In the past, the computer industry has offered solutions to bring together various kinds of content on one device (Think of Apple TV and Media Center PCs). It would definitely be handy to have a central way to access content, whether streaming video, stored video, photos, audio, or whatever.

Earlier this week, Cablevision announced the PC to TV Media Relay service. This LightReading.com article spells out the details.

Cablevision Systems Corp. said it will begin testing a new service in June that delivers all sorts of media sourced from a customer’s PC — including iTunes content, digital photos, and even over-the-top video shipped in from the Web — to digital set-top boxes.

Cablevision’s “PC to TV Media Relay” service will enable cable TV customers to replicate the information and images appearing on their PC screens onto their TV screens without any extra special home networking equipment, other than the cable modems and the non-IP digital cable set-tops they’re already using.

After downloading a special PC software client, you stream content from your computer up to the cable headend, and then that content is fed to a dedicated digital channel you tune to on your set-top box. You could connect your laptop to your TV now, but this service would eliminate the need for a VGA cable.

This VideoNuze post suggests this could have implications for other video services, but Netflix seems quite pleased at the announcement. I wanted to focus on two other elements.

This article on Entertainment Weekly’s site offers some criticism:

…Cablevision’s plan has the disadvantage of, well, requiring that you have cable — it only works if you have both Cablevision cable and Cablevision Internet. Quite simply, Cablevision is in the business of making sure you don’t drop your cable TV subscription when you discover you can watch just about anything online, while other HTPC outfits are in the business of just getting content on your TV.

…does Cablevision’s plan seem like best of both worlds (cable and Web content on your big TV screen), or does it just sound like having to pay one bill too many? Who’s already unplugged the cable from their TV and taking an Internet-only approach?

Yes, I know I sound like a broken record when I say this, but every time I read someone claim that you can replace cable programming through the Internet, I have to point out that you can’t. I most recently addressed this issue in a post, but the simple fact is that most full-length cable programming is not available online for free. There is a lot to watch, but not cable programming (for the most part).

My second point is that this new service is another example of cable shifting its resources to manage bandwidth. I have written in the past that cable is having its own “digital transition,” which is separate from over-the-air broadcast television’s DTV transition of last year. One important step is moving from analog to digital, which takes up less space. Another way is through sending content on-demand, such as with VOD or this new PC to TV Media Relay service. Yet another example is Cablevision’s announcement this week of an April deployment for remote storage-DVRs, a service in which content is stored on servers at the headend and then streamed to the home as requested.

This trend will continue, with cable’s infrastructure being used in new ways that will allow even more stuff to be sent over the pipes. Kyle McSlarrow made this point just last week:

Today, a typical cable system has a total capacity of 5 Gbps, meaning our typical customer already has well over 1 Gbps of data available to his or her household. Today, we use that capacity to deliver hundreds of channels of analog and digital video (including high-definition television) and phone service as well, of course, as Internet access. As new applications and services emerge and consumer demand changes, the cable industry is well placed to redeploy bandwidth to meet those changing needs.

Expect more developments along these lines.

Regular readers will note that I keep returning back to the issue of cord-cutting, mostly because I keep reading articles and blog posts about how it’s the big new trend.

It’s not a question of whether more television content will move to the Internet or whether IP transport will be used more in the future for video distribution. It’s two questions:

a) Are a lot of people canceling their cable subscriptions for cord-cutting alternatives?

b) Can you replace your cable subscription through online video?

In a previous post I attempted to answer these questions, but it’s quite simple: a) No. b) No.

This debate does show that consumers have more choices than ever before, which one would hope can finally put to an end to the view that insufficient competition exists. I might argue that cable subscriptions provide the best combination of services and value, but those who don’t agree clearly have many other options.

This week also brought two new pieces of evidence which tend to support the subscription model, one scientific in nature and one anecdotal.

Parks Associates released the All Eyes on Video study, which looks at “consumer use of and interest in video experiences.” From this WorldScreen.com article, the report found that “Less than 8 percent of U.S. broadband homes — about 5.5 million homes — are considering canceling their pay-TV subscriptions in favor of online video…”  This Broadband TV News article reports the profile of these consumers.

The households likely to switch or cancel their services watch a whopping 10 hours of online video each week, much higher than typical video consumers. They express strong interest in having online access to pay-TV channels (e.g., TV Everywhere), which highlights an opportunity for traditional pay-TV providers to solidify their base through the deployment of such features. Offline video consumption is also higher. Their median number of DVD rentals from the last six months is 18, compared to two rentals among other households.

Janko Roettgers, in this NewTeeVee post, thinks that the real winners will be DVD rental services like Netflix and Redbox, although it’s worth noting that the DVD business is going through its own problems right now and Netflix does not yet have a deep catalog of content that can be watched online through its Watch Instantly feature.

The Business Insider’s Dan Frommer quite famously cut the cord on cable, as noted as recently as this December 2009 article on the proposed Comcast-NBC deal:

Nielsen recently reported that although online video viewing has risen 35 percent in the past year, 99 percent of TV viewing is still done on a traditional TV. But that’s not the case for younger people, like my pal Dan Frommer. He’s 27 years old and works as a writer for a technology Web site. Frommer pulled the plug on cable TV in May 2008 and instead gets shows from the Internet via a Macintosh computer hooked to his LCD television. He can’t get everything he’d like to see, but he’s saved $1,500 on cable-TV fees. “I’m not going to let myself get ripped off for a bunch of garbage that I don’t watch anyway,” he says.

And here was the title of a Frommer post yesterday: Why I Caved, Bought Cable TV, And Gave Up On My ‘Hulu Household’. Read it for yourself, but you’ll find many of the issues I’ve discussed here before; high-definition television, live sporting events and the costs of high-quality TV productions all play a role.

Final note: I draw your attention to this Mari Silbey tweet from Monday. Roku, frequently mentioned as one of those great alternatives to subscribing to cable, has recently talked about how subscriptions will play a greater role going forward. In fact, they’re “looking to line up at least 100 content partners this year.”

Mari tweeted, “I’m sorry, but does no one else see the irony of Roku’s plans to bundle free hardware with subscription content? It’s called a cable set-top.”

The more things change…

In the new issue of Consumer Reports, the cover story is their annual look at TV, phone and Internet service (Here’s a news article about it.). Their description of cable’s position in the marketplace is perhaps the most positive that I’ve seen in CR’s coverage, but I do have a few nits to pick with the article.

The good news is that some cable operators receive high marks from consumers about the service they receive. While some cable companies are not viewed positively, there seems to be a general air against incumbents. In other words, when it comes to video service, the incumbent cable providers are not viewed as positively as newer competitors; however, when it comes to telephone service, cable is viewed more positively than traditional phone providers.

In addition, Consumer Reports’ reader survey points out something that’s been known for some time: Customers who take bundled service are happier with their provider. Since cable first rolled out Internet access and then telephone service – as well as services such as DVRs, HD and digital cable – we have seen the take rates increase dramatically for the new services. Consumers are getting more out of their cable subscriptions, and by bundling Internet access and phone with their video service, they’ve also been able to see savings.

Now for a few factual problems…

The article lumps together the services provided by the phone companies (AT&T’s U-verse & Verizon’s FiOS) as “fiber-optic service.” In fact, while Verizon has widely deployed fiber, AT&T is still using twisted copper pair. You may recall that cable has a hybrid fiber-coaxial infrastructure.

A sidebar of the costs of TV service completely bungles its analysis of the impact of CableCARDs, but more distressingly, the article gets its description of E911 wrong.

Emergency 911 service varies among technologies. Fiber phone service uses the same long-proven location system as a landline phone. New cable-phone and other VoIP 911 services are less universally dependable.

The section on emergency phone use seems to confuse cable’s phone service, which transports your call over cable companies’ privately managed IP networks, with VoIP services such as Vonage, which use the public Internet for transport. The concern is that when a customer calls into a 911 operator, emergency responders should be able to know where the household is located – and that in the case of VoIP calls transport entirely over the public Internet, that may not be possible. Cable operators do not have this problem. As the article notes, phone service from cable or U-verse/FiOS may need to instead rely on a cell phone in the case of a power outage.

In a section on Internet speeds, the article argues that only 1 Mbps is necessary for most customers. That’s not a problem for cable customers, since the average standard speed typically exceeds 5 Mbps, but it seems a little silly to argue that very high speeds, such as cable is offering now through the DOCSIS 3.0 standard, are mostly a “marketing game.” Certainly, not everyone needs 50 to 105 Mbps, but I think 1 Mbps is hardly adequate these days.

I also found it telling that they buried the cord-cutting strategies at the back of the article. You can just rely on an antennae and over-the-air broadcast television, but if you have reception issues, then you’ll be out of luck. You can turn to the Internet, but content is limited there as well, and you’ll still need to subscribe to an Internet connection.

In the end, it seems like consumers are being serviced quite well by today’s vibrantly competitive marketplace.

At the recent CES conference, there was much discussion of 3-D TV, mobile devices and tablet PCs. But there was also a great deal of talk about the future of television and about alternatives means of delivering entertainment and information to consumers.

On this blog, I have many times written about so-called “cord cutters” – people who have canceled their cable subscription in order receive movies and television shows over the Internet. CES was filled with talk of Netflix’s deal with Warner Bros, the Boxee box, the introduction of VUDU Apps, and more. Sessions with titles like Rethinking the Future of Creative Works and Defining Internet TV focused on emerging models for the distribution of content.

What struck me at CES – as I have also been reading in the blogosphere and the mainstream press for over a year – is that we’re moving away from the current model, where 85% of U.S. households get video through a Multichannel Video Distributor, to a new disintermediated world, where you’ll get content over the Internet directly from content creators. To hear some talk about it, the current model is a dinosaur and the sooner that the cable industry can figure that out and move on, the better.

But let’s note again that 85% of U.S. households get their television from cable, DBS (DirecTV & DISH) or from the phone companies (AT&T’s U-verse & Verizon’s FiOS). In December, NewTeeVee noted that Nielsen reports that “99 percent of video is watched on a TV in the U.S.”

Americans spent 129 hours and 16 minutes per month watching TV in the latest 3-month period, seven hours and 12 minutes watching time-shifted TV, and three hours and 24 minutes watching online video.

Things will undoubtedly change. But what might account for everyone not rushing to cancel their cable today?

One possible answer can be found by looking at the example of noted blogger Ben Drawbaugh. I don’t mean to pick on him, because he’s a nice guy, but when I last wrote about cord-cutting in December, he posted this comment:

For the most part I agree with the premise of your post, the notion that more than a small percentage of people will cut the cord and use legit streaming services is just crazy.

That being said, I do cancel my cable service in January and don’t feel the need to add it back until August. So yes, I pay $50 a month to Verizon to watch ESPN and the NFL Network — because college and pro football is worth $50 a month to me — but the rest of the crap on cable can wait. What I mean is that instead I subscribe to Netflix and wait another 5 months for Netflix to mail the first Burn Notice Disc to me. So in other words, Discs and OTA HD have everything I need for much less money.

Fair enough.

This week, though, Drawbuagh wrote a post entitled, “Canceling cable: the failed experiment.” He says that he needs to a subscription for work purposes, since he writes about cable technologies. Then, he says this:

The bottom line is that I love me some football in HD, so I can’t ever see myself going without cable year round, and with the hassle involved in canceling and signing back up, the $327 a year ($62 for 7 months minus $110 savings for signing a contract) I’d save just isn’t worth it… I suspect for many it just isn’t worth it either. Sure there is lots of content out there available via other legal means, but the bottom line is that when it comes down to it, cable really isn’t that bad of a deal considering all the HD viewing options you get for the price.

As I’ve said before, cord-cutting proponents love to suggest or outright claim that you can substitute online video for cable service, but there is much you can’t get online. One of those big categories is sports.

The Return of the Subscription Model

But all this discussion may be for naught, because some new developments suggest that online video may be moving to a subscription model anyway, which puts us right back where we are today. Hulu may soon be charging a subscription fee for some of its content, as may Boxee. Brian Barrett at Gizmodo added up the numbers for your access to even get online, plus the subscription for services like Netflix, and concluded that you might end up paying “hundreds of dollars a month,” perhaps “nearly $1,000 a month.” Nicholas Carr, in a colorfully-titled post, also looks at the numbers and asks, “Now somebody remind me how we all came to think that information wants to be free.”

And yet, on that previously mentioned Rethinking the Future of Creative Works panel, the speakers couldn’t think of what the role of service providers (such as cable operators) might be in our connected future. The panel didn’t really answer an audience question on how all the content will be paid for. They didn’t really answer a question on why service providers would invest in infrastructure.

On another panel, Mitch Berman of ZillionTV said that claims that production values for movies and TV won’t be there without subscription model are overblown. On an FCC panel, Commissioner Robert M. McDowell reminded us that quality content costs money and that right now, the ways to cover those costs are through advertising or subscriptions. Even the NY Times has now announced a new plan to require some sort of subscription.

So, we may be moving to a Bright New Future a little more slowly than some are claiming. And it may be that subscriptions serve a purpose after all.

Time will tell.

One of the big stories in tech reporting over the past year or so has been the move by some consumers to “cut the cord” from their subscription TV service and begin relying on the Internet for the delivery of video content.  I catch up on a lot of shows myself by watching them online and this is definitely a convenient service.

While cord-cutting is definitely a trend that the entire media industry is watching, many of the articles and blog posts covering this say something like: “Tired of paying so much for cable? Cancel your subscription and turn to the Internet to serve your needs!” The direct implication of this is that you can get all the stuff you currently watch on cable television – or via DBS (DirecTV & DISH) or from the phone companies (AT&T’s U-verse & Verizon’s FiOS) – just by going online.

But all this coverage ignores the fact that you can’t do this. You can get some cable programming online, but not most of it.

Let’s focus in on a couple key elements.

From an October 29 article in the Washington Post:

[Cord-cutting] was a somewhat easy thing for us to do. We don’t watch that much TV in the first place, and most of what we do view is on the [over-the-air broadcast] networks anyway…

If you look at this post I wrote in November of last year, you’ll note the same thing: A lot of cord-cutting proponents don’t watch much television and what they do watch is from broadcast television (generally easy to find online).

From the New York Times on December 9:

…Boxee easily allows access to the Netflix streaming service, which offers up thousands of movies and television shows (just not always the most popular options).

Anyone who’s actually used Netflix’s “Watch Instantly” feature, as I have, knows that you can see older movies and some TV shows but not any of the current cable shows generating water-cooler discussion. And you don’t get any access to new hit movies.

This HuffPo post, while also proclaiming the wonders of cord-cutting, charges that major cable operators “have been pressuring TV programming networks to keep their shows off the Internet,” implying that they should be provided for free.  Perhaps the writer may be unaware that cable programmers have a dual revenue stream: They get some money from advertisers (which is based on the number of homes they’re carried in) and some money from cable operators and other multichannel video providers (called carriage fees).

Online advertising revenue has not been as lucrative yet as television has been. And multichannel video providers would undoubtedly not want to pay as much for a product that is being given away for free online.

And is this really such a good deal for consumers? The Times notes:

If you watch premium-cable television shows, you can pay more than $40 for the season of a single show. But even that is less than one month of cable.

Wait.  $40 for a season of a single show?

I’m paying Comcast about 100 bucks a month for video service, but it’s a very robust package that includes hundreds of viewing options, including multiple premium services. SNL Kagan reports that the average price for digital cable (which 67% of cable subscribers now take) is about $60 a month. I probably watch about three hours daily, for about 90 hours a month. The latest “Three Screens” report from Nielsen reports that Americans are watching an average of 31 hours and 19 minutes of live television per week or 125+ hours a month.

So, one cable show via iTunes for $40; two shows are $80. I happen to watch a lot more than two cable shows.

All this gives me a cost-cutting idea!

Anybody who knows me knows I don’t care about sports. Not professional, collegiate or amateur athletics. Given that situation, I guess I should cancel my subscription to Sports Illustrated, huh?

Yeah, I’m kidding, because I don’t have such a subscription. But it illustrates a good rule for some people: If you’re not interested in watching cable programming, you probably shouldn’t subscribe to cable television.

Online video viewing is small, but growing. The statistics are dwarfed by the amount of television delivered via traditional methods, and the number of video subscribers continues to grow. In all likelihood, those figures will shift over time. But it’s not there yet.

It’s ironic, because lots of people like cable TV precisely because of the programming. Back in the early Seventies, when I was a kid, we had cable for clear reception. By the Eighties, we had it for all the great new channels: Nickelodeon, MTV, A&E, CNN. If this service is of no value to you, then it’s wise to not subscribe. But you’re not going to duplicate the experience through your computer – not yet, anyway.

UPDATE: For more on the economics of buying programming “à la carte,” such as from iTunes or Amazon, see here and here. Bottom line: Buying individuals programs is a great cost savings, provided you watch very little TV.