David Gardner at TechWeb has this interesting write-up of a unique community Wi-Fi initiative in Cincinnati called Lily Pad. Lily Pad is a partnership among the City of Cincinnati, Time Warner Cable, and the Lily Pad non-profit organization to bring free Wi-Fi to the Ohio city.
The initiative has already resulted in the establishment of more than 20 “pads” or “pods” across the city, with each pod hosting multiple hotspots. Another 55 pods are planned.
What makes Lily Pad unique is that, first, the entire initiative is funded by contributors and run by volunteers, so no municipal funds are going into the project. More interestingly, incumbent cable operator Time Warner is engineering Lily Pad and is a big sponsor of the effort.
It’s a smart move on Time Warner’s part because it’s good PR and some company sooner or later would be called upon to build Wi-Fi in Cincinnati; Time Warner now won’t have to fight a competitor or argue over the merits of muni-backed broadband. Or, maybe Time Warner Cable is simply ahead of the game in terms of the cable industry’s CableRoam idea.
Posted by Cynthia Brumfield at 11:28 PM | Print | Comments (0)Wall Street is like a burn victim when it comes to Google. If Google so much as flutters the breeze, investors shrink back from the search giant. The latest episode: CFO George Reyes, speaking at a Merrill Lynch conference, said that advertising revenue growth rates at the company are slowing.
Not only did this statement — one that Google makes all the time — send investors fleeing from the room to sell off their GOOG shares, but it also sent the blogosphere into a tizzy trying to decipher what Reyes said and what he really meant and whether he should have said it. Henry Blodget, the formerly disgraced but now seemingly respectable analyst, must have spent the better part of the day tracking down what Reyes said and divining his words for special meaning.
Mathew Ingram, a canny Canadian observer, took Google to task for saying something so inflammatory.
[W]hen your stock is selling for more than 80 times earnings, and you have a market value of over $110-billion (U.S.), don’t use the words “growth is slowing.” Ever. Why? Because then your share price will get creamed, as Google’s did on Tuesday, when chief financial officer George Reyes did exactly that at a Merrill Lynch conference on Internet advertising (which accounts for about 90 per cent of Google’s revenue).
Scott Patterson, writing in the Wall Street Journal’s new Market Beat section, deconstructs whether Reyes properly used the “law of large numbers” analogy. (When asked why growth was slowing, Reyes gave Google’s stock answer — “the law of large numbers” — by which he meant the bigger something gets, percentage gains necessarily slow down. It’s just a mathematical thing.)
All of this intense examination is just utterly ridiculous given that any casual reader of Google’s SEC filings will find some variation of Reyes’ statement plastered all over the documents. As an example, it took me all of 30 seconds to find the following statement in Google’s Q3 05 10-Q:
However, our revenue growth rate has generally declined over time, and we expect it will continue to do so as a result of increasing competition and the difficulty of maintaining growth rates as our revenues increase to higher levels.
I’m not saying that Google is a good investment — obviously it’s a volatile stock. I’m saying that Google is a lightning rod for some kind of weird investor manic-depressive emotions and any little thing, whether valid or not, can set off a sell-off or a rally.
Posted by Cynthia Brumfield at 4:21 PM | Print | Comments (0)
A bill that sets state-wide franchising standards in Virginia was approved yesterday by the House of Delegates following its passage by the Senate. Unlike a comparable state-wide franchising bill passed in Texas, the Virginia legislation isn’t technically a state-wide franchise; instead it guarantees franchise rights to video entrants if they meet certain obligations.
New video entrants can decided to go through traditional franchising negotiations, but if after 45 days those talks don’t bear fruit, can opt for a “ordinance” franchise. Under that latter option, the video entrant can enter the market within 75 days if it agrees to certain build-out and fee and channel commitments and the muncipality must accept the entrant.
The final version of the legislation represented a compromise between dueling cable and telco interests — cable companies are happy about the obligations imposed on the entrant, including 100% build-out requirements, while phone companies are seemingly happy with the fast-track franchising process.
The bill has been sent to Governor Tim Kaine for his signature, and if he signs (which seems a certainty), the legislation will take effect July 1.
Update: Cable clearly likes the bill. NCTA President Kyle McSlarrow said in a statement issued this afternoon
The Virginia legislation is a step in the right direction. While it’s not perfect, we’re pleased the legislation recognizes the importance of localism, treats all providers fairly by maintaining a level playing field, and facilitates speedy competitive entry in a way that benefits communities, service providers, and all those we serve.Posted by Cynthia Brumfield at 2:54 PM | Print | Comments (0)
Well, after all the drama leading up to Apple’s “fun” event today, the company unveiled what many had predicted (of course there were a lot of predictions): an Apple boombox. Or as the company calls it, the Apple iPod Hi-Fi.
Priced at $349, the Hi-Fi is a portable device (17.0” x 6.6” x 6.9”) that Apple says provides superior sound through three speaker cones designed to deliver just the right balance of sound across the frequency spectrum. It has a docking station for the iPod itself (and although Apple isn’t promoting this, the docking station works with other MP3 players) and serves as a charger for the iPod.
The boombox may be a little bit of a let-down for the overheated press that was awaiting movies-on-iTunes or a big video iPod. But rest assured: the iPod Hi-Fi will make a mint for Apple.
Posted by Cynthia Brumfield at 2:04 PM | Print | Comments (0)
The National Journal’s David Hatch has this dishy piece on how much telecom and technology lobbying groups spent during the first half of 2005. According to the nonpartisan PoliticalMoneyLine, telecom and technology companies spent $154.2 million on federal lobbying during 1H2005 (a figure that no doubt escalated during 2H2005, and is climbing still now).
That’s a rise of $8 million rise over 2H2004 and a $14 million rise over the 1H2004. Driving this growth, of course, is the pending Telecom Act rewrite.
The biggest spender was US Telecom, the trade association for the major incumbent telcos, followed by Microsoft and the NAB.
The biggest communications spender for all of 2005 was the U.S. Telecom Association, whose members include the regional Bell companies. It devoted $16.8 million to Washington lobbying. Microsoft ranked second ($8.7 million), and the National Association of Manufacturers was third ($8.3 million). Other heavy hitters in 2005 were: National Association of Broadcasters, $7.8 million; Motorola, $7.6 million; BellSouth, $7.4 million; IBM, $7.2 million; Cingular Wireless, $7.1 million; National Cable and Telecommunications Association, $7 million; and Comcast and Time Warner, which each spent about $4 million.
Proving the old adage (at least in DC) that tech companies are lame lobbyists, Silicon Valley powerhouses were pathetic spenders during 1H2005, with Yahoo spending only $800,000, Amazon.com spending $460,000, eBay spending $400,000 and Google spending only $220,000.
Posted by Cynthia Brumfield at 1:46 PM | Print | Comments (0)Google, apparently, is testing out video advertising, a natural step for the online ad giant that we predicted over at IP Media Monitor back in December. Several sightings indicated that a flash-based Google video ad appeared on the entertainment web site “The Superficial.” (The ad is no longer there but you can see a sample of it at InsideGoogle.)
Nathan Weinberg at Inside Google praises the effort, particularly the fact that the ads actually have to be triggered to play.
Google has done a perfect job with its video ad. Any ad that doesn’t play instantly is no problem with me. Hell, it isn’t even animated. The video resembles a Google Video, so any site which posts videos should love these; they’ll get plenty of playtime. I’m very happy with the way Google has done these, and I wish the animated ads were half as good.Posted by Cynthia Brumfield at 10:38 AM | Print | Comments (0)
St. Louis, MO-based cable operator Charter Communications issued its Q4 05 earnings this morning, and as has been typical of this troubled company, results were decidedly mediocre. Certainly one factor affecting Charter is stepped-up competition from DBS and telcos, although according to CEO Neil Smit, Charter hasn’t been hard hit by Verizon’s FiOs service in its Keller, TX market.
Verizon’s first multichannel video service over its FTTP-based platform kicked off in Keller last year and the telco maintains it has achieved 20% penetration since launch. If that’s the case, Smit says, Charter isn’t feeling it.
“We’ve lost 4% [of our subscribers] in Keller,” Smit said during Charter’s earnings call. “The other sixteen points aren’t coming from us.”
Smit also dissed Verizon’s FiOs initiative as overly expensive. “They spent $2 million to get 2,000 subs,” he said, which translates into a subscriber acquisition cost of $500 per customer, “a lot higher than us.”
Despite anecdotal tales of Charter slashing service prices once FiOs kicked off in Keller, Smit said that Charter has never lowered prices to compete with Verizon. “We did not do any price adjustments for the Verizon entry. We adjusted promotional prices for DSL competition a year before Verizon entered the market.”
Smit said that Charter hasn’t yet launched voice service in Keller, but when it does, sometime in March, the competitive dynamics in that market could change because both competitors will then be offering a three-product bundle.
| Charter Operational Statistics | ||
| Subscribers and Penetration | 4Q04 | 4Q05 |
| Homes Passed | 12,085,900 | 12,519,300 |
| Basic subscribers | 5,991,500 | 5,884,500 |
| Basic penetration | 50% | 47% |
| Monthly Analog Rev./Sub. | $ 37.52 | $ 37.66 |
| Digital Cable | 4Q04 | 4Q05 |
| Digital customers | 2,674,700 | 2,796,600 |
| Quarterly net sub adds | (14,200) | 47,200 |
| Digital penetration of total subs | 44% | 48% |
| Revenue/Digital Sub./Mo. | $ 23.00 | 25.45 |
| High-Speed Data | 4Q04 | 4Q05 |
| HSD customers | 1,884,000 | 2,196,400 |
| Quarterly net sub adds | 64,500 | 76,400 |
| HSD penetration of total HP | 15.6% | 17.5% |
| Revenue/HSD Sub./Mo. | 36.37 | 36.6 |
| Telephony | 4Q04 | 4Q05 |
| Telephony homes passed | 750,000 | 2,918,000 |
| Telephony customers | 45,400 | 121,500 |
| Quarterly net sub adds | 5,200 | 31,600 |
| Penetration of telephony HP | 6.1% | 4.2% |
| Telephone Rev./Tel. Sub./Mo. | 41.95 | 39.57 |
| Bundled Customers | 4Q04 | 4Q05 |
| Total Bundled Customers | 1,659,700 | 1,944,800 |
In terms of Charter’s actual performance, the company limped along during the quarter, posting continued losses in basic subscribers, tepid growth in digital subscriptions, moderate growth in high-speed data customers and decent gains in voice customers.
On the voice front, Charter added 31,600 net new voice customers, a record quarterly jump for the operator, ending 2005 with 121,500 total voice customers. At the same time, Charter continued to accelerate its VoIP build-outs, pushing the technology to 2.91 million homes by year-end.
Posted by Cynthia Brumfield at 10:12 AM | Print | Comments (1)The nation’s largest cable operator, Comcast, and indie film company IFC Entertainment announced today a deal under which films offered by IFC will be available via Comcast’s On-Demand service on the same day as they are released in theaters, propelling the nascent trend of collapsing movie distribution windows.
Starting in March, “IFC in Theaters,” a new indie film service debuted at Sundance last month, will be available on Comcast’s On-Demand menu, with films priced at $5.99/each. Customers will be able to order up to five of these films per month.
Among the films that will be offered on-demand are CSA: The Confederate States of America, executive produced by Spike Lee; American Gun, starring Donald Sutherland, Forest Whitaker, and Marcia Gay Harden; Russian Dolls, starring Audrey Tautou; and Sorry, Haters, starring Robin Wright Penn and Sandra Oh.
Despite theater owner opposition to “day and date” release of theatrical films on other media, Comcast and IFC Films say that this simultaneous release of films is good for theatrical films and filmmakers. IFC Entertainment President Jonathan Sehring said in a statement:
IFC in Theaters is enabling independent filmmakers to reach a wider audience in a much more economical manner. The local cinema will always be the first home for film to many film lovers. IFC has always strived to provide independent filmmakers with a strong voice and to help expand the audience of independent film. Now IFC and Comcast will provide independent films with a unique opportunity to extend and expand beyond traditional distribution means.
In fact, some of the films that will be available both in theaters and on-demand haven’t received theatrical distribution yet — I Am A Sex Addict was the 2005 Gotham Award winner for Best Film Not Playing at a Theater Near You and Three Times, which was named 2005’s Best Undistributed Film by the Village Voice’s National Critics Poll.
IFC Films is owned by Cablevision Systems-backed programming company Rainbow Media.
Posted by Cynthia Brumfield at 9:30 AM | Print | Comments (0)
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