Tag Archives: digital media

March 23, 2015 · 10:08 am

Willie Sutton And TV

Let’s start this week with a little history lesson. You probably haven’t heard of Willie Sutton. According to Wikipedia, William Francis “Willie” Sutton, Jr. (June 30, 1901 – November 2, 1980) was a prolific American bank robber. During his forty-year criminal career he stole an estimated $2 million, and eventually spent more than half of his adult life in prison.

English: Willie Sutton (1901-1980) Source http...

(Photo credit: Wikipedia)

There is a famous quote attributed to Sutton (he swore he never said it) who reputedly replied to a reporter’s inquiry as to why he robbed banks by saying “because that’s where the money is.” I’ve always remembered that because it’s a great way to stay focused when shiny new business options emerge.

One shiny new option these days is the plethora of Over The Top video services. You have probably heard about the one forthcoming from Apple, and HBO, CBS, Sony and others are already in the marketplace. The short version of why these things exist is so one can cut the cable cord, freeing oneself from the “bundle” of unwanted but paid for TV networks. If I’m a cable TV provider – most of whom are also internet service providers – I’d welcome these services with open arms and some of them are. Cablevision, for one, is offering the new HBO Now online service to its internet customers, even though the service could persuade more people to drop their cable TV packages.

Keeping the Sutton Rule in mind, where the money lies is in providing high-speed bandwidth at a reasonable price.  It costs the ISP pennies per gigabyte.  Charging a customer $50 a month for something that costs you maybe a tenth of that is a pretty good business.  Compare it with providing cable TV where you’re charging a little more but your margins are much smaller due to having to pay most of the networks you provide a monthly fee per customer.  You still pay ESPN $8 a month for each of those grandmas with cable who never tune it in.

I’m assuming for a moment that the customer service and install/repair costs are a wash.  You’re going to have those techs and phone banks no matter which service you support.  The real question in my mind is when will some cable company get out of the TV business and go ISP only.  Will that kill the content providers?  Nope.  One could argue they will come out ahead too since many of them receive far less on a per user basis from the cable guys than they might charge direct to the consumer albeit to a smaller but more engaged base.

The interesting times keep coming, don’t they?

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February 26, 2015 · 1:17 pm

It’s Not Just Big Brother

Another day, another horrible bit of news on the privacy front.  I’ll take it as a sign that another post on data collection and privacy is called for.  I think that by now we all know that everything we do in a digital world is collected and that nothing collected in a digital world is private.  Oh sure, maybe your Aunt Sally can’t see your phone records, but someone can, and it’s probably not someone who needs to know that you called a suicide prevention hotline 4 times last month.  As one writer put it:

Collection means access, period. Someone who wants information can always find a way to get it, and yet we’re only expanding methods of information collection: trackers, cameras, beacons, glass, drones. This puts all of us in a very public place, constantly.

Amen, and it’s a thought each of us needs to keep more forward in our minds.  The Pew Internet folks have been doing an ongoing survey with respect to privacy and the latest report (which you can read here) contains the following quote:

An executive at an Internet top-level domain name operator who preferred to remain anonymous replied, “Big data equals big business. Those special interests will continue to block any effective public policy work to ensure security, liberty, and privacy online.”

I’m not really aware of any recent business model that isn’t centered around data collection and monetization at least in part.  Retail, health care, entertainment and media, finance, and insurance are sliding their models to revolve more around robust data collection and usage.  We as consumers can say “fine, I will gladly give up data in return for convenience, better pricing, or an improved product”, but that’s a choice WE make, not the provider.  It implies informed consent.

The latest fiasco to which I referred earlier comes from Lenovo, which, as Ars Technica reported:

…found itself in hot water last week when researchers discovered that pre-installed adware from a company called Superfish was making users vulnerable to man-in-the-middle attacks. The adware installed self-signed root HTTPS certificates that made it easy for Superfish (as well as low-skilled hackers) to intercept users’ encrypted Web traffic.

In other words, by buying a Lenovo computer you made data which you thought was secure and private very much not so.  That’s the sort of corporate bad behavior which is intolerable.  But in order to respond, we have to be aware, and I suspect that this is only one example of this behavior.

OK.  Rant over.  The take away is this – if you’re a business, act responsibly and transparently.  If you’re a netizen, pay attention.  It’s not just Big Brother who is watching.

Thoughts?

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January 7, 2015 · 11:35 am

The Future At The Gates

Over the holidays I spent time catching up on a lot of video content I had missed.  Not unusual, I know, but what was different was how I accessed it.  Some I watched using the VOD capability of my cable provider.  Some I streamed via an Xbox and either Hulu, Amazon, or Netflix.  That video came via my internet connection which was not through my cable provider.   It got me thinking about the gatekeepers, both current and future, and why the battle over Net Neutrality is so critical.

You probably haven’t read the latest PWC study on how consumers are using video.  You can read it here – it’s an excellent study.  The term they use is “videoquake” and I think it’s apt:

This is a wake-up call not just for cinemas and film studios, but also for traditional cable and satellite players and anyone involved in video content production and distribution. The shift is here—alternative forms of video content will continue to rock not only what we watch, but how, where and with whom.

Most of us don’t have more than one high-speed internet provider from whom we can buy service.  There is very little competition and, therefore, no market pressure for many of these ISP’s to upgrade their services.  In many cases it’s the cable TV provider who is also the ISP.  Part of this has to do with the legacy of how cable came to be.  The companies were granted local monopolies in return for building out the systems.  Seemed like a fair trade at the time.  Data to the home was not on many people’s radar when this went on and today these systems are under no obligation to allow anyone else to access their poles or wires.  Building out a competitor is extremely difficult.

You might be aware of the impending FCC rule making on net neutrality.  I won’t write to 3,000 additional words it would take to explain it but in brief many are calling on the FCC to reclassify ISPs as common carriers under Title II of the Communications Act of 1934. The popular belief is that Title II classification would allow the FCC to protect net neutrality by regulating against paid prioritization.  You can read a longer explanation here.

While I’m not sure that’s the right answer (rules from 1934?  Seriously?), one effect this would have is to require access to those poles making build out much easier.  If you’re a business that has made money (a LOT of money) from a monopoly on bringing content into the home via coax (cable TV) or ethernet (internet service), you can hear the future at the gate and it’s banging rather loudly. Imagine what happens when not just Google Fiber but companies such as Apple or Yahoo offer internet service (everything old is new again – AOL, anyone?) via their own pipes.

With more and more content being delivered on a stand-alone basis via our internet connections, the gatekeeper (now the wireless carriers or the cable companies in most cases) will collect not just the monthly fees but the data associated with the usage.  That data might be even more valuable (hmm – a free high-speed internet provider who just sells data?  Investors?).

Are you hearing the banging at the gates too?  What are your thoughts?

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