Showing posts from April, 2014

Consumers Have No Idea How Much They Would Buy of a Product That Isn't Available

Steve Jobs famously maintained that one could not predict consumer demand for a product they never had seen, which is one reason why Jobs never put stock in consumer research.
Likewise, one might argue, all present estimates of the amount of video subscription service “avoided” by consumers is nearly meaningless for predicting consumer behavior in some future market.

The reason is simply that It is difficult to measure demand for  a product that is not available yet.

A November 2013 survey by Verizon Digital Media Services found significant consumption of non-linear video by Millennials, something that likely is surprising to nobody.

The survey found 13 percent of Millennials making do without any linear TV service, while some nine percent of other people did so.

But the important questions of whether consumers will pay for some future form of on-demand video, and how much, cannot be determined on the basis of present consumption, since the content many would pay for is simply not avail…

Mobile Internet Providers in Asia Face Demand Uncertainty

One of the great challengers mobile service providers face in much of Asia is how much demand there will be, in the future, for mobile Internet access, and how to supply that demand at prices users can afford.
The other problem is that present trends might not predict future behavior.
Mobile data consumption patterns in Asian countries might show “mean” (arithmetic average) of about a gigabyte a month, but the median (half use more, half use less) consumption is more on the order of 300 MB to 400 MB.
On the other hand, present consumption trends are likely skewed by use of mobile devices or dongles to support PC usage. Also, usage is further skewed by users in some countries, compared to others, as Nielsen data suggests.
In the Asia-Pacific region, about one percent of subscribers account for 29.2 percent of upstream traffic and 18.5 percent of downstream traffic, as well as 18.7 percent of aggregate bytes each month, Sandvine reports.
So “average” consumption is skewed by dongles or te…

Netflix Speed on Comcast Network Improves 65%

In the US, the average speed on the Comcast network for Netflix streams grew 65 percent, from 1.51 Mbps in January 2014 to 2.5 Mbps in March 2014, after the two firms agreed to interconnect directly.

Though speed and packet delay are two different issues, it arguably is the case that unpredictable packet arrival times cause more quality disruption of video streams than absolute bandwidth. 

Direct connections, caching and use of content delivery networks are a few of the standard ways ISPs and app providers work to ensure better end user experience. 

New proposed Federal Communications Commission network neutrality rules intend to allow voluntary commercial agreements between ISPs and app providers to extend content delivery networks all the way to the end user, where today CDNs operate over the backbone networks, but not in the access network.

The boost in Netflix performance on Comcast, after the direct connection, suggests that such techniques do matter, especially for voice and video s…

Google Aiming at Municipal Wi-Fi Again?

Google's direct revenue model scales almost in linear fashion with the number of people using the Internet, in large part because Google apps represent such a huge share of user engagement time with Internet apps.

That is why Google now appears to be considering deploying Wi-Fi networks in towns and cities served by Google Fiber. The new Google Wi-Fi effort obviously would leverage infrastructure assets Google Fiber has created. 

In fact, about 60 percent  of all Internet end devices and users exchange traffic with Google servers during the course of an average day, according to Deepfield.

That finding is based on all traffic from computers, mobile devices, game consoles, home media appliances and other embedded devices. Google’s device share is much larger if traffic  from computers and mobile devices, and not the other devices, is considered.

Google analytics, hosting, and advertising play some type of role in over half of all large web services or sites, according to Deepfield.


What Will New Network Neutrality Rules Bring?

No blocking of lawful content has been U.S. Federal Communications Commission policy since 2005, and a policy guide since 2004. Transparency likewise has been policy since 2005.
In 2010, the FCC added new network neutrality rules that eventually were struck down in the courts, largely because the court ruled the Commission did not have authority to issue the rules, which essentially mandated that nothing but “best effort” Internet access could be provided by any fixed network Internet service provider.
Though much hinges on the details, FCC Chairman Tom Wheeler argues that the original principles still will be reflected in the new proposed rules. As always before since 2004, the new rules will specify that no lawful content can be blocked and that ISPs must act transparently in making information about terms and conditions of service, as well as network management policies, available to subscribers.
The new arguably new interpretation to the original rules is that “ISPs may not act in …

What Impact on AT&T or Verizon from Marketing War?

Has the U.S. mobile marketing war finally begun to show in Verizon and AT&T financial performance? Not so much, at least not yet.

Operating results seem to be showing some pressure, but it is hard to distinguish background market maturation trends from the specific impact of T-Mobile US attacks.

AT&T first-quarter 2014 consolidated revenues of $32.5 billion represented growth of 3.6 percent. 
Verizon total operating revenues in first-quarter 2014 were $30.8 billion, a 4.8 percent increase compared with first-quarter 2013 and the company’s highest quarterly growth rate in the past five quarters.

The mobile segments of AT&T and Verizon face market maturity, of course, so slowing growth rates would not be unexpected. The issue is whether higher levels of competition are affecting mobile segment gross revenue, profit margins or subscriber gains.

Total Verizon mobile segment revenues were $20.9 billion in first-quarter 2014, up 6.9 percent year over year. AT&T reported seven p…

Global Internet Access Speeds Grow; Mobile Use Might be the Bigger Trend

Global average Internet connection speeds continued to improve in the fourth quarter of 2013, with a quarterly increase of 5.5 percent, reaching 3.8 Mbps, on average, according to the Akamai Technologies Fourth Quarter, 2013 State of the Internet report.
In the fourth quarter of 2013, average connection speeds on surveyed mobile network providers ranged from a high of 8.9 Mbps down to a low of 0.6 Mbps, Akamai says.
Average peak connection speeds above 100 Mbps were observed at several providers, while 3.1 Mbps was the slowest seen.
But it is the growth of mobile Internet adoption, more than the raw speed increases, that are most notable.
Based on traffic data collected by Ericsson, the volume of mobile data traffic increased by 70 percent from the fourth quarter of 2012 to the fourth quarter of 2013, and grew approximately 15 percent between the third and fourth quarters of 2013.
As always, “average” means little. Despite the improvement, half of the countries or regions listed among th…

600-MHz Spectrum Set Aside Would Imperil the Whole Auction, Study Suggests

After studying data from the 2006 AWS-1 spectrum auction, researchers at the Phoenix Center for Advanced Legal & Economic Public Policy Studies conclude that Federal Communications Commission plans to restrict bidding by AT&T and Verizon, to ensure that small service providers get a significant portion of the awarded spectrum, might imperil the whole auction process.
The reason is the complicated structuring of the two auctions needed to clear former broadcast TV spectrum, and then to auction that spectrum to mobile service providers. One important facet of the auction process is that unless license holders agree to sell their spectrum, there will be no spectrum to auction for mobile service providers.
In other words, the FCC must first convince broadcasters to part with their spectrum, either going out of business, sharing spectrum with other broadcasters or moving to different frequencies. And the surest way to entice license holders to give up their spectrum is to promise hig…

Gigabit Access Also Disrupts an ISP's Other Lower-Speed Offers

AT&T says it now is looking at building gigabit networks in up to 100 cities and towns nationwide, including 21 new major metropolitan areas.
The list of 21 candidate metropolitan areas includes Atlanta, Augusta, Charlotte, Chicago, Cleveland, Fort Worth, Fort Lauderdale, Greensboro, Houston, Jacksonville, Kansas City, Los Angeles, Miami, Nashville, Oakland, Orlando, San Antonio, San Diego, St. Louis, San Francisco, and San Jose.
AT&T now has committed to or is exploring 25 metro areas for gigabit networks , including the networks AT&T is building in Austin and Dallas, and the likely networks in Raleigh-Durham and Winston-Salem, N.C.
AT&T faces both strategic and tactic issues as it weighs what essentially are gigabit “spot upgrades.”
At a strategic level, AT&T has to avoid finding itself relegated essentially to the third choice in many markets, behind Google Fiber and a cable operator, as a desired provider of high speed access.
Up to a point, AT&T might also w…

Aereo Case is early 21st Century Equivalent of Betamax Decision

Aereo, and the broadcast TV networks and their local affiliates, will have a key U.S. Supreme Court hearing on April 22, 2014, when broadcasters challenge the legality of Aereo's “subscription broadcast TV online” service.
It would not be inappropriate to argue that the outcome of the case will reshape "broadcast TV" as much as the Betamax decision reshaped video entertainment in the 1980s, when broadcasters argued that use of a VCR was similarly illegal.

ABC, CBS, NBC and other major broadcasters allege that Aereo is no different from cable and satellite firms that “retransmit” broadcast TV content, and therefore must pay the same sorts of fees as video entertainment distributors.

Aereo argues it is simply providing an over the air antenna on behalf of its customers, who stream the signals over the Internet.

Aereo might lose, and discover its business model is untenable. Aereo might be deemed lawful, undoubtedly leading broadcasters to try and get the U.S. Congress to pas…