Koo’s Corner

It’s time for bed, but not before some interesting tidbits to come through in the last couple of days.

- The Big Ten Network and Time Warner Cable have reached a distribution agreement. Last week talks heated up as both sides engaged in a back and forth posturing/propoganda battle. This is huge for the BTN as another 2.5 million people will get the network on basic cable in the Big Ten region, and also sets the groudwork for future distribution on the sports tier for those outside the Big Ten Region.

The timing of this annoucement also coincides on the day that ESPN announced an extended agreement with the SEC, effectively killing the possibility of a launch of a rumored SEC Network.

- There are rumblings of troubles for Vudu, the on demand media box that I am a fan of. While its not clear exactly what’s true and what’s rumors, there has definitely been a management shakeup as well a pending strategy overhaul looming.

- Pacino and De Niro in a new movie coming out? I couldn’t dig up much on Righteous Kill other than a trailer I saw earlier. Although its big news that these two have teamed up again, expectations on IMDB are very tepid with community members skeptical that 50 cent also stars in the movie. Another fan said that the title sounded more like a Stephen Seagal movie compared to a classic De Niro and Pacino film.

- Lastly I checked out the new MTV show tonight Exiled. I liked the concept. A bunch of bratty kids who had obnoxiously over the top Sweet 16 parties, are still brats (shocker!) and need some type of intervention. So why not send these MTV made prissy pre madonas to a third world country to toughen them up a bit?

MTV pays the bill and lines them up with some type of third world boot camp exotic destination in order to “open their eyes” to real life struggles.

The whole appeal to me was seeing these kids struggle and suffer. Yeah its basic schadenfreude, but these kids are in need of a thorough public belittling. Unfortunately though the show comes off as an extension of Sweet 16, with you ultimately end sympathizing with the kids and rooting for them.

The problem is that there is already a show like that called Made, where young kids overcome their shortcomings to achieve something that’s seems outlandish. Exiled was just more fluff that will most likely perpetuate these kids’ obnixious and pompous egos instead of a whole hearted reality check.

With the college football season less then a week away, its becoming an intruiging storyline of the Big Ten Network can reach distribution deals with the remaining cable companies who have yet to broker a deal with the upsttart sports network.

2 months back Comcast joined Dish, DirectTV, Verizon, ATT, and many others to carry the network with rumblings that MediaCom and Time Warner were reopening up negotiaions.

Earlier this week, Gene Smith (Oho State’s Athletic Director), made an announcement informing fans that Time Warner negotiotions had stalled and that those looking for the network should look for diffrent providers.

Smith’s email effectively painted Time Warner as the bad guy. Time Warner has struck back by proposing to allow BTN football games to be available on a pay per view basis. While Mediacom seems to have brokered a last minute deal for distribution, Charter Communication’s is still negotiating , the BTN and Time Warner saga has become a half hearted posturing and rhetoric war between the two companies.

The pay per view proposal was a half ass posturing move to paint the BTN as the bad guy (not saying they aren’t). Time Warner does not seem to be legitimately pursuing a deal and is more dragging their feet in negotiations to give the appearance to subscribers that they are pursuing a deal.

The BTN but Time Warner on blast once again.

“Time Warner is well aware that it cannot selectively choose to air a network’s programming in lieu of full carriage. In addition, offering to do so to a customer base it has effectively ignored for the past year in not carrying the network is counter-productive and creates both confusion and false hope.

“While proposals have recently been exchanged, there is a wide gap between what Time Warner and its other competitors would seem to agree is reasonable and fair. Somehow America’s top cable operator, largest telephone company and two satellite providers have each decided to make the Big Ten Network available to their customers. There are another 230 or so similar companies, serving more than 55 million homes and seven out of every 10 folks in the eight Big Ten states, that each carry the network, too.

“Time Warner has already had more than 18 months to decide to offer the Big Ten Network to its customers, and in a statement Wednesday said ‘we are ready to carry the network.’ Fine. Then they should carry the network, and at terms comparable to the network’s other agreements. Or they should tell their customers they have decided not to. Either way, fans deserve to know the truth.”

The bottom line here is that this is a war of attrition and both sides are pretty dug in. BTN has some pretty solid distribution, but covets getting Time Warner in the fold. Time Warner is poorly run company and has done some internal analysis that probably shows that the amount of money it will cost to broker a deal is more than the amount of subscribers the company will lose, especially if they continue overstating their intentions and progress to reach a deal.

The trut is that the company is slowly bleeding customers. Some because of this, some because their product is average, and a lot because their customer service and market strategy is garbage. They should take a page out of Verizon, ATT, and the satelittle companies and put am emphasis on consumer needs and wants rather than then bottom line.

I have often blogged about the Big Ten’s network uphill struggle for distribution by the major cable companies. About a month ago, the upstart sport’s network cleared a major hurdle by getting distribution on Comcast. However the one state in the Big Ten region, that really missed out was Ohio.

Unlike other states in the midwest, the majority of Ohion’s get their cable from Time Warner, a cable distributor that claimed they were still in negotiations with the Big Ten Network.

Both sides seemed to be nearing a deal, as Time Warner ever promised prospective customers in Ohio that a deal would be brokered by the start of the season. However Ohio State athletic director in an outbound email, paints a much more pessimistic outlook. Below are some highlights, with the full version of the email being found here.

While I think its a nice courtesy that someone updates the fan’s who are weighing making decisions as consumers, I am not sure its the AD’s responsibility to do this. In what’s most likely a posturing move by the Big Ten, Time Warner is sure to lose a significant amount of customers who will not put with not having the network two years running.

Time will tell if a deal will ever be brokered, but to me Time Warner (already know for a inferior products and service) is really dropping the ball on this one by allowing hoards of customers to switch away from them.

Today on a wimb I did a Google News search on the Big Ten Network looking to see if they had mady any progress to strike a distribution deal with Comcast.

I found an article around noon with an update was iminent in the coming week. Fast forward to a couple hours later when I was visiting Yardbarker blog, Awful Announcing, to see that indeed the a deal had been finalzed bringing the Big Ten Network to basic cable in the Big Ten Region . The deal also means that the Big Ten Network will become avaiable on sports packages for those with Comcast outside of the Big Ten region.

The bottom line is that the agreement means “Just 40 percent of the homes equipped with cable or satellite dishes will be able to receive BTN in Ohio as things stand. That compares to the new totals of 89 percent in Indiana, 87 percent in Illinois, 83 percent in Pennsylvania and 79 percent in Michigan.”

The agreement is a HUGE win for the Big Ten Network which now has legitimate staying power as a cable network. Regardless if Charter or Time Warner pick up the network, BTN has enough distribution through ATT, Comcast, Dish, Direct TV and most likely Verizon Fios in the near future to survive the two remaining holdouts.

Let’s hope the NFL network is able to find similar success in the coming months as we approach fall.

It was about 4 years ago when I predicted the demise of DirectTV, the largest satellite tv company and biggest rival to cable providers. I made the proclamation after seeing the new On Demand DVR’s that have since been rolled out to the masses (I lived in one of the initial test markets and was enthralled by the new technology). I hypothesized that in the end consumers would opt for digital cable because of the new On Demand technology in addition to the inclusive telecom bundles being offered by Time Warner, Comcast, and others that included phone, internet, and cable (or 2 out of 3).

4 years later I now think the opposite as Digital cable providers have stagnated in terms of product and service while DirectTV has revamped their offering. Below are three key differentiation points where DirectTV has seized a clear competitive advantage.

1) HD-

6 months ago regardless of who your cable or satellite provider was, HD content was not widely available. While cable companies have added to their HD lineups, the recent Direct launch of a new satellite which has added a wide assortment of HD channels has anointed DirectTV the HD king.

HD has their own group of enthusiasts who fiend for anything and everything in HD. Many of these enthusiasts have migrated to DirectTV or have recently relocated and have found this once difficult decision to be made a whole lot easier. In fact Direct TV grew its customer base by a net quarter million subscibers in 2006, with much of that growth attributed to their market leader status in HD content.

2) Sports Progamming

DirectTV has made it a priority to out pace the cable companies in available sports programming. Below are 3 examples

a) The widely popular NFL Sunday Ticket is only available on DirectTV. The Sunday Ticket and therefore DirectTV serves as the only option for displaced fans outside of their team’s television market as well as the only viable option for eateries, pubs, and other commercial locations that hope to attract patrons by having the total assortment of NFL football games. Direct TV not only makes extra revenue from this popular package ($$$$$$ for businesses who subscribe) but is now offering their Super Fan package for an extra $100 bucks to fans looking to view every single touchdown on a Sunday afternoon.

b) The NFL network. DirectTV was one of the first providers to pick up the NFL Network and was wise to do so as the once upstart NFL network now broadcasts some of their games on their increasingly popular cable channel. Last year cable providers who had yet to strike a deal with the NFL Network (some vow to never carry it) felt the wrath of multiple fan bases who were not able to watch late season showdowns that were showcased on the network. With no deal still in place with some of the largest cable providers, DirectTV stands to absorb a second wave of pissed off NFL fans.

c) With the help of DirectTV, the upstart Big Ten Network became the first cable network in history to be in 30 million households in their first 30 days. The big 3 cable companies have yet to join the party though and are losing subscribers at a fast rate to Dish Network, smaller cable companies, and Direct TV who do carry the network. Cities inside the Big Ten region include Chicago, Columbus, Cleveland, Cincinnati, Indianapolis, Detroit, and Minneapolis. The Big Ten also has the largest alumni base of any athletic conference thus extending the number of people who are steamed they cannot view their alma amateur’s athletic events on television. In fact the game of the year, Appalacian State vs Michigan was the Big Ten Network’s inaugural broadcast and was predicted by cable executives to be an example of the “second class” programming.

3) Customer Service

The cable company is notoriously known for having the worst customer service and product quality of any industry in the United States. In fact consumer reports place Comcast with the lowest customer service quality in the United States with Time Warner and others close behind. With high customer service internal turnover combined with hardware and network issues constantly irritating consumers, the cable companies are entrenched as US consumers number one foe.

While DirectTV gets mixed reviews for their customer service, the majority of subscribers swear by the companies ulta responsive customer service efforts. DirectTV is known to go to extreme in keeping disgruntled customers often throwing in premium channels, sports packages, lowered rates, or new hardware in exchange for a chance to “earn back your business”. This customer centric approach combined with a more robust and streamlined website has allowed DirectTV to retain customers at a higher rate while also appealing to customers like this lady who have found themselves at war with their local cable company.

Conclusion: Similar to US auto manufacturers, the big 3 cable conglomerates have some catching up to do. Instead of focusing on emerging market trends and consumer needs, these companies were too busy focusing on mergers and acquisitions rather than focusing on product and now find themselves with a more and more hostile customer base who are seeing added value in making the switch.