What will the “winning” video streaming model look like?

Last month, YouTube TV rolled out its “streaming TV” service in five major US cities. Just before that, Comcast and Hulu announced their “streaming TV” services to join an increasingly crowded marketplace with industry heavyweights like AT&T (DirecTV Now), Dish (Sling TV) and Sony (PlayStation Vue). Despite the hype and the big brand names, success isn’t guaranteed for any of these services.

All of these new product offerings are essentially taking the traditional pay TV model that has been around for decades and making it available via the internet at a lower cost than their traditional TV counterparts. For the most part, reactions to these services have been mixed at best, which begs the question: Why aren’t these services knocking it out of the park?

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The Fight for Today’s Video Consumer: How to thrive in a rapidly evolving industry

Today’s Video Consumer

Editor’s Note: This is the first of a three-part series on understanding the streaming video consumer. Be sure to bookmark FreshMR so you don’t miss an issue!

It wasn’t long ago when consumers had three choices for video consumption: free TV (using antennas), paid cable TV, and, if going with cable, whether to add a movie channel like HBO. There was little competition, little innovation and very few choices. What a difference a few years makes!

Those simple days are almost unrecognizable in today’s chaotic, cluttered video world.  Sure, consumers can still view local broadcasts over-the-air, but the insatiable appetite for content has dramatically increased our options. Having so many options can be overwhelming to customers but also confusing to the telecommunications and entertainment companies that provide and deliver content.

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Will content providers hold telecom carriers hostage?

Will content providers hold telecom carriers hostage?

A few weeks ago, I wrote a Point-Counterpoint article with my good friend, colleague and sparring partner, Paul Hartley, which focused on fast lanes, free lanes and net neutrality. Interestingly, this topic has become big news again—albeit with a very unexpected twist.

It came to light that Netflix has been downsampling or degrading the quality of the content it delivers to AT&T and Verizon networks (yet not to Sprint or T-Mobile), not because these carriers want Netflix to do so but rather because Netflix feels it is in its own best interest.

On the surface, this may appear counterintuitive. Why would Netflix want to deliver lower quality video to the two largest mobile carriers in the US? Their logic is interesting–Netflix believes that AT&T’s and Verizon’s business model, which allows for overage charges if customers exceed their data caps, will discourage customers from wanting to stream movies for fear that overages will kick in. T-Mobile and Sprint, for the most part, don’t assess overage charges when customers exceed their data allowance—rather they throttle down the network speed to limit how much additional data can be effectively downloaded.

There are valid arguments on both sides of whether it is better to throttle or charge for overages, and this is not what I intend to debate here (although Paul and I may take this up in a future Point-Counterpoint article). Rather, the fact that Netflix is even able to do this because it’s not bound by net neutrality rules raises a very important issue that needs to be acknowledged and addressed.

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Net Neutrality: Fast Lanes vs. Free Lanes

Telecom Showdown

Editor’s Note: This is round one of Point-Counterpoint, a new blog series that pits two feisty telecom experts against each other in the ultimate industry showdown. Let’s get ready to rumblllllllllllllle!

Americans’ thirst for streaming video and audio content is growing exponentially. Not long ago, one or two gigabytes of data were more than anyone could reasonably need from their phones. But as the options for streaming increase and the quality and speeds improve, the average smartphone user has started to pay close attention to data limits.

T-Mobile was the first major carrier to address data limit concerns with Binge On in November of last year. Binge On allows users to stream video from participating content providers without counting against data caps. Verizon followed in January of this year with a very different approach of getting content to subscribers’ devices: Its FreeBee data program allows content providers to sponsor specific data content so that sponsored data isn’t debited against the end user’s cap. Shortly thereafter, AT&T reintroduced unlimited data plans for customers who also subscribe to DirecTV services, reversing a five-year hiatus on AT&T unlimited data plans and joining several other carriers that offer unlimited data services.

It’s not clear the extent to which these zero-rating programs—or free lanes—benefit customers or are even allowable considering the FCC’s net neutrality rules. In this installment of Market Strategies’ Point-Counterpoint blog series, telecom experts Greg Mishkin and Paul Hartley debate both sides of this issue, demonstrating that there is not one “right” position.  Continue reading

A Race to the Bottom: Carriers Must Diversify To Thrive

A Race to the BottomHere we go again.

T-Mobile’s John Legere recently announced the latest in his “Un-carrier” program—a new plan that allows customers to upgrade their phones anytime, up to three times per year. This was followed by the Mobile Without Borders plan which extends T-Mobile’s coverage to Canada and Mexico. Un-carrier, Legere claims, is intended to force a change in the way that wireless carriers treat their customers. In this, there is no denying that the program has succeeded in forcing the industry to change. (See below for a timeline of the 11 Un-carrier moves Legere has implemented since March 2013.)

Every time T-Mobile makes one of these dramatic changes, the major competitors follow suit by coming up with their own response, which typically has involved creating some variation of T-Mobile’s offering. T-Mobile advocates point to this continual “upping of the ante” as demonstration of how Legere has differentiated T-Mobile from its competitors and how much these actions have improved the overall wireless communications landscape for the customer.

It would be difficult for anyone to objectively claim that T-Mobile’s Un-Carrier moves are not having significant impacts in the overall wireless marketplace. However, it can be debated whether these moves have improved the industry’s overall customer experience.

I contend that they have not.

Looking Back at T-Mobile’s Un-Carrier Moves

It should be noted that while provocative, the Un-Carrier moves are not always made on the offensive. Legere himself admits that the Mobile Without Borders plan was introduced as a defensive response to AT&T’s recent expansion into Mexico. Yet, even in this defensive mode, Legere is quick to point out that in true Un-Carrier fashion, Mobile Without Borders is provided without additional cost to the customer.

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Gimme 5: What to Expect from 5G Wireless Networks

Rumbles from La Rambla

If you are even remotely associated with the telecom and tech industries, you will know that this is the week of Mobile World Congress (MWC). No time for gazing at Sagrada Familia or long strolls on La Rambla—all attention in Barcelona will be on the latest developments in telecom, with keynotes from some of the biggest names in the industry, plenty of new smartphone launches and perhaps even the opportunity to test the odd smart car or two.

What makes the 2015 event particularly notable is that this is the year that fifth generation (5G) wireless network technology will really gather momentum. Both the Next Generation Mobile Network alliance and the European Commission are revealing the details of their respective 5G white papers, and major equipment manufacturers such as Ericsson, Huawei, Alcatel-Lucent and ZTE will all be discussing and demonstrating the results of their early forays into 5G. While the first commercial 5G networks are only anticipated to launch shortly before the 2020 Olympic Games in Tokyo, the next five years will undoubtedly witness a growing frenzy of development and standardization, and that frenzy is kicking off now.

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