Posts for 'Broadband ISPs'

Comcast is on an epic roll. Despite years(!) of cord-cutting warnings by the blogosphere and analysts, Comcast once again proved the naysayers wrong, adding 53K video subscribers in Q1 ’16. It was the best first quarter in 9 years for the company and easily eclipsed the loss of 8K subscribers in Q1 ’15.

The Q1 gain builds on the strong year Comcast recorded in 2015, losing just 36K subscribers vs. a loss of 194K in 2014. Remarkably, Comcast now has 25K more video subscribers that it did one year ago (22,400K vs. 22,375K).

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ISPs NetZero and Juno, both part of United Online, will deploy Synacor’s web portal, which includes syndicated content including “Don’t Miss” an original video program covering TV shows, the companies announced this morning. The portal also includes joint monetization opportunities. The portal uses responsive design for optimization across desktop and mobile devices. NetZero and Juno maintain over 1 million active accounts across broadband, mobile broadband and high speed dial-up.

Akamai has released its Q3 2015 State of the Internet report and, as always, it is chock full of details about global Internet connections. One of the more interesting data points Akamai found related to online video is that 15% of the world’s Internet connections now average 15 mbps or higher, the speed Akamai has designated to be “4K ready.” That’s up from 12% in Q3 ’14.

South Korea once again had the highest percentage of connections above 15 mbps, at 45%, which was actually down from 66% in Q3 ’14. In second place was Sweden at 38%, up from 29% a year ago, followed by Norway at 37%, up from 21% a year ago. Switzerland and Hong Kong  (both at 36%) rounded out the top 5 countries that are 4K ready.

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Sandvine has released its December, 2015 Global Internet Phenomena report, revealing that video and audio traffic now accounts for 70.4% of North American downstream traffic on wired networks in peak period. Sandvine said that 5 years ago, video and audio accounted for less than 35% of peak period traffic.

Netflix has become even more dominant in the past year, now with 37.1% of downstream traffic, up from 34.9% that Sandvine reported in November, 2014. Among other popular services, YouTube was in second place with 17.9% share (up from 14% share in Nov. ’14), Amazon Video was fourth (3.1% share, up from 2.6% in Nov. ’14), iTunes was fifth (2.8% share, flat from Nov. ’14), Hulu was sixth (2.6%, up from 1.4% in Nov. ’14) and Facebook seventh (2.5%, down from 3% in Nov. 14).

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I'm pleased to present the 295th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week we dig into Yahoo’s decision to write off $42 million related to 3 of its long-form original programs, including the high-profile “Community.” As Colin and I explain, Yahoo faced a lot of headwinds from the start in making these a success. Yahoo’s bellyflop is actually not a big surprise and it’s a yellow flag for others interested in providing long-form content.

We then transition to talking about why HBO Now’s distribution with large pay-TV operators / broadband ISPs is stymied. At the WSJD conference this week, HBO CEO Richard Plepler lamented the company’s lack of progress. But as I explain, HBO Now represents more cord-cutting risk than upside opportunity to most operators (for more color on that, see here). Colin disagrees and thinks operators should be more aggressive. We have a healthy debate.

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It’s been a rough few weeks for all companies in the TV and pay-TV industries as cord-cutting and advertising shifts have taken center stage. Stock market sentiment has turned bearish as investors have extrapolated that the long-stable days of TV and pay-TV are officially over.

But a more granular analysis of actual video and broadband subscriber data for Q2, as well as a clearer understanding of what’s driving the market forward, suggests that such a broad brush approach to all players is misplaced. In reality, big cable operators had a standout second quarter in both video and broadband and should be poised for even further gains going forward as OTT becomes the single biggest industry influence.

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Charter Communications will acquire Time Warner Cable in a $78.7 billion deal, while also continuing its plan to acquire Bright House Networks for $10.4 billion. Assuming the deals close, Charter would become the 3rd-largest pay-TV operator/broadband ISP in the U.S. with a total of approximately 23.9 million subscriber relationships.

Like the prior Comcast-TWC transaction, these deals are driven by the desire for greater scale which supports the huge investments required to innovate in video and broadband services. In this morning's analyst call, Charter CEO Tom Rutledge repeatedly referenced the ability to spread investments over the larger subscriber base as a key benefit of the deals.

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Today Cablevision announced a first of its kind distribution deal with Hulu. The deal follows the introduction of Cablevision's new low-cost "cord-cutter" package (broadband plus a free OTA antenna) last week and its agreement to promote the new HBO Now OTT service. Given all of this I think it is now virtually guaranteed that Cablevision will soon announce that it will also distribute/promote Netflix.

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With the FCC voting 3-2 to enact net neutrality regulations under Title II of the 1934 Communications Act, the focus now shifts to how Comcast proceeds on its planned Time Warner Cable acquisition. The $45 billion deal, combining the two largest U.S. cable TV operators, was announced in February, 2014, and has been in the regulatory slow lane for months as net neutrality took center stage.

Once perceived as virtually guaranteed to be approved given Comcast's formidable lobbying apparatus, the deal is now seen as having no better than a 50-50 chance by many analysts. While Comcast continues to express confidence the deal will be approved and close in early 2015 (and even internally circulated a combined company organizational structure), the dynamic regulatory, political and industry landscapes make any bets on the deal's outcome a total crapshoot.

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I'm pleased to present the 262nd edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Today we candidly discuss the potential impact of the FCC's new net neutrality regulations.

Over the past 20 years we've all benefited from a continuous improvement in wired and mobile broadband connectivity (albeit not perfectly consistent by geography or provider), fostered mainly by a "light touch" regulatory environment that spurred private sector ISPs to invest tens of billions of dollars in network upgrades. Content and services have flourished across both wired and mobile networks.

Although I strongly believe we should continue to have an open Internet, and have no issue with rules that would have ensured that, I explain why using the 80 year-old Title II model to classify broadband as a utility was incorrect. Mainly I believe it will drive lots of litigation and create lots of regulatory uncertainty for broadband ISPs, which translates into disincentives to invest and further upgrade their networks. As a result, ongoing innovations in content and services, which rest on the foundation of broadband improvements, will inevitably be impacted.

Further, I'm always wary of the risk of "unintended consequences" that accompany any new regulations. As such, preemptive regulation - such as yesterday's - where no fundamental problem even yet exists, makes me even more anxious. In short, my attitude is "don't fix what ain't broke."

I fully recognize that I hold a minority opinion on this because I've discussed the topic with many people in the industry already. Colin disagrees with me, for example, because he believes the disincentive to invest argument is overblown. Unfortunately, I think the whole net neutrality debate has become so confused and politicized that any real purpose of potential government intervention has long since been lost.

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I'm pleased to present the 259th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

First up this week, we discuss mobile video's explosive growth. Cisco's new forecast puts mobile video's share of overall mobile traffic at 72% by 2019, up from 55% in 2014. Mobile video will account for 17.4 exabytes out of the 24.3 exabytes that cross global mobile networks in 2019. We dig into the contributing factors.

Next up, this week saw the long-expected announcement from FCC chairman Tom Wheeler of net neutrality rules for broadband ISPs. The proposed reclassification to Title II follows President Obama's strong recommendation. While I agree that broadband is now a lifeline service, to me this still feels like a solution in search of a genuine problem. Colin disagrees and thinks Title II is the right move. We also discuss the prospects for approval of the Comcast-Time Warner Cable merger in light of the new regulations.

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Akamai has released its Q3 2014 State of the Internet Report, its compendium of global connection speeds and broadband adoption for fixed and mobile networks, along with 4K readiness, attack traffic and IPv4/IPv6 updates. Among the highlights are that broadband adoption rate reached 60% globally, a 1% increase vs. Q2 '14. (Broadband is defined as an average connection speed of greater than 4 mbps.)

South Korea once again led all countries with 96% adoption above 4 mbps, followed by Bulgaria (95%), Switzerland (93%) and Israel (92%). South Korea also had the highest percentage (81%) of adoption of "high broadband" (defined as average connection speed above 10 mbps), followed by Hong Kong and Japan (both at 55%) and Switzerland (54%).

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Sandvine has released its latest Global Internet Phenomena Report based on data collected in March, 2014 across leading wired and mobile broadband networks. Focusing just on North America, Netflix once again dominates primetime usage, accounting for 34.9% of downstream bandwidth, more than the next 6 services combined. YouTube was second with 14.04% of bandwidth.

It's a different story on mobile however, where YouTube remains the top downstream provider, eating up 19.75% of bandwidth, up from 17.7% a year ago, with Netflix in 5th place with just 4.51%.  The usage pattern largely reflects the difference between Netflix's long-form content focus vs. YouTube's short-form focus. YouTube's CEO Susan Wojcicki recently disclosed that 50% of YouTube's usage is now on mobile.

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This morning President Obama made his strongest endorsement yet for net neutrality, releasing a statement and video (see below) explicitly endorsing the reclassification of broadband services under Title II of the Communications Act, effectively regulating broadband as a utility (note, the change isn't Obama's to make, it's the FCC's, which is an independent agency).

If the FCC did make the change it would be the most significant update to broadband regulatory policy since 2002 when broadband was classified under Title I as a lightly regulated "information service." The change to Title II would mean broadband ISPs would have to adhere to regulations dating back to 1934. In one bit of good news for ISPs, Obama specifically said rates should be excluded from Title II regulation (which means usage-based pricing could still be implemented). Any proposed change is guaranteed to be challenged in the courts by ISPs.

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Broadband Internet access is a booming business in the U.S., especially for cable TV operators. According to data released last Friday by Leichtman Research Group, the top U.S broadband ISPs (accounting for 93% of the market) added nearly 384K subscribers in Q2 '14, the most since Q2 '09.  Q2 '14 additions were 29% higher than those in Q2 '13 and 16% higher than those in Q2 '12.

Because the law of large numbers is working against broadband ISPs, adding even the same number of subscribers year-over-year is impressive, while adding more is even harder to do. For example, at the end of Q2 '12 there were 80.3 million broadband subscribers in the U.S., while at the end of Q2 '14 there were 85.9 million.

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I'm pleased to present the 228th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week we first discuss how broadband's penetration in the U.S. is closing in on that of pay-TV's. New research from Leichtman Research Group revealed the top providers added nearly 1.2 million broadband subscribers in Q1 '14 (the best quarter in 2 years), as compared with around 260K pay-TV subscribers. The biggest ISPs now have approximately 85.5 million broadband subscribers, whereas the top pay-TV operators have 95.8 million subscribers.

All of this is relevant because it demonstrates how broadband has become a de facto parallel video distribution platform - the fundamental underlying infrastructure for online video. Many of us take robust broadband almost for granted now, yet in reality it wasn't that long ago that broadband wasn't mainstream and high-quality online video quite scarce.

We then move on to talk about Netflix's big expansion into 6 new European countries. Colin lays out the case why to be bullish on the expansion, while also noting the new challenges Netflix will face.

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The top 17 U.S. broadband ISPs added nearly 1.2 million subscribers in Q1 '14, notching the best quarter of growth since Q1 '12 (see chart below). These ISPs now have 85.5 million subscribers, with top cable operators accounting for nearly 59% or 50.3 million and top telcos accounting for 41% or 35.2 million. The data is according to Leichtman Research Group.

The top cable operator ISPs garnered 83% of the quarter's 1.2 million subscriber additions, vs. just 17% for the telcos. This compares with Q1 '13, when the top cable operator ISPs took 72% of net additions, with telcos taking 28%. LRG notes that Q1 subscriber additions historically account for more than Q2 and Q3 additions combined.

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I recently had the pleasure being interviewed by my former colleague Howard Homonoff for his weekly "Media Reporter" show at the Columbia Institute for Tele-Information which he produces in addition to his consulting practice. In the interview we touch on a broad range of topics including how technology is helping traditional TV, the impact of online video on pay-TV operators and networks, online originals, NewFronts, rise of devices and mobile viewing, net neutrality, industry deals and much more.

The interview runs about 28 minutes.

Watch the interview

Google Fiber has captured an eye-opening 75% of homes it passes in certain medium-to-high income Kansas City neighborhoods, according to an extensive new analysis from Bernstein Research. The firm employed a market research company to conduct a door-to-door survey in 5 KC neighborhoods in which Google Fiber has rolled out. This is the first research I'm aware of revealing how Google Fiber may be performing (Google itself has never shared any detailed data on Google Fiber).

In Wornall Homestead, the highest household median income neighborhood ($116K) Bernstein surveyed, it found that 83.1% of respondents were taking Google Fiber service - 15.3% for the $120/mo pay-TV+ broadband bundle, 52.5% for the $70/mo 1 Gbps broadband-only service, and 15.3% for the free 5 Mbps broadband service. This contrasted with Community College, the lowes household median income neighborhood ($24K) surveyed, in which 27.2% of respondents were taking Google Fiber service - 7% for the $120/mo pay-TV+ broadband bundle, 19.2% for the $70/mo 1 Gbps broadband-only service, and 7.3% for the free 5 Mbps broadband service.

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The Wall Street Journal reported last night that Apple and Comcast are discussing a partnership for Apple to launch a streaming TV, VOD and DVR service, including dedicated Comcast bandwidth (a "managed service" as opposed to one delivered with typical "best efforts").

On the surface, it's a sexy-sounding deal, especially for those who have long-harbored a vision of Apple moving beyond its modest Apple TV device. However, scratch the surface just a little and you'll quickly find many reasons to be skeptical anything will result. Here are my top 5 (I'm sure there are others as well):

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