Hulu For Your Bandwidth
November 14, 2008
(4 votes, average: 5 out of 5)
Loading ...As a telecom guy, I’m fascinated by the phenomenal growth of online video services like YouTube, iTunes, and Hulu. Multiple services 
have grabbed the attention of the consumer, media, and advertisers alike with the potential of video entertainment on demand. Watch exactly what you want, when you want, on your terms. But, for me, it is all about bandwidth - how much will be required by each individual consumer to adequately stream high definition video, and how will the service providers deliver such huge quantities of unlimited internet to make it all possible! Of course, the bandwidth won’t matter if the video services don’t figure out a working revenue model to keep the lights on and all those billions of little packets of data flowing to your laptop.
For years, Google’s YouTube has been building a base of loyal viewers. However, nearly all of the content on YouTube is amateur video of low resolution and inconsistent quality. For the most part, Google hasn’t really tried to make money off of YouTube. However, YouTube is part of a publicly traded company and will need to eventually pull its own weight to keep investors happy. As a result, YouTube will begin displaying an increasing number of Ads on the site and has just begun branching out into the streaming of movies and TV shows as well as the user created content that it is currently so well known for.
Hulu, while similar to YouTube in that it provides video over the Internet, has recently been gathering steam and attention due to its exceptional inventory of professional TV shows and other premium content which it provides to users free of charge. The business model, like YouTube, is fueled by advertising. While not as viral or well known as YouTube, Hulu has the quality content advantage and that is likely to result in higher advertising dollars as video over the web increases in popularity. Hulu was started by NBC and News Corp in 2007 but currently features content from over 100 different content providers. Hulu has struck popularity (if not gold) by streaming episodes of Family Guy and the Daily Show with Jon Stewart.
However, this isn’t a race between just YouTube and Hulu. There are many other players looking for their share of your eyes as well. Chief among these is Apple. Apple’s iTunes store now sells and “Rents” movies and TV shows for users of its iPods, iPhones, Macs, and Apple TV. Apple’s huge inventory of Movies, TV shows, Music, Podcasts, and Audio Books make it the top dog in the online content delivery world. And Apple has neatly avoided the advertising trap by charging consumers directly. While this has worked like a lucky charm for Apple’s bottom line thus far, it remains to be seen if iTunes will take a hit in the future as “free” sites like Hulu and YouTube begin to offer more and better content.
The battle over online video goes much deeper than just grabbing your attention. There are dollars a stake. Those who bring in the dollars are able to capture the best content providers and keep their services online. Because Apple charges users per item downloaded, Apple can afford to pay a share of the wealth with the content producers. Hulu and YouTube may not be able to guarantee a reliable revenue stream at this point from Advertising dollars, but hope to create a whole new Advertising industry for online video dollars in the near future. But due to ever increasing bandwidth requirements and a push for high def web video, that is going to be a pretty tall order. At the end of the day, there is still a bill to be paid for a huge amount of bandwidth, as well as for content and operations.
It is unlikely that YouTube will be allowed to fail by its monster of a mother, nor is iTunes likely to suddenly wither and die on the vine. Hulu and a myriad of others are the wild cards. Any of them could take off like a rocket, or be crushed by the current credit crisis and mounting debt. The industry is young, but already a focus of national interest and rapid growth.
One thing looks very clear, as advertising dollars dry up for newspapers and other print media, that money will end up somewhere. Much of it will end up online at increasingly sophisticated and entertaining web sites like Hulu. Advertisers everywhere are taking note and trying to figure out how best to exploit the web to their best advantage. We are witnessing the birth of a future mega industry. But will the Internet be able to keep up? Will AT&T, Comcast and others continue to cap internet usage just as YouTube, Apple, Hulu and their clones are ramping up the bandwidth required? The battle isn’t just for your attention, or for advertising dollars, it is also for your bandwidth.
iPhone Roundup
November 11, 2008
(3 votes, average: 4.33 out of 5) Loading ...Restless iPhone users have been waiting impatiently for a number of much needed improvements and features. 
Chief among these are the ability to cut and paste and to tether an iPhone to a laptop. AT&T Mobility CEO Ralph De La Vega has confirmed in recent interviews that a tethering option will soon be available, allowing users to surf the Internet on their laptop via the iPhone’s 3G data connectivity. However, it is widely believed that this will come at an additional monthly fee (of course).
It is also rumored that iPhone firmware update 2.2 is coming as soon as November 21st. While the update is believed to include changes to the App Store, Podcast downloads via WiFi, Street views in Google Maps, among other improvements to performance, it is not believed to include the much needed cut and paste ability that users have been asking for. The 2.2 update has been expected and delayed for several weeks.
And finally, iPhone has become the number one selling wireless handset in America, knocking Motorola’s less expensive and more widely available SLVR V3 to 2nd place. While impressive by any account, Apple’s top ranking is even more interesting considering that the iPhone is sold only by one carrier in the United States, while the SLVR is sold by nearly every carrier.
It’s quickly becoming an iPhone world.
Telecom Monthly - November: Turkey Time Or Treat?
November 4, 2008
(3 votes, average: 4.67 out of 5) Loading ...
We declared October the “Spooky Season” not just because of the obvious tie-in with Halloween but also due to the economic meltdown. Since then, the markets have made a minor recovery, but the roller coaster stock market, accelerating layoffs and lowered profit projections all indicate that November could be a real turkey.
The harsh realities of the present are inescapable. The buildup of corporate debt and tighter credit markets are forcing wide scale cutbacks in nearly all industries. And as employees are laid-off to cut corporate costs, their lost salaries will result in lower overall spending in the general economy in the months to come - a vicious cycle that the newly elected president will need to deal with. The telecom industry is not immune. While some small companies, focused on emerging technologies and services, are faring well, other over-leveraged stalwarts are teetering. As sales and number of physical locations shrink for companies everywhere, this will eventually trickle down to the telecom industry, lowering total subscribed lines and services and taking profits with them.
But this is no time to panic; the temptation to run scared and make rash decisions may prevent you from spotting some tantalizing opportunities. Now before you all run for the exits and jump off the nearest cliff, let’s consider the silver lining in this cloud of chaos. Lots of customers and valuable assets currently reside with companies which are ripe for the picking. A strong carrier, reseller, or manufacturer could easily enhance their market share in this troubled environment by picking up a competitor or expanding into related products and services. If you’ve got cash in the bank, you are in a golden position to take your company to the next level. And even if you are in survival mode, there may be partnerships and synergies available to you which wouldn’t have been possible in better times.
Take the banking industry as an example. Stocks fell to record lows in a matter of days as well known names collapsed and were sold off for pennies on the dollar. And while the rest of us trembled in our boots at the consequences, Wells Fargo, Citi, and others swooped in to buy up those cheap assets. Sure it won’t help their bottom lines immediately, but as the markets recover, these companies stand to rebound higher than where they were when the meltdown began. They are bigger than ever, having added customers and assets for next to nothing.
Where are your opportunities to pick up cheap assets? Which of your competitors and vendors are on the rocks? Let’s face it, no one is going to approach you and offer to sell you their assets for scrap - you’ve got to get out there and do the research and make the contacts on your own. But out of this fire will come some exciting surprises. This is a once in a life time opportunity to pick up cheap stocks, assets, employees, and customers. A few years from now, those who made the right decisions today will be looking down on those who didn’t act at all.
And in the middle of all this insanity, there is still growth in the industry. Google has launched their Android phone, the iPhone continues to grow at a record pace, high speed broadband services take an ever larger slice of the communications pie, and applications are increasingly a new revenue source for converged telecommunications systems and devices. All is not lost for those who innovate.
Will November be a turkey or a treat? That is up to you!
-iTodd
Worries Over White Space
October 31, 2008
(4 votes, average: 4.25 out of 5) Loading ...“White Space” is the new cause for musicians to worry about.
The unused bands of wireless spectrum between the assigned sections is known as White Space. The biggest chunk of this space is the spectrum currently used by analog television and which will soon be vacated when the US switches to digital TV.
The technology industry, led by Microsoft and Google, are salivating over this space and want it to be reserved for a new generation of wireless broadband devices. And they may just get their way, as the FCC seems to be steamrolling into a meeting scheduled on the same day as the presidential election - an action that has all the hallmarks of trying to hide something. And that has many in congress and the music industry crying foul.
Concerns over potential device interference has more than 100 musicians protesting over the fear that their wireless microphones could be impacted by devices operating in the White Space. Even country music superstar Dolly Parton is in on this act - sending a letter to the FCC asking them to delay their vote and allow for public comment.
Telecoms Feeling the Credit Heat?
October 31, 2008
(3 votes, average: 5 out of 5) Loading ...The telecommunications industry has long been considered recession proof. After all, everyone needs to communicate, right? But lately many companies have become debt heavy due to extensive network build 
outs for enormously burgeoning bandwidth demands, hardware and technology costs involved in transitioning service to VoIP and lost revenue due to a volatile consumer market attracted to mobile, unified all-in voice/data solutions from smaller vendors. The costs range into the billions.
Rising need for capital expenditures is being met with rising costs of capital and a consequent decrease in profits. As operating capital declines, cost cut-backs will be the order of the day. AT&T, Verizon Communications, Sprint Nextel and others have all had their 2009 earnings estimates lowered by analysts. The bottom line is that everyone is going to pay more for credit.
If an economic slowdown reaches into the telecom market, it will be the technology sector that will feel it first. Reductions in spending plans would directly impact primary equipment makers and that supply line to the industry. This would then affect build out futures of wireless and land networks. iSuppli analyst Steve Rago expects second half capital expenditures on worldwide wire line networks to decline 20% from expectations made earlier this year. Standard & Poor analyst, Ari Bensinger anticipates significant sales weakness over the next couple of quarters. But who can say when the credit markets will settle down, or even if they will snap back to normal?
Verizon executives say they have not seen signs of a slowdown. In fact, they believe a widespread recession could create a heavier reliance on voice, data and video as consumers spend more time at home, both relaxing and working. However they spin it, the industry is facing huge change and a chaotic economy simultaneously.
The question of survival for the most highly leveraged companies may very well rest in their ability to cover their credit needs more than in their ability to roll out new services and grow their customer bases.
Telecom Recipe For Tough Economic Times: Eat More Fiber
October 30, 2008
(2 votes, average: 5 out of 5) Loading ...
Small telecom companies are pushing ahead, while larger ones are having a tougher time finding traction. That’s what it seems like this week, as most telecom stocks rose on Wednesday in the face of an expected interest-rate reduction by the central bank but the best motion has been from the smaller guys. Level 3 and Time Warner Telecom rose 17% and 11% respectively on Wednesday, but AT&T and Verizon Communications sank over 1%, and Qwest went down 10%, saying it will cut 1,200 jobs to balance a declining demand for service.
The current economic climate only accelerates a market situation that has been ongoing for years. Large carriers have been losing customers to cable, VoIP and do-all wireless. While smaller telecom companies with fewer extraneous services can quickly package unified communication packages currently in demand, big carriers must first make cuts in order to regain financial flexibility.
While everyone is leaning out their diet, the big move is to a lot more fiber . Although AT&T TDM services continue to recede, they are seeing growth in wireless and data services. Qwest is significantly expanding their fiber network in 2009, justifying the cost with the expectation of reduced churn. When you’ve signed for phone, data and video, you are far more likely to stay on as a customer.
iPhones Get Free AT&T WiFi
October 29, 2008
(3 votes, average: 4.33 out of 5) Loading ...AT&T has just notified all iPhone users via SMS that they will now receive free Wi-Fi at thousands of AT&T hotspots nationwide.
This includes most corporate owned Starbucks coffee shops. For more information, iPhone users can visit www.att.com/attwifi.
This has been an on again off again story for quite some time. AT&T has twice posted a web site about free Wi-Fi for iPhone users, both times in error and immeadiately retracted. However, this time appears to be the real deal since they have taken the additional step of notifying all iPhone users.
Since the average 3G iPhone surfs the web at nearly the same speed as when they are surfing over Wi-Fi, why is this important news? Because AT&T no longer allows iPhone users to download files or peer to peer file transfer documents via a 3G connection. That means that an iPhone user can’t download music from iTunes via 3G. Lame. However, if the user is near a hotspot, they CAN download from iTunes.
Now, if only my iPhone battery would last through an average Wi-Fi web surffing session, this might be good news. In reality, it’s just a replacement for what AT&T should be allowing users to do via 3G anyway.
Early Termination Fees Terminated
October 27, 2008
(3 votes, average: 4.67 out of 5) Loading ...We are in the middle of a major change in the way wireless carriers and others handle their Early Termination Fees (ETFs). Until recently, if you ended a Wireless or Internet contract early, you’d be charged an average fee of $200 (or more) to cancel your account. 
An inability to get out of contract with a carrier who has offered poor service or coverage has enraged customers and has resulted in volumes of complaints. States have been moving toward regulating this and other aspects of the wireless industry. Even FCC Chairman, Kevin Martin, has proposed a plan to regulate the fees that wireless carriers charge customers for ending their contracts early.
Suddenly, the carriers are falling over themselves to change their policies and prorate the termination fees of their customers. Sprint, Verizon, AT&T, and T-Mobile have all made changes, or will do so by the end of the year. They argue that since they have changed, no regulation of the industry is necessary.
Now the phenenomon may potentially spread to Internet carriers as well. Two Qwest Communication DSL customers are suing the carrier over Early Termination Fees.
And while the change in practice regarding ETFs may seem like bad news for the carriers, it actually allows them to better compete with each other and fight for customers based upon service, price, and features rather than length of contract. This could have a very positive effect for carriers with popular phones, plans, and customer service. In an age where everyone already seems to have a Cell Phone, carriers are forced to grow their business by offering new services and by stealing customers away from their competitors.
Features and customer service, rather than contracts, may end up determining which carriers customers ultimately choose in the future.
Scorecarding Tech Layoffs
October 24, 2008
(2 votes, average: 5 out of 5) Loading ...As VoIP/SIP Trunking ties the telecommunications industry closer to the IT field, is the fate of the tech industry in the current economic climate a bellwether for the telecom industry? Hard to say for sure. The tech industry is certainly taking some hits from the economic perfect storm that continues to walk across the globe. It’s been said that mid and top tier tech companies are weathering the storm better than online and hardware vendors. 
However, any comparison between the two would have to account for their differences as well. Even without the economic crunch, the IT field has been going through an upheaval in areas such as open coding, application building, unified communications and value chain structure. By having to interop into this field via VoIP and data services, telecom will be affected to a much greater degree by IT than at any time previously.
Cnet news has posted a kind of “tech downturn” scorecard that tracks the tech industry fortunes at its most visible point: layoffs. It’s published by Goggle Docs and updated every 5 minutes. Looks like somebody’s keeping their job. Check it out here
Europe More Ready Than US For Economic Crisis
October 23, 2008
(2 votes, average: 3.5 out of 5) Loading ...
Watson Wyatt reports that nearly a third of US companies were unprepared for the current economic crisis; however, an average 80% of European companies were prepared.
Among the contingency plans that companies had prepared were organizational restructuring, hiring freeze, layoffs, offering early retirement, a reduced working week, sabbaticals, and salary freeze. US companies were more likely than European companies to begin with layoffs.
Interestingly, French companies were nearly 100% prepared for the economic turmoil. Just another reason for some in the US to hate the French - not only are they thinner and better looking, they may just have better business sense as well. I’d order another side of “Freedom Fries” but I can’t afford them anymore.
One in five firms unprepared for the economic downturn
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