Commentary
Dumping The TV Cable Box
- by dave.b , Max Kalehoff , February 20, 2009
To demonstrate how far and fast television has come, I turn to my own household. We're a good example because we're neither manic early adopters, nor laggards -- we're somewhere in the middle. We experienced extraordinary change over the past year, and it happened with only modest investment and simple upgrades.
- Our television now is high-definition, 52 inches widescreen, with digital surround sound.
- Verizon's FioS fiber-optic lines have replaced traditional coaxial cable lines into our home, and they connect to a high-definition cable-television receiver.
- Those fiber-optic lines enable much faster Internet connection speeds, making broadband video more meaningful than ever before.
- Sources of online video are getting serious, and high-definition video quality is becoming more prevalent. There's BitTorrent, of course, but also more legal and mainstream sources, including Netflix, Amazon and Hulu.
- Our television system plugs into our cable box, but also a dedicated laptop (with Blu-ray DVD) and several other devices. One awesome device is a Roku, a digital video player that instantly streams high quality movies and network television series from Netflix (and soon from Amazon Video On Demand).
- With a dedicated laptop for our television system, services like Boxee make online video social and optimized for widescreen. This helps us discover the best content, display it properly and filter things we don't want.
Indeed, these technologies prompted significant behavioral shifts and media configuration choices. Here are the big ones in our household:
Firing The Cable Company Becomes A Sport
It used to be that the traditional cable company was the only television content and Internet pipeline into our home. But now there's a better choice, and it's creating downward pressure on prices, and upward pressure on product selection, quality and service. While a duopoly is not ideal, it's much better than a monopoly. And I certainly enjoyed firing our traditional cable company. So did our neighbors.
Decline Of Casual, Commercial-Interrupted Viewing
Casual, commercial-interrupted television viewing is almost gone, unless it's a quick clip on a laptop. There are several reasons: First, today's steroid-injected media systems don't lend themselves to casual viewing. Richer programming, huge vivid pictures and surround sound means that our television room has turned into a theater. Therefore, it becomes difficult to do anything but focus fully on the programming. Similarly, commercial interruptions become more intense and difficult to ignore, which means they become more bothersome.
Second, the paradox of technology is that television systems have gotten overly complex. With numerous devices, configurations and programming sources, it takes more planning, commitment and work to view. That complexity has led my family to be more selective and gravitate toward more meaningful programming with higher expectations and focus.
One Theater Versus Multiple TVs
In our house, we've never had more than one or two televisions. But as televisions evolve into mini theaters, the complexity and cost inherent in a good system makes it impractical to have multiple television configurations. Certainly, there will be more video screens, evident on mobile devices and laptops, used primarily for short-form viewing. But for long-form television viewing, we certainly don't want to downgrade from a theater experience to a lighter, less-satisfying one. Switching back and forth is unpleasant.
Thirst For High-Definition Content Growing
Once you get used to high-definition video, anything less is painful to endure. As a result, we sometimes select programming we'd otherwise disregard -- because it was high-def and the alternative wasn't. We long for the day when all programming will meet a minimum threshold of high-def.
Dumping The Cable Box
Most significant, we're almost ready to dump the cable box, which delivers traditional broadcast channels and network programming. The combination of better broadband, plug-and-play devices (like Roku) and serious online video streaming has made a big dent in our traditional cable-box viewing. Sports and other live events are still tied to cable boxes, and therefore will remain among the few significant incentives to keep traditional cable programming over the next couple years. But I underscore that the only time my family really used our cable box in 2009 was to tune into the Super Bowl. In one year, when our FioS subscriber agreement ends, we plan to cancel cable programming, unless it's a bundled giveaway.
To be sure, television and video content will continue to evolve quickly. Our personal media habits and technology configurations, described above, will outdate quickly. What will be the new television experience? I'm not sure, but I anticipate it will keep getting better. And I hope it simplifies.
How is television changing for you?
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All of the changes Max describes are true. But to say that commercial-interrupted programming is "broken" or "almost gone" is just silly. The audience for traditional commercial broadcasting, while declining, will continue to dwarf all other methods of viewing for years to come -- all the more so when digital mobile TV rolls out starting later this year. Yes the commercial model must adapt to competition from less disruptive formats but that's already happening. Moreover, once technology catches up with illegal distribution, much of the "free" programs available on broadband will be replaced by pay per view or commercialized versions with mandatory ads.
This is a fascinating discussion.
Very recently I posed this question to an executive of a specialty channel broadcaster and he was fully in denial that the traditional broadcaster-cable distribution system was under threat.
While I agree that some of the points Max makes are valid and things are evolving, we are still a long way from cutting the cable.
Anyone who watches more than one sporting event per year would have a hard time trying to source their need for live broadcasts on the internet.
Cable is actually a very efficient means of distributing video content. I sometimes wonder why so much effort is spent trying to replicate it via the internet. I suspect a big reason is to save money. But in the end content needs to be paid for by someone. If it isn't advertisers then it will be user fees. As it is the convetional broadcast model is already cracking and subscriber channels are thriving.
As an example, I understand that ESPN gets about $4 per subscriber per month. That is an entire month of non-stop programming for $4. Can appleTV ever replicate that kind of pricing even if they could do live streaming? And ESPN is the channel with the highest fee per sub. How could cable subscribers hope to replace all the $.50 fee channels. Thats less than one hour long program on appleTV.
This is not like the CD business where the distribution model could easily be replaced by a cheaper method. Music is not ad supported. Remove advertising support from the television industry and a lot of content would disappear.
Don't forget that cable (and IPTV) providers also control the internet pipe. Based on the average TV viewing, if a viewer cut their cable and replaced all their viewing with internet streaming or dowloads, they would blow through their traffic caps (in the fine print) a few days into each month.
Having said all that, I agree the model is changing. I told this excutive that I could stream all the movies I want from Netflix for $9/month. He wondered what my cable co might think of my data usage. He also pointed out that his commercial free movie channel package (4 movie channels, 2 HD channels and HBO) was $14/month - hardly out of the ballpark.
@Arthur: the commercial-interrupted programming model is silly if it bothers people and turns them to alternatives.
@Richard: Admittedly, I don't watch sports, so I don't have the problem many would in parting ways. ESPN may collect $4 per subscriber, but I recall that the programming is full of commercial interruptions, most of which are irrelevant or bothersome to me (personally). That's a huge tax on the user, to fund the programming. Again, it may be for some people, but not for me. As for the broadband companies needing to be subsidized, I don't disagree. I pay about $99 a month today for a fibre-optic connection. That's not immaterial. And yes, Netflix + Roku ROCKS!!!!
@anyone: Everyone please pressure the content owners to let Boxee optimize their content. A better browser for online video, to make it tolerable on widescreen televisions, is only a good thing for everyone.
I think most of the people leaving comments are recognizing the reality of covering production costs in the film and television industry. The distribution cost is linear so if you want to go from a 300Kbs (small window) broadcast over broadband video to 1.2Megs (current model for full screen video) you just increased your cost 4 times. Go to hi-def and you kick it up at least that many times if not more. That's what a content distribution network (CDN) charges, not what the consumer is charged. P2P solutions help but costs are still high. The cable companies are their own CDN and they have scaled those costs down for themselves but other broadband video content providers are still challanged to make online video work in their own business models... and I didn't even talk about production costs... just delivery costs. We still have quite a long way to go before we can throw out the cable box.
I dumped the box two years ago. I got fed up with shelling $65.00 a month to watch hundreds of channels with nothing of interest to watch, infested with 20+ minutes of Commercial, mostly for products I have absolutly no interest in purchasing. (Especially when their Salesperson thinks the best way to sell their product is to do so in an Obnoxious and or Offensive Manner!) I now use that 65.00 to purchase Commercial-Free Programming, and my library has grown to the point where Cable (And Broadcast) TV has now become, as the British would say, "Redundant".
lack of innovation from the cable co's is frustrating -but their failure to build customer loyalty will ultimitaly cause their demise - do you know anybody that like's their cable co? (only thing saving them to date, is that nobody likes their telco either)