The lack of a broadband pipe and the subsequent inability to offer video on demand is the proverbial glass jaw of John Malone’s satellite broadcasting service, DirecTV. While the broadband dilemma is likely to continue for a while, DirecTV has come up with a workaround for the VOD problem. Given that the company has been talking about this for nearly two-and-a-half years, don’t blame me for being skeptical. Skepticism or not, it’s a kludgy workaround.
DirecTV is going to stream videos over broadband pipes to its set-top box; the videos will then be shown on the television set. They will also send pre-selected video content, mostly popular movies and TV shows from the satellite, and store it on the hard disk inside the set-top box.
The problem is that streaming via the web is an inexact science that, at best, will deliver a patchy performance. If the streams are going to match the HD-quality videos that satellite customers are accustomed to, then that broadband pipe is going to be filling up pretty fast. Forget Network Neutrality. Imagine how ticked off you’ll be when your home email access slows to a crawl because someone’s watching “America’s Next Top Model.”
DirecTV and other such satellite TV services are extremely popular in areas where cable access is hard to come by, which means they’re also the kind of locales where broadband access (of any kind) has its own set of problems. As analyst Bruce Leichtman told The Wall Street Journal:
“If I have to wait 40 minutes to watch an episode of ‘The Sopranos,’ that is not really on-demand… That takes away from the impulsive nature of on-demand and loses a large purpose of the service…People are possessive of their DVR space and don’t really want stuff pushed on them.”
The whole thing has a déjà vu feeling to it. Check out these reports from 2005, 2006 and 2007, all of which pretty much say the same thing. There’s nothing about what DirecTV is doing to convince me that it’ll work this time around.
Still, wanting to give folks from DirecTV a chance to state their side of the story, I emailed them yesterday (now over 30 hours ago) hoping to get some clarifications as to how the system would work. Among the questions I asked were what bandwidth requirements the stream had, what the bare minimum speed requirement was and if the video playback was going to be instantaneous. I also asked about the technologies they were using for both broadband and satellite delivery of the content, and how much space on the disk drives they plan to carve up for the downloaded content. So far, no reply!
Their lack of response is telling: What they have is a beta that has been almost three years in the making and whether it will work on a large scale remains to be seen. I wouldn’t hold my breath!
The satellite TV companies are the ones that could benefit the most from WiMAX. They already need a professional install and external antenna for their TV service, so adding another antenna and box for broadband is a small incremental cost. They should have bought their own spectrum and deployed it themselves, but they didn’t. Lucky for them Sprint and Clearwire really need money. Why hasn’t this deal already been made? Too simple/logical to happen?
You’re obviously not a DIRECTV customer. They rolled on this VOD in Beta form to all HR20 and HR21 receiver owners about 3 months ago. I have DSL at home and the wait time is under a minute for all movies and shows I’ve tried to watch. I have not tried HD content yet since I haven’t seen any in there.
I don’t get your criticism on DTV vs an Apple TV which basically does the same thing.
Also, have you tried a Slingbox? Streaming a high quality tv signal doesn’t require as much bandwidth as you might think.
“The problem is that streaming via the web is an inexact science that, at best, will deliver a patchy performance.”
DIRECTV owned boxes form the best p2p network out there and have the most reliable delivery mechanism. There are a number of new technologies that are turning P2P technologies into “carrier-class” delivery mechanisms. This is a great development for DIRECTV.
@ Disagree,
it would be nice to have your name. That said, is the service available at scale and how does it perform at that point. I would withhold judgement at that point. Nevertheless, you talk about p2P technologies. Can you shed some light on this? I would love to know more details.
@SimonSays,
Well I have the same issue with Apple TV as well, and it is still hard to get the right experience on that box. Neverthless, I wanted to see if you live in suburban, rural or urban areas. I think a lot of satellite customers are in areas where broadband is patchy, at least in the US.
@ Jesse: Funny, I was thinking about a Sprint/Clearwire and satellite partnership for some quite time: Sprint/Clearwire could be partnering up with a satellite co to help with Internet and on-demand, (w/ pre-allocated bandwidth for on-demand)… Perhaps a satellite STB that also has WiMax capabilities. They can even take that a step further by combining it with a fixed-mobile convergence offering to cut off the landline as well and offer a triple package. However, Sprint also announced a partnership with the four large cable companies a while back but I am not sure what came out of that. Such a deal would probably interfere with the cable companies who are also trying to get back at AT&T/Verizon’s fiber efforts while also battling the satellite guys.
Forgot to mention — since the cable companies want to offer VOIP which has a great ROI for a product with very predictable data flow, the fixed mobile convergence idea for sprint might bite them a little whereas the satellite companies cannot do it and compete directly with the cable companies and now ATT/Verizon too. To acknowledge the rest of the posts, of course a tie-up with WiMax has its technical complexities… and this may prove to be a dealbreaker. Also, when does DBS start to convert to satellite systems capable of direct two-way such as Hughes Net (w/ more bandwidth flexibility)… something similar to what the Japanese tested recently.
The real problem here is bridging the ‘popularity gap’. DirecTV’s system (and broadcast systems in general) are great for delivering a small number of channels to a very large number of people simultaneously: 10 million people watching The Simpsons at once would crush any Internet unicast delivery system flat under the load (assuming a 1Mbps stream, that’s 10 Tbit/sec of traffic!) while a satellite system wouldn’t even notice any difference. At the other end of the scale, Cisco or Microsoft pushing a promotional video clip about their latest shiny new product out to a few thousand people would be silly on satellite, but perfectly feasible with a good Internet server farm or an Akamai account.
Cable modems, thanks to the shared bandwidth, are less well suited to video, particularly P2P (downstream traffic is nice and efficient, being managed directly by the head-end – but upstream traffic is much more problematic, which is why they dislike servers and P2P apps so much).
In theory, DirecTV could build a great system, combining server-based delivery, P2P and broadcast: with the right software, they could switch customers seamlessly between delivery mechanisms, broadcasting (say) the 100 most popular streams over satellite, a few thousand streams of niche content from a server farm and filling the gap with P2P. Obviously it needs broadband for anything other than straight broadcast content – but of course, that applies to any realistic VoD approach, and can hardly lose them customers to cable!
I’ve been using D* (DirecTV) VOD beta since December 2007. My kids love it because if one wants to watch Sesame Street, we can go VOD.
I currently experience roughly a 1:1 ratio – 1 minute of download required for 1 minute of SD programming. I give it a 5 minute head start and we’re watching standard def episodes of Sesame Street.
A lot of your questions are answered and feverishly debated / discussed over at dbstalk.com
Might be worth a visit. (I’m not affiliated and don’t benefit from mentioning dbstalk.com)
See, I agree with some of the other people. I essentially have this experience right now with AppleTV. I can start watching a movie generally in less than a minute if I rent. That’s not bad. I have crappy Time-Warner cable Internet like half the rest of the country.
Makes you wonder why the DSL and cable companies aren’t trying a lot harder to deliver better bandwidth. The demand is there, and having a clear winner seems like a slam dunk for customer retention.
@Jesse & Shah:
Both DirecTV and Echostar have already partnered with Clearwire.
http://gizmodo.com/gadgets/wimax/directv-and-echostar-partner-for-wimax-internet-access-268922.php
@Jason:
Thanks for the link. The problem with doing a deal solely with Clearwire is that they don’t offer a mobile phone service. That means that if you have a package from DirecTV/Echostar/Clearwire, you’re paying someone else for phone services (landline/mobile). I wonder if it makes sense for Sprint and Clearwire to just tie the knot instead of being fickle on a joint venture.
@Shah:
You might want to check out one of Craig McCaw’s other babies: ICO Global Communications. They are attempting to leverage satellite and terrestrial like so many others over the last couple of decades. ICO’s model isn’t as aggressive as Teledesic; instead focusing on more of a satellite radio model: satellite for rural and low penetration, and terrestrial for the population centers. ICO’s first bird is going up next month.
@Jason
Yes, a deal was announced, but many such deals are announced and nothing comes from them. You should only give credence to those that mention specific dollar figures and time frames and even then that only means there’s about a 40% chance that some variation of what’s been announced will actually happen.