Cuban Won't Stream HDNet

ATLANTA -- NCTA National Show -- HDNet founder Mark Cuban pledged to the cable industry here Tuesday that he would not use the open Internet to distribute his company’s high-definition video content.

“You’re never going to see a streaming HDNet,” Cuban said. One of the cable executives sitting next to Cuban asked him to "promise.” And Cuban did. (See Broadcast TV Will Never Die.)

That's pretty interesting, coming from a guy who made his fortune building a streaming media empire. Cuban founded Broadcast.com, a company that broadcast sports games, conference calls, presidential debates, and loads of other things via Internet streaming. The company was acquired by Yahoo Inc. (Nasdaq: YHOO) in 1999 for $5.7 billion in stock.

But Cuban's latest venture is HDNet, billed as the first all high-definition (HD) television network. And the rules are definitely different in a high-def world.

In the panel today, Cuban spoke to the increasing anxiety of many Internet businesses that bandwidth scarcity in the last mile might impair the delivery of content or services. (See Video Is the Internet.)

“Why would I want to stream video on the Internet when I can’t control the user experience?” Cuban asked. “When I don’t control the last-mile pipe, particularly in the HD universe, you can be a victim of your own success and disappoint your customers.

“I would much rather go with my partners,” Cuban said, gesturing at the cable executives on the stage with him. “I would rather partner with you because you can control the service over the last mile."

Of course Cuban didn’t get much argument from the cable guys on the panel. “The Internet really isn’t built to distribute mass-market video,” said Cablevision Systems Corp. (NYSE: CVC) COO Tom Rutledge. “If you really want to do video you have to be partnered with the cable industry.”

“It’s all about QOS,” added Cox Communications Inc. president Pat Esser. Esser took the opportunity to remind the audience that no cable company has ever, ever even thought of blocking or impairing Internet packets of any kind -- not even from competing Internet video services. (See Net Neutrality Debate Wydens.)

Cuban's remarks run contrary to what a lot of content makers are saying here. Increasingly, many content owners seem willing to try the Internet for distributing video. A spate of content deals have been struck during the past year between large content providers like Disney and Internet video storefronts like the Apple Inc. (Nasdaq: AAPL)'s iTunes store.

Both Disney Media Networks co-chair Anne Sweeney and NBC Universal Cable president Jon Zaslav said on panels here that their companies want to reach beyond traditional broadcast and cable TV models to market their content.

“A broadband download might mean watching video on your computer today, but six months from now it might mean watching that content on your television,” Zaslav said. “Watching TV on these remote devices might turn out not to be such a big deal, but video piggybacking on broadband might turn out to be game changing."

— Mark Sullivan, Reporter, Light Reading

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paolo.franzoi 12/5/2012 | 3:57:47 AM
re: Cuban Won't Stream HDNet

Can you outline why a carrier would invest in fat pipes? I believe you have constantly said that these carriers will continue to be pipe providers. If so, and there is no money to be made in laying down fat pipes then why will anybody do it?

Lite Rock 12/5/2012 | 3:57:47 AM
re: Cuban Won't Stream HDNet So much for "Open Systems"! :-)

If Mark says it, it must be true.

It is all a matter of what the consumer is willing to tolerate. Standard broadcast, yup, HDNet, nope.

materialgirl 12/5/2012 | 3:57:47 AM
re: Cuban Won't Stream HDNet Folks get confused about change, that is always slower than you think near-term, but faster than you think long-term. Just as PCs went from 8-bit processors with 512k of memory, to the monsters of today, broadband will grow faster than we think in the long term, if not in the short term.

The correct strategy is therefore to position yourself now for a world where the pipes are fat, now. Staying with an old business model for the sake of HDTV seems backward. Another strategy would be to stream something barely watchable, but hip. Learn how to operate in the new environment of user control, then slowly become unbeatable while no one is watching. That is what GOOG and MSFT did.
DCITDave 12/5/2012 | 3:57:46 AM
re: Cuban Won't Stream HDNet re: "That's not to say he wouldn't allow non-real-time downloads."

Even if HDNet allowed downloads, he still couldn't control the end user experience -- not the same degree as a Dish Network or Comcast.

I think the larger problem with HDNet now is that there's nothing good on it. The original programming is derivative -- not riveting. But it is pretty...

johncom 12/5/2012 | 3:57:46 AM
re: Cuban Won't Stream HDNet Listen carefully to Cuban's words. He won't stream HDNet. That's not to say he wouldn't allow non-real-time downloads.
rjmcmahon 12/5/2012 | 3:57:46 AM
re: Cuban Won't Stream HDNet Didn't Yahoo close down most of broadcast.com? Maybe Cuban's perspective is coming from that outcome.
"Ill" Duce 12/5/2012 | 3:57:45 AM
re: Cuban Won't Stream HDNet Well, I can't get HDNet via cable and I live in Cuban's hometown. I do see it at the Best Buy and it seems really great if you dig bugs.

It seems to me that everyone in the cable business is thinking that people want to plop down in front of a television at a specifed time to receive a content stream. I think the market has moved beyond location shifting. The personalization of media extends beyond the content, it's a function of time, place and content. It's ironic that Cuban, he of the paradigm-shifting, disruptive, DNA breaking 2929 productions, would stick to such an old-school thought. Then again, having a friend like the MSO's gives him a greate outlet for his films, eventually bypassing theatres altogether.

Since when does he care about the experience? He formed Broadcast.com when OC-12s were considered backbone pipes, and 56k was relatively fast. If the internet pipes are based on the existing TDM and SONET infrastructure and that infrastructure is being replaced with IP and striving for <50ms hits and five9s reliability, I find his argument specious. Besides, aren't the MSOs moving to IP as well? And arent't they also moving into WiMAx and Wifi? Hardly carrier class.

materialgirl 12/5/2012 | 3:57:45 AM
re: Cuban Won't Stream HDNet Dera Seven:
In my perfect world, we would have regulators who understand the importance of fat, cheap, pipes in the service of overall economic development, like highways. To this end, they would assist in building the fattest, most economical, network technically available at the time. Connectivity as an "essential service" if you will.

In my mind, this "assistance" means granting a local monopoly, since network rofits are a function of penetration. I do not believe that carrying IP traffic will yield any more profits to service providers than airlines do to their shareholders. Rather, it is the ultimate commodity. I am, after all, a material girl. I want profits too.

So, in return for this local monopoly, the carrier would have to put up with regulated rates, in exchange for a "fair" profit. This model attracts utility types.

I understand this has been tried before. It was how we got the world's best telecomm network, until recently. I do not think this is simple to pull off, only that it is necessary. I do not expect anyone to lay pipe or maintain operations for free. However, if we sacrifice the open internet to a mis-guided content distribution model, our fragile hold on economic dominance will evaporate even quicker than is now imagined.

After all, the folks in China are smart, and work harder than we do. They are not, however, free to communicate or innovate. If we are not free to innovate as hard as we can, they will copy everything we do, drill the price to zero, and leave us with nothing. The Indians are likewise smart and hard working, if not a bit more innovative. If success in a shrinking global service economy will be a function of innovation, limiting our innovation engine, our open internet, seems like economic suicide.
CoolLightGeek 12/5/2012 | 3:57:44 AM
re: Cuban Won't Stream HDNet Lite Rock,

By 2016, you will definitely see most premium HDTV movies for internet download for $4.99 or less.
iTunes turned CD industry on its head:
Its ludicrius to think the same thing won't happen to Hi-Def video content.
Once content is made, the goal always becomes making a buck off of every last consumer. Every content provider has his price, even Cuban.
He and others might leave fresh content (under 24 hours old) exclusive to his premium cable buddies, but commerce always gravitates to the lowest cost reasonable quality mechanism.
All delivery systems should assume a high capacity/quality DVR is becoming a typical part of the solution (whether cable, IPTV, or Internet).
Convergence is happening in the living room: people will become even more source agonstic than they already are- PC/Internet connectivity to the large screen in the living room will become as common as DVD connectivity. Cable or Telco Content "choice" will seem myopic compared to the breadth of premium choice that will become available off the Internet.
The basic channels/local news/local sports will come from the cable and telco guys- but they better leave capacity for a 10 Mbps for internet download. The DVR will take care of any temporary throughput issues.

Wake up and smell the pixels.

By the way, I've become an HDTV bigot: I won't watch Lost episodes off the internet until they are available in HDTV quality for my big screen.
Video on an iPod or a PSP is downright unpleasant to me (and especially so when I know what the original content is actually intended to look like). Its worse than forcing an audiophile to listen to their favorite song via music on hold.

Lite Rock 12/5/2012 | 3:57:42 AM
re: Cuban Won't Stream HDNet CLGFR,

"By the way, I've become an HDTV bigot:"

"By the way!" Your understandable bigotry should should take a more prominent place in you comments. Oh trust me, I see the pixels.

Once you've had the best forget the rest.

I can't even bring myself to drink a bottle of wine that has scored at less than 91 ;-)

Many would say you are a leader in the conversion to new technology and applications. Some would say you are breaking wind for the rest of us.

You are ahead of the curve and I will not ask you to slow down. As noble as the socialistic among us want to be, profit will ultimately rule the day.

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