Virtually All Video Subscription Providers Will Offer PC, Smart Phone, Tablet Viewing

Some 83 percent of video subscription providers plan to offer video streaming of some sort for PCs, smart phones and tablets by 2013, says Jeff Heynen, directing analyst for broadband access and video at Infonetics Research.

That is an eminently logical response for a video subscription services provider. The additional viewing adds value, while propping up the existing TV-based services.

Consumers Don't Really Care About "Interactive TV"

Nearly half of all consumers 16 to 24 use messaging, email, Facebook or Twitter to discuss what they are viewing on TV. 

Some 80 percent talk to other people in the same room while watching TV, another means of distracted viewing.

There is muted appetite for interaction with TV programs, one of the concepts that has been viewed as central to interactive TV,  though. 

Qube was in 1977 billed as the "world's first commercial interactive TV service," launched by Time Warner in Ohio, and failed commercially. In 1997 "Prestel" launched in the United Kingdom. It failed. 

People like to interact with video games. They like to interact with social networks. Some even like commenting on stories they read online. But few people really are interested in choosing their own camera angles during sporting events, changing the plots of TV shows or necessarily even playing along with TV quiz shows. 

Only 10 percent of surveyed respondents browse the Internet for information about the program they are watching, according to a survey conducted by Deloitte UK. 

Some viewers (40 percent) like being able to send their comments in to a live program, though. 

But 68 percent would not want the websites for products, personalities or advertising that have just been shown on television, to automatically appear on their computer, tablet, or smart phone.

The rise of ‘second screening’ - the use of other screens, such as laptops, smartphones and tablets while watching TV – is a source of excitement and concern for many in the TV and technology industry according to a new report from Deloitte UK. 

Nearly a quarter of all respondents (24 percent) use "second screens," typically a smart phone, or increasingly, a tablet. 

Nearly half of all respondents 16 to 24 use communication tools such as messaging, email, Facebook, or Twitter to discuss what they are watching on TV. The vast majority of over 55s (79 percent) never talk about what they’re watching on TV or the Internet.

Google, Boingo to Expand Ad-Supported Wi-Fi Test

Google and Boingo are building on their free Wi-Fi project in New York City, launching the advertising-paid access model in eight malls across the country.

Boingo and Google didn’t name the specific malls, saying only that at least four of them would be in San Francisco, Los Angeles, Tampa and Seattle. 

Google Offers will sponsor the service, meaning customers connecting to the hotspots with a smart phone, tablet or PC will encounter a welcome screen encouraging them to sign up for Google’s daily deal service. Regardless of whether customers sign up for the service or skip past the screen, they’ll get free, unrestricted access. 

In New York, Google and Boingo have offered the promotion in six subway stations and 200 hotzones throughout Manhattan on a trial basis until Sept. 7. The two firms also offer discounted Wi-Fi access in sixteen airports. 

Lots of entrepreneurs have tested the notion that Wi-Fi hotspot service can be supported by advertising. dSpot and AT&T are among them.  

Are There Really Any U.S. Households That Can’t Buy 12 Mbps Internet Access?

Some 19 million people in seven million U.S. households live where fixed broadband networks do not reach people with a minimum speed of 4 Mbps downstream, and 1 Mbps upstream , according to the U.S. Federal Communications Commission.

So it might seem silly to ask a serious question about whether there are any U.S. households that really “cannot” buy Internet access service operating at 12 Mbps, from at least two providers. The reason is that looking at fixed network access, while useful, does not actually exhaust the options already to potential buyers.

Exede, the satellite broadband service already offers 12 Mbps service. HughesNet, which has successfully launched a new satellite identical to the bird used by Exede, has not yet announced its retail packages, but will be able to offer similar speeds. Subject to business logic and some engineering constraints, HughesNet could offer faster services.

But most U.S. consumers also can buy mobile broadband services. The FCC report also notes that just 6.2 percent of people do not have access to mobile broadband services offering downstream speeds of at least 3 Mbps.

In other words, the percentage of people without access to speeds of 4 Mbps on a fixed network (about six percent, using the FCC calculation) is matched by six percent of people also unable to purchase a mobile broadband service operating at at least 3 Mbps.

Put in a positive way, some 94 percent of U.S. consumers have access to fixed or mobile broadband services of 3 Mbps to 4 Mbps, and in many cases, both, from multiple providers.

The FCC study also says that the percentage of people unable to buy either a fixed or mobile broadband access services of at least 3 Mbps is 1.7 percent. That represents about 5.5 million people, or about 2.2 million locations, using the 2.5 persons per household metric.

So in addition to the two U.S. broadband providers offering 12 Mbps services, one has to take into account mobile broadband, and some amount of fixed wireless, as well.

The FCC analysis implies some 5.9 percent of U.S. households are not reached by a fixed network, using 116 million U.S. households as the universe of places. Some might use a household base of 130 million, which would suggest five percent of U.S. housing is not reached by a fixed broadband network.

The point is that the same report also suggests that mght not be as big a problem as might seem to be the case. Keep in mind that the percentage of people or households not able to buy a 4 Mbps service does not mean they cannot presently buy a service that runs at lower speeds.

The report also suggests that in June 2011, some 9.6 Americans did not have service of at least 768 kbps downstream. Assuming a typical figure of 2.5 people per household, that would imply about four million U.S. households not able to get Internet access at speeds of at least 768 kbps, from a fixed network provider.

The FCC report also notes that 79 percent of telco-served locations nationally have access to service running at least as fast as 4 Mbps in the downstream direction, while 85 percent of cable-served high speed access locations have access running at a minimum speed of 4 Mbps in the downstream.

The point is that it is perhaps useful to note how well various contestants are doing, but less useful to argue that any one type of network is the benchmark for measuring the extent and quality of access.

Barnes & Nobles's Nook Sales Decline, Content Sales Increase

Sales of Barnes & Noble’s line of tablets and e-readers declined in the company’s fiscal 2013 first quarter ending July 28, 2012, the Barnes & Noble reported. But digital content sales increased 46 percent, generating enough revenue to offset lower device sales.

So you might say Barnes & Noble has the right strategy; it just needs to execute by selling more content players to support its media sales.

In earnings report, Barnes &  Noble broke out Nook sales in ways that obscure the dip in device sales and the growth of content sales. 

*Nook revenue is comprised of Nook devices, digital content and accessories.

Barnes & Nobles's Nook Sales Decline, Content Sales Increase

Sales of Barnes & Noble’s line of tablets and e-readers declined in the company’s fiscal 2013 first quarter ending July 28, 2012, the Barnes & Noble reported. But digital content sales increased 46 percent, generating enough revenue to offset lower device sales.

So you might say Barnes & Noble has the right strategy; it just needs to execute by selling more content players to support its media sales.

In earnings report, Barnes &  Noble broke out Nook sales in ways that obscure the dip in device sales and the growth of content sales. 

*Nook revenue is comprised of Nook devices, digital content and accessories.

Like Telcos, Cable Will Try to "Enhance Value" Rather than "Cut Price"

As telcos have tried to "add value" to their services rather than "cut prices," so too video entertainment subscription providers will try to emphasize "more value" as an alternative to "cutting prices." 

What remains to be seen is the success of such tactics, over time. At the moment, there doesn't seem to be much danger, though. 

Since people buy "content," and since most of the popular content is not easily available online or over the top on the Internet, video subscriptions still have drawing power. 

Monday Night Football is but one example of video content that remains exclusive to subscription services, The Hollywood Reporter reports. 

Adding online and mobile content access as a form of added value for video subscribers likely will remain a major tactic, even as some operators mull launching lower cost services in some way, and possibly will do, at some point.

In the past, telcos have had mixed success trying to "add value" rather than "cut prices." In fact, you might argue, even over the top messaging and voice services that do provide added value mostly are valued because they represent lower-cost alternatives to traditional voice and messaging services. 

But video is a different sort of product than "communications." The clearest example is the steady upward prices for video subscriptions every year, compared to declining nominal rates for communication services, or at least declining costs per unit.