Battle for Your TV: The Big TV Smackdown at SXSW

I made bad choices for the first two time-slots at SXSW, so I had high hopes for the third, PayTV vs Internet – The Battle For Your TV, featuring Mark Cuban of HDNet and Avner Rosen of Boxee.

It was good to see a debate between two people who genuinely disagree by 180º on how the future of TV will pan out, even if some of the argument was basically dick-swinging.

Cuban believes that the future of TV is basically the same as the present: subscription services over cable or satellite, with a light dash of so-called ‘Interactive TV’. Rosen believes, as I do, that the future of TV is on the web. To be clear: everyone sane accepts that we will continue to have a dedicated large screen in our houses on which we watch video. I just don’t believe that broadcast TV has a future that looks anything like the present, if it has one at all.

My overwhelming experience of TV, and I suspect that of many others too, is that there is rarely anything on that I want to watch. I don’t subscribe to a cable or satellite service in the UK precisely because of this problem. I don’t see the value in spending the sort of money required in order to watch the few shows that I do want to watch. I also know where the off button is; I have plenty of other things I like doing in my spare time even more than I like watching TV. If there’s nothing on, I’ll just do something else.

But if they had a pay as you go plan, with small fees for each show watched, I’d be using such a service today, and giving them substantially more than the zero pounds that I currently do.

Cuban said that “there is no business model” for using the internet to supply video. He’s a hyperbolic kind of guy, so I guess he really meant “there’s not an equivalent good business model right now”, because there are certainly people making money out of streaming live sports events in HD over the web. Perhaps the best example is the NFL with their GamePass service. Of course, in order to protect the existing business model, the NFL has to hobble the new one, so GamePass isn’t available in the US. That is bound to change eventually, because it’s what fans want. It’s trivially easy to figure out how to circumvent GamePass’s IP detection so that you can use it in the US, just as we Europeans use open US proxies to watch Hulu.

The truth is that Cuban wants things to stay the way they are because that’s how he makes money right now. It might be more difficult for him to make as much money out of the same content through a more open system, such as the web. But that doesn’t mean that the demand for such services isn’t there. And demand will flush out the services.

As with wealthy musicians, programme makers have grown fat on the current model, and do not look at the problem from the user’s perspective. As a consumer of TV content, I couldn’t care less about the business model, so long as content I like gets produced. I just want to be able to consume content conveniently. I don’t want the price or availability artificially manipulated. I just want a device on which I choose what I watch and when.

Cuban doesn’t want what his customers want, and that should be setting off alarm bells in his mind. Because when Google makes an internet-enabled TV and cuts deals that are initially loss-making, but designed to bust up the industry, the old model will be in tatters and the cable companies will be screwed.

Think about it: Google has search to help you find shows, it has a video platform in the shape of YouTube, it has micro-payment infrastructure, and if it woke up and forgot about Buzz, it has social recommendation there too with Twitter. And there’s also Google’s main business: advertising.

These are just the things that are available today, with no specific design for delivering the kinds of services we’re talking about. It’s possible to conceive of dozens of ways that all of these things could be made perfectly suited to watching video content from your couch.

Cuban repeatedly argued that the problem was that the infrastructure wasn’t available today, which was perverse in a session about the future. Obviously broadband take-up and bandwidth need to improve. But does anyone believe for a second that this won’t happen? Unless he thinks that the internet is technically incapable of ever delivering streaming HD video at the scale required (which is nuts), then he has to believe that if anyone can scale up to supply such services, it’s Google.

Now imagine an Android powered TV, with Twitter apps, Facebook, games and everything else available. Consider an Android tablet that functions as a second-screen, both remote control for the TV, and a way of accessing the back channel while watching the show. Consider an ad-supported version and an ad-free version. Advertisers would be able to use the same platform for web advertising and TV advertising, and users would be able to choose how to pay: with their attention (ads) or by micro-payment.

This is only one of the many ways that the web could eat the cable companies’ business whole.

I think the cable companies have five years, at an absolute maximum, to invent the next business model. If they don’t, and try to cling to the current one, they’re done. And, like so many now obsolete business models, it’ll be good riddance.