Speaker 1: With technology with tech Stuff from how stuff works dot com.
Speaker 1: Hey there, and welcome to tech Stuff. I am your host,
Speaker 1: Jonathan Strickland. I'm an executive producer at how Stuff Works
Speaker 1: and I love all things tech. And today we're gonna
Speaker 1: talk a bit about the evolution of how we get
Speaker 1: television content. Now, I've already done episodes specifically about the
Speaker 1: early days of television and the birth of cable, but
Speaker 1: today we're going to take a step back and look
Speaker 1: at general trends and how they've changed over the decades.
Speaker 1: So kind of how we went from broadcast to cable
Speaker 1: and satellite to internet delivered television, And what are the
Speaker 1: various not just technological challenges, but the legal challenges that
Speaker 1: exist in this world, the business challenges, And why is
Speaker 1: it that you can't just have alah cart I know
Speaker 1: that's the dream for everybody about getting a package where
Speaker 1: you have just the channels you want and none of
Speaker 1: the ones you don't want, because it seems like every
Speaker 1: service out there it comes with a bundle, right, and
Speaker 1: you have channels that you might really like, and there
Speaker 1: might be a few channels that you really like, but
Speaker 1: they're not included in that bundle, And then there's a
Speaker 1: whole bucket load of channels that have stuff that you
Speaker 1: either have no interest in or you would actively avoid
Speaker 1: with every fiber of your being. You would never even
Speaker 1: dream of just channel surfing because it would mean going
Speaker 1: through too many channels of stuff what you do not want.
Speaker 1: So we're gonna take a look at why that is,
Speaker 1: Why are we in that world? And it's not just
Speaker 1: about finding new ways to watch the latest episode of
Speaker 1: Supernatural though those when Chester Boys are indeed dreamy. The
Speaker 1: changes affect other important factors as well, like how is
Speaker 1: television monetized and how do we as consumers pay for
Speaker 1: that television. Now, for this episode, I'm largely focusing on
Speaker 1: the United States as the model, which is because I
Speaker 1: live there. I'm I live in the United States. A
Speaker 1: lot of what I'll talk about also pertains to other nations,
Speaker 1: but there are particulars that will be different. So, for example,
Speaker 1: in the United Kingdom, any place that has a television
Speaker 1: that is either being used to watch television live or
Speaker 1: to record TV transmissions, no matter how those transmissions are sent,
Speaker 1: whether it's over broadcast, cable, satellite, whatever, you gotta pay
Speaker 1: a television licensing fee. I mean like individual households pay
Speaker 1: a license fee for their TVs. Now, for those folks
Speaker 1: over in the UK, you're all listening to this and
Speaker 1: you're saying, well, yeah, that's true. But here in the
Speaker 1: United States that would be really unheard of. So Americans,
Speaker 1: if you head over to the UK and you decide, hey,
Speaker 1: I'm going to live here, now, you would actually need
Speaker 1: to purchase a television license to watch your own TV
Speaker 1: in your own home. But then in the UK, the
Speaker 1: British Broadcasting Company uses those license fees to fund their work.
Speaker 1: So without the TV license you lose your precious doctor who,
Speaker 1: So just keep that in mind. But that's an aside.
Speaker 1: I want to talk about the evolution from broadcast TV
Speaker 1: to cable and satellite, to time shifting technologies, to internet
Speaker 1: delivery and place shifting options as well. Now, later in
Speaker 1: this episode, we're gonna have a discussion with Jim shade
Speaker 1: Chatari of Sling TV to talk about how their approach
Speaker 1: is guiding us closer to that heavily desired a la
Speaker 1: carte strategy for getting television content, So that will come
Speaker 1: up a little bit later in this episode. Now, broadcast
Speaker 1: television starts before anyone outside of research and development labs
Speaker 1: or enterprising inventors even had a TV set. Generally, most
Speaker 1: scholars agree that General Electric created the first broadcast station
Speaker 1: in January. Originally, they broadcasted under the channel designation to
Speaker 1: x B using a seven killer hurts frequency. Now, their
Speaker 1: broadcast was for mechanical television, not not electronic television. It's
Speaker 1: not the televisions that we know today, but the predecessors,
Speaker 1: the mechanical models that actually did use mechanical elements to
Speaker 1: transmit pictures. And if that just blew your mind, you
Speaker 1: need to go back and listen to my podcasts called
Speaker 1: The TV Story. It was actually a three part series.
Speaker 1: So there's TV Story Story Part one, Part two, and
Speaker 1: Part four. Because you know we always skip part three. No,
Speaker 1: that's a lie. There's also part three. The first two
Speaker 1: parts really focus on the invention and development of television.
Speaker 1: The first part came out on April and the second
Speaker 1: part came out on April, So check those out if
Speaker 1: you want to hear more about the development on the
Speaker 1: television set side, but let's focus more on just the
Speaker 1: concept of broadcasting. In September nine, General Electric behind to
Speaker 1: broadcast the first television drama on their station, which at
Speaker 1: that point was called W two x B. The actual
Speaker 1: drama's name was The Queen's Messenger, and it was described
Speaker 1: as a quote blood and thunder, play with guns, daggers
Speaker 1: and poison end quote. And that I actually pulled from
Speaker 1: a website for the Early Television Museum. So great website
Speaker 1: if you want to learn more about some of the
Speaker 1: earliest forms of TV and broadcast. And frankly, that description
Speaker 1: makes it sound like The Queen's Messenger was a precursor
Speaker 1: to shows like Breaking Bad or Game of Thrones, But
Speaker 1: according to the website, it was not exactly high drama.
Speaker 1: Most reports made it sound like the program was perhaps
Speaker 1: a little bit more ambitious and the technology could technically support.
Speaker 1: Some people said it was proof that quote radio moving
Speaker 1: pictures end quote weren't quite ready for the home. And yeah,
Speaker 1: that is what some people referred to television as early on,
Speaker 1: was radio moving pictures. After all, you were broadcasting these
Speaker 1: signals over radio waves, and the closest analog really to
Speaker 1: TV at that point was the radio. So not that
Speaker 1: unusual or at least not that surprising. W two XB
Speaker 1: would broadcast its first electronic television signal a decade later,
Speaker 1: in nineteen thirty nine. Electronic televisions had been pioneered in
Speaker 1: the late nineteen twenties. Farnsworth. You probably have heard that name,
Speaker 1: Filo Farnsworth. He actually created electronic TVs and he features
Speaker 1: heavily in the TV story series that I mentioned a
Speaker 1: second ago. Our c A was heavily invested in electronic television.
Speaker 1: In the early days. The company had been a dominant
Speaker 1: force in radio and owned two NBC radio networks. The
Speaker 1: company wanted to establish a dominant position in the burgeoning
Speaker 1: world of broad cast television, and so they invested millions
Speaker 1: of dollars to do so. That was a significant investment.
Speaker 1: I mean it would be today, but even more so
Speaker 1: back then because I think fifty million dollars in nineteen
Speaker 1: twenties money nineteen thirties money. That's that's a huge chunk
Speaker 1: of change. Meanwhile, there was a competitor that was also
Speaker 1: interested in getting in the game. That would be Columbia
Speaker 1: Broadcasting System or CBS. There was another powerhouse in the
Speaker 1: radio world, and they were jumping into early TV broadcasts
Speaker 1: and created two newscasts a day. Each of those newscasts
Speaker 1: lasted about fifteen minutes, so this was quite some time
Speaker 1: before the twenty four hour news cycle, and these broadcasts
Speaker 1: weren't coast to coast. They reached a relatively small audience,
Speaker 1: primarily in New York City. So these early early broadcast
Speaker 1: networks were very much local in nature, and in fact,
Speaker 1: that's how we would see television evolved at first, lots
Speaker 1: of little islands of broadcast TV that were mostly centered
Speaker 1: around cities, and if you didn't live near one of
Speaker 1: those cities, it became very challenging for you to get
Speaker 1: any sort of content. There was a very little reason
Speaker 1: for you to go out and get a television because
Speaker 1: chances are you wouldn't have an antenna strong enough to
Speaker 1: pick up the signals, or the broadcast antenna wouldn't be
Speaker 1: strong enough to send the signals so that you could
Speaker 1: actually receive anything worth watching. So the early early days,
Speaker 1: this was very much an urban sort of form of entertainment,
Speaker 1: and it would only be later that we would see
Speaker 1: ways of distributing it to broader networks. By the early
Speaker 1: nineteen forties, the US government was beginning to create regulations
Speaker 1: for the new television industry, and this would be an
Speaker 1: ongoing kind of back and forth between the US government
Speaker 1: and various providers, whether they were broadcast companies, cable company,
Speaker 1: satellite companies, or what have you. Part of this process
Speaker 1: meant that the government wanted to bust up some of
Speaker 1: the bigger companies like our c A. Then newly formed
Speaker 1: Federal Communications Commission. The f c C went up to
Speaker 1: our c A and said, hey, we see you've got
Speaker 1: a couple of NBC networks. Do you need to knock
Speaker 1: that off? Dump one of them. You can keep one,
Speaker 1: but you've gotta get rid of the other one. So
Speaker 1: our c A did as it was told and spun
Speaker 1: off one of the two NBC networks, and that became
Speaker 1: a newly formed company that took on a new name.
Speaker 1: That new name was the American Broadcasting Company, or ABC.
Speaker 1: Now ABC wouldn't really become a television broadcast company for
Speaker 1: a few more years, but then you get the three
Speaker 1: big early broadcast networks, ABC, CBS, and NBC here in
Speaker 1: the United States. Fox, of course, would follow much much
Speaker 1: much later. By the late nineteen forties and early nineteen fifties,
Speaker 1: commercial television was becoming a thing. Sponsored programs would feature
Speaker 1: frequent pauses to identify the sponsor and urge people to
Speaker 1: go out and buy the product. It could be incorporated
Speaker 1: directly into a show. In several cases, even the NBC
Speaker 1: News in the late nineteen forties was sponsored by a
Speaker 1: tobacco company, and as such, the host, John Cameron Swayze
Speaker 1: was required to have a smoking cigarette in frame during
Speaker 1: every shot. He didn't have to have it in his mouth,
Speaker 1: but it had to be seen and it had to
Speaker 1: be lit. Enlightened times, ladies and gentlemen. The programs on
Speaker 1: television at that time were primarily extensions of previously existing
Speaker 1: radio programs. So if you ever watch old Classic TV
Speaker 1: and then you find out, hey, there was also a
Speaker 1: radio show, well, chances are the radio show came first,
Speaker 1: and then they would end up adapting that into a
Speaker 1: television series, finding often that doing so was not always
Speaker 1: easy because, as it turns out, with radio shows, you
Speaker 1: have an unlimited visual effects budget because it is in
Speaker 1: the mind of the listener. If I do a science
Speaker 1: fiction series Ease or a Western, I don't have to
Speaker 1: actually have any spaceships or horses. I can just create
Speaker 1: a little bit of sound effects and let the listener
Speaker 1: provide all the visuals. But if I'm going to do
Speaker 1: a television series, suddenly, I gotta produce some stuff otherwise
Speaker 1: viewers are going to be turned off pretty quickly. So
Speaker 1: it was a mixed bag, but it did mean that
Speaker 1: there were a lot of people drawing upon the experience
Speaker 1: of radio broadcasting in those early TV broadcasting days, and
Speaker 1: those three big broadcast networks were largely able to float
Speaker 1: their television businesses by pulling from radio profits. So in
Speaker 1: other words, they were taking the profits they were making
Speaker 1: from one business and using it to support a second one.
Speaker 1: Because even though it was revolutionary, there wasn't a huge
Speaker 1: audience yet, there was not really an easy way to
Speaker 1: make a lot of money in TV because there just
Speaker 1: weren't that many people able to afford a television set.
Speaker 1: So this was kind of a necessary evil in order
Speaker 1: to keep a very young industry afloat while its audience
Speaker 1: was able to start to coalesce and and grow, and
Speaker 1: it ended up working. It paid off big time, but
Speaker 1: it did take some time to do so. Now keep
Speaker 1: in mind television's at this time, we're still pretty expensive,
Speaker 1: and in order to get any use of them, you
Speaker 1: still needed to live somewhere relatively close to a broadcasting
Speaker 1: tower unless you had really innovative approaches to getting content
Speaker 1: like people did and say Pennsylvania. But we'll get to
Speaker 1: that in a second. Now, it would be a good time,
Speaker 1: I think, to talk about how broadcast television works from
Speaker 1: a very very high level. First, in order to send
Speaker 1: a television signal out over the air, you need a
Speaker 1: certain amount of bandwidth in radio frequencies. It's because you're
Speaker 1: setting a lot of information out, the image information, the
Speaker 1: audio information for picture and sound, plus you want a
Speaker 1: little room on either side to avoid interference. If you're
Speaker 1: talking about like a fairly modern broadcast that's about six
Speaker 1: mega hurts a bandwidth space on the radio spectrum, and
Speaker 1: again that creates a bit of a buffer so that
Speaker 1: you don't have two channels overlapping each other and interfering
Speaker 1: with one another. So in the United States, the government
Speaker 1: would dictate which frequencies could be used for stuff like
Speaker 1: television or radio broadcasts. They could also determine what the
Speaker 1: other parts of the spectrum could be used for. And
Speaker 1: this is a way again to avoid having two different
Speaker 1: services try and use the exact same bandwidth and thus
Speaker 1: create interference with each other. It's a very orderly system
Speaker 1: to make sure that things run smoothly. Otherwise you would
Speaker 1: have amateur radio operators honing in and and booting off
Speaker 1: actual commercial radio stations or television stations, depending upon the
Speaker 1: power of the transmitter and maybe how far away you
Speaker 1: happen to be from that transmission source. So in the
Speaker 1: United States, uh the government said that from fifty four
Speaker 1: mega hurts to the eighty eight mega hurts range, you
Speaker 1: would have channels two through six. Then you have to
Speaker 1: jump up to a hundred seventy four mega hurts to
Speaker 1: two hundred sixteen mega hurts for channels seven through thirteen,
Speaker 1: and then jump up again to four hundred seventy mega
Speaker 1: hurts all the way up to eight hundred ninety mega
Speaker 1: hurts for channels fourteen through three. Now, the reason why
Speaker 1: there are gaps between six and seven and between thirteen
Speaker 1: and fourteen is because those frequencies had already been allocated
Speaker 1: to other radio uses, so you couldn't just shift everything over.
Speaker 1: That would require an enormous amount of work. So instead
Speaker 1: of shifting everybody, you say, all right, well, we've got
Speaker 1: this band of frequencies available here, We're going to allocate
Speaker 1: that to these channels. Then we'll go up the spectrum
Speaker 1: until we can find the next wide band of frequencies
Speaker 1: that are available to allocate to TV again, and they
Speaker 1: did that a couple of times. As for the tech
Speaker 1: of the broadcast, it's pretty simple and concept. You have
Speaker 1: a camera and a microphone on one end that's capturing
Speaker 1: obviously visual and audio data, converts it into an electronic signal.
Speaker 1: That signal goes to a transmitter that's essentially a giant antenna.
Speaker 1: You amplify that signal quite a bit and you send
Speaker 1: it up the antenna, which then converts that signal to
Speaker 1: radio waves. So you get these electromagnetic waves that emanate
Speaker 1: outward from the antenna. On the television side, you would
Speaker 1: have a receiving antenna that would pick up those incoming
Speaker 1: radio waves and then convert them back into a television signal,
Speaker 1: which gets amplified in the TV set, and then you're
Speaker 1: able to watch your stories. Now, obviously it gets more
Speaker 1: technical than that, but that's good enough for our purposes,
Speaker 1: with not an episode to talk about the actual workings
Speaker 1: of broadcast TV. Just as commercial broadcas as television was
Speaker 1: getting its start, so was cable television. Now I don't
Speaker 1: mean cable channels, but rather using actual physical cable as
Speaker 1: a delivery mechanism for television signals. So in other words,
Speaker 1: we're not talking cable TV like MTV and UH, Comedy
Speaker 1: Central and those kind of things. We're talking about just
Speaker 1: getting television signals using cables. Uh. This arose in three
Speaker 1: different areas in the United States, more or less simultaneously
Speaker 1: and independently of each other. It was in nine which
Speaker 1: is pretty incredible when you think about it, that it
Speaker 1: was that early, and it was happening in Arkansas, Oregon,
Speaker 1: and Pennsylvania. And the three things that these places had
Speaker 1: in common was that they had some communities that were
Speaker 1: a good distance away from these urban centers and therefore
Speaker 1: could not easily pick up television signals. But they had
Speaker 1: populations that people who wanted to watch TV. So what's
Speaker 1: your solution if you can't really get a signal out
Speaker 1: to your house. Well, they decided to take a sort
Speaker 1: of communal approach. H Essentially, the community would put up
Speaker 1: a big receiver antenna someplace that would get the best reception,
Speaker 1: like at the top of a really tall hill, and
Speaker 1: they would receive broadcast signals at this big antenna. Now
Speaker 1: that big antenna would be connected to a system that
Speaker 1: used cables to send the TV signal to distant homes.
Speaker 1: So if you think about it like a regular television set,
Speaker 1: if you have a TV set at home and you've
Speaker 1: got a regular antenna set up, it's essentially the same thing,
Speaker 1: except the signal is traveling a much further distance in
Speaker 1: the cables than it would from the antenna to your screen.
Speaker 1: It's going through a cable that actually crosses the land
Speaker 1: or rather as usually strung up on utility polls, and
Speaker 1: so you can have people in very distant regions watch television.
Speaker 1: They're getting the low coal broadcast, uh, they're picking it
Speaker 1: up from a centralized antenna that is then sending the
Speaker 1: signal out to these distant homes. It was a pretty
Speaker 1: clever way of fixing things, although it would cause some
Speaker 1: issues further down the line, and we'll talk about those
Speaker 1: towards the end of this episode. This idea of how
Speaker 1: do you how do you end up reconciling the broadcast
Speaker 1: side of this business with the cable side of this business.
Speaker 1: But at the beginning, it was just a way of
Speaker 1: allowing people who otherwise would not have access to television
Speaker 1: at all to get that access. By the early nineteen sixties,
Speaker 1: there were about eight hundred cable systems in the United
Speaker 1: States with more than eight hundred thousand subscribers, and larger
Speaker 1: companies were starting to get in on the game. They
Speaker 1: were moving in on the domain that had been the
Speaker 1: arena for smaller businesses. This is kind of the story
Speaker 1: of Comcast. I also at a show about that. If
Speaker 1: you search the tex Stuff archives, you'll find the story
Speaker 1: of Comcast, and you'll learn that a lot of Comcasts
Speaker 1: history involved the company buying up smaller companies, regional companies,
Speaker 1: and growing their own business that way, and they became
Speaker 1: a coast to coast business largely by buying up other companies.
Speaker 1: They didn't grow their subscribers just by convincing people to
Speaker 1: join Comcasts. They grew their subscribers largely by buying up
Speaker 1: other companies that already had a large subscriber base. And
Speaker 1: they just kept getting bigger and bigger that way. And
Speaker 1: they were not the only company to do that, although
Speaker 1: that was of course the focus of my episodes. Now.
Speaker 1: Around this time, the FCC put some limits on what
Speaker 1: cable companies could do. For example, they weren't supposed to
Speaker 1: run cables so that a person in one service area
Speaker 1: like a city, would be able to get access to
Speaker 1: the local programming of a different service area different So
Speaker 1: in other words, I shouldn't be able at this time
Speaker 1: be able to turn on my television in Atlanta and
Speaker 1: watch local Chicago broadcasts. That would have been a no
Speaker 1: no around the early nineteen sixties according to the f
Speaker 1: c C. Now, one thing this managed to do was
Speaker 1: kind of put the brakes on the cable industry at
Speaker 1: that time, because now big companies were saying, well, it's
Speaker 1: starting to become a headache. I mean, there are all
Speaker 1: these little local broadcast areas where this makes sense, but
Speaker 1: we'd have to operate as almost like a franchise across
Speaker 1: the United States, and that was a little bit more
Speaker 1: daunting of a task than having a unified approach. So
Speaker 1: it actually slowed down the deployment of cable TV in
Speaker 1: the US for about a decade. But in nineteen seventy two,
Speaker 1: the FCC decided ease back on some of those restrictions.
Speaker 1: They started to deregulate the cable industry and this would
Speaker 1: continue on through the next two decades. So this is
Speaker 1: also when the first pay TV network came about. That
Speaker 1: would be the Home Box Office or HBO network. To
Speaker 1: learn more about that story, you can check out the
Speaker 1: three part series on the HBO story, the first episode
Speaker 1: published on May fen. Now, HBO's Passed is closely tied
Speaker 1: to the rise of cable television and the other network
Speaker 1: that really fostered the growth of cable TV in the
Speaker 1: United States, as in this idea of nationalized cable, not nationalized,
Speaker 1: but national cable in the sense that you could watch
Speaker 1: content from other places on your local TV. That big
Speaker 1: network was w TBS, the Ted Turner Network, and along
Speaker 1: with HBO, this was suddenly an ability for people in
Speaker 1: very different places in the US to get access to
Speaker 1: the same content as opposed to relying solely upon their
Speaker 1: local providers, their local broadcasters. In nine four, the Cable
Speaker 1: Act further deregulated the industry, and there was an enormous
Speaker 1: boom at that point in cable television development. But then
Speaker 1: we need to talk a little bit about satellite TV.
Speaker 1: Let's jump back again to nineteen sixty two. So we're
Speaker 1: back in the year where uh communities are are using
Speaker 1: cable to deliver television broadcast to remote locations. The f
Speaker 1: c C is just getting into the game saying, don't
Speaker 1: show stuff that doesn't belong to your region. Keep regions
Speaker 1: separate from each other, because we're getting into these disputes
Speaker 1: that are really a headache to deal with. And around
Speaker 1: this time was when the United States launched the first
Speaker 1: telecommunications satellite. This one was called tell Star. It was
Speaker 1: a Bell Labs project. It was built by a T
Speaker 1: and T and it could receive signals from the ground
Speaker 1: from Europe and send them over across the Atlantic to
Speaker 1: America and vice versa. But it was limited. It could
Speaker 1: only act as a sort of line of sight satellite,
Speaker 1: so that meant that it had to have a clear
Speaker 1: shot both from wherever it was receiving information and wherever
Speaker 1: it was sending information. And from a practical standpoint, that
Speaker 1: meant that the satellite could beam a live television feed
Speaker 1: for about twenty minutes every two and a half hours,
Speaker 1: because that's how long it took it to orbit the Earth.
Speaker 1: So you couldn't watch a full length movie in one
Speaker 1: sitting using this thing. But it was kind of a
Speaker 1: dawn of a new era with this telecommunications approach. Tell
Speaker 1: Stars actual fate was rather unfortunate. The United States and
Speaker 1: the then Soviet Union had been in the habit of
Speaker 1: conducting high altitude atomic weapons tests, and those tests pretty
Speaker 1: much toasted the satellites systems. So it went offline permanently
Speaker 1: on February twenty one, nineteen. Although it was still in orbit,
Speaker 1: it hadn't crashed to the Earth, but the electronics inside
Speaker 1: it were essentially fried, so there was no more TV
Speaker 1: being sent by Telstar one at that point. Now, it
Speaker 1: proved a point, but it wasn't really a replacement for
Speaker 1: broadcaster cable TV. In nineteen seventy six, there was a
Speaker 1: Stanford professor named H. Taylor Howard who built the first
Speaker 1: privately owned satellite receiving system, and he was a pretty
Speaker 1: clever dude. His satellite antenna could pick up the same
Speaker 1: transmissions that cable networks were using to send signals across
Speaker 1: the nation. So while you didn't have individual customers using
Speaker 1: satellite dishes until this point to pick up this stuff,
Speaker 1: cable companies were using it. So what would happen is
Speaker 1: you would have a cable company in one region and
Speaker 1: they would send a signal up to beam up to
Speaker 1: a satellite that would then beam it down to another
Speaker 1: receiving station much further away someplace where you don't have
Speaker 1: physical cables connecting the two areas, right, So might one
Speaker 1: might be in the East coast, one might be in
Speaker 1: the central United States, and the satellite would beam the
Speaker 1: signal down to the center well United States, and they
Speaker 1: would also get the same programming as the folks southeast. Dead.
Speaker 1: This was a way that networks like HBO could distribute
Speaker 1: their content across an entire nation without having a physical
Speaker 1: infrastructure connecting coast to coast, and there was really no
Speaker 1: worry about anyone else tapping into it because I mean,
Speaker 1: if you had a receiver, if you had a satellite receiver,
Speaker 1: as Taylor Howard had because he built his own, then
Speaker 1: you could get all that content for free. You wouldn't
Speaker 1: have to pay a monthly fee to HBO or to
Speaker 1: any provider. You're getting that information just by picking it
Speaker 1: up using an antenna. It was being sent in the
Speaker 1: clear or I t C, meaning there was no encryption
Speaker 1: or scrambling going on. So as long as you had
Speaker 1: an antenna capable of picking up the signals, you could
Speaker 1: actually watch that stuff for free, or at least for
Speaker 1: the cost of actually putting together an antenna. But the
Speaker 1: reason for this was the reason why companies like HBO
Speaker 1: weren't concerned about this was that if you wanted to
Speaker 1: go out and buy a satellite antenna, you'd be spending
Speaker 1: thousands and thousands of dollars tens of thousands of dollars
Speaker 1: to get one of these things, and it was just
Speaker 1: largely considered to be impractical. It was well beyond the
Speaker 1: reach of the average person. So the companies like HBO
Speaker 1: weren't concerned with us. Why would you worry about that.
Speaker 1: No one's going to bother with us until h Taylor
Speaker 1: Howard goes out and builds his own and he even
Speaker 1: I think somewhat cheekily wrote a hundred dollar check and
Speaker 1: sent it to HBO saying, Hey, I've been watching your
Speaker 1: content using my homemade satellite antenna, and I figure, you know,
Speaker 1: I should at least pay you for it, even though
Speaker 1: I don't have a cable subscription. And HBO's response was, hey,
Speaker 1: we can't accept this check. We only deal with big
Speaker 1: networks or big big, you know, cable providers. We don't
Speaker 1: deal with individuals. So then Howard published a how to
Speaker 1: guide how he built his own satellite receiver, and that
Speaker 1: meant that any enterprising home engineer with enough money to
Speaker 1: buy the the basic parts could get to work and
Speaker 1: build their own satellite antenna and therefore receive HBO for
Speaker 1: free or minus the price of building the antenna. The
Speaker 1: satellite TV industry essentially started off that way. People started
Speaker 1: to grab some signals meant for cable customers. But before
Speaker 1: too long two things happened. One, cable companies began to
Speaker 1: scramble their signals so that you would be incentivized, let's say,
Speaker 1: to subscribe to their service to get the ability to
Speaker 1: de scramble that channel and watch the content. And the
Speaker 1: second thing that happened was that the satellite providers were
Speaker 1: beginning to emerge as a competing industry to cable providers.
Speaker 1: So you had the individual cable channels, the people who make,
Speaker 1: or at least who who produced the stuff that you
Speaker 1: want to watch, and then you add the cable providers,
Speaker 1: the people who have or the companies who have the
Speaker 1: infrastructure that delivers that content. This can get really confusing
Speaker 1: because we frequently will refer to cable just as cable,
Speaker 1: and we could either mean the provider or we could
Speaker 1: mean the content creator. And to make it more confusing,
Speaker 1: there are of course companies that are both They are
Speaker 1: both providers and content creators, and that makes things messy.
Speaker 1: It's also one of the reasons why you've got people
Speaker 1: arguing for net neutrality to try and create a separation
Speaker 1: between the content creators and the content providers so that
Speaker 1: you don't see preferential treatment given to one company's own
Speaker 1: products over all the other competitors. But I've already talked
Speaker 1: about net neutrality and other episodes, so we'll leave that
Speaker 1: from for now. Back to satellite TV. Uh, you started
Speaker 1: seeing these companies pop up with their own services, so
Speaker 1: you could, you know, subscribe to them, just as you
Speaker 1: would with cable TV, so dish and direct TV things
Speaker 1: like that, you could subscribe to them and get your
Speaker 1: television that way. And I'll have to do a full
Speaker 1: episode on the satellite TV industry to go into how
Speaker 1: they evolved over time, But to be honest, to get
Speaker 1: into that story here would take up way too much time.
Speaker 1: It really deserves its own episode or pair of episodes.
Speaker 1: So let's just say it had its own challenges in
Speaker 1: those early days. That brings us to television over the Internet.
Speaker 1: While there are many services that deliver video content over
Speaker 1: the Internet that I've been around for a decade or so,
Speaker 1: such as just streaming recorded video live TV over the
Speaker 1: internet that is still relatively young. Now one of those
Speaker 1: services is Sling TV. When we come back, I'll have
Speaker 1: a discussion with Jim Shade Chadar, the VP of Product
Speaker 1: Marketing and Management over at sling t But first, let's
Speaker 1: take a quick break to thank our sponsor and Jim Shade,
Speaker 1: thank you so much for agreeing to be on tech stuff.
Speaker 1: I really appreciate it. I'm very excited to have this conversation.
Speaker 1: So let's say we're doing the classic elevator pitch. You
Speaker 1: get an elevator, there's a person there, you're you're going
Speaker 1: up to the floor, and it's not the express elevator,
Speaker 1: And of course conversation turns to, so what do you
Speaker 1: do for a living? How do you describe to someone
Speaker 1: what Sling TV is all about. Yeah, it's a great question.
Speaker 1: So Sling TV is the leading live OTT streaming service
Speaker 1: in the United States. Think of it as Netflix, but
Speaker 1: for live and on demand TV. All the customers to
Speaker 1: do is download an app to their favorite device and
Speaker 1: they can watch channels like ESPN, A, m C, h G,
Speaker 1: t V, CNN Live on the device of their choice
Speaker 1: over the net. Cool. So it's following a very uh
Speaker 1: proven model at this point. One of the things that
Speaker 1: a lot of people have said about services, specifically Netflix
Speaker 1: in particular, but services light Netflix, is that the thing
Speaker 1: they really nailed was this concept of making sure the
Speaker 1: application was available wherever people wanted a chance to use it,
Speaker 1: and so that it just became kind of ever present
Speaker 1: and you can find it on everything, to the point
Speaker 1: where I wouldn't be surprised if there are refrigerators and
Speaker 1: stoves that have it on them now. So it sounds
Speaker 1: like this is a similar concept, but now we're looking
Speaker 1: at live television, something that previously you you were pretty
Speaker 1: much stuck to either over the air broadcast or cable
Speaker 1: or satellite service, and now you can get it through
Speaker 1: your internet service provider. Is that that more or less correct? Yeah?
Speaker 1: I think the way I would think about it is
Speaker 1: really about choice for our customers. And if you think
Speaker 1: about traditional pay TV, you are always locked into the
Speaker 1: steptop box that came with that PATV provider. And so
Speaker 1: now if you you know, if you prefer Coo over Amazon,
Speaker 1: or if you like Apple TV, we're putting that choice
Speaker 1: back into customer's hands. You can use playing on any
Speaker 1: one of those devices. Excellent. So talk a little bit
Speaker 1: if you can about the process of coming up with
Speaker 1: the idea and rolling it out. What was that like,
Speaker 1: because obviously getting into this field, it's it's their challenges
Speaker 1: that I think the average person has no real knowledge of,
Speaker 1: things like carriage agreements, things of that nature. And I'm
Speaker 1: not asking to get into particulars with any of that,
Speaker 1: but kind of let people know, Like when you're an
Speaker 1: average customer who wants to watch television, your question might
Speaker 1: just be, well, why can't I just get this? You know,
Speaker 1: why why did it take so long for it to
Speaker 1: get to me? And I don't think they understand the
Speaker 1: complications that are that are surrounding such an endeavor. So
Speaker 1: can you talk a little bit about the development both
Speaker 1: maybe from not so much a technological side, we can
Speaker 1: talk about a little bit, but really from the the
Speaker 1: business side, what took to get this in place? Sure,
Speaker 1: I think you bring up a lot of great points.
Speaker 1: Um when you when it comes to kind of content
Speaker 1: rights and digital content rights, they're really complicated and I
Speaker 1: don't think the average consumer definitely appreciate the complexity around them.
Speaker 1: So we started negotiating with our programming partners almost five
Speaker 1: to six years ago, way before we launched the service,
Speaker 1: because we knew that one of the pain points that
Speaker 1: we were trying to address was that customers didn't like
Speaker 1: paying for channels that they weren't watching. And so it
Speaker 1: was very important for us when we launched pling TV
Speaker 1: to make sure that we launched the service to put
Speaker 1: the choice and control back in customers hands and dealt
Speaker 1: with that pain point. And so we spent years basically
Speaker 1: negotiating with these programming partners, and we had the benefit
Speaker 1: of being part of Dish and this has had these
Speaker 1: programming relationships for you know, decades at this point, and
Speaker 1: we really worked with our programming partners to come up
Speaker 1: with a model where we could offer you a smaller
Speaker 1: kind of base pack of channels and let people choose
Speaker 1: different genre packs that they wanted sports or if they
Speaker 1: wanted kids, they could just add those on and still
Speaker 1: have an affordable service and so um, like I said,
Speaker 1: the content rights are pretty complicated. So sometimes you know,
Speaker 1: you're not allowed to watch you know, football on a
Speaker 1: mobile device. It's not something we have control over because
Speaker 1: that's how the NFL negotiative rights with the carriers, or
Speaker 1: you know, some channels aren't available on some services, etcetera.
Speaker 1: And so for us, it was really important to give
Speaker 1: customers a choice of the channels that they wanted, the
Speaker 1: things that we thought were going to be most popular,
Speaker 1: but make sure that they didn't have to pay for
Speaker 1: things that they didn't want or didn't want to watch. Right.
Speaker 1: So this this is kind of that dream of the
Speaker 1: Alakhart approach that a lot of people thought was going
Speaker 1: to be a natural progression once we started seeing the
Speaker 1: possibilities of delivering streaming content over the Internet. But again
Speaker 1: that was largely without the the understand ding of how
Speaker 1: the business side of it works. Once upon a time,
Speaker 1: how stuff works was part of Discovery Communications, and for
Speaker 1: me that was my education and learning more about things
Speaker 1: like carriage agreements and if it's a if it's a
Speaker 1: network of channels, if it's one big channel, there's also
Speaker 1: issues of if you negotiate with them, then you have
Speaker 1: to figure out, well, I can get that channel, but
Speaker 1: I'm going to have to get these other five channels
Speaker 1: on my cable package because it's all part of a
Speaker 1: package deal and Once you see it from that side,
Speaker 1: the backside, you start to get a deeper appreciation of
Speaker 1: how as you say, how complicated this is. And that's
Speaker 1: before you get to the added restrictions of things like, well,
Speaker 1: you can watch this, but it has to be either
Speaker 1: on a television set or maybe on a computer but
Speaker 1: not on a mobile device. Or it maybe yes, you
Speaker 1: can have this, but some of the capabilities of your app,
Speaker 1: maybe you were able to do things like pause live
Speaker 1: TV or rewind a little bit. They might work with
Speaker 1: the or the agreements might allow for that for certain
Speaker 1: channels but not for others. And once you see how
Speaker 1: complicated this is, you really get that appreciation of Okay,
Speaker 1: now I understand even though the technology existed, it still
Speaker 1: took years of development to get it all uh rolled out.
Speaker 1: And as I understand it, when it first when it
Speaker 1: first rolled out, there were essentially two broad categories that
Speaker 1: you could take blue and orange, and that was sort
Speaker 1: of the base packages, and you could also choose to
Speaker 1: combine the two. Is that correct? Yeah, So, so from
Speaker 1: a services standpoint, we offered you know, Spling Orange and
Speaker 1: we offered Spling Blue, and they had some of the
Speaker 1: channels were the same between them, some of them are different.
Speaker 1: One had ESPN and the other ones had NBC and
Speaker 1: Fox channels. And now we also offered you know, international
Speaker 1: language group choices and Latino choices. So Orange and Blue
Speaker 1: are the kind of the base domestic packs for you know,
Speaker 1: English speaking, and then we the Latino packs. And we
Speaker 1: also have a bunch of content in different language groups
Speaker 1: from Arabic, the Chinese to Polish, et cetera. So in
Speaker 1: I am sure that in your career you've already seen
Speaker 1: how the industry, how how really the delivery of content
Speaker 1: has changed dramatically. It's something that I like to talk
Speaker 1: about a lot on my show from the era of broadcast,
Speaker 1: over the year two era of cable and then also
Speaker 1: cable and satellite, And would you say that it's you know,
Speaker 1: is it fair to say that the Internet delivery is
Speaker 1: kind of like that next era, that next step in
Speaker 1: evolution in the way we get content from UH, from
Speaker 1: major creators and channeled through to two audiences. I definitely
Speaker 1: think it's it's an uh an evolutionary past. I think
Speaker 1: the one thing to keep in mind was that the
Speaker 1: the Internet's original purpose is not to deliver video, and
Speaker 1: so although it is a natural kind of evolution. It
Speaker 1: is also a challenge to deliver live TV over the
Speaker 1: Internet where you know, we don't own the I s P.
Speaker 1: We don't own the end device that a customer has,
Speaker 1: right and then of course there are all the other
Speaker 1: issues things like you you can't really guarantee that uh,
Speaker 1: that the bit rate is going to be the at
Speaker 1: a at a level where you're going to get the
Speaker 1: quality that the home viewer expects, and that's completely outside
Speaker 1: of your control. It's not like it's, you know something
Speaker 1: where sling TV just says, all right, well, I know
Speaker 1: you wanted to watch this program, but I'm gonna throttle it.
Speaker 1: It's not that it's it's all these other elements that
Speaker 1: are outside of that. But the flip side of that,
Speaker 1: of course is the convenience on the consumer side, the
Speaker 1: fact that you have these different options of ways to
Speaker 1: access the content. And I find I find that the
Speaker 1: really compelling thing. What's the deployment like so far for
Speaker 1: Sling TV about I don't know how much you can
Speaker 1: talk about your your install base, but I was kind
Speaker 1: of curious to hear what adoption has been like. Yes,
Speaker 1: so unfortunately can give you specific numbers about our installed base,
Speaker 1: but you know, we are the leading last streaming offering
Speaker 1: out out there today. I think, you know, for us,
Speaker 1: we've seen kind of broad adoption across the different devices
Speaker 1: were on. We've realized there's kind of this rule of
Speaker 1: people gravitate towards the largest screen that's in front of them.
Speaker 1: So if they're at home, you know, they were going
Speaker 1: to watch on their TV. If they're you know, on
Speaker 1: a subway somewhere, if they're traveling and the phone is
Speaker 1: the only screen in front of them, you know, we
Speaker 1: see a lot of usage on the phone because that's
Speaker 1: the biggest screen they have in front of them. We've
Speaker 1: seen a lot of engagement from our customers. Um you know,
Speaker 1: if you look if we go back to two thousand,
Speaker 1: sixteen seventeen, I think we saw increase on a per
Speaker 1: user basis and the time within app. So, you know,
Speaker 1: I think if you think about splaying as a cord
Speaker 1: cutting or live streaming solution, I think people were experimenting,
Speaker 1: they were trying our service, and then at once they
Speaker 1: tried it, they recognized the choice and the convenience and
Speaker 1: the control that we give them, they started engaging more
Speaker 1: with the platform. And realizing that they could really meet
Speaker 1: their injury him and needs, which plink TV. So this
Speaker 1: is also one of those offerings that might appeal to
Speaker 1: the so called cord never's the people who have never
Speaker 1: really subscribed to to cable at all, but now they
Speaker 1: could get that same sort of access to content only
Speaker 1: over the Internet, which is that's you know, that's kind
Speaker 1: of the the access point they've become used to with
Speaker 1: other services. So I see this as really catering to
Speaker 1: that group as well, a group that otherwise seems to
Speaker 1: be unreachable through traditional means of getting you know, getting
Speaker 1: content to audiences. So it's it's fascinating to me there
Speaker 1: as well. It was one of those stories where again
Speaker 1: coming from a world where at one point I was
Speaker 1: part of a company that in part owned a large
Speaker 1: cable network and seeing the conversations going on there about
Speaker 1: concerns of how to reach audiences. To me, this is
Speaker 1: a potential solution in that it is a different avenue.
Speaker 1: It's one that doesn't depend upon uh services that a
Speaker 1: lot of people just view as as being like you say,
Speaker 1: like like including offerings that you don't have any interest in,
Speaker 1: you know, why why do I want to subscribe to
Speaker 1: a one fifty channel cable package if I'm only watching
Speaker 1: a dozen or so of those channels. And this seems
Speaker 1: to be uh much closer to that Alakhart future that
Speaker 1: a lot of people wanted. What do you see in
Speaker 1: the future, What has you excited over at Sling TV? So,
Speaker 1: I think, uh, when we look kind of to the future,
Speaker 1: there's a couple of couple of areas that we're focused
Speaker 1: on that I think are exciting. Probably not the sexist
Speaker 1: areas to think about, but I think so us we
Speaker 1: think about two main focus areas. One is just course stability.
Speaker 1: Like I said, not the sexist area. But if you
Speaker 1: think about people and the experience have had with traditional
Speaker 1: pay TV, not like the customer service or the fees
Speaker 1: that pay, et cetera. But they know that when they
Speaker 1: tune to a channel, it's gonna play. And that expectation,
Speaker 1: whether your cord never and you've been using Netflix and
Speaker 1: Hulu or your cord cutter, you have that expectation that
Speaker 1: your experience, your entertainment experience, is gonna be reliable. That
Speaker 1: you click on something, it's gonna play. You're not going
Speaker 1: to see a buffering wheel, and you know we were
Speaker 1: serving customers on a daily basis when they're using it,
Speaker 1: and we know when there's marquee events, you know, we
Speaker 1: bring in a ton of customers just to watch those events,
Speaker 1: and it's critical for us to make sure that the
Speaker 1: service delivers the experience that they want. We talked about
Speaker 1: earlier delivering live TV over the Internet is not a
Speaker 1: simple task and a lot of people are trying it,
Speaker 1: and I think what we've learned over the last three
Speaker 1: years is that stability is really important um for customers
Speaker 1: to not only jump off to the service, but to
Speaker 1: stay with the service. And then I think the second
Speaker 1: area is really around contum discovery. We give a lot
Speaker 1: of choice and control to customers. They can mix and
Speaker 1: match the channels they want to create their own entertainment experience,
Speaker 1: but we gotta make we're making sure that TV is
Speaker 1: simple for them. Um. You know, that's a pretty fragmented
Speaker 1: experience out there if you're in consumer or customer and
Speaker 1: you're thinking about all the different places you can go
Speaker 1: to watch TV. And one of our focus areas for
Speaker 1: two thousand eighteen is how do we make it simple?
Speaker 1: How do we aggregate that content that customers want, whether
Speaker 1: it's core channels, it's premiums like HBO and Stars, or
Speaker 1: it's even over their local channels. How can we produce
Speaker 1: kind of a single interface and make it simple for customers? Again, Yeah,
Speaker 1: I've I've talked on this show before about how user
Speaker 1: interface design is uh a fascinating area and it's it's
Speaker 1: so much more challenging than you might actually think, you know,
Speaker 1: on on just casual glance. And the example I always
Speaker 1: give people is, I say, think of all the times
Speaker 1: you've heard of a product or service that sounded really compelling,
Speaker 1: but then when you've got a chance to use it,
Speaker 1: it was so so difficult to access for whatever reason
Speaker 1: that you walked away from it. Creating that that magic
Speaker 1: user interface that just invites engagement is that's that's something
Speaker 1: that a lot of different companies have really, you know,
Speaker 1: struggled with and and experimented with. And obviously it's always
Speaker 1: evolving and changing, especially as the product itself evolves. So
Speaker 1: I wish you guys the best on that because I
Speaker 1: know it's a challenging endeavor, but I'm also excited to
Speaker 1: see how it turns out. So I have to ask you, now,
Speaker 1: this is the big, important gotcha question of the interview,
Speaker 1: What's what's your favorite show? It's interesting, I think right
Speaker 1: now I would have to gravitate towards this is us No. Nice, nice, Okay, alright,
Speaker 1: you pass. Acceptable, fantastic. I have to thank you again
Speaker 1: for being on the show talking a little bit about
Speaker 1: this service. I'm really fascinating to take a deeper dive
Speaker 1: into it. And and again, uh, it's nice to get
Speaker 1: that perspective and that understanding of you know, the technology
Speaker 1: side of it is always complicated, but that's something that's
Speaker 1: easier to solve if you just stick with it. It's
Speaker 1: the business side that's that's like a a super intricate
Speaker 1: web that you have to unravel gently in order for
Speaker 1: this to work. So I greatly appreciate you taking the
Speaker 1: time to talk with my listeners. And uh, I'll you know,
Speaker 1: you're free to come on the show whenever you want.
Speaker 1: We can chat about what's good on TV. Yeah, all right,
Speaker 1: thank you appreciate having me on board. Big thanks to
Speaker 1: Sling TV for joining me to talk on this episode.
Speaker 1: When we come back, I'm gonna talk a little bit
Speaker 1: more about carriage deals and some of the other challenges
Speaker 1: that we see with the way we get television today.
Speaker 1: But first let's take another quick break to thank our sponsor.
Speaker 1: All right, guys, Sling TV is one of many services
Speaker 1: that are competing in the live TV over the Internet space.
Speaker 1: There are competitors like direct TV now, there's YouTube TV,
Speaker 1: there's PlayStation View, there's Hulu with live TV, and these
Speaker 1: services all seek to appeal to cord cutters and coordinators
Speaker 1: alike by offering up options to get television programming over
Speaker 1: the Internet and again to try and get to that
Speaker 1: a lakhart approach. Now, I mentioned in the interview that
Speaker 1: one of the big challenges out there, and in fact
Speaker 1: this was what they were talking about two, is just
Speaker 1: the agreements that need to be in place in order
Speaker 1: to carry content over a service. As it turns out,
Speaker 1: this is a really tricky, tricky situation. It's it's challenging
Speaker 1: and it has been for decades. And the reason for
Speaker 1: that is this agreement called carriage. Right, these carriage deals,
Speaker 1: this refers to a content provider or rather a signal provider,
Speaker 1: if you will, to carry certain types of content and
Speaker 1: what they have to hey in order to get access
Speaker 1: to it. So let's separate them out by the creators
Speaker 1: and the providers the service providers, the creators, the content creators,
Speaker 1: or at least the people who are companies that own
Speaker 1: this content, whether they made it or they contracted to
Speaker 1: have it made for them or whatever. They've got the
Speaker 1: stuff people want to watch. The providers have the connections
Speaker 1: that can get stuff to customers, because generally speaking, the
Speaker 1: creators don't have a direct line to their audience, they
Speaker 1: rely upon providers. The providers traditionally have to pay to
Speaker 1: be able to carry content to their customers. The customers
Speaker 1: pay a subscription to the providers so that the providers
Speaker 1: will give them the stuff they want. So I'm a customer.
Speaker 1: Let's say that I am a customer of Cable Company A,
Speaker 1: and I pay a certain amount per month to Cable
Speaker 1: Company A to get a bundle of channels. It's the
Speaker 1: basic bundle. I'm going bare bones local channels and small
Speaker 1: collection of cable shows or cable channels. I should say.
Speaker 1: Cable Company A takes my subscription money and all the
Speaker 1: other subscription money that's part of their revenue. They also
Speaker 1: look at their costs, and part of their costs is
Speaker 1: the carriage deals that they have struck with various cable networks,
Speaker 1: and cable networks will end up negotiating a fee for
Speaker 1: a per subscriber basis. Typically, and this has caused some
Speaker 1: big problems in the past, but sometimes they will negotiate
Speaker 1: not to have a higher fee, but rather for the
Speaker 1: cable provider to carry additional channels, secondary channels that perhaps
Speaker 1: the cable provider otherwise would not carry, and this ends
Speaker 1: up creating more of an audience for those secondary channels.
Speaker 1: So I talked in the interview about how how stuff
Speaker 1: works was once part of Discovery Communications. We Discovery Communications
Speaker 1: has several different cable channels under its umbrella. You've got
Speaker 1: the Discovery Channel, you have the Science Channel, you have
Speaker 1: t l C, you have other channels. And typically a
Speaker 1: company like Discovery Communications would go into a carriage deal
Speaker 1: discussion and say, yes, we know you want Discovery Channel.
Speaker 1: We realize that that is a valuable property to you,
Speaker 1: and we have agreed upon what the cost should be
Speaker 1: for you to get access to our content to send
Speaker 1: to your subscribers. If you're going to do that, you
Speaker 1: also have to take the Science Channel and TLC as
Speaker 1: part of the deal, and then your subscribers are going
Speaker 1: to also have access to those channels. So what it
Speaker 1: means is that a big channel that's got a lot
Speaker 1: of viewers, if they've decided they want to invest in
Speaker 1: a smaller channel and perhaps grow that business, then they
Speaker 1: can use their leverage to have a cable provider include
Speaker 1: that channel with their service. Why would you get into
Speaker 1: a smaller channel, Well, here's why publicly traded companies depend
Speaker 1: upon growth. Growth is kin to success, right, that is,
Speaker 1: that's how we measure success with publicly traded companies. Typically,
Speaker 1: it's not just how much profit did you make, it's
Speaker 1: how much did you grow year over year? Not not
Speaker 1: just how much did you make this year, but how
Speaker 1: much more did you make this year from last year.
Speaker 1: Eventually you're going to reach a saturation point with your channel.
Speaker 1: You're you're gonna hit about as many people as you're
Speaker 1: ever going to get. Your channel is not likely to
Speaker 1: grow much beyond that. It may mean that you've hit
Speaker 1: essentially everybody's television already, so there's nowhere else to grow. Well,
Speaker 1: if you can't grow with your primary channel, the next
Speaker 1: best thing to do is to create a secondary channel
Speaker 1: that can then grow, and as a result, the entire
Speaker 1: company benefits because while your main channel can no longer
Speaker 1: really add viewers just because you've you've hit that saturation point.
Speaker 1: Your secondary channel has just started off. The sky is
Speaker 1: the limit. You can grow your your audience by leaps
Speaker 1: and bounds year over year. And remember in the early days,
Speaker 1: if you have a small audience and you double it, well,
Speaker 1: it's not impressive if you're looking at raw numbers, but
Speaker 1: from a percentage basis, it's incredibly impressive. If I say, oh,
Speaker 1: we went from viewers to five viewers, that's not a
Speaker 1: big deal. But if I say, oh, we increased our
Speaker 1: viewership by then everyone's suddenly thinking, wow, that's amazing. So
Speaker 1: that is kind of the thought process that goes behind
Speaker 1: this bundling approach. It's also one of the reasons why
Speaker 1: when you subscribe to cable, even if you're getting a
Speaker 1: basic cable package, you may find yourself with access to
Speaker 1: channels that you really didn't have any interest in. And
Speaker 1: it's not that the cable company the provider necessarily thinks
Speaker 1: that you're going to have interest in all those channels,
Speaker 1: but rather that the big names in the game own
Speaker 1: those channels. Right those are all secondary or subsidiary channels
Speaker 1: of this bigger channel, and part of the agreement for
Speaker 1: the provider to be able to carry that primary channel,
Speaker 1: that big one that everybody wants, is that they have
Speaker 1: to carry all those smaller ones. Now. Sadly, what this
Speaker 1: means from a consumer standpoint is that we get this
Speaker 1: feeling that we are completely inundated by channels we just
Speaker 1: don't care about, and we end up looking at our
Speaker 1: cable bill and our cable bill gets higher and higher. Right,
Speaker 1: those cable prices are pretty expensive, even for basic channels.
Speaker 1: They tend to be pretty expensive if you're going through
Speaker 1: traditional cable service, and the implication is, I am paying,
Speaker 1: you know, more than a hundred dollars a month, let's say,
Speaker 1: for four channels I want and fifty channels I don't
Speaker 1: care about, or more, depending upon what your basic cable
Speaker 1: package happens to be. And that's very frustrating. And in
Speaker 1: our minds, we're thinking, Hey, if I could just cut
Speaker 1: that down to those four channels, think of how much
Speaker 1: more money I would save. Plus I wouldn't be so
Speaker 1: irritated that I've got all this useless stuff on my
Speaker 1: TV that I don't care about. But that's not the
Speaker 1: way the industry works because You've got these these big
Speaker 1: companies that own multiple channels, and they all are pushing
Speaker 1: to have those channels included in these carriage deals. Meanwhile,
Speaker 1: you can get into these disputes where a company can
Speaker 1: ask for more money per subscriber than the cable provider
Speaker 1: was willing to give. There was a big one in
Speaker 1: two thousand nine. There was a dispute between Fox and
Speaker 1: Time Warner Cable. And from what I recall, Fox wanted
Speaker 1: to get a monthly fee of around a dollar per subscriber.
Speaker 1: For Time Warner Cable to say, all right, Time Warner Cable,
Speaker 1: you want to carry the Fox network on your service.
Speaker 1: We want a dollar per subscriber to Time Warner Cable
Speaker 1: in return, and then we'll make this deal. Time Warner
Speaker 1: Cable said, whoa, that's kind of steep. We were thinking
Speaker 1: more like twenty cents per subscriber, so maybe one fifth
Speaker 1: of what you're asking for. Neither party really wanted to
Speaker 1: budge on this, and they didn't just try to settle
Speaker 1: this negotiations. They actually took it to the public. There
Speaker 1: were pr campaigns both from Time Warner Cable and from
Speaker 1: Fox that were aimed at Time Warner Cable customers. The
Speaker 1: Fox was saying, Hey, Time Warner Cable customers, t WC
Speaker 1: doesn't want you to see our shows. So if you
Speaker 1: want to watch our shows, like if you like the Simpsons,
Speaker 1: I tell you what, maybe you should look at a
Speaker 1: different cable provider because Time Warner Cable just doesn't have
Speaker 1: your back. Man, you should just you should just ditch them. Meanwhile,
Speaker 1: Time Warner Cable is saying, Fox doesn't want to be
Speaker 1: on your chancel on on your service anymore. And if
Speaker 1: we if we capitulate to their demands, that means we're
Speaker 1: gonna have to raise your subscription price. You're gonna have
Speaker 1: to pay more because it's gonna cost us more to
Speaker 1: have Fox on your network. So and we don't want
Speaker 1: to charge you more money. Come on, man, we just
Speaker 1: want to get your stuff to you. So you have
Speaker 1: these two different public relations battles going on at the
Speaker 1: same time, and ultimately they both settled out of public
Speaker 1: view for a fee that was never publicly announced, So
Speaker 1: somewhere probably between twenty cents and a dollar per subscriber,
Speaker 1: as my guest, but who knows what the actual number is.
Speaker 1: Anyone in the deal knows, but anyone outside of it
Speaker 1: probably doesn't. So that's the way that this can get
Speaker 1: really ugly with these carriage deals as well. All of
Speaker 1: that was to say that going with television over the
Speaker 1: Internet has these same issues. It's not like TV of
Speaker 1: the Internet is uh has got a blank pass two
Speaker 1: show you anything and everything. You can't just sign up
Speaker 1: and say I want these six channels, I don't want
Speaker 1: anything else, because again, they have to follow the same
Speaker 1: rules as cable and satellite providers. This is largely because
Speaker 1: in the United States, at least, there are all these
Speaker 1: different rules and regulations in place to protect industries from
Speaker 1: what is considered to be unfair competition. Cable and satellite
Speaker 1: channels or providers rather have to follow these rules that
Speaker 1: have been set up in order to create one it's
Speaker 1: supposed to be a fair playing ground. You could argue
Speaker 1: that that's not really the case since there are so
Speaker 1: few major providers in the United States, but that's what's
Speaker 1: supposed to happen. The Internet providers also are supposed to
Speaker 1: follow those rules because without it they could run rampant,
Speaker 1: and in fact, there have been some pretty big cases
Speaker 1: involving stuff that is kind of in a gray area.
Speaker 1: Between these You may remember when I was talking earlier
Speaker 1: in this episode about people in Pennsylvania and Arkansas and uh,
Speaker 1: you know, using these cables connected to antenna so that
Speaker 1: they could get access to stuff that otherwise they would
Speaker 1: not be able to receive because the signals are too
Speaker 1: weak for them to pick up on their home television sets.
Speaker 1: There was a company called Areo that launched and the
Speaker 1: two thousand twelve and went out of busines this in
Speaker 1: two thousand fourteen. And the reason when out of business
Speaker 1: wasn't because of lack of customers, but because it encountered
Speaker 1: legal problems. What area was doing was offering up a
Speaker 1: service where you can subscribe to the service and get
Speaker 1: access over the internet to live television stations that were
Speaker 1: picked up by local antenna. Uh not your antenna, but
Speaker 1: the business is antenna and they had set up antenna
Speaker 1: originally in New York City, and so you could subscribe
Speaker 1: to this business and get access to live TV picking
Speaker 1: that was being picked up by these antenna. And there
Speaker 1: were service providers and uh, content providers who said, this
Speaker 1: isn't fair. We can't get compensated for this. There's no
Speaker 1: carriage agreement. And Ario's argument was saying, well, we're just
Speaker 1: using antenna. We're using broadcasts that are over the air.
Speaker 1: There's no limit, you know, there's not anything here that
Speaker 1: should be a gateway or a wall between the customer
Speaker 1: and the content. So it's the exact same thing as
Speaker 1: if the customer had set up his or her own
Speaker 1: antenna in their own home. All we're doing is just
Speaker 1: sort of creating a middleman approach where we've got the antenna,
Speaker 1: but the customer still gets to see stuff that's over
Speaker 1: the air. It's not like we're descrambling signals or anything.
Speaker 1: This is all in the clear broadcasts. But the various
Speaker 1: industry group said, no, you're you you're charging a subscription
Speaker 1: fee for the service and we're not seeing any of that,
Speaker 1: and we don't have any of these carriage agreements. You're
Speaker 1: acting more like a cable provider than you are anything else. Uh.
Speaker 1: And if in fact this we're just a case of
Speaker 1: using an antenna, then there's already a solution there, right.
Speaker 1: The person can just go out and buy an antenna,
Speaker 1: never mind the fact that, depending upon where you live,
Speaker 1: you may not be able to get a good signal
Speaker 1: over the air using an antenna. That was the argument,
Speaker 1: and Originally some of the lower courts agreed with Area,
Speaker 1: but eventually this went all the way up to the
Speaker 1: Supreme Court, wherein a six three decision, the Supreme Court
Speaker 1: came down and said, you know what, Area, you don't
Speaker 1: have a leg to stand on. You you are acting
Speaker 1: more like a cable service provider as opposed to just
Speaker 1: an antenna, and therefore you are not allowed to practice
Speaker 1: business in this method anymore. And so the company ended
Speaker 1: up folding. He said they could no longer do that
Speaker 1: kind of business. There are similar businesses that do rely
Speaker 1: upon an actual consumers own UH feed. So, in other words,
Speaker 1: there's slingbox, not to be confused with sling TV, and
Speaker 1: slingbox is a streaming media service. It's a device that's
Speaker 1: actually UH allows you to watch your television no matter
Speaker 1: where you are. But this relies upon the feed that's
Speaker 1: going into your home. It's not like it's a system
Speaker 1: that is connected to someone else's antenna. It's connected to
Speaker 1: your cable box or satellite box or whatever. And the
Speaker 1: way it works is that the incoming signal can then
Speaker 1: be sent over the Internet to the receiver. And the
Speaker 1: benefit of this is you can watch your local television
Speaker 1: even when you're away from home. Now, there are some
Speaker 1: issues with this as well, because depending upon the content
Speaker 1: you're trying to watch, there are blackout agreements that can
Speaker 1: make this a little muddy. So, for example, is sports.
Speaker 1: If I happen to be traveling to let's say ce
Speaker 1: S and I want to watch a Braves game, which
Speaker 1: would be weird because it would be in the middle
Speaker 1: of winter and baseball doesn't happen then, But follow me,
Speaker 1: because we don't have the Thrashers anymore, so I don't
Speaker 1: really have any other sports I would watch, um, but
Speaker 1: I want to watch local sporting event while I'm in
Speaker 1: Las Vegas. Usually I wouldn't have access to it because
Speaker 1: that would have this regional agreement where a very specific
Speaker 1: broadcaster would be allowed to show that, and it would
Speaker 1: only apply to a specific region and not outside of it. Now,
Speaker 1: I live in that region, but I wouldn't actually be
Speaker 1: there at the time. I'd be in Las Vegas. Using slingbox,
Speaker 1: what I could do is tune into my local television,
Speaker 1: the TV set that's actually in my house, change it
Speaker 1: to whichever channel I want to watch, and watch the
Speaker 1: game that way. Even this approach has received some resistance
Speaker 1: but you could argue that this is much more clear
Speaker 1: cut case than the area approach because it's all relying
Speaker 1: on services that you, as a consumer already subscribed to
Speaker 1: or already have access to. It's not giving you access
Speaker 1: to an outside antenna. It is literally the services you
Speaker 1: are getting as a customer somewhere else. Now, some people
Speaker 1: would argue you should just stick with Internet over or
Speaker 1: television over internet services, and you're a little more limited
Speaker 1: because you're not gonna get a lot of localized stuff
Speaker 1: this way. But at the same time, you don't have
Speaker 1: to worry about these weird carriage deals. And like I said,
Speaker 1: this doesn't have really that much to do with technology.
Speaker 1: It has to do with business and competition and the
Speaker 1: fear of competition in some cases. And it also shows
Speaker 1: just how messed up a world our content delivery system is.
Speaker 1: It is incredibly complicated, and it involves a lot of
Speaker 1: very big power players in this space, all working very
Speaker 1: hard to maintain their spot of dominance. It's getting increasingly difficult.
Speaker 1: As we've seen in the cable industry and the satellite
Speaker 1: TV industry, we're starting to see more and more users
Speaker 1: kind of ease off of those those standards. So we're
Speaker 1: seeing more chord cutters moving away from cable TV and
Speaker 1: away from satellite TV and moving toward either going over
Speaker 1: the air and just picking stuff up over antenna or
Speaker 1: using internet delivery systems, and I suspect we're going to
Speaker 1: see that trend continue. It may not mean that we'll
Speaker 1: see a huge adoption of these live TV over internet services,
Speaker 1: largely because I think many consumers are going to see
Speaker 1: them as being prone to the same problems that they
Speaker 1: see in the cable business, although the price might be lower,
Speaker 1: in which case people might say, well, I'm gonna I'm
Speaker 1: still gonna get channels I don't want, but I'm paying
Speaker 1: less for it, so that we may see that happen. Uh,
Speaker 1: We're also seeing, you know, a lot of resistance now
Speaker 1: with so many different competing services out there, this concept
Speaker 1: of I wanted to go to just internet, but when
Speaker 1: I add up everything, it's cost me the same amount
Speaker 1: as getting cable tv. You know, if I'm using Amazon
Speaker 1: Prime and Netflix and Hulu on top of some live
Speaker 1: TV service, that all adds up after a while, and
Speaker 1: it just shows that this really is a lot more
Speaker 1: complicated than just saying I'll take these three channels and
Speaker 1: you can leave the rest. Will we ever get to that.
Speaker 1: I doubt it, at least not not anytime soon. There's
Speaker 1: there's too many players with too large a stake in
Speaker 1: the game to go to that. And ultimately, we consumers
Speaker 1: are actually revenue generators and no company wants to limit
Speaker 1: the amount of revenue they create. Kind of kind of freaky,
Speaker 1: but as I understand, that's how business works. I don't know,
Speaker 1: I'm just a tech guy. Well, that kind of wraps
Speaker 1: up this conversation about how the delivery systems for television
Speaker 1: have changed over the years. I didn't really get into
Speaker 1: time shifting. That obviously is another big element that has
Speaker 1: uh complicated matters. That's of course, when you record a
Speaker 1: show and you watch it on your schedule as opposed
Speaker 1: to when it originally airs. VCRs were kind of the
Speaker 1: start of that, but DVRs really pushed it because then
Speaker 1: you had an easy way to get into a show
Speaker 1: and then bypass stuff like advertising, which brought the question
Speaker 1: the whole monetization model for TV and really shook the
Speaker 1: industry quite a bit. And uh, it's still one of
Speaker 1: the components of television that has people in the industry
Speaker 1: worried because if you suddenly take away the revenue generator,
Speaker 1: the whole concept of using ads to support the production
Speaker 1: of television, eventually you run out of money to produce stuff,
Speaker 1: and so we could ultimately find ourselves in a a
Speaker 1: low point in TV production. Some might argue that the
Speaker 1: reality television era was already evidence of that, although we've
Speaker 1: seen some pretty phenomenal TV come out since the reality
Speaker 1: television boom, so I don't know that that argument is
Speaker 1: entirely uh with merit. But who's to say. It's a
Speaker 1: complicated issue, and maybe one day I'll be able to
Speaker 1: get like a real expert in the industry to break
Speaker 1: it down in a way that we can all understand,
Speaker 1: because goodness knows, I still get confused. If you guys
Speaker 1: have a topic you would like me to cover in
Speaker 1: a future episode of tech Stuff, please let me know.
Speaker 1: Send me a message. The email addresses tex Stuff at
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Speaker 1: You'll see the schedule there. I hope you'll join us.
Speaker 1: We've got a cool chat room in there. You can
Speaker 1: join in on the conversation, make jokes, you know, ask
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