Maxwell Wessel makes the case that the status quo of today’s entrenched cartel of TV networks and cable companies could be disrupted by an alternative to cable internet: Wimax.
Maxwell Wessel, The Inevitable Disruption of Television
For about a year now, I’ve been warning producers that disruption is coming. And for about a year now, the conversation has ended the same way. Bundling good. Internet expensive. Studios infallible. If I can pull myself together before boarding a plane, I always respond with Rogers’ observation. The ecosystem will develop. But after this last trip, the standard response wasn’t enough. I felt compelled to not only to speak in generalities, but to find an actual solution. So I did.
As soon as I landed in Boston, I committed to finding a substitute for my bundled internet / television package. Something that would break away from the overpriced value chain. And in just one evening, I found my solution in the form of 4G wireless connectivity.
With a little bit of research, I found that I could subscribe to Clear — a disruptive internet service provider that leverages 4G technology instead of an expensive fiber-optic network — for just $49 a month. They would send me a small device (1/2 the size of a dollar bill) that would create a small wifi network wherever I took it. It would provide me with unlimited internet, allowing me to both cut the Comcast cord and reduce my monthly bill with my smartphone carrier. It wouldn’t be as fast as my Comcast subscription, promising about one third the speed of my existing connection, but it would theoretically be fast enough. So I ordered it.
In two days, I had a broadband connection and no Comcast bill. I can stream television shows wherever I am, take my high speed internet with me when I walk out of the door in the morning, and pay about half of what I did before (even including the cost of Hulu Plus).
For most people, this solution probably isn’t quite good enough. 4G internet speed is noticeably slower than wired broadband and there isn’t nearly as much content available through Hulu, Netflix, and Amazon as there is housed within a 150 channel Comcast bundle. But as compression technology improves, the 4G infrastructure is expanded, and the quality of internet video improves, my guess is the solution will appeal to more and more consumers. It’s disruption in its most basic form. And it doesn’t hurt my thesis that Time Warner, Comcast, Cox, and the Dish Network represent four of America’s 19 Most Hated Companies. People are primed to embrace disruption in telecommunications.
4G is not going to cut it for most people, even for me. I have 4G on my iPhone, and I used it as a connection when in transit or hotels that charge for internet access. But it’s too slow for watching Netflix, in general. LTE-Advanced, also called 4.5G, on the other hand is theoretically capable of up to 1 gigabit, around 10 times faster than 4G, but in practice it will only deliver 15 megabits per second, only a hair better than 4G’s normal 12 megabits.
But the thinking is right. Imagine a hypothetical 5G standard, which actually delivers 1 gigabit/second. I am predicting that we will see that come about in the next five years because the adoption of high performance mobile devices — smartphones and tablets — is where the action is today, and the benefits of always on connectivity are so great.
So, then we will see the end of the cable internet choke point, and the collapse of the old TV cartel. Yes, today you need the cable connection anyway, so forcing people to buy the triple-play of TV, internet and phone service seems to make sense. But everyone has a cell phone, and uses that preferentially, so the phone line via cable is superfluous. Once the internet via cable becomes superfluous the TV cartel will break down.
We will be getting our internet connection from our mobile devices, and pumping the video and audio stream to the dumb TV in the corner from there. No cable boxes. No cable companies. No cable bills. No cable TV networks.