With all changes in life comes a reluctance to accept the change and a tendency to fight them. In Canada, we are undergoing a significant amount of change in the mobile and Cable TV markets. The losers are clearly the main providers of these services, namely Bell and Rogers. I predict in five years or less, we will no longer need to pay for Voice, Long Distance (in North America), and the classic Cable TV. It will be replaced by something very different and all of it, travelling across data. No longer will you be paying for voice plans, long distance on the same continent or Cable TV services.
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| Have you seen one of these? |
Voice/Long Distance – There was a time when most had a home phone, what many call a “Land Line”. When you needed to make a call, you called from your home phone or a pay phone. Few had cell phones, and with cell phones the utility of the phones was generally limited to basic calls or pagers.
Now, finding a land line installed in a house is becoming rarer. Even more of a dinosaur is the pay phone, these are being removed from public spaces at a record pace. The Cell phone is most people’s one and only form of communications. Long Distance calls with Cell phones are increasingly expensive. Bell alone has close to 7 million wireless subscribers [source], all of them with voice plans of some sort and Rogers with 8.6 million subscribers [source], this is no chump change to these big guys.
What will happen next, phone calls inside of North America will be free. Anywhere in North America. No long distance charges, no local plan charges. With the advent of easy and available VoIP (Voice over IP), users will no longer require large and expensive phone plans. Indeed, today most of this is a reality in Canada: Calling businesses in north america is free from any phone calling 1-800-GOOG-411. Smartphone users can install applications like Skype that allows for free Skype-Skype calls anywhere in the world. Gmail users can now use their computers to make Voice calls anywhere in North America for NO COST. If you have a computer or a netbook, you don’t need a voice plan on your phone or a home phone. These services also generally allow for international calls at a much lower rate than Bell or Rogers would.
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| A blast from the past |
Cable TV – There once was a time when you could only get TV though the cable provider or by way of the rabbit ears. With rabbit ears attached to your TV, you might get a few channels, Global TV, CBC (hockey is a basic right). You, like everyone else, were looking to watch the shows you wanted to see: Knight Rider, The Incredible Hulk, and Starsky and Hutch. With cable service, you could get all those shows and you watched them when they were on or had to wait for a re-run.
Today, we have a number of Cable TV options. We have the basic digital cable, HDTV options, package deals from the larger companies to entice us into long term contracts. If you wish to watch shows on the subscriber channels such as Showtime or HBO, you’ll pay extra for that. Satellite options are provided from Bell and are generally on par with what the Cable line providers offer.
Fast forward to the future, you don’t pay for cable service, you don’t pay for satellite service. In fact, you are very controlled about any sort of monthly fees you pay. You still like all the great shows, but the way you see them is different. You have an LCD TV, 47 inches or bigger and attached to that is a computer connected to the internet. In this scenario, you can watch anything you can imagine:
You want to see a TV show: Connect to a proxy, open Hulu and watch the show
You want to see a movie: Connect to a proxy, open YouTube, Hulu, FreeDocumentaries
You want to watch a Blu-Ray rental: Pop it into your Blu-/Ray drive
You want to see a clip of something: YouTube has most short clips
You want to see an event: Go to the event’s website to see free stream (IE CBC Hockey/Olympics)
Note: I have not mentioned the illegal downloading of content, this should be a moot point as all content is going to be available online eventually.
Why are the providers worried about this? – Cable TV services are one of the biggest earners of the cable companies (Rogers Cable makes close to $2 billion a year [source]) . When the content creators are able to get this content to people cheaper and faster, they will continue to do it without the cable companies. I’m sure Bell and Rogers are thinking about loosing that much revenue. When users start demanding the option to remove the voice plans from their services, the providers will have little choice but to comply – this will save the average subscriber $25 to $150 a month; Revenue that bell and Rogers are at loathe to loose kind of money.
The big companies aren’t just sitting idly by while these changes take place. You’ll notice more an more that Bell and Rogers are taking this major shift seriously. Rogers has recently reduced its bandwidth cap on all High Speed Internet packages (effectively raising the cost for Internet data use). Rogers has also been aggressively promoting the Rogers on Demand Online service – while it’s not clear how this service will materialize in Rogers plans, but it’s existence is a clear sign of Roger’s intend to shift media operations. Also, with the news that Canadians pay the MOST for wireless services, don’t look for this to drop any time soon.
What are your thoughts? Have you been ripped off by Rogers or Bell? Are you familiar with other ways that the market is shifting? Share your thoughts below.
Update: It’s worth noting a great article at TechCrunch discussing more details about this shift. Check it out here.