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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CoolLightGeek 12/5/2012 | 3:57:23 AM
re: Cuban Won't Stream HDNet Scott,

HD will come across the Internet and for now, it does not have to be realtime streamed.

If most of the value from the content is the visual stimulation, that is, the intent of HD, then compromises on streaming or display quality are just defeating the whole purpose.

LRTV would need to film in Hawaii or actually show vendors equipment close up before I would start desiring HD content from you guys.

As you are, the lower resolution is actually quite flattering ;)

DCITDave 12/5/2012 | 3:57:23 AM
re: Cuban Won't Stream HDNet re: "Broadcast.com.. as far as I can tell... went NOWHERE!"

i've seen his house. the size alone would suggest otherwise.

the ted turner analogy is spot on, though. being the mavs owner IS his celebrity right now and that alone opens more doors than his HD programming.

sunra 12/5/2012 | 3:57:24 AM
re: Cuban Won't Stream HDNet Umm Scott, HBO and ESPN already have HD channels. While HDNet isn't ecactly offering cutting edge programing it has more than bug shows: NHL games which are way cool in HD, plus a limitied but eclectic selection of movies in HD. People with HD displays are dying for something to watch, and with only about 5 non-premium HD channels HDNet is filling a void.
Scott Raynovich 12/5/2012 | 3:57:24 AM
re: Cuban Won't Stream HDNet Yeah I dunno. Broadcast.com.. as far as I can tell... went NOWHERE! Plus, the stock picks on his blog really suck.

He does know how to run a Basketball franchise, that's for sure. Maybe he's going to try to do the Ted Turner thing.. use the sports franchise to leverage his media empire.

Scott Raynovich 12/5/2012 | 3:57:24 AM
re: Cuban Won't Stream HDNet Yeah I get ESPN HD. But from what I've heard from the HD geeks, it's not "real" HD (like half resolution). And not all the programming on ESPN HD is full size.

What I'm saying is at some point in time, probably in the next 3 years, everybody's programming will just be in HD and that will no longer be a point of differentiation. I mean, really, it's just the type of camera and transport you are using!
DCITDave 12/5/2012 | 3:57:25 AM
re: Cuban Won't Stream HDNet yer looking at it from a content pov, boss.

cuban's genius at broadcast.com wasn't the content -- it was in being the first, and exclusive, distributor in a new medium. that's how he locked the NBA for the Internet broadcasting rights to all their games for so long.

HDNet, because it's only available in HD, is Cuban's way of getting a channel picked up by all the Dish providers, and most of the cable guys and lots of IOCs. It's distribution.

He'll make more money off sending around cheap and the cheerful HD shows he does originate than we can imagine simply because it's the only game in town.

But, when HDNet ceases to be the only game in town, his pull with the mavericks and some movie distributors will mean he'll go back to locking up exclusive distribution deals again. and he'll make another billion or so on that.

not that i'm jealous or anything.

Scott Raynovich 12/5/2012 | 3:57:27 AM
re: Cuban Won't Stream HDNet Let me toss something out here:

Isn't the whole concept of HDNET kinda silly? It's like when they came out with color TVs, you would declare yourself the "Color TV Channel."

HD is just a technology, not a content vertical. Folks like NBC and ESPN will just port their content to the next level of HD. If Cuban is smart he will focus on content in niche and growing areas like Spanish-language programming and organic farming -- where nobody has anything. Rerunning footage of swimsuits models at Best Buy has its novelty right now, but as soon as HBO, ESPN, and MTV have their own HD content it won't matter anymore.

CoolLightGeek 12/5/2012 | 3:57:30 AM
re: Cuban Won't Stream HDNet Why-

8 track tapes had at least a good 8 years, but is now historically are looked at as an inferior technical gimmick. IMO, video with a 1 degree field of view and sub-DVD quality pixels will go the same way.

Lots of companies made good money on 8 tracks and I don't begrudge them one bit. Lots of money can be made on technical fads and fads can be appropriately evolved into tools that stand the test of time.

Historically, low quality display of high quality content will be viewed as a fad and a compromise- Do you really want argue against this? iPods are great for music because their technical capability is passable and the portability makes them easy to integrate into a multitasking world. Good movies and other premium video are not meant for multitasking- they are meant for immersion. TV shows that are not especially visually stimulating are fine to watch (actually most consumption is actually listening to these shows) using a small pixelated screen.

But again, I'm a HD elistist. It used to be that AM radio was "fine" quality for listening to music.

Timing and strategy is not everything to me. Selling something to someone you will know will end up with "buyers remorse" may make you rich, but it lacks integrity. Sony is recognizing this and there is talk of pulling the plug on the UMD format movies for PSP. IPod Video quality is embarrassing bad when compared to PSP.
Portable 6-9" DVD players are doing much better than either iPod or PSP. Laptop PCs with DVD do better still.

Premium video is intended for the largest and best video display in the theater or in the home theater. Everything else is curently a very significant compromise.

whyiswhy 12/5/2012 | 3:57:33 AM
re: Cuban Won't Stream HDNet Cool dude:

I say there's a ton of old movies that would generate nice revenue from a cheap device in NRT...for $1.99 each. And it does not have to be HDTV, but it could be. And it does not have to use big pipes, but it could. And it does not have to be RT, but it could. All in time.

Timing is everything. So is strategy.

They call it IPOD.

danielsk 12/5/2012 | 3:57:35 AM
re: Cuban Won't Stream HDNet Caveat though, IPTV needs to really work on the MPEG4 tolerance to packet loss in even a closed IP network. Stick to the highspeed 100 mbps pipes for now.
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