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HDTV Almanac - Willing to Pay for Internet TV
by Alfred Poor on July 19, 2010 Categories: Internet HD Video, Service & Repair

As I wrote at the end of last month, the new Hulu Plus service for $9.95 a month stands to disrupt television viewing habits. It provides more content that does not expire, and it’s all offered in 720p high definition.

As it turns out, more and more people view this sort of offering as appealing. Some people have the attitude that everything on the Internet should be accessible for free, but that attitude appears to be changing. A new study by The Diffusion Group (TDG) polled broadband users about the new TV Everywhere initiatives from subscription television services such as cable and satellite. The concept is that existing customers will be able to access the same programming that they receive at home, but can get it as streaming video over the Internet. The TDG survey found out that 60% of the users are enthusiastic about the idea, and a total of 34% would be willing to pay at least $5 a month extra for the privilege.

On the one hand, TV Everwhere could be an important new source of revenue for these services, which are faced with increasing costs of maintaining their physical infrastructure. On the other hand, this sort of Internet streaming service could train their subscribers to get video content online. This could have the unintended consequence of users discovering that they can get enough of what they want from other sources that cost a fraction of their cable or satellite subscription fee. With those fees routinely running $100 a month or more just for television, a lot of households might be willing to chop that to $10 a month, and settle for what they can get from Hulu Plus or Netflix.

Posted by Alfred Poor, July 19, 2010 6:00 AM

Reader Commentary

Reply
Roger Halstead • Jul 21, 7:13pm
At present, at least for me, the Internet just isn't reliable enough for me to pay to watch streaming TV. If I can download the program and watch it later would be different and there are quite a few where that can be done. They also need at least 1080i, if not 1080p.

However, I have to wonder about band width availability as the video providers and networks move to more content being available via the Internet, particularly with some major ISPs throttling throughput. With out Net Neutrality, those same providers can throttle content provided by the competition.

Some ISPs are calling users who use the bandwidth as it was advertised, bandwidth hogs, (which they are only using what they paid for...whether the ISP can deliver it or not) With these companies, the end user would be hard pressed to watch more than a few movies per month. Once the capability, bandwidth, and user base expands I expect to see those prices tier based on band width and much more expensive than at pre...
Reply
gartrste • Jul 22, 4:16am
However, I have to wonder about band width availability as the video providers and networks move to more content being available via the Internet, particularly with some major ISPs throttling throughput. With out Net Neutrality, those same providers can throttle content provided by the competition.

Yup, I'd say that was their initial motivation for their endless calls for the ability to "shape traffic". That power can be used for far more...wicked...purposes, but I do believe that is their immediate driver.

When the FCC betrayed rural America and forced the transition to the shorter-range, line of sight signal of digital TV, that put Big Cable in the catbird seat, for many Americans found themselves with no way to get "free" TV. I know the price for my cable television went up almost immediately after the transition.

Yup, it took a big hit about the same time I was discovering that even multistory antennas would no...
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alfredpoor • Jul 22, 6:24am
Various thoughts and responses:

Cable prices have gone up steadily. I don't think it's linked to any single event; they're saddled with an aging infrastructure and agreements that require blanket coverage for the communities that they serve. Their satellite and fiber optic competition are not encumbered with these problems.

The market will determine whether bandwidth throttling survives or not. Some providers offer truly unlimited data transfers; competition may force others to follow suit. I believe that cable companies will become information pipeline utilities within five to ten years. They will get out of the rebroadcast of content business, and just offer bandwidth the way the electric company offers electricity. You will either pay on a simple metered basis, or there will be flat rate monthly fees plus usage beyond your monthly limit. I expect the flat rate plans will win, so you can get a discount when you use more.

Cable is in a tough position, because it cannot surviv...
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Roger Halstead • Jul 22, 11:59am
I pretty much agree that cable is going to have a rough road to hoe. They are using an outdated business model to support what is rapidly becoming an outdated and limited technology.
I do think the move to Digital was the right direction to go for OTA. I realize the results of that change depend on the location, but for me, I get almost twice as many stations as I did before the change.
Admittedly my antenna system is not typical, but it is the same system we had for analog.

Whether throttling proves viable in the long run remains to be seen. Typically the cable companies and many ISPs have over sold available bandwidth, just as the airlines overbook. Many, if not most, could not support a fraction of their uses if they used all the band width they paid for. With customers watching more and more shows...and movies their bandwidth usage is going to be well into the gigabyte range. Quite likely many will be into the hundreds of gigabytes. I think it will come down to using eith...
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alfredpoor • Jul 22, 12:19pm
I don't know of any utility that has sufficient capacity to serve all their customers if they were to use the service in large volume at the same time. We get loss of water pressure on water systems, brown-outs or black-outs on electrical systems, and there's another utility that will just back up if overused (or it rains too hard). So I don't have a problem in theory with cable selling more subscriptions than it has capacity to serve at once, but I agree that in many cases they don't have nearly enough capacity for the number of subscribers. And this will get worse as consumers want to increase their Internet usage.

Alfred...
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Roger Halstead • Jul 22, 2:18pm
I have no problem with the so called over booking *IF* that is part of the contract. Statistically at any specific time of day they will have a certain % of their users on line. They should have enough band width to handle all of those users. They will also have a specific % of users on line 24 X 7 and again they should have the bandwidth. However as the networks along with video and music providers gain more customers both of these groups are going to increase in size so the overall percentage on line at any given time will increase. Few, who sign up for these services are going to tolerate pauses in video and audio playback. Last night I was watching some streaming video, and had to pause it at least 6 times for the data to catch up with the player near the end. Otherwise the image was moving in steps, the audio would get out of sync, and the image would even pixelize at time. Pausing the payback for even 5 seconds might give me up to a minute of good viewing before it went bac...
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alfredpoor • Jul 22, 2:41pm
Pausing the payback for even 5 seconds might give me up to a minute of good viewing before it went back to playing "catch up". "To me" that would be unacceptable for a pay service and that will be happening unless band width capacity is increased substantially.

I agree that this is unacceptable, Roger. It is possible that your ISP is at fault, but there are also other bottlenecks that could be the source of the problem, from your computer all the way back to the host server.

It doesn't matter where the blame lies, however; consumers aren't going to tolerate that sort of performance. So everyone involved in the delivery chain will have to work together to make quality of service (QOS) the top priority for streaming content delivery.

Alfred...
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gartrste • Jul 22, 4:40pm
Surprising, to see people claiming that Big Cable is the poor little victim faced with aging infrastructure and outmoded business models...because it flies in the face of the facts. Consider Comcast, whose clamor for the ability to "throttle" and "shape" traffic is astounding:

"Comcast's profit climbs; demand increases for broadband" (MarketWatch, Feb. 3, 2010, 4:16 p.m. EST)

http://www.marketwatch.com/story/comcasts-profit-more-than-doubles-2010-02-03

By David B. Wilkerson, MarketWatch

CHICAGO (MarketWatch) -- Comcast Corp. said Wednesday that its fourth-quarter profit more than doubled as costs declined and it gained new subscribers for its digital video, broadband and telephone services.



Philadelphia-based Comcast (CMCSA 18.82, +0.47, +2.56%) (CMCSK 17.82, +0.47, +2.71%) said it earned $955 million, or 33 cents a share, compared with a profit of $412 million, or 14 cents a share, in the year-earlier per...
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ccclvib • Jul 23, 3:42pm
Here we go again talking about one of my favorite(?) rants re broadband. I receive DSL from AT&T, and I'm close enough to the C.O. that my signal is consistently around 1.1K download. And yet... I can't watch a live CFL game on ESPN3 without the regular stoppages because the buffer has been overrun and the just-as-often skips because the buffer has gotten out of sync. I'm convinced the whole process is going to have to be much better before I can accept watching a program of any length on my computer or TV from broadband will be worth it. Now that U Verse is available here, and the broadband portion is considerably faster, maybe I'll be convinced, but I'll believe it when I see it....
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Roger Halstead • Jul 24, 5:25am
When it comes to the poor speed, it is possible to get the IP of the source and run a "Tracert" to check all sections and nodes in use while trying to stream or download although just running that app changes the environment. It's also possible to check the performance of the computer.

As far as Comcast they are more than just a cable company and are quite diversified across the entertainment industry. Much of their profit from cable comes from cutting corners and poor service as they are rated quite low by their customers. But like most cable companies in any area they are pretty much a monopoly which leaves customers looking for better. So far, I have nothing to complain about DISH Network, or Charter cable. Both have fixed what few problems I've had in short order and seemed genuinely interested in seeing that the problems were fixed promptly. Both called back two days later to make sure I was satisfied.

Here I have the latest multi-core computers which have enough horsepo...

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About Alfred Poor

Alfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets.

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