The latest entrants in the appliance-based, Internet-to-TV video delivery business are Tivo and Amazon. The two companies announced this morning a new service called Amazon Unbox on Tivo, which extends Amazon’s online video delivery business, Unbox, to the Tivo device via broadband connections.
Like Microsoft before it, Amazon is using a popular piece of consumer electronics, the Tivo DVR (of which, 1.5 million are broadband-enabled), to reach beyond the Internet and into the TV set with its line-up of hit TV shows and popular movies. TV shows are priced at $1.99 and movies at $9.99 to $14.99, on par with just about everybody else, including iTunes.
This is all very cool — the purchased content can be integrated into Tivo’s guide mechanisms so that viewers can search their purchased content along with their recorded shows. But, don’t look for bang-up sales figures any time soon. With less than two million units capable of buying the programs, and Amazon’s limited (although impressive for what it is) inventory, this is a minor add-on service for both companies.
However, do look for more furrowed brows on the faces of cable chieftains and phone company executives. Amazon Unbox on Tivo, like Microsoft’s XBox 360 and Apple’s TV unit before it, relies on broadband connections to deliver video from the Internet to the TV set. Broadband connections…….provided by…….cable and phone companies. The same companies that are also trying to sell video services, including on-demand programming.
Although none of these appliance-based rivals (for that is what they are — competitors to cable and phone companies) will individually siphon much business away from the dominant video service providers. Collectively over time, however, the news is just not good for traditional video service and high-speed Internet access providers. They’ll lose some amount of business to these services. Not only that, but their IP networks will be packed to capacity routing around all these video bits from Amazon and Microsoft and Apple.
It has to be like death by a thousand cuts for Comcast or Verizon or Time Warner. First Microsoft, then Apple, now Amazon and Tivo. Who’s next?
Posted by Cynthia Brumfield at 1:08 PM | Print | Comments (0)OK, so it’s that time of the year. Time to once again deconstruct what’s wrong with the FCC’s broadband availability data. David Isenberg has the best analysis but most people will read Mike at TechDirt’s wrap-up of all the methodological flaws inherent in the independent regulatory agency’s data collection and reporting efforts.
Much of the criticism is not new:
—the FCC defines “broadband” as 200 kbps (ha!) and up
—the unit of measurement is zip codes, which results in overcounting availability because if broadband is present in any portion of a zip code, then the FCC considers it present everywhere in the zip code. Moreover, the Commission considers satellite-only broadband service zip codes as having “broadband available,” which is nothing more than a joke.
But there are some new criticisms this year. The most notable: The FCC is including mobile broadband services (think Verizon’s EV-DO service) in the definition of broadband. This expanded definition ups the statistics of course, making it look like broadband service connectivity has jumped.
David argues that “mobile broadband is entirely different than terrestrial forms of Internet access,” and shouldn’t be in there. Mike says that mobile broadband is not a substitute for DSL or cable modem service and that the inclusion of the wireless services unfairly inflates the statistics.
Harold Feld takes this “wireless-is-no-substitute-for-terrestrial” argument further at Public Knowledge. He tries to make the case that wireless broadband is as different from terrestrial broadband as puddle water is from bottled water (I kid you not.)
Freely available puddles don’t “compete” with bottled water, because people don’t regard them as substitutes - although both are “water” and, if you’re desperate enough, you can drink out of a puddle to quench your thirst. Absent any further evidence, my instinct is to treat “high speed” cellular services as “competing” with DSL or cable the same way free mud puddles compete with bottled water.
Come on guys. Wireless services are substitutes for terrestrial services across the communications spectrum. People are dropping their landlines for cell service all the time. Cable operators have lost tens of millions of customers to satellite providers. Wi-Fi, where it is available, gets you to the Internet just the same as DSL or cable modem service (and some municipalities are banking on Wi-Fi substitution to fatten their coffers.)
Moreover, a good argument could be made that mobile broadband services are substitutes for landline services. When I’m on the road, I fire up my Verizon Wireless EV-DO modem for connectivity. Granted, I’m an early adopter, but I bet as time goes on, and broadband wireless pricing reaches the mass market level, some folks are going to dispense with their home terrestrial connections. Even if they don’t, that doesn’t mean they couldn’t easily drop terrestrial broadband for wireless broadband.
So, don’t detract from the very valid weaknesses in the FCC’s broadband data by going too far and proclaiming mobile broadband as “not broadband.”
Posted by Cynthia Brumfield at 10:44 AM | Print | Comments (2)
In a very interesting development, Comcast, the nation’s top cable company, and Facebook, number two in social networking, have joined forces to create a TV series that will appear on Facebook, Ziddio (Comcast’s user-generated site) and TV via Comcast’s on-demand service.
Consisting of 10 half-hour episodes, the series is called “Facebook Diaries” and will be produced by videomaker R.J. Cutler. The companies will solicit user-generated videos starting in March and the best ones will appear in “Facebook Diaries.”
Whatever money-making potential the new series has (sponsorships will be available), it’s notable for several things. First, it will introduce video capabilities into Facebook - right now users can only share links. Secondly, it will drive traffic to, and perhaps increase the respectability of, Ziddio, which has to be the lamest user-generated video site of all. Finally, the deal involves a direct-to-TV migration of Internet video content.
As an aside, Cutler, the series producer, has one of the best quotes I’ve read in a long time: “The future of TV is not on TV.”
Posted by Cynthia Brumfield at 9:48 AM | Print | Comments (0)In a beautiful bit of serendipity, the Washington Post and the New York Times today both have pieces on the lobbying power of high-profile, home-grown industries. The first, from the Post, highlights a speech given yesterday by Google CEO Eric Schmidt and the headline tells it all: “Google Still Searching For Recognition in D.C.”
Schmidt was in town to give a keynote to the Carnegie Endowment for International Peace. Although Schmidt’s visit was a far sight better than when Sergey Brin wandered the halls of Congress and all anybody noticed was what the young billionaire was wearing, Google has a long way to go to wielding power in this freaky town. One audience member even asked Schmidt a question about problems with Microsoft Outlook.
On the other hand, Hollywood, which has perfected the rituals and rites and kabuki steps that lead to wins in Washington, had a grand DC dog-and-pony show Tuesday, according to the Times piece (which features a happy picture of studio mogul Brad Grey grasping the shoulder of powerful Senator Patrick Leahy (D-VT) in a warm greeting). Will Smith was there and Clint Eastwood was there. Speaker of the House Nancy Pelosi (D-CA), Senator Christopher Dodd (D-CA) and Senator Charles Schumer (D-NY) attended an evening reception.
Although the studios came in for a few knocks during the day, the event turned into a love-fest between Congress and Hollywood.
More typical of the day, however, was Representative Charles Rangel, the new Ways and Means chairman, promising to press the Bush administration to take a tougher line in trade talks with Russia, China and other countries concerning rampant piracy or barriers to Hollywood movies.
And then there was Senator Patrick J. Leahy, Democrat of Vermont, vowing to press the Justice Department to do more about piracy — moments before rushing over to the actor James Cromwell and complimenting his performance as Prince Philip in “The Queen.”
It’s not really fair to compare any industry to the MPAA when it comes to lobbying power. Not only does the trade association have access to all the movie stars, but it mastered the secrets of successful spin-and-win under the long reign of super-lobbyist Jack Valenti, and is still basking in the glow of forty years’ worth of good vibes. Google, which built its phenomenal business on objective and logical precepts of math and mass behavior, is still new to this totally irrational business of getting in good with lawmakers.
But, there’s no arguing that Google, along with the rest of Silicon Valley, is still climbing up the learning curve when it comes to navigating the corridors of power.
Posted by Cynthia Brumfield at 8:28 AM | Print | Comments (0)
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