Intel to 'destroy' CATV market with 'ala carte' box ?

[lektrode]

just caught this one over at biz insider

good news for those of us disgusted with the cable game?

Intel Is Reportedly Going To Destroy The Cable Model By Offering People The Ability To Subscribe To Individual Channels

Intel is reportedly on the cusp of delivering something that consumers around the world have been wanting for a long, long time. Kelly Clay at Forbes reports Intel is going to blow up the cable industry with its own set-top box and an unbundled cable service.

Clay says Intel is planning to deliver cable content to any device with an Internet connection. And instead of having to pay $80 a month for two hundred channels you don't want, you'll be able to subscribe to specific channels of your choosing.

Here's the key paragraph:
This set-top box, said by industry insiders to be available to a limited beta of customers in March, will offer cable channels delivered “over the top” to televisions anywhere there is an Internet connection regardless of provider. (Microsoft Mediaroom, for example, requires AT&T’s service, and Xbox has limited offerings for Comcast and FiOS customers). For the first time, consumers will be able to subscribe to content per channel, unlike bundled cable services, and you may also be able to subscribe per show as well. Intel’s set-top box will also have access to Intel’s already existing app marketplace for apps, casual games, and video on demand. Leveraging the speed of current broadband, and the vast shared resources of the cloud, Intel plans to give customers the ability to use “Cloud DVR”, a feature intended to allow users to watch any past TV show at any time, without the need to record it ahead of time, pause live tv, and rewind shows in progress.

This is a holy-grail of sorts for people who subscribe to cable.

We've been skeptical of Intel's ability to make a dent in the TV market. If it somehow manages to deliver this unbundled channel option, we're more optimistic Intel could have success.

Before anyone gets too excited, Janko Roettgers at GigaOm is skeptical it happens. Roettgers knows the TV business very well.

The reason it's unlikely to happen is that content companies don't really want to see cable blown up. It's been very good to them.

Last summer, Peter Kafka at All Things D poured cold water on the idea of Intel unbundling. Not only is it going to be hard to make happen, it's unclear if it would even save money for cable subscribers:

Those bundles are core to today’s TV ecosystem. And the TV guys insist that consumers really don’t want “a la carte” programming, because if they do, the channels/shows they like today will end up costing much, much more.
Disney, for instance, charges TV distributors about $5 for every subscriber who gets ESPN. And, by some estimates, only about 25 percent of cable customers actually watch ESPN on a regular basis. So if you unbundled ESPN, the per-subscriber cost might shoot up to $20 or more, to account for the 75 percent drop in its customer base.

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[Adeptus]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

Heh, only 1 hour ago I was on the phone with my cable company to cut 50% of the channel packages off my list, mostly movie packages and a couple where I was only interested in 1 channel from the entire package.I'm signing up for Netflix. Should have done it months ago. The only package I'm keeping is the news package which excludes BBC for some strange reason (it'd bundled in an 'entertainment' package - whatever, their loss.)

So if you unbundled ESPN, the per-subscriber cost might shoot up to $20 or more, to account for the 75 percent drop in its customer base.

Yeah right, and then out of the 25% that used to watch it, maybe 5% will be willing to pony up $20 for one channel. So then if the subscriber base drops to 5%, it would logically cost $80 for that 1 channel... at which point, the subscribers would dwindle down to 0.5%, and then the cost would rise to $800+... etc.. See the problem with this logic? The reality is that the cable channel would keep the cost the same or only slightly raise it at most, else, au revoir!

[jk]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

the trend in technology is the breakup of monopolies. ma bell was broken up, and within the regionals you could choose different long distance providers which used leased lines. wintel has been replaced by a variety of os choices irrespective of chip source. a handful of cellular companies, not just one and not just two. deregulation of electricity generators- i can go online and change the company supplying [but not delivering] my electricity with a click. cable tv has had regionalized monopolies, with satellite as its only competition. having, e.g., comcast broadband should not mean being limited to comcast-supplied content. in some fashion or other, broadband will naturally undermine the cable suppliers' monopolies on content-delivery.

btw- full disclosure: this is a comment on how systems work. i haven't watched tv for over 30 years, and don't have any tv service whatsoever. sometimes i watch colbert over the net. i streamed some of the presidential debates.

[c1ue]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

I'd say this idea would be more credible if it were not for the fact that the cable companies' monopoly is based on the wires, not the set top box.

So long as a cable company owns the wires bringing signals to each house, it really doesn't matter what the set top box can or cannot do. It isn't like the technology to be able to deliver individualized channels doesn't exist - that's what pay per view is all about.

[jk]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

I'd say this idea would be more credible if it were not for the fact that the cable companies' monopoly is based on the wires, not the set top box.

So long as a cable company owns the wires bringing signals to each house, it really doesn't matter what the set top box can or cannot do. It isn't like the technology to be able to deliver individualized channels doesn't exist - that's what pay per view is all about.

the electricity suppliers in deregulated states also own the wires, and are paid for their transmission services. however, they are only one among many generators/suppliers which might be chosen to supply the electricity delivered over those wires.

legacy phone companies own the wires over which dsl may be supplied. a variety of companies supply dsl services over those same wires.

you can get a cable run to your house and just take internet service, no tv service. then stream whatever.

[c1ue]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

the electricity suppliers in deregulated states also own the wires, and are paid for their transmission services. however, they are only one among many generators/suppliers which might be chosen to supply the electricity delivered over those wires.

True, but the transmission networks are not fully private as are the cable networks. Transmission networks are also transmitting a completely homogeneous product.

As for DSL - you can use it for internet, but you cannot use it for fibre optic level communications. Equally DSL access is primarily in the urbanized areas.

As for running wires - again depends on the situation. In most cases, the 'running of wires' you speak of is actually just a last mile connection. If the fibre optic cablehead is private, connecting to the private network is still at the discretion (and pricing) of the owner.

A better analogy is the water the runs through a stream. Those upstream control everything downstream of them unless there are already water rights negotiated. For cable companies, they own all the upstream.

[Adeptus]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

I'm wondering if you guys are getting hung up on the "set top box" terminology or who owns the wires. The article is refering not to the delivery of TV channels over standard analogue or even digital technology as pretty much all cable companies do, but rather over IP, over your cable (or telephone) provider's internet service to your home. As for the cable/telco's controlling the downstream, it is possible to some degree. They could block intel's broadcasting data center's IP blocks, or apply QoS (quality of service) controls to prioritize such traffic to a degree that it becomes too slow or unreliable to be of any use (see Net Neutrality). Further, they could place man-in-the-middle boxes in their distribution hub sites (cable lingo for data center), to identify channel broadcast signals and block them, modify them (i.e. insert local ads) etc. Technically, a lot of things can be done by the cable company to disrupt or block the service; however, legally that is another matter all together, and in theory the Internet is still mostly 'free' despite the many anti neutrality bills in government.

Further, this technology would and in fact does (I have "it" at home) work fine over ADSL services; what is required is that the DSLAM (the very big box on the other end that your ADSL modem connects to) is within a relatively short distance of your house. DSL is very distant dependant. As distance increases, bandwidth decreases. My current TV service, is in fact provided over ADSL...all 200+ channels. The difference is, only 1-5 channels is broadcast to you at a time (depends on how many receivers you have at home), unlike coax cable, where there is enough RF bandwidth to transmit all channels simulteneously whether in analogue or digitally compressed mode.

What is happening (and has been happening for the past 10 years) in both the telephone company and cable company wired networks is that the last mile of copper is shrinking each and every year. Both types of organizations have Hybrid fiber/copper networks, wherein fiber opic reaches out from their data centers into neighbourhoods in all directions, but limited distance, because it is more expensive to lay out new fiber cable than to just do maintenance on existing copper wires. But each year, both types of organizations are extending the distance to which the fiber reaches out from their data centers, eventually leading to FTTH (Fiber to the Home) - the holy grail of transmission mediums!

Fiber is the ultimate conduit because with the same cable, you can simply replace the end electronics every few years and gain vast improvements in speeds; whereas coax and twisted pair copper cables are fast reaching their limits, only improvements in algorythms and shortnening of transmission distances have increased their output bandwidth. Contrastly, we've seen fiber go from 10Mbits, 100, 1000, 10,000, 40,000 and recently 100 Gigabits (100,000 Mbits). Further, with light wave splitting technology (WDM - Wave division multiplexing), you can now send multiple streams of 1Gbit, 10gigbit etc through a single fiber optic. This is not news, but what is news is that the number of lightwaves sent over a single fiber has increased over the past few years. First it was 2, then 4, then 8, 16 is now commonly used by field techs who deply this technology in buildings, but in data centers, or between data centers, there's already 32 wavelengths that can be sent over a single fiber optic cable, and manufacturer labs are playing with 128 wavelength channels. Needless to say, there is no technical shortage of bandwidth anywhere on the horizon, the limitation is only how fast your telco/cable company can deliver the service to your home and make the necessary infrastructure investments in the back end to support the system. I see it as an inevitability for all urbanized mid to large sized cities, though it may still take many years to get there (fiber to the home).

But getting back to the point, Intel, or whomever putting out an IP based set top box is thus also an inevitability, and even the current technology - whether a cable modem or adsl modem, can deliver effective TV over IP service, so long as the Internet speed is fast enough 15Mbits+ for most homes to be able to have 2 TV channels + surf internet at reasonable speeds simultaneously.


Adeptus,

PS. I've worked at a Telephone company configuring DSL services in the Data Centers around year 2001, worked for a cable company in North America deploying cable modems for the first time as far back as year 1998, and was the lead Engineer designing from scratch and deploying a European country's first national cable modem network in 2000.

[Adeptus]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

Let's just hope Intel puts out something a bit better than Sony's Web TV....

Obligatory Onion Video (warning: *LOTS* of swearing, but funny)

[c1ue]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

But getting back to the point, Intel, or whomever putting out an IP based set top box is thus also an inevitability, and even the current technology - whether a cable modem or adsl modem, can deliver effective TV over IP service, so long as the Internet speed is fast enough 15Mbits+ for most homes to be able to have 2 TV channels + surf internet at reasonable speeds simultaneously.

The US average speeds are above the number you state - assuming 15Mbits/s:

http://www.speedmatters.org/content/...elarryvid_desc

The problem is - the distribution varies widely. I had AT & T's baseline DSL service - within 1000 feet of a DSLAM in a major city, and was getting under .8 mbps.

Much of Fresno, California, for example, is out of range of a DSLAM.

I would also note that I very much doubt 15Mbits/s is sufficient for 2 HD channels. HD would likely require more like 15 to 20 mbps - which is more than 5x greater than 15 Mbits/s.

As for cable companies filtering out IPs - this is not only feasible, it is quite simple and legal. As the cable networks are fully private, no one can dictate that other company's data must be transmitted. These companies furthermore have a perfectly legitimate business reason to prohibit this: they are protecting their existing broadcast business. Barring a nationalization of cable lines, I don't see this situation changing.

[jk]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

i think the cable companies are granted licenses by localities, otherwise, how have they established their regions of monopoly?

[santafe2]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

i think the cable companies are granted licenses by localities, otherwise, how have they established their regions of monopoly?

It all started with John Walson. He sold TVs in a valley in PA and ran cable up to the top of a mountain so his antenna(s) could deliver programs to his customers. I suspect cable hasn't exited the mom and pop period of monopoly. When it does big entertainment might be able to **** us like big banking. I can't wait for that.

[Adeptus]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

The problem is - the distribution varies widely. I had AT & T's baseline DSL service - within 1000 feet of a DSLAM in a major city, and was getting under .8 mbps.

Your problem was likely one of the following:
* They lied to you about distance from DSLAM
* The quality of your cable to the DSLAM was degraded (i.e. too much RF interference, crosstalk, grounding, etc issues). These are fixable, but cost the telephone company $$ to fix, and they can't really charge you to fix their own lines.
* You may have had internal home wiring issues degrading your service. Your telephone company could have fixed these for you, but very likely for a hefty fee.
* The DSLAM and/or your modem was misconfigured
* There was excessive backbone saturation / oversubscription of available bandwidth , and/or certain IX (Internet Exchange) peer points were congested.

I would also note that I very much doubt 15Mbits/s is sufficient for 2 HD channels. HD would likely require more like 15 to 20 mbps - which is more than 5x greater than 15 Mbits/s.

Raw? Perhaps , but that's why we have video codecs (coding / decoding compression software) . Many HD channels today are encoded with H.264 , which your set top box has hardware chips to decode on the fly.
According to this chart (not sure how reliable the source is though), we can do full 1080p (FHD) between around 1 to 4Mbits. I recall off the top of my head numbers around 2.5Mbits for 24 frames/sec * 1920x1080p. So 15Mbits is more than enough for 2 simultaneous HD channels + relatively fast internet surfing.


I should add, that there's already more advanced codecs than H.264 that vastly improve video compression; however, they are not as of yet widely available as there's costs associated with changing out all the hardware chips to support these new codecs. Further, some of them are license based, so set top box manufacturers still need to collect ROI on existing systems, before migrating to better ones that may end up costing them more. But it will eventually happen, because the latest TV fad coming out any day now is "Ultra High Definition Television"! These UHDTVs (read about: Sony's, LG's, Samsung, JVC, etc) will come in two main formats - 4K (3840 × 2160) and 8K (7680 × 4320) , respectively, 2 times and 4 times our current (1920x1080) HD. Aside from prettier real life pictures, the other justifying "need" for these is so that manuacturers can create even larger screens without loss of picture quality. If you take 1080p HD and put it on a 150" screen, all of a sudden it doesn't look so impressive. So yeah, that brand new HD TV you just bought on boxing day is soon to be obsolete! ;-)

As for cable companies filtering out IPs - this is not only feasible, it is quite simple and legal. As the cable networks are fully private, no one can dictate that other company's data must be transmitted. These companies furthermore have a perfectly legitimate business reason to prohibit this: they are protecting their existing broadcast business. Barring a nationalization of cable lines, I don't see this situation changing.

Actually, you are mistaken. First it is illegal (to block/degrade internet service) - officially, and in the USA, see my quote below. The reason they don't have a perfectly legitimate business reason to prohibit/block content is because the service they are advertising is access to the"internet" - which is made up of millions of servers and computers world wide. The second they start blocking or degrading access to chunks of it, it takes away from the meaning of "internet". This is to some degree what ended up being the downfall of AOL . They tried so hard to control the content their users had access to, that eventually users just started leaving. The same thing with the North American high speeed "@Home" services of the early 2000's, where unwanted content was shoved into subscribers faces. More importantly, any country that allows this to go too far will eventually see its technology industry competitiveness lose against foreign more open and transparent countries. ISP degredation of internet services would for example prevent technologies like Skype, Netflix, all kinds of online gaming, and many Enterprise SaaS (software as a service over the internet ) to function, to name but a few. ISP content control through Internet pipes = very bad idea! Besides, there's very poor justificaiton for throttling connections claiming lack of bandwidth, as I've mentioned in my previous post, bandwidth is cheap and getting much cheaper very fast - by factors of 10 to 100 in a matter of every 3-5 years, with no end in sight thus far. Their best arguement might be inability to achieve their projected ROI on existing infrastructure... but hey, that's their problem for overestimating ROI and underestimating internet evolution.

RECENT USA NET NEUTRALITY LAWS:
"On 21 December 2010, the FCC approved new rules banning cable television and telephone service providers from preventing access to competitors or certain web sites such as Netflix. The rules would not keep ISPs from charging more for faster access. Republicans in Congress plan to reverse the rules through legislation.^[22] On 23 September 2011, the FCC released its final rules for Preserving a Free and Open Internet. These rules state that providers must have transparency of network management practices, not block lawful content, nor unreasonably discriminate in transmitting lawful network traffic.^[99] These rules are effective 20 November 2011."

Source: http://en.wikipedia.org/wiki/Network..._United_States

[mooncliff]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

I got an AppleTV and have been very happy with Hulu Plus for $10 a month, watching unbelievable numbers of full length BBC PBS etc documentaries, and renting a new movie once in a while.
Three of my friends did the same and everyone is very happy to have spent $99 on the AppleTV. Also, it uses up to 30 times less electricity than using an XBox, PlayStation, etc. to do the same job. It is barely warm when running.

[Adeptus]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

My Samsung smart TV has a built in Netflix, Hulu apps, amongst others, oh and my electrical savings are infinite compared to even AppleTV, as ZERO additional boxes are required :P (Sorry, I have this uncontrollable instinct for taking a stab at Apple every now and then ).

My problem was, we don't get Hulu in Canada, but that's nothing a little $8/mo VPN into the USA couldn't fix. It also greatly improves my Netflix service, given in Canada our Netflix movie choices are much more restricted.

[mooncliff]

Re: Intel to 'destroy' CATV market with 'ala carte' box ?

Actually, yes, I think my new TV has built in apps, but I got the AppleTV more than a year ago when I had my old TV that didnt.
The remote that comes with it sucks for searching, but if you install the remote app on any device, then it is fine.
I was thinking it is much better than trying to get a computer for my aunt. She is afraid of computers, but wants to watch YouTube, so I might get her WiFi and an AppleTV.
I am also going to get one for my mom. She used to have a Microsoft WebTV, but she is afraid to use the computer, so she never watches YouTube even though there are all these things she wants to see. The AppleTV is similar to the WebTV, so hopefully she will use it. When I show her stuff, old songs, TV programs, etc., she loves it, but she wont even touch the on button on an iPad...

How much electricity does your TV use? Samsungs are pretty good. I have a Sharp 3D Quatron, 48 inches, and it only uses 70 watts.
We just got Hulu in Japan a few months ago, I think. It is good because everything is subtitled.
I am glad I did not buy any of the programs that I can now see on demand for free.

Actually, what will kill cable is that it is BROADCAST, whereas watching things on AppleTV are streaming on demand. Nothing to record, etc. I was on the verge of buying a new digital recorder, so there went that.

For me, the AppleTV was more than free. I spent $100 dollars on it, but that is how I discovered Hulu Plus existed. No one else I know knew about it. We were all paying for subscription cable at $30 a month, which as I said is really bad because you have to program a recorder. I used to spend a couple of hundred a year on BluRays, but hardly bought any since. So, I would say that since three other people did what I did, we spent $400 in total on the device, but cut our total annual subscription by $800 a year. We also all avoided buying new recording devices, which now in view of the streaming would have cost $2,000.

The set top boxes in the US use a criminal amount of electricity.