Interestingly, video enabled cloud computing in the manner we are formulating would be an ideal technology for a consolidated cable infrastructure that supports cable channel programming, VOD, Internet video, and other services.
Substantial advantages in the business and operations of the cable operator and to the viewers of cable programming would result from Cable in the Cloud. However, proceeding down this path is probably a more significant change from traditional cable infrastructure than the change from analog to digital cable infrastructure in the 1990s. A transition to Cable in the Cloud raises several significant issues and questions that need to be addressed. Some of these issues can be so consequential that they can delay or subvert a truly consolidated infrastructure.
Though cable is of course becoming all digital, cable video transport technology and the supporting infrastructure are still separate and distinct from the Internet. This separation is an artifact of the history of how cable and the Internet evolved separately, even though many of the early and later objectives overlapped.
Traditionally, a cable company provides a “walled garden” of video content and services. With the emergence of Internet video, content from YouTube, Hulu, etc. are delivered via the Internet using the cable modem infrastructure as a “dumb pipe” to go “over the top” of the “walled garden”, bypassing the cable company’s video delivery infrastructure. This “over the top” delivery of video potentially competes with cable channels and VOD services for consumer attention and spending.
The use of terminology like “over the top” and “dumb pipe” characterize and position Internet video as something distinct if not foreign to cable TV. The ramifications and reverberation of this characterization tends to suppress thinking of how to base the cable industry on the Internet.
Forward thinkers in the cable industry have long realized the potential of the Internet and Internet video. We have worked in both the cable industry and Internet video, and for many years, have engaged in discussions of how and when Internet video would be embraced by the cable industry. This is not a new topic. It has always been just a matter of time and form.
Five years ago, we produced a business model analysis for the emergence of Internet video. Since then, the growth of the Internet video market has fairly closely matched our original model. The cable market did not feature significantly in that original model; the cable industry had just completed a substantial investment on digital cable infrastructure and VOD. We speculated then that it would be at least 5 years before the cable industry would be ready to embrace the Internet as a full fledged carrier of video.
Here we are 5 years later, and we are beginning to see early indications of the melding of cable and Internet, such as settop boxes that can display video on a TV where the video can be delivered via digital cable channels, DOCSIS channels, or a separate Ethernet port. The emergence and capabilities of DOCSIS 3.0 also provides a significant pull toward Internet delivered video.
The Internet provides a common flexible platform that provides an economy of scale that improves at scale. In other words, as you use the Internet and as the Internet gets bigger, it offers more capability and becomes cheaper. Due to Internet’s benefits, unless there are artificial barriers, the Internet always subsumes alternative means of delivery.
This does not mean that cable providers will simply become network providers and that public Internet delivered video will replace cable infrastructure delivered video. It does mean that sooner or later there will be changes in cable infrastructure and business models.
If cloud computing becomes video enabled in a timely fashion, then video enabled federated cloud computing can become a viable and enabling technology for a consolidated cable infrastructure that supports cable channels, VOD, Internet video, and all other Internet services.
Later, we will explore scenarios and directions in which cable TV and television will evolve. This continuing discussion of how the cable industry embraces Internet video is an integral part of our discussion of all things Video in the Cloud.