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Verizon Communications CEO Ivan Seidenberg said today: "Hulu is a six month wonder and that technology will ultimately bypass the current fascination with the online video service." I think his prediction may be correct, but for the wrong reason. It won't be because of technology, it would be a result of Hulu losing its exclusivity over online distribution for NBC, Fox, ABC. These programmers will have too many other, more economically compelling online distribution options shortly, with TV Everywhere, etc. Story: http://www.broadcastingcable.com/article/390026-Verizon_Chief_Hulu_Will_Be_Over_In_Two_Years.php
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Comcast-owned ThePlatform is arguably the top Online Video Platform (OVP) provider, and almost certainly is within the TV industry. They unseated encumbent Brightcove over the last year by launching Hulu.com, CBS.com, TV.com, and a slew of other broadcast and cable TV networks. They announced even more TV programmer customers today (most of whom are owned by Comcast) as well as Rogers, Canada's largest cable operator. ThePlatform also powers online video for Comcast's largest competitors: Time Warner Cable, Cox, and CableVision.
Today, thePlatform made a major announcement that brings TV Everywhere a HUGE step closer to reality.
ThePlatform is launching a cable Authentication & Authorization component to its white-label video publishing product that will enable programmer web sites (HBO.com, Showtime.com, NBC.com, etc) to publish their premium TV shows on their sites, requiring the user to authenticate himself as a cable subscriber with access to that channel (ie, you can only watch HBO shows online if you pay for HBO through your cable provider). Enforcing this authentication ensures everyone in the media supply chain gets credit for that view, and money is transferred accordingly. To that end: an integration with Nielsen to directly track views would be a killer strategic move by thePlatform!
This solution also has the following compelling side benefits for the MSO's and TV Programmers:
- Keeping cable subscribers happy and hooked (cable companies fear that free online TV services like Hulu may result in cable subscribers canceling their pay TV services).
- Upselling subscriptions: if I'm a Comcast subscriber but don't pay for the HBO cable package, I may be compelled to sign up now if it means I can watch all HBO shows whenever I want, online (or on my HD TV via Boxee or the like).
- Upselling content: if I am not an HBO subscriber but want to watch just a single HBO show, now there is a mechanism to buy shows a la cart. This is the model that Disney currently loves.
Here's a nice diagram of how this new component works:
ThePlatform is initially providing this technology only to TV Programmers for their sites (broadcast networks and cable channels). That's a great first step, though I believe the killer app will be making this capability available to any web site, not just NBC.com or HBO.com, etc. I wrote about this just yesterday.
Regarding the rest of thePlatform's competition in the OVP space... DigitalSmiths, despite its strong TV Everywhere positioning campaign last month, hasn't released any technology yet that addresses the initiative's largest challenges: authentication and authoriziation. Meanwhile, Ooyala and Brightcove appear to be sitting on the TV Everywhere sidelines.
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Marketers care first and foremost about reaching their target customer. Content (media) has traditionally been a proxy for reaching those consumers. But that's all changing now, and it will adversely impact old media (such as broadcast and cable TV), which does not have strong audience targetting capabilities.
There is a philosophical shift on Madison Avenue, where major agency holding company media services operations say they have shifted from a mentality of "buying media," to one of "buying audiences," and that technology and automation have enabled them to accelerate that shift. "Data is the fuel that drives today's audience targeting engines. Data-driven audience planning and targeting tools ultimately enable brands and their agencies to reach and target verified audiences of prospects that look like their best customers," David Helmreich, vice president-interactive markets at verified audience data provider TARGUSinfo writes in the report. Rubicon described this shift as "advertising 3.0," and said it will really start to accelerate as publishers begin selling their "audiences - not just their sites, zones, brand and content."
Story:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117611
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Good news for both Comcast and Murdoch this week: consumers are increasing their spending on monthly subscriptions to entertainment and news content. "Overall monthly per-capita entertainment-content subscription spending rose to $115, which is an increase of nearly 7 percent since last year. “Despite concerns that the recession would cause consumers to reduce spending on entertainment subscription services, most forms of subscription entertainment are doing just fine,” said Russ Crupnick, entertainment industry analyst for NPD. “Consumers are clearly looking to the value offered by entertainment subscriptions and like what they get for their money; plus, new technologies and products have helped bolster data plans and other newer kinds of subscription-based services.” Press release: http://www.npd.com/press/releases/press_091116a.html
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One step at a time, I understand. But I believe it's critical that TV Everywhere becomes an "open" premium video distribution platform available for any web publisher, on any web site.
Consumers will demand the freedom to watch Entourage in their preferred environment, be it Hulu.com, Facebook, Boxee, etc... not just on Fancast.com or HBO.com. That is the promise of TV Everywhere. Universal authentication will make this a technical possibility. It is ultimately the right thing to do and will benefit the entire media ecosystem, starting with the paying customer.
Clearly Comcast, Time Warner, and the other MSO's need to weigh the benefit of providing their subscribers a good experience (in the form of choice) versus the economic benefit of locking their users to their own sites (or programmer sites, such as HBO.com, CBS.com, Showtime.com, etc).
The MSO's have a reputation for opting for the economic benefit over the user experience benefit, which has really hurt their brand image.
Creating a "win" for the user should be the top priority for Comcast and Time Warner. Remember, TV Everywhere was born out of a defensive move to stem cable cord cutting.
I understand that we are just in the first inning of TV Everywhere, and these are the necessary first steps. However, I would like to hear Comcast and Time Warner talk about the longer-term vision for where this is all going.
Here is Comcast's Amy Banse articulating their near-term TV Everywhere (OnDemand On Line) rollout:
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The Wall Street Journal ran a story today discussing the potential regulatory challenges to a Comcast acquisition of NBC Universal. What these stories seem to miss is that this a DEFENSIVE move by Comcast, not an aggressive move against its rivals. Comcast is NOT buying NBC to seek an "unfair" advantage in its cable markets (though that's not to say they wouldn't hesitate to pursue such advantages if they were available). The real motivation behind this deal (I believe) is survival. Comcast understands that the price point for distributing TV into homes is going to fall dramatically in the coming years. Comcast's 3 distribution products, Voice - TV - Internet, are collapsing into just one, single product: Internet. This poses a huge threat to Comcast's top line. As such, Comcast is hedging through diversification into content, moving up the media value chain. Comcast will be looking to replace lost revenue in distribution with revenue from content (advertising, subscriptions, etc). At it's core, it's that simple. Therefore, I believe Comcast will be willing to live with any reasonable regulatory restrictions the government slaps on this deal.
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The Old Way: consumers pay for distribution of content (cable, newspapers, ISP's, etc).
The New Way: consumers pay for the content, regardless of how it's distributed (TV Everywhere).
TV Everywhere's core value proposition for consumers is that they can view their TV when they want (on demand) and where they want (TV, PC, mobile, tablet, etc). It's a no brainer proposition; who wouldn't want that?! Newspapers need to do the same thing for news content. This is where Murdoch is both right and wrong. He's right in that consumers SHOULD pay for the value of quality content, but he's wrong in that they should pay twice for the same content: once for physical newspapers and again for online access. Consumers WILL pay for the value of quality content, as long as they only pay for the "piece of content" once, and are able to view it how they want, when they want. Assuming that the consumption of the content can be tracked across all devices, that ads can be dynamically placed across all devices, and that the content programmer gets "credit" for the view.... everybody wins. End of debate.
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The highlight of today's NewTeeVee Live conference was clearly Quincy Smith, the "Hans Solo of TV Everywhere". The guy is brilliant. He is one of the few media executives who totally understands the whole picture: traditional TV, the web, the consumer, the media supply chain, distributors, and advertisers. And he can articulate a powerful and compelling vision for where TV is going (very much UNLIKE his music counterparts). Comcast's Amy Banse came in 2nd place as far as speakers, in my mind. She is such a great spokesperson for Comcast: precise and calculated. Represents the Comcast brand perfectly.
But where was Hulu? Perhaps true to the current anti-momentum Hulu is struggling with right now, Jason Kilar (Hulu's CEO) was MIA from this year's conference, dubbed "The Year of TV Everywhere".
http://newteevee.com/2009/11/12/newteevee-live-quincy-smiths-official-exit-interview/
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The Aberdeen Group today released an independent research study conducted by Michelle Boucher, product innovation and engineering analyst, that examined the best practices of companies building smart products. The 27-page report summarizes the results of a detailed survey conducted with over 150 organizations early this year. The report, co-sponsored by Jama Software and IBM, reveals the leading strategies for system design that lead to greater profitability while reducing the risk of excess cost.
“Requirements should be linked to higher level system functions as well as to the overall customer need it meets.”
The paper is title, “System Engineering: Top 4 Design Tips to Increase Profit Margins for Mechatronics and Smart Products“, but has broader impact and value to any company building products with complex requirements that can change during the development process. The research finds that what is making the difference for successful companies is how they:
- Capture what their customers want
- Manage those requirements effectively throughout the product lifecycle
- Take advantage of system engineering best practices
The key findings of the report demonstrate the financial gains and overall value that requirements management and system engineering best practices deliver to enterprise organizations. Best-in-Class companies:
- Earn 2x higher profit margins
- Achieve 6x faster development cycles
- Meet product launch deadlines 20% more often
Request a complimentary copy of the complete report from Aberdeen’s web site. To put these industry best practices into action, explore Jama Contour.
Part 2 – A New Hope
There have been some interesting conversations across the blogosphere on Google’s entrance into the basemap and navigation business. From an interested spectator point-of-view, I am a bit of a fan of the sheer audacity of Google’s mapping effort; creating a US basemap from scratch, building a navigation application, and rolling out a real-time sensor network (with 76 million devices) disguised as a mobile phone, all in the space of a couple of years. Well, that’s just crazy. However, as much as I am a fan, this event is just one more example of the impacts of rapidly changing technology in our field (Part 1), making previous niches obsolete and forcing individuals (James Fee) and companies (e.g. Cloudmade) to adjust business models to just survive.
Geo-powered apps are changing the game for developers
There were a couple of themes from these conversations that I found interesting. The first was represented by Peter Batty (and links therein), which could be broadly interpreted as “Content Matters”. That is, the cost (or lack there of) of the navigation application was less than important than the base content within it. The second theme was summarized by a podcast at Directions Magazine, which posited that the data didn’t matter. Adena and Joe’s point of view was that the application was going to overshadow the importance of the content. They felt that the application cost, functionality, and ease of use would generate more relative value than the content. I personally believe that both these points are two sides of the same business coin, and to be successful in this space you will have to have both great content, and a great marketing and delivery application.
Let’s start with the Batty et al.’s assertion that “Content is King”. In a frictionless marketplace of ideas and data, where the process of disintermediation has reached its peak, the lines of competition will be drawn around product price, branding (think Crest versus Colgate) and quality (think GM versus Lexus). This suggests that our market will continue to separate between the aggregation of (free) commodity data (10 meter USGS Digital Elevation Maps) and premium data (nationwide parcel data). I have been a proponent of premium content for a couple of years and I see it as a bright spot for geospatial professionals because good content tends to be localized providing niche geo-opportunities locally, across the globe.
An example of “premium-content-is-winning” may be found in the newspaper industry
Wall Street Journal's premium content drives growth
The Wall Street Journal has maintained its subscription-based revenue model all through the “content-should-be-free” era of the internet. It is now the only major newspaper in the US with a growing circulation, and is the nation’s largest newspaper by circulation. They demonstrate that the quality of content matters, and will continue to matter moving forward. Looking more closely at the difference in content provided by the #1 Wall Street Journal and the #2 USA Today, the Wall Street Journal might be considered a “premium” niche player, compared to the generic “consumer” news offer by the USA Today. Generic news may be found in a lot of places (for free). In the spatial industry, we might compare this to the “free” generic DEMS offered by the USGS and the “premium” high-resolution LiDAR surveys by companies such as Merrick. Clearly, quality content has value and people are willing to pay for it.
But Adena and Joe have a point. We consume digital content differently than other commodities such as toothpaste. Even if today’s premium navigation data becomes a commodity by virtue of the “less-the-free” data offered by Google, the data must still be delivered via a service and application that people wish to use. The consumption of content, and the value-added services built on top of the content, will depend directly on the quality of the application that delivers that content. In this case, the application will matter as much as the content. If either fails to deliver, the whole effort will fail.
While we may currently consider ourselves either data providers or application developers/integrators, I think our industry will move towards a Data-as-a-Service (DaaS) industry, where the data and applications are inextricably tied. I believe this will be the case for all platforms, including web, mobile, and desktop. And in this new DaaS era, the geospatial integrators may have an edge because they are used to thinking about data and applications simultaneously.
In addition, the economic process that is currently squeezing the revenues of integrators and GIS professionals may be turned to work in their favor, as the many sources of free, low cost, or open source software becomes their application supply chain. In the past, these integrators thought about their customer’s data and its integration within a proprietary mapping software stack. In the future, they have an opportunity to become vendors of DaaS, either for their customers, or for themselves. The combination of accessible data (low-cost or free) with low-cost applications and hosting will enable these professional to create premium DaaS niches, recouping the profit margins lost to the commodization of their IT skill set.
This is one path towards a new, hopeful future where the geospatial professional controls the fate of their destiny, rather than trying to survive on the leavings of giants.
A new hope for Geo-Jedi’s
Rumors are flying high today about an iTune's $30 / month "TV Subscription" service. It would give users "all you can eat" downloads of current (and some past?) episodes of TV shows - playable your computer, iPhone, iPod, or even up on your TV. No need to pay Comcast anymore, right? Sounds great for users, but it does force the TV networks and cable channels into an uncomfortable and unwanted political mess. The content providers remain quite reliant on fees paid to them by the cable / satellite companies; it represents a large percentage of their overall revenue, in fact. Further, iTunes downloads would potentially erode their primary revenue stream: broadcast advertising. Why would NBC, Fox, CBS, etc risk any of that? While Apple would love to disrupt the TV industry as thoroughly as it did the music industry, by disintermediating the MSO's (cable co's), I just don't think it will be that easy. In the case of TV, unlike music, the content providers hold the cards and they have little interest in pissing off their existing distribution partners. That's ESPECIALLY true if the MSO's go on an expected content binge (a la Comcast gobbling up NBC). Story: http://mediamemo.allthingsd.com/20091102/apples-itunes-pitch-tv-for-30-a-month/#content-main
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Let's all say a collective "Duh!" If Comcast buys NBC, Comcast won't be allowed to remove NBC channels from TimeWarner or DirecTV offerings. "Duh!" If Comcast buys NBC, Comcast won't be allowed to delay airings of NBC shows on rival MSO offerings. "Duh!" If Comcast buys NBC, Comcast won't be allowed to limit online viewing of NBC content to only Comcast subscribers. Again, a no-brainer "duh!".
Comcast's interest in NBC is not to gain unfair distribution advantage. It is to move up the media value chain, closer to content, diversify its assets, and acquire a "safer" revenue stream as cable TV increasingly becomes a "dumb pipe". Comcast won't screw up those objectives by pursuing clearly short-sighted and probably illegal content hording (which also severely limits the value of the content!).
Here's the WSJ blog post:
http://voices.washingtonpost.com/posttech/2009/11/a_comcast_buy_of_nbc_raises_sl.html
Sent via BlackBerry
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Part One – The Revenge of Moore’s Law
James Fee made an eloquent case for why he made the leap to WeoGeo. While I would like to claim the powers of a Jedi knight, I think the true motivation of his choice was the hard economic realities of the spatial IT business. As James mentioned, the pricing pressures in basic spatial IT integrations are increasing, which are resulting in a falling revenue flow for many integrators.
The future of Spatial IT as a technology sub-discipline.
I think this is happening for many reasons, but here is the major one. Spatial technology is becoming more robust and easier to use for repetitive business functions, i.e. building a slippery map that shows points-of-interests (POIs), lines, and polygons no longer requires a specialized GIS technology stack. Just getting an organization’s information on a map that can be viewed internally (intra-net) or externally (inter-net) used to pay a lot of bills. The problem is that it doesn’t anymore. To a large extent, we are the victims of our own success at demonstrating the power of spatially-enabled business content and services.
In addition, for other types of higher-order analysis, display, and spatial enterprise operations, you don’t need a proprietary specialized database any more (i.e. Oracle Spatial 11g ) as Microsoft SQL 2008 and others built geometry and geography natively into their applications. And of course there are the plethoras of open source options that allow you to avoid proprietary databases all together (e.g. PostGIS). With these databases, one does not need the spatial data engine abstraction layers (e.g. ESRI’s SDE, which might be why they quit selling it as a stand-alone product) to expose your organization’s spatial data to those that need it or other applications to consume it. These spatially enabled databases also provide for some high-order geospatial analysis to be preformed without the need of desktop- or server-side products (like ArcGIS Desktop or Server), and in many cases without the need for GIS Professionals to run that analysis.
Part of this enhancement in the spatial technology stack could be laid at the doorstep of web advertising companies (e.g. Google), which are bringing billions of new dollars to bear on spatially enabling web services. Yet, I believe the trends were there before the release of Google Maps and Google Earth, as Oracle was putting spatial operators into their main release in version 9 in the early 2000’s. Innovations in web mapping systems have been occurring at an ever-increasing rate; and we in the spatial field are just the latest recipients of the impacts of Moore’s Law on complex business services. As the spatial IT stack continues to evolve, one should expect the distinct separation between the “GeoWeb” and the “Web” to become increasingly fuzzy, with the distinction eventually becoming irrelevant.
What does that mean for the specialized services of the spatial technology integrator? The simple mapping stuff will be just part of the web programming stack, with little separation between web programming and spatial web programming. Spatial technology integrators will have to evolve to create more value from enterprise technology operations, where spatial is just one part of their enterprise project. This can be successfully done, and one only has to look at Dave Bouwman’s group DTSAgile (which is just kickin’ it) to see that it can be accomplished.
However, the competition will be fierce because the specialized spatial IT stack will evolve into the plain vanilla IT stack, with more competitors and easier-to-use technology. This will mean much lower margins per spatial project; and that is just the way of the economic “force”. In addition, I have been hearing stories of increased competition from specialized software vendors like ESRI for consulting revenues on increasingly smaller and smaller projects. This suggests that the integrators will be squeezed from multiple directions, setting up the potential for a shakeout for integrators in our industry.
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