Who Else Wants Their Video On Demand?
This article explains the difference between the business models of Netflix and HBO. I thought it was self-evident. Cable services like HBO and Showtime abandoned the first-run movie business model long ago in favor of emphasizing original content, leaving the first time video market to the Blockbusters and Netflixes of the world. The video rental services get the movies faster and are pretty convenient.
HBO has one thing going for it though - no effort required on your part. Just sit down, pick up the remote, and watch whatever movies they offer that month. Of course, you’re stuck with a limited selection, which illuminates Netflix’s advantages pretty clearly - you get whatever you want. You trade convenience for variety.
But why can’t you have both? Can you have the convenience of HBO with the variety of Netflix? Yes and no. The technology exists - it’s called Video On Demand (VOD). Cable companies like Comcast have been offering primitive VOD services for a few years. You scroll through a list of available features, pick out the one you, and order it with the click of a button. Soon you get a streaming video at less-than-DVD-quality beamed right to your cable box.
I have Comcast, and I can tell you right now that the service is no great shakes. The new releases section is fairly robust, there are a 2-3 dozen HD titles, but the catalog of older films is lacking. I want to be able to order “Dr. Strangelove” and “Alien” and “One Flew Over The Cuckoo’ Nest” whenever I want. In short, I want the whole Netflix catalog at my fingertips.
One of the problems in delivering a ‘Digital Netflix’ experience is bandwidth, or lack thereof. Providing a true designated pipeline to each home requires a lot of upstream bandwidth.
This is where the advantage of Verizon’s new FIOS service really shines. The fiber optics connection will provide plenty of bandwidth for true VOD. All it will take is Netflix or Blockbuster with enough savvy to exploit the VOD opportunity. Sadly it will be YEARS before FIOS has enough market penetration to make a dent in cable. I might see it within 5 years or so. And since Verizon’s service is limited to the east, other local exchange carriers will have to field their own FIOS solutions to make it truly ubiquitous.
But when it rolls out nationwide it will obsolete cable practically overnight. The FIOS-enabled business model will combine phone, internet, and video services in one package - just like Comcast offers now. Only FIOS will be a better quality service with higher bandwidth. And the phone companies have stronger brands than the cable companies, and the opportunity to partner with VOD providers.
It will be interesting to see if the Comcasts of the world can figure out a countermeasure.
Comments
Leave a Reply
