Ah, cord cutting. More and more people are finding less and less to reason to watch lots and lots of channels. In the US, we love TV & movies. Indeed the US is the epicenter for a large chunk of TV and movies sold throughout the world. No, maybe not the “best” or “most educational”, but for sheer volume of “entertainment” the US has to be number one. Any given cable, satellite or IPTV operator in the US can offer 200+ channels. There’s a bit of overlap in what’s being shown on each channel. For example, out of the 200+ channels available on Comcast, 8 of them are HBO branded channels. Still, there’s a lot of TV that one might be paying for, that one does not watch.

So what?

So, along comes NetFlix. NetFlix is in my opinion the biggest disruptor. Before if one wanted to watch a movie, they had a choice to get in the care car (a.k.a automobile) and drive to BlockBuster or flip around the channels and see what’s available. With NetFlix, people started to go to BlockBuster less and less. Long story short, BlockBuster files for chapter 11.

Then NetFlix starts streaming (ya, I know they started streaming BEFORE BlockBuster files). They put their app on all the game consoles, Apple TV and of course PCs. People start to wonder why they need this, channel or that channel. NetFlix starts showing re-runs of TV shows. Catching up on past seasons of your favorite current TV show because fun as NetFlix has them all a click away.

So, we all start thinking, “Why am I paying so much for cable TV, when so much of what I watch doesn’t come through cable TV. …. oh ya, sports, news and any live event. You really can’t get HD quality sports and news… or anything “live” over the internet. At least non in the good ole’ USA.

Why is that? Is it a tech problem? Not necessarily…

In the USA, NFL.com offers something called Game Rewind in the USA, which rebroadcasts games 24 hours after they finish. Sounds like the NFL had an agreement with the national broadcasters to share revenue on older games. So, initially I thought they (the NFL and the broadcasters) were avoiding the live streaming tech problem by optimizing and caching games for the over-the-net rebroadcasts.

Game Rewind screen. Note that when accessing from Tokyo it redirects to Game Pass in 6, 5, 4…

BUT, it turns out that live streaming IS possible. Right not I’m living in Japan, but I love me some NFL (I’m a 9’ers fan). I’m able to can catch a few games at odd hours on over-the-air broadcasts (NHK), but no control and no choice. Turns out I can watch ANY NFL game LIVE via a service the NFL provides called GamePass. I bought a season of GamePass for $129.99. (Note that the price you see below of 3,970 JPY or about 42.96 USD is the post-Season price. I bought mid-season). I was able to watch, I can watch any game at anytime including all post-season games (yes, even the SuperBowl) LIVE.

Default screen, before logging in or buying.

The games are the broadcasts straight from Fox, ESPN or CBS. If you watch live you’ll get MOST of the commercials, other than a few minutes of what I’m guessing in the regional feeds. There is a bit of a delay, but not much. Most of the games I’d watch later. Logging into GamePass you go straight to choosing the game you want to see. By default the scores are hidden (you can turn it off if you like).

So what about live? Must be terrible quality, right?

Actually it’s excellent. And in some cases might even be BETTER than viewing in the US. During the Super Bowl, I FaceTime-ed with my family in the US while they watched on AT&T U-verse (IPTV). My feed was about 5~7 seconds later than theirs. But for me, the quality was better than they were getting in the US. Granted that’s a U-verse problem, but still. It proves streaming HD quality live events over-the-net is possible.

This is the interface. In full screen it looks like you’re watching HDTV

Anything special? What kind of setup?

My set up in the apartment in Tokyo has a Yahoo BB FLETS FTTP connection (fiber-to-the-premises via NTT). I have a Mac mini connected to my 42-inch TV via HDMI. I just go to  gamepass.nfl.com on Safari (maybe other browsers work fine) and log in. I can click “Live” which will show me whatever is on the NFL channel or I can pick the game I want to see. If I’m watching delayed, I can choose to watch “Condensed Games” where they cut out all timeouts and long spaces between plays. This is great especially when you want to see the game, but not the entire flow. Say you want to see a playoff game where you don’t care about either team, but whoever wins is who YOUR team will be playing, so you just want to see who to watch out for. I found I could pound through a game in less then 30 minutes. Of course they fast forward and rewind features too.

For me Game Pass is ideal. It’s exactly how I would design it. I thought maybe they’d have no-so-good NFL Channel announced games, but it was full feed from the networks. One inconsistency that didn’t bother me that much was that sometimes when watching non-live game the commercials were still in there, other times they’d been cut out. I didn’t pay attention enough to see if that was a timing issue (i.e. if I watched 4 hours after the game vs. watching 2 days after the game, giving them time to cut commercials) or if it was per broadcaster issue (i.e. Fox cut’s the commercials but CBS didn’t… that might be the other way around). My only real complaint is that the 9er’s didn’t win.

So, why not cut the cable in the US?

During the New Year break I was home and tried to watch Game Pass, but no such luck; it’s blocked in the US. Obviously the NFL is getting money from me, but they expect me to NOT be in the USA. I can pay for it with a US credit card and in USD, but I can’t use the service in the USA.

So, it’s obviously just a choice that the networks make, not a bandwidth problem. Yes, if 5 people were trying to watch 5 different games at the same time there’d be a problem, but most households 2 TV, not 5. And most MSO’s only allow you to watch and/or record 2~4 programs at a time.

For clarification sake I want to make a distinction here about the difference between IPTV and over-the-net TV. The terminology is somewhat interchangeable (and some may argue they are not different) but what I mean here is: IPTV = signal over IP to an STB (set top box). Over-the-net (a.k.a. over-the-top) television is NetFlix, Hulu, HBO Go, Apple TV/iTunes and my beloved NFL GamePass; where you need a computer or other internet device (iPad, Xbox, Roku, Apple TV) and viewing is done on an app or a browser. Authentication is usually simple user/password based and in the case of NFL Game Pass there is may be some location based verification. IPTV verifies via the STB itself. No STB, no TV… and you can’t take the STB with you when you’re traveling.

So, what? Why not just buy can’t I buy the few channels I like?

On the business side, IPTV is something the telecoms can sell. Over-the-net TV is a cost to the MSO: Buying $40 of internet vs. buying $40 of internet and another $50 in TV fees. Throw in voice and a typical bundle for a land based MSO is usually $100 USD. Talk about ARPU boost!

It’s no wonder the telecoms are not supporting DSL and copper based customers anymore. They want high revenue with relatively low cost FTTC/P/H customers they can sell EVERYTHING to. Here’s a story about the decline in support for metal (copper) PSTN only customers.

From a user perspective, it’s not so much that we want to have over-the-net, we really want more control of what we pay for. We’re often buying a bundle of channels, but really don’t watch more than a handful.

In Conclusion: What is Saving MSO’s? LIVE TV

In the USA today we can get just about anything we want to watch except LIVE TV. No one is streaming, including local channels, all news and all sports networks. We know it’s possible, but they (content providers, broadcasters and MSO’s) are choosing not to do it. The only bread out of the 3 are the content providers that are leveraging the internet to circumvent a relativly limited MSO-centrid distirbution channel.

Or MSO’s can start to play nice. They can let us pick and choose the channles we want and only pay for those channels. And if they can make our internet speeds faster, we will likely be prone to buying more bandwidth.

Just 10 years ago, here was the entertainment landscape in the US

• TV = Mostly passive watching. Most people buy cable TV service that has tiered bundles for channels. Generally low, medium, high priced bundles with options for sports packages and international channels. TV and movie production houses and TV broadcasters still had it pretty good. Business was simple and generally had a symbiotic relationship.
• Internet = Broadband awakening, but for the most part web browsing. Video was out there but no one was really making money selling movie downloads.
• Netflix was already getting traction by starting a monthly subscription to renting movies, but sending DVD in the mail to it’s customers. Blockbuster hadn’t taken any effort to stem the loss of customers due to Netflix.
• Apple was selling music, but wasn’t selling movies yet. No iPhone, no iPod Touch, no iPad. Certainly no Android.
• YouTube wasn’t even founded yet, and certainly not owned by Google.

Fast forward to today. It’s a movie, TV and internet melting pot.

TV and Movies

Watching TV and movies at home has changed dramatically. More and more people are being entertained by something other than their TV. YouTube and iTunes took eyes off the TV and iOS and Android devices take eyes away even more. Blockbuster is bankrupt. Redbox has traction.

The game changers are really Apple and Netflix

Netflix is the DVD and over-the-top streaming king in the US. Here some inforgrapics from Sandvine:

Apple is the king in over-the-top VOD and rentals. What really sets Apple apart from is rivals, is that it’s a true global company. See this report from MacStories.net.

Because they are sharing revenue with the production studios, there isn’t any conflict there. But the MSO’s are losing money and it’s costing them more than just lost sales. Which is why the cable companies and Netflix are at odds.