I've been mulling for a while over Mark Cuban's post suggesting that cable companies "save" Internet video. As usual, I applaud his grasp of the cold hard facts of the present. However, in this case, I was confused by the lack of historical context.
It took me a while, but I now think the missing history is a result of a particular bias and wonder how widespread it is in both non-Internet and Internet TV circles. Let's coin the term, "pipe bias" - the anachronistic thought dating to when pipes were costly, physical things, buried under the ground, that fixing/improving a existing pipe is more marketable than laying a new one. This bias is illustrated by one of Mark's primary propositions on why cable will preserve market position over the Internet: it's already in people's homes.
There are two fallacies implied by this argument: first that market position for pipes is mutually exclusive (i.e. getting Internet video necessitates giving up cable). Secondly, that market position for a pipe depends on matching the strengths of the incumbent. This is counter factual, ironically, to the history of the very pipe Mark contends will maintain hegemony. Cable got its start servicing people under served by the incumbent pipe (over-the-air), wooed a larger audience not with promises of picture quality, but signal consistency, and captured its currently large audience with more and better content choices. Even today, over-the-air has the advantage with regard to delivering HD (i.e. picture quality), but cable has the wins on all other current fronts. The lesson is: new models can win by simply doing something desirable that the old model couldn't even if they are a poor substitute for the old model
Let's put aside that two of coax's strong suits are coming under attack (see Sezmi and Verizon FiOS) and focus on the central competitive issue: an Internet based TV model has capacities that are foreign to cable.
1) The pipe is a multi-tasker - text, audio, pictures, video, holograms, and virtual reality. The TV experience is expanded into true multimedia
2) It is free on the margin. Once I've paid my general purpose Internet bill, access to most content doesn't cost any additional money (time spent watching ads, perhaps).
3) The catalog of content is limitless, whereas the broadcast model can only make available a certain number of programs per day.
4) It is fully configurable to a lifestyle, obviating the need for costly stopgap technology like time and place shifting (DVRs, Slingboxes).
5) The experience can be fully customized and adaptive, whereas cable by nature must tend towards mass media.
The market for Internet video will grow as creative people take advantage of these capacities to launch entertainment experiences that would "never work on cable", just like they took advantage of cable's bandwidth capacity to air programming that over-the-air couldn't carry. Furthermore, it's worth noting that cable's potential to match these capacities isn't enough. Creatives are an impatient sort and won't wait for cable to catch up to the Internet any more than they would have waited for over-the-air to catch up to cable (notable that the digital over-the-air transition will finally make possible a channel lineup larger than original cable lineups).
All that remains is to enable that creativity. Viewers need to be convinced to subscribe, advertisers need to be courted, infrastructure needs to be built, creative investment recouped. That is to say, business must be done. What made cable happen was the persistence of the door-to-door subscription salesperson, the person who negotiated to carry local stations over coax, the visionaries who brought us HBO, MTV, and the Food Network. Perhaps Mark is looking to those who worked their magic before from where he is sitting he believes the Internet has failed to cultivate their own magicians. From my perspective, on the court as it were, it's different. I look at Break and I see MTV. I look at Move Networks and I see high grade coax. I look at ffwd's personal channels and I see viral subscriptions.
On the other hand, the way Mark sees it should be a warning to anyone who thinks Internet video is just simply going to happen. Uh-uh. Hustlers made cable happen despite that over-the-air was good enough. So let's start hustling for Internet video, shall we? Or we may end up crying out for a savior ourselves.