Archive for July, 2005

Podcast by Paul Budde – Unstoppable Fibre-to-the-Home Developments

Friday, July 29th, 2005

With little competition dynamics available in the Australian market there has not been a big push for fibre-based network. Ultimately these networks are going to replace the current copper-based and HFC-based telephone and cable TV networks. These upgrades will take 10-15 years to complete. The first large-scale projects will be implemented between 2005 and 2008. Telstra’s announcement of a careful start has certainly created renewed interest in this development. Was Telstra pushed by developments such as Bright’s FttH pilot in Perth and the deployment of FttH by councils in new developments in Victoria? Also utilities are pushing fibre deeper and deeper into the market.

Japan already has already over 1 million FttH users and US telcos have launched a U$75 billion push into this market. Interesting developments are also happening in the Netherlands, Sweden and Iceland.

Duration: 17 minutes

Download: Fibre-to-the-Home (FttH) (mp3 – 6.9MB)

For further information see:

Global Broadband reports
Technology Reports

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Podcast by Paul Budde – Triple Play through IPTV

Friday, July 22nd, 2005

With broadband rapidly reaching mass market proportions, users are preparing for the converged market that is unfolding before our eyes.

It takes from 18 to 36 months for the first 25% of broadband users to make the move from ‘always-on-Internet’ (for which 300/500Kb/s is sufficient) to the 2Mb services needed for video clips and broadband TV.

Customer demand among this group of users is currently running ahead of supply, but the supply is rapidly catching up.

This, in its turn, will further boost the content market, which is more than ready to deliver video-based services. Dating back to the dotcom years, literally thousands of content providers are ready to start marketing a range of video-based services.

The industry will need to come up with some very interesting triple-play models, which need to be highly marketing-driven – and at levels of sophistication hitherto unheard of in our industry. Consumer Electronic (CE) vendors are going to play a key role here, driven by the insatiable demand for DVDs, LCDs and plasma screens – and soon DVRs. These devices, on their own, will increase demand for content services that match customer experience.

Companies such as News Limited would like to turn this into a market based on proprietary products, but it is to be hoped that industry standards will prevail. Digital TV, iTV and a range of developments coming from this industry are going to supply another interesting dimension to this rapidly converging market.

Duration: 14 minutes

Download: Triple Play (mp3 – 6.2MB)

For further information see: Convergence Reports

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HOW TO MAKE MONEY IN TRIPLE PLAY

Tuesday, July 19th, 2005

Just like the telecoms market, where the business models and revenue streams are altering, the broadcasting (FtA, cable, satellite) industry is also experiencing a period of change.

Broadband continues to eat away at customers in the broadcasting market, and this will only increase since, with higher speeds, access to more and better video content is only a matter of time.
To date (since the late 1970s) iTV has failed to deliver interesting new business models and, despite renewed attempts, I remain very pessimistic about its future revenue opportunities.
Ad-skipping technologies are hugely popular amongst users, but could severely undermine the all-important adverting revenue streams.

At the Triple Play Roundtable on May the 18th we will discuss the many business issues in relation to Triple Play (see below)

Broadcasting monopolies will crumble
For the past 20 years broadcasters have generally failed to embrace new developments that the telecoms market has on offer (videotex, datacasting, Internet, new digital TV options, broadband).

Instead they have preferred to use their political influence to maintain their monopolistic structures, blaming the so-called scarcity of radio transmission spectrum and the high investments needed to operate in these markets.

Both these issues are now largely outdated, and it will be interesting to see how long politicians will continue to protect these TV moguls, each of whom are now amongst the most richest people in the world.

I have no quarrel with financial success, but they have achieved this through monopolies, not through competition – at best, most of them offer very mediocre services to the public. If they were confident of their business model they wouldn’t need the government protection they currently ask for and receive.

The broadcasters still have not identified broadband as a new and richer media platform – one that they could use to explore new video-based services, structured around completely new business models. They tend to perceive it as competition, but in the end broadband is nothing more than a delivery platform.

Tens of thousands of new video services
In the meantime tens of thousands of new video-based services are available via broadband, and higher speeds will only bring more and better video content to the hundreds of millions of global broadband users that are being, and will continue to be, connected over the next ten years. This is no longer an ‘if’ statement – it’s not even a ‘when’ any longer. It is now only a ‘how’ question – how are the traditional players going to participate?

If they wait long enough erosion will undermine their existence in this market.

New advertising models are overdue
Rather than trying to stop ad-zapping services, look for what different approaches to new media devices can deliver (DVR, media centres, etc). Last year a video clip from BMW was downloaded more than 3 million times within the first week after it became available. And this happened without advertising, simply by word of mouth. Trying to stop ad-zapping is like trying to stop water flowing. Customers know it is available and will demand it, preferable legally – otherwise ‘illegally’.

The industry keeps looking at traditional advertising concepts and based on these old models will try to use new technologies to invade the customer’s home with pop-up ads, similar to the ones you get on the Internet. These can be based on individual viewing patterns.

This is certainly not something people will be looking forward to. Pop-down menus that users can control to access additional information are being considered, and this perhaps has more appeal, but TV watchers are notorious couch potatoes and the TV is very much a passive device.

Why is permission-based not taken seriously?
For over five years I have been advocating permission-based models, in which the customer can indicate what sort of commercial information he/she is interested in, and, in a kind of trade-off, for example by offering special entertainment content (movies, music clips), a one-to-one communication relationship between advertisers and customers can be developed.

I am puzzled as to why we hardly ever hear of this, as I am convinced that it will be one of the key commercial models of the future.

As with the BMW clip example I can envisage that advertisers use movie stars, pop stars, other celebrities, specialists and experts with all sorts of interesting information that can be made available to their customers – this then provides an opportunity to also discuss their products, services, viewpoints, concepts, etc.

We need an innovative media and advertising industry
The media industry and its related advertising industry are experts in these markets, and it sad to see that, instead of looking forward, they continue to live in the past.

Again, they are looking at walled gardens to protect their royalties. As I argued during the dotcom years, don’t rely on vertically-integrated models – focus on ‘best-of-breed’ services. Vertical models can only deliver a mediocre service, while more and more customers are demanding better quality and more choice. This is why customers will always jump the walls. They did so when companies such as MSN, Excite, AOL, @home and others launched their walled services, portals, closed shopping malls, etc, and the same will happen in this new broadband environment.

What great opportunities there are for the traditional media and adverting companies if they could only look at broadband as a new business opportunity, and not as a threat to their traditional models.

Paul Budde

Roundtable with Paul Budde – Wednesday 18th May 2005
costs $350 pp excl GST

Strategic Workshop with Paul Budde and industry expert

Theme: Convergence, triple play and broadband TV.
AGENDA
09.30 – 10.00
Arrival, networking and coffee

10.00 – 10.15
Welcome, introduction of delegates

10.15 – 11.15
Triple Play – the business model to move forwards – Paul Budde

11.15 – 11.45
Morning coffee

11.45 – 12.15
Case studies TransAct, Tascolt, Whittlesea – Robin Eckermann

12.15 – 12.45
Broadband TV the start of the video content revolution

12.45 – 13.45
Light lunch

13.45 – 14.15
ADSL2(+) gateway to triple play – Andrew Young CEO Alcatel

14.15 – 14.45
Corporate Triple Play – hospitality, hospitals, residential development
Nick Duval – Allied Telesyn

14.45 – 15.00
Afternoon coffee

15.00 – 16.30
Roundtable discussion with delegates

16.30
Close – drinks in the bar

With broadband rapidly reaching mass market proportions, users are preparing for the converged market that is unfolding before our eyes.

It takes from 18 to 36 months for the first 25% of broadband users to make the move from ‘always-on-Internet’ (for which 300/500Kb/s is sufficient) to the 2Mb services needed for video clips and broadband TV.

Customer demand among this group of users is currently running ahead of supply, but the supply is rapidly catching up.

This, in its turn, will further boost the content market, which is more than ready to deliver video-based services. Dating back to the dotcom years, literally thousands of content providers are ready to start marketing a range of video-based services.

The industry will need to come up with some very interesting triple-play models, which need to be highly marketing-driven – and at levels of sophistication hitherto unheard of in our industry. Consumer Electronic (CE) vendors are going to play a key role here, driven by the insatiable demand for DVDs, LCDs and plasma screens – and soon DVRs. These devices, on their own, will increase demand for content services that match customer experience.

Companies such as News Limited would like to turn this into a market based on proprietary products, but it is to be hoped that industry standards will prevail. Digital TV, iTV and a range of developments coming from this industry are going to supply another interesting dimension to this rapidly converging market.

These exiting new developments will be addressed at the Roundtable where we will discuss these issues with the key players in the market.

Cost:
$350 per person (excluding GST) – this includes morning/afternoon coffee and lunch

Venue:
The Observatory Hotel
89-113 Kent Street, Sydney

Booking:
Call or e-mail Christine Lewis to make your booking:
Telephone: 02 4998 8144
E-mail: pbc@budde.com.au
Online registration

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THE FUTURE OF BPL

Tuesday, July 19th, 2005

With development and roll-out costs below those of DSL and other telco-based broadband infrastructure, the market for BPL (broadband over powerlines) remains positive – this despite the several obstacles that continue to hinder the industry.

After the FCC opened up the market for BPL in the USA, over 20 trials and pilots have been launched and progress is slowly but surely underway.

With mainly low-risk-taking utilities involved in this market it will be interesting to see if their low costs models are enough to beat the telcos. They can afford a slower approach as most of them will also use BPL for Demand Side Management (DSM) services, such as switching on and switching off facilities for appliances, meter-reading, etc

Their return on investment models are vastly different from those of the telcos, but the telcos, of course, have a great deal more experience in this market.

Furthermore, there are still no good role models out there in the market. For years countries like Spain and Germany have threatened to introduce large-scale commercial roll-outs, but most roll-outs are more in the mode of the niche market.

Not that there is nothing wrong with that, but BPL has the potential to go well beyond regional and other niche markets. Their much better symmetric broadband offerings are ideally suited to the small business market, but until we begin to see some runs on the board it just remains a promise.

As with WiMax, standardisation is a key issue. Only after this happens will you start seeing competitive user equipment. So far utilities need to subsidise their expensive proprietary modems and these need to be replaced once the standardised products begin to arrive. How much longer can the industry wait to get their act together and ratify a standard?

While the interference issue remains another problem area, rules in the USA and Europe are now relaxed enough for BPL to happen. Authorities here are satisfied that under their regulations essential services are sufficiently shielded (ambulance, fire brigade, aviation, maritime, etc). I am advocating the establishment of a close cooperation with the radio amateurs, in order to find models that would also secure their ongoing requirements in this market but I have so far not been very successful in getting them involved in constructive discussions on the topic.

Global – Utilities – Multi-Utilities Markets
Global – Utilities – Powerline – Projects and Pilots
Global – Utilities – Powerline – Technology
Global – Utilities – Powerline – Trends and Developments in 2005
Technology – Infrastructure – Last Mile 9 – Broadband over Power Lines (BPL)

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Podcast by Paul Budde – The Latest Developments in Broadband Powerlines

Friday, July 15th, 2005

Significant developments are taken place in Australia. The ACA is preparing a regulatory framework for commercial roll outs and four utilities in Australia have indicated their roll out intentions. The first large scale trial will start in Hobart in June.

There has been good progress internationally as well: from Fiji to Europe and the USA. The FCC (regulator USA) has also thrown its support behind PLC as an alternative broadband infrastructure development. The European Commission has launched its own PLC initiative for the same reason. Around the world governments and regulators are stepping up their efforts in the creation of new infrastructure developments that, in particular, could assist them to extend broadband into regional areas.

Duration: 14 minutes

Download: The Latest Developments in Broadband Powerlines(mp3 – 6MB)

For further information see: Global Broadband Utilities(BPL,PLC)

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