Jennlog

I was in Canada over the holidays and hoped to keep my Curve off the entire trip so I wouldn’t be charged the infamous AT&T International roaming fees.

I happened to need to turn on my Curve twice on one day to look some old email and negotiate a meeting place over several voice calls. The bill for this extravagance was over $30 + “regulatory” fees. Voice was $0.79/minute and god knows what they were charging per byte for data.

I dream of the day when handheld wireless IP devices will enable an international traveller to send and receive voice calls and send and receive data without the telcos smiling at you while they explain how they absolutely must charge you $0.79 a minute to transport less than 4 kb/s around the neighborhood or they’d go out of business.

A new network protocol for authenticating/authorizing wireless IP roaming devices is likely needed before cell phones can be replaced. Requiring a person to actively submit credentials every time their VoIP device passes between wifi networks will drive even the most technical savvy device owner over the edge so the protocol would have to be passive and seamless. This protocol needs to be aware at both the network layer (Registry based DHCP on steroids?) and at the application layer (SIP? H.323? Something new?) and tied to distributed subscription access-aggregation service.

With such a solution in place, taking into account administration expenses and roaming deal overheads, a VoIP-aware international IP hotspot aggregator could be profitable while making it worthwhile for hotspot owners to participate in such a service.

During the last few days, much has been written in the popular tech blogs about the throttling actions of Comcast vs. the proposed metering actions of Time Warner — suggesting that metering might be the preferred and fairer approach to restricting subscribers’ growing bandwidth usage habits. That discussion only focuses on a small part of the bigger picture, however.

From the network operator perspective, degrading service and metering service are mutually exclusive actions that create opportunities for monetization on each side of their operation at the application layer.

In the media distribution food chain, cable companies and telcos have always monetized either side of the communications relationship they are facilitating — at the application layer. Connectivity and access at the transport layer are not monetized by legacy communications infrastructure as it is with IP networks.

Cable companies charge, demand ad revenue opportunities or otherwise negotiate remuneration from television networks requesting availability to their subscribers and then turn around and charge subscribers for access to the television networks.

“Network Availability” (what AT&T and others are suggesting they need, in opposition to “Network Neutrality”) is about restricting and monetizing media availability to subscribers.

“Conditional Access” and DRM are about restricting and monetizing subscriber access to media.

In an application layer monetized world, if an operator can’t negotiate a revenue stream from a media producer or aggregator, availability of the media producer’s product is degraded or disallowed — If revenue can’t be obtained as a result of a subscriber request of a media product, access is prevented.

With the Internet, network operators have been left out of the media delivery monetization pie, other than deriving income by supplying “Naked” transport in to and out from their infrastructure.

Comcast and Time Warner are approaching the monetization of Internet-delivered media completely differently.

If Comcast can successfully negotiate frees from media producers and aggregators in exchange for not degrading their Internet-delivered media, Comcast has successfully generated a huge stream of perpetual income that didn’t exist until that deal.

If Time Warner can successfully implement fees from subscribers in exchange for delivery of their Internet-delivered media, Time Warner has successfully generated a huge stream of perpetual income that didn’t exist until those subscribers signed on.

This week two major Internet-based video distribution overlay services were announced for consumers in the US — And predictably, the first major operator reaction occurred today — not far behind.

Time Warner Cable, the second largest cable system operator in the US after Comcast, announced that they will “experiment” with use-based pricing on their Internet Access products, virtually guaranteeing extra service fees for anyone contemplating video delivery to their home over the Internet.

Hopefully Time Warner customers who use the Internet for more than stock quotes, email and the occasional lolcat move to a competitor.

Yesterday, Apple officially launched their new iTunes Video Rental service.

The film rental service is built upon the existing content management and distribution system that facilitates the sale of audio and video products across the Apple CE line, including a newly untethered and upgraded IP-based AppleTV set top product. I presume it will also work on iTunes for Windows.

Is this service revolutionary? No. Evolutionary? Yes.

Cable operators in the Americas and Europe have offered VOD-based rentals for almost a decade (in Asia, almost two decades), but have not expanded their focus beyond their prized set-top box — some have started developing parallel stream-based services on the Internet, but there is no cohesive product relationship. Cable-delivered services have started and ended at the television set.

In relation to online services, Disney’s MovieBeam and film industry venture Movielink both offered film rentals by all the major studios in the same price range as the new Apple service, but their products were not very accessible and alienated consumers.

Apple’s agreement with Hollywood enables iTunes to rent movies 30 days following a DVD releases. This is presumably done for the same reasons that Hollywood fragments their DVD distribution amongst several region codes.

Apple operates the world’s most popular electronic media distribution service and is clearly the manufacturer of the world’s most popular portable media players. This dominance feeds directly into the adoption of their iTunes audio and video manager/player, compatible with both Microsoft Windows and Apple’s own OS X — and closes the loop on a single-provider “fully integrated” Virtual Walled Garden Overlay.

Apple will be the first effective solution to bring wide-scale video from the Internet to television. On the other hand, YouTube and its clones that drive traffic through novelty and news will not escape the immediacy of the social media-driven browser universe — regardless of mobile and television-focused efforts.

While this product will be the service to popularize electronic film rentals to the general public, other services such as the unlimited electronic streaming delivery products from Netflix will equally share this vanguard, but in a more constrained and restricted manner.

After an agnostic media management and delivery infrastructure reaches the edges of the Internet, Hollywood will pull back control over their media and begin to pursue direct delivery of media themselves

Hollywood has a history of taking control of media delivery channels that cross over the boundary from experimental to mass market — acquiring their video tape manufacturers and distributors. Affiliate television stations are finding the territorial relevance that solidified their existence in the traditional television delivery value chain has been erased by the global and direct reach of the Internet enabling the parent networks to deliver television directly to consumers through websites.

Eventually, the proprietary FairPlay format of Apple will also be superseded by a consumer-friendly format, popularized by consumer media generation — enabling/allowing consumers to integrate their own personal media with acquired media across consumer-chosen devices.

Apple’s iTunes Rentals service is evolutionary — as a stepping stone. It’s not going to kill DVDs or DVD rental services because the majority of the movie viewing public won’t immediately change their habits to pay apple $3-6 to watch a movie.

Apple will see the world to the time when Hollywood (and all media producers) will be have the capability to deliver media directly into consumer’s lives with commodity technology, infrastructure and players with flexible billing/usage models allowing for purchase, rental, subscription, advertising-support, gifting, freebies, exchanges and situations not thought of yet.

Well the MacWorld Keynote is over and the two big announcements were a new MacBook and Video Rentals.

First, the new MacBook is named the Air. It’s a beautiful tiny computer that Steve Jobs called the thinnest laptop in the world. I don’t know enough about the thin computer market, but it looks mighty thin.

I am wondering what Apple was thinking (other than “wow cool we have a thin laptop!”). I own a couple of the PowerBook Pro aluminum shell laptops and while the 17″ lasted just over the three years that AppleCare pretended to provide some coverage by virtue of it’s size and mass, the 12″ is dented, warped and the screen top barely closes when I put it to sleep.

Apple is asking for a torrent of service calls from people who have it slip through their fingers at TSA checkpoints, find fido crushing it to pieces, or have it folded as someone tried to squeeze by them on a crowded subway/train. This product isn’t going to be good news for apple’s return/service people at all.

MacBook Air Prediction: More than 20% are returned for service within the first 6-12 months.

MacBook Air Prediction 2: At least a couple blogger-originated memes every month about dead Airs and their owner’s experience with Apple Support.

I’m saving the new iTunes Video Rental service for my next post.

Edited to add MacBook Air Prediction 3: Air owners will eventually start purchasing rigid exo-skeleton covers for their Airs, which defeat the whole “thin” esthetic of the laptop — but they will still be the owner of a wikkid cool portable computer!

Today, Netflix announced they are offering their subscribers “Unlimited Streaming” of movies and TV shows “on their PCs” — beginning today their “unlimited” DVD rental subscribers (tiers beginning at $8.99/month) may start streaming unlimited movies and TV shows.

The Netflix press release specifically refers to PCs as being the destination device for their unlimited streaming plan, but depending on the formats and encryption selected, a “PC” could mean any IP-based device connected to a television — an AppleTV or Mac Mini, Tivo, Slingbox or Microsoft Media Center. But, this information is conspicuously absent from the Netflix site which has me suspecting it’s a not-so spectacular Windows-only format.

The announcement of a “Hollywood-fed” full-feed pay-one-price video streaming service is huge, but only if the format is eventually transportable and compatible with mobile and wireline devices. If it is tied to Windows or restricted to a specific player, it’s just another proprietary footnote on the pathway to a useful service.

The number one loser in the market today due to this announcement has to be your local cable company. Cable companies will try to launch stream-based services, to keep their customers inside “The Garden” while they are out and about in Internet land, but will largely fail because cable doesn’t have the mind share when consumers start thinking of feeding their IP-based video devices.

If Comcast scrapes through the FCC hearing on their practice of degrading P2P services used by their subscribers unscathed, you can bet that they (and other operators) will start degrading all third-party streaming services on their networks unless direct per-sub revenue shares are negotiated.

None of the streaming deals are exclusive as far as I know, so as soon as someone in Hollywood starts to see a winning model emerge, they will start feeding the streaming channel directly. Netflix should enjoy their market success now, while it lasts — they will be in Blockbuster’s shoes in three to five years unless they develop some extreme competitive technical and marketplace advantage (highly unlikely).

In my recent post about not attending CES, I referenced an idea I have about a conference I’d love to attend, but doesn’t exist — sort of a “Whole Communications Show and Conference.” Later, I shared a little of my philosophy about media relationships and how devices and infrastructure play a facilitating role rather than a central role.

Media relationships are rare in today’s communications environment — In fact, media producers seem to have been actively trying to avoid them. The cable system operators and telcos have amplified this inclination, by locking media and communications products behind Walled Gardens.

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However, both audio and visual media have reached the point where their consumable and broadcast formats are universally available on one hand and universally usable on the other. This optimal state enables the media products to escape proprietary devices and networks and exist wherever the format is understood.

The recording industry has been very slow to adapt to this development and the motion picture and television industries appear to be a little more cognizant about their future, but seem to be hesitating when it comes to fully embracing change.

There are several high-profile examples of television networks developing Windows-only media download services and film studios still encourage the formation of operator-based exclusive content deals.

Tethering media products artificially restricts media’s availability to consumers and conversely constricts a consumer’s access to media — this is why “Network Neutrality” is important. However, if media producers were truly invested in neutrality, they would be enthusiastically pursuing the formation of media relationships, and they aren’t — yet.

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Under the misnomer of “Convergence,” media producers have been sold on a vision of the future that advises them to adapt their existing products from one old media device or infrastructure onto another old media device or infrastructure.

The “Triple Play” concept invented by the incumbent infrastructure operators is a perfect example of the linear thinking and tunnel vision behind “New Media”.

Media producers are best to forget about Triple Plays and start conceptualizing media products for features that exist across platforms and networks — there are no more televisions or stereos, there are players.

The days of remonetizing assets across and upon new platforms are also over, as demonstrated by the fact that everyone has re-encoded their music collections for use upon audio players — it’s only a matter of time before consumers start re-encoding their film and television collections for use upon video players.

“Mobile Video”, “Mobile Web” and “Mobile Commerce” do not exist — short of operators obfuscating access to their platform to inflate the size of their Walled Garden. There will be no logical reason why IP video, web or commerce can’t exist natively within a mobile environment as it does on any other Internet-connected device.

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There are a couple dozen media industry conferences produced worldwide. Most have been around for decades, begun as their respective industries took shape. Until the 90s, most of the media industries were segmented along proprietary infrastructure — For example, cable television shows were all about the newest set top box, largest head ends and widest coax cable and mobile telephony shows were focused on how to deliver more voice calls, of a higher quality through a matrix of smarter cell towers from smaller portable telephones.

As the Internet gained users and growth, an avalanche of digital media applications were tacked onto the formerly-proprietary networks and devices courtesy of IP-inspired technologies. The trade shows however, remained very linear in their focus. Even their “New Media” context was all about identifying and segmenting off the newest digital services within their old, proprietary business models.

I believe there will always be a need for shows for device manufacturers, for media producers and game developers to meet separately amongst others in their field to formulate standards, discuss best practices and whatnot.

Infrastructure operators across platforms need to begin thinking of meeting together at a large IP Network shindig (less NetWorld + Interop, more outward-facing) or else become naked transport against their will. Whole Media will commoditize incumbent infrastructure into raw transport, they will need to become the best, most efficient transport they can to compete effectively in a Whole Media economy.

The Whole Communications Show will give media producers a place to spend a little time at the 50,000 foot level with device manufacturers and work on products that create media relationships independent of infrastructure and allow for license federation across devices — Whole Media.

Producers that ignore Whole Media will find their existing and planned business models and partnerships disrupted — and eventually, their assets outside of their control.

Consumers are quick to understand that they can move abandoned media wherever they desire with or without the producer’s participation. Whole Media is about grabbing hold of the media relationship with consumers and actively working with them to facilitate a relationship wherever it may go.

Whole Media is a relationship without segmentation — concerning products without boundaries.

I lied in my previous post. I said that I would be sharing some thoughts about my Whole Media Show and Conference concept, but I need to provide some background first.

During my GWH&A/Hallmark Interactive days, I came up with a diagram that went into a white paper I wrote about our Associative Media Platform architecture. This diagram eventually made it into our AMP patent application (USPTO 2005/0060640) — and with a few tweaks for the purposes of generalization, the diagram remains a useful aid in sharing my media relationship philosophy.

Anatomy of a Media Relationship

First and foremost, media is a relationship between a producer and a consumer (or subscriber). From a story shared around a fire 2000 years ago to a video shared over the Internet today — media is about a creator and a consumer — everything and everyone else facilitates this relationship.

Secondly, devices and infrastructure are commodities that are used in the formation and extension of media relationships. People do not purchase devices or subscribe to infrastructure services for the sake of owning a device or pleasure of viewing blinking LEDs. Devices enable consumers to retrieve, receive and enjoy media (and yes, also create media as producers) — computers, ipods, televisions, stereos and movie theaters are all devices. Infrastructure also enables consumers to retrieve, receive and enjoy media by providing a transport for media from the producer to the consumer’s device — CDs, DVDs, motion picture film, the Internet, FedEx trucks, and mobile data networks are all infrastructure.

From the Producer’s vantage, a deliberate conformation of media towards exclusive devices or a restricted availability upon infrastructure platforms can destroy the possibility of maintaining a consumer’s connection to media product across devices and/or infrastructure.

In an ideal media world, decisions and accommodations concerning the device and the infrastructure would not exist. Media would truly exist within a direct relationship with subscribers. Relationship constraints that affect the delivery and enjoyment of media products would be dynamically assessed and media products prepared for the subscriber’s environment.

- A consumer could begin watching a film at a theater with friends, leave early — continue to watch on a bus ride home on a mobile phone, and finish watching it on her television and yet use the media product within linear (or even non-linear) license boundaries set by the producer.

- A consumer could select whether he would pay “in-full” for their media products, pay “in-part” for his media products and either participate in promotions or agree to receive an advertising-based subsidy — or some dynamic mixture of the two within a-la carte purchases/opportunities and/or package subscriptions independent of delivery.

A consumer would have the ultimate control over her device preferences and pay her infrastructure providers of choice for the utility of packet/cell/frame distribution.

Subscriber identity would be liberated from the infrastructure operators and devices (IMEI/ESN, MAC, IP) and instead be released to subscribers at the application layer. Identity would be utilized within media use, rather than connectivity status or device ownership.

The media marketplace (and industry as a whole) is broken. The media producers’ adherence (or possibly obligation) to the kings of outmoded infrastructure has precluded their monetized (modeled) inclusion within and upon new infrastructure as they evolve.

Media producers should be leading the evolution of availability, sustainability and accountability. Media should be exciting for consumers not an invitation to litigation.

If you read a lot of blogs, you have been inundated by pixel-to-pixel coverage of the annual gadgetfest happening right now in overpriced and highly annoying Las Vegas.

A couple my CES badges from years past

When I started attending CES, a show created and managed by the consumers electronics manufacturers association (CEA), it was largely a “Buyer’s Show” produced so retailers and integrators could hang out near shouts of “WHEEL OF FORTUNE” and do some deals that would affect what the general public would find in their local stores for the next calendar year.

As the years went on, the number of retailers shrank as Walmart square footage grew — and in 2008, the majority of electronics are purchased in “Big Box” stores like Best Buy and Circuit City. The content industry changed too — as the digital and Internet-delivered media avalanche landed quicker than you could say “ubiquity”.

There will always be a room full of neon tube lit Ferraris and their 400 speakers at CES but virtually every other consumer electronic category has evolved to the point where you wouldn’t recognize them as they are now, fifteen years ago — let alone four decades ago when CES began.

The CES of today attracts a very different crowd than the CES I remember. The quickest growing classes of attendee fall within the prosumer and fanboy group. (the bleeding edge of early adopters who want to own or “review” the latest and greatest toys).

Is CES at the crossroads of turning into a direct-market show, where the retailer and integrator filters are removed from the value chain? Is it morphing into a new entity all together like Comdex evolved from PCs to Internet (before imploding) and NAB has survived and stayed relevant from RF through the inclusion of Cable and now IP.

I don’t think CES or NAB or any of the other shows quite represent what I’d like to see in a Media-Communications-Content-Electronics show today — looking forward to a “Whole Communications Show and Conference” sometime in the future.

Update: My next post will share some ideas I have on what the “Whole Communications Show and Conference” would be like.

I haven’t flown much this last year and a half, but the thing that always annoyed me about the Denver airport was the lack of free Internet access — Inside the Red Carpet Club, or outside in the main terminal areas.

I was a United 1K and Red Carpet Club member until the beginning of this year — I travelled domestically and internationally a ton, so I spent a bunch of time in the DEN Red Carpet Club and in the terminals.

Nothing annoyed me more than being in a lounge I was paying for already, and being asked for my credit card so I could check my email and do other assorted things — especially while the other Star Alliance partners and other large international Airlines rarely charge for Wi-Fi access in their lounges.

Denver International Airport officially announced that they were no longer charging for their Internet access, and have experienced a 10x increase in users since it went free. Travel is now just a little less painful for all of us in Colorado who fly with a computer, iPhone or LocationFree TV.

I seem to remember the Daily Camera article (I am locked out of the Daily Camera website and need an account now?) quoting a DEN spokesperson saying that they went free because it would allow the airport to better serve their customers and they wanted to be a leading-edge airport.

Maybe this statistic expressing a 10x growth in users will assist United and other US carriers find a more helpful approach to providing Internet access to their lounge membership. Maybe this news will assist other airports in freeing the Wi-Fi hostages in airport lounges. Only time will tell.