January 2013

The future of television will be driven by Internet networks, and traditional cable TV companies will inevitably morph into Web-based content providers, Netflix CEO Reed Hastings predicted.

The flexibility of Internet programming is already attracting content creators, and even online video providers are getting into the production game themselves, Hastings said during a meeting at POLITICO as part of a D.C. swing to promote his company’s Washington-based TV series, “House of Cards.” “What we’ll see in the Internet is most cable networks will become Internet networks — we’ll still call ESPN a cable network, but it’ll be mostly delivered over the Internet in 10 or 20 years. The fundamental advantage of the Internet is individualization, control, being able to watch on any screen. It’s just a much better technology substrate for video.” Personalized advertising streams will help drive the move to the Web, Hastings said, as will the roll-out of very high-speed broadband networks. But just as cable networks grew from running others' content to also commissioning their own, the TV and movie distributor is following the same path.

Europe’s top trade official has demanded a bigger share of the Chinese market in telecoms network equipment in an increasingly heated dispute that risks escalating into a full-blown trade war.

Chinese diplomats privately complained about the EU’s demands this week with at least one EU capital, expressing frustration at what they believed were unreasonable – and possibly illegal - demands, officials and diplomats said. They claimed that Karel De Gucht, the trade commissioner, requested that EU suppliers be given a 30 per cent share of China’s telecoms market in return for dropping a highly contentious EU investigation into alleged subsidies to Chinese companies. Gucht also insisted that the Chinese companies, Huawei Technologies and ZTE Corp, raise the price of their exports by 29 per cent as part of the agreement, these people said. The row is expected to come to a head on Feb 1 when top Chinese meet De Gucht in Brussels.

Nearly two-thirds of the Broadcasting Board of Governors (BBG) language services -- offices that produce content for particular languages and regions -- overlap with another BBG service by providing programs to the same countries in the same languages.

GAO identified 23 instances of overlap involving 43 of BBG's 69 services. BBG officials noted that some overlap may be helpful in providing news from various sources in countries of strategic interest to the United States; however, they acknowledged that overlap reduces the funding available for broadcasts that may have greater impact. BBG budget information indicates that BBG spent approximately $149 million in fiscal year 2011 to maintain language services broadcasting in the same countries and languages -- nearly 20 percent of its total appropriations. However, BBG has not estimated the potential savings and efficiencies from reducing unnecessary overlap. Further, BBG's annual language service review -- its primary means of prioritizing broadcast languages and planning resource allocations -- does not systematically consider the cost and impact of overlap. As a result, BBG may be missing opportunities to reduce overlap as appropriate, strengthen impact, and improve BBG entity coordination. GAO recommends that BBG systematically consider in its annual language service reviews (1) the cost and impact of overlap among BBG entities' language services and (2) the activities of other international broadcasters. BBG agreed with GAO's recommendations and reported taking initial steps to implement them.