Sports - that's the ticket. Comcast remains relevant for two reasons in my mind - they provide high-speed Internet in a quasi-monopolistic fashion, and local sports broadcasting. (I live in Philly, the stranglehold on sports here is palpable.)
That said, even sports apps are starting to show up on Apple TV and the like - it's just that right now, sports are attached to cable deals, much like HBO Go is attached to cable networks.
I feel like the "a la carte" unbundling discussion is almost moot. It was an important idea before, paying for just the channels you want. But now each channel can have it's own streaming app, and I can pay for and stream them whenever.
So now I guess it's just a matter of time before someone offers bundled groups of on-demand app access. Netflix + NFL Network + ABC/CBS + HBO Go... And toss in Comedy Central for good measure. Add in a $99 Apple TV, and who needs Comcast and Time Warner?
Oh right. They own the Internet access. I'd really like some net neutrality soon, please.
We're already seeing the beginnings of one possible solution to the "sports on TV" problem: e-sports and video game streaming. Right now there are several hundred thousand viewers on Twitch.tv, unless their viewer numbers are extremely inflated. Video game streams overwhelmingly tend to be free (with subscriptions to remove ads, unlock the highest video quality, or access previous video on demand). Many tournaments have top notch video productions, and are probably produced on a shoestring budget compared to national sports television productions.
There's no technical reason why non-electronic sports couldn't also be streamed like this.
The big national sports would incur a drop in revenue if they switched to that now. But that will change, and is probably already changing fast. If at some point sports became the only thing on traditional TV that most care about, I suspect they would be less likely to spend anywhere near as much money for the hundreds of bundled channels they value at zero.
Why? How much revenue do the teams and leagues get from TV per-viewer now? Why couldn't they get more by cutting out the middlemen (cable companies and TV networks) and just get subscription fees directly from viewers, and ad revenue directly from advertisers?
In aggregate, billions. It would be impossible to calculate per-viewer. [0] The thing is, at present they are paid by every cable subscriber, not just the ones who actually watch the channel. So by switching to the model you suggest, there are two options, charge the user directly what they were currently charging the cable company and lose hundreds of millions in revenue because only a portion of your current viewers will pay you or more likely they will raise the price significantly.
The other thing is it would mean they would have to build a billing and customer service infrastructure. At present they only really have a handful of customers [1] - the cable companies - so it's really easy for them to deal with that side of things. When you have 300 million subscribers, one of the biggest problems will be billing and customer service, so prices would further increase because of that.
I would love to see sport leagues do this. But things need to change somewhat before there will be any major incentive for it to happen.
[0]: Every league, team, sport is different, probably with different contracts with every cable company. The average wouldn't be useful at all because you would have more extreme data points than you would average data points.
[1]: Sure, some networks have online streaming options, but the kind of customer who has no problem paying the extra few hundred dollars a year for access are not the ones that will require the major customer support.
> Why? How much revenue do the teams and leagues get from TV per-viewer now?
An ungodly amount. TV deals are everything to (at least American) pro sports. Smart athletes structure their deals to end the same time as the TV deals knowing that it will increase their potential salaries when the new deals are signed.
> and just get subscription fees directly from viewers and ad revenue directly from advertisers?
Because running a TV (or non-TV) network that has the reach and success of the big 4 networks is very fucking hard. You don't cut out the middle-man until you can replace what they give you.
The NFL's US TV deals, when put together, are for 7 billion a year. The ads themselves are not all managed at the highest level: There are national ads, regional ads, local ads... A big part of what a TV network does is manage the ads themselves.
While a large majority of the fans have broadband, they don't necessarily have something connected to the TV that will output the NFL streaming apps to their living room. There's also no proof that advertisers would pay the same rates for ads than they do for over the air TV.
Handing out the rights to TV stations also has all kinds of other advantages. You don't have to pay the TV stations to advertise the games. There is all kinds of content in said stations that could also be considered advertising: A team will be covered more in the channel that also carries the games than in one that does not. If you have an NFL app as the way to show the games, now you are the one paying the TV stations so that they cover your stuff. The NFL might get a bigger share of the pie, but other people are a whole lot less interested in helping the NFL grow its fan base. And yeah, the moment you start offering all games online bypassing live broadcasts, without at least a modicum of an attempt of blacking out regular TV broadcasts, the networks will balk at you, so if a pro sports league wants to move to online, they have to either only show content that the local TV stations do not want, or go all in, because the TV networks are not going to be happy competing with the league directly with the same content.
Good luck keeping an attempted switch secret too: To move broadcasts inhouse, a league would either have to purchase new equipment and crews, from the engineers at the stadium to the commentators, or to downright poach them, neither of which is easy to do.
So even if it's theoretically possible they'd make more money online, the risks and the political costs of doing such things are tough. We've seen how a player strike harms a sport's financials. A failed move online would be just as big, if not worse, and completely self inflicted.
What bothers me is that we'll likely never see an API for all this content. TV software is spectacularly awful. Netflix is merely mediocre, which makes it feel like pure awesome compared to the piss-poor UIs that TV users are familiar with.
of course, content wins so the interface is bottom priority. But without an API, there is no way for a 3rd party to provide a better layer over the content.
If I were a channel, this would be something I would really want to look into -- imagine different software services or internet services directly licensing/subscribing your content instead of you feeding Comcast.
An open API so that pretty much anyone could subscribe to X channels and mash them together in an app or program to do whatever they wanted. Truly a la carte, like downloading books and being able to pick your eReader or library software.
For better or worse, the "someone" who will offer the bundle will likely be Comcast and Time Warner Cable. Their entire business model is based on bundling content to provide it at lower cost than an a la carte.
It's unlikely things will change for them just because they move away from a cable box to apps. In essence that is what they are already doing. Even today you need a cable subscription to access at least a third of the content on Apple TV.
The problem with that argument is young people spend so much time online. So, it often ends up as a 90$ / month bill for 4-5 hours a week of entertainment. What's really missing IMO is leveraging the huge backlog of entertainment where Netflix only scratches the surface. Cable was great when there where few options for cheap mindless entertainment, but what people want in entertainment not just the NFL or the latest gossip.
So, I suspect long term we are going to see a push for more 'timeless' entertainment. You might only get 100k viewers this year, but if your still pulling 50+k viewers in 20 years that's a lot of revenue over time. Make a great cooking show and it's still worth watching even if it's 20 years old, a travel log of eating establishments ages poorly.
I work for one of the big cable companies, and the internal culture seems to be "innovate, but slowly and carefully". Everybody is fully aware of the threat Netflix et al pose to the incumbents, but progress is slow. So many of our resources are spent just trying to minimise costs and maximise revenues, without really changing the game.
Comcast, for all their flaws, do seem to really care about innovation. I watched a video about the development of Xfinity X2, and their R&D department looks like it has insane resources.
It's a very interesting space to be in, on all sides.
To what end though? Their new X2 cable boxes are slower than ten year old ones, and are just catching up with the interfaces of Tivo and Roku from five years ago.
Who really wants "innovation" from their cable provider? Certainly not the unsatisfied customers that are leaving in droves.
What incentive does a cable provider have to progress and become a dumb pipe? The only value Comcast brings is owning the license to rent a wire that brings Internet signals to your house. After that, the content creators/curators can take care of the rest. Of course, being a dump pipe means less profitability, but it should have already been treated like a utility in the first place, like in Chattanooga, Tennessee.
It's a huge, profitable, conflict of interest to have your content provider also be the internet signal provider to your home, and I don't see them wanting to innovate that away. If anything, their R&D is probably in figuring out how to box out movie studios and other content providers like Netflix/Amazon Prime to make their own offerings more attractive.
> it should have already been treated like a utility in the first place
I worked for Comcast circa 2003, and it was the company's official policy that its broadband services were for "entertainment only", to skirt around regulatory issues and downtime liability. While it was a dubious claim even then, it's farcical to call broadband internet anything but a utility in 2014.
"Of course, being a dumb pipe means less profitability"
If you have a strong, legally enforced monopoly, I'm not seeing this.
Is walmart really less profitable than mom -n- pop main street? If they aren't, why did mom -n- pop main street all go out of business when walmart moved in? The future seems to be big dumb profitable pipes and much less profitable content sources.
I think the cable companies right now enjoy a public perception that they are not just providing a dumb pipe, but they are adding value with the DVRs and HD, so they don't seem like the gas or electric or water provider. If they come to be viewed as infrastructure, then there might be a push to make them into utilities and regulate their prices, since they have a monopoly.
Additionally, offering different tiers and mixes of products allows business to create more opportunities for profit margin, but simplifying their business to just X amount of download bandwidth and Y amount of upload bandwidth for a flat price will remove their ability to obfuscate the value of what people buy. And they will have to work harder to justify increasing prices, whereas now, they can just blame it on the media companies, etc.
Go to an upscale A/V audiophile class store and talk to a salesperson for awhile. They'll be a lot of green ink on CDs and thousand dollar speaker cable talk, but they'll also know at least some analog EE stuff, maybe not much, but more than their average customers. The sales guy almost certainly understands the features and UI and can teach you if you ask or put on a rather impressive demonstration and describe at length how to connect components together (with the hope of addon sales obviously). That is not a dumb pipe.
Then go to walmart and ask any drone about that surround sound amp on the shelf. Good luck getting more than "I donno man, all I do is match up the UPC on the box with the UPC on the price tag" Now that, is a dumb pipe.
We can do this all day with house paint, furniture, board games, firearms, camp gear, movies, video games, clothes, I think the only things where they're keeping up with the competition is the pharmacy, which is solely due to legal licensing stuff, and food, where the standard supermarket drone (I was one in high school) knows absolutely nothing about food or cooking.
Another fun analogy in the famous HN car analogy theme, is a non-dumb pipe car dealership would have salespeople who can answer any FAQ or weird question about a car. Oh thats how you pair your bluetooth phone to the radio. The spark plugs need changing every 50K miles. It runs just fine on 87 octane gas although the more expensive stuff will burn just as well. A dumb pipe of a car dealership would be you walk up to a car on the lot, flag down an employee, ask them if the car has four wheels, and they're all "I donno man, I just park them in the correct spot as fast as I can and thats all I know about them."
For things like detergent, motor oil, and some categories of food, Wal-mart offers zero differentiation and lower prices. i really can't think of one thing where I think "Oh, I have to go to Wal-mart for that." The only reason is efficiency, and hence price.
I don't understand your assertion. Bodega vs. Stop & Shop vs. Wal-Mart to buy Tide detergent. Wal-Mart adds nothing to the product, but delivers it more efficiently. That is the definition of a "dumb pipe." Can you explain how that's not a dumb pipe?
Using massive scale and buying power to influence the price of a produce is adding something to the product. Can your electric company do that? No, they only delivery the product at it's market value.
Also, a pipe doesn't care what travels through it; does Wal-Mart sell every retail product in existence?
"Also, a pipe doesn't care what travels through it; does Wal-Mart sell every retail product in existence?"
None of the employees you'll ever interact with, with the possible exception of the pharmacist and optician, will know anything at all about the boxes they put on the shelves. Thats a dumb pipe.
None of the consumers know or care about how smart the HVAC thermostat is, or how JIT the truck drivers drop off the next pallet of kitty litter 3 hours before the store runs out of stock.
Its not an applied technology question. Pipe manufacturing can be fairly technologically advanced, perhaps for aerospace work or car brake systems. Xray inspection of welds and fittings, seamless exotic metal alloys. Highly trained and experienced installers and quality assurance teams. Advanced 3-d cad to bend and place the pipe just so. None the less, its still fundamentally just a dumb pipe, stuff pours in one end of the pipe, then it comes out the other end of the pipe.
Lobbying? There are probably a lot of entrenched interests that don't want the ISP/TV provider monopoly to go away. I guess for TV, there are actually 3 to 4 options available for most people (Dish Network/DirectTV/Cable/Fiber). But for broadband, there is usually only 1 option, or 2 if you're lucky, and they also happen to be selling you content.
Nice to hear from a dissent perspective on this matter. Though it certainly begs the question; in what way is Comcast being innovative? Xfinity X2 seems to be imitating more than anything. I would not be so critical if it weren't for their obvious disinterest of innovation.
I doubt that Netflix really wants to be doing DRM. But the simple fact is that the rights-holders demand it. If Netflix didn't do DRM, then it wouldn't have any good content on it.
As soon as rights-holders can be convinced that DRM is unnecessary, then we'll see the internet streamers like Netflix drop it. I'd bet that by the time we see A-List movies on GOG, we'll be seeing them on Netflix too.
What does Netflix gain at this point for instrumenting DRM free streaming for a small subset of their content rather than just piggybacking off their current infrastructure? Why add even more to the cost of in-house content for DRM?
> Without someone pushing for it, it will never happen.
That someone is consumers, not Netflix. And given that the overwhelming majority of consumers don't care about DRM, Netflix has little incentive to care about it also - they have enough to worry about with their content well drying up, and I doubt they are keen on exacerbating that problem by telling their partners to license their content DRM free. Short of either the government stepping in and mandating the end of DRM, I don't think will ever see DRM go away (not to say it won't be hopelessly broken).
All that still doesn't change the fact if Netflix could, they would most likely drop DRM, if not for all the technical reasons - it would allow them to distribute on Linux and most likely simplify parts of the content delivery chain. For Netflix they have no reason to be against DRM free content, but a ton of reasons to not be actively against DRM.
> What does Netflix gain at this point for instrumenting DRM free streaming for a small subset of their content rather than just piggybacking off their current infrastructure?
They gain more trust by showing that it's not their intention to use DRM. Since they don't, they are viewed as liars when they claim that they don't want to use it. And they very well can be liars. Let them prove their intentions with actions rather than with empty words.
> That someone is consumers, not Netflix.
No, that's false logic. Users of course should push for it too. But you can't compare the scale. Individuals voting with their wallets are less visible to publishers than distributors voting with theirs. GOG already demonstrated it. And that actually feeds the cycle. Once some distributor breaks the wall of stupidity by making some DRM-free deals with publishers, then more users start supporting them from those who care about buying it DRM-free.
The bottom line, Neflix are not interesting in fighting that fight. They oblige insane publishers willingly and their claims that they "have no choice" don't sound sincere.
> Netflix has little incentive to care about it also
That's exactly the point. So they can't claim that they don't like it. In the best case they don't care, and in the worst they prefer using it even for their own content and push for that garbage into HTML standard. Incentive for caring about it should not come from estimating how many users care about it.
> ll that still doesn't change the fact if Netflix could, they would most likely drop DRM, if not for all the technical reasons
That's what they say, but no one is inclined to believe them when they don't do it for their own content as above. There is no technical reason for them to use DRM where publishers don't demand it. And when they are the publishers themselves it means they demand it themselves too.
This argument is increasingly less compelling as Netflix's focus moves away from streaming other people's content towards streaming its own original content.
Why should the future of internet streaming be DRM free? If I purchase an ebook, I'm going to insist on DRM-free because it's my book and I want to be able to do whatever I like with it. But for streaming video I'm merely renting.
> Why should the future of internet streaming be DRM free?
Because there is no good reason to use DRM. Ever.
> But for streaming video I'm merely renting.
You mix up the concept of streaming with renting. A common mistake that for some reason a lot of people make.
Streaming is simply a convenience. An ability to watch something from the cloud without downloading it first. Who said it has to be equal to renting? You can perfectly buy something and have it stored in the cloud to stream it while being able to save it for local backup at the same time. That's exactly what GOG offer for their DRM-free video.
Now with streaming misunderstanding out of the way let's take a look at renting. First of all using DRM for renting is pointless. If it's intended to prevent potential abuse of renting terms, then it's worthless same way it's worthless to prevent any piracy in general since those who want can access all the same content through piracy sources at any time. So any kind of enforcement of renting with DRM is futile and only reduces usability of the product for nothing.
Now let's also review the concept of renting itself. It doesn't really make any sense for digital goods in general. For physical merchandise renting allows reusability, which allows in term using lower price for renting in comparison with selling since there is no repeated cost of production. For digital goods this problem is non existent because cost of reproduction is practically non existent (digital copying). So there is no good reason to make the price of selling any higher than the price of renting. Or in other words, the whole concept of renting is nonsensical for digital goods. It wouldn't hurt to always allow the user to back up their data if they want to (i.e. complete purchase, not a rent).
Now with renting out of the way let's take a look at Netflix. Essentially their novelty is not in the renting aspect, but in an interesting way of organizing the service. Instead of selling film per price, they give access to anything for a monthly fee. This can perfectly be done without falling into renting approach (which can push one to entertain the thought of DRM which is nonsensical anyway as above). Some say, that if you remove DRM from Netflix what would stop users from downloading the whole catalog within the monthly period? The answer to that is that DRM is still not needed, Netflix should just make terms of usage more realistic and use other, non DRM methods to prevent such abuse. I.e. instead of saying "watch what you want in any amount by paying N money a month" they can say "watch / download up to M films by paying N money a month. If you want more - pay extra". That would keep basically similar approach but would prevent potential "download it all" abuse, while at the same time remain DRM-free. And there is no need to turn it into renting. I.e. those M films can be made perfectly downloadable and backupable. Since the main expense for Netflix is the streaming (it eats bandwidth / server activity resources), letting users back video up is perfectly fine - it will only reduce costs by reducing load if users will decide to watch their local backups next time.
The bottom line, Netflix can offer a DRM-free streaming service which allows downloads at the same time and uses their approach of "watch what you want for a monthly fee" except with an addition of "not more than M videos per month. If you want more - pay an additional fee".
No. Netflix is a rental service. If you are paying a recurring fee, and you only have access to the product as long as you pay the fee you are renting.
Netflix main expense is not bandwidth it is content.
But yes, if netflix started selling tv shows and movies like you suggest, drm free would be something consumers should demand.
It is now. My point is that there is no reason for it to be a rental service. I explained above why.
> If you are paying a recurring fee, and you only have access to the product as long as you pay the fee you are renting.
Did you read what I wrote above? Even if you pay a recurring monthly fee, there is no reason to make it a rent rather than a purchase of up to any M titles of your choice per month for that very monthly fee. Rental is nonsense for digital goods.
I miss Aereo and the ability to watch live local broadcast channels on my Mac Mini.
Copyright recently has killed a few venues online where I was paying to watch their content. I'd still pay them directly for an Aereo service if they provided it. I will never pay for Cable TV again .. bloated, over priced junk in which you have to deal with horrible customer service! No thanks!
I do see Dish is coming out with an over the top cable like service. It's sure to hobbled at first, but maybe in the long term it will provide a solid experience.
I would not be surprised if eventually Netflix is forced to charge different rates to customers based on their ISP and the amount of shakedown they are forced to pay for interconnect agreements. It is easy to imagine a base rate of $8 for Netflix and a $4 Comcast network fee.
After all if Netflix must raise rates to cover these new costs it seems it would be in their best interests to educate their customers in hopes of driving lobbying efforts to force common carrier legislation on ISPs.
Surprised "social tv" hasn't taken off more, though I guess people commenting using twitter during broadcasts kind of killed that idea I liked the pirated streams that had open chatrooms with just enough moderation to kill spam and wild political ranting where you could joke about what you're watching, kind of how taima.tv and JustinTV used to operate.
I wonder how long physical media and things like redbox will live on for.. it seems tempting to say it will die out soon, but at least in the US, we do not have ubiquitous high-quality bandwidth.
This hasn't been the case for a long time, although for some reason it remains a common misperception. I think it's mainly a marketing problem because people are always reading comments like this online, or hearing about such-and-such series that "is on Netflix" but disappointingly isn't currently available in the UK, while simultaneously being unaware of all the content that is available in the UK but not in the US.
For example, Netflix UK has the first 2 Hobbit movies, Pixar's Up, the original Danish versions of The Killing and The Bridge, all of Stargate SG-1/Atlantis, 24 and The Shield - none of which are currently available in the US. There's a load more I can't remember off the top of my head. The UK also got Breaking Bad a few hours after it was aired in the US, whereas US customers had to wait several months, presumably due to an exclusivity deal with AMC.
Obviously the UK also gets all the Netflix original content. Occasionally a new season will launch a few months ahead in the US, but that's not really a big deal. I can only assume this is done for same marketing reasons that blockbuster movie launches are typically staggered worldwide.
There are a small number of US shows like 30 Rock and Better Off Ted that I wish were on the UK service, and Star Trek DS9 is conspicuously absent, but that list is much smaller than it was 2 years ago.
This is sadly also true for the Nordic countries. There's a bunch of contenders in the streaming business and huge pushes for cable-TV from the major broadband providers. The sad part is that most services are utter crap and suffer from huge technical problems, consumer unfriendly subscription models, horribly implemented localisation and a serious lack of content. Netflix is reasonably good and their own series are more or less worth the 8€ subscription fee. Finnish Netflix compared to the US version costs 25% more for <25% of the content of the US version.
It isn't too difficult to access the US version of Netflix, but doing so reliably requires a VPN connection which I am not willing to pay for. And it's technically equally illegal as the piratebay and more of a hassle to get it to work with my chromecast/plex/xmbc.
This is sadly a really old problem. Noone is currently selling film/TV-series content to a reasonable price that could even look at competing with the piratebay/piratism. Heck, todays services can't compete with piratism from ten years ago.
Likely due to the fact that as of yet, no one has found a particularly good way of monetizing torrents without alienating downloaders. Monetization is a necessity for industry adoption, so it's hard to tie the future of television to something like torrenting, unless there's a way for content creators & licensors to get paid.
Broadcast television has been given away for free since it's inception, and monetized with advertisements. I don't see why officially-sanctioned torrents couldn't do the same. Make them high quality, and backed by fast seedboxes, and you'll outcompete the crappy scene releases that trickle down to public trackers.
"Make them high quality, and backed by fast seedboxes,"
Another option: directors cut type content. So you get 2 minutes extra content of dubious quality, but there's a 10 second diet coke ad at the start. Well, you could try to find a torrent of the extra content without the ad, but its got slower seeds, so you're better off with the diet coke ad...
This may work for rarer content, but certainly wouldn't work for hot torrents. A fast webseeds CDN or whole datacenter of seedboxes is still on par with a large community-only swarm - that is, except for minor issues (possibly slower start) they both can well saturate one's downstream channel.
That is, unless one wants the download to start at full-speed right at the release second and not an hour or two later when swarm gets enough seeds. But I'm not sure most users care whenever their favorite series get an update at, say, 18:00 or 20:00.
Blocktech are trying to do something like this with MovieCoin[1]. They contacted PopcornTime about it but I'm not sure how far their technology is at the moment
That said, even sports apps are starting to show up on Apple TV and the like - it's just that right now, sports are attached to cable deals, much like HBO Go is attached to cable networks.
I feel like the "a la carte" unbundling discussion is almost moot. It was an important idea before, paying for just the channels you want. But now each channel can have it's own streaming app, and I can pay for and stream them whenever.
So now I guess it's just a matter of time before someone offers bundled groups of on-demand app access. Netflix + NFL Network + ABC/CBS + HBO Go... And toss in Comedy Central for good measure. Add in a $99 Apple TV, and who needs Comcast and Time Warner?
Oh right. They own the Internet access. I'd really like some net neutrality soon, please.