Digital Home Field Advantage
Now that IPTV rollouts are hitting a stride, telco video appears to have some cable executives looking over their shoulders. That’s not to say telcos are exactly nipping at the heels of cable companies. After all, Verizon and AT&T combined now count just more than 600,000 entertainment video subscribers, compared to say Comcast’s 24 million, for example
But elsewhere, cable also sees Verizon and AT&T racing way out in front on the wireless side with a healthy head start of more than 60 million wireless subscribers each, more and more of them armed with iPhones.
It’s by no means an unfamiliar factor facing MSOs (multiple system operators) and has everything to do with Comcast, Cox and Time Warner partnering up with Sprint earlier this year to launch the Pivot mobile phone service, which allows users to watch live and mobile television shows from both local and national networks and view TV listings using a programming guide on mobile devices.
The move suggests that cables companies understand the increasing importance that mobile plays in the multi-service bundle. And presently, the telcos are in a much better position to use mobile content-based services as a means of differentiating their digital home bundles, while distinguishing their entertainment-based services without relying on “lower price” or even “more for what you pay now.”
And make no mistake, mobile’s connection to IPTV services is not entirely indirect. A key directive for Pivot moving forward, for example, is to become “more deeply embedded on the video side,” says Kevin Packingham, vice president of marketing and product development for Sprint’s Pivot offering. Meanwhile, during consumer focus groups and surveys performed by Parks Associates, users increasingly are talking about “my content” and the freedom to “take my content with me” and “do what I want with it,” says Kurt Scherf, Parks vice president and principal analyst.
When a group of consumers was asked about their interest in different multimedia applications, “ubiquitous access to TV shows and movies” ranked among the top, chosen by 32 percent of respondents (those rating it six or seven on a seven-point scale).
PCCW, says Scherf, already is having some success in Asia with its Snaap service, which includes photo and video sharing across TVs, PC, phones and mobile devices.
“It’s content on the go,” says Comcast spokesman Marc Goodman, regarding the Pivot service.
Likewise, Sling Media just announced that its award-winning SlingPlayer Mobile software is now available in the U.S. for select Nokia Nseries and Eseries devices running S60 3rd edition software on Symbian OS, including the just released U.S. HSDPA (high speed download packet access) version of the Nokia N95. SlingPlayer Mobile gives Slingbox owners the ability to watch and control their home TV from a network-connected mobile phone.
“Customers have been calling for this software from the time we first announced support for Symbian OS last fall,” says Blake Krikorian, co-founder, chairman and CEO of Sling Media.”People love their living room TV programming and simply want the ability to watch it on any device wherever they happen to be.”
Also worth noting, music is an important part of consumers multimedia entertainment mix, says Scherf, and consumers likewise want the capability to move music downloads to their TVs and mobiles.
“We would expect to see more and more developments of solutions that allow for content to be moved not only inside the home but also outside the home, accessed from multiple devices,” he says.
And though the numbers are quite small now, Scherf believes there could be strong demand down the road for remote access to DVRs through cell phones, though we’d bet users are more likely to remotely control DVR functions through Internet-enabled PCs rather than the smaller hand held interfaces.
Still, carriers appear to share some of Scherf’s mobile optimism, as AT&T recently announced that its U-verse customers can schedule and manage their U-verse TV recordings from AT&T wireless devices, and Comcast reportedly is working on adding remote DVR capabilities to Pivot, as well.
So, with the help of Sprint, cable players are by no means out of the wireless race. Sprint, after all, enjoys more than 54 million wireless subscribers in its own right. Though the possibility of Sprint being purchased by one of the cable contestants could leave the rest temporarily out in the cold.
All along, AT&T and Verizon don’t appear to be slowing down, despite concerns that wireless subscriber growth would slow as U.S. market saturation nears. On the contrary, both AT&T and Verizon added well more than 1 million wireless subscribers in the second quarter of 2007, compared to Sprint’s 400,000 2Q07 wireless subscriber additions.
Overall, U.S. wireless subs grew by more than 12 percent in 2006, reaching 233 million at year end, according to SNL Kagan figures. The number of mobile Internet users, meanwhile, is expected to grow from 37.9 million in 2007 to 91.7 million in 2012, a compound annual growth rate of 19 percent, say Kelsey Group analysts.
Analyst firm IDC predicts that the 7 million Americans who watch mobile TV today will increase more than three times to 24 million in the next three years. So while the mobile TV opportunity remains rather small in the near term, and though mobile is just one quarter of the quadruple-play home bundle, it’s a part of the story that telcos are telling much better right now. IP
