Michael's Insight

Nielsen: Eight million U.S. households still unprepared for digital television transition

Tomorrow is Thanksgiving.  It's a great time to reflect on how fortunate we are to be Americans.  Have a great holiday and I'll be back on Monday.

Nielsen Says Fewer Households Are Unprepared for DTV Transition [Multichannel News]

According to a report from the Nielsen Company, the number of households that are completely unprepared for the digital transition dropped from October to November. There are 7.4% of American households that remain unprepared for the transition to digital television - that's over 8 million households that are not ready for the February 17th deadline next year.

Other data in the report indicates that households with older heads-of-household tend to be better prepared for DTV than younger households. That sounds counter-intuitive to me so I wonder if this data is a good indicator of what's going to happen when they flip the switch in February.  And a larger percentage of Hispanic households still have not prepared compared to non-Hispanic households.

Television viewing is up while online video viewing increasing

We Are Watching More TV — Both Old and New [GigaOm] 

The Nielsen Company has released data that indicates that Americans are watching more television than ever before - an average of 142 hours per month. That's an average of 5 more hours of television viewing than  last year. At the same time, Americans are also watching more online video - an average of two and a half hours monthly.

On top of these numbers, as the number of households that own DVRs has grown to 27%, Americans are now watching an average of six and a half hours of time-shifted video each month. 

GigaOm's article contains some more statistics about the growth of online video, which is undeniable. But while those numbers are increasing, it's not coming at the expense of traditional television viewing.

More channels, more HD, more time-shifting options.  Makes sense.

Kentucky a leader in broadband speeds with Insight Broadband 10.0 and 20.0

State of the Internet Report recognizes Insight's broadband speeds in Kentucky

Akamai has released their third quarter State of the Internet report, which shows that Kentucky has moved into the top-ten of U.S. states in the number of broadband users with 5 Mbps or greater Internet. Thirty-two percent of Kentucky Internet users connect at a speed of 5 Mbps or greater, according to the report. This number has shot up in the past twelve months and represents the biggest mover in the top 10. 

Excuse me for tooting my horn a bit, but most of the increase is due to Insight's broadband offerings.  As you know, Insight offers our customers a standard 10 Mbps and modestly priced premium service at 20 Mbps service in Kentucky - well above the 5 Mbps threshold in this report. 

Akamai's Kentucky broadband statistics reflect Insight's position as a leader nationally in providing the fastest speeds for our users. I'm looking forward to seeing the fourth quarter report for continued growth in this category. Click here to download Akamai's third quarter State of the Internet report.

An extension for analog television in the works

Bush Official Now For Analog Extension [Multichannel News]  

The head of the federal agency that is responsible for the digital converter box coupon program has endorsed the idea of keeping analog TV signals on for a month after the February 17th switch to digital TV. Rather than broadcasting regular programming, the analog TV signals would provide public safety announcements and information about the digital transition. 

The U.S. Senate passed legislation yesterday to create this 30 day analog extension, and similar legislation is pending in the House. 

Even with the millions of dollars of advertising that broadcasters and cable operators have aired to create awareness and educate Americans about the digital television transition, surveys have shown that there is a small percentage of Americans that don't know what they need to do to continue receiving their television signals after February 17th. Creating this extension should be a way to make sure everyone gets the message.

Remember, if you're an Insight customer, you will have no problem continuing to receive everything you receive today on all your televisions that are connected to cable after the digital transition.

A visit to the online doctor

The Doctor Will See You Now — Online [NYT Bits Blog] 

The information revolution that broadband Internet has created continues to change paradigms. Today's change is the visit to the doctor, which a company named American Well aims to transform into a video conference that can be conducted from a computer. If your health insurance opts to participate in American Well (and at least one will by January), you simply log on to American Well and you're directed to your virtual exam room for a ten minute consultation with a doctor. Doctors in the American Well system have access to your electronic medical records and can even prescribe medication through the system.

While it sure sounds like a big change from making an appointment and traveling to a doctor's office, a system like this is perfect for people on the go who need to consult with a doctor about a non-emergency issue. Plus, this article indicates that the system will have doctors available after regular office hours and on weekends.

Is Internet video taking the place of television?

Is Internet TV Eating Into Traditional Viewing? [Multichannel News]  

Multichannel News covers a panel discussion at the Future of Television conference about whether Internet video is poised to surpass traditional television viewing. And, of course, there's a disagreement between the Internet panelists and the programming panelists. One panelist from Accenture says that their studies show that people 18-35 years of age are 60% more likely to watch video on a mobile device or the Internet rather than television. IBM's panelist contended that their online survey showed that 76% of Internet users watch online video and half of those say they watch less television as a result.

But television programmers on the panel contended that the rise of online video is complimentary to traditional television viewing. CBS's panelist said that while three quarters of Internet users view online video, television viewing is up 8% since 2000. 

I'm not so sure this is totally generational either.  Perhaps I'm not your typical 50-something TV viewer but I watch plenty of video on my Internet connection.  But given the choice, I'll always watch television on my TV.

So what do you think? Do you spend more time watching video on sites like YouTube and Hulu than you did a year ago? Do you watch less television as a result? If you had to choose between Internet video and cable television, which would you choose?

FCC's DTV race car crashes... again

FCC's DTV Race Car Crashes... again [Reuters] 

Last month, the FCC announced that it was paying $350,000 to become a lead sponsor for NASCAR's #38 driver, David Gilliland. The FCC sponsorship was ostensibly to bring public awareness to next year's digital television transition. In it's first race, the DTV car crashed into the wall at Martinsville Speedway. Then, adding insult to injury, the group Citizens Against Government Waste gave the car the dubious honor of "porker of the month" for the use of taxpayer dollars to pay for the sponsorship.

But the tale of the DTV car doesn't end there. In the most recent NASCAR race, held on Sunday, the FCC's DTV car endured a second fiery crash. Thankfully, Gilliland again was uninjured. 

Broadcasters and cable operators have provided hundreds of millions of dollars of free airtime to educate Americans about the impending digital transition. Surveys show that nearly all Americans are aware of the transition, but many still need to know what they need to do to continue to receive television signals on February 17, 2009. Rather than crashing race cars into walls, the federal government should be focused on educating these Americans about the options available to them in order to make a successful transition to digital television.

And if I were David Gilliland, I'd be wondering if that paint job has a hex on it.

More on A-La-Carte; DSL Falls; Young Men and Tech Glitches; The Prez and His BlackBerry

Professor Cory O'Connor, from Chapman University and formerly the Senior Vice President of Communications of The Disney Channel disagreed with my a-la-carte position in a comment he posted on this blog last week. 

I was SVP of Communications for The Disney Channel when it moved from a la carte to basic. I'm not without some loyalties to your industry, but you guys are overplaying your hand to protect your status quo, forcing us to pay for Sumner Redstone's excrement. ....  I am firmly in the camp of a la carte, Michael, and I intend to stay on your case about this. I hope David Lazarus from the Los Angeles Times does also.

To fully review his position I am linking to his entire post as I want to give everyone an opportunity to consider his position.  

Professor O'Conor did not, however, address the economic issue I raised in last week's post.  Instead, he responded to an earlier post of mine in which I argued that a-la-carte would dramatically "dumb down" television by reducing the number of choices people have.

A new era for peer-to-peer applications?

ISPs To Speed Up P2P Transfers [Silicon Alley Insider]   

Peer-to-peer transfers might be getting much faster and more efficient. According to Silicon Alley Insider, some of the country's largest ISPs are set to release the first version of P4P software. P4P is the product of a coalition of ISPs, content producers, and P2P software developers. It's designed to speed up P2P file transfers without consuming more than a user's fair share of bandwidth. It also promises to bring content producers to the table, bringing P2P out of the dark alleys of the Internet and into the mainstream.

Here's how P4P promises to make P2P better: 

It makes peer-to-peer transfers -- a huge chunk of all the bandwidth used on the Internet -- more efficient by sending more traffic, when possible, across the ISP's internal network -- as opposed to across the broader Internet. It can also prioritize P2P traffic from networks with which ISPs have so-called symbiotic "peering" relationships, which could save them money.

.....

Hey Mr. Newspaperman! You Think A-La-Carte Makes Sense?

More Misunderstanding About A-La-Carte [Los Angeles Times]

Here we go again.  Now LA Times columnist and newspaperman David Lazarus thinks consumers would be better off if the Federal government required cable operators to offer all of their channels on an a-la-carte basis. You can read my previous posts and my guest blogger, Gerry Laybourne's, that argue that the cost of television would rise dramatically under government-imposed a-la-carte and the diversity of choices would all but evaporate when scores of niche networks simply cease to exist.

Let's use Mr. Lazarus' example to understand the economics.

The average U.S. home now receives a record 118.6 TV channels, according to a recent report from Nielsen Co. But the dirty little secret of the cable industry is that the average subscriber watches only about 17 channels regularly...

...When I watch TV, it's usually CNN, CNBC or a movie channel. On an a la carte basis, I could probably get the handful of channels I like for pocket change.

Ok.  We believe the studies that suggest that, on average, fewer than 25% of the population would subscribe to any particular channel, like CNN or CNBC.  Let's just say that news and movie channels that are on basic cable, on average, cost cable operators about 50 cents per month, each.  Today, those channels receive that 50 cents per month from all expanded basic customers.  If only 25% of the customers actually were willing to pay for the channel, they would each have to charge about $2.00 per month, just to stay revenue neutral.

But that's only half the story. 

We also know that most networks rely on both subscriber revenue and advertising revenue and about half of their revenue comes from advertising.  We also know that a great deal of a network's viewing comes from channel surfing, so their ratings for advertisers are enhanced by that viewership.  Many people estimate that each channel would lose about 40% of its viewers in an a-la-carte world.  A proportional reduction in advertising revenue, reflective of that lost viewership, would require the network to charge customers another $.80 per customer just to stay revenue neutral.  ...

Broadband 100.0? Not Yet

As reported in the Lexington Herald Leader and on Broadband Reports, Insight is testing a 100 meg broadband service at one location in Louisville.  We are pushing the limits of speed on our network as an early part of a process that will lead to more extensive hypersonic speed testing in the future.  In this test, a doctor's office is using the service to electronically transfer medical imaging to and from his office.

Our business services group, Insight Business Services (IBS), is conducting this test for us.  We are able to provision for just about any bandwidth requirement for IBS customers and what better result is there -- to help doctors treat their patients more efficiently and effectively.  In order to increase speeds to 50 or even 100 meg for residential customers, we plan to utilize the new cable modem open standard of DOCSIS 3.0.  We're doing a lot of preliminary work to get ready for DOCSIS 3.0 but don't yet have a timetable. 

Meanwhile, we are watching DOCSIS 3.0 tests that are underway in other markets and we're extremely encouraged with the performance of the new technology.  A couple of questions being asked by interested customers have do do with upstream speeds (some are testing 5 to 10 meg) and whether you will need a new modem (yes). 

We have been a leader in pushing the limits of speed having been one of the first cable ISP's to break the 10 meg barrier followed by our early launch of our premium 20 meg service.  Going much beyond that requires a whole new standard for cable modems which eventually will increase speed capabilities into the triple digits.  We are going to be absolutely sure DOCSIS 3.0 works well in a large-scale deployment before we launch.  However, knowing us, after we take it out for a test drive, I wouldn't be surprised if we find we can't help ourselves and look to press the pedal to the medal soon after we break in the new speedster. 

Two congressmen asking questions about DTV issues

Congressmen look to resolve expected DTV problems [CNET News] 

Two more members of Congress are expressing concerns that the FCC, broadcasters and the federal agency responsible for the digital converter box coupon program need to do more to prepare the public for the digital transition. House Telecommunications Subcommittee Chairman Ed Markey and Commerce Committee Chairman John Dingell have written letters to broadcasters and the federal agencies asking them to detail plans to remedy concerns that arose during the September digital transition test in Wilmington, NC. 

The letters noted that the FCC's trial conversion in Wilmington, N.C., this September "revealed many problems related to the transition, including consumers who did not know they needed to rescan their boxes to search for new channels after the switch, needed to obtain or adjust antennas to receive digital signals, or were no longer able to receive a station's signal because the station's digital signal contour differs from its analog coverage area."

While a majority of Americans are well aware of the digital transition, primarily because of a public service campaign by cable operators and broadcasters, there are still lingering issues for many over-the-air television viewers. It's critical that the FCC continue to focus on solving these issues prior to Februrary 17 of next year.

Remember, if all the televisions in your house are connected to cable, you're already prepared for the digital transition. If you choose to use an over-the-air digital converter, you will need to determine if your antenna is receiving the digital signals and that the converter is properly programmed to the frequencies in your local area.  Come next February, your televisions will continue to work normally during the switch from analog to digital broadcasts as long as they are connected to cable. 

New customers choose cable two-to-one over DSL

Cable Beating Back DSL [Broadband Reports]

Third-quarter results are showing that new broadband subscribers are choosing cable broadband at a 2-1 rate over DSL. The gap between cable broadband and DSL continues to grow because of the significant speed differences between the two. Cable broadband is faster than DSL, and promises even faster speeds as cable operators begin to roll out DOCSIS 3.0 technology.  Another BBR report declares that DSL has cemented its title as the next dial-up.

Unlike phone companies, cable companies do not view technology as the end-game of their services.  Instead, it's a means to an end.  Do customers really care if they receive their blazing Internet speeds via a network that delivers their service via fiber to the curb or fiber to the node?  No.  Unless there is a difference in the quality of service.  With DOCSIS 3.0, cable has put to rest the belief that a complete fiber optic rebuild is needed to compete effectively with Verizon's FIOS technology.  Instead, both Verizon and AT&T remain burdened with huge capital investment requirements in order to compete with cable's already-installed platform that easily adds DOCSIS 3.0 to it.

The remaining question is when does Wall Street figure it out and start reflecting these economic differences in the values of wireline phone and cable companies.

Facebook to take their election tools overseas

Facebook's political squad looks overseas [CNET News]

Having had a major influence in the presidential election this week, Facebook is looking abroad to provide the social networking tools that allowed campaigns to organize their supporters and to recruit additional supporters. 

"This week is definitely all the post-election aftermath, but I'm definitely looking forward to jumping right into some of the international politics (and) international elections," said Zuckerberg (who is, in case you were wondering, CEO Mark Zuckerberg's sister). "It's a little more fun to work on some of those because they don't draw out their elections for a year and a half."

According to Facebook, more than 5.4 million users clicked on the "I Voted" button on their Facebook account on Election Day. Over three-quarters of Facebook users live outside the U.S., so there are plenty of users that can take advantage of Facebook in their home country's elections. 

 

Hollywood movies you can watch on YouTube?

Feature films coming to YouTube [CNET News]

After Google acquired YouTube, they began looking for ways to create a revenue model for the ultra-popular video sharing site. Now, news is leaking out that YouTube may be bringing advertising supported feature films to the site. According to an anonymous Hollywood executive quoted in this article, Google's negotiations with Hollywood studios are paying off, and we can expect to see movies on YouTube within the next three months.

This move will position YouTube to move into the space occupied by Hulu, a joint venture between NBC Universal and News Corp. Hulu offers users a variety of TV shows from NBC Universal and Fox, along with a few feature-length films. 

The fact that there's a lengthy discussion in this article about whether Hulu's superior video quality gives it a competitive advantage over YouTube tells me that we've crossed a threshold with web video. This format's popularity is already expanding exponentially, and there's every sign that popularity will only increase over the coming months. 

An Internet President-Elect, Broadband Caps Come to DSL and White Spaces Approved

America elected Barack Obama as the 44th president of the United States yesterday. Obama changed the way campaigns will be run in this country forever. While candidates had used the Internet as part of their campaign strategy in some part before Obama, he was the first to fully leverage its potential to raise enormous sums of money in political contributions and communicate his message to millions of mostly-younger, connected Americans.

In the days to come, the pundits will analyze the results of the election and try to figure out how and why Barack Obama won. I feel, with great certainty, they will find that the turnout among young voters was higher than ever and the Obama campaign's near-perfect execution of an Internet strategy made that happen.

If you're interested in a deep-dive recap, the New York Times site has a good state-by-state map of the results. The map will allow you to drill all the way down to county-by-county results.

Talking Media and Telecom at U.K.

Yesterday, I was on the campus of the University of Kentucky in Lexington to speak with students as part of The Cable Center's Cable Mavericks program. I was joined by Geraldine Laybourne, a cable pioneer who lead the team that created Nickelodeon and later founded Oxygen Media. Gerry and I were hosted by UK's School of Journalism and Telecommunications.

Our morning started with an introductory class in telecommunications. Topics included cable programming and distribution, past and present and then we discussed the future of video delivery. We had a great time asking the students in the class about what they thought the "next big thing" in telecommunications technology would be. Gerry regaled the class with a story about how she is preparing for her first meeting as a member of the board of Electronic Arts. She hired a 10 year-old, a 13 year-old and a 16 year-old to tutor her on playing video games. I joked that since she's having a hard time getting the knack of the games, the board is considering inviting the 10 year-old onto the board.

Web developments have changed the way campaigns are run

Campaigns in a Web 2.0 World [New York Times]

Here's a neat article that summarizes many of the changes that the web has made in the way presidential campaigns are run since the last presidential election. Candidates use social networking applications like Facebook to organize their supporters, and the explosion of web video sites like YouTube have allowed candidates to package video nearly instantaneously for connected voters.

The new media politics is also having an impact on how people consume traditional media. Cable news outlets have attracted audiences on par with broadcast throughout the major events of this political cycle. This article posits that will likely be true for election coverage tomorrow night - as news consumers check the latest results on the web, while watching their favorite cable news network.

Today, I'm speaking with students at the University of Kentucky School of Journalism and Telecommunications. One of the topics I'll be discussing is this article. I'll write more tomorrow about the discussion.