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Time Warner: metered broadband billing is not the answer!

This post is also available at Media 3.0 by Shelly Palmer

2008 is off to the races; January is not even over yet and we’ve already seen some major announcements in the race to deliver IP video and to the living room. The combination of CES and Macworld has given us much to be excited about, including:

1) Xbox Live Video’s announcement with ABC/Disney for programming plus the announcement to bring MGM movies to Xbox LIVE. With over 10 million Xbox Live subscribers and 17 million Xbox 360’s sold, we can expect to see more programming and movie content coming soon. The smart money would be on NBC programming to Xbox, which recently announced an Olympics ’08 website built on Siverlight.

2) Netflix announced unlimited online movies as part of their $16.99 per month subscriptions for 3 physical DVD’s at a time, and has previously announced a set-top box in conjunction with LG.

3) Apple TV Take 2 launched with a reduced price ($229 down from $299) and all six major movie studios on board. Pricing will be 2.99 for old titles, $3.99 for new releases, and movies are offered are HD (720p for memory) and can be viewed within 30 seconds after purchase (assumes a broadband connection).

Right when it was starting to feel like the living room revolution was finally happening, we witnessed some news that underscores the complexities of this value chain and what could ultimately undermine and undue the promise of IP video: Time Warner announced a pilot project in Beaumont, Texas in which broadband cable customers will be charged by a metered system. In other words, you pay by the bit. While this could mean lowered bills for anyone using the Internet primarily for email and basic web surfing, the New York Times reports that those customers that want to download a movie from Apple for example could pay upwards of $30 in bandwidth fees! This is clearly not a sustainable model for consumers (or Apple, Netflix, Microsoft, etc).

For anyone wondering what Time Warner is smoking, let’s take a step back. This is a pilot project for a reason and while the press and bloggers jumped all over the announcement, we all need to better appreciate the position of the ISP in the IP video revolution – basically they’re subsidizing it for consumers. The mass market adoption of IP video in the living room means a surge in bandwidth consumption, especially when we consider the impact of HD, and do ISPs get any incremental income from this uptick in usage of their network infrastructure? Of course not. Consumers expect it as a part of their monthly service. But if usage scales to a point where the ISP’s infrastructure cannot handle, everyone loses (anyone remember the early days of broadband?).

So while many bloggers took shots at Time Warner for what looks like monopolistic greed at its finest, the flip side of the coin is that Time Warner is simply trying to figure out how to pay for the major router and switch upgrades that will be required in the coming years to meet the growing demand created by high bit rate IP video. So what is the answer? Is there a happy middle ground? I believe so, and it is not via metered billing.

What I think would be fair and what we can expect in the not-so-distant future are new tiered service plans for broadband, especially from the cable companies who will be losing share to IPTV and emerging devices like Xbox and services like IPTV that disintermediate the need for cable television. I think we’ll see an entry-level broadband service in the sub-3.0 Mbps for $10-15 per month, a 3-10 Mbps services in the $20-40 per month range, and new “premium” broadband offerings that are faster and designed to support IP (and HD) video throughout the house in the $60-100 per month range. Instead of metered billing, those consumers on the entry-level plans that are watching IP video can still try to do so, but the extra bandwidth and quality of service will specifically not be there.

I Love Xobni

For anyone that has Outlook open all day, you absolutely must download and install Xobni (Inbox backwards :) @ www.xobni.com. It is absolutely friggin awesome - all that talk about Inbox 2.0 from Hotmail and Yahoo is interesting, but this is the real deal if you use Outlook. Microsoft should just buy them right now and bake it into future releases. An excellent writeup can be found here:

http://www.readwriteweb.com/archives/xobni__social_network_in_your_inbox.php

Ok, I'm done nerding out now.

Facebook Beacon from the other side

Standing over my boss' desk today, she toggled over to her Facebook page, and there I was, front and center, promoting Blockbuster:

First, yes, I do subscribe to Blockbuster.com and until their recent price hike, thought of it as a Netflix-killing play. Second, yes, I did download and install Movie Clique, the Blockbuster.com application within my Facebook profile, so I could a) check it out, b) manage my Queue within Facebook, and c) potentially share movie-related stuff with friends.

Now that I'm done with the disclosures, take a good look at the picture above. I've circled the area in question in red and moreover, highlighted the real suspect area in yellow. Doesn't this look like I'm playing a very active role in the sponsorship and endorsement of Blockbuster? I had read much to-do about Beacon and the privacy issues, but being on the other side and seeing what it looks like is rather shocking and a bit of an embellishment in my role of the Blockbuster free trial offer.

Now if my boss clicked on this link, and then I got compensated, that would be another story entirely...

Google Reader Sharing 2.0

Initial privacy/management issues with the rollout aside, being able to share Google Reader and the corresponding feed created for you is a very cool thing. While Google has responded to the outcry created by not being able to manage your friends with some basic functionality to include or not include them in the Share-Reader experience, a Reader-Share 2.0 should:

• Let me group my friends and managed what I share with whom! I have a group of colleagues that I do not want to share personal things with, and vis-versa.
• Enable me to permanently share a particular feed, instead of having to click share on any given article.
• Give me incoming and outgoing options for "Hiding" a friend. Specifically, perhaps I want to share with friends but don't want to receive their shared feed, or vis-versa.
• Integrate with other RSS Readers - honestly I'm not technical enough to know if this is even possible, but it sure would be sweet.

Is content viewed for the first time via Sling being rebroadcasted?

I was watching NFL highlights, wondering whether the Patriots could actually go unbeaten this year, and for the hundred-millionth time, I heard:

"This telecast is copyrighted by the NFL for the private use of our audience, and any other use of this telecast or of any pictures, descriptions or accounts of the game without the NFL's consent is prohibited."

Of course it is, but given the availability of recording technologies whether they be VCRs or DVRs, there is no way the NFL can ever enforce such a policy for personal, non-commercial use.

Later that evening, I selected a movie OnDemand from Comcast and had to stare at the following graphic for a few seconds before enjoying my film:

I couldn’t stop thinking about both these warnings as it pertains to emerging viewing technologies, particularly time-shifting and especially place-shifting. If I record an NFL game or a movie to my DVR, then view it via my Sling Box halfway around the world, am I reproducing, retransmitting, reusing or redistributing copyrighted material? Would a piece of content that is being viewed for the first time via Sling be considered rebroadcasted or retransmitted, or would this be the first broadcast and a continuation of the first transmission? What about if I have already seen the content but want to view it again via Sling because it is saved on my DVR? Would this be a rebroadcast?

My expertise is not copyright law. While it is interesting to ponder such semantics, my best guess is that the wealth of legal precedent surrounding tape players, VCRs and copyright law would extend to DVRs and Sling Boxes, which essentially allows and individual to take copyrighted content they own and make a copy of it or change its form to consume it through another mechanism. As long as the individual is not profiting in any way by doing so AND so long as the original content owner is not losing revenue by such actions and others getting a free ride, it would be kosher.

So much for my idea of starting a P2P Sling network.

The reality is that copyright law was not written with the Internet in mind, and new technologies like, place-shifiting and IP/mobile video create new distribution and viewing options. Although the business models are still very unclear around many of these technologies, what is very clear is that traditional television is no longer the only way to view content.

It will probably be at least a couple years before the dust settles between Viacom and GoogTube, whether Hulu.com proves viable and profitable, and if other movies are released direct to the Internet first, bypassing the theatre (see previous blog on Jackass 2.5). Additionally, innovations coming from the living room, especially from the gaming console players, are coming soon. The networks know this. The infrastructure companies (cable, phone, and mobile) know this. The studios know this. The writers know this.

Hopefully, as content creators and distributors sort out the ins and outs of ownership, viewing, and compensation, copyright law gets updated alongside the new economic paradigms that emerge. Otherwise, EchoStar just paid about $380 million too much for technology whose sole function is “rebroadcasting” content over the Internet.

Wikia - what's the point?

So several blogs came out today talking about Wikia's much anticipated launch. I took a few moments to check out www.wikia.com, and must say, I don't really get it. After an initial search function, you are taken to a results page that is fundamentally not different from Wikipedia except with ads. There's even a tab whereby you can search in Wikipedia. Why would anyone bother going here instead of Wikipedia first?