December 2008

There are a lot of good things to being connected all the time, but there’s no doubt that having networked devices also adds a layer of complexity to everything. If my Wi-Fi music player isn’t working, is that because there’s something wrong with the player, or something wrong with the broadband connection? And if the problem is the connection, how do I fix it? It turns out the solution is coming, and soon.

Motorola’s Alan Lefkof is predicting a major shift in 2009 in how cable operators manage broadband service. Despite the economy, Alan believes cablecos will invest in remote-management software next year to solve home broadband woes. While cable operators have been reticent in the past to try to manage home networks, they’ve come to the realization that they – not the local CE retailer or company product support – are going to get the customer complaint calls, whether they like it or not.

[How] can we help the carrier from a a service assurance point of view remotely manage and remotely provide services for the household so that the consumer doesn’t have to become an IT director?… We [Motorola] have very sophisticated software platforms that  allow a service provider from a central location to monitor, diagnose, upgrade, and support what’s in the home the way an enterprise would for a Fortune 1000 worker.

Cable operators can cut down on their own service costs with remote-management software while making things easier for their subscribers. In other words, the pipes may be dumb, but management of those pipes shouldn’t be. Cable companies see a new way they can add value to their services that will ultimately also save them money, according to Alan. His prediction: the more sophisticated cable operators will have service assurance software deployed in 2009, with the rest of the market following right behind in 2010.

One other interesting aspect to note here is that home networking today is a lot different than it was just a few years ago. I remember talking to one large cable operator about plans to offer complete home networking services back in 2004. But at the time that would have introduced a lot of headaches with very little payoff. Today networking is a lot more than just sharing an Internet connection to check email. It’s about accessing all kinds of valuable information and entertainment from anywhere in the home – across modems, set-tops, and other devices. And that means a lot more potential reward for the service providers that make the home network work well.

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There used to be a joke in my family that my father, who was addicted to the computer, was not allowed to power up his PC on Christmas. This was long before widespread use of the Internet, and before any of the rest of us were computer-addicted. Now during a typical holiday season, all five adults have a laptop out at various times, and often all at the same time. Plus we’ve added in a couple of netbooks and a couple of smart phones to the mix. Someone is always online.

So imagine the consternation when we lost Internet connectivity late yesterday, and it stayed out for nearly 24 hours.

It sounds like a great excuse for family time, right? The problem is: most of us are dependent on the Internet for work. We get to be together longer over the holidays because we can access so much online. Without a broadband connection, there’s general panic over what’s being missed, who’s trying to get in touch, and when we’ll be able to communicate with the online world again. (That happened to be compounded in my case because I also dropped my cell phone in a puddle.) Like it or not, broadband is a necessity for the way we live.

The forced experiment in Internet-free life may have kicked me over the edge into spending money on mobile broadband along with my fixed connection at home. I’ve been on the fence for a long time, but I think I may have hit my tipping point. And I doubt I’m alone. With WiMAX starting to roll out, more Internet-connected devices everywhere, and more people needing to be online more often, the time for mobile broadband has arrived. All the money people have been waiting to make on mobile video and other advanced apps? Get us hooked with the promise of broadband connectivity anywhere, and those new revenue streams will follow.

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In an ongoing series of executive interviews to wrap up the year, I spoke recently with Motorola’s John Burke on some of the most important milestones for the video industry in 2008 and his predictions for 2009. Here are some of the highlights in written form along with audio sound bytes and a 60-second bonus video.

Notable Accomplishments for the Video Industry in 2008

There were several. First, many operators successfully began moving toward all-digital broadcasts, meeting deadlines mandated by the FCC. Second, in North America we saw new advanced video compression schemes deployed, with Motorola’s programmer customers as well as several key service providers transitioning from MPEG-2 to MPEG-4 AVC. Third, there was an explosion of video content largely driven by new HD offerings. And fourth, we saw a number of new innovative home solutions including enhanced DVR experiences and new media management applications enabling consumers to share their personal content from PCs networked to set-tops around the home.

Audio clip on Internet video and new types of content available on broadband networks (Hit play below)

[audio http://www.switchpod.com/users/msilbey/JohnBurkeonpersonalizationNov2008.mp3|bgcolor=#0000ff|leftbg=#ff0000|slider=#00ff00]

The Beginning of a Trend toward Personalization in Video

There is a lot to be gained from personalization. As consumers grow more sophisticated and expectations rise, there’s a drive in the industry toward offering more seamless, converged video experiences. At the same time, operators are gaining new revenue opportunities through personalization both from advances in targeted advertising  and from the ability to create new service offerings.

Internationally, one of Motorola’s large customers, KDDI, commercially deployed what we believe is the world’s first fixed-mobile convergence platform. The platform allows subscribers to personalize their content access by converging services across mobile and in-home video networks and devices.

Audio clip on the launch of KDDI’s au Box service (Hit play below)

[audio http://www.switchpod.com/users/msilbey/JohnBurkeonauBoxNov2008.mp3|bgcolor=#0000ff|leftbg=#ff0000|slider=#00ff00]

Predictions for 2009

Every year we predict a flattening of demand for broadband connectivity, and every year the high levels of demand surprise us. I think we’ll see that again in 2009. I also think demand for HD content will exceed expectations. Finally, in 2009 I think we’ll see true convergence of Internet content with more traditional broadcast and VOD content in new, differentiated service packages.

Bonus Video after the Jump READ MORE

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There’s been a whole lot of HDTV activity this year, and with only 16 days left in 2008, I think it’s a good time to take a look back.

First, a new report out by Nielsen says that 23.3 percent of US households now own an HDTV. That’s more than double the number of HD households a year and a half ago. I can suggest a few reasons for the massive growth: steep discounts on HDTV sets, more HD content available, and the upcoming digital TV transition.

Next, let’s take a look at HD services in 2008. Earlier this year Motorola passed the 15 million mark for the number of HD set-tops shipped. Combine that with the fact that video service providers continue to one-up each other with claims of more HD content, and we have a clear indicator that HDTV is an important commodity.

On the programmer side, not only are networks broadcasting more HD video,  but the avant-garde is making the move to all HD content. Maybe that goes in the 2009 file, but the impetus came in 2008.

Finally, this year marked the start of an HD video recording trend.  New inexpensive HD camcorders make it easy for anyone to shoot an HD video and upload it to YouTube. That has tremendous implications on the quality of video that consumers will begin to expect even online – not to mention, the huge  impact it will have on downstream and upstream bandwidth requirements.

All in all, it was a big year for HDTV. And 2009 promises more of the same.

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