Mark Cuban doesn’t understand television. He holds a belief, common to connoisseurs the world over, that quality trumps everything else. The current object of his faith in Qualität Über Alles is
HDTV. Says Cuban:
HDTV is the Internet video killer. Deal with it. Internet bandwidth to the home places a cap on the quality and simplicity of video delivery to the home, and to HDTVs in particular. Not only does internet capacity create an issue, but the complexity of moving HDTV streams around the home and to the HDTV is pretty much a deal killer itself.
“HDTV is the Internet video killer.” Th appeal of this argument — whoever provides the highest quality controls the market — is obvious. So obvious, in fact, that it’s been used before. By audiophiles.
As January 1, 2000 approaches, and the MP3 whirlpool continues to swirl, one simple fact has made me feel as if I’m stuck at the starting line of the entire download controversy: The sound quality of MP3 has yet to improve above that of the average radio broadcast. Until that changes, I’m merely curious—as opposed to being in the I-want-to-know-it-all-now frenzy that is my usual m.o. when to comes to anything that promises music you can’t get anywhere else. Robert Baird, October, 1999
MP3s won’t catch on, because they are lower quality than CDs. And this was true, wasn’t it? People cared about audio quality so much that despite other advantages of MP3s (price, shareability, better integration with PCs), they’ve stayed true to the CD all these years. The commercial firms that make CDs, and therefore continue to control the music market, thank these customers daily for their loyalty.
Meanwhile,back in the real world of the recording business, the news isn’t so rosy…
Cuban doesn’t understand that television has been cut in half. The idea that there should be a formal link between the tele- part and the vision part has ended. Now, and from now on, the form of a video can be handled separately from it’s method of delivery. And since they can be handled separately, they will be, because users prefer it that way.
But Cuban goes further. He doesn’t just believe that, other things being equal, quality will win; he believes quality is so important to consumers that they will accept enormous inconvenience to get that higher-quality playback. When Cuban’s list of advantages of HDTV includes an inability to watch your own video on it (“the complexity of moving HDTV streams around the home and to the HDTV”), you have to wonder what he thinks a disadvantage would look like.
This is the season of the HDTV gotcha. After Christmas, people are starting to understand that they didn’t buy a nicer TV, they bought only one part of a Total Controlled Content Delivery Package. Got an HDTV monitor and a new computer for Christmas? You might as well have gotten a Fabergé Egg and a framing hammer for all the useful ways you can combine the two presents.
Media is a triathlon event. People like to watch, but they also like to create, and to share. Doubling down on the watching part while making it harder for the users to play their own stuff or share with their friends makes a medium worse in the users eyes. By contrast, the last 50 years have been terrible for user creativity and for sharing, so even moderate improvements in either of those abilities make the public go wild.
When it comes to media quality, people don’t optimize, they satisfice. Once the medium, whether audio or video or whatever, crosses a minimum threshold, users accept it and move on to caring about other attributes. The change in internet video quality from 1996 to 2006 was the big jump, and YouTube is the proof. After this, firms that offer higher social value for video will have an edge over firms that offer higher production values while reducing social value.
And because the audience for internet video will grow much faster than the audience for HDTV (and will be less pissed, because YouTube doesn’t rely on a ‘bait and switch’ walled garden play) the premium for making internet video better will grow with it. As Richard Gabriel said of programming languages years ago “[E]ven though Lisp compilers in 1987 were about as good as C compilers, there are many more compiler experts who want to make C compilers better than want to make Lisp compilers better.” That’s where video is today. HDTV provides a better viewing experience than internet video, but many more people care about making internet video better than making HDTV better.
YouTube is the HDTV killer. Deal with it.
1. mark on January 3, 2007 5:27 PM writes...
havent paid much attention over the years have you. People will take the path of least resistance. They always do.
What is todays, hassle: Getting HD programming, becomes tomorrows par for the course.
Vendors are smart enough to realize that when HDTVs are pretty much the only tv sets sold (there is an analog cutoff coming), and that those customers are happier with HD content. They will make it every easy. And consumers with HDTVs will take that easy path.
Satellite and cable will be fighting to get those HDTV owners as customers and that will push down pricing and simplify access. Quickly.
On the other hand, lets look at Youtube. RIght now they are out there trying to pay hundreds of millions of dollars to get the same content that is ALREADY on TV. In fact, that is their primary focus right now. Not only are they paying money for content that TV viewers can see for free, and HDTV viewers can see on big screens and actually enjoy, Youtube is TRYING to spend hundreds of millions of dollars to get that same content in the lowest possible quality AND Limited to 10 minutes.
Yeah, thats a smart business model and going to kill HDTV.
Gee. I just bought this 42" Plasma. It looks great on the wall. I can set my DVR to record the latest eps of Heroes and all my fave broadcast network shows and a growing number of cable net shows and then watch it when i want, or I can go through the huge hassle and expense of connecting my PC to the plasma so i can watch 10 minute clips of shows that look like crap on the big screen.
or i can forget sitting on my couch and when I wantto relax, go sit in front of my computer.
If i sit in front of my PC i can spend lots of time searching the net for 10 minute user generated clips from all kinds of different websites because I cant find those on Youtube any more. THe copyright holders put a stop to most uploads and the good stuff that users created is gone because the creators decided they wanted to get paid for their work and took it all over the net.
Yeah, HD is really at risk.
DO some homework and find out WHEN most internet video is watched. Its not during primetime...
Its the same time the majority of internet media has always been consumed. During office hours.
DO your homework and ask WHY people buy HDTVs. buy your logic, they would only but HDTVs when their old sets broke. The quality of picture isnt important, so why buy an HD set at all ?
People "invest" in their HDTVs. Its an investment they want a return from. HDTVs are becoming ubiquitous and content companies will want to reachthose consumers.
Take a look at the music business. THere are far more people who have wanted to share their music than their video (other than within a family situation), over the last 50 years. In the last 10 years, its become a no brainer for every closet musician to share their own music. Tons of sites were created to leverage that opportunity. ANyone can create music. No one cares. Those sites have consolidated down to a final few.
The same with vide. There is early excitement not because the internet made things better or worse. NOt because DV cameras got cheaper. ALl of these features have been there.
Youtube decided to eat the cost of bandwidth and to take on the copyright risk. That made it cheap and easy for the initial surge of video that responded to it. But like any open environment, it will get spammed to death by crap and corporate.
YT is already mostly corporate, dumb ass user response videos and fake porn.
BTW, HDNet just had its bigger user grown month ever and we are growing 10 pct and more in some months.BEFORE this winter. I cant wait to see how big our numbers get.
And watchfor YT numbers to start to level off and then decline. People will follow the fun videos , and theywont be on yt
Permalink to Comment2. Joshua Porter on January 3, 2007 6:58 PM writes...
Hi Clay,
While I agree with your sentiment regarding YouTube as proof of social value over higher-quality in one respect, I would add to your comment of satisficing by pointing out that everything being equal - higher fidelity always wins.
The problem with Cuban's argument, as you point out, is that everything is not equal in terms of user creation/sharing.
You said: "Once the medium, whether audio or video or whatever, crosses a minimum threshold, users accept it and move on to caring about other attributes."
But we can take this further. When the other attributes cross a minimum threshold...they'll (we'll) return to video quality. Then we'll have another problem...it'll be companies like AT&T who will be waiting to lock us into that when it comes time that we want it.
Permalink to Comment3. Kevin Marks on January 4, 2007 1:04 AM writes...
I was making a similar point last week, and pointing out Pip Coburn's prediction.
Permalink to CommentMark is partly right, in that mass-interest live sports is a niche where broadcast HD can make some sense, but for drama or any other form, it is just a handy source for net ripping.
4. Steve Safran on January 4, 2007 1:42 AM writes...
Another point here, Mark: the success of YouTube is in its ease-of-use sharing. I can send you a video you like and you can embed it on Maverick Blog. (Or, I'm guessing, not :) ) No amount of HDTV choices will allow that. The reason so much is being spent on network programming is so GooTube can avoid lawsuits, not so it can amass quantity.
Glad to hear HDNet is growing. You're a wise old hand: wasn't the model of Broadcast.com aggregation of content? And wasn't a lot of that content pretty lo-fi at the time? Didn't stop the success of webcasting. Did take a chunk out of radio, though. You were such a success with that - why is this model troubling you?
We're making too much of the either/or on this topic. YT is just another platform, and a personal one at that. Email didn't replace mail. It took a chunk out of it. But when I need a document or contract or other nicely printed material, I still want the post office or FedEx bringing it to me. For each level of service its own delivery mechanism.
Permalink to Comment5. Alex Rowland on January 5, 2007 5:19 AM writes...
I used to be convinced that HDTV was going to dominate in 2007 and that in order for UGC and Web video to make it to the TV, enormous quality improvements would be necessary.
Well, what have been proven in spades over the past year is that quantity of choice beats quality by a mile. Mark misses the point by saying that YouTube is fake porn, bullshit and commercial clips. It is, but the reason why people are watching it is not because it is more compelling than TV per se (if they had the choice they would rather watch the breadth of available YouTube content in HD on their TV), but rather that given the choice between selection and quality, they'll take the selection.
TV is still some of the most compelling content, but what makes it so much more compelling on YouTube is that it is microchunked on-demand. I can get the exact piece of video I want NOW (if the quality has to suck as a result, well, that does suck, but what are you going to do...) This selection is something that HDTV cannot yet match. Until HD video starts getting delivered on-demand with huge selections (supplied in part by users), it will trail the growth of Web video.
This BTW is The Venice Project’s problem. They think people will migrate from YouTube because they deliver better quality online video. I think this is wrong. Start with the quantity and gradually improve the quality and you’ll win, but don’t start from scratch on the library. Hub-and-spoke is dead Mark, even if it looks gorgeous on your Plasma. If the lack of selection isn’t the killer, the DRM certainly looks like the proverbial nail.
Also, Mark's proud of the 10% month over month growth HDNet is experiencing. I'd like to know how long YouTube is going to take to experience similar ‘success.’ Don’t get me wrong, I love HD and 10% is great growth in the HD market, but at the end of the day selection must come before quality. Quality will ultimately show up in the Web stream; I just think Mark is a little early. But he’s got the cash to wait it out…
Finally, Mark assumes that people know what they are buying when they buy those HD sets. Ask a few people when in line at Best Buy what kind of TV they bought and then watch them explain the difference between 1080i, 720p and EDTV. Most don't have a clue, they just know it's better and it looks so much cooler than their old set. HD is a status purchase right now (unless it is for the HD football crowd). I don't think anyone could possibly argue that the wealth of HD content is driving those purchases. It just ain't.
Permalink to Comment6. Brian O' Hanlon on January 6, 2007 4:43 PM writes...
Discussion about HDTV
Permalink to Comment7. mark on January 7, 2007 6:44 PM writes...
Steve, I've never said internet vid would go away. Just made the point that it won't replace tv, as many misinformed people think it will.
The expectation and value of HD to hdtv owners will make sure of that.
Its not that people will consciously demand better quality video to the exclusion of non hd content. Its that when most networks go HD, they will expect hd as the norm. Much as people expect color and sound when they were happy without before their introduction.
Hd is the exception now, it won't be in the future. At that point, as with now, youtube and internet video will be a fun outlet to entertain yourself. Just as it was for broadcast.com
The only real exception will be the things geared to shortform,news, entertainment news, sports highlights,etc and the anecdotal great idea (menthos and diet coke as an example)
And to the comparison of hdnet growth to yt....we get paid for our work. So 10pct per mo growth aint so bad. Subsidizing bandwidth for free and highlighting stolen content makes it a lot easier to grow
And the last word on 'the internet is the new tv' will be when shows are incubated on tv and promoted to the net.
As it is now, every for profit content creator on the net dreams of getting on tv
Permalink to Comment8. mark on January 7, 2007 6:46 PM writes...
Steve, I've never said internet vid would go away. Just made the point that it won't replace tv, as many misinformed people think it will.
The expectation and value of HD to hdtv owners will make sure of that.
Its not that people will consciously demand better quality video to the exclusion of non hd content. Its that when most networks go HD, they will expect hd as the norm. Much as people expect color and sound when they were happy without before their introduction.
Hd is the exception now, it won't be in the future. At that point, as with now, youtube and internet video will be a fun outlet to entertain yourself. Just as it was for broadcast.com
The only real exception will be the things geared to shortform,news, entertainment news, sports highlights,etc and the anecdotal great idea (menthos and diet coke as an example)
And to the comparison of hdnet growth to yt....we get paid for our work. So 10pct per mo growth aint so bad. Subsidizing bandwidth for free and highlighting stolen content makes it a lot easier to grow
And the last word on 'the internet is the new tv' will be when shows are incubated on tv and promoted to the net.
As it is now, every for profit content creator on the net dreams of getting on tv
Permalink to Comment9. alan patrick on January 8, 2007 8:01 AM writes...
Seems to me the historical lessons are something on the line of:
- no media truly replaces another, but the older ones have to shuffle along the bench and hand over some of their revenues. Web TV *and* HDTV are both new joiners.
- given equal content (quality, economics, supply chain) then higher quality playout wins - but growth / timing is a function of price decline
- given unequal content, people choose "better" content (price, variety, salaciousness etc etc) over "better" playout quality every time (mp3, satellite TV etc etc)
- its not the point solution's excellence, its the overall supply chain that drives adoption (eg VHS, iTunes examples). HDTV is still a point solution imho.
Permalink to Comment10. Brett Wayn on January 8, 2007 3:06 PM writes...
All interesting points. Premium quality has rarely been a driver of consumer behaviour. Macdonalds sells more burgers than Mortons. Price, value and convenience always trump, along with brand. The vast majority of HD set purchasers are not watching HD content, so it is hard to imagine that the future promise of having higher res was what prompted them to load their Amex at Best Buy. I think form factor, keeping up with the Joneses, falling prices were much more a motivator. Plus the convenience of getting more space back in your loungeroom. One quality related piece though is probably X-Box and other game STBs. They do look better on a high res screen.
YouTube of course is free. It is easy-to-use, convenient and distracting. So it has subsumed some viewer's time who are likely adding it to their media habits, or perhaps tuning into it as well as to TV with one in the foreground and one in the background. Who said they have to give up one for the other?
There is an interesting question though: what happens when America and the rest of the world finally catches up with Japan and South Korea and you get affordable fiber to the home, allowing a YouTubiness on your high res display back home?
I think then what happens is that we can say that interactivity, selectivity and non-linear access to video content on the network becomes as popular as it has for audio content on an MP3 player. User choice over programming, long and short form, regardless as to production values, trumps predetermined preprogrammed Father-Knows-Best content packaging. Singles vs the Album. iTunes vs Fm radio. YouTube vs Network TV. Oh, and did I mention the ad skipping part?
Some content forms will prosper in this new world e.g. the Ze Franks, but Ze will not replace the narrative power of, say, Band of Brothers. And Band of Brothers will be better in HD, by far.
Consumers will have the choice of which device, which content, so will be in control of the what, when and where. I think YouTube and TiVo and iPod have revealed to the media business how much consumers want that, and now that the cuffs are off the consumer is fighting and is not going to go back to the days of being force fed crap, no matter WHAT the resolution.
Permalink to Comment11. Brian O' Hanlon on January 8, 2007 5:49 PM writes...
My contribution to this discussion.
B.
Permalink to Comment12. Anonymous on January 28, 2007 8:37 PM writes...
"Now, and from now on, the form of a video can be handled separately from it’s method of delivery."
Oops. It's its, not it's.
Permalink to Comment13. Fred on February 17, 2007 11:52 AM writes...
My perspective is that the root of the debate is not anout quality but about entertainment and what people find entertaining. Entertainment value is typically measured by the consumer's experience. For many people watching a movie in a theatre is a richer experience than watching it on TV , even if it is HDTV. Watching with a crowd creates much of that experience. Still, these people stay home because it is more convenient. Quality loses out in this case. Many people have owned surround sound audio systems connected to their TVs for many years. I wonder how often the full surround sound is used by these people? Once again quality loses out. I think YT is great in small doses. I find that as entertainment it demands too much from me. Television is less demanding. I see in the future an affordable integrated ComputerTV with a 40-46 inch. high resolution screen, personal video recording capability and access to a global selection of media programming and thev internet. I'm quite sure that with my new Computer/TV and seemingly infinite entertainment choices I won't be watching YT.
Permalink to Comment14. thomas on March 7, 2007 10:49 PM writes...
http://www.wfitv.com provides a selection of the best broadband internet television channels. - Enjoy news, TV shows, movies, music, entertainment and sports. Broadband internet connection recommended.
Permalink to Comment15. Tyler West on May 2, 2007 12:33 AM writes...
These are two totally different products, filling totally different needs in the world. The only thing they have in common is sequenced images moving in rapid succession--"video." Both will lose users as more granular market segmentation occurs. And there will be considerable overlap between them.
Marketers don't ask themselves enough "What are we REALLY selling?".
For HD, it's people who demand quality, but more importantly like to show off the "clearness" to their friends. That experience is the real product HD is selling.
For online video, it's people who need a convenient place to store and retrieve video information. It's about portability. This is the experience online video is selling (which is incidentally why Google blundered buying YouTube, thinking the portability could be commercialized with ads.)
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