Exploring the impact of broadband and technology on our lives, our businesses, and our communities.
Netflix raises prices, adds more streaming content
Netflix has announced an increase in the price of monthly subscriptions, which is no surprise, given the popularity of the firm's video on demand service. With Netflix subscribers using 20% of the nation's bandwidth every evening, Netflix needs some way to pay for all that bandwidth. The company has also added a $7.99/month streaming only subscriptions--you can't get any DVDs.
That might be fine with some folks. Since we started using the streaming service, the number of DVDs we watch has fallen dramatically. Watch next for big changes from the content owners, who have been making a fortune on DVDs for the last fifteen years, but the DVD era is just about over. There will be wailing and gnashing of teeth by the TV and movie studios, but in the end, they will make a lot more money by aggressively licensing everything they own for streaming. The truly awful new copyright law is a last ditch attempt by the RIAA and other big copyright advocates to prevent intellectual property theft (e.g. illegal file sharing). But the new law gives the Federal government the ability to shut down ANY Web site arbitrarily simply if an accusation of copyright infringement is made--in other words, without due process. This will inevitably lead to abuse.
I've maintained for many years that the supposed cost of pirated material is overblown by the industry. People that steal music and video recordings, for the most part, would never have actually paid for them in the first place, so the inflated loss of revenue reports are just that--inflated. It's easy to find someone bragging about all the music they have acquired illegally, but they never would have bought it all. And most people are honest; if a product or service is fairly priced, most people prefer to pay for it. The idea of an entire industry starting from the premise that "all are customers, every single one of them, is a crook" has struck me as a bit strange. It's much like the current approach to airport screening: the TSA starts from the assumption that everyone, including the elderly, the infirm, and three year olds, are terrorists. Surely we can do better. And in fact, the huge success of online digital media services like the iTunes store proves that a lot of people are happy to pay fair prices for digital media.
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I'm in the living room reading the newspad
If you have not yet heard about "The Daily," you will shortly. The new digital "newspaper" is a collaboration between Apple and News Corp., and it is designed expressly for tablet devices like the iPad. There will be no Web or paper edition. Hence, we need a new term for this, and I think "newspad" is just right, as it is derived directly from its predecessor, the "newspaper."
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Hulu: Watch all the TV you want for $8/month
In what has to scare the heck out of the cable companies, Hulu has released an upgraded version of its premium subscription service and software while dropping the monthly cost from $9.99 to $7.99. Hulu Plus gives subscribers access to many of the most popular current season "TV" shows. I am going to start putting "TV" in quotes because broadband services like Hulu and Netflix are not the old analog TV, but they sure deliver the same content. The math on getting your "TV" over your broadband connection is pretty compelling. Hulu Plus for $8/month gives the popular current shows, and Netflix for $10/month gives you access to a huge back catalog of American and British shows, as well as lots of movies. Total cost? $18/month, compared to the average cable bill of $60.
What's missing? The news channels, but you can get an awful lots of news off the Web, with the exception of the live news and commentary programs. Expect them along any time. Own shares of cable TV companies? You might want to evaluate the long term potential of that stock.
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Wireless networks groaning under the load: 30X bandwidth increases per year
AT&T has indicated that the use of broadband data on its cellular wireless network has slowed. Over the past two years, the company has seen data usage increase by 3000 percent. In the past quarter, the rate of increase has "slowed" to just 30X, down substantially from the previous 50x increases.
Wireless has a critical long term role providing mobile access to the 'net, and in fact, voice traffic on cellular networks will eventually transition to VoIP service on the data portion, which will free up a bit more bandwidth. The ideal network is fiber rich, with fiber to every home and busines, and with fiber to every cellular data tower to keep those mobile data costs as low as possible. But with Netflix now consuming 20% of the nation's bandwidth every evening, we aren't going to be watching TV and movies on our wireless connections with any reasonable expectation of quality. Their is a structural problem with wireless, and that is that they aren't making any more RF bandwidth--this is basic physics. Fiber? Bandwidth is not much an issue, as the physics of fiber is the opposite of wireless: need more bandwidth on your fiber connection? No problem: push more colors (wavelengths) of light DOWN THE SAME FIBER. Bingo--more bandwidth.
Fiber is future proof. The single most common question we get from elected and appointed officials as we plan next generation, future proof networks for communities is, "How do we know some wireless technology won't come along in five years and make fiber obsolete?" The answer, as I have noted above, is physics; physics makes fiber the safe bet for fixed point access, and physics makes wireless the best bet for mobile access.
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Competition works in the fiber market
Fiberevolution has a short article with a damning slide, showing what Verizon charges for a fiber connection in downtown Boston and what a start up firm is charging for a fiber connection. The start up is offering ten times the bandwidth (100 meg vs Verizon's 10 meg) for a measly 97% reduction in cost on a per megabit basis. Put another way, you can buy ten times the bandwidth for almost 75% less cost ($2700 vs $700). What's wrong with this picture? Well, two things. First, why is Verizon charging so much in the first place, with what has to be a nearly fully depreciated infrastructure? And second, rural parts of the U.S. can't get this kind of rate reduction unless the community itself gets involved. A start up in Boston can go head to head with Verizon because there is enough business in the city to justify the high cost of building new infrastructure. But rural communities don't have the kind of density that justifies overbuilding new completely private networks. The solution for rural communities and smaller cities is to build a single, high performance open access network and let any service provider use it--a shared business model.
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The next business park amenity: Videoconferencing
Design Nine has its corporate headquarters at the Corporate Research Center here in Blacksburg. The CRC recently added a new amenity for its tenants: a state of the art videoconferencing meeting room. We've used the room to save money on travel, and it is something every business park should have. The system the CRC installed is very high quality, with a high quality remote control camera and a very large, wall-mounted flat panel TV. The combination of the high quality camera and large screen gives you a "you are there" experience that is well beyond the typical Skype or iChat software. And the CRC has excellent bandwidth out to the Internet, meaning a clean, crisp image. In a recent meeting, the party on the other side had very limited upstream bandwidth, and it was obvious--what we saw on our end was a very poor image with heavy pixelation.
Want more information? Download our attached handout on the technology business parks need to be competitive in a tough economic climate.
| Attachment | Size |
|---|---|
 BFA_BusinessParks_v1.pdf | 1.93 MB |
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nDanville community fiber expands health care, creates jobs
The nDanville fiber network, owned and operated by the City of Danville as an open access network, has helped a local dentist practice expand services to new locations, and has created jobs doing so. The affordable, high performance fiber has allowed the four office practice to have all dental records available at all four locations, reducing costs and making it easier for patients and the dentists.
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Facebook takes aim at Gmail
Facebook has announced a "modern" messaging system that will integrate email, text messaging, and Facebook messaging. Google's dominance, all of a sudden, is being challenged simultaneously on multiple fronts. And behind the scenes, it is often Microsoft that is leading the charge. Facebook's email service will draw some users away from Gmail, and Facebook has already announced a partnership with Microsoft to use Microsoft's Bing search engine for social search. And Yahoo! recently announced a plan to move to using Bing to power Yahoo!'s search services. Meanwhile, Apple is not standing still, with it's Ping music-oriented social network pushing both Google and Facebook. And Apple has some big plans that are still largely under wraps to challenge Google's Gdoc services.
If Apple and Facebook can provide better and more believable privacy policies than Google, which basically has the attitude that all your personal data belongs to them (check the EULA for Gdocs, which gives them a license for everything you create using Gdocs), the two firms will slowly chip away at Google's dominance.
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Cisco prepares its Cius tablet
Cisco has announced that its Cius tablet device will be available in March. The Cius is smaller than the iPad, with a 7" screen, but will include some business-oriented features that the iPad does not have, like integration with Cisco's very expensive TelePresence videoconferencing system. Cisco's TelePresence is popular with Fortune 500 companies, which have the cash to equip their conference rooms with the system, and the ability for someone in the field to use the Cius to join a videoconference will get some companies on board with the product. The Cius will also have built in support for Cisco's WebEx conferencing tools, although any pad device with a browser could also use Webex. The Cius will probably have a WebEx app, which should provide a better user experience.
What does all this mean? It means more people needed more bandwidth from outside traditional office locations: think home, car, coffee shop, the deli. Communities that have a plan to make high performance, affordable broadband widely available in homes and business districts are going to be seen as very desirable places to live and to work.
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Appitalism combines social media and shopping
Appitalism.com is an interesting new site that combines elements of the iTunes store, Amazon customer reviews, and tight links with social media. This might actually turn out to be a winner, as many of the "shopping" sites tend to lack enough traffic to produce reliable reviews, and in my experience, many listed products on those sites have no reviews. Finally, a lot of those shopping sites are basically just link farms for advertisers. Appitalism puts the control in the hands of users, rather than advertisers, and so I think it is likely the site will get more and better reviews overall.
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