Verizon NFL Mobile, Sprint Navigator, and Vodafone’s MusicStation among popular mobile content services

Almost 50% of U.S. mobile phone users pay for mobile Internet access, and the popularity of mobile data services will continue to grow revenues for carriers. Percentages of paying consumers are even higher for smartphone owners: 95% pay for SMS, 92% pay for Internet access, 83% pay for mobile email, 63% pay for mobile navigation, and 43% pay for mobile video.

In Mobile Data: Analysis and Forecasts, Parks Associates analysts forecast mobile data services, including messaging, Internet, apps, entertainment services, and machine-to-machine (M2M), will generate $500 billion in global revenues for mobile carriers in 2015, up from $204 billion in 2010.

Popular mobile content services include Verizon NFL Mobile, Sprint Navigator, China Mobile’s mobile newspaper service, and Vodafone’s MusicStation service. Carriers will derive most data revenues from access services, and content services, including mobile music, videos, games, ringtones, apps, and navigation, will supplement mobile access data services.

Global mobile carriers are poised to take advantage of consumers’ strong appetite for communications, information, and entertainment content on their mobile devices, but they must adapt to maximize these revenues in this hypercompetitive market.

Carriers must compete with their traditional peers as well as content owners, developers, and distributors, who can circumvent a carrier's ecosystem to offer content or services through app stores or on the mobile Internet. The old walled garden is porous due to disruptive forces such as Apple’s integrated business model. To stay relevant and dominant, carriers must focus on making their networks the most attractive option for content delivery and distribution.

Companies have new focus on managing consumers’ electricity usage

Today there are 1.9 million homes with energy management networks. We are entering a period of pervasive growth. … We estimate there will be 16.2 million by 2015.

Parks Associates hosted the Smart Energy Summit in Austin last week. It focused on ways to find customers for such services. The three-day affair showed enthusiasm is high among corporations and entrepreneurs, who sense an emerging market. Parks Associates' Director of Research, Bill Ablondi said there were about 75 companies in the market last year, but now there are as many as 250, including such big names as GE, Intel, Verizon and AT&T.

Consumers, however, remain largely in the dark about the possibilities. Smart grid technologies promise to provide big gains in efficiency for electricity generators, transmitters and consumers. That means cost savings, less pollution and fewer power plants.

Integrating information technology into the electric power grid should also make it far easier to connect renewable energy sources such as wind and solar power.

The technologies should also make it possible to manage a fleet of electric cars so that they can be fueled without putting crushing demands on the system and double as available storage devices for power when parked.

But with electricity prices flat or falling (they were down 11.5 percent last year in Dallas), consumers are not motivated to jump in.

Oncor and other Texas electricity transmission companies have installed more than 3 million smart meters across the state under a mandate from the state government. The meters are providing an ocean of data to the utilities about electricity consumption, but consumers have seen little advantage.

Reliant and TXU Energy can also use the smart meter data to send e-mail alerts to consumers when their electricity usage starts to balloon, along with recommendations on ways to conserve.

A thermostat equipped with wireless radio communications, however, can be configured remotely. TXU Energy offers thermostats that can be programmed from a smart phone.

Parks Associates said energy management systems independent of smart meters would outsell the utility plans for several more years. He estimated that wireless thermostats would grow into a $1.1 billion market by 2015, and that remote-control lighting systems would equal that market.

Speaker after speaker at the conference said the key to this market, however, is raising consumer awareness of the cost savings such systems can bring — without sacrificing comfort or demanding a lot of skill.

To view the full Dallas Morning News Article, click here.

Mobile carriers must focus on data services as smartphone sales exceed 215 million units in 2010

Mobile operators have to diversify their business plans, according to a new Parks Associates report, which finds voice ARPU declining by as much as 30% in some areas, while annual smartphone sales will exceed 215 million units in 2010, creating new opportunities for data services.

Mobile operators are looking to their data-based services for revenue generation and to offset losses in voice revenues. In North America, AT&T, Verizon, Sprint, and Rogers Wireless have started data-based initiatives including subsidization of smartphone handsets, branded mobile-app storefronts, wholesale connectivity to connected CE, and network upgrades. In Western Europe, Vodafone continues to push its mobile broadband offerings and recently launched a new suite of Internet services for mobile devices. These are all key monetization strategies as the market shifts away from voice services.

Mobile Services: Global Outlook (Second Edition), the new report finds voice ARPU in North America will decline by almost 30% from 2009 to 2014. Over the same timeframe, it will decline by 27% in Western Europe and 25% in Asia-Pacific.

Regulatory changes, increasing competition, and the struggle to attract and retain high-value subscribers conspired to drive down voice ARPU and revenues. In contrast, global smartphone shipments experienced a 32% year-over-year increase from 2008 to 2009, and they account for 16% of worldwide mobile phone shipments, compared with 11% in 2008.

For more information, visit http://www.parksassociates.com/mobile .

One small TV to go, please...

Today, Verizon announced the development of an app that will allow streaming of FiOS TV to Apple iPads. Verizon's app further expands the growing TV Everywhere trend as well as the number of companies providing video content to the iPad platform. However, before you plan on watching reruns of Top Shot at the office, you may note that Verizon plans for the service to only be available inside the home for FiOS customers.

Intel's GM to keynote at CONNECTIONS

INTEL's GM for Retail CE, Wilfred Martis, will be the new keynote at the CONNECTIONS Digital Living Conference June 8-10 in Santa Clara. He will be discussing "Smart TVs: Ready for Primetime."

Martis joins other keynotes including:

-- Joseph Ambeault, Director, Product Development & Management, VERIZON - The Service Provider and the Connected Home
-- Scott Birnbaum, VP, SAMSUNG - TV Technology in the New Age of Consumer Buying
-- Mitch Singer, CTO, SONY - Entertainment in a Connected World

Nearly 20% of U.S. broadband households have a PC-to-TV connection and the vast majority is using a DIY solution (like game consoles) to stream online video. Parks Associates forecasts Web-connected consumer electronics will grow from 57 million devices in 2009 to more than 200 million by 2013, with Web-connected TV shipments exceeding 80 million units by 2013.

For advanced advertising, U.S. revenues for online video advertising will exceed $1.3 billion in 2010. Almost 50% of heads-of-household aged 18-34 indifferent to targeted advertising, while 42% aged 25-54 and 25% aged 55 or older are similarly neutral.

For more information about the CONNECTIONS Conference, visit www.connectionsus.com.

Verizon addresses opportunities in bringing energy management innovations to consumers at Parks Associates’ Smart Energy Summit

Parks Associates announced that Robert Heffron, Utility Market Manager, Verizon, will deliver the morning keynote at the Smart Energy Summit on Wednesday, January 27, at 9:00 a.m.

In his keynote, “Home Energy Management is Ripe for Huge Innovation,” Mr. Heffron will discuss the role of the carrier in addressing sustainability and home energy management.

As the home becomes more connected, it is open to a variety of new energy applications, including smarter appliances, load shedding, distributed energy production and resale, electric vehicle grid integration, and even neighborhood energy networking. The consumer is looking for a trusted partner to manage these solutions, maximize savings, and maintain privacy, a role the carrier is in a unique position to fulfill.

For more information, visit www.smartenergysummit2010.com.

Smart Energy Summit addresses consumer value proposition and distribution channels for in-home energy management and control solutions

Smart Energy Summit analyzes the consumer side of the changing energy industry and the impact of Smart Grid technologies and in-home management solutions. Sessions feature over 30 government, utility, and industry executives, offering insight into the current landscape for energy management, barriers to overcome, the mass-market potential, and deployment status of smart infrastructure and energy management devices for in-home use.

Keynote speakers include Andres Carvallo, CIO, Austin Energy; Dr. George W. Arnold, National Coordinator for Smart Grid Interoperability, National Institute of Standards and Technology (NIST), U.S. Department of Commerce; and Bob Heffron, Utility Market Manager, Verizon.

Confirmed Speakers:

Didier Boivin, SVP, Marketing, Watteco

Kris Bowring, Sr. Director, Emerging Business, Best Buy

Susan Cashen, VP, Marketing, Control4

Steve Cashman, Chief Strategy Officer, Exceptional Innovation

Luke Clemente, General Manager, Smart Grid, GE Energy

Mike Coop, Director, Smart Grid Strategy, HomeGrid Forum

Reid Cram, Product Manager, Vantage Controls

Joe Dada, President & CEO, SmartLabs

Aaron Deyonker, Director, Product Management, eMeter

David Dollihite, VP, Product and Business Development, Mass Markets Energy, Direct Energy

Greg Ennis, Technical Director, Wi-Fi Alliance

David Friedman, Senior Director, Strategic Marketing, ZeroG Wireless, Inc.

Dan Gittleman, Chairman & CEO, OpenPeak

Vince Groff, Executive Director, Cox Communications

Brent Hodges, Director, Smart Energy Partnerships, Reliant Energy

Scott Hublou, SVP, Products, Co-Founder, EcoFactor

Jim Johnson, President & CEO, uControl

Stephen R. Johnson, Jr., Sr. Product Marketing Manager, Itron

Ogi Kavazovic, Sr. Director, Marketing & Strategy, Opower

Michael Kuhlmann, President, RCS

Brewster McCracken, Executive Director, Pecan Street Project

Letha McLaren, VP, Energy Products, iControl Networks

Kevin Meagher, CEO, Intamac Systems

Roy Perry, Director, Technology Integration, CableLabs

Thomas Pickral, Director, Business Development, HAI

Carol Priefert, Sr. Manager, Global Consumer Insights and Technology, Global Product Organization, Whirlpool

Jon Rappaport, Chairman, USNAP; Product Manager, Sensus Metering Systems

Bill Scheffler, Director, North American Sales, Z-Wave

Bill Simpson, Sr. Energy Efficiency Program Manager, Progress Energy

Michael Smith, VP Energy Solutions, Lutron Electronics Co.

Dr. Kenneth Wacks, Member, GridWise Architecture Council, U.S. Dept. of Energy

Gene Wang, CEO, People Power

Nate Williams, CMO, 4Home

Tim Woods, Founding Partner, POCO Labs

Visit www.smartenergysummit2010.com for more information or to register for the event.

"Chuck" on VoD ... and I need Hulu because...

My wife and I were both traveling over the past week - me internationally, her domestically. We both missed Chuck on Monday night, March 30. We've both become pretty addicted to this show.

Upon our return, we started playing the episode from the DVR. However, due to some unknown glitch, the program only recorded for 15 minutes. So, I booted up my laptop and we watched the episode from Hulu.

Only after the program finished online did I discover that Chuck has been added to the Verizon FiOS service as a Broadcast Primetime VoD offering. I wish I would have known that beforehand. The Hulu experience is great, but even with a strong Wi-Fi connection at home, the video had its quirks. Watching it on VoD on the TV would have been a much better experience.

With the Cable Show being held in DC this week, there were so many headlines about the cable industry and what to do about online video. Will people cancel their pay TV subscriptions because of it? Answer: no, at least not right now. What does Jeff Bewkes really intend with a "TV Everywhere" concept?

Meanwhile, VoD keeps getting better and better. I can now cancel another program from my DVR recordings, since I've got access to a month's worth of Chuck on-demand. Granted, it looks as though Verizon was given some pretty strict guidelines about how certain NBC content can be viewed in VoD - they have apparently disabled the trick-play modes for this content, meaning no rewinding, fast-forwarding, or pausing. That seems a bit harsh. Hopefully, they'll refine this to allow for trick-play for most of the content - if not the advertising.

It seems like the more primetime VoD that the pay TV operators can put out there, the better off their long-term ability to retain customers and grow revenues through non-linear advertising will be. Sure, they'll have to go to the Web with their programming, but it's not going to happen overnight. Contracts with the content providers will have to be renegotiated to take into account the different business models applied to Web video. In the short-term, though, I can reserve the laptop for the usual Web stuff and rely to a growing degree on my TV for ... TV!

Verizon getting into home controls?

According to CNET, Verizon Communications is exploring ways to use its Fios broadband service to give consumers ways to remotely control their thermostat and view their energy usage.

Company engineers are now designing applications, including energy management, to work with the routers that come with its Fios service.

The first application Verizon expects to roll out will be videoconferencing by the end of the year, according to company spokesman Jim Smith, who said home security and energy management are also being considered.

DTV Switch to happen sooner than expected.

The Congress finally agreed to a delay in the mandatory switch over until June after much debate and heartache to the likes of Verizon, AT&T and Qualcomm. However, in yet another turn in events, more expected than unexpected, the broadcast stations have decided to switch over to pure digital transmission much sooner than the mandated date in June. 40% of the local broadcast stations i.e. 2 in out every 5 have expressed their intention to switch as soon as possible. The major factor in that decision is the ability to save on costs by not having to simultaneously broadcast in digital and analog format. Why would the local stations be so desperate to save on their operational expenditure? The answer to that question lies in the fact that most local/regional network have experienced a steep decline in their ad revenue and are forced to conserve costs. As a result, analog TV viewers will likely be left in the dark after all.

On a separate note, the concept of a unified residential gateway seems to be making its way back. gizomodo.com reports that AT&T has an STB-Femtocell combination box in the making.

Broadband Stimulus - So Many Questions

Verizon the Big Winner?
Here's a follow-up to the note about the potential impact of the stimulus package that may include incentives for getting broadband to unserved or underserved areas. There is some interesting speculation that Verizon could be the big winner in receiving tax incentives, regardless of whether they actually deploy deep fiber into the greenfield or underserved areas. Some view the proposed package as a way to light a fire under the cable MSOs and get them to expedite the deployments of DOCSIS 3.0.

Verizon comments on what the proposed legislation may mean on their own blog.

Who's Going to Manage This, Anyway?
After reading Verizon's policy blog, I posted a question that basically asks who's going to manage the process of getting the operators to work with the state and local authorities to actually deploy these broadband services? I'm wondering if operators will be given sole discretion to determine their rollout plans, or will government or quasi-government organizations be involved in the planning? How will the government measure the progress to assure that tax breaks are actually going to the companies that put installers into the field and get the services to the customers.

The Verizon folks were nice enough to respond with some thoughts. There could be a number of government entities involved in the process, from the Rural Utilities Service (RUS) at USDA and the National Telecommunications and Information Administration (NTIA) at the Department of Commerce. Verizon also mentioned Connected Nation, which facilitates public-private partnerships to increase access to and use of broadband and related technology.

Verizon delivers solid numbers & approves DTV delay

Verizon announced solid earnings this morning much to the relief of the analyst community. Wireless came in as the strongest segment as was expected. Wireless revenues for Q4-08 were $12.8B up 12.3% (YoY) compared to the wireline segment which contributed $11.9B to the top line down 2.7%(YoY). Verizon added ~1.2 million post paid wireless subs last quarter compared to ~2 million the quarter before. The only concerning factor was the slight increase in the churn rate which was recorded at 1.35% towards the end of 2008.

Verizon has taken definitive steps towards stemming their losses from land line losses. The recent launch of the 'Hub' is a sound strategy in adding on other broadband enabled services to vanilla VoIP service to present a better value proposition to consumers looking towards wireless substitution.

On a separate note, DTV conversion has been pushed out to June 12. While this makes sense from a consumer point of view, the investors in the spectrum will likely pay dearly in the form of lost quarters. Two quarters is precious time for companies such as Qualcomm and other wireless operators as they work towards stabilizing their new network builds.

Verizon One - A clue to service provider CPE spending?

Verizon has released the Hub, which looks to be an enhancement to the 'Verizon One Communications Center' and a good example of fixed-mobile communications convergence in the telco space. The Wall Street Journal provided a write-up on this today.

The new home phone, called the Hub, aims to retain existing landline customers and attract other carriers' customers, the company said. The phone will deliver streaming video services and work with Verizon Wireless text messaging and location services.

Verizon Communication's Internet phone for the home offers streaming video and a location-finding service for Verizon Wireless customers. Verizon Wireless, a joint venture of Verizon and Vodafone Group PLC, will sell the phone in its retail stores beginning Feb. 1. It costs $199 after a $50 rebate. Customers must sign a two-year contract with a monthly charge of $35.

AT&T's ConnecTech - Tech Support

When people ask me about which particular segments of the digital lifestyle market will continue to grow despite our current economic conditions, one area that I continually point out are the digital home tech support services. These can include the retail-based services (best known by Geek Squad), the remote PC support space, warranty services, home network management software, security services (Symantec, McAfee, Radialpoint, F-Secure, etc.), remote management and residential gateway software providers (2Wire, Cisco, Jungo/NDS, etc.) and even pre-purchase/subscription advice services like Retrevo.

There was an interesting article in Smart Money this past week about the tech support market, with some pretty significant numbers provided. I estimate that the remote PC support business in 2008 was already $650 million - just in the U.S.! Others put Geek Squad's business at between $1 and $2 billion!

There are plenty of third-party services that are out there, but I'm really intrigued by what service providers can be doing to add value to basic broadband and television service offerings, increase customer satisfaction, and even build new revenue streams. We've written about the opportunities for service providers to take advantage of the digital home tech support space in several recent reports, notably Enabling Solutions for a Rich Broadband Experience and Networks in the Home: The Global Service Provider Play. We also had an interesting conversation at our CONNECTIONS™ Summit at CES about the evolution of tech support services. Bill Stanley from Telcordia followed up that panel with some responses to additonal questions I asked about how they are working with the service provider industry.

What I find interesting about the way that service providers are approaching the tech support space is that vendors are telling me that their conversations have moved away from the folks who are in charge of the customer support call centers and to the people heading up marketing efforts. I think that this may provide a clue as to how these services are being positioned within the service provider community - more as revenue-generating services than cost-saving efforts. We shouldn't downplay the role that enhanced customer support tools are going to play in helping to reduce call center volume and costs - I think that OPEX savings are going to be a critical element to making the service provider business more efficient. On the other hand, I think that some forward-thinking service providers see a real opportunity to create some new businesses that focus on helping their subscribers deal with the complexities of the digital home.

Starting with BT's Home IT Advisor service, I'm seeing more telcos get into the business of deploying tech support services. The most recent offering is AT&T's ConnecTech service, which has been advertised heavily in Dallas - I seem to hear their radio commercial every morning on my drive to work. ConnecTech is aimed at consumers, whereas their Tech Support 360 provides support for small and medium businesses. Among the services offered ConnecTech are:

• PC and home network installation;
• Computer services and in-home support;
• Television and home theater set-up and consultation; and
• Phone and remote support.

Verizon also has Expert Care is a subscription-based ($14.99/month) service for PC support. They also have put together a number of "Protection Paks" that include insurance/replacement services for consumer electronics, phone, and other home equipment (in the case of a power surge, for example).

Verizon actually cites our numbers about the number of U.S. households that experience a PC-related problem in any given year - 41 million households experiencing issues with Internet security, 20 million+ having problems with home PC hardware and software, etc. Those figures were generated in our 2006 survey Managing the Digital Home: Installation and Support Services. We are about to go to field with our next study on consumers and technical support services: Customer Support in the Digital Home. I'm really interested to see what the consumer demand is for a variety of tech support services.

Verizon rolling out femtocells

Verizon Wireless is expected to offer femtocell products to its subscribers starting the 25th of this month. The product will likely be priced at $250 per unit without any contractual obligations. That seems to be a steep price to pay for just enhanced coverage. The details of what else would be included as a part of the femtocell purchase are not yet clear. If it is just better coverage and (possibly) unlimited calling for a monthly fee, I doubt VZ will get much traction with the initial offering. As we argued in our recent report on FMC, pricing is just as important as the value proposition in terms of feature set. The 'Basic' individual package with unlimited voice minutes is pegged at $99/month for individuals and $199/month for a family plan with two lines. Would ~$20 per month extra for the first year be attractive for consumers to invest in a femtocell? I would argue that Verizon needs to include more than just unlimited voice and coverage to make femto attractive.

On a side note, it is interesting to see that both VZ and Sprint support femtocells over un-managed networks i.e. broadband infrastructure that could potentially be managed by a third part. I would assume that quality of service would be a concern.

Rumblings in the IPTV world

Talk about starting the year off with a bang. Tiscali plans to put a stop to their IPTV service in Italy. In another interesting development, BT has come under some pressure for the growth in their IPTV subscription or lack there of. After a furious 2008 and a lot of positive news, are the telcos beginning to show chinks in their armor? Interestingly enough the Q3 growth rate for AT&T fell to 44% in Q3-08 from 46% in Q2-08. Verizon seems to have experienced an even drastic slow down. VZ clocked in a quarterly growth rate of 12.5% in Q3-08 compared to 147% during the same quarter in 07. Granted, the growth rate is expected to fall as the size of the subscriber base increases, but a triple digit decrease seems a little steep. Q4 numbers will be interesting to look at.

FiOS TV Remote DVR - Amazing when Technology Works as Advertised!

Verizon's FiOS TV service has a couple of new features, one of which I tried over the weekend with good success. The Remote DVR feature allows users to manage and schedule DVR recordings from any Internet-connected computer. This feature was slick! Subscribers must have the Home Media DVR feature (allowing multi-room DVR functionality and access to music and photos from home computers at any TV with a set-top box). To initiate the feature, I just had to go to FiOS TV Central Website, enter in my username and password and activate the Remote DVR service. In no time, I was viewing a program guide on my laptop and selecting all of the shows I wanted to record over the weekend. Verizon was running an HBO and Cinemax promotion this past weekend, so I selected 5-6 movies to record. The record commands are sent immediately (I authorized a recording mere minutes before the start of the program and the set-top box responded immediately).

Verizon also offers Mobile Remote DVR functionality, allowing Verizon Wireless customers to view TV listings and mange DVR recordings while on-the-go.

After many frustrating attempts to hook up and configure a variety of consumer electronics products, it's nice to get access to a feature, try it, and have it work perfectly the first time. I was impressed with this feature.

3D TV – Coming to a Living Room Near You

Last night’s trial run of an NFL broadcast in 3D was not without hiccups, but nonetheless an exciting experience, so we are told. Four experiences over the past year have convinced me that 3D will land in our living rooms within the next two years.

First, while at last year’s CES, TI was demonstrating 3D programming on two DLP TV models. The experience was very impressive, but more amazing was to hear all 16 people in the demo area say “wow” at the same time. This spring I spent some time with representatives of 3ality Digital LLC, the L.A. company that not only enhanced 3D display technology for the TV, but elevated the filming of 3D content to a true art form. They are the talent behind National Geographic’s amazing U2 3D IMAX production – a visual experience so stunning that you can count the fillings in Bono’s back teeth while he belts out Pride. In a pre-release sneak peak of U2 3D, the room quickly filled with curious onlookers whose only words were again, “wow.”

This fall at the IFA conference in Berlin, the German national think tank and technology lab Fraunhofer Institut demonstrated 3D technology on TV which did not require stereoscopic glasses and which displayed 2D content which had been enhanced to add 3D effects. While not as rich as previously mentioned examples, the demonstration was evidence that 3D will soon be offered without glasses and costly 3D videography.

Lastly, as we carefully watch consumer purchasing habits while the economy collapses around us, we see that TVs and TV services are holding up fairly well. Today’s news in TV Week states that over half of adults surveyed for Verizon plan to beat the recession by spending more time at home with TV-based entertainment. Parks Associates’ consumer surveys confirm that CE products and services are low on the consumer cut list.

Greater emphasis on the home entertainment experience suggests that the very powerful Wow! factor of 3D will find fertile ground in the home. After all, for those that have owned 3D capable TVs for more than a handful of years, isn’t it time to find a reason to upgrade? 3D will be your answer.

Verizon's Expert Care - Digital Home Tech Support Service

Verizon unveiled its Expert Care service recently, according to a recent article from Information Week. Verizon is offering three types of services with this:

• A device protection plans range from $4.99 to $19.99 a month and cover the repair or replacement of devices like remote controls, keyboards, and monitors.
• Premium technical support offers around-the-clock phone and online support for issues like viruses and spyware, and is priced at $14.99 a month.
• The premium on-site support plan will be done in conjunction with Circuit City's Firedog service, and billing ranges from $99.99 to $249.99.

AT&T has its Tech Support 360 services aimed at small businesses. They have subscription services broken into three tiers - Advanced, Premium, and Premium PLUS. The Premium and Premium PLUS services enhance the basic PC performance enhancements and malware removal services by adding services aimed at home network configuration and data backup. Now, interestingly enough, AT&T mentions SAFElink™, which is what PlumChoice unveiled in January 2008. PlumChoice or partner-branded SAFElink services provide one-click access to a variety of "live" remote technical support options as well as constant data backup and comprehensive security software monitoring. Future releases of SAFElink will include an expanded list of monitored software applications and devices, real-time alerts notifying customers of potential system issues along with customer-directed "self-healing" options, and additional technician-monitored services.