TV is Dead Long Live the Internet
HD online is coming your way. HD with interactivity, simplicity and served to you from the edge, then transmitted to your screen of choice.
Check this out, Tipping point of HD/IP, High definition video over the internet. HD with interactivity will revolutionise the TV industry. Same thing that happened to media and print is about to happen to TV.
Which amongst the pipe owners, the pipe improvers, content and service providers and subscriber database owners will outperform? Who will get the lions share of TV advertising revenue coming online? What will happen to the current TV companies? I hope they have a transition plan.
Yes, it’s going to take years to work through the technology adoption cycle, but the consequences over the next five years are huge, as Paul Sagan outlines.
Disclosure: Long Akamai and Harmonic. Pick your own company to profit from this digital online sea change.
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Hi Dean, a few points from a technologist (Aussie slant on these points below):
i) until we have NBN, there is not sufficient installed bandwidth and cost is too great
ii) service providers will have to be setup locally to host/cache this data, because international pipes are not large enough
iii) there are IPTV trials springing up everywhere, and whilst I don’t deny it is the future I would expect it is 8-12 years away at very best.
I arrived in Aus from the UK eight years ago where we’d had 15+ channel digital free to air ‘freeview’ with PVR recorders for approx 150gbp. Until this month these very recorders were 600AUD. Now, technology like the PS3 is making this acceptable to the masses. Now if such basic technology such as that takes the time, why would IPTV be any different, especially given that i) IPTV needs to be explicitly paid for by a subscriber, and ii) technology demands are so much greater than just buying a set top box.
IPTV requires huge bandwidth for 720p+ quality. Now that the general public are becoming used to good quality on the HDTVs why would they downgrade to take any less than HD over the net. It isn’t like it is free like illegal downloads.
This will interest you: http://torrentfreak.com/bbc-trials-bittorrent-powered-hd-video-streaming-091203/
Thanks a lot for sharing your thoughts Darren. You are spot on that IPTV is not going to happen overnight and that Australia is slow to adopt a lot of technology. This year I was able to start using a pin instead of signing when using my credit card. When I moved to the UK in 1999 that was almost mandatory. IPTV will take longer in Australia than the US or Europe as the available revenue is so small. I think your 8-12 years will be bettered as technology adoption cycles are accelerating.
However, my real interest is not in watching IPTV it is profiting from the move from current digital terrestrial to HD online. That and the explosion of bandwidth will start in earnest soon and within two years we should see early adopters getting on board.
Here is a quote from iiNet, “More than half of our broadband2+ customers experience download speeds in excess of 10,000kbps “ that more than twice as fast as needed for 720p+. One of the main points in Sagan’s presentation is that HD online will offer the same quality and add interactivity. You don’t need a PVR if all the shows, movies and sport are online!
Thanks for th link, I’ll check it out once I get the kids to school.
Darren if you’ve got the time I’d like to read your views on the coming bandwidth consumption explosion. I think we’re just starting the J curve and like processors, hard drives, memory etc we will look back and laugh about our current download limits. “I remember when I had a 5GB limit!, back in 2009.” In 8-12 years I’d guess that to be at least 100x higher, maybe 1000x.
[...] terms for a French philosopher. Watching this talk from the CEO of Akamai (thanks to Dean over at Fusion Investing), it seems that we are about to make the next great leap [...]
Hi Dean,
No worries at all. Yes, it is quite amazing re ‘chip and pin’, from what I understanding it would be to the bank’s benefit given I believe they hold the liability for any losses. Australia did have one lead however, with a universal EFTPOS system with pin, whereas the UK stuck with Switch/Maestro signatures for so long. I also think Australian banks are slightly ahead also, given many banks provide authentication fobs or sms methods that my two UK banks do not (however, don’t get me started on bank fees etc, but I do use the alternatives that don’t charge!)
I agree, tech cycles are accelerating, and technologies such as Iphone (incl the apps and the micro-payment system), 3g telco and broadband are becoming game changers.
With IPTV my view is the likes of iiNet will have to partner with content providers to show exclusive content. This includes not only films but also the big mini series like Lost/Heroes et all. I believe the only way this could work would be to establish a JV in Australia, however we will lag Europe and the US by 3 years in implementation. Their adoption will be driven by the need to diversify away from piracy (bittorrent et al). What most interests me here is how revenue will be generated to pay for the content. As we know, google has been another game changer in this regard, with its huge revenue from ad provision. One thing I can imagine in 10-15 years is that programs will be broadcast (or even chosen if true customer driven IPTV) and ad’s will be customized for the consumer, but actually placed surreptitiously within the content (eg beer labels changed in real time etc). This is already happening in video games where billboards are changed according to content.
As a long-term and very satisfied iiNet customer myself my modem sync’s at >20mbps, however sustained data rates are approx 8mbps. As we speak I’m downloading a TV episode in the background on my free capacity on Tivo to see firstly how fast they’re enabling it, but also to see if the quality is appropriate.
I have to own up, I didn’t watch the clip before I posted my previous message. I am most impressed by Akamai, I have little idea how their infrastructure works, I believe it would be peer-to-peer, so wonder if bittorrent (eg BBC link before) is the alternative. If so, then it would put the control with the content providers.
Re my views on Bandwidth explosion, I agree. I think all technology explosion is exponential, akin to Moore’s law of processor speed, but this has always been the same case. Unfortunately these download limits/capacity will only be serviced supply side, and this might present many more opportunities for the likes of Pipe Networks that can connect continents etc.
I wonder if the government has been savvy in its choice of NBN. Given access costs are probably at least twice what I pay for similar speeds, these would need to be subsidized. By proposing that Telstra splits from its Foxtel arm I might have to give them some credit, since it might encourage other content providers to step into the fray and provide an alternative content approach funded by advertising/other means (eg micropayments) that would in-effect subsidise the $80/month expected cost of an NBN subscription.
Suffice to say, I might have to eat my words somewhat, in the time it took me to write this (~7 min) I received a 700mb download from Tivo via iinet. Not full HD in quality, but it certainly is above what I have been used to in other services. Alas it wasn’t streamed like Akamai’s example, and yes, the size is relatively small compared to HDTV but I imagine that we could be there in ~7 years. I would probably wager that the 2016 Olympics will be the big turn on.
BTW, love your blog
Wow Darren, thanks a lot for the thoughtful reply and wonderful comment on my blog.
Akamai use a distributed system of >50,000 servers. Many of those are hosted within major ISPs. So instead of a users content request going all the way back through the internet core it is often delivered from the ISP. Akamai also bought a P2P company a couple years ago and has been developing solutions based on P2P. That’s their content delivery network (CDN) side. Their other business is value added services like application acceleration. Here are Akamai’s patents which if you’re part geek you may enjoy looking at, I did.
how [will] revenue will be generated to pay for the content? I think Sagan is right and the revenue will come primarily from advertising with subscription for sports, new movies etc. You’re right that we’ll be a few years behind the US and Europe and micropayments will be part of the revenue model. iTunes has shown micropayments to be an excellent model as people easily fork out $1.
Here is a chart of bit rates content is encoded in. http://blog.streamingmedia.com/.a/6a00d834518e1c69e20120a727dee0970b-popup . I expect we’ll see a steady increase in >2Mbps over the coming years.
[...] terms for a French philosopher. Watching this talk from the CEO of Akamai (thanks to Dean over at Fusion Investing), it seems that we are about to make the next great leap [...]
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