The first article of a new blog has been published by Videonet, co-authored by David Price and myself. David is a well-known and highly respected executive in the TV technology industry and is now the head of Scala Advisors. Videonet is one of the go-to resources in the connected TV industry. I’ve been a judge for The Connies – previously known as Videonet’s Connected TV Awards – for a number of years. It’s a privilege to be associated with all of them!
Now, to our story… After joining an over-the-top video service, David decided to have a try at discontinuing his pay TV provider’s video service. Soon he was in for a rude awakening… (Continued at Videonet)
We’ll have new articles regularly, on a variety of topics. Stay Tuned!
The European Union’s General Data Protection Regulation (GDPR) goes into effect on May 24 (tomorrow, as I write this). You’ve probably received emails from your business partners, vendors, and companies that send email to you; asking you to opt in to emails that you already receive – and giving you the opportunity to ignore those which you no longer need.
The GDPR provides a regulatory framework to ensure the protection of personal data. But if you’re a technology provider to a company that proivdes consumer-facing video services to consumers in the European Union – one step removed from the consumer – do you need to care about GDPR on behalf of your service provider customers? The short answer is almost surely yes! (consult your corporate counsel)
The TV service delivery and security platforms that enable service providers and content providers to offer video services to consumers provide features that allow them to manage their end-users, and allow end-users to manage their own preferences for the services they take. These end users rely upon the provider to implement personal data preferences according to their desires, including the privacy of their personal data.
Consumer-facing entities will turn to their technology suppliers to help them comply with the GDPR. Suppliers outside the European Union that enable services to Europeans from the cloud are not exempt. According to Article 3, Recital 22, “Any processing of personal data in the context of the activities of an establishment of a controller or a processor in the Union should be carried out in accordance with this Regulation, regardless of whether the processing itself takes place within the Union…”
So a note to vendors and B-to-B service providers: if your platform manages privacy preferences for consumers in Europe and you haven’t paid attention to GDPR, the train leaves the station tomorrow! The penalties for non-compliance are very stiff: “For … especially severe violations … the fine framework can be up to 20 million euros, or in the case of a company, up to 4% of their total global turnover in the previous fiscal year, whichever is higher. But even the catalogue of less severe violations … sets forth fines of up to 10,000,000 euros, or, in the case of a company, up to 2% of its entire global turnover of the previous fiscal year, whichever is higher.”
It’s not something to lose customers over. Are you paying attention now?
Although 2016 was generally a good year for technology, I do have a few bones to pick about Apple. Hence, my first annual 2016 Apple ‘What were they thinking?’ blog post.
My “Baker’s” Top Ten list:
1) New MacBook Pro: The Touch Bar, which is the signature feature of the higher-end models. It’s dim and difficult to see, even under lesser indoor room illumination; and there’s no way to adjust its brightness manually.
2) New MacBook Pro: No real-world connectivity except for WiFi, BlueTooth and two or four USB-C ports. Meaning that you need adapters for Ethernet, external display or projectors, and no SD memory card slot, which are useful (required) in Enterprise market,
3) New MacBook Pro: No Magsafe connector, so now, after a ten year hiatus, people can again bring their machines crashing to the floor when they trip over the power cord,
4) New MacBook Pro: Does not incorporate the latest Intel Kaby Lake processor. People buy this machine for a 4-5 year lifecycle, and part of that is to buy the latest possible processor. The only reason I can think of, for why Apple opted for a previous-generation processor, was to boost 2016 revenue for the MacBook Pro line,
5) New MacBook Pro: No optical (CD/DVD-R) drive. Even though these have been missing on the MacBook Pro for a few years, I’m not real happy about having to use an external DVD/CD drive to back up my machine onto physical media, which I still do every so often,
6) iPhone 7: No headphone jack, end of story. Hope that Apple keeps the 6s around for a while longer,
7) iOS: Apple conditions users to use the button in the upper right to go “back” – except for voicemail, where the UI in that position is for changing your voicemail greeting,
8) iOS: Why does Apple insist on hiding elements of the UI that are useful, like the Search box and the ‘Back’ arrow in the browser?
9) iOS: Users have to shift to the alternate keyboard for the @, which is only the most used character on the Internet. Really?
10) iOS: Apple ‘expires’ old versions of iOS too quickly, even when the new ones are known buggy. Yes, you can download older OS versions, but as soon as the installer program pings Apple, the installation process is halted.
And just like a “Baker’s Dozen,” where you get 13 for the price of 12, here’s the rest of my Baker’s Ten:
11) Software stability: iOS 10.2 broke several of my apps. iOS 10.2 also apparently shuts down some iPhone models when the battery level reaches 30%. iOS 9 was problematic too.
12) Technical support: Neither an AppleCare phone support rep nor any of the Genius Bar staff in my local Apple store could confirm whether a Thunderbolt-to-Ethernet adapter could be used to connect and migrate my software and content from my old Mac to the new one – and told me to use WiFi. I had to buy the Ethernet adapter and try – thankfully it worked fine.
I waited for a long time before buying a new MacBook Pro, hoping for better. But given the first five items in my list, I went ahead and bought a 2015 model instead, which still has at least the first three. The 2015 model is sufficient for my purposes, has fast solid state storage, the screen is beautiful, and it has the connectivity I need (with the exception of the optical drive)
After Steve Jobs returned to the company 20 years ago and Apple had its long series of successes with the iMac, iPod, and all the other iDevices, it hurts to think that the post-Jobs Apple has again lost its way.
Just as was the case pre-Jobs’ return, Apple again has many Mac models on the showroom floor, with little to differentiate many of them. Who remembers the Mac Performa, Quadra, Centris, LC, Macintosh II, and Classic, which were all available at the same time. Bewildering. Much like the current MacBook line-up. Too many models, and many of them don’t quite fit.
Cable & Satellite International asked me to contribute my thoughts after the 2016 IBC conference in Amsterdam.
The article is available online via CSI’s Web site.
The promises made by technological progress and the industry consolidation of recent years are finally coming to fruition. Video delivery frameworks now can reside at the customer premises, in the public cloud, in a private cloud, or in a combination thereof. The major video security platforms can be software, hardware, or a combination. Because service delivery can be built around common management and video security platforms, multi-screen delivery challenges have largely been solved. The remaining challenges revolve around implementing the video player, and video encoding in the cloud.
Two areas that I found to be very interesting, but still flying a bit under the radar for most operators, are video quality assurance and truly integrated video content security. Multi-screen service and adaptive streaming have had a huge impact on both of these. Each requires an ecosystem approach and each of them benefits from having comprehensive management frameworks.
By the end of the week, this IBC showed that the vendor community is meeting challenges better than ever, to help operators meet consumer needs and better meet consumer expectations.
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.
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.
On March 12, 2015, the FCC published its 300-page-plus Net Neutrality ruling, titled In the Matter of Protecting and Promoting the Open Internet: Report and Order on Remand, Declatory Ruling and Order.
As expected, Republicans in Congress immediately threatened to undermine it. US Representative Fred Upton (R-MI), Chair of the House Committee on Energy and Commerce and two Congressional colleagues announced their objections the same day.
Another US Representative, Marsha Blackburn (R-TN) exclaimed that “Trying to regulate or reclassify the Internet has as much support as transferring Guantanamo Bay detainees to the United States. Both proposals are net losers that need to be retired once and for all.” She is co-sponsor of an anti-Net Neutrality bill, HR4070, The Internet Freedom Act, which is currently before the 113th Congress.
Was the FCC strong-armed?
Republicans believe that President Obama inappropriately influenced FCC Chairman Tom Wheeler on Net Neutrality. So far, Republicans in Congress have scheduled five hearings into the matter:
- US House Oversight Committee, March 17
- US Senate Committee on Commerce, Science, and Transportation, March 18
- US House Energy & Commerce Committee, March 19
- US House Appropriations Committee, March 24
- US House Judiciary Committee, March 25
This week, The Washington Post reported that the FCC’s Inspector General, who is named by the FCC Chairman, has opened an internal investigation. On March 17, US House Communications and Technology Subcommittee chairman Greg Walden (R-OR) released a draft bill to reauthorize the FCC. One of its stipulations is to make this Inspector General independent of the agency.
While the Republicans are firm in their convictions, others believe that this situation simply repeats a tactic that they’ve used since the days of Ken Starr and Whitewater, and most recently after the killing of the US Ambassador in Benghazi Libya: conduct endless hearings to create the appearance of a criminal situation where none actually exists.
Perhaps a better tactic would be to do a little research about the legislators initiating these hearings, to see where their campaign donations come from.
The FCC goes to the movies
I’m reminded of two movie references, the obvious one being The Empire Strikes Back. Just before the the FCC’s vote, Republican FCC Commissioner Ajit Pai even quoted Emperor Palpatine, saying “Young fool… Only now, at the end, do you understand,” imagining that someday, people would look back wistfully upon the decision with regret that they didn’t stop it when they could.
But perhaps more aligned with America’s political climate, there’s also that charming character from the last scene of Pixar’s The Incredibles.
Apple announced a new MacBook computer this week, during a press event that also provided the release date and pricing details for the upcoming Apple Watch. Everyone seemed to agree that the MacBook is a beautiful thing.
But why this machine?
I wish I could be more delicate, but the MacBook impresses me as being a totally unnecessary product. It might be a good ‘casual user’ machine: sufficient for accessing the Web, watching (cat) videos and for short emails perhaps? But so is the iPad. It might be a good “Office” machine: good for making presentations, writing, working on budgets. But so is the MacBook Air, which is less expensive and much more powerful. Instead, Apple seems to have aimed it at the less expensive Chromebook Pixel.
This was a major lost opportunity for Apple. It could have been the one form-factor that Apple is missing – the one that would have addressed the three things that the Microsoft Surface has over the iPad. The MacBook could have had a full computer operating system (as opposed to iOS), the ability to remove the keyboard portion so it could function as a tablet, and a port for file transfer and peripherals. These could have made the MacBook an instant hit. Instead, it has a mobile processor and people are already complaining about the keyboard.
I also immediately imagined a folder-like leather cover that would go behind the screen portion and under the keyboard portion. With the screen removed, the part of the cover that went behind the screen would simply fold down over the keyboard to protect it.
My first impression of the Apple Watch is that its not something that was designed for the ages. Luxury watches are designed as heirlooms and have century-long life expectancies, not 18-months.
Apple could still pull off a coup for $10,000-to-$17,000 Apple Watch Edition buyers if its Applecare extended warranty were to consist of replacing the electronics every couple of years. That would also reinforce the notion of Apple as a luxury brand. Or, instead of doing it under Applecare, just do it for free. The electronics probably cost less than $100 under mass production – the BOM (bill of materials) cost is probably much lower than a smartphone. iPhone 5S’ BOM was $199. It would be a pretty small percentage of the price.
But are they jewelry?
If Apple intended the new MacBook to be “jewelry,” it’s too big for a lady to carry in her pocketbook. And as for the Apple Watch. I imagine that it will sell, but not in Version 1.0. Too big. One of the appeals of the FitBit is its size and light weight. Once Apple manages to skinny down the electronics, then yes maybe.
Today’s Net Neutrality declaration by the FCC is unquestionably the most important telecommunications policy decision thus far in the 21st century. In recent weeks, it had become increasingly clear that this would be the FCC’s direction.
There had been doubts, given FCC Chairman Tom Wheeler’s previous associations in the telecommunications industry. From 1976 to 1984, he was President of the NCTA and from 1992 to 2004, he was President & CEO of the CTIA, which lobby for the cable and cellular industries, respectively. Both groups oppose Net Neutrality today.
In addition to the Chairman, the FCC is governed by four other Commissioners. The FCC’s majority reflects the political party of the President, so therefore, Mr Wheeler and Commissioners Mignon Clyburn and Jessica Rosenworcel are Democrats. They voted ‘Aye.’ Commissioners Ajit Pai and Michael O’Rielly are Republicans, and voted ‘No.’
Chairman Wheeler summarized the ruling in his statement
“We asked the public to weigh in, and they responded like never before. We heard from startups and world-leading tech companies. We heard from ISPs, large and small. We heard from public-interest groups and public-policy think tanks. We heard from Members of Congress, and, yes, the President. Most important, we heard from nearly 4 million Americans who overwhelmingly spoke up in favor of preserving a free and open Internet.
“Building on (a) strong legal foundation, the Open Internet Order will:
- Ban Paid Prioritization: “Fast lanes” will not divide the Internet into “haves” and “have-nots.”
- Ban Blocking: Consumers must get what they pay for – unfettered access to any lawful content on the Internet.
- Ban Throttling: Degrading access to legal content and services can have the same effect as blocking and will not be permitted.
“These enforceable, bright-line rules assure the rights of Internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission.
“The Order also includes a general conduct rule that can be used to stop new and novel threats to the Internet.”
What the opposing Commissioners had to say
Those who watched the FCC proceedings online, as I did, were given a real treat. After Mr Wheeler’s opening statement, the Commissioners took turns to make statements of their own. Given today’s antagonistic political environment, the primary role of the two opposing Commissioners was to misrepresent the outcome and use scare tactic positioning as they expressed their disagreement with the decision. I must admit that they are very good at what they do.
For example, Commissioner Pai made several points in his statement:
- (Paraphrasing) “The Internet will be taxed.” And he went on to talk about the Universal Service fee *** on your phone bill, and how a new line item will show up on phone bills for the Internet. In reality, “the Order DOES NOT require broadband providers to contribute to the Universal Service Fund under Section 254. The Order will not impose, suggest or authorize any new taxes or fees – there will be no automatic Universal Service fees applied and the congressional moratorium on Internet taxation applies to broadband.”
- “The Internet will be slower and prices will be higher.” Large carriers attempt to justify their claim about slower speeds by saying that Net Neutrality would be a disincentive for them to invest in their networks. So AT&T or Verizon would actually give Comcast or a future DISH Network wireless broadband service an opening to take market share away from them?
- “Nothing in this order will promote competition… If you liked Ma Bell monopoly in the 20th century, you’ll love this in the 21st.” Actually, today’s ruling is very clear (see above) that there will be no preferential treatment for access or interconnection. Creating a level playing field that anyone can enter; a sound foundation for competition.
*** It should be noted that the Universal Service fee helped give telephony to rural areas in the 1930s, and in a very real sense, helped incubate IPTV among rural operators a decade ago.
Commissioner Pai used words like “takeover,” “sham proposal,” and “special interests” to position the Net Neutrality decision exactly inside-out from what it really is. He also claimed that the government didn’t create the Internet, hoping that listeners may have forgotten that the Internet was ‘invented’ by DARPA (the Advanced Research Projects Agency within the US Department of Defense, a government agency), and a community of government-funded academic institutions.
The other opposing Commissioner, Mr. O’Reilly, also pulled no punches, calling the Net Neutrality decision an “unlawful power grab.” Then Mr O’Reilly went on about how Title II is all about price regulation and taxation. So the truth comes out: taxation is bad. Net Neutrality should be opposed because it is a new tax, and that “this is back door rate setting authority.” Despite explicit statements in the ruling that it is not.
But read the FCC’s order, read the statements of each of the FCC Commissioners, and then decide for yourself.
Fear ruled the weeks leading to this decision
These comments by the minority Commissioners simply reflected the meme that had been running unchecked in the wild.
In the days and weeks leading up to this FCC decision, the opposition played on anti-Obama sentiments with ridiculous propositions like “Barack Obama is shutting down the Internet,” and insulting statements that Tom Wheeler is “simply Obamas’s (colorful language for the word ‘tool’) on this.” US Senator Ted Cruz (R-Texas) insisted “Net Neutrality is Obamacare for the Internet.”
One commenter went so far as to say that (I’m paraphrasing and can’t remember the source) ‘..only four million people submitted comments to the FCC, out of more than 300 million Americans,’ implying that the 4 million were meaningless.
What the Net Neutrality decision really means
Today’s ruling put an end to the notion that “open access” to the Internet was to be a function of lesser or greater means. It’s that simple.
I have no doubt that some of my friends and colleagues stand as opposed to Net Neutrality as I stand in favor. Everyone is entitled to their opinion. But as opposing parties begin to notice that Net Neutrality has opened market opportunities to them that otherwise would not have been available, they will thank the FCC.
The other FCC decision on this day
The Net Neutrality discussion overshadowed another important ruling that was announced the same day: that the FCC granted petitions from two community broadband providers in North Carolina and Tennessee, to expand broadband services into neighboring unserved and underserved communities. The opposition was from incumbent service providers.
During baseball’s off-season, only the true baseball fanatics and baseball insiders watch what’s going on with the sport. Otherwise, most people limit their attention to the players being signed by their local teams or perhaps players that their rival teams are signing, but mostly are just waiting for the regular season or spring training to begin.
So an article last week in Forbes flew a bit under my radar. During the regular baseball season, consumers are blocked from watching local games online. But a possible deal between Fox Sports and Major League Baseball Advanced Media (MLBAM) might alleviate this situation and make local MLB games available online to about 40% of local markets, where games are broadcast on regional sports networks owned by Fox and carried on pay TV. Access by consumers would still be closely controlled: Fox would require ‘TV Everywhere’ authentication through local pay TV operators before granting access to the programming.
Access to live programming from the TV networks over the Internet is already gated. For example, if I want to watch a live feed from my local ABC affiliate, I am asked for my location and then told that my local feed is (or is not) available, based upon the streaming arrangements in local markets. (And of course because of the Aereo decision, there is no such thing as a local online aggregator, which is why DISH’s new Sling TV doesn’t include local).
Tying user authentication to pay TV operators could also give Fox greater leverage in negotiating carriage deals with those operators. For example, “Dear (local pay TV operator), we demand a higher retransmission fee (per-subscriber-per-month) this year, and we’ll yank our programming not only from TV, but also shut down your subscribers’ access to the authenticated streams if you don’t accept our terms.”
This has already happened with Fox in other cases.