Why the AT&T Purchase of BellSouth is Just Another Brick in the Wall

If this contrary posting doesn't find itself into the news, I don't know which one will. AT&T's proposed purchase of BellSouth is all about who will keep their job and who will lose theirs. Many, if not most, of the lost jobs will come due to attrition. I'm no expert on pensions, but if I were working for BellSouth and were about to retire, I think I'd be extraordinarily pleased to think that my pension will be supported by AT&T.

But why does this proposed purchase seem relatively meaningless to me? On paper, the merger makes a great deal of sense, and will allow the new company to better compete in the converging telecommunications marketplace in which companies are now offering video, broadband, and telephone service. So the new AT&T and do this and more, by including wireless services that not all, (say, cable television companies) can.

The fact that there will be a new behemoth in the mix is, in and of itself, not nearly as meaningful as you might expect with a new elephant in the living room. If it were, Microsoft would have long ago taken over this media convergent marketplace, and you better believe Microsoft would love to do this, is trying to do it, and is finding it extremely difficult. In my 30 years' experience of watching merger after merger begin with glowing projections of how the merged communications companies will provide new media services that will "shock and awe," the marketplace reality simply don't pan out. As a matter of fact, I'd watch out for the little players in the coming IPTV game. If they can hold their independence the way TiVo has, these smaller entities with their inherent ability to turn on a dime may steal the spotlight from the singing fat lady.

If I were a regulator, would I take the same position that I am posting here? Absolutely not! Policy makers and regulators must take a long, hard look at this proposed merger and see what impact it will have on competition. That is a completely different concern. Fewer players in the converging media marketplace is, quite simply, not good for competition. I am just as certain about this as I am that the future AT&T will be hard pressed to live up to the press releases that are being reported uncritically by many media outlets yesterday and today.

I'm hanging my hat on history. Others will hang their hats on the shock value of this proposed merger, and we have already seen this. If you're a business reporter, this is one of those stories that will put you on the top fold of the business section if not the very front page of the newspaper. Journalists are human, too, and they also get a kick out of being on the front page.

Now will come the "Wall Street Analysts" who will try to pick apart what this proposed merger means. If the analyst works at one of the market research firms who depend on "revolutionary" sparks to generate a fire and, therefore, business for them, then you better believe they will report this as a "shock" to the marketplace. It's the end of the world as we know it, and we'll explain why for $2500 200-page report or $15,000 briefing to your top executives.

No, the competitors in this marketplace have just been injected with a little adreneline, and the hot stove league is burning at the moment. But I can say on 9 March 2006 that this merger, if it occurs, will, if anything, stifle innovation. What it won't do is give us ubiquitous video, free broadband, and nearly free infinite storage capacity. That is going to happen in spite of this proposed merger.

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You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Best viewed in Firefox thanks to Microsoft going its own way.

IPTV Means Democratic Video Distribution

IPTV is probably exactly what you think it is: Internet protocol television. Now, do you really need to understand the Internet protocol? No. You need to understand what it makes possible. Simply put, IPTV allows the use of the Internet to distribute video and, more specifically, television. Of course it will be possible to have HD over IPTV. It doesn't take an engineer to understand this, either.

I am an expert in technology forecasting. Interestingly, you need not be an engineer to forecast technological developments. You can find information about technology forecasting by, yes, going to your university library and finding books on technology forecasting. One of my favorites is (forgive the lack of APA style) Technological Forecasting for Decision Making. 2nd Edition. By Martino. OU# T 174 .M38 1983 This field is well established.

So what about the future of IPTV? Well, this is one of the easiest new media technologies to forecast. IPTV will be embraced by program providers, especially those who have few, if any other options such as independent documentary producers and other perhaps minority voices such as those who are critical of the war in Iraq (in the U.S., precious few voices have heard documenting the dark side of war and specifically the war in Iraq). In addition, new television programs can be taken straight to the people allowing them to decide what's popular, possibly putting the new content onto mainstream outlets such as commercial television.

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You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Best viewed in Firefox thanks to Microsoft going its own way.

Other DVRs

Comcast is the largest cable operator in the United States, so DVR manufacturers are lining up to sell them their DVRs. What this means is that just as the Beta versus VHS battle of the late 1970s and early 1980s led to great innovations in VCRs, as long as there is this competition for DVRs, they will continue to add new features (and simple but important attributes such as longer recording times and the illusion of a DVR for every television set.

From the Comcast site on 6 March 2006, three DVRs are viewable:

1.
This is the Comcast box as pictured at http://www.comcast.com/dvrselect/ on 6 March 2006. A demo was seen at http://www.comcast.com/dvrmotorola as of the date of this posting.

2.
This is the Motorola box as pictured at http://www.comcast.com/dvrselect/ on 6 March 2006.

3.
This is the Scientific-Atlanta box as pictured at http://www.comcast.com/dvrselect/ on 6 March 2006. A demo was seen at http://www.comcast.com/dvrsa/ as of the date of this posting. Time Warner Cable appears to show a Scientific-Atlanta DVR in a demo on their web site

I'm going to flip over to IPTV before returning to finish some thoughts on DVRs. The represent a portion of the revolution that is taking control of television viewing away from the program providers and giving it to the program viewers. IPTV is another revolutionary (yes, I said it and I mean it, "revolutionary") technology that will allow for ubiquitous video.

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You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Best viewed in Firefox thanks to Microsoft going its own way.

TiVolution: It's Not Just an Ad Slogan

I'm not sure if TiVo still refers to TiVolution, but it is not hype. When an engineer draws a system, she may include a "black box" that will somehow perform a complicated function, perhaps in the future. Well, TiVo is the "black box" that grabs your favorite television shows regardless of time or channel and records them for you. All you have to do is type in the first few letters of the show (you can type the full name if you really enjoy entering letters), select it, and then TiVo will search its linix-based system program database to find the show (the TiVo box is a computer with a hard drive and it uses the linux operating system...but what do we, the users, care as long as it works). If it's a series like CSI Miami, you can tell TiVo to record it every week. If it's a daily show like The Daily Show, you have tell TiVo to record it every day.

By now, a majority (?) of Americans know what a TiVo does (but this is an experiential product; I could wax poetic about what TiVo does and how wonderful it is, but like a great meal, you have to try it yourself). Imitation is the most sincere form of flattery, and TiVo is being flattered by various members of the cable television industry. DirecTV is now importing its DVR (digital video recorder) from its BSkyB satellite service in Britain.

http://www.pvrblog.com/ is an excellent source of current events in the DVR (there was a fight over whether to call TiVo like devices "digital" or "personal" video recorders; DVR seems to have won).

Today's research lesson for my terrific students at the University of Georgia as well as you journalists and consumers who frequent my blog. When you find a great site like http://www.pvrblog.com/, you can find other web sites that point to it: a reverse reference service. How? One way is to go to one of the grand old search engines on the web, av.com (altavista.com) and use this search:

link:http://www.pvrblog.com/

This will reveal other sites that have a link to http://www.pvrblog.com/ Logically, many will also be PVR/DVR related. A quick result I found is a link from the Electronic Frontier Foundation which has a story about using your PC to create your own high definition DVR. It includes the following table, accessed on 6 March 2006:


Source: http://www.eff.org/broadcastflag/hdtv-introHY.php

It's reasonable to assume HD-DVRs will be available and that their initially high price will come down quickly. So HD will not slow the DVR revolution, if it really is a revolution.

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You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Best viewed in Firefox thanks to Microsoft going its own way.

Who Controls Television Viewing Behavior?

In the pre-cable world of the 1960s, the television networks controlled viewing by devising a strategy of "least objectional programming." The theory was simple: put your strongest show on first thing in the evening and do nothing that would cause someone to get up out of their chair, walk to the TV set, and change channels. As remote controls began to proliferate along with cable television, the strategy (at least on paper) would seem to have reached the end of its life, but the change was very gradual, an evolutionary change.

Article after article was written calling the big three commercial networks dinosaurs, and yet they continued to grab 80% of the primetime audience. The VCR came in as a potentially disruptive technology, but thanks to poor usability design, its impact on television viewing was geberally limited to movie watching and some extension of the audience for soap operas (the most frequently recorded genre). People could have bought VCP (videocassette players) but they didn't catch on in the home market. Nevertheless, recording or time-shifting never came close to living up to its potential of giving the viewer more control of their television viewing.

Blockbuster television shows like Seinfeld, Home Improvement, Friends, West Wing, and others had people continue "appointment viewing." If you've ever been with someone who said "I gotta go, my show is coming on at 8," then you know what appointment viewing is. In addition, top shows remained fodder for the water cooler at work the next day. Television was still a communal experience in that sense, and there was something inherently "comforting" about that experience. If the network moved one of these programs to another day or time, the audience would follow. What choice did they have? We've already established that at best a minute fraction of VCR owners actually used their VCRs to time shift programming.

Incredibly, in the mid 1990s, television viewing in the United States had not changed dramatically with the exception of the progress of the cable television industry in providing more and more attractive program alternatives. All news channels took their toll on network TV news, but the network newscast remains today much as it looked 25 years ago.

What would happen if suddenly television viewers could take control of their television viewing? What if appointment viewing were replaced by a "black box" that would record a viewer's favorite shows no matter when they aired, no matter what channel the shows were aired, and all the viewer had to do was press a couple of buttons on a remote to find "their" shows. What if it were a "smart" box that could also find different shows that in some way matched or were similar to ones the viewer had chosen to be recorded? What if two competing shows on at the same time on different channels could be recorded simultaneously?

If you understand the previous paragraph, then you also understand that television viewing behavior might be changed dramatically. If the time and channel on which a program airs becomes irrelevant to the viewer, then you can see a possible upending of the broadcasting/cable model from one in which the program provider decides when to air a show to a model in which the viewer chooses when she wants to watch that show.

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You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Best viewed in Firefox thanks to Microsoft going its own way.

Television Revolution Coming: The Precursor

I am a proud graduate of The Ohio State University's communication program where I focused on telecommunication. Like the future preachers around me, I also took courses in rhetoric, so I understand why my readers fear getting into a debate with me (NOT! Come on, people, let's rumble!). One topic we spent a great deal of time on is the term "revolution" in the context of "Is a new medium revolutionary or evolutionary?"

The history of mass communication is evolutionary. Radio borrowed talent from vaudeville, television stole talent away from radio, cable television (think TBS, formerly WTVG for Turner Communications Group) stole from broadcast television (thank goodness we can STILL watch The Andy Griffith Show), and cable television stole the format idea from radio [(c) 2006 by Dr. Bruce C. Klopfenstein]. In many ways, the entire history of broadcast media was predictable. Clearly, there were no revolutions involved. Radio adapted to television by adopting formats: you knew what genre of programming you would hear because the station played the same programming 24 hours a day whether it be "adult contemporary," oldies, pop, rock and even talk. Cable television borrowed from radio by establishing "format television" with news, weather and sports being among the first format cable channels. I predicted this as an undergraduate student. Was I a prodigy, the Oracle at Delphi, a time travelor? No, none of these things. I knew my media history, and the future of cable and its 500 channels would follow what had already happened in radio. Note, I'm being provincial in this discussion and limiting what I write to the United States.

So the history of electronic media has been evolutionary. When the Web became a reality, I told my students in 1994 that the web would go commercial. Why? That's been the history of electronic media in the United States. Americans are used to and accept the model of trading the annoyance of commercial messages because they subsidize the content we see on "free" TV.

The world began to change as compression techniques were created to allow entire sound files to be small enough to be downloaded in minutes. The file could then be played back by decompression software on a computer. I remember the early days of Realplayer when voices sounded like they were coming over a tin can attached to a wire.

If there is one certainty about the future of electronic media, it is this: we are heading toward infinite bandwidth if not infinite compression. You need not be an engineer to understand that engineering firms large and small continue to work feverishly to compress files to the point that we will be able to download video programs in seconds. Did anyone predict this 10 years ago? Perhaps, but only at engineering conferences that were covered by the specialized engineering trade press.

Did the music industry see the piracy/downloading issue coming? Evidently not, because it flourished without a financial model that rewarded the copyright holders or the music labels. Downloading music files literally put the music industry on its ear, but as has been the case in the history of electronic media, the music industry adapted. Has the music industry been revolutionized? It depends on whom you talk to. New musicians welcome the chance to have immediate, global accessibility to their work. Was this possible in the past? Simply put: NO. At best, a new, presumably talented group of musicians needed a music label to push their product onto radio stations. Even progressive college radio stations theoretically could be passed by with ubiquitous audio via the Internet that is now available. My guess (as a student radio station jock and then advisor for 13 years) is that progressive college radio stations will still be influential as they put their underground stamp of approval on new music and new bands.

What about classical music you ask? Good question: those who enjoy classical music are a different demographic group than those who enjoy bleeding edge new rock music.

So there may be some debate as to whether or not the music industry has been revolutionized, but I am here to tell you that a revolution is precisely what the video industries are facing.

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You may use this content (better still, argue with me!), but please cite my ideas as © 2006, Dr. Bruce Klopfenstein. Best viewed in Firefox thanks to Microsoft going its own way.