Canoe Ventures Dropping Interactive Ads Business

As the content community embraces the cloud and Cisco plans to sell its S-A set top box business, Canoe Ventures has announced that it is giving up on EBIF. "The decision to abandon ITV ads and dramatically pare back Canoe's mission came after a review by its cable operator owners, according to a Canoe spokeswoman." The push for better connectivity to the web, more cloud based operations, including N-DVR and VOD, and perhaps even Comcast's push into a rival Netflix streaming business, all demonstrate that the set top box is history.

Also too, advertisers didn't find much interest in overlays that intruded on top of video commercials. With the primary goal to click a button for more information, the boxes looked intrusive and the clicks weren't coming. And advertisers and viewers weren't embracing the added value feature either. So what is next for Canoe? "Canoe's more narrow goal, at this point, will be to build a way for MSOs and national programmers to generate revenue from dynamically inserting ads into on-demand content across both VOD inside the home and TV Everywhere outside the home." But with other companies, like Seachange and others, already in this space, can Canoe re-model and survive? It just doesn't look promising.

Google vs Apple Heads To The TV Set

When Apple was younger and the PC was the big push, the biggest competitor to Apple was Microsoft. Today, that fight has taken a back seat as Apple has extended itself more firmly into mobile devices and soon the TV set. And perhaps their biggest competitor is not Microsoft, or even Amazon or B&N, but Google.

And Google is adding another line in the sand verse Apple, Voice controlled connected television. "In what could be the biggest boost to couch potatoes since the remote control, Google Inc. is developing a technology that would allow a viewer to tell a TV, by voice, to change the channel or even seek out a favorite show or movie."

Google is aggressively competing with Apple in the software side of the business, a strategy used by Microsoft in the PC wars. But Google is going a step further when it buys manufacturing companies like Motorola to build out Google products. How this affects Google's licensing with other brands remains to be seen. Companies don't like to have competition from their own supplier. Still Google continues to advance while Apple follows its own path. How fierce the competition between these two grows remains to be seen. But with Google testing a pay subscription service in Kansas City, no doubt they are declaring war in the video space.

Broadcasters Do Not Prefer Cordcutters

Today's WSJ article may be all about the rise of cord cutting, but it may not be in the best interest of broadcasters. Sales of digital antennas are expected to double this year and OTT providers like Boxee and Aereo are offering online streaming of broadcast channels. And consumers, eager to lower their video bills, may cut the cord to cable, as these alternatives gain speed.

But it may not be in the broadcasters' best interset to encourage non-cable reception of their programming. One simply has to look at the ownership of each network to understand why. ABC owns a ton of cable properties including Disney, ESPN, and others, all getting a monthly subscriber fee. NBC is owned by Comcast, the largest cable operator, and also owns multiple cable networks as well. Fox owns regional sports networks, FX, Fox News and more. And while CBS spun off its Viacom properties (MTV, VH1, etc.) it still retains Showtime and CBS Sports Network. And even Univision, a Spanish broadcast network, distributes cable network. Plus each of these broadcast networks get their own monthly license fee for cable distribution. Why would they want to encourage cord cutting.

And the government may also make it hard for consumers. "The value of spectrum used by broadcast TV has been hotly debated in the past couple of years, as the FCC has looked for ways to add spectrum for wireless broadband. Last year FCC Chairman Julius Genachowski said the percentage of viewers watching broadcast over the air, rather than through cable or satellite, has fallen to less than 10%, in contrast to the precable-TV days when it was 100%." While those spectrums help wireless, they hurt over the air reception. Will broadcast TV access be available to only those that can afford to access it?

The money is in cable TV and authenticated web viewing. The profits on over the air and OTT are less enticing. And broadcasters are more likely to do what ever they can to impede cord cutting and support this cable model.

Cable TV Without A Set Top Box?

For cable operators, most of their cable box shipments come from Scientific Atlanta, currently owned by Cisco. The other set top box company, Motorola, will soon be owned by Google. Now comes a report that Cisco doesn't see much of a future with its S-A division and is seeking to sell it. "Much has changed in the set-top box business since Cisco acquired S-A, most of all the streaming of Internet content and the race to introduce video on multiple platforms." With the rise of cloud computing, network DVR plans, and an emphasis on connected TV sets, does an external box improve the viewing experience or simply interfere with it? Most likely, the viewer would not prefer to have one. And Cisco's business plan is moving toward the cloud as well.

If S-A goes up for sale, who will buy it? The article speculates that private equity firms are most likely to bid. But what about a bid from a cable company or group of companies. With so much investment in EBIF, they need a set top box to distribute and interface with the TV experience. Maintaining that exclusive hold on the cable subscriber requires keeping the box in the home.

Google certainly is not buy Motorola for its cable box business. For them it is all about mobility and access to products that the consumer uses in and out of the home, phones and tablets especially. Their eye is certainly not on the cable box, but on the internet.

So what will happen to the S-A box business and how will the cable industry respond. The future is in the clouds and cable may eventually have to catch up and drop the box. Authentication of the consumer can still happen; it may not need a box anymore to make it so.

Big Brother, No Really Big Business, Is Watching

When George Orwell wrote 1984, he may have been concerned that government was watching individuals. Perhaps if there was a modern rewrite, the issue would be that big business is watching and tracking our online movements. In today's news, Google is the one with their hand in the cookie jar. "Google has been "tricking" Apple's Safari browser into letting Google monitor Apple users' web-surfing behavior, the WSJ reports--even users who want this kind of tracking to be blocked." But they are not the only one out there.

With our "permission" or not, we are being tracked. On our smartphones, we are encouraged to let apps track where we physically are, when we surf the web, we are tracked on what we watch and read, and on cable, on what we watch on TV. And sophisticated programs take that data and predict what interests us and targets ads that may appeal to us.

Helpful or not, we are no longer invisible to big business. As we have become an online, mobile consumer, we no longer seem to mind who is tracking us; in fact, we are even sharing pieces of ourselves on social media sites. The thinking seems to be that as long as our financial data isn't compromised and it doesn't cost us anything, we are unconcerned. This news about Google doesn't seem to be getting much consumer response, but perhaps we should be more outraged.

Can Comcast Winback Cordcutters?

Comcast shared some exciting fourth quarter news and the stock market likes what it hears. It reported its lowest drop of cable customers along with an increase in broadband and telco subscribers. "Speaking to investors Wednesday morning, Comcast CEO Brian Roberts attributed the declining defections to added channels and better customer service. He also said that as housing growth improves, actual subscriber growth may return, too." Is the combination of an aggregate of content networks combined with a broadband pipeline enough to stem the loss of cable subs? Will a better economy cause consumers to return to Comcast or will basic losses continue to persist because the cost is too high to justify and alternative content platforms serve their purpose?

As competition for broadband service remains limited, compelling packages of cable subscription with broadband may just be enough to reverse the cord cutting trend. Once you add up the costs of individual premium services - Roku, Netflix, Amazon Prime, Redbox, with the cost of a streaming platform, the overall cost may just exceed the packaged cost from cable. And perhaps it comes down to access to the latest and greatest available content on cable verse older library content that the other streaming services provide.

Will 2012 prove Comcast right that the trend of cord cutting has reversed and basic subscribers will return to cable or is the Q4 2011 small loss simply a temporary pause in the deepening crack in the dam? We can only wait and see.

Does The FCC Want Competition In Telecommunication Or Not

First the FCC bans the merger of AT&T with T-Mobile because it will reduce competition in the telecommunication space; yet, now it bans LightSquared from moving forward despite the fact that it can increase competition and add to the economy. "A proposed wireless broadband network that would provide voice and Internet service using airwaves once reserved for satellite-telephone transmissions should be shelved because it interferes with GPS technology, the Federal Communications Commission said Tuesday." Not having an engineering background, I can simply ask, is there not room for both?

As companies are pursing new streaming businesses, the demand on the current infrastructure is becoming stressed. Current broadband and mobile companies want to change the all-you-can-eat system to usage data billing, and costs for streaming will only steadily rise. Alternative distribution choices, like LightSquared, hope to keep the system in check. But without them, consumers face a limited choice of businesses to choose from for their wireless access.

Just yesterday, IAC introduced Aereo, a new service to stream broadcast television signals to multiple platforms and devices. While the fee for the service may be low, it still relies on a wireless service to enable the connection. And cable companies that provide broadband and cable will no doubt want to charge a ton more for broadband only customers. Wireless providers also want to charge us for access to their 4G sytream. No doubt bundled services from cable and telco will make their package pricing a better value than for customers buying services a la carte.

And without a competing national wireless provider, like LightSquared, how can they consumer build their best valued combination of distribution and pipeline providers. If the FCC truly wants to enhance competition in the wireless space, why aren't they doing more to enable it? Encourage competition or not, but make up your mind!

The @Home Brand Is Coming Back

Twenty years ago, a joint venture of TCI, Cox, and Comcast formed a high speed broadband business to get homes on the web faster than dial up. It was known as Excite@Home but like other cable joint ventures, it had difficulty operating. But it started a trend. Email addresses ended with @home and AOL and Prodigy were being usurped by broadband. This venture ended a decade ago and each cable company moved over to their own exclusive broadband business. With it came the rise of triple play - cable, telco, and broadband and a new revenue stream. The Exite@Home company was quickly forgotten by most consumers.

Well it seems Google is ready to resurrect the brand name. "Among the projects, revealed by a review of public records by this newspaper, are a lab to test a new consumer product under the brand name '@home' that will wirelessly stream music or data to other household devices, apparently similar to a prototype home audio service Google demonstrated publicly last year." Despite the similar name, I doubt most consumers even remember the first @home incarnation. It is clear that Google has their eyes set to compete with Apple in the product and wireless streaming space.

Apple Over $500 A Share As New Upgrades Expected

As Apple shares closed over $500 for the first time, investors are excited for new releases of their tablet and smartphone. "It was the latest step in a rally that began more than two weeks ago, when the company reported staggering sales and profits for the holiday quarter." An iPad 3 is anticipated to be released next month as the iPhone 5 later this Summer. Rumors abound on what these next iterations will look like. And as consumers pick up these devices, they are sucked into the Apple brand and thus encouraged to also purchase laptops and other Apple products. And frankly it is hard to buy just one. An Apple device for every member of the family, from ipods to iPhone, iPads and laptops. Our homes are looking like an Apple showroom. And as Apple keeps innovating, we continue to want to own the next generation of product. As long as Apple keeps getting it right, the stock price should continue to soar.