Verizon Could Offer "Drip-Casting" Video

And engineer can tell you that there always are trade offs in communications. And since peak-hour congestion is a growing problem, it comes as no surprise that mobile service provider executives are looking at ways to create incentives for off-hours consumption, much as they offer off-peak calling.

Now called "drip casting," the technique is what engineers call "store and forward." The idea is that when a consumer wants to watch a movie, the carrier could offer incentives to order ahead of time, instead of "now," allowing the carrier to stage delivery of the bits over time, at times when the network isn't congested and can more easily handle the load.

The value exchange could be as simple as "use drip casting and the data won't count against your data cap." Drip-casting

Video content distributors also use the concept, though not for reasons of bandwidth efficiency. Tivo, or any other digital video recorder, essentially "catches" data when it actually is transmitted and then stores it for later viewing. It's a variation of the basic technique, which is that transmission of data and consumption of that data occur in non-real time.

The other angle here is that the plan is a bit of a shift in the direction of value-based charging, where the "price" or "rate" for some use of the network varies based on the value of the sessions, or the timing of the sessions.

In this case, consumers receive the value of a big download that isn't charged against their data plan, while the service provider receives the value of alleviating strain on the network.

U.S. Consumers Reducing Entertainment Spending?

From 2000 to 2008, adjusted for inflation, U.S. consumers have been reducing the amount of money they spend on out of home entertainment. That obviously has implications for providers of video entertainment products, negative for out of home venues but positive for in-home options. 


The issue is that Blu-ray, so far, has not grown fast enough to offset declining DVD product purchases. In the technology transition from tape to DVD, the new format seemed to have higher value, boosting sales of physical media and gjrowing the category. 


That has not yet happened with the transition to Blu-ray, and an obvious conclusion would be that the successor product to DVDs is not Blu-ray but online delivery. 

via

Ultraviolet Initiative Illustrates Business Issues

UltraViolet, the digital rights management initiative and "content locker service" backed by Warner Bros., Universal, Sony and Paramount illustrates some long-standing issues in the video content business, as well as an application of traditional thinking to a new channel, namely "cloud-based" applications and channels.


In many ways, Ultraviolet also illustrates why, though we keep getting more options for online delivery of content, in the movie and TV business, the range of options will be shaped and controlled, at least in terms of pricing and availability, by the willingness of content owners to make their content available online. 


The key implication might be that, in the case of popular movie and TV content, consumer access and pricing might not be subject to all of the retail pricing trends we have seen in the music and print content business, with one key exception.


One might argue that the pricing declines we have seen in print and music products now consumed online is due to a change in packaging, in large part. Music used to be as "albums," while print content has been sold as a bundle known as a newspaper or magazine. 


Online delivery unbundles those products into discrete songs and stories. If you assume there is a significant difference in value and pricing for a bundle of 10 to 12 songs, compared to buying one song, you also can see the analogy to pricing changes for buying one story as opposed to a whole newspaper or magazine. 


Also, you might say that in the case of print content, one version of a story that has to be bought also faces pressure from other versions of a story that might be available for free. The other bit of context is that movies traditionally have been a "fee-based" product, where print content typically has been an advertising-supported product.


Broadcast television has been more like print, in terms of end user pricing, while cable, telco or satellite TV pricing has been more like that of  movie products. 


UltraViolet is an effort to solve a couple of problems. 

UltraViolet will allow buyers of Blu-ray physical media to view those assets online, at no extra cost. For starters, the initiative is an attempt to preserve the value of existing channels even as the industry adapts to a new distribution channel. That is the thinking about nearly all content licensing schemes, as well as the system of staged release windows for access to movie content.

On the other hand, UltraViolet also is an effort to try and supply consumer demands for online viewing on any device, with declining sales of DVDs, which have been a key channel and revenue generator for decades.


To be sure, the original hope had been that the Blu-ray physical format would be the successor to DVDs in the era of high-definition television. That almost certainly will occur at some point, but the issue is whether collective Blu-ray revenue ever will match the heights of DVD sales in an era where online delivery will be common. 

UltraViolet further is an effort to create a revenue model for streaming, essentially by generating all the revenue when the physical product is purchased. That is similar to what cable operators are trying with TV Everywhere, essentially making purchase of the traditional video entertainment subscription as a prerequisite for using the no-incremental-cost TV Everywhere features.

It is something of a reverse "freemium" model, which gives away one product and then generates revenue on sales of add-on products. The Ultraviolet model does the reverse, making revenue on the classic product and then adding a "no additional fee" feature. The studios hope UltraViolet will help with the DVD sales drop

On the other hand, DVD sales have dropped precipitously over the last decade. The music industry faced roughly analogous issues, as have newspapers. 


As content migrates onto the Internet, there is a tendency for retail prices to fall. This price compression has affected major music label revenue from recorded music in part because of the ability consumers now have to buy songs one at at time, instead of bundled in the form of albums, which contain 10 or 12 songs and can be sold at a correspondingly higher price. 



UltraViolet aims to support DVD sales while providing something of the value provided by rental services as well, including Apple and Netflix. Ultraviolet

In principle, mobile-focused entertainment video has the same context as TV-focused entertainment in many ways. Movie products, which have been sold as discrete products, are less threatened than the bundled products we know as cable, satellite or telco TV.


Those products are susceptible to the same dangers as unbundling in the music business when sales shifted from collections to songs, or newspapers and magazines to stories. 










DVD sales dip

Computing Product Life Cycles

If you study consumer adoption of technology professionally, or just enjoy learning about product life cycles, this is useful, tracking adoption of various computing devices. It sure looks as though the PC is entering the peak of its product life cycle, doesn't it? PC product life cycles





Another way of visualizing PC lifecycles

International Long Distance Prices Decline 5% in 2011

"Prices in international long distance only go down," says Telegeography VP Stephan  Beckert. The only issue seems to be the rate of decline.

But that wasn't anything unusual in 2011. International long distance rates have been dropping since about 2000, though there are regional variations.

The declines are a serious issue for retail service providers, who are seeing increasing amounts of traffic "growth" siphoned off by Skype.

As a percentage of overall global bandwidth, though, video and Internet traffic now is what drives capacity requirements, not enterprise data or voice.

Will Mobile and Fixed Network Broadband Prices Start Increasing?

Scarcity, which many would say has been a key reason network owners have had business advantage, has generally been declining over the last several decades, as regulators have allowed competition for the first time, as public firms have been privatized, as cable, satellite and wireless firms have entered markets and as new technology has lowered costs.

But some would argue that a degree of scarcity is returning to both mobile and fixed markets, which could have important ramifications for the extent of competition and therefore pricing in broadband access markets.

In some markets, the capital requirements of competing in a fiber to customer environment, or fourth generation mobile network business, might actually reduce some competition, as some contestants find they cannot afford to make capital investments of their own.

You might well expect telecom executives to say that “scarcity” does convey business advantage, and that network owners are behaving rationally in making access to their networks as “scarce” a possibility as they possibly can.

In fact, analysts at HSBC argued early in 2011 that “a degree of pricing power is (at long last) becoming apparent in the telecoms sector, at least in Western European markets, thanks to scarcity emerging as a factor on both the fixed-line and the mobile sides of the industry.”

In fixed line, the capital required in the shift from copper-based infrastructure to fiber
platforms is reasserting the importance of scale at the expense of the un-bundlers, and resulting in a more benign pricing environment,” HSBC said.


Meanwhile, in mobile, the finite nature of mobile spectrum has already led operators to begin rationing capacity based on price.

Scarcity is the reason telecom always had been a monopoly in the past. It was deemed too expensive to build more than one network. In essence, that remains the thinking, in countries where there are robust mandatory wholesale requirements.

“We believe that this vital ingredient has been largely missing in both the fixed line
and mobile elements of the sector over the last decade, but is now making a reappearance; as a consequence, we think that telecoms should – at long last – begin to enjoy a measure of pricing power,” HSBC has argued.

The new element is the need to upgrade copper networks to optical fiber access, an undertaking expensive enough, with financial returns risky enough, to make would-be competitors think very hard about building their own networks. In fact, even regulators seem cognizant that the capital investment decisions are highly risky, encouraging rather new thinking about allowing investors to reap more of the rewards of their investments.

The point is that if scarcity does re-emerge in access, prices and revenue should improve.

Social and Mobile are Hard to Separate

The U.S. domestic social network audience represents 66 percent of U.S. Internet users in 2012, according to eMarketer. So it is safe to say that social networks are a foundation application for most Internet users.

Increasingly, it also is correct to note that social networking is a lead mobile application as well. Social networking increasingly is used on mobile devices.

Mobile social media usage across the five leading European markets (France, Germany, Italy, Spain and the United Kingdom) grew 44 percent in 2011, with 55.1 million mobile users in those countries accessing social networking sites or blogs using their mobile devices during September 2011.

In September 2011, 55.1 million EU5 mobile users made use of social networking sites or blogs on their mobile device, representing 23.5 percent of the total mobile audience. 

Nearly half – 46.8 percent – of this audience reported accessing social networking sites on a daily basis.

Mobile social media consumption might be even higher in the U.S. market., according to comScore, which reports that 72.2 million Americans used social networking sites or blogs on their mobile device in August 2011, an increase of 37 percent in the past year. 

The study also found that more than half read a post from an organization, brand or event while on their mobile device.

“Social media is one of the most popular and fastest growing mobile activities, reaching nearly one third of all U.S. mobile users,” said Mark Donovan, comScore SVP.

In August 2011, more than 72.2 million people accessed social networking sites or blogs on their mobile device, an increase of 37 percent from the previous year. Nearly 40 million U.S. mobile users, more than half of the mobile social media audience, access these sites almost every day, demonstrating the importance of this activity to people’s daily routine.

Some might say that the Internet is social; social is mobile; mobile is Internet.

You Cannot Keep Up with Google, in Mobile or Desktop Mode

Marketers spend inordinate amounts of time, it seems, trying to figure out better ways to convince Google that content they want to share is important, and ought to rank favorably and high in search results.


And, as you might fear, some people spend lots of time just trying to "game the system," something Google also spends quite a lot of time attempting to prevent. 


One might argue that such efforts are doomed to fail, in the long run, simply because the environment changes so quickly, and because Google works virtually every day to weed out such attempts at manipulation. 


About 20 percent of daily queries are new requests; specific terms or questions Google has not seen before. That means a losing battle for anybody who really tries to insert such "trending" key words into copy. There simply are too many changes in trends to keep up with, and those trends change all the time. 


Ultimately, all you can do is product interesting, relevant content, frequently, and let the cream rise to the top. Search engine optimization "experts" always will argue that SEO works. You'd expect them to say that; it's how they make their money. 


As a purely practical matter, few people or companies will ever have enough time to do all, or most, of what SEO experts recommend. What works today might not work in a couple of months. What worked two years ago doesn't work today. Nobody knows how the algorithms will change tomorrow. 


So some of us are simply going to do the best we can, without worrying about "optimization" beyond a few simple pointers. Google says it conducted more than 6,000 discrete search algorithm and performance experiments in 2010 alone. 


It is safe to say no other content producer has time to match that, or even much ability. Most of us can barely keep up with even the broadest of trends, such as the growing shift to mobile consumption of content. Even that is complicated, since "mobile" now includes small screen phones, medium screen e-readers and full-screen tablets and notebooks, plus "big screens" such as TVs. 


Then add the changes in user interface, touchscreen versus keyboard-and-mouse being the most important, and content producers have lots to consider, just in terms of form factor and user input methods. And mobile access, which implies a greater trend to touch interfaces, is getting to be more important.


Google says mobile search has grown 500-percent over the last two years, replicating the rate Google saw with its desktop search engagement. 


Overall, including mobile and desktop searches, Google queries amount to more than a billion requests every day.

Inside Google Search

Can "Freemium" Model Work for "Access"

Freemium, where no-cost versions of a product are offered, with a revenue model built on incremental services or more-robust features, is a well-established model in the content, application and gaming businesses. So the issue is whether freemium can work in the retail telecom business or mobile business.

To be sure, entrepreneurs have thought about, and some have tried, to create sustainable "free calling" services that are supported by advertising. It really has never worked, but the notion continues to appeal. 

Over the last decade or two, lots of entrepreneurs have tried to create "free" broadband access services that are funded by advertising or sales of additional products. Municipal Wi-Fi networks are recent examples.

In some ways, the model has been tweaked by some firms that use free Wi-Fi as an amenity to boost sales of other products, ranging from coffee and food to hotel stays.

FreedomPop, for example, hopes to use the LightSquared network, which has not yet received permission to operate, as a way of offering "free broadband and voice services to all Americans."

FreedomPop is lead by Niklas Zennstrom, co-founder of Skype, and his venture capital firm Atomico. The company hopes to launch in 2012, in what it calls "under-served markets."  FreedomPop

In the communications service provider space, it arguably has been the case that there have been more experiments with advertising-supported approaches, but we will probably continue to see some variants of the freemium model in telecommunications.

Over the past decade and a half, for example, lots of U.S. firms have contemplated, and a few have attempted, to create “free” broadband access services, with the intention to make revenue by advertising or selling premium tiers of service. There are no examples of outstanding success one easily can point to, though.

But that is not going to keep firms from trying. FreedomPop, a start-up backed bySkype and Joost co-founder Niklas  Zennström, hopes to create a freemium service for broadband access in the U.S. market.  

FreedomPop says it will launch in 2012, with a revenue model similar toDropbox, the cloud-based storage service that also uses a freemium model. Dropbox offers up to 2 Gigabytes for free, and sells access to additional storage for a monthly fee in different tiers. Netblazr, a Boston-based access provider, uses a co-op model, giving small businesses free best effort digital subscriber line in exchange for the right to to put a microwave radio at that location, helping Netblazr create its network. Netblazr

Advisory Committee Maintains LightSquared Will Cause GPS Interference

The Space-Based Positioning, Navigation, and Timing national executive committee, which is made up of nine federal agencies that coordinate GPS issues, has concluded that LightSquared's proposed wireless network would significantly interfere with GPS devices.

Based on two rounds of tests by federal agencies and separate tests by the Federal Aviation Administration, the group said it had unanimously concluded that LightSquared's original and modified network plans "would cause harmful inference to many GPS receivers." LightSquared interference

"Based upon this testing and analysis, there appear to be no practical solutions or mitigations that would permit the LightSquared broadband service, as proposed, to operate in the next few months or years without significantly interfering with GPS," the group told the Commerce Department, which continues to study the interference claims. GPS receivers, rather than mobile phones, seem to be most affected. 

Some speculate that LightSquared faces little chance of gaining approval from Commerce Department officials or the Federal Communications Commission.

Auto Vertical Illustrates Key Few Mobile Opportunities

Consumers express strong support for automobile communications features, Accenture found when it surveyed 7,000 drivers in seven countries.

When asked about future technologies, 83 percent of respondents would like to have in-vehicle technologies that can automatically contact a vehicle recovery organization when their vehicle breaks down, and 75 percent want a system that automatically calls the nearest emergency center if a crash were to occur. Auto M2M

Why is that important? It illustrates the potentially-important role that machine-to-machine communications could play as a significant revenue driver for mobile service providers.

Virtually every executive, at every communications service provider organization, is at some level constantly thinking about significant-sized new lines of business that can offset declining voice, texting, video or other revenues.

But the opportunities a small rural telco or competitive local exchange carrier or ISP might consider are vastly different from the types of opportunities a major global telco can consider. Revenue scale and asset base are key constraints.

An organization that earns $100 million year can look at an incremental $50 million a year opportunity and it is a big deal.
An organization earning a billion a year can look at an initiative that generates $500 million, and that is a big deal. A major global telco cannot bother with incremental revenue at those sorts of levels.

In fact, there actually are a relatively small number of initiatives that a large global telco actually can consider, when looking to affect its top-line revenue in a significant way.

“Needle-moving” new lines of business generally have to represent fairly-large areas of activity with substantial revenue.

Put another way, “C” title executives at global telco organizations cannot, and arguably should not, be bothering with any proposed growth initiatives that are incapable of providing $1 billion a year in new revenue.

Not $1 billion of potential revenue for all providers in the market; $1 billion for each actor. An opportunity “has to be big to be interesting,” notes Amobee CEO Trevor Healey.  Tier-one opportunities

As you might guess, thinking naturally runs to ways to leverage the existing networks business in some way. You would be hard pressed to find any proposed new initiatives of any size that do not build on the customer base, assets and network services capabilities telcos and mobile service providers already possess.

hat does not, by the way, mean that the new businesses necessarily will be run by “telco people” who do not have the background. In all likelihood, the new initiatives will succeed only when professionals with skill sets and perspective in the proposed new businesses are running them, and when telco executives do not handicap those professionals.

Consider the range of initiatives you often hear about. Broadly speaking these are financial services (mobile payments is part of this), machine-to-machine services, mobile advertising or specialized services provided to some business verticals, such as health care or security, for example.

That's about it. In the near term, most of the revenue will come fairly directly from “things service providers already do.”  One thinks of efforts to create new services for some industry verticals or ways to generate more revenue from business partners. Cloud computing probably falls within this basket of initiatives, building on what telcos already do.  

Other initiatives, such as mobile banking and payments, will take a while to reach the serious level of revenue contribution. Mobile advertising likely is that sort of investment as well.

That is not to say that all sorts of experiments get conducted, all the time, at various other levels within a service provider organization. But it typically is true that unless any of those experiments can suggest why they can generate $1 billion of incremental revenue every year, they won't become part of the strategic discussion.

The Accenture study reinforces the fact that consumers are currently focused on IVI safety-driven technologies.

However, it also shows that in the future, they would like their cars to be equipped with more communication- and information-related capabilities – creating the ‘connected vehicle’.

For example, the survey shows that nine out of 12 technologies consumers would most like to have in their vehicles are safety-related.

Specifically, 83 percent would like anti-lock breaking systems, while 74 percent and 72 percent, respectively, would favor having night vision and reversing sensors.  

The survey also shows that in the future, 63 percent of the respondents would like to use car-to-car communications, and 59 percent would be interested in having Smartphone controls on their steering wheel.  

Moreover, 58 percent of consumers would like to be able to read and dictate e-mails while in their vehicle, and 57 percent would be interested in having a windshield that acts as a visual monitor, showing the driver’s vehicle speed, for example, as well as what is happening on the road ahead.

To be sure, such auto vertical apps are but one vertical that could benefit from machine-to-machine communications. Health applications, utility operations and other sensor applications also frequently are mentioned as lead M2M opportunities.

Social Networks are "Over-Valued?"

As Facebook prepares for a much-expected initial public offering, it might be worthwhile to review the difference between value and "valuation." If you follow the history of technology innovation, a good general principle is that observers, including market researchers, tend to over-estimate the near term impact and growth, and under-estimate the longer-term growth.

Another way of putting matters is to note that important new technologies take longer to achieve dominance than people expect. Important mass market technologies take longer to hit critical mass than most expect, but then seem to hit an inflection point and accelerate suddenly. It's an "S" curve.

Market valuation, though, also seem to under-estimate value in the early phases, than over-estimate after the inflection point. In other words, sentiment is too frothy, once a new technology has clearly gotten traction, and is on the way to mass adoption. At some point, overly optimistic expectations come back down to align with underlying value.

If it happens on a widespread scale, you get an investment "bubble." So some would say there is a danger now of a valuation overshoot, to be followed by a correction, in the "social" software business.

ESPN Commentator on Why He Believes in Tim Tebow

I believe in Tim Tebow

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By Rick Reilly
ESPN.com
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Tim Tebow FoundationTim Tebow with Jacob Rainey, one of the many people dealing with health problems Tebow hosted at Broncos games this season.

Every week, Tebow picks out someone who is suffering, or who is dying, or who is injured. He flies these people and their families to the Broncos game, rents them a car, puts them up in a nice hotel, buys them dinner (usually at a Dave & Buster's), gets them and their families pregame passes, visits with them just before kickoff (!), gets them 30-yard-line tickets down low, visits with them after the game (sometimes for an hour), has them walk him to his car, and sends them off with a basket of gifts.

Home or road, win or lose, hero or goat.

His story is here.

Broadband, in all Forms, Grows in 2011, Mobile Broadband Grows Fastest

By some estimates, 2011 was the year when mobile broadband subscriptions surpassed fixed broadband connections globally for the first time, according to Ericsson.

Others would say mobile broadband subscribers surpassed wireline broadband subscribers in 2010 (558 million in June 2010, compared to  500 million in 2009).

In 2016, Pyramid Research forecasts there will be 592 million LTE subscriptions in service, equivalent to 7.3 percent of all cellular subscriptions at that time, and almost certainly surpassing the world’s total of fixed-line broadband connections.

The largest LTE device segment will be dongles used to connect PCs, through 2014. But after 2014, the PC segment will be replaced by smart phone connections. LTE forecast

To date, 35 mobile operators have launched commercial LTE networks, a range of 197 devices have become available and the technology is maturing since the first network became live in late 2009.

Still, three out of five device models (60 percent) are discrete modems, either routers or PC add-on devices. 
The initial focus of all operators is mobile broadband access for PCs, Pyramid Research points out, and these subscriptions represent around 80 percent of all mobile data traffic, even though they account for fewer than four percent of mobile subscriptions.

Also, a  total of 17.4 million broadband lines were added globally during the third quarter of  2011.
Fiber to home, building or cabinet connections grew by 19 million lines during the third quarter.

Broadband Forum says that now fiber technologies account for 16 percent of total broadband market share and will soon catch up to cable, which stands at 19.5 percent. Broadband growth

Kindle Dominates E-Reader Category

Some will not consider e-readers "tablets." But there now is little question about which device leads the e-reader category. Over the last two years, Amazon's Kindle has dominated the category. That has implications for e-reader manufacturers, content distributors and publishers. Amazon leads category

From a communications service provider perspective, e-readers and tablets constitute a major new potential market for "connected device" mobile broadband subscriptions, both indirectly, in the case of Wi-Fi devices,  and directly, in the case of devices that can connect directly to either 3G or 4G mobile networks.

Nor is the trend necessarily restricted to e-readers or tablets. Since  Amazon's Kindle reader software can be used on a variety of devices, including smart phones and PCs of various types, the potential change in consumer behavior exceeds what one might assume from sales figures for e-readers.

In fact, the growing base of Wi-Fi-only tablets and e-readers creates a new market for personal hotspot devices and features to support user tablets and e-readers. In that sense, even the adoption of "Wi-Fi-only" devices contributes directly to demand for mobile broadband subscriptions.