Blog Post

Forget Voice, Cable's Wireless Plans Need Video

Wall Street has been losing its enthusiasm for the four-play plans that offer voice, video, data and wireless services to consumers.  The initial results of such efforts have so far been marginal; one can understand the investor skepticism. But don’t tell that to cable and phone companies, which are plowing ahead with similar-sounding plans. However, for cable companies to stand up to their arch rivals Verizon (s VZ) and AT&T (s T), they need to not only match the phone companies, but go a step further. They can do so by tapping their core competency — video entertainment — as the centerpiece of their wireless efforts.

If they can unify both the wired and wireless worlds in a way that makes it easy for consumers to manage, buy and watch content on a PC, television or cell phone, cable companies would benefit from having a differentiated service offering and tie consumers to all aspects of a cable bundle. That’s good for customer retention and just might be something for which people would pay more.

For example, a consumer could use their cable wireless plan to program their DVR from their mobile phone that operates on that plan while away from home. Once in the home, videos downloaded on the go could be added to a queue of content to be viewed on the PC or television. It’s likely such content would come from a cable-sanctioned source rather than iTunes. Over time, the cable guys could build handsets that double as remotes, moving move content around the home. Since they don’t currently offer wireless plans, they don’t yet have handsets, so this is theoretical for now.

From offering triple-play services, cablecos already have experience integrating IP services such as caller ID or eBay listings onto the TV. Plus, there are existing programs that allow remote access to TiVo through a mobile phone. Comcast (s CMCSA) also has a web-based video service and has invested in Cartiza Networks, a startup developing an IP-based content management and delivery system for mobile broadband networks. Comcast could easily use its Fancast portal as a place for customers to keep their content and then use the Cartiza mobile CDN to efficiently push that content to mobile devices.

Stephen Bye, wireless VP of Cox Communications, gave an interview with Fierce Wireless on Monday, in which he came out in favor of Wi-Fi on planned handsets — less so for voice than for moving content around the home. Cox is building out its own 3G voice network, and will experiment with LTE, in its current service markets.

This means we may be one day be able to catch up on our pre-recorded programs from our DVR on phone or laptops on a cable provider’s WiMAX network. Cox and Comcast are clearly thinking about how to unify our wired and wireless networks. If done well, their efforts could turn video into the next killer application for mobile.

16 Responses to “Forget Voice, Cable's Wireless Plans Need Video”

  1. Some cable companies still can’t leverage their existing HD video technology or make good on the HD marketing hype. The fact is that once you purchase a widescreen HDTV, you want widescreen HD programming — not SD in the old 4:3 “Acadamy” format. In most local markets, Comcast still has fewer than 30 HD channels and is so squeezed for bandwidth that the company even has to deliver SD (standard definition) channels that are severely over compressed to the point of being unwatchable. Also, Comcast Internet remains slow in many markets too — for the same reasons.

    Your theory about cable’s goals and challenges are right on target. But your timing is way off. Comcast won’t be finished rebuilding their nationwide cable infrastructure to deliver a competitive number of HD channels in every local for another two years. They will get this completed early in just a handful of metro markets and use this as the foundation for “truthy” ads (as Colbert would say) that make the corporation seem to be competitive with satellite in HD offerings. It’s not. I suspect Time-Warner and Cox cable may be facing the same problems.

    Check this out. This certainly is the case in Sacramento and many other mid-size Comcast markets.

  2. Jesse Kopelman

    I question whether the cable companies are really all that competent on video. Look what happened to their market share as soon as viable satellite players hit the scene! Also consider that that the largest cable operators got to their current size not by organic growth but through the acquisition of shoddily run competitors. The truth is that Verizon and AT&T could probably teach Comcast, Cox, and TW quite a bit about how to do a better job on TV, just like Comcast, Cox, and TW have been able to school AT&T and Verizon on home telephony. These monopolistic markets are such that past success pretty much guarantees unreadiness to address new competition.

  3. Here are some key stats on mobile video:
    -Nielsen reports that in Q308, 10 million people in the US watched mobile video. This is about 1/10 of the amount of people that watched desktop videos
    -Mobile video usage grew more than any other screen in Q308 at 14% growth from last quarter
    -Mobile video is more engaging than desktop video. Those few that do watch mobile video watch more minutes than desktop viewers.
    -MobiTV claims 5 million subscribers
    -The 2008 Olympics was a big event with low millions watching NBC mobile video.

    Obviously, the iPhone has influenced the mobile video space. 33% of iPhone users watch mobile video. Apple has sold over 13 million iPhones. Other iPhone-like phones are influential as well; T-Mobile G1, Blackberry Bold and Storm, Sprint Instinct, etc

    Today, video is 9% of wireless data traffic. It is projected to be 23% of data traffic by 2012.

    Today, only 4% of US subscribers watch mobile video. ATT leads that pack at 4.4%. Sprint 4.2%. TMO 2.4%. Verizon 2.4% (Comscore M:Metrics)

    In user surveys, the #1 reason that users don’t watch mobile video is price. Today, the economics of mobile video don’t make sense… yet. Most users want it for free. About 10% are willing to pay a premium for content, (MobiTV, MLB, etc). Many users are willing to watch advertisements in exchange for free video.

    Recently, mobile video has become much easier to deploy. And, high performance video delivery solutions can handle high volumes of simultaneous sessions and reduce bandwidth 15-25%. (shameless plug for Avot Media)

  4. Stacey Higginbotham

    Vijay, I agree that mobile video has been a fail so far. However, the ability to program my DVR from my cell phone would be awesome, especially if I could text the info to my set-top box. I also wouldn’t mind downloading video before a flight or having The Daily Show to watch when I’m waiting around. I might not seek it out, but if my cable provider offered it, I might take them up on it. So maybe a killer differentiator might be a good way to think about video for the cable guys.

  5. vijay gill

    @om that makes more sense, but I still disagree. Voice and communication have always been the killer apps, not content. as a way to differentiate themselves, might get them a point or two if I can control my tivo from my mobile, but that is something anyone can build over the top. We shall see how this plays out

  6. With Comcast and Cablevision heavily invested in Clear [WiMax] Network, I wont be surprised mobile video on wimax network from your cable provider. Verizon will do same, but only with LTE network and possibly a year behind cable…

  7. The problem here wouldn’t be the traditional voice companies (AT&T, Verizon, etc) or the cable companies. It’s going to be the people who own the content. Think about it. Do you really think that HBO would want you to stream “Big Love” or Showtime would want you to easily watch “Weeds”? No. They’d rather charge you for it two, three, even four times for extra revenue. Yeah, there are sites like NBC’s Hulu and CBS’, but they run ads on the shows so they make their money that way. HBO and Showtime’s biggest revenue stream nowadays is their ability to sell you the subscription, the DVD, the download on iTunes, etc. As much as I’d love to see it happen and the technology, like Envivio’s multistreaming box, is there, I don’t see it happening anytime soon.

    Perhaps someone in one of these companies will give it a try and it will be a big success and everyone will hop on the bandwagon, but I don’t know. Right now, AT&T can’t even manage to put everything on one bill, much less create a single delivery mechanism for content. Perhaps this is just what the cable companies need…

  8. @vijay

    i think what you are missing is that if the cable wireless services offer convenience of managing your video life (even at home), and take a more video centric approach, they will distinguish themselves and at the same time help their own cause (cable) which is getting increasingly commoditized in terms of features and experience.

  9. vijay gill

    what are the stats for video on mobile? Far from it being a killer application, I think this is destined for an epic fail. I know for a a fact that if I am traveling around, I don’t have the _chunk_ of time it takes to watch a show, I can however catch up on a few mail messages or watch something small on youtube, but not too much, because it does a horrible job to the battery life.
    In short, deadpool and failblog this already.