Tech Untangled

Amazon has the Amazon Unbox on Tivo service, and both Netflix and Apple recently announced online movie rental services, and eventually you will be able to see Joost and Babelgum programs on TV. All this point to a market crowded with new ways to get movies fast and cheap over the Internet

Naturally, the incumbents - cable TV providers such as Comcast that deliver movies and TV programming over cable and satellite systems risk getting swept aside. Comcast is not waiting like a sitting duck. In early January, Comcast, the largest cable MSO in the U.S., announced Project Infinity to upgrade of its video-on-demand offerings and boosts the number of on-demand movies from 1,300 a month to 6,000. The cable operator says its video-on-demand services account for roughly 275 million viewings a month.

What Comcast has done to expand its movies-on-demand offering is to leverage its existing deals with Time Warner’s HBO, CBS’s Showtime, and Liberty Media Corp.’s Starz, something most others will find hard to do immediately.

At the same time, Comcast also announced the launch of Fancast, an online service at fancast.com [http://www.fancast.com] where subscribers can watch more streaming videos of TV shows from the likes of CBS and Fox and also use the site to order videos, get iTunes downloads, and program their digital video recorders to record TV shows while away from home. Comcast also plans to offer the service to other cable operators, making money from advertising and affiliate fees from DVD or download sales.

In the voice telephony world Comcast and others Cable providers are successfully taking on both VoIP providers such as Vonage and telephone companies such as at&t. In similar fashion, Comcast has a strategy to ward off anyone in the Movie and TV programming space. Comcast will not be able to stop Apple, Amazon, and Netflix completely, but will make a big enough dent in their profit plans.

Comcast in 2008 will offer High Speed Internet with speeds as fast as 160 megabits per second, which is a massive increase from its current maximum of 16 mbps. This is in many ways in response to competition from local telco’s such as AT&T and Verizon that are provide high speed Internet access over fiber optic networks. Of course, neither AT&T’s U-verse nor Verizon’s Fios has announced such high speed Internet offerings yet, but they certainly can have the capability to do so (Note: Verizon provides fiber optic all the way to the home, called Fiber-To-The-Home or FTTH, but AT&T and cable companies don’t), and it is this potential threat that is driving cable companies such as Comcast to one-up local telcos.

According to Comcast, this will allow a customer to “download a two hour-plus movie in high-definition in three minutes and 56 seconds”. No pricing has been announced yet. It might cost a pretty penny initially, with prices likely to fall once competitors start offering comparable download speeds.

Providing higher Internet speeds should be a boon for Comcast’s Internet business because it will help attract and keep customers that use high bandwidth servies such as gaming, video & music streaming and downloading, and Peer-to-Peer (P2P) applications extensively. However, this is a double-edged sword: Higher Internet speeds will fuel online movie and TV program downloads and streaming to a customers set-top box or TV from the Internet in a flash. This would be a great opportunity for companies like Netflix, which recently announced a deal with LG Electronics to develop a set-top box that can download movies and TV programs from Netflix over the Internet, and Amazon, whose Unbox service already sells movies to be downloaded to a Tivo. Apple with AppleTV, Moxi, Sling Media and others are also in the same arena.

Offering blazing Internet speeds will be great for Comcast in the short term, and Comcast will expand its Video on Demand service to counter the threat from the likes of Netflix, Amazon UnBox, and AppleTV, but in the long term this could very well be a double-edged sword that promotes online movie downloads and dampen interest in Comcast’s own Video on Demand service.

AT&T just cut its forecast for the number of homes that will have access to U-verse, the service that sends TV through home phone lines.

Now, AT&T expects U-verse to be available to 17 million homes at the end of 2008, down from a previous estimate of 18 million. According to AT&T this delay is due to preparing for U-Verse rollout in the former BellSouth territory, which AT&T acquired last year. As this is preparatory work, it will not result in U-verse being available to additional homes by 2008.

AT&T has delayed U-verse rollout several times, so no surprise here. IPTV so far hasn’t been a big hit in the U.S., with Europe and Asia leading the U.S. in terms of IPTV subscribers. Nonetheless, service providers see IPTV as a key component in providing bundled services and “three-screen” services (i.e. mobile screen, desktop screen, and TV screen).

More than 8.2 million customers subscribe to IPTV as of first half of 2007. This is a 179 percent increase in the 12 months ending June 30 2007, according to according to research from Point Topic (registration required).

Europe leads the way with the highest total subscribers (4,984,000) and also leads with a whopping 231% customer growth – indicating that Europe is now pulling far ahead of the rest of the world in terms of IPTV subscriptions. All the major European incumbents now have IPTV service. Around half of the IPTV customers are in France, primarily due to France Telecom’s strong performance in response to the deployments of rivals Free and Neuf. Spain’s Telefonica added almost 200,000 IP TV customers, Belgacom signed up 120,000 in Belgium, Deutsche Telekom landed 35,000 and BT in the UK added 20,000 customers during the same period.

The Asia Pacific region also has 2.1 million customers (excludes Korea, where only video-on-demand services via IPTV is provided), with 800,000 IPTV subscribers at PCCW in Hong Kong and Chunghwa in Taiwan gaining 200,000 IPTV accounts in the same period. These numbers should start hit the roof when Chinese companies move from trials to commercial deployment.

The Americas lags both Europe and Asia-Pac with only 1.069 million subscribers signed up in the first half of the year. Here, IPTV is seen as a response to triple-play competition from cable MSOs.

NewCo, the online video collaboration between NBC Universal and News Corporation that had no name, has finally got a name! and it’s hulu. The naming convention appears to be taking a page from the Internet company tradition of creating meaningless but cute-sounding company names. I don’t think the name has much ‘bang’ or ‘pizzazz’. Frankly, Jaxtr, Google, Yahoo, Skype, Lala, and Joost are better-sounding names. The announcement ends a five-month search for a name. I’m guessing a good sum of money was spent on it.

The site will be in private-beta by October. The site is currently accepting sign ups for an invite to the private beta.

The name may be meaningless, but this is definitely something worth checking out because NBC and News Corp have great content. But, don’t’ expect it to be a YouTube killer!

3rd Generation (3G) wireless systems, whose primary focus is wireless broadband (data), arrived on the scene a few years ago. You can say that it’s still at its early stages, but the customer uptake shows a very rosy picture for wireless broadband.

There are many factors driving this. One is mobile music downloading. Following behind but catching up fast is mobile video. Recently, I reported that mobile video subscriptions are surging. On top of that, wireless service providers such as Verizon Wireless are taking advantage of the YouTube craze by Enabling YouTube Video Uploads directly from VCAST enabled phones. Not to be left behind, Veoh Video also recently inked an agreement to provide a Veoh Channel on Verizon Wireless’ VCAST video service. Even handset manufacturers such as LG are joining the fray and enabling YouTube uploads directly from the mobile phone.

In the U.S., Sprint and Verizon Wireless are the unheralded leaders in the quest to build 3G networks. They both cover more than 210 million pops (in other words, a significant part of the U.S. wireless coverage area). Then there’s AT&T, which just rolled out 3G service in 160 markets in the U.S. AT&T recently launched a video calling service that runs on the 3G network, although I doubt that its currently driving much customer demand for 3G.

Another driver of 3G is for use as a broadband link for laptops and personal computers (call them wireless modems and wireless routers).

So How fast is the 3G Broadband Wireless growth? According to Wireless Intelligence, as shown in 3G Today, there are 486 million reported 3G CDMA customers. This is counting CDMA2000 1xRTT customers, which in my mind is not 3G, but perhaps 2.5G.

Counting “real 3G” customers, there are 68 million CDMA2000 1xEV-DO customers and 127 million W-CDMA (UMTS) customers worldwide, for a total of 195 million. That’s still a small penetration rate, when you consider the overall cellular landscape. However, the 3G numbers are growing at an annual rate of 70%, which points to a very rosy picture for wireless carriers.

Verizon Wireless is now the first U.S. Wireless Service Provider (WSP) to enable YouTube Video. Now you can record videos on your mobile phone and upload the videos directly to YouTube using the shortcode YTUBE (98823) using MMS. This is a pretty easy to remember shortcode, but UTUBE would’ve been easier to remember (perhaps that was already assigned). In order to upload videos, subscribers need to first update their YouTube accounts with their wireless phone numbers at www.youtube.com/mobile.

For the most part, videos should be of good quality but wont be able to match the quality of a good video camera (of course!). How long a video you can record depends on the memory size of your mobile (which usually isn’t much) and the size of the memory card in your wireless device. Verizon Wireless currently has more than two dozen video messaging-capable phones.

Other than uploading videos, subscribers with V CAST-enabled phones can also access selected YouTube videos through the YouTube channel on V CAST. V CAST subscribers can also access Veoh videos through V CAST. V CAST costs $3.00 for 24-hour use or $15.00 monthly subscription (no airtime charges).

Just yesterday, I wrote about the rising number of mobile video subscriptions. Well, these events will only further increase mobile video subscriptions.

The popularity of video and Internet TV is proliferating to the mobile! About 8.4 million wireless customers in the U.S. now subscribe to mobile video, reports Telephia - that’s 4% of all U.S. mobile subscribers. In the first quarter of 2006, there were 3.3 million mobile video subscribers, and in the first quarter of 2007, this number had grown to 8.4 million, signaling a Year-over-Year growth of 155%. This is starting from a very low number, but it’s still very decent growth. Mobile video revenues in the U.S. totaled $146 million in Q1 2007, growing 198 percent year-over-year.

In comparison, mobile music, which includes realtones, ringtones and full-track music, is a $239 million per quarter business in the U.S. Mobile music has been around for 3-4 years and music subscriptions grew 42% during the same period, from 19 million subscribers who downloaded some form of audio on their mobile devices to 27 million.

More interestingly, the survey has found out that nearly half of the mobile video subscribers were willing to put up with view ads on their cellphones - that should be very good news for the likes of Google/YouTube and other video providers.

Recent agreements between wireless operators and video content providers, such as this between Veoh and Verizon Wireless and this will further increase interest in mobile video. Of course, a compatible wireless device is required to view video on mobile phones.

iThentic, an online and mobile video content company, has teamed with Independent Television Service International to commission eight short films from award-winning filmmakers around the world. This work will be for a project dubbed “Global Mobile” banner with food as the common theme. Each segment will run under three minutes. iThentic has also completed pilot episodes for a range of in-house productions, including “Green Minutes,” “Hot or Not?” and “Reel Stand-Up.”

The film series will launch in October for distribution on globalmobileproject.com, itvs.org and iThentic.com and to other distribution partners, including Cellfish in the U.S. and Rogers Vision in Canada. IThentic is also looking for original, high quality, independent content for the web and mobile devices, and will share revenues with content providers.

The iThentic mobile video service is currently available on Rogers Wireless and Telus, two major Canadian mobile operators. iThentic distributes video content In the US to wireless carriers through Cellfish. Cellfish reaches a potential 350 million cellular customers through its carriage arrangements, and provides direct downloads to wireless devices from http://www.cellfish.com.

The mobile video space is just heating up and iThentic is positioning itself as a provider of short-form mobile entainment video. This is just the beginning, and we can expect many more content distributors to join the fray.

AT&T/Cingular started with a limited commercial rollout of the Video Share service in June 2007. Now, AT&T Video Share goes “nationwide” in nearly 160 Markets. While Europe has seen video calling services earlier (albeit with limited success), this is the first-ever service in the U.S. that enables mobile subscribers to share live video over their wireless phones while on a voice call.

This is still one-way live streaming-video feeds where one has to manually switch streaming direction (making it half-duplex video calling). There is still a laundry list of drawbacks with this service. I’m still skeptical that this service will catchup anytime soon.

Video Share works exclusively over the AT&T 3G wireless network. So the real good news here is that AT&T has expanded its 3G footprint, which was earlier limited to a few select cities. With 3G, users will get faster data download speeds using a technology called HSDPA. Another technology called HSUPA will increase upload speeds, but this will come much later.