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Should Netflix be worried about the new $10 Rabbit TV Plus?

Should Netflix be worried about the new $10 Rabbit TV Plus?

Household budgets may be on the squeeze across the country but there’s one thing we just won’t compromise on: our TV. Until now, at least. Recent figures suggest the average US monthly pay-TV bill is set to hit $123 by 2015 and households are beginning to question what value they are receiving. This comes at a time when complaints are growing about so-called “channel bundling”, where customers are faced to pay for several channels they don’t want in order to watch the one they do.

Enter the likes of Netflix. For an extra $7.99 a month, or the price of a couple of Starbucks, it gives consumers access to in-demand TV streaming anywhere and everywhere. Job done, case closed, it looked like. Then in hopped a Rabbit TV and it made television even cheaper. Now it is threatening to go even further.

Rabbit TV was launched by FreeCast in February and subscribers have been multiplying like, well, rabbits. So much so, in fact, that the company now claims over two million paid annual subscribers. At just $10 a year, it’s easy to see the attraction of the service which claims to offer the world’s largest online library guide of freely available TV shows, movies and live events. So far, the service has been available from retailers in the form of a USB stick but rumours abound that the company is to release Rabbit TV 2.0 in a direct swipe at subscription services like Netflix.

Rabbit TV ‘Plus’ is set to give customers the ability to take Rabbit TV with them, wherever they go, with support for tablet and smartphones. A complimentary cable will also allow them to connect their device to their televisions to complete the all-round TV package. With many TV network apps only showing clips of programs, the ability to watch full-length shows through Rabbit TV could quickly set it apart from its competitors.

Having built such a large subscriber base in less than a year based on its computer-only model, this new version of Rabbit TV could well be a game changer. While it may only aggregate movies and TV shows that are already available on the web, its easy-to-use interface, low cost and ability to purchase add on services such as movies on demand could make it a bona fide contender.

Indeed, if the service reaches a critical mass of subscribers, it could see the big networks look again at their business models and question the value of their associations with the major cable TV suppliers and Netflix.

William Mobley, FreeCast CEO, was quoted recently as claiming: “Last year, a survey determined the average person would pay $12 a month for online-only access to HBO’s seven channels. We expect to accumulate an active audience of over 10 million subscribers in the next year – at $10+ monthly this quickly adds up to the same $100 million these providers make from over 50 million cable subscribers pulling $2 per month in licensing fees. It’s just a matter of time before the networks realize how much money they’re leaving on the table.”

If Mobley’s sums and assumptions are correct then maybe the humble Rabbit TV could take down some of the industry’s bigger players, or at least make them rethink their strategies. Either way, it could well be win-win for the US consumer.

Kevin Speedy

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