Is 1 Gig Really Necessary?
Debate involving whether cable operators will give consumers Internet connections capable of delivering quality high-definition TV pictures and other bandwidth-intense applications was a hot topic at the closing CTAM Summit panel here.
HDNet CEO Mark Cuban said July 25 that fiber pipes owned by cable operators and other high-speed-Internet providers would eventually allow them to offer consumers Internet speeds of 1 Gigabyte per second, or thousands of times faster than the download speeds sold by most providers today.
But Cuban added that he doubts that cable operators, with businesses built on selling $50-$100 monthly packages of pay TV services to subscribers, would give consumers Internet speeds capable of obtaining similar content via the Internet.
“To think that [Charter Communications CEO] Neil [Smit] and [Time Warner Cable CEO] Glenn [Britt] and [Comcast CEO] Brian Roberts and everybody is going to put a Gigabyte to the home in the next five years to ensure all your bandwidth — it’s just not going to happen,” Cuban said Wednesday. “And over the next 10 years, it’s questionable.”
Britt, who joined Cuban on the panel, said he disagreed with Cuban. “You could do it [offer consumers 1 Gbps of bandwidth],” Britt countered. “It’s a theoretical matter.”
But Britt questioned the need for such a high-speed offering, asking, “What’s the benefit to that consumer?” Britt noted that Time Warner already offers a wide choice of video programming.
- Britt said Time Warner and other cable operators need to improve the quality of their consumer marketing pitches, saying that the company needs to market its products similar to the way consumer-goods giant Procter & Gamble does. “I think that as you think about the operator part of the business going forward, we have a lot of competition. At some point somebody’s going to say, 'Why should I buy Time Warner Cable instead of Verizon [Communications]?’”
- Three years from now, the average new television will be a 70-inch HDTV that sells in retail outlets for $1,900 or “maybe less,” Cuban predicted.
- The mandated February 2009 cutoff of analog broadcast signals will spark a huge retail push for HDTVs during the preceding holiday season, Cuban said, adding, “The Christmas before [the cutoff date] is going to be crazy. Everybody will know it’s right around the corner. All of the retailers will push high-def sets; cable and satellite will beat each other up over $1 [programming] offers.”
- ESPN is using its Web site to test new advertising models that could be applied to its television networks, including 10-second spots, president George Bodenheimer said. But video advertising isn’t going away, even with the popularity of ad-skipping digital-video recorders, he added. “People understand there’s no free lunch out there … They’re not living just to skip through an ad. You work on the format. You shorten them. Don’t make it intrusive. I don’t think video advertising is going away,” Bodenheimer said.
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