07.23.08
Posted in Uncategorized at 9:32 pm by David Mercer
In the very first entry in this blog back in late 2006 I moaned about the tendency ofbroadband service providers to market their services with the term “up to” when offering different “tiers” of service. Well full credit to AT&T for taking the initiative to move away from this misleading practice. While full details have not been announced yet, the telco has confirmed that it plans to begin offering “non-overlapping tiers” rather than the traditional “up to” packages.
In essence AT&T is guaranteeing a minimum level of service, something which is not at all usual in the BSP world. So if a BSP offers a service of “up to” 8Mbps today, in theory there is nothing to stop its service averaging at 1Mbps or less. After all, “up to 8″ can be anywhere from 0 to 8. A tiered approach, however, might offer, say, 5-8Mbps, in which case users would at least know the minimum they could expect.
AT&T’s challenge will be to match the tiers to the technical capabilities of its network. No matter what the technology, all broadband services are inherently unpredictable to a degree, so there will likely still be fine print conditions. Nevertheless, we approve of the company’s initiative and hope all others will follow, driven by commercial forces rather than regulator pressure, which is looking increasingly likely in the UK and elsewhere.
Client Reading:
AT&T’s Tiered Service: Taking A Bite Out of Fraudband?
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07.22.08
Posted in Uncategorized at 5:14 pm by David Mercer
Strategy Analytics’ latest forecasts show just how fast people are adopting connected TV devices. Our research indicates that, by the end of this year, consumers worldwide will own 186 million devices that allow TVs to access web content. While games consoles and set-top boxes dominate the market today, demand for connected flat panel TVs is also set to take off. Sony recently announced a big push on IP-enabled TVs and other devices, and other major CE vendors, while not yet as aggressive, are also moving in this direction.
By “connected TV devices”, we include a number of device segments, including flat panel TVs, DVD and Blu-ray players and recorders, set-top boxes, digital video recorders, digital media adapters and games consoles. We have excluded connected portable and mobile devices, such as handheld games consoles and IP cellphones, as well as PCs and related devices. Some people might aruge that we could also include such products as they can play a role in delivering IP content to TV displays, in which case the adoption rates would be substantially higher.
Games consoles have been the largest connected TV device segment to date, with a forecast of 79 million installed by the end of 2008. Set-top boxes and DVRs are the next major category at the moment, while IP-enabled flat panel TVs are only just beginning to appear.
But that is all set to change over the next five or six years. By 2014 we are projecting an installed base of more than 450 million connected flat panel TVs. Set-top boxes and games consoles will still play an important role, but Blu-ray players and recorders will also be significant IP content gateways by this time, with an installed base of 225 million.
These are impressive numbers, and they focus on the devices people have bought and are using at home. They don’t necessarily reflect what content is actually available or being watched on those devices, and that is clearly a missing link in the web TV phenomenon. All PS3 and Xbox 360 owners will in theory be able to get video content onto those devices over their broadband connection and display it on a TV. How many actually end up doing that is still open to question.
But the message for media companies is clear: millions of TV viewers will soon be ready and waiting for web content. Many business model and relationship issues need to be resolved before web TV content itself becomes widespread. But we are now seeing the emergence of technology platforms that will support a surge in adoption of web-based TV content over the coming few years. Traditional service providers such as cablecos and telcos need to put plans in place to accommodate the impact of these “over-the-top” media device relationships that will increasingly disrupt established models and revenue streams.
Client Reading:
Digital Media Devices Global Market Report
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07.02.08
Posted in Uncategorized at 3:07 pm by David Mercer
We’ve now had a chance to dip into Strategy Analytics’ survey of European digital media users. We’ll be releasing full and detailed results to clients, of course, but here’s a taster to be going on with.
We find a similar pattern across age groups in Europe as in the US, in that younger Internet users are more likely to be watching TV on their PCs, and more likely to be frequent users. But the overall level of PC TV usage in Europe appears to be trending a little higher at present compared to the US, and indeed television viewing on TV sets is also a little lower.
Our survey found that 30% of 15-29 year-olds in Europe claim to watch TV shows or movies on their PCs at least on a weekly basis, with a peak of 35% for 20-24 year-olds. This compares to around 25% of the same age group in the US. As in the US, the frequent usage of web TV tails off significantly in older demographics, with less than 10% of the 40+ group claiming to do this weekly.
Anecdotally we are probably familiar with the idea that students are in the vanguard of adopting emerging internet services, such as the social networking phenomenon I covered recently. This seems to be confirmed in Europe, where, in terms of “occupation”, full-time students are by far the most active viewers of TV shows and movies on PCs. 35% of full-time students claim to do this at least once a week. No other single occupation category comes close; in fact every other group comes in at or below the population average of 17%.
Most of us have been students in a former life, and in the pre-Internet age dubbing vinyl and CDs onto audiocassettes was a common method of alleviating boredom. So there’s no point in pointing the finger at today’s generation. Let’s face it, student life gives most young people more time than they know what to do with, unless you’re desperate to get an Oxbridge First. Add to that the fact that students are more likely to have access to high speed broadband and their own laptops, and it’s no surprise that keeping your social network up-to-speed on what programmes you watched on the Internet last night seems to keep today’s students pretty occupied when they’re not attending lectures and engaging in other, more traditional student pastimes, which incidentally were not the subject of our latest survey…
Client Reading:
Online Video: Global Market Forecast
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Posted in Uncategorized at 2:03 pm by David Mercer
David Gosen, whose rather long-winded title at Microsoft is “VP, Strategic Marketing, Interactive Entertainment Business EMEA” (which means he looks after Xbox 360 in Europe) briefed Strategy Analytics today on announcements Xbox is planning for the upcoming E3. Specific plans for new games titles remain under wraps, but the company is planning significant marketing investment behind the Xbox 360 in European countries, such as Spain and Italy, where the platform is performing less well than in other markets. We can also expect a significant broadening of title genres as Microsoft seeks to target the 360 towards a wider customer base. In addition there will be improvements to the Xbox Live service, also to broaden its appeal and make it more user-friendly. The specifics behind these announcements are quite exciting, so watch out for news at E3 in a couple of weeks’ time.
One key development seems to be behind track, however. At CES in January BT and Microsoft made a big splash by announcing that BT’s BT Vision video-on-demand service (which uses Microsoft’s Mediaroom middleware platform) would be made available on the Xbox 360 platform. At that time the companies indicated that the service would be rolled out in the “middle of 2008”, so given that it’s now July we thought it reasonable to have expected news by now.
David Gosen confirmed to us, however, that there are no announcements currently planned for the innovative service. “Some things take a little longer than planned,” he noted, and told us to stay tuned. Well I suppose to be fair the “middle of 2008” could be extended another month or so, but it doesn’t seem likely anything will be announced any time soon.
We’ve already indicated our doubts concerning strategic positioning around such a service, but it would be surprising if they were significant enough to have stalled the project altogether. More likely are the usual unforeseen technical barriers that inevitably arise when a “world first” of this sort is planned. Even so, it’s probably better that we don’t put a note in our Jan 09 diaries to ask for the next BT Vision/Xbox update; that way we’ll be pleasantly surprised when it eventually arrives.
Client Reading:
Global IPTV Forecast: Homes, Users and Subscribers
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07.01.08
Posted in Uncategorized at 1:56 pm by David Mercer
Strategy Analytics has been studying results from its latest round of user research. We released highlights at the recent Digital Hollywood event in the US. The presentation focused on the impact of web video and television on traditional TV, and related to the findings of our US survey. Research from Europe will be released separately in due course. Global revenues from online video and TV are estimated to have reached $2bn in 2007.
Our survey finds that younger age groups are already watching significantly less television than older demographics, in the sense of “watching TV shows and movies on a TV set”. 64% of 15-19 year olds watch TV in this traditional fashion on a weekly basis, which means that more than a third do not. This compares to the average of 78%, and 85% of 40-44 year-olds, who watch TV at least once a week.
We also investigated viewing of the same type of content – “TV shows and movies” – on PCs. Not surprisingly younger age groups are more likely to engage in this activity on a regular basis, with around a quarter of those aged between 15 and 29 claiming to do this at least on a weekly basis. The average across all age groups is 16%, and most older demographics are much less frequent “PC TV” users.
More than half of US Internet users have now watched TV shows or movies from a broadcast network website, ie the equivalent to the BBC’s iPlayer in the UK. But most of these web TV users are still not active on a regular basis: only 7% claim to use a broadcaster’s website for video streaming at least weekly.
Perhaps the demographic findings are not too surprising. We expect younger Internet users to be in the vanguard of many emerging trends, and the fact that they also watch television less frequently than their elders has also been documented previously. The inevitable consequence of these two indicators is that a growing proportion of younger people are likely to find television programming on the Internet rather than through their “TV” or the associated “service provider”, ie cable or satellite, DirecTV or BskyB, a trend I have highlighted. Or to put it another way, TV companies are increasingly likely to find younger viewers through Internet distribution than through traditional channels. The tipping point when younger people watch more TV online than “on TV” may not be far off. John Malone may not be happy but TV networks have little choice but to go with the flow.
Client Reading:
Online Video: Global Market Forecast
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06.27.08
Posted in Uncategorized at 6:05 pm by David Mercer
As I have pointed out recently, the publicity surrounding HD broadcasting in the UK, whether it’s Sky HD, Freesat or DTT’s future plans, has not been matched by the pace of consumer adoption. This is in sharp contrast to the experience of our Norwegian neighbours across the North Sea, where the decision by pay TV operator Canal Digital to remove the additional HD subscription fee has led to a surge in HDTV viewing in recent months.
While Sky has just reduced the fee for a new HD set-top box, it still charges viewers an additional £10 a month to watch the limited number of HD channels available, and that depends on what premium packages customers pay for. As a result, only 5% of Sky viewers can currently access HD channels. By contrast, 25% of Norwegian customers of Canal Digital are now watching HD programmes, according to Strategy Analytics’ estimates. On a similar basis, Sky could have reached more than 2 million HD viewers by now, four times its actual level.
The time will come sooner or later when the HD fee is removed, at least for some channels. HD broadcasters not owned by Sky, such as Discovery and National Geographic, must be frustrated that their audiences are not building more rapidly and will surely increase the pressure for a change in policy before too long, as will Freesat and Virgin Media as they slowly but surely improve their HD offers.
Client Reading:
High Definition TV, Video and Digital Media Devices: Global Market Forecast
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06.26.08
Posted in Uncategorized at 5:38 pm by David Mercer
Social network services have boomed in the last couple of years, led by now well-known brands such as Facebook, Myspace and Bebo. I profess to finding the whole thing a little bemusing, but that’s doubtless down to my unsuitable demographic. Perhaps if I’d been born 20 years later I’d now be spending hours every day updating my social pages and checking out the latest activities of “friends” I never thought I had or needed.
Strategy Analytics’ own survey data confirms that I’m in the wrong age group to appreciate the value of these services. Of online users across the US and Europe, 63% of 15-24 year-olds and 52% of 25-34s use a social network. Once we reach middle age the proportion drops below a third: 30% of 35-44s and 25% of 45-54s. Only 15% of those lucky enough to have reached or be approaching retirement (55 and over) have discovered the delights of MySpace and Facebook.
In actual fact, as an occasional user of Linked-in I do classify as a “user”. I did also register with Facebook and receive invitations to “connect” from “friends” I have never heard of. I suppose grumpy old men just aren’t cut out for all this friendship. It’s good to know today’s youngsters have so many options ahead of them…
Other findings from our study: UK internauts are most likely to maintain a social network, with just over half claiming to be users. The proportion in the US is 44%, and 37% in Italy, but in France and Germany only just over 20% of internet users are networking socially.
Our findings suggest that social networks are attracting huge daily audiences. In the US more than 30 million people are using a service every day, while in the UK the number is more than 8 million. That’s a lot of young people being pulled away from more traditional pursuits like watching TV. In spite of that, 69% of 15-24 year olds still claim to watch TV (ie TV shows or movies on the TV set) on a weekly basis, compared to 74% of the population on average. But the term “watch” should probably be applied loosely: anecdotally it is clear more and more people are tapping away on PC keyboards or cellphones while the TV show runs on the big screen ten feet away.
Client Reading:
Social Media: Brits Lead in Social Network Usage
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06.04.08
Posted in Uncategorized at 12:58 pm by David Mercer
We have always cited the cable industry as the archetypal vertical or closed content-to-device business model. Ever since the US cable network providers (MSOs) began to offer paid-for services and secure content using set-top boxes, they have steadily increased their hold on the television content and device market. Initially with analogue premium TV boxes, and more recently with digital cable boxes, a growing proportion of US TV viewers use a device provided by their cable operator as the gateway to all their television programming. And as the cable industry has added more advanced features to those boxes, such as DVRs and VOD, these have also been controlled by the set-top box, leaving the “TV set” as essentially a dumb terminal.
The satellite TV industry followed a similar model in both the US and Europe. Cable in Europe, however, has a somewhat different history, since its early development was encouraged by government subsidy in several countries. But the US model has also found its way into several European countries, notably the UK, and as digitisation of cable has accelerated, European cable operators have also moved increasingly towards a set-top box approach.
Manufacturers of TVs have been concerned at these trends for many years, realising that the “intelligence” of their devices was being bypassed and ignored as many viewers used set-top boxes. In spite of many attempts over the years to encourage the integration of various cable or satellite technologies into TVs, such as digital tuners or smart card slots, these have largely failed. The challenges for TV manufacturers have been numerous, not least the additional cost of these features and overcoming the obsolescence argument, that viewers may want to change cable or satellite providers or services without having to change their TV set.
There has also been an argument that it has not been in the strategic interests of cable or satellite providers to allow integration of what are essentially their network technologies into devices that are available in an open, horizontal market. Having fought hard to win new customers, service providers should not be inclined to make it easy for those customers to move to a different supplier, and forcing them to use a proprietary device is one way of discouraging churn.
Recent developments suggest that the cable industry at least is now ready to adopt a much more open stance towards the CE industry. In the US, Sony has signed an important agreement with the five largest cable operators (Comcast, Time Warner Cable, Cox Communications, Charter Communications, Cablevision and Bright House Networks) to use Tru2way technology in its TV sets and other CE devices. This will allow cable customers to use cable services, such as VOD and interactive guides, on these devices without the need for a set-top box. Given the support for Tru2way by other major CE companies, there seems a genuine possibility that it will become widely deployed over the coming years, although the cable operators still have to demonstrate that they are wholeheartedly behind the initiative by actively promoting the technology.
In Europe, meanwhile, some of the cable industry’s largest operators are also moving towards endorsement of a more open system. CE companies Sony, Panasonic, Samsung and Philips have led the initiative to develop a platform known as CI+ (Common Interface Plus). German cable operators, including the largest, Kabel Deutschland, have given their support, and others are expected to follow suit. CI+ will allow users to access premium and advanced cable services without the need for a set-top box. CI+ devices will incorporate a smart card slot which will accept conditional access modules provided by cable operators.
So is this a sign that cable operators are accepting that the world is moving on? Or will both Tru2way and CI+ be sucked into the black hole of promising but failed open cable technology initiatives? My bet is that this time round things may really be changing. And the difference now is that cable recognises that its long-term future lies more in broadband than in the traditional pay television market.
The TV set-top box has been the gateway to content for many years, but as people consumer more content on the web some of that role is increasingly shifting towards other devices such as broadband gateways, home PCs and TV sets. For sure, the set-top box is not going to disappear overnight. It will be some years before both Tru2way and CI+ are widely enough deployed to have a significant impact. And cable companies and content providers may still decide to promote set-top boxes if the new technologies fail to support future services or fail due to content security issues. But one way or another, the cable industry is getting ready for a major transition that will have widespread implications for device manufacturers and content owners alike.
Client Reading:
Global Broadband Forecast 2008 - 2012
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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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