On-demand Media

Net neutrality and content aggregators

The FT reports: “Telefónica, France Telecom and Deutsche Telekom all said Google should start paying them for carrying bandwidth-hungry content such as YouTube video over their networks.” It quotes René Obermann, Deutsche Telekom’s chief executive as saying that “there is not a single Google service that is not reliant on network service,” and that “we cannot offer our networks for free.”

Compare this with news publishers’ views on the same enemy and you may get a sense of déjà vu. Take Murdoch: “Search on the internet, whether it be Bing or Google, whatever, it’s free and they simply take all our expensive and we think very good content such as Wall Street Journal ... They are technologically brilliant, they are a long way ahead but they do not have the right to do it if we want to stop them.”

The similarity between the net neutrality and aggregation debates is more than superficial. In both, Google can argue that without it its supposed opponents would make less, not more, money. Specifically:

• In the case of aggregation, inasmuch as it is true that the traffic that Google et al send to newspapers is incremental to what they would get otherwise, Google is good news: more visitors, more page impressions and more ad revenues. See my earlier post on this.
• In the case of net neutrality, without Youtube fewer people would go online, those who do would value their broadband subscription less, and ISPs would have to charge less.

If the last point is not obvious, imagine a world without the internet, and suppose that one day a company called Google comes along and says to telcos:

“We are going to launch a service called Youtube that people will love. This will allow you to sell something called ‘internet access’ to your subscribers. We will drop our content at your doors, and you will have to shoulder the cost of carrying the content from there on to consumers. However, you can charge your subscribers as much as the market will bear.”

Of course telcos would try to negotiate with Google so they can get a cut of what Google makes, in addition to broadband subscription fees. But suppose that on this point Google doesn’t budge, or better, suppose that it is credibly, strategically committed to not paying. ISPs can take it or leave it, nothing else. Would they take it? You bet.

Proponents of net neutrality worry that if telcos are allowed to block websites at will, consumers won’t be able to access the sites of their choice. For smaller sites this may be true (or then it may not be; among economists the jury is still very much out on this). But for large, popular sites, net neutrality seems to be a result of market reality. I can’t imagine any of the operators above deciding to block Youtube, iTunes or Hulu.

In both cases, Google’s opponents are trying to force a negotiation with someone who doesn’t want to negotiate. In both cases, their strategy is lobby politicians and regulators in the name of a public good – in effect, turning a negotiation into a public debate. In the case of aggregation, the good in question is the value of journalism for democracy; in the case of net neutrality, it is the need for a business case for investment in superfast broadband networks (which politicians want on grounds of national competitiveness). And increasingly, the content and ISP sides are talking to each other. The FT again:

“[Telefónica chairman César Alierta] said that if no revenue sharing agreement was possible between the internet search engines led by Google and the network operators, regulators should supervise a settlement.

To increase the pressure on Google, the telecoms groups are interested in finding common cause with content owners such as media companies, which get little or no money from the technology company when it aggregates their content on Google News.”

Note that I’m not taking sides here (I may at another time). Whether you agree or disagree with the arguments being used by Google’s opponents, it’s undeniable that they carry some weight, however self-interested they may be. Ultimately this is a matter of democratic debate.

See also: my primer to net neutrality

Confusing net neutrality

I've just read Cory Doctorow's impassioned new Guardian piece advocating net neutrality. I have a lot of respect for Cory's work at the Electronic Frontier Foundation, but on this I think he is muddling the issues.

Under net neutrality Cory is conflating

• The principle that ISPs should not discriminate against websites on commercial (e.g. anticompetitive) or political grounds,
• The debate about internet censorship by governments, and
• The idea that ISPs should not be allowed to charge their subscribers according to how much they use the internet (metered broadband)

The problem with this kind of position is that it paints net neutrality as a take-it-or-leave-it package, and groups the proponents of each of these causes together in a cyber-libertarian, woolly-lefty category that is an easy target for opponents of any of the three. This makes for an ill-informed and overheated debate.

My point is not that Cory's second and third causes are less important, or that they are less defensible. It is just that their merits and demerits depend on different things:

• In the first case, the arguments are mainly about the importance of the internet economy and consumer rights, versus telcos' legitimate interests and their need for a business case if they are to invest in infrastructure
• In the second, the arguments are about freedom of expression versus (in the more defensible cases) governments' need to enforce laws concerning copyright, hate speech and child abuse
• In the third, the arguments are about encouraging people to use the internet versus ISPs' freedom to define their pricing strategies

Yes there are some overlaps: freedom of expression is part of the first two debates. But as I've argued in my primer on net neutrality, I think the debate on net neutrality should focus on the first group of issues as much as possible. These are far too important for their debate to get stuck on grounds that are largely irrelevant to them. (For an example of similar muddling from the opposite camp, see this).

(And no, I don't want to take a militant position on any of these three debates – not because I'm afraid to reveal my colours, but because my colours are not militant.)

Guardian: Head of Film Council offers olive branch to ISPs over internet piracy

From the Guardian:

[John Woodward, head of the UK Film Council] suggested the content sector "consider the merits of recognising the value of the ISP's pipes that are used to distribute our content," by in effect paying them distribution fees. "Arguably then the ISPs might start to think of the content sector as a customer rather than a nuisance. I am increasingly worried that this Mexican stand-off that we find ourselves in, is not going to get us what we want fast enough and currently this situation is hurting the content industry much, much more than it is hurting the ISPs."

Two comments:

First, this is the clearest illustration I've yet seen of the link between the policy debate about piracy and that about net neutrality. Here the content industry seems to be saying: maybe we can sacrifice net neutrality (start paying ISPs) in exchange for help in policing piracy.

Second, I'm not sure that the "content sector" are the right people for this negotiation. Woodward seems to be suggesting that things work like this (pardon the cheap clip-art):

But in reality they work like this:

That is, Woodward (and other people in the UK content industry) seems to be confusing the web industry with the ISP industry, subsuming them both into a 'pipes' category. But that would ignore a medium whose advertising revenues are larger than newspapers' and are on a par with television's.

True, Woodward's gripe is about pirate peer-to-peer stuff, not legitimate websites. But any scheme involving content people paying ISPs for legitimate content would have to involve website owners. Good luck with that.

Net neutrality and live TV

After three days of talks, chats, drinks and dinners at Jeff Pulver's Video On The Net and  VON conferences I've learned as much as I have in years of reading excellent blogs like Paidcontent, Lostremote and Gigaom, and attending lots of lesser conferences. I'm still digesting it all - it's far too much - and expect to post my thoughts as it all settles in the weeks ahead.

First off, some thoughts on net neutrality and live TV:

Multicast is the white elephant in the room of the net-neutrality debate. The debate is currently focused on treating all packets equally and commoditizing quality-of-service, because these ideas are relevant to the VoIP industry. But, as everyone seems to agree, the big game is television. There multicast is crucial, as it is the only mechanism that can allow anyone to broadcast live to millions of living rooms. (Peer-to-peer streaming may change that, but it's still nascent).

Making multicast a commodity is an entirely different proposition to net-neutrality in the more limited sense of non-discrimination and quality-of-service. Unlike the other two, multicast has neven been sold as a service in the open internet.

Live TV will always be in demand: genres such as sports and breaking news will always command a mass audience.

For as long as the means of distributing live TV remain limited, their operators will play a key role, because live TV is the promotional vehicle par excellence. The more audiences fragment into zillions of on-demand options, the more priceless those few moments of massively shared viewership will become: lots of eyeballs looking at the same thing at the same time, in the same mood.

If all of this is right, then linear, live TV channels will one day only carry live formats and promotions of on-demand, recorded content (and live content will itself also play this role). Recorded content will be available to anyone who wants it, whenever and wherever, and on this carriers will be disintermediated. But, as I've always argued, the key is how desires are formed; and linear TV will continue to play a key role in this for a long time.

On net neutrality

I've been catching up on the net-neutrality debate via the excellent IP Democracy and other blogs. A few thoughts spring to mind.

First, it's worth distinguisuing between two different arguments going on:

• The first one is about content: Net-neutrality advocates fear --not without some justification-- that broadband providers will selectively block access to content and applications whose originators (e.g. Google, Yahoo) free-ride on the their networks--at least from the former's perspective.

• The second is about quality-of-service: here the concern is that providers will selectively allow content from paying originators to flow unimpeded on a 'second-tier' network where quality-of-service (i.e. uninterrupted throughput) is guaranteed, which is crucial for live video.

As I wrote in a post about this a long time ago, the second argument is clearly about television. Put simply, today's internet is not suited to deliver a TV-like video experience straight to consumers' living rooms. Some say that this is a design flaw in the internet's structure; others say that it is just a matter of bandwidth that will disappear over time. Whatever. The fact remains that, today, without quality-of-service you can't have reliable live television over the internet.

The debate gets interesting, of course, where the two arguments intersect. If operators succeed in retaining control over the quality-of-service layer, then they will inevitably also have control over content--at least inasmuch as they will decide who can TV. And there are, of course, a thousand normative reasons (e.g. free speech) why that should be a matter of political concern. I take no position here; both sides are strong. My point is that it is key to understand that the debate is about this, and not about gatekeeping in a more vulgar sense.

Which leads me to my second thought. Much of the debate, on both sides, takes for granted that it is only competition (among access proviers) that can guarantee free access to content and audiences. Perhaps. But let's not forget that the Internet as we know it was not the product of free competition, monopoly, or the market at all: the net was built by a goverment-funded and -directed project (arpanet); and when the network was eventually privatised it was clear that what was changing hands should stay broadly as it was.

Third: it may well be (and for now this can't be more than a conjecture) that the quality-of-service layer has only temporary value. There is a persuasive argument (see this) that as broadband speeds get faster and faster, quality-of-service guarantees will become less and less relevant; this would be a case of a 'good enough' technology eating the lunch of a better (but expensive) alternative--as studied by Clayton Christensen. Some would say that this is not so, because we will always demand more bandwidth: some cite HDTV, or multiple televisions in the house. But the fact remains that television is good enough at 2mbps (or 6mbps for HDTV), and that homes only have a few TV sets each. There is a natural limit to consumers' bandwidth needs.

Fourth: the two-tier Internet has existed for a long time. Just think of CDNs: big sites can pay so that their audiences get their web pages without delay, while poorer operations cannot. Those who think that the Internet is a pure commons where 'every bit is treated equally' need to look more closely.

And finally: there is no such thing as the 'network owners'. There are the backbones (who deal with long-distance traffic and charge in bulk), the broadband wholesalers (who control the networks between the backbones and neighborhoods) and the last-mile access providers (mainly cable and telcos, who own the cables into consumers' homes). In the US, the second and third networks tend to be owned by the same company, but this is not the case everywhere. (This is unrelated to local-loop-unbundling --LLU-- which is about allowing any company to lease the last-mile on a consumer-by-consumer basis).

Now, I think the regulatory argument is different for each of these networks; the closer to consumers the network is, the stronger the case for regulation becomes. The last-mile is a natural oligopoly: you just can't have hundreds of companies digging the streets laying cables. But you can -and do- have lots of companies competing on the long-haul infrastructure, laying out transatlantic cables, shooting satellites into space, etc.

Most of these points have already been made in the fascinating debate that is going on, but it's worth putting them all together.

Googlenet, Internet 2.0 and Internet TV

A few weeks ago I said (following many others before, including Vint Cerf) that the Internet as we know it is not ready for live, standard-definition television. On a related note, Om Malik has recently been speculating that Google may be on the path to building just what is needed: a next-generation, TV-suitable Internet.

Let's explore what's involved in some detail.

The Internet's consumer proposition

Today's Internet (not to be confused with the web, which it enables), more than a network or a protocol, can be seen as an institution: a multitude of contracts between consumers, ISPs, CDNs, wholesale transit providers, and content providers, all of which together manage to provide a simple consumer proposition, which reads:

• If you sign up with a broadband provider you will have unmetered, always-on access to "the Internet".

• Having access to "the internet" means that you can connect to any computer (or "host") in the world that is also connected.

It is these two pillars that form the basis on which all of today's Internet applications are built: the web, FTP, voice-over-IP, instant messaging, etc. While some have claimed that a recent ruling by the FCC puts this at risk, I've argued that this is not so.

The Internet connectivity economy

Things are much more complex for the middlemen.

To allow you to connect to the wider world, ISPs need to purchase "transit" from wholesalers; this can be unmetered or not, but in the end ISPs end up paying for every bit they use.

Wholesalers in turn lease dedicated, high-capacity links to take transmit data between geographically distant points. These links --essentially cables-- could otherwise be used for all sorts of other purposes far outside the Internet.

Because bandwidth is not free, players --ISPs, wholesalers and large content publishers-- try to secure "peering" agreements between each other, whereby they meet at an "exchange" (a physical location where lots of networks meet) and interconnect for free. But to play that game you need to have as much to offer as you have to gain: others will only want to peer with you if they know that their customers want to connect to yours, because only then would they be saving money by not having a transit provider between them and you.

Not all wholesalers are made equal. Some use faster lines than others, some have more redundancy, and some have more connections. Being well connected is important, because otherwise your transit will need to go through many intermediaries (many "hops") before reaching its destination, resulting in a slow user experience.

Finally, because all of this is messy and the resulting user experience somewhat unreliable, some content providers rely on content delivery networks to largely bypass the Internet and deliver their content (web pages, clips and live streams) direct to ISPs, so that content can reach to consumers with almost no "hoops" and minimal delay.

An impressive feat

Complex as the connectivity economy is, collectively it manages to provide a simple consumer proposition: umetered access to any host on the internet.

It is remarkable that such an amount of coordination can be achieved in a decentralised, market-led way. But before we gasp in awe at the invisible hand of capitalism, let us remember how the Internet started: it was not built by the market but rather by the American government, and later by the worldwide academic community. When the private sector was allowed in, the main consumer experiences and expectations (including the web) already existed, and thus the task of building the collective contract was already largely done. Government played a bootstrap role.

Now that the Internet is in place, the fact that it stays that way is not impressive at all: any player whose product failed to enable the central consumer proposition would have a hard time making a profit. This is not to to say that today's coordination is easy; it only to say that it is no more unusual than the institution of marriage, trading or many other cases of collective intentionality.

Back to Internet TV

As I've argued before, today's Internet is not suited to live, standard-quality television, partly because the contracts in place make little provision for sustaining uninterrupted bandwidth between consumers and content providers. (I've also argued that over time this will become less and less important, as overall network quality will make such agreements less necessary. For the time being, however, without the necessary quality-of-service provisions, current Internet contracts cannot deliver a sofa-friendly, live-TV experience.)

Changing this would entail an amount of coordination similar to what was needed to build the Internet in the first place. At the very least it would entail setting up a multicast infrastructure (which is largely a matter of agreements), and adding quality-of-service provisions to all the contracts in the internet industry--a very difficult thing to implement even with the best of wills.

I doubt that the market can deliver this. While such a change would be clearly beneficial to consumers, and arguably to many other players, the fact remains that, for as long as this new Internet is only speculation, for most players it is rational not to invest in it, and for many it is rational to offer similar services (such as IPTV) in a closed, non-Internet basis.

For this to change without goverment intervention, consumers would need to demand something different. But first "something different" would need to exist--an open Inernet 2.0 where live TV could be watched, to which consumers would demand access. This would require content, destinations known and discussed by consumers, consumer habits, etc. Further, there would need to be enough competition among access providers to force all of them to offer access to this new thing.

Is GoogleNet an attempt to address both of these prerequisites at once, within the private sector, using a free proposition to create consumer habits and expectations quickly? The possibility is intriguing. With several billion to spend and Internet creator Vint Cerf on board, if Google can't pull this off then nobody can. But then, for all we know, this might not be what they are trying to do.

Finally, a reading of some of the FCC's recent decisions and statements. As I argued before, I think that while the FCC genuinely accepts that access to the Internet as we know it (Internet 1.0) is a utility, and won't be sympathetic to operators who won't treat it as such, it is (for now) refusing to say the same about the future Internet 2.0. However, its decision to limit competition in the ISP space makes a market-led breakthrough less likely than it was before.

Update (July '06): As the net-neutrality debate heats up, the DPS Projet group proposes to formalise practices like the ones I listed above through legislation that would define such institutions as

Internet.- The term "Internet" means the worldwide, publicly accessible system of interconnected computer networks that transmit data by packet switching using the standard Internet Protocol (IP)

Internet access.- The term "Internet access" means a service that enables users to transmit and receive transmissions of data using the Internet protocol in a manner that is agnostic to the nature, source or destination of the transmission of any packet. Such IP transmissions may include information, text, sounds, images and other content such as messaging and electronic mail.

Video-on-demand: an overview of the industry

Video-on-demand is a hot topic. Every week there are new announcements, products, companies and articles. In this and later posts I will make some comments on this emerging industry, or rather this family of industries.

Because the field is large and there is so much being said, it will be helpful if I start by charting the terrain.

A first distinction:

There are two industry trends:

• The first is IPTV. Although initially this term had a less clear meaning, by now the industry has come to understand it in a specific way: IPTV (or Internet Protocol Television) is a way for phone companies to deliver video on demand.
  
  Technology: The protocol used is IP over residential broadband links (usually DSL), but the networks used are all proprietary--the open internet is not used at all. Video is streamed from a server in the operator's premises onto a set-top-box (provided by the operator) in the consumer's residence. The bandwidth needed is of the order of 2mbps (for standard-definition TV), which is quickly becoming standard. Users can choose between receiving live streams (these work like traditional channels) or selecting content on-demand from a library hosted by the operator.
  
  Content can be whatever operators can negotiate rights for. Typically this is a combination of broadcast channels, on-demand movies (including blockbusters) and on-demand recorded television.
  
  Strategically, this is about broadband providers avoiding commoditization--they want to avoid becoming "dumb pipes." In many cases, this is specifically about telcos trying to stop churn to cable MSOs who can offer the "triple play" of broadband, phone and television.
  
  The main advantages, from the consumer's point of view, are (i) on-demand content and (ii) narrowcasting and long-tail content. About the second point: there is no limit to the number of channels and on-demand content a IPTV provider can offer. To grow its on-demand library, all a provider needs to do (apart from securing rights) is add more storage to its servers, which is cheap and becoming cheaper. Adding more live channels is more complicated, but there is no limit to the number that can be added. Leaving rights aside, there is no hard reason why a provider couldn't offer every single local, network and cable channel in the US. A viewer in New York could watch a local community channel from Alabama.
  
  Examples include SBC, Comcast, HomeChoice and Fastweb
  
  The technology suppliers are a combination of the old interactive TV industry (Thomson, Alcatel, Tansberg, Espial, Scientific Atlanta, OpenTV, etc), some new players (Seachange, Kassena), and some who are new to television (Microsoft TV, computer network manufacturers).
  
  Note: Above I said IPTV is about phone companies, but there is an exception to this. In some countries, ISPs other than phone companies are allowed to offer broadband service over (the phone companies') phone lines. However, this on its own is usually not enough for IPTV. Television's quality-of-service requirements usually mean that IPTV providers need to deploy advanced networks up to the local exchange--as opposed to just buying access to someone else's standard IP network--an arrangement known as Local Loop Unbundling (LLU). In the UK, Homechoice uses LLU to deliver IPTV over BT' s phone lines.
  

• Internet TV, or 'streaming', refers to everything else. Rather than a definite industry, this is a broad family of trends whose common factor is that they don't rely on control over the last mile. Content is delivered over the open Internet, and all that is needed from broadband providers are fast, reliable dumb pipes.
  
  I will write about Internet TV at length in a later post. For now, let me just say that the main trends are webcasting (like AOL), web-based operators (like Cinema Now), application-based services (like Open Media Network), and set-top-box services (like Akimbo).

For more on this distinction, read this, this and this. Never mind that, strictly speaking, 'streaming' coould be said to apply to either IPTV or the internet; or that 'IPTV' until recently was understood to mean something broader than what I've outlined here. My point is that the distinction is an objective one no matter what terms we use to designate the two trends; and that in the last few months these terms have become common industry parlance to refer to them.

IPTV's advantages

For now I will concentrate on what can be said about IPTV vis-a-vis Internet TV without specifying the latter further. My first point is about IPTV's strengths over Internet TV. These are:

• Technical feasibility: Delivering live, TV-quality digital video requires bandwidth of around 1.5mbps all the way between the video provider and the consumer. Although many non-IPTV broadband ISPs already offer this sort of throughput, this is not enough to guarantee a high-speed link all the way between a consumer and a provider that may even be in a different country.

• Broadband quality-of-service (QoS): Even if the problem above disappears (i.e. even if a consumer can establish a 1.5mbps connection all the say to a video provider who is not the local ISP), there is no guarantee that this connection will be kept at this speed for any length of time. A significant drop lasting more than ten seconds is enough to ruin a TV-watching experience.
  

• Coherent service: IPTV is a packaged, high-end service. Consumers sign a contract, a technician installs the set-top-box and leaves a manual, and there is s customer service phone number. Users don't need to understand anything about the web, the internet, IP, or anything. To most consumers, IPTV is just cable on steriods. To a large extent, IPTV is just a new way to deliver plain-old TV.

• Technical superiority in delivery: No matter how fast and reliable dumb pipes become, IPTV operators, because they control the last mile, will always be able to offer something extra. By the time Internet TV manages to deliver standard-quality TV, IPTV will be delivering High-Definition TV.

• Content: Partly because they have the organisational weight, and partly because they can guarantee secure delivery of content (thus avoiding piracy), IPTV operators have been able to negotiate content deals with Hollywood studios that allow them to offer libraries that surpass any local Blockbuster in both breadth and quality.

• The sofa: IPTV is all about set-top-boxes, TV sets, remote controls. In other words, it's about the TV experience, sitting in a sofa, having a drink while socialising, not worrying about technology. On the other hand, Internet TV is experienced on a computer and is ergonomically unfriendly to shared (e.g. family) viewing.

• IPTV is here and it works, while Internet TV is still a clunky work-in-progress. As far as the user experience is concerned, even the best webcast or video-download examples can't quite compete with IPTV--at least not yet. Before it can be a viable alternative to IPTV, Internet TV will need to overcome all of the hurdles above. It will be at least three years before this happens, if it happens at all.

IPTV's weaknesses

But if these are all of IPTV's strengths, then the question of its vulnerability suggests itself plainly:

• It may be just a matter of time before the question of technical feasibility becomes irrelevant. As 2mbps broadband becomes standard and internet transit cheaper, securing long-distance fast connections will become commonplace.

• Quality of Service is a trickier point. While it may not be in the interests of IPTV-offering broadband operators to provide fast dumb pipes with enough quality-of-service for television, it is not at all clear that this won't be forced through regulation. The question is whether Powell's "four freedoms" apply to QoS--which remains to be seen. Even leaving regulation aside, if an Internet TV industry flourishes thanks to "dumb pipe" operators, IPTV consumers may end up feeling locked-in and missing out--which may force IPTV operators to provide cheap internet QoS to avoid churn. This is particularly applicable to countries with local loop unbundling, where there will always be broadband providers willing to offer fast, reliable dumb pipes with generous access to the open internet.

• There is no reason Internet TV can't offer a coherent service--witness Akimbo. Other propositions still need time to develop, but there's no inherent reason why this shouldn't be achievable.

• As digital-rights-management (DRM) technologies take hold and gain credibility in the content industry, the internet will stop being seen as an insecure delivery medium

• As products like Akimbo and others gain popularity, the Internet TV will move into the living room

My take: disruption

In the long-run, IPTV operators are vulnerable to Internet TV. Their only enduring advantage is their ability to outperform Internet TV in bandwidth and reliability because of their control over the last mile. By the time Internet TV can deliver standard TV, IPTV will deliver High-Definition TV. By the time Internet TV can deliver HDTV, IPTV will be on to something else.

But is this a solid enough advantage? If Internet TV does take off and reach critical mass (and this is a big "if"), IPTV's potential customers would have a low-cost, "good enough" alternative. IPTV would be relegated to a high-end market--definitely an attractive one, but a smaller one than that predicted by today's (already modest) estimates. As Jeff Pulver has recently pointed out, this would be a classic case of a disruptive technology depleting an incumbent high-end industry, as theorised by Clayton Christensen.

To elaborate on this point: many of the characteristics of disruptive technologies that Christensen outlines in his book can already be observed. IPTV is a high-margin industry; its values are those of the broadcasting, cable and telephone industries from which it stems; its quality standards are high; and its executives dismiss Internet TV as a marginal trend. Internet TV, on the other hand, shares its values with the web, where the mortality rate is high and and profit a rarity. As to the "good enough" curve, the critical point is not far away: bandwidth is nearly there, but the user experience needs work.

What does this mean for IPTV operators?

First, IPTV has a three-to-five year window to establish itself in consumers' minds before Internet TV emerges as a serious alternative. IPTV operators should use this time productively by signing up as many content deals as possible.

Second, in the long run it may be sensible for IPTV operators to spin off their physical networks as "dumb pipe" operations and concentrate on TV content as "free-riding" operators, available through any broadband provider (somewhat like AOL has been doing recently). By this time they will have considerable know-how, technology and content to build compelling services even in an open world. But it is not clear that the parts will be worth more than the sum is worth today.

Update 16/09/05: I've changed my view on this somewhat. I now think that Internet TV (as opposed to IPTV) still has a considerable way to go (more than I thought) before it can offer live television. I still hold the views above with respect to recorded content. I've written about this in a later post.

Update 18/10/05: From a Friedman Billings Ramsey report: "While many cable investors fear the telecom service provider entry into video services, we believe that the real long-term threat will come from Internet-based content aggregators." And: "We anticipate a drastic change over the coming years in the way that video-based media is created, aggregated, distributed and consumed."