Cox’s Video “On Demand”— Cable’s IPTV

This week Cox peppered the mailboxes of local subscribers with the announcement of its new “On Demand” service. This is Cox’s version of an IP-based video networking service. It allows you to buy, or in some cases stream for free, online videos and movies without waiting for the item to come up in A time slot. Also included is the ability to pause, rewind, and fast forward. It is a walled-garden variant of the internet video that is an increasingly large share of the open internet’s usage.

No less than Microsoft’s Bill Gates recently said that he thinks that Internet Television is the coming thing:

In the years ahead, more and more viewers will hanker after the flexibility offered by online video and abandon conventional broadcast television, with its fixed program slots and advertisements that interrupt shows…

(Ironically, Microsoft’s major effort in the direction of IP video has been to supply the software that allows the phone companies to eliminate theses advantages and make their IP product mimic conventional cable offerings disadvantages.)

Things are changing so fast in this area that it is hard to figure out just who is playing and what they are offering that is different from their competitors. A partial list would have to include YouTube and its copycats, Netflix’s innovative variant, iTunes, legal download services, gray P2P download agents like LimeWire, and the phone companies’ “we are just like standard cable (not legally though!) version–like AT&T’s U-verse which is not available in places like Lafayette. Some are ad-supported. Some are subscription models. Others are a purchase–temporary or not. Some let you watch as the video downloads. Among other interesting innovations Netflix’s subscription model doesn’t worry about any unit but time. Watch bits of 4o films for 120 minutes or watch one 2 hour movie–its all the same to Netflix.

I’ve touted what I call DV (Downloadable Video) as the final resting place of all such turmoil. For my money we’re headed for a place where consumers have total control and all intermediaries–such as cable companies and various distribution networks get themselves “disintermediated”–that is, cut out of loop when people buy their video content direct from the source and download it over the net. Ad-supported streaming will likely find a stable place in the mix, I’d guess. This will be a good thing…

And it will be a good thing for the long-term stability of LUS’ eagerly awaited fiber-optic network. Bandwidth will be king and LUS will have bandwidth to burn and will be in a position to set the price in the local market.

With the deployment of “On Demand” services (no “Acadiana” link yet) in Baton Rouge and Lafayette this month (its been available in larger cities for a year or two according to the Baton Rouge Business Report) Cox serves notice that it intends to compete in this potentially bandwidth-demanding arena. The On Demand service is interesting and, I think, valuable to Cox customers. It should build an appetite for more flexible television viewing. What Cox has to hope is that it can stop that appetite from growing into the demand for the real thing: the absolutely unconstrained “on demand” world of the internet and DV. Cox falls short of the real thing in that it is presenting you with a classic “walled garden” (also) in which Cox decides what your choices are–and it only chooses those things which lend it visible profit. AOL’s experience with limiting the content available on the internet in a bid to profitably control its subscribers has shown that to be a doubtful strategy in the long haul. As long as consumers experience this new service as an improvement over regular cable TV (and it is) and not as constraint on their choice (which it also is) they will likely be happy with the new service.

There’s plenty to be happy with: You can watch the shows offered whenever you want. That’s probably “good thing” one through five. You can also pause, rewind, and fast forward. You are essentially accessing an online DVR. Rewinding is pretty addictive too. TiVo users and other DVR users have learned that you can rewind to find out what a character actually muttered at a crucial moment or settle arguments over what happened in the background of a shot. If you’ve never had the capacity before it may sound minor–but if you’ve grown used to it at home you’ll find it hard to tolerate TV’s that are “broken.” There are some awkward pauses in the process; after all you are communicating with an upstream server, not a local device. And the interface–well the delay is emphasized by a screen design that requires multiple directional clicks to accomplish the simplest navigational task. (Lovers of TiVo’s slick interface will find themselves continuously irritated.)

But the awkwardly implemented online DVR is still an online DVR–a good thing compared to standard cable.

If you’ve got Cox you can navigate to channel one and play around using your Cox remote. You really should try it–I have to say I think you will find it intriguing and useful.

Best of all the DVR is chock full of pretty good or at least intriguing stuff. It’s a place where Cox is trying all the models for making a buck. There are subscription sections, ad-supported free bits, and pay per view models. There are all sorts of content from YouTubish video to online personals, to movies, to exercise videos, to episodes of some series, to…you get the drift. A little of everything that could possibly be sold.

There is a largish “free zone” which covers a hodgepodge of short content and current episodes from some of the non-premium channels like Nickolodean and the Cartoon Network. Some of it looks to compete with YouTube. Some of it is preceded by an ad. (Incidentally, nobody has bothered to change the interface on this “free” section. You have to “buy now” a $0.00 cost item. Ignore the mess and realize that providing anything for free is not a part of the way the system designers think.)

Of course you can rent movies–fairly recent ones are included and they appear to be available for 24 hours after purchase. (You’ll notice that you’ll have fewer “channels” of pay-per-view movies. Apparently that was where at least some of the bandwidth to run this service came from.)

If you subscribe to a premium movie channel it looks like you can watch at least some of the current set of movies through this service at no additional charge. That could be very convenient, especially if you don’t already own or rent a DVR. (If so you should definitely try it out for a taste of what the DVR noise is all about.)

Don’t miss at least the idea behind the anime “channel.” There you can download episodes from some of Japan’s most popular animation series. You have to subscribe to the channel just like it was a premium channel. But the anime channel is never available on the regular cable lineup. It’s easy to see the potential here to serve small but passionate audiences. Surely there is a group that would eagerly pay to see an international soccer channel or an all-cycling channel. Or a dozen other passions. If you’ve got the bandwidth to serve it this could be a way to catch a lot of people a few at a time.

But bandwidth is the issue around which this all revolves. I’ve tinkered with the service this morning and I’ve been unable to get in twice (Network Unavailable) and stopped 4 or 5 times (Network Busy 01 and 03). Sometimes the stop matures into a full-scale failure as you get timed-out off the service and thrown back into regular cable. No doubt Cox is trying to work the kinks out. The network will improve. But I assume that they thought they had it under control before the mail advertisements were sent out. No doubt what is happening today is due to the load on their servers–or on local bandwidth constraints in my neighborhood–being more than they anticipated. People are trying it out–and the system is not responding well. The more popular this service proves the more bandwidth they will have to feed it. Cox has already had to cannibalize the Pay-Per-View area. Were I their engineers I’d worry that the designers and marketers would be too successful–that people with HBO and Cinemax would start choosing to watch more of those movies simply because they are now easier to fit into the public’s schedule–and that they’d watch all of them on the bandwidth-devouring “On Demand” portion of my network. (Local users will recall that when Cox brought in VOIP many users complained that their internet connections slowed way down. I’d be interesting to hear from any users that have noticed slow-downs in their net connections over the last month as Cox brought this network on line–and any slowdowns you notice as people begin to use it. The bandwidth has to come from somewhere and the temptation to occasionally steal a bit off the “unused” portion of already IP-ready bandwidth used to supply net users would be strong. After all you are only guaranteed “up to” your bandwidth.)

All in all “On Demand” is a good thing for local consumers’ quality of life and something that will both drive bandwidth demands upward and give people a taste for how things could be if we had enough bandwidth to go the full route, get out of Cox’s walled garden, and download any video we desired to our TV, mobile, or laptop. The final act will be fiber to the home. That day is coming.