It’s the Beginning of the End for the TV Biz, Says Analyst

"The TV and video business is about to face a nasty downturn, and it could happen faster than most people expect — like, over the next two years," says Lehman Brothers analyst Anthony DiClemente.

'We believe the feature film and TV content businesses are on the verge of structural changes that appear to impact the core revenue and profits of entertainment business models,' DiClemente said, Wired.com reports.

Few observers might agree that a change could happen that soon, though just about everyone thinks change is coming.

What might be more unusual is DiClemente's sense that the biggest losers are the major content companies, including Disney, CBS, News Corp., Time Warner and Viacom, for example, rather than the cable, satellite and telco distributors.

To be sure, a reasonable argument could be made that both dominant distributors and content companies have lots to lose. Content companies are right to worry that their gross revenues and profit margins will take a hit once alternate methods of digital distribution become more prevalent. The historic way of describing this dilemma is that content owners are exchanging analog dollars for digital pennies.

More recently, the phrase tends to be that content companies will exchange analog dollars for digital dimes. Either way, you get some idea of the magnitude of the potential changes.

Digital distribution, audience fragmentation and widespread file-sharing are eating into network and studios’ profits, and those profits may not come back, says DiClemente.

DiClemente thinks Apple’s iTunes and Google’s YouTube could emerge as winners in the distribution role. That would be only the latest turn in an on-going debate about whether "content" or "distribution" is king. At various times one or the other parts of the ecosystem has been seen as holding an advantage.

What might be different this time around is that both traditional "content" and "legacy distribution" parts of the ecosystem might face serious pressure, while new competitors in both content and distribution roles make headway.

It’s the Beginning of the End for the TV Biz, Says Analyst Wired.com:

Small Business "Software as a Service" Adoption Will Grow at 25% Through 2014

Small and medium business spending on software-as-a-service (SaaS) will increase exponentially over the next five years, eclipsing growth in investments in on-premise software by a significant margin, AMI-Partners predicts.

AMI forecasts a 25 percent compound annual growth rate for hosted business application services spending through 2014.

On-premises software spending will grow at about five percent. But change will be slower for applications such as enterprise resource planning, supply chain management, procurement, finance, and core human resources applications which have higher switching costs.

AMI-Partners - News :: Breakout growth for SaaS in the U.S. small and medium business markets

Mobile Video Hiccups Once Second Out of Every Six

Despite the protestations of network neutrality advocates, there's a very good reason why real-time services ranging from voice to conferencing to entertainment video actually require some form of optimization and even packet prioritization.

Recent data collected in mid-year 2010 by Bytemobile from networks operated by the likes of AT&T, China Mobile, China Telecom, KDDI, KPN, O2, Orange, Orascom, Sprint Nextel, T-Mobile, Telecom Italia Mobile, Telefónica, TeliaSonera and Vodafone show that every minute of mobile video consumed by end users includes about 10 seconds of stalling.

That's 17 percent of every minute of video, or a stall every six seconds. That is hugely disruptive of viewing experience and will not be acceptable once users become accustomed to using video content. It will be completely unacceptable once users start paying for video content services.

The problems currently are worse about 10 p.m. local time, and best at 5:30 a.m,, says Bytemobile. Expecting such congestion and disruption, most mobile users opt to watch videos at lower-quality settings to improve their media experience. That probably isn't what content owners or their business partners prefer, to say nothing of mobile service providers who will inevitably be tarnished by that sort of performance.

Nor does "more bandwidth" solve such problems. Bytemobile data shows that stalling occurs on even the fastest of networks and a quality user experience requires optimization of video content. In other words, packet prioritization and, or, other measures to keep latency and jitter performance optimal.

That said, as network bandwidth decreases, video stalling dramatically increases.

Consumption of high-definition video is nearly non-existent on wireless networks, at 0.07 percent of video-specific traffic volume.

Moreover, video traffic directly impacts bandwidth availability on wireless networks all over the world.

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Rival Tablets Not Dead, No Matter What Apple Says

Apple says seven-inch tablets will be "dead on arrival," but developers and retailers are not convinced, and consumers will have to make the call about demand for tablets in various form factors, says the Wall Street Journal.

Verizon Wireless soon will be selling the Samsung Electronics Co.'s Galaxy Tab—a seven-inch tablet that runs on Google's Android software. Next year, BlackBerry maker Research In Motion Ltd. plans to release its seven-inch PlayBook.

Apple CEO Steve Jobs says 7-inch devices were too small to create great tablet applications. 'Their manufacturers will learn the painful lesson that their tablets are too small and increase the size next year, thereby abandoning both customers and developers who jumped on the seven-inch bandwagon with an orphan product,' Jobs says.

The argument for a smaller form factor is pretty simple. For many, perhaps most users, the smallest devices are the essential devices carried everywhere in a purse, pocket, backpack or briefcase. For most users, the phone is basic, but iPods might be a close second.

Traveling workers mostly consider their phones and notebook PCs to be essential, with all other devices secondary. Some people traveling for work say they carry both an iPad and a PC, but over time, I suspect that will shake out in favor of one or the other devices. For those users, a 10-inch device is better.

Some day, when prices drop, that might also be a viable option for college students when going to class. For some, though, who carry a phone all the time and a PC when traveling, and for whom content creation is a big reason why the PC is carried, the iPad will remain a third or fourth device choice (iPods might be most commonly carried, after the phone and PC).

Many users, especially those whose work allows them to travel with just a smartphone, leaving the PC at home or the office, will find an iPad a reasonable option. But that's why there would seem to be a market opportunity for tablets in a couple formats. When a tablet can be the second or third device (assuming the iPod is the second device), the bigger screen is helpful.

When the tablet has to be the third or fourth device, there are weight and bulk issues that could be important.

But the market will decide.

Connected Device Market Potential Dwarfs Phones

Aside from notebook PCs, many Americans now own portable or mobile devices that already are capable of mobile communications, or increasingly will be capable of mobile communications.

According to Nielsen, the typical owner of any one of these devices actually also owns three to five additional devices within these categories.

That means a large potential base of mobile and portable devices that will be candidates for Wi-Fi and mobile broadband services in the future, in numbers that dwarf the installed base of "phones."

What remains to be developed are pricing plans that account for ownership and use of multiple devices, most of which are designed for content consumption or entertainment more than communications. Broadband plans that allow a user to connect multiple devices at various times, at prices deemed reasonable, will be a huge opportunity, going forward.

So far, most consumers have shown only modest interest in $60 a month plans that connect PCs, though mobile service providers now are experimenting with demand for $15 to $45 a month plans for tablet devices and smartphones.

Those are steps in the right direction, but what ultimately will be needed are the equivalent of family plans for data devices, where the "family" might be a single user or household wanting to use multiple devices on a single access account.

Social Will Grow 10 to 25x In The Next Five Years

Kleiner Perkins venture capitalists think social applications could grow 10 times to 25 times over the next five years.

Bing Gordon: Social Will Grow 10 to 25x In The Next Five Years

Mobile Marketing" Upstream of a Coupon, Downstream of Yellow Pages

“Weather is not the only category that is seeing a significant amount of the audience preferring the mobile channel, but if you are selling an over-the-counter flu medication, and you traditionally buy weather sites online– mobile now must be a big part of your digital spend,” says Paul Palmieri, president/CEO of Millennial Media.

He said that American mobile consumers are seeking and finding an explosion of content experiences across a range of devices, are receptive to advertising messages and are in many cases in close proximity to making a purchase decision.

One way of thinking about the value of mobile messages is that they arrive when a user is "downstream of the yellow pages and upstream of a coupon,” Palmieri says. In other words, after a user has identified a need for something and just before moving to take action on that need.

MoMA | Marketing & Advertising agencies who are just “Testing”