Thursday, August 24, 2006

Cable Internet as your DVR

Follow my logic here:

Computers: Most homes now have a computer. Most computers are hooked up to the Internet. Most homes have broadband now.

Entertainment: Digital entertainment has exploded, especially with the advent of MP3's. There is already a massively successful business model around downloadable digital content: the iTunes store. DVR's are already in more use than VCR's, and are set to become a mainstay of the home: people like watching their programs, when they want to. Placeshifting, the method of using one's digital content where ever you are, is starting (Slingbox). And YouTube is becoming one of the most trafficked sites online, because people like to watch video.

Gadgets: cellphones are becoming smartphones. The screens and memory are already there, and are set to become the mainstay of the cellphone set. The iPod Video has already proven there is a market for people to watch video, wherever they go.

Piracy: DVD's are routinely ripped and put online with BitTorrent. And let’s not discuss the old Napster model.

Internet access: DSL is dropping in price, and increasing in bandwidth. Voice over IP (VOIP) is not a novelty: it's the fastest growing phone service. Phone companies are grumbling, threatening a two-tier Internet, as video traffic takes up more bandwidth. Cable, which provides most people broadband, is fighting off WiMAX and other threats. And phone companies are frantically laying fiber to the home to try to take back what Cable has.

Ok, here’s the idea:

Cable companies should offer all their customers the ability to download almost any show that is shown on their video offerings, DRM free, for $20 a month. You would download an application that allows you to download an episode at a time, or set up a "season pass." The shows would have their commercials in them, or they could have a 30 second commercial at the start.

Read that again.

Now, why would they do this?

1) Cable wants to ensure stickiness with their customers: stop them from defecting to other services.
2) They can use the application you download as a Bittorrent tracker: the server load would be distributed by all customers, so costs to deploy would be low.
3) They can tie the access to the application with the IP address of your registered computer; you can only register one computer per cable bill.
4) $20 a month is all gravy revenue, for content they already HAVE.

Example: I recently decided I wanted to watch the new show, Eureka. However, I wanted to see it from the beginning. Could I do that with Cable? No, not even with OnDemand. I also wanted to watch the show on my Palm, as well as my TV. Could I download it with iTunes, at $2 an episode, and watch on my Palm? No; I'd need an iPod video. So what am I forced to do? Access a Bittorrent server, and download the episodes.

Is this illegal? Yes. Think of it: it's illegal for me to want to consume the content I already pay Comcast for, but I am being penalized because I decided I wanted to watch the show after it started. Could I have set it up on the DVR? Yes, but I didn’t; I forgot. What are my options today? Download from iTunes. That means I'd need to hook up a computer to the TV, and I could not watch on my Palm. AND, I'd be paying $2 an episode for that privilege.

Now, look at the original points I started with here. At $20 a month, are you telling me that this would not make MILLIONS for cable companies, given all of the points there? Plus, as iTunes shows, people will gladly pay a little more for content, if it means they make it easy, simple, and legal.

Cable companies. I'm not charging you a dime for this idea. Take it, run with it, but DO IT. This is the way to ensure your profits today, tomorrow, and offer what your competition cannot. The time has come: I want the Internet to be my DVR, and I will pay you to do it.

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