Meeker: Mobile is King of Internet Access and Content

Mary Meeker of KPCB puts out an Internet Trends report every year that is chocked full of interesting data on Internet, social, mobile and e-commerce trends.  In this year’s report at the Code conference in Southern California last week, Ms. Meeker said that while growth in overall Internet usage was slowing (especially in developed countries), it has increased rapidly for mobile.
Meeker said that:
  • Mobile data consumption is up 81 percent due to many more people using tablets and smartphones, especially to watch video. See graph below.
  • Mobile access now accounts for 25 percent of global web usage, up from 14 percent a year ago.  Mobile internet traffic is growing at a rate of 1.5 times that of conventional broadband.
  • Meeker sees it growing at an annual rate of 81 percent, with mobile video largely driving that growth.
  • Global mobile internet usage leaped from 14 percent to 25 percent between May 2013 and May 2014.
  • In North America, it jumped from 11 percent to 19 percent and in Europe it increased from 8 percent to 16 percent.
Mobile-Growth
Image courtesy of KPCB

Comment: This author finds it remarkable that “We now spend more time on mobile than on print and radio combined.”

In 2013, people spent 20 percent of their time on mobile devices, yet only 5 percent of the ad spending was allocated to mobile Internet access.   One would expect the latter to increase substantially in the years ahead. Meeker estimates there’s $30-billion per year to be made in mobile ads.  Therefore, advertisers, marketers, and media companies will try to get a good chunk of that ad revenue.

Meeker lists community, content, and commerce as the “Internet Trifecta.” With the ever expanding number of consumers online, there is a natural desire to connect with others through content. Marketers who provide context to the content they are creating and sharing are the ones who are able to increase connectivity within their communities of interest and grow stronger, which leads to brand loyalty.

Meeker said that there’s now clear evidence that people want to share information more privately. Mobile messaging services like WhatsApp (bought by Facebook for $19B), Tencent (QQ Instant Messenger in China) and Line (a South Korean-Japanese proprietary application for instant messaging) are growing at exponential rates — a trend that companies like Facebook and other social networking companies have noticed.

People were said to be “media junkies,” sharing articles via social media and tapping into streaming services. Apps are replacing linear TV channels as the way to consume video, with Americans aged 16 to 34 watching just 41 percent of their TV live, she said.

Google’s YouTube is also booming with consumers. “They are increasingly loving short-form video,” she said. “Consumers even love ads.” Indeed, 22 percent of video watching globally is done on mobile devices. On-demand mobile video apps, such as WatchESPN, BBC iPlayer, and HBO Go are all gaining popularity with mobile users. She says that 40 percent of Internet TV watchers are already using mobile devices (This author finds that to be incredible as most people we know do not watch Internet TV on their mobile devices except for video clips).

Meeker observed that 84 percent of mobile owners use devices while watching TV. They use them, in order of popularity for Web surfing, shopping, checking sports scores, looking up information about what they’re watching, and talking to friends/family or tweeting about the program. (That is something I certainly relate to as I do it all the time).

The country to watch is China, according to Meeker.  China has more Internet users than any other country by far – about 618 million Internet users last year. Approximately 80 percent of those only access the Internet via mobile devices. Four of the world’s 10 largest Internet companies are Chinese, up from one a year ago. [This author thinks they are Tencent, Baidu, Rakuten, and Alibaba].

In conclusion, the mobile Internet will continue to experience solid growth.  Therefore, it is imperative for Internet and e-commerce companies to develop content that resonates well with mobile audiences.


References:

1] Meeker’s Slide deck:

http://www.slideshare.net/kleinerperkins/internet-trends-2014-05-28-14-pdf

2] On-line Articles:

http://bits.blogs.nytimes.com/2014/05/28/state-of-the-internet-still-growing-but-more-mobile-than-ever/?_php=true&_type=blogs&_r=0

http://blog.hubspot.com/marketing/internet-trends-report-2014-mary-meeker

Viodi View – 09/06/13

theater
Click here to view stories of the heartland

The telecommunications traffic that traverses the fiber optic networks of rural telecom providers is secondary to the real value of locally-owned, telecom operators. The larger value these entities bring is the positive impact they have on their respective communities. Great bandwidth is a big part of that impact and is what is measured by Washington D.C.

It is the intangible (intangible from afar, that is), that makes the difference to the long-term health of the rural communities served by these entities.  This intangible value comes from the owners, managers and employees living in the community, serving on local boards, organizing programs for their youth and doing whatever it takes to improve their hometowns. They are in it for the long-haul, which isn’t typical of today’s Internet-driven, fad-driven online world we inhabit (see Stories of the Heartland for examples).


Cooperation Needed Across the Video Food Chain

Ed Holleran of Atlantic Broadband is interviewed at the Indy Show.
Click to view

“It comes down to the consumer, said Edward T. Holleran, President and Chief Executive Officer of Atlantic Broadband. He suggested a laser-like focus on meeting the needs of the customer is more important than ever, given changes in tastes, technology and competition.

He makes the point that broadband has subsidized operators’ video product for some time and that all parts of the content food chain will need to cooperate to prevent an impasse, such as the many battles over retranmission consent over the past several years.

Click here to view and read more.


A Canary in the Pay TV Coal Mine

Ken Pyle interviews Bryan Rader at BBC 2013.
Click to view

“They care more about broadband capacity than choice of TV providers,” said Bryan Rader of Bandwidth Consulting. Rader was referring to apartment dwellers who are leading the way in cutting the cord. In a sense, this echoes what happened a few years back when these same customers were among the first to adopt over-the-top, VoIP services. In this interview, he talks about the best way property owners can take advantage of this trend, as well as what this trend means for the overall market.

Click to view.


A Global Reach of People and Machines

Erik Kling of Vodafone is interviewed at Connections 2013.
Click to view

What may not be so obvious in this story, however, is that, through its global operations, Vodafone has a presence in the U.S. beyond Verizon. In the above interview, Erik Kling, Vice President of New Business Development at Vodafone Global Enterprise,  discusses how Vodafone helps connect disparate global organizations. And those connections aren’t just about connecting people, but connecting machines to machines.

Click to view.


Identifying Power Usage and Taking Action

Ken Pyle interviews Roderick Morris of Opower at the 2013 Smart Energy Summit.
Click to view

Today’s Wall Street Journal quotes Opower in a column about different ways utilities are engaging customers to be more proactive about energy management. Earlier this year, we caught up with Roderick Morris of Opower in this interview at Parks Associates’ 2013 Smart Energy Summit. Opower works with utilities of various sizes to help consumers improve the efficiency of energy usage. Morris provides insight into techniques for helping people be more efficient, marketing it and using big data to help identify what changes make a difference.

Click to view.


Outstanding Sessions at 2013 Hot Interconnects Conference by Alan Weissberger

Image depicts Incremental Adoption of Network as a Service.
Click to read more

In its 21st year in Silicon Valley, the Hot Interconnects Conference addresses the state of the art and future technologies used in Data-Center Networking. The high performance communications aspects are also of interest to the Supercomputing community. This article provides an overview of the presentation on the Open Compute Project (OCP), a thriving consumer-led community dedicated to promoting more openness and a greater focus on scale, efficiency, and sustainability in the development of data center infrastructure technologies. Additionally, an overview of the presentation on NaaS (Network as a Service) is given. The research in this area has the potential for a big impact on ISPs in the coming years.

Click here to read more.


Disposable Phone Numbers

Describing itself as the “Snapchat for calls”, RingMeMaybe combines old school phone numbers with the latest in destructible identities. RingMeMaybe provides a phone number that self-destructs after five days. Applications for this no-cost iOS download (Android version is in the works) include dating, classified advertising; really anything where a person wants to keep their personal number private. It seems like illicit activities would be a use-case for this sort of app, although it could have some interesting applications in direct marketing. Phone numbers can be tagged, so it is possible to associate meta-data with an incoming call (e.g. the jerk I met at a bar).

Another app, Burner, provides similar functionality and both apps provide initial credits to get one started at no-cost. Via its public relations agency, the founder of RingMeMaybe indicates, “RingMeMaybe has a deal with a telecom operator and respects FCC regulations.”  Further, they follow the industry standard for recycling numbers, waiting 5 weeks with zero inbound communications on the numbers to be declared.

This sort of disposable privacy app seems like a good one for independent broadband operators to offer, as it would be complementary to other offerings.


The Korner – A Challenge Tying It All Together

An image from the 2013 Challenger Jamboree held at Moreland Little League.
Click to view.

It is a struggle to keep a community together. It is easy to get caught up in the noise and lose sight of the bigger picture. The more difficult thing is to set aside differences, find common ground and move forward. This has been one take-away from my two years as president of Moreland Little League.

Part of the reason I took this role is that I wanted to get an idea of the challenges my friends in the heartland face, as they are often on multiple boards, are volunteer firefighters and are leaders in their respective communities.

Like independent rural telecom providers, one value that Little League provides is it gives a bunch of otherwise disconnected citizens something in common and is the thread that can stitch together community. In urban areas especially, its system of boundaries forces a tight geographic community, which is unlike the direction of youth sports today where the community is increasingly based around performance. With Little League, everyone plays, regardless of income or ability.

Like the aforementioned rural telecommunications providers, the primary benefit is not obvious. Baseball is just the vehicle to impart positive values to our youth, and, in the process, it helps adults if they are open to learning. It has certainly taught me a great deal. Everything that is good about Little League is manifested in its Challenger program.

It was an honor to be part of the 2013 Challenger Jamboree, which featured teams from south Silicon Valley to San Francisco to the north. This truly was an extraordinary event that wouldn’t have been possible without the hard work by so many volunteers and the generous donations by the many sponsors.

It is one thing to read and understand the impact this program has on the children and their families, but it doesn’t compare to the tangibility of being there. The next best thing to being there is this video, which provides a flavor for the day’s events and what this great program is all about.

Click here to view.

Viodi View – 08/23/2013

A picture of Monroe school in Santa Barbara.
Confusing picture for people in San Jose

Take August back are three words that echo in my head as my fingers tap out the first sentence of this issue of the Viodi View. An article in last weekend’s Wall Street Journal sums up my thoughts. Beyond the inconvenience for families, it points out the economic impact of kids returning to school in what used to be the month that was synonymous with vacation.

It’s ironic that, for as efficient as technology has made us, it seems like those who are working are working longer hours than ever and we have even cut short the lazy days of summer for our kids.


Ken Pyle interviews Colleen Abdoulah of Wide Open West at the 2013 ACA Summit.
Click to view

Focus on Doing What Is Right

“Focus on doing what’s right,” says Colleen Abdoulah, CEO & chairwoman of Wide Open West (WOW!) and Chairwoman of the ACA. Putting the consumer first is Abdoulah’s message in our video interview. She indicates that all parties, whether from industry or the legislative world need this focus to get past the issues that are ultimately harming the consumer.

Click here to read more and view.


Ken Pyle interviews Albert Lai of Brightcove.
Click to view.

OTT & Pay TV Blending

“Consumers just want to consume their content,” said Albert Lai of Brightcove. The challenge is making it easy for the consumer to select and view content while adhering to the business rules of the content owners, regardless of location and type of device the viewer has. In our video interview, Lai suggests some methods, beyond email authentication, that would allow automatic viewer identification by the content distributor, simplifying the experience for the viewer.

Click here to read more and view.


Ciena and Research Network Partners Work to Make Carrier WAN-SDN Realizable by Alan Weissberger

Proof bed showing architecture to connect Cienna offices using the Internet2 and Starlight networks.
Click to read more

Ciena has teamed up with three research networks to build the industry’s first SDN based carrier-WAN, which will be accessible “on demand” by researchers.  The venerable optical network equipment company is working with CANARIE, Internet2 and StarLight on this intriguing research project. When completed, this network will unite all the key packet, optical and software building blocks required to demonstrate and prove the optimization and monetization benefits of SDN OpenFlow-enabled, multi-layer WANs.

Click here to read more.


Past, Present and Future of Mobile at the Computer History Museum by Alan Weissberger

Paul Jacobs at the CHM. Image courtesy of IntelFreePress.
Click to read more.

On August 8th, Computer History Museum CEO, John Hollar engaged in a spirited conversation with Qualcomm’s Chairman and CEO, Paul Jacobs. A wide variety of topics were covered – from the early days of CDMA to the present dominance of wireless data technologies (3G+ and 4G-LTE) throughout the world, to what the wireless future might bring. Mr. Jacobs also provided a glimpse of what new R&D projects Qualcomm was working on. He touched on wearable computing devices and briefly showed a smart wrist watch he was wearing to the audience.

Click here to read more.


Looking Ahead to the Wireless Future- Paul Jacobs at the CHM- Part II by Alan Weissberger

The TELiBrahma service is demonstrated and discussed at CES 2013.
Click to read more

This second piece examines our wireless future and some of the research projects underway at Qualcomm. It also addresses the potential impact of the end of Moore’s Law on Qualcomm and the mobile communications industry.

[Editor’s note: Alan reports on some thought-provoking developments where science fiction is becoming science reality. It leads one to think that the smart phone and tablets are version 1.0 of the human integration into the Internet of Everything.]

Click here to read more.


Some Tweets and Short Thoughts:


Wireless Needs Fiber, Not Pixie Dust

Ken Pyle interviews Shirley Bloomfield of NTCA.
Click to view

“It’s very difficult for policy makers to keep up with what the industry is actually doing,” said Shirley Bloomfield, CEO of NTCA. The implication is that it is unclear how rules will change due to slow reaction of policy makers to fast-moving innovation. As a result, operators face uncertainty, which, to some extent, holds back investment in their networks. This was a common view-point on the panel, which Bloomfield participated in at The Independent Show. Her interview leads to our next story.

Click here to view Shirley’s comments on rural broadband.


The Korner – Full STEAM Ahead to the Next Frontier

The result of hands on learning and Levi Maaia's STEAM program.
Click to view

One of the highlights of my summer vacation was the detour made from the journey from Silicon Valley to San Diego for The Independent Show. The detour was well worth the time and the hour or so spent with Levi Maaia left an impression on me and perhaps an even bigger impact on my two young colleagues. Maaia is multi-faceted, as he is an innovative and award-winning broadband operator, a ham radio enthusiast, a student and a teacher.

Maaia has been working with the Anacapa school to develop a program called STEAM – Science, Technology, Engineering, Art and Math. By mixing hands on work with academic disciplines, he hopes to make abstract concepts real, which will motivate kids to learn these very important subjects. His innovative approach to learning is, in some ways, a step back to what learning used to be. He incorporates hands on to not only make the learning process fun, but to stretch other parts of the brain beside that which is used for interacting with a screen.

He is the kind of teacher that inspires kids to want to go back to school at the end of summer; which should still start after Labor Day weekend!

Click here to read more and view the associated video.

Analysis and Implications of Google's Proposed Web TV Service

Introduction:

A picture of scissors literally cutting a coaxial cable.
Cutting the Cord

The WSJ and NY Times reported that Google wants to offer live TV channels as well as pre-recorded TV shows (On Demand) using the public Internet.  The two newspapers indicated that the service would share a closer resemblance to cable TV than to streaming services like Hulu or Netfix, allowing customers to select channels online in real time, just as they do on cable, satellite or telco TV. The move would be a potential boon to the company’s struggling Google TV service.   Intel, Apple, and SONY are reported to be working on similar services.

Analysis:

The problem for those and any other new broadband TV provider will be in securing reasonable, nonrestrictive licensing deals from media companies that own the video content.  Many analysts believe those companies (Time Warner, Disney (which owns ESPN and ABC), Fox, CBS, NBC/Comcast, Viacom, etc)  are more likely to help out legacy program distributors (cable, satellite, telco TV providers) rather than broadband Internet newcomers.  Another question is whether both popular and unpopular channels will be bundled into various packages offered to consumers.

Bloomberg’s Kirsten Salyer asks “Can Google’s Online TV Kill Cable?”  Perhaps, but not right away she says:  “Can Google and others compete against the Time Warner’s in terms of price and content? Not immediately, but news they are trying is a warning that TV providers are going to have to be more innovative about how they adapt to the Web.”

Will Google offer live video in It’s proposed Broadband TV Service?  That’s really the key to differentiating a Google Web TV service from the video on demand streaming services now offered by Netflix, Amazon and Hulu.

As the WSJ article notes, Google has already financed original programming for YouTube and offers or plans to offer TV and Gigabit Internet service in cities with Google Fiberthe company’s  broadband, fiber optic Internet service .   

Unique Insight and Perspective:

Indeed, what this author finds most interesting is Google ability’s to offer live and recorded TV programming on Google Fiber, which is now sold in Kansas City, MO and Provo, Utah.  It will soon be available in Austin, TX, according to the Google Fiber website.

There’s another interesting angle which no one has yet identified till now: a further broadband Internet capacity crunch brought on by the web newbies streaming real-time and on -demand programming.   This will require new broadband Internet peering agreements between CDN providers and ISPs.    It became a critical issue when Netflix video streaming became popular a few years ago and that company contracted with Level 3 Communications for a Content Delivery Network (CDN) to deliver its streaming video.

In 2010, Level 3 Communications and Comcast (the largest broadband ISP in the U.S.) entered into a legal battle related to the costs of the former’s broadband data flowing into the cable company’s broadband Internet access network.  Level 3 complained that Comcast had begun charging a new fee to deliver Level 3 traffic (mostly Netflix streaming) to its own subscribers. Level 3 called the fees unreasonable. Comcast argued that Level 3 was trying to send heavy traffic across its network without bearing its fair share of the cost.

The dispute was settled yesterday with the details not disclosed. On July 16th, the two companies said  they had “resolved their prior interconnect dispute on mutually satisfactory terms.”    The agreement changes how Level 3 routes traffic across Comcast’s network, sharply cutting the fees the backbone provider must pay when traffic overwhelms certain connections, a person familiar with the matter told the WSJ.

One blogger at the Benton Foundation wrote that she “suspects the resolution of the Level 3 and Comcast dispute involved some sort of network re-engineering.”

The peering arrangement and any network re-engineering could help both companies (and serve as a model to others) to avoid the kind of standoffs and gridlock that will almost certainly occur as the volume of Internet video traffic soars.

What few pundits realize is that some form of CDN or equivalent will be needed to transport the high volumes of streaming video, in real time, to wireline broadband ISPs.  Hence, peering arrangements and billing agreements will need to be made between those two types of network operators.

Closing Comment:

We can expect a further explosion of broadband traffic resulting from new streaming video services from Google, Intel, Apple, and SONY joining Netflix, Amazon, and Hulu.  Are the network operators prepared for this?  This author doesn’t think so!

Viodi View – 04/08/13

Are Google’s fiber networking efforts a small part of something that is much bigger; something that even Google may not be able to envision? That’s the impression I got from listening to a recent presentation from Google’s Milo Medin. Perhaps the network becomes a central nervous system for the sensors and machines that become part of Ray Kurzweil’s Singularity.


Google Fiber – A Step Function Connectivity Improvement

The Google Fiber Space retail store hints at some of the developments in the future that a gigabit network enables.
Image Courtesy of Google

A step function improvement in capability is how Milo Medin described Google’s Kansas City fiber project at the February 13th IEEE ComSoc meeting in Santa Clara. That huge improvement in customer experience is in contrast to the incremental gains of MSO [Multiple System Operator] and telco broadband networks, which have much lower access speeds. Click here to read more.


Marketing Smart Energy

austin-energy-debbie-kimberly
Click to View

The rumors that Austin will be Google’s next fiber city makes sense, given Austin’s high-tech culture and workforce. What might not be so obvious is the role their municipal utility could play in facilitating a gigabit network. Austin Energy has been an innovative; being one of the first to deploy smart meters and the associated data network. Marketing and showing the value of smart energy is one of the topics discussed with Debbie Kimberly of Austin Energy. Click here to view.


Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 2 of 2 by Alan Weissberger

Image depicting a unified video delivery network.
Image courtesy of Alcatel Lucent and Microsoft

This is the second of a 2 part article on the 2013 OTTCON.  The first article looked at how Pay TV providers could offer OTT content on second screen devices and also how OTT and local providers (Pay TV or ISPs) could partner together to offer OTT content to subscribers.  This second article examines how video network infrastructures need to evolve to support both Pay TV and OTT content.

[Note: This article and the associated comments, which features coverage of a joint Alcatel-Lucent/Microsoft presentation, becomes particularly relevant given Ericsson’s announcement of its acquisition of Microsoft’s Mediaroom software.] Click here to read more.


Aereo Ruling – Opportunity for Broadband Providers?

Ken Pyle interviews Barbara Esbin of Cinnamon Mueller at MTA.
Click to View

Barbara Esbin of the law firm of Cinnamon Mueller  provides an overview of the Aereo court case. Aereo just won a major decision last week in the Second Circuit Court of Appeals. She suggests that there is a good chance that this case could go to the Supreme Court, given the Second Circuit’s split with the Ninth Circuit Court of Appeals. In December, the Ninth Circuit Court granted broadcasters’ motion for a preliminary injunction against a similar service, FilmOn (also known as Aereokiller).

Out of this seeming chaos, Esbin indicates there could be opportunities for operators to fashion various hybrid services that respect copyright laws, while providing broadband providers another way to offer their customers a video solution. Click here to view.


The Message Is Being Heard

Ken Pyle interviews Ross Lieberman at the 20th Anniversary ACA Summit.
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Congress is beginning to hear the message of the challenges small operators and their customers face with regards to retransmission consent, sports programming, program access and broadband regulation, according to Ross Lieberman of the ACA. Filmed at the 2013 ACA Summit, Lieberman gives a preview of a panel he was part of at the MTA 2013 Convention. Click here to view.


The Korner – Fashion Mind Reading – Part 2

Ken Pyle interviews Ariel Garten of Interaxon
Click to View

It may look like a fashion statement, but the Muse brain-sensing headband from Interaxon, allows one to control games with their thoughts; no hands or voice required. As Ariel Garten, Interaxon CEO and founder, says, it allows one to, “See inside your brain in action.”

Gartner describes how this product was built on technology developments that began a decade ago. This will be their first foray into the consumer market and is due out in September packaged with multiple brain fitness apps. A Software Development Kit is available, so as Garten suggests, “You can build whatever you can dream of,” or think of.

Couple the sort of technology produced by Interaxon with Google Glass or the Innovega’s contact lenses and one could receive information through a private screen and control things by merely thinking. This is the man-machine interaction that Kurzweil describes. Click here to view the view interview with Garten of Interaxon.

Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 2 of 2

Introduction:

This is the second of a 2 part article on the 2013 OTTCON.  The first article looked at how Pay TV providers could offer OTT content on second screen devices and also how OTT and local providers (Pay TV or ISPs) could partner together to offer OTT content to subscribers.  This second article examines how video network infrastructures need to evolve to support both Pay TV and OTT content.

Video Network Architectures:

With live linear, Video on Demand (VoD) and now OTT content, delivery of multiple concurrent video services has become increasingly complex for pay TV service providers.  Nonetheless, providing access to quality video must remain a core competency of Service Providers (SP), else they’ll lose customers to competing offerings.   With the amount of content available today, SPs’ network infrastructures need to be able to handle network capacity issues in order to seamlessly deliver video content from the cloud to TVs, PCs and mobile devices.  That could involve costly network investments.

Service providers not only need to expand the accessibility of quality content to new screens, but they need to do this while meeting consumers’ expectations of a seamless content viewing experience when switching from one type of video to the other.  Quality of Service (QoS) will have a very strong impact on viewer engagement.

Content protection is another top concern for SPs.  It preserves content revenues among their subscriber base. Ensuring that only authorized subscribers access certain content can be difficult, especially with the expansion of viewing platforms. It is critical that video SPs  address content security, entitlements and authorization.

As viewing continues to increase on new screens and platforms, multi-screen services will continue to be a priority. The various screens will require different video formats that need to be well-managed and secure to provide a seamless ‘video anywhere’ experience.

All of the above factors will require new video architectures with enhanced hardware and software platforms needed to deliver OTT content.  A high level view of an OTT architecture (courtesy of Discretix) is shown below.  The figure does not include 3G/4G wireless access to OTT content because almost all mobile devices will access OTT content via an in-home WiFi network which connects to a Residential Gateway.

A depiction of the complicated architecture of multiscreen video.
Image Courtesy of Discretix

A more comprehensive video network architecture was described by Microsoft and Alcatel-Lucent in a 2013 OTTCON session titled, “Strategies of Unlocking Additional Values from OTT.”  That session was directed at existing Pay TV SPs that wanted to deliver OTT content along with their existing linear and video on demand (VoD) programming.

OTT value creation was said to have three underlieing pillars:

  • Integrated TV platform across experiences and devices
  • Build OTT experiences tied to core TV proposition
  • Web analytics and Internet speed applied to TV

The figure below depicts how a SP video network could adapt to support OTT content delivery.  Among the key network functions are:

  • Redistribute STB functions to CE/clients and the home network
  • A highly distributed Content Delivery Network (CDN)* for uni-cast scaling and multi-cast video (which has been demonstrated by Ericsson)
  • Session based personalization to create new value for consumers, content owners and advertisers
  • Agile back office architecture to launch and evolve services cost-effectively

*A CDN is a large distributed system of servers deployed in multiple data centers across the Internet.  It provides lower latency content services to end-users with higher availability and performance than the “best effort” Internet

Image depicting what needs to be done to adapt to HAS and Internet control.
Image courtesy of Alcatel Lucent & Microsoft

 

The Unified Video Network illustration below shows unified content distribution, distributed caching (of video content) and re-purposed video servers to permit SPs to reuse existing assets.

Image depicting a unified video delivery network.
Image courtesy of Alcatel Lucent and Microsoft

Personalization in the core SP network is shown in the figure below.

An image depicting what needs to be done in the core network to enable personalization.
Image courtesy of Alcatel Lucent and Microsoft

Microsoft’s Media Room* was said to be the market leading IPTV software platform with 50 deployments in 23 countries, including AT&T (U.S), Deutsche Telekom (Germany), and Sonus (Canada).  Alcatel -Lucent claims to be number one in video network and systems integration with 30 network operators using their equipment, according to the company.

Microsoft and Alcatel-Lucent platforms are used by AT&T U-Verse which announced second screen video content delivery last July, but has yet to make it available (as noted in the comments directly below the Part I article.

http://viodi.com/2013/04/01/multi-screen-video-content-and-ott-partnerships-enabled-by-new-video-network-architectures/

*Editor’s Note: It will be interesting to see what happens with Alcatel – Lucent’s ability to resell/integrate Mediaroom if the rumors prove true that Alcatel Lucent rival Ericsson will acquire the Mediaroom platform from Microsoft.

Addendum:

While not participating in OTTCON, Chinese telecom equipment vendors ZTE and Huawei also have a well-established role in the IPTV market, based on strong and growing IPTV platforms within China (e.g. China Telecom).

“There is a strong split in the IPTV middleware market between system integrators providing an entire solution and specialists in applications and customer experience,” according to Sam Rosen, ABI Research practice director for TV & video. “With the exception of Cisco, who recently purchased NDS, the system integrator’s role in customer experience will likely decline over the next few years; instead, this role will be left to client-centric middleware companies with better user experience,” added Rosen. The analyst stated that Viaccess-Orca (a subsidiary of France Telecom), Netgem and others, each have their own unique philosophy on how to create an IPTV system. ABI Research forecasts that IPTV households will grow from 80 million in 2012 to 117 million in 2017, with growth driven by Asia-Pacific.

http://www.abiresearch.com/press/microsoft-extends-lead-to-23-of-the-iptv-middlewar

Multi-Screen Video Content and OTT Partnerships Enabled by New Video Network Architectures – Part 1 of 2

Introduction:

This article covers two types of sessions from the content rich OTTCON 2013, held March 19-20, 2013 in Santa Clara, CA:

  1. Second Screen Video from mainstream pay TV service providers OR via a partnership between an OTT network provider and local service provider (telco or cableco).
  2. Video Network Architectures that facilitate OTT video for second screens, smart TVs (with Internet connections), game players, OTT boxes that connect to TVs, etc.

The first article published on the excellent OTTCON 2013 addressed emerging technologies for next generation video.(http://community.comsoc.org/blogs/alanweissberger/technologies-will-offer-higher-quality-viewing-experience-enable-new-ott-servi).

Second Screen Video Content delivered by pay TV Service Providers :

Until now, second screen apps for mobile devices have been used primarily for searching, browsing and selecting content for the first screen (TV).   Examples include looking up information about a particular TV program, a movie review, actor bios, related programs, use as a remote control device, etc. There has not been too much OTT content being watched on those second screens, even though most pay TV customers have free access to “TV everywhere” from their pay TV service provider. Some may also have access to Hulu, Netflix, etc but don’t watch those much on second screens either (they use either game players or dedicated boxes like the one from Roku).  But in the future, there are other possible uses of the second screen such as social TV and watching pay TV/OTT video content from a service provider.

“Second-screen devices such as tablets, smartphones and ultrabooks are likely to be the principal force behind social TV experiences as companion apps are increasingly written for that experience,” said Michael Gartenberg, research director at Gartner Group. “A combination of content integration, social interaction and loyalty programs are the key activities that will make up the social TV experience.”

Long-term efforts to connect traditional TV broadcasts to the Internet have largely been limited to either content companion websites or connected devices such as smart TVs, video format converter and set-top boxes.  None of these approaches has led to the creation of interactivity or a social networking type of viewing experience for consumers. Or watching OTT video programming from their pay TV service provider.

One company thinks that will change in a big way! Speaking at 2013 OTTCON in Santa Clara, CA, Alan Hoff, VP of Strategic Marketing at SeaChange said that MSOs/Cablecos and Telcos would soon be delivering multi-screen TV services; and it will not be just the largest service providers (SPs), either. Concerned about disintermediation from OTT players, multi-screen TV was said to be “in the sights of every (pay TV) service provider.” It addresses the OTT provider threat (think “cord cutting” or “cord-trimming”), while capitalizing on the IP and web technologies that may providers are now using to deliver video content to TVs (e.g. AT&T’s U-Verse network uses IPTV technology while Comcast uses a managed IP network to control VoD delivery).

Second screen video will provide SPs with new opportunities in long time content owner relationships. Advertisers were said to favor second screen video because of its interactivity capability. The Diffusion Group forecasts 2017 tablet video viewing (as a second screen) to be significantly greater than all the on-line/OTT viewing in 2011, in terms of total hours watched (58B hours versus 38B hours, respectively).

Several examples of collaboration between OTT providers and video SPs were given:

  • Virgin Media (UK) is offering YouTube and BBC iPlayer.
  • A Time Warner Cable app is being distributed on by Roku for use on their box that plays OTT content on TVs via HDMI cable connection.
  • Com Hem (Sweden) is combining OTT content with its linear, on-demand, and catch-up TV services.

Service provider/OTT integration examples were said to span all network operator types –cable, telco, mobile, and satellite. Superior reliability, quality of user experience, simplicity of a seamless experience, and presentation across multiple devices were the benefits to be realized, according to Mr Hoff.

Distribution of OTT content by SPs could be via: the on-demand program listings, local distribution of specialized content, or a pay TV event (e.g. VOOmotion+ created a pay per view offering for Belgian Premiere League Football).

+  VOOmotion is an innovative multi-screen video service offered by cableco VOO in Belgium. Launched in December 2012 and now available to VOO’s triple-play customers across Belgium, VOOmotion is founded on SeaChange’s Adrenalin video platform and Nitro subscriber experience software.

Summing up, Mr. Hoff stated that:
  • Service providers‘ multi-screen expansion will bring in a huge audience.
  • Think of the multi-screen platform as a brand-builder for the SP as an OTT content distributor.
  • The lines of video consumption are blurring: OTT needs to be everywhere, and “SP multi-screen is prime real estate!”

“You have to follow the video consumers.  They’re on the move and they’re using more and more devices to watch video content,” said Hoff.  “Blended content services are the key to consumer satisfaction and video service providers are in hot pursuit with their high QoS multi-screen offerings.  Ultimately, they’ll coalesce everything consumers desire into one convenient source and a powerful brand association for OTT providers,” he added.

OTT Content delivered by Partnership between OTT Provider and Local Service Provider:

Evegent slide 8 depicting role of local service providers.
Image courtesy of Evergent

In a related 2013 OTTCON session titled, “What does it take to be a global OTT Service Provider,” Evergent CEO Vijay Sajja said, “the opportunity exists for an OTT service that combines local LiveTV channels and premium VOD content.”  One method of achieving that vision is for an OTT provider to partner with a local pay TV service provider.   There’s also the possibility of the OTT player partnering with an ISP to deliver higher quality OTT content to (mobile and wire-line) Internet subscribers. Both types of OTT-Local Provider partnering are illustrated in the adjacent figure on the right.

High level slide depicting elements necessary to create a successful multiscreen service.
Image courtesy of Evergent

Note: In addition to this excellent presentation, Evergent showcased their OTT Subscriber Billing and Royalty Tracking software systems at 2013 OTTCON.

Among the key challenges for such a B2B2C (Business-to-Business-to-Consumer) partnership are: support for multiple devices, languages and payment methods; easy sign-up/service ordering/provisioning; video player integration; customer account management; customer care; and fraud alerts.  Key high level elements of an OTT solution is shown in the adjacent figure on the right.

Evergent slide depicting how service provider could offer OTT content.
Image courtesy of Evergent

For an effective partnership, the biggest issue is back office and systems integration between the OTT provider and local Service Provider (pay TV or ISP).  Integration of call centers will also be important for rapid problem diagnosis and repair. The functionality required for all such integration is depicted in the adjacent figure on the left.

Stay tuned for part 2 of this article which will examine the architecture of video networks that make multi-screen video  (and other OTT environments) possible.

Verizon Close to Launching a Video Streaming Service with Redbox; More than 250M covered by VZW LTE Network

In its third-quarter financial report, Verizon Communications profit margins grew as it added 136,000 FiOS broadband customers and 119,000 FiOS TV subscribers — about the same as in the prior quarter.   More importantly,  Chief Financial Officer Fran Shammo said the giant telco was “very close to launching” its video-streaming service with Redbox this quarter.

Majority owned Verizon Wireless (VZW*) sold 3.4m Android phones and 3.1m iPhones in the third quarter.  VZW added 1.54 million net contract customers in the quarter, beating the 901,000 estimate by analysts. More than 250m people are  now covered by VZW’s  LTE network.

“The subscriber number beat the highest estimate on the street,” said Kevin Roe, an analyst with Roe Equity Research in New York. “Part of that was from tablets, and I also think the T-Mobile trend of losing significant customers continues.”

* Verizon owns 55% of VZW;  Vodafone owns 45%


Growth in Verizon’s FiOS video business continued to slow.  Subscriptions rose just 2.7% vs Q2 to 4.6M. The increase of 119,000 customers fell short of Wall Street’s expectation for 142,000. The company’s FiOS broadband unit had nearly 5.3M customers at the end of the quarter- an increase of +136,000 vs the Wall Street consensus forecast of +165,000.

“The read-across for cable and satellite incumbents is self-evidently positive:  lower growth for FiOS means smaller losses for their competitors,” Bernstein Research’s Craig Moffett said.

http://www.deadline.com/2012/10/verizon-q3-earnings/

Infonetics analyst Julien Blin wrote in an email:

“The expected launch of Verizon’s VOD streaming service with physical DVD delivery in 4Q12 through Verizon stores and Redbox kiosks, along with a continued push of its video aggregation engine Viewdini and other upcoming multi-screen offerings, should make Verizon’s video offering more appealing, put pressure on competing services (e.g. Netflix, Amazon Instant Video..) and be another key driver for Verizon’s future top line growth. We also expect Verizon to roll out advanced hybrid video gateways in the coming quarters which should help further improve the multiscreen experience. All this should help drive the growing popularity of FiOS in the coming quarters.”

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Related Article on AT&T’s U-Verse:  http://community.comsoc.org/blogs/alanweissberger/att-may-buildout-u-verse-remoteunderserved-areas-7m-u-verse-subscribers-get-ot

Viodi View – 03/23/12

Will Google Hangouts and other virtual get together’s replace the advantages of face-to-face communications one sees at a trade show or conference? Sure, the immediacy and the zero travel cost of an online conversation plays well in a world that changes ever faster and needs an instant response. Still, being able to see people in all of their 3D glory and being able to take advantage of serendipitous introductions and meetings that occur in a crowded venue is invaluable. And sometimes, it is good just to get away to be able to focus on industry issues.

One of the problems of a local trade show is that it is hard to get away. There were a number of excellent panels at OTTCON in Santa Clara. Being in my turf, it was particularly difficult to break out of normal routines, as is possible when traveling. I didn’t catch enough of the panels to determine an overall theme, but a thought from Martez R. Moore EVP of Digital Media for BET echoed what Viodi has argued in its local content workshops for years.

He suggested they are aggregating and monetizing eyeballs across TV, mobile, VOD, online, social media and trying to create shared companion experiences across their platform. Moore said that BET is, “Creating value across an aggregated base of viewers.” He revealed that part of their competitive advantage is that they have one sales team representing all of their media (TV, VOD, mobile, etc).


Cloud Based Local Content

To have one sales team, requires a back-end that deals with multiple end-user screens and allows the operator to set business rules and serve advertising that is appropriate for a given device. Part of the solution to that problem, may lie with a company called TelVue.  Using the cloud to deliver local, linear and on-demand content is what Jesse Lerman of TelVue demonstrates in this brief video interview at the 2012 OTTCON (Over the Top Conference) in Santa Clara, CA.  Click here to view and read more.


OTT Movies Equal VOD with More Gardens to Pick From by Roger Bindl

rog-tv-ott-720Over-the-top progressed faster than I thought and gave more options than I thought, but now I think OTT has done better than VOD because it offers more options, probably did a better job marketing, and will likely dominate in the future because of its options. To me OTT movies are simply VOD out of someone else’s garden but I have a vehicle driving me to many more gardens to pick from.  Click here to read more.


Retransmit This and More

Content is the challenge in this world where technology destroys (and creates) business models. Retransmission consent, developed at a time when technology had different limitations, was top of mind at the 2012 ACA Summit in Washington D.C., as ViodiTV captured various operator perspectives on this controversial topic. We also heard from the folks from the U.S. and Canada who aggregate content for smaller, rural operators. Click here to view this brief video that provides highlights of those topics and provides a glimpse of the 11+ interviews we will be showing on ViodiTV.


Be More Nimble and More Local

Retransmission consent, programming costs and the terms and conditions under which his company must operate were among the biggest concerns of Robert Gessner of Massillon Cable TV at last week’s 2012 ACA Summit.  In this video interview, he explains the importance of independents working together to negotiate with the large media suppliers.  He points out that the biggest challenge his company (and other independents) face is scale.  Despite its relatively small size, Massillon Cable TV has retained customers through innovation and being close to the customer.  Click here to view.


Cost/Benefit Analysis of Regulations

In this video interview, filmed as he was leaving the 2012 ACA Summit and rushing to a vote, Senator Mark Pryor [D-AR] briefly explains a bipartisan, bicameral piece of legislation introduced by Senators Pryor and Portman [R-OH] and Representatives Coble [R-NC] and Peterson [D-MN] intended to reduce the cost of regulation and, by extension, help improve job creation.

The bill promises to bring those who are being regulated into the discussion before the regulations are passed.   The regulators must also show that a particular rule is the  “least costly way” to meet the objective.  Similarly, under this proposed legislation, the regulators must do a cost/benefit analysis; which is currently not allowed by some statutes.  Click here to view.


The Sleepy & Instant On Set-Top

“Lite sleep” and “Deep Sleep” are two of the power-reduction initiatives that Cable Labs is actively pursuing to reduce the power consumption, explains Ralph Brown, CTO of Cable Labs.  Being more efficient, without sacrificing performance and not sacrificing user-experience is their goal.

As pointed out in this CED article, the conversation could quickly turn into a political one, as  power consumption of a Network DVR (one copy stored remotely for multiple viewers) is approximately 1/60th of that of a network DVR-RS (Remote Storage, where it is one copy per viewer).  Perhaps, this will drive some interesting political alliances between the cable industry and “green” groups, pressuring content owners to grant network DVR rights to their distribution partners.  Click here to view the video interview and read the rest of the post.


Key Messages from IDC Directions 2012 for “The Intelligent Network” – Part 1 by Alan Weissberger

Courtesy of IDC

At it’s annual Directions 2012 conference,  market research firm IDC strongly stated that IT is on the cusp of a “Third Platform” that will dominate the  landscape till 2020 and beyond.  That 3rd platform consists of some mash up of: cloud computing, mobile broadband, mobile services/devices/platforms- OSs/apps, social networks, and big data/analytics.  Many or all of those technologies will be integrated or combined to offer new types of services to both business and personal IT end users. IDC predicts a CAGR of 15% for Third Platform IT spending through 2010 with a cumulative growth rate  of 70.4% (2013-’20).  Click here to read the rest of the article.


Some Tweets and Short Thoughts:

  • “Is the QR code a fad to be killed by fraud,” asks Roger Bindl?  Perhaps we will learn what he means in a future issue.
  • Richard Bullwinkle of Rovi- Amount of personal sharing of information is inversely proportional to the size of the screen
  • Bullwinkle of Rovi at OTTCON – 89% watch live TV – all those who are trying to disrupt television are trying to create television-like experiences.
  • Jeremy Toeman of dijit just threw out the obligatory “Jennifer Aniston sweater” ITV comment. Is pizza w/ VOD going to be the next comment?

The Korner – The Community Movie Theater

The chance to see a community revival of sorts would have not been possible without the face-to-face interaction that one finds at a trade show.  This story starts several years ago at the Badger Communications booth at the MTA show.  Cliff Albertson kindly gave me a copy of a book written by an owner of an independent telecom company.  I was thrilled to review the book and jumped at the chance to interview the author on camera to discuss his book.

Little did I know that I would get a bonus interview with Everett Christensen talking about his Economic Development Award.  It was great to talk about it, but I really wanted to see why he won the award.  I held out hope that someday I might get a chance to see the impact my new friend had made in his community.  Fast-forward six months or so and another friend  had figured out how Viodi could help his company tell their customers’ stories.

That was the ticket for me to take a detour on my route to North Dakota and see why Christensen Communications won the 2011 MTA Economic Development Award.  We look forward to meeting old and new friends at next week’s MTA show, as well as the 2012 MTA Economic Development Award and hope to get to that winner’s community some day.

And if you don’t have time to watch the video online, don’t fret, as we will air it on the hotel channel at MTA next week.  Thanks MTA!