The Coming Golden Age of Television

Over the last 10 years, since the advent of digital cable and satellite, we have seen ratings for top TV shows
decline. Ratings for top 10 shows today, wouldnt have cracked the top 20 ratings back in the 1980s and early
1990s. Call it the longtail affect. More choices allow people to be more selective in their viewing, hence
lower ratings for the top shows.

The satellite and cable companies have been brilliant in leveraging new technology to create more value and lock
in their customers. They have used technology to offer more and more channels. The services offered by each
have continued to expand, as has the profitability that comes withoffering, telephony, High Speed Data, Video
on Demand, Subscription Music Services and more.

Technology marches on. BusinessWeek proclaimed this week “The End of
TV (As you know it).”
My perception of the article is that they wanted to drive home the point that
technology is expanding how viewers receive content and the number of content choices will result in ongoing decline
in audience sizes. The drop could, in turn could destablize the TV business as we know it.

I think they are wrong. They are leaving out two key technological issues that will completely change the
dynamics of TV, but for the better….for those that recognize what is happening.

First, as i have written in the past, I think its great news for any TV network
that Bob Iger broke the links to the past and opened
new revenue streams by selling hot shows while they are hot
. People want content, where and when they want
it. Its found money that will just improve the ability of networks to invest in content. I also
think these revenue streams will end up being driven by out of home, mobile devices rather than being downloaded for
viewing at home.

Thats not to say that downloading of content being offered today wont be watched from media center PCs, laptops,
Ipods, PVRs and other devices when connected to TVs. They will. Because today, DVD quality, or anything close
is good enough for 90 pct of homes.

That will change. Quickly. Very quickly.

Some simpleobservationsto consider:

HDTV pricing is falling like a rock. You can go to Best Buy and get a 27″ HDTV for under 400 dollars. Those
prices will continue to fall. Within the next 2 years, analog TV will have gone the way of black and white. It will
become unusual to see them in stores in all but tiny sizes.

HDTV viewers love HD quality. The more HD you watch, the more important HD quality becomes to you. HDTV viewers
arent accepting by programming type. Once a viewer goes HD, he/she wants all programming in HD.

Now some may question this. I have heard it many times that DVD quality is “good enough”. Back in 1998, VHS
quality was good enough. Its not good enough now. Would you accept VHS quality on the DVD of a movie you just
bought ? Of course not. Nor will you accept DVD quality in a few years when you have expectations of HD 1080i
quality for the shows you watch or buy.

HDTV viewers watch more TV. The increases are in HD channels, with decreases in standard definition viewing.

Now some may say this is no big deal. That all the cable and satellite networks out there will just naturally
migrate to High Definition.

Those same people may say the same thing about video on demand. That the content will just migrate to HD. No
big deal. Insteading of downloading DVD quality video, the content will be upgraded to HD quality and we will
download HD quality.

Thats not going to happen and here is why.

Of all the advances in technology that will occur over the next 5 years in hard drives, CPUs, HDTVs,
PDAs and other mobile technology, the one area that we will see the least amount of improvement is in bandwidth to
the home.

Over the past 5 years, bandwidth to the home has grown from 300k for broadband to 5mbs, and in some cases even
10mbs. But that bandwidth is not dedicated per user. That bandwidth is shared. The number of users
sharing that bandwidth has increased even faster than the size of the pipe. Thats not going to change. Sure we will
see optimizing efforts from network providers, but the average bandwidth available to the home isnt going to change.
In fact, there is every chance it will decrease because the number of homes, the number of users per home, and the
number of tuners in PVRs that are recording simultaneously will increase.

So what does this have to do with HDTV and the future of television ?

Simply put, using all the compression tools and best codecs available today, the amount of bandwidth
required to transmit an HDTV show vs the amount of bandwidth required to transmit a DVD quality show is about 8mbs to
1mbs. Thats for download and doesnt take into account shows that require more bandwidth, like sports and
movies.

For broadcast, again, using compression, it takes 2 to 3mbs to transmit a standard definition show, and
10mbs to transmit an HDTV, non sports program at quality that is equal to what is available from over the air HDTV
broadcasters like CBS and NBC.

Which leads to point. Bandwidth to the home is not expanding as fast as the bandwidth required to transmit
content. So something has got to give.

Satellite companies have recognized their expanded need for bandwidth and have purchased launched multiple
satellites.

Cable companies are doing everything they can to improve bandwidth. Going to IP driven, switched networks.
Using statistical multiplexing techniques. All provide help,but not enough to solve the problem. Plus,
they have another HUGE problem.

Basic cable TV networks, USA, TNT, TBS, CNN, all the networks that have full penetration and reach 95pct plus of
cable homes are carried through your cable provider on analog channels. This means they use 6mhz each. 6mhz is the
equivalent of about 38mbs. Thats a lot of bandwidth.

Now common sense might say, why not just switch them to digital and send them using 3mbs for standard definition
and 10mbs for High Definition. Well the problem is that not all homes have digital cable, which means thatif
the networks were willing to give up their 6mhz of spectrum, they wouldnt be able to reach the 50 plus percent of
cable users that dont get digital. Which means that its not going to happen anytime soon. In fact, in response to
this problem, some cable systems are trying to go “pseudo digital” , but thats going to take years and years to
rollout.

So in a nutshell, at the very point in time when a rapidly growing number of consumers are going to be expecting
programming at the highest possible High Definition bitrate, there isnt enough bandwidth to deliver it.

THats unbelievably good news for the cable and satellite companies and for cable networks like ESPN, HDNet, TNT
and Discovery that have invested in high definition.

As i said earlier, consumers are going to expect more and more High Definition programming. They will be buying
10s of millions of High Definition sets over the next couple years and the more HD content, they get, the more they
will want.

Cable and satellite companies are going to have to compete in a high def world. People with high def
sets are going to buy their video content fromproviders who provide the most high def content. Having the 5 or
so broadcast networks that only broadcast in HD 70pct of primetime, plus 2 or 3 cable networks in HD is not going to
be enough.

So why wouldnt every cable network just switch to broadcasting in High Definition ? For3 reasons;
cost, licensing problems and because a lot of their content is worthless in high definition.

It costs millions of dollars to build or convert a network to High Definition. Given that you can count the number
of independently owned networks on one hand, that means that all the major media companies have multiple
networks that they have to convert.If theyown a news network.. The cost is enormous. Thats a sunk
cost that cant be recaptured.

What makes a program worthless in High Definition ? If it was shot or mastered on tape.Shows fromthe
1980s, 1990s, and even some shows today, are shot using standard definition tape. Other shows and movies were shot
using film, (which is high resolution and can be nicely converted to HD), but were edited and had special effects
added using tape as the master format. Why is it worthless ? Because standard definition video doesnt have
enough resolution to look good inhigh definition. To up convert it to HD would be like upconvertingmusic
frommono to 5.1Surround Sound. You can fake it and improve it a little, but when compared to music
captured in Surround Sound or even stereo, its obviously inferior.

If you go through the schedules of many cable networks, some are made up completely or substantially of shows shot
or mastered on tape. The networks that are full of music videos from the past 20 years. Networks with comedies from
the 1980s and 90s. Science Fiction created for syndicated TV (Most primetime scifi was shot on Film and then
HD). THere is nothing their owners or licensors can do to make them look good in HD. I dont
think they will even try. Which in turn means we are going to see some of those cable networks that are dependent on
these shows just disappear.

Then there is the cost of converting shows that can look good in HDinto High Definition quality. There are
two ways to convert programs that were not created in High Definition into high definition content.

The cheapest is called upconverting. Quick and easy, a standard defintion master tape of a show is
just run through some software which tries to create pixels and resolution that are not there through and render out
a higher resolution version . The problem is that it looks like crap once its converted. The only reason
is still exists is that some current networks that are broadcasting in High Definition dont feel the need to spend
the money to do it right. Probably because they dont think the audience size is big enough. Personally, I
think they are killing their brand equity with HD viewers. The difference in quality is obvious.The recurring
comment I hear is “whats wrong with XYZ show on XYZ network it doesnt look near as good as HDNet” So for that reason,
I hope they continue upconverting content although they are making a huge mistake doing so.

The more expensive option is for shows that are shot on film, to go back to the master elements, clean them
upand telecine themto high definition. From there they can be touched up even further to look really
good. Unfortunately its not cheap. The cost can start at 20k for a movie and go up from there. The good news is that
this is happening more and more because some smarter content companies are preparing for converting to HD and because
they realize the same HD version can be used as a master to sell a DVD today, and an HD version of that DVD in the
near future.

But not all the networks can afford to pay the cost to convert. If they licensed 100 eps of a single show that was
shot on film, at 10k per hour minimum, thats 1mm dollars for a single show ! Mutliply that by all the shows and all
the episodes involved , and it can turn into millions of dollars per network.

Then there are the licensing problems. A lot of programs were licensed as part of long term deals before High
Definition was even contemplated. In some cases the High Def rights were split apart from the standard definition
rights. Which means that some networks either have to go back and procure the HD rights, or they cant get them at
all.

Add all of this up and it creates a very unique dynamic in the TV world. There are some networks where it doesnt
make any sense for them to even try to go High Def. Whether its cost, licensing issues or lack of HD quality, its
just not going to happen. Which in turn is going to lead to a CONTRACTION in the number of total TV channels in the
HD universe.

Then you have the issue of available bandwidth on cable and satellite providers. Because HD versions of
networks take 4x to 5x as much bandwidth as their standard definition counterparts, even with full compression,
there isnt enough bandwidth available for all the networks that feel like they can and have to go High Def.
Which will result inany of three outcomes

1. There will be a standard definition ghetto created on cable and satellite. Just as talk radio and niche
stations are now on the AM radio dial, there will be an analogous area where networks that cant or wont go HD can
reside. Of course the bad news is that with just a few exceptions, these networks will be considered 2nd class
networks and the rates they receive and can charge advertisers will be far less than their HD counterparts

2. Cable networks will trade the bandwidth being consumed by “cant go HD” networks and/or analog carriage for
bandwidth for their biggest networks who got to the HD party late.

3. Five or so years from now, those networks who didnt think HD was important will find themselves on the outside
looking in, realizing that there isnt enough bandwidth and they will have to pay for carriage.

There are going to be fewer networks being broadcast in the future. Not more. That should lead to ratings
expansion, not contraction as some would have you believe.

But wait, there’s more. In an HD universe, not only will there be fewer channels to compete with
in the lnng term, but because the adoption of HD will happen faster than most people realize, the ratings for those
networks that do broadcast in HD will EXPLODE in the next two to three years. The next few years will still have
alimited number of HD channels available to viewers while conversion and bandwidth issues are worked out. Which
means in HD households, rather than a 150 channel universe, there may only be a 30 channel HD universe. Thats a
goldmine for those networks in HD.

Not only that, but the HD universe has several advantages for advertisers over the standard def world, which of
course is money in the bank for networks and their distributors.

First is that 99 pct of the PVR/Tivo devices already installed in homes that go HD, dont support HD programming.
Which means no skipping commercials in HD programming until they upgrade.

More importantly, with more resolution, a wide screen and 5.1 audio, advertisers have a bigger and better pallete
to work with and get creative with. Which just might enable commercials we like to watch for a while.

Then there is the competition from the internet that is supposed to make things so difficult for tv networks.

Unfortunately for the internet, offering high definition downloads isnt cost efficient. Its down right expensive.
And its god awful slow.Sure, companies like Redswoosh.net will provide
better bandwidth solutions, and we have tested it at HDNet. But its still going to take 10gbs to deliver a movie, and
its going to take over night downloading todeliver that movie on 99 pct of home connections. And its not going
to get any better for a long long time. Which in turn makes downloading High Def content a very small internet
business. Which in turn means that all the prognosticators who think that internet download to the home will replace
the rental business and rival cable or satellite are just plain wrong.

In fact, I think that smart rental companies like Hollywood Entertainment and Netflix will embrace HD on
DVD. Whether its for the Xbox 360 or PS3 which will both be inexpensive HD playback devices, or on future
HD DVD and Blu Ray Devices, rentals for HD content will bring people back to the stores because of higher buy to own
prices of the disks.

So when you add it up.

Consumers are going HD. HDTV will replace analog tv as surely as DVDs replaced VCRs. Those consumers will demand
HD programming. The distributor that can provide it, will get their business. That competition will push networks to
go HD, but for a variety of reasons, not all can or will, which means there will be fewer networks competing for
viewers and some of those networks will be “AM band”, reducing the competition for viewers and advertisers even
more.

HD technology will also bring more viewers to watch programming on HDTVs because its so new and different. Which
in turn will bring advertisers and will extend the life of the 30 second commercial.

The impact of the internet on inhome viewing will diminish until bandwidth to the home can increase by the same 4x
or 5x that HD programming bandwidth increased. I dont see that happening for a long time.

And I didnt even get into the demand creation for HD programming that HD gaming and its devicessupport
ofplayback ofHD content will have

We are entering the Golden Age of Television.
Television like you have never seen it before, and of which you will want more more
more

64 thoughts on “The Coming Golden Age of Television

  1. good

    Comment by imdbcn -

  2. For many other kinds of shows (think “American Chopper”), the broadcast time might be in the middle of the night. But no one cares because you’re recording it to view later anyway.

    Comment by runescape money -

  3. it’s a novelty, the way color was in the 60s, when you would watch anything to see it in color. That didn’t last too long; content again became key. Getting to see Hoss Cartwright in color got boring after a while.

    Comment by wow powerleveling -

  4. You are making a great sales pitch for Satellite HDTV…the likes of DirecTV and EchoStar’s DishNetwork. Both companies have embraced the ka band satellite delivery system and have launched ka band satellites to handle the load. I predict we will see an explosion of satellite TV customers during the next three years.

    Comment by Randy Scott -

  5. Mark,
    You don’t mention anything about Broadband over powerlines. Could this technology solve the bandwidth to the home problem?

    Comment by Rob Dhont -

  6. I agree with everything you say except the DVR part. Right now if you ask for HD from a cable company you are first offered a DVR and only as an alternative offered a standard STB. I think the same will be true shortly of Dish and DirecTV once they get beyong the MPEG-4 transition and the absurd idea that an HD DVR has to cost 5x an SD DVR.

    Comment by Brian Hoyt -

  7. here is a huge, untapped HD audience.

    A couple of my coworkers got HD tvs and digital cable connections. The better pictures led them to believe that they were watching HD. Both were disappointed that the “HD” wasn’t that much better. It took me a long time, with an annoying lack of appreciation on their part, to convince them that they did not have HD and that they needed to get HD receivers, subscriptions, etc.

    Despite my assurances that real HD would be a lot better, none were interested in going any further. One of the people involved has a brother who is a tv repairman, and a good one, but he was somewhat negative, probably because he thought he might have to fix the thing for free all the time.

    I think this is a widespread problem. How many people can really understand all the equipment required and then make sense of the subsequent manuals, cables, inputs, outputs and 12 optional ways to do everything? And then properly work 2 or 5 remotes? Damn near impossible for most people.

    Now, if early-adopter types have problems understanding, installing and operating HD equipment, what about old people? There are millions of them with more on the way. Many have money and do tend to watch a lot of tv, often more than they should. Big screens, sharp pictures and clear sound is more than a luxury to them.

    My parents enjoy watching my HD HT, but they would never consider owning and operating it anymore than I would consider operating the space shuttle. To them, it is impossibly difficult and even if someone set up the system, the whole issue of actually using it, dealing with modes and menus is something they would never consider. So, they have their old square tvs and fuzzy bad cable. What they do have is a simple remote where you punch in the channel and it appears and then maybe you set the volume.

    Content providers, like HDnet, are missing out on this audience of millions, a big percentage of the population with huge financial assets, because many of them are afraid of the equipment! And it is not just old people. Many younger potential customers are equally apprehensive about the difficulty of using this technology.

    I saw one of those kitchen appliance shows on tv, where a sweaty sales guy was getting way too excited about this refrigerator that had a computer screen on the door that would tell you how many eggs were left, how old the milk was and so on. It would, I believe, either order new supplies from the on-line market or call you on your cell phone to warn you. Something like that.

    I would disconnect that sucker the first time it ordered up some milk or bothered me in any way. Also, it does not do this automatically. Somebody has to punch in info every time the inventory changes. Can you imagine gramps doing that? No, because he would never buy that pos in the first place. Now, what if every refrigerator from every company had that feature set? Likely gramps would keep his old one. But, the sales guy would say, this is high tech, the way of the future. Gramps would counter that plugging it in and having everything work perfectly, quietly, economically for 20 years in an environmentally correct way-that is high tech.

    If content providers want to maximize their business, they had better use their influence to make sure that the equipment suppliers offer systems that people will actually buy and use so that they can view their programs. And equipment suppliers: what in the …. are you doing trying to sell a few systems to people on these forums when you should be mass marketing this stuff and you cannot do that until you make your products more universally useable. Am I missing something?

    Comment by Carlgo -

  8. All media, whether it is the Net or HDTV is ruled by the same thing…

    Content is king.

    I don’t spend a lot of time watching TV because there is not a lot worth watching. It does not matter how good it looks; if it is crap, it is crap. Audiences will dwindle until the content improves. Any surge from the introduction of a newer, better technology will only be a blip on a graph, unless there is sufficient quality content to maintain interest.

    I love new technologies and HDTV is awesome; but without anything worth watching, it might as well be an old black and white; so what is the point of buying one if it just sits there as a piece of furniture 99% of the time.

    To the guy who doesn’t watch TV because he can’t afford to spend $400: Kelly, you need to fill your head with some better content. I suggest you read Mark’s motivation posts. Your choice to be poor is a stupid choice. Don’t blame it on others if you have chosen to be unable to buy a TV.

    Comment by Leslie Fieger -

  9. I have been looking through your site and i think it is amazing. There is plenty of great information. Keep up the good work.

    Comment by mark scott -

  10. Mark, would you discuss the Mavs and HD on your blog. Why not show the Mavs on HDNET like Ted Turner with the Hawks and Braves to get TBS up and running? It is hard to find the HD feed on Direct TV when it is supposed to be there and hard to find the info to know if the game is on in HD. And, the Mavs are spectacular in HD! It’s almost like being at the game – oops, maybe that’s a reason not to do it.
    Anyway, with your commitment to HD, it would interesting to know your thoughts about why/why not have more HD Mavs coverage.

    Comment by Keith -

  11. Comcast will never have a HD bandwidth shortage. For one simple reason – Greed over Quality. Take what Comcast is currently doing with their 100’s of standard definition stations that they are sending over the cable — they are compressing the hell (technical term) out of each channel. Watching TV through ComCrap oh I mean Comcast is like watching a mosaic painting anytime there’s motion within the program thanks to all the mpeg artifacts. I think a FisherPrice $50 video camera has better resolution. COME on my 20 year old VHS tapes look better than what Comcast is broadcasting. The ONLY way that I can get a decent clear signal is to use the Comcast HD box and watch the HD channels on my standard def Sony TV that does not even had HD support. So Comcast is either trying to make HD look that much better or when all the stations want to start broadcasting in HD they will start to compress the hell out of the late comers.

    How can we get Comcast to stop compressing to the point that content motion with trees, water, fire, sports or basically anything that moves will be acceptable?

    Yeah and buying that new Blu-Ray DVD from Sony will still be using that crappy MPEG2 encoding. So much for having pristine video from my next gen DVD players.

    We must demand QUALITY over QUANTITY or broadcasters will forever try to maximize their profits to the detrimental visual quality that they deliver to the viewer..

    Comment by steve sherman -

  12. I think you’re right but I hope you’re wrong about ip delivery of movies/television content. I hope that bandwidth costs fall as speeds get faster and faster, eventually resulting in a fat pipe allowing me to watch what I want, when I want through the internet. This may just be wishful thinking, though…

    Comment by Preston Wily -

  13. I am a studio insider who is watching a bunch of execs scratching their heads while their customers download all their content on their favorite P2P service.

    I totally agree that today’s audience demands more choices and control than ever before.

    Attention media companies: if don’t have a plan to deliver great content to consumers when they want it and where they want by next year then you might as well roll over and play dead.

    Digital Video Distribution: The war has begun

    So goes a rant on my blog…http://8000x.com/?p=19

    Comment by Pete Mauro -

  14. It’s unfortunate you miss the fact that it may be HD IPTV delivery itself that is the catalyst for more widespread 20Mbs+ consumer broadband deployment in the US.

    It is precisely this demand for HD IPTV that will drive increases in broadband speeds, primarily through deeper fiber deployment. You view the bandwidth to the home as a zero-sum game, when in reality it will be consumer demand for HD that forces providers to upgrade.

    You also should not assume that the existing cable model (i.e. I pay Comcast $40 a month and Comcast pays ESPN $2 a month, CNN $x a month etc.) is going to be the prevalent model in 5-10 years.

    Otherwise, an excellent opus! More comments here….

    http://www.nyquistcapital.com/2005/11/28/standard-definition-tv-am-radio/

    Comment by Andrew Schmitt -

  15. Not HD Programming getting more in focus, HDTV sets let have HD such a big impact. Marc already mentioned it in his article, it`s pretty much a fact of how expensive a HDTV set vs. standard tv really is and on the most important side how long standard tv sets exist.

    I guess Marc as Mavericks and HDNet Owner more thinks on the business side and if you follow his article I think you can read that he means that high resolution displays will build up a Consumer group for HD Programming, if standard tv sets and analog tv won`t exist anymore.

    A word to Microsoft`s WMV HD Codec known as WMV 9 in the past: For me this codec doesn`t reflect HD in any kind. The codec is lose in contrast and could never come close to a real OTA Stream or DVHS Tape. It´s pretty much a codec for HD over Internet things like Marc already does with HD.net. Don`t understand me wrong, for HD over Internet it`s for the moment the strongest codec, cause Microsoft has with the Windows Media Player more people involved over Windows OS, against other MPEG-4 Codecs.

    More HD content will roll out when there will be only HD sets, because if a HD set is set for standard the majority will try HD, even those people which used analog tv til the end.

    How about the VOD Service on HD.net. Will there new content soon?

    Comment by Christian -

  16. I love television, but I can’t watch it anymore. I listen to television and look up occasionally while I surf the web…

    The achiles-heel of telivision is that it moves too slowly and in a defined way. Television has become “the idea starter”. You watch Friends, see Jennifer Anniston’s hairstyle and you wonder who cut her hair. You go to the internet and search for her stylist. That distraction multiplied over millions of households is not going to stop from happening because her hair is more radiant, or because I might get to see that cute little birthmark on her neck that the make-up artist didn’t quite cover.

    Television is going the way of the shopping mall. My wife, an avid shopper now routinely goes to the mall and boutiques for ideas and to try sizes. She buys at the mall too, but when she wants to re-order an item or send gifts, she does so online.

    IMO the die has been cast. Television will always have it’s place in the home but the internet’s interactive nature will ultimately pull attention away from all TV regardless of broadcast quality.

    If image quality actually had the ability to change people’s viewing habits, the internet would have never gotten this far. Netscape 1 offered very little esthetic appeal after-all and here we are today.

    Final thought: Producing programs that highlight the virtues of HDTV is expensive. It would be interesting to hear your take on what increased production costs from explosions and car chases does to the business model.

    Comment by Frank Schilling -

  17. This may seem naive, but I worked in Marketing at a cable provider in CA and I don’t see the traditional cable providers around in the future. The inefficiency (marketing, engineering, etc.) is rediculous and their lack of foresight will require drastic changes to their infrastructure to create more bandwidth.

    I pay $50 for cable and $7.5 for the HD box, and all I get are the same crappy network channels I get with my built-in HD reciever. If I pay $20 more a month, I get a bunch of low-quality analog channels and a whopping 3 additional HD’s. Speaking for myself, I’d prefer 10 HD channels to 100 SDs. If CNBC was OTA, I wouldn’t even have cable. Wake up and smell the coffee . People want quality, not quantity. Once the rest of the public wakes up from their technological slumber, they will realize what they want, MORE HD. Kudos to the pioneers who had the foresight to adopt the technology early , producing and distributing the content. The satellite providers look like they have the edge but it will be interesting to see how it pans out. One thing is for sure, the consumer is king and the industry will change on our schedule.

    Comment by Dave -

  18. I am all for HDTV and when one of mine breaks, I’m sure my next one will be an HDTV but I am very confused why Congress seems to be involved in the mandate – seems like something is astray somewhere…

    Comment by Terminal-D -

  19. Mark,
    I replied to your comments in my blog. http://cbick.blogspot.com

    I agree. Once you watch a show in HD you want everything in HD. I’ve got a 60 inch rear projection HDTV and the sports that are broadcasted in HD are unreal.

    What I don’t agree with is your bandwidth argument. Streaming in HD would take up a ton of bandwidth so you would need to buffer a lot in beginning, but still doable. Downloading HD video would also take a ton of bandwidth, but using peer-2-peer technologies like Peer Impact.(www.peerimpact.com) it will max out your downstream while reducing costs. Not sure about everyone else but my ISP(road runner) keeps increasing my downstream bandwidth all the time. I’m up to 5mbs. Yes it’s shared bandwidth but most people still only use a small percentage of their bandwidth so I haven’t seen any slow downs. I do agree that when demand increases for digital content on the Internet ISPs are going to have problems. In the end I think downloading files to a PC is a great way to give people flexibility with their content. From a PC you can stream your videos to your TV,(http://www.dlink.com/products/?pid=438&sec=1) you can transfer it to a PMC so you can watch them on the go, you can watch them on a plane with your laptop, you can burn them to a DVD so you can watch it on your TV or any other DVD device, and you can just watch it on your PC. I think that covers every place where you would want to watch “TV”

    Comment by Chris Bick(bickster) -

  20. Just responding to a few notes — and I freely admit to my personal and professional HD bias.

    First off, I strongly disagree with the assertion by Matthew (post #41) that HD quality is only marginally better than analog. I’ve brought over 100 people to see this TV, including my wife who couldn’t care less about tech stuff, and it consistently blows away everyone. I was a huge skeptic and really only got it because I work in television, and it has completely changed my programming focus. But that’s your opinion and you are certainly entitled to it.

    However, there is one thing that everyone’s forgetting, and it goes to Rowdy’s post #43, wondering if HD is the new Quadrophenia. The difference here is that HD isn’t a choice, it’s the law. The FCC is mandating the conversion. So while someone could choose quadrophonic just like they could choose betamax over vhs, in a few years every TV is going to be HD. That bell will never be unrung.

    I also disagree about the McMansion stuff — the whole point with HD and plasmas is that they take up less room and have much better quality. By the way I also have a 14-inch HD set with $169 speakers in my toddler’s room and it’s great.

    As Mark noted, costs are coming down dramatically. The analogy is those huge SONY WEGA TV’s. When they first hit the market in the late 90s they were $2500, an absurdly high price for analog tv. And they weighed 300 pounds. But people so many of ’em that now they cost $400 new and you can’t give ’em away on Craigslist. Over time the price for HD will be right for everyone – and this time is coming sooner than we all think.

    Finally, I totall agree with MIPO about network stuff not shot on HD. Same point as I made in my original post — it’s totally ludicrous to shoot any content on beta or DV if you hope to show it in 5 years. In the past it was too expensive, and the HD cameras were unweildly and broke a lot. But now there’s no excuse.

    I think that when it comes to reality, the networks havent bought in to HD because they don’t believe anyone will ever want to watch repeats of Joe Millionaire and Survivor. And to a certain extent they’re correct; reality generally doesn’t rate very well in repeats. But OLN is doing great with Survivor reruns, and GSN has Amazing Race so there you go. And our series, Gastineau Girls, rates very well in repeats on E.

    I see this all as part of a larger problem. The TV business today is like the record business in the late 90s. We’re sacrificing long term profits and catalogs for the quick hit, watercooler series that only runs once. No one cares about monetizing a series over time, or figuring out other ways to deliver content (and make money from it). Same goes for the movie business, putting all their eggs into one basket and spending a fortune promoting a movie that will make or break itself on opening weekend.

    I mean, I can’t think of another business in the world that runs on this hit-and-miss model. Ludicrous.

    Comment by matthew apfel -

  21. I think you should go back and re-think whether HD vs analog viewing matters to the millions viewing QVC, FoodTV, talk shows, reality TV… in a lot of cases, the video isn’t all that great to begin with. You chose the right thing to move to HD (movies), because that’s going to be where the production quality is consistently high enough that people will want HD, but I think you drastically overestimate the desire to view in HD. In fact, I do most of my TV viewing as filtered through a TiVo recording on “low” quality. What drives my interest in TV is getting a better selection, having all programming be completely on demand, and not having to sit through tampon ads. I’m not against commercials; I’d just rather see 2-3 for stuff that interests me than 15 for crap I’ll never buy. I keep hoping google will somehow take over TV.

    Comment by MattW -

  22. I wonder if HD is not, to some extent, the new Quadrophenia. It is true that current HD switchers are blown away. I don’t have HD and don’t really want it. The one time I saw it, the baseball players looked so butt-ugly and sweaty, I was sorry I watched it. Maybe I saw some unusually ugly athletes. I wish I could purge the image of Rick Reed laboring on the mound at Safeco from my head.

    I wonder. Aren’t the HD nuts today similar to the Quad people of the 70s or the stereo-surround-Dolby-home-theater people of the 90s? I think VHS quality is good enough for a lot of people. I don’t think the current HD junkies are typical or representative of the whole population.

    Also note that a lot of people, even if they could afford a monster HD TV, would not want one in their home. You have to live in a McMansion with an extra Great Room for something like that to make sense. The vast bulk of the housing stock in the US lacks a second room that’s large enough to host an HD TV without become A Total Shrine to Television. And people don’t want that.

    I think TV will do just fine over the next few years, but I am not buying the argument that everyone will demand all-HD content any time soon.

    Comment by Rowdy Brown -

  23. Matt,

    its interesting that you work in reality programming. I’m kind of a reality junkie & it has always frustrated the hell out of me that the major networks don’t shoot the major shows in HD. I mean can you imagine the scenic landscapes of Survivor in HD? Or the Techtonic plate that is Trumps hair in 1080i?

    I’m of the firm opinion that any new primetime shows on network TV need to automatically be shot in HD. This just seems like such an easy way to shore up their erroding ratings, by tailoring to the small but growing segment of people affluent enough to own a HD set. They have the money to do it and take the lead & they need to use this advantage to take a major step up in the ratings wars against cable.

    Comment by MIPO -

  24. You’re wrong Mark.

    First off, saying that analog TVs will be “rare” in 2 years is nothing short of absurd. It will be 10 years before digital dominates, that’s the best case scenario.

    Second, the DVD comparison doesn’t work. The vaste majority of people didn’t embrace DVD because they were blown away by quality, they embraced it because they didn’t have to carry around clunky video tapes and have to rewind and fast-forward. They had already had this advantage with their music for years, and wanted that same advantage with DVDs. Quality had very little to do with it.

    My brother has HD quality and it is nothing special. Really marginally better than analog. I’ll get it when it becomes standard, but I’m not going to rush out and overspend on a TV (or overspend on the channels) for something that has a slightly better picture. DVD is, in fact, “good enough.”

    Comment by Matthew -

  25. Mark,

    I am living both sides of this equation – as consumer and creator. Last fall I finally got off my ass and installed plasmas with HD at home. I didn’t even know there was a separate area of high def channels, and spent 3 days wondering why this HD stuff looked so grainy. Then I finally discovered the small array of HD (‘700 level’ is the term we philly guys lovingly use) and it literally brought tears to my eyes. For the first time in 10 years I watched an entire Monday Night Football game until the end (about 1AM east). It was a lousy game with 2 mediocre teams, i cant even remember who was playing, but i watched every minute.

    Now I rarely watch anything else; prefer Law & Order reruns on TNTHD (upconverted), Nature shows on Discovery HD, and any movie or NBA game I can get on INHD or HDNet. Mark is 100% correct on this front – once people get HD they will watch any HD content they can. It’s just that much better.

    At the same time, I run the development group for a large reality television production company. I create shows for many different networks and am constantly frustrated when cable nets cheap up and wont let us shoot in HD. Why spend money on content when you wont even be able to show it in 5 years? I never understand this, it’s so pennywise and pound foolish.

    I can tell you this: my entire development slate now focuses on formats to go to HD DVDs, shorter formats for mobile phones (cant download anything over 5 mins, as Mark noted), and other ways to deliver content because there’s truly going to be a squeeze. And it’s going to come sooner than everyone thinks.

    Have to admit, Mark is a true visionary here, the question is whether the HD networks can survive long enough and raise enough cash to buy real HD content. I think they can.

    Comment by matthew apfel -

  26. Not to provide a shameless plug but to further the point about the old shows. http://www.MartinBroadcasting.com to watch free 24-7 internet tv…movies, Bonanza etc…

    Comment by Greg Martin -

  27. Mark your comments about bandwidth can easilly be solved by cacheing if you buffer the programing via a set top box or PC for 5-10 mins with p2p you can get the video quality you want .

    Heres a blog post from Chris Bick the Director of Reasarch and Development at Wurld Media, the company that last week announced a deal with NBC\Univerasal to distribute Video on Demand over Peer to Peer on thier Peer Impact Metwork .

    “Live 8

    Great cause and a great line up of artists! Check out the web page and sign the live 8 list.

    Let’s talk about the technology that is behind the “live” stream. Here are the specs for the stream:

    Bit rate: 460kbps
    Video size: 320 x 240
    Aspect Ratio: 4:3
    Audio Codec: Windows Media Audio 9.1
    64 kbps, 44 kHz, stereo 1-pass CBR
    Video Codec: Windows Media Video 9
    Frame per sec: 29
    Protcol: RTSP (UDP)

    To put how small the screen size is for this broadcast into perspective let’s measure the screen. The screen is about 3 3/4 inches by 2 3/4 inches wide which is equivalent to a 4 inch TV screen. Imagine if you had to watch TV at home on a 4 inch TV in the year 2005. For years broadcasts have been streaming live events over the Internet and having to settle for low quality video and audio. Listeners have also had to settle with dropped frames and constant buffering to keep up with the broadcast. The bandwidth requirements to support a stream that has thousands of simultaneous users, and the bandwidth requirements to support a high quality video stream are astronomical. Even if you could pay the bandwidth bill the infrastructure it would take to provide such a great user experience would be huge. You would need a boat load of streaming servers and a pipe the size of Texas to deliver the stream. So the question I ask is, “How live does a stream have to be? If a streamed was delayed by 5 minutes, 10 minutes, an hour would it be any different then a “live stream” like live 8? Just a delay of 5 minutes and Peer Impact could deliver a high quality and maybe even HD(High Definition) quality stream right to your desktop or TV. Let’s use some new specs that are equivalent to a DVD quality stream:

    Audience: 2201.02 Kbps
    Audio codec: Windows Media Audio 9.1 Professional
    Audio format: 192 kbps, 44 kHz, 2 channel 24 bit VBR
    Video codec: Windows Media Video 9
    Video bit rate: 2000 Kbps
    Video size: 640 x 480
    Frame rate: 29.97 fps

    Let’s use my 5 Mbps Road Runner connection at home as an example to see how this would work. If I could max out my connection for 5 minutes I could download a file that was 187 MB. That’s about 12 minutes of audio and video at the above quality. So for every 5 minutes of the stream that was downloaded I would gain 7 minutes of “buffer” time. Using the Peer Impact network a quality stream like the one above could be delivered to thousands of listeners. This is possible because the transport technology in Peer Impact re-shares chunks of the stream as each user receives them.

    The question still remains – Would this be worth the 5 minute delay? I believe so. Just think; no more tiny screens, no more frames dropping, and no more buffering(thank god). In today’s *world* people want quality. I don’t think watching a stream that is behind the live event by 5 minutes would decrease the experience or the thrill of a live event. I heard a quote the other day from our fearless CEO Greg Kerber that I thought was right on. He said, “Tap water is free, but everyone is buying bottle water.” (I think this quote also applies to most P2P applications as well, but that’s a whole other discussion) Once again, people want quality and the quality that people are getting today is extremely low compared to what is possible in the year 2005.

    Thoughts?”

    Source http://cbick.blogspot.com/

    Comment by Matt -

  28. Mark,
    Thanx for your excellent post. As a recent HD television purchaser I want to validate just about everything you’ve said. Once you’ve gone HD you just don’t want to go back. With very few exceptions (SCI FI Channel, FX and USA network) I refuse to watch any programs that aren’t in HD. Also, thanx for you demistifying some of the bandwidth issues on the Cable vs. Sat. I think if Verizon is smart, (and I’m not sure that they are), they’ll use the FIOS (fiber to the home) service to pop out lots of HD programming..

    Comment by Mark Homewood -

  29. Hi Mark,

    Did you consider the effect of a “hybrid” TV. A TV that shows HDTV as full screen HDTV and scales down the size of the picture for “converted on the fly” analog shows? That way you could watch both types of shows on the same HDTV.

    What’s more, this means that older shows don’t need to be converted to HD. The big networks will produce all new shows in HD. The number of networks then going all HDTV will be much more..?

    It doesn’t seem like too much effort to build “hybridness” into a TV..

    For the record, I used to be a product manager for a digital image processing company. I didn’t work on TVs, but hey, maybe I could be right about TVs as well?

    Warm regards,
    Arun
    Arun Consulting (link: http://www.arunconsulting.com)

    Comment by Arun Sadhashivan -

  30. I agree. I think there will be fewer channels and that audiences will be larger and ads more profitable. But I’m not so sure about the second rate analogue networks you talk about.
    If they don’t price themselves out of the market they could carry the interactivity for video. The example of Gopher greed caving to the www is an interesting example of what might happen to networks which don’t make the transition.

    Comment by FisherKingKQJ -

  31. Here here, Another Tim!

    Q (to anyone): How many HiDef Audio CDs do you own? My personal theory is that video will go the same way as audio. CDs had the same advantages over Tapes that DVDs had over VHS – random access, easier storage – ease of use.

    Where did audio go after the CD? Not HiDef, but to MP3s. Why? Because you can have every song you’ve ever owned on an iPod. People *liked* the extra fidelity of CDs, but they *loved* the overall ease of use (no FF, RW…). MP3s are far more portable then CDs, and yet they “sound like shit” in comparison. Do you really think video will be much different?

    I can already see the MP3-i-zation of video happening. It’s not going onto the Video-iPod (yet) but I’m able to keep up with “Lost” even though my friendly local television network in Australia decides to treat their viewers with contempt (will we ever see West Wing again down here?). HD is nice, but what will fill the gap are DVD/Network video players that can up-sample DVDs *well enough*. I have a number of friends with HD sets with decent DVD players that have 0 reason to upgrade their DVD collections. Couple that with the pending HD-DVD -vs- BluRay fight and HD discs will make about as many waves as HD-Audio has (i.e.: none).

    Comment by Campbeln -

  32. I’m still waiting for HDTV prices to drop before I take the plunge. I’ve been checking prices at Wal-Mart, Sears, and Best Buy, but I still think they’re way too high. Something funny about Wal-Mart is that they don’t even list what kind of HDTV inputs are on a 52″ TV. Who would spend $1,000 on a TV without even knowing what kind of HDTV inputs it has?

    Comment by plastic surgery satire -

  33. I’ve had an HDTV for 2 years and a Comcast HD DVR for 1 year. All I can contribute is my personal expereince.

    I don’t watch commercials. I don’t watch analog shows. I don’t watch standard def anything. Only high def. I don’t even watch DVD’s anymore. I tape HBHD and Starz HD. I may start DVD’s again with PS3 and HD DVD – even though I am sorely tempted by the Xbox360 VGA out and the VGA input on my Samsung DLP😉

    Mark left out one key point. Once you go HD…you can’t go back. Not only becuase HD looks good, But also because standard def looks like hairy ass on an HDTV, even with digital cable.

    So Viva la HDTV. Mark, please don’t do the Dell.Intel thing with HDnet. I have been patiently waiting for HDnet on Comcast. Just get the deal done already…sheesh…

    Comment by me -

  34. “Back in 1998, VHS quality was good enough. Its not good enough now.”

    I think this is way off. I think it is good enough for most people. The technology companies tend to forget that most of us don’t have the ideal media center setup. We have a TV, maybe it’s HD-capable. We have a low priced DVD player, probably cheap connection cables, improperly calibrated TV’s, shoddy cable outlets. I don’t know about the rest of you, but I rarely get a great picture on my television(I have digital cable). Some channels are better than others, sometimes they’re kind of fuzzy. I don’t have Tivo, or a PVR, I record shows old-school-like by setting the timer on my VCR. The playback quality is even worse than the normal cable broadcast, but it doesn’t really matter, I just want to keep up with latest episodes. I appreciate DVDs having higher quality images, but that’s not why I buy them. They cost about the same as movies used to cost on video, except they have all kinds of extras, deleted scenes, director’s commentary, and I can buy an entire season of a TV show without having to find a place to keep the 40 Tape VHS Collector’s set. Plus you don’t have to rewind DVD’s. It’s not always about the quality. In fact, many movies on DVD look like shit, poor transfers and everything. We still buy them, though, because we like the movies, and we want to watch good stuff over and over.

    I think people would watch a black and white channel if it had good shows. Granted, many shows from the 50’s might not translate well to today’s young audience, but it’s not because of the lack of colour. How many times a day do they still show I Love Lucy reruns? It’s a great show. I grew up in the 80’s watching stuff like The Adams Family, The Munsters, The Dick Van Dyke Show, The Andy Griffith Show. People wanna see good stories, entertaining shows/movies. And most of us won’t pay significantly more to get a handful of really good looking channels that don’t show anything we want to watch.

    Comment by Another Tim -

  35. Another boon to HD advertisers buying ad time right now might be the demographic of “people who adopt HD early” may tend to have more disposable income or be pre-disposed toward buying the latest new gadgets, cars, foods, etc.

    Comment by Tim -

  36. First of all, monkeyinabox, wait ’til you start seeing us on HD-DVD =):

    http://sosohot.com/Staremagazine_Meets_SoSoHot_Promo.wmv

    Coming soon, trust me.

    Back to the issue at hand:

    I’m not accustomed to Mr. Cuban engaging us so directly. This is actually kinda cool, Mark.

    Personally, I think the issue is, as has already been said, “fewer choices in premium quality” versus “almost limitless choices in average quality”. What are FUTURE consumers of entertainment most likely to do?

    Let us not forget, we’re talking about the same generation who trades MPEG-1 files of movies recorded in a dark theater on a camcorder; the same generation who DOESN’T complain about tiny screen sizes; the same generation who define media as a combination of TV, websites, text messaging, video games, etc., as opposed to the original MTV generation’s more simplistic “TV & Radio” definition of media.

    They are certainly accustomed to sharper images and sounds, but they aren’t slaves to it.

    A personal anecdote: I never saw an HDTV image until about 18 months ago, when Circuit City pushed the HD revolution with its strong ad campaign. When I finally saw a demo, I was like, “Is that it?”

    Don’t get me wrong. Of course it’s a much, much better image – obviously. But I guess the hype was SO over-the-top, I was expecting the coming of the Messiah or something. Didn’t happen.

    HD content must rule before HD technology rules.

    Comment by Charles -

  37. “The arguments against are the same that were against spreadsheets (my paper and pen work fine, why spend 5grand to do the same thing).”

    Oh come on, DVD quality Versus HDTV is nothing like spreadsheets Vs Pen & Paper.

    HDTV is good and all but there’s nothing wrong with DVD quality. If the option is between on demand DVD and scheduled HDTV, who wins?

    I remember hearing you talk about how people would want to go to the movies because watching it as home isn’t as good….i’d like to see an independant survey prove that. Consumers demand things to fit their schedule, to be where they want, when they want and in a format they want; if consumers want HDTV on demand enough, they’ll get it.

    HDTV is a nice bonus, but if it comes down to it, On-Demand is what people want. And it’s not like DVD quality is terrible.

    Comment by Adam -

  38. So what do you think is going to be the standard resolution format when HD does become more prominent in the market place. Are broadcasters going to be using 720p, 1080i or 1080p? I do have to say HD does make a huge difference in viewing. I got my father to buy a HD set for their home and my mother, who never cares about audio or video quality, even says she enjoys watching programs that are broadcast in HD. She says it does not strain her eyes much when watching a program. (The fact that it’s a 65″ screen probably helps too) I also own an HD set and when I have friends over on Sundays to watch football, they always comment on how hard it is to watch football at home on their own set after seeing it on my tv. I do wish though that there were more HD channels. I am punished even more because Comcast doesn’t carry HDnet which really sucks. I think you should work on that Mark. Especially since I live in Denver where one of your offices is located! Bottom line is I will never buy another TV that is not HD capable.

    Comment by Jerod Button -

  39. Mark:

    As we saw at CompuServe over the years, technical capability/capacity and the uses of those capabilities/capacities ratcheted steadily upward over the years. When everyone was timesharing via line oriented text user interfaces on monochrome monitors (and teletypes!!), 300bps modems were sufficient. When higher speed modems appeared (especially 9600bps), some said “wow, we’ll be able to print out those long reports to the local printer a lot faster now.” But others said, you know, I think we can transmit color graphics and whole files with that much bandwidth. The same kind of thing happened when broadband came into the home. At first, it just seemed like a faster way to do old things the old way. But there was always something waiting in the wings that just needed the greater capacity. Music sharing became the killer app.

    On demand HDTV over the internet is one of those applications we all see coming down the road, but only because we’ve seen primitive video over the internet already, and now want a more variety and more quality. Consumers see the internet as a vehicle to get whatever they want whenever they want, and are impatient for the world’s video archive to be put online (sounds a little like Audionet, huh?)

    Meanwhile, I think television could turn into a subscription medium. You don’t just watch “Desperate Housewives,” you subscribe to it. With that subscription, you purchase the right and ability to download and record the current episode when it is broadcast. It doesn’t matter when you watch it, although the really hot shows will be broadcast during “prime time” so that its audience gets a chance to see it at the same time as all their friends (don’t want to be the last one to see a really juicy episode).

    For many other kinds of shows (think “American Chopper”), the broadcast time might be in the middle of the night. But no one cares because you’re recording it to view later anyway.

    The key is that the show is distributed via a one-to-many broadcast technology, either directly from satellite or from a local terrestrial station. I don’t know enough about the comparative economics of the two, but suspect that satellite distribution is much cheaper, although the customer-end equipment is more expensive.

    My satellite TV service, DISH, broadcasts something like 150 channels all the time. That means that in one day, they could broadcast 3,600 unique one hour programs. In a week, it would be 25,200 unique one hour programs. Right now, a lot of those slots are filled up with informercials and junk. Why not instead fill them with subscription feeds?

    It could be very democratic. Create a website with a library of all the possible programs. At any given time, viewers could submit bids for the programs they want to see broadcast. Since each hour represents 150 hours of broadcast capacity (using the DISH network as an example), at say 30 mins prior to the top of the hour, the top 150 vote getters would be retrieved and queued up, and at the top of the hour, they would get broadcast. Any show not making the top 150 that hour would be in the running for the auction in the following hour. There might be a show that takes a month to collect enough bids to make it to the top 150. That’s okay too.

    Maybe you pay for every bid, or maybe you get 100 bids/month for your monthly subscription. Maybe you can only record a show you bid on, or maybe you can record any show that gets broadcast as long as you pay your monthly subscription.

    What’s the money trail? Boy, lots of possibilities here. One is that the broadcaster (satellite company), pulls off a slice of every subscription for their trouble, and then the show producers get paid directly based on the proportion of total downloads their show gets every month. The producers are free to bury ad spots and product placement in their feed if they want to try to make a little extra money. Viewers can decide whether the show is good enough to put up with this stuff.

    Let’s preserve the wires for time-critical and narrowly focused telecommunications, at least until the wire-based technology gains a couple of orders of magnitude of price/performance. We can push ‘television’ to satellites if we’re willing to experiment with radically different revenue models.

    PL

    Comment by Paul Lambert -

  40. The concept that “its the quality that matters” is all relataive. How well does a channel in all black and white do ?

    And of course, everyone always says that the shows that are in HD are always not what they want. even the most popular shows , SD or HD, arent watched by 80 plus pct of the population. So no show is ever quite good enough to the vast majority.

    The reality however is that our expectations will change as we HDTV becomes ubiquitous. And it will.

    The arguments against are the same that were against spreadsheets (my paper and pen work fine, why spend 5grand to do the same thing).

    Streaming…remember bill gates on letterman..i can listen to radio on the net.. .like i can on my 5 dollar transitor radio..

    And of course all the powerful AM music stations of the 1960s who thought they were the end all be all and that FM would never have an impact.

    until it did.

    Comment by mark cuban -

  41. From a sheer technical standpoint, I’ll have to bow to your knowledge. However, let’s remember that a lot — and I mean a LOT — of would-be users won’t have access. I’m one of them; my digital cable system has (at current) 12-15 Hi-Def channels, not including the local stations’ digital signals. Satellite? Not at my apartment (we tried). And that’s going to limit things by a bunch. I’m not buying in until there is a good variety.

    And for now, it’s a novelty, the way color was in the 60s, when you would watch anything to see it in color. That didn’t last too long; content again became key. Getting to see Hoss Cartwright in color got boring after a while. And when hi-def becomes the norm, what will people gravitate to? Programming. People still watch old movies in black and white because they’re good. People will still watch your “ghetto” non hi-def channels if their programming is good.

    My wife, who is about your age or younger, loves to watch the 1950s “What’s My Line” shows on GSN. She wasn’t born when they ran and has to ask me who the Mystery Guests are half the time, but she likes the show. It’s low-def, B&W and with less movement than the Pet Rock Channel.

    Technology will get people into the tent, but programming is king. I don’t think people will even want to watch the Mavs unless they’re winning, even if you can see every pore on your face on the sidelines.

    (And with all that, 99 percent of today’s programming on my 100 plus channels and On Demand bites the big one.)

    Comment by Ray Barrington -

  42. Good synopsis of the current situation.

    Do you think if congress passes the bill to subsidize those without DTV:
    http://www.washingtontimes.com/national/20051114-015137-2162r.htm

    could change the current bandwith issue on analog SD? If everyone were Digital ready, couldn’t it all be switched?

    And I’m not sure if the xbox 360 will have an HD drive. It isn’t currently shipping with one. If Sony gets blu-ray on the PS3 right, maybe they’ll be motivated, but until then…

    And yes, Windows Media can do HD. But you must have the correct “Media Center Edition” version to stream it to xbox360. That, coupled with the fact you must get the HD content on the pc, you’re starting to get away from the mainstream consumer. (People who can do that, can already do it without xbox360.)

    Comment by Home Theater Dude -

  43. Once you go to HD you won’t go back to analog, especially with shows on HDnet like Bikini Destinations.🙂 Seriously, there is not one show on there (except perhaps Hogans Heroes) that even interests me.

    Sure I prefer superior quality whenever I can get it, but just because it’s HD doesn’t make it superior. You can still package up crap nicely, but that doesn’t stop it from being crap.

    I’m not thrilled at the idea of having to replace hardware and media with every ‘must have’ upgrade that comes along. Even DVDs are not the standard yet. You can still buy VHS movies and rent them, and the day that changes, I’ll declare VHS dead. Are B/W TVs dead? I still have a portable one that works, and I can hook it up to cable just fine. Seems like it’s not as dead as say, Betamax or 8-Track tapes.

    But, you nailed it on the head. This stuff will change, but not for a VERY long time.

    Comment by monkeyinabox -

  44. Today, on HDNet movies, you can watch classic gems like Cool World, Tap, Road House, and then Tap again! In case you’ve forgotten, Tap is about a gifted tap dancer, after serving time in prison for committing robbery, and he must choose between “a life of crime or life on the dance floor”. I swear that’s what it says, “a life of crime, or a life on the dance floor”. And unlike Glitter or Honey, which featured Mariah and Jessica eye-candy, Tap’s got a 150 year old Sammy Davis Jr as the eye candy, which is sure to capture that valuable 18-24 year old demographic…

    300 Channels with good shows vs. 30 channels of high definition crap…The choice doesn’t seem dificult. Especially when the 30 channels of HDCrap costs more.

    Of course HDTV will become the norm eventually, but I’m gonna keep watching Comedy Central, TNT, classic TV shows like Cosby, Cheers, Seinfeld, All in the Family for quite awhile before I pay extra to see a really swell looking digital transfer of Road House.

    Comment by Tim -

  45. Mr. C

    One very very important miss in your calculations.

    Cable broadband plants can deliver bits using multicast. For any content expected to be watched by a large audience (say, network programming) a single copy goes out to everyone, and that copy can then easily be cached. DSL has no such advantage.

    So to say “we’re running out of bandwidth” ignores the MASSIVE available pipe already sitting in your local cable modem loop.

    Comment by Dave Nadig -

  46. Mark, that was a very interesting discussion- especially from a marketing perspective. Just when we thought the 30 second tv spot was gasping its last breaths as a medium to reach the masses…

    Comment by Sean -

  47. I like to look at both sides of the spectrum. Thanks Mark for your insight, and this great forum. The topics are not the same old stuff like on the Networks.

    http://www.motortoyshop.com

    Comment by Sam Martin -

  48. It is my understanding that not only will Xbox 360 support WMV HD, it will also support MS DVR files, so a user with a media center PC that has an ATSC tuner will be able to stream this off-air HD content to an Xbox in another zone. Something previously not possible. Of course, no HDNet, Discover HD or ESPN HD.

    Comment by Brian Paper -

  49. Mr. Cuban

    I’m sure that a $400 TV does not mean much to a millionaire like you, but that is way too much for me to justify. I have been working all my life at barely minimum wage and after being out of work for 18 months, I have no savings, no retirement, not medical benefits and am struggling to get by. So a $400 TV seems way out of line.

    While I do not begrudge you and your competitors developing and marketing HDTV and all the technology outlined in in your most recent post, what I do hate is that in the next few years, I will not be able to watch TV at all.

    My current TV will not receive digital or HDTV and I will be out of luck because of the FCC rulings that all TVs have to digital before long. My TV works perfectly fine and records on VHS just fine as well.

    So when you start counting households who are watching your company’s product, you can count me out. I’ll just go back to listening to the radio. At least for now it is still free.

    Have a great day. And remember, TVs, HDTV and your described technologies are all only luxuries; they are not necessities.

    Comment by Kelly -

  50. To those commenters who think they caught me in an error when i said the XBox 360 plays HD content.

    it does. It supports Windows Media Video in High Def. thats full high def and pretty much the same codec that will be compatible the HD DVD and BR.

    There is already content in WMV/HD and there will be more

    Comment by mark cuban -

  51. Mark, we formed an internet tv network back in July 2005. It started as a 2 hour chess match between the Soviet Union and The USA. We have since grown to a 24 hour operation with 40 affiliate stations nationwide and worldwide.
    We are now about to deploy Video on Demand and our content rivals many broadcast stations including several thousand movies and the old classics like Dragnet, Bonanza, Lucy, Andy Griffith etc.. We have the technology to allow the viewer to watch our network free on the net and soon via satellite (still working on HD) and we also can allow them to rent shows and or movies from us and deliver them direct to their desktop anytime they want them. The consumer can schedule them up to 1 year in advance. No bandwidth issues and no long wait. Yes, we do have the patents.
    Keep up the good work! Go Mavs!!!!!

    Comment by Greg Martin -

  52. Roger G kinda “stole my thunder” with “Compelling analog shows will still win out over lame HDTV shows.”

    So true. So-called “quality” isn’t necessarily the key in this game. Dare I say, in many instances, it’s quasi-irrelevant. Talk radio, local news and pornography are perhaps some of the more glaring examples of the irrelevance of “hi-res”.

    More importantly, if we end up with a handful of HD networks attempting to force-feed consumers with the only easy access to HD content, the choices will obviously be just as paltry as what we get from traditional SD networks. And this new generation of consumers will never accept scintillant choices in content; the Internet has spoiled them far too much for that.

    Also consider that a lot of “major broadcast network” content tehnically “looks better” and “sounds better” than what we see on cable, but so much of it is far less interesting and very often, less successful.

    Comment by Charles -

  53. Mark,

    I agree that HD programming wil eventually overtake our viewing all though I do believe it will take 10+ years. I own & love my HDTV but was always scepticle that if would become totally mainstream one day until I first brought ours home & my wife went “Wow! I can really see a difference.”

    The diffence b/n HDTV & many of the so called progressions of TV in the past 20 years is that anyone other than a Techgeek couldn’t really see a difference worth paying for.

    Now, like the switch from tape to CD, VHS to DVD, the conversion to a high resolution digital format is an eye popping difference.

    I agree completely that the lack of HDTV channels is annoying. I only get about 6 & not even ABC or CBS thanks to my rural location & our quaint little stations who refure to change till they’re forced to. (Watching the Superbowl on Analog TV is gonna piss me off big time!)I guarantee that I would rather have 35 -50 channels of HDTV than 300 channels of Standard TV that I don’t watch anyway.

    Also one last note for anyone rushing out to get an XBOX 360 on Tue, Mark wasn’t correct in his original post, they do not had HD-DVD or Blu-Ray. They are planning on adding this capability later (I sure once the format wars have been settled, plus upgrades =$$$)

    PS. Mark, great win over my Pistons tonight. Really a statement win for your organization, by outing “D’ing” the masters of D.

    Comment by MIPO -

  54. Mark,
    You made some interesting points. in reference to “broadband” limitations.. I think you need to remember the new “telecom” cable entries into the market.
    In reference to people wanting just HD programming.. you made some really good points. However, I think On-demand is CURRENTLY changing alot of things. for example.. If I “love watching old.. ‘the jeffersons'” reruns.. that impacts my time on network tv.. thus hurting their revenue.. my point is.. HD or No HD.. its all about the content. and Content will rule…
    I’ll give you another example..
    I have a 16 month old son. we RARELY watch “normal” tv with him.. Its only ON DEMAND shows… Shrek2, Sharktale, Teletubbies, Bob the builder… we basically live on the ON DEMAND stations.. that being said.. we do watch 1 network show everyweek…. (gilmore girls).. but thats pretty much it. Oh.. yeah.. watch football and Fox Soccer Channel too.

    Comment by Mike Verinder -

  55. Compelling analog shows will still win out over lame HDTV shows.

    How many of you recall being mesmerized for hours by the crude satellite video coming from Iraq during Gulf War II? World’s poorest video, yet I couldn’t stop watching.

    Perhaps HDTV will just hasten the demise of the 95% dreck on current TV.

    Comment by Roger G -

  56. I don’t want to watch “cracked” (AKA “Stolen”) shows like a previous poster, but I do think that the portable media playing devices, like the Ipod 5th generation, create a secondary market for “downconverted” content. I believe we’ll all want to watch HD at home, and 320 x 240 on the go.

    Comment by Tim -

  57. What I took away from your post is that VOD HD doesnt work, and so HD capable distribution will be king. Does that mean you think the traditional movie rental distribution systems (aka Blockbuster) still have a future?

    Comment by E P -

  58. Predicting that bandwidth will not increase rapidly is a perilous call to make. While I don’t have a crystal ball either, I will go out on a limb and predict that bandwidth will increase as fast, if not faster, than other innovations. Technologies that we know about, such as fiber and wireless, could have a great impact. And there may be many cleaver yet-to-be released technologies that could blow out bandwidths.

    What is easy to predict is that consumer behavior will change slowly. For example, when I bought a Tivo in 2000 (and stopped watching commercials), I swore that at least 50% of the population would have one in 18 months. Almost six years later, Tivo market share is still in single digits and overall PVR share is not a heck of a lot higher. Consequently, I also believe that it is premature to say that the DVD is soon-to-be dead. That is, unless “soon” means 10 to 12 years. What is missing from most Internet VOD implementations is that the content is not provided in a form that is consumable by most people. My guesstimate is that the number of people that have Internet-enabled their TVs is less than 1%, even though the technology to do so is readily-available and not too expensive. And for feature-length movies, few people are willing to huddle the family around their PC monitors.

    The other factor holding back legitimate and usable Internet movie delivery is Hollywood. In a desperate bid to protect existing business models, they are likely to continue chasing the DRM pipe dream. What most of these people don’t realize is that in order to survive, they will have to learn how to compete with free. Any solution that uses DRM is worse than free (if the DRM does anything, that is). Sometimes these solutons are much worse than free. That is why I believe DRM is an opiate that could eventually kill the patient.

    Comment by Jim Flynn -

  59. Maybe it’s just me, but VHS quality is still good enough for me for most of what I watch. My buddy at work regularly brings in his video iPod with newly cracked shows like the Office and Curb Your Enthusiasm. We watch it on the tv in the lunch room. The quality is shiat, but I’m blind to it once I start “watching” the show. They’re just as funny whether I can see Larry David’s nose hairs or not.

    Sports and concerts, though. High def? High definitely. Those kind of events are more “experience” based. Maybe action movies too. And, oh yeah, porn. Sweet delicious porn.

    Comment by Henry Kuo -

  60. “Of all the advances in technology that will occur over the next 5 years in hard drives, CPUs, HDTVs, PDAs and other mobile technology, the one area that we will see the least amount of improvement is in bandwidth to the home.”

    I’d consider this statement to be wrong, bandwidth to the home pretty much follows Moore’s law (of course there are exceptions).

    I’m sure by now someone will mention Sweden, but really that’s a rare exception in bandwidth rules (due to the government incentives and early adoption by main telco providers).

    But you’ll also see FIOS by Verizon coming out, slowly but surely Verizon is bringing fiber to major cities. Other providers and cable services are repidly reploying fiber to the home as we speak (SBC/etc). So to say that bandwidth will lag behind is a false statement when you can find companies making major investments.

    I normally find your tech views to be inline with most industry projections but this one and a previous one about VOD movies not outselling cinema sales seem very one sided, I know you have an interest in it, but, it seems to contradict previous statements about technology.

    Comment by Adam -

  61. Geez, post number #1 must not have a high def TV… I swear, I find myself watching things I never would before, solely based on the HD quality. And I am not alone in this phenomenon. The quality is seriously unbelievable. Monday night football has never been the same, haha. Do you think, once the internet subscriptions reach a certain market saturation, then bandwith will start increasing again?

    Comment by russ dahlberg -

  62. Jumping off this topic, and combining it with one of your earlier posts about Movie Theaters, I’m wondering when Movies and TV shows are going to be available to by right after you watch them. Today it might look really bulky – example, having a small DVD store where the arcade usually is in a movie theater that lets you put in your order for the film you just loved and mails it to you when it comes in (allows for impulse buying). But, maybe in the future, you text the order from your cell phone. Perhaps at the end of LOST, a number comes up on the screen. If you want to own the show you just saw, you text it in, and they send it to your TV, where it is stored. Maybe they give you a discounted price if you buy it with commericials. Or perhaps, they let you put your order in for the whole season.

    just some thoughts –

    James Edward Dillard

    jedwarddillard.blogspot.com

    Comment by James Edward Dillard -

  63. Great post, Mark. I have been thinking about these technological advances for a few months now. It seems the direction we’re heading is ultimate viewer control. I believe running TV series will continue to release weekly episodes, but through subscription offerings instead of time-based programming blocks. All that will need to be done is for the viewer to order OnDemand exactly the show and episode s/he wants to view, at any time day or night, on any day that is convenient. New episodes will cost a little more than re-runs, syndicated shows will be even cheaper, and, I believe, even cancelled shows may be available (as they are now on DVD).
    I think we are seeing the end of not only timeslot-based programming, but also of video/DVD rental at all. Netflix is a great idea, but it is based on a soon-to-be-outdated business model. When every movie Netflix offers is available OnDemand, there will be no need to possess the physical DVD/video.
    Essentially, the only programming that will continue to be broadcast according to its timeslot will be live events (Sports, political proceedings, news coverage, etc.)–but even these events will remain available for ordering after they air.
    How will we tranisition to this model? It seems that rates will still change by time–for instance, if you were to order a formerly prime-time show between 8 and 10 on a weekday, it would cost more than, say, during mid-afternoon. Essentially, only the rates will be affected by timeslots–the programming itself will be almost completely accessible.

    Comment by Amram -

  64. I hate watching Television. I don’t even have a TV at home. All the information I want to get I can access via the Internet.

    Comment by Roman -

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