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Summary:

“In their own investor-presentation slides, they say things like, ‘We only want to serve the better homes’ ….. I think ultimately, legislators and regulators are going to decide, Is it fiber-to-the-home or fiber to the rich?,” Brian Roberts, CEO, Comcast, on Bells IPTV programs in Multichannel […]

“In their own investor-presentation slides, they say things like, ‘We only want to serve the better homes’ ….. I think ultimately, legislators and regulators are going to decide, Is it fiber-to-the-home or fiber to the rich?,” Brian Roberts, CEO, Comcast, on Bells IPTV programs in Multichannel News

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  1. We (2Wire) are partnering with SBC to develop their “U-Verse Homezone.” It combines SBC DSL, Echostar’s Dish Network, Yahoo! broadband content, and other partners for an unprecendented home entertainment service.

    Homezone enables SBC to provide a rich entertainment service to their entire footprint (40 million homes), not just where they intend to upgrade their network (18 million homes). Learn more about the service here.

    More DSL price cuts. Comcast’s acquisition spree. If recent news is anything to go by, the war between telcos and cable companies is fiercer than ever. But the next battle could be the most revealing yet.

    The first battle saw cable companies stepping into telco territory with the launch of VoIP services. They stole an early lead in the race to deliver a complete “triple-playâ€? of broadband voice, data and entertainment services.

    In the aftermath the telcos were quickly labelled as dinosaurs. They retaliated by partnering to offer bundled DSL access with satellite TV services. These steps into the home entertainment space have shown that telcos are more than capable of rolling out new services to customers – and that customers will buy them.

    So it’s no surprise that the cable guys have issued another battle cry. Is it any wonder that Comcast’s bid for Disney came hot on the heels of SBC and EchoStar’s partnership, or Verizon’s deal with DirecTV? Clearly, boosting its content strategy is a sign that Comcast is looking for new, cost-effective ways to deliver consumer media.

    The next phase will decide the war – and telcos are in a great position to come out on top.

    The battle is likely to be fought on two grounds. The first will be delivery of on-demand media content. The second will be integration of landline and wireless phone services.

    Partnerships between DSL and satellite TV companies bring the day closer when your telephone company can offer television and movies on demand. But it’s the telcos’ track record in data networking applications that will make these bundled offerings much more than multiple services on a single bill. Media convergence nirvana is downloading music from a service on the Internet and listening to it from any device within the home. It’s pausing an on-demand movie on the TV in the living room and then going to the bedroom to continue the movie where you left off. It’s sharing photos from your last vacation with friends in your living room, and then uploading the photos to a local store to be printed.

    With their investment in data home networking services, the telcos already have the infrastructure in place to own and operate this type of integrated service. As the adoption of the initial DSL and satellite marketing bundles has shown, they clearly have the trust of their customer base necessary for cross-selling.

    The second battleground will be the integration of traditional landline and wireless phone services. Here the telcos have a huge advantage: their wireless assets. While cable operators are replicating landline phone services using VoIP technology, the telcos see a day when landlines become obsolete. Cell phone operators will soon trial GSM/WiFi voice roaming. With built-in WiFi, cell phones will offer a better connection at a lower price from the home or office, which begs the question: why not use your cell phone all the time? As this concept takes hold, there will be little reason to keep two phone numbers. If you decide to keep your landline phone at all, it will be merely so you can have calls to your cell phone routed to your landline when your mobile is switched off.

    Now imagine the impact of combining these wireless and entertainment services. If your cell phone has an MP3 player you could download music to the phone from your home collection. If you are delayed at a business dinner, you could program your personal video recorder from your mobile phone to record your favorite show. It’s only a matter of time before we see the telcos’ data home networking capabilities, demonstrated in applications such as Web-based remote access, extended to media and voice.

    But the real decider in this war will be which side can offer its subscribers the best deal. If you’re going to spend all those dollars with one provider, you’ll expect some sort of financial return, right? If you believe that more services bundled together equals greater collective discount, then telcos will win by bringing wireless into the equation and offering savings across the whole trio of voice, data and entertainment services.

    One thing’s sure, the investments telcos have made in data networking and wireless services are solid ammunition for the impending battles over the digital home. Only time will tell who wins the war in the end, but in the meantime our living rooms are likely to get a lot more entertaining.

    Brian Sugar
    VP, Marketing 2Wire

  2. While I agree with many statements Brian makes there are a few things that I think are being glossed over or overtly trivialized. The triple play utopian nirvana Brian describes certainly sounds great but it only exists in the fanatsies of most persons minds. To pull of the room roaming Tivo/IPTV scenario Brian describes you have to get these groups into a room and get them to all agree on the same standards and protections for content and delivery:

    Content providers (Hollywood, etc)
    Consumer electronics manufacturers (Set-top, Tivo, DVD players, etc)
    “Delivery” network providers (Cable/DSL/GSM/3G)

    While many could argue that IPTV is a standard and that there are many forms of DRM in use or in development for current and next generation media delivery systems no one is talking to each other. DSL & Cable ISPs end up having to deal with legal threats from RIAA and MPAA lawyers due to illegal filesharing by their customers. Old world media broadcasters, TV, Radio, Movies see the triple-play as a complete and total threat to their dominance of their ability to control the delivery of the content and its percieved value and end cost. Going out to the movies has now reached the point where it is the same cost or slightly cheaper to wait for the title to be released on DVD where you will get the movie plus additional value-add content. DVD works and is a great value and Hollywood can see it. DVD sales alone have the ability to ressurrect canceled TV shows even in some cases.

    Furthermore, look at the trouble that seemingly natural good ideas like the iTunes/Motorola cellphone are having. The technology is there, the software and user experience are ready. The mobile carriers see it as a revenue stream that is taking money away from their bottom line isntead of seeing it as a bottom line win for improved media perception for customers to generate goodwill and further buzz and excitement for the carriers. In this case you have 2 out of the three elements I specified co-operating and its going nowhere and slowly because of corporate interests being too focused on the bottom line short term instead of working towards a better long term experience for their customers.

    Another thorn that exists in Brians triple play DSL/Sat/GSM media bonanza is customer support and customer satisfaction. Maybe its just me but it certainly seems like customer service is rarely done well by the wireless carriers. Everyone has a horror story (friend with $1900 bill from Sprint “billing accidnet” for example) or seems to know someone who had a poor experience. Now take the world of cellphone customer support and layer ontop of it your media triple play world. What happens when your media you downloaded from your PC wont play on your phone? Do you call the mobile carrier support people? What if they try to tell you its a problem with the music store you got your media from? What happens if the music store support people tell you its not a problem on their end? The geeks and technorati will take the time to figure these problems out and deal with them because they are hard wired for that kind of behavior but what about your mass market that is going to be making your new triple play all this money after the early adopters/bloggers/beta testers have been using it? What happens when they start running into glitches? Are they really going to care about the DRM reasons why their new Brittney Spears MP3/WMA/AAC/XXX can play on their PC but not their cellphone? No, they will just want it to work, period. They want to pay money for something that makes it more enjoyable and easier and right now I don’t see how the triple play is going to overcome the Joe Sixpack obsctacle for a long time coming.

    As it stands right now I’ve had to make my own media triple play for my own hardware and devices, but Hollywood thinks it is high piracy. Or the markets are still thinking too narrowly about who their target audience is. As a personal example I happen I be a fan of Doctor Who as well as a newer show in Australia called My Restraunt Rules. I live in the US. The new Doctor Who show won’t hit the states for who knows how long since it just started being broadcast in the UK on BBC3. Then when it does come here it will either hit BBC America or PBS, but no one really knows who will buy the distribution rights to the show in the US. Odds are I will see the new series hit DVD faster then broadcast here in the States. Of course those inital DVDs will be region locked (a rather annoying and pointless piece of DRM IMHO) so the bolkes in the UK can view it but not the folks in the US. The fact of the matter is, when I can buy the show on DVD legally I will do it. In the meantime however I feel like watching the series which means two routes:

    1. Find a really nice friend over in the UK to tape the episodes and then mail them to me. Expensive, and somewhat legal grey area from my understanding. Also requires dealing with PAL to NTSC conversion.

    2. Go find a Bittorrent site hosting the Doctor Who episodes and download them. Then use my ethernet network, desktop PC and D-Link DSM-320 to playback XviD encoded AVI episodes to my 32″ TV.

    From my viewpoint #2 is going to win any and every day of the week. I realize the MPAA claim/state that fair use doesnt allow redistribution but at the same time I think the argument can be made that an encoded video is not the same quality as the original broadcast, nor is what is being transfered the orginal content (i.e. show transmitted via analog OTA vs an encoded AVI data file). Furthermore, if you look at TivoToGo they are allowed to share with up to 9 other people their recorded content. If anything it just smacks of old media trying to retain as much control over the new media as much as possible even if it means criminalizing the people who quite easily are the ones most likely to be huge fans of it and previous big contributors in the form of monies spent on personal entertainment.

    In any case, getting back onto the point of my writing here, the triple play is technically possible but I dont think it is ever going to be realized until the old media guard loosens up a bit and learns to embrace digital media distribution and the possiblities it can open up. If that doesn’t happen then at best you will get 2 out of three of the needed parties to agree on something great only to have it get tripped up when the third party stars waving their egos around trying to protect fragile revenue streams when they should be taking advantage of their position to provide more choice of offerings and ways in which their media experience can be delievered in a smoothly integrated, economical way.

    -DES

  3. I don’t know if it is the geek in me, but if I get rich enough to afford it just give me an OC3 to my home along with full boat cable and I am fine. I don’t need any of that extra “content” as described above. That is for the AOL type users out there.

  4. Jesse Kopelman Monday, May 16, 2005

    OC3, pish. Move to Hong Kong and you get that now for what your paying for 3Mbps the US. Korea will probably give it to you wireless by the end of next year. TBps or bust, I say.

  5. Jessee

    stop taunting us like this…. guy it is hard anyways to get things going on the meager broadband i have …. sigh

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