Random Comment On Cable Television: Time Warner Drops CBS

Updates

Later, 10:45 am CDT: Yahoo!Finance is reporting -- 

While studies have shown that nearly one third of households will consider cutting the cord this year, only one percent will actually do it. Even the CEO of Cablevision James Dolan says he rarely watches TV, but when he does, it's via Netflix  and over a broadband internet connection. In fact, Dolan goes as far as saying that the cable industry is living in a "bubble," and that he can envision a time when his company doesn't even offer TV service.

In some ways, that's the catch or the back-up plan for Time Warner Cable in this spat, in as much as cord-cutting typically involves ditching TV but leaves internet intact. So even if you leave Time Warner Cable - or whichever provider - there's a good chance you will still remain a customer.

On the content side of things, where costs perpetually rise but blockbusters are hit-or-miss, the worry is more about making good shows and covering big events than it is where to show them. Still, CBS points out that this is the first time in its history that it has been booted from a platform, whereas Time Warner Cable has had 50 such blackout disputes in the past five years alone.

Pretty much goes along with what I posted earlier.  In the past, networks like CBS "won" but this time it might be different.
 

Original Post

I'm sure you are all aware that Time Warner Cable has dropped CBS. Now this story from The Wall Street Journal:

Predicting that transmission of TV will move to the Internet eventually, Cablevision Systems Corp.  Chief Executive James Dolan says "there could come a day" when his company stops offering television service, making broadband its primary offering.

His comments may be the first public acknowledgment by a cable CEO of the possibility of such a shift, long speculated about by analysts. It comes amid growing tensions between cable operators and channel owners over rising programming costs, highlighted Friday night when Time Warner Cable Inc.  dropped CBS from its channel lineup in major markets such as New York and Los Angeles.

If cable operators drop TV service, charging only for broadband, channel owners would have to sell directly to the public or through Web outlets.

In a 90-minute interview on Friday, the usually media-shy 58-year-old executive also talked about his marriage, his relationship with his father Chuck and his after-hours role as a singer and songwriter. He said his rock band, JD & the Straight Shot, toured with the Eagles last month.

Mr. Dolan said that on the rare occasions he watches TV, it is often with his young children, who prefer to watch online video service Netflix, using Cablevision broadband.

This goes along with my view which I have discussed earlier.

I haven't had cable television for months and I don't miss it at all. I saw both the NASCAR race and Tiger Woods handily win at Firestone yesterday at the neighborhood sports bar; I used to walk there but now that I have my bikes, I bicycle there. For about $15 (drinks and a salad) it's a great bargain. Of course, the Texas Rangers - Oakland game was being televised, and the Rangers were ahead when I left. But I digress.

I don't miss CBS at all. Or NBC. Or ABC. There are a few other advantages to not having cable television, but perhaps that story another time. 

It will be interesting to watch the Time Warner - CBS feud play out. I think TWC has the upper hand:

• TWC customers may complain to TWC but they won't disconnect their service
• TWC customers may complain to TWC but they don't want CBS if it means their cable bill will go up
• Many TWC customers are probably paying at the upper end of what they feel they can afford
• Up to 47% of TWC customers may not be of the same political "bent" as CBS News, and have decided to boycott CBS (even before this latest spat); they won't miss CBS at all 
• TWC customers are probably spending more time "internet channels" (including social media like Facebook) than on the four major networks
• TWC customers have more than enough content without worrying about CBS
• CBS hit shows will go into syndication as soon as six months after first airing 
• Netflix movies, Blu-Ray movies, etc., air/play without commercial interruption

That last point is a huge deal. Customers pay twice: first to TWC for the cable package, and then again to have to sit through the commercials.

Steve Jobs once said that television and computers won't converge. Depending on the definition of "converge" he may be right; he may be wrong. His premise was that people turn on the computer to do exercise their brains; they turn on the television to rest their brains. The latter is still true. It is less true for the former, though when using a computer even for streaming television, there is a bit of interactive involvement (though minimal, in many cases).

I am watching the 22 episodes of "Twin Peaks" and, without commercial interruption, it is quite incredible. "Twin Peaks" by the way does not age. Nor does "Miami Vice." 

Senior Discounts: 50 Is The "New 65" -- An Ad For AARP Disguised As A News Story In The Wall Street Journal

The Wall Street Journal is reporting a number of senior discounts for people as young as 50.

Unfortunately, it appears to be an ad for AARP or an AARP press release. As others noted, most of the discounts can be had without an AARP membership. I personally find AARP annoying and would never join. Their relationship with health insurance companies turned me off many, many years ago, and their support of ObamaCare was not helpful. 

Another Reason Oceans Are Warming; Also, More Islands Rather Than Disappearing Islands: There's A Lot We Don't Know And Lot That Isn't Being Reported In The Mainstream Media

IceAgeNow is reporting:

Researchers at the University of Bergen (UiB) have found a 932-mile (1,500-km) volcanic mountain chain hidden off the coast of Svalbard, which could soon break the surface to form a new island chain. 

The range extends from Jan Mayen island in the Greenland Sea to the Fram Strait between Svalbard and Greenland.

“We have discovered five new vent fields in Norwegian national waters between Jan Mayen island and Loki’s Castle,” Rolf Birger Pedersen, the professor leading the research, told The Local. 

“The vent fields were discovered during a cruise with RV GO Sars in July this summer. The last volcano was found a few weeks ago and is just 20 meters below sea level, said Pedersen, professor at the Centre for Geobiology (UiB). 

“We have found volcanoes at such a shallow level and they could break the surface at any time and form a new island group,” said Pedersen.

Also:

Just for the record, I’ve been talking about underwater volcanoes for years. In fact, there’s an entire chapter in “Not by Fire but by Ice” (entitled “Fish Stew”) that discusses the importance of underwater volcanoes, and how they’re heating the seas.

And:

“Imagine how much heat is being put into the Arctic ice from prevailing currents,” says Peter. “How much might this be causing ocean warming in the area?”

TransCanada's Proposed Energy East Line

Reuters is reporting:

TransCanada Corp's plan to build one of the world's longest oil pipelines has reverberations far beyond Canadian shores.
The planned 2,700 mile pipeline, which will bring crude from Canada's energy capital of Alberta to refineries and ports on the East Coast, has the potential to upturn the dynamics of the North Atlantic oil trade squeezing out some imported crude to North America and revitalizing once-ailing refineries.

The Energy East line could also reinforce North Sea Brent crude as the world's oil benchmark against which giants such as Saudi Arabia price their western-bound exports, analysts say, while opening up the option of more Canadian heavy crude flowing to the U.S. Gulf Coast.

The scale of the $12 billion, 1.1-million barrel per day (bpd) pipeline, which will extend part of an old natural gas line, is hard to understate. Were it to start in London, it would stretch all the way to Tehran. In the United States, it could pump crude oil from Beverly Hills to New York City.

And its capacity is greater than the entire oil production of Azerbaijan, could provide 6 percent of daily U.S. oil consumption or, put another way, has the ability to carry 30 percent of Canada's total daily oil production.

"In the short and medium term, this isn't a project focused on exporting heavier Canadian oil to the U.S. Gulf Coast," said Mark Routt, a senior energy consultant at KBC in Houston, who has a number of clients interested in the project.

"The initial stage of this project will be primarily about sending light sweet crude to Canadian refineries."

That could effectively wipe out Canada's need to import crude for its eastern refineries. They now import around 700,000 bpd from North and West Africa and Latin America because Canada's own supplies lie across a vast wilderness in the far West.

Monday Morning Links, News, And Views -- Part I

Active rigs: 179

RBN Energy: a review of Canada's western CBR infrastructure --

The battle between pipeline and rail transport alternatives to get growing crude supplies out of Western Canada is heating up. On Thursday (August 1, 2013) TransCanada confirmed plans to proceed with repurposing their Mainline gas pipeline into the Energy East crude pipeline that will now carry up to 1.1 MMb/d from Alberta to Eastern Canadian refiners and the export market. A day earlier Kinder Morgan and Keyera announced plans to build a unit train loading terminal in Alberta to increase crude by rail capacity to the US. Today we review Canadian rail infrastructure investment plans.

Reuters provides more background to TransCanada's proposed eastern pipeline. This is a huge story. Will get a stand-alone post.Previously reported from a different source.

How many decades have folks been predicting the demise of the oil industry? The Economist does it again.

Oil is close to a peak. This is not the “peak oil” widely discussed several years ago, when several theorists, who have since gone strangely quiet, reckoned that supply would flatten and then fall. We believe that demand, not supply, could decline. In the rich world oil demand has already peaked: it has fallen since 2005. Even allowing for all those new drivers in Beijing and Delhi, two revolutions in technology will dampen the world’s thirst for the black stuff.

The first revolution was led by a Texan who has just died. George Mitchell championed “fracking” as a way to release huge supplies of “unconventional” gas from shale beds. This, along with vast new discoveries of conventional gas, has recently helped increase the world’s reserves from 50 to 200 years. In America, where thanks to Mr Mitchell shale gas already billows from the ground, liquefied or compressed gas is finding its way into the tanks of lorries, buses and local-delivery vehicles. Gas could also replace oil in ships, power stations, petrochemical plants and domestic and industrial heating systems, and thus displace a few million barrels of oil a day by 2020.

The other great change is in automotive technology. Rapid advances in engine and vehicle design also threaten oil’s dominance. Foremost is the efficiency of the internal-combustion engine itself. Petrol and diesel engines are becoming ever more frugal. The materials used to make cars are getting lighter and stronger. The growing popularity of electric and hybrid cars, as well as vehicles powered by natural gas or hydrogen fuel cells, will also have an effect on demand for oil. Analysts at Citi, a bank, calculate that if the fuel-efficiency of cars and trucks improves by an average of 2.5% a year it will be enough to constrain oil demand; they predict that a peak of less than 92m b/d will come in the next few years. Ricardo, a big automotive engineer, has come to a similar conclusion.

The author lives on a different planet than where I live.

However, it is getting more and more expensive to produce that oil. TulsaWorld is reporting:

That makes this new oil far more expensive to get out of the ground than what's known as conventional oil - large pools of oil and gas in relatively easy-to-drill locations. Those reserves have always been hard to find, but now they are all but gone outside of the Middle East.

David Vaucher, who tracks oil production operating costs at IHS CERA, says oilfield operation costs are now at a record high. "The fields are more remote and the resource conditions are more extreme," he says.

New oil projects in the U.S. and Canada, where production is growing faster than anywhere in the world, require high oil prices to be profitable, Vaucher says.

To make an industry average return, a new production project in the Canadian oil sands requires a price of $81 per barrel. For an onshore U.S. field, it's $70 per barrel, but it ranges from $45 to $95 per barrel, depending on the rate of oil flow. In the Gulf of Mexico, it's $63. In the Middle East, just $23 per barrel.
But major oil companies such as Exxon Mobil, Chevron, Royal Dutch Shell and BP were late to get into the U.S. shale oil game, and therefore had to pay high prices to acquire promising land. And the drilling is hugely expensive, too. Because the oil is thinly dispersed and hard to squeeze out, dozens of wells must be systematically drilled over an area to get to the oil.

Drillers are making technological leaps that are reducing some costs, but those are being countered by higher costs to lease equipment, buy supplies and pay workers.

Smaller oil companies like EOG Resources and Continental Resources that found these troves early were able to acquire the best acreage for relatively low prices. Because oil production is rising for these smaller companies, profits can rise even if costs increase. For a major oil company like Exxon or Shell, even big increases from dozens of wells in Texas or North Dakota aren't enough to make up for declining production in giant fields around the globe.