For Internet-delivered video, “Pull” will win over “Push”

Way back in 1997, Wired breathessly heralded the era of Push, which anticipated that the demand-driven Web, in which we clicked URLs, would be replaced by content that is pushed to your browser (remember, this was in the days before smartphones). Widespread broadband access was years away so the idea of pre-caching content on your computer seemed a good idea – even better if it was preferences-driven, in hopes that it would be more relevant. The article went on to propose that the browser itself would become obsolete (which, in a way, anticipated Apps).

Here we are 13 years later. Today’s “push” comes in the form of interstitial advertising. Want to watch videos on most of the TV networks’ sites? You have to zone out for fifteen or thirty seconds with the volume down, tapping your toe or drumming your fingers, waiting for the darn ad to play. Then, on to the content that you actually wanted.

Now we’re seeing YouTube and Amazon experimenting with paid video. Netflix has an app on the iPhone and iPod Touch (surprising, since Apple has its own video-on-demand service through iTunes to the same devices, and has relaunched Apple TV with no storage). The TV networks continue to limit what’s available online, in hope that online video consumers return to traditional TV where their traditional advertising models still work. But in the long run, I think that paid on-demand rentals and download-to-own models will become the default for TV programming, just as it is for movies. It already is a trend that’s building momentum.

“On demand” models will ultimately be the way we get most of our commercially-originated video programming on the Internet. People like to opt in. They like to control their destiny, and that includes video. It follows that people are willing to pay for content they want, just as much as they hope to avoid having unwelcome content pushed at them. Even when it’s “free” to the consumer (but it isn’t because my time has value too).

Personally, I get annoyed when I have to opt out. But on-demand, without commercial interruptions? I gladly pay for Major League Baseball and Netflix because they have content that I want, and neither of them push ads at me. In that light, Hulu Plus is a non-starter: why would I pay for it, and still have to watch commercials? No, that’s just greedy. That’s almost as bad as Comcast pushing banner ads into their EPG, hoping that I’ll click one in haste and generate a few pennies of revenue to them – I’m about to dump Comcast altogether as a result, and go back to satellite.

Similarly, I was a Facebook early adopter because I wanted to understand social media. But over time, Facebook’s sole purpose became blatantly obvious: it’s a data mining and viral marketing app, and the social benefit to its users is entirely incidental. Advertisers mine your activities and push ads in your face. Call me old-school but I, for one, visit my Facebook preferences and settings often because Facebook changes them constantly, trying to outsmart you into allowing the camel’s nose into the privacy of your tent. Thank The New York Times for its May 2010 article pointing out that Facebook’s privacy terms are longer than the United States Constitution!

Nope, I’m a “pull” kind of guy, and I’m willing to bet that most of you are too.

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Google TV Report – Coverage by IPTV News (UK)

IPTV News published an article about the new tvstrategies report on Google TV. Google TV is a classic example of a company that bundles several already strategic assets in order to create a new one.

My thanks to the Editor, Jamie Beach. Nicely done!

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New report – Google TV – Light Reading coverage

On August 15, I released my analysis of Google TV. It’s available for sale via the Publications page on my Web site.

This week, Carol Wilson of Light Reading interviewed me and wrote a story about the report and my positions on Google TV – in general terms. I believe that Google TV will be fighting an uphill battle right from the get-go, and I have lots of advice for broadband operators, Telcos and ISPs that think Google TV is a shortcut to video services.

Thanks for the great write-up, Carol!

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An Unexpected Party

Battle lines in the Net Neutrality debate have long been established – if you have a vested interest in being paid for Internet access (e.g. if you are a communications service provider) or if you sell content (e.g. if you sell pay TV and/or own the conduit over which it travels), you probably are of the position that Net Neutrality will destroy the economy and the civilized world as we know it, and give you no choice but to lay off half your staff if it passes (heaven forbid). If you are a consumer, or someone that gets paid for facilitating access to content (like Google), you are likely to be in favor of it.

Which is why it was initially such a surprise to see Google on the “anti” side in its joint statement with Verizon that proposed (among other things) that the wireless Internet be “closed.” After all, hasn’t Google championed N.N. forever? Then I remembered that Google 1) derives 97% of its revenue from advertising and is becoming more concerned with protecting the interests of its advertisers, 2) offers paid content over YouTube, and 3) is close to launching a music service. Not surprisingly, Google is defending its stance.

But another unexpected party took a stance in Net Neutrality debate, unequivocally siding with it: the media industry executive Barry Diller. His holdings present his argument – he wants consumers to have unfettered access to them. The New York Times last week had one of the most objective articles I’ve seen on Net Neutrality (and Barry Diller’s position) in a long time. It seems counterintuitive that Mr Diller would be pro N.N. and anti-consolidation of the media, but kudos to him for taking these positions.

I was initially willing to give FCC chief Julius Genachowski the benefit of the doubt for his “Third Way” attempt to strike a balance between both sides of the Net Neutrality debate, but on further reflection, I have to agree with Mr Diller – it’s a sham. The New York Times article had the best one sentence definition I’ve seen in awhile: “in the broadest sense (the principle of N.N.) holds that Internet users should have equal access to all types of information online, and that companies offering Internet service should not be able to give priority to some sources or types of content.”

PS – This is my second recent blog post with a Lord of the Rings reference – although it’s just because I liked it as a title, not because it has anything to do with the actual story. Sorry ’bout that but I’m enjoying the books again.

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Why is Net Neutrality so difficult?

The way I understand Net (Internet) Neutrality, it’s pretty simple. Internet content should be able to go anywhere, and no commercial interest or government agency should be allowed to interfere with the free flow of information. Why is Net Neutrality so difficult?

The FCC has been ruminating over Net Neutrality for years now. In recent weeks, they’ve hosted closed-door meetings with major commercial broadband service providers. This week Google and Verizon came down from the mountain with a seven point proposal for Net Neutrality, called A Joint Policy Proposal for an Open Internet. Meanwhile, the FCC’s own talks were dissolved. Again, why is Net Neutrality so difficult?

Historically, Google has always championed Net Neutrality. Their four principles – Open Networks, Open Applications, Open Services and Open Devices – remain important guiding principles of the Internet. This week’s seven point proposal encapsulates these four, add two new ones proposed in the National Broadband Plan and by the FCC, plus one more. Let’s review them at them one at a time

First, make open principles enforcable (good!). Second, add an antidiscrimination principle (good!). Third, force service providers to explain their services clearly (good!) Fourth, give the FCC a clear mandate to regulate the Internet (which is currently in question, due to the the court ruling allowing Comcast to regulate what is on its private network, contradicting the FCC position that all Internet traffic be treated equally – so, good!). Fifth, allow for differentiated services (which promotes value added services – good, and it’s OK if some of them are paid or intended just for vertical markets). The seventh one favors extending the Universal Service Fund to the Internet (good).

The sixth proposal is troublesome, right from the get-go: “…we recognize that wireless broadband is different…” Think about it. Connectivity, to most people, is like water; people don’t think so much about how they are connected anymore. The only reason that wireless and wireline are being positioned differently is commercial, for bandwidth reasons – which LTE and WiMAX are poised to solve.

I will make no secret that I am a Net Neutrality advocate, but I’m not black-and-white about it. For example, service providers should be able to charge for premium content and that the activists are blind to this on purpose. But not be allowed, like Comcast, to bar traffic that they don’t like. Or like wireless providers, be given a “pass” essentially not to enforce Net Neutrality at all. Bandwidth is a temporary limitation in the long term, and Net Neutrality shouldn’t be confused with protection of intellectual property (pirated video distributed over P2P), which is a separate issue.

It all comes down to balancing corporate interests with the public interest, and those interests are not always aligned (shall we say politely). With Google’s Android and Chrome software being embedded in so many communications-savvy smart devices, and with Google TV on the horizon, Google is increasingly siding with its profit motive and doesn’t want to upset the media industry ecosystem. Especially when 97% of Google’s revenue comes from advertising.

Especially when Verizon’s latest Android-based smartphones are so successful, and especially since Motorola is reportedly building an iPad-like Android-based tablet for Verizon FiOS TV. No wonder Google appears to be compromising, and now I start to see why Net Neutrality is so difficult. Google has transformed from being a pure Internet company, into a platform for paid content.

Give the Google-Verizon proposal a few points for effort, but make Google stay after school to write on the board a thousand times: “I shall be true to my principles” and “I shall do no evil.” Hopefully, the FCC regains adequate spine to ignore clause number six.

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Microsoft as Galadriel in the era of Apps

Tolkien’s epic, The Lord of the Rings, is familiar to most of us. In one memorable scene, Frodo freely offers the Ring to the Lady Galadriel, and she tests Frodo’s dedication to his mission. It occurred to me that Microsoft’s role in the rising battle of mobile device ecosystems resembles Galadriel’s confrontation with Frodo.

“In place of the Dark Lord,” she proclaims, “you will set up a Queen. And I shall not be dark but beautiful and terrible as the Morning and the Night. Fair as the Sea and the Sun and the Snow upon the Mountain … All shall love me and despair!”

Sure sounds like Microsoft in the PC era. But now the equation is different. It is sad to hear Microsoft CEO Steve Ballmer respond to cries for a competitor to the iPad and the Android and Apple app ecosystems by promising that Microsoft will have “slates” sometime soon, and that Microsoft is “all in.”

Mr Ballmer simply can’t see that Microsoft’s era has passed. Yes, Microsoft, like IBM before it, will remain a powerful force that dominates many markets – even interactive TV – but now the battle royal is between Apple and Google.

I suppose that under closer scrutiny, the comparison breaks down – who could imagine Microsoft as an Elven Queen? Yes, I suppose you can say that The Ring equates to market leadership that Microsoft once had in the PC era. But, as in the outcome of Frodo and Galadriel’s confrontation, Google, Apple and RIM are not about to cede it freely to Microsoft.

Maybe Microsoft’s situation in the post-Windows era is more like the passage of Frodo’s Fellowship through the Mines of Moria, but I won’t introduce another metaphor here. “And they call it a mine. A mine!”

It remains to be seen whether, like Galadriel before it, Microsoft passes the test. But it looks like Microsoft, like Galadriel, “will diminish, and go into the West,” and remain Microsoft.

(with apologies to JRR Tolkien and all holders of his intellectual property and its licensees)

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What is “TV Everywhere,” really?

There has been a lot of discussion over “TV Everywhere,” the service option being launched by many of the pay TV operators, including Verizon, AT&T, Comcast and others; which allows pay TV subscribers to access programming via the Internet. DISH also has been using this term, in reference to its Sling-enabled devices.

I haven’t really heard of it being characterized in this way, but isn’t TV Everywhere simply another example of a supplier (in this case, a supplier of programming to consumers) finding a new and ready distribution channel (broadband Internet access) and harnessing it in order to remain an option for some would-be cable-cutters, and maybe attract some people that aren’t on their service at all, in the process?

TV Everywhere was topic of a panel discussion at the NCTC Independent Show, and blogged about by Bernie Arnason, co-founder of TelcoTV, on his Telecompetitor blog. The point was made that “over the top” (OTT) video should be differentiated from TV Everywhere because OTT disintermediates the pay TV provider while TV Everywhere is a pay TV service. So when a pay TV provider refers to extending its own service package over the Internet, it should have a different name – and “Under the Bottom” was suggested. Semantics aside, whatever “TV Everywhere” is, the point that it’s different from OTT is well taken.

It’s understandable that Avail TVN, a “wholesale” supplier of pay TV programming to Telcos and other operators, would feel this way about it. In their case, TV Everywhere is another way to position their TV programming, so it would appeal to operators that may never do a facilities-based IPTV solution.

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PCCW ahead of the curve again

Nearly a decade ago, the telecommunications industry began watching as PCCW, the incumbent Telco in Hong Kong, started to deploy its Now TV IPTV service. From around the world, attention was focused on this operator as it attained a 30-plus percent pay TV market share in its local market.

In recent years, PCCW’s CTO, Paul Berriman, began to refer to the operator as a post-IPTV operator, in which TV was just one screen among many. Not only were they offering TV-over-broadband without a hitch, but also, were distributing it to mobile smartphones so English expats could watch Manchester vs Chelsea as they chatted over evening drinks.

PCCW also introduced a wireless tablet-like device called the Eye2. With the Eye2, users could PVR a cooking show and then take it to the kitchen and play-pause-play-pause the program while preparing the dish!

PCCW was gracious enough to host a tour of their facilities in December 2009, coinciding with the IPTV World Forum Asia event, where I was a panelist. Not only did the tour reveal a mature TV operation which serves a million subscribers over its fixed-line broadband network; it also runs two sports program studios that it operates in partnership with ESPN. Because HK is the hub of finance between the East and the West of Asia, PCCW also produces its own business programs.

So in retrospect, Friday’s announcement that PCCW has applied for a TV license, to begin operating a 24 hour free-to-air Cantonese-language channel is no big surprise. It’s only a matter of time before other major Telcos around the world begin to go beyond providing the enabling technologies of broadband video, into the world of programming itself.

Telcos must produce unique local programming if they are to continue to differentiate themselves from aggressive cable and Internet-video competitors. Differentiation is no longer a matter of providing an advanced user experience. PCCW is, again, as it was in the 2000s, ahead of the curve in this area.

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New article on Video and Apps

bit.ly/doz6Xp

Link to my article on Connected Planet Online (formerly Telephony Online), published on June 29, 2010. Enjoy!

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