100 Mbps is Really Nice: How Many Really Need It?

Aside from the general observation that marketing bragging rights are a key reason for touting really-fast broadband connections, one wonders how much real value the typical consumer customer gains.

Cablevision Systems, for example, is on the verge of launching a 101 Mbps (downstream) service costing $99.95 a month. Other service providers have been marketing 50-Mbps services (downstream).

But one wonders how much traction such services will get in the consumer space. To be sure, a 101-Mbps access connection better matches common in-home or on-premises bandwidth supported by Wi-Fi routers.

But it remains unclear how much incremental value the additional bandwidth provides, as many factors affect perceived performance. It won't help to have a really-fast access connection if the servers holding the content one wants to access are not capable of spewing out bits equally fast, if the backbone networks are congested or if there are end user device limitations.

A single user on such a connection (50 Mbps to 100 Mbps) might not have an experience any different from a user with a 10 Mbps or 20 Mbps connection.

To be sure, one can note that bandwidth requirements keep growing. The change from text to graphics generated a one to two order of magnitude increase in bandwidth requirements, for example. A text screen is typically 400 bytes, while a graphic screen can be 50 Kbytes to 100Kbytes, an increase of 10-100 times.

Similar changes can be noted for streaming audio or video. So bandwidth requirements will increase over time. The issue is how much, and for whom.

Locations with many users to support--businesses and large families--will have higher requirements.  In some cases, a family might benefit from having that much bandwidth if multiple users, working simultaneously, frequently are downloading or streaming high-quality video, for example.

Still, one fact is incontestable: the larger the degree of sharing, the more efficient the multiplexing becomes. The ability to share bandwidth becomes more efficient as more users are sharing any single link. So the increased demand will not be linear.

A typical single user, on a single link, might not require so much. By the same token, it isn't clear how much bandwidth a single user, on a single link, actually benefits from really-fast connections, beyond a certain point, as other variables also condition and limit the experience.

That isn't to say access bandwidth requirements are not growing, or to argue those requirements will stop growing. Having the opportunity to buy faster connections is valuable for some end users, particularly those with multiple users in a single household. It is much less clear how much additional utility is gained by the typical single user.

2007 was the Inflection Point for News

This is what you call an inflection point: a dramatic surge in people using the Internet as their primary source of news happened in 2007.

By late 2008 and early 2009, the dominoes started to fall and major U.S. newspapers began to disappear. 

Remote Work Might Pay Off During H1N1 Threat

Yankee Group survey results from April show workers to be highly receptive to a mobile lifestyle:  Fewer than 50 percent of respondents believe their work needs to be completed at their primary workplace.

And 58 percent of workers strongly agree that "allowing employees to work from home benefits companies." Employees who work from headquarters locations are just as likely to think that teleworking is a good idea as those who already are teleworkers.

With the H1N1 virus threat reaching global pandemic status and growing talk of the need to avoid large public gatherings where possible, the value of organized remote work capabilities is obvious.

Not every job can be done as effectively on a remote basis as in a physically co-located mode. But many more jobs can. As it turns out, remote work is not just an employee satisfaction enhancer, a cost reducer and in some cases a productivity-boosting measure, it also provides protection from pandemics and other potential disruptions of civil life.

Disney Joins Hulu: More Pressure for Linear Video

Disney and Hulu announced a new partnership and content distribution deal, under which The Walt Disney Company will join News Corp and NBC Universal as an equity partner in Hulu, an ad-supported online content distributor. The deal means content from ABC, ABC Family, Disney Channel, and SOAPnet, as well as some classic ABC TV content now will be made available on Hulu.

Hulu also has overtaken Yahoo! and become the third-most-used Internet video site, even as Time Warner plans a test later this year of its own distributor-friendly online distribution. As envisioned, the "TV Everywhere" plan will make online content available to paid subscribers to a qualifying cable, satellite or telco linear programming package.

With Apple, YouTube, NetFlix and others looking to grow their streaming operations, distributors might welcome the Time Warner approach, even though Hulu has undeniable traction at the moment.

And therein lies the distributor's problem. If Hulu is able to keep growing, with an obvious ad support mechanism, it necessarily will devalue linear video subscriptions. That isn't to say Hulu will completely replace linear TV offerings, simply that it becomes incrementally more attractive for at least some users.

But content companies aren't dumb. They know with great precision how much value they derive from their distributor partners.  That doesn't mean they will ignore new "direct to end user" venues that essentially disintermediate the middle man. But they aren't going to disrupt profitable arrangements with distributors, either. 

Consumers Wary of Trying New Brands, Are Businesses?

Consumers around the world are more wary of trying new consumer goods products in the midst of a recession, say researchers at Ipsos Marketing. The global survey of consumer attitudes and behavior in 18 countries suggests that more than half of global consumers shy away from new grocery, personal and household products during an economic downturn.

One wonders if that same pattern extends to the business market as well, and explains the lower churn some service providers are reporting. There is anecdotal evidence that business customers, for example, are showing more hesitation about switching communications service providers, even as more seem to be receptive to pitches about "saving money."

Indeed, it would seem that many consumer attitudes also have a parallel in the small and medium-sized business markets. Some 70 percent of global consumers say they are not likely to try a new beauty product, for example. So new products and unfamiliar brands face an uphill battle. That might apply to hosted communications services or even, in some cases, uptake of new IP-based phone systems.

On the other hand, some 80 percent of global consumers say they are "very" or "somewhat likely" to switch from their usual brands to lower-priced brands or brands that are on sale during an economic downturn. That suggests a heightened sense of insecurity is likely in the background whenver a new provider or offer is weighed.

Communications is more a relationship than a one-off purchase, so consumer trends do not translate neatly to the world of communication services. Some 72 percent of consumers say they would switch to "store" or "generic" brands. The analogy would be switching from a recognizable communications "brand" and a company "they haven't heard of before."

“It is discouraging to think that new product introductions and carefully planned brand strategies might suffer from bad timing,” says Sunando Das, Ipsos Marketing VP. But one bit of advice clearly does apply to most communication services.

"Marketers can, and must, focus is value," says Das. Value obviously is a higher priority for consumers during an economic downturn. That doesn't necessarily mean pricing has to change, he says.

But consumer perceptions about benefits compared to cost should be explored to make sure consumers think there is a fair trade-off, he says.

http://www.ipsos-na.com/news/pressrelease.cfm?id=4337&wt.mc_id=1110011&ce=garykim.denver@gmail.com&link=4337&top=

Does it Matter Whether VoIP is Dead or Not?

It's typically pretty easy to get a robust conversation going about whether VoIP is dead or not, and what each of us means when taking a position either way. Interesting viewpoints exist on either "side" of the debate, relevant for technology enthusiasts and developers but rarely of interest to the mass market that will use the technology.

One might as well say, in advance, that now that Twitter seems to be reaching some sort of inflection point or critical mass, lead technology adopters and developers will move onto the next big thing. Technology rarely is interesting to technologists when it is simply "there."

I remember the same thoughts expressed about session initiation protocol. The disenchantment isn't worrisome. Technology enthusiasts simply have different values than mainstream users, who just want value they understand, easy to use, acquire and support, at fair prices.

Technologists love technology. Most people don't care, so most large, successful businesses are built in ways that hide technology from end users. It makes about as much sense to argue about whether "electricity is dead, or not," as it does to worry about whether VoIP is, or is not.

Technology always is most successful, and most ubiquitous, when it is just furniture. VoIP isn't yet "just furniture." But that is where we inevitably will go.

http://blog.radvision.com/voipsurvivor/2009/04/30/it’s-about-time-we-kill-voip/

58% Local Search Growth in 2008

Local search, using online search tools to find local businesses, products, or services, grew 58 percent in 2008, reaching an annual total of 15.7 billion searches, says comScore. By comparison, overall core U.S. Web searches grew 21 percent year-over-year, nearing 137 billion searches by the end of 2008.

About 75 percent of the top 100 keywords searched on Internet Yellow Pages sites were non-branded, indicating that a majority of consumers have not decided on a specific company or product brand when they begin their search, comScore says.

Nearly half (45 percent) of Internet Yellow Pages and local online directory searchers made an online purchase in the fourth quarter of 2008.

One wonders whether Google Maps and mobile Web access have at least something to do with the growth. Local search makes much more sense when one is out of the home or office, and Google Maps, with or without global positioning satellite support, makes it really easy to search for something one needs, where one is at the moment.

The other angle is that small businesses, which operate locally, now are investing more heavily in Web sites, which would allow them to be found more easily.

http://www.marketingcharts.com/interactive/local-search-grows-58-outpaces-overall-online-search-8929/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink

http://www.marketingcharts.com/interactive/smbs-poised-to-triple-website-spending-8894/

Satellite Broadband: What Will Reviewers Do?

There is little doubt but that satellite broadband providers will try to secure broadband stimulus funds to subsidize the cost of customer premises equipment, a move that Hughes Network Systems SVP Mike Cook believes could increase its subscriber base by an order of magnitude.

WildBlue presumably also would see customer lift if such subsidies were possible.

There also is some speculation that funds could be sought for new satellite construction to offer customers much-higher access speeds.

Anything is possible, of course. But if I were reviewing grant applications, I'd be looking for projects that get broadband services to people as fast as possible, to as many people as possible, creating new jobs now, are sustainable after grant funds are gone and can get services to the most-isolated locations, across the United States, now.

Anything is possible. But looking at funding for new satellites that might not be launched for years, and consuming lots of program cash, compared to spending lots less and serving lots of rural customers now, would rank a lot higher.

Politically, I'd also (for better or worse) be looking in advance for evidence to justify why I made my decision. Enabling new broadband services to rural residents in all 50 states, within months, is safer than defending a relatively signficant capital investment that won't result in new services for some years.

Also, as a reviewer, I would be looking to get the biggest bang for the buck, spreading the money as widely as possible. On that score, subsidizing CPE would seem a more defensible choice that building satellites.

Social Gaming Grows

The number of people playing social games is expected to surge to 250 million in 2009, from 50 million in 2008, by some industry estimates. And there is a shift in the way games are used. Connecting with friends, and doing things with friends or other people, now is becoming more important.

It's but one more example of how social aspects of gaming, media and content consumption are growing.

http://www.businessweek.com/technology/content/apr2009/tc20090429_963394.htm

Video, Social Networking Top Online Growth

Online users have significantly shifted their interests over the past five years, say researchers at Nielsen Online. Where  portal-oriented browsing sites, such as shopping directories, guides and Internet tools or Web services used to be the top categories for user engagement, today the active Internet user tends to prefer sites that contain more specialized content.

There is a growing shift to more-fragmented usage, in other words, as well as more use of video and social sites. Video and social networking sites are the fastest-growing sites in 2009.

The number of American users frequenting online video destinations has climbed 339 percent since 2003, for example.  Time spent on video sites has shot up almost 2,000 percent over the same period.

In the last year alone, unique viewers of online video grew 10 percent, the number of streams grew 41 percent, the streams per user grew 27 percent and the total minutes engaged with online video grew 71 percent.

There also are 87 percent more online social media users now than in 2003, with 883 percent more time devoted to those sites.

• In the last year alone, time spent on social networking sites has surged 73 percent.

In February, social network usage exceeded Web-based e-mail usage for the first time.

http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/04/nielsen-online-global-lanscapefinal1.pdf

1 of Every 7 Minutes of Media Use are on Mobile

More than a third of high-use smart phone users are taking action on mobile advertisements, according to AOL Platform-A and Interpublic Group of Companies UM. About 53 percent of smart phone users are clicking on advertisements.

Some 35 percent are requesting more information or a coupon, while 24 percent are making purchases, a new study sponsored by AOL and UM indicates.

The study shows 82 percent of smart phones get used at work while 81 percent are used while people are shopping. Currently, nearly one of every seven minutes of media consumption takes place on a mobile device, and six of every 10 consumers expect their mobile internet usage to increase significantly over the next two years, AOL and UM say.

And though there was a time when mobile Web access might once have been an area where U.S. consumers trailed other consumers, that is no longer the case. In fact, mobile Web access is so widespread that the use cases are morphing.

"Now mobile is less about 'wireless online' and more about being a highly personal, customized medium," says Graeme Hutton, UM director. So the big question is how smart phone applications evolve in the direction of  answering unmet needs. The mobile Web is not simply a mobile version of the PC-accessed Web, in other words. It might be evolving in the direction of becoming a medium in its own right.

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/04-28-2009/0005014377&EDATE=

Mobile Twitter Passes ESPN, Facebook, and Google

Subscribers to paid community Predicto are different from users of the free mobile Twitter community, says Nielsen Mobile. Twitter has a dominant presence among young and male oriented audiences while Predicto attracts a more mainstream following with a broader penetration, particularly with the female and older demographics.

Twitter is the leading free mobile community, and Predicto is the largest paid mobile community, Nielsen says.

In the fourth quarter of 2008, Twitter amassed approximately 812,000 unique text messaging users, while Predicto Mobile interacted with over 2,303,000 unique users, according to Nielsen Mobile.

Some other key differences in the user breakdown of the two leading mobile communities include 57/43 percent male/female ratio for Twitter versus 45/55 percent for Predicto.

Some 49 percent of Twitter users are in the 35-plus age group versus 68 percent with Predicto. About16 percent of Twitter users earn $100,000 or more compared to 20 percent for Predicto.

During the fourth quarter of 2008, Twitter overtook other free mobile services including ESPN, Facebook, and Google. At the same time, Predicto remains the undisputed leader in the premium mobile space, further distancing itself from NBC in second place, Nielsen Mobile says.

http://www.prweb.com/releases/2009/04/prweb2367764.htm

Bye Bye RGU, Hello PSU, Says Time Warner Cable

New markets require new terminology. When the competitive local exchange business was roaring in the late 1990s and early 2000s, companies reported using a metric known as "voice grade equivalents," a metric they deemed a better measure of growth than "lines."

Likewise, cable operators began reporting "revenue generating units" when they ramped up new services ranging from voice and broadband Internet access to various types of digital video products.

So Time Warner Cable is using a new subscriber metric its calls a "primary service unit, which the company defines as the total of all discrete video, high speed data and voice subscriptions. A single household buying voice, broadband and video would repreent three PSUs.

The older RGU numbers are similar, but have included digital video or VOD services purchased in addition to basic cable. The new PSU metric presumably is intended to better reflect discrete numbers of voice, broadband and video accounts sold.

In the first quarter, for example, Time Warner Cable reported 26 million PSUs, but 34.8 million RGUs.

http://files.shareholder.com/downloads/TWC/629033522x0x290734/4e925b06-841e-47d8-bcc6-bc8f52f1973a/290734.pdf

Time Warner Cable Reports: Still No Evidence of Cord Cutting

Time Warner Cable first quarter results are in, and, so far, nothing unexpected seems to be happening, relative to financial or subscriber behavior attributable directly to the economy. Comcast reports tomorrow, so we should be in fairly good shape as far as analyzing whether reported or claimed consumer intent to drop video subscriptions, or even scale them back dramatically, is happening.

So far, with results in from Time Warner, AT&T and Verizon, we can note that, despite what people might say, or what observers might believe, the business remains quite stable. We'll have to wait for several other reports from major satellite and wireless providers to assess what is happening with wireless, and to flesh out the video numbers.

But, so far, nothing unusual can be seen. Share shifts continue. Consumers might be scaling back on premium services or discretionary purchases such as video on demand. All of that is typical for a recession. But there is so far no serious evidence of any significant shift in behavior, compared to past recessions, in the video or fixed broadband segments.

Wireless might be a different matter, as the two major providers one suspects will show market share pressure have not yet reported. The issue is whether total postpaid wireless subscriptions have declined. Some shift to prepaid is expected, which potentially could lower average revenue per user, if new data service revenue does not grow faster than the slippage to prepaid voice. So far, data revenue growth remains brisk, so ARPU has not fallen. In fact, it has grown at AT&T and Verizon Communications, the two major wireless companies to report so far.

Time Warner Cable revenues for the first quarter of 2009 increased five percent ($204 million) over the same quarter of 2008,  to $4.4 billion. Subscription revenues grew six percent ($256 million) to $4.2 billion. Video revenues rose two percent ($64 million) to $2.7 billion, driven by video price increases and continued growth in digital video subscriptions partially offset by a year-over-year decrease in basic video subscribers and premium channel and transactional video-on-demand revenues.

High-speed data revenues increased 11 percent ($107 million) to $1.1 billion while voice revenues were up 23 percent ($85 million) to $451 million. Advertising revenues declined 26 percent ($52 million) to $145 million.

Customer relationships were 14.7 million as of March 31, 2009. Primary service units, which represent the total of all video, high-speed data and voice subscribers, reached 26 million with net additions of 435,000 during the first quarter of 2009.

Revenue generating units (“RGUs”) totaled 34.8 million – reflecting net additions of 556,000 during the first quarter of 2009.

Triple Play subscribers exceeded 3.2 million (or 22 percent of total customer relationships), benefiting from 146,000 net additions during the first quarter of 2009.

Video penetration now is at 48.7 percent while high-speed data penetration of the customer base now is at 33.5 percent. Phone penetration is at 15.1 percent of the customer base.

Some 55.2 percent of households buy a bundle of some sort. A third of households buy a triple-play package, while about 22.1 percent of those bundle buyers take a double play.

Perhaps the most shocking number for anybody who has followed the cable industry over the past couple of decades is customer penetration of homes passed. Time Warner Cable today sells a service to 54.5 percent of locations the network passes. But looking just at multi-channel video, Time Warner sells video services to just 48.7 percent of households passed, down sharply from the nearly-70-percent levels operators used to have in many markets.

Industrywide, cable penetration now is at 51 percent, according to the National Cable & Telecommunications Association.

Mobile and Social Network Ad Revenue Hot Through 2014

Mobile and social networks are the hottest areas of online advertising growth, say researchers at Forrester Research.
The cumulative average growth rate for the six-year period from 2008 through 2014 is 17 percent, Forrester Researchers say. However, the growth rate for mobile advertising is much higher, at 27 percent per year, and the growth rate for social network advertising is 34 percent per year.
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