Digital-Lifestyles

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ESPN To Acquire NASN
US television giant ESPN has just announced that it will be purchasing NASN, the only European channel dedicated to North American sports.
NASN is currently owned by Setanta, the company that first came into the UK conscious when it successfully bid for the broadcast rights for Premiership football, and more recently when they agreed to provide it to BT Vision yesterday.
ESPN are a serious powerhouse of sports video content and are expanding ever-further into related areas. Clearly this includes geographic expansion. “Growing our business in Europe is a key strategic initiative for us,” said Russell Wolff, managing director of ESPN International.
On the digital side, ESPN’s business include ESPNsoccernet, a leading English-language soccer news based in London; ESPN360 (Broadband); Mobile ESPN; ESPN on Demand; ESPN Interactive and ESPN PPV. We told you they were wide reaching didn’t we.
Setanta was a launch investor in NASN in October 2002 along with Vulcan European Media, which is owned by Microsoft co-founder Paul Allen. In June 2005, Vulcan sold out to Setanta which then sold a 50% interest to VC firm, Benchmark Capital Europe.
NASN
5 December, 2006
Five Download VoD Launches With CSI
UK Broadcaster Channel Five have launched their Five Download, Video on Demand (VoD), service with US series CSI. They’ve previously offered downloads of the car show, Fifth Gear.
The new service is offering straight CSI: Crime Scene Investigation; CSI: NY and CSI: Miami.
This isn’t Just-Another-VoD-Service (JAVS), as there’s some innovation in here. CSI fans are mad keen on the programme (so we understand) and understanding this, Five is offering the episodes seven days ahead of the TV broadcast date. Fans will pay a premium price for this £2.49 vs the usual £1.49 per episode. We suspect that once hooked on receiving the content early, fans using the service will have to continue paying to stay ahead.
Engaging in some mutual back slapping Jane Lighting, Five’s Chief Executive, said: “I’m delighted that we are launching the service with CSI enabling us to offer the highest quality content to viewers with a viewing window which exceeds anything currently in the marketplace,” to which Ted Riley, Executive Managing Director, International Content Distribution, Alliance Atlantis whooped “The first-ever CSI Franchise VoD service outside the U.S., is both a thrilling proposition for U.K. fans,” adding that it “heralds the roll-out of other new media opportunities for this fantastic franchise internationally.”
One of the challenges for this service, as it is with all others – they’re competing against the same content being available on file sharing networks near-instantly available after they’ve been shown in the US – yonks before they hits the UK. Fanatical fan’s will more than likely not wait for the legitimate source and go the file-sharing route. The fact that the programmes won’t cost them anything will be incidental.
Five will be charging either £1.49 or £2.49 per download which we think it pretty steep given the episodes are only available for 14 days and is restricted to one computer. If you’re impudent enough to try the content that you’ve paid for on another machine, you’ll be completely locked out of that content.
To use the service you’ll need to download and install the Five Download Manager and Player which has been provided to them by BT Media & Broadcast, but the base level technology is from Entriq. Entriq’s MediaSphere is used by other companies such as BT Vision and with download services.
As Five are using Microsoft’s DRM, the service is only available to those in the UK who run Windows XP or 2000 and browse through Microsoft Internet Explorer 6.0 and enable ActiveX. Users of Windows XP must use Windows Media Player 10 and 2K users must use Windows Media Player 9.
Microsoft has steadfastly not introduced their latest DRM on the Macintosh, so they’re excluded.
Those of you lucky/unlucky enough to not have the above, can still view the trailers (well we could on a Mac anyway).
Five download
13 October, 2006
BTPodshow: The How and Why
A few week back, BT confirmed that they have closely tied themselves with US podcast aggregator, PodShow, so closely in fact, that they’ve stuck BT at the front of PodShow domain to form BTPodShow.
We were at the launch of the service a few weeks ago and chatted to Gavin Patterson, group managing director, consumer division and group marketing, BT; Adam Curry, President and Co-founder, PodShow and Ron Bloom, CEO and Co-founder, PodShow. Strangely for the launch of a podcast network, we were the only ones there recording interviews.
Looking for the podcast interviews? They’ll be available in part two tomorrow.
Rather than just rattle off the news, we felt it was worthwhile digging a bit deeper and understand the How and Why of the deal.
What makes this interesting?
Quite a few reasons really. Not the least being that, showing a change of approach, BT aren’t making the service exclusive to only their network – their normal approach to try and encourage people to subscribe to their DSL service. BTPodShow will in fact be open to anyone in the UK.
This alone shows a major shift within BT that shouldn’t be underestimated. It demonstrates an understanding that, although they dominate broadband provision in the UK (with nearly 3m accounts of their own, without all of the BT Wholesale lines sold via other UK broadband providers), they can’t own the whole market.
Having acknowledged this, they’ve clearly decided that they just as well make some income from the people who don’t buy broadband from them.
Where does the income come from?
While the financials of the deals haven’t been disclosed. We understand that there will be a revenue share between the two parties, expected to mostly come from advertising income.
The PodShow side of the business is responsible for finding, maintaining and managing the relationships with the advertiser. At launch they reported that they had 40 global brands lined up to advertise on the network. If these are unique to the UK version, or are extension of relationship they already have with their previous site isn’t clear.
Why this deal. Why now? BTVision
We think a major reason is BT Vision, their soon to be launched ipTV service.
BT have recognised that the current fodder broadcast on TV, will not continue to satisfy the wants and desires of the public in the future. In the words of BT’s consumer division group managing director, Gavin Patterson’s words, “The trend to user-generated content, and social media networks is clear cut. We see ourselves as a distributor of content. What we anticipate is more people wanting get involved with creating content.”
To fill the gap left by the dissatisfaction with ‘normal TV’, they have to open a collection channel for the content to flow to them and then build a collection of User Generated Content (UCG). While they could build PodShow’s technology themselves, it’s clear that BT don’t want to miss out on this, wanting to get into this area quickly, as confirmed by the speed at which they put this deal together.
We wondered if the higher resolution video might not be put out on the Website, but reserved for BTVision, to which Patterson said, “The experience that people have over the Internet will not be sufficient for the TV space. I anticipate it will happen.”
The advantages for PodShow are obvious. If they export this idea to any other country, they’ll be able to hold BT up as their first partner, something that really can’t be beaten.
As BT have a near monopoly on broadband and land line provision in the UK they can expose BTPodShow to the 17m ‘customer relationships’ they have, not just to encourage people to go to BTPodShow to watch the content, where they’ll make income from advertising, but to encourage those same people to produce and upload content.
Moves like this cannot help but strengthen BT as a media brand in the mind of the public – especially the youth. Vital for their service growing in the future.
Continued in the concluding piece, covering the advantages for PodShow and the chances of success of the service.
5 October, 2006
Tiscali Take Over HomeChoice
HomeChoice have agreed to be taken over ISP Tiscali in exchange for 11.5% of their new owner.
The tenacity of HomeChoice has always impressed us. They’ve been going for years and have just refused to give up. Getting started in the days when Video on Demand meant asking to rent a video from your local video rental shop, they’ve been through quite a number of investment rounds, some so severe that the investors ended up with nothing.
Never hitting big numbers, the writing has been on the wall for them, what with Sky getting into broadband, NTL re-enlivining themselves with Virgin mobile and BT Vision on the horizon.
HomeChoice has been settled on around 45,000 subscribers for quite a while now as they’ve been restricted to operating within London and some areas to its north. They just haven’t had the investment available to unbundle anymore exchanges beyond the 145 they have to spread their service. Their original expansion was hampered by the huge cost BT used to charge them for the Visionstream service they needed to run the service.
The last murmur about HomeChoice was that Sky was casting their eye in their direction, but we suspect that this was floated by the company itself to try and flush potential suitors out of the wood work.
As to why Tiscali has bought them …
It’s likely that Tiscali feels they need to move fast to avoid becoming sidelined by the other companies putting themselves forward as the Big Boys in the ISP/IPTV/Phone market.
By buying HomeChoice they’ll start with something they can build on, rather than having to start from scratch, giving them a time advantage. This is made very real by gaining 145 unbundled exchanges within London taking Tiscali to a total of 330 country-wide.
Homechoice has also spent quite a lot of effort in the last year building up their content relationships, creating niche programming.
As to the backend iron that HomeChoice is using to power the VOD – it may be that is getting a bit long in the tooth these days.
Don’t forget Tiscali don’t actually have to put their hands in their pockets either, just swap stock.
HomeChoice
Tiscali
14 August, 2006
Music Industry Grouping Proposes Digital Age Copyright
“A wide music industry grouping representing the independent record industry, composers and songwriters, musicians and performers, music managers, music publishers and their collecting societies hosted a crucial round table meeting yesterday, chaired by the Smith Institute, to debate the creation of a progressive and innovative copyright framework that is fit for purpose in the digital age.”
Which is the official line anyway, whether it has any relevance to the real world is a mute point and potentially completely misunderstood.
After the “industry” round table, a press conference was held, with the following representatives: –
Adam Singer (Chief Executive MCPS PRS Alliance) (below right), Alison Wenham (Chairman, Chief Executive, AIM) Dave Rowntree (Drummer with Blur + Ailerons) Andy Heath (Managing Director 4AD Music, British Music Rights Board) David Ferguson (Chairman, British Academy of Composers & Songwriters) Doug D’Arcy (AIM Board, Managing Director Songlines) Horace Trubridge (Assistant General Secretary Musicians Union) Jazz Summers (Chairman Music Managers Forum, CoFounder Big Life Management)
A value recognition right
This is the whole premise of their argument. Anyone involved in the distribution of content (whether they are aware of it or not) should be considered part of the value chain and therefore subject to licensing constraints.
The Copyright Levy laws were designed for analogue, but digital changes everything, control has passed to other players (ISPs, mobile operators, iPods etc) rather than traditional channels with physical controls. So the intent is to license these distributors. This will of course require working with them, understanding their business models etc.
It’s all about a mechanism for creating a better working relationship with distribution channels.
The groups are already lobbying government to change the law so that these new distribution channels will now be considered actual distributors as the content is adding value to the distributor, therefore the industry should get a cut of the added value.
It’s estimated that £0.5 billion has been lost in license revenues due to illegal sharing. Current copyright law actually forbids copying a CD to iPod (or any other kind of digital copy).
They agree there is more work to do and they’ll publish the report in September including transcripts of discussions held yesterday morning.
These issues don’t just apply to the music industry and they’re gaining traction from other content industries and internationally.
Statistics are everything
One of the major stats used to justify their argument is that 60% of Internet traffic is file sharing, initially it was stated that this was “music sharing”, but this was changed to general sharing. There is a lot of P2P traffic and though a lot of it is probably music sharing, services such as Skype and other legal P2P services will also make up a good percentage.
They then utilise these figures that as so much traffic is P2P, users are signing up for broadband because of file sharing i.e. P2P is adding value and therefore attracting users and they want a cut of the added value.
It’s actually probably the other way around, people sign up for broadband for many reasons. Nowadays, because it’s given away free as a bundle with other services, but also because it’s cheaper than (or near enough the same price as) dial-up. Customers then find P2P is easy and therefore use it.
The margins on broadband are extremely low, Carphone Warehouse (CW) is actually losing money on every customer they sign-up, EVERY month (this will eventually change when they install their own kit in BT’s exchanges). They are buying market share. P2P doesn’t help their situation at all, they’d much rather not have users eating up all CW’s bandwidth which costs them lots of money.
Bulldog have just pulled out of the retail market and have decided to concentrate on the wholesale side and compete with BT Wholesale. Though part of this is that their parent Cable and Wireless (C&W) are trying to consolidate to fewer larger customers (i.e. broadband suppliers who then have lots of customers), part of the problem with having retail customers is you have to constantly upgrade your network to meet their growing bandwidth needs, and this gets very expensive very quickly.
With a wholesale customer base, they only need to provide a certain amount of bandwidth per customer to the retailer, who then has to provide connectivity elsewhere and meet the growing bandwidth requirement pains.
Retailers using BT Wholesale have very small margins, equating to maybe a few pounds per month to provide all the back-end services that customers demand.
Broadband to all
Broadband is becoming a commodity and it’s the value added services that will generate revenue, and what are the value add services? Licensed content, initially likely to be TV (as in IPTV), but other services will follow.
In France broadband is available for 18 Euros per month for 24Mb/s ADSL2+, this includes Internet access, basic TV channels and all you can eat national French dialing. Yes, the companies support P2P, not because they want to, but because customers demand it. The basic service will just about pay for itself, or even make a loss, but then once customers have the broadband in place, they buy premium content and that’s where revenue comes in.
This model is coming to the UK, BT’s broadband hub service is their first foray into an IP connected world, BT Vision (IPTV) is coming.
Stealth Tax
The music industry has gotten very bad press for suing consumers, so now they are trying to make the problem go away by taxing (licensing) the distribution channels and hiding the effect from users themselves.
The distribution channels would rather the traffic wasn’t on their networks in the first place, but are being put in a position (which could be driven through by law) where they have to pay for their users’ (mis)use of the network where margins are incredibly low to start with.
This means the channels will have to put up pricing (which means users notice) or absorb the costs themselves and they make even lower margins.
The music industry needs to rapidly have sensible discussions with the ISPs and other distribution channels to sort out the real economics of distribution or it’s likely a stealth tax will come into force which could kill the distribution industry in doing so, which wouldn’t benefit anybody.
13 July, 2006
BT Home Hub Examined
To date, most ADSL equipment that BT has put out has been pretty …. functional … or put another way, ugly. Their ethernet routers have been transposed from office equipment, and their USB kit, the Frog as it was known … well don’t get us started on that*.
This has all changed with their latest packaging of broadband. Released alongside this, the newly-announced BT WiFi Home Hub has been designed to seduce people into pulling their router out from it previous position in the study or under the stairs, and putting it in to their living space.
Why would they care about that? Well it’s important for the success of products like BT Vision, their autumn-release IPTV service, as the connection between the Home Hub and the BT Vision box currently has to be wired ethernet. Given most people don’t have their house cabled for ethernet, the Home Hub has to be located close to the main TV in the house, normally in the lounge. It also doesn’t hurt to have their new wireless-DECT VoIP phone handsets sitting in the main room in the house either.
It’s a looker
BT have clearly had the industrial designers on the case and what they’ve turned out is a bit of a looker.
Being white, you can’t but fail to be reminded of Apple (being that they own the colour white). It’s like a cross between a small, white, upstanding PS2 and an iPod, but lacking the curves of the iPod.
The BT VoIP handset, or BT Broadband Talk handset as they call it (sssh, don’t mentioned VoIP), sits in an integrated docking unit that is slots in the front of the base of the Home Hub.
What can you connect to it?
Apart from the 802.11G/B wireless connectivity, there’s six physical connectors tucked away at the back of the Home Hub.
There’s the connector that runs between the phone line and the box, a slot for you POTS phone, two ethernet connectors (one of these will be used for BT Vision) and two USB connectors.
One of these USB ports is intended for computers that don’t have ethernet ports on them (are there any of these still in circulation?) and the other is for an as-yet unannounced use.
One trick I feel they’ve missed is using the Hub as a print server, but discussing this with BT’s, they suggest that this is something that could be introduced later, via a software update.
Disco lights may drive you mad
The only issue we raised after spending a brief time with it was the usage indicator lights that sit at the top of the unit, which flicker whenever data passes through the box. Sadly, as yet, these can’t be turned off.
We’d imagine that while having these beauties flickering away may be a novelty initially, but long term, people are going to find it _really_ annoying, as they catch them out of the corner of their eye. Expect either the addition of some masking tape over them or a software update giving the option to kill them.
Over broadband software updates
Keeping equipment up to date is a expensive and risky business, especially if you need to get the customer involved.
Like their video phone handsets, the Home Hub can be updated remotely by BT over the broadband connection. This gives them a chance to provide new features in the future, or to fix an problems that they might find, without having to bother the subscriber.
Do you need a Home Hub?
If you want to carry on using the Internet as you have previously, then the short answer is no, _but_ if you want to use any of the new BT services like BT Vision or BT Homesafe, their home security system (more on this soon), then yes.
For BT Vision to work, the STB that comes with it has to be able to control the flow of data over the broadband connection, because frankly, getting TV to run over a 2Mb DSL connection is asking a lot of it. If little Johnny is sitting in the bedroom downloading goodness knows what, he’s going to have to have his connection throttled, which Dad is watching the Football on Saturday night.
* Thank the gods of USB that BT have finally dumped the USB-connected Frog that used to ship in previous version of their broadband offering. We found this an odious move purposely designed to limit the number of computers that connect to one. In our book, this was detrimental to the wider adoption of broadband in the UK.
23 June, 2006
BT Include OpenZone WiFi Minutes with Broadband Package Shakeup
BT have released a shake up of their home broadband offering.
As well as reducing the number of options available, they’re also boosting the packages to try and both get people to switch to them, as well as attempting to induce their current subscribers not to switch away.
Mirroring their phone call plans, BT have gone for the Option 1, 2 & 3.
250 minutes of BT OpenZone WiFi
Most of the offering isn’t that different – OK, they’re bundling Norton Antivirus and firewall – the big innovation is the inclusion of 250 minutes of BT OpenZone WiFi.
BT have done a clever thing here in providing WiFi minutes. People will come to realise that they can use WiFi when out and about … near a BT roaming point only of course.
This is of course only averaging 8 minutes a day – and we all know how quickly time on the Internet can disappear.
Once they get used to that behaviour, people will start to run out of the 250 minutes that are available over the month – and start to pay BT for extra minutes.
This is a very clear indication that the convergence of network access is now well underway.
Free VoIP calls to UK Landlines
All of the packages provide free evening and weekend calls to UK landline, and until Jan 07, free video calls. International calls are not discounted – at all, which we thought a bit shocking.
This is not just calls using the PC softphone, but using the new Hi Def phone handset. We’ll cover this in more detail soon.
As well as the Hi Def phones and BT softphone, calls can be made to other BT VoIP handsets, like the now available BT Broadband Talk Videophone 1000 and soon to be available 1000 video phones.
We specifically asked about linking to other VoIP services. With no shock, we heard that this wasn’t going to be supported ‘at launch’, and we suspect ever. Locking people in to the BT handsets will be a way to attempt to increase their subscribers, with BT subscribers encouraging their family and friends into having a compatible, ie BT handset.
Equipment
In an effort to try and get you to step up to the highest subscription, BT are using an increasing amount of equipment to induce you to be tempted every increasing monthly fees. They’re leveraging their ability to buy huge amounts of equipment and the discounts that brings to them.
The entry-level Option 1 customers will be provided, free of charge, with a BT Wired router; Option 2 brings the white BT Home Hub; Option 3 includes the Home Hub and VoIP/DECT handset, that they label the Hi-Def handset.
If you persist in opting for Option 1, you’re able to purchase the Home Hub at the additional cost of £30 – £25 if done online.
Costs
There’s a promotional offer on each of the packages of a reduced cost for the first six months of subscription.
Option 1 – £9.95 for six months, then £17.99/month
Option 2 – £14.99, then £22.99/month
Option 3 – £22.99, then £26.99/month
Learning a trick or two from the mobile business, contract length for the entry Option 1 is 18 months. The others are a more expected 12. Do you get the impression that they really don’t want you to go for the Option 1?
Options 2 & 3 are pretty much the same, except for the amount of data that can be downloaded by the subscriber – option 2 give 6Gb usage per month, Option 3 a more generous 40Gb. It’s unclear if BT Vision is used if this will be included in the usage.
23 June, 2006
Freeview TV Homes Exceed Analogue For First Time
We wouldn’t normally bore you with tales of how many more percent of the UK population have joined the Digital TV-owning army, but this one is a significant one.
For the first time, the number of households having the BBC-backed Free-to-Air service, Freeview, has exceeded their analogue cousins. Nearly 7.1m have Freeview and 6.4m are still analogue only.
Freeview will also be pretty pleased that for the third successive quarter their sales have exceeded the 1 million mark, achieving 1.2m between January and March, up 40% over the same period last year.
Digital satellite is still the Digital Daddy, with 7.7m homes subscribing to Sky and the remaining 645,000 receiving free-to-view satellite.
There would have been relief at the recently-merged UK cable companies when they saw that there’d been an increase in the number of subscribers. The gain for NTL is only 5,000 subscribers in real terms as the additional new now-digital 70,000 digital cable subscribers were laid off against the 65,000 analogue subscribers who switched. These figures relate to the pre-merged companies.
Interestingly there still around 500,000 analogue subscribers out of the 3.3m total cable subscriber-base. Changing these has got to be a priority if NTL want to start making the returns they need from subscribers.
TV over ADSL First
For the first time Ofcom has reported separate figures for TV over ADSL services. Currently this is only London-focused HomeChoice, but they will be joined in short order by other IPTV companies like BT Vision. HomeChoice gained at a rate of 21.4% over the same period in 2005, ending with 48,545 subscribers.
Breaking down Sky’s figures
There’s some interest to be had comparing Sky’s Q4, 2005 figures with Q1 2006 – a couple of surprises lie in there.
Churn (number of subscribers leaving the service) is up to 11.4% over 10.6% and ARPU (Average Revenue Per User) is down £5 to £392 from £397. This doesn’t sound like a lot until you look at it in terms of income loss – over £38m.
On the positive front there was a gain of 87,000 households, with multi-room households gain 84,000 and Sky+ users up 149,000, now hitting 1,430,000.
Additional TV Sets – Ongoing problems
Ofcom are estimating that 38% of Freeview sales are intended to secondary TV sets which will start to allay a lot of fears.
The big hurdle for the UK digital switch-over gang is the replacement of the non-primary TV set, the bedroom TV & video, little Johnny’s TV and the spare that the babysitter uses. When the analogue-broadcast lights go off is when these people start to yell.
Ofcom UK Digital TV Q1 2006 report (PDF)
8 June, 2006

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