Amazon, Google And The Great Game

For the better part of the 19th Century, the British Empire and Czarist Russia (and for a while Napoleonic France) struggled for influence and control over Afghanistan and the broader Islamic Central-Asian region. Russia feared England’s growing commercial ambitions on the doorstep of the Russian Empire, while England feared that Russian control of Afghanistan would allow it to threaten India, the “jewel in the crown” of the British Empire.

Although the European powers never went to war against each other directly over the region, they engaged in a decades-long series of political and diplomatic moves and counter-moves (and occasional indirect military moves) that historian came to call The Great Game.

Something like a 21st Century version of the Great Game is now playing out among today’s digital empires for control over virtual territory on the connected devices and streaming services in Americans’ homes.

Google this week announced it has blocked access to YouTube on Amazon’s Fire TV devices and the video-enabled Echo Show. That was in immediate retaliation for Amazon de-listing Google’s Nest devices from its online store, but the feud between the two pre-dates the current skirmish. Amazon has long refused to sell Google’s Chromecast devices or to support Google Cast services on Fire devices.

The latest hostilities between Amazon and Google erupted just as Amazon settled another long-running feud with Apple that had also kept Apple TV devices out of the Amazon store. This week, Apple finally approved a native Amazon Prime Video app on Apple TV, which presumably will now lead to Apple’s set-top box becoming available from Amazon.com.

Amazon had refused to sell the devices ostensibly because consumers might be “confused” by the lack of an Amazon Prime app and would send the units back, creating a logistical problem for Amazon. But no one really believed the dispute had to do with anything other than the struggle for streaming supremacy in the living room.

Google, meanwhile, is preparing to open a second front against Apple (as well as Spotify) by launching a new subscription music streaming service early next year to be called Remix. If YouTube suddenly goes dark on Apple TV you’ll know why.

Historians date the end of the Great Game to 1895 with the signing of the Pamir Boundary Protocols, which settled the border between Afghanistan and Russia. But the game didn’t really end until 1918, after Czarist Russia and the British Empire buried themselves in the trenches of the Great War.

Even then, the struggle for influence in Central Asia never really ended. It was just taken over by the new great powers of the post-Czarist Soviet Union and the United States.

Yet in all that time, the people least often consulted as to how they would like things arranged were the people of Afghanistan — an oversight for which the world continues to pay.

The stakes in the Great Streaming Game are far lower, of course. No one is getting killed, nor cultures disrupted over a set-top box. But there are echoes of the haughtiness of the 19th Century colonial empires in the behavior of today’s digital dynasties. As Amazon and Google parry and thrust, consumers are treated more as the prize to be won than an audience to be served.

It’s time for a cease fire.

 

High Court Of Canada Cooks Google’s Goose

When you think about landmark legal rulings affecting the internet you don’t usually look to the courts of Canada. But the Supreme Court of Canada this week sent shock waves through internet legal circles by issuing an injunction against Google requiring the search engine to de-index an allegedly infringing website everywhere in the world.

The 7-2 ruling was surprising on multiple levels, not least because Google is not actually a party to the litigation that led to the injunction. More surprising still was the court’s assertion of global jurisdiction over the internet. But for Google the worst may be yet to come.

The dispute involves Equustek Solutions, a smallish Canadian technology firm that sued its former distributor, Datalink Technologies Gateway, in 2011 alleging that Datalink was relabeling some of Equustek’s products and passing them off as its own. Then, according to the suit, Datalink used confidential documents and information it had obtained from Equustek to produce and sell competing products. Read More »

Fool Me Twice: How Spotify Could Become the New iTunes Store

Back in 2003, as the music industry was reeling from widespread, Napster-fueled piracy, Apple CEO Steve Jobs made the record labels an offer they couldn’t resist: Give me a license to sell individual tracks but let me sell them cheap enough to be a viable alternative to free, and I’ll wrap them in DRM for you in a way that consumers will accept, so they can’t be copied.

The labels leapt at the deal and the $1.00 download became the new atomic unit of the business.

Though thrilled at first to have an answer to piracy the record companies eventually came to rue the arrangement once they figured out that Apple was using those inexpensive downloads to supercharge the market for its high-margin iPods and later iPhone hardware, and was reaping far more of the value being created by their music than they were. By then, however, they had become captive to Apple’s ecosystem: Thanks to Apple’s proprietary DRM, the only way to sell music to iPod users — at the time the largest segment of the portable music-player install base — was through iTunes, under terms effectively dictated by Apple. Read More »

Broadcasters’ Goal-Line Stand

CBS Corp. chairman and CEO Les Moonves has long been one of broadcast television’s most indefatigable boosters, so it was no great surprise this week to hear him tell an investor conference that he expects the traditional broadcast networks to remain the mainstay of the National Football League’s TV rights package when the current contract is up in 2022, despite the near-certain interest from Facebook, Google, and other aspiring digital TV outlets.

“Look, the tech giants all want to be involved in the NFL. It’s the best product in television,” Moonves told the Deutsche Bank 2017 Media and Telecom Conference. “There’s going to be a lot of activity. As we head toward that large deal, I think these companies are going to be part of it, [but] I think the NFL still believes in the sanctity of broadcasting.”

Moonves was also likely correct in his assessment. Despite the accelerating pace of cord-cutting, and the ongoing unbundling and rebundling of the pay-TV ecosystem, and declining overall viewership the broadcast networks remain atop the ratings heap. While all of those trends are likely to accelerate further between now and 2017, the broadcast networks are likely to remain the NFL’s most efficient path to the largest audience, however those channels end up being delivered. Read More »

Talking Back to the TV

TV manufacturers, set-top box makers and smart TV software developers have tried for years to get rid of the old D-pad remote control and on-screen programming grid for search and navigation. They’ve tried motion control, Bluetooth qwerty keyboards, touch pads, and casting from mobile devices. With the exception of casting, most have proved pretty kludgey.

At the International CES underway in Las Vegas this week, voice activation has emerged as the TV interface flavor of the month. Amazon announced that it has licensed its Fire TV interface — complete with its Alexa voice-controlled digital assistant — for use in a trio of low-end 4K TV brands based in China.

Display sizes will range from 43 to 65 inches and device will come with 3GB of RAM, 16GB internal memory for apps, and a remote control with integrated microphone for talking to Alexa.

Not to be outdone, Google announced it will bring Google Assistant to all TVs and set-top boxes running Android TV, including Sony’s Bravia models and Sharp’s Aquos line. Read More »

Copyright Makes Strange Bedfellows

It’s probably fair to say that Donald Trump was not the first choice for president among the majority of those within the media and entertainment industries. Since his election last month, however, their official industry representatives have wasted little time trying to ingratiate themselves with the incoming administration and to press the industries’ policy agenda.

“So much of what you wrote in your platform this summer about intellectual property and private property rights resonated with many of us, including: ‘Intellectual property is a driving force in today’s global economy of constant innovation,'” a consortium of music industry trade associations wrote to Trump this week. “‘It is the wellspring of American economic growth and job creation. With the rise of the digital economy, it has become even more critical that we protect intellectual property rights and preserve freedom of contract rather than create regulatory barriers to creativity, growth, and innovation.’

“As partners, many in the technology and corporate community should be commended for doing their part to help value creators and their content,” the groups added. “Some have developed systems to promote a healthy market for music and deter theft. However, much more needs to be done…[T]here is a massive ‘value grab’ as some of these corporations weaken intellectual property rights for America’s creators by exploiting legal loopholes never intended for them – perversely abusing U.S. law to underpay music creators, thus harming one of America’s economic and job engines.” Read More »

While FCC Dithers, Google Ditches The Box

To hear the pay-TV industry tell it, FCC chairman Tom Wheeler’s original proposal to “unlock” the set-top box was essentially a sop to Google, a company many in the industry see as having effectively captured the agency, if not the entire Obama administration, and as coveting the incumbent operators’ position in the TV business.

Those suspicions were only strengthened when Google began offering members of Congress demos of a set-top box that fit remarkably with the sort of navigation device envisioned by Wheeler’s proposal, just days after the proposal was unveiled.

fccwheelergettyoffledeAlarmed, cable operators rushed out its own proposal to “ditch” the set-top box altogether and make their services available, essentially as is, via apps that could run on third-party devices — an idea Google opposed because it would leave the cable operators in control of the user interface and the bundling of channels.

The industry’s move was effective, inasmuch as it forced Wheeler to retreat from his original proposal, and come up with a new plan loosely modeled on the industry’s app-based approach. While Google said it could live with the new proposal, the industry still found much not to like, and an all-out lobby blitz again forced Wheeler to postpone a planned vote on the measure. Read More »

The FCC Chairman’s Tactical Retreat On Set-Top Boxes (Updated)

After months of intensive lobbying by pay-TV providers and TV programmers, as well as mounting pressure from congress, FCC chairman Tom Wheeler has apparently backed off quite a bit from his original proposal to “unlock the [set-top] box” and is preparing to adopt the broad outlines the industry’s app-based counter-proposal. But that doesn’t mean the struggle for control of the set-top is over.

Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearingIn an ex parte filing with the commission this week, the National Cable & Telecommunications Association, along with DirecTV-parent AT&T, pushed back forcefully against elements of what appears to be Wheeler’s new plan to bring greater competition to the market for pay-TV-compatible set-top boxes, as mandated by congress more than a decade ago.

The new plan, as described in general terms in a series of ex parte filings in recent weeks, will apparently require multichannel video programming distributors (MVPDs) to develop apps that can run on third-party devices but that replicate all of the features of MVPDs’ own services, including making all the operator’s linear and on-demand content available on similar terms.  It will also require MVPDs to make their content searchable by third-party, universal-search applications. Read More »

The More Things They Change, The More Digital Platforms Become The Same

YouTube is working on a plan to be more like Facebook, Snapchat, and Twitter. According to a report by VentureBeat, the video platform has been developing a new feature internally called Backstage that will allow users to post photos, links, text posts and other non-video content alongside their videos. The new content will resemble a Facebook Timeline, presented as a feed scrolling in reverse-chronological order on the user’s channel home page, but also appearing in subscribers’ feeds and notifications.

Backstage, or whatever it ends up being called, is expected to be rolled out later this year on select YouTube accounts.

The move to make using YouTube more like using Facebook seems only fair at this point given that Facebook has lately become more like YouTube. The social network has, with considerable success, moved aggressively to turn itself into a major platform for hosting and sharing user-created videos — once the near exclusive facebook_videoterrain of YouTube.

Facebook has also lately taken steps to become more like Twitter, launching Facebook Live to rival Periscope, while Twitter has tried to become more like YouTube by making video a bigger part of its offering.

A similar convergence is underway in the music streaming area. Pandora is reportedly in the final stages of negotiations with the record companies to launch an on-demand tier to its service, which would make it more like Spotify and Apple Music. Spotify, meanwhile, is acting more YouTube and even Netflix, adding original video to its mix of content.

It’s getting to where you can’t tell the players apart without a scorecard.

More to the point, it’s getting harder for digital platforms and services to differentiate themselves from each other. Music streaming services, which already share substantially the same catalog of content and now increasingly share the same business model, are trying, through the increasing use of  individual artist exclusives. Others have sought to make human vs. machine curation a point of differentiation. Read More »

Verizon Completes It’s Web 1.0 Roll-up, But May Not Stop There

With its $4.8 billion acquisition of Yahoo this week, coming a year and two months after its $4.4 billion acquisition of AOL, Verizon now owns the two dominant players in the web ecosystem — circa 1999. But at least it got them cheap.

Yahoo once had a market cap of $125 billion; AOL’s reached $224 billion in the immediate wake of its January 2000 acquisition of Time Warner — roughly the same as Verizon’s market cap today. So, scooping up both for less  $10 billion could be considered a steal.

YAHOO_headquartersThe question is, why bother? Neither AOL nor Yahoo is exactly dominant in its market today. In Yahoo’s case, it isn’t even clear what that market is. Even in announcing the sale to employees, Yahoo CEO Marissa Mayer could barely articulate a coherent description of what it is Verizon was buying, let alone why.

At best, Verizon is getting, in AOL and Yahoo, a disconnected assortment of online media properties and a pair of online advertising businesses built around display, rather than search, social, or mobile — the dominant modes of digital advertising today. While Verizon’s distribution reach in mobile may be able to breathe some new life into some of those media assets it has a long, long way to go before it could seriously challenge Facebook and Google, the dominant players it today’s digital media distribution and advertising ecosystem, if that’s really its goal. Read More »

Vizio Gives Its New TVs A Mobile Heartbeat

For people who still want to watch TV programming on a big-screen TV, cutting the cord means accepting a series of kludges. You can use the built-in apps on your smart TV to stream Netflix, Hulu and other popular over-the-top channels, but you’re still stuck navigating through menus and login screens using a point-and-click remote that’s often less functional than an ancient cable remote navigating a grid-style program guide.

You could buy a new Apple TV device with it’s sleek-looking, touch-based remote, but you’ll still be scrolling through menus and fumbling through on-screen, point-and-click keyboards. You can use a Chromecast dongle, and do your navigating on a mobile device, but Chromecast basically just turns the TV into a dumb display. Your mobile device isn’t really talking directly to the TV — the dongle is simply discovering your tablet or google_chromecast_2_hdmi_port_thumbsmartphone inputs by virtue of being on the same network and then fetching the content requested itself — which introduces latency between command and response. And if you need to answer your mobile phone in the middle of a show it can interrupt your cast.

But the biggest problems with most connected TV streaming platforms, whether embedded in the TV itself or implemented in a set-top box, are that their operating systems are generally static and the apps you use are no one’s priority.

TV makers are not really OS companies, and their streaming platforms show it. The UIs are primitive, and the OS functionality is limited by the computing horsepower — often not very much — built in at the time of manufacture. Since people generally don’t replace their TVs very often — certainly compared with how often they upgrade their phones — OS upgrades are limited to firmware updates, which don’t happen very often. Read More »

FCC Goes Searching For A New Set-Top Box

At a press conference following the Federal Communications Commission’s 3-2 vote Thursday to launch a formal rulemaking proceeding aimed at unlocking the set-top box FCC chairman Tom Wheeler emphasized, as he has since announcing the proposal last month, that nothing in the proposed new rules alter existing licensing or content-protection agreements  between networks and pay-TV providers or disrupt existing advertising models.

Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearingOn the contrary, he said, “the rules will require that the sanctity of the content is passed through” unaltered to any new device or app used by consumers to access pay-TV content. That includes, he went on to clarify, the network’s channel position, the content recording rules and the unadorned, original ad load.

“Nobody’s going to be replacing ads, or doing any kind of split screen, with ads on one side, or putting a frame around the content and putting ads around it; none of that,” he said. “The sanctity of the content will be preserved.”

In fact, it’s not clear from his comments what, exactly, Wheeler hopes or expects anyone to be doing with the newly open standards for set-top boxes, assuming the rules ever gets that far through the likely gantlet of lawsuits and foot-dragging  (the formal Notice of Proposed Rulemaking the commissioners voted on has not yet been published by the FCC). He took pains at Thursday’s hearing to make it sound as if nothing much would change about set-top boxes at all under the new rules apart from the manufacturer’s name plate, going so far as to put up a pair of identical slides purporting to show before and after schematic drawings of how consumers would access pay-TV content. Read More »

Red Zone: Why Apple Music Should Fear YouTube Red

The most notable feature of YouTube Red is what’s missing. There is no more Music Key, the long-awaited YouTube subscription music service that has been in beta for much of the past year but never gained much traction. Nor will there be any more dedicated subscription channels, where users could get ad-free access to a single creator’s channel.

Instead, for 10 bucks a month, you’ll get ad-free access to virtually everything on the YouTube platform, including YouTube Gaming and Apple_Music_iPhoneYouTube Kids. There’s also a YouTube Music app for those who simply want to use the service for listening to music.

YouTube Red subscribers will also automatically be subscribed to Google Play Music, Google’s subscription streaming and cloud storage service that up to now had cost $10 a month on a standalone basis.

In effect, Google is now making all of its music and video content services available on both a free, ad-supported basis, and an ad-free subscription basis. (Those who are complaining that YouTube is being mean by hiding the videos of creators who have not yet signed up for the subscription program are missing the point. The point is to have two identical services with two distinct monetization strategies, and letting the consumer decide which to use.) Read More »

For Amazon, Live OTT Comes With A Twitch

At his Streaming Media blog, Frost & Sullivan analyst Dan Rayburn adds a new wrinkle to the ongoing debate over why Amazon kicked Apple TV and Chromecast products out of its online store. According to Rayburn’s sources, Amazon has been chatting up content owners about offering a live, over-the-top video service of some kind.

Rayburn speculates that such a plan could help explain why Amazon recently acquired the cloud-based live streaming platform provider Elemental Technologies at an unusually high valuation:

cable_TV_not1Insiders say Elemental is on a run rate to do close to $100M in 2016. So if the rumors of Amazon valuing Elemental at $500M are correct, Elemental is getting about 5x projected 2016 revenue, a rather high valuation, unless Amazon is also placing value on them for other reasons, like the ability to power their own live OTT service.

I’ll add another data point in support of the notion: Twitch, which Amazon acquired last year for close to $1 billion. As noted in a post here last week, Twitch is rolling out a new set of tools to help its broadcasters linear-ize their channels, by mixing live and on-demand content and creating playlists that turn the channel into a 24/7 experience. Read More »