Time Warner’s CEO Dick Parsons said today that his company’s movie studios will debut download-to-burn movies next year, marking a big step in the evolution of home video distribution. Speaking at Credit Suisse’s Media and Telecom Week conference, Parsons said “I think you’ll see us move to some kind of download to burn next year,” adding that this development is a win-win-win.
It’s a win for studios because they can cut down on the distribution costs of DVDs, it’s a win for retailers because they will be able to sell more product and it’s a win for consumers because they’ll be able to purchase what they want and the way they want it, Parsons said.
More intriguingly, Parsons hinted at some kind of possible arrangement where films are distributed over the Internet on a subscription basis through Time Warner’s HBO arm. Although he carefully avoided specifics, Parsons said “we’re looking at ways of working with studios where you can have some kind of subscription distribution format” of movies over the Internet because as it stands today, “essentially HBO has all those rights” to digital distribution of movies.
Hmm…not sure what he means, but it’s not likely that HBO has the Internet distribution rights to films produced by other studios. In any event, it’s an intriguing possibility, one that might also yield substantial incremental revenues if customers were also given the option of burning to DVD the films distributed over this subscription channel. (Imagine watching a film on HBO and being given the option to immediately buy the film for, say, an incremental $5 to $10. You can’t do that today, but you could do something like this on the Internet.)
Regarding the ouster of AOL’s Jon Miller, Parsons praised the departed executive as “a good strong guy who stabilized that operation.” Nonetheless, it’s clear that he thinks Randy Falco, Miller’s replacement, is a better fit for the company. “We needed a leader who could bring superior execution…we were also looking for somebody who was our kind of guy…Somebody who could sit on our team,” Parsons said. “I think based on what I know about Randy you’ve got a winner here.”
Time Warner’s cable business is in superior shape, Parsons said, with little to fear from telco competition. In a sly gambit, Parsons damned with feint praise Verizon and AT&T for their “rational” behavior in those markets where the telcos have launched video services over upgraded plant.
The rational behavior that Parsons refers to are the price increases implemented by Verizon in certain markets where it has launched its FiOS TV service. “Are the phone companies really going to make the kind of investment that’s required to stay competitive?,” Parsons asked. “The answer is I don’t know.”
“Where they have done so, they’re behaving rationally. They just raised the prices. They’re seeking to get some return on that investment which means they’re pricing north of where the cable market is.”
Posted by Cynthia Brumfield at 3:11 PM | Print | Comments (0)AT&T’s CFO Rick Lindner says that everything is on track for the company’s controversial IPTV service, U-verse. Speaking this morning at Credit Suisse’s Media and Telecom Conference Lindner said “we’re at the point where the pieces have come together for U-verse,” which relies on turbo-charged DSL connections to deliver multichannel video services along with high-speed Internet access and ultimately VoIP services.
“The Microsoft software, the new set-top boxes, the operating support systems, we’re ready now to go forward and launch additional markets and we’re ready to expand the markets where we have launched,” Lindner said. AT&T has already rolled out U-verse in San Antonio and Houston and plan to light up eleven more markets this month.
But skeptics have doubted whether the DSL-based architecture is robust enought to handle the bandwidth needed for video, not to mention high-definition video, plus very high-speed data services and VoIP. Lindner tried to dispel those doubts, expressed by the Credit Suisse analyst moderating his talk.
“We’re pleased with the bandwidth we’re getting over copper. At my house we’re getting 55 Mbps,” with the typical throughput being 25 Mbps. AT&T plans to implement pair-bonding, which doubles the DSL capacity, in areas where more bandwidth is needed.
Lindner also said that the company-wide deployment of AT&T’s HomeZone service, which is a hybrid between DBS video services and DSL high-speed options, shouldn’t be interpreted as a sign that U-verse won’t work in most AT&T markets. “We want to have a video product we can launch across our footprint and we want a video product that we can launch now,” Lindner said, instead of waiting for the protracted build-out of U-verse plant.
Lindner shed little light on the most burning question regarding AT&T: what’s the deal with the FCC’s delay in approving AT&T’s merger with BellSouth? Lindner did say that despite Chairman Kevin Martin’s push to remove the recusal of fellow Republican Robert McDowell, which would break the logjam holding up the FCC’s approval of the deal, the merger may not pass this final approval hurdle until January. The FCC is meeting again on December 20 and some observers have speculated that the deal would finally get approved on that date.
As an aside, McDowell himself was slated to speak at the Credit Suisse conference at 10:30 this morning, but for the life of me I can find no public webcast of McDowell’s talk, an odd thing for a government official.
Posted by Cynthia Brumfield at 12:16 PM | Print | Comments (0)
The U.N’s ITU is holding its big annual meeting, ITU Telecom World 2006, in Hong Kong this week and from the sounds of it the various government officials speaking at the event are talking in shades of gray…or at the least are giving mixed messages. The New York Times’ Victoria Shannon has this article today about how China’s government officials are reluctant to commit to a timetable that would bring 3G mobile services to the underserved country.
Tech vendors are the most eager to see the Chinese government select a standard and adopt an approach for advanced mobile wireless service. The vast Chinese market would be a motherload of riches once the build-out begins.
Public Integrity’s Drew Clark (formerly of National Journal fame) has a more interesting piece about how government regulators from around the globe differ on their approaches to telecom regulation. Speaking at the ITU forum, Vivian Reding, the European commissioner responsible for information society and media, dismissed the approach of relaxing regulations to provide carriers with the incentive to build out next-generation networks, which happens to be the policy adopted by the U.S. FCC.
Taking a jab at the U.S. approach to telecommunications, Reding said, “When we look at fiber by incumbents, the mere installation of a new technology cannot, in itself, change the application [of rules]. That is why the European Commission rejects regulatory holidays for next-generation networks.”
But outgoing ITU Secretary-General Yoshio Utsumi advocated less, not more, regulation.
“My personal view is that less and less regulation is necessary. The reason why the telecommunications industries were heavily regulated was that it was a monopoly dominated by a monopolistic service provider,” Utsumi said.
“Telecommunications is the hub of the society and it was a public utility, and there were many reasons to protect users from abuse of power,” he said. “However, telecommunications services are becoming more and more normal commodities. I may be wrong on this, but it becoming an ordinary thing due to competition. The reason or basis for regulation is becoming less and less” necessary.
One common theme of the event is how to bridge the digital divide and deliver more Internet access to the world’s poor regions. Henry Tang, financial secretary in the government of the Hong Kong, said that this is one area where government should step in.
“It is squarely government’s responsibility to reduce this digital divide in a modern and progressive society,” said Tang.Posted by Cynthia Brumfield at 9:08 AM | Print | Comments (0)
As I write about this whole new trend of video-over-the-Internet, I’m always searching for a moniker that’s less clumsy than “video-over-the-Internet.” That phrase is also not exactly accurate for describing the welter of developments driving new forms of video distribution because not all new, cool forms of video go over the Internet. Some private networks that aren’t the Internet (think 3G mobile carriers) are experimenting with new ways of distributing video.
What all these new developments have in common are their reliance on Internet protocol technologies. So, another phrase is IP-based video. Still ungainly.
Now Om Malik has coined a catchy term with the launch of a new blog, NewTeeVee, devoted to “online video, and other technologies that are reinventing the video experience.” The blog is helmed by GigaOm’s Liz Gannes, with contributions from some noteworthies including the apparently indefatigable Russell Shaw (seriously Russell, nobody can write that much), and Paul Kaputska, formerly of Pulvermedia. It’s worth a look.
And congrats to Om for putting a new phrase out there.
Posted by Cynthia Brumfield at 7:24 AM | Print | Comments (0)
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