According to the LA Times, “In written questions to Comcast and NBC Universal regarding their $30-billion proposed marriage, Sen. Franken — who has been one of the harshest critics of the deal — wants Comcast and NBC Universal to promise that it will put all its television shows online. He also wants assurances that shows that the companies put online be made available to every one and not just people who get their Internet service through Comcast.”
Also in the Times article: “As Franken notes in his questions to the two companies, “The Internet is the future of the media business.””
Lets start with the first request that all NBC Universal/Comcast shows should be delivered over the internet. Someone needs to explain to Sen. Franken that TV shows delivered over the internet consume bandwidth. A lot of bandwidth. There are reasons why Youtube limits the size of files that users can upload to it. The first is that video is the ultimate bandwidth pig. The 2nd reason is that bandwidth is not unlimited or elastic. The more bandwidth that is consumed, the more bandwidth that must be added to maintain existing levels of service. That costs a lot of money. Think that might push up internet rates to consumers ?
I get that no one really cares if Comcast has to spend money on capital improvements to add bandwidth to the home. They should. Its pretty damn stupid to push consumption in a direction that will raise internet rates to receive the same content for which there is already a phenomenal digital network in place to deliver that content.
Think about it for a minute Senator Franken. Comcast, and every large TV Provider has a digital network in place that can and does deliver gigabits of tv content perfectly, every second of every day, to any TV set in any home that is connected to their network. It works. Well. What you are asking Sen Franken, is that Comcast duplicate the delivery of theirs and NBCUniversals shows on a network, the internet, that is not, and has never been designed to handle the delivery of huge volumes of video and tv shows.
What you are forcing them to do is not only going to impact Comcast, its going to push ANY internet provider on which NBCUniversal/Comcast owned shows are delivered to deal with the increased bandwidth needs your request requires. Increased bandwidth needs to the home means more money spent on infrastructure needed to support that delivery, which in turn is going to mean HIGHER INTERNET RATES and/or caps on internet bandwidth consumption for consumers . Did you even think through what would happen if NBCUniversal/Comcast was required to simulcast the Olympics over the internet ?
Even if shows are only required to be placed online after the fact and offered on demand, even if we put aside the cost issues, you then have to answer a bunch of expensive questions. Which video format? Flash ? Great, except that it wont work on most mobile devices. Flash and Mpeg2 or the Google owned On2 format ? And should the ondemand tv shows be streamed or progressive download ? Streaming is more expensive, but progressive download leaves a copy on the destination device, which is going to create huge issues for copyright owners. Does this apply to shows that NBC licenses or just the shows it and Comcast produce and own ? Try explaining the difference to your voters. And what timing? Do they have to post the shows immediately after they air, or is ok to have them post the shows 1, 2 or 3 days or weeks after the show airs ? Right now these are questions that the market defines. If you require delivery online in order to make your constituents happy, will you try to make all of them happy ?
Let’ me try rephrasing all of this in a different manner. Google can’t make money delivering video content that costs them NOTHING over the net for free, what do you think will happen to internet rates when you REQUIRE NBCUniversal/Comcast to deliver content that costs millions of dollars per hour for free ?
I understand that you just want to make sure that people who are getting shows online now continue to get them. What you don’t understand is that the vast majority of shows online are library shows that weren’t generating much, if any revenue for their producers, so any advertising revenue they could get by placing the shows online was found money. Established shows that are currently on air are either not online or are delayed. Now that producers are recognizing that the advertising dollars generated by current shows is of marginal value at best, you will see more and more shows put behind paywalls available only to subscribers. Try to regulate these market driven decisions and you will certainly find the law of unintended consequences biting you in the ass.
But wait there’s more. The hardest and most expensive part of delivering all of this content to the home isn’t even what the TV Providers have to do. Its what has to happen in the home. Senator Franken, did you install your own wireless router in your home ? Ever try to put in a 2nd one to make sure you can get a signal that is strong enough to carry the video you want to watch into the other rooms ? Ever experience a slowdown in that wireless network at your place ? Ever get annoyed that video you were watching buffered and you couldnt figure out why ? Ever try connecting them to your TV ? Who is going to solve these issues for people who think its their right to watch their TV over the internet ? Who is going to pay for it ?
Finally, lets get to your statement “The Internet is the future of the media business”. Dead Wrong. Not even close.
Let me explain to you the future of the internet. We all are becoming more and more dependent on our handheld devices which are becoming more and more powerful and an expanding part of our daily lives. For many, the mobile device never leaves their side. This increasing dependence on mobile is slowly but surely weening us off our desktops and laptops. As the capabilities of mobile devices and their apps increase, so will our transition away from traditional computers. Soon we will rely exclusively on our mobile devices or be able to tether the mobile device to the screens and keyboards we use at home. Over the next few years we wont sit down and fire up the laptop or desktop. We will place our mobile device next to the screen and keyboard we have on our desk or pulled out of our briefcase. For those of us who need always on internet for family members or business, we will consider replacing our land internet lines with a 4G access device that is part of our mobile account. Combined with all the advances in cloud computing, it should be a simple and very compelling option.
At that point people will ask why they pay for both fixed internet and mobile internet . Just as people are dumping land phone lines for mobile, they will dump fixed internet lines. Not everyone of course. Not even most. But like phonelines, enough will leave their fixed internet lines behind to change the economics of the internet. How does that affect the future of media ? Mobile internet is different than landline internet. We wont look to replicate the experience we got from internet landlines, we will expect new and different experiences that play to the strengths of the device and delivery platform. And we will still get our TV the old fashioned way on those new 60 inch big screens we just upgraded to for $499 dollars. Moores law applied everywhere.
Let me translate all of this for you Senator Franken. If you get what you ask for, by the time you are done answering the complaints of why didn’t you realize that your request would jack up everyone’s internet bill. put caps on usage and negatively impact the performance of your constituents home internet, you just might be the former Senator from Minnesota.
How you view the Comcast/NBC merger is up to you. But before you go off on an internet rampage, please get a different side of the technology story
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Mandating something be free is usually a bad idea. Generally a terrible idea from a market perspective. Once again, that would eliminate competition and decrease efficiency.
Comment by jamakmfg -
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I keep seeing this pop up from time to time about companies like Hulu going to subscription based. My understanding from readings is that Hulu came about to compete with bit-torrent. People at Fox and NBC were already seeing the market move towards internet downloading and were looking to monetize this by providing a free to use system where they could sell advertising rather than just lose the money to online pirates. Subscription would cancel out this action and more people would pirate.
My point and how this truely ties in is this, no one mentions expansion of advertising in these videos. As more viewers watch online, more groups will advertise in these videos and will subsidize the increased demand for bandwith. The networks and advertisers will both win, because they will now get real data as to how many people are actually watching instead of extrapolated data from Nielsen families.
It is in the best interests of both the networks and advertisers to expand internet viewing and this is why it will happen.
Comment by caffeinebuz -
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interesting and informative mark. following your blog its clear you are realizing how clueless the dems are regarding markets and the law of unintended consequences. the most clueless is obama. any consideration for an apology for your very public and strong endorsement of him?
Comment by chunkerman -
Because agree with you’re assertion that the internet isn’t the right bandwidth provider for the vast majority world’s video, I usually don’t comment on this stuff. The thing is, you’ve hit a nerve when you say that the internet is not the future of the media business, I believe it most certainly is. How that will manifest itself is yet to be seen. The internet is an abstraction that can be used in front of any complex system. I think fresh.amazon.com makes for a great example:
“Your fruit will be delivered to you through the internet”
Dead wrong
“The internet is the future of produce.”
Already true. Whether it’s as close to the consumer as Fresh or in the procurement and distribution systems at wall mart, it’s the future, and it’s already happening.
Ok, that didn’t come out exactly how I had planned. The point is, I’m on my computer right now, it’s connected to wireless and hard wired to an ethernet network. If I ask for a web page and some images, it automatically gets delivered (no assumption about when) via the wired network, it would be dumb for my computer to use wireless, but I don’t notice either way. Tonight I’ll be at a computer connected to my TV, that computer will be connected to the internet via cable modem and to broadcast via cable. The internet can make it so that I don’t even know which mechanism was used to get me the video I’m watching. It can show me what’s available when and it can let me watch it, in fact, if demand gets high enough, it can signal to the provider to switch the stream to a high-demand broadcast bandwidth resource. When I’m on my mobile phone (computer), I’m connected to the network, the 3G internet. I have a radio that can probably pull down broadcast content off the UHF spectrum with the right firmware, you get the idea. The internet is the ubiquitous metadata abstraction that lets me get at my content through whatever pipe is allowed and most appropriate, it tells me what’s available and provides the device with the right metadata for it to show it to me. In that way, the internet is the future of the media business.
I think your point is that it would be dumb to deliver something like an Olympic event via the internet when 99% of the viewers are watching (or caching) it at the same time when you have a perfectly capable and dramatically more efficient network available to deliver that content. It doesn’t follow that the internet has no role to play in the process.
The internet is going to take over the role of stream switching, authentication, authorization, metadata management, provisioning, payment, and more. Broadcast bandwidth will be left as the purpose built resource that it is. Everyone will win.
From MC> You make good points. And whether metadata is captured via a backchannel on traditional digital cable or via the internet isnt really an issue. It shouldnt be the primary deliverymechanism. The real question is whether or not people will continue to take the time to sit at a computer or even sit with a computer on their lap when 90pct of what we do online can easily be done with a mobile device.
That is the real inflection point question. Will convenience win ?
Comment by bwaibel -
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Just came in from LewRockwell.com. I’ve always been a fan of Mr. Cuban and am even more so now after reading this post. It is too bad that intelligent men like him are not the ones running(ruining) our country. He has been able to see the future and plan for it much better than the clowns in Washington. Well, actually, that’s not true.. most of them are making fistloads.
Keep up the intelligent thought. Cheers.
Comment by Ferdinand -
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OMG this is getting more and more “expensive”
Comment by steroizishopcom -
Mark, if you ran for office, I’d vote for you.
Comment by ashmat55 -
You’re forecasting mobile to change the internet? I thought the internet was dead and boring?
From MC> It is, which is exactly why people will take the path of least resistance and use the mobile device they have in their hands, even if it means having a few less features available to them in the near term. If the net was still dynamic, no one would ever consider moving to exclusively mobile. But given the best we can do is facebook/twitter for new stuff over the past few years, and those work great on mobile, why not switch to ahandheld instead of a desktop/laptop?
Comment by mateo2 -
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In NYT Olympics article, Ed Erhardt, the president of ESPN customer marketing and sales, said that by 2014, “It will be an online, on-demand world, and those of us in front of it believe the ad models will be there to monetize it.””
Comment by trip1ex -
What is the estimated increase in cost for internet? I, for one, would gladly cancel my $100 monthly cable bill and apply it on top of my current internet bill if I could get all shows on-demand.
Are there studies that estimate what the increased cost would be?
Comment by jasonrmoore -
Point of order…live broadcast over the internet would use a multicast protocol, each stream would use ~2Mbps for SD streams and since it’s point to multipoint, it only consumes ~2Mbps no matter how many users are viewing the program. If you were to set up a system that allowed on demand viewing or time shifting each viewer would set up an individual RTSP session which means each viewer would consume the ~2Mbps of bandwidth. That said, Franken is an idiot, why do we need the government involved at all, if Comcast institutes policies users don’t like there are other providers, the market works.
From MC> except that for mcast to work routers have to all be upgraded, applications have to be changed, and given the number of tunnels required to deliver in mcast, there still are more streams than bandwidth..
Comment by dancovey -
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Franken doesn’t want Comcast to use this deal to thwart competition. That’s all.
What people really want is on-demand TV. Cable and Satellite need to get better at that. As you said before, the DVR is a way to that.
Also note that bandwidth is only getting cheaper. AT the same time people want more hi-def and better hi-def which sucks bandwidth.
And most people that I see that do online tv do it because they don’t have any money or a Tv. The college student crowd. Or they watch little TV to begin with and don’t want to pay for a $60 package to get a specific show. So maybe they do iTunes or something.
OF course, free is a mirage. It’s not sustainable.
But this notion of channels doesn’t seems to be either. People are becoming more content focused rather than channel focused.
Comment by trip1ex -
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Everyone’s comments so far have been intelligent and measured—I guess I will step forward as the first dunce to make this a political discussion: I have been to Minnesota. The people there seem smart—hardworking and nice. But if they keep electing former professional wrestlers or failed comedians to high office, this is what the result is. Of course Mark’s post is reasoned and accurate—sort of the opposite of Al Franken.
Comment by dcangelo -
Mark not sure about the mobile internet sustainability on the long run. Check this interesting article on mobile warming:
http://finance.yahoo.com/news/Think-Your-iPhone-Internet-Is-siliconalley-250914012.html?x=0
From MC> It makes my point exactly. Bandwidth constraints will make it easier and cheaper for networks designed for video to supply video to consumers, and nets not designed for video to focus on non video data.
Comment by premiumgr -
I appreciate your consistent blogging and argument about this point.
Personally, I have felt for quite a while that the internet would destroy TV and make it the [natural] portal for watching entertainment – but I realize that I had not considered all aspects of this assumption.
I feel as though my [previous] thoughts are shared with an increasing portion of the population; especially as internet speed and reach grows, this assumption will become increasingly the norm.
So, in your estimation Mr. Cuban, can/will cloud computing systems approach feasible usability [there are still problems with scalability and security] quickly enough to provide a counter to the (as you proscribed above) untenable conclusion reached by Senator Franken and the majority of internet users?
From MC> No Chance. The use of video will expand quicker than the expansion of video. Which will create ongoing problems. The internet vs digital cable is simply one network designed to carry everything but video vs a network designed to carry video. Its kind of like general purpose chips for Special app chips
Cheers!
Mark Montoya
PS – Nice trade for Butler and Haywood. While Butler was the more talked about piece of that swap, Haywood is a steal. His contract has become more reasonable, as the years of his contract come to fruition and market for serviceable big men trended up.
If you are so inclined, I wonder your thoughts about the Magic, Bass and Gortat – especially in lieu of the Haywood trade.
Comment by markmontoya -
By far one of your best posts! Great insight.
Comment by esotervik -
Overall I agree. The modification I would make to Franken’s positions might be:
“IF you put content online, for free, to Comcast users you must allow other internet users to access it.”
The argument being that for those of us who are not in Comcast-served area should not be denied content primarily licensed to over-the-air allocated spectrum when subsequently offered on the internet
Comment by Noah -
Caps are a sucker’s game. Access is a UTILITY for ADVANCEMENT as a RACE. Pollution, hunger, energy, we need MINDS connected to THOUGHTS. Charge me a MARKET RATE and let the CORPORATIONS COMPETE. So frustrated, the profits to the individuals(s) that bring REASONABLE ACCESS win, BIG. Sorry for caps, but the regulation and ASSienence WRT TeleCom make me want to ex-patriate. I’m even an Al fan but he’s off here – no appreciation for the topic and intricacies involved. Scratch 3 advanced-bomber-fighters and fund impressive BANDWIDTH, so easy, but apparently not.
Comment by drelig -
I see your point Mark but isn’t NBC already simulcasting the Olympics? And didn’t NBC’s Timo Lumme just say that “non-traditional media [viewership] had already matched the 20,000 hours from traditional broadcasters”? http://bit.ly/cqbtWW Pardon my potential ignorance on the matter but I don’t see bandwidth really getting in the way of the move to non-traditional media b/c there’s already so much online. And it’s not as if every person w/ an internet connection is going to suddenly cut their cord and starting watching everything online. In accordance w/ the increasing migration to online viewing, the need for more bandwidth will be gradual, just as it always has. I don’t quite foresee this apocalyptic prophecy coming into fruition.
From MC> No and no. they arent simulcasting. In fact, they arent even showing all the events live. So they certainly arent showing them on the internet before they are on TV. Plus TV ratings are way up. Online viewership isnt close. PLUS, NBC has limited access and highlights outside of the NBC family of networks. So no, the internet isnt being pushed at all
Comment by timmyjoe -
Sen. Franken, like other politicians on both sides, need an education on network technology: fixed and mobile. As you point out, their motive are not to (necessarily) hurt business, but promote fairness and also promote business. Sen Franken, as well all know from the “al franken decade”, was in the content business.
While “net neutrality” also motivates altruistic goals, wide area wireless network bandwidth is even more constrained than fiber/cable bandwidth and the same types of issues pop up there. An explanation of the CAPEX and OPEX to deliver 1 Mbps of fixed/mobile broadband, and the total capacity – especially in mobile networks – is what is needed.
Comment by spassmeister -
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Another point on Franken’s last statement about the internet being the future of the media business is that it is NOT for him to determine. We live in a capitalist and free society. The MARKET will determine what the future is and how it is shaped. If we start letting politicians determine when, what and how things are done more than they already do, then the world will be even worse off than it already is.
This is the case of an ignorant person trying to tell an industry of people what and how to do their jobs.
If politicians step in with idiotic ideas like this it actually circumvents free markets.
That being said, I am against the merger.
Comment by disfiguredskating -
Wow. Oddly, I pretty much agree with you here, Mark. Okay … maybe one quibble …
You’ve tied the theme of this post into your own fantasy of what would happen if Comcast/NBCU were compelled to duplicate their network content online. The title, for example, includes reference to “bandwidth caps”, which is supported in the article only by your extension of what you imagine would be the collateral issues of such an action.
I do see that, as a writing mechanism, this has helped you to tie your story together, however Franken definitely did NOT call for “bandwidth caps”. Keep in mind that I agree with you that what he DID call for is unrealistic, and betrays his political associations more than it does the interests of his constituents. But his proposal does not mention “bandwidth caps” even a single time. And bandwidth caps are NOT a given in this era of “Internet neutrality”.
I’m a little surprised that you have chosen this topic, while reminding myself of your obvious love for Franken. This is not an issue that has any hope of gaining traction. I mean, compelling Comcast/NBCU to add their content to the web is ridiculous on its face, and is clearly an example of Franken giving some payback to those who put him in office.
You might as well write an article complaining about how Sarah Palin doesn’t make sense. It’s patently obvious to anyone who gives her a cursory listen.
Comment by stupidscript -
I am not sure if you are upset about this because you are in the business of content, but I agree with the notion that Comcast is holding up the progression of rich media because of possible negative implications on their business model. The internet is moving in the direction of open content whether you or Mr Frankin like it or not (see rlslog.net), and I suspect there is real money to be made by someone as bright as you by getting ahead of the curve with new companies like FreeWheel serving ads and creating revenue streams through internet media.
There is a load of dark fiber all around the country that was installed before the dot com bust that Google is pushing municipalities and corporations to light and service. Though bandwidth may be inelastic in the short-term, if government laws created progression which incited competition in the marketplace (Comcast is the only major provider of 10+ Mbps high speed internet in my city of 5+ million) then Moore’s law could be uninhibited. Without some provocation who is going to provide country-wide 4g?
I do not believe this bill will come close to passing, nor should it. I do think that it is good when the US government and a monolith like Google gives the entertainment distribution industry a kick in the ass.
Comment by mm5k -