Archives For Industry

Netflix (NFLX) released its quarterly earnings earlier this week and, while the market was somewhat underwhelmed, subscriber numbers are impressive. In fact, GigaOm declares, “Netflix Now Officially Has More Subscribers Than Comcast.”

Indeed, at first blush, Netflix’s 23.6 million subscribers does exceed Comcast’s 22.8 million. But what exactly does that suggest and is it a reasonable comparison?

From a financial stand point, the proclamation doesn’t hold water as Comcast’s revenue is orders of magnitudes larger than Netflix’s. And it’s not like these two are necessarily direct competitors. Sure, there’s a cord cutting contingent that relies on Netflix to augment their “television” viewing. But many subscribe to both pay television services and Netflix, as I do. Additionally, Netflix is available nationwide whereas Comcast only operates in select regions. So, perhaps a comparison to HBO’s 28+ million subscribers is more appropriate. But, again, these movie services are not mutually exclusive.

At the end of the day, Netflix’s success and service is admirable (although its streaming content catalog is still lacking), and illustrates folks are seeking out alternate distribution methods. Yet, at the end of the day, its rise seems inversely proportional to the demise of Blockbuster’s retail video rental business, rather than a large scale assault on the established premium TV providers.

This post was originally published on the Dice Blog Network.

Light Reading TV interviews Roku Anthony Wood Boxee Avner Ronen

One of the best things about this week’s Light Reading Cable event was Avner Ronen’s unfailingly humorous commentary. That guy could be a stand-up comedian. And in an industry where much is taken far too seriously, a little levity is appreciated.

That said, just because Avner was funny doesn’t mean he didn’t also have some status updates and pearls of wisdom to dispense. Here’s what I got from the Boxee CEO, along with Roku CEO Anthony Wood, and TiVo exec Tara Maitra. For more, check out Light Reading’s own coverage including interviews on Light Reading TV.

Boxeewants to own the user experience
Avner Ronen still insists Boxee doesn’t want to be a cable killer. Instead, the company wants to own the user experience – not the delivery, the content, or the box. To date, the company has 1.7 million users worldwide, and it plans to use its recent funding round of 16.5 million dollars to license more content, get distribution on more TVs, and most importantly, continue focusing on product development. Avner says that Boxee still doesn’t meet the babysitter test – i.e. the babysitter wouldn’t necessarily be able to watch TV upon encountering the Boxee Box for the first time. However, the company is aggressively working on moving from being a geek-only product to one that’s appealing to mainstream early-adopters.

Rokuwants to be a next-generation video network
I don’t know that I could have articulated Roku’s goal of becoming a next-gen video network before CEO Anthony Wood did yesterday. (Ah, so that’s what the little box that could wants to be when it grows up!) But it’s a noble aim, and certainly one that Roku’s made a good start on achieving. According to Wood, Roku has already shipped more than a million boxes through direct Internet sales, and that number could explode when the company hits the retail big box stores this year. Meanwhile, Wood also noted that customer surveys suggest that new Roku owners are cutting back on cable services at a more rapid rate. Last year 30% of new owners said they downgraded cable service or cut it altogether. This year that number’s already at 40%.

Other Roku notes: Wood says the company will probably have more than 1,000 channels by the end of the year, and it will launch its first international product in 2011. Continue Reading…

Cisco’s Dr. Ken Morse announced this morning at a Light Reading Cable event that set-tops are headed toward a next life as software, or as virtualized elements in the cloud. The statement is not terribly surprising on the face of it, except for the fact that it comes from Cisco. I’ve written plenty of “the set-top is not dead” posts in the past, and Dr. Morse agrees that it will be some time before legacy hardware disappears. However, even the fact that the company is publicly suggesting that hardware set-tops are on the road to extinction is pretty remarkable.

If you’re not familiar, Cisco is one of the largest set-top manufacturers on the planet, along with my former employer, Motorola, and Technicolor (formerly Thomson). However, consumer hardware is certainly not highest on the company’s priority list. In its most recent (disastrous) earnings report, Cisco made it clear that it plans to focus on its core network strengths going forward. That stated strategy refers primarily to ditching unsuccessful retail products, but maybe Cisco now sees set-tops in the same category. Certainly shifting everything to the network or the cloud puts Cisco in a place where it’s much more comfortable. And it seems the company is starting to align its public position with that reality.

Digital Media Bytes

Dave Zatz —  April 22, 2011

A periodic roundup of relevant news… from our other blogs:

New Tablet Hardware: Specs and Speculation
And the mobile market rolls on. Two tablets launched last week are worth a look – for consumers and content publishers alike. RIM’s Blackberry Playbook and LG’s Android G-Slate.

Imavex Does Live Streaming to Roku and iOS
If you’ve always dreamed of having your own live Roku channel, now’s your chance. Limelight customer Imavex has launched a service with encoding partner Kulabyte for live content streaming to Roku boxes and Apple iOS devices.

Video Distribution in a Box – Limelight with mgMEDIA
What’s interesting about this news is that it’s another signal showing we’ve entered into an age of democratized distribution. Anyone, from the biggest broadcasters to the smallest start-ups, can now get content out to audiences everywhere.

FiOS streaming live TV tablet

Slowly but surely we’re getting more access to TV on our PCs, iPads, and smartphones. But a comment on Dave’s post about the IMG 1.9 release reminded me that for some folks, the fact that FiOS TV service doesn’t let you move content around easily today is still a deal-breaker.

Until Verizon has a way for me to get TV off their box and onto my PC/ pad/ phone- the same way that Tivo does, I will continue to be a Tivo customer.

What most folks don’t know is that Verizon has done an astounding amount of work on its infrastructure in order to enable services that make content more flexible and accessible on different devices. We learned in January that the telecom had overhauled its hybrid QAM/IP system, making it possible to switch over to all-IP broadcasting for live television in addition to VOD and widget services. More recently, however, the company announced its new Verizon Digital Media Services platform, which both transcodes and formats TV for different devices, and handles session management so you can start watching a show in one place, and finish up somewhere else. (See Light Reading’s stellar coverage here and here)

Verizon claims that VDMS is a one-of-a-kind digital delivery utility, and it’s aiming to sell the technology as a service to cable companies for their TV Everywhere services. I have serious doubts about the potential success of that plan, but for Verizon’s own purposes, VDMS appears to give the company everything it needs to take FiOS TV to the next level. You know how the new WatchESPN service lets you watch live ESPN broadcasts on the go? I’m betting Verizon will offer more linear content the same way in the near future to FiOS TV users, along with the option to transition viewing sessions of VOD and recorded content to various gadgets for mobile viewing. This could be a good year to be a FiOS subscriber.  Continue Reading…

Of course the big news today is Cisco’s abandonment of their $590 million Flip acquisition. Yeah, it’s a disappointment (which we saw coming) and somewhat perplexing that a buyer wasn’t lined up – the brand retains significant value even if the recent and unreleased products don’t.

Over on Twitter, I had an interesting exchange with former Wired reporter Priya Ganapati:

(read from bottom to top)

Priya wonders how Flip’s founders feel, in retrospect, given the situation. I assume they’re wistful… but driving nice cars. I also assume that the decision wasn’t entirely theirs to make. More often than not, the investors are the ones calling the shots. And they successfully nurtured Pure Digital and then liquidated for a handsome profit.

As I said on Twitter, each of my previous employers has been acquired. Some were financial wins, some were financial losses. The various parties usually talk ‘good fit’ and ‘synergy’, but ultimately deals are done based upon who offers the most cash at the right time. Just ask Palm. Er, Elevation Partners.

Cisco has announced it’s closing down the Flip business and folding the UMI video conferencing product into its Business TelePresence line. The news comes on the heels of last week’s announcement that WorldGate, maker of the ill-fated Ojo video phone, has finally shut its doors for good. Bye bye, badly-managed video products. Hello, smartphone and tablet world.

As an early Flip camera fanatic, I’m sorry to see the brand die, but Dave called it a year ago. Not only was the product outside of Cisco’s wheelhouse, it also had a limited window of success because of the video functions being loaded into smartphones. I currently own a Kodak Zi8 video camera. It’s a great little device, but I don’t think I’ve pulled it out of my bag since last June.

As for the two video phone products – really, what were those guys thinking? Even perfectly executed, the Cisco and Worldgate (briefly Motorola) SKUs were awfully expensive alternatives to free video Skype on the web. Yes, Apple has been successful at introducing a product we don’t really need for hundreds of dollars, but the iPad does a lot more than just video, and in the case of the iPad 2, video calls. Oh yeah, and that video calling thing? Watch Apple make it a hit. I still think video calling is a killer app. Just not for the UMI or the Ojo.


Amazon has launched a new Kindle initiative and product, whereby they run full screen screensaver ads and homescreen footer banner ads on e-reader hardware in exchange for a $25 discount. The WiFi-only “Kindle with Special Offers” runs $114, versus the original $139 ad-free Kindle 3. As Harry McCracken points out, the one time savings runs only about 18%; he wonders if this product might more appeal to those interested in the deals themselves rather than the small discount.

Like Harry, I suspect this is a bit of an experiment on Amazon’s part. And why we’re not seeing this Kindle rev launch at the $99, or lower, price point. Can Amazon generate a large enough stable of advertising partners to keep this going, will a sizable percentage of readers take action on the ads, assuming an even more sizable quantity of Kindle purchases. Continue Reading…