Marc Cuban Is Psyched About Cable

Cuban is PSYCHED! Hey, it’s not like he doesn’t have a reason to shake the pom-poms for cable, right? He’s also been pretty vocal about his belief that content owners will never give up the fees they get from cable and go to a free online distribution model.

Marc Cuban just told me advances in cable technology are more exciting than what’s happening on the Internet right now.

[From Marc Cuban Is Psyched About Cable - Media Money with Julia Boorstin - CNBC.com]

It’s pretty hard to argue with any credibility that cable is a hotbed of innovation. I look at my Comcast on demand and I’m struck by the fact that the big content developments they have to show off are used car listings. Who the hell cares?

It’s also worth pointing out that Comcast’s on demand services only work with their set top boxes, if you have a current generation flatscreen and want to take advantage of a cable card you will just get a tuner without any on demand capabilities. So much for the mythical cable technology advances that Cuban talks about.

Here’s the core problem with cable operators, they are operating a walled garden where any new content offerings have to come from them in order to reach the last inch between the TV and a person. It’s not just that the distribution network is closed but the development platform as well and this ensures that cable will never be a hotbed of content and application innovation.

Apple’s distribution system for the iPhone is closed but accessible, and by that I mean they have opened up the development tools and provided a low hurdle for access to the distribution capability that is the iTunes App Store. The result is that this is the place app developers want to be and because the flywheel is spinning more consumers want the device in spite of few hardware upgrades.

The cable companies, pretty much off of them, by contrast have little third party developer support and the integration of online to television content is weak, practically nonexistent. Video is the single hottest driver of audience today and the cable companies have done the bare minimum insofar as pursuing this an an online strategy.

To add insult to injury, cable companies have silo’ed themselves based on how content is distributed and have not invested in an integrated advertising sales effort, meaning the online initiatives run ad network content as often as their own sold inventory and because they believe they don’t know how to sell online they simply don’t try. This revenue suboptimization leads to a vicious cycle of underinvestment and experimentation that risks their core business.

Cuban may be “psyched” about cable because he has to given where his investments are but it’s hard, make that impossible, for any rational person to argue that cable has eclipsed the internet when it comes to innovation. Lastly, Cuban is wrong about one very significant part of the argument, bandwidth does not develop to meet applications but rather the expansion of bandwidth leads the development of applications that take advantage of bandwidth whether it be network or processing capability.