Web TV for FiOS?

Verizon currently is currently beta testing Web video on their set-top boxes, using content provided by Veoh, Blip.tv, Break.com, and YouTube.

Sites are indexed on a regular basis and when a video is selected from the DVR, the PC software automatically transcodes and streams content on the fly. Media Manager software also makes possible transmission of any video podcast to a user DVR as well.

In principle, Verizon ought to be able to add Real Simple Syndication feeds to its DVR.

These features will be offered as part of Verizon’s top tier DVR package, perhaps later this year or early in 2009. That package also is likely to include PC photo sharing and multi-room DVR playback.

Consumers Don't Might Ads, If Content is Professional

Ipsos MediaCT says most consumers would find it “reasonable” for advertising to be included in the free digital distribution of full-length TV shows and movies, while around two-thirds say the inclusion of advertising would be reasonable with free access to music videos, short news or sports clips.

There are some major exceptions, however. “As might be expected, digital video consumers generally find it more acceptable to have advertising included within longer, professionally produced video offerings such as full-length movies or TV shows, should this content be available for free online," says Adam Wright, Director at Ipsos MediaCT.

"Fewer are ready to accept this ‘price of admission’ for shorter-form content or less-professional polished content," he adds.

Still, for most video content types, the majority of these consumers find the trade-off between free video content with advertising to be a fair value proposition.”

The one content type that may be the exception is amateur video content. Just over half (52 percent) of consumers age 12+ who have downloaded or streamed a video online say they would find it “not reasonable” to have advertising embedded within free amateur or homemade video offerings online.

Gen Y First Native Online Generation

Forrester Research says Gen Xers use technology when it supports a lifestyle need, while technology is so deeply embedded into everything Gen Yers do that they are truly the first native online population.

"Gen Y is the audience that most companies are struggling to understand right now because it's key to their future revenue growth," says Charles Golvin, principal analyst at Forrester Research.

Although Gen Y,18- to 28-year-olds, represent only 38 million U.S. adults, it sets the pace for technology adoption. Nine in 10 Gen Yers own a PC, and 82 percent own a mobile phone. But it's technology use that sets this generation apart: Gen Y spends more time online — for leisure or work — than watching TV.

Seventy-two percent of Gen Y mobile phone owners send or receive text messages, and 42 percent of online Gen Yers watch Internet video at least monthly.

In contrast, Gen X, which is comprised of 29- to 42-year-olds — 63 million US adults — uses technology when it intersects with a personal need or fulfills a desire. For example, 32 percent of Gen X households own an HDTV, and 29 percent have a DVR.

In the past three months, 69 percent of online Gen Xers shopped online, and 65 percent banked online, higher percentages than any other generation. Gen X is also ramping up its Internet and mobile activities, including reading blogs (21 percent of online Gen Xers do it at least monthly, up from 15 percent in 2007) and texting (61 percent of Gen X mobile subscribers do it today, up from 49 percent in 2007).

Most of the Money Still is in Legacy Media

PricewaterhouseCoopers reported in its Global Entertainment and Media Outlook that as of 2007, digital and mobile distribution made up only five percent of total spending on entertainment and media.

PWC projected that this percentage will increase to 11 percent by 2012. No doubt, digital media is growing, in some cases, growing fast.

But even with momentum, 11 percent is still a small percentage of the $2.2 trillion annual spending on media and entertainment, especially when market share is held by a wildly fragmented cast of contenders.

Sometimes, it makes sense for large providers to place bets on "legacy" video even when everybody acknowledges that the market is changing. That doesn't mean wisdom is not found in spreading a number of bets on legacy and emerging media. It does mean that a rational investor with the ability to attack the existing revenue streams would be rational to do so.

A small percentage of a big number is a big number. A small percentage of a small number is, well, a smallish number. Large companies do not have the luxury of chasing small number markets. Small companies can, and do.

If recent AT&T quarterly results are an indication, it will ultimately prove to have been wise to invest heavily in "legacy" video, despite the coming shift of much video to alternate delivery methods. The issue right now is that the emerging markets still represent small amounts of revenue.

That will change over time as revenue at stake shifts and the scale economics emerge. At that point, one would have to expect consolidation of the market to create some large distributors able to capitalize on the scale economics.

That does not mean that, in the interim, large returns from legacy services should be ignored.

Vonage U.K. Launches Lower-Cost Plans for North America Calling

Vonage U.K. has launched two new "value" call packages for consumers concerned about their phone bills, as well as a new £6.99 plandesigned for the high percentage of Vonage consumers who call North America. The two new call plans offer Vonage’s lowest ever tariffs and are priced at £5.99 per month for unlimited calls to the U.K. and £6.99 per month for unlimited calls to the U.K., United States and Canada.

The £6.99 plan also includes an option that for £1 extra a month providing unlimited calls to mobile phones in the United States and Canada.

Vonage’s £7.99, £14.99 and £18.99 plans incorporating up to 45 countries remain unchanged.

Wireless Powers AT&T Results

As expected, AT&T wireless services revenues excluding handset and accessory sales, were up 14.5 percent to $10.9 billion for the quarter. Total wireless revenues were up 15.8 percent to $12 billion.

The company also continued to grow its AT&T U-verse TV subscriptions. AT&T had a second-quarter net gain of 170,000 customers for a total of 549,000 subscriptions in service. AT&T has a goal of connecting more than 1 million subscribers by year’s end.

Text Messaging Still Dominates Mobile Data Use

Voice continues to be the dominant application most mobile customers use on a daily basis. Text messaging remains the dominant data application, according to researchers at the Yankee Group.

Teenagers, as you would expect, are the one demographic that uses text just a bit more than voice. About 63 percent of teen users surveyed say they use text on a daily basis, while voice is used daily by 61 percent of users in that age group.

Growth rates for mobile Internet access, mobile video and mobile email are strong, but are growing from a relatively smaller base of users.

Mobile email use grew 71 percent between 2006 and 2007, for example, while mobile Internet use grew 57 percent.