I’m not saying that you will pay separately for every channel you might want to watch. Bundles are often easier to service and sell, and that efficiency creates benefits that can be shared with viewers. But it is simply wishful thinking to assume that a pricing model that worked in an era with very limited choices for consumers is going to hold out in a world of nearly unlimited competition.

Media Companies, Beware the Priceline Negotiator – Bits Blog – NYTimes.com

Saul Hansell weighs in on the Mark Cuban post about Boxee and the future of video.

Mark Cuban: We don’t think you are stupid but that doesn’t mean we agree

I just read Mark Cuban’s recent post and all of the comments about why internet video is problematic, why cable has it right and why video bundling is the only viable solution.

In the post he takes on Boxee and everyone that doesn’t think the current model of video delivery is best one for consumers.

And he asks why “internet people think content people are stupid”.

I wish he read my earlier post last week about what big media can learn from the software industry.

My very first point was we don’t think content people are stupid.

The software business evolved successfully. To me that means that there can be other successful models for video as well beyond current bundling models. There may have to be.

The thing about Mark that surprises me is that he’s resistant to change even though he was a very successful internet 1.0 entrepeneur.

Take a look at this post he wrote back in 2006 about web video & HDTV. At the time Mark didn’t believe that people would have computers that could connect to HDTV and if they did they still wouldn’t connect them to their HDTVs. (my response at the time is here).

Things happened in 2006 much faster than we all imagined with content & technology and the rules are changing constantly. Huge numbers of users watch video on their HDTV thanks to things like boxee, xbox, roku, appletv, macminis and linux boxes.

Who would have thought that movies are showing up on iTunes the same day as DVD release. That is a big change. Next up, I bet that movies will show up on VOD and iTunes the same day it’s in the threater. That will change the windowing business model big time – but it’s inevitable.

Studios will may charge more for this convenience but it’s driven by end user demand and technology.

And that is a good thing.

So now Mark believes that video bundling of the past & today is the only model for the future.

I really don’t agree. It will be a different type of bundling and consumers will get more choice. Just like they do with music. We get subscription and a larte and free. And I get this choice for any song I want essentially.

The software business showed a lot of creativity with new products and business models. I think content owners need to do the same.

Here’s one last point:

Evolution is a good thing and probably the only thing we can count on. The real compeition may not be bittorrent arounds or piracy (which will continue to thrive if content owners don’t embrace the open internet). The competition for cable, satellite and cable networks may be facebook, myspace, youtube, twitter, gaming and the like.

This broadband generation (folks growing up online) prefer facebook and their believed internet to cable tv. Thats the real issue.

It’s a competition for attention not a compeition for business model.

(disclosure: I’m an investor and on the board of Twitter & Boxee. Both companies mentioned in this post)

There is a lot big media can learn from the software industry

I try not to write about why big media is broken or needs to be fixed. It’s complicated and there is huge money at stake.

But I’ve been part of a number of so many conferences, dinners and meetings on the subject lately. I just can’t keep still (read quiet). And I hear that “analog dollars vs digital pennies” thing one more time….

First a few things.

1. I don’t think big media is stupid. There are amazing businesses built from big media and I love their content.

2. I don’t believe that all big media has the same shortcomings and risk (sig difference between newspaper woes and that facing cable networks and msos)

3. i believe that content owners should be paid.

Okay, with that out of the way, let me share some thoughts.

I believe that big media could learn a lot from the software industry.

The software industry has changed tremendously over the years. It’s clear to me that the old traditional software approach (expensive, finsihed goods, big licenses, piracy risk) is not long for this world. MSFT knows this and they are trying to reinvent themselves (I give them credit for that).

The busines model for great software has changed. It’s about open source (mysql), it’s about open api (twitter), it’s about professional services (red hat), it’s about advertising (google), it’s about subscription services/asp (amazon s3/ec2) and it’s about bottom up (salesforce.com).

Why did this happen? I could write a long blog post on that but there were market pressures combined with innovation. And the old model simply wasn’t going to scale.

The best part about these new models is they created bigger and new value for end users, developers and creators. New entpreneurs could build new things. New businesses could bulid new things. People & companies are making a living with these new models and it’s working.

Consider the iphone app store. if they kept it closed they would have sold less iphones and less developers would be making money.

I’m sure MSFT would’ve liked to remain in the old world forever but wishing for it just doesn’t make it so.

Big media needs to learn from this. Instead of fearing the internet they need to think about a world where every home has 100Mbps up and downstream. And my mobile device will have it too since it has wifi. And cellular will give me 10mbps downstream at some point in the near future as well.

And that is a good thing. More distribution and faster pipes is a gift.

Big media needs to take that and run. Create new forms of content, new packing, new distribution, new business models. Just like the software folks did.

Don’t hide. Time to put stakes in the ground and build the future.

ps: there is a lot the tech community can learn from big media. I’ll cover that in a future post.

I was invited to lead a discussion at MIT Innovation Lab this afternoon about open source hardware from a vc perspective.

This is a (very) rough draft I put together on the train. Need to fix a few slides. work in progress.

but since the topic is open source I had to publish it here first :)