New Settop Box, New Modem For Comcast Xfinity

From this week's Cable Show, Brian Roberts, CEO of Comcast introduces the audience to it's next generation converter box and modem.



Utilizing a Rovi guide and data stored in the cloud, the set top is designed to provide a graphically richer and faster user experience. Roberts "...used the time for a demo of one technology the company hadn’t yet decided how to deploy—1 Gbps downloads over a cable modem, which we were first to report. But most of the demo went to Xfinity TV features already used in Comcast’s Augusta, Ga. system, including nimble and robust search, apps and DVR management." I have to admit, I had seen this guide demonstration last year inside Comcast Corp as well as other projects including 3D. It will be a very impressive undertaking to switchout boxes and move subscribers to this new experience. With so much legacy set top boxes in the field and the capital costs associated with conversion, I wonder the time frame to bring this rich new experience into the home. And I worry that by the time Comcast gets even to scale, that consumers may have already ditched the set top and cut the cord to cable.

As this rich data is coming from the clouds, so should the content. The boxes seem to continue to rely on an EBIF approach while CE manufacturers are gaining ground with web connections for online content. It is this threat that should most concern the cable industry. Can Comcast deploy these new boxes fast enough to keep subscribers from downgrading and dropping video service? And can Comcast get it's programming partners on board to enable live streaming of channels to authenticated mobile devices outside the home. Certainly Comcast has the deep pockets but it needs to happen sooner rather than later.

QR Codes Invading Retailers

QR codes, those 2 dimensional, squiggly line boxes, are appearing in ads and on products. Go down the aisle of your favorite store and you may just start seeing them on the packaging of products. "The square patterns found in the corner of print ads, in store aisles and elsewhere can be scanned by consumers' smartphones and tablet computers to open a Web page, play a video or even place a call."

And while few consumers are using them, interest seems to be growing. Unsure how a product works, get a quick demonstration; download a coupon for just taking a snapshot. I also see great opportunity to capture information about a product and perhaps add your own notes. I'd love to see wine bottles add QR codes so I could remember which ones I may have tasted and to record my desire to buy again or not.

Applications for such use of QR codes abound. Whether in grocery or home improvement stores, real estate or restaurants, department stores or movie theaters, many companies could benefit from the addition of a QR code. And with their appearance on more and more print ads, awareness by the public will only grow.

Cable Competition Causing Cord Cutting

Great article in the LA Times this week that notes that the internet is not the cause of cable cord cutting. It is competition among cable, satellite, and telco providers that is hurting cable company's subscription growth, noting that "both satellite and telco video distribution services saw growth, while cable fell by almost 2%." Whether the cause of this migration is lower pricing, better service, unique content, or something else should all be considered, yet with the economy in turmoil, lower pricing is most likely the underlying motivation.

The article warns that this migration may still lead to true cord cutting. "The Nielsen study warns that younger Americans are spending an increasing amount of time watching content online." It is why cable operators are pushing to extend the reach and availability of their channel line-up online for mobile enjoyment. As consumers like having content follow them, this accessibility generates both new acquisition as well as retention benefits. Still, TV today remains the dominate means to view long form video content. And with better and bigger HDTV screens and the rise of 3D, a video subscription, whether from cable, telco, or satellite, it is the best means to enjoy it.

Networking DVRs Finding More Opportunity

Cablevision's early push for a cloud based DVR service for its subscribers showed that they clearly saw the future. And yet they were also forced to go it alone against content companies concerned with remote digital copies. It has taken Cablevision some time to settle lawsuits and move forward. And only recently has Cablevision "...started providing a remote-storage recording service in the city and that it had stopped buying physical digital video recorders." Well another cable operator may have also seen the light.

"Comcast will test the so-called cloud-based recording service in some markets late this year or early next year," according to Tony Werner, their CTO. With the legitimacy of the cloud pushed by Cablevision, Apple, and others, the time to remove the set top box from the TV seems to have arrived. And a cloud based or Network DVR (N-DVR) should also help cable operators to offer DVR content to other non TV devices, providing more benefits to a cable subscription package.

Certainly, this should be a concern to TV manufacturers, like Tivo. Hopefully, their software may be of value to cable operators in a N-DVR world; otherwise, there may be little reason for cable operators to want to negotiate with Tivo, simply because cable operators stop buying set top boxes.

But there are concerns with a N-DVR approach. For customers, a concern might be that a network version might have limited trick features attached to it. It is likely that a N-DVR will limit the commercial skipping fast forward feature that has been so widely applauded by DVR users. Another concern is that some content providers may force operators to not allow N-DVR of their content. For example, live sporting events like MLB or NFL games that viewers might N-DVR at home and then would watch on a mobile device. It limits for the sport content the chance to sell a second subscription web package to that cable customer. And customers might get annoyed that some content cannot be saved for later.

Regardless, the cloud is pushing ahead and will no doubt create some initial unsettling conditions. Over time, it will be the ideal choice for the sharing and watching of content, whenever, wherever, and whatever you choose.

Has Facebook Lost It's Luster?

Are we done with sharing? Tired of posting? Annoyed with too much information? Has Facebook become less valuable and thus we are starting to turn it off? "News hit the other day that Facebook may have lost about six million users in the U.S. in one month, according to Inside Facebook, a site that analyzes the social network for developers and marketers." With a US base at about 150 million, that is about a 4% decline in one month. But is it a fluke or a trend?

It doesn't seem too easy to delete an account and far easy to simply stop using it. And one month does not a trend make. More interesting would be to get deeper analytics from users to see if they are using it more or less. A US decline in usage may back up the assumption that Facebook is waning. The article suggests a few reasons, from seasonal adjustments to privacy controls, though I doubt either really matter to most.

For me, Facebook still remains relevant as the place to go to catch up on friends and family activities through posts and pictures. In fact, I prefer posting kid pictures on Facebook as opposed to e-mailing them; yet I still do both. But Twitter has become more relevant in comparison simply to get quick gossip and news on the fly. Is Facebook in trouble? Today I don't believe it is replaceable by Twitter nor is there anything on the horizon that offers something better. But I have no doubt that this news may be the impetus for another entrepreneur to find a better mousetrap to take over the social networking landscape.

DVD Sales Losses Lead to Layoffs

The rise and acceptance with digital content has made it unnecessary to own physical media forms. Who needs a CD or DVD when we are watching and listening with iPads, iPods, and laptops. Why clutter our home with cases and cases piled on bookshelves and closets and floors, when we can capture media on a drive and play anywhere. And with the iCloud, we won't even need to keep content local; we can just call it up from a remote server on demand. It is this changing world that has led to the loss of DVDs and CDs. With content easier to carry on a device, these disks become irrelevant. And so sales have dropped, production has slowed, and the business must be redeployed.

"Such reductions are a direct result of the continued drop in DVD sales. Purchases of DVDs, Blu-ray discs and digital movies fell 18% in the first quarter of 2011 compared with a year earlier, according to the industry trade organization Digital Entertainment Group." But why cut the employee count; why not take their expertise and move them to other uses. Consumers still like to own content and new ideas are still needed to push these consumers to buy digital content in new forms. Digital media remains a nascent business that consumers are still learning how to use effectively. For movie studios intent on selling their media, opportunities are there to offer unique digital content that is easy to access, easy to transport, easy to share, easy to play, and easy to interact with across current and next generation devices. These same employees may bring ideas to aid in the synergy that is needed to develop that next successful business model. The DVD business may be slowly ending, but the time is ripe for new growth models.

Texting Out, Skype In?

I like to text. Short, sweet, to the point. And minimal time involved. But as the above article states, texting is not as popular as before. "Experts said that the rise of broadband Internet meant the end of SMS as consumers could use it to send messages for free." I'm not sure I agree with the assessment.

Certainly the rate of growth has slowed but that typically happens as a product or service becomes ubiquitous. But texting is still growing. Wireless industry trade group CTIA found that in the last six months of last year one trillion texts were sent in the U.S. - but that was the smallest gain since a decade ago." Yet, texting still remains a useful tool for communication.

Still, the web has given rise to other communication tools and each will find their useful niche depending on the level or intimacy of communication needed. Skype
will also grow, especially as smartphones enable mobile video communication. And as far as texting not being cool; perhaps not, but always useful.

iTunes Makes No Profit! Really?

Within this NY Times article this morning about Apple giving Publishers a break comes this little gem, "As the largest distributor of music, for example, Apple generates a hefty stream of revenue for major labels. But the iTunes store accounts for just a sliver of its own revenue, and the company has said in the past that it generates virtually no profit from the store. In the most recent quarter, Apple said the sale of apps, music and content combined brought in just $1.6 billion of the company’s $24.6 billion in revenue." As they say on Saturday Night Live, "Really?"

So it makes just over 5% of Apple's quarterly revenue, what iTunes really does is make all of it's manufactured devices invaluable. Yes the iPhone, iPad, and iPod are great products, but consumers purchase them because of what they do and the content available. Content is King and the iTune store delivers the content that makes these products run. It is the little engine that could. These Apple products would not be nearly the hit they are without the iTune store. It's like a car that needs gas to run. And it is the iTunes quantity of content, wide assortment of apps, and ease of use that makes their products the more preferable purchase choice.

So don't underestimate the profitability that iTunes truly generates for Apple. It is the engine that drives it's products success. And it is why the iPad, iPod, and iPhone are the respective leaders in their category. Makes no profit, Really!

Microsoft Mulls Messing With The iPad

Microsoft has done many things well, but has also missed too. While they have captured the PC market, they have missed in the mobile space, most notably with the KIN and Zune. So the latest rumor has Microsoft trying again in the tablet space to compete again with Apple. "Microsoft is reportedly considering to launch an own-brand tablet PC that features Windows 8 by the end of 2012 with cooperation from Texas Instruments and Taiwan-based OEMs/ODMs, according to sources from the upstream supply chain." With the exception of the XBox, Microsoft's recent track record has not been good.

Other tablet makers get close to the iPad, but no one has yet to surpass it. And truthfully, it is not just the device. Apple's real rainmaker is it's iTune store. With it's apps, songs, videos, ringtones, and other content, the iTune Store is the engine that makes the iPad and Apple's other mobile devices so special. Relying on the Google Android store is not the best solution for Microsoft. It is time for their uniquely branded solution. Unless Microsoft truly commits to a strategic plan, their rumored tablet will likely not succeed.