We will ALL be metered to death for bandwidth consumption in an a-la-carte TV channel universe.

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One of the results of the merger between Comcast and TWC will be how Comcast plans to halt the cord cutters and deal with the calls for unbundling the current TV landscape. Pay and cable TV are ripe for disruption. The writing I think is on the wall.

OTT (over-the-top) IP channels exist because they are carried into your home via IP. So is Aereo. And soon, so will most other channels today that we all watch on cable. The days of bundling 180 ‘basic’ channels while offering an option to buy ‘Pay’ TV channels with your ‘basic’ subscription monthly is outdated and no longer reflects the current TV landscape. The move to get the set-top box out of the living room is happening. The result? We will no longer have bundled channels or packages of ‘programming’.

Instead, think about this.

Just like the electric meter gets read every month and we pay for the amount of electricity we use, our TV will also become metered. The bandwidth caps will melt away and in its place will be a connection that Comcast will provide — but strictly for bandwidth. Then, as you decide which channels to watch on TV, whether its HBO or ABC, CBS or The History Channel you will be billed for the amount of time each and every channel is turned on in your home, incrementally.

That’s right. Watch HBO for several hours a night and you’ll be billed for this at some rate. (That ‘rate’ might be higher than if you watched VH1 or Spike TV, or lower if you watch ESPN). Want to see ABC and your local news, well that’s a slightly different rate. All channels will be delivered via IP. You will get notified throughout the month when you approach a set tier or amount that you decide is your ‘cap’. Or you can simply keep watching and pay the bill at months end. The bills won’t be too different but now will reflect the REAL usage in the home.

Since you’ll be getting the Internet already through Comcast’s coaxial cable, why not deliver every channel that exists in the TV universe and YOU decide what to watch. Cord cutters can’t cut the cord under this plan — they need bandwidth too (to see Netflix, Hulu, etc.). A DVR you say you need? No problem, Comcast will supply you one over the Internet (a software DVR).

Why might this happen? It eliminates expensive set-top hardware, allows for subscribers to watch whatever they want (package or bundled channels now melt away). It puts all channels on an even playing field. Sure HBO, Netflix, Showtime, etc. might have a minimum monthly charge, but just like electricity, you’ll watch them when you need to and you’ll be bale to see over time your usage patterns, favorite channels and genres and in turn the TV will become smarter because we’ll make it smarter (and make it a very personal experience) to watch, just as its always been.

Now, let me set my ‘soft’ DVR for ‘The Walking Dead’ tonight on AMC. The only time I watch AMC all month is for this show, so I’ll be billed for about 4hrs. a month for AMC during the ‘Walking Dead’ season. And I’ll be happy to pay that bill!

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Update*

I’m now writing for SiliconAlley.com. You can see my latest article.

http://siliconalley.com/blog/2013/06/www-and-the-holy-grail

 

Silicon_Alley

Look Ma no more cable TV! Aereo + Nimble TV + Apple TV + YouTube = Cable Be Gone

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Finally consumers have choice – at least those that have the technical knowledge to take advantage. Want to get out of cable but still have cable channels plus broadcast TV? Your prescription is as follows:  Apple TV, iPhone or iPad, Aereo for $8.00 month, Nimble TV for as little as $24.95 month. No contracts, you can add a virtual DVR and then simply launch a browser on your phone or tablet, login and throw the signal through the Apple TV onto your TV. The combo of Aereo + Nimble will cost no more than $32.00 a month (unless you want more than channels than the minimum) and you’ve got TV. Cable TV channels and broadcast. But more on this in another pub shortly.

(UPDATE:  Aereo is on a roll, with plans now to bring its streaming TV service to Atlanta. The Atlanta launch is scheduled for June 17, the company announced Tuesday. The capital of Georgia will be the third city to get the Aereo service, following New York and, from Wednesday of this week, Boston.  source:  CNET. 5/15/2013

aereo_logo         url4

There are really some other very cool non-cable broadcast channels coming out. I’d them term them ‘off Broadway’ TV channels. Some call them online channels. But they are as good as some cable channel programming offerings and maybe some are even better.

cable-cord-cutting-study-slide1

YouTube’s rumored subscription-plan offering is now a reality. The video site is rolling out a pilot program that will allow “a small group of partners” to offer paid channels on YouTube, with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial period, with many also offering discounted yearly rates.  Some partners include:

The Jim Henson Company is launching an ad-free channel online with full episodes of Henson’s kids and preschool titles like Sid the Science Kid and Fraggle Rock. The channel will be available for $2.99/month or $24.99/year. The company is also launching a Spanish-language channel, which will be available for $1.99/month or $17.99/year.

Sesame Street will also offer full episodes on its paid channel when it launches.

National Geographic Kids’ channelwill be available for $3.99/month or $29.99/year, offering long and short-form videos aimed at kids ages 6-12. It will include a mix of library and original content.

Acorn TV, a streaming service focusing on British classic TV programming, is also launching with a channel that’s available for $4.99/month.

B-movie film director Roger Corman will launch a paid channel this summer called Corman’s Drive-In. It will offer more than 400 feature films that have been produced or directed by Corman. These include Grand Theft Auto (Ron Howard’s directorial debut), The Cry Baby Killer (Jack Nicholson’s first film), and Fire on the Amazon (Sandra Bullock’s first film). The channel will also serve as a potential distribution outlet for new films in production. We love Roger Corman!

UFC’s channel will feature classic fights and full versions of older UFC pay-per-view events. It’s available for $5.99/month.

Then there’s Entertainment Studios, which has launched eight paid channels on YouTube, spanning a bunch of different verticals, from cars to comedy, pets, recipes, and entertainment news/pop culture. One of the eight channels, which is titled Smart TV offers “best of” programming from the other seven networks for $9.99/month.

HuffPost Live will arrive on AXS TV, a network backed by Mark Cuban, CBS, Ryan Seacrest Media, AEG, and CAA, on May 13. The interactive streaming news network will run for six hours a day, from 10am to 4pm.

Yahoo unveiled partnerships including a brilliant the deal with NBC Entertainment and Broadway Video to become the exclusive US home to all Saturday Night Live archival content, and a similar agreement with World Wrestling Entertainment (WWE).  This is especially key now that Seth Meyers is taking over for Jay Leno – the repeats should garner some heavy online traffic that advertisers should eat up.

The Cheap Life with Jeff Yeager, an original how-to show on AARP’s YouTube channel, has topped 1 million video views. The show focuses on providing tips on spending smart and enjoying life at a fraction of the usual cost.

And finally there is the Jerry Seinfeld show Comedians in Cars Getting Coffee. The meaning of something, of course, is relative. show features Seinfeld just cruising along with friends such as Seinfeld co-creator Larry DavidSeinfeld co-star Michael RichardsRicky GervaisAlec Baldwin and Colin Quinn. That covers the comedians in cars; presumably, the getting coffee part will come a bit later. The show debuts on Crackle July 19th.

All in all I’d say online programming is growing up. The cable operators will soon take notice – more than likely too late.

The Unraveling of Television

Much has been written lately about the unbundling of cable TV. But its more than that. Way more.  First, a little history. In 1933 RCA introduced an improved camera tube and this was dubbed the ‘Iconoscope’. In 1941, the United States implemented 525-line television.  By 1947, when there were 40 million radios in the U.S., there were about 44,000 television sets (with probably 30,000 in the New York area). Commercial color television broadcasts began on CBS in 1951.

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Here is where it really gets interesting. In 1951, TV broadcasting was free. Nobody was paid for the use of any content.  In 1957, 25 million Americans watched the broadcast of a musical version of Cinderella. Executives in Hollywood calculated that if they had received a fee of $0.25 per TV set/viewer, they would have netted $6m in one day without any distribution costs.

 

The first basic cable network, launched via satellite in 1976.  That was Ted Turner’s superstation WTCG in Atlanta. Cable is often divided between basic and Pay TV. Basic cable networks receive at least some funding through “per-subscriber fees,” fees paid by the cable TV systems for the right to include the television network in its channel lineup. The fees that the ‘basic’ channels charge have grown and increased almost every year. The size of these fees varies widely. ESPN gets $5.54 per subscriber a month (from each and every cable system that carries ESPN), while Viacom’s MTV gets 41 cents per subscriber. Niche channels get much less. MTV Hits, for instance, gets two cents. The big 4 ‘broadcast’ networks get ‘re-transmission’ fees. CBS expects to get over $ 1b in fees over the next few years alone.  Ironically, cable television in the United States in its first twenty-four years was used almost exclusively to relay over-the-air commercial broadcasting television channels to remote and inaccessible areas.

 

So, cable operators faced with increasing fees every year had to ‘bundle’ channels together into ‘packages’. Which is what we all now have. The question is whether a full ‘a-la-carte’ offering to consumers would be a dream or a disaster for the cable TV industry. I am not attempting to draw any conclusions here one-way or the other.

With this debate going on along comes a service that really begins to make it look like 1951 all over again. And this time its not broadcast or cable, instead its carried over the internet. And that makes it all the more pervasive and certainly disruptive.

 

Enter Barry Diller’s ‘Aereo’ TV. For $8 to $12. a month, you get over 30 channels of programming, including ABC, CBS, NBC, FOX, PBS, movie channels (ION, etc.) Spanish and Asian language programming and even something for the kids, PBS KIDS (which has some excellent shows – move over Nick Jr.). You can record a program while watching another . You don’t even need a physical DVR box, your show is saved online in the ‘cloud’. There are no cables, no antennas and no set-top boxes – nothing, nada. The only thing you need is Internet connectivity. Must you watch it on line? Nope.  If you’ve got an Apple TV or Roku or any Internet connected TV, you’re all set.  Add Netflix or Amazon Prime and you’ve got new movies, VOD and pay-tv programming. Do I really need cable TV too?

 

Aereo is being sued big time by plenty of broadcasters. Its only in NYC right now but in about a month or so, 22 more major cites around the country will offer it.  So, will this cause many people to disconnect their cable TV? Will this prompt the operators to un-bundle everything. Is this the ‘cord cutter’ that’s been talked about for some time now ? I for one would disconnect my cable TV. I hardly watch it. I do want to see the 4 main broadcast networks and have some programming for the kids. Aereo provides this.

 

The unraveling of television has only just begun. Stay tuned.

Confusion Reigns Supreme with Online Movie and TV Streaming Services. Consumers are the losers.

Confusion           caution-mass-confusion  220px-Aereo_logo netflix-appletv   streamingmedia

Recent shifts in technology due to the Internet have destroyed the profitability of several industries including the newspaper and music businesses. The next business that will be made over by technology is television. The profitability of owning TV networks is being undermined by digital video recorders, internet-enabled on-demand viewing, Netflix, Hulu, YouTube, and piracy/theft.  In this post, I’m going to list many if not all of these choices currently available to you and me – and there are WAY TOO MANY. And a lot of amateur content is taking up an increasing portion of a viewers’ time online and on mobile/tablet devices. You Tube has how many new original channels?  I mean unless you’ve got absolutely nothing to do 24hrs a day other than veg in front of a computer and or TV, you can’t ingest even 10% of this content.

Consumption of network and cable content is taking place in ways that allow viewers to circumvent high monthly cable bills, avoid watching commercials, or both. The new Barry Diller backed ‘Aereo’ – https://www.aereo.com/ will indeed disrupt cable and pay-tv as never before. Every single one of these changes represents a move to a revenue model that is less profitable than the one currently enjoyed by the TV networks. It is simply a matter of time before the revenue and profitability of the major networks begins to fall seriously erode.

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Consumers are awash with the plethora choices of streaming movie services, VOD and TV/time shifting programming (between 30 to 40 and counting). There are so many choices that I defy anyone to tell me exactly what they are buying and what each of them offer, specifically how tey are different. Anand Subramanian of startup NimbleTV was even more blunt. “There’s content everywhere. It’s a mess. It’s a total mess for consumers.”

Hollywood-sign-900Hollywood releases maybe 10-12 ‘big’ picture events every year and all of the releases are timed by Holidays (Thanksgiving/Christmas, July 4th, Memorial Day, Halloween, and Labor Day weekends). Independent movies are released around these times and are scattered throughout the year.  Years back when DVD’s were released, those releases in the stores reinforced the theatrical releases with a barrage of marketing. You saw the same big pictures being marketed again in 6-9 months after the theaters. So, when you went to Blockbuster you had a ‘a-ha’ moment. You’d say, oh yeah, I remember that movie, I missed it at the theaters and you would rent it. It was pretty clear what you saw,  what you missed and what you wanted to see again. Then, HBO and Showtime would re-market the same movies in their PAY-TV window approximately 10-12 months after the theaters.  They’d remain there for 24-36 months sometimes even longer.

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When Pay-TV was in its heyday, there was a ‘pay’ content war between HBO and Showtime. Some studios had exclusives with HBO, some with Showtime. To the average consumer, this didn’t mean all too much.  No one wanted to watch a Paramount movie, they wanted to see ‘Fatal Attraction’.  Maybe with the exception of which pay-tv service had Disney movies (if you had kids).  Now, that doesn’t really matter too much as kids watch gobs of shows on basic, Nick Jr., etc.  Over the years, HBO got wise and supplemented its schedule with well produced original programming and still is. Showtime followed with its original programming and both duked it out with Sports, specifically Boxing.

Time shift forward, now it’s a war between Netflix and HBO.

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Its not HBO and Showtime, but Netflix – http://goo.gl/0N2No . And its not only Netflix, it Amazon Prime, Hulu plus, iTunes and a myriad of other streaming offerings.  I’ve compiled a list below. But the bottom line is how does anyone really understand what they are buying? If you subscribe to Netflix, can I see Disney movies? Will I get mega-hit from Universal like Jurassic Park, Les Miserables, and Despicable Me Part 2? Or do I need to subscribe to several streaming services? And, which ones?

And down the road very soon Barry Diller’s back Aereo TV will expand to 22 cities – https://www.aereo.com/. Why is this disruptive if it only offers ABC, CBS and NBC as the primary driver of the service? (more on this later).

abc_logo nbc-primetime-schedule CBS

Here is the list ( I hope I’ve got most included). I’ll admit I am confused as everyone else and I’m not going to buy or subscribe to more than one service especially when I don’t even know that if I do, I’ve essentially duplicated the movies and content I’ve subscribed to.

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Hallmark Instant Streaming – coming Spring 2013

Amazon Prime Instant Video – The Prime Instant Video library consists of over 30,000 movies and TV episodes, which can be watched via any device the streaming service is available on, including the Kindle Fire, iOS devices, Roku, Xbox 360, PS3, and the Wii U.

iTunes

Netflix

Redbox Instant (Verizon)

Redbox in Stores – Physical DVD rentals

Roku

Boxee

CinemaNow – Best Buy’s service plus

Hulu +  – Hulu now has more than 430 content partners, offering over 60,000 TV episodes, 2,300 TV series, and 50,000 hours of total video

NimbleTV – Just like Aereo (Barry Diller venture)

Motive TV – Like Nimble and Aereo from the U.K. heading to the US

Aereo – Just like Nimble TV

Ultraviolet – Studio driven answer. Welcome to DRM land.

Bigstar.tv

Crackle – SONY/Columbia Pictures

Vudu

RedBox (physical rental)

Kaleidescape

Sony Pictures Gift Store – more SONY choices

Flixster – Gateway to itunes, amazon and vudu

IndieFlix

Popcornflix

Cable Operators VOD library ( Time-Warner 4,000 movies + Comcast, Cox, etc.)

OnDemand via cable

Microsoft’s X-Box – a Gateway to Netflix + others.

Comcast’s Xfinity – Over 10,000 VOD movies (lots of NBC/Universal content)

Starz Play

Encore Play

MoviePlex Play –  Starz Play currently offers approximately 400 film and TV titles, including 300 movies and 100 episodes of Starz original series. Encore Play offers about 900 monthly selections, while MoviePlex provides access to 200 more movies every month.

AvailTVN_LogoAvail-TVN’s View Now – ViewNow’s library of movie content includes titles from both major and independent studios, which can be delivered in MPEG-2 and MPEG-4, as well as a range of adaptive bitrate (ABR) formats, to traditional set-tops as well as internet-connected devices like PCs, smartphones, and tablets. In addition to multiplatform rights, Avail-TVN says ViewNow includes download rights on a large number of titles.

M-GoM-Go – new app that elegantly streamlines all of your media together in one place including movies, music, TV and more. Formed in 2011, M-GO is a dynamic well-funded startup sprung from the cooperation of Technicolor and DreamWorks Animation. The M-GO app will be available for download for free on all major operating systems. M-GO is preloaded on 2012 Samsung and Vizio Smart TV and Blu-ray players as well as Intel Ultrabooks, totaling up to 30 million installed devices.

Watch ESPN is now available on Amazon’s Kindle Fire and Kindle Fire HD devices. Free to download via the Amazon Appstore, the TV Everywhere app offers access to live sports and channel programming from ESPN, ESPN2, ESPNU, and ESPN3, as well as ESPN Goal Line/Buzzer Beater when in season. As is the case with other WatchESPN editions as well as other TV Everywhere services, to access the content the viewer needs to first have ESPN in their TV subscription package. In conjunction with announcing the Kindle Fire app release, ESPN also revealed some end-of-the-year numbers on how WatchESPN is faring in terms of distribution and availability. The sports network says that total downloads for the WatchESPN app, which is now available in the App Store, Google Play, and the Amazon Appstore, more than doubled in 2012. It’s now available in 46 million households nationwide as six of the top 10 cable distributors also provide access to the service.

epix-hd-logo1EPIX plans to launch a streaming app for the PlayStation 3 during the first quarter of 2013, followed by an app for the portable PlayStation Vita console sometime in the spring. The apps will offer more than 3,000 titles, including blockbusters such as The Hunger Games, Thor, and Mission Impossible: Ghost Protocol, as well as EPIX’s lineup of original programming, which features music concert, comedy, and sports events. The apps will be available to PlayStation Network members in the US as a free download. Users will need to authenticate their EPIX TV subscription in order to watch the content.

Now about Aereo.  One of the things we all get cable for whether you realize it or not is to receive the 3 main Broadcast Networks, ABC, CBS and NBC. These are on basic cable in 100% of all cable systems nationwide. And basic cable costs at least $ 50-70 a month and 9 times out of 10 its bundled with pay-TV and a phone land line along with internet access bringing your bill to over $ 100 a month.  And generally, one has a Netflix or Amazon Prime subscription (or another streaming movie service).  There are 2 kinds of camps here or cable subscribers, one with kids and the others without kids. For the people without kids, Aereo + 1 streaming movie service (unless you are a sports nut and MUST have ESPN) would be sufficient. You’d have local broadcast TV and all the movies you could watch/stream. What else do you really need (unless you must watch ‘Honey Boo-Boo’ and then I can’t help you). For the families with kids, this is slightly age dependent. Its hard when you have toddlers NOT to want to get several of Viacom’s Kids channels or Disney’s kids channels (Nick, Nick Jr., Disney Channel, Disney Jr., etc. )  If you have older kids, teens etc. a movie streaming service with Hulu + might suffice.  For those without kids, Aereo + a movie streaming service will drastically cut your bill. Aereo I believe will charge about $ 9.00 a month, no subscription or early termination fee (take that Cox, Comcast, Time-Warner and Fios). Maybe with Amazon Prime or Netflix and your looking at under $ 20.00 a month. Yes, you will need internet access so add another $40-60.00 a month depending on your need for speed. But its definitely less than the typical bundled services. If you don’t think that Aereo has Pay-TV in its crosshairs, you’re crazy. We shall see how this unfolds as it winds its way through the courts. Yes, Aereo is being sued by the broadcasters and others, but it’s also rolling out its service nationwide this spring. I am signing up to see what its like – but it seems like an idea whose time has arrived

Television is no longer TV, its IP!

The old generation networks: ABC, NBC, CBS and FOX. The new-generation networks?  Hulu Plus, Amazon Instant video, Netflix and YouTube.

Consider this:  Microsoft recently reported that Xbox 360 owners spend more time online watching video and listening to music than playing games. The company announced 35 new entertainment partners being added to the Xbox 360 in the next year, including the NBA, NHL, Nickelodeon, and Univision. ESPN is expanding its programming on the Xbox to include live feeds of all of its channels. Microsoft is also launching a music service to compete with iTunes.

                

The Wii U, debuting this fourth quarter, will also feature Netflix, YouTube, Hulu Plus, and Amazon Instant Video.

And, Outside of games, the PlayStation Network also now delivers access to streaming content from Hulu Plus, Cinema Now, Amazon Instant Video, Netflix, NFL Sunday Ticket, NHL Game Center Live,  MLB.TV,  ESPN and Crackle TV, while users will soon have access to YouTube from the PlayStation Vita.

You’ve got wonder, how will Nielsen ever be able to count the eyeballs watching? At this point, they can’t. They are the ‘dinosaur’ technology.

When my Mom and Dad had breakfast in the mornings, they would pass the newspaper back and forth. Back then, I looked at the classifieds for things to buy second hand and they even had a classified section in most magazines and papers for the ‘personals’. Wanted to go the movies (you know the movie we saw ‘advertised’ by trailer last night during a network show on CBS, say Ed Sullivan or Mary Tyler Moore), we checked the newspaper.  Real estate listings and needed to buy a used car? Newspapers.

               

Fast forward 15 years. Now we check our mobile phones for movie trailers and times. Dating? Not in the newspapers, on mobile or a laptop or tablet. News? Forget the paper. And for many years, the papers were in denial – they kept printing tons of papers, special sections, extra editions and even tried to launch new newspapers in certain cities to compete with the entrenched and big local guys. They lost millions of dollars and saw their stock price get hammered and many folded. The bigger ones put up paywalls (i.e. NYT’s, WSJ, etc.)

Then the music CD died and the way music was listened to and purchased changed. No one could believe that there wasn’t going to be any more music CD’s nonetheless a Tower Records or Wherehouse to close their doors. But they did. And the CD has all but disappeared.

Movies? Same thing is happening and will happen. It may take longer because of the nature of the medium. Movies are different than music in that the files are way larger and with music you listen to ‘Hotel California’ or your favorite music many times over and over. Movies? How many times can you watch the same movie over and over. However, Blockbuster and stores like them are disappearing. Replaced by iTunes, RedBox, (and RedBox I believe has a limited life span even though they are going gang-busters today), Amazon Instant Prime, YouTube, IMDB (yes you can buy movies and stream them there too) and many others.  Even Wal-Mart is in the mix (Ultraviolet and VUDU).

In my generation and others behind me, its what you owned and had that was important. Today, its how you access it. No ownership. No physical ownership that is. Its just not important. When and how you get it, is.

The final frontier is the television. And it’s a big frontier. And, there is more at stake than a plastic CD in a rectangular box that will disappear. Advertisers and the big 4 networks stand to lose the most. Including producers, writers, actors and the like. Add a DVR into the mix and the new choices that the younger generation has now and you’ve got a real problem CBS, NBC, ABC and FOX.  The upfront TV buying season which some estimate generates $19 billion fuels most everything we see on TV. About $9.5 billion for network and $ 9.9 billion for cable.

Network estimates individually for 2012-2013 season are:

  • CBS: $2.92 billion,
  • ABC: $2.65 b,
  • Fox: $2.15 b,
  • NBC: $1.78 b.

So, when Game consoles, tablet makers, mobile phones and the like are all putting mainstream content up and online for consumption, someone stands to lose. Another way of thinking about this would really be a shift of dollars from Network and Cable to third screens. It won’t disappear but in ten years it’s going to look awfully different than it does today. And the way all of this is counted and rated will actually become easier than how Nielsen has done this for decades ( a diary that you write in? Really?).

A new report from Nielsen, the TV audience ratings and measurement people, shows that the number of people who watched TV at least once per month—a pretty low bar—declined from 90 percent of the population to 83 percent last year.

Proportionately, that means TV lost 8.5 percent of its audience in 2011. As many as 17 percent of people never watch TV, the survey of 28,000 consumers in 56 countries.

That’s a huge loss of interest in a medium that in industrialized nations is regarded as a standard like electricity or hot running water.

The number of people watching video on a computer at least once per month is now higher, at 84 percent, than those watching TV.  The implications are obvious.  Some not so obvious. One is that cable affiliates pay big fees to Networks for carriage. If no one is watching, no one will be paying. And, younger kids don’t care what ‘network’ its on, they care when it will be available to see on Netflix or Hulu Plus. A real shift in economics and habits. And I don’t think the TV industry is paying attention. But they will, they will have to.

Welcome to the new world of multi-screens and time shifting. TV as we once knew it not TV, its IPTV.

Apps, Software and Video Games shortly will go the way of the DVD – they will live in a ‘cloud’.

Bandwidth is the key to the cloud. If you’ve got enough access to it, meaning if you’ve got a fast enough connection, then you don’t need any physical media or software to live in your PC, Mac or for that matter very soon your mobile phone and tablets.

We used to have giant ‘desktop’ computers that had to have HUGE hard drives in order for us to install many applications. For example, Photoshop, Dreamweaver, MS Office, CAD software, etc. all are very large installation packages. Couple this with your collection of MP3’s, photo’s, video’s and documents and most of us ran out of room on a PC that had 50-100 gigs of space for a hard drive.

The obvious to the consumer

Today, as a consumer we see convenient repositories for photo’s, music and videos and documents. Skydrive, GoogleDocs, Dropbox, Box, Amazon Cloud Drive. Now consumers are beginning to understand and use these places to store what they used to store on their home computers. Why? Several key reasons – first, once uploaded to a large mainstream cloud drive (and I mean to the likes of Google, MS or Amazon) your collection of ‘whatever’ is safe. How many of us have dropped or lost a laptop, had a hard drive fail, spilled coffee on our desks and then PC, etc. If you didn’t back it up to an external hard drive you lost it all. Worse yet, I’ve had friends who did and THAT and the hard drive failed shortly thereafter. Years of precious photos (and now videos more than ever thanks for our mobile phones) you can never get back or thousands of MP3’s gone (at $.99 each). Second, consumers now are getting familiar with storing their digital belongings off site and in a cloud. We hear about Amazon’s or Google’s cloud storage drive initiatives more and more everyday. They are fast becoming the new norm. And third – they are not expensive. Certainly not when compared to a 1.5 Terabyte hard drive that can fail without warning.

The not so obvious to us all

What’s not so obvious to consumers is what’s happening in the enterprise business realm. Years ago, you wanted to put up a business domain web site or had a business that required large databases, some required separate servers for clients that are uber security conscious, some needed to have their domain living on a separate server from others (especially the financial and health industries). Others needed production servers, staging servers and then after testing finally deployed an application or web service. Sometimes IT had to physically travel to the colo facility to apply a ‘patch’ to a newly deployed application and hoped that the patch worked as it was supposed to or else everything came to a screeching halt. Businesses lost money, time, and face sometimes. You’d pay Sun, Oracle, Cisco, EMC, etc. millions to deploy servers and DB’s for your environment. You’d spend money on hiring the right technical IT staff to deploy and sync and stitch all of this together. This WAS the norm.

Enterprise today is all moving into a cloud based environment – virtualization is the norm now.

Sun servers were all the rage in the 90’s. But they were VERY expensive. Robust, great customer service, but very costly. Today, you can run a linux box for a fraction of the cost. No more hard drives or servers (blades or otherwise). You can fire up an ‘instance’ and server through AWS in a few minutes. No going into a colo facility. Start-up’s can get to market almost instantaneously and for far less of a cost. You pay for what you use. No more buying a million dollar license for ATG, Vignette or Broadvision and installing 15 discs in a cage. You rent it now. Patches get uploaded by the cloud vendor in a virtual environment and tested before they are deployed to you.

With the rise of this ‘virtualization’, more and more apps or processes now get built into the browser. Java script was written just for this purpose and has allowed for far more sophisticated applications to run in a network environment and now on browsers. Other software will be embedded in browsers as time goes on that will mimic the functionality and hardware on your PC. You can bet on it.

Platform as a Service (PaaS)

Whereas IaaS (infrastructure as a service) providers offer bare compute cycles and SaaS (software as a service) providers offeraccess to such apps as CRM online, PaaS offerings provide turnkey services for developers to get their apps up and running quickly, no infrastructure concerns needed.

Offered as a service, PaaS runs the gamut from development tools to middleware to database software to any “application platform” functionality that developers might require to construct applications. None of these above services come without their problems. But so did everything else before them.

IaaS focuses on managing virtual machines, and the risks are little different than with other cloud types — here, the main risk is rogue or unwarranted commandeering of services. IaaS requires governance and usage monitoring. But with this comes a good degree of convenience and business ROI.

Some of the most popular cloud services running virtually are; Microsoft Windows Azure, Googles App Engine (which offer a nonSQL relational SQL database service), VMware cloud foundry, Force.com ( from salesforce.com), Heroku (also from SF), Amazon Elastic Beanstalk, Engine Ysrd Cloud (for Ruby on Rails enthusiasts), Engine Yard Orchestra (for PHP enthusiasts) and CumuLogic (for Java developers). Consumers never see or hear any of this but use web services that live on these services day in and day out.

What will be obvious to consumers in about 10 years or less

All of this bring me back around to bandwidth and apps. Once we have enough consumers that have access to real fast broadband (100mbps or more down and ideally 200mbps down), then the Apple and Android app store will disappear. Software discs will become obsolete. Video game installation discs – gone. Why, because once you have enough speed, apps can be loaded and accessed wirelessly via the web. The calls to databases, functionality and such can all be received instantly online. Its already happening, slowly. Examples of this in the entertainment space is Ultraviolet, bring your DVD’s to Wal-Mart and upload them to your digital locker – no more disc. Onlive, Livestream, Gaikai all stream video games without the need for a disc, Netflix (you know about them). Consumers are aware of these, but then you’ve also got GoogleDocs and Skydrive for documents and the creation of word and excel docs. We don’t need an install disc anymore.

Last week, it took me 4 days to upload 12,934 MP3’s to my cloud locker at Amazon Music drive. Less time than I ever thought. Available anytime for me to download if need be. That’s nearly $ 13,000 worth of music, stored for as little as $ 20.00 a year.

Mobile apps, software suites, video game discs, movies, music photos and more will still be here but will not physically be in your home forever. It’s inevitable.

Algorithms and Sensors – web 3.0 services abound

Its been a while since my last post – I’ve been consumed at my work ( which I have been really enjoying) . However, I felt compelled today to write a bit about algorithms and sensors, which are creating some GREAT services now and even better in the near future. We are watching web 3.0 ‘blossom’ right now. Here is what I mean.

Ever since I’ve gotten my hands on Apple’s new iPhone 4Gs and Siri, my mind has never been the same. Not that Siri is the end all and be all. It has its drawbacks and in fairness, Apple has always and still does call it a ‘beta’.

But the mere presence and interaction I’ve had with Siri signaled something new to me on the internet was really happening – and in a very subtle but meaningful way.

Siri is learning – yes, she really does learn. “Artificial Intelligence” – no one seems to think that the machines are actually intelligent, but they can certainly do a lot of things that used to be hard for computers. Clearly Siri is an ‘AI’ that is programmed to adapt in certain ways and modify its behavior according to how I or what I would request of Siri. Fascinating really.

The real thing to keep your eye on here is that sensors plus big data algorithms are leading us from today’s world where content considered king to one where content is simply one component of a service. Content is becoming secondary and the service and platform primary. There never used to be 13 different ways to rent’ the same movie before. Content is becoming commoditized.   When Siri was first introduced, its creators called it a “do engine.” that is, rather than retrieving a web page (media) that you consume to make a decision, it just does things for you. “Find me a restaurant near here.” “Make me a reservation.” Media will become part of a database back end rather than a media front end.

Some examples of sensory algorithms that in effect build a network-mediated global mind are (this is really us, just augmented):

–          Mobile cell devices -we are augmented with cellphone cameras (electronic sensors again), the ability of events to become a shared experience is has become vastly increased and more so now with social media connects.

–          Smart Parking Meters – In the city of San Francisco, you’re seeing something similar, where all the parking meters are equipped with sensors, and pricing varies by time of day, and ultimately by demand. In effect an “algorithmic regulation” – they regulate in the same way our body regulates itself, autonomically and unconsciously.

–          Predictive AdWords -Google’s Adwords were always more effective than competitors because Google was better at learning from human input – instead of selling ads to the highest bidder as competitors such as Yahoo did, they used machine learning algorithms to predict which ads were more likely to be clicked on. They might choose an advertiser who only wanted to pay half as much if their ad was 3 times as likely to be clicked. Google was the first to harness the collective intelligence of their users to improve ad results. Just like the social media platforms we use to disseminate events and other digerati it’s important to understand just how much this is man-machine symbiosis.

–          Large connected networks – it could be Facebook, Twitter, LinkedIn or G+, but any one of them connects to most of us somewhere at some point. The massive sharing of data and thoughts, the crowd-sourcing of opinion and the collective conclusions we draw are all kept and logged, improved upon and progressively mature and evolve. Here and on these massive giants, nothing stays the same for very long. The mere platforms themselves have spawned other interconnected platforms like Zynga.

The Internet as a whole is a mirror image of us  – a thriving interconnected network. It improves with knowledge and data and learns 24/7. It’s the community that creates content. Its about how you engage people and who you engage, not the number of followers.  It’s about the collective impact we make together. The Internet is an architecture of participation, interconnected, open source and open protocols. It really is our global brain. Look at the ‘picture’ of the network. It is no coincidence that it looks the way it does.

the internet

Google also thinks about this. Their key business model depends on the success of others – driving traffic to their sites, and producing ad results. Google only does well if their partners do well.

Contrast this with how the dwindling and toxic financial firms, who once positioned themselves as the enabler of the economy, creating liquidity and trading on behalf of clients, began to trade against them, and increasingly created products – from the mortgage backed loans that brought down the global economy to even more reprehensible trading practices that have driven up the cost of food for starving millions and was directly responsible for not only our economic collapse, but the ripple effects that are being felt worldwide. This is capitalism gone wrong. Occupy Wall Street’s fundamentals are not incorrect.

In the end, a company is most successful when it makes all of its stakeholders successful, not just its shareholders – a good example of this is Apple.

Which brings me back to algorithms and sensors. Soon, Apple will release an API for Siri. Many businesses’ that can use it will use it and the revolution will progress in earnest. As Siri learns what I do the most on my mobile device, she will also begin to learn my doctor’s and dentist’s name, the nearest hospital to me and map, my grocery list and cost and what I’ve run out of in my house, the type of movies I watch and music I listen to and where to find the content. In short, Siri will make my life a little more convenient and predictive. It will combine my habits with my surfing activities on the Internet and will suggest based on location where to buy items that interest me conveniently and cost-effectively based on my location.

'Things to Come' 1936

Just think of the services that will come…H.G. Wells would have had a blast.

DPI is coming to a mobile phone near you!

                                 

Consumers will be confronted eventually here in the U.S. with DPI or Deep Packet Inspection. DPI simply put is a new technology that gives mobile carriers a way to tell exactly which applications you run and when on your mobile phone. Are you a  FaceTime user or Skype user? Do you check Facebook on your iPhone using an iPhone app 5 or more times during the day? Check into G+ a lot?  Tweet? Blog remotely to your Tumblr log? Do you text with a friend on the train or bus home? Is that during rush hour or business hours or between 6pm and midnight or in the morning?

                                       

Instead of allowing consumers to consume and buy an ‘unlimited’ data plan on their mobile phones (and by unlimited I mean unlimited for the most part and then ‘throttled’ ), carriers are seeking new ways to charge us for mobile usage. And they will have to figure this out because the number of mobile phones and data usage is increasing exponentially. Having a plan now as to how to avoid network congestion (as opposed to later when it really becomes a issue) makes total sense.  Its all about balancing out a consumers usage with network peak and lull times usage.  If I only was checking and using Facebook on my iPhone, I’d rather purchase a $5.00 a month all-access plan to Facebook than spend $25.00 a month for 2GB of data for everything.  Having a ‘Happy Hour’ on data usage from 7pm-midnight would get me to remember to download my music or movies on my iPad or iPhone during those times. Training the mobile public to use certain applications at certain times makes the use of the network better for all users during a 24hr. period. And carriers would not have to sell ‘unlimited’ data plans to us, which really aren’t unlimited after all.

This is not a new concept and is being tested and used in Europe right now. Orange is testing personalized pricing plans with consumers – working with them to determine which applications and activities they really use and crafting a pricing plan that fits them best.

Orange has a Panther plan for heavy users that costs £25 ($39.40 USD) for 10GB of mobile data and voice a month and a Dolphin plan for £15 a month that offers an hour of unlimited surfing at a time of the users choosing. Under the plan, customers can pick a so-called ‘Happy Hour’ from the following; 8:00 a.m.-9:00 a.m. (the morning commute), 12:00-1:00 p.m. (lunch break), 4:00 p.m.-5:00 p.m. (late afternoon) or 10:00 p.m.-11:00 p.m. (late night).

The more transparent the carriers become, the friendlier consumers will become to switching plans and buying services that fit their habits. The days of just a few data choices for us are limited indeed.

Apple’s ‘iCloud’ Just Might Be Netflix’s Achilles Heel.

Apple took a long time to get the Internet. Geeks were still installing FTP clients and web browsers for years after Apple belatedly included TCP/IP and PPP to their OS and, when Apple finally did integrate the Internet into Mac OS, it was in a very tacked on kind of way. A browser, an app for making web pages, eventually a few vertical online stores. I think that’s all about to change tomorrow a the WWDC.

The upcoming ‘iCloud’ announcement will vault Apple into the music cloud business, pitted against Amazon and Google (and a few others, but they are the 900lb. gorillas in the room). Apple has been in the business of selling movies and music for a long time now. Far longer than Google and longer than Amazon, at least digitally (no physical plastic CD). Now they will announce ‘iCloud’.

There have been many guessing at what this will look like and include, and I’ll make a few guesses too and I’m sure not all of them will be correct. But its fun nonetheless to postulate. Netflix is unquestionably the king of movie rentals by far. They have the breadth of product, elegance of delivery online and a reasonable cost/subscription plan. Apple is the king of online movie ‘purchases’. Based upon the fact that Apple has been building out a $1B data center in maiden N.C. , it is more than possible that they have infrastructure to support ‘movie’ lockers. That is, you buy a movie and can now store that film remotely in your cloud ‘locker’. This is the one thing that Netflix (at the moment) can’t replicate very easily.

First, it does not have the infrastructure in place (at the least own the facility) even though they host through Amazon’s EC2.  Yes, they can build it out there, but it would be costly.  Second, to my knowledge ownership is a digital right that must be negotiated and exists separately from a pure rental right with the studios. Something that is NOT easy to get from the Hollywood majors – and I know because I’ve been there before several times before. And third, Netflix core business premise is rentals – it has never been the place we turn to purchase a film thereby making it even harder to shift consumer habits that so far lie with an Amazon or iTunes.

This IMHO, could be considered an Achilles heel for Netflix. Not that they couldn’t get here, but perhaps they will get here AFTER Apple does. And first mover advantage is HUGE online and especially in the entertainment space. An storing your movies is altogether another issue – especially once you begin storing your movies in a cloud. They are NOT easy to move (file size is 750megs -1gb or more compared to a typically small 4-5mb mp3 file) nor would you want to. Right now, people are complaining about how you need to upload your MUSIC files to Google or Amazon’s music cloud offering. Imagine what they’d be saying about uploading movies? Again, this is all a guess of mine. Some other thoughts and guesses about tomorrows announcement by Apple MIGHT be:

 

• Your Mac, Windows, or iOS device can sync with all or part of it in the same way that your iOS devices sync with your computer’s iTunes library today because your music library exists in the cloud now.

• Continuous syncing of iOS devices in real time. The implication is never having to plug your iPhone or iPad in to your computer again. You won’t need a computer to sync anymore.

• One login using your Apple account: On any Mac, sign in as a guest using your Apple account credentials and you’ll be brought to the same desktop you get on your personal machine. Files will be downloaded from the cloud (or your home network) on demand, and you’ll have access to all the apps you’ve purchased via the Mac App Store, downloaded and installed on-demand, and removed securely, along with your data, upon log-out.

• Play music on your mac, then with a tap shift the music to your iPhone when you’re on the go. A sizable portion of the playlist will quickly transfer over so there’s no reliance on continued wi-fi access or 3G streaming. A ‘cloud’ benefit.

Lion and iOS 5 will change the playing field for many. It will be interesting to find out exactly how Apple will do this and when tomorrow at WWDC (Worldwide Developer Conference). You can watch it live here on Monday, June 6th at 10am: http://www.macrumorslive.com/.

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