Cable Faces Imminent Threat. But Unwashed Masses Too Lazy To Care.

The Wall Street Journal reports that a 100-person Utah company, led by CEO Roxanne Austib, has raised more than $67 million from some prominent backers that include Microsoft Corp., Comcast Corp. and Walt Disney Co.’s venture-capital arm. The goal? Bring television video to homes via the Internet. I know. Crazy, right? What next? A computer in every home?

Move Internet Television: But Moving is Scary. I Like it Here.

If the company pulls it off, you could watch programs via the web, your television-shaped monitor (via a converter box unless it already has an Internet jack or wireless receiver), or via your stupid iPhone or iPad (which some bastard called “the fourth screen” today at a conference, and made my omelette travel back up my throat).

But you won’t.

“…Move isn’t laying cable or launching satellites (so it says it)… can charge consumers far less than traditional pay-television operators for a comparable suite of channels. Move hopes to undercut those operators further by offering a pared-down lineup-perhaps as few as 80 to 100 channels.”

Here’s where it gets interesting. Comcast just launched a service called TV Everywhere that, um, uses Move software to provide its paying prisoners free on-demand access via the web. So will Comcast keep Mmmmoving? Or drop Move like Time Warner dropped its retarded older stepbrother AOL?  I’d expect a bloodbath, and I will enjoy every moment. As the WSJ acknowledged, this “could turn cable providers into little more than utilities, maintaining thousands of miles of dumb pipe-pipe through which Move’s snazzily repackaged TV programming would be flowing.” Say what you will about Comcast, but I don’t think it will become a dumb pipe without a fight.

Would you like to know the very sad “secret weapon” cable maintains? We’re change-adverse, lazy idiots.

He looks like we behave under the trance of lame utility companies.

We take don’t like breaking up with important service providers even when they suck (how many excuses have you used to avoid adopting voice-over-IP?) We default to whatever damned boxes our cable/fiber/phone providers install. The model T Ford comes in black and black. We are statistically proven to prefer the burger with the McDonalds wrapper against the exact same burger wrapped in white paper.

We don’t trust new companies- especially on something important like a utility. What? Clear? Saw them at BestBuy and in lots of newspapers and billboards. But who are they? Verizon’s my phone company. It’s the only one I’m allowed to use. Just like the US Post Office is the only way I can send a letter. Groceries delivered via web order? No I like to smell my canned food before I buy it.

But the TRS-80 Comes With a Tape Recorder AND Basic.

Take TiVo for example. It’s better, but few Comcast or Verizon customers realize they don’t have to put up with the TRS80-like machines the cable/telecom companies issue like obligatory military uniforms. Even better, the AppleTV (for $200) will give you every damned television show or movie you could ever want for a couple bucks and 2 clicks… with no stupid monthly obligation.  Do we buy them? Nope. We’re saving up for an iPad as big as a goitre.

But the Unwashed Masses DO Need Their Fashion Accessories.

So perhaps Move soars over every hurdle and obstacle that cable and telcom companies can lobby into its way. Then it manages to (with a nervous and tempered endorsement from big media and tech players) launch a less expensive, easier, high-quality offering that effectively makes Comcast/Verizon a giant Bill-Murray wielding hose… Some early adopters try it and love it. They tell all their pretend virtual friends. But unless 100% of that $67 million is going into mass advertising, we unwashed masses remain confused, and stick with our drunk & swearing spouses we call cable/telecom. It’s our fault they abuse us.

It's our fault he drinks so much.

Yes, we unwashed masses continue overpaying for never-used cable channels, ignoring the blinking 12:00 on the Betamax, and continue our 45th year of renting standard-issue 30-pound rotary phones for $5 a month from Ma Bell. We unwashed masses already tried your fancy microwave machines and facsimile phones, and that will be enough for now.

The only phone that works with your telcom company. It's not so bad.

Cable’s Fate as FCC Pushes for Internet-TV Access: Impact of Comcast/NBC

David Lazarus of the LA Times writes about the FCC’s role in shaping broadband enabled television (remember that computers are in 74% of homes, but televisions in 99%). In the wake of Comcast’s impending takeover of NBC Unviersal, Lazarus writes:

If federal regulators have their way, the next big thing on the tech horizon will be a brave new world of Internet-ready, work-with-any-network set-top boxes, offering consumers unprecedented multimedia options through their TVs, not just their computers. And if this plays out as the Federal Communications Commission envisions, the world as cable companies know it will radically change, making the potential synergies of the Comcast-NBC deal all but obsolete.

Mind you, I’m no fan of bloated “synergy” deals like AOL Time Warner, but that “all but obsolete” statement sounded to me like an incredible generalization. Given Comcast’s legitimate concerns about its sustainability as an intermediary between content and customers, it seems like Comcast’s ownership of a network would make it far from obsolete… regardless of an FCC move.

Comcast NBC Universal logo

Most of us who watch this space are more progressive about our technology, but I won’t soon forget a conversation I had with a Verizon employee who I asked to install a card into my TiVo. He was struggling with this process, and explained to me that almost all Verizon employees use Verizon’s horrible box. It’s partially because it’s easier and less expensive, but I’m willing to bet few know they have other options.

So if the cable-subscribing masses passively use the box Comcast provides, then Comcast can effectively advantage NBC content… giving it the premier stations and placement. Consider when you’re in a hotel, that before you can channel surf you’re forced invited to watch one of the $15 movie rentals (a price at which you could buy a DVD anywhere else). An analogy would be if YouTube owned two-dozen partner channels and gave them top billing on YouTube’s homepage and “related videos.”

Done right, vertical integration produces some advantages to the company and lower costs to the consumer (by eliminating the middle-man and reducing overlap between players in a supply chain)… think Walmart. Done wrong, it’s a price-gauging monopoly that abuses its power by, for instance, requiring a Comcast subscription to access NBC content (unlikely). The NY Times covers this scenario in an editorial. Indeed many attempts at synergy result in customers getting screwed and a remarkably unfocused company. I worked for a web-strategy group acquired by Qwest (the Denver-based telcom) and saw no advantage to a telcom owning a web-services group.

Back to the consumer and what he/she experiences… if Comcast installs a device that makes television-viewing and web-surfing easy, then it has a non-trivial advantage. It can run ads around television web-viewing so it capitalizes wherever  the consumer is going (free or paid). It can make Hulu a pain in the ass to watch. It also has the ability to prompt viewers to purchase on-demand NBC content or provide upsell offerings as subscriptions (with the click of a mouse).

Conclusion: Comcast/NBC strikes me as far more powerful than Vertizon or a stand-alone ISP/cable company. If you own the technology and content then you can profit from ads or upselling content. It’s kinda like the kid in the neighborhood that owns the only football. He’s probably going to get invited to each game, and the game is temporarily over if he decides to go home because he’s mad. Of course if he abuses this role, at some point the other kids will purchase their own football and tell that kid to piss off forever.

football

AppleTV & iTunes Dissintermediates Cable? Bigger Than Balloonboy Story.

Wowzer. Your’e going to want to read this post, because it’s hot news. And because I put some effort into some seriously solid metaphors that damned well better be scraped by some bigger bloggers.

For years I’ve been bitching and moaning about Apple not putting its little heart into AppleTV (instead of screwing with these ridiculous iPhone toys and their petulant little “apps”).

stevejobsfeces

And all the while, the little Steve Jobs may have his eye on dissintermediating cable television. Fast Company provides some saucy news, and sources “All Things Digital.”

But this isn’t about the AppleTV, idiot. No it’s not about software or hardware. Apple is basically envisioning a $30-per-month iTunes television offering, which would give networks new reach via 100 million iTunes users. And that means you, like the 100 million iTunes users, would start watching shows via Apple both on your computer and (via some box) that big-ass monitor you call a Plasma or HDTV.

Do I need to repeat that? Television shows when you want, and on whatever damned screen you want. Oh, and a gentle reminder that technology companies will control your fate more than telephone, cable, publishers and networks (never mind that whole AOL/Times Warner hickup).

Alas, it’s hard for me to envision a scenario where cable companies don’t start tossing fecal matter like angry apes. But it’s a game of chess, not the beloved “toss-the-feces” we’d play at birthday parties. If Disney, as an example, slept with Apple… what could the angry ex (cable companies) do? They can’t very well drop Disney. And since Disney’s move would be the “tipping point” this all needs, Disney gets to set the terms. Girl, you know those Mickey Mice could nibble up an Apple like Piranha to a cow.

Fundamentally the broadcast networks have to decide whose bitch they want to be. Cable television or Apple’s.

If the music industry feels that iTunes was a good thing (additive revenue that didn’t exactly kill radio or CD sales entirely), then maybe the television networks go the same route. And to keep Apple “in check” they can replicate the terms via Hulu, YouTube or even some genius that manages to build a television-manufacturer standard.

The bottom line, however, is the train already left the station. I’m an example of a fast-follower (not early adopter), and I’m spending more each month on $1.99 television episodes than I am on a cable bill! I loath Verizon’s interface and on-demand library, and persist only because my wife likes depressing news and Nancy Grace, and my kids need their Nick Jr.

To be fair, I’m discovering I liked the control of “lean forward,” but I want to lay down on the couch and bed too. Love my TiVo, but it didn’t catch any fresh fish (like during this damned Fox Fringe hiatus), I dive into AppleTV and try out a new show… maybe buy a few episodes or a season pilot because $1.99 ain’t a bad price for 45 minutes of some boob-tube love making. I’m less often surfing YouTube’s most-popular list because it’s just a sad reminder remind of how much better Sxephil, Shaycarl, CharlesTrippy and ShaneDawson are than me. Last night me, Charlie and Grant and me did start a YouTube binge that began with Edbassmaster, then progress on a downward spiral that culminated in farts and babies. But then we jumped back to paid episodes of Angry Beavers. Damn that intro is hip.

Speaking of YouTube, those trained monkeys better get their own poop in palm. They’ve cornered the market on searchable video, but this is a bidneth model that can move faster than ad-supported web video. I think this crap (you know the kids are saying that now like it means nothing anymore) is bigger than the Balloonboy story. Except the Falcon hiding in the attic and puking on CNN might just be… Comcast, Verizon and other cable providers. I predict Hulu maintains its relevance if this shakes out, unless Apple iTunes makes itself incredibly easy to purchase and view via both web and those BIG ASS televisiony-like monitors. Hell in a few years, maybe we don’t even know or care where our video content comes from.

Yeah- I even think this story might be bigger news even than last night’s AppleTV upgrade:

“WTF? A vertical menu?” he says, tossing his mini white remote that has been chewed to near obsolescence. Fade to black.

Online-Video Changed Forever Today: Google/YouTube Takes on iTunes & Cable TV

Organize the world’s information. That was the initial mission of Google, so I have found it ineresting that the company has taken significant steps (like buying YouTube and launchin Knol) to host and distribute it.

You see, there’s a big difference between organizing information for easy search… and actually hosting it with ads

In a non-trivial move, YouTube today announced that it’s offering a new pay-for-download service (using Google checkout, of course) which allows viewers to buy and download select creators’ videos. 

YouTube launches download for pay

While this may not seem like a significant move, it’s actually the start of a major threat to Apple’s iTunes and other cable and phone providers — as well as any comany that charges flat or variable fees for video distribution.

Content owners will participate (I know I will when invited) and viewers will use it (and I know I’ll buy select content). Then, friends, Google/YouTube is just one step away from making my AppleTV and Verizon Fios obsolete… it just needs to create or sanction Google player boxes that allow us to surf from my television set without the monthly fee of a cable service. And based on Android, that’s not far away. It’s content ala carte… just the way I’d like it.

I currently live on my Apple TV because I like surfing YouTube and Apple’s easy navigation for buying TV shows and movies. I’ve bought more movies and television shows in the past two months than in the 3 years prior. The Verizon Fios highspeed boxes, by contrast, are horrible, slow, and cost me a cursed monthly rental beyond my regular plan. So I long for the day I can return these boxes, and go web only. Of course I still need cable service for my kids, and for access to whatever select television shows we watch regularly (almost never live). But many of these shows are now available on Alec Baldwin’s Hulu.com, which could be accessed with an AppleTV-like box.

I can’t believe there’s a device for viewing web video on my TV available at Best Buy for $199.00. There will be in 2010, and there are some limited devices here reviewed by DeviceGuru.

Manufacturers I beg you… work with Google and create the killer Cable TV busting device. Consumers will love it, content creators will get wider distribution and revenue, and we can stop pretending we need Comcast or Verizon television. Sorry, I’m not a big fan of middle men that get greedy with high fees, poor service and rented boxes. And I trust Google to run all of this reasonably — at least more than I do my cable or phone service.

Naturally, a competitor would ensure that Google doesn’t have a complete monopoly on web distribution, but I’ll let the FCC worry about that.

YouTube Moving from “Lean Forward” to “Lean Back”

youtube television appletvDo you want YouTube and amateur videos from the comfort of your living room or bed?

I’m the only person I know that uses AppleTV to surf YouTube, but the YouTube blog announced a series of distribution partners. I usually think of YouTube as a company that has been fairly slow to introduce new technologies, but it has been building out a network beyond the website.

I once did a practical joke where I called YouTube’s PR lead and complained that I couldn’t find YouTube on my cable lineup. Now if you want amateur video via your cable TV, there’s no reason your provider can’t offer it. Here are the API case studies.

Eventually YouTube needs to serve ads via these distribution platforms and share the revenue. That will spawn increased demand, even if the ads command a smaller CPM. It’s an easy way to offer subscriber value and it’s good for creators and advertisers if it helps amateur content reach new audiences.

I’m puzzled as to why YouTube video viewing hasn’t been default incorporated into Roku — the device that allows you to stream your Netflix videos to your television set for $99 and no monthly fee. I love the idea of surfing an endless pool of video without a nagging monthly fee or per-video charge. Candidly, I’d be far more willing to pay a “per view” charge than another monthly one. Who needs another damned cable bill for 100s of stations we never watch?

Right now, a television/cable provider wouldn’t likely offer YouTube without sensing demand from its subscribers. It’s not yet a revenue source for them, although it will be eventually. Currently a video distributor can access zillions of YouTube videos and advertise around the API (but not within it). According to the YouTube API terms of service:the sale of advertising, sponsorships, or promotions targeted to, within, or on the API Client or YouTube video content.”

The Devil is in the Device: How We’ll Consume Online-Video Via BoobTube in 2008

old_tv_set_rc.jpgI’m going out on a limb here, but I predict that independent web-to-tv boxes will be (albiet perhaps temporary) an inevitable part of the pending collision between our television sets and Internet. We’re past that debate about whether TV or online-video will prevail. There will be a hybrid model, and quite frankly I can’t wait to consume my online-videos with the ease of TiVo surfing. I just don’t watch television anymore and the cable and telcom providers have made that an easy withdrawal.

Months ago, I would have bet that cable and telcom monoliths could successfully dominate this space with their own connectivity, equipment, and customer base. But Verizon’s latest release of its Fios TV video interface has convinced me of otherwise. It’s rather hopeless, and we should expect nothing more.
Despite continued investments by cable (Comcast) and telcom (Verizon) providers — which includes fiber and expensive capital —  they’re going to be dissintermediated in the short term. Sure they’re winning customers with competitive bundled deals for cable, phone and television. And they have a built advantage because we want a turnkey solution and it’s hard to bypass them unless you want a satellite. But they’re big, slow, and focused more on securing their market position than innovating.

Fios TV SucksWhile the bundling (phone, TV and internet access) is quite economically tempting, the television ‘user experience’ is what real-estate agents call functional obsolescence– it’s a deal breaker. For the past year I’ve suffered through Verizon’s slow, counter-intuitive, buggy and frustrating television interface and would have canceled long ago but for my wife and kids’ desire to watch news and children shows. A few weeks ago, Verizon rolled out an entirely new interface, which is prettier but almost as convoluted. Comcast, last I checked, wasn’t much better. I miss my delightful, buttery TiVo experience, and have two TiVo units depreciating because I can’t figure out how to get them to play nicely with the Fios-mandated Motorolas. And I’m not willing or able to pay a third recurring fee: a TiVo service fee, in addition to my monthly TV bill and rental equipment toll. If only I could just dump the Motorola and pay Fios a cable fee alone.

You see, Fios TV forces me to rent a Motorola media box (actually, I could rent a digital converter, but that doesn’t cost much less per month). I rent two of these stupid units (living room and bed room) and they communicate with each other like Hollywood stars in their 3rd month of marriage.

I expect a cable bill. But a monthly “rental toll” for a mandated unit is reminiscent of Ma-Bell charging $5 a month to my grandparents for a “model T”-like rotary phone (which everyone seems to overlook until the parents die, someone has to clean up the estate, and the children discover they’ve paid thousands in years of renting a phone that could have cost $2.99 at Walmart).

appletv.jpgMeanwhile, I almost tossed my AppleTV months ago, but have recently been spending a lot more time using it. It cost about $300, there’s no recurring fee, and the interface is getting better. I can enjoy any video I download or import as an MP4 (and my handy VisualHub takes care of the conversions for videos I download elsewhere). More importantly, it’s how I’m beginning to consume a lot of my YouTube videos.

On the negative side, iTunes has its share of limitations: a paltry video-purchase selection via the iTunes store, a ridiculous rental service I won’t soon use again (after a “Live Free or Die Hard” expired before I ever started watching it), and this baffling confusion of trying to synch media across various iPods and Mac accounts.

And frankly, I’m quite sick of being deprived by Mac of sharing or viewing my purchased videos and movies– legally, across my own digitalia.

ant farmThat makes me so angry, I’ve starting to resort to getting movies via other mischievous means. Last night I even fell for a Google text ad that boasted a $35 one-time “free movie downloads for life” scam. For my impossible-to-refund fee, I received a special log-in website, password and instructions… which basically provided me a link to LimeWire (a free p2p tool). Caveat emptor I suppose. I was reminded of when, at the age of 9, I bought a “remote-control ghost: flies as high as 100 feet” from a comic book ad. Eight weeks later I received a white plastic bag, a balloon, and 100 feet of string. Even Sea Monkeys and the Ant Farm were better deals.

But something promising occurred quietly in the past week. AppleTV pushed out an upgrade, and now my YouTube viewing is slightly closer to the experience of watching videos via YouTube.com directly.

Initially, YouTube viewing via AppleTV provided a fraction of the experience permitted on YouTube. I couldn’t even look at my subscriptions or sort recent videos by creator. This limited YouTube interface is part of the reason I dumped my iPhone after two weeks (AT&T’s poor connectivity was another reason). But now I can at least go beyond watching the top YouTube videos of the day. I can view a random subset of my subscriptions (for odd reasons, they only let me peer into my first dozen or so, which is a bit constraining when you’ve subscribed to 800 people).

If you’re not a YouTube addict, the AppleTV makes less sense, and Apple won’t soon penetrate the market with these units unless they improve the interface further, renegotiate failed content deals and partner with electronic manufacturers or bring down the unit price.

So what’s ahead in 2008?

  1. First, AppleTV needs to start embedding ads. As a creator, I’m not getting profiting from viewers using AppleTV and neither is Apple or YouTube yet. If Apple wants to leverage near ubiquitous high bandwidth, thereby circumventing or coexisting with cable/phone providers, it’s going to have to find an ad-supported model first.
  2. Watch for similar boxes that are inexpensive and provide access to online-video via television. I still haven’t opened my free Sling Box so maybe that’s a step in the right direction?
  3. If the programmers and networks (CNN, ABC, NBC, CBS, etc.) were more organized, they’d cooperate to build a model that could dissintermedia cable and phone monopolies (or at least develop a media-friendly model that offsets the power of these dominatrix-like “last mile” providers. But that’s unlikely because the media companies hate each other, and monopoly legislation would hamper it.
  4. Instead, watch for a startup (whatever happened to Joost?) that creates something similar to the AppleTV experience: elegant, content rich, ad supported and no mandated monthly fee initially. They’ll share ad revenue with media companies or amateurs and create inventory that piques the interest of advertising networks.
  5. Once a few of these independent boxed units establish a base, they can begin charging a modest monthly fee. Heck, I’d pay AppleTV a few bucks a month just to ensure I can view YouTube without the current restrictions. How am I to choose between Lemonette, Renetto
  6. Naturally, the electronic manufacturers are trying to squeeze into this space, but it’s not a play built for either a phone company or consumer-product electronic manufacturer. The interim winner will be one that — ala Apple with its recent offerings — puts the user experience above all else.
  7. There are probably other players creeping into this spaces of which I’m not even aware. Know of any?