Will Video Kill the Internet?

All observers would agree that online video dramatically changes bandwidth consumption, by a factor of 10 to 100 times. That leads some observers to worry that increasing video consumption will crash the networks.

It is a fact that Netflix's 16 million subscribers now watch enough online video that Netflix traffic alone accounts for 20 percent of all Internet traffic during the typical American evening, according to Sandvine.

But assuming markets are simply allowed to work, higher spending by end users to watch video online, whenever they want, as much as they want, will be tempered by their own rational decisions about how to consume video so as to optimize their own spending.

If a user today wants to watch programs delivered by multichannel video services on a TV screen, whenever they want, they can pay for digital video recroder services that allow them to do so, at one price point.

If they want to do roughly the same thing online, with less choice, viewing on their PCs or paying for services or equipment to sent that video to TV screens, they will pay different or additional amounts of money.

The point is that consumers will make rational choices about "what I want, when I want" viewing. If the price of viewing online climbs, as a rational observer would assume it must, over time. then the attractiveness of a linear format with DVD storage becomes quite obvious.

People will decide the value of a multichannel video service with DVD capabilities offers quite a value, compared to an online alternative. that offers only some of the content.

That's the part of the online versus offline versus linear delivery discussion that does not typically get factored in. Consumers will make different and rational choices when the cost of viewing on demand using various channels becomes explicit.

Will Netflix Kill the Internet? - BusinessWeek

Mobile Broadband Pricing Suggests it Is Not a Commodity

Some might look at how mobile broadband gets priced, on a cents per megabyte basis, and conclude that the pricing is somehow irrational or confusing. Some might say the pricing actually illustrates the fact that mobile broadband is not a commodity subject to uniform pricing across all use cases and devices.

AT&T charges smartphone users 8 cents per megabyte for 200MB of data, but 3G USB modem and MiFi users pay 18 cents per megabyte for the same 200MB. Corporate smartpone users pay 2 cents per megabyte ($45 per 2GB), but USB and MiFi users fork over just 1 cent per megabyte ($60 for 5GB). And AT&T charges pay-as-you-go tablet users $15 per each additional 200MB of usage, but it charges pay-as-you-go smartphone users $10.24 per additional 1MB -- that's 128 times the price per megabyte.

T-Mobile charges smartphone users less per megabyte than it does tablet and USB/MiFi users. You pay 5 cents per megabyte for the basic smartphone data plan ($10 per 200MB) but 10 cents if you use one of the other devices ($25 for 250MB). It makes sense that the company's unlimited data plans' pricing favors smartphone users ($30 versus $40), as tablets and laptops are likely to eat up more data than smartphones. "But when you're paying for a set amount of data, the 2:1 cost difference doesn't make sense," InfoWorld says.

The same situation occurs at the other leading mobile carriers as well. Some would argue that is irrational, since the "access" is a commodity. Others would counter that the different pricing suggests the access is not a commodity, and that value, hence price, varies according to the usefulness of access when used in different settings and in different ways.

The price of a beer is different when you pick up a six-pack at the grocery store, when you buy one beer at a restaurant and a different price on an airplane. The beer might be identical; the use case is not.

The same thing is true of mobile broadband: its value and price does vary based on the use case, the types of devices and the applications the bandwidth supports. Even within each use category, prices will vary based on the amount of data the user expects to consume, and the preferences a provider might have for encouraging or discouraging some forms of usage.

Some of us would argue that the variegated pricing actually shows that mobile broadband is not a "commodity," anymore than various use modes for voice, video or messaging actually are.

The strange, unpredictable pricing of 3G data plans

Consumer Reports readers say AT&T wireless service got worse this year

Consumer Reports reportedly says its latest survey of consumers suggests AT&T's investments have not prevented user perception that service quality has gotten worse over the last year, not better.

Consumer Reports: AT&T is the worst carrier

ESPN Finds Few Cutting Cord on Cable

Video cord cutting, where consumers disconnect a cable, satellite or telco video service, has happened in 0.28 percent of households in the United States in the last three months, ESPN has found. Offsetting those losses, though, 0.17 percent of households that had been broadcast-only signed up for multichannel video service.

“So the net amount of cord-cutting for one quarter was just one-tenth of 1 percent,” said Glenn Enoch, the vice president for integrated media research for ESPN.

ESPN Finds Few Cutting Cord on Cable - NYTimes.com

Google Chrome OS Netbook to Launch?

Google could be about to launch the first netbook running their new Chrome operating system, as they host an event in San Francisco tomorrow promising 'exciting news'.

Chrome OS is designed to be a 'cloud' operating system, designed to be lightweight, quick to start up, and based around online applications rather than the traditional desktop programs most operating systems rely on.

Engadget reports that Google will initially only be releasing 65,000 of the machines, mostly going to Google's "friends and family."

So how big a change could the new operating system represent? Perhaps every user will have a different view. One might argue that device operating systems are less important than they used to be, simply because much of the important stuff people do now is a web interaction of some sort.

Still, many users will continue to have one or several important apps that require use of a Windows or iOS environment, typically related to work requirements. For lots of other users without these constraints, the choice might be an iOS environment (driven less by OS considerations than the fact that desire to use Apple devices drive the purchase) or Windows or some other OS that offers a lower device purchase cost (whether directly related to the OS cost or not).

Some of us now do virtually all of our "work" on the web, or using the Internet. I recently realized that the only times I will ever "work" on a PC of any sort is long enough to edit one or two blog posts on an airplane. At all other times, I am connected to the Internet or I don't use the PC. That's just an illustration of the fact that, these days, "doing things with PCs" means "doing things on the Internet."

But that also means the device OS is much less important than it used to be, and removes barriers to adoption of new operating systems. Aside from the fact that using an iPad has more to do with coolness than functionality at this point, many will say a key feature is the "instant on" capability, eliminating the time spent waiting for the OS to load. Aside from everything else, that probably is going to be a more-important feature, going forward, for smartphones, tablets and PCs.

If, every time you power up a PC, tablet, or smartphone, you have to wait, it is a reminder that there is something about that device which is annoying. For users who don't have to power up, and power down, their devices frequently during the day, that irritation might not happen so often. For some, who might frequently have to do so (flying, changing planes, sitting in conference sessions where they want mobiles turned off, using wireless microphones where the devices really have to be off or there is signal interference, or just users who don't like the devices being "on" for other reasons as they move about...such as the danger of disabling a hotel room key card), "instant on" will be a welcome feature throughout the day, simply because devices get turned off and on frequently.

The point is that changing an operating system does not require so much thinking as it used to. That, in turn, makes other attributes of the experience more important.

Google Chrome OS netbook to launch on Tuesday? | Metro.co.uk

Netflix Now Competes with HBO, Showtime, Starz

Virtually everybody believes that online video competes with multichannel video services, for user engagement and time if not yet so much revenue.

The corollary is that Netflix competes with Blockbuster, Redbox But one might argue Netflix increasingly also competes with the "premium" networks such as HBO, Showtime and Starz.that historically have made a business out of showing movies.

Netflix soon will have as many subscribers as Starz and Showtime put together. At the very least, Netflix growth is going to cap premium channel growth. One can argue about how much Netflix competes with the "basic" channel subscriptions most Americans buy.

So far, one might argue that is a lesser, hard to quantify level of competition. Right now, Netflix has largely vanquished its DVD rental competitors and might be viewed as cannibalizing the premium channels next.

iPad Faces Pricing Challenge

Two thirds of people who are thinking of buying an iPad in the next 12 months are expecting to pay less than the current lowest retail price, according to Strategy Analytics. About 66 percent say they will pay less than $500 or €500, and half of those say they want to pay less than $300 or €300.

Strategy Analytics surveyed nearly 5000 consumers across the United States and four major European markets as part of the study.

One might draw several conclusions. Consumers already are conditioned to expect price declines for any digital appliance over time. They already expect to see "newer" models, every year or so, that maintain current prices for models with new features, but also expect current models to be sold at lower prices.

But the findings might also illustrate demand for lower-cost alternatives. Given Apple's historic emphasis on selling at premium prices, that would also suggest there is a relatively-big market for lower-cost tablets. Though the analogy is not exact, one might point to an eventual market where Apple has less share, but more share at the high end of retail pricing, while Android devices have more of the market overall, and dominate in the "value" and mid-range parts of the market.

Already we are seeing a proliferation of (mostly Android-based) tablets arriving on retailers’ shelves, often at iPad-undercutting prices. Staples is offering a 10″ Viewsonic, Android 2.2 device at $400.

iPad Faces Pricing Challenge

Wireless Now the Majority of Broadband Connections

The Organization for Economic Cooperation and Development reports that Korea (95 percent), Sweden (76 percent), Japan (75 percent) and Norway (73 percent) have the highest wireless broadband penetration in terms of subscribers per 100 inhabitants.

Among the countries which have been able to report complete data, standard mobile broadband subscriptions usually represent the majority of wireless broadband connections.

Satellite and terrestrial fixed wireless subscriptions represent a small share of wireless broadband subscriptions. Its penetration rate is slightly higher only in the Czech Republic (6.5) percent, the Slovak Republic (three percent) and Ireland (two percent).

Broadband Portal - Press Release (June 2010 data)

Why SMS Marketing Still Makes Sense for Small Business in a Smartphone and Tablet Market

The mobile phone is the first piece of technology that people started carrying with them all the time. It's the most-personal technology tool most people use and though it always has been used to "communicate," it also now is used as a "social tool" to keep in touch with people and content each user cares about.

And since most people still do not use any form of mobile broadband, voice and text remain the universal common denominators for any marketing campaigns aimed at mobile users. It might not be the most "sexy" channel for mobile marketing. That position increasingly is occupied by video and display advertising for the mobile channel. But voice and text remain the universal tools in terms of reach, and the ability of a small entity to afford the creation and execution of a campaign.

Not many smaller businesses can spend $1 million on a single display campaign, for example. Most can afford text campaigns built on their own internal databases.

Why SMS Marketing Still Makes Sense for Small Business

Is the Next Great Wave of Internet IPOs About to Hit?

The last big wave of Internet initial public offerings happened a decade ago. Some think the next great wave is about to break. Facebook, Twitter, Zynga, Groupon,Facebook, LinkedIn, Yelp, Hulu and eHarmony are some of the possible candidates to lead the wave.

That likely is going to bring more luster to the Internet stock sector, app venture capital activity, some predict. Some likely will argue a second great IPO bubble would be a more-apt description. Either way, it is possible that the next generation of Internet leaders will be funded in the wake of any IPO wave.

We might not see the full impact of those start-ups for as much as another decade. The trick, one might argue, is not to get "bubbled" by the possible wave.

6 Reasons Groupon's Rejection Of Google Is Great For The Universe

Google Gains Market Share in U.S. Mobile Ads, Local Will be Dominant by 2014

Google will widen its lead in the $877 million U.S. market for mobile advertising, ending the year with a 59 percent share, according to research firm IDC.

Google's share will increase from 48.6 percent last year, before it bought mobile-ad network AdMob, IDC says. AdMob, which had an 8.4 percent share in 2009, was bought by Google in May. Apple may finish with less than 10 percent, IDC says.

None of that likely is as significant as a separate projection by BIA/Kelsey that U.S. mobile local advertising revenues will grow from $213 million in 2009 to $2.03 billion in 2014. That's about a 57 percent compount annual rate of growth.

But event that is not the most-significant implication. The eye-popper is that local mobile advertising already represents 44 percent of total U.S. mobile ad revenues in 2009, growing to 69 percent in 2014. Basically, mobile advertising, in 2014, is going to be dominated by various forms of local advertising, using the location features of mobile devices to target messages to end users in various ways.

See more on the shape of the mobile marketing market here: Mobile Marketing and Technology

Read more about mobile ad share here: Google Gains Market Share in U.S. Mobile Ads - BusinessWeek

Skype’s Move To The Web

Skype long has been a client-based service, but Skype now is planning on adding browser plug-in access as well, which should make the service available to many more people.

Skype is hoping to launch its web-based service in the first quarter of next year. Skype is reported to be talking to sites such as LinkedIn for integration.

Most proponents of IP-based voice have assumed such integration would happen, for some years. So it isn't so much the move to a "no client" access, but rather than the access will be happening on a major scale.

On the Internet, there might typically be few significant barriers to entry. But there are lots of barriers to gaining scale. Skype is about to become more dangerous for firms that compete against it directly, and some that compete indirectly.

More Details On Skype’s Big Move To The Web

QR codes on TV

I'm seeing more "quick response" codes on billboards and on magazine pages. I admit I haven't seen any yet embedded into TV commercials, but apparently Waitrose, a U.K. supermarket chain, is doing so. As always these days, the business value is to turn a "non-interactive" message into an interactive session by redirecting users to a webpage.

Waitrose now putting Android QR codes on its TV adverts

Tablets Cannibalizing Both Laptops and Netbooks

Logic would suggest that tablet devices partly represent a new product category, but also partly will cannibalize some other related products, such as e-readers, laptops or netbooks.

Conventional wisdom suggests that, to the extent there is product substitution, tablets will cannibalize netbooks, and a new survey by Google suggests there is some truth to that notion. About 9 percent of laptop shoppers, and 19 percent of notebook shoppers, indicated they at least considered buying a tablet instead.

One suspects there will be stronger substitution patterns over time as lower-cost tablets appear in the market. Looking only at device cost, and not capabilities, many consumers might conclude that a netbook or laptop costs $100 to $300 less than a tablet, thus providing the better combination of value and price.

A change in tablet retail price could change behavior, though, encouraging a wider range of notebook and netbook buyers to consider getting a tablet instead.

Tablets Cannibalizing Both Laptops and Netbooks

Yahoo To Launch Own Business Video Show

Yahoo will significantly increase its original video offerings in 2011 with a new business show on Yahoo Finance, scripted entertainment programming and with news video in a number of vertical areas, say Erin McPhearson, VP & Head of Originals and Video Programming, Yahoo!

Beet.TV: Yahoo's Big Video Plans: New Business Show, Scripted Entertainment and News Verticals