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Jafoo said:

Does Verizon own Showtime and Starz or something? I just don't understand how they can offer such a great price on these channels, when other providers have them for around $15 each. Thanks for the info!

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Verizon has been working very hard to get these networks to sell for less if Verizon can price it in a way to get much more volume. In simple terms most digital cable customers order one premium channel for about 10 bucks a month so both Verizon and the networks are banking on this setup working which I think it will. I also know that both HBO and Cinemax are interested in this setup but they didn't quite have enough time to work out this deal yet so they signed a deal for the 25 bucks a month for both of them until they can work out the final deal. From what I'm hearing is that Verizon is looking at having their movie package include all premium channels for a cost of around 15.99/month or for 18.99/month if you want their sports package bundle with the movie package.

In simple terms from what I've been told from a person at Verizon that the movie package will require about twice as many customers to make a profit for the networks such as Showtime compared to the percentage of customers that get say Showtime today.

So for example say if a company like Comcast has 20 million total customers. Now lets say if only 8 million of them order a premium channel. Now lets say of those 8 million customers only 2 million get Showtime. Well with this type of package if 4 million of those 8 million premium channel customers order this type of movie package they as in Showtime would make more money with that company than they did before. The problem stopping this from occuring sooner is that the cable companies would never change how they do their packages until another company started it on their own. The networks also never worked out these types of deals simply because the current companies didn't want too so as I said above they didn't waste their time. As it stands Verizon went to the networks with this plan in mind.

This IMO was going to happen simply because something needed to drive prices down at some point in time because way too many customers are starting to be driven out of the market and companies like Starz and Showtime will no doubt be hurt by this. They know as prices go up if a customer gets say HBO than Showtime knows that the chance for them to get this customer in the future is nearly gone. That doesn't help Showtime nor does it help the cable company either but than again the cable companies never cared.

With all that said above once Verizon gets on a roll in the next two years we will no doubt see all providers shift to this system because they will not be able to compete and they also know that the next contract with Showtime and such will be demanding this system. Showtime is in business to make money too and they will demand this type of contract because it will greatly help them.

Verizon's infrastructure/distribution costs may be less, passing on the savings to the end customer. Wait. Megacorp passing savings to customer...never mind. That was a stupid idea.

cdru said:

Verizon's infrastructure/distribution costs may be less, passing on the savings to the end customer. Wait. Megacorp passing savings to customer...never mind. That was a stupid idea.

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Don't forget that Verizon has to take some chances to compete with the other big players. At least Verizon understands that to get and keep customers they must always have very good prices and keep on adding the content that "their" customers want instead of just what they feel like offering or what they think their customers want. That will be the mindset that companies in the future will need because most companies know that the days of one hard wired provider are gone and they won't be able to get away with nearly as much as they have.

I would say that in 2010 you might have the choice of the following for video services.

1. You current cable company.
2. Your Telco company.
3. DirecTV and Dish Network.
4. You gas and/or power company. If you live up north and have both a gas and power company you might have a choice of two providers but most I would assume would have one provider. I know that gas and power companies will at some point offer TV service.
5. Last but not least would be cell phone companies. This will be more along the lines of 2010-2015 but I see cell phone networks having great amounts of bandwidth and if you couple that with switched video types of technology and I could see this as another viable option for TV service. As time goes on bandwidth will increase and improved methods of transmission will be available.

We have a good chance in 6 years time to have 6 different TV providers all available to us and that is just counting the most likely companies. You never know if a startup company might start putting those floating satellites in the air (the ones that aren't in space but are in the sky) because the great thing about these I'll list below.

One they aren't anywhere close to as expensive as a spacebased satellite and they can be fixed and replaced for much less. Now they can cover just one city instead of the whole US while also not having to deal as much with the FCC because they don't need approval for transponder space and locations like current satellite companies. Simply put they can have smaller satellites with the same amount of transponders because they don't need the types of power sources that space satellites need. They also won't suffer from rainfade because the signal doesn't need to pass through many cloads nor does it have to travel very far.

To give you an idea a smaller company could launch three of these to cover say just the Tampa Bay Area and each of the satellites could be setup for different uses and all three of these would cost about 2/10th of what the cheapest real space satellite would cost. This includes buiding and launching costs plus support costs.

So one satellite could provide TV service with tons of SD channels, HD locals and national HD channels. The second satellite could be used for just high speed internet service. The third satellite could be used just for Video On Demand offerings. So a company starting out could give all customers a DVR box and reserve about five hours of space per DVR box. So in simple terms they could have a built-in two way satellite internet modem built into the boxes so that this VOD satellite can sendout all the VOD offerings. They can get them encoded in say WMV format so that a two hour movie fits into a one GB file. If they can have each box download that file within two minutes that would work just fine because even if that customer fast forwards the movie to the end it might take about one minute todo so. Also not many customers will need to fast forward all the way to the end in less than two minutes. Even if they start watching it and they get to the last 15 minutes and have to leave it would still stay on the hard drive for 24 hours or until another different movie is started.

I know I went on and on but I just thought I'd give some of you an idea of what is coming and why Verizon and soon other companies will need to do things to set themselves apart from eachother.

not enough useable bandwidth on powerlines for your local electric company to compete in the video market..It is very likely they may be able provide VOIP service on a limited basis

juan said:

not enough useable bandwidth on powerlines for your local electric company to compete in the video market..It is very likely they may be able provide VOIP service on a limited basis

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They have more than enough bandwidth to offer phone service, high speed internet and TV service if and only if the TV service is offered via switched video technology on all channels. Switched video would allow them to offer every SD and HD channel available without having to send any but the one requested at any given time.