All you need to know about T-Mobile Binge On

Have you been wondering what is T-Mobile US doing with your video on Binge On?
Here is a small guide and analysis of the service, its technology, features and limitation.

T-Mobile announced at its Uncarrier X event on November 11 the launch of its new service Binge On. The company's CEO remarked that video is the fastest growing data service with +145% compared to 2 years ago and that consumers are increasingly watching video on mobile devices, in wireless networks and cutting the cord from their cable and satellite TV providers. Binge on was created to meet these two market trends.

I have been previewing many of the features launched with Binge on in my video monetization report and my blog posts (here and here on encryption and collaboration) over the last 4 years.


Binge On allows any new or existing subscribers with a 3GB data plan or higher to stream for free videos from a number of apps and OTT properties. Let's examine what the offer entails:

1. Subscribers with 3GB data plans and higher are automatically opted in. They can opt out at any moment and opt back in when they want. This is a simple mechanism that allows service transparency, but more importantly underpins the claim of Net Neutral service. I have pointed out for a long time that services can be managed (prioritized, throttled, barred...) as long as subscribers opt in for these. Video optimization falls squarely in that category and T-Mobile certainly heeded my advice in that area. More on this later.
2. Services streaming free in Binge on are: Crackle, DirecTV, Encore, ESPN, Fox Sports, Fox Sports GO, Go90, HBO GO, HBO NOW, Hulu, Major League Baseball, Movieplex, NBC Sports, Netflix, Showtime, Sling Box, Sling TV, Starz, T-Mobile TV, Univision Deportes, Ustream, Vessel, Vevo, VUDU.
3. You still have to register / subscribe to the individual services to be able to stream free on T-Mo network.
4. Interestingly, no Google properties (YouTube) or Facebook included yet. Discussions are apparently ongoing.
5. These OTT video services maintain their encryption, so the content and consumer interactions are safe. 
6. There were mentions of a mysterious "T-Mobile proprietary streaming technology and video optimization" that requires video service providers to integrate with T-Mobile. This is not transcoding and relies on adaptive bit rate optimization, ranging from throttling data to transrating, to manifest manipulation (ask video providers to enable un-encrypted manifest so that it can be edited and limited to 480p definition).
7. Yep, video is limited at 480p definition, which T-Mobile defines as DVD quality. It's going to look good on a smartphone, ok on a tablet and bad on anything bigger / tethered.
8. I have issue with the representation "We've optimized streaming so that you can watch 3x more video" because mostly it's: 



File size per hour of streamed video per definition

1. Inaccurate (if this is unlimited, how can unlimited be 3x what you are currently watching?); 
2. Inexact (if they are referring to the fact that a 480p file could in average be 1/3 of the size of a 1080p file, which is close enough), they are assuming wrongly that you are only watching HD 1080p video, while most of these providers rely on adaptive bit rate, therefore varying the video definition based on the networks' conditions.
3. Wrong since most people assume watching 3X more video means spending 3X the amount of time watching video, rather than 3X the file size.
4. Of bad faith, since T-Mobile limited video definition so that users wouldn't kill its network. Some product manager / marketing drone decided to turn this limitation into a feature...
9. Now in the fine prints, on the rest of the video you watch that are not part of the package, expect that "Once high-speed data allotment is reached, all usage slowed to up to 2G speeds until end of bill cycle." 2G speed? for streaming video?  like watching animated GIF? That's understandable, though, there has to be an carrot (and a stick) for providers who have not joined yet, as well as some fair usage rules for subscriber breaching their data plans - but 2G speed? come on, might as well stop the stream rather than pretend that you can stream anything on 128 kbps.
10. More difficult to justify is the mention "service might be slowed, suspended, terminated, or restricted for misuse, abnormal use, interference with our network or ability to provide quality service to other users". So basically, there is no service level agreement for minimum quality of service. Ideally, if a video service is limited to 480p (when you are paying Netflix, etc. for 1080p or even 4K, let's remember), one should expect either guaranteed level or a minimum quality floor?
11. Another vague and spurious rule is "Customers who use an extremely high amount of data in a bill cycle will have their data usage de-prioritized compared to other customers for that bill cycle at locations and times when competing network demands occur, resulting in relatively slower speeds. " This is not only vague and subjective, it will vary over time depending on location (with a 145% growth in 2 years, an abnormal video user today will be average tomorrow). More importantly, it goes against some of the net neutrality rules. 

T-Mobile innovates again with a truly new approach to video services. Unlike Google's project Fi, it is a bold strategy, relying on video optimization to provide a quality ceiling, integration with OTT content providers to enable the limitation but more importantly an endorsement of the service. It is likely that the service will be popular in terms of adoption and usage, it will be interesting to see, as its user base grows how user experience will evolve over time. At least, there is now a fixed ceiling for video, which will allow for network capacity planning, removing variability. What is the most remarkable in the launch, from my perspective is the desire to innovate and to take risks by launching a new service, even if there are some limitations (video definition, providers...) and risks (net neutrality).

Want to know more about how to launch a service like Binge on? What technology, vendors, price models...? You can find more in my video monetization reports and workshop.

Strategies for multiscreen monetization

Pay TV and OTT providers are increasingly difficult to tell apart. Both are engaged in a battle to capture retain our interest. Many multiscreen strategies are being enacted on both sides to secure this $400 billion market.

Cord cutting, cord shaving are becoming familiar risks for MSOs as viewers’ habits change from scheduled to on demand and from linear to binge watching .

MSOs are hesitating between becoming OTT, partnering with them or embracing multiscreen, while OTT are experimenting with new charging models and are trying to secure exclusive rights for original programming.

These strategies and more are being analyzed in my latest white paper, co-written with Booxmedia.

As large OTT providers are helping consumer-viewing habits evolve, there are great opportunities for MSOs and content providers to offer OTT and multiscreen services that will strengthen their brand, expand their reach and grow their customer base.

Cloud TV everywhere emerges as one of the most successful strategies to date for customer acquisition, retention and monetization.  Robust recommendation, content discovery and ad management are keys for monetization of multiscreen.

Q2 multiscreen video news

I use a service to curate and collate my news. Reading through the last few months, I realized that there are so many subjects worthy of comment that a single post wouldn't begin to address them meaningfully. I reserve in-depth analysis of specific trend or topic for my paying clients, so I decided to review and comment on press clippings and announcements as they become available as a way to illustrate the trends, threats and opportunities surrounding our market.

Here is what caught my attention in the last quarter:

Technology: Is 4K the new 3D?

April of course is synonymous with NAB frenzy. Sifting through the trough of announcements at the show, I have noticed a sharp change of direction in vendor’s announcements and claims from last year. When 2013 was all about HEVC H.265, this year seems to be about 4K. While HEVC licensing terms have been agreed and announced by MPEGLA in February, Google’s royalty-free VP9 has captured some support as well, forcing chipset and platform vendors to contemplate fragmentation and multi codec support. Obviously, the battle for codec and protocol will determine who controls the management and delivery of 4K content going forward. In this race, not surprisingly, YouTube is siding with its parent company with VP9 support, while Netflix is adopting H.265. Both companies agree though, and are adamant, that 4K is a lot easier to manage and deliver for OTT properties than for traditional broadcasting payTV providers. Netflix forecasts mass market for 4K to be five years out at the current rate of TV replacements. My opinion is that 4K adoption will suffer from H265/VP9 fragmentation. We will probably see further delays because of the cost of implementing dual protocol stack throughout the delivery chain.

Technology: Cloud, SDN, NFV

At NAB as well, vendors were eager to show off their new acronyms, touting dreams of cloud-based virtualized, self-managed, software-defined networks that would… In reality, most MSOs are still focusing on rolling out HD, improving and automatizing workflows and overall costs reduction. I think we still have 5 years to go before seeing practical, mature implementation of SDN in professional video. Anything else is a science experiment or a proprietary implementation at this point.

Business: MSO to OTT

One of the big news was the announcement from AT&T regarding their intent to invest, jointly with the Chernin Group up to $500million to create SVOD and advertising based web streaming services. Umm... Is it too much or not enough? $500 million goes a long way if you want to build a web streaming service, but it does not seem nearly enough if you want to build an attractive content offering.

HBO, the next day was reported to have signed a multi-year agreement with Amazon. The deal should see some of HBO’s back catalogue series made available to Amazon Prime subscribers. Little by little, HBO nudges the boundaries. You will remember that it signed a deal with Comcast last year to offer HBO Go to Comcast broadband subscribers, without a cable subscription. All signs point that HBO could be a major league OTT provider when they will be ready to cross over.

Business: OTT to Wireless

Almost coincidentally, rumours emerged that Netflix was in discussions with the Vodafone Group to distribute Netflix services on some Vodafone subscriptions. It is likely that these deals will increase in frequency. LTE /4G will see opportunities for cord-never and cord-shavers to access their favourite service and content on cellular networks. That is… if they figure out the charging model (paying 8$ a month for Netflix and $150 in data overage charge to Vodafone wouldn't really work).

Business: OTT to MSO

Netflix has integrated its offering on Atlantic Broadband, Grande Communication and RCN Telecom services set-top boxes, a first in the US after having piloted the concept in Europe. Subscribers will be able to select the service from their PayTV provider. It is an interesting strategy for small MSOs to bundle Netflix in hybrid Set top boxes. It increases reach, provides an attractive offering and good differentiation against market leaders.

Business: M&A

Kaltura bought TVinci to expand its SVOD offering to live and linear programming. Arris bought SeaWell Networks for its advertising insertion and packaging at the edge technology. SeaWell Networks’ strong adaptive bit rate streaming skill set will be invaluable to expand the company’s multiscreen strategy.

That’s all folks for this quarter! I will keep all the good net neutrality commentary for next month, hopefully when the smoke dissipates from the PR battlefield.

Cisco VNI global IP 2014: we live in a video world

As is now usual, after the february mobile Visual Networking Index, Cisco releases in June the global IP version. Here are a few interesting measurements and forecasts and some associated thoughts.

Global IP traffic's growth is slowing down somewhat, having grown five fold in the last five years and anticipated to grow threefold over the next five. This is not overly surprising, a 21% CAGR is a sign of a maturing market.

CDN

Surprisingly, more than half of the traffic next year should be local (as opposed to long-haul), which underlines the growing importance of CDNs to deliver content at the edge of the network.
CDN delivered in 2013 36% of the data traffic and are set to deliver 55% by 2018, with a growth spurred by OTT video. CDNs will deliver the 67% of all video traffic from 53% today.
I think here, mobile CDNs are not represented, which is unsurprising since most of the movement in that space has happened only recently. Mobile carriers CDNs will add to these numbers.

Mobile

Cisco predicts that mobile traffic (including wifi) will exceed fixed by 2018 (61 to 39% vs. 44 to 56% in 2013). Again, not so surprising, except we could see in my opinion fixed being overcome earlier than that. Machine to machine traffic over wireless, I think, is quite systematically underestimated.

Mobile data traffic, unsurprisingly still sees a 61% CAGR and will increase eleven fold by 2018.

Video

Video traffic will account for 79% of overall IP traffic by 2018 (66% today). If we add TV and video, we are looking at 90%...

OTT video viewed on connected TVs, consoles, sticks, etc... doubled in 2013 and is set to quadruple by 2018. I believe this is also under-evaluated. I think 4k will weigh heavily on these media and h265 / vp9 will be late to assuage the burden.

All in all, no great surprise this year, a confirmation of last year's trends. I believe that 4k, together with changes in so-called "net neutrality" provisions will accelerate most trends by 1 to 2 years.

PayTV vs. OTT part VII: 6 OTT Strategies

Pay TV vs. OTT:

Part I: The business models
Part II: Managed devices and services vs. OTT
Part III: CE vendors and companion screens
Part IV: Clash of the titans

Part V: Appointment vs. on-demand

Part VI: 5 MSO strategies

More developments will be presented at Monetizing OTT services - London - March 24/26

enter the discount code OTT_CORE here for a 20% discount

The internet is a perfect medium for content distribution. Storage, access, distribution is inexpensive, allowing the smallest content owners and producers to offer their wares with a small starting investment. For OTT vendors, this is both an opportunity and a threat. The long tail of the content usually find its audience through social media. Specialty content is at home on  the internet, thanks to the advances made in term of search and recommendation engine. The short tail content is pushed by advertising, rather than social interaction. The type of budget necessary to launch a new content can be staggering, as illustrated in the advertisement campaigns preceding new movies and video games. Content is king in OTT and there are a few strategies put in place by the different players in this segment to secure customers and revenue.

1.     Pay-per-view, rental, on-demand

Apple’s iTunes and Amazon on demand are perfect examples of OTT services. Without subscription, any consumer with a credit card can rent and stream content to almost any screen in minutes. Revenues are generated from the transaction. They are collected by the OTT player, which then apportion it to the studio / content owner and so on. It is the literal translation of the pay TV model on the internet. Here again, the control resides in the distribution. Apple and Amazon have been successful because they have an existing customer base that they had been able to convert. This captive audience is the equivalent of the MSO’s set top box.

Brands with a smaller footprint in term of device penetration have struggled to emulate this strategy. Sony’s “Video Unlimited”, available on its PlayStation and selected devices, has struggled to reach its audience, for instance.

2.    Subscription VOD

Inaugurated by Netflix, it has become the reference for OTT video. A monthly subscription allows consumers to watch as many shows as they want. Success in this model relies in both the depth and the range of the catalogue. Netflix had to have headline content to attract new users and enough of a long tail to keep them there. Most SVOD strategies are monthly subscription without commitment, so they traditionally experience high churn.

3.    Free to air

YouTube is the most successful OTT player with a free-to-air strategy. Acquired by Google in 2006, the web phenomenon attracts over one billion unique users each month ^[2]. Monetization of this strategy has been slow. Advertising is currently the main contributor, using Google ad platform, but YouTube has recently launched premium channels, allowing any channel with over 100,000 followers to go premium for as little at .99c per month. It is not yet apparent whether that strategy will be successful.

Adult content is the second largest OTT player in this category, monetizing premium content through subscription. A small percentage of their viewership base subscribes to premium and generates close to 4.9 billion dollars revenue globally.

4.    Securing content

If content is king, content rights are the crown’s jewel. Securing content that will attract and retain consumers is the principal occupation of OTT players. Studios and content producers now have new avenues for the distribution of their content, but as traditional Pay TV weakens in viewership, it still dwarfs OTT revenues. The most popular content can spur a viewership addiction synonymous with subscription and advertising revenue. It has become necessary for the likes of Netflix to secure access to content. In 2012, Netflix lost rights of diffusion of Starz, Encore and Sony catalogues over broken negotiations. Clearly, having your core value (content) submitted to third party control and threatened on a regular basis by the whims of negotiation is not a very good strategy for long term success. Increasingly, OTT players and channels have started acquiring and producing content exclusively in order to guarantee access, control and ultimately monetization of popular content.

HBO has, for instance, developed the series “Game of Throne”, which became an overnight critical and popular success, drawing fans to the network and becoming one of the most pirated series of 2012 ^[4].

Netflix has secured later a deal with Disney, valued at close to $300 million per year for Disney. This deal sees Netflix get exclusive access to Disney’s movies after their theatrical release. In 2013, Netflix doubles down and sign a follow on deal for exclusive Disney content “Agents of S.H.I.E.L.D”.

5.    Favoring binge watching

Consumers buying habit have changed durably, we have seen, but their viewing habits are also undergoing transformation. With the availability of whole back catalogue seasons of a series, binge watching has become a solid trend. Many viewers, when watching a streaming TV show are increasingly watching more than one show per seating. Detecting the trend early, Netflix strategy for the release of “House of cards” has been to release the full season at once, as opposed to a fixed schedule, favored by traditional TV. Netflix has since released a survey with Harris interactive showing that 61% of Netflix series viewers are binge watchers.

6.     Costs reduction

In the same vein as Verizon, Netflix has undertaken to control its delivery network. Unlike Verizon, it is not an acquisition but organic development that sees Netflix launch its own CDN called Open Connect in 2012. Recognizing that delivering massive amounts of video over the internet can be costly and unreliable at scale, major OTT players look at controlling the end to end user experience and leverage economy of scale from a dedicated network infrastructure. Common CDNs are perfect for general purpose internet content but their business model and quality start to be stretched to their limit when it comes to massive video delivery.

PayTV vs. OTT VI: 5 MSO strategies

5 MSO strategies

If you haven't read the other posts in this series, you can find them here for context.

Pay TV vs. OTT:
Part I: The business models
Part II: Managed devices and services vs. OTT
Part III: CE vendors and companion screens
Part IV: Clash of the titans
Part V: Appointment vs. on-demand

More developments will be presented at Monetizing OTT services - London - March 24/26

enter the discount code OTT_CORE here for a 20% discount

There are a few strategies that have been enacted by MSOs to counter the erosion of their margin and viewership brought forward by OTT.

1.     Vertical integration

As control of the value chain shifts from distribution to content, it is only natural that some MSOs start to look upstream and concentrate channels, studio and production with distribution in order to regain a dominant position in the value circle. As an example, Comcast owns NBC Universal, which owns the MLB network (in a joint venture with MLB) and the Philadelphia Flyers. In one company you find premium content, production, channel and distribution.

This strategy allows to control the content, with either exclusive or preferential rights for distribution, which enables a captive audience and in return higher advertising revenues, as long as the content remains popular.

2.    Multiscreen

This strategy allows MSOs to offer a portion of the live and on-demand TV programming available to mobile devices (smartphones, Tablets, Phablets…) and hybrid devices (hybrid set top boxes, video game consoles, PCs,  smart TVs…). In this context, while the medium of delivery is still the internet, it is not a true OTT play. To access the content, the user must authenticate herself as a MSO subscriber. This strategy enables MSOs to “spill out” of the traditional TV screen and to offer programming on a growing medium that is favored by younger generations. Verizon’s FiOS is, for instance available on cable, internet, on ipad, on LG, Samsung TVs and on Xbox and Playstations. This strategy is one of retention, where, recognizing that consumers want to watch in a more flexible manner, it is made available on a variety of new devices, included in the regular subscription. This is about keeping people loyal to the MSO programming, countering pure OTT by offering an OTT-like experience. The strategy has not proven to increase revenue, as it is usually included in the regular subscription. It is used to reduce churn and increase loyalty.

3.    Social TV

As Facebook, Twitter, LinkedIn and other social media become part of our daily life, new usage patterns have emerged. Social TV is such a trend, where content success relies on recommendations, likes and sponsoring.

Popular content can, in days become viral and amass millions of views. Psy, a South Korean rapper became an overnight internet celebrity, with over a billion views in six months on its YouTube channel with the release of “Gangnam style”. The virality effect is hard to predict or influence, but live TV, particularly sports and game shows are well suited for audience social interaction. By creating interactivity, content becomes simultaneously more popular and more “sticky”, as consumers watch more and longer shows when there is an emotional connection. MSOs have started to try and integrate apps for social networks in their managed devices in order to reinforce this engagement with users. The lack of standards across platforms has hindered this integration to date and Social TV remains more an experiment than a service at this stage. The strategy relies on the assumption that engagement drives viewership, which drives revenue.

4.    Going OTT

If you can’t beat them, join them. There are a couple of sub strategies here. The first one is to create a web site to serve content exclusively over the internet. For instance, Hulu plus, the joint venture between Comcast (NBC Universal), Disney and News corp. (Fox) allows its customers to watch ad-sponsored current and back catalogue TV show for a monthly subscription.

A second strategy is to package a channel as an internet content provider. For instance, it was announced in October 2013 that Comcast is launching a new plan for cord-cutters and cord-nevers, offering Xfinity Streampix, HBO and HBO Go together with broadband for $39.99. A US Comcast customer will be able to watch HBO over the web on their broadband subscription without having to be a cable customer. The FCC (US regulators) mandates that premium channels have to be bundled with basic broadcast, so that's in it as well, but this is a clear tipping point moment. For the first time HBO is going head to head with Netflix, going pure OTT. The implications are profound and it is a floodgate moment. On one hand, Netflix has now more subscribers than HBO, which prompts Comcast to start the self cannibalization. If you are losing subscribers, you might as well lose them to yourself and a friendly content provider rather than a competitor.

Verizon’s Redbox instant is another example of a Netflix me-too strategy relying on monthly subscription.

5.    Cost reduction

The last strategy implemented lately has been about creating the infrastructure necessary to deliver a massive amount of video, securely with high quality. While MSOs have traditionally relied on third party infrastructure, Verizon has recently innovated with the acquisition of EdgeCast in January 2014. By purchasing the CDN, the MSO will be able to reduce its delivery costs, while controlling user experience and offering wholesale service to other MSOs and OTT alike.

Monetising OTT: PayTV vs. OTT Business Models and strategies

I will be chairing Telecoms IQ' "Monetising OTT" show in London on March 24-26.

As a reader of this blog, you can avail of an exclusive discount if you wish to attend, exhibit or sponsor the event.

Just enter the discount code OTT_CORE here or mention it if you contact the organizers.

Agenda includes speakers from Orange group, Telefonica, deutsche Telekom, Sky, Telenor and others.

Telecoms IQ in association with Core Analysis brings you a new complimentary report on how OTT is changing the value chain and revenue opportunities across multiple industries.

The report examines the business models of the traditional TV and emerging OTT ecosystems, as well as looking at emerging strategies for capturing and retaining consumers.

View the Full Report. 

I want my... I want my HBO part II

Our second story this week is local. Canada's regulator, the CRTC (Canadian Radio-television Telecommunications Commission), has started consultations to un-bundle TV channels for cable and satellite payTV. In essence, the regulator asserts that TV bundling of channels might be consumer-adverse and that forcing someone to pay for basic cable/satellite + digital channels + movie package + HD + HBO in order to watch Game of Throne is not in the consumer's best interest.
Already both sides of the discussion are engaging in strong arguments. On one hand, it is true that bundling has allowed consumers to discover new content that might not have been their initial choice when selecting their channel line up. In many cases, you are drawn to a new show or a new series by a combination of peer recommendation, preview / advertisement and pure chance. If you did not select the channel to start with, you are removing a large part of the discovery opportunity and I do not see how that can benefit the consumer , the programmer or the announcer. There are already rumors that some US channels could just pull out of Canadian airwaves rather than bend to Canadian pick-and-choose TV which could set a precedent in the US.
On the other hand, TV bundling and prices have gotten out of hand in Canada. It is not unusual to pay over 100$ per month for TV programming which is a high price if, when all is said and done, you watch in average maybe 15 channels in your fixed rotation. Unbundling could certainly cut dramatically in cost to the consumer if they are allowed to select their channel individually rather than in bundles. That's if the MSOs practice a fair price, which is a big if in Canada. Coopetition has been the operating model rather than aggressive competition and prices for unbundled channels could end up being more expensive than bundled, which would end up damaging the consumer's wallet, angering the US right holders and precipitate OTT exodus.

I am in favor of unbundling, but it has to be done in a very careful fashion. It can be beneficial to the consumer only if:

• It leads to more choice rather than less (US channels need to stay)
• It is easy to add and remove channels, with no subscription longer than month to month and no penalty.
• Individual channel selection is not sub-bundled (you have to subscribe to channel x in order to pay extra for channel xHD). I should be able to select only HD channels if I want and not have to carry both SD and HD. It is ok to pay more for HD than SD.
• Catch up TV, time shifted and a la carte one demand offering could be bundled with individual channels (for instance, AMC SD 1$, HD 1.5$ with on demand 3$...).
• It is ok to have public programming as a bundle part of the basic subscription package.

In this manner, the successful channels will reap the bulk of the consumer money, but special interest channels will still reach their audience. Channels that have no audience will not be artificially sustained by bundled package. Channels will be able to compete on a series by series, show by show, encouraging original programming and exclusive rights, allowing true competition for premium content.

These two stories illustrate perfectly the risks and opportunities of OTT vs payTV. The business models are not settled yet, major players are announcing new moves every week. It is an exciting time to work in this industry.

I want my... I want my HBO

Two pieces of news caught my eye over the last week that spell in my mind both a vindication and a perfect example of the seismic changes being experienced in OTT and payTV landscapes in North America.

The first story is in the US. As I was mucking around provisioning my new car's hard drive with my eclectic music collection earlier this week, my son stumbled upon an old time favorite and I was elated to witness his discovery of Dire Straits' "Money for Nothing". As we were happily singing I want my.... I want my MTV, I was reminded of a post I wrote two years ago, musing about when HBO would be able to go direct to customer in North America.

It seems my question was answered this week, with Comcast launching a new plan for cord-cutters and cord-nevers, offering Xfinity Streampix, HBO and HBO Go together with broadband for $39.99. A US Comcast customer will be able to watch HBO over the web on their broadband subscription without having to be a cable customer. The FCC (US regulators) mandates that premium channels have to be bundled with basic broadcast, so that's in it as well, but this is a clear tipping point moment. For the first time HBO is going head to head with Netflix, going pure OTT. As I am moving to my new house next month, This had me rethink my TV strategy and I am certainly going to wait and see what trickle downs in Canada. Increasingly, I am thinking of upping my broadband subscription and shaving as much as I can if not cutting outright my Cable / Satellite subscription.

The implications are profound and it is a floodgate moment. On one hand, Netflix has now more subscribers than HBO, which prompts Comcast to start the self cannibalization. If you are loosing subscribers, you might as well loose them to yourself and a friendly content provider rather than a competitor. 
You will read about the second story tomorrow.

Pay TV vs. OTT part V: appointment vs. on-demand

The recent emergence of LTE broadcast and eMBMS has prompted many companies to bet much R&D and marketing dollar on the resurgence of the mobile TV model. 

I have trouble believing that many mobile users will be tuning-in "en masse" at regular appointment to watch their favorite show on a mobile device. 

There is nothing wrong with Pay TV, its audience is stable-ish and while most would see OTT services compete for these eyeballs, I see them as a more complementary play. Pay TV is here to stay and I do not see cord cutting as a credible threat in the short term, more cord shaving or cord picking.

Many have been developing and promoting mobile TV models in the past either through broadcast or unicast technologies. The long defunct services from Qualcomm (MediaFLO) and DVB-H should serve as cautionary tales to those who are betting on the next generation of broadcast services. 

Many fail to understand that mobile TV is not attractive to most people in many circumstances. If you are like me, you will watch TV programs, by order of convenience:

1. When I want, at home, on my PVR (so I can skip the ads)
2. Live, at home, when it is time sensitive content ( news, sport event, ceremony...)
3. At a bar, live, when I want to watch sport live with friends or strangers
4. On a tablet at home (wifi) when I want to watch something else/more than the main screen
5. On a tablet at hotel /airport (wifi) ...etc... when I want to watch premium content catch up
6. On a phone / tablet (cellular) if there is no other choice

Don't get me wrong I watch a good amount of video on mobile, just not TV programs. I remember living in Switzerland some 10 years ago and having one of the first video phones

that would perform video calls and stream mobile TV. Past the novelty aspect, no one was watching TV on their phone then, and it wasn't due to network capacity or video quality. Having a video phone then was seriously cool but that did not take away the fact that the TV content I wanted to watch was not available when I wanted to watch it. My Sonyericsson K600 (remember?) joined my first Smartphone (Philips Ilium, I designed it at Philips) and my first MMS phone (ericsson T68i) in my private museum together with my first PDA (I sent the world's first picture message on a CDMA iPAQ in 2002). 

This is mostly due to the fact that TV is an appointment experience. I like to be comfortable watching TV because I watch only very specific programs. When I sit down to watch TV, I mostly know beforehand what I will watch. The videos I watch on mobile are not necessarily only short form content but I don't mind being interrupted as much because in my mind, it is mostly light entertainment that does not require concentration nor continuity. It is also mostly serendipitous in nature, I do not necessarily plan what I will watch in advance. 
I know that my children and their elder's behavior is similar. They might watch more long form content on their mobile than me but they are mostly not watching TV content. 

While some see broadcast as a means to considerably reduce video load on mobile networks, I think they are missing the point. TV by appointment is a very small portion of the preferred usage, for very specific content, in very specific circumstances. Broadcast TV on mobile makes very little sense apart from niche usage (stadiums,...). 

I don't think that because LTE offers  better network capacity, higher speeds, better quality pictures it will make a better mobile TV service. Don't think for a second that subscribers will pay more than a couple of bucks per month (if anything) to have a TV experience on mobile. People pay for quality, relevance and immediacy on mobile, not the best attributes for broadcast. So before you think about "monetizing" my mobile TV experience, think hard because I won't pay for TV broadcast on mobile.

If you haven't read the other posts in this series, you can find them here for context.
Pay TV vs. OTT:
Part I: The business models
Part II: Managed devices and services vs. OTT
Part III: CE vendors and companion screens
Part IV: Clash of the titans

IBC roundup: product launches and announcements

As IBC 2012 is about to finish, here is a select list of announcements from vendors in the video encoding space, for those who have not been able to attend or follow al the news.

As you can see, there has been a strong launch platform by all main players, releasing new products, solutions and enhancements. The trend this year was about making multiscreen an economic reality (with lots of features around cost savings, manageability, scalability...), new codec HEVC and 4K TV as well as subjects I have recently brought forward such as edge based packaging and advertising making interesting inroads.


ATEME
ATEME launches new contribution encoder at IBC

Cisco
Cisco's ‘Videoscape Distribution Suite' Revolutionizes Video Content Delivery to Multiple Screens - The Network: Cisco's Technology News Site

Concurrent
Concurrent Showcases Multiscreen Media Intelligence platform at IBC 2012

Elemental Technologies
Elemental Demonstrates Next-Generation Media Processing at IBC Based on Amazon Web Services

Envivio
Envivio Introduces New On-Demand Transcoder That Significantly Enhances Efficiency and Video Quality
Envivio Enables TV Anytime on Any Screen with Enhancements to Halo Network Media Processor

Harmonic
Harmonic and Nagra Team to Power the World’s First Commercial MPEG-DASH OTT Multiscreen Service

RGBNetworks
RGB Networks Offers Complete Solution for Delivery of On-Demand TV Everywhere Services
RGB Networks Expands Multiscreen Delivery and Monetization Solution

SeaWell Networks
SeaWell Networks Announces First MPEG DASH-based Live and On Demand Video Ad-Insertion Solution at IBC 2012


Telestream

Telestream Takes Giant Leap Forward in Video Transcoding Speed and Quality

Verizon / Redbox: from OTT to IYF, Netflix

I had predicted here  and here that we would soon see OTT offers from traditional MSOs.
Redbox, the DVD and games rental kiosk company with over 28,000 locations had announced, a year ago, that they would be looking for a or several streaming partners.

The search is now over, as Redbox and Verizon partner to deliver movie and TV shows on demand streaming services. Redbox provides the content and rights, while Verizon provides the infrastructure and transport. A neat arrangement, that could put Verizon as a major OTT content distributor in the future.

The OTT part, of course is that the service will be accessible to anyone, Verizon subscriber or not, on multi platforms (smartphones, tablets, PCs, Consoles, connected devices...). Verizon will leverage its VCast and its mobile CDN infrastructure and negotiated rights.

It will be interesting to see how Redbox service complements or competes against VCast and similar offering from Amazon, Hulu +... Of course the fight will really be on with the next Google TV and Apple TV incarnations. In the meantime, Verizon steps boldly in OTT - In Your Face, Netflix

Intel and Samsung partner for open OS in smartphones and connected devices

As you will remember, Intel had decided to leave the connected TV space to ARM back in October, after failing repetitively to gain any significant market share.Its Atom chips failed to convince and deliver a significantly better cost performance ratio to their prospective OEM and ODM.


Samsung told Informa telecoms that they are planning to merge their homegrown operating system BADA with Intel's opensource Tizen. The move will be gradual and will first affect handsets, with low end devices staying on BADA for a while and high end smartphones and tablets moving to Tizen as early as Q2 2012.


Smart TVs should follow shortly there after. 


An interesting move, that allows Samsung to free themselves from the cumbersome Google-Android relationship and to stay clear of the current patent war between OS / app / device vendors.
At the same time, it allows Intel to take a prominent place in one of the fastest growing segments in consumer electronics, connected devices, as we have seen here.

Carrier strategy against OTT: vertical integration

In an interesting new development, Bell and Rogers, respectively 29 and 36% market share of the Canadian wireless market and fierce domestic competitors, join forces to acquire a majority share (75%) in Maple Leaf Sports and Entertainments (MLSE) for $1.32Bn.


Bell had already started vertical integration by acquiring the remaining 85% of CTV for $1.3 Bn last year and owns also  TSN, TSN2 and NHL Network Canada as well as a minority share of NHL's Montreal Canadien. Rogers owns the Toronto Blue jay baseball team and the broadcast network Sportsnet.


MLSE provides Bell and Rogers with co-ownership of Toronto Maple Leaf NHL team, Toronto Raptor NBA team, Toronto FC MLS team and the Air Canada center.


This is a very good example of vertical integration. The Canadian market is fairly mature, but with a high broadband penetration and a relatively low mobile broadband penetration (75%), growth is coming from smartphone and media consumption. Rogers, with 44% smartphone market share and a blended ARPU of 60$ and Bell with 26% market share and 53$ ARPU are among the most profitable carriers in North America.


At the same time, as competition increases with wireless new entrants (Videotron, Wind, ...) and OTT offers (BBC iPlayer, Netflix...), Rogers and Bell understand that the key to profitability is content. Buying these sport teams is a way for Bell and Rogers to secure premium attractive content for their domestic market, retaining control (duopoly?) of the most sought after premium content franchises in Canada.

OTT wave hits Canada: BBC iPlayer launches

BBC iPlayer is a popular VOD platform from UK's BBC. It is based on subscription and features long form original and archive TV and radio content. iPAD users can download the free app from the app store and browse limited free content or have access to over 1,500 hours of content on day one with an additional 100 hours every month, updated regularly for $8.99 a month.

Canada is the 16th country invaded by the  iPlayer but the first one where Netflix is present. It is going to be interesting to see how both giants are going to react to each other's strategy, no doubt in a rehearsal of a BBC launch in the US. While Netflix is predominantly about films, BBC iPlayer is a TV content aggregator, spanning radio and TV shows, news , concerts, documentary, comedies and more undefinable British genres like Little Britain.

While the launch is currently limited to iPAD, it should not be longh before it spans iPhones, Android, Wii, PS3 and laptop, as in other markets. BBC iPlayer global is a subset of the UK selection, and will propose only TV content at the start. The genres proposed are Contemporary drama, classic comedy, family & kids, classic &period drama, entertainment, modern comedy, Science & Nature, Sci-Fi, Music & Culture, Crime &Thriler, Lifestyle and News Specials & Documentaries.

BBC does not see itself competing against Hulu or Netflix, arguing that they are specialist, providing carefully curated content, to reflect the "voice of BBC", while other aggregators are more generalist in nature. Netflix tends to agree, citing different demographic target for their users. In September this year, BBC iPlayer served 153 million requests in the UK only, with an average 1.7 million viewer a day and a monthly viewing average of 69 minutes for TV (excl. radio). Numbers for outside the UK are not yet available. Most of iPlayer usage is during TV viewing hours, hinting at strong companion screen trends.


I think it is a strong sign, to start and see niche offers transcend their geographical boundaries to go truly OTT. BBC has found a huge following and not only with Brit expats for its acclaimed shows such as Top gear, Little Britain, etc... The walled gardens are crumbling and consumers are the winners. This tidal wave has a tremendous impact on mobile networks (capacity to accommodate video traffic surge), MSOs and PayTV (where traditional service providers need to find a way to protect VOD revenues and remain relevant), and Consumer Electronics (where CE vendors see themselves becoming content aggregators through app stores and native apps enhancing content discovery and access).

Need an IT manager for my connected home!

I am not really an early adopter. I tend to integrate new products and technologies when my needs change.
Until recently, my electronic devices were dumb and mute, just performing what I wanted to, either working or not.

In this new era of hyper connected homes though, everything becomes exponentially more complex as you add more connected devices. Since I have started my business, I had also to use cloud-based apps and services to expand my brick-and-mortar tools.
Now, with two desktops, a laptop, a tablet, two smartphones, a connected PVR, a PS3 and countless accounts and services from Dropbox, Youtube, Netflix, Google apps, Tweeter, Blogger... it does not take much to see how how these devices, interacting with all these apps and data points can quickly start conflicting with each other.
Especially when you layer that these devices communicate over LAN, Wifi, Bluetooth, RF, IR...
Add as well surveillance camera and energy management modules in the future and complex becomes complicated.

UPnP (Universal Plug and Play) and DLNA (Digital Living Network Alliance) usually do a good job of device discovery. Service and content discovery and priority setting is where it starts to get tricky.
Here are a few of the problems I had to face or am still facing in this hyper connected world.

Authentication and handover:
I use Rogers as a service provider for one of my smartphones. I use their self-help app to manage my bill, my subscription and travel packages. One of the things that is truly a problem is that it works only on a cellular network. Most of the times I need to use it is when I am travelling to add or remove a travel pack for voice, data or text. Because of the expensive roaming data rates, it does not make sense to connect while roaming just to enable a feature that saves me the roaming costs. Obviously, Rogers has not enabled Wifi - cellular authentication and credentials handover.

Authorization and software version control:
I am a Bell subscriber for TV and internet at home. I was excited when I received an email showing off Bell's new mobile TV and companion screen apps for my iPhone / iPad. I was less excited when my iPhone, on rogers network could not use Bell's content, even though I am a Bell customer. Too bad, but I thought at least I could use the PVR remote control with my iPad on Bell's network. Does not work either, because I would have to upgrade my PVR. A PVR, I am renting from Bell. You would think it would be possible for them to know what PVR I am using and therefore allow me to re flash the software to avail of new capabilities or try to up sell me to the latest new PVR and features...

Credentials management
At some point, security relents before complexity. When you want to run a secure network across several interfaces and devices, managing credentials with associated permissions becomes tricky. You have to find a way to have credentials that can easily be shared, remaining secure while managing what device has access to what dataset under which conditions.

Connectivity, content discovery  and sharing:
Inevitably, users buy new devices and add up capabilities along the way. The flip side of that coin, though is that it makes for a very heterogeneous environment. When you start having several devices with similar capabilities or overlaps, you want them to function with each other seamlessly. For instance, my old desktop running XP cannot easily join the workgroup of my new desktop and laptop running windows 7.
There are solutions, but none of them straightforward enough for a regular user. A last example is the fact that my laptop, my iPad, my iPhone, my PVR, my 2 desktops and my PS3 to some extend all act as media servers. They all have local content and they all access content from the cloud, the internet or local content stored in other devices. Again, I haven't found a solution yet that would allow me to manage and share content across devices with clear permission management. Additionally, there is no search or recommendation engine that would allow me to perform meta search across 1) my local content on several devices 2) the internet and OTT content providers and apps I am using 3) the electronic programming guide of my set top box and present me a choice like: do you want to watch boardwalk empire Sunday at 9 pm on HBO, now on HBO Go, buy the entire season on Amazon or play the episodes from my PVR or media servers.

Compatibility:
Too often, i have to transcode videos or change content format to ensure that I can see them on all my screens. This leads to multiple versions of the same content, with associated discoverability and version control issues. Another example is around contact management. It is incredible that Apple still does not get contact management right. If you enable iCloud and have your contacts synchronized with anything that is not apple (Google contacts or linked in) you end up with endless duplicates contacts with no hope to merge and delete without adding on new expensive apps.

Control and management:
It strikes me that with that many connected devices and apps, I have not found yet a single dashboard giving me visibility, control and management of all my devices, allowing me to allocate bandwidth, and permissions for sharing data and content across platforms.

I think at the end of the day, this field is still emerging and while it is possible to have a good implementation when purchasing a solution from scratch from a single vendor or service provider, assembling a solution organically as you add new devices is likely to have you spend hours deciphering DNS and DHCP configurations. I think what is needed in the short term is a gateway platform, acting as middle-ware, indexing and aggregating devices and content, providing a clear dashboard for permissions management and authorization. That gateway could be the set-top-box if it is powerful enough. It would give back to MSO the control they are loosing to OTT if they are willing to integrate and provide a cohesive environment.