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Update: Cable Industry Launches Its Own Netflix

by Jeff Steele

In an update to my Netflix post from this morning, Time Warner Cable, Comcast, and Cox Communications have banded together to launch Vutopia, a subscription VOD service that is being touted as a “competitive response to Netflix”.

According to Andrew Wallenstein at PaidContent, whom I cited in my previous post, “Like Netflix, it’s a trove of hundreds of catalog movies from major studios accessible via TV and internet. In addition, it’s packaged as subscription VOD, which means one monthly price to watch all the movies you want.”  It’s worth noting however, that unlike Netflix, Vutopia is only available to cable subscribers.  Which is one more reason that Netflix will continue to persevere in the VOD market.

13 Responses leave one →
  1. Scott Hillman permalink
    December 8, 2010

    One of the big history features of the history of the internet so far, is that the company which starts up a particular part of the industry is rarely the company that sucseeds. I would be intrested if netflix is a An EBAY or a Lycos.

    Usually this happens when a company kind of finds the flaws that doom a company-like myspaces reliance on html, or ASKS one type of search engine paradine.

    That stated in the history of the interntet industry I don’t know where a big company provider has replaced its its indipendent startup.

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  2. December 8, 2010

    Now there’s a shocker!

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  3. December 8, 2010

    Fascinating development.

    The history of the cable systems regarding VOD has been to treat it like the black sheep of the family; most VOD permutations in people’s living rooms are seriously lagging in user-friendliness, usability, and attractiveness.

    The cable industry was not aggressive about designing what consumers want, and that includes uncovering latent desires that consumers can’t clearly express now. The very real joke that movies beginning with the letter “A” have a big advantage in the VOD world is an indictment about how consumer-hostile the cable VOD customer-facing systems are.

    Cable has shown itself to be moribund regarding consumers in this respect; it has not yet escaped the decades-old (and in Internet years, eons-old!) concept of sequential channels (Channel 1, Channel 2, Channel 3, ad infinitum) while our society has absorbed an entirely fluid method of tangential discovery (this looks good until I notice that and jump over to it until I notice something else and jump to it and click on something until I get distracted by something entirely different and then want to return to the third thing I was watching).

    While the cable company feeds us alphabetical lists hidden behind layers of sub-menus, we instead want to immediately play “six degrees of Kevin Bacon” with our viewing choices. “Oh! Look at that bright shiny thing over there! I want it! NOW!” We want to drag a box with our finger onto another box and have it immediately show us what we seek.

    Can cable climb out of the primordial ooze of its early ’70s history and move into the new world of 2010 usability? Here’s their chance. It will be fun to watch if Vutopia can develop into anything like utopia.

    And I’m still wondering when they’ll figure out a way to make HD commonplace.

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    • Jeff Steele permalink
      December 8, 2010

      The user interface provided by On Demand is appalling and should be an embarrassment to the entire industry. On Demand is owned by FOUR national cable companies (one of which now owning a studio) and yet it still can’t serve-up its product. It’s probably lauded internally for its innovation.

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      • Matt permalink
        December 9, 2010

        Improving UI for on demand and the cable providers might be a good place for Google to get a strong foothold. Then slowly work on getting access to the content.

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  4. BenL permalink
    December 8, 2010

    @Jeff. I agree with your assessment. I would call this an indirect response to Netflix. Vutopia is a distributors response and is locked behind a cable subscription. If content providers start develop exclusive deals with a true digital distributor, then Netfilx could feel the squeeze. Right now Netflix riding “high” but still vulnerable to content providers.

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    • Jeff Steele permalink
      December 8, 2010

      In this new digital age, I can’t imagine VOD exclusivity can resemble what pay-TV companies (HBO/Showtime) have coveted for years. The cable companies are certainly deep-pocketed enough to probably try, just to shore-up their market dominance for a few years, so that they become the de facto household name.

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  5. Cotty Chubb permalink
    December 8, 2010

    Let’s see: TW Cable, Cox and Comcast want to compete with Netflix. They own the pipes. Level Three says Comcast is charging a toll and making NFLX transmission more expensive. How soon before TWC and Cox join the party?

    Anyone think the Justice Department is going to care about anti-competitive behavior? Or the Congress?

    Anyone? Ahh, the sounds of silence.

    No wonder the former CFO dumped his stock last week before resigning. Is it insider trading if you can read your own hand-writing on the wall?

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    • Jeff Steele permalink
      December 8, 2010

      It’s never a good sign when the CFO bolts for the door. Maybe he dumped his stock to join public service.

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  6. December 8, 2010

    Hopefully Netflix and Vutopia is a wake-up call and solution for cable inc. to lower their general subscription rates to stem the exodus of not only the youth market but the most likely unreported general market dumping and channel reduction of cable subscribers due to their high rates. I wonder what the effect will be on viewership, ad rates and licensing fees for programming.
    Thanks for the break Jeff!

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  7. December 9, 2010

    Amazon throws its hat in the ring too!

    http://www.dmwmedia.com/news/2010/12/07/wsj-amazon-developing-tv-movie-subscription-service

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  8. December 10, 2010

    This leads right into Net Neutrality.

    The thing about Net Neutrality that bothers me a lot is, it is actually in the best interest of the cable companies and telcos to cripple the Internet in order to further their profit structures and stymie competition. It is illogical (other than that they had the ‘pipes’ into our living rooms decades prior to the ‘Net as we know it now) for this fox-keeping-watch-over-the-chicken-coop scenario to exist today.

    Somehow, something like the Paramount Decree or the century-old Bell telephone monopoly–something!–will be needed to create an Internet infrastructure that is separate from the cable companies and telcos.

    Not only will stand-alone “pipes” allow for unfettered access not impeded by self-serving profit schemes (assuming we are able to also keep them equally free from government censorship–Wikileaks, anyone??), but our Internet infrastructure appears woefully behind in technological development. Many countries are ahead of our speed, bandwidth, and availability. A stand-alone approach could encourage the kind of technological advance that America once presumed.

    The Internet is too important to democracy to be a mere add-on for corporate conglomerates to use to sell cable TV packages and telephone plans.

    IMHO. Flamers, proceed… =}

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    • December 12, 2010

      Took the words right off my keyboard, Michael.

      “The Paramount Decree”

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