Signposts to a Video Future

Sometimes I get frustrated by surveys and research because they never seem to make the distinction between things that are correlated and things that are causal.  The example today is some new research on teen mobile behavior.  It lists all the usual things; they watch the least TV, they use mobile video the most, the use social networking the most, they SMS instead of calling.  All of this is implied as the new sweeping change in the market.  As these youth age, their habits become the market.  TV is toast, and so is voice.  Well, I think this is a vast oversimplification.

Babies do things different from adults too, but just because they have different behavioral norms they don’t necessarily keep cooing and batting mobiles or sleeping in cribs as they age.  People’s role in life, the social framework they inhabit, sets their basic patterns of behavior.  If you look at “youth-in-transition”, the people who have left school, entered a stable relationship, etc. what you see is an almost immediate shift in focus away from a hide-from-supervision model.  Nobody is going to yell at you in your own home (well, perhaps your partner).  Yes, it’s true that many still indulge in some avoidance of supervision or surveillance but it’s not the single driving force for most.  The best example is that I’m unable to find any statistically reliable indication that young people who start a family today are any less likely to have a TV and use traditional multi-channel TV resources than those who started one ten years ago.

The net of this is that youth is different primarily because youth isn’t adult, isn’t personally responsible.  Many of the doomsday scenarios being painted, and many of the radical behavioral shifts being postulated, are simply not going to be as dramatic as most seem to think.

The Hulu story is perhaps a poster child for this.  Hulu was hailed by many (most, in the media) as the harbinger of the new age of video, where television is relegated to homes for the aged and everyone chuckles over “I Love Lucy” reruns because currently created content has moved to a new online form.  But now it’s pretty clear that Hulu is on the block, and the question is why.

One possibility is that it’s not making money.  OTT in-video advertising rates are about 3% of TV commercial rates, and advertisers seem to be more interested in using online targeting to reduce their costs than to engage their prospects better.  The other possibility raised today is that it’s being too successful.  The theory is that the owners of the Hulu JV (Disney, Comcast, News Corp) have a major disagreement on whether the service is undermining paid channelized TV services.

Speaking of tensions of mission, Alcatel-Lucent has announced something that’s designed to take the inherent contradictions out of in-home or hospitality broadband.  Right now the practice is to deploy WiFi in these locations and tap WiFi to unload the wireless network.  Femtocells have always been the alternative; an operator would instead site femtos in the home and in cafes and airports, and these would give operators their offload without creating a need to support devices that can jump onto any hotspot and thus escape operator control.  The theory I’ve been hearing is that femtos would also push back against players like Apple and Google who are trying to get more control of the mobile market, and possibly even of mobile services, by limiting operator subsidies to devices that are 3/4G only.  If that’s the idea, it’s dead on arrival in my view.  There’s no way that operators can make appliance guys, particularly Apple, blink on this one.  But there is a way to make the operator’s services more valuable by creating a 3/4G conduit that works even in the home.  The trick is to figure out how to make all that happen without making the user pay for femto airtime, and so far that’s been an issue for operators.  The Alcatel-Lucent/Broadcom reference design for femtos is a good step for operators if they’re willing to accept the framework in which femtos can succeed—they’re a captive-but-free alternative to WiFi.

Some sort of offload is important for wireless video, obviously, particularly given that tablets are already according to some research consuming more video per device than PCs, on the average.  Having both options available is smart, providing the buyers are willing to take the consequences either way.



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