Broadband Cable Association of Pennsylvania


November 15, 2013

Comcast Corp. is planning to start selling films directly through its cable boxes, according to people with knowledge of its plans, a move that could boost the still nascent digital movie ownership market considered critical in Hollywood.

Comcast will offer newly released and older movies for sale as part of its cable service's video-on-demand menu, which now offers movies only for rental. Major film studios see electronic sales of movies as a potentially big business that could offset the huge declines in DVD sales over the past decade. Major studios have recently started regularly offering new movies for digital purchase two weeks before they are available on DVD, in an effort to encourage online sales. Currently, Verizon Communications Inc. -which has about five million video subscribers through its FiOS service-is the only other pay-TV company selling movies digitally, although Web outlets such as Apple Inc.'s iTunes and Inc. do so as well. Comcast, the No. 1 pay-TV provider by subscribers, has nearly 22 million video subscribers.

Comcast is expected to make the new service available to customers selecting its digital service, or about 20 million households. The cable operator's digital movie sales are expected to launch in a limited form by the end of the year. Dish Network Corp. is considering such a move but hasn't yet decided to go ahead, said a person with knowledge of its plans. Aside from being the biggest pay-TV provider, Comcast owns a big entertainment company, NBCUniversal, whose properties include Universal film studio, maker of movie series such as "Fast & Furious" and "Despicable Me."

Movies sold digitally are far more profitable for studios than rentals. Consumers typically pay about $5 to rent a movie through pay-TV on-demand, for one or two days of viewing, compared with the $15-$20 price for digital purchase. But the market remains relatively small. In the first nine months of the year, online movie and television show sales totaled $765 million in the U.S., according to the Digital Entertainment Group industry organization. That's up 49% from the same period a year ago, but still only 15% of the $5 billion DVD sales market.

Many in the industry consider the complexity of buying movies on a TV, which can currently be done only with Internet-connected devices like the Apple TV or videogame consoles, to have been a deterrent to market growth. The new Comcast service will allow subscribers to buy movies or TV episodes from prior seasons on their cable box or a website and store it in the "cloud," so they can watch it on a TV, tablet or computer. "We have been pushing them very hard to do this," a senior executive at one Hollywood studio said of Comcast's plans, which have been in development for more than a year. Once Comcast launches, the studio executive added, it's more likely that other large cable, satellite and telecom competitors will follow suit.

Comcast was ranked No. 1 in the $1.3 billion pay-television VOD market in 2012, according to the NPD Group, with 28% of the market. At least initially, Comcast's digital movie ownership service won't be integrated with UltraViolet, an entertainment and consumer technology industries initiative to allow people to store movies or TV shows they buy from different online retailers together in the cloud. But Comcast, which is part of the UltraViolet consortium, may integrate with it in the future, one of the knowledgeable people said. Wall Street Journal; more from Associated Press

Most of us have been there, struggling to explain some problem to an offshore customer service operator. It's an experience that so frustrated Laura Troiano that she switched airlines to a carrier whose call center employed easily understandable operators. Changing a flight is hassle enough without dealing with a communication issue, she said. "I don't want to talk to someone I have trouble understanding what they are saying," said Troiano, a sales representative who was eating lunch Wednesday afternoon at Wegmans Cafe in Allentown.

Sen. Bob Casey, D-Pa., is pushing a fix for frustrated consumers like Troiano in the form of legislation that would penalize companies that send customer service jobs offshore, require them to disclose the location of their call centers and offer U.S. customers the right to transfer to a domestic call center. "I'm all for it," said Diana Hagenauer, of Schnecksville, who also was eating at the cafe. The problems have become so common in her dealings with customer call centers, Hagenauer said, she's now pleasantly surprised when she's able to quickly resolve a problem over the phone. "One time I called the Bon-Ton and got someone who was very capable of understanding my problem and helped resolve it," she said, adding that it made her more likely to shop at the regional retailer.

The legislation being championed by Casey would prevent companies that send call center jobs overseas from receiving federal grants or loans by putting them on a "bad actor list." It would also give companies that keep such jobs in the United States preference for government contracts. Casey was joined at a news conference on the legislation Wednesday by two House lawmakers, one Democrat and one Republican. The House version of the bill has 42 cosponsors, but a version introduced during the last session of Congress in late 2011 had 138. Casey is so far the lone sponsor of the Senate bill. Legislation typically needs 219 votes in the House and 51 in the Senate for passage.

With Congress not producing many laws of late, it's hard for any legislation to get traction. But Casey said if members in both parties are looking for ways to work together to create jobs, stopping work from being outsourced overseas is a good opportunity for bipartisanship. Customer service is big business. According to a report by global market research firm IBISWorld, call centers will employ 475,275 U.S. workers this year at an average salary of $23,609. The $18.1 billion industry generates domestic profits of $960.3 million and annual wages of $11.2 billion. "Companies in this industry commonly outsource contracts to low labor-cost countries like India in order to offer lower prices to clients," according to the report. "While this practice may have a positive impact on industry profit margins by decreasing wage costs, the negative affect on U.S. employment overrides potential benefits."

That trend has been slowed a bit by Federal Communications Commission investments in broadband that are designed to lower the cost of operating domestic call centers, the report said. Many companies split their call-taking operations, sending basic calls overseas and directing complex calls to U.S. call centers. Most companies' decisions to use offshore customer service call centers are based on the cost difference, said call center industry expert Chris Hastings, president of PowerHouse Consulting in Bedford, N.H. Companies in certain industries such as high-end retail and health care have resisted the trend. "A lot of times when they take a hard look at it and do the math, they realize the potential cost savings are not as great as they thought they would be, or they come along with a number of issues and risks the company does not want to bear," he said. Those risks include drops in customer satisfaction, a loss of control and security concerns, he said. That has slowed the pace of off-shoring in recent years, Hastings said, but hasn't resulted in any major movement to bring back call centers that were sent overseas.

About 15,500 Pennsylvanians were employed at telephone call centers in Pennsylvania in 2012, according to the state Department of Labor and Industry. That's down from 16,958 a decade ago. In 2010, the most recent year for which figures are available, the Lehigh Valley was home to 1,691 call center jobs. The Communications Workers of America, a national union that supports the legislation, says those numbers are too low. It says there are about 183,620 call center workers in Pennsylvania and 4 million nationally. The union uses a broader job definition that includes employees working in a wide variety of industries taking phone calls.

CWA gave Casey $10,350 in 2012 for his re-election campaign, and spent $700,000 in lobbying that year and $175,000 so far this year, according to The Lehigh Valley region has seen two major call center layoffs since 2010, meaning the number of local jobs is probably significantly lower today. In 2011, Wells Fargo laid off 193 Bethlehem-based call center workers, saying more customers were paying their auto loans on time, reducing the need for collections operators. T-Mobile closed its Hanover Township, Lehigh County, call center in 2012, costing 600 workers their jobs. The move was part of a plan to consolidate centers. Centers in Florida, Texas, Colorado, Kansas and Oregon also were closed. The company maintained the jobs weren't replaced with overseas jobs, but the U.S. Department of Labor ruled that the job losses were related to off-shoring.

Casey noted the closure as a reason the legislation was long overdue. "When you consider the devastation that's brought to bear on a community because they uproot and take virtually the entire company overseas there should be some, in my judgment, some penalty, some sanction even as we're trying to provide incentives, positive suggestions or nudges to companies," Casey said. "This isn't asking too much of our system to have this kind of accountability." Allentown Morning Call

Haverford Township's (Delaware Co.) Cable TV/Public Access Corporation board of directors hopes to make the township's Cable channel more effective for residents, Commissioner and Cable TV Committee chairman Dan Siegel said at a recent meeting. The channel, aired on Comcast 10 and Verizon 38, presently shows re-runs of commissioner meetings, announcements and schedules. A new You Tube channel also provides videotapes of meetings, Siegel noted. However, "We think the role of the Cable channel should be to keep residents informed beyond this. It can do a lot more," said Siegel.

The Cable TV board recommends expanding the channel's horizons to include public service videos, conversations with police/fire chiefs and township administrators, video tours, demonstrations, and meetings involving other important boards and committees, such as the Planning Commission, Siegel said. Also recommended is re-instatement of the "crawl," a scrolling text that provides 24-hour news and announcements. Due to changes in contracts, "We no longer have the software and service," Siegel said. He asked his fellow commissioners to consider budgeting $2,500 for purchase of necessary software.

The Cable board also suggests recruiting students and other volunteers to assist, and keep the recently redesigned township Website up to date, Siegel said. Videotapes should be made available on demand if possible. Presently serving on the Cable TV board are Jason Bullock, Bennett Lazar, Michael Muderick, Robert Mulhern, Jr, and Jay Scheinfield. Havertown (Delaware Co.) News

State Sen. LeAnna Washington (D., Philadelphia) posted this eyebrow-raising tweet earlier today about a shredding event she's sponsoring this weekend: @Sen_Washington 5h Have sensitive documents that you want to destroy safely? Come out to Crestmont Park from 9 a.m. - Noon on 11/16! FREE! Washington, for those who may have missed the stories, had her Philadelphia-area legislative offices searched last month by agents with the state Attorney General's Office. The agents were looking for any evidence of campaign activity. Washington has said only that she is cooperating with the investigation. But one has to wonder whether it's a good idea, public relations-wise, to be holding such an event, let alone beckoning the public to destroy "sensitive documents." A spokeswoman for the senator could not immediately be reached for comment.