HDTV Almanac - Willing to Pay for Internet TV

[alfredpoor]

As I wrote at the end of last month, the new Hulu Plus service for $9.95 a month stands to disrupt television viewing habits. It provides more content that does not expire, and it’s all offered in 720p high definition.
As it turns out, more and more people view this sort of offering as appealing. Some [...]

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[Roger Halstead]

At present, at least for me, the Internet just isn't reliable enough for me to pay to watch streaming TV. If I can download the program and watch it later would be different and there are quite a few where that can be done. They also need at least 1080i, if not 1080p.

However, I have to wonder about band width availability as the video providers and networks move to more content being available via the Internet, particularly with some major ISPs throttling throughput. With out Net Neutrality, those same providers can throttle content provided by the competition.

Some ISPs are calling users who use the bandwidth as it was advertised, bandwidth hogs, (which they are only using what they paid for...whether the ISP can deliver it or not) With these companies, the end user would be hard pressed to watch more than a few movies per month. Once the capability, bandwidth, and user base expands I expect to see those prices tier based on band width and much more expensive than at present.

[gartrste]

However, I have to wonder about band width availability as the video providers and networks move to more content being available via the Internet, particularly with some major ISPs throttling throughput. With out Net Neutrality, those same providers can throttle content provided by the competition.

Yup, I'd say that was their initial motivation for their endless calls for the ability to "shape traffic". That power can be used for far more...wicked...purposes, but I do believe that is their immediate driver.

When the FCC betrayed rural America and forced the transition to the shorter-range, line of sight signal of digital TV, that put Big Cable in the catbird seat, for many Americans found themselves with no way to get "free" TV. I know the price for my cable television went up almost immediately after the transition.

Yup, it took a big hit about the same time I was discovering that even multistory antennas would not work for me or anybody else in my town. I'd love to see cheaper TV piped via the 'net...but rather doubt that cable wants competition souring the milk of their ever more productive cash cow.

[alfredpoor]

Various thoughts and responses:

Cable prices have gone up steadily. I don't think it's linked to any single event; they're saddled with an aging infrastructure and agreements that require blanket coverage for the communities that they serve. Their satellite and fiber optic competition are not encumbered with these problems.

The market will determine whether bandwidth throttling survives or not. Some providers offer truly unlimited data transfers; competition may force others to follow suit. I believe that cable companies will become information pipeline utilities within five to ten years. They will get out of the rebroadcast of content business, and just offer bandwidth the way the electric company offers electricity. You will either pay on a simple metered basis, or there will be flat rate monthly fees plus usage beyond your monthly limit. I expect the flat rate plans will win, so you can get a discount when you use more.

Cable is in a tough position, because it cannot survive with a la carte pricing, yet the Internet is essentially offering that to viewers now. Their current business model is not sustainable.

Alfred

[Roger Halstead]

I pretty much agree that cable is going to have a rough road to hoe. They are using an outdated business model to support what is rapidly becoming an outdated and limited technology.
I do think the move to Digital was the right direction to go for OTA. I realize the results of that change depend on the location, but for me, I get almost twice as many stations as I did before the change.
Admittedly my antenna system is not typical, but it is the same system we had for analog.

Whether throttling proves viable in the long run remains to be seen. Typically the cable companies and many ISPs have over sold available bandwidth, just as the airlines overbook. Many, if not most, could not support a fraction of their uses if they used all the band width they paid for. With customers watching more and more shows...and movies their bandwidth usage is going to be well into the gigabyte range. Quite likely many will be into the hundreds of gigabytes. I think it will come down to using either a tier system based on monthly use, with penalty prices for going over what was paid for, or the likely hood of a class action suit if they continue to sell by connection speed with mo limitations and then throttle. There is a third option and that would be a failed business model.

We have a good antenna system for OTA plus satellite and cable. The only reason we have cable is for the high speed internet. We do occasionally watch the local channel that has city and county meetings so we can keep up with that. I had DSL with a static IP which meant a dedicated modem at both ends. By the time it was all put together I was spending $250 a month just for the Internet connection plus domain hosting. The same service is now much less. The local cable company does not throttle and if they start I'll just go to one of the local ISPs that do not.

As more and faster internet connections become available the cable companies are going to be hard pressed to keep up with that service as well.

I think the OTA local and regional stations will be around for quite some time, but I think it's just a matter of time for the cable companies.

[alfredpoor]

I don't know of any utility that has sufficient capacity to serve all their customers if they were to use the service in large volume at the same time. We get loss of water pressure on water systems, brown-outs or black-outs on electrical systems, and there's another utility that will just back up if overused (or it rains too hard). So I don't have a problem in theory with cable selling more subscriptions than it has capacity to serve at once, but I agree that in many cases they don't have nearly enough capacity for the number of subscribers. And this will get worse as consumers want to increase their Internet usage.

Alfred

[Roger Halstead]

I have no problem with the so called over booking *IF* that is part of the contract. Statistically at any specific time of day they will have a certain % of their users on line. They should have enough band width to handle all of those users. They will also have a specific % of users on line 24 X 7 and again they should have the bandwidth. However as the networks along with video and music providers gain more customers both of these groups are going to increase in size so the overall percentage on line at any given time will increase. Few, who sign up for these services are going to tolerate pauses in video and audio playback. Last night I was watching some streaming video, and had to pause it at least 6 times for the data to catch up with the player near the end. Otherwise the image was moving in steps, the audio would get out of sync, and the image would even pixelize at time. Pausing the payback for even 5 seconds might give me up to a minute of good viewing before it went back to playing "catch up". "To me" that would be unacceptable for a pay service and that will be happening unless band width capacity is increased substantially.

[alfredpoor]

Pausing the payback for even 5 seconds might give me up to a minute of good viewing before it went back to playing "catch up". "To me" that would be unacceptable for a pay service and that will be happening unless band width capacity is increased substantially.

I agree that this is unacceptable, Roger. It is possible that your ISP is at fault, but there are also other bottlenecks that could be the source of the problem, from your computer all the way back to the host server.

It doesn't matter where the blame lies, however; consumers aren't going to tolerate that sort of performance. So everyone involved in the delivery chain will have to work together to make quality of service (QOS) the top priority for streaming content delivery.

Alfred

[gartrste]

Surprising, to see people claiming that Big Cable is the poor little victim faced with aging infrastructure and outmoded business models...because it flies in the face of the facts. Consider Comcast, whose clamor for the ability to "throttle" and "shape" traffic is astounding:

"Comcast's profit climbs; demand increases for broadband" (MarketWatch, Feb. 3, 2010, 4:16 p.m. EST)

http://www.marketwatch.com/story/comcas ... 2010-02-03

By David B. Wilkerson, MarketWatch

CHICAGO (MarketWatch) -- Comcast Corp. said Wednesday that its fourth-quarter profit more than doubled as costs declined and it gained new subscribers for its digital video, broadband and telephone services.

[...]

Philadelphia-based Comcast (CMCSA 18.82, +0.47, +2.56%) (CMCSK 17.82, +0.47, +2.71%) said it earned $955 million, or 33 cents a share, compared with a profit of $412 million, or 14 cents a share, in the year-earlier period. Earnings in the latest three months include tax benefits of $130 million, or 4 cents a share.

(And "tax benefits"? lollll...corporate welfare.)

[ccclvib]

Here we go again talking about one of my favorite(?) rants re broadband. I receive DSL from AT&T, and I'm close enough to the C.O. that my signal is consistently around 1.1K download. And yet... I can't watch a live CFL game on ESPN3 without the regular stoppages because the buffer has been overrun and the just-as-often skips because the buffer has gotten out of sync. I'm convinced the whole process is going to have to be much better before I can accept watching a program of any length on my computer or TV from broadband will be worth it. Now that U Verse is available here, and the broadband portion is considerably faster, maybe I'll be convinced, but I'll believe it when I see it.