Mobile TV is a Feature, not a Product, Yet

At the moment, services such as "TV Everywhere" that allow users to view some of the video they purchased as part of their subscription video services on a smart phone or tablet remain a "feature," and are not yet envisioned as revenue-generating "products."

That would not be an unusual pattern. Service provider Wi-Fi hotspot access has become a feature of a broadband subscription, whether provided by a fixed or mobile network. That seems to be the developing pattern for mobile TV services tied to another subscription.

Smartphone or tablet apps that are tied in to a cable TV show are definitely about "discovery and engagement," not advertising revenue, said Tammy Franklin, Scripps Networks Interactive senior vice president of affiliate sales and new media distribution.

For Verizon Wireless customers, unlimited U.S. domestic voice and texting essentially now are features of a mobile service, not discrete products. The basic connection fee includes both voice and texting.

House Hearing on Video Market Shows Growing Pressure within the Ecosystem

The House Energy and Commerce Subcommittee on Communications and Technology held a hearing on whether existing communication laws address the demands of new technology. Such hearings do not, in and of themselves, mean much. But it is just one more sign that pressure is building within the video ecosystem.

Many speakers noted that regulations currently in place are outdated and stem from a time when cable companies controlled a much larger portion of the subscription video market.

Some Business Problems Cannot be Solved

Put yourself into the role of CEO at either Sprint or T-Mobile USA. What is the answer to the question of how you will catch up to Verizon Wireless and AT&T? And make us believe it. 

It's tough. Tough, in fact, because there are some problems in business that are hard, perhaps impossible to fix. One of those intractable problems is market share structure in a well-developed industry. 


Typically, a rule of thumb suggests, the market leader has twice the share of the number-two provider, which in turn has twice the share of number three, and then share falls off dramatically after that. 


It might be more accurate to say that market share has a direct bearing on profit margins, as well. 


The U.S. mobile market does not have precisely that classic stable distribution. Verizon, early in 2012, had about 32 percent share, AT&T about 26 percent. 


Sprint had about 16 percent and T-Mobile USA had about 10 percent. 


That suggests, to some of us, that the market remains unstable, and would be expected, over time to move in the direction of the "classic" structure. That doesn't mean real-world markets always assume the classic structure perfectly, only that the stable structure of a market will feature dramatic differences in both market share and profitability. 


But regulators will have a say, having already firmly suggested that AT&T could not grow to 38 percent market share. 


That suggests, over time, combinations of the smaller providers. The point is that one might argue there actually is little executives at firms such as T-Mobile USA and Sprint can do to fundamentally alter the direction of the market, no matter how talented they might be. 

Google Isn't Making Any Profit From Sales Of The New Nexus 7 Tablet

Andy Rubin, Google's head of mobile, says Google is selling its new tablet "at cost" through Google's online store. "There's no margin," he said in the interview. "It just basically gets (sold) through."

In fact, Rubin says the company is eating the marketing costs for the device. Like Amazon, at least for the moment, the device is seen as a platform for creating revenue streams other ways.

But that, in general, is probably the way Google approaches its entire set of efforts in consumer electronics: creating products that drive usage and then revenue from the software and content products it creates.

That is more the "Amazon" strategy than the "Apple" strategy.

What Kind of Company is Google Becoming?

With the launch of its first tablet, a seven-inch device that seemingly is aimed more at Amazon than Apple, Google has added yet another device to the list of gadgets it now produces, ranging from smart phones to a new home entertainment system.

The new tablet, priced at $199, makes Google an even more complicated company. The $299 home-entertainment player called Nexus Q likewise further blurs Google's identity, you might argue.

Google always has said it is a software company. Its revenue comes mostly from advertising, especially from Google's search engine. That has made Google the paramount example of something we haven't seen before, namely a software company whose revenue comes from advertising, primarily.

Some of us would have said that Google might as well be called a media company, as well, with its YouTube operations and especially revenue model. What sort of company makes its money from advertising? Traditionally, only a "media" firm.

But now Google is becoming a supplier of consumer electronics as well. Ignoring for the moment all the other lines of business Google is experimenting with, it has become even harder to figure out what to "call" Google.

Google itself still says its mission is to organize all the world's information. But it also says it does "search" and products that "make the web better."

One has to conclude that Google simply is at a point where it is changing into "something else," and it is hard to describe what that "something else" actually might be.

Why Google has gone "Mobile First"

If you want some evidence about why Google has gone "mobile first" in its product strategy, a few key statistics Google announced tell the story well.


Google says it has 250 million total users, 150 million monthly users and 75 million daily users, with more usage from mobile than desktop TechCrunch says.  

Is Telecom Italia Going to Structurally Separate Itself?

A unit of Cassa Depositi & Prestiti may invest three billion euros in a partnership with Telecom Italia that would structurally separate the Telecom Italia network from the retail services unit. Since 2008, Telecom Italia has operated its network as a functionally separate entity with extensive wholesale operations. 


The new rumor suggests that Telecom Italia is prepared to go the next step and fully separate the network operations part of its business, Bloomberg reports.


Telecom Italia's "Open Access" unit, which has the network infrastructure and employs a 19,000 people in maintenance and operations, might be in play, whether the recent report is true or not (Telecom Italia denies the rumor).


CDP also  says it “isn’t aware” of the proposal. What might be more true is that Telecom Italia is seriously considering structurally separating its network assets business from its retail telecom services business. 


Italy lags Europe in terms of broadband penetration with only 49 percent of households connected against a European average of 61 percent, according to Eurostat data.


Some observers in Europe believe competition will not be sufficient to create conditions for faster broadband investment. Carriers actually argue that current regulations actually discourage that investment. 


The rumored Telecom Italia move might be a way that the telco could essentially give the problem to somebody else. Since 1995, Telecom Italia has operated only fixed networks, as its mobile operations were spun off into a separate company. 


Debt reduction seems to be driving the thinking. Other European telcos are divesting assets as well, in order to trim debt and prepare for investments in mobile services.