IN THE land of free enterprise and the home of discount shopping, there can sometimes be an appalling lack of competition. High-speed access to the internet is one. Cable television is another. The reason is that in America cable-television companies, which provide a lot of the high-speed access, do not want their customers to cancel their contracts and watch television over the internet instead. Yet a growing number of people are poised to do just that.
At your correspondent's home-from-home in Japan, he can get broadband at 160 megabits a second from his local cable company for Y6,000 ($60) a month. Compare that with broadband prices demanded by cable companies in America. As they slowly roll out the latest version of their transmission technology, called DOCSIS 3, Comcast and Cablevision want up to $140 a month for a stingy 50 megabits a second. Meanwhile, Time Warner Cable remains in the dark ages with its Road Runner service dribbling out three megabits a second (if you are lucky) for $35 a month.
Selling broadband connections to the web is the most profitable business for cable companies. They also have better--and cheaper--technology than the phone companies and mobile carriers for doing so. It costs only around $100 a home for the cable companies to upgrade their networks to the latest DOCSIS 3 standard--and that includes providing each customer with a new high-speed modem.
Wiring a neighbourhood with optical fibre--as phone companies like Verizon are doing--costs more than $1,500 a home. In the few places where it can supply the service, Verizon charges $165 a month for 50 megabits a second. In short, the cable companies could easily use their cost advantage to grab a bigger chunk of the lucrative broadband market.
But they are not doing so because they are afraid of the consequences. Cable-television companies make money by selling packages of channels. The average American household pays $700 a year for over 100 channels of cable television but watches no more than 15. Most would welcome the chance to buy only those channels they want to watch, rather than pay for expensive packages of programming they are largely not interested in.
They would prefer greater variety, too--something the internet offers in abundance. A surprising amount of video is available free from websites like Hulu and YouTube, or for a modest fee from iTunes, Netflix Watch Instantly and Amazon Video on Demand. Prices can be as little as a dollar for a television episode or as much as $24 for a new release of a film in high-definition. But the best thing about watching television over the internet is you pay only for what you want--and a lot of the programming is free if you are prepared to wait for a day or so after it has been broadcast.
Consumers' new-found freedom to choose has struck fear into the hearts of the cable companies. They have been trying to slow internet television's steady march into the living room by rolling out DOCSIS 3 at a snail's pace and then stinging customers for its services. Another favourite trick has been to cap the amount of data that can be downloaded, or to charge extortionately by the megabyte.
Yet the measures to suffocate internet television being taken by the cable companies may already be too late. A torrent of innovative start-ups, not seen since the dotcom mania of a decade ago, is flooding the market with technology for supplying internet television to the living room.
Even television makers are getting into the act. The latest digital sets from LG, Panasonic, Samsung, Sharp, Sony and Vizio come with Ethernet sockets ready to be connected to the internet, so they can download video from YouTube, Netflix, Amazon and the like.
The video-game industry is also cashing in on the internet-television boom. Microsoft's Xbox 360 can now stream films and television shows from Netflix. Likewise, you can rent films and television episodes using a Sony PS3 game console. Nintendo and Sony have also done deals with YouTube to gain access to its huge repository of web video. Meanwhile, set-top boxes such as Apple TV, Roku, TiVo and Vudu are all jockeying to become the television set's primary gateway to the internet.
Eventually, all these external services will be built into the television set's motherboard. In the meantime, the specialised boxes do a better job of finding and fetching video from the internet.
At present, the slickest is unquestionably the $149 box from Vudu, which can access over 7,000 films (three times more than Apple TV) as well as zillions of television shows, YouTube offerings and podcasts. With its roomy 250 gigabyte hard-drive, it can even provide high-definition films in full 1080p glory, just like a Blu-ray disc player.
At $100, the Roku box lacks a hard-drive but is simplicity itself to set up and use, while offering a treasure trove of content thanks to arrangements with Netflix and Amazon. The $229 Apple TV box is, in effect, an over-sized iPod that connects the television set to the internet to provide access to 2,500 films and 30,000 television episodes for a fee.
An interesting newcomer is the SageTV HD Theater. This works like a TiVo video recorder with an integrated programme guide, but minus the subscription fee. Plugged into a television, the little Sage box plays high-definition videos, photos or music stored on a computer, or downloaded directly from YouTube, Hulu or dozens of other sources of free content. Your correspondent has finally laid his hands on one, and will be testing it over the next week or two.
He is also building an open-source web-television box of his own, based on a Shuttle PC. The tiny computer is to be loaded with the Ubuntu version of the free Linux operating system and will run an open-source application called Boxee. Although it is still under development, Boxee has unnerved lots of internet-television providers. Hulu has even demanded that its content be removed from Boxee's offerings. But the open-source community that has taken Boxee to its heart is far too smart to let Hulu spoil the fun.
The interesting thing about Boxee is the way it combines the social networking of a Twitter with the power of a browser like Firefox to funnel internet content recommended by friends to your television screen. As it does so, it bypasses aggregators like Hulu that seek to make money from inserting advertising slots into content downloaded from their sites. Your correspondent thinks Boxee will be one of the most disruptive things to happen to television in ages--and not before time.
Source Citation
"Down the tubes; Broadband communication; Watching television over the internet." Global Agenda (2009). General OneFile. Web. 21 Mar. 2010.
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