Category Archives: Broadband

Everything you know about media is changing dramatically

I mean it. Everything. The media and entertainment industry as we have come to know it is being disrupted, and so is this blog, more on that later. Where to start? Because I did say everything is changing.

Broadcast is dead

Until I spent time this week wandering the exhibit hall and attending talks at INTX 2016 this week, broadcast’s obituary was going to be buried a little deeper in the post. I frontload so heavily because I know how long the average reader spends here. Although I am tempted to name my posts something like “20 things are changing in the media and you won’t flippin’ believe number 19” and then present it as a slide show, I respect your time enough to make but the important stuff first.

We’ve been declaring broadcasting has been braindead for years, but now it’s time to start harvesting the organs. Sports and regional news won’t cover the bill to keep the ventilator pumping indefinitely.

The spectrum currently used by digital television would be put to better use quenching consumers’ insatiable thirst for wireless bandwidth. To that end, the FCC has allowed broadcasters to opt into the Broadcast Incentive Auction. The idea here is simple. Give up spectrum so it can be licensed to wireless providers for 5G service and make some money. As a disincentive to hoarding and holding for a higher price, the first part of the auction is a reverse auction, so it pays to get in early.

As infuriating as it might be for a taxpayer to watch broadcasters profitably sell back to the public airwaves they lobbied so hard for and swore they could not live out, you have to feel a little bit sorry for the dinosaurs now that the asteroid is in sight. I’m partial to the EU’s approach of reallocating the spectrum over 700 MHz for wireless and simply assigning new VHF channels to broadcasters, but here in the US corporations are people too, so we just can’t act in the public’s interest for the sake of the public interest. We have to think of the lobbyists.

Variety had a great explainer on the auction in March. My favorite numbers gleaned are below.

info graphic

The final act of this play will be streamed

Once the video over IP’s latency problem with live events is solved broadcast will have completely outlived its usefulness. We will have reached a point where even the Super Bowl can’t save it. Currently IP network latency delays live events up to thirty seconds. As an MLB.TV fanatic, I have to put the mobile down to enjoy a game otherwise I’ll witness the Twittersphere lighting up before I even see the batter step into the box to crush the game winning home run. For sports to remain a communal activity in the age of social media, latency has get down to about two seconds.

That date is very near. Using a combination 4G LTE bonding and some really nifty video file wrapping tricks, the Israeli startup Zixi has reached that bar with image quality that rivals today’s Xfinity and FiOS pictures. It’s just a matter of adoption. I put it at 24 months for Zixi or a rival technology to make broadcasting over the air obsolete.

The passing of traditional broadcast is interesting enough. In fact, I could stop here and call it a post except that I said everything was changing. And, dammit, everything really is.

Move over Viacom, Fox, and Disney

Amazon, Netflix, Google, Apple, Netflix, Facebook, and Microsoft all want to steal your lunch money. Wall Street believes they will, and these things become self-fulfilling prophecies in short order. They all already own or aspire to own a significant portions of the entertainment value chain. Microsoft and Facebook are longer shots but somewhat more interesting because they are not just looking at the traditional media value chain, but are approaching M&E through significant investment in gaming and VR. For them it comes down to whether VR technology will be ready for primetime soon enough. If one of them wins, just read Ready Player One to see how the story ends. Google’s gotten into VR as well, but it gets lumped it with the others due to its ownership of the world’s most successful online video platform. And how many OVPs does the world really need? Hint: The answer is not greater than two. One rare bit of investment advice from this publication… short OVPs and go long on CDNs.

It going to come down to who can afford to front the large sums of money to create tent pole content, who can store and protect it throughout its lifecycle without losing it to theft or in a theme park fire, who can monetize it effectively, and who can deliver it efficiently. That’s what will determine the winners. Amazon with Elemental and Apple with all its video expertise are positioned for an epic battle. Apple has the edge in video smarts while Amazon has the edge in distribution, pricing, and packaging smarts. How will Apple compete against free two-day shipping for underwear and great programming for $99 a year? Whatever the tech giants come up with will certainly beat a $300 a month cable bill.

Where’s Google in all this? I can’t help but feel that Google will mess it up. Media and entertainment is all about user experience. Google simply doesn’t value design and user experience enough. YouTube and Gmail are still ugly after all these years. While an email client can be ugly and a little clunky as long as it’s free and the user never loses anything, the presentation layer for the night’s entertainment should be inviting.

IaaS the big play

The real money in media then is infrastructure as a service. What Avid, Grass Valley, and the like have done in the past must now become exponentially bigger, more robust, and more open. Avid is right. The industry is crying for a platform. Unfortunately for Avid, it’s crying for a platform a mid-sized tech company doesn’t have the resources to provide. Amazon with Elemental is already closer to realizing Avid’s dream than Avid is. A lot of small players have the necessary pieces built to connect to a network, a larger company, not viewed as  a direct competitor by potential partners is better positioned to roll them up into a unified platform offering.

Simplifying it a bit, whoever can provide the storage, rights management, and monetization tools will win. Dell-EMC is extremely well positioned to contend in that space with its hardware, virtualization expertise, and storage smarts. It makes the servers and intelligent storage. It owns VMware and Virtustream, so it will be able to provision data centers like no one else. Dell-EMC should be able to take a commanding early lead repurposing hardware in real time as audience usage patterns change. Add an acquisition like Telestream or Harmonic, and we have a new media and entertainment powerhouse.

IBM is the cicada in all this. Once every few years IBM shows interest in M&E only to shift focus shortly thereafter. With the right timing, IBM could get lucky.

Over the next few years, the remaining media-specific tech companies will have to become more focused on their core competencies. Their customer bases are buying less, forcing them to compete in a race to the bottom in a shrinking pool. While all are moving as nimbly as they can to make the transition from signal-based to IP video, they are faced with R&D resource limits and the drag of legacy customers such as large state broadcasters moving more slowly to the future.  These legacy customers account for significant portions of media tech’s revenue stream and cannot be ignored until the business transformation is complete.

Acquisition and Post are about to be disrupted too

Camera evolution is the total wildcard that can change the whole production and post process dramatically. When light field cameras get high enough resolution and come down in cost, the cost of shooting will drop dramatically due to shorter set up time and the need for fewer cameras. Composition, focus, lighting, tracking and green screen will all be handled in post, much of it algorithmically. Editing becomes a smaller part of the post process with DPs, directors, and VFX taking on larger roles once shooting stops. As post production for the 2D display requires more 3D capabilities, look for the post solutions market to bifurcate with Adobe taking the lion’s share with a combination of Avid and Autodesk tools owning the extreme high end. Don’t be surprised to see Media Composer land at Autodesk, or Autodesk’s media and entertainment business go to Avid. A number of former (and extremely talented) Avid engineers are now in Autodesk’s media and entertainment development organization.

Adobe has a leg up in the light field world. These cameras have been in development for some time. Light field still image capture is already available to the market, and Adobe has tools under development to enable Photoshop, Lightroom, Premiere, and After Effects to thrive in this new world.

How media is created, distributed, and consumed is all changing. No career in media will be untouched. No company will be sheltered from the disruption. Be agile. Embrace the disruption.

Everything includes this little nook in the internet

I will follow my own advice by embracing disruption and becoming more agile. It will no longer be focused exclusively on media and entertainment technology. Instead I will draw upon my experience of the past fifteen years in technology design, development, and product management. I will adjust my gaze away from LA and put more focus closer to home in the technology hotbed of Boston.

Broadcast, Broadband, and OTT

ott

Last week the Pew Research Center published its findings on Americans’ broadband consumption. The tectonic plates defining the digital divide have shifted somewhat over the past year.

..home broadband adoption seems to have plateaued. It now stands at 67% of Americans, down slightly from 70% in 2013, a small but statistically significant difference which could represent a blip or might be a more prolonged reality. This change moves home broadband adoption to where it was in 2012.

This trend has accompanied an uptick in Americans whose only broadband access is delivered via smartphone. The Pew article goes on to note pertinent demographic trends as well.

  • People still overwhelmingly prefer to watch video content on a larger screen through a standard in-home broadband connection when possible.
  • A significant proportion of smartphone-only access people cite cost as the major reason they do not have a home broadband connection

This portends several possible outcomes.

  1. Some people will shift viewing from traditional cable and OTT to IP-delivered content over LTE.
  2. These customers will often face data limits imposed by carriers, excepting the T-mobile binge plan.
  3. The LTE-only demographic may be less desirable to advertisers than other OTT viewers, and may cause content distributors to shy from advertising models to paid subscriptions when accessed via LTE.

The study also counts 15% of Americans as “cord cutters.” Not surprisingly, this market segment skews young, so it’s reasonable to assume the cord cutting trend to accelerate as the millennials start their own households. Hold that thought.

Broadcast trends

Some have spoken about the consolidation in the broadcast industry as a parallel to what happened around the turn of of the century in the newspaper business. That’s an over simplification. Broadcasters have one significant business advantage over their print media counterparts. They hold licenses for access to a very valuable and finite resource, spectrum. Local broadcasters have also fared better than print brethren at stemming the tide of disintermediation by the Internet. Broadcast TV, even when delivered via cable, is less expensive to the consumer than streaming services on a per minute basis. Further, broadcasters have done a very good job of maintaining their brands on the Internet, breaking the story online and adding depth (to the extent one can in two minutes thirty seconds or less) on air at 6 PM.

Rather than a pure play for synergies and operational efficiency, broadcast consolidation in the US is mostly a spectrum grab. Now that the FCC is planning the first Incentive Auction permitting channel sharing among broadcasters and wireless Internet providers, that spectrum is only likely to go up in value.

Make no mistake. The broadcast industry is experiencing a sea change. Less emphasis will be placed on traditional broadcast operations with more emphasis on multi-platform distribution. Everyone participating in the value chain will need to adapt.

The irony is that although more bandwidth will be available to consumers for broadband, enabling them to cut the cord, less over the air content will be there for free.

 

Has consumer cloud-based editing arrived?

Recently I was sent a link to an article about JayCut.com. Because I work for a publicly traded company that develops non-linear editors of both the executable and cloud-based kind, I don’t think it’s appropriate for me to get into the specifics of any vendor’s software design or business model. Anyone who saw Avid’s web-based editing demo at NAB or last May’s Editors Lounge has seen Avid’s vision of what editing in the cloud can be.

Long before taking up NLE design as a vocation I was enamored with the idea true “online” editing. Years ago I was a fan of JumpCut — the online editor eventually bought, then shuttered by Yahoo!

JayCut UI

JayCut's UI is similar to those of consumer-facing online editors before it. Is its fate going to be similar too?

If Yahoo! couldn’t jump start JumpCut, what would make a someone attempt a consumer-facing web-based NLE again? The world has changed a lot since 2006 when I first encountered JumpCut. Here are just a few of the shifts that might make a consumer-facing NLE viable.

  • Smart phones are the new camcorder. Nearly everyone under 35 has a phone capable of recording video. Assuming an unlimited data plan, sending even large files to the cloud is a lot easier than waiting to get home and tethering the phone to a PC to download videos. (JayCut can only do this from Android phones currently.)
  • Facebook and YouTube are the de facto publishing platforms of the Millennials. They don’t make DVDs. They don’t even do email. If they want to edit their video, they will want to do it where their video lives.
  • Cisco with its Flip cameras and other online players are interested in consumer video to drive traffic and revenue. Linksys + Flip = Lots of Cisco hardware being sold to ISPs.

Unlike JumpCut, JayCut is not a pure consumer play. It offering includes video distribution software and services for business, differentiating itself from Brightcove somewhat as a tool for online collaboration. (Mashups with a more adult-sounding name.)

Also entering this space is Kaltura.com/.org — an open source online video editing and distribution platform with a nifty WordPress plug-in to boot. Kaltura will host your applications and content, and also allows for DIY on your own server. The Kaltura player also allows for collaboration. Blog admins can set permissions for user to add, comment, and edit videos embedded in a blog post.

Perhaps these tools are still ahead of their time. But if not 2010, when?

Not much there in Netflix deal

So Netflix is paying $1 billion to Epix for the rights to stream titles from Paramount Pictures, Lions Gate and MGM. This could have been a big deal, but it preserves the cable networks’ 18 month exclusivity window. At the end of the day the Roku box remains a gateway to sometimes good, but somewhat stale Hollywood fare.

HBO and friends live on for a few more years as they evolve their businesses. Cable companies can continue to force customers into bundles that lump four or five “movie” channels showing pretty much the same stuff. Do cable companies see their reign coming to an end, and are just cash cowing their existing business models? It’s clear the “movie” channels are weaning themselves from studio fare. They continue to expand their original programming efforts — and doing it quite well. But what about the cable companies? Beyond caller ID on my TV for the phone line no one in my family uses, we’re not seeing a lot of innovation from Comcast, Charter, and company.

A more disruptive deal from Netflix would have forced big cable’s hand. We’ll just have to wait until the next round of studio deals with distributors to expire.

Google gets in the man’s face

This morning while taking a shower I heard an interesting piece on NPR. The Obama stimulus plan included $7 billion to upgrade the nation’s broadband infrastructure. Looking back at FDR’s rural electrification program, what’s not to like? For one, a lot of applicants are applying from places that already have broadband access – they just don’t like how much it costs. That’s not in the spirit of this supporter’s backing of the program. But I digress. For as much as I don’t like the idea of parts of the nation geiting cheaper broadband before other parts of the nation get any, the more egregious behavior (as we’ve learned to expect) comes from the near monopolies who have chosen not to deliver broadband access to the outer reaches of their territories. Somehow this public option (and someone on the AM dial will call it such) is patently unfair.

Look, if the second most hated industry, the health insurance behemoths can get the very people they’ve spent the last couple of decades screwing to pile onto the street en masse to defend those insurance companies’ right to screw them. Why shouldn’t the most hated industry, the cable and phone companies stand up for their constitutional right to screw Americans? Surely Glenn Beck will rally the troops. Yep, the largest (and bankrupt) ISP in Maine, FairPoint is fighting rural broadband. I can just see it —  they get a bunch of folks storming the Augusta legislature demanding the socialists in Washington keep their paws of their cherished 56k connections.

Typically this is one of those stories where the outrage lasts all as long as a sound bite, but I was reminded of it reading this Times article. Google’s decided the Internet is too slow. Megabits? Who cares? We need at least a gigabit to the home.

First the company stands up to the Chinese Communists, then it prods the US telecom industry to deliver decent service. How about Larry Page and Sergey Brin run in 2012? Unlike most corporate weasels, Google doesn’t throw its money at lobbyists to plead their case in the halls of corruption and moral bankruptcy. Google spends its money proving its point in the real world.

In an interview, Richard S. Whitt, Google’s Washington telecommunications and media counsel, said Google did not see the test as a new business venture as an Internet service provider, but rather as an effort to push the industry into offering faster Internet access at lower cost.

“We are not getting into the I.S.P. or broadband business,” said Mr. Whitt, using the industry shorthand for Internet service provider. “This is a business model nudge and an innovation nudge.”

Whatever. Just keep sticking it to the man and we’re good. Now if only Google wanted to nudge the healthcare industry.

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