Can Any Incumbent Reverse Legacy Product Trends?

Comcast Chairman and CEO Brian Roberts is trying to do something few telco executives have formally attempted, namely reversing the declines in the key legacy revenue stream. 


Telco voice revenues, which historically have driven revenue in the business, are under pressure as much as cable TV operators face losses in their once-core basic video subscription business. But Roberts is trying to do something novel.


Comcast says it is on a "mission" to reverse the trend of declining video subscriber accounts.
Comcast has in fact lost fewer video subscribers in each of the past six straight quarters. 


At least up to this point, telco executives have been more focused on growing new revenue streams, a task made easier by strong growth in wireless services. 


In some key ways, Comcast is trying to change the market share dynamics for a legacy product, hoping that it also can manage the larger transition to a future where today's distribution methods might not be quite so important. 


Telco executives seem to have concluded that the "future" version of their legacy product already exists--wireless voice--and have secured a commanding lead in that business. 

AT&T Expects Toll-Free Data Plans in a Year

AT&T CEO Randall Stephenson says "toll free" data plans, which would exclude certain types of content from counting toward a customer's monthly data allotment, likely will catch fire in the next 12 months. 


In fact, he says content providers already are asking about whether they can partner with AT&T to do so. "I think you'd be stunned if we weren't getting those phone calls," Stephenson says.  "The content guys are asking for it."


Amazon pioneered that basic concept when it got deals to buy download bandwidth on behalf of customers buying book content for their Kindles. 


And given the extreme bandwidth consumed by video, expected to the application which drives bandwidth consumption the most, that is a likely development. 

Will Apple Become an MVNO?

There are more than a thousand mobile virtual network operators (MVNOs) in operation globally, as of May 2012, according to Wireless Intelligence.


MVNOs are most prevalent in mature markets where market penetration has surpassed 100 percent, and has been especially prevalent in Europe.


Europe, in fact, has about 66 percent of all MVNOs. The Asia-Pacific region has 125 MVNOs while North America has 90 MVNOs. 


One has to wonder what the situation will be in another decade, when it is conceivable many application providers might have launched new types of MVNOs, perhaps based solely on mobile broadband, perhaps tightly integrated with devices and possibly using different revenue models.


The nearly-continual speculation about whether firms such as Apple, or Google or Amazon might someday want to launch their own MVNO services are examples of that sort of thinking. 

Apple's next big move will be to provide wireless service directly to its iPad and iPhone customers, according to veteran wireless industry strategist Whitey  Bluestein, who argues the business model will be different. 


As would be the case for other application or device manufacturers, the service would be part of a business model that relies on revenues from sales of content, other products, advertising or commerce. 

Has the Social Media Bubble Popped, or is the Real Bust Coming?

Whether we have been in a new Internet bubble like that of the years leading up to 2001 is a matter of huge dispute. Some might argue, based on the Facebook initial public offering, that the bubble already has popped. Others might argue the bursting bubble is yet to come. 


The argument that Facebook being the worst IPO of the last decade is a harbinger, but not the bursting bubble. That will happen only when valuations of most other firms with a social element also crash and burn. 


To be sure, some have been sounding the alarm for a year or more. "We’re now in the second Internet bubble," said Steve Blank, a serial Silicon Valley investor. 


The signals were that "seed and late stage valuations are getting frothy and wacky, and hiring talent in Silicon Valley is the toughest it has been since the dot.com bubble."


"The most telling indicator [of a bubble] is the $1 billion-dollar valuation," Gartner's vice president Ray Valdes recently argued about Facebook's purchase of Instagram. "Two- and three-person Silicon Valley startups [are] getting venture capital funding within days or weeks, rather than months, for stuff that is more of a feature than an actual product," he noted. 


Some of us would argue the bubble hasn't burst yet. You'll know when it does; it won't be a debate. 

Verizon 300 Mbps Will Cost $205 a Month

Verizon's new 300 Mbps high-speed access service, to be launched on June 17, 2012, reportedly will cost $205 a month, when bought on a two-year contract, according to the Verge. 


Non-contract service adds $5 a month to the cost, and customers who do not buy a bundled phone line will pay another $5 a month. 

When Will Twitter Reach $1 Billion in Ad Revenue?

Researchers at EMarketer Inc. have said that in 2014, Twitter will reach $540 million in ad sales, which make up virtually all of its revenue, up from $139.5 million last year. The obvious question is how long it might take before Twitter reaches $1 billion in annual revenue.


The answer might be important if you think Twitter is a valuable service that needs a big revenue source to continue to operate. 

NimbleTV Wants to "Outsling" Slingbox

In some ways, Slingbox has been a key motivator behind thinking about "TV Everywhere" and other services that allow consumers to view at least some of the programs they have purchased as part of a video subscription service on their PCs, tablets and smart phones.


With TV Everywhere, customers must first buy the video subscription, and only then add on the streaming feature, which, depending on revenue model, is either an additional feature or an incremental fee service. 


A new service called NimbleTV, which is said to be testing in the city of New York, apparently allows full placeshifting of the full package of television channels that a customer buys through a video subscription service. 


That "sell through" approach is intended to sidestep any copyright issues, as users must first buy  a video service, and then are using NimbleTV only as a virtual digital video recorder. The big issue could arise later, if NimbleTv succeeds, and then wants to be able to sell a Comcast service to a customer where the local provider is Verizon or Time Warner Cable. 


You might think video distributors would fear services such as NimbleTV or Slingbox, but Time Warner Cable actually gives a Slingbox, free, to customers who buy its $100 broadband access service, on the assumption that such users are heavy streaming video consumers. 


Also, Sling is owned by EchoStar, the sister company to Dish Network. 


NimbleTV also seems to be offering the content providers and distributors a revenue share, so there is incremental revenue involved the key stakeholders. 


Placeshifting, of course, has been the key value of Slingbox. As with any copying and viewing of network content, copyright law can become an issue, though courts have ruled that a consumer who only slings content to himself or herself at a different location is not violating copyright. 


NimbleTV itself says the service 'is based on the simplest idea: customers should be able to access the TV they pay for wherever they happen to be." As NimbleTV takes a "sell through" approach, meaning customers buy the content first, then are able to use NimbleTV.


"We also stand behind the idea that providers and content producers should be paid, so we view NimbleTV as a solution that’s both consumer friendly and industry friendly," the company says. 


Those of you with a technical bent might be wondering how NimbleTV will manage a process that conceivably could require capturing and storing an enormous amount of content, in real time, 24 hours a day, for every single customer. 


In other words, does NimbleTV "actually" capture and save in the cloud each unicast subscriber stream? Undoubtedly not. It is probably hoping to get contracts with each major provider in a local market, and then revenue share with those providers.


That will "solve" the content capture and storage problem. In essence, NimbleTV would store a "single" instance of each program, and then grant access only to those channels a subscriber has as part of his or her programming service. 


In other words, if it gets permission from the leading cable, satellite and telco providers in New York, it can capture and store "one copy" of each network program, but allow users to watch only  programs on channels each subscriber already has purchased from a supplier. 


Also, the service is geographically "tagged," so that today beta test customers get New York programming to a New York address, according to  BTIG Research.


NimbleTV hopes to escape legal problems by acting only as an agent for each subscriber, for "private performance" purposes. Also, NimbleTV will operate on a "single stream at a time" basis. 


In appears NimbleTV will capture distributor video centrally, at a data center, and not at a local subscriber location, where the content then is uploaded over the subscriber's own broadband connection. 


The destabilizing potential might come if a subscriber in one region wants to subscribe to a service package from a provider in another region. It isn't completely clear whether the video distributors and content owners will continue to work with NimbleTV if it were to allow a person in Denver to buy a service offered locally in Miami, for example. 


But NimbleTV is another example of how cloud-based architectures are potentially enabling new services that could start to challenge today's video ecosystem. And that could happen even with the support of the content owners and distributors who might ultimately be affected.