TV Everywhere

Intel has approached media companies with plans to launch a virtual pay TV service, selling subscription bundles over the Internet as opposed to through local cable networks, according to a report by the Wall Street Journal. The move could mark a defiant comeback to the TV space just months after the chip maker shelved a unit that produced CPUs for Google TV and other connected platforms. This time around, Intel apparently wants to do it alone.  The Wall Street Journal is reporting that Intel is planning to launch a service on its own set-top boxes and market it directly to the consumer – a big change in strategy for a company that previously was content with powering third-party products with its own chip sets. The paper has also learned that Intel could launch the service as early as late 2012

One of the coolest features in Apple's new desktop operating system, Mountain Lion, is AirPlay.  AirPlay already exists for the iPad and iPhone, but this version appears to be extend what AirPlay can do.  This new version is going to make life much better for users, and much less comfortable for big media companies.  If you're unfamiliar with AirPlay, here's how it works. You can wirelessly beam what's on the screen of your iPhone, iPad, or Mac to your TV, if you have an AppleTV, and have it running through your HDTV.  With Mountain Lion, this means you can send "webpages, YouTube videos, iTunes rentals, Keynote presentations, or anything else you can think of onto an HDTV without any added wires," says Jason Snell at MacWorld, who had some time to demo Mountain Lion.  If this is accurate, and you really can send webpages to your TV, it should scare the crap out of media companies who are doing everything they can to prevent themselves from being disrupted by TV on the internet.  If you can easily beam Safari to your TV, it makes pirated video streams that much more attractive. You can watch them on the big screen with ease.  It will also fluster Hulu. Hulu blocks Boxee and GoogleTV from broadcasting Hulu, even though both of them are web-based. There is code in GoogleTV and Boxee that tips off Hulu about what people are using.  Why does Hulu do this? We're not entirely sure, but it seems like Hulu's corporate parents don't like the idea of people watching free shows on big screen TVs. It's too similar to regular TV, without generating enough revenue. To solve the revenue problem, Hulu wants people to pay for Hulu Plus, which gives access to different devices.  Hulu isn't alone in blocking Google TV. ABC, CBS, NBC and all other media sites block it too.  With AirPlay, they won't know what's what. It will just be a Safari or Chrome or Firefox browser. And users will be able to get the big screen experience.

HBO's "TV Everywhere" service is now available on Samsung's Internet-connected HDTVs -- but customers of Comcast and Time Warner Cable can't access the feature today.  The two biggest U.S. cable operators also block access to HBO Go on Roku's Internet set-tops, while they do allow subscribers to access the service via PCs, Apple iPads and mobile phones.  Meanwhile, DirecTV is allowing customers to log in to HBO Go on Samsung TVs, but like Comcast and TWC the satellite TV company hasn't given the green light to Roku. DirecTV did not immediately provide an explanation for why the Samsung TVs are OK but the Roku boxes are not.  According to sources familiar with Comcast and Time Warner Cable's positions, HBO has not yet agreed to all of the conditions the MSOs require of their TV Everywhere partners, such as how subscriber information is handled on third-party devices and websites... 

On Time Warner Inc.'s Feb. 8 earnings call, CEO Jeff Bewkes urged the industry to make cable content available on as many devices as possible -- as quickly as possible.  "Frankly, I don't understand the reticence of distributors to authenticate on third-party sites like Roku and get HBO and TNT and all of those channels to television," Bewkes said. "As a general principle, we, as an industry, should be making viewers have availability with on-demand TV of all of their favorite networks on any platform, any device that they want to use. ... That's how you fulfill the promise of your brands and of television to viewers. And I'm hopeful that the industry will move pretty quickly past some of its -- I think their more minor concerns that they have, and they ought to speed up."

On the internet, it's always better to jump before you're pushed... Equally, though, timing matters. Ten years ago I recall mobile phone companies that had just spend billions on 3G bids demonstrating to journalists how the latest handsets could stream TV direct to their mobiles. It was great, if you wanted to watch something that looked like the first moon landing viewed on a TV across a road. TV on mobiles didn't take off; music did. But now we have the bandwidth and processing power to give us video capability all over the place. And what I think is the most impressive case of jumping before being pushed in the media ecosystem recently: BSkyB's announcement that it's going to launch an internet TV service that will let you get content from it on an ad hoc basis, no matter whether you use Sky's broadband or pay for Sky in your home.  In essence, Sky is doing with its TV output what Amazon does with the Kindle: saying "we don't mind how you view our content. We just want to be the conduit so we benefit from your attention." Video-on-demand (VoD) for anyone prepared to pay, not just existing users of its pay TV service.

Coinstar subsidiary Redbox today announced a new partnership with Verizon for the launch of a streaming video service. The joint venture will launch in second half of 2012 and be a subscription-based and "affordable service that will allow all consumers across the U.S. to enjoy the new and popular entertainment they want, whenever they choose, using the media and devices they prefer," the companies said in a statement.  With the new service, Coinstar better positions its primary business for the digital age. Redbox's kiosks, generally located at grocery or retail stores such as Walmart, offer customers dollar-a-day DVD or video game rentals. With the addition of a streaming service and its new-fledged partnership with Verizon, Redbox now further complicates a crowded field of digital streaming juggernauts that include Netflix, Amazon, and Hulu.

... Details of the partnership are still sparse. The companies only indicated they plan to introduce a "product portfolio" and will offer "subscription services." It's unclear what these services are; how or whether they will be bundled with Redbox's kiosk business or Verizon's VOD services; what content these services might provide; or how much it'll cost.

Nearly 70% of total TV shipments in 2016 will be for connected TVs, resulting in revenues of more than $117 billion (€88.3 billion), according to a new report by IMS Research.  This contrasts with a global figure of 25% last year and shows, according to the company’s market analyst and author of the Connected TV Sets – World – 2012 report Veronica Thayer, that “internet connectivity is becoming a standard on high-end TV sets, and it’s increasingly being added to mid-end televisions.”  The report also shows that proprietary operating systems will remain the main type used by manufacturers in the next five years, although Android OS will start gaining presence and is expected to reach a significant share of the market by 2014.  It shows that in 2016 more than 80% of the connected TV sets shipped worldwide will have built-in Wi-Fi and close to 30% will have advanced user interface features such as motion, gesture or voice.

...The OMAP specification will benefit stakeholders in the online subscription content ecosystem:

-- Multimedia content publishers and distributors will reduce unauthorized access to content, share a common architecture to minimize operational overhead and cost and provide consumers with
standardized, secure access to media content over the Internet using their home and mobile devices and client software.

-- Technology vendors and third-party service providers can develop value-added services and commercial solutions to deploy across the entire subscription content ecosystem.

-- Consumers get choice, convenience and a simple and consistent experience, unlike today's proprietary solutions.

"OATC [Open Authentication Technology Committee] is creating the open standards needed to enable simple online access to subscription TV services by bridging the gaps in existing technology with practical and workable solutions," said Glenn Reitmeier, OATC president. "We are very excited to announce this preview of our first of several standards to come that will help MVPDs and programmers give their subscribers more choices than ever before." The OATC is inviting the public to download (http://www.oatc.us/Standards/Download.aspx ) the draft specification and provide comments by May 4, 2012.

...What is clear is that there is no current set of best practices for TV Everywhere authentication. Those operators who provide multiple accounts generally seem to limit each one to one simultaneous login per stream. Other operators enable users to log in only with the master account, generally to ensure that subscribers won’t want to also share their billing information, usage data and parental controls with others. But they will allow multiple simultaneous streams on that account. Others will have one stream and one account. It is the Wild West out there, possibly for good reason.  

The password-sharing phenomenon:  So how prevalent are these shared accounts? At this point, probably not very. For now, I am probably the exception rather than the rule — but I’m sure I’m not alone.  Anecdotal evidence tells me that subscribers to video services tend to share within a household or among a group of friends regardless of the price. I have seen friends share usage of a Netflix or Hulu Plus account. More surprisingly, some friends who share tend not to expect payment back in return for shared access.  But that’s just $7.99 per month for a range of older library content. What happens when you are charging upward of $100 for cable access and are offering up content that is only available with a cable subscription? HBO shows, for example, are only available on DVD and Blu-ray long after a season ends, generally about a month or so before a new season begins. And you won’t find them anywhere online unless you have a TV Everywhere account. But if you do, you will be able to watch episodes the next day and increasingly on the device of your choice.  

A problem for the college generation?  For now, sharing of TV Everywhere accounts is still limited to those who know what those services are, and the industry as a whole still has a long way to go to educate their customers about the streaming content they have access to. But there is one demographic that seems perfectly situated to take advantage of TV Everywhere logins: college students.  As a whole, college kids are tech-savvy, watch content on multiple platforms, and generally don’t have a lot of disposable income. Moreover, they don’t have a lot of choice when it comes to whatever content is available through their university dorm’s cable offering. So being able to keep tabs on some of their favorite cable programming while away from home can be a value-add, indeed.  One cable network spokesperson who wished to remain anonymous told me it is not necessarily a bad thing for college students to have access while at school. After all, it only drives interest in the programming when they graduate and get their first jobs. But the question remains whether TV Everywhere will eventually convert them to become paying cable customers when they graduate or if they will continue to use Mom and Dad’s account. That is something big cable might have to worry about, especially as the cost of services continues to increase...

... The biggest tech companies are no longer content simply to enhance part of your day. They want to erase the boundaries, do what the other big tech companies are doing and own every waking moment. The new strategy is to build a device, sell it to consumers and then sell them the content to play on it. And maybe some ads too.  Last week’s news that Google is preparing its first Google-branded home entertainment device — a system for streaming music in the house — might seem far afield for an Internet search and advertising company, but fits solidly into a industrywide goal in which each tech company would like to be all things to all people all day long.  “It’s not about brands or devices or platforms anymore,” said Michael Gartenberg, an analyst at Gartner. “It’s about the ecosystem. The idea is to get consumers tied into that ecosystem as tightly as possible so they and their content are locked into one system.”

...While Netflix, Hulu and YouTube have already introduced their own original programming, the Amazon Studios project preceded all of those other initiatives. However, while Netflix, YouTube and others are sourcing their programming from professional production companies, Amazon took a different approach with its studio plans — it’s crowd-sourcing scripts and projects from a community of artists and optioning them for free.

Boxee’s live TV dongle has only been available for a few weeks, but the company is already embroiled in a fight with cable giants like Comcast and Time Warner Cable over it, and is now getting support from groups like Public Knowledge and the Consumer Electronics Association.  At the core of the issue is whether cable companies should be allowed to encrypt their basic cable programming, something that existing regulation doesn’t allow. Unencrypted signals can be used by tuners built into most modern TV sets as well as equipment like Boxee’s live TV tuner to access these basic cable channels straight from the coax cable that comes out of your wall, without the need for any set-top box.  Cable companies have asked the FCC for waivers to these restrictions, arguing that encrypted channels would reduce piracy and that encrypted cable connections can be remotely serviced, eliminating the need for many service visits. The FCC is currently hearing all sides on the issue as it contemplates whether or not to do away with the restrictions and allow all cable companies to encrypt basic cable. Boxee has filed multiple letters with the commission and met with its staff last week.

On Wednesday, the startup wrote on its blog: “(The cable companies’) real motivation is to prevent you from being able to connect the cable from the wall directly to your TV or Boxee Box. You will need to rent a set-top box from your cable provider, pay an extra $5-$15 per month and it will no longer work with your Boxee Box or similar devices. The cable companies are losing subscribers every quarter. If they want to reverse that trend they should look into building better products, reducing prices and improving customer service, not going to the government asking for rule changes to force consumers into spending more money and blocking start-ups from competing.”

Boxee’s position has been shared by Public Knowledge as well as the Consumer Electronics Association and consumer electronics manufacturers like Hauppauge, which makes the Boxee dongle. The cable companies on the other hand have been getting support from the Motion Picture Association of America (MPAA) as well as some municipalities, including Miami, Florida.

Altogether, more than 80 documents have been filed with the FCC on the issue. Many of these filings from both sides make it clear that this isn’t just about what’s going to happen to those basic cable channels, but also about the role consumer electronics manufacturers, cable companies and start-ups like Boxee will play in the future of pay TV.