Net Neutrality: Justice Department Investigates Cable

The Wall Street Journal reported that the U.S. Justice Department has launched an investigation into cable television company practices, especially as they relate to streaming online video from sources such as Netflix and Hulu. One focus of the agency’s concerns is the fact that some cable companies are imposing data caps on subscriber usage of broadband network connections. In particular, the Justice Department is probing Comcast’s preferential treatment of its own Xfinity content streamed over a Microsoft XBox. The company contends that it treats all Internet data equally, but does not count the Xfinity content towards a subscriber’s data usage because the data is streamed just within Comcast’s own private network.

The Justice Department is concerned that this practice violates Comcast’s agreement that it would not “unreasonably discriminate” against streaming data from other companies.

According to the WSJ article, Justice is also looking into the emerging practice of authentication as part of the “TV Everywhere” initiatives by cable and satellite services. The idea is that viewers who subscribe to a package of channels using these services would then be able to access some of that content over the Internet using a computer or mobile device. The Justice Department is concerned that this may be an anti-competitive practice because it requires the user to subscribe to a bundle of products in order to access the online content. This prevents users from subscribing to just an online version of the available content.

Both avenues of investigation have important implications for the future of subscription television services. If the cable companies are allowed to selectively apply data caps to content delivered by competitors — such as Hulu and Netflix — it could make it much more difficult for those online outlets to succeed. On the other hand, if the agency decides that subscription television services have to open up their online streaming content to viewers who do not subscribe to their cable or satellite plans, this could hasten a la carte pricing and result in drastic changes in the market for these companies.

Here’s a video on this story from the WSJ site:

Comcast, TiVo, and… PayPal?

Attention: QVC Shoppers! Open up those home equity credit lines because shopping online is about to get faster and easier!

On Tuesday, Scott Dunlap, vice president of emerging opportunities with PayPal, announced a new partnership with Comcast and TiVo. What could a cable giant, a DVR maker, and an online payment processor possibly do together? Let you buy stuff directly from your television, that’s what!

This means that you’ll be able to make purchases or donations in response to interactive ads that you see on your TV. Press a couple buttons on your remote control, and you can complete the deal using your PayPal account. And you can even pause the programming while you take care of business, then resume without missing anything.

This process has been dubbed “t-commerce” (like “e-commerce” but with a “t” for “television). PayPal did a survey last fall and found that nearly half of the TV subscribers polled were interested in making on-screen purchases. And a large portion of them were interested in using PayPal to make the payments. Viewers could start to see implementation of this system as early as this fall.

Until now, TV commercials have been simply advertising, part of a marketing campaign. This ability to interact with the screen and engage PayPal in the process could be a game changer as it adds the sales function, and removing extra steps for the consumer to buy. It also could breathe new life into commercials. If the ads frequently offer products or services that you care about, and if those ads offer special discounts or bonuses that are only available during the commercial, I can see how this could encourage more consumers to pay more attention to the commercials. And as any student of operant conditioning can tell you, an infrequent and random payoff is the best way to reinforce a behavior that is very difficult to extinguish. (Just ask anyone playing a slot machine.) It would not take many attractive deals sprinkled among the wasteland of commercials to make viewers want to sift through all of them, just so they don’t miss something.

This could make television commercials interesting again.

Alfred Poor on Video about HDTV

Yesterday, I had the pleasure of discussing HDTV and related topics with David Gewirtz of ZDNet, which he captured on video. We covered a wide range of topics, including OLED HDTVs, 3DTV, screen sizes, Smart TVs, and “direct LED” TVs. The video runs almost a full hour and was made during a Skype video call. (David has invested a lot of time and effort to develop a pretty sophisticated “Skype Studio” for recording interviews like this, and he gets some impressive results.)

So here’s the video if you want to hear more about my latest thoughts about buying HDTVs. If you or someone you know are thinking about getting a new set, you’ll probably find some helpful information here.

If you have any questions, you can email me at or send a Twitter message to @AlfredPoor.

Redbox and Netflix Go Around Disney for “John Carter”

In yet another attempt to put a genie back in the bottle, Disney has decided not to give Redbox or Netflix access to “John Carter” on DVD when the movie becomes available for retail customers, according to a story in the LA Times. Instead, the disc rental companies will have to wait at least 28 days before it can buy at a discount from Disney.

So two disc rental giants went the old fashioned route, and sent out an army of buyers to purchase the discs when they were released last week. According to some sources, the movie is now available for rental from both companies.

The movie studios are feeling the pain as DVD sales dwindle and Blu-ray fails to pick up the slack. They apparently think the solution is to squeeze the disc rental companies, but that is probably a losing strategy because it means that fewer people will watch discs and they’ll turn to other ways to get the content. In time, I expect that this will drive them to online streaming and the use of DVD and Blu-ray will continue to spiral downwards.

OLED HDTVs Are Really Coming… Maybe

[Revised 6/12/12 after feedback from Ray Soneira] 

Okay, I have to start by waving the white flag of surrender. As many of you may have noticed, I went “dark” for an extended period last fall while I was working on some major projects. For the past month or so, I’ve been behind but I was struggling to catch up by back-dating my entries. Well, I was in Boston all last week for the Society for Information Display’s annual DisplayWeek conference. Not only did I not manage to catch up on my backlog of entries, I didn’t even post once about the show while I was there.

So I’m resetting the clock again. I’m accepting the gap in entries for the past month, and will strive to keep up going forward. It’s not that there’s not enough material to write about, it’s just that I’ve got a lot of demands on my time these days. So bear with me as I try my best to keep up.

Which brings us to the topic at hand: OLED TV. Samsung and LG both showed 55″ monsters at CES, but since I didn’t attend, I didn’t see them. I did get to see them last week, up close and personal. And I was certainly impressed. After discussing them with my friend and colleague Ray Soneira of Displaymate, I went back and looked at them even harder. Ray said that they had OLEDs in general have terrible color shift with off-axis viewing. I have great respect for Ray’s ability to see and identify quality issues in displays, but try as I might, I could not see any hint of color shift on either OLED TV. (As it turns out, neither could he.) Now, if I had been able to throw some good test images on the screens (like you get with Displaymate), I might have been able to spot some differences. But from what I saw, they looked awesome.

Okay, so much for the good news.

Right off the bat, I am slapping LG’s wrist for claiming “infinite contrast” on their OLED TV sets. Yes, the screen probably puts out no light when displaying an all-black image, but that’s a pointless way to measure contrast. If you have a dark area next to a light area, I guarantee that some of that light will leak from the light area to the dark area. I’ll grant that these OLED screens will look terrific and have great contrast under these conditions, but the contrast ratio will definitely be something less than infinite. The bottom line is that “contrast ratio” as a meaningful specification for flat panel televisions is officially dead and LG holds the smoking gun. So from now on, ignore contrast ratio specifications and just trust your eyes.

And as good as the sets appeared, don’t start moving your LCD to the guest room just yet. Both LG and Samsung seem to be on track to ship an OLED TV model this year, but it may depend on your definition of “ship.” It is not clear that either company will be able to produce the OLED panels in large quantity this year. LG is relying on new and relatively untested “metal oxide” semiconductor technology to take the place of amorphous silicon. Even the OLED Association’s own forecasts show large panel production capacity to be just over 500 square meters per year for this year (but nearly tripling by next year). At a bit less than a square meter per 55″ OLED panel, that means that there’s only capacity to make 600,000 panels. And that’s IF they started in January, which they didn’t, and IF they were running around the clock, which they aren’t, and IF they are getting 100% yield, which would be a miracle. The consensus seems to be that the manufacturers will be lucky to build 100,000 OLED TV panels this year. Just putting one demo unit in every store that will want to carry them will eat up most of that production.

But you’ll probably want to wait in any case. The initial price projections are at about $7,500 to $8,500 per set. That’s a hefty premium over LCD. In his SID keynote speech, Dr. James Lee from LG projected that the price will drop to 1.5 times the LCD price by 2015, and will reach price parity by 2017. The way that LCD prices continue to tumble, however, those are aggressive forecasts and I will be amazed if the company can hit those goals.

So let’s sum up: gorgeous image, crazy expensive, unproven technologies, aggressive manufacturing expansion, and possibly overly optimistic about future pricing. As much as I’d love to have an OLED screen in my living room, I’m accepting the fact that it will probably be on a cell phone or tablet, and not on my television.

Comcast Partners with Skype

In a joint announcement last week, Comcast and Skype unveiled plans to provide video chat service to Xfinity customers. By adding an adapter box to their set-top box and a “high-quality” video camera, subscribers will be able to send or receive instant messages or video calls to any Skype user worldwide, including smart phones, tablets, and personal computers, as well as other Comcast subscribers who are equipped for Skype calls. The press release describes it as “HD video calling” though it does not provide specific details on resolution.

The service will support picture-in-picture, so you can have your video call in a small window on your television screen, or press a button to swap it so the Skype window is full screen and the program that you’re watching is in the small window. (I can see how investment types might find this useful as an inexpensive way to videoconference while keeping a financial news station open in the window.)

The service will roll out in Seattle and Boston first, with Detroit, Indianapolis, Miami, Atlanta, Augusta, Chicago, Pittsburgh and Harrisburg, PA following almost immediately after. Existing Xfinity triple-play customers can get a free three-month trial. According to the Comcast website, the service will cost $9.99 a month after the initial promotional period.

I’ve said all along that Skype in the living room has been a missed opportunity for the television makers. I believe that should have been advertising the pants off this feature ever since they started incorporating support for it in their HDTVs. Making it easy for grandparents to see and interact with young grandchildren is a hands-down winner, and Skype is a staple for people of all ages who want to stay in touch with distant family and friends. I think the $10 a month seems a bit steep, even when you figure in the rental of an adapter box, camera, and the new remote control. Still, given the high penetration rate of broadband connections in the home, I expect that there’s a large market for the service even at this rate. Who knows? Maybe this feature could be a competitive advantage that even might drive new customers to sign up with Comcast.

Turn a Projector into 3D with SmartCrystal Pro

My good friend, colleague, and sometimes co-author M. David Stone alerted me to a product that he recently reviewed for PC Magazine: the SmartCrystal Pro from Volfoni. This is a device that can turn any 3D-capable front projector into one that uses passive glasses for $1,500 (street price). Inexpensive 3D projectors require you to use bulky shutter glasses, but the SmartCrystal Pro lets you wear the same inexpensive passive glasses that you wear at your local cinema.

So how does it perform this magic? It is actually a “polarizing modulator.” That’s fancy talk for a device that can change the polarization of the light coming out of the projector. You place the SmartCrystal Pro about one to two inches from the projector lens, so that the light fills the window in the device. To get the 3D sync signal, you can connect it either to a VESA port on the projector, or if it is a DLP model, you can use a separate power block to access the DLP-Link signal.

One drawback is that you’ll also have to upgrade to a silver screen, which preserves the polarization of the light from the projector better than a standard screen can. Figure on another $1,000 or so for a 92″ diagonal screen. However, if you want to avoid paying for the expensive active glasses (and eliminate the hassle of keeping them charged), then the SmartCrystal Pro could be just what you need.

Cable Loses; Telco Wins; SatTV Draws

The Leichtman Research Group, Inc. (LRG) recently reported on the pay television service subscriber counts for 2011. The numbers have not really changed much compared with 2010. The big losers continue to be the cable companies; the top 10 U.S. cable services lost more than 1.6 million subscribers in 2011. The telco services (Verizon’s FiOS and AT&T’s U-verse) picked up the lion’s share of the gains, splitting 1.5 million new video customers. The results were mixed for satellite TV services; according to LRG, DirecTV added more than 660,000 subscribers, but DISH Network dropped more than 160,000 from its rolls.

This trend is not good for cable. In a flat housing market, they continue to lose subscribers to the other services. Based on LRG’s numbers, Comcast lost about 2% of its total subscribers, Time Warner lost 4%, and Charter lost a significant 5% of its customers. It would appear that these companies will have to find a way to offer a better bargain. Maybe it will be to focus on delivering broadband services, or maybe they will be forced to offer subscription options that let viewers stop paying for all the channels that they never watch.

If there is any good news in all this, it is that the total number of pay TV subscribers increased by a modest 380,000 in 2011, in spite of the growth of streaming video over the Internet and the “cord cutting” movement.

Mobile DTV Stuck in the Mud?

I’ve gone on the record with my pessimism about Mobile DTV, and recent events have done nothing to change my view of the situation. TV Technology recently published an article about a discussion of Mobile TV at the Advanced Television Systems Committee (ATSC) in Washington that confirms my suspicions. Jay Adrick is Vice President for Broadcast Technology at Harris Broadcast, and he was involved in the development of the standard. According to the article, he warned the others at the meeting that “if we drag this out another two or three years, it will definitely be too late.” He went on to point out that details such as a viable business model need to be resolved.

I still believe that Mobile DTV is a solution in search of a problem. Consumers no longer want to access linear programming on their mobile devices. They are already streaming content on demand on their smartphones and tablets and computers, using both WiFi and wireless broadband connections. None of their devices have the tuners required to access Mobile DTV, and I don’t think they see any compelling reason to get a device that does.

The best explanation is that television broadcasters see Mobile DTV as a way to hold onto precious radio spectrum that they are not using. They may also see it as a way to try to keep linear broadcast television relevant, though that would appear to be an uphill battle. With as little as 10% of the U.S. population dependent on over-the-air broadcasts as their sole television source, it hardly seems that adding a little mobile content to the mix is going to make any difference. We’re way past the days when a transistor radio could transform the listening habits of consumers. Today, our phones and tablets and computers deliver far more content with far more focus than radio possibly can, and television content is really no different.

At this point, Mobile DTV looks all dressed up with no place to go.

Olympic Online Coverage Will Include Every Event

NBC will cover all 302 of the Summer Olympic medal events this summer and you can watch them all online. Well, you probably can. The coverage is only available to those viewers who already have a subscription to a cable, satellite, or telco service that includes CNBC and MSNBC. But if you have a subscription, you’ll be able to watch on your computer as well as many smartphones and tablets. With an estimated 3,500 hours of coverage in all, even the most die-hard sports fan is likely to get enough of the Olympics.

This is an interesting development. There have been rumors about Hulu requiring “validation” from television subscribers, and if that works out for its owners (which own traditional broadcast networks themselves), we can expect to see more restrictions of this sort from sites that provide “free” access to major network and movie studio content.