This appears to be the core of the article:
"All the pieces are here now from an infrastructure perspective," said Scott Sahadi, vice president of corporate development for Kontiki. "The challenge now is around usability. How do you make it easy for people to access high-quality video content over the Internet while satisfying the rights of content owners and keeping networks safe from viruses? That's what we're trying to do."
Several companies have been developing the infrastructure for delivering video broadcasts. That ranges from software to stream video through Internet congestion to the network bandwidth and infrastructure. Additionally a couple companies are working on end-user devices, such as Linksys developing a standalone box that allows a TV to tune to Internet video broadcasts. The next step would be to develop a service that integrates a wide range of video content making it easy for customers to access and enjoy.
A beginning service is the recently revealed video capabilities of iTunes and the latest iPod.
Clearly, as the article suggests, the content providers (that is, the producers of the television shows) are leery of whether new distribution channels will kill their business model. They're no doubt looking at what happened to the music companies when rampant filesharing of MP3 files nearly did them in.
What has kept that fate from occuring so far is the bandwidth requirements for video. Video takes much more data than does audio, and so far the end-user available bandwidth has been relatively small. Okay, so "broadband" is gaining wider acceptance all the time but the generally available bandwidth is not sufficient for real time video delivery. The rule of thumb bandwidth requirement for television-quality video is 1.5 megabits/second, which is somewhat beyond the typical broadband connection of today. If fiber-optics were installed to everybody's home then the story would be very different.
This has been a long time coming.
In 1997 I worked for my last startup company - VXtreme. We developed software for streaming video over the Internet. This was in 1997, and there were three companies providing software for this niche. Ourselves, Real, and Microsoft. And then Microsoft bought us out, which gave me an opportunity to visit Microsoft's campus and see something very interesting.
Microsoft bought VXtreme, melding VXtreme's software with the NetShow video player, and that eventually became the Windows Media Player. They made it very clear, their long term strategic vision included video delivery over the Internet. At the time their own software wasn't up-to-snuff with the Internet of that day, when 33.6kbps modems were all the rage and the 56kbps war hadn't yet occurred. Microsoft told us they'd assumed a faster up-take of DSL connections, so hadn't put much work into video compression in designing NetShow.
One highlight of the visit was when they took us to a "lab" on the Microsoft campus. This lab, the "Microsoft 'Home'", was a small apartment lodged inside an office building on the campus. It was an interesting contrast to one moment be walking through an office building, and the next to be inside a cozy and nicely appointed "home". They purposely set this up as a testing ground to see how different products would work in a typical home setting. One important point for this demonstration was the "home" had no connections to the Microsoft campus network, and instead had only a DSL connection to the Internet. In 1997 DSL was generally unheard-of, but I suppose if you're Microsoft you can arrange for anything.
You have to understand that I was with other VXtreme employees, so we were all very steeped in the difficulties of sending quality video over the Internet. While in the Microsoft Home, they showed us what their video software would do if they were given sufficient bandwidth. Wow, was it georgous. In 1997. Of course some of the georgosity came from the big screen TV, but it was full frame rate high quality video, delivered over some kind of consumer-quality network connection.
I think the television companies have little time left. The end-user bandwidth availability is improving drastically. I've seen a few articles talking about 20mbps service in some cities. Maybe that's a shared bandwidth service like cable TV, but really all that's stopping high bandwidth availability is the communication medium. If it were all fiber, or perhaps the WiMax thingy will work well enough, then all the bandwidth we could want would be at our fingertips.
The software geeks of the world have shown they can make software that will change the world.
I see the other respondant to this article is talking about bittorrent. I'll say that I haven't used bittorrent but the introduction page sure makes it sound interesting. As a technology it solves one of the technological problems. Namely, if you're offering large file for distribution, then the bandwidth charges will kill you if the file were to become popular. Bittorrent distributes the load across the network so that your site isn't killed.
But I don't think bittorrent by itself is the solution. The technology could prove useful, but then so can the Akamai network. The solution will be in a fully integrated service.
For example take the iTunes video service. You do a few clicks, and suddenly your credit card is charged another $1.99 and 20 minutes or so later you've got another show downloaded to your computer.
It just so happens I'd downloaded a bittorrent client yesterady. So I decided to try it out. It was suggested to try the torrent spy service. That's a good recommendation, because one large problem with bittorrent files is to find them. The Torrent Spy site helps you do so.
I found a few interesting files, and am in the process of downloading them. This is not nicely integrated like iTunes is, as it takes several steps. First you must find the "TORRENT" file and download that. But that's just a small file with instructions that the bittorrent client uses to do the actual download. After downloading the TORRENT file you use the bittorrent client, as it to open the torrent file, and it starts the download. But, uh, I see here the download speed is not terribly good. I've got a 384kbps connection, with two thingies currently being downloaded, one is at 13.8kb/s and the other at 4kb/s. One of the things I'm downloading is a DVD, a commercial DVD that's been ripped, and it's going to take somewhere around another 10 days to download at the current rate. Somehow I don't think I'll wait that long.
I don't know what problem bittorrent is trying to solve, but it clearly is not ready for prime time.