# Why 2011 will be do-or-die for TV



## thelucky1 (Feb 23, 2009)

Why 2011 will be do-or-die for TV!

Interesting article: http://venturebeat.com/2011/01/17/why-2011-will-be-do-or-die-for-tv/

Will this effect Directv's future?


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## fornold (Sep 4, 2006)

The problem with all these types of articles is that they assume that people have adequate Internet connections, which unfortunately is not the case for many.

I can't get one adequate to stream one show, let alone multiple shows that I can watch now using DirecTV.


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## Doug Brott (Jul 12, 2006)

Hard to say .. DIRECTV has some things going for it .. High Bandwidth to the user (compared to 1.5Mb/s DSL and really even 20Mb/s Cable) .. So even if the model adjusts significantly, DIRECTV could make adjustments to compensate. The author uses ESPN as an example .. Even he states the a la carte version of ESPN would be 3x the current going rate. How many people want JUST ESPN? How much is a Netflix subscription plus ESPN? What if you want more?

DIRECTV is in a position now to bring a lot of things together so that you get the benefit of bundling. Yeah, some of the content is free now .. but as that is reigned in and content providers start charging real money, will be be as attractive?

Don't get me wrong. I think DIRECTV needs to change. There needs to be a "Take it with you" option to keep up with the Joneses (including Internet delivery), but DIRECTV has the ability to do it .. The only question is will they?


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## hdtvfan0001 (Jul 28, 2004)

fornold said:


> The problem with all these types of articles is that they assume that people have adequate Internet connections, which unfortunately is not the case for many.
> 
> I can't get one adequate to stream one show, let alone multiple shows that I can watch now using DirecTV.


Agreed.

This is the one profound flaw in every such article published.

It assumes sufficient high bandwidth is mainstream, it's affordable to most, the amount of it is virtually unlimited in quantity, and it's effectively deployed in most locations.

None of those things exist today.

No doubt things are evolving, but the speed of change will not be lightening fast, at least not as long as the connectivity has so many limitations. 2011 will not be "do or die" by any stretch of the imagination.


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## 1948GG (Aug 4, 2007)

The opportunities missed a decade ago with music, mostly to blame for manufacturing 25cent plastic discs and then trying to sell them for $16, is precisely today what is going to nail the tv distribution industry.

As can be seen from the price hikes this season, although DirecTV is nowhere near most of it's competitors (FIOS here, non-Verizon but Frontier with it's 30-50% hike or Comcast with 15-25%); the handwriting has been on the wall for a very long time, although it has taken digital technology to make it practical (from an engineering standpoint) to be able to deliver individual channels (encryption wise).

Ala-carte. Stop making people pay for things they *DO NOT WATCH* and *DO NOT WANT*. If distributors refuse to de-bundle their popular channels from their un-popular ones, then go ahead and sell them as such, and see what the market will bear. But don't 're-bundle' them with other yet unpopular heaps of junk just to make folks pay (yet again) for more junk they *DO NOT WATCH* and *DO NOT WANT*.

Uncoupling the 'hits' on a music CD was considered 'heresy', yet it's made the folks who did it billions. The 'Pay TV' operators like HBO/Showtime et. al. are, with the advent of Netflix, dinosaurs. The real battle-lines today are between the internet transport companies (carrying VOD at 2cents per HD-hour) and the local distributors (Comcast) trying to erect a tollbooth to extract an additional $1 per HD-hour.

Once again, it's the differential between wholesale costs and the retail distributors. When it starts getting to 1:1000, then your business model is going to collapse as the consumers start to realize they're being 'ripped off'.


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## Stuart Sweet (Jun 19, 2006)

I agree with the basic thrust of the article... but I think this is not the year when it's going to happen. We who are tech-savvy tend to forget about the great mass of folks who are still watching TV much the same way as they did ten years ago, and have no wish to switch.


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## Doug Brott (Jul 12, 2006)

1948GG said:


> Once again, it's the differential between wholesale costs and the retail distributors. When it starts getting to 1:1000, then your business model is going to collapse as the consumers start to realize they're being 'ripped off'.


When people stop watching Pay TV (be it Comcast, DIRECTV, Netflix, whatever) .. Then pricing parity will be better.

The price of a good (TV in this case) is not based on how much it costs .. but how much people are willing to pay. 2011 seems worse than in the past, so maybe we really are closer to "the end" of killer prices, but recent history has shown that people in general just keep paying and keep watching.


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## 1948GG (Aug 4, 2007)

Stuart Sweet said:


> 2011 seems worse than in the past, so maybe we really are closer to "the end" of killer prices, but recent history has shown that people in general just keep paying and keep watching.


Despite the economy being much better here (we actually make things here that are selling rather well in the world market, and housing prices are nowhere near the collapse seen elsewhere), the percentage of folks 'cutting the cord' has been large; it might have something to do with the fact that BOTH our large telcos (Verizon and Qwest) decided to pull out, and there is no alternative (besides satellite) to the hated Comcast (state law prohibits any real competition). Then again, maybe it's that streak of Scandinavian frugality.

But a lot of it has to do with pure inertia. Why switch if it works okay. We see that with gas prices, there is a psychological tripping point out there, it was around $4-4.50 that folks seriously started to look to change their ways. Most folks want their locals, and a handful of other channels. Then the occasional sports subscription. The other 95% can go.

But since the retail distributors won't provide that, it takes a 'meeting of minds' to pull up and toss the whole thing, and go back to OTA. Unfortunately, for most folks, reception beyond 30 miles of the digital transmitters is hit and miss, so they're stuck, and decent internet service is also mostly miss and not hit.

But the right mix, as things improve, will hit that tripping point.


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## paulh (Mar 17, 2003)

It will be interesting. Land line phone rates dropped as more users switched to cell. Cell minutes dropped as data services were added. Data plans have somewhat reduced...

I keep hearing more and more people dropping conventional TV delivery for OTA and Netflix/Roku, much like the early land line to phone conversions...

The question is not if communications costs will drop, the question is what will your share of the pie change to. (Comparing land line only bills to phone/cell/internet/TV/subscriptions(netflix). I'd say overall bills have gone up, but a lot more options and convenience)


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## hdtvfan0001 (Jul 28, 2004)

paulh said:


> It will be interesting. Land line phone rates dropped as more users switched to cell. Cell minutes dropped as data services were added. Data plans have somewhat reduced...
> 
> I keep hearing more and more people dropping conventional TV delivery for OTA and Netflix/Roku, much like the early land line to phone conversions...
> 
> The question is not if communications costs will drop, the question is what will your share of the pie change to. (Comparing land line only bills to phone/cell/internet/TV/subscriptions(netflix). I'd say overall bills have gone up, but a lot more options and convenience)


The irony of more adoption of broadband to deliver new or expanded services is that there will be less of a pie to eat for each user, unless massive changes occur, both in pricing and capacity.


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## kmcnamara (Jan 30, 2004)

These kinds of "online" TV distribution models are going to be problematic if the trend toward capped bandwidth continues. Right now I have unlimited bandwidth on Time Warner/Roadrunner cable. I never really think about how much I'm consuming so I'll watch however much Netflix instant watch as I want to. That will change for me if Time Warner tells me I only have 5GB/month to use. I won't be paying Netflix the same price I pay now to get fewer movies, I promise you.


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## Doug Brott (Jul 12, 2006)

That's just it .. If enough people migrate to the "free" stuff .. that "free" stuff will become Pay TV, too. $0/month is about as likely as $1000/month.


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## rayik (Mar 30, 2009)

fornold said:


> The problem with all these types of articles is that they assume that people have adequate Internet connections, which unfortunately is not the case for many.
> 
> I can't get one adequate to stream one show, let alone multiple shows that I can watch now using DirecTV.


Same here. Otherwise I would have already cut the cord and gome OTA / internet streaming.


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## tulanejosh (May 23, 2008)

this topic is far more complex than simple supply and demand. Net neutrality is going to play a HUGE role here, and in case you haven't noticed, that debate is going rather poorly for companies like Netflix and Hulu. 

Additioally - and someone touched this earlier - but broadband is another huge issue. Not just access to adequate speeds but data caps. ISPs are no longer interested in providing you with an all you can eat connection for $40/month. To watch a similar amount of programming in HD that i watch now, using conservative data estimates, I'd be looking at $100+ just for internet in addition to any a la carte channel or program pricing. That sounds suspiciously similar to what i pay for Directv. 

I live in Austin - a very tech savy city and one of the centers of the tech industry - and even here Time Warner has very recently tried to implement monthly caps of 40gb downstream, with a $1.50/gb overage fee. That's not the exception - its going to be the norm, and is the norm already in many countries around the world (Canada, Australia, parts of Europe). 40 gb a month is not enough to supply the average family with enough data to cut the tv cord. Nor is 250. 

I also challenge someone to show me an existing server farm capable of streaming HD video to 8,000,000 people simultaneously. 8,000,000 is the number of people that watch a mildly popular show on a tuesday on network tv. I don't even want to talk about the superbowl or other high profile sporting events that dwarf that number.

And even if it were technically feasible - there are a huge array of media, advertising and creative forces that are pretty happy with the current model and very invested in keeping it going. They're going to be a pretty difficult group to overcome, and let's be realistic here - no one is going to cut tv out of their lives in 2011 because its not offered a la carte. Until people are willing to actually do that, you won't see any change.


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## sunking (Feb 17, 2004)

Live TV is perfect for the internet using multicast streaming. It's what FIOS/Uverse/mlb.tv/most actual internet radio/etc use.


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## Stuart Sweet (Jun 19, 2006)

After some consideration, I have decided that this topic deserves to be in the TV Show Talk forum as it is not DIRECTV-specific.


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## Doug Brott (Jul 12, 2006)

sunking said:


> Live TV is perfect for the internet using multicast streaming. It's what FIOS/Uverse/mlb.tv/most actual internet radio/etc use.


This might help on the "out" side of things, but the "in" side of things is still hit or miss. Not everyone has mongo Internet speeds.


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## 1948GG (Aug 4, 2007)

tulanejosh said:


> this topic is far more complex than simple supply and demand. Net neutrality is going to play a HUGE role here, and in case you haven't noticed, that debate is going rather poorly for companies like Netflix and Hulu.
> 
> Additioally - and someone touched this earlier - but broadband is another huge issue. Not just access to adequate speeds but data caps. ISPs are no longer interested in providing you with an all you can eat connection for $40/month.


THE problem is that most folks (and yes, that includes the FCC commissioners) don't have a frame of reference. We all generally know what the cost of gas is, because we can easily look up the cost of a barrel of oil (although most Americans don't even know that there is 55 gallons in a barrel), and then what the pump cost per gallon is. Of course, there is the transportation and refining cost to take that $80/barrel (or $1.45/gallon) of crude to the actual gasoline, and since the average cost today is just over $3/gallon, that gives us a 2:1 ratio. Not bad!

But, virtually nobody can tell you what the bulk cost of broadband internet is. I know, because I spent the better part of the last 35 years designing and building the national and international digital backbone, and know how to look up the current connection charges and such.

Example: Comcast currently sells internet access to consumers at around $50 for 10Mb/s link (on average). They buy OC48/2.4Gb/s links at around $200/month each. So, they pay $200 wholesale for something they resell to 240 customers at $50/ea, or $12,000/month (that with no 'caps'). A ratio of 60:1. Yes, is does cost them a bit in infrastructure to transport it that 'last mile', but *60 times* the basic cost!?!?!!

Now you know why the managers of those companies are living in multi-million dollar homes driving $250K automobiles.

If the oil companies (right there at the bottom of the list of most hated companies in America along with the cablecos) had such a price differential, a gallon of gas would cost $90. Have fun with selling that!

The internet is so cheap, and getting cheaper, at the same time it's getting more expensive to the actual user. Somethings wrong with that picture, and sooner or later, folks will realize it. Maybe.


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## sunking (Feb 17, 2004)

Doug Brott said:


> This might help on the "out" side of things, but the "in" side of things is still hit or miss. Not everyone has mongo Internet speeds.


Obviously, however that's not what was being addressed. Let's put it this way, if every Directv subscriber who *could* successfully stream content (either through current or an available internet upgrade) were to jump ship Directv would go out of business. Of course this won't happen, however things are advancing so at some point in the future all of the TV services will have to divy up for another piece of pie. This is what the thread is really about, there will soon be another viable pie piece that all providers will have to deal with.

Of course this affects cable tv as well, but maybe not quite as much so because many of these people would be relying on their cable provider for their internet access. One of the reasons I may get rid of Directv is because I'm tired of my slow 1.5M DSL and a cable tv/inet/phone bundle would save me money that right now Directv isn't justifying.


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## hdtvfan0001 (Jul 28, 2004)

Doug Brott said:


> This might help on the "out" side of things, but the "in" side of things is still hit or miss. Not everyone has mongo Internet speeds.


That's the key underlying issue.

Until that nut is cracked as a mainstream-available and affordable-source channel for video/data transfer...its a niche solution.


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## phrelin (Jan 18, 2007)

Stuart Sweet said:


> I agree with the basic thrust of the article... but I think this is not the year when it's going to happen. We who are tech-savvy tend to forget about the great mass of folks who are still watching TV much the same way as they did ten years ago, and have no wish to switch.


Yes, the article is out of touch with the 40 million folks who regularly, like clockwork, appear in the Nielsen's watching broadcast, cable, and premium channels.

Nonetheless, the squeeze on the locals that we are seeing in the form of retrans disputes is based in a reality. _Advertising Age_ yesterday ran an article headlined *Local TV Stations Should Expect Revenue Slides* in 2011 which offers another perspective on the future:


> Flush with money from a bevy of heated political campaigns, TV-station owners likely let activity in 2010 make them forget about the savage downturns of 2009. If they were smart, however, they kept those harsh memories close at hand.
> 
> This year isn't likely to be as pleasant as the last -- though it won't be a return to the harsh recession-tinged downturns. With the elections over, 2011 will likely see a 7.9% drop in local-TV revenue, according to a forecast from media consultant BIA/Kelsey....
> 
> TV stations are enjoying comparatively good times, particularly when drawn against late 2008 and much of 2009, when their main advertisers -- auto makers and car dealerships -- pulled back ad spending sharply. Spending on local-TV advertising fell 23.7% in 2009, according to Kantar Media, but rose 27.8% in the first nine months of 2010.


While the multinational corporate economy is recovering, the American "consumer driven" economy is not. I have the feeling that by 2020 the combination of a weak consumer economy plus the gradual gains in streaming will force a restructuring in the business.

But, what I notice in discussions here and around the web is that there are many who are combining web streaming with OTA recording which keeps their costs down for broadcast network content. That approach might have some impact though many of us can't get OTA.


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## jaywdetroit (Sep 21, 2006)

tulanejosh said:


> Until people are willing to actually do that, you won't see any change.


I really think it comes down to one thing, and that is how much per month am I spending to watch EVERYTHING I want to watch.

This is indeed a complex topic, but I think the reason there is some truth to the model coming crashing down is the MASS numbers. If you look at the top rated programs of all time, most of them are from the late 70s and early 80s when EVERYONE was watching the old model.

Now you have such fragmentation, the old model cannot be sustained because despite the fact there are still people using it, enough people have left it to drive down advertising revenue.

There are many more hands in the pot now. More importantly, the younger college generation is going to have an expectation for inexpensive or free content.

Its hard to envision what the model will look like in 10 or 15 years, but my best guess of what it will be vs. what it should be is this:

*Will be:* High Bandwidth Inet will be expensive, low bandwidth (no video) will be virtually free. Networks take over the OTA stations, everything will get delivered over IP. You'll have very specific options of what you can buy off the internet, and you'll be able to chose the version WITH advertising, or pay a significant premium, and get no advertising. Pro leagues will expand their current Network offering and become your goto source for that content, and it will cost you.

*Utopia version:* OTA rebounds and comes back from the dead. It becomes the primary source for Local Programming/and local and national news. People use their DVRs for this. ISP competition drives down Broadband costs and most of the population has affordable fast broadband. People's media interests become so varied, that the only non-sports/non news programming available are TV shows you can subscribe to, unless the provider comes up with a way to force you to watch the advertising. 1 million people want to watch Caprica? They can pay for it. Because SyFy isn't around anymore. I believe that would work out to about 4 or 5 bucks an episode with no advertising. 
Of course, I see the NFL/MLB/NBA networks completely taking over broadcasting their sport, and could even see them setting up an OTA tower in every major market, then simulcasting over the Internet. (That way you off load the network bandwidth for big games.) You want NFL for the year? Just Green Bay? $80.00 The whole league? $400.00. Etc.


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## sunking (Feb 17, 2004)

jaywdetroit said:


> *Utopia version:* OTA rebounds and comes back from the dead. It becomes the primary source for Local Programming/and local and national news. People use their DVRs for this. ISP competition drives down Broadband costs and most of the population has affordable fast broadband. People's media interests become so varied, that the only non-sports/non news programming available are TV shows you can subscribe to, unless the provider comes up with a way to force you to watch the advertising. 1 million people want to watch Caprica? They can pay for it. Because SyFy isn't around anymore. I believe that would work out to about 4 or 5 bucks an episode with no advertising.
> Of course, I see the NFL/MLB/NBA networks completely taking over broadcasting their sport, and could even see them setting up an OTA tower in every major market, then simulcasting over the Internet. (That way you off load the network bandwidth for big games.) You want NFL for the year? Just Green Bay? $80.00 The whole league? $400.00. Etc.


mlb.tv is doing this today. And technology has made the bandwidth used manageable for anyone better than DSL. I can only speak for baseball as it's all I care about. There are an awful lot of Yankee fans paying for the entire extra innings package when what they really want is one team for ~$100 a season. The internet provides this and will only be getting better at doing so more seamlessly. These are people Directv currently relies on to over buy a package to use a little piece of it.


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## Stewart Vernon (Jan 7, 2005)

Doug Brott said:


> That's just it .. If enough people migrate to the "free" stuff .. that "free" stuff will become Pay TV, too. $0/month is about as likely as $1000/month.


That's what a lot of people seem to keep forgetting.

The free stuff is free to entice you to go there... IF everyone goes there, you can be assured it will not stay free forever.

Anyone remember the internet company NetZero? Several years ago they used to run commercials about how they "believe the internet should be free"... but I'm pretty sure they started charging for it!

During the "browser-wars"... people forget that Netscape and Microsoft were giving away the browser to get marketshare... while charging for their server-side software... and optimizing their server-side with their own browsers... with the ultimate goal being to dominate the server-side market, then the browser market... and then they could begin charging for the browsers too!

The reason why we still have free Web browsers... is because nobody was able to substantially dominate the server-side enough to push the other side completely out of business... thanks in part to free server-side software based around Linux operating systems.

IF everyone drops cable/satellite and goes to free streaming... rest-assured that those companies will start charging OR all of the content will go away in a hurry.


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## deweydm (Sep 5, 2007)

It's been about 30 years since our family first got cable. Been using OTA and netflix alone for only a month or two. And I'd probably have ESPN on right now or the wife might have HGTV on if we still had cable or satellite, while also browsing the internet, but instead we have local programming on via OTA. But I don't think we miss the cable programming much. On the weekends, we're enjoying more movies now, via redbox (newer titles on blu ray) and netflix (streaming and DVD's in the mail), then we did when we still had directv. And OTA has been good enough for other programming. Most of it in good HD too. 

If we're early adopters of a trend gathering momentum, I think that'd be a pretty good thing for local networks, a bad thing for ESPN and other cable only networks. The notion that people would pay for TV used to be the suspect one. Now the notion that they won't is. Pretty interesting. 

Would be surprised if 2011 was any kind of tipping point yet, but it'll be fun to see what happens longer term. If I was ESPN, et. al., I'd make it easier to get that content on line sooner rather than later though. That might accelerate the "cord cutting" trend, if there really is one, but if they don't, and there really is such a burgeoning trend despite the lack of easy access to ESPN and other cable nets programming online, a lot more people might just realize they can live without them as well. Like those of us in our late thirties and older all used to.


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## Mark Holtz (Mar 23, 2002)

It all comes down to cost/benefit ratio.

What is the one thing that will keep people with cable/satellite TV? That's sports. Most of the sports programming has moved to regional $ports networks which cost the most on a per-subscriber basis for basic cable. And sports, when played back later, isn't as interesting as when it is broadcast live.

However, what will drive people away is the cost of television and how much of it is being watched. Most television series nowadays, at the end of the season, have the entire season available on disc. With all the annoyances of watching regular TV, why pay for it?


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## tulanejosh (May 23, 2008)

subscriber growth trends - especially among the satellite companies, simply don't support this hypothesis.


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## Stewart Vernon (Jan 7, 2005)

The reason those TV shows are available for free streaming online and to sell on DVD... are because they are paid for by advertising or subscriber costs.

If people stopped paying... they would stop producing.

It's really pretty simple.

Some pricing may seem out of whack... but then again, as long as people are paying and wanting more quality in their TV... then expect to keep paying more.

I'm also reminded of how many people want things to be free BUT want to be paid to work. IF everyone worked for free, then everything could be available for free too!


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## cableguy902 (Jan 10, 2011)

I can totally relate to the ridiculous price increase at the time when they are losing customers. I just suspended the account and was debating canceling altogether when I got this mass email advising of another price hike. Why much do they expect people pay for the TV? You have recession on one hand and new media and TV substitutes coming fast on the other. Increasing the prince seems like a counterproductive move for them.


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## chum76 (Jun 4, 2010)

I dont miss cable at all. I liked the home and garden channel and food network, but the PBS CREATE channel has much better programming commercial free. Infact PBS has alot of good programming I never watched before when I had cable. As more people move OTA the programming should get better as well.


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## WestDC (Feb 9, 2008)

DO or Die Does not have anything to do with it!

Bandwidth is the new montra!

All ISP's will be putting meters on there bandwitdh --must like the electric company & gas company has done for years. Remember that is the main reason for no solar power because you can not put a meter on it :lol:

ALL ISPS WILL HAVE A METER ON BANDWIDTH -don't think so==just wait:eek2:

It's comming bought to you by Slingbox & Netfilx & roku and many more, just wait it will becomming to your house very soon $5 a gallon gas will be!

[Redacted]


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## Doug Brott (Jul 12, 2006)

Yup .. Bandwidth throttles will happen. "Free" doesn't mean free in the long run. Doing it now it's really attractive and you will get your best bang for the buck. OTA will work as long as it still works, and that will remain free .. Not everyone can get OTA, though.

Also, if you want programming beyond that, it will get more pricey or less HD .. Now that we've all got spiffy new HD sets, why go back to a 10" window on the computer screen to watch it?


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## 1948GG (Aug 4, 2007)

WestDC said:


> All ISP's will be putting meters on there bandwitdh --must like the electric company & gas company has done for years. Remember that is the main reason for no solar power because you can not put a meter on it :lol:
> 
> ALL ISPS WILL HAVE A METER ON BANDWIDTH -don't think so==just wait:eek2:
> 
> I


Uh... your thought process is suspect; ALL electric utilities in the US are required to buy surplus electric power (generated by whatever, including solar power) from the 'consumer', at federally mandated prices (research FERC), running the 'meter' backwards. Very popular in the 'sunny' states (like California) but you'd be surprised at how many folks do it up in my area, despite it being very cloudy/rainy 9 months + out of the year.

A couple of items to think about. First, the amount of installed fiber between major (and minor) cities in the US is huge. In fact, about 98% of it is 'unlit', or 'dark' in industry parlance. The cost of the terminal equipment to 'lite' that fiber has been dropping like a rock for the past two decades, and even though a lot of that fiber is, by today's standards, 'crude', things haven't stood still in the laboratory.

Where it was common to have light/signal repeaters/regenerators at 30-35 mile intervals some 30 years ago (with the best fiber made in that era), that same fiber can carry 1000 times as many bits with repeaters no closer than 500 miles today. All this on pretty crude fiber that nobody would actually install... today. But the cost and effort to 'plant' it was paid for years and years ago.

The stumbling block is still the 'last mile' though. BUT... having started out as a microwave engineer 40 years ago, the some basics of wireless transmission no longer apply. Remember analog tv stations? Why, for instance, you couldn't have a channel 3 and 4, or 7 and 8, in the same city? Interference with channels that close together.

But digital TV? Right in my city, we have a full-power digital station on channel 38 (ABC) and another on 39 (CBS). BTW, the transmission towers are less than one city block apart. Hmm. That was one of the big reasons pushing digital transition, the ability to have many more RF channels, co-existing right next to each other WITHOUT interference (even though the spectrum allocated to television was reduced by some 10% overall).

Now, the biggest thing the FCC and companies are ramping up for is 'white spaces'. All that spectrum, sitting 'unused', but there originally to prevent (analog) stations from interfering with each other. That spectrum is about 10 times at large (spectrum wise) as all the actual 'usable' bits that are being used for actual analog transmission today (but being analog, is much less efficient than digital). Put them to use, and it makes WiMax look like a slug next to a Ferrari; a LOT of Ferrari's.

Right now, the incumbent operators (tv, cable, telco) are trying to put as many roadblocks into it's path, and we may end up with the nonsense of classifying the internet as a 'message' service, like telegrams, that led us down the insane road we are right now with net neutrality (of course, that was done to 'protect' those in power at the time).

But I think it will out, and we'll have a true 'web' of wireless transmissions that don't particularly discriminate against or for rural vs. urban, high density vs. low. With any luck, we'll see the first large commercial implementation within 5 years.

Companies that look no farther than their next executive bonus checks will be on the bread lines.


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## SWORDFISH (Apr 16, 2007)

1948GG said:


> ........... We all generally know what the cost of gas is, because we can easily look up the cost of a barrel of oil (*although most Americans don't even know that there is 55 gallons in a barrel*), and then what the pump cost per gallon is. Of course, there is the transportation and refining cost to take that $80/barrel (or $1.45/gallon) of crude to the actual gasoline, and since the average cost today is just over $3/gallon, that gives us a 2:1 ratio. Not bad!..................


Count yourself among "most Americans". There are 42 gallons in an American barrel of crude oil. Although crude is rarely transported in barrels anymore, after refining, each barrel yields ~20 gallons of gasoline + other petroleum products.

Oil barrels are different than standard 55 gallon steel drums.

SF


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## tkrandall (Oct 3, 2003)

1948GG: You seem to be saying, based on your experience and credentials in this realm, that the wholesale infrastructure is already there, and the prospect of say 200 million people all individually and simultaneously streaming HD content via IP protocols over the internet is not problematic in terms of the "internet transporter company" infrastructure. (And also, presumably, content producer/uploader capacities as well.) Rather, the problem and sole hurdle to us all being 100% all IP all the time is solely in the solving the "last mile" delivery issues so that we all have 50 Mb/s (or whatever) at our fingertips no matter where we go. 

Is the the vision of the near future? So, it's Super Bowl Sunday and there would be maybe 200 million display devices in maybe 100 million homes are all receiving an individualized IP stream of a single broadcast? Plus all the 
"contrarians" watching something else than the Super Bowl.

At a minimum, that hardly seems efficient or frugal in terms of allocation of the bandwidth resources. Even if we all get super internet speeds, it will be far from free. I think that "last mile" element is where the revenue will continue to be commanded. As Doug noted, if everyone migrates to the "free space", it will cease to be free. What will be interesting is the prospect of the consumer being able to more freely chose which content they want to have available (and hence pay for/subscribe to). But the ESPNs of the world are not easily going to give up any of the ever increasing revenues they enjoy today.


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## 1948GG (Aug 4, 2007)

SWORDFISH said:


> Count yourself among "most Americans". There are 42 gallons in an American barrel of crude oil. Although crude is rarely transported in barrels anymore, after refining, each barrel yields ~20 gallons of gasoline + other petroleum products.
> 
> Oil barrels are different than standard 55 gallon steel drums.
> 
> SF


When I was writing that, a wondered how long it would take before someone actually tripped across that 'error'; it took just about a full day, but unfortunately the gods of the board moved this thread way, way, off to the boonies, so my little 'test' really didn't get the eyeballs it should have.

But the basic math is still approximately correct, just off by 25%, but the idea that internet feeds are wildly overpriced (to the end user) vr. something everybody is acutely reminded of one or more time a week (filling up the tank), is still there. The site 'Stop The Cap' has daily stories that make one hurl.

http://stopthecap.com/

You get the today's prize for the catch!


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## 1948GG (Aug 4, 2007)

tkrandall said:


> As Doug noted, if everyone migrates to the "free space", it will cease to be free. .


Only from the standpoint that there are an endless supply of Bernie Madoff's out there willing to take something 'free' and put a pricetag on it.

One of my 'though experiments' I used to do every few months, usually after reading one of the articles listing new system turnups or the like, is to figure "What would happen if everyone in (insert country or locality here, X) went off-hook and dialed 'Y'. Irrespective that the switch ports on the local exchanges would seize up (a problem with the circuit switched network...).

The existing bandwidth out there simply for standard, 64kbp/s voice circuits, is already jaw dropping. Convert those into VOIP or your example of everyone 'tuning in' the Superbowl, and things get interesting, but examples like that generally don't figure the effect of data multicasting.

There have been some commercial systems, using licensed bandwidth, take a look at Etheric Networks in SF, there were at least three other previous attempts to do the same thing in years past, all failed pretty much, but this is working rather well. http://www.etheric.net/

From whatever technology, or lack thereof, eventually it will 'push out'. Verizon didn't 'invent' FIOS (GTE did), and a lot of the way they went about it was 'ass-backwards'. I was on the vendor support team at GTE in north Texas (GTE being headquartered in Los Colinas/Irving before the Verizon buyout), and they had two 'test beds' looking at ways to do fiber to the home. There are several municipal built/run FTTH systems in the US, most press has been on Lafayette, LA (yep, I lived there once way back when), and Chattanooga, TN; there's a third one up in North Carolina, but my brain is blanking on it.

If the local cable/telcos would stop buying off state legislatures to stop such developments, folks would find out it isn't very expensive, and they would get run out of town. Here in Washington State, we have the perfect 'base' infrastructure to do it, as we are a public power state (public utility districts), where only the very largest cities have a mix of public/private electric providers.

But years back, a certain political party got into power (you can guess who) and they passed a law prohibiting the PUD's from getting into broadband. The only problem was, one city (Tacoma, WA) had it's project well on it's way to completion, and so they enjoy FTTH throughout the city and have run what was ATT/Broadband (now of course Comcast) virtually out of town.

Verizon was about to do the same thing where I live in Snohomish County (ex-GTE area), but got cold feet and sold off to Frontier late last year. They just announced the price hikes of $30-50/month on FIOS tv, and are rapidly trying to convert folks to (wait, here it comes....), DirecTV with deals like 'free for a year'. Obviously, they don't really want to be in the FTTH business.

All my life, fiber to the home was the 'holy grail' of the telcos, Verizon finally ponied up the seed money and then proceeded to screw it into the ground. At GTE we had costings down around <$400 per home passed (with 1996 technology and costs!), big V had a big problem getting it down lower than $5K per home passed.

Having done some engineering work for 'Bell Atlantic' in the 90's (I generally refuse to think of them as anything else), and the percentage of either idiots or organized crime was rampant, may explain things a bit. But look at the muni projects. Lafayette has only been operating for a handful of years, and is already gone past the payoff point. Chattanooga is further behind, but is going gangbusters.

The thing is, that the fact that it is political manoeuvrings that is holding things back, nothing whatsoever to do with either technical or even funding/investment shortcomings. It did take AT&T holding back national/international fiber some 30 years, but eventually the courts and Wall St. broke that logjam. Getting states to rid themselves of the barriers to additional competition (that protect the telcos/cablecos) will be a long hard fight; but there are technologies available today that if given the federal go ahead, will put these folks where they belong.

Jail or the bread line. Their choice, or they can have a 'revelation' and actually produce a competing product. Since they've had some 50+ years of not doing so, I think they'll stay with the political shenanigans.


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## Doug Brott (Jul 12, 2006)

1948GG said:


> Only from the standpoint that there are an endless supply of Bernie Madoff's out there willing to take something 'free' and put a pricetag on it.


What Bernie did was illegal .. We can all simply agree on that.

This "free" you speak of is how much it costs to create the service. Sure, it's not technically free, but essentially free based on the margins that will be collected via the "pricetag."

You've got to remember that price is not set by the cost of a good .. price is set by how much someone is willing to pay for the good. If (in this case) it costs $.01 to create and people are willing to pay $60 for it, well .. lucky for the guy that owns the facilities that "create" this good.

So again, this "free" programming on the Internet will not forever be free. It's plain and simple. If folks move away from Comcast, DIRECTV, etc. in droves .. There will be a way to charge for it and metered bandwidth is one of the most simple solutions to that problem.


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## Stewart Vernon (Jan 7, 2005)

Doug Brott said:


> So again, this "free" programming on the Internet will not forever be free. It's plain and simple. If folks move away from Comcast, DIRECTV, etc. in droves .. There will be a way to charge for it and metered bandwidth is one of the most simple solutions to that problem.


Exactly.

In fact... that there is any way people make money off the internet is already proof of this!

The original internet was not intended for for-profit use... Even when people first started jumping onto the internet (mainly when the WWW started becoming popular) there were lots of people saying there was no way to make money on the internet.

But... the more people wanted to use the Web... the more other people realized that there was an untapped market... and began charging for things on the Web.

There is always a tipping point... where more people want it than don't want it... and that's when the charging will start. I don't understand why more people don't grasp that concept.


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## 1948GG (Aug 4, 2007)

Doug Brott said:


> metered bandwidth is one of the most simple solutions to that problem.


But, that payment is NOT going to either the originator OR the original distributor (both of whom have legal rights to charge whatever).

They are simply 'gatekeepers'; say you want to fill your tank up with gas. You know that price, and what it'll cost to do it at the station you want to go to. But there's an armed guard at the entrance, who demands x dollars to pull into that station, and then a percentage of what you pay for the gas.

That's what organized crime does. There's a RICO act prohibiting such activities, and if the Justice Dept. had a set, they'd go after them in a minute. It in no way, shape, or form is it a legal way to do 'business'. It's a 'skim' operation, pure and simple.

Verizon announced today they're not going to go along with the extremely watered down 'net neutrality' rules. The FCC need to 'bite the bullet' and roll back the Bush era nonsense of classifying the internet as a telegram service.


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## Gloria_Chavez (Aug 11, 2008)

Stewart Vernon said:


> The reason those TV shows are available for free streaming online and to sell on DVD... are because they are paid for by advertising or subscriber costs.
> 
> If people stopped paying... they would stop producing.
> 
> ...


Some Hulu programs charge as much as 70 dollars per CPM, versus about 25 dollars on network TV for the same program. And while about two years ago you saw far fewer ads on Hulu compared to TV, it's about the same today.

4Q10 subscriber numbers come out in about a month. I believe that we'll the third consecutive decline of PayTV subs.


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## junzi (Jan 26, 2011)

1948GG said:


> But, that payment is NOT going to either the originator OR the original distributor (both of whom have legal rights to charge whatever)...


Sorry for the interruption...1948GG, I tried contacting you through the DBS message service, but your box is full.

I started a thread in choosing the right media share player to access my NAS system. You have some excellent posts regarding this. However, I have not seen any updates or comments with your system in the past few months, or comments regarding the vast array of media share players available. I am interested to know how well the Popcorn Hour player is working for you, and if you might suggest other extenders, such as the NeoTV 550, WD TV, Hauppauge MediaMVR-HD, etc. Some members have reported having problems with Popcorn Hour. Please see my thread here. Can you quickly and easily navigate folders and subfolders on your NAS? Have you tried any other media share products that you like? The community and I are quit interested in any knowledge you can share. Thank you. -Junzi


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