HomePNA Blog

Service Providers Driving Home Network Shipments

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

Well, I admit it. I like good news. Especially the kind that supports trends we’ve been predicting and reporting (ever notice how similar brag is to blog?).

A new report from market analyst Joyce Putcher at In-Stat entitled “2Wire, Huawei, and Thomson Make Major Gains across Broadband CPE Market Share Segments” provides more evidence that the basic dynamics of the home networking equipment market is changing.  Or is the correct term “maturing”?

Is it competition from TelcoTV service providers? Is it telecom evolving into a three network (hint to the Adult ADD crowd, the home network is the third) network? Is it home networks enabling service providers to add new customers and increase ARPU (a smutty sounding acronym for Average Revenue Per Customer) with new features like whole-home DVRs and remote diagnostics or new services like home technical support? Are other parts of the home networking equipment market saturating? Is it because music downloads and other popular “traditional” applications run pretty well on older Wi-Fi home networks?

In the words of a friend from one of the headline companies “Thanks! Now we just have to keep it up, but it just goes to show that the Telcos will win the home networking war in the long run”. And need we mention; they will need to have a fast and robust home network like HomePNA in the boxes.

IPTV Grows Worldwide

By Michelle Gamble-Risley, director, HomePNA Marketing and PR

Market analysts MRG released their Global IPTV Market Leaders Report — March 2009 that describes some interesting trends around the world. Among the most notable, the report cites global growth and most specifically in China where strong gains have been for Access, video on demand, set-top boxes, middleware and content protection. “This kind of a regional category-take-over is unprecedented,” states Jose Alvear, IPTV Analyst at MRG. “Larger regional vendors (and service providers) are starting to ‘pull out all the stops’ on their regional strategies, on the belief that the economic contraction is offering unique opportunities to move aggressively into un-served markets.” We’re not surprised by the report’s revelation – in fact, we expected to see worldwide growth particularly in the Asian countries and South America where our own business interests continue to build.

A Little Game of Television Domination

By Michelle Gamble-Risley, director of HomePNA Marketing and PR

All of those analysts out there that predicted that cable would dominate the telecoms when it came to the delivery of video services can get ready for a slow, but-ever-creeping-up coup. News out of Stifel Nicolaus, a research and investment firm, knocks out the notion like a painful sucker punch. The firm reports that for the first time, the growth of video customers should outpace the telephony gains among cable companies. We imagine executives at AT&T and Verizon, who largely view the cable MSOs as the television competition rather than each other, have already broken out in a triumphant dance of conquest. To add excitement to thrill, the report also suggests AT&T and Verizon will continue to take a nice bite out of their conquered market share over the next few years. Oh yeah, it’s good to be the conqueror!

“Social-Media-Ize”

By Michelle Gamble-Risley, director of HomePNA Marketing and PR

Now we could be going out on a limb with this one … but the growth of IPTV and the rapid explosion of social media (Facebook, Twitter, Linked-In) has us wondering how it will all tie together? And it mostly certainly will. You can’t have to two popular and somehow connected media that don’t converge together. So, we’re going to be futurists here and suggest that in the next five to 10 years as IPTV proliferates and social media continues to explode, a merge of the two can’t be far behind. We’ve already mentioned our expectation that digital broadcast television and the Internet will somehow find themselves coupled like a yin-yang marriage where the opposites have learned to not only coexist but do so with an energetic harmony that somehow makes sense. Now toss in the obsession that has become social media and you have the makings for a new generation of ultra social couch spuds ready to launch into cyberspace and meet all of the people they may have only said “hi” to once in an elevator. We are curiously on the verge of something truly interesting that will impact society and culture in some unexpected ways. And HomePNA intends to be right in the middle of it as the potato soup du jour providing the necessary standard to distribute all of this wonderful home entertainment to every room in the house. So, here’s to your “social” spud lives!

Verizon FIOS, AT&T Uverse, and the Recession

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

So much to write about, so little time. I was in the middle of a blog on the positive 4Q results from Netflix and Verizon FIOS last week when I saw the “Recession’s Silver Lining Ringing True?” article from Telecompetitor newsletter -- which said most of what I was going to say and said it pretty well: “But for the telecom sector, there may lay a silver lining. This beacon of light premise suggests that carriers who offer entertainment options may benefit from today’s economic climate. The thinking being that consumers will choose home based entertainment options over going out to save money.”

I would have included AT&T new 264,000 new Uverse TV customers bringing their total to over 1M  (although they did push the goal to pass 30M homes a year to 2011).

One difference between AT&T and Verizon is the penetration. Verizon claims 21% while AT&T’s 1M customers out of 17M homes passed works out to about 6% penetration. So what? AT&T uses VDSL to deliver Uverse over phone wires. When they say they “pass” 17M homes, they mean that they have installed the necessary VDSL equipment near 17M homes. Add a new VDSL line card to one of those equipment cabinets and you connect about a dozen or so new Uverse TV customers. Lot’s of upside there. Verizon’s approach requires them to run a new fiber cable to every new FIOS customer’s house. Either way, TV service is helping these telcos compensate for declining landline businesses while helping to add and retain broadband customers.

The Golden Age of Home Networking

By Michelle Gamble-Risley, director, HomePNA Marketing and PR

We've been discussing the windfall that the home networking industry is experiencing directly tied into our recession (yes, all indicators show we can unfortunately use that word). We are not the only ones noticing the amazing uptick in the home networking market as the economy takes a downward turn. Advance Television.com recently publicized a report that in the United Kingdom an upsurge in HD television has come as an unexpected turn of events during the recent credit crunch. Their report supports other theories that users are running for cover straight into their homes and noticing their television maybe isn't sexy enough. If you're not going to partake in your favorite pastime (a.k.a., shopping) then why not spend a little extra on your home entertainment? We mentioned this same thing happened during the Great Depression – only it became the Golden Age of Cinema and produced one of the first true movie stars, Charlie Chaplin. So, the good news – home networking may end up being one of the few industries to "grow" this year!!

Always be Reliable!

By Michelle Gamble-Risley, director, HomePNA Marketing and PR

Interesting turn of events in terms of consumer behavior and expectations we think is applicable to home networking. CDNetworks, a content delivery network based in Seoul, South Korea, announced 300 percent growth in revenue during its first full year of operation in the U.S. market. The kicker: the company claims that "flexible operations, responsiveness to customer needs and 'service reliability' are the most important factors for clients when choosing a content delivery network." The interesting part that doesn't align with our theories: the customers will choose essentially QoS over commoditization of service, which would essentially keep prices down. Here at HomePNA, we know QoS matters but our expectation would be that bundled services would drive down prices and drive up interest in adding triple-play services. Very interesting … where will these kind of results impact our industry? We shall see.

 

Beyond Digital … Delayed?

By Michelle Gamble-Risley, Director HomePNA Marketing and PR

Word on the street according to Fierce IPTV suggests that President Elect Obama may delay the imminent transition from analog to digital television for 90 days.  Not all telcos agree on the potential decision (maybe based on their own self interests) but HomePNA member AT&T appears to be prepared to support whatever will make a smooth transition. AT&T, which recently hit 1 million U-Verse subscribers, offers IPTV service over VDSL is already prepared to offer subscribers whatever they need. Transition or no transition, AT&T will go with it. Since not all telcos are created equal (and thou shall not mention a competitor's name in our blog) not everyone is as flexible. None the less, the ever-expanding IPTV base will not be affected by the transition in way, shape or form – U-Verse is already digital. No worries for the so-called "couch potato" economy apparently emerging during our current economic times. Most of the "couch potatoes" are already digital and don't even know it. So, they can collectively shrug and move on (from the room to room seamlessly, that is).

Just how mainstream is IPTV?

By Michelle Gamble-Risley, director, HomePNA Marketing and PR

Once closet technology familiar among only geeks, gurus and techies IPTV has hit main street to become more commonly known among the "folks."  What evidence do we have to support our announcement? Just look at a recently launched video contest sponsored by Actiontec. Actiontec invited users to create a short video to show why they love their broadband connection. Videos can depict among others thing IPTV or connecting your home entertainment center to the Internet. Wait! Did they use the word IPTV undefined and business as usual in a consumer invitation? Yes, I believe they did. How exciting is that? And what does this mean for HomePNA technology that enables distribution of triple-play service including IPTV throughout the home? It means consumers are becoming aware of it and will not only ask for IPTV to be included in their service provider bundled packages but DEMAND it be included. Service providers not ahead of the demand will be forced to forge ahead to meet that demand by developing and delivering IPTV capabilities as a part of their standard offerings. We here at HomePNA welcome and encourage service providers in need of assistance to join our growing organizations and get a leg up on meeting the forthcoming demand.

IPTV the Next Entertainment Revolution … Think DVD

By Michelle Gamble-Risley, director, HomePNA Marketing and PR

When DVDs first came out most users looked at the expensive discs and thought: needs a new and expensive DVD player, which I don't own (think Blue Ray today). Now DVD players and discs are as ubiquitous as VHS was about 10 years ago. Here at HomePNA we're excited because the next generation of home entertainment networking is right on the cusp of exploding onto the market and taking over like a really great leader coming to power. Industry statistics indicate a rapidly growing IPTV market that experts expect will take the home entertainment market by storm.

Fierce IPTV recently reported there will be 53 million IPTV subscribers worldwide in 2009 and reported total expected revenue of $38 billion from IPTV services next year.The report noted that the Asia-Pacific region will lead the world in subscriber growth, while China will be a particularly hot market. The research firm also reported consumer familiarity with IPTV is still low and cost continues to be the most significant factor in subscriber adoption. Elsewhere, ABI Research reported this year that there could be 93 million IPTV customers by 2013.

Fifty-three million IPTV subscribers represent a tremendous market opportunity. Technology companies working diligently to create IPTV-related products (think set-top boxes, gateways, etc.) will flourish is the evolving market. Companies that are still waiting to see or understand the value will soon miss the gravy train. Join HomePNA today and enjoy the rewards waiting for you in this rapidly growing marketplace. For more information, contact Rich Nesin, general manager, at rnesin@homepna.org.