As is the normal way on the internet, people love to read headlines. Of course they rarely read the substance of the article behind the headline. They take the headline and run with it as gospel. This is particularly true of internet video and the presumption by many that the internet will be so vast and powerful that its a foregone conclusion that video on the internet will replace traditional television delivery.
Aint gonna happen. I can go into depth about it, but my buddy Dan Rayburn does a far better job of it. He asks the simple question of “how is it the Youtube , with all of google’s resources,. cant solve their buffering problem ? ” Then he answers much of it.
Now maybe Youtube will fix their buffering problem someday, along with the other issues that Dan addresses, but it wont be easy and it wont be quick.
You can find Dan’s work here. Make sure to also read the comments. He does a good job there as well
Let me add a couple other thoughts. There are many that think that video over the internet will “set them free” from having to deal with a small number of big companies (think cable, telco). . If that is what you think, you better think again. There are maybe 3 companies that can stream to 1mm or more simultaneous users. Google, Limelight and Akamai. And that 1mm simultaneous users isnt just for your content. That is for EVERYONE’s content and they cant get much beyond 2mm without big problems. More importantly, if you want to stream your content to millions of users at once, its going to cost you an incredible amount of money.
Which leads me to a lesson for all you netizens who are jazzed up about over the top video. If you really believe the demand is there and your content will command 1mm simultaneous users , its probably cheaper to pay Directv, Dish Network and Comcast to create a channel for you and let your viewers watch it on tv.
Let that sink in. Its going to be cheaper to have the big traditional cable distributors offer your content to viewers than it will be to reach a large audience on the net. Thats for a one time offering. If you plan on doing it more than once or on a regularly scheduled basic, there is no question its cheaper to do it this way. And the picture quality will be dramatically better.
In fact, that is probably a great business opportunity for satellite, telco and cable companies. Open up times to bid to offer content over their networks. You want channel 1020 on Directv, its X dollars per hour minimum or the best price bid. Here is how you provide your content to us. You can buy marketing from us as well. Directv, Dish, Comcast could make a boatload of extra money offering this service.
And i can give you one more option. It may be cheaper to go to a movie theater chain and pay them to broadcast the content you want people to see via digital to their theaters. As long as its a slow night and they can sell popcorn, I can assure you it will cost you less than a content distribution network would charge to deliver to thousands of viewers.
Maybe someday over the top video will be a realistic alternative to traditional distribution of content, but its not now and its not this year or next or the next and probably not the year after that
47 thoughts on “Think the Internet Will Replace Cable ? Read this first”
@Beevok, yep but i dont think anyone is saying ip delivery of content is directly the replacement for cable.
It will be some kind of morph with not only video but additional functionality.
Look at Boxee – you wouldn’t say that this is a direct replacement for a VCR would you?
My startup at the moment isn’t directly working on the carriage of the video itself but external services that will be part of the eventual outcome whatever it is morphed into.
Comment by deancollins -
Have you noticed this trend: media don’t seem to “replace” each other?
The radio was supposed to replace the newspaper.
The TV was suppose to replace the radio.
Then again, no guarantee history will repeat itself.
Comment by beevok -
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Is Right! Ustream can’t even get their website to work on firefox. I have embed video on a website I built for a client and every time you visit the website ustream crashes firefox. It’s a joke and MC is right. I do like MC idea about getting your own channel. I know Google is offering commercial spots through adwords, perhaps they should offer your own channels and spots, etc.
Comment by imoria -
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And add 1 more to the column for online video vs. cable tv. YouTube just signed a deal to deliver live sports. Granted it is cricket and not the NFL or NBA, but the argument that cable tv has a lock on live sports is looking less and less convincing.
From MC> since when is streaming live sports new ? its been happening for more than 10 years. just because youtube does it doesnt make it a game changer
Comment by jafy -
It seems that every argument against tv over the net is because of the streaming issue for live events. Park this one…
People choose surfthechannel and ninjavideo over dvds. The quality is crap, you run the risk of spyware/malware/etc, and the process is overall fairly painful.
However, it’s still less painful than TV. Forget timeshifting (a ridiculous concept that needs to die). Forget the cable On-Demand services – Rogers on Demand here in Canada is embarrassingly bad.
And add on that as a HD customer (again, Rogers in Canada), I have to scroll through hundreds of channels to figure out what I have and what I don’t have because of a hilarious marketing decision.
From MC> or you can set the favorites on your remote and scroll through 10 channels. But even scrolling through 100 networks on your tv is easier and faster than searching the net trying to find something you like, and then hoping it streams or downloads correctly. then of course you are forced to watch it on your pc, unless you want to go through the hassle of connecting your pc to your tv and tying up your PC. Of course you could stream from your pc to your tv over your wireless at home, but then you wipe out your bandwidth at home so that if anyone else wants to do something on wi-fi, or you want to have your PC working on other things, you cant.
Give me a monthly service where I pay either an all-in price or per-use price for the shows I want. I don’t care about live events (oscars or sports), and I get my news online.
What do I need cable for?
Comment by chamoen -
Have you thought much about the impact fiber optic in the end user’s home will make? Buffering problems will disappear…
Service providers such as Comcast, Cox, etc. will need to lay fiber instead of cable or they will be woefully slow.
Comment by shafttoe -
While I agree that the internet will not replace cable “television” it becomes evidently clear that the fundamental assumptions of cable television are being challenged pretty frequently these days. For the companies, in particular in the business of content management, that neglect to address these drastic environmental changes will be left behind.
I do believe the internet will drastically impact cable in the traditional sense- just the way other technologies have drastically impacted other services provided to the typical American home. The main challenge to the traditional cable business model is that more and more power is shifting in favor of the consumer-what the consumer wants and what they’re willing to pay for. Business models for future content leaders must reflect this.
The main idea I am running with is twofold: the first being that traditional cable fees are rigid and consumers will demand more flexible payment options based on their preferences; second is that consumers have grown to demand value-added content above and beyond conventional programming. Whether you want to label the internet as a solution to these two challenges, some form of communication and networking will be required- the question is who will control these connections. Will it be a new internet company that better bridges the gap between consumers and content generators, or will it be conventional cable providers who can boldly adapt to new business conditions?
Instead of rambling about how I see the landscape unfolding, maybe consider how you think the next generation of “tv watchers” will view content, and what they’ll be willing to pay for.
Lastly, I am no expert in technology, and call me out for being an optimist, but I believe that over time content distributed via the internet will find a way to be more efficient than its competing alternatives.
Comment by mrisen -
I don’t think it’s quite going to be the Internet replacing cable. I still think there’s a place for Service Providers. They provide valuable services for Content Owners, including local language translation and customer support. That’s something Content Owners don’t want to get involved in, if they can help it.
After all, why haven’t Content Owners already done this? Surely they can invest in a streaming infrastructure, or buy an Internet streaming provider. But they are not interested in doing that. Why sell direct to consumers when they can do what they do best: create programming and sell it for millions of dollars to Service Providers for lots and lots of money.
The reality is that the Internet can become a viable distribution platform for TV programming. That’s already the case. ABC, Fox, Hulu and CBS all have on-demand programming. These catch-up TV services allow viewers to watch shows that they’ve missed.
So just think further in the future when IPTV and Cable/Satellite providers start using the unmanaged Internet to deliver programming. Why not? On-demand is already what the Internet is about, not live programming.
During CES, Microsoft announced Mediaroom 2.0, its IPTV platform that can now deliver to unmanaged, open networks like the Internet. This is a game-changer since it now means that Mediaroom customers like AT&T and Deutsche Telekom can now expand their market to customers outside their territory. Pretty significant, I think.
Comment by Jose Alvear -
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“Call the content on YouTube garbage if you want. Quality is irrelevant. YouTube destroys the competition in the only measure that matters, eyeballs.”
Tell that the owners of Ebaums World, Farked etc and all the other sites with a lot of eyeballs and poor revenue.
Plus if quality is irrelevant, why is YouTube trying to close deals with content companies? You contradict yourself.
I will let the pocketbooks do the talking my friend. And what they are telling me at this point is Old Guard 1, YouTube 0.
Comment by ianbell330 -
@ianbell330 I think you might be confusing Comcast the content company (which is brand new) with Comcast the media distribution company (which is what I was referring to). YouTube is not making deals with distribution companies, the cable companies. They are making deals with content companies, which is great and smart.
Call the content on YouTube garbage if you want. Quality is irrelevant. YouTube destroys the competition in the only measure that matters, eyeballs. And they are almost, if not already, profitable. So the scale towards being super-duper-mega-rich is clear and evident. Comcast (the distribution company) and Time Warner cannot compete with that going forward. Regardless of what advantages they might have in the cost of production, the consumers are transitioning towards online, where YouTube dominates.
About Vevo, almost all of their traffic comes from YouTube.
I think you’re missing the distinct between creators and distributors. Creators will always be around, content is king, but the old guard cable distributors are dead men walking.
Comment by mateo2 -
Sorry, but I think this shows your lack of understanding in the space. YouTube is desperately trying to get deals with the Time Warners of the world so that they can sell ads against premium, SAFE content. 99% of the content on YouTube is garbage that no advertiser will touch. Take a look at http://www.vevo.com which was created by a number of media companies in the music space. They started out partnering with YouTube at launch and have already weened themselves off of them. Now they have a premium site with good reach and REAL ad dollars. Same with Hulu.
YouTube has to move quickly to establish itself as a premium site otherwise they will be left behind. They depend on the large media companies, not the other way around.
Comment by ianbell330 -
I agree. Until the buffering problem is solved, I don’t think cable is in danger of the internet replacing it.
Comment by morithoughts -
Mark repeatedly fails to see the big picture when it comes to the internet. His competing business prevents him from seeing past current limitations. There were a lot more limitations just 5 years ago. So YouTube can’t be the king of all televised media today, so what? In 10 years YouTube will be the biggest video company in the world. If not sooner. Google succeeds because they see the big picture. When they bought YouTube you called it a huge mistake because of the costs involved. Now they are close to monetizing it (if they haven’t done so already). Of course they’ve changed strategies along the way, that’s the smart thing to do. And because they are so big, companies are going to want to enter into deals with YouTube as more and more people cut back on their cable bills and watch more stuff online. Vevo is already the web’s biggest music site. In a month.
The question is not whether Comcast and Time Warner can compete with YouTube long term — they’ve already lost that battle. The question is can they even compete with DailyMotion, MySpace TV, and Vimeo.
Comment by mateo2 -
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Even if the internet could handle handle TV, it will not replace Cable. It’s about control, not infrastructure – simple as that.
Everyone talks as if the internet is better than cable, or that it’s different. From the consumer perspective, if content comes from their internet provider its open, free and well, the internet. If it comes into their cable box, it’s the cable company. But in reality these are both the same company, just relabeling the content differently right?
Content through cable box = Cable
Content through router = internet
Content through TV widgets = internet (is it really though? someone controls that)
As far as I am concerned, since the internet and cable both come in through the same FiOS connection, its all the same. I pay for both, one provides a closed, quality controlled system for the shows I watch, and the other is an open platform that can be used for many things.
Content creators and those that control how the content is viewed both work together. So why does anyone think they would be able to get good content for free? YouTube is free to watch because no one would pay for it. Simple as that. And any good content that is on YouTube it supported by advertising. Same with Hulu. If there were enough people watching even Hulu, don’t you think they would charge a subscription fee? Of course they would. The truth is that even for all the views on Hulu, it pales in comparison to the revenue these networks make from their cable partners. At least for now.
Will the internet replace cable when it comes to streaming content? No. They will become the same thing for content viewing. The Comcast’s of the world will always control how content is viewed, and there is no way they will give it up.
Comment by ianbell330 -
As long as there is a demand. There will “end up” being innovation to support that demand. Sooner or later everything will end up Ala Carte. Now.. Quite frankly, your right that it wont happen overnight.. but i believe (and so does hulu, netflicks, most of the TV Makers..) that it will happen. Everything will be wireless. everything will be wifi..your oven.. your security system.
For example.. Within the next month I’m going to be ditching my expensive 150.00 a month att uverse plan.. for a ‘bare bones’ plan.. and substitute the movies for streaming netflick movies (for 8 bucks a month). total savings when the tuners are accounted for as well. will be over 1200 a year.
Comment by mverinder -
YOu should also point out the lack of reasoning behind posts like the ala carte cable post above.
You know the posts that say I get 400 channels of Cable and I only watch 30 of them so why should I pay for crap I’m not watching.
It would be so much cheaper if I only paid for what I watch.
The problem is the cable networks are charging the CAble company an amount per subscriber whether you watch the channel or not. Comcast pays $2 (or something like that) to ESPN per cable subscriber that has any cable package above the most basic one.
If Comcast lets their customers choose which channels they want to subscribe to and half of their customers decide they don’t want ESPN then Comcast is going to have to pay ESPN $4/subscriber and they in turn will pass that on to every EPSN subscriber. If that’s one of the 20 or 30 channels you wanted to keep in your lineup then you are now paying twice as much for it.
Also many of the channels in the various cable lineups are part of deals Comcast has made that give them a break in the cost of carrying a channel in exchange for including sister channels in the lineup. Take the sister channels out of your lineup and your costs are likely to go up for the main channel (if it is in your lineup.)
And the reality is, (I’m bringing this post back around,) that it doesn’t cost the cable company any more money to broadcast these channels to your house. It’s a broadcast model. A reason why cable/satellite beat the internet as outlined above.
IN other words you’re saving the cable company next to nothing by only subscribing to 20 channels in an ala carte model. The overhead of the cable company remains the same.
The internet, right now, is good at what it does. It gives us on-demand content and it lets you also be the content producer. Eventually customers are going to want on-demand content 100% of the time. The kids are growing up with this.
AT the same time it obvious that certain events need to be seen live by people. The Super Bowl anyone? Right now cable/satellite can’t be beat there.
But the costs of streaming on the internet will only drop as far as I can tell. BAndwidth prices get lower every year or two. They lay more fiber and/or find ways to send more information over existing in fiber. I don’t think we’re at any limits there.
INternet also favors the little guy and the more niche programming.
ON the other hand I can definitely see the cable/satellite companies combating this with a more robust DVR/broadcast model. I mean my Tivo is on-demand.
Comment by trip1ex -
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Mark: Curious about something, hope you’ll see this and maybe provide thoughts. I hear you about the idea of just going to Comcast/DirecTV/Dish/etc. and having them create a custom channel for your content. This has actually been the case in kids and infomercials for a while now – you buy that daypart from an existing channel. But question: for a mainstream program, how would you program that channel?
Imagine you have a set of low-viewership TV-length videos – 22min or 44min. You’d pull about a 1.0-1.2 – good but not great by any means. You get a new episode every week and theoretically you could sell some advertising during the new episode. Now you’ve got 168 hours to fill with programming and only 22 minutes. Do you fill the channel with reruns? Carpet-bomb the channel with your program? Go get other people and sell them your airtime, like another channel?
I’d love to hear your thoughts on what you would do to fill the time.
Comment by donkeyxote -
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I was rather surprised to see the limited number of streams requested for U2, but not surprised that it was less than demand.
People still don’t realize the Internet doesn’t scale the same as broadcast, but it’s a great narrowcast model. That’s why dripping bits into a set top DVR is cost effective if the content is specified but the delivery isn’t immediate, but streaming all content to everyone immediately isn’t cost effective and, if we assume content isn’t limited, may never become cost effective
Wasn’t it ’96 when the dirty secret of the Internet in the US was that we had fewer than 250,000 total modems in POPs for consumers to dial into? Meanwhile, some content people were touting an online streaming event audience of millions?
About that time or a couple years later multicast-IP became the buzzword, and routers were going to support it until someone realized the ease with which networks could be brought to their knees. I’m sure we saw you at those conferences, right? (You made a great deal and got out early!)
SAT transponders were a bit limited, but one could contract a dedicated transponder for about $250K a month supporting either traditional video or data at about 45 MBps. A single transponder could cover the lower 48 states to 1 meter dishes. One still needed to lease an uplink site and terrestrial service from your content origination site to the uplink, but that was still under $100K a month. Downlink only dishes were about $1.5-5K each to buy outright, or lease for abut $100-150 a month. It scales to POPs and cable head ends, but not direct to consumer unless you’re in the boonies and have no other access.
There are other business models and distribution models out there, but I fear we’ve crossed the chasm in the minds of consumers who have proven they aren’t willing to pay for most content yet are too lazy to order a video.
I think Netflix, et al, could very cost effectively distribute the top 20+ movies each month to a web connected set top DVR with this model and satisfy 90% of demand. But I don’t know if they could get consumers to pay $1, 2 or $3 for more than a couple years before consumers forget what it was like to trudge to the post office or put the DVD back in an envelop.
Comment by wayoffthemap -
I think we all get caught up in the thought that’s what is new will kill what has come before. This is a great way to get attention – back when I started at Revision3, we used to proudly shout “Kill Your TV”, until we realized that a lot of (and a growing number of) our viewers were actually hooking up their notebooks and ipods to their TVs to watch our shows.
This post inspired me to go into more detail – you can read it at http://louderback.com/2010/cable-dying-not-today-zurg/.
Comment by jlouderb -
People forget how much “value” there is in the curatorial value of a “network” deciding what to put on for you.
I have 1000+ dvd’s an nothing to watch, but i’ll flick channels to watch a movie i’ve seen before.
Comment by deancollins -
The new gate keepers surely won’t be as bad as the old ones. Plus no one will have to wait in the house/apartment for 3 hours anymore (unless its for internet service). Cable will lose on the fringe for years before it reaches the tipping point. Bring on the new guys.
Comment by marionyc -
Curious as to what your thoughts are on a la carte cable. I’m sure it’s not in the cable company’s best interest, but from my standpoint, paying $90/mo or whatever to get 350 channels, of which I watch 20 seems like a waste. I’d much rather pay $50 for the 20 channels I want to watch. That should be alluring to the cable company on a cost/channel basis, but operationally I guess they’d still have to deliver all 350 channels, so in the end it would be a loss.
Still, for me, a la carte cable would be a dream come true.
Comment by gknuth -
Mark: This is a very dynamic area that there are only a handful of market research subject matter experts, like Dan Rayburn whom I also know, and Enthusiasts like yourself have a handle on. In your own backyard are Parks Associates, The Diffusion Group and myself. I HIGHLY recommend TDG! I have a related Sports Video Technologies market research business concept I’d like to run past you (and am pitching elsewhere with less deep pockets). I apologize in advance if this is not the appropriate forum. Should it have been under “Great Business Ideas”? email@example.com
Comment by raclarkone -
10 million people (U2 live on Youtube) not much of an audience?, the networks would love that number on prime time…
DVR is currently the best way to watch the show I want when I want it, but I have to wait for the show to be broadcasted anyways. Internet streaming provides a much better service (I stopped recording reruns of Torchwood when I saw the series available in Netflix streaming, I also deleted all unwatched episodes of Lost because they are there)
Broadcasting was born because radio waves were the only cost effective way to reach the highest number of receivers with early 20th century technology, but is like throwing something to the ceiling fan hoping it will stick and make money out of it.
Imho, Internet is the best way to provide on demand content. You make a good point about live broadcasting but after using DVR for the last 5 years I just can’t think of anything I MUST watch live… not even the Mavs in the NBA finals (crosses fingers)
Comment by vpeters25 -
I think you are making the same fundamental mistake that EA made when they purchased Origin systems and destroyed the company . For the Non-gamers reading this EA’s initial success was with the Madden franchise, they were (and still are) very successful by realeasing a new version every single year like clockwork . This works with a game like Madden which is based on a sport because all you need to do is slightly tweak the tech and update the team rosters. Origin Systems on the other hand made RPG’s(role playing games). RPG’s are completely unlike sports games in very fundamental ways – where successful sports games are updated yearly to keep the graphics looking “fresh” most successful RPG’s look dated compared to other current releases when the come out. This is because RPG’s focus on a narrative and character development. Even starting with an existing engine so that developers are only focused on writing content and not “building the game” a good RPG takes years to create. When EA bought Origin Systems they attempted to apply the Madden model to EA’s successful Ultima franchise – they wanted to spit out a new Ultima every year on the dot – when fell behind schedule they threw more developers at it, which is like trying to publisher trying speed up the released date of a novel by hiring more writers to work on it. The end result was a few quickly published half finished works that destroyed the reputation of the company which was eventually dissolved.
What does any of this have to do with Internet vs Cable ? You are operating under the same fallacy EA was : that what is true of sports is true of all television programming. You entire argument rests on one fact :
there are maybe 3 companies that can stream to 1mm or more simultaneous users. Google, Limelight and Akamai. And that 1mm simultaneous users isnt just for your content. That is for EVERYONE’s content and they cant get much beyond 2mm without big problems. More importantly, if you want to stream your content to millions of users at once, its going to cost you an incredible amount of money.
Yes this is true. But other than sporting events and perhaps news, there is no programming that requires access to “1mm or more simultaneous users”. An earlier post of yours about remotes and channel surfing revolved around this same basic assumption – that everyone will want to watch the same programming at the same time. Since the advent of the DVR and downloadable content I never feel the need to watch a TV show as it is broadcast, or channel surf “just to see whats on”.Yes sports fans still do – they will flip channels during commercials or switch between two different games that are on at the same time. But with everything else most people are perfectly happy to let a movie or TV show record and then watch it later at their leisure – even going so far as to postpone viewing just so they can skip the commercials when they finally do view it. Further now with the easy availability of streaming netflix or high def downloads I usually wait for an entire Season of my favorite shows to be in the can before I start watching – I hate cliffhangers and the shows I like have a habit of being screwed by networks and cancelled mid run so I’ve adopted a policy of not watching any new series until the second or third season so I don’t get attached and disappointed (yes I realize if everyone did this it would be self defeating – but I’m sure the producers will catch up with something like an OVA model). Yes at first this type of viewing damaged content producers by ignoring their revenue streams, but they are adapting – releasing boxed set and adapting using services like Hulu and Netflix .
The old model of media is based around your assumptions – everyone likes the same thing and will make an appointment with the TV and advertisers to sit and passively consume whatever is on at the same time . This has resulted in the “lowest common denominator” programming that dominates today with reality shows and celebrity gossip. The new model is based around choice and quality (writing not necessarily flashy special effects) – smaller niche markets with dedicated fan bases that demand quality and are willing to pay for it. We’ve already seen this transition in the music business, and it wont be long before video programming follows suit.
Comment by cleveralias -
Mark, this post is missing the point.
While streaming may be more expensive and lower quality now, the question is when does it become cost-effective enough and good enough quality? I think that point is approaching soon if it hasn’t already gotten here. Consumers clearly want the control that internet video/ on-demand offers, so the demand is there as demonstrated by the success of Netflix streaming, Hulu and many others.
I think you will be proven wrong on most or all of your points in the fairly near term.
And p.s., people are paying for some internet video – there are ads on Hulu and Netflix has a subscription fee.
And p.p.s. See Dan’s other blog post about the radical reduction in streaming costs over the past decade. This is a trend that I bet will continue. http://bit.ly/5qSIYQ
From MC> no question cost per bit will continue to fall. But usage will increase as well. As will the complexity and number of alternatives. The bigger problems for streaming, live, progressive or on demand is that there will be other applications that will eat up a ton of bandwidth and impact video quality, there will be users who cut their wired ISPs and go all wireless and wireless cant deal with video at all ( and will probably go with usage caps), doing wireless in the home for video is a disaster for all but those who only have one computer doing one thing at a time. Companies with IT depts cant get consistent throughput of data. Your little 802.11 access point has no chance to handle video and do the other things you want to do online at home.
Comment by jafy -
I assume Mark ran the numbers comparing the cost of a server farm and internet pipe compared to a cable uplink… I would love to see these numbers.
Imho, internet broadcasting is a complete different model. A few years ago you could only dream about TV on demand and the closest thing to it was to playback from your pre-programmed VCR. Now you can provide on demand HD feeds of your programs over the internet and watch them in set-top devices such as blu-ray players (I watch netflix movies with mine)
The technology is here as U2 live from the Rose Bowl proved. There may not be enough bandwidth for live broadcasting yet but Netflix is showing that streaming on demand definitely works very well.
From MC>actually you have it backwards. U2 Live showed that there isnt that much of an audience there for big events on the net. And dont forget, DVR usage is growing faster than internet video usage
Comment by vpeters25 -
This strikes me as something of a market opportunity. One can envision a broadcast mechanism using radio waves to send data which can be converted into video signals. One could even use some form of data buffering device to record this stream and play it back at some future point.
Seriously, we just need more over-the-air TV signals. HD works great on a simple antenna feed, and with a Tivo or Tivo-like device, air time becomes irrelevant. Why are so many TV stations still shut down during the night, or showing crappy “Paid programming”? Somebody should grow a clue and start streaming data to DVR devices during those hours, letting them buffer up for viewing later.
Comment by Otto -
You know Mark, I tend to agree with you that the cost of delivering video over the internet versus delivering video through cable/satco is much different and cable/satco is the most efficient method. The problem is that cable/satco don’t progress. These companies grab their empires and hold old models without changing and it’s like pulling teeth get them to institute change.
People are going to want their Television in the same way they will want their print news. They don’t want to have to use the old model, people want their TV/Movies/Etc when they want it, where they want it, and don’t want to have to jump through hoops to make this happen.
TVEverywhere is the first good move from Cable/Satco companies. Cable/Satco offering “Hulu” but backed by the fact that the people that can access it pay for cable/sat is a very smart thing. Cablevision’s pseudo-dvr was a great move where as long as it’s after the original air time, any one can select a show and have it sent directly to their DVR. My OnDemand options are horrible and cable/satco should start throwing all their money in this type of initiative. Epix is a start, but having to pay more (on top of their already paid for cable) will turn people off.
Cable/Satco are only now starting to move away from old models and this is what bothers people. They have to move to things like Boxee, Hulu, etc. while these big companies play catch up. If they’d start embracing these new models, this wouldn’t be an issue.
Imagine this. Verizon signs a deal with Netflix where FiOS subscribers are given a substantial discount for Netflix. In exchange, Verizon mirrors Netflix video servers (acts sort of like a Verizon only CDN) so that content delivery of Netflix streaming is no different than the already offered OnDemand. But you have the capability to see it on your TV (set-top box), computer, Xbox, etc. Then not only does Netflix get CDN support but now if you have cable and Netflix, and live in a Verizon FiOS area, you’d be stupid not to sign up for Verizon (more subscribers). Same could be said for Hulu. Comcast could offer Hulu’s library to Comcast customers. Comcast acts as a Comcast-only CDN lifting the server issues, Comcast gets a great service that is accessible from their cable boxes. Comcast gets a great OnDemand video service which will help customer numbers, Hulu gets more visitors to help their advertising charges as well as reduced server/video delivery cost because Comcast customers are no longer “charged”. Can you tell us why these things aren’t happening?
Comment by Trae -
the average content producer DOES NOT CARE about the costs or technical issues with streaming video.. they do no manage this problem. UStream, Justin.tv etc etc worry about this problem and they have been and will be successful.
Content producers and consumers only care about the fact that you can fire up boxee or whatever it is, and instantly distribute get access to tons of high quality content (let’s face it, so many people on the net are producing MUCH BETTER CONTENT than cable networks, and this will continue to grow)
From MC> You are dreaming. If the content online is so much better, why is no one willing to pay for it ? And look at Ustream,e tc. The people who have shows turnover by the minute. Why ? Because there is no model that works. From what I can tell, financially its not working for UStream or the streaming aggregators either. Hard to call that successful.
Comment by bradleyjoyce -
What about over-the-air?
Right now in LA you can get 76 channels, many of them uncompressed HD, meaning better than cable or satellite.
With a convertor for a computer and an OK monitor, you can have a combo of HD for all the big games, and hulu/netflix/etc. for the rest, complete with DVR, etc.
This doesn’t invalidate what you are saying, but is just another option for people.
(And I hope it convinces you to try putting HDNet over the air in a test market… Say, Denver, where you have plenty of good lawyers to work through the details.)
Comment by Scott -
Pingback: Basketball Blog.com – The Best Basketball Blogs Resource Online » Blog Archive » Think the Internet Will Replace Cable ? Read this first
I really hope you’re right. I only want just enough people to watch TV online that I can get it for free. Let the other millions of people keep paying for cable while I watch it for free online. I don’t want those millions clogging up my free streaming. They definitely need to keep their TVs and cable connection.
Comment by sytycd -
Mark – I never thought about the cost of video at large scale being cheaper on cable/satellite than Internet. Good point. But…
I think that’s a technical and pure economical model and somewhat misses the point. I am turning 40 this year, but my sons behavior patters are very different than mine. They watch shows online, the simultaneously read wikipedia entries about what’s going on in the show, or people’s comments, or related videos, etc.
Maybe when people talk about Internet overtaking TV they are referring to the total experience, not the quality/cost issues.
Comment by Geva Perry -
Even if the technical problems can be solved over time, there will still be premium conduits developed to deliver higher quality content at various subscription levels.
Comment by Fred H Schlegel -
This article reminds me of something from the past. Think early nineties and people putting news on web pages. NYTimes watching as sites that got thousands of hits went down cause they couldn’t handle the traffic. What do you think they said to themselves…did it sound something like this post? 🙂
Comment by aaroncray -
Also consider that Netflix spends $600,000,000 a year on POSTAGE. They are aggressively pushing streaming, because it is so much cheaper. They do not seem to concerned about any technical limitations on their streaming capabilities. They’ve got several million subscribers who regularly stream.
Comment by mikeberkley -
For whatever reasonable DirecTV charges, I get all of the TV shows on my DVR, which I can easily watch either on the TV, or on my computer (thanks, Slingbox).
Why would I want anything to be different?
I guess the primary advantage would be watching shows after they have aired that I haven’t chosen to record, and that is a significant advantage, I suppose. If DirecTV can offer more of these shows using their OnDemand system, then I really don’t see any reason why cable needs to be replaced. It works pretty damn well.
Comment by tileguru -
Ah, but the MSOs themselves could make over-the-top, at-scale streaming a reality, since they own much of the IP infrastructure. The costs for them are much, much lower.
Comment by mikeberkley -
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