June 2012

Why the Feds’ Cable Probe Means More Expensive Web Video for You

The Department of Justice is looking at the way Comcast and the rest of the cable industry deal with broadband and online video. So what does that mean for you? Higher broadband bills — at least if you plan on streaming a lot of online video. And no chance that today’s cable bundles go away anytime soon. That’s the takeaway from Bernstein Research’s super-savvy Craig Moffett.

Broadband providers are already moving away from broadband plans that charge everyone the same price, as long as their use stays under a certain cap, and toward usage-based pricing.
That’s a problem for Netflix, as well as for anyone thinking about getting into “over the top” video, because that will effectively increase the price of those services.
When Netflix complained that Comcast was giving its in-house streaming video service a boost over Netflix by not counting the Comcast service against its own broadband cap, Comcast responded by dropping its cap and moving to usage-based pricing.
Federal regulators may be also looking into the cable industry’s practice of bundling channels — which means that you can’t watch the Disney Channel unless you also pay for ESPN — that’s not going to go anywhere. Because no one’s breaking any laws.

Verizon data plans expected to be followed by AT&T, others

Verizon’s new data plans are expected to be followed by others in the industry as wireless firms focus their attention on charges for Internet data, according to analysts.

That business strategy benefits the biggest wireless carriers — AT&T and Verizon Wireless — and presents new problems for competitors trying to chip away at those firms’ dominance. “In a world where incentives for families favor concentrating around a single provider, the biggest providers win,” said analyst Craig Moffett, of Sanford C. Bernstein.

1 in 5 U.S. consumers connects TV to the Internet, study says

The number of people who connect their televisions to the Internet is growing rapidly, with 1 of 5 consumers now using video game consoles, Blu-ray players or other devices to bring the Web to their TV screens, according to a new national study by Frank N. Magid Associates.

The research found that 21% of consumers in the U.S. connect their TVs to the Internet — up from 16% a year earlier. That number is likely to rise, with 30% of consumers who haven't already connected expressing an interest in doing so, Magid found in its nationally representative survey of 2,540 people. "Over the next 18 months, we are going to be at the end of the early adopter phase of connected televisions as the mainstreaming of the technology happens," said Magid researcher Andrew Hare. "More and more Americans are getting connected televisions in their homes."

Groups Ask Senate Not to Block FCC Political File Order

Fans of the Federal Communications Commission's online political file order have written the leadership of the Senate Appropriations Committee and Financial Services and General Government Subcommittee asking them not to try to block funding of that new rule, as their House counterparts have done. In a letter to the Hill, Free Press, Common Cause, the Sunlight Foundation and 16 other groups asked those senators to oppose an FCC appropriations bill that would block implementation of the requirement that TV stations send their political files, including spot prices, to the FCC for online posting, likely beginning sometime late next month or August.

Apple's big enemy in smartphone wars: delay

Apple has spent nearly three years fighting its rivals in a global smartphone patent war. Now, setbacks in two key US court cases are laying bare why a drawn-out battle could be bad news for the iPhone maker. Then in an order late on June 11, US District Judge Lucy Koh in San Jose, California, effectively dashed Apple's hopes of stopping the launch of Samsung's new Galaxy S III smartphone, which also runs on Android. Judge Koh had said Apple's push to get a court order blocking the June 21 launch would overload her calendar, given Apple's high-stakes trial over other Samsung devices set for July that she is overseeing. The latest decisions don't doom Apple's courtroom efforts - the company can appeal Posner's ruling, while Koh's directive had nothing to do with the merits of the Samsung case about to go to trial, or the legal arguments for an injunction on the new Samsung smartphone. But delays in moving its cases through the courts is a blow to Apple's efforts to get quick and favorable rulings that it hopes would give it an edge in the marketplace for mobile devices.

How To Reach Off The Grid Voters in Ohio

At Personal Democracy Forum, a yearly gathering of technologists and political elites, Mitt Romney's digital director Zac Moffatt laid out an interesting challenge facing his boss and President Obama—particularly in the key swing state of Ohio. Namely, how do you engage with voters Moffatt has labeled "off the griders," i.e. people that are opting out of live TV in favor of DVR's to skip over ads.

Both Moffatt and Michael Beach of political interactive ad agency, Targeted Victory (a firm Moffatt helped to co-found) spoke to separate crowds about the off the grid phenomenon arguing for the importance of online advertising. In fact, according to an in house study conducted by Targeted Victory and SAY Media, 31 percent of likely 2012 voters are not watching live TV. Per Moffat, the numbers are even higher in Ohio, a state where Romney and Obama are expected to compete fiercely. Moffatt was quick to note that digital was not out to replace the role of television, but rather amplify it. When it comes to persuading online voters, Moffatt argues for sophisticated targeting (naturally, that's a task that the Romney campaign has hired Targeted Victory and other data firms to help accomplish).

Microsoft Files Patent to Serve Ads Based on Mood, Body Language

Microsoft has filed for a patent for technology to target ads to consumers based on their emotional states, taking the notion of "tracking" to a literal level.

In an application filed in December 2010 but just made public last week, Microsoft sought to patent an advertising engine that gauges people's emotional states based on their search queries, emails, instant messages and use of online games, as well as facial expressions, speech patterns and body movements. The ad engine is device-agnostic; as Microsoft noted in its application, "client devices" could include personal digital assistants, smart phones, laptops, PCs and gaming devices. The patent seems to cover many bases, but the Microsoft product that appears ready-made to deliver emotionally targeted ads is Kinect, the motion-sensing input device that was released for Xbox but now also has a version for Windows. The application states that a user who screams or paces back and forth, when observed by Kinect, could be assigned a negative emotional state by a currently hypothetical advertising engine.

App Creation Inspires Student Entrepreneurs

Teams of girls in New York City, Los Angeles, and the San Francisco Bay Area spent 10 weeks designing a mobile app so they could pitch the final product at a national competition at the end of the course. Students outside of Raleigh (NC) learned different programming languages to create their own apps in a largely independent but rigorous after-school program. And in the nation's capital students meet each week to learn not only how to make their own apps, but also how to hone leadership and entrepreneurial skills, such as marketing, creating a business plan, and public speaking.

A growing number of after-school programs for boys and girls that draw on students' interest in applications for mobile devices are evolving throughout the country. Such programs can be a gateway to learning computer programming, as well as business and marketing lessons, which educators believe equip students with lifelong skills to succeed in college and the workforce. Some of the programs aim especially to engage girls.

Why traditional media should be afraid of Twitter

Twitter has been gradually tip-toeing further and further into the media business for some time now. It has already become a real-time newswire for many, a source of breaking news and commentary on live events, and now — with the launch of curated “hashtag pages” like the one it launched late last week for a NASCAR event — it is showing signs of becoming a full-fledged editorial operation.

It may not be hiring investigative reporters, but the areas of overlap between what it does and what media companies do is growing, and so is its attractiveness to the advertisers that media entities desperately need to hang onto. The NASCAR page may not seem like anything to be concerned about, since it appears to be just a typical grouping of tweets collected by hashtag. But there is editorial control behind it as well as algorithms, with an editor choosing which messages — including photos, videos and commentary from NASCAR insiders — were highlighted during the event, and which streamed by unacknowledged. And Twitter has made it clear that this kind of effort is not aimed primarily at brands (although it almost certainly will involve them at some point) but is intended for events. In other words, for the news.

Suggested new movement: “Cord Trimming”

Critics say a pay TV business that regularly charges its customers $100 a month is doomed. OK, so how about a cable bill that costs less than $40? Yes, in between that revolutionary band of consumers who say they no longer want to pay for services and channels they don’t use, and a video content establishment that says you need to support the incumbent pay TV model to fund shows like Game of Thrones, there is … compromise.

I call it the “cord-trimming” movement — if I’m watching my shows on my Xbox 360 and iPad most of the time, why am I paying for whole-home HD DVR service? If I’m spending half my viewing time on Netflix and HBO Go, what need do I have for Cloo, the Church Channel, CMT and dozens of other smaller cable networks I’ll never watch?

Benton

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