It has become clear that we are entering an age of ubiquitous video content. we want our content everywhere, anywhere, we want it now, and we want in entertaining. If you think about where we have come from on the internet it is a natural evolution. We started with rather static content which was just a fancy word document with pictures. Then we started incorporating basic display ads, followed by more lively content that eventually led us to YouTube. Now that same YouTube content is available everywhere – I could be on Facebook, iPad, iPhone you name it, it will be shared and made available. Now we are entering the Netflix era. We are no longer viewing just uploaded content but live streaming of content. To be clear this has not been new this year, we have been doing it for a while we view our news outlets online, like MSNBC.
Going back in time I remember 10 years ago I tried to view a live concert from New York at my office in Redmond. It was Madonna doing some party in New York. I tried and it was awful. It was hard to connect and when it did, it streamed for a few seconds before it cut out. It was a very frustrating experience and I am not even a Madonna fan. Around th e same time iw as working with a ISP in Green Bay, WI doing a test with voice over IP (VOIP) with streaming video. Again an awful experience and I realized to do any quality video you basically had to own your own studio. But that was 10 years ago and how far we have come.
Today we get video through a number of sources and in different formats. With the release of the iPhone 4 we now have the ability to do voice and video phone calls. The idea of a mobile device, be it an Android, iPhone or iPad without an available Netflix application is a non starter for the device that does not have it. Netflix is becoming the prime example of making high-end video content (movies, television shows etc..) available whenever you want it and now it ois going global. The market believes as well as at last glance Netflix (NFLX ) is trading at over $196 – to think that a year ago it was under a $100.
There are issues that are starting to come to the forefront. When the internet first came of age we had a number of companies laying a lot of fiber in the ground. Most of it was not used. It just sat there idle. We referred to it as dark fiber. However that was because what we were sending over the net was small files and video was not really that big at the time. Today we actually are sending large files (not entirely true as streaming technologies take video files and break them down into small chunks..but as a whole the file is large). We are also streaming live content so you start to see a web with constant and massive traffic flows.
With the rise of mobility and content on the go we are now entering the last great phase and the holy grail of device interaction: the television. In recent years television has undergone, popular, but what I view as small steps as we transition to something far greater. many people have either a LCD or Plasma flat screen TV. A Tivo device connected for recording. A lot of road warriors had sling boxes enabling them to view there local Seattle programs while in Orlando, As has been mentioned we can stream movies via Netflix or the xFinity services from Comcast. Our televisions are becoming more interactive. The game consoles we connect to our TV are becoming media hubs, the best example being the XBox. With what they can do with Wii or Kinect they will become home fitness devices. There has been a recent slew of new products around TV. Both Google and Apple have announced appliances for the television. Microsoft has been trying to tackle this game for nearly 20 years. It’s an exciting time.
There will be challenges moving forward. Mainly from the incumbant service providers either cable companies like Comcast, Cablevision, Cox Communications or the traditional telco’s AT&T and Verizon. They have one asset cherished above all…the last mile. That is literally the cable or phone line that runs from the curb into your house. It’s how we get access to the internet through DSL or Cable Modem. It’s how all those great services mentioned earlier are delivered into our home. It is the holy grail. When companies devise plans to sidestep them they fight back. In the market place, but more importantly on Capital Hill. They are in the offices of your congressperson or Senator. They bring in their heavy hitters to do the work: Lobbyists and executives. I witnessed this first hand on a trip to DC as a bus was loaded and paraded around the hill, clearly labeled “Comcast Executives”. They were not there for consumer benefit, though they would say they are.
If one thing is certain, the future will come. There will be those who try to stop it. However with the advancements made in wireless bandwidth with 4G and then 5g coming down the road in the next 5-7 years things will start to change very quickly. We are now seeing satellite services propping up again. The last mile will die and we will be temporarily free. We will get our content and human interaction wherever we want it when we want it. It’s a very exciting time in the industry as things only dreamed of 15 years ago are now on the verge of becoming reality. Just think on some Saturday morning on my 40″ LCD I will be able to view all my favorite soccer games with my 3 boys in my pajamas at once while having my morning coffee, now for me that will be heaven.
Good Night and Good Luck
Hans Henrik Hoffmann November 30, 2010