05.07.08
Posted in Uncategorized at 11:18 am by David Mercer
BT launched its Total Broadband Anywhere service today. It is available to Option 3 broadband customers starting at an additional £5/month and includes a free smartphone. The contract is for a minimum of 18 months. The “50” option (£5/month) includes 50 minutes and 50 texts over Vodafone’s network. Higher price packages are available, up to £35/month, which includes 600 minutes and 700 texts. All packages include unlimited WiFi downloads and 10MB of data over GPRS connections.
Two BT ToGo smartphones are available initially, both from HTC (whose brand is also on the devices) – the HTC S620 and S710. BT’s Gavin Patterson told us that he was working with other phone vendors and expected more devices to be available in future. 3G is also a possibility for the future, although BT does not believe it is necessary today, and clearly there are other network access technologies, such as Wimax, which may come along as well.
The basis of BT’s Anywhere package is WiFi, so the devices will connect to the home wifi network, BT FON hotspots (currently 82,000 in the UK and an additional 190,000 worldwide), and 2500 BT Openzone hotspots in the UK and Ireland.
The devices are based on Windows Mobile and preconfigured with customers’ BT Broadband settings, so that BT Yahoo email works “out of the box”. Other email accounts are also set up easily, simply by inputting an email address. Mobile security is also integrated. BT Broadband Talk is available at WiFi hotspots.
I asked BT if this announcement represented the company’s mobile strategy, and the answer is a qualified “no”. It is first and foremost an extension of the company’s broadband offer, and gives customers the option to use a portable broadband device in mobile situations. If BT Broadband customers choose to drop their mobile service provider, the BT ToGo phones clearly allow them to do this, at a cost. Although BT wouldn’t put a number on it they clearly expect that a reasonable number of broadband customers will use BT ToGo as their main mobile service over time. At the same time they claimed they were not going “head to head” with other mobile service providers like Vodafone and Orange. If ToGo does start displacing mobile phone contracts, this could clearly change.
The biggest concern with BT’s approach is that it relies on a network partner’s 2.5G service outside of WiFi hotspots. 10MB does not go very far for web browsing or any serious media applications, and while BT suggests most people will be happy just to download a few emails, it remains to be seen whether this will be a limitation for most users.
Client Reading:
Google-backed FON Movimiento: Peace, Love and Free WiFi
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05.06.08
Posted in Uncategorized at 3:02 pm by David Mercer
Today’s launch of the first dedicated free-to-air satellite service, Freesat, will help inject some much-needed competition into the UK’s HDTV market. Even though its HD performance has been disappointing, Sky Digital remains the only major source of HD broadcast content in the country, notwithstanding Virgin Media’s offer of on-demand HD video.
Freesat has been four years in the making and is a joint venture initiative of the BBC and ITV. 17.9% of the latter, of course, is still owned by BSkyB. Although Sky has been directed by Ofcom to reduce this stake, the matter is currently under appeal.
Whatever the result of that lengthy dispute, Sky’s holding does not seem to have prevented ITV taking the significant decision to restrict its own soon-to-be-launched HD service to the Freesat platform, thus providing Freesat with a competitive advantage over Sky’s HD service, whose paying subscribers will not be able to see ITV HD.
How much of a disadvantage that is for Sky, only time will tell. But given the paucity of choice in HD broadcasting today, and the continued popularity of ITV programmes, it should at least provide some pressure on Sky. The other HD channel on Freesat, BBC HD, is also available to Sky viewers. ITV and the BBC, more than most, will be regretting the exit of England and the other home nations from the finals of the European Championships, for which they will be providing live coverage. Live games in HD could have provided a significant boost to Freesat uptake.
The major difference from Sky of course is that Freesat viewers will not have to pay a monthly subscription for their HD programmes. BBC and ITV alone would not appear to be a huge attraction for viewers to buy and install new HD set-top boxes at £200 or more, so much will depend on persuading other channels to launch HD over the coming months.
As we have discussed, free-to-air HDTV (excluding well-funded public broadcasters like the BBC) is a challenging business model until wider platform reach has been established, so we can expect Sky to continue to lead in HDTV service adoption. But competition is usually a good thing, and Freesat will put modest additional pressure on Sky to improve its own range of channels and bring costs down.
Freesat channels at launch are listed below (EPG channel numbers in brackets). There are in fact around 40 discreet mainstream TV channels. The remaining 80 comprise shopping, radio and regional feeds of the main BBC and ITV channels.
Entertainment (101-199)
BBC One (101)
BBC Two (102)
ITV1 (103)
C4 / S4C in Wales (104)
BBC Three (106)
BBC Four (107)
BBC HD (108)
ITV2 (113)
ITV3 (115)
ITV3+1 (116)
ITV4 (117)
S4C Digidol / C4 in Wales (120)
E4 (122)
More4 (124)
Zone Romantica (135)
Zone Thriller (137)
News and Sport (200-299)
BBC News (200)
BBC Parliament (201)
S4C2 (202)
Al-Jazeera English (203)
Euronews (204)
Movies (300-399)
Film4 (300)
True Movies (302)
True Movies2 (303)
Movies4Men (304)
Movies4Men2 (306)
Lifestyle (400-499)
Wedding TV (402)
Overseas Property Channel (411)
Men and Motors (450)
Music (500-599)
Chartshow TV (500)
The Vault (501)
Scuzz (502)
Bubble Hits (503)
B4U Music (504)
Children (600-649)
CBBC (600)
CBeebies (601)
CiTV (602)
POP (603)
POPGirl (604)
Tiny POP(605)
Special Interest (650-699)
Teachers TV (650)
Radio (700-799)
BBC Radio 1 (700)
1Xtra BBC (701)
BBC Radio 2 (702)
BBC Radio 3 (703)
BBC Radio 4 FM (704)
BBC Radio 4 LW (705)
BBC Radio Five Live (706)
BBC Radio Five Live Sports Extra (707)
BBC 6 Music (708)
BBC 7 (709)
BBC Asian Network (710)
BBC World Service (711)
BBC Radio Scotland (712)
BBC Radio nan Gaidheal (713)
BBC Radio Wales (714)
BBC Radio Cymru (715)
BBC Radio Ulster (716)
BBC London 94.9 (718)
Shopping (800-849)
QVC (800)
Price Drop TV (801)
Bid TV (802)
Pitch TV (803)
JML Lifestyle (810)
Interactive (900-949)
BBCi
Regional (950-999) also accessible via BBC One/BBC Two
BBC One London (950)
BBC One Channel Islands (951)
BBC One East (W) (954)
BBC One Northern Ireland (957)
BBC One Scotland (960)
BBC One Wales (964)
BBC Two England (968)
BBC Two Northern Ireland (969)
BBC Two Scotland (970)
BBC Two Wales (971)
ITV regionals accessed via ITV1 London (not listed separately)
Ulster
STV Scottish East
STV Scottish West
ITV1 Wales
ITV1 Border England
ITV1 Central West
ITV1 Granada
ITV1 Anglia East
Channel TV
STV Grampian North
Client Reading:
HDTV Channels Shut Down: A Sign Of Things To Come?
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05.02.08
Posted in Uncategorized at 11:28 am by David Mercer
Much hype in the last 24 hours about yet another new IP video venture. Sezmi, formerly known as Building-B, has received $17.5 million in funding from venture capital firms and includes prominent engineers Buno Pati and Phil Wiser (formerly of Sony) as its founders. It hasn’t disclosed where its initial trials are taking place, nor who its broadband service provider partners are, but is now at least public about its intended offer.
However the company tries to spin it, Sezmi’s new service is pretty much a reiteration of many previous attempts to use digital terrestrial television to compete with cable network providers like Comcast. Predecessors have included USDTV, Geocast and iBlast, and the most recent, Moviebeam, gave up in December last year after attracting a paltry 1800 subscribers.
All these services have tried, one way or another, to use capacity in the digital TV broadcast spectrum to increase the range of programming and choice and offer an alternative to cable TV. As with Moviebeam, Sezmi will use a DVR set-top box to store programmes and give viewers a quasi-VOD experience through an integrated program guide. And it’s certainly an impressive DVR – the 1TB hard drive could store 1000 hours (42 days) of video depending on quality settings.
Unlike Moviebeam, Sezmi will also use a broadband connection to download programmes, alongside the over-the-air broadcast signal. And it’s the broadband part that Sezmi claims makes it TV 2.0. It suggests that it will partner with broadband service providers, while at the same time claiming that infrastructure costs are low. Given that BSPs are moaning about the cost of transporting rapidly growing mountains of IP video, I suspect that Sezmi’s position on infrastructure costs may fall on deaf ears in the telco community.
What Sezmi is doing, of course, is trying to replicate what is already happening in Europe, where telcos (eg BT Vision) are combining DTTV with IP video to create a quasi-IPTV service. There are several key differences, however. First, Sezmi is not the telco, and does not provide broadband service, so until it sorts out that part of the equation it’s not clear whether company will be competing as an over-the-top provider or simply enhancing existing managed BSP packages. Second, the US DTV service is simply not as consistent as what’s available in many parts of Europe. Sezmi claims it has developed advanced indoor antennas for the ATSC system, but until we see this perform in the real world we will have to reserve judgment.
Sezmi is targeting non-digital TV customers in the US, so it had better get a move-on. The 10% or so who still really solely on analogue terrestrial will have decided what to do after switchover within the next 12 months, and those using analogue cable will be tempted with new cable offers to switch to digital. One way or another, Sezmi in its current form looks like it will go the way of its not-so-illustrious predecessors.
Client Reading:
US IPTV Forecast and Outlook: $13.7 Billion by 2012
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05.01.08
Posted in Uncategorized at 2:37 pm by David Mercer
We have just published a major piece of research into what amounts to a new digital consumer device segment: Mobile Internet Devices (MIDs). With screen diagonals of between 4” and 6” these touch-screen handheld gadgets fill the gap between web-browsing cellphones (smartphones) and miniature portable computers (for example UMPCs and netbooks). They’re the latest attempt by computing, mobile and consumer electronics companies to create a market for handheld gadgets that give consumers access to the full range of Internet applications they are familiar with on their PCs.
Our estimates indicate that annual revenues will exceed $17 billion by 2014. Global sales in 2008 are expected to reach 1 million units, and will continue to grow at an average annual rate of 102% to reach 69 million units by 2014.
The report also examines the main rivalry in technology platforms between Intel and ARM. ARM dominates the mobile phone industry today, in spite of several attempts by Intel to penetrate this lucrative industry. Intel is hoping that MIDs will finally give it the opportunity to build a significant business outside of its PC market stronghold.
A key part of Intel’s strategy will be its Moorestown system-on-a-chip, but until this arrives in 2009 or 2010 ARM-based vendors will be able to use this window of opportunity to establish market leadership positions. The report concludes that the proven advantages of the ARM ecosystem in mobile devices will eventually outweigh those of the Intel platform and that ARM devices will comprise the majority of MID sales thru 2014.
Client Reading:
Mobile Internet Devices: Heavyweights Do Battle For $17Bn Prize
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04.30.08
Posted in Uncategorized at 6:32 pm by David Mercer
Sky’s quarterly results announcement today focused on steady growth in the total customer base. Given the tough economic background and talk of falling consumer spending it is no mean achievement for the company to add 289,000 new customers in the three months to March, although churn left a position of 56,000 net new adds. The company remains on track to meet its 10m target by the end of 2009.
Given the constant promotion Sky is giving to HDTV, however, its performance here is very disappointing. 43,000 customers added HD service in the quarter, bringing the total to 465,000, or 5% of the total base. Of those 43,000, 24% (10,000) were customers new to Sky. This means that less than half of one per cent of Sky’s customer base at the beginning of the quarter were persuaded to upgrade to the HDTV service, in spite of the constant bombardment of Sky HD advertising and cross-promotion.
Sky touts the addition of more channels during the coming months, but even with 18 to choose from the selection looks poor compared to the hundreds available on standard Sky multi-channel and premium packages. To be fair, it is the best performing HD service in Europe (which doesn’t say much for the rest), and it has also taken HD providers in the US nearly 10 years to make HDTV a success.
Sky’s numbers illustrate how tough it is for service providers to persuade their existing customers to add new services. Even Sky+, which is the fastest growing service in terms of new customers, was added by only 1.7% of existing customers, and only 1.5% added broadband. Multiroom fared even worse than HD in Q3, although it had already built a much larger base of users.
Sky’s position on HD is that it took several years before Sky+ adoption began to grow rapidly, and it expects a similar pattern to emerge with HDTV. But this will be little encouragement to HD broadcasters and indeed set-top box vendors. Until Sky changes its marketing approach (making at least some of its own and partners’ HD channels available at no extra charge, and reducing set-top box costs) it seems that HDTV is set for a long slow journey towards mass adoption.
Client Reading:
HDTV Channels Shut Down: A Sign Of Things To Come?
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04.25.08
Posted in Uncategorized at 12:13 pm by David Mercer
Strategy Analytics’ latest quarterly mobile phone handset data is released today. In spite of fears of a global recession unit sales were up 14% in Q108 v. the same period last year.
Even in a market as large as this (282 million units shipped in 3 months) the rate at which market shares can change is a warning to current leaders not to lose their focus. Motorola’s problems are well documented, but to lose nearly 9 percentage points within 12 months is an indication of the malaise within the company. Its share is now 9.7%, having been nearly 22% as recently as 2006, and both LG and Sony Ericsson are within striking distance of Motorola’s third position.
Samsung has also been a major beneficiary of Motorola’s decline, and is now a clear no. 2 behind Nokia. The Finnish giant maintained its 40% share attained in Q407, although its US performance remains an area of concern.
Client Reading:
Motorola, Sony Ericsson and Apple Lose Global Handset Marketshare in Q1 2008
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04.22.08
Posted in Uncategorized at 5:21 pm by David Mercer
Nokia brought analysts together today to discuss the introduction of Sony BMG as the second major partner in its Comes With Music (CWM) digital music venture. Together with Universal, which was announced previously, Nokia claims this gives it access to more than 60% of the recorded music catalogue. We expect the other two majors to follow in due course.
CWM is clearly an important venture for Nokia as it seeks to expand its services business and support its continued dominance of the handset market. But its significance is potentially even greater for the music industry. CWM represents a radical departure for music majors who have depended for more than a hundred years on a business model based on one-time purchase and permanent “ownership” of individual songs, tracks or compilations (albums). CWM will allow its subscribers to download an unlimited number of music tracks, and those tracks can be kept permanently (“for ever”) by the subscriber for storage on one mobile phone and one PC, whether or not the user still maintains a CWM subscription. The licence (using Windows DRM) can be transferred to a replacement phone and PC as required, although no more than two devices can be supported simultaneously.
Nokia’s plan is to seed the market with CWM-enabled devices, which will be sold with one year’s subscription included in the price. Revenue from these CWM subscriptions will be shared with the music companies on a market share basis. Nokia is still determining which options to offer once the year’s subscription is finished. It would obviously prefer customers to buy a new handset, and it implies that it believes many CWM handset buyers would normally replace their devices after a year in any case.
What is most significant for Sony BMG, Universal and future CWM partners is that they have accepted the removal of the traditional direct revenue relationship between permanent ownership of the individual music track or album and the end user. CWM subscribers will be able to download any and, in theory, all music ever published, and to keep those tracks for ever, but they won’t directly be funding individual pieces of music by making multiple purchase decisions.
This should create quite a different mindset for consumers of recorded music, who now don’t have to worry about extra payments every time they “buy” a new track or album. They should also be able to download with the confidence that their music will always be available in a stored format, although there will doubtless be concerns that the promise of “for ever” will be broken – Sony BMG and Nokia may live to regret this bold assertion. Nevertheless, CWM will surely encourage greater consumption, ie download, of music than in any current digital or physical media model. Whether users actually find the time to listen to all the music they might be tempted to download is another question.
Sony BMG’s President of Global Digital Business, Thomas Hesse, said that the CWM concept clearly resonates with consumers and should help turn the mobile phone into the music device of choice for many consumers. It clearly also helps to remove the need to buy music in the traditional way, so I hope that Sony BMG and Universal have done their sums correctly. The implication from Nokia was that if only a single-percentage share of their handset sales were CWM-enabled, this would already provide a revenue share for music companies that exceeds today’s digital music business.
Beyond this “basic” revenue stream, Sony BMG’s long-term goal is that CWM will encourage the habit of acquiring new music on the mobile phone, ensuring that its share of subscription revenues continues. Time will tell whether the plan works, but this seems to be one of the more promising ventures in the rapidly evolving world of online music.
Client Reading:
Online Music: Global Market Forecast
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04.18.08
Posted in Uncategorized at 11:38 am by David Mercer
It’s early days in the era of high def discs, but already it seems as though the post-DVD transition is having the desired effect for the studios. According to Home Media Magazine’s research, total consumer spending on DVDs and BDs in Q108 rose by 1% compared to the same period in 2007 ($5.51bn v. $5.46bn). Within this total, rental spending declined 1.6% to $2.04bn, while sell-through increased 2.3% to $3.47bn. And within sell-through, DVD sales fell 1.2% but BD was up by 351%. In other words, BD was the only factor that stopped the market declining.
The maturation of the US home video market has been a reality for a few years, as both DVD sales and rental have flattened and even declined slowly. This is less the impact of online, as some would have us believe, than the simple fact that the DVD platform has matured naturally after explosive growth in early part of the decade.
The latest data are remarkable in a couple of ways. First, that we are in the middle of the worst economic downturn the US has seen for many years. Second, that there is any growth at all in an industry that many had suggested is now in permanent decline because of digital streaming, downloads and, of course, piracy. And third, that Blu-ray is already having the positive impact the studios hoped for at such an early stage in the platform’s history. All those scare stories about slow BD player sales and the weak impact of PS3 on movie sales seem to be wide of the mark. As our research showed recently, there will be nearly 30 million homes worldwide with a BD player of some type by the end of this year, and that will already be enough to make a significant impact on the home video market.
As BD begins to have a similar impact in Europe it will be interesting to watch the studios’ approach to digital distribution. While they continue to explore new revenue models, such as the deals with Xbox Live, it seems likely that Blu-ray will dominate their attention for some years to come, just as DVD was beginning to do 10 years ago.
Client Reading:
Xbox Live Boosts Addressable HD Market as Warner Bros Continues Rollout of Day-and-Date Strategy for New Movies
Blu-ray Devices: Forecasting Sales and Ownership
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04.16.08
Posted in Uncategorized at 1:51 pm by David Mercer
Premiere, the biggest pay TV provider in Germany and Austria, yesterday confirmed what had been expected for some time, namely that it will begin using NDS’s Videoguard conditional access (CA) technology this quarter. Videoguard will be used for the company’s digital satellite subscribers. Software will be downloaded to most of the existing set-top boxes and new smart cards distributed. For older boxes that are not suitable for the new system, new smart cards from the existing CA supplier, Nagravision, will be introduced. All new digital satellite set-top boxes will come installed with Videoguard.
Kudelski Group, which owns Nagravision, put a brave face on the news, focusing on the agreement to introduce its new smart cards, and claiming that the contract renewal represented “equivalent overall value”. There can be little doubt, however, that this is a significant reversal for Nagravision, which clearly could not win Premiere’s complete confidence.
News Corp, owner of NDS and 22.7% shareholder in Premiere, will be smiling on both counts, as Premiere’s share price rose on the news, and NDS confirms another major TV service provider as a customer for its CA technology, which now resides in 82.7 million set-top boxes worldwide.
It has never been straightforward analysing the conditional access business, which, like any security business, is, by definition, somewhat secretive. NDS has established itself as the global market leader over the last 20 years, first launching with Sky’s analogue TV service in the UK in 1990. NDS has often emphasised to me that any company claiming that technology alone can solve content security issues is engaging, to put it politely, in wishful thinking. Technology ultimately will always have its limitations. The key is that behind every attempt to break a security system there hides a human being. It is the focus on those people, as much as the technology, that is a big part of NDS’s story.
But it’s not all fun and games for NDS. On the other side of the Atlantic the company is embroiled in a court case with Dish Network, the operator of the DISH digital satellite TV platform. Dish claims that NDS engaged in copyright violation, conspiracy, and piracy in order to damage the company’s business. If the case is proven, damages against NDS could run to hundreds of millions if not billions of dollars.
That prospect for the moment will not give too much concern to Premiere, which would appear to be well on the way to solving its pirate user problem, estimated at 1m boxes, and paving the way towards the faster digital TV growth that Europe’s largest TV market will surely support.
Client Reading:
HDTV Channels Shut Down: A Sign Of Things To Come?
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03.28.08
Posted in Uncategorized at 10:40 pm by David Mercer
In contrast to my assertion that interactive TV was struggling, video search engine Blinkx claims that we are now a nation of interactive TV users. And although Blinkx doesn’t repeat the phrase, the same could presumably be said of the US, where it carried out similar research and found, guess what, very similar results: in the UK, nearly 70% of online adults go online while watching TV; in the US the figure is even higher - 78%.
Now this is clearly not the same version of interactive TV that “interactive TV” companies like OpenTV and NDS like to talk about, or that telcos and cable companies hope will add value to their digital TV services. The two-screen version, however, is certainly successful anecdotally, and this research gives some idea of the scale of media multitasking across the population. Anyone with kids knows they just can’t sit watching TV any more - would that life were so simple! If a wireless laptop is available they’ll have that in front of them, and a mobile phone and games console nearby at the same time. It’s a phenomenon that applies increasingly to all age groups, and it represents another of the many concerns facing the traditional television industry as it struggles to keep its viewers focused on the big screen.
Blinkx’s research is a valuable input, but we should put the findings in some context. The survey looked at online users only, who are certainly in a majority in both the US and the UK, but 25% of households in the US and 36% in the UK are still not connected to the Internet (but presumably do, at least the vast majority, watch TV). So the survey numbers should be re-based to account for this. There is also the issue of frequency. By my calculations based on the Blinkx survey results I estimate that around 25% of all TV viewers in the US are regularly surfing the net while watching TV, and 20% in the UK.
And of most concern to the TV industry is the finding that very few two-screen viewers are using their PC in a way that’s related to what’s on TV. 19% of US respondents and only 15% in the UK are actually searching for content related to what’s on the big screen. So what are they doing? Again, the usual suspects:
- checking email (58% UK, 53% US)
- surfing the web for content that is not related to what they are watching (37% UK, 32% US)
- paying bills (26% UK, 22% US)
- interacting with others (24% UK, 18% US)
- shopping (32% UK, 17% US).
So putting it all together, it seems that around one in five or six TV viewers on both sides of the Atlantic are in fact being at least partially lost to the TV industry (and its advertisers) because much of their attention is on other web-based activities which are not related to the TV programme, even though the TV is switched on. TV broadcasters recognise this implicitly by the fact that they are putting so much energy into finding ways of reaching web users, but the scale of the impact is perhaps not yet fully appreciated.
Of course, the question of attentiveness and how consumers absorb information and messages from different media is too complex for any online survey to investigate fully. TV viewers have always been tempted by distractions of one form or other, and the web is just one of the latest alternatives.
Client Reading:
Digital Disruption: Imminent and Long Term Threats to the Audiovisual Industry
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