Tim Bourne

BT Results Analysis: Stuck Between Rock And Hard Place
Poor old BT. Now that it’s reached a settlement with OfCom that allows it to keep retail and wholesale arms under one, some would say, severely stretched umbrella, commentators emerge from cover and say it might be better if it’d spit into two (or more) parts. The cost of Openreach has been put at £70m so far and in terms of efficiency in the UK telecoms market this could well be an ongoing sore.
BT has announced an IPTV offer for the retail market that some say offers too little too late. Early adopters of Digital TV are, in the main, already committed to Sky, who will look to rapidly integrate an Easynet download capability in an attempt to beat off the challenges from BT and a combined resurgent UK cable monolith formed by Telewest and NTL. The remnants of the consumer markets’ move to digital TV that BT will attract, are likely to be those less inclined to convert to a pay TV proposition, and they’re likely to be operating with tighter disposable incomes than those who have already left analogue TV behind.
Sky’s upcoming purchase of Easynet adds considerably to the pressure on BT.
Major Telcos in Europe have, by and large, a coherent mobile strategy and BT’s deal with Vodaphone is viewed as little more than a stop gap.
Where does this leave BT?
Interestingly enough, Telefonica’s bid valuation of O2 put the value of the former Cellnet constituent of BT above that of the remainder of the UK’s juggernaut Telco- perhaps BT Group could be of interest to another global suitor?
At present there’s a danger that not only will wholesale be delivering utility-style performance but that retail may be moving into a period of decline and could it be that the future of BT is again up for a re-evaluation by it’s major stakeholders?
14 November, 2005
BBC ‘FreeSat’, Looking Even Less Likely
As reported here at the beginning of the week there seems to be a real danger of the BBC’s non-subscription card free alternative to Sky’s Freesat offering falling at the first fence.
While the BBC cosies up to Sky to help make everyone covet a shiny new High Definition display and the services that go with it, it’s reported in Broadcast that the companies who will manufacture the receivers have no specification to work too.
If a specification isn’t nailed down in the next few months, it’ll be 2007 before the boxes hit the shops. By then there could be considerable consumer resistance, with buyers prefering to wait to see what happens with any new high-quality domestic standard, and the makers of the boxes moving to newer higher tech, bigger margin products.
In short, there’s a danger that the boat may be missed.
A raft of HD services across Europe is likely to eat up scarce capacity on the high-power satellites that beam the programmes down to earth, making any system that duplicates services across platforms more expensive.
Add to all of the above the challenge of creating a clear marketing and installation message, and I can see that there could well be people in the BBC who would rather that their careers didn’t get blighted by a potential fiasco.
The BBC could be minded too by OFCOM’s view that the burdens of switching to digital delivery should not fall disproportionately on the dear old ‘beeb’. Unless priorities change, James Murdoch can relax on the BSkyb extra terrestrial UK monopoly for a bit longer.
But will the public gain too?
11 November, 2005
HD, Or The Lack Of It, Could Hit UK Commercial Broadcasters
Following the BBC confirmation of High Definition Television (HD) trials for 2006, all of a sudden it feels like there’s a plethora of High Definition services and trials in the UK next year.
At an event held in London earlier in the week, under the auspices of the Royal Television Society, Pat Younge from Discovery USA provided news of his experiences. The bad news for commercial UK broadcasters is it costs more; doesn’t bring any extra revenue from advertisers; and it doesn’t increase viewing hours … but if you don’t have it, viewers will seek it out and they’ll end up watching you competitors.
The BBC is, as usual, unwilling to be left behind in new developments. With the expectation of World Cup Soccer in High Def on D-Sat (Digital Satellite) next year, the UK commercial broadcasters, ITV; Channel Four; and Five need to be on HD, but will try and ride on the BBC’s coat tails.
Speaking at the same event, Richard Freudenstein, CEO, BSkyB, was careful not to mention what the monthly subscription will be for HD on Sky when it launches. He spent his time talking up the platforms’ HD bouquet that will include Sky One, sports and movies with an HD Sky Plus box and plenty of storage capacity.
DTT (Digital Terrestrial TV) in France (quaintly abbreviated in French as ‘TNT’) will be MPEG 4 capable and is HD-ready from go, but finding capacity on the MPEG 2 Freeview platform in the UK is going to be more of a challenge. The BBC’s Jana Bennett, Director of Television is tasked with making the UK trials a success and wants to see the offering across all platforms. She hopes that, as well as cable and satellite, broadband will be a route into the home.
Confusion still reigns
Although the industry know they must go to HD, it’s clear that they’re far from having a strong hold over it. From listen to the snippets of conversation in the halls before and after the main event, it’s clear that there also remains broadcast industry confusion over the strengths of the various picture standards. This was given away with phrases like “I think 1080 refers to the number of lines” coming from the lips of one ‘expert.’
The equipment people have to buy for their homes is still an area of confusion, not helped by the next-gen DVD industry not agreeing their standard (Blu-ray, HD-DVD).
Once they do and this combines with the widely-predicted, continuing reduction in price, those exciting big displays labeled ‘HD-ready’ will really start to fly off the shelves.
Until then it’s a case of buyer beware – if you can resist the fantastic picture.
10 November, 2005
Is Mobile TV Currently Just A Big ‘Love In’?
The BBC needs to move fast to create suitable partnerships to be able to ride the new wave of ‘TV on the go’. That’s my conclusion after attending a recent IIC event last week (that’s the International Institute Of Communications to you). There I can reveal I was drawn into what felt very much like a mobile content ‘love fest’.
Representatives from a diverse group of media industries including MTV and BT were prophesizing mobile TV is the saviour of TV. Trials in Europe have indicated that across the continent viewers can’t get enough of TV on a tiny little display on their phones and this isn’t just the ‘bite sized’ mobile episodes that commentators had been predicting. It appears that mobile TV is able to actually increase the number of hours that viewers consume, which many thought had peaked.
With this new form of TV, it is said ‘you no longer need to be a couch potato, you can be a potato anywhere’ so expect many hours of work to be lost to must watch TV phenomena like ‘I’m a celebrity’ and ‘Big Brother’.
Channel 4 New Media has recently announced the launch of a mobile TV channel dedicated to Channel 4 content on mobile phones. Sky is planning a 19 channel launch in conjunction with Vodaphone and an ITV mobile service has been announced.
The mobile manufactures need to provide the right interface with an easy to navigate EPG and the content needs to be held securely on the device it’s downloaded to minimise the potential for sharing.
All the big players have a keen interest in the success, from the handset makers, the telcos and of course, the content owners who will expect to negotiate a premium for their programming. The players are going to have to effectively perform a ‘land-grab’ to make sure that an ‘ipod’ like solution does not steal their planned-for bonanza.
Where though does a Public Service Broadcaster fit into this increasingly monetized market? The BBC has been looking at DAB technology providing ultra local TV, but this is unlikely to the drive young affluent consumers who are the usual early adopters of new gizmos.
We are consistantly drawn back to the same conclusion with Mobile TV. This content may be offered; handset makers can produce the equipment; consumers may dabble with it if it costs them nothing.
The still unanswered question is, will the consumer put their collective hands in their collective pockets to pay for it?
8 November, 2005
BBC ‘FreeSat’: Where’s The Service?
Much has been made of what have been reported as poor results at BskyB (Profits announced on Friday 4 Nov 05 saw a pre-tax rise of 13.6% to £200m), intense competition is given as the cause of the lower than hoped for growth in subscribers.
The competition is attributed to the steady increase in Freeview penetration but where is the much trumpeted BBC free satellite offering, they labeled FreeSat?
Speaking recently with an NDS insider it was brought to my attention that this new ‘platform’ could be something of an empty threat. This must, of course been judged through the knowledge that NDS is the TV conditional access subscriber technology company used by Bskyb.
Even bearing this in mind, we felt it was worth asking ourselves a few questions about how it would work, who would view it and what would be its purpose:
How would it work?
Most would consider a UK satellite rival needs to be positioned to use the same satellites as Sky services that’s Eurobird and Astra 2. If you move away from their orbital positions, you’re going to have to duplicate a whole load of services across two platforms with the expense that will entail.
Who would view it?
Presumably the target audience are those who want Freeview but aren’t currently served. Freeview coverage is growing steadily and a Satellite installation is always going to be more costly than a terrestrial one, so I reckon numbers here will be limited.
The other group that would be interested are the ‘churn’ which are now reported by Sky as around 11%. These are subscribers who are leaving their Bskyb packages – but they’re really already on the Sky Freesat as unless someone comes and takes away their Set- top-box and mini-dish. They’ll get many of the FTA (Free To Air) services like ITV3 that aren’t available on analogue terrestrial and, for a small charge, can obtain a viewing card that will allow them to view those encrypted services like Channel 5, Channel 4, ITV1 and ITV2.
So what’s the purpose?
It seems to me that one purpose of the BBC floating the idea of FreeSat is as a spoiler to Bskyb. To perhaps deter those at the margin from signing up and also to increase the traditional broadcasters negotiating position when speaking to Sky.
With the promise of Satellite delivered HDTV in 2006, the continuing growth of Sky+ and the strategic takeover of Easynet, Sky still looks to know where it’s going. Given time and with the right marketing by Sky, many ‘Free-viewers’ will trade up to a Sky package that fits their requirement.
Long term, as long as Bskyb retains its hunger for subscribers, and continues to secure content that viewers wish for, I’d back it against ITV and the cable companies, with or without a new BBC sponsored Satellite version of Freeview.
7 November, 2005
BBC iMP Review – A Naughty Little iMP
Despite so much current talk from the UK Telco’s and Sky on the magic that will provide an on demand broadcast TV proposition in the UK, tangible evidence of a working model beyond KiT in Hull and Homechoice is pretty sparse.
The one organisation that is taking it seriously and putting some of their money behind it (sorry, UK TV license payers money) is the dear old BBC.
Digital-Lifestytles has been keeping a close watch on iMP through each stage of its development from its initial announcement by Ashley Highfield at the Digital-Lifestyles theme day at IBC in 2003, through our uncovering that all of its content would be DRM protected back in Feb 2004, to the announcement of the trial, back in May this year.
I’ve been lucky enough to be one of the trialists for the iMP (that’s integrated media player not interactive as so many insist on calling it) and I can tell you it’s not at all bad. Viewing TV on a PC screen is not ideal and that has probably influenced the programmes I’ve chosen – largely factual and quiz. The BBC counters that, a ‘box’, is under development to port the output to your domestic telly and reminds us that it’s already possible to view the content on a selection of mobile devices.
Despite the somewhat limited selection of programmes, which I’m told is largely down to copyright issues, it seems a positive move for a public sector broadcaster actually providing a service and solving the ‘problem’ of letting you see a programme you forgot to record or you later discover is worth viewing.
The operation, as you’d expect from a Microsoft product is ‘workperson-like’ ,if rather un-exciting, but to all intents and purposes, to those with an always-on connection, downloading the content is free. The technology that allows programmes to be downloaded in faster than real time on a 2mb connection is a completely legal (I’m told) peer to peer application – everyone who is running the trial software, shares their content with other on the trial, without their having to do anything.
The built-in DRM expires the programmes after seven days which, when compared to the analogue world, I haven’t noticed happening on my VHS tapes. It’s been necessary to quell the agonies protested by the copyright owners.
The BBC is thinking beyond the present Windows-only solution. Speaking recently in London the BBC’s Project Director for iMP Ben Lavender reinforced the BBC philosophy of platform agnosticism and spoke of the desire to work on Apple and Linux solutions when DRM issues can be satisfactorily dealt with.
For commercial broadcasters there’s an over-riding issue to deal with, should they choose to get involved. How would they deal with the ease which you can move through spot advertising, remains to be seen but that’s an issue they’re’ going to have to face soon one way or another.
My verdict – I give it a thumbs up as long as a large enough library of content can be made available. For drama and the like, I’d want an easy method of outputting to the living room TV.
4 November, 2005