This article originally appeared in TidBITS on 2007-06-04 at 5:05 p.m.
The permanent URL for this article is:
Include images: Off

I Want My *TV: Comparing Video Acquisition Methods

by Adam C. Engst

We're in the middle of a sea change in how we acquire and watch video, whether serialized television shows, must-see sporting events, blockbuster movies, quirky documentaries, or even homemade video clips. It has become wildly confusing, with choices ranging from the old rabbit ears to the iTunes Store. I've been thinking about the topic for quite some time with an eye toward trying to compare all the possibilities in terms of cost, show selection, and more. This started as a personal project, but as I delved into the research, I realized that what made sense for our family was by no means ideal for everyone. And so I increased my scope in an attempt to lay out for everyone the possibilities and to come up with recommendations for those whose viewing preferences differ from ours. Sit back, relax, and join me on a long tour through our video-filled world.

The History of Video -- For many years, and for all of my rural childhood, over-the-air broadcast television was all that was available, though cable TV and, later, satellite dishes increased the number of channels that could be received. At some point in the 1980s, the VCR appeared, enabling both time-shifting and an aftermarket for movies, prompting MPAA head Jack Valenti's famous quote [1], "I say to you that the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone." Needless to say, Jack Valenti couldn't have been more wrong, with the VCR and then the DVD player generating a vast source of new revenue for the movie and television industry via post-release sales. In 1998, the slim size and durability of DVD discs also made possible the online DVD rental company Netflix [2] and a number of smaller and more focused competitors.

As the original Napster caused panic among the music studios, the movie industry watched carefully, initially insulated from peer-to-peer copying by numerous technical limitations. Computers in the mid-1990s lacked sufficient processing power to encode and decode video at necessary speeds, hard disks weren't sufficiently large to store reasonable amounts of video, and too few people had sufficiently fat broadband pipes to download full-length movie files. Needless to say, those limitations fell by the wayside quickly. Aided by the breaking of the DVD copy-protection approach, the Content Scramble System [3] in October 1999 by Jon Lech Johansen and two others via the program DeCSS [4], full-scale copying of DVDs became possible and indeed commonplace.

Legal downloading of video wasn't far behind, with numerous video-on-demand services springing up for people with Windows PCs. But none put all the pieces together (wide selection, good business model, simple user experience) until Apple introduced video to the iTunes Store, making it possible for individuals to purchase full-length movies, first-run television shows, short films, and music videos for playing in iTunes on either a Mac, a PC, or a video iPod. Although Apple's selection was initially slim, significantly more videos have appeared on the iTunes Store since, and it's clear from sales (see "Disney Sells 125,000 Movies in First Week on iTunes Store [5]," 2006-09-25) that the Internet will be a popular method of acquiring video.

Perhaps the most unexpected challenge to the studios and networks came, however, not from illegal downloads, but from video-sharing sites like YouTube [6] and Google Video [7], which attract tens of thousands of homemade video uploads daily, and many millions of viewers. Though no money changes hands, the time viewers spend watching short clips on sites like YouTube (now owned by Google; see "Google Buys YouTube for $1.65 Billion [8]," 2006-10-16) is time that won't be spent watching traditional television and movies.

Setting the Stage -- All this raises the question - what's the best way to acquire video entertainment these days? And that in turn asks the question of what "best" means. I think people determine how they'll acquire video in a number of ways:

There's one additional variable that most people probably don't think about, but which comes into play whenever time- and place-shifting are discussed: legality. Almost by definition, time- and place-shifting require a copy to made, whether it's on a VHS tape or an iPod. In some cases, that action may be entirely legal, whereas in others it may be fraught with legal liability. (At least the FCC's controversial "broadcast flag [10]" rule, which would have prohibited the manufacture of hardware lacking copy prevention hardware to prevent time- and place-shifting, was struck down in 2005 before it went into effect.)

Let's rate each of the following methods of tuning in according to these criteria.

Broadcast Over the Air -- To many of us, with our high-speed Internet connections, over-the-air broadcast television may seem a quaint image of the 1950s, with images of Dad up on the roof adjusting the antenna to improve reception of the big game. The reality is that as of December 2006, about 13 percent of U.S. television households - roughly 15 million homes - still rely on broadcast TV, as do higher percentages of viewers in other countries. And why not? Availability suffers from physical barriers and the selection of shows can be restricted by limited channel reception. But at the same time, advertising-supported broadcast TV is free to receive; provides the latest network news, major sports events, and most commonly watched shows; and doesn't restrict viewers' ability to time-shift. Place-shifting is tougher, since it requires first recording shows to a digital format, but I suspect that most people content with broadcast television aren't the target audience for place-shifting hardware like the iPod.

It's worth noting that a digital video recorder (DVR) like the TiVo significantly improves not just the viewer's ability to time-shift, but also broadcast TV's show selection. That's not because it can pull in shows that weren't there before, but because it enables more efficient mining of shows that are broadcast at odd times.

For those in the United States, it's particularly worth noting that as broadcasters switch from old analog channels to new high-definition digital channels, they can offer more channels. The switch must be complete by 18-Feb-09, so by that point you'll need a converter to use existing analog televisions, or you'll need to buy a new digital TV (see the just-released second edition of Clark Humphrey's "Take Control of Digital TV [11]" for help with that process). The Consumer Electronics Association estimates that 99 percent of U.S. television households can receive one digital channel; 89 percent can receive five or more. The Consumer Electronics Association's AntennaWeb site has an interesting FAQ and an online "interactive antenna mapping program" that provides advice about which stations (digital and analog) you are likely to receive, along with a map showing exactly how to orient your antenna. You can also check Antenna Direct's list of HDTV stations [12] to see a long list of over-the-air HD stations. The Canadian HD experience for over-the-air broadcasts is similar; see HDTV Digital Home [13].

Cable/Satellite -- Broadcast isn't yet dead, and satellite TV is attracting ever more subscribers, but cable TV still rules, at least in the United States, where about 60 percent of households (65.6 million homes) have cable, and another 27 percent (30.1 million homes) subscribe to satellite TV. Worldwide, there are 1.2 billion television households, but only about 30 percent of those rely on cable TV. Although the average price for basic expanded cable is about $41 per month in the United States, both cable and satellite subscribers report paying an average of $58 per month thanks to extra services, and it's easy to see bills into the $80 per month range. Despite those steep monthly charges that generated $68.2 billion for the U.S. cable industry in 2006, advertising is still prevalent, accounting for another $23.8 billion in revenues. If we know that the average monthly bill is $58, and the average American watches (gasp!) 4.5 hours of TV per day [14], that puts the cost of cable or satellite TV at only $0.43 per hour. (As an aside, a recent study [15] found that watching 3 or more hours of TV per day puts teenagers at increased risk of learning difficulties.)

Cable and satellite TV fare very well when it comes to freshness, with plenty of real-time news, sports, and current programming, and they also do well in terms of show selection. However, the massive amount of programming available is applied in shotgun fashion, so you can easily find yourself flipping through hundreds of channels without finding anything you want to watch. The sheer number of programs is overwhelming, making a DVR like the TiVo - or even the less-capable models rented out by the cable/satellite companies - essential not just for time-shifting (which is legal), but also for separating the wheat from the chaff. As with broadcast TV, place-shifting requires extra hardware and fuss; few people will go to the effort of extracting video from a TiVo to watch on an iPod.

Purchasing Pre-Recorded Video on DVD -- The market for pre-recorded video started with the VCR but has been almost entirely supplanted by DVD. Although VCRs and DVD players are essentially equally popular, with between 75 and 82 percent of U.S. households owning one, the VCR is in significant decline, with sales of DVD players outstripping VCRs 40 to 1 globally. More telling, of the $24.2 billion spent on pre-recorded content in the United States last year, VHS claimed only $100 million (way down from $3 billion in 2004). 2006's total take of pre-recorded content was, in fact, lower than both 2005 and 2004, with the only increased portion coming from a $300 million jump in DVD sales. And even that growth was largely fueled by the increase in sales of TV show collections, which made up 18 percent of market in 2006, up from 8 percent in 2002. Also, TV DVDs cost an average of $41 for a full season, in comparison to an average price of $17 for a DVD movie.

The per-minute cost of purchased content on DVD varies significantly, from just under 4 cents to nearly 17 cents, with the lower costs coming for large bundles that bring together multiple seasons of a TV show or a movie and several sequels. That works out to between $2.40 and $10.20 per hour, and if all you watched was pre-recorded video, even assuming only 2 hours of watching per day, that would still come out to between about $140 and $600 per month. Obviously, dropping the average watching time to only 1 hour per day halves those numbers, but it's still much higher than cable or satellite.

However, although purchasing pre-recorded content may not make sense for one-time viewing, children often watch DVDs many times, reducing the cost with each viewing. I couldn't find stats to back this up, but I also believe that people in their 20s, who grew up squarely in the generation that could watch videotapes or DVDs multiple times, are still more likely to watch TV shows or movies multiple times as adults. That's in contrast with those of us who predate the VCR generation, and remember when it was a big deal because "The Wizard of Oz" came on TV each year. (Tonya and I own only a handful of movies that we watch multiple times, with each viewing often separated by years.) Plus, even for people who don't plan to watch a purchased DVD many times, the DVD has value as a collector's item.

The selection of shows is good, but not great, because back catalogs are still being transferred to video, so, for instance, not all seasons of the 1990s TV series "Northern Exposure" are available yet. It's not just TV shows either; reportedly, only about 50,000 of the 500,000 or so movies listed on the Internet Movie Database have been digitized and made available on DVD. Plus, the lag time between the airing of new TV shows and the theatrical release of movies and the subsequent release of the DVD hurts both show selection and the freshness of available content. Time-shifting is inherent in the medium, since you can watch whenever you want, but place-shifting is legally possible only if you own a portable DVD player or DVD-equipped laptop. Ripping physical DVDs to avoid carrying them on a plane or to watch them on a video-capable iPod is perfectly possible with the open-source HandBrake [16], but ripping is a violation of the Digital Millennium Copyright Act (DMCA), despite the fact that place-shifting is legal in all other situations.

Netflix and Online Video Rental Services -- Purchasing pre-recorded content may make little sense for one-time viewing, but renting DVDs is an entirely different cost proposition. A Netflix [17] subscription costs between $5 and $48 per month, depending on how many DVDs you want checked out simultaneously. Other online video rental services offer similar plans, but with nearly 6.8 million customers, Netflix is by far the largest, with Blockbuster a distant second. One advantage of the Blockbuster Total Access [18] service is that you can also pick up DVDs at a local Blockbuster store if you can't wait for snail mail delivery.

It's hard to calculate Netflix's cost on a per-hour basis, but on an "unlimited" plan, the limiting factor is how quickly you can watch a DVD and return it to Netflix. Assuming an average turnaround time of 7 days, a 1-out unlimited subscription equates to 4 DVDs in a month. Four DVDs of a TV series could reach 16 hours or more, whereas four DVDs of short 80 minute movies would be about 5.2 hours. Thus, the cost-per-hour for a month ranges from $0.63 to $1.92 for the 1-out plan. The 2-out plan is a bit cheaper, and starting with the 3-out plan, the costs settle into the range of $0.38 to $1.15 per hour.

In terms of show selection and freshness, Netflix is nearly as good as the option of purchasing pre-recorded video - the difference coming in adult content, which Netflix doesn't carry. Other services specialize in it, however, so the overall category of online video rental services is comparable. Another slight ding for Netflix's show selection is that popular new releases generate waiting lists, so you may need to wait a little longer to receive a hot new movie.

Netflix brings a new twist to the issue of time- and place-shifting. You can of course watch any DVD you've received from Netflix whenever you want, though ripping it to a hard disk for later watching violates not just the DMCA, but Netflix's own Terms of Use [19]; the same goes for place-shifting. It's hard to know if Netflix added the no-ripping clause to forestall lawsuits from Hollywood or if ripping would present a business problem for Netflix. Someone who was ripping to enable time- and place-shifting would probably churn DVDs more quickly than anyone other than a dedicated TV watcher, costing Netflix more in postage and handling.

P2P File-Sharing Services -- Of course, the fact that ripping DVDs violates the DMCA has in no way prevented it from happening. Nor, now that many people have sufficient bandwidth to download full-length movies, has the legal liability prevented massive sharing of video online via peer-to-peer file-sharing services. The appeal? Downloading is free, or at least no additional cost beyond the price of a broadband connection.

However, P2P downloading makes users pay in other ways. Finding and downloading particular movies or TV shows is time-intensive and often fraught with frustration and failure. Problems include being unable to find the desired show or movie, download times measured in days or weeks, ending up with a foreign-language dub, poor audio or video quality, and more. The selection of shows is impossible to predict, since the availability of a given show varies constantly with who's online. The freshness of content can be good, since users are more likely to share the latest releases than old movies, but there's no guarantee that you'll be able to download the latest episode of anything.

Not surprisingly, most of the users of the P2P file-sharing services are young people with more time than money, and for whom downloaded video has a whiff of danger and the cachet of rebellion.

iTunes Store -- Not all video downloads are inherently a violation of the DMCA, and thanks to Apple, it's now possible to purchase a variety of TV shows and movies from the iTunes Store [20]. Or rather, it's possible if you have an iTunes Store with video in your country, if you have a modern computer running iTunes, and if you have a broadband connection. Lots of people do, but far fewer than those who can, for instance, receive cable or satellite TV.

The selection of shows is, on balance, poor. Apple is adding shows and movies all the time, but in comparison with the wealth of video content available in any other forum, the iTunes Store doesn't yet match up. What it does have is quite fresh, though, with new TV shows appearing quickly, along with first-run movies, and some sports shows.

Calculating the cost of video purchased from the iTunes Store is both easy and difficult. TV shows, whether they're 30 or 60 minutes long, cost $2. And movies cost either $15 for recent releases or $10 for older movies, with running times varying between about 80 minutes and 140 minutes. Purchasing a multi-pass for 16 episodes of something like "The Daily Show with Jon Stewart" drops the price by about 40 percent; buying a season pass to a TV show cuts the price by 5 to 40 percent (usually about 17 percent). So to return to the cost-per-hour calculation we performed for pre-recorded video, we'd end up with a range starting at $1.25 per hour for an hour-long TV show purchased as part of a multi-pass and going all the way up to $11.25 per hour for a first-run movie that's relatively short. At 2 hours per day (less than half the national average), the monthly fee would range from $75 to $675.

As with pre-recorded content, if you fall into the 2 hour per day category, getting all your video from the iTunes Store makes no financial sense, but there are other advantages, such the ease of getting just what you want, the ease of moving video to an iPod, and the ease of watching downloaded video on a television via Apple TV.

Of all the methods of acquiring video, downloading from the iTunes Store is perhaps the friendliest to time-shifting, since you can at any time decide what you want, buy it, and be watching nearly instantly. (To be fair, Netflix now offers the similar Watch Now service [21] with some of its movies, but it requires Windows XP-only software to handle the Microsoft DRM.) Place-shifting is easy and legal as well, but only if you want to watch on a laptop or video-capable iPod.

Competing with the iTunes Store is Amazon Unbox [22], which like the Netflix immediate download approach, works only with Windows and broadband-connected Series2 or Series3 TiVo units [23]. Purchasing TV shows and movies costs essentially the same as the iTunes Store, though Amazon Unbox also offers movie rentals for between $2 and $4.

Online Streaming from the Television Networks -- In recent months, the major television networks have started to change their role from pure providers of content to distributors as well, thanks to the Internet. Episodes of a number of current TV shows are provided free via the networks' Web sites, though with ads that cannot be skipped. The quality of the players varies a little and suffers a bit at full screen, but seems generally fine over a broadband connection, and it works fine on the Mac. Both time-shifting and place-shifting are supported with this approach, although both have some limits. The networks don't provide full back catalogs of shows, so you may have to watch on a fairly regular basis or purchase missed shows from the iTunes Store. And place-shifting is inherent in the system... as long as you're watching on a laptop and have a broadband Internet connection available. As far as I can tell, there's no easy way to record these video streams for later viewing on a video iPod.

In some ways, online streamed TV provides what so many cable and satellite subscribers have wanted - the ability to pick and choose without feeling as though you're paying for the vast amount of dreck that's available on the rest of those 200 channels.

It's also worth mentioning Joost [24], a company founded by the guys who started Skype. Currently in invitation-only beta, Joost promises to provide streamed video. Unlike the networks, it's using a peer-to-peer system that spreads the bandwidth load, but which may suffer quality of service problems, since the bandwidth cannot be guaranteed. It requires special software that's available for Mac OS X along with Windows XP and Vista. Joost is ad-supported, with short ads that are inserted at fairly frequent intervals into the programming. Not having seen Joost in person yet, I can't provide more details, but I imagine it will be public soon enough.

YouTube -- The sea change that's threatening to engulf mainstream video is led by Google's YouTube [25], although there are a number of competing services, including Google's own Google Video. What's different about YouTube is that its many millions of videos are contributed for free by users of the service, although there has been a spate of partnerships [26] with groups like CBS, the BBC, the NBA, and the Sundance Channel. It's almost impossible to compare YouTube's content with what you would find anywhere else, because almost all of it is short, amateurishly produced, and poorly displayed in a tiny box in a Web page. (Apple just announced that YouTube content would become available on the Apple TV by way of a free software update later this month, but the video quality doesn't appear to be improved - in fact, you're taking highly compressed Web video and enlarging it for a widescreen TV, so the quality is going to be less than ideal.) But that's the charm of it as well; it's easy to find yourself watching utterly unpredictable bits of video after idly clicking into YouTube from a Web link.

While it may not be possible to compare YouTube to mainstream video, there's no question that TV networks and providers are extremely nervous about the rise of YouTube. We all have a limited amount of time to watch video (though it's apparently more limited for people like me than for the average American), and time spent watching YouTube takes away from time spent watching normal TV. What's not to fear? It doesn't cost anything for people to watch videos on YouTube, and it's unclear if even Google will be able to come up with a way to make YouTube earn its bandwidth keep. YouTube is not a future that TV executives like to dream about at night.

Personal Experiences -- The genesis of this article came from my attempt to bring coherency to the video landscape for our family. From the point Tonya and I left for college in 1985 until 2001, when we moved back to Ithaca, we had only over-the-air TV, either because that was all that was available or because we weren't willing to pay for cable or satellite TV. We've always made heavy use of time-shifting, first with a VCR (supplemented for a while with a short-lived electronic program scheduler called a VideoGuide; mentioned in "Macworld Superlatives [27]," 1995-08-21), and then with a TiVo, which we've covered in TidBITS numerous times.

When we returned to Ithaca in 2001, Time Warner made it easy to add digital cable TV to our cable-modem subscription, and it was fun for a while to let the TiVo loose among the hundreds of channels we received. But having all that video available on the TiVo proved stressful, since we felt the need to keep up in order to prevent older unwatched shows from being deleted. We realized that we were watching TV more - 7 to 10 hours per week - just to manage the TiVo's contents, and worse, we often ended up watching shows that we either didn't reliably enjoy or found stressful before bed. It was fascinating - we were drawn like moths to a flame, to an activity that required significant time and money and often left us either slightly disgusted about how we'd spent the time or too wired to sleep. So in December 2004, we dropped cable TV and promised ourselves that we'd spend the money we saved on just the media that we wanted, whether print books, purchased DVDs, a Netflix subscription, audiobooks that we used to help us fall asleep (see "iPods Defeating Insomnia [29]," 2005-02-28), support for podcast radio shows like This American Life [30] or On the Media [31], or donations to the local public library [32].

So as much as this appears to be downright un-American, we're down to 3 to 5 hours of video per week. Thanks to a Netflix subscription, when we choose to watch video (on my MacBook or Tonya's MacBook Pro, since we don't own a standalone DVD player), we're catching up on TV series that we missed during the many years we could get only over-the-air broadcasts, along with the occasional movie (we've never been big moviegoers either). Tristan's choices tend toward naval history documentaries left on the TiVo and Looney Tunes DVDs he received for Christmas. Occasionally we watch YouTube clips I've heard about from friends, and tons of great lectures are available from the Internet too, such as the discussion between author Michael Pollan (of "The Omnivore's Dilemma [33]" fame) and Whole Foods CEO John Mackey. But what's important is that we're choosing what to do, whether watching video, reading books, listening to podcasts, discussing the day's events, or participating in other indoor sports.

What About You? -- I'm fine with the fact that we're statistical outliers in terms of the amount of video we watch. But if you're trying to figure out what of this cornucopia of options makes the most sense for you, here are a few thoughts, based on viewing patterns I've observed:

Again, perhaps I'm odd, but I feel a lot better having worked through the economics and restrictions of the options. Before, I had a nagging feeling that we were paying too much for the amount of enjoyment we derived from TV, and now I can rest easy knowing that we're on just the right plan, at least for the moment.