Posts by Ian Fogg from April 30, 2008

IanFogg | April 30, 2008, 03:53 PM
BT Goes Slow with New ADSL2+ Broadband Speeds

BT's Broadband Connect is late (originally due January), and yet will initially only be available to a tiny fraction of UK households (under one million homes and businesses *).

BT's launch is even more tardy compared with others:

- BT's UK ADSL competitors -- Sky, O2, Be -- have been offering ADSL2+ to a wider footprint than this for a couple of years.
- Similarly, VirginMedia offer ADSL2+ equivalent speeds, to many more households.
- Elsewhere in Europe, ADSL2+ launched years ago: French ISPs starting offering ADSL2+ back in 2004, and are now in the process of major fibre to the home broadband network (FTTH) rollouts.

If this is BT's 21st century network, then those fibre (FTTH) networks are for the 22nd century.

BT appear to have reverted to the sloth of the Home Highway period, rather than building upon their more recent successes in extending DSL's UK availability so widely. (Home Highway was BT's late 1990s ISDN -- narrowband -- product that launched in the UK at the same time the rest of Europe was rolling out broadband).

I would love to say something more positive about this announcement, but BT appear to have gone very quiet in their analyst communications on 21CN and Wholesale Broadband Connect. So, all I have to go on are the details of the product offer, knowledge of other European markets, and what I hear from UK ISPs that sell BT's wholesale products... and none of that looks good!

* BT say 'available from exchanges serving around one million homes and businesses' therefore, given some of those telephone lines will not support ADSL2+ speeds, the actual number of homes and businesses that will be able to benefit is even lower than one million!

IanFogg | April 30, 2008, 10:48 AM
Why VirginMedia Now Has BBC iPlayer on its TV VOD Service

VirginMedia has secured iPlayer content for its VOD service. This is an approach I advised Internet video suppliers to take in this report. It's great to see that traditional TV industry players like VirginMedia better understand the potential for free Internet VOD than do two out of the three leading games console makers, despite those games console makers' video strategies.

There are two reasons offering iPlayer on the normal TV VOD platform makes sense for VirginMedia:

1. Offers VirginMedia's users better picture quality than the PC Internet version of iPlayer and displays the programmes on the TV through the normal cable set-top box. This increases the value of VirginMedia's TV offering to consumers and should help customer retention.

2. Reduces the pressure on VirginMedia's overstretched broadband system. More here, under fig 3, especially.

IanFogg | April 30, 2008, 10:28 AM
More Console Positioning Fault Lines: TV and VOD

This is a follow-up to yesterday's post on understanding the game console makers' strategies.

The console owners approach to video on demand (VOD) and TV also highlights their divergent marketing:

PS3 and Sony - See the PS3 as a TV and video hub, with content available for remote access using a PSP. They will launch a digital TV tuner later this year that will enable consumers to record TV onto the console's hard drive (but the availability date has slipped), and will help expose the PS3's video abilities to consumers. On demand is also a key focus, as is securing pay TV operator partnerships. But, Sony are uninterested, so they say, in securing BBC iPlayer content.

Microsoft Xbox 360 - Have an on demand platform live in the US and UK with pay per view movies and TV. Separately, they've also struck a VOD deal with BT so Xbox can act as a player for BT's video on demand content. Microsoft have little free, or no, on demand TV content with which to grow the consoles video audience. They are trying to monetise a nascent activity -- video consumption on consoles -- before developing a video-watching console audience. Like Sony, Microsoft appear ambivalent to building Xbox360 iPlayer support.

Nintendo Wii - Say video and TV is not a core focus, and the Wii is all about games and expanding the games market. However, together with the BBC, Nintendo have enabled BBC iPlayer support, which Nintendo plan to draw consumers to use their Wii's more. In particular, like the Wii news or weather channel, iPlayer will encourage members of Wii-owning households who do not use the Wii for games, to try it, thus securing more games revenues...

With >1 million weekly users of the PC version of iPlayer, just months after launch, I know which of the above strategies makes more sense.

Unfortunately for ISPs, all of the above will increase their broadband cost base... as consumers watch more high quality Internet-delivered video... which hits ISP networks and for which ISPs currently have no revenue-driving value chain position. More on this point later.