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The Business Case for Unbundled IP Video

As I mentioned in an earlier post on the recent market study of U.S. pay-TV subscriber needs and wants, the segmentation of the video marketplace potentially  brings both new challenges and opportunities for incumbent service providers.

That said, the debate around what to do about the unprecedented growth of the Netflix phenomenon now seems to be a moot point – as incumbent pay-TV service providers openly acknowledge its disruptive impact on the traditional video entertainment industry. And, now they’re proceeding with their plans to execute their long-awaited counter strategy.

Clearly, 2011 could prove to be a pivotal year for testing new business cases, as the marketplace becomes more fluid and is subject to further significant changes that are on the near horizon.

While it’s perfectly understandable that incumbent pay-TV service providers might prefer to bundle a Netflix-like, on-demand IP video service offering with their standard digital cable tier subscriptions, let’s remember that this is but one potential scenario.

Revisiting the results of the Cisco market study, it’s interesting that note that – by far – “the most likely motivation to pay for an online video package…” is a low price point. Call this the “value-based” market segment, if you will – it likely includes some current subscribers and previously lost customers. To win-back these prior subscribers, such as those that are looking at more of an iTunes or Hulu approach to catch up on their TV, an unbundled IP VOD offering by the provider could be very attractive.

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Cloud Computing: Update ITU-T Focus Group and OMG-Hosted Telecom Cloud Conference

The first part of December has been very busy for me in terms of engagements focused on Cloud Standards specifically the ITU-T Focus Group on Cloud Computing, where I am a Vice Chair; and as a presenter at the OMG-hosted Telecom Cloud Conference representing the ITU-T.

Well let’s start with the ITU-T Focus Group Cloud Computing meeting. My colleagues and I were greeted by quite a bit of snow at the third ITU Focus Group Cloud Computing Meeting held on November 30-December 3 and hosted by France Telecom-Orange:

We received 42 contributions with focus in orchestration; cloud management; cloud security; cloud broker functionality and cloud benefits. These contributions were towards the five output documents produced in the second meeting.

  1. Introduction to the cloud ecosystem: definitions, taxonomies, use cases, high level requirements and capabilities. The scope of this deliverable is to provide an introduction to the Cloud ecosystems, focusing on integration and support of Cloud Computing model and technologies in telecommunication ecosystems. The major changes include the addition of the value proposition, requirements and capabilities clauses.
  2. Functional requirements and reference architecture. The scope of this deliverable is to define the functional requirement and reference architecture of cloud computing, which includes the functional architecture, functional entities and reference points.
  3. Overview of SDOs involved in cloud computing. The scope of this document is to provide an overview of SDOs; to map the FG cloud working group and output documents to these SDOs ; and , to be as a base to produce a gap analysis that will result in a unique areas that can be under the ITU-T purview, specifically from telecom perspective.
  4. Cloud security, threat & requirements: Security Cloud has started to be discussed from reviews of other SDOs which are related Cloud Security activities in CSA, DMTF, CloudAudit, NIST, GICTF, etc. After the observation of the existing activities, the FG Cloud tentatively identify security threats from view points of Cloud user and Cloud service provider. Considering the identified security threats, the FG Cloud also studied security requirements to be considered for Cloud Computing Technology.
  5. Infrastructure and network enabled cloud. Position existing network infrastructure capability is a unique opportunity for service providers to provide bundled offers combining Network and IT resources. In addition, service providers can leverage their network asset to address network availability and performance for secure end to end cloud services. Another opportunity for service providers is to evolve network resource allocation and control to more dynamic in order to meet the needs to provision on-demand cloud services.

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The End of TV?

While traveling this week I had the opportunity to read David Meerman Scott’s great new book, Real-Time Marketing, dealing with the new ways that marketers are engaging with their customers.  It is a definite worthwhile read, full of examples of how the case studies highlighted there could be applied to our business…but what struck me was that TV isn’t really as much of a factor anymore as it used to be…

In industry journals, there has been an on-going debate about the extent of “cord-cutting,”  the act of a consumer like you or me (also considered a subscriber by the service providers themselves) deciding to cancel their cable or IPTV service now that they can view a show via the internet, say from a service like iTunes or Hulu in the U.S.  Conflicting statistics are being quoted left and right by different sides of the argument, which reminds me of Chris Brogan’s hilarious quote at a presentation I saw him give this Summer which, paraphrased, is “83.7 percent of all statistics are false.”   Now I’m not saying one side or another is false but are likely just looking at the situation from different perspectives.  Regardless of who’s right and what the extent really is, there is certainly some element of truth to it which means TV isn’t as much of a factor anymore as it used to be…

Personally, I wouldn’t want to get rid of my TV service. Without being able to get my Formula 1 fix or watching the Longhorn game (which in Austin is mandatory for citizenship), it would be like all the sacrifice but none of the grace of joining a monastery.   But I have to admit that in my daily life, I am spending more time than ever with my tablet, PC, and phone…and as much as I love my TV, it isn’t really as much of a factor as it used to be…
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Cisco CLUE Part 4: Global mobile moxie – no cord, no problem

Welcome back to our fourth and final installment of the updated Cisco Connected Life User Experience (CLUE) Index findings. We’ve previously covered residential and business services, and today, mobile services will be in the spotlight. The “On the Move” portion of the CLUE Index grew 19.45 points, from the baseline 100 index points value (based on 2008 global service adoption data) to 119.45 (based on 2009 global service adoption data). On the Move grew more than other segment in our study. Personal mobile devices (smartphones, PCs/laptops, tablets, E-readers, et al.) have become indispensable communications, information and entertainment gear for global wireless consumers. The combination of expanded 3G/4G networks, broader wi-fi access and greater device computing power for advanced mobile broadband applications and services has enabled this segment to flourish in spite of a challenging global economy. Here’s a graphic summary of business services global growth:

graphic summary of business services global growth

We tracked global penetration of the following mobile services as part of our CLUE research:

  • Mobile text messaging: mobile text-based services, including Short Message Service (SMS) and instant messaging
  • Mobile Multimedia Service (MMS): mobile services that include multimedia objects such as images, videos, audio, and rich text in addition to text
  • Mobile email: email on mobile phones
  • Mobile gaming: downloads of full games as well as online gaming on mobile phones, including single-player and multiplayer online games
  • Mobile music: full track downloads and music streaming services on mobile phones
  • Mobile television: scheduled TV content delivered over cellular and broadcast infrastructures
  • Mobile video: on-demand video content downloaded or streamed to the mobile handset
  • Mobile social networking: mobile services ranging from simple chat rooms with only texting tools, to multimedia-rich environments and user-generated content (UGC) sharing communities
  • Mobile LBS: services that include personal navigation, point of interest (POI), friend-finder, and family-tracker services
  • Mobile commerce: services such as mobile banking, local and remote mobile payments, and domestic and international funds transfer

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Cisco CLUE Part 3: No such thing as “business as usual” for today’s global workers

Yesterday, we discussed the “At Home” or residential services category of our Cisco Connected Life User Experience (CLUE) Index findings. Today, we’ll focus on the “At Work” or business services category of our CLUE research. The At Work portion of the CLUE Index grew 14.17 points, from the baseline 100 index points value (based on 2008 global service adoption data) to 114.17 (based on 2009 global service adoption data). Globally, businesses are supporting telecommuting employees, remote workforces, and improved communication with partners and customers through network systems and resources. As businesses have had to re-evaluate their travel policies and budgets, video conferencing and other web-based collaboration services have been adopted as cost-effective alternatives. Here’s a graphic summary of business services global growth:

graphic summary of business services global growth

We tracked global penetration of the following business services as part of our CLUE research:

  • Business instant messaging: fixed-line business instant messaging, including all business users of on-premises and hosted email
  • Business IP telephony: IP telephony lines or end points that are attached to a dedicated IP-enabled or a dedicated IP phone system, not including shared or multitenant solutions
  • Business audio conferencing: phone-based conferencing with no video
  • Business web conferencing without video: collaborative sessions that use a standard web browser or downloaded client to share an application or to make a remote presentation over the Internet
  • Business personal video conferencing: includes client-server PC-software-based desktop conferencing, video telephony, web conferencing with video, and executive video conferencing
  • Business room-based video conferencing: group video conferencing that includes Cisco TelePresence® systems and multicodec and single codec conferencing systems
  • Mobile business email: mobile business email for users on an enterprise mobile account; this is considered an extension of office email service
  • Mobile business messaging: messaging for users on an enterprise mobile account; this is considered an extension of the office messaging service
  • Mobile business location-based services (LBS): business LBS for mobile employees such as the salesforce, and other location-tracking services for industries such as transportation, health, and security

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