Content has Nothing to do with Channels

so, mark cuban’s got this post about how cable subs — yeah, that’s a term “the people” would use — should unite agiainst the freeloaders!

so, lemme get this straight.  you just come off back-to-back tirades about how a la carte is stupid and cable operators — you know, “content people” — should get paid and the internet suxors.  aside from cuban not being a content person (you’re a content distribution person!), he seems to think that a la carte is bad, the devil and every other evil reference you can think of.

the problem is that he’s thinking a la carte channels.

that’s not what we want.  we want a la carte shows.  i could give a damn about the other 98% of tv on a given channel.  choosing between bundled channels and a la carte channels is like choosing between bad and worse.

that means channels are soooo dead.  and, if channels are dead, then distribution and bundling deals are dead. (long live filters and recommendation services!)  and, if traditional content distribution is dead, mark’s out of a job.  my prediction?  well, knowing mark’s track record, this is what happens:

  1. the amount of content online starts growing exponentially.
  2. a successful filtering/recommendation service rears its head and pwns the online video market.
  3. cuban realizes his mistake and pours more cash into hdnet and apes the successful service.
  4. hdnet still doesn’t gain traction.

(just basing all that on icerocket‘s history…)

again, a la carte shows, not channels.

and, by the way, mark.  i can answer all of your questions for you.

“How many people have really given up cable or satellite for internet only delivery of content ? 100k at the most  ? Based on company reports, it seems like people are giving up their wired telephone lines at home long before they give up their cable/sat/telco TV”

this is exactly what the phone companies said 10 years ago.

“Why are DVR sales continuing to climb ? if the internet is a better solution, why buy, lease or even use a DVR ? Shouldn’t DVRs be immediately obsolete ?”

again, a la carte shows, not channels.  people are building their own channels.  and dvrs are easy.  always bet on easy, cheap, and choice — in that order.

“Technology doesn’t always move in the direction you expect it to.  Anyone for faster airplanes ? The return of the Concorde ? More efficient electricity grids ? More fuel efficient cars ? You can blame the lack of progress on the incumbents or their industry, but doesn’t that make my point ?”

what on earth are you talking about?  those examples sound like the old guard holding others back.  i have no idea what you are even trying to ask much less whatever the hell your point is…

“Read this great post from the NetFlix Blog Why do people ignore in last mile and  home bandwidth constraints ? More devices at home, more utilization,  more hard drive storage, require more backups, which consume bandwidth, whether local or online.”

um.  okay.

“Why do people think that bandwidth to and in the home will grow faster than applications can consume it  ?  If you believe in the inevitable progress of technology and innovation then shouldn’t you believe that this collective genius will come up with better uses of increasing bandwidth than replacing TV ? I certainly do. Health Care, Security, Who knows what, have to be a better and more rewarding use of bandwidth than just TV.”

i can’t think of a single person who says “awesome!  i have plenty of bandwidth to run all my games, tv and sufing all at the same time!”  i’m sure there will be a “better” use of bandwidth than replacing tv.  but, hey, it’s the internet — we can do both!

“Always remember that the long tail of content, whether audio or video, never gets paid. Thats why its on the long tail.  One hit wonders do not disprove the rule. Creating hits is hard and very much a numbers game. Any content game that is a numbers game is expensive to play. Which explains exactly why there are so few internet video only companies (our friends at Rev3 being hopefully a shining exception) making money.”

never gets paid?  huh?

you should read about niche markets.  then, go tell the couple who started they aren’t making money.  or maybe talk to jill sobule or kristin hersh or the guys from marillion.  or, if you want tv, how about the guys from the guild or yoga today or star trek: new voyages.

you’re wrong.  you don’t need hits.  selling 1,000,000 copies of one piece is the same as selling 1 each of 1,000,000 different pieces when distribution costs (people like you) are marginalized to zero.

it’s only expensive to play when you think like a cable operator and not an web publisher.  niche markets work because, unlike specialty cable channels, a small percentage of dedicated customers finance the entire thing.  this is because the costs associated with it are so low and with the a la carte web, you can get your show — not an entire channel — in front of the people who want to pay you for it.  you just can’t do that at cable operator scale.

as you are ever conjuring the image of music execs of the last decade, here’s a quote from robert pittman, cofounder of mtv: “When I talk to people in the music business, most of them will admit that the problem is they’re selling songs and not albums. I mean, you do the math.”

people want shows.  not channels.

“P2P has been around for how many years ? It has yet to find commercial success anywhere. Its not a solution to any problem and in fact is a huge risk. Anyone with any sense of fairplay knows “free bandwidth” for commercial distribution of content is inherently wrong.”

you’re not paying attention.

every single mmo video game uses it as a distribution method for downloading clients, content and patches.  yes.  all 12 million world of warcraft subs who pay $15 a month for example use it.  why?  because it marginalizes the cost of bandwidth for content delivery.

now, imagine if the online video marketplace’s biggest complaint — cost of delivering high quality video — was marginalized!

“For all those that think there will be an explosion in bandwidth, remember we are in at least a recession, if not worse. Don’t expect any capital to be invested to take the last mile to multiples of current experiences. In fact, you might see the opposite as capital constraints encourage networks to try to manage as best they can with what they have. It could be far worse on the wireless front as lack of capital could shut down installs”

again.  you sound like the music industry execs 10 years ago.  or the movie industry execs 5 years ago.

you are just in denial if you think tv is different than movies (who said they were different than music) or music (who said they were different than the printed word) or newspapers.

you wanna see what people want?  go cruise the torrent networks.  the reason the content is out there is because it’s the content people want.

there are entire categories devoted just to tv shows, dude.  a la carte is here and delivered via the internet already.  why?  because it solves a consumer pain point.

if you don’t give us what we want, we’ll get it ourselves.  (see the lambasting of the music industry for reference.)


4 comments so far

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