[M4IF Discuss] hourly usage fee for MPEG4

[McClenny, John Doc]

> -----Original Message-----
> From: Ben Waggoner [mailto:ben   interframemedia.com]
>> Ken,
> 
>     The question is whether or not content providers get more than
> $0.02/hour out of using MPEG-4 instead of alternative technologies.
> 
>     Take, for example, digital cable and satellite companies. 
>  If MPEG-4
> allows them to double their number of channels, it'll let 
> them add a lot of revenue, by increasing the number of channels and 
> pay-per-view orders they get.

MPEG-4 in the cable/satellite world must justify not just the cost per hour,
but the cost of replacing the existing MPEG-2 STBs.  The cable guys aren't
bandwidth depleted like the satellite people are and have a larger installed
base.  On the other hand, they are more capable of trying experiments in
limited geographical areas than DBS.  If the Echostar/DirecTV merger
happens, MPEG-4 would have a brief window of opportunity as the existing
STBs will be junked to support the new merged service.
MSOs/DBS people can live with one time capital charges that get depreciated
across a long time period.  Hourly charges directly impact cash flow and are
a bad thing that will keep many people from seriously considering MPEG-4.  
Only in the bandwidth constrained DSL world will paying to get the maximum
video quality in a 1 mbps stream make economic sense because there are not
viable alternatives.  It is not obvious if there is DSL providers could
compete against existing TV sources.
> If it allows them to save money in set top boxes by 
> using commodity
> chips, that can also add up quickly ($30/year is less than 
> the real cost of modern digital STBs).

>     If MPEG-4 can't provide that kind of value, it isn't 
> going to work one
> way or the other.

Yep.  Won't even be in the game to be evaluated.
Will MPEG-4 be relegated to places where lower cost alternatives exist?
Where are those places?
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