The Online Reporter

Research, Trends and Insight into the Digital Media, Consumer Electronics & Broadband Industries

A Millennial Reviews Sling TV

Part of an occasional series of product reviews by staff at The Online Reporter – this week, Sling TV

By Kendra Chamberlain

I don’t watch linear TV.

In fact, I greatly dislike linear TV, not just the commercials but also the navigation, the fact that it operates on its own schedule and not my schedule, and that I can’t watch anything without being interrupted with a commercial break.

I am a Millennial.

That means I remember the time before Netflix and YouTube, when I had all my favorite channels memorized.

Needless to say, I don’t memorize any channels anymore, which makes finding something to watch on linear TV even more frustrating on those rare occasions that I have the opportunity to do so.

I don’t enjoy channel surfing. In fact, I find it stressful.

I am also a pay TV cord-never, and a broadband cord-lover.

I find browsing recommendations and genres rather relaxing, as long as I have all the info I want right up front. I launch Netflix when I am ready to settle in for the evening. I often go on campaigns, where I become obsessive over one TV show at a time, waiting patiently each day until the evening arrives and I can return to the world of “Broadchurch” or “Doctor Who,” or “Daredevil.”

And I watch YouTube casually, for example when I am bored, or when I want to learn about something, or watch a music video, or am killing time, or am not quite ready for bed…the list goes on.

Sling Take Back TV

Sling TV: service taken to task on this page

I tell you this to give you an idea of my approach to “TV” which is virtually synonymous with “Internet-delivered video” in my house. I have spent the past two weeks with Sling TV, Dish Network’s Internet TV service. I watch it through my Xbox One on the TV set.

Sling TV strikes me as something almost great, with emphasis on “almost.” Here are the Goods and Bads of the service that I’ve found:

Good: Very cheap, $20 per month plus $5 for add-on channel packs.
Bad: Only one account per subscription, with virtually zero personalization. It feels very one-way, like regular TV, and there’s no recommendations.

Good: Available on many devices.
Bad: Only one stream per account, so really only one device at a time; in a household of two, that’s a problem. Do we want really want to pay $40 so that we each can watch Sling? No of course not.

Good: Content add-on packages offer some degree of choice.
Bad: None. I don’t have any problems with this.

Good: No more TV channel numbers, but instead TV channel logos, and even genres to browse.
Bad: It still uses an EPG navigation. Why does the guide have time slots? Does anyone care what time something airs anymore? I don’t.

I find this navigation very annoying, and yes, stressful, because it replicates regular linear TV. I don’t care for the EPG at all. I don’t care what’s coming up on the TV guide in the next hour, or what played earlier in the day. I will never care about the time slots of TV shows. I only care about what I want to watch now, whether “now” refers to a weekday evening or 2 am on a Saturday or lunchtime.

Good: A small but growing on-demand catalog
Bad: On-demand titles are impossible to find. Sling TV’s on-demand library is spotty, with some channels offering catch-up TV features, and some channels not offering it all.

I don’t mind the inconsistency so much as the lay out. On-demand titles are peppered throughout the guide, which operates much like a traditional TV guide. It shows the viewer what’s currently playing, as well as what’s to come, and for those few channels that offer catch-up services, it shows you what played earlier in the day, as a sort of visual cue that these titles are available to watch on-demand.

I’d prefer to have a tab that let me browse all available on-demand titles at once, instead of tying on-demand titles to the EPG.
Good. Everything is in 1080p!
Bad: Sometimes the interface glitches out.

I’m not talking about the picture being pixelated because of bandwidth issues, I’m referring to glitches that run from changing the channel on its own to restarting an on-demand title randomly or freezing on a frame for minutes at a time – those type of glitches. I’m not sure if the issue is with Xbox, Sling, or the Sling app on Xbox. These have been very minor however.


Millennial Vs. Generation X Habits

I’ve meticulously observed my own habits as they’ve formed with Sling TV. After the initial exploratory period, I found myself drawn mostly to the channel H2, and then, mostly because it seems to be on a constant Alien or UFO-related marathon, which I love. Watching these programs put me in the mood for an alien-themed binge watching campaign. In the evenings, I would turn to Sling TV, to H2, and see if any alien shows were on. If they were, I would happily watch; if not, I would exit Sling TV and turn instead to Netflix to find something alien-related to watch. I don’t watch any of the other channels habitually.

After one week of the basic package, I added on the movie package that offers a number of EPIX channels. The EPIX films are great; they’re typically more recent than most of Netflix’s fare, and the on-demand library is fairly large for Sling TV standards. I’ve gotten some good use out of the add-on and am happy with it.

While I am squarely a Millennial, my housemate is a true-blood Gen Xer, and I have observed his viewing habits with great interest as they definitely differ from my own. In fact, the Gen Xer was the one to suggest a joint pay TV subscription for the house. I countered with Sling TV, knowing full well it was only $20 per month, and that I probably wasn’t going to watch much of it.

The Gen Xer is getting much more out of Sling TV than I am. I’ve noticed he likes to put CNN on the TV set, muted, and then spend all evening staring down at his laptop in front of the TV. I prefer to stare down at my laptop in the kitchen, personally.

The Gen Xer is also much more comfortable channel surfing than I am. He doesn’t mind scrolling through the list of channels, pausing at each one to see what’s on, and then scrolling back through the list once he’s made a decision.

We have similar content tastes, but we differ in the how; for him, Sling TV is a godsend: the cable channels that matter to him, and at a low price point to boot. For me, it’s more meh: sometimes I find something I want to watch, but mostly I scroll through the channels and then go back to Netflix, where I am in complete control and can watch whatever piece of content I see.

And this brings me to my conclusion. Sling TV won’t likely appeal to many viewers who prefer, like myself, to watch video on-demand; it absolutely appeals to viewers who enjoy the linear-ness of linear TV, but don’t want to spend a lot on a pay TV package, ie the cord-shavers, and perhaps even the cord-cutters. Cord nevers, I’d bet, won’t find much to interest them with Sling TV.

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More Details about Verizon’s Internet TV Service Surface

Verizon’s late-arriving mobile Internet TV service will be called “Go90,” and will offer full TV episodes from certain networks, music videos and exclusive short-form content to viewers to stream to mobile devices.

That’s according to a test Website for its upcoming OTT service that Verizon released by accident this week, resulting in reports based on what was gleaned from the site before it was taken down. According to the site, it will also offer “exclusive events” and sports programming.

Verizon has confirmed it will begin recruiting beta-testers for the service and apps in the coming weeks.


Verizon: major name content deals announced


“We didn’t want to mimic TV—that’s just an appliance you rearrange your living room around,” the Website stated. “Instead, we wanted to create a mobile-first, video-based app that can keep up with you and your on-the-go social life. One that features completely immersive live and on-demand content, no matter where you are or where you’re going. No cord required.”

No cord is technically required at all for the service, because it will be delivered to wireless devices, but it will also be made available over-the-top.

Verizon hasn’t officially released many details about its mobile-first OTT service, which is due to launch sometime this summer, and has been pushed back to “late summer.”

Initial comments about the service, made by Verizon CEO Lowell McAdam, focused on offering some live content, some on-demand content, and exclusive access to some events such as music concerts or sports events, which would be delivered live to mobile users via LTE Broadcast technology, which Verizon calls LTE Multicast. The company has said the service will experiment with ad-supported offerings, subscriptions and pay-per-view.

Verizon has announced a handful of content deals for the service, including Viacom, DreamWorks Animation, Scripps Network Interactive, ESPN and CBS sports, along with online video networks AwesomenessTV and Vice. Verizon also owns mobile rights to NFL content, in a separate deal; and Verizon’s recent acquisition AOL will develop video exclusive to the service, including content from AOL-owned TechCrunch and Huffington Post sites. AOL CEO Tim Armstrong will head up the OTT service.

“The AOL acquisition greatly accelerates our digital media and advertising platform capabilities, which will become a critical element of our OTT strategy and our revenue growth for the future,” said Verizon CFO Fran Shammo, speaking at the recent quarterly earnings call.

While the service will be available over-the-top, Verizon plans to give some perks to its own wireless subscribers. The service will offer some content exclusively to its own mobile subscribers.

Verizon had big plans for the service last year, but Shammo admitted it’s had to make to some concessions to meet its launch target. “It will be initial launch and as the year goes on it will progress,” Shammo said. “This is a lineup that is really around all live-type news clips and sporting events. So very different than what anyone else is bringing to the marketplace.”

Shammo hinted the LTE Broadcast will be an important feature in the Internet TV service.

“All the phones that we sold in the fourth quarter have…

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VidCon 2015: YouTube Collides with TV

-Online Stars Shine at VidCon 2015
-While TV Nets Struggle to Tread Water

YouTube is becoming more mainstream by the quarter, and never has that been clearer than over the past few weeks, which saw the biggest year yet for YouTube’s annual VidCon, juxtaposed against a less-than-stellar outlook for linear TV ratings and pay TV quarterly earnings.


Vine’s Andrew “KingBach” Bachelor: Justin who?


Millennials and Generation Z viewers prefer online media over linear TV – the studies underscoring this point have been numerous so far this year. Google’s chief business officer Omid Kordestani said last week that YouTube reaches more viewers aged 18-49 than any pay TV network in the world, and it’s hard to argue with that.

YouTube watch time is up 60% over last year. YouTube stars graced the cover of Variety magazine recently in a series that covered the rise of the digital stars and their undeniable significance in pop culture.

“You’re the stars of today,” said YouTube chief Susan Wojcicki, speaking to content creators at VidCon, which is held for YouTube creators and fans. This year it drew 20,000 attendees.

The backdrop to YouTube’s shining diamond play buttons – which were given out as gifts to those content creators that have over 10 million subscribers – is a TV industry that is facing serious trouble.

This week, Bernstein analyst Todd Juenger released a report entitled “Is Viacom the Next Eastman Kodak?”, in which he predicts that the once-dominant media firms and TV networks are being replaced by digital alternatives. This is particularly apropos for those networks that target younger demographics, such as Viacom. Younger viewers are “the segment of the population that’s most rapidly and definitively abandoning linear TV,” Juenger states.

The report comes just a week after Susanne Daniels, MTV’s former president of programming, has signed on to YouTube as head of original content development. The move is a clear indication of the times: Daniels isn’t the first TV exec to abandon the linear ship, and she won’t be the last.

Meanwhile, YouTube is pursuing a programming strategy to finish off linear TV.


Internet Killed Television

At VidCon, attendees were sporting shirts that read “Internet Killed Television.” So it’s with a touch of irony that Viacom’s Nickelodeon held a casting call at the conference, looking no doubt to find the next big teenage star.

It may be a first for both VidCon and Viacom, but it wasn’t be an isolated phenomenon; Universal Studio was also scouting VidCon for talent for its upcoming “Jem and the Holograms” movie; and NBC’s “The Tonight Show with Jimmy Fallon” had a booth set up, recording clips of fans lip-synching for a segment that later appeared on linear TV. It’s worth noting that over 70% of “The Tonight Show” audience is watching video online now, not on TV, according to NBC.

And it’s worth noting that Katie Couric opened the conference with an on-stage interview with BuzzFeed’s Ze Frank and YouTubers Grace Helbig and Joey Graceffa. Couric, we’ll remind readers, a veteran news anchor for three of the big broadcast networks in the States, has since left linear TV to head up Yahoo’s news division as global anchor.

As John Green, VidCon cofounder, YouTuber and author, noted in his keynote address at the conference, “Great video is being made off television.”


TV Isn’t the ‘Dream’ Anymore

TV networks have recognized the shift in power, and now look to YouTube to find content and stars. YouTube, like Instagram and Vine, have become self-sustaining pools of talent for agencies and media firms to fish in. Nickelodeon is already broadcasting a few TV shows that either star YouTubers or are related to the platform. Take the show “React to That,” a linear TV program based on YouTube’s The Fine Bros’ popular Web series “Teens React.” Nickelodeon also airs a “variety show” with YouTube multi-channel network (MCN) AwesomenessTV; and YouTube star GloZell Green will appear as a guest on a new sitcom that will appear on the network this fall.

This type of cross-pollination has occurred over the last three years. The difference, which has become so apparent this year as opposed to last year, is that TV isn’t just competing with YouTube, it’s being left behind.

Green hinted at this paradigm shift in his keynote address. “I couldn’t have imagined that YouTubers would be turning down traditional TV opportunities because, as a friend of mine recently said, ‘Why would I take a pay cut for the privilege of not owning my intellectual property?’” he said.

YouTube has decided two years ago it wanted to fashion itself into something of a TV alternative. It began funding creators to help them develop channels of programming; it promotes its top stars with big splashy billboards and metro adverts; it’s created a number of programming positions within its own organization, including heads of scripted content, family entertainment, and comedy. And while larger media firms and TV networks are circling the platform looking for talent to snatch up, YouTube is signaling to its top creators that anything they want to do on TV, they can do on YouTube.

“When we have creators, and those creators have large fan bases, and other media companies are coming to them and saying they want to do X, Y and Z with them, I’m looking at that saying, ‘Well, why can’t we do X, Y and Z with them?’” Wojcicki said at VidCon.

And on YouTube, creators aren’t limited by time slots or platforms. They have access to a global online audience that can be as big as they can make it.


VidCon Isn’t Just about YouTube

The conference, which has bloomed over its five year history, isn’t just about YouTube either. Online celebrities from Vine, Snapchat, Twitter and Instagram are present at VidCon, and are edging in on YouTube’s popularity. Take KingBach, a Vine celebrity that has generated over 4.5 billion views of his content on Vine. He’s more popular than teen star Justin Bieber on the platform.

Meanwhile, platforms such as Vessel and Facebook – also present at VidCon – are edging in on YouTube’s online video business. Vessel is seen by YouTube creators as an opportunity to generate more revenue; but Facebook is seen by YouTube as a competitor for advertising dollars, and consequently, Facebook ultimately poses the larger threat to YouTube’s business, even if Wojcicki won’t admit it.

Together, all the online video platforms are taking advertising dollars away from linear TV. Overall, digital ad spend received $1.5 billion from traditional TV advertising outlets during the 2014-2015 TV season, according to Standard Media Index, and most of that money came from OTA broadcast TV networks. Online video makes up only a small portion of that, but it’s growing at an impressive rate.

And YouTube creators have a message for advertisers…

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The Online Reporter 847 – Sept 27-Oct 3, 2013

Issue 847       

27 September – 3 October 2013




   Amazon Upsets the Tablet Market’s Apple Cart (and Samsung’s and Microsoft’s)

   4 Takeaways from Netflix at the Emmys

   Iger to Pay TV Operators: Get Used to Lower Margins

   Microsoft Now the Sole Supplier of Windows RT Tablets




   The Battle for Streaming Rights Heats Up in US

   Lovefilm’s iOS App Gets IMDb and Airplay

   Viewers Are Building Their Own TV Everywhere Services




   What Will Xbox TV Look Like?




   Appscend Offers 3 Lessons for the Second Screen






   Microsoft Updates Its Surface Tablets

   Lenovo’s $249 ‘Entertainment’ Tablet Shows How Far Microsoft & Intel Have to Go

   Lenovo Cuts Prices of Intelbased Windows Pro Tablets

   Dell to Aim Its Next Windows Tablets at the Corporates

   Tesco Launches Its Own £119 ($190) Hudl Tablet




   HomePlug in Europe

   Home Networking Is Transitioning to 11ac Wi-Fi




   Microsoft May Be First with Gaming Console in China

   Microsoft to Use Kinect to Make Xbox One the King of the Living Room

   Roku Strikes Back




   AT&T Joins FON Wi-Fi Service

   Mobile Wi-Fi Must Meet Roaming Challenges Head on

   Verizon Takes First Step toward Nationwide Wireless In-Home Broadband Network




   On-Demand Viewing Is on the Rise, Thanks to OTT Services

   Linear TV Is First Stop for Entertainment for Streamers




   Portugal Telecom May Be Trialing HomePlug 2, Too

   Apple TV Moves Away from the PC

   A Tap of an iOS 7 Device Can Automatically Set up Apple TV

   Time Warner CEO ‘Sees Growth’ for HBO/ Broadband Subscription Bundle

   Sky Deutschland CEO: OTT Service Economics Aren’t Great

   Viacom: A La Carte Is Not the Answer

   Aereo’s Kanojia Warns Stakes Are High for Court Battle

   Netflix: HBO Go Should Go Standalone

   An iPhone Inc Would Be 9th Largest Dow 30 Company


THE ONLINE REPORTER is published weekly by Rider Research; 13188 Perkins Road; Baton Rouge, LA 70810, USA Telephone: 1-225-769-7130; Fax: 1-225-769-7166;


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Amazon Upsets the Tablet Market’s Apple Cart (and Samsung’s and Microsoft’s)

– Stunningly Low Prices

– Remarkably High Performance

– Breakthrough New Services


Amazon may well have upset the tablet market’s apple cart this week by announcing two new breakthrough Kindle tablets and slicing the price on the existing Kindle Fire HD to $139. It could especially impact sales of Windows tablets and Samsung’s Android tablets.


Want the tablet with the fastest processor?


Want the tablet with the highest screen resolution?


Want the least expensive tablet?


Want the tablet that has easy access to the most books, movies and music?


Want to buy the tablet whose maker is more interested in you using it than in just selling it?


Want a tablet with a “Mayday” button that gets you immediate access to a live tech support person that you can see?


The answer in every case is an Amazon Kindle, according to Amazon chief Jeff Bezos.


Highlights: The entry-level model is an appealing $139, has a faster processor and higher resolution display than the prior entry-level Kindle. The new 7-inch and 8.9-inch HDX models have the highest-resolution of any tablet on the market now and the fastest processors ever used in a tablet. Video can be streamed to a smart TV or game console; it’s done from the cloud, which leaves the Kindle free for other uses such as browsing. There’s a low-power mode for reading eBooks. Shows from Amazon Prime can be downloaded for viewing when offline. A “Mayday” panic button summons a live, flesh and blood tech support person 24/7 in a small window for assistance. A new magnetic jacket –  available in eight colors and leather or polyurethane –  folds to serve as a dual-position stand.


First the prices because they are so appealing: How can anyone that wants but hasn’t yet bought a tablet not be attracted to the $139 Kindle Fire HD? How can anyone resist the appeal of a product whose top-of-the-line Mini tablet is $229 or whose top-of-the-line 8.9-inch tablet is $379?


Kindle Fire HD with 8GB $139, which is only $20, which is only $20 more than the new Kindle Paperwhite eBook Reader

7-inch Kindle Fire HDX $229

8.9-inch Kindle Fire HDX with 16GB $379


The $139 Kindle Fire HD has been upgraded to have the same high-resolution screen at 1280 x 800 pixels that the prior top-of-the-line Kindle Fire had. It also has a faster dual-core 1.5GHz processor and dual stereo speakers. Not bad for $139.


All three new Kindles have Amazon’s new Fire OS 3.0 operating system that’s based on Android and has improvements such as improved touch responsiveness.


The two new HDX models have Qualcomm’s quad-core Snapdragon 800 processor, which is its top-of-the-line chip for tablets. Amazon said they are three times faster than prior Kindle Fires. They are four times faster at performing graphics functions. Both are slimmer, narrower, shorter and lighter than the prior Kindles.


The display on the 7-inch HDX model has 1920 x 1200 a resolution, which gives it 322-pixel density. The 8.9-inch HDX has a pixel count of 2560 x 1600, which is 339 pixels per inch (ppi). The pixel density of both HDX models is higher than the 9.7-inch iPad’s Retina display and better than the low-res screen on the iPad Mini.


A new “Mayday” button on the HDX tablets summons a tech support rep for immediate help with resolving any issues. The rep can take over operations of the tablet if need be. The user can see the rep in a live video but the rep cannot see the user. Bezos told CNBC, “You can press this button, and a tech support advisor will appear on your screen and copilot you through anything you might wanna do. They can draw on your screen, show you how to do things.”


The 8.9-inch HDX model has a high-resolution screen and an 8-megapixel camera.


There will be LTE versions of both HDX models later this year at $100 extra.


It’ll be a few weeks after Amazon starts shipping the new Kindles until we learn how they actually perform but based on the initial view, they seem very impressive –  and there’s no avoiding their low prices, which will cause some to ask, “Why buy a pricey iPad, Galaxy or Surface when the Kindles offer so much for so little?”


Amazon Makes Money When Kindles Are Used, Not When They Are Sold

Bezos made it very clear that Amazon is developing and marketing its Kindle tablets for one and only one reason –  to sell content. Amazon does not make money on the devices, he said, but is counting on them to increase Amazon’s main business: creating and delivering digital content, like e-books, movies, TV shows, and music. He said on CNBC, “We think we’re better aligned with our customers if we make money when people use our devices, not when they buy them.”


Apple and Google would like to make money at both ends. Other tablet makers who don’t have online stores are entirely dependent on making their money on the tablets. Amazon’s strategy will put increasing pressure on their bottom lines.


The NPD Group said that in the US during the May-July quarter, Kindles were second only to Apple’s iPad in market share:

Apple’s iPads 48%

Amazon’s Kindles 17%

Samsung’s Galaxy line 8%

Source: NPD for the US market


Keep in mind that at $139 the Kindle Fire HD will be a big seller during the holiday shopping season. It’s so close to the under-$100 price that it’ll be a no-brainer gift for many budget-minded shoppers, especially considering comparable tablets sell for $150 or more.


All three Kindles will be a major barrier to Microsoft increasing its sales of the ARM-based version of its Surface tablets whose prices start at $349 –  and that’s for last year’s model. This year’s entry level Surface starts at $449. The entry-level Kindle is less than one-third of that. A budget-minded family, and there are lots these days, could buy three Kindle Fire HDs for less than one Surface 2.


The top-of-the-line Kindle HDX with an 8.9-inch screen at $379 goes for less than the base-level new Surface 2’s $449.


It’s a different story for the Intel-based Surface Pro 2s, of course. Microsoft and other makers of Windows 8 tablets can make a case that the full-blown version of Windows is what the corporates should be buying. But they had better be pretty good salespeople because the Pro 2 models start at $899 and stretches up to a hefty $1,799 and that does not include Microsoft’s Office suite and some accessories.


Price Comparison

3 Kindle HDs $520

2 Kindle 7-inch HDX $460

1 Kindle 8.9-inch HDX $379

1 Surface 2 $449


Amazon also has one eye on the corporate market and has started adding features that will appeal to it.


In the consumer market, Amazon needs to accelerate its efforts to put its apps on every smart TV, Blu-ray player and net-top box. Beyond that it needs to develop its own net-top box as Apple, Google and Sony have done.


And, because as Bezos knows, content is king so Amazon needs more of that for its OTT services, both original and previously aired. It has a ways to go to catch up with Netflix and Hulu.


Beyond Hardware

Amazon is following Apple’s trail in integrating hardware, software and services. It users data from the IMDb movie database, which Amazon owns, for an “X-ray” feature that allows viewers to see the name of a song in some movies and TV shows they are watching. Of course they can then buy the track from Amazon’s music service. Viewers can see a list of all songs that are in a show and go directly to the point where the songs are playing.


Listeners can see the see song lyrics when they play songs they have purchased from Amazon. Clicking on a point in the lyrics will move the player to the same point in the song.


Viewers that use Amazon’s video player on smart TVs that have it or on Xboxes and PlayStations can follow simultaneously see information about actors and trivia related to the show being shown on the TV.


Instead of streaming from the tablet to the TV, Amazon streams from the cloud to the TV, which leaves the tablet’s processor free to do other things such as browsing or email. However, that only works with TVs or net-top boxes that have Amazon’s app.


Both Fire HDX tablets support Miracast, but that’s only for mirroring the tablet’s screen on the TV. There’s no way to do one thing on the tablet and another on the TV screen.


Bezos sounded like an Apple executive when he explained how these functions are made possible only by being in control of the hardware, operating system, applications, cloud infrastructure and services. Apple chief Tim Cook said this week, “new is easy, perfect is hard.”


Bezos said that the Mayday service was the “hardest and coolest.” He said it and the other services lie at the intersection of “customer delight” and “deep integration through the entire stack.”


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4 Takeaways from Netflix at the Emmys

-No More Doubts about Original Content ‘Paying Off’

-On-Demand Viewing a Must for Linear TV

-Expect More Big Names and Big Budgets in Online Video


After receiving 14 nominations, Netflix walked away from the 65th Annual Emmy Primetime award ceremony with a handful of awards, newfound gravitas and a whole lot of positive momentum moving forward. There are four important lessons to be learned from the Emmys this year, and how Netflix fit into the awards ceremony.


The Gamble Did Pay Off

First, and most obviously, Netflix made the correct decision in investing in original content, it made the correct decision in the type of content it chose to invest in and it made the right decision by sticking to its characteristic “all at once” model for release.


Netflix made history when its original shows received a total of 14 Emmy nominations across big and small categories alike. Netflix made history again when director David Fincher was awarded the Emmy for outstanding directing for his work on “House of Cards.”


Fincher beat out directors from “Boardwalk Empire” and “Breaking Bad” for the award, which by mere power of association has placed Netflix on par with pay TV channels AMC and HBO.


The series was also awarded for drama series casting, beating “Downton Abbey,” “Game of Thrones,” “Homeland” and “The Good Wife” ; and it received an award for cinematography for a single-camera drama series, beating “Breaking Bad,” “Game of Thrones” and “Mad Men.”


Netflix made history a third time during the outstanding drama series award, during which recipient Vince Gilligan – creator of “Breaking Bad” – said: “I did not see this coming. I thought it was going to be ‘House of Cards.'”


We’re betting Gilligan wasn’t the only one thinking “House of Cards” had a good chance of winning that category. Audiences were also surprised to see Kevin Spacey didn’t win an Emmy for best actor in a drama series for his work in “House of Cards.” Instead, Jeff Daniels received the award for “The Newsroom,” which caught everyone by surprise.


This year is certainly the first time in which a Web series has been a presumed winner at the Emmys in any of the major categories, let alone three of them, if you count best male actor, best directing, and best drama series.


The All-You-Can-Eat Model Was a Success

Ted Sarandos, Netflix’s chief content officer, is now referred to as “The Man Who Changed How We Watch TV” and “The Man Who Turned Netflix into an Emmy-Nominated Content Powerhouse.” That last one is from The Verge. The point is well taken: Netflix has changed the way we watch TV, and it is a content powerhouse now.


Critics of Netflix’s buffet-style release model were quieted last week, when Sarandos let slip an important subscriber metric at the Royal Television Society Cambridge convention. Critics initially warned that Netflix was essentially giving away its original content by offering viewers a month-long free trial when they sign up. That would give viewers interested in “House of Cards” just enough time to watch the series and then cancel the subscription before the free month was up.


Sarandos said Netflix estimates around 12,000 viewers actually signed up and cancelled before the month was up, which he deemed “a very tiny number.” Netflix still hasn’t released any hard numbers for any of its originals, but the company has categorized audiences as “TV-sized.”


More Stars Will Flock to Online Platforms

The nominations and awards it received demonstrate to studios and actors alike that Web video is a viable platform to do real and recognized work. Up until now, the heavyweight creatives in the movie and TV business have reserved the Web platform for pet projects and side experiments, but now everyone knows Web series can be taken seriously.


Then there’s Kevin Spacey’s recent lecture at Cambridge, which surely has served only to entice more creatives towards the online platform. In that speech, Spacey revealed two important tidbits about “House of Cards” :

-The series was passed up and turned down by a number of networks before it was brought to Netflix. Netflix said yes without a pilot episode and without a focus group involved.

-The producers had a lot of artistic leeway and freedom in production of the show. Spacey said Netflix never said no.


The Emmy buzz around “House of Cards,” coupled with this glimpse at the idyllic process of production at Netflix, indicates to everyone that online platforms are greener pastures for entertainment. Expect to see many more big names head to Web series, where they are given more freedom and creative license in production than through traditional TV and movie releases.


Linear TV Needs On-Demand

The final lesson to be gleaned here is that emerging on-demand viewing patterns are incredibly important for linear TV, and AMC’s “Breaking Bad” is the best example of that.


The series has been enjoying the limelight as of late, as its final season comes to a stupendous close after six years, and just as the series was awarded the Emmy for outstanding drama. The buzz is accentuated by the fact that halfway through the show’s life it was considered a dud – that is until Netflix began streaming the first few seasons. “Breaking Bad” creator Vince Gilligan personally thanked Netflix backstage for “saving the show,” Sarandos told The Wrap.


Netflix is largely credited with the series’ phoenix-like rise to prominence. The first few seasons, which found miniscule audiences on linear TV, became widely popular on Netflix, and thus was born the large, super-fan audience that helped boost the show’s latest (and last) season premiere audience to a whopping six million people.


That audience is still growing, believe it or not. Sarandos told The Wrap the most popular “Breaking Bad” episode that was streamed last Sunday was the pilot, meaning that among all the Emmy buzz and season finale buzz, new viewers are still being turned on to the show.


While “Breaking Bad” is an anomaly, the mechanism for its success isn’t. AMC’s “The Killing” is another example of this mechanism at work. The murder mystery series struggled to find an audience on linear TV, but was very popular on Netflix – so popular, in fact, that when AMC decided to cancel the show, Netflix stepped in with extra funding to keep the project going. “Arrested Development” is another example of a show that struggled in a linear setting but found life in the on-demand platform.


The point here is that programming schedules don’t dictate what and when viewers watch anymore, especially in terms of serialized TV shows. Season premieres and season finales are still huge draws, and weekly episodes of popular shows can be as well, but linear TV can benefit a great deal from offering on-demand access to programming, in terms of audience building and ultimately tune-ins.

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Iger to Pay TV Operators: Get Used to Lower Margins


Disney CEO Bob Iger told a Goldman Sachs investment conference that US pay TV operators need to get used to earning less profits, and to make more money out of their broadband assets, according to Faultline.


Iger was responding to a question about rising content costs that have upset pay TV services.


Disney owns ESPN, which has lately been blamed for how much it charges for and insistence on being included in basic pay TV bundles.


Iger said pay TV operators have seen growth in their more profitable high-speed Internet services and said that they may have to get accustomed to lower margins on pay TV.


Iger also said that Disney, an early supporter of iTunes, wants to be in the first wave when content players license new companies such as Intel.


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Microsoft Now the Sole Supplier of Windows RT Tablets

– (Just as Apple Is for the iPads)


Samsung, Lenovo and this week Dell have thrown in the towel on their Windows RT tablets, which means that the only source for them will be Microsoft and its high-priced $449 Surface 2. It appears that Microsoft has two possible ways forward with Windows RT: Slash the price of Surface 2 to below $300, possibly below $250 or discontinue it. As far as the Pro version is concerned, it has these choices: develop it into a product that corporates and schools will select over the iPad, work with Intel to develop a very-low cost processor that can compete against ARM-based processors (very likely) or work with makers of ARM-based processors to develop one that runs the Pro version (although that seems unlikely).


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Days of Bundling Are Numbered


Our recent “Faultline Revisited” report says that that over time, as online OTT models become prevalent, and as advanced discovery methods allow us to view what we want, more and more of the time, removing zapping as the main means for program selection, we shall see a slow breakdown in bundling TV channels, almost to the point where individual programs are “unbundled” from their channels.


But this is a ten year process that will not be shaken by a report, or a legal challenge or a ruling –  the slow rise of online content, and especially on demand viewing, will make unviewed channels a nonsense over time.


For an extract of the report and prices, please email and ask for it.


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The Battle for Streaming Rights Heats Up in US

-Netflix Flexes Its Streaming License Arms against Pay TV Providers

-Content Owners Find Themselves between Rock and Hard Place


OTT services and pay TV providers are engaged in a high stakes, zero sum game with content owners for digital rights, which have become a coveted asset for any entertainment service providers.


Pay TV companies have been pursuing more digital rights as part of their licensing deals with content owners, in hopes of offering more on-demand content to subscribers. Pay TV companies are doing this to keep competitive with on-demand OTT services, as more and more consumers shift viewing habits away from linear, scheduled TV watching toward the anytime-anywhere model employed by Netflix, Amazon and others.


The problem is that neither pay TV providers nor Netflix want to share those streaming rights, while content owners are simply looking to make as much money as possible shopping content around to many sources.


Digital Rights Are the New Battle Ground

Digital rights have become a contentious issue in content contracts, as pay TV providers have become increasingly interested in offering OTT-like TV Everywhere services to subscribers.


The conflict around digital rights has been quietly building. At The Cable Show this year, rumors sprouted up that Time Warner Cable (TWC) was asking content partners to agree to not license content to Netflix, as part of their negotiations.


The TWC-CBS dispute erupted months later over digital rights to CBS content – among other things, such as fee hikes. Reports revealed TWC wanted exclusive access to digital rights – meaning CBS wouldn’t be allowed to license its content to other streaming services, such as Amazon. It’s no coincidence that CBS was also in the middle of renewing its streaming deal with Amazon, in which Amazon offers catch-up TV episodes of CBS’ most popular show these days, the Stephen King project “Under the Dome.”


On-demand Is as Important as Linear TV

The bottom line is that on-demand viewing is becoming a larger and larger piece of daily entertainment habits. An on-demand library isn’t a complement to linear TV service; it’s now an integral component to a viewer’s entertainment experience.


Pay TV providers are starting to recognize the power of catch-up TV and on-demand libraries. Comcast has been something of a pioneer in this arena. It has begun hosting what it calls “Watchathon” week, in which Xfinity subscribers can catch-up on past episodes and even whole seasons of TV shows, in an exercise in OTT mimicry. The first Watchathon, held this past spring, met with remarkable results. “We blew away every major viewership record we have set in the 10 year history of Xfinity On-Demand,” the company said at the time.


Pay TV providers have struggled to offer the same type of on-demand services as Netflix and Amazon, precisely because they have been hung up on contract negotiations. Comcast is once again playing pioneer here, and has signed preliminary deals with 21st Century Fox to offer full past seasons of some shows to Xfinity subscribers on-demand. Wall Street Journal reported sources familiar with the deals said FX’s “Justified” and Fox Network’s “The Mindy Project” were contenders in the negotiations with Comcast, and said Fox is working on similar deals with other pay TV providers.


Content Owners Struggle to Maintain Balance of Power

Meanwhile, networks and content owners have found themselves in a sticky position between the OTT services and pay TV providers. On the one hand, content owners want to keep their digital rights non-exclusive, so that they can tap into as many digital revenue streams as possible.


Walt Disney Co’s chairman and CEO Bob Iger revealed as much this week, when he told an audience at the Goldman Sachs’ Communacopia conference that Disney is interested in signing more streaming deals with new OTT entrants, and said Netflix will face competition with new windowing and packaging. Disney was the first pay TV content partner to sign an exclusive streaming deal with Netflix that will effectively shift all Disney movies off of pay TV and onto Netflix for that coveted pay TV window.


On the other hand, pay TV providers and OTT services aren’t keen on the idea of paying lots of money to share digital streaming licenses.


Pay TV providers are less inclined to pay more in contracts for the addition of digital rights, which up until very recently weren’t worth much to pay TV providers. Once again, the TWC-CBS deal illustrates this point wonderfully. TWC was unwilling to license digital rights from CBS at the same rate that Netflix might do or that Amazon already is doing, and CBS understandably was unwilling to sign away exclusive digital rights licenses.


Netflix is beginning to throw its weight around the negotiating room in its dealings with content owners, too. Netflix’s chief content officer Ted Sarandos is telling some of its content partners not to license full seasons for streaming to pay TV providers if they want to get as much money as possible for streaming rights from Netflix, according to the Wall Street Journal. Netflix has argued that the more available a show is on on-demand services, the less valuable those streaming deals are to Netflix, and hence, the less money Netflix will be willing to pay for them.


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Lovefilm’s iOS App Gets IMDb and Airplay

-No Multi-Tasking Though


Lovefilm, Amazon’s OTT service in the UK and Europe, has released an update to its iOS app that combines IMDb information with its OTT service, and adds Airplay support for Apple TVs.


Viewers can now select what they want to watch on their tablets and then “beam” the content over to their TV sets, which is proving to be a very popular feature for watching OTT content in the living room. Users will also be able to search actors, directors and film titles using the IMDb database, and we assume discovery is improved with the help of the IMDb metadata.


There is only one feature missing from the app, and that’s the ability to multi-task while streaming content. Airplay mirrors content onto the TV screen, so the video has to play on the tablet in order to play on the TV screen – which means none of that useful IMDb information will be available to the user while watching the content on the TV screen. That’s a pity, as many viewers enjoy looking up information about actors, directors and titles on their tablets as they are watching TV and movies.


Other new features for the app include the ability to access and manage the Lovefilm watchlist on the tablet, improvements to discovery via faster TV show searching, new genres and collections to browse, and users can even browse the library offline.


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Viewers Are Building Their Own TV Everywhere Services


Cornel Ciocirlan, CTO of EMEA at Arris, warned pay TV providers that consumers wouldn’t wait for service providers to offer TV Everywhere services.


“Not delivering to the TV Everywhere promise means your customers are building their own solution, however imperfect,” he said, speaking on a panel at CTAM Eurosummit.


Viewers are building their own TV Everywhere services with OTT services like Netflix and Hulu, he said, and it’s up to the operator to offer an equal competitive service to its subscribers.


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What Will Xbox TV Look Like?

-Sports, Video Gaming TV and Children’s Shows


So far, we know more about the content features of Microsoft’s new game console, Xbox One, than we know about the games that will be released with it.


Even at the Tokyo Game Show, Microsoft couldn’t help but boast about Xbox One’s future content releases. Phil Spencer tantalized speculators last week when he mentioned the company is working on “hundred[s] of TV ideas,” in an interview during the show.


But what would a successful content strategy look like for a game console, and for Microsoft?


Enhanced and Interactive Sports Content

Acquiring licenses for and distributing sports content is the easiest and most effective way for Microsoft to offer compelling, exclusive programming to its Xbox Live subscribers.


Microsoft knows that sports is its best bet, that’s why the very first Xbox One commercial released showcased the deal Microsoft has signed with the NFL.


Watch the ad here:


The ad was released earlier this month, and is notable because as the first Xbox One commercial, it mysteriously doesn’t showcase any video game features – or any gaming at all. Instead, it highlights some of the new content features of the game console.


The deal with the NFL gives Xbox highlight reel clips and scores, and coupled with other Xbox One social features, it stands to serve as a social sports experience for its subscribers.


The company has also said it will be expanding its sports offerings. “We believe sports is a very interesting category globally,” Spencer, who heads Microsoft’s game studios, said at the Tokyo Game Show. “We’ll be expanding what we do in sports to bring more international sports into the mix.”


Interactive Educational Programming

Learning-focused programming for children has been trying to be interactive since “Sesame Street” puppets began acknowledging audiences at home on the show.


Linear, “dumb” TV’s forays into interactive programming has, up until now, involved a character in the show – Steve from “Blues Clues” or Dora from “Dora the Explorer,” for example – breaking down the fourth wall, posing a question to the at-home audience, and waiting in silence, while (writers hope) the children at home are speaking to their TV sets.


Imagine a program in which the child isn’t just answering one-way prompts from the TV set, but is actually interacting with the programming in real time and influencing the plot line, much like in a video game. The possibilities for this type of content are endless when you have a game console attached, especially one that has voice command and motion control, as Xbox One does. There is a huge potential market for this type of programming and Microsoft knows it.


We also know that Microsoft is interested in pursuing this vein of interactive content, because they’ve already done so. Last year, Xbox released a slate of interactive programming with “Sesame Street.” [Read more on that in TOR779, “Microsoft: OTT Bringing Major Changes, Not Just Method of Delivery.” ]


Demographic-Specific Video Game TV

Microsoft announced last spring that it would be releasing a series based on the “Halo” video game franchise, in a project in which Steven Spielberg is involved. Tellem described the project as a live-action “premium” series. This type of niche, video game-related content is a natural progression for Xbox, not only because it helps build the Halo brand, but also because it further blurs the fading lines between gaming content and gaming-related video content (see Machinima, which coincidentally has already released a Halo series and movie).


Live Events Broadcasts

Earlier this year, Xbox TV head Nancy Tellem hinted the company is working on developing interactive programming around live events, news and reality shows, speaking at the Fortune Magazine Brainstorm Tech Conference in Colorado.


Once again, Microsoft has actually already experimented with this: for the 2012 Presidential Election, Xbox set up an “Election 2012″ channel app for its Xbox Live subscribers to access and answer poll questions about the candidates. Xbox, in fact, live streamed the first debate between President Barack Obama and former governor Mitt Romney, and asked Xbox Live subs to answer poll questions during the event.


Challenges for Microsoft’s Xbox TV Vision

There are a multitude of studies released by a variety of sources to corroborate Microsoft’s claim that its Xbox Live subscribers stream a lot of content on Xbox 360 consoles. At the latest briefing with analysts, Spencer said 42% of Xbox Live subscribers stream 30 hours of video per week on the device.


But the Xbox 360 is not a net-top player, and neither will be the Xbox One. Here’s why:


-No one will pay $500 for a net-top box. The Xbox One is first and foremost a gaming console, to be purchased by gamers, for the purpose of putting in lots of hours playing video games. A casual gamer or non-gamer will never purchase an Xbox One for its entertainment features and value with that $500 price tag.


This is almost a moot point, however, because as it stands now the Xbox gaming market is much larger than the net-top box market, and Microsoft has sold many, many more Xboxes than Apple has sold Apple TVs.


That being said, it is in the realm of possibility that Microsoft can help parents and others justify purchasing a new Xbox One by highlighting its content features, giving the device a broader, family-wide appeal as a whole home entertainment system.


– All the content is behind a $60-per-year subscription to Xbox Live. With Xbox Live, viewers are essentially paying extra each month to access content they’ve already paid for, on the Xbox platform. For a gamer, the Xbox Live system makes sense, because it comes with added perks, but for a viewer, it presents obstacles to streaming content. Once again, this point is almost moot because there are more people with Xbox Live accounts than there are with Apple TVs and Roku players combined.


-Original content is hard to do well. As Amazon, Netflix, HBO, Showtime, AMC, and others have shown us, original content is hard to do well. Microsoft may be interested in original and exclusive content for its platform, but it won’t ever compete directly with Netflix or Hulu in the OTT space.


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Appscend Offers 3 Lessons for the Second Screen

-Social TV Dos and Don’ts

– How a TV Show Can Interact with Its Viewers, Instead of Vice Versa

-Engaged Viewers Aren’t Distracted


Appscend is a mobile development platform based in Romania. The company launched in 2011, initially focused on mobile apps, but has since been migrated to the burgeoning second screen space. Its first release was the second screen app for the TV show “Romania’s Got Talent,” which has received accolades for its success in terms of audience engagement.


“We hit some really big numbers with that app, and our technology really aligns with it,” Keary McClernan, business development associate at Appscend, told The Online Reporter. “We generated interaction with 20% of the country’s smartphone and tablet market.”


Appscend utilizes cloud technology in mobile apps, something that is relatively new and unique to mobile development.


“Using the cloud, we can entirely change the user experience in an app,” McClernan said. “Not just the content they’re shown, but the buttons they’re interacting with, and the features they’re interacting with.”


Appscend has focused on what McClernan called “branded second screen apps,” meaning apps that are specific to a show or network brand, rather than a generic TV app. McClernan said branded apps tend to deliver more bang for buck in terms of audience engagement – which is the ultimate goal of any second screen app.


“Branded applications made specifically for shows have higher levels of engagement, and therefore end up having higher levels of brand opinion, recognition and other ROI encouraging things,” McClernan said.


This week, McClernan held a webinar that focused on five components of the second screen that app developers, broadcasters and content owners have struggled to develop effectively in their second screen offerings.


We asked McClernan about some of her ideas on successful second screen strategies. You can see her whole presentation here:


Social Features Shouldn’t Dominate the App

The social components of second screen apps are oriented around tapping into the social nature of watching a TV show or going to the movies by enabling isolated viewers to connect with one another over the shared experience of watching TV. Second screen apps typically include Facebook, Twitter, or even an in-app chat feature, to enable viewers to connect with one another. While this is a valued component of the second screen space, the problem is that there are already two great apps for doing this: Facebook and Twitter.


“There are a lot of companies out there that are basically just re-creating social media,” McClernan said. “There’s not much motivation for users to download an entirely new app in order to just play around with Facebook and Twitter.”


Instead, McClernan said the social components of the app should be easy to access but shouldn’t dominate the app. “The first thing you see when you log into the app shouldn’t be a wall of people’s thoughts,” she said. “You’re already getting that on Facebook.”


Interactions between Audience and Content Should Be Two-Way

“Interactive” has emerged as a requisite tagline in the second screen space, but McClernan said many apps are missing opportunities to engage users by keeping the interactive components superficial.


“Just having your viewers tweet at the show, or use promoted hashtags, or share content on Facebook or write on an app wall, that does not make your show interactive,” McClernan said. “Interactivity is a two-way street.”


Viewers will be more engaged with the content and the app if they see their actions prompt reactions from the content-side, whether that be on the first screen or the second screen. In other words, viewers want to see their actions on the second screen have an impact on the first screen content.


An obvious and preliminary example of this would be when audience members can tweet at a show, and that tweet later appears on the first screen in a ticker or some other graphic. Discovery Communications has done a great job promoting this type of interactivity throughout its infamous Shark Week hashtag promotion.


McClernan said there’s room for more creative and innovative techniques to drive meaningful interactions between viewers and the content, and pointed to the Romania’s Got Talent app. Viewers are prompted to tweet at the show “shout-outs” to their favorites contestants. In response to those tweets, viewers received a short video from the contestant thanking them for the shout-out, which had been previously recorded. “This is a really great way to have two-interactivity without involving the first screen,” McClernan said.


Everyone who sent a tweet to a particular contestant received the same thank you video, but that didn’t detract from the satisfaction of eliciting a response from the show. “The viewer is receiving a video sent to them, as a direct result of their actions,” McClernan said. That’s valuable interactive engagement.


The App Should Enhance the Story on the First Screen

The second screen is a platform to further the viewer’s connection to the story. A successful second screen app should be driven by the first screen story, and should furthermore drive the viewer to the first screen story.


“Anything in a companion app that is not adding to or enhancing that emotional investment in the story is not beneficial to the viewer, and does little to encourage the viewer to participate,” McClernan said. “This is something simple that we can see is overlooked in a lot of companion apps.”


Most second screen apps focus on TV guides, recommendation engines, guides for on-demand content, check-ins and social features. McClernan said that while these features are useful to the viewer, they won’t drive the viewer to become more engaged in the content on the first screen, and in some cases may even detract from the first screen story.


Content owners and broadcasters have been particularly challenged to offer appropriately engaging features on the second screen without accidentally distracting the viewer from the first screen. Indeed, this challenge has proven so difficult that ABC recently announced it was essentially giving up on its second screen strategy all together for its serialized shows because it felt the app was too distracting.


McClernan rejected the idea that second screen apps are better suited for one piece of content over another. Viewers who multi-task while watching TV, will feed that impulse not matter what they’re watching. “Regardless of what show you’re watching, you’re already playing around on your phone,” she said. “It’s more about how do we make it so that our viewers are logging onto our app instead of doing whatever they were doing before on their smartphone.”


Once again, McClernan emphasized creativity and innovation. If the app isn’t successful, she said, that’s because there hasn’t been enough creative innovation around it. “There is a Facebook of second screen,” she said. “It’s out there, we haven’t made it yet, but it can happen.”


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It’s Not the News That’s Important


It’s not the news that counts. It’s the analysis that makes it useful to busy executives at companies involved in digital media.


We use what we have learned in our 16 years of tracking the industry to provide exceptional and highly accurate analysis and predictions.


We spot important technologies like Wi-Fi, DOCSIS 3.0, VDSL2 Vectoring, MoCA, HomePlug, plus trends such as the OTT services and their move to creating original content long before anyone else.


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Microsoft Updates Its Surface Tablets

– Better but Still a Long Way from Being the Best Tablets

– Unless You Need the Full Version of Windows

– And That Model Starts at $900 & Tops out at $1,800 plus Office & Accessories


Microsoft showed its next generation Surface tablets, the Surface 2 (nee RT) and the Surface Pro 2, this week, although it said it won’t start shipping them until October 22. They will initially be available in 22 countries including 15 in Europe although at slightly higher prices. That will help sales because the original Surfaces were not launched in Europe until after the 2012 holiday shopping season.


Both have a new dual-angle kickstand option plus a dual-purpose cover that extends battery usage and acts as an external keyboard –  although not with protruding keys like a PC’s keyboard. There’s also a $199 docking station that’ll be available in “early” 2014. It can support two monitors simultaneously, has three USB 2.0 ports, one USB 3.0 port plus, audio in, audio out and recharges the Surface.


The Pro 2:

The Good: The Pro 2, which runs the full-blown version of the new Windows 8.1, is lighter and thinner and has 75% longer battery life, a result of using Intel’s new Haswell Core i5 processor. Microsoft said it’s 95% faster than any laptop. It’s aimed at the productivity market, not for consumers.

The Bad: Prices begin at $899.


The Pro 2’s Price Barrier

$899 for the 4GB/64GB model

$1,799 for an 8GB/512GB model


$120 for the cheap keyboard/cover

$200 for the cover with a battery

Microsoft Office is not included

Included is one year of Skype/Boingo Wi-Fi access and two years of 200GB Skydrive storage.

It’s a very expensive tablet and a very expensive laptop.


The Surface 2 (the new RT model):

The Good: Battery usage has increased 25% It uses a new Nvidia-made Tegra 4 ARM-base processor and has the same 1080p screen the Pro has. The 2 starts with 100,000 available apps compared to the 10,000 the RT had at launch.

The Bad: Prices start at $449, only $50 less than the first Surface RT, which it has since been lowered to $349 until they are all gone.


Microsoft also put the name Surface on the back of the new tablets, not the company name as Apple would have done. That may mean nothing (unlikely) or that Microsoft intends to use the Surface brand for all its mobile products including those that come out of its newly acquired Nokia handset division.


An LTE version is due out sometimes next year but Microsoft did not say how much it would be or whether it would be the Pro 2 or the 2, or maybe even both. LTE connectivity seems to be less of a desired feature as cablecos and telcos build out their Wi-Fi networks with tens of thousands of hotspots. It’s said that it is now possible to walk the length and breadth of Holland and stay always connected to Wi-Fi.



The new Surfaces are almost like one of Microsoft’s Windows upgrades, a few fixes and enhancements but nothing to get excited about.


The 2’s $499 price is not going to take potential buyers away from comparably priced iPads or from Android tablets that are priced substantially lower.


The Pro 2’s $899 price is only going to attract corporates and a few productivity-oriented consumers that would otherwise have purchased Windows notebooks.








Screen Resolution/PPI


Amazon Kindle HD 7-inch








Amazon Kindle HDX 7-inch








Lenovo S6000 10.1-inch








Apple 7.9-inch iPad Mini








Amazon Kindle 8.9-inch HDX








Apple iPad 2 9.7-inch








Apple iPad 9.7-inch Retina








Microsoft Surface 2 with 10.6-inch








There are more than pixels when it comes to a screen’s viewability. Other technologies are used to enhance what meets the eye.


We are not saying that Microsoft could have afforded it, but to attract buyers, the Pro 2 needed to start at under $500 and the ARM-based 2 under $300. Microsoft is not like Apple in that it can price at the high end, as Apple did last week with its new iPhones, and still sell 9 million of them the first weekend. Microsoft reportedly sold only some 1 million of the prior Surface models in the first year and it will take some work to hit that number in the new model’s first year. Apple has sold about 155 million iPads.


As Rick Sherlund, an analyst for Nomura Securities told CNBC’s “Squawk on the Street,” “If you want a tablet, you just buy an iPad. The mass market [that] just wants a consumption device will just buy a pure tablet. This is more for productivity use. It’s a notebook that can function as a tablet, but I think you really have to appeal to the notebook, productivity buyer here, more so than a consumer who just wants a tablet.”


Perhaps the engineers at Nokia can soon show Microsoft a few tricks when it comes to designing low-cost hardware and developing an operating system that doesn’t require immense amounts of memory and processing power.


C’mon Microsoft! You can do better than this. These look like the Surfaces you should have launched a year ago.


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Lenovo’s $249 ‘Entertainment’ Tablet Shows How Far Microsoft & Intel Have to Go


Unlike Microsoft, Lenovo knows how to price tablets, at least its “entertainment” models that use the Android OS and ARM-based chips instead of Windows and Intel chips.


Lenovo’s $249 IdeaTab S6000 10.1-inch “entertainment” tablet, launched in July, clearly shows the price/performance difference between ARM/Android tablets and Intel/Windows tablets. It’s not as if any more proof of that is needed after the attractively-priced Kindle tablets that Amazon announced this week.


The S6000 is thin, light, has a quad-core ARM Cortex-A7 processor, Android 4.2 Jelly Bean, a 10.1-inch HD IPS multi-touch 1200×800 display plus the other usual tablet features such as Bluetooth, dual speakers, Wi-Fi (11n, not 11ac) and front and rear cameras. Battery usage is nine hours when browsing.


The Kindle tablets attracted attention from the press and analysts because of Amazon’s integration of content and services, plus some new features such as its Mayday tech support via a live video window. The lack of content from which to make money is a disadvantage for Lenovo and other tablet producers that make all their profits off of sales of their devices. Amazon says it does not care about making money from the sale of tablets; it wants to make profits by selling content.


The tablet market is not only about pricing. As Apple showed by selling nine million of its new iPhones during its first weekend, many consumers will pay more for hardware done right, software integrated with services and a zippy user interface. But price is also a factor as shown by the appeal of Amazon’s new Kindle tablets.


Amazon and Lenovo show how far Microsoft and Intel still have to go to produce a best-selling “entertainment” tablets.

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Lenovo Cuts Prices of Intel-Based Windows Pro Tablets

– And Promises New Models a la Surface Pro 2


Lenovo, like Microsoft, has been caught in the Surface doldrums and as a result has taken similar steps to what Microsoft did. It has reduced by 21% some of its Intel-based Windows 8 IdeaPad Yoga 13 tablets/Ultrabooks. Prices before discount range from $849 to $1,399. See:


Lenovo has also promised to launch a new model called the Lenovo Yoga 2 Pro that probably, like the new Surface Pro 2, has Intel’s Haswell processor and the 8.1 version of Windows. It has not yet announced prices. See:


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Dell to Aim Its Next Windows Tablets at the Corporates


Dell CEO Michael Dell hasn’t given on going after the enormous market for tablets in the corporates and he thinks the best way to do that is with tablets that run the full version of Windows and have Intel processors. It’s a strategy that has not yet succeeded but could still be a winning one.


Dell told AllThingsD that the market should expect “another significant wave of tablets from us in the coming weeks.” Dell said it would announce a new line of tablets on October 2. It’s expected to include a Venue-branded 8-inch Windows 8.1 tablet that uses Windows Pro 8.1 and has an Intel processor.


Dell has stopped offering its Windows RT line of tablets on its Web site. It recommends that shoppers buy its Latitude 10 tablet, which runs the full version of Windows 8 and has an Intel processor.


Having taken the company private, Michael Dell says the company intends to focus on the corporate market place. That’s a major switch from Dell’s beginnings when it focused on consumers and small businesses.


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Tesco Launches Its Own £119 ($190) Hudl Tablet

– Will Other Large Retailers Follow Amazon and Tesco?

Sell the razor at cost and make money off the blades.


If Amazon can do it, so can Tesco –  make and sell its own tablet that is. And if Tesco can, so could Walmart, Best Buy, Dixon’s or any other major retailer. Is it likely that retailers will become so taken by selling books, movies and TV shows that, as Amazon has done again this week, they will sell their own brand of tablets at or even below cost? Amazon and Tesco aren’t doing it to make money on their tablets; they’re doing it to make money selling content. Both have also started their own OTT services. It’s a formula that should frighten others into accelerating their own content sales ventures –  companies such as Apple, Google, makers of Android tablets that are trying to make money solely off their tablets, plus Microsoft and makers of Windows tablets.


Tesco, the UK’s largest grocer and the world’s third largest, has launched its own tablet, a 7-inch budget-priced Hudl that is intended to help Tesco sell digital products and services, much as Amazon has been doing.


The Hudl retails for £119 ($190), a price that’ll appeal to non-tablet users and gift givers. Hudl runs Google’s Android Jelly Bean operating system, comes in a variety of bright colors and goes on sale next week.


Like Amazon, Tesco has a complete array of OTT services: streaming, purchased and rented downloads and a music store. Tesco’s online stores compete against Amazon, Walmart-owned Asda and Sainsbury.


Tesco, which also offers banking, has put a button on the Hudl interface so that a single click connects the user to Tesco’s online shopping, banking, loyalty program and music and video services. Like Amazon, Tesco also knows its customers’ buying habits very well. It was the first in the UK with a loyalty program, which it uses it to track products and when customers buy them such as when you buy lots of dog food, so you must have a dog and might be interested in a special price on dog food. Or, that you buy a lot of movie DVDs and might be interested in the digital version. It uses that data to target ads and will no doubt use it to sell digital media to owners of Hudls.


Tesco, through its Blinkbox OTT service, launched the UltraViolet service in August 2013. Blinkbox, which Tesco acquired, has an estimated customer base of 1 million. Prices range from £0.99 and £1.99 for rental to upward of £10 for purchases.


Perhaps in anticipation of the Hudl’s launch, Tesco last week launched a campaign slogan “Coming Sooner” that claims Blinkbox has ten times more new releases than Netflix or Amazon’s LoveFilm. It has started offering Blinkbox gift cards in over 2,000 stores, something that other retailers with OTT services such as Walmart and Best Buy have not done.


Hudl users can also download apps from supermarket competitors to the Hudl.


Tesco’s online businesses are booming. It said that during its most recently completed fiscal year, its total online businesses –  digital media, food and nonfood products such as appliances –  generated £2.3 billion ($3.68 billion), about 5% of the company’s UK sales.


Walmart, the world’s largest grocer, followed a different path in TV sets and other CE products. It partnered up with Vizio, which has developed a low-cost line of TV sets that were initially sold only in Walmart and Walmart’s Sam’s Club. It never branded its own line of TV sets. Best Buy developed its own line of low-cost TV sets under the Insignia brand.


Back to Headlines




HomePlug in Europe

Not every telco is going to select as its powerline home networking technology.


France Telecom (FT) is a long time user of HomePlug devices and is unlikely to switch because a) it’s difficult and expensive to change technology horses in mid-stream, b) it reportedly owns some patents on the error-correction technology in HomePlug and c) may be considering the 11ac version of Wi-Fi.


Deutsche Telekom has already deployed some HomePlug but is said to be considering It may also be considering 11ac.


British Telecom has deployed some HomePlug devices because it was the only powerline choice but are reportedly preparing for a trial in the short term.


From all outward appearance, the 11ac version of Wi-Fi appears to be’s biggest competitor at the telcos who must put WiFi in every STB. However, it seems that the crowd’s biggest fear is still HomePlug.


You’d have thought that by now Broadcom and Qualcomm would have used 1905’s inclusion of Wi-Fi and HomePlug to make a strong case to the telcos for selecting the new AV version of HomePlug –  and maybe they have. Broadcom has certainly talked with the cablecos about a 1905 chipset that includes Wi-Fi and MoCA.


Back to Headlines


Home Networking Is Transitioning to 11ac Wi-Fi

– Support for Tablets & Smartphones Driving Demand


After years of multi-screen being simply a parallel Internet server farm that has little to do with existing pay TV infrastructure, we are really starting to get to the point where the transcoding gateway is finally here. But is it here to stay?


And this is where the major US pay TV upgrades are headed, largely cutting away their dependence upon fixed line connections such as MoCA and and relying instead on the new capabilities of 802.11ac Wi-Fi, in some cases augmented with software for tiered QoS, and in some cases not. We said last week that if all US homes served by Comcast, DirecTV, Time Warner Cable and AT&T all installed gateway devices currently in their RFP phase, at the majority of their homes in the next four years, it would amount to a design win of around 58 million homes, probably twice as many access points or more, and de facto control of the Wi-Fi flavor which hits about 10 devices per home, so an influence on say half a billion smart phones, tablets and PCs.


Obviously, no one is going to put out one of these without some form of wired connection, which means that MoCA is fine for another couple of years, and many will opt to upgrade the spec to MoCA 2.0, which still means a choice between Entropic or Broadcom or ST Micro, because MoCA is tricky to do, and MoCA 2.0 even trickier. But we see this largely as vestigial, and within two to three years, after this generation of devices is rolled out in the US, an increasing reliance on Wi-Fi will emerge, as it becomes more sophisticated, as more suppliers fully harness beamforming in Wi-Fi and as MESH configurations become more common and better understood.


These developments all support the idea of Homespots as well, and Wi-Fi offloads.


Whether ever gets a look in, in the US, is another matter, since the only major operator that may have gone down that route is AT&T and increasingly its behind the scenes activities suggest that it is already the most converted on the Wi-Fi front, so it may rely for another generation on HPNA for its fixed line connection, or join everyone else on MoCA, but we cannot see it risking engaging with a new fixed line architecture in for just a few years.


This is extracted from Faultline.


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Microsoft May Be First with Gaming Console in China


China has only recently lifted its ban on making and distributing gaming consoles within China but has specified they must be made in Shanghai’s free-trade zone and approved by “culture-related authorities.” The first one could be a Chinese version of the Xbox.


Microsoft and the Chinese media company BesTV will invest up to $237 million to form a joint venture that’ll launch a device that will provide OTT services including gaming, according to Xinhuanet. BesTV will own 51% and Microsoft 49%.


It is being called E-Home Entertainment Development and will provide “family games and related services.” BesTV provides broadband and IPTV-based pay TV service in the cities of Shanghai and Harbin.


Polygon reported that Microsoft said, “This is the first step of many to come for Microsoft and BesTV. We look forward to exploring new opportunities for bringing entertainment offerings to China, but we have no further details to share.”


BesTV is an ambitious company that, like China, seems willing to venture boldly outside its boundary. In July, BesTV acquired exclusive broadcast rights for all of Mainland China for the FA Premier League from 2013 to 2018. It has also reportedly developed a 3D high-definition television set-top box that will be available soon. BesTV is said to have the largest offering of TV programs in China, with 350,000 hours.


In 2011, it signed a deal with Samsung to jointly build a “smart” online platform that would deliver BesTV’s TV content and other Internet-based value-added services to owners of Samsung smart TVs. It said at that time that the deal with Samsung was not limited to smart TVs but also included PCs, mobile phones, and tablet computers.


BesTV already had similar deals with Lenovo and Kongka.


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Microsoft to Use Kinect to Make Xbox One the King of the Living Room


Clearly seeing an opportunity for Xbox One to become the dominant net- and set-top box, Microsoft’s Xbox advertising general manager Ross Honey called the coming Xbox One’s Kinect user interface a “game changer” in a keynote presentation this week at the Interactive Advertising Bureau’s Mixx Conference in New York. It was an appropriate venue because the new Kinect interface can automatically sense who is in the room, which would allow advertisers to select the appropriate commercials.


The Xbox is already different from other net-top boxes because Microsoft is contracting with pay TV companies to deliver their channels –  the only proviso being that the pay TV companies want to have their STB as the first one in the home.


The new Kinect user interface significantly differentiates the new Xbox from existing net- and set-top boxes such as those supplied by pay TV services and by TiVo. It may also differentiate the Xbox from possible NTBs from Intel, Apple and Google, all of whom have given some indication they want to be in the pay TV business.


Honey said the prior version of Kinect could only be used for “simple moves and casual games, [while] the new Kinect sensor is for something else entirely. It is a foundational part of the platform.”


Honey said, “Right now, TV is not a personalized device in any way. It is one size fits all. It doesn’t know who is watching. That is totally unlike phones, where GPS has made them personal and meaningful. Kinect is the unique technology on the TV that will make it magical and personal.”


Honey showed that the Xbox One will allow users to control their TV’s main functionality with voice commands, including creating a personalized “My Shows” list that is source-agnostic. It automatically looks at all sources –  pay TV, OTT or VoD –  for a particular show or movie. It’s not clear whether that list will include iTunes (unlikely) or Vudu (likely).


By listening for voices, Kinect will sense who is in the room and set the Xbox to that viewer’s profile. The aim is to make using the TV simpler, also a goal of Apple and Intel.


“Live TV should be an easy simple experience and increasingly it’s not,” said Honey, referring to the many remotes in the living room and the various “inputs” on the TV for selecting a source. “That changes on Xbox One. No memorizing channel numbers or fumbling remotes. And the experience is based on who is in the room. This is why we bet on Kinect.”


Microsoft, which decades ago rose to total dominance in the office, thinks it can do the same in the home. However, to do that, it’s going to need a less expensive model of the Xbox, some sort of Xbox One-Half.

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Roku Strikes Back


The new Google Chromecast, coming Sony Smart Stick and major updates to the Apple TV have not deterred Roku from launching new products and services. Roku may or may not be the most user-friendly net-top box but it certainly offers more OTT services than any other.


Roku’s three new models are priced the same as prior models and are sleeker with a less boxy look. They have improved video quality and new audio options. They can also stream from devices that have locally stored content, something Chromecast cannot do.


The $50 Roku LT still streams at only 720p; the $60 Roku 1 now provides 1080p video, up from 720p; the $80 Roku 2 still offers 1080p but now has dual-band Wi-Fi and an RF remote with headset connection.


All have a revamped user interface that prominently highlights M-Go, the joint OTT service from DreamWorks and Technicolor. M-Go competes against iTunes, Vudu, Redbox Instant and Amazon in selling and renting TV shows and movies.


Back to Headlines




AT&T Joins FON Wi-Fi Service


In yet another fairly Earth-shattering announcement, AT&T has signed up with the Wi-Fi roaming organization FON. This was a user movement that began in Spain and which has since grown to 12 million Wi-Fi units in telcos around the world, with a big cluster set in the UK, Netherlands, Germany, France and Spain.


The idea began simply enough –  if you let other broadband customers use your home Wi-Fi for free, then you can also use theirs.


While this has been clumsily rolled out in a lot of markets, with unnatural usernames and passwords being foisted on customers, meaning that many people fail to get the service to work, it is essentially the same as the Wi-Fi offload methods used at Free in France and among the cable TV operators in the Netherlands and Belgium, which this summer have deployed some 3.5 million of these home routers as public hotspots. In both cases software is downloaded to the home gateway which splits it into two SSIDs, one of which is limited in bandwidth, but available to the public on an either shared or paid basis.


AT&T has talked about this giving customers a better Wi-Fi experience as they travel the globe, but clearly this is all about AT&T offloading Wi-Fi from the phones of those same customers, to nearby Wi-Fi outlets, thus saving its own cellular network. Already AT&T customers can gain access to millions of FON international hotspots as well as AT&T’s 30,000 hotspots in the US. The AT&T Wi-Fi International App, which is available on iPhone, iPad and Android devices, lets AT&T customers on either the 300MB or 800MB AT&T Data Global Add-On package can access up to 1GB of Wi-Fi each month at no additional charge.


10m U-verse Subscribers by Year-End

AT&T also said that it would hit 10 million U-verse customers this year, made up of both U-verse TV homes and U-verse broadband homes. The company reminded everyone of the plans it showed for the first time in November last year when it said that it would spend $14 billion on Project Velocity IP (VIP) to upgrade and extend services to 57 million customer locations, which includes U-verse expansion, U-verse IP DSLAMs, upgraded DSL speeds, and bringing fiber to multi-tenant office buildings. Initially, this includes offering 45 Mbps U-verse broadband to 40 new markets and offering a 75 Mbps and 100 Mbps vectored DSL option later this year. Most new fiber is being added for enterprise customers.


This is extracted from an article in Faultline.


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Mobile Wi-Fi Must Meet Roaming Challenges Head on

By Philip Hunter


Wi-Fi has the prospect of dominating mobile communications and relegating 4G/LTE to the role of filler between hotspots, because it enables higher bit rates and is backed up by existing broadband infrastructure.


Largely because of lower backhaul and core network costs by exploiting the scale economies of broadband, Wi-Fi costs around 10 times less than cellular services per MB of data sent. Although that gap will narrow as 4G/LTE rolls out, which is more efficient than 3G, it will still exist, partly because many cell towers will continue to be more poorly served for backhaul than the average Wi-Fi hotspot connected to a broadband access network. That is why cellular operators have become so keen on offloading traffic to Wi-Fi.


But to succeed, carrier Wi-Fi must offer totally seamless roaming with automatic handoff between cells. Despite the advance of key standards, notably Hot Spot 2.0 and ANDSF (Access network discovery and selection function), that is far from a done deal. At present Wi-Fi roaming can be problematical for real time services like voice and video even between Wi-Fi hot spots, never mind for handoff between Wi-Fi and cellular.


A variety of recent tests have shown that the delay associated with roaming from one Wi-Fi access point (AP) to another can be disruptive to both voice and video sessions. In a way this is surprising given that transparent roaming between local APs has been desirable for enterprise wireless LANs ever since they were first deployed well over a decade ago.


This is extracted from Faultline. For the complete article, email and ask for FL517.


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Verizon Takes First Step toward Nationwide Wireless In-Home Broadband Network


We have been predicting that Verizon sees much of its broadband future, both mobile and fixed, in LTE.


Verizon Wireless (VW), still 45% owned by Vodafone, this week announced its first LTE broadband modem, which will appeal to consumers in areas where wireline broadband is not available. In addition to sparsely populated rural areas, think travelers that stay in no- or pricey Wi-Fi hotels, youngsters in their first homes, RVs, mobile homes, vacationers, hunting and fishing camps, disaster-stricken areas where wireline is down and areas that are likely to be hit by natural disaster such as hurricanes. Maybe even on a picnic at the park or woods.


VW says, “The router eliminates the need to search for Wi-Fi hotspots or pay hotel Wi-Fi and phone fees.”


The modem, made by Novatel Wireless, requires little power, which a generator can easily produce. It come with a battery backup and so can be used temporarily during a power outage.


The Verizon 4G LTE Broadband Router with Voice can connect up to 10 Wi-Fi devices and three Ethernet-connected devices to VW’s LTE broadband network.


There are three plans:


     Monthly rate on Service a two-year plan


   Voice only       $20

   Data only       $20

   Voice and data           $30


It’s not clear why someone needs the voice plan since any user must already have a VW cellular account –  unless they want to use an old-fashioned wireline phone.


The modem sells for only $30 when a two-year contract is signed for both voice and data. It’s $50 when used for only one service.


The in-home LTE broadband service has expected speeds of 5-12 Mbps download and 2-5 Mbps upload, according to Verizon Wireless. That’s sufficient to stream one HD video from an OTT service.


The router is $199.99 without a contract –  on a-month-to-month basis.


There’s a hitch: users must be a VW mobile phone subscriber and have one of VW’s Share Everything plans.


VW has now completed its network-wide LTE rollout and almost completed its FiOS fiber rollout. We consider this LTE broadband modem, which we have reported on previously, the first step, although tiny, in its bid to become a nationwide broadband provider. It is already nationwide in mobile phone stores and its Redbox OTT service.


It is going to take some significant technology breakthroughs before LTE broadband can match the speed and robustness of even today’s wireline broadband. So, at this point LTE broadband is only a supplement for providing broadband access where wireline cannot be reached or is not affordably reached. It’s not going to support a home where three TV sets are streaming HD videos from Netflix.


AT&T may be thinking Europe. Verizon is thinking US.


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On-Demand Viewing Is on the Rise, Thanks to OTT Services


-At the Expense of Linear TV


Increases in on-demand viewing of TV shows correspond to decreases in linear TV viewing, according to new research by IHS, and the US and UK are leading the shift away from linear programming toward on-demand viewing.


In the US and UK, linear viewing fell last year, despite the summer Olympics, while on-demand and catch-up viewing increased across both countries. In the US, linear TV viewing fell by 11 minutes in 2012, according to IHS.


The report said that US and UK viewers now spend, on average, more than 40 minutes a day watching on-demand or time-shifted programming. Over the summer, one in every six minutes of TV watched was on-demand and time-shifted, according to the study.


The culprit: subscription-based OTT services, IHS said.


“The US is a good example of a market in which OTT SVOD services have had a noticeable impact – on-demand viewing has risen by 10 minutes per person per day between 2010 and 2012, mirrored by a decline in daily linear broadcast TV viewing of 13 minutes per person,” said IHS television analyst Fateha Begum.


Other large markets in Europe are following suit: in the UK, France, Germany, Spain and Italy, subscription OTT services that offer on-demand content account for nearly one in every seven minutes of long-form viewing of TV online.


Back to Headlines


Linear TV Is First Stop for Entertainment for Streamers


-But Half of Viewers Check DVR and OTT Platforms First


Hub Entertainment Research released an interesting study that looks at what viewers default to when looking for something to watch on TV in a multi-screen and multi-platform entertainment ecosystem.


To get the report, visit:


With the advent of OTT subscriptions, on-demand offerings via iTunes, Amazon and others, catch-up TV services, pay TV VoD catalogs, live TV and the DVR, consumers are presented with a wide buffet of options for their evening entertainment. “The key question is no longer which services and devices viewers are using, but which they turn on first,” the report said.


The answer is, it varies. The study was conducted among 1,010 consumers who had indicated they watch “at least some TV from online sources.” Among those, half of respondents in the study released by said they check live linear TV first to find something to watch, while the other 50% said they check their DVRs, and/or subscription OTT services first.


Here are some other findings:


-DVR: Sixty-four percent of respondents said they have a DVR, and 21% of respondents said they default to the DVR first.


-PPV or VoD: Out of the 64% of respondents who have access to pay TV PPV or VoD only 2% said they check VoD first to find something to watch.


-Netflix: Sixty-three percent of respondents have a Netflix subscription, and 13% of respondents said they check Netflix first, which means 20% of Netflix subs said Netflix was their default choice. Netflix also accounted for 16% of total viewing time across respondents – which Hub deemed a disproportionately high amount of total TV viewing. That implies the consumers who do watch Netflix spend a lot of time watching Netflix.


-Hulu: Only 3% of respondents said they default to the ad-supported version of Hulu first, while out of the 8% of respondents who subscribe to Hulu Plus, only 2% said Hulu Plus was their default choice for watching TV.


– Zero percent of the respondents said they check Apple’s iTunes first.


The report also looked at what drives consumers to choose which sources, platforms and devices to watch entertainment on, ranging from UI considerations, ease of discovery, breadth of selection, flexibility and even the mood of the viewer.


“Consumers associate online sources like Netflix and Hulu with these attributes [access through multiple devices and ease of discovering new programs] more than they do traditional TV providers,” Hub said, “suggesting that if nothing changes, traditional set-top boxes may lose ‘input one’ status among more consumers in the future.”


The Virgin Media-Netflix Deal, Illuminated


One of the most striking points made by the study is that VoD and PPV catalogs are not nearly as popular as the other on-demand options for viewers, despite the fact that the majority of respondents have access to VoD or PPV services through their pay TV provider.


This data shows us precisely why Liberty Global’s Virgin Media decided to bite the bullet and integrate its VoD and linear TV offerings with the Netflix library on its STBs.


Once a Netflix subscriber lands on Netflix, the odds are they will find something to watch, and will remain in the Netflix silo. By putting linear, VoD and OTT services all together, Virgin Media is breaking down the silo walls, and keeping its content relevant and easily accessible to the viewer – indeed as relevant and accessible as its competitor’s content. This also ensures viewers are visiting pay TV offerings as part of their default entertainment stop.


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Pay TV/Media Industries to Undergo Massive Changes by 2018


– Sales of TV Sets to Decline Sharply


– 120m Home Hotspots Will Enable HD Video Delivery to Mobile Devices


– Half of Broadcasters and Cinemas Will Shutter


By the time we reach 2018, the pay TV landscape will be so distorted that homes that pay for TV will become a meaningless statistic, according to a new report called “The Faultline Revisited.”


Disruptive events will shape this industry dramatically, including a shift to mass video viewing on tablets and smartphones, the near collapse of the LCD TV market as screens become wall-sized, while second TVs in the home cease to be purchased at all. There will be a huge reduction in free-to-air broadcast TV, as the industry shifts to the Internet; cellular offload and LTE Broadcast will solve the problems of videos reaching cellular devices and 75% of in-home video viewing will also shift to the tablet.


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The Chart That Will Launch a Thousand Discussions


This chart appears in the new report “The Faultline Revisited – Disruption in Video Delivery from 2013 to 2023.”


For prices and a free extract from the report, please email


The 63-page report focuses on six major issues that will have the greatest effect on video infrastructure:


– TV will shift to OTT streaming


– Wi-Fi will become the leading wireless network for delivering content


– Some 75% of TV viewing will shift to tablets, savaging sales of TV sets forever


– Massive social viewing platforms will lead major motion picture releases


– Unbundling of pay TV channels will lead to the death of 75% of TV channels


– TV Everywhere will become the world’s largest app


The report is vital reading for anyone in every business layer of video and content delivery that doesn’t want to be caught in the crossfire and wants to build a strategy to survive and thrive in the ensuing eco-system.


To receive prices and a free extract of the report, please email a request to:


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Portugal Telecom May Be Trialing HomePlug 2, Too


An unnamed but usually reliable source has told us that Portugal Telecom (PT) is only trialing and has not decided to standardize on it. It is also trialing HomePlug. We’re expecting a significant announcement about HomePlug in mid-October but do not know whether it’s a win or a new product.


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Apple TV Moves Away from the PC


The new 6.0 software version for Apple TV net-top boxes marks another step away from it needing a PC to function. It includes streaming from iTunes Radio and purchasing directly from the iTunes Music Store. Users can sync podcasts and stream videos purchased from iTunes.


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A Tap of an iOS 7 Device Can Automatically Set up Apple TV


Tapping an iPhone with iOS 7 against a new Apple TV can set up the Apple TV’s system such as the Wi-Fi network and password, their iTunes Store account name and password plus their language and region preferences. The two devices use Bluetooth to connect and communicate.


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Time Warner CEO ‘Sees Growth’ for HBO/ Broadband Subscription Bundle


Time Warner CEO Jeff Bewkes said he’s open to the idea of offering premium pay TV channel HBO bundled with a pay TV-provided broadband subscription. “We see growth there for HBO in that,” Bewkes said, calling the combination “an offer you can’t refuse.” We’re not sure if he means pay TV providers can’t refuse that offer, or potential subscribers. Both would seem to benefit from it. Bewkes was speaking at the Goldman Sachs Communacopia conference.


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Sky Deutschland CEO: OTT Service Economics Aren’t Great


Brian Sullivan, CEO of Sky Deutschland, told an audience at CTAM Eurosummit that he doesn’t believe there are viable economics in OTT services. “I have a very hard time understanding the economics of standalone OTT services. There are 62 in Germany”¦and most of them are running at eight-digit losses,” he said, according to Advanced Television. Sky Deutschland launched its own OTT service “as a distribution mechanism” for its pay TV content.


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Viacom: A La Carte Is Not the Answer


Viacom CEO Philippe Dauman said consumers wouldn’t want an a la carte model for pay TV services. “It’s not good for consumers,” he said, speaking at the Goldman Sachs Communacopia conference. “The price to pick networks that you think you want now would go up in an a la carte world.” He said the current system enables a lot of choice for consumers for a relatively low price, and said consumers will recognize that. “People are fundamentally rational once you talk to them,” he said.


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Aereo’s Kanojia Warns Stakes Are High for Court Battle


Aereo founder Chet Kanojia addressed some of the wider implications of the court battles his OTT service is currently facing against the four major national broadcasters in the US. “To stop Aereo, you’d be stopping entire industries,” he said, speaking at the Goldman Sachs Communacopia conference. “The implication of not allowing private performance means there is more people going to pay performance licenses,” he said, maintaining that Aereo’s streams constitute “private performances” of OTA content. Kanojia said there would be particularly dire consequences for cloud-based DVR companies. In the meantime, Aereo has announced four more cities it will be launching in: Columbus, Cincinnati, Indianapolis, and San Antonio.


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Netflix: HBO Go Should Go Standalone


Netflix CFO Paul Wells told an audience at the Goldman Sachs Communacopia conference that HBO could tap into a much larger subscriber-base if it reconsidered offering HBO Go as a standalone service. “We believe that if they were direct-to-consumer, there would be materially more subscribers that would pay for it in the US,” Wells said. Netflix has said its potential market stands between 60 and 90 million in the US. HBO currently has 28 million subscribers, a million shy of Netflix’s current 29.86 million subscribers.

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An iPhone Inc Would Be 9th Largest Dow 30 Company


Here’s some perspective on the size of Apple’s iPhone business. Business Week points out that with the nine million new iPhones that Apple sold over the weekend, iPhone’s estimated $88.8m of revenue over the last four quarters exceeds those of 474 of the S&P’s 500 stock index such as Microsoft, Goldman Sachs, Amazon, PepsiCo, Dell, Google, Pfizer and UPS. An iPhone Inc would be the ninth-biggest stock in the Dow 30. It also points out the revenue from iPhones exceeds Apple’s revenues from all of its other products.


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– Intelligence for decision makers –

The Online Reporter 846 – September 20-26, 2013

Issue 846       

20-26 September 2013



 Vimond Offers OTT Solutions to Broadcasters and Operators

   ‘4K’ Blu-ray Disc Making Gear Announced by Singulus Technologies



   The Challenges and Opportunities of 4K

   Forget 4K, 8K Is Coming

   Questions Linger at IBC about Demand for 4K among Consumers




   Opera’s App Store Is a Hegemon among Smart TVs

   BT: BARB Should Measure Online Audiences

   Tesco Ramps up Marketing for Blinkbox

   Is Virgin Media-Netflix Deal the Start of a Trend? Or only a One-Off?

   Sony, Intel, Apple Had Better Hurry

   FilmOn Signs Up Deutsche Welles for News Content




   Netflix Premieres Bloomberg Businessweek Documentary

   Hulu has High Hopes for Its Original Content Programming

   Amazon Adds More Star Power to Its Original Series ‘Alpha House’

   Microsoft Working on TV Shows for Xbox One






   NVIDIA Launches $199 High-Res 7- inch Tablet




   ‘Hey Honey! I Got a New iPad for Free’




   Broadcom’s New HEVC Chips Enable 4K

   DIAL Beaming Technology Will Take over the Living Room

   ADB’s Graphyne & Ericsson’s Mediaroom Shine at IBC

   ActiveVideo’s HDMI Dongle’s Multiple UIs Can Be Used with Any Old TV

   Huawei Sticking with Windows Phones 8




   iiNet Selects Celeno’s 11ac Wi-Fi Chips for Next-Gen STBs

   Will Make a Clean Sweep of Telcos?

   D-Link Picks Broadcom’s 11ac SoC

   Battle for Global Wi-Fi Dominance

   Takeaways from a Presentation




   Amazon Adds Airplay Support to Instant Video

   Sony to Launch $150 Smart TV Net-top Box




   Strategy Analytics Declares Pay TV to Dominate OTT

   Over 1m 4K TV Sets Shipped in 2013

   Live Streamed Content Finds Life on Mobiles and Tablets

   All Time Record for DVD Rentals from Redbox Kiosks

   Nielsen: Viewers Are Streaming at ‘Breakneck Pace’

   Sandvine: Netflix Oversimplifies Its ISP Ratings

   26% Update to iOS 7 within 24 Hours

   Sony Intends to Sell 5m PlayStation by April 1




   It’s Time for LoveFilm to Become Amazon

   VisualOn Puts HEVC on LG Smartphones

   Roku CEO Names Google as Biggest Competitor – Not Apple TV

   Netflix Moves Its Place in the Industry Ahead of HBO

   Hulu Looks to Pay TV for Partnership

   Cox Pulls Plug on OTT Experiment

   Apple Never Intended to Offer a Cheap Phone

   Windows 8.1 Pricing Same as Windows 8

   Netflix Increases Its Original Content Budget


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Vimond Offers OTT Solutions to Broadcasters and Operators

-Now Offering OTT Feature a La Carte

-Expanding to North America, Too


Vimond is an online video platform (OVP)designed specifically for broadcasters looking to get into the OTT space. The Norway-based company launched in 2011, just ahead of the race for broadcasters to get online.


“The OVP space is actually quite heated, there are a lot of different platforms and a lot of different solutions out there,” Miguel Silva, EVP of sales at Vimond, told The Online Reporter. Vimond is currently powering OTT services for four operators in the Nordic region.


“In the Nordic region, and it’s fair to say in Europe, the broadcasters haven’t really been that worried about protecting the existing model the way to broadcasters in the US have,” Silva said. “So OTT is quite richer there, and you’ll find that almost everyone has an over-the-top service, on top of whatever they offer on cable.”


Vimond is about to expand its services into North America this year. “We’ve secured our first customer in the United States,” Silva said, “and we’re now rolling out an office in New York.” He wouldn’t tell us who the client is, but noted it is a recognizable brand. The service will be launched sometime before the end of the year.


Vimond’s Broadcaster Background

Vimond is the product of TV 2, the largest broadcaster in Norway. Silva said TV 2 began experimenting with Web video as early as 2000. “TV2 eventually started adding multi-screen features on different devices, leading to a full blown OTT service,” Silva said.


TV2’s OTT service was widely successful. “The money did follow,” Silva said. “If you look at the revenue distribution of TV2 over the course of 10 years, they tripled their revenue, and they grew the share of revenue that comes from end user subscriptions 10 percent, which is unique for a broadcaster.”


TV2 Sumo, the OTT service, has become one of the most popular.


Those results drew the attention of other broadcasters in Norway and across the region, who were interested to begin delivering content online, which in turn spurred TV2 to spin-off Vimond as a full-fledge online video platform designed specifically for broadcasters.


Vimond powers OTT services for TV4 Play in Sweden, MTV3 Katsomo in Finland, C More’s C Now, Filmnet and C Sports available across the Nordic region, and pay TV provider Riks TV Extra in Norway.


Vimond Video Platform

The Vimond video platform is a multi-screen solution that offers broadcasters and service operators the ability to quickly and easily deliver live and on-demand content online, across all devices.


“We know what a good editorial tool is,” Silva said. “We understand that broadcasters need to be able to integrate very complex architectures against legacy systems in the broadcast world.”


Silva said that means the platform is modular, meaning clients can pick and choose which components of the platform to deploy. “You don’t need to deploy all or nothing,” he said. “It’s a product you can mix and match different base functionalities and get economies of scale.”


All of the features of the platform are also supported by an API.


Features of the Vimond video platform include:

-Live and on-demand content

-Personalization for the end-user

-Multi-language audio, subtitles and closed-captioning

-Social media integration, chat, ratings and commenting

-Subscription authentication, management, payment


“The platform is feature-rich,” Silva said. “We consider ourselves really top of the line when it comes to the amount of features and ease of use.”


OTT Features Now Available to Use in Legacy Video Platforms

Vimond announced at IBC it is now offering some of its OTT platform features as standalone Web services for broadcasters or content owners to incorporate into their own video platforms. “We’re taking the best aspects of our platform, and creating Web services around them that will allow broadcasters to use our technology with their legacy architectures,” Silva said.


The new Web products include:

-Event analyzer: The event analyzer enables operators to insert chapters or event markers on a live video instantaneously, in order to create on-demand assets for a video immediately. “You’re now able to provide just that chaptering feature as a Web service, so that it works on other peoples’ platforms and on other players,” Silva said.

-Resume Playback: This feature enables end users to begin a video stream on one device, pause it and pick up back up on another device in the same spot.

– Device registration: The operator can configure how many devices can watch streams of content simultaneously.


Silva said Vimond hopes these Web services will help the company stay “one step ahead” of the competitors, by giving broadcasters and service providers the flexibility to incorporate Vimond technology into an OTT service without having to redesign or re-launch the whole service.


Vimond will be announcing new deals in the coming months, “some of them with global players,” Silva said.


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‘4K’ Blu-ray Disc Making Gear Announced by Singulus Technologies

– Holds 100GBs instead of Blu-ray’s 25-50GBs

– Does This Mean It’s ‘4K for Christmas 2012’?


Which comes first? The 4K Blu-ray player or the 4K Blu-ray disc?


Germany-based Singulus Technologies, which makes equipment that produces and replicates all sorts of optical discs, last week announced a product called Bluline III that can produce triple-layer Blu-ray discs that are capable of holding an entire 4K movie. Blu-ray discs from Bluline III can hold up too 100GBs rather than the 25-50GBs that current Blu-ray discs hold. Singulus is clear that it’s aiming the product at the 4K market by saying, “The triple-layer Blu-ray discs with 100GB storage capacity is the preferred playback medium for the new 4K technology.”


Singulus says it is “the global market leader for CD, DVD and Blu-ray disc replication equipment.” It makes and markets optical disc production gear and duplication systems for CDs, DVDs and Blu-ray discs.


Dr Stefan Rinck, CEO of Singulus said, “In time for the launch of the new Ultra High Definition Television Technology (4K or Ultra HD), we have developed manufacturing technology for the new three-layer Blu-ray discs with 100GB of storage




In April the Blu-ray Disc Association (BDA) said it had distributed a proposed specification for the industry to discuss as a step towards a final standard that manufacturers could use to produce versions of Blu-ray discs that have sufficient capacity, 100GBs rather than the current 25-50Gbs, to hold an entire 4K movie.


Victor Matsuda, chair of the Blu-ray Disc Association’s global promotions committee and Sony’s VP of its Blu-ray disc group said, “The BDA worked diligently to create an extension of the Blu-ray Disc format that leverages the physical structure of the design of the disc to create even more storage capacity. By using the existing Blu-ray technologies, we have created a long-term and stable solution for archiving large amounts of sensitive data, video and graphic images. We expect further growth of the Blu-ray Disc market as the introduction of 100GB/128GB discs will expand the application of Blu-ray Disc technologies.”


Existing Blu-ray players cannot play the 100GB discs. New Blu-ray players will have to be produced that are capable of playing them. New players will be backwards compatible and play the current 25 and 50GB Blu-ray discs. It’s the same as DVD players not being able to play Blu-ray discs but Blu-ray players being able to play DVDs.


The additional capacity is needed so that an entire 4K movie, which has twice as much data as an HD movie, can be stored on one disc rather than two, which eliminates the viewer having to get up to change discs. Let’s call the 100GB Blu-ray discs “4K discs” although they are not because they could just as easily hold two HD movies.


Disc Capacity Intended for playing Backwards compatible only

DVDs 4.7GB Standard Definition yes for CDs

Blu-ray 500GB High Definition yes for CDs and DVDs

Blu-ray XL 100GB 4K yes


The idea that anyone has to use discs in 2013 seems a bit antiquated, what with Steve Jobs having wanted to banish them five years ago. However Dr Rinck said that through August, Singulus has sold “significantly” more Blu-ray disc manufacturing plants as in all of 2012. He said the launch of the 4K format will bring the company “good opportunities for future sales of its Blu-ray production gear.”


The last we heard from the BDA, the specifications for the next-generation Blu-ray discs have not been finalized so Singulus appears to have jumped the gun but that something companies have been doing with standards-based products for decades. Once the specs are finalized, equipment makers can obtain licensing information and submit license applications to begin producing 100GB Blu-ray discs and players.


4K Blu-ray Standard Must Be Near

A major company such as Singulus is not likely to have announced replicators for the 100GB discs unless the standard is very close to being finalized and published as an industry standard. Any last minute changes are likely to be items that Singulus can modify with via a downloaded software change.


BDA will certainly have announced the new 100GB Blu-ray disc technology before or during CES in January.


The other new standard that the 4K industry has been awaiting is HDMI 2.0, which has still not been made official. It’s needed to feed the massive amounts of 4K video to a 4K TV set from an input device such as a Blu-ray player, a net-top box with OTT services or a pay TV companies set-top box or DVR.


Sony has produced its own 4K net-top box, the FMP-X1, that can download, store and play 4K content but only on Sony’s 4K TV sets. Sony can be expected to be among the first to produces a 4K Blu-ray player along with Samsung and LG. The three are already engaged in a price war for 4K TV sets, although it’s being fought at the high-end of the market. Sony’s 4K TVs are already in many US retail stores and Samsung has put its 4K sets in only a few. LG, despite boasting about how it’s going to distribute its 4K sets globally, has yet to show in US stores.


Samsung is currently using an “ordinary” Blu-ray player in Best Buy stores to show videos on its 4K sets, which despite upconverting still look like HD, not 4K. If it cannot immediately get some of its first 4K Blu-ray players to those stores, it should ship some videos servers with raw 4K videos to every store that’s demonstrating its 4K sets.


It’ll be interesting to see when the Chinese makers of TV sets start shipping their 4K sets. If it is in time for the holiday shopping season, it could be “4K for Christmas.”


More Details

The BDA’s specifications for Blu-ray XL (BDXL) also allow for disc capacity up to 128GBs with quadruple layer write-once Blu-ray discs.

BDXL RE (re-writable) Triple layer 100GB

BDXL R (write once) Quadruple layer 128GB


In addition to the entertainment industry, BDXL discs are also aimed at broadcasting, medical and companies with significant archiving needs.


The BDXL specs allow for backwards compatibility:

BD players will not playback BDXL discs

BDXL players will play BD and BDXL discs


DVDs are available in three capacities:

4.7 GB the most commonly used is single-sided, single-layer

8.5–8.7 GB single-sided, double-layer

9.4 GB double-sided, single-layer)


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The Challenges and Opportunities of 4K


Consumer adoption rates for 4K will be more like they were for HD than they were for 3D, according to a Via Satellite Web seminar that featured ‎Intelsat’s VP of Media Product Management and Matthew Goldman, SVP of TV compression technology at Ericsson. It was conducted by Mark Holmes, editor of Via Satellite Magazine.


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Forget 4K, 8K Is Coming

– 8K to Debut at 2020 Olympics in Japan

4K, and the infrastructure and technology to deliver it, are not yet here but already there are plans to show the Japan’s 2020 Olympics in 8K.


Japan’s public service broadcaster NHK, one of the earliest and most vocal pushers of 4K, says it will televise some of the Tokyo 2020 Olympics as a testing ground for “8K Ultra HD TV.” Each of the recent Olympics has seemed to be used to showcase a new video resolution: HD, 3D, 4K and, next up, 8K.


NHK’s 8K venture goes way back — it showed the first 8K demo in 2001 and it claims to be the world’s only broadcaster with a roadmap to 8K.


Videos in 8K resolution, also called “Super Hi-Vision,” have 16 times as many pixels as the current HD resolution, to which the industry and consumers have only recently finished upgrading. For OTT, 8K would require:

– New TV sets and net-top boxes

– Much faster broadband/home networking

– Implementation in all products of the new HEVC compression/decompression technology, a process that has already started for 4K.


8K backers says it it’s the ultimate in resolution, something that cannot be improved on. It’s like hitting the edge of the universe. If the move to 8K gains traction, lots of companies are going to ask why they should do an “interim upgrade” to 4K. Broadcasters still have in mind the “near failure” of 3D. For example, the BBC, traditionally a backer of new resolution technologies, has not said it will launch a 4K service.


However, it’s too late for makers of TVs and net-top boxes to ask that question about waiting for 8K because 4K is here. With the availability of 4K TV sets, 4K media players and, soon, 4K Blu-ray players and net-top boxes, plus 4K movies and TV shows, 4K has gained a head of steam that will not be waylaid by the possibility of 8K.


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Questions Linger at IBC about Demand for 4K among Consumers

-While 4 Satcos Demo 4K Broadcasts


Satellite operators, TV set makers, camera makers and content publishers at IBC this year were eager to demonstrate their delivery networks are ready for 4K broadcast. With 4K sets hitting stores now, and 4K content available on discs, and even a 4K OTT movie service launched by Sony, it looks like all the puzzle pieces are coming into place.


But in a surprise footnote to the 4K fever witnessed at IBC this year, a panel debate about the merits of 4K ended with the audience voting against 4K adoption.


“The Great Quality Debate” at IBC, moderated by William Cooper of Informitv, included speakers from BBC, ARRIS, and Ericsson, who all argued in favor of 4K adoption because it creates realistic images on the TV set with heightened spatial, temporal and color depth. Speakers from the other side of the debate included the Ogilvy Group, and a veteran tech journalist Ray Snoddy, who convinced the audience that the benefits of 4K resolution content were minimal to the average viewer. Snoddy likened the recent 4K push to that of the doomed 3D TV craze that never fully caught on among consumers.


The audience then voted against a motion to adopt higher resolutions in order to “improve the fidelity of television.” “If the engineers have a hard time convincing delegates at a trade show of the benefits of ultra high definition they may have an even harder time persuading the public,” Informativ said.


Satellite Operators Show World They Are 4K Ready

While panelists argued for and against 4K adoption, four satcos demo’d broadcasts in 4K resolution this year at IBC, demonstrating just how quickly technology obstacles are being overcome with HEVC:


-Eutelsat Communications: Eutelsat announced a dedicated “Ultra HD” satellite channel that utilizes its end-to-end 4K distribution chain. The UHD channel will be delivered directly to Samsung 4K TV sets across Europe, at trade shows, exhibits and point-of-sales venues, for the purpose of demonstrating Samsung 4K displays.


-Hispasat: Hispasat demo’d the first satellite broadcast of 4K content using less than 20 Mbps of data speed, using Thomson Video Networks HEVC encoding platform. Hispasat also presented its 4K satellite channel. “The aim is to carry out tests and foster the generation of content using this technology, in order to speed up development and make it available to viewers as soon as possible,” the company said. The first program to be broadcast on the channel will be a 50-minute documentary on the El Prado museum on the Spanish public television network, TVE.


-SES Astra: SES demo’d two 4K broadcasts at IBC. It partnered with Sky Deutschland and Harmonic to deliver sports programming, documentaries and movies via Humax and Technicolor 4K set-top boxes. It also partnered with the Fraunhofer Heinrich Hertz Institute to broadcast 4K content using HEVC encoding. Like its cohorts, SES said it plans to use live 4K broadcasts with partners to demonstrate device displays and capabilities.


-Intelsat SA: Intelsat demo’d a 4K satellite transmission of a rugby match at IBC, what it called the first “multi-camera production of a sports event has been captured in 4K UHD TV and transmitted live internationally via satellite and fiber.” Intelsat partnered with Ericsson for the encoding. The demo gave IBC attendees the opportunity to watch the live rugby match in 4K resolution live at the conference.


But What to Put on a 4K Channel?

Technology aside, the satco demos do raise a few questions about what exactly will or should be broadcast in 4K resolution. Sports is an obvious answer, because it is the type of live programming that only gets better on larger screens and with high resolutions, as viewers are looking to replicate the visual sensations of being present at the game; along this vein, concerts may be another suite of programming that would benefit from 4K resolutions, and anyone who has seen a 4K demonstration knows that nature programs are stunningly life-like on 4K sets.


Outside of these niche genres of content, though, it’s unclear if 4K resolution broadcasts bring much added benefit to regular TV shows or movies. For regular evening entertainment, 4K resolution content is only needed for extra large TV sets – over 60 inches, for example – or if viewers want to sit incredibly close to their TV sets.


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Sony Leaves No 4K Stone Unturned


Sony showed its 4K Ultra HD home theater projector, the VPL-VW500ES, at the IFA expo in Berlin. It supports HDMI 2.0, which is needed to handle the amount of data that 4K sends to the TV from the source, including 4K video at 60p. It also upconverts 1080p to 4K. The price is expected to be about $14,000.


Back to Headlines




Opera’s App Store Is a Hegemon among Smart TVs

-Available across 9 Device Brands

-Over 250 Content Partners


Norway-based browser company Opera has made significant in-roads in the smart TV space over the past year and a half with its Opera TV Store for video apps. The digital store is an HTML-based service that offers video apps from content owners and publishers.


Daniel Nordberg, director of business development of TV and devices, told The Online Reporter the Opera TV Store is the fastest growing smart TV app store.


The Opera TV Store is available on between 30 and 50 million devices worldwide, including TCL TVs, Hisense smart TVs, Sony Bravia smart TVs, TiVo’s Roamio platform, and well as Humax and MediaTek STBs, among others.


Opera has over 250 content publishers in its store, spanning Web content, broadcast content and even magazine media companies that are entering the online video space, such as the France-based publication Le Figaro. Broadcasters include CNBC, Turkey’s largest broadcaster TRT, and Japan’s NHK.


Opera continues to expand its content offerings. Opera announced last week a partnership with Flingo for its smart TV apps. Flingo is Ashwin Navin’s company that makes interactive smart TV apps and advertising networks [For more information on Flingo, see “Flingo TV Launches Interactive TV Platform,” in TOR812]. The partnership with Opera will give Opera’s TV Store six new smart TV apps with brands Popular Science, Fitness, Fora.TV, Saveur and CelebTV, with more apps expected to come to Opera in the future.


Opera’s TV Snap Generates 100 Apps

Earlier this summer, Opera launched an app-building tool called Opera TV Snap, which enables content owners and publishers to easily and quickly create smart TV apps around their Web video.


“The main idea is we wanted to lower the barrier of entry to get onto smart TV, and lower the technical barrier,” Nordberg said. “Publishers can quickly launch an app and get consumers engaged in the video.”


Dailymotion was the first online platform to utilize Opera TV Snap, and in just two months time over 100 smart TV apps were created and just as many Dailymotion content partners joined Opera’s TV Store.


Nordberg said to expect more content partners to join Opera using its TV Snap tool. “We are working with several other partners to integrate TV Snap into their systems,” Nordberg said.


Back to Headlines


BT: BARB Should Measure Online Audiences


BT’s Marc Watson, CEO of its TV division, said the UK’s Broadcasters’ Audience Reach Board (BARB) should measure audiences that watch programming via a tablet or smartphone app or through a browser. “It is clear that many customers are now watching online rather than via their TV sets and we hope that BARB will soon find a way to capture this important audience,” Watson said, giving a keynote address at the Royal Television Society. Watson was speaking of BT Sport, which offers broadband subscribers access to exclusive sports programming. The service is available online, via an app and on the TV set. The app has met with success so far, Watson said, and it is expected to surpass the one millionth download milestone in the next month, while “hundreds of thousands” of viewers watch BT Sport exclusively online, he said, and those viewers aren’t being included in the BARB measurements.


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Tesco Ramps up Marketing for Blinkbox


Here’s a retailer-backed OTT service done right. Tesco’s transactional and subscription OTT service, Blinkbox, is unleashing a large in-store and TV advertising campaign in hopes of drawing viewers away from competitors Netflix and Amazon’s Lovefilm. The new campaign slogan “Coming Sooner” boasts the fact that Blinkbox has ten times more new release titles than Netflix or Lovefilm.


Tesco will also be debuting Blinkbox movie and TV gift cards, which will come in £5, £10, and £20 denominations. Those cards will go on sale in over 2,000 stores.


Tesco is capitalizing on the fact that millions of customers visit Tesco stores every day. “This activity is about playing to our strengths and using the vast network of stores to communicate the significant benefits of Blinkbox over our rivals,” said Blinkbox COO Adrian Letts. That’s something that other big box retailers – notably Walmart and Best Buy – haven’t taken advantage of yet. Consequently, their transitions to digital video sales, through services respectively Vudu and CinemaNow, have been largely unsuccessful to date.


Back to Headlines


Is Virgin Media-Netflix Deal the Start of a Trend?

– Or only a One-Off?


Virgin Media said last week it will offer Netflix as part of its TiVo DVR service and integrate Netflix’s content into its search and recommendations. That move shows the quandary the pay TV industry is in and raises questions. Who will be next to venture into the OTT world with a subscription service it doesn’t own? Will the move add to or detract from Virgin Media’s subscription numbers? Will Liberty Global, the world’s second largest cableco and owner of Virgin Media as well as pay TV services on the Continent, encourage its other companies to add Netflix to their offerings? Which major US pay TV service will be the first to offer Netflix as well as integrate it into its search and recommendations? It’s almost certain that Apple will never let anyone else offer iTunes but will any pay TV service ever offer Vudu or Amazon/LoveFilm?


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Sony, Intel, Apple Had Better Hurry


The longer it takes Sony, Intel or Apple to launch a broadband delivered pay TV service, the harder it will be to add subscribers because pay TV services have already started making their programs available online. If pay TV operators offer their linear programming online (and they are moving rapidly in that direction), plus offer some OTT services such as Netflix (as Virgin Media will) and YouTube (as most are already), it seems the Intel or Sony Vpops (virtual pay TV operators) are really not likely to succeed. It is much easier for a pay TV provider to add access to OTT services (Netflix and the others except for Apple want to be on every box) than for Intel and Sony to sign up linear pay TV channels. Apple is expected to take a path that’s similar to Intel and Sony but Microsoft has taken a different path by contracting with pay TV services to have its Xbox be their STBs although the pay TV companies still want their own STB to be the first one in the home.


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FilmOn Signs Up Deutsche Welles for News Content


Despite its recent court loss in the US, FilmOn is still streaming broadcast content in international markets. Germany-based international broadcaster Deutsche Welles has signed a streaming deal enabling FilmOn to live stream its international news channel DW-TV. The channel will be available in four languages on and will join the 500 other TV channels and networks available on the service. FilmOn recently signed up two other international broadcasters, TVE in Spain and ABC in Australia. “It has long been the target of to add major global TV channels to our platform,” FilmOn founder and CEO Alki David said, adding that more deals with major broadcasters are in the works.


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Netflix Premieres Bloomberg Businessweek Documentary

-Another Exclusive for Netflix


Netflix premiered this week a documentary on former US Treasury Secretary Henry Paulson, produced by Bloomberg Businessweek Films and Radical Media. The documentary, called “Hank: Five Years from the Brink,” was directed by Academy Award and Emmy nominated filmmaker Joe Berlinger, and was released on the fifth anniversary of the financial crisis spurred by the collapse of Lehman Brothers.


The film is the first production released by Bloomberg Business Films, a newly-established film production arm of Bloomberg Businessweek that will release original documentary films about business. It was released exclusively on Netflix in US, Canada, UK and Ireland this week, and will become available across all Netflix markets in November.


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Hulu has High Hopes for Its Original Content Programming

-And Has Signed On BBC America


Hulu is planning to launch an ambitious 40 original series over the next few years – twenty of which will debut by the end of the year.


It’s clear Hulu is serious about its original series offering. Its original series are typically between 20 and 30 minutes per episode, and are light in fare – none of the complex, brooding, long-arced narratives that Netflix has been offering. Still, Hulu has been able to draw some big-name talent and their pet projects for its slate of original content, for example the animated show “The Awesomes,” which is the brainchild of SNL’s Seth Meyers.


Forty is a big number. Hulu CEO Andy Forsell told Wall Street Journal he expects original content will make up between 10% and 15% of viewing on the platform. Currently, its original series only account for 5% of viewing.


Hulu has also signed a multi-year licensing deal with BBC North America, to bring shows such as “Doctor Who,” “Sherlock” and “Midsomer Murders” to Hulu viewers. Most of the 144 shows and 2,000 episodes will be available only to Hulu Plus subscribers, however. While the media has touted the deal as good sign for Hulu, it’s really less of a win for Hulu, more of a much needed catch-up. The content isn’t exclusive to Hulu, and both Netflix and Amazon are already streaming those BBC shows.


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Amazon Adds More Star Power to Its Original Series ‘Alpha House’


Amazon announced its (only) popular original series, “Alpha House,” will see four new cast members in its second season. “Alpha House” is a comedy Web series that follows four Republican senators who share a house in Washington DC. Comedians Amy Sedaris, Wanda Sykes, Cynthia Nixon and Julie White will join John Goodman and the others on the cast as wives and Democratic senators. The series is available exclusively on Amazon Prime, and the second season will debut later this fall.


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Microsoft Working on TV Shows for Xbox One


Microsoft plans to release a number of original series for its Xbox One platform, the company’s VP of Microsoft Studios, Philip Spencer, said in an interview at the Tokyo Game Show.


Last year, Microsoft hired former CBS exec Nancy Tellem to head the content department of Xbox, and then opened up a studio space in Los Angeles, California. At the launch of its newest game console, Microsoft announced with Stephen Spielberg the two were working on a series around the popular Xbox game, “Halo.”


Spencer was tight-lipped on details about any other projects, but said the studio was incubating “hundreds of ideas.” Spencer also said to expect more TV announcements “pretty soon.”


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NVIDIA Launches $199 High-Res 7- inch Tablet


NVIDIA, maker of ARM-designed processors for other — such as Microsoft’s Surface tablet, has announced its own tablet, the $199 Tegra Note. It uses NVIDIA’s own Tegra 4 mobile processor.


NVIDIA is notable for its chips’ ability to process graphics.


The Tegra Note has all the expected: the latest Android, a 7-inch HD IPS LCD display that has 1280 x 800 resolution, a rear 5-megapixel and front VGA Web camera, 16GB internal storage with microSD slot, “HD Audio” stereo speakers, stylus with DirectStylus technology, HDMI port and 10 hours of HD video playback.


It can also function as a game controller via a Bluetooth connection.


NVIDIA did not say when the Note will start shipping. The $199 price for what looks a very attractive, high-res 7-inch tablets should enlarge the size of the under-$200 tablet market place. Under $200 seems to be the top of the price range for most folks for gifts.


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‘Hey Honey! I Got a New iPad for Free’

“Hey honey! I got a new iPad. And it was free!”

“No, I didn’t steal it. I downloaded the new iOS 7 operating system.”


The reaction of many to the new iOS 7 is that it’s like getting a new iOS device because it has many major new features and enhancements to existing features. It’s not like a Windows update such as the coming 8.1, which fixes some bugs and adds a few minor features. It’s more like Microsoft announcing a Windows 9 with a long list of enhancements and new features, then offering it free to owners of Windows 7 PCs and Windows 8 PCs, tablets and smartphones. That’s not going to happen, is it?


iOS 7 is free. The only caveat is that it works only on recent iOS devices, an understandable limitation because of hardware limitations. Software can only take advantage of the hardware that already there in prior models: iOS 7 works on these:

– The new iPhone 5S and iPhone 5C plus all versions back to and including the iPhone 4

– The iPad 2 plus the third and fourth generation of iPads and the iPad Mini

– The fifth-generation iPod Touch but no prior models.


Many apps will have to be updated to take advantage of iOS 7’s new functions. Amazon’s Instant Video app can now use Airplay to stream to TV sets with an Apple TV, although that may not be directly the result of iOS being available.


Pictures that show the difference in the appearance of some apps in iOS 6 and iOS 7 are at:


It will not install on prior models.


To take advantage of all of the new iOS 7 features, a user needs the new 5S and 5C iPhones and, presumably, the new iPad/iPads that are reportedly due out in October.


The specific features that appeal to a user will depend on what they like to do with their device. The new features and enhancements are too long to list here but are found widely on the Net including these:


Apple will sell some incremental number of new iPads and iPhones immediately as families and companies with older models want to have the new iOS 7 functions and improvements. It will also sell more iOS devices in the long term because iOS 7 will increase long-term user loyalty to Apple.


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Broadcom’s New HEVC Chips Enable 4K


Broadcom has officially announced a line of HEVC (H.265) compression/decompression chipsets for STBs that are intended for the 4K capable STBs that pay TV services will soon start deploying. It could be an enormous market for Broadcom if 4K takes off, even to only those that can afford a $2,000 4K set, which we expect to see by the end or 2014 — what with Chinese set makers entering the market aggressively.


4K has 4X the number of pixels as HD. HEVC is said to compress data twice as much as the H.264 that’s in current STBs, so that 4K files and streams are only double the size of HD rather than 4X larger. HEVC is also being touted to help pay TV services, broadcasters and cellcos deliver more HD videos over the same spectrum. It could double the number of HD videos they transmit.


Companies that make net-top boxes such as Apple, Sony, Microsoft, Roku, Blu-ray players and Google TV adapters will need HEVC chipsets to decode the 4K videos they are receiving over the Net.


Broadcom said the chips can support 4k up to Main10profile and up to 60 frames per second plus data that’s handle data delivered over the coming HDMI 2.0 interface. They also have a feature called Dual Display, which “enables presentation of two simultaneous video channels from the same STB via independent HDMI outputs and remote control devices.”


Rich Nelson, Broadcom SVP of marketing at the broadband communications group, said, “Broadcom first pioneered UltraHD technology with the introduction of the BCM7445, the world’s first 4Kx2K TV home gateway chip, in January of this year. With the launch of today’s HEVC chipset series, Broadcom continues to demonstrate its commitment to proliferating HEVC across the broadest possible product range and to support our customer requirements to drive this technology quickly into the market, particularly as lower-cost UltraHD TVs drive consumer awareness.”


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DIAL Beaming Technology Will Take over the Living Room


It’s another indication that tablet-based navigation and control of the TV set is the future. A diverse group of device makers are incorporating DIAL protocol support into their living room devices, meaning that soon viewers will be able to “sling” “cast” or “beam” content from a tablet or smartphone to the TV screen on a much wider array of devices.


Roku’s CEO Anthony Wood announced at the Next TV Summit that it will be joining Chromecast and Airplay as a tablet-controlled net-top box by adding DIAL protocol support.


Sony, Vizio, LG, Panasonic and TiVo have stated they’ll be incorporating DIAL into their devices, too.


DIAL was developed by Netflix and YouTube, and it is what Google cast is based on. It works like this: a DIAL-enabled app detects a DIAL-enabled net-top box or smart TV on the same Wi-Fi network. The user can then use the tablet or smartphone to launch an app on the TV set or net-top box.


Apple’s beaming technology Airplay isn’t DIAL-based, and works differently than Chromecast. Airplay was designed specifically to send local files on the tablet to the TV set – it was originally intended to enable users to listen to their iTunes libraries through the home entertainment system. Consequently, Airplay only mirrors content from the tablet, instead of acting more like a navigation and control device.


For the user, the end result is mostly the same, except that Airplay users must keep the video playing on the tablet in order to see it on the TV set, while Chromecast and potentially other DIAL-supporting app users can make a video selection, cast it over to the TV set, and then exit the app and continue to use the tablet.


A tablet or smartphone-based navigation app is an easy solution for the user interface obstacles OTT services face on TV sets. So far, moving through content apps on the TV set via a regular remote is still very unpleasant, especially when compared to swiping through apps and content titles on a tablet.


Roku and a number of TV makers have released remote control apps for tablets and smartphones, but those apps mostly transferred the up-down-left-right system of a regular remote onto the touch screen. It turns out that is a bad idea, because without physical buttons, the user has to constantly look down at the touch screen to find the correct button, and then back up at the TV screen.


Browsing content on tablets, on the other hand, has proven popular and enjoyable on tablets, so it’s a natural evolution to combine tablet navigation with TV set control.


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ADB’s Graphyne & Ericsson’s Mediaroom Shine at IBC

– A ‘New Kind of TV’


When people want a NEW kind of TV, what they often mean is a new UI with some advanced capabilities like proper recommendations.


If we go back to 2004, this is what Microsoft showed to a number of telcos at trade shows, which led to its 2006/2007 domination of IPTV. It also pushed fast channel change, as well as picture-in-picture and multi-room DVR, none of which were delivered for three years, but the emotional win came when people saw how the user interface would work.


Much the same can be said of TiVo, which has had a significant number of wins over the past decade or so, that its UI was, at least when it first came out, a complete break with past pay TV — although TiVo should heed our warning that it needs an upgrade soon.


At least seven new UIs were shown to us at IBC last week, and two things stood out:

– UIs should allow you to make a broad range of potential decisions.

– They should appear simple and never ask you to decide between more than three options at any point in time.


The two most impressive new UIs were also the most simple, and were shown by set top maker ADB and by born-again IPTV player Mediaroom, just a few days after Ericsson had completed acquiring it from Microsoft.


ADB has always had its own UI called TV Carbo, and this week sold yet another brand new client, IMTV, a new entry into the Indonesian pay TV market, with a DTH service called BIGTV, using that older paradigm.


Its new Graphyne UI opens up the screen left of center, and drops a multi- layer media bar across the page as an overlay. Effectively you navigate left and right and the current dimension you are considering, whether that is type of media, linear channel selection, or most recent or most popular channels, are the up and down content in this split screen. This sits very nicely into an eight tuner DVR, which begins rendering the channel or program choice either side of the one you are watching and, so renders it instantly when you switch.


The vertical option in the split screen offers everything from more information about the programs to more details about your choice.


Your own content is just another channel and in effect this all reflects the growing trend we are seeing in media gateways or hubs — if you have one, you need to be able to navigate it and that means switching between photos, songs and videos with the same ease as changing channels.


ADB’s Graphyne has a Follow Me function for when you move to another device, and its new multi-tuner DVR can also be running a transcode for other devices. The catchphrase of the system is that it treats all media type the same, whether live TV content, OTT content, music, photos or third party apps including social media and Skype. says that it is working on advertising across all these media too.


Ericsson’s Mediaroom: ‘We Are Making a Number of Big Bets on…’

Mediaroom’s Ben Huang, head of worldwide marketing, is an evangelist who understands that Mediaroom’s second lease on life under Ericsson is a once in a lifetime opportunity that he is not going to pass on. His favorite expression is, “We are making a number of big bets on…” you name it, the UI of course, recommendations and content discovery and the cloud.


Huang confirms that the new Mediaroom will use open standards and it will not use CE as the operating system for its set tops.


Huang is on a two to three year journey and he accepts that, but he is already saying all the buzz words – “HTML 5.0, binge viewing, nDVR, cloud based,” words that had been anathema to Mediaroom under Microsoft.


“Multi-screen for everyone else is a kludge,” claims Huang, “something they have added on afterwards.” Well that’s true, but Microsoft didn’t even do that. His point is that NOW, under Ericsson, Mediaroom can rethink the entire service, and make the most out of designing it as a single service. Which we can take as code meaning merging the Ericsson Multiscreen solution with Mediaroom IPTV middleware, into a single product line, but with permission to rethink all components, and make them standard and use a design in line with the delivery date of two to three years.


This makes a lot of sense and suddenly the multi-screen system that Deutsche Telekom has bought from MobiTV becomes very clearly a kludge, something that it has to do for now, because it will take over two years to build the Mediaroom replacement.


But front and center of the demo, just as it was back in 2004, is the UI. Huang showed a six video, picture in picture, image of sports, on a TV, with one larger than the others or all the same size — similar to how we picture the Verizon system in the US, which come in 2014 and will show six views of NFL pro football content around a stadium.


The screens in the UI move faster and more cleanly than any we have ever seen before, but we’ve learned from past experience that Mediaroom has shown systems in the past that have not been written and which rely on many times more powerful systems for demonstration, than those planned.


Huang talks about a device in the home moving towards a TV or screen, and it sensing that approach using ping on the home Wi-Fi, or the beamforming shape and length to position everyone in the home.


This might solve the problem of people having to log in to get their own recommendations instead of using a front facing camera and image recognition. It sounds like a good idea, but will require big data and deep analytics to get make this work in multi-screen. How will it identify someone who has switched off their phone, who’s battery has run out or who has simply left their phone charging upstairs.


An hour with Huang and we’re almost ready to not write off Mediaroom — which is a long journey from headlines we have written which included the “dismembering the seven year old twitching corpse of Mediaroom.” And while we have to be open-minded, this is more proof to our point, that watching new UIs drives emotionality, not rationality. We want that UI.


The menus show a simplicity – choice one is Mine, Recommended or All — referring of course to content. Once there, there are another three choices, which eliminates complexity and confusion, and given the speed this all moves at, and the fact that there are shortcuts from any part of the menu to any other, it means Mediaroom can once again take the high ground in demos.


This appeared in Faultline and is based on its analyst Peter White’s meetings at IBC.


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ActiveVideo’s HDMI Dongle’s Multiple UIs Can Be Used with Any Old TV


The most significant mention of the word cloud at IBC has to go to ActiveVideo. It was showing dongles that can be plugged into any TV set with an HDMI socket and can then immediately bring up the content and API of the Liberty Global Horizon service, the Ziggo home VoD system and TiVo’s UI. The ActiveVideo client is so thin that it sits in the dongle and plugs into any TV with an HDMI port, so most devices sold since 2009.


It says that Liberty Global has identified as many as 5 million homes out of its 21 million TV homes in Europe, that are in economies where this type of dongle would be more effective than the idea of an expensive new Horizon set top. This was probably the most impressive demo on the entire place, and at that level at least 25% of Horizon sets tops are likely to skip a generation in the coming cloud era.


That would be good news for Liberty Global results, but also create a huge market presence for ActiveVideo.


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Huawei Sticking with Windows Phones 8

– Pre-Microsoft, Nokia Was Looking at Android


Two items that are significant in the aftermath of Microsoft’s announcement that it will acquire all of Nokia’s handset operations:


  1. Huawei said it still plans to support Windows Phone 8 (WP8), which allays fears that rivals to Nokia might abandon WP8 for Android. Google’s has managed to navigate the same potential conflicts caused by its acquisition of Motorola Mobility. However, there’s a big difference: Android is free and also an industry-standard open operating system that anyone can modify; WP8 is neither, although there are some that have called for Microsoft to “go modern” by opening up its operating systems. The other main WP8 vendors, Samsung and HTC, have not said whether they will stick with WP8.


  1. Nokia itself had field-tested some of its handsets using Android. In fact it may have been that Android test that prompted Microsoft to acquire Nokia’s handset division for fear of losing the account. Had Microsoft lost Nokia to Android, it would have been a loss that WP8 could not have survived and it would have been a major blow to Microsoft’s prestige and its strategy of one OS for all.


If Microsoft cannot restore Nokia’s handsets to success and thus save WP8, the $7.17 billion Microsoft paid to acquire it may turn out to be one of Microsoft’s biggest blunders ever.


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iiNet Selects Celeno’s 11ac Wi-Fi Chips for Next-Gen STBs


Wireless home networking continues its seemingly inexorable march towards delivering HD videos throughout the home, whether pay TV, OTT or personal videos. Last week we reported that AT&T has ratcheted up its previous wireless networking by deploying ARRIS-made STBs that use Quantenna’s super-charged Wi-Fi chips.


This week it’s iiNet, Australia’s second largest DSL broadband service, which will deploy next-generation STBs with Celeno Communications’s super-charged 11ac Wi-Fi chips. iiNet had, as had AT&T, already been deploying the 11n version of Wi-Fi for streaming HD videos of its pay TV service. AT&T had been using Cisco STBs with Broadcom chips.


Landing the order is a pat on the back for Celeno because it had been supplying its super-charged 11n chips to iiNet since at least late 2011. It’s certain that iiNet put Celeno’s 11ac chips through some very thorough tests.


Started in a garage ala HP in 1993, iiNet operates nationwide. It has 900,000 subscribers to its broadband, telephony and IPTV pay TV services. iiNet Labs is developing the next-gen STBs as part of the company’s future product range. iiNet did not say whether the STBs will also include a wireline technology such as MoCA, or HomePlug but they most likely have wireline Ethernet connectors.


Celeno said the new 11ac standard, which operates at the 5GHz band exclusively, is intended to improve Wi-Fi by increasing modem speed and enabling operation at 80MHz bonded Wi-Fi channels. It said the chips use its OptimizAIR technology so as to provide whole home coverage for reliable wireless video streaming to multiple connected devices.


iiNet’s chief product officer Stephen Harley said iiNet sees 802.11ac as a great opportunity to give its subscribers a product with the best service and performance available. He said, “Celeno’s OptimizAIR technology allows us to use the new 11ac standard to its fullest, and provide our customers with, what we think, is the most effective solution and, ultimately, the best IPTV experience available.


Gilad Rozen, CEO of Celeno, said “Celeno’s ability to effectively manage HD quality Wi-Fi among multiple devices in the home provides a critical advantage for our customers and partners.”


The success of Celeno and Quantenna in landing pay TV companies for whole-home wireless networking raises the question whether Wi-Fi chipmakers such as Broadcom, Qualcomm and Marvell have missed a very profitable sector of the market for high-end 11ac chips. Also, will Celeno or Quantenna be acquired by Broadcom, Qualcomm and Marvell?


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Will Make a Clean Sweep of Telcos?

– Comtrend First to Get Adapter Certified by HomeGrid

– Comtrend Says It Will Also Go after the Retail Market


Lest we write off the wireline networking industry too quickly, the crowd has two big recent wins under its belt: China Telecom and Portugal Telecom. This week the HomeGrid Forum said it has awarded the first system certification for a product to box maker Comtrend for its PG-9172 Powerline Adapter as a result of it passing the Forum’s Compliance & Interoperability testing.


The Comtrend PG-9172 has a Marvell chipset that is itself HomeGrid certified. Certification testing and validation was conducted at HomeGrid Forum’s accredited test house, TRaC Global.


Comtrend said its PG-9172 Powerline Adapter provides up to 500 Mbps over the home’s electrical wires, which enables it to deliver bandwidth-intensive applications such as HD TV, VoIP and gaming. It plugs into any electrical outlet and comes with the appropriate electrical plug for the EU, US, Israel and other countries.


Makers of chips and boxes have been mainly focused on selling to telcos but say they are now ramping up sales efforts to retail stores where HomePlug devices are the only powerline products. Telcos that are members of the board at HomeGrid forum and likely deployers of products with chips include AT&T, BT and Telefonica. If those three also go with, which is overseen by the telcos’ standards body — the ITU, then it’s most likely that the overwhelming majority of the world’s telcos will go for That will give the crowd the confidence and money to launch a major marketing effort aimed at consumers.


HomeGrid Forum president and Marvell executive John Egan said, “With systems certification now happening, pay TV services have the opportunity to select systems that are already HomeGrid Forum certified, which reduces the testing time needed before trials and deployment. It also signals to retailers that they can begin stocking shelves with certified products that they can be confident will have high consumer satisfaction ratings.”


Frank Chuang, VP of marketing for Comtrend, said, “We are delighted to be first for system certification and to demonstrate our commitment to this advanced and highly versatile technology that will transform home networking. With HomeGrid Forum certification now in place, we are confident our Powerline adapters will provide a powerful communications backbone for next-generation home networks.”


Several other box makers are expected to submit their gear for HomeGrid certification by year-end and probably one additional chipmaker, which is most likely to be Metanoia. That would make three: Sigma Designs, Marvell and Metanoia so telcos will have second and third sources.


Will Make a Clean Sweep of Telcos?

Makers of chips and boxes continue their Asian marketing efforts, especially Marvell, but are beginning to ramp up efforts elsewhere as shown by Portugal Telecom’s recent decision to buy network gear with Sigma Design’s chips. We do not yet know who is making the gear for Portugal Telecom.


The crowd’s recent wins at telcos in China and Europe raises the question, “Where is HomePlug in that market?” MoCA has a dominant lead in coax but seems to on its way to becoming the preferred technology for telcos over powerline, although MoCA still has a lock hold on cablecos and satcos and the 11ac version of Wi-Fi is becoming a factor:

– Verizon is still the world’s largest user of MoCA gear.

– AT&T’s latest announcement is for the 11ac version of Wi-Fi (Quantenna chips in an ARRIS STB) but it has traditionally deployed STBs with HPNA network technology. We have previously reported that AT&T is field-testing STBs with chips but AT&T has never said it will deploy boxes even though Sigma Designs has promised a chipset that combines both and HPNA.

– iiNet, Australia’s second largest broadband service, has selected Celeno’s 11ac chips for its future products. For almost two years iiNet has been shipping STBs with Celeno’s 11n chips.


HomePlug still dominates the retail market for powerline networking but the crowd’s intrusion into the retail stores could cause it some problems.


There has been no information leaking out from the IEEE or chipmakers about the effort to add to the P1905 standard, which would allow to inter-operate with Wi-Fi. MoCA, HomePlug and Ethernet are currently the only networking technologies in the P1905 specs and is not. The HomeGrid Forum, which now includes both and HPNA, has applied to IEEE to have both added.


It’s also noteworthy that, so far at least, no one has announced a product for over coax, which means the MoCA crowd can continue their dominance in that market. However, we have been told by a reliable source that a number of telcos are considering over coax. They want to be able to deploy in homes where coax and powerline are both needed to provide whole home coverage. It’s unlikely that any existing MoCA pay TV service would ever switch to It’s much more likely they will start adding 11ac to their whole-home gear.



– MoCA will continue to dominate at the cable and satellite TV companies, plus Verizon, of course.

– is starting to become the favorite for telcos, having already landed China Telecom and Portugal Telecom.

– The 11ac version of Wi-Fi will be in every whole-home gateway because pay TV services need to stream their TV channels and TV Everywhere HD videos to tablets and smartphones plus TV sets throughout the home. Quantenna and Celeno are likely to get the lion’s share of that market unless Broadcom, Qualcomm or Marvell develop chips that compete against them.


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D-Link Picks Broadcom’s 11ac SoC


Network gear maker D-Link has picked Broadcom’s StrataGX processor and 5G WiFi Enterprise system-on-a-chip (SoC) for its latest 11AC access point. The D-Link product comes with advanced security and is aimed at the corporates who need such products to handle employees’ increasing proclivity to bring their own portable devices from home to the office.


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Battle for Global Wi-Fi Dominance

– Celeno & Quantenna Take on Broadcom and Qualcomm Atheros

– Whose Wi-Fi Chips Will Win Upcoming Major Deals?


There was an innocuous announcement at IBC that points to a far greater pie — that Israeli Wi-Fi video chip making specialist Celeno, has an 802.11ac chip that is now fully integrated with the Intel Puma 6 cable modem reference design.


It puts the last weapon in place in a global war to win Wi-Fi both at the chip level and to get designed into the next generation of pay TV STBs, particularly the new craze for home media gateways, which is about to invade the US.


Every major pay TV service in the US, including DirecTV, Comcast and Time Warner Cable, is on the verge of buying in their next generation of boxes, with one or two announcements due in the next week or so. AT&T last week said it will buy ARRIS-made boxes with Quantenna’s Wi-Fi chips.


We asked European CTO for ARRIS, Charles Cheevers who he thought would win these deals and all he would do was shrug. “We work with all the component players and even we do not know what AT&T, Comcast or Time Warner Cable have planned to install next.” ARRIS, now the proud owner of Motorola Home, is largely thought to be in the pole position for a number of these devices — but it does not escape him that both Quantenna, the 4 x 4 US-based specialist MIMO Wi-Fi chip maker has reached this same qualification with Intel about three months ago as Celeno announced this week. Given that ARRIS uses the Intel Puma 6 in most of its cable TV product designs, it appears like both Celeno and Quantenna are auditioning for their first major part in a Broadway musical.


But ARRIS is being kept honest by Pace, which also showed that it can use the required RDK software spec, for the headless XG5 (a home gateway with no wire plugged into a TV), so even Cheevers is sitting on his hands, trying not to bite his fingernails, right now.


Again he acknowledges that living with a second source is now a fact of life in most of these accounts, and he would be more than happy to share these deals 70/30 with Pace, rather than 50/50. The chances are if you are not in the ARRIS box as a component, then you are not getting a piece of that particular deal — but then there are versions of the ARRIS box with almost every component in.


Winners & Losers

From whispers around the IBC show last week we have tried to piece together what we can about the potential winners in these major gateway installations. The first thing we can see is that Wi-Fi is the anticipated network of choice for the US home, and that while no-one is going to create a box without a MoCA or other fixed line connection, just in case the odd person wants it, they are now anticipating that this time around Wi-Fi is good enough, or rather it HAS to be good enough. That means that the Wi-Fi component war will be won or lost in this generation of devices.


If Comcast, DirecTV, Time Warner Cable and AT&T all installed these at the majority of their home in the next four years, it would amount to a design win of around 58 million homes, probably twice as many access points or more, and de facto control of the Wi-Fi flavor that hits about 10 devices per home, say half a billion smart phones, tablets and PCs. If a single company won ALL of these deals, the Wi-Fi war is SO over.


DirecTV seems to be have already set its heart on Quantenna, although nothing official has been put out, except that it has just renewed its relationship with box-maker Technicolor, which has made most of its designs around the Quantenna 4 x 4 MIMO chip, with one exception which was over a year ago which had Celeno’s 3 x 3 Wi-Fi in it.


Again this is likely to be shared with Pace, which has taken more and more of that account. But there has been no public activity between Quantenna and Pace, although Quantenna is registered as a partner on the Pace site.


Pace could always get its Quantenna chips out of ST Micro. Back in May ST Micro signed up to “borrow” the Quantenna technology that will see 4 x 4 antenna arrays as well as other MIMO configurations like 3×3 and 2×2, built into the ST Micro product range. But not yet a while we should think, so we would think that if this genuinely has gone with Quantenna, that in order to second source through Pace, it will have to have a direct relationship with the Wi-Fi chip maker Quantenna.


However even quieter whisperings (call them mumblings) at IBC remind us that the two global Wi-Fi majors – Broadcom and Qualcomm Atheros — will not be content to sit back and be sidelined by the two upstarts that have so far annexed video-over-Wi-Fi — Quantenna and Celeno, especially now that Quantenna has, thanks to ARRIS, landed AT&T, which previously was buying Cisco-made boxes with Broadcom’s Wi-Fi chips.


Broadcom in particular has been working on beamforming as a way back into this major round of decisive Wi-Fi contracts — the first when all four of those usually conservative pay TV companies, decide to rely, for the most part, on Wi-Fi to distribute video around the home. But if these operators are truly conservative — chances are they will require second sourcing not just of the products that they buy, but also in the chips that are in them. They will also want bottom dollar on prices and there lies the potential stumbling block for Quantenna.


So the choices would seem to be use basic (or improving) 3 x 3 MIMO from Broadcom or Atheros, or specialist 3 x 3 with some predictive channel sniffing from Celeno or the full works, paying top dollar for 4 x 4 AC from Quantenna with beamforming.


Celeno said to us plain and simple, “We have been used in the most recent ARRIS products, so we expect to win at Time Warner Cable and on the Comcast Xg5.”


Well that’s one way of thinking, but unless little Celeno has been told ahead of time, it seems likely to us that it too is sitting on its hands waiting for the phone to ring.


The Acquisition Path

There is another way to resolve all this – for Broadcom or Qualcomm Atheros to buy one or other of the two specialists. Celeno has mostly wins in Europe and China and was to market a full two years ahead of Quantenna, and while it certainly knows its stuff, and points to severe problems fitting beneath the power umbrella for devices set by regulators in both the US and Europe, and that doing it with an extra D to A converter, another radio and an extra antenna is really tough, raw performance might point at Quantenna winning all four rounds.


That certainly what its investors think, because unlike the executives there, they will be aware that the company has to be sold (or IPO’d) — it is too poorly funded to survive in the long term, and while wins at these companies might support its ailing finances, it would also stretch them in terms of cash flow to provide the chips. Here is the big difference: if Quantenna can secure any of these major deals, it sells for a higher price than if it wins none or shares them all. And if it wins more than one our bet would be that Broadcom buys it to retain global Wi-Fi dominance, whereas if it fails to win enough, our bet is that Qualcomm Atheros, curiously behind in this race, with fewer channels and no beamforming product, would buy Quantenna’s remnants in order to play catch up.


Broadcom, for all its apparent nonchalance towards this sector of the market, has been like a duck, paddling furiously under the surface, trying to delay these awards until it has a viable video version of Wi-Fi available. All it has to do is work out firmware which either sniffs all available channels and picks the best channel across both 2.4 GHz and 5.0 GHz for video, or which builds a mesh signal around three or more home access points in TVs, or both. If Turkish set top player AirTies can manage to make a living out of this, then it should not be beyond Broadcom to work the same trick.


Broadcom would be unlikely to outperform the Quantenna chips this way, but what it might do is a good enough job AND do it at a really low price (and remain under the descending power requirements for the next five years) and usher in ALL of these contracts, or at least become an authorized part for each of them, and steal the bulk of the delivery.


AT&T has experience with the Broadcom chips in its wireless video bridge, which it has sold for the past two years, which is point-to-point and uses a 2 x 2 MIMO approach. So ARRIS through owning Motorola may have the answer to just which way the wind blows in the recent AT&T decision to buy ARRIS’s boxes with the Quantenna chips.


But there are some things we can see for sure. which has for so long anticipated a win at AT&T, is unlikely to get it. If AT&T is mostly worried about wireless delivery it will not want to mess around testing a new fixed line mechanism at the same time and should stick with HPNA for the time being, leaving high and dry in the US — at least for now.


And while Entropic has its own set top SoC which offers onboard MoCA, it has separate components for Wi-Fi, and that means that all the others will want desperately to have Broadcom’s MoCA chips in them, with Wi-Fi and the established MoCA connections on board, but without a separate chip for MoCA or MoCA 2.0. So the community is willing Broadcom to win this round, and with ST Micro too late and wedded to Quantenna, we would not want to bet against Broadcom one way or another.


This appeared in Faultline.


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Takeaways from a Presentation

– 5 Announced Telco Wins, 30 More in Tests

When the crowd makes presentations, they emphasize these points. [Our comments are in the brackets]:


– Multi-sources for chips. [Two so far and a third, Metanoia, expected by year-end 2013]


– One network technology works over any of the home’s wires, which reduces the costs to deploy. [Wi-Fi is not included as an interoperable technology, which MoCA and HomePlug have as a result of having developed the IEEE 1905 standard]


– A standard of the ITU [which telcos prefer as their standards body].


– developed by service providers for service providers [not by a single chipmaker as was the case for MoCA and HomePlug, neither of which is an ITU or IEEE standard]


– Development focus was on delivering high QoS TDMA (time division multiple access ) traffic with best in class error avoidance and noise mitigation [aimed at delivering multiple streams of flicker-free HD videos]


– They present these speeds over each of the various wires:

Powerline (SISO) 250-500 Mbps Uses the same two wires in an electrical cable.

Powerline (MIMO) 400 Mbps-1 Gbps MIMO is a technology that Sigma Designs developed to use the best two out of three wires in an electrical cable. It can only be fully utilized in countries that have a high proportion of residences with a three-wire electrical cable rather than two.

Coax (BB) 700 Mbps-1Gbps

Coax (RF) 800 Mbps-1Gbps

Plastic optical fiber (POF) 700 Mbps-1Gbps

Phone lines 350–700 Mbps


– Five telcos have publicly committed to, either for testing or full deployment: China Telecom, China Unicom, Chunghwa Telecom, Telefonica (which operates in 17 countries) and Portugal Telecom. Telefonica and Portugal Telecom are still evaluating whether to deploy over powerline or over coax or both. Some 30 telcos in Europe, Asia, the Americas and the Middle East are currently in some stage of testing/evaluating products.


– is the only wireline standard that has an effective mitigation of interference from neighboring powerline networks in high-density environments such as MDUs. Multiple Dwelling Unit (MDU) buildings. Neighboring network (NN) interference causes significant quality issues including IPTV freezing or failure, VOIP call interruptions, loss of data or even complete loss of network connectivity.’s Neighboring Domain Interference Mitigation (NDIM) technology automatically mitigates interference between powerline networks using a range of measures, enabling near 100% network capacity for each network regardless of the number of nearby networks.


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Connecting the Dots


Broadband and home networking: Making possible OTT services, apps and multi-screen viewing.


OTT services, apps and multi-screen viewing: Creating demand for broadband and home networking.


Read about both each week in The Online Reporter.


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Amazon Adds Airplay Support to Instant Video

-Rumored to be Launching Its Own Net-Top Box Later This Year


Amazon has finally added Airplay support to its Instant Video app on the iPad, which means Apple TV users can now send Amazon Instant Video movies and TV shows to their TV sets, after updating the Amazon Instant Video App on their iPads. Prior to the update, viewers could send audio to the TV set, but not the video.


The long-over update is good news both for Amazon, to keep its OTT service more competitive, and for Apple TV, which will benefit from the addition of more content, though it may eat into iTunes sales on Apple TV.


There have been a few reports this week that Amazon will be launching its own net-top box later this year, too – another arguably overdue release.


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Sony to Launch $150 Smart TV Net-top Box


Sony will soon launch an Android-based dongle called Smart Stick that, like Google’s Chromecast, adds OTT apps to a TV by being plugged directly into the TV’s mobile high-definition link (MHL) socket.


Unlike the Chromecast, however, Smart Stick a) only works with Sony’s Bravia TVs and b) will retail for $150 where the Chromecast is $35. Even Apple TV and Roku net-top boxes sell for only $99.


Sony told Variety that it would launch the Smart Stick later this week.


It will come with Netflix, Amazon Instant Video, YouTube and the Chrome Web browser and more apps can be downloaded from Sony’s Play app stores. Users can browse the Net — and even watch videos simultaneously in a different window.


The Smart Stick comes with a remote, which Chromecast does not have, and a microphone for voice-control, a touchpad and the usual other buttons that remotes have.


The $150 price and the fact that it only works with Sony’s Bravia TV sets are major inhibitors to its potential sales.


Sony now has five entrants in the smart TV/net-top box market: smart TVs, Blu-ray players, PS Vita TV, PlayStation and the Smart Stick.


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Strategy Analytics Declares Pay TV to Dominate OTT

-Will Leverage Content and Broadband Networks to Attract Subs


Pay TV will dominate the subscription-based OTT services market, according to Strategy Analytics’ latest “2013 Global OTT Forecast.”


Subscription-based OTT services will serve as the primary driver for spending growth in over-the-top video delivery, the report said – not ad-supported OTT services. Global spending on what Strategy Analytics refers to as “online subscription TV” will hit $4.7 billion by 2018, and most of that spending will be concentrated in the US and Western European markets.


“We are entering a new phase in the evolution of TV distribution over the public Internet,” said Ed Barton, director of digital media strategies for Strategy Analytics and author of the report.


Pay TV providers are beginning to launch stand alone OTT services that offer premium content, shorter commitment periods, lower subscription prices and simple hardware installation – all of which are hallmarks of OTT, minus one crucial point – on-demand viewing.


Barton predicts the entrance of pay TV providers into the OTT space will bring an end to the reign of on-demand OTT services, such as Netflix and YouTube.


Service providers will come to dominate the space because they can leverage their already-existing relationships with content owners. Tellingly, Barton said live sports programming will be crucial component of a pay TV-offered online subscription TV service.


While it is clear that sports programming will become a game-changer for any OTT service that is lucky enough to net live streaming rights, it’s hard to imagine on-demand services losing out in the OTT market, as viewer behavior has shifted significantly towards on-demand viewing over linear schedules.


Early start-ups in the OTT space, such as Magine and Aereo – both of which offer live streams of linear programming – will experience considerable growth, making them prime targets for pay TV providers who are “late to the online TV party,” Barton said. “Hence our belief that the next five years will see numerous firms jockeying for position in what is likely to become an intensely competitive marketplace for channel owners and service providers,” he said.


Pay TV providers that also offer broadband subscriptions will be able to pair subscription OTT services with broadband subscriptions, gaining further advantages in the market. “We expect to see bundling of online TV subscriptions with network access deals and device sales in the drive to build customer numbers,” Barton said. Indeed, we’ve already begun to see this occur. In the UK, BT has launched an online sports programming service, called BT Sport, for those customers that subscribe to its broadband service; while in the US, Cox Communications is testing out an OTT-broadband package in one market.


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Over 1m 4K TV Sets Shipped in 2013


4K TV set shipments surpassed the 1 million milestone, according to a TV shipment survey released by TrendForce. The survey, which measured shipments through August 2013, found shipments jumped 47% over a period of one month, with 380,000 4K sets shipped. Chinese TV set brands saw the most demand for 4K sets, according to the survey.


“4K TVs are hot products intensively displayed by all brands, and the media’s massive coverage and reports become the best publicity for the upcoming 4K TV campaign war during the October 1st holidays in China,” the company said.


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Live Streamed Content Finds Life on Mobiles and Tablets

-Long-Form Content Does, Too


The two big takeaways from Ooyala’s “Q2 2013 Global Video Index” report are that viewers are watching a lot of live video and long-form content on mobile devices such as smartphones and tablets, a refutation of the belief that smaller screens require short video clips.


The global video index is an analysis of the viewing habits of some 200 million unique viewers in 130 countries, along with billions of video analytics collected. Ooyala has found mobile and tablet viewing has grown tenfold over the past two years, and most recently, during Q2 2013, live video has come to dominate VoD viewing on these devices.


Smartphone Viewers Stream Video

Larger screens and faster LTE networks means that it’s “easier than ever to watch premium content on pocket devices,” the report said. Ooyala found:

-The share of video viewing on smartphones increased 41% during the first half of 2013, and 29% in Q2 alone.

-More than 20% of mobile viewer time was spent streaming content more than an hour long.

-Mobile audiences watch live video nearly twice as long as on-demand video.


Viewers Relax at Home with Tablets

Most tablet video plays occur on Friday night, and Ooyala found there is consistently a sharp increase in tablet viewing weekday evenings between 9 and 10 pm. “Prime time moves online,” Ooyala said.

-Tablet video viewing increased a whopping 59% in the first half of 2013, 18% in Q2 alone.

-Tablet TV viewers watch live video nearly four times longer than VoD, for an average of 15 minutes per play.

-Tablet audiences spent more than half of their viewing time watching premium long-form content, and one third of their time was spent watching video more than an hour long.


At Work, PCs and Short-Form Content Persevere

PCs are the only devices on which short-form content is still prevalent, according to Ooyala. “In the past, viewers had no choice but to stream their favorite TV programs on their desktop or laptop. Today, audiences increasingly choose phones, tablets and smart TVs for long-form viewing,” the report said.


The exception to this rule is live sports and news content. Ooyala found PC viewers watch live sports and news online during the day for extended periods of time, especially during the work week.


Connected TV Viewers

Viewers are streaming more content to their Internet-connected TV sets, too, though Ooyala said OTT viewing only accounts for a fraction of total TV consumption at home. Once again, live streamed content dominates on-demand streaming, as does long-form content.


-Connected TV viewers watched live streaming video for an average of 44 minutes per session, ten times longer than on-demand videos delivered over the top, according to Ooyala.


-Connected TV viewers spent 56% of their total viewing time watching videos longer than 10 minutes, and 45% watching videos longer than half an hour.


By overlaying the data and viewer trends, Ooyala has constructed a composite modern connected viewer: In the morning, they stream media on a mobile phone or tablet, as they prepare for their day and commute to work. PC video plays pick up in the later morning, and peak at midday, as people watch video at the office. During the evening commute, viewers return to their phones and tablets, and tablets become the “first screen” on the weekends.


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All Time Record for DVD Rentals from Redbox Kiosks


Lest we forget: there’s still a big market for physical media. Redbox’s recently renamed owner Outerwall said this week that DVD rentals from its Redbox kiosks for July were at 74 million its biggest DVD rental month ever. DVD rentals increased in July and August over 2012 by 13.4% and 15.7% respectively, it said. Redbox has more than 43,600 red kiosks from which it rents DVDs starting at $1.29 for one night. Outerwall expects continuing increases of 4-7% annually. It has rented over 3 billion since its start 10 years ago. The DVD rental business is apparently not in the decline that many predicted. Netflix is up to over 30 million subscribers, raising the question, “Is there any limit to how much content consumers will consume?”


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Nielsen: Viewers Are Streaming at ‘Breakneck Pace’


Nielsen’s latest “2013 Over-the-Top Video Analysis” report found that viewers are streaming more and more content over the Internet and are “demonstrating incredible binge appetites for programming available anytime and virtually anywhere.”


Nielsen said streaming viewers are prone to “binge” on more than one episode per session of a show. According to Nielsen’s survey, 88% of Netflix subs and 70% of Hulu Plus subs said they have streamed three or more episodes of the same show in one day.


Nielsen said viewers binge on TV shows because they prefer creating their own content viewing schedules. Fifty-eight percent of streaming viewers “prefer to view shows when they do not have to abide by schedules other than their own and can watch several episodes consecutively,” Nielsen said.


It also found 45% of Netflix streaming subs watched Netflix original series, such as “House of Cards” and “Orange is the New Black.”


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Sandvine: Netflix Oversimplifies Its ISP Ratings


Netflix’s monthly ISP ratings aren’t accurate, according to a report released this week by Sandvine, a broadband management company. The report, called “Exposing the Technical and Commercial Factors Underlying Internet Quality of Experience,” states that quality benchmarks such as Ookla’s Speedtest and Netflix’s ISP Speed Index, lack accuracy and depth because they focus on one specific point in the network, instead of looking at the whole data path.


“Quality is affected by a chain of factors both technical and economic,” the report said. “The location of a quality impairment introduced in the chain is often poorly understood and difficult to measure, and many commonly assume it can only be the access network.”


Netflix’s index, which often ranks members of its Open Connect CDN higher than the non-members, is particularly misleading, because its rankings are “driven by device mix as much as content choice or network peering, but is not reflective of network capacity at all,” Sandvine said. “Netflix is showing the aggregate ‘demand’ on their service rather than the ‘capacity’ of the access network.”


The bottom line is that end-user experience is the result of multiple factors along the chain, and is not controlled primarily by the service provider.


“The Internet access provider is not the sole (or necessarily even the primary) influencer of subscribers’ Internet quality of experience,” Dan Deeth, media and industry relations manager at Sandvine, wrote in a blog post. “The quality of experience of an end-user for a given Internet-delivered application or content is affected by many choices made by many players through the value chain.”


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26% Update to iOS 7 within 24 Hours


According to Mixpanel Trends, which measures such things, 24 hours after its release, Apple’s new iOS 7 had already achieved a higher penetration percentage — 26% — than Google’s latest Android operating system, Jelly Bean 4.3, which launched in July, which is by Google’s own measure is less than 0.1% of Android devices. The prior Android version, 4.2, only has an 8.5% penetration rate since being released in October 2012.


Apple makes its iOS updates available to all devices that will support the new version but with Android, users have to wait until their smartphone maker has modified it to work on their devices, a process that Steve Jobs called fragmentation and warned about. Updates are at the whim of the makers of Android smartphones, not Google. Additionally, no Android updates have been a significant as the Apple upgrade to iOS 7.


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Sony Intends to Sell 5m PlayStations by April 1


Sony intends to sell five million of its upcoming PlayStation 4 during Sony’s current fiscal year, which ends March 31, 2014. That’s about a million a month because it has said it’ll start shipping it in the States on November 15, 2013 and in its home turf of Japan on February 22, 2014.


The current PlayStation 3 has been on the market for seven years so Sony may anticipate pent up demand. However, tablets, smartphones and net-top boxes are being increasingly used as gaming devices. To help counter that, Sony is believed to making the 4 an entertainment device with lots of OTT apps plus content that it is contracting for with the likes of Viacom.


It’s now been seven years since the PlayStation 3 was first launched, and even though competitors have been seeing weak sales, it isn’t unreasonable to assume the pent-up demand for next-gen gaming could pull a million PS4s a month into stores around the world.


The 4 will face stiff competition from the new Microsoft Xbox, to which Microsoft is also adding whole-family entertainment apps including being able to serve as a pay TV company’s set-top box.


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Pay TV Industry to Undergo Massive Changes by 2018

– Sales of TV Sets to Decline Sharply

– 120m Home Hotspots Enable HD Video Delivery to Mobile Devices

– Half of Broadcasters and Cinemas Will Shutter


By the time we reach 2018 the pay TV landscape will be so distorted that homes that pay for TV will become a meaningless statistic, according to a new report called “The Faultline Revisited.”


Disruptive events will shape this industry dramatically, including a shift to mass video viewing on tablets and smartphones, the near collapse of the LCD TV market as screens become wall-sized, while second TVs in the home cease to be purchased at all. There will be a huge reduction in free-to-air broadcast TV, as the industry shifts to the Internet; cellular offload and LTE Broadcast will solve the problems of videos reaching cellular devices; 75% of in-home video viewing will also shift to the tablet.


The Chart that Launched a Thousand Discussions

If we add to this the demise of cinema viewing and a shift to this being attached to social networks, along with a mass uptake of TV Everywhere services, as they improve, and a huge reduction in set tops due to cloud based services, and the mass uptake of Netflix style OTT offerings, we have multiple mass disruption events.


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It’s Time for LoveFilm to Become Amazon


The Amazon brand is much better known in the UK than the LoveFilm brand, and especially on the continent so it’s a bit of a mystery why Amazon hasn’t changed LoveFilm’s name to Amazon in its marketing and on its Web site. It has taken to calling LoveFilm “an Amazon company” but isn’t it time for Amazon to go all the way and make a complete name change?


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VisualOn Puts HEVC on LG Smartphones


VisualOn has integrated its HEVC solution into LG’s high-end G2 smartphones, giving users optimized data usage and higher resolution video over wireless networks. The G2 smartphone will be able to play video at 1080p at 30 Fps on 6 Mbps, both for streaming and local playback. The G2 will also support all HEVC-compliant video. The G2 smartphone will be available across 130 global carriers later this month.


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Roku CEO Names Google as Biggest Competitor – Not Apple TV


Roku’s CEO Anthony Wood named Google as Roku’s biggest competitor in the TV space, because of its $35 Chromecast streaming dongle, and because Google is interested in getting its platform onto smart TVs, the same space Roku has its eye on. “Our goal over time is to be the operating system for televisions,” Wood said, speaking at the Next TV Summit. It’s notable that Wood didn’t name Apple TV as its largest competitor. Apple said earlier this year it had sold 13 million Apple TVs, while last count indicated Roku had only sold 5 million.


Back to Headlines


Netflix Moves Its Place in the Industry Ahead of HBO


Until recently, Netflix said in its mission statement: “Over the coming decades and across the world, Internet TV will replace linear TV. Apps will replace channels, remote controls will disappear, and screens will proliferate. As Internet TV grows from millions to billions, Netflix, HBO, and ESPN are leading the way. Now it says, “As Internet TV grows from millions to billions, Netflix is leading the way.”


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Hulu Looks to Pay TV for Partnership


Hulu’s CEO Andy Forsell said the company is looking to partner up with pay TV service providers in order to offer Hulu as part of TV Everywhere services. “That is an opportunity for us longer-term,” Forsell told Wall Street Journal. That’s the first indication of Hulu’s long term plan after its owners cancelled its auction and instead decided to inject $750 million into the site. Forsell clarified that he thinks the standalone service will remain in place.


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Cox Pulls Plug on OTT Experiment


Cox Communications’ experimental OTT and broadband pay TV service, called flareWatch, has been shuttered, after a three-month run in Orange County, California. The service utilized Fanhattan’s hybrid STB/net-top box that was designed to let users access OTT and linear media across the same interface, though the Fan TV boxes Cox used didn’t have any OTT apps on them. Cox said it will put the data collected during the experiment towards future offerings for its subscribers.


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Apple Never Intended to Offer a Cheap Phone


Apple CEO Tim Cook told Bloomberg Businessweek that Apple “never had an objective to sell a low-cost phone” that would compete against cheap Android handsets in emerging markets. The goal with the iPhone 5c, he said, was “to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost.”


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Windows 8.1 Pricing Same as Windows 8


Microsoft said the pricing for its upcoming Windows 8.1 version will be the same as the original: $119 for basic and $199 for the Pro version. Windows 8 users will get the updates for free.


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Netflix Increases Its Original Content Budget


Netflix will double its original content budget in the coming year, to account for 20% of its content spending, according to Netflix’s chief content officer, Ted Sarandos. Sarandos was speaking at the Royal Television Society Cambridge Convention. Netflix still hasn’t released any numbers as to UK subscribers, beyond last year’s revelation that the service had surpassed the 1 million mark, though it is estimated to be around 1.5 million.


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The Online Reporter 845 – September 13-19, 2013

Issue 845        September 13-19, 2013


  • Intel Boldly Enters ARM’s Tablet Market
  • Vidora App Acts like a Tablet-Based Operator
  • Microsoft Could Beat Apple at a Two-Smartphone Strategy
  • Apple & Sony Reverse Roles This Week in Product Launches
  • Vevo Sees Jump in Non-PC Viewing in US
  • Nokia Springs a Leak Before Microsoft Even Closes the Deal
  • Time to Take Away Local Stations’ Spectrum & Use It for Free Wi-Fi


  • Samsung 4K Sets Show Up
  • Middle America Is Buying Sony’s 4K TV Sets
  • HEVC Is Everywhere at IBC
  • Spanish Satco Hispasat Testing HEVC-Delivered 4K
  • LG Has Big Plans for 4K TV Sets



  • Virgin Signs Up Netflix for Its TiVo STBs
  • Jinni Expands With Xbox and C More Deals
  • ThinkAnalytics Offers Personalized TV Solutions for Sports Fans
  • VidiGo and Never.No Unveil Social Media Hub
  • FilmOn’s Court Loss Marks Trouble for Aereo Expanding West
  • ABC’s Cheng Wants Everyone to Use ‘Watch ABC’ App


  • Microsoft Launches Free Internet Radio Service
  • Apple’s iTunes Radio Date Set for Mid September


  • Starz Launches Comedy Channel on YouTube
  • Bleacher Report Expands Professional Content Offerings



  • Apple Adopts Two iPhone Strategy


  • Tablets for Under $100 with Intel’s Bay Trail Processors
  • New Surface 2 Tablets Coming September 23
  • Seagate Offers 500GB HD for Tablets


  • ARRIS, Quantenna Win AT&T Account
  • Sigma Lands First Prize in the European Stakes
  • LG Embeds WiDi in PC Displays
  • Pace DVR Distributes Linear Pay TV & OTT Services
  • Wireless USB Added to WiGig Standard


  • Sony Unveils Mini Console That’s Also a Streaming Video Box
  • Philips Launches a Cloud TV Service
  • TWC to Embrace Net-Top Boxes in Coming Year


  • Set Makers Look to Original Content to Sell TV Sets


  • Verizon Wants to Charge for Use of Broadband Network


  • US Cinemas Have Record-Breaking Summer
  • Three Studies Highlight Media Consumption Shifts to Online Viewing


  • New $500 Xiamoi TV Set Is 3D and Android-Based
  • Apple TV Enhancements Expected
  • Microsoft Pulls a Google Instead of an Apple
  • TWC’s Britt Sees No Free Market in Pay TV
  • No Surprise that Apple Didn’t Launch a Low-Cost iPhone
  • YouTube’s First Ever Film Festival in Toronto
  • Hisense Adds Opera TV Store to Smart TVs
  • Kodak Emerges from Its Digital Media Nightmare


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Intel Boldly Enters ARM’s Tablet Market

– Tablet Prices Down to $200 – $350 Range

– Small, Powerful, Inexpensive, Fanless & 10-Hours Battery Usage — Sounds Like an ARM Processor

While the world was oohing and ahing Apple’s new widgets, Intel was trying to pull off something that is much more of a challenge: a processor that will upset ARM’s apple cart, if not at Apple, then at all other makers of tablets that use Android or Windows 8.

Intel this week formally launched its (hopefully) “ARM-killer” processor, the much ballyhooed Bay Trail, the latest in Intel’s line of Atom processors. It’ll be available in tablets, laptops and 2-in-1 tablet/laptops that’ll sell for as little as $200. They’ll ship in the fourth quarter from the likes of Acer, ASUS, Dell, Lenovo and Toshiba.

Intel’s Processor Line Newest Processor in that Line

Atom Bay Trail

Core Haswell

Let’s cut to the chase. The Bay Trail allows for the development of tablets and laptop PCs that:

– Have 10 hours of usages between battery charges, a first for Intel in its battle against ARM. They’ll also have up to three weeks of standby power.

– Run both Windows 8 and Android operating systems. Running the PC version of Windows would be ideal for competing against ARM-based processors. Intel did not say whether it’ll run iOS, but because Intel supplies processors for Apple PCs, it’s likely it has at least tested that combination although that would require some help from Apple.

– Will be small. Because the Bay Trail chip has a smaller footprint, devices can be fanless, measure less than 11 mm thick and weigh just 2.2 pounds — much like portable devices that use ARM-based processors.

– More powerful — double the compute performance and treble the graphics performance compared to the previous-generation Atom processors. It supports screen sizes ranging from 7 to 11.6 inches.

Here’s the killer: Intel said products that use the Bay Trail processor could be priced very low, starting at:

– $199 for a tablet or a clamshell device that’s defined as a laptop with a hinge

– $250 for a laptop with a touch screen

– $349 for a 2-in-1 device defined as device that comes with a detachable keyboard or that transforms into a tablet

The Two-Processor Tablet Strategy

Intel’s two-processor strategy for tablets means that makers could produce a top-of-the-line tablet with the Haswell processor that has all the power of a PC and runs the full-blown Windows 8 version and also a low-cost tablet that uses the Bay Trail processor that also runs the PC version of Windows. The one with the Bay Trail processor would be a direct competitor to the ARM-based Surface RT, competitive in every way — price, fanless, size, battery usage between charging — but having the advantage of running the existing legacy Windows software. In short, makers of Windows tablets could attract both consumers and the corporates.

Intel has been working with software developers to ensure that Android and Windows devices will have popular consumer and corporate apps such as: Netflix-HD, PhiSix, Arcsoft, Tieto, Gameloft, Cyberlink and Skype-HD.

Intel did not list Microsoft or HP, two mainstays of the PC crowd. It also did not mention Sony or Samsung, two CE stalwarts. That does not mean those four companies won’t put Bay Trail in some future products, not just in the first wave. Not listing Microsoft seems to confirm that it will be the Haswell processor that is in Microsoft’s new Surface 2 Pro tablet that’s due to be announced September 23 in New York.

Intel said Bay Trail is powerful enough to be used in desktops and all-in-one desk systems. Depending on Bay Trail’s processing power, that could negatively impact sales of Intel’s higher-priced, higher-margin Core processors.

Hermann Eul, corporate VP and general manager of Intel’s mobile and communications group, said, “What we have delivered with our Bay Trail platform is an incredibly powerful SoC that delivers outstanding performance, long battery life, and a great experience for the way people use these devices today. It’s an incredible leap forward.” He said it’s aimed at products that both consumers and the corporates will buy.

Making the Corporates Happy

Intel has built-in features that will especially appeal to the corporates: McAfee DeepSAFE Technology, AES hardware full disk encryption, Intel Platform Trust Technology, Intel Identity Protection Technology and Intel Data Protection Technology, the platform offers a more secure computing environment. It also supports Microsoft Windows 8 Pro Domain Join and Group Policy, and delivers full application and peripheral compatibility.

Intel said that in early 2014 it would introduce 64-bit support for Bay Trails that are used in tablets, which will make the corporates even happier. Devices built on this version of the SoC will offer enterprise-class applications and security, and with Intel Identity Protection Technology with PKI, will not require a VPN password.

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Vidora App Acts like a Tablet-Based Operator

-Offers Content Owners Distribution and Monetization

-Works with Airplay, Chromescast and Miracast to Beam Content to TV Set

Vidora is an app for the iPad that functions as something like Roku, but without the net-top box. The app is an online content aggregator, with content sources ranging from Netflix, Hulu Plus and iTunes to the more Web-centric content publishers such as Yahoo and YouTube.

The app offers a first-screen viewing experience on the tablet, but Vidora co-founder and CEO Alex Holub told The Online Reporter he sees the future of app as a navigation and control device for the TV set. “We think that’s what the future looks like,” he said. “There’s an open Web, for distribution that goes to mobile devices, mobile devices are then used to discover and watch content, but importantly also to control the TV.”

The app currently works with Miracast and Airplay for Apple TV in order to push video to the TV set, and the company is quickly working to add support for Google’s Chromecast. With these technologies becoming more commonplace for less and less money, Holub said there wouldn’t be a need for net-top boxes anymore. “We see the set top box going away, and all the intelligence sitting on the mobile devices and tablets,” he said. ‘“For the first time in history, anyone can get to the TV, any publisher can get to the TV.”

Vidora Works with Content Publishers to Get to the TV Set

The Vidora app is “publisher-centric,” Holub said. The company acts as a gateway for publishers to distribute content and monetize it, using the app as a distribution network that ultimately leads to the TV screen.

“We’re building a platform which allows content owners to really easily get their content on mobile devices, and with these new technologies get their content [to] the TV,” Holub said.

Content is categorized by source channels, for example there is a Yahoo channel, a Hulu channel, a SnagFilms Channel, and an iFlixTV channel, among others, that users can browse to find something to watch. The app also offers “global channels” which are grouped by topics such as food, comedy, drama, horror, history, beauty and fashion, and talk show. “This content is being pulled from different places, and is personalized to the user,” Holub said.

Vidora recently added live streaming capabilities to its app, further expanding opportunities for its content partners. The app currently offers two live streaming channels, Bloomberg TV, which offers a live stream of content as well as shorter on-demand clips, and The Venture Channel, a travel-oriented online channel that streams more like regular TV might. “We’re basically providing different experiences for content providers [to utilize],” Holub said. “We certainly want to add more some live content.”

Offers Monetization, Distribution and Analytics Tools for Publishers

Vidora offers its content partners access to monetization opportunities and analytics tools within the app. “We open up the video instead of treating it as a black box, we try to understand the video,” Holub said. “Because of that, when a viewer watches a video, we start to learn a lot about his interests.”

That data is captured in Vidora’s publisher tools. “We want to provide publishers information about how the content is being used,” Holub said. “We think this is one of the big promises of Internet-delivered video, in that you have a much deeper understanding of the viewer.”

Vidora’s publisher tools offer content owners insights into how their content is being viewed and by whom. Vidora has created a user cluster system that arranges viewers into groups based on interests and content owners can see how their videos do across these groups. They can also look at trending videos and peak viewing times. The tools give the publisher analytics such as where more users watched the video – either in the Yahoo channel, or in the broad fitness channel, for example – what time during viewers are watching videos.

That information translates well into monetization. Vidora supports three models for its content partners, including the recent additions of an in-app subscription feature, which similar to YouTube or Roku, enables content owners to set up a subscription service within the app, and an ad network that enables publishers to insert pre-roll or mid-roll advertisements.

“We’ve really lowered the barrier to start distributing the content across devices,” Holub said. “If you’re publisher, and you have content, Vidora helps them get on mobile devices, and the TV, and helps them monetize that content. We can enable all these different types of business models for them.”

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Microsoft Could Beat Apple at a Two-Smartphone Strategy

– Asha Platform May Be Most Valuable Piece of the Nokia Handset Acquisition

– Or, Is Microsoft Forever Welded to Windows?

– Not If You Look at Positive Results with Xbox and Negative Results with Windows RT

Microsoft could take a better route to the two-smartphone market than the one Apple announced this week. The $100 price difference between the two new iPhones is negligible, which could give Microsoft (and makers of Android phones) a big opportunity.

As a result of buying Nokia’s handset division, Microsoft now owns two smartphone operating systems — Windows and Asha and although there are advantages to having only one, these two may allow Microsoft to develop two lines of smartphones — Windows for the high- and mid-end and Asha for low- and mid-end.

Microsoft could rename the high-end Lumia-brand phones it’s getting from Nokia to Surface and producing a complete and user interface-compatible line of Surface smartphones and tablets.

Let’s hope Microsoft and its incoming CEO have the sense to see that tying Microsoft’s success entirely to Windows is not a good idea. In the one case where it did not force the Windows operating system, and brand, onto a new piece of hardware, the Xbox, Microsoft succeeded.

Microsoft actually has four operating systems:

– Windows for Intel-based devices. Known as the Windows Pro version on tablets.

– Windows RT for ARM-based devices. Looks like the PC version on the surface but is not and so won’t run legacy Windows software.

– Asha, based on software from a company that Nokia acquired, is intended for “feature phones” that can be sold at the low end of the market. See “Nokia Launches a $99 Smart Feature Phone” in TOR829.

– Windows Phone, designed for smartphones aimed at the higher end of the market. Like the RT version, it looks like the PC version of Windows but isn’t.

Microsoft should accelerate the development of the Asha line of “smart feature phones” and aim them at the income-challenged especially in emerging markets. It’s a strategy that is not available to Apple because it is chained by both legs to its one-operating-system-fits all philosophy — just as Microsoft was before getting Asha as part of the Nokia handset deal.

Caroline Wagner of Wireless Watch said: “Asha is a sound platform with many advantages in terms of its smartphone-like user experience, extremely efficient use of network and handset resources and low cost to produce.” Those are characteristics that a Windows-based phone will never have.

If Intel can indeed produce a low-cost processor that is compatible with the PC version of Windows, as it has said it’s done with the Bay Trail processor, that allows device makers to produce tablets that retail for less than $200, then Microsoft should look skeptically at the need for the RT version of Windows for tablets. It might still need a Windows Phone version for the upper-end of the smartphone market.

Wireless Watch reports that Nokia’s head of marketing for handsets, Tuula Rytilä, said Microsoft is set to make Asha a “better offer” by bringing key services to the platform, a strategy that is already being discussed right up to the executive ranks at Microsoft. CEO Steve Ballmer has said that some Microsoft services that have previously been restricted to higher end smartphones may come to Asha. “They are looking into things like SkyDrive, Office and Xbox,” Rytilä wrote on the Nokia Conversations blog.

Asha is predicted to reach 100 million people within a few years, quite a large target for a company that wants to become “a devices and services company,” as Ballmer has said.

Killing off the Asha line, even slowly, or selling it to another company such as an Asian one that could produce very low-cost phones, is not in Microsoft’s best interests. That could only happen if Microsoft decides to “sink or swim” with Windows, which so far has not been a very good strategy — see the success of the Window-less Xbox and the failure of the Windows-bound Surface RT.

We don’t know the details of the deal between Microsoft and Nokia, but unless Nokia is restricted, it could re-enter the mobile phone market at some point, perhaps with an Asha-like cloud-based operating system, with Android, the Samsung-Intel backed Tizen or Jolla’s Sailfish, which was developed by some ex-Nokia engineers.

There is fly in the Microsoft-Nokia deal. Nokia the network and systems company keeps the Nokia name permanently and Nokia can use the brand on handsets after December 31 2015. Microsoft is only licensed to use the Nokia brand for 10 years so it will want to start a smooth transition away from the Nokia brand as quickly as possible. By using the Nokia name, Microsoft is only building equity in the Nokia brand, which it does not own and against which it could one day be competing.

Microsoft will soon own the Asha brand and technology. It should move quickly to do what Apple cannot do — build a two-smartphone product strategy.

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Apple & Sony Reverse Roles This Week in Product Launches

By Peter White of Faultline

In discussions going on in the blogosphere somehow the names Sony and Apple appear to have been swapped. Sony is no longer being seen as clueless, fated and failing to listen to realities, while Apple is no longer being praised for simply showing up. This week is a genuine turning point in their respective relationships with the media and bloggers.

Sony has finally produced a device, built around a service, the PS Vita TV, that will go up against Apple TV, itself a slow starter, and Apple, despite doing a pretty decent job of trying to innovate in the smartphone market — a market that has been completely rejuvenated by its attention — has been snubbed by investors and pundits alike for not delivering enough.

Apple’s recent successes have been legendary; Sony’s failure equally so — such that when Sony launches a product that writers would not be embarrassed to own, and when Apple produces an almost, but not quite, revolutionary product, the two jaded appetites — one for success, and the other for consistent failure, have both been reversed.

The Sony box was almost Apple-like in its appealing design, just 6 cm by 10 cm, small and understated, but full of function — the “budget” version of the PlayStation 4 at under $100; while Apple was expected to produce miracles – a deal with China Mobile and an low-cost iPhone for the common man in emerging markets. It appears that expecting another failure from Sony and a cheap product from Apple was perhaps dumb.

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Vevo Sees Jump in Non-PC Viewing in US

Vevo released a set of metrics this week across viewing platforms, and revealed the music video streaming site has seen a significant jump in non-PC viewing. A whopping 50% of Vevo video views in the US were on mobile devices, tablets, or connected TVs. Vevo has released a 24/7 linear music video channel app for connected TVs, and the company has said 80% of its product development is now focused on the connected TV space. Outside the US, video viewing is still skewed towards desktops and laptops.

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Nokia Springs a Leak Before Microsoft Even Closes the Deal

How quickly can Microsoft and other smartphone makers expect to get competition from ex-Nokia employees? The day after Microsoft announced it would acquire Nokia’s handset division, a Singapore-based firm called Newkia was formed with the sole aim of acquiring Nokia employees and expertise for its own Android developments, according to Wireless Watch.

Thomas Zilliacus, a Nokia employee until 1993 who is now executive chairman and founder of Mobile FutureWorks, which is backing the Singapore-based Newkia told ZDnet that the Microsoft transaction “reflects the complete failure of the Windows strategy Stephen Elop chose when he was appointed Nokia CEO some two years ago. Nokia, which only three years ago was the world’s runaway market leader in mobile phones, is today a small and insignificant brand. What Newkia wants to do is to use Nokia know how, technology and design to build the world’s best smartphones, but running on Android.”

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Time to Take Away Local Stations’ Spectrum & Use It for Free Wi-Fi

The recent CBS-Time Warner Cable eruption in the pay TV companies’ love/hate relations with local broadcasters prompted us to review what the local stations are offering for free viewing over-the-antenna.

The main national TV networks — CBS, ABC, FOX and NBC — are mostly showing, in our opinion, “junk shows,” which we liken to the junk food that fools the stomach into thinking it has received nutrition. “Junk shows” fool the brain into thinking it has received nourishment. The exceptions are news, weather and far too few documentaries. An acquaintance said he considers sports as news because of their timeliness; no one watches complete recordings of sporting events except for recent highlights. Yes, pay TV has a similar mix of offerings but consumers are paying for it while the local stations have received free spectrum from the taxpayers, spectrum that they have used to make billions of profits for their stockholders and executives.

Second, the local stations are not broadcasting their second and third channels in HD, which make them less appealing to viewers. Local broadcasters have told us they need more spectrum to broadcast all their local channels in HD, to which we reply, “Upgrade your broadcast technologies.” In Europe and other locations, stations broadcast multiple channels in HD. There is technology available that will compress HD videos into the size of standard definition videos. HEVC is the name of the latest compression/decompression technology. It will also allow local stations to broadcast in 4K, which increasingly seems to be a “keeper.”

Third, most of the second and third stations broadcast very old “junk shows,” not something they or anyone else has added any value.

Yes, in many areas, viewers can watch many channels that they cannot on pay TV, for example from another nearby city but those are mostly the same channels that nearby stations are broadcasting — although there are exceptions.

In short, the taxpayer’s spectrum is wasted. The FCC should immediately take it back. Local broadcasters do not need to be reimbursed because they never paid for it in the first place.

The FCC could then make the spectrum available for Wi-Fi or other wireless technologies that would be free to consumers. A nationwide network, even though patchy in less-populated areas, would greatly facilitate the delivery of for-free and for-a-fee videos plus emergency services and a nationwide healthcare and educational network that would be of “greater good” to the populace than watching decades old episodes of “Perry Mason” and “Bonanza.” Besides, any of those shows that are worthwhile and could attract an audience could be “aired” over broadband.

Let’s be clear that this recommendation does not apply to the spectrum that radio stations are using. That is useful at locations where the high-speed broadband is not available such as in cars and during emergencies when consumers have lost the electrical power they need to watch TV.

The fact is that if the FCC were giving away spectrum today without its history being an anchor, it would not give local broadcasters so much spectrum. It’s time to correct its prior actions that technology has now made obsolete.

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Samsung 4K Sets Show Up

– But Sony Keeps Its Lead in 4K

– Better Picture, Sound, Prices & Distribution plus More 4k Content

– A Better In-Store Demo, Too

Samsung is still going to be a large and successful company whether or not it succeeds in 4K. On the other hand, Sony’s future as a CE supplier rests mainly on its ability to be the dominant company in the 4K TV set market.

Samsung’s 4K TV sets are now in Best Buy stores but Sony still has the lead in 4K TV sets.

Best Buy is showing Samsung 4K TV sets but only in its high-end Magnolia stores, which are few and far between. In the store we visited, the Sony 4K set was back-to-back with the Samsung so it provided an opportunity to compare, a comparison that shows Sony still has the lead in 4K.

Both sets in the Magnolia store were the 65-inch models.

There’s a history of the Best Buy-Magnolia saga at:

Better Picture

The Sony 4K set had a much better picture, so much better that by comparison the video on the Samsung 4K set looked like “ordinary” HD. The Best Buy representative agreed but pointed out that a) the video on the Samsung was from a Blu-ray disc and the video on the Sony was a native 4K video in its entirety and b) the Samsung set on display may not have been calibrated. Best Buy recommends that purchasers wait 30 days, and then pay Best Buy $200 to have someone come out to calibrate the 4K set.

Better Sound

The Sony has front-facing speakers on each side compared to the Samsung’s downward facing speakers on the bottom. The Sony speakers are larger and create what could be called “near-surround sound” without external speakers.

Most people that buy 4K sets at present already have a separate surround system such as from Onkyo or Pioneer with large speakers at a distance from the TV, the front, the rear, a central speaker and a subwoofer. However, there are many times when someone just wants to watch basic TV such as news or weather and does not want to fire up the surround sound system. The Sony 4K sets win that audio matchup hands down.

There is one possible negative. The front-facing speakers on the side of the Sony sets add to their width so anyone that is space constrained width-wise should consider the Samsung, whose speakers are on the bottom, which allows for a very thin bezel.

4K Content

By owning its own studio and having good contacts at other Hollywood studios, Sony is able to provide lots of 4K content. See “Here Comes the 4K Content” in TOR843.

Sony’s online 4K store already has 70 shows for purchase/rental and Sony says it’ll have 100 by Christmas.

Sony 4K Media Player

Sony’s $700 broadband-connected FMP-X1 4K media player will allow users to download 4K videos, which overcomes the problems with streaming 4K over bandwidth-challenged broadband. The media player was not on display in the store and could only be seen by ordering one.

The FMP-X1 only works with Sony’s 4K sets so won’t help Samsung purchasers to get 4K videos. It also comes pre-loaded with 10 films. Samsung as yet has not announced an alternative.

Sony says that to use the FMP-X1 player, the 4K TV needs an HDMI board replaced and new firmware installed, which requires a technician to come to the home.

The media player that was connected to the Sony set in the Best Buy store was not the Sony FMP-X1.

Better Marketing

Why would Samsung allow its 4K sets to be demonstrated in Best Buy stores with a Blu-Ray video and not native 4K videos? It took only a few steps to see the obviously superior picture. Why didn’t it have a top-end surround sound system connected? It took only a few steps to hear the superiority of the Sony sound.

Perhaps Samsung’s biggest mistake is not asking (or telling) executives at Best Buy to put its 4K sets in every Best Buy store.

Better Pricing

Sony’s latest pricing at Best Buy give it an advantage over Samsung:

Sony Samsung

55-inch $4,000 $4,500

65-inch $5,500 $6,000

Prices are down from where they were for the same models a few months ago.

LG’s 4K sets have yet to be seen in stores but LG has indicated its 4K set prices will be about the same as Sony’s.

So! If you have to travel an hour or two to see a Samsung 4K TV and then find it doesn’t look as good during the demo or sound as good and costs more than the Sony, what are you going to do? Drive back to the nearest Best Buy and purchase a Sony.

C’mon Samsung! You will only get one chance to make a good first impression. Give Best Buy a professionally produced 4K video that’s on a media player. (Blu-ray does not support 4K.) Get the 4K sets being demonstrated calibrated. Hook the demo 4K sets up to a separate surround system. And get your 4K sets in every Best Buy store.

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Middle America Is Buying Sony’s 4K TV Sets

– But a Foolish Best Buy Policy Is Costing Samsung the Same Opportunity

Reporting from Middle America, where the industry meets the consumer.

Best Buy, the largest US dedicated electronics chain in revenue, last week featured Samsung’s 4K TV sets on a page in its multi-page, multi-color, multi-product newspaper insert. Based on the ad, you’d think you could drive to the nearest Best Buy and see the Samsung, but not so.

A trip to the nearest Best Buy store in Baton Rouge showed that the Samsung 4K sets had not made an appearance there, even though the Sony 4K set had been on display for several weeks. See: “Sony Beats Samsung, LG to Market with 4K Sets” in TOR842.

How popular is 4K and other top of the line HD sets in Baton Rouge? The sales rep said a) the store sells a lot of high-end TV sets including 4K ones and b) one customer had that morning, a Monday, bought two Sony 4K sets, one for the living room and one for the bedroom. He and his wife liked the front-facing speakers on the Sony 4K set for the bedroom because they didn’t want to install a separate surround sound system in that room.

A very knowledgeable Best Buy sales rep said Samsung’s 4K sets were only in Best Buy stores that Best Buy’s perhaps shortsighted executives have designated as “Magnolia” stores. The nearest one was in Metairie, Louisiana, about an hour away. Metairie is a smaller and less affluent market than Baton Rouge even though the Metairie market includes the better known and more visited New Orleans.

The designation as a Magnolia store indicates that Best Buy store can carry high-end products. There are only a few in the States and only one in Louisiana. The biggest differences we could see between a Magnolia store and a non-Magnolia store are the sizes of the showrooms and the gear that’s in them. The Baton Rouge store has a showroom, although that is not where the Sony 4K set is. It is in the middle of the TV section although hidden behind a panel that’s at the rear of the department’s cash register.

Best Buy’s Metairie Magnolia store has a bigger showroom than the Baton Rouge store. In fact the showroom has several showrooms that branch off the main one.

Interestingly, the Sony 4K set is also in the Magnolia store’s showroom, back-to-back with the Samsung 4K set.

C’mon Best Buy. People in Baton Rouge drive to New Orleans to go to the French Quarter or watch a Saint’s football game, not to buy a TV. That same policy is depriving thousands nationwide from seeing a Samsung 4K TV set so they can buy it.

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HEVC Is Everywhere at IBC

By Philip Hunter

Amid all the hype surrounding HEVC (High Efficiency Video Coding) at IBC there are some interesting demos that highlight important points. Beneath the headline figure that HEVC delivers similar video quality at half the bit rate of its immediate predecessor H.264/MPEG4, there are significant variations between different resolutions and use cases. What is clear is that HEVC has not been oversold and rarely fails to meet that target of halving bit rate, or alternatively improving quality substantially for a given bandwidth.

The latter is being well demonstrated by software encoder vendor Elemental Technologies, comparing HEVC with H.264 at low bit rates, with striking differences. The quality if anything looks more than twice as good even if that is a subjective judgment, resulting from HEVC’s greater ability to identify which parts of a picture are changing fastest at a given time between successive frames and so devote greatest encoding resources to those.

Elemental also claims to have succeeded in doing live encoding at 1080p “full HD” at 2.8 Mbps with HEVC, which is twice the resolution of 1080i. That means full HD channels could be made available over many broadband services and it is a pity that the industry is so intent on skipping straight to 4K, given that 1080p delivers magnificent pictures on any screen up to at least 70 inches across and probably beyond. But both CE makers and broadcasters believe that 1080p would be too hard a sell since it appears to offer too small a gain over 1080i or 720p, the two HD resolutions currently deployed for most linear HD services.

One aspect of HEVC that does come across at IBC is that it has tilted the balance further away from hardware toward software encoding. This is because the codec itself embodies features that enable encoding and decoding to proceed in parallel without requiring dedicated silicon to handle the underlying logic. In effect the silicon resides in the software through its implicit support for parallelism, which can be executed either on single multicore or multiple generic processors.

The likes of Elemental and also Envivio argue that with HEVC the case for software encoding has become overwhelming, since it offers advantages in terms of flexibility and upgradeability, while now matching the hardware approach in performance.

Other vendors have also gone for a software approach, such as Ateme, which is releasing its first HEVC product, in the form of software upgrades allowing the codec to be embedded in its Titan Live/ Titan File carrier-grade video transcoding system for multi-screen delivery and its Kyrion DR8400 universal Integrated Received Decoder.

Ateme argues that even though both these products were introduced over four years ago, software upgrades enable them to be brought right up to date.

There are different use cases for HEVC being demonstrated at IBC.

One is 4K, but of greater immediate interest is mobile video, IPTV and fixed line OTT. Ericsson claims that its SVP 5500 is the world’s first HEVC encoder for mobile, capable of real-time encoding at existing HD resolutions. Its LTE Broadcast products combine three emerging standards, HEVC, eMBMS and MPEG-DASH, to address growing demand for media services over 4G LTE. Ericsson is also demonstrating support for multi-screen devices from smartphones to connected TVs, using both MPEG-4 AVC and HEVC/MPEG-DASH, including live 4K UHDTV video contribution at 4:2:2, 10-bit resolution.

For OTT in general HEVC in combination with adaptive bit rate streaming is increasing the quality that can be delivered and so getting closer to competitive linear pay TV services. And while claims for HD video over Wi-Fi continue to be overhyped because of quality issues in real life deployments as opposed to demonstration conditions, HEVC allied to the 802.11 ac dual band version will bring Wi-Fi closer to making HD over wireless in the home viable for delivery to big screens.

IPTV is going to gain significantly from HEVC, since it will greatly increase the penetration of multichannel HD services by halving the required bandwidth. This means that homes further out from DSLAMs will become eligible for premium pay TV services.

Finally HEVC will enable some cable TV operators to bring forward migration to all IP services, since it will improve the economics of video over DOCSIS. It will double the number of channels they can potentially deliver over their existing DOCSIS infrastructure and so reduce or avoid extra investment needed to push fiber deeper to reduce the number of subscribers contending for capacity on coax segments.

This appeared in Faultline.

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Spanish Satco Hispasat Testing HEVC-Delivered 4K

Spanish satco Hispasat has been broadcasting a 4K-demonstration channel this summer. It’s part of H2B2VS and UltraHD4U Eureka research projects that’s testing HEVC-enabled broadband and broadcast services. It’s showing it off at IBC. “This demonstration plays an important role in our plans to promote the deployment of the most cutting-edge compression and delivery formats, giving our customers the ability to offer their viewers the absolute highest-quality viewing experience,” Ignacio Sanchis, CCO, Hispasat said.

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LG Has Big Plans for 4K TV Sets

– But Where Are the Sets?

LG said it will launch its 55- and 65-inch 4K TVs, the first ever with HEVC, in 50 countries this year and LG expand its cooperative ventures with broadcasters such as RAI and BSkyB to accelerate the growth of 4K HD content. Those are big plans for a company that does not yet have its 4K sets on display in any US retail stores. Perhaps it was waiting for HEVC.

Havis Kwon, president and CEO of LG’s home entertainment operations, said, “With the demand for OLED TV and Ultra HD (4K) TV expected to grow rapidly next year, the competition to gain supremacy in the next generation TV market will be fierce.” He is right. Samsung and Sony have already put showroom 4K sets in US retail stores.

Kwon said, “LG will leverage its strong position and further consolidate its global TV business by speeding up the launch dates of its OLED TVs in a number of core markets. We will also introduce an expanded lineup of Ultra HD TVs and deliver a comprehensive, differentiated smart TV user experience.”

LG said it will increase its smart TVs’ gaming capabilities with new games from such as Activision and Disney plus offer cloud-based gaming.

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Virgin Signs Up Netflix for Its TiVo STBs

-This Is A Litmus Test for Pay TV

Pigs fly! Liberty Global’s Virgin Media shocked pay TV providers worldwide this week when it announced it would be offering Netflix on its TiVo-built DVR box. Virgin Media will test out the new offering in 40,000 of its TiVo box households before rolling out the service to all of its 1.7 million TiVo homes.

The deal is important because pay TV conventional wisdom dictates that subscribers who watch Netflix will ultimately cut their pay TV cord. There hasn’t been much proof of this yet, but the service providers still fear it.

Pay TV providers have been eager to introduce Internet-connected STBs to their subscribers, and most are working to upgrade their VoD and linear TV interfaces to be more OTT-like, in order to recapture eyeballs drifting towards the OTT services. None yet have been so bold as to actually include Netflix or other OTT apps on those pay TV boxes, because pay TV providers don’t want to cannibalize viewing – whether linear, DVR or VoD.

We’ve seen signs that the net-top box market is interested in heading in this direction. Microsoft’s highly anticipated Xbox One has pay TV input capabilities, and the interface demo’d at the launch event showed a hybrid linear TV and OTT programming guide. Fanhattan has launched a net-top box that is capable of integrating pay TV with OTT offerings. Fanhattan’s Fan TV box is being tested in a select market by cableco Cox Communications, but Cox made sure none of the OTT apps made it on the Fan TV boxes it handed out to its subscribers – much to their dismay, we bet.

Pay TV Can’t Beat OTT, Might As Well Join Them

It’s tacitly understood that viewers would love to have Netflix, Hulu, Lovefilm, or iTunes on the same box and in the same interface as their pay TV packages, so Virgin Media will no doubt earn brownie points from subscribers who don’t understand why they can’t access Netflix on their Internet-connected STBs. Average viewers are not well versed in the ins and outs of the pay TV industry, and so will likely see the addition of Netflix as a much needed bonus feature.

Viewers tend to think of Netflix as just another TV channel, so from the subscriber’s perspective, Virgin Media is simply expanding its content offerings, offering access to another channel. Viewers still need to subscribe to Netflix for $8 per month in addition to their monthly cable bills, of course.

As to the possibility that dding Netflix will lead its subscribers to cutting the cord — well, it’s too late for that. They all know about Netflix and the other OTT services already. It’s not as if the pay TV service is offering something “new” to its subscribers. As former US president Lyndon Johnson said about maintaining good relations with an opponent, “It’s better to have him inside the tent pissing out than outside the tent pissing in.”

Netflix May Help Keep Eyeballs

There’s another facet of this deal that may actually help Virgin Media retain eyeballs. Say, for example, that most Virgin Media subscribers who also have Netflix accounts have made a habit of checking Netflix to find something to watch weekly, or even daily, and that time spent browsing Netflix, or binge watching on Netflix, is time spent completely outside of the pay TV ecosystem.

In order to keep viewers within the pay TV ecosystem, Virgin Media plans to integrate Netflix library content with its own pay TV offerings within the TiVo interface. Using this unified interface, subscribers can search for titles, actors, or perhaps even browse by genre, with the Netflix library results alongside Virgin Media offerings, which include some 6,000 hours of on-demand content.

Virgin Media must think – as do many other pay TV providers – that they’re content offerings stand up well next to Netflix, and that TV and especially VoD services go under-utilized by subscribers. By putting the Netflix library alongside the pay TV services, Virgin Media is hoping to divert eyeballs that are headed for Netflix back toward the pay TV service.

A unified interface such as the one above would be a huge win for consumers, who undoubtedly want to have seamless access to content across sources neatly organized and searchable in one place – instead of having to move in between silos of content.

This hybrid pay TV-OTT model may work well with subscription-based OTT services, but we bet no pay TV provider will be willing to offer a transactional OTT service, such as Vudu or Amazon Instant Video, alongside its own VoD offerings. Those types of services would definitely eat into VoD sales.

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Jinni Expands With Xbox and C More Deals

-Powering Recommendations for Service Providers and OTT Services Across Globe

-iPad App Coming, Too

Jinni’s recommendation engine tools are being picked up left and right by content service providers. This week at IBC, Jinni announced a multi-year deal with Microsoft to power recommendations in the Xbox Video platform, and Scandinavian pay TV provider C More has chosen Jinni to power the recommendation interface for its subscription-based OTT service, Filmnet.

“The industry has recognized that consumers want new and innovative ways to discover content,” Yosi Glick, founder and CEO of Jinni, said. “The proliferation of linear channels, on-demand content, and multi-screen viewing have made semantic discovery the new imperative.”

The Xbox Video deal will integrate Jinni’s entertainment genome technology into movie and TV recommendations available on Xbox consoles. The proprietary genome tool contains thousands of “genes” – markers that identify mood, style, plot, setting and other characteristics of a title – to organize a library of content. The genome helps viewers narrow in on what they’re “in the mood” to watch, giving them much more tailored and relevant recommendations than traditional genre-based results do. “By using the rich set of attributes in the Jinni Entertainment Genome, Xbox recommendations go beyond the standard genre similarity,” the company said. “When paired with other Xbox signals, such as a user’s viewing history, this sets a new bar in content discovery.”

The Filmnet service, which is available on laptops and iPads in Swedish, Finnish and Norwegian language markets, will integrate some of the intelligent, personalized features that define Jinni’s recommendation tools, including:

-incorporating semantic tags across the Filmnet library of TV and movie titles. These tags organize content catalogs according to “meaningful descriptions that help users quickly narrow down to exactly the type of content they are in the mood to watch,” the company said.

-offering personalized taste channels that are built through analysis of viewing history and behavior. “Jinni learns the nuanced tastes of each individual user and uses them to create virtual channels of all the content types the user is most likely to enjoy,” it said.

Seven Other Operators in the Works, Too

Jinni has recently experienced a surge of interest among pay TV providers over the last year. During the last quarter of 2012, Jinni signed up seven service providers interested in using its genome tool, across multiple countries and markets.

“Demand is growing fast for both pay TV and OTT,” Glick told The Online Reporter. “The competition is fierce between all types of providers and discovery experience is being used to gain an edge over all types of competitors.”

Operators include Comcast, Time Warner Cable, Walmart’s OTT service Vudu, Bouygues Telecom, Spain-based Prisa TV, SingTel in Asia, and South Africa’s Multichoice.

These service providers are integrating Jinni discovery technology into their VoD services. Some of those operators – Glick didn’t say which ones – are including Jinni tools in linear EPGs, too, which allow the viewer to search across the entire suite of content offerings all at once. “The best benefit [of Jinni discovery] is when you give the user the ability to discover over all available catalogs at once, or select which catalogs he/she would like to choose from,” Glick said. “This eliminates the need to first search linear TV, and if nothing interesting is found, begin another search in the VOD.”

iPad App Coming Q4

Jinni is also working to release its direct-to-consumer iPad discovery app later this year. The app integrates Jinni’s recommendation engine with a second screen EPG, and aggregates content across linear TV, OTT subscription and electronic sell-thru services and theaters releases. The user signs into the app using Facebook, which allows the app to learn about the user. The user also inputs the pay TV provider and any OTT subscriptions, and so can search across linear TV alongside on-demand content. The Online Reporter was able to demo the app at CES this year, and it was quite impressive. [Read more about it in TOR816.]

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ThinkAnalytics Offers Personalized TV Solutions for Sports Fans

Metadata and content recommendation engine ThinkAnalytics is offering a sports product, called ThinkSports, which enables service providers to deliver personalized recommendations to sports subscribers.

“Given the critical role of football in European pay TV, baseball in North America and cricket in India, for example, offering specialized applications to deliver personalized recommendations represents a new way for operators to increase their audience figures for televised and streamed sporting events,” said Peter Docherty, founder and CTO of ThinkAnalytics.

The service uses a global sports metadata library, comprised of 50 sports across over 20 countries and in 17 languages. The library is expanded daily. It can offer recommendations across live or recorded content, across TV, Web or mobile devices.

ThinkSports enables subscribers to find content around their favorite teams, athletes or sports, and discovery content based on personal preferences. Subscribers can track upcoming matches and events with their favorite teams and track appearances or interviews by their favorite athletes.

Its recommendations are further tailored to the viewer based on an “advanced rating system” which estimates the importance of the events or programs and deliver them to the user in a prioritized list.

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VidiGo and Never.No Unveil Social Media Hub

-Enables Broadcasters to Air Social Media Feeds on Live TV

Amsterdam-based software and graphics company VidiGo has partnered with Never.No, a social TV software company, to offer an end-to-end interactive TV platform that broadcasters can use to gather social media feeds about programming and push that viewer-generated content to the TV screen using VidiGo graphic displays.

“What we see more and more, broadcasters would like interactivity with audiences, whether it’s in big sports venues, whether it’s on big screens at festivals, or a live TV show,” Reinout Lempers, COO of VidiGo, told The Online Reporter. “With social media, it’s an ideal way to go.”

The Social Media Hub, announced at IBC this year, pairs Never.No’s social TV tool, called the Interactivity Desk, with VidiGo’s software-based graphics platform that connects with online environments. “With traditional systems, it’s very hard to connect with these data feeds,” Lempers said. “Since we are software-based, we are ready to interact with these Web technologies, such as HTML and RSS.”

The Social Media Hub is an out-of-the-box solution, Lempers said. “So there’s no integration to be done anymore, and it’s plug and play.”

Never.No’s interactivity interface gathers up viewer-generated social media feeds from a diverse slate of sources, including Facebook, Twitter, Instagram, and Google+. Lempers said it could also be used to take audience polls. From there, broadcasters decide what data or tweets are ready to go on air.

The second part of the solution surrounds graphics for the on-screen display of the social media content. “Broadcasters can decide to display logos, show Tweets via a ticker, etc and positioning the color, the fonts and the effects,” Lempers said. The graphics component is completely customizable. VidiGo’s platform supports 2D and 3D graphics as well as traditional broadcast protocols.

Lempers said VidiGo and Never.No have already signed up a large German broadcaster, and is in talks with a few other potential clients. “We are positioning our product in the European market and surely in the US market as well,” Lempers said.

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FilmOn’s Court Loss Marks Trouble for Aereo Expanding West

FilmOn’s loss in court last week will have implications that reach beyond the company operating in the 9th Circuit, and could spell trouble for Aereo. FilmOn, formerly called AereoKiller, is an OTT service similar to Aereo that uses antenna farms to transmit OTA broadcast signals over the Internet. The recent decision against FilmOn is an affirmation of broadcasters’ complaints, first filed against FilmOn in the 9th Circuit, and is a departure from the legal success Aereo has experienced so far in the 2nd Circuit Court. In a hearing last week, a federal district judge decided FilmOn violates copyright laws, and ordered FilmOn to cease operations in the US – except in the 2nd Circuit in the Northeast. The decision will put a damper on Aereo’s westward expansion, and will likely merit a Supreme Court case later down the road.

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ABC’s Cheng Wants Everyone to Use ‘Watch ABC’ App

-As Long As They Are Pay TV Subscribers

Albert Cheng, EVP and chief product officer of digital media at Disney/ABC Television Group said the company is looking to expand reach of its newly launched Watch ABC app, which delivers OTA content over the Internet. “The goal, ultimately, is to have every possible American be able to access their local station,” Cheng said at the Next TV Summit. The app is currently available in the eight ABC-owned stations, but only for authenticated pay TV subscribers. For now, Aereo will have to suffice for the non-subscribers.

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Microsoft Launches Free Internet Radio Service

Microsoft said it now wants to be a devices and services company, and following in suit, it is launching its Windows 8 and Xbox music streaming service, called Xbox Music, beyond the borders of Windows 8 devices.

Now, the service is available to all Web users, via a browser site and an iOS app and an Android app. There is a free, ad-supported version of the service available only on desktops, and a subscription service that offers more access to music and features on mobile devices. But for Windows 8 users, the service is still free.

Xbox Music has a library of 30 million individual tracks, which users can stream, create radio stations around, download for offline access (for Music Pass holders) or purchase.

Microsoft first launched Xbox Music last October, around the time Smartglass was launched. Initially, it was made as the default music player on Windows 8 devices and via Xbox, as a rebrand of the old Zune service – which was, like iTunes, based on transactions.

Xbox Music pass subscribers have access to expanded features as well. The pass, which costs $9.99 per month or $99.99 per year, gives users access to personal music and playlists across devices, much like Spotify allows for its subscribers. The Xbox Music Pass also offers offline access to songs and playlists, as does Spotify.

How Does it Match Up with Competitors?

Microsoft has an uphill battle in this market. Pandora announced in April it had signed up 200 million users to its Internet Radio service. Spotify, whose service Xbox Music more closely resembles, has around 9.3 million subscribers by last count by ABI Research. By comparison, Microsoft expects to have around 200,000 subscribers by the year end. That’s a miniscule slice of the music streaming market, and the company is correct in thinking that the more devices on which the service is available, the better.

One advantage Microsoft has over Apple is that Xbox Music is available throughout the global Xbox market. iTunes Match is only available in the US, and Apple’s iTunes Radio will be available initially only in the US, though a Western Europe launch is expected shortly afterwards. Of course, Apple has an even larger advantage over Microsoft in terms of potential users, as anyone with iTunes or an Apple product can use the service.

Here’s a comparison of services in the streaming music market:

Xbox Music

-Ad-supported: Internet radio, can search and listen to specific songs and create playlists around artists, available for free on all Windows 8 devices, limited to 10 hours per week after initial 6 months. Available in 15 markets worldwide.

-Premium: Xbox Music Pass, $9.99 per month or $99 a year, enables listeners to download music for offline listening, and removes ads from streaming songs and listening to playlists. Available in 22 markets worldwide.


-Ad-supported: Internet radio, users can search and listen to specific songs, create playlists around artists. Available only on browser. -Premium: two tiers, Unlimited, with offers the same features as the free service but without ads, $4.99 per month; and Premium, which offers access to music on mobile devices and supports downloads for offline listening, $9.99 per month. Available in 20 markets worldwide.

iTunes Radio

-Ad-supported: Internet radio, with 300 genre stations and the ability to create stations around artists. Available only in US.

-Premium: Removes ads from stations, iTunes Match $24.99 per year. Available only in US.


-Ad-supported: Internet radio, with genre stations and listeners can create stations around artists.

-Premium: Pandora One, ad-free Internet radio listening, higher quality audio and more song skips per day, $3.99 per month or $36 per year. Available in 3 markets worldwide.

Google Play Music All Access

-Ad-supported: No option.

-Premium: Internet radio with unlimited song skips, users can create stations around specific artists and genres, users can stream specific songs to computer or Android device, for $9.99 per month

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Apple’s iTunes Radio Date Set for Mid September

Few new details emerged from Apple’s WWDC this week about its upcoming music streaming service launch.

Apple said the service would debut in the US September 18. It will initially only be available in the US, though iTunes stores can be found across 119 countries. It said a Western Europe launch in the works.

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Starz Launches Comedy Channel on YouTube

Starz has launched a YouTube channel and has expanded its comedy Web series offerings. The channel, called Union Pool, will host four original Web series, both animated and live action. The series include:

-“Tvoovies,” an animated show with episodes based on Reddit conversations. Episodes include “Jurassic Parks and Rec,” “Mad X-Men,” “Indiana Jones and the Abbey of Downton” and “The Grey’s Anatomy.”

-“Hollywood Acting Studio,” a live action parody show starring comedian Drew Droege as a failed actor teaching acting at a community college.

-“Captain Cornelius Cartoon’s Cartoon Lagoon,” an animated series that follows puppets who dive underwater and bring to the surface best and worst cartoons made. This series is created by Manny Galán, formerly of Nickelodeon and DC Comics.

-“30 Second Bunnies Theater,” an animated series that parodies and reenacts films using bunnies.

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Bleacher Report Expands Professional Content Offerings

YouTube channel alum Bleacher Report, which was acquired by Turner Broadcasting last year, is diving into a new slate of professional sports content ahead of the start of the NFL season.

Bleacher Report, with access to the Turner studio in New York, is offering longer-form, professional content with big names, such as Randall Cobb and Mike Freeman, and big sponsors.

New Web series include:

-“Fantasy Live,” a half-hour series sponsored by State Farm with new episodes each week. Host Josh Zerkle will offer NFL matchups for fantasy football viewers.

-“Bleacher Bar,” sponsored by Coors Light, with longtime CBS sports columnist Mike Freeman

These new shows will join two returning series:

-“Fantasize Me,” sponsored by Old Spice and Ram Trucks, this fantasy football-themed show is hosted by Green Bay Packers wide receiver Randall Cobb

-“Behind the Mic,” sponsored by Ford, this show explores behind-the-scenes production of big sports events.

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Apple Adopts Two iPhone Strategy

– But Not Plowing any New Furrows

– Responding to Market Demands, Not to a Grand Vision

– Free iOS Upgrades Are More than Microsoft Ever Did

Apple’s new products and services usually cause major disruptions in the digital media industry but not the ones that it launched this week. None of them comes close to matching Apple’s four prior industry-quaking launches: iTunes, iPod, iPhone and iPad.

Most notably it has implemented a two-iPhone strategy.

The high-end 5S model, made of aluminum, starts at $199 with a two-year cellular contract and $649 without one. It has a much faster A7 ARM-based processor with a 64-bit architecture. The S’ top-of-the-line features include fingerprint detection, improved camera functions and motion detection. Apple said the fingerprint data is not stored on Apple servers and does not go to the iCloud.

Frankly, the price differential is not as big as many had expected. The prices will allow Apple to maintain its industry-largest profit margins but deprives it of sales to billions of income-challenged and frugal shoppers.

Off Contract Base Model Price Comparison


Model Monthly with 2-year contract Outright purchase

5S $199 $649

5C $99 $549

4S $0 $449

In the US, a purchased iPhone can only be used on T-Mobile’s cellular network, not on AT&T, Verizon or Sprint’s.

The 5C replaces the 5.

The 5C model, made of plastic, starts at $99 with a two-year contract and $549 without one. It’s aimed at the mid-tier smartphone market, not the very low end that many are looking for, especially the income-limited consumers in emerging markets. The C model has the same iOS as the S model and all the familiar iOS apps so it’s not as if Apple has crippled the product for the purpose of selling more of the pricier S models.

In the US, a purchased iPhone can only be used on T-Mobile’s cellular network, not on AT&T’s, Verizon’s or Sprints’.

The two-iPhone strategy is similar to the two-iPad strategy that has worked successfully for Apple. The only difference in features in both cases is the hardware: size and screen resolution for the iPads and, for the iPhones, mainly, fingerprint and motion detection, faster processor and camera features.

Shipments of the new iPhones start September 20.

However, there was no-low cost iPhone that would spread the digital media to hundreds of millions of new users and no iPad that would lure even more users away from watching TV on TV sets. The new iPhones will keep customers coming back for more but may not slow Android’s reign as king of smartphone operating systems.

As for new product categories, Apple did not seize the opportunity to lead with an iWatch or whatever it wants to call it. It’s not even certain what an iWatch might do that’s a “must have” feature besides being a mobile phone and body monitor.

Apple also did not launch a smart TV set that would upset the plans of Sony, Samsung and LG. The guess here is that Apple is waiting until it can get large quantities of 4K displays that meet its high standards — and using the time to negotiate with pay TV companies, a trail that Intel, Microsoft and Sony are also on.

The new iOS 7 operating system will be available for downloads to recent iProducts. When downloaded to the Apple TV, it might even bring it some new features.

Other enhancements include:

– an improved Siri with an option for a male voice and search of Wikipedia and other Web sites

– iWork, a free productivity app that includes a word processor, spreadsheet and notepad.

The new iPhones and iOS are more evolutionary than revolutionary. The new fingerprint technology could break open the mobile payment market. The new camera features are another nail in the coffin of digital cameras.

Moving iOS to a 64-bit architecture will give Apple a number of advantages such as in gaming, a market that Apple has long had its eye on. Adding new motion sensors will make the new iPhones important to the increasing number of health and fitness apps developers — and perhaps influence a future iWatch. Aging baby boomers as well as the young are increasingly interested in electronically monitoring the health of their bodies.

Apple’s free iOS upgrades are more than just updates and go above and beyond anything Microsoft ever did for its Windows customers. It’ll make Apple’s already loyal customers even more loyal.

It’s much too soon to call Apple another Microsoft, one that’s living off revenue from its prior breakthrough products. It’s also unfair to ask Apple to keep coming up with revolutionary products and services but it’s what its prior accomplishments have led consumers and investors to expect. Surely it can pull another big one out of its bag of technology tricks in the next year or so.

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Tablets for Under $100 with Intel’s Bay Trail Processors

– More Powerful Processors Also Coming to Tablets

During a Q&A session at this week’s annual Intel developers’ forum, Intel CEO Brian Krzanich said the company’s new Atom processor called Bay Trail would this year be in tablets costing less than $100. He also said Intel’s new and more powerful Core processor called Haswell will be a low-power product that does not require a space-consuming fan for cooling. Haswell will enable the development of more powerful tablets and two-in-one products that work in clamshell or tablet mode, he said.

A $100 tablet with an Intel processor is likely to use the Android operating system but there are other possibilities. The other possibilities do not include Windows and iOS, though. However, a $100 Intel- and Android-based tablet could put a lot of pressure on Microsoft and Apple, depending on its features. However, it may be more of a dedicated tablet such as for kids, reading eBooks or learning.

Apple served notice this week that more powerful processors are coming in its tablets by putting one, its new 64-bit capable A7 ARM-based processor, in its new top-of-the-line 5S smartphone. Apple said the A7 is twice as fast as the prior A6 and demonstrated the game “Infinity Blade” to show that. Keen to be a main player in the gaming market, Apple can be expected shortly to use the A7 in a new iPad.

Microsoft is expected to use the Haswell processor in its new Surface tablets it’s announcing September 23. Microsoft has not given indication that it will use the Bay Trail processor in a low cost version of Surface that would run the PC version of Windows 8. Perhaps that’ll happen in 2014, as surely it must because Microsoft is under pressure to reduce prices on its Surface tablets.

Krzanich also showed a working prototype of a Windows 8 notebook that uses Intel’s 14-nanometer “Broadwell” chip that is due out next year.

Intel is focused on the two-in-one laptop/tablet market. Krzanich said that by year-end 2013 there would be 60 Intel-based designs on the market. Many were on display at the forum.

Intel’s biggest announcement at the forum was the Quark line of very tiny, low-power processors for use in wearable devices such as smart watches, bracelets and monitoring devices. Intel said Quarks would be one-fifth the size and use one-tenth the power of a low-power mobile processor called Silvermont it’s launching this year. Silvermont is an Atom processor that’s intended for tablets and laptops.

Intel said the Quark reference designs will be available by year-end 2013 and Quark chips will be available in quantities in early 2014.

Quark may be the big news in the longer term but the possibility of a $100 tablet with an Intel processor is big news now.

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New Surface 2 Tablets Coming September 23

September 23, New York: the date and place that Microsoft has said it will launch new versions of its two Surface tablets, RT and Pro, called Surface 2.

Haswell: the name of the Intel processor that’s reportedly in the new Pro.

Unfortunately, Haswell is not the Intel processor that many had thought might be in the next Surface. However, it is a very powerful but still pricey Intel Core processor, more than powerful enough to run the bloated Windows 8 that many corporates want on their tablets so as to be compatible with their Windows PCs. It also uses only one-third the power of prior Core processors, which means longer usage times between charging.

However, Haswell is pricier than Intel’s alternative Bay Trail processor, which Intel is positioning against ARM-based processors.

Perhaps the Bay Trail processor will be in the new RT version although it’s difficult seeing Microsoft snubbing its new-found ARM friends like that. It could also be that Bay Trail will appear in Surface tablets in 2014.

The new Surface tablets are expected to run the new 8.1 version of Windows 8, which should help sales.

The revised version of Windows 8 is intended to make users happier with the user interface. Microsoft, the largest software company in the world, has had trouble developing a tablet interface that satisfies in the way that Apple did with its iPad three and a half years ago, which makes what Apple did even more remarkable.

The Surface 2 is expected to have a 1,080-pixel display, a battery in the keyboard cover and to look pretty much the same as its predecessor.

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Seagate Offers 500GB HD for Tablets

Disk maker Seagate wants to put its new 500GB Ultra Mobile hard drive into tablets, which until now have only used flash memory for internal storage. Seagate said the drive is as reliable as flash memory because it has added extra shock management, heat and vibration proofing and gyroscopic motion. It said the drive uses about the same power as a 64GB flash drive that’s in tablets and costs less than it does while offering 8 times as much storage. The drive is the industry standard 2.5-inch design, weighs 3.3 ounces and is only 5mm thick.

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ARRIS, Quantenna Win AT&T Account

– Potential Market of over 5m

Several years ago, AT&T started shipping a Wi-Fi adapter and Wi-Fi “set-top box” that allowed its U-verse TV subscribers to stream pay TV wirelessly to one remotely-located TV set per home. Cisco made the box and Broadcom supplied the Wi-Fi chips. See: “AT&T Brings Wi-Fi to the Wireline Home Network Dance” in TOR755.

AT&T’s newest such box, the VAP2500, is made by ARRIS and Quantenna supplies the Wi-Fi chips — its 4×4 802.11n chipsets. The VAP2500 was developed by the now ARRIS-owned home division of Motorola Mobility, which started working with Quantenna’s chips at least as early as 2011 when we first reported on it. See: “Motorola Uses New Wi-Fi Box for Pay-TV & OTT Video in the Home” in TOR730.

AT&T began testing the ARRIS-Quantenna combination in April 2013 in select markets and went into full-deployment mode in early August. AT&T has about 5 million pay TV subscribers. It said, “The ARRIS VAP2500 STB gives us better reach and performance. And in the future, it will give us the capability to increase the number of wireless receivers per customer home.”

It’s another indication that Motorola Mobility home division is a good acquisition for ARRIS, the home division of Motorola Mobility and their customers. ARRIS acquired it from Google, which kept the mobility part of Motorola Mobility for patents and to produce smartphones.

Quantenna had previously integrated its Wi-Fi technology with the now Ericsson-owned Mediaroom, which AT&T uses for U-verse.

Quantenna says its QSR1000 chipset uses 802.11ac Wave 2 technology to simultaneously stream multiple HD videos wirelessly to multiple devices. It said the throughput rate is 1.7 Gbps.

In 2011 Quantenna landed Netgear for its full-11n 4×4 MIMO Wi-Fi chipset. Quantenna’s Wi-Fi chipsets have also been incorporated into Intel’s Puma video gateway platform.

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Sigma Lands First Prize in the European Stakes

– Portugal Telecom Stays True to DS2’s UPA Power Technology 6 Years On

– But It Shifts to Trials with Sigma, Not to Marvell, the Purchaser Of DS2

– Shows that G.Hn Is Not Only for China, It’s for Europe, Too

Portugal Telecom (PT) with its 1.27 million customers is one hell of a European iron to pull out of the fire for its first installation, but backer Sigma Systems says that it has lined up the Portuguese incumbent telco to take the controversial three way wiring system, over rivals MoCA and HomePlug.

As far as we can see, PT was never a fan of’s predecessor, the Sigma-backed HPNA, and never installed it, but it was perhaps one of the pioneers that followed Spanish chipmaker DS2, which has been at the heart of development, and which sold itself to Marvell, a partner in Sigma’s backing. Portugal Telecom was an early trialist of UPA, the DS2 preferred powerline technology, which was absorbed into

Belgacom, British Telecom, Portugal Telecom, Telefonica, Telecom Italia and Telia Sonera were also supporters so those that have not lost patience with the technology will likely come up on the installation list over time. However, this has to be chalked up as a defeat for Marvell and a win for Sigma.

So far it has just confessed to completing a European field trial using Sigma Design’s Chipset – but the trial was described as successful.

Portugal Telecom, an Ericsson Mediaroom customer, ran its triple-play service (MEO) over a powerline network for just 60-days trial, in an unspecified number of customer homes using the actual MEO service.

A statement from Sigma Designs claimed, “Based on customers’ feedback and based on remote data collection monitoring, the conclusion of the trial was very successful. carried the MEO service without interruption at all times of the day, including peak hours when families watched more television and used more household electrical appliances.”

“We attribute consumers’ enthusiastic response to the Portugal Telecom powerline trial to the robustness of the technology. We know consumers demand flawless performance while watching premium high quality HD content wherever they are in their house,” said Gabi Hilevitz, Sigma Designs’ VP and general manager or its home connectivity business unit.

Well he would say that, but Portugal Telecom would probably not let him if the trial had tons of bugs. So it looks like, despite the hype and years of criticism from both MoCA and HomePlug, that actually works.

That is why Ashok Bhagubai, PT’s home networking and DVB systems director said, “The trial surpassed our expectations and we are pleased that Sigma’s solution was reviewed so favorably by the trial participants. It is obvious today that reached an interesting performance and robustness level.”

We won’t read too much into this, as the operator may have had multiple devices trials, including one with Marvell, though we have not heard from them. But at least a customer that has been loyal for six years remains loyal to the underlying technology – so rival technologies should now officially watch out.

Sigma Designs said that its CG5210 chipset is already deployed in numerous ODM products. Products are one thing; operators are quite another.

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LG Embeds WiDi in PC Displays

LG previously said it would add the 11ac version of Wi-Fi to its smart TVs. Now it says it’s the first to develop a PC monitor that embeds Intel’s Wireless Display (WiDi) technology directly into the LCD component. It will enable users to stream anything form a Wi-Di capable laptop — no other equipment needed.

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Pace DVR Distributes Linear Pay TV & OTT Services

OTT services are becoming a mandatory capability for pay TV services and the STBs they use.

Pace is showing a new whole-home DVR at IBC that is different from its prior models by allowing the distribution of both linear pay-TV services and of on demand content to connected smart TVs, set-top boxes, tablets, smartphones and games consoles that are connected.


“Subscribers want TV technology that simply works, is invisible and instant, with an intuitive and consistent user experience across multiple devices,” said Shane McCarthy, president of Pace International. “Discovery, playback, pause and resume should be effortless. Operators need technology platforms that are standards-based, flexible and free from vendor lock-in; that can quickly and easily be integrated into existing pay-TV headends with minimal disruption. The positive reaction of our customers to our ‘Whole Home’ solutions points to the fact that this delivers on both scores.”

Pace has also developed a software toolkit called Element to help pay TV services manage the services.

Its announcement did not say whether its uses MoCA over coax, powerline and or Wi-Fi to distribute throughout the home — although it certainly has Wi-Fi for connecting wireless devices.

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Wireless USB Added to WiGig Standard

The WiGig high-speed wireless standard will add a new wireless version of USB as the result of an agreement between the two standards bodies: the Wi-Fi Alliance and the USB Implementers Forum.

The WiGig Alliance merged into the Wi-Fi Alliance late last year.

The WiGig Alliance also has an agreement with the Video Electronics Standards Association (VESA) that will enable the certification of products that use the WiGig Display Extension Specification for streaming video from PCs and handheld devices to TVs and monitors.

WiGig provides speeds of up to 7Gbps. Because it only works over a short distance, it is considered an alternative to cables that connect devices within a room — such as HDMI (Ever look at that rat’s nest of wires behind or under the TV set?) — rather than as a replacement for Wi-Fi. Microsoft, Intel and Samsung are some of its major backers.

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Sony Unveils Mini Console That’s Also a Streaming Video Box

-Microsoft, Pay Attention!

Sony announced an impressive new device this week at a TSG press conference. The PS Vita TV was announced as a “mini-console” that enables gamers to play Vita games on the TV set. It also enables viewers to stream OTT services, such as Hulu and Netflix, to the TV set, making it something of a streaming media player, too. We know that Sony knows that’s an important part of the announcement, as its representatives stressed as much at the briefing.

The device is priced at around ¥10,000 or $100, making the PS Vita TV the least expensive gaming console device released by PlayStation. That price also earns Sony a membership to the $100 or less net-top box club.

A Few Caveats

There are few asterisks to mention. First and foremost, the $100 price tag doesn’t include the Dual Shock 3 controller, which is needed for gaming and to stream content. For users that don’t already have one, that sells for around $45 – bringing the true price of the package to $150.

The device is being sold more as a complementary gaming device for gamers already in the PlayStation ecosystem. For example, the PS Vita TV will enable gamers to play some PS Vita games on a TV set (instead of on the handheld device), and can also play PSP and PSOne games available for download. In the future, Sony plans to upgrade the PS Vita TV so that it can stream games for PlayStation 4 to another TV set, as long as the gamer already has a PS4 set up in the house.

Second, the device will launch in November in Japan, and no other country launches have been announced yet.

Microsoft, Take Note

The game console makers are at a slight disadvantage in the streaming media player department because only gamers or gaming households will purchase their expensive consoles, while the market for net-top boxes or streaming media dongles is much wider today, and with lower price points.

Microsoft has made very clear its intentions to become the entertainment hub in the living room, which is why it needs to take a lesson from Sony and launch something similar: a less expensive streaming media player, something that will fall in the under $100 category. This “Xbox mini” wouldn’t need to have games on it, though it could. It could also function as a streaming extension for homes with one Xbox 360 and three TVs, for example. That function alone would ensure the Xbox minis fly off the shelves.

The more important features of a mini Xbox would be access to Xbox Music, Xbox Video, and all the content apps now available on Xbox 360. Microsoft should be confident an Xbox mini would only expand the company’s reach in living rooms. It wouldn’t cannibalize any Xbox One sales because no one buys a $500 and up console just to stream Netflix to the TV. Pair the device with the Smartglass app, and suddenly Microsoft would be offering one of the best streaming media players on the market. It would best Apple TV in content offerings – but still would be nowhere near Roku on this front. It would certainly offer one of, if not the, best user experience with navigation and control being handled by Smartglass, as well as all of the second screen goodies Smartglass offers.

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Philips Launches a Cloud TV Service

Philips smart TV owners will be able to watch content through its newly launched cloud TV service that offers viewers access to “hundreds of TV channels” streamed from the cloud. Content offerings are currently available in countries across Europe and in Russia. The Cloud TV lineup includes free TV channels, and subscription-based premium channels, niche content channels and OTT service apps. The channels are arranged by genre and popularity and are searchable across sources.

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TWC to Embrace Net-Top Boxes in Coming Year

Time Warner Cable’s incoming CEO Robert Marcus said TWC video and broadband subscribers will be able to substitute their STBs with compatible net-top boxes instead, speaking at the Bank of America Merrill Lynch media tech conference in California this week. “Over the course of the next year or so, we will be knocking down some of the current obstacles that are in the way of not just having the TWC TV experience be a complementary service to the delivery of video via the leased set-top box, but also a replacement service so that customers can have nothing but a Roku device or an Xbox and get their video experience,” Marcus said, according to CNET. Marcus clarified that TWC isn’t interested in becoming an OTT service.

Marcus’ comments make for an interesting contrast from those made by NBCUniversal CEO Steve Burke, speaking at the very same conference. Burke told an audience that he’s skeptical of the shelf life of OTT services. “Personally, I’m skeptical over-the-top is a good business,” Burke was quoted by Home Media Magazine. “I’ve looked at it many, many times, and with or without high-definition, 4K or new technologies, I’m not sure [OTT] is a real business.” Let’s not forget that Comcast NBCUniversal is part owner of Hulu, an OTT service owned by broadcast networks.

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Set Makers Look to Original Content to Sell TV Sets

There may be the beginnings of a trend here.

Samsung has added two apps to its smart TVs that allow owners to access original content. Does that mean LG, Sony and other makers of TV sets will have to follow — as well as net-top box makers such as Apple, Google and Microsoft? It’s a path that Netflix, Amazon and Hulu are already on.

Samsung’s new “Opera” app allows users to view about 100 recordings of operas performed at Austria’s Wien National Opera House. Its “Gallery” app’ shows high-def photos by popular photographers. Both are free to owners of Samsung’s smart TVs but not to owners of smart TVs from rivals such as Sony ad LG.

Set makers are beginning to see consumers viewing more on tablets and smartphones and less on their TV sets. Another factor that’s causing a sag in sales of TV sets is the market becoming saturated with HD sets. Set makers have been fighting back with new TV technologies such as 4K and curved TVs that OLED (organic light-emitting diode display) technology.

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Verizon Wants to Charge for Use of Broadband Network

-While Reportedly Planning a National Web TV Service of Its Own

Verizon met the FCC in the DC Court of Appeals this week to make a case against net neutrality regulations that bar it from charging for access to its broadband network.

To be clear, Internet service providers (ISPs) already charge some of the larger Internet companies for assured quality delivery of their services. In a scheme that has garnered little media attention, Google, Facebook, Microsoft and others pay Comcast, Time Warner Cable and others fees – somewhere in the $10 million to $25 million amount – each year to be assigned extra ports that help to ensure delivery of those services and Websites remain speedy [See “Broadband Providers Want Netflix to Pay For Internet Access,” TOR836].

There has been some speculation that Verizon may get just what it wants this time around. In a note released by Stifel, the analyst firm argues the three-judge panel leans towards ISPs and away from FCC regulation. “This would be a very promising development for most cable and telco providers,” the company said. “Such an outcome could give telcos and cable new flexibility to strike paid-prioritization deals for offering better service to Internet edge providers.”

A decision isn’t expected for another few weeks.

In the meantime, the New York Post reports Verizon is in talks with content owners about offering FiOS programming over third party broadband networks across the country. The NY Post said Verizon is looking to “become a virtual operator,” citing sources close to those conversations.

Read the full story here:

If the DC court rules in Verizon’s favor, any and all OTT services – such as any Web TV service Verizon may launch, and of course its Redbox Instant OTT service – may be subject to “toll fees” to reach subscribers’ homes.


US Cinemas Have Record-Breaking Summer

Predictions that the cinemas are fading as a favorite place to watch movies are premature. Box office revenue for the summer season, which goes from the end of May to Labor Day, were $4.7 million, up 10% over 2012 and exceeded the all-time record, which was $4.4 billion in 2011.

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Three Studies Highlight Media Consumption Shifts to Online Viewing

Three studies were released this week that all point to the same conclusion: the young adult viewer, aged 18-34, watches much more on-demand and online video than other age groups, and watch the least amount of live linear TV.

-31% of 18-34 year olds watch time-shifted or VoD content, as do 23% of viewers aged 35-49, according to Nielsen’s latest Cross Platform report. Among 18-24,1 hour 24 minutes per week is spent watching video online, and 25-34 year olds spend 1 hour 21 minutes watching video online. Among other age groups, these two spend the most time watching online video, and conversely they least amount of time per week watching live TV.

-40% of 18-34 year old respondents to an Ipsos MediaCT survey said they watch digital video at least once a day. An additional 14% among the same age group said they watch digital video once a week. Between 8 pm and midnight each day, 47% of respondents aged 18-49 said they watch some streaming or online video between, while 67% reported watching live linear TV during this period. Thirty-six percent said they watch DVR’d content during this period and 28% said they watch VoD programming during this period. Live TV is still the favorite evening activity among these respondents, but it’s important to note the digital video beat out DVR content and VoD content.

-35% of 18-34 year old respondents to a survey commissioned by said they have stopped subscribing to pay TV. It found that 52% of 18-34 year-olds prefer to stream movies using online services such as Netflix instead of watch an on-demand pay TV movie. This survey was conducted by Zipfworks and just 100 respondents, which is a very small sample size.

Online Video Viewing Habits Becoming More TV-Like

A new report released by FreeWheel shows that as more long-form online content emerges, viewing habits are beginning to mimic TV habits.

FreeWheel’s latest quarterly “Video Monetization Report” measured online video viewing growth at a 38% increase over the last year, largely driven by tablets and mobile phones.

“As scale continues to build, digital video increasingly reflects the linear TV experience” the report said, noting that viewers are using tablets and OTT devices for long-form content consumption.

Tablets and connected TV devices, such as gaming consoles and net-top boxes, are “more aligned with TV style viewing habits,” and up to 45% of content watched via these devices is long-form.

On mobile devices, most content consumption is short form. Mobile experienced strong growth in Q2 2013, according to the report. Mobile viewing accounted for 13.2% of all views in Q2.

“Larger screens and the ‘lean back’ experience create an environment more conducive to long-form content,” the report said. “In contrast, only 20% of content watched on mobile phones was long-form, reflecting on-the-go usage of these devices for short-form content.”

Get the full report here:

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Pay TV Industry to Undergo Massive Changes by 2018

– Sales of TV Sets to Decline Sharply

– 120m Home Hotspots Enable HD Video Delivery to Mobile Devices

– Half of Broadcasters and Cinemas Will Shutter

By the time we reach 2018 the pay TV landscape will be so distorted that homes that pay for TV will become a meaningless statistic, according to a new report called “The Faultline Revisited.”

Disruptive events will shape this industry dramatically, including a shift to mass video viewing on tablets and smartphones, the near collapse of the LCD TV market as screens become wall-sized, while second TVs in the home cease to be purchased at all. There will be a huge reduction in free-to-air broadcast TV, as the industry shifts to the Internet; cellular offload and LTE Broadcast will solve the problems of videos reaching cellular devices; 75% of in-home video viewing will also shift to the tablet.

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New $500 Xiamoi TV Set Is 3D and Android-Based

The $500 47-inch MiTV smart TV set that Xiaomi Technology announced last week for the Chinese market is a 3D set. It’s doubtful that the 3D feature will help it sell TV sets in China anymore than 3D did for other makers of TVs in the rest of the world. Wistron, which makes some TV sets for Sony, will make the Android-based TV sets for Xiaomi. Vincent Chen, an analyst at Yuanta Securities, told Bloomberg that Wistron this year will ship about 3.2 million TVs, or less than 20% its 18 million capacity. LG and Samsung will supply the displays. It’s another indication that TV sets are becoming a commodity business except at the high-end such as 4K and OLED sets.

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Apple TV Enhancements Expected

Apple did not mention the Apple TV net-top box at its iPhone launch this week but there are reports that when it makes the new iOS 7 operating system available next week that the Apple TV may get new functions such as an enhancement that would allow users to play movies and TV shows they own on other people’s Apple TV, which Google’s Chromecast already does. An iPhone or iPad will be needed to authenticate. Now that Apple has acquired Matcha, many are hoping that the very useful Matcha app will be added for search and recommendation.

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Microsoft Pulls a Google Instead of an Apple

Microsoft is straddling a middle line between Apple and Google in terms of service philosophy. It has begun launching its services across device platforms, something that Apple has abhorred and Google has embraced. Microsoft has launched three services now across platforms: Smartglass, which is device agnostic, Office, which Microsoft just recently released to iPhone, and Xbox Music, its music streaming service that was previously tied to Windows 8 devices. “To actually build that ecosystem, we need to bring people into it,” Xbox Music general manager Jerry Johnson told The Verge in an interview.

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TWC’s Britt Sees No Free Market in Pay TV

Time Warner Cable’s CEO Glen Britt said disputes like the one it just settled with CBS are the result of legislation, not a “free market.” “We have an industry structure in the television part that is not a free market,” Britt told CED. “It was totally determined by the ‘92 legislation,” meaning the Cable Television Consumer Protection and Competition Act which requires pay TV providers to carry OTA channels. Britt said that regulation needs to be updated. “If you were a distributor and programming costs were going up much faster than revenues, really, if that continues that will be a much less important part of our offerings in the future compared to broadband and B2B,” he said.

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No Surprise that Apple Didn’t Launch a Low-Cost iPhone

Why are experts and analysts surprised that Apple didn’t this week launch a lower-cost iPhone? Apple doesn’t have any low-cost genes in its DNA. It doesn’t make low-cost PCs — that’s for the Microsoft-Intel gang — and it won’t make low-cost tablets. Its concept is to produce products with new features that are useful, carefully honing the user interface and fully integrating software, hardware and services. Then it sells them at premium prices.

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YouTube’s First Ever Film Festival in Toronto

YouTube is stealing some of the spotlight from the Toronto International Film Festival with its very first festival, wittily named Buffer Festival. Described as a digital version of TIFF, Buffer Festival will showcase 50 feature-length films that range from highlighted collections of YouTube content to fresh, original offerings from YouTube celebrities. Buffer Festival will be shown across four theaters in Toronto November 8-10.

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Hisense Adds Opera TV Store to Smart TVs

Hisense has put the Opera TV Store on some models of its smart TVs. The apps run the gamut: video, music, social media, games, news and utilities. The Opera TV Store is already available on smart TVs and Blu-ray Disc players from Sony and TCL and will soon be added to others.

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Kodak Emerges from Its Digital Media Nightmare

The digital media industry strikes deeply. Eastman Kodak, once the king of all things pictures, last week emerged from bankruptcy with 8,500 employees, down from 64,000 a decade ago. It’ll make components for digital devices such as tablets and smartphones and make film for the studios.

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The Online Reporter 844 – September 6-12, 2013

Issue 844        September 6-12, 2013


  • Here Comes the 4K Content
  • The Dawning of the Age of Virtual Pay TV Operators
  • What Did You Do Labor Day Weekend?
  • Consumers’ Love for Amazon Could Make It a Potent OTT Service
  • Microsoft’s Problems Were Beyond Ballmer’s Control
  • 4 Lessons from the TWC-CBS Dispute
  • It’s Going to Be a Hot Holiday in the Gaming Console Industry
  • Microsoft Exits IPTV Market to Ericsson’s Delight


  • Here Come the Smartphones with 4K Cameras
  • Xiaomi Launches $490 47-inch Smart TV
  • DVB Group Backs Three 4K Demos at IFA



  • Viacom Knows Its Audience Is Online
  • Target Will Have to Work to Make ‘Target Ticket’ A Success
  • ‘The Horror Show’ Is the Newest Niche OTT Service in Town
  • Hulu Pulls a Netflix, Offers Past Seasons Ahead of Premiere
  • Rakuten Buys Another Video Site, Viki
  • The Video Search Engine Blinkx Pivots Toward Curation


  • Netflix Streams Choice Comedy Specials



  • LG to Launch First 1080p HD Tablet
  • Yawn! Microsoft Makes $100 Pro Price Cuts Permanent


  • Deutsche Telekom in Massive Wireless/Wireline Overhaul


  • Hillcrest Labs Nabs Hisense for Its Motion-Sensing Technology


  • TiVo Couldn’t Care Less about In-Home DVRs in the Long Run


  • The Wearable Revolution Will Come, But the Smart Watch Is Not the Catalyst


  • Amplify Launches MOOC AP Computer Science Course
  • Microsoft’s Asha Opportunity
  • Microsoft Will Have to Earn Every Point of Market Share
  • Charter, Cablevision Abandon Canoe
  • TalkTalk Has Added 500k YouView Subscribers
  • Next Version of Android Gets a Corporate Sponsor
  • Samsung Shows Off a 98-inch 4K Set


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Here Comes the 4K Content

– Sony Launches Online 4K Store with 70 Titles, More Coming

In addition to announcing 4K TV sets and projectors at IFA, Sony announced Video Unlimited 4K, an online video store that offers 4K content, native and not upscaled, for rent or purchase. The store opens with over 70 movies and TV shows including many viewers’ must see “Breaking Bad” from AMC.

Sony said there would be over 100 titles in the store by year-end.

However, consumers can only access the store with Sony’s 4K media player, the FMP-X1, which only works with Sony’s 4K sets. It’s an Apple-like approach and can only succeed if Sony has the best 4K sets and the “most-est, best-est” 4K content.

The prices seem reasonable, especially to someone that has just paid thousands for a 4K TV set.

– 24-hour rentals of TV shows $3.99

– 24-hour rentals of movies $7.99

– Movie purchases $29.99

Sony also announced two new 4K sets — the 55-inch XBR-55X850A and the 65-inch XBR-65X850A — but has not yet provided prices and availability. The new units have a thinner bezel because they do not have “the magnetic fluid speaker system” that’s in its previously announced XBR-55X900A and XBR-65X900A models that are already in stores. The new units are intended to be connected to a separate surround sound system.

“We have been spearheading the advancement of 4K Ultra HD technology from the start, and have now reached another milestone as promised with the Video Unlimited 4K service going live,” said Sony Electronics president and COO Phil Molyneux.

Molyneux and other Sony Electronics executives are no doubt feeling the heat from the Electronics’ recent financial failures although its most recent financial report was positive. Sony Electronics, and all of Sony, need their 4K products to be enormously successful. If 4K takes off with consumers, and it seems it will, it will be perhaps Sony Electronics’ last, best hope for financial success. HD TV sets have become commodities, with margin so low it makes it impossible for companies like Sony that have high overheads to succeed financially.

Sony appears to be off to a good start with its 4K sets and 4K content.

The Broadband Bandwidth Factor

Sony said the 4K movies will be from 45 to 60Gbs in size. That means users can store about 50 flicks on its $600 broadband-connected FMP-X1 4K media player, at which point Sony may offer some sort of external storage.

Sony said it’s using encoding/decoding technology from Eye IO for compression/decompression. So does Netflix so it should have pretty good credentials.

Some broadband service providers such as AT&T and Cox have set monthly limits on the number of GBs a subscriber can download; after that it’s an additional charge. Service providers may see the advent of 4K as an opportunity to increase revenue by either raising rates/setting limits for subscribers or by hitting up OTT services such as Sony to pay more.

Sony said that compression/decompression technologies are being developed that will halve the size of 4K files, no doubt referring to HEVC.

Sony has another eye on the OTT ball, some sort of broadband-delivered pay TV service that would also need lots of broadband. It reportedly has already signed a deal for such a service with Viacom, owner of Paramount Studios and a number of popular pay TV channels such as MTV and Comedy Central.

Sony also said it will support the coming HDMI 2.0 standard by remotely updating its TV sets and players. The 2.0 version is needed by 4K to transmit fast-moving 4K Ultra HD 60 frames per second content such as sports.

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The Dawning of the Age of Virtual Pay TV Operators

-Virtual Operators Capitalize on Technology and Low Cost Entry

-‘Basically Anybody Can Put a Service Together’

-Don’t Expect an End to the Bundle, Though

There’s no more denying that virtual Pay TV operators are coming. There are already a number of broadband-delivered TV services in Europe. Magine has launched in Sweden and Spain, and in the UK, and BSkyB’s Sky has an OTT-only offering.

In the US, Intel is planning to launch its broadband-delivered pay TV service by year end. News surfaced this week from the newspaper The Oregonian, reporting that Intel was testing STBs – or perhaps they are better called net-top boxes – among about 1,000 employees.

The virtual pay TV operators, known as “Vpops” have one huge advantage over traditional pay TV services, and that is the cost. “The costs involved in delivering over the top are so much lower than the traditional network approach that cable or satellite take, that basically anybody can put a service together,” Colin Dixon industry observer and chief analyst of nScreenMedia, told The Online Reporter. “It’s remarkable when you think about how little money it takes to start something up like this, and how well it’s scaled.”

Dixon released a report last week entitled “The Virtual Operator Advantage: Five Reasons Online Pay TV Will Ultimately Win Out.”

Here are the key areas where Vpops have advantages, per Dixon’s report:

-Delivery network costs: A virtual operator delivering over the top doesn’t incur a lot of the costs until it signs up subscribers, which is the reverse of traditional pay television. Vpops are able to capitalize on existing broadband infrastructure to deliver services to subscribers. That’s actually good news for telcos and cablecos that offer broadband subscriptions, because it ensures high demand for that very lucrative service.

-Reliance on consumer devices: A Vpop doesn’t need to hand out STBs to subscribers. This both saves money and enables Vpops to respond and adapt more quickly to advances in delivery and codec, without having to spend money on truck rolls. And as a Vpop service will be largely accessed via tablets, laptops and connected TVs, a Vpop can also take advantage of consumer’s tendencies to refresh personal devices every two years or so – to get the latest tablet, the latest smartphone and the newest net-top box.

The caveat to this advantage is that the Vpop will need to ensure its service works across a diverse snumber of operating systems, platforms, players and broadband networks.

-Flexible content platform: In respect to both content sources, whether DVR, VoD or linear programming, and screens to watch content on, flexibility is a hallmark of an OTT service. A Vpop service must offer content on all devices, and must enable subscribers to move seamlessly between content sources.

According to Dixon, these are some of the key features of a broadband-delivered service that gives a Vpop an advantage over traditional pay TV.

“It’s a radically different approach, and it seems to be resonating pretty well with consumers,” Dixon said. For more of Dixon’s report, visit

The business fundamentals of a Vpop service will be very different from traditional pay-TV services, at least from a technology and infrastructure perspective. But the content side of any pay TV service hasn’t yet experienced the shift needed for virtual operators to deliver the OTT-like experience consumers want.

Not So Fast, Disruptors

The US market lags behind Europe in pay TV innovation, and that’s especially true when it comes to content owners letting shows be accessed on devices.

As Dixon pointed out, the public broadcaster BBC actually pays Sky to carry its channels, whereas in the US, broadcasters CBS, ABC, Fox and NBCUniversal charge service providers an arm and a leg for retransmitting their signals.

The Time Warner Cable-CBS dispute has shown that the content business in the US is top dog, and there’s a lesson in that for Intel, Google, Apple and Sony or anyone else looking to launch a broadband-delivered pay TV service.

“In order to get the content in the US under today’s conditions, you will have to play by the covenant rules of pay television,” Dixon said. That translates to accepting the same terms and conditions for content that Comcast, Time Warner Cable and Dish Networks have had to accept.

The Sony-Viacom deal is a case in point. News of the preliminary deal sent ripples through the entertainment industry, and we were all impressed to learn Sony (out of left field) had inked a deal with Viacom for linear live pay TV programming to be delivered over the Internet. Upon closer examination, the deal was far less groundbreaking than initially perceived. Sony and Viacom had reached a tentative deal for a bundle of Viacom pay TV channels – the same bundle available on pay TV.

“I fully expected that was exactly what Sony licensed,” Dixon said. “They basically got what Viacom makes available to pay TV, under the same terms and conditions, but I bet they paid slightly more.”

Of course, we don’t know exactly what the deal was for, but it’s likely Sony received the same kind of treatment the satcos received when they first got in the content business – or the telcos when they first launched IPTV.

The deal certainly has laid the groundwork for more pay TV channels and networks to follow suit, but what’s clear is that whatever content deals the Vpop aspirants Intel et al receive, they won’t be very revolutionary in terms of the services delivered.

The Virtual Operator Paradox

This dynamic poses a paradox: on the one hand, virtual operators need to have that signature OTT flexibility – access to content on multiple devices, with fewer channels that are never watched, and for a lower price – to attract subscribers away from pay TV. On the other hand, virtual operators need to be more static and pay TV-like – limiting access, surrendering digital rights to content owners, keeping bundled channels – in order to sign the content deals needed to attract subscribers away from pay TV.

Sony was able to sign Viacom because, essentially, it was willing to pay for all the undesirable channels, just as TWC and Comcast do. Intel, if and when it signs its own content deals, will probably do the same, as will Google and Apple.

That puts the virtual operator at something of a disadvantage in terms of service. Here is the same programming as linear TV, with none of the flexibility consumers want from an OTT service, for the same price as pay TV, with less quality of service delivery. In fact, this type of offering may even be more expensive, as consumers will have to have a robust broadband subscription to support the service and guarantee pay TV-like consistent quality.

The Value of the Channel Is Changing

The bottom line here: It won’t be a provider or potential operator, like Intel or Sony, to break up the bundle. That change will have to come from viewers and their dramatically shifting media consumption habits.

“When you and I go online and we find stuff [to watch] we typically pay just for what we are interested in,” Dixon said. You don’t get sports, news, weather, DIY on Netflix or iTunes. “It’s very specifically an entertainment service.”

There have been a number of studies that show pay TV viewers tend to only watch around 10 channels of their pay TV subscriptions. Dixon said if a pay TV sub pays an average of $80 per month for pay TV, they are essentially paying $8 per channel they watch, per month – the same price as Hulu or Netflix.

“How much content is available through one of those channels, compared to Netflix or Hulu?” he said. The answer is far less.

“As we become use to that world, it will become increasingly problematic for consumers that they are paying so much money on pay TV when they are spending less and less time with it,” Dixon said, “because they are spending more time online, and because the models online are so different.”

Dixon said he believes the pay TV bundle will erode eventually, but it’s unlikely Intel or Sony will be able to break that mold.

The Business of Pay TV Isn’t Attractive Anymore

Traditional pay TV providers aren’t in a great position these days, either. Cablevision CEO James Dolan said as much when he suggested the company might leave the content business at some point in the future.

“This business is becoming less and less attractive,” Dixon said.

On one hand, pay TV providers are grappling with rapidly rising content costs. “Believe it or not, pay TV operators are not passing through all of those costs,” Dixon said. “They absorb some of them, so the margins on their business are eroding.”

On the other hand, more and more content is becoming available online for very little money. “They’re now starting to get competition from the Web for core cable properties,” Dixon said. “You’re starting to see competition online for a lot of the cable basic channels that get us buying. There’ll come a time in the not-too-distant future where quite a few of us are going ‘I’m not paying for this [anymore].’”

When that happens, virtual operators such as Intel, Google or Apple will need to have a platform that is much more flexible than a traditional pay TV operator in order to succeed.

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What Did You Do Labor Day Weekend?

– These Companies Spent It in Negotiations: Microsoft, Nokia, Verizon, Vodafone, Time Warner Cable & CBS

– So Did Their Lawyers & Bankers

– Only Time Can Tell for Certain Who Will Be the Winners & Losers

There were announcements this past Tuesday morning for three major events that were consummated over the US’ three-day Labor Day weekend when most Americans spend relaxing as the last weekend of summer. The lessons to be learned appear to be:

– Mobile is the king in devices and networks

– Content is king of kings

Will Nokia’s Devices & Services Operations Help Microsoft in the Mobile Market?

Microsoft has agreed to acquire Nokia’s money losing and market share-declining Devices & Services division plus license Nokia patent. It is not Nokia’s acquiring profitable and growing software and services. It would be as if Google had purchased Motorola Mobility (MM) but not its STB box business, which in the end is exactly what happened when Google sold MM’s STB operation to STB maker ARRIS.

Microsoft evidently believes:

– It can use Windows Phone to bring resurgence in Nokia’s handset market share, but it might also be a way for Microsoft to adopt and enhance a non-Windows operating system, especially for emerging markets where price is a major consideration.

– Nokia’s expertise and global reach will help it produce and market future models of Surface tablets. It also gives Microsoft lots of expertise in using ARM processors in tablets and smartphones.

Current Nokia CEO, Stephen Elop has been appointed head of all Microsoft hardware products, including the Xbox gaming console and Surface tablets in addition to the Microsoft-owned Nokia handset division. That leads to speculation that Elop could replace the retiring Steve Ballmer as Microsoft CEO. The Seattle Times quoted Ballmer as saying, “Stephen will go from external [candidate] to internal.”

Nokia will focus on its network infrastructure and services business (NSN), its HERE mapping and location services, and advanced technology development and licensing. Nokia keeps the Nokia brand name but Microsoft has a license to use it for 10 years on existing mobile phones and some future ones. Current Nokia CFO Risto Siilasmaa will take over as interim CEO for Nokia while continuing to serve as chairman of Nokia’s board

Microsoft paid cash for Nokia’s handset division and it 32,000 employees: €3.79 billion for the handset business itself plus €1.65 billion to license patents, a total of €5.44 billion, about $7.17 billion at current exchange rates. The deal included Microsoft making €1.5 billion in financing immediately available to Nokia in advance of the closing.

The deal is seen as a major, some might say desperate, move by Microsoft to become a market leader in mobile devices, especially after its failures in Windows tablets and smartphones. Apple, Google and even Samsung have a substantial lead on Microsoft in those markets. Juniper Research estimates Nokia’s smartphone shipment market share to be only 6% in 2013.

Negotiations for the acquisition must have been well underway when Ballmer announced that he was stepping down. If so, Ballmer would have known at that point that Elop would soon be a Microsoft employee.

However, Elop’s successes at Nokia have been much less than many expected. For example, Windows Phone market globally is hardly noticeable compared to iOS and Android.

Ballmer has spearheaded the call for Microsoft to become a “devices and services” instead of only hardware. Buying Nokia’s Devices & Services operation is a step towards that goal.

The move also means that Nokia, once the world’s largest maker of mobile phones, has thrown in the towel, perhaps saying, “and good riddance.”

Tony Cripps, principal device analyst at Ovum, said, “Microsoft has some areas of definite advantage over its rivals, especially in gaming via Xbox, in consumer-business crossover services such as VoIP via Skype and in the ease of integration of Windows Phone with its own Office 365. Moreover, we shouldn’t forget its huge global installed base of PCs, which are as much a part of the complete picture as smartphones, tablets and online services.” He concluded that beyond Apple and Google, Microsoft is the best equipped of the consumer tech giants to be able to put all the requisite pieces in place to succeed long term but remains skeptical about Microsoft’s ability to execute.

John Strand of Strand Consult said the bigger question “is whether Microsoft is buying a healthy business or just an insurance policy against a Chinese takeover of the partner that drives the development of sales of Microsoft-based mobile phones. One thing is certain and that is that the other manufacturers who make Microsoft-based mobile phones — HTC, Samsung, and Huawei — probably will consider how cooperation should look in the future – the question is whether Microsoft will be the only manufacturer of hardware on the platform as it is case with Xbox or if there will be a range of hardware manufacturers from the PC world.

What happened over the years at Microsoft is what happens at monopolies, including government agencies. They ossify and kill innovation and risk taking. Microsoft’s Windows monopoly as a PC operating system brought in billions of dollars, much of which the company squandered on failed ventures. Many believe Microsoft’s acquisition of Nokia’s handset division, again funded by its Windows monopoly, will also fail. The as yet unanswered questions are:

– Will Nokia’s expertise at developing and marketing mobile devices (although those have mostly failed of late), help Microsoft produce tablets, smartphones and other devices that can achieve a significant market share? Nokia has two other assets that Microsoft needs: ready sales access to all of the world’s cellcos and a low-cost line of feature phones called Asha that uses a non-Windows operating system that came from a start-up called Smarterphone, which Nokia acquired in January 2012. Let’s hope Microsoft’s love of all-things Windows doesn’t let it squash the Asha products. There is precedent. Microsoft let Xbox escape the Windows prison.


– Will Microsoft’s money and corporate clout help Nokia’s handset division market a line of Microsoft-branded mobile devices? The Windows hold on the corporate market and especially the consumer market is diminishing as tablets and smartphones gain prominence. Even Samsung this week announced a corporate security for its Android-based smartphones.

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Subscribers Lose in the CBS-Time Warner Cable Dispute over Retransmission Fees

– But Get Their Beloved Football

CBS and Time Warner Cable (TWC) have settled their dispute over how much TWC would pay in retransmission fees to carry CBS-owned local stations. The two had had an ugly fight in public but decided to keep the settlement private. If TWC ended up paying more that it had been, chances are that TWC subscribers will soon pay more, which is what TWC has said was the reason it was resisting CBS’ demands for higher transmission fees. The fact that the settlement was reached on the Monday before the NFL season begins probably indicates that, once again, content won.

For more information, see our article “4 Lessons from the TWC-CBS Dispute” in this week’s edition.

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Verizon Bets $130b on Wireless, as Much as It Is Worth

Verizon and its bankers think that the 45% of Verizon Wireless it doesn’t is worth almost as much as the $135 billion that Wall Street thinks the whole company was worth. That’s what Verizon is paying, $130 billion in cash and Verizon stock to Vodafone for the 45% of Verizon Wireless that Vodafone has owned. That means that Verizon and its bankers think that Verizon Wireless by itself is worth $389 billion.

However, Verizon and its 55% share of Verizon Wireless were worth only $135 billion on Wall Street on the Friday before the deal was announced.

$135 billion the amount that stockholders valued all of Verizon’s wireline operations and its 55% ownership of Verizon Wireless the day before the deal was announced.

$130 billion the amount that Verizon is paying Vodafone for 45% of Verizon Wireless

$289 billion the amount Verizon Wireless is worth based on the $130 billion that Verizon is paying to buy Vodafone’s 45%

If Verizon Wireless is worth $289 billion to Verizon and its bankers but shareholders only value the entire company at $135 billion, does that mean Verizon’s wireline operations including its vaunted FiOS all-fiber network have a negative value? If so, what does Verizon see as Verizon’s Wireless future? Whatever it is must be pretty big.

The move a) frees up Vodafone to make other moves in the US market, assuming the terms of the buyout do not prohibit that, and b) gives Verizon to freedom to increase its investment on a nationwide wireless broadband network for delivering content and services including streaming HD videos to mobile and stationary devices.

A nationwide wireless broadband network capable of delivering HD video streams to mobile and stationary devices is a path that Verizon has been on for quite some time as shown by:

– Its decision not to rebuild its copper wire network in areas that were heavily damaged by tropical storm Sandy. Instead it either rebuilt it in densely populated areas with fiber or offered only wireless connectivity in less-densely populated areas and resort areas.

– Its majority ownership of the recently launched nationwide OTT service, Redbox Instant, which offers recently released movies and TV shows for rent or sale. Redbox owner Coinstar owns the shares that Verizon does not.

– Its offering and previews of its coming offerings of in-home STBs that connect only to its 4G wireless broadband network at speeds of 25 Mbps and higher. Mobile and stationary devices in the home will connect to the Net via Verizon’s 4G STBs.

Verizon confirmed that any and all Canadian initiatives are now off the table and that all contracts that it has in place with VOD services will remain in place.

Freed of its minority ownership of Verizon Wireless, Vodafone could now consider other investment opportunities such as:

– Acquiring T-Mobile USA, which its owner Deutsche Telekom recently tried to sell to AT&T until the FCC killed the deal.

– Acquiring wireline companies in Europe or even the US, a path that Vodafone has already started on. Liberty Global (owner of Virgin Media), CenturyLink or one of the Canadian telcos might become targets.

The move also raises questions about what AT&T might do such as acquiring Vodafone or launching its own OTT service, maybe even buying one — like Hulu — or partnering up with one such as Amazon or Google.

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Consumers’ Love for Amazon Could Make It a Potent OTT Service

There is ample evidence for rival OTT services to fear Amazon’s rise as a major player in OTT services, both as a subscription and purchase/rental service.

Fifty-eight percent of the 5,600 consumers it surveyed called Amazon the “most preferred online merchant” for both apparel and non-apparel items, according to Prosper Insights & Analytics. If Amazon were to garner that same designation for online media it would become a powerful threat to Netflix, Apple, Hulu and the remainder of the OTT gang.

Walmart was a distant second at 18%, followed by eBay, Kohls and Best Buy. Amazon, Walmart and Best Buy are large resellers of DVDs and certain to have suffered from the decline in sales of physical media. Target, another nationwide chain of department stores, is about to launch an OTT service.

Amazon has gone to great lengths to become the number one online “department store” — from a “don’t ask” return policy to its own line of tablets and eBook readers and even to same-day delivery in many cities. Starting as an online seller of books, Amazon reported 2012 revenues of almost $16 billion, an increase of 27% over the following year. Amazon has shown again and again that it will spend as much as it takes to succeed in a retail sector, even if that means losing money for an interim period.

Amazon Is Very Much More than the Online Bookseller It Started as:

-Cloud services

-Subscription & purchase rental OTT


-Kindle tablets and eBook readers


-Computer gear and software

-Everything you could find in a hardware store

It most recent new retail venture is Amazon Art, which offers access to 40,000 works at more than 150 galleries.

Pam Goodfellow, consumer insights director at Prosper, said, “Amazon makes it easy for shoppers to return to the site again and again. The Subscribe & Save program is a good example of that. There’s one-click ordering, and ship-to addresses are stored for shoppers. When something is convenient, shoppers gravitate to it.”

Amazon has already shown it is capable of successfully selling its own brand of hardware, tablets, against the big boys — Apple, Samsung and Microsoft.

In a recent article in The Online Reporter titled “Amazon Wants to Ride the OTT Wave” we reported that Amazon has made clear its intentions for the OTT market —from acquiring content licenses to launching its own Web series. It now has over 40,000 titles, including individual episodes, of some very popular content. However, earlier this year a Morningstar analyst estimated Amazon had around 10 million subscribers, based on market research by the Consumer Intelligence Research Partners. That’s significantly more than prior estimates of between four and five million, but Amazon still badly trails Netflix, which has 29.86 million subscribers and Hulu, which claims to have 30 million monthly viewers for its free, ad-supported Hulu service and 4 million paying subscribers to its Hulu Plus.

We also criticized aspects of Amazon’s services — it has the look and feel of a gimmicky add-on to its free shipping service instead of a full-blown entertainment experience. We also offered some suggestions for improving such as making its apps available on more devices.

We went so far as to say that Amazon should develop its own OTT net-top box (NTB) a la Apple TV, Roku and Chromecast. A Kindle-brand NTB, perhaps one that would also function as a gaming console, could come with an Amazon Instant Video credit, or a discounted Amazon Prime subscription, much as it has done with its various Kindle Fires.

Amazon, we said, would need to have, in addition to Amazon Prime and Amazon Instant Video, other OTT services such as Netflix, Hulu Plus, Redbox Instant and maybe even TV Everywhere apps such as HBO Go, ESPN Watch apps, Disney Watch apps and the others. It should also include a promotion for Amazon Prime, to help pick up more subscribers. Amazon Prime offers a large library of popular content, some of it exclusively, that might attract consumers to its Kindle net-top box.

Additionally, Amazon has been testing technology from Globalstar, as we reported in last week’s edition that might allow Amazon to build its own wireless network for delivering digital content directly to purchasers’ mobile and stationary devices.

It was the seventh consecutive years that consumers designated Amazon as their “most preferred online merchant,” an ominous warning to other OTT services.

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Microsoft’s Problems Were beyond Ballmer’s Control

The stock market’s newfound love for Microsoft lasted only a few days after Steve Ballmer said he would retire within 12 months but then Microsoft announced it had acquired Nokia’s handset division and the share price headed down again. However, all of the world’s wisdom is not on Wall Street. Besides, many of Microsoft’s problems were not caused by Ballmer and almost certainly won’t end when he finally departs. Faultline’s Peter White, who has followed Microsoft for more than two decades, gives his perspective.

Many of Microsoft’s errors are not Ballmer’s fault and we feel that many of them were inevitable. The company that dominated PC architectures did it in such a ruthless fashion that it made the world wary of allowing it to dominate anything else ever again, and a wall of fear was thrown up against Microsoft by operators and handset vendors alike in mobile, and it managed to lose substantial leads by the simple misstep of saying, “Whatever the problem is, the answer is Windows,” when clearly it wasn’t – because software never stands still, not even for someone as mighty as Microsoft.

This too was inevitable, not because anyone was forcing Microsoft’s hand, but because the company internally placed decision-making power where the corporate power was – the only blame attachable to Ballmer was not being a technologist, so that he could see that this approach was plain dumb. Being a marketer, he could not be expected to do anything but agree with the last technical opinion he heard.

Windows was NOT the answer in online music, or in DRM or in online video formats, and Microsoft made multiple missteps in each.

It once owned the free DRM market and still does to some extent, but its PlayReady architecture borrows concepts and IPR from others and it lost money on the deal and has had to allow it to work outside of its architecture to retain relevance. Microsoft once owned the online video market with its Windows Media formats, but Adobe put paid to that, and even though its IIS Smooth Streaming system remains in play for ABR video, it will never dominate with formats again and once more had to allow non-Microsoft devices to be attached to these streams. Today standards bodies innovate faster than Microsoft, and it straggles behind in every technical avenue, due to its slow internal decision making. It tried to use VC1 to own the codec market, but ended up paying more money to rival IPR hoards over its arrogance that it thought it could “give” away software that used other companies’ ideas.

Xbox did a good job of a full frontal attack on the games console market, but it has never made the company a single cent, and buying business for the sake of vanity was always going to be a mistake. We called for the sale of Mediaroom often enough, but that has since happened, primarily after it began to wither on the vine. Mediaroom too never made any money. Microsoft has advertising revenues, but nothing like Google’s, despite massive purchases in this market, and it has search revenues, again nowhere near as strong as Google’s.

Time and time again Microsoft’s insistence that all technology architectures should owe something to Windows has proved a stumbling block and Ballmer was not the man to alter this. Chances are his replacement won’t be either.

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4 Lessons from the TWC-CBS Dispute

Football fans must have been glad to hear Time Warner Cable and CBS have now reached a resolution to the contract negotiation dispute that lasted about a month. We and others predicted the two would make nice before the American football season begins next week.

The few details of the resolution that leaked out have been thoroughly analyzed, and consensus has ruled CBS was the victor. But here are four more lessons learned from the dispute.

Really, Antenna TV Is Dead

From an outsider’s perspective, it is really laughable that the TWC-CBS dispute was over content that is already made available for free over-the-air (OTA) to everyone in the US with an antenna that costs less than $100. What’s more bizarre is that it was the pay TV service that abhors antennae, Time Warner Cable, not CBS, that floated the idea of handing out free antennae to viewers.

CBS, it seems, didn’t want to remind viewers they could get the same stuff for free, with or without Time Warner Cable. If CBS could, it might have even shut off its stations’ OTA broadcasts in the affected markets. Of course it didn’t do that, instead it blocked all TWC broadband subscribers from accessing This is free, OTA content we’re talking about!

It raises the question: “Why are pay TV companies and subsequently their subscribers forced by the government to pay for content that is available for free to most people over an antenna that sells for less than $100?”

CBS sent a loud and clear message with this dispute: antenna TV is dead.

Digital Rights Are Worth Weight in Gold

Part of the dispute seems to have been around CBS’s digital rights and monetization of the content. CBS’ Les Moonves said in a memo to employees the resolution of the dispute gave CBS “the ability to monetize content on all the new, developing platforms that are now transforming the way people watch television.”

Those digital rights will prove incredibly valuable to CBS in the future, more so than even the free spectrum they currently broadcast over but nobody watches.

CBS may be angling to put all of its digital content behind the pay TV paywall, much like Fox and ABC have already done with apps, limiting online viewership to authenticated pay TV subs.

And broadcasters wonder why a service like Aereo pops up? If the content is free with an antenna, why shouldn’t it be free over the Internet with a broadband subscription? This shows that there is a place for broadband delivered TV.

CBS will also likely maintain control of and expand streaming licensing agreements with the OTT services such as Amazon.

Linear TV is for Sports

While one major take-away from the dispute is content is king; another, more subtle take away is that CBS is most relevant to viewers and TWC when sports is involved. No one was crying over missing a few episodes of “Under the Dome,” presumably because they can catch-up on missed shows later. But TWC wouldn’t dare let subscribers miss out on the football games – which must needs be viewed in real time, on linear TV. It’s the only thing, arguably, that meets this criteria so sharply today – other than reports of a nearby disaster.

A case can be made for reality competition shows such as “American Idol,” but it’s hard to imagine this type of dispute being put to rest for the 13th season of the singing competition.

Pay TV Profit Margins Are Shrinking

CBS was reportedly asking for upwards of $2 a month in retransmission fees for each of its 3.2 million subscribers, up from the reported 56 cents a month per subscriber. There has been some discussion about that retransmission hike leading to price hike for subscribers, but TWC is actually still eating some of that increase in CBS costs. TWC pays the fees whether or not a subscriber ever watches the local CBS channels.

Content costs are rising faster than operators can pass on to subscribers and subscriber growth has been stagnant at best estimate. Broadband revenue, on the other hand, is booming for pay TV operators.

Time Warner Cable chairman and CEO Glenn Britt said. “While we certainly didn’t get everything we wanted, ultimately we ended up in a much better place than when we started.” That translates to most as, “We paid more than we used to but not as much as CBS was asking.”

Moonves told CNBC it’s possible to imagine a scenario in which CBS delivered all its shows over broadband. That statement and the CBS-TWC ordeal puts Cablevision CEO Jim Dolan’s comments into crystal clear perspective: cable companies might soon look for a graceful exit out of the content business and focus on broadband.

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It’s Going to Be a Hot Holiday in the Gaming Console Industry

Here’s some good news for Microsoft, its employees and shareholders.

Reuters reports that an unnamed Microsoft executive said many stores have already sold out of Xbox One entertainment consoles they expect to have available for pre-orders. Its availability is scheduled for November 22 in 13 countries, a week after Sony starts shipping its PlayStation 4 in the States but ahead of Sony in Europe. Sony said last month it has more than 1 million pre-orders worldwide. The PlayStation 4 is priced $100 lower than the Xbox One’s $499 price.

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Microsoft Exits IPTV Market to Ericsson’s Delight

– Microsoft Spent Millions on MediaRoom & Had a Dominant Market Share

– But Its Heart & Mind Has Turned to Mobile

Ericsson this week finalized its deal to acquire its Mediaroom IPTV software from Microsoft. It was announced in April 2013.

Mediaroom is a big success. There are about 13 million homes with 24 million STBs that have it. About 60 of the world’s telcos use Mediaroom to operate their pay TV networks and STBs. However, Microsoft seems to have lost interest in it despite its success and despite having put millions into developing and marketing it.

A few years ago, Mediaroom was a major focus of Microsoft’s booths at trade shows. Its success gave Microsoft a dominant share of the “living room” market but now it “only” has the Xbox for that market. Perhaps Microsoft felt that the cablecos, with whom it is busy making deals for the Xbox to be a secondary STB, resented it being such a buddy-buddy supplier to their archrival telcos.

Ericsson said Mediaroom is the world’s most deployed IPTV platform and that acquiring it gives it about 25% of the global IPTV market.

Just to clarify, IPTV is not TV delivered over an open broadband network. It is not pay TV delivered over a closed network even though it uses the same wires to the home as broadband. IPTV uses Internet Protocol-based technology to deliver pay TV, hence IPTV. The cablecos equivalent technology is called QAM, but many cablecos are upgrading to IPTV technology because it provides a more Internet-like experience, is easier to develop apps for and IPTV hardware is generally less expensive than the proprietary QAM and available from more suppliers. In short IP is “where it’s at” for both telcos and increasingly cablecos.

IPTV is a big and growing market. Per Borgklint, SVP and head of business unit support solutions at Ericsson said: “IPTV subscribers alone are predicted to grow by more than 18% each year to reach 105 million subscribers and revenue of $45 billion by 2015. By incorporating Mediaroom into our broad portfolio of solutions we will ensure our customers have the ultimate partner as they transform towards true TV Anywhere multi-screen services and optimized video delivery in any network.”

It’s not clear how Ericsson intends to market its IPTV technology successfully to the cablecos, or even whether it can. Potentially the telcos’ IPTV market is much larger than the cablecos’.

Ericsson said Mediaroom, based in Mountain View, California, brings it “a skilled team “of 400 employees “with deep experience in the development and delivery of innovative IPTV services.” And Mediaroom seems sure to get more executive attention from Ericsson than it did in recent years from Microsoft, whose executives’ minds seem to have been entirely on mobile devices.

Selling MediaRoom leaves a large gap in Microsoft’s “living room” strategy, which it seems it can only overcome with an Xbox for all living rooms, not just those that want a gaming console. That would include an Xbox that sells for under $100, preferably under $50 that compete against the likes of Apple TV, Roku, Google Chromecast and whatever Intel is cooking up.


Here Come the Smartphones with 4K Cameras

Want 4K videos to watch on that new 4K TV set? Shoot them yourself.

Acer’s new Liquid S2 smartphone has a Qualcomm 800 processor that allows it to shoot home videos in 4K resolution. Its 6-inch screen is not 4K so owners will need a 4K TV set to watch in 4K.

We expect other devices that record in 4K (Ultra HD is the official name) to be launched for next week’s IFA trade show in Berlin.

The Acer smartphone also takes videos in 1080p at 60 frames per second, which allows for a four-times slow-motion effect.

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DVB Group Backs Three 4K Demos at IFA

There’ll be lots of 4K demonstrations next week at Berlin’s IFA trade show, lots. Before 4K videos appear on the TV set, there’s lots of technology being used to get it there.

The DVB industry consortium together with Eutelsat and Kabel Deutschland will provide three demonstrations of 4k being delivered via DVB-S2 and DVB-C2.

Demo one has an HEVC encoded 4K signal being transmitted from Eutelsat’s uplink station in Paris using DVB-S2. The signal is demodulated at the receiving end and then decoded. The frame rate of the source material is 50 frames per second so it should provide excellent video quality even for fast action sports.

The second demo is DVB-C2 delivered 4k videos from Sky Deutschland. The 4k content will be delivered via the Eutelsat 10A satellite link, then decoded on a Broadcom-equipped decoder and then shown on an LG 4K TV set.

The third demo is 4k content encoded with traditional H.264 and transmitted via DVB-S2 by Eutelsat from Paris. It is fed directly to a Samsung 4K set that has a built-in S2 receiver.

DVB (Digital Video Broadcasting) members include over 200 broadcasters, manufacturers, network operators, software developers, regulators and others. Its goal is open interoperable technical standards for the global delivery of digital media and broadcast services.

Billions of dollars are being poured into making 4K happen. Let’s hope folks like it— well at the initial prices for 4K sets, love it.

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Xiaomi Launches $490 47-inch Smart TV

The main reason that makers of premium TV sets such as Samsung, LG and Sony need 4K to succeed is that low-cost Chinese set makers have entered the HD market with sets at what would have been thought a few years back as impossibly low retail prices.

China-based Xiaomi is the latest to launch a low-priced 1080p HD smart TV. Its new 47-inch TV will sell for $490 in China when it becomes available in October. It runs the Android operating system.

Xiaomi is no slouch. It expects to sell about 15 million smartphones this year. Its smartphones outsell Apple in China and it already has a smartphone deal with China Mobile, something on which Apple is still working. Xiaomi currently sells smartphones in China, including Hong Kong, and Taiwan. The company has said it’s considering entering five other countries this year.

Simultaneously with the smart TV launch, it announced a new smartphone that the company said would be the world’s fastest.

Last week Xiaomi hired the former Google VP for Android product management Hugo Barra to head up the company’s international expansion. Barra said at the launch, “I believe it’s time for the entire world to know about Xiaomi.”

You have to wonder how Microsoft’s newly-acquired but faltering Nokia handset division will fare against such Chinese outfits as Xiaomi, which seems capable of low-cost manufacturing and development of technologically advanced CE gear.

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Viacom Knows Its Audience Is Online

-Looks Outside Pay TV For Audience

-Comedy Central Snubs Cable and Distributes ‘Roast’ Digitally

Viacom has a problem with pay TV. When news arose that Viacom was working with Sony for an OTT programming deal, most media reports focused on trying to divine from the tea leaves what Sony was planning, but there was another, equally important question to be asked: What is Viacom doing?

The answer is following its audience. The company owns pay TV channels such as MTV, Comedy Central and Nickelodeon, channels geared toward the demographics that seem to be mostly online these days: children, young adults and 18-34 males. The problem is that those demographics seem to be the one least pay TV-focused, and Viacom recognizes a need to follow its audience online.

This week, we’ve witnessed another subversive and prudent move on Viacom’s part: Comedy Central channel live streamed its popular show, “Comedy Central Roast” online in an attempt to reach more of its core male, twenty-something demographic.

This week’s special, which featured the roast of James Franco, was made available to stream via Comedy Central’s Website,, the CC app for smartphones and tablets, and the Xbox 360 app, CC: Stand-up.

The CC: Stand-up app is normally available only to pay TV subscribers as a Comedy Central TV Everywhere app, but Comedy Central unlocked the app for all viewers in order to live stream the Roast special.

Comedy Central thumbed its nose at the programming schedule, too. The live stream became available across the country at the time of the East Coast broadcast, giving West Coast viewers an option to stream the show three hours before its local pay TV broadcast.

You bet we’ll see more and more instances of Viacom wandering outside of the pay TV walls with its content, and making more and more content available via OTT services and platforms.

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Target Will Have to Work to Make ‘Target Ticket’ A Success

-Will Join Growing Pool of OTT Services, from iTunes, Amazon Instant, Redbox Instant and Others

-Will Target Succeed Where Walmart, Best Buy Have Failed?

Target has announced it will “soon” be launching publicly its transactional VoD OTT offering, called Target Ticket. Target claims 15,000 titles of new releases of movies and TV shows along with older titles, all UltraViolet-enabled. What remains to be seen is how Target will succeed where Walmart’s OTT offering, Vudu, and Best Buy’s OTT service Cinema Now, have both faltered.

Target first announced ‘Ticket’ back in May, saying it was testing the service among Target employees. Since then, Target has released beta tests for iOS and Android apps. According to reports, Target Ticket offers digital rentals and purchases for prices in line with its competition: new movies running around $14.99, and rentals being offered between $3.99 and $4.99 – we assume those are high def prices.

Despite being large retailers of DVDs and Blu-ray discs, neither Walmart nor Best Buy have been able to capitalize on that existing customer relationship in making the transition to digital downloads, not yet at least. Both CinemaNow and Vudu are woefully under-marketed, despite the ubiquity of their respective parent big box retailers. Somehow even newcomer Redbox Instant has gained more traction among consumers than either Vudu or CinemaNow.

The OTT pool is teeming with services at present, most of which look more or less the same, so it will be important for Target to market Target Ticket effectively to its existing customer base.

Verizon’s Redbox Instant has done well by tying the existing DVD business to the fledgling OTT service, by offering DVD and Blu-ray rentals under its new OTT subscription service. Target should probably tie sales at the register to free or discounted OTT rentals or downloads, to get people who are still buying DVDs to start using the service. There’s evidence Target will do just this, as TechCrunch has reported REDcard holders receive a 5% discount on rentals and purchases.

Fingers crossed, Target markets UltraViolet effectively as well. UV is really one of the best consumer-oriented services that consumers don’t use.

Transactional VoD OTT services are all the rage these days. Target will be competing with iTunes, Amazon Instant Video, Redbox Instant, Vudu, CinemaNow, and M-Go.

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‘The Horror Show’ Is the Newest Niche OTT Service in Town

TheHorrorShow.TV (THS) is a new OTT service available in the UK that offers niche horror films for rental and purchase. The service offers a library of around 50 curated titles of classic and indie horror films for the diehard horror fans. The service launched in June.

THS’ CEO and co-founder, David Hughes, told The Online Reporter he expects to expand availability of the site to new markets. “Naturally, we intend to roll the service out to key international territories in the longer term,” he said.

Content offerings on the site run the gambit of popular hits such as “The Human Centipede 1&2” to more obscure titles, such as the Spanish classic “Who Can Kill A Child?”

“What we’re most excited about are our exclusives,” Hughes said. Exclusive title offerings include a Swedish chiller “Marianne,” the British ghost story “The Casebook of Eddie Brewer,” and the Irish cult cannibal movie “Insatiable.”

“We’ve just signed the first of our favorites from the FrightFest horror festival,” Hughes said, including “Daylight, which for our money is the best found footage film since ‘The Blair Witch Project.’”

Other titles include “Sawney: Flesh of Man,” based on the true story of Scotland’s cannibal clan and Sawney Bean; “One Last Look,” which according to one review put South Africa on the horror movie map; and “May I Kill U?” from award winning writer and director Stuart Urban.

“We’ll continue to build up our back catalogue as we go forward, but we’re always looking for exclusive deals on little-seen films,” Hughes said.

The titles go for £3.49 to rent and £9.99 for purchase. THS is also offering a bundle of 10 short films for £0.99, each less than 30 minutes long.

Hughes said this bundle, called the Short Stack, is the result of a call for entries for short films. THS chose the top ten films out of over 400 entrants. The Short Stack is the site’s best selling offer and was recently nominated for VoD Campaign of the Year at Screen International’s Screen Award. Hughes said the company is busy compiling another Short Stack volume offering, to be released in time for Halloween.

The service is available through browsers Mozilla Firefox, Google Chrome and Apple’s Safari exclusively, and is available on PCs, and is optimized for mobile and tablet streaming. THS hasn’t released an app yet, and currently isn’t available on any net-top boxes.

“The service works perfectly on smartphones, laptops, tablets, so there’s no reason to have a separate app for tablets and mobiles,” Hughes said.

Still, the company is working on a gateway app for smart TVs that Hughes said will put TheHorrorShow.TV on over 80 smart TV models. “So in a couple of months all of our titles will be available on almost any TV platform,” he said.

The browser-based streaming player is wittily named the “Scream Room,” and features a projection window.

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Hulu Pulls a Netflix, Offers Past Seasons Ahead of Premiere

Hulu is offering five previous seasons of CBS’ drama “The Good Wife” ahead of the premier of its season six, which is set for the end of September. The maneuver, usually referred to as the Netflix Effect, will help to drive tune-in for its next season, as more and more new eyeballs are able to watch the show from the very beginning, move through the past seasons rapidly, become diehard fans and perhaps even finish in time to watch the new season. The show is currently nominated for an “outstanding casting in a drama” Emmy, alongside “Game of Thrones,” “House of Cards,” “Downton Abbey” and “Homeland.”

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Rakuten Buys Another Video Site, Viki

Japan-based giant online retailer Rakuten has made another video acquisition. Rakuten spent $200 million for the premium OTT service, called Viki, last week, the latest in a slew of digital media-centric acquisitions.

Viki is a global OTT service, offering content from 40 partners in 160 languages, with crowd-sourced subtitles. Viki, which initially launched in the US but is now based in Singapore, offers content from NBCUniversal, BBC, SBS, KBS, and TV Tokyo, totaling 14,000 hours. Since its launch in 2010, Viki has served over 2 billion video streams worldwide.

Watch this promotional video:

Rakuten’s CEO Hiroshi Mikitani told AllThingsD Rakuten has “been looking into finding a global solution for video.” The company recently acquired Spain-based streaming service, Wuaki.TV, and has since launched Wuaki as a hybrid subscription and transactional OTT service in the UK.

Viki has a global footprint, and 22 million users, to add to Rakuten’s global OTT network.

“Our vision is very well aligned with Rakuten’s focus on building a borderless digital ecosystem,” said Viki CEO and co-founder Razmig Hovaghimian. “We’ve built a truly global TV platform, with and for the fans, allowing content owners to reach the world in any language.”

Rakuten has made a number of recent investments in digital media. Back in 2011, it purchased Canada-based tablet maker Kobo; and it invested $100 million in Pinterest last year.

We’re assuming Rakuten will want to put its OTT content on those tablets.

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Vimeo and Toronto International Film Fest Team Up for Digital Distribution

Online video site Vimeo has offered the 146 films that were showcased at the Toronto International Film Festival (TIFF) $10,000 each in exchange for exclusive digital streaming rights. The deal would give Vimeo exclusive digital rights for either 30 days or until Vimeo recouped the $10,000 with revenue. After the 30-day window, filmmakers will be able to pursue other methods of distribution, and will keep 90% of revenue, per Vimeo usual 90/10 revenue share in favor of the content creators.

Vimeo has built something of a reputation for itself as an indie-flick platform. Vimeo’s On Demand service, which launched earlier this year at SXSW, enables content owners to set the price of their films on a pay-per-view basis, choose whether to offer the film for stream or download, and even the content’s availability across geographies. Vimeo On Demand offers around 2,000 titles of independent films.

Vimeo On Demand is available on iOS, Android and Windows devices, PCs, Samsung, Panasonic and Philips smart TVs, and net top boxes from Roku, Apple TV, Xbox 360, and Google TV.

The benefit for independent filmmakers is that festival works can be released to a worldwide audience immediately after the festival, as opposed to waiting months to screen the film in a theatrical release. Vimeo says it perceives its On Demand service as a complement to a theatrical release, not an alternative.

Vimeo hasn’t said how many, if any, of the TIFF world premieres have taken it up on its offer.

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The Video Search Engine Blinkx Pivots Toward Curation

-Offers Personalized Playlists of Online Video

-Just Released Original Series

-Acquired Ad Network Grab Media, Too

UK-based Blinkx has shifted gears amid an emerging online video marketplace, focusing more on content distribution and advertising, and curation.

Blinkx began as an Internet video search engine, using a patented technology called Concept Recognition Engine (CORE) that is able to analyze speech, text and imagery in a video to more accurately understand the content. The technology helps to make search more relevant to viewers, and thereby create a uniquely effective environment for advertisers looking to reach targeted audiences.

Blinkx’s technology powers a number of online sites, including AOL and Ask, and has partnerships with Roku, Samsung and Sony. is something like an Internet video guide. It has amassed a huge network of 900 content sources that users can search across for videos. It groups video into channels that span news and politics, music, celebrities, food, sports, travel and health and fitness. These channels are curated playlists of video from its content sources, sorted with newest and biggest stories up top. It’s sort of like a snapshot of online video, giving users a cross-section of trending and news-making videos across genres, at any given moment.

“Eight years ago, you would see the exact opposite, just a search box,” Blinkx founder and chief strategy officer Suranga Chandratillake, told The Online Reporter. “Over the years what we’ve realized is that search is just one half of the equation. The other half of the equation is discovery. That has become an increasingly important part of what we are.”

Viewers Find Stuff to Watch on Facebook

Last month, Blinkx released research, entitled “Nation of Sharers,” that found 40% of people aged 18-34 prefer to use their social networks over search engines when looking for content online, and conversely, 85% of 18-34 year olds regularly share videos online after watching through their social feeds.

“The nature of how we all find content online has evolved,” said Chandratillake. “Search has dominated the way we find content for most of the last ten years. What we’ve seen in the last four or five years is that Facebook and Twitter have become really mainstream, and people use them as a key indicator or what they are going to watch.”

Facebook and Twitter have become default avenues of content discovery, both directly and indirectly. Chandratillake said friends may share or post videos directly onto their Facebook feeds, for example, or a viewer may notice friends talking about a specific TV show or movie, and then seek it out on their own. “This is something that we’ve noticed a while go,” Chandratillake said. “Blinkx has always supported various social features on the site, and we saw an uptick in that activity.”

Blinkx redesigned its entire site two years ago to reflect this emerging consumer behavior and further facilitate this type of discovery.

Users can now sign in to the site with their Facebook and Twitter accounts, and can even link their YouTube accounts to the site. “That’s not really for pushing, it’s more for pulling in, it’s for being able to read in your feed and create for you a stream of video,” Chandratillake said.

Users are able to set up favorite lists of channels and content sources to further personalize the experience. Blinkx also offers curated lists of videos, grouped into channels, that are tailored to the viewer’s location, community and perceived interests. For example, if a viewer searches for “surf videos,” Blinkx will recognize the viewer is located in Southern California, and that his or her friends have talked about or shared videos of beaches in that area. The site will then present results about those nearby beaches based on this data.

The site also has a search bar that searches its huge database of videos.

Blinkx Offers Original Editorial Content, Too

Much in the style of Yahoo or AOL, the company has added four new channels to its line-up, filled with original content and syndicated videos.

“We wanted to create videos that would provide a new method of discovery as well as develop an editorial voice around the content that we have,” Trent Wheeler, SVP of product for Blinkx, told The Online Reporter. “We’ve developed content around certain themes or ideas that speak to specific audiences, and we use that as a way to roll into another three to five videos on that topic.”

The four new channels are:

-Ella TV: focuses on the 18-34 year old female demo, with videos offering beauty tips, red carpet rundowns and fashion advice.

-MomIQ TV: parenting and “mother” topics.

-Giant Realm TV: aiming at the 18-34 male demo, this channel offers videos on, gaming, gadgets and entertainment.

-Blinkx TV: a playlist of viral and impressive online videos, whether stunts, pranks, or cats.

Each week, viewers can log on to the site and new content, both original and syndicated, in targeted channel offerings. “It’s an initial effort for us in original video, and we will certainly be doing more in this area,” Wheeler said. “It’s a good way for us to experiment and to see how our audiences are behaving with this new form of video discovery.”

It’s also a great way to connect advertisers to key targeted demographics, like sports fans, moms and male gamers, which puts into perspective Blinkx’s recent acquisition.

Expands Advertising Network with Grab Media Acquisition

Blinkx made headlines last month when it acquired Grab Media, an online video syndication and ad network, amid rumors that Yahoo was eyeing the company.

Blinkx will now be able to further expand its online video advertising network. Grab Media claims it has an audience of around 35 million. Blinkx CEO S Brian Mukharjee said the transaction was “modest” and said Grab Media will add “incremental audience” and augment relations with advertisers.

Mukharjee said the acquisition will provide Blinkx “with an established platform to distribute and monetize these interactions across desktops, tablets, smartphones and connected TVs.”

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Connecting the Dots

Broadband and home networking: Making possible OTT services, apps and multi-screen viewing.

OTT services, apps and multi-screen viewing: Creating demand for broadband and home networking.

Read about both each week in The Online Reporter.

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Netflix Streams Choice Comedy Specials

-Which Once Would Have Aired on Comedy Central, HBO

Netflix continues to show off just how much of a pay TV channel it can be, and is launching a new round of exclusive comedy specials and documentaries. Netflix has built a pool of comedians that are releasing new stand up specials exclusively through Netflix. A quick scan of the fall line-up reveals a mash-up of up and coming young comics, hallmarks of comedy, and veteran stand-up comedians, a smattering of talent that once one could find on pay TV channels such as Comedy Central, HBO and Showtime.

Netflix will get first dibs on a new comedy special by Aziz Ansari, the largest comedy special to land on Netflix exclusively yet. Ansari, known for his stand-up routines as well as for his role in the comedy “Parks and Recreation,” released his first feature length comedy special on Comedy Central in 2010.

Ansari’s latest special, called “Buried Alive,” follows his recent tour, and will debut on Netflix November 1. It’s Ansari’s third special so far. In 2012, Ansari released his second special digitally, which he sold from his Website for $5 as a digital download. In an interview with the New York Times, Ansari described Netflix as a means to expand his audience more intelligently. “[Netflix] seems like it’s the closest delivery service of media we have that actually matches up to our preferences and expectations,” he said.

Netflix will stream two new specials from comedian Russell Peters October 14, including a 70-minute stand-up special called “Notorious,” and a four-part documentary series called “Russell Peters vs. The World,” that follows Peters on his world tour. Peters’ debuted on Comedy Central with “Outsourced,” which aired in 2006.

Netflix has two other comedy specials in the works; one with veteran comedian Marc Maron, who once hosted Comedy Central’s “Short Attention Span Theater”; and one with Kathleen Madigan, who has previously released specials on both HBO and Comedy Central. Both Madigan and Maron are well known comedians.

Madigan’s special, called “Madigan Again,” will appear on Netflix September 11.

Netflix has already released a number of exclusive specials from comedians, but those releases were without much hype:

-John Hodgman, known for his role as correspondent to Comedy Central’s “The Jon Stewart Show,” released the hour-long special “Ragnarok” on Netflix exclusively back in June.

-Dan Stanhope, former co-host of “The Man Show,” and guest star on Louis CK’s HBO show, “Louie” released his special, named “Beer Hall Putsch,” exclusively on Netflix in August. The Netflix release is his 13th release to date.

-Mike Birbiglia released an exclusive special entitled “My Girlfriend’s Boyfriend.” Birbiglia has starred in three previous specials that aired on Comedy Central.

-Rob Schneider released an exclusive special on Netflix in August called “Soy Sauce and the Holocaust.” Schneider is best known for his career start on “Saturday Night Live.”

In 2012, Netflix released exclusive stand-up specials from comedy veterans Brian Posehn, Craig Ferguson, Todd Glass and up and coming comedian Moshe Kasher.

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Peel Has 25 Million Users

-Partnerships with HTC, Samsung Pay Off

The EPG app Peel has had a great year, with growth ballooning to 25 million users, and is on track to double that by the end of the year. Peel’s co-founder and CPO Bala Krishnan said the company has “forever changed the TV remote control experience.”

Peel’s app is part recommendation service, part EPG, and for some devices, can even act as a remote control for the TV set. It is available as a free app for Android and iOS devices.

Users can select their TV service, whether pay TV or OTA, give the app some information about tastes and preferences, Peel, in turn, will tell the viewers what’s on TV, and suggest shows they may want to watch. Users can keep track of their favorite shows or channels, and can see what’s currently airing. Users can also integrate social network accounts for friends’ favorite shows, and receive personalized recommendations. Peel works across live TV, DVR’d content and Netflix.

Peel can control the TV set too, with select devices. Peel has partnered with smart TV makers Panasonic, LG, Sony and Philips. Peel has also partnered with Samsung and HTC, two partnerships that have contributed greatly to Peel’s surge in users. Samsung and HTC are selling phones with Peel pre-loaded, and have included IR blasters in new smartphones, which enable users to use those phones to control almost any TV set. Samsung has also integrated this technology into its Galaxy line of tablets.

Peel said 1 in 3 smartphones sold worldwide are now Peel-enabled. Over half of Android phones sold in the US came with Peel pre-loaded on them, as did 1 in 3 Android tablets sold worldwide.

The company’s new worldwide reach is paying off. Peel released a group of metrics touting its new growth:

-2 new users each second

-1.1 million daily active users

-375 million tune-ins per month

-1.25 billion TV recommendations per month

“We are now on track to power 20 percent of the world’s TV tune-ins by late 2013,” Krishan said.

See an infographic of the data here:

Peel earns revenue from advertisements on movie trailers and previews, and also can use the data it has on viewers to serve up specific paid recommendations for specific viewers and demos. The company expects to be profitable by November.

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Report: Pay TV Industry Will Have Undergone Massive Changes by 2018

By the time we reach 2018 the pay TV landscape will be so distorted that homes that pay for TV will become a meaningless statistic.

We have said in our report, “The Faultline Revisited,” that disruptive events will shape this industry dramatically, including a shift to mass video viewing on tablets and smartphones, the near collapse of the LCD TV market as screens become wall sized, while second TVs in the home cease to be purchased at all. There will be a huge reduction in free-to-air broadcast TV, as it shifts to the Internet; cellular offload and LTE Broadcast will solve the problems of video reaching cellular devices; 75% of in-home video viewing will also shift to the tablet.


LG to Launch First 1080p HD Tablet

Displays on mobile devices are being improved for watching high-def videos, which certainly makes a strong case for “mini” tablets to be used as mobile (and in-home) viewing devices.

LG says its new 8.3-inch G Pad tablet is the first to offer a full HD display — 1,920-by-1,200 WUXGA (Widescreen Ultra Extended Graphics Array). It displays 273 pixels per inch (PPI), slightly more than needed to show full 1080p videos. LG said the higher resolution also makes text sharper and easier to read. It did not say what negative impact on battery usage the higher resolution screen would have.

The G Pad 8.3 has all the latest features. LG said its Qualcomm Snapdragon 600 processor with a 1.7GHz quad-core CPU enhances the viewing experience. The unit has a 5-megapixel rear camera and 1.3-megapixel front camera, 2GB of RAM, 16GB of storage space and runs Google’s Android Jelly Bean 4.2.2 OS. Other features include:

– Slide Aside feature enables multitasking by sliding open apps to the side using a three-finger swipe.

– QSlide controls up to three different apps in one window with no interruption.

– KnockOn turns the G Pad on and off by tapping the display twice.

– QPair app allows calls and messages received on a smartphone to appear on the G Pad and for users to respond. It also allows the G Pad to connect to other manufacturers’ smartphones and tablets, preferably Android ones. Notes created on the G Pad can be saved into users’ smartphones and shared from either device.

The unit weighs 338g and is 8.3mm thick.

The G Pad 8.3 tablet will be officially launched next week at the IFA trade show in Berlin and become available in major markets such as in North America, Europe and Asia starting in the fourth quarter of 2013. No prices were announced.

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Yawn! Microsoft Makes $100 Pro Price Cuts Permanent

Microsoft has permanently reduced the price of its Surface Pro tablet by $100. The 64GB model is still a pricey $800 and the 128GB model is also a pricey $900. Microsoft explained the price reduction as “people who buy Surface love Surface.” It had previously reduced the Surface RT prices by $150.

The question is whether anyone really cares about the Surface price cuts, especially Microsoft’s top executives.

We learned in Pricing 101 that price cuts that nibble around the edges ($100 on a near $1,000 tablet) don’t accomplish much and that price cuts should be accompanied by a reason — end of year, made too many, closing the store, moving, etc. If you don’t explain, shoppers will wonder, “Are they cutting the price because it is not selling because it’s not very good or perhaps they are about to introduce a new model?” It’s going to take more than $100 to persuade someone not to buy an iPad.

Many price cuts are made more made more effective by giving something else of a similar value away for free.

Why doesn’t Microsoft do something innovative with its Surface pricing, something that will bring in customers that might ultimately subscribe to its OTT services — say a year’s subscription to its Xbox music service that normally sells for $99 for 12 months or download 100 songs for free? Even more attractive, although it will cost Microsoft less, might be a free annual subscription to Xbox Live that normally goes for $60.

As to the Pro pricing, if you want to attract consumers, give them the same music options. For the corporates, offer them every tenth Pro for free or bundle in an Office suite.

C’mon Microsoft! You have already written off almost a billion dollars on the Surface tablets and you have billions sitting in the back drawing abysmally low interest rates. Do something that will get noticed and produce sales. If the Surface is that good, the word will spread. If it’s not that good, you better cut the price even more and get them all out of your inventory.

Why is it we get this sinking feeling that during the current Microsoft CEO gap that no one is minding the store? Who would allow such a dull and ineffective price cut? It’s like they are just going through the motions.

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Deutsche Telekom in Massive Wireless/Wireline Overhaul

Deutsche Telekom (DT), which own T-Mobile, is, rightly, bragging about what it’s doing to upgrade its wireline and wireless networks:

– LTE technology to provide wireless speeds up to 150 Mbps, although we understand that does not mean each user has 150 Mbps at all times because LTE is a shared medium.

– VDSL2 with vectoring plus expansion of its fiber footprint will provide speeds up to 100 Mbps per home, a speed that will always be available to each of the 24 million homes that are connected by the end of 2016.

– A pilot project that will make Hamburg a “hotspot city” with Wi-Fi available in all commercial and tourist areas.

To accomplish its goals, DT said it would be operating out of 52,000 construction sites in Germany during 2014. It will install 17,600 neighborhood cabinets lay approximately 10,000 kilometers (6,000 miles) of fiber optic cable.

“We’re already building the network of the future for Germany today! We’re investing in Germany, for Germany! And not just in the urban centers,” said René Obermann, chairman of the board of management of DT.

Obermann said, “No other telecommunications company invests as much as Deutsche Telekom” and cited the more than €23 billion it will invest in its German network between 2010 and 2015.

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Hillcrest Labs Nabs Hisense for Its Motion-Sensing Technology

China-based Hisense, the world’s fifth largest TV maker, has selected Hillcrest Labs’ Freespace MotionEngine software to add point-and-click gestures to Hisense smart TVs and STBs. The Freespace technology allows users to “navigate their TV user interface just like they do on computers, smartphones, and tablets,” Hillcrest said.

Hillcrest already licenses its motion-sensing technology to the likes of LG, TCL and net-top box maker Roku.

Initially, Hillcrest tried to sell its technology to pay TV services (see TOR487 April 8, 2006) but after that attack faltered, it went after set makers to resounding success. Now the pay TV industry is again on Hillcrest’s radar as it has recently secured a license for Comcast’s Reference Design Kit. If and when implemented that would allow Hillcrest to embed its motion-sensing technology into set-top boxes aimed at the cable TV industry.

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TiVo Couldn’t Care Less about In-Home DVRs in the Long Run

– Teams with Entone for Cloud-based DVR

Entone is using TiVo’s user interface (but not its DVR) and a cloud-based service platform in Entone’s Kamai-brand IP media players to help telcos provide cloud-based apps and services, including cloud-based DVRs, according to Entone CEO Steve McKay in an interview with Multichannel News. McKay said the product would be available for deployment next year.

To the best of our knowledge, this is TiVo’s first venture into cloud-based DVR services. TiVo CEO Tom Rogers has said TiVo does not care whether DVR storage is based in the cloud or in the home, but added that local storage still has the edge.

Rogers said, “We don’t really have a proprietary stake in where the storage resides. Our whole business is about providing the user interface and the user experience and the applications and the overall value that comes from a framing of the TV content, not where the storage resides…a lot of the TiVo service is already in the cloud,” Rogers said, in an interview.

Entone says that globally it has 150 pay TV companies using its gear.

Cisco, Samsung and Pace have licensed TiVo’s Hardware Porting Kit but they use it for in-home DVR storage, not cloud-based.

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The Wearable Revolution Will Come, But the Smart Watch Is Not the Catalyst

The fall cat-walk season for mobile devices has started in earnest, with the IFA electronics show – the closest Europe comes to January’s CES extravaganza – kicking off in Berlin, and Apple’s launch set for Tuesday. It must be a sign of the desperation of the smartphone industry, as margins fall and designs commoditize, that the bid to surprise and delight jaded consumers and analysts this year revolves around the “smart watch.” Yes, the wearable computing trend has huge future potential to change behavior; create new device and software markets; and deliver growth for those that respond innovatively. But all that will take a decade to evolve – and the smart watch is not, except in the most simplistic sense, the herald of the wearable revolution.

There are actual interesting mobile devices out there at IFA – Sony’s upgraded, waterproof Xperia; Samsung’s enlarged Galaxy Note 3; and many others to come, all sporting the latest technologies in display, processing and apps. But the watches have grabbed the headlines, perhaps because they may herald the next big shift in how users communicate and compute – having moved from static to mobile activity, and from local content to the web, now they will embrace wearable gadgets, making devices that sit separately from the body into an old hat.

That trend is genuinely interesting, but – outside of specialized applications such as medical monitoring – it will take a long time for it to be more than a hobbyist activity focused on a few experimental items like glasses. The day when we wear our computers as automatically as we now put a handset in our pockets is far away, as is the massive uptick in revenues that will bring for the right component and gadget makers.

The Smart Watch Is not a Revolution

And even then, the watch is not the herald of the wearable revolution. Apart from being on the wrist rather than in a bag or jacket, it is nothing new. Microsoft, LG and others have been trying, and failing, to sell smart watches for a decade. The versions that have attracted some real enthusiasm have been realistic about their role – the crowdsourced Pebble or the Nike fitness bands, for instance. They are not phones or computers, instead they do what wrist watches have always done – provide alerts about those rare items that a user might need on a very regular basis (the time of day, for instance), in a handy and easily visible location (the wrist). Adding calendar or message alerts to the watch’s traditional functions is handy, allowing you to check these items as surreptitiously as the time, when in a meeting.

But the smart watch is not a wearable computer, nor will it revolutionize either users’ habits or the fortunes of device makers. Samsung is testing the waters with its Galaxy Gear – it can afford to experiment with an unproven form factor in the interests of claiming early mover advantage for its expanding Galaxy brand.

Along with Sony’s SmartWatch (about to go into its second generation and positioned as a second screen for Xperia handsets), and the potential “iWatch,” the Gear is sure to have a flurry of sales to gadget lovers looking for the next novelty, or desperate Christmas present hunters. That flurry will stoke even more overblown predictions that the watch is the “next big thing,” but the devices will not expand easily beyond the hobbyists, and to gain share, they will have to be extremely cheap – far cheaper than the $299 Samsung is charging for Gear – so will hardly transform the businesses of the OEMs.

For Samsung, accessories make perfect sense. They extend the powerful Galaxy brand and, since the Gear requires a Galaxy smartphone to be connected, they may help a customer opt for a Samsung Android handset over an alternative during the coming holiday season. But it’s no more revolutionary than that.

The Gear sports a 1.63-inch OLED screen with trademark Samsung brightness, plus a 1.9-megapixel camera, which can take photos if the user swipes the display. A microphone and speaker are embedded in the strap, so the watch can be used to make calls – differentiating it from the fitness-oriented wrist computers – though it needs the handset to connect to the cellular network. It also supports Samsung’s voice activated technology, similar to Apple Siri; and incorporates a fitness tracker, 4Gbytes of internal memory and 512Mbytes of RAM. It comes in six colors and will be launched with typical Samsung scale – in 140 countries, starting next month in the US and Japan.

Samsung is building a base of applications that expand the functionality of the watch, which has an Android OS, and already has about 70 apps.

Shin Jong Kyun, head of the mobile business, unveiled the gadget in a flashy launch in Berlin, sparking optimistic forecasts – Strategy Analytics thinks the Korean giant will shift half a million Gears this year, on the basis that consumers will see the devices as highly personal and a cool product they can easily show off to friends. That, of course, will require something Samsung certainly has – a huge marketing budget.

Qualcomm Unveils Toq

While many expect Apple to debut an iWatch along with the new iPhone next week – and anticipate that this model will be the real catalyst for this segment – another smart watch has appeared from a less likely source, Qualcomm. The chip giant has unveiled Toq, which is not designed to propel the company into the device mass market, but to showcase some of its favorite internal developments, such as the AllJoyn media framework and Mirasol display.

Mirasol, an ultra-low power MEMS-based display which harnesses ambient light, was officially cancelled last year but then got a new lease of life when Qualcomm acquired MEMS screen innovator Pixtronix, and announced an alliance with Sharp, which could expand manufacturing capability for the products. One of the Mirasol’s challenges was always to scale up to screen sizes over four inches or so – but of course, that makes it perfectly positioned for the supposed smartwatch explosion.

Unveiled at this week’s Qualcomm Uplinq conference, Toq (pronounced “talk”) showcases Mirasol, whose low power consumption makes an always-on display practicable, and the device also sports Qualcomm’s WiPower LE wireless charging technology and stereo Bluetooth audio.

The limited edition Android 4.0.3 product, which like its more commercial peers is positioned as a second screen for a handset, also shows off the AllJoyn framework, which will enable developers to create apps for the watch, and add wrist-based notifications to their mobile software (AllJoyn features a Notification Services Framework). Many of Qualcomm’s activities in new form factors and wearable devices are focused on sectors like healthcare rather than consumer gadgetry and it has R&D projects in more futuristic aspects of wearables, including body area networks with sensors that are constantly attached or even embedded, for purposes such as medical monitoring. Toq will be integrated soon with the 2Net platform, recently announced by the Qualcomm Life division, which focuses on the health management area.

As a showcase for Qualcomm’s Bluetooth technology, Toq will also come in a “premium audio edition” featuring “the first truly wireless stereo headphones,” with no wires needed either for listening or recharging.

“Toq’s always-on, always-connected, always-visible wearable technology gives you a ‘digital sixth sense,’ telling you what you need to know, when you need to know it, with just a glance at your wrist or a whisper in your ear. Toq is a showcase for the benefits of the Mirasol display, WiPower LE and stereo Bluetooth technologies and highlights the experience that the wearable category can provide,” said CEO Paul Jacobs. “Toq not only represents a long history of technological innovation for Qualcomm, but it also demonstrates our commitment to delivering the breakthrough technologies that redefine the ways we interact with each other and the world around us.”

Other Wearable Opportunities for Component Makers

Other component providers are eyeing the wearable opportunity, from glasses to smart watches to future “connected clothing” in the hope of a boom for certain product groups.

Connectivity will need to work at ultra-low power levels, of course. Broadcom recently introduced its WICED (Wireless Internet Connectivity for Embedded Devices) Direct platform, which users the Wi-Fi Direct standard. This allows for peer-to-peer connections without an access point and is suited to low power wearable devices such as fitness monitors and watches, allowing them to communicate via a handset. Broadcom has already showcased some prototype products for the Internet of things, such as a Bluetooth cooking thermometer and a button-sized sensor for incorporation in a garment.

Sensor vendors will be another category looking to cash in on wearables. Sony is considering applying its existing image sensors to these products as a hedge against slowdown in smartphone demand for these components.

The chips, whose main targets are handsets and digital cameras, many in Sony’s own devices business, could be broadened to wearable computers, medical equipment and self-driving cars, said Yasuhiro Ueda, SVP for the Japanese firm’s image sensor unit, talking to Bloomberg.

Sony has almost one-third of the $7.6bn market for the low power CMOS technology and supplies Apple and Samsung as well as its own divisions. “We have a high sense of crisis after seeing the high end smartphone market start to saturate this year,” Ueda said. “Our plan is to draw a growth strategy in an area where we see shipment potential of 10 billion units a year.” He added: “Image sensors will be crucial devices for wearable computers” such as smart watches.

Of course, as we have specialized graphics processing units (GPUs) and image processing units (IPUs), and so on, so there will be dedicated wearable processing units (WPUs). Indian start-up Ineda Systems – whose board is chaired by former Motorola Mobility CEO and Qualcomm COO Sanjay Jha – has developed such a chip, based on PowerVR graphics cores and MIPS CPU cores. This low power SoC will be targeted at wearable applications like watches and health monitors and the firm is trying to build an ecosystem by publishing a range of APIs and a development framework.

As well as Jha, the board includes Cadence Design CEO Lip Bu-Tan and Krishna Yarlagadda, president of Imagination Technologies. Ineda claims to have an innovative system architecture working in FPGA prototype form, which can improve power/performance by an order of magnitude.

This article appeared in Wireless Watch.

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Amplify Launches MOOC AP Computer Science Course

Massive open online courses, MOOC for short, could enormously increase the amount of bandwidth, both wireline and wireless, that consumers use. News Corp-owned Amplify last week launched its MOOC AP (advanced placement) computer science course, which is taught by an AP Computer Science high school teacher. “If this MOOC works,” said Amplify CEO Joel Klein, “we can think of ways to expand and support it.” Amplify says it’s the first AP computer science MOOC with in-person support. Only the first week’s videos are posted so far and content is scheduled to be presented through March, with five weeks after that set aside for AP Exam prep. The course will be free for approved students during the 2013–2014 school year. See:

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Microsoft’s Asha Opportunity

“Good sense would see Microsoft building a whole new platform, optimized for emerging markets, based on Nokia’s Asha line of feature phones, and with no hint of Windows Phone in it; then merging Windows Phone entirely into Windows RT (if it survives), and leaving that OS to other OEMs to bring to market more effectively than Surface did. Perhaps a new CEO will be less obsessed with keeping Windows everywhere and will think more creatively than Steve Ballmer about how to leverage the Nokia assets. But it is too late to create a rival Apple hardware/software platform in the smartphone world, and Microsoft, even with Nokia engineering behind it, is not the company to do it.” — Caroline Gabriel in Wireless Watch

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Microsoft Will Have to Earn Every Point of Market Share

“There’s no reason consumers have to buy Microsoft’s products anymore when they can head to Apple, Google, or cloud country, or just squeeze more years out of their old PCs. Few companies buy smartphones and tablets for employees as they do for PCs, so Microsoft will have to earn every point of market share in these booming markets the hard way, by making stuff that’s way ahead of the competition. That means modeling itself to some extent after Apple, which, despite its recent stock slump, remains the finest product shop in tech.” BusinessWeek at

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Charter, Cablevision Abandon Canoe

Even in its diminished form, Canoe Ventures, owned by multiple US cable TV companies targeting interactive advertising, has no appeal for Charter and Cablevision, who have cancelled their membership, according to Faultline. In February the venture took a huge step backward when it dumped the idea of linear TV advertising, firing its CEO and laying off 120 out of 150 staff. The new CEO at the time said that he would focus on VoD advertising. This leaves just Comcast, Time Warner Cable, Cox and Bright House picking up the bills, and may lead to a complete disbanding of the effort. The idea is to offer dynamic ad insertion on any cable VoD system across about 25 million households, through a single system.

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TalkTalk Has Added 500k YouView Subscribers

Over 500,000 customers in the UK have signed up for TalkTalk’s YouView offering since its launch just under a year ago, according to Faultline. Last quarter it was 390,000 sign ups. TalkTalk has done this by bundling it in with its broadband offering and offering the £299 ($395) set top for free. Other YouView players have not released numbers but they are thought to be far lower.

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Samsung Shows Off a 98-inch 4K Set

Samsung bettered its showing of an 85-inch 4K TV set ($40,000) at CES in January by showing a 98-inch version at IFA. It also hinted it may be working on a 110-inch model but provided no details. Samsung also showed what it called the world’s first 4K sets, a 55- and a 65-inch model.

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Next Version of Android Gets a Corporate Sponsor

The next version of Google’s Android, typically named after a sweet, has a corporate sponsor, Nestle, and thus the brand name of “Android KitKat.” Lest we forget, 92% of Google’s revenue comes from advertising, which amounts to about $4 billion a month. Could selling naming rights to software become a trend? Next thing you know, Windows 8 might be called “Windows Coke” and iOS might be called “iOS Camry.”

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The Online Reporter 843 – August 30 – Sept 5, 2013

Issue 843        August 30 – September 5, 2013


  • Amazon May Be Planning Its Own Nationwide Wireless Network
  • Aereo’s Path Is Leading Pay TV Industry to Massive Upheavals
  • Microsoft’s ‘To-Do’ List for Its Digital Media Consumer Business
  • Microsoft Has Lost the Mobile Opportunity, with or without Ballmer
  • Why Are Pay TV Subscribers Being Forced to Pay for Free Local Broadcasts?
  • Out with All of the Old at Microsoft, In with the New


  • Samsung & Sony Slash Prices of 4K TVs
  • IBC to See Live Rugby Demo in 4K
  • ‘When I Saw 4K, I Suddenly Got It’



  • Kevin Spacey Describes Future of TV, and It Looks A Lot Like Netflix
  • French Cable TV Company Expanding Outside Its Footprint
  • Verizon Offers Tennis Live Streams to FiOS Subs
  • OTT Space in UK is Hot
  • The Market Is Ripe for a Combined Aereo/Roku Type Service
  • Three Tracks to Broadband Delivered Pay TV
  • VuTV Offers Internet-Delivered Pay TV Service


  • Three Hard Technology Problems Operators Face with Multi-Screen


  • Pandora Lifts Streaming Caps Ahead of Apple’s Entrance
  • Apple Readies iTunes Radio Set to Launch in September



  • US Telcos Accept $386m in Taxpayer Subsidies
  • AT&T Offers 45 Mbps in 40 More Markets
  • Netflix Blamed for Increase in Broadband Rates


  • Broadcom Shrinks Wi-Fi Platform


  • Three More Pay TV Apps on Apple TV
  • Microsoft Adds Time Warner Cable to Xbox
  • Google Blocks Chromecast from Playing Locally Stored Content
  • TiVo’s Lawsuit Settlements Put Black Ink on the Bottom Line
  • Forbes Also Notices Apple TV’s Interface Is Aging


  • Cox Joins Cablecos’ CableWiFi Network


  • 30 Largest Owners of Local TV Stations
  • Thinkbox Says Linear TV Still Rules in UK
  • 30% Still Don’t Have Broadband at Home


  • Imagine: A Pay TV Operator Giving away Antennae
  • Why the Pay TV Bill Keeps Increasing
  • Microsoft’s Problems Started Long Before Ballmer Took Over
  • TV Networks Will Adjust to New Technologies
  • Amazon Thinking About Launching Instant Video in Russia
  • Hulu Signs New Series from Lionsgate
  • Samsung’s Galaxy Tab 3 to Come in Kids Edition


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Amazon May Be Planning Its Own Nationwide Wireless Network

– Would Make It THE Major Force in OTT-Delivered Content

– Globalstar Has the Spectrum

– Apple, Google, Intel, Microsoft, Sony Would Be Jealous

The retail giant Amazon has increasingly gone its own way in content such as launching its Kindle line of tablets and eBook readers, a “free” and a purchase/rent OTT service, developing original video content and most recently buying the Washington Post newspaper. It may now be thinking about operating its very own nationwide wireless network. Think Amazon as a “pay OTT” distributor of content to wireless mobile and stationary devices. Apple, Google, Intel, Microsoft, Sony and no doubt others would also be interested in having their own nationwide distribution network.

Amazon has reportedly tested a Wi-Fi technology called Terrestrial Low Power Service (TLPS) that uses ground-based wireless spectrum provided by the satellite telephone/data provider Globalstar, according to Globalstar said deployment of TLPS could instantly increase the US’ Wi-Fi capacity by one-third. It said it is working on techniques that would allow existing Wi-Fi devices to be upgraded to TLPS by remote downloads.

Wi-Fi devices that have been upgraded to TLPS would still use telcos’ and cablecos’ wireline broadband networks to connect to the Net.

Globalstar has petitioned the FCC to let it use spectrum it has licensed to open up a currently unused Wi-Fi channel (channel 14), which it said as a managed service would cause limited interference and congestion with existing Wi-Fi.

The Wi-Fi enhancement is step one. There’s a cellular angle, too. A little noticed statement in Globalstar’s presentation to the FCC says it is submitting a “long-term proposal to offer an FDD-LTE based mobile broadband service over both its downlink and uplink spectrum.” If the FCC approves the long-term LTE proposal, Globalstar and/or a content distributor (say Amazon), could build a nationwide network that is independent of existing wireline and wireless broadband services.

Globalstar says in its FCC presentation that its disruptive technology will allow “new entrants the opportunity to build the nation’s first post-cellular network.”

Globalstar would not talk to us about the LTE aspects of its FCC presentation or about Bloomberg’s reported tests by Amazon. It would only talk about the Wi-Fi portion and how TLPS compatible devices would connect to the Net via wireline broadband.

It told The Online Reporter, “TLPS will be served in the home or enterprise by a dedicated TLPS Access Point (AP), which is connected to the wired broadband (cable or fiber). Since most consumer and enterprise users connect to their broadband via a wireless air interface (eg public Wi-Fi), the significantly increased speeds of TLPS will permit them to use a much larger percentage of their available broadband capacity. This will make their connectivity jump in speed and fall in latency overnight.

“From a user functionality perspective, we believe that TLPS will be a much more seamless experience than conventional Wi-Fi. Just like commercial networks, the device will automatically transition from one TLPS node to another and between TLPS and wide area network services (ie the user will not have to hunt for APs, plug in passwords, etc).”

Concerning LTE, Globalstar said, “The LTE reference in the FCC presentation is in regards to Globalstar’s long term plan.”

Amazon knows the importance of wireless broadband for selling eBooks. It currently has a contract with AT&T for 3G service that allows free downloads of eBooks it sells to some of its Kindle eBooks readers and for 4G LTE connectivity on one of its Kindle tablets for which owners pay.

Companies that currently distribute or want to distribute content over the Internet have looked for alternatives to existing wireline and wireless networks. They know that they are at the mercy of companies that are potential and actual competitors, the pay TV companies’ VoD services and Verizon’s Redbox by Coinstar being two examples. Most visible of them all in its for search for alternative broadband has been Google, which is building all-fiber networks in a few cities and operates a public Wi-Fi network near its headquarters.

A major technology company that wants to enter the broadband delivered pay TV market has told The Online Reporter that one of its two biggest barriers is not being able to own or operate its own broadband network. That’s because, unlike Europe, US broadband services do not have to allow third parties to access their physical networks. An LTE network that uses Globalstar’s spectrum would bypass existing broadband providers, both wireline and wireless. The other barrier, of course, is licensing lots of “must-see” content.

Assuming there is sufficient bandwidth for its LTE network, a content provider, say an Amazon, Google, Intel, Microsoft or Sony, could someday use its own wireless network to deliver content to both stationary and mobile devices. Think of an Amazon that could deliver content wirelessly over its own network to mobile and stationary devices — tablets, smartphones and net-top boxes. It would become the major player on OTT services. Google would also be interested in such a wireless service as would/should Apple, Intel, Microsoft and Sony among others.

If Amazon were to launch the service successfully, it could give it a leg up on Netflix, Hulu, Walmart’s Vudu, Apple’s iTunes and other online providers of movies, TV shows, books, magazines and content. They have to use the broadband and cellular providers’ networks to deliver content. Those services are already beginning to put the squeeze on users at both ends:

– OTT services by asking that they pay extra for guaranteed quality-of-service to ensure they can stream flicker-free svideo to their subscribers

– Consumers by starting to impose caps on the amount of data they can download each month, raising rates and charging extra for higher downloads

‘Surpasses Public Wi-Fi by 5x the Effective Distance and 4x the Effective Capacity’

Globalstar said tests of TLPS were conducted by the wireless research outfit Jarvinian Venture Fund, which used Ruckus Wireless’ Smart Wi-Fi technology and existing smartphones that had been modified. The test results exceeded expectations for distance and capacity. It said signal strengths were three to five times the range of publicly available Wi-Fi in indoor urban environments — and without interfering with existing Wi-Fi on other bands.

In its presentation to the FCC, Globalstar said its tests “confirmed that TLPS surpasses public Wi-Fi by 5x the effective distance and 4x the effective capacity, with no impact on public Wi-Fi operations in adjacent channels.”

If the FCC approves its petition, Globalstar said that it could be implemented quickly by using existing Wi-Fi devices and networks by upgrading them with over-the-air software and firmware updates.

Globalstar has asked the FCC to let it use about 80% of its spectrum for terrestrial use. It said it would offer its managed Wi-Fi service for free to 20,000 schools, libraries, hospitals, and/or other special interest organizations such as emergency organizations.

Amazon or any of the would-be OTT services alone could become a much bigger “market” as they move into becoming distributors of videos.

Amazon could use Globalstar’s Wi-Fi technology as a nationwide network that would have almost universal coverage, one with more ubiquity and reliability than standard Wi-Fi, and at lower cost than a cellular MVNO – all without having to build networks of its own, according to Wireless Watch. It said, “Embedded wireless could become even more valuable as Amazon looks to expand its range beyond mobile devices, to develop a home media hub. It is widely expected to launch a low cost, possibly free to consumers hub that would support TV, gaming and the Amazon Prime video streaming service, taking on Microsoft Xbox and the Apple and Google TV and media platforms.”

Globalstar’s Ambition

Globalstar’s ambitions are much wider than Amazon’s or any other single OTT service. It wants to increase by a third or more the US’s Wi-Fi capacity. It says that, if approved, its petition to the FCC would allow it to “immediately increase Wi-Fi capacity by more 33% on existing devices, thereby diminishing the “Wi-Fi traffic jam.”

Globalstar’s petition contained both a “near-term” proposal to permit it to offer a “Wi-Fi like” TLPS service and a “long-term” proposal to offer an FDD-LTE based mobile broadband service. Existing wireline broadband routers, smartphones, tablets, net-top boxes and other gear with Wi-Fi could be remotely upgraded to TLPS. The LTE service would allow devices to be connected anywhere to a cellular network.

(LTE comes in two flavors — TDD for time division duplexing and FDD for frequency division duplexing, two different techniques for squeezing data and phone calls into the connection.)

Globalstar’s presentation to the FCC is at:

Detractors say Globalstar’s TLPS service would disturb existing Wi-Fi and Bluetooth communications.

Globalstar’s traditional business has been in providing a satellite-connected mobile phone service, which uses a low Earth orbit satellite constellation for telephony and low-speed data communications. It says it provides its mobile satellite services to over 550,000 government, public safety, enterprise and retail customers and that over 2,300 rescues were initiated using its services since 2007 —averaging one per day.

Additionally, it holds licenses for wireless spectrum that’s not currently used for terrestrial communications. It teamed up with Jarvinian to test that spectrum for use as Wi-Fi. The tests were performed using Ruckus Wireless gear and existing smart phones that had been upgraded to operate over the new channel.

Globalstar and Jarvinian said the test results demonstrated how quickly TLPS could be deployed to expand the US’ wireless capacity.

‘Well Positioned in the Ongoing Process with The FCC’

Globalstar CEO James Monroe said during the company’s recent earnings call, “We are now well positioned in the ongoing process with the FCC as we seek terrestrial authority for our spectrum.” The FCC issued the permit to test the equipment using Globalstar’s spectrum to Jarvinian, Globalstar’s technical adviser. said the trial was conducted in Cupertino that’s near Amazon’s Lab126 research facilities where Amazon develops Kindle devices. Covington, Louisiana-based Globalstar said the service has been tested in Boston and one other location but would not say where that other location is. It also said it’s about to test at the University of New Orleans.

Cellular, Wi-Fi and wireline broadband networks have become increasingly congested by the soaring spread and use of wireless and stationary devices for viewing videos. Globalstar’s TLPS solution could quickly add enormous nationwide capacity. Whether that service can be or even should be dominated by one OTT service such as Amazon remains to be seen.

Content may still be king but broadband spectrum may be the king maker.

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Aereo’s Path Is Leading Pay TV Industry to Massive Upheavals

– Rival FilmOn Lags in Primetime TV

A potent lineup of TV channels means that if and when it wins the suits the broadcasters have brought against it, Aereo will instantly become one of the most powerful players in media distribution because a) it offers the most popular national TV channels and its “must see” TV shows, sports news and weather, b) provides many other TV channels that are aimed at niche audiences and, perhaps most importantly, c) is capable of becoming a nationwide TV service. Aereo allows viewers in markets where it operates to watch local channels on any Internet-connected device with a browser, which excludes most smart TVs except those using smart TV technology with a browser such as Google TV.

Aereo depends on the Apple TV and Roku net-top boxes to stream to TV sets but it could easily launch its own net-top box. An Aereo set-top box would allow it to offer OTT and social media apps such as Netflix, Hulu, Vudu, Facebook and Twitter. That would provide Aereo an even more attractive array of services — the best of pay TV and all the OTT services, not of course including iTunes, the most popular buy/rent OTT service, but Vudu and Amazon would gladly fill in.

Time Warner Cable’s (TWC) giving away OTA antennae in its footprint where a contract dispute with CBS has blocked it from retransmitting signals from CBS-owned stations, raises the question, “How many pay TV subscribers will cut the cord once they know they can get all the main national TV networks for free — ABC, CBS, FOX, PBS and CW — now that OTT services such as Netflix, Hulu and iTunes have become so robust in their product offerings. There’s a bonus; the national TV networks are broadcast locally in higher resolution than the pay TV operators provide.

So, will better picture quality and lower or no monthly costs lead to cord cutting? That comes down to whether the OTT services offer enough additional content to keep viewers happy or whether there are some “must see” channels that are available only on pay TV.

It also raises the question, “Why is what Aereo doing so different than what TWC is doing?” Both offer “free” antennae and both require the recipients to take a monthly subscription to their services. It’s just that Aereo keeps its antennae in a central location instead of shipping them to the home. Aereo also lets subscribers use a cloud-based DVR much like TiVo allows its OTA customers to use its in-home DVR, another idea that seems about to pass its “best by date.”

Aereo, which charges subscribers a monthly fee, offers a potent lineup of live TV. Unlike rival FilmOn, it offers the main channels of local broadcasters, which includes the national TV networks. For example, Aereo’s offerings in New York City include:

– The main channels of the major national networks: CBS’s WCBS, NBC’s WNBC, FOX’s WNYW, ABC’s WABC, CW’s WPIX and PBS’s WNET

– Syndicated channels: MOVIES!, ION, Cozi TV, MyNetworkTV, ThisTV, AntennaTV and Bounce TV

– Lifestyle and local interest: ION Life, Livewell, NYC Life and NYC Gov

– Children’s programming: PBS Kids and Qubo

– Home Shopping: HSN and HSN2

– Spanish Language: Telemundo, Azteca America, UniMás, Univision, MundoFox and Aliento Vision

– Asian languages: WMBC-TV, Christian Global Network Television, SinoVision, New Tang Dynasty Television

It also offers Bloomberg’s 24-hour coverage of financial and business news, which competes against the pay TV channels CNBC and Fox Business. Bloomberg was developed for and is mainly used as a pay TV channel.

By comparison, FilmOn’s offering in New York appear to be only each station’s secondary stations:

Station FilmOn’s Description

WABC 7 NY Get the latest New York area news, turn to 7online for breaking news

WWOR 9.3 NY no description provided

WNYW 5 NY Fox NY covers New York City breaking news New Jersey news, Connecticut news, weather, traffic and sports.

WNBC 4.2 NY no description provided

WPIX 11 NY no description provided

KIDS 13.2 NY no description provided

WCBS 2 NY Home section news, sports, weather, traffic and the best of NY

WNET 13.1 NY New York Public Media. (The .1 in 13.1 probably indicates that it is WNET’s main channel)

WNBC 4 NY Get the latest New York news, weather, traffic, entertainment and health

FilmOn also offers a number of “a la carte” channels, some for free and others for monthly subscription fees, plus some free, ad-supported live streaming broadcasts from international broadcasters. In total, FilmOn offers 600 live channels for streaming, and 45,000 on-demand channels, founder Alki David told The Online Reporter in an email. It also offers monthly subscriptions to “Anderson Cooper 360,” “The Ellen Degeneres Show,” “Sky News Showbiz,” “Mad Money w/Jim Cramer” each for $0.99 per month, and subscribers can record shows with FilmOn’s cloudless DVR.

Questions for FilmOn

We sent FilmOn a list of questions about its service, but we didn’t hear back. David has been in court all week in the 9th Circuit, fighting to lift a ban imposed on his service in the region from offering content from ABC, NBC, CBS and Fox.

Here are the questions we asked:

– Does the service deliver national network primetime shows? While most media outlets have reported the service delivers over the Internet “primetime” content from ABC, CBS, NBC and Fox, such as the hit shows, we noticed that, at least on the service’s streaming site, there is no mention made of the hit shows. Instead, channel descriptions (like the ones above) list local station news and weather, and stations’ secondary channels. Can viewers watch “New Girl” or “Under the Dome” with FilmOn?

– From whom does FilmOn license content in the US? David has made statements in the past indicating all of the content delivered through the service is properly licensed. David said this earlier this year: “FilmOn has already secured several contracts with major national broadcasters across the world, whom we are providing royalties to.” We’re not sure if those contracts are with the big national networks for primetime content (unlikely) or with the local stations for local news, weather and other programming (more likely).

– How can viewers get FilmOn on the TV set? FilmOn is available on Android and iOS mobile devices, and via a browser. We don’t know if it’s available on Roku, or if it supports Airplay or Chromecast.

– Where is FilmOn available? Media reports tend to repeat the statement that FilmOn is available in 42 markets in the US, and 12 major cities, but where, exactly the service operates is a bit of a mystery to us. The Website lists as “beta channels” offerings in New York City, Chicago, Los Angeles, Dallas, San Francisco, Miami, Boston, Denver, Atlanta, Washington DC, Phoenix and Seattle – those would be the 12 major cities, but where are the other markets? And why are these listed as “beta channels?” If it is currently operating in those major cities, it will compete directly with Aereo in seven of those cities once Aereo has fully launched the services it has announced so far.

Aereo Building a Nationwide TV Service

Aereo provides a full line up of local TV channels in Boston, Atlanta and the entire state of Utah. It says it will in September launch in Miami, Houston and Dallas and that by year-end it will be operating in 22 markets.

Because the channels are delivered to the home, viewers can watch with any connected device through a browser. It can also be sent to a TV set with an Apple TV via AirPlay from an iPad or iPhone. Roku has an app for Aereo.

Time Warner Cable and other pay TV services also win with increased usage of Aereo and OTT services because both are delivered over broadband networks where they provide delivery without paying any retransmission fees or for content rights. How profitable is that? Currently broadband subscribers foot the bill but there are many indications that broadband service providers would also like to charge the OTT services.

If and when the courts finally declare that Aereo is a legal service, its market value will soar. You have to wonder who might acquire it. The list of potential buyers is lengthy: all the pay TV services because they would not have to pay billions in retransmission fees and it would provide a national footprint. Two of them, AT&T and Verizon, already operate nationwide and might want Aereo to complement and enhance their cellular services. Verizon has made a start as a nationwide OTT services with its majority ownership of Redbox by Coinstar service, which like Vudu and iTunes sells and rents movies and TV shows.

Additionally, there are a number of deep-pocketed companies that have said they want to deliver pay TV services over the Net including Intel, Google, Apple, Microsoft and Sony. It would provide them the most popular TV channels and give them leverage in negotiating for pay TV only channels such as AMC, Discovery and History. Channels such as Disney-owned ESPN and Time Warner-owned HBO would be much harder to get. Netflix says it will compete against HBO but there is no viable alternative in sports to ESPN.

The possibilities certainly point to the probability of a nationwide broadband-delivered pay TV service, which would cause the consolidation of the cable TV services that are already building a nationwide Wi-Fi service.

Aereo’s Legal Situation

Having lost in a New York federal court, the broadcasters have filed suit in Massachusetts and in Los Angeles where a federal court recently granted Fox’s motion to close FilmOn, which operates a similar but much less content-rich service. Fox and FilmOn lawyers this week argued the case in a US Court of Appeals in Pasadena, California. An Appeals Court in New York has already affirmed a lower-court ruling that under copyright law the Aereo transmissions are private and don’t require licenses.

Details of Aereo’s legal situation are at:

Will TV Networks Retaliate?

There has been speculation that if Aereo wins the suits, the national TV networks will move some or all of their shows to pay TV. That seems unlikely. Local stations broadcast over spectrum that the federal government and hence taxpayers have granted them so if they threaten to start charging for their shows, the feds and citizens are certain to file lawsuits, which could take years to adjudicate and leave them in limbo. They would especially have a hard time if they tried to move major sports such as NFL football entirely to pay TV. That’s despite the fact that the pay-TV only ESPN has already done exactly that with college football. See the New York Times article “College Football’s Most Dominant Player? It’s ESPN” at:

The Times says ESPN has paid out more than $10 billion on college football in the last five years alone and has become both puppet-master and kingmaker, arranging games, setting schedules and bestowing the gift of nationwide exposure on its chosen universities, players and coaches. ESPN will this year televise about 450 college games while its closest Fox will show about 50 on all its networks.

The Times article describes what the OTT services will have to do with sports: start small and think big. The paper says that in the beginning, “ESPN was a fledgling cable network without the money to compete with the broadcast giants for important games. But it had seemingly endless hours to fill with sports programming. ESPN executives persuaded lower-profile universities to deviate from traditional Saturday schedules, and Thursday night college football was born. Then Friday night. Then even Tuesday.”

Of course, companies such as Google, Apple, Intel and Microsoft have bank accounts big enough to accomplish that overnight.

It will take years for the national TV networks to move major sports to pay TV and by that time the OTT services, including perhaps Aereo, will be bidding for those rights.

The TV networks are unlikely to move their existing TV shows to pay TV but are likely to put new shows there. Again, they will be faced with competition from the OTT services, which are already developing and bidding for original content.

Another alternative is for the local broadcasters, national TV networks and/or pay TV services to setup their own streaming services, which would take the air out of Aereo’s sails.

During this transition period, local TV stations that broadcast national TV networks will face increasing pressure from the pay TV networks to reduce the amount of retransmission fees that pay TV operators pay the stations, a trend that has been underway for several years.

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Microsoft’s ‘To-Do’ List for Its Digital Media Consumer Business

– Low-Cost & Mobile Xboxes Plus More Content

– Lots More Content

– Oh! And Forget Windows in the Living Room

Microsoft has and will own for years the slow-growth corporate computing marketplace because of the size of its installed base. The fast growth in recent years is in consumer devices and in that Microsoft has missed the opportunity, especially in mobile devices — although it could still leverage its Windows installed base at the corporates to sell lots of Windows tablets.

Microsoft has strength in one area of CE devices that it should focus on: its Xbox gaming consoles. It can use Xbox to build an enormous installed base in homes for delivering video entertainment in the same way it built a large installed base in the corporates for computing. Think how much Intel and Google would love to have Microsoft’s installed base of Internet-connected devices that are hooked to millions of residences’ TV sets.

It’s all about devices and services as soon-to-be ex CEO Steve Ballmer began saying in his last days at the helm. Microsoft needs more to complete its home devices and services offering:

– An Xbox without the gaming capability that it could sell for under $100, preferably under $50, to compete against Apple TV, Roku and Chromecast.

– It could make its own version of Chromecast. Its SmartGlass technology, which has been downloaded 17 million times, essentially “casts” content to the TV screen. The SmartGlass device should be powered by the TV set’s USB port, which would make it easy to install and mobile. (How did Apple and Roku let Google beat it to that punch?)

– Live entertainment starting with pay TV channels as it has already done and is using its clout, contacts and money to accelerate their acquisition.

– A cloud-based DVR for recording live TV.

– Full compatibility, as much as possible, with Android and iOS devices.

Oh! Microsoft should forget about imposing Windows on its home entertainment devices. That’s a mistake it’s been making for over a decade and should be ended now. Windows is no longer a modern operating system. It’s too klutzy for 2013, much less the next decade, or for mobile devices.

If Microsoft knew with some certainty how the lawsuits against Aereo would end up, it could buy it and add Aereo’s service to its Xboxes. That would make a powerful net-top box — all the local TV channels plus most OTT services and perhaps a few pay TV channels such as Bloomberg.

As to tablets in the consumer market, Microsoft has a long, hard row. It’ll need:

– A full-blown Intel-based tablet that runs legacy Windows software for at least under $500. It’ll also have to pull all the strings to incentivize software developers to produce touchscreen versions. It’ll also have to muster all of its and its PC partners’ sales forces to make frontal assault on the corporates.

– An ARM-based Windows-look alike tablet that sells for under $300 and has all the must have apps and all the cool features such as a very high resolution screen, voice commands and be super thin and lightweight.

Back to Headlines

Microsoft Has Lost the Mobile Opportunity, with or without Ballmer

– As Has Intel

– Industry Looks East to China and to New Web Platforms

– Could Apple & Google Be the Next to Falter?

By Caroline Gabriel of Wireless Watch

The old assumptions of the Wintel pair, Microsoft and Intel, plus their PC makers have utterly failed in the mobile devices market, but the current leaders such as Apple and Google may also be on the brink of irrelevance, too.

The “obituaries” are flooding in for Steve Ballmer following the announcement of his retirement. There are many echoes of those for former Intel CEO Paul Otellini, who quit earlier this year. Both men defended their core businesses effectively in many ways, but grasped the real nature of the mobile revolution too late. Both thought that adapting their long-standing platforms and processes for smaller, connected devices would be enough, and watched as entirely new interfaces and chip architectures grabbed the new generation of consumers. But while we analysts — many of whom are children of the PC, not the smartphone era — shake our heads over the loss of vision at Wintel, the new axis, Qualcomm/Google/Apple, may already be standing on the brink of its own slow decline into irrelevance.

While it is natural to analyze the contribution and failings of Ballmer, and Microsoft remains one of the industry’s most powerful players, the debate is already outdated and almost quaint. Will Windows Phone see another generation? Will Windows RT make it as a tablet platform? Will BlackBerry have a new lease of life by porting BBM to Android? Will Samsung position Tizen as a challenger to Google? These are issues affecting the old guard, and how long they can postpone their mobile death. They do not address the coming changes.

Of the companies that are defining the next wave of user behavior in computing, entertainment and communications — virtually all of that taking place on mobile devices even when the user is stationary ¬— have very different names. Qualcomm is still a huge influencer, but the other companies creating the “post-PC” platform fall into two groups, the Web giants and the Chinese companies. Some, like Baidu and Alibaba, are in both.

Baidu epitomizes the rise of new approaches both in the Web and Chinese worlds. There is still a tendency among industry watchers, so many of them western-based, to regard China as a technology island with little influence over the overall future of the mobile experience. But it is now the largest market for smart devices and will soon be their largest installed base. It is increasingly influencing the users and developers of the other high-growth countries such as Indonesia and even India. Companies like Baidu will soon be extending their influence round the world, directly or indirectly.

Baidu, the largest Chinese search vendor, has struggled to leverage its leadership in that key application to create a strong mobile platform, but that is changing. It is moving from emulating Google and borrowing the ideas of the Android community, to making original advances of its own. This month alone, it has acquired the group buying site Nuomi to strengthen the vital location offering, launched a mobile payments service to help developers monetize casual and “lite” applications and announced the capability for customers to preview mobile apps without having to download them.

Baidu has made much about its rising investment in “lite apps,” showing that it grasps the importance of the shift from downloads to Web services, and the need to provide services with a full online media experience that are more forgiving of small devices with limited memory and processing power. The first-time smartphone users, who have often grown up with mobile networks as their only sources of computing and communications, but may have limited budgets, is the growth engine for the industry. Most mobile giants have not acknowledged that just making existing hardware and software cheaper and more resource- efficient is not enough. A whole new platform is required, just as a new touch interface was needed for mobile computing, not a shrunk-down Wintel device and Windows operating system.

Microsoft has virtually ignored the emerging base. It has spent many years in adapting the PC to be ultra-low cost, but still brought out a mobile OS that lives most happily on very expensive handsets. BlackBerry has raced for it too late, and it may well prove that Apple has, too. Android addresses almost every sector because of its wide variety of OEMs, but the Google machine behind it remains over-focused on conventional mobile norms, though, of course, Google also has the Web-based operating system. Facebook jumped too early into the brave new world of HTML5 and Web apps and did not have the courage or commercial need to lead that coming wave. Baidu and other firms that have grown up on the Web are likely to be bolder, because they need to differentiate themselves from Google and Microsoft, not ride on their successes.

So Baidu is starting to think as Apple does in its best moments — about how to define a user and developer experience that is fully suited to the new consumer base, rather than how to adapt an existing one. CEO Robin Li told the recent Baidu World event, as he introduced the new Light App platform: “The traditional app store model has a fundamental flaw because it only benefits a few popular apps, while a huge number of small developers are finding it hard to survive.”

Light Apps is designed to provide exposure for apps, which customers might use only occasionally, and still allow them to be monetized. The search provider will build a fully-fledged platform around its new offering, and has already added mobile payments, with music, video, travel guides and location services to come. In July, it acquired China’s largest mobile app store, 91 Wireless Websoft, for almost $2 billion, and this month it bought Nuomi to increase its appeal to China’s 464 million mobile Internet users — and, down the road, revive its former ambitions of licensing its cloud OS and mobile platform to partners beyond its homeland.

Recent acquisitions have been firmly focused on monetizing the evolving Baidu mobile software offering, and creating a major commerce engine so that revenues are driven by services and buying, not by access or devices. This is another important feature of the new mobile guard, of course, as led by the ever-disruptive Amazon. Fees for megabytes, minutes, operating systems and even apps will become as old-fashioned as a windowing interface soon enough, and that will put the sites with a really efficient and attractive — even compulsive — buying experience into the driving seat. Amazon’s e-readers and tablets, and perhaps future moves to become a network operator (virtual or even real), are just channels for embedding its ecommerce services into everyone’s daily lives. Baidu is addressing the same challenge, one that the traditional mobile giants have not even fully recognized yet.

So let’s stop obsessing over the legacy of Steve Ballmer, Paul Otellini and even the late Steve Jobs, and acknowledge that the mobile experience and profits of the rest of this decade will increasingly be created by commerce giants and Web platform providers. In that scenario, Microsoft, Apple and the rest risk irrelevance, and must act boldly and innovatively to fend off Baidu, Mozilla, Amazon and a host of bright young entrepreneurs emerging from China.

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Why Are Pay TV Subscribers Being Forced to Pay for Free Local Broadcasts?

Why are pay TV subscribers being required to pay for TV channels they could get for free with an antenna (or Aereo for that matter), is the question asked by Joe Jensen, EVP for cable and telecom at Block Communications and CTO at Buckeye Cablevision, in a Light Reading article called “Why Pay for Free TV?” See:

The quick answer is that the FCC requires that pay TV companies include local broadcast channels in the very basic bindles, which results in pay TV services paying billions in retransmission fees to local stations. The current Time Warner Cable –CBS dispute is one result. He said pay TV networks pay as much as $2 a month per subscriber for the local channels.

That means, as Jensen points out, that to get ESPN or Discovery channels, pay TV subscribers must pay for local channels even if they don’t want them or want them but get them over an antenna or, increasingly, by way of an Aereo antenna.

Pay TV services have helped local stations increase their audiences, Jensen says, and so helped them increase the amount they charge advertisers — almost as if to say local TV stations should pay the pay TV services for helping them increase their revenue.

Jensen says, “It is clearly time for a change” because local broadcasters enjoy protection by government fiat. He concludes, “Fair competition in media produces a better product than antiquated government protection.”

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Out with All of the Old at Microsoft, In with the New

– Company Needs Radical Thinking

– Should Look to China

By Caroline Wagner of Wireless Watch

Now that Microsoft CEO Steve Ballmer is belatedly moving on, can the terms of the debate about Microsoft’s mobile strategy move on, too? In recent years there have been oceans of words about whether the Windows giant might acquire Nokia or BlackBerry, reconcile with Intel or succeed by becoming the operators’ friend via close alliances with Orange or AT&T. The common thread in all this debate – the fixation on old traditional players and alliances. Even with Ballmer on the verge of departure (well, within a year at least), most of the candidates being discussed to replace him are of the old guard – internal heavyweights; Nokia’s CEO, and former Microsoft executive, Stephen Elop (despite his notable lack of success in turning Nokia around); even a return of Bill Gates (most desperate of the rumors).

What Microsoft needs is new blood combined with new partnerships, preferably with companies it has scarcely recognized before. To fight back against Google, Apple and Amazon, it needs to tap into the rising tide of innovation, and the very different business norms of Asia, particularly China. Indeed, those three great challengers also need to do some radical rethinking, soon, and learn from the Chinese market, too, or they will be following Microsoft rapidly down the road to mobile and post-PC decline.

Two of the most telling stories of the summer were both reported on the same day. First, Google’s VP of Android product management, Hugo Barra, jumped ship for Chinese handset maker Xiaomi, which has only been selling smartphones for two years. It has already overtaken Apple as the fifth player in China, and has a market valuation of $10 billion, higher than BlackBerry’s.

And second, Apple co-founder Steve Wozniak said in an interview with CNET that Apple should work with a Chinese partner to create a low cost handset for the country, which would have “totally different features and work in a totally different way” from an iPhone, and perhaps not even carry the famous iPhone brand.

This was excerpted from Wireless Watch. For a free copy of the complete report, please email and ask for WW509.

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Samsung & Sony Slash Prices of 4K TVs

Those thuds you hear are the falling prices of 4K TV sets.

They’re still not affordable for most but the falling prices of 4K TV sets are a step in the right direction. This week both Samsung and Sony reduced their suggested retail prices.

New price Was


55-inch UN55F9000 $4,000 $5,500

65-inch UN659000 $5,500 $7,500


55-inch Bravia XBR-55X900A $4,000 $5,000

65-inch XBR-65X900A $5,500 $7,000

Isn’t it odd how manufacturers can march in lock step like this even though US antitrust laws prohibit them from talking to each other about prices? Perhaps it’s brain waves that do the trick.

LG is sure to follow and will probably undercut both Samsung and Sony.

The record low prices for 4K sets are from Seiki, whose sets, however, generally get low reviews. Amazon is selling a 50-inch 4K set from Seiki for just $1,069 and a 39-inch model for $699. See:

After testing the 50-inch Seiki (a Japanese name for a San Diego-based company), a CNET review recommended consumers instead buy a similar priced 1080p TV such as one from Panasonic or Sharp. It said, “The one-trick Seiki SE50UY04 can’t compete with the multitalented 1080p TVs available today.” The reviewer also said that small-screen 4K TV sets are “stupid.”

We recently saw the Sony 55-inch Bravia at Best Buy and it’s a winner — it nearly followed me out of the store. Samsung did not have its 4K sets in that Best Buy but a Samsung sales rep in the store said it’s in the process of shipping them to about 100 US retail stores, not necessarily all Best Buys. LG is expected to start shipping in the US in September.

Look for more price reductions before the holiday shopping season gets going in earnest.

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IBC to See Live Rugby Demo in 4K

Intelsat and BT will be broadcasting the live Saracens vs. Gloucester rugby union match in from London at IBC this year, with the help of Ericsson, Sony and Newtec. The broadcast will be the first ever live event captured in 4K, encoded, transmitted via satellite and fiber, and decoded in real time, at 60 frames per second. Earlier this year, Intelsat paired up with Ericsson to demonstrate a 4K end-to-end video transmission over satellite, the first of its kind in North America. Intelsat said its satellites are ready to handle 4K transmissions, as soon as broadcasters are ready to supply them.

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‘When I Saw 4K, I Suddenly Got It’

“What’s the next thing that really drives people to the stores? We tried 3D and consumers were not terribly interested. We tried Internet TV or streaming TV, and that certainly has driven some sales. A huge percentage of Samsung TVs are connected to the Internet and in some cases consumers are replacing TVs just for that feature. The next big thing that drives people to the store, I think, is 4K. I used to be one of those people who didn’t think it was. But when I saw it, I suddenly got it.” – Richard Bullwinkle, head of television innovation on Samsung’s U.S. product innovation team in an interview with FierceOnlineVideo at:

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The Chart That Will Launch a Thousand Discussions

This chart appears in the new report “The Faultline Revisited – Disruption in Video Delivery from 2013 to 2023.”

For prices and a free extract from the report, please email

The 63-page report focuses on six major issues that will have the greatest effect on video infrastructure:

  • TV will shift to OTT streaming
  • Wi-Fi will become the leading wireless network for delivering content
  • Some 75% of TV viewing will shift to tablets, savaging sales of TV sets forever
  • Massive social viewing platforms will lead major motion picture releases
  • Unbundling of pay TV channels will lead to the death of 75% of TV channels
  • TV Everywhere will become the world’s largest app

The report is vital reading for anyone in every business layer of video and content delivery that doesn’t want to be caught in the crossfire and wants to build a strategy to survive and thrive in the ensuing eco-system.

To receive prices and a free extract of the report, please email a request to:

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Kevin Spacey Describes Future of TV, and It Looks A Lot Like Netflix

-Audiences Won’t Discern Between Platforms “Web,” “Movie” or “TV”

-Studios and Networks Must Keep Up with Technology, Or Be Left Behind

-Netflix Competes Directly with Premium Channels for Windowed Content

“House of Cards” star Kevin Spacey, delivering the annual MacTaggart lecture at the Guardian Edinburgh Television Festival last week, gave an eye-opening lecture on the future of TV, from the perspective of the content creators.

The gist of his speech echoes the two points that have emerged as the obstacles for TV: Story matters, platform doesn’t, and viewers want control. Those are also the two areas of entertainment where Netflix is excelling.

Content is Content is Content

Spacey said that audiences aren’t as inclined to make distinctions between “TV” and “Movie” and “Web video.”

“For kids growing up now, there’s no difference watching ‘Avatar’ on an iPad or watching YouTube on a TV and watching ‘Game of Thrones’ on their computer. It’s all content, it’s all story,” Spacey said.

He said differentiation between platforms “television,” “film” and “Web video” will disappear. “The device and length are irrelevant, the labels are useless,” he said.

Spacey also pointed to an important implication for the traditional TV industry: “If they [kids] do love a show on Netflix or Apple TV, you can bet they probably don’t know which network it originally aired on.” That statement speaks not only to the rise of new entertainment technologies – such as UltraViolet, tablets, streaming and the purview of on-demand content – but also the fact that the television industry and studios have largely been left behind by these technologies.

Studios and Networks Must Keep Up with Technology, Consumers

Spacey’s comments on storytelling and technology describe a new entertainment model that, unsurprisingly, looks a lot like Netflix.

Studios and networks that ignore the increased sophistication of storytelling, or the ‘shifting sands of technological advancement,’ will be left behind, according to Spacey. “Audiences will seek stories and content providers that give them what they demand,” he said. “Netflix and other similar services have succeeded because they’ve married good content with a forward thinking approach to viewing habits and appetites.”

He called the full-season release of “House of Cards” a success, and called on the TV business to embrace new consumption habits. “The audience wants control,” Spacey said. “If they want to binge, as they have been doing with ‘House of Cards,’ then we should let them binge.”

Netflix Is Pay TV Channel, Over the Internet

Meanwhile, studios have begun to view Netflix more and more as a pay TV distribution channel. A number of recent deals have shown that Netflix is quickly gaining access to pay TV window content, at the expense of pay TV channels.

Gone are the days of Netflix only offering limited, older, library and long tail content, the stuff that pay TV channels didn’t have much use for. Netflix has now been first choice among two big name studios – Disney and The Weinstein Co (TWC) – for movie content. That means starting in 2016, when both deals are set to take effect, Netflix will stream Disney and TWC films after the theatrical release, before the pay TV channels can air them.

Netflix is also acting as a defacto pay TV distributor for “Breaking Bad” in the UK. The show isn’t carried on any channels in the UK, but Netflix has developed an audience for the show by offering the past five seasons for streaming. What’s more, fans can keep current with the latest season by streaming new episodes of the show hours after they air in the US. For the viewer, that’s no different than if it was carried on a pay TV channel.

Netflix is also offering a slew of largely well-received (and much written about) original series, including “Orange Is the New Black,” “House of Cards,” and “Arrested Development.” Netflix will add three more big-named series to that list, a spinoff of the DreamWorks animated movie “Turbo,” called “Turbo: F.A.S.T.” and a Wachowski siblings-created sci-fi offering called “Sense8,” and a comedy led by Ricky Gervais, called “Derek.”

With big-draw original series, exclusive distribution of popular movies and TV shows, and a 30 million strong subscriber base, Netflix has become an a la carte pay TV channel, delivered over the Internet.

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French Cable TV Company Expanding Outside Its Footprint

It’s not unthinkable that a pay TV service would expand its coverage area outside its traditional footprint.

The French cable TV service Numericable is extending its footprint to nationwide with an IPTV product. The broadband situation in France and other European countries is different than in the States in one major way: the owners of the physical broadband networks are mandate to lease their network to any and all broadband services even though they compete against each other. That however does not detract from what Numericable is offering as a pay TV service.

Numericable offers three bundles:

– The entry-level iStart is a dual-play service with no TV channels. It costs €24.90 for 20 Mbps and unlimited calls in France and 100 other countries.

– iStart plus 50 TV channels is €28.80 a month.

– The top-tier plan, Max, costs €37.90 a month for the first year, then €42.90. It comes with 83 TV channels.

Pay TV subscribers pay an extra €5 a month for a Netgear HDTV box.

Numericable is working with TeVolution, a French OTT provider of IPTV services.

Sans the broadband, a US company could offer pay TV over any company’s broadband network, assuming it could get the rights to the channels. So could an existing pay TV service, say AT&T or Verizon, both of which have nationwide footprints including retail stores with their cellular networks. Verizon already offers a nationwide OTT service in its Redbox by Coinstar.

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Verizon Offers Tennis Live Streams to FiOS Subs

Verizon has paired with Synacor to offer its five million FiOS subscribers exclusive live streams of the US Tennis Open Championships. The live streaming competitions are available to authenticated FiOS subscribers via an embedded player on Verizon’s dedicated entertainment and TV Everywhere Website.

FiOS subs will have access to 75 live or first-run match hours of the tournament, and 90 hours of original coverage of the tournaments, including shows “US Open Tonight” and “Breakfast at the Open.”

Synacor has become a prominent go-to for authenticating access to live streaming big sports events. Earlier this year, it worked with Turner Broadcasting Systems to live stream the NCAA Division 1 Men’s Basketball Tournament games to subscribers; in 2012, Synacor’s technology supported authentication for NBCUniversal’s summer Olympics live streams.

Synacor offers TV Everywhere solutions to pay TV providers and television networks, including HBO, Charter Communications and Dish Network.

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OTT Space in UK is Hot

OTT services are flourishing in the UK and subsequently competing heavily right now, and consumers are reaping the benefits. Last week, we reported on a report released by IHS, in which analyst Guy Bisson called the UK ripe for studio-based OTT services. If studios such as HBO do eventually offer OTT services, such as what HBO is offering in the Nordic region with HBO Go, they’ll be late to the party. The UK has already seen a group of subscription-based and transactional VoD services launch, as well as OTT-like services being offered by pay TV providers such as BSkyB’s Sky TV.

Here’s a quick look at OTT services already in play in the UK:

-Netflix: Research from Enders Analysis estimates between 1.5 and 2 million subscribers for Netflix in the UK now. £5.99 for instant service

-Amazon’s LoveFilm – announced 2 million subscribers in January of 2012. Enders said Netflix is gaining subscribers at the expense of Lovefilm. £5.99 for Instant service.

-Tesco’s Blinkbox, has an estimated customer base of 1 million. Prices range from £0.99 and £1.99 to upward of £10 for purchases

-Rakuten’s Wuaki.TV: A newly launched service in the UK, Wuaki.TV is a hybrid transactional and subscription-based OTT VoD service. Due to the competition, Wuaki.TV is initially offering subscriptions for £2.99 in a push to sign up subscribers. After the promotion, Wuaki.TV will cost £5.99 a month.

-BT Sport has signed up over half a million subscribers to its OTT service for the football season. BT Sport is free to its broadband subscribers.

-The OTA players, including BBC iPlayer, ITV Player, 4oD and Demand 5, which offer broadcast content available for free, on-demand and accessible via tablets, laptops, and net-top boxes.

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The Market Is Ripe for a Combined Aereo/Roku Type Service

Is the market ready for a paid all-OTT service (let’s call it ALLOTT), one that carried most all the popular OTT services such as Netflix, Hulu, YouTube, Amazon and Vudu to compete successfully against the pay TV services and sign up hundreds of thousands of subscribers? One that deployed its own net-top boxes ala Roku? One that also included the local TV stations and their national TV networks’ primetime shows, sports and news ala Aereo, but legally. Think of it as a combined Roku/Aereo with a cloud-based DVR.

We think an all-OTT service would have to offer several of the local channels that broadcast the national TV networks: CBS, ABC, Fox and NBC. That would give the ALLOTT service access to big time sports such as most but not all National Football League (NFL) games — ESPN and the NFL’s own channel are pay TV only. The national TV networks also broadcast other major sports, many major hit shows, national news plus local news, sports and weather.

ALLOTT would have to first negotiate with the owners of the national TV networks, which also own many local TV stations: Disney (ABC), 21st Century Fox (Fox), Comcast (NBC) and CBS. It’s unlikely it could sign a deal with Comcast, the biggest pay TV service of them all, for NBC but the two or three of the others might be willing at least to negotiating because they want to maximize revenue for their content. If one were to sign up, it seems certain that at least one of the others would, if not two or even three.

If two or three of the national TV networks signed up with ALLOTT and brought with them the local stations they own, it would give ALLOTT the rights to retransmit the national networks’ primetime shows plus local news, weather, sports, traffic and other local shows in a critical mass of the population. Such a deal would also give the local stations a back door if the pay TV services keep pressuring them to limit retransmission fees. ALLOTT would have to set up an Aereo-like streaming service, legal of course and with the full consent of the national networks that participated. Such a deal would also have major repercussions at the pay TV serves because they are paying local stations billions of dollars a year in retransmission fees. However, the time may be ripe for an all-OTT service to start negotiating with the national TV networks and their own and their affiliate stations. It would certainly give the stations some leverage in negotiating with balky pay TV companies such as CBS is currently encountering with Time Warner Cable.

Technology wise ALLOTT would have to integrate all the individual OTT services into a single, unified user interface that meets these requirements:

– Browse and search for all available content on all the OTT services — free, subscription and paid/rental — that meet various preferences such as genre, name of actor or director, release dates, video resolution such as HD only.

– Make recommendations from all the live and OTT services based on what the viewer has previously watched and rated.

– Search all the live and OTT services for a particular show.

– Store recordings of linear TV shows in a cloud-based DVR service that would be available to all a subscriber’s content on any device, anywhere, anytime.

The integration should be like what TiVo has done, only better in terms of being more focused on content. TiVo’s interface is still first and foremost pay TV-centric, not OTT centric. There would be separate icons on the initial screen that allowed the user to access:

– Live TV

– Recommendations

– Search

– Genres

– Favorites: TV channels, OTT services, series and/or actors

– Shows that have not been watched in their entirety

ALLOTT will use the latest compression/decompression technologies such as HEVC to squeeze as much resolution into as little bandwidth as possible.

The pay TV services, to which broadband revenue has become increasingly important, have conflicted interests. They want to sell high-speed broadband to as many subscribers as possible but do not want to lose the revenue and profits they reap from pay TV.

Many believe that broadband now puts more net profits on the P&L than pay TV because of the increasing costs for content. Cablevision Systems CEO James Dolan predicted in a surprisingly candid interview with the Wall Street Journal that all TV will move to online distribution sometime in the future. He said the company may some day drop the pay TV service in favor of the ever more lucrative broadband service.

Comcast, the largest pay TV service of them all, with its ownership of NBCU probably would not say yes to such an OTT service. In fact, Comcast might well start its own nationwide OTT service. It certainly seems to have the ambitions to be a national service.

The time may be ripe for an all-OTT service that offers most all the popular OTT services a la Roku plus many if not most of the local stations a la Aereo.

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Three Tracks to Broadband Delivered Pay TV

There appear to be three ways that companies can enter the broadband delivered pay TV market:

  1. Use Someone Else’s: Offer the service from a pay TV provider, provide a box that can serve as a traditional pay TV set-top box, add some user interface features and offer OTT services and/or gaming. Microsoft and Roku are following this track.
  2. Roll Your Own: Sign distribution deals directly with content owners, provide a STB, offer DVR in the box or, preferably, in the cloud, provide OTT and/or gaming services and develop a user interface that treats all content sources as one. Intel and Sony are apparently following this path.
  3. The Trojan Horse: Make deals with content owners, not pay TV companies, that let pay TV companies authenticate subscriptions to that content until you have a critical mass and can cut the cord to the pay TV service and become the pay TV service. Apple is easing its way into becoming a pay TV service by doing this.

Then, there’s Google, which has so many irons in so many TV/pay TV/OTT fires that it requires its own article in a future issue.

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VuTV Offers Internet-Delivered Pay TV Service

-A&E, Viacom, Turner Providing Content

VuTV is offering a bundle of premium pay TV channels to viewers with Freeview HD TVs and set-top boxes, in a new service set to launch this fall in the UK. The service will be previewed at IBC in the coming week.

VuTV is powered by Synapse TV, a joint venture between Simplestream, which specializes in live streaming and catch-up TV services, and Strategy & Technology, a software company that focuses on interactive TV services. Synapse TV delivers linear and on-demand content offerings to connected TV sets and devices such as tablets. On Freeview HD TVs, the VuTV service can be accessed via a dedicated channel in the EPG. This allows subscribers to access the content “in exactly the same way as traditional over-the-air channels,” the company said.

So far, content providers A&E Networks, Viacom and Turner Broadcasting have signed on with VuTV to deliver content

VuTV will be streamed over Synapse TV’s very own secure CDN, built with Amazon Web Services. Broadcasters’ Audience Reach Board (BARB) will measure VuTV channel viewing just as it does other OTA channels, allowing networks to leverage advertising revenue on the platform, while Synapse will also be collecting data on viewing habits.

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Three Hard Technology Problems Operators Face with Multi-Screen

-Personalization, Control and Device Proliferation

Parks Associates held a seminar recently with Azuki Systems, outlining challenges operators face in delivering multi-screen and TV Everywhere services to subscribers.

Brett Sappington, director of research at Parks and who hosted the seminar, described the television markets in North America, Western Europe and parts of Asia as “hyper competitive” markets for television services.

-Competition between telco, cableco and satco pay TV providers: Sappington pointed to broad trends, such as cable losing market share, but adding high speed broadband. “[Cablecos are] trying to leverage broadband offerings to take market share away from DSL providers, and maintain their position as an important part of the entertainment ecosystem,” he said.

-OTT services as alternatives to premium pay TV channels: “Consumers are using them almost like they’d use HBO or other type of premium channels,” Sappington said. “They compete really with the premium services that pay TV offers. Citing Parks research, he said nearly half of pay TV subscribers in the US have a subscription to some OTT service, Netflix being the most dominant.

-Battle for bandwidth in networks: Sappington said there is a rising need for service providers, specifically IPTV providers, to manage and balance bandwidth. “Many IPTV providers, as they’re offering services into the home, they have to balance what type of bandwidth to make available for broadband services and how much of the wire do you pack with television programming, and what types of technologies can help you do both of those, better,” he said.

Trials and Tribulations of TV Everywhere

One, if not the biggest challenge to pay TV providers currently looking to deploy multi-screen services is content rights, and everyone knows it. “Today I’d say we’re very focused on the content side, unlocking broader content requires a lot of hand holding with the content providers,” said seminar speaker Steve Sklar, CenturyLink VP video strategy and development.

CenturyLink is one of the IPTV pioneers in multi-screen services, and utilizes Microsoft’s Mediaroom IPTV solution.

Conventional wisdom deems that content rights issues for TV Everywhere and multi-screen services will sort themselves out over a period time.

In the meantime, service providers face technological obstacles to delivering OTT-like services as well. “There’s a lot of work on the front end to get into the TV Everywhere business, such as setting up a video CDN, developing the authentication and entitlement in the related home networking,” Sklar said. “A lot of work on that side, the client side, to get the experience right there.”

Chris Mumford, director of systems engineering at Azuki Systems, said the company has identified three “hard problems” operators face, from a technology perspective, to meet shifting consumer expectations: personalization of linear TV, real-time service control, and device proliferation.

Personalizing Linear TV

Thanks to Netflix, Amazon and the others, consumers want personal video viewing experience that conforms not only to movie tastes and preferences, but also to individual schedules and viewing habits.

“They [consumers] want to watch what they want to watch, when they want to watch, where they want to watch it,” said Mumford. “The days of waiting until eight o clock for your favorite show to come on are over.” Mumford said the linear experience needs to undergo a fundamental shift toward this type of personalization.

“Personalization on the TV I would view as the real hard problem,” said Sklar. He said operators could stand to improve on the process of discovery, which currently focuses on the EPG grid and hundreds of channels. “If the TV knew who you were, and knew what you watched, it could create a much more compelling user experience,” he said.

At present, there are two ways of going about personalizing linear TV. One option is to deliver intelligent service features, such as recommendation algorithms, that OTT services have made famous and that are possible through over the top delivery – what Mumford refers to as content delivery network (CDN) based delivery – of content services.

“This new adaptive mechanism of delivering video [over the top] allows you to embrace that shift,” Mumford said. “We can see a linear TV where you can start over any channel if you tune in late, you can consume linear TV in a catch up perspective, where you can go back through all the programs that aired in the last 24 or 36 hours on a channel, and choose to watch it that way.”

Operators can also utilize over-the-top delivery to embrace network DVR “in a very intelligent way, that takes the storage of media out of consumers homes,” which leads to better protection of content and lowers cost of customer premise devices.

The other option, which is a short-term solution, is to get at personalization via apps and personal, mobile devices. “My expectation is that companion capabilities can be very key in providing a personalization solution in the nearer term,” said Sklar. “It’s much easier to implement personalization on a tablet or smartphone or laptop.”

Real Time Service Control

Pay TV providers are struggling to keep up with the fast-paced cycles of innovations and new releases that characterize Internet-based services and platforms.

“There are constantly new features, there’s constantly new content, and there’s constantly new content rights,” Mumford said. This reality, coupled with the variety of devices, platforms and networks on which consumers wish to access content, poses a significant challenge to service providers. “How do I, in real time, update all of my end platforms?” Mumford said. “To change the notion that they can or cannot play linear TV in this region, or that they can or cannot play on-demand asset? That was easy to do in a push network, where you determine what everyone watches. It’s harder to do in a multi-screen environment where devices are consuming content on-demand, in different locations outside of the living room.”

Another component to service control is network management. Sklar said that as more and more TV everywhere, multi-screen and on-demand services roll out, customers will start to use those features more and more. “We’re going to cause our customer usage patterns to shift in a pretty dramatic way, from multicast to unicast,” Sklar said. “This whole question of how do you manage your network to be ready for a fairly significant shift in traffic patterns over the next three to five years – that’s one of the hardest challenges that a service provider has to be very concerned about.”

Device Proliferation

Device proliferation, or perhaps more accurately characterized as device fragmentation, is a real problem for pay TV providers looking to offer customers a Netflix-like “anywhere, any device” experience. “You can’t afford to update applications on 20 platforms,” Mumford said.

“You must set up an operation that is fundamentally able to deliver that content in its best form to hundreds and thousands of different types of devices,” Mumford said, that works consistently across all the permutations of operating systems, hardware manufacturer, video codec, player DRM protection. “Having one operation that covers lots of devices, is a really hard problem.”

OTT to Become ‘Core Service’

During the requisite “future of TV” portion of the seminar, Sklar said he sees the core business for service providers will shift from traditional broadcast and linear delivery to these multi-screen, OTT features. “The way a TV service is structured, I think, will shift, and it’s going to be driven by what you’re seeing in TV Everywhere,” Sklar said. “OTT content is going to become a core part of service provider offerings.”

He said he forsees a personalized TV service that offers all channels available on all devices, a network DVR service, and a full on-demand library of content, available inside and outside out home. “I see on-demand moving from being a silo to the center of the customer experience,” he said. “There’s a huge proliferation of content sources out there, and at the end of the day, we’re in the business of curation, and providing customers with a rich library – including longtail. So OTT will be a big piece of that.”

For more information on Parks Associates’ seminars, visit

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Pandora Lifts Streaming Caps Ahead of Apple’s Entrance

Pandora will be lifting the 40-hour per month cap it imposed on listeners earlier this year for mobile devices, and will implement new cost-cutting restrictions as of September 1st.

Pandora introduced the cap in response to rising royalty costs. The aim of the cap was to drive down mobile useage of the free, ad-support music streaming service, and increase subscriptions. The plan worked: the company said it saw a 12% drop in listening hours as a result of the cap in mobile devices; royalty costs accounted for 52% of Pandora’s revenue during Q2, down from 59.8% measured in 2Q 2012; and subscription accounted for 18.3% of revenue for the quarter, up from 11.7% measured in 2Q 2012. Those savings didn’t translate into a rise in profit for Pandora during the quarter. Due to increases in sales and marketing costs, the company’s net loss increase 44%. Still, Pandora’s Q2 earnings beat Wall Street expectations, with revenue up 58% from last year’s Q2.

Pandora is introducing new measures to battle royalty costs that it thinks will be more palatable to listeners. The first is song skipping: Pandora has limited song skipping to 6 songs per hour per station, and Pandora has expanded those limits to 12 skips in a rolling 24 hour period. A “skip” isn’t just a skip, however. It’s also includes a thumbs down rating or when the listener hits the “I’m tired of this song” button.

Pandora is also releasing a “sleep timer” for apps of generation 4.5, which stops a radio stream after a period of time, instead of playing on indefinitely. The idea behind the feature is that listeners who enjoy listening to music when they go to bed can set the time for something like 15 minutes, long enough for them to drift off to sleep. Pandora said in a blogpost the sleep timer was one of its most requested features from users.

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Apple Readies iTunes Radio

-Set to Launch in September

Apple debuted its Internet radio service over the summer at its World Wide Developers Conference, and said it had key big advertisers already in place, including Nissan, McDonalds and Pepsi. Apple was met with lackluster response from the unveiling, which focused on uniting advertising with music.

With the information we have at present – which isn’t a lot – iTunes Radio doesn’t look much different from what’s already out there, including Pandora and Spotify.

The service will offer free, ad-supported Internet radio, and listeners can access the ad-free version for a price of $25. Obviously, listeners will be able to purchase songs heard on the radio service, and Apple’s Eddy Cue indicated at WWDC that the buy button would feature prominently in the service.

Pandora is king of recommendations in its radio service, but iTunes Radio has the advantage of being able to access and analyze listener’s iTunes libraries, which will give the recommendation algorithms some valuable data.

iTunes Radio will also be experimenting with music genres, and include stations such as “Trending on Twitter.” We’d expect social networks, and particularly Facebook, to feature prominently in the service, as social networks have been identified as key gateways to music discovery for people.

Finally, while Pandora is available on a wide swath of platforms and devices, iTunes Radio has working in its favor the millions iTunes users who use the service to purchase music.

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YouTube Content Will Get International Broadcast Distribution

YouTube content creator Uncommon Content has announced a new deal with Electus Studios to license two of its YouTube shows to international broadcasters. The deal offers the two Web series, “Ex-Pats” and “Capture,” the opportunity to vastly expand platform and eyeball reach.

“As the media landscape evolves, the demand for non-linear content by traditional linear broadcasters has begun to increase significantly,” said John Pollak, president of Electus International. “We are able to continue to lead the charge of delivering to our clients the most sought after content on the market today, regardless of where it originates from.”

Pollak said Uncommon Content’s two Web series are of exceptional quality. “Ex-Pats” is a series that follows immigrants living in new countries. There are 12 episodes in the first season of show, each around 25 minutes long. “Capture” is a show about the art of photography, hosted by notable American portrait photographer Mark Seliger. There are around 12 episodes of the show, each over 20 minutes in length.

Uncommon Content’s YouTube channel, called Reserve, has over 72 thousand subscribers and around 5 million video views, modest numbers by YouTube standards. Most of the videos have fewer than 10,000 views, despite high production quality. An exception to this is “Artst Tlk,” a musician-interview show hosted by Pharrell Williams, which has developed something of an audience.

Uncommon Content has had much more success licensing its content to other media companies. NBC Sports has picked up the fishing series “Hooked Up With Tom Colicchio,” Esquire (also owned by NBCUniversal) picked up the cooking talk show “On the Table With Eric Ripert.”

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US Telcos Accept $386m in Taxpayer Subsidies

Lest anyone think US broadband companies are free from government manipulation and subsidies, consider these recent doles made by the taxpayer-funded Connect America Fund:

Windstream $123.9 million

AT&T $100.0 million

CenturyLink $54.0 million

FairPoint $3.3 million

Hawaiian Telcom $1.0 million

ACS $173,800

It’s expected the telcos will use advanced DSL technologies on their existing copper wire networks.

All are telcos whose roots are in telephone service. None are cablecos, whose roots are in pay TV. Verizon, which has placed all its chips on all-fiber networks, is also not on the list.

The $386 million total is expected to extend broadband to 600,000 homes and businesses, according to the Federal Communications Commission (FCC), which created the Connect America Fund with $485 million of taxpayer money.

The FCC said that in 2012 broadband service providers had accepted nearly $115 million to expand rural broadband in 37 states. This second round of funding, the FCC said, “builds on lessons learned from the first, and includes changes to incentivize private investment, improve program clarity and maximize deployment where consumers lack broadband.”

For details, see:

Walter McCormick, president of USTelecom, the telco-owned government lobbying firm, said, “The carriers making these investments serve over 80% of the 18 million Americans with no access to broadband service.” By serving we presume he means with telephone service and possibly very slow broadband, too slow for streaming multiple streams of HD videos to residences.

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AT&T Offers 45 Mbps in 40 More Markets

AT&T is now offering 45 Mbps down and 6 Mbps, its fastest speeds, in 40 additional markets such as Atlanta, Orlando, Chicago, Indianapolis, Charlotte, Memphis and Nashville. The service is $76 per month but promotions and bundles can reduce it to $50 a month. AT&T also reconfirmed its prior promise to offer speeds of up to 100 Mbps in the future but provided no specifics.

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Netflix Blamed for Increase in Broadband Rates

OTT services such as Netflix have caused many consumers to subscribe to broadband and to faster broadband speeds, which have enriched the pay TV companies’ bank accounts.

In explaining a coming broadband rate increase, Ohio’s Buckeye Cable said, “Recently, Internet use has again expanded dramatically, meeting a whole new range of our entertainment needs through streaming video. Just two Web sites – Netflix and YouTube – now account for 1/2 of all Internet traffic on our network, and they continue to consume more and more. These Internet giants, and others like them, have made billions of dollars building the Web sites you enjoy, yet our federal government’s position on “net neutrality” allows them to contribute nothing to companies like ours, while we must expand our network to carry their traffic.”

However, Buckeye Cable did not say that broadband service providers like it are raking in billions of dollars directly as a result of consumer demand for OTT services such as Netflix and YouTube.

The company said that starting September 1 its broadband subscribers will be paying higher rates, some of them as much as $7 a month more. Defending its actions the company said this is only its third broadband rate increase in 14 years.

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Broadcom Shrinks Wi-Fi Platform

Broadcom has a new Wi-Fi platform framework for embedding in devices such as Google Glasses or similar devices rumored to be coming from Apple, Samsung and others. It can also be used in devices that monitor a person’s health. Broadcom has combined Wi-Fi Direct technology with its own Wireless Internet Connectivity for Embedded Devices (WICED) product suite to produce a new offering: WICED Direct. It said it is smaller and uses less power than existing Wi-Fi platforms but provides high performance.

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Three More Pay TV Apps on Apple TV

– Smithsonian Channel Could Be a Blockbuster

– Apps from NBC, Disney, ESPN and CBS Could Be Leading to an Apple Pay TV Service

Maybe Apple is turning its hobby, Apple TV, into a vocation. Apple this week added new apps to its Apple TV net-top box.

One of the apps that were added to Apple TV this week is a blockbuster. It the Smithsonian Channel and its outstanding documentaries, which may be even better than those the History and Discovery channels produce — and certainly more serious than most of what those two channels are showing these days. Among the Smithsonian shows are: “The Hunt for Bin Laden,” MLK: The Assassination Tapes” and “Freud’s Naked Truths.” There’s a complete list at:

Somewhat coincidentally, perhaps, Time Warner Cable and CBS, the owner of the Showtime Network that airs the Smithsonian Channel on premium pay TV, are in a dispute. As a result Time Warner Cable is not currently showing any of Showtime’s channels — or any CBS channels — in markets where CBS owns the local CBS affiliates.

The Smithsonian Channel is available in premium bundles on DirecTV but not Dish, Comcast, Time Warner Cable (but not currently), AT&T U-verse, Charter, Verizon FiOS and Mediacom.

The other two new Apple TV apps are pretty conventional but useful, one to families with kids — Disney — and one for weather bugs — The Weather Channel. Pay TV subscribers who can authenticate that they pay their pay TV service for the Disney channel can watch it live on their Apple TV plus library content. It’s not quite clear why someone would watch the Disney channel live on an Apple TV set when they can much easier watch it directly from the pay TV service. There must be a reason such as being a forerunner to watching it without a subscription from a local pay TV service on a soon-to-launch Apple TV set. Apple and Disney are longtime digital media buddies so there would be no surprise that the two are cooking up an alternative pay TV service that’ll be delivered over the Net.

Surprisingly the NBC-owned Weather Channel app on the Apple TV does not have a live feed, only text-based forecasts and videos that aired previously on The Weather Channel, much the same as The Weather Channel’s app on iOS devices.

Two months ago ESPN and HBO Go were added to the Apple TV. Both require authentication that the user is paying a pay TV service for them. HBO is only in premium bundles so its potential viewing audience on an Apple TV is limited.

However, all the live ESPN shows that are by ESPN mandate included in everyone’s basic pay TV package are available for free on the Apple TV to pay TV subscribers. The ESPN channels that are only in premium viewers are blocked from being seen by those that do not pay for them. Again, we ask the question, why would anyone want to watch a live ESPN channel on an Apple TV when it’s easier to watch it on a pay TV channel? Then again, Disney is the majority owner of ESPN so that story has yet to play out. The ESPN app does have, like The Weather Channel, older videos and text-based content such as scores.

The other app is the music video subscription service Vevo.

Apple already offers a 24-hour a day live feed from the UK-based Sky News. It’s UK- and European-centric but provides a worldview to those whose business and personal interests are larger than just the States. Yes, they do provide news on US matters such as the recent Eric Snowden-caused controversy about the NSA’s eavesdropping. Viewers can also select from a library of videos, which are divided into genres.

The live feed from the Wall Street Journal is at best pedestrian. It only airs a few hours a day and is limited to the shows it streams. Apple is lacking a 24-hour live financial/business feed. Three currently exist on pay TV: Bloomberg, Fox Business Network and CNBC. Apple TV badly needs one of them if it intends to turn itself into a pay TV service.

As Apple adds more apps to its Apple TV, it may have to re-do the user interface, which is taking more scrolling to find an app and apps are becoming difficult to find.

The apps themselves are Apple elegant — clean, simple and logical. We think the apps point to a day when Apple can offer its own pay TV service — and perhaps its own Apple TV set.

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Microsoft Adds Time Warner Cable to Xbox

Microsoft has added service for Time Warner Cable (TWC) subscribers to Xbox 360 that streams 300 television channels to TWC subscribers’ homes. The app has voice and gesture control. The Xbox 360 already has apps for Verizon’s FiOS and Comcast. All require a subscription and at least one of their set-top boxes in each home.

Mike Angus, SVP at Time Warner Cable video, said, “This is a complementary service and not a standalone video product in and of itself,” Angus said. Customers who want digital video recorder service will still need to lease an additional set top box from Time Warner Cable.

Microsoft’s Xbox 360 approach is very different from what Apple is doing.

– Microsoft is turning the Xbox 360 into a pay TV set-top box that also offers gaming and OTT services.

– Apple is in effect adding content apps specific to a content owner, say ESPN, Disney and The Weather Channel. To view them requires authentication by the pay TV service but someday the authenticator could be Apple rather than a traditional pay TV service.

Blair Westlake, corporate VP of Microsoft’s media and entertainment group, said the company had considered licensing channels directly from TV networks much like what Intel and Sony are thought to be doing and which Apple may be on a similar track. The Wall Street Journal quotes Westlake as saying, “We looked at it and said if we can deliver an app or apps like the one we are lighting up today” with Time Warner Cable, that’s “really what people expect.”

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Google Blocks Chromecast from Playing Locally Stored Content

Google has released an update (some might call it a back-date) that blocks Android applications that allow users to stream any files they wanted from their local devices, according to DSLReports. Google blamed it on Chromecast still being in a beta mode. It told The Verge, “We’re excited to bring more content to Chromecast and would like to support all types of apps including those for local [stored on a device in the home] content.” It said Chromecast is in its early days and might change significantly before its final release. Shades of Google TV, which Google knowingly released before it was completed but did not tell anyone.

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TiVo’s Lawsuit Settlements Put Black Ink on the Bottom Line

– Another Quarterly Increase in Subscribers

– Is TiVo to Be a Wholesaler/Technology Company or a Major Player in Broadband Delivered TV?

“Apple TV gets a lot of play, Roku gets a lot of play, Sling, Google TV, Chromecast, we look at that and look at the set-top box and look at DVR. We think we’re the only product out there that embraces everything they do in a single solution,” said TiVo CEO Tom Rogers in announcing record quarterly revenue and profits.

TiVo is the only company whose net-top box fully integrates pay TV, OTT, DVR and, in one model, local free TV broadcasts. When a user does a search or TiVo makes recommendation, it looks at all content sources, which is unique among net-top boxes.

That capability, the strength of its technology and patents that its lawyers vigorously enforce helped it to an all-time record quarter in revenue and profit plus a sizeable growth in subscribers. That’s welcome news for a company whose recent history, since 2009, has been losses.

TiVo last week announced a new DVR called Roamio that will be available at retail, which should help boost subscribers and revenue in the future. Rogers said initial sales of the Roamio are good.

TiVo’s lawsuits against pay TV companies that launched their own DVRs are paying off in sizeable royalty payments. Its biggest claim is that it owns the patent for something called “time-warp,” which allows users to pause, rewind and fast-forward while watching live TV. It has recently won lawsuits against STB makers Dish, Cisco and Google (Motorola Mobility).

It’s the royalties that are paying the bills. Its net profit for the quarter ending July 31 increased to $268.9 million from the prior year’s loss of $27.7 million. However, the company said that without the settlement payments from Cisco and Google, it would have reported a net loss of $13.1 million.

Total revenue for the quarter increased 53% to $100 million.

TiVo added 212,000 net new subscribers, compared with the 230,000 subscribers it added in the year ago quarter. After four straight years of declining subscriber numbers, TiVo has now reported subscriber increases for eight straight quarters.

TiVo has three businesses, in addition to its legal settlements. One is selling DVRs to pay TV operators that sell/rent them to their subscribers. Most recently it made such a deal with the pay TV service Com Hem in Sweden. Another business is royalties from the use of its technology and services by pay TV services that have DVRs built using TiVo’s technology.

The third is selling TiVo-branded DVRs at retail. This is the business that we have urged TiVo to expand by a) putting the DVR function in the cloud so it can offer a low-cost net-top box (NTB) and b) strengthen its OTT offers. It may require two NTBs to accomplish that, one for pay TV only and one for pay TV and local broadcasts. If TiVo were to launch such products, it would become the main player in the looming market of broadband delivered TV, a market that Intel, Sony, Apple, Google and others are spending billions to enter. Based on what we know about the other companies’ products, TiVo would have a clear edge in product and services. It’s just the expense of having the DVR recording done inside the home that’s an initial cost barrier.

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Forbes Also Notices Apple TV’s Interface Is Aging

The Online Reporter is not the only one that has noticed that as Apple TV adds apps and as apps offer both live and library content, its user interface becomes less friendly. Forbes magazine said it isn’t at the moment and new content isn’t helping. “The ‘wall of icons’ approach that has served the iPhone so well is less appealing on the TV, especially when one compares it to the traditional pay TV guide that has the advantage of showing you what’s currently on.”

Forbes said there is a lot of clicking to move between channels, up to half dozen button presses to move from one program to another, during which no video is playing in the corner like on pay TV.

Another complaint is that some apps such as the Disney Channel have both live and library offerings and until a viewer clicks the app, there is no way of knowing what’s on live. As Apple TV adds more live content, it will need to start the user in a screen that shows what’s currently on live so the viewer can instantly know and start watching instead of doing a search. See:

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Cox Joins Cablecos’ CableWiFi Network

Remember that cellco executive that bragged that all tablets would soon have only cellular, no Wi-Fi? That’s now clearly seen as wrong as then Google chairman Eric Schmidt’s prediction that all TV sets would be equipped with Google TV technology by mid-2012.

Make no mistake about it, the cable TV companies, who failed at building their own cellular service, are building a US- and Europe-wide Wi-Fi network, one that their subscribers can access from most any location.

Cox is the latest US cable TV service to offer its subscribers free access to its and other cable TV companies’ 150,000 indoor and outdoor US Wi-Fi hotspots. The service is called CableWiFi. The hotspots are restaurants, malls, sports arenas, parks and beaches in cities like Washington DC, Boston, Richmond, Philadelphia and San Francisco. Cox said more hotspots are expected to be added including business and travel destinations such as Los Angeles and New York City.

COX EVP and chief product officer Len Barlik said Cox recognizes that its customers want quick access to information and entertainment anytime, anywhere.” The best way to do that, of course is Wi-Fi instead of cellular, at least with the current state of the technology.

Once a user has logged into a CableWiFi hotspot, the device will automatically recognize and logon to other CableWiFi hotspots for 180 days.

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30 Largest Owners of Local TV Stations

Local TV stations are becoming a key element in the pay TV/pay OTT struggle in the US. They broadcast over-the-air TV and for free TV shows, movies plus local and national weather, news and sports for free to practically every household in the States — using spectrum they license for free from the US government, hence from US taxpayers to whom they pay nothing.

In addition to the billions they take in from advertising, they also collectively receive over $3 billion a year from the pay TV companies who are for all intents and purposes forced to retransmit one or more of their channels. In effect they are well paid for the tiny amount of airtime they devote to broadcasting in the public interest such as weather and other emergencies.

Here are the 30 largest owners of local US TV stations per percentage of local households in their footprints, according to

TV’s Top 30 Group Owners % of US TV

Rank Group Household

1 Ion Media 64.3

2 Univision 44

3 Trinity 41.2

4 CBS Television Stations 37.8

5 Fox Television Stations 37.2

6 NBCU Stations 35.8

7 Tribune Broadcasting 35.5

8 ABC Owned Stations 22.5

9 Sinclair Broadcast Group 20

10 Gannett Broadcasting 18.2

11 Hearst Television 18

12 Entravision 17.4

13 Daystar Television 16.9

14 Belo Corp 14.5

15 Raycom Media 12.5

16 Liberman Broadcasting 11.2

17 Local TV LLC 10.8

18 Cox Media Group 10.4

19 Scripps Television Group 9.8

20 Meredith Local Media 9.1

21 Richard French Stations 9.1

22 Newport Television 8.8

23 Nexstar Broadcasting 8.6

24 LIN Media 8.5

25 Media General 8.4

26 Post-Newsweek Stations 7.4

27 WLNY 6.5

28 Gray Television 6.3

29 Granite Broadcasting 5.6

30 Young Broadcasting 5.4

Source: TVNewsCheck at:

Many of the TV stations they own operate in the same market and so overlap with others’ footprints.

Aereo in particular has put the local stations in the limelight with its $12 a month OTT service that delivers their broadcast signals over broadband to connected devices with a browser and to TVs connected to an Apple TV or Roku net-top box. It’s like a basic version of basic TV but a) video resolution is higher than most pay TV companies and b) coupled with a couple of $8 a month pay TV services like Netflix and Hulu plus the occasional purchase/rental from Amazon or Vudu makes for a viable pay TV alternative for many consumers.

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Thinkbox Says Linear TV Still Rules in UK

Thinkbox, the marketing arm of the television industry in the UK, has released new and timely data showing that traditional TV still rules video viewing consumption in the UK.

The average viewer watched 4 hours and 1 minute of TV per day between January and June in 2013. Only a small amount of that time, 1.5% in fact, was spent watching content on a device other than a TV set, according to Thinkbox. Viewers averaged 98.5% of that time watching linear TV on the big living room screen. That translates to 3 hours and 58 minutes on average per day are spent watching linear TV. Thinkbox said 89% of linear TV was viewed live during the six months between January and June.

According to Thinkbox research, viewers averaged only 3 minutes 30 seconds per day on devices such as tablets, laptops and smartphones, watching on-demand and live streamed content, using players such as BBC iPlayer, ITV Player, Sky Go and 4oD.

That info is hard to square with BBC’s own iPlayer monthly metrics, which in June reported an average of 7.4 million requests per day from mobile and tablet devices, and measured requests for the TV show “The White Queen” peaked at 1 million during that month.

Thinkbox said it expects more on-demand viewing to move to the TV, as connected TVs become more common.

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Chromecast Causes a Stir, ABI Revises Forecast

ABI Research was forced to revise its earlier forecasts about the net-top box market, after looking at data related to Google’s latest net-top offering, Chromecast. ABI now says the global net-top box and dongle market will surpass 18 million units by the end of the year.

“Google’s Chromecast device in particular sets a new low price bar for the connected CE market and as more applications are added to its library its value to price ratio will continue to grow,” said senior analyst Michael Inouye.

ABI also said the future of content will be drastically impacted by these types of devices. “The amalgamation of pay TV and OTT will become increasingly important, suggesting Google TV’s vision might have come too early but might grow into this role as a bridge or new entrants like Microsoft’s Xbox One might fully realize this unified vision,” said practice director Sam Rosen. “If Sony secures the rights to distribute live cable channels from Viacom, partnerships such as this elude to a content future quite different from the one many are accustomed to today.”

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Ericsson Report: Times Are Changing for TV

Ericsson has released the fourth annual ConsumerLab report that describes new attitudes, behaviors and expectations for TV and entertainment services for consumers.

The report covers research done across the world, in markets in Latin America, Europe, Asia and the US. It found over half of the respondents identified their computers and Internet connections as integral parts of their TV and video consumption habits.

“We are witnessing the birth of aggregated, pick-and-mix TV solutions,” states the report, entitled “TV and Media: Identifying the Needs of Tomorrow’s Video Consumers.” “The quest has begun to become the first easy to use, à la carte TV solution provider that aggregates consumer TV and video needs.”

Get the full report here:

The report says consumers rank a la carte TV offerings as the fifth most important aspect of the viewing experience.

The key findings include:

-Linear TV is for sports, news: VoD is for everything else. “The value of linear TV is becoming more focused on live sports and tent pole events, the report said. It also said social chats and networks were linked to linear viewing. VoD, on the other hand, is being increasingly used as relaxation viewing. “There is decreasing dependency on linear TV channels and the main household television,” the report said.

-Late adopters are adopting: The report said typical late adopters, including viewers aged over 60 years, are now streaming content. The report estimates 41% of viewers aged 65-69 stream content more than once a week from YouTube and other sites.

-User-generated content is popular: Ericsson found 82% of viewers use YouTube or similar services to access user-generated content that spans entertainment, education, how to and instructional videos, and product reviews.

OTT Services Not Treated Equally

The report found transactional and subscription based OTT services each fit differently into consumer viewing habits and schedules.

Transactional VoD, services such as iTunes, Amazon Instant Video, Redbox Instant, Vudu are characterized by the following:

-Not an everyday habit

-Used only for specific content

-24-hour viewing time limit is a “barrier”

While subscription VoD services, such as Amazon Prime, Hulu Plus, Netflix are:

-easy to add to existing entertainment services

-inexpensive and has great perceived value

-available (typically) on many devices

The report said traditional aggregated broadcast services are being challenged by both new technologies and technically advanced consumers. “Emerging models are therefore likely to involve an even mix of consumer and market forces,” it said.

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30% Still Don’t Have Broadband at Home

About 30% of US adults still don’t have broadband at homes, down from 34% last year, according to research by the Pew Internet & American Life Project. Pew called the increase “small but statistically significant.” We say the 30% is not good because people in those households are barred from modern life’s opportunities, such as applying for jobs, and pleasures such as watching Netflix and YouTube.

It said those with higher education are more likely to have broadband access at home. Duh! Almost 90% of college graduates have broadband but only 37% of those who did not graduate from high school.

Pew did not include people with a 3G or 4G smartphone as having a broadband connection.

It said about 10% of Americans don’t have broadband at home, but do have a smartphone.

“Including smartphones in our broadband definition actually exacerbates differences in broadband adoption rates between young and old,” Pew said. “Looking just at our standard definition of home broadband adoption, we find that 80% of young adults ages 18-29 have a high-speed broadband at home, compared with 43% of seniors ages 65 and older—a gap of 37 percentage points. If we include smartphone ownership in our definition of home broadband, this gap actually increases to 49 percentage points, because young adults are more likely than seniors to own smartphones as well.”

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Imagine: A Pay TV Operator Giving away Antennae

You would think local TV stations would be the ones giving away antennae so people could watch their OTA channels. In a sign of the turmoil the industry is in, it’s a cable TV company, Time Warner Cable (TWC), that’s giving away antennae to about three million of its subscribers that are unable to watch CBS broadcasts because of a dispute between CBS-owned TV stations and TWC. By-the-way: the antennae will also pick up signals from all the other local channels including some that are not available on TWC. The move might start some people asking, “What with all the local TV channels for free and low-cost OTT services like Netflix, Hulu and iTunes, why do I need pay TV?”

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Why the Pay TV Bill Keeps Increasing

The New York Times reports: “Today, nearly 100 million households pay about $5.54 a month for ESPN, regardless of whether the subscribers watch it or not, whether they realize it or not. This year, ESPN will take in more than $6 billion in subscriber fees.”

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Microsoft’s Problems Started Long Before Ballmer Took Over

The billion plus dollar failure of Surface tablets probably did not by itself cause Microsoft CEO Steve Ballmer to resign but it was certainly the straw that broke the camel’s back. Many years ago the then Microsoft CEO Bill Gates abruptly turned the company from standalone PC-centric to an Internet powerhouse. However, Microsoft’s problems started long before Ballmer replaced Gates, who showed up at CES for many years with a tablet-like device he called a slate but was unable to ever get it to market, something that then Apple CEO Steve Jobs did so successfully. Gates has said he is not taking over, not even temporarily, for Ballmer as some had hoped would become a Steve Jobs-like return to greater glory.

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TV Networks Will Adjust to New Technologies

“Aereo has an antenna for every single customer. Over time we’ll realize that’s ridiculous. The [national TV] networks are always looking for new ways to monetize their content. They will adjust to new technologies as quickly as possible, but you can’t expect them to just give up their revenue with every disruption.” – Richard Bullwinkle, head of television innovation on Samsung’s U.S. product innovation team in an interview with FierceOnlineVideo at:

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Amazon Thinking About Launching Instant Video in Russia

Amazon has applied for the brand Amazon Instant Video to be registered with the Russian patent office, according to The Hollywood Reporter. The Russian OTT space is blossoming at current, with three main services, IVI, Stream and Tvigle, offering Hollywood fare, ad-supported content and subscription on-demand content. Amazon had earlier announced it would be opening up an office in Russia in order to sell e-books and Kindles.

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Delta Takes 19,000 Windows 8 Phones

There is a big market for Windows phones and tablets: the corporates. Delta Air Lines has signed a multi-year deal with AT&T to supply more than 19,000 Delta flight attendants with Nokia Lumia devices that have Windows 8 and Microsoft’s Dynamics mobile point-of-sale platform. It operates over Wi-Fi and AT&T’s LTE network for functions such as in-air credit card validation.

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Hulu Signs New Series from Lionsgate

Hulu is teaming up with Lionsgate for a new original series, Variety reports. Hulu has signed up for 10 episodes of a new scripted series, called “Deadbeat,” produced by Brad Pitt’s production company Plan B and Dakota Pictures. The show’s creators include Brett Konner of “Wilfred” and “The Inbetweeners,” and Cody Heller, also of “Wilfred.

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Samsung’s Galaxy Tab 3 to Come in Kids Edition

Every market sector may eventually get its own version of a tablet. Samsung’s new Galaxy Tab 3 Kids is a brightly colored tablet that comes with apps for kids and access to a new Kids Store and access to YouTube. It said it’ll start shipping them in Korea in September but did not provide details. The Tab 3 Kids even has a “time out time feature” that lets parents set a period of time for using it. Hardware wise, it has a 1.2 GHz dual processor, 1GB RAM, a three megapixel front-facing camera, 1.3 megapixel rear-facing camera and Wi-Fi.

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LG to Launch Mini Tablet

LG is expected to announce a new tablet called G Pad 8.3 in September but details are scarce. A YouTube video indicates that it’s thin and light enough to carry outside the home. If so, it will compete against the iPad Mini and Nexus 7 tablets. See:

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The Online Reporter 842 – August 23-29, 2013

Issue 842       

August 23-29, 2013

Front row seat to digital media history since 2003

This is an archived edition, for the latest copy and a chance to evaluate current analysis, please write or register for a four week no-obligation free trial



   Why TiVo Should Phase out DVRs

   iMediaShare App Streams Content to the TV

   Razor Thin Margins Threaten PC Makers




   Sony Beats Samsung, LG to Market with 4K Sets




   The Future of Media Delivery Is OTT

   Content + Broadband Subscription Packages Entice Cord Nevers

   Multi-tasking Apps Split Eyeballs on Mobile Devices

   Sony Could Become World’s Largest Broadband-Delivered Pay TV Service

   Netflix Expands Scholastic Material Ahead of New School Year

   ESPN Eyeing OTT Services

   Maker Studios Purchase Blip.TV

   The Two Most Under-Marketed OTT Services

   Wuaki.TV Launches on Samsung Smart TVs




   The CW Launches Digital Studio and New Web Series

   Yahoo Builds Anticipation for Its Fall Season Web Series Line-Up

   Which OTT Service Will Be First to Offer Live Sports Exclusively?

   HuffPost Live to Add Scheduled Programming to App






   Tablet Fever Rises Ahead of Fall Launch Season

   Love My Pro? Then Love My RT!


            BROADBAND BEAT


   Wireless Is Key to China’s Universal Broadband Plan




   HEVC Coming Faster Than Anyone Expected

   UltraViolet Gets Backing from JB Hi-Fi




   TiVo’s New Roamios Missing 11ac

   AirTies Selects Quantenna’s 11ac Chips




   Students Want Tablets; Teachers Too

   Apple Shipping More iPads in China But Losing Market Share

   US Still Not a Connected Nation

   Studios May Launch OTT Services

   comScore: Americans Watched 48B Online Videos in July




   Surely Apple TV Sets Will Be 4K

   LG’s New Display for Smartphones Exceeds 1080p

   Wireless Networks May Be First to Adopt HEVC

   Samsung Releases Smartphone with TV Antenna

   Com Hem Launches 500 Mbps Broadband in Sweden

   Korea Telecom Launches OTT Service

   Apple TV Gets New iTunes Festival Channel

   Fox Sports: ‘A La Carte Is a Fantasy


THE ONLINE REPORTER is published weekly by Rider Research; 13188 Perkins Road; Baton Rouge, LA 70810, USA Telephone: 1-225-769-7130; Fax: 1-225-769-7166;


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Why TiVo Should Phase out DVRs

– Like Netflix Did out of DVDs

– And Offer a Full-Blown Pay TV/OTT/OTA Box & a Cloud-Based DVR

– Intel, Sony, Apple, Microsoft & Google Will Be Its Future Competitors, not Makers of DVRs


TiVo’s greatest strengths are no longer its set-top DVRs and DVR technology. Its advantages go far beyond its technology edge and patents on in-home DVRs, which is where the company started, and which allow it to offer devices whose three major advantages are:


– The best combination pay TV/OTT device because it a) offers mostly all popular OTT services and c) it treats them all — pay TV, OTT, DVR and OTA — as one source when it performs search and recommendations. It can now deliver something for which current and would-be OTT net-top boxes can only hope.


– The only OTA/OTT device


– The only pay TV/OTT/OTA device


Its new Roamio DVRs provide a glimpse into how the home video industry is rapidly moving toward an OTT world and how local broadcast stations can play an important part. The big difference between TiVos and the DVRs that the pay TV services offer is that the TiVo service erases the dividing line between TV (both pay and free) and OTT services.


TiVo’s New Roamio DVR and Mini Whole-Home Adapter


When a user does a search, TiVo looks at all its available sources: pay TV, local stations, OTT and its DVR. When TiVo makes a recommendation, it has also looked through all available sources. If it finds a show on:


– A subscription OTT service such as Netflix, the user can start watching with a couple of clicks if they have a subscription.


– A pay TV or local station, the user can watch it if it is already being aired or record a future airing.


– A purchase/rent OTT service, the user can pay up and start watching.


– Its DVR, the viewer presses play and starts watching, either from the beginning or from the point it last left off – even if that was being viewed on a different device.


For example, when a user looks for “Breaking Bad,” TiVo looks for episodes on pay TV, on OTA channels, on OTT services and on its DVR.



TiVo Searches All Available Sources



TiVo Discovery


Roamio lets users customize the on-screen guides so they show, for example, only movies or even just comedy shows or perhaps sci-fi. Other selections include news, sports or shows for the kids.


To the best of our knowledge, no pay TV service in the world provides all of those functions. In fact, of all the OTT net-top boxes, only Roku searches all of its sources and even it hides the feature way down in its menus.


In-Home Streaming, Out-of-Home Viewing


TiVo allows users to stream some shows to portable devices within the home and to copy some recorded shows to them for viewing outside the home. It’s not a “sling” approach like Dish’s Slingbox, so when away from home, users can only watch shows they transferred before departing. The streaming feature is included in the two top-end Roamios but the $130 TiVo Stream box must be purchased separately for the low-end model, which is the only one that receives and records local TV channels.


TiVo said that in the future it will upgrade the Roamios so that they can “sling” content directly to mobile devices that are outside the home. Users will then be able to start a video from an OTT service on an iPhone or iPad and the TiVo will begin streaming the video. Initially, the two top-end Roamios can only stream to two Apple devices that are on the home network. By November, TiVo will add the out-of-home streaming at no additional cost so users can watch live pay TV, OTT and recorded shows on an iPhone or iPad anywhere there is a Wi-Fi connection.


TiVo said not all content can be streamed out-of-home and some content can only be streamed while a mobile device is on the same local Wi-Fi network as the subscriber’s DVR. Content owners restrict access by inserting a “do not copy” flag, which TiVo recognizes and honors. Dish Network’s Slingbox does not.FOX asked a federal court to force Dish to disable the Sling-enabled features of its Hopper DVR but the court denied the request.


The new and prior model TiVos can be used as whole home DVRs by adding $100 TiVo Minis for each additional TV set and paying $6 a month per Mini. Minis perform all the functions that the big TiVo does.


TiVo’s OTA Advantage


TiVo has a major advantage that none of its coming competitors yet have as far as we know, whether Apple, Intel, Google, Sony and Roku. It can receive and store broadcasts from local TV stations that users can access with an antenna that costs less than $100. It can already do on a nationwide basis, and legally, what Aereo and Film On are doing: deliver all the local TV stations to owners of its DVRs, at least its low-end DVR.


TiVo says the video resolution that local stations use to broadcast their main channels (NBC, CBS, PBS, ABC, FOX) are even higher that what pay TV subscribers get. Additionally, each local station broadcasts one or more additional channels although they are not in high-def. local stations are also tinkering with broadcasting mobile TV for viewing on moving devices like smartphones and tablets. If and when they ever roll that service out, it seems certain that more consumers will take to local broadcasts.


TiVo does not offer the OTA service on its two high-end DVRs, which probably means it’s not selling many of them. It could also mean that OTA fans want the least expensive option.


With the proliferation of OTT services and the exploding amount of content they offer, a service like TiVo could prosper by offering only OTT apps and local channels. TiVo says that 80% of the shows that its users record are from locally available broadcasts — no pay TV needed.


In these — unified search and recommendations, OTA, streaming and whole-home DVR — TiVo comes closer to being an ideal OTT/OTA product and service than any other product or service on the market. Reports are that Intel is concocting a similar set-top box and service but with the DVRing being done in the cloud instead of in the STB. That makes sense as it appears that putting a larger and larger pricey hard disk in every home makes less and less economic sense — and is less reliable than the cloud. Content stored in the cloud could be accessed from any device anywhere and at any time.


The difference between TiVo and Intel is that TiVo already has all the capabilities and is deploying them now. However, TiVo’s focus on the in-home DVR market is holding it back from achieving maximum success.


There are certainly rights issues that will have to be sorted out but TiVo has had a lot of success with legal matters.


The Three New Boxes















HD Hours




















$99 extra


Roamio Plus

















Roamio Pro

















There are three new models, the differences being:


The number of tuners determines the number of channels it can record and/or the number of Minis it can support simultaneously.


All models have a CableCARD so they can be used with any cable TV service. They also are compatible with Verizon’s FiOS pay TV but not with DirecTV, Dish, AT&T Uverse or other telcos’ pay TV.


The basic $200 model can also work with an OTA antenna and receive and record all local TV channels.


All three models have built in Wi-Fi. The Plus and Pro have MoCA networking built-in so that an external MoCA connector is not needed as is the case with the basic model.


Technology wise, the Roamio boxes use transcoding chips from Zenverge, which delivers variable bit rate MPEG-4 video to client devices at speeds up to 2 Mbps. The Broadcom multicore processors are said to increase performance by an average of 1.7 times, which TiVo said means faster browsing and searching. It helps launch the Netflix app much faster, cutting the average launch time from 30 seconds to less than 10 seconds.


The basic Roamio requires a separate $99 TiVo Stream to stream live and recorded video to mobile devices. The Plus and Pro have the Stream’s functions built in. All three models allow users to copy recorded videos from the DVR to their mobile devices to watch anywhere. Streaming and copying are still limited to iOS devices but TiVo promises it will soon support Android devices.


There are, however, restrictions. TiVo says, “Streaming is restricted to a limited number of devices owned by the TiVo subscriber. Due to content provider restrictions, not all content can be streamed out of home and some content may only be streamed while a mobile device is on the same local network as the subscriber’s DVR.” It’s not clear which networks and programs will be restricted.


The Wall Street Journal technology guru Walt Mossberg said, “The TiVo could be considered the holy grail of set-top boxes. That’s because it combines the functions of a cable box, a DVR and a device for receiving Internet-video services like Netflix, Amazon, Hulu Plus and YouTube. You don’t need to change TV inputs or buy another box, like an Apple TV or Roku, to view these big four Web video services.” See:


What’s missing? Not much, once it adds streaming to remote devices via Wi-Fi and/or cellular connected devices (the Sling function), which TiVo says is coming by year-end.


TiVo said existing Premier units will be upgraded to the new software via an automatic update in the near future, probably in the next 90 days. It has also added the Netflix app to the Mini. However, Walmart’s Vudu is still not available on either the DVR or the Mini, evidently due to lack of demand.


TiVo Should Forget the In-Home DVR


TiVo’s market where customers buy at retail instead of through a pay TV service appears to be at perilous stage. It has about 1 million direct subscribers that have purchased TiVo branded DVRs but that’s down 14% over the past two years. In 2006 TiVo had 4.4 million direct customers, its high point. That trend is continuing. In its Q1 TiVo reported that pay TV services that offer its software added 277,000 subscribers but its retail customer base declined by 22,000. That has damaged TiVo financially because each retail user pays $15 a month or a $495 lifetime fee in addition to the purchase price of the box.


TiVo seems most like Netflix when Netflix only had the DVD subscription business. The question is: how does TiVo transition from where it is to a juggernaut just as Netflix successfully transitioned to become the most successful OTT subscription service? How does it get from being just another DVR maker like Cisco, Technicolor, ARRIS and Pace to being a highly successful, full-blown OTT/OTA/Pay TV provider and keep raking in $15 a month from every customer?


  1. Bet on the cloud and drop the built-in hard disk. That’ll reduce the price it charges for its hardware and perhaps more importantly make all of the user’s recorded content available on any device anywhere.


  1. Work with the pay TV companies and content owners to make all their broadcast content available for streaming and copying to portable devices.


  1. Add more OTT apps. Become more Roku-like in that regard. It’s certainly what Apple, Google, Microsoft on its Xbox and Sony on its PlayStation are doing. Intel is no doubt thinking along the same lines — at least we hope it is. TiVo’s big advantages over them are many and it has them all today.


If TiVo offered a $100 or so net-top box that has a) all the local TV stations, b) all the OTT services, c) the ability to serve as a whole home DVR, d) would let users stream to their mobile devices and e) offer a cloud-based DVR that could be accessed from anywhere, would you buy one? TiVo could still charge $15 a month, maybe $20 or even $25 a month for expanded storage on the cloud.


TiVo’s alternative is to continue on its current strategy, which is to work with pay TV companies to add TiVo technology, software and services to help them compete against the growing wave of net-top boxes and services that technology companies and start-ups are launching. It currently licenses its technology and services to such as DirecTV, Comcast and Virgin Media. TiVo also sells its Premiere line of DVRs to pay TV operators such as Charter, RCN, Suddenlink and Grande Communications. They selected TiVo over rival DVRs from other STB makers. It’s assumed the pay TV companies will soon switch their orders to Roamios.


Apple, Sony, Intel, Microsoft, Google, Roku, Aereo, FilmOn and other broadband-delivered video services will be TiVo’s competitors in the future, not the non-TiVo DVRs that pay TV services are shipping. That means TiVo needs to position itself as primarily a full content delivery service with lots of content services, not just another maker of DVRs, a course on which it is already embarked but has not yet completed.


The third possibility is for TiVo to be acquired by a major technology company that wants to be a major player in pay TV and OTT.

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iMediaShare App Streams Content to the TV


-Movies, Web Content and Linear TV


-Streams to over 7,500 Connected TVs and Devices


-7 Million Installed Base


iMediaShare is an app that is available for iOS and Android tablets and phones that enables viewers to stream content to a connected TV set. The app offers a solution similar to Google’s Chromecast or Apple’s Airplay – though the mechanisms between the three are, of course, completely different. For the end user, however, it kind of feels the same: pick a video to watch on the tablet or smartphone, then select which screen on which to watch the video – ie, the TV set or the mobile device.


“What we’ve seen on connected TVs is that the user interface is always difficult to use with the remote,” Michael Patellis, VP of business development at iMediaShare, told The Online Reporter. This is true for both regular “analog” remotes with up, down, left, right, and the remote control apps that are available to download on smartphones and tablets. “You have remote controls that are hard to navigate through content, find content, and then when you’re using a remote control app it takes up the whole screen,” Patellis said.


The iMediaShare app enables viewers to browse videos from a variety of Web and subscription-based sources, and stream content to almost any TV connected to the home Wi-Fi directly using the handheld device.


Watch a demo of the app here:


The app is free for iOS and Android devices. Patellis said the app has a 7 million-strong installation base, and the app boosts of 1.5 million active users – defined as those who use the app twice a week or more. “We continue to add about 20,000 installations per day,” he said. Patellis also mentioned that iMediaShare has some of the highest user ratings among “stream-to-the-TV” apps, such as Twonky.


iMediaShare Piggy-Backs on Other Internet Devices


iMediaShare doesn’t require an additional net-top box or TV dongle to work. “Nothing has to be installed on the TV, no hardware, no cables, no adaptors, no software, no mobile apps on the TV,” Patellis said.


To be clear, the TV does need to be connected to the Internet, so it either must be a smart TV or the viewer must already have an OTT device. iMediaShare doesn’t require its own device, which is convenient as home entertainment centers are becoming increasingly more cluttered with devices, dongles, players and DVRs. And lots of wires.


Patellis said iMediaShare is able to work on over 7,500 models of smart TVs, Blu-ray players, net-top boxes and gaming consoles – including Apple TV, Xbox 360 and Sony’s Playstation 3. “That equates to a total global of about 800 million devices that we can take over,” Patellis said. Missing from that list is Roku, which Patellis said uses proprietary implementation of its technology, and Google’s Chromecast. Patellis said the company has support implemented on its side, but is waiting for Google to release official third-party support to the public.


In order for the app to work on the Internet-connected TV, the viewer only needs to make sure the TV is turned on. “It automatically takes priority over the TV,” Patellis said. “So let’s say you were watching a DVD or you were on HDMI 1 or 2, it will automatically take over the TV and start streaming the content.


The app doesn’t mirror content on the tablet or smartphone like Airplay does. iMediaShare utilizes DNLA and UPNP to communicate with the TV. The content selected on the app is actually streamed from the cloud, not from the device, which means the viewer is able to use the device for more multi-tasking while the video streams from the cloud to the TV set.


With Chromecast, the viewer is able to multi-task with the device once the stream starts, but using Airplay, the tablet or smartphone must remain dedicated to the stream, because the video is also playing on the device.


Content Sources Span Web, Movies and Linear


The iMediaShare app supports between 80 to 100 content sources to stream to the TV. The app is available globally, so some of the content is geo-restricted or geo-blocked, depending on the licenses. Content that can be streamed to the TV is grouped into topics such as news, sports, music, movies, kids’ entertainment, fitness and humor.


Content sources include Animal Planet, National Geographic Wild, Showtime, Showtime Sports, BBC News, BBC Sports, Sky News, NBA News, NFL News, Vimeo, College Humor, The Onion, YouTube, Washington Post, Time, The Weather Channel, Dailymotion, Funny or Die, Discovery’s Revision3, The New York Times, Sony’s Crackle, movie service Wibi and many others.


Most of this content is free Web content. Patellis said some of the content sources are subscription-based and others, such as Wibi, are pay-per-view.


That’s a significant amount of content. Chromecast, by comparison, is currently supported by a handful of apps directly, but users are able to mirror anything in the Chrome browser, although the quality of the stream is significantly worse. Airplay, on the other hand, is able to stream video reliably from a large number of apps, although sometimes Airplay is only able to stream audio, not video, and there is a bit of guesswork involved.


Patellis said iMediaShare is aggressively pursuing more content sources, and is looking at adding more linear live streaming content as well. iMediaShare added support for linear channels a few months ago.


“Right now we have three linear channels; those are all European new stations,” he said. “The US market has been a little bit slower to adopt this technology, but it’s progressively becoming more receptive, and we’re in advanced discussions with some big names about adding linear content.”


The app also streams personal digital media to the TV set. Users can sign in to Facebook and stream any videos or photos on the account to the TV set. Users can also access personal media kept on smartphones, tablets or on a network-attached storage box.


Unfortunately, that doesn’t extend to movies or TV shows downloaded onto personal devices. “A movie you’ve officially purchased and downloaded, those are encrypted to the point where it can only be played on that particular device,” Patellis said. However, viewers can watch movies from Crackle in an ad-supported format, and Wibi via a one-time charge.


A Balance of Lean Forward and Lean Back


There are two selling points for the iMediaShare app. First is the content: as far as moving Web content from a handheld device to the TV screen, the app offers a wide selection of Web content, including favorites YouTube and Vimeo.


Chromecast and Airplay have an advantage here as they can stream Netflix and other movie sources to the TV.


The other benefit of the app is the navigation. It’s much easier to search and discover content on the handheld device than most interfaces used on connected TVs. Navigating through Web content on a regular up-down-left-right remote is a hassle. The iMediaShare app takes a mobile video experience, and transfers it over the TV very well.


The iMediaShare app is also delivering a fairly lean-back experience. The app acts as a Web content programming guide of sorts, as it contains all of the content available to stream to the TV. The viewer can browse and select videos from those lists. After a video has been selected, the app will play a series of videos in a playlist format, and viewers have the option of turning on or off a shuffle feature, giving them a nice balance between lean forward and lean back interaction.


Razor Thin Margins Threaten PC Makers


A major problem for Intel, Microsoft and their PC makers is shown in Dell’s recent quarterly statement. It is getting ever so much harder to make money at selling PCs, especially as tablets and smartphones cut into unit sales of PC. Dell’s operating margin on PCs fell to a negligible 2% from 7%, so low that one medium-size blunder, such as in pricing or ordering the wrong inventory mix, would put it in the red.


Dell’s operating margin on enterprise gear fell to 4% from 5%, also a problem waiting to happen. Sales of servers are booming to support all those tablets and smartphones being sold and to run cloud-based services.


Dell’s plan is to increase profits by making more from the services it sells the corporates. Dell’s margin on services was 16%.


As Dell cuts its margins on hardware, it will cause other PC makers such as HP and Lenovo to follow suit, which raises the question: how long can Intel and Microsoft maintain their high margins on chips and operating systems? Neither company receives any revenue from the services that the likes of Dell and HP sell. Both are almost totally dependent on PCs despite both trying repeatedly to become successful in tablets and smartphones.

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Sony Beats Samsung, LG to Market with 4K Sets


– Samsung in about 100 Stores


– LG Coming in September with ‘Basic’ Line of 4K Sets


Sony has beaten its competition, specifically arch-rival Samsung, to the punch with 4K TV sets. They are already on display in Best Buy stores.


Temporary hired hands from Sony are occasionally in some Best Buy stores to demonstrate Sony’s 4K TV sets and answer questions. It’s an impressive demonstration. The Baton Rouge store had a 55-inch model on display. Even though it’s $4,999.98, it’s very, very tempting to buy one, especially when the Sony rep explains that all 1080p HD from any source — Blu-ray or pay TV — upconverts to 4K. That means all existing Blu-ray discs can be played in near 4K appearance so there’s no shortage of “4K” content.


The 65-inch Sony 4K set is $6,999.98 but was not on display.


The product demonstrates beautifully. The demo video shows both 4K content as well as 1080p content being upconverted to 4K. Trailers for two 4K movies are included. Scenes of mountains, deserts and oceans are strikingly vivid. Excerpts from a football game (not the American game) were so clear you could see tiny details of people in the crowd. It also does not matter how close to the screen you get because details remain unblemished and pixel-perfect.


Best Buy stores do not stock 4K sets but ship them from a warehouse.


One caveat, according to the Sony rep that was demonstrating the day we saw it, is that many cable TV stations are still broadcasting some channels in 720p, which do not upscale to 4K. He said that all the telcos and satellites’ pay TV channels are already in 1080p and that cable TV companies are upgrading all their channels to 1080p.


The Sony rep recommended that the shopper not buy the 4K Ultra HD Media Player, which retails for $700. The Sony units are, of course, smart TVs and come with lots of apps.


On a trip to Best Buy the following week, a Samsung employee was demonstrating a top-of-the-line 1080p HD set but simultaneously watching to see who was watching the Sony 4K demo. Asked about Samsung’s 4K sets, he said they are in about 100 stores but didn’t say they were all Best Buys. The 55-inch Samsung 4K set, the UE55F9000, is $5,499.98 and the 65-inch set is $7,499.98, but according to the Samsung rep, it has some features the Sony 4K set does not:


– Speakers with slightly more watts, but that may not matter because most of the early purchasers have surround sound systems.


– HEVC chips will make it faster to download 4K streams because they are more compressed and so use less bandwidth.


– A modular design allows it to send components to owners for “quick and easy” upgrades.


– Narrower by 8-inches than the Sony because the Samsung has its speakers below the screen whereas the Sony has speakers on each side.


– Gesture control.


– Samsung’s SmartHub appears to have every app one could want on a TV set including all the social media ones.


– Instead of putting all the connections on the rear, Samsung instead puts most of them on a long, thin box, which has four HDMIs, three USBs, LAN and built-in Wi-Fi. It connects to the TV set with a proprietary cable.


Each of the two Samsungs is $500 more than its Sony counterpart. LG’s upcoming “basic” models, reportedly available in October, match the Sonys in pricing.


Display size








Sony 55-inch








Samsung 55-inch








LG 55-inch








Sony 65-inch








Samsung 65-inch








LG 65-inch








LG 84-inch








Samsung and Sony prices are as listed by Best Buy, which quotes delivery at 3-5 days.


The LG prices are for what it calls the basic 4K models, which it is expected to start shipping in October. They differ from LG’s current 4K sets by having a 2.1 channel built-in audio instead of the current model’s 4.1, not having a built-in camera and priced $1,000 less. They also have HEVC from decompressing videos that have been compressed to reduce bandwidth usage.


Both Samsung and Sony’s 4K sets come with four sets of 3D glasses; LG’s with six sets. Initial reports are that 3D looks better on 4K sets than on 3D-only sets.


Best Buy recommends that purchasers of either company’s sets pay $250 to have someone deliver, install and tune the set.


Which one to buy — Sony, Samsung or LG? That’s a tough call. If you’re one of those that absolutely cannot wait, it’s Sony because it’s available now. For shoppers that like to compare, it’s best to wait until October when the 4K sets from Sony, Samsung and LG will be in the stores.


Just seeing the video quality of Sony’s 4K will seriously tempt all videophiles to buy one now to a much greater degree than 3D sets ever did.


The Chart That Will Launch a Thousand Discussions


This chart appears in the new report “The Faultline Revisited – Disruption in Video Delivery from 2013 to 2023.”


For prices and a free extract from the report, please email


The 63-page report focuses on six major issues that will have the greatest effect on video infrastructure:


  • TV will shift to OTT streaming


  • Wi-Fi will become the leading wireless network for delivering content


  • Some 75% of TV viewing will shift to tablets, savaging sales of TV sets forever


  • Massive social viewing platforms will lead major motion picture releases


  • Unbundling of pay TV channels will lead to the death of 75% of TV channels


  • TV Everywhere will become the world’s largest app


The report is vital reading for anyone in every business layer of video and content delivery that doesn’t want to be caught in the crossfire and wants to build a strategy to survive and thrive in the ensuing eco-system.


To receive prices and a free extract of the report, please email a request to:


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The Future of Media Delivery Is OTT


-Reliable Streams, Device Fragmentation Remain Obstacles


A webinar hosted by Elemental this week focused on OTT and the future of media delivery. The panel of 5 represented a number of stops along the workflow that delivers content over the Internet, including Verimatrix, which does content security over IP, and VisualOn, which addresses multi-screen delivery.


The panel, hosted by VP of marketing at Elemental Keith Wymbs, focused on obstacles and strategies for successful OTT services, and panelists made the case for future opportunity in the OTT space for service providers.


Obstacles Facing OTT Delivery


One of the largest obstacles facing OTT delivery and multi-screen offerings is still rights management – not technology. Part of the challenge in rights management is ensuring the content is secured when it’s delivered over the Internet.


“Any change or new technology you need to prove its validity to the people who license content,” said Steve Christian, VP of marketing at Verimatrix.


Verimatrix began with telco companies looking to get into pay TV with IPTV. The challenges IPTV providers faced centered around delivering video over IP securely, without smart card technology.


“Security issues we’ve always had to deal with in the traditional and IPTV space now start [to] become more and more relevant in the multi-screen delivery – particularly as you get higher and higher value streams,” Christian said. “That now becomes even more relevant as we spread out across a spectrum of applications, where we’re seeing our operators around the world are combining traditional broadcasting cable and satellite channels with IP in terms of the hybrid delivery spectrum.”


Christian said that while in terms of technology there are some similarities between IPTV and OTT delivery, the big challenge is that there are many, many more devices in OTT, — and those devices are owned by the consumers, not the service providers.


Fragmentation among Devices


The sheer volume of unique devices that can now handle content is staggering, and the panel agreed this poses a huge challenge for service providers looking to deliver a multi-screen service.


In mobile devices, Android is a significant challenge because, as Deepak Das, senior director of marketing at VisualOn said, manufacturers make their own flavors of Android.


Mobile devices are just one of the myriad devices now capable of handling Web-delivered video, from laptops, tablets, smartphones, net-top boxes, gaming consoles, Blu-ray players, DVRs such as TiVo and smart TVs.


“This fragmentation is new, especially from the media delivery perspective, and it’s only going to increase,” Das said.


Service providers are tasked with delivering a consistent experience across devices and networks. Fragmentation occurs among devices, form factors, operating systems, and in terms of the streaming protocols and platforms each of these devices supports.


It’s no coincidence that VisualOn was present at the Webinar; this is exactly what VisualOn specializes in. [For more on VisualOn, see TOR823].


“We’ve seen a demand for addressing how to deal with the fragmentation in this field,” Das said. “It becomes imperative for [service] providers to find a model that’s scalable for them, and therein lies the software framework that enables content delivery across a wide set of connected devices.”


Assets on Which OTT Services Need to Capitalize


The panel outlined a number of assets that will be tantamount to a successful OTT service. “There are very few players in the industry who have all of these, and if they can manage those assets properly, I think they will be successful,” Das said.


Those assets included:


-Reliable delivery: “When you’re using Internet-delivered video as a direct substitute for broadcast video, all considerations are about reliability,” Christian said. The video quality needs to be great, the sound quality needs to be great, and there can’t be any buffering or pauses. The experience of streaming content needs to be the same as the experience of watching linear TV. “For IP delivery or OTT to get to that level of wide acceptance in the marketplace, they’re going to have to think hard about the quality of experience,” Das said.


-Device spectrum: Consumers shouldn’t worry whether or not the content will perform on the platform they have chosen to view with, and consequently, the content needs to be able to perform consistently on any and all platforms. OTT service providers need the ability to target end-user devices. Netflix has done a great job of getting its apps on every device possible and usually releases an app at the same time as a new product launches. Any service provider looking to offer a successful OTT service needs to have the ability to address device fragmentation. For a recent example, look at Chromecast: Netflix was one of three services that supported Google Cast right out of the gate. Now, other OTT services are scrambling to add Chromecast support to their apps.


-Already have a relationship with customers: Das said he believes a successful OTT service needs to have a pre-existing relationship with a large subscriber base. This was certainly true with Netflix, who had a large DVD rental business before moving over to streaming, as well as Redbox Instant, which is riding the coattails of the very popular Redbox DVD rental kiosks. But that alone doesn’t spell success. Amazon Prime is a great example here: the company certainly has an established customer base outside of its subscription OTT service, but that hasn’t translated into Amazon Prime subscribers. This can be attributed in part to the limited device reach it has.


-Content: On-demand content is obviously an important component of the OTT space, the panel agreed that OTT services should and will start looking more at linear content offerings. Christian said he doesn’t agree with the presumption that live linear TV becomes less important as viewers have access to more on-demand content. “I tend to think that is a little over stated,” he said. “Sports, reality TV, even social TV – social TV really only works in a linear delivery format. There’s quite a bit of live content that still brings people around the water cooler.”


Will OTT Swap Places with Linear in Terms of Watching?


Keith Wymbs, who moderated the discussion, asked panelers to react to a rather bold chart from The Diffusion Group that predicted a crossover point of OTT and linear swapping places sometime around 2020.


Wymbs said he believes the slopes of the lines are directionally correct, while a few took issue with the crossover prediction date. The panel did agree that the chart demonstrated opportunity for service providers.


“Prognostications of disaster and doom and gloom in the traditional video industry, against that background with overall increased consumption, [but] there seems to be greater opportunity for even the traditional players to be able to take on more, with a different delivery strategy, and still be king of the hill in terms of service,” Christian said.


Das agreed and said the crossover will only occur once OTT services can be properly monetized. “I wouldn’t view this as negative, for the industry overall,” he said. “It’s a positive shift because it represents more devices and more endpoints, so the key question remains as to how the industry will monetize it.”


For more information on Elemental Insights Webinars, visit


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Content + Broadband Subscription Packages Entice Cord Nevers


-Cox, BT and Get Pave Way


Norwegian cableco Get has joined the small and growing group of pay TV operators that are launching over-the-top pay TV services – what we call pay OTT services – tied to broadband subscriptions. Get launched a service that delivers 28 of its most popular channels over the top to iPads. The service comes free with a broadband subscription.


This type of model, which pairs limited content with a broadband subscription, is one that only a few innovative providers are launching to battle OTT services and keep customers happy.


The model already has a few experiments in the market. BT recently launched a service for its broadband subscribers that offers sports programming; Cox Communications in the States has also launched an OTT service called flareWatch that is between $30 and $35, in addition to a 10 Mbps down broadband subscription.


The content-broadband service looks attractive to cord nevers because:


-Fast broadband: No brainer here for attracting cord nevers. The fast broadband (10 Mbps or faster) adds value to the service because consumers interested in this tier will be interested in fast broadband for the myriad other activities they do online – not just shopping or emailing, but multi-tasking, streaming video to more than one connected device at the same time. Of course, those speeds will be necessary for delivering the content over-the-top for a reliable stream, flicker-free, without buffering. However, access to the content mustn’t be limited to the in-home broadband network.


-Fewer channels, better channels: Get and BT have this down: offer subscribers quality over quantity. Get is offering only its most popular channels, and BT is offering a highly coveted sports programming package. Cox is offering 90 channels in total, including the hallmarks of the basic cable package.


-Lower cost: A low-cost tier is arguably the best way to snare the cord nevers and stop the cord cutters, as most studies show cord cutters and cord shavers, as well as cord nevers, find price prohibitive in pay TV subscriptions.


-Multi-screen access: another no-brainer to entice cord nevers. Make sure the OTT service is truly OTT, as in, can be accessed anywhere, any time, on any device.


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Multi-Tasking Apps Split Eyeballs on Mobile Devices


-Thanks to ESPN and YouTube


Studies indicate viewers are more focused on what they were watching on smaller screens and mobile devices, but those days may be over soon. Mobile apps are now introducing multi-tasking on the smaller screens. Two apps released this week, one from ESPN and one from YouTube, enable eyeball drift by allowing viewers to do something else while a video plays on a mobile device.


An update to ESPN’s WatchESPN app includes a live feed toolbar that runs alongside the video player. It’s essentially a widget that gives viewers access to player stats, scores for other games, and highlight reels and video clips. That’s right, the viewer can play two videos at once.


The app update is available for iPad 2 and up, and newer iPhones, as well as the TV-connected streaming media players such as Xbox 360 and Apple TV. On a TV set, the multi-tasking feature makes more sense, of course. It’s unlikely that anyone will opt to watch two different videos simultaneously on a phone screen.


YouTube has also enabled multi-tasking on its mobile apps for Android. YouTube rolled out this week a major update to its Android apps called YouTube 5.0, which in addition to a new logo and a new interface, enables viewers to browse videos while another video plays, and viewers can now queue up videos. This update puts the app experience much closer to the Web browser experience. The app will also now enable playlists, another Web-experience that has been missing from the mobile apps. An iOS update is expected to arrive soon.


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Sony Could Become World’s Largest Broadband-Delivered Pay TV Service


– Beating out Intel, Apple, Google & Microsoft


Sony Computer Entertainment (SCE), the division that makes PlayStation (PS) gaming consoles, says it has pre-orders for over 1 million of the new PS4 worldwide. That means it can sign some more content deals like the one it reportedly made last week for some of Viacom’s most popular pay TV channels.


That would mean Sony’s recent refusal to sell off any of its entertainment divisions makes even more sense because Sony has had a plan in place to use its and others’ content to sell gaming consoles as well as 4K TV sets. The last time we checked, Sony Pictures was the world’s largest producer of TV shows — think how many times you see that logo at the end of one — so it has lots of shows to contribute to the synergistic move. If the deal actually happened, SCE will add Viacom’s Comedy Central, MTV/VH1/Palladia music ‘n’ pop culture group and Nickelodeon group of kids and family channels to Hulu Plus, Netflix and YouTube. Quite a bundle to attract subscribers to its PlayStation network, a bundle that Apple, Intel, Google and Microsoft would love to have.


On the other hand, the Viacom deal could be to supply Viacom’s pay TV channels to three other Sony services: Sony Movies Channel (unlikely), which is a pay TV channel that appears on such as DirecTV, Dish and AT&T, to Crackle (also unlikely), which Sony and DirecTV own, but which Sony Pictures runs as a free OTT service, or to Sony’s Bravia smart TVs..


The betting here is that Viacom’s pay TV channels will soon appear on the PlayStations’ Sony Entertainment Network together with Sony-owned TV shows and probably TV channels from other studios such as Time Warner, which owns Warner Bros and HBO, and Disney, which owns all the Disney and ABC TV channels.


The Sony Pictures Treasure Trove


Sony Pictures Entertainment (SPE) is a global giant as a producer and owner of video entertainment. Its divisions include:


– Columbia TriStar Motion Picture Group, which has more than 3,500 titles.


– Sony Pictures Digital Productions, which does animations.


– Sony Pictures Home Entertainment, which distributes Sony Pictures-produced and third-party theatrical and non-theatrical content primarily on Blu-ray and DVD but also digitally.


– Sony Pictures Studios, which has 22 sound stages.


– Sony Pictures Television (SPT), which as Screen Gems (way before Sony owned it) started as the first Hollywood studio to produce TV shows. It says it currently produces and distributes 60 TV shows worldwide and has an enormous library of TV programs. It has formed or invested in international networks with 124 channel feeds in 159 countries reaching approximately 736 million households worldwide. It’s a heckuva a library for a broadband-delivered TV service to have access. A word of caution: Sony may not have the rights to distribute all of SPT’s content on the Web or in every country. Even though it owns the shows, it may have exclusively licensed those rights to other companies. It’s some lawyers’ lifetime job guarantee going through all the contracts, many of which were written before there was a Web.


It is SPT that operates Crackle, a much under-rated and under-promoted free OTT service that offers movies and TV shows.


Sony, a friendly fellow traveler with the other major content owners, is said also to be negotiating for content with Disney, Time Warner and CBS. It seems certain that Intel, Apple, Microsoft, Roku and perhaps even Google have been in negotiating sessions with those same companies.


Sony has an advantage that others don’t have — Sony Pictures. If Sony can pull it off, it will clearly show Sony intends finally to use its content clout to help it sell hardware, much more so than even during the Blu-ray/HD DVD war. It could soon be the world’s largest broadband-delivered pay TV service.


At $400 the PS4 will be a tough sell in homes without gamers. Sony also needs an under-$100 version of the PS to compete against Apple, Google and Roku. It’ll also have to sort out a DVR service for live TV or at least a 7-day or longer catch-up service such as the one the BBC has. Then there’s the matter of the local stations, their national TV networks — NBC, CBS, ABC and FOX, and local content (sports, news and weather) — but that’s a matter for another day.


Sony also owns the music giant Sony Music.


SCE CEO Andrew House said the PS4 will start shipping on November 15 in North America, on November 29 in Europe and will be available in 32 countries for the holiday shopping season. It’ll be interesting to see how many pay TV channels it has.


The Xbox One Factor


Sony’s major competitor in gaming consoles cum net-top boxes is Microsoft and its new Xbox One. As a net-top box that delivers OTT videos, it also competes against Roku, Apple, Google and others, which also offer gaming apps.


The current Xbox 360 already serves up some live pay TV channels such as MTV. To view the channel, Xbox viewers must have an Xbox Live Gold subscription and be authenticated subscribers to the pay TV providers that have a TV Everywhere deal with MTV owner Viacom. Time Warner Cable (TWC) subscribers can use the Xbox 360 to access TWC’s TV Everywhere for channels they are paying for. TWC’s TV Everywhere apps offer access to the 300 or so live linear channels available as part of TWC TV Everywhere service access to TWC’s VoD catalog. TWC also has apps on net-top boxes from Roku and Apple plus some Android devices. Comcast has its Xfinity app on the Xbox 360.


A complete list of Xbox 360 apps are at:




Sony’s PlayStation 4 at $399 will be $100 less than the Xbox One.


Microsoft has said it will start selling the Xbox One in November, which should make for interesting competition during the holiday shopping season.


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Netflix Expands Scholastic Material Ahead of New School Year


Netflix has expanded its deal with Scholastic to bring more educational TV content to Netflix subscribers around the world. Netflix has become the exclusive streaming partner for Scholastic’s popular content, and in fact this deal is the first time Scholastic content has been available in the streaming format online.


Scholastic content will now be available in UK, Ireland, and the Latin American markets.


Earlier this year, Netflix had signed up shows “The Magic School Bus” and “GooseBumps” for subscribers in the US and Canada. “We knew they [those shows] would perform well, but after seeing just how popular they were we decided to expand our relationship with Scholastic and bring these great shows to more of our markets,” said Netflix chief content officer Ted Sarandos.

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ESPN Eyeing OTT Services


ESPN has had exploratory talks with unnamed OTT services, according to president John Skipper, as Advanced Television reported. Skipper said any OTT service would need to pay as much as the network is receiving from pay TV providers, and possibly even more. Skipper also said ESPN won’t be interested in signing one-off deals. An OTT service would have to buy the whole suite of ESPN products, according to Advanced Television.


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Maker Studios Purchase Blip.TV


-Maker Now Has Its Own Online Distribution Network


-Blip Brand Will Remain Active


Maker Studios, one of the largest YouTube channels, is purchasing rival online video destination Blip.TV. Blip.TV is an online video and ad network that offered its own original content and premium channels that range from topics such as comedy, lifestyle, fitness, health and cooking. [For more on Blip.TV, see TOR828]. Prior to the acquisition, Blip was in the process of signing a number of original content creators to its site and ad network, a few of which are former YouTube stars looking for more lucrative ad revenue schemes.


Maker is looking for other revenue schemes too, it seems. Maker has raised $44 million in investments so far, including a sizeable $36 million from Time Warner. Now with its own distribution network, it’s posed to emerge as another post-YouTube online network, just as The Young Turks, Vevo and Machinima have done.


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Netflix Signs Competitive Deal with The Weinstein Co


-Will Stream Movies before Showtime


Netflix has always said HBO, Showtime, Starz and other premium pay TV movie channels are its primary competitors, and now it is competing directly with those premium channels for movie content. Netflix has expanded its license agreement with The Weinstein Company to add more of its movies to Netflix’s streaming library before those movies are available on traditional pay TV. The multi-year deal means Netflix will offer films from both The Weinstein Co and its subsidiary, Dimension Films, exclusively beginning in 2016 – after its current deal with Showtime expires.


The new deal with Weinstein will begin around the same time as Netflix’s landmark deal with Disney, signed last year. That deal takes effect after Disney’s current contract with pay TV channel Starz expires. In 2016, Netflix will become the exclusive “pay TV” distribution network for Disney films and films from The Weinstein Company.


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The Two Most Under-Marketed OTT Services


Walmart’s Vudu and Sony’s Crackle are very different OTT services that have one thing in common. Their very deep-pocketed owners have lagged in aggressively marketing them. Vudu’s major advantage over iTunes, the most popular OTT site for purchases and rentals, is that it offers the UltraViolet service. How could anyone not want their existing DVDs and Blu-rays to be available in digital format so they could watch them a) without having to find the disc and b) on their smartphones and tablets? Both OTT services could use a clean-up in their user interface. Vudu is still too hard to log in — almost as hard as getting through the checkout line in one of its stores. The free but ad-supported Crackle is still showing commercials in SD — including even its own commercials; this from the company that wants to be the leader in 4K.


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Wuaki.TV Launches on Samsung Smart TVs


Wuaki.TV, the subscription-EST hybrid OTT service that recently launched in the UK, is now available on Samsung smart TVs as an app. Wuaki.TV is owned by Japanese retailer Rakuten, and offers Hollywood movies for rental or purchase in addition to a subscription-based movie service.


Wuaki.TV is offering subscription packages through Samsung TVs for £2.99 for life for subscribers that sign up before September 13, as part of a promotional campaign.


Wuaki.TV also has launched apps for iOS and Android devices.


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The CW Launches Digital Studio and New Web Series


Over-the-air network The CW has launched a new online hub for its digital, Web-only productions. CW Seed is the name of the new digital production studio and the online portal,, features four new Web series.


The CW, which is a joint venture between CBS and Warner Bros, has demonstrated a renewed interest in 2013 to cultivate the online, 18-34 year old demographic. The reboot comes after a Nielsen proclaimed ratings for the network were poor, with a 15% decline in total viewership and 18% drop in the “young adult” demo. Nielsen also found the CW’s median age was 41. The CW’s president Mark Pedowitz commented at the time that Nielsen “missed the boat” on its younger viewers, and said 20% of its audience is online – beyond the scope of Nielsen measurements.


The CW is now embracing its younger, online-friendly audience and bucking Nielsen to boot. The network now offers next-day streaming of its popular TV shows on its Website, signed content deals with Netflix and Hulu totaling over $1 billion, and now has even launched an independent digital studio. It’s also partnered up with Rentrak and TiVo Research and Analytics to help the network measure OTT and time-shifted viewing of its shows.


4 New Original Online Series, with 2 More on the Way


The online portal will become a place for The CW to develop Web series and a Web following, incubate ideas for prime time, and further engage with the 18-34 demographic on their terms and on their turf.


Online series include:


-“Husbands,” currently in its third season, “Husbands” is a comedy show plucked from YouTube that centers on gay marriage. The series is co-created by Jane Esponson, who wrote for “Buffy The Vampire Slayer.”


-“Stupid Hype,” a comedy Web series about a white ‘90s rapper that debuted last year on CW’s previous digital platform.


-“Gallery Mallory,” an animated series about an over-educated, under-employeed gallery worker. This series will have voice appearances from Kat Graham of “The Vampire Diaries,”Justin Hartley of “Smallville” and Misha Collins of “Supernatural. ”


-“Backpackers,” a comedy about an engaged couple.


-“P.E.T. Squad Files,” a parody show about paranormal investigators.


The series stick to the conventional online format of around 10 minutes, with seasons ranging between six to eight episodes. New episodes of the shows will be released each week. The CW said two new Web series would launch this fall.


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Yahoo Builds Anticipation for Its Fall Season Web Series Line-Up


-New Series Will Debut in September


At the Ad Upfronts earlier this year, Yahoo unveiled plans for a slate of new Web series for its online video portal, Yahoo Screen. The most anticipated of those are five big-name comedies, which look like will be debuting in September.


Yahoo has released trailers for the fall shows on Yahoo Screen. Watch them here:


The new series include:


-“Tiny Commando,” an comedy-action series created by Ed Helms, of “The Office,” about a soldier who has been shrunk by a military experiment, with Zach Levi, formerly of the TV series “Chuck.”


-“Ghost Girls,” created by Jack Black, this series follows a pair of female ghost investigators and, judging by the trailer, includes guests such as Val Kilmer and David Grohl.


-“Losing It with Jon Stamos,” a comedy show in which celebrities such as Olivia Munn, Alan Cumming and Matt Stone recount losing their virginity to John Stamos, along with animated dramatizations.


-“The Fuzz,” a puppet and live action series that follows a hero cop (and puppet) Herbie who battles a drug cartel.

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Which OTT Service Will Be First to Offer Live Sports Exclusively?


For years, we (and others) have predicted that sooner or later an OTT service will bid for and win live sporting events and we’ve speculated that the deep-pocketed Google with its globally popular YouTube would be the first.


NBC News reports that the National Football League (NFL) has confirmed that it has recently talked to Google but would not provide specifics. The NFL said in a statement: “Members of our office meet often with innovative leaders in Silicon Valley and around the world. We are constantly looking for ways to make our game better on the field, in the stadium and for fans. We are not commenting on any specifics of the meetings.”


That statement leads one to think that the talks were about technology. NBC News speculated that the talks were about negotiating for the rights to the NFL’s popular Sunday Ticket games. Currently DirecTV has the rights but the contract ends next year.


There is a precedent for showing major live sporting events on an OTT site. British Telecom, virtually locked out of the pay TV market in the UK, is offering BT Sport, which does much the same thing with Premiere League football games, although BSkyB still broadcasts many of the games instead.


Google also has three other services:


– Google Fiber offers pay TV in several small markets.


– Google TV is on some smart TVs and net-top boxes.


– The new Chromecast turns any HD TV into a smart TV.


Google faces and will face other competitors in broadband-delivered TV including Apple, Intel, Microsoft (Xbox), Roku and Sony (PlayStation). The advantage that YouTube has is that it does not require a net-top box and can be watched on any device including PCs.


What made the then News Corp-owned DirecTV such a hit occurred when it started offering out-of-town NFL games nationwide. A New Orleans Saints fan living in New York could watch all the Saints games for the first time if he had DirecTV. It also allowed fans to watch all NFL games except the local team’s games, which were available on local TV stations, which DirecTV retransmitted.


NFL Commissioner Roger Goodell and other league officials recently visited Google, Facebook and other unnamed technology companies, according to NFL spokesman Alex Reithmiller.


Google has been aggressively expanding the number of “channels” it offers that have original content.


AllThingsDigital quoted sources familiar with the matter, saying Google CEO Larry Page and YouTube content chief Robert Kyncl specifically discussed acquiring the rights to the Sunday Ticket package with Goodell.


We wonder whether Apple, Intel, Microsoft, Roku and Sony also discussed the Sunday Ticket, too. However, it’s a bit early for an OTT service to be thinking about the NFL. It makes more sense, especially economically, to start with a niche sport that has avid fans such as ice hockey, tennis or golf.


It’s unlikely that an OTT service could gain exclusive rights to NFL games because there are political issues. NFL games have become so universally popular that politicians and the federal government would step in. It is possible that an OTT service could be a supplement to the live distribution of NFL games, but they would still have to be universally available on TV. Only two pay TV broadcasters can by themselves offer nationwide distribution: DirecTV and Dish. However, AT&T, Verizon and CenturyLink together could cover most of the country, especially with the cell phones services as part of it. Cable TV companies could also band together to offer a near-nationwide service.


The fact that OTT and major sporting events are even being talked about in the same conversation shows how far the industry has come.


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HuffPost Live to Add Scheduled Programming to App


HuffPost Live, Huffington Post’s live streaming news network launched over a year ago, is looking to add some consistency to its programming. That’s what HuffPost Live president Roy Sekoff told Ad Week in a recent interview.


Currently, the app has topics sectioned off but no set schedule for particular shows throughout the day. The content is live streamed, and then made available on-demand immediately afterwards.


Scheduled online content is something with which YouTubers have been experimenting and there are lessons to be learned. The most important of which is that the developing audience requires consistency. A more structured approach would be a great improvement upon the service, which is now a bit hit-or-miss. It will be easier to develop fans and a following, and subsequently daily visits to the site, if viewers can have some idea of what to expect and when to expect it.


HuffPost Live released some numbers recently that show the service is doing very well as an online news network. During the week of August 5, HuffPost Live saw 15.3 million video views. Since January, it has seen a 74% jump in video views, and boosts of 13 million unique visitors each month. Average session time per visit is 22 minutes.


Mark Cuban’s pay TV channel AXS TV also carries six hours of HuffPost Live programming each day.


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Tablet Fever Rises Ahead of Fall Launch Season


Small slates are driving sales, but Samsung may move to 12-inch model, while Nokia is reported to be readying RT and WP8 models.


With Labor Day and the end of summer looming, the annual fever of speculation about the device lineup for the shopping-season is rising. Apart from the inevitable rumors about Apple’s launch next month, tablets are the chief focus, with a wide range of new variations reported, from a rash of larger, 12-inch products, to a new push for the ailing Windows RT platform.


Despite an intense market focus on smaller tablets, which drove most of the growth in the early part of this year, Samsung is supposedly going to announce a model with a display of more than 12-inches, up from its current high end at 11.6-inches. An extra 0.8-inches or so may not sound too significant, but it indicates the willingness of vendors, Samsung in particular, to turn out a rising number of size variations, from phablets to slates of one foot or more, to address as much of the market as possible.


Korean sources indicate the larger device may even debut a third tablet brand for Samsung, rather than being labeled as a Tab or a pen-enabled Note. Apple and Google are also said to be considering larger tablets – in Google’s case, this could even be a route for Samsung to create another Nexus model. Currently, the Nexus 10 is made by Samsung. The biggest Android tablet, however, comes from Toshiba, which released a 13.3-inch offering in June.


Despite all this activity at the high end, a new report from researchers at IHS iSuppli indicates that the 7-inch size is currently the sweet spot. The calculations show that the overall tablet market more than doubled in size during the first quarter of this year, up 111.9% year-on-year to reach 45.2m units, though the total was down 13% sequentially because of the drop-off after the holiday season high. The main driver in 1Q 2013 was the 7-inch form factor, largely because their low prices. The $199 segment is attractive to vendors as the cost of the components for these products falls — the average price of a touchscreen for a 7-inch tablet was about $15.60 in the quarter, down 16% from $18.60 the year before, said IHS.


Duke Yi, senior manager for display components and materials research at HIS, wrote in the report: “Sales of smaller sized tablets are rising at a rapid rate, driving shipments of capacitive touchscreen displays ranking in size from 7- to 8-inches. These tablets are inexpensive, with pricing at $199, making them popular among consumers. With the level of competition increasing in both the tablet and panel markets, pricing is expected to continue to decline, boosting shipments of displays and end products in this size range.”


Analysts at IDC also believe smaller tablets are the growth engine. It predicted in May that tablet shipments would reach 229.3 million units in 2013, up 58.7% on 2012 and overtaking portable PCs — the devices will surpass the whole PC market in 2015, forecasts the firm. IDC thinks tablets with screens of 8-inches to 11-inches in size will account for only 37% of the market by 2017, down from 73% in 2011.


Meanwhile, Windows RT has struggled in any form factor. The fall will see Microsoft’s revamped Surface RT, on which it will pin its hopes of kick-starting its ARM-based operating system second time around. It could also be boosted by a tablet launch from Nokia, heavily rumored though branded as “bizarre” by some market watchers. Finland-based Nokia was expected to release a tablet as long as two years ago, running Windows Phone, but was then understood to have held back from an RT device for fear of clashing with Microsoft’s Surface, and because it wanted to concentrate on establishing its WP8-based Lumia smartphone range. However, the lack of a large-screened device does squeeze Nokia’s market opportunity and restrict Lumia to an increasingly cut-throat handset space.


According to various reports, Nokia is planning a fall launch for a 10.1-inch RT tablet with 1080p HD display, running a Qualcomm Snapdragon processor like Lumia, with detachable keyboard and 32GB of storage. This would launch in September with AT&T and be manufactured by Compal, according to the blog. Various sites have published pictures of the purported tablet, in multiple colors and one with a Verizon logo. And images have also surfaced of a phablet with a screen around 6-inches, which could support WP8 rather than RT. However, it would make more sense to hold a new Windows Phone offering until Microsoft releases the next upgrade — WP8 GDR2 is just rolling out, while GDR3 is in testing.


This report appeared in Wireless Watch.


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Love My Pro? Then Love My RT!


Microsoft has begun appointing resellers that specialize in the corporate market to sell its Surface tablets including, most surprisingly, the RT version, which does not run legacy Windows apps that corporates have invested billions in acquiring and training employees. CDW, CompuCom, En Pointe, Insight, PC Connection, PCM, Softchoice, Softmart, Software House International and Zones have been signed up so far. That might not have been so hard for Microsoft to do because all are long time supporters of Windows, Windows PCs and Windows servers in the corporate marketplace.


The Surface Pro should start selling well if Microsoft and Intel can come up with a more affordable version. The RT is quite another matter but it’s probable Microsoft insisted on a bundle deal. Ingram Micro, SYNNEX and Tech Data are the initial distributors to the resellers but they can sell Surface tablets only to Microsoft-approved resellers.


Microsoft has also set up a program called AppsForSurface, which provides Surface tablets and funding for Surface-specific business applications for the corporates. Airstrip, Citrix, Houghton Mifflin Harcourt and Sage are currently signed up.


Microsoft should have done deals such as these much sooner. It’s going to take all the muscle Microsoft can muster to keep Apple tablets out of the corporate market and get Surfaces in.


Microsoft is also going after the educational market with Surface, offering qualified educational institutions Surface RTs starting at $199.


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Wireless Is Key to China’s Universal Broadband Plan


Wi-Fi and cellular broadband have become important elements in many countries’ plans for universal China.


The Chinese government has pledged to provide nationwide broadband coverage by 2020, an ambitious goal which should see significant extra investment in wireless networks, especially to reach the country’s vast rural areas.


China has laid down the eight-year timeline to complete broadband coverage in both urban and rural areas, according to its ruling State Council. The cabinet says it has raised the priority of national broadband in its overall agenda and published the first firm implementation schedule.


This is the most important pronouncement on high-speed access since China’s change of government and there will be heavy reliance on Wi-Fi and mobile networks to meet the goals. The strategy includes roll-out of Wi-Fi coverage in key public urban areas by 2013 and fixed broadband coverage for 50% of all households by 2015. Homes in some major cities will receive speeds up to 1Gbps by 2020, says the plan.


The government has laid down a three-stage program, with fiber optic networks and 3G mobile coverage to be accelerated in 2013 to deliver broad coverage and the objective of 4 Mbps speeds for 75% of the population this year. Then, higher speed broadband will be expanded in 2014 to 2015; and fixed and mobile network and technology updates will take place from 2016 to 2020 to fill in coverage gaps and to upgrade speed and capacity in urban districts. Previous government statements said fixed line connections and Wi-Fi hotspots would be the key focus in 2013.


The telcos will be expected to increase their already significant capex budgets to support the plans, but can also hope for additional revenue streams and government support. China’s second largest telco China Unicom has already responded to the new program, saying it will start to raise broadband speeds in capital Beijing and phase out lower speed offerings.


This article appeared in Wireless Watch.


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HEVC Coming Faster Than Anyone Expected


Widespread adoption and roll-outs for the new compression standard H.265, also known as HEVC, may happen sooner than we expected, thanks to widespread interest and high demand for delivering more and more data over existing networks.


“It’s really extraordinary in terms of how fast this is happening, especially when compared to the previous shift to H.264,” said Keith Wymbs, VP of marketing at Elemental Technologies. “This is an example of a technology that can enable higher qualities.”


Elemental Technologies is a video processing software company that focuses on encoding for multi-screen delivery. Wymbs said HEVC is “near and dear to Elemental’s heart.”


“We believe we have one of the most progressive solutions in this area, we’re quite far ahead in terms of development of our codec,” he said.


Progress Toward Adoption


Wymbs said Elemental is at the point of seeing 50% reductions in bandwidth for streaming data. He said those advances “derive from the advances in the underlying silica and chipsets and the computational power that exists in solutions today.”


HEVC requires ten times the processing power of H.264 for encoding to see those bandwidth benefits. “We’re at the point now where we’re starting to see, beyond player decoding, some hardware-based decoding of HEVC, and that’s a big factor [for adoption],” Wymbs said.


Fellow panelist Deepak Das, senior director of marketing at VisualOn, said there are still a few hurdles to overcome before we’ll see widespread HEVC adoption. “The challenges come from being able to nail down the spec, having a player that supports the spec, having an encoder that supports the spec, and then having them all work together, from the encoder, the DRM integration, the CDNs to the media player,” Das said. “I think this calls for a level of interoperability, it’s key to the success of any HEVC deployment.”


He added that VisualOn is working with a number of companies in deploying solutions with HEVC. “We haven’t seen any commercial deployments yet, they’re all in field tests right now,” he said.


Verimatrix’s VP of marketing Steve Christian, who also sat on the panel, said that HEVC adoption will become an important factor in those markets around the world where wired Internet solutions pose challenging. “This type of technology and bandwidth efficiencies will enable those wireless networks to shine in terms of capabilities – either in conjunction with traditional broadcast mediums, or as standalone OTT services,” Christian said.


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UltraViolet Gets Backing from JB Hi-Fi


Australian electronics retailer JB Hi-Fi is now offering an UltraViolet online store, and is selling DVDs and Blu-ray discs that are UV enabled. JB Hi-Fi has 180 stores across Australia and purports to be the largest disc retailer in the country.


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TiVo’s New Roamios Missing 11ac


TiVo’s new Roamio DVRs use Broadcom’s BCM7241 SoC processor, which was developed to work with Broadcom’s 11ac Wi-Fi chip, the BCM43526 5G Wi-Fi to provide what Broadcom calls whole-home, carrier-grade coverage. The Roamios, however, have the 11n version of Wi-Fi. Connections to an iPad or streaming client can be by Wi-Fi. Apple has embedded 11ac capable chips in two of its main products, the MacBook Air and the Airport Extreme and so could be expected to use 11ac in a new Apple TV net-top box or in a TV set.


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AirTies Selects Quantenna’s 11ac Chips


Turkey-based AirTies Wireless’ new Air 4820 range of Wi-Fi video bridges use new Quantenna 802.11ac chips that are capable of 6 HD streams throughout the home, reported Faultline. AirTies says it s that it is possible to almost triple the throughput of video and over greater distances from a central set-top box at up to 1.7Gbps.


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Students Want Tablets; Teachers Too


Nine out of 10 students think tablets will change the way they learn and believe that tablets make learning more fun, according to the Pearson Ed Student Mobile Device Survey that Harris Interactive conducted in the first two months of 2013. They would, of course, but teachers also agree: 96% of educators say the use of mobile devices at school increases students’ engagement. Many schools have started BYOD (Bring Your Own Device) programs just as the corporates have. Apple appears to have the edge in the educational market at this point but the low prices of Android tablets is appealing and Microsoft has started a push by reducing the price of its entry level PC to $199, at least until the end of August. Chromebooks, because of their very low prices, may also become a player in the education market.


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Apple Shipping More iPads in China But Losing Market Share


Price has become a main factor in selecting a tablet and it’s a price war Apple is losing, particularly in China even as it ships more iPads.


Apple’s share of the tablet market in China declined by more than 20 percentage points, said IDC analyst Dickie Chang in an interview with Bloomberg. Its share dropped from 49% in the year-ago quarter to 28% in the most recent quarter, Chang said. Samsung’s share increased from 6% to 11%, he said because consumers have started buying less expensive Android-based tablets. Lenovo was in third place with 8%.


However, he said, Apple’s unit shipments of iPads increased to 1.48 million units from 1.15 million a year ago. Samsung’s increased to 571,000, from 133,000 and Lenovo’s increased to 413,000, from 204,000.


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US Still Not a Connected Nation


About half of Americans 65 and older use the Internet compared to over three-quarters of those under 65, according to the New York Times article at:


The article says that government subsidies have helped make broadband available to 98% of US households but there are still about 60 million residents that are still not connected. Recent research from Pew shows between 81% and 85% of residences are connected but attributes much of the recent increase to the use of smartphones in households that do not have a PC with a broadband connection.


The paper cites a United Nation’s report that says the United States ranks seventh in percentage of homes that have broadband in 2012, trailing Britain, Canada, South Korea, Germany, France and Australia and nearly every other smaller country in Western Europe.


Comcast has been a leader in offering low-cost broadband to low-income families. Its two-year-old Internet Essentials program offers broadband for $10 a month and has signed up 220,000 households out of 2.6 million eligible homes in Comcast’s footprint.


A home without broadband can’t watch OTT videos — or shop or look for information or participate in social media — all of which have become modern day essentials, many of which contribute to the country and the person’s economic and mental well being. Surely, other cable TV and telephone companies can follow Comcast and Comcast can also rev up the uptake for its Internet Essentials.


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Studios May Launch OTT Services


-Take out Pay TV Channels


IHS’s Electronics and Media director of TV, Guy Bisson, says Hollywood studios could dismantle pay TV channels in the UK by offering direct-to-consumer OTT services, in a new research report.


A few studios have already gone down the direct-to-consumer path: Sony has done so with Crackle, a free, ad-supported OTT site; and Warner has put its old material in digital format for the subscription-based Warner Archive Instant.


Bisson estimated OTT services would need between 2.7 million and 8.9 million subscribers to “earn back” the £1.4 million the studios currently enjoy from rights agreements with pay TV providers in the UK. However, if those OTT services were able to generate an amount of revenue per subscriber that is comparable to ARPUs generated by pay TV provider Sky in the UK, studios would need as few as 1.35 million subscribers, Bisson said.


Bisson said these direct OTT services would pose a formidable challenge to both pay TV providers and OTT services such as Netflix and Amazon’s Lovefilm, which operate as online pay TV providers.


So, who does Bisson think could launch the first OTT offensive against pay TV in the UK? None other than HBO. “We believe HBO, which has already explored direct-to-consumer OTT propositions in international markets like Sweden, could develop a direct-to-consumer proposition in the UK that would sustain its current revenues with as few as half a million customers if it was able to charge £5 a month,” Bisson said. “Taking such a leap of faith would lay the ground work for others [studios] to follow.”


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comScore: Americans Watched 48B Online Videos in July


comScore’s Video Metrix, the monthly online video rankings data, indicates 187 million Americans watched 48 billion videos online and 19.6 billion online video ads. That means around 87% of the US Internet audience watched online video during the month of July. Google tops the ranks, accounting for 17.7 billion video views and around 168 million unique viewers. Google sites also averaged an impressive 544 minutes per viewer.


In second place came Facebook, with 61 million unique viewers and741 million video views, followed by AOL and Vevo. Yahoo ranked seventh with 42 million unique viewers and 324 million video views, and Amazon ranked ninth, with around 38 million uniques and 146 million video views.


Among YouTube channels, Vevo ranked first with around 47.6 million unique viewers and 582 million video views. Fullscreen came in second, with 34 million unique viewers and 353 million video views, followed by Maker Studios with 28.5 million unique viewers.


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Surely Apple TV Sets Will Be 4K


With every passing day it seems more certain that Apple TV sets, if and when they debut, will be 4K. By October the three big global names in TV sets — Sony, Samsung and LG — will have 4K sets in US retail stores so how could Apple even think of launching a TV set with lesser resolution. That could mean that the first Apple TV sets could be more expensive that once thought. Digitimes reports that Apple is negotiating to buy 4K displays — both 55-inch and 65-inch — from LG, its newest South Korean friend. Other rumor mills have Apple buying displays from Japan’s Sharp.


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LG’s New Display for Smartphones Exceeds 1080p


Smartphones are coming that’ll have video resolution higher than 1080p HD but still less than 4K. LG says the resolution of its new 5.5-inch display is 538 pixels per inch and supports 2560 by 1440 pixel video playback. It also said it’s the thinnest display on the market. LG trails Samsung, Japan Display and Sharp in unit sales of smartphone displays. The higher the resolution, the better those OTT videos will look. LG, which calls the display Quad HD, says it “will enable consumers to fully enjoy more life-like and crisp images, and even Blu-ray equivalent video, on their smartphones.” It said it would help users view a PC-like, full-page view of a Web site without distortion and with sharper text.


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Wireless Networks May Be First to Adopt HEVC


VisualOn’s senior director of marketing, Deepak Das, made an interesting point about HEVC adoption in a recent panel discussion hosted by Elemental. Citing a Cisco study that predicted mobile video will increase up to 70% by 2017, Das said: “If you see that trend maybe those wireless networks will leap frog and adopt HEVC first, as opposed to the OTT services and other players.” Wireless networks certainly have incentive to jump on the HEVC bandwagon quickly, as demand for video explodes across mobile devices throughout the globe, demand for bandwidth will only increase.


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Samsung Releases Smartphone with TV Antenna


Samsung has released a new smartphone called the Galaxy S II TV, which has built into it a TV receiver and a retractable TV antenna. The phone is able to receive over-the-air TV channels broadcast through ISDB-T – a digital TV standard developed in Brazil and mostly used in Latin America, and presumably that’s where the phone will be sold.


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Com Hem Launches 500 Mbps Broadband in Sweden


Com Hem has launched a 500 Mbps broadband service in Sweden, using the Compal CH7284E DOCSIS 3.0 cable gateway that it said it was buying back in June, which comes with 802.11ac Wi-Fi built in. Faultline suspects this is the first instance of the new Broadcom BCM3384 Euro-DOCSIS chip, launched in January, which comes with 3 x 3 MIMO 11ac Wi-Fi and Full Band Capture. Com Hem says that 1 million homes can subscribe to the faster speeds.


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Korea Telecom Launches OTT Service


Korea Telecom (KT) has launched an OTT service called Olleh TV Smart that is based on HTML 5.0 and accessible from both set-top boxes and general purpose devices such as PCs, smartphones and tablets, according to Faultline. The user interface (UI) will be provided by Alticast, which seems to be shifting from its traditional MHL to HTML 5.0. KT has already introduced hybrid services with a broadcast TV program on baseball games with statistics on the second screen, and it says it will bring this to more sports and other areas of coverage.


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Apple TV Gets New iTunes Festival Channel


Apple has released a channel app for Apple TV and iOS devices that feature a new iTunes Festival channel. iTunes Festival will take place in London, beginning Sept. 1, and will feature 60 artists performing throughout the month. Attendance to the performances is extremely limited, but Apple will be streaming the concerts via the iTunes Festival app to TVs, tablets and smartphones. The performances will also be available on-demand for purchase.


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Fox Sports: ‘A La Carte Is a Fantasy’


Fox Sports co-president Randy Freer told an audience that a la carte pay TV channels was “a fantasy.” “It doesn’t work,” he said, speaking at Variety Sports Entertainment Summit. Freer said the cable bundle is here to stay. “The theory that this television bundle has somehow become too complicated or too much for the world to digest is just not accurate,” he said.


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The Online Reporter 841 – August 16-22, 2013

Issue 841        August 16-22, 2013

Front row seat to digital media history since 2003

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  • Apple Matches up Well with Matcha
  • Viggle Unites Second Screen Apps with ‘Audience Network’


  • Odemax Demos 4K Streaming to the Home



  • Sony Joins Intel and Google in Pay TV Threat
  • Aereo Challenger FilmOn Opens 12th Antenna
  • Lionsgate Embraces OTT With Multi-Platform Release of ‘Bachelorette’
  • Apple Hires Hulu Exec to Get Content
  • OTT Services Battle Over ‘Breaking Bad’ Final Season
  • OTT Taking Off Across the Globe


  • Netflix & YouTube Nominations Prove Times Are Changing at Emmys


  • Showtime Pairs with LG to Deliver Interactive TV



  • Will Every Child in the World Soon Have a Tablet?


  • Audi Puts Owner Manual on iPad


  • 11ac Ramping Up


  • Amazon Should Develop an OTT Box, Not a Gaming Console


  • Surface RT Attracts a Class Action Lawsuit


  • Touch-Based PCs Not Selling Well Either
  • Connected TV Owners May Be Likely to Cut the Cord
  • Cablecos Expand Corporate Broadband Market Share
  • Numbers Point to 1st No Growth Year Ever for Pay TV
  • Roku Winning Streaming War with Apple TV
  • Consumers Tap Social Networks For Content Discovery
  • ‘There’s Never Been a Better Time to Buy a New PC’


  • Gates on Google’s Balloon Broadband Venture
  • Vevo Coming to Apple TV
  • MTV Streaming Episodes Directly to Xbox 360
  • NBC Buys Video Streaming Start-up
  • Aereo CEO Sees Profit Before 1m Subs
  • M-Go Jumps to Vizio TVs
  • Comcast Speed Upgrade a Coincidence? Probably Not
  • LG and Azuki Working on the Next Streaming Dongle


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Apple Matches up Well with Matcha

– A Vital Part of the UI for Apple TV or an Apple TV Set

We wondered what happened to the second screen app Matcha when it suddenly disappeared from the iPad without any explanation this past May. It was a very, very useful search app that helped find which OTT service or pay TV channel had specific shows. Now we know.

Without any announcement, Apple acquired Matcha sometime in the last few months, probably in May when the app became unworkable. The only notice that Matcha posted said:

Matcha’s Sign off Message in May

Matcha kept track of content at the most popular OTT Web sites such as Netflix, Hulu, Amazon Prime, Apple’s iTunes plus pay TV networks. Users of the service could also receive recommendations.

If Apple integrates Matcha search into its Apple TV box, it now has something the other media players haven’t done very well — a search function that searches across multiple OTT services. TiVo does that to some extent on its DVR but that is limited in two ways: a $150 to $400 initial price because the buyer is also getting a DVR and a monthly $15 charge for using its mandatory on-screen TV guide. Roku also has a universal search function, but it is clunky and buried beneath the channel store.

As we said last week, Steve Jobs did a disservice to Apple with his statement that Apple TV is a company hobby. By neglecting the Apple TV, Apple now has to play catch-up in this space, which is too bad since it had a great three or four year lead in net-top boxes. Compare Apple TV to Roku — other than not having YouTube (perhaps the OTT industry’s biggest mystery) and iTunes, Roku clearly has many more apps.

However, with Matcha and a few more OTT services, Apple could easily have the best net-top box experience on the market.

Apple has recently become very aggressive at launching more content for its Apple TV net-box. In June, HBO GO, WatchESPN and Sky News, a live UK-based newscast, all launched Apple TV apps. Vevo is reportedly working on an app that will bring 24/7 music to Apple TV.

Consequently, the user interface for Apple TV is becoming increasingly clunky, such as having to scroll up and down to find apps for various content apps. It is becoming very un-Apple in its appearance and use. That raises a question: What does a user interface look like that allows the user to access tens of thousands of shows, especially what is on the initial screen? It has to take into consideration that some shows are live. The Apple TV already offers Sky News and a live Wall Street Journal app, although the Journal feed does not run continuously.

The Matcha acquisition gives Apple the technology it needs to supply a much needed part of a modern user interface for a net-top box like the Apple TV and, who knows, perhaps an Apple TV set.

Certainly a multi-OTT service’s user interface must have:

– The ability to search for all available content across all sources by title, name of actors and director, genre and date of debut. That’s the kind of thing that Matcha did and so seems certain to be integrated into a future Apple TV update as well as for all iOS devices. Apple may give the function a different name. Having found one or more shows that meet the search parameters, Apple TV should give the user the ability to start playing it with a single click, assuming the user has a subscription to the monthly service or for a pay/rental service that has the user’s credit card information. Ideally, the OTT service being used would be transparent to the user.

– A recommendation engine for each family member that would be based on some combination of algorithms, what the user has previously watched, the user’s ratings of previously watched shows and a profile the user may have completed.

– An icon for live shows looks to be increasingly necessary as OTT services add live sports, weather, interactive shows and news. It should allow the viewer to browse through shows that are on live or will be on live in the next few hours. The availability of live shows brings up the need for a DVR, probably cloud-based.

– Apple, as it does now, will want to highlight for-pay and free content that is in its iTunes store and the AirPlay capability that lets Apple TV users play music on the stereo that they have stored on a PC in the iTunes player.

Apple, which has upwards of $130 billion in cash and cash equivalents, isn’t talking about its plans for Matcha but has confirmed it made the acquisition. It said, “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

Apple did not say how much it paid. VentureBeat said sources told it that Apple paid between $1 million and $1.5 million for Matcha. If that is correct and Matcha is indeed as good as it appeared to us when we used it — it was the best such service we had used, Apple got a bargain, especially if Matcha supplies a vital but otherwise missing technology to its Apple TV net-top boxes and TV sets. Matcha offered apps for iPhones and iPads but no other devices so there is no Android complication.

It’s unclear whether Apple will launch a new Apple TV net-top box, a complete TV set or only new software for the existing Apple TV. Actually, it could do all three. However, it’s hard to imagine Apple launching a TV set in 2013 or especially in 2014 that is not 4K-ready. If it did, it means it would have a set that’s inferior in resolution to 4K sets from competitors Sony, Samsung, LG plus other Japanese and Chinese set makers.

Smart TVs can be separated into two parts:

– The display

– The smarts

If Apple launches a TV set, it will buy displays, perhaps indirectly through the company that does the final assembly, from a display maker, probably Sharp or LG but possibly from another source.

What will separate Apple from the other makers of TV sets that use the same or similar displays are:

– The design of the physical product. Does it look cool?

– The remote, whether it’s a dedicated remote or an iOS device — or both.

– The on-screen user interface including possibly Siri-like voice commands or motion sensing. (Who’d ever have thought we’d be talking to our TV sets but Plantronics has a Bluetooth headset that can be operated entirely by voice commands except for dialing the number, which will probably come in a future model.)

– The available content, which we increasingly believe must include live content, at least the local TV stations that carry CBS, NBC, Fox and ABC, if not the major pay TV channels such as The History Channel, ESPN, Discovery and HBO. Of course it’ll have to have all the popular OTT services such as Netflix although it’s unlikely Apple will ever offer one that competes directly against its iTunes store such as Vudu.

Apple is thinking live TV. It filed for a patent for a hybrid OTT/STB box last year, as we reported in TOR794.

With tens of thousands of shows available to watch, Apple TV users will want a service like Matcha to help them find what they want to watch.

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Viggle Unites Second Screen Apps with ‘Audience Network’

-And Still Experiencing Exponential Growth in Users

Viggle, the free second screen app that offers real-world rewards to users who tune in to broadcast TV, has emerged from the last 18 months as one of the strongest second screen app offerings.

This week, flexing its advertising prowess, Viggle announced the Viggle Audience Network, along with three partners: Boxfish, BuddyTV and Dijit’s NextGuide.

The Viggle Audience Network essentially creates an ad bridge that enables advertisers to reach a wider second screen-using audience. “The second screen marketplace is fragmented,” Kevin Arrix, chief revenue officer at Viggle, told The Online Reporter. “The number one benefit [of the network] is being able to go back to the advertising marketplace with a consolidated product.”

The network works like this, Arrix said: “you can put your marketing message on Viggle platform proper, and you can also now put your message across second screen platforms.”

The three partners announced so far, along with Viggle’s strong 3 million registered users, puts that scale at around 10 million monthly users. Arrix said Viggle has half a dozen second screen apps that are interested in the network.

Spanning the Siloed Second Screen Apps

Arrix said there are three main buckets in the second screen space. First, there is the discovery bucket. “These are the handful of technologies or platforms that ultimately get TV fans to the show that they love or will love,” Arrix said. Launch partners NextGuide, BuddyTV and Boxfish might all be considered discovery apps.

Then there is the companion bucket – “That’s generally a synced experience, it enhances your television viewing experience.” Third is the social TV bucket, which connects like-minded fans, super fans of specific shows, Arrix said.

There is some overlap between these groups. For example, many, if not all, second screen apps have some social components to them, while others are dedicated completely to the social TV side of second screen. Conversely, some social second screen apps also have synced experiences, such as polls or trivia related to the show.

The Viggle Audience Network will work to partner with apps from each bucket. Arrix said user engagement across all types of second screen apps is strong. “Not only are there a lot of different options out there for consumers, but the options span different silos,” Arrix said. “With the Viggle Audience Network, we can allow a marketer tap into that engagement across each of those second screen buckets.”

“Whether they’re with us now or they will be down the road, this is an opportunity for them to leverage the sales force—we have the expertise we have to help monetize their platform and their technology.”

Viggle’s Impressive 18 Months

In June of this year, Viggle announced it had reached a milestone with 3 million registered users, with around 838,000 active users, also known as “Vigglers.” The company said Vigglers had checked into TV shows 250 million times. In the month of May alone, Viggle saw close to 25 million check-ins, the largest amount of check-ins during one month the company has seen. In June, Viggle measured the average session spent in the app to be over 68 minutes.

“We’ve launched our platform 18 months ago with a very specific business model,” Arrix said. The model includes working with advertisers and sponsors to offer viewers who tune-in and watch broadcast shows earn rewards from companies such as Best Buy, Papa John’s, Fandango, Hulu Plus and Groupon. As of June, Vigglers have redeemed over 1.8 million rewards with a retail value to consumers of $13 million.

“We’ve been monetizing, and we’ve had advertising on the platform from day one,” Arrix said. “That isn’t the case with most second screen companies.”

The last quarterly earnings for the company, released in May 2013, showed Viggle brought in $3.395 million in revenue during the period, a 510% increase from the year-ago quarter. At the time, Viggle had 19 brand advertisers and nine TV network partners that are running second screen integrated ad campaigns.

Viggle’s network partners are sure to be an important asset to the company. “Viggle is driving the discovery of new shows, reminders to tune in and show engagement,” the company said in its earnings report. Viggle helps drive tune-in and engagement with a show by encouraging viewers to catch the broadcast and watch the full episode, in order to gain points. Viggle uses audio content recognition technology to listen to what’s on the TV.

Viggle also offers users a TV guide, showing users what’s on and when in the old grid format, and even alerts users when a specific show is about to start. It also has a social TV “chatter” tab where users can view comments about shows and start their own chats.

“There’s going to be a handful of winners in this space,” Arrix said. “Our activity is very strong and continues to grow.”

The bottom line, Arrix said, is that there’s a massive number of people who have their smartphones or tablets with them while they are watching TV. “It’s early days, everyone continues to learn and iterate,” he said.

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Odemax Demos 4K Streaming to the Home

– Uses Redray Player to Receive, Decompress & Play

– Head-to-Head against Sony 4K Player

Here comes the 4K content!

Odemax has demonstrated its upcoming 4K OTT service by streaming some independent films to Red Digital Cinema’s Redray Player, which can support 4K, 1080p and 720p TV sets.

Redray 4K Cinema Player

A major difference compared to Sony’s FMP-X1 4K media player is that the Redray Player works with any manufacturer’s TV set. Sony’s works only with Sony’s 4K TV sets. However, the Redray player sells for $1,750 and the Sony 4K player is $700. The $1,000 difference may not make much of a difference to early purchasers of 4K sets — what’s a thousand dollars when you’re paying $5,000 and more for the TV set?

The Redray player upscales HD (720p and 1080p) files to 4K (4096×2160). It also supports 3D playback at 48 to 60 fps. It comes with its own remote but there’s also an iPad app for it.

Sony FMP-X1 4K media player

The biggest differentiator is content. Sony has access to the entire library at Sony Pictures and has the money, influence and contacts to buy from the other studios. Sony, which says it has been shooting in 4K for 10 years, is starting by giving away ten popular movies in 4K with each of its players:

“The Amazing Spider-Man”

“Bad Teacher,” featuring Cameron Diaz

“The Karate Kid,” featuring Jackie Chan and Jaden Smith

“The Other Guys,” featuring Will Farrell

“Battle: Los Angeles”

“That’s My Boy,” featuring Adam Sandler

“Salt,” featuring Angelina Jolie

“Total Recall 2012,” featuring Colin Farrell and Kate Beckinsale

“Taxi Driver”

“The Bridge on the River Kwai”

By comparison, Odemax is starting by offering 50 titles, the first one being a 24-minute short, “The Ballad of Danko Jones.” Odemax says it will be able to offer major films including the blockbusters, some perhaps by the time it officially launches, which it says will be before Christmas. See:

Comparison Chart

           Sony 4K player          Odemax/Redray player

Name of OTT service           Video Unlimited 4K   Odemax

Player FMP-X1 4K    Redray

Price   $699    $1,750

Storage           2 terabytes     1 terabyte

Initial content 10 free major movies 50 films from independent studios

Compatible TVs         Only Sony 4K sets     Any 4K, 1080p, 720p set

Captive studio            Sony Pictures none

Blu-ray disc player included  no        no

Ship date        August            by year-end

The Redray player connects to the Odemax Web site to purchase and download content. Odemax uses BitTorrent technology to accelerate downloading and viewers will be able to start watching as they are downloading.

The videos are encoded (compressed) with Digital Cinema’s proprietary .RED format. Odemax said a full-length feature 4K film would be about 9GBs.

Sony uses its own proprietary format from Eye IO, which Netflix also uses.

The Odemax service is in limited beta test with a few users that have the Redray players. Sony has said it intends to start shipping its 4K media player this month.

Being able to connect the Redray player to any 720p and up TV set is a big draw compared to Sony but Sony has the content and in the end “he who has the content will be king.”

Here is Sony and Odemax/Digital Cinema’s biggest potential competition. An OTT service such as Netflix, iTunes or Vudu announces it will start streaming 4K movies coupled with an announcement that a net-top box maker, such as Roku or Apple, starts shipping boxes that will decompress their 4K streams. The encoding/decoding technology will be the industry standard HEVC, for which Broadcom says it will have chips by 2014, chips that’ll go in the net-top boxes.

Neither company’s 4K player has a Blu-ray drive (Steve Jobs would have lauded that!). May we also point out that as we had predicted months ago the first and the most 4K content will be delivered to the home over the Internet, well if you don’t count the 10 films Sony is pre-downloading to its FMP-X1 4K media player.

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Sony Joins Intel and Google in Pay TV Threat

The Wall Street Journal reports that Sony has reached a preliminary programming deal with Viacom to offer linear programming on its Internet-based TV service.

If this is the first you’ve heard of Sony planning an Internet TV service, you’re not alone. Sony has been very secretive about it. WSJ said the deal with Viacom still needs to be finalized, and that Sony is in talks with Disney, Time Warner and CBS, too. The Journal’s unnamed source said Sony is looking to launch the service by the end of the year, available initially on PlayStation.

Sony’s no stranger to content and that will probably be a contributing factor if it succeeds in getting content. Sony Pictures Television has its own pay TV channel, called Sony Movie Channel, and Sony is majority owner of the pay TV channel Game Show Network (GSN). GSN is a joint venture with DirecTV, and technically owns Crackle – though Sony Pictures operates the OTT service. Sony is also a partner in FEARnet, a horror-themed OTT service with Lionsgate and Comcast.

It remains to be seen how the pay TV incumbents will react if Sony is able to pull off a cable-like deal for its OTT service. We know the pay TV providers won’t be happy to hear live linear programming possibly becoming available over-the-top. During the Cable Show earlier this year, rumors surfaced that Time Warner Cable (TWC) has negotiated deals with content owners and networks that specifically bar them from distributing their programming online. Those rumors have recently resurfaced in the CBS-TWC dispute.

If Sony is able to finalize the Viacom deal, the other networks and content owners will follow. Sony will have opened up premium pay TV programming for the pay OTT aspirants Intel, Google and even Apple. Then pay TV would really have something to worry about.

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Aereo Challenger FilmOn Opens 12th Antenna

FilmOn, the other OTT service that delivers over the air broadcast TV content to viewers via the Internet, opened an antenna array in Seattle, Washington, marking the twelfth such data center the company has across the US.

FilmOn operates in both the UK and the US. It connects viewers directly to broadcaster feeds and enables viewers to stream live linear content to Internet-connected devices. Just like Aereo, FilmOn connects viewers to individual mini-antennae. FilmOn has antenna farms across the world, in Europe, the US, the Middle East, and is expected to launch new farms in Asia.

There is a big difference between FilmOn and Aereo: FilmOn isn’t charging viewers to access over the air TV. In fact, FilmOn has multiple contracts with broadcasters and providers royalties to them.

In the UK, FilmOn delivers live TV from broadcasters BBC, Channel 4, ITV and others. The company respects local transmission rules by assigning each viewer a personal antenna that the viewer controls.

In the US, FilmOn is operating in 42 markets, including New York, Boston, Chicago, Dallas, Miami, Denver, Atlanta. FilmOn is planning to launch in Philadelphia, Detroit, Minneapolis and Honolulu in the coming weeks.

Despite the expansion, FilmOn is treading around a temporary restraining order filed in the 9th Circuit Court that prohibits FilmOn from connecting viewers to the “Big 4” broadcast networks – CBS, Disney’s ABC, Comcast’s NBC and Fox – in the region covered by the 9th Circuit. The Federal Court of Appeals will be hearing the case later this month.

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Lionsgate Embraces OTT with Multi-Platform Release of ‘Bachelorette’

Lionsgate is releasing its next big movie on digital platforms and theaters at the same time in the UK. “Bachelorette” is available on platforms such as Google Play, Xbox, PlayStation Store, Virgin Movies, Film Four, BT Vision, Vdio, HTC Watch, Blinkbox and others, as well as across movie theaters.

The movie, which stars Kirsten Dunst, was released on OTT platforms in the US about a month before its theatrical debut. The film hit number 1 on iTunes, and was in the top five on pay TV VoD services – the first pre-theater released film to do so.

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Apple Hires Hulu Exec to Get Content

Apple, Intel, Sony and Google all seem headed toward offering a pay TV service that’s delivered over a broadband connection to the home. Sony has made a content deal with Viacom for content for such a service that would be available on its PlayStations. Apple has hired a Hulu executive to help it get content.

Apple this week hired Hulu senior VP of marketing and distribution Pete Distad to help it negotiate media deals, according to Bloomberg. It said Distad spearheaded Hulu’s push to get the Hulu app on Web-connected devices, including Apple TV.

Apple is also reportedly near a deal with Time Warner Cable (TWC) that would allow it to offer TWC’s pay TV channels over the Apple TV. Presumably, that would only be in TWC’s footprint where TWC has the rights to distribute and not on a nationwide basis where it would compete against other cable TV companies.

Apple already has a deal with Time Warner’s HBO and ESPN. It is reportedly close to a deal with the BBC for its iPlayer.

Apple TV already offers live news feeds from the Wall Street Journal and Sky News.

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OTT Services Battle Over ‘Breaking Bad’ Final Season

-Netflix Gains Next-day Rights in UK

While AMC’s hit series “Breaking Bad” enjoyed a final season premiere audience of 5.9 million viewers last week, it’s a safe bet that a sizeable audience will watch the new season on-demand via the OTT distribution networks. OTT services from iTunes and Vudu to Netflix have been flaunting the fact that they can offer the latest episode of the season as soon as 24 hours after the show airs Sunday nights on AMC.

Vudu, iTunes and Amazon Instant Video have all been advertising the fact that they have new “Breaking Bad” episodes available for download 24 hours after broadcast. The prices across these transactional VoD services are the same: $2.99 for an HD episode, $1.99 for the SD version. Season passes are $22.99 across services for HD episodes.

In a first-of-its-kind deal for Netflix, it has acquired catch-up TV window rights for the series in the UK. There, Netflix is offering new episodes of “Breaking Bad” just a few hours after its broadcast in the US.

Netflix is arguably one of the reasons the show is as popular as it is, and also why the digital streaming rights for the show have been deemed so valuable to the various OTT services. The show experienced a huge surge in ratings for its premiere episode, double the six million viewers its season five premiere garnered. The surge in ratings is chiefly due to the content, of course. The show is outstanding, the writing, directing and the acting is first class, all around. And with seasons 1-5 available on Netflix for on-demand viewing, that tune-in audience will likely continue to grow as the ultimate finale inches closer and closer.

But once the show has run its course on broadcast TV, the series will still garner viewers once the final season hits the OTT SVoD services.

Viewers Are Serious About Digital Viewing

The show’s final season was supposed to be its fifth, but for presumably marketing reasons, AMC decided to split the last season up, with the first eight episodes airing in 2012 and the last eight episodes airing a few months later. That later date was pushed back twice, and now, AMC has decided to name the last eight episodes as part of season six.

iTunes and other transactional VoD services suffered a bit of a PR problem when viewers realized they would have to purchase another season pass for the final episodes of “Breaking Bad.” Fans of the show that had already purchased a season five pass turned livid, flooding iTunes with complaints, and showing us just how important the digital delivery of TV shows has become for fans.

Viewers who purchased a digital season pass for season five thought, at the time, they were paying for all 16 episodes. Instead, iTunes and other OTT services are charging viewers for an additional season pass – one for the newly designated season six.

OTT Taking Off Across the Globe

Markets around the world are catching the OTT fever, as Internet-connected device penetration expands.

There are some key areas and markets where OTT is set to take off:

– Middle East and North Africa (MENA): MENA markets are enjoying a surge in tablet sales and an expansion of mobile broadband, leaving the area poised for an OTT takeover. Informa Telecoms & Media estimates that 6.5 million tablets were sold across the Middle East and Africa in 2012. It predicts tablet sales to increase to 32.1 million in 2016.

“The OTT-content and services landscape across MENA has traditionally been rather barren, but the situation is changing quickly with OTT start-ups starting to emerge, and the number of rival operator initiatives increasing,” said Michael Dean, Research Analyst at Informa.

The Gulf Cooperation Council is also planning to have LTE networks in place by the end of 2013. “There will be a further rise in mobile data usage,” Dean said. “This will undoubtedly place more demand on increased content delivery.”

Dean also said that Middle East countries such as Saudi Arabia and the United Arab Emirates have unusually high levels of TV consumption, with households averaging between six and seven hours of TV watching per day.

-Russia: Russia-based OTT movie service, LVI.RU, made the bold claim this week that in a few years time its revenue will exceed that of linear cable and DTH services, Broadband TV reports. LVI has enjoyed remarkable growth the past year. It measured 19 million unique users per month, up 111% from 9 million last year. The number of visits to its site reached 150 million, triple the 44.3 million it measured last year. LVI’s claim to surpass traditional linear TV services in revenue was dismissed by Tricolor TV, Russia’s leading DTH service, saying linear and on-demand services are apples and oranges.

Earlier this year, analyst firm J’son & Partners predicted the OTT market in Russia will be worth $400 million by 2020, and half of the market will be comprised of transactional VoD sales. Transactional VoD refers to one-off digital rentals that do not require a subscription. There are also a number of Russian pay TV providers, such as Rostelecom and MegaFon, have already launched OTT offerings.

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Netflix & YouTube Nominations Prove Times Are Changing at Emmys

There are two striking developments in the upcoming Emmy awards shows that underscore perceptions are changing around original online video, both in content and platform.

The Emmy nod indicates two things:

  1. Personalized recommendations matter: Amazon, Netflix and YouTube are receiving Emmys this year for their personalized recommendations. It’s clear that personalized recommendations have become the superior method of discovering content. The pay TV providers are buying into this as well, and are beginning to release their own personalized recommendation features in their next-gen programming guides.
  2. The “Web” distinction doesn’t matter: A big surprise came this year when the Academy revealed three of Netflix’s Web series had been nominated for a total of 14 Emmys. [For more on Netflix’s Emmy nominations, see TOR 837]. Netflix has proven to the entertainment world that “Web series” doesn’t necessarily mean “poor quality,” and arguably Netflix’s series are the most TV Web series ever released.

The Academy has subtly folded in OTT services and technologies into its award system for a few years. In fact, the Academy changed the rules about submitting Web series for consideration for award a few years ago. The Academy has also dispensed technology awards to OTT services: Netflix received one for its streaming technologies last year, and Amazon is receiving one this year, as mentioned above.

Both Netflix and Amazon are popular vehicles for consuming TV content, so it makes some intuitive sense that Netflix and Amazon would receive technology awards from the primetime TV Academy.

YouTube, on the other hand, is a notorious vehicle for pirated TV content, not a platform for long tail TV revenue. It doesn’t have any clout among TV networks or content owners as a legitimate distribution network for TV. In fact, TV networks spend a lot of time and energy to pull off unauthorized videos of TV shows.

So why is the Academy nominating YouTube at all?

Another question we have for the Academy: Why hasn’t iTunes or Hulu received any Emmys for work as go-to OTT distribution networks for TV shows? Surely Hulu and iTunes have both done more for TV than YouTube has.

TV Award Honoring the Anti-TV Force

YouTube’s Emmy is for its recommendation engine and algorithms, which have created what’s lovingly called the “YouTube Hole.” A viewer gets sucked into the YouTube Hole when he or she visits the site to watch one specific video, and winds up spending an hour or longer jumping from video recommendation to video recommendation.

It’s a phenomenon that’s been widely recognized among YouTube viewers for years, but it’s surprising that the National Academy of Television Arts and Sciences would think to honor YouTube with an Emmy. It only goes to show how unimportant the platform (Web vs TV) has become for entertainment, and also how important personalization has become in entertainment consumption.

YouTube isn’t exactly TV-friendly. In fact, it has set its sights on challenging the traditional TV model by adopting some TV tricks and utilizing them in a unique Web environment:

-the premium channel experiment, in which Google has invested over $200 million so far in helping develop high quality, short form content.

-the channel-subscription feature, which allows viewers to create their own YouTube channel bundles, tailored to their personal tastes.

-the live-streaming feature, recently opened up to channels with as few as 100 subscribers, allows content creators to interact in real time with their avid fans.

-the paywall feature, which allows content creators to (theoretically) offer higher quality content to subscribers, and which enables viewers to spend money on Web content.

This year’s Emmy nominations show just how blurry the lines between Internet and TV have become.

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Showtime Pairs with LG to Deliver Interactive TV

Showtime has paired with LG to deliver synced interactive features for specific shows, generally delivered to the viewer on the second screen, right onto LG smart TVs. Showtime is using LG’s LivePlus technology to deliver on-screen polls, trivia and social chats for shows such as “Dexter” and “Ray Donovan.”

LG’s LivePlus technology is only available on its 2012 and 2013 smart TV models, so the audience that can benefit from the on-screen interactive features will be small. But, those interactive features and bonus content is the same made available on Showtime’s TV Everywhere app, called Sho Sync.

David Preisman, VP of interactive television at Showtime, called the feature a game changer, in an interview with Variety. First screen interactivity hasn’t seen much success yet, but Preisman said opt-in rate for first-screen features is around 10%, which he claims is higher than the “low single digits” second screen apps see – a claim with which second screen app companies may take issue.

Showtime said it would expand the first-screen interactive features to shows such as “Californication” and “Nurse Jackie.”

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Will Every Child in the World Soon Have a Tablet?

– Intel Intends That with Android-based Educational Tablets

– Won’t They Want a Tablet When They Grow up?

Intel intends to be a success in the tablet market. Period. Its determination may soon result in every child having an educational tablet. Last week an acquaintance told me about a toddler, less than two years old, who showed up at a daycare center with her own tablet (an iPad mini no less). That may soon be happening worldwide.

Remember the MIT-backed non-profit One Laptop Per Child organization, which developed a very low-cost, low-maintenance, Linux-based PC that was intended for every child in emerging countries? Intel has jumped into the market with two educational tablets, although it did not provide estimated manufacturing costs or selling prices.

Intel has produced reference designs for two Intel Education Tablets that will have one of Intel’s low-cost, low-power dual-core Atom processors and use Google’s free Android operating system. Both come with software called eLearning that, according to Intel, will “make classrooms more engaging, including an e-Reader, science exploration and data analysis application, painting tools and accessories, snap-on magnification lens and plug-in thermal probe.” Intel Education Software is a suite of apps.

Its management software provides teachers and administrators with tools to protect students and manage technology.

Neither tablet has a hard disk or CD/DVD drive. All content is accessed via a Wi-Fi or Bluetooth connection. Steve Jobs would have loved that part of it although it’s quite certtain he would have greatly polished the unit’s “look and feel” — its design and software interface.

We asked Intel, “What are the estimated manufacturing costs and ‘selling’ prices?”

Intel said, “Our customers [the distributors of its Education Tablets] set end-user pricing based on configurations, geographies and other variables. We do not disclose the manufacturing costs.”

We asked, “Has any company committed to build them?

Intel said Taiwan-based Elitegroup Computer Systems (ECS) is the original device manufacturer (ODM) that will build the device. Intel’s customers place orders with the ODM. Intel said that right now Portugal-based JP-IK (for JP inspiring knowledge) is the main customer for the 10-inch tablet. They distribute in Portugal and other countries including Latin America.

JP-IK’s Web site has a picture of the product, called Any 201, but no other details we could find. See:

JP-IK said its revenues in 2011 were $450 million.

The model with the 10-inch display has more than 6.5 hours of battery life, weighs 1.5 lbs and uses Intel’s Z2460 dual core 1.6GHz Atom processor. Its screen resolution is 1280×800 resolution and it has 1GB LPDDR2 memory, 16GB NAND flash storage, Wi-Fi, Bluetooth, and Android 4.0.

The model with the 7-Inch display has a resolution of 1024×768, uses the slower 1.2GHz single-core Atom Z2420 processor and has 1GB LPDDR2 memory, 8GB NAND flash storage, Wi-Fi, Bluetooth and Android 4.1. The stylus is extra. It weighs less that a pound at 0.78 pounds and has 8 hours of battery life.

Both models have McAfee Mobile Security, which Intel owns and “shock-absorbers” that cushion in case they are dropped. Both also have two cameras: a front-facing one with 0.3megapixels and rear-facing one with 2megapixels. The stylus and built-in speakers and microphone make it usable for interactive, multimedia content.

Both models have hardware-based theft-deterrent to, well, deter theft of school property.

Using Android means the units have the KNO eReader, which allows highlight, annotate, bookmark and quiz; Chrome browser, picture viewer, email client, media player, calculator, contacts and virtual keyboard.

Google’s Mobile Service apps are included, which provides Gmail, Google Maps, YouTube (in some countries), Google Books, Android Market, Google Calendar, Google Translate, Google Docs and Google Search.

Details are at:

John Galvin, VP of Intel’s sales and marketing group and general manager of Intel Education, said, “Intel remains committed to helping teachers and students achieve better results through the development of complete solutions that span the hardware, software and digital content required for a 21st century learning experience. The tablet we are introducing is one additional step in a 10 year journey.”

It’s heartening to see two rivals compete for this enormous market sector. It will result in better products at better prices.

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Audi Puts Owner Manual on iPad

Audi has released an app in the German iTunes App Store for Audi owners to use as an augmented reality owner’s manual. The app, available for the iPad and iPhone, offers a virtual look at the A3 model cars, covering 300 elements of car care, including things such as engine components and the entertainment system.

Watch a demo of the app here:

The app was developed with Metaio, which specializes in 3-D and augmented reality software. The app offers virtual overlays of maintenance instructions, animated in 3-D.

The user is able to use his or her iPad or iPhone camera, with the app, to receive instructions or tips for the specific component of the vehicle. “The user positions the camera of the mobile device directly over individual vehicle elements, instantly detecting and returning information on the desired subject,” Metaio said. “For example, after scanning the engine compartment, the app would return information with an animated overlay showing how to locate the engine coolant and refill it to the appropriate level.”

The app is available in German, English and Japanese.

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11ac Ramping Up

Broadband and pay TV service providers, usually the same company, are demanding that future STBs, probably mostly gateways, include the 11ac version of Wi-Fi, according to Todd Antes, VP of product management at Qualcomm Atheros in an interview with FierceBroadbandWireless. He said, “We already see great growth in service providers looking at RFQ’s (requests for quotation) for next-generation gateways. I can say across the board they’re all including 802.11ac.”

One reason for the increased demand, he said, is that makers of consumer devices are adding 11ac so their gear can communicate at higher speeds, which is especially needed for video. Antes said, “Finally we’re starting to see the rollout of major manufacturers’ mobile phones and tablets, and soon, PC products, equipped with 802.11ac.”

Apple, Samsung, HTC and others are expected to launch devices with embedded 802.11ac.

Antes predicted that during the next six to 12 months, its 802.11ac technology will have been embedded in designs for more than 140 mobile and computing devices and more than 80 networking devices. He also predicted that the corporate market would start upgrading to 11ac.

“The user positions the camera of the mobile device directly over individual vehicle elements, instantly detecting and returning information on the desired subject.”

“They’re all including 802.11ac.”

“A gaming console needs games, put bluntly.”

“With the right product and at the right price, Amazon could give Apple TV, Roku and the other streaming media players a run for their money.”

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Amazon Should Develop an OTT Box, Not a Gaming Console

The latest Amazon rumor has the company developing a gaming console to challenge the big three consoles this holiday shopping. Game Informer is reporting an unnamed source at Amazon indicated the company is developing a console and controller to play Amazon’s library of Android game apps. The source said this console will “most likely” be available by Black Friday, just in time to challenge Sony’s new PS4 and Microsoft’s Xbox One, along with Nintendo’s Wii U.

It’s very unlikely Amazon could release a successful gaming console. A gaming console needs games, put bluntly. Amazon only has Android app games, which users already play on their smartphones and tablets. It won’t be able to compete with Sony, Microsoft or Nintendo.

A Kindle Streaming Media Player Is a Much Better Idea

Amazon would do well to develop and release its own net-top box instead – or perhaps a streaming media player that can also be used to play games.

Amazon has demonstrated a hobby interest in both hardware and OTT services. Amazon should take both very seriously by marrying the two and releasing a new OTT device for the TV set.

It could develop a Kindle-branded streaming media box that comes bundled with Amazon Instant Video credit, or a discounted Amazon Prime subscription, much as it has done with Kindle Fire.

Amazon showed over past holiday seasons that its low priced Kindle Fire tablets offer a competitive challenge to the more expensive iPad and Samsung tablets. With the right product and at the right price, it could release a streaming media player that Kindle Fire tablet owners are compelled to purchase, and give Apple TV, Roku and the other streaming media players a run for their money.

Amazon would need to make sure it has all the right content apps on the box. It won’t do to keep the OTT options to Amazon Prime or Amazon Instant Video. It will need Netflix, Hulu Plus, Redbox Instant and maybe even the TV Everywhere apps such as HBO Go, ESPN Watch apps, Disney Watch apps, and the others. It should also include a promotion for Amazon Prime, to help pick up more subscribers. Amazon Prime offers a large pool of exclusive popular content that might compel consumers new to the net-top box proposition to make the leap.

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Roku Offering Region-specific Content in UK

Roku has expanded its region-specific TV offerings for its UK product. Roku has added a Sky News app to its channel offerings for UK users, as well as an app for Demand 5. The Demand 5 app offer viewers in the UK access to Channel 5’s large library of catch-up TV shows, including series “Big Brother,” “The Gadget Show” and “The Hotel Inspector.” The Sky News app offers on-demand and live, 24-hour news coverage. It has also launched an app on Apple TV recently.

Roku offers around 450 apps to its UK viewers, but adding this type of local TV content is new. “We have always recognized the importance of region-specific content,” said Steve Shannon, who manages content at Roku. “Channel 5 is one of the most requested channels by our customers there.”

Shannon has also said Roku is interested to expand its news offerings.

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Surface RT Attracts a Class Action Lawsuit


Here’s more bad Surface RT news for Microsoft.

A class action lawsuit has been filed against Microsoft and several of its top executives —CEO Steve Ballmer, former CFO Peter Klein, corporate VP Frank Brod and EVP of marketing Tami Reller. It alleges Microsoft “issued materially false and misleading statements regarding the company’s financial performance and its tablet computer, the Surface RT.”

At the end of its June 30, 2013 quarter Microsoft wrote off $900 million of Surface RT products and parts despite having been publicly optimistic about the RT’s sales results until then.

The suit, filed by the law firm Robbins Geller Rudman & Dowd, says that Microsoft officials made misleading positive statements about the Surface RT during the “class period.”

The complaint says the defendants caused Microsoft to issue materially false and misleading financial disclosures for the quarter ending March 31, 2013 and these misrepresented the true financial effect that Surface RT was already having on the company’s financial performance. It says the defendants’ conduct enabled Microsoft to forestall Surface RT’s day of reckoning because the delay would be tantamount to an admission by Microsoft that “its all-important entry into the tablet market had been a failure.” The filing describes some of the steps Microsoft then took “to spur market demand.”

What the lawsuit is based on is that the value of the RT inventory was already “impaired” by March 31, 2013 and that the accused Microsoft executives knew it at that time, more than three months before Microsoft announced the $900 million write-down.”

The suit details Microsoft’s RT venture at:

On its Web site the law firm Shepherd, Finkelman, Miller & Shah, which has no connection to the Microsoft lawsuit, defines “class period” as: “the time during which it is believed the alleged fraud or other securities law violations caused the price of the stock at issue in the case to be artificially inflated.”

In effect then, the Robbins Geller Rudman & Dowd lawsuit is saying Microsoft and the executives named in the suit did not publicly state during the time period [the class period between April 18 and July 18] how poorly Surface RTs had been selling, so poor that $900 million of RT inventory would ultimately have to be written off during the June 30, 2013 quarter.

Time Line

March 31, 2013 end of third quarter

April 18, 2013 public announcement of financials for quarter ending March 31, 2013

June 30, 2013 end of fourth quarter

July 18, 2013 public announcement of financials for quarter ending June 30, 2013

The “class period” referred to in the suit is the period of time between Microsoft’s two public announcements of its quarterly results, a period when Microsoft woulda/coulda known that sales of the Surface RT were going so badly it would have to write off multi-millions of dollars in inventory.

Robbins Geller Rudman & Dowd, which filed the suit in Massachusetts, specializes in class action lawsuits. It says it “has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.”

It also said it is looking for a lead plaintiff in the case.

Microsoft, as expected, said it had no comment on the suit.

What we think: Companies and their executives should not issue false or misleading information about products or financial results, which is what this suit alleges. It’s one thing to overstate a product’s capabilities — that’s an accepted part of sales and marketing. However, it’s quite another matter — and often a legal problem — to overstate sales results. However, suits such as these make it increasingly difficult for executives to talk to the press and financial analysts. Most every telephone interview with company executives these days are conducted with a “PR minder” listening in and executives being very guarded with their answers, which deprives the public of much needed information.

What Now, RT?

In any event, Microsoft says it’s going ahead full-blast with the so far faltering ARM-based RT. It promises new accessories and a new Surface RT by June 30, 2014 — although most expect one, if there is one, sooner than that.

The big question is, “What can Microsoft and the makers of its processors do in the next RT that will make it a success?” In the consumer market it’ll have to compete against, most probably, one or more new iPads and certainly a slew of new Android tablets at both the high and low end of price and capabilities. In the corporate market, iPads will continue to make inroads into what once seemed a computing market that Microsoft owned.

In an ideal world, a $200 Surface RT that ran the full PC version of Windows 8 would certainly be a winner, wouldn’t it? But! First of all, it wouldn’t be an RT. It would be a Pro and Microsoft, even if it could, would not risk losing its high-margin PC business, which it certainly would at that price. It’s a proverbial high-tech quandary. Cannibalize myself now or wait for someone else to do it.

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Touch-Based PCs Not Selling Well Either

Microsoft and Intel counted on people liking Windows 8 once they started using touch-based PCs, especially laptops including hybrid tablet/PCs that have full keyboards. That hasn’t happened, according IDC, which is dropping its estimates on touch PC shipments from 17% to 18% of all laptops shipped in 2013 to between 10% and 15% of all laptops. IDC told Computerworld that high-prices for touch-based PCs are the biggest barrier.

A recent check at Best Buy showed that touch-based PCs are generally $200 to $300 more than non-touch models. One reason for not paying more is that people generally don’t want to take their fingers off the keyboard and mouse to touch a screen when they are using traditional computing apps. Also, most traditional PC computing apps do not support touch screen commands.

As we have reported before, Microsoft’s biggest error in Windows 8 is not having added “must have” features for traditional PC users. In focusing on using Windows 8 to break into the tablet market, it overlooked its enormous user base. Expectations are that it will correct those omissions in the upcoming Windows 8.1 or whatever it calls it.

Microsoft’s experience would seem to indicate that a dual Windows 8 approach would have been better — one for tablets and one for PCs — but that is exactly what it tried and failed. The approach neither succeeded in selling tablets or in reinvigorating the PC market on which tablets have been encroaching. Additionally, price comparisons for both the RT and Pro versions of Windows 8 are priced too high.

C’mon Microsoft, you can do better!

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Connected TV Owners May Be Likely to Cut the Cord

-Bad News For Pay TV

The Diffusion Group has released a new report that finds households with Internet-connected TVs are more likely to cut the pay TV cord than dumb TV households.

TDG’s “Net-connected TV User Dimensions” says connected TV homes are actually twice as likely to be “highly inclined” to cut the cord than households whose TVs are not connected to the Web. Connected TVs refer to TVs connected to the Internet via devices such as game consoles, Blu-players, DVRs, streaming media players (what TDG refers to as “iSTBs”), laptop and desktop PCs, tablets and smart phones.

TDG estimates 8.8% of adult broadband subscribers with connected TVs are “highly likely” to cut the pay TV cords, compared to 3.5% of subscribers with regular TV.

“The fact that on average 7% of this segment are would-be ‘cord cutters’ should be of concern to operators,” TDG said. It said a 7% rate of decline is “simply unsustainable, should these inclinations play out in the marketplace.”

The majority of pay TV subscribers are not inclined to cut the cord, TDG found. 65% of non-connected TV users are ranked “highly unlikely” to cut the cord, as are 54.8% of connected TV users.

TDG’s Michael Greeson said the data shows a strong correlate relationship between owning a connected TV and being highly likely to cut the cord. “Correlation does not imply causation, a law of social science,” Greeson told The Online Reporter. “However, when you’ve seen as much evidence and trending as I have over many years of research on this subject, you naturally start to infer causal relationships.” He said that there is now enough correlative evidence to “convince myself beyond a reasonable doubt that X caused Y.”

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Cablecos Expand Corporate Broadband Market Share

Cable TV companies are flexing the same muscles in business broadband as they have been doing in consumer broadband. They now account for 25% of the US corporate broadband market and are expected to increase their market share even more in coming years, according to a Heavy Reading Cable Industry Insider report “Cable Operators & Ethernet: Serious Market Share.” It said much of the growth would come from Comcast’s business services division.

The report’s author Steve Koppman said cablecos “continue to take advantage of specific competitive strengths in their relatively new MPLS-based networks, next-generation architectures, combinations of ubiquitous HFC networks with substantial fiber ones, generally lower overheads than incumbents and a focus on Ethernet as their prime data service and lack of concern with preserving competing legacy data.”

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Leichtman: 42% of the Pay TV-less Pay For OTT

-While the Majority of 58% Don’t

New research from Leichtman Research Group (LRG) found 42% of non-pay TV subscriber households do pay for at least one OTT service, whether Netflix, Amazon Prime or Hulu Plus. The data, gleaned from 1,319 phone surveys, found 40% of those surveyed subscribe to Netflix, 11% subscribe to Amazon Prime, and 7% subscribe to Hulu.

The other 58% of the non-Pay TV subscribing households reported they don’t subscribe to any OTT services, either. Presumably, they are watching over the air broadcast with their digital antennas.

The study found that 8% of households in the US are watching OTA broadcast content, down from10% measured in 2010. LRG said another 6% watch a combination of OTT and OTA programming. Only a measly 1% reported they weren’t pay TV subscribers because they “can watch all that they want via the Internet or Netflix,” the report said.

The findings are part of LRG’s latest report, entitled “Cable, DBS & Telcos: Competing for Customers 2013.”

Some Cord Cutters Are Flip-Flopping

LRG’s data suggests that there is some degree of flip-flopping among cord cutters, lending credence to the reasoning that cord cutting is mainly an issue of economics, not want.

LRG found 10% of non-subscribers had subscribed to a pay TV service in the past year, and 7% indicated they were interested in signing up for pay TV again in the next six months. The study found that about 1.4% of all TV households subscribed to a pay TV service in the past year, but currently do not – a similar rate to the past five years. Furthermore, 5% of current pay TV subs were at one point not subscribers in the past two years. In other words, a number of these “no pay TV” households are recent and/or temporary cord cutters.

LRG said around 86% of all US households currently subscribe to some sort of pay TV service, down from a perceived peak penetration of 88% reached in 2010. LRG pointed to the “larger increase in the number of rental housing units,” as cause of this decline.

It found that nationwide, 20% of TV households with annual incomes less than $50,000 are “no pay TV” households, while only 9% of households with incomes above $50,000 don’t subscribe to pay TV. LRG said that division has been consistent for years.

The study also found the average price for a pay TV subscription has increased almost 6% over the last year to reach $83.25.

The bottom line? “Economic factors appear to be as strong a force in shaping this market as the emergence of over-the-top alternatives alone,” principal analyst Bruce Leichtman said in the report.

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Numbers Point to 1st No Growth Year Ever for Pay TV

– Major Consequences

– Pay TV Will Increase Their Own OTT Capabilities

– Local TV Stations May Selectively to OTT Selectively

– Opportunities to Open for OTT Services

Point to any statistic you want but there’s one overwhelming fact: when you’re watching an OTT service like Netflix on the TV, you are not watching a pay TV channel or any of its ads. That is mitigated by another fact: in today’s Internet-everywhere world every person has their own individual viewing screen so, unlike the days when everyone sat around the TV and watched the same show, each person is watching their own thing. The net result is that many more videos are being broadcast and streamed into the home but many, perhaps most, are coming from an OTT services not pay TV companies.

The net result of this change is good for the pay TV services because they are increasing their high profit broadband revenue and bad for them because they are losing pay TV revenue, although that has a much lower profit margin. Ask any pay TV services if they had to make a choice, would they prefer to own the broadband portion of their business or the pay TV portion.

The pay TV services may soon have to ramp up the OTT portion of their business by offering Netflix and iTunes-like services.

The Wall Street Journal reports that the total US pay-TV market lost about 208,000 subscribers in the first half of 2013, against a net gain of 27,000 in the first half of 2012, according to UBS. Pay TV subscribers were down 0.10 percentage point while at the same time the total number of occupied households is increased 0.40 percentage point.

USB predicts that the US pay TV companies will lose 250,000 subscribers this year. Based on that, UBS estimates the industry will finish the year with a net loss of 250,000, a tiny trickle of the 104 million total pay TV subscribers. If that happens, it would be the first ever annual decline in pay-TV subscribers.

Last week, we reported that Moffett Research estimates over 900,000 households have cut the pay TV cord over the last 12 months. That’s a good deal more cord-cutters than measured in 2012, which Moffett pegs at 258,000. Moffett said the pace of cord cutting is quickening, too. The past 12 months have seen pay TV subscribers decline by 316,000 households, marking the third consecutive quarter that the overall pay TV industry has been in decline.

If the trickle of cord-cutters turns into a stream, here’s what could happen:

– Broadband providers will begin pressuring OTT services to pay-for-play, at least for playing their videos at consistently high resolutions.

– Pay TV services will increase their resistance to the increasing costs that content owners are charging. Bundling deals will be more difficult to put together. Channels with small audiences will be shut out. Blackout such as the current one by Time Warner Cable of CBS-owned local stations will increase.

– Pay TV services will ramp up their own OTT services in competition with the likes of Netflix and iTunes but also in competition with their own pay TV services — cannibalize themselves now or wait for someone else to do it. The days of trying to keep their cake and eat it too are ending.

– Pay TV channels with low ratings and content producers will increasingly turn to OTT services to distribute their content.

– OTT services will begin to offer more live shows — sports, weather, interactive programs and news — and eventually will begin bidding on live events such as sports and awards ceremonies.

The point of no return will be when one or more of the national TV networks — ABC, CBS, NBC or Fox — begins offering its live content via an OTT service. Let’s say for example that Apple approached CBS to offer CBS shows to Apple TV owners, even if only temporarily, in New York and other cities where its shows are not now being aired on Time Warner Cable (TWC). Apple would certainly get a warm reception. So would Intel, if it’s ready to start shipping Intel Media boxes, and maybe even the pariah Google with its Chromecast and Google TV. So might Roku, as would Microsoft and Sony with their gaming stations. We did not list Aereo as a possible alternative distributor of CBS content, even though technology wise it can and does, because of the fierce legal war that’s going on against Aereo by the local TV broadcasters.

Time Warner Cable might even be a winner, as would the local telco, in such a scenario if it sold more broadband subscriptions and upgraded existing subscribers to higher speeds. TWC would also be relived not to have to pay CBS hefty retransmission fees.

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Roku Winning Streaming War with Apple TV

The number of households with streaming media players has doubled since 2011, and now accounts for 14% of broadband households in the US, according to Parks Associates.

It identifies Roku as the most-used streaming device. In a survey of 10,000 broadband homes, Parks found that 37% of households with streaming media players said they use Roku devices primarily for streaming, while 24% said they use Apple TVs primarily for streaming.

That’s a surprise because Apple said it has sold over 13 million Apple TVs, while Roku has said it’s sold 5 million.

Parks predicts the number of connected TV devices sold worldwide will reach 330 million annually by 2017, close to double the number to be sold in 2013. It said it expects prices for these devices to decline, and revenue to increase close to 100% by 2017, as more households buy smart TVs, gaming consoles, Blu-ray players, and streaming media players.

Parks said OTT devices, such as streaming media players or Blu-ray players with OTT apps on them, are poised to thrive in the current market because consumers are hesitant to replace a still-working TV with a new TV simply to connect it to the Internet. Instead, consumers can purchase these much, much cheaper ancillary devices and get the same results – and probably a better UI.

“Innovations such as next-gen game consoles and 4K TVs will boost unit sales for these devices, but overall, consumers are reluctant to replace these big-ticket items solely for smart upgrades,” the report said. “Devices such as Roku’s streaming players and Google’s Chromecast will benefit from these market conditions.”

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Consumers Tap Social Networks for Content Discovery

Internet video search engine Blinkx has released the results of its “Nation of Sharers” study that focused on search behavior. The study found that consumers rely heavily on their social networks to find new things to watch.

According to Blinkx, 40% of people aged 18-34 prefer to use their social networks over search engines when looking for content online, and conversely, 85% of 18-34 year olds regularly share videos online after watching through their social feeds.

The takeaway here is that social discovery – a form of recommendation – is taking precedence over search-based discovery. “The reliance on search in its traditional sense is falling,” the report said. Personalized recommendations are much more useful to the viewer.

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‘There’s Never Been a Better Time to Buy a New PC’

– That’s True, So Why Are Consumers Buying Tablets Instead?

“There’s never been a better time to buy a new PC” is the message that Intel was communicating to journalists in a luxury box at New York’s Yankee Stadium one night this week. It was showing off Ultrabooks from Acer, Dell, Lenovo, Toshiba and Sony, all of which use Intel’s newest Core processors. Many were of a hybrid laptop/tablet design that could be used like a tablet with an on-screen keyboard or as a laptop with a full keyboard.

Intel was also heralding a survey it paid IDC to conduct on how consumers view PCs. The study found:

– 97% said PCs are their primary computing device.

– 83% said they are more productive on a PC than on a smartphone or tablet.

– Of those, 41% say they intend to buy a new PC in the coming year and 54% of parents and millennials agree.

– For most, a PC is essential. Asked what they would give up before losing access to their PCs for a week, 73% said exercise, 71% said candy and sweets, 65% said caffeine, 58% said TV and 33% said their cars.

– Total time spent on computing devices of any kind amounts to 43 hours a week, but more than half of that time — about 21 hours — is spent in front of a PC.

Keep in mind that Intel (and Microsoft) pooh-poohed the tablet form factor when Apple introduced the first iPad. Yet, all the statistics show that tablet sales are booming globally, PC sales are declining. So, Intel and Microsoft are pulling out all the stops to develop popular Windows tablets, yet at the same time Intel is doing all it can to get the PC market increasing again.

Most consumers still consider PCs as their primary devices for “computing,” but ask them about email, browsing and shopping and their replies are increasingly tablets and smartphones, two markets where Intel and Microsoft have lagged badly, very badly — so badly that their market shares are less than 10%, non-existent in some cases.

Intel’s statement that there has never been a better time to buy a PC is quite true. Absolutely! PCs have more functions than ever. Reliability, at least since the Vista version of Windows, has never been higher. The problem is that they just don’t lend themselves to the ease-of-use, such as starting time, doing software upgrades, being free from viruses and hacking plus usage between battery charges. Consumers don’t like expensive and lengthy upgrades. They want a wider selection of both free and for-pay apps that iOS and Android tablets offer.

There’s another problem. PCs made in the last three to five years are still working well and consumers for the most part are doing everything they want with them. Even though many PCs in consumer homes are four years old or older, consumers have no urgent need to buy a new one. Give Intel and Microsoft credit for that because that statement was not true ten years ago. Consequently, consumers would rather buy smartphones or tablets rather than new PCs because they don’t have to replace the ones they now have. Microsoft made a great mistake in not trying to add some features to Windows 8 that would create any urgency. It could be that because of the maturity of the Windows PC market there are no “must have” features left to add, especially now that unreliability has ceased to be a daily problem.

Microsoft’s attempt to make Windows into a tablet operating system has failed so far as shown by the sales results and Microsoft’s $900 million write-off of Surface RT tablets. As we have previously reported, Intel and Microsoft need to focus on a low-cost, low-power tablet that’ll run the full PC version of Windows. They then have to spend lots of money on a) helping every Windows software developer convert or rewrite its software to take advantage of a touchscreen, b) subsidize developers of popular tablet apps to port their apps to Windows and c) send all of their sales people, and all of the sales people of all of their PC makers, out to save the corporate market for Windows-based portable devices while it’s still savable.

As for the consumer market, Intel and Microsoft Windows will have to offer a tablet that runs the full PC version of Windows for under $500, perhaps even below $400. An ARM-based tablet that does not run the full PC version of Windows will have to sell under $300, at least its entry model.


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Massive Disruptions Coming in How Video Is Delivered to the Home

Over the next ten years disruptive technologies will change the media industry and the way video entertainment is delivered to consumers, according to a new report from Rethink Research.

The report focuses on six major issues that will have the greatest effect on video infrastructure:

  • TV will shift to OTT streaming
  • Wi-Fi will become the leading wireless network for delivering content
  • Some 75% of TV viewing will shift to tablets, savaging sales of TV sets forever
  • Massive social viewing platforms will lead major motion picture releases
  • Unbundling of pay TV channels will lead to the death of 75% of TV channels
  • TV Everywhere will become the world’s largest app

The report identifies the creaks, lurches and in some cases, entire collapses of the rich seams traditionally mined by media and technology companies. It says that during a period of technological change, the ownership of entire industries changes hands, as some companies try to support the status quo, while others embrace the change.

The digital media eco-system is faced with a massive amount of disruption. So much so that every business layer of video and content delivery is potentially threatened with oblivion. The report is vital reading for anyone in every business layer of video and content delivery that doesn’t want to be caught in the cross-fire and that wants to build a strategy to survive and thrive in the ensuing eco-system.

The 63-page report is produced by Rethink Research in association with Rider Research. To receive prices and a free extract of the report, please email a request to:

Free Reports: Tablets in the Enterprise: iPads in Trouble? and Picking the Right Enterprise Tablet

J Gold Associates’ Technology Brief newsletter, aimed at the enterprise market, highlight some key market trends and technology issues that are important to its corporate clients. Included in the latest report are the following articles:

– Picking the Right Enterprise Tablet: Things to Consider

“…Many companies have no formal strategy regarding tablet selection and deployment. Enterprises must rationalize the desires of end users with the specific needs and limitations of the organization…”

– Tablets in the Enterprise: iPads in Trouble?

“……The move to corporate purchased tablets heavily favors the mainstream suppliers of enterprise products (eg, Dell, HP, Lenovo, Microsoft, Intel). We expect a gradual decline in enterprise iPad deployments over the next 2-3 years, … Android’s market share will exceed iOS … Windows will power 15%-20% of enterprise tablets…..”

– MFA Gets Mobile (Multi-Factor Authentication)

“…Most companies… should be actively involved in finding ways to implement MFA… We expect to see many more offerings in this space over the coming 1-2 years, and advise organizations to add this tool to their mobile security efforts…..”

If you or someone in your company would like to receive a free copy of this newsletter, which is published periodically, please email:

This is an archived edition, for the latest copy and a chance to evaluate current analysis, please write or register for a four week no-obligation free trial



Gates on Google’s Balloon Broadband Venture

Bill Gates in a BusinessWeek interview when asked about Google floating balloons in less-developed countries to provide broadband: “When you’re dying of malaria, I suppose you’ll look up and see that balloon, and I’m not sure how it’ll help you. When a kid gets diarrhea, no, there’s no Web site that relieves that. Certainly I’m a huge believer in the digital revolution. And connecting up primary-health-care centers, connecting up schools, those are good things. But no, those are not, for the really low-income countries, unless you directly say we’re going to do something about malaria. Google started out saying they were going to do a broad set of things. They hired Larry Brilliant, and they got fantastic publicity. And then they shut it all down. Now they’re just doing their core thing. Fine. But the actors who just do their core thing are not going to uplift the poor.”

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Vevo Coming to Apple TV

The latest edition to Apple’s TV offering is OTT music video service Vevo, which announced this week it is now supporting Airplay and will be launching an app for Apple TV later this year. Vevo is developing an app for its Vevo TV service, a lean-back music channel that plays music videos 24-7, much like a linear channel.

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MTV Streaming Episodes Directly to Xbox 360

Viacom’s MTV channel is offering full episodes of shows “Catfish,” “Teen Wolf” and others directly on its Xbox 360 app. Of course, to access the shows viewers must have an Xbox Live Gold subscription, and also must be authenticated subscribers to the pay TV providers that have a TV Everywhere deal with Viacom. That leaves out Dish Networks and Comcast subscribers.

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NBC Buys Video Streaming Start-up

NBCUniversal is acquiring Stringwire, a fledgling Web service that anyone with a phone camera to stream live video feeds to a control room. Vivian Schiller, the chief digital officer for NBC News, told the New York Times NBC might use the technology in its broadcast news. NYT said the acquisition is more of an acqui-hire for Phil Groman, who developed the technology.

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Aereo CEO Sees Profit Before 1m Subs

Aereo CEO Chet Kanojia said his OTT service would see profit before reaching the 1 million-subscriber mark. Speaking to a group of entrepreneurs in New York, Kanojia said Aereo would become profitable with hundreds of thousands of subscribers. Aereo hasn’t released any official numbers on subscribers yet.

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M-Go Jumps to Vizio TVs

OTT service M-Go will be available as an app on Vizio smart TVs and Co-Star streaming media players. Vizio TVs released in the last year have a dedicated M-Go button on the remote, making M-Go the default OTT app for movies and TV shows. M-Go offers titles for purchase or rental in the earliest digital release window, and offers TV shows the day after they broadcast. M-Go CEO John Batter said the deal would enable M-Go to go live on millions of Vizio smart TVs and streaming media players.

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Comcast Speed Upgrade a Coincidence? Probably Not

Comcast has upgraded its bare bones broadband offering, the Internet essentials program, to 5 Mbps down and 1 Mbps up, to match Google’s lowest tier fiber to the home offering, GigaOm reports. Looks like Google’s plan to poke the broadband industry is working.

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LG and Azuki Working on the Next Streaming Dongle

Azuki Systems and LG are developing a new streaming media dongle aimed at pay TV providers. The streaming stick will be Android-based, will connect to a TV’s HDMI port, and will deliver authenticated TV Everywhere apps, transactional VoD and cloud-based VoD services. That way, pay TV providers will be able to offer an OTT platform that is relatively inexpensive and that subscribers can install on their own. Azuki said the dongle is “designed to help service providers accelerate their transition to IP Video and deliver next-generation TV Everywhere services,” and will include “the ability to allow users to purchase TV content subscription once, and watch it anywhere,” in true OTT fashion. But subscribers probably won’t be able to watch Netflix on the TV set with the dongle – they will still need a separated device for that. LG and Azuki haven’t named any MSO clients for the dongle yet.

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