Mark Cuban has a loooong post (more like an opus) about why HDTV will kill off SDTV and what he feels the post-apocalypse broadcasting landscape will look like. It’s a long read but worth it.
There are some valid points about why HDTV will rapidly take over SDTV, and some really interesting observations on how this will depreciate the value of some networks and some content libraries. Itâ€™s unfortunate that Cuban misses the fact that it may be HD IPTV delivery itself that is the catalyst for more widespread consumer fiber deployment in the US.
Consumers are going HD. HDTV will replace analog TV as surely as DVDs replaced VCRs. Those consumers will demand HD programming. The distributor that can provide it, will get their business. That competition will push networks to go HD, but for a variety of reasons, not all can or will, which means there will be fewer networks competing for viewers and some of those networks will be â€œAM bandâ€, reducing the competition for viewers and advertisers even more.
We agree! Once a consumer sees high def, standard def just won’t do. My favorite analogy took place in 1990, when a friend upgraded our BBS from 2400 to 14.4kbaud (Thank you US Robotics and the Sysop discount plan!). I was skeptical of the benefits the added cost would bring, but within literally hours the user base exploded. You may be familiar with these effects too- once you use DSL, you just can’t tolerate dial up. We think HD will go the same way, particularly since Wal-Mart sells these TVs now, and not just the home theater store.
If you go through the schedules of many cable networks, some are made up completely or substantially of shows shot or mastered on tape. The networks that are full of music videos from the past 20 years. Networks with comedies from the 1980s and 90s. Science Fiction created for syndicated TV (Most primetime scifi was shot on Film and then HD). There is nothing their owners or licensors can do to make them look good in HD. I dont think they will even try. Which in turn means we are going to see some of those cable networks that are dependent on these shows just disappear.
While I don’t think MTV is going to disappear, it is very probable that consumer expectations for HD are going to depreciate the value of some content libraries more than currently anticipated. This is an effect we never considered, and think is a pretty neat observation. In general we think that content owners stand to benefit magnificently with the coming “Any movie, any time” age that will uncouple them from the near-zero value add cable broadcast model. The importance of HD means that providers with libraries of HD content are going to command a premium.
Cuban also makes some points we don’t agree with-
The impact of the internet on inhome viewing will diminish until bandwidth to the home can increase by the same 4x or 5x that HD programming bandwidth increased. I dont see that happening for a long time.
It is precisely this demand for HD IPTV that will drive increases in broadband speeds, primarily through deeper fiber deployment. Mark is viewing the bandwidth to the home as a zero-sum game, when in reality it will be consumer demand for HD that forces providers to upgrade.
FM. No static at all.