Is Internet TV the Future?

HDnet’s Mark Cuban and Boxee’s Avner Ronen have had an interesting public dialog about the future of TV: a lively debate with mark cuban. Ronen posits that viewers will flock to internet video because of the breadth of content while Cuban suspects that traditional distribution will trump all because of quality.
I suspect that they’re both right.
Traditional broadcast/cable/satellite distribution is far better at broadcasting popular material to many people at once in high quality. Over-the-air HD broadcast far surpasses internet video in quality and scales easily.
With live events and the first airing of serial entertainment, the desire to watch live and then the correlated value in watching together for watercooler (or online watercooler) discussions keeps broadcasts relevant. If American Idol happened last night, you’re going to talk about it tonight. For audio/video quality and currency, broadcast wins.
The internet opens up a vast variety of material available. Between archived material from legacy copyright owners and new material produced for the internet by small independent producers (often at shockingly low costs), the internet has a wealth of content that can’t be matched by traditional broadcast or cablecast distribution.
On Tuesday, Boxee gathered 600 users, fans and partners at Webster Hall to learn about new features coming to the next version of the software as well as some of the internet-based content available through the platform. And to get free T-shirts. (Thanks, Boxee.)
Boxee is an internet video browser for a television. It makes it possible to sit on your couch and watch online video from a multitude of sources on your TV, instead of in front of your computer.
What’s interesting is that Boxee users seem prefer to access sources approved by copyright owners. More users want to access Hulu than to download video files via Bittorrent. They want the program creators to be able to earn money (and continue to film new programs.) Boxee the company wants to offer the best experience to its users (for free) while also helping to drive revenue to the content providers. And the internet video content providers want to get their material onto TV. (Well, except for the networks who have traditional distribution which may be cannibalized by internet distribution. Since ads sell for higher rates on the broadcast or cablecast than for the same content streamed over the internet, taking the internet version to TV may simple replace higher-value audience with lower-value audience.)
Boxee is going to remain a niche product for the immediate future. Not many people have computers hooked up to their TV to watch internet programming. I have Boxee installed on my Apple TV. Installing Boxee is not the easiest process, since it requires creating a USB “patchstick” which then installs the Boxee software on Apple TV. Boxee provides a useful supplement to Apple’s software, which works very well for downloaded and ripped content stored locally in iTunes, but is limited to streaming content only from YouTube, not from the rest of the internet. Boxee connects the TV to the rest of that streaming.
The alpha version can be confusing and frustrating to use, with the main menu hidden off to the side of the screen. Compared to the Apple TV’s native interface, Boxee’s can feel second-rate. In most contexts, Apple’s interface uses larger fonts and higher-contrast text that is easier to read from the couch. Boxee’s alpha software isn’t nearly as polished as AppleTV’s second-generation interface.
While I have an Apple TV and use Boxee to watch shows, I also still subscribe to cable television and will prefer to watch programs recorded on TiVo to programs streamed on Boxee. The picture and sound quality is far superior on cable TV. That isn’t to say that internet distribution won’t get better in the future.
How immediate is this future? Boxee is actively working to develop their software to make it easy to use. And the fact that it is slightly clunky now isn’t much of a detriment to the early adopters and nerds who are using this young software. The viewer who doesn’t have the patience to learn the software is certainly not going to take the time to patch an Apple TV or connect a computer up to their TV as a media player. This version of Boxee is a glimpse at the next generation of television, where Boxee is the default interface for a set-top box or a television itself. Ronen expects to see such boxes running Boxee available within the next year.
And that’s when the masses are going to be disappointed with their broadband connection and the quality internet video.
Netflix is finding that some users of its streaming service get less than ideal quality because of the variables involved in the networks between the user and Netflix. Many US “broadband” internet connections simply don’t have the bandwidth to stream HD video and so the quality falls back to something lower.
How good is good enough? MP3 suffices for most music listeners. But having recently upgraded to an HDTV, I can’t imagine going back to fuzzy low resolution video.
Until the broadband networks in America catch up to those in the countries that have higher-bandwidth networks, internet video is likely going to remain a secondary niche. Of the two programs I watched online this week, The Amazing Race’s stream had a few instances where motion became jerky and the audio and video fell out of sync. On Kings, the picture was noticeably blurrier than my HD recording of the pilot. Overall, these were pretty good viewing experiences, but still materially inferior to programs recorded from cable.
Cable companies have offered their own video-on-demand services since the advent of digital cable. Edge-caching content at a major ISP may be cheaper for streaming media than for the ISP to upgrade its service. In addition, bandwidth limits and caps drive video usage to legacy networks. Even with IP-delivered video, cable companies could favor in-house on-demand video over video sourced from the internet at large.
The internet is the future of video, with shows living there long after they’ve been broadcast. But that doesn’t mean that broadcast is imminently disappearing.
Previously: Preparing for the Post-TV World