Thursday, June 28, 2012

FBI Blows Copyright Case

The high-profile case of contributory copyright infringement against file-sharing service MegaUpload was handed a major setback earlier today when the New Zealand High Court ruled that the search warrants used to seize servers and hard drives were illegal.
  The MegaUpload case was the US authorities' high-profile attempt to go after a non-U.S. internet service for contributory copyright infringement.  Contributory copyright infringement is defined as facilitating or encouraging copyright piracy, and MegaUpload was accused of encouraging copyright piracy by marketing a service where individual users could share files with others.  Since the corporate officers of MegaUpload lived in New Zealand, and their servers and data storage and servers were located outside the U.S., the FBI sought and obtained the cooperation of New Zealand authorities in serving warrants and arresting corporate officers.
  Responding to a legal challenge, the New Zealand High Court ruled that the warrants were illegal, as well as ruling that the FBI's moves to copy all the seized data and take it to the U.S. was unlawful.
"The warrants did not adequately describe the offences to which they related," High Court Judge Justice Helen Winkelmann said in her ruling. "Indeed they fell well short of that. They were general warrants, and as such, are invalid."
The ruling will impact further prosecutions in New Zealand and the U.S.  The judge ordered the FBI to return all copies of information and data provided by local authorities in violation of NZ law, and ruled that an independent lawyer would review all seized materials and judge what is relevant and appropriate to the case, and all other materials would be returned and could not be used in further court actions.  Lawyers for the Megaupload corporate officers raided indicated that they will argue,  in a hearing next week about how the case should proceed,  that all evidence seized in the raids should be considered tainted and invalid.  Standards in the U.S. are stricter, as any evidence obtained from illegal searches, or later developed based on information learned from the search, can not be used in court.  Lawyers for MegaUpload also argue that U.S. authorities cannot charge the company with criminal behavior because it is based in Hong Kong, asserting that no warrants or charges have been formally served on the company itself.
  Interestingly, lawyers representing the U.S. authorities said the ruling was "no surprise."  Which brings up the question of why jeopardize the case if you anticipate the warrants would be declared invalid?  Well, the procedures the U.S. have set up for combating intellectual property violations do not require any evidence of actual wrongdoing to take legal action.  The results in this case suggest that the U.S. will have trouble trying to gain cooperation from countries in the future in this area.  It's also a clear signal that a similar challenge in U.S. courts would be successful.

Sources -  NZ court finds Megaupload search warrants illegalReuters
MegaUpload sees big court win, but case far from

Relevant posta -
The U.S. as Internet Bully
U.S. Efforts to Combat 'Pirates' by DNS seizure flops

Tuesday, June 26, 2012

CNN hits new ratings low

Following May's 20-year low in monthly primetime ratings, CNN's primetime ratings for the second quarter were the lowest since 1991. CNN averaged 446,000 viewers in prime time, down 35% from the same period last year.  This left CNN a distant third in primetime ratings.  Ratings were down for all cable news channels, although the declines for Fox News and MSNBC were in the 13-14% range.  Fox continues to dominate cable news viewing, averaging 1.79 million viewers in prime time, and the O'Reilly Factor and Hannity remain the top two cable news programs.

Source -  CNN Sinks To 21-Year Primetime Ratings Low in Second Quarter,  Deadline Hollywood

Are Smartphones addictive?

  A new book suggests that smartphones are addictive.  Are they?

  According to one article in LiveScience blog, various research results suggest the possibility. 
  • smartphones are regularly cited as the first thing people reach for in the morning, and the last thing checked at night
  • some people report spending more time with their phones that in personal relationships
  • surveys suggest that the majority of young people check their phones hourly
  • another survey suggests most people feel "panicked" when they've misplaced their phones
The social researcher in me doesn't find these anecdotes compelling causal evidence of "smartphone addition" any more than similar findings about police or military attitudes about their guns would be evidence of "firearms addiction".  Particularly since many of the research "results" are about cellphones and not smartphones. In addition, I could dig up similar research results from the past talking about the Internet, TV, and even newspapers.
  There are people with addictive personalities that may settle on phones or smartphones as their preferred focus. There are people who will focus on phones or smartphones as their primary medium for information and communication as they find those media more useful or valuable than other more traditional sources (media dependency). And there are people who will develop new habitual patterns in their use of media as a result of access to new forms of media devices.  But those aren't evidence of addiction in the clinical, psychological, sense.
  But "addiction" isn't the main point for the Harvard Business professor who wrote the book - the supposed "addiction" is provided in support of the argument that new habits of use are becoming associated with mobile devices - habits that aren't necessarily efficient or productive within a corporate environment.  The focus of the book is then on how to "break" those habits.
  There is mounting evidence that smartphone and tablet owners are shifting their media use habits.  For example, rather than going to TV or radio to check news and weather in the morning, many go online through mobile devices for that information.  And these habits will have impacts in a competitive media environment, and arguably in the broader social environment as well. In addition, personal habits may not be the most efficient work habits; and eventually people recognize that and develop situational habits and behaviors.  But habits are not addictions in any reasonable or meaningful sense
  So please, let's avoid terms like "addiction" that suggest an illness to be cured, rather than recognizing that for most people, these emerging behaviors are logical and reasonable responses to newer ways of communication, information-seeking, and content use that offer better personal value to the user than the old habits offered.  Crying "addiction" is not the way of reason or science - it's scaremongering.
  If you really want to talk about addicts in that sense, look at those who are unwilling to abandon past habits in changing circumstances.  Doing something that you know is not as useful or beneficial when you have better options (and manufacturing false justifications for those behaviors) is much closer to evidence of addiction than simply doing something a lot.

Source -  Smartphone Addition Is Real... and RampantLiveScience

Advice from young journalists

I've been a fan of Susannah Breslin's Pink Slipped blog on ForbesWomen, which often features stories and advice on how to survive in the modern journalism job market.  About a year ago, she offered young female journalists an opportunity to be paid for contributing a blog post/article.  Last week, she reached out to the six finalists to find out what they've learned in the year since, and what advice they might have for other young would-be journalists beginning their careers.  Here's the quips Breslin pulled out, but the whole set of replies and post are worth a read.
  • "There is no zenith" - as you reach your goals, keep setting newer and higher ones.
  • "Change as you go" - be willing to adapt to take advantage of opportunities.
  • "Have your bags packed" - take measured risks, and be ready to move (there's generally more and better opportunities available elsewhere)
  • "Be the Jack Kerouac of the digital age" - "forget the path you have been sold and make your own"
  • "Everyone has their own parents' basement to move out of" - get out of whatever rut you're in.
  • "I must always demand what I want in order to get where I want" - (from a young Muslim woman in the Middle East) - don't wait for opportunities to present themselves; make your own opportunities and learn how to sell your ideas.
Source -  Six Young Female Journalists, One Year Later, Forbes

Ooops - Neilsen errors impact May Sweeps numbers.

  It seems that there was a misprint in the thousands of TV watching diaries it sent out for the May Sweeps period.  The diaries are the sole data source for more than 150 local TV markets in the U.S.  The error affected how people could fill out the diaries.  There were also reports that issues with Nielsen's call center operations (used for recruitment and follow-up contact) that stations fear may also have impacted the ratings numbers.
  Concerns were strong enough that station reps complained to the Media Rating Council (MRC), which discussed the issue with Nielsen reps at a recent meeting.
  Nielsen, for its part, claimed that adjustments were made in a timely fashion to procedures and the data that the results are reliable - although the refused to indicate the extent of the problems or how they "fixed" their results.
“Nielsen ensures that any data provided to clients meet or exceed the requirements set by the industry for representative results,” the company said in a statement.
Basically, Nielsen's saying "trust us," despite the fact that the MRC revoked their accreditation for the Nielsen diary-only ratings service two years ago, and acknowledgement of multiple problems and errors in the diary-only ratings system in recent years. They also recently turned down an appeal for re-accreditation, in essence saying that Nielsen has not "met or exceeded industry standards." Nielsen's claim is not likely to put many of the concerns of the local TV industry about current audience measurement systems to rest.

Source - Nielsen Diary Misprints Impact Sweeps ResultsMediaDailyNews

Planned Obsolescene at Apple?

There's a serious marketing decision when implementing innovations - do you try to maintain backwards compatibility with earlier versions, or do focus on maximizing the new, at the cost of limiting compatibility.  There are advantages in just moving forward - it can open up new opportunities, and allow for maximizing the impact of the innovation, and usually helps to keep the direct costs of innovation low.  On the other hand, abandoning backwards compatibility means that all of the ancillary devices or products designed for the earlier systems are no longer usable with the new.  This can impose additional costs for innovation, as shifting to the new version also means that you need to replace some or all of the related products that are no longer compatible with the new version.  And that can also backfire somewhat on the innovator, as making adoption more costly will slow adoption. 
  More problematic is when the innovator purposely makes the new version of the technology incompatible with existing standards, or with their prior standards.  Then you have something called planned obsolesence.
  Apple has a long history of choosing to push their own standards rather than adopting more general industry standards.  As an equipment manufacturer, they've designed hardware that requires Apple operating systems to operate, and major upgrades in their operating systems are often incompatible with earlier versions of software (and in some cases hardware).  Sometimes, when Apple is an early and dominant innovator in the field, they can establish their standard as an industry standard - for example, the iPod/iPhone/iPad docking connector.  That's become a default component of associated hardware and accessories like speaker systems.  One of the aspects of Apple's success in that market is that myriad Apple mobile devices (and latter upgrades) all used the same connector, making the purchase of related equipment or upgraded devices relatively simple - consumers knew that they would also work with prior accessories.
  However, several recent announcements by Apple suggest that the company is planning for some major obsolesence.
  First came the announcement that Apple was closing its MobileMe webhosting service, in favor of its new iCloud service.  One of the main values of MobileMe was its ability to backup and synchronize contact and calendar files across multiple user devices.  Those same features will work in iCloud - but only if you have the newer Apple OS, and the new OS won't work on many older devices, so you might also have to buy new hardware if you want to continue keeping your contacts list and calendar in the iCloud.
  Then came the news that the newest iPhone5 (to be introduced later this year) will abandon the old 30-pin connector and replace it with a new 19-pin version.  For Apple, the stated concern is that as they seek to make smaller and sleeker devices, the old connector just takes up too much space.  Anyway, the consequence is that the iPhone5 won't be able to directly dock with any current accessory or power source that uses the 30-pin dock, and it's quite likely that the same change in docking connectors will likely occur with subsequent major upgrades in other mobile devices.  And that means that newer accessories are likely to start including the new docking connector as well, and most will replace the older with the new rather than try to engineer multiple docking options - meaning that newer accessories won't work with older devices.  Making things worse, or at least more expensive, are the reports that the new docking connector will include a proprietary chip that will prevent its use with unlicensed accessories.
  Some analysts wonder if this is the time to make such a move - raising the costs of switching to the newer devices just as Android OS based smartphones are becoming increasingly competitive (some arguably better and cheaper than the current iPhone).  If you're going to have to replace all accessories anyway, consumers might chose to shift to an Android-based device rather than stick with Apple.  As one analyst concluded:
You feel that, Apple? Those are the winds of change. It may be temporarily profitable for you to force your customers into spending on upgrades, but a little thing that we call customer lifetime value means that it's stupid to annoy your customers in an increasingly competitive marketplace.

Sources -  iPhone5: Every iPhone Accessory You Own Just Became ObsoleteForbes
Apple's Planned Obsolescence: Customer Revolt Brews,  InformationWeek

Monday, June 25, 2012

Mobile changing media habits

A report from Edison Research on the Smartphone Consumer looked at how and where smartphone owners used their devices, and more interesting for the future of media, looked at the differences between smartphone owners and those without.  With cell phone ownership now approaching 90%, and evenly split between those with smartphones and those with more basic cellphones, media usage differences are likely to start impacting overage media use metrics.  Here's some highlights -
  • When listening to the radio at work, more than half of smartphone owners report listening to the radio on their smartphone.  Overall they are more likely to listen to the radio at work through their smartphones than listen over their computers (listening via regular radio still dominates, accounting for 59% of listening)
  • Smartphone owners are much more likely than non-smartphone cell phone owners to frequently (several times a day or more) engage in the following media behaviors: browse the internet (46% v. 5%); use social networking sites (34% v. 4%); listen to downloaded music (25% v 3%); listen to online radio (12% v 1%); and watch videos (11% v. 1 %).
  • Compared to non-Smartphone owners, those with smartphones: watch less TV (3:20 hrs/day v. 4:05 hrs/day); spend much more time on the internet (3:24 hrs/day v 1:38 hrs/day) - in fact, they spend more time on the internet than they do watching TV.
  • Smartphone owners spend more time listening to the radio (2:26 vs 1:52) and less time reading newspapers (0:19 vs 0:26) than those who do not own smartphones.
  • 29% of smartphone owners report listening to Internet radio streamed from a cell phone through their car's stereo
While legacy media are likely to initially see this as a negative. a loss in audience, I'd interpret these findings more as a warning.  As mobile devices and broadband capacity improve, people are likely to shift some of their media usage to those devices - the message that legacy media should take from this is that they need to make sure their content is available for those new devices and delivery mechanisms.

Source - The Smartphone Consumer 2012,  Edison Research press release.
Presentation slides accompanying the report

A future for RIM?

With reports that RIM (makers of the Blackberry and operators of its OS and system) floating the possibility of splitting its hardware business (the Blackberry devices) from its network and messaging business (the OS and messaging network), several big Net/Mobile players have reportedly expressed interest in the various pieces.
  According to press reports, Amazon and Facebook are potential suitors, and RIM might approach Apple and Google about helping them get into the networking business.  Still, these are rumors, and nothing solid is likely to occur until after RIM launches the BlackBerry 10 operating platform later this year.  How this ends will likely depend on whether the new OS is innovative enough for RIM to win back some of the market share its lost over the last few years.

Source -  Report: Facebook, Amazon interested in RIM's handset unit,  FierceWireless

Analyst suggests a la carte pricing for cable disastrous

With the FCC and the DOJ looking into cable pricing policies - with a focus on why consumers are not given the option to pay only for the channels they want (a la carte pricing) - analysts are pondering what the impact of a la carte pricing would be on the cable and other multichannel video programming services (MVPS).
  One, Laura Martin, an analyst with Needham & Co., suggests that the impact of an imposed a la carte pricing strategy could be a disaster for cable and consumers both.  Using the FCC's own numbers, she calculates that with a la carte pricing, the cable industry would lose 75% of its advertising revenues and 15-20% of its subscription revenues.  In addition, going to a direct consumer purchase model will cost consumers and additional $5 billion annually, as with the loss of advertising value, channels and programmers would need to increase their prices to consumers. Finally, she estimates that only 5-10 hit channels would be profitable enough on a stand-alone basis to survive unbundling (another 125 channels examined would likely become uneconomic to produce).  The long-term impact of unbundling could put more than a million jobs in the cable, networks, and TV production companies at risk.
  Information economists have long found that the bundling of information goods can have substantial benefits to consumers and to society.  Bundling tends to reduce price, while giving consumers access to a wider range of information sources.  With bundling, consumers also benefit from being exposed to valuable information and content that they might not have specifically been looking for.  Bundling also encourages the development of new channels, promoting diversity.  That added diversity, and the ability to access sources as needed (particularly in unanticipated circumstances) benefits society generally, as well as the consumer.  Forcing unbundling, particularly if the government doesn't also allow for those who wish to take advantage of the bundled services, would be harmful for society, most people, and a broad swath of media industries and firms.  If the FCC and DOJ are truly acting in the public interest, they need to test the impact of unbundling and the offer of a la carte pricing before imposing it on all.  I suspect that if they did so, they'd quickly find the economic, social, and political costs would overwhelm any putative value of the move.

Source -  Federal intervention could slam TV biz, analyst warnsVariety

Fulltime 3D channel out at DirecTV

A while back, DirecTV had partnered with Panasonic to launch a trio of 3D channels, one of which promised to be full-time (24/7) channel carrying nothing but 3D programming.  However, it seems that DirecTV had trouble obtaining enough 3D programming to fill the 168 hours/week a full-time channel required.
"While 3D adoption continues to grow and more programming is being developed, DirecTV has decided to move n3D to a part-time channel," DirecTV said in a statement. The company noted that it still offers subscribers 3D programming from ESPN and 3net, the 3D channel owned by Discovery Communications, Sony and IMAX.
With a few exceptions, interest in producing 3D content for television seems to have declined.  Still, promoters are hopeful that advances in glasses-free 3D displays and ESPN's plan to shoot its 2014 NFL games in 3D will help to revive consumer interest in 3D.

Thursday, June 21, 2012

Tablets reach critical mass? Impacting video

A preview of a new report by comScore on the tablet market claimed that tablets have already reached critical mass, with 1 in 4 smartphone users using tablets in the last quarter.  In addition, the report indicated that users were three times as likely to use tablets to watch videos than using smartphones, and with 9.5% of tablet owners reporting that they watched video on their devices "almost every day".  Further, of those watching at least monthly, 26.7% reported that they had paid to watch video content - good news for video producers and distributors.
“Tablets are one of the most rapidly adopted consumer technologies in history and are poised to fundamentally disrupt the way people engage with the digital world both on-the-go and perhaps most notably, in the home,” said Mark Donovan, comScore SVP of Mobile. “It’s not surprising to see that once consumers get their hands on their first tablet, they are using them for any number of media habits including TV viewing.”
   Demographics of tablet users were generally comparable with smartphone users, although tablet users skewed slightly older, and with slightly higher incomes.  The biggest reported difference was in video watching, particularly in measure that suggest using tablets to watch video is becoming a habit - 50.3% of tablet owners watch at least monthly, 18.9% watch at least weekly, and nearly 1 in 10 reported watching "almost every day."
  The tablet/mobile market seems well on the way to establishing itself as an important component of the media/info ecosystem. (see earlier post on Tablet Revolution)

Sources -  Tablets Gain Mobile Video ViewersResearch Brief from the Center for Media Research
Majority of Tablet Users Watch Video on their Device, 1 in Every 4 Viewers Pay to Watch, comScore press release

Microsoft Enters Tablet Market

Earlier this week, Microsoft announced its entry into the tablet marketplace with the Surface.  Microsoft will manufacture the tablet, which will come with a built-in kickstand and a magnetic cover that doubles as a keyboard, and will run a version of Windows 8 designed for use on tablets.  Microsoft's Windows president, Steve Sinofsky,called it "a tablet that's a great PC; a PC that's a great tablet." 

  Microsoft announced two versions, the Surface and the Pro Surface, both with 10.6" display.  The displays use a 16-9 format, so will be longer and narrower than its competitors.  Other than vague mentions of processor family, the announcement was weak on technical details.  The lack of technical specs contributed to Information Week's Fritz Nelson's initial thoughts on the device: "long on hype, short on details, but plenty of promise."
  Others were not as kind - ZDNet called it a "microflop"; CNet wondered why no apps (or app support) were announced;  Market analysts indicated that they felt that the announced tablet would not be competitive with Apple's iPad, and might capture 10% of the market, at most.
  Nelson also wondered why Microsoft was entering an already crowded market, particularly as it makes the company competitors in one market of what he termed "Microsoft's fragile ecosystem of partners." A report in the San Jose Mercury News said that Microsoft had not involved, or even informed, many of its partners in the development of the Surface, and that had resulted in a "sense of betrayal" in the industry.
  Whether the benefits from greater vertical integration of hardware and software operations will ultimately outweigh the potential harm to its partner relationships can't be known at this time.  But launching a product that doesn't seem to be particularly innovative (except for the cover/keyboard) and doesn't seem to be competitive either technically or in terms of functionality isn't likely to help Microsoft's image.

Sources - Microsoft Tablet Surfaces A New StrategyInformation Week
Microflops: Microsoft Surface RT and 8 tablets, ZDNet
Microsoft kept Surface tablet a secret from hardware partners, sources saySan Jose Mercury News

Monday, June 18, 2012

Will the Internet remain free?

There have been moves by various UN-related agencies to try to assume regulatory authority over the Internet for a decade or more.  In the past, the US and saner countries managed to keep these largely at the discussion level, aided by the fact that the U.S. funded key infrastructure components.
  A while back, UNESCO took a swing, hosting a number of Internet Governance Forum (IGF) meetings, culminating in a series of World Summit on the Information Society (WSIS) meetings.  The primary impact of most of these was to raise the question of whether the US should be allowed to unilaterally "run" the Internet.  These arguments contributed to the formation of an independent oversight authority (ICANN), who has used the need for a new addressing system (the original one was running out of viable addresses as net usage exploded) to establish new rules and options for domain name and IP addresses to create new operational nexuses outside of the U.S., and thus outside of U.S. control.  And the U.S. didn't help it's case when, after years of pledging that yes, while technically the U.S. could legally exert control - it never would - it suddenly started interfering in a very big and public way.  Under the premise of Intellectual Property Rights enforcement, it started seizing the websites of alleged violators, (as well as the site's content, if hosted on a US server), most of whom were non-US operations, simply because the DNS system was located in the U.S.

  In one of the most publicized cases, the U.S. seized the MegaUpload site and all of its content, on the argument that a few users might be engaged in illegal file-sharing.  To date, legal users of the remote hosting service have been unable to regain access to their own files, the hosting site has asked for court permission to delete all the files, and the government has floated the idea of charging legal users to re-acquire their own files, but only after proving in Court that all files in their area were legal copies.  The U.S. has gone from hand-off sponsor of an open Internet, to egregious Internet Bully(see earlier post)- giving support for shifting Internet governance elsewhere.
  Now, a more serious attempt to wrest control of the Internet is surfacing at another UN-related agency, the International Telecommunications Union (ITU).  The ITU has a World Conference coming up in December, and sources indicate that there forces seeking to use existing telecommunication regulations to place control of the Internet within the ITU.  A leaked copy of the planning document used by governments to prepare for the meeting "show that many ITU member states want to use international agreements to regulate the Internet by crowding out bottom-up institutions, imposing charges for international communication, and controlling the content that consumers can access online," according to one scholar whose website is hosting a copy of the document.
The broadest proposal in the draft materials is an initiative by China to give countries authority over "the information and communication infrastructure within their state" and require that online companies "operating in their territory" use the Internet "in a rational way"—in short, to legitimize full government control. The Internet Society, which represents the engineers around the world who keep the Internet functioning, says this proposal "would require member states to take on a very active and inappropriate role in patrolling" the Internet.
Several proposals would give the U.N. power to regulate online content for the first time, under the guise of protecting against computer malware or spam. Russia and some Arab countries want to be able to inspect private communications such as email. Russia and Iran propose new rules to measure Internet traffic along national borders and bill the originator of the traffic, as with international phone calls. That would result in new fees to local governments and less access to traffic from U.S. "originating" companies such as Google, Facebook and Apple. A similar idea has the support of European telecommunications companies, even though the Internet's global packet switching makes national tolls an anachronistic idea.
  Perhaps also unsurprising, but disappointing, is the weak responses and reactions to these restrictive proposals by the Obama administration, given its own authoritarian approach to violating the underlying tenets of an open Internet when it conflicts with its own interests.  Congress, at least, seems to be taking the issue seriously, with full bipartisan agreement that a government (or ITU) top-down approach would be a threat to the developing Internet Economy and a mechanism for regimes to restrict content they disliked.  At one of the hearings addressing the issue, Vint Cerf, Internet pioneer and spokesman for Google, stated that ITU-focused governance of the Internet would be "potentially disastrous."

  Meanwhile, apologists at the NY Times want to frame this as a debate over "mere money," and falsely state that there are no proposals to change how the current oversight group (ICANN) operates (he apparently didn't get to the proposal for replacing ICANN, or doesn't consider creating a new authority a "change").  Rather, he takes at face value a proclamation that it's not about "internet governance", because that phrase doesn't appear, even though every proposal in the document would clearly and directly affect how the Internet would be regulated and governed.
  The NYTimes argument might have been better, if they'd bothered to check with any of the myriad public interest groups concerned about the openness and freedom of speech the Internet provides. Those folks, and those who know the technology, are pretty concerned about some of the specific proposals (including the ones "merely about money") and the potential disruption of internet operations and services, as well as being concerned with the significant threat of censorship of "inappropriate" information from both internal and external sources.  Better yet, they could consider what might happen if a regime unfriendly to the NY Times took issue with some of their online content, and used the pretext of "simple internet regulation" to seize their site, servers, and all of the information they contained.

   On the positive side, international bodies like the IGF, WSIS, and ITU tend to work slowly, seeking consensus, so perhaps the threat isn't imminent.  Still, there are some very big players behind many of the proposals, and those countries are actively seeking sufficient support to achieve their goals.  While perhaps not immanent, that doesn't mean the threat of achieving their goal of greater regulatory oversight over content and communications isn't real - or that there aren't serious potential consequences.  I'd be less worried if this administration took a more forceful approach in opposition to at least the more consequential proposals, and wasn't actively trying to frame the issue of international regulation of the internet as being merely about "money" or combating internet fraud or piracy.  It'd be nice if they also used words like "openness", "free speech", or privacy.  After all, that's what the U.S. is supposed to stand for.

Sources  -  Crovitz: The U.N.'s Internet Power Grab, Wall Street Journal
Congress United Against ITU-Centric Net Governance, Multichannel News
Planning document at WCITLeaks.org site (other drafts and responses are also available)
Attempted debunking by the NY Times
Megaupload Files Remain in Limbo, Online Media Daily

Thursday, June 14, 2012

Verizon Wireless shifts to Data-based pricing

Verizon Wireless has shifted it's pricing focus.  Rather than the traditional pricing cap limits on voice calls and/or texting, bundled with unlimited data, Verizon will now offer free unlimited voice and text, while charging for data.  The shift is significant, and reflects the continuing decline in the costs of voice and texting services, and the exploding
  Verizon had earlier been the second major wireless provider to end unlimited data and institute plans that provide customers with alternative pricing/monthly caps on data usage.  With this announcement, Verizon also announced that it was doubling the price on its popular 2-gigabyte monthly cap plan.  In addition, Verizon announced a new "family" data plan, with monthly fees of $50 for 1-Gigabyte to $100 for 10-Gigabytes, along with a $40 fee for every smartphone associated with the plan, and $10 for every tablet.
Under the new plan, a family of four could easily spend $200 a month for three smartphones and a tablet with a shared data limit of 6 gigabytes. One user with a 2-gigabyte plan for $60 would blow through the limit by streaming 30 minutes of video and five minutes of music and visiting five Web sites each day for a month.
 The new plans are being criticized by a number of consumer groups, and big content providers like Netflix, who complain that the higher prices might limit people's ability to take advantage of their services.  And other wireless and broadband operators are looking towards Verizon and the impact of this change in pricing strategy as they consider data caps and pricing plans.
  Verizon noted that the new plans apply primarily to new customers, and that existing customers may opt to stay with their current pricing/service plans.

Source - Verizon Wireless to offer free voice and texting, boost cost for data useWashington Post

Data Rate Shenanigans?

It's being reported that the U.S. Department of Justice (DOJ) is investigating allegations that some multichannel video programming distributors  (MVPDs - cable MSOs and DBS systems - who are also broadband data suppliers are discriminating against online video providers.
  The allegations are that the MVPDs are using data caps, data plan pricing, and artificially slowing data streaming rates that put online video providers - particularly movie and TV program HD streaming services like Netflix and Hulu+ at a competitive disadvantage.  Since these services can be considered substitutes for TV networks and pay channels that are the MVPDs primary business, any such actions may be considered to be anticompetitive and violations of antitrust law.  Justice is also said to be looking at the ownership relationship of some networks with some MVPDs and concerns that they might also lead to anticompetitive behaviors with respect to both data services, and other networks.

These actions follow on FCC concerns that MVPDs and other broadband data service operators are violating new Network Neutrality rules limiting practices that arguably discriminate among data sources and services.  Comcast, in particular, has put a cap on customers ability to download content through their broadband service, and has allegedly engaged in slowing data speeds to high-demand customers.  Two other recent Comcast moves have also caused some concerns - their decision that Video On Demand streaming through their newly-launched Streampix service would not count against the cap, while video streamed from competitors would, and Comcast's decision to deny customers the opportunity to get Netflix bundled with other OTT services.  Other major MSOs, like Charter, have been more open to integrating OTT video streamers Netflix, Hulu, and Amazon in their TV Everywhere service portals.

Comcast's attitude, while understandable from a short-term business perspective (sheltering it's start-up from competition and limiting broadband use to delay network upgrades) - but it does appear to be clearly anticompetitive and violations of the FCC's network neutrality rules.  I'd also suggest that it's not good long-term business strategy in a world where there are strongly competitive alternatives.  Comcast's moves would seem to make their service less valuable to customers who increasingly have alternatives for Comcast's MVPD and broadband services - their behavior here will push heavy video and data consumers to shift to some of those competitors.

Sources - Feds launch antitrust investigation into online video competitionFierceOnlineVideo
Netflix CEO: Comcast flouts 'net neutrality' principlesFierceCable

Wednesday, June 13, 2012

Television's Digital Future (online)

  Television has already undergone one digital revolution - the shift to digital transmission systems for both terrestrial and satellite broadcasting.  It's facing another in the Internet and online video distribution.
  When the Senate held hearings of the future of television in April, however, the focus was on traditional regulation of traditional TV media (broadcasting, cable, satellite).  One commenter on GigaOm, Stacey Higginbotham, concluded that the Senate hearing had it all wrong -
 The future of TV isn’t to be found in deregulation — it’s on the Internet. We just have to let it happen. And to do that, Congress needs to look at how broadband providers control access to content, through caps, specialized offerings and deals.
The Internet has become a platform for services and TV is just one of those services. We need to start thinking about TV in terms of who can deliver it at a transport layer (the pipes), how it gets delivered (via a pay TV subscription, YouTube channels, Netflix subscriptions) and where the value is and who gets to charge for that. 

  That revolution is likely to have even greater impact on the television industry, as it exponentially expands the television programming market.  While there's been expansion in regular TV programming access via streaming and "TV Everywhere" offerings, the greatest expansion has been in the flourishing of legal (and illegal) movies and TV program access, in User Generated Content (UGC) available through YouTube and other hosting services, and other online videos marketed directly to users.
 Sandvine, an ISP equipment provider, recently released a report of mobile Internet traffic as of March, 2012.  Among its findings was that the volume of Internet traffic generated by Real-Time Entertainment (streamed audio and video entertainment) increased 55% in North America over the previous six months.  The growth was global (40% gains in Latin America and Europe, 39% in Asia-Pacific).
YouTube, on its own, generated 27% of mobile traffic in North America, and audio streaming service Pandora contributed 6% of all North American mobile traffic.
  Looking at it another way, Sandvine found that smartphones and tablets accounted for 9% of all fixed access network traffic in North America, including 16% of Real Time Entertainment, 9% of Netflix traffic, and 28% of all YouTube traffic.
  Further, improved mobile network capacity, mobile device capabilities and screen resolutions, higher resolution content and the availability of longer duration content (and live streaming), means even greater growth in traffic, as data files get larger.  In other words, online video traffic expands to match capacity - when capacity is scarce, users downscale video quality (from HD to SD), but when capacity is there, users return to the higher-quality streams and sources.
 A very different indicator of the shift to online can be seen in the efforts of Nielsen and other audience measurement firms in redefining many of their measures to include viewing through the Internet.  In comments to the Audience Research Foundation's ;annual Audience Measurement Conference, Nielsen officials indicated that they're considering redefining the concept of the "TV Home" - the foundation of all their measures.  What has prompted this is a unreleased study showing that the percentage of time spent watching video content on a traditional TV set has fallen to 93.7% from 99.4%.  The coming Cross-Platform Report suggests that the non-traditional viewing is about evenly split between computers online and mobile devices.  A related study found that up to 25% of all media consumption takes place while people are working, and that much of that media usage isn't currently being measured.  Some 15% of American workers report watching live TV while doing their jobs.  Nielsen is working at developing better measures for such viewing, and revising current definitions and measures to include alternative viewing options and behaviors.

Add in multiscreen viewing, social TV, "TV Everywhere", and a variety of new services looking to put local broadcasts online, and you can clearly see the shifting dimensions of TV media markets, use, and audience behaviors.  The trend is towards providing TV audiences with greater choices of video content, delivery mechanism, and viewing options.  The industry is, at least, recognizing this, and looking for better ways to deal with the changing situation, or at a minimum, being able to track changes.  But one thing seems clear, the future of TV is not likely to be decided by minor regulatory tweaks to existing TV industry models and markets.  If policy is to maximize both the public and private value of TV, it also needs to raise its head out of the sand and look at the real emerging issues, not the detritus of claimed "market failures" in traditional media models.