Crossposted from SCTE list:
From: Dean F. Meece Sent: Wednesday, November 30, 2005 6:50 PM Subject: Let us take IP and make it Wireless. Now.
Discussion for the SCTE floor: "Let us take IP and make it Wireless. Now."
There is a great paradox to the MSO vs. CLEC race to deliver ridiculous IP speeds to the customer's house.
We are constructing the infrastructure to remove the middle man from the video delivery business or phone business -- with the very thing we race to achieve. In the end, we may just be the pipe that delivers IP as fast as possible to the consumer. A utility like water, gas and power, not a tollbooth for content providers to get on our delivery network. What does this mean? A massive attack on our bottom line.
Think about college kids and teenagers, they're always the earlier adopters to technologies that will overtake the big picture business model within a generation. In case you need some frame of reference for what kind of a tidal wave is coming and industry shift is about to happen, look into periodicals and newspapers profitability and subscriber rates.
People under 30 do not read _print_ newspapers and magazines very much. If they do, they don't pay for them or it's because they don't have IP handy. Maybe your kid is the exception to the rule, but the trend is massively in retreat right now. They read them online, they get their media downloaded to their PDA's, or their laptops or PSP's or IPOD's now. Check out Audible.com -- you can get your daily news downloaded in MP3 format, and play it on your car as you drive to work on your MP3 player.
Environmentalists can cheer, but newspaper/periodical businesses are about to be destroyed. Exit middleman stage right.
How does the MSO still win here in this model? We deliver the IP.
Need another middleman analogy to the power of IP content delivery? CD's, DVD's manufacturing and retail distribution. Exit middleman again. We may have dealt the first blow by burying Blockbuster with VOD, but the next revolution is slowly taking up positions around us within the last few months. And it's gunning right at our VOD and Linear video distribution systems.
Apple finally has a feather in its cap that can pay the bills, keep the lights on and then some. They've turned themselves into the 21st century CD manufacturing and delivery system or "tollbooth" for audio content. Eliminating the physical CD and the retail stores that sell them. Now -- they're doing it with Video, completely skipping our entire VOD distribution system. You can download shows and watch them anywhere, anytime, provided you have an IP connection. Maybe it's low bit rate today, but it's just a matter of time, with faster IP that we provide them, they too can deliver HD content to the consumer over IP. And their business model is -- imagine this -- profitable.
How does the MSO still win here in this model? We deliver the IP.
As soon as the downstream speeds we provide a customer cross the
19Mbps threshold, what's to stop a content provider from delivering assets directly to the consumer in real time, or near real time? It's not the "oh that will be ridiculously poor looking content because it's so grainy and low BW" argument -- it will be HD over IP right to the termination device. What about MPEG4? When the compression models are even better, and require even LESS downstream BW to deliver that same first class content.Why couldn't someone use their off-the-shelf DVR with an IP back end that works off our DOCSIS modem to get video assets on demand?
Keep thinking about how the under 30 crowd operates. They're already doing these things.
Look at the business models emerging around us:
The IPOD can now download video over IP, that you can watch "anywhere" or plug into a display device and watch it -- On Demand. The PSP (PlayStation Personal) is 802.11 enabled to stream video from a base station you hook up off your TV, that you can control remotely. Just like a sling box.
This model, is one step removed from needing the set top box, eventually -- it will be IP to the PSP, they could charge for assets. Just like VOD. Skipping our VOD model, just using IP. The set top, is about to go DOCSIS in a big way, all IP, or even Multicast IP to the set top.
Young people want their Television On Demand, and increasingly -- so do the elders as they continue to adopt. How they get it will just be an IP pipe in the end. The younger the end user, the more likely they will be getting their video from one of the new IP based delivery methods and not subscribing to bloated pricey cable packages. Sure, the prevailing MSO delivery model right now is easy to use, it's perfect for everyone from 10 to 100 (the 90-100 crowd is still crowing about the set top complexity) but that comfort level with "we'll do everything for you TV" is undergoing a massive transformation right now. The under 30's, are spoon fed computers and web gui's from birth. And really when you think about it, how different is our guide from a snazzy website or LCD interface on a gaming device? Actually, I'd choose the gaming interface any day over our guide...
How does the MSO still win here in this model? We deliver the IP.
So now let me put the second half of this out there -- to do so, I want to use Telephony as an example. Why did payphone go out as a profitable business? Why did people stop getting 2nd and 3rd lines? Wireless, Cell phones saved the CLEC's who adopted wireless first and bet on the future of wireless telephony. The CLEC's that were smart enough to transform their business in time so that they remained the tollbooth of telephone. We lost that race I think in the end, landline telephony is on it's way out eventually. It will take time (a long time), but the prevailing model will be wireless, and it will be profitable as it is today.
Voice and print "media" is always going to lead Video in technology migrations. Simply because of how many bits it takes to move it from point A to B in a digital world. The prevailing models are definitely maturing for the future of print and audio delivery. Where is Video going? It's next in line, and our number is about to be up.
So how does the MSO still win here when we are neck and neck with FIOS for providing breakneck IP speeds to the customer? We deliver Wireless IP to the consumer NOW.
BW over Cell phone networks is miserable, 3G speeds aren't going to be delivering VOD assets any time soon, probably never. Cell phone towers are never going to be closer to customers than the HFC network, which touches about 90% of the places people live and work. Everyone is right there, right on our HFC plant w/ massive BW to set free. That's a position the CLEC's would love to be in with that kind of horsepower. And we have it today, we don't have to spend 10 years and billions of dollars to do this.
So as the CLEC's drive PON to everyone's house, and lose the ability to put active devices all over the place. We need to take our edge and put wireless out there. And we can't wait any longer. Or another business model is going to come up around us, and turn MSO's into an IP based utility, where other folks will call out the prices for content and were just the vehicle to get it from A to B.
What if the Google WiFi model works? Wireless everywhere, ad based revenue for wireless IP, surely they need a backbone for this infrastructure, but our take of the pie won't be for content. It will be wholesale BW.
Let us not go the way of Newspapers, Blockbuster and CD retailers - we must take IP and make it wireless, at high BW speeds, so that we can remain the tollbooth for content, so that people will pay to get their content on our superior IP networks. Worst case, even if we are the wholesale BW company when the game finally finishes this chapter, at least we'll have won because we took that BW and gave it to people wirelessly, regardless of the victorious content tollbooth model.
Dean F. Meece Systems Engineer Comcast