O2 to Blanket UK with Broadband

O2 will extend its broadband coverage to the whole of the United Kingdom using BT's wholesale broadband network. O2 also seems to have earmarked a sizable amount--£6m (€7.7m)--to grab new customers.

O2 can do so because BT has created a separate business unit that sells wholesale broadband access to any retailer that wants to use it. The U.S. policy framework took a different route, and relies on vigorous competition between the local cable and telephone companies.

One might argue we'd see faster uptake, but less innovation using the functional separation model. Conversely, slower diffusion but more differentiation using the U.S. model. There are different benefits.

After a slower start, it looks as though access speeds and "price per megabit" propositions, plus managed services wrapped around the access, are finally starting to get interesting in the U.S. market.

Mobile TV: It Isn't About the Small Screen

Some observers might argue that most mobile users do not really want to watch TV on their handsets all that badly. Others might argue they'd like to, but the small screen or shortened battery life are barriers. Some would say the logical use is short form video to fill interstitial time, not long-form content or TV shows. Others will say people don't want to pay as much as carriers now charge.

All these objections have some merit. But what might be most significant is the limited amount of linear content people can get.

AT&T's new video service will deliver 10 television channels for a fee of $15 a month.

AT&T Mobile TV will be available in 58 markets including Atlanta, Chicago, Los Angeles and New York.

Two handsets are available immediately, the LG Vu, which sells for $299.99, and the Samsung Access, which sells for $199.99.

Observers often note that a typical TV viewer only watches about seven channels. The problem is that every person uses a different mix of seven channels. And that's the issue for AT&T and Verizon.

AT&T Mobile TV delivers CBS Mobile, Comedy Central, ESPN Mobile TV, Fox Mobile, MTV, NBC 2Go, NBC News 2Go, Nickelodeon, Sony Pictures and CNN Mobile Live.

As long as those channels cover enough of your seven favorites, you're going to be interested. If that list does not contain at least one of your favorites, you won't be that interested. And then any rational buyer is going to do a "cost per channel" analysis to figure out whether buying the mobile TV service makes sense.

And the end of the day, all the other objections likely can be overcome. The basic objection, though, is that people will want access to their favorite channels. That value proposition makes sense to 96 percent of all households.

What people won't want is to pay for is channels they don't really watch. Cable TV succeeded because it gave consumers more choice. Mobile TV today is lagging precisely because it doesn't provide enough choice.

Nokia, T-Mobile Enhance Mobile Web

Nokia and T-Mobile have signed a deal that has Nokia supplyng T-Mobile with phones especially tailored to provide easy access to T-Mobile’s “web’n’walk” internet service and Nokia’s mobile portal Ovi.

The two companies also saythey will work on making social network sites more mobile, and will cooperate on creating mobile widgets to create a “richer” user experience for T-Mobile’s web’n’walk service.

A couple of angles: Nokia supports its own content portal; T-Mobile, despite that possible conflict, needs Nokia to optimize handsets for web'n'walk. That's co-opetition, to be sure: competing and collaborating all at the same time.

Facebook Apps Skew Towards "Just for Fun"

Enterprise IT managers generally consider Facebook a huge time waster. They might be right. Most of the applications created for Facebook so far are of the playful sort, with no direct business application.

Still, there's more than a smattering of tools that can have business application, beyond the ability to create business-focused social groups.

There are more than a thousand apps self-described as business tools, and many of the others might be used in a business way.

Sure, it's a non-guided, messy process. But that's pretty much the way innovation is going to happen in any case.

It's just a process of discovery.

Lots of business-focused people are trying to figure out how to apply social networking in an enterprise context, so there is a clear sense that this is not all about "fun and games," even if that's where most of the apps are.

Dumb Pipe Isn't a Bad Thing

The unique contribution any communications network plays in a value chain is precisely the "pipe."

That doesn't mean "just" pipe, but connectivity is fundamentally important. Consider a Strategy Analytics forecast of global consumer and advertiser spend on mobile media and associated transport.

Strategy Analytics predicts mobile media spending will rise from just under $47 billion at the end of 2007 to almost $102 billion by 2012, driven by access to web services, video and music.

But note the contribution made by "data transport," which is the "dumb pipe" part of the business. Premium services are important, no doubt. But access is far from unimportant.

Over the same period the population of unique cellular users actively using mobile content services will more than double from 406 million to over 870 million.

What About Wal-Mart?

One issue the studios are going to have to grapple with, as they go with "date and date" release of DVD and video-on-demand movie content, is channel conflict. Specifically, Wal-Mart sells about 40 percent of all DVDs. Target sells about 15 percent. Add in Best Buy and you probably have half the market for retail DVD sales.

Those three mass market retailers won't be happy if DVD sales, used as loss leaders to drive shopper traffic, start to dwindle. Surely studio executives are thinking about this problem. Ultimately, they'll want to come up with some sort of kiosk operation allowing buyers to sideload rental or sale content directly to their iPods.

You'd think USB flash drives might do the trick. The issue will be the cost of storage required to hold a two-hour HDTV movie. And then there's the issue of moving that content directly to the TV for viewing.

The studios will figure this out, or somebody will help them figure it out. The studios won't want to make a key channel partner too angry.

Video Substitution Coming

In the movie content market, all revenue streams beyond theatrical showings basically are substitutional: money made in the DVD segment tends to displace revenue that might have been earned in the pay TV or broadcast TV segments, for example.

With the recent movement towards "day and date" release of movie content to DVD channels as well as video on demand, one should logically expect some revenue to shift from the DVD channel to the VOD channel.

But there's a difference in the "quality" of the revenue, from a studio standpoint. Studios make 60 to 70 percent profit margins on downloaded or streamed content; only 20 to 30 percent on DVDs.

Aggregate consumer spending might not change all that much, but studios might make more money. That is the only reason they'd even agree to a different "day and date" scheme.