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Dr. John Malone
Dr. John Malone, who formerly presided over TeleCommunications, Inc., (TCI, which became AT&T Cable, which then merged with Comcast) has decided that the Internet video free-for-all is too confusing and chaotic for Internet users, and told The Wall Street Journal‘s “D7: All Things Digital” conference attendees that online video needs a “content aggregator” to control and package online video for consumers. Oh, and by the way, they also need to charge for watching it.
Malone, who now runs Liberty Media, a programming distribution and entertainment company closely aligned with the cable and satellite television industry, said his company would be perfect for the job.
“We’d love to be the aggregator; so would the cable industry,” he said.
Malone also said the traditional model of television is changing, where networks and channels are becoming less important than individual programs. The worst mistake, in his view, is that content providers are giving it all away for free online when they should be charging a fee instead.
“Clearly advertising has proven to be insufficient, particularly in cycles we go through, to create robust product creation and distribution,” he said.
He pointed to Hulu as a failed model, because it doesn’t have enough ads to generate revenue to produce new content, and relies mostly on reruns and older shows that have been seen on television for years.
Malone compares the online video world to the early days of cable television, before cable programmers began exponentially increasing their rates in order to produce or purchase more “valuable” programming. Malone claims he understands the dilemma of subscribers who are used to getting content for free, but feels that has to change, and customers will pay for programming they want to see.
He pointed to sports programming in particular, noting the success of the $300 annual fee for the NFL’s Sunday Ticket package, which offers every pro football game to viewers.
Malone has a controversial history, however, being called the head of a “Cable Cosa Nostra” mafia-like family of industry executives and “cable’s Darth Vadar” by then Sen. Al Gore (D-TN). That was because Malone was a proponent of maintaining strict and unyielding control over programming, and extracting top dollar for the right to view it. Turning John Malone loose on broadband Internet video has every indication of becoming a repeat performance, where content is served through an online portal controlled by him or other industry executives, and at a price every American should refuse.
This is like the outhouse industry complaining we use toilets
It IS the outhouse industry.
The Cable industry has the money to get Congress on the side. It is up to every one of us to watch and stop this from happening.
And THIS from a man who had presided over a company who was the KING of providing only paltry service and very high prices!!
During the mid-1990′s, Malone’s TCI owned the then ONLY cable TV system here in town, and all they offered was an old (circa early-1980′s) 35-channel cable system, that only provided a maximum 30 channels of basic cable for $27.95 a month. And what did we get for that $27.95 a month? We got CRAPPY service (the cable would go out quite frequently, and there would be NOTHING the cable company would actually DO about it!!
But EVEN WORSE STILL, TCI typically TOOK AWAY popular channels like MTV, then New York Superstation WWOR (which was also popular here in Storm Lake at the time), and C-SPAN in order to add channels to this PALTRY system of their, including the launches of Fox News Channel, Animal Planet, and Cartoon Network, to name a few. MANY of us here in town, and elsewhere who were under TCI’s proverbial “thumb” found out that John Malone and his TCI comapny stood to make MILLIONS of dollars in these deals to have popular channels taken away in order to add these new channels!! Fox News Channel’s launch, for instance, resulted in a nationwide $10.00-per-subscriber WINDFALL for Malone and his cronies at the launch of Fox News!!
But when they took MTV off our cable system (which was one of my FAVORITE channels in 1996/’97), THAT was “the last straw” for me. I saved up enough money and bought a DirecTV system in March 1997. When I got that system hooked up and activated, I couldn’t have been MORE PLEASED with what IT offered at the time…a total of around 80 video and 31 audio music channels!! Granted, at that time, I couldn’t get ANY of the Sioux City, Iowa local channels on that system (I ended up using an indoor antenna, which allowed reception of some of those channels, but NOT ALL. I rounded out the broadcast network lineup by getting the Distant network feed of NBC. But I digress…
Here in Storm Lake, over the near year-and-a-half, TCI’s service for everyone else who still had cable wasn’t improving. They had kept “promising” digital cable TV, but they didn’t deliver on that promise until August of 1998, and that was ONLY because, in May of 1998, the people of Storm Lake were FINALLY FED UP with TCI’s PALTRY cable TV packages and LOUSY service!! The City of Storm Lake decided to venture into offering the people of our town to build a municipally-owned fiber-optic cable TV/high-speed Internet/Phone service to us. Under Iowa law, we had to pass a bond issue to get this passed. So, for the next several weeks in Spring of 1998 leading up to the May bond election, TCI did a campaign of its own in the local newspapers, saying that municipally-owned systems were “unfair” to the market.
Needless to say, TCI’s anti-municipal-cable campaign failed to get through to subscribers, and the people of Storm Lake PASSED the municipal fiber-optic system bond issue by over 70%!!
When that vote came up the way it did, it caught the attention of a South Dakota-based communications provider known as DTG. DTG decided to propose wiring the city of Storm Lake to its fiber-optic communications system. Again, the franchise vote on this PASSED by a LARGE majority!! And what happened with TCI?
IN 1999, TCI became AT&T Broadband, and in the Summer of 2000
, they FINALLY rebuilt their cable system to allow for more channel capacity, and to allow more analog and digital cable TV channels on their system. AND, they FINALLY brought back MTV to the lineup in September of 2000. I think that the prospect of DTG offering MTV & VH1 on their basic-cable lineup spurred AT&T Broadband to “get with it” and bring back popular channels.
It would take DTG about a couple years to wire the city of Storm Lake for their system, and in the meantime, DTG changed owners, first to McCloud USA, then later to PrairieWave. The PW system went online in 2001, and 2 years later, they added their own digital cable offering, and offered a HIGHLY-COMPETITIVE digital channel lineup to their subscribers!!
In 2002, Mediacom bought out the AT&T Broadband-owned cable systems here in Iowa, and the change of owners would have a PROFOUND effect on our service here in Storm Lake!! In 2002, Mediacom wired their system to their fiber-optic network of systems which ran through the Iowa Great Lakes region, and that meant we got EVEN MORE channels on both analog and digital cable TV, and FINALLY started offering their own high-speed Internet service that year as well, in order to compete with PrairieWave’s high-speed Internet service which had launched a year before.
As a result of this continuing competition between Mediacom and what’s now known as Knology, rates for services here in the Storm Lake area have been a little less than what they are in towns only served by Mediacom!! PLUS, Mediacom and Knology BOTH offere frequent lower-priced packages on a regular basis in order to get people to switch to their system.
In my opinion, competition between companies has worked to offer the people of Storm Lake MUCH BETTER Cable TV, High-Speed Internet, and Phone service than what was available before under only one provider!!
But, as we’ve seen earlier in the story, even the PROSPECT of bringing a competitor into a town CAN have a POSITIVE impact on what the incumbent system does!!
This is precisely why I favor allowing smaller communities, as well as large cities, to offer their own municipally-owned cable TV/high-speed Internet/phone services in their towns!! Even if they don’t ultimately get the municipally-owned system in their towns, it can help bring another company into a town to compete with the incumbent provider, and that means a WIN-WIN situation for ALL subscribers in a town!!
If the incumbent “monopoly” providers WON’T offer new state-of-the-art communications serices to subscribers, then I think it SHOULD be WELL WITHIN the RIGHTS of municipalities to offer their own communications services to compete with the incumbent!!
[...] advocates, they are providers who don’t want people using “my pipes for free,” or cable interests who want to “organize” online video around a model they own and control, or who simply [...]