. OTT can't come soon enough, though I need ESPN and Fox Sports to get there too, as I would otherwise lose my hockey and baseball.

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On the news this morning, the AVERAGE family pays $199/month for phone+cable+internet.

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Pricing a big part of the problem here. Additionally though... the vast majority of "cord cutters" are using HBO GO for free from their parents cable service. If you think those people are going to suddenly spend money on their own plan, you're sorely mistaken.

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True that cable/satellite in the US is typically but I do wonder if this won't end up costing us more for equivalent service using OTT. If not more money it'll end up being about the same price. Most of the time the OTT providers (Netflix, etc) are behind a season or two but that may change if this OTT trend does take off. Don't think for a second that Netflix, and the other OTTs, aren't going to raise prices again, new sub's for Netfix are already at $8

If net neutrality falls, you can bet that Verizon, Comcast, and the other ISPs are going to charge premiums for broadband. If net neutrality, they'll find a way to charge us more anyway.

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Paris Hilton

It's So Obvious It's Sad

If you want to know where consumers want their content, just follow the pr0n. VHS, The Internet, Blu-Ray, subscription plans, independent publishing, pr0n has been there and done that in more ways than Urban Dictionary will tell.

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Coat

Re: It's So Obvious It's Sad

Those brave one-handed early adopters deserve their own name.

Pornoneers.

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Re: It's So Obvious It's Sad

Is there really much of a market for porn on blu-ray? I'd be very surprised if so, the uptake of Blu-ray very Did in mainstream media is still slow.

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Anonymous Coward

Re: It's So Obvious It's Sad

"Those brave one-handed early adopters deserve their own name."

And their own food - Pr0n-to pups

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Fact checking

"HBO Go, the name that is universally used in part of the world, such a Northern Europe, where HBO already goes direct"

So why does the HBO Go site say: To access HBO GO℠, you must reside within the fifty states of the United States of America.

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Re: Fact checking

Because you have to go to the country specific HBO GO site.

Of which there are only 4 or 5.

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Broadcast and Comercial TV is dead

The number of streaming options and alternatives to passive video consumption that exist to already, means i don't think ive watched a live transmitted program bar major news story at all so far this year, Even news is mostly via a browser etc, the Virgin Tivo hardly is ever turned on and even then its mostly for iplayer or Netflix watching, with niche programming available via alternatives, EG crunchyroll, combined with a Chrome-cast and tablet allows Sofa viewing of almost anything.

I have no interest in anything on commercial channels anymore, the only ads i see are YouTube adds which i can skip in a few seconds, I also cannot see another license fee being renewed and an iplayer sub ala Netflix seems the only way forward for the BBC. I can still see the traditional season and weekly release of program episodes rather than the dumping of entire series on a release date, with various levels of streaming ad supported for free viewers etc. Content makers needs to allow global release of their shows via one or other of these means, this would give them maximum revenue and exposure for their product. in some areas this is already happening via various ways, national broadcasters and restrictions are disappearing, and global media has already started.

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Re: Broadcast and Comercial TV is dead

No, broadcast and commercial tv are why cable survives, at least in the US. We have the FIOS bundle because of the amount of long distance phone calls my roommate makes and because she wants to watch the new broadcast tv episodes more or less as they are released. We DVR everything, but normally watch it within the week. Mostly she likes the DVR for skipping commercials. Hulu et al may eventually change that model, but only when the studios stop depending on the major networks as their primary money source.

I don't follow the logic of this story at all. With the exception of a very, very few acclaimed series and sports, nobody except hotels subscribes to HBO in the US. Their selection is crap and has been for a long time. That's why they are the first ones to head to OTT. I tried HBO about 20 years back. They'd get 5 movies a month that they endlessly cycled. If you want to watch movies Netflix is simply a far better deal. Even Showtime and Skinemax have more fare than HBO. And the line about how expensive it is to buy HBO because of packaging is complete bollux. You can get a basic subscription and add HBO to it. No need for the other packages. Same with Showtime, Skinemax, The Movie Channel, Playboy, and all the other Premium channels. The reason they're called Premium is you pay a substantial price for a single channel. Back when I briefly had the subscription it was $30/HBO or $50/HBO and Skinemax combo. Even if the price has dropped to $10, that's more than the Netflix subscription.

Do I think the industry would do better in full streaming, watch on demand mode? Probably. Structure the season with Release date/times for episodes that resembles the current programming schedule and I think they could make it work. But they aren't ready to make that move yet.

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Pint

Re: Broadcast and Comercial TV is dead

YouTube ads? What's that?

Translation: there are solutions for most of them.

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Anonymous Coward

Re: Broadcast and Comercial TV is dead

"Content makers needs to allow global release of their shows via one or other of these means, this would give them maximum revenue and exposure for their product."

Correct sir, have an upvote. Quick example : couple of weeks ago, for whatever reason, Match of the Day didn't timeshift on my youview box. So, I took to iPlayer, in the hope that the stupid premier league rights issues have been sorted. It would seem not, MOTD wasn't available till after monday night or something. So, in the face of such complete daffyness, I torrented it. Within the time it took me to make a cup of tea, I was watching an HD copy, and was able to skip past the shite being talked by Robbie Savage.

People are looking for convenience and quality and timely delivery. The traditional broadcasters can either profit from this, or be destroyed.

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Re: Broadcast and Comercial TV is dead

"Do I think the industry would do better in full streaming, watch on demand mode? Probably. Structure the season with Release date/times for episodes that resembles the current programming schedule and I think they could make it work. But they aren't ready to make that move yet."

They will probably have to be drawn kicking and screaming of that i have no doubt, but a few years ago a program would be available via torrent say within the week or a few days, this led to things like iplayer becoming developed, these days you have programs captured and available for HD streaming within a few hours, this has now led to site like cruncyrolll who now do simucasts an hour after air from a wide range of programs for premium users , think its a fiver a month but free with ads the following week, sites like rooster teeth have something similar for there shows like RWBY etc where its available a few hours for free users, the move has already been made in some areas.

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Re: Broadcast and Comercial TV is dead

i don't think ive watched a live transmitted program bar major news story at all so far this year

And no doubt generalizing from your individual experience to a universal rule is perfectly valid.

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Happy

Nielson ratings just shit themselves.

See icon.

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Re: Nielson ratings just shit themselves.

Not necessarily. I have it on very solid authority that the METHOD of delivery for programming has little effect on at least SOME of the ratings services. The viewer's solicited opinion of the actual program content trumps the method by which it was watched. At least a few of the ratings services have actually kept up with evolving technology and the corresponding viewing habits of consumers.

This CAN be a good thing. If the data are properly utilized, shit programs die quickly and good ones aren't penalized for being watched via "non-traditional" methods or media.

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Anonymous Coward

Meh

Sorry, I have no desire to pay for HBO cable or OTT.

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Facepalm

Re: Meh

And we care because . . . ?

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Too late El Reg/Faultline. CBS already announced they're going OTT.

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I can handle a couple more subscriptions.

I currently pay for Amazon prime and Netflix. I can handle a couple more £6-7 a months subs BUT there will be a loser.

I'll drop the license fee. It's becoming irrelevant to me as 90% of my viewing is now subs based. I can do without the other 10%.

The license fee is one of those annoying archaic vestiges that bug me, like having to still pay for a 'voice line' and calls for ADSL when I don't use the voice/calls part.

I just need a data only line!

Sod the "you still need a license cos...".

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Pint

Re: I can handle a couple more subscriptions.

J7: "I'll drop the license fee."

Canada here. I'd like to pay the License Fee and have full access to all BBC programming. The only issue I can foresee is not enough hours in the day.

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Re: I can handle a couple more subscriptions.

I would argue there isn't that much of real quality left to watch on the BBC. The 'good stuff' on the BBC is all made with export in mind anyway but that's another story.

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Re: I can handle a couple more subscriptions.

"Canada here. I'd like to pay the License Fee and have full access to all BBC programming. "

No! No! You really want all of the gems the Beeb foists on us, and you want to pay?

Strictly Come Dancing? The Voice? Antiques *ucking Roadshow. Songs of *ucking Praise? East Enders? Holby City? The Great British Bake Off? The effete and increasingly soapy Doctor Who? The Graham Norton Show. Watchdog. Even the BBC news is now a dumbed down, non-investigative, timid government mouthpiece. And it comes with a shed-load of government encouraged climate change doom.

Any time they look like they're backing a winner (eg the BBC Wales scifi/drama stuff) they throw it away so they can stick with Songs of Praise and Antiques Roadshow. Previous glories of period drama were thrown away, and all sets, actors and writers dumped at sea, so that Holby City could continue to be made and spewed forth. And as for comedy, there's precious little of merit going back to the 1970's.

Canada, you're welcome to this pile of state produced ordure, but I say you'd get better value cracking open a beer, and streaming yourself some grumble.

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Pint

Re: I can handle a couple more subscriptions.

Well said!

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@Ledswinger

It's about time we implemented The Great British Bake Off, the way Norman Tebbit wanted a Cricket Test - if you're shown the Bake Off and don't enjoy it, you're promptly deported to somewhere far less British.

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Re: I can handle a couple more subscriptions.

like having to still pay for a 'voice line' and calls for ADSL when I don't use the voice/calls part.

I just need a data only line!

You can get a data only line if you ask your ISP to ask BT very nicely. It costs a few quid more than having a voice line.

The cost of providing and maintaining a copper phone line does not change because you are not using it for voice does not lower the cost of provisioning and maintaining the line. Therefore, a data only line must cost at least as much as a voice+data line.

A phone line used only as a data line will never provide any revenue from calls. Revenue from calls offsets the provisioning and maintenance costs - if you receive £2-3 extra per month per line, part of that pays for maintenance. Therefore, a data only line must cost more than a voice+data line, because there is no on-going call revenue.

So, how much do you really really want that data only copper wire? Wouldn't you rather have a free phone service to go with it?

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Re: @Lamont Cranston

"if you're shown the Bake Off and don't enjoy it, you're promptly deported to somewhere far less British"

What, like how we used to transport people who didn't share Britain's law abiding values? Look where that got us: Bloody crims' descendants are living it up in Oz, whilst we sit in our poxy little houses in our overcrowded, damp and grey country. And in the meanwhile some arseholes in Westminster have made things worse by hitching our cart to the plodding three legged donkey that is the EU, so we get freedom of trade for European criminals, and to share in the wasteful, backward, statist, and bureaucratic values that are central to the heart of every true European.

I do agree that it is quintessentially British to make a programme in which uninteresting people bake a cake, and then uninteresting but slightly dislikeable people criticise them, but it is equally quintessentially for only the oldest, most bewildered and most be-cardiganed to actually watch such cheap schedule filling crap. People still pay to watch or buy Dad's Army from almost fifty years ago, but I can't see people fifty years hence marvelling at the talent and wit of the Great British Bake Off.

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Re: I can handle a couple more subscriptions.

I just want a data line...why do I want voice tied to a physical location...so I can be told about a great new Government scheme...? I've even got my parents to finally call me on my mobile number, that hurdle has been crossed.

The pricing you mention doesn't really make sense nowadays. Needs to change.

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Re: I can handle a couple more subscriptions.

The only thing I keep the VPN for on iPlayer are Sherlock, Dr Who, Qi, Have I got News for You. And Dr Who is no longer worth watching.

At least you can iPlayer Radio4 from the colonies

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Re: I can handle a couple more subscriptions @Tom 38

<<The cost of providing and maintaining a copper phone line does not change because you are not using it for voice does not lower the cost of provisioning and maintaining the line. Therefore, a data only line must cost at least as much as a voice+data line.>>

Something strikes me as illogical. In your own words, the cost of provisioning the line is the same, so what does it matter if the user does voice or voice + data, or data only? It should cost the same.

I would say actually it should cost less for data only than data and voice because there's no need to maintain a customer record on the voice side of the business.

I think what you want to say is that voice subsidizes data by sharing a part of the line cost. In that case, a fair pricing structure would show copper maintenance as a line item, and voice and data as add-ons, as they are. Fair pricing structure telecom company is an oxymoron though.

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Re: I can handle a couple more subscriptions.

You are correct, Ledswinger, in your assessment of the Beeb's output as ' this pile of state produced ordure', but it is still better than the pile of commerce produced ordure. I would rather get herpes from the BBC than AIDS, Ebola and XDR-TB from the commercial broadcasters.

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Re: I can handle a couple more subscriptions @Tom 38

Something strikes me as illogical. In your own words, the cost of provisioning the line is the same, so what does it matter if the user does voice or voice + data, or data only? It should cost the same.

A voice line has the potential for extra revenue (voice calls). A data line has no potential for extra revenue, because the data portion is rented by BT to your ISP, they can make no money from it.

I think what you want to say is that voice subsidizes data by sharing a part of the line cost. In that case, a fair pricing structure would show copper maintenance as a line item, and voice and data as add-ons, as they are.

That is exactly what is happening. Made up numbers - a line costs £15/month. If you take data, BT make no revenue from you and do not subsidize the line. If you take voice, BT do make revenue from you, and subsidize the line by £3 a month.

Data line: £15 + £0 = £15

Voice line: £15 + -£3 = £12

This is hardly rocket science.

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JJS
Thumb Down

Unbundling required in the US

I would be happy to cut the cord right now and use OTT services like these but the savings just aren't there yet. In my area, Comcast is the only broadband provider capable of the bandwidth required for these OTT services. I'm currently on a package that has 50mbps internet, basic cable, and HBO that runs me $83/mo ($93/mo after mandatory HD cable box rental). Let's say I want to drop that and get broadband only, my options are 20mbps internet at a cost of $54/mo or 50mbps at $64/mo. But wait, the fine print says "requires subscription to either to XFINITY Digital TV or Voice service at regular rates" so add at least $20/mo for what is basically OTAOC (Over The Air Over Cable) I'm not going to use at all running that plan up to $74-84/mo. Add on $10 here and $10 there for OTT services to replace the cable TV and I'm right back where I started.

I fear the result of these OTT services is just going to be a greater restriction on broadband-only access from these companies. As they lose TV customers, they'll have to make up the revenue from somewhere and that will be broadband customers by either forcing a TV subscription like Comcast does or just raising rates/adding caps. In the end, watching TV will just get more expensive whether you do it via broadband+OTT or just add the TV package to your broadband.

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Megaphone

Re: Unbundling required in the US

["requires subscription to either to XFINITY Digital TV or Voice service at regular rates" so add at least $20/mo for what is basically OTAOC (Over The Air Over Cable)]

Ah. Tied services shouldn't be allowed. Write to your congressman and demand that this practice be outlawed. Write to the FCC and demand that this practice be outlawed. Write to all your friends, neighbours, and countrymen to demand that this practice be outlawed. It is flagrantly anti-competitive and should rise the ire of any self respecting capitalist that has the good fortune to live in the Freedom Loving United States of America!

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Re: Unbundling required in the US

I believe this is a misunderstanding of the fine print on the OP's part. Without having read the exact terms he(?) referenced, they are almost certainly referring to the advertised price being valid only with the bundle.

Looking at Comcast's website now (http://www.comcast.com/internet-service.html) they definitely offer stand-alone Internet, at least in my area.

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Re: Unbundling required in the US

I have stand alone internet from comcast, and honestly its not that good, and I keep getting comcast calling, and harassing me at least once a week(even though I told them not to call back) to up my subscription cause for $15 more(for 6 months then $50 more for a year and a half after due to contracts) I could get cable TV I'd never watch, and 10Mbps faster download...

If more places do this like HBO I see comcast enabling the currently disabled data cap(and lowering it), and feeing people up the ass for not taking cable through them.

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Re: I believe this is a misunderstanding

No, it's skipping the lawyerese and translating it into plain ordinary English ('Merican version, not Brit). When I use to work at a screwdriver type white box IT shop we had a saying: "You can pay us a service contract over time, or you can pay us service rates on demand. Either way it works out about the same for us."

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Go

Re: Unbundling required in the US

Usually there are alternatives to comcast, specially in areas where comcast has bothered to offer a 50mbs line. I use my locally grown ISP for organic interwebs access.

  • Internet @ 100mbps: $50/mo
  • Netflix: $8/mo
  • hulu: $8/mo (seasonal)
  • Willow TV : $15/mo (seasonal)
  • + HBO: $10/mo (will probably turn off netflix)
  • Indoor antenna for over-the-air channels : $70 (1 time)

So for a similar cost, one gets a genuinely faster internet. And a much greater control on content: seasonal subscriptions + anytime watch + any device etc. I know brainiacs at comcast have tried to address the flexibility issue via xfinity, but it's not on all devices and still requires that ugly cable box in your living room, which if you are renting is $8/mo extra with a potential fine of X00.00 dollars, if "you" lose it when you end your subscription.

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Re: Unbundling required in the US

No, there is almost never an alternative in most of the US, in some more forward thinking areas oddly enough like Tennessee Kansas there are, but in most areas there is only one choice. And this has been made possible by the various city governments taking bribes to allow absolutely no competition. I live in Los Angeles and our government sold us like cattle to Time Warner and we have but one real option, nobody else is allowed to install their lines so everyone gets stuck with them. And even where it might be allowed all the bigger companies make no secret of being very amicable about not competing, it’s much more profitable to engage in price fixing than trying to offer a better value than the other guy.

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about 20 years after every other form of entertainment began being delivered over the internet.

20 years ago when less than 10% of the developed world was on dial-up ?

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Not for me until they sort out the reliability

Conversely, I’ve dumped my OTT services and don’t even bother with iPlayer etc anymore. Why? Reliability just isn’t there.

Getting 2/3rds into a film on NetFlix or Amazon etc only for it to be stopped by the box/app/Internet connection bombing out for a few seconds, then having to painfully try and get it going again – usually from the beginning and fast-forward (SLOWLY) completely ruins the film watching experience. Not to mention the fact that receiving these programmes in HD is a black art as “sometimes it’s HD, sometimes it isn’t” – the content provider decides. iPlayer and the like are just as crap if you select the HD option, which on a 50” screen is the only realistic option.

I’m in my 30s, so have been brought-up on watching my programs pre-recorded on a TiVo or disc, so the experience is, 99.9% of the time, a faultless experience. Perhaps the younger generations who stick a film on the ‘big telly’, then sit tw@tting about on Facebook with their tablet or smartphone don’t really notice the problems of OTT.

Pass me the VHS remote.

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Paris Hilton

Re: Not for me until they sort out the reliability

> the box/app/Internet connection bombing out for a few seconds

Details, please ?

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Re: Not for me until they sort out the reliability

Get Iplayer might be a solution in that case, provided you have a box with storage to stream it from. It's a bit of a hack but it solves the 'buffering' issue, and you can specify HD download. Plus, stuff you want to show someone else, you can keep.

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Anonymous Coward

> Once they realise that they can get the service without a cable TV subscription, they could become a cord shaver or cord cutter, and dump their cable sub – or part of it.

I don't think a lot of people outside the US and Canada realise how much the cable companies here are despised. Most people will cut the cord at the drop of the hat.

However, I don't think that there is much of a future for the likes of HBO with a subscription channel for just their own content. Netflix is popular because it is a general delivery service. Yes, they do have a few of their own productions, but they are an aggregator like the cable companies are at the moment and that convenience of broad coverage, cheap price and no adverts has a value.

To be honest nearly everything I watch is on Netflix. It's worth far more than the $8 I pay each month. That's so small I don't even notice it going out of the bank. How can cable possibly compete with that?

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>How can cable possibly compete with that?

By blocking/throttling Netflix?

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