Intel wants to break the cable model, allow for pay per channel viewing

[arsenal]

http://www.businessinsider.com/intel-cable-2013-1#ixzz2GkSFccYf

This set-top box, said by industry insiders to be available to a limited beta of customers in March, will offer cable channels delivered “over the top” to televisions anywhere there is an Internet connection regardless of provider. (Microsoft Mediaroom, for example, requires AT&T’s service, and Xbox has limited offerings for Comcast and FiOS customers). For the first time, consumers will be able to subscribe to content per channel, unlike bundled cable services, and you may also be able to subscribe per show as well. Intel’s set-top box will also have access to Intel’s already existing app marketplace for apps, casual games, and video on demand. Leveraging the speed of current broadband, and the vast shared resources of the cloud, Intel plans to give customers the ability to use “Cloud DVR”, a feature intended to allow users to watch any past TV show at any time, without the need to record it ahead of time, pause live tv, and rewind shows in progress.
This is a holy-grail of sorts for people that subscribe to cable.

[Hemi-Cuda]

and it's already being held up

http://thenextweb.com/media/2013/01/02/intel-web-tv-project-reportedly-held-up-in-content-negotiations/

it'll never happen

[CaramonLS]

I highly doubt it will take off without significant intervention.

The cable providers themselves own a great deal of the channels, which is the single biggest reason the cable model will continue to exist.

[blankall]

Good idea. Although it essentially not only kills the cable providers but also the local television channels. There's going to be major opposition to this. Also, many of the networks who produce the shows, wouldn't allow their shows to take part in this, without some kind of major markup. You can already get most channels added to your package for $2-3 each. The per show pricing, probably wouldn't be able to run much cheaper than that.

[Finny61]

This is me when the cable model dies...
http://www.reactionface.info/sites/default/files/images/1345655962201.gif

However a snowball's chance in hell methinks.

[arsenal]

It has already happened with iTunes and the music industry, it has essentially happened with the movie industry and netflix. There are numerous video games out there that are free and you pay for extra content. I understand that there would be huge opposition to this type of model but theoretically they are the last of a dying breed.

Initially there could be huge push back to this, but if Intel is able to work a deal with companies that would provide just about any channel out there to any person in the world, it could prove quite lucrative.

ie: Flames fan moves to Europe for work and they subscribe to CBC for HNIC and sportsnet west for other coverage, those networks are still getting that money, even though they would have lost that subscriber due to them moving.

[gottabekd]

If I could pay $40/month just for AMC, TSN, Sportsnet, I'd do it in a heartbeat.

That said, if it's doubtful the US Market would let this happen, then there is no way in hell something like this would go through up here with the CRTC. Or maybe they'd let it through as long as there was 50% Canadian content :)

[sclitheroe]

If people want this, they'll need to accept pay-per-byte metered internet in my opinion. On-demand streaming like Netflix places far, far more demand on the broadband infrastructure than regular broadcast television, which is essentially multicast (a couple hundred streams or so delivered to tens of thousands or more outlets simultaneously), so the infrastructure cost of the broadband is going to be much higher per-capita to deliver, both downstream to your home, and upstream at the provider's head end internet connection.

That's the very first step in all of this - if the consumer won't bear the cost of every byte of bandwidth consumed, it means the broadband companies will turn around and ask each internet channel to pay back some of their advertising and subscription revenue to offset distribution costs, and we'll be right back where we started.

[rubecube]

If people want this, they'll need to accept pay-per-byte metered internet in my opinion. On-demand streaming like Netflix places far, far more demand on the broadband infrastructure than regular broadcast television, which is essentially multicast (a couple hundred streams or so delivered to tens of thousands or more outlets simultaneously), so the infrastructure cost of the broadband is going to be much higher per-capita to deliver, both downstream to your home, and upstream at the provider's head end internet connection.

That's the very first step in all of this - if the consumer won't bear the cost of every byte of bandwidth consumed, it means the broadband companies will turn around and ask each internet channel to pay back some of their advertising and subscription revenue to offset distribution costs, and we'll be right back where we started.

It really depends. I watch about 4-5 different TV shows, but most of them are on at different times of the year (Mad Men, Breaking Bad, Walking Dead, Eastbound and Down, etc). It basically breaks down to maybe an hour or two of TV per week, plus a soccer game and, during football season, 8 hours of football on a Sunday. That's maybe 20 GB of bandwidth/month, and that's probably being generous.

[Titan]

If people want this, they'll need to accept pay-per-byte metered internet in my opinion. On-demand streaming like Netflix places far, far more demand on the broadband infrastructure than regular broadcast television, which is essentially multicast (a couple hundred streams or so delivered to tens of thousands or more outlets simultaneously), so the infrastructure cost of the broadband is going to be much higher per-capita to deliver, both downstream to your home, and upstream at the provider's head end internet connection.

That's the very first step in all of this - if the consumer won't bear the cost of every byte of bandwidth consumed, it means the broadband companies will turn around and ask each internet channel to pay back some of their advertising and subscription revenue to offset distribution costs, and we'll be right back where we started.

At least in this case I would be paying for what I am actually consuming. The current model has me paying for 80-95% of the total product that I do not watch and could care less about. I think this whole concept has a ton of potential and if anti-competitive laws in the US get used then that could substantially effect the outcome. Not unlike the Microsoft situation.

[Azure]

In many cases, the cable providers are the same companies that provide internet, which is why I don't get why it would be so hard for them to offer up the channels people want on PPV.

[HELPNEEDED]

In many cases, the cable providers are the same companies that provide internet, which is why I don't get why it would be so hard for them to offer up the channels people want on PPV.

They eventually will. The game that is being played is called "prisoners dillema" both sides are figuring out which scenario is mutually beneficial.

[rubecube]

I'd have to think that even if Intel was able to come out with this, the CRTC would block it in Canada in a heartbeat.

[nfotiu]

Sports is the big sticky wicket in all of this. Most of the entertainment networks and programming are either mostly advertising supported (ie, FX, A&E, History, Discovery, AMC) or a la carte pay supported (showtime, HBO). Both of those models could move easily to an a la carte model being sold by whoever. The problem is all these new massive tv deals for pro and college sports are being signed based on the the fact that ever cable/dish subscriber in the US is paying north of $20 a month in carriage fees to ESPN, TNT, TBS, NBC sports, CBS sports, and all the local sportsnets, and the vast majority of those subscribers don't even watch those channels. So Disney is not going to give any of their Disney channel, or ABC programming away to anyone not willing to force every customer to pay 7 dollars a month for ESPN, and Fox is going to give their's away to anyone not willing to make every customer pay 5 dollars a month for their RSNs, same with Comcast/NBC, and so on.

Something's got to give though, as these RSNs and ESPN get more and more greedy, the model will break itself, either by requiring regulation or too many people will move to piracy.

[sclitheroe]

I'd have to think that even if Intel was able to come out with this, the CRTC would block it in Canada in a heartbeat.

Just like Netflix, iTunes, Rdio, etc, eh? Took less than 60 seconds on Google to accurately determine that the CRTC has no mandate over online broadcast:

http://www.crtc.gc.ca/eng/archive/2009/2009-660.htm

http://www.heenanblaikie.com/en/Publications/2012/Supreme-Court-of-Canada-Rules-that-ISPs-Are-Not-%E2%80%9CBroadcasting-Undertakings%E2%80%9D.pdf

Internet delivered content is point-to-point communications between the user and the provider. The CRTC has no mandate for such a scenario (thank goodness - imagine being forced to have CanCon restrictions on surfing..)

[nfotiu]

I'd have to think that even if Intel was able to come out with this, the CRTC would block it in Canada in a heartbeat.

They wouldn't let American companies sell programming directly to Canadians when the Canadian rights to those programs are owned by someone else, nor should they. Even if they did, the Canadian content owners would rightfully sue the content providers. Although I'm sure there'd be a Canadian version.

[sclitheroe]

They wouldn't let American companies sell programming directly to Canadians when the Canadian rights to those programs are owned by someone else, nor should they. Even if they did, the Canadian content owners would rightfully sue the content providers. Although I'm sure there'd be a Canadian version.

See above. There is zero chance the CRTC is going to begin blocking access to IP addresses because of content regulations.

[nfotiu]

See above. There is zero chance the CRTC is going to begin blocking access to IP addresses because of content regulations.

The content providers would block it though or at least try. Same as how Netflix works, where Canadian rights have to be negotiated separately.

[nfotiu]

If people want this, they'll need to accept pay-per-byte metered internet in my opinion. On-demand streaming like Netflix places far, far more demand on the broadband infrastructure than regular broadcast television, which is essentially multicast (a couple hundred streams or so delivered to tens of thousands or more outlets simultaneously), so the infrastructure cost of the broadband is going to be much higher per-capita to deliver, both downstream to your home, and upstream at the provider's head end internet connection.

That's the very first step in all of this - if the consumer won't bear the cost of every byte of bandwidth consumed, it means the broadband companies will turn around and ask each internet channel to pay back some of their advertising and subscription revenue to offset distribution costs, and we'll be right back where we started.

It gets absorbed into the content provider's cost, and sure some of that cost gets passed to the consumer in the subscription fees.

However, Netflix is getting a lot more efficient about how this is delivered anyway:

http://blog.netflix.com/2012/06/announcing-netflix-open-connect-network.html

But, it still costs pennies to deliver the content compared to what everyone is spending for carriage fees for channels they don't watch.

[Slava]

They eventually will. The game that is being played is called "prisoners dillema" both sides are figuring out which scenario is mutually beneficial.

Spell it out for me here....what's the dilemma? I'm familiar with prisoners dilemma, but I don't see how it applies here. That could be just me though!

[sclitheroe]

It gets absorbed into the content provider's cost, and sure some of that cost gets passed to the consumer in the subscription fees.

However, Netflix is getting a lot more efficient about how this is delivered anyway:

http://blog.netflix.com/2012/06/announcing-netflix-open-connect-network.html

But, it still costs pennies to deliver the content compared to what everyone is spending for carriage fees for channels they don't watch.

That doesn't address the single most constrained and expensive part of the network. Netflix peering with the ISP's at the head end helps upstream, but it's the downstream network to the consumers that has to do the brunt of the heavy lifting, and that is the most bandwidth constrained. That's where the real costs to the ISP's are - maintaining, upgrading, and rolling out the distributed network that exists between their data centers and the consumer.

Netflix essentially gets that part of the network for free, irrespective of the peering arrangements they are willing to make through OpenConnect.

And that's why we still need pay-per-byte internet - the ISP's need to be able to recoup the costs associated with delivering content from places like Netflix that Netflix doesn't pay for. Otherwise, you are right back to a situation where the ISP's are deciding which providers to allow on their network, based on how much the providers pay into the bandwidth costs for the load they create, which is the antithesis of net neutrality.

[arsenal]

Rather than a pure pay per channel model, you could a hybrid. Still pay for channel packs, but you choose which channels are included rather than the cable or internet company choosing.

Say standard local stations = $10/month
HD Package includes 5, 10, 15 channels of your choice = $10/$15/$20
and so on.

It is still very close to the current model, but it gives more power to the user to select which channels they want to subscribe to rather than the cable companies packaging channels together. Then it's up to the cable provider to distribute funds to channels from the subscribers funds. You would very quickly see unpopular channels go away, and the most popular ones will probably increase in revenue.

[nfotiu]

That doesn't address the single most constrained and expensive part of the network. Netflix peering with the ISP's at the head end helps upstream, but it's the downstream network to the consumers that has to do the brunt of the heavy lifting, and that is the most bandwidth constrained. That's where the real costs to the ISP's are - maintaining, upgrading, and rolling out the distributed network that exists between their data centers and the consumer.

Netflix essentially gets that part of the network for free, irrespective of the peering arrangements they are willing to make through OpenConnect.

And that's why we still need pay-per-byte internet - the ISP's need to be able to recoup the costs associated with delivering content from places like Netflix that Netflix doesn't pay for. Otherwise, you are right back to a situation where the ISP's are deciding which providers to allow on their network, based on how much the providers pay into the bandwidth costs for the load they create, which is the antithesis of net neutrality.

I guess it depends on the area. Most urban and suburban areas in my state have a choice between fiber to the house and docsis 3.0, so that infrastructure can easily handle things. Plus if it is over the top iptv, there are a lot of efficiencies that can be done by multi casting linear tv. Not to mention that everyone is already downloading and streaming boatloads of netflix, hulu, amazon and pirated material.

[nfotiu]

Rather than a pure pay per channel model, you could a hybrid. Still pay for channel packs, but you choose which channels are included rather than the cable or internet company choosing.

Say standard local stations = $10/month
HD Package includes 5, 10, 15 channels of your choice = $10/$15/$20
and so on.

It is still very close to the current model, but it gives more power to the user to select which channels they want to subscribe to rather than the cable companies packaging channels together. Then it's up to the cable provider to distribute funds to channels from the subscribers funds. You would very quickly see unpopular channels go away, and the most popular ones will probably increase in revenue.

Doesn't really work out that way though. I don't know the exact numbers, but I'd guess if you looked at a typical American television bill without equipment rentals or premium channels, it would be about 200 channels for $40-50. About $20 would go to a handful of sports networks, about $5 would go to the other 190 or so channels, and the rest would go to the carrier for infrastructure, operating costs and profit. The vast majority of channels, you are not really paying for anyway, they make their money by being available for free and are ad supported.