The Game Changer For TV: 5G

Maxwell Wessel makes the case that the status quo of today’s entrenched cartel of TV networks and cable companies could be disrupted by an alternative to cable internet: Wimax.

Maxwell Wessel, The Inevitable Disruption of Television

For about a year now, I’ve been warning producers that disruption is coming. And for about a year now, the conversation has ended the same way. Bundling good. Internet expensive. Studios infallible. If I can pull myself together before boarding a plane, I always respond with Rogers’ observation. The ecosystem will develop. But after this last trip, the standard response wasn’t enough. I felt compelled to not only to speak in generalities, but to find an actual solution. So I did.

As soon as I landed in Boston, I committed to finding a substitute for my bundled internet / television package. Something that would break away from the overpriced value chain. And in just one evening, I found my solution in the form of 4G wireless connectivity.

With a little bit of research, I found that I could subscribe to Clear — a disruptive internet service provider that leverages 4G technology instead of an expensive fiber-optic network — for just $49 a month. They would send me a small device (1/2 the size of a dollar bill) that would create a small wifi network wherever I took it. It would provide me with unlimited internet, allowing me to both cut the Comcast cord and reduce my monthly bill with my smartphone carrier. It wouldn’t be as fast as my Comcast subscription, promising about one third the speed of my existing connection, but it would theoretically be fast enough. So I ordered it.

In two days, I had a broadband connection and no Comcast bill. I can stream television shows wherever I am, take my high speed internet with me when I walk out of the door in the morning, and pay about half of what I did before (even including the cost of Hulu Plus).

For most people, this solution probably isn’t quite good enough. 4G internet speed is noticeably slower than wired broadband and there isn’t nearly as much content available through Hulu, Netflix, and Amazon as there is housed within a 150 channel Comcast bundle. But as compression technology improves, the 4G infrastructure is expanded, and the quality of internet video improves, my guess is the solution will appeal to more and more consumers. It’s disruption in its most basic form. And it doesn’t hurt my thesis that Time Warner, Comcast, Cox, and the Dish Network represent four of America’s 19 Most Hated Companies. People are primed to embrace disruption in telecommunications.

4G is not going to cut it for most people, even for me. I have 4G on my iPhone, and I used it as a connection when in transit or hotels that charge for internet access. But it’s too slow for watching Netflix, in general. LTE-Advanced, also called 4.5G, on  the other hand is theoretically capable of up to 1 gigabit, around 10 times faster than 4G, but in practice it will only deliver 15 megabits per second, only a hair better than 4G’s normal 12 megabits.

But the thinking is right. Imagine a hypothetical 5G standard, which actually delivers 1 gigabit/second. I am predicting that we will see that come about in the next five years because the adoption of high performance mobile devices — smartphones and tablets — is where the action is today, and the benefits of always on connectivity are so great.

So, then we will see the end of the cable internet choke point, and the collapse of the old TV cartel. Yes, today you need the cable connection anyway, so forcing people to buy the triple-play of TV, internet and phone service seems to make sense. But everyone has a cell phone, and uses that preferentially, so the phone line via cable  is superfluous. Once the internet via cable becomes superfluous the TV cartel will break down.

We will be getting our internet connection from our mobile devices, and pumping the video and audio stream to the dumb TV in the corner from there. No cable boxes. No cable companies. No cable bills. No cable TV networks.

29 August 2012 6 Permalink

The Second Screen As A Hangout

The second screen is being recognized as one of the most innovative and engrossing ideas happening:

The Age of Mobile Creativity: Are We There Yet? - Douglas Quenqua via Co.Create

We asked some creatives who work in mobile to name their favorite executions of the past year or so. The consensus? Don’t look for amazing visuals or stories. When it comes to mobile, the most creative ads are the ones that use the technology to forge connections.

“The connectivity stuff is where I think it’s getting really interesting,” says Tom Eslinger, digital creative director of Saatchi & Saatchi Worldwide and head of the mobile jury at Cannes.

“Mobile that connects you to your community when you’re watching your favorite TV show so you can hang out and watch together, ” he says, seemingly describing any number of social TV apps. “There’s this really high-utility stuff—TV and entertainment has a lot of it.”

Source: fastcocreate.com

22 June 2012 13 Permalink

Breaking Up The TV Cartel Is In The Public Interest

The Justice Department is making moves toward unwinding the stranglehold that today cable cartel has on the US TV marketplace, especially with regard to anti-competitive practices against non-cable players, like Netflix, Amazon, and Apple.

Justice Department Is Said to Investigate Cable Companies Over Internet Video - Brian Stelter and Edward Wyatt via NYTimes.com

The Justice Department is quietly investigating the cable industry’s behavior toward nascent online video competitors as part of an inquiry into possible anticompetitive practices by cable companies.

The investigation raises the prospect that the government’s antitrust lawyers will intervene in the complex and rapidly changing business of entertainment distribution. In the meantime, it raises new questions about an industry that has no shortage of them already.

Answers are probably not immediately forthcoming. As is typical in cases like this, the Justice Department declined to comment on the investigation or to confirm that it is taking place. But people with direct knowledge of the investigation who were not authorized to speak publicly confirmed, as first reported Tuesday night by The Wall Street Journal, that the department was examining broad changes in the marketplace for online video, including the use of Internet data caps by cable companies.

One of the issues involves whether those limits to the amount of video, audio and other data that users can download are discriminatory against Netflix, YouTube and other new digital video competitors. Comcast, in particular, has come under scrutiny for its past use of data caps and other network management practices.

The US model for today’s Old TV distribution is based on a/ free broadcast TV (which a declining number of people take advantage of) and b/ for fee cable (and satellite) TV (that a dominant and growing proportion of the population rely on). 

Local governments grant cable companies the right to a cable monopoly (usually a duopoly) in a geographic area, allowing them to charge a fee for TV service. Likewise, the US government allows similar models for satellite companies. The Multichannel Video Programming Distributors (MVPD’s) like Comcast and DirecTV also provide internet access to their customers, which at first they saw as simply an additional source of revenue. But now that we can stream video over the web, it’s become a huge competitive threat to their entrenched interests.

One result is the intransigence of cable companies regarding unbundling channels. Many users would like to not be forced to buy 70 channels in order to watch NBA games, or would like to just watch Game Of Thrones without the rest of HBO’s lineup.

Justice Department Is Said to Investigate Cable Companies Over Internet Video - Brian Stelter and Edward Wyatt via NYTimes.com

The department is also said to be studying the ways in which distributors bundle disparate television channels together in all-you-can-watch packages. Distributors and programmers have resisted calls to unbundle channels, but Internet distribution may give consumers more choices in that area — assuming that data caps or other network management practices do not stand in the way.

It is unclear whether the government inquiry is looking solely at cable and broadband Internet providers, or whether it is also examining other types, like satellite television providers. The two largest satellite providers, DirecTV and Dish Network, declined to comment.

The inquiry is important because precedents for the digital distribution of content are being set now, said Art Brodsky, a spokesman for Public Knowledge, a public interest group based in Washington, which welcomed news of the investigation. “This is the critical moment,” he said. “If the government doesn’t step in to protect public interest now, you’re going to lose your chance.”

The review was also welcome news to those who have argued that concerns about control over digital distribution should be addressed through antitrust law enforcement, rather than through pre-emptive regulation.

[…]

There are several factors that could be motivating the government to investigate cable company practices now. For one, it is reviewing a $3.8 billion proposal by Comcast, Time Warner Cable and other companies to transfer some spectrum to Verizon Wireless. The Justice Department’s scrutiny of that arrangement is certain to include an examination of video content delivered over wired and wireless networks.

Separately, the government is also monitoring Comcast’s takeover of NBCUniversal, which took place last year after a lengthy review by regulators.

In a consent decree with the Justice Department when the acquisition took place, Comcast committed to not “unreasonably discriminate” in relation to the Web traffic of its users. As part of a follow-up, the government is studying whether Comcast is living up to its commitments, according to one of the people with knowledge of the investigation.
For years, Comcast has enforced a cap of 250 gigabytes a month for its customers as part of what it calls reasonable network management. But Comcast has exempted the use of Xfinity, Comcast’s own online video Web site, saying that use would not count against that cap. Comcast says Xfinity videos are delivered over the company’s own network, not over the public Internet, but Netflix has cried foul.

Last month, Comcast raised the data cap and said it would no longer enforce the limit as it explores new pricing plans based on usage.

The situation is clear, in some ways.

First, it is certainly in the public interest for cable companies to not throttle data going through their pipes. Since the companies are providing the now-essential Internet connection to the great majority of the connected population, they should not be able to step in and decide what sort of content gets what proportion of the bandwidth.

Second, it is difficult to see what public interest is served by a coercive bundling of channels, forcing the public to buy more than they want in order to get access to TV programming they want. And there is no recourse, in most cases, to much of this programming, other than piracy, which the media world holds up as a boogieman.

For these reasons, the Justice Department should require  MVPD’s to drop any throttling of bandwidth based on content (also called Net Neutrality), which is the current policy of the FCC. And they should break the monopolistic practice of coercively bundling channels, so that any channel can be accessed through a fair price, and that individual shows — like a specific basketball game, or a specific movie on HBO — can be purchased in a pay-per-view style.

Whether the Justice Department will go that far — which would make the public happy, but not the TV magnates — remains to be seen.

14 June 2012 13 worktalkresearch Permalink

Jeremy Allaire on Why The Cable Companies Will Play Along With Apple

Anthony Kosner interviewed Jeremy Alliare about Apple’s hopes for a displacement of conventional cable TV, as he laid out in a recent WSJ piece. Allaire had written some things that line up very closely with the predictions I made in the recent special report, Social TV and The Second Screen. In particular, Alliare wrote:

In my view, TV is the last screen to fall as a computing platform. What do I mean by this? That we should think of TV screens and monitors as the final frontier in Internet-based software applications, not as devices to watch and consume video content.

Properly conceived, a TV is a large high-definition audio/video rendering device that plays a role in displaying content and related data. While certainly the ideal device for consuming and using video-based content, it is also simply put the largest computer monitor in our lives, and one that very often presents in a social context — the living room, the conference room, the dorm room, the classroom, the retail store floor and shop window. In short, these TV monitors are at the core of all of our major social and economic activities.

And in recognizing the broader role that these monitors play in our lives we can begin to re-conceptualize TVs as not just screens for video, but as a rich computing surface for viewing information, playing games, communicating, learning, shopping and so forth. In the past, when trying to use these screens for non-video applications, we would connect them to a PC or laptop (to present a shared piece of content that a group could discuss or interact on), or connect them to a game console for playing games.

In general, most attempts to evolve the capabilities of the TV monitor into richer computing platforms have failed.

Allaire goes on to suggest that Airplay and realted capabilities on our Apple devices allow a transition to using these devices as the next generation set top box, with a superior user experience compared today’s lame options. And it positions Apple to dominate as the preferred second screen in the New TV world, which is about experience, not audience.

Allaire waves a hand of what Apple might do after that — when it also is selling the TV device, and not just adapters for non-Apple TV devices — but the big question is: how can Apple get the existing players to play along? And that’s what Kosner wondered, too:

Anthony Kosner, Brightcove CEO Allaire on How New Apple TV Experience Will Change Home, Work, Advertising via Forbes

Kosner:What do you think Apple has to do to get the “very top-tier TV operators like Comcast and Time Warner to go for their proposal?” Is it just a matter of selling a ton of “add-on” devices with whatever alliances they can start out with and then the top-tier will have to come around? Or are there specific concessions the cable companies are looking for?

Allaire: I think it’s a complicated question. At the core, Comcast, Time Warner and the like are concerned about losing control of the customer relationship, losing margin, and becoming ”dumb pipes” as it were. Clearly, however, if Apple can establish a footprint of TV connected devices that is in the 10s of millions, which should be possible in 1-2 years, their deeper concern will be Apple having enough scale and leverage that they will go direct to the broadcast programmers and disrupt the existing packaging and distribution model for TV content. While expensive for Apple, it is conceivable. That threat may drive one or more of the top-tier MPVD’s [multichannel video programming distributors] into an alliance with Apple that marries their programming relationships and existing broadcast product with an Apple-controlled user experience, much like Apple established with voice products on top of the wireless carrier networks. But I don’t see Apple doing this without also retaining the right and ability to innovate in video content pricing/packaging models as well.

[…]

Kosner:Will marketers be more likely to sponsor content experiences on this new platform-to wrap their messages and offers around the content-as opposed to using more traditional advertising devices (i.e., the 30-second spot)?

Allaire: This has been the question for almost a decade across multiple new mediums.  When we launched Brightcove Video Cloud almost 7 years ago, we had envisioned interactive marketing experience that launched from and wrapped around online video, but the advertising industry didn’t bite and stayed focused on extending the TV commercial model to the Web. There are a host of reasons for this, and I ultimately thought it was a short-sighted approach from the marketer community. When apps came to phones and tablets, again, people thought that richer forms of interactive marketing would become the powerful advertising model, but as you can see today, we are largely still stuck in the display advertising world in mobile and tablets. I do think we will break through and marketers will embrace deeper forms of interactive marketing on these platforms, especially as we extend into the traditional “turf” of TV advertising in the living room.

Too many people are narrowly focused on what it means to have second-screen apps for existing TV video content. I do think that is an important space and one that we’ll see a huge amount of innovation around, especially as Apple TV Apps take hold. For example, we’re working with some broadcasters on TV Apps that provide a great HD viewing experience that is controlled on the iPad and where, while the program runs, compelling companion content, including social streams, are available. That is certainly more “social” than existing broadcast TV.

Kosner:Following up on the last question, do you see the “connected TV” and “second screen” paradigms that you describe as being potentially more successful advertising mediums than desktop and mobile, and if so, why?

Allaire: In theory, this should be the ultimate medium for advertisers, the combination of deep, high-quality viewing environment and an engaged, interactive medium. TV advertisers have been dying for methods of bringing the emotional impact of high-production value video-based commercials into the online environment, and this new model offers that, irrespective of whether users are using a “video app” or some other content app on their Apple TV. Crucially, the larger surface of the TV combined with the companion surface of the tablet creates a highly compelling environment for rich media interactive advertising.

I find a great deal of what Allaire says to be prescient, especially the power of the Swarm Of Devices to create a rich user experience. Perhaps I differ in my aversion to the traditional media thinking creeping in, but this is a distinction of degree not disagreement.

Most critically, Allaire has laid out the strategy that Apple might be using to get cable operators to play along. If they can envision a near future in which Apple has become the premier provider of a transitional New TV experience with tens of millions of add-on devices or iTVs sold, they could face extinction because Apple could start creating their own programming or licensing it directly. Therefore, it might be more adaptive for cable operators to make deals with Apple upfront, and get baked into the new recipe.

I’m sure Apple must be spinning some version of that story, as Allaire suggests.

10 June 2012 2 worktalkresearch Permalink

What Are People Doing On The Second Screen?

There’s a torrent of new research coming out about the second screen, and how rapidly we are moving from Old TV to New TV, as I detailed in the recent Social TV And The Second Screen report.

The numbers of people second screening is rising quickly, as shown in this eMarketer study:

Consumers Create Own Social TV Experiences - eMarketer

The study also found that around 41% of respondents were interested in or were already using websites and apps that allowed them to chat with others about TV shows. Of those respondents, 56% said that, if their favorite TV show launched a social TV app, they would be interested in a chat function directly through that app, while 53% would prefer to use Facebook chat. Half of respondents would use text messaging or group texting and 38% said they would use Skype to discuss that TV show.

Looking at when viewers are participating in these social TV activities, it depends on the type of content or activity. Checking in to a show, through an app such as GetGlue, generally happens before or during a show, while searching for extra information or playing games most often takes place during ad breaks or after the show.

This write up never mentions Twitter, which seems a strange omission.

9 June 2012 2 worktalkresearch Permalink