Welcome!

Java IoT Authors: Pat Romanski, Elizabeth White, Derek Weeks, Liz McMillan, Jyoti Bansal

Related Topics: Microservices Expo, Java IoT, Mobile IoT, Microsoft Cloud, Linux Containers, Agile Computing, Video

Microservices Expo: Article

Why Did AT&T Enter the OTT Market and Streaming Video Business?

The opportunity to attract customers with an over-the-top (OTT) video-streaming and TV offering is significant

When the U.S. Appeals Court struck down the Open Internet Order's rules that prohibit Internet service providers (ISPs) from site-blocking and providing preferential service, the debate surrounding the true definition of an open and unfettered Internet reached fever pitch. Most of the large access providers in the U.S. are subsidiaries of traditional telecom carriers and cable companies. These companies fought hard for this ruling, so it is reasonable to expect that they already had their strategies in place and plans drawn up for the investments that will be needed to rebuild the Internet, or at least a part of it, according to their vision. It is about time too. Of all the technology companies that existed before the Internet, the telecom carriers and the cable companies were best-placed to take the lead in building the future. Yet in so many areas, the technical and service innovation came from new companies and organizations we had never heard of before - not from those traditional players. Phone and cable companies have never been leaders in the World Wide Web, cloud computing, social media, Voice over IP and many other areas. But now, they have changed the playing field (at least in the U.S.) to suit the game they want to play, and so, liberated from the fetters of the unfettered Internet, we have a right to expect new innovative services. With the gates opened to competitive differentiation, we're seeing interesting things, such as AT&T's $500 million joint venture with the Chernin Group to acquire, invest in and launch video-on-demand channels and streaming video services to compete with the likes of Netflix, Hulu and YouTube.

With more customers moving away from broadcast, cable or satellite TV, the opportunity to attract customers with an over-the-top (OTT) video-streaming and TV offering is significant, as is the opportunity for the right player(s) to deliver these services across multiple platforms (e.g., mobile) and distribution channels, thereby increasing revenue streams. OTT streaming services provide new players with the opportunity to deliver video content and new entertainment experiences to consumers outside traditional linear TV paths, such as cable, satellite or terrestrial. Since OTT services provide programming over the Internet and can come across the same wires as your cable TV service, the barriers to entry are greatly diminished.

It is no secret that AT&T has not been a fan of Netflix and the two are publicly quarreling over how much money the video service should pay for a direct connection to the AT&T network. It is worth noting that since the creation of the Internet, Web companies have negotiated peering and interconnection agreements where websites connect to intermediaries, which carry the traffic to ISPs, which deliver the content service to customers. Most people were not even aware of these interconnection relationships until February when Netflix agreed to pay Comcast to connect directly to its network. Though the Netflix CEO suggests that Comcast had strong-armed him into paying an "arbitrary tax," the deal ensures that Comcast customers have improved video quality for Netflix service.

Verizon has also asked Netflix to pay for a direct connection to its network, even as Verizon users (and AT&T customers, for that matter) complain of poor Netflix performance. Netflix has tried to avoid making payments, despite giving in to Comcast, and instead asked the FCC to issue net neutrality rules that "prevent ISPs from charging a toll for interconnection to services like Netflix, YouTube or Skype." Its request was rejected by the FCC when it indicated that it has no plans to expand its net neutrality rules to ensure that services like Netflix can connect to Internet providers' networks for free. In his response to Netflix, FCC Chairman Tom Wheeler asserted that the government has an important role to play in overseeing how networks connect to each other, but peering and interconnection arrangements are not a net neutrality issue under review by the Open Internet proceeding.

This is a highly charged argument for both sides. Carriers always have options when faced with growth exceeding capacity: either charge higher fees to reduce traffic or let congestion run rampant for all travelers. Unfortunately both these options have a negative customer satisfaction result and are lose-lose situations for the carrier. If the service quality for a streaming video is less than desirable, customers will get grumpy and blame their ISP for a "slow" connection. Netflix argues that "Some big [ISPs] are extracting a toll because they can-they effectively control access to millions of consumers and are willing to sacrifice the interests of their own customers to press Netflix and others to pay." Netflix is clearly upset, but video streaming has turned into a mass-market service and is a capacity hog. If Netflix and other OTT players want to use an increasingly scarce resource to carry its service at the quality levels the service dictates, who pays? There are limits that will be hit and someone will have to pay to expand the network due to growth in streaming, the growth of mobile and the coming tsunami of the Internet of Things.

Although the AT&T/Chernin deal marks the first time a big U.S. ISP has decided to go over the top with a TV service, Verizon also has plans for a streaming TV service through its acquisition of Intel Media, and has created a video streaming service by partnering with Redbox. On the broadcast side, Dish Network has also brokered a deal with Disney to stream Disney-owned channels such as ESPN and ABC over the Internet to customers' smartphones, tablets, video game consoles and other devices.

As more consumers increasingly view content on their smartphones, tablets, game consoles and connected TVs, the ability of a provider to reach across multiple platforms will unlock new monetization opportunities for a multiplatform experience.

AT&T's partnership with Chernin Group will bring a video-on-demand service to market, and presumably provide more content outside traditional broadcast options. If the content is rich enough, Comcast or Verizon FiOS TV subscribers can select the offering and put a wrench in the business of content companies.

There is an opportunity to go to market with original content that drives new customer experiences across mobile devices, social platforms and new technologies, thereby disrupting existing business models. There is a lot at stake for AT&T and it must ensure that its content is worth viewing to stand out in a crowded field of OTT providers. It would appear to be off to a good start with its Chernin partnership. The Chernin Group provides its media smarts and its majority stake in Crunchyroll, an anime streaming company, while AT&T delivers the potential for extensive distribution and access to its customer base and wireless networks.

Clearly, different and varied business models will need to be supported and monetized, whether they are advertising models similar to Google's YouTube, subscription fees like Netflix, or both advertising and subscription models like Hulu. As new partnerships and business models are envisioned, these will also have to be quickly launched and monetized at a pace not seen by carriers for traditional services.

Interested in learning more about these industry developments? Tweet us your questions!

More Stories By Esmeralda Swartz

Esmeralda Swartz is VP, Marketing Enterprise and Cloud, BUSS. She has spent 15 years as a marketing, product management, and business development technology executive bringing disruptive technologies and companies to market. Esmeralda was CMO of MetraTech, now part of Ericsson. At MetraTech, Esmeralda was responsible for go-to-market strategy and execution for enterprise and SaaS products, product management, business development and partner programs. Prior to MetraTech, Esmeralda was co-founder, Vice President of Marketing and Business Development at Lightwolf Technologies, a big data management startup. She was previously co-founder and Senior Vice President of Marketing and Business Development of Soapstone Networks, a developer of resource and service control software, now part of Extreme Networks.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
Every successful software product evolves from an idea to an enterprise system. Notably, the same way is passed by the product owner's company. In his session at 20th Cloud Expo, Oleg Lola, CEO of MobiDev, will provide a generalized overview of the evolution of a software product, the product owner, the needs that arise at various stages of this process, and the value brought by a software development partner to the product owner as a response to these needs.
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, John Jelinek IV, a web developer at Linux Academy, will discuss why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers...
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex softw...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, discussed the best practices that will ensure a successful smart city journey.
Technology vendors and analysts are eager to paint a rosy picture of how wonderful IoT is and why your deployment will be great with the use of their products and services. While it is easy to showcase successful IoT solutions, identifying IoT systems that missed the mark or failed can often provide more in the way of key lessons learned. In his session at @ThingsExpo, Peter Vanderminden, Principal Industry Analyst for IoT & Digital Supply Chain to Flatiron Strategies, will focus on how IoT depl...
Big Data, cloud, analytics, contextual information, wearable tech, sensors, mobility, and WebRTC: together, these advances have created a perfect storm of technologies that are disrupting and transforming classic communications models and ecosystems. In his session at @ThingsExpo, Erik Perotti, Senior Manager of New Ventures on Plantronics’ Innovation team, provided an overview of this technological shift, including associated business and consumer communications impacts, and opportunities it m...
Manufacturers are embracing the Industrial Internet the same way consumers are leveraging Fitbits – to improve overall health and wellness. Both can provide consistent measurement, visibility, and suggest performance improvements customized to help reach goals. Fitbit users can view real-time data and make adjustments to increase their activity. In his session at @ThingsExpo, Mark Bernardo Professional Services Leader, Americas, at GE Digital, discussed how leveraging the Industrial Internet and...
"Tintri was started in 2008 with the express purpose of building a storage appliance that is ideal for virtualized environments. We support a lot of different hypervisor platforms from VMware to OpenStack to Hyper-V," explained Dan Florea, Director of Product Management at Tintri, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
There will be new vendors providing applications, middleware, and connected devices to support the thriving IoT ecosystem. This essentially means that electronic device manufacturers will also be in the software business. Many will be new to building embedded software or robust software. This creates an increased importance on software quality, particularly within the Industrial Internet of Things where business-critical applications are becoming dependent on products controlled by software. Qua...
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
A critical component of any IoT project is what to do with all the data being generated. This data needs to be captured, processed, structured, and stored in a way to facilitate different kinds of queries. Traditional data warehouse and analytical systems are mature technologies that can be used to handle certain kinds of queries, but they are not always well suited to many problems, particularly when there is a need for real-time insights.
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus o...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
"LinearHub provides smart video conferencing, which is the Roundee service, and we archive all the video conferences and we also provide the transcript," stated Sunghyuk Kim, CEO of LinearHub, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
"There's a growing demand from users for things to be faster. When you think about all the transactions or interactions users will have with your product and everything that is between those transactions and interactions - what drives us at Catchpoint Systems is the idea to measure that and to analyze it," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York Ci...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...