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Wednesday, January 21, 2009

The future of television isn't here quite yet...

Lately, the Internet has been rife with two sorts of stories: one, proclaiming that the future is here, and it is streaming, downloading, digital all the way. The other is that, correspondingly, all "old media" will be disappearing, if they haven't already, like dinosaurs withering under a comet's glare.

contrarian in me resists all such attempts to so neatly declare something so sweeping. After all, the last distributor of VHS just closed its doors, and people still cling to their vinyl, let alone ditching their CD collections.

But there is something to it. A new media marketplace is slowly gestating, one which offers a lot of exciting potential. But it's not here yet, and I don't think it will be truly functioning well for at least 5 years, with anything close to mass penetration 5 years after that.

One target that fans of digital content delivery like to pick on is
Blu-Ray. Why would anyone, they ask, want to purchase and keep a bunch of silly optical discs in their home, taking up shelf space, costing $15-$25, etc. etc.?

Well, let's look at the situation. I am a consumer with a taste for high quality audio and video. I do not have an extremely high budget, but I'm willing to pay for quality. So let's put it in these terms. I believe the average consumer wants several things from his or her media solution. These things are:

Price - the overall outlay in a month, or per view.
Selection - access to a wide variety of media, e.g. television shows, movies, and Internet videos.
Quality - the audio-visual fidelity of the media.
Reliability - Can you get it when you want it, without worrying about dropouts?
Convenience - Amount of labor involved, ability to tailor schedules.

So, to my mind, the best solution is the one which hits on all of these factors to the maximum extent. Also,
I want the content to be on my television, not on a laptop or PC. I paid big bucks for my TV and I want to watch my media on it. Therefore, for alternative media delivery choices, I want them to either stream to my TV from my PC or to be natively sent to my TV by a stand-alone device. Now let's assess the available content delivery systems that we as consumers have before us today.

Cable Television
Cable providers, not too keen on the idea of relinquishing their stranglehold on consumers' media wallets, have made strides towards increasing their offerings and improving in many of the major categories listed above.

Price: 1
Price has been and will continue to be cable's big downfall. Most basic packages start at $50, and many "fully featured" digital packages are $80 and up, per month. Aggressive nickel and diming of features, such as a very common $10 per month "HD Add-On" (as if they had to do something special besides tell your cable box to allow it), and $5 to $10 DVR "rental" fees (as if it just weren't another cable box, just like the non-DVR model) do not help. Basically, cable is a rip-off, big time.
Selection: 4 They have always ruled the roost in terms of Selection - carrying most or all broadcast stations, most or all cable stations, and many movie channels. Recent additions have included "video on demand," in which Cable company servers host videos and feature films from various channels and sources, which can be accessed at any time.
Quality: 3 Used to be very good, but an aging infrastructure has led to compression of signals. The service that your cable company touts as "all digital quality" actually may look worse than analog service from 10 years ago. It's simple math. If you've got a tube yay big, and you want to cram more information through it, the quality of each discrete piece of information will have to be compressed to allow it. HD on cable looks like crap, frankly, no better than 480p DVD, and usually not even that good.
Reliability: 5 Reliability is probably cable's biggest draw besides selection. If it's buried in the ground, chances are it's never going to cut out.
Convenience: 4 Used to be as bad as regular TV, but DVR-capable cable boxes have made convenience at least a middling proposition, now. On the plus side, you never have to leave your living room or couch. On the minus side, "On Demand" offerings are not yet comprehensive. If Cable companies really get their act together here, I think people will flock to it in droves, as long as they keep their prices under control.
Cable TV Total: 17 out of 25

Satellite TV
A subset of cable providers, satellite is essentially the same business model delivered by a dish on your house. All
of the factors listed above for cable are the same except for reliability. In a big storm or with a lot of snow on your dish, your signal might cut out. So minus 2 points on reliability, from 5 to 3.
Satellite TV Total: 15 out of 25

Netflix Streaming
Price 5: Netflix has loads of pricing options - but the bottom line is, you can get unlimited access to Netflix's streaming library for about $10 a month.
Selection 1: This is Netflix's great challenge right now. Only about ten percent (or less) of their DVD library is available to watch instantly. So there are lots of movies and TV shows, but it's very hit and miss. You'll find things to watch, but it's conceivable to run out of things in a few months' time, too.
Quality 2: Another thorn in Netflix's side is quality. To be fair, it is better than straight Internet TV sites. But it is not as good as cable, nor is it as good as optical media. Audio is strictly limited to stereo, and subtitles and special features are non-existent.
Reliability 3: It's essentially as reliable as your Internet connection. Which, for most people, isn't all that reliable, especially if wireless comes into play.
Convenience 5: Having unlimited access to a content library is great. Watch any TV episode or any movie at any time, all from your couch. This is what the future should look like.
Netflix Streaming Total: 16 out of 25

Netflix By Mail
Price 4: The same above applies here. You have lots of options for pricing, between 10 and 40 bucks a month, with all offering basically the same service, just at a higher or lower capacity (i.e. number of discs at a time). However, to get a comparable amount of programming to the streaming option, you will have to spend $20 instead of $10.
Selection 3: You have basically unlimited choice of anything that's been committed to optical disc. So the newest TV is out, but most networks are pushing their shows out pretty quickly onto DVD. Public television generally gets their documentaries out, but not their local interest programming. Movies are generally comprehensively available.
Quality 5: You can get DVD quality A/V, and HD quality A/V, with Blu-Ray disc rentals. The quality of a DVD is generally at or better than most cable television, and the quality of 1080p Blu-Ray HD simply blows cable, Internet, and broadcast HD out of the water. If quality is your number one concern, optical media cannot be beat.
Reliability 4: Broken discs have seemed to increase of late. Otherwise, if you get it unbroken, it ought to play, no matter what.
Convenience 2: You're at the mercy of the Queue, and how many other people want the same disc. If a disc is in demand, you might wait a month. You also have to leave the house to mail your returns. On the other hand, postage is paid for you, and you could conceivably copy the DVD content onto your hard drive or onto your own media, though I of course would have absolutely no knowledge of how to do such a dastardly thing.
Netflix By Mail Total: 18 out of 25

Itunes/Playstation Network/Xbox Live
Price 1
: The pricing schemes of these online providers are a joke. Prices generally range from $1 to $2 per episode of television. Time limited rentals of movies range from $3 to $5 depending on quality, and purchases of movies are usually $15 to $20. If you want to watch more than 10 hours of programming in a month, you'll have already surpassed Cable or Netflix in monthly costs. Simply unacceptable.
Selection 1: About as good as Netflix's streaming offerings. You will not find the newest TV or a complete back catalog of films.
Quality 4: DVD and HD quality video will generally be comparable, although some on the web claim slight degradation when compared to optical media. Audio may be limited to stereo, subtitles may be absent.
Reliability 3: The videos will generally play. If you're using a PC or Mac, your hardware reliability is the factor here. But what happens if the leasing/selling company stops operations? Will DRM keys expire and you will no longer have access to media you paid for? Worrisome.
Convenience 3: Having an online store and storing the content locally gives you basically unlimited scheduling power. But you are limited by your storage space, which for game consoles is usually not great, and for computers, there is the problem of sharing space with other computing necessities.
Online Stores Total: 12 out of 25

Internet Television
Price 5: How good is free? Sounds like a pretty good price to me. Yes, you pay for your Internet connection, but how many of us would not have had that already for other purposes? So yes, essentially, it's free. You are not paying extra for anything.
Selection 1: Ouch. Most companies limit their available catalogs to 4 or 5 recent episodes of a show. has made some strides in getting back catalogs of shows, but it is VERY spotty. No movies, either.
Quality 1: Ever watch a youtube video? That's the worst of what you'll see here. Blocky, pixellated mush. At best, you'll get a widescreen image that's a bit worse than DVD. Stereo only, and subtitles are not ubiquitous.
Reliability 2: some sites seem to crumble at random times, possibly due to server load. Netflix is way better, here.
Convenience 4: The same bonuses that Netflix Streaming has apply here. Watch whatever, whenever. You do, however, have to diddle with your computer to make sure it works.
Internet TV Total: 13 out of 25

Optical Media purchased a la carte
Price 1: Well, you can find movies on Amazon for $10 and TV shows on DVD can be found to average about $1 a show. But once you've bought it, you own it. But new stuff is premium-priced. So it's not much better than online stores on the price front.
Selection 3: The same as Netflix by mail. Older TV, all movies, many documentaries.
Quality 5: Again, like Netflix, optical media simply cannot be bested by any other format in terms of stable, reliable, high quality audio and visual fidelity. There is no compression based upon usage or program load.
Reliability 5: Have a DVD player? Has it ever broken because of the weather outside? Didn't think so. As long as you have working hardware, you also have a pristine disc from the package to play in it. No amount of DRM and no company going under will ever impact your ability to play the content you paid for.
Convenience 2: You have to order it from a store, go to a store, and then find a shelf to store your media upon. But you can watch it whenever you want.
Optical Media Total: 16 out of 25

Broadcast Television
Price 4: Free, with a but. You need a good antenna and a nice TV to pull in a decent HD signal from your local broadcast stations. These are extras, so the price rating goes down a tick.
Selection 1: Major networks, PBS, and a few local espanol stations. Nice if you want new TV and local interest programming, but pretty crap for anything else. Many sports broadcasts are also on pay TV now.
Quality 4: Generally better than cable and satellite, simply because there is less compression. There is still some compression, however, so optical still wins here. Digital over-the-air broadcasts are "all or nothing," so fuzz and interference are not a factor.
Reliability 4: Weather can play a role, unfortunately. Not as good as cable, better than satellite.
Convenience 2: Welcome to the old days. Watch the show when it's on, and at no other time. You can supply your own DVR, but the planning and programming you will have to engage in isn't exactly "convenient."
Broadcast TV Total: 15 out of 25

So, let's sum up. If you want quality, optical is the way to go. If you want price,
Netflix, Internet, or Broadcast TV are the winners. If you want convenience, Cable or Netflix are the best. If you want selection, Cable is king. But basically, none of these services hits on all five points across the board. If you care about more than one of any of these factors, you're going to have to pick and choose from each provider carefully. Most probably do Cable plus Broadcast, Cable plus Optical a la carte, or Cable plus Netflix.

So what does the perfect media solution look like? I would say it looks the most like
Netflix's streaming model, but with a much improved selection. If one company could combine the On-Demand capability of cable, the movie catalog of Netflix, the new TV and local interest shows of Cable and Broadcast, at the price of Netflix, you'd have a juggernaut.

Unfortunately, it seems the companies in the best position to do this are cable providers. They already have deals with local entities such as sports teams and local stations to provide their content. They are working to get a back catalog of movies to stream "On-Demand." They offer
DVR. but they do it at such an anal-raping price point that we still want to find an alternative.

To overcome that, one company, let's say
Netflix for the sake of argument, would have to negotiate with the networks to be able to stream their new shows, like, for a certain time window - let's say for 8 weeks after "premiere." The could negotiate pay-per-view agreements with sports teams (which they would LOOOOVE) to show their events. Hopefully this could be kept to 50 cents per game or so (which would total about $90 over 6 months for a baseball season, which is a lot less than 6 months of cable/satellite service). And they can expand their On-Demand movie catalog so that it is basically comprehensive. Can all this be done for $30 to $40 per month? If it could, I'd ditch cable and sign up in a heartbeat.

However, this is all future talk. If the question is: are any of these options going to die soon, I would say no. They all have a niche in the market, providing one thing better than all of the others. Until one provider starts really slamming its competitors out of those niches, I don't see any of them, whether it be optical media, broadcast TV, or anyone else, going away.


Blogger Foofy Attorney said...

I agree with pretty much everything you said in terms of assessment of the individual media. I will say I don't think the next media juggernaut necessarily has to be the one that somehow provides all those services at once. I think the niches are good.

For example, picture quality for me is not nearly as important as it is to you. By and large, there is a picture quality I deem adequate for anything other than certain pieces of science fiction and gay porn. Therefore I am not willing to pay a premium for enhanced picture quality that I don't really care that much about.

Really, I just don't want to see the mad rush to corner every media outlet end up forcing me to but access to media I don't want in order to get access to the media I do. Also, most people who try to everything end up doing it badly. I would like to see Netflix get better at expanding its on demand catalog and quality before trying to also provide broadcast tv access.

10:00 PM

Blogger matthewweflen said...

I agree that it is good and natural that given companies have given niches in which they perform best. I am saying, however, that I would prefer that one company do better in more niches at a competitive price. I think it sucks ass that I have to pay for a bunch of content I don't want (e.g. 90% of cable channels) to get access to a bit of content that I do (e.g. 3 or 4 cable channels, White Sox baseball.). Digital delivery has the potential to create a much more a la carte experience, but only if they can give access to enough of the content I want to obviate the other providers. Otherwise, I'll have to pay 3 or 4 providers twice as much as I should to get a small percentage of their content.

For instance, I'm almost done watching "Twilight Zone Season 1" from Netflix streamed to my PS3. :( Why can't they have every episode?

I think Hulu rocks as a concept, commercial-financed TV on demand. But they need to get selection, quality, and reliability up to par for it to really take off.

11:20 AM


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