bulletproofheeb

So an interesting development has happened with Netflix.  Yes, they released their API which is awesome and means software developers out there will now be rolling out custom Netflix programs across all platforms, but that's not the big news that broke.  The other thing Netflix announced is that they have made a deal with Starz Play.  And this is where it gets really interesting. 

Starz Play is a streaming/download service from the Starz cable channel.  It isn't a Netflix competitor but rather a Starz station alternative.  They have a much smaller selection of movies availible, about 1,000.  What Starz will do is roll their selection by keeping the most recent movies up and knocking off the back end.  When a new movie is made available to Starz they'll knock off movie 1,000, push everything down and make the new release movie number 1.  For $7.99 you can get a Starz Play subscription through Netflix, or get all of Netflix (watch now and disc service) for $8.99 so I'm not sure of the logic in that.  What this means for regular Netflix subscribers is that you now have 783 new streaming titles available as of this morning and another 1,500 titles scheduled from Starz by the end of the year.  Many of these are new releases like Pirates of the Caribbean 3, Spiderman 3 and Superbad. 

So far this has just sounded like a Netflix press release so let me tell you what the game changing factor is here.  People with Netflix, for all practical purposes, now have access to a premium cable station regardless of their cable subscription.  If you have basic cable from any provider but also a Netflix subscription then you have a cable station.  Even if you don't have cable at all you still have a cable station.  That, along with the Netflix deals with ABC, NBC and the Disney Channel, mean that your cable subscription is fast becoming obsolete.  Sure, you could always use bittorrent on sites like EZTV.it and avoid cable all together but this is the first move, from a unambiguously 100% unambiguously legal perspective, to have cable content without cable.  Between Hulu, Netflix streams and Comcast's Fancast you can watch most network TV shows the day after they air, in HD, on demand.  Without any sort of TV service.

The fact that this is rushing in on the heels of Comcast instilling a 260 gig/month bandwidth limit is both exciting and problematic.  The reason is that the trade off between this increase TV over the internet is that it takes a lot of data transfer.  Speed is no longer the issue, with most people now running residential cable connections instead of dial-up.  The issue is managing all of that data traffic.  Comcast's response is to cap connections to avoid the tubes being tied.  Other providers offer tiered service by having the customer pay by usage.  Still, this is great for consumers.  Instead of a “get what you pay for” service people are now offered a “pay for what you take” service.  Only pay for the bandwidth you use and only pay per channel that you want.  It's the equivalent of not paying for food by what you take home, but rather paying for what you use.  That extra half gallon of milk that you poured out and never drank?  On the house.  But you wanted more steak this week?  Pay for that instead.  Only want 3 movies from Starz instead of the whole channel this month?  Then you just pay the bandwidth for those movie and not for the cable service.  Just want to catch up on Best Week Ever and Heroes?  Then cut off your cable subscription and catch those on the net, paying only for those.

While this is all great, it's a new market structure that neither the cable providers nor the stations have yet grasped.  If I had to guess, I'd say the stations will catch on right before the cable providers but I have no idea when.  What you're seeing right now is a couple of policies mixing and neither group noticing. 

On one hand you have TV stations clawing for more audience numbers with online services.  I only watch Simpsons on Hulu.com during my lunch break but since Fox wants those numbers they've legitimized internet TV in exchange for being able to count viewers.  Instead of just counting watchers for a show the night it airs many places are counting that plus online and Tivo views within 3 days.  This will eventually move to 2 exasperate but equally important markets: pure time-shifting online watchers (raises hand) and regular TV audiences.

The other policy is that of the internet providers fighting to control their bandwidth usage and attempt to curb P2P.  Comcast previously had an unspeakable, invisible cap for their “unlimited” internet plan.  After being charged by the FCC they changed it to a public 260 gig/month.  This usage limit is what is mixing with the internet viewer scramble and where it mixes is where this new market will be won and lost. 

In essence you now have content providers and service providers become consumers.  A TV station (Fox, NBC, HBO) can now choose how they want their content spread; internet, cable, torrent, iTunes.  At the same time you have service providers with a new choice about what to provide.  If any cable provider wanted, they could drop all TV signal and focus on the internet.  While that sounds like they'd be limiting their market they could easily throw in a Netflix subscription and a Netflix set-top box (the API is public now, remember?) as part of their service the way Comcast currently provides MacCaffey antivirus subscriptions to their subscribers.  This would let them focus their money and resources in one specific direction while still offering what people want.  And for anyone who is complaining about watching all this on their computer instead of their nice TV, since Netflix has a public API anyone can make a set-top box to play SD and HD streams on their TV from Netflix, Hulu and other sites.  That's what we do at my place. 

Ok, that was a lot to take in.  What does it all mean?  Well, for now it means that all you TV watchers have lots of options and to the few of you tech-savvy viewers you have little or no need to ever look at a TV schedule again.  For you less savvy folks it means that in the future (not too far off) you wont need to look at a schedule.  You just need to wait until the TV stations and the cable providers realize this.  Because technology isn't as good as the cutting edge of technology; it's only as good as the cutting edge of usable technology.