Twitter Users Disrupt BBC's cycling Coverage?

Oddly enough, given concerns about broadband Internet access in London during the Olympics, the first report of any disruption has come from BBC officials who say use of Twitter, a low-bandwidth application, apparently disrupted television coverage of the cycling road races.


Apparently, updates about cyclist timing and positions were blocked when fans sent updates to Twitter while watching the race, and apparently jammed transmissions of race information.


The BBC  blamed the Olympic Broadcasting Service (OBS) for the lack of information. But the International Olympic Committee said fans sending updates to Twitter while watching the race had in effect jammed transmissions of race information.


Precisely how that can happen is not entirely clear, unless timing information was being sent using Twitter. 

WyWallet Mobile Payment Launches in Sweden

WyWallet, the mobile wallet joint venture by the four largest mobile network operators in Sweden (Telia, Tele2, Telenor and 3), has launched. The mobile wallet service is said to be the first of its kind in Sweden and will from start cover 97 percent of the mobile users in Sweden. 


WyWallet supports person-to-person money transfer, payments using text messaging, online shopping and "prepaid card top ups."


WyWallet also supports retail payments using near field communications. 


Wywallet is available on Android, iPhone and will be available for Windows Phone later in 2012.

Content Owners Wary about New Distributors, But Need Them

Hollywood studios and video entertainment service providers understandably have a wary relationship with current distributors such as cable, satellite and telco video subscription providers, as well as new distributors such as Netflix, iTunes, Amazon and others.

But there are different tensions within the ecosystem. Video service providers realize they have reached a point where higher content payments to content owners cannot continue to rise indefinitely, since those higher fee payments mean retail prices must be increased. And there are growing signs of consumer frustration over the ever-growing retail prices.

In the home video market, previously driven by sales of DVDs, sales have been falling for about three years, for the most part, even as online sales (streaming services such as Netflix) have been growing. That causes a different kind of friction between distributors and content owners.

On one hand, online delivery of movie and TV content is seen as the future, and revenue trends show the potential. On the other hand, too swift an arrival of that new business could destroy a physical delivery business that, though challenged, remains important.

That is true both of the home video business, traditionally based on sales of DVDs and to some extent by DVD rentals, as well as the bigger video subscription business.

But Netflix and even video on demand continue to grow, meaning growing tension between the legacy and new channels.


 

The digital side of the business generated $2.4 billion in the first quarter of 2012, according to the Digital Entertainment Group, representing growth of  78 percent. Subscription video on demand grew 430 percent for the first six months to $1.1 billion.

Overall U.S. home entertainment spending rose 2.5 percent to around $4.45 billion in the first quarter, according to the Digital Entertainment Group. That means home video revenue has grown for two out of three of the last quarters, a welcome change from revenue trends that had been falling for three straight years.

Since peaking at around $21.8  billion in 2004, the U.S. home entertainment industry has seen steady declines, falling  to $18.4 billion in 2011.  

And the shift top online delivery keeps growing in importance. IHS Screen Digest has  predicted that the number of movies and TV shows legally streamed and downloaded in 2012 will for the first time surpass the demand for those films and shows on physical discs.

IHS predicts that online streaming services like Netflix and Amazon Prime, Vudu and iTunes, will conduct around 3.4 billion individual U.S. movie transactions in 2012. That would be a 135 percent increase in digital home entertainment transactions over 2011. It would also surpass the 2.4 billion DVD and Blu-ray sales and rentals predicted for 2012.

And despite studio unease about Netflix, Netflix U.S. streaming revenue of $1.04 billion in the first half of 2012 might be largely responsible for the growth of content owner revenues.

Will subscription VOD ever displace content sales, in terms of profitability? Not likely, given the vast difference between margins.

The overall disc business keeps declining, with sales of physical video media dropping 3.6 percent to $3.7 billion during the first six months of 2012, while disc rentals declined 26 percent to $2.3 billion.

However, the kiosk rental business, led by Redbox, is still expanding, up 23 percent to $990 million, according to DEG.

So, like it or not, Netflix and Redbox might continue to be important partners as the future unfolds.

Surprising Findings about Mobile Payments

You might not be too surprised if told that about a third of U.S. mobile phone users have used mobile payments of some sort over the last year or so. You might not be surprised if a significant percentage of those sales were of digital goods such as games, apps or music.

But a new study found surprising behavior. Despite the popularity of digital downloads, such as apps and music, more respondents reported buying physical goods with their phones than online services, digital goods, or virtual currency, IDC reports.

That would be a significant finding, indeed, at least for remote payments made from a mobile device.

The  IDC Financial Insights study  found that mobile payments have more than doubled in popularity, reaching over 33 percent of survey respondents. Of those that had made a mobile payment, more than half used PayPal Mobile (56 percent), with Amazon Payments and Apple's iTunes service statistically tied at about 40 percent.

The findings are important for mobile payments providers and merchants, as the behavior shows increasing adoption of the mobile payment habit for products not traditionally associated with mobile device content and application purchases.

O2 London Small Cell Network Will Offer Free Access After Olympics

U.K. mobile service provider has built a network of 100 free Wi-Fi hotspots in West London as part of the Olympics. As always is the case after an Olympic event is held, the purpose-built facilities are reused in new ways. That will be the case for O2's network as well. 


The Wi-Fi network, serving the West End, offers service at speeds up to 24Mbps.

Users will have to register, but unlike Virgin Media's network on the London Underground, O2's hotspots will remain free after the Olympics are finished. So you might well wonder what the revenue model will be.


O2 aims to support its investment by selling advertising to local businesses, probably adding location features to craft deals based on end user location. There is another difference.

O2 is using the 100 Wi-Fi hotspot deployments as the foundation for a future small cell network that will use O2's 3G network, reinforcing the macrocell network where it is most congested. 


As a matter of engineering, that has meant locating the Wi-Fi hotspots in locations where eventual conversion to a GSM small cell network will be compatible with the macrocell network. 

According to O2 Wi-Fi managing director Gavin Franks, the carrier is targeting the end of the year for the small cell conversion. 

Predictably, Dish Network alters AutoHop

Dish Network has made a series of software upgrades to its DVRs embedded with the "AutoHop" feature, that automatically removes all advertising from prime time broadcast TV network programming recorded using the DVR feature.


Subscribers now have the ability to choose which channels to record among the "Big Four" networks, where previously they were all automatically recorded.

Subscribers also can choose to delete programming off the hard drive at a time of their choosing, as opposed to accepting a default-delete date.

A third change switches the cursor default from "yes" to "no" when presented with the option to skip ads.

All those changes presumably are intended to bolster Dish Network's defense of its technology, as it faces major lawsuits from broadcasters who claim the AutoHop feature is a violation of their copyrights and also a breach of affiliate contracts Dish Network has signed with the broadcasters. 

The broadcaster challenges were entirely predictable. Whenever an upstart has challenged the over the air broadcast business model, there have been legal and regulatory challenges. In the mid-twentieth century, for example, broadcasters successfully convinced the Federal Communications Commission that some core cable TV industry values, such as offering out of market TV signals, were impermissible. 

Broadcasters and movie makers also challenged the legality of such devices as the video cassette recorder. So the challenge to the lawfulness of AutoHop was inevitable. 

That incumbent legal and regulatory resistance always is predictable when new technologies or business models pose a challenge to either communications or entertainment industry business models. 

Dish Network presumably hopes the changes will bolster the Dish Network argument that AutoHop only provides consumer choice and convenience, and does not constitute any sort of copyright infringement. 

Some Parts of the Telecom Business Are Shrinking

Virtually all experienced observers of the global telecom business are familiar with the notion that, over time, there always is consolidation. In large part, that is because there are scale effects in the business, meaning that the more volume a supplier has, the lower its costs typically are, per unit delivered.


But there is something more at work, as well. Generally speaking, global service provider revenues, overall, are flat. Some regions are growing, while some are shrinking. But if you assume any public company must continually grow its revenues, acquisitions simply are the only way to grow revenue, long term. That leads to supplier consolidation. 

There are changes beyond the tier-one service provider level, as well. Smaller or more specialized service providers likewise are consolidating. And so is the channel. 


"The channel is shrinking," argues channel expert Dave Michels.  "Enterprises are buying less, prices are dropping, models are changing."


"There will be fewer dealers tomorrow than there are today," he says. "There is still plenty of channel opportunity, in fact huge."


"Just not as huge as it once was," argues consultant Dave Michels.


Some of us might argue that the revenue opportunity might not be so much "huge," as it is "significant." The reason is that distribution by channel partners historically has made sense in the medium-sized business segment. 


Consumers and small businesses are best reached using mass media and now the Web. Enterprises can be sold direct. In the middle is where the channel has made financial sense. 


But some of us would argue that cloud-based application delivery will shift more of the mid-sized business opportunity away from channel partners and towards direct delivery as used in the mass markets. Not all mid-market applications can be delivered that way, to be sure. But a significant portion will shift. And that means suppliers will "go direct" rather than using channel partners. 


Veritical specialities also are likely to become more important, once cloud deliver makes it easier for enterprises, mid-market firms and small businesses to "buy direct" and provision from the Web.