The Future of TV: Why NewTeeVee Is Wrong

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Editor’s note: Mark Cuban published a post on his blog yesterday titled The Future of TV is……TV in which he proclaimed that consumers don’t want over-the-top video, but instead want to watch cable TV and VOD on their new, shiny HDTVs.

Naturally we disagreed, and couldn’t resist making our case with a post titled The Future of TV: Five Lessons for Mark Cuban — prompting him to pen a reply, which he sent via email. With his permission, we’re providing a very lightly edited version of his email below. It’s a point-by-point response to our post, so we recommend first reading that and his original essay first.

  1. Sports on TV. Horrible example.  The only thing that sells is sports during the day. That’s why March Madness and baseball work.  People can only get them on their computers at work. There is no reason to watch via VOD if you are sitting in front of your TV. Internet people may want to watch this way. The rest of the world just turned to CBS or the network carrying the game.
  2. This is the “I told you streaming works great ” example everyone uses. It’s a great example of what streaming on TV could be….if every content provider and TV Provider ignored the competitive threat of Netflix.  Why would the content owners continue to license the content to Netflix for peanuts and put at risk BILLIONS of dollars? Right now Netflix has been BRILLIANT at monetizing previously unmonetizable content. But as the balance of revenues change, so could their access. They already had to give up a 28-day window on movies. You don’t think that is their last concession, do you ?The other thing to note is the percentage of Netflix subscribers that already subscribe to a TV provider. Netflix has to be concerned that it will be easier for those people to give up Netflix if their TV provider expands their VOD offerings and allows for queuing of streams to a TV channel than it will to give up the TV provider.
  3. I own one of everything, from Blu-ray to Xbox/PS3/Roku/Seagate Direct to Hard Drive/Tivo and every satellite, telco and major  cable provider (at home or offices around the country). I make a point to know what is out there and how it works. I have spent points on Xbox, streamed via Blu-ray and used applications. All have value beyond their primary application. But they are complementary, not primary.Now some may say that you can only use your TV for one thing at a time. So whatever you are using it for is the primary application. Slingbox users will tell you otherwise.  TV Everywhere applications will prove otherwise. Then again, you have the problem I mentioned before and which Internet folks seem to ignore, the business model of content providers and TV providers.  They aren’t stupid. They won’t continue to give content away or sell it on the cheap at the risk of losing BILLIONS of dollars in revenue.
  4. Wrong again. Remember that thing called a router that gives you Internet access ? Your TV can offer Internet connectivity, but there is always another box between you and the Net.  How easy is it for most people to configure to make sure they get the streaming bit rates they need? Oh, and what about all the different 802.x standards? It’s hard enough to call Time Warner, wait till they have to call Cisco to get help and try to figure out why their Netflix is buffering all the time. Or when they can’t figure out why every time two of those new TV sets with Internet access are in use at the same time the Internet in the whole house slows to a crawl. And don’t even begin explaining why Internet video is all bit starved and looks far worse than anything you got or get in High Def  from your TV provider.
  5. I can’t say more people won’t cut the cord. That happens in every recession and its worse in a great recession. You got me there.

Picture courtesy of (CC-BY-SA) Flickr user Keith Allison.

Mark Cuban is the owner of Landmark Theatres and Chairman of the HDNet cable network. He blogs at Blogmaverick.com.

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