CED Up Front - May 2011
Mobile TV made gains at NAB show
The U.S. mobile television industry is still working to gain traction, with devices scarce and service limited. However, last month’s trade show in Las Vegas for the National Association of Broadcasters (NAB) showed that the technology is making some hard-earned gains.
The Open Mobile Video Coalition (OMVC), the main proponent of mobile broadcast television in the United States, announced that 76 television stations in 32 markets are now doing mobile television broadcasts.
By next year at this time, the OMVC expects mobile TV service will reach 77 million people, or two-thirds of all American television viewers.
Several prototype mobile television devices were also on display at the show, including an Android-based LG model with a glasses-free 3-D screen and integration with Twitter.
But all of this mobility has some perturbed. At the show, broadcasters were fuming over a poll showing more Americans support spectrum for wireless Internet services than for broadcast TV.
The poll, commissioned by the Consumer Electronics Association (CEA), showed that by a six-to-one margin, Americans believe that underutilized spectrum should be auctioned off to raise money to lower the federal deficit. According to the poll, Americans increasingly see less value in over-theair broadcasts and more value in connecting with the Internet over smartphones and other devices.
But the NAB was having none of it, calling the poll part of CEA’s “misinformation campaign.”
“CEA apparently is not aware that the number of broadcast TV viewers is growing, not shrinking, as evidenced by the surge in pay-TV cord-cutters,” NAB executive vice president of communications Dennis Wharton said. “Moreover, every survey but for those funded by CEA finds that most Americans continue to rely on broadcasting as their primary source for news.”
The poll, conducted by Zogby/463 in early April, found that only 10 percent of Americans say they get breaking news from over-the-air broadcasts, and most relied on Internet news sites and cable broadcasts. By a 6:1 ratio, the pollsters said, Americans would prefer that spectrum be used for faster wireless services rather than over-the-air local broadcast TV.
Apparently to drive the knife a little deeper, CEA also conducted “person on the street” interviews outside NAB’s headquarters in Washington, D.C., where most of those interviewed – not surprisingly, as CEA points out – mirrored the findings of the survey, saying they get their news online or via mobile devices.
The poll involved 2,138 Americans – a sampling of Zogby’s online panel – and has a margin of error of 2.2 percent.
Under a voluntary incentive auction proposal introduced by the FCC, underused spectrum would be repurposed for broadband services and would raise an estimated $33 billion for the U.S. Treasury.
Synacor, Akamai team for TV Everywhere demo
In order to ease the burden of authentication and authorization for TV Everywhere-type services, Synacor and Akamai combined their technologies for a demonstration at the NAB show in Las Vegas.
Cable operators, programmers and other video providers have looked at various ways of connecting their customers with content libraries for TV Everywhere services. In addition to easing the authentication and authorization process, there’s also a need for enabling single sign-ins across multiple sites.
The demonstration paired Akamai’s identity services, which include a common standards-based set of APIs, with Synacor’s authentication and authorization platform, and the two work together to grant entitlement of content to authorized subscribers.
The end result included single sign-on and a single integration point for authentication and authorization. It also provided viewing continuity from one device to another through its device-shifting technology.
The combined platform isn’t currently commercially available; a spokeswoman said the demonstration showed the joint value and ease of integration of the two platforms.
Last year, Charter Communications announced it was using Synacor’s platform for its TV Everywhere trial.
Comcast’s 105 wideband tier in front of 40M homes
Comcast’s DOCSIS 3.0-based Extreme 105 tier made its official debut in mid-April, with the service now available to 40 million homes across the cable operator’s footprint.
Comcast started rolling out its residential Extreme 105 tier last year via a soft launch, but now it’s available in major markets across the nation, including San Francisco, Seattle, Portland, Denver, Chicago, Miami, Washington, D.C., Philadelphia and the majority of Boston, among others. Comcast previously launched its 100 Mbps business-class tier in most of the same markets.
“This speed tier continues to expand our portfolio of Internet service offerings and takes them up to a whole new level,” said Cathy Avgiris, Comcast’s senior vice president and general manager of communications and data services. “With it, we’re powering the digital home of the future, where entire families using multiple devices – laptops, gaming consoles, tablets, smartphones – can all take advantage of high-bandwidth applications simultaneously, ensuring they each have a great online experience.”
Pricing-wise, Comcast is doing its best to lure customers over to Extreme 105. The wideband service, which features upstream speeds of up to 10 Mbps, is available to Comcast’s triple-play customers for the introductory rate of $105 per month for 12 months, which is just barely more than Comcast’s fee of $99.95 per month for its Extreme 50 service.
Comcast subscribers also need to pay a $250 installation fee for Extreme 105.
For the business-class 100 Mbps service, Comcast previously said it was using cable modem termination systems from Arris and customer premises equipment from SMC Networks for its tier that bonds four downstream channels.
Last year, Comcast said customers would need to use Arris’ WBM760 cable modem for Extreme 105.
Comcast is including a home networking gateway with Extreme 105 that will enable Wi-Fi access throughout a subscriber’s house.
With the increased speed, Comcast subscribers can now download a 4 GB HD movie in 5 minutes, versus the hour-and-a-half timeframe from a 6 Mbps tier.
With the launch, Comcast is laying claim to having the fastest residential data service to the most homes in the United States, but Suddenlink’s Max 107.0 service is still the fastest. Currently, Videotron holds the DOCSIS 3.0 top speed in North America with its 120 Mbps service that was rolled out in September.
On the telco front, Verizon launched its 150 Mbps down, 35 Mbps up service in November.
Insight delivers multi-room DVR service to subs
Insight Communications has followed through on its promise to offer a whole-home DVR service to its subscribers.
Insight CEO Michael Willner said on his blog in early April that the service is now available across the company’s entire footprint. Willner had previously posted that the cable operator’s multi-room DVR service would be available soon during updates on the company’s increased HD offerings.
The whole-home DVR service and additional HD offerings were made possible through bandwidth that was freed up during Insight’s “Digital 6.10 Upgrade” project last year.
“This is yet another big step toward delivering the most advanced, reliable technology to Insight customers,” Willner wrote in his blog. “We’re committed to keeping our customers on the cutting edge, and I look forward to making even more product announcements in the very near future.”
The whole-home service uses Pace’s Denali boxes, which include network-attached storage. Sunflower Broadband deployed Pace’s multi-room DVR technology a few years ago.
Using three receivers, Insight’s service is able to record six shows at once, as well as stop a recording in one room
and resume playback from the same spot in another room. Recordings can also be watched on multiple TVs at the same time, while being controlled separately. Insight is using MoCA 1.1 to send the content around a customer’s home.
Insight is charging $10 a month for the service, as well as an additional $7 per box.
TWC, Viacom take iPad app feud to court
Time Warner Cable and Viacom took their dispute over what content can be put on the cable company’s iPad application to federal court in early April, asking a judge to decide the issue.
The companies filed lawsuits against each other after Time Warner agreed to drop a dozen cable channels from the popular tablet computer sold by Apple.
News Corp.’s Fox Cable Networks, Viacom and Discovery Communications had asked Time Warner to pull their programming from its iPad app, which was launched last month. They said putting the programs on it was violating their programming contracts.
The media companies say Time Warner should pay more money to distribute on devices other than television sets. Time Warner says existing contracts already provide it with the rights.
Viacom said in its lawsuit that it cannot let Time Warner “unilaterally change the terms of its contractual relationship.” It acknowledged that the cable company had taken the cable channels off the tablet computer by April, but it said a court order would be necessary to keep the company from putting the channels back on. It also asked for $2 million for each violation of the contract between the companies, along with unspecified additional damages.
Time Warner said the court should rule that it is permitted to provide the programming over its cable systems for viewing on devices of its customers’ choosing, including iPads.
“We have steadfastly maintained that we have the rights to allow our customers to view this programming in their homes, over our cable systems, without artificial limits on the screens they can use to do so, and we are asking the court to confirm our view,” Time Warner Cable executive vice president and general counsel Marc Lawrence-Apfelbaum said.
Dish Network acquiring Blockbuster for $228M
Early last month, Dish Network said that it won the auction for Blockbuster with a bid valued at $228 million in cash.
The satellite TV company, billionaire investor Carl Icahn and a group of debt holders were the three remaining bidders for the Dallas movie-rental chain, which filed for Chapter 11 bankruptcy protection in September.
Dish’s bid was for $320 million, but the value decreases to $228 million after adjusting for available cash and inventory.
“Blockbuster will complement our existing video offerings while presenting cross-marketing and service extension opportunities for Dish Network,” said Tom Cullen, executive vice president of sales, marketing and programming for Dish Network.
Blockbuster is already a shadow of its former self. When the chain filed for bankruptcy protection, it was down to 3,000 stores, less than a third of the peak of 9,100 in 2004. There are about 2,400 currently open, with plans to close about 700 more by mid-April.
Blockbuster used to dominate the U.S. movie rental business. But it lost money for years as that business declined because customers shifted to Netflix, video-on-demand and DVD rental kiosks.
Dish expects to close the deal during the second quarter. The transaction needs bankruptcy court approval.
Whether the No. 3 pay-TV company can use Blockbuster’s brand, stores and streaming-video capabilities to create a service more relevant to today’s quickly evolving viewer habits remains to be seen. Analysts are split about whether Dish will keep the stores themselves open.
“Dish has zero retail capability at present, and therefore lacks the scale or synergies to benefit from the operation of Blockbuster retail stores,” Wedbush analyst Michael Pachter said.
He said the company might just want Blockbuster’s movie-streaming service and was likely emboldened by the $290 million initial bid from debt holders that started the auction.
“[Dish] decided that rather than buying the streaming capability and the Blockbuster brand name from another party, it could bid for the entire company and offer the store inventory to another bidder at a later date,” he said.
Pachter thinks that Dish will liquidate stores by the end of the year. But others think Dish might keep at least some stores open.
Multichannel universe sees positive video sub growth
The U.S. multichannel sector reversed two consecutive quarters of video subscriber losses to achieve positive net adds in the fourth quarter of 2010. The combined gain of 65,000 customers, though weaker than year-ago results, helped boost the industry to a full-year increase of 211,000 customers, according to SNL Kagan.
Basic cable customers, though, declined by 526,000 in Q4.
While over-the-top substitution remains a threat to the industry, operators reported that subscriber trends improved predominantly because of slight housing sector and labor market improvements, along with reduced defection churn from over-the-air converts acquired during the digital transition in June 2009.
According to SNL Kagan’s analysis, the multichannel universe grew to almost 100.1 million video subscriptions, a 0.2 percent gain year-over-year.
Worldwide STB Market Revenue Approached $6b In Q4
Despite unit shipments remaining relatively flat over the last year, worldwide set-top box revenues were actually up in Q4 2010 compared with Q4 2009. Total revenues for the quarter were $5.7 billion, as compared with $5.2 billion in the previous year’s fourth quarter, according to In-Stat.
“Even though overall growth in the market was not dramatic, there were certainly regional nuances that are worth noting,” said Norm Bogen, vice president of digital entertainment at In-Stat. “For instance, there was a significant migration from standard-definition to high-definition in the larger and more advanced markets like North America and Asia/Pacific, while in the developing regions like the Middle East/Africa and Latin America, there has been a surge in standard-definition, with high-definition just beginning to make an appearance.”
Recent In-Stat Findings Include:
- In North America, satellite STB unit shipments approached 18 million in 2010.
- European cable STB revenues are forecast to be $212 million in Q1.
- Worldwide IPTV STB unit shipments increased by 3.7 million in 2010.
- During 2010 in Latin America, 8 million more SD STB units were shipped than HD boxes.
Juniper: Wi-Fi, Femtocells To Dominate
New research has found that the majority of traffic – 63 percent – generated by smartphones, tablets and feature phones will transfer onto the fixed network via Wi-Fi and femtocells by 2015.
This means that the annual mobile data traffic offloaded from operators’ networks via Wi-Fi and femtocells is forecast to reach nearly 9,000 petabytes (PB) by 2015, which equates to a voluminous 11 billion movie downloads.
Juniper Research found that the percentage of traffic offloaded in developed markets will actually diminish toward the end of the forecast period and will begin to plateau in several other regions due to the accelerating take-up of LTE. Despite this, however, the volume of data traffic offloaded from mobile networks will continue to grow strongly throughout the next five years as the total volume of data traffic delivered to mobile devices accelerates.
Wi-Fi vs. Femtocells
Although currently Wi-Fi accounts for more than 98 percent of the traffic offloaded, femtocells will account for a steadily increasing proportion over the forecast period. The highest penetration of femtocells for data offload will occur in North America.
Opportunites For OPS
Operators should view offloading solutions as being complementary to their 3G/4G network investments, providing opportunities to seize market share and revenues from fixed-line operators, extending their reach beyond mobile and making their 3G/4G business case profitable.