Tag Archives: Fcc

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.

 

How Comcast blew it

Earlier this week I wrote at PVC of my belief that 2009 can be a big year for independent video producers. Two things have to happen for my dream to come true.

  1. The transition to DTV has to be completed on time, and the auction of the 700 MHz bandwidth has to be open to newcomers like Apple and Google – WiFi everywhere, WiFi for all!
  2. Net neutrality has to be maintained. Small video producers need equal access to the network.

The post coincided with the FCC hearing at Harvard Law School. Briefly stated, Comcast was being accused of limiting the bandwidth available to BitTorrent users on its broadband network. I’m all for net neutrality, but rising to the defense of weasels pirating content via BitTorrent makes me uneasy. Yet, for the greater good that’s where I came down. Comcast has no right to determine whose bits get moved along faster. Nobody signed up for that.

Now here’s what I don’t get. If Comcast wanted to get the BitTorrent weasels off its network, why not just start charging for uploads. Every plan comes with a couple of hundred megabytes upload allowance. Go over that allowance, and you get whacked. P2P networks like BitTorrent require users to make content on their machines available to others on the network. Once that starts costing money, people will begin opting out.

Instead Comcast ticked off the Republican chairman of the FCC. Considering the FCC has been big media’s rubber stamp since the Reagan era, that’s just Comcastic!

Some good background:

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