Wednesday, November 22, 2017

No Single Market For Rights

So, the EU has backed down and is not going to create a single market for TV and sports rights (apart from news).

This is a sensible decision for those who make a living from producing Scandy noir, French art house cinema or British format TV, but bad for consumers. Regular readers of this blog will know that I railed against the proposals, largely from self interest for our rights holding customers, but also to stop the further erosion of the European TV and film industry in the face of an onslaught from US Big Internet. (It does, however, show how flawed the very idea of the EU is - there may be single markets in some things, but there isn't for tax, pensions or rights.)

It also shows that rights management is not going to get any easier - having multiple tiers of legislation in world with multiplying distribution opportunities makes things complex, to say the least.

Meanwhile, the FCC has put forward plans to dismantle net neutrality in the US. A very fragmented marketplace is evolving for delivering content.

The FCC's proposals would open the way for every ISP and cableco to charge OTT providers for delivering their service (with some justification since they have put in place the expenditure to enable the delivery of the content in the first place). So, sell your Netflix shares and buy some in AT&T...

Even in Europe, the IPS remain the gatekeepers, albeit having to respect the rules of net neutrality (don't expect the EU to turn their back on this any time soon).

So, it's hardly surprising how much integration there has been between service providers and content producers recently (Comcast/NBCU, AT&T/TimeWarner (blocked), Liberty Media/F1, etc..).

And, hot off the press, comes the new digital royalties tax on Big Internet in the UK announced in the Budget today.

The likes of Netflix and Amazon want to buy and offer rights on a global basis for their customers. Until the pesky legislators get in the way. The past few days have been good for rights holders and bad for Big Internet.

Still, if your business is concerned with managing rights, we live in interesting - and complex - times.

Tuesday, November 21, 2017

Revenge Of The Trump

Whatever you hear, there’s little doubt that the blocking of AT&T’s takeover of Time Warner was politically, or perhaps more accurately, ego driven.

Considering its size and capabilities, Time Warner, which was once taken over by internet has been AOL, is a bit of a mess. This just shows how the vision of internet TV, a bit of a joke a decade ago, is finally eating the world’s largest media companies alive.

They are competing with tech companies like Apple and retailers like Amazon now.

The current thinking is that network + content = a future.

Actually, it’s about market position.

It confounds me that the likes of Netflix and Roku are still independent.

Disney acquired BAMTech, the tech arm of the US basketball league, Comcast a long time ago bought video platform pioneers theplatform, Aussie telco Telstra bought Ooyala.

But the tech is secondary.

The market is wide open for a decent Netflix like sports proposition, and for niche services as add ons, just like current cable works.

The old guard are clinging on to the lifeboats on their sinking ships. They never saw that iceberg coming. 

There is value in brands - Disney is looking to leverage Marvel, Pixar and Star Wars for its new service - but there is nothing better than defining an audience and delivering what it needs, not what media multinationals, rights owners or big internet need.

The likes of Facebook and Google have bamboozled a global generation into buying into their services and giving away, well, everything to them.

Whilst no one was looking, Netflix did the same, and Roku is the tech that Apple really needs in its universe, but they’re too hubristic to make that move and will try and fail again to tackle TV on their own. Just because they conquered music...

But back to Trump, whose FCC is about to reverse Al Gore’s net neutrality laws. The Administration takes away with one hand and gives with the other. If net neutrality goes, then content ownership becomes less important than content delivery, and Comcast can charge Netflix $5 per user per month. Essentially Netflix becomes unecconomic and has to become the content arm of a telco. Unless that merger is blocked, of course....

Friday, November 10, 2017

What Price Netflix ?

During a get together of IPTV industry techies last night the conversation turned to the quality of video delivery and a couple of people speculated that Netflix was losing money on just delivering its streams, before factoring in the cost of the content, storage and overheads. 

It’s clear that the company has successfully bought market share, and has recently put up its subscription prices. But Disney this week announced that its forthcoming OTT service, featuring Pixar, Marvel and Stark Trek content  will be significantly cheaper. 

So, what does it cost Netflix to deliver content ?

Well, if you’re watching five hours a day, every day at a reasonable data rate, the cost to Netflix is under $1 (based on the wholesale CDN pricing published by Streaming Media).Of course, the vast majority of subscribers won’t use Netflix every day - it’s still very much an ‘on top’ service.

So, Netflix is not going to be pulled under by the cost of delivering its streams (and these costs continue to fall year on year). Storage costs are also likely to be tremendous, but spread over 100 million users globally is likely to negligible on a per user basis. The cost of content production, however, is another matter...

Friday, October 13, 2017

The Tax Timebomb

A lot of people have finally woken up to the damage Big Internet is doing as it bulldozes its way to global domination: whole business categories that used to support a complex ecosystem of successful businesses is swept away in favour of one Silicon Valley monster with endless funding.

There have been issues around workers’ rights (Uber, Deliveroo (which, OK, is not from the Valley)), residents’ rights (Airbnb), monopolies (Google with search and advertising), high street decimation (Amazon). The list goes on and on as politicians and ordinary people alike realise what chumps they have been in regarding these aggressive businesses as some kind of social saviours.

But the real problem with these companies is that they are putting companies that pay tax out of business.

Amazon’s last corporation tax bill in the UK was £11.9m on sales of £5,300m. To be fair, Tesco claimed back £54m in the same period. But what you have to do is to offset agains this the rates paid in every high street in Britain by small and large companies, and the corporation tax paid by all those retailers. 

Similarly, the rates and tax payed by hotel groups far outweighs the £188k paid by Airbnb on £657m of bookings.

The same picture extends to broadcasting, where the likes of Netflix and Amazon (again) do not have to pay the broadcast licences demanded of ITV. Netflix paid £300k on revenues of around £400m in the UK. ITV paid £71m on similar revenue.

Do you begin to see the problem ?

The Tories are promising an end to austerity, the Labour party has massive, massive spending plans, and the only people left to pay for these are you or I, since there will be no tax revenues for our health service, education or transport system from Big Internet, and there will be no competitors to oay the tax either.

Just the smug smiling billionaires who we seem to admire so much.

Tuesday, September 12, 2017

Back To The Future

So, here we go again. Another new iPhone which has a few features that rival phones have had for years.

Still, it is enough to keep the world's most valuable company in the margins to which they are accustomed since there are enough of us schmucks out there and a total lack of real competition in the cellphone market.

Meantime, in Frankfurt car manufacturers are still launching 'concept cars' which basically reflect what Tesla did five years ago, and in Amsterdam a bunch of big TV vendors are flogging half baked cloud solutions which we reinvented at TVE a decade ago.

Welcome to 2010.

Wednesday, September 06, 2017

All Change For Video Formats

It's happening again.

Every few years a new wave of technologies hits the video industry and everyone gets very excited and confused.

As a rule, evolution wins out over revolution, but in the world of video delivery things are getting complicated.

First of all it's probably explaining a little about the technology.

In order to get video from a server to a viewer of Netflix or iPlayer you usually have to encode it using an audio codec (e.g. AIF or MP3), a video codec (such as H.264) and then place it in a wrapper (e.g. FLV or MP4). Finally you have to deliver it using a transport stream such as RTMP or HLS.

And this is where the major changes seem to be coming.

There are two main drivers for the changes ahead.

First of all there's copyright - many of the codecs such as AIF and H.264 and its update, H.265 (or HEVC) are proprietary, meaning that licence fees potentially need to be paid every time you use them.

The second driver is efficiency. Ten per cent improved compression with no quality loss means tens of millions of pounds to the likes of Google and Netflix.

So, just as Flash video and RTMP delivery breathed their dying breath (largely thanks to the late Steve Jobs' aversion to Flash), with HLS and MP4 becoming an industry norm, two new battles are developing.

For video codecs it's between the proprietary HEVC and the 'open' standard AV1  The former is an evolution of the ubiquitous H.264, whilst the later is an amalgamation of Google's VP9 codec (acquired with On2) with codec fragments from other companies such as Cisco, and is surprisingly backed by the likes of Microsoft. The AV1 still doesn't have a streaming format, but Netflix are rumoured to be already using it for their download files.

Meanwhile, the battle of the transport layer is between the currently dominant HLS (HTTP Live Streaming) and the newer MPEG- DASH.  

Here there is less controversy - HLS is a very poor protocol developed by Apple to get around using proprietary competing methods for streaming video.

Both work in similar ways, but MPEG-DASH has substantial advantages and is already widely deployed by major streamers such as the BBC. 

So, it looks like the future is AV1 over MPEG-DASH. Or is it ? Google, Microsoft, Itel, AMD, Netflix, Hulu and many others are on one side. Apple is on the other. Place your bets...

Wednesday, August 23, 2017

Where Does All The Sports Go ?

Today I was off work. There were no interesting sports on any of the UK networks (yes, you can pay Sky a huge amount to watch nothing...).

So, I thought, why not either catch up or watch some on demand games.

But there aren't any.

Of the roughly 50,000 hours of top class rugby played in the past year, only a few highlights are available.

The same goes for pretty much every other sports. Yet the likes of Netflix and Amazon have built massive businesses with on demand. Why don't they just buy these rights for next to nothing since they're unused...?