Although cable operators aren’t in favor of network neutrality regulations, they are so much more sophisticated and reasoned in their position on the issue than the phone companies are. Case in point: Time Warner Cable CEO Glenn Britt, who gave a talk today at CableLabs’ Media event.
Britt was asked about whether the Congress and the FCC are equipped to deal with technologically difficult public policy matters, such as net neutrality. Britt said “there is certainly a lot of expertise down there but they’re also dealing with vast subject areas.”
“It’s got to be horribly confusing. I think in the case of the Internet it’s moving so quickly..it’s really hard to keep up with.”
One point he raised in arguing against network neutrality reflects a sophisticated view of the Internet and the challenge the government faces in trying to craft network access rules. Britt said that the Internet is not a single network, but rather a collection of networks, which makes the task of crafting regulations all that more difficult.
I think there is a tendency to rely on notions that date back to the old Bell system that this is a unified network that is centrally managed and of course the Internet is not that. It is the antithesis of that.Posted by Cynthia Brumfield at 2:26 PM | Print | Comments (0)
Brian Roberts, CEO of the nation’s top cable company Comcast, is one savvy, intelligent and capable media executive who almost always says smart things. Over the past year, however, with cable on the defensive and Wall Street dissing the industry, I had the impression, listening to him at investor events and trade shows, that he was a little off-message and uncertain.
Having just listened to his presentation at CableLabs’ Media Day, I think he’s back in fine form. Maybe it’s because Wall Street is taking a shine to cable again, or maybe it’s because of the CableLabs milieu, but Roberts demonstrated that he’s an in-tune steward of Comcast’s technological course.
Roberts laid out Comcast’s plan for reclaiming analog spectrum and boosting system capacity, adding that the future use of that bandwidth may represent a radical departure from the current concept of television, namely that the concept of a TV “channel” may be dying.
“Should you be architecting everything for channels or should you be planning for on-demand or bandwidth on-demand?” he asked. Clearly Comcast is putting its bets on VOD. “If you could say I have 100 high-def movies whenever you want it and five years that’s 1,000 or more…well cable can do that.”
As he has said in other venues, Roberts thinks that voice service is not simply talking on the telephone, a bit of a big-picture mysterious locution that cable operators use when describing their work with Sprint on mobile applications. “I think voice is an application off of a broadband world that is not yet clear to me what it is,” he said.
Roberts is also hepped up now on moving the industry’s OCAP (Open Cable Applications Platform) initiative forward — the prospect of building a common interactive TV platform will yield enormous innovation. There will be “one architecture across all the various boxes will allow us to have a ubiquitous language to have us develop on from this day forward,” he said. “We’ve been talking about this for too long and we don’t have it in place.”
One idea that seems to be a curve-ball for cable operators is place-shifting. They don’t know quite what to make of it, and Roberts is no exception among cable leaders in his hesitancy to embrace the new technology.
Comcast is studying place-shifting, but there are more important, more lucrative short-term priorities. “We’re not going to have millions of people pay us $40 per month to place-shift. At the conceptual level, I think you could make the case that place-shifting within the house is more important,” Roberts said.
Posted by Cynthia Brumfield at 1:32 PM | Print | Comments (0)
Vonage is set to go public today and the press couldn’t be more…doubtful? pessismistic? downright dismissive? This piece by the New York Times’ Ken Belson and Matt Richtel starts off with a story about a customer who chose Time Warner’s VoIP service over that offered by Vonage and then proceeds to cast doubt on the company’s prospects.
Om says that “seldom have more doubts been raised about any company going public.” Mark Evans has a good round-up of the naysayers here.
My favorite warning about the viability of Vonage’s IPO came yesterday from Pali Research’s Richard Greenfield whose report on the IPO was littered with dismal section headers such as “Why Would We Not Buy Vonage Shares Within The Current Range Of $16-$18” and “Loyalty Unlikely To Maintain ARPU – Vonage Subs Switched For Price Before.”
Bottom-line for Greenfield: Don’t pay more than $10/share for Vonage (even though the company is asking $16 to $18 per share).
We believe Vonage will have difficultly maintaining its current price point (as it needs to maintain a significant price advantage), with churn and SAC likely to move higher as cable operators prove to be more formidable competitors (as well as new software-based VoIP applications such as Skype).Posted by Cynthia Brumfield at 8:48 AM | Print | Comments (0)
Back in December, Mitch and I wrote a report on Google (part of a series on Television 2.0 Leaders) where we took a bold leap and suggested that Google’s best next step would be to start selling video advertising. Sure enough, the search giant will do precisely that.
On the heels of AOL’s acquisition of Lighteningcast, Google announced yesterday it will start selling video ads on its Adsense partners’ websites. And as it does with text advertising, Google will sell on a bid basis to contextually relevant sites.
Until now, most sites and networks that sell video advertising have largely negotiated prices one on one with advertisers. Google, by contrast, wants to bring its highly automated auction system to video advertising. Indeed, it will run a single auction for text, graphical and video ads. Advertisers, moreover, can bid either as a price for each time a user clicks on the ad to visit their site or a fixed fee to show the ad to 1,000 users.
Google’s computers will evaluate all of the bids and decide which one will end up making the most money. At the advertiser’s discretion, ads can be placed on pages with content relating to specific keywords, or on sites of their choice.
In our report, we said that Google could price these ads either on a click-through or a per impression basis, the way traditional video advertising is sold, although it seems likely that ads will be prices on a CPM (cost per thousand) impression. Using a range of Internet video advertising prices, we also said that Google could expect to charge from $5/CPM up to $50/CPM.
Using these assumptions and reasonable levels of impressions, we concluded that video advertising is worth to Google anywhere from an additional $58 million in incremental revenue during the first year of sales up to $472 million. And that’s just year one.
| Google Annual Ad Revenues Under Different Scenarios ($000s) | ||
| $ Change | ||
| No Video Ads | $ 8,758,616 | na |
| Video Ads - CPM@$5 | $ 8,817,578 | $ 58,962 |
| Video Ads - CPM@$10 | $ 8,876,541 | $ 117,924 |
| Video Ads - CPM@$20 | $ 8,994,465 | $ 235,848 |
| Video Ads - CPM@$30 | $ 9,112,389 | $ 353,773 |
| Video Ads - CPM@$40 | $ 9,230,313 | $ 412,735 |
| Video Ads - CPM@$50 | $ 9,348,237 | $ 471,697 |
| Source: Emerging Media Dynamics, Inc. analysis © 2005. | ||
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