Time Warner Cable and Fox News TV Everywhere

Time Warner Cable now has TV Everywhere apps for Fox News and Fox Business News. This announcement got me wondering if we will see a new trend where TV Everywhere becomes the first line of defense for content producers against the oncoming tide of a la carte TV.

HBO Go is tremendous but the over the top service is only available to people who are already subscribing to HBO through their cable company. One hand washes the other in this arrangement. If you think about it - HBO is also a defacto package of channels. Nobody gets just one HBO channel. Other content providers who are not premium channels may see this and wonder if a similar arrangement like this can be used to their advantage.

I am not sure about the details of the Time Warner Cable arrangement with Fox News and Fox Business News regarding their apps but I have to wonder if the language of the agreement states that the apps are only available to people who subscribe to both channels? That may not be a big deal now when Time Warner and other cable companies package the channels together but it would be good protection and a very valid selling selling point if a la carte ever came to be. Sure with a la carte TV you would be free to pick either Fox News or Fox Business News or neither but what if you lost access to the apps for both channels if you didn't also get both linear channels?

Just something that occurred to me.

D-Link's MovieNite

Very good review of D-Link's new low cost ($38) MovieNite media streaming device. The once criticism I'd make about the review is that they miss they key market for this device - the spare TV.

I would say the most likely person to buy this device is a cord-cutter who uses an X-Box, PS3 or other device on their main TV but needs something for their extra TV. X-Box in the living room and MovieNite in the bedroom with Netflix access on both.

Google Fiber's Missing Channels

I've seen a number of articles about Google Fiber in Kansas City commenting on the channels their TV package seems to be missing. What I have not seen is a good explanation of why those specific channels seem to be excluded from the line-up.

I think I can explain. The noticeable missing content seems to be from ABC/Disney (including the ESPN channels), Turner (TBS, TNT, CNN, etc) and HBO. What these three companies have in common is they traditionally do not allow their content to be transported via fiber. If Google wanted to add the channels by pulling them down via satellite then those channels would probably already be secured. But the name of the company is Google Fiber not Google Satellite.

In my opinion this has little to do with the cost of the content - consider that HBO is premium content that only the subscribers who want it would be paying for it. This has to do with business models - both Google's and the content providers.  How subscribers access over the top portals like HBO Go or ESPN3 is probably one of the key sticking points. I'm also guessing that none of the three content providers are very excited about re-doing any existing most-favored agreements to satisfy Google.

It will be interesting to see how this is resolved.

Verizon Spectrum Deal Approved by FCC

"Welcome to my lair said the spider to the fly." That was my first thought upon reading that the FCC approved the Verizon purchase of spectrum from Comcast, Time Warner Cable, Cox Communications and Bright House.

Who are the winners and losers of this deal and why did I think of the spider and the fly? Let me explain.

Smart TV's or Dumb Screens?

Very astute article about Smart TV's. The question is asked - "Who needs an Internet set top box like Roku or Apple TV if the functionality is integrated directly into your TV?" This question can basically be answered with another even better one - "Who is going to buy a $2,000 Smart TV that can be obsolete with the next new app or firmware release when they can buy a box for $100 that can be replaced as needed?"

If you understand the two questions then you'll also understand why Apple is not going to be getting into the manufacture of TV's - smart or otherwise.

How to Move from MPEG2 STB to IP Consumer Boxes

Once upon a time if a business wanted phones to make calls they had to buy a proprietary system and handsets. Whether it was a PBX, hybrid or key system from Lucent, Mitel, Ericsson, Nortel or others - it was proprietary. And expensive. Then came VoIP.

Anyone who was around at that time can recall the key word that was always attached to anything IP - "ubiquitous".  As pretentious as the word and description was it did come true. IP has become "ubiquitous". Well for everything except cable set top boxes.

MSO's and smaller cable companies have invested billions in MPEG2 set top boxes. They don't want to go to the expense of switching out those boxes just so the customers can enjoy MPEG4 HD programming and other IP based services. And the customers don't seem to want to foot that bill either. Surprisingly the answer to this conundrum may turn out to be relatively simple.

If a game console or box like Apple TV or Roku can accept the encryption client from the MSO to insure content protection as well as accepting the EPG and data - then the switch-over from proprietary MPEG2 based STB to IP based consumer product could be for the most part painlessly achieved.

I think Apple understands this which is why the next version of Apple TV will probably more closely resemble a traditional STB (but with cloud based DVR functionality). This is not much different than Cisco back in the day getting into the VoIP handset market. It should be noted that the VoIP handset didn't replace the traditional TDM-based phone overnight but the VoIP handset market was much more profitable.

How many people do you know selling PBX's today? In ten years the same thing will be said about people selling QAM based systems and set top boxes.

Apple TV - Out of the Box Thinking

People keep trying to predict what Apple is going to do regarding Apple TV - or iTV as some people want to call it. I don't believe the speculation that Apple is going to get into the manufacture of televisions. And people who speculate that Apple will get into cloud based DVR - what do you think iTunes is if not a giant cloud based library for music and video?

Having said the above - I will jump in and add my speculation to the bunch. What if Apple makes a deal to provide VOD services for CBS - who other than trying to drive people to the CBS website doesn't seem to have much of a strategy in place. You could buy a season pass for a CBS show on iTunes for say $1.99 and Apple and CBS could split the money. Make a show available the day after it first airs and then take it off a month or two after the last show in the series airs. This would be a big incentive for people to purchase Apple TV and it would be a new revenue stream for CBS. And if CBS doesn't like the idea - Apple could just use their huge hoard of cash to buy them.

How's that for thinking outside the box?

Apple TV

I really don't understand the people who think that Apple will actually start manufacturing TV's.

But 70 inch iPads that are massive media centers sure sound sexy. Imagine big screen Apple TVs running the iOS touch interface. Now that's something worth paying for.

I see a big flaw in that idea. Touch screen TV's? So I'm supposed to get off the couch just to touch the TV to change the channel? No - I could use my iPad as a remote but I'm not going to care about a touch screen. I could use Siri to voice my commands but Siri could be built into Apple TV. It doesn't need to be an actual TV.

A la Carte TV

Peter Kafka has a new article where he argues that it is most likely that Apple TV will go along with the current content arrangements to get along. He mentions two scenarios that would create a more a la carte  environment but he misses the most likely - Congressional action.

A la carte TV may come to Canada and will be through legislative action. Of course the content producers would spend millions lobbying against such action in the US but can you imagine how popular it would be? Everyone - Democrats and Republicans - have to pay for channels they don't like.

Verizon and Comcast Deal

There seems to be two pieces of business common sense that are somehow mystifying to some people. First most business people would rather not do a deal than enter into a deal where they know they will lose money. Second - once a home has a high speed connection there is very little incentive for a competitor to pour the money into the infrastructure to put in a competitive connection. Its not brain surgery but some people just can't seem to get their arms around these two simple ideas. And as I explain below - these two simple ideas are the crux of the proposed Verizon Wireless and Comcast deal.

Google to Slash 4,000 Jobs at Motorola

Google to slash 4,000 jobs at Motorola. That's 20% of the company. It is expected that a third of those cuts will be in the US. My mind works differently from most so when I read the article two things came to mind:

1. I'm amazed that just 10-years ago Google was a company whose browser was just catching on with the public while Motorola was one of the best known brand names in communications technology. Now Google not only owns Motorola but is streamlining them as if the new kid is teaching the old professional how business is supposed to be done. Who is the new kid lurking around who in 10-years will be teaching Cisco or some other big name how to do business?

2.  If you are on LinkedIn - watch for many from Motorola to suddenly find a new enthusiasm for networking.

DISH Network Q2 Profits Drop

DISH Networks Q2 profits dropped from $335 million last year to $226 million this year.

I would expect this trend to continue as costs of programming do not seem to be going down any time in the near future. At what point does DISH need to raise its rates? If they do raise their rates will that cause a stampede of customers? What sort of churn can DISH withstand if they do raise rates?

Cord Cutting?

Another article talking about cable companies losing 400,000 subscribers last quarter. Of course I would expect those numbers to be made up in later quarters and the overall comparison to last year to be a wash.

Two thoughts keep popping up every time I see one of these articles:

1. Say an older couple who had cable moves out of an apartment and younger tenants take over who never bother to add cable but who sign up for a better broadband service than the older couple had - do these new tenants count in the statistics as cord cutters? Technically they never had a cord to cut. Also the revenue from the broadband service may be greater than what the older couple was paying for cable (and with a greater gross margin). How is this a bad thing?

2. Articles like this always seem to bring up Netflix and Hulu like these services don't also contribute to the content providers bottom lines. In the example above the new young tenants are probably consuming more content then the older couple who may have just watched local news and sports.

Pay-TV Share Shift

Peter Kafka makes an interesting argument that the pay-TV market isn't shrinking - the market shares are just shifting around.

And it should be pointed out that the numbers Peter writes about don't include any of the small telcos or FTTH companies that have gotten into IPTV and taken subscribers away local MSO's.

Is Aereo a Winner?

Does the Aereo service and pricing model make sense? To be honest - I don't think so.

Here's why.