From the story:
Walt Disney Co.'s two big TV networks, ABC and ESPN, have struck a deal with cable operator Cox Communications Inc. to offer hit shows and football games on demand, but with the unusual condition that Cox disables the fast-forward feature that allows viewers to skip ads, according to a media report Thursday.Obviously this is not good for users. A little less obviously it is grand news for TiVo who sells the most successful independent DVR. It is easy to to evade the new "requirement" that you watch ads.
Here's the trick:
- DON'T rent a DVR from the cable company (they can make their DVRs reinforce this new policy if they choose)
- Do buy a TiVo (or use an PC-based alternative like MythTV)
- Tune into your Video On Demand channel
- Navigate to your movie or show (cable navigation is a pain you can't avoid)
- Record it on YOUR OWN device
- Watch normally: whenever you want, and power through the ads in the way you power through the ads found in normal broadcasts.
- (Yes, it really is that easy. This attempt to control consumers watching habits will fail and lead to a resurgence of independent DVRs and a dramatically reduced take rate for Cox's DVR products. Buy TiVo stock now.)
I'd like to say that LUS won't succumb to this ploy by the content providers but, frankly, I don't believe they'll be in a position to resist if Cox's collapse leads to new standards for cable companies and their emerging telecom competition. This is one of those rare places where competition does not work for you. As long as cable companies had an effective local monopoly on wireline video they were able to resist the content providers demands that they not let users skip ads--and up to now they have refused to cripple their DVRs or VOD content despite unrelenting pressure. In truth, content providers had little leverage. If they wanted cable viewers in Lafayette (or Atlanta or Miami) to see their VOD content they had to deal with Cox or simply not sell in that market at all. Enter prospective competition from the likes of AT&T. Now the possibility exists that content providers can give an "advantage" to one provider by refusing to sell content to their competitor unless they restrict their customers. Usually the way to exert this pressure is to refuse to sell to the new entrant--AT&T in our case. It is unusual for an established market leader like Cox to lead in giving in to supplier's demands. Once one provider in a market gives in the others will have to as well--or decide to operate at a competitive disadvantage in order to preserve their customer's rights. How likely is that? Easy answer: Not very. And since regional markets differ (Cox and AT&T serve different, if overlapping, regions) each competitor that gives in spreads the new practice to new areas of the country.
Expect a general collapse, courtesy of Cox's leadership.
I repeat: Buy TiVo.