Tech transition comes at a cost for many
There’s been considerable talk about the “public interest” lately in the context of the Comcast-NBC Universal merger, without much explanation as to what that means.
In terms of what can genuinely be achieved — or at least ought to be — here’s your answer: providing minimal safeguards to ensure the economically disadvantaged, especially children, aren’t completely left behind by the current media evolution.
This week’s CES show is filled with the usual assortment of dazzling consumer electronics designed to make early-adopters salivate. But in what’s increasingly a pay-as-you-go environment, those gizmos and indeed the entire tech transition come with a price-tag — one that threatens to draw stark lines between haves and have-nots.
So let’s look at the current playing field in the context of the media’s inexorable technological march.
To begin with, unemployment in the U.S. remains near 10%, with those in the “under-employed” or “given up looking” category perhaps doubling that. And while people will clearly pay for stuff they genuinely feel they need, those grappling with necessities will have to make choices about discretionary expenses.
There’s little doubt people have more options these days regarding how they access entertainment. Whether those alternatives involve saving money or greater affordability is another matter entirely.
The buzz heading into CES centered on tablets — as in the iPad ($500 and up) — and Internet-capable TV sets, both representing sizable investments for a population that has already spent the past few years upgrading to high-definition TVs.
The economic downturn also hasfueled discussion about the prospect of cord-cutting, a phenomenon — or some would argue, myth — where people drop expensive monthly cable or satellite bills, relying instead on downloads, Web viewing or even antennas.
Richard Schneider — president of St. Louis-based Antennas Direct, which sells antennas to receive free broadcast signals — says consumer antipathy toward cable, coupled with the availability of broadband, is leading people to explore less-expensive delivery systems.
“Every time there’s a cable price increase, our phones ring off the hook,” Schneider says. “People are crying ‘uncle.’?”
The most recent Nielsen data don’t suggest a major exodus, with 90% of U.S. homes cable and/or satellite ready. But that still leaves more than 11 million households that aren’t — either by choice, or out of necessity.
At the same time, the cost of subscription TV keeps rising, with most consumers now shelling out more than $75 a month — a figure destined to increase, in part due to broadcasters negotiating retransmission fees. DirecTV has stated its rates will rise in 2011.
Still, cord-cutting won’t come without sacrifices, as those without a cable connection will do without an increasing number of marquee events. This is especially true for sports — the kind of programming people want to consume live, not later on Hulu — migrating from broadcasting to pay venues, including this year’s Bowl Championship Series, which shifted to ESPN.
While ESPN has touted its strong ratings for showcases like the Rose Bowl, tune-in has declined vs. last year, when Fox carried the games. Might the lack of access to 11 million homes partially account for that?
The tide nevertheless keeps flowing in that direction — both nationally (see TBS teaming with CBS on its NCAA tournament bid) and locally. Indeed, in Schneider’s home town, the St. Louis Cardinals announced that this season’s TV package will air exclusively on cable — the first time broadcast TV won’t carry any of the team’s telecasts.
For fans and consumers, alas, even if their video costs rise, staying home remains the cheapest option. Since the resurgence of 3D movies, ticket prices have climbed, often surpassing $60 in major markets for a family of four, without parking or popcorn. Then again, the same family would spend more than $300 to attend a single NFL game.
Suddenly, the couch starts to look pretty good.
Within the business, the stress engendered by hard-fought-over dollars is becoming evident on multiple fronts, from the threat of player lockouts in NFL and NBA labor talks to carriage battles between basic channels and cable operators — with fans caught squarely in the middle.
Sensing that consumers are tightening belts, some cable systems — including Time Warner Cable — are offering deals ($30 to $40 a month) on scaled-down packages, which figure to put the squeeze on weaker networks. Similarly, Comcast pledged to offer low-cost broadband service to disadvantaged families participating in the National School Lunch Program, clearly trying to grease the FCC’s slow-moving wheels.
For the well-to-do, the technological boom represents a horn of plenty, both for them and their kids. The options — mobile, widescreen, interactive — are numerous and dazzling.
By contrast, children who lack cable — the home of Nickelodeon and the Disney Channel, ad nauseam — have trouble finding much to enrich them in the broadcast realm other than public TV’s Big Bird.
The excitement spurred by chatter about new technology tends to race ahead of such concerns. But that might be a luxury the industry — like many of its customers — can no longer afford.