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
Neal McLain (nmclain@annsgarden.com)