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Posts from June 24, 2018 - June 30, 2018

US Telco's Following European Operators' Lead with Mobile Broadband TV

Seriously, I don't know what the huffing and puffing is all about when it comes to mobile broadband TV in the media. The European's have had tv over mobile broadband for years. What's more, the consolidated delivery of fixed line phone, broadband, tv and mobile with the same features has been happening across the EU is nothing new. 

This is all a reverse replay of landline cord-cutting and really is designed to keep the customer from leaving. In essence this is all a customer lock-in play. In that scenario the stats made us all think that the cord cutters were going mobile, so everyone thought mobile was the only winner, when really it was the VoIP providers who were sharing in the movement away from the landline telcos.

The cable guys learned that lesson back in the heyday of VoIP, and now, they are doing the same thing with video.  That's also why I'm not surprised. In the words of my 9th grade world history teacher, Royal Black, "history always repeats." He was right.

To me it's also no surprise what AT&T is doing what its doing with Direct TV. It needed DirectTV to get more networks, as it previously had some agreements with some networks dating back to their AT&T enhanced DSL service, U-Verse. For T-Mobile, the acquisition of Layer3 gave them a missing piece for triple play arsenal leaving Verizon stumbling around with their V90 product. But one could say that Verizon is intentionally punting video, while wholesaling their network to the leading cable providers like Comcast and Charter whose new services Xfinity Mobile and Spectrum Mobile (due out any day) provide mobile cable service. (Note I"m actually thinking of switching to Comcast from Verizon, if for not other reason than I'll save $40 a month)....

That's why having lived in Europe in 2015 and realized how pervasive the quad-play is over there, and likely in Asia too, seeing the noise around the mobile TV play is so hum hum to me. It's logical, and with 5G coming, the mobile operators need a revenue stream to go to Wall Street and the banks to finance that build out. That's one reason why Verizon is wholesaling their network, and why you're also seeing more, not less, MVNO's hitting the market. 

Here again, all you need to do is look at Europe where MVNO's proliferate. And with that proliferation, comes more money on the wholesale side, just like the Verizon deals with the cable companies. By wholesaling off network capacity, the mobile operators reduce their marketing and customer service expenses.

Let's face it, connectivity to the wireless network is a pretty mature concept. An iPhone or Android that connects to Verizon's network will still connect if it's being managed by Xfinity or Spectrum, with the only difference being who bills the customer. In exchange for a wholesale price, the cable company, which already has billing, back office and customer support in place takes on that role, and makes less money per customer but extends its share of wallet and share of eyeballs.

This type of thing has been going on, and on and on. Closer to home, the Canadian carriers Bell and Rogers have been doing this too...so why all the attention, to what for many of us has been expected.....what will come next? Here are a few thoughts:

  1. Decoupling-get your broadband from one provider, their mobile from another, your content from others. This is already happening with YouTubeTV, Sony's VUE, Hulu, etc.
  2. VOD Anywhere-your mobile device becomes your TV tuner-you're seeing this with ROKU and Amazon already, and more and more from Google and Apple.
  3. Independent Content Networks-Facebook, Google, Apple, Amazon, Twitter, SNAP all start to compete for indy programming, the same way we are seeing indy music.
  4. The rise of niche channels. PROHBTD and COMPLEX are two examples of pop-culture OTT networks following the Vice model. They offer edgy, insightful and colorful content much like what MTV did. With Amazon, Instagram, YouTube, Twitter and Facebook offering delivery opportunities, and likely Apple soon, cutting edge producers have more than the Big 5 (CW, FOX, NBC, ABC, CBS) to shop programming to. As a matter of fact, with the open access all it takes is a social media built following. Call it democratization of distribution.
  5. More pay per view. Less advertising. More sponsorship.