Saturday, January 07, 2006

TV Meets the Internet as Manifest Destiny -- Soon?

"At one level it's clear that the dam has broken," says Paul Otellini of Intel, quoted in John Markoff's post-CES report in the Times. "There's an inevitable move to use the Internet as a distribution medium, and that's not going to stop." Markoff gives a strategic perspective on the walls cracking, and the flood of prime content to come, as major new powers weigh in on the open Web.

The owners of the distribution pipes may be able to keep their lucrative stranglehold on access to prime content for a number of years yet, but it is suddenly becoming clear that their power as gatekeepers between content providers and consumers has little value to anyone but them. Dams can resist gravity for a long time, but when the breaking point is reached, they can collapse very quickly.

As Markoff reminds us,

"At the onset of the dot-com era, large online service companies like AOL, Compuserve and MSN tried to lock customers into electronic walled gardens of digital information.

But it quickly became apparent that no single company could compete with the vast variety of information and entertainment sources provided on the Web.

The same phenomenon may well overtake traditional TV providers. Potentially, IPTV could replace the 100- or 500-channel world of the cable and satellite companies with millions of hybrid combinations that increasingly blend video, text from the Web, and even video-game-style interactivity."

Many have seen this manifest destiny. But the power of the entrenched cable and satellite companies, with their exclusive contracts for prime content, has made that destiny seem ever far from reach. Telco TV is going down the same road of proprietary walled gardens. These distributors control the TV pipes, but the Internet pipe they also carry is a Trojan horse. They will try to throttle this open pipe that passes through their walls, but can they?

Now the big guys of the Internet and the PC are getting serious about making that alternate pipe attractive to consumers by providing an array of prime content through it. The business models, rights management, and bandwidth still need a lot of work -- but maybe this vision of real Internet TV is no longer so far off.



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