Friday, July 24, 2015

Plugge It To The EU

In 1931 a suave Brit called Leonard Plugge visited the owners of the Benedictine distillery in a small town on the Northern French coast to see their transmitter.

In an eureka moment (possibly lubricated by his guests' product), he decided to take on the BBC who, on Sundays especially, only broadcast a rather heavy schedule of sermons and church services.

Realising that a transmitter on the English Channel could reach the towns of the South Coast he started his service, Radio Normandy.

Very soon he courted advertising for his burgeoning service which, with stronger transmitters, now reached the Midlands of England and was attracting higher listnership than the BBC.

So, he manufactured and started 'plugging' his own brand of face cream which became a massive success and kicked off broadcast advertising in Europe.

Why do I relate this obscure, if important, piece of trivia from the history of the media.

Well, today the EU ba ked up recent moves by the EC and announced an investigation into Sky and their relationship with major Hollywood studios.

The EU is determined to see a single market in media (just like we don't have in anythings else due to pervasive national interests), and this is their opening salvo.

The Board of Sky must have been down the pub celebrating all day.

There is nothing that they would like to see more than a single content marketplace now that they gave rolled up Sky operations in the UK, Ireland, Germany and Italy and have a half decent online service that could be rolled out all over the continent.

The trouble with this is that a single European market may be good for consumers who want to watch the BBC in Slovakia, or Scandie Noire in its original language in Portugal, but it's awful for the production industry in Europe who will be left with many fewer sources of revenue since they will only be able to sell their production once in the whole of the EU.

There is another problem, funding for TV, whether from public service or commercials, is based on borders. Dismantling this will be hugely disruptive and will make it even easier for Big Media and Big Internet from the USA to buy up the best properties. It will also make it easier for them to operate - just look at the problems Netflix has had rolling out in Europe.

So, I reckon there are a load of US media and internet execs joining those Sky guys down the pub.

Meanwhile, the rest of the industry is left out in the pouring rain on this wet summer's day, wondering at why the EU is set to play havoc with a very successful industry.

Leonard Plugge would be revelling in the irony of how the Europe has come a full circle in dismantling its media borders, but the irony is that he was also a Tory MP, and I suspect would be vehmently opposed to what the EU is now proposing.

Tuesday, July 21, 2015

Apple, Things Are Tough, So Can You Now Pay The Money You Owe The World ?

With today's financial results, Apple is now bigger than all but 50 countries around the world. New Zealand is a minnow, as is the Ukraine or Hungary.

But the company has a huge problem. It is generating useless money.

The US has a corporation tax rate of around 35% and California whacks another 8% or so on top (in the UK the total would be 21% and is soon to be reduced to 18%; in Ireland it is 13% for domestic companies, but 3% for Apple).

So, Apple cannot realize its massive profits which are squirreled away in low tax domains around the world.

The result is astonishing. The company actually raises money in the US to pay off its shareholders with new money so that it does not have to bring its dodgy stashes onshore.

This begs major questions about Apple's balance sheet because money that cannot be returned to shareholders is not a liquid asset, but Apple show it as such on their balance sheet.

Meanwhile countries like the US and the UK, and certainly countries like Greece and Spain could perhaps do with Apple paying its tax liabilities at source. 40% of $200 billion is a lot of money (and, to be fair, if you extend this to the likes of Amazon, Microsoft and Google, the overall figure becomes really significant.

'Big Internet', including Apple and Google is now so big it has become a problem that the world has to deal with.

Frankly, these guys make bankers look like saints.

Monday, July 06, 2015

BBC Suffers A Death Of A Thousand Cuts

The BBC is probably the most admired broadcasting organisation in the world. When your budget is equivalent to that of all your main commercial rivals and paid for by a Royal Charter based on minimal accountability, perhaps you can understand how this unique institution evolved.
The world's biggest aspidistra (look it up) exists to inform, educate and entertain, a mandate it has had for nearly a century now.
But of late is has been deaf and stupid, totally ignoring what was going on in the world around it.
Let me provide some evidence of this:
It runs many TV channels that only operate a for a few hours a day such as BBC3, BBC4 and CeeBeebies. What is the point ?
After nearly a decade it is incapable of broadcasting a 24 x 7 HD channel: its local broadcasting laughably falls back to a test card.
It has an enormous bureaucracy and even commissions programmes lampooning its own bureaucracy, such as W1A. This is not self-deprecation, it's a sign of an organisation totally out of control.
It has become a major real estate developer with the building of billion pound projects in Manchester and central London.
Programming has become weak. ITV and Scandinavian broadcasters have stolen the show in drama. 
Meanwhile, the Conservative Party has won a majority in the UK Parliament and they love to hate the BBC with a passion. (Despite the fact that the BBC's Political Editor was the ex-leader of the Conservative Union at Oxford University they think that the organization is a left wing hive.)
So, there has been a gradual and insidious attack on the BBC's finances.
First of all, the BBC was made to pay for a range of new local TV stations along with Welsh language channel S4C.
Next came a freezing of its licence fee.
Then a proposal to decriminalise non payment of the licence at a time when many people were 'cord cutting'.
Finally, a proposal for the BBC to pay for the cost of licences for over 75 year olds (some would argue its main demographic these days) is on the table.
And in the background is the renewal of its Royal Charter.
The BBC is funded by a tax of around £145 on every UK household that watches live TV. That amounts to £3.26 billion (yes, billion...). It also gets £245 million from the government to run the World Service. On top of this it makes just over a billion selling programmes internationally and collecting licences.
This results in a revenue twice the size of the UK's biggest commercial broadcaster, ITV.
The company directly employs over 20,000 people to run four full time and four part time TV stations, around six national radio stations, an online video and audio player and a network of local and national stations that you cannot watch on HD, but can listen to on DAB. Commercial rivals operate on this scale with a fraction of the budget: I estimate that a commercial organisation would employ around a third of this number of employees to run this type of service.
The iPlayer has been a great success, but I will happily offer to run it for one tenth of the current budget with better performance and more features. Like most broadcasters, the BBC keeps on developing its own technology where far cheaper off the shelf solutions exist.
So, that's the situation. The trouble is that everyone at the BBC wants to preserve a status quo in the era of Big Internet - Google, Facebook, Twitter, YouTube, Hulu, Netflix. There are no successful UK internet companies of any scale. We're hugely successful at content production and format development, but ITV is the last remaining major UK owned and backed producer. So what do we do with the BBC ? Surely it is time to redefine it as an organisation rather than just chipping away, piece by piece.

Friday, June 26, 2015

Telco and Media Are Miles Apart

Well that was an interesting visit to the LTE World Forum in Amsterdam. It's been a while since I've interfaced withe the mobile industry and what I encountered was worrying.

I had presumed that the delivery of video over mobile networks was pretty much sorted. All of our clients use MP4 and HLS to deliver an adaptive butrate up to full HD. But the telco industry does not seem to recognise that the internet stack has won the day and was mostly concerned with VOLTE (voice over LTE, or 4G to the rest of us). They do not recognise that Skype and Whatsapp have already stolen this show in the same way as HLS, for all its shortcomings has taken what they call the 'streaming' market.

I was lucky enough to spend the afternoon chewing the cudd with execs from KPN, Deutsche Telekom and NTT (who have already rolled out VOLTE). And they were adamant that the voice clarity and improved latency brought by VOLTE would be a winner with consumers. As someone often stifled by Skype this may be true, but it's going to be a steep slope to persuade users to drop their existing apps.

What is even more concerning was the chasm that still seems to exist between the telco and media worlds, considering the size of some of the cross industry deals going on at the moment.

Thursday, June 25, 2015

Becoming The Video Hub - How LTE Services Can Make The Most Of Video

Presentation by Iolo Jones to the LTE World Forum at Amsterdam RAI, 25th June 2015
About ten years ago, at a similar event in these halls I did a presentation on the technical challenges of delivering video over mobile networks – at the time we were working on building a transcoding farm with KPN. I think a decade on we can all accept that most of the technical problems with delivering video to mobile devices have been tackled successfully. The challenges now are around the business model.
The problem is that most quad play services have become commoditized, almost before networks have been rolled out. The one outlier is TV and video. So, can this be a panacea ?
The trouble with TV and video rights is that they are complex and that there are players in each part of the value chain who want to enter other parts of the value chain as the current flurry of mergers across the globe shows. Companies are placing very big bets in this sector, often to emulate models that have failed in the past.
And the UK is a case in point. If we look at the current situation in the UK market you can see that companies that are good at content traditionally haven’t been good at mobile and vice versa. It was a lesson learnt some time ago by Telefonica after they purchased Endemol, of course, so this is nothing new. Still, it hasn’t stopped many of these companies jumping into bed with each other. There are a few names up there worth mentioning. Tesco, the giant retailer used to be the biggest seller of physical videos on DVD in the UK, now they are totally out of the game despite having a pretty successful MVNO model. Ironically it’s TalkTalk who bought their SVOD service, Blinkbox. Lebara is an interesting entrant to the market with their announcement last week that they are going to push expatriate content to their customer base.
That’s a brave approach and I’ll return to that later, but the current business models revolve around doing nothing, providing a wrapper for existing services – basically carrying apps, aggregating content, or in rare cases, launching an original service. But even in this final category, the tendency is to emulate not innovate.
So let’s look more closely what the issues are: first of all the regulatory environment and the upkeep of net neutrality principles means that it is difficult to do any volume based carriage deals. Your only option with Netflix is to promote them and take a very small cut of their subscription fee as they suck the capacity of your LTE network dry.

Recent proposals from the EC is going to force content to be made available on a pan-European basis, which benefits pan-European operators.

There are still latency issues that preclude models such as added value services in sports arenas, which is something we’re doing some work on with a Premiership team in the UK. Still thousands of people accessing the same content at the same time in the same cell is not going to end well. Ironically, this is where peer-to-peer technology may make a comeback.
Perhaps the biggest problem, and the one I’m mainly going to address today, is that of differentiation. In the world of Me TV, how do you stop your service from being Me Too TV ?
Finally, there the $64 million dollar – and the rest – question is how you make money when it costs so much to buy content, especially premium content in a highly price sensitive marketplace.
But the trouble is, you can’t afford NOT to do anything about it. According to Ericsson, 45% of your network traffic is already video and this is going to rise to 60% by 2020.
But the good news is that there is a younger generation of viewers who consume video and TV content in a very different way and they’re watching lots and lots of video on their smartphones and tablets. And not necessarily short form video either.
So, against this confusing backdrop, how do we change things ? What do we need to do ? Well, I think that an important first step is to change the paradigm and to stop looking at video as a network service, but to look at it as a handset service. In the era of Tv everywhere (with a small e to keep the lawyers happy), the handset is the hub.
So let’s look further at what this amazing device can do. First of all it can take payment and do this in an easy and unobtrusive way. To pay for premium sports events on Sky you have to dial in and pay. It’s not so with mobile billing. I’m utterly amazed how operators haven’t jumped into this space before the likes of Apple considering they already have a billing relationship with the customer. Offering an open payment API would attract content owners.
Secondly it can act as a conditional access pass, so that you can protect the delivery of content.
Thirdly, you can aggregate services into a central view. Unfortunately I currently have twenty or so video apps I have to use to watch everything I want to watch on my mobile.
Finally, and the tech for this is still nascent, it can act as a streamer and a projector – why do you need a box or even a dongle if you can simply stream from your mobile wherever you are onto any screen by wireless comms?
So, these are the things that you’ll need to do, in my view, to enable a great video service over LTE
And then you can start looking at some innovative services. To finish off, I’ve just listed a few here.
Get rid of all those icons and offer one app that talks to these apps and makes it easy for users. Of course this is easier said than done, but there are services like Zattoo and TV Catchup that have come close to succeeding.
The trouble with building your own content services is that it’s really, really complicated and expensive. We own a company called rights tracker that tracks the rights for some of the world’s leading TV properties and this is what one, simple rights position might look like – and there could be thousands of these each difference.
So we’re working on creating a centralised rights marketplace where anyone can push their rights or acquire those rights. This is especially useful for secondary rights, things like the live coverage of sports matched that you can never see again, or slightly older rights for dramas: this is how Netflix established themselves.
There is also the possibility of engendering new business models such as reverse bidding – allowing users to outbid broadcasters for rights.
Then there is the boom in self produced content that is badly curated on places like YouTube and is currently fragmenting onto multiple platforms such as Vine and Facebook. Already services like Digg and Buzzfeed are curating and aggregating a service based on these feeds, becoming the new broadcaster networks in the process.
Finally, back to Lebara and to one of my favourite approaches to building a market. You don’t have to try and get everyone day one - Zuckerberg started with Harvard - you can start with minority interests and aggregate audiences. The costs and the content are far cheaper and viewers are more fanatical and willing to pay.
Of course, this is only the start of the story and if you’d like to discuss this any more I’d love to hear from you. 

Tuesday, June 23, 2015


Cloud TV specialists TV Everywhere have launched vid\coding>, a new cloud based video encoding and archiving service for video using Microsoft’s Azure cloud.
The high latency, low cost video and TV encoding service offers high throughput encoding and adapts to the user’s content processing requirements with the aim of reducing costs for content producers in versioning and distributing their content.
“A film company may only want to occasionally upload a trailer or a screener and ultra high quality is more important than speed,” explains TV Everywhere CEO and vid\coding>, co-founder Iolo Jones. “A news organisation, however, will have much shorter items that they need to process as quickly as possible. vid\coding>, can dynamically adapt to these scenarios. The result is a service that is typically cheaper than systems such as Amazon Elastic Transcoder with faster speeds and better quality output.”
The master, along with versions of the files that will play out on all mainstream platforms and devices, are then made available via an embeddable player and individual streams.
Features include:
• Drag and drop uploader
• Upload from mobiles and tablets
• Support for broadcast and internet file formats
• Adaptive encoding
• Metadata editing
• Configurable profiles
• Player builder
• Redundant, secure cloud storage
The system also supports processing for broadcast distribution such as the UK’s DPP and US’s CableLabs and AMWA specifications. Users can also specify their own encoding parameters.
“Even if you need to distribute fifty or sixty technically different versions of the same production, vid\coding>, can easily enable that,” adds Jones.
The system leverages Microsoft’s new Azure Batch service which is to be launched in June 2015 and will also be offered to third party online platforms and cloud based systems that wish to integrate video processing into their systems via vid\coding>,’s comprehensive API.
Try it out here:

Friday, June 19, 2015

Twenty Five Years Gone - Startups in 1990 and 2015

Well, it's been an interesting few months. I've been gearing up to my first major business launch for a while, a mere 25 years since I started my first company.

Back in 1990 I was told to wear red for our threadbare Christmas party at the multinational ad agency where I'd been working and instead walked out to the bar over the road, handing in my notice in the process. It was the last straw for someone who is by nature unemployable.

Since graduating in Radio, Film & Television I had been a runner, a special effects film editor, a cameraman, a financial PR exec and a marketing exec in five short years. It was clear that I wasn't very good at working for other people.

But a young 25 year old with a couple of grand in the bank, no property and no rich connections starting a business in one of the world's most expensive cities did not seem to be a stupid proposition to me at the time. So, with blithe disregard to the difficulties, I won some business as a film maker, found that some high profile marketing clients such as The Law Society and the Police Federation would follow me and set up a company that would see me veer from the low of hiding in the toilets of our Covent Garden offices from bailiffs sent by the taxman to selling out to one of the world's largest ad agencies.

Being young and naive has its benefits and its downfalls when starting a business, but when you're young you know no fear and anything is possible.

So, twenty five years later, starting a new business again, what has changed ? Well, pretty much everything. Back then all my business came from mates, often over a pint or two in West End pubs. We also did a lot of things other people didn't do, like multimedia, so there was a scarcity value to our offering. Back in those days you could actually provide a service with little or no competition. We didn't have a company - partnership seemed just fine, and were a bit (ahem..) haphazard in our dealings with the taxman. But we survived to sell out to a plc a few years later.

For my latest venture, I created a company (online), set up the accounting system (online), opened a bank account (online), built the website (yes, you guessed..) in under a few hours. Using a couple of my most trusted techies we had the system up and running in a few weeks.  What would have taken months can now be done in a fraction of the time. But this comes with costs. 

It is far easier for anyone to find a good designer and programmer now using online marketplaces. With a bit of imagination anyone can conceive an online business and get it to market in a few months. So the reality is that you will have competition.

Once upon a time building the product used to be the difficult step, but the challenges now are in selling into a marketplace where all the rules have changed with intense competition.

Twenty five years ago it wasn't difficult to find individuals with the ability to pay six figure sums for a product or service. Today, purchasing is consultative and involves endless rounds of presentations and proposals even for very small projects. And the value of projects has diminished as well. For example, back in 1990 starting a TV channel in the UK would have cost tens of millions, now we launch global channels for customers for hundreds of pounds. We live in a dollar to cents world.

The alternative to the direct sell model is to take the online service model whereby products and service are offered at the fraction of the price of traditional delivery by commoditising them and placing them online. Inevitably you have to offer a free 'taster' and this becomes a numbers game. In the old model you could win ten clients each paying a six figure sum and have a decent business base.

In our new, online world you need a hundred thousand customer paying a tenner each to get to the same place. And in order to get hundreds of thousands paying you need to get millions using the free version.

To find this mass of customers there are new models - first of all you have to pay the Google tax - there is little alternative if you want to build mass audiences online. So, you end up with an acquisition cost per customer. In the old days we used to issue paper press releases sent by post to trade magazines. Today you blog and tweet in the hope that you will be heard in the maelstrom of online noise out there.

Success and failure becomes more binary.

And you will have competitors, no matter how innovative you are, and those competitors can come from anywhere in the world, including low cost economies where their overheads are miniscule compared to a startup in London or NYC or from Silicon Valley where they will be backed by tens of millions up against the value of your second mortgage.

Servicing your clients once you have won them is also a totally different proposition. The old model was to take them out to a boozy lunch once every few months (you've seen Mad Men...). And even if you did lose a client, it was unlikely that the news would go beyond a small headline in an industry mag. Today customer support is an unremitting 24 x 7 x 365, global and unforgiving. A small blip or a difficult customer, even one using your free service, can trash your reputation and everything that you have built overnight.

Of course there's a lot that has improved in twenty five years. You can manage your accounting, tax, development, delivery and support online from anywhere in the world. It is much easier to make money while you sleep, or just work to your own pace.

But the major difference I believe is that it is now far, far harder for a startup to succeed due to low margins, global competition and, ironically, the ease of setting up a business.

So, how is my latest startup doing ? Well it's early days, but you can judge for yourself at and by following