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Microsoft formally announced partners for its latest Xbox TV initiative today. In addition to Comcast and Verizon FiOS (two partners that were leaked last week), Xbox owners will be able to access content in varying degrees from Bravo, HBO Go and Syfy in the US, along with BBC in the UK, Telefonica in Spain, Rogers On Demand in Canada, Televisa in Mexico, ZDF in Germany, and MediaSet it Italy.

It’s all well and good to get excited about Microsoft TV, but there’s no major revolution here yet. In order to get Comcast or Verizon video on your Xbox, for example, you have to be an existing Comcast or Verizon subscriber as well. This is not over-the-top cable TV, freely available to anyone with an Xbox. It’s cable testing the waters of IP delivery.

Verizon has had systems in place for a while now that support delivery of linear television over IP. Although FiOS has always used IP for its on-demand content, we heard back in January that it could flip a switch for delivery of its broadcast content as well. Meanwhile, Comcast has steadily upgraded its own VOD architecture for future IP delivery, and is reportedly even testing linear broadcasting over IP on the MIT campus.

The Xbox experiment is a way for Verizon and Comcast (and others) to test out their new delivery systems. Limited adoption – built in by the inherent service limitations – will let them do a controlled introduction of new technology. They’ll stream a relatively small amount of video over IP, and be able to see how their networks hold up. If that goes well, they’ll push the boundaries a bit farther.

The experiment is a good one, and you’d better believe that every other cable operator will be watching closely. But it’s no revolution for consumers. Not yet. On the bright side, getting to IP delivery of video means cable providers will have a lot more flexibility. Once the networks systems are proven, they can start to play with business models. If the rumors of a la carte discussions are any indication, the timing is right.

4G and the Whispernet Model

Mari Silbey —  October 5, 2011

We’re still in the early days of 4G deployments and adoption, and while I’m loving LTE access on my HTC Thunderbolt, the real impact of next-gen mobile broadband won’t be felt for another year or two. When it does hit, we’re likely to see a lot of changes in how mobile devices and applications are developed, managed and priced. According to Tellabs (via GigaOM), carriers are about to lose their data cash cow, and will actually be in the red with mobile data delivery by 2013 if nothing changes. Of course “if nothing changes” is the key clause here. Things will change because no carrier is going to offer a service that can’t ultimately deliver a profit.

One of the more intriguing possibilities for future mobile pricing models is a move toward Amazon’s Whispernet model. The pricier Kindle Touch version is still bundled with free 3G mobile broadband services, but it’s now limited to Kindle store and Wikipedia access. I expect we’ll see a lot more of this – hardware providers bundling mobile broadband with devices, and even app providers bundling access with certain types of applications. There are many mobile activities that can wait for Wi-Fi, but instant gratification can be a powerful draw , and it’s a feature that many are willing to pay for.

For example, the vast majority of my mobile data usage comes from streaming Slacker or NPR. In the future, I could see Slacker bundling mobile data access with my monthly subscription to give me unlimited music streaming. I get that now, but only through a grandfathered unlimited data plan with Verizon, which I don’t expect to last forever. I wouldn’t want to pay an unlimited “tax” on every application, but if there are only one or two that threaten to put me over my monthly limit, I would seriously consider an application-specific broadband fee.

You can see how this would work for video and other services too. Netflix could bundle access with its video service. So could Amazon, either with its Kindle Fire, or with its video streaming service delivered on somebody else’s hardware. When Apple brings its iPhone 5 to market with 4G, it could bundle access to iTunes. Or it could bake mobile broadband access into its new Nano for fitness applications. The possibilities are limitless.

If delivered well, the Whispernet model is something people would pay for. And in a world of 4G speeds, it would make mobile broadband feel unlimited again, albeit in a limited way.

A different day, a different story. Experts are now predicting that connected TVs will be hot this holiday season. Jonathan Weitz, a partner at IBB Consulting says that consumers will buy up smart TVs this winter and beyond, and Parks Associates expects more than a tenth of broadband households to purchase a connected TV in the second half of 2011. That’s a pretty big shift from just a few years ago when the focus was still on upgrading to HD, and even from last year when most people were still asking me if they should buy a 3D TV. However, I have to question how radical the change really is from a consumer perspective. For example, when I spoke to Jonathan Weitz late last month, he pointed out that the vast majority of TVs sold in the next three years will be connected TVs. If connected TVs become the default for manufacturers, then sure, that’s what consumers will buy. It’s kind of like having said in the late 1990s that most people would start buying PCs with embedded modems. Yup, pretty good bet.

So let’s turn instead to the impact of connected TVs on consumer viewing habits. The two assumptions I’ve heard most frequently are that smart TVs will push more people to cut the cord on cable, and that smart TVs will lead to more interactive TV app use. On the cord-cutting front, I don’t think the impact is going to be dramatic. There does seem to be a slow drain on pay-TV subs, but for consumers who want a good selection of TV and movies, there’s still no better option than a cable or telco subscription. Just because you can access a Netflix app on your TV doesn’t mean you don’t want to be able to watch FX, or Discovery, or ESPN too.

Which brings me to the second point. What is it people want to do with their TVs? I’m still convinced that people mostly want to watch television. The apps that are likely to prove most popular on connected TVs? I’m guessing Netflix, YouTube, and other apps that offer more content rather than new functionality. I’ll caveat that by saying I do acknowledge some behaviors are changing. Parks Associates has found that one of the features consumers say they’d prefer to have on connected devices (including smart TVs) is access to Facebook. So maybe consumers do want some interactivity with their TV watching, in which case, advertisers should be all over that opportunity. However, given how many devices we can interact with, I have to question how far the pendulum is really going to swing. When I crash at night, I don’t want to tweet on my TV. I want to turn off my brain and just watch a show.

Today’s question of the day comes to us from George C…

My brother-in-law just moved from the West Coast back to Texas.  In doing so, of course he dropped his triple play Internet/TV/Cable.  He also sold/gave away his old CRT televisions.  They watched Netflix via an old computer (they didn’t know about Roku type of devices).  He and his family (wife, two younger kids) just bought a new house and he is very open to new configurations.  He is technically capable of installing software, routers, etc…. But would not delve into (for example) Myth TV, pyTivo, etc…

He’ll probably need two TVs, one for the living room and one for the master bedroom.  OTA is a possibility, as there is a clear shot to the towers.  The wife really wants a land-line “in case of emergency”.  He thinks that they can stay with cell phones (I suggested Ooma).  The house alarm system come with an independent wireless system.  He doesn’t mind paying a fair price for a device, but really, really wants to avoid recurring monthly fees. Continue Reading…

Sezmi Joins The Deadpool

Dave Zatz —  September 25, 2011

sezmi_display

We’ve covered the Sezmi television solution for some time. But, alas, they’ll now be joining the likes of Akimbo, ZillionTV, and Moviebeam in the deadpool. From Sezmi’s recent customer outreach:

We regret to inform you that Sezmi is discontinuing its consumer service. As of Monday, September 26, 2011, you will no longer be able to view or record broadcast TV programming through your Sezmi System. However, you will still be able to view movies and shows you have already saved to your Sezmi media recorder. Sezmi has changed its business focus to providing our product and technology platform to service providers, internationally and in the U.S., who are interested in providing broadband video services to their customers. As a result, we are no longer supporting our direct-to-consumer service.

It’s unfortunate, as Sezmi was pushing a “one box” comprised of both Internet, cable without the cable, and broadcast content (along with user profiles!), long before TiVo landed on that marketing approach. But the writing was on the wall and we saw this coming. From my contribution to a TiVo Community discussion on the merits of Sezmi a few months back:

Sezmi shot themselves in the foot with their original plan to license broadcast spectrum and launch only in those select markets (LA was first). They blew a lot of cash on that failed approach and have since adjusted. But I wouldn’t be surprised if they don’t survive beyond 2011. A bummer really, because the market needs more competition not less. But if TiVo can’t make it in retail, no one can.

From the get go, both Mari and I were somewhat skeptical of their grand initial approach and possibility of success given the landscape. Mari’s thoughts back in 2008:

I love the idea of Sezmi but I simply can’t imagine how the enterprise will succeed. These guys have been really innovative, and deserve huge kudos for trying something new. I wish the obstacles in front of them weren’t quite so daunting.

Sezmi hopes to work deals with service providers and carry on. And perhaps they will. But I suspect they’re just delaying the inevitable. My advice? Sell the assets, if possible, and move on to the next challenge.

(via EngadgetHD)


Microsoft announced at a financial conference yesterday that it plans to offer live TV on the Xbox in time for the holiday season. It’s like deja vu all over again. It was in January of 2007 that Microsoft first made this promise, and the company has dangled the possible integration at every Consumer Electronics Show since.

Once again, the would-be TV provider isn’t naming any partners, but does say it will have “dozens or hundreds of additional video content suppliers,” and that it will bring this service to market through the network operator channel (i.e. your cable provider). This follows last year’s launch of Xbox-as-a-set-top for AT&T’s U-verse service, which includes an unfortunate $99 fee to cover the necessary hardware upgrade. It also comes on the heels of Jinni’s recent announcement that Microsoft is licensing its “semantic discovery technology for personalized, holistic discovery of video entertainment.” Perhaps this reference guide Jinni touted earlier in the month is the basis for Microsoft’s new Xbox TV interface?

We’ll wait and see what Microsoft actually brings to the table, but in the meantime, here’s a timeline of the company’s efforts to make the Xbox a Trojan horse in consumer living rooms. Note, this doesn’t take into account various other Microsoft TV attempts including the ill-fated Microsoft TV Foundation Edition program guide. Yeah, Microsoft’s been at this for a while.

Starz is pulling its content from Netflix in early 2012, and the ripples are being felt throughout the entire video distribution ecosystem. Can Netflix recover? How expensive will content licensing get? What does this mean for over-the-top video as a whole?

With potentially 300 million dollars on the table in a Netflix/Starz renewal deal, it is reasonable to assume that the decision from Starz to pull out of the relationship has to do with more than just direct revenue. I’ve heard from one source that Starz wants to go it alone and follow an HBO Go model. It’s already made its bed with the cable companies, and, like HBO, it sees that it can drive viewership and continuing revenue through that established model. It can’t, however, provide its content through a cheap Netflix subscription to consumers and continue to expect people to see more value in a cable package that costs a lot more. In other words, by licensing content to Netflix, Starz undermines its more lucrative partnership with the cable companies.

So the Netflix/Starz break-up is about more than just money. Or rather, it’s about more than just a one-time licensing deal. It’s about programmers deciding that the OTT free lunch program is over. You know all the concern and hype about cord cutting? I wouldn’t be so worried for the cable companies. The content folks know where their bread is buttered.