Me thinks Mark Cuban dost protest too much: his post on why traditional TV is here to stay is plainly self-serving, but thin on vision and logic (and, for Mr. Cuban, unusually obfuscatory!).
I see Internet TV coming within a handful of years to most every affluent US urban dwelling.
Here’s why:
a) Internet viewings of content traditionally seen on TV is taking off. Witness Hulu’s growth. The reasons for this are twofold: the viewing experience is now as good as on TV (because of widespread adoption of broadband), and because I have broad selection available on the Internet. In fact, some shows that I like I can only watch on my PC, because I don’t subscribe to a cable package that carries them.
b) While quite a bit of TV content is already available on the internet, what’s not already there now seems to be stampeding to get there. Disney, for example, is rumored to be negotiating right now to get in on the Hulu action. More are sure to follow. I think it possible that the selection of shows available on a PC will so dwarf what’s available on cable that cable may even become stigmatized as “limited”. When you’re in the mood to watch oh, say, Josh Bernstein, you’ll turn to the internet first.
c) What will the TV experience be like when Hulu et al are integrated with the rest of the internet, like Google, Facebook, and Twitter? Few can imagine all the possibilities, but viewer experience (and content owner experience too) is going to much much more dynamic – it will be far more engaging than just dumb ‘ole cable.
d) All of this internet content goodness is coming to your couch and big screen sooner than you may realize. This is because within a couple of months Internet set-top boxes (STB’s) will be available for a couple of hundred dollars. Plug in the box to your TV, fire up a Linux- or Android-based browser, and watch Hulu from your couch! These STB’s are fully HDTV and 1080p capable. Oh, and this is the price for early adopters; wait a year or two, and the hardware will be half as much.
e) And, when you’re sitting on your couch, will anyone bother to go through the pain of figuring out what’s currently available on cable when infinite content is immediately available and conveniently accessed? “Time-shifting” and super-cool DVR technology, you’ve just been obsolesced.
f) I should say something about content distribution costs: while it is true that the cost to deliver a movie over IP is still (slightly) more expensive than delivering it via cable, the difference is small (and shrinking), and I believe it is absolutely overwhelmed by the vastly superior convenience that will be (is alread) available via IP.
g) Not only will the viewer experience be superior, but the content owners will prefer viewers via IP as well. Not only will their ads be able to be much better targeted, but also, for paid content, the content owners will have much greater ability to flexibly set whatever price they want then they ever had over cable. And, content owners won’t have to deal with cable companies as an intermediator – so they’ll love it as a distribution channel.
I should note that I’m not a fanboy of either any STB manufacturers or of Hulu. In fact, I expect there to eventually be multiple Hulu’s; Yahoo and Google/Youtube are obvious wannabe’s in this space. Also, there may be content portals that in turn disintermediate the Hulu’s of the world; think google video search or companies like Boxee.
The conclusion I reach is straightforward: we’ll be watching media via IP on our big screen LCD TV’s in the very near future, and it will happen at the expense of the cable companies.
Cable, you’re being disintermediated.
