Here are some
further notes from today's Stanford Symposium on new networks and
content models. The Symposium was broken into four panels. This is panel 4.
Media Networking: The Battle for the Living Room
Bernd Girad of
Stanford notes that the entire Netflix archive is 400TB, or
200TB compressed in mpeg4. Since disk drives increase 10x in
capacity every 4 year's (Shugart's Law is steeper than Moore's Law, except no disk
company got an architectural lock, so the drive business is a doggie race
to the bottom), a normal $65 drive will be in that range within 10 years. Maybe
then Tivo has a business model.
Moshe Lichtman of MSTV tried to explain why the company which lost $4B on xbox so far and invested $12B in cable/telco and lost at least half of that could make it up in volume. At least he spoke loudly. He was animated! He thinks IPTV will be big, really big! ... as big as b+w to color, radio to TV, as big as TV itself! And MS can make it better, by for example making the channel switch from 2 seconds (satellite) to under one second, or by giving access to new content like Bollywood movies. He demoed MSTV and the demo worked! He was able to switch instantaneously, which was pretty cool until he explained in a quieter voice that this was just for DVR content. But he did show some cool features, such as watching 4 baseball games at once, although his demo just showed four different skiing videos. Did he answer the initial question, how to make it up on volume? Usually the explanation for Microsoft's losing billions in set top boxes is to win the set top OS business and replicate the architectural lock of Windows on the PC. His answer instead is that MSTV will move the center of gravity from STB back into the network. Huh?
Tony Aoki of Sony talked of the need for a STB standard - like an OS! Solving incompatibilities between file formats, DRM, carrier networks, and other devices. That was it from Sony. Clearly they lack any sense of what to do anymore.
Reed Hastings of Netflix framed this as a 20 year fight for who has control. If TV wins, we get subsidized set tops, and with it faster channel switching (applause), but they control what we see. New media will develop on the web, as the forces of freedom will spend more time on the PC. The alternative is an open platform where the laptop or equivalent is the remote, and you can chat etc. watching TV. Ironically, the champion of the open world is - Microsoft! They never have charged for access to their world. In the open world, the long tail is a proven model - that is Netflix's business. He gave an example of a new movie called Hustle filmed cheaply with $3000 HD cameras from Sony and marketed by Netflix. He proposes we stop calling broadband a dumb pipe, instead call it a profitable pipe! They could make an even higher profit charging $40 for the pipe and letting the forces of freedom offer content. He sat down to the wildest applause of the day.
Dan Rosenweig of Yahoo says he is for freedom, but he is part of the forces for the market. Originally access had premium pricing, but now it is commoditizing. Devices are commoditized and subsidized. Only the consumer cannot be commoditized. He noted that 68 billion photos are stuck on cellphones and can't get off since the forces of control are trying to force the consumer to go through their services. (How did he come up with that number?). But technology will find a way around the gatekeepers. In this new world content takes on a new meaning. Search will let you find it without you having to remember where you put it. Flickr started as your photos on the web, then your photos available to others, then communities forming around them, and finally communities enhancing your photos. Thus search, user-generated content, communities, and personalization is what new media is about.
Q&A: Moshe of Microsoft unintentionally dissed his telco partners by blaming their hunt for control as the reason the US is the most backward DSL country in the world. Reed defended crap long tail content by asking whether blogs have value? There is a market for both mass content and micro-market content. Dan made an impassioned case for why the open world will solve problems such as tying Flickr to Desperate Housewives whereas the control world would never bother to figure it out. He gave an example of a Yahoo user who found a way to tie Yahoo News to Flickr. Tony of Sony reiterated how CA/DRM is an impediment to mix and matching content in the home. Bernd of Stanford wondered whether wireless broadband may arrive before the home wireless problems are solved. Moshe was asked about DRM in MSTV - since MSTV was moving the center of gravity away from the STB to the network, would he support Sony's goal of third-party DRM in the STB? Moshe tried to duck the question by saying MS supported interoperable DRM, but he left the clear implication that he is opposed to third party DRM. No surprise there, same old Microsoft I guess. Too bad. Moshe added that MS is working on a $15 chip about two years out which allows multiple services to a generic STB. Reed explained why that is not the same as having multiple broadband providers, all open. Moshe was pounded with more questions - if the center of gravity is moving into the network, where will it? Seattle? Naw, it will be in the super headend.