Trenton, you are correct that cable is more suitable than streaming media for broadcasting. And that is why internet TV will not kill cable or broadcast. But you are missing something, and that is that there are several things you can do with the internet that you can't do with cable:
1. More selection. While cable is limited to say 500 channels, you could conceivably have 10,000 or more channels. Thus channels that might only have a few hundred viewers worldwide become possible, so long as there is someone willing to pay the bill.
2. Video on demand. Maybe you missed the fireworks live, you can watch they tomorrow morning, or whenever it suits you.
3. Interactivity. With internet you can have a live chat going on at the same time as the video is running. The audience can easily interact with the guest hose. I've seen talk shows where you can ask the talk show host questions in chat mode, which he may or may not answer in the course of the chat.
4. Ability to shop while you watch. Similar to the interactive mode, you can click on an ad to make a purchase.
5. Lower production and broadcasting charges. Because the quality of video needed is lower, production costs are reduced. Transmission cost is much lower through the web than through cable.
6. Limited access at a reasonable cost. While pay-per-view is possible over cable, the cost of this service would be much lower through the web.
7. Ability to access the video from anywhere in the world so long as phone service is available.
So you see, this is not an apples-to-apples comparison. As an example I have tried (thus far without success, but I'm still trying) to interest a national Drycleaner's Association in sponsoring a trade association channel which could be used to transmit training material to paid members.
As others will point out, the quality will improve with improved bandwidth. Perhaps cable will develop some of the capabilities of the internet and eventually maybe there will be some convergence. But for the time being, these are two very different medias, with two very different sets of strengths, that can be used effectively for very different purposes.
The biggest thing holding back internet TV is the reaction of the I'm getting from Drycleaners that it is interesting, but they can't quite figure out how they would use it. As more and more people find niche uses for internet TV, others will follow with other similar applications, and internet TV usage will explode.
Can AXC generate meaningful revenue from internet TV? Can AXC grow rapidly? How big will they ultimately become? These are very difficult questions, and not easily answered with very little financial information to fall back on. But we do know that TVoW had $750,000 of internet revenue last year, and something like $1 million in the first quarter this year, but I don't recall for sure. Gardy-McGrath, now a subsidiary of TVoW, had production revenue of $4m last year if I recall, and presumably a substantial amount in Q1, and they were profitable last year. This is already significant revenue, and if they meet their channel growth targets, that combined with the substantial price increases will lead to even more growth. But to see how much, I guess we'll just have to wait and see.
In the meantime, keep in mind the differences as well as the similarities and you will realize that these are two different markets. HBO sort of is in the the same market as movie theatres, but they both serve different markets and both exist side by side. The same should be true of internet video and cable.
Carl |
