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A New Broadband Content Business Model

Phil Harvey
3/3/2010

11:20 AM -- If we put up with broadband consumption caps, what will prevent broadband providers from white-labeling some content in order to make money for themselves and add value to your broadband experience?

As ever, I have ventured a guess:



— Phil Harvey, Editor-in-Chief, Light Reading

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DCITDave
DCITDave
12/5/2012 | 4:41:49 PM
re: A New Broadband Content Business Model
I don't know what the mobile implications are and I don't think there's much to say about that yet. Internet video is mostly consumed at home, and service provider TV plans are under attack thanks to all the applications that ride their bandwidth.

So my theory is simply that service providers could use whitelisting content and creative billing as a weapon against Netflix and other content distributors that use their bandwidth to make money WITHOUT degrading or blocking the Netflix experience on their networks.
kaps
kaps
12/5/2012 | 4:41:49 PM
re: A New Broadband Content Business Model


Interesting... wonder if this idea could lead to telcos buying rights to sports events or signing deals for coverage, following the cable model of local affiliates. And how does ESPN's reach into local markets fit into such a plan? Think the content folks will play along?

kaps
kaps
12/5/2012 | 4:41:49 PM
re: A New Broadband Content Business Model


Interesting... wonder if this idea could lead to telcos buying rights to sports events or signing deals for coverage, following the cable model of local affiliates. And how does ESPN's reach into local markets fit into such a plan? Think the content folks will play along?

kaps
kaps
12/5/2012 | 4:41:49 PM
re: A New Broadband Content Business Model


I understand the logic of circumnavigating net neutrality rules by creating some private third pipe -- maybe comparable to having a cable TV service plus cable broadband -- but I don't see how adding a bunch of "free" content is going to solve the telco problem, which is network capacity.


So you buy service with the lure of being able to watch "The Office" all day long without using up your contracted data limit -- isn't this the iPhone problem on steroids? Especially on a mobile connection, where the data caps are the reality?

kaps
kaps
12/5/2012 | 4:41:49 PM
re: A New Broadband Content Business Model


I understand the logic of circumnavigating net neutrality rules by creating some private third pipe -- maybe comparable to having a cable TV service plus cable broadband -- but I don't see how adding a bunch of "free" content is going to solve the telco problem, which is network capacity.


So you buy service with the lure of being able to watch "The Office" all day long without using up your contracted data limit -- isn't this the iPhone problem on steroids? Especially on a mobile connection, where the data caps are the reality?

paolo.franzoi
paolo.franzoi
12/5/2012 | 4:41:48 PM
re: A New Broadband Content Business Model


Okay, I am not sure that we really have a defintion of net neutrality (which is one of the problems).  Let me go here then.


I really see most of the content that network operators try to own as pretty poor.  The content owners are still going to charge for this if operators want preferred access to the content.  Does this not basically wipe out the reason for this?


My view (probably quite slanted) is that content owners and network operators require distinctly different companies.  The bulk of the "good" content will not be owned by the network operators, so they will have to buy it from the content owners. This is the way cable works today.  So, I am not sure that paying for something and then making it free to consumers is a good idea.  What they might be better off doing is creating a subscription service and have that ride under the bandwidth cap.


seven


 

paolo.franzoi
paolo.franzoi
12/5/2012 | 4:41:48 PM
re: A New Broadband Content Business Model


 


Phil,


If folks start doing this, won't it be construed as another form of the violation of net neutrality?  Basically, it limits the long term use of non-proprietary content.  It may treat this content at the same QoS, but it does not do so under the same terms.


I recognize this is pushing the argument.  But I think it is interesting to see where it goes.


seven


 

DCITDave
DCITDave
12/5/2012 | 4:41:48 PM
re: A New Broadband Content Business Model
I guess my answer is, no, not as net neutrality is currently defined. Giving consumers an incentive to consume some packets more than others -- without penalty if they choose not to -- is nothing more, in my mind, than a form of advertising.
DCITDave
DCITDave
12/5/2012 | 4:41:48 PM
re: A New Broadband Content Business Model
I think the first application of this will come from the broadband providers that already own content. TWC. Comcast. Cablevision. I'm sure there are a few more, just can't think of them at the moment.
rjmcmahon
rjmcmahon
12/5/2012 | 4:41:47 PM
re: A New Broadband Content Business Model


The idea that some content won't be counted against the consumer caps seems obvious.  Though due to the diversity of consumer generated content suppliers (which is what rides on the so-called "broadband channel") it really makes more sense (and cents) for the access oligarchs to charge the producers for the distribution, i.e. bits are still counted but the producer is charged and not the consumer.  I really don't see any reason for the access providers to buy "content properties" when they can tax all of them instead.  They'll make more money because it's a lot easier to tax the winners during distribution and in realtime vs. pay for massive production costs (most of which goes towards flops.) 


All of this does assume that the bits will be paid for and the free rider problem (which TV/Radio never really overcame) is mitigated.  If the free rider problem remains then it's all about advertising.  In that case I'd expect the "broadband channel" to turn into the home shopping network on steroids.

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