Way back in 2009, Steven Pemberton, a programmer and researcher who had contributed to many of the bedrocks of the modern Web, including XHTML and CSS, gave a presentation on his vision of the next evolution of the Web. While the first iteration of the Web, what could be called “Web 1.0”, was based around individual, isolated websites, mostly operated by brands and professionals, the “Web 2.0” paradigm that sprouted over the course of the preceding decade was based around centralized platforms, designed to make it as easy as possible for anyone to contribute, allowing countless people to congregate in a single place and creating hubs for content created by thousands or millions of people. Social media services such as MySpace, Facebook, and Twitter represented the pinnacle of the Web 2.0 experience, but it also covered blogging sites like Blogger, WordPress, and the later Tumblr, more specialized services such as YouTube and LinkedIn, and even sites like Wikipedia where the sum total of everyone’s contributions is more important than each person’s individual contributions.
Since Netflix started putting out its original series by releasing every episode of each season of each show all at once, a move inspired by the phenomenon of people “binge-watching” numerous non-original series on the service they hadn’t originally watched as they came out, there has been debate over what the best strategy is for releasing serialized scripted content in the Internet age. Certainly it would seem that, freed from having to meet the needs of a linear television schedule, there’s no reason not to release content on any schedule you want; most online video series on places like YouTube, both before and after Netflix came along, have been released on a TV-like weekly schedule (or less), but they tend to be made by individuals with low budgets and without the backing of a large company like Netflix, and so need to release episodes pretty much as they’re made in order to maintain revenue to make the next episode. Whether or not Netflix’s strategy is the best strategy, with or without the constraints of a linear network, is another matter entirely.
Certainly, if the series themselves aren’t that important to your business model other than as content to fill out the service, and the main goal is simply to maintain engagement with your product, the binge-release method makes sense; it ensures that you have a large batch of content, presented as a single unit, that people can then consume over an extended period and eventually finish the season without needing to be reminded to come back. On the other hand, Netflix’s main source of revenue comes from its subscription fees, and so what would seem to be best for Netflix’s bottom line would be to keep people subscribed to its service for as long as possible, especially since, like most streaming services, Netflix offers a one-month free trial, thus opening the possibility of people binging an entire season of a given show in a single month and then quitting without paying one cent. (And that’s a very viable proposition; Stranger Things has only eight or nine hour-long episodes in a season, meaning you only need to watch two episodes a week to catch up within a month. It’s entirely viable to catch up in just two nights, or even one day if you can spare the time.) And while Netflix shows are often subject to a burst of intense buzz right around when each season comes out, it quickly dies down as people finish the season and move on to other things, meaning Netflix shows don’t get the same sort of sustained buzz over a period of months as week-by-week shows like Game of Thrones do.
From a creative standpoint, the Netflix model probably does better justice to intricately-plotted shows that in the past might have been deemed better on DVD, where individual episodes don’t necessarily hold up all that well on their own, except in terms of their contribution to the larger narrative of the show, and so their momentum and the immersion in their world is better maintained by watching them in larger chunks. Indeed, since the length of each episode isn’t fixed by the needs of a linear television schedule either, the only criterion for where to place episode breaks at all is to identify good stopping places for people to break at in the likely scenario that they can’t consume the whole season as one really long movie. But this can be a double-edged sword: for truly compelling shows, especially those with lots of plot twists and mysteries inviting speculation as long as they remain unsolved, the week-by-week wait for each episode only strengthens the anticipation. There’s a reason the cliffhanger and other devices borne of the serialized format have such a long and time-honored history. For particularly complex, multilayered shows, the lack of answers drives fans into endless speculation, poring over scenes for clues, rewatching the series in lieu of any new episodes, and generally gaining a deeper appreciation of the series than would be apparent in a one-time surface-level viewing. With a binge-release model where everyone is watching at their own pace, discussion of the show on online forums becomes nearly impossible, with the need to accommodate people at every level of progress through the season. As good as Netflix’s shows may be, they can never truly amount to “water-cooler talk” if not everyone is at the same point.
Of course, the sort of show that creates this sort of constant, edge-of-your-seat anticipation for each episode is also the exact same sort of show that is best suited to a slot on linear television in the Internet age. A show that doesn’t have people feeling they have to watch it the instant it comes out, lest they be left behind in or spoiled by the discussion, is probably also a show that doesn’t lose much by being released all at once and may be better consumed that way, so it’s not clear that there’s a situation where Netflix gets a show that’s better consumed in a serialized format. Still, what this suggests is that the best strategy will ultimately depend on the show. Some shows may work better with a week-to-week release schedule to heighten the anticipation for each episode, others may work better released all at once so they can be consumed as a unit right away, and that’s not even getting into purely episodic shows that would be fine in either format. (I talked about some of the factors going into either strategy, in another context, nearly a decade ago.) It’s not even like you’re bound to one release strategy or the other. You could release episodes in batches, breaking at a point you feel is a good place to leave off and leave the fans wondering, or at any frequency you like that best balances anticipation, attention, and the momentum of regular releases.
Which brings me to, of all entities, Cartoon Network.
Over the years, especially in recent years, I’ve gotten a number of criticisms of how my website looks, including most times when I’ve attempted to link it on other platforms, calling it outdated or just plain ugly, or even people I know asking me if I’m going to refresh my website layout.
To understand my attachment to it, understand that I conceived of the basic concept in my head well before I actually started implementing it on an actual site, and became enamored by its simplicity and modularity. It seemed to me the distillation of the web design trends of the time, with a header image and a sidebar with important links and sections of the site (though when I moved Da Blog to MorganWick.com, ultimately the 128 pixels I gave the main sidebar necessitated the creation of a second sidebar for elements that wouldn’t neatly fit there). That was over a decade ago.
Two things have changed the internet landscape in the interim: social media and mobile devices. Social media has made individual web sites less important and individual blogs like mine a relic of a bygone age, and mobile devices have introduced a new paradigm for web design to take into account. The need to develop for a variety of screen sizes, and the decreased emphasis on the individual web site, has resulted in a web design landscape that’s less easy to characterize than it was ten years ago. No longer can it be assumed that most people will experience your site the same way; almost always designing for mobile is assumed to be a different thing from designing for traditional computers. Most websites I come across are optimized for the needs of professional outlets (which in many cases means neglecting the actual web site and focusing more on an app instead) and don’t necessarily have lessons that can be easily ported to my own context. In what could be considered the “Revenge of the LiveJournalists”, what individual blogs remain seems to have seen Tumblr eclipse Blogger and WordPress as the platform of choice.
What I have seen increasingly disappoints me. Most sites that are actively trying to make money are increasingly bloated with ads, videos, and complex scripting for their basic interfaces. Normally these things are toned down on mobile devices (although there definitely are sites, which shall remain nameless, which are a chore to browse on mobile), but on traditional computers the result is that many sites end up chewing up enormous amounts of memory. At the same time, the traditional-computer market has increasingly bifurcated, especially with the reimagining of Windows impelled by Windows 8, and these days if you’re not looking to use your computer for graphics-intensive gaming, you’re expected to get a low-end machine with the Internet expected to bear the brunt of your activity through the cloud. But if all but the most minimalist web sites chew up huge amounts of memory and ask a lot of the processor to load all their heavy-duty video ads, the result is an inevitable degradation of the experience, and it’s hard for me to keep certain sites open for very long, in some cases even long enough to actually read the article. This, I suspect, is a major reason for Google Chrome’s continued dominance; there’s only so much a browser can do to curb a site’s resource consumption, and no matter how many reasons there may be to switch to, say, Firefox, if it doesn’t have Chrome’s multi-process gimmick, meaning I can’t just shut down one or a handful of particularly resource-hogging tabs when I’m done with it (at least not without outright closing the tab, which doesn’t completely remove its resource footprint), I can only use it for so long before the cumulative effect of all the sites I use renders it unusable.
Anyway, the end result is that if I were to redesign my website today, I wouldn’t be led as easily to a simple, unifying concept I could design it around, mostly because of mobile devices; the “burger menu” so prominent on mobile designs adds an annoying extra click when applied to desktop. Personally I don’t have a problem with browsing my site on mobile even though it usually requires zooming in, but for all I know that may be depressing my mobile audience just by knocking down its status on Google. Most sites seem to be heading in the direction of being dominated by a header image, with sidebars becoming less prominent or important (unsurprisingly, given how little space there is for them on mobile devices), but hardly disappearing entirely.
My own priorities may also have changed since the mid-2000s. I originally conceived of the site’s design as something that could have a unifying effect across the various different uses I conceived for it, many of which now seem to be doubtful they would ever come to fruition, or that they would use the current layout if they did. I never particularly intended Da Blog to be as cramped as it is with no real margins, but I didn’t want to come up with arbitrary margins for everything and I figured it looked fine enough as it is. I’ll also admit to being less enamored of the fonts I use than I was then, though I’m not sure what alternative fonts I’d gravitate towards if I had to come up with new ones today. But I also like the current layout as an expression of myself, and my shortcomings with coding already affects the current site in ways that would become more acute with a refresh; if I would want to ditch the sidebar as a major design element of the site I would want to replace it with a top bar for navigation, but that seems to be much harder to customize what links to put there in WordPress than a sidebar is.
Anyway, maybe my thoughts on the matter will evolve as I continue to think about it and continue toying with ideas for not only what I want the site to look like but what I want it to be and what I want to do with it and with my life. For now, this is just what I came up with over the course of an hour at night in order to continue having at least one post a month. Maybe others will have their own ideas of what I should change and how.
The Wall Street Journal reported Sunday night that Hulu is developing its own over-the-top “skinny bundle” for release sometime in the first half of 2017. (Note: since the WSJ article is paywalled, most of this info comes from a Mutlichannel News writeup of it.)
According to the WSJ, the bundle would include, at minimum, channels associated with two of Hulu’s co-owners, Disney and Fox, including ABC and Fox owned-and-operated stations and other popular channels they own, including ESPN, FS1, and Fox’s regional sports networks. The reports I’ve seen don’t say whether the service would include channels from anyone else other than the third co-owner, NBC Universal, but one analyst speculated a little over a week ago that it might end up including channels from CBS and Time Warner, both of which have contributed to Hulu’s existing on-demand service (with Time Warner even approached about a stake in the company last year). In other words, it would include the five companies that offer substantial sports content and that, together, keep the cable bundle together. Even if Disney and Fox were only able to get the Turner networks on board, the Hulu service could conceivably be a one-stop-shop for sports fans with every nationally-televised game from MLB, the NBA, and every major college conference, every bowl game of significance, and every NCAA Tournament game not on broadcast television, plus, for fans of local teams, games of any team with an agreement with a Fox network. The main reason to get NBCU on board would be to appeal to NHL, NASCAR, golf, and soccer fans, as well as fans of teams on Comcast’s RSNs. All told, it could well be the biggest step yet towards the breakup of the cable bundle.
Which is precisely why the companies creating it, especially Disney, won’t let it be.
Both the analyst that speculated about this a couple weeks ago and the WSJ report suggest that a Hulu skinny bundle would cost around $40 per month. After slashing the price earlier this year, PlayStation Vue currently offers broadcast stations and a broad selection of popular channels, including ESPN, ESPN2, FS1, FS2, and all three of Turner’s networks that carry NCAA Tournament games, and popular networks from NBCU (but not NBCSN) and all of the non-sports four, for $39.99 a month in the markets where it carries broadcast stations. If you have an antenna and live in one of Vue’s non-broadcast markets, for just $5 more than the proposed Hulu skinny bundle, you can add most of the channels left out of Vue’s base package, including NBCSN, Golf Channel, beIN Sport, ESPNU, BTN, SEC Network, and regional sports networks. Of course, considering PS Vue dropped its price at the same time it added the uber-expensive Disney networks, it may well be operating at a loss in an attempt to spur adoption, and may hike its prices again later. Still, if the Hulu skinny bundle is competing with PS Vue at those prices, not to mention Sling TV currently offering (with the single stream package) all the ESPNs, including SEC Network, plus TNT and TBS for $25 a month or (with the multi-stream package) FS1, the Fox RSNs, and all three Turner networks for $20 a month (suggesting Sling would probably offer all those channels for around $40 once it synchronizes its packages, depending on the effect of adding the Viacom channels), there’s really little reason to sign up for the Hulu skinny bundle unless you really want NBCSN and Golf Channel or you just want to deny the non-sports four your money out of principle.
It’s hard to see who the Hulu skinny bundle would appeal to that wouldn’t be better served with Vue or Sling – which, of course, is probably the point. Disney and Fox don’t really want to do anything that would hasten the breakup of the cable bundle, so it’s not surprising they’d price it to be uncompetitive with Sling and Vue given its selection, even though they could theoretically offer a lower price since they’re not really going through middlemen, potentially setting it up to fail and giving them a reason to claim skinny bundles and going direct-to-consumer doesn’t work. If they did try to competitively price it, Disney likely wouldn’t sign off on launching it unless it had the non-sports four on board, effectively making it the same as Vue, because there’s nothing Disney fears more than cutting the non-sports four out of, and thus motivating them to become independent from, the cable bundle. (Incidentally, that same analyst that speculated about a Hulu skinny bundle, and about a skinny bundle with the non-sports four, suggests that the latter could cost just $9 a month. That’s cheaper than anything I speculated about at the time, though only barely.)
It’s become increasingly apparent that the current batch of “skinny bundles” is more about the Big Nine declaring their independence from cable companies and networks not owned by the Big Nine (not to mention broadcast stations) than from the cable bundle itself, with all of them too scared of the consequences of leaving the others. In that sense, there is some importance to a Hulu skinny bundle that gives Disney and Fox a distribution mechanism independent not only of cable companies but of any middlemen whatsoever. But don’t be fooled by the uncritical pro-cord-cutting media touting it as some sort of landmark development in the breakup of the cable bundle. In the end, a Hulu skinny bundle will do little to benefit the consumer, at least in the short term, only its owners.
The broadcast TV incentive auction officially kicked off last week with the deadline for stations to declare their participation in the auction. This triggered a number of pieces about what the auction is, how it works, and what the implications of it are. In that vein, I decided to write my own explainer for anyone wondering what this auction thing is they may have heard about.
Netflix’s push into original content was largely touched off by a desire to insulate itself from incumbents withholding content from their own potential competitor; by enhancing the value of their service beyond simply redistributing movies and TV shows from other services, they could ensure people would continue subscribing even if the legacy players completely cut them off, and perhaps provide an inducement for new subscribers. It ended up greatly accelerating the transformation of the video landscape – and Netflix had some tricks in its arsenal completely unavailable to the legacy players.
Without being tied to a linear television schedule, Netflix touched off heated debate with its strategy of releasing every episode in each “season” of its shows at once, capitalizing on the “binging” strategy that many of its customers used to catch up on old cable series. That also paid off in benefits for creative freedom, as producers were able to avoid the cheap tricks such as cliffhangers used to keep people coming back to traditional television series. Netflix has also capitalized on its ability to collect data from subscribers to aid in development; it signed off on House of Cards after determining their subscribers included enough fans of Spacey, director David Fincher and political thrillers, including those that ordered the original UK series on which the show was based through its original DVD-by-mail service, as well as enough overlap between those groups, to make it worthwhile, and even targeted its advertising of the series differently to different audiences.
Amazon’s own video service, which it originally treated almost as an afterthought and an add-on to its Prime fast-shipping service but which has begun to emerge as Netflix’s biggest rival, soon followed suit, engaging on its own twist on television’s traditional “pilot season” by posting pilots on its web site for a month or so and using user data and votes to determine what to turn into series. Its focus has largely been on comedies, with its first two original series fitting the mold with Betas and Alpha House, the latter starring John Goodman and Bill Murray. At the 2015 Emmys, its Transparent picked up five nominations on the main show and two wins, including Outstanding Lead Actor in a Comedy Series, joining The Daily Show as the only non-HBO shows to win multiple awards on the main show, while Netflix won only its second main-show award, Outstanding Supporting Actress in a Drama Series for Orange is the New Black. Even Hulu, a joint venture of ABC, NBC, and Fox designed as a legal avenue for people to view their content and that of other traditional television networks online, has made strides into original content not originating on a traditional television network at all.
Since Vince McMahon took over the World Wrestling Federation from his father in the 1980s, the WWE has referred to itself as “sports entertainment”, a term that (among other things) reflects its status as a form of entertainment that looks superficially like sport, but isn’t. By the dawn of the 2010s the WWE wanted to get in on the sports cable boom by launching its own network, going so far as to announce a launch in 2012, but as mentioned in Chapter 7 of the book, cable operators are leery of launching new networks when not forced to by media conglomerates. Cable operators were only willing to pay the WWE 20 cents a subscriber for a standard sports network, and even after making it a premium outlet airing most of the company’s monthly pay-per-views that are the bread and butter of its business, the company still found cable operators wouldn’t do business on terms acceptable to them. Stymied by the cable operators at every turn, the WWE took a new route to the launch of its own network, one befitting its pseudosport status but which if anything placed it ahead of the curve compared to what real sports were doing, riding the wave that was changing the landscape of video distribution, and standing poised to change the nature of the business in a way not seen since McMahon took over the company and proceeded to use cable television and pay-per-view to systematically dismantle the network of regional promotions that had dominated professional wrestling to that point.
At the 2014 Consumer Electronics Show, WWE finally unveiled its plans for its network, which gave its subscribers access to the vast array of content in its back library, which pretty much included every wrestling show that mattered from the 80s and 90s thanks to the numerous promotions whose footage WWE had purchased over the years, plus documentaries on wrestling history and replays of WWE’s main shows Monday Night Raw and Friday Night SmackDown, both on demand and on a linear network that also contained live pre- and post-shows for Raw and SmackDown, first-run airings for secondary shows Superstars and NXT, and the crown jewel of the network, all the company’s monthly pay-per-views, including its biggest event of the year, WrestleMania. All this would be available for $9.99 a month; to put that in perspective, WrestleMania cost $55 in HD while other PPVs cost $45, meaning the network would pay for itself if you otherwise ordered just three PPVs. Oh, and it would be available entirely through the Internet, either through WWE.com or on streaming devices such as Roku or Apple TV. WWE felt they were uniquely positioned to blaze a trail in this space; its data suggest WWE fans consume five times more content online than average and are twice as likely to own a streaming device, with 60% voicing their willingness to watch a WWE Network on there.
The project got off to a rocky start. Although cable operators would seemingly still make more money by airing WWE’s pay-per-views than not (McMahon called it “found money for them”), DirecTV announced it was dropping all PPVs while Dish Network decided it would decide whether or not to carry each PPV on a case-by-case basis. Needing a million subscriptions to break even, the company seemed to plateau at about two-thirds of that number, which, combined with a new television deal with USA and SyFy for Raw and SmackDown that fell far short of expectations given the media landscape, sent share prices tumbling. In October, the company dropped a requirement for a six-month commitment. But by the dawn of 2015, the network crossed the million-subscriber threshold and seemed poised to stay there even after a controversial finish to the Royal Rumble event caused #CancelWWENetwork to trend on Twitter and after WrestleMania had come and gone.
For outlets that might otherwise attempt to collect subscription money from cable operators, “over-the-top” platforms such as WWE Network are looking like increasingly viable approaches. Upon leaving Fox News in 2011, conservative political commentator Glenn Beck elected to start his own streaming news network anchored by a continuation of his TV show and a simulcast of his radio show, initially called “GBTV” but later renamed TheBlaze. It proved popular enough to earn a slot on Dish Network and other pay-TV providers the following year, while still maintaining 300,000 customers paying $9.99 a month to stream it directly. YouTube introduced a series of sports-oriented channels carrying niche content in 2011. The UFC launched the “Fight Pass” network carrying not only cards not shown on pay-per-view or as part of its contract with Fox, but even cards from other MMA promotions. The NFL launched its own streaming service, NFL Now, in 2014, boasting a high degree of customization based on customers’ favorite teams, delivering relevant news, highlights, archival footage, and other content. Several other entities, including Sports Illustrated and the NHL, came together to launch 120 Sports, delivering fast-paced news, highlights, and commentary in 120 seconds or less. Even major media companies have taken the plunge. In November 2014 CBS launched CBSN, a 24-hour news network with 15 hours of live anchored coverage per weekday, with the ability to start watching at any point in each hour, and additional content from other CBS properties.
Nor does turning to these streaming services have to mean watching on the tiny screen of a smartphone, tablet, or even laptop. A booming industry of devices makes it possible to stream content from all over the Web to the same television set you might otherwise hook up to a cable box, including “smart TVs” that can connect to online sources without going through any sort of intermediary at all, and indeed most streaming services catering to cord-cutters tend to focus more on these devices than on more general-purpose computing devices. Roku has been the longtime leader in this field, making devices since 2008, with Apple and Google joining them with their own platforms and Amazon jumping into the field with Fire TV in 2014. But the most popular such devices might be game consoles from Microsoft, Sony, and Nintendo; as they have added online capabilities while streaming boxes incorporate the ability to play games, the line between the two has become decidedly blurred and might be in the process of vanishing entirely. Also in 2014, Google shook up the field with the Chromecast, a small device resembling a USB stick with most of the same functionality of existing streaming boxes plus “casting” technology that allows one to access a video on their phone and “cast” it to the device. Roku and Amazon have already since introduced their own similar streaming sticks.
More than any streaming service, it’s this that most exemplifies the change coming over the living room and the existential threat it poses to cable TV as we know it today. Soon your entire entertainment experience will be controlled by a single device that unites video player, game console, and potentially, even desktop computer, and if the FCC gets its way, it’ll serve as your cable box too – one device that serves as the gateway to the entire universe of visual entertainment, with traditional cable TV at best one source of it, potentially presented to the consumer as many sources. Content providers are already maneuvering to take full advantage of this revolution, but it’s an open question how or whether legacy cable and broadcast programmers will adjust to it, or whether they’ll find themselves swept up in its wake.
In its highfalutin’ ideals, the Internet is dedicated to the notion of delivering a world of information to all for free, accessible for all to contribute to, available whenever and wherever you want it. Cable television, by contrast, delivers only the content the cable company sees fit to provide you, the vast majority of it from nine companies and laid out on a rigid linear-television schedule, and forcing you to pay for all of it to get just the few programs you want. It is, in short, the antithesis of net neutrality, and as I laid out earlier, the cord-cutting debate is effectively a clash between the outdated vision for the provision of content and the new vision sweeping it aside.
It is therefore tempting to conclude that traditional, wired linear television has not only outlived its usefulness but needs to be actively destroyed to preserve the ideal of net neutrality, that any future it might have is only in schemes such as Comcast’s “Stream TV” that use the existence of linear television over traditional wires to circumvent net neutrality by providing preferential treatment to certain types of video content. But as I’ve chronicled, at least in the wireless context, linear television can not only play a key role in network management, traditional broadcast linear television can actually benefit net neutrality by allowing those tools to be accessible to as many potential programmers as possible and delivering it to everyone regardless of carrier.
Not all of these benefits can be directly transferred to the wired context. Most obviously, wired connections are inherently dominated by whatever company owns the wires and processes the connection; they are inherently going to have some control over what content can use the linear television wires. And if you believe that at some point, everyone is going to be fed by a direct fiber-optic connection, fiber-optics sees no benefits to linear television at all; each customer has its own fiber leading directly to the node and the rest of the system without being impacted by anyone else’s activity. Unless, that is, it’s set up in something like a passive optical network, which reduces the cost and amount of fiber needed to go into business by splitting one fiber to serve multiple endpoints, effectively delivering each customer’s content to every customer on the same splitter. It requires end-terminals to sort out what content belongs to which customer and encrypting content to prevent eavesdropping, but if I were running such a network I would look into a way to actually foster eavesdropping for live streaming video, so if someone is watching a game on ESPN3, anyone else on the same splitter that wants to watch the same game can ride on the first person’s stream, freeing up network capacity for everyone else.
This hints at what the future of wired linear television might look like on both coaxial cable and fiber-optic networks, blurring the lines between online and linear content so thoroughly it may be impossible for the end user to tell which is which; some WWE Network content might be delivered linearly, while in some areas a network like Logo might be delivered via IP. It doesn’t have to look like Stream TV, but it might have to adopt some of the less savory elements of T-Mobile’s Binge On, finding some way to identify live streams so they can be isolated and delivered once. It may also be beyond the capability of some providers to pull this off dynamically, certainly while minimizing lag; linear delivery may be something that has to be arranged ahead of time in some way. The key, then, is to figure out how to foster such a system while preserving the principle of net neutrality.
Last year I sent a Congressional committee 13 pages of comments explaining what principles I felt should underlie any revisions to the Communications Act to update its treatment of video for the Internet age. More recently my thoughts have coalesced with regards to how to regulate wired television to bring it into alignment and consistency with the principle of net neutrality and existing rules governing the Internet. To that end, here’s what it might look like:
- No content delivered via linear television, particularly that not delivered over-the-air, can be withheld from delivery over the Internet, whether by the ISP or the content provider. This is a basic way to avoid using linear television as an end-around around net neutrality rules, and it also demonstrates an important difference between linear television now and going forward: it is no longer a prerequisite for the delivery of content. ISPs may no longer find it necessary to carry a linear television service at all. Really, the notion that cable operators are just a backdrop and infrastructure system through which programming is carried, which has little to no role in what programming it is, is one that probably should have taken hold several years ago as digital cable obviated the condition of scarcity that had governed the pay-TV industry, and certainly once Internet streaming became competitive; it’s still impossible for a cable operator to carry every would-be linear network, but the notion that your ability to watch a channel anyone would actually watch would be determined by what pay-TV operator you subscribe to seems not only quaint and outdated, but antithetical to net neutrality. In this vein:
- If linear television is carried over any wired network, it should be controlled at the infrastructural level. I’ve seen suggestions to increase competition for Internet service by decoupling control of the infrastructure from the service delivered over the pipes, recognizing the natural monopoly the pipes themselves represent while still allowing ISPs to compete freely (i.e., without utility regulation) for the service delivered over them. If so, the same principle underlying broadcast television applies: the content allowed to benefit from linear television should be the same for everyone regardless of carrier. Any distinctions between the content available in different areas should be a natural result of the existence of different networks, without individual ISPs controlling what content you can and can’t watch and how easily you can do so.
- Keep the existing must-carry rules. Ideally, broadcast television serves as a means to deliver the most popular content quickly and efficiently to a variety of devices. It’s reasonable to think that the same content would also be most popular over a wired connection. This rule would establish some degree of parity between wired and wireless video, ensuring the same content that benefits from linear television for the one gets the same benefit on the network with more capacity, and recognizes the original purpose of cable TV to deliver broadcast stations to areas their signals couldn’t reach. The increase in capacity may mean it’s actually not necessary to add any further linear channels beyond those provided by broadcast stations, but it’s reasonable to think video consumption would be higher, and be at higher quality, over a wired connection. If there is a need for further linear channels:
- Forbid any monetary transactions as a condition of linear carriage between an ISP (or infrastructure authority) and a content provider, especially per-subscriber or per-viewer fees. Content providers may only charge consumers directly, though they may use any scheme they wish to do so as long as the ISP (or infrastructure authority) is not directly involved. This rule ensures that potential network strain is the only factor going into what channels are carried linearly, and should render retransmission consent unnecessary and contradictory. Net-neutrality foes and general free-market advocates may look at this rule and think it’s cutting off “innovative” business models, but because in this model linear television is a means for smoothing over the transmission of content that is being made available through the Internet anyway, one that should reduce the costs to both parties relative to the alternative as the number of viewers goes up, there should be no relationship between the costs of maintaining a linear feed and the number of subscribers an ISP has that would have access to the feed or the number of people using it; the costs of providing the feed should be the same regardless of how many people are on the network or can view the feed, indeed that’s entirely the point of linear television in the 21st century. The cost of providing and acquiring the content (an issue concerning the consumer) should be a separate issue from the cost of delivering it (an issue concerning the content provider and ISP). There is therefore no good reason to charge ISPs anything other than a flat fee (and even that’s questionable; small ISPs wouldn’t be too hurt by being unable to amortize the cost across more customers because they’d have less need for linear TV to begin with, but any sort of payment scheme might create the same imbalance that made retransmission consent necessary), and for an ISP to charge a content provider would amount to exactly the sort of “paid prioritization” net neutrality advocates fear so much.
- Impose effective protections against discrimination and an effective dispute resolution process. Again, the only factor that should go into whether any programming is or is not offered linearly is its raw popularity, and any content popular enough to warrant it should have the opportunity to use it regardless of their level of resources or connections. This does not mean disadvantaged groups or public entities should have a blanket right to a linear stream; again, a linear channel is not a prerequisite for the delivery of content, and in some cases what they’re looking for no longer even needs to be video. In many cases these entities seek to take advantage of the modern cable-bundle model to acquire production and distribution resources on par with more well-heeled groups they might not be able to attain if they were forced to stand and fall on their own merits. It may be desirable to introduce new programs to benefit minorities and open up the possibility of using franchise fees on ISPs to fund the production of video and other content by public entities (similar to today’s “public, educational, and governmental channel” system), but linear television is irrelevant to that discussion and shouldn’t be hijacked to attain those goals.
- The quality of a linear stream must be the same across all platforms and an ISP (or infrastructure authority) must not degrade it. Because an ISP does not have to carry a channel (except for a broadcast station) for its customers to have access to the programming on it, there is no reason for an ISP to reduce the quality of a stream in order to fit in more streams. If a content provider offers its stream at too high a quality and causes all ISPs to balk at carrying it, that’s a market signal to reduce the quality of the linear stream. There is one exception to this rule: because the main purpose of over-the-air broadcasting is to reach mobile devices, it may be beneficial for broadcasters to offer wired services their content at a higher quality than they broadcast it over the air.
- Consider imposing restrictions on how many streams one entity can control 24/7 (or otherwise beyond particular events) on one set of wires. Ideally, impose some degree of parity in ownership restrictions between broadcast and wired linear networks. In particular, ISPs should be severely restricted in how many linear streams over their own wires they directly control the content of. In general, consider moving to the Canadian system where the FCC has as much latitude to regulate cable networks as they do broadcast networks.
These rules provide a baseline to move wired linear television away from being a marketplace defined by 1990s rules and market realities and towards becoming a tool that enables the benefits of both linear television and the Internet to be available to all, consistent with the ideals of net neutrality. They hold the potential to usher in the dawn of a new era of consumer choice that frees Americans from the paradigm of having one’s entertainment options dictated by the cable company and enables them to choose from a menu of options that provide value to them. It’s my hope that this provides a framework for policymakers to rethink the wired television landscape and for the American public to imagine what it might look like.
An important step in the dissolution of the distinction between linear television and online video content was taken (or at least started) this week when FCC Chairman Tom Wheeler called for the introduction of a new standard to make cable TV content available to devices other than the cable company-provided boxes most people pay handsome monthly rental fees for, allowing people to watch both pay TV content and streaming video on a single box.
Immediately, the cable industry tore into Wheeler’s proposal, forming something called the Future of TV Coalition to be the public front to its opposition. Most of the critiques I’ve seen of their criticisms don’t seem to go much further than just dismissing it as whining about potentially losing their lucrative set-top-box rental fees, but that may be because it comes off as completely unhinged, seemingly attacking a completely different plan than what consumer groups and Wheeler are advocating and making points the proposal has already addressed or that make no sense, a strawman bearing no resemblance to what’s actually on the table. They claim the proposal would allow tech companies to cut up and resell pay TV content as their own, but it makes no sense and there’s no reason to believe that people wouldn’t still pay their cable company to deliver content, only having a choice in what device would deliver that content. They claim the proposal would allow tech companies to muck with channel ordering and numbering in violation of contractural agreements, when it would be trivial to require any interface to leave the channel lineup alone (or at best to leave any reordering to the consumer). They claim the proposal would mandate the installation of an additional box when the proposal specifically advocates a software-based solution, the whole idea of which is to allow the provision of pay-TV content on boxes that already exist (including cable companies’ own boxes) or on no box at all. They claim the proposal would strip out security and privacy protections when the whole point of it is to arrive at some sort of solution to deliver those protections and credentials to independent boxes for them to process just as today’s cable boxes do.
Though the cable industry has publicly supported past and present efforts to open up the set-top box market, and claims to be all for opening up access to a wide variety of devices, they spend a lot more time bashing the FCC’s proposal than suggesting their own alternative, despite claiming not to know exactly what the FCC’s proposal is. Instead, the closest they come to suggesting an alternative is to repeat the word “apps” over and over. The commission’s proposal, they claim, is unnecessary because Tim Cook says “the future of TV is apps” reflecting the “apps revolution” of consumers, programmers, and cable companies embracing the “apps-based model” making “apps” available to millions of devices and apps apps apps apps apps.
If it seems odd that consumer groups, tech companies, and the FCC would be against television delivered through apps, given the entire backdrop under which this whole thing is taking place, that’s because they aren’t; indeed, the proposal specifically names “app developers” as being among those that would have access to the necessary data to effectively and securely deliver pay-TV content. So it’s not clear what the cable industry means by the “app-based approach” that wouldn’t include the very concept they’re contrasting it to. What they seem to be trying to say is that the FCC doesn’t need to do anything at all, because the existing apps available already deliver pay-TV content to the sorts of devices that would benefit under the proposal (not that that would keep them from pushing expensive cable box rentals on people) – though it’s not clear what kind of apps they mean, because they alternately cite both TV Everywhere apps provided by programmers as well as cable companies’ own apps, all in order to support letting the market do its work rather than an actual, concrete proposal. Certainly what they say sounds reasonable enough at first glance, but what sort of “apps-based approach” do they actually advocate, and what exactly is the problem consumer groups and the FCC have with it?
Well, according to the report released by the FCC’s Downloadable Security Committee, cable companies’ proposal would involve delivering content to devices using an app and user interface provided by the cable company, leaving consumer groups concerned about precluding other entities from innovating with their own user interfaces. Of course, forcing people to use a single app to access all linear cable TV content is precisely the opposite of what the “apps revolution” is actually about: decentralizing access to content and allowing content providers to offer their wares to consumers directly, with an experience they can control themselves.
The cable industry seems to believe, or wants the FCC or public to believe, that cable companies’ services themselves are the product, rather than the content offered through those services, even though that content is mostly the same from one cable company to another. This belief is betrayed in their listing of the top “video subscription services”, which lists the streaming services Netflix and Hulu alongside the top cable operators and satellite providers, as though Netflix and Hulu’s primary competition were cable companies themselves, not, as Netflix itself has identified, content providers like HBO. Perhaps cable companies’ greatest fear isn’t losing the billions of dollars in set-top box rental fees, but that in divorcing them of that the FCC might recognize that the real “future of TV” is one dominated and identified by content providers, with cable companies merely providing the backbone through which that content is delivered, and that they might accelerate that future by providing the tools for their wares to be offered through an experience completely divorced from the cable companies’ control. To be sure, content providers might feed this misconception; the contractural concerns such as channel placement cable companies worry about the FCC’s proposal undermining are rooted in a notion of a single lineup of numerical channels defined by the cable company, and perhaps a proposal that makes it irrelevant is one that should be considered and adopted. Content providers would no longer be able to get cable companies to try to force-feed their content by placing it near content that’s actually popular, but even their own TV Everywhere apps (which would seem to have little reason to exist on smart TVs and devices like Roku as it stands) would stand to benefit by being able to access the cable company’s linear feeds directly, strengthening their own brand by making it easier for those apps to become the primary gateway to their content.
The cable industry is right that the “apps revolution” is changing the way we watch TV. The reason they’re opposing the FCC’s proposal so strenuously is that they know it holds the potential to make it all the more successful at it.
In November 2014, advocates of a free and open Internet were starting to see some hope that, in spite of its connections to the cable industry, the FCC would enact the real net neutrality rules they’d been fighting for. Tom Wheeler’s proposed mishmash of the worst elements of both Title II and the previous Section 706 justification for net neutrality rules was DOA but showed the FCC chairman’s willingness to adopt Title II if the movement for it had enough momentum, and President Obama himself had come out in favor of real net neutrality rules, lending the cause a further mark of legitimacy and making it all the more politically difficult for Wheeler to go against it. In spite of the millions of letters Americans had sent the FCC encouraging real net neutrality on a Title II basis, it was the events of that November that marked a real turning point that led to the FCC adopting Title II and enacting strong net neutrality rules early last year.
So where did we find ourselves a year after that fateful November? Well, T-Mobile has announced a new program called “Binge On”, allowing you to watch all the video you want from certain sites without counting against your data cap, which sounds great until you realize it effectively amounts to prioritizing certain sites over others, what net neutrality is supposed to prevent (after the new rules were applied to wireless providers not subject to net neutrality rules before). And Comcast has indicated that its own Stream service, targeted to the mobile devices of broadband-only customers, also won’t count against its data cap in markets where it’s trialing the caps.
T-Mobile says the program is open to anyone without qualifications or any money needing to change hands, but it’s easy to be skeptical that it’ll stay that way, especially since it forces all video to be streamed in SD quality, something YouTube, not part of the program, has complained about, with the only difference, so far as I can tell from T-Mobile’s statements, being that Binge On partners have to compress the video themselves (so it’s not really without qualifications, and that’s significant). If every carrier took this tack, even if none of them charged for it, nascent streaming services would have to spend a lot of effort going through a lot of hoops to make sure they were qualified and signed up for every carrier’s program. As for Stream TV, Comcast says it doesn’t even fall under the domain of the FCC’s net neutrality rules because, though it’s an IP service, it’s delivered over the regular cable system, not through their Internet tubes. Net neutrality advocates point out that such distinctions are meaningless to the end user, meaning Stream TV can crowd out competing services that do count against caps. But it’s easy to come to the conclusion that Comcast and other such providers already offer a video service over a different part of their network that doesn’t count against caps and has been running for decades: it’s called cable television. (Indeed, AT&T’s U-Verse TV service explicitly works the exact same way.)
I told you this sort of thing might happen. Video is such a massive consumer of bandwidth that it was destined to become the new ground-zero for the net neutrality debate no matter what the FCC’s rules ended up being, and Internet providers would inevitably look for ways to take control of the video content being delivered over their networks. Regardless of whether data caps are strictly necessary to manage congestion, or even the degree of competition faced by Internet providers, the basic rules of business make it inevitable that Internet providers would attempt to meter the use of video on their networks – and if, as many predict, all video will one day be delivered over the Internet, the issue is going to become that much more pressing, especially as 4K becomes the norm. T-Mobile and Comcast are trying to portray their offerings as meeting laudable goals – T-Mobile by optimizing video for the size of the screen, Comcast by moving video consumption out of their Internet network – and while it’s telling that Tom Wheeler initially praised these sorts of schemes as “innovative” and “pro-competitive” (though he’s since asked T-Mobile and Comcast for more information about these services), unless net neutrality advocates can come up with a better solution, those phrases may prove closer to the truth than they’d like to admit.
One solution could be some sort of video delivery system open to all and immune to the manipulations of wireless or wired Internet providers, available to any device on any network, that content providers would only have to prepare for once. Similar to Comcast’s Stream TV, it would have to operate in a different band of spectrum than other Internet service. To reduce the bandwidth and spectrum demands of all carriers, live streaming video watched by multiple people at the same time would only need to be sent once, and that one signal could be picked up by any device. Oh wait: we have that already, it’s called broadcast television, and rather than help it fill that role its dominant entrants are desperately clinging to retransmission consent as their only reason to stay in the market at all, while the FCC is actively trying to destroy it with the upcoming incentive auctions that aim to “free up” spectrum that wireless providers supposedly need to provide the same video broadcast television is already delivering more efficiently than they ever could and that its more forward-thinking entrants hope to compete with. If you don’t want programs like Binge On and Stream TV to be the future of video and the Internet, you should be pushing to save broadcast from the forces trying to destroy it.
A while back I heard that you had rejected a $60 million dollar offer from Fox Sports to renew their contract to show Clippers games and were considering setting up your own streaming service.
I can’t say I’m terribly surprised. You leaped pretty much directly from being the CEO of Microsoft to owning the Clippers. At Microsoft, you’ve been immersed in the pace of technological change and the increasing role computers have played in our lives for virtually the company’s entire ascent; once in charge, you saw a path for Microsoft to remain relevant in a tablet world, a path that gave Microsoft its biggest OS embarrassment this side of Vista (also released during your tenure) in the short term but which Apple recently affirmed the wisdom of. You already dipped your toe in the streaming-video revolution with the XBox. You see the direction technology is going and the revolution that is already upending the cable industry and the business model Fox’s RSNs run on, and you want to blaze a trail with a new business model in a territory you’re more familiar with than any other owner of a professional sports team not named Paul Allen. You want to set the course for the professional sports team business model of the future that teams around the country hope to follow. So what’s the best business model to go with?
Let’s say you decide to put up a paywall and offer Clippers games as a subscription service. A source quoted in the New York Post thinks you could make up for the money lost by not taking the Fox deal by selling subscriptions for $12 a month to 500,000 homes. Without even looking I’m pretty confident in saying the average audience for Clippers games on Prime Ticket isn’t even a third of that as it is. So let’s assume that, regardless of price, the most households you can get to subscribe to a service that’s offering just Clippers games is 150,000. To make up the $60 million Fox is offering, you’d need to charge $400 a season. Even at $35 a month, that’s going to cut off a substantial number of households that can’t afford that much, forcing you to increase the price higher, forcing more homes out of the service, and so on. That’s before production costs Fox would have covered as well as the costs of hosting the games on your server and sending it out to customers.
Okay, so you don’t care about how profitable the deal is in the short term; you’re getting out in front on a business model that’s more sustainable than what Fox has and you want to control it all yourself. So long as it’s profitable or even takes a loss in the short term, you’re building a streaming infrastructure you can sell out to other teams and taking in all the advertising money instead of letting Fox take it. But even with all that, there’s another, deeper problem. LA is a frontrunning town to begin with, and despite your recent success and the Lakers’ recent floundering, you’re still very much the #2 team in LA, with even record low Lakers ratings not being enough to fall behind the Clippers. The Clippers aren’t even like most other places with two teams in the same sport (including LA’s baseball and hockey teams) in that they don’t draw from any particular geographic area; no one, I suspect, is truly a diehard Clippers fan, they just follow the Clippers because they can’t bring themselves to root for the Lakers. (In other words, most of your fans are probably Bill Simmons-types, in that they’re expatriates from other places who hate the Lakers too much to shift their allegiance to them but still want to see basketball games regularly as long as they’re in LA.) Donald Sterling’s decades of incompetence isn’t going to be washed away overnight; as successful as the Clippers have been in the last few years of Sterling’s tenure and the start of yours, it’s going to take many, many years, maybe generations, to build a fanbase that’ll follow your team through thick and thin, and that assumes nothing goes wrong in the meantime, that the Clippers will remain as successful and attractive as it is today. Your reign has already shown signs of mismanagement of its own, even if not at Sterling levels; what happens if Jimmy Buss gets forced out somehow, either relinquishing control of the Lakers to the more competent Jeanie or outright selling the team?
You’re counting on the team being and remaining attractive enough that people will pay up to see your team’s games that aren’t on national television. If the team starts to fall back to earth, people will cancel their subscriptions and you’ll have less revenue, and it’ll be that much harder to get back to where you were before. To those people, your team will become all but invisible, even further out of the LA sports conversation than under Sterling, and it’ll be that much harder to get those people back if the team does get good again. That’s before even considering all the fans you’d be pricing out of the market to begin with, or the casual fans who won’t elect to pay you for games they might not watch that much of and whom it’ll be that much more difficult to turn into hardcore fans who will pay.
Okay, so let’s say you go in the complete opposite direction and offer Clippers games to everyone in your television territory for free. You could even go one step further and offer Clippers games to everyone period for free, and try to build the team up as “America’s Team”, but the NBA is likely to frown on that; you’d be undercutting the NBA League Pass package and the RSN deals of all your opponents. So let’s just restrict it to your TV territory for now.
According to the Los Angeles Times, last season Clippers games averaged a 1.04 rating on Prime Ticket, a decline from either 1.25 or 1.27 the previous season. That means 1.04% of all television households were watching a Clippers game at any given time over the course of the season. That may not sound like much, but during the 2014-15 season the Los Angeles market boasted 5.5 million households with television. 1.04% of that number is a little under 58,000. Since you’re offering games for free to people who may have cut the cord, we can assume the number could climb a little higher; 1.25-1.27% would bring the number to around 70,000, but for particularly attractive games the number could top 100,000. Are you ready to provide the infrastructure required to deliver Clippers games to 100,000 devices at once, without buffering, lag, or other problems, especially as audiences demand better picture quality through technologies such as 4K? Can you handle the even larger audiences that would come with an “America’s Team” strategy?
This is why the prospect of streaming disrupting the live-event market in the way it’s disrupted the market for on-demand shows has always been overblown. The true reason sports has become so important to the linear television industry is that it’s the one place where linear television’s strengths shine – its ability to scale to deliver content to many people at once. That doesn’t mean you aren’t smart for blowing off Fox – they can only pay you $60 million because they charge hefty subscription fees to every household in the LA area that subscribes to cable, and if only 70-100,000 of them watch Clippers games (and it’s not like the Kings, Ducks, and high-school and lower-tier college sports are that much more popular), the rest of them aren’t going to take it much longer, and it won’t be long before that $60 million rights fee evaporates. Does that leave you completely trapped? Is there a way forward towards pioneering a new sports-rights paradigm for the twenty-first century suited for the challenges inherent in it?
Yes, and it’s a decidedly retro one: sign a contract with a group of broadcast stations.
Due to its size and relative isolation, Los Angeles has pretty much the most broadcast television stations in the country, even if a good number of them are foreign-language and other multicultural stations. Leaving aside the Big Four affiliates, KTLA, KCAL, KCOP, and KDOC are all general entertainment stations with histories with sports, and the first three have all aired Clippers games at various times in the past. As has always been the case all over the country when broadcast stations have aired local sports, they never aired more than a small smattering of Clippers games, which opened the door for regional sports networks to take the rest and, in most cases (including the Clippers), ultimately take them all. For this strategy, which is also a strategy for the very survival of broadcast television itself, that’s going to have to change.
The key is that, in the long term, this strategy is really a modification of the offer-games-for-free strategy, except it’s moving the delivery mechanism to one that’s better suited to the task, one that can better handle large audiences tuning in for at least the highest-demand games, and one that requires considerably less expenditure on infrastructure to start. You’re still producing the games yourself and controlling their distribution and advertising revenue; you’re simply syndicating the games to broadcast stations within your TV footprint as a means to manage demand while maximizing exposure, giving stations control of a small percentage of advertising in the process to target their specific markets. Selling advertising on the traditional linear television model may give you the chance to increase ad rates compared to the usual online model of serving up custom ads based on users’ personal information, a model there’s a lot of resistance to.
The amount broadcast stations can pay you will probably still be inflated by the cable bundle as stations hope to use Clippers games to maximize retransmission consent revenue, but if there’s no major change in the regulatory environment in the near term and cable operators continue to try to prop up their subscriber numbers with “skinny bundles”, that market may remain intact for longer than you think, or at least longer than the RSN market will. Moreover, in the long term linear television of all stripes, broadcast and cable, will be as much a demand-management mechanism for broadband providers as anything else. A typical optical node on a cable operator’s network, which serves as the last relay point before reaching individual households, serves 500-2000 homes, according to Wikipedia; even on the low end of that scale, if 1.04% of those homes are trying to watch a Clippers game that amounts to at least five households, which may not sound like much but which means serving them all with a single linear television stream could reduce the bandwidth demands to a fifth of what they would be otherwise. With continued technological development, especially the advent of ATSC 3.0 which should be finalized by this time next year, you should be able to reach a wide variety of devices with a bare minimum of need for the Internet to deliver video, including being able to reach mobile devices without needing to use viewers’ data plans or going through wireless carriers, something a cable network or streaming service can’t do. People could use any Internet-capable device, including what we call a television today, to watch the game directly from the broadcast signal (or a relay thereof sent over Wi-Fi) while going through the Clippers’ web site.
Of course, all this assumes the broadcast stations in question are even interested. KCOP is owned by Fox, the very same entity whose $60 million offer you rebuffed, and they are not going to take part in undermining their RSN hegemony and substantial investment in cable networks – unless you convince them that that hegemony and those cable networks are going to crumble anyway and at least this allows them to get a piece of your streaming plan and salvage something from the ashes. CBS, which owns KCAL, might be more receptive but has enough cable dreams and investment in retransmission consent of their own to be hesitant. KTLA might have a different problem – the prospect of regularly pre-empting CW network shows – and would only really be an option to the degree we’d like if the CW shuts down or Tribune no longer takes part in it, and KDOC is the smallest of the four stations we’re considering, and might well put up its spectrum for bid in next year’s incentive auction. But that just underscores the importance and impact what you do could have on two industries – and the urgency of it. We already know anything other than the traditional RSN model will help set the tone for the local sports media landscape of the future. But signing up with a group of broadcast stations won’t just establish an infrastructure that might be, technically, the best one available, one with direct and indirect benefits to numerous parties. By pointing the way forward to an era of increased importance and relevance, it might just save the broadcast television industry from itself.