Wednesday, August 19, 2009

How Does Hulu, Jive with Authentication

Cable companies frustrate me. They scramble television channels and require each TV to add a converter box to watch them, and then they charge you extra for those cable boxes. Consequently, you are being asked to pay more for the same channels. And the box they require you to take is neither user friendly or reliable, adding more to one's frustration levels. And as cost of service rises and frustrations grow, customers seek alternatives. Some go to telco for price deals, some drop cable all together. I replaced a Tivo box with a converter box to get HD and VOD. The price rose $21 a month. In a year, I could have purchased a Tivo HD upgrade box. And while I won't get VOD, I would get a better box and HD via a CableCard. But before I make that choice, I call the cable company and, lo and behold, I fine a promotion to lower my cost to only $10 more a month. I mean I am a triple play customer who buys VOD movies and premium channels. Regardless, I will start to price compare with Fios. And then check in again with Tivo.

But I am not alone, networks are also making it easy to drop cable. With shows on Hulu and, all one needs is a broadband connection to watch a number of shows. No converter box, just an internet connection. As long as these networks embrace these free services, authentication won't mean much. It is these kinds of services that are cannibalizing cable affecting basic cable subscription. And should these same free services change to a subscription model, well hello Netflix, Blockbuster, and digital antennas.

With fingers in both cookie jars, I expect free will go away as authentication procedures can be set and subscription dollars maintained. With ad dollars declining, subscription is seen as equally as important to the bottom line.