MDTV is here

The Dyle mobile digital television appI’ve spent considerable time talking with people and writing here about the potential of MDTV to be a game-changer for broadcasters in the digital world. The idea is to put digital over-the-air signals onto your smart phone or tablet by putting a special chip in the device. Well, according to Dallas-based MetroPCS, the Samsung Galaxy S® Lightray™ 4G carries the chip and comes with the preloaded Dyle™ mobile TV app. Welcome to the world of digital television in your hand.

I suspect this will be especially useful for consumers during sporting events and breaking news, and since it uses the digital broadcast signals of the TV stations in town, there’s no bandwidth charge. It’s totally free. As I’ve written before, I’d like to see stations with network affiliations come up with a package that includes broadcasting popular cable shows along with their own. Each station, after all, has more than one digital signal.

It may already be too late, but a healthy MDTV market will make it harder for the FCC to take any action that weakens broadcasting position regarding the bandwidth it is “given” by Washington. It’s going to be an interesting area to watch over the next couple of years.

LINKLook Ma, TV! First broadcast TV phone appears on MetroPCS

TV on portable devices, the real war begins

the great media warA battle is brewing between cable companies and program owners over the use of streaming television via iPads, and it threatens to sidestep the value proposition of Mobile Digital Television (MDTV). Time-Warner has released an iPad app — and launched an advertising campaign about it — that allows subscribers to watch 32 cable channels via streaming to their Apple tablets. I’m a Time-Warner subscriber, and I can tell you that the thing is nice. I can watch basic cable anyplace in my home via my iPad. Why would I want to do that? You’d be surprised.

But the idea isn’t sitting well with channel owners like Viacom or Scripps Networks, who view streaming as a contract violation, because they see the dollar signs that streaming could produce. So far, Time-Warner isn’t giving them any more cash to stream their wares, with Melinda Witmer, an executive vice president at Time Warner Cable, saying “I already bought these rights.”

Brian Stelter wrote for the New York Times that other cable companies are coming out with their apps, too.

Legal threats were made last week, and the dispute was brought into public view on Monday when Time Warner Cable introduced a Web campaign that promoted “more freedom to watch on more screens” and asked, “Why do some TV networks want to take it away?” The television industry is, in effect, joining book publishers in being unsettled by the iPad and the new era of tablets. There is little doubt that people will be watching more TV on tablets in the future. (Imagine a son watching “SpongeBob SquarePants” on an iPad while his father watches basketball on the big-screen TV.)

What is undetermined is whether people will be watching through an application provided by their cable company, an individual channel’s app, or through a paid service like Netflix.

Larry Kramer of Business Insider says what has happened here is the beginning of “the great media war.”

To many of the top cable networks, TWC’s actions are nothing less than a land grab, or rather a spectrum grab. The networks, owned by parents like Viacom and Scripps networks, have claimed that TWC’s actions are violations of their contracts, and that if TWC wants to put their shows on a form of distribution other than cable TV, they have to pay for that privilege.

This all goes to the heart of convergence. Suddenly the video world is in the midst of a content platform convergence that promises to be as confusing and unsettling as everything that has happened in the newspaper, book, magazine and music worlds.

This is going to get really nasty and so far, there’s one voice that’s been missing in the mix, that of the Mobile Digital Television (MDTV) industry. Broadcasters have a huge dog in this fight, and its name is MDTV. Equipment providers are supposed to begin adding the MDTV chips this year, and soon consumers will have another choice when it comes to TV on their portable devices. Is Apple planning on adding the chips to iPads? I don’t know. Are other tablet manufacturers going to do likewise? I’m guessing some will. What about smartphones?

I’ve been trying for the past two days to get somebody in the MDTV world to comment for this piece, and so far, everybody has declined. I understand it’s a hot potato, but to keep quiet at this time is pretty pathetic, for MDTV has a significant dog in this fight. The silence, however, suggests otherwise. Are we really going to let Kramer’s “great media war” go on without throwing even a punch?

I certainly hope not.

Smartphone “inflection point” reached ahead of schedule

For the first time ever, global shipments of smartphones have exceeded shipments of PCs. We’ve all known this was coming, but the most oft-referenced projection (Mary Meeker of Morgan Stanley) had it occurring in 2012. A new report on smartphone sales from International Data Corp (IDC), when compared with a prior IDC report on PC sales reveals the event took place in the fourth quarter of 2010.

smartphone sales 4th quarter 2010

The numbers above show 100 million smartphones were shipped in the 4th quarter. The compares to only 92 million PCs shipped in the same period, as stated in an earlier IDC report. The tipping point appears to have been brought about by Android, according to IDC’s press release.

Android continues to gain by leaps and bounds, helping to drive the smartphone market,” said Ramon Llamas, senior research analyst with IDC’s Mobile Phone Technology and Trends team. “It has become the cornerstone of multiple vendors’ smartphone strategies, and has quickly become a challenger to market leader Symbian. Although Symbian has the backing of market leader Nokia, Android has multiple vendors, including HTC, LG Electronics, Motorola, Samsung and a growing list of companies deploying Android on their devices.”

Geek.com reports that the numbers seem surprising at first but make sense:

For one thing, most people already have PCs, and the market is saturated with them, while smartphone sales are on the rise. Additionally, most smartphones today do everything people want a PC for anyway, including email, browsing and Facebook. On subsidy, the average smartphone is cheaper than a PC to boot, so is it any wonder that so many people are eschewing buying a new computer when they can buy a new smartphone instead?

What’s really important here is that this will accelerate the growth of the portable Web, which functions in every aspect like the wired Web. Don’t get caught up in the idea that portability brings a “do-over” for traditional media companies, because we’re already seeing significant evidence that “apps” aren’t the be-all and end-all that they were originally touted to be. Apps work very well for certain functions, but news and news consumption isn’t one of them. For this, we need the open Web and the back end of HTML5.

We’re much smarter to follow the wisdom of Borrell Associates’ Kip Cassino: “It’s not so much that mobile devices take over as it is that most computing devices become mobile.” That take-over is occurring even faster than anybody imagined, thanks to Android.

Keep your long-term glasses on

Keep your long term glasses onWhen I was a news director, I was often hired in turn-around situations, where a company was dissatisfied with something involving the news department, usually the news ratings. Not every one of my appointments fell into this category, but I always enjoyed the challenge of competing with entrenched winners. I had a few rules that I’m sure the talented people who worked for me remember. Rule number one: there are no rules. We wouldn’t let ANYTHING hold us back from disrupting the status quo. Another rule was: keep your long-term glasses on. We needed to know that taking the mountain was a process that wouldn’t happen overnight.

This rule about long-term focus applies to traditional media, I think, in these times of change, because we’re on a path illuminated not by short-term fads but by long-term trends. It’s vitally more important, therefore, that we always act on behalf of those trends but always question the short term whirligigs that come along every day. I learned in the Coast Guard that the way to avoid sea sickness in rough weather is to keep your focus on the horizon, not on the waves or the view that keeps rising and falling. That’s good advice in any time of change.

But the problem is that many can’t see the horizon. We’ve either got our heads down, buried in day-to-day operations, or we’re trying to make ends meet. The horizon, however — our destination point — is what we need most, because if we can see the goal, we can create the processes needed to get us there. This does require, however, fixating our gaze forward instead of down or to the side.

Take, for example, Twitter. To properly view this wonderful notification system, we must begin with AOL. In fact, you’ll always be safe if AOL sits in the back of your mind as a red flag. AOL was training wheels for the Web, but it was its walled garden approach — building a web within the Web — that eventually spelled trouble, the same kind of trouble that Twitter, Facebook and other proprietary, closed systems provide today. What are the broader strokes that Twitter is providing? This is the important question.

This is why AR&D is writing a new book, 2015: The Future of Local Media. Nobody who reads this newsletter regularly will be surprised by anything in the book, because the book merely advances our vision. In the interim — and in the name of our long-term glasses — I thought I’d publish a list of five of the broad trends that we’re following. We’re all just overwhelmed with options these days, so use this list as a filter to keep yourself focused on what’s really important for tomorrow.

  1. The shift to real time news and information. Dave Winer wrote recently that Twitter is a dress rehearsal for what’s coming, and I think that’s true. During my interview with Kevin Kelly for the book, he noted that THE most important trend to follow is the move from a static Web to “the real time flows and streams” inherent in the living or “Live” Web. Let’s not think of real time as necessarily replacing that which is “finished, vetted and complete,” but rather as a new entity that is evolving before our eyes. Journalists must consider a commitment to real time as a part of doing their jobs, because the stream is the process of gathering news itself. It’s also important to understand that the stream is bigger than anything we put into it. Monetizing the stream, we believe, will come from curating the fire hose for individual consumption and from organizing separate streams from merchants wishing to get messages out to existing or potential customers.
  2. Portability. This is the year that analysts project more portable computing devices will be sold than those that are hard-wired to an Internet connection. 2011 is a tipping point, because portability brings proximity into the media equation, and that brings opportunity in the form of hyperlocal relevance, not only for news and information but also for making money. But don’t be fooled into thinking that portability is something other than just the good old Web. It’s not. Magazine apps for the iPad, for example, have been a bust, because the iPad is just a presentation layer on top of the Web. If it didn’t work on the Web, it won’t work via a portable device. Portability/proximity also brings a heightened sense of “local” into the information equation, almost a redefinition of the term and one with which we will have to contend in the years ahead.
  3. Unbundled content. In 2004, then FCC Chairman Michael Powell noted that “application separation is the most important paradigm change in the history of communications, and it will change things forever.” Media hasn’t fully caught on yet, because the act of “application separation” means, in large part, the unbolting of media content from the original source in which it was presented. Just as it was with the music industry, so it will be with media, because people not only object to our packaging as inefficient and time-wasting but also as self-serving despite claims of the opposite. There’s an old adage among successful bloggers that “if you send people away, they’ll come back,” which influences many strategic decisions about content, including full-feed RSS and outbound linking. Legacy media doesn’t get this, because it’s counterintuitive to its fundamental need to corral and maintain large audiences. Make no mistake, though, content distribution in the future will be unbundled, and the sooner we get there, the better.
  4. Consumers rule. This is perhaps the most overlooked and underestimated new reality for business in the 21st Century. The industrial age was all about a Mad Men sort of “warfare” in which brilliant marketers attacked the minds of people to move them to buy products. How heroic! The problem is nobody asked people if they could play with them this way, and now we have a problem. Consumers can not only talk back, but they can talk to each other, and this is a serious issue for those who need a one-way mechanism to change our minds. How have we responded? I just read in Online Media Dialy of “new video pre-roll units” that will leverage a “variety of targeting methods to deliver high-quality audiences more efficiently than the typical online video campaign.” People as “targets” aren’t really people, so we can put 15–30 second pre-rolls in front of 90-second videos and think that’s tolerable. Everybody knows that the optimum for pre-rolls is 7–10 seconds, but Madison Avenue refuses to believe that it no longer has carte blanche in messing with the lives of consumers. Starcomm’s Rishad Tobaccowala said many years ago that “we’ve entered an empowered era in which humans are God, because technology allows them to be godlike. He asks, “How will you engage God?” It’s a question we should be asking.
  5. Video, video, video. By 2014, Cisco projects that the average downbound bandwidth of the Web will be 14.4 megs and that nearly all of the growth in traffic will be video. Much, if not most of that video will be advertising of one form or the other (if you don’t believe this, spend a little time on YouTube), and this is something local media companies are ideally suited to provide. At many local TV stations, we have whole production departments sitting around twirling their thumbs while waiting for the next commercial shoot when they could be on-the-street making YouTube and other videos for online consumption. We don’t see this, because we’re too busy waiting for the next ad agency to come along with a new pre-roll. We’re so stuck on attaching ads to OUR content as the only source of revenue, but a whole new world is opening for us to pursue. Newspapers could (and are) easily steal this right out from under the noses of TV stations. The online video world has just begun, and we’re stuck waiting for somebody to show us the way rather than attacking it head-on today.

What, Terry, no “deals” application? Perhaps. There are many other trends we’ll be examining in the book, in addition to putting it all together for you in a “here’s what it’ll look like” view of local media, circa 2015. Meanwhile, though, if we’ll run anything that’s presented to us through these filters, we’ll be on solid ground for tomorrow. Is it video-centric? Is it pro-consumer? Is it unbundled and free to be passed around? Is it meant for portable Web consumption? Is it a part of the real time flows and streams? If that which is before you provides a “yes” to those, then take it to the bank that you’re on solid ground. If not, you might want to proceed cautiously.

And keep your long-term glasses on.

Blocking Google and its consequences

Google TVSo the networks have decided to block their programs from the reach of GoogleTV? Interesting, albeit expected response to the awful (for them) disruption that the service represents to the television industry.

Let’s begin.

Television’s early model was network affiliation. After all, you couldn’t serve your programs to viewers unless those programs could go out over the air to waiting antennas atop housetops in the community. For this, the networks paid broadcasters.

Then came cable. Networks bought or created their own channels are marveled at the dual revenue stream of advertising and subscribers. It evolved to a triple-dip, because rather than paying affiliates to carry programs, affiliates receiving compensation from cable companies had to share that compensation with the networks.

Then came the Web, and networks discovered — thanks to Apple — that they could deliver programs directly to viewers, absent advertising, for an even bigger fee. Content was disconnected from its source.

Then came Hulu, and the promise of big fees, direct distribution AND advertising brought everybody on board. Content is back connected to a source, which allows for the shoving of advertising into the equation. This is threatening cable companies, because why do you need cable, if you can get your programs delivered — to your TV set — via the Web?

Now comes Google (and Apple) TV. Google’s application is search-driven, something highly attractive to consumers. Once again, however, content is separated from source. Google is going to make money off of search and the networks want a cut of that. Hulu, which is owned by the networks, was first to block Google TV. Now the networks have done it themselves. You can have your Google TV, they’re saying, but you won’t get our programs.

This is a transparent negotiating ploy, but it does remind one of the RIAA’s battle against separating music cuts from their source. We all know how that ended, and I have to believe this will go down a similar path. The networks, studios and their lawyers are ready, no doubt, but it’s going to get ugly. Meanwhile, there’s a remarkable door opening wide for creative alternatives to network programming, a lot of which is already available via YouTube, which Google owns.

What do broadcasters do? I’m encouraging my clients to attach marketing to their videos and make them available, unbundled, to Google. We don’t want the network’s actions to interfere with what we’re doing.

Meanwhile, MDTV waits in the wings as the next iteration of network viewing. If the nets want their programming distributed this way, they’ll have to, once again, go through someone with a tower that can transmit the signal to waiting portable devices. What goes around, comes around, and it’s going to get very interesting. The only thing that could screw it up is broadcaster greed — a model that requires a subscriber fee to access the “free” signals. Good luck with that, practically and politically.

To quote the old proverb, we live in interesting times. Beware the law of unintended consequences in messing with empowered consumers today.

A message from Qualcomm to Broadcasters

MediaFloQualcomm’s decision to shutter its once-vaunted mobile television product, FLO TV (a.k.a. MediaFlo), ought to send a clear message to the broadcast industry that subscriber fees for Mobile Digital Television (MDTV) are perhaps not the right way to go. Staci Kramer of PaidContent.org reported Monday that the service will “wind down by the end of the year.”

The company is in discussions with AT&T and Verizon about the future of its white-label wholesale service, which continues for now and includes the majority of its TV customers.

Qualcomm CEO Paul Jacobs acknowledged the consumer service’s problems earlier this summer and suggested the company might be better off focusing on using its spectrum and network to distribute other content. This shift places the emphasis on leasing the network, not programming for it.

According to Ms. Kramer, that spectrum is worth $2 billion, so don’t feel sorry for Qualcomm.

That may be comforting when it comes to dollars overall but it doesn’t make FLO TV less of a failure or MediaFlo so far less disappointing. Founded in 2004, the costly mobile TV venture attracted Verizon and AT&T as distribution partners but has been hampered by limited availability on devices and an inability to achieve full distribution. It launched direct-to-consumer FLO TV in 2008 but the marketing message was muddy and consumers weren’t as interested as the company thought in acquiring a separate device and paying a subscription for mobile TV. (emphasis mine)

What people want with their portable device is unlimited texting and unlimited Internet. They’ll buy apps and pay for services like GPS Navigation, but, as Staci says, consumers aren’t interested in paying $14.99 a month for mobile TV. The one thing that Jacobs said might work is live sports, which brings me back to MDTV.

TV broadcast directly to your portable deviceRight now, the broadcast industry is split over whether MDTV should be subscription or free (advertiser-supported). I have been saying it should be free since I first heard of the concept, because it is the only way that local broadcasters can assume a role of relevancy in the new world. Some broadcast groups, however, want that “second revenue stream” as provided by subscriptions, but this will kill it. Firstly, any subscription fees would be split with either the phone manufacturer or the carrier or both. Secondly, there’s no demand for it. None. But portable, advertiser-supported broadcasting could be significant. It would garner a new type of video advertising, because, well, as Nexstar’s Perry Sook said last week at the Borrell mobile conference, if your portable device becomes your wallet (it will), then “your wallet will be in your TV, and your TV will be in your wallet.”

Broadcasters should accept the MediaFlo message for what it is — clear directions for the future of MDTV. Think about it. A broadcasting license would actually mean something again, because it would restore scarcity to an important facet of the digital video distribution system. We must get off the subscription bandwagon and unify with a “free” model.