Blockbuster to Buy Circuit City?

Blockbuster has offered to acquire Circuit City Stores. If the acquisition is completed, and if the merger process runs smoothly, Blockbuster would successfully have morphed itself into a broad-based consumer electronics distributor. If it does not, well, at least Blockbuster tried.

Critics of the deal will point to the challenge of merging two struggling businesses to create one viable business. Some will simply say it is tying two stones together and expecting them to float.

The hopeful might say there does not appear to be much of a future for Circuit City as a stand-alone business, while Blockbuster faces key challenges of its own in making the transition to digital distribution of movie content.

The logic might be that some forms of digital content distribution will feature the ability to download immediately inside a retail outlet. That would fit with Blockbuster's traditional video rental business. The broader logic is that Blockbuster needs to get into another business, and this is a way to do it.

Framing P2P

In an interview with the Royal Television Society’s Television magazine, Virgin Media’s new CEO Neil Berkett points out that Virgin already is doing content delivery deals with content providers. In fact, lots of application providers, content providers and ISPs have been doing so for quite some time. They use content delivery networks to expedite delivery of their video bits, for example.

Some people will think that's a bad thing; others think it's a good thing.

Really, it's a matter of "framing," or setting a reference. If you ask a user whether they'd prefer to have their service optimized for best performance of video or voice, whenever they decide to use those services, typical users probably would say "yes."

To the extent you ask a user whether restrictions should be placed on the amount of bandwidth they paid for can be used, they'd probably say "no." If you asked a typical user whether a small minority of users should "hog" most of the bandwidth everybody is sharing, most users would probably say they think that's wrong.

It is the framing of the issue that determines the response. It's not as though all "freedom" issues are on one side, all the "control" or "responsibility" issues on the other. Both issues are intertwined.

As almost always is the case, one has to determine who the "freedom" is for: most users, all users, a few users; a few providers or all providers; a few content providers or all providers. Any shared resource obviously cannot avoid answering such questions in a very practical way.

Dish Network Satellite Now Space Junk

The brand-new SES Americom AMC-14 satellite, which was to boost Dish Network's high-definition programming line-up, now is space junk. After a failed launch, SES Americom engineers have concluded there is no way to boost the satellite into proper orbit.

Between the launch of Sputnik on 4 October 1957 and 1 January 2008, approximately 4,600 launches have placed some 6000 satellites into orbit, of which about 400 are travelling beyond geostationary orbit or on interplanetary trajectories.

Today, it is estimated that only 800 satellites are operational. Roughly 45 percent of these are both in low earth orbit and geostationary orbit. Space debris comprise the ever-increasing amount of inactive space hardware in orbit around the Earth as well as fragments of spacecraft that have broken up, exploded or otherwise become abandoned. About 50 percent of all trackable objects are due to in-orbit explosion events (about 200) or collision events (less than 10).

More Interest in Downloads than Live Mobile TV?

Mobile TV might be more a "download" than a "streaming" or "broadcast" application, at least for the moment, says Nokia Internet services executive Niklas Savander, reported by Reuters news service..

"We have seen that there are multiple segments who are not interested in the broadcasting, but rather in downloads," Savander says.

That likely will change over time. But not until customers acquire a new habit and the variety of "live" video improves. Some people might want to watch local TV broadcasts, or a handful of popular "cable style" networks.

Sometimes the subscription model increases viewing appetite. Cable operators found that approach worked for some forms of video on demand. But right now, most people (except Sprint Simply Everything customers) probably would prefer an a la carte download or "episodic" use option.

There are use cases one can imagine. Users without digital video recorder access, or the ability to program DVRs remotely, or traveling users without a Slingbox in their luggage, might watch long-form material.

The key thing is that users respond to variety; they respond to content richness. And until "live" broadcasting services can offer really rich variety, usage is going to be relatively limited.

There are exceptions, of course. Viewership of news channels always goes way up in the case of extraordinary news events. At those times, people are going to want to watch on their mobiles, if it is available. But most of the ime, people probably think they can wait.

The preference for downloads might speak more to the issue of content access than anything else.

Services Bigger Part of "Equipment" Business

In the consumer electronics, small business technology or telecom infrastructure markets, services are becoming a more important part of the "product" being sold.

A case in point: Service providers paid $70 billion in service revenues in 2007 to providers of infrastrucure systems and products, according to Technology Business Research. That's an increase of abouteight percent over services spending in 2006.

Simply put, technology is sufficiently more complicated, and service providers are sufficiently less endowed with internal staff, that deployment, maintenance, consulting, integration and management services are essential.

The other trend is that suppliers are increasing their focus on services businesses to help insulate against slowing demand for hardware. Talk to Cisco channel partners if you doubt the trend. With margins and gross revenues for hardware slowing, services revenue picks up the slack.

At the same time, more traditional infomation technology specialists are taking advantage of the more software-intensive nature of network operations.

Qwest Outage

Qwest Communications experienced a widespread phone and Internet outage late in the afternoon of April 10 in the Denver area and other parts of Colorado.

Service was down for more than an hour in some locations, customers reported, though Qwest logged the outage starting at 4:04 p.m. and ending at 4:44 p.m. The outage took out some optical circuits that wireless carriers including Verizon Wireless and at&t wireless.

Data Card Sales Will Quadruple

Sales of mobile data cards, which enable broadband access in laptops via a service provider’s mobile data network, are forecast by Infonetics Research to nearly quadruple between 2007 and 2011, when they will reach $2.9 billion.

“Currently, mobile data services are generally too expensive for mass market adoption, but that will change with the increasingly extensive rollout of high speed HSDPA, the launch of new data plans offering increased download limits, and better subsidies for mobile data cards, says Richard Webb, Infonetics Research directing analyst.

As mobile data plans become more affordable, consumers will use mobile data cards to download Internet-based content such as MP3s, games and video clips to mobile devices. Users also will use data cards to transfer user-generated content such as photos, video clips to other users.

A small proportion of consumers will use a mobile data plan as their primary means of broadband access. Infonetics predicts worldwide mobile data subscribers will accelerate dramatically over the next few years, reaching 144 million users by 2011.