CenturyLink's recent launch of its Prism Internet-based TV service in Omaha at about the same time Cox Communications started offering its Contour service upgrade has Omahans weighing new choices in the television service landscape.
Customers who for years have had a choice only between Cox's cable television service and a satellite provider like DirecTV — if it was allowed in their neighborhood or apartment complex — are comparing Internet speeds, on-demand libraries, channel lineups, customer service and pricing, and in some cases are switching providers as the new services tout their personalization and portability.
“Cable companies are winning telephone customers; telephone companies are winning cable customers. The marketplace is shifting, and we don't know who's going to win,” independent industry analyst Jeff Kagan said.
Take, for example, TV watchers Lucas McAlpin and Dan Tweedy. The Omaha men and their families both have recently re-evaluated their service and come to different conclusions about which was best for them.
McAlpin, a salesman in the HVAC and plumbing industry, lives near Millard West High School. He and his wife have five children between them, and the family, with six televisions, had been Cox customers for 11 years before they canceled their cable service in January 2012. They relied instead on over-the-air channels and services like Netflix, Hulu and Amazon that they stream through their Roku boxes.
“I was tired of paying Cox so much money every month for the Internet and cable,” McAlpin said, and he didn't want to use a satellite service.
A year and a half later, in September, he signed back up with Cox to watch football, and said he enjoyed the new Contour services such as whole-home DVR and the additional DVR storage space. Still, he said, the monthly bills seemed high, and when he got a mailer about Prism, he called that same night and signed up.
For him the service is about $50 cheaper a month for similar features, he said, and he likes the whole-home DVR, faster Internet speed, faster channel-changing and the wireless box that allows him to bring his TV outside to watch the game on a nice day.
“Cox tried to keep me around, by offering half off, etc., but I was very straightforward with them when I brought my cable boxes back, so they didn't push a lot,” he said.
Prices for cable and other pay-TV services are in constant flux, with providers creating promotions tied to seasonal buying cycles and offering introductory discounts. Starting Tuesday, for example, Cox is presenting new prices in the Omaha market. Prices on some service packages are falling; prices on others are rising but include a faster Internet speed.
In another part of town, longtime Cox customer Dan Tweedy, his wife and their teenage son also weighed the two services. Tweedy, who runs a natural food manufacturing business, said even though Contour cost a bit more for his selections, he liked the features and decided to stay with Cox for television and Internet service at his family's apartment near 93rd Street and Western Avenue.
He likes the whole-home DVR that records up to six shows at a time and the interactive channel guide, and his wife is getting her iPad set up so she can watch shows on the go through the Contour app.
“If I want to watch 'The Walking Dead,' and she wants to watch one of her shows, we can record one,” he said. “Before, we did have DVR, but it was only two (shows) at once. We ran into problems.”
During the football season, for example, they could watch the Husker game live, record several other games and then watch them later, fast-forwarding through the slow parts.
The couple have set up user profiles with their favorite channels, so they can go right to their preferred shows. “She won't watch my zombie stuff at all, or anything scary,” Tweedy said.
TV and Internet consumers around the nation are making these same kinds of decisions as new providers enter the market and new technologies disrupt traditional cable service, analyst Kagan said.
“Yesterday, when we think about cable television, it was a line that came into the house, channels that came over that line, and that was it,” he said. “There was no competition. There was cable and there was satellite and that was pretty much it. Where we are now, and going forward, is an entirely different marketplace.”
Not only are there Internet television offerings from phone companies AT&T, Verizon and CenturyLink, but some customers, especially younger ones, are “cutting the cord” completely and catching shows on Netflix, Amazon, iTunes and Hulu.
CenturyLink said in November that it added 17,000 Prism customers around the country, for a total of 149,000; that was before a marketing push began in Omaha. Cox Communications is privately held and does not disclose customer numbers; other cable providers including Time Warner and Comcast have been steadily losing hundreds of thousands of customers in recent years.
The explosion of tablets and smartphones was a driving force behind the shifts in the pay-TV industry, said analyst Michael Inouye, with technology market research firm ABI Research.
He said people are looking for a personalized TV experience. “Engagement numbers go up with search and recommendation (features), and that just means more video on-demand sales,” he said.
Asked whether the new services can slow cable losses, he said it comes down to content. “As long as the content consumers want is on those platforms, the consumers will stay with them.”
On the other hand, if networks and other content providers start offering their programming online, bypassing the cable or Internet TV provider, there may be less incentive to subscribe. For example, World Wrestling Entertainment Inc. last week announced that it will launch its own online channel, the WWE Network, at $9.99 a month.
“You may see the relationship breaking down,” Inouye said.
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CENTURYLINK PRISM VS. COX CONTOUR
What is it?
CenturyLink Prism: An interactive Internet-based television service launched in 2010 by Louisiana telecommunications provider CenturyLink. The service started in Omaha with a test run last spring, and CenturyLink began advertising it widely in January.
Cox Contour: An interactive cable television service, launched in August by Atlanta-based cable provider Cox Communications in all its markets.
How is it delivered?
CenturyLink Prism: Over CenturyLink's fiber-optic network
Cox Contour: Over Cox's cable network
Who has access?
CenturyLink Prism: Available to business and residential customers in about 1/3 of the Omaha metro area. Build-out will continue over the next two years.
Cox Contour: Available to residential customers across the Omaha metro area
There are dozens of possible prices given a user's needs, choice of Internet speed, how the products are bundled and whether the price is an introductory offer or for an existing customer.
We asked salespeople for price quotes based on common customer scenarios for new service, including hardware fees but not short-term introductory offers or discounts:
• Scenario A: Two televisions, bundled with Internet service
CenturyLink Prism Preferred (270 channels) on two TVs plus 20 Mbps Internet service: $113 plus tax per month
Cox Contour with Advanced TV Preferred (270 channels) on two TVs plus 25 Mbps Internet service: $132 a month plus tax
• Scenario B: Three televisions, bundled with Internet and phone service
CenturyLink Prism Preferred (270+ channels) on three TVs plus 40 Mbps Internet and home phone service with unlimited nationwide calling: $162 plus tax per month, or $182 for the same features but with 100 Mbps internet service
Cox Contour with Advanced TV Preferred (270+ channels) on three TVs plus Internet and phone: $182 per month (silver bundle), with 50 Mbps Internet and limited long distance; $201 per month (gold bundle) with 150 Mbps Internet and unlimited long distance
CenturyLink Prism: 1 wireless set-top box for each TV; plus 1 DVR/receiver; and 1 modem/wireless router
Cox Contour: 1 “client box” per TV; plus 1 whole-home DVR
Search and watch features
CenturyLink Prism: Pause and rewind live TV. On-screen weather, games, social media and apps. Channels change with no lag time. Watch up to four shows at once within a category, such as news, kids' programming or sports.
Cox Contour: Pause and rewind live TV. Channels change quickly but slower than with Prism. Watch up to six shows at once within a category, such as news, kids' programming or sports.
CenturyLink Prism: Watch and/or record up to four shows at once. Storage capacity of 113 HD hours or 284 standard definition hours
Cox Contour: Watch and/or record up to six shows at once. Storage capacity of 300 HD hours or 1,000 standard definition hours
CenturyLink Prism: Each user can program a list of favorite channels. Does not make recommendations or learn preferences.
Cox Contour: Each user can set up a profile with a list of favorite channels. Contour will recommend shows the user might like, and can learn a user's preferences when the user “likes” or “dislikes” a show.
CenturyLink Prism: Use the Prism on the Go app on a range of devices to watch 30 channels of live TV, apps such as HBO Go and on-demand shows.
Cox Contour: The Contour app is available on iPad and Android tablets. Users can watch more than 90 channels of live TV, along with on-demand shows and content from apps such as HBO Go.
CenturyLink: CenturyLink does not allow customers to subscribe to “explicit adult programming” through its Prism or DirecTV services. “CenturyLink was built on certain principles that we use to guide our business decisions,” the company said.
Cox: Cox allows explicit programming and says it offers a wide range of parental control functions that can be used to block or limit this programming. A user can set separate PINs for the purchase and the viewing of this content, and can block channels or shows by rating, title or content advisory type.