Time Warner Cable's TWCable - Live Cable Channels on the iPad

Although our report Television Services: Global Outlook (2nd Edition) cited a few international examples of "TV Everywhere" services incorporating live streams (CJ HelloVision in South Korea is the most prominent), we hadn't found one U.S. operator deploying such a service. However, Time Warner Cable yesterday launched TWCable, an app for the iPad that allows subscribers to stream a number of live cable channels to the tablet computer. Our research - including the recent Digital Video: Three Screens and Beyond - finds that one-third of consumers age 18-34 are highly interested in the ability to watch live TV streams via the iPad.

A Strategy Shift at Hulu? TWC and Bright House Expand ESPN Everywhere. Synacor Emphasizes TV Everywhere

More significant headlines from this week:

Hulu considers a strategy shift - becomes an online cable company? The Wall Street Journal had a very good article yesterday on the internal workings at Hulu. Among some of the inside conversations taking place: News Corp. (Fox) and Disney (ABC) are considering pulling free content from the site and offering more fee-based on-demand programming to other sites. Also, some at Hulu are considering turning the site into a "virtual cable network."

Time Warner and Bright House Cable Customers Get More ESPN Choices for TV Everywhere: Cable customers who subscribe to ESPN, ESPN2, ESPNU, ESPN Goal Line, or ESPN Buzzer Beater video subscription from these providers can now to watch a live stream of the same network online.

Synacor Establishes TV Everywhere Division: From CED Magazine, Synacor has created a division with a specific focus on TV Everywhere, particularly helping operators get their premium video offerings to mobile and portable devices. The company is expected to have solutions by Q2.

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.

Cox Offers Tech Support in Two New England States

From Cable360.net:

Cox Communications has created a technical support service for high speed Internet customers. Cox is offering its Cox Tech Solutions (CTS) to customers in Connecticut and Rhode Island.

CTS is a team of experienced technicians providing remote and in-home Cox technical support for home networking and peripheral equipment like computers, software, and other electronic devices.

Customers can choose from different types of Cox technical support services via phone, remote log-in, or in-home visits. In addition, they also have the option of subscribing to a premium service, which includes:

• Resolution of computer crashes and removal of viruses or spyware;
• Installing and configuring new PC applications or peripheral devices;
• Configuration or repair of home networking;
• Resolution of operating system or software error messages;
• Other PC-related issues.

Customers who subscribe to the $14.99 monthly service plan will have access to unlimited phone and remote log-in premium technical support, as well as discounted in-home services. The plan covers the entire family - up to four computers. The subscription requires an initial home computer tune-up at a cost of $99.99.

DISH Network's Google TV Offering - Get Ready to Pay a $4 per month "DVR Integration Fee"

From Videonet, DISH is charging $4 per month for a ‘DVR Integration Fee’. That effectively pays for the pairing protocol that enables a Google TV search that simultaneously covers content on the satellite DVR, DISH Network VOD and the Internet. Consumers can also schedule recordings and buy on-demand movies directly from the search bar.

Any DISH Network customer buying a Logitech Revue (effectively a Google TV set-top box) or Sony Internet TV powered by Google TV from retail outlets can take advantage of the DVR integration (with the $4 fee). However, the satellite operator is offering the Logitech Revue to its subscribers directly for $179, a significant discount on the quoted $299 recommended retail price. The new package will work with DISH Network ViP series HD DVRs including the ViP 622, ViP 722 and ViP 722k.

Speaking of the Logitech Revue, I had a Geek Squad installer come on Saturday to fully configure the Logitech Revenue product. As I had mentioned in a previous post, I think that installation issues are going to be a significant challenge for these so-called "smart-TV adapters," particularly those of us who already have an AV receiver and are trying to route the Google TV's audio through the existing home theater/surround sound speakers. The Geek Squad installer requested a fiber-optic cable upon his arrival, and fortunately there were some leftovers from the 2008 full installation of the HDTV and home theater system. He tinkered with set-up for about 45 minutes, and even managed to connect the camera for the Logitech Vid videoconferencing system. The one drawback to this videoconferencing solution is that it is currently not compatible with Skype, which my family already uses for video chatting. I'm hoping that they overcome this hurdle.

Once properly connected, I did see much greater utility out of the whole Google TV experience, and had fun pulling up some YouTube videos and using the picture-in-picture feature to simultaneously watch an NFL game yesterday while tracking my fantasy football team. I'm not sure how pleased my wife was, however!

Another nice find was ESPN3's availability, one of few major networks that has not blocked playback. The U.S. women were playing on Friday, attempting to qualify for the World Cup. The only place to watch the game live was ESPN3. The game pulled up pretty easily, and the quality was pretty good.

The best feature so far, however, has got to be the ability to play my favorite Internet radio station on the whole-home speakers. This has been something I have been trying to accomplish for years with different media adapters, etc. That was a really pleasant feature.

So, Google TV does have some nice capabilities, but I have not recommended it to people who have asked because of 1) the installation challenges; and 2) the current problems that Google is having convincing the broadcast networks NOT to block access to streaming TV shows and other content. Because of this, the Web-surfing-on-TV features are definitely "geek chic," but they are not mainstream applications for the regular Joe who is looking to enhance his/her television viewing experience.

TiVo's Future: A pay-TV /UI provider? Canal Digital is the latest customer

TiVo is already supplying "OTT" hardware to Cox Communications and Virgin Media. Now, Nordic DTH operator Canal Digital will license TiVo’s middleware and user interface to serve as Canal Digital's next generation platform, seamlessly integrating linear satellite and terrestrial TV channels, Canal Digital's video-on-demand service, and a variety of current and future “OTT” services.

Viasat VoD now available on LG Electronics NetCast connected TVs in the Nordics

This press release came from Accedo Broadband, a participant at next week's CONNECTIONS Europe Summit in Amsterdam. Viasat has become the latest pay-TV operator to extend premium content such as VoD to the connected TV environment.

From Broadband TV News, Viasat OnDemand is to appear on connected TVs manufactured by LG Electronics for the Nordic region. The MTG-owned pay-TV provider has signed an agreement with LG that will see Viasat content made available on all LG sets enabled with the ‘NetCast’ functionality.

Hans-Holger Albrecht, President and CEO of MTG, said the link with LG showed Viasat to be platform agnostic. “The cooperation with LG is a key step in broadening the availability of our Viasat OnDemand service, which is already accessible through Viasat’s OnDemand set-top box, our online portal, on mobile phones and now also directly via broadband-enabled TV sets.”

The application was developed for Viasat by Stockholm-based Accedo Broadband.

The over-the-top solution is available to any Viasat OnDemand with a broadband connection. Included are episodes of hit TV series as broadcast by TV3, TV6 and TV8 in Sweden, TV3 and Viasat4 in Norway and TV3 and TV3+ in Denmark, as well as access to 200 feature films at any given time.

I have been trying to keep up with the tally of managed service operators working with the connected TV community. So far (and I'm sure that this list is not comprehensive), I have:

• Orange (France) and LG Electronics: Content includes Orange Sport Info, 24/24 Actu (news service) to Liveradio and other content such as TV programs, videos, music and practical information.
• TeliaSonera and Philips: TeliaSonera International Carrier has announced that its Media Distribution Service (MDS) was chosen by Philips for its technology platform for premium VoD.
• DISH Network and Google TV: Offers a $179 Google TV package for subscribers to provide the Logitech Revue smart TV set-top box adapter.
• TiVo and Cox: The two companies will offer TiVo Premiere with integrated Cox On DEMAND service to Cox subscribers. Customers will need a CableCARD for access to Cox services.
• TiVo and Virgin Media: Virgin Media distribute the HD/3D set-top box with 1 TB of storage and an internal modem to provide for both HD video and other online video.
  

Announcements from Amino Communications this week - search/recommendations and interactivity

BLINKX TO PROVIDE SEARCH, PERSONALISATION AND RECOMMENDATION FEATURE FOR AMINO’S AWARD-WINNING HYBRID/OTT SET-TOP BOX
blinkx, the world’s largest and most advanced video search engine, today announced a partnership with Amino Communications, the world’s leading developer of pure IPTV and hybrid/OTT devices and solutions. Under the terms of the partnership, Amino and blinkx will develop an integrated search, recommendation and personalization solution powered by blinkx technology to be deployed on Amino’s hybrid/OTT set-top boxes, including the award-winning Amino Freedom, which brings broadcast, on-demand TV, open Internet and local content together in a single device. Based on technology that was perfected over 12 years at Cambridge University, blinkx uses a combination of patented conceptual search with speech and image recognition software to understand rich media more thoroughly than any other solution available today. This deep understanding of content enables blinkx to deliver unrivaled accuracy and relevancy in its search, personalization and recommendation capabilities. More here

BLUESTREAK TECHNOLOGY AND AMINO TEAM TO DELIVER INTERACTIVE TELEVISION SOLUTIONS TO IPTV AND CABLE OPERATORS
Companies Integrate Multi-screen Presentation Software with High-Definition Set-top Boxes to Provide Web Services, Internet Video, and Applications on TVs
Amino Communications, the world leading developer of pure IPTV and hybrid/OTT devices and solutions , and Bluestreak Technology Inc., a proven leader in delivering software presentation solutions on wired and wireless embedded devices, today announced from Telco TV that they have partnered to provide new interactive television solutions to IPTV and to Cable operators. The joint solution integrates Bluestreak Technology’s MachBlue family of application platform products with Amino’s Freedom DVB-T hybrid/OTT media center to deliver web services, Internet video, and applications to the TV. “Televisions are quickly becoming the primary source for accessing digital services, including live and on-demand television programming, telecommunications products like VoIP and videoconferencing, Internet services and applications, and Over-The-Top (OTT) video,” said Dominique Jodoin, Bluestreak Technology CEO and President. “As a result, our IPTV and cable operator customers are repeatedly turning to Bluestreak Technology to optimize all of these services through a common client and application environment so they can rapidly offer consumers a wide range of services around television entertainment experiences. Companies, like Amino, deliver the powerful, high quality hardware and software necessary for Bluestreak Technology to seamlessly deliver the converged digital services that make it easy and fun for consumers to discover and consume content and web services.” More here

DISH Network is now offering Google TV

DISH Network announced on Wednesday that it is offering its Google TV product to $179. With a Logitech Revue box and DISH's DVR, subscribers can search for content for DISH's linear, DVR, and VoD content.

DISH Network’s Google TV solution, which requires a DVR integration service of $4 per month, includes the Logitech Revue™ with Google TV™, a small set-top box available for a special price of $179 (MSRP $299) – an exclusive deal for DISH Network customers. The Google TV experience is compatible with DISH Network ViP series HD DVR satellite TV receivers including the ViP 622, ViP 722 and ViP 722k.

Look Back joins Time Warner Cable's Start Over and DVR options for time-shifting primetime programming

From C.E.D, Time Warner Cable's Look Back service is getting out of the starting blocks with multiple deployments scheduled across the nation for the service that allows subscribers to watch shows that they missed.

Look Back has been in the works for years and follows in the wake of Time Warner Cable's Start Over service. While Start Over, which was first launched in Columbia, S.C., in 2005, allows viewers to restart a show in progress the same day it airs, Look Back provides a three-day viewing window of opportunity once a program has aired. Time Warner also offers some of the same shows in its on-demand service, which are generally available one to eight days after the original air time.

Time Warner Cable said Look Back, which is free to the cable operator's digital subscribers, would launch with 24 channels in both HD and SD formats.

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.

Time Warner Cable's Premium VoD Service to Launch in Q2 2011

Bloomberg reports that Time Warner Inc. is near agreements with television distributors to make movies available on-demand for viewing at home soon after they run in theaters.

Time Warner expects to start the so-called premium service in the second quarter, Chief Executive Officer Jeff Bewkes said today on an earnings conference call. The company is close to agreements on the pricing and timing after theatrical release.

Studios including Warner Bros. and Walt Disney Co. are in talks for the VOD service with In Demand, a partnership of Cox Communications Inc., Comcast Corp. and Time Warner Cable Inc., Bob Benya, head of In Demand, said in a September interview. The service would cost as much as $30 per showing. Movies will be available in high definition and eventually in 3-D, Bewkes said today.

Pace buys Latens, strengthens its RG/set-top box middleware portfolio

Pace is on an acquisition tear in 2010. First, there was Bewan and 2Wire, and news came this morning that they have purchased Latens Systems. In addition to a portfolio of cardless conditional access products, Latens is more recently known for solutions that transition traditional cable TV to IP, and to allow for multi-screen distribution of content in the home.

Ericsson's IPTV Remote: Another Tablet for the TV Operators

In addition to differentiating on infrastructure and content management, television infrastructure companies are now competing on tablet devices, with the Technicolor Media Touch Tablet vying against the Ericsson IPTV Remote.

Ericsson's IPTV remote gives consumers a single interface through which to control live broadcast TV, on-demand video, Internet video, photos, audio and any media stored on a personal computer or device with storage capabilities. The Ericsson IPTV Remote includes a touch screen so that the consumer can intuitively browse different sources of media, as well as preview and organize playlists. Once a decision has been made, a program can be started on the main TV screen with a single touch. While one person is browsing, other viewers can watch the main TV screen and their selected program is undisturbed

Skitter.TV hybrid box unveiling

Following on the heels of Entone's hybrid set-top box announcement, Skitter.TV has one to make as well. The Skitter Box™ offers live television, over-the-top (OTT) Web video, digital audio and apps in both high definition and standard definition from a single device.

Residential gateway announcements - Technicolor, Motorola, Broadcom, Marvell, and Jungo

Here are several residential gateway-related news releases in the past week or so:

• Technicolor will provide its TG587nv2 to O2 UK Ltd, a wholly owned subsidiary of Telefónica;
• Motorola's 7600 Series of ultra-broadband VDSL2 gateways will be deployed by Swisscom to provide high definition (HD) video, high-speed data and voice-over-IP (VoIP) to its subscribers.;
• Broadcom announced the availability of its BCM6818 Gigabit Passive Optical Network (GPON)-based residential gateway system-on-a-chip (SoC) solution. Broadcom notes that this SoC represents one of the first and most complete hardware and software solutions currently available for enabling advanced GPON-based residential gateway services that include Wi-Fi, voice over IP (VoIP), Ethernet switching and IPTV.
• Marvell and Jungo announced the integration Jungo's OpenRG™ residential gateway software and Marvell's AVANTA™ Application Gateway - on-a-Chip (GoC). With the new residential gateway reference platform, service providers and network operators will have easier access to always-on home services and value-added applications while increasing average revenue per user.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  

More progression toward hybrid TV services in the U.S.? Entone's FusionTV™

Last week, I had written about the potential role of Sezmi and SkitterTV in developing hybrid television services that marry high-definition broadcast channels with online video and interactive feature. Today, Entone introduced FusionTV™, a managed service that provides telco operators with the ability to offer "over the top" (OTT) content blended with linear HDTV programming.

The IPTV Edition of FusionTV is based on Entone's recently announced WebVOD solution which allows IPTV operators to offer web-based VoD services with a software download to Entone's media hubs.

What about advanced hybrid television services in the U.S.? Skitter.TV and Verismo Networks

For now, much of the attention about hybrid television services that combine over-the-air programming with IP video-on-demand and streams from other online video sources has been focused on Europe, and rightfully so. In fact, many "IPTV" efforts in Europe are themselves hybrids, among them BT Vision and Telefónica. Between operator-deployed hybrids such as IPTV and retail-based hybrid approaches, we anticipate that Europe will have more than 60 million households receiving hybrid television services by 2015.

But what about the U.S. market? Up until now, hybrids have been a more difficult proposition, as pay-TV has been the norm. In fact, our recently-released Digital Living Forecast Workbook indicates that pay-TV services will reach approximately 87% of all U.S. households by year-end.

However, there are at least two drivers for the consideration of hybrid services:

1. Consumers are getting more fed up with high television prices and may consider ways to either reduce or eliminate their pay-TV services altogether. In fact, our study All Eyes on Video reveals very little satisfaction for the cost of pay-TV services, with the exception of subscribers to AT&T U-verse or Verizon FiOS services. I suppose these folks are still in the honeymoon stage.
2. Second, the hybrid services themselves are becoming more compelling, both in price and features. Take Sezmi for example - for as low as $4.99 a month (and a $149.99 one-time hardware purchase from the local Best Buy), subscribers receive their local channels an HD DVR, and access to VoD. For $19.99, subscribers receive 80 cable TV channels.

I think that hybrid approaches will be something about which we'll be hearing a whole lot more, particularly with events such as TelcoTV November 9-11. We're already seeing some pre-announcements, including Skitter Inc. and and Verismo Networks.

Skitter.TV is a hybrid IPTV/over-the-top video platform enabling telecom service providers and entertainment content companies to encode, configure, deliver and monetize streaming media services. Skitter.TV provides a broadband media experience on computers, televisions, mobile devices and gaming consoles. The end-to-end video and audio solution includes head-end hardware and software for integrated Web video, live (linear) cable network and broadcast TV, digital audio, and video-on-demand content, delivered over IP via DSL, fiber optics or wireless networks. Skitter.TV's end-user software and program guide offer consumers premium-quality high definition (HD) or standard definition (SD) multiscreen entertainment service that combines live TV, over-the-top Web video, on-demand content, digital audio and apps, all in one unified, remote-control-driven environment.

Verismo Networks announced its next-generation high-definition VuNow Internet TV platform that allows Multi System Operators (MSOs), Internet Service Providers (ISPs) and Telcos to bring linear channels combined with value-added internet applications over the Internet to their subscribers. By using the internet as a distribution method, service providers can rapidly expand their existing footprint and reach new global markets with minimal investment in their infrastructure.

Worldwide broadband households to hit 530 million by year-end; residential gateways top 130 million households

Key Numbers

• Worldwide residential broadband subscriptions are expected to grow from 530 million at year-end 2010 to more than 730 million by year-end 2015.
• Worldwide households with home networks will grow from 50% of all broadband Internet households to nearly two-thirds by year-end 2015.
• Global households with residential gateways are expected to grow from 130 million at year-end 2010 to more than 300 million by year-end 2015.
• Potential connected home revenues for broadband service providers and managed video operators are expected to grow from $16 billion by year-end 2010 to more than $60 billion by year-end 2015.

Inside the Digital Living Forecast Workbook
As the Broadband World Forum kicks off in Paris, France, today, Dallas-based Parks Associates forecasts that worldwide households with broadband Internet service will reach 530 million by the end of 2010. With the strong growth of home broadband connections, service providers are taking a more active role in deploying residential gateways to centralize the delivery of access services and enable new value-added connected home services. The number of worldwide households with residential gateways is expected to exceed 130 million by the end of this year. By 2015, these numbers are expected to grow to exceed 730 million broadband households and 300 million households with residential gateways.

This data comes from Parks Associates newly-released report Digital Living Forecast Workbook, a set of worldwide forecasts in 16 categories including television services, home networks, smartphones, mobile TV, HDTVs, game consoles, and Blu-ray Disc players.

The New Broadband Internet Service Provider Mindset
The mindset under which broadband service providers develop and deploy services is evolving due to two important variables:

• Broadband as a lone service is becoming highly commoditized; as a consequence, “speeds-and-feeds”-based marketing is changing as consumers can get the same or similar services from other providers. In fact, Parks Associates’ research finds that one-half of U.S. broadband households are not aware of the broadband speed they are receiving! This finding indicates that provider promotions on speed alone won’t work. Successful marketing must focus on other factors, such as bundles that combine broadband services with other core access services, high reliability, customer support, and compelling add-on services.
• As competition increases, customer satisfaction and retention strategies become more important. The ability of service providers to offer unique value-added services to their customers is important to retaining customers. Later on, these value-added services will create new revenue streams from high percentages of their subscribers, but providers first must sow the seeds of higher customer satisfaction for their current subscribers.

With the widespread deployment of broadband Internet services and residential gateways comes the opportunity for service providers to strengthen customer satisfaction and potentially grow revenues via the delivery of connected home value-added services.

Moving the broadband service value proposition beyond mere “speeds-and-feeds” includes the provisioning of value-added services that can increase customer satisfaction and create new revenue opportunities. Additional service offerings will fall into one of several categories:

• Entertainment: Access to exclusive music, video, and game content; the multi-platform availability of this content, both in and outside of the home.
• Lifestyle: Additional e-mail features (larger storage), calendaring, photo and video storage and sharing, and online storage and backup for data and digital media.
• Premium Technical Support: Phone, chat, remote, and in-home troubleshooting and fixing services; CE device setup and configuration; managed Internet security and parental control; and additional warranties and damage protection.
• Home and Health Management: Web cameras monitored from Web-connected devices and TVs, energy management features, and health tracking services (vital signs and health monitoring devices).

Consistent with previous Parks Associates’ previous research, recent research shows consumers rating technical support and certain lifestyle value-added services as most highly valued additional services.

We anticipate that the service provider revenue opportunity in the connected home can potentially exceed $60 billion by 2015. This projection is built in the following core services:

• Video-on-demand;
• Health monitoring;
• Residential energy management;
• Premium technical support;
• Smart home applications; and
• Safety monitoring.

It's ADB and not Netgem buying Pirelli Broadband

Instead of Netgem, it's ADB buying Pirelli Broadband, as reported by CED. The set-top box/residential gateway convergence continues.