Is HBO Planning a Direct Shot on Netflix in the Direct-To-Consumer Video Market?

In most things related to the online video market, Netflix gets most of the attention. It makes sense, they have 36 million U.S. subscribers, got into a high-profile spat with Verizon and Comcast, and are basically seen as the leader in the online video content space. The question has always been, when will they have a more serious competitor?

Well, HBO may be that competitor. That is, HBO could transition to a direct-to-consumer option, that, like Netflix, can be accessed without subscribing to a pay-TV service such as cable or satellite.

The speculation about such a move started with some statements made by Jeff Bewkes, the Chairman and Chief Executive of Time Warner, HBO’s parent company. He was talking about HBO Go, which is available only to those with a pay-TV subscription, and he stated that the over-the-top market was looking more and more attractive. Indeed, HBO already launched in 2012 a direct-to-consumer product (called HBO Nordic) in Denmark, Sweden, Norway and Finland.

Obviously, the U.S. market is much different, but success with HBO Nordic may spur HBO into the direct-to-consumer market in the United States. On one hand, as Jeff Bewkes noted in 2013, there are about 70 million people in the United States that subscribe to a pay-TV service but don’t also subscribe to HBO. There are only about five to 10 million “cord cutters.” So, while HBO may want to focus on the 70 million versus the 10 million, going direct-to-consumer and increasing the available library of over-the-top content may get a number of those 70 million to look more closely at HBO Go. So, stay tuned.

 

 

Broadband TV: Adding Video to Your Broadband Offer

One of the more promising and emerging applications in today’s broadband marketplace is the concept of broadband TV. The idea is somewhat of a scaled down version of a full -blown IPTV offer, where a broadband provider delivers a slim channel line up over its broadband network, typically to a Roku streaming STB. That slimmed down channel line-up is then paired with the OTT video options available on that Roku device to offer a new approach to video and entertainment for end customers.

With broadband TV, service providers are delivering their local broadcast channels (ABC, FOX, NBC, CBS, etc.), along with other local content they may be producing via broadband into the home and/or business. The model requires much of the same components as IPTV, just in a much smaller scale (and significantly less expensive manner). Retransmission consent, video encoders and some form of broadband TV middleware are necessary. But with far fewer channels to manage, the costs can be considerably less.

Several NTCA members are offering broadband TV including Canby Telcom, Waitsfield and Champlain Valley Telecom and Duo County Telecom.

There are limitations and it’s not a service for everyone. But for broadband carriers looking to offer some form of video in a less costly manner – perhaps to subscribers who can’t get IPTV, or for ‘cord cutters’ looking for other options, broadband TV may be worth exploring.

It’s a topic we will be covering at length at the upcoming BroadbandVision show. We have a case study by Duo County Telecom, as well as a session outlining the technical and operational requirements to offer it. There will be a number of exhibitors with solutions addressing the application as well. It’s worth a look.

In Case You Missed It: First Mile of Lincoln Highway Celebrated, New App Eviscerates Google Glass

One of the great things about blogging is that, unlike an FCC filing or court brief, there is no real order or script to follow and no regulations governing word counts or page limits. So, the author is free to either ramble or incorporate seemingly disparate information. More importantly, since it’s not a legal argument, the author is free to present material just because “it’s interesting.” Or, even “just because.”

Two stories making the rounds of the web this week illustrate just how much has changed in a simple century. The first, from Daily Yonder, describes the 100th anniversary of a “seedling road” in DeKalb County, Ill. Interest in building more paved roads in rural areas began in the late 1800s, but gathered momentum in the early part of the 20th century as automobiles became more common. The Lincoln Highway, originally a gravel road stretching from Times Square to San Francisco, relied initially on private funding. Federal funding was injected within the decade, and by 1926, legislation regarding federal highway funding emerged. The Daily Yonder article is a fantastic exposition of history and analysis, and illustrates the formative role of road building in nation building.

By marvelous contrast is an article in this week’s edition of Wired, which describes a device that can identify and then cut-off Google glass from a WiFi network. Given the utter creepiness of sitting near someone wearing Google glass in diner or airport, the device should be welcome (if not demanded) in public spaces everywhere.

But, those feelings might simply be indicative of what some have chalked up to the standard wariness, caution, or disdain that people have for new technology and early adopters. TechCrunch makes the case that simply not seeing the end-game or purpose of a product (the “what’s the point of that” reaction) may cause those who dismiss the device to be dismissive of the people using it.

Perhaps not immediately, but soon, for every person wearing glass as a gimmick will be someone wearing it “for real” – like firefighters who can use Google glass to view building plans when fighting blazes or initiating rescues.

So, in a brief century we have gone from packed gravel roads to wearable devices. And, beyond wearable devices, to other devices that can detect and disable them. No real lessons here – just taking advantage of a blog to share some interesting things I learned this week.

 

Study: Five Out of Every Six U.S. Households Subscribe to a Pay TV Service

Eighty-four percent of U.S. households currently subscribe to some form of pay TV service, a recent study conducted by Leichtman Research Group, Inc. (LRG) finds.

Among those households that do not currently subscribe to a pay TV service, 35% have never subscribed. Six percent intend to subscribe in the coming six months.

LRG finds that while the absolute number of subscribers has remained relatively unchanged, an increase in the number of total households has resulted in a slight decline in the overall subscription rate.

The study also finds that 22% of TV households with average annual incomes less than $50,000 are non-subscribers, compared with 13% of those with incomes above $50,000. The average household spends $89.78 monthly for their pay TV service, up 36% from 2009.

The LRG study, Cable, DBS & Telcos: Competing for Customers 2014, is based on a telephone survey of 1,260 households throughout the United States.

“The number of pay TV subscribers in the U.S. remains about as high as it has ever been, but penetration of pay TV services in consumers’ homes has declined over the past few years, as subscriber growth has leveled off, while occupied housing in the U.S. has increased,” said Bruce Leichtman, LRG president and principal analyst. “Housing growth has been exclusively among renters, who tend to be more challenging for the pay TV industry than home owners because of their comparatively lower income, younger age, and greater likelihood to move.”

Relativity and Reasonable Comparability

IMG_20140819_074008I spent a night during the last week of summer vacation wondering whether forecasted thunderstorms would force me out of a tent and into a parked car. Some might call that “roughing it,” but the camp site was actually quite civilized — there was a post with 20 amps of current about 20 feet away, potable water about 50 feet away, and a football-field length walk to a good set of showers. It wasn’t “roughing it” – it was simply “sleeping outside.”

The debate over what can be considered “camping” accepts many arguments. When I told a friend that I don’t consider my trips spent in a cabin to be true camping because I have indoor plumbing and a kitchen, he asked, “Did you have full access to ESPN?” When I said, “No,” he replied, “Then you were roughing it.”

The notion of relativity is one that pervades universal service policies. Those familiar with the issue are attune to the statutory mandate that consumers in rural and insular parts of the nation have access to services that are reasonably comparable to those available in urban areas, and at reasonably comparable rates.

“Reasonably comparable,” however, can be defined larger than a barn door. As if “comparable” by itself were not flexible enough, Congress added “reasonably” to inject some subjective oversight onto the topic.

The FCC is taking a fresh look at reasonable comparability. Read more

Is Government Smart Enough To Build A Smart Building?

I wrote a few weeks ago about “smart home” technology. Samsung announced the purchase of SmartThings, a company that makes an app that “turns your smartphone into a remote to control all of the smart devices in your home.”

The Government Service Administration (GSA) – the federal agency that functions as the acquisition and procurement agency for the federal government – is getting into the “Internet of Things” and “smart building” technology in a big way.

GSA has been experimenting with smart building technology for a few years. They have installed a network of sensors in portions of their main headquarters building. They detect, for example, how much sunlight is coming through a window and then dim or brighten light bulbs in response. They also turn off lights and heating or cooling in response to employees leaving a room. Total energy consumption throughout the network is monitored. The data from the network of sensors is collected via a software application called Integrated Building Systems.

At GSA, employees don’t have permanent work spaces; they have to register online before they come to work or at a kiosk in the lobby for a workspace. When they swipe their ID cards to enter the building, lights in their reserved work space turn on and they turn off automatically when they are no longer using the space.

Obviously, the main by-product of all of this smart building technology at the GSA building is to improve energy efficiency. However, GSA also uses an IBM-developed analytics application that uses the collected data to find faults in the building. The sensors were recently able to detect an obstruction in a cooling vent and alert maintenance as to where it was because the trend data collected from nearby monitors showed that portion of the system was running less efficiently. So, the system helped the cooling system run more efficiently and save man power that wasn’t needed to find the obstruction (if it had ever been otherwise discovered). The technology is still in its early stages and has some glitches, but it’s a big step ahead for smart building technology.

When You Come to a Fork in the Road….Take It!

Undoubtedly, the great American philosopher and 15-time All Star Yogi Berra wasn’t thinking of the cable industry when he first uttered the above bon mots, but the sentiment seems particularly applicable now, midway through the second decade of the twenty-first century.

The cable industry does, indeed, find itself at a crossroads of sorts. Cable providers face competition from all directions. Netflix has proven itself quite formidable, changing the game with respect to video-on-demand, user-friendly on-screen guides and—adding insult to injury—original programming. On the broadband front, Google Fiber has been a greater threat than previously imagined, offering customers higher-speed and lower-cost broadband service.

And, as if that wasn’t enough, the cable industry is facing a bit of a PR crisis. A recent American Consumer Satisfaction Index (ACSI) study found that customer satisfaction with subscription TV providers and ISPs continues on a downward trajectory. ACSI found that customers feel that they pay for more than they need in terms of cable television, and get less than they want in terms of Internet speeds and reliability.

All of which makes the general session discussion at the upcoming BroadbandVision show all the more timely. Those scheduled to share their expertise include Steve Cochran, President and CEO of WOW! Internet, Cable & Phone; Rich Fickle, President and CEO of NCTC; Robert Gessner, President of MCTV; and Matt Polka, President and CEO of The American Cable Association. Don’t miss this stellar panel as they share their insights into to the future—as Yogi once said, “If you don’t know where you’re going, you might not get there.”

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