Friday, December 3, 2010, 10:49 AM ET|Posted by Will RichmondFollowing the Thanksgiving break last Friday, VideoNuze's end-of-week feature of curating 5-6 interesting online/mobile video industry news items that we weren't able to cover this week, is back. Read them now or take them with you this weekend!
FCC introduces new net neutrality proposal
Even as Level 3 was accusing Comcast of violating net neutrality principles this week, FCC Chairman Julius Genachowski was unveiling his latest net neutrality proposal. The proposal was a victory of sorts for broadband ISPs in that it doesn't rely on "Title II" reclassification of Internet service to common carrier status, and instead seeks mainly to codify the FCC's principles that have been on the books for a while now. Predictably, the reaction was mixed with some net neutrality advocates saying the move didn't go far enough and some in industry saying any new regulation at this juncture is too much. The next step is a public vote on Dec. 21.
This week's Level 3-Comcast brouhaha underscores just how ambiguous the whole net neutrality debate remains. My impression has been that net neutrality proponents are primarily focused on broadband ISPs not discriminating against or blocking certain kinds of traffic (this is the competitive argument: Comcast might be incented to block Netflix for example). But now, many of the people rallying to Level 3's side are offering an expanded view of why this situation fits into the net neutrality rubric: that the commercial relationships between providers must be regulated too, so that the end user can gain unfettered access to content desired. This expanded view would upend the way Internet providers have "settled" among themselves since the dawn of the Internet. With a deregulatory-oriented Republican House taking over soon, I'm hard-pressed to see how they're going to give the FCC increased reach to regulate these commercial relationships as well.
Verizon Wireless Launches 4G LTE Network on Dec. 5th
The march toward a mobile video world took another big step forward this week, as Verizon Wireless became the latest carrier to unveil a network upgrade to so-called "4G LTE." On Dec. 5th Verizon will introduce 4G LTE in 38 U.S. markets, with 2 pricing plans - $50/mo for a 5GB allowance and $80/mo for a 10GB allowance. For now the service is only available with laptop modems, with smartphones enabled in mid-2011. Verizon said that downstream speeds will be 5-12 megabits per second and upstream 2-5 megabits per second, both up to 10x faster than its current 3G network.
Upgrades to 4G have been common among other carriers this year, and Sprint has been heavily marketing the 4G-enabled EVO smartphone since summer. One big beneficiary of 4G LTE will be mobile video. Though users will need to be mindful of the allowance caps, the higher speeds mean far better video delivery including HD. As mobile Internet usage has grown wireless providers have also been drawn into the net neutrality debate this year. Hopefully the resolution of net neutrality won't slowdown 4G rollouts.
Smartphone and tablet usage will grow dramatically in 2011
Speaking of the mobile Internet, IDC released its 2011 predictions this week, which included bullish forecasts for both smartphones and tablets. According to this NYTimes report, IDC is forecasting 330 million smartphones and 42 million tablets to be sold worldwide in 2011. IDC further believes that half of the 2.1 billion people who regularly use the Internet will do so using non-PC devices. Google's Android OS has made an enormous contribution to fueling smartphone interest, as new research from Nielsen this week once again made clear. Nielsen said that almost 30% of U.S. mobile subscribers now own smartphones that run a full OS. While Apple and RIM share the lead with 27% each, Android isn't far behind at 22%. For those seeking a smartphone, Android and the iPhone were in a virtual dead heat. All those millions of new smartphone-carrying users mean a huge addressable universe of mobile video users going forward.
Cord-cutting isn't going mainstream, at least not yet
Just before the Thanksgiving buzzer last week research firm Frank N. Magid Associates released its annual study of consumer video habits which threw another bucket of cold water on the enthusiasm around cord-cutting. The study found that only 1% of consumers have cut the cord, 2.5% of consumers use Internet content exclusively and just 3% say they're even considering canceling their subscription TV service. Cord-cutting has received massive attention in 2010, particularly as the pay-TV industry has lost subscribers for the last 2 quarters and online video viewership has surged. For now though there's still scan data supporting the cord-cutting trend. However, with everything that's happening in online/mobile, devices and content, pay-TV operators must be working double-time to build value in their services.
YouTube's Content ID Turns 3
It wasn't so long ago that YouTube was THE hub for video and audio copyright infringement, and there was speculation that media companies would sue Google into oblivion. We don't hear much about that topic anymore (except from Viacom, which has relentlessly continued its litigation) primarily because of YouTube's "Content ID" system, which is now 3 years old. I've been a huge fan of Content ID not just because it flags uploaded copyrighted content and notifies the owner (a massive undertaking given the 30+ hours of content uploaded YouTube each minute), but also because it cleverly gives the copyright owner choices about what to do in response. While it's tempting to believe that an owner would immediately want to have infringing material taken down, there are plenty of promotional scenarios where it's better to be left alone, to help generate buzz. Content ID even goes a step further, letting owners monetize user-uploaded content. Content ID has relieved YouTube of its rogue image, and cleared the way for it to make major moves into premium quality content acquisition.
Have a great weekend!
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- Netflix Dominating SVOD Down Under Home Media Magazine