[opendtv] Re: IP-Based TV Will Revolutionize Entertainment

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sun, 1 May 2005 10:24:28 -0400

At 10:10 AM -0400 4/29/05, John Golitsis wrote:

Well since you asked...

First, let's define the real issue here:

What is really at play here is the walled garden business model, 
versus the ability for ANYONE to deliver their content to any 
audience, no matter the size of that audience.

The walled garden started out with just a handful of channels, 
delivered via OTA TV. You could choose between ABC, CBS, NBC, PBS, 
and perhaps a few independents if you lived in a large city.

The Feds were so concerned about the ability of these networks to 
control the content that reached the public that they created the 
Financial/Syndication rules to protect independent producers, giving 
them at least 'some'access to the only delivery network available at 
that time.

Then cable came along and added choice. But cable built their own 
vertical infrastructure controlling both content and carriage. As I 
said in my March BE column - Won't Get Fooled Again? 

  "Meet the new boss, same as the old boss."

We've spent several decades adding choice for viewers, but the same 
rules apply - gatekeepers control what you get to see. They claim 
that ala carte program choice would be more expensive for viewers. 
They are lying through their teeth.

The ability to pay only for what you want would bring an end to the 
practice of charging ever more for the stuff that the gatekeepers 
allow us to see. As I have said before, no generic browser channel 
could afford to hold out for subscriber fees, if they faced the 
threat of losing a big chunk of their audience when viewers could 
choose whether to pay for that channel.

The telcos are making noises about being open to ANY content. and to 
an extent they may have no choice, as the gatekeepers may withhold 
the most popular content from their networks. Given the fact that 
they will be routing content to their subscribers, rather than 
broadcasting a subset of all available content, the new IPTV walled 
gardens have the potential to be far more open. And the Telcos may 
use ala carte as a competitive tool to break down the walls around 
the entrenched competition.

Ultimately, however, there are many new business models emerging that 
threaten the walled gardens. The most obvious is the ability of the 
content producers to go direct to the consumer via DVD. This has not 
been lost on the conglomerates, who are exploring new ways to deliver 
content direct to consumers, who are willing to pay directly for that 
content and other information that is carried on those silver discs. 
For example, there has been speculation about the ability to click on 
objects during a performance and get depth information, such as the 
clothing that the talent is wearing. But this is complex, and most of 
us would rather watch the show than interact with it in real time. 
But it is trivially easy to add some files to that DVD with all of 
the information about the products that were embedded in the show. We 
are just beginning to explore new ways to monetize content.

Ultimately, it will be difficult for the gatekeepers and walled 
gardens to defend their ivory towers. Already we are seeing 
successful models of independent producers bypassing traditional 
distribution, going direct to the consumer. This trend will only 
continue to grow as bandwidth continues to multiply.

Ultimately content is where the real money is, and distribution will 
become a commodity. This is not to say that the big media 
conglomerates will disappear - it takes deep pockets to buy the 
rights to major sports franchises and top drawer talent.  What will 
change is the ways in which we pay for the privilege of watching the 
programs they produce.


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