[opendtv] Re: The Competition
- From: "John Willkie" <johnwillkie@xxxxxxxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 7 May 2008 09:57:11 -0700
WiMax unicast? That won't compete with, nor be anything near the quality of
M/H (70kb/sec vs 500). Remember, the WiMax folks "lack the content."
"Sprint Nextel, Google, Intel, Comcast, Time Warner and Clearwire "
What is alike about these companies -- with the exception of T/W is that
they lack content. So, they're going to spend lots of money to distribute
t/w content?
Also, will Sprint/Nextel do this after they spin off Nextel?
John Willkie
-----Mensaje original-----
De: opendtv-bounce@xxxxxxxxxxxxx [mailto:opendtv-bounce@xxxxxxxxxxxxx] En
nombre de Craig Birkmaier
Enviado el: Wednesday, May 07, 2008 6:36 AM
Para: OpenDTV Mail List
Asunto: [opendtv] The Competition
At NAB there was an air of excitement about the prospects for U.S.
broadcasters to get into the MHP video business. Whether this
enthusiasm is justified or not is very much in debate. This week AT&T
announced that they are deploying mobile TV services in about 55
markets in partnership with MediaFlo.
But the real question is whether ANY broadcast video service for
mobile users is going to be successful?
Broadcasters have beach-front spectrum as their ante into this poker
game. Verizon and AT&T just anteed up billions for 700 MHz spectrum,
but it is not clear whether they will use it for new high speed data
networks or for video service.
Now a consortium of telco, cable and computer industry companies have
announced that they will build a WiMax network capable of delivering
high speed data to mobile devices.
My analysis will continue after this NYT story about the announcement...
http://www.nytimes.com/2008/05/07/technology/07sprint.html?th&emc=th
A Technology Consortium Plans a Wireless Network
By MATT RICHTEL
Published: May 7, 2008
SAN FRANCISCO - A who's who of technology and telecommunications
companies plans to announce on Wednesday that it intends to build the
first of a new generation of nationwide wireless data networks,
according to several people briefed on the deal.
The consortium includes a disparate group of partners: Sprint Nextel,
Google, Intel, Comcast, Time Warner and Clearwire.
The partners have put the value of the deal at $12 billion, a figure
that includes radio spectrum and equipment provided by Sprint Nextel
and Clearwire, and $3.2 billion from the others involved.
They expect the network, which will provide the next generation of
high-speed Internet access for cellphone users, to be built in as
little as two years, but there is no timetable on when it will be
available to users and the price is not determined. The partners are
seeking to beat Verizon Wireless and AT&T Wireless to the market.
The partnership of such fundamentally different companies underscores
the convergence of Internet, entertainment and telecommunications
services. The wireless network of the future is expected to be fast
enough - rivaling speeds that cable customers have in their homes
today - to allow delivery not just of text and simple Web pages, but
of video and advertising.
It also faces considerable challenges. Given the peculiarities of the
wireless spectrum that the partners intend to use to deliver the data
signal, it may not be easy for the group to create a wide-ranging and
adequately reliable service, according to Craig Moffett, a
telecommunications industry analyst with Sanford C. Bernstein &
Company.
He noted that the partners involved were top companies, but that
could also work against the interest of the group. Each member has a
somewhat different agenda and that could lead to conflicts over
operating and managing the network, he said.
Sprint Nextel, which has struggled in recent years against a much
stronger Verizon and AT&T, is looking to capitalize on its ownership
of spectrum; the cable companies are looking to create an additional
service to provide broadband access outside the home; Intel would
like to sell its chips and generally expand computer use; and Google
hopes to develop another platform for advertising, according to
people briefed on the deal.
"Whether it looks good on paper, I'm not sure," Mr. Moffett said.
"There certainly are a lot of question marks that surround the
viability of a proposition like this."
Several of the companies involved in the deal, including Sprint
Nextel, Google and Comcast, declined to comment on the partnership.
But three people who had been briefed on it - and who spoke in
exchange for anonymity because the arrangement had not yet been
announced - said that the group had high if still developing
expectations for the technology.
One of these people said that Clearwire, a wireless company started
by the telecommunications industry pioneer Craig O. McCaw, would take
over management of the project. This person said that the partners
were aware that they had differing agendas that might have to be
subordinated to some extent to make the project work.
"This has huge possibilities for profit," the person said. To achieve
that, the partners "are going to have to set aside some individual
company issues."
The announcement of the partnership comes as the wireless data
business is growing, but one that wireless providers think has vastly
more potential. For example, wireless data - predominantly text
messaging - constituted 23 percent of Verizon Wireless revenue in the
first quarter, up from some 17.5 percent in the period a year
earlier, Mr. Moffett said.
The hope of the telecommunications industry is that users will begin
using such service for a range of applications, including surfing the
Internet on laptops and phones, and downloading music and video more
often to those kinds of devices.
The disparate nature of the participants in the Clearwire
partnerships also hints at the possibilities. Perhaps most
significant is the participation of Google, the search advertising
company, which has provided $500 million for the operation.
A person briefed on the deal said Google could provide the search
engine abilities for the wireless platform, enabling it to sell
advertising there. Google took a similar approach in an initiative to
use a free Wi-Fi network in Mountain View, Calif., where the company
is based, and in a failed plan for a Wi-Fi network blanketing San
Francisco.
The investments by other participants include $1.05 billion from
Comcast, $1 billion from Intel and $550 million from Time Warner
Cable. Bright House, a cable provider, will invest $100 million,
while a private investment group with wireless industry expertise,
Trilogy Equity Partners, intends to invest $10 million, according to
a person briefed on the arrangement.
Miguel Helft contributed reporting.
End_________
The real issue here is how rapidly consumers will shift their dollars
from traditional entertainment distribution infrastructures to a pay
as you go system based on downloading content.
Many analysts believe that the war between Blu-Ray and HD-DVD was
primarily about delaying consumer acceptance of another physical
medium for the distribution of entertainment content long enough for
Internet download to become a viable option. From here it looks like
that strategy worked.
With the announcement from Apple this week that new movie titles will
be available from the iTunes store on the same date as the DVD
release, there is little reason to burn expensive gas to go to Best
Buy or Blockbuster to buy/rent movies. My experiments with iTunes
movie downloads, to keep me entertained during those long flights to
and from NAB, have convinced me that I may never buy a DVD again. And
I'm still poking along with a relatively slow 1.5 Mbps DSL service.
If Verizon, AT&T and the new WiMax consortium can deploy wireless
data networks that deliver >5 Mbps in the next two years, the game is
essentially over. There will be little need for physical
distribution, and paying for a mobile TV subscription will be
ludicrous. That leaves broadcasters will a small window of
opportunity to develop Free To Air MPH services, but little chance of
developing the market for paid video services, which accounted for
about 3/4's of the revenues that the Open Mobile Video Coalition
projected at NAB.
The only chance for broadcasters to monetize the MPH services is IF
they can deliver downloadable content cheaper than AT&T, Verizon and
the WiMax consortium.
It's a long shot, but possible.
The most encouraging thing I saw at NAB was the fact that a large
percentage of TV broadcasters are actually working together, through
the OMVC, to save their business. But are they willing to pony up $12
billion to finance this effort, as the WiMax consortium is doing? Or
the tens of billions that AT&T and Verizon just spent for spectrum -
and the billions more they will spend to build out the infrastructure.
And then there is the nagging little problem of technology. Can U.S.
broadcasters compete by putting a band-aid onto a legacy DTV standard
that leaves them at a huge disadvantage in terms of spectral
efficiency? That is, can they compete with perhaps a few Mbps per 6
MHz channel?
Fortunately, I have bigger problems to deal with, like starting up a
new brewery.
Regards
Craig
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