Comcast Introduces Xfinity Signature Support

Comcast Corporation recently announced the launch of a new 24x7 technical support and equipment protection program for the growing number of home electronics devices – like laptops, home networking equipment, gaming consoles, Wi-Fi enabled smart phones and tablets – people are connecting to Comcast’s services. Called Xfinity Signature Support, this service offers customers a single source for troubleshooting and support for their computers, home networks and many other devices and is another step in the company’s focus on delivering an end-to-end exceptional customer experience backed by the Comcast Customer Guarantee.

The new offering enables customers to select an enhanced level of technical support with monthly subscription plans and one-time support options and is offered in addition to the 24x7 support Comcast already provides for its video, high-speed Internet and phone services.

According to a 2010 survey by Parks Associates, more than 50 percent of Americans with Internet service look to their broadband provider as their first or second choice in solving their home computer-related technical issues. Additionally, 75 percent of those surveyed prefer to receive all of their technical support services from a single vendor.

With Xfinity Signature Support, Comcast customers will have access to knowledgeable and experienced IT specialists who can provide supplementary technical support online, over the phone or in the home. Assistance is available either as part of a monthly subscription plan or on a stand-alone basis for one-time fixes, such as virus removal or connecting printers or game consoles to wireless networks. Xfinity Signature Support also offers extended equipment plans covering computers and flat-panel TVs.

For more information, please visit www.xfinity.com/signaturesupport.

Adobe Enhances Flash Video, VOD Distribution

Adobe Systems Inc. signed an agreement with a Seattle-based company that affords media publishers enhanced security when distributing Flash-based transactional video-on-demand (VOD), subscription, electronic sellthrough and rental on PCs, mobile devices and pay-television.

Adobe said thePlatform’s mpx video management software gives content owners easier tools to deliver Flash-based premium video across multiple platforms. The top 10 video sites in the United States use Adobe Flash, making it the number one format (other than Apple’s QuickTime) for viewing video on the Web, according to comScore.

Ian Blaine, CEO of the Platform, said its software allows media companies to enforce content rights, business polices and monetization models, while making it appear seamless to consumers.

John Vartanian, chief technology officer with iN Demand, said the new tools would allow its pay-TV affiliates with a more secure streaming video delivery system. The company is a major distributor of Hollywood VOD movies to cable operators, including Time Warner Cable, Comcast, Cox and Bright House.

For the complete article, please click here.

TV Everywhere Kicks it Up a Notch - CE Giants and the Cable Industry

It's the Monday after CES, so in addition to resting our sore feet, we're now starting to pull our thoughts together about some of the key takeaways from the show. From what I saw, I think that there were several items worth noting:

• More Connected TV Manufacturers Opening Up Apps to Third Parties: LG (Smart TV) and Panasonic (VIERA Connect) joined Samsung in supporting third-party application development for their connected TVs. We know that access to premium video such as TV shows and movies are the most significant driver for connected TV use today; opening up app development to third-parties is going to give the TV manfaucturers a low-cost way of experimenting with what other types of content are going to be important to consumers.
• Online Television at the Connected TV: To date, the only way for consumers to access current primetime television on a connected TV has been with a subscription to Hulu Plus. Google's struggles to secure content from the broadcasters has been well-reported. However, according to today's Wall Street Journal, Yahoo! may be in line to support ad-supported programming from Disney (ESPN, the Disney Channel, etc.). The Journal also reports that Samsung may be in line for programming from Fox. How ad-supported content makes its way to connected TV devices will be a key trend to watch this year. Companies such as mgMEDIA, JustAD.tv, and Zeitera are ones to watch.
• Online Video through Pay-TV Services: Cisco has announced a singificant initiative called Videoscape. This is intended to help service providers migrate their infrastructure to support IP video to set-top boxes and other devices, including connected consumer electronics. ActiveVideo Networks made its first "CloudTV" announcement with Funai. Amino Networks showcased a "companion" box to receive online content.
• Connected TVs and Casual Games: There were several announcements of note, and The Wall Street Journal covered them in a very good article last Friday. Among the announcements were companies such as VIZIO and OnLive, Panasonic and Gameloft, and STMicroelectronics and PlayJam.
• More Internet TV Boxes and Wireless PC-to-TV Solutions: Iomega joined D-Link as an OEM partner for the Boxee Box. And, with 9% of U.S. households connecting a computer to a TV to watch online video, the wireless PC-to-TV space has more solutions.
• Gesture recognition is coming to the TV: The success of Microsoft Kinect (eight million units sold in the first 60 days) and the major attention that products such as the Asustek/PrimeSense Wave Xtion lead me to believe that more natural interaction with both gaming and TV content are coming sooner rather than later.
• Appliance-based Storage Becomes Goes to the Cloud: Companies in the consumer storage space are all making remote access a standard feature on at least some of their drives and network-attached storage devices. Companies that I saw with solutions include Iomega, Western Digital, Seagate, Buffalo and others.
• Internet Security for Smartphones: As smarthones grow in popularity and use for e-commerce and banking applications, we're seeing a major push by traditional ISV (Internet Security Vendors) to extend privacy protection and anti-virus/phishing solutions to the mobile platform. Among companies with announcements in this realm were Trend Micro with Trend Micro Mobile Security for Android platforms. Companies such as Lookout and Mocana are others to watch.
• Internet Security for Connected TVs: Companies such as Mocana and McAfee (Intel)have just recently discussed the theats that could exist with connected TVs. Mocana recently published the results of some lab testing, where their engineers were able to successfully hack certain connected TVs and create fake Websites ("phishing") for Amazon.com and collect credit card information. In its recent 2011 Threat Predictions report, McAfee predicts that privacy leaks through connected TVs will become more of an issue, as malicious apps are created to steal consumer data. Look for security vendors to examine how best to protect the growing wave of connected TV devices.
• iPhone Backup Appliances and Services: I think that this is a nifty idea for those of us who aren't synching the iPhone with a computer on a daily basis. Plus, my five-year-old deleted a Christmas picture from my iPhone a couple of weeks ago. One product that caught my attention was the Iomega SuperHero Backup and Charger. Trend Micro also demonstrated SafeSync, a cloud backup service for iPhones and Android smartphones.
• The Smart Home Driven by the Broadband Provider: You coudn't miss Verizon's presence, as they were right in the middle of the press room. They showed off a new home monitoring and energy management solution called the Verizon Home Monitoring and Control Service. There were many other companies showcasing how home monitoring, energy applications, and security can be deployed as a broadband value-added service.

Among all of these headlines, I think that the announcements and demonstrations centering on how tablet computers (iPads, Android devices) and connected TVs will be able to access and interact with pay-TV services were among the most noteworthy. The major announcements included:

• Comcast to Support Live Streams and VoD on on Tablets and Connected TVs: Apple’s iPad® as well as Android™ powered tablets. The 2011 roadmap includes DVR and VoD content available on the connected devices in the short-term, and live TV streaming from Xfinity later this year. Samsung promoted "session-shifting," where a movie played on the tablet computer can be paused and then watched on the connected TV. The cable company will enable in-home streaming for live and On Demand content this year. Later this year, customers will be able to watch live news, TV shows and movies in their homes whenever they want.
• Samsung and Time Warner Cable Partner: Samsung also announced that Time Warner Cable customers would be able to access cable services through its connected TVs and tablets.
• Sony and Time Warner Cable: Sony's connected TVs will be able to receive content from Time Warner Cable. A write-up is available at Bloomberg.

Last year, we saw several European pay-TV providers dabble in the use of the connected TV as an alternative set-top box (LG, TeliaSonera, etc.), but this was the first time I had seen U.S. operators really showcase the potential of using secondary and tertiary screens as both control points and as viewing platforms for online content.

I really like what was showcased, in that it demonstrates how several major challenges to the cable operators can be addressed. First, there's the significant cost of deploying a set-top box to every television in the home. This can be greatly reduced with their support of retail-based products. It's like the vision of tru2way, but one that may actually work.

Second, it's going to provide some incentive to a consumer who may be considering dropping their cable service, but who sees the value in not being forced to consume all of the content on the TV. I think that this is where a concept like TV Everywhere should go. It's not just about offering a few paltry cable channels and programs online; it's offering a truly untethered experience for the subscriber.

Third - and I'll admit that this is a longer-term opportunity - it really got me thinking about how the operators can use complementary viewing devices as ways to provide non-intrusive recommendations and interactive features to viewers in a way that doesn't take over the TV screen and cause distractions. What if - for example - they can start to develop feedback mechanisms where the more they know about your viewing habits, they can push some additional content offerings your way on the tablet display? I think that this could start with their free VoD offerings. If they know that I regularly watch CSI, they can highlight previous episodes that I may have missed in their VoD library. Maybe they can start to offer recommendations to other types of programming that would interest me (wouldn't their channel partners love to see how a cable company can offer ways to grow the amount of time that a viewer spends on particular networks' channel?). Now, if they can figure out the whole targeted ad delivery thing, this would be quite an experience!

As always, CES is rough on the feet, but it is exciting to see developments that match technology capabilities to consumer demand. Where those two things intersect, I think you'll see more opportunity for success.

Motorola enters the connected home market through the acquisition of 4Home

Connected home platform developer 4Home was acquired by Motorola today (12/01/10). 4Home will now become a part of Motorola’s Mobility division; terms of the deal have not yet been announced.

4Home’s solutions include energy management, healthcare monitoring, home security monitoring and entertainment management. 4Home, a Sunnyvale, CA based company, was founded in 2005 and has been a regular participant at Parks Associates’ CONNECTIONS conference. To date the company has raised over $9 million in venture capital funding from Pond Ventures, Parker Price and Verizon Ventures.

Motorola is one of the leading Set-Top-Box (STB) brands and we predict that 4Home’s platform will be embedded on their (Motorola’s) STBs enhancing the company’s offering. We expect more details on the deal to be available soon.

In our opinion this is another great example of a market mover, such as Motorola, building the foundation for the connected home systems and services market to blossom. We have repeatedly stated that there are multiple paths to the connected home. 4Home developed a robust platform and Motorola is well-positioned to deploy it. Other recent examples of companies with market clout getting behind the connected home solutions include cable MSOs Comcast and Rogers, both deploying services based on the iControl/uControl (a recent merger) platform(s).

The bottom line for industry participants is that these firms, and others we expect to hear from shortly, will build awareness of the capabilities monitoring and control technologies can add to consumers’ lifestyles. 2011 is shaping up to be an exciting year for the connected home systems and services market. So much so, that we are formulating a new market intelligence program aimed at characterizing and quantifying opportunities in this arena for manufacturers, service providers, utilities, retailers and a host of technology enablers. Stay tuned

Subscriber Losses? Yes, But Cord Cutting - No Way; Cable Companies Account for 3Q 2010 Results

Cable companies prefer very much to avoid the term “cord cutters” when describing recent subscriber sheds. Comcast attributes the bulk of its 622,000 subscribers lost in the first nine months of 2010 - 275,000 of which departed in 3Q alone, to the economic downturn and the expiration of lower priced promotional packages. Time Warner also cited the economy, as well as a migration by some users to satellite TV services, as the principle cause of its 155,000 lost subscribers in 3Q 2010 (compared to 64,000 lost in 3Q 2009). However, the cable giant is keeping a close eye out for the signs of cord cutting, especially in collegiate communities such as Austin, Texas and Columbus, Ohio - just in case.

And Time Warner may have a point, given that, in these college communities, where the assumed early adopters of “cord cutting,” i.e., the substitution of traditional pay-TV services with Internet delivered TV content, make up an appreciable portion of the local population, cable TV subscription levels AND broadband subscriptions have remained consistently flat and in accord with the level of student enrollment. If cord cutting were truly on the uptake, cable companies assert, wouldn’t the broadband subscriber rate be climbing markedly as cable subscription levels fell? And, although this could hardly be considered good news to cable providers, DirectTV is reporting recent subscriber gains, to the tune of 380,000 overall including 174,000 in the U.S. in 3Q 2010 alone; a 28% increase over 2009.

So where does that leave us on the question of cord cutting? Perhaps it is too early to tell. But, as more and better Over-The-Top TV options enter the market and as more premium content becomes available from alternate sources on alternate platforms, we may start to see today’s tiny ripples become tomorrow’s big, surfable wave. For some, this tidal change may not come as such a surprise. As Ivan Seidenberg of Verizon recently pointed it out, it is not as if such things have never happened before; look at what started to happen to local phone companies five or six years ago when people began dropping their land-lines in favor of mobile only phone services.

This is not a new train, he, and others, may have seen it coming before.

Comcast iPad Customers to Get TV Service - Android on the Way

For Comcast customers, the concept of TV Everywhere took another step towards reality as Comcast announced the release of its Xfinity TV app for the iPad. The current app will allow you to use your iPad to search TV listings, change channels, and remotely schedule your DVR. By December, iPadders (or is it iPaddies?) will be able to watch pre-recorded video content on the iPad. Moves such as this one reinforce the opinion of many TV service providers that the iPad is the next "screen" for the consumer, as well as a growing revenue opportunity.

Lest mobile phone users feel left out by Comcast, the company plans to offer similar apps for the iPhone/iTouch, Android, and Blackberry platforms.

Remote technical support services news: Support.com and Comcast and CyberDefender joins ranks of ISVs offering

A couple of news items from last week highlight how the consumer and SMB-oriented remote technical support services are growing. In Support.com's (NASQAQ: SPRT) quarterly earnings, they reported 165% growth in revenue from Q3 09, to $12.1 million. The company reported total 2009 revenues of $17.1 million, so their growth trajectory is quite good. Profitability, on the other hand, remains elusive. The company notes that it does not expect to be profitable in 2010, indicating that yet higher revenues will be needed to turn the corner.

One almost hidden announcement in the Q3 earnings report could bear such fruit. Support.com said that they closed a deal on October 25 with Comcast to provide technology support services. This would be among the first major U.S. cable operators to offer such a program, although others have dabbled in it. Comcast's offering, of course, comes significantly later than what major telcos such as AT&T and Verizon are offering, and even smaller operators such as CenturyLink, as well as Tier 1 operators being served by SecurityCoverage. There is no question, however, that consumers are seeking professional tech support, and remote services offer good resolution rates and a much more convenient way of connecting a customer to a support agent. In fact, we anticipate that U.S. revenues for remote tech support - including ad hoc services and subscriptions - will total about $1.7 billion by 2014.

Other companies, including Internet Security Vendors - are paying attention to this demand as well. We had CyberDefender visit our offices last week to discuss their offerings, and they have a service called LiveTech. The service mix is fairly standard for what we're seeing in remote tech support, where LiveTech agents can remotely respond to the following issues:

• Performance issues;
• Security and protection;
• Software;
• Operating systems;
• Networking; and
• Accessories.

There are some significant differences in CyberDefender's offerings, however. First, the services are only available via a $239.99 annual subscription, whereas other providers offer a mix of ad hoc and subscription services. CyberDefender indicates that consumers will find value in an offering where unlimited support is provided, as opposed to having to pay per incident or being restricted to the number of incident calls allowed in a yearly subscription. We are testing this notion in our survey Consumer Demand for Technical Support Services, where we are seeking to better quantify whether there is a distinct shift from ad hoc to subscription-based services, and to better understand the mix of services necessary to create a sense of value for a customer considering a monthly or yearly subscription. I hypothesize that persistent offerings - such as at least a montly "tune-up" service - will help create a higher sense of value for a customer who can see firsthand the performance improvement after an agent has performed things such as registry clean-up, disk defragmentation, and eradicating spyware, viruses, and other malware.

Also, all technicians are U.S. based, and they are all located in a single facility, offering them the ability to collaborate in a manner that may be more difficult with a distributed virtual workforce.

The role of ISVs in providing remote technology support is a significant trend for 2010. CyberDefender joins other ISVs in providing premium remote technical support services, including:

• AVG;
• McAfee;
• Symantec;
• Trend Micro; and
• Webroot.

Industry Group Launches Entertainment Registry

A new industry initiative is underway to tag every commercial digital video worldwide, helping group every asset into one catalog with the hopes of streamlining digital delivery and simplify commercial transactions of digital video. The intiative, Entertainment Identifier Registry (EIDR), aims to simplify the task of tracking all of the millions of new videos coming from content companies and distribution channels, making life easier for everyone in the digital entertainment supply chain.

Much like International Standard Book Number (ISBN) for the book industry, the EIDR would assign a single, unique identification code to movie and TV assets. But because of the different versions of single video assets — including different version edits, formats, regions, languages, subtitles, standard definition, high-def and so on — the sheer amount of digital tags EIDR will have to undertake will be much larger than any other media tagging ever undertaken.

The international coalition is being led by MovieLabs, CableLabs, Comcast and Rovi, and four of the six major studios — Warner, Paramount, Disney and Sony — have backed the initiative, with Fox and Paramount in talks with the group, Powers said. The Motion Picture Association of America, Deluxe Digital Studios, Neustar, Civolution and Vobile are also among the industry groups that have also signed on. The service is expected to get off the ground in 2011. The group is an independent nonprofit supported by member dues, and the system is built on an open Digital Object Identifier [DOI] standard. The International DOI Foundation has 10,000 organizations worldwide using its registry system.

For the full article, please click here.

Comcast Deploys a Bot Notifcation Service

Comcast has launched its its Constant Guard™ Bot Detection and Notification initiative. This service automatically notifies customers if their home computer appears to be infected with a bot, which the National Cyber Security Alliance has called “one of the Internet’s fastest growing cyber crimes.”

A bot is a type of virus that allows an attacker to force a computer to perform designated actions, usually without the owner’s or user’s knowledge. Once a bot is in control of a computer, it can be used to send spam, host phishing sites or infect other computers.

Comcast’s Constant Guard Bot Detection and Notification service combines bot detection technologies with a customer notification system – either through a browser or customer e-mail – that provides a customer with direct assistance to remove a bot and prevent it from infecting other PCs. This initiative, as well as the other components of the Constant Guard Security Program, is provided to Xfinity Internet customers for no additional charge, and will be gradually rolled-out nationwide.

Comcast to re-launch its TV Everywhere offering - Xfinity Online

From Fierce Cable, Comcast's CFO Michael Angelakis said the comany will "re-launch" TV Everywhere next month. The service, which has been in beta trial "for a couple months" will be called Xfinity Online and "will provide our customers with the content they want anytime anywhere."

DECE unveils the UltraViolet consumer brand

The Digital Entertainment Content Ecosystem (DECE) consortium has announced its UltraViolet consumer brand. The goal of UltraViolet is to allow consumers to watch their digital entertainment across multiple platforms, such as connected TVs, PCs, game consoles, smartphones and tablet PCs, in an easy, consistent way. Since all UltraViolet offerings will work together, consumers will be able to select which products and devices they prefer from a spectrum of familiar companies – ranging from major studios to consumer electronics companies to cable, web and other service providers. In addition, the UltraViolet name and logo will help identify entertainment products and services designed to work together seamlessly.

In yesterday's Webcast on "TV Everywhere," I hypothesized that a "digital locker" solution such as UltraViolet (or perhaps something proprietary to the operator) would be a key in extending the concept of TV Everywhere from mere cable channel repllication to what I've termed "VoD 2.0," where operators create storefronts and are selling VoD downloads that can then be accessed on a variety of consumer electronics platforms. Eventually, I would expect that the concept of TV Everywhere then morphs into "Content Everywhere," where we see cloud-based solutions hosting a variety of content - from user-generated to professional (including games, e-books, music, etc.). But are the service providers on board with DECE? Although there are operators and service provider-related entities on DECE (CableLabs, Comcast, Cox, and Liberty Global), the comments I've read in news reports about the UltraViolet announcement are pretty noncommital about its use.

In a post that I wrote after our CONNECTIONS™ 2010 event, where we had Mitch Singer (CTO of Sony Pictures and president of DECE) speak, I had expressed some concern about whether DECE would get traction with the service provider community. We heard concerns from service providers during CONNECTIONS™ that DECE's goal of limiting the number of video formats available would limit their ability to compete on higher and higher quality content. If a service provider is going to spend billions of dollars to upgrade their network to fiber or DOCSIS 3.0, shouldn’t they have the option of providing a very high-quality format that cannot be easily replicated by an over-the-top provider?

Comcast and Mozy partner for online storage

Comcast is working with Mozy to offer its broadband customers an online backup service. I guess they're really working to encourage their customers to take the $4.99 per month 50 GB or $9.99 for the 200 GB storage, because 2 GB for free seems pretty chintzy. I think I could safely backup my digital photos for one year with that amount. I guess I'd have to select my best year.

Fancast Xfinity TV rolled out by Comcast

Comcast has rolled out an on-demand, streaming TV service, Fancast Xfinity TV, which will be available to those who subscribe to both Comcast’s digital cable and internet services.

Xfinity contains 2,000+ hours of content, and includes shows - and indeed, entire seasons of shows - from content partners including HBO, Cinemax, Starz, TNS, TNT, A&E, AMC, Discovery Channel, History, and BBC America.

The move is considered the biggest step so far in the cable industry’s TV Everywhere initiative, which hopes to keep the cable TV model viable and profitable as viewers increasingly move to the web to watch free programming.

“It’s our goal to allow a customer who buys a package of content from Comcast to access that content on any screen at any time,” Amy Banse, president of Comcast’s interactive-media unit, said during a demonstration to reporters (via the Wall Street Journal). “We think this is yet another step in that direction.”

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Here come the cable gateways - Thomson and Comcast

Maybe it's the summer of the cable residential gateway. Following the news that Rogers in Canada would be deploying residential gateways, Thomson and Comcast announced that Advanced Cable Gateways will be available beginning in Q3. Conceived as a home networking and communications hub, these platforms allow Comcast to provide state-of the art digital voice and data services to its customers – including using enhanced cordless telephone handsets to view email, manage voice mail, read news, weather, and sports, and to click-to-call from a universal address book powered by Plaxo, business directory, or call logs.

I Want My MTV - Shifted

I think that 2009 could be the year of significant development of "place-shifting" solutions for the television service providers. First, EchoStar unveiled the DVR 922 at CES, which includes the SlingLoaded technology to place-shifted recorded content.

Second, DISH Networks has reportedly acquired a Sling.com license for Viacom's content.

Third, Comcast, Time Warner Cable, and Cox Communications are reported to be in discussions with programmers on new terms to carriage deals that would allow them to shift the content to Internet-enabled devices.

Hot Topic for 2009: Will Web Video Replace Your Cable Company?

Today's Wall Street Journal has a couple of articles about cable's power struggles with cable TV programmers. First, is the battle that is playing out between Viacom and Time Warner Cable. We posted this news item earlier today, noting that this is a classic example of the problem that cable providers have with their rather uneasy alliance with the programmers. The power lies with the programmers, who have enormous flexbility to charge not only carriage fees, but get the lion's share of the ad revenues. And, they can also put their video online and raise ad revenues that way. I heard one Time Warner exec quoted earlier today as indicating that Viacom "wants their cake and to eat it, too."

Then, there's the contention between the FCC and Comcast about carrying channels like the NFL Network. The FCC accuses Comcast of discriminatory policies regarding these channels (offering them only as a special tier at an extra cost); Comcast argues that not all of their subscribers want the NFL Network, saying it's not fair to pass on a high fee for everyone who doesn't want it. For the cable channel that allowed Bryant Gumbel to ruin football broadcasts for two years, you have to give the NFL Networks for its moxie in providing an inferior product at a high price.

Then, of course, there is the issue of Web video and whether it will cannibilize cable subscribers. I had written an earlier blog about this, but wanted to follow up with some additional information on the phenomenon.

The past two years have witnessed tremendous growth in online video viewing, particularly for premium content such as television shows. In a study conducted in mid-2008, we found that more than 26 million U.S. adults with home broadband access report watching TV shows on the Internet, using services such as Hulu, Joost, Veoh Networks, or the portals established by major broadcast networks. A key question that we are being asked today is whether consumers will begin to view their pay TV services as expendable, since so much television content is available free of charge (and with many fewer advertisements) via online sites. Today, the number of “cable cutters” is negligible, according to our TV 2.0: The Consumer Perspective study. This study found that found 0.6% of the respondents don't pay for TV service but are watching or downloading TV shows over the Internet. Translated into households, that would be around 400,000.

Despite the popularity of Internet video, cable VoD services still retain a tremendous advantage in terms of quality-of-service and the quantity of high-definition offerings. As we size the potential market for both broadband video and pay TV VoD services for the next five years, we see significant revenues coming to the operators for these transactional services. These numbers do not take into account revenues from ad-supported free VoD content. How effectively cable operators can fine tune their content management systems and advertising relationships in the free VoD space will be an important measure of how well they can capitalize on non-linear advertising revenues, such as free VoD. We also anticipate that cable operators will follow a model similar to the Comcast Fancast development, in providing a broadband video-on-demand service that not only has the potential to spur advertising sales, but ties back to the existing digital cable service by providing applications for remote DVR programming through the portal and allowing users to set up folders for online content to then be viewed on the TV. Cable operators that can develop seamless user experiences between the broadband and cable TV world for their subscribers will have an edge on their competition.

Finally, it’s important to note that our data indicates that even among active Internet video users, their likelihood of cancelling pay TV services is no higher than for all respondents. We would guess that access to live news, sports, and other exclusive programming, as well as more content in on-demand and high-definition formats, will continue to be draws for consumers to pay TV services. Obviously, we’ll be tracking this data for trending analysis to see how these figures might change over time.

Is the Fancast Store a Mistake?

In the age of online entertainment, consumers get virtually unlimited choice of content and unlimited means to entertain themselves. They can stream their favorite episode of Lost from ABC.com, watch full-length movies on Hulu or even download episodes of shows like the The Office from NBCDirect and they can do it all for free.

These choices offer consumers unprecedented amount of control over their entertainment experience, which is bad news for incumbent content aggregators: cable, satellite and IPTV companies. The incumbents have to create a way to deliver increasingly-sophisticated entertainment to consumers for free.

Amy Banse, the president of Comcast Interactive Media, alluded to some of these
challenges during her keynote at the Parks Associates CONNECTIONS™ event in July
(http://parksassociates.com/events/connections/2008/attendees/materials.htm).

Comcast is a great example of an incumbent provider working hard at establishing new entertainment avenues for consumers. In 2006, it launched Ziddio, a user-generated portal similar to YouTube. It followed up with FearNET.com, a horror movie and community site. In 2008, it launched Fancast, a video aggregation and streaming site.

Not all its experiments have been a success. In August, Ziddio has closed its doors (or shut down its servers) for good. FearNET, on the other hand, is alive and growing. In 2007, Comcast expanded it onto the video-on-demand (VoD) platform. This is a critical step for Comcast, as it is trying to build a holistic consumer experience, linking TV, internet and mobile into one.

Comcast’s latest foray into the digital media distribution is the launch of it’s Fancast store in September of 2008. Using the store, any broadband customer in the US can download from over 3,000 titles. Comcast plans to expand the library to 10,000 by the end of 2008. With the new store, users will have an option to buy or rent the video and download it to their PC at prices comparable to Amazons: $10-15 to buy and $4 to rent.

This latest expansion makes me pause to think about what Comcast is trying to accomplish. Have they not learned from iTunes, Hulu and Veoh? What about Netflix and Walmart, who got their own bruises trying to set up digital distribution?

Without a doubt, Comcast will face many of the same challenges as distributors listed above, however, in Comcast’s case, there are significant benefits that would make this strategy worth the risk and give Comcast a chance to succeed. Let’s take a look at each in greater detail. First, let’s consider the challenges:

•Unfavorable economics. Same argument as applied to Hulu and Veoh and Joost applies to Comcast: content owners keep the bulk of the video advertising revenue. Although Comcast did not comment on the revenue arrangements, it did admit that content owners sell ads in the videos featured on Fancast, which usually means that content owner retains 70-90% of the revenue. With the launch of the Fancast store, Comcast acquires an additional revenue source: consumer purchase and rental fees, however, it is also likely that content owners keep the bulk of those.

•Digital rights ruin consumer experience. Content owners manage media rights very carefully, to ensure revenue maximization. This would hinder the delivery of the holistic consumer experience mentioned above. For example, a movie, or a TV episode may be available on Fancast site, but not available on VoD.
Additionally, content owners are adamant about protecting their content with the Digital Rights Management (DRM) software. Fancast is no exception, using Windows Media DRM. DRM further restricts how viewers can enjoy video, for example, consumers can only watch video on a PC, not a Mac, mobile device or a TV.
Such limitations also interfere with “for pay” business models outlined above. Rather than downloading a heavily-protected video file that can only be watched on a PC, consumers will opt to buy (or rent) a DVD, which can be watched on TV or PC and now even on a mobile device as some DVDs include digital versions.

•Competition will hinder success. Online video field is extremely hot with many hands reaching for very little revenue. From the broadcast networks to the device manufacturers, companies like ABC, NBC, Apple, and Microsoft are all striving to deliver the next generation of the consumer entertainment experience. Standing out in this crowd will require an exceptional product with clear differentiation.

There are, however, opportunities for Comcast in pursuing this strategy:

•Content owners crave secure, multi-platform distribution. As consumers increasingly engage in concurrent media consumption and ad avoidance, the effectiveness of advertising in media decreases. Advertising revenues pose the bulk of revenue for many content owners and they want to ensure that if effectiveness of one channel, such as TV, diminishes, they have another channel, such as internet to supplant it with. Service providers such as Comcast make very good partners for media companies, potentially yielding better revenue splits and more lenient distribution rights.
According to Alix Cottrell, general manager of Fancast, this is the route that Comcast intends to follow. Current plans will allow Comcast customers with VoD or DVR to either copy online content into their VoD folder or have it recorded on their DVR (if the show is only available on linear TV). Comcast plans to implement this service within 12 months. In the next 24-48 months, Fancast also plans to launch a mobile component. Initially, consumers will still have to download content to PC and then port it to a mobile device. If the Clearwire partnership is successful, however, Comcast may also launch a direct-to-device service on par with at&t’s Mediaflo or Verizon’s VCAST. Finally, thePlatform, Comcast’s video delivery arm, has recently acquired Chirp, a social application developer, suggesting that Comcast is gearing to dramatically expand social features of its Fancast service.

•Can build biggest libraries. As a media aggregator and distributor, it is easier for Comcast (and most service providers) to build large video libraries. It can leverage its linear distribution relationships to secure content from many providers. It is also not bound by the media ownership regulations that restrict some of the other aggregators. For example, Hulu still doesn’t have ABC’s and CBS’ content in its libraries and it likely never will. Even if the ideological differences between partners get resolved, media ownership regulations will preclude Hulu from adding more content partners.

So does Comcast’s launch of the Fancast store make sense? Will the store succeed? I think it’s safe to say that it does and it will. Of course it is important to keep in mind that success will NOT be measured by revenue or profitability of an individual property like Fancast. Fancast will, however, condition consumers to seek video online and will also build stronger links in consumers’ minds between internet video and traditional TV. As content owners relax their rights requirements, Comcast will be in the position to deliver the holistic consumer experience, which envelops consumers in content (and advertising) regardless of where they are or which device they are using. That service may even be compelling enough for consumers to consider opening their wallets!

Comcast's Fancast Goes Transactional

We had the opportunity today to brief with Alix Cottrell, who is the general manager for Comcast's Fancast service. As has been reported, Fancast has now opened up a store where TV episodes and movies can be purchased or rented. The numbers of titles (3,000) and features of the service are similar to those to which we’ve grown accustomed – iTunes, Unbox, CinemaNow, etc. So, while it’s interesting that Comcast is getting into the transactional business for online videos, our key takeaways from the conversation is how Comcast is taking “over-the-top” video and really making it a strategic asset to build their core broadband and television services. This was a key point that was stressed by Amy Banse, the president of Comcast Interactive Media, during a keynote at our CONNECTIONS™ 2008 conference in Santa Clara.

The key to Fancast’s success isn’t going to be how profitable its movie rental business is; it’s how well it can serve to point viewers (Comcast subscribers or not) to relevant content. The extra benefit of the service – if you’re a Comcast subscriber – are the features that will:

• Allow you to remotely program your DVR (a feature that should be rolled out in some form later this year but fully deployed in 2009); and
• Set up “favorite” folders of content that can then be viewed at the TV; and
• Help direct users to all of the ways in which a Comcast subscriber can view the content – online, live, in VoD, etc.

With Fancast’s free content, there are some interesting tools that allow users to share content with friends or set notification reminders where they are e-mailed when new content is available to view. This isn’t particularly unique; many of the online video services offer this. It’s just a nice tool to have, and a new feature that Comcast is touting.

One area of electronic movie distribution that we’ve covered extensively in our blog and in reports such as the newly-released Internet Video: Direct-to-Consumer Services (Second Edition) is the struggle that online movie services have in dealing with Hollywood’s “sequential distribution” or “windowing” of content. Basically, it’s the rules that govern premium Hollywood content’s availability to certain distributors, whether they’re theaters, DVD rental stores, airlines and hotels, pay-per-view/video-on-demand, and syndication.

The folks at Comcast aren’t making claims that Fancast is going to shatter the windows, but there are some nice features that Fancast delivers in terms of setting consumer expectations to when and where content can be viewed. I think that’s a really important aspect to note. Comcast likes to think that consumers will get accustomed to “Fancasting” content to check how they can view it. They also refer to it as “creating the impression of a windowless world,” when in fact there are strict rules that will limit the ubiquitous access to all content. Better to set the expectations early and offer consumers additional options (ordering the DVD through Amazon, for example) than to disappoint them in the long run.

Comcast CES Keynote Highlights

Amongst Bill Gates' funny video, CES President Gary Shapiro's advocate for free trade, Intel Paul Otellini's showcase of mobile broadband communication across the continents, Comcast CEO Brian Roberts' keynote at CES on Jan. 8th stood out to be the most informative as it touched many facets of the telecom and entertainment businesses and also the hippest as it shows how Comcast is right on track to provide content to users whenever and wherever they go. This entry provides highlights of his 70-minute long presentation.

In our recent report U.S. Broadband Update 2007, we explained how telcos are making inroads and stealing away cablecos' premium customers by deep fiber deployments. We also noted in the report that cable MSOs are not sitting still. For example, Comcast's CAPEX increased 24% in 2007; a slew of new technologies are developed by CableLab to enable higher speeds and better services. From CES keynote, it is obvious that Comcast does have a lot on its plate and the plans are ambitious. They can be summed up in three themes: 1) ultra-fast broadband will be deployed before telcos' fiber get there; 2) content is not "king enough" unless customers can get it on their own terms. Comcast is making content accessible across TV, PC and CE devices; Tru2way, the new Fancast and VoD are all part of this large picture; 3) plenty of HD content will be provided soon.

It looks like cable industry has shifted to higher gears and 2008 will sure test its capability of retaining and attracting customers.

Keynote Highlights

1, Comcast's position as the No.1 multi-service provider in the US.

• Fact: It has nearly 25 million video customers, over 15 million of those taking digital video services. It is No.1 provider of residential high-speed Internet services with more than 13 million customers. It is the fourth largest, and fastest growing, residential phone company.

2, Open cable platform is re-branded Tru2way™.

• Benefits for consumers: when a consumer buys a device built with tru2way technology, they can bring it home, plug it in, and it will support ALL interactive two-way cable services. It's simple and easy. For many consumers, a tru2way device can mean no more cable set-top box.
• Benefits for manufacturers: tru2way means that cable now offers an open platform for innovation. It's Java-based with open APIs.
• Who are in the camp: Panasonic, Samsung, Intel, Cisco, LG, Microsoft, Motorola, TiVo, Sun Microsystems. Cable is working together with Microsoft and others in the PC industry to enable tru2way on future Windows Media Center PCs. This will let end users receive all cable services through their Media Center PCs without a separate set-top box.
  
• Panasonic has the first portable DVR/DVD combination available to consumers with tru2way capability, which is called AnyPlay portable DVR-DVD.

3, Video On Demand

• Comcast is now the largest provider of On Demand television programming in the world. Only digital cable customers get this service, which means 15 million of its 25 million cable homes can get the service now. And 90% of their On Demand content is available at no additional charge. Now they have 275 million views a month.
• In 2008-2009, they will increase the VoD offerings to 1,500 choices.
  
• By the end of 2008, they will begin to roll out a new system architecture that will enable them to offer 6,000 movies to its customers every month, half of which will be HD.
  

4, HD content

• They will put over 1,000 HD choices in virtually every Comcast HD home by the end of 2008.
• HD movie download will come to Fancast website soon.
  

5, Convergence

• Two initiatives. First, they will be offering Caller ID to the TV, so users can see who’s calling without reaching for the phone. Secondly, they will provide integrated voicemail + email messaging on the Web, a feature dubbed SmartZone™.

6, Fancast

• Now it makes personalized recommendations.
• The "find-it" feature takes users to downloads from stores like iTunes and Amazon, or rent DVDs from Netflix.
• Upcoming DVR feature in Fancast which can send instruction to the DVR to record video programs. Then users can watch it whenever they want, acting like the ultimate global remote control.
• It can also send e-mail reminders to those who don't have DVRs. And for users who are not Comcast cable customers, Comcast is planning to offer the remote DVR feature to other cable operators.

7, DOCSIS 3.0

• This technology can enable Comcast to deliver speeds of up to 100 Mbps over the next two years.
• By the end of 2008, DOCSIS 3.0 will be rolled out in front of millions of homes in Comcast service areas.
• They will maintain the edge in bandwidth as no competitors by then will have such speeds in front of so many homes.