Category: Geographic

NDS Threaten TiVo with DirecTV PVR

There won’t be much surprise to hear that the now Murdoch-controlled DirecTV is readying the launch it’s own PVR around Spring 2005, whose function mirrors TiVo. Added to this, NDS the creators of the rivals PVR, claim their unit will handle Pay Per View programming better – by charging for the content when it is watched, not recorded. This will give them the opportunity to speculatively tempt the viewer with lots of yummy content.

The divorce of DirecTV and TiVo has been long, protracted and painful to watch. Much like friends watching from the outside as a marriage crumbles, where everyone appears to know that it’s over, except the unhappy couple.

TiVo has already had experience of the Murdoch approach to their business, when the two ‘worked together’ to bring TiVo to the UK. It is sufficient to say that TiVo stopped selling their product in the UK after only selling 30,000 units. It’s likely that most of these, probably would’ve been brought directly from the US anyway.

The big problem for TiVo is that DirecTV is their largest single customer and it will seriously impact their business. We imagine that they’ve been expecting it since DirecTV sold its 55% stake in one lump and its vice chairman, Eddy Hartenstein, resigned from their board back in June this year.

When this news is combined with, in our view, the near suicidal idea that TiVo plan to ‘upgrade’ the software on their subscriber’s boxes to display popup banner ads when fast forwarding through the TV adverts, you have to think that TiVo is in serious trouble.

Times have changed, and what was once special about TiVo has now become commonplace, and sadly, they don’t appear to be able to add anything to their offering as magical as the original.

We’re dismayed to read in the news report that the new DirecTV device will not have the ability to skip through the adverts. While we’re not surprised that an integrated company like News Corporation want to stop their subscribers for skipping through a revenue stream, we’re saddened that a feature that was so much a selling point for the original PVR, is going to be withheld. We wonder what the reaction of the subscribers that currently have the TiVo box that will be ‘upgraded’ to the new system will be? Even if the reaction is bad and vocal, it’s highly lightly that this will be a mere blip in the media landscape stretching forward.

DirecTV
TiVo

i-mode UK Bound Via mmO2?

There has been some press speculation over the last day or so about mmO2 partnering with DoCoMo to bring their phone and content platform, i-mode, to the UK. Reuters reported that mmO2’s Chief Executive, Peter Erskine, had said last week that the company would decide by year-end on whether to introduce i-mode.

Things appear to have moved on, and this morning the Financial Times is more firm on the story, reporting that O2 will announce the deal next week. They say the service would start next year.

We spoke to mmO2 and their official comment was “the process is ongoing and we are still on schedule to announce before the end of the year”, so no big scoop for us there then. In conversation they did mentioned that the i-mode service has become more attractive over the years, since they last looked at it. Over that time the available range of handsets has increased significantly, it has driven up usage in the markets it has been deployed and the range of content available now for the platform has increased substantially.

[A brief interlude. Why is the company sometimes called mmO2 and other times O2? Let us clear up the confusion. mmO2 is the parent company that operates in a number of countries (UK, Ireland, etc). Its operating units in these countries are called O2. So, parent co=mmO2, local instance=O2.]

i-mode is a huge in Japan, where it has 42m users. Some even credit it with bringing the Internet to the youth of Japan. As home computer ownership previously wasn’t that large, the youth used their phone to get online.

It is already running in four European countries; Germany, France, Italy and Spain, although the take up figures haven’t been what you would call stunning, running at around 4m over the continent. The UK is a big gap in DoCoMo’s European coverage.

For content producers, the most interesting thing about i-mode is its content publishing model. Compared with other mobile platforms in the UK who can take as much as 50-60% of payments made by consumers, i-mode takes significantly less – in the low double digits.

It’s deals like this that are highly likely to draw content to mmO2 – it’s not wholly surprising that content producers will be inclined to get the most income from their wares as possible.

Given the current fashion among 3G watchers is to think that the winners in 3G will be those with the strongest content, a generous share of the income to draw in content owners could be a very smart move by mmO2.

DoCoMo
mm02

Philips Sells Total Holding In Vivendi Universal

Royal Philips Electronics has sold its total holding of 32,265,561 shares in Paris-based conglomerate Vivendi Universal. The transaction, which closed yesterday, will provide Philips with proceeds of approximately 720 million euros, and will result in a non-taxable gain of approximately 300 million euros in the fourth quarter. Prior to this transaction, Philips’ holding represented approximately 3 per cent of Vivendi Universal’s outstanding shares. Philips’s share prise rose 1.1 per cent after the announcement, while Vivendi shares fell 0.7 per cent.

The initial combination of the companies was believed to lead to the strengthening of all parties involved, including Philips and its shareholders, by creating a global powerhouse in entertainment and services in the new economy. Philips was a set-top box provider for Vivendi, with whom it supplied to Vivendi’s Canal+ division. Philips has not commented further on why it has sold all of its holdings

Vivendi Universal which began as a French civil engineering enterprise, grew to absorb the Universal entertainment conglomerate in the US and then sold or spun off most of its media acquisitions after investors lost patience over rising debts. Restructuring since 2002 has reduced Vivendi to a much smaller, but significant French film, television and telecommunications operator. The company was expected to drop the ‘Universal’ part of its corporate name in 2003 after a deal that transferred its US film, theme park and cable television interests to a joint venture with NBC-owner General Electric.

In 2001, Vivendi Universal and Sony launched ‘Duet’, an alternative to Napster. The service sported monitoring of what’s downloaded and listened to, better sound quality, a subscription service, and pay-per-listen options. ‘We hope to license 50 per cent of the world’s music’, said a company representative. To kick-start the venture, Vivendi Universal purchased MP3.com for about $350 million, a move that followed Napster’s deal with media conglomerate Bertelsmann. Both deals marked a critical moment of détente and an admission that the labels needed the help of their one-time enemies, as they got serious about online distribution. Unfortunately, that dream failed too.

Philips
Vivendi Universal

MPAA Judge Finds ‘bulldozer’ approach ‘improper’

Last week, members of the Motion Picture Association of America (MPAA) filed 11 lawsuits against hundreds of people they accused of using file-sharing networks to share infringing copies of movies. However, the Federal Judge ruled the ‘bulldozer’ approach improper, ordering that the case should be put on hold for all but one of the defendants.

The move by the MPAA to group defendants into arbitrarily-joined actions was probably thought of as a ‘neat’ and easy way to get the message across to other US citizens participating in file sharing. ‘Bulk’ suing could also save a heck of a lot of paper shuffling and administration work.

The MPAA sued groups of “Does” (John Doe) identified by numerical IP address and requested the discovery of names from the users’ Internet Service Providers (ISPs). However, Judge William Alsup ruled that because claims against the 12 defendants were unrelated, suing them together into one big case was improper. “Such joinder may be an attempt to circumvent the filing fees by grouping defendants into arbitrarily-joined actions but it could nonetheless appear improper under Rule 20,” the order states.

The Electronic Frontier Foundation (EFF) has filed friend-of-the-court briefs, objecting to similar misjoinder in many of the cases filed by the Recording Industry Association of America (RIAA) against alleged infringers.

“This decision helps to give due process rights to the Internet users accused of infringement,” said EFF Staff Attorney Wendy Seltzer. “Lumping them together makes it more difficult for everyone to defend against these claims.” EFF is also concerned about the movie studios’ failure to produce evidence of infringement against even Doe #1 in this case.

In a separate case, Warner Brothers Entertainment has secured a $309,600 judgement against an actor for allegedly making promotional ‘screener’ copies of ‘The Last Samurai’ and ‘Mystic River’ available for bootleg DVD copying and unauthorised Internet trading.

Carmine Caridi, a former recurring actor on ‘NYPD Blue,’ is accused of copyright infringement and is facing a default judgement of $150,000 per film and $9,600 in attorney fees. Caridi and co-defendant Russell Sprague were caught because the screeners were individually watermarked for each recipient.

According to Warner Brothers, Carmine Caridi, as a member of the Academy of Motion Picture Arts & Sciences, signed an agreement before he received the 2003 awards season screeners promising not to circulate them. It is believed that he immediately sent the VHS screeners to another address where they were copied onto DVD and converted to digital files that were posted on the Internet.

JFK Reloaded Described as ‘Despicable’

JFK ReloadedOn the eve of the 41st anniversary of John F Kennedy’s murder, a dramatic new ‘docu-game’ brought the tragic assassination by Lee Harvey Oswald to life for a whole new generation. However, a spokesman for the president’s brother, Senator Edward Kennedy, called the game ‘despicable’, but has not commented on whether the family was taking any action to stop the game’s release.

JFKReloaded ($9.99, ~€7.70, ~£5.40), recreates the last few moments of the President’s life and challenges participants to help disprove any conspiracy theory by recreating the three shots that Lee Harvey Oswald made from the infamous sixth floor of the Dallas book depository.

The game promises to accurately recreate the surroundings and events of 22nd November 1963 in downtown Dallas, using information from the Warren Commission report, and has taken a ten-man team seven months to research and six months to program. The reconstruction enables players to examine the challenges that faced Oswald.

‘This new form of interactive entertainment brings history to life and will stimulate a younger generation of players to take an interest in this fascinating episode of American history,’ commented Kirk Ewing, managing director of Traffic and the creator of JFKReloaded. ‘We’ve created the game in the belief that Oswald was the only person that fired the shots on that day, although this recreation proves how immensely difficult his task was.’

Regardless of the continued passion in the US surrounding the death of one of America’s greatest heroes, Traffic is determined to promote the title respectfully whilst encouraging as many people to play the game as possible. The company has also offered an incentive of up to $100,000 (~€77,000 ~£54,000) for the first person to most accurately recreate the three shots made by Lee Harvey Oswald. A cash reward of this size is the first of its type for a game.

“We genuinely believe that if we get enough people playing the game we’ll be able to disprove once and for all any notion that someone else was involved in the assassination. The computer ballistics model says it’s possible, but players will discover just how hard it is to place those three bullets in exactly the same way that Oswald did.” The site goes live at midnight on the 22nd November 2004 and will run for 3 months.

It’s more than likely that this game will raise the issue in the press of video games containing violence, as was last seen with ‘Manhunt’. Last time the press got the wrong end of the stick and blamed a killer’s obsession with the violent computer game ‘Manhunt’ for the death of a schoolboy, although it actually turned out that the game was present in the victim’s home, not the killer’s. Some are wondering if the release of JFK game around the anniversary of the incident was a calculated move by the development company, Traffic, after watching the sales of Manhunt go through the roof during the last press frenzy.

European Broadband Pricing Drops 23% in 2004

A new report, the European Broadband Pricing Report, researched by Quantum Web and distributed by BroadGroup, shows European broadband pricing (of speeds between 0.5Mbps and 2Mbps) dropping since January 2004 by around 23%. The numbers of supplier and packages available have increased considerably over this period with 0.5Mbps tariffs availability increasing 75%.

455 tariffs offered by 109 operators over 36 European countries were examined over the first three quarters of this year (2004).

At the higher speeds, 4Mbps and 8Mbps the price reductions have been less dramatic. Clearly at this premium-end of the market there is little competition and in their words “[leaves] more room for price elasticity for content providers.”

It’s interesting to note that non-DSL products make up 20% of the European market.
BroadGroup European Broadband Pricing Q3 2004 Graph
We find it surprising that, given the intense competition at the 0.5Mbps level, pricing hasn’t come down more than at 1 and 2Mbps levels. We wonder if this is due to the majority of connections being provided by wholesalers to markets, such as BT Wholesale in the UK. Without competition at this level, these wholesalers (normally the incumbent telco) don’t have much impetus to lower their prices dramatically, just gradually, to keep their telecoms regulator from getting angry.

When we asked the BroadGroup about pricing across the surveyed countries they said there was a considerable difference. Generally, the previous Eastern European counties have lower pricing, as do many of the Scandinavian countries. To us this points towards major fibre optic network runs equalling lower prices, as most of the former Eastern Europe frog leapt mainland Europe by replacing their antiquated phone system with fibre. Scandinavia is well known for their wisdom in laying copious amount of fibre. We suggest that those trying to make their countries competitive both in terms of the obvious – IT, and the less obvious – digital entertainment networks, pay attention.

BroadGroup – Broadband Pricing in Europe Q3 2004

Europeans Devote 20% of Media Activity to the Internet

There has been a rise in the amount of time people spend online, with the Internet now accounting for 20% of Europeans’ media consumption, according to research commissioned by the European Interactive Advertising Association (EIAA).

The Internet now represents 20% of European’s media consumption, above magazines (8%) and newspapers (11%) but below radio (30%) and TV (35%), according to the research.

The study was undertaken via phone interviews with 7,000 respondents in the UK, Germany, France, Spain, Italy and the Nordic countries between September and October 2004. Five hundred were interviewed in both Belgium and the Netherlands. The study was designed to quantify how people allocate their time across media in Europe and to gauge consumer perceptions of the Internet and the role it plays within their media selection.

The EIAA is a pan-European trade organisation for sellers of interactive media. Members are currently AdLINK Internet Media AG, AOL Europe, LYCOS Europe, MSN International, Tiscali, T-Online International and Yahoo! Europe.

Issues:

According to the survey, the Internet now accounts for 20% of European’s media consumption, up from 10% in December 2003. Almost half of all Europeans are now using the Internet with penetration rates ranging from 74% (Sweden) to 34% (Spain).

At 35%, TV continues to represent the lion’s share of the average European’s media consumption, followed by radio (30%), the Internet (20%), newspapers (11%) and magazines (8%).

Respondents generally perceived the Internet as a more pro-active media. Sixty-one per cent viewed it as a medium to “keep you ahead of the game” and half cited the Internet as their favourite source of information. Seventy per cent rated the Internet as “the best place to get what you want when you want it” and 80% described it as the “best time-efficient medium”.

These results compare with a separate study by the Online Publishers Association (OPA) in New York which showed that, for the first time in the US, content such as information services or entertainment became “the leading online activity as measured by share of time spent online”. Content surpassed other online activities such as communications, commerce and search.

Positions:

“We are witnessing a shift in how consumers are using the Web as broadband households continue to grow. Clearly, it is much more than a tool; it is a primary source of information, entertainment and fun,” said Michael Zimbalist, President of the Online Publishers Association.

“The Internet is now a rival to other media and with ‘always on’ and mobile technologies emerging, we can only expect this trend to continue,” said Michael Kleindl, Chairman of the EIAA.

The number of Dutch broadband connections (cable and ADSL) increased from 2.53 million on 30 June 2004 to 2.85 million on 30 September 2004. The penetration of broadband connections in Dutch households reached 40.4 percent on 30 September 2004 compared to 22.9 percent on 30 September 2003. ADSL increased market share to 54.7 percent and penetration per household to 22.1 percent. Cable continues monthly additions over 100,000, thanks to @home with 49,000 new customers. @home boosted its customer base to 409,000 and passed chello, while Wanadoo saw a seasonal dip in quarterly growth, continuing to stay the largest broadband ISP with 429,000. Het Net doubled net additions to 66,000, passing the 200,000 milestone in Q3 and becoming the fifth largest broadband ISP with 204,000 subscribers, behind chello with 379,600 and Planet Internet with 376,000.

European Interactive Advertising Association

Sky Active re-launches with Significant Upgrade

The Sky Active service, which has been around for the last five years, has this week had a considerable redesign. Originally a text-based approach, the new version is significantly richer and takes is into a magazine style. We spoke to Sky to get the details.

Sky Active Front pageThe opening page (example right) has a video background running on the right and a small number of highlighted options on the left hand side. The layout and links on this page change throughout the day, to match the audience that they think will be looking at it. Currently changing twice it will feature items like horoscopes and lifestyles links during the day and betting and dating in the evening.

Sky Active Content pageAnother way to access the content is via a mosaic layout (example right). This shows a checkerboard of 16 video pieces running on loops. As the viewer uses their remote control to navigate between the videos, bring it in to focus, the audio channel associated with that video loop plays. This short-form video programming is designed to draw people in to the interactive content that lies behind and on pressing the Select key takes them to the content.

It’s clear that Sky is putting more resources (read money) into this service. There is a full time editorial team of ten people working on it on a day-to-day basis and with the video running, considerably more satellite bandwidth is required to run the video. Sixty people across the organisation have been involved with the re-launching of the site – twenty of them within the design team.

Sky Active is creating much of the content in-house, as well as commissioning other pieces externally. The content that is being created is unique to Sky Active.

Clearly Sky is making money from their interactive service, and want to make sure that they are ahead of the game (pun intended) as other rival services are launched.

Sky Active

MPAA to pursue film file-sharers

The Motion Picture Association of America (MPAA) announced it would follow in the footsteps of the recording industry and legally pursue people who swap pirated copies of films over the Internet.

Dan Glickman, head of the MPAA, said legal action would be taken against “hundreds of people” seeking damages of up to $30,000 (~€23,000, ~£16,000) per shared film.

“This was not an easy decision, but it must be done now before illegal online file-sharing of movies spins out of control,” said Glickman. “Illegal movie trafficking represents the greatest threat to the economic basis of movie-making in its 110-year history.”

The crackdown will target individuals who deal in illegally copied cinema products on file-swapping networks, as well as the pirates themselves.

The MPAA claims the US film industry loses more than $3bn (~€2.3Bn, ~£1.6bn) every year in potential global revenue because of piracy. But Glickman said the figure did not take into account the losses from thousands of illegal online downloads that were swapped every day.

The MPAA draws particular attention to the popular file-sharing application, BitTorrent. Written by Bram Cohen, which is designed to offer the files as fragments for faster, easier transfer from peer-to-peer (P2P). One destination website for Bit Torrent fans, Suprnova.org, offers users free downloads of thousands of movies, TV shows, music, software and games files. The site is run on donations and some website advertising.

A parallel initiative sees the MPAA hoping that new software will encourage parents to identify their children as “file-sharing felons”. The software, designed to identify and removal of potentially infringing material and P2P applications on the PC, is part of the MPAA’s war on file sharing and will be released for free by the MPAA at a later date.

Online music file sharing is measured in billions of files downloaded, but the MPAA says that under 150,000 movie titles are traded each day in the US on file sharing services.

MPAA
www.suprnova.org

Ofcom to BT: Equivalence or else

After a long period of deliberation Ofcom, the UK regulator, has come to its conclusion on the Strategic Review of Telecommunications Phase 2 (SRT 2 to those in the know). It won’t be forcing the split of BT Retail and BT Wholesale.

For a very long time, most companies in the UK telecoms market have bemoaned BT Retail getting a better deal from BT Wholesale (they own the network) than they were able to achieve. In the competitor’s eyes, the market hasn’t been balanced. Many felt that BT has been expert in ‘playing’ the regulator, especially Ofcom’s previous rendition, OfTel – only making changes just before they were forced.

In SRT 2 Ofcom investigated three options, Full deregulation; Enterprise Act investigation; BT to deliver real equality of access. They’ve come down on the side of the latter, in their words

“Ofcom calls on BT to provide prompt and clear proposals which will achieve these behavioural changes and bring about the level of confidence required.”

and if equality isn’t achieved, they threaten to use the second; an investigation into the market under the Enterprise Act 2002, with the potential for a subsequent referral to the Competition Commission.

In theory, when equal access to the network is given, the need for Local Loop Unbundling (LLU) to provide competing broadband services will be reduced.

When we spoke to Video Networks, the company behind the London-based IP VOD-services, they said the news today would “not impact their LLU plans”. EasyNet, a significant unbundler, didn’t get back to us before we went to press.

The SRT 2 is now open for public consultation until 3 February 2005.

It would appear that the threats from Christopher Bland, Chair of BT, in the Telegraph at the weekend that “No BT would equal No Broadband” were unnecessary.
Update: OfcomWatch comment