Nokia today introduced its new smartphone, the N8, the first based on the Symbian 3 operating system. It’s got a great 12Mp Carl Zeiss camera, social messaging widgets and Ovi Maps. Symbian 3 allows for user-selected home screens, multi-touch and gesture support and improved UI, graphics and speed through its Broadcom graphics and 680MHz processor. So far, so good. But what we really want to know is, how does it handle video? As we’ve mentioned previously, Nokia has promoted TV out capability on its N series smartphones for several years, and has talked about one day delivering DVD quality video from handsets to TV screens. Previous smartphones have fallen short but it seems as though the N8 may finally be reaching this goal (although we look forward to seeing this demonstrated in person rather than on a conference call). The N8 captures HD video (720p) at 25fps. It supports H.264, MPEG-4, VC-1, H.263, Real Video 10, ON2 VP6 and Flash video file formats. Most importantly it features HDMI for output to digital HDTV displays, therefore potentially taking on the role of “set-top box” to the TV screen. Nokia emphasises the ability to play back user-generated video on the TV, but the phone can clearly potentially also serve as a video player for much HD content, rights issues permitting. To emphasise this point, the N8 will come pre-shipped, depending on region, with appropriate “web TV” applications, such as the BBC’s iPlayer in the UK (although it is not clear if these will support HD rather than just SD). Functionally there is still some way to go. The N8 can push HD video to a 40” LCD over an HDMI cable, but it’s not likely to be a long cable, so to control what’s happening on the big screen the user must keep returning from the sofa to the handset. We mentioned the need for a remote control to Jo Harlow, Nokia’s head of Symbian Devices, who told us it was an interesting idea which she would recommend to her team for consideration. For reference, while we welcome the opportunity to support Nokia’s product development activities, this blog has highlighted this problem previously. Third party vendors will no doubt step into this gap until Nokia brings out its own solution. In any case there is a genuine question as to whether users will accept the mobile phone functioning as a “set-top box” when it is, after all, their main gateway to personal communications and the handheld web. Even if the N8 can play a 2 hour HD movie on the big screen, will owners be happy to let go of it for that length of time as they relax in the armchair? The answer to that problem will have to be wireless HD connectivity, another subject we have covered extensively.We are sure that this is also on the roadmap of Nokia and other handset vendors over the next couple of years. David Mercer Client Reading: Global Audiovisual Market Forecast

Armour Group, the UK consumer electronics company, was demonstrating its Tip and Tilt Internet Radio at NAB, having introduced it earlier this year at CES. The product features a neat and simple cube design, wifi connectivity, runs on a rechargeable lithium ion battery, and will be available in a range of bright colours when it launches this summer. It can be programmed from a PC to play any four internet radio stations, and these are selected by moving the cube around four of its sides. The remaining two sides – top and bottom – are used to tilt the volume up or down. The device will retail at $99 and £70 and is aimed at expanding the market for internet radio to less technophile segments. Armour was hoping to catch the eye of broadcasters, not just with the Tip and Tilt’s innovative design, but with its potential to lock listeners in to particular radio stations, which the software allows. Broadcasters might be persuaded to subsidise the device if it could only be used to listen to their stations, locking out competitors and increasing their share of the advertising pie. There are several difficulties with this argument. In particular, there must be doubts whether radio listeners would be happy to be prevented from selecting any station they choose. The counter-argument is that restricted content access, a model familiar to other sectors, such as games consoles and pay TV. Our feeling is that if a major station group, such as Global Radio in the UK, subsidised the device to such an extent that it became very low cost, or even free, demand could be sizeable. But the economics would be challenging, even if the broadcast industry was not recovering from a deep advertising recession. We suspect that in high volume the device could be manufactured for $30-40. But a major broadcaster might buy, say, 100,000 units at a cost of $3-4m, and that is not a trivial investment for an industry struggling in challenging times. And would that type of volume really make much impact on advertising ratings? Given Global Radio’s weekly reach, as an example, of more than 18 million listeners, it seems rather doubtful. So we conclude that the Tip and Tilt will likely need to focus on the retail opportunity, and it may find many willing buyers at its low price point. Internet radio is something which has been waiting to break out of its PC prison for many years and this sort of innovation is what is needed to help accelerate that trend. David Mercer Client Reading: Global Audiovisual Market Forecast

“Hybrid” was one of the hot themes at this year’s IPTV World Forum a couple of weeks ago in London, in spite of the fact that the concept of melding two or more services into one is hardly new. But the term was scarcely mentioned here at the NAB Show, and when I suggested to Sezmi’s VP of Network Engineering and Operations, Veeraraghavan Krishnan, that his company offered a hybrid solution it didn’t appear to ring any bells. But hybrid TV is exactly what Sezmi has developed. The company began its commercial launch six weeks ago in Los Angeles and its set-top boxes are available in Best Buy at $299. Customers receive the standard digital terrestrial TV ATSC channels available in their local area, together with content delivered in two additional ways: via the broadband Internet connection; and in additional capacity over the wireless broadcast signal, which Sezmi licenses from local broadcasters. Sezmi’s playout facility in Florida determines what spectrum is available in each location and balances the use of broadcast and IP delivery accordingly. In general the system pushes more popular content to the broadcast spectrum, as expected, but is flexible enough to adapt on an hourly basis. Krishnan took me briefly through the viewer guide. The clever thing about Sezmi is that there really is no easy way for the user to know how content is delivered. The menu disguises the content’s origin, whether it arrives on demand over the Internet (and downloaded progressively), or stored on the set-top box’s 1TB HDD. The demonstration on the show floor inevitably suffered from some buffering and access issues. Sezmi claims that users require a 1.5Mbps broadband connection in order to watch internet-based video. We also discussed Sezmi’s decision to offer personalised content. When the box is switched on users have to log in, either as individuals or as a guest. We’ve pointed out before that the large screen TV is problematic when it comes to personalisation because it is usually sited in a multi-viewer environment. Which family member is supposed to log in to see their personal recommendations when everyone else is also watching TV? Krishnan did not appear to have an answer to this point beyond suggesting that the family should log in as a “guest” in their own home… It’s important that Sezmi sorts out its position on this question because one of its next steps will be to introduce targeted advertising. If broadcasters and, more importantly, advertisers, are to benefit from that capability they will need better clarity on which viewer or viewers they are targeting. There have been lots of discussions about Sezmi’s opportunities and business models. The assumption seems to be that people will not pay $299 up front for a subscription TV service that costs either $4.99 or $19.99 a month. As always, I’m not sure it’s as simple as that, and there may well be segments who find that a lower cost alternative to cable or satellite TV which blends broadcast and online content may be attractive. Whether those segments are large enough to sustain Sezmi towards profitability seems rather uncertain, but broadcasters cannot afford to ignore this sort of innovation in their battle for survival. David Mercer Client Reading: Global Digital Television Forecast: 1H'10

Thomas Edwards, VP, Digital Television Testing & Evaluation, at Fox, was speaking this morning at the Digital Cinema Summit at the Las Vegas Convention Center, one of the many conference programs running concurrently with the NAB Show over the next few days. Fox, of course, is a sister company to BSkyB under the News Corp parent, and BSkyB, as we have regularly reported, is a firm advocate of 3D as the next major business opportunity. So it would be interesting to see Fox and BSkyB executives debate the business viability of 3D after Mr Edwards’ comments that he “doesn’t know if 3D can make money”. Edwards listed some of the obstacles he is facing as Fox experiments with 3D production and broadcasting. 3D equipment, particularly cameras and rigs, are still “hard to obtain”, and are fragile, large and heavy. Stereographers, the specialists responsible for the 3D experience, need to be trained. There are design issues such as placement of the score box and other graphics. There are issues of quality with broadcast 3D, which today (under BSkyB and Fox’s current side-by-side approach at least) is sub-HD quality. And there are challenges associated with keeping the 3D material in synch throughout the various stages of production. Edwards also didn’t seem to be convinced that 3D necessarily improved on the 2D experience when it comes to sports productions. He noted in particular that wide shots, such as a view of a full half of a soccer pitch, tended to reduce the players to “matchstick figures”. In certain close-ups, however, 3D clearly offered a benefit, allowing viewers to appreciate the positioning of players more accurately than in 2D. Edwards called for the beginning of mass production of 3D cameras, rather than the current range of custom-produced two-camera rigs, and that they should be much smaller than present designs. No doubt we will see some examples of early “integrated” 3D cameras here at the NAB Show, with Panasonic for one expected to announce its first model. Register for Strategy Analytics' Analyst Breakfast at the NAB Show Client Reading: Global Audiovisual Market Forecast

"The FCC is not having a one-night stand with Net neutrality,” said FCC Commissioner Michael Copps back in 2008, “ but an affair of the heart and commitment for life.”   Today’s ruling by the U.S. Court of Appeals for the District of Columbia may amount to a trial separation for the lovely couple.  The court delivered a painful kick in the shins to the FCC today, ruling that the agency  overstepped its boundaries in 2008 by imposing an enforcement action against Comcast, alleging the cable company’s  broadband network management practices to be in violation of the FCC's policy principles. Today’s ruling vacates the enforcement, which had called on Comcast to be more transparent in its network management practices.   While today’s decision may raise more questions than it delivers answers, it may be useful to consider some of the short and medium term implications.   The court’s decision is more about the FCC’s authority than on “Net Neutrality” per se  My number one prediction?  The mainstream media will get it wrong.   They will suggest that this is a ruling against Net Neutrality.  To be clear, today’s ruling is about the role and the regulatory boundaries of the FCC—not necessarily a ruling against Net Neutrality or the concept of an Open Internet.  The FCC in a statement said the agency remains "committed to promoting an open Internet and to policies that will bring the enormous benefits of broadband to all Americans."   This decision will be challenged, but that could take years.  In the meantime, look for the service providers to begin “testing the waters.”   I’m no lawyer, but as a more than casual industry observer, I can predict with some certainty that this is not a definitive ruling.  It will more than likely end up in the Supreme Court—but don’t make any plans yet.  Broadband is now classified by the FCC as a “lightly regulated information service,” and as such it skirts many the regulations imposed on traditional Telecom services with regards to open networks. Some suggest that the FCC, as a rulemaking body, can simply reclassify broadband, and impose tougher regulation.   Whatever the final disposition is, time is on the side of the service providers.  The glacial speed of change in DC means that in the upcoming months (and even years), Comcast and other service providers—granted a temporary reprieve—will likely begin testing the waters, and recommence traffic prioritization and other various and sundry network management antics.   What about OTT?   An affirmative decision on Net neutrality has always been a cornerstone of the future of unmanaged over-the-top (OTT) video.  Today’s ruling throws a monkey wrench in those works.  Until the next challenge, Comcast (and any service provider for that matter), reserves the right to prioritize and manage traffic streams as they see fit.   “Sure we’ll get your YouTube video—just not all at once.” And oh yeah, what about the future of the US National Broadband Policy?   Here’s hoping the FCC is reunited with its soul-mate.   -Ben Piper