Media, Business & Politics

Next month, Comcast will be announcing three exciting new services to join StreamPix: StreamJamz, StreamGamz and StreamPeeps. Like StreamPix, content downloaded or streamed from any of these new services will be exempt from the company’s monthly data caps.

StreamJamz is an unlimited streaming music service, similar to offerings from Spotify, Grooveshark and Sony.

StreamGamz is an unlimited video game download and multiplayer gaming platform, similar to offerings from Steam and EA’s Origin.

StreamPeeps is a VoIP 1080p HD video conferencing service, similar to offerings from Skype and Apple.

All 4 services are included with XFINITY HD Triple Play packages for no additional charge. You can add any of the streaming services to other packages for only $4.99 a month per service.

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**********[ 3 months later ]***********
Comcast has announced the addition of an ‘Internet-Lite’ option for all of their XFINITY High Speed Internet plans. Any current plan can be converted to a ‘Lite’ plan, which will include a $20 discount off regular rates, and lower the monthly data cap to 10GB. This should come as great news for XFINITY Triple Play customers who already have unlimited access to XFINITY’s great SteamPix, StreamJamz, StreamGamz and StreamPeeps services for all of their streaming video, music, gaming and video-conferencing needs. One stop shop entertainment, no need to subscribe to multiple services.

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***********[ 2 years later ]************
Comcast has announced that it will be raising rates on all of their XFINITY High Speed Internet plans by $25. This includes their 10GB capped ‘Lite’ plans, as well as their regular 250GB plans. At a recent stockholder meeting, a top Comcast executive was heard saying, “We believe the added value of our unlimited SteamPix, StreamJamz, StreamGamz and StreamPeeps services warrant the price increase, as they provide our customers with all of their streaming video, music, gaming and video-conferencing needs, without having to worry about silly data caps.

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And just like that, Comcast has managed to lower the data cap on their broadband plans to a measly 10GB, while actually raising the price, and putting Netflix, Hulu, Spotify, Grooveshark, Steam, Origin, Skype, Apple, all in a greatly disadvantaged competitive position. By not blocking any particular competing service, Comcast will have managed to sidestep Net-Neutrality restrictions, while severely limiting how much their customers can use any competing services. Yes, I made all of this up, but there’s nothing stopping Comcast from following this plan to the letter (including the stupid service plan names), if their new StreamPix service is allowed to proceed unchallenged by the FTC.

With nothing stopping them, Time Warner, Verizon, AT&T et al will surely follow suit. How long will Netflix, Hulu, Spotify, Grooveshark, Skype and the rest of the free-market competition last? How many new services, like the one Sony was considering, will never have been started? And most US customers don’t have many, if any options when choosing their ISP, so they can’t just go somewhere else if they don’t like Comcast’s (or whoever)’s offerings. The FTC needs to step in now, to stop ISP’s from dictating what their networks can be used for, and putting countless competitors out of business.

More at
ars technica, Engadget, Gizmodo

I was attempting to watch a YouTube video a friend posted on Facebook today; but since I was on my iPhone, I was instead served a message, ‎”The content owner has not made this content available on mobile.” I have the same problem on Hulu (Plus) on my iPad – videos are often marked ”Web Only,” which is Hulu’s way of saying they aren’t licensed for viewing on mobile devices. This is confusing to me; Shouldn’t content providers want me to watch their content, regardless of what device I’m using? They’re not going to make any money if I don’t view their content, or obtain it via unlicensed sources.

Quite a bit of Hulu’s content is available for free on a traditional computer; however, without a Hulu Plus subscription, none of that content is available on mobile devices such as the iPad. In and of itself, that’s an odd decision, since the free content is supplemented by ads on the PC, similar to broadcast (and most premium) content. But worse than that, even with a paid Hulu Plus subscription, some shows are still unavailable for viewing on mobile devices. And I’m not talking about premium content, at least in the traditional sense of HBO & Showtime. Shows from all major broadcast networks, including 30 Rock (NBC), Fringe (Fox), Happy Endings (ABC), and How I Met Your Mother (CBS) are all marked “Web Only” on the iPad, even with a paid Hulu Plus account. And rather than offer an option for a higher-tier ‘Super Hulu Plus’ subscription, or make those shows available for a small fee, you’re simply directed to watch it on a traditional computer, or not at all.

Sometimes when I run into one of these content-blocks, I just switch to my laptop, in which case the content owner gets their cut all the same. But sometimes I decide the content isn’t all that important, so I just don’t watch it, leaving the content provider out in the cold. Yet other times, when I do want to view the content on my iPad, I’ll connect to my computer, and with a few seconds of work, and after a few minutes of downloading, I’ll get a perfect copy from one of the myriad of unlicensed sources available online, ready to stream to my iPad. In two out of the three scenarios, the content owner doesn’t get my view, or my advertising-revenue-generating attention.

So it would seem the content providers would rather I ‘pirate’ a copy of their content than generate a return by allowing it to be viewed on my iPad or smartphone. Sure, for now they can say most people aren’t like me; Most people will just watch it on their computers. But for how much longer? Tablets and smartphones are already making a huge dent in the PC market; it won’t be long before mobile web browsing overtakes the PC, and eventually, many households will find they don’t even need a traditional PC anymore. At the same time, TVs are getting smarter, and consumers expect to have access to their online content sources there as well.

The reason content owners make (or buy) content is to make money off of it, usually by advertising during or around the content. So to maximize profits, they need as many viewers as possible. This is why they spend money advertising the content itself – they make the money back if there are enough viewers of the content, and likewise the advertising. So why would they in their right minds block access from any device? In the end, it’s their loss, not ours; but it would sure be nice if they could figure it out sooner rather than later.

iPod profits may have dropped 20% from the same quarter last year, but if you look back a few more years, you’ll see Apple is still making more on the iPod than it was just 6 years ago, a time when the iPod was considered a runaway success for the company. What’s astonishing is that in 2005, the iPod accounted for a little over 30% of Apple’s profits; and now, while still bringing in about the same amount of revenue (slightly more), it only accounts for 5% of Apple’s total revenue. This, of course, is due mostly to the iPhone, with a little help from the iPad and the halo effect around them.

So just to put this into perspective, imagine this:
It’s 2005. The iPod is on fire, bringing in more revenue than any of Apple’s other segments (desktops, laptops, music, or ‘other’). Apple stock has been on an absolute rampage, up over 400% over the past 2 years to a whopping $55/share. Someone who looks like an older version of yourself but with shaggier hair, jeans that are too tight, and neon 80s shoes, walks up and tells you to withdraw your life savings and put it all into Apple stock immediately. Of course that’s crazy, and you tell him not even the iPod can keep selling like this forever. But he says no, it’s not because of the iPod, although in 6 years, it will still be bringing in more revenue than it is in 2005; but by 2011 it will only account for 5% of Apple’s total revenue. It doesn’t even even make sense. The iPod is Apple’s saving grace, and everybody knows it. There’s no way they can top that; And it’s not like everybody’s going to go out and switch to Macs just because the iPod was a hit. Then he explains that it’s all because Apple releases a phone; and shortly after that, a giant version of that phone, called an iPad. Do you think you’d follow his advice? If you did, it would be worth a 600% increase over 6 years.

The numbers really are something. But I’m not writing Apple off yet. In another 6 years, maybe I’ll be writing the same thing about how the iPhone was dwarfed by… the iPad? Or even something else. Only time will tell. If only I had a time machine.

Disclosure: I own Apple (AAPL) shares and I do not plan on initiating any new positions within the next 72 hours.

I recently contacted my state Senators, urging them to fight for net neutrality laws that would keep the internet open, and limit how much control ISP’s are allowed have over what data comes over MY internet connection, and what they’re allowed to charge me extra for. In the past, when I contacted my senators on these kinds of issues, I’ve always received a letter back, describing how they’re trying to do exactly what I asked them to. Of course, in the past, all my Senators were Democrats. Recently, that changed, as with it, the kind of letter I was sent back.

For the uninitiated, net neutrality is the idea that internet lines consumers subscribe to should be free and open, with no restrictions on either certain websites, or certain kinds of data. For example, without net neutrality restrictions in place, your ISP may in the future offer packages, similar to cable, where the ‘entry level’ package would allow you to use your email and small / unknown websites at full speed, but all other websites, such as Facebook, Yahoo, Google and ESPN, would be throttled back to download at much slower speeds; or, you would be charged an additional fee every time you used them, similar to the per-text texting plans on cel phones. At this level, you may not even be able to access video sites like YouTube, Hulu or Netflix for free, but you could be charged a fee per minute of video you watch, again, similar to voice ‘minutes’ on your cel phone. Only a premium-priced plan would allow you to access any site on the internet without a speed penalty or extra charge. This may at first sound great, if most of what you do is check email and use small unknown websites; but what happens your cable company gives you full-speed access to all of their own offerings for ‘free’ but charges you more for a similar competing service? For instance, if you use Time Warner Cable for your broadband, and they have an online video service that directly competes with Netflix & Hulu, they could give you access to their own service for no additional fees, while charging you more for access to the others. If this had been the case when Netflix was first getting started with online streaming, there’s a good chance they never would have become a major player, and without strong competition, Time Warner would eventually be able to leverage their position and remove their own video offering from the low-end package, making you pay more for access. With no major competing offerings, your only choice is to pay up, or go without.

Of course, the media empires that connect us to the internet say they would never do something like that, so no regulation is needed. They have their lobbyists ‘convince’ government officials through ‘various means’ to argue that making net neutrality laws amounts to the government taking control of the internet, and that it will stifle economic growth. The truth is, net neutrality would in no way be a government takeover of the internet, any more than regulating media mergers is a government takeover of the airwaves; and to the argument about stifling economic growth argument, it has been shown many times over in other countries that when there is healthy competition in the broadband market, consumers have much faster internet connections, and pay a fraction of the price that Americans pay.

In any case, here’s the letter from my Senator. If you think it sounds more like a doctrine written by the media corporations themselves, you’re not alone.

Dear Chris,

Thank you for taking the time to write to me regarding the Federal Communications Commission (FCC) and the issue of net neutrality.

On December 21, 2011, the FCC voted to adopt net neutrality rules regulating broadband Internet providers. The issue is whether the Internet will be controlled by government regulators or by private enterprise and consumers in a competitive marketplace.

The term “net neutrality” might sound good, but it is just a clever name for government control of the internet. If the government were to control the internet through FCC regulations, the overall result would be bad news not just for consumers but also for the economy as a whole. Investment in broadband today is one of the few bright spots of the economy, with providers expected to invest some $30 billion per year in private capital into their networks annually for the next five years, creating hundreds of thousands of jobs. I will resist efforts by the government to control the internet.

I believe one of my most important duties as your Senator is to listen to the views of the citizens of Wisconsin and, in turn, communicate my views. I hope I have accomplished that with you.

Thank you again for taking the time to share your concerns with me on this issue. I apologize for any delay you have experienced in receiving this reply. Since taking office in January, my office has received over 180,000 pieces of correspondence. We are working hard to respond to your concerns in a timely manner.

Please feel free to contact me in the future with anything important to you or your family. It is an honor to serve you and the good people of Wisconsin.

Sincerely,

Ron Johnson
United States Senator

And my response is below:

Senator Johnson,

I recently received correspondance from your office informing me why you are against net neutrality laws. You claim that it is a government takeover of the internet. This is no more true than government regulation of media mergers is a takeover of the airwaves, and you know it. Without net neutrality, there’s nothing stopping the media companies from slowing or blocking access to websites of their own choosing, making it easier to push their own offerings, and put other companies out of business. If Comcast decided to charge more for access to Netflix, while offering their own video service for no extra cost, it would be a major blow to Netflix. But without net neutrality, there’s nothing stopping Comcast from doing just that. The same could be said for Facebook, YouTube, Wikipedia, Twitter, Amazon, and millions of other websites that started from nothing, and relied on free and open access to the internet to establish their business, and continue to rely on it to survive and flourish. You claim net neutrality is a job-killer, but how many jobs would be lost at the expense of a few top dogs at the major media corporations, if all the major ISPs implemented a tiered system of internet access that blocks or slows access to select websites or services? Innovation would plummet because small start-ups wouldn’t have a chance against the established conglomerates. Millions, perhaps billions of jobs would be lost or never created, in the name of higher profits for already established media conglomerates.

It has been shown many times over in other countries that when there is healthy competition in the broadband market, consumers have much faster internet connections, and pay a fraction of the price that Americans pay. It’s only because we allow these giant companies to be the only options consumers have, that we’re stuck overpaying for mediocre services. Without government regulation, it would only get worse for consumers, not better.

If you continue to fight against net neutrality, then you, Mr. Johnson, are not MY Senator, and I don’t need you to lecture me on how helping huge corporations put more money into the pockets of their richest few is good for me and my country.

Sincerely,
Chris J Mischler
Milwaukee, WI

Processing fee, historic preservation fee, charge card fee, convenience fee per ticket, convenience fee per order, and finally, tax. For 2 $27.50 tickets, that comes to exactly $20 (how… *convenient*..). Tickets.com is no better than Ticketmaster, and the both majorly blow. Just tell me the tickets are $37.50 like every other business & stop BS’ing me with all these ‘extra fees.’

Can you imagine if this scheme were practiced everywhere? You want to buy a $6 sandwich & a $1 water, but when you get up to the checkout, they hit you with a processing fee, a building maintenance fee, charge card fee, convenience fee per item, convenience fee per order, a fresh meat fee, and finally, a I promise nobody spit, pissed, shit, or put pubes in your sandwich fee. And of course, tax.

Thank you sir. Your ($7) lunch total is… $15. Oh, mayo? That’ll be extra.