Is this a case of death by a thousand digital nibbles?
Tampa Bay's cable TV and Internet heavyweights, Bright House Networks and Verizon, face lots of new competitors eating away at their franchises of providing television entertainment, online access and home phone services.
The latest bite comes this week from the annual Consumer Electronics Show in Las Vegas. Niche competitor Aereo, which operates in New York City, says it will bring its $8-a-month online TV service to Tampa Bay and 21 other metro areas by this summer.
Aereo's expansion is not good news for a high-priced cable TV industry where the customer phrase "cutting the cord" gains more credibility each year. In New York, Aereo offers 29 over-the-air channels plus Bloomberg TV. It does not offer many popular cable networks, and the broadcast networks are suing to shut it down, though they have not had much success.
Aereo's big backer should be familiar to Tampa Bay folks. Billionaire Barry Diller's firm, IAC, spun off St. Petersburg TV retailer HSN as a public company back in 2008.
"Aereo isn't ready yet to replace your cable TV service if you need reliability," says one Aereo subscriber in New York in an Associated Press review. "There are still kinks to work out. But it's a good option if you care more about saving money."
That can be a powerful selling point, certainly in post-recession Tampa Bay.
Many gray hair homes like mine still cling to bundled one-price packages of Internet/cable/phone services from Bright House or Verizon or other cable firms. But prices have crept north and are now near $150 a month.
Younger households increasingly spurn those one-price packages. They already dumped their home phones and rely on cellular service. Many skip cable TV, preferring to create their own lower-priced entertainment packages from such online services as Hulu, Netflix and Roku to watch TV shows and movies pretty much on demand. Some younger Tampa Bay viewers even watch local broadcast affiliates of NBC, CBS and ABC on their TVs the old fashioned way, free and over the airwaves — even without old style rabbit ear antennas.
"Cutting the cord" is a growing threat to the big cable providers especially during this past recession when homeowners looked anew at ways to trim expenses. At the same time, alternative providers grew. Netflix lowered its prices while Amazon entered the online movie business. And Redbox self-serve DVD kiosks spread quickly.
Most customers seem inclined to stick with Bright House or Verizon if only to maintain Internet access. In some markets, cable companies are repricing services so that must-have Internet access remains high and essentially includes cable TV, whether wanted or not.
Both firms are trying to be more nimble. Bright House's current "Hello Friend" ads reinforce its service reputation while the company pushes new home security services. Verizon's CEO, speaking at the Consumer Electronics Show, outlined the promise of more services — from health care to education — powered by an increasingly powerful online network.
Who wins? The nibblers or the nibbled? Hopefully, the best answer will turn out to be: consumers.
Contact Robert Trigaux at [email protected]