- The Washington Times - Friday, January 23, 2009


It’s been less than a year since Blu-ray triumphed over HD-DVD in the high-definition home-theater sweepstakes, and already the next generation of technology is shaping up: streaming video. In fact, it’s here.

Netflix changed the way Americans rent movies ten years ago, with the subscription DVD rental business,” says Steve Swasey, vice president of corporate communications at Netflix, “and we want to do it again with streaming.”

Netflix has been streaming movies directly into people’s TVs for the better part of a year. “The Roku Netflix player [started] in May,” Mr. Swasey says. “Xbox started in November, Samsung and LG [Blu-ray players] in October, TiVo in December.” With all of these devices, movies stream directly onto the television. With nothing more than the click of a button and a high-speed Internet connection, one can watch any of the 12,000 titles Netflix has available to watch instantly.

Netflix isn’t the only company to make the move into immediate home entertainment. Hulu.com was formed by NBC Universal and News Corp. (the parent company of 20th Century Fox) to showcase its television programming and movies on a Web site it controls.

The Criterion Collection now offers a small, but growing, portion of its prestigious film library on its Web site for immediate viewing, some for free, some for a small fee. YouTube recently partnered with MGM to show a select portion of their feature film library online.

But those services all stream onto PCs; what about home viewing?

While Netflix might not be the first outfit to make movies instantly watchable in your living room — cable companies have used “on demand” services for quite some time, allowing customers with digital cable to access both free and pay-per-view libraries — it has, by far, the largest library and platforms across a number of different devices. At the Consumer Electronics Show this May, LG introduced a Broadband HDTV that connects directly to the Internet for the purpose of streaming Netflix movies.

So the future is here, right? Not so fast.

“Most of the time it’s DVD quality,” says Mr. Swasey of Netflix’s streaming content. “Sometimes if you have a slow connection or DSL line, it might be VHS quality.”

The quality of streaming video remains markedly inferior to the actual discs Netflix ships; upconverted DVDs and Blu-ray discs both far surpass the picture quality available on streaming services. Also, streaming — limited to stereo sound — fails to take full advantage of surround sound and omits most of the extra features that have made DVD so popular over the years.

“The disc-based format is going to grow for five to ten more years at Netflix because of the versatility of it,” says Mr. Swasey. “There’s more information on the disc than you get when you stream — you know, the director’s commentary and the special features and the previews and all that stuff - you don’t get that when you stream, you just get the movie credits. We think Blu-ray’s got a good future ahead of it.”

Streaming all of that information — the high-definition picture, the special features, six-channel surround sound — is no mean feat. It can’t be done at less than seven megabytes per second, and could take as many as 10 megabytes per second. Simply put, the infrastructure isn’t there to support HD streaming right now, according to Ted Ritter, a senior research analyst at Nemertes Research.

“The core and the metropolitan area, looks like from our projections that there is enough capacity and enough future potential capacity to support things like streaming HD,” says Mr. Ritter.

(Corrected paragraph:) “Fiber optic cable is the reason for this increased capacity; it has an almost limitless ability to transmit information and its capabilities are doubling roughly every 18 months,” Mr. Ritter added.

There’s a catch, however: last mile access.

“The area where we see the restriction, and that’s where we talk about demand exceeding supply, is really that access layer, which is the last mile,” says Mr. Ritter. “It’s your DSL connection out to your house or to your building. The reason why there are restrictions there is that it’s sort of the inverse, the fact that less than three percent of North American last mile access is on fiber. … If you have copper out to your house, whether it’s copper phone wire or copper cable, there are just physical limitations in how many bits you can move through it.”

Fixing this doesn’t necessarily mean ripping out the cable laid in every house and apartment building in the country. “We’re talking about fiber to the premises,” he says. “Possibly fiber to the street corner, and that’s what a lot of the cable companies are doing, they’re still leaving the last 100 or 200 feet copper, but running fiber very close.”

None of this will be cheap. Getting America on par with countries like Japan and South Korea - countries that have deeper fiber penetration, resulting in a faster and cheaper Internet capable of doing things like streaming high definition programming - could cost upwards of $90 billion.

More is at stake than the ability to watch HD movies without ever leaving the comfort of one’s home. “If the bandwidth is there, applications will come along,” says Mr. Ritter. “And if the bandwidth’s not there, it’s going to constrict innovation.”

During the presidential campaign, President Obama made it a point to argue that it was unacceptable that America is 15th in the world in broadband adoption, and in December he promised that part of the economic stimulus package would go to building up the high-speed infrastructure.

But the stimulus bill passed by House Democrats dedicated only $6 billion to building up high-speed infrastructure, a fraction of the amount necessary for truly universal broadband access.

The future might be around the corner, but it’s not here yet.

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