Think About That For A Minute

It’s not a secret that the cable industry sees true Video on Demand, or whatever we ultimately choose to call it, as one of the main differentiators in our competition with satellite and broadcast video delivery. It is taking longer than I would like to see the industry coalesce around a strategy to roll out and promote the service. I understand the reasons for the slow tempo – including technical and legal (copyright) challenges. But it will be rolled out, and we will make it clear that cable Video on Demand offers a true "library" of titles that the consumer can choose from at his/her convenience – something the DBS folks can’t do, even if they spend lots of money calling their service "VOD." The alternative method of getting true archive, or library-type video service, to customers is via broadband network data delivery – what has come to be known as "streaming video." As technology moves forward, I am not sure that the "network" distinction between cable’s video and data service (especially if VOD is made available on "servers" from the headend and distributed to the home in an "Internet protocol" (IP) format) will be significant. But for now, let’s assume our VOD and "streaming video" are different, and the latter is a data delivery service, not a multichannel video distribution service. I am making these preliminary definitions clear because I think things are going to get increasingly confusing from both a legal and marketing point of view as we move forward, and we need to start considering the implications now. Actually, we should have started a while ago. A good example of the upcoming confusion is the announcement by TiVo and NetFlix that they have entered an agreement to create a service that would, in essence, "stream" video – primarily movies, from the NetFlix catalog down to a special TiVo recording box in the home. Thus NetFlix subscribers will be able to select movies from the NetFlix library, get them delivered via a data network (presumably either cable modem or DSL) and store them on a special TIVO box that will decode the secured data and play it back on a home television set. Sounds interesting. But if a cable operator did that with our data service, wouldn’t the watchdogs be howling for "open access?" Remember when the industry was attacked on the grounds that we were designing a technical system that could be used to exclude the data of others – that we would be a "gatekeeper?" Our response was that we don’t restrict the information available over our system. Anyone can use their home computer to go anywhere they want on the Web. We do not discriminate in the data feed. But NetFlix and TIVO certainly intend to do so. The movies they send down the "information superhighway" will be specifically encoded and restricted for use on their converter/DVR box. It’s a computer, sure – but one that can talk only with one server, owned by one company. Is there any problem with this? I don’t really know. The FCC requires cable to have uniform standards so anyone can now build a cable box (CableCard) into their equipment and it will work with our system for the delivery of video. TiVo and NetFlix apparently are designing a closed video delivery system to work on our open network – on the data side. A problem? Don’t know. Their first problem will be to get the rights to distribute the video, so it may be some time before we find out.