China has more IPTV subscribers than any other country in the world, and IPTV is available to millions of households nationwide. At the 2016 Huawei Global Analyst Summit this Spring, Mr. Jie Feng, CTO of China Telecom Sichuan Branch, explained how its own IPTV service has changed the DNA of his organization.
Traditionally, competition among communications carriers in China has been about providing bandwidth at the lowest possible price. On the mobile side, the three major mobile carriers in Sichuan Province are in a price war: the price for 700mb of data plus 200 minutes of voice service from Sichuan Mobile is equivalent to US$14/month, while Sichuan Unicom and Sichuan Telecom were at US$12 and US$13 respectively. The result is low customer loyalty and greater customer retention costs. In 2011, revenue was growing at a rate of more than 13 percent, but by mid-2013, growth was down to just over 8 percent.
The management of China Telecom Sichuan Province decided that a different approach was needed. Instead of joining the voice and data price war, it would focus its attention on providing Video First. Broadband has long been a national priority in China, not only for the benefit of consumers, but also to attract private investment and accelerate industrial growth. Because China Telecom has rich experience in the fixed broadband business, the company already had the foundation to differentiate itself from its mobile competitors by bringing video to as many consumers as possible.
To accomplish this Video First strategy, a new “Zero, One, Two” business model was put in place, where there is Zero cost for video as a basic service, Internet access over One fiber connection to the home, plus Two smartphones. Unlike the competition, Zero, One, Two enables China Telecom to appeal to the entire household, all for a single price. To support the transformation toward video as a basic service, China Telecom also transformed its organization by combining its TV Broadband, Multimedia, and New Media Operations departments, and placing them under unified management and operations.
By 2015, China Telecom had deployed a full optical network with 90% coverage. Traditional local exchange switches have all been shut down, and voice is all over IP. It took just 330 days from Sichuan Province to go from one to 21 fully-optical cities. In September 2015, the Sichuan government held a ceremony celebrating that it had become the first fully optical province in China. While some construction still remains in remote areas, coverage in cities in 2016 was greater than 98%.
At more than 9 million subscribers, China Telecom Sichuan Branch operates one of the largest IPTV deployments in the world. To provide high definition television, 4K ultra HD and Blu-ray video content, the operator built its ultra broadband metro networks to support 100mbps access. China Telecom also decided that CDN was integral, so it could accommodate not just traditional broadcast video, but also streaming video over the Internet. A three-tier CDN architecture was built, at the province-wide level, in municipalities and in areas that had marginal coverage. To meet the demands of its consumers, China Telecom Sichuan Branch opened its network platform to business partners. Content includes live TV such as China Central Television (CCTV), as well as video on demand, music and games.
Devices are also an important element. Before China Telecom Sichuan Branch placed video in its list of basic services, the operator certified full 4K set-top boxes, a first for any Telco worldwide. Then, there’s a feature called Home & Love. While consumers in other cultures tend to communicate mobile-to-mobile, China Telecom recognized that many younger Chinese consumers rely upon video to communicate with family members far away, so Home & Love enables video calling from Handset-to-Handset, Handset-to-TV, and TV-to-TV.
“We know there are high requirements,” said Mr. Feng. “If there are interruptions or pixilation, we will get calls. So over the past 3 years, we have been developing an end-to-end system for video quality maintenance, from user through the operator’s network. We also are striving for zero configuration of the home gateway and set-top box, and zero verification of quality. We have automatic fault-finding: currently our system can find errors in the home, in the optical modem, and in the network, so it’s an end-to-end system.”
China Telecom’s rigorous standards have been paying off. Installations have increased by four times. Fault isolation has increased by 10%, and customer satisfaction has gone up 12%. The company knows that customer satisfaction can increase greatly if they can identify and deal with problems before customers see them.
“If we can become pro-active, not passive, and forecast the user experience before the complaints come,” said Mr. Feng, “it will help a lot. We will continue to push the border of our video services and become a global leading operator.” China Telecom Sichuan Branch is already well on its way.
We all know about ‘Over the Top,’ where an online video provider circumvents or disintermediates a pay TV operator (while using the operator’s own network to deliver said video). Then there’s ‘TV Everywhere,’ in which pay TV content providers require users to associate themselves with their pay TV subscriptions or, no play.
Through the Middle
A third online video service model is where a pay TV operator enters into a relationship with an OTT provider or online aggregator and exposes the online service within its pay TV experience. In other words, not OTT or TVE, but “through the middle,” or “TTM.”
At first, it sounds like a gimmick – some kind of desperation move by the pay TV provider to give frustrated subscribers one more reason not to cut the cord. But let’s look a little further…
TTM: A little background
In March 2014, the Danish broadband provider Waoo! introduced Netflix from within its pay TV user interface, through the middle. Here’s a demo video (in Danish).
This is enabled through the integration of software from Netflix, Nordija and Airties, which are Waoo!’s TV middleware and set-top box suppliers, respectively.
DISH embraced TTM too
In December 2014, DISH Network introduced Netflix integration as well. DISH’s implementation is different from Waoo!’s. While Waoo! dedicated a button to Netflix in its main menu, DISH placed Netflix within the electronic program guide, which made Netflix “just another channel.”
So now, I can access Netflix using the same method of access as DISH uses for video on demand.
TTM’s not a gimmick
Again, I thought “it’s a gimmick.” Until I decided to try it. If you own a streaming video player, you’ve probably been through a drill that goes something like this:
- Turn on the TV set (using either the pay TV STB remote or the TV set’s own remote)
- Locate the streaming video player’s remote, press the button to activate it
- Locate your TV set’s remote, and change the input from your pay TV set-top box, to the streaming video player
- Navigate the video player’s menus to the Netflix application, and activate the app
- Navigate the Netflix thumbnails, using up/down/right/left on the streaming player’s remote, or locate the search field and use the text search character matrix.
- Watch videos on Netflix
- Grab the TV’s remote and switch the input back to your pay TV set-top box
- (…At which point, we’ve used at least two different user interfaces – that of your streaming player and Netflix.’ Plus, perhaps, the TV set’s own UI – and as many as three different remote controls)
- (…At which point, my wife asks me to call someone for technical support – but who?)
Compare this classic early-adopter experience with DISH’s TTM experience
- Turn on the TV, using the DISH remote
- Bring up the EPG and navigate to Channel 370
- Press the center button to enter Netflix.
- The Netflix user experience takes over (DISH can’t be held responsible for Netflix’ unusable search and recommendation capabilities)
- Hit Cancel, Cancel, Cancel… to back out of Netflix and return to DISH
- (…at which point we used one remote control and two UIs: that of DISH and that of Netflix)
The first time you access Netflix via the DISH EPG, you must enter your Netflix ID and passcode. Any subsequent use of Netflix goes right from the EPG to Netflix, with no login needed.
Has someone already decided that TTM is too good to be true?
I was initially motivated to write this article because Zatz Not Funny published a report that the YouTube and Amazon apps were being removed from the TiVo Series 2 and Series 3 DVRs, as of April 15. Sure enough, TiVo confirms this. Because the apps reside on the TiVo box, this is really another version of Through the Middle.
I immediately jumped to the conclusion that Amazon and YouTube were starting to get choosy about their distribution channels – and that TTM might just be a fleeting phenomenon as different content providers contend against one another to be the one on top. Or as my wife’s dad used to say: “If it’s any good, they’ll stop making it!”
As it turns out, the moves by Amazon and YouTube are simply because the TiVo 2- and 3-Series are old, and the app developers made the choice not to support them anymore. In fact, video apps from Amazon, YouTube, Hulu Plus, Netflix, Vudu (and others) are all key selling points for TiVo’s current Roamio DVR, and surely these video providers must appreciate having access to TiVo’s subscribers.
Not long ago, an industry friend of mine told me that Netflix had been in a pay TV operator’s EPG, but had pulled out. But the reason that Netflix and the pay TV provider went their separate ways was because Netflix wanted more control over the user experience.
So, these weren’t cases of competitive wrangling or channel conflict at all. One was about discontinuing support for old devices, and the other was about a content provider trying to maintain its look and feel across any device environment.
TTM is BoBW
Pay TV operators that integrate their services with TiVo can choose whether or not to expose TiVo’s OTT apps through the middle, but that’s also another story. In those cases, the pay TV operator is calling the shots, which brings us full circle back to the debate as to whether OTT is a threat or an opportunity for operators.
In the end, I view ‘Through the Middle’ is BoBW (the Best of Both Worlds) as a consumer retention tool for pay TV. But I think it’s more because of the added convenience, and it’s a tacit admission by pay TV operators that OTT can be a friend and isn’t a threat.
[ Side note: This topic takes us into a whole 'nother discussion about where the pay TV provider's user experience leaves off, and where the OTT (TTM) provider's UEx takes over. I promise an article about this soon. ]
It’s an easy trap to fall into: to be so distracted by goings-on in what have traditionally been the world’s largest pay TV and online video markets that we miss what’s going on in the rest of the world.
Case in point is India. Five to ten years ago, it was easy to dismiss India as a yet-to-emerge market for pay TV. There was a vague assumption that IP video might succeed over mobile, but not anytime soon. And because per-subscriber revenue is so low, the conventional wisdom among infrastructure providers was that India wasn’t particularly worth their attention anyway.
Fast forward to the present day: India’s TV and online video industries are super-active, white-hot. Last summer, Hong Kong-based Media Partners Asia estimated that pay TV in India would grow at a 11% per year through 2018, driven by rising ARPU.
Just during the first calendar quarter of 2015 alone:
- India’s Ministry of Information and Broadcasting issued operating licenses to 11 TV operators between November 2014 and January 2015, and then another 11 between January and early March. In that short period, it represents about 15 percent of the total number of operators in the country (153 total, as of March 10)
- Operators are adding new TV channels at a rapid pace. Tata Sky announced that its move to MPEG-4 is making room for 20 new channels. The same operator launched 4K set-top boxes early in 2015.
- Outside media companies see India as a new market opportunity for their programming. Turner announced the launch of its Toonami channel with five operators in February. Online video provider Hungama.com is adding Disney and Marvel content.
- New online video providers are also coming on the scene. Viral Fever launched on online movie service, while Culture Machine, which distributes content over YouTube, raised US18M to fund its network of 400 India-based media brands and independent content providers.
- Graphic India raised about U$3M from the Asian investment arm of Chernin Media, which is also noteworthy because Chernin has a content partnership with AT&T (my guess is that this could help fuel a future AT&T ‘International’ content offering in the US).
- New operators and broadcasters are also raising money: One operator, Ortel Communications, raised INR1.75B (about US$28M) in March. India-based Zee Media is offering 108M shares in its IPO, and is launching its &TV service in the UK in combination with the trivia app QuizUP on April 6.
- New video advertising networks are coming on the scene, with launches by Komli Media and Seventynine, which offers an in-app advertising platform and advertising SDK for mobile video.
And of course, infrastructure providers are striking while the iron is hot:
- Verimatrix announced a video security win with Vuclip, a mobile VOD service available in India, Southeast Asia, and the Middle East
- Ericsson, Cisco, and Elemental Technologies all announced operator wins for their 4K-capable video encoding platforms
- Cisco also announced a win for its Videoscape multiscreen service delivery platform, with DTT operator Videocon 2dh.
- Companies like Micromax are introducing Android-based 4K/UHD TVs in India, although consumer uptake for 4K in India is likely to be sluggish.
- Amagi is winning deals with video content providers for its Cloudport cloud-based online video system
- Technicolor is considering making video technology acquisitions in the country.
- Home-grown infrastructure providers are emerging. New Delhi-based Chrome Data has announced an anti-piracy service to fight cable signal theft. Multivert India has partnered with Video Propulsion to offer low-cost headend equipment.
In short, the entire video industry ecosystem is thriving there.
If nothing else, this situation has prompted me adjust my perception as to which pay TV market might be the biggest one right now. If not from a revenue perspective, then at least in terms of opportunity and potential.
This article owes a major tip of the hat to NexTV India.
Update 11 Feb 2015: The majority of FCC’s five commissioners are always of the party of the sitting President. So when FCC Commissioner Ajit Pai exclaimed: “I have studied the 332-page plan in detail, and it is worse than I had imagined,” it was no surprise, as Mr Pai is one of the two Commissioners in the Republican minority.
The wait is nearly over: FCC Chairman Tom Wheeler posted an article with Wired that previews the FCC’s decision on Net Neutrality. At risk of alienating some old friends and making some new ones, my opinion is that the FCC’s pending regulation under Title II of the Communications Act of 1934 is exactly the right thing to do. Operators with their own network facilities have challenged NN and will continue to do so, but their bark is worse than the bite.
Why? Because the FCC holds the keys:
- The FCC set the precedent for N.N. in 1934 by mandating a responsibility to put phone calls through (common carrier), and reinforced it in 1996 by adding transparent handoff between wireline and wireless.
- What happens when any of these network providers starts producing its own content (As owner of NBC Universal, Comcast comes to mind), and gets throttled by another network provider? The FCC is the arbiter.
- If any of these operators actually did go ahead and not play by the FCC’s rules, the FCC can issue warnings, followed by fines, followed by revoking their licenses to operate.
Besides, do you honestly think that your favorite cable, telco or wireless operator would actually walk away from business (e.g. stop investing in their networks, as AT&T and Verizon have each threatened to do) if the FCC put NN in place? Really? Would you like to buy a bridge?
In my opinion, N.N will result in exactly the opposite. Readers of my blog know about my trevails with Centurylink, which currently has no incentive to give me more than 3.2mbps down and .9mbps up. I am out of mobile range, and no cable operator serves my neighborhood. If Centurylink were suddenly to have competition, I would expect them to protect their share, not abandon it.
In other words, I believe that NN will spur a race to the top, not the bottom.
As the 2015 CES conference fades (already!) in the industry’s rear view mirror, it’s worth recognizing how much occurs during CES week, but not at CES itself. Apple famously casts its long shadow each year, since Apple products are surrounded by a large halo of aftermarket offerings, but Apple (the company) had no overt presence in Las Vegas that week. But another company of similar stature does: AT&T, which begins its annual Developer Summit with a Hackathon during the weekend prior and concludes it with a conference, consisting of a keynote and breakout sessions on the Monday just prior to the CES opening day.
“Mobile is eating the world!”
The 2015 AT&T Developer Summit, in its ninth year, had 4,000 developers in attendance. For the Hackathon, the attendees broke up into groups to create apps that followed the decidedly “mobile” themes of the event: mobile apps, the ‘Internet of Things’ (including smart homes and the Connected Car), WebRTC, atop the software-defined network (SDN) and network function virtualization (NFV). SDN and NFV are about defining the resources you want in your applications, and making sure that the network can provide them on demand.
The conference keynote was opened by AT&T Mobile and Business Solutions President and CEO Ralph de la Vega, who exclaimed that “Mobile is eating the world!” (riffing on the famous 2011 “Software is eating the world” article, about how old-school hardware companies like HP are turning toward software to help ensure their futures). Mr. de la Vega then explained how the combination of software, mobility, the cloud and security have already disrupted many industries, changing the way consumers live and work by creating ecosystems that connect secure end points to a secure VPN. Uber is the obvious example.
If it’s not networked, it’s dumb
In an ‘Internet of Things’ (IoT) panel later in the keynote session, Glenn Lurie, now CEO of AT&T Mobility, elaborated that “Any device that’s connected is smart, and if it’s not connected, it’s dumb,” and that AT&T’s goal in the IoT space is to connect to any kind of device or customer, whether it’s an individual or a city; a network of street lights, or a consumer’s automobile or smart watch. With that context in mind, Mr Lurie’s panel had a wide-ranging discussion.
Panelist Steve Mollenkopf, CEO of Qualcomm, unsurprisingly believes that a fundamental quality of IoT will be mobility. Benedict Evans of the investment firm Andreessen Horowitz believes that IoT will be a bigger opportunity than mobility, the PC, and software. Cisco’s Chief Technology and Strategy Officer, Padmasree Warrior, said that now that it is in place, is commerce-enabled and is social, IoT is the next logical step in the evolution of the Internet. Alex Hawkinson, CEO of SmartThings, a ‘smart home’ technology company, added that the key to IoT is to make devices and use-cases simple, accessible, easy to use, and to be sufficiently open to enable walled gardens that provide opportunities for innovation.
The panelists agreed that there is no single unified trend in IoT because it’s so diverse. The most interesting things will happen at the edges of networks, but the availability of connectivity and bandwidth will limit how much ongoing communications will take place, and therefore, how much of the experience will actually need to be available within a given device if the connection can’t be guaranteed. There must be a balance between them to best leverage both. Devices will become so cheap and so useful that they will be everywhere, but they will need software and networks to enable the use-cases.
Smart Homes and IoT are the next frontiers
A September 2014 Goldman Sachs report quotes the Consumer Electronics Association as saying that only 10% of new homes current have home automation. To drive adoption, the panelists said that greater awareness must be created that home solutions exist in the first place. Another driver will be a combination of openness and a consolidation of standards, because consumers will not want to have to decide which walled garden they want to be a part of. It’s up to the developer community to enable use cases regardless of device and network. [ My comment: in the adjacent Connected Car space, some car companies are already planning to enable consumers to bring either Android or iOS into the car, and not force that choice on the consumer. ]
Security was another area of discussion. Last September, a Hewlett-Packard report said that 70% of IoT devices lack security. In order to accommodate security, several things will need to change. First, security must become appropriate to the use-case, and less of a ‘point product.’ For example, DRM for video and data security for health care applications are very different. Yet, an AT&T consumer might have the need for both within the same account relationship. Also, there is already a simultaneous need for security and privacy: data is collected about a device user, but it must be kept anonymous – often for regulatory reasons. In all, the Internet will be called upon to enable an increasingly diverse and personalized experience. There will be more end-points, so the architectures of networked applications and devices will have to accommodate that. There must be distributed intelligence that functions in realtime and, from moment to moment, recognizes that an end user’s device or data may be vulnerable to attack, and decides when to implement security from the cloud and when to invoke it local to a device.
“Hundreds of electric motors”
Andreessen’s Evans noted that “you have hundreds of electric motors in your home, but you didn’t set out to buy these electric motors. Instead, you bought refrigerators and mixers and applienaces and all of them have use-cases. So developers need to respect these accepted use-cases.” Ms. Warrior from Cisco elaborated, saying: “There is a lot of value in connected IoT devices and developers must expose that value. They must make them more efficient, which is where analytics comes in.”
Another issue is one of ‘certification.’ Many devices will be retrofitted into connected applications that have never been connected before. Who will use the technologies? Who will enable them? Are they capable and qualified for use? Developers must ask themselves: “how will we make it easy for applications to happen, and how do we make them easy to use?”
This discussion seemed rather remote from AT&T, but the opposite is true, since AT&T already offers a home security and home control service (AT&T Digital Life) and is trying to drive adoption against entrenched competition like ADT. In addition to AT&T’s strategic initiatives into the Connected Car, where AT&T offers a global automotive telematics platform in partnership with in-country communications carriers in virtually every market where automobiles are sold. AT&T’s NetBond platform provides APIs that enable developers and enterprises to create virtualized applications that integrate AT&T’s network with cloud partners that include SoftLayer, CSC, Amazon Web Services, VMWare, IBM and Microsoft Azure.
But this was a Hackathon – what happened?
Developers participating in the Hackathon had 48 hours to put together apps using the AT&T network platforms and APIs. Many teams formed, from which 20 teams were selected for further evaluation by AT&T, which eventually resulted in three finalists. The winning team won $25,000, and was presented with a check on the spot.
Anti-Snoozer, the winning app, utilized AT&T’s Drive APIs, a camera, and motion-sensing to monitor the driver’s position and the dilation of the driver’s pupils to sound an alarm to awaken a drowsy driver (presumably, for long enough to find a place to pull over or stay).
The other apps both used Web RTC to establish a realtime video conference between a user and a business via Web sites, using AT&T Web RTC APIs. “Sitter” is for care-givers in the home. It enables a parent to advertise for care givers. The applicant can record a personal video interview for the parent via a Web site. When the selected sitter gets to the home, the app connects to AT&T Digital Life, to enable or block access to rooms in the house, as enabled by the parent. “Host Magic” was for a home owner renting a property. Potential renters sign up, and the property owner receives an email notification that there is an applicant waiting. Similar to ‘Sitter,” the property owner can interview the applicant and grant access only to desired parts of the property.
The meaning of it all
Telcos will win the long-term battle of communications, because they place the network itself at the center of their business, not the delivery of paid content – as cable companies do. In other words, AT&T’s product is its network, and it is AT&T’s strategic interest to rally as many developers around it as possible. Just as Apple began doing in 1990 with its Worldwide Developers Conference (WWDC), and Microsoft with its Professional Developers Conference (PDC) in 1992.
DISH Network used the 2015 CES conference both as a review of recent announcements and as a launch pad for the new; in three areas: new content offerings, new equipment, and a new user experience. Some of it was evolutionary, and some of it pace-setting. Here’s a recap of my tour of DISH at CES.
Online video to the TV
First there were a number of content announcements. Because it was announced just before the pending holiday break, many had missed DISH’s December 17 announcement that Netflix has been integrated into the DISH Hopper home media gateway as a TV app; one of the first US pay TV operators to do so. DISH also announced a Vevo music video TV app.
TV video online
DISH’s biggest CES news was its new Sling TV service, which will be available later this year. Sling TV is a stand-alone online TV service designed expressly for Millennials, the 18-35 audience that the pay TV industry will increasingly be depending upon to sustain the business as today’s pay TV households age and gradually disengage from premium programming. No traditional satellite TV subscription required.
Rather than being cord-cutters, Millennials tend to be “cord-nevers” who feel that they can get all the video programming they need from other sources without subscribing to pay TV in the first place. Others of that demographic ‘hitch-hike’ on their family’s pay TV plan, despite having households of their own. So to characterize Millennials as “cord-cutters” isn’t fully accurate. DISH hopes to attract this demographic where others have failed.
DISH is carrying forward the traditional multi-tiered pay TV content model into this online offering, with a bit of an a-la-carte twist. The $20/month base offering consists of programming from The Walt Disney Company (ESPN and ABC), Turner (CNN, Cartoon Network and TBS) and Scripps Networks Interactive (The Food Channel, HGTV, and the Travel Channel). Announced add-on packs include a Kids Extra (Disney Junior, Disney XD, Boomerang, Baby TV and Duck TV) and a News & Info Extra (HLN, Cooking Channel, DIY and Bloomberg), for $5/month each.
Missing are DVR functionality and regionally-tailored live sports, local programming, and linear programming from TV networks other than ABC and ESPN. It isn’t perfect but it’s a promising start that is gated by content rights, not by technology.
This offering was just a matter of time in coming. Last year, DISH began to offer an international TV programming service online, called DISH World. DISH officials at CES confirmed that DISH World was essentially the Beta for Sling TV. DISH acquired online video technology pioneer Move Networks several years ago, and uses the Move software in both services.
DISH announced a 4K version of the Joey client set-top box, which later received an Editors Choice award from Reviewed.com, a USA Today division that was an official media partner with the Consumer Electronics Association, the host of CES. In picture-in-picture mode, the 4K Joey delivers two simultaneous HD-quality pictures. For DISH customers that don’t have a 4K TV, the existing Joey remains available.
New user experience
DISH was also demonstrating a new TV user interface for the Hopper, which includes a new Home screen, a Mini-guide, Favorites, and Recommendations (using TiVo’s Digitalsmiths platform) . Users will be able to see what’s ‘On Now,’ ‘On Later,’ and recommended content. Search will be across all TV content, plus VEVO. DISH is also adding a Netflix-like “choose uer profile” interface, first to the DISH Anywhere (available as a mobile app or via browser), and later, to the Hopper itself.
Another part of the new user experience is a new remote control for the Hopper with Sling home media gateway. In addition to having buttons, there’s a track pad and speech recognition. Touch and speech have become part of the autonomic nervous system of smartphone users, and DISH acknowledges that reality. The speech recognition is from Rovi’s Veveo subsidiary, with a back-end from Nuance.
DISH will also be supporting high-quality whole-home music via the Hopper and the Joey, and have access to content from IHeartRadio, TuneIn and Pandora, as well as their own music libraries via their home networks. DISH will be pushing the enabling software to the Hopper “sometime this summer.” An integration with Sonos wireless home music systems is also coming later this year.
If you want to watch your recording of The Adventures of Sherlock Holmes, you have to scroll down to the “T”s for “The.” Not the “A”s for “Adventures,” as I highlighted with the yellow box. It’s tedious to scroll all the way down to the “Ts” to watch something that starts with an “A.” Why not sequence by the first significant word in the title?
Obligatory miscellaneous distraction
In the middle of my booth tour, an impatient late-middle-aged ‘gentleman’ inserted himself between us, blurting out “Fox News! Fox News!,” then walking away mumbling about politics; apparently expecting the DISH executive to resolve the DISH-Fox carriage dispute that began on December 20, right then and there. It would take another week for that to happen.
If I had any single take-away from all of this, it’s that DISH has a clear view toward the future. The company realizes that it can’t bend new consumers to the old ways of pay TV, and instead, is taking steps to meet these consumers more on their own terms. They also realize that today’s mobile consumers aren’t going to be tied to any single access network, given the availability of LTE and wireline broadband (to say nothing of DISH’s multiple wireless spectrum acquisitions in recent years, and DISH said nothing).
Secondarily, Sling TV reinforces my existing belief that “online TV” will probably look a lot like “regular pay TV” as it matures. The content sources may be different – and multiple – but the entire bill might come to resemble what today’s consumers pay for DISH Network, Comcast or AT&T U-verse. Start with the base $20 for Sling TV, and $5/each for the add-on packs. Then add Netflix, Hulu, direct-to-consumer services from HBO and CBS, plus live TV (however that may happen, given what happened with Aereo), and it all adds up from the consumer perspective. We seem to be headed toward a world that embraces both bundling and a-la-carte.
What’s wrong with this picture is that consumers have to deal with a multitude of user experiences, instead of just one. Someone will eventually succeed in creating single user experience across all pay and online sources. It has to be someone that’s separate from the vested interests of each individual content and service provider. There are a number of third party TV Remote Control apps, but none of them quite nail it.
Competition is coming
It will be interesting to see how well DISH fares against emerging competition from Sony, HBO, CBS, DirecTV (especially if the AT&T acquisition goes through), and Verizon, which shrugged off DISH’s Sling TV announcement, despite that it shut down Redbox Instant last year.
My Bottom line
DISH has taken the old adage of retail to heart: location, location, location, while taking away any excuses not to take services from them. I think DISH is more pre-disposed to a world view of ‘virtual subscribers’ because satellite operators don’t have a direct physical connection (over a wire) with them.
At the time of announcement this week, the only two major devices not supported by Sling TV were Apple TV and the Chromecast. If that’s not enough, consumers can opt for the full pay TV experience and the Hopper’s Slingbox technology, to can get the content that online video offerings lack. Maybe that’s DISH’s real strategy: to use Sling TV as the teaser to get Millennials on to the full Hopper-based pay TV offering.
I also look forward to trying out the new user experience and remote control when they become available.
During the CES conference, Cisco Systems hosted an analyst reception, showcasing Charter Communications, a major US cable TV operator that is one of Cisco’s customers. I came away quite impressed with Charter’s new IP-hybrid HD TV set top box.
The WorldBox and its underlying Spectrum software stack provides a re-usable, portable platform which provides an alternative basis for IP-based multiscreen services. Charter’s offering is more akin to the DVB hybrids from European operators than it is to the US cable industry establishment’s reference software platform, the RDK.
Over the weekend, AT&T announced its intentions to acquire satellite TV operator DirecTV. Should the deal pass regulatory muster and go through, it will create an operator with about 26 million pay TV subscribers, plus 17 million broadband subs, 11 million phone subscribers and 100 million wireless customers. As a merged entity, AT&T becomes a national pay TV provider, with immediate access to TV subscribers outside its fixed-line (U-verse) territory. That’s just in North America. DirecTV has about 18 million TV subs in Latin America as well. All told, this would make AT&T the largest pay TV provider in the US (and in the Western Hemisphere).
Of course, DirecTV is a high-value target for content reasons as well: particularly its exclusivity for NFL Sunday Ticket. Some major AT&T suppliers must also be taking notice. For one, AT&T has based its TV service on Microsoft Mediaroom, which Ericsson bought last year. DirecTV uses NDS TV security and middleware, and NDS is now owned by Cisco. So, two TV infrastructure leaders that also both happen to be incumbent network suppliers to AT&T.
But there’s also a bigger picture: while a combined Comcast-TWC results in a triple-play provider, DirecTV adds to AT&T’s existing quad-play advantage. Without offerings that compete against AT&T wireless and DirecTV, Comcast will remain a local carrier within its own cable TV service territory; even with Time Warner Cable. To serve any devices – mobile or fixed – outside of its territory, Comcast will remain an OTT player. (Note: TWC is partnered with Verizon Wireless – but it’s anyone’s guess as to how Verizon might treat ‘foreign’ video providers over its mobile network in the future).
The expiration of Net Neutrality was certainly a strategic consideration for both AT&T and Comcast. One of AT&T’s terms in the proposed DirecTV acquisition is to place a three-year expiration date on its commitment to the FCC’s current version of Net Neutrality. This is interesting, given that DirecTV is a satellite operator with no Internet access network of its own. My own guess is that this is really a pre-emptive move to keep Comcast from having (or making Comcast pay for) equal access to AT&T mobile subscribers; for video delivered to smartphones, tablets or the Connected Car.
And Comcast doesn’t really have an answer to that. Even if Comcast were to let its own Net Neutrality commitment expire in 2018 (which is the year specified in the terms for its NBC Universal acquisition), that will only be within Comcast’s own network. Comcast would have little power over mobile carriers which, by then, will be perfectly able to parachute right into the thick of Comcast territory, to deliver high quality pay TV over LTE mobile access. This places Comcast at the ultimate disadvantage, even with TWC, because it can’t do the same in a U-verse territory. All the more reason to keep Net Neutrality principles in place.
By missing out on DirecTV now, and by not bidding for Sprint last year, Comcast missed two strategic opportunities to reach subscribers that don’t depend on fixed lines, at a time when mobility arguably represents the biggest single opportunity in telecom. Not quite so much to see here after all.
But the competition will really get interesting when DISH finally launches a national LTE service, using all that spectrum that they’ve acquired in recent years. Or, even more interesting if DISH were to acquire T-Mobile as well.
In the wake of my long debacle to get new voice and broadband services from CenturyLink, detailed in my five-part article, I was reminded that many consumers in the US are still served by what, in effect, are telecommunications monopolies.
Even though large operators (often backed by legal disclaimers) say that there is plenty of competition in local markets, my own reality was to have no viable alternative for fixed voice and data communications services. With no competitor looking over CenturyLink’s shoulder, I was virtually forced to beg for service for more than a week. And I must settle for 3 megabit broadband access.
It isn’t this bad for most consumers
Fortunately, the competitive landscape is different for most consumers. In most local markets, at least in metropolitan areas, they can choose from among at least two fixed-line providers: their local phone company and the local cable operator. In some cases, there are additional alternative private – and even public (municipality- and public utility-based) – broadband providers. Rather than pleading, those lucky consumers can simply change providers without too much sacrifice.
As for pay TV, even though most areas have only one cable operator, all of them face competition from two strong satellite TV competitors: DISH and DirecTV. Plus now, Telco IPTV is a full-fledged competitor to cable and satellite, and direct-to-consumer (OTT) distribution brings a steadily-increasing range pay TV and local broadcast programming. I’m sure that this level of competition motivates at least most of them to improve continually.
On the mobile side, the US has four national cellular carriers – AT&T, Verizon, Sprint and T-Mobile - and the healthy competitive battle among those ensures that, if one of them provides doesn’t reach or provides inadequate services, there are others to choose from.
Stay tuned for the next battlegrounds
So, the battle among service providers in the physical world is well engaged. Now, all eyes should turn to the FCC, as it fights to reassert authority over the ongoing consolidation of the media industry, and Net Neutrality. Whether or not operators like Comcast and Verizon are purposely degrading service for content that they don’t originate or profit from themselves are two sides of the same coin.
But those are stories for a different day. (Ed: As it turned out, it was a story for the next day.)
Furthermore, Centurylink wasn’t done with me either.
This is the last part of a 5-part article that contrasted two very different customer service experiences; one with TV provider DISH Network, and the other with the local incumbent Telco, CenturyLink. The DISH experience was one of the best customer service experiences I have had in some time. CenturyLink was a nightmare. The story starts here. Part 2 is here, Part 3 is here, and Part 4 is here.
Somebody up there must have decided that I had had enough
While I was waiting for Emily from CenturyLink to call back (who never did), I decided to call the number from the “customer satisfaction” message that had been left for me on Sunday. True to form, it landed in the Philippines. But instead of going through the previous pattern, I immediately asked the agent to transfer me to an agent in the United States, which she did.
This time, the call was answered by an agent named Lori, who, after I asked, revealed that she in fact was able to read my history of support attempts on her console. I told her that I expected resolution during this call, and since there must have been a lot for her to read, I gave her a short summary of the procedings to date anyway. After two times on hold, she told me that Internet service was now associated with both my residential and business lines, and asked me to switch the jacks outside.
Of course, to switch jacks, I realized I would lose this call, so I asked her to give me her direct line. She did so, and assured me that she would answer the phone. So I switched the jacks outside and prayed. First I called the residential line from the business line, and it rang on the right phone. I called the business line from the residential phone, and the right phone rang. I had Internet service in my office. In short, everything was finally right. I then called Lori to tell her that everything was finally in order, and thanked her for whatever she may have done.
I asked Lori to send me a customer service feedback form, told her that she was my hero for the day, and told her I would give her top marks for resolving all of this. However, the promised feedback form never came. Who knows whether the “right” services were a result of my calls with Emily on Thursday, or Lori on Monday. Also, I’m half expecting to be billed double for Internet access, since it was now associated with both of my voice lines. But after a week of drama, I was thankful to have my services.
Not only that, but my broadband access has gone from 700-something kilobits per second to the three megabits that (in fairness) the CenturyLink rep I spoke with on January 14 had said my line tested for. Still, it’s far cry from the 40mbps that CenturyLink advertises in my local market.
Why did this have to be so expensive, to CenturyLink and to me?
In the aftermath of this debacle, I could only sit in wonderment. Why, in 2014, couldn’t this have been better managed? I was not CenturyLink’s first broadband customer. Why a major Telco can’t seem to provide a consistent single view of their customer through any service rep’s console puzzles me. Some reps saw my history and some did not. Also, why could some customer service agents see what other parts of their operation were doing, while others could not – forcing them to place the customer on hold to call around the company manually? Since the agents in the Philippines couldn’t help, why weren’t they better trained? Why did so many people have to be involved? And all of this just to resolve what might even have been an order-entry mistake!
If you’re a Telco, you know that call-center support costs just a fraction of the $250-$500 per incident for a site visit. Accordingly, it’s easy to see why CenturyLink doesn’t send technicians onsite to activate new services. But they should darn well better make sure that their internal support, troubleshooting and escalation processes work flawlessly before confounding innocent consumers. They also should make sure that nobody tries to sell wiring that isn’t necessary (the home was wired just fine two weeks ago before we moved in), and make sure that the instructions that arrive with the DSL modem don’t reference a defunct company or a CD-ROM that isn’t in the package. It all takes relentless attention to detail and frequent process testing, neither of which were evident to me.
My other observation was of how utterly unconcerned most of the CenturyLink reps were, about providing an acceptable customer experience. They just worked there. Nearly all of the burden to resolve this issue was placed on me, and I had to do all the critical thinking. I was fortunate to finally reach two people – Emily and Lori, probably by the luck of the draw – that were actually able to help. But to get to them, I had to bypass CenturyLink’s first line of defense: their outsourced call center. I also had to bypass a representative that was hoping to book an $85/hour home wiring appointment which, in retrospect, and as common sense dictated, was never necessary.
One can’t fault that a company the size of CenturyLink must put a huge focus on cost-reduction, but my own experience showed how cost-cutting can backfire. My many (many) calls, without resolution, were probably more costly than CenturyLink’s model would hope for. And in addition to the poor use of my time, it put me out of business for several days – which was very expensive to me.
CenturyLink must and can do better.
I promised a number of people at CenturyLink that I would publish this series of articles, which hopefully speak for themselves. Meanwhile, I’m looking forward to reviewing DISH’s new Hopper with Sling and its other associated new product offerings.
By the way, another DSL modem arrived from CenturyLink yesterday. I’m not exactly sure what to do with it, and fear the consequences of calling them to find out.
On to my closing thoughts