We design solutions to problems every day. These problems can be pretty sticky, and they can seem insurmountable. But we usually find crafty ways to solve the issues at hand and move on.
One 'insurmountable' issue that we keep getting prompted about is local access. See, we're big fans of consumer electronics providing serious competition against the service providers -- so much so, we that think telcos should benchmark themselves against Sony and Apple and Samsung, not Time Warner, Cox, Cablevision, and other cable companies.
But every time we go into the "The CE players will eat the telcos' lunch" spiel, we get hammered on the access question. "They will have to pay the telcos to get to the customers, or the customers will have to pay -- which will stifle this competitive threat in no time flat." Well, maybe so, but that assumes a lot -- it assumes that the only way to get to a customer is via the traditional access channel. We're not so sure on that point. In fact, we can think of a number of ways to get around that problem, if you want to be creative enough.
So in the spirit of brainstorming options, who's to say that one of these won't play out in the local loop to keep the telcos and cablecos honest?
The traveling hard drive: We all know wireless can transfer a lot of data fairly quickly. The latest standards are promising lots of bandwidth when you are near an access point. So suppose we started treating out cars as mobile sync engines. Stick a Wi-Fi accessible hard drive in the dashboard or trunk, and not only allow it to serve content to your car, but also to carry content from point A to point B. Suppose your grocery store were an information off-ramp. Suppose NetFlix set up a deal with Hannaford or Big Y or Super Stop and Shop. When your car is in the parking lot, it gets filled up with movies. When you arrive at home, these movies are transferred to a local hard disk in the set top box. No access fees, no active work on anyone's part, no weird technologies -- just making the solution map to the way people live. The single biggest threat to the telco IPTV business plans, in our minds, is the plummeting cost of hard disk space -- it's becoming cheaper and easier to give someone all the content they could ever want on one hard disk. The first terabyte hard dives are coming out now and it's only a matter of time before they are really economical for CE plays.
Sent from above: Satellite has great coverage areas, but it's been largely pushing linear content to the masses. Suppose some were reconfigured to merely stream content meant to be stored instead -- sort of a direct-to-TiVo approach. Heck we know they can stream a movie in two hours, sending a compressed movie optimized for file transfer can take less time. But if you think this is unlikely, what about simply putting a blimp or HALO aircraft up there. We've become intrigued about the potentials here ever since we did a high level study for someone bidding on the air-to-ground licenses on the feasibility of covering aircraft from above the aircraft, sort of air-to-air if you will. These approaches are coming down in price and getting more feasible -- it's just a matter of time until someone finds just the right use for them.
Over-the-air everywhere: Disney was on to something when it started streaming movies to the desktop using spare terrestrial airwaves with its MovieBeam service. While MovieBeam has had some well documented issues, the concept of using spare TV transmission capacity to send content makes a lot of sense. IBlast is a venture built on this concept -- a nationwide digital distribution network that uses the powerful transmitters of local TV stations to broadcast rich media content directly to home computers, digital set top boxes, and other receiving devices. Digital media such as movies, movie trailers, games, music and software are broadcast wirelessly to PCs, TV set-top boxes, and other receiving devices such as personal video recorders, game consoles, and MP3 players.
Flash in a pan: Flash memory is making massive strides. Prices are dropping 40 percent a year; capacity is improving faster than that. You can get flash memory USB drive in capacities up to 16 Gigabytes today. So suppose every ATM were also a flash memory card filling station? Put in your ATM card, authenticate, attach your flash, download, leave. Simply not a big deal if the value proposition is attractive enough.
Are these the definitive ways to compete against telco or cableco based offerings? Not necessarily -- there are issues with the above ideas for sure, in many instances. However, for some applications they could be great. What's more they provide downward pricing pressure on the service provider offerings, keeping them honest, (or reasonably honest as the case may be). The bigger message here is that there's always another way if you think hard enough about it. And if you can't, call us and we'll think of something.