What Cable Will Do if Online Video Takes Off

Consumers should have the freedom to buy over-the-top video if content owners want to sell it. But one should not expect distributors to stand by and watch their current businesses be damaged as that happens. Neil Smit, president of Comcast's cable division, says that if over-the-top video starts to displace some amount of traditional cable TV viewing, Comcast is more than happy to change its product offerings to accommodate those demands.

"We feel very good about our capacity," says Smit.

Obviously, if a significant percentage of today's subscribers to multichannel video entertainment start to drop those services in favor of online offerings, providers are going to change. But some already are taking steps to protect their legacy businesses while adapting to online video.

To encourage consumers not to abandon cable TV, for example, Comcast has introduced Xfinity, which allows Comcast video subscribers to watch some of that content online. Should that effort succeed, there could be a more gradual shift of viewing and content packaging, as end user value simply is enhanced by the addition of new capabilities that encourage consumers to keep their subscriptions.

If the initiatives don't work, and customers start to abandon even the Xfinity style offers, though, cable and other distributors will confront declining revenues for the base business, which might cause distributors to weigh retail price increases, a shift of programming to emphasize networks that still offer a robust revenue model, price increases for the remaining customers, or renegotiated contracts with programming suppliers to account for the new economic realities.

Of course, the increased over-the-top consumption will drive higher usage of broadband access connections. Under those conditions, it is reasonable to expect that access providers will move towards more reliance on usage-based charging for use of broadband access services.

"People should not think of cable companies as media companies," said Craig Moffett, a senior analyst at Wall Street equities research firm Sanford C. Bernstein. "They are infrastructure companies."

Rather than raising prices on cable broadband across the board, it is logical to expect tiered pricing that reflects usage. That actually makes sense, if one assumes broadband access increasingly might be a differentiated product, offering different buckets of "best effort" usage, as well as services that might be optimized for real-time services. Beyond that, cable operators and telcos have other ways to repackage triple-play or quadruple-play services in ways that optimize value and pricing for multiple products.

Broadly stated, distributors can tweak traditional video subscription prices, terms and conditions in ways that compensate for higher broadband access consumption, and perhaps equally importantly, reward customers for using bandwidth "efficiently."

With Internet TV, cable wins even if it loses

Ethernet Will Dominate Mobile Backhaul by 2014

By 2014, more than half of North American mobile backhaul will support Long Term Evolution networks, says In-Stat.

“Nearly every major mobile operator is, or will shortly be, at capacity,” says Chris Kissel, In-State analyst.

Total expenditures for last mile backhaul (including line leasing, new equipment spending, and spectrum acquisitions) will reach nearly $117 billion by 2014, a 41 percent increase over 2009 expenditures of $83 billion.

Wireless last mile backhaul capacity in Western Europe will more than triple between 2010 and 2014, to nearly 60,000 Gbps. Also, by 2014, Ethernet will be the dominant carrier technology with 85 percent usage in base stations.

In-Stat - Press Releases

The NPD Group: Android Extends its Smartphone Market Share in the Third Quarter of 2010

The Android smartphone operating system significantly grew its lead in the U.S. consumer smartphone market in the third quarter of 2010, according to The NPD Group.

Android’s OS was installed in 44 percent of all smartphones purchased in the third quarter, an increase of 11 percentage points since the second quarter.

The Apple iOS held relatively steady versus last quarter, rising one percentage point to 23 percent. The RIM OS fell to third position, declining from 28 percent to 22 percent.

The NPD Group: Android Extends its Smartphone Market Share in the Third Quarter of 2010

T-Mobile Adds Tethering for Some Devices for $15 a Month

T-Mobile USA apparently is offering a new tethering that allows some of its smartphones to function as wireless modems for connecting devices such as laptops, tablets and netbooks to the Internet through the T-Mobile network. At the moment you will not find that information on the T-Mobile USA website, as nearly as I can determine.

Customers who buy the unlimited data access plan will be able to add the "Tethering and Wi-Fi Sharing" plan for an additional $14.99 per month.

Tethering is available for some devices offered by Verizon Wireless and Sprint Nextel as well, for about $30 a month. Some consumers won't see the logic here, the thought being that they've already bought unlimited mobile data access and should be able to share that bandwidth with a PC they also use.

Service providers of course make substantial money selling mobile data connections on a "per device" basis, so their resistance to the notion is probably predictable. Sooner or later, though, as more mobile devices become Internet-capable, pressure is bound to mount for the broadband equivalent of family plans. In a sense, a fixed broadband connection already operates that way: users can attach as many devices as they like to a single fixed broadband connection.

At some point, mobile providers will start offering those sorts of data plans as well, allowing a single account to attach multiple mobile devices and pay one price for shared access.

T-Mobile New Low-Cost Data Service Plans

Virgin Media banks on 100 Mbps

At the end of September 2010 the number of customers subscribing to the top tiers (20 Mbps and 50 Mbps) increased by 40.7 per cent to reach 708,300, says Virgin Media, with 91,600 of those taking the flagship 50 Mbps service, an increase of 23.8 per cent over June 2010).

Virgin claims that 10,000 customers signed up for the 100 Mbps service on the first day of launch.

Virgin Media banks on 100Mbit/s broadband for growth

Game Consoles Expand Video Streaming Services

Netflix has reported a recent increase in the uptake of their streaming service with subscribers, with 66 per cent of subscribers watching more than 15 minutes of content online in the third quarter of 2010, compared to 41 per cent of subscribers during the same period last year, suggesting its improved online movies and TV shows line-up is strengthening the service's appeal.

Netflix and other streaming services also are making efforts to integrate more centrally with game playing platforms, in an attempt to position the game player as a hub for premium content delivery.

Although Netflix is not yet causing subscription TV customers to cut the cord (that is, end their traditional pay-TV subscription), it is now an essential content partner for any connected device platform in the United States, say researchers at Screen Digest.

Game Consoles Expand Video Streaming Services

Video on Demand: After 25 Years, Still Not that Big a Deal

Despite all the attention now paid to online delivery of movie and video programming, after 25 years, consumers globally still show an overwhelming preference for renting shows using some form of physical media.

Video-on-demand services, which have been available for 25 years, continue to lag other methods of delivery, DVD rentals and purchases being the dominant method.

The other significant issue is that demand for all forms of on-demand video seems to have flattened out, globally. That suggests displacement, not growth, is the strategic imperative. For VOD providers, the issue remains: can VOD grab more share of the market than developing online delivery methods?