[26 November 2008]
San Jose Mercury News (MCT)
For consumers fed up with their cable companies, a new alternative is emerging.
Call it Cable 2.0: You get many of the same TV shows and movies, often with fewer commercials. Better yet, you get to watch what you want on your schedule, not the cable network’s, and you don’t have to pay for anything more than a simple broadband Internet connection.
But there are some catches, the biggest of which is that there’s no easy way to get the video from your computer to your TV - yet.
The next-generation cable TV is coming to consumers via video aggregation sites on the Web, including Hulu, Joost and Veoh. Joining that group on Nov. 24 was Sling.com, a similar site from the makers of the Slingbox.
Getting their content onto your TV is just one current shortcoming of those sites, but for some they are starting to become an alternative to cable.
“Not only is that a theoretical thing, but we’re seeing more and more people (saying) that that’s what they’ve already done,” said James McQuivey, a media analyst at Forrester Research.
The Web video business has been developing rapidly. Digital media leader Apple didn’t start selling television shows through its iTunes store until three years ago and didn’t add movies until a year after that.
Apple has sold millions of videos through iTunes and has since started a video rental service. But its offerings and similar ones from rivals such as Microsoft are more a replacement for buying a DVD at Target or renting one at Blockbuster than for tuning into the SciFi Channel on your cable box.
Over the last year, however, Web video has begun to look like what you get on cable. It has moved from a download model to the streaming one pioneered by sites such as YouTube. Through such sites, consumers often can watch video for free nearly instantly through a Web browser.
Sites such as Hulu, Joost and, now, Sling.com offer thousands of television episodes and a growing number of feature films from a wide variety of networks and studios. You can find everything from the latest episodes of “The Office” to “Master and Commander: The Far Side of the World.”
Sling has made deals with about 150 different networks and brands, including CBS, NBC, Fox, USA Network and the SciFi Channel. There are some big holes in the lineup - it doesn’t include ABC or ESPN, for example - but consumers can expect the selection to grow, analysts and insiders say.
“I think we’ve landed on Plymouth Rock and are on our way to L.A.,” said Jason Hirschhorn, president of Sling’s entertainment group. “It’s in the very early stages.”
Among the advantages of Web video is that you’re not limited to watching it just where you have a coaxial cable or set-top box. Instead, you can watch it wherever you can get an Internet connection and on a range of devices, from laptop and desktop computers to mobile phones and handheld devices.
That appeals to younger consumers in particular, notes McQuivey. “They’re more open to the idea that it’s not even TV anymore,” he said.
But other than the young, few consumers may be ready to ditch their cable service and tune in to something like Hulu or Sling.com. Such services offer few live broadcasts, an obvious drawback to sports fans or news hounds. And while cable and satellite services are rapidly expanding their high-definition offerings to satisfy the demand of the growing number of HDTV owners, you’ll find very few high-definition video streams today.
While you can watch free streaming videos of many current TV programs, the latest episodes often aren’t available until days or weeks after they are broadcast on TV or cable. So you might have to plug your ears if the water cooler talk turns to last night’s episode of “House.”
Worst of all for the classic couch potato, it’s just not easy to get streaming video from the Web to your TV. Gadgets such as Apple TV or the new Roku box allow you to watch videos from only a limited number of sites. Other devices, such as Sling’s SlingCatcher, allow you to watch just about everything on the Internet, but they work only if you have a PC running and connected to them.
Meanwhile, cable companies aren’t standing still. Comcast, for example, has launched Fancast, its own Web video site, and is expanding the number of on-demand videos available through its traditional set-top boxes.
That’s why some analysts think that for most people the Web won’t be a real competitor but more of a complementary service to cable for the foreseeable future. Dealing with the rights issues around when and what content is available online is likely to prove thorny, said Michael Gartenberg, a technology analyst with Jupitermedia.
“Until (the content producers) are really willing to disrupt their core business model, you’re not going to see this stuff change,” he said.
But others think it’s just a matter of time before Web video is a major market force.
“Should a cable provider be worried today about losing subscribers in 2009? I don’t think so,” said Greg Ireland, an analyst who covers consumer video services for industry research firm IDC. But he added, “The value proposition of Internet video will get stronger and stronger as the years go on, and that will diminish the value proposition of pay TV.”