A Wolf In Sheep’s Clothing

There has been a long-running narrative in tech writing about the downfall of, or the necessity to bring about the downfall of, cable companies. Recently, I was discussing the merits and drawbacks of cable with a friend of mine, and ended up at an interesting predicament. We agreed that cable was expensive, yes; we also agreed that people who subscribed to the services that companies like Comcast provide walk a thin line between freedom (otherwise known as net neutrality) and tight, restrictive control; but, we ended up agreeing that, based on what we’re getting from the “evil empire” of Comcast, it’s not a bad deal.

The discussion started with HBO Go, a service that HBO provides its customers that allow them to stream HBO programming on demand to a large number of connected devices. It’s a great way for members of the same household to watch their favorite shows and movies without having to fight over the TV. The downside is that HBO Go is not purchased as a standalone service, it’s a part of HBO. While that seems ridiculous, someone recently asked me how much I’d be willing to pay for HBO service if it meant I could watch the shows anywhere. Considering what I was paying for Netflix and Hulu, I said I’d probably be ok with paying $8–10 a month. When I got home, I checked the price of HBO, and, to my surprise, it was only $10 a month (I was assuming that it would be much higher, since it’s a premium cable channel, and cable is controlled by “evil” media companies). It was then that I considered what I was getting for my monthly offering at the Altar of Comcast.

For my monthly fee, I get a whole heaping pantload of data, combined with a paltry offering of standard-definition TV channels. The most common narrative I hear is that people feel like they’re bullied into paying for channels they don’t need in order to get the ones they want. “Just let me pay for the channels I want!” everyone seems to say. And I agree with them! Why should someone be charged for something they don’t use and didn’t really ask for? After all, when you walk into a store and pick out the items you want, the store clerk doesn’t start shoveling unwanted merchandise into your basket. The same should go for programming and media, right?

Well, we’re actually a lot closer than we think, in my opinion. In addition to the base fee for my cable, I pay $8 per month each for Netflix and Hulu, which allows me to access a great deal of TV programming and movies for just under $20/month. I can add HBO to my cable package and get HBO go for “free” on my iPad and Apple TV, which accesses the content through…the same cable connection that I’m already paying for. So it’s…not really free, is it? In fact, it’s almost like I’m being charged double…and yes, that’s frustrating. But the same parallel can be drawn with merchandise. Sometimes you don’t want the “free” stuff that gets bundled with your popcorn, or the tchotchke that is shrink-wrapped your deodorant. In this case, I think of the stuff I don’t use as “bonus” features.

The structure I painted above makes sense when you look at it vis-à-vis the type of relationship that most people have with their cell phone carriers. Really, it’s very much the same – a person pays a monthly fee to be able to use that carrier’s network and pipe data to their device, the amount of which is allowed each month varying by user. Any other dues and subscriptions that the person pays are completely separate from the carrier. To carry the analogy even further, look at what’s happened to the precious airtime minutes and text messaging packages – they’ve all been ditched so that carriers can charge users for what they’re really hungry for: data. The airtime minutes and texting is almost a throw-in now.

The example of the carriers, however, should also serve as a cautionary tale. While most people are used to the fee structure now, there was a time when tiered data plans were met with hatred and anger because people realized they were being taken advantage of. Then, when the mighty marketing machines that drive these carriers went to work convincing people that they would save some money every month if they forfeit their right to an unlimited amount of data, people caved left and right…and they did this just as streaming media was entering the spotlight. It was the perfect one-two blow to the American consumer.

Now, the fear is that terrestrial data providers will repeat the same behavior that their wireless brethren got away with. That they’ll introduce tiered data plans, bandwidth caps, and heavy throttling to ensure that they can strangle every last nickel out of the American populace. This all assumes, of course, that net neutrality laws remain in place. While net neutrality laws are supposed to protect the Internet and the free flow of information around the globe, I have a feeling that terrestrial data providers will use net neutrality against consumers, making the argument that they can provide open pipes so long as consumers pay for the privilege.

At any rate, the current situation of à la carte channels and pricing is almost kinda not-really-but-sorta here…if you know where to look.


Back and Forth

For a while now, I’ve been using an app called Audiogalaxy to get back to my music library at home and essentially have access to my library with over 100 gigs of music to supplement whatever tracks I have synced to my iPhone/iPad. It’s fantastic, mostly because I know two things:

  1. I have music on my iPhone that I can listen to anywhere, regardless of whether I have a data connection or not.
  2. I can, with a data connection, get access to my huge music library.

The recently-uncovered Apple patent application is simultaneously awesome and horrific for a few reasons, all of which have to do with #2.

One of the most explosive and formative things to happen to America recently is the widespread adoption of mobile data and internet usage. As I’ve discussed before, the mobile telecom providers have used this to push their agendas and create an awful dystopian future that the American wireless subscriber is going to end up paying dearly for. It’s going to be ugly, folks. Get ready for a future based on as-yet-unwritten disgusting rates based on AT&T’s greed.

If you think this reaction is a bit overblown, let’s dissect the groundwork that needs to be in place for a person to listen to music with Apple’s new system. A person would need:

  1. A computer running iTunes (for syncing purposes). This is pretty much standard, and shouldn’t come as a surprise to anyone.
  2. An iOS device with a data connection. Not everyone wants to or can run a persistent data connection. iPod touch devices are reliant on wifi, and people with the lower-tier AT&T or Verizon data plan (250 MB for $15.00/month, in AT&T’s case) may not be comfortable with a service that sucks up data every time they wan to listen to a song.
  3. Possibly: the above computer with a persistent connection to the internet. This is a variable, and the future is hazy here. Depending on how the whole “Music Locker” thing will work, or how MacOS Lion home server is structured, this may or may not be necessary. We’ll see.

Let’s assume that a person has an iPhone, is using AT&T, and is using the $15.00/month data plan for 250 MB of data per month. We don’t know how much of each song will be synced to the iOS device, but let’s assume it’s about 30% of each song to allow ample buffering time. We can then “fit” three times the number of songs on the iOS device due to the reduced footprint of each song on the device’s memory. The remaining amount of each song would then be pulled from a cloud. I say “a” cloud because it’s unclear if that cloud will be the individual’s computer or this “Music Locker” service. Let’s assume it will be from this person’s computer, so as not to incur any additional fees (yet). The computer will have to be on in order to access the library data, which means an extra power demand and a load on the person’s internet usage (we’re also assuming that internet usage is capped, which, despite some companies claiming their data is “unlimited,” is most likely the case). Most likely, the data usage through a home internet connection is insignificant (especially relative to a theoretical cap of 50-250 GB). The proposed data usage relative to mobile internet connection with a 250 MB cap is significant, however, and listening to a day’s worth of music can potentially eat up all of a person’s monthly data before they have to pony up another $25.00 for the higher 2 GB plan.

Did you catch that? Let’s look at it again.

The folks who want to use this feature will be streaming data every single time they listen to music. The amount of data that will be used is unclear, but I predict that listening to music for a prolonged period of time (even a few hours a day) will cut deeply into or completely use up a person’s data for the month (again, assuming usage of a cheaper $15.00/month, 250 MB plan). Even on a 2 GB plan, monthly data usage can quickly skyrocket, shooting people dangerously close to the ceiling or their plan. I use about 1.5 GB/month right now with occasional usage of my Audiogalaxy service to get at my home library. If I were to switch over to a model that used data every single time I played a song, I’d find myself breaking that 2 GB barrier on a monthly basis, which would cost me more money.

AT&T and Verizon made a long-term move here, and we’re staring it in the face right now. Back when AT&T first introduced tiered data pricing, I could see the act as predatory. More and more services are being pushed online, to the cloud, and so forth. What AT&T did was squeeze the pipes before the water started flowing. Netflix is growing in popularity and capability, and their long-term dominance in the mobile media marketplace (I love alliteration!), while not guaranteed, is just shy of that. How are we going to watch movies on our mobile devices if we’re being pinched to do so? How will companies innovate if they know they’re going to be dealing with hamstrung devices? People are going to be paying for subscription services and the bandwidth it takes to use them, a double whammy. The outlook doesn’t look good.

Boy am I glad I got that unlimited Clear iSpot subscription while it was still around.

This is the End

YouTube – Live.

Cutting the cord is now becoming a reality.  Netflix is producing a TV show, YouTube is going live, and what do you want to bet that Hulu follows suit within the next two months?  This trend is not going away, and the corporate maniacs who think that they can control how and when people get access to the media they want to watch or listen to are wrong.

They know it, they can’t fight it, but they will.  In the process, they’ll cause damage to the infrastructure that is actually supporting them right now because of their greed.  They don’t want to actually provide interesting things for people to watch or read, they just want to wrap it in an iron cage so people have to pay through the nose to get it, just like the diamond industry.