The battle between IPTV and cable providers is about to begin as this Wired article intones. —
The stage is set for a showdown between television networks and cable/satellite TV services, thanks to the internet. It won’t happen overnight, but your monthly cable or satellite bill could eventually be replaced by a monthly bill from Hulu, an online service that streams TV shows on demand.
For $10 a month, viewers will reportedly have access to a wider selection of shows than the free, ad-supported version Hulu currently offers. The service would work on PCs and specialized devices such as the iPad, videogame consoles and set-top boxes. The company plans to test a version of this “Hulu Plus” subscription, an expected development, with select users as early as this month to find out whether they’ll will bite, according to sources cited by the Wall Street Journal and All Things Digital.
In order for consumers to pay for a video service like that, it will need to be reasonably comprehensive. So it’s no accident that the same week Hulu’s subscription plans came to light, a Bloomberg report surfaced that the company is talking with CBS, Viacom and Time Warner’s television studio divisions to add their shows. That would be on top of a line-up that already includes “Fox, NBC Universal, ABC, ABC Family, Biography, Lionsgate, Endemol, MGM, MTV Networks, National Geographic, Digital Rights Group, Paramount, PBS, Sony Pictures Television, Warner Bros. and more,” including Wired.com.
There is one piece that I believe will not bode well —
Cable and satellite are classic middlemen. When the internet meets the middleman, the middleman tends to disappear — or at least be replaced by a thinner middleman. We’ve seen it with record stores, classified ad-dependent newspapers, video-rental stores, bookstores and any other business that delivers something that the internet can deliver more efficiently.
If you look at the Supply Chain Collapse that have gone before, in industries like retail, trucking, warehousing, etc, there is no such thing as a thinner middleman. There were only dead middlemen. There is a twist to this scenario however. For IPTV to work one has to have a fat pipe. That means Cable, FIOS, or WISP as a provider. So the carriers may not be dead but they certainly will be wounded. So how does this all play out –
The content choices are going to explode here very quickly. The beauty is you may only pay for what you want. Out of a million choices you may only subscribe to 40 channels for $15-30/mo or less. I can’t wait.
It also makes Verizon’s choice to go with a Cable-like pricing model the wrong move. They should have derived the FIOS pricing on the cost to deliver the pipe as a data only service. Just like they have done for the last 150 years. Like the knight in ‘Indiana Jones’ related — “He chose poorly.” Indeed they did.
With cable and satellite subs flat and the telcos struggling to grow a pay TV business, online video is thriving – even the pay subscription kind. The cable guys and telcos can blame the recession, but there’s still business to be had if you give people what they want: a movie anywhere there is an internet connection for $9 a month. The combination of online viewing with a DVD in the mail, Netflix managed to grow its customer base by more than 1 million in the last quarter. If the movie studios would allow, the DVD could be done away with all together.
The results reflect the growing popularity of Netflix plans that bundle DVD rentals with unlimited video streaming over the Internet for as little as $9 per month. Netflix’s success contrasts sharply with more traditional home video options such as Blockbuster Inc. and Movie Gallery, which are closing hundreds of their stores and struggling to attract traffic to the locations still open.
Netflix added more than 1.1 million customers during the quarter — the most in any three-month period in its history. It took Netflix four years to attract its first 1 million subscribers after launching its rental service in 1999. (Yahoo)
Hulu has engaged a partnership with ABC to ‘air’ their primetime shows on their system. Not a few, all of them –
Today marks the official start of a new relationship: the launch of ABC content on Hulu. Things kick off with five episodes of Grey’s Anatomy, the primetime drama set at Seattle Grace Hospital, where surgical interns try to navigate the challenges of romance and friendship as they scrub in for complicated medical cases. The videos posted on Hulu will mirror the episodes most recently aired on TV, which includes the two-part Season 5 opener, two episodes from the middle of the season, and another pair that lead up to the heart-wrenching finale.We have more ABC titles on the way, too.
Check our Hulu Days of Summer calendar to see what’s new each day this week; we’ll also post clues to the next day’s content each weekday on our Twitter and Facebook pages. (You can also check the Twitter feed on the main Hulu Blog page for clues if you’re not on Twitter or Facebook.
Here’s the iteresting tidbit. Advertising onair the going rate is $20/thousand on average. On Hulu its $60 per. Why the disparity? Less competition for eyeballs means that the advertising that is viewed isn’t sandwiched between the shamwow guy and a Billy Mays tribute. Even at the higher pay rate the advertising is more effective.
But Hulu is not alone. Less fanfare of course but YouTube now has their shows category up and running as well. Fact when my granddaughter was here she and I watched old mickey mouse cartoons together on YouTube.
The current IPTV champ has already inked deals for international content from Indian and Britain. The interesting bit is they may return the favor and take their show/services on the ‘Road to Morocco’. –
Of course, the idea is to change this. Speaking with The Financial Times, Andy Forssell – Hulu senior vice president of content acquisition and distribution – said that the company is in the midst of discussions to launch the site in “six to eight” of the leading broadcast markets.
We’re not sure why he’s confused about numbers seven and eight. But there you have it. And the company’s new British and Indian deals are at least a small step towards the site’s internationalization.
Hulu also argues that these deals deliver content that most Americans haven’t seen. But knowing Americans – a race of people who are interested in themselves – they aren’t likely to see it now either. Ex-pats? Sure. Forssell also told The FT that the company has been in talks with The Beeb and ITV about pacts involving their shows as well.
If I were them I would do it. There are some international markets far less regulated and mind controlled by the ISP’s than here in the US.
The Brits through the BBC and others are attempting to develop an Open Source device like the Roku for IPTV content. I think it is a novel idea in my mind. So long as the source choices are user configerable I say go for it. Others are of a different mind however –
Project Canvas, the joint venture of the BBC, ITV and British Telecom, must be up to something good considering that some makers of consumer electronics (CE) gear are squealing “foul”.
The UK’s Intellect Technology Association, whose members include Sony, Panasonic, Samsung, Toshiba and Pace, said in a submission to the BBC Trust that Project Canvas risks isolating the UK as a “technological island” in a global market by trying to create a standard IPTV set-top box for just the UK. That, of course, is exactly the opposite of what the Project Canvas members have set out to do.
Project Canvas was formed to create an industry-standard technology that’s open and free to license that can be added to any set-top box. It will allow video on demand to be delivered over the Internet for viewing on a TV set by services such as the BBC’s iPlayer and others. It can also be added and used on any Internet-connected device such as a portable media player like the iPhone or iPod touch. Watching TV shows and movies on demand, anytime, anywhere, will have an enormous worldwide appeal.
Why the opposition? Well the likes of Sony and Toshiba who own a good chunk of that market don’t want the competition by every mom and pop shop that can burn a cd for one. The other is more complex. A project like this would jump the pond with relative ease. Here in the US the CE makers have a pretty clear deal with the ISP with lockin sales to maintain the ISP’s walled garden services. Project Canvas would blow that asunder. They just don’t know it yet.
New survey results aren’t only bad news for cable and DBS satellite companies, there’s also bad news for the telcos.
In fact, according to consumer research firm GfK Roper Consulting, about 40% of those surveyed during mid-2008 and early 2009 said they’d be willing to do without cable or satellite TV. Instead, they’d just as soon watch programming on free sites like Google’s (GOOG) YouTube or buy videos à la carte from Netflix (NFLX). Of those surveyed, only 37% said they were getting good value for the price they pay for cable or satellite subscriptions. (Business Week)
While the cable and satellite companies have a lot to do like offering IP based subscriptions and a la carte channels, the telcos have totally blown it. Instead of building the big dumb pipe, they have promised so many times, Verizon and AT&T have invested heavily in package based pay TV in a closed system. Had they built the big dumb pipe and invested in IP based content distribution, their content business would be booming. Instead they’ve saddled themselves with obsolete technology working in a regulated environment just like the cable guy. Their shareholders must be outraged.
In the Third Pipe world, content is king, but only if it moves freely in a big dumb pipe. When it was possible to distribute a la carte content to customers located anywhere, the duopoly has continue to invest in geographically limited walled gardens. Competitors have already figured out the new model is the open one and they will continue cannibalizing the closed content business until the doupoly chages its ways.
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