RE: Some Questions & Thoughts re Internet Video vs the Incumbents

Since the Internet is dead and boring it won’t hurt to reply to Mark Cuban’s questions. I once wrote an idea noting that a company may resolve the problem of bandwidth by using satellite, p2p, and broadband together as one hybrid medium. Content would be dynamically requested, routed, multicast, and/or broadcast across any path based on simple supply and demand. Of course, that’s not going to happen because efficiency has never made money and Mark hasn’t made a 3-pointer while doing a back flip.

The Internet is no more dead than Mark Cuban’s stewardship of a sports team; I won’t draw the correlation but I think you’ll get it. The Internet has changed business forever by practically eliminating the cost of asynchronous communication. It’s a simple mechanism upon which countless inventions will take root in, envelope, and culminate our society. What is the Internet if it isn’t the best invention short of Electricity? Since when has Electricity been a technology we aren’t trying to do something new with? I’m not saying the Internet isn’t boring but it’s not dead.

What new doldrums-defying, life-changing “thing” isn’t going to be implicitly catalyzed by the Internet?

Speaking of dead Interwebs; if someone is good at doing something we need to encourage them, keep them around, and not throw them away because they’re not creating new super-profitable ideas. We put a man on the moon, and space got dead and boring; then we forgot how we did it because nobody cared. Not so bad, we’ve got time to figure that crap out again and it’s not important anyways… right?

Don’t kill the Internet. Please.

= 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

+ The real numbers to look at are what mediums are gaining numbers and where new content is coming from. Why isn’t Rev3 on Satellite? — I bet there’s a really good reason which contradicts the sustenance of mainstream distribution.

= 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 ?

+ Because consumers have too much money to spend. It’s almost like asking why we pay $100/month for TV service to begin with. Side note, my room mate’s service included the DVR for free.

= 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 ?

+ Yep. Just like the banks behind our economy new society, incumbents win.

= 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.

+ People don’t ignore bandwidth constraints; it’s only now, after video and p2p have become mainstream, that people are even noticing congestion. People don’t know any better and when they do, they don’t have a choice otherwise. Again, see incumbents.

= 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.

+ This is really an issue independent of video because it goes back to incumbents. It CAN happen but it won’t because it would be Seppuku. Supplying more bandwidth than demand will make it worthless and that just isn’t going to happen in the US anytime soon. Our population density is too low for cheap bandwidth to be profitable and content corporations have too much private control over distribution via contracts and licensing to allow a network which would enable free streaming video content. Personally, I think Internet in the home will remain a luxury for the next few generations because as of right now people generally care more about their entertainment and comfort more than the health and security.

= 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.

+ Rev3 is around because those guys know how to kick back and say “fuck it” and so does their audience :) Well, that, and because I bought a TShirt from Jim Louderback.

= 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.

+ Wrong, sort of. p2p has found commercial success, just in a quiet, not-so-profitable fashion. Finding (new) commercial success in p2p now would be silly, akin to commercial success in a new paging company. p2p protocols were developed and published in an open fashion so they were quickly and easily integrated into and adopted by systems which could take advantage of them. Three abundant uses of p2p are software distribution, backups, and patches (ie, Blizzard’s updaters and Valve’s STEAM network). My guess is that any major software corporation who isn’t using p2p for software distribution is doing so because their cost for bandwidth is so low that it would cost more for them to staff and support a p2p system. That said, I would agree that “p2p networks” have not found commercial success.

= 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.

Short term: Internet is not dead.
Long term: Internet is not dead.

RE: Some Questions & Thoughts re Internet Video vs the Incumbents