Revenue-wise, such a world might look like this:

The red line represents what the (admittedly unrealistic) scenario would look like if OTT subscriptions worked their way up to 100 percent penetration of pay-TV households (around 100 million) by 2014. The end result would be a roughly $30 billion decrease in video subscription dollars, down from today’s $54 billion video services market in the U.S (as represented by the blue line).

What does the video industry do to make up for lower revenue in a world where fewer subscription dollars cascade down the video river?

Advertising

The most obvious way to make up lost subscription dollars in an OTT wold is advertising. Perhaps the best example of a company leading the charge here is Hulu, with its better targeted, more relevant advertising that drives up CPMs as consumer engagement (and resulting ad effectiveness) goes up.

But even in a world of hyper-targeted ads, it’s important to note the overall pie will likely still shrink, as fewer pay TV subscribers means fewer advertising dollars coming through the pay-TV channel.

Live Content

Perhaps the best defense against cord-cutting that pay-TV has is live content. The vast majority of big-ticket live sports and other content lives today on pay TV. The reason it’s so effective is that there’s a clear difference in consumers’ minds about the experience of watching a dramatic sports event or vote-driven reality TV show in real time (and as a community) vs. watching later on a DVR.

But while pay TV will continue to use live viewing as a competitive weapon, content owners can also monetize outside of the pay-TV channel through direct over-the-top live streaming, something Major League Baseball has shown is a viable strategy. The live-stream audience will continue to grow rapidly (reaching 323 million by 2014). Smart content owners will look to better engage consumers through both stream live content and the community aspects around live TV.

Overall, the video entertainment market is in significant flux, and while in many ways breaking the pay-TV stronghold on subscription dollars opens up new potential avenues, much of the freedom for the consumer will result in a market where content owners themselves will need to be much more creative in how they get returns on their assets. Check out my weekly update (subscription required) at GigaOM Pro this week where I explore more ways to make up for shrinking PayTV subscription dollars.

Image Source: flickr user John Vetterli

Related Content from GigaOM Pro:

• The Connected TV Marketplace
• The Live-Stream Video Market
• Three Reasons Over-the-Top Apps Will Beat Big Cable

Those like Kyte, Livestream, Ustream and BitGravity serve both the consumer and commercial market segments. They are, however, primarily focused on offering a diverse platform of capabilities to commercial content providers seeking a mass audience, or to business-to-business customers. Others players, including Justin.tv and Qik, focus primarily on consumers as the content providers and viewers, and on the social media tools that prompt individuals to create, share and view each other’s live content. YouTube, meanwhile, is just rolling out live-streaming capabilities. As the dominant online video service company, it straddles both market segments but has yet to deliver mass services.

As the market continues to grow, here are a few key questions for content providers and live-stream platforms to consider:

How will the revenue mix change? Advertising will generate a higher percentage of total revenue from live streaming as the size of the audience grows and begins to include even more desirable demographic groups. Individual consumers are unlikely to pay for premium service accounts in large numbers, but revenue from commercial and business premium accounts will sharply rise as large numbers of content creators begin using live streaming.

Will the market develop differentiated segments with specialized providers, or will companies that provide the widest range of capabilities and services be the winners? As the market rapidly evolves, it’s likely that content providers will become more diverse than today and seek live audiences for more narrowly defined categories of live streamed content. We expect providers to focus on: events (esoteric sports); locations (popular entertainment venues); professions (medical or law enforcement); and cultural themes (comic or science fiction conventions). Given the growing diversity of the market segments, it’s likely the market will need providers that can offer a range of services tailored to many types of commercial content delivery and support a diverse set of viewing markets. However, the more narrowly defined segments, like those listed above, are better served by specialist companies who focus their services and social media expertise on them.

What barriers can be put in place to raise cost of entry? High-definition streaming, high-quality streams with extremely high reliability and advanced technology like 3D are the most likely barriers that new entrants will have to overcome to enter and be successful in the market. The market leaders are moving rapidly to provide high-definition services soon; all claim to be able to deliver scalable quality reliably. None have announced 3D service, but have it on their radar, after Internet 3D was first demonstrated at the European IBC Conference in September 2009.

Are live-stream companies attractive acquisitions? For that matter, do they want to be acquired? With the potential market expansion expected in the next five years, driven by sale of millions of mobile devices able to play live-stream video, right now there is little need for live-streaming companies to seek help in getting access to market segments. Scenarios could develop in which large content or services companies may want to acquire an in-house live-streaming network provider, but today’s healthy market outlook makes these scenarios rather unlikely.

Read the full report here.

Related Content From GigaOM Pro (subscription required)

• The Connected TV Marketplace
• The Future of TV Can Bet on “Apps Everywhere”
• Four Ways Social Media Will Change TV

Let’s take a look at each.

Social Viewing

While the early social viewing implementations have largely been Mystery Science Theater 3000 knockoffs, the real action for viewing parties is at Twitter. The network’s real-time nature allows for interaction and surprise for fans who want to engage with others during the live-viewing experience. This isn’t to say that Facebook won’t show up at the shared viewing party, though.

Measurement

Sloan’s presentation displayed fascinating visuals on how Tweet activity changes in live show windows (for example, the chart below, which shows Tweet activity during the first episode of this season’s Dancing With the Stars). This is a gold mine of information for brand marketers and TV execs looking to understand, down to the minute, how people react to different parts of different shows.

Source: Twitter

Curation

While curation is a big topic on the consumer web, it really hasn’t hit the video world yet. Startups like Shortform and Redux are beginning to enable curation of video content, but it won’t be long before personalized video channels will be created for TV viewing. This means not only do we get to look forward to creating our own channels someday, but may have to suffer through some media personalities becoming their own broadcasters.

Commerce

Much of the hot startup activity in the web world in 2010 has been all about commerce on the computer screen, but it’s logical to think as connectivity goes to the best screen in the house, social commerce will also become social TV commerce. Imagine a social overlay on top of a QVC channel or even a lifestyle channel with a highly desirable demographic. The ability for a brand to offer a TV-based “Groupon” type offer and that also allowed a person to share with their own social graph could be highly compelling.

Read the full post here.

Related Content From GigaOM Pro (subscription required)

• Report: The Connected TV Marketplace
• Here Come the Social TV Apps
• TV Apps: Evolution from Novelty to Mainstream

With hundreds of millions of connected TVs and set-top boxes expected to ship worldwide over the next five years, the television business is on the cusp of the biggest technological upheaval since the introduction of cable TV.

We discuss the current contenders in this connected TV sweepstakes in a new report at GigaOM Pro (subscription required).
The big guns: Google, Apple, and Microsoft
Leading the rush are established platform providers Google, Apple and Microsoft. Each is pursuing a radically different strategy, however, as they seek to leverage their respective strengths in web technologies and the digital living room.

With Google TV, an Android-based platform built around the Chrome browser, Google hopes to establish search as a significant modality for content discovery on TV so it can extend its search-based advertising business to the living room. It also plans to extend the Android apps ecosystem to its connected-TV platform.

Apple is moving more gingerly than Google. We believe that its recently launched Apple TV set-top box is merely a down payment on what a broader effort to extend its App Store platform to the living room. The company will likely combine in-home and mobile access to video content across multiple Apple devices.

Microsoft, meanwhile, has already built an extensive online network for video delivery in Xbox Live. Now it is investing in gesture-control technology, such as Kinect, as it seeks to create new ways for users to interact with web-connected devices. James Baldwin, CTO of Microsoft’s Media Platforms division claims that gesture control is blurring the lines between games, social networking and movies and TV content.
The upstarts: Roku, Boxee, and Vudu
While the established platform providers have the inside track, they are joined by a number of startups, led by Roku, Boxee and Vudu. Roku pioneered the use of embedded apps in a set-top box to deliver streaming video to the television, even if the TV itself was not connected to the Internet. It now finds itself in a face-off with Apple TV.

For bringing streamed video content to the TV, Boxee is the current leader among browser-based platforms. Its free software was designed originally for TV-connected PCs and laptops, but the company is now rolling out a set-top box with its software embedded. It now finds itself facing off against Google TV.

Vudu began as a set-top box but now markets its software as an embeddable apps platform and movie VOD service for connected CE devices. Recently acquired by Wal-Mart, it’s a wild card that could upset the plans of Apple and Google.

Some TV set manufacturers are getting directly involved, developing a software platform for their connected displays. Most prominent among these is Samsung. Given its market share in the TV industry, as well as mobile handset market, Samsung’s vertically integrated apps platform has to be considered a contender.

Like Microsoft, Sony has also built an extensive online network around its video game console, the PlayStation 3, which it has expanded to include downloadable movie and TV content. The PlayStation Network could provide Sony with a solid foundation from which to launch a broader assault on the digital living room. But so far it has not attempted to extend the reach of the network beyond its gaming platform.

Read the full report here.

Image source: flickr user James Thompson

• Here Come the Social TV Apps
• Got a Cable Subscription? There’ll be an App for That
• TV Apps: Evolution From Novelty to Mainstream

Cable operators like Comcast are a different story: They’re notorious control-freaks when it comes to consumer experience and content, and they’re not hobbled like satellite operators are when it comes to interactive services and VOD. Still, this hasn’t stopped Google; news indicates the company is pursuing integration deals with cable companies.

But will cable MSOs bite? A Google TV platform will be a tough sell, but I think after a decade-plus journey through the interactive TV desert with OCAP/Tru2Way, many MSOs are too tired and thirsty to resist what Google could offer in the form of applications and interactive services.

In my weekly column at GigaOM Pro, I outline three potential ways Google TV could integrate with cable MSO offerings:

1. Google TV, Dabbler Edition. Here we see cable MSOs slowly rolling out (their specialty, after all) Google TV sidecar bolt-ons to their set tops. This would allow them to test how consumers use the service, but wouldn’t give audiences too big a taste of the Goo(d)gle life.

2. Google TV, Sidecars for Everyone! Edition. This is essentially the DISH deal, with nationwide rollouts of sidecar boxes and light integration with the set-top UI and EPG. Chances are, services competitive with cable VOD such as Netflix would be disabled or excluded.

3. Google TV, Full Monty Edition. I think Google’s ultimate goal is to get the Google TV platform fully integrated into carrier set-tops, with a cobranded UI/EPG, availability of core Google services (like video chat) and new interactive services for consumers through an Android marketplace.

I think we’ll see deployments of the first and second items on the list above, but will cable MSOs go full monty? I have my doubts. Doing so would not only be letting the fox in the henhouse, it’d be giving the fox a knife, spoon and napkin at the dinner table.

Heck, a few years ago, who would have predicted another group of controlling, clamped-down carriers welcoming the fox over for dinner in such a big way? The iPhone changed the mobile space in that respect; now Google is hoping to pull off the same trick in the world of payTV.

Read the full post here.

Image source: flickr user Svadilfari

Steve Jobs is known for his stance regarding sexual content in the App Store. Essentially, he wants to keep it clean, so that most content is family-friendly. There are notable exceptions, like the official Playboy app, but generally speaking, nudity and sexuality are a no-no for iOS apps. If that’s not enough, worried parents can lock their kids devices down, restricting access to certain types of content, or to the App Store or Safari altogether.

Apple’s ideas of what is and isn’t acceptable in the App Store have led to some controversial decisions regarding which apps get banned or disallowed in the past. For some, it seems inappropriate that a company can decide what you should and shouldn’t do with your device once you own it.

The new patent takes that a step further. If this tech ever makes it way to your smartphone, it could theoretically alert a user, admin, or other designated individual whenever objectionable content appears in a text message. In practice, that could mean a parent gets a text when their teenage son writes something racy, or that your boss gets a notice whenever you swear in an outbound communication.

According to the patent, the iPhone could also offer suggestions with which to replace the offending text, or just delete it outright as soon as you’re done typing so that it never gets sent in the first place. In effect, that means it could actually change what you’re going to say.

Now I’m not against parents protecting their kids from potentially dangerous situations. That makes sense. But putting this degree of control over something as basic as what you can say with a direct communication device frightens me. Sure, this would probably end up residing in the Restrictions section of the iOS Setting menu, but even just the fact that it would be there would invite things like use by employers to monitor employee texting even more closely than I’m sure many already do, something I definitely don’t approve of.

What do you think? Is this a feature you’d welcome, or an example of Apple going too far?

Related content from GigaOM Pro (sub req’d):

• Why Porn and the iPad Are Key for HTML5
• Author to Audience: Disintermediation in Publishing
• Who Owns Your Data in the Cloud?

This week, we saw a new Google TV offering from Logitech and there’s also indication the revamped Apple TV is selling at a brisk pace. This news has me asking the question, would Facebook ever go after the third screen in a more serious way than offering a simple widget? My feeling is yes; the TV screen seems too big a honeypot to ignore for a company that lives on advertising dollars.

All big brands in consumer tech have, at some point, made a play for the living room. In the chart below, I break down the players by their early, often failed, efforts, and their more evolved strategies to establish a beachhead on the TV screen. In my weekly update at GigaOM Pro, I evaluate three potential routes that Facebook could take to the living room:

1. The Evolved Widget Strategy. This is simply a more evolved widget/app effort than we’ve seen on the likes of FiOS, where Facebook allowed for more personalized video and entertainment offerings streamed from the person’s own Facebook network.

2. The Middle-Ground Strategy. This would mean a Facebook UI based on a dedicated app or in-browser on the screen. It would include Facebook-based video streams, subscription offerings, and limited advertising capabilities that would allow Facebook to monetize its huge installed base.

3. The Living Room Domination Strategy. This would involve an immersive Facebook UI/program guide offering a combination of streaming and possibly broadcast content, a true platform for applications and communication services, and perhaps even contextualized recommendations (think Facebook Likes for TV) for video entertainment. This would require significant content partner deals with some CE manufacturers and large media companies.

Will Facebook pursue one of these paths? I have no idea, but they have a half-billion accounts with which they could try to take to a third screen. As we’ve seen with both the company’s mobile and PC-web strategy, its growth strategy is based on extracting more value out of the market through adding features than can ultimately attract advertising revenue.  If Facebook were to make a TV play, it would need to be one that leveraged the highly personal nature of a person’s own social graph but also was optimized towards the ingrained viewing habits of the living room.

Tough to do, sure, but I’m willing to bet they give it the old college try.

Read the full post here.

Image Source: flickr user BrentDPayne

It doesn’t work with official apps (either the default set or Remote.app, etc.), unfortunately, so you won’t be able to completely customize your theme. But at least you don’t have to wait around for developers to change the icons on apps that offer great functionality but dismal aesthetics. Here’s how it works on an iPhone 4:

1. Install iPhone Explorer (free, Mac/PC).
2. Plug in your iPhone and launch iPhone Explorer.
3. Navigate to “phone name/Apps/appname/appname.app,” replacing the italicized values with your own, of course.



4. Backup the “icon@2x.png” file you find there by dragging it to a directory of your choice in Finder.
5. Name your replacement icon (which must be a .PNG file, size 114×114, 72 PPI with no transparency and no layers) “icon@2x.png” (case-sensitive).
6. Drag your replacement to that folder in iPhone Explorer, delete the original file, and manually power down and power back up your iPhone.

If you’re using an iPhone 3G or 3GS, instead of looking for and replacing filename “icon@2x.png,” you’ll be working with “icon.png” and your replacement should be 57×57, not 114×114.

iPhone 4 and latest gen iPod touch users can also use this to replace not-so-nice looking icons that haven’t yet been updated for the Retina Display. Just replace the “icon.png” file with a new 114×114-sized version. That’s what I did with the PicPosterous app for the purposes of this article, and it works great, as you can see in the screenshot.

And for nervous users, don’t worry. As you don’t have root access to your device, you can’t accidentally remove any crucial elements of your device’s OS. You also don’t have to worry about those rounded edges on your icons. Just use a square image and iOS will round the corners for you.

What icons are you looking forward to changing?

Related content from GigaOM Pro (sub req’d):

• How to Market Your iPhone App: A Developer’s Guide
• Report: The In-App Advertising Landscape
• HTML5′s a Game-Changer for Web Apps

Amidst reports from Om that AOL is close to buying TechCrunch, the web giant announced today that it has acquired online video-syndication specialist 5min Media. The purchase will help boost the amount of video AOL can serve on its sites, while also increasing the syndication and distribution possibilities for its own video assets. Terms of the deal were not disclosed, although some estimates place the value of the deal at around $50-$65 million.

5min runs a syndication platform that acts as a middleman between publishers who wish to share their videos with each other. It allows a publisher that doesn’t have a ton of video assets to bulk up its video pages with syndicated videos from other sources, and delivers them based on a semantic technology that matches up videos with the content of the web page that they run on. Participating publishers can then get a share of the advertising revenue, with 5min taking a cut as well.

The startup has had good traction in attracting partners, with more than 1,000 media companies and independent video producers syndicating videos into the platform, which are sorted into 21 different verticals to appear on more than 800 partner sites. Altogether, 5min has more than 200,000 video assets in its network, and served more than 130 million video streams in August, according to comScore.

The value proposition to AOL is clear — 5min gives it a fast and easy way to bulk up its video offerings without having to invest too much to produce its own original videos. Instead it can now automatically match up relevant video content to run alongside whatever text it has in its network. At the same time, it’ll open up the possibility for more broadly distributing and monetizing whatever original videos it has produced.

5min had raised a total of about $13 million in two rounds of funding, including a $7.5 million round last July. The company, which was founded in 2006, has offices in New York and Tel Aviv.

Related content on GigaOM Pro: (sub req’d)

• A Guide To Online Video Monetization Options
• Social Advertising Models Go Back to the Future
• Will Micropayments Make Money for Web Video?

The future of the living room will be determined in large part by leadership in software, something Cisco has always been challenged by. The company’s traditional customers in this market are cable MSOs, a stubborn bunch who are determined to craft their own software solutions, but, in reality, have been flailing in terms of creating a true vision for next-generation interactive services for the TV market.

What Cisco needs to do is carefully balance its legacy customer sets while creating innovative new service platforms that harness the power of a new generation of software developers. This requires investing in software beyond simple UI and consumer experience (competencies acquired through the purchase of Pure Digital/Flip), and instead, taking a platform-centric approach that would conceivably unleash a set of creative forces beyond Cisco’s own in-house developers.

This could mean acquiring Skype, which has endeavored to push into the living room through its SkypeKit offering. A move like that would give Cisco a low-end offering to accompany its high-end telepresence dreams. Or, the company could pursue a smaller bet like Boxee. Either way, developers would appreciate a large incumbent provider with strong carrier relationships creating a platform on which to create new services and applications.

The recent acquisition of ExtendMedia is a step in the right direction for Cisco, since it gives them an OTT delivery management system and moves beyond the closed cable architecture, but that’s only a first step. By going big into software and ultimately marrying the results to both carrier hardware and retail offerings, Cisco could provide a law-abiding counterbalance to the Wild-West entrants like Google and Apple looking to take over the town.

Read the full post here.

Image Source: Flickr user dailyinvention

Besides the need for creative price bundles for shows and TV-optimized apps, Apple iTV needs FaceTime.

Those who follow GigaOM Pro know we consider video communication a big opportunity. In fact, we forecast the market will go from practically nothing today (less than half-a-million TV-based video calls in 2010) to 2.7 billion TV-based video calls in 2015.

Ok, it’s big, but why should Apple be involved in this market? It’s quite simple, really:

• First off, it neutralizes Google and Skype. Google will most certainly push video chat into Google TV, and Skype is already pushing hard into this market. As we’ve written over at GigaOM Pro, Skype’s SkypeKit platform is Skype’s attempt to introduce its VoIP and video communication, as well as potentially other services and applications, onto CE platforms.
• Second, it brings in a whole new demographic. While my mom and dad haven’t purchased an Apple product since the Apple IIe of my youth, I’m pretty sure they would consider a good, low-cost video-chat device like an iTV. Why?  They can’t get enough of talking to my kids on Skype video, and I am sure that there are millions of others like them who would embrace high-quality video chat on TV.
• It’s a differentiator from the cable company. Sure, Apple didn’t get all-you-can-eat $30 video subscriptions, but video chat done right could be hugely popular, and given how slow traditional cable providers move, Apple can establish themselves with a very addictive service while Big Cable spins its wheels.

I’m not entirely sure Apple will introduce Facetime next week at their big event, but they should. No one has been able to do video chat in the living room right just yet and, at least for the next six months, it’s Apple’s market for the taking.

Read the full post here

Image Source: flickr user james.thompson

At the launch of Google’s Voice Search this week, I spoke with Hugo Barra, director of product management at Google, and captured his comments about the confluence of mobile Internet and cloud computing on camera. It is a short video. Hope you enjoy!

Related content from GigaOM Pro (sub req’d): How Speech Technologies Will Transform Mobile Use

Streetcar founders Andrew Valentine (left) and Brett Akker (right) with Zipcar CEO and Chairman Scott Griffith (center).

Zipcar’s path to the public market has become a bit more bumpy as its purchase of Streetcar, its largest rival in London, raises anti-competition concerns. The Office of Fair Trade (OFT) in the United Kingdom said Tuesday it couldn’t be confident that the acquisition wouldn’t stifle competition, so it’s referring the case to the Competition Commission for further review.

The decision came two months after Zipcar filed for an initial public offering in the U.S. to raise up to $75 million. The Cambridge, Mass.-based company plans to use the proceeds of its IPO to expand its fleet, develop new services, and pay about $5 million to shareholders of Streetcar, which Zipcar bought in spring this year. Zipcar stopped integrating its operation with Streetcar’s when it received an inquiry letter from OFT in June this year, the company said in its filing with the U.S. Securities and Exchange Commission. The Competition Commission has until Jan. 24, 2011 to issue its report.

Zipcar has built the largest car-sharing network in the U.S. since its inception in 2000. It’s developed an on-board device that receives reservations and allows consumers to unlock the cars they have booked online or by phone. The device, along with GPS and other tools, also let Zipcar or the fleet managers in Zipcar’s FastFleet program, keep track of the cars. The company saw 2.6 million reservations in the 12 months ending March 31 this year.

Zipcar charges an annual fee and additional rental fees, and customers can reserve cars by the hour. The company previously talked about becoming profitable this year, but its expansion plans in recent years have cost a lot of money, making profitability a goal rather than a reality so far.

Zipcar saw its annual revenue grow from $57.82 million in 2007 to $131.18 million in 2009, while its net loss shrank from $14.44 million to $4.67 million in the same period, according to its SEC filing. The company posted a net loss of $5.33 million on $33.24 million in revenue for the first three months of this year, compared with a net loss of $2.97 million on $25.76 million in revenue from the year-ago period.

Zipcar was the second largest car-sharing club in London and competed fiercely against its larger rival, Streetcar. The planned $63.4 million acquisition of Streetcar fit nicely in Zipcar’s expansion plan, but it could make it extra difficult for new comers to enter the market in the next few years, the OFT said.

“The car club model is a relatively recent phenomenon, but one that is expected to continue growing. The fact that the market is nascent means that it is particularly important to protect the competition that exists at this point,” said Amelia Fletcher, OFT senior director of mergers, in a statement. “This merger will bring together the two largest and most closely competing car clubs in London, and our investigation has indicated that, notwithstanding its much smaller size, Zipcar was a particularly strong and dynamic competitor to Streetcar. Given that we have not been able to rule out competition concerns, we are referring the merger for a fuller investigation by the Competition Commission.”

Streetcar isn’t the first acquisition for Zipcar, which bought out its largest U.S. competitor, Flexcar in Seattle, more than two years ago. Zipcar recently borrowed $70 million to expand its fleet, which has more than 7,000 vehicles in the United States, Canada and United Kingdom. The company has signed up more than 400,000 customers.

For more research on cars and IT check out GigaOM Pro (subscription required):

IT Opportunities in Electric Vehicle Management

Once you’ve registered with the service and set your time zone, you simply forward your email to a specially formatted @followup.cc email to specify when the reminder will be sent (at a specific time or on a certain day). For example, to set a reminder three days from now you would add the email address 3d@followup.cc to the email, or to set a reminder for for 4 p.m, you add the email address 4pm@followup.cc. There’s a full explanation of the reminder syntax here (note that adding the followup.cc email address to the “To:” or “Cc:” fields means that everyone who receives the email will also get the reminder — if you add it to the “Bcc:” field, only you’ll get the reminder).

Reminder emails quote the original email, and include a box telling you when the reminded was created. They also contain “snooze” links, which let you quickly re-set the reminder for some time in the future.

Helpfully, you can get a calendar view of all upcoming reminders at the Followup.cc site; clicking on a reminder allows you to edit or delete it:

A settings page is also available at the website, where you can get links for adding reminders to your RSS reader or calendar, and also get a bookmarklet that allows you to set follow-up reminders on web pages.

Need some tips on how to construct that follow-up email? Check out Dave Clarke’s excellent recent article, “The Art of the Follow-up.”

Related GigaOM Pro content (sub. req.): Email: The Reports of My Death are Greatly Exaggerated

(Via Download Squad)

The report, “Can You See Me Now? The New World of Consumer Visual Communications” (sub req’d) explains how ubiquitous high speed broadband connections and low-cost and integrated webcams make it easy for consumers to connect not just with voice, but with video. For example, I’ve written how my dad no longer wants to talk to me, when he could video chat instead, and Skype CEO Josh Silverman, Cisco and even Logitech are placing their bets on video calls becoming a bigger presence in people’s lives for work and play.

The report goes into depth on the current and emerging players in video chat, as well as breaks down the numbers of video calls that will take place on a PC, television and on mobile phones. The PC keeps its lead over the other two through 2015, but video chat via mobiles makes noticeable gains by 2012 and grows rapidly through 2015. The report anticipates 3.2 million consumers will complete video chats via their mobiles in 2010 (after the iPhone 4G, Skype is releasing a Nokia N900 video chat client) and expects that to reach 142.9 million by 2015.

For Internet Service Providers, the growth of video chat is both a source of concern and possible extra revenue. Video chats take up far more bandwidth than a voice call depending on the quality, and both wireline and wireless operators are concerned about how that traffic may affect their networks. On wireline networks, caps, tiered pricing plans and network management tactics that slow broadband during times of congestion or during certain hours could hinder video chat.

On mobile networks, which have limited capacity, operators are already implementing different pricing plans in order to condition customers to watch their usage. AT&T the exclusive carrier for the iPhone, just killed off its unlimited plans for new iPhone subscribers last week, perhaps in anticipation of the effects video chat could have on its network.

But there’s no question that video chat is coming, and that it will change the way people communicate. For those who want to learn what roadblocks still lie ahead for the technology, how people may pay for it and more details about how quickly it will grow, read the full analysis.

During the first week of April a federal appellate court ruled that the FCC was wrong to chastise Comcast for throttling P2P packets because it did not ground its decision-making in the proper authority. The ruling has the effect of putting the FCC in limbo (GigaOM Pro, sub req’d) as to whether or not it has the authority to compel high-speed Internet service providers to follow some of its regulations.

FCC Chairman Julius Genachowski opened today’s meeting by saying he believes the agency has the full legal authority to move forward with these proceedings despite the Comcast ruling, but that’s what the FCC has been saying since the decision was handed down during the first week of April, and even today that authority was questioned by a fellow commissioner.

The FCC then voted on  six proposals, yielding:

• It approved a Notice of Proposed Rulemaking and request for comments on reforming the Universal Service Fund so the program fund would be used for advancing the growth of high-speed Internet access to rural areas as opposed to supporting voice telephone lines.
• It approved a change in its previous rules on wireless voice roaming, which forces carriers to automatically allow voice calls to roam, and it issued a Notice of Proposed Rulemaking on wireless data roaming in order to see if it’s feasible for wireless network providers to make it as easy for subscribers to roam on data networks in the U.S. as it is for voice.
• It approved two proceedings related to opening set-top-boxes to allow open cable boxes that could access cable networks and the Internet, leading to greater competition for television programming, and for hardware to access video content.
• It approved a Notice of Inquiry seeking comments on how to create fail-proof and resilient broadband networks in case of a natural disaster. One of the  current qualms over IP communication is that it’s not as reliable as the copper telephone networks in case of a disaster.
• It approved a Notice of Inquiry asking for comments on whether the FCC should create a cyber security program.

But during this decision-making process the issue of the FCC’s authority to implement its plans was challenged by Robert McDowell, a Republican commissioner, who questioned the FCC’s authority to require wireless network operators to automatically open their networks to roaming in the wake of the Comcast decision.

Which indicates to me that when the FCC has to implement anything difficult or controversial, the issue of its authority will come up again and again — both from lobbyists and later through the courts. So the real question is as the FCC tries to implement a new broadband-centric regulatory regime, when is going to take the time to clear up these lingering questions?