# Cutting the Cord debate losing steam?



## Satelliteracer (Dec 6, 2006)

http://adage.com/article/mediaworks/television-consumers-keen-cutting-cord/227014/


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## bonscott87 (Jan 21, 2003)

It's only temporary and mostly due to Hollywood kicking and screaming about it like the music industry did. Comcast buying NBC Universal will continue that trend if they pull all their stuff off Hulu. Also sports is the big hold up for many. I personally had to make the decision if $80 a month was worth it just for the Red Wings. In the end I decided no, it wasn't worth it.

But it's only a short term trend losing steam. Eventually IPTV will be the main way people get TV. It won't be right away...5-7 yrs from now I think you'll find a good chunk of people will have "cut the cord".


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## sigma1914 (Sep 5, 2006)

bonscott87 said:


> ...
> 
> But it's only a short term trend losing steam. Eventually IPTV will be the main way people get TV. It won't be right away...5-7 yrs from now I think you'll find a good chunk of people will have "cut the cord".


I don't agree. By then, there'll be more bandwidth caps on ISPs. Many families like just having the tv on for hours and that's going to suck up cap room.


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## hilmar2k (Mar 18, 2007)

sigma1914 said:


> I don't agree. By then, there'll be more bandwidth caps on ISPs. Many families like just having the tv on for hours and that's going to suck up cap room.


I agree with this wholeheartedly. Since ISPs are also TV providers, they are going to do whatever possible to prevent the loss of the TV revenue.


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## bonscott87 (Jan 21, 2003)

sigma1914 said:


> I don't agree. By then, there'll be more bandwidth caps on ISPs. Many families like just having the tv on for hours and that's going to suck up cap room.


Maybe. But people are changing the way they watch TV. IPTV is just like having a DVR. The TV isn't just "on" to be on. You just watch what you want to watch and that's it. TV hasn't been just on in our household for 12 years now. Now the general public is moving in that direction as well.

Besides, once people figure out they can get dozens of channels for free with an OTA antenna, most in HD, that changes thing too. Or they can get all the local networks plus a few others all free via clear QAM from their cable Internet. Gotta educate them and they will go.

I don't know too many people today under the age of 25 that even watch conventional TV anymore. Most watch TV on their computer or cell phone.

It'll take some time but IPTV will prevail for sure.


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## bonscott87 (Jan 21, 2003)

hilmar2k said:


> I agree with this wholeheartedly. Since ISPs are also TV providers, they are going to do whatever possible to prevent the loss of the TV revenue.


Well, note that IPTV doesn't have to mean "free". Cable companies will try and get that money out of you via Internet fees instead.


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## tonyd79 (Jul 24, 2006)

Cable companies like fios will be using iptv technology but I really dont see a major break from providers like comcast, Verizon, dish, directv, timewarner, etc. The technology changes but the partners tend to stay the same. And the vast majority of American consumers prefer one stop shopping. That is why walmart and target sell groceries and supermarkets sell DVDs and simple houseware repair kits.


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## davring (Jan 13, 2007)

sigma1914 said:


> I don't agree. By then, there'll be more bandwidth caps on ISPs. Many families like just having the tv on for hours and that's going to suck up cap room.


I have to concur, as demand on the ISP's increase so will the prices. At some point the Pay TV providers and IPTV will be competitive.


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## Alan Gordon (Jun 7, 2004)

If given a choice, I'd take DirecTV (yeah, I'm still bummed by the lack of certain channels)...

... that being said, monetary issues come into play.

DirecTV (like every other provider) continues to raise rates (not solely blaming the providers), and unless there's another bump in minimum wage soon (doubtful), I don't expect to get another raise for at least another 10-20 years.

So... in the next 2-4 years, I may have to say goodbye to DirecTV... not because I would want to, but because I can no longer justify the expense.

I suspect there will be more people over the next few years facing similar points...

~Alan


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## susanandmark (Feb 15, 2007)

While I have no doubt that mainstream media will hold onto their traditional revenue model for as long as possible, and probably longer (see the precedent set by newspapers, magazines, et al), and I, personally, am amongst those who has no desire to watch TV alone on my computer vs on my big screen from the sofa, I also have "access" to a large cross section of college kids and, frankly, NONE of them watch TV in the traditional way. None of them have cable or sat or anything. Not one. They all have smart phones, laptops, Playstations (sometimes multiple gaming consoles, they're mostly guys) and HD flat screens, but not one has a cable bill, unless it's something included with their apartment rent. They use Netflix or Hulu or whatever to get what they want to watch and those with houses (rental) have antennas to get the HD sports they want. 

Resist all you want--and I think ISP bandwidth caps are just a speed bump delay towards the inevitable--but that is the future, like it or not. Heck I don't think any of them even use a DVR. They just stream the show they want to watch, when they want to. 

For 30-something, Mommy me, right now my online viewing has consisted of a few missed shows I caught up with online via Hulu or network websites and the very occasional use of our Slingbox (used about once per year), though I do watch several video podcasts regularly while working on my computer. Maybe it will be like texting, which I resisted for as long as I could, but now can't live without.


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## Sharkie_Fan (Sep 26, 2006)

bonscott87 said:


> It's only temporary and mostly due to Hollywood kicking and screaming about it like the music industry did. Comcast buying NBC Universal will continue that trend if they pull all their stuff off Hulu. *Also sports is the big hold up for many. I personally had to make the decision if $80 a month was worth it just for the Red Wings*. In the end I decided no, it wasn't worth it.
> 
> But it's only a short term trend losing steam. Eventually IPTV will be the main way people get TV. It won't be right away...5-7 yrs from now I think you'll find a good chunk of people will have "cut the cord".


I think if sports became readily available in some free (or cheap) scenario, more people would consider cutting the cord for sure. Aside from our networks (which I get OTA already) there are only a handful of pay TV channels we watch with any regularity. Most of those are available by some other method of delivery - be it Hulu or the broadcaster's website or whatever. The one that I cannot get anywhere (at least with any quality worth watching) is CSN-CA.

I haven't been able to bring myself to the decision that saving $80 (or $100) is worth losing the Sharks. Yet.

I've certainly considered it.

As to the first part of your post, I'm not sure that the trend away from cutting the cord is necessarily temporary. At least where I live, there are signs that the economy is picking up a little bit. _A very little bit_, but the local businesses that I deal with are beginning to trend that direction... and as that happens, fewer people will look to save money. It seems that much of our society is determined to spend whatever money they make without thought of putting money away "for a rainy day".


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## BattleScott (Aug 29, 2006)

Eventually (10 years or so?), I think (and hope) we'll see the carriers removed from the picture all together. As IPTV expands, the logical business manuever for any "channel" is to cut out the middle man and begin to accept "subscriptions" directly from the end users. You can already see the models in place with things like ESPN3.com and Hulu+. 

Just give me an IP enabled TV/Media PC and a good broadband service and I'll take care of the rest, thanks.


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## sigma1914 (Sep 5, 2006)

BattleScott said:


> Eventually (10 years or so?), I think (and hope) we'll see the carriers removed from the picture all together. As IPTV expands, the logical business manuever for any "channel" is to cut out the middle man and begin to accept "subscriptions" directly from the end users. You can already see the models in place with things like ESPN3.com and Hulu+.
> 
> Just give me an IP enabled TV/Media PC and a good broadband service and I'll take care of the rest, thanks.


The broadband service becomes the middle man, and they're going to want to cash in. Hulu+ is the middle man, too. I bet those will both cost more in the future.


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## tonyd79 (Jul 24, 2006)

"BattleScott" said:


> Eventually (10 years or so?), I think (and hope) we'll see the carriers removed from the picture all together. As IPTV expands, the logical business manuever for any "channel" is to cut out the middle man and begin to accept "subscriptions" directly from the end users. You can already see the models in place with things like ESPN3.com and Hulu+.
> 
> Just give me an IP enabled TV/Media PC and a good broadband service and I'll take care of the rest, thanks.


Your second example is in direct conflict to your thesis. Hulu *is* a provider.

And the history of c band shows a trend toward grouping and middlemen. As does almost every form of retail.


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## BattleScott (Aug 29, 2006)

sigma1914 said:


> The broadband service becomes the middle man, and they're going to want to cash in. Hulu+ is the middle man, too. I bet those will both cost more in the future.


If I didn't have to pay DirecTV, I could pay my current broadband provider, twice as much as I do today, and would still have plenty left over to subscribe to the the channels I wanted.


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## PCampbell (Nov 18, 2006)

Out of the big citys good high speed ISPs are not as common and I do not see that changing soon. Almost all ISPs have or are adding caps.

Uverse is IPTV but on there fiber to node not the internet, I think it would hard to have a HD streem to all homes that watched the super bowl. There a lot of people that are not tech savvy and are not good at hooking up a xbox or whatever to streem Netflix and they are sure not going to do it with a computer.
I think the change will be a take a long time. Live sports are the biggest stopper me.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> Your second example is in direct conflict to your thesis. Hulu *is* a provider.
> 
> And the history of c band shows a trend toward grouping and middlemen. As does almost every form of retail.


Hulu+ was offered as a model of direct subscription to a "source content library" as opposed to a scheduled delivery of content through a 3rd party programming provider.


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## tonyd79 (Jul 24, 2006)

"BattleScott" said:


> Hulu+ was offered as a model of direct subscription to a "source content library" as opposed to a scheduled delivery of content through a 3rd party programming provider.


May have been what you intended but not what you wrote.


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## ThomasM (Jul 20, 2007)

Heard it all before....

"Television is going to cause all the movie theaters to close"

"Cable is going cause all the over-the-air stations to shut down"

Blah blah blah!!


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> May have been what you intended but not what you wrote.


My post was about the concept of end users connecting directly to the source content providers for their programming as opposed to getting it through a conventional 3rd party supplier. Hulu+ is great example of this as they are directly comparable in what they provide to a traditional "TV Channel" or collection of them. I wrote what I intended.


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## BattleScott (Aug 29, 2006)

ThomasM said:


> Heard it all before....
> 
> "Television is going to cause all the movie theaters to close"
> 
> ...


I do remember speculation early on that "on-demand" services and NetFlix could be the end for the Video rental stores...


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## AttiTech (Feb 21, 2011)

The ISP cap is a load of crap. Only reason my speeds should be slowed down or stopped is if my neighbor is using the WiFi I unlocked for him. I should be charged more because my 360 is on XboxLive most all day, I stream missed tv episodes and check my email all at once.
I don't think the IPTV will take off really. I only see it staying at it's current positioning.


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## maartena (Nov 1, 2010)

bonscott87 said:


> It's only temporary and mostly due to Hollywood kicking and screaming about it like the music industry did. Comcast buying NBC Universal will continue that trend if they pull all their stuff off Hulu. Also sports is the big hold up for many. I personally had to make the decision if $80 a month was worth it just for the Red Wings. In the end I decided no, it wasn't worth it.
> 
> But it's only a short term trend losing steam. Eventually IPTV will be the main way people get TV. It won't be right away...5-7 yrs from now I think you'll find a good chunk of people will have "cut the cord".


I don't think so. I think IPTV will continue to be an addition to traditional cable and satellite providers, and in this case I will consider U-verse and FIOS as traditional providers as well, as they provide TV in a similar way.

Believe it or not, but MOST of the United States can't get more then 3 Mbps DSL, and it is the year 2011. I don't have reason to believe that this will change any time soon.

Furthermore, cutting the cord as a sports-lover isn't necessarily any cheaper, as you would have to purchase MLB.TV and/or its NHL/NFL/NBA alternatives. If you are a local sports team fan, and you follow say.... three local sports teams in the MLB, NBA and NHL, if you want to catch the games through IPTV, you'll end up paying just as much as subscribing to a satellite or cable type provider.

Then there are caps. AT&T U-Verse will be capped as of early may to 250 Gb a month. Concast is already capped at 250 Gb a month, and Time Warner Cable has tried to introduce it in 2009, but withdrew after customer complaints.... but has said it is "inevitable". With AT&T charging $10 for every 50 Gb over, it is very likely that people will keep a traditional provider.

And then we continue into multiple TV's. I don't have kids, but my neighbor has 4. Three teenagers still living at home (1 moved out), each with their own TV in their room. The TV total in the house is 5. They have DirecTV, so they can all watch TV together when they want to. If they were to use IPTV as their main form of television, can you guess how much bandwidth they would need for 5 HD stations at the same time? U-Verse "HD" which is significantly worse in quality as opposed to DirecTV is compressed to 6 Mbps per channel. A TimeWarner cable guy once told me their bandwidth is somewhere between 12 and 16 Mbps per HD channel, and given DirecTV quality is slightly better, I think that even with the best/newest compressing techniques, you will need about 15 Mbps in bandwidth for an HD channel of decent quality in 1080i.

So you would basically need a 100 Mbps pipe for a decent sized family, provided that people also want to do some actual internet stuff.

Netflix HD is about 5 Mbit/s, but is 720p and compressed. It looks pretty impressive, because at 720p 5 Mbit/s is more then plenty. Same with Hulu by the way, it is all 720p.

No I don't think a lot of people will have "cut the cord" in 5 to 7 years. Not even in 10 years I think.

The main reason so many people cut the cord over the last few years? Has nothing to do with wanting to cut the cord because they can get everything online, it has everything to do with the fact that from 2007 through 2010 (we are finally seeing growth again, yay!) the economy was in deep sh*t, and people that lost their jobs (or where one of two jobs were lost in a family) chose to dump cable, and go the OTA route for a while.

The fact that subscribers are climbing is not something temporarily. It's the economy getting back on their feet, and people taking on a subscription again now that they can afford to again.


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## maartena (Nov 1, 2010)

PCampbell said:


> Uverse is IPTV


In a technical sense, yes it is. But they are really no different then any other TV provider, and almost no one considers a move from cable to say.... u-Verse as "cutting the cord".


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## AttiTech (Feb 21, 2011)

maartena said:


> In a technical sense, yes it is. But they are really no different then any other TV provider, and almost no one considers a move from cable to say.... u-Verse as "cutting the cord".


Nope, everyone sees U-Verse as just as another provider, not a company making leaps and bounds in the IPTV field.


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## LarryFlowers (Sep 22, 2006)

As long as the ISP's & Telco's and other suppliers of bandwidth are allowed to run amuck and do whatever they want whenever they want... IPTV will forever be a "toy".

The United States has a HORRIBLE Internet service ranking, a mind boggling and embarasing 28th in the world and it will remain so as long as the "ladies of the evening" are in charge in Congress.


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## Xsabresx (Oct 8, 2007)

susanandmark said:


> While I have no doubt that mainstream media will hold onto their traditional revenue model for as long as possible, and probably longer (see the precedent set by newspapers, magazines, et al), and I, personally, am amongst those who has no desire to watch TV alone on my computer vs on my big screen from the sofa, I also have "access" to a large cross section of college kids and, frankly, NONE of them watch TV in the traditional way. None of them have cable or sat or anything. Not one. They all have smart phones, laptops, Playstations (sometimes multiple gaming consoles, they're mostly guys) and HD flat screens, but not one has a cable bill, unless it's something included with their apartment rent. They use Netflix or Hulu or whatever to get what they want to watch and those with houses (rental) have antennas to get the HD sports they want.


But you could connect your PC to your TV and watch online content from your sofa on your big screen. Even if your PC currently wont do it, you can ad a video card with that capability for less than $100.


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## Jeremy W (Jun 19, 2006)

Wow, Satelliteracer is now posting stuff directly from the PR people. Not that I ever expected a DirecTV employee to be free of bias, but this just seems like a little much.


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## sigma1914 (Sep 5, 2006)

Jeremy W said:


> Wow, Satelliteracer is now posting stuff directly from the PR people. Not that I ever expected a DirecTV employee to be free of bias, but this just seems like a little much.


 It's an article from AdAge...a magazine with news, analysis and data on marketing and media. How's it from PR or biased?


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## Jeremy W (Jun 19, 2006)

sigma1914 said:


> It's an article from AdAge...a magazine with news, analysis and data on marketing and media. How's it from PR or biased?


It appeared in AdAge, but it was provided by http://www.burrellesluce.com/


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## sigma1914 (Sep 5, 2006)

Jeremy W said:


> It appeared in AdAge, but it was provided by http://www.burrellesluce.com/


Where are you getting Burrelles Luce?
It was an article written by an AdAge writer. http://adage.com/article/mediaworks/television-consumers-keen-cutting-cord/227014/

The study was done by Adage and Ipsos Observer. So, how's it from PR in DirecTV and/or bias?


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## Jeremy W (Jun 19, 2006)

sigma1914 said:


> Where are you getting Burrelles Luce?


They are the company that found the article and gave it to DirecTV PR. The link provided by Satelliteracer is to their server, not AdAge.


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## sigma1914 (Sep 5, 2006)

Jeremy W said:


> They are the company that found the article and gave it to DirecTV PR. The link provided by Satelliteracer is to their server, not AdAge.


Anyone could have gotten the article on AdAge...I even posted the link. What's the big deal?


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## Jeremy W (Jun 19, 2006)

sigma1914 said:


> Anyone could have gotten the article on AdAge...I even posted the link. What's the big deal?


I already posted what I felt the big deal was. If you disagree, that's fine. Keep up the good fight. :nono2:


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## MattScahum (Oct 27, 2010)

The problem with IPTV is what a poster on page 1 stated: Not that many areas in the country, super large markets like NY, Chicago, Miami, LA, etc not included, have an internet option that will carry over 3mbps on a consistent basis. The exceptions in those areas being Comcast and some Time Warner customers, and even then with the bandwidth caps as well as the lack of every single household in the country having access to high speed internet at all most people won't do it.
I can speak not only for myself as a sports fan, but for my entire group of friends and families in my area, which I consider VERY rural in NE Ohio. I pay for the Road Runner from Time Warner and have no phone service and no TV through them. I am supposed to be getting somewhere in the area of a 10-12mbps DL speed and I don't think I have ever gotten over a 6mbps. Factor the fact that I play Xbox while online or that I am online while watching Tv(as I am currently) and I would want to know where exactly my bandwidth to download the shows I would want would come from.
I think the biggest reasons that college grads are not setting up traditional tv service are this:
1. They don't tend to live somewhere very long so most likely would have to cancel cable and rinse and repeat in a new area. Not the best solution.
2. Most college kids don't have what would be considered "great" credit and in most cases have little to no credit history to speak of. That rules satellite out unless you have some extra cash to throw around.
3. Why would they sign up for something that requires a monthly payment when most college grads have a hard time finding a job in this current economy. I have a 4 yr degree in Business Administration that I have had since I was 23. I'm 26 now and still can't find work. I take what I can get and if I didn't get my employee acct with D* and my fiancee didn't make a steady salary, we probably wouldn't have tv either. 
I think the trend of cutting the cord is just that. A trend. When more and more people start flocking to IPTV, the prices will start to climb. When cost for the services, plus the cost of the extra internet that you will be paying for by being over the cap is totalled you most likely would save money on a pay tv service. Will that be the case for everyone? Absolutely not. Will the masses flock to IPTV? Not a chance.


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## coolman302003 (Jun 2, 2008)

I sure hope Netflix in the next few years doesn't start adding unskippable commercials and a giant logo bug into there streaming TV Shows/Movies.


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## bonscott87 (Jan 21, 2003)

MattScahum said:


> I think the biggest reasons that college grads are not setting up traditional tv service are this:
> 1. They don't tend to live somewhere very long so most likely would have to cancel cable and rinse and repeat in a new area. Not the best solution.
> 2. Most college kids don't have what would be considered "great" credit and in most cases have little to no credit history to speak of. That rules satellite out unless you have some extra cash to throw around.


That certainly never stopped me in college and all my broke college student friends from having cable, with HBO and Showtime no less. I didn't know anyone back then that didn't have cable. Then again there wasn't even an Internet beyond Gopher and Usenet via telnet on mainframes and there was no satellite TV either beyond the old 12 foot C band dishes so not many choices beyond cable.

Today the college kids have choices and that includes being able to watch all their shows without having cable or sat.

I myself may be over 40 but I don't have cable/sat either. Why when I can get it all for free or next to nothing via an HTPC connected to my big screen.


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## susanandmark (Feb 15, 2007)

MattScahum said:


> I think the biggest reasons that college grads are not setting up traditional tv service are this:
> 1. They don't tend to live somewhere very long so most likely would have to cancel cable and rinse and repeat in a new area. Not the best solution.
> 2. Most college kids don't have what would be considered "great" credit and in most cases have little to no credit history to speak of. That rules satellite out unless you have some extra cash to throw around.
> 3. Why would they sign up for something that requires a monthly payment when most college grads have a hard time finding a job in this current economy. I have a 4 yr degree in Business Administration that I have had since I was 23. I'm 26 now and still can't find work. I take what I can get and if I didn't get my employee acct with D* and my fiancee didn't make a steady salary, we probably wouldn't have tv either.


The college kids I see are mostly athletes on full scholarships. Money is less of an issue. Several rent houses nicer than the one we own and 99% drive cars we could never afford in our lifetimes. (The number of parents who buy their kids cars after they get scholarships--really, really nice cars--is another trend to look into.)

It's not money, it's convenience. None of them even want to mess with a DVR (they say we're "old fashioned"), let alone sit down and watch something at a specific time.

And if they care about sports, they follow it on their phones (see the recent final four), or go to the games live (school football games).

You'll be pleased to know that, post-college, they're just as poor as everyone else. I think it comes as quite a shock to them.

PS: As the least athletic person on the planet, I did NOT have a scholarship in college and was so poor I could frequently fit my life savings in a change purse, but I still had cable, as did everyone else I knew. This was in the early days of the Internet (AOL baby!) and pre-cell phones for normal folk ... You know, the dark ages.


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## hilmar2k (Mar 18, 2007)

I can't imagine that convenience would ever be on the side of IPTV. Seems a whole lot more convoluted to get your prgramming via the internet. For me, pay TV providers have convenience as their ace in the hole.


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## Xsabresx (Oct 8, 2007)

coolman302003 said:


> I sure hope Netflix in the next few years doesn't start adding unskippable commercials and a giant logo bug into there streaming TV Shows/Movies.


For the money they are raking in every month (20mil subscribers X min $7.99/mo) I cant see them needing ad revenue. Besides, I dont think their model of streaming movies lends itself to commercial breaks.


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## BattleScott (Aug 29, 2006)

hilmar2k said:


> I can't imagine that convenience would ever be on the side of IPTV. Seems a whole lot more convoluted to get your prgramming via the internet. For me, pay TV providers have convenience as their ace in the hole.


I see just the opposite emerging. TVs are rapidly becoming IP enabled and are integrating various media outlet apps and browsers. I hate to keep using Hulu+ as a model, but it really is a perfect example of what IPTV can be. Plug the network cable into the TV, select the Hulu application, enter account info (or sign up right from your tv) and start watching what YOU want, not what someone else chose for you.

Flash forward 10-15 years and we'll just be connecting to the content of our choice with no need to be stuck with whatever programming packages the various providers limit us to.

In 2020, I see myself with the following setup:



Pannasonic 70" Home Media Center Display|
Dell OctoCore 256Bit Home server (1TB Ram/1EB HD) (handles all computing needs)|
100MB std home ISP|$49.99 
ESPN - All access|$ 9.99 
Discovery Gold|$ 3.99
Speed Channel|$ .99
Spike Premier|$ .99
Countless FREE sites (ad supported)|$ 0.00


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## hilmar2k (Mar 18, 2007)

BattleScott said:


> I see just the opposite emerging. TVs are rapidly becoming IP enabled and are integrating various media outlet apps and browsers. I hate to keep using Hulu+ as a model, but it really is a perfect example of what IPTV can be. Plug the network cable into the TV, select the Hulu application, enter account info (or sign up right from your tv) and start watching what YOU want, not what someone else chose for you.
> 
> Flash forward 10-15 years and we'll just be connecting to the content of our choice with no need to be stuck with whatever programming packages the various providers limit us to.
> 
> ...


So signing up with multiple providers is more convenient than with just one?

Also, if you htink that the majority of the county will have anything near 100Mbps internet by 2020 you're nuts. I live an hour north of Manhattan and I can only get 50Mbps (and that not even really 50, it just Comcast's 'boosted' speed).

I still fail to see how your scenario is less complicated than just paying one provider for everything.


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## sigma1914 (Sep 5, 2006)

Those will not even be close to the right prices.


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## BattleScott (Aug 29, 2006)

hilmar2k said:


> So signing up with multiple providers is more convenient than with just one?
> 
> Also, if you htink that the majority of the county will have anything near 100Mbps internet by 2020 you're nuts. I live an hour north of Manhattan and I can only get 50Mbps (and that not even really 50, it just Comcast's 'boosted' speed).
> 
> I still fail to see how your scenario is less complicated than just paying one provider for everything.


Doesn't really matter, because MPEG5 will provide a full Ultra-HD signal using only 1Mbps, so a 6-12 mbps service will be more than adequate. 
It is much more convenient because I can just sign up from my TV to only the sites I want to subscribe, and it's instantaneous. No installation appointments, dishes, converter boxes, lease fees, multi-room fees, etc. , etc., etc. And if I don't want it anymore, I just unsubscribe.


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## BattleScott (Aug 29, 2006)

sigma1914 said:


> Those will not even be close to the right prices.


I know, probably a little high.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> I know, probably a little high.


Okay, you been spoofin all this time?


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## Shades228 (Mar 18, 2008)

Companies won't lose money and people seem to think IPTV is going to save them money. Right now it has the ability to but really the IPTV world is small and ranked in the same breath as the OTA people. Sites, like Hulu, will all start charging for their content. They can't operate for free or based off advertisement alone. Once people start paying for 3-4 services their value for the dollar is gone.

There's no such thing as a free lunch. The way IPTV will be mainstream will be because of the delivery method. IPTV as we use the term today won't be the same in 5 years.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> Okay, you been spoofin all this time?


Nope, not at all. But my point is that people need to stop looking at what is here TODAY when evaluating future possibilities.

I pay less per month today for a T1 DSL connection (downstream anyways) than I paid 10 years ago for a Dial-up account. So in 2020, it's not unreasonable to believe that a run of the mill 30-50 Mbps residential account will be relatively cheap compared to today, even with unlimited usage.

It's also not unreasonable to believe that new CODECS, compression hardware and other technologies won't be able to further reduce the bandwidth requirements of Video streaming.

All you have to do is look at the new TV sets to understand where the technology is heading.


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## rayik (Mar 30, 2009)

We did completey cut the cord about 1 1/2 months ago. We had been using OTA and internet for 2 months before then.

Our ISP is Comcast with 20 / 4 and 250GB cap. We mainly watch TV in the late afternoon and evening. We have used about 35GB / month in the last two months. So far, cap is not a concern. (If it becomes a concern, we can get business class - same speeds and no cap - for $20 more / month).

We are in a Philadelphia suburb. OTA provides 11 HD channels (plus many subchannels and non-HD channels). PQ for the OTA channels is outstanding. We are using a series 3 Tivo to record OTA (with lifetime subscrption).

TV over IP is simply amazing using a Roku. The Roku is inexpensive, organizes selections in "channels" (which makes it easer for the family) and simply has so much available. We have subscriptions to netflix streaming only ($8 / month), hulu plus ($9 / month). Those, plus the Roku "channels" provide more than we could ever watch (both recent and old programming). 

I figured OTA and IP would mean the end of watching sports. Since we are in Comcast Philadelphia RSN territory - we already did not get any of the Flyers or Sixers games. Phillies baseball has 55 OTA games and Eagles football is all OTA.

One surprising source of sports is ESPN3 through an XBOX 360. They have a lot of live programming in HD. There are usually three MLB games a week. They have been showing a number of live NBA playoff games. 

Thus, overall the reduction is sports programming is not as compete as I thought it would be.

Lastly, the PQ on IP streaming overall is very good. Netflix and Hulu Plus HD PQ is comparable to the D* picture. There are a good number of Roku channels that offer HD programming with good PQ (such as Crackle). While there are commercials with several of the channels, one or two 15 or 20 seconds spots at time, we find we don't really mind them that much when we consider how much money we are savings.

What was surprising was that of the 40 shows we had season passes with D*, we still can watch 35 of them.

TV went from $84 / month to $17 / month. The savings will pay for the used TIVO S3 with lifetime and the Roku in 8 months. After that it is pure savings. While things may change in the future, we will enjoy this set up for now and as long as it is economically viable.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> Nope, not at all. But my point is that people need to stop looking at what is here TODAY when evaluating future possibilities.
> 
> I pay less per month today for a T1 DSL connection (downstream anyways) than I paid 10 years ago for a Dial-up account. So in 2020, it's not unreasonable to believe that a run of the mill 30-50 Mbps residential account will be relatively cheap compared to today, even with unlimited usage.
> 
> ...


There is a limit to how fast you can move electrons, however. 

But, more importantly, you are talking consumer/supplier relationships and it is vital to look at trends there that are not necessarily based upon technology breakthroughs.

I do not see the economic grounds for what you are touting. I do not see a win situation for suppliers in terms of profitability nor do I see a win for the consumer in terms of cost once everyone gets their hooks in. What I see is that if a network such as ABC wants to do this, they have to figure out how to make things work for their affiliates, then you have the network provider in the way. Since many of them are tied to TV distribution, how do you get around that? Some of those economic forces are already in play. Just because technology will make the basics cheap does not mean that the provisions will be cheap once everyone gets their cut.

Look at both home ISPs and wireless providers. Both are instituting caps or raising prices even though the base technology is getting cheaper.

Then there is the matter of the infrastructure itself. Who pays for that? Verizon thought it was going to go gang-busters into TV, etc., with Fios. 
They have halted development because the numbers don't play out.

We have seen this before. Nuclear power plants were going to make electricity so cheap that it would be free.

The there is the consumer. You continue to talk about multiple providers when Americans are into one-stop shopping and bundles. Who is going to bundle ESPN, USA Network and PBS into a nice neat package. For the same reasons that a la carte in cable/satellite would not work, neither will your model.

We've seen this before, too. We saw third parties and bundles (cable companies without cable) managing the C Band accounts. That is the best argument against a la carte and the best against your a la carte.

The US goverment shattered Bell into Baby Bells. Guess what, AT&T is bigger than it was before that happened and is offering more diverse services than ever before.

There is a limit to the money a consumer can fork out. You say it will be cheaper, I say it will not. You are introducing a fourth party into the mix, the bundler. So you have the networks, the bundlers, the base provider (ISP) and the consumer. They all need their money. In fact, I can argue that even with technology advancements, a network that can handle all the traffic you are proposing is more expensive than the the primarily push-delivery systems we have today. On top of that, you are talking about redoing all the infrastructure (a non-recurring but substantial cost) that was pretty much just redone. How do you think the ROI time on a complete distribution system would impact Joe Public's TV bill.

I can recall when PPV started. Visionaries saw that events like the Super Bowl would be on PPV as would your local baseball games. How did that turn out? It turned out those visionaries did not add up the cost to the consumer to see that it would all cost ten times what they were paying for cable.

And what do we do about the great wide open spaces in this country? How are they covered in your plans.

You are taking a small slice and expanding it out without examining all the consequences.

I think the technology will continue to be pushed, but the new technology will be used more like Uverse does or Fios wants to do.

Finally, the Napster construct basically gave way to iTunes. And music costs the same as it did before, if not more. I am still looking for the bargain bins...


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## tonyd79 (Jul 24, 2006)

rayik said:


> Lastly, the PQ on IP streaming overall is very good. Netflix and Hulu Plus HD PQ is comparable to the D* picture.


No way. I have Netflix on Roku and on a Blu Ray player with no streaming issues. Not near DirecTV PQ.


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## rayik (Mar 30, 2009)

tonyd79 said:


> No way. I have Netflix on Roku and on a Blu Ray player with no streaming issues. Not near DirecTV PQ.


Not trying to argue, but we find with 3.8 mb streaming from netflix the quality is just as good as D*. Overall quality for HD is quite good. Even 1.5 mb streaming is not bad.

What really surprised me was how good OTA HD is.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> Finally, the Napster construct basically gave way to iTunes. And music costs the same as it did before, if not more. I am still looking for the bargain bins...


This statement is a good nutshell of the post so I'll make my rebuttal concise:

I spend much less today on music because I can get the "song" I want for $1.99 instead of paying $14.99 for the album.

The same will apply to TV when we are able to simply "connect" to the content we want.


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## Laxguy (Dec 2, 2010)

BattleScott said:


> Doesn't really matter, because MPEG5 will provide a full Ultra-HD signal using only 1Mbps, so a 6-12 mbps service will be more than adequate.


Now, that's more than a quantum leap from installed technology! Where does this info come from? Is there a test model? Even scaled down? 
Who is developing this?


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## Shades228 (Mar 18, 2008)

BattleScott said:


> This statement is a good nutshell of the post so I'll make my rebuttal concise:
> 
> I spend much less today on music because I can get the "song" I want for $1.99 instead of paying $14.99 for the album.
> 
> The same will apply to TV when we are able to simply "connect" to the content we want.


I would have hated to grow up with this business model. There were many times where I got an album for a song and ended up liking the rest of the songs more. With today's mentality of buying a song only people will never know.

The same will not apply to TV. There is a very large difference in that the music industry lost so much money they were happy to get some back. TV is not losing as much money to piracy and they really won't. The government is even now getting into stopping major piracy especially when it comes to live streaming. The business model won't change. People seem to think so but it won't. The delivery method could but the model will be around for a very long time. In fact I would say in your world shows will become more expensive. When smaller channels that people no longer watch disappear so then the other shows can charge even more.

I get that you're thrilled about the setup you have now and the savings but if you think companies aren't waiting to drop the bomb on IPTV people you're drinking the coolaid. Once they determine it's more profitible to do something about it than it currently is they will.

People think IPTV will be some liberation from corporate america. Ask the FTA people who used to say the same thing how that went for them.


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## davidatl14 (Mar 24, 2006)

Shades228 said:


> I would have hated to grow up with this business model. There were many times where I got an album for a song and ended up liking the rest of the songs more. With today's mentality of buying a song only people will never know.
> 
> The same will not apply to TV. There is a very large difference in that the music industry lost so much money they were happy to get some back. TV is not losing as much money to piracy and they really won't. The government is even now getting into stopping major piracy especially when it comes to live streaming. The business model won't change. People seem to think so but it won't. The delivery method could but the model will be around for a very long time. In fact I would say in your world shows will become more expensive. When smaller channels that people no longer watch disappear so then the other shows can charge even more.
> 
> ...


Spot on! People touting IPTV for the future thinking it's going to save them money will be sorely disappointed.

IPTV will be viable, be around for the long haul, have multiple bells and whistles and will be great for the Consumer. Only drawback will be the pricing models. Won't be much if any at all cheaper(adjusted for time) than DBS is today.


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## Jeremy W (Jun 19, 2006)

Laxguy said:


> Now, that's more than a quantum leap from installed technology! Where does this info come from? Is there a test model? Even scaled down?
> Who is developing this?


It's made up, there is no MPEG-5.


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## Laxguy (Dec 2, 2010)

Jeremy W said:


> It's made up, there is no MPEG-5.


Dang! I was all set to don the foil hat (double layer of Extra Heavy Alcoa).


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## MattScahum (Oct 27, 2010)

Shades228 said:


> I would have hated to grow up with this business model. There were many times where I got an album for a song and ended up liking the rest of the songs more. With today's mentality of buying a song only people will never know.
> 
> The same will not apply to TV. There is a very large difference in that the music industry lost so much money they were happy to get some back. TV is not losing as much money to piracy and they really won't. The government is even now getting into stopping major piracy especially when it comes to live streaming. The business model won't change. People seem to think so but it won't. The delivery method could but the model will be around for a very long time. In fact I would say in your world shows will become more expensive. When smaller channels that people no longer watch disappear so then the other shows can charge even more.
> 
> ...


if this was facebook, I would totally "like" this. lol.
I can't count the number of times I found a song I liked, got the album and really enjoyed it and got a new band to add to a favorites list.
The same happens with tv. Never had the DIY network until D* and was bored, started flipping through and found something I like. Now it is in my regular rotation. That is the beauty of things. When pricing for things per channel online comes out people will be suprised on how much it actually costs to get programming.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> If I didn't have to pay DirecTV, I could pay my current broadband provider, twice as much as I do today, and would still have plenty left over to subscribe to the the channels I wanted.


Except there is no way the content providers are going to undersell themselves to do that. They aren't going to kill the Golden Goose that pays their bills.

One way or another, the content providers are going to have to get paid and paid big...whether that's through cable, satellite, IPTV, or whatever, the bills that consumers pay are not going to change because those dollars are needed to drive content.


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## Satelliteracer (Dec 6, 2006)

LarryFlowers said:


> As long as the ISP's & Telco's and other suppliers of bandwidth are allowed to run amuck and do whatever they want whenever they want... IPTV will forever be a "toy".
> 
> The United States has a HORRIBLE Internet service ranking, a mind boggling and embarasing 28th in the world and it will remain so as long as the "ladies of the evening" are in charge in Congress.


I wouldn't say that. People love to compare the USA with other countries and say things like...look at tiny Finland, they can do it. That's actually the entire point though, many of these countries that rate higher than the USA in various categories have 1/20th the population, 1/20th the land mass \ geography, etc, etc.

It's a lot easier to provide Internet Service to the nation of Japan when it's roughly the size of California and densely populated then it is to provide it to all of the USA and our huge areas of coverage, many of which have very few inhabitants.

The top five, S. Korea, Denmark, Taiwan, Netherlands and Singapore are small entities with smaller populations in densely populated areas. It's simply not an apples to apples comparison by any stretch.


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## Satelliteracer (Dec 6, 2006)

Jeremy W said:


> Wow, Satelliteracer is now posting stuff directly from the PR people. Not that I ever expected a DirecTV employee to be free of bias, but this just seems like a little much.


Sigh. It's from Ad Age.

Here's the link, happy to change the original link

http://adage.com/article/mediaworks/television-consumers-keen-cutting-cord/227014/


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> I see just the opposite emerging. TVs are rapidly becoming IP enabled and are integrating various media outlet apps and browsers. I hate to keep using Hulu+ as a model, but it really is a perfect example of what IPTV can be. Plug the network cable into the TV, select the Hulu application, enter account info (or sign up right from your tv) and start watching what YOU want, not what someone else chose for you.
> 
> Flash forward 10-15 years and we'll just be connecting to the content of our choice with no need to be stuck with whatever programming packages the various providers limit us to.
> 
> ...


Good luck having the content providers selling you an a la carte package like that. If they do, I predict the following

ESPN $59.99
Speed Chanel $29.99
Spike $24.99
Etc, etc

A la carte pricing is vastly MORE expensive, not cheaper, because you will be eliminating all the customers that subsidize those channels by buying a base package.


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## Jeremy W (Jun 19, 2006)

Satelliteracer said:


> Sigh. It's from Ad Age.
> 
> Here's the link, happy to change the original link


The link itself was irrelevant to me. It simply pointed out that you were made aware of this article through DirecTV PR, which is what I took issue with. Whether you link to the PDF from BurrellesLuce or to the article on adage.com, that fact remains.

I realize that no one else cares about this, so I'll just drop it.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> Good luck having the content providers selling you an a la carte package like that. If they do, I predict the following
> 
> ESPN $59.99
> Speed Chanel $29.99
> ...


A la carte (which should be spelled "A la cartel") pricing is only vastly more expensive because the TV cartels (Cable, Sat) don't wan't it. They currently enjoy a best of both worlds scenario. They get to negotiate carriage rates for the channels that people DO want and then upcharge those, in the mean time they get paid to provide a bunch of channels that people DONT want.

Using ESPN as the example, let's say 50% of current DirecTV subscribers (which you and I both know is a VERY low figure) would continue to subscribe directly to "ESPN Direct". If memory serves, the current carriage rate DirecTV pays is around $5 per subscriber, so to replace that revenue, how much would ESPN need to charge it's direct subscribers? 
Answer: $10

And don't forget the immediate legal savings just from eliminating carriage disputes...

Also, let's not lose sight of the fact that the 4 major networks still dominate the TV landscape and they are still FTA. The only difference between them and others is that they have their own distribution infrastructure and are not controlled by the cartels.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> A la carte (which should be spelled "A la cartel") pricing is only vastly more expensive because the TV cartels (Cable, Sat) don't wan't it. They currently enjoy a best of both worlds scenario. They get to negotiate carriage rates for the channels that people DO want and then upcharge those, in the mean time they get paid to provide a bunch of channels that people DONT want.
> 
> Using ESPN as the example, let's say 50% of current DirecTV subscribers (which you and I both know is a VERY low figure) would continue to subscribe directly to "ESPN Direct". If memory serves, the current carriage rate DirecTV pays is around $5 per subscriber, so to replace that revenue, how much would ESPN need to charge it's direct subscribers?
> Answer: $10
> ...


You are correct. Not. Let us look at a place where this already takes place. Movie rentals. To follow your example, PPV movies would match DVD rentals, or at least come close. Yet Netflix (the bundled version) costs under $10 (with Blu Ray) a month and you can get 20 movies a month that way plus streaming. Now go to PPV and see how much those same 20 movies (with lesser quality) cost you....$120.

Of course, you forgot to include the COST of everyone providing their own product. ESPN would need to vastly increase its bandwidth and would need to staff (or outsource) a lot more customer support than they have today.

The "broadcast" model is vastly cheaper for the programming provider. They beam a signal to a satellite and they are done. (I am overly simplifying.)

Sorry, the economics do not make sense.

And we haven't even included the small channels. A channel that may cost a few cents per viewer today will have to charge some minimum just to try to stay in business. That minimum would be more like a dollar or so. With the price of a buck for some off-beat channel, how long do you think they stay in business?


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> You are correct. Not. Let us look at a place where this already takes place. Movie rentals. To follow your example, PPV movies would match DVD rentals, or at least come close. Yet Netflix (the bundled version) costs under $10 (with Blu Ray) a month and you can get 20 movies a month that way plus streaming. Now go to PPV and see how much those same 20 movies (with lesser quality) cost you....$120.


The blue ray option is another $2.00 per month so that would be $11.99. If I only watch 1 movie a month, which is the better value? Seems to me I'd be paying $11.99 for something I could have gotten for $5.99 on PPV, or for $1.00 at the McKiosk...



tonyd79 said:


> And we haven't even included the small channels. A channel that may cost a few cents per viewer today will have to charge some minimum just to try to stay in business. That minimum would be more like a dollar or so. With the price of a buck for some off-beat channel, how long do you think they stay in business?


Who cares? If no one will pay a buck for it, they can try and make a go on advertising alone. If that doesn't work then they go out of business. 
Many of these channels are currently "paying" to be carried, so a move to a providerless system would benefit them.


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## jpl (Jul 9, 2006)

BattleScott said:


> A la carte (which should be spelled "A la cartel") pricing is only vastly more expensive because the TV cartels (Cable, Sat) don't wan't it. They currently enjoy a best of both worlds scenario. They get to negotiate carriage rates for the channels that people DO want and then upcharge those, in the mean time they get paid to provide a bunch of channels that people DONT want.
> 
> Using ESPN as the example, let's say 50% of current DirecTV subscribers (which you and I both know is a VERY low figure) would continue to subscribe directly to "ESPN Direct". If memory serves, the current carriage rate DirecTV pays is around $5 per subscriber, so to replace that revenue, how much would ESPN need to charge it's direct subscribers?
> Answer: $10
> ...


I just think this is flat-out wrong. Channels make their money by charging the cable companies per household to which the channel is available. ESPN is by far the most expensive channel for these cable providers, coming in at something like $4/subscriber. Take the number of subscribers that DirecTV has which get access to ESPN (not that actually watch it, but get access to it). Multiply THAT by $4, and that's how much money ESPN gets from DirecTV alone. Now, come up with the costing that ESPN would need to make the same amount of money in an ala carte scheme. If you think they're only going to charge $10 for ESPN, sorry but you're dreaming. Wealth TV - a tiny, independent cable channel, that's carried on very few systems (we get it on FiOS) signed a deal with Roku. You can subscribe to that channel, ala carte... for $4/month. Still convinced that ESPN would only charge $10/month for their suite if they went full ala carte?

Tony is right - the current architecture for distribution is very efficient. It allows for a large number of channels for a very small fee per channel. Go ala carte, and you couldn't get 10 channels for the same price you're paying to DirecTV now.

Ala carte isn't really available in large measure more because the channel providers don't want it, and neither, really, do consumers. There are some, but by and large, the reason these service providers fall all over themselves to up their channel line-ups isn't because of some futile exercise. They do it because American consumers want it. Period.


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## bakerfall (Aug 23, 2006)

IPTV will continue to grow in popularity as the delivery mechanisms become more prevalent. Just about every bluray player, tv, game system, computer, etc. is capable of doing Netflix already. More and more can handle Hulu, mlb.tv, etc. However for most people, they won't cancel existing services and that is what is shown in this article.

Hulu's adbased free model, and subscription Hulu plus, Netflix streaming, mlb.tv, etc. are clearly profitable from both the standpoint of the websites, and the content providers (either networks, studios or sports leagues), or they would not be gaining in prevalence. Hulu plus reduced their cost after it was launched, so clearly the market is not going to support an increase in cost.

Personally, I am looking at going with a OTA + streaming future over DirecTV simply for the economics of it. I'm not dissatisfied with my service, but paying $120+ per month for something when I can get 99% of the content that I use for free is really losing it's luster.


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## BattleScott (Aug 29, 2006)

jpl said:


> ESPN is by far the most expensive channel for these cable providers, coming in at something like $4/subscriber. Take the number of subscribers that DirecTV has which get access to ESPN (not that actually watch it, but get access to it). Multiply THAT by $4, and that's how much money ESPN gets from DirecTV alone. Now, come up with the costing that ESPN would need to make the same amount of money in an ala carte scheme.
> _-I did this in my example: If there was a 50% viewership of ESPN by directv subs, that amount would be exactly double ($10), or $8 for in you example._
> 
> Tony is right - the current architecture for distribution is very efficient. It allows for a large number of channels for a very small fee per channel. Go ala carte, and you couldn't get 10 channels for the same price you're paying to DirecTV now.
> ...


...


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## BattleScott (Aug 29, 2006)

bakerfall said:


> IPTV will continue to grow in popularity as the delivery mechanisms become more prevalent. Just about every bluray player, tv, game system, computer, etc. is capable of doing Netflix already. More and more can handle Hulu, mlb.tv, etc. However for most people, they won't cancel existing services and that is what is shown in this article.
> 
> Hulu's adbased free model, and subscription Hulu plus, Netflix streaming, mlb.tv, etc. are clearly profitable from both the standpoint of the websites, and the content providers (either networks, studios or sports leagues), or they would not be gaining in prevalence. Hulu plus reduced their cost after it was launched, so clearly the market is not going to support an increase in cost.
> 
> Personally, I am looking at going with a OTA + streaming future over DirecTV simply for the economics of it. I'm not dissatisfied with my service, but paying $120+ per month for something when I can get 99% of the content that I use for free is really losing it's luster.


This is a very accurate assessment of the current landscape. IMO, by 2020 they will be able to replace their existing services with direct access to the content providers and the need for TV providers will just go away.

Now, it just so happens that MOST of those service providers also supply the ISP services necessary to get there, so in most cases it will just be a logical shift from providing expensive TV services and cheap internet, to providing premium ISP services.


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## tonyd79 (Jul 24, 2006)

"BattleScott" said:


> This is a very accurate assessment of the current landscape. IMO, by 2020 they will be able to replace their existing services with direct access to the content providers and the need for TV providers will just go away.
> 
> Now, it just so happens that MOST of those service providers also supply the ISP services necessary to get there, so in most cases it will just be a logical shift from providing expensive TV services and cheap internet, to providing premium ISP services.


And of course they are going to improve this ISP service cheaper than they do today and happily not collect 100 bucks from tv services.

I want some of what you are smoking.

Btw. For this to be main stream in 2020, they need to start planning and building infrastructure very very soon. 2020 is not that far away.


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## bakerfall (Aug 23, 2006)

tonyd79 said:


> And of course they are going to improve this ISP service cheaper than they do today and happily not collect 100 bucks from tv services.
> 
> I want some of what you are smoking.
> 
> Btw. For this to be main stream in 2020, they need to start planning and building infrastructure very very soon. 2020 is not that far away.


I don't think there will be this direct consumer to network delivery model for all content, but I do think there is some potential for Hulu or other similar services to begin offering live streaming as a premium service and that could be potentially a la carte. ESPN may expand, and charge for, a premium ESPN 360 that had live sports center and other product.

I think we are more than 9 years away from the kind of fundamental change that would make the Comcast and DirecTVs of the world obsolete, but I do think the technology will just get easier and the content more compelling, that people will reconsider the neverending and always rising costs of paid TV. What should happen, in response to this, is more granular packaging allowing users to reduce their bills as they see fit. Not necessarily a la carte, but a grouping of channels into logical groups. Truthfully, the costs may need to come down regardless. Most things are getting better and cheaper in the technical world, having TV service costs to go up consistently with seemingly no ceiling and little value add seems to be unsustainable.


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## bakerfall (Aug 23, 2006)

I wonder what the adaption curve looks like for this kind of stuff. Eventually people will have grown up with internet streaming and will not have the attachment to "cable" that people who grew up with that have. 

I look at something like Ooma, a wonderful and effectively free phone service that has saved me hundreds of dollars even over Vonage which saved me over POTS from ATT and wonder why everyone doesn't use it. I'm not sure if it's "new and scary" or what, but at some point either by education or simply people growing older, the fear of new will disappear. Cutting the cord numbers will go up when the path of comfortability with the technology and quality of content meet.


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## jpl (Jul 9, 2006)

BattleScott said:


> ...


You're assuming that 50% of the households that currently have access to ESPN will sign up for it ala carte. I think that's beyond the realm of reality.


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## jpl (Jul 9, 2006)

Here's my take on all this. The cable companies provide the distribution network for these services. Right now companies like Netflix don't have to account for that. They don't have to pay to maintain the connection going to your home. But these ISPs do. That comes at a cost. Even if IP were going to storm the world, you can't have your cake and eat it too. One way or the other the distribution networks have to be paid for.

Also, if you want the content providers to continue providing content... they have to be paid too. Right now IP isn't that profitable as a delivery mechanism, but companies are throwing money at it as an investment. I'm betting, e.g., Hulu doesn't pull in most of the revenue for NBC... or even a decent chunk of it. But in order for IP to take over everything, you're going to have to up the revenue streams coming from those IP sources. Whether you pay the cable company for a channel, or you go through the channel provider directly and pay ala carte, I think it's just wrong to believe that you're going to be able to get something that you currently have for next to nothing. It's just not reality.

Also realize that content providers negotiate rates to service providers based on volume. DirecTV has alot of pull with these guys because of the size of the customer base. Deal with these content providers on an ala carte basis, and all of that purchasing power goes away. If consumers really were demanding ala carte, you would have it. They're not. There's no grand conspiracy (no cartels) preventing it from happening. The force of the market will not be denied. Delayed, maybe, but not denied. Look at Netflix. Despite the head winds its getting from the studios, people love their streaming service. Ergo you're seeing deals being made (reluctantly to be sure) by studios with Netflix. If there was a real market for ala carte, you would have seen it. You really don't.


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## Shades228 (Mar 18, 2008)

Here's the bottom line. 

Company A gets 31 million a year for their programming. If we went a la cartel they would still get $31 million a year for their programming. They would just charge what they need to charge to get that. Most people would swap channels around all the time. Very few people would keep ESPN all year if theydidn't have to. They might keep it during their favorite sport season. This would be the same for all other shows. Who would subscribe to channels during repeat seasons of the summer? 

Companies aren't stupid they're going to get paid. That's all they care about and they'll do what it takes to make that happen. Thinking anything else is fantasy. You may pay less during certain times of the year but I can say that on average most people would pay the same if not more for what they want to watch today.

So to all of those who are doing the IPTV thing today and enjoy it great. To all of those who think that this will be liberation from high bills and freedom from lack of choice. You have another thing coming.


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## bakerfall (Aug 23, 2006)

According to this article Hulu will generate $500 million in 2011, $300 of which will go to the content providers. I would doubt that many of those providers see those numbers and think "we need to get out of this internet thing".


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## bakerfall (Aug 23, 2006)

Shades228 said:


> Here's the bottom line.
> 
> Company A gets 31 million a year for their programming. If we went a la cartel they would still get $31 million a year for their programming. They would just charge what they need to charge to get that. Most people would swap channels around all the time. Very few people would keep ESPN all year if theydidn't have to. They might keep it during their favorite sport season. This would be the same for all other shows. Who would subscribe to channels during repeat seasons of the summer?
> 
> ...


This is short sided and just plain wrong.

First off OTA offers, and will continue to offer, all the Networks content in HD for free. For most people, myself included, this handles 85-90% of DVR content that I have.

Netflix, Hulu, streaming sports subscriptions, etc. are all generating revenue and profits under current models. ESPN 360 broadcasts effectively all of their live sporting events (sans NFL), but it requires a subscription to a cable provider for internet, not TV. Free? No. Dramatically cheaper? Yes.

Difference is the middle men (netflix, hulu) can deliver this content to you using your existing technology and hardware. Yes they need server farms, bandwidth, content agreements, etc. but in comparison to the logistics in providing Satellite TV service, the costs are minuscule. So, they can provide compelling content at a much cheaper rate and still make a significant profit.


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## Jeremy W (Jun 19, 2006)

jpl said:


> You're assuming that 50% of the households that currently have access to ESPN will sign up for it ala carte. I think that's beyond the realm of reality.


He said 50% of DirecTV subscribers would sign up for ESPN. Considering the fact that DirecTV is known as the provider for sports fans, it's a perfectly reasonable number.


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## tonyd79 (Jul 24, 2006)

bakerfall said:


> This is short sided and just plain wrong.
> 
> First off OTA offers, and will continue to offer, all the Networks content in HD for free. For most people, myself included, this handles 85-90% of DVR content that I have.


OTA is not going to take the place of cable and satellite. People don't want to deal with antennas and we have too many people living in condos and apartments for antennas to work again. Digital OTA has a horrible distance penetration. Don't you see all the people here who say that OTA doesn't work for them?

Now, DirecTV and Dish have traditionally charged 5 or 6 bucks a month for your OTA delivery. The rest of the 90 to over 100 bucks people are paying are for non-OTA channels.

And, yet, people continue to pay it when OTA exists and always has.

The ones being shortsighted (not sided) are the ones who think all is going to be roses and suddenly TV is going to get cheap again. Nope. Not at all.

The revenue that broadcasters (and what I mean here is the cable broadcasters) are seeing will need to be higher because they will be taking on a greater burden to deliver than they are today.

Finally, we get to Hulu. I will say this once.....HULU *is* a cable company. They are a delivery mechanism and third party just like DirecTV, Fios, Comcast. Not in technology and delivery mechanism, but they are a provider of programming services. Hmm, all other providers, the big broad ones, are delivering shows on demand via internet or their own delivery conduit. How is Comcast On Demand or DirecTV On Demand different from Hulu.

I have been saying that IPTV will play a big part but the providers will pretty much be the same people they always were. And broadcasting is not going away.

The futurists around here were talking about the death of OTA because of satellite and cable and IPTV. Now, we are depending on it and shuttling the cable stations off to IPTV and thinking they will be cheap.

Those who "cut the cord" (I hate that expression) are the Napster users before the industry caught on. Enjoy the cheapness. It will not last. It will probably boomerang if it ever truly catches on. Your fees will be higher than they are today for the traditional delivery mechanisms.


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## bakerfall (Aug 23, 2006)

OTA channels are also available, for free, via QAM for anyone who subscribes to cable internet. It is another, viable option with no antenna.

Comparing existing IPTV providers with Napster is unfair and incorrect. Napster was an illegal p2p network, a closer comparison would be those who DL all their TV content from torrent or usenet. IPTV providers, as you said with Hulu, are companies who are making a profit. They aren't illegal, they aren't free.

Hulu started out as a way for certain networks to stream their shows. Since then, they have signed additional content agreements with networks. The only hold outs of the big ones are CBS and the CW. CBS has existing agreements to stream their content with providers, Microsoft being a big one. CBS content is all over Media Center.

Your statement "The ones being shortsighted (not sided) are the ones who think all is going to be roses and suddenly TV is going to get cheap again. Nope. Not at all." reall depends on what we are talking about. Netflix, Hulu and the like are not (at least any time soon) going to be direct one to one replacements for Comcast and DirecTV anytime soon. However, as people realize that they want content and savings vs. 250 live 24 hr channels, it will affect the market.

For me, personally, one the factors for me looking at changing how I receive content has a lot to do with getting older, having multiple kids, less time and less need for dramatic amounts of content. All I want is to be able to watch what I want, when I want. At some point, and I think we are there, I can get almost all of that without paying $120 or whatever a month for it. 

To say that IPTV is going to kill traditional broadcasters is unrealistic, however, it's just as silly to ignore a technology that is booming. How many devices has Netflix found it's way onto in the past 2 years alone?


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## xmguy (Mar 27, 2008)

bonscott87 said:


> Maybe. But people are changing the way they watch TV. IPTV is just like having a DVR. The TV isn't just "on" to be on. You just watch what you want to watch and that's it. TV hasn't been just on in our household for 12 years now. Now the general public is moving in that direction as well.
> 
> Besides, once people figure out they can get dozens of channels for free with an OTA antenna, most in HD, that changes thing too. Or they can get all the local networks plus a few others all free via clear QAM from their cable Internet. Gotta educate them and they will go.
> 
> ...


I'm a bit over that age of 25 (26). But I still like good ole fashion TV. I have a DVR. That does me well. I watch some streaming on Netflix. Mostly DVDs. I DO use my phone with my Hava device (like a Slingbox). That's usually to watch a live event like a Nascar race.

I don't get why they think that people in my age bracket will drop paid TV for IPTV or internet based video services.


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## rayik (Mar 30, 2009)

tonyd79 said:


> Now, DirecTV and Dish have traditionally charged 5 or 6 bucks a month for your OTA delivery. The rest of the 90 to over 100 bucks people are paying are for non-OTA channels.
> 
> And, yet, people continue to pay it when OTA exists and always has


My experience with D* was that I could not remove local channels from our package in an attempt to save money.

After putting in an attic antenna which was able to get all our local OTA stations, I did call D* to ask if the local channels could be removed for a savings. I was told it could not. I was told that if local channels were available in your area, you must pay for them.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> And of course they are going to improve this ISP service cheaper than they do today and happily not collect 100 bucks from tv services.
> 
> I want some of what you are smoking.
> 
> Btw. For this to be main stream in 2020, they need to start planning and building infrastructure very very soon. 2020 is not that far away.


I'll be more than happy to start making it more personal if that's the route you wan to go. But for now I'll let it be...

Let's assume I'm AT&T. I have a customer who pays me $30 for 3Mbps and another $80 for TV. That's $110.00. Out of that $80, I have to pay a portion to the content providers, let's say 25% (i'm sure it's more than that, but it really doesn't matter). That's $20 I have to pay out for that sub for doing nothing but providing a path for digital information. I could bump that subscriber to a $90 premium unlimited bandwidth account and break even from a revenue standpoint.

Every AT&T Uverse and Verizon FiOS household is wired with enough bandwidth to do this today. In fact, they are essentially doing it today. The only difference is, instead of getting what you want from sources, you pay them for the TV content they choose offer.

The infrastructure and technology is already in place, it's only a matter of time...


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## hdtvfan0001 (Jul 28, 2004)

Trends tend to take a longer period of time...so I'm not sure good conclusions can be drawn quite yet.


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## tonyd79 (Jul 24, 2006)

"BattleScott" said:


> I'll be more than happy to start making it more personal if that's the route you wan to go. But for now I'll let it be...
> 
> Let's assume I'm AT&T. I have a customer who pays me $30 for 3Mbps and another $80 for TV. That's $110.00. Out of that $80, I have to pay a portion to the content providers, let's say 25% (i'm sure it's more than that, but it really doesn't matter). That's $20 I have to pay out for that sub for doing nothing but providing a path for digital information. I could bump that subscriber to a $90 premium unlimited bandwidth account and break even from a revenue standpoint.
> 
> ...


If you really think the infrastructure is in place, you are dreaming. It is not. Just because you have a pipeline to your house does not mean there is enough to back up hundreds of millions of households.

And wow. If you think a little joke is taking it personal, I am gone. I don't want to discuss this with someone who cannot have a sense of humor about it.

The truth is that nothing any of us says matters worth crap as what happens will happen no matter what we say here.


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## Laxguy (Dec 2, 2010)

bakerfall said:


> This is short sided and just plain wrong.
> 
> First off OTA offers, and will continue to offer, all the Networks content in HD for free. For most people, myself included, this handles 85-90% of DVR content that I have.


That is quite an assertion, and not close to true for me. In fact, a brief look through the combined list from two DVRs shows less than 10% is saved Network productions.

I'd be surprised if the average of network shows on the average DVR contained more than 50% network shows. (But, like Lake Wobegone, we're all above average here.:sure


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> If you really think the infrastructure is in place, you are dreaming. It is not. Just because you have a pipeline to your house does not mean there is enough to back up hundreds of millions of households.


 It's not "hundreds of millions. Neilsen puts the 2011 total TV households at 115 million. Estimates are around 85% have a pay TV service, that's about 97 Million. Broadband connected houses are around 90 million for 2011. Sounds like the numbers are there to me, just think what it will be by 2020...



tonyd79 said:


> And wow. If you think a little joke is taking it personal, I am gone. I don't want to discuss this with someone who cannot have a sense of humor about it.


Gee, I miss your uninformed non-sense already...


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## tonyd79 (Jul 24, 2006)

"BattleScott" said:


> Gee, I miss your uninformed non-sense already...


thanks for keeping it non personal. Couldn't do it, huh?

I enjoyed the debate. Until now. Too bad you can't have a civilized discussion of disagreement.


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## sigma1914 (Sep 5, 2006)

BattleScott said:


> It's not "hundreds of millions. Neilsen puts the 2011 total TV households at 115 million. Estimates are around 85% have a pay TV service, that's about 97 Million. Broadband connected houses are around 90 million for 2011. Sounds like the numbers are there to me, just think what it will be by 2020...
> 
> Gee, I miss your uninformed non-sense already...


What's "broadband connected houses" defined as? 1Mbp? Under like DSL?


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## wmb (Dec 18, 2008)

bakerfall said:


> Difference is the middle men (netflix, hulu) can deliver this content to you using your existing technology and hardware. Yes they need server farms, bandwidth, content agreements, etc. but in comparison to the logistics in providing Satellite TV service, the costs are minuscule. So, they can provide compelling content at a much cheaper rate and still make a significant profit.


for now.



bakerfall said:


> According to this article Hulu will generate $500 million in 2011, $300 of which will go to the content providers. I would doubt that many of those providers see those numbers and think "we need to get out of this internet thing".


$500 million in revenues. $300 million to content providers, total, for a year. D*'s programming costs for 2009 (according to the annual report) was almost $9 billion, on revenues of over $20 billion.

I image the content providers are taking a gander towards Hulu trying to figure out what's going on over there, but most aren't going to to leave the real feeding trough for a while.

Lets see what happens when Hulu hits $1 billion/year in revenue. Heck, IBM wasn't in the PC market in 1980s until annual PC sales hit $1 billion/year. Three months later, they introduced the original PC.


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## tulanejosh (May 23, 2008)

I'm late to this party but for your guys that keep referencing Hulu and Netflix - do you acutally follow news associated with either service? Both of those services are deeply troubled on the content front. Hulu is network owned - and none of its owners seem particularly committed to the service. They won't even provide their own company with their best assets in a timely fashion. What does that tell you?

And Netflix.... netflix is a great story. But studios and networks see Netflix as a parasite. They really don't want to do business with big red now that they know what netflix is and what they are trying to do. nearly everyday there's a new story about increasing restrictions from this or that studio about when they can show content via instant streaming, or new waiting periods for when they can mail dvds. Jeff Bewkes from Time Warner stopped short of straight up calling them the enemy. Netflix's "partners" are seriously jeopardizing the value proposition that NF provides.

Sat Racer tells us time and time again - just how difficult these content deals are these days. And that's for D* - a company content providers actually want to do business with. Can you imagine how difficult it is to secure streaming rights when it's two companies that studios and networks would really just rather they went away? 


When you put all the evidence together - the content issues, the isp caps, the shaky the lack of widespread broadband, the poor solutions for sports viewing, the lack of one stop shops for local network viewing, the lack of server infrastructure capabale of streaming event television in high quality to mass populations, the anecdotal evidence that people want to "cut the cord" - it doesn't paint a very compelling picture that any massive dynamic shift is imminent in the near or mid term. Are these problems solvable - sure. It'll take a lot of money. And guess what - the companies that have the money to make that shift are the exact companies that don't want a shift. 

Simply saying something is the future and that's the way it will be doesn't make it so, it makes you an anti-luddite.


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## tulanejosh (May 23, 2008)

BattleScott said:


> I'll be more than happy to start making it more personal if that's the route you wan to go. But for now I'll let it be...
> 
> Let's assume I'm AT&T. I have a customer who pays me $30 for 3Mbps and another $80 for TV. That's $110.00. Out of that $80, I have to pay a portion to the content providers, let's say 25% (i'm sure it's more than that, but it really doesn't matter). That's $20 I have to pay out for that sub for doing nothing but providing a path for digital information. I could bump that subscriber to a $90 premium unlimited bandwidth account and break even from a revenue standpoint.
> 
> ...


I think you are missing it a little bit. ATT, TWC, Comcast - they don't want to be dumb pipes. That's why nearly all of the big distributors currently own or are actively acquiring content properties and have very diverse business operations. They will not accept getting rid of their distribution and creation businesses in favor of doubling or tripling your internet bill. It's easy to demonize these companies - but they have some pretty bright people working there. If that were a viable option, and it made the most business sense, pretty sure they would have done it or started doing it.

It's also very easy to say that these companies are just resisting change. You know that's not the case. If this was the best way to make profit and return for investors, they would embrace it in a heartbeat. You sound like a pretty smart guy, surely you understand that's not how Fortune 500 corporations operate.


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## tulanejosh (May 23, 2008)

xmguy said:


> I'm a bit over that age of 25 (26). But I still like good ole fashion TV. I have a DVR. That does me well. I watch some streaming on Netflix. Mostly DVDs. I DO use my phone with my Hava device (like a Slingbox). That's usually to watch a live event like a Nascar race.
> 
> I don't get why they think that people in my age bracket will drop paid TV for IPTV or internet based video services.


I'm right there with you my friend. A little older than you, but i think they all overestimate our committment to Hulu. I have a variety of options available to me - sling, hulu, netflix, ps3, 360... and there's no substitute for my Directv. It offers the best experience. If you program your dvr correctly - it creates the same experience as hulu. I have a library of things that i like to watch, pretty much whenever i want or have the ability to watch it. There are always more things recorded than i have the time to watch.

And i don't mean to sound cavalier about this... Know a lot of people out there are eaking by,and everyone has their budget realities.... for me personally - paying for directv isn't something I'm losing a lot of sleep over.

I live in a VERY tech centric place with a major university in town (Austin, TX). Population is pretty young and tech savy... i'm pretty typical. Most people i know have cable or satellite. There is this one guy i know that does hulu only, but he's really clueless about the realities of it and is kinda wierd.


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## tulanejosh (May 23, 2008)

bakerfall said:


> This is short sided and just plain wrong.
> 
> First off OTA offers, and will continue to offer, all the Networks content in HD for free. For most people, myself included, this handles 85-90% of DVR content that I have.
> 
> ...


You are making assessments based on current deals. Hulu is struggling - its owners aren't willing to provide it with compelling content in a timely fashion and NF has really whooped them in the streaming game, so i am going to leave them out of this conversation.

Netflix costs what it costs because it snuck in the back door and got some awesome content deals before anyone really knew what they were and how big they were going to become. That isn't always going to be the case. Starz, for example, provides the bulk of their "current" offerings and has already stated very publicly that when and if they renew with NF they will charge them what they charge every other distribution partner (TWC, D*, etc). Other studioes are flat out yanking content off of netflix - i.e. criterion collection). While NF might be able to give you unlimited access for $8 now - that doesn't mean that they will always charge an amount similar to that. At some point, the hammer is going to drop on NF as well and their prices will be similar to what you pay D* or whoever - because that's what the content costs!


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> A la carte (which should be spelled "A la cartel") pricing is only vastly more expensive because the TV cartels (Cable, Sat) don't wan't it. They currently enjoy a best of both worlds scenario. They get to negotiate carriage rates for the channels that people DO want and then upcharge those, in the mean time they get paid to provide a bunch of channels that people DONT want.
> 
> Using ESPN as the example, let's say 50% of current DirecTV subscribers (which you and I both know is a VERY low figure) would continue to subscribe directly to "ESPN Direct". If memory serves, the current carriage rate DirecTV pays is around $5 per subscriber, so to replace that revenue, how much would ESPN need to charge it's direct subscribers?
> Answer: $10
> ...


I could not disagree with you more and working well into my 2nd decade in the television space, I'm just going to politely say your math is wrong and your assumptions....significantly wrong.


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## Satelliteracer (Dec 6, 2006)

Jeremy W said:


> He said 50% of DirecTV subscribers would sign up for ESPN. Considering the fact that DirecTV is known as the provider for sports fans, it's a perfectly reasonable number.


Actually, it's not a reasonable number. D* is "known" for sports because of things like NFL ST and such. No question is skews higher on sports than other MSOs, but look at the industry published numbers of sports subscriptions and the truth shall set you free.

Put it another way, there are far far far far far far far more movie / basic entertainment subscribers on D* than sports fans. It ain't even close.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> I'll be more than happy to start making it more personal if that's the route you wan to go. But for now I'll let it be...
> 
> Let's assume I'm AT&T. I have a customer who pays me $30 for 3Mbps and another $80 for TV. That's $110.00. Out of that $80, I have to pay a portion to the content providers, let's say 25% (i'm sure it's more than that, but it really doesn't matter). That's $20 I have to pay out for that sub for doing nothing but providing a path for digital information. I could bump that subscriber to a $90 premium unlimited bandwidth account and break even from a revenue standpoint.
> 
> ...


It does matter. 1st, the margin rate you are using as an example is fantasy land. It DOES MATTER.

Secondly, the cost to build out that infrastructure is HUGE. There's a reason why FIOS and UVERSE aren't building out any more areas right now, at least not new markets. The cost. The amount of investment they have to make to each home and the years to make it back is a daunting scenario.

So when you say the infrastructure and technology are in place...not really. It's in place FOR A PRICE in SOME areas. To do what you are suggesting is a CAP EX project that most if not all companies are not going to want to take on. At least not in your 2020 horizon. For some parts of the country...sure. For mass distribution? Not on a bet.


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## Satelliteracer (Dec 6, 2006)

tulanejosh said:


> You are making assessments based on current deals. Hulu is struggling - its owners aren't willing to provide it with compelling content in a timely fashion and NF has really whooped them in the streaming game, so i am going to leave them out of this conversation.
> 
> Netflix costs what it costs because it snuck in the back door and got some awesome content deals before anyone really knew what they were and how big they were going to become. That isn't always going to be the case. Starz, for example, provides the bulk of their "current" offerings and has already stated very publicly that when and if they renew with NF they will charge them what they charge every other distribution partner (TWC, D*, etc). Other studioes are flat out yanking content off of netflix - i.e. criterion collection). While NF might be able to give you unlimited access for $8 now - that doesn't mean that they will always charge an amount similar to that. At some point, the hammer is going to drop on NF as well and their prices will be similar to what you pay D* or whoever - because that's what the content costs!


Ding ding ding...we have a winner. Netflix is going to go through some SIGNIFICANT changes in the next few years on the cost side....then when you see metered bandwidth come into play, that will also have an impact.


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## bakerfall (Aug 23, 2006)

I don't think anyone is saying that IPTV is going to kill traditional providers, that will probably never happen. However, it is naive to think that this trend is not going to continue to get more popular and more compelling. That may end up costing more, but it will never approach what a TV provider charges.


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## raott (Nov 23, 2005)

Satelliteracer said:


> Ding ding ding...we have a winner. Netflix is going to go through some SIGNIFICANT changes in the next few years on the cost side....then when you see metered bandwidth come into play, that will also have an impact.


If metered bandwidth affect Netflix, it will also affect D*'s ability to deliver VOD as much.


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## jpl (Jul 9, 2006)

Jeremy W said:


> He said 50% of DirecTV subscribers would sign up for ESPN. Considering the fact that DirecTV is known as the provider for sports fans, it's a perfectly reasonable number.


So, Wealth TV goes for $4/month ala carte, but ESPN is only going to be $10/month? You REALLY think that's a reality?


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## jpl (Jul 9, 2006)

bakerfall said:


> OTA channels are also available, for free, via QAM for anyone who subscribes to cable internet. It is another, viable option with no antenna.


Actually, in most places, it's not. In SOME markets, SOME providers give free locals to internet customers, but that's far from the norm any more. Most providers are actually shutting that practice down, requiring that you get their TV package to get even locals.


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## jpl (Jul 9, 2006)

BattleScott said:


> I'll be more than happy to start making it more personal if that's the route you wan to go. But for now I'll let it be...
> 
> Let's assume I'm AT&T. I have a customer who pays me $30 for 3Mbps and another $80 for TV. That's $110.00. Out of that $80, I have to pay a portion to the content providers, let's say 25% (i'm sure it's more than that, but it really doesn't matter). That's $20 I have to pay out for that sub for doing nothing but providing a path for digital information. I could bump that subscriber to a $90 premium unlimited bandwidth account and break even from a revenue standpoint.
> 
> ...


This is wrong on a number of points. First, FiOS ISN'T currently doing that today. They're going to move to all IP, but they're currently not doing it for stuff aside from VOD. Second, U-Verse isn't really IP in the traditional sense. It's closer to SDV than what's really meant by IP. I think they call it IP partly because of marketing and partly so they can classify themselves as a non-cable company provider.

Next, I think your numbers are way off. 25% of the cost of the TV service goes to the content providers? I think it's MUCH higher than that. Probably closer to 75%. Next, you're missing the whole 'economies of scale' thing in this architecture. You're making a very invalid assumption - that you as an individual consumer would be seen the same way by these content providers as DirecTV is. Meaning, DirecTV has several million customers. They use that to negotiate collective rates with these content providers. The content providers make a slice PER SUBSCRIBER. Because DirecTV is guaranteeing that a content provider's channel will be accessible to several million customers, they can negotiate a very good rate on that channel. In this case size definitely matters. DirecTV can negotiate a better rate than Verizon because they have 5 times the number of TV customers. You, as a single customer, won't be able to do that. If you think you'll be able to pay even anywhere close to what DirecTV does for a channel you're dreaming. Besides, there's a big difference in the distribution set-ups.

With traditional cable/DBS, the service provider pays very little because they're giving the content provider access to lots of potential viewers. In other words, the content provider makes up for loss of revenue per customer with volume. They get less per customer but they can hit a ton more customers. In a true subscriber model, you're paying for dedicated, individual access. It's very different.


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## espaeth (Oct 14, 2003)

In the long term, IP Video doesn't really have a play to replace broadcast TV. Unicast feeds don't scale, as the amount of infrastructure required has a linear relationship to the number of viewers. If you have 10 million viewers, you need 10 million times the bandwidth of a single viewer and all of the supporting server hardware to facilitate that delivery. Of course, there is an IP-based solution to this problem with multicast, but the multicast argument is simply one of using a bigger hammer to drive a square peg into a round hole. Once you implement a multicast solution, you're left with the same real-time streaming solution you have with existing QAM / qpsk / 8PSK / etc delivery options, only with the added bonus of IP overhead and more expensive intermediate delivery hardware.

When people talk about IPTV today they like to reference things like Hulu. If you look at the top viewed content it is programs that have been aired on network TV, which is ridiculous from an efficiency standpoint. So you take a program that has already been digitally delivered to your house over the air in a 19.2mbps MPEG2 ATSC feed by public broadcast TV stations, probably over a cable line into your house on clear QAM, and from at least a half dozen different satellites that you could pick up with the appropriate hardware. Rather than investing in a more clever / cost effective way to capture one of those existing delivered feeds, we're focusing on network-based delivery? This is pure absurdity.

When it comes to one-off content like a massive library of movies (ala NetFlix), smaller audience material (ala Youtube), and backfilling lost/missing content the IP distribution model makes sense. For primary delivery of mass media content, we already have highly cost effective delivery solutions in place today.


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## Laxguy (Dec 2, 2010)

bakerfall said:


> I don't think anyone is saying that IPTV is going to kill traditional providers, that will probably never happen. However, it is naive to think that this trend is not going to continue to get more popular and more compelling. That may end up costing more, but it will never approach what a TV provider charges.


There are indeed those saying IPTV is lethal to cable, fiber and satellite.

I agree the trend will continue, but "never say never" as to charges: A la carte services almost always cost more than the dinner menu selections.


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## CCarncross (Jul 19, 2005)

Jeremy W said:


> He said 50% of DirecTV subscribers would sign up for ESPN. Considering the fact that DirecTV is known as the provider for sports fans, it's a perfectly reasonable number.


That still seems a little high. I'm a pretty big sports fan, but 90% of my sports watching is not on ESPN...


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## Laxguy (Dec 2, 2010)

Quote:
Originally Posted by Jeremy W 
He said 50% of DirecTV subscribers would sign up for ESPN. Considering the fact that DirecTV is known as the provider for sports fans, it's a perfectly reasonable number.



CCarncross said:


> That still seems a little high. I'm a pretty big sports fan, but 90% of my sports watching is not on ESPN...


See post 98.... the number signing up would be significantly less.


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## jpl (Jul 9, 2006)

Not to belabor things, but satelliteracer is right on the cost of build-out. Verizon spent over $20billion to roll out fios. It will be decades before they recoup that cost. Even with all that, there's a reason they haven't migrated to IP yet.

Overall, I think the impression that's left is that IP WILL take over the world. It won't. It's like waiting for solar/wind/geothermal to get rid of fossil fuels. Oil is still around because none of those other technologies can yet match it on price. This is very similar. Can it be done? Sure. Will customers be willing to pay the price to do it? Not when there are cheaper alternatives to getting what they want they won't. And I think that's the nub of it. It's doable, but very expensive. Especially since there are plenty of other mechanisms out there for getting access to these programs - something that espaeth nailed in that post.

I DO think the market will be vastly different in 5 years than it is today, but not in ways that many are predicting. I think you're going to see a further skewing as to who provides what and to whom. Here's what I mean by that. I'll use Verizon as an example. They're moving forward on making FiOS TV a streaming ap - they keep talking about making it available to those outside their traditional fiber footprint. Which means, in theory (assuming they allow it) you could watch FiOS TV on your Comcast internet connection.

But wait... it gets better. Because Verizon also just finished a build-out of a national fiber back-bone. What will they use that fiber for? Per their own releases, they're going to lease out space on that fiber for other companies to get to your home. So, in a way that makes my head just hurt, you could conceivably not only have FiOS TV on your Comcast internet service, but you could have Comcast TV service on your Verizon fiber!

I think that will change how this business is currently shaped. You're likely to see some strange marriages pop up as an avenue for getting content to your house opens up. But it won't be free. That's the thing. One thing that's been missing from the Netflixes and the Google TVs of the world is what? They have issues getting moving because they lack a distribution network. On the one hand it makes it easier for them since they don't have the cost/mess associated with building and maintaining their own networks. But in order to push past where they are now, and to really be a force in the marketplace, they need reliable/dedicated distribution. Some are predicting that this will lead companies like Google to build their own fiber networks. Maybe. I don't think so. I think you're going to see a proliferation of fiber providers, giving companies like Google access to a distribution network without the hassle of providing one themselves. But again, it won't be free. They'll gain in terms of having an avenue to get to your home, but that comes at a cost.


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## BattleScott (Aug 29, 2006)

jpl said:


> This is wrong on a number of points. First, FiOS ISN'T currently doing that today. They're going to move to all IP, but they're currently not doing it for stuff aside from VOD. Second, U-Verse isn't really IP in the traditional sense. It's closer to SDV than what's really meant by IP. I think they call it IP partly because of marketing and partly so they can classify themselves as a non-cable company provider.
> _-No they are not doing IPTV in it's truest sense, but my point is that they are delivering the video services over the same medium, using the same technolgies needed for IPTV. Existing UVerse and FiOS installations provide the necessary bandwidth to support a practical IPTV scenario like I am describing. Instead of paying $30 for internet and another $80-$100 for TV, they will simply consolidate the 2 pipes and charge $99.99 for the straight Premium ISP service. _
> 
> Next, I think your numbers are way off. 25% of the cost of the TV service goes to the content providers? I think it's MUCH higher than that. Probably closer to 75%.
> ...


...


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> thanks for keeping it non personal. Couldn't do it, huh?
> 
> I enjoyed the debate. Until now. Too bad you can't have a civilized discussion of disagreement.


Sorry, I thought "joking" was OK now...


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> I could not disagree with you more and working well into my 2nd decade in the television space, I'm just going to politely say your math is wrong and your assumptions....significantly wrong.


So if PayTV were gone tomorrow, replaced by a direct access model, you don't think ESPN would be in 50% of the ~90M homes?


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> It does matter. 1st, the margin rate you are using as an example is fantasy land. It DOES MATTER.
> _- Really? Your employers 2010 Financials actually put that figure much higher. Are you suggesting they are mis-stating their financials?_
> 
> Secondly, the cost to build out that infrastructure is HUGE. There's a reason why FIOS and UVERSE aren't building out any more areas right now, at least not new markets. The cost. The amount of investment they have to make to each home and the years to make it back is a daunting scenario.
> ...


...


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## Shades228 (Mar 18, 2008)

BattleScott said:


> So if PayTV were gone tomorrow, replaced by a direct access model, you don't think ESPN would be in 50% of the ~90M homes?


I don't think so. ESPN has lost it's edge with the other network stations being out there (MLB, NBA, NFL) and at the price they would want to charge they wouldn't keep it. I could see that number as total in a year but I think their sub numbers would fluctuate based on sports seasons.


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## jpl (Jul 9, 2006)

Not sure why you think using 25% of cost going to content service providers is less favorable to your argument (sounds like you said you were erring on the side of being overly cautious). If I pay $100/month now for TV service, what you're saying is that my TV service provider is taking $25 of that and using it to pay for content. So... if I go to buy that content myself, it shouldn't be horribly expensive. But if that number is really much higher - say 75%... then that means that my company is payin $75 for the same content vs. $25. How do you figure that by upping that percentage I'm making your point for you? I don't see that.

I also think that you're discounting the cost of distribution. Content providers HAVE to have a mechanism to get you the content. If ESPN were to go to a pay for subscription model, you have to assume that a customer can actually get their stuff. If I can't... then what? Does ESPN do a build-out of a distribution network to get their stuff to me? Essentially these cable companies are simply providing the distribution mechanism for this programming.

So the question really becomes - what's the most efficient way of getting me your content? What's the best way to allow you to do it at the lowest cost possible so that I, as a consumer, am willing to pay the money to get your content? That's really the nub of it, I think. There are already a plethora of distribution methods out there. They work, and they're actually pretty cheap. There has to be SOME incentive for customers to want to move to a cut-the-cord scenario. I'm sorry, but I just don't think 'price' is it. And if it's not, then you have to ask: what will IP give me that I can't get now - what will they give me that makes it worth the extra money to get their stuff via IP?

Flexibility, for sure. But are folks willing to pay to have that kind of watch-it-anywhere-I-want flexibility for TV shows? I don't think so. Not when you have technology, like DVRs, that make that approach largely unnecessary.

I think IP will continue to grow. You'll see more and more stuff available on line. But it will exist side by side with other methods of distribution. I mean I have the ability to stream stuff now... I have a pretty fast internet connection (35 Mbps down, with no caps, no throttling, and no slow periods), and I do stream... a little. Not a whole lot, to be honest. Why? It's just not that convenient for me. I would MUCH rather just flip on the TV and watch rather than fire up my streaming device, wait for it to connect to the server that it's getting stuff from, and wait for it to start coming down. That's fine for things like movies, but for TV shows? Unless you're doing it with a show that's not on the air anymore, I just don't see it.


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## Laxguy (Dec 2, 2010)

BattleScott said:


> ...


When you reply as you've done here, it makes it difficult to reply, as there's no quoting of your post. There is a method of breaking up a long piece into separate quotes so you can reply interspersed.

Also, it's more readable than your method of red type to distinguish who says what.


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## susanandmark (Feb 15, 2007)

I agree that IPTV, in its current form, won't overtake cable and satellite as the prime in-home entertainment delivery system for the bulk of Americans. But, the landscape is definitely changing and if television's lumbering dinosaurs, which at this point cable, and even satellite, are, don't change their business models along with the changing landscape, they could cease to exist. These adjustments could involve smaller niche markets and, gasp, lower profits per subscriber, as well as new content delivery models. Clinging to the "but this is how it has always worked" model is a recipe for failure, like it or not. I have no doubt that existing models will fight tooth and nail to maintain their dominance, what I'm skeptical about is whether or not that is a fight they can win. 

When my just-turned-four-year-old son is old enough to live on his own and choose, and pay for, his own television services, I'd be pretty shocked if his choices are the same as they were for me, or even identical to what's available now. Which is a pretty big change ... Since the TV options available when I was a preschooler, were pretty much the same as the TV options (delivery, if not channel count) I had when I left home. Things are moving much, MUCH faster now than in the days before the Internet. (And, no, I'm not old enough that my college days pre-date the Internet, but they do pre-date all but dial-up.)


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## Laxguy (Dec 2, 2010)

Quote:
Originally Posted by Satelliteracer 
It does matter. 1st, the margin rate you are using as an example is fantasy land. It DOES MATTER.


> - BY Battle:
> Really? Your employers 2010 Financials actually put that figure much higher. Are you suggesting they are mis-stating their financials?


Margin rates for what, exactly? We can infer from previous posts of course, but it really helps to be specific.

SR isn't suggesting anything of the sort. Sheesh.


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## jpl (Jul 9, 2006)

susanandmark said:


> I agree that IPTV, in its current form, won't overtake cable and satellite as the prime in-home entertainment delivery system for the bulk of Americans. But, the landscape is definitely changing and if television's lumbering dinosaurs, which at this point cable, and even satellite, are, don't change their business models along with the changing landscape, they could cease to exist. These adjustments could involve smaller niche markets and, gasp, lower profits per subscriber, as well as new content delivery models. Clinging to the "but this is how it has always worked" model is a recipe for failure, like it or not. I have no doubt that existing models will fight tooth and nail to maintain their dominance, what I'm skeptical about is whether or not that is a fight they can win.
> 
> When my just-turned-four-year-old son is old enough to live on his own and choose, and pay for, his own television services, I'd be pretty shocked if his choices are the same as they were for me, or even identical to what's available now. Which is a pretty big change ... Since the TV options available when I was a preschooler, were pretty much the same as the TV options (delivery, if not channel count) I had when I left home. Things are moving much, MUCH faster now than in the days before the Internet. (And, no, I'm not old enough that my college days pre-date the Internet, but they do pre-date all but dial-up.)


That's the thing... I don't think the industry is standing still at all. The changes that have happened over the last few years have been nothing short of astounding. Go back 10 years ago, and around here even digital cable was just in its infancy. SD was it. There was no real HD. And you got what 70 channels. DVRs were available but far from ubiquitous like they are today. VOD was barely existent (anyone else remember Comcast bragging about how they had what is now seen as the precursor to VOD, where a small select set of shows would just cycle every half hour?). When I first moved to DirecTV (in 2002) the thing that I thought was just the coolest innovation over what I was used to? The on screen guide!

Now there are hundreds of channels... everyone has HD and now 3D. Everyone is developing a VOD platform. IP has started making inroads (Netflix did exist back then, but streaming to your house just seemed like stuff of fantasy).

I'm not saying these guys wouldn't drag their feet if they could. But competition in a very fierce market won't allow them to do that and stay in business. What has me dizzy isn't the idea that this stuff is stagnant... it's just how fast this stuff has, and continues to, change.


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## Satelliteracer (Dec 6, 2006)

raott said:


> If metered bandwidth affect Netflix, it will also affect D*'s ability to deliver VOD as much.


Correct, but VOD is not D*'s core business while it absolutely will be for Netflix.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> So if PayTV were gone tomorrow, replaced by a direct access model, you don't think ESPN would be in 50% of the ~90M homes?


Battle, here's what you are missing. Again, trying to be respectful here.

ESPN as do other content providers have minimum guarantees in terms of penetration. So let's use very simple math to explain this.

Suppose ESPN has a deal with EVERY MSO that they must be penetrated at 90% to all their customers. Meaning, if you have 20M customers, ESPN has to delivered in packages to 18M of those customers. That is guaranteed revenue for them whether people like ESPN or hate ESPN, whether they know the ball is round or whether they sleep, drink, eat sports 24/7.

That's just one of the nuances you are missing. If you go to an a la carte world, where ESPN is running their business on 90% penetration across basically 110 million paid tv homes, what happens if customers now get to choose if they want ESPN?

I've had conversations with ESPN buddies of mine that said a la carte if it happened TODAY they would charge $29.99...TODAY. They need to cover that revenue which makes them go, which fuels their ability to pay for rights fees, etc, etc. They cannot operate in a world from an efficiency and STABILITY perspective of crossing their fingers and hoping 50% or 60% or 70% of the a la carte people take the service. Their entire operation is fueled on knowing guaranteed income is coming their way through those penetration requirements. That stability and guaranteed growth allows them to do what they do, bid on the properties they do, etc, etc. There is no way they could "be ESPN" by hoping and praying a certain number of customers buy their service a la carte. They need to know EXACTLY what they're getting each and every year which is what they have now across every MSO. It essentially becomes a fixed revenue number they can book and then strategize from their.

This is not the case for many other content providers which must rely on people actually buying their service (HBO, Starz, Smithsonian, etc).

It goes many layers even deeper than the example above, but the price you will pay for ESPN (and trust me, when I say ESPN I really mean you are paying for Classic, ESPN, ESPN2, ESPNews, you'll subsidize ESPN3 because that's what they do) will be FAR FAR FAR higher than you state.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> ...


Where in the 2010 D* financials does it break out margin by each channel?

I think you are confusing OPBDA with content margins, which is what I was referencing.


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## Doug Brott (Jul 12, 2006)

BattleScott said:


> So if PayTV were gone tomorrow, replaced by a direct access model, you don't think ESPN would be in 50% of the ~90M homes?


I think you'd be hard pressed to get to ~45M homes in the US via high speed Internet .. Heck, 10% of the country can't even get (true) HSI today so they'd have to go without even if they wanted it. And what are the odds that even if you got to that 45M that every single one of them would take ESPN?


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## Doug Brott (Jul 12, 2006)

raott said:


> If metered bandwidth affect Netflix, it will also affect D*'s ability to deliver VOD as much.





Satelliteracer said:


> Correct, but VOD is not D*'s core business while it absolutely will be for Netflix.


And don't forget that DIRECTV has their own "paid for" satellites that can deliver content to everyone at the same time .. DIRECTV really will not even be affected by metered bandwidth as much as Netflix with VOD. It will be an effect, yes, but DIRECTV is much better equipped to mitigate that problem with the alternate (Satellite) deliver method.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> Sorry, I thought "joking" was OK now...


If you truly meant that as a joke..and I am reading this as you did (my "what you are smoking" comment is a normal joke to mean I think you are way off; pretty much a standard line that is never meant personally or to impart harm), then I apologize for misreading you.


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## tonyd79 (Jul 24, 2006)

susanandmark said:


> I agree that IPTV, in its current form, won't overtake cable and satellite as the prime in-home entertainment delivery system for the bulk of Americans. But, the landscape is definitely changing and if television's lumbering dinosaurs, which at this point cable, and even satellite, are, don't change their business models along with the changing landscape, they could cease to exist. These adjustments could involve smaller niche markets and, gasp, lower profits per subscriber, as well as new content delivery models. Clinging to the "but this is how it has always worked" model is a recipe for failure, like it or not. I have no doubt that existing models will fight tooth and nail to maintain their dominance, what I'm skeptical about is whether or not that is a fight they can win.
> 
> When my just-turned-four-year-old son is old enough to live on his own and choose, and pay for, his own television services, I'd be pretty shocked if his choices are the same as they were for me, or even identical to what's available now. Which is a pretty big change ... Since the TV options available when I was a preschooler, were pretty much the same as the TV options (delivery, if not channel count) I had when I left home. Things are moving much, MUCH faster now than in the days before the Internet. (And, no, I'm not old enough that my college days pre-date the Internet, but they do pre-date all but dial-up.)


I do not disagree with you that new TECHNOLOGIES will be brought into play but, just as DirecTV added VOD to keep up in the market place and Netflix added streaming to be ahead of the trends, existing companies can make use of diversified delivery mechanisms to deliver content.

A small example. Fios has pretty much run out of room for linear HD on a national basis without changing technologies (either IPTV-like, actual IPTV or a change to MPEG4 is coming soon or they are bound worse than DirecTV right now). However, I stumbled last night onto an On Demand version of Reelz Channel that has HD content (including the Kennedy's mini-series) even though Fios does NOT have Reelz HD in linear mode. An example of diversification as a result of necessity.

The new technologies will take a foothold but by 2020, at least, they will not be the only method (as proposed by a minority here) or even a majority delivery platform. They will still be additive. As will all the delivery mechanisms for some time.

I think you will see more integration of the various delivery mechanisms. Some of which will be used to deliver push (linear) programming, some on demand programming.

But as a bottom line, with few exceptions, I still see the major players as companies to be around for quite some time. You are right, if they do not dodge and dive with the trends and tech, they may go belly up and one or two upstarts may grow into a prime player, but by and large, you will see the same cast of characters.

Take Comcast for instance. While they are about world domination, their actual plan is complete diversification. I actually think they were worried a few years ago about becoming obsolete. So they leveraged their (excellent in a lot of places) internet backbone with their linear delivery systems to have "more HD choices than anyone else" while, at the same time, diversifying into programming and the biggest push delivery system of all, a broadcast network.

As today we get programming and information from multiple sources, the same will hold in 2020 and beyond.


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## tonyd79 (Jul 24, 2006)

BTW, I am heartened to see so many people making the same arguments I was making (most of the posts better explaining the issues than I did!). Especially the same arguments coming from an insider. Not crowing, just enjoying that outside observations on something I haven't given much real though to are based in reality. 

None of us can truly foresee the future, but it is nice to have a truly analytical talk about this. Thanks to all, even those who disagree with me (heck, especially them..makes it more lively).


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## BattleScott (Aug 29, 2006)

jpl said:


> Not sure why you think using 25% of cost going to content service providers is less favorable to your argument (sounds like you said you were erring on the side of being overly cautious). If I pay $100/month now for TV service, what you're saying is that my TV service provider is taking $25 of that and using it to pay for content. So... if I go to buy that content myself, it shouldn't be horribly expensive. But if that number is really much higher - say 75%... then that means that my company is payin $75 for the same content vs. $25. How do you figure that by upping that percentage I'm making your point for you? I don't see that.
> .


I am not speaking to the point about what I would expect to pay. I am speaking to the Cost of doing that business for the provider.

Lets use Verizon as an example since I think we can at least all agree that they are the best positioned at delivering VERY high residential bandwidth.

If you were Verizon and you had the following business options at your feet, which would you choose:

A: Subscriber pays 100.00 per month for FiOS TV and a 8-12Mbps ISP service. Of that 100.00 you have to pay out 25% to cover the COGS on the carriage agreements. You have now made a net of $75 on that customer.

B. Subscriber pays $79.99 for a premium 50 Mbps ISP account and gets their content wherever they find it. You now have made $79 on the same subscriber and do not have to turn any of it over to 3rd party. At the same time, that subscriber now has $21 to spend on pay content to replace what they were getting from your TV service.

Why the 25% figure supports my position is that the higher that amount, the lower that premium ISP price could be and the higher the subscribers monthly content budget could for the same $100 window.

As the demand for on-line content grows over the next decade, this is where I see the ISPs who are struggling to make headway in the PayTV arena heading. As the broadband penetration increases in capacity and coverage, this is also going to make it more attractive for content providers to expand their avaible on-line content. Maybe 2020 is a slightly optimistic prediction for when this will be the dominant paradigm, but it is coming...


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## Satelliteracer (Dec 6, 2006)

Right on queue, an article today on ESPN and the $5 billion they receive collectively from TELCO, Satellite, Cable. Article talks about how ESPN has to be careful not kill the Golden Goose and jeopardize that guaranteed revenue while exploring other areas to deliver content. This is the issue that every programmer has right now. 

"ESPN is seeking to "take advantage of technology to serve the needs of our fans" while being "respectful" of their current cable, satellite and IPTV distributors. My rough estimate is that MVPDs (multichannel video programming distributors - cable, satellite and telco IPTV) are paying well over $5 billion a year in carriage fees to Disney just for the core ESPN network itself, something that does certainly command respect."


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> Where in the 2010 D* financials does it break out margin by each channel?
> 
> I think you are confusing OPBDA with content margins, which is what I was referencing.


By channel doesn't matter, but we already know that the ESPN agreement is somewhere in the $4/sub range. Not hard to extend that to 20M subs = $80M.

The total figure for Broadcast Programming costs was ~9B for 2010. Renvenues for 2010 were 20B. Thats 45%. Assume there are many costs included in that total that aren't carriage specific costs (101, HotPass, etc., etc.) I'll even give you 50% of it and that's still 22.5% for carriage.

I don't think my numbers are too far off.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> Right on queue, an article today on ESPN and the $5 billion they receive collectively from TELCO, Satellite, Cable. Article talks about how ESPN has to be careful not kill the Golden Goose and jeopardize that guaranteed revenue while exploring other areas to deliver content. This is the issue that every programmer has right now.
> 
> "ESPN is seeking to "take advantage of technology to serve the needs of our fans" while being "respectful" of their current cable, satellite and IPTV distributors. My rough estimate is that MVPDs (multichannel video programming distributors - cable, satellite and telco IPTV) are paying well over $5 billion a year in carriage fees to Disney just for the core ESPN network itself, something that does certainly command respect."


Hmmm, that works out to about $4.60 per PayTV subscriber per month. 
45 Million at 10.00 a month would 5.4B...

I would read that as ESPN is carefully looking at alternatives to current structure but doesn't want to make the current providers to antsy when the next carriage negotiations come around.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> Battle, here's what you are missing. Again, trying to be respectful here.
> 
> ESPN as do other content providers have minimum guarantees in terms of penetration. So let's use very simple math to explain this.
> 
> ...


This is certainly their perspective today, no denying that. It is my belief that once they begin to learn more about the emerging "on-line" business potential, they will begin to see that they will easily be able to replace that revenue and then some. Will it happen by 2020, maybe not, but it will happen.



Satelliteracer said:


> This is not the case for many other content providers which must rely on people actually buying their service (HBO, Starz, Smithsonian, etc).


Premium movie channels are already replacable for less money per month.



Satelliteracer said:


> It goes many layers even deeper than the example above, but the price you will pay for ESPN (and trust me, when I say ESPN I really mean you are paying for Classic, ESPN, ESPN2, ESPNews, you'll subsidize ESPN3 because that's what they do) will be FAR FAR FAR higher than you state.


I disagree, respectfully.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> Hmmm, that works out to about $4.60 per PayTV subscriber per month.
> 45 Million at 10.00 a month would 5.4B...


And yet, a channel that is pennies per month to cable is charging $4 (or is it $4.99) for streaming of the same exact content (Wealth TV).

Seems that the channels themselves think the ratio is not 2 to 1 but is more like 100 to 1. It is only 1 datapoint, however. But it does show intent more clearly than the vision of a customer who is optimistic on the economics.

Why do you keep ignoring the cost of the extra infrastructure? Not to mention the maintenance and customer services increases? Or as SatRacer pointed out making the price where you can depend on a revenue stream. A consistent revenue stream like ESPN has today is a very important commodity in business planning.

Where it breaks down is that you keep focusing on the technology and ignore the human factors and the economics of the situation. The analysis of "they get this much money and would settle for this much" is flawed in that it is not even first level deep. Doesn't account for operating costs or stability or how this plays out in the market place when everyone is buying individual programming from various sources.

And, finally, the number you are using is just for ONE ESPN channel. Not all of them. The prime ESPN channel is the most expensive but they do charge for ESPN2, ESPNU, and ESPN Classic.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> Premium movie channels are already replacable for less money per month.


And yet the premium channels still exist in full force. In fact, there are mor of them than ever. Doesn't that tell you that your social/economic model is flawed?

And the cheaper alternatives depend on cheap internet access without caps and sweetheart deals from studios that are evaporating. Not to mention that the Netflix streaming does NOT provide recent movies and is largely going backwards on that as studios and networks pull out (Starz pulling out of Netflix).


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> And yet, a channel that is pennies per month to cable is charging $4 (or is it $4.99) for streaming of the same exact content (Wealth TV).
> 
> Seems that the channels themselves think the ratio is not 2 to 1 but is more like 100 to 1. It is only 1 datapoint, however. But it does show intent more clearly than the vision of a customer who is optimistic on the economics.
> 
> ...


No, where it breaks down is your inability to see changes happening around you. You act as if everyone is still on a Prodigy dial up account or something. Broadband access is as prevalent today as paytv itself. The only thing missing is content.

Why do you keep ignoring the fact that these things are all changing as we speak and by 2020 the landscape is going to be completey different. As I said before, quit basing what 2020 might be by what is in place today.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> And yet the premium channels still exist in full force. In fact, there are mor of them than ever. Doesn't that tell you that your social/economic model is flawed?
> 
> And the cheaper alternatives depend on cheap internet access without caps and sweetheart deals from studios that are evaporating. Not to mention that the Netflix streaming does NOT provide recent movies and is largely going backwards on that as studios and networks pull out (Starz pulling out of Netflix).


No it tells me what we all already know. People are still using PayTV as their primary source for content.


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## sigma1914 (Sep 5, 2006)

BattleScott said:


> No, where it breaks down is your inability to see changes happening around you. You act as if everyone is still on a Prodigy dial up account or something. Broadband access is as prevalent today as paytv itself. The only thing missing is content.
> 
> Why do you keep ignoring the fact that these things are all changing as we speak and by 2020 the landscape is going to be completey different. As I said before, quit basing what 2020 might be by what is in place today.


Your claim about broadband access being so prevalent is a bit misleading when you look at what speeds are considered broadband. The FCC defined broadband as any connection above 768 kbit/s. You need A LOT more bandwidth than that to stream.


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## Satelliteracer (Dec 6, 2006)

sigma1914 said:


> Your claim about broadband access being so prevalent is a bit misleading when you look at what speeds are considered broadband. The FCC defined broadband as any connection above 768 kbit/s. You need A LOT more bandwidth than that to stream.


Especially when multiple people in the house want to watch DIFFERENT programming at the same time, or record different programming at the same time.

Big pipe, a lot of money. It will get here, but will the programmers play in that sandbox and cut off their noses and all that revenue in the process?


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## tonyd79 (Jul 24, 2006)

"BattleScott" said:


> No, where it breaks down is your inability to see changes happening around you. You act as if everyone is still on a Prodigy dial up account or something. Broadband access is as prevalent today as paytv itself. The only thing missing is content.
> 
> Why do you keep ignoring the fact that these things are all changing as we speak and by 2020 the landscape is going to be completey different. As I said before, quit basing what 2020 might be by what is in place today.


No I don't. I keep saying the technology is going to play a part. It already does. But technology alone does not drive the marketplace.

And I see the changes that are needed. The landscape we have today is not scalable for it to become the majority solution in 9 years. You cite numbers of dsl and up households yet ignore the weak backbone behind them and miss the economies of scale that drives broadcast.

While there are still technology challenges, I agree that most can be solved within a decade but what I don't see changing completely like you claim are the financials behind it all and the choices of individuals.

You have to look at the past, the future and the present to figure out trends. And take into account technology, business and people's habits and choices.

I think you are only looking at the technology side.


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## Laxguy (Dec 2, 2010)

Where do your broadband figures come from? How is BB defined?


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## tonyd79 (Jul 24, 2006)

"Satelliteracer" said:


> Especially when multiple people in the house want to watch DIFFERENT programming at the same time, or record different programming at the same time.
> 
> Big pipe, a lot of money. It will get here, but will the programmers play in that sandbox and cut off their noses and all that revenue in the process?


No. The fios's and comcasts and others will shift their provider paradigm rather than just become a pipeline. Directv and dish have a bigger challenge in this space but it can be accomplished as well.

It is already happening with on demand.

And that is what so maddening in this discussion. The cable and satellite systems are already playing in this space. That part of the future that battlescott is projecting is already here. And the big boys are not morphing into a pipeline only.


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## espaeth (Oct 14, 2003)

BattleScott said:


> Broadband access is as prevalent today as paytv itself. The only thing missing is content.


The background infrastructure is also missing to support large numbers of simultaneous streams. You have to keep in mind that broadband network access is affordable because it's massively oversubscribed.

In the case of cable networks, you have 200-500 subscribers per downstream channel group. In DOCSIS 1.1/2.0 networks that means 200-500 people sharing 38mbps of downstream bandwidth, in a DOCSIS 3.0 network the aggregate bandwidth increases to 152mbps (4 channel bonding). Still, at 5mpbs for an HD stream, that tops out at 7 streams (out of 200-500 subscribers) on a DOCSIS 1.1/2.0 network, or 30 streams out of 200-500 subscribers on a DOCSIS 3.0 network.

To see the massive impact the widescale adoption of IP video would have on Internet traffic, you only need to consider this:



Wired Article said:


> Netflix instant accounts for 20 percent of all non-mobile internet use during prime time in the United States, according to a new study.
> 
> Streaming media - real-time entertainment - accounts for 43% of peak period traffic in the U.S., according to Sandvine, which helps ISPs manage their networks and thus has access to buckets of information about usage patterns.
> 
> But Netflix alone accounts for nearly half of that between 8 and 10 p.m., and *that usage comes from only 1.8 percent of the service's subscribers.*


Source: http://www.wired.com/epicenter/2010...unts-for-20-percent-of-peak-u-s-bandwith-use/

Netflix had 16 million total subscribers when that was printed, so that means that about 288,000 folks streaming from Netflix were driving 20% of Internet bandwidth consumption on a nightly basis in the US.

Even at slow adoption rates, the impact here is absolutely massive.


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## Santana (May 12, 2010)

BattleScott said:


> Premium movie channels are already replacable for less money per month.


I guess it would depend on how much of the programming you are watching. I watch almost all of Showtime's original programming, some of HBO's, and a couple of Starz', plus several movies each month. Considering the prices they sell some of these shows for on Blu-ray, or the prices they charge to download each episode, I am getting much more for my money by paying for the premium channels.



BattleScott said:


> No, where it breaks down is your inability to see changes happening around you. You act as if everyone is still on a Prodigy dial up account or something. Broadband access is as prevalent today as paytv itself. The only thing missing is content.


Depends on what you mean by broadband. I would hardly call my connection high-speed, but it still qualifies as broadband. I was previously with Comcast and was supposed to be getting up to 6Mbps, but never got higher than about 700Kbps. I am now with a DSL provider and get about a consistent 800Kbps. Broadband? Yes. But hardly enough to stream decent quality video from Netflix. I would gladly pay more for a higher speed connection, but it just isn't available in my area.


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## BattleScott (Aug 29, 2006)

I'm recessing for the Easter Holiday and will return on Monday. At such time I will only entertain responding to posts that allow for the continuing advancements in broadband penetration and average speeds, as well as continuing developments in video streaming efficiencies during the course of the next decade.

If your posts attempt to dispute my vision of the dominant home media access model in 2020 merely by citing limitations present today, without offering an explanation as to why we should not expect to see any significant changes to those limitations in the coming years, I simply will no longer respond to them, it is just getting too monotonous.

Happy Easter to all!


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## sigma1914 (Sep 5, 2006)

BattleScott said:


> I'm recessing for the Easter Holiday and will return on Monday. At such time I will only entertain responding to posts that allow for the continuing advancements in broadband penetration and average speeds, as well as continuing developments in video streaming efficiencies during the course of the next decade.
> 
> If your posts attempt to dispute my vision of the dominant home media access model in 2020 merely by citing limitations present today, without offering an explanation as to why we should not expect to see any significant changes to those limitations in the coming years, I simply will no longer respond to them, it is just getting too monotonous.
> 
> Happy Easter to all!


Translation - My vision is right and everyone else who disagrees will be ignored. Healthy discussion is too difficult unless you support my ideas.

Happy Easter.


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## espaeth (Oct 14, 2003)

BattleScott said:


> If your posts attempt to dispute my vision of the dominant home media access model in 2020 merely by citing limitations present today, without offering an explanation as to why we should not expect to see any significant changes to those limitations in the coming years


One simple question:

What is the light at the end of the tunnel here? Say the companies invest the billions of dollars required to augment the IP infrastructure to support wide-scale IP streaming, aren't you essentially throwing money at new infrastructure to deliver exactly the same service you have today?


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## tonyd79 (Jul 24, 2006)

espaeth said:


> One simple question:
> 
> What is the light at the end of the tunnel here? Say the companies invest the billions of dollars required to augment the IP infrastructure to support wide-scale IP streaming, aren't you essentially throwing money at new infrastructure to deliver exactly the same service you have today?


Don't you get it? A handful of people have streaming today so that means the infrastructure for scaling up by several factors can easily be handled by a yet-to-be determined compression algorithm that no one is testing yet. You just don't have the vision. Therefore, as all research and development and infrastructure costs are free, the prices to the consumer will come down and the companies that are making money today are going to lower all their prices so all consumers can be happy.

Sorry for the sarcasm but this is what I am hearing.

Actually, I am thinking that by 2030, we will be using some technology we never even thought of before. Not so long ago, we all thought that hi def DVDs (either Blu Ray or HDDVD) were going to put DVDs out of business. Well, Blu Ray "won" and is partially getting squeezed by HD streaming. Sometimes technology moves even faster than our friend here suggests.

But what do I know? I only know what is happening right here and now.


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## Skyboss (Jan 22, 2004)

bonscott87 said:


> Eventually IPTV will be the main way people get TV.


If they don't do something about picture quality - and I mean something substantial, then no, they won't be. You Gen Y'ers and your sub par sound quality may have gotten your way with music downloads, but its come at the expense of quality in the product. Oh, and thanks for that... :nono:



PCampbell said:


> Out of the big citys good high speed ISPs are not as common and I do not see that changing soon. Almost all ISPs have or are adding caps.


This is the bigger barrier to IPTV acceptance.



rayik said:


> Not trying to argue, but we find with 3.8 mb streaming from netflix the quality is just as good as D*. Overall quality for HD is quite good. Even 1.5 mb streaming is not bad.


Not a chance bro. :nono2:



BattleScott said:


> I'm recessing for the Easter Holiday and will return on Monday. At such time I will only entertain responding to posts that allow for the continuing advancements in broadband penetration and average speeds, as well as continuing developments in video streaming efficiencies during the course of the next decade.
> 
> If your posts attempt to dispute my vision of the dominant home media access model in 2020 merely by citing limitations present today, without offering an explanation as to why we should not expect to see any significant changes to those limitations in the coming years, I simply will no longer respond to them, it is just getting too monotonous.
> 
> Happy Easter to all!


LOL. Stay on "Holiday". 

When you come back - because no one this self absorbed can possibly stay away for too long - consider that not everyone lives in the "big city" and has access to even a tenth of that bandwidth today or will be even close to having said access in 9 years time, or 20 for that matter. Try to show a little class too, or maybe you just have to grow up. :nono2:

But by all means, do come back in 2020 so we can at least tell you that we told you so.



tonyd79 said:


> Actually, I am thinking that by 2030, we will be using some technology we never even thought of before.


Yeah, but for that to be possible, we're probably looking at some sort of wireless technology that can be delivered everywhere or its a non-starter. Problem is, there is only so much frequency in the spectrum.


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## Tom Robertson (Nov 15, 2005)

Some thoughts in other directions:

IPTV works best for "I want it now, at my time" content.
IPTV completely fails for "10M people all want the same content live". (Sports especially.)

Sat TV and Cable work best for the "10M people" because they broadcast to an unlimited number of people simultaneously. IPTV uses one pipe per receiver per channel/stream/event (whatever you call it.)

Right now, most TV is still watched live or very nearly live. That will continue to shift for many things, but there still be large chunks of live content that just doesn't individually stream yet.

So will the IP backbone be capable of 100M homes x 2 or more streams by 2020? Possibly. But will ESPN be willing to spend the $1B it will take to source that much IP traffic by then? (Just a nice big number guess.) Right now they have the infrastructure to send their content to all 110M families for pennies, using broadcast technologies.

I guess my overall feeling is BattleScott has some good points, but I don't see a wholesale change. MSO's will still operate. DIRECTV will still be the coolest kid on the block. 

Yet there will be more and more libraries available on demand via many different means. People will be able to adjust their costs with more options.

Cheers,
Tom


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## Santana (May 12, 2010)

BattleScott said:


> I will only entertain responding to posts that allow for the continuing advancements in broadband penetration and average speeds, as well as continuing developments in video streaming efficiencies during the course of the next decade.


Why is 10 years always the magic number that is going to solve all of the current technological problems of today? I applaud your optimism, but I am using roughly the same technology today for my internet service as was in place ten years ago. Qwest has been promising to upgrade my area for the last five of those years.


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## HerntDawg (Oct 6, 2008)

As long as there is still OTA, the networks will control TV.


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## hdtvfan0001 (Jul 28, 2004)

I suspect that IPTV/streaming success will be based on the two things most technology items are based on - price and choice. 

In this case, choice centers around bandwidth choice.

As the trend continues toward bandwidth limits/caps, and infrastructure rollout expenses result in static or higher costs...this seems not to bode well for the future of IPTV/streaming.

Then again...there's an even bigger picture - which is how does this alternative delivery channel compare with traditional channels such as satellite and cable?

There are alot of dynamics going on concurrently that make forecasting hazy at best.


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## Game Fan (Sep 8, 2007)

One thing is for sure, it's going to be interesting to see how it all shakes out. For someone like me, who lives in the "sticks" iptv is not a good option, at this point.


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## wmb (Dec 18, 2008)

tonyd79 said:


> Don't you get it? A handful of people have streaming today so that means the infrastructure for scaling up by several factors can easily be handled by a yet-to-be determined compression algorithm that no one is testing yet. You just don't have the vision. Therefore, as all research and development and infrastructure costs are free, the prices to the consumer will come down and the companies that are making money today are going to lower all their prices so all consumers can be happy.
> 
> Sorry for the sarcasm but this is what I am hearing.


I know that what you are hearing is cause for sarcasm, but the belief is not without good reason... it fits the history of the computer industry in general. Moore's law has held for 45 years and despite predictions that the technology has reached its limits. And, to make matters worse, computers are cheaper and more capable today than ever before, and they keep getting cheaper and more capable. Over this time, many companies have recovered R&D costs. Yet, along the way, numerous sock puppets were trampled under.

Seems that most of the arguments against IPTV have been that a viable business model has not been found, not that technology won't allow it. Once the content providers figure out how to make money out of it, IPTV will take off.


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## adkinsjm (Mar 25, 2003)

If people are hoping for a-la-carte direct delivery of a network, isn't that missing the point of IPTV? I know some producers would like to bypass networks entirely, but for most shows, that economic model won't work because they need guaranteed money as with Satracer's ESPN comments.

I don't think the producers of Deadliest Catch have the mass appeal to sell directly to viewers and make a profit. Same goes with 99 percent of shows on pay TV. Not enough mass appeal to make a go of it independently. Networks work because they aggregate content and leverage the content with advertisers and pay TV companies.

Look at Internet shows that already bypass networks, TWIT and Revision3. Those shows look low rent and wouldn't last at pay TV. In fact, those some of those same hosts were already part of the failed TechTV.


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## tonyd79 (Jul 24, 2006)

wmb said:


> Seems that most of the arguments against IPTV have been that a viable business model has not been found, not that technology won't allow it. Once the content providers figure out how to make money out of it, IPTV will take off.


That is close to the argument. But there are several factors. Even if they figure out how to make money on it, there is the issue of infrastructure that does not exist. The investment in that is a big hurdle that needs to be overcome. And it is doubtful that it is a high priority item as, from a business perspective, the current system is not broken. The whole argument FOR a shift by 2010 is to make it cheaper for the consumer. That does not exactly float the boat for business. Large upfront cost to solve a problem that doesn't exist.


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## Paul Secic (Dec 16, 2003)

sigma1914 said:


> I don't agree. By then, there'll be more bandwidth caps on ISPs. Many families like just having the tv on for hours and that's going to suck up cap room.


They're capping here already..


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## CCarncross (Jul 19, 2005)

Here too. While I see the potential for internet delivery, it seems like the way things are going now, that with the caps and so many that can't get enough bandwidth to their houses yet, at least not in the foreseeable future, it really can't be considered a viable delivery method for the masses. It can't reach enough people because of the bandwidth requirement to make it viable.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> By channel doesn't matter, but we already know that the ESPN agreement is somewhere in the $4/sub range. Not hard to extend that to 20M subs = $80M.
> 
> The total figure for Broadcast Programming costs was ~9B for 2010. Renvenues for 2010 were 20B. Thats 45%. Assume there are many costs included in that total that aren't carriage specific costs (101, HotPass, etc., etc.) I'll even give you 50% of it and that's still 22.5% for carriage.
> 
> I don't think my numbers are too far off.


Having been in this business for two decades, I assure you your numbers are far off.


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## Skyboss (Jan 22, 2004)

Paul Secic said:


> They're capping here already..





CCarncross said:


> Here too. While I see the potential for internet delivery, it seems like the way things are going now, that with the caps and so many that can't get enough bandwidth to their houses yet, at least not in the foreseeable future, it really can't be considered a viable delivery method for the masses. It can't reach enough people because of the bandwidth requirement to make it viable.


Ditto here as well.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> Premium movie channels are already replacable for less money per month.
> 
> I disagree, respectfully.


Really? Replaceable? So the HBO series I'm watching TODAY I can get elsewhere (that EXACT same show \ series) at less money? Can you point me to where that's happening. 

Then let's do the same exercise with all the SHOWTIME content (not one series, ALL of the current content). Yeah, you can get older stuff and even one or two current series on things like Netflix, but you said Replaceable and I view that as equivalent. You cannot get the equivalent for less money per month.

Then, let's take a look at STARZ and how that's going to change like nobody's business with the next Netfllix deal, IF there even is one.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> This is certainly their perspective today, no denying that. It is my belief that once they begin to learn more about the emerging "on-line" business potential, they will begin to see that they will easily be able to replace that revenue and then some. Will it happen by 2020, maybe not, but it will happen.


Easily replaceable? There are a lot of very very smart guys and gals at Disney (I'm a former Disney employee as well) that have cool Ivy League degrees, decades in the business, very tech savvy, etc. It is anything but easily replaceable. This is the most complex cross roads in the pay television market probably EVER. Whether you are a distributor, a content provider, someone on the outside looking to create a cloud distribution system, etc, etc....how to make this all work is incredibly challenging. On the sports side, with each league, each team, rights issues all over the place, territories to consider, etc. On the subscription side, how does one interact ONE ON ONE with a customer? Are we going to get into dynamic pricing that resembles airline seats or even some kind of pure commodity trading for programming? I could go on and on, but to suggest this is easily replaceable and all someone has to do is merely "open their eyes" and the magic solution elixir will fill their eyes is way over simplifying it.

Now, you seem to be changing your time horizon...that's a different story. Sure, some day a lot of things will change...we won't go to the gas station and we can say beam me up Scotty, and so forth and so on. 2020 seemed to be the line in the sand that was drawn. Now it's beyond that. OK, fair enough. Sure, I'll say at some point we'll see the system change with delivery, etc.....but it's way more complex than you're making it out to be.

I foresee certain pockets of the country potentially going through this but ONLY if there is a way to guarantee the revenue to the program content providers. They are not going to risk their revenues on something that isn't guaranteed in some fashion. They have to run their business by spending a ton of money on rights (sports) or production. Not knowing what's in the bank or what is coming in future revenues kills that business dead.


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## CCarncross (Jul 19, 2005)

Unfortunately, I also believe some here consider the illegal downloads of premium tv series eps via torrent or another distribution method an "equivalent replacement" for paying for the channels...I've known people that have gotten C & D letters for downloading network shows that are free OTA, which I had always considered an "ok" to download since they can be received with an antenna...


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## J Blow (Nov 2, 2008)

It's not to say things won't change but the trend of the amount of bandwidth needed to push higher quality programming (thus requiring more bandwidth) seems to be out pacing the ability to provide added bandwidth and especially when you are talking each family member using huge amounts of bandwidth simultaneously and possibly on multiple devices. The cord isn't going to be cut anytime soon.


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## fireponcoal (Sep 26, 2009)

"CCarncross" said:


> Unfortunately, I also believe some here consider the illegal downloads of premium tv series eps via torrent or another distribution method an "equivalent replacement" for paying for the channels...I've known people that have gotten C & D letters for downloading network shows that are free OTA, which I had always considered an "ok" to download since they can be received with an antenna...


Dr who in hd via torrent is an equivalent replacement for not getting it through D* and Fios both of which I subscribe to... I love the self righteous finger wagging that goes down on this site about downloading through bit torrent... now back to the discussion.. I've loved reading this thread. Very interesting.. Happy easter all..


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## sigma1914 (Sep 5, 2006)

fireponcoal said:


> Dr who in hd via torrent is an equivalent replacement for not getting it through D* and Fios both of which I subscribe to... I love the self righteous finger wagging that goes down on this site about downloading through bit torrent... now back to the discussion.. I've loved reading this thread. Very interesting.. Happy easter all..


I don't think it's an equivalent, and I'm not knocking it since I am all for it *wink wink*. I also don't equate it to being part of the cord cutting trend.


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## adkinsjm (Mar 25, 2003)

Sure, downloading shows via BitTorrent is illegal, but is it unethical if you already have a subscription to the channel? That's another discussion with no clear answer.


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## CCarncross (Jul 19, 2005)

None of us have a subscription to BBC in HD if you have D* service, so it is illegal and unethical. I'm also referring to any show on a channel you don't subscribe to. Let's say later this year they finally get BBC in HD, does that give us the right to download all the back episodes that aired before we got it? I think not. I'm all for it being ok to download network OTA shows, those cost nothing to receive as long as you have the right equipment. Cable channels/etc. arent available OTA therefore don't fall under that category, and cost money to subscribe to.


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## sigma1914 (Sep 5, 2006)

CCarncross said:


> None of us have a subscription to BBC in HD if you have D* service, so it is illegal and unethical. I'm also referring to any show on a channel you don't subscribe to. Let's say later this year they finally get BBC in HD, does that give us the right to download all the back episodes that aired before we got it? I think not. I'm all for it being ok to download network OTA shows, those cost nothing to receive as long as you have the right equipment. Cable channels/etc. arent available OTA therefore don't fall under that category, and cost money to subscribe to.


But some cable channels allow streaming of their shows for free. Should those shows be legal and ethical to download? Also, legality I can respect but who's to determine what's ethical?


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## bonscott87 (Jan 21, 2003)

Skyboss said:


> If they don't do something about picture quality - and I mean something substantial, then no, they won't be. You Gen Y'ers and your sub par sound quality may have gotten your way with music downloads, but its come at the expense of quality in the product. Oh, and thanks for that... :nono:


LOL. I'm quite a bit older then Gen Y my friend.


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## CCarncross (Jul 19, 2005)

sigma1914 said:


> But some cable channels allow streaming of their shows for free. Should those shows be legal and ethical to download? Also, legality I can respect *but who's to determine what's ethical?*


The guy with the highest ethics and morals of course...its the only thing that separates us from the chimpanzees...:lol:


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## sigma1914 (Sep 5, 2006)

CCarncross said:


> The guy with the highest ethics and morals of course...its the only thing that separates us from the chimpanzees...:lol:


:lol: Excellent answer.


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## Beerstalker (Feb 9, 2009)

Technically if you download any show or movie from anywhere other than that content owner's site, or their partner's sites it is illegal. Downloading from iTunes, Amazon, streaming on Hulu, etc results in the content owner getting paid for that viewing and or advertising that went along with it.

When you download the same show/movie from a torrent the content owner does not get paid at all, therefore they consider it illegal.

It doesn't matter if you subscirbe to the channels that the show/movie is on, you bought the DVD, you bought the Blu-Ray, etc. downloading it from anywhere other than the content owner or their partners is illegal.

Whether or not you an I agree with this is irrelevant, that is the way the system works as of right now as far as I understand it.


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## Skyboss (Jan 22, 2004)

bonscott87 said:


> LOL. I'm quite a bit older then Gen Y my friend.


Did you hit your head then??? :eek2:


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## bonscott87 (Jan 21, 2003)

Skyboss said:


> Did you hit your head then??? :eek2:


Why? Because I don't want to toss $100+ down the drain for a cable/sat service I just don't need?  Most of what I get is OTA and is in better HD quality from either and for free. We do stream a good number of "cable" shows. Are they in HD? Usually not but they are high quality and again, getting it in HD certainly isn't worth $100 a month to us. If I'm really that hard up for HD I'll just wait for it to come out on Bluray in 6 months and toss it in my Netflix queue. I don't need to watch something *now*. Certainly not at the prices the cable/sat providers bend us over for.


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## Satelliteracer (Dec 6, 2006)

bonscott87 said:


> Why? Because I don't want to toss $100+ down the drain for a cable/sat service I just don't need?  Most of what I get is OTA and is in better HD quality from either and for free. We do stream a good number of "cable" shows. Are they in HD? Usually not but they are high quality and again, getting it in HD certainly isn't worth $100 a month to us. If I'm really that hard up for HD I'll just wait for it to come out on Bluray in 6 months and toss it in my Netflix queue. I don't need to watch something *now*. Certainly not at the prices the cable/sat providers bend us over for.


Do you think the cable/sat bending over process is a result of them getting hit hard upstream by the prices that the content providers are charging?


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## bakerfall (Aug 23, 2006)

Satelliteracer said:


> Do you think the cable/sat bending over process is a result of them getting hit hard upstream by the prices that the content providers are charging?


I think that's partially it, but I also think there is a fair amount of "we'll keep raising prices until enough people say no that it effects our bottom line".

I've been a D* subscriber since 2002 and still am, but my opinions are pretty closer to Bon's. I certainly can afford DirecTV, I'm just beginning to feel like I'd be better off spending that money in other ways. My reason for feeling that way are partially because of the available content through IPTV and OTA, but it also has a lot to do with changing priorities. Having multiple kids and less time to spend watching TV has certainly changed my opinion, even though I make significantly more than I did a time when I would never have not had pay TV.


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## adkinsjm (Mar 25, 2003)

Beerstalker said:


> Technically if you download any show or movie from anywhere other than that content owner's site, or their partner's sites it is illegal. Downloading from iTunes, Amazon, streaming on Hulu, etc results in the content owner getting paid for that viewing and or advertising that went along with it.
> 
> When you download the same show/movie from a torrent the content owner does not get paid at all, therefore they consider it illegal.
> 
> ...


Hence the difference between illegal and unethical.


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## BattleScott (Aug 29, 2006)

Laxguy said:


> Where do your broadband figures come from? How is BB defined?


Availabilty figures are from the NTIA/FCC broadband map.

Acutal connection statistics from the NTIA website

The same statistics are available from any of hundreds of google results, you just have to be careful not to let the biases of the "presenter" cloud what the statistics are actually saying.

For most prposes I have seen, broadband is usually defined as a minimum 256K up/down connection. But from an infrastructure perspective, the important statistic is not so much what people "have" today, but rather what is "available" to them today. According to the newest statitstics, around 85% of the population now has access to at least a 10Mbps downstream internet connection.


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## BattleScott (Aug 29, 2006)

Santana said:


> Why is 10 years always the magic number that is going to solve all of the current technological problems of today? I applaud your optimism, but I am using roughly the same technology today for my internet service as was in place ten years ago. Qwest has been promising to upgrade my area for the last five of those years.


Not sure what you mean, it's 2011 now and my vision is what I think 2020 will bring. It's not a magic number, just math.


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## Satelliteracer (Dec 6, 2006)

bakerfall said:


> I think that's partially it, but I also think there is a fair amount of "we'll keep raising prices until enough people say no that it effects our bottom line".
> 
> I've been a D* subscriber since 2002 and still am, but my opinions are pretty closer to Bon's. I certainly can afford DirecTV, I'm just beginning to feel like I'd be better off spending that money in other ways. My reason for feeling that way are partially because of the available content through IPTV and OTA, but it also has a lot to do with changing priorities. Having multiple kids and less time to spend watching TV has certainly changed my opinion, even though I make significantly more than I did a time when I would never have not had pay TV.


The world has changed. The NFL ST Contract, look at what started as a few hundred million 15 years ago is now multi billions. Programming costs in the last decade have gone up double digits per year.

This is why we get back to the original part of this thread. Those content providers aren't going to take less money by going to a new model unless that new model guarantees that money. As an example, HBO told Netflix if they want to carry their stuff, pay them over $20 per month per subscriber. Obviously Netflix said no.

http://socialtimes.com/netflix-hbo-content_b35091

The world has changed in terms of costs and IMO, you're going to see the Hulu, Netflix, etc all take up their prices considerably in the near future.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> Having been in this business for two decades, I assure you your numbers are far off.


Reading a financial report does not take 20 years in the TV business. $8.699B is the figure published for "Broadcast Programming and others". My lowball estimate of 25% would mean that roughly $5B of that would be directly spent on carriage fees. Since we know that ESPN is approximately $1B all by itself, that would leave $4B for all other networks.

Now let's take it to "far off" as you suggest here. I would not consider 20% to be "far off", so we'll go to 15%, that would be $3B. ESPN as we know is nearly $1B alone so that would leave $2B to cover carriage fees for all other networks.

Earlier, I believe the phrase was that the figure was "a fantasy", in order to get there I think we would need to drop that 25% down even further to say 10%. That would be a total of $2B in carriage fees. Now with ESPN still taking up $1B of that, we are left with a "non-ESPN" carriage fee total of $1B.

The only other possibility I can think of, and since you really haven't stated one way or the other, is that perhaps you mean that the 25% is "too low" of a figure.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> Easily replaceable? There are a lot of very very smart guys and gals at Disney (I'm a former Disney employee as well) that have cool Ivy League degrees, decades in the business, very tech savvy, etc. It is anything but easily replaceable. This is the most complex cross roads in the pay television market probably EVER. Whether you are a distributor, a content provider, someone on the outside looking to create a cloud distribution system, etc, etc....how to make this all work is incredibly challenging. On the sports side, with each league, each team, rights issues all over the place, territories to consider, etc. On the subscription side, how does one interact ONE ON ONE with a customer? Are we going to get into dynamic pricing that resembles airline seats or even some kind of pure commodity trading for programming? I could go on and on, but to suggest this is easily replaceable and all someone has to do is merely "open their eyes" and the magic solution elixir will fill their eyes is way over simplifying it.


So now it's going to be a semantics battle? I said that they could "easily" replace it, referring simply to the ability of a potential "direct access model" to replace and likely surpass the revenue currently available to them from the carriage fee system. But now you want to focus on the word "easy" and make assertions that I am claiming this is all just a simple change over. If I thought it was going to be "easy" as you suggest, I wouldn't have to wait until 2020. Truth be told, I expect exactly the opposite. I see bloody battles leaving many of the principle players wounded or dying on the battle field along the way.



Satelliteracer said:


> Now, you seem to be changing your time horizon...that's a different story. Sure, some day a lot of things will change...we won't go to the gas station and we can say beam me up Scotty, and so forth and so on. 2020 seemed to be the line in the sand that was drawn. Now it's beyond that. OK, fair enough. Sure, I'll say at some point we'll see the system change with delivery, etc.....but it's way more complex than you're making it out to be.


No, I still see it in place by 2020. But I also know that things change and who knows, 5 years from now I might not have the same vision. But to this point, nothing that anyone has offered here or elsewhere has made me see the direction things are progressing any differently.



Satelliteracer said:


> I foresee certain pockets of the country potentially going through this but ONLY if there is a way to guarantee the revenue to the program content providers. They are not going to risk their revenues on something that isn't guaranteed in some fashion. They have to run their business by spending a ton of money on rights (sports) or production. Not knowing what's in the bank or what is coming in future revenues kills that business dead.


However it starts, that is all it will take for the content providers to begin to see the additional revenue possibilities. From there, the pursuit of MORE revenue than what is available in the traditional carriage arrangements will take care of the rest. By it's nature, this is not something that will happen "a little bit".


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## BattleScott (Aug 29, 2006)

wmb said:


> Seems that most of the arguments against IPTV have been that a viable business model has not been found, not that technology won't allow it. Once the content providers figure out how to make money out of it, IPTV will take off.


This is my position exactly. The only differnece is that I have put a time prediction to it.


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## Laxguy (Dec 2, 2010)

BattleScott said:


> Availabilty figures are from the NTIA/FCC broadband map.
> 
> Acutal connection statistics from the NTIA website
> 
> ...


Well, yes, a ton of information, but I am not going to wade through it. When you make a definitive statement, such as in the last sentence, when asked, it's customary to give a link to something from a reliable source that backs that up.

I simply cannot believe that 85% of the US have in-home access to 10 Mbps.......


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## espaeth (Oct 14, 2003)

There are a couple different things that keep getting intermixed in this conversation.

I don't see the content distribution model as being entirely tied to the technology discussion. Companies like Comcast, Verizon (FiOS), ATT (U-verse), DirecTV, and Dish are really no different from companies like Target, Wal-mart, Kmart, or Amazon. These companies are all simply selling and distributing someone else's product in whatever packaging the manufacturer deems fit. If the content producers were interested in ala carte programming, there is nothing technically preventing that from becoming a reality under the current distribution model -- cable and satellite both have the ability to authorize individual channels.

The Internet video argument also gets intermixed because we're talking about multiple driving factors:

1) Time shifting (Watching programs away from their broadcast timeslot)
2) Place shifting (iPad, mobile phone, laptop viewing, etc)
3) Archived Content (watch past episodes / missed recordings)
4) Niche content (Limited distribution, ie: Revision3, 99.9% of videos on Youtube, Netflix / PPV movies)
5) Cheaper programming

As for #1, I don't think Internet-delivered video is the right solution for 99% of Time shifting scenarios. You're taking content that is already being *digitally delivered* to your house via OTA ATSC feeds, cable QAM feeds, and satellite QPSK/8PSK feeds.... and transferring _yet another_ copy of the same content over the network. Time shifting is better accomplished through local capture and playback using an already established stream as the source.

Cases 2-4 are where Internet delivery of video makes the most sense. These specifically address shortcomings of the broadcast distribution model in an effective way using the cheapest personal delivery method currently available (Internet).

I still believe case #5 is only true right now because the content producers are still trying to position offerings like Hulu to be a companion offering to broadcast video, not a replacement. I think the article that Satelliteracer linked shows why the content producers aren't trying to impose higher costs on Internet video options like Hulu just yet. If that trend starts to change, you can bet the companies producing the content will start pushing up the costs of their Internet offerings.


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## bonscott87 (Jan 21, 2003)

Satelliteracer said:


> Do you think the cable/sat bending over process is a result of them getting hit hard upstream by the prices that the content providers are charging?


I don't disagree with that. Content providers keep raising their prices for sure. But in the end it's the providers like DirecTV or Comcast charging me, thus it's directed at them.

Someday I may be right back in the same boat with having to pay TNT X amount for their content, NBC Universal for their shows and so forth. But for now I have a lot better things to do with my $120 a month when I can get 98% of what we watch for free or just a few bucks a month.


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## PCampbell (Nov 18, 2006)

I cant get 4 streems of HD from U-Verse at one time, how am I going to get it from some other IPTV sorce. U-Verse is my internet provider and there TV is IPTV, it would have to use the same connection I use for the internet. That and live sports make it a no go for me and I do not see that changing anytime soon.


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## BattleScott (Aug 29, 2006)

Laxguy said:


> Well, yes, a ton of information, but I am not going to wade through it. When you make a definitive statement, such as in the last sentence, when asked, it's customary to give a link to something from a reliable source that backs that up.
> 
> I simply cannot believe that 85% of the US have in-home access to 10 Mbps.......


All I can do is post the source as requested. If you're not inclined to believe it from them, I don't expect that I'd have any luck changing your mind.

Based on what's available in my area, and even the more rural surrounding areas, I don't have any reason to believe the figures aren't reliable.


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## BattleScott (Aug 29, 2006)

bonscott87 said:


> I don't disagree with that. Content providers keep raising their prices for sure. But in the end it's the providers like DirecTV or Comcast charging me, thus it's directed at them.
> 
> Someday I may be right back in the same boat with having to pay TNT X amount for their content, NBC Universal for their shows and so forth. But for now I have a lot better things to do with my $120 a month when I can get 98% of what we watch for free or just a few bucks a month.


Where I think the biggest problem is today is that, in order to do what you do, a person has to "go get it". By in large, I think it has to be as simle as picking up the remote and changing the channel or it won't ever be something the masses will accept. Now that we are beginning to see the "go get it" part being integrated into the TV devices themselves, I think we will begin to see the merging of the "on-line content" and the "couch potato" worlds.


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## rayik (Mar 30, 2009)

Satelliteracer said:


> Do you think the cable/sat bending over process is a result of them getting hit hard upstream by the prices that the content providers are charging?


From my perspective, I do not really care why the prices keep going up, only the fact that they are. Even though we can easily afford D*, we could save so much money by cutting the cord that we did.

I am enjoying the pages of conversation about whether there is enough bandwidth now or in the future for IPTV and also whether "channels" will go a la carte in the future. All I know is that right now, OTA and internet streaming makes sense for us and is doable. If it becomes cost ineffective in the future (due to caps, limited bandwidth or any other reason), then it simply becomes a cost / benefit analysis on whether to keep doing it. But right now it works for us.

Nice discussion on the topic.


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## susanandmark (Feb 15, 2007)

We live in the mega-boondocks and only have a single DSL option available to us (from an off-brand provider, even). We consistently get about 6 MPS download, though we tend to have more frequent outages than my friends not so boonie-fied.

That's enough, barely, to stream, but we can watch Netflix streaming, Hulu etc. without major issues, though I don't know about multiple or HD streams of either.

Still, even with those limitations, if we had access to OTA signals, I think that, a TiVo and a bumped up Netflix sub would be enough for us, with the exception of the ESPN triumvirate and, maybe, HBO (though those shows can be purchased later on disc). Honestly, with the OTA networks, all the ESPNs and HBO, we'd have about 95% of what we currently watch still available at a FRACTION of what we're paying DirecTV now for the privilege.


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## bakerfall (Aug 23, 2006)

I think the reason a la carte keeps coming up in all this is because the appeal of IPTV and the like are value, granularity and cheaper rates. If television providers had more choices that would allow consumers to pay for the content they wanted/needed I think they would retain more customers and ultimately make more money.

I could realistically narrow my viewing habits down to: ESPN, RSN and sports league channels, news channels (CNN and MSNBC), basic cable (USA, TNT, TBS, Comedy Central, etc), home channels for the wife and disney/nick for my kids. If I could pay even $30 to get those channels in HD I would.


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## DaveC27 (Apr 14, 2010)

bakerfall said:


> I think the reason a la carte keeps coming up in all this is because the appeal of IPTV and the like are value, granularity and cheaper rates. If television providers had more choices that would allow consumers to pay for the content they wanted/needed I think they would retain more customers and ultimately make more money.
> 
> I could realistically narrow my viewing habits down to: ESPN, RSN and sports league channels, news channels (CNN and MSNBC), basic cable (USA, TNT, TBS, Comedy Central, etc), home channels for the wife and disney/nick for my kids. If I could pay even $30 to get those channels in HD I would.


I think the opposite would be true At the moment BBCA gets a couple of pennies from each of the 19m subscribers. Even though I do watch the channel I certainly wouldn't pay for it because its schedule is so poor.

If I had to pay $10 a month for each channel then I'd probably stick to OTA channels as at the moment I don't watch any enough times a month to warrant my subscribing to them.

At best I'd go down to 99c per program


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## bidger (Nov 19, 2005)

bakerfall said:


> I could *realistically* narrow my viewing habits down to: ESPN, RSN and sports league channels, news channels (CNN and MSNBC), basic cable (USA, TNT, TBS, Comedy Central, etc), home channels for the wife and disney/nick for my kids. If I could pay even $30 to get those channels in HD I would.


You want that all that, RSNs included, in HD for $30/mo., which seems to be your plateau price. What exactly is the "realistic" part?


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## Skyboss (Jan 22, 2004)

BattleScott said:


> For most prposes I have seen, broadband is usually defined as a minimum 256K up/down connection. But from an infrastructure perspective, the important statistic is not so much what people "have" today, but rather what is "available" to them today. According to the newest statitstics, around 85% of the population now has access to at least a 10Mbps downstream internet connection.


You should read the charts again. It's 85% "inside or outside the home" who have access to that kind of speed, that means at home -or- at work -or-some other place. The same data shows that 38 million homes in the US don't have broadband access and an additional 10 million don't have any internet access at home. There are about 115 million households in the US. That means nearly 42% of households in the US don't have any broadband access at home.



Laxguy said:


> I simply cannot believe that 85% of the US have in-home access to 10 Mbps.......


They don't. He's misrepresenting the data.

Table 7 in his link:

TABLE 7 (with unedited family income) 15:41 Friday, January 28, 2011 1
*Households without High-Speed Internet Access at home,*by selected characteristics: Total, Urban, Rural, Principal City, 2010
(Numbers in Thousands)
Total USA

---------------------------NO INTERNET USE----------------------------
-------MAIN REASON, WITHOUT HIGH-SPEED INTERNET ACCESS AT HOME--------
TOTAL DON'T TOO USE NOT COMPUTER OTHER
HOUSEHOLDS NEED EXPENSIVE ELSEWHERE AVAILABLE INADEQUATE REASON
---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- -----
Total Householders * 37,970 * 17,304 9,609 1,871 1,179 5,372 2,629

TABLE 7b (with unedited family income) 15:43 Friday, January 28, 2011 1
*Households with No Connection to the Internet from home,*by selected characteristics: Total, Urban, Rural, Principal City, 2010
(Numbers in Thousands)
Total USA

---------------------------NO INTERNET USE----------------------------
---------MAIN REASON, NO CONNECTION TO THE INTERNET FROM HOME---------
TOTAL DON'T TOO USE NOT COMPUTER OTHER
HOUSEHOLDS NEED EXPENSIVE ELSEWHERE AVAILABLE INADEQUATE REASON
---- ----- ---- ----- ---- ----- ---- ----- ---- ----- ---- -----
Total Householders *10,957* 2,474 4,234 1,500 184 1,598 968

Estimated number of US Households:

http://www.census.gov/population/projections/nation/hh-fam/table1n.txt


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## jpl (Jul 9, 2006)

Even at 10Mbps delivering content via IP to your home is unworkable for most consumers. That's part of the issue I have. Yes, speeds will continue to climb, and price/Mbps will continue to drop. I look at my family situation, and I can tell you that if we had to divide up that connection speed among the feeds coming into my house, we would be seriously hampered in our viewing. I have 35 Mbps download speed now with FiOS - which means that it's true 35 Mbps down (no throttling or slow periods, e.g.). Even at that speed I would be hard-pressed to handle most of our viewing needs (I have a family of 7) during chunks of the day. For all the griping I read on these forums about the limitations of U-Verse, e.g., I can't think I'm in the minority with this being an issue.

For some users, I think it works fine. I know people for whom having such a limitation wouldn't be a problem. But for a vast majority I would think it would be a serious deplenishment of functionality they currently enjoy. And these companies make their money by appealing more to the masses.

I think IP will continue to make in-roads, and I think you'll continue to see some very creative solutions rolling out there, but I can't envision the day when IP will become the de-facto delivery mechanism for video. It's just not the appropriate tool for most video delivery. And just because I can use the butt of my screwdriver to pound in a nail doesn't mean that it becomes a hammer, nor is it the best tool for the job.


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## jpl (Jul 9, 2006)

One more point on all this - someone posted that they don't care WHY costs for TV are going up... just that they are. Well, see that's the rub. You do need to understand the why - because if you do, you'll understand, partly, why you'll see them go up no matter which delivery mechanism is used. I've used the analogy of the cost of a new car before because I think it's totally apt to what's going on here. In the 80's and early 90's the price of new cars went up faster than the rate of inflation, causing many to wonder what the heck was going on.

What was going on was that competition for cars went up with the advent of domination by the Japanese car makers. That pushed all car manufacturers to become very responsive to consumer demands. Every new feature that came down the road quickly made its way into every new car out there. As a result cars were much more fuel efficient, far more reliable, far longer lasting, and FAR safer than cars in the past. But all of those additions: a) came at a cost; and b) came about because of CONSUMER DEMAND.

The same thing has been happening with the TV industry over the last few years. If you just look at the explosion in the number of channels, and the big leaps forward in innovation, you see an industry following the exact same path that the car industry did 25 years ago. And just like with cars back then: a) innovations/channels come at a cost; and b) THEY'RE DRIVEN BY CONSUMER DEMAND.

Prices are going up because consumers are demanding more from these providers. We're getting what we want and then we wonder why the prices are going up like they are. That's a very American trait, though. Not knocking it at all, but understand that this is what the American consumer wants. Oh, you may have a bunch tell you that they don't... they'll tell you that they only want 5 channels. And a handful of those who respond that way are being truthful, but the vast majority of the rest are just, well, lying. Which means that for any such pay tv service to be successful they have to address that want by American consumers. Otherwise you don't get the volume you need to be successful.

Which means that this comes down to a choice - IF you can give me IP delivery of all my stuff, meeting my needs/wants, without raising the cost to me... then I'm all for it. I just don't see how that would be possible, though. And if I had a choice of paying $75/month for 10 channels where I can get 1 or 2 streams at once, or paying $100/month for 300 channels, where I can get as many streams as I want at once... it won't be much of a contest for me.


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## Skyboss (Jan 22, 2004)

I've got to aree that at some point there will be a revolt. I mean, I don't see my self paying $200+ a month (in todays dollars) for TV when I retire in 2025. There's just no math on that for me. What we may see is smaller channel groupings. For example, locals are $10 a month. You can add sports for another $10. News for another $10. Then you'd be able to add game packages like Sunday Ticket etc...

TV costs money, but the way prices are going? A bit of a revolt is going to come at some point. Most people just don't watch that much TV because better than 50% of it isn't worth the bandwidth its absorbing. I guess you can put me in the group of I'd rather have 20 really great channels vs. 250 mostly quasi useless channels.


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## rayik (Mar 30, 2009)

jpl said:


> Even at 10Mbps delivering content via IP to your home is unworkable for most consumers. That's part of the issue I have. Yes, speeds will continue to climb, and price/Mbps will continue to drop. I look at my family situation, and I can tell you that if we had to divide up that connection speed among the feeds coming into my house, we would be seriously hampered in our viewing. I have 35 Mbps download speed now with FiOS - which means that it's true 35 Mbps down (no throttling or slow periods, e.g.). Even at that speed I would be hard-pressed to handle most of our viewing needs (I have a family of 7) during chunks of the day. For all the griping I read on these forums about the limitations of U-Verse, e.g., I can't think I'm in the minority with this being an issue.


You might be pleasantly surprised if you tried multiple simultaneous streams. Netflix HD is 3.8 mbps. Worse case, you would have 7 simultaneous Netflix HD streams which would be 28 mbps.

We are on a 20/4 connection and we have no problem with simultaneous streaming to three devices while using VOIP. Our family does not all stream to TVs. Some use ipod touches, others PCs. Netflix, Hulu plus and other sources automatically stream at lesser bandwidth to devises other than HDTVs.

You could try the free one month Netflix subscription and just see what happens (if you have them, you could use XBOX 360 to stream HD to HDTV) While Netflix states only one stream at a time for streaming only subscription, our experience has been they allow multiple simultaneous streams.


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## hdtvfan0001 (Jul 28, 2004)

rayik said:


> You might be pleasantly surprised if you tried multiple simultaneous streams. Netflix HD is 3.8 mbps. Worse case, you would have 7 simultaneous Netflix HD streams which would be 28 mbps.
> 
> We are on a 20/4 connection and we have no problem with simultaneous streaming to three devices while using VOIP. Our family does not all stream to TVs. Some use ipod touches, others PCs. Netflix, Hulu plus and other sources automatically stream at lesser bandwidth to devises other than HDTVs.
> 
> You could try the free one month Netflix subscription and just see what happens (if you have them, you could use XBOX 360 to stream HD to HDTV) While Netflix states only one stream at a time for streaming only subscription, our experience has been they allow multiple simultaneous streams.


Very cool information - thanks for sharing.

But in reading this twice, it does raise the concerns around increasing broadband cap limits and rising costs. This might just be a short-term window of opportunity to enjoy things. :shrug:


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## rayik (Mar 30, 2009)

hdtvfan0001 said:


> Very cool information - thanks for sharing.
> 
> But in reading this twice, it does raise the concerns around increasing broadband cap limits and rising costs. This might just be a short-term window of opportunity to enjoy things. :shrug:


Even if it turns out to be a short-term window of opportunity, why not take advantage of it.

To me it's all cost / benefit analysis. Every 1 - 2 years I look at the alternatives to our utilities (including TV). Right now, I view three alterantives for TV: satellite (D* or E*), cable or OTA / internet. Right now, OTA / internet won the cost benefit analysis.

While OTA / internet streaming makes sense for us right now, at some point in the future it may not. If that becomes the case, time to switch again. But until that point, we will enjoy the savings ($17 / month now versus $84 / month previously), continue to watch 35 of the 40 shows we DVRed with D*, and watch new programming we did not have available before.


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## Tom Robertson (Nov 15, 2005)

Skyboss said:


> I've got to aree that at some point there will be a revolt. I mean, I don't see my self paying $200+ a month (in todays dollars) for TV when I retire in 2025. There's just no math on that for me. What we may see is smaller channel groupings. For example, locals are $10 a month. You can add sports for another $10. News for another $10. Then you'd be able to add game packages like Sunday Ticket etc...
> 
> TV costs money, but the way prices are going? A bit of a revolt is going to come at some point. Most people just don't watch that much TV because better than 50% of it isn't worth the bandwidth its absorbing. I guess you can put me in the group of I'd rather have 20 really great channels vs. 250 mostly quasi useless channels.


Skyboss, I think you have the most likely scenario mapped out. Ala Carte ain't gonna happen, the least expensive channels go from a penny right now to 50 cents or more. So bundling is going to continue.

Yet people are feeling pinched for costs. New pricing schemes (or old ones making a comeback) will be needed to balance something akin to ala carte and the economies of scale of bundles.

That said, the channels won't like it. They want their average $50 (or whatever it is) per household. Gonna be an interesting shakeout. 

Cheers,
Tom


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## bonscott87 (Jan 21, 2003)

BattleScott said:


> Where I think the biggest problem is today is that, in order to do what you do, a person has to "go get it". By in large, I think it has to be as simle as picking up the remote and changing the channel or it won't ever be something the masses will accept. Now that we are beginning to see the "go get it" part being integrated into the TV devices themselves, I think we will begin to see the merging of the "on-line content" and the "couch potato" worlds.


Totally agree. That's why I don't think IPTV is "losing steam" as the article poses simply because it continues forward and continues to morph. The only way it will lose steam now is if the content providers kill it (like getting rid of Hulu). However, I envision a day in the not to distant future where built into TV's, Roku boxes, Bluray players, etc. will be an app for NBC, USA, Discovery, etc. where it's either free or a small fee and the couch potato is on their way. However a "true" couch potato is also a channel surfer which means IPTV which is basically all "on demand" won't be for them. Then again, when either my wife or I want to just veg and "surf" we surf Netflix and can easily find stuff to stream all day long so it just depends.


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## bakerfall (Aug 23, 2006)

bidger said:


> You want that all that, RSNs included, in HD for $30/mo., which seems to be your plateau price. What exactly is the "realistic" part?


I said I could realistically narrow my viewing needs to those channels, not that $30 is realistic 

What I was getting at is effectively what others have since said, more granular options and pricing allowing for people to pick groups of channels that they want and pay a portion of your bill. It's totally possible that the sports channels might be $20, but the home/garden or kids channels are $5-10.

I'm simply saying that at some point people are not going to be willing to pay rates that go up at an endless pace when other cheaper options meet their needs. For some, that time is now. OTA + streaming is a compelling product even if at some point it won't be. I think the chances are the content will get better, not worse and the cost is never going to approach what cable and sat providers charge because it isn't an apples to apples comparison, and if the cost was equal, most people would stay with the traditional model.


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## bidger (Nov 19, 2005)

bakerfall said:


> I said I could realistically narrow my viewing needs to those channels, not that $30 is realistic


OK, thanks for clarifying.


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## BattleScott (Aug 29, 2006)

Skyboss said:


> You should read the charts again. It's 85% "inside or outside the home" who have access to that kind of speed, that means at home -or- at work -or-some other place. The same data shows that 38 million homes in the US don't have broadband access and an additional don't have any internet access at home. There are about 115 million households in the US. That means nearly 42% of households in the US don't have any broadband access at home.
> 
> They don't. He's misrepresenting the data.
> 
> ...


No, you simply don't know how to read and comprehend what the data says. The figures you are referring to are census results of what people actually HAVE, not what is available to them. Within that data there are also listings for the reasons why they don't have it. The number of respondants that indicated "hi-speed internet not available" was 1,179,000. The number responding that "NO internet" was available was 184,000. This totals roughly 1.2% of the population that don't have it *AVAILABLE.*

If you check the data in the second link you will see that the 85% availability rate I quoted is completely accurate.

http://www.broadbandmap.gov/download/reports/national-broadband-map-technology-by-speed.pdf

Like I said, there are many versions of the numbers out there, but it's always best to look at them yourself and avoid the agendas of those reporting them.


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## tulanejosh (May 23, 2008)

BattleScott said:


> So now it's going to be a semantics battle? I said that they could "easily" replace it, referring simply to the ability of a potential "direct access model" to replace and likely surpass the revenue currently available to them from the carriage fee system. But now you want to focus on the word "easy" and make assertions that I am claiming this is all just a simple change over. If I thought it was going to be "easy" as you suggest, I wouldn't have to wait until 2020. Truth be told, I expect exactly the opposite. I see bloody battles leaving many of the principle players wounded or dying on the battle field along the way.
> 
> No, I still see it in place by 2020. But I also know that things change and who knows, 5 years from now I might not have the same vision. But to this point, nothing that anyone has offered here or elsewhere has made me see the direction things are progressing any differently.
> 
> However it starts, that is all it will take for the content providers to begin to see the additional revenue possibilities. From there, the pursuit of MORE revenue than what is available in the traditional carriage arrangements will take care of the rest. By it's nature, this is not something that will happen "a little bit".


You've said you won't entertain posts that basically presume current limitations will be in place forever. Fair enough - but i would ask you what evidence you have that current limitations will be resolved other than to say that things will be better in the future. What makes you believe that ISPs will change their position on bandwidth caps, etc, that would make your IPTV utopia a possibility. Just because something is technically possible doesn't mean its probable.


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## Skyboss (Jan 22, 2004)

BattleScott said:


> No, you simply don't know how to read and comprehend what the data says. The figures you are referring to are census results of what people actually HAVE, not what is available to them. Within that data there are also listings for the reasons why they don't have it. The number of respondants that indicated "hi-speed internet not available" was 1,179,000. The number responding that "NO internet" was available was 184,000. This totals roughly 1.2% of the population that don't have it *AVAILABLE.*
> 
> If you check the data in the second link you will see that the 85% availability rate I quoted is completely accurate.
> 
> ...


Yet with all of that suggested capability, 42% of US households aren't buying in to your plan. If people can't afford it (which is likley why they don't have it), it really isn't available to them now is it?

Talk about agenda's.

What part of that don't you get as being a barrier to your utopian plan for IPTV?



tulanejosh said:


> You've said you won't entertain posts that basically presume current limitations will be in place forever. Fair enough - but i would ask you what evidence you have that current limitations will be resolved other than to say that things will be better in the future. What makes you believe that ISPs will change their position on bandwidth caps, etc, that would make your IPTV utopia a possibility. Just because something is technically possible doesn't mean its probable.


He has no evidence. Just a heaping pile of derogatory statements for anyone who opposes his view.


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## Glen_D (Oct 21, 2006)

susanandmark said:


> We live in the mega-boondocks and only have a single DSL option available to us (from an off-brand provider, even). We consistently get about 6 MPS download, though we tend to have more frequent outages than my friends not so boonie-fied.
> 
> That's enough, barely, to stream, but we can watch Netflix streaming, Hulu etc. without major issues, though I don't know about multiple or HD streams of either.


6 Mbps way out in the sticks? Consider yourself lucky!

I live in an urban residential development inside the 7th largest U.S. city, and 3 Mbps download is the fastest DSL speed AT&T can do at my address. I do have other/faster options, however, like TW Roadrunner.


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## BattleScott (Aug 29, 2006)

Skyboss said:


> Yet with all of that suggested capability, 42% of US households aren't buying in to your plan. If people can't afford it (which is likley why they don't have it), it really isn't available to them now is it?


Even though this post is clearly centered around what is here "TODAY", I'll make an exception on this one because it's just plain fun to point out how wrong you are, even when given all the information needed to avoid it.

The reasons why they don't have it are published in the same table you referenced as well. The largest majority indicated they don't have it simply because they don't need it. Of those who responded they did not have hi-speed internet, only 25% cited cost as the reason. That's about 8% of the total population.



Skyboss said:


> What part of that don't you get as being a barrier to your utopian plan for IPTV?


None of it I guess. I would not consider only 92% of the population being able to afford something as a reason for something not to be. We wouldn't have much of anything if that was the case.


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## BattleScott (Aug 29, 2006)

tulanejosh said:


> You've said you won't entertain posts that basically presume current limitations will be in place forever. Fair enough - but i would ask you what evidence you have that current limitations will be resolved other than to say that things will be better in the future. What makes you believe that ISPs will change their position on bandwidth caps, etc, that would make your IPTV utopia a possibility. Just because something is technically possible doesn't mean its probable.


I have listed many reasons throughout the thread. Rather than repeat them, I'll link this article that I found that outlines the same reasons in a much better and understandable format.

http://www.businessinsider.com/jim-louderback-future-of-cable-tv-2010-4

Now granted, the author has a vested interest in the success of internet TV, but I still find the concepts he discusses to be right in line with how I see things shaking out.


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## espaeth (Oct 14, 2003)

BattleScott said:


> I have listed many reasons throughout the thread. Rather than repeat them, I'll link this article that I found that outlines the same reasons in a much better and understandable format.
> 
> http://www.businessinsider.com/jim-louderback-future-of-cable-tv-2010-4


As a counterpoint to that article, Mark Cuban described some of the non-trivial challenges to this "open ubiquitous" market that Revision3's CEO describes.

http://blogmaverick.com/2009/01/27/the-great-internet-video-lie/

Even Netflix tops out at around 300,000 simultaneous streams on a nightly basis.

Meanwhile, you have shows like American Idol that gather almost 20 million viewers: http://blog.zap2it.com/frominsideth...p-bones-spin-off-pilot-makes-solid-debut.html

That's a big, long, expensive hill to climb.


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## Skyboss (Jan 22, 2004)

BattleScott said:


> The reasons why they don't have it are published in the same table you referenced as well. The largest majority indicated they don't have it simply because they don't need it. Of those who responded they did not have hi-speed internet, only 25% cited cost as the reason. That's about 8% of the total population.


Or perhaps they don't need it because they can't afford a computer in the first place.



BattleScott said:


> None of it I guess. I would not consider only 92% of the population being able to afford something as a reason for something not to be. We wouldn't have much of anything if that was the case.


 I really think you have a sheltered view of this issue. Perhaps you've never been economically challenged. It certainly seems that your view is from someone who is well... privileged. Which incidentally could lead someone to have a very skewed view of the world that anything is possible because it's possible for them.

If you think for even half a second 92% of the population can fork over $50 a month just for internet access, then you really have an unrealistic view of the world. Probably about 8% of the population alone has lifeline telephone service, never mind their inability to afford internet access. Heck unemployment is at 10%, you think they have the money for what you're proposing?

Here's a dose of reality for you:

http://www.digitaltrends.com/computing/u-s-census-finds-ongoing-disparities-in-broadband-access/


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## tulanejosh (May 23, 2008)

BattleScott said:


> I have listed many reasons throughout the thread. Rather than repeat them, I'll link this article that I found that outlines the same reasons in a much better and understandable format.
> 
> http://www.businessinsider.com/jim-louderback-future-of-cable-tv-2010-4
> 
> Now granted, the author has a vested interest in the success of internet TV, but I still find the concepts he discusses to be right in line with how I see things shaking out.


Look... I'm anything but a luddite. In fact - i am of the millenials that that author quotes. But.... i'm not convinced of the so called advantages that iptv provides. I see 2 major ones that advocates point to - price and on demand.

I'm going to talk about this in terms of business and customer experience. I know that the future required to make IPTV possible and scalable is doable. I don't think it will happen, but it won't be because the technology is insurmountable.

Price. We can go back and forth on this all we want - and you have with most people on here. My opinion... content providers are going to dictate the price of content. They create it. They sell it. They want their money. They aren't going to be altruistic and just roll over and say that it's ok for them to make less, its ok for them to pay their people less, and its ok for them to return less to their shareholders. that's not going to happen. If and when IPTV takes off - it will not enjoy the same price advantage that it does as a new service. Netflix for example will not be able to get away with charging you $8 a month when they cannot secure bargain basement pricing deals. This is especially true now that they are bigger than comcast. Why would any company cut them a deal for discounted content when they are bigger than comcast? They wouldn't. So i think pricing long term is a moot point. It's not going to be cheaper.

On demand. This is the only real tangible benefit that it has over the existing model. But how necessary is this? Are you that specific in what you want to watch that you plan it out to the exact show? I think there's some value to on demand. I have a little kid... he's likes his cartoons, it cool to be able to turn on Netflix and put the cartoon on. I'll admit that, but in general - a DVR works just fine for me. I can't watch enough to keep up with it anyhow. What is this supposed major competitive advantage of on demand all the time. Do you really find that there's nothing on your dvr or live streams to satisfy you?

On a seperate note - that author is an unethical p.o.s. He references that the internet unbundles everything, pointing to newspapers and media. "why buy the newspaper when you can read the article online for free" Why? becuase a lot of people worked really hard to produce that article and they deserve to be compensated fairly for their work. Nevermind the fact the internet acts as a sort of walmart gobbling up and destroying venerated businesses, industries, and professions while not supplying anything of a similar quality as a replacement. It's the internet man - it's like the future and stuff. :nono2:


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## tulanejosh (May 23, 2008)

the other thing to consider is cost. is it possible to create a world where IPTV is a viable alternative to hundreds of millions - perhaps billions of people... sure. it's possible. but CRAZY costly. do the benefits of a purely internet delivered, on demand model justify the costs? I'm going to have to say no. The only benefit you get is on demand 100% of the time. That's not worth hundred of billions in build out costs, content deals, tax breaks, right of way purchases, server farm build outs, marketing costs, lost jobs and other economic impacts. The current model is not that bad. Yeah it costs more than iptv right NOW, but that won't always be the case. BattleScott - you yourself are calling out that technology today won't be the case tomorrow, surely you can admit that the cost today won't be the cost tomorrow and its very possible that it'll be on par with what you pay now. Internet is a shiny new toy and it's cool - i make my living on the internet at a dot com era company. Believe me, i'm a fan. But let's not forget one isescapable fact - our current TV COMES FROM FREAKING SPACE! it doesn't get any higher tech and awesome than that. And it scales - 1 person or 1 billion - the sats can handle it. and all 1 billion of those people can watch different things, and the satellite yawns man. You can't say that about the internet.


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## jpl (Jul 9, 2006)

rayik said:


> You might be pleasantly surprised if you tried multiple simultaneous streams. Netflix HD is 3.8 mbps. Worse case, you would have 7 simultaneous Netflix HD streams which would be 28 mbps.
> 
> We are on a 20/4 connection and we have no problem with simultaneous streaming to three devices while using VOIP. Our family does not all stream to TVs. Some use ipod touches, others PCs. Netflix, Hulu plus and other sources automatically stream at lesser bandwidth to devises other than HDTVs.
> 
> You could try the free one month Netflix subscription and just see what happens (if you have them, you could use XBOX 360 to stream HD to HDTV) While Netflix states only one stream at a time for streaming only subscription, our experience has been they allow multiple simultaneous streams.


I have Netflix, and I do stream. As do my kids. That 35Mbps speed definitely comes into play in my house. One night, my wife was just watching something live on TV, but everyone else was streaming stuff/using my internet connection - my oldest was watching something streamed via Netflix over the Wii, another child was playing games on some kid website, and I opened up my laptop and started streaming something via Epix on-line.

I think Netflix streaming is great, but to pretend that the PQ is anywhere near what I get today would be utterly dishonest. Some movies look ok at best. Heck, just to see how far I could push things, I nearly asked my wife to start up an HD VOD thread, just for the heck of it (FiOS runs their VOD via their IP stream).

I just think that people are seriously underestimating the technical challenges to get to where many are going. The issue of scaling is one that's hardly being considered. The thing is, if you have an alternate solution that's cheaper, then it's hard to make the case for a new way of doing things. At least on a large scale. It's the reason that alternate energy production needs heavy government subsidy - oil and natural gas is still a ton cheaper. That's the same economies at play here. It would be so stinking expensive to migrate to a large-scale streaming TV delivery service that it won't happen anytime in the foreseeable future. Not while traditional distribution methods are: a) well established; b) extremely scalable; c) extremely reliable; and d) cheaper.

Not saying it can't be done - it can. I just think people are deluding themselves to believe that they won't pay more for IP streamed services if done on a real large scale. Right now it appears cheaper because, just like with solar and wind power, it's heavily subsidized (no, not by government, but by the content providers). But to replace what's currently there, it has to become revenue positive. To get there would require a very hefty upgrade in price. On top of all that, like I said in my other post, we are where we are with the industry because we, as consumers, demanded it. If anyone doubts that, just look at all the 'when are we getting more HD?!' threads. All of those channels, and all of those innovations, which are being demanded by consumers, cost money. They're not free. But we want them. Which means that whatever delivery mechanism is used would have the same cost-drivers as traditional video delivery - plus there would be additional cost-drivers that aren't there for traditional video delivery mechanisms. I just don't see how you scale it, make it profitable, and keep it cheaper than what you have now. I just don't think that's going to happen.

As for where prices go from here - I think, if you use the car industry as a guide - you're going to hit a stasis. Not that prices won't go up, but eventually you get to a point where consumer demand is satiated. At that point the number of channels holds steady, and the technical architecture hits a steady state (no real significant innovations in the product/service). Are we there yet? Not sure... but I think we're close. Price increases for new cars seriously stabilized when that industry hit this point. You're going to see the same for TV service.


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## BattleScott (Aug 29, 2006)

tulanejosh said:


> Look... I'm anything but a luddite. In fact - i am of the millenials that that author quotes. But.... i'm not convinced of the so called advantages that iptv provides. I see 2 major ones that advocates point to - price and on demand.
> 
> I'm going to talk about this in terms of business and customer experience. I know that the future required to make IPTV possible and scalable is doable. I don't think it will happen, but it won't be because the technology is insurmountable.
> 
> ...


I actually agree with most of what you're saying here. But what I see as the chief advantage to IP or internet delivery (in the future) is not about content, delivery methods or other content related issues, it is the advertising revenue machine that it will create. Advertising is what TV is really all about anyways, and it is what will drive the growth in availability as well as the reduction in cost to the content consumer in the end. I can see a network like Discovery being able increase their advertising revenue for a show like Deadliest Catch by 10x over what they get today by being able to deliver targetted advertising to the indivdual viewer.


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## BattleScott (Aug 29, 2006)

tulanejosh said:


> the other thing to consider is cost. is it possible to create a world where IPTV is a viable alternative to hundreds of millions - perhaps billions of people... sure. it's possible. but CRAZY costly. do the benefits of a purely internet delivered, on demand model justify the costs? I'm going to have to say no. The only benefit you get is on demand 100% of the time. That's not worth hundred of billions in build out costs, content deals, tax breaks, right of way purchases, server farm build outs, marketing costs, lost jobs and other economic impacts. The current model is not that bad. Yeah it costs more than iptv right NOW, but that won't always be the case. BattleScott - you yourself are calling out that technology today won't be the case tomorrow, surely you can admit that the cost today won't be the cost tomorrow and its very possible that it'll be on par with what you pay now. Internet is a shiny new toy and it's cool - i make my living on the internet at a dot com era company. Believe me, i'm a fan. But let's not forget one isescapable fact - our current TV COMES FROM FREAKING SPACE! it doesn't get any higher tech and awesome than that. And it scales - 1 person or 1 billion - the sats can handle it. and all 1 billion of those people can watch different things, and the satellite yawns man. You can't say that about the internet.


I freely admit that it is possible, but today, that's not how I see it happening, that's all. I have no problem with someone analyzing the trends and data available and forming a different opinion than mine about what it means for the future. My only problem is when someone trys to discredit my opinion by saying the facts and trends used to form my opinions are lies or mis-information.

I also never said satellites weren't part of the picture either.  just that we wouldn't be paying their owners for TV.


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## BattleScott (Aug 29, 2006)

Skyboss said:


> Here's a dose of reality for you:
> 
> http://www.digitaltrends.com/computing/u-s-census-finds-ongoing-disparities-in-broadband-access/


I'll leave the personal stuff out, other than to say you are WAY off about that too.

The article just contains a verbal explanation of what we have already discussed. But, did you happen to read the last paragraph?


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> I actually agree with most of what you're saying here. But what I see as the chief advantage to IP or internet delivery (in the future) is not about content, delivery methods or other content related issues, it is the advertising revenue machine that it will create. Advertising is what TV is really all about anyways, and it is what will drive the growth in availability as well as the reduction in cost to the content consumer in the end. I can see a network like Discovery being able increase their advertising revenue for a show like Deadliest Catch by 10x over what they get today by being able to deliver targetted advertising to the indivdual viewer.


First thing that made any sense in what your stance is, actually. From that perspective I can see a point you are making.

However, advertising models on the internet have been cheaper thus far than advertising in broadband. You will have to get a major rethink in the advertising community for your vision to happen. That rethink may be fermenting or starting but to date it has not.

For your vision of the future to happen, a lot more has to happen in various areas. Technology, financial, human use models, distribution use models. Because of the many factors involved, it makes it more unlikely or at the very least longer to have happen than less than a decade.

I know that some aspects of your model exist today, but whiffs of happenings are not trends. Nor are they paradigm shakers by themselves. Look at 8 track tapes and other technologies that never really took root. Many of them presaged later developments (quadrophonic sound failed but eventually we got 5.1 but after a good gap of time; laser disc giving way to DVD) but many just failed.

Back to the point of targetted advertising. Not sure that 10x is a good number but I am not going to debate the number. What I am going to debate is that if and when this model of advertising takes hold, it will mean that skipping or FF through commercials will have to be disabled as you are promising actual looks. This will work as long as you have 15 to 30 second commercial breaks. The very short commercial breaks are not only "put up with" by most viewers, they are actually a PITA to skip around, so they get watched more often than long breaks. BUT, advertisers are a sneaky bunch. We used to have short commercial breaks that kept people at their TVs during them. They were often the show's single sponsor and often worked into the show itself and were very quick. Kept your attention. Well, in the interest of making more and more money, they added and added until now commercial breaks run 3 to 5 minutes and a half hour show is down to 18 to 20 minutes. There goes the model.

Anyhow, I can see where you can get more in advertising dollars if you know the commercials will get watched but I still think your numbers are off. Why would YOUR price drop from today's broadband? They can milk both sides of the equation. The customer won't see the money they make from ads. Magazine prices and newspaper prices continue to climb with targetted advertising.

And what is in it for the ISPs? Nothing. If you completely decouple major ISPs from cable systems, then one of the forces that keeps internet prices down (the bundling with other services) is gone and prices will rise, especially with usage.


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## tonyd79 (Jul 24, 2006)

BattleScott said:


> I'll leave the personal stuff out, other than to say you are WAY off about that too.
> 
> The article just contains a verbal explanation of what we have already discussed. But, did you happen to read the last paragraph?


I did.

We are a country that cannot provide for sick and dying people with a prolonged battle and you think that government regulation of the internet is going to happen without a fight?

There are already forces in Congress that are claiming that net neutrality is business stifling and portraying it as "taking internet away from the people" because businesses are not free to do what they want.

Again, your uptopian view is tinting things (as is my jaded view, I admit) and, at best, your time frame is far off.


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## bonscott87 (Jan 21, 2003)

tulanejosh said:


> On demand. This is the only real tangible benefit that it has over the existing model. But how necessary is this? Are you that specific in what you want to watch that you plan it out to the exact show? I think there's some value to on demand. I have a little kid... he's likes his cartoons, it cool to be able to turn on Netflix and put the cartoon on. I'll admit that, but in general - a DVR works just fine for me. I can't watch enough to keep up with it anyhow. What is this supposed major competitive advantage of on demand all the time. Do you really find that there's nothing on your dvr or live streams to satisfy you?


I think a DVR *is* On Demand now. I've had a DVR since 2000 and it's on demand for me. I don't watch Live TV, I watch what is recorded on my DVR. That's "on demand" isn't it? I mean it's no different to sit down and either start your recording of Bones on your DVR then it is to start watching Bones streamed on Hulu. Exact same thing.

In fact just the other night we sat down to watch a recorded show and was getting quite a few audio dropouts (sometimes our OTA locals just suck) and so I stopped and deleted it and fired up the same episode via Hulu.

So to me anyway the DVR is on demand just like any streaming service.


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## tonyd79 (Jul 24, 2006)

bonscott87 said:


> I think a DVR *is* On Demand now. I've had a DVR since 2000 and it's on demand for me. I don't watch Live TV, I watch what is recorded on my DVR. That's "on demand" isn't it? I mean it's no different to sit down and either start your recording of Bones on your DVR then it is to start watching Bones streamed on Hulu. Exact same thing.
> 
> In fact just the other night we sat down to watch a recorded show and was getting quite a few audio dropouts (sometimes our OTA locals just suck) and so I stopped and deleted it and fired up the same episode via Hulu.
> 
> So to me anyway the DVR is on demand just like any streaming service.


By your definition, you can call a purchased DVD "on demand."

Until the delivery mechanism makes watching them totally seamless from one mechanism to another, they are quite different, IMHO.


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## Skyboss (Jan 22, 2004)

BattleScott said:


> I'll leave the personal stuff out, other than to say you are WAY off about that too.
> 
> The article just contains a verbal explanation of what we have already discussed. But, did you happen to read the last paragraph?


LOL. Money grows on trees where you're from then? :nono2: :lol:


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> First thing that made any sense in what your stance is, actually. From that perspective I can see a point you are making.
> 
> However, advertising models on the internet have been cheaper thus far than advertising in broadband. You will have to get a major rethink in the advertising community for your vision to happen. That rethink may be fermenting or starting but to date it has not.
> 
> ...


Go back and read what I have been stating. I never said internet would be cheaper, only that by replacing what we pay for internet AND pay TV with a higher priced internet plan it will end up being cheaper. But I have been specifically stating all along that the internet would cost more and that the advertising would be the real attraction for the content owners.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> I did.
> 
> We are a country that cannot provide for sick and dying people with a prolonged battle and you think that government regulation of the internet is going to happen without a fight?
> 
> ...


The applicable part to this discussion is that they are trying to get hi-speed internet access added to the existing subsidy programs for the poor and hard-to-serve.


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## Beerstalker (Feb 9, 2009)

While 85% of people may have access to high speed internet (which I'm not sure I agree with) I can pretty much guarantee that is not all 10MB/s, and it won't work for streaming. If the 85% is true then they have to be counting Satellite based, and Cellular network based internet service. Both of which are pretty much useless for internet streaming like we are talking about here because of the speeds and the dowload caps in place.

I have HughesNet internet service with 1.6Mb/s download speed and it costs me $90 a month. Even if it was fast enough to stream video (I have a hard time streaming low def youtube clips) I am limited to downloading a total of 500Mb per day before it drops down to landline phone speeds. That isn't even enough to watch one full length movie in DVD quality, let alone anything in HD.


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## Skyboss (Jan 22, 2004)

BattleScott said:


> The applicable part to this discussion is that they are trying to get hi-speed internet access added to the existing subsidy programs for the poor and hard-to-serve.


So we'll just add the several billion for this to the $14 trillion in debt.

Got it. :nono2:

Glad its that simple for you.


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## tulanejosh (May 23, 2008)

tonyd79 said:


> By your definition, you can call a purchased DVD "on demand."
> 
> Until the delivery mechanism makes watching them totally seamless from one mechanism to another, they are quite different, IMHO.





bonscott87 said:


> I think a DVR *is* On Demand now. I've had a DVR since 2000 and it's on demand for me. I don't watch Live TV, I watch what is recorded on my DVR. That's "on demand" isn't it? I mean it's no different to sit down and either start your recording of Bones on your DVR then it is to start watching Bones streamed on Hulu. Exact same thing.
> 
> In fact just the other night we sat down to watch a recorded show and was getting quite a few audio dropouts (sometimes our OTA locals just suck) and so I stopped and deleted it and fired up the same episode via Hulu.
> 
> So to me anyway the DVR is on demand just like any streaming service.


I actually very much agree. On Demand is more than just a delivery method. It's watching what you want when you want to. It doesn't matter whether its recorded on a box from a live broadcast or streaming instantly - the end result is the same. You are watching what you want when you want to. If you program your dvr correctly - as i do - you never are left without something to watch.

Personal anecdote - i don't watch live tv either. In fact - i don't even know the day and time most of my favorite shows are on. They are just seemingly always there on my DVR. What day is Justified on? no clue, and it doesn't matter because i have 8 of them recorded on my box.

I agree with you. DVR provide much the same end result as on demand, which IMHO dilutes the "benefit" that iptv provides.


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## BattleScott (Aug 29, 2006)

Skyboss said:


> So we'll just add the several billion for this to the $14 trillion in debt.
> 
> Got it. :nono2:
> 
> Glad its that simple for you.


You provided the link, not me. 

Do you care about poor people or not? What happened to this compassionate soul from just a day ago? 



Skyboss said:


> If you think for even half a second 92% of the population can fork over $50 a month just for internet access, then you really have an unrealistic view of the world. Probably about 8% of the population alone has lifeline telephone service, never mind their inability to afford internet access. Heck unemployment is at 10%, you think they have the money for what you're proposing?


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## tonyd79 (Jul 24, 2006)

tulanejosh said:


> I actually very much agree. On Demand is more than just a delivery method. It's watching what you want when you want to. It doesn't matter whether its recorded on a box from a live broadcast or streaming instantly - the end result is the same. You are watching what you want when you want to. If you program your dvr correctly - as i do - you never are left without something to watch.


No. Words mean something. On Demand has a meaning. It is an accepted meaning. You can argue that a DVR is as effective a delivery mechanism but when we blur words for each individuals sake, then they lose their meaning and we are no longer communicating.

You might as well call a grocery store a restaurant if they serve pre-cooked meals.



tulanejosh said:


> I agree with you. DVR provide much the same end result as on demand, which IMHO dilutes the "benefit" that iptv provides.


See, that is what I am saying. That is all. Carry on.


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## BattleScott (Aug 29, 2006)

Beerstalker said:


> While 85% of people may have access to high speed internet (which I'm not sure I agree with) I can pretty much guarantee that is not all 10MB/s, and it won't work for streaming. If the 85% is true then they have to be counting Satellite based, and Cellular network based internet service. Both of which are pretty much useless for internet streaming like we are talking about here because of the speeds and the dowload caps in place.
> 
> I have HughesNet internet service with 1.6Mb/s download speed and it costs me $90 a month. Even if it was fast enough to stream video (I have a hard time streaming low def youtube clips) I am limited to downloading a total of 500Mb per day before it drops down to landline phone speeds. That isn't even enough to watch one full length movie in DVD quality, let alone anything in HD.


Actually, the 85% is "wireline" only (DSL, Copper, Cable modem or Fiber).

(it's all in the link.)


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## tonyd79 (Jul 24, 2006)

Beerstalker said:


> While 85% of people may have access to high speed internet


What does "access" mean? The normal meaning of the word means "a way or means of approach." That means that if you have a view of the western sky, you have "access" to HughesNet. It does not mean you are wired up, does it?


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## Beerstalker (Feb 9, 2009)

BattleScott said:


> Actually, the 85% is "wireline" only (DSL, Copper, Cable modem or Fiber).
> 
> (it's all in the link.)


Upon closer look into the link it does appear that you are correct, but this still seemed off to me. So then I had to look into it more and it appears that about 80% of the US population live in urban areas, so I guess that starts to make more sense. Guess you just don't really realize that when you grow up 3 miles outside of a town of 15,000, and now live 5 miles outside of a town of 1,500

All I know is it sucks having to stick with HughesNet cause I can't get DSL or cable internet. DSL is available about 1.5 miles down the road, but they won't bring it any further for just 3 houses (even though there are already phone lines in place).


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## Skyboss (Jan 22, 2004)

BattleScott said:


> You provided the link, not me.
> 
> Do you care about poor people or not? What happened to this compassionate soul from just a day ago?


How does adding to the national debt which will ultimately increase the number of unemployed because of the economic impact of such debt help the poor get a job, let alone better internet service.

Man, take an economics class. :nono2:



tonyd79 said:


> What does "access" mean? The normal meaning of the word means "a way or means of approach." That means that if you have a view of the western sky, you have "access" to HughesNet. It does not mean you are wired up, does it?


It means if they can afford it, there should be a pipe to their location. That only tells a part of the story, with all that access only 58% uptake the capability.


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## tonyd79 (Jul 24, 2006)

Skyboss said:


> How does adding to the national debt which will ultimately increase the number of unemployed because of the economic impact of such debt help the poor get a job, let alone better internet service.
> 
> Man, take an economics class. :nono2:


According to every economist I talked to (at least one with a PhD at Harvard), the national debt does NOT lead to increased unemployment. Actually, cutting the national budget leads to unemployment because the goverment is a big employer. The only time the economy took a step backward during the FDR adminstration was when they cut the budget in 1937(?).

But nevermind on that. Back to the real argument.



Skyboss said:


> It means if they can afford it, there should be a pipe to their location. That only tells a part of the story, with all that access only 58% uptake the capability.


Thanks. That is what I thought. Our friend keeps touting that number as if it means all those people are using bandwidth today. They are not. Just fleshing out to a full 85% from 58% (using your number) would put a strain on the infrastructure. That is why caps are being implemented, not out of meanness. They are being implemented out of necessity.


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## Satelliteracer (Dec 6, 2006)

BattleScott said:


> Go back and read what I have been stating. I never said internet would be cheaper, only that by replacing what we pay for internet AND pay TV with a higher priced internet plan it will end up being cheaper. But I have been specifically stating all along that the internet would cost more and that the advertising would be the real attraction for the content owners.


For this to happen, it means the margin squeeze is going to happen on the broadband side because there is no way the content providers are going to take a squeeze. IMO, they can't produce the content they are expected to produce without knowing what income they have coming in. Considering how profitable the margins are for Telcos right now in broadband delivery, I have a hard time seeing them cut into those revenue streams, especially with them losing money in other areas.


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## Satelliteracer (Dec 6, 2006)

Skyboss said:


> So we'll just add the several billion for this to the $14 trillion in debt.
> 
> Got it. :nono2:
> 
> Glad its that simple for you.


$14 Trillion today...up from $10.6 trillion just 3 years ago. By 2020, we're on pace to be at.........

I can't even go there. What a mess. We might all be using tin cans and string at that point because we may be so far gone. (I kid...sort of)


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## Tom Robertson (Nov 15, 2005)

I'm less worried about the theoretical capacity to the home. It's the capacity throughout the entire internet, especially at the providers that would need an overhaul to replace a one to many broadcast system to a many to many point to point transmission system.

That infrastructure is not going to be cheap. And by the time you add all those costs in, guess what, you end up spending the same amount of money on distribution as is spent by MSOs today. Thus, for the most part, I don't see any savings or real income increases to the channels themselves. Just a new distribution of the costs and revenues. So who will make those kinds of risks?

So I keep thinking the current model will stay in place for a fairly long time. It will adjust, there will be more opportunities for delivery, there will be new models, but just like movie theatres haven't gone away, I don't see MSOs going away in 2020.

Think about Youtube for a moment. Did it reduce the broadcast needs? Perhaps a little. What it really did was increase the needs for IP transmissions. Far more than it reduced. 

Cheers,
Tom


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## Satelliteracer (Dec 6, 2006)

tonyd79 said:


> According to every economist I talked to (at least one with a PhD at Harvard), the national debt does NOT lead to increased unemployment. Actually, cutting the national budget leads to unemployment because the goverment is a big employer. The only time the economy took a step backward during the FDR adminstration was when they cut the budget in 1937(?).
> 
> But nevermind on that. Back to the real argument.
> 
> .


The PhD's at UCLA may not agree with you. 

http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx


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## Satelliteracer (Dec 6, 2006)

Tom Robertson said:


> I'm less worried about the theoretical capacity to the home. It's the capacity throughout the entire internet, especially at the providers that would need an overhaul to replace a one to many broadcast system to a many to many point to point transmission system.
> 
> That infrastructure is not going to be cheap. And by the time you add all those costs in, guess what, you end up spending the same amount of money on distribution as is spent by MSOs today. Thus, for the most part, I don't see any savings or real income increases to the channels themselves. Just a new distribution of the costs and revenues. So who will make those kinds of risks?
> 
> ...


Well said


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## bonscott87 (Jan 21, 2003)

tonyd79 said:


> By your definition, you can call a purchased DVD "on demand."
> 
> Until the delivery mechanism makes watching them totally seamless from one mechanism to another, they are quite different, IMHO.


Actually I would consider a DVD "on demand". The poster was stating that the DVR was somehow different in viewing then streaming. No, both are the same. I sit down and want to watch NCIS Sunday afternoon I could do it either from my DVR or via streaming. Either one is watching it on my terms, not Live TV. So yes, both are on demand. As is grabbing a DVD from the shelf.

When you "cut the cord" it's all "on demand". Certainly everything I get is on demand. It's either recorded on my WMC DVR from OTA or streaming. Ain't no live TV here outside of football Sundays in the fall.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> For this to happen, it means the margin squeeze is going to happen on the broadband side because there is no way the content providers are going to take a squeeze. IMO, they can't produce the content they are expected to produce without knowing what income they have coming in. Considering how profitable the margins are for Telcos right now in broadband delivery, I have a hard time seeing them cut into those revenue streams, especially with them losing money in other areas.


In my opinion, this will end up being a win-win for both. As I stated before, I think the content providers will see their increases in the advertising arena. IP opens up enormous opportunities in that area.

On the broadband side, I see them being able to generate similar or equal revenue at reduced costs, by replacing "cheap internet/expensive TV customers" with "expensive internet" customers and eliminating the carriage fee costs of providing TV.


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## BattleScott (Aug 29, 2006)

Tom Robertson said:


> I'm less worried about the theoretical capacity to the home. It's the capacity throughout the entire internet, especially at the providers that would need an overhaul to replace a one to many broadcast system to a many to many point to point transmission system.
> 
> That infrastructure is not going to be cheap. And by the time you add all those costs in, guess what, you end up spending the same amount of money on distribution as is spent by MSOs today. Thus, for the most part, I don't see any savings or real income increases to the channels themselves. Just a new distribution of the costs and revenues. So who will make those kinds of risks?
> 
> ...


This is where the hybrid delivery systems will take over. Live broadcast streams can be handled via satellite while the on-demand type of content is handled over the traditional broadband connection.


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## BattleScott (Aug 29, 2006)

tonyd79 said:


> Thanks. That is what I thought. Our friend keeps touting that number as if it means all those people are using bandwidth today. They are not. Just fleshing out to a full 85% from 58% (using your number) would put a strain on the infrastructure. That is why caps are being implemented, not out of meanness. They are being implemented out of necessity.


I'm going to go out on limb and assume that you are referring to me.

If you double check the figures in table 6 you'll see the percentage is actually 68% of all housholds reporting having a broadband connection. But really that's not important because nothing about this discussion has anything to do with "usage" statistics of today (sound of broken record skipping in the background...)

You imply that I am trying to mislead by using a number that is not real or relavent and you are absolutely incorrect. I have never offered the statistic as anything other than it is. If you need a refresher on exactly what was said here it is:



BattleScott said:


> Availabilty figures are from the NTIA/FCC broadband map.
> 
> Acutal connection statistics from the NTIA website
> 
> ...


What part of that is trying to pass it off as something it's not?

My stated vision of 2020 would require a certain level of accessbility in order to be considered valid. The 85% availability statistic is real and accurate. The reasons why some people choose not to access it today do not make it any less available, and certainly do not factor in to this debate at all.


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## tonyd79 (Jul 24, 2006)

Battle. I am not insinuating any intent in your part to mislead. I am having a discussion that involves questions, prodding, back and forth. I have no ax to grind and have absolutely no emotion in this discussion other than enjoying the give and take. 

Even with statistics there are shades of information and perspective. I consider this an intellectual conversation that there is no right or wrong as we are discussing the future and it has not happened yet. 

I am not sure why you keep trying to make this personal. It is not. I think your projection is mistaken and I think you put a happy spin on current situations but other than a viewpoint I see nothing in this conversation by you or others to distort anything. 

Peace.


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## BattleScott (Aug 29, 2006)

Satelliteracer said:


> The same advertising gains in the IP world start to become available in the STB world later this summer. Addressable ads, dynamic ads by customer, etc.


Yeah, but I just don't think that will offer the same advantage to the content providers as it will for the carriers. I also think there are going to be some big privacy concerns that PAYTV operators will need to deal with that a content provider can exchange for "free access". Additionally, Cable and Sat providers can't require me to connect an ethernet cable to my STB, IP would make it a given.



Satelliteracer said:


> You may be right on the second prediction, but which provider is going to jump in and take that risk to see if your theory is right vs a guaranteed revenue stream and they know works? Which builder is going to spend all that $$ hoping if they build it, they will come?
> 
> Here's what I'm noticing in the trades...the last few years a few programmers went down the Netflix path and other OTT options seeking additional revenue. Most of them seem to be regretting it and will likely do very different deals next time around. Then there are others like HBO who flat out said TAKE A HIKE to all these other options.


Only time will tell for the rest of it. But I could easily see Verizon or AT&T abandoning their TV offerings should the day arrive when they can woo premium internet subscribers away from the dominant PayTV providers. The only thing that will enable that is content though. That is where I think the wars will be fought over the next several years.


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## tulanejosh (May 23, 2008)

Thank you. Figure you are referring to me. On demand is a concept - watching what i want when i want regardless of broadcast schedule. The term may have been co-opting as a rallying cry by the BattleScotts and Huluist's of the world - but its intent is exactly that - watching what you want when you want. I can do that in any number of ways, including DVRs. With what i would argue is the same level of effort you would spend hooking your computer up to your tv you can program a dvr to provide you vast library of programming of interest to you. You might have to wait a little bit more to build that library than you would with Hulu, but the end result is the same. 8 episodes of Top Gear waiting for me when i get home to get my Brit on. I'm not saying one is better than the other, that they use the same technology, or that there is no difference - just that they provide a similar end result and that's all that matters in the end.


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## tulanejosh (May 23, 2008)

BattleScott said:


> Yeah, but I just don't think that will offer the same advantage to the content providers as it will for the carriers. I also think there are going to be some big privacy concerns that PAYTV operators will need to deal with that a content provider can exchange for "free access". Additionally, Cable and Sat providers can't require me to connect an ethernet cable to my STB, IP would make it a given.
> 
> Only time will tell for the rest of it. But I could easily see Verizon or AT&T abandoning their TV offerings should the day arrive when they can woo premium internet subscribers away from the dominant PayTV providers. The only thing that will enable that is content though. That is where I think the wars will be fought over the next several years.


I think you are overestimating the value of that targeted advertising. I get where you are coming from. As i mentioned in a previous post I make my living on the internet. When selling advertising on your site - its very true that you can get vastly improved rates if you can provide advertisers with access to an audience that is taylor made for their produce. Minority small business owners right now command a HEFTY premium, particularly on hispanic oriented sites. However - when they've attempted to apply this concept to streaming video - it hasn't worked out as well.

Look at hulu. It started initialy as what you are calling for. Free-ish service that was supported by targeted advertising embedded in the flash streams. However - as is very public knowledge - it wasn't enough to cover costs, turn profits, etc - and they launched Hulu Plus (which is still pretty much a failure from a business standpoint).

Now I'll grant you - maybe hulu mismanaged it and there could be any number of mitigating factors that spurred on less then stellar performance. But we are not so far in the dark ages of the internet and streaming video that there aren't thousands of really really bright people with a ton of experience trying to make this work. And right now - they can't.

Those business problems do not go away with time, they don't go away with technology, they don't go away with a more mass audience. If anything - they are exacerbated because all of those increase costs.


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## tulanejosh (May 23, 2008)

BattleScott said:


> Yeah, but I just don't think that will offer the same advantage to the content providers as it will for the carriers. I also think there are going to be some big privacy concerns that PAYTV operators will need to deal with that a content provider can exchange for "free access". Additionally, Cable and Sat providers can't require me to connect an ethernet cable to my STB, IP would make it a given.
> 
> Only time will tell for the rest of it. But I could easily see Verizon or AT&T abandoning their TV offerings should the day arrive when they can woo premium internet subscribers away from the dominant PayTV providers. The only thing that will enable that is content though. That is where I think the wars will be fought over the next several years.


all due respect - att and verizon aren't the same types of major players as Directv, Dish, Comcast, Time Warner, Cox, Charter, etc. You could very well be right about VZ and ATT, but you can't draw any meaningful conclusions because they aren't really all that serious about TV. It's not a core business and whether they are in that business or not doesn't have a tremendous impact on who they are as a company. For all of the true video providers, you can't say that, and thus their response to this brave new world as it were will be very different.


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## Tom Robertson (Nov 15, 2005)

tulanejosh said:


> all due respect - att and verizon aren't the same types of major players as Directv, Dish, Comcast, Time Warner, Cox, Charter, etc. You could very well be right about VZ and ATT, but you can't draw any meaningful conclusions because they aren't really all that serious about TV. It's not a core business and whether they are in that business or not doesn't have a tremendous impact on who they are as a company. For all of the true video providers, you can't say that, and thus their response to this brave new world as it were will be very different.


Good point about AT&T and Verizon's core business.

On another front:
To replace MSOs, two groups need to get the $$ to invest in new technologies: infrastructure and providers. They need business models to provide that money.

Cheers,
Tom


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## jpl (Jul 9, 2006)

tulanejosh said:


> all due respect - att and verizon aren't the same types of major players as Directv, Dish, Comcast, Time Warner, Cox, Charter, etc. You could very well be right about VZ and ATT, but you can't draw any meaningful conclusions because they aren't really all that serious about TV. It's not a core business and whether they are in that business or not doesn't have a tremendous impact on who they are as a company. For all of the true video providers, you can't say that, and thus their response to this brave new world as it were will be very different.


You're saying that based on what? Verizon is so unserious about being a TV provider... that they're creating a streaming ap, ala Netflix, to allow you to subscribe to FiOS TV without having the fiber run to your house. And both U-Verse and FiOS TV have been burying traditional cable in terms of growth, customer retention, and customer satisfaction. And with their current subscriber base, both Verizon and AT&T are now among the top 10 of TV service providers in the country. Sure as hell looks like a core business to me.

That's like saying that Comcast isn't really that serious about being a voice provider because that's not THEIR core business, and yet they're now one of the largest voice providers in the country.

The industries have been changing - there's less separation between what makes a cable company vs. what makes a telco anymore.


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## jpl (Jul 9, 2006)

This whole discussion has been an interesting read. However, at the end of the day, there appear to be two camps. I'm of the camp that believes that there will be no real market for IP to take over the world, much less bring about massive changes in the industry. It's just not cost-effective to do so - it would be more expensive than what's there now, requiring massive outlays in cash just to get to what consumers can ALREADY get with their current services. There's simply no driver, from what I can see, for cutting the cord to be a major player.

Realize that many of the cost-drivers which have pushed TV prices to where they are right now are due to consumer demand. Consumers demand it... TV providers provide it, and they have to charge for it. In other words, if consumer demand changes, you'll see different business approaches in the industry. Heck you may be seeing that now - DirecTV is the first major provider who's publicly said that they're examining which channels to cut in order to keep price increases down.

Just like when gas prices go up all of a sudden every car maker touts their fuel efficiency, when consumer attitudes about TV change on a large scale, TV service providers will respond. It's a hell of a lot easier for a cable company to restructure some stuff to lower prices (offering bargain tiers, e.g.... or more flexible bundling) than it would be for a whole new industry to emerge. As long as cable/dbs remains cheaper, more cost-effective, more reliable, more scalable, more flexible, and more available to consumers, I see no real driver to totally up-end the industry.

But markets are tricky things to predict. I also think these companies are trying to figure out what the paradigm going forward is going to be. This appears to be the next 'dot com' area, where you have much speculative investing as companies try to create the paradigm. The ultimate arbitrator on whether IP becomes a major force or not will be the end-consumer.

All that being said, I do have a hard time seeing that coming to pass. Wanting it to happen won't do it - and even if you have a superior product at the end of the day, if the consumer doesn't want that superior product for whatever reason (Beta), then the debate over the merits of that product are moot.


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## sigma1914 (Sep 5, 2006)

jpl said:


> You're saying that based on what? Verizon is so unserious about being a TV provider... that they're creating a streaming ap, ala Netflix, to allow you to subscribe to FiOS TV without having the fiber run to your house. And both U-Verse and FiOS TV have been burying traditional cable in terms of growth, customer retention, and customer satisfaction. And with their current subscriber base, both Verizon and AT&T are now among the top 10 of TV service providers in the country. Sure as hell looks like a core business to me.
> 
> That's like saying that Comcast isn't really that serious about being a voice provider because that's not THEIR core business, and yet they're now one of the largest voice providers in the country.
> 
> The industries have been changing - there's less separation between what makes a cable company vs. what makes a telco anymore.


Top 10 isn't that significant when there's only 15 companies. Those 2 companies are trying to play with the big dogs, but they've got a long way to go.


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## jpl (Jul 9, 2006)

sigma1914 said:


> Top 10 isn't that significant when there's only 15 companies. Those 2 companies are trying to play with the big dogs, but they've got a long way to go.


Except that in terms of subscribers, both Verizon and AT&T are on par with many of the companies that the poster listed in his post! Verizon has just under 4 million video subscribers. Cox has just over 6 million. And based on current growth patterns, both Verizon and AT&T are set to overtake companies like Cox and Charter probably within the next few quarters. Again, please explain how this squares with the fact that TV service isn't a core business for these guys, because by every measure, it is.


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## jpl (Jul 9, 2006)

Oh, and your numbers are way off. There are far more than 15 MSOs in the country. That's just a ridiculous figure. Heck, here's the list of the top 25, as of September 2010:

http://www.ncta.com/Stats/TopMSOs.aspx

Note that list. Verizon is number 7. And they're even bigger now. Per their latest quarter additions, they're at just over 3.9 million subscribers. No, not quite on par with the big three (comcast, directv and dish) but certainly bigger than most of the other cable companies out there.


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## bakerfall (Aug 23, 2006)

jpl said:


> This whole discussion has been an interesting read. However, at the end of the day, there appear to be two camps. I'm of the camp that believes that there will be no real market for IP to take over the world, much less bring about massive changes in the industry. It's just not cost-effective to do so - it would be more expensive than what's there now, requiring massive outlays in cash just to get to what consumers can ALREADY get with their current services. There's simply no driver, from what I can see, for cutting the cord to be a major player.
> 
> Realize that many of the cost-drivers which have pushed TV prices to where they are right now are due to consumer demand. Consumers demand it... TV providers provide it, and they have to charge for it. In other words, if consumer demand changes, you'll see different business approaches in the industry. Heck you may be seeing that now - DirecTV is the first major provider who's publicly said that they're examining which channels to cut in order to keep price increases down.
> 
> ...


I think you are missing one important group in all this, those who don't believe IPTV will rule the world but do see it as a cheaper and viable option for their needs.

Let's look at this from a pure cost standpoint and only with what is easily available today:
OTA (free): Source for Network TV, sports, local sports, etc 
Netflix ($7.99 per month): Movies and TV shows
Hulu and Hulu Plus ($7.99 per month): Current and past seasons of Cable and Network Shows
MLB TV ($120 per season): All MLB baseball games in HD
ESPN3 (free): All ESPN televised sporting events (sans NFL)

So for ~$25 a month I can get 95%+ the content that I use now and save my self ~$100 per month.


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## jpl (Jul 9, 2006)

bakerfall said:


> I think you are missing one important group in all this, those who don't believe IPTV will rule the world but do see it as a cheaper and viable option for their needs.
> 
> Let's look at this from a pure cost standpoint and only with what is easily available today:
> OTA (free): Source for Network TV, sports, local sports, etc
> ...


Actually... no I'm not. Again, look at some of the posts on here. Right now what you get over IP delivery is heavily subsidized by the content providers (Hulu/Hulu Plus, e.g.). They're not profitable yet. These content companies are trying to create a market for them, so they're currently taking a bath on them. In order for this to become a major force, these services have to become profitable in that delivery mechanism. There's no way in hell that Hulu can do that only charging you $8/month.

Same thing with Netflix. If you think their streaming only package is going to stay at $8/month... good luck with that one. Despite all their ads, right now streaming makes up a very small portion of their viewership. Their bread and butter is still DVD delivery. As these service providers start to feel the pressure of competition from Netflix, there's going to be more pressure brought to bear on the content providers to make it even harder/more expensive for Netflix to get streaming content (look at their Epix deal, for crying out loud - Netflix is paying, what, $1Billion for a 5 year streaming deal to get them. Forget about getting HBO's holdings. HBO thinks that Netflix is charging too little on principle, and believes that unless Netflix becomes a more premium service, they don't want to have anything to do with them.

That's basically the whole point of my argument. To get even close to what cable/dbs can provid you now, AND to make money, IP delivery will have to be a hell of alot more expensive than it is now to each consumer. It's cheaper now because they're not making money on it.


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## sigma1914 (Sep 5, 2006)

jpl said:


> Oh, and your numbers are way off. There are far more than 15 MSOs in the country. That's just a ridiculous figure. Heck, here's the list of the top 25, as of September 2010:
> 
> http://www.ncta.com/Stats/TopMSOs.aspx
> 
> Note that list. Verizon is number 7. And they're even bigger now. Per their latest quarter additions, they're at just over 3.9 million subscribers. No, not quite on par with the big three (comcast, directv and dish) but certainly bigger than most of the other cable companies out there.


I was going by this chart and didn't think rinky-dink 100k-300k providers really mattered. 









By the way, Verizon has 3.7 now...not 3.9: http://www.vision2mobile.com/news/2011/04/at-t-verizon-telco-tv-tops-7-million.aspx


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## bakerfall (Aug 23, 2006)

jpl said:


> Actually... no I'm not. Again, look at some of the posts on here. Right now what you get over IP delivery is heavily subsidized by the content providers (Hulu/Hulu Plus, e.g.). They're not profitable yet. These content companies are trying to create a market for them, so they're currently taking a bath on them. In order for this to become a major force, these services have to become profitable in that delivery mechanism. There's no way in hell that Hulu can do that only charging you $8/month.
> 
> Same thing with Netflix. If you think their streaming only package is going to stay at $8/month... good luck with that one. Despite all their ads, right now streaming makes up a very small portion of their viewership. Their bread and butter is still DVD delivery. As these service providers start to feel the pressure of competition from Netflix, there's going to be more pressure brought to bear on the content providers to make it even harder/more expensive for Netflix to get streaming content (look at their Epix deal, for crying out loud - Netflix is paying, what, $1Billion for a 5 year streaming deal to get them. Forget about getting HBO's holdings. HBO thinks that Netflix is charging too little on principle, and believes that unless Netflix becomes a more premium service, they don't want to have anything to do with them.
> 
> That's basically the whole point of my argument. To get even close to what cable/dbs can provid you now, AND to make money, IP delivery will have to be a hell of alot more expensive than it is now to each consumer. It's cheaper now because they're not making money on it.


Who is "they" in your "they aren't making profit" comment? Both Hulu and Netflix made profits and paid the studios/networks for the content, so they made profits as well. Is it on par with DirecTV? No, but it doesn't have to be.

You're also looking at this from the point of view of those making money. I'm looking at it from the point of view of my wallet. I don't care how much money is being made off these technologies, what I care about is what it's costing me. Will those prices stay at $8/month? Probably not. Will they ever cost me what DirecTV costs me now? No.


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## jpl (Jul 9, 2006)

bakerfall said:


> Who is "they" in your "they aren't making profit" comment? Both Hulu and Netflix made profits and paid the studios/networks for the content, so they made profits as well. Is it on par with DirecTV? No, but it doesn't have to be.
> 
> You're also looking at this from the point of view of those making money. I'm looking at it from the point of view of my wallet. I don't care how much money is being made off these technologies, what I care about is what it's costing me. Will those prices stay at $8/month? Probably not. Will they ever cost me what DirecTV costs me now? No.


At some point you HAVE to care about how much money they're making off these technologies, because if they don't eventually turn profitable... if there's no ROI... then the technology goes away. I'm sure there were some real ardent fans of Betamax... and HD DVD... doesn't mean that they're profitable. And at the end of the day, if they're not profitable, there is no incentive for these companies to keep them around.


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## jpl (Jul 9, 2006)

sigma1914 said:


> I was going by this chart and didn't think rinky-dink 100k-300k providers really mattered.
> 
> 
> 
> ...


You're right, I was off by a bit with Verizon's numbers. In terms of who counts... I was countering the one post that used some of those very rinky dink MSOs! That post included companies like Cox and Charter. So, it's somehow invalid for me to point out that Verizon and AT&T are on par with some of the companies that were included in the post? Huh? My question was, and remains: what is the poster basing his assertion that TV isn't a core business for Verizon and AT&T, and therefore shouldn't be counted in the discussion? What makes them not worthy of being involved in the discussion? What evidence is there that TV service isn't a core business for them?

Is it size? Last I checked, size doesn't equate to core business. I can have a tiny business making widgets - that doesn't mean that widgets aren't my 'core business'. But size does count in terms of impact on the market... fine. But again... if you use size as a measure then VERIZON AND AT&T ARE ON PAR WITH HALF THE COMPANIES THAT THE POSTER LISTED.

Is it investment? Because both companies have invested very heavily in rolling out TV service. And how to explain Verizon's streaming ap type service? I guess someone forgot to tell Verizon that TV isn't a core business for them. Because apparently they didn't get the message.

Edit - in terms of not counting the 'rinky dink' companies, aren't you kinda defeating your own point? You said that being in the top ten was no big deal because there were only 15 such companies out there. Um, no, there are alot more than 15 such companies. And the fact that both verizon and at&t are now bigger than most of the traditional cable companies out there tells me that they're very serious about TV.


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## bakerfall (Aug 23, 2006)

jpl said:


> At some point you HAVE to care about how much money they're making off these technologies, because if they don't eventually turn profitable... if there's no ROI... then the technology goes away. I'm sure there were some real ardent fans of Betamax... and HD DVD... doesn't mean that they're profitable. And at the end of the day, if they're not profitable, there is no incentive for these companies to keep them around.


I have no idea where you are getting this idea that they aren't profitable. They may not be AS profitable as Cable or Sat, but they aren't losing money.

Netflix is making $50-60 mil per quarter (source)

Hulu is expecting revenue of around $500 million this year.


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## sigma1914 (Sep 5, 2006)

jpl said:


> You're right, I was off by a bit with Verizon's numbers. In terms of who counts... I was countering the one post that used some of those very rinky dink MSOs! That post included companies like Cox and Charter. So, it's somehow invalid for me to point out that Verizon and AT&T are on par with some of the companies that were included in the post? Huh? My question was, and remains: what is the poster basing his assertion that TV isn't a core business for Verizon and AT&T, and therefore shouldn't be counted in the discussion? What makes them not worthy of being involved in the discussion? What evidence is there that TV service isn't a core business for them?
> 
> Is it size? Last I checked, size doesn't equate to core business. I can have a tiny business making widgets - that doesn't mean that widgets aren't my 'core business'. But size does count in terms of impact on the market... fine. But again... if you use size as a measure then VERIZON AND AT&T ARE ON PAR WITH HALF THE COMPANIES THAT THE POSTER LISTED.
> 
> ...


We agree on about everything here lol.
They (VZN/ATT) deserve inclusion in the discussion more so than bottom feeder companies. But they're serious because they're new kids on the block. Cable companies have been the only game in town for decades in many, so shiny new companies like V & A are breaths of fresh air. Can they remain players? Hopefully. The "newness" might wear off and they'll be just another MSO company.

Side question - Is the streaming ap you mention like the useless TWC one where you only stream on your home network or can it go anywhere?


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## Ed Campbell (Feb 17, 2006)

"Skyboss" said:


> "How does adding to the national debt which will ultimately increase the number of unemployed because of the economic impact of such debt help the poor get a job, let alone better internet service.
> 
> Man, take an economics class. :nono2:"
> 
> ...


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## sigma1914 (Sep 5, 2006)

bakerfall said:


> I have no idea where you are getting this idea that they aren't profitable. They may not be AS profitable as Cable or Sat, but they aren't losing money.
> 
> Netflix is making $50-60 mil per quarter (source)
> 
> Hulu is expecting revenue of around $500 million this year.


Those will change a lot once carriage agreements expire. Netflix rates will be a lot different (higher) in 3-5 years.


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## Ed Campbell (Feb 17, 2006)

Technology upgrades - which are rolled out at a higher price - can be accompanied by collateral benefits at no extra charge. If the providers have half a brain. Yes - that means Comcast broadband.

They rolled out their 100mbps service a week or so ago - for more money than I could afford. But, at the same time my 6-12mbps subscription went to 10-20mbps. I haven't been mentioning it because I thought it might be a local fluke; but, friends the other side of the country have been experiencing the same.


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## HarryD (Mar 24, 2002)

Alan Gordon said:


> If given a choice, I'd take DirecTV (yeah, I'm still bummed by the lack of certain channels)...
> 
> ... that being said, monetary issues come into play.
> 
> ...


I just said goodbye to DirecTV myself... Have to try to cut costs... Got a great bundled package from RCN - TV/Phone/Internet (including Tivo Premere) for $130 per month.. 
I was paying $98 for DirecTV, $50 for Verizon phone, and $50 for Broadband.
I have had satellite service since 1997.


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## espaeth (Oct 14, 2003)

sigma1914 said:


> Those will change a lot once carriage agreements expire. Netflix rates will be a lot different (higher) in 3-5 years.


You're absolutely right about the costs going up, but I think it's going to be more expensive sooner than 3-5 years. Many of Netflix' streaming contracts expire starting this year:

http://blog.moviefone.com/2011/03/15/netflix-future-contracts/


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## Skyboss (Jan 22, 2004)

Ed Campbell said:


> Walk away from your ivory tower classes sometime and look at the real world.


Ivory tower classes? I'm over half way to retirement. Jeesh. Read my posts. I am talking about the real world. :nono:

For example:



Skyboss said:


> I really think you have a sheltered view of this issue. Perhaps you've never been economically challenged. It certainly seems that your view is from someone who is well... privileged. Which incidentally could lead someone to have a very skewed view of the world that anything is possible because it's possible for them.
> 
> If you think for even half a second 92% of the population can fork over $50 a month just for internet access, then you really have an unrealistic view of the world. Probably about 8% of the population alone has lifeline telephone service, never mind their inability to afford internet access. Heck unemployment is at 10%, you think they have the money for what you're proposing?


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## jpl (Jul 9, 2006)

bakerfall said:


> I have no idea where you are getting this idea that they aren't profitable. They may not be AS profitable as Cable or Sat, but they aren't losing money.
> 
> Netflix is making $50-60 mil per quarter (source)
> 
> Hulu is expecting revenue of around $500 million this year.


Netflix overall is profitable. What if they went streaming only? And $500 million for revenue is pretty good. What are their costs? What type of revenue would they need to make up what they get now from traditional video distribution? That's the key. It costs X to make the content. They're not going to voluntarily switch to a distribution mechanism that gives them significantly less than X. Also realize that the cost of distribution goes up under an IP only paradigm. Meaning that to make the same profit that they're making now, revenues would have to be even higher than what they currently are for traditional video distribution methods.

There is also the cost that the market will bear. At what price point will users reject this paradigm? At what point would you? Would you be willing to pay $200/month for what you're streaming now? That's another consideration - price drives demand. You increase it and your overall demand takes a hit. I may make a mint if I could sell gold-plated toilet seats, but if there isn't a market for it - if I can't find customers willing to shell out $1000 for a toilet seat - then there is no market.

BTW, as evidence of what I'm talking about - right from the very same link you included:

"Responding to concerns that its costs to acquire movie and TV content would soon rise exponentially as Netflix's customer base grows, Founder and Chief Executive Reed Hastings told analysts on a conference call that the company would work to maintain a 14% operating profit margin, and spend on content only in accordance with that target."

Getting access to streamed content is very expensive.


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## jpl (Jul 9, 2006)

sigma1914 said:


> We agree on about everything here lol.
> They (VZN/ATT) deserve inclusion in the discussion more so than bottom feeder companies. But they're serious because they're new kids on the block. Cable companies have been the only game in town for decades in many, so shiny new companies like V & A are breaths of fresh air. Can they remain players? Hopefully. The "newness" might wear off and they'll be just another MSO company.
> 
> Side question - Is the streaming ap you mention like the useless TWC one where you only stream on your home network or can it go anywhere?


Yeah, it does sound like we're both arguing from the same side of the issue . Too much coffee on my end, I guess.

There are two flavors to what they're producing, actually. One is an in-home streaming ap which will let you use your BD player or gaming system as an STB. The router that they give you will do the authentication.

The second is far more far-reaching, and I was pretty surprised when they unveiled at this year's CES - it's truly a streaming ap. They were running FiOS TV via a Samsung BD player, e.g. Looking at the Samsung menu, you had a FiOS TV selection right next to the Netflix selection. They're literally talking about letting you run FiOS TV outside their network. Right now, apparently, they're getting their legal ducks in a row, but apparently they're pretty far along with that.


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## tulanejosh (May 23, 2008)

jpl said:


> You're saying that based on what? Verizon is so unserious about being a TV provider... that they're creating a streaming ap, ala Netflix, to allow you to subscribe to FiOS TV without having the fiber run to your house. And both U-Verse and FiOS TV have been burying traditional cable in terms of growth, customer retention, and customer satisfaction. And with their current subscriber base, both Verizon and AT&T are now among the top 10 of TV service providers in the country. Sure as hell looks like a core business to me.
> 
> That's like saying that Comcast isn't really that serious about being a voice provider because that's not THEIR core business, and yet they're now one of the largest voice providers in the country.
> 
> The industries have been changing - there's less separation between what makes a cable company vs. what makes a telco anymore.


I'm saying based on realities of the activites those companies engage in. All the companies i listed - they do 1 or 2 things.. PayTV and Internet. VZ and ATT do a ton of other stuff from landline phones, to cell phones, to internet, etc. They are huge huge companies that have very diverse business activities. If pay tv disappeared from their product offering - it would not fundamentally alter their core mission.

You can't say that about the companies i listed. Provided TV is what they do. They would be fundamentally different companies if they didn't provide PayTV so there response to a world where PayTV didn't exist or was delivered through alternative methods would be very different than a company that wouldn't have much philosophical issue just being the pipes. ATT and VZ ARE a pipe. They would have no issue with that on the tv side. Time Warner and Comcast would.

If any of the other companies that i listed - had to suddenly


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## bakerfall (Aug 23, 2006)

jpl said:


> Netflix overall is profitable. What if they went streaming only? And $500 million for revenue is pretty good. What are their costs? What type of revenue would they need to make up what they get now from traditional video distribution? That's the key. It costs X to make the content. They're not going to voluntarily switch to a distribution mechanism that gives them significantly less than X. Also realize that the cost of distribution goes up under an IP only paradigm. Meaning that to make the same profit that they're making now, revenues would have to be even higher than what they currently are for traditional video distribution methods.
> 
> There is also the cost that the market will bear. At what price point will users reject this paradigm? At what point would you? Would you be willing to pay $200/month for what you're streaming now? That's another consideration - price drives demand. You increase it and your overall demand takes a hit. I may make a mint if I could sell gold-plated toilet seats, but if there isn't a market for it - if I can't find customers willing to shell out $1000 for a toilet seat - then there is no market.
> 
> ...


Hulu and Netflix have the fundamental difference that even in their paid model, Hulu has ads. This, combined with the fact that the Networks have ownership stake, certainly help with it's profitability over Netflix.

There is no doubt that Netflix is going to have to either a.) charge more, b.) get more users or c.) have ads. There will probably be some combination of the 3 going forward.


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## jpl (Jul 9, 2006)

tulanejosh said:


> I'm saying based on realities of the activites those companies engage in. All the companies i listed - they do 1 or 2 things.. PayTV and Internet. VZ and ATT do a ton of other stuff from landline phones, to cell phones, to internet, etc. They are huge huge companies that have very diverse business activities. If pay tv disappeared from their product offering - it would not fundamentally alter their core mission.
> 
> You can't say that about the companies i listed. Provided TV is what they do. They would be fundamentally different companies if they didn't provide PayTV so there response to a world where PayTV didn't exist or was delivered through alternative methods would be very different than a company that wouldn't have much philosophical issue just being the pipes. ATT and VZ ARE a pipe. They would have no issue with that on the tv side. Time Warner and Comcast would.
> 
> If any of the other companies that i listed - had to suddenly


See, but this is where you're conflating things. Many of the companies you listed are in the exact same business lines as Verizon and AT&T. The one area where they're not is in wireless. And even that's not entirely true (comcast offers a wireless data plan, from what I recall). Of those, only the two DBS companies are the truly TV-centric entities. And even that's going to change (DirecTV is working a deal with Verizon to allow rural customers to get internet via LTE through their dish).

Also, if you haven't noticed, Verizon and AT&T have been bleeding landline customers, and the cable companies are growing in that sector at an amazing clip (Comcast is now something like the third largest 'phone' company in the country). And last I checked the cable companies are big providers of internet service as well. In other words, Verizon and AT&T are both directly in line with the cable industry.

On top of that, both companies saw their roll-out of their next gen services (FiOS and U-Verse) as means for preserving their companies. Both HAD to do what they did just to survive. Otherwise, they would both be heading for extinction as they had no services with which to compete against traditional cable (dsl is fine, but can't really touch the speeds of cable HSI, e.g.). The success of FiOS and U-Verse are directly tied to the successes of both companies. In fact, to partly pay for the cost of rolling out both services, TV service is a big part of the equation - the ROI that they're going to get is much greater thanks to them being able to offer up TV service. Do just internet, e.g., with the fiber and both investments look spotty. I think TV service is absolutely instrumental to both FiOS and U-Verse being successful.

If either lost TV service it would be a big loss to both companies. And make no mistake, both are huge players in the TV market. They've both been expanding like crazy, and both clearly see their futures in TV service (especially Verizon, I think - remember it was their move with the FCC that pushed for the closing of the terrestrial loophole - that wasn't the move of companies like DirecTV or Dish). I guess I don't see how you could consider either company as not being a major player in the industry. And if they are major players, then what they do definitely counts - it affects the industry as a whole.


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## tulanejosh (May 23, 2008)

jpl said:


> See, but this is where you're conflating things. Many of the companies you listed are in the exact same business lines as Verizon and AT&T. The one area where they're not is in wireless. And even that's not entirely true (comcast offers a wireless data plan, from what I recall). Of those, only the two DBS companies are the truly TV-centric entities. And even that's going to change (DirecTV is working a deal with Verizon to allow rural customers to get internet via LTE through their dish).
> 
> Also, if you haven't noticed, Verizon and AT&T have been bleeding landline customers, and the cable companies are growing in that sector at an amazing clip (Comcast is now something like the third largest 'phone' company in the country). And last I checked the cable companies are big providers of internet service as well. In other words, Verizon and AT&T are both directly in line with the cable industry.
> 
> ...


And it's all a matter of perspective... you want to call them a big player? that's fine. it doesn't change my freakin point. They are phone companies - or communications companies if you prefer. What i said is that because of the way their businesses are organized and developed overtime VZ and ATT are far more comfortable being a pipe for IPTV than will Time Warner and Comcast and other traditional cable companies. They will react differently than other companies. Do you disagree with that? What is is exactly you think will happen then if ATT and VZ are the same as TWC and Comcast?

Make no mistake though - you're wrong in your analysis of the longevity of telcos. They may become more pipe-like, but as long as they have 100MM wireless customers a piece (or some such number), they're existence and importance is not in doubt.


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## jpl (Jul 9, 2006)

tulanejosh said:


> And it's all a matter of perspective... you want to call them a big player? that's fine. it doesn't change my freakin point. They are phone companies - or communications companies if you prefer. What i said is that because of the way their businesses are organized and developed overtime VZ and ATT are far more comfortable being a pipe for IPTV than will Time Warner and Comcast and other traditional cable companies. They will react differently than other companies. Do you disagree with that? What is is exactly you think will happen then if ATT and VZ are the same as TWC and Comcast?
> 
> Make no mistake though - you're wrong in your analysis of the longevity of telcos. They may become more pipe-like, but as long as they have 100MM wireless customers a piece (or some such number), they're existence and importance is not in doubt.


Yes, I disagree with that. Have you looked at TWC's latest financials? They just came out yesterday. Just like other cable companies, the trend for them has been, and continues to be:

a) Loss of video customers.
b) Increase in internet customers.
c) Increase in phone customers.

And right along with that... increased profitability. Despite their pretty heavy loss (continuing a pretty long-standing trend) of video customers, their profitability jumped. That's the trend I'm seeing in cable overall. These cable companies seem to be just fine with moving into the direction of being 'just pipes for data'. This is the same trend you're seeing with all of them. Less and less of their business, and far less and less of their profitability, hinges on video. Every quarter you're seeing cable companies become LESS married to video. There's simply no reason to think that they're in a different boat than Verizon and AT&T with regard to this.

Meanwhile Verizon and AT&T are seeing the exact opposite. They're losing traditional phone customers, and wireline internet customers (DSL). But they're having huge jumps in video subscribers (I think their DSL losses are offset by their fiber increases, though - meaning that you're not seeing a huge growth for them in internet adds because they have an existing internet business that's losing customers, so they're offsetting the gains they're making on the fiber front... but they have no such traditional video service, so every addition there is just that... an addition). Video is becoming INCREASINGLY important for them. More and more of their business is hinging on it.

The point is - the marketplace is changing FOR ALL THESES COMPANIES. They're all merging into becoming all in one service providers. The ONLY exceptions to that are the DBS companies who can't provide internet/voice service at a good scale. AT&T and Verizon are now operating in exactly the same market space as the Comcasts and CableVisions of the world (the ONLY exception to that is wireless). Video is as much a core business for Verizon and AT&T now as it is for companies like Comcast and CableVision. I guess I don't see how you can take a company that's now the 6th or 7th largest pay TV provider in the country, and say that they're not a major player in the video world... that video is not considered a 'core business' for them. It is!

And if they JUST wanted to be a pipe for other services, they could very well have set up their business models to be just that. They haven't done that. There's a reason they actively went into the video business.


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## sigma1914 (Sep 5, 2006)

jpl said:


> Yeah, it does sound like we're both arguing from the same side of the issue . Too much coffee on my end, I guess.
> 
> There are two flavors to what they're producing, actually. One is an in-home streaming ap which will let you use your BD player or gaming system as an STB. The router that they give you will do the authentication.
> 
> The second is far more far-reaching, and I was pretty surprised when they unveiled at this year's CES - it's truly a streaming ap. They were running FiOS TV via a Samsung BD player, e.g. Looking at the Samsung menu, you had a FiOS TV selection right next to the Netflix selection. They're literally talking about letting you run FiOS TV outside their network. Right now, apparently, they're getting their legal ducks in a row, but apparently they're pretty far along with that.


The 2nd one sounds very intriguing!


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## jpl (Jul 9, 2006)

sigma1914 said:


> The 2nd one sounds very intriguing!


Here's a quick recap of what they presented, by Zatz:

http://www.zatznotfunny.com/2011-01/the-best-of-ces-fios-tv-motorola-atrix/


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## tulanejosh (May 23, 2008)

jpl said:


> Yes, I disagree with that. Have you looked at TWC's latest financials? They just came out yesterday. Just like other cable companies, the trend for them has been, and continues to be:
> 
> a) Loss of video customers.
> b) Increase in internet customers.
> ...


I think you have confused the original intent of my post. I didn't intend to get into a debate about whether VZ or ATT were major players. You feel they are - i feel they are more regional... but that's fine. Agree to disgree.

The main point was that they will react differently - and i think that's true whether they are considered major or not. And we can already see in their activities that this is more or less true.

I go back to your qoute where you say that cables/telcos largely don't care if they are dumb pipes. I disagree. If they were, companies like Time Warner and Comcast wouldn't be preaching from the mountaintops about bandwidth caps and bitterly fighting net neutrality guidelines. if they were cool with becoming a pipe, they would open that sucker up to as much data as they could and scale back investment in video, especially if internet service is driving high levels of profitability. They haven't done that. What you have instead is TWC threatening to delay DOCSIS 3.0 deployments, and attempting to as recently as last year implement draconian bandwidth caps that are thinly veiled attempts to discourage you from consuming mass amount of video over their network - also known as protecting their core business. They also wouldn't be billing Netflix and its parnters (i.e. Level3) for increased network usage (comcast did this, look it up). And while Time Warner and Time Warner Cable are seperate companies now - they have a common philosophy/history, so when Jeff Bewkes rails on iptv and Neflix, you can feel pretty confident that TWC feels the same.

In contrast - VZ (when time warner and comcast were publicly toying with caps) said they have no plans to cap usage because their network doesn't require it. Simple as that.

There you have it - very different reactions from companies that play in the same space. You can choose to say its because VZ is more alturistic or more accepting of the future or whatever. That's fine. IMHO i feel its has a little more to do with the way their revenues are organized and the realities of their corp history.

And for what it's worth - i think you are cherry picking data sets to draw conclusions. Time Warner lost customers - yet directv didn't. dish didnt. they grew. Why did one gain but the other didnt? I don't know, but i do know that becuase of that, you can't draw the conclusion that Time Warner losing video customers and an increase its internet customer base is indicative of greater take rates for an IPTV future. That's what this thread is about.

Example - When i moved into my current house - i canceled Brighthouse cable, got Directv and signed up for Time Warner internet. Viewed through one lense - you could draw a conclusion that i'm not interested in TWC video products and only their internet. I must be cutting the cord. But when viewed in the larger context - you see that's not true.


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## Shades228 (Mar 18, 2008)

Here's an article about the prospects of Netflix.

http://www.fool.com/investing/general/2011/04/29/5-threats-that-could-kill-netflix.aspx


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## espaeth (Oct 14, 2003)

Shades228 said:


> Here's an article about the prospects of Netflix.
> 
> http://www.fool.com/investing/general/2011/04/29/5-threats-that-could-kill-netflix.aspx


It's interesting this article fails to identify the expiration of their streaming contracts as being one of the threats, especially when it is essentially *the* threat. Netflix got a sweetheart deal with companies like Starz to stream movies and is currently licensed at about 5% of what a network like HBO or Cinemax is charged to air the same movie -- those contracts all start coming to an end later this year.


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## jpl (Jul 9, 2006)

tulanejosh said:


> I think you have confused the original intent of my post. I didn't intend to get into a debate about whether VZ or ATT were major players. You feel they are - i feel they are more regional... but that's fine. Agree to disgree.
> 
> The main point was that they will react differently - and i think that's true whether they are considered major or not. And we can already see in their activities that this is more or less true.
> 
> ...


First, where did I say that cable/telcos didn't care if they were dumb pipes. I never said any such thing! I said that the industry is changing. There's very little separation between traditional cable and Verizon/AT&T anymore. Their business models are merging.

Next, you talk about Verizon not imposing caps - that's correct. But what in the world does that have to do with this? All it means is that their fiber isn't over-provisioned, which is different than how traditional cable operates. Besides, AT&T just did impose caps on U-Verse.

I don't think I misread what you wrote at all - there was a clear message that AT&T and Verizon aren't as beholden to video delivery as say Comcast so to them it's not as big of a deal if they lost video delivery. That's simply not true. Video is absolutely critical for them to justify the cost of rolling out FiOS and U-Verse.

Both traditional cable and the telcos are merging, in terms of their core business. Cable is getting more and more of its money from non-video sources. The telcos are getting more and more of their money from video delivery.

Finally, I'm not cherry-picking anything. Every major cable company has been losing video customers... quarter after quarter. But they've been gaining internet and voice customers which more than offsets the loss. And Dish, last I checked, has also been having trouble attracting customers. They had one or 2 quarters, in the last couple years, where they actually gained customers. DirecTV has been very successful at growing, that's true, and so has Verizon and AT&T.


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## sigma1914 (Sep 5, 2006)

More caps!

http://www.bizjournals.com/dallas/news/2011/05/03/att-places-caps-on-dsl-u-verse-usage.html


> AT&T announced this week that it has instituted usage caps for its U-Verse and DSL services, according to media reports.
> 
> The caps will limit DSL users to 150 GB of bandwidth and its U-Verse customers will be limited to 250 GB of bandwidth per month, according to the reports.


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## Tom Robertson (Nov 15, 2005)

sigma1914 said:


> More caps!
> 
> http://www.bizjournals.com/dallas/news/2011/05/03/att-places-caps-on-dsl-u-verse-usage.html


I noticed today that Comcast gives me a history of data usage for the past few months and the current month--against a 250GB max...

Cheers,
Tom


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## Satelliteracer (Dec 6, 2006)

"sigma1914" said:


> More caps!
> 
> http://www.bizjournals.com/dallas/news/2011/05/03/att-places-caps-on-dsl-u-verse-usage.html


This will become the absolute norm within 24 months for everyone if some of the experts ate right


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## deweydm (Sep 5, 2007)

We've had our account suspended since December. Called today to finally close it out, after over 10 years with directv. The only thing that's been a problem has been sports. Though with what's available via antenna, it hasn't been as bad as I expected. And I'm the only one in the household who cares about that, and it's a good excuse to hang out with friends at a bar on occasion, so....

Starting to think it would be better for those apparently few who are giving up cable and satellite if they remain the exception. Cheap offerings seem to be getting better, not worse. If netflix, hulu, whatever incite a backlash from the producers to the point they won't license content reasonably, maybe we'll have to go back. Doubt it. But who knows how things will play out long term. If we run out of things to watch without cable or satellite, I'll definitely post re our return to directv. ;-)


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