Mark Cuban defends his investment

Mark CubanIf you’re a basketball fan in Dallas, the name Mark Cuban personifies the party that is a Dallas Mavericks game. He bought the team in 2000 with wealth acquired during the dot-com days — specifically, a company called Broadcast.com. A self-made guy from blue collar roots and a textbook entrepreneur, he worked his way up through the gold rush days of technology to where he is now — one of the richest people on the planet. His latest business venture is HDNet, the high definition cable and satellite network.

Cuban maintains an active blog and is quick to share his opinions about anything relative to his business interests, and that includes trends in media. He’s relevant and always gives good “soundbites.” He provides a consistent focus on traditional media business models from an executive’s seat, which makes the blog a fascinating and provocative view, although some would say similar to that of the captain of the Titanic. Time after time, he paints the media business disruption as one driven by thieves, shadowy denizens of the darknet out to rob him and his peers of what rightfully belongs to them. It’s astonishing that a man of Cuban’s history would take such a view, but HDNet needs the existing hegemony in place in order to fulfill its value proposition. So by way of investment, Mark Cuban, a swashbuckling maverick who sliced a path through the status quo to a lofty seat in society, now finds himself a defender of the very things that were his targets “back in the day.”.

His latest is an open letter to Comcast — and anybody else who owns the pipes in which the Internet functions — calling for them to block peer-to-peer (P2P) activity. The blog post comes off as ignorant and disingenuous, for Cuban’s objection to P2P is presented as that of a consumer, not the owner of a business potentially disrupted by P2P.

As a consumer, I want my internet experience to be as fast as possible. The last thing I want slowing my internet service down are P2P freeloaders. Thats right, P2P content distributors are nothing more than freeloaders. The only person/organization that benefits from P2P usage are those that are trying to distribute content and want to distribute it on someone else’s bandwidth dime.

Cuban is fully taken to task for this view in the comments to the post. I’ll just say that it appears on the surface to be simple ignorance, because P2P bears no resemblance whatsoever to the way it’s described here.

But Mark Cuban is a very smart fellow, and his presumption to speak on behalf of consumers is well-considered. He may go off half-cocked from time-to-time, but this “letter” is actually a defense of his investment in HDNet. It’s the same reason he writes so passionately about the disruption to the music industry, the uploading of “pirated” TV clips and the general unbundling of video. He has a pretty big dog in the fight, and instead of simply delineating how the disintermediation of media impacts his business model, his strategy is to rant and rave about how “wrong” it all is in the first place. He’s a charismatic fellow, and all of this makes him a great witness in Congressional hearings, for as HDNet’s chairman, he’s a great friend to the copyright industry’s efforts in Washington.

All of which is to say that we need to pay attention to what Mark Cuban writes but also bear in mind that it’s one side of a very two-sided story. What I appreciate most about Cuban is his willingness to give us the business side. I just wish he’d be a little more transparent about it.

UPDATE: Mark clarifies things in the comments.

Comments

  1. If you think p2p or any internet delivery mechanism is a threat to HDNet, you have absolutely no understanding of how the delivery of live media over the internet works. Zero.

    answer this simple question . What is the maximum number of simultaneous 8mbs streams that can be viewed ?

    Heck, what is the maximum number of 350k streams that can be viewed simultaneously ?

    Or how about this, how many homes can receive a live stream of a 90 min movie encoded at 8mbs without buffering ? What happens when those homes want to receive multiple streams for their dvrs ?

    Feel free to provide growth estimates to these and then tell me how many homes are capable of receiving live streams of HDNet or any other hd network in 5 or 10 years.

    I’m wide open to an explanation of how the net will offer competition to HDNet. Because, as of now, it can’t

    In fact, it can’t even offer competition to standard def tv as streamers boast about streaming 350k simultaneous users at a low end quality of 300k.

    More people watch HDNet today than will watch any live streams of any network.

    When last mile investment failed to meet the expectations the late 90s created, the hopes of internetwide mass streaming died for the forseeable future

    The hope of internetwide mass hd streaming isn’t even a glimmer in the future today.

    And as far as p2p, it is so completely inefficient as a last mile protocol, the last option anyone would use to stream live hd to a mass audience is p2p.

  2. I appreciate all of that Mark, but the point of the post was that your statements vis-a-vis P2P and copyright flow from your traditional business views and always have. You need existing copyright to be solidly in place and enforced in order to sustain the value prop of HDNet. I’m not sure how you interpreted the post as an apologetic for streaming HD.

    But to say that P2P “clogs pipes” is to misunderstand P2P and to parrot the words of AT&T and others who wish to control something they don’t currently control. Your view that the maintainers of the pipes need profit in order to grow the pipes is something I support, but not to the absolute extent that the Telcos desire.

    I’ve long written about the value of FTTH as the ultimate last mile solution, and as a FIOS subscriber I’m almost there. I just need fiber INSIDE the home now.

  3. So to finish the post..

    My position on p2p is not influenced by hdnet at all. If there was a valid means of distributing live hd content at full bandwidth over the net. I would be all over it

    It would be a great opportunity to build a provate multicast network, which could be a great business.

    Of course, getting hd from the net to an hdtv is another pro

  4. you might want to read up on p2p . Real papers.
    Use the link to cnet I have in my post.

    And as far as needing existing copyright in place, you must have me confused w someone else. I am against the dmca, we don’t use copy protection on our dvds, I paid for groksters supreme court defense. Not quite in support of traditional copyright. You may be confused by the fact that I’m against google hiding behind the dmca to allow youtube to exist and that under existing laws, they are brekaing the law. But it has nothing to do w hdnet.

    Look at our original content on hdnet. Its timely news. Original , sports related for the most part. We don’t go after people for posting it online.

    Your assumptions about my views are upside down.

    Where I see long term thinking, I look for opportunity. The great news today is that everyone , like you, think the internet is the solution to everything.

    That’s the backwards, old fashioned thinking

    And you don’t want fiber in your home.…but that would be a good reason for you to start to learn the technology

  5. Thanks for the rebuke, Mark. We all need those once in awhile. I’ve read a little about p2p but not enough, and I’ve read your diatribes against YouTube, which leaves me wondering if I’m talking to the same Mark Cuban regarding copyright.

    I’m confused about fiber in the home, however. I have clients who’ve wired their businesses that way, and I know home builders are putting fiber throughout new homes. It sure makes moving video files around rather easy. Do you not have fiber in the offices of HDNet?

    And not to be snarky, but I supervised the first live television news coverage of an event via fiber anywhere in the world. That was in 1986. I believe you were 28 and building MicroSolutions at the time. It involved an experiment with three phone companies, but it worked and was fabulous. It was written up in technology trades at the time. During that period, I learned from some of the greatest fiber experts of the day, but I’ll admit that I’m no expert.

    You want to explore the technology of your grandkids’ future? Look at hologram transmission via fiber. How I wish I had another 50 years.

  6. Fiber for backbone in business is fine. Maintaining fiber connectivity in the home would be a pain in the ass

    As far as youtube, its about them trying to bend the rules , not about copyright per se. Other companies have been put out of business trying to treat copyright the same way. They just didn’t have the money to fight and delay.

    If everything wen public domain in 25 years, I would be fine w it. I think the whole country would benefit

    Fiber will be amazing. I sat in a house committee and told them that enabling fiber to the home and 1gbs bandwiodth throughput as a goal in 15 years would change our competitiveness. I’m all for as much fiber as possible.

  7. Thanks, Mark. I’ve enjoyed this conversation, and you remain one of my heroes.

    The potential of fiber hasn’t even been touched. We used to talk about a recording session with a drummer in London, lead guitar in L.A., bass player in Memphis, and singers in various parts of the world all recording live via fiber. It boggles the mind. Then, there’s the next generation televangelist who will actually BE in your living room via hologram fiber.

    Man wants to be God and those enterprises which feed that desire will always be successful. Fiber overcomes time and distance in many ways, and those are the dimensions in which we are trapped.

  8. Mark later updated his post to suggest charging uploaders, which seems like an idea worthy of discussion as it would serve as a limiting factor, without banning P2P altogether.

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