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TV or Not TV – That is the Question Eli M. Noam Professor of Finance and Economics Garrett Professor of Public Policy and Business Responsibility Director, Columbia Institute for Tele-Information (CITI) Columbia University CRC Conference, Colombia, September 2012 1
• Book on telecommunications in Latin america • CITI ACORN/REDECOM • the Columbia Institute for TeleInformation has taken 4 years ago the initiative to start a network of Western Hemisphere academic research centers in telecom and IT. We hope to collaborate with many of you.
• Tnx, CRC. Tnx executive director Carlos Rebellon villan • I’m Really happy here in this old city Cartagena • And I am Glad to be here in Colombia, the country • I come to you from columbia, the university. • Already, whenever I travel around the world as a professor from Columbia univsersity, people ask me, how are things going in bogota. So it’s 2 nice to bring the two columbias together.
Columbia Institute for TeleInformation Initiative • ACORN--REDECOM – Americas Communications Research Network • 28 university research centers from 16 countries 3
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Sequence • Impressive program • Impressive lineup of speakers and audience I planned to speak about OTT etc, but this seems to have been pretty well covered already And will be discussed again later this afternoon So let me mostly take this, a step further. And talk about ‘beyond OTT” and therefore also, “beyond the regulation of OTT”. 5
• Sequence se are witnessing and discussing may be simplified as • IPTV • OTT • And what is beyond OTT?
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Speed (Kbps) Trends
Why discuss this? • Progress in technology proceeds at Moore’s Law speed. – About 40% CAGR – And translates itself into progress in devices at probably 20%
• In the transmission field, similarly, enormous rates of progress. Here is the speed of transmission • Exponential, at about 40% 7
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Regulatory Gap? • But this speed of change is obviously impossible to match on the regulatory front. • Here, the speed has probably declined, for several reasons— • More complexity, more players invovled, higher fianncial stakes, more international dimensions, more lawyers but not more judges, etc etc 9
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• So the gap beween reality and policy keeps growing. • How to offset this? • Work harder, of course. • But also, learn from others– hence this event is so useful • And, start sooner. So it is impotant to understand the next issues early. 11
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• Today, I would like to discuss the role of telecom and telecom regulation in the next television environment.
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• But the bad news is that all this will lead to a much more regulated telecom sector than at present. • And to a much more political regulation than at present. • And to a telecom sector that will become the main enforcer of societal TV regulations,
• Let me summarize my conclusion. • First, the good news is that all this will make the telecom sector more important than ever. 15
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• So let me try to go through this discussion, step by step.
• and to a telecom sector that will become the main source of taxation for the support of national culture. • And to a telecom sector that will be the platform for culture and politics • And the focus of governmental attention
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• We have heard about the various network upgrade efforts
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1st Generation Television: Broadcasting
•TV used to be a simple matter
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• The limited number of channels meant national, middle of the road content
http://media-2.web.britannica.com/eb-media/31/71331-004-CDC77097.jpg
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•But then, TV got complicated
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2nd Gen TV: Multichannel TV
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2nd Generation TV
• Cable TV • DBS • IPTV
Push Model 23
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Pro’s- Con’s
• Can be integrated into general telecom offerings, and marketed as triple or quadruple play • It’s the “Push” Model, which characterizes broadcasting • But: Synchronous simultaneous transmission of hundreds of channels to enduser who watches only one channel. • No individualization of time, no very specialized content possible • Must compete in many places against established and experienced cable TV companies • Phone companies have no entertainment video25 experience
• Around the world, networks get upgraded to fiber. • They move from broadband bandwidth capacity to ultrabroadband. • From kilobit to megabit to, soon, gigabit. • A real historic transition 27
And Now, 3rd Gen TV TV over Broadband Internet 26
•The pace of change in transmission technology has been strong and steady 28
• So here you see the exponential pace of transmission technology over 170 years. Not only is it enormously growing in speed, at a rate of over 25% CAGR, but that pace has actually been accelerating to about 40%.
Speed (Kbps) Trends
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Fiber Optic Cables • Google Kansas City, 1 MBPS
http://www.fibercabling.com/fiber-cabling-orlando/ 31
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• And that’s just technology. It has economic impacts. • The price for the distribution pipe for a Mbps has declined at a similar rate
• NTT and Deutsche-Telekom have shown speeds of 60 terabits over a single fiber strand. • That would permit, with compression, over 100,000 parallel video channels of standard definition 33
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Price of Distribution per MB (Individualized Channels) • Declining And the price of the media information itself, on a per bit basis, also declined enormously
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Price of Media Information per Gbyte
• In the past we had transmission networks of 2 types: • 1. Networks that moved a lot of bits shared by many: –fat party line—cable TV –and a narrow mobile version, broadcasting 37 37
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–2. Networks that moved a relatively small number of bits, on an individualized basis—skinny individual lines—telephony –and an even narrower version, mobile phones
Fat Pipes Shared
http://www.classic-cable.com/howworks.html
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Skinny Pipes, Individualized
www.corbis.com
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• But now, we are converging. We are creating fat powerful pipes for individual use.
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• We are now in the midst of a historical move
• So we are changing the nature of all media, and most of all the medium what we used to call “television” and which is now increasingly just “video”
–From the kilobit stage of individualized communications –To the megabit stage, and within the reasonable future to the gigabit stage
–With full mobility –With full ubiquity
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3 Types of Telecom-TV 1. Cable-Style for Tele-TV IPTV
• Cable-TV style • Internet-style • Mobile style
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Example:Verizon FIOS Service Basically, a cable TV system over the new telecom new fiber FTTH infrastructure • Not IP • About 300 channels plus VOD • 1.5 mil subscribers in mid-2008 • Very expensive to build • Reaches consumer TV 47 screen
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2. Internet-TV • Pull Model
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Internet-TV
Wi-Fi enabled portable devices: Tablets http://abc.go.com/site/abc-player-for-ipad
• Video over broadband • Broadband service provided by telco • Often in competition against independent BB providers using telecom infrastructure, or against cable TV providers with their infrastructure • Provides real 2-way capability • IP based • VOD, ‘anytime’, individualized, • Based on internet model of user clicking to servers, which store many video programs. 49
• And this TV is joined by a wireless television to the user’s mobile phone.
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• Here, the wireless is just the tail end of a wired connection
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Netflix iPad App
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3rd Type of Telecom-TV: Mobile TV
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Japanese Commuters Watching TV
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Wired vs Wireless Speed Trends • Prices are coming down, similarly. In 2000, $1 per MB in 2000 (16 Kbps=1000 kbps per minute for about 10 cents. In Megabytes, this is about 1 MB for $1.) • In 2012, 1 GB of data wireless cost about $10, i.e., 1MB cost about 1 cent. • In 10 years, price of data down from $1 to 1 cent. • And this makes it affordable to use individualized wireless for media sue– audio and video. • (not as cheap as wireline, BTW, which is still and keeps being 100 times cheaper.) 58
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•But individualized mobile TV is still expensive
Cellular Data Prices • That’s per a standard definition film (140MB) ~1.40/film, just for transmission • Not cheap
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• The cellular mobility, however, is less important for video. • Few people watch films while moving • What is important is portability • And also continuity and simplicity.
• So mobile is used more sparingly, such as for audio applications.
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Mobile TV v. Regular TV in Korea • In Japan and Korea, the number of people who watch TV over mobile has grown enormously. At certain times of the day, in afternoon commuting time there are more people watching Tv over the mobile phone than over the regular traditional VHF broadcasting.
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• Thus, television is moving from its traditional single screen to one of three types of interconnected screens. • And all three are supplied by telecom carriers • And all three operate under different rules 65
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• For example, the traditional TV screen may not show advertisements for alcohol, but the others can • (I am using the term ‘screen’ as a metaphor) • One screen cannot show sex and violence before 9 PM, but the others can • One screen TV cannot be owned by foreigners, but the others can • One screen must have a national content quota, but the others don’t • And perhaps most importantly: one screen requires a government frequency license, and the others don’t 66
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• This will be, in terms of bits, the main thing that telecom carriers will transport– video bits. It will dwarf voice and other data • And the question is, • 1. what kind of television will this be? • 2. What will be the regulatory treatment of this TV? 67
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• On the other hand, this is good news for those who work for the regulatory authorities, or deal with these regulatory administrations. You will be more important than ever. Your jobs are secure
1st Question: What kind of TV should we expect?
•Transmission Technology is Media Destiny
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72 Source: WWW History of Telecommunications
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• When you change the underlying media technology, you change the nature of the media, of content. This is what Marshall McLuhan observed. The medium is the message. And you also change the nature of the business system of an industry. This is what Karl Marx observed.
Marshall McLuhan
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•If the medium is indeed the message, then the new type of TV distribution media will have an impact on the styles of content •I will focus on internet-TV
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•1. Widening of TV
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Widening-- More TV Options Are You Ready?
–The same, but more of it –Narrowcasting/ specialization – User-generated content
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A. Traditional Media Firms providing their content online 79
BBC Online TV
Patalong, Frank (2007). BBC to Broadcast via Youtube. Retrieved from: http://www.spiegel.de/international/0,1518,469586,00.html
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• Owned by Comcast/NBC, Fox/News Corp, Disney http://www.jeffooi.com/2007Q3/hulu.gif 81
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Netflix Online
B.Online Video Aggregators and Retailers 83
http://www.netflix.com/HowItWorks
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Netflix: Latin America
Netflix Online went International
• Problematic launch • Growth in region slower than expected than in Canada, Great Britain and Ireland http://www.afterdawn.com/news/article.cfm/2009/10/23/netflix_watch_instantly_is_going_international_in_2010
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86 http://www.usatoday.com/life/books/news/story/2011-12-14/self-published-authors-eBooks/51851058/1
Netflix: Latin America
Netflix: Latin America
• Biggest issue: the audience’s skepticism about watching TV and movies online
• The absence of competition in the industry creates the need to familiarize an audience with a brand new product
87 Ben Fritz. “Netflix faces problems in Latin America.”Los Angeles Times <http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-netflix-latin-america20120516,0,76855.story>
C. Narrowcasters: Long Tail Content
88 Ben Fritz. “Netflix faces problems in Latin America.”Los Angeles Times <http://www.latimes.com/entertainment/envelope/cotown/la-et-ct-netflix-latin-america20120516,0,76855.story>
• The widening of TV is generally understood, because it is a linear continuation of the narrowcasting of cable TV and satellite TV. • Less analyzed is the second and probably much more important impact, namely the “deepening” of TV
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• Cricvid’s business model:
• In India, a website called cricvid.com streams live cricket matches.
–Service is free-of-charge –Revenue through advertising, frequent screen-blocking, moving pop-ups that require viewer attention
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4. UGC: User Generated Content
93 http://cafe.naver.com/yoniwoongi.cafe?iframe_url=/ArticleRead.nhn%3Farticleid=6969
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User-Generated Content
http://www.adblogarabia.com/wp-content/TIMEPersonOfTheYear.jpg
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YouTube
YouTube
• In 2009, YouTube posted 1 billion videos a day • Globally, YouTube had more than 2 bil views per day in 2010, and 3 bil views per day in 2011. • Not profitable: generates $240 million in revenue in 2009 but spent $700 million in storing and serving videos
• 2005: First mainstream media clip is posted: “Lazy Sunday” of Saturday Night Live • 2007: Enters mainstream media by cohosting presidential debate with CNN • 2008: Agreements with MGM, Lions Gate Entertainment, and CBS to upload full TV episodes and movies
http://www.fastcompany.com/magazine/142/it-had-to-be-you.html
http://www.fastcompany.com/magazine/142/it‐had‐to‐be‐you.html; http://en.wikipedia.org/wiki/YouTube
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YouTube • By 2010, YouTube streamed, TV shows, anime shows, and movies • YouTube “channels” are available for companies, professional groups and artists – Allows musicians promote their songs and for companies to promote their products
http://en.wikipedia.org/wiki/YouTube
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Online Video’s Value • In 2012, the online-video market was valued at $1.8B, 50% of which went to • Hulu ($300M) • YouTube ($600M) 101 Michael Learmonth, Nat Ives. “For Many, Web Video's Actual Value Trails Its Massive Hype.” 7 May 2012. Last accessed on 18 May 2012 on <http://adage.com/article/digital/web-video-s-actual-trails-massive-hype/234587/>
• In 2011, YouTube held talks with Hollywood producers about providing seed funding for content. • YouTube will pay $2 to $5 mil for content • Big money for web standards but a little for film or TV. ($100k per episode)
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Online Video: Advertising Growth • Hulu: 39% increase in video-ad impressions vs. 2011 • ESPN sites: eightfold increase since March 2011 102 Michael Learmonth, Nat Ives. “For Many, Web Video's Actual Value Trails Its Massive Hype.” 7 May 2012. Last accessed on 18 May 2012 on <http://adage.com/article/digital/web-video-s-actual-trails-massive-hype/234587/>
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• Is this only for rich countries? • Not for long. • If you got cheap laptops and cheap connectivity, you can get internet TV.
Brazil
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Entertainment is the #2 Highest Reason Consumers Use of Internet in Brazil
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TV Content “Walled Garden” is Cracking • Consumers in Brazil are supplementing linear TV with other video
Brazil, 2010 105 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
Percentage of Broadband Users in Brazil that use Alternative Video Sources
Brazil, 2010 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS 106 G.pdf Source: Cisco IBSG Connected Life Market Watch, 2010
Many consumers watch video on their computers to time-shift and multi-task in Brazil
Brazil, 2010 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS 107 G.pdf Source: Cisco IBSG Connected Life Market Watch, 2010
http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS 108 G.pdf Source: Cisco IBSG Connected Life Market Watch, 2010
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SkyBrazil vs. Netflix
Over the top TV in Brazil
• Netflix launched in 43 Latin American countries in 2011 • Brazil’s Globosat launched video over internet service called Muu • Direct TV’s Sky Brazil launched VOD service Sky Online Prescott, Roberta “Sky Brazil looks to battle Netflix with online video service” RCR Wireless. February 15, 2012.
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• Sky Online offers around 1000 titles, half of which are different from those offered on TV
http://nextvlatam.com/index.php/1-cable-dth/sky-has-launched-its-ott-platform-in-111 brazil/
Trends to watch: TV Screen becomes new internet screen As widgets proliferate, consumers may come to recognize TV as access point to Internet
113 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
• Sky Brazil has launched an over-the-top TV service called Sky Online [1] • It is intially available only for its Pay TV clients [2] [1] http://www.rapidtvnews.com/index.php/2012021519736/sky-brazil-launches-ottstreaming-service.html 110 [2] http://nextvlatam.com/index.php/1-cable-dth/sky-has-launched-its-ott-platform-inbrazil/
Trends to Watch: Moving Internet Video to the TV • The latest TVs and consumer electronics products make it easier to watch internet video in TV 112 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
• In January 2009, Yahoo! announced distribution partners for its TV widgets. Today, more than two dozen widgets are available from Vizio, Samsung, LG, and Sony 114 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
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• Three weeks after Verizon FiOS launched updated widgets, it reported that “million” of Tweens and Facebook gallery photos had been viewed by FiOS TV subscribers on TV 115 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
3. Foster interaction with the TV programming itself (decide plot lines, vote on reality winners) 4. Create a peer recommendation engine and commentary on viewing
117 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
Trends to watch: Introduce Social Behavior into TV 4 Potential Social TV Developments Applications that…. 1. Enhance a live group experience 2. Create a “virtual” group experience, watching TV with people in other Locations 116 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
SPs are strongly positioned to deliver Internet video to consumers SPs can address consumers’ concerns, including up-front cost and quality 118 http://www.cisco.com/web/about/ac79/docs/clmw/CLMW_Video_Transitions_Brazil_IBS G.pdf
IPTV in Brazil • Brazil leads the way in desktop video watching and internet-connected TVs
Russia
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http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Communications Media Entertainment Video-Over-Internet Consumer Usage Survey.pdf
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• IPTV in Russia is on its early stage of development, as Russian population is unfamiliar with IPTV • IPTV grew high in Russia in 2011 due to aggressive marketing campaign and offering decoders for free Source: 2012, Prime-Tass, IPTV gains momentum in Russia, still far from popular, http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=All
IPTV In Russia • Service expansion: hundreds of standard and tens of HD channels, VOD library • Aggressive pricing
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• Current leaders in IPTV sector in Russia are the three major phone companies: MTS, VimpelCom, Rostelecom • Factors slowing down development of IPTV in Russia: traditional views of consumers, poor broadband coverage, high penetration rate of cable TV
•2. Deepening: –Greater “Richness” of content
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• Richness means a greater sensory impact of media • More bits/second • If we look at the history of media for centuries, it is a history of continuous decline in the price per bits delivered to the user. • So the user keeps consuming more and more bits because they become more affordable
• And the number of seconds available for media consumption does not increase by much – there are only so many hours one can spend on media • Therefore, the cheaper bits mean that more of them will be consumed per second – more bit per second • And this means richer media. • I have a whole statistical analysis and model for this. • To simplify considerably, it shows that people’s willingness to pay per media second is relatively constant. So if you reduce the bit distribution cost by 7% a year, media becomes richer by about the same, about 7% a year, in terms of bits per second.
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Source: 2012, Prime-Tass, IPTV gains momentum in Russia, still far from popular, http://global.factiva.com/hp/printsavews.aspx?pp=Print&hc=All
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Flat Screens Big Screens Greater Requirement for Sharpness of Pix
“Richer” Next Generation TV • • • • • •
Individualization Asynchronous 2K and 4K resolution 3-D projection Interactivity immersion 127
Display: 4K
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Visual Technology Element: 3-D
• LG and Toshiba will introduce first 4K TV set this year • But will take several more years to generate entire system of cameras, transmission, and content.
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Visual Technology Element: Virtual Reality
3D-TV
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Virtual Reality (cont.)
Virtual Reality (cont.)
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Virtual Reality (cont.)
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Other technology:inputs
Google’s “Project Glass” 2012
• Tactile signals
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Visual Technology Element: Interactive Games
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Avatars, “Virtual Worlds”, user participation
Visual Technology Element: Avatars and Virtual Worlds
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Games • And perhaps the most revolutionary one is immersion
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• In Gladiator, Russell Crowe’s face was digitally superimposed on others’ bodies.
• If they can use Crowe’s face, why not yours?
http://ffmedia.ign.com/filmforce/image/article/569/569303/gladiator_crowe_ tiger_1101791020-000.jpg
Epstein, Edward Jay, “The Big Picture, The New Logic of Money and Power in 143 Hollywood,” New York: E.J.E. Publications, Ltd., Inc., 2005
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Participatory Experience “Pirates of the Caribbean 2” • Put all of these elements together • This enables TV as an immersive, participatory, personalized, experience
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http://eur.i1.yimg.com/eur.yimg.com/xp/yahoo_manual/20060615/13/1898928065.jpg
Participatory Experience in “300”
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Participatory Sports
147 http://www.collider.com/uploads/imageGallery/Three_Hundred_300/300_movie_image_s.jpg
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D. Content Model: Interactive and Immersive Marketing • • • • •
Test Drive Car
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Interactive ads 3D ads Personalized ads All will be first, and explore the possibilities Next driver of use is probably adult video
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G. Content Model: News. (“You are There”)
F. Content Model: Travelogue
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• Now obviously not all of video will be like that. • Linear will be around, but will be shrinking • Immersive content will be the frontier of technical and cultural creativity • Users will use it sometimes, but they do not have to. • There will be a lot of individuapization that is automatic. 156
Education and Training Simulation
Education and Training
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Content engineering
“Content Engineering”
• Software for interactive productions, eg for games, has been mostly unique and not re=usable, so this has been very expensive to produce.
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Content Engineering • • • • • •
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“Content R&D”
Branching Semantic segmentation Content processing and semantic analysis Personalization tools Participation tools Authoring tools
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Content Engineering • Branching creates fragments of content, • ‘semantic segments’ • then get re-assembleed based on viewer choices
• Techniques of framentation arent so easy as cutting them up. The fragemnts need to be charactgerized. • And video characterization is not easy. It’s really about contant analysis of video. xxzzdlkjf
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Content engineering
particpiation
• Participation • Could be with a general story line from the creator, but with additions and variations from the user. Need to strike a balance of author and user creation • Users could be active, or totally passive, or somewhere inbetween • And of course, there will be even more noninteractive, non-participatory TV. It’s cheaper and easier to make. But the leading edge will 163 define media
• Content processing tools
• Participation might be light for a adventure film, higher for a game show
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• “Viper” too from Media Lab Europe enables tv programs to re-edit themselves through a data base about the user, to enable personalized video. • Created for advertising, first
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Dimensions of Personalization
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Viewer analysis tools
• Speeding up, slowing down. Repeating complexities • Projecting different moods, diffeent cultures, different ages, different politics, different moralities,
• Data on user and past user behavior • Privacy issues, and different countries treat this differently
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Content engineering
Screen technology
• Authoring tools
• Users can focus on some aspect of picture which gets sharper and might enlarge
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• Personalized streams • Non-linear story telling • Location-relevant story telling
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• Authoring toolkit for authors without tech background
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• Once upon a time there were old-fashioned networks
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Legacy Telecom Platform
• And with it, came oldfashioned regulation
www.corbis.com
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• But then we got digital, and we went IP.
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• And the expectation was that all this legacy stuff would shrink and wither and liberalize and become competitive and eventually disappear. • But this is not really happening 179
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Q: Why is Government Regulation not shrinking? 180
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Why governmentâ&#x20AC;&#x2122;s role in the Internet is not shrinking 1. the centrality of media and communications 2. Political activism 3. Self-interest of regulatory institutions and politics 4. Competitors and rivals 5. Fundamental economics 6. New media create new problems181
6. New Media Create New Problems or ReCreate Old Problems
Why governmentâ&#x20AC;&#x2122;s role in the Internet is not shrinking 1. the centrality of media and communications 2. Political activism 3. Self-interest of regulatory institutions and politics 4. Competitors and rivals 5. Fundamental economics 182 6. New media create new problems
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The Role of Government
Approaches for Government
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Open standards Approaches for Government • Open standards
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• Where everyone can come up with their own standrards and protocols, and the machines and the software are smart enough to work with all? • I find this highly desirable in principle. Much of progress in this field did not come from the established companies. If it were up to establishment organizations such as those fat and comfortable braodcasters, we’d still be in analog over the air tv. They now go around taking credit, but we all know better. 188
Approaches for Government • Or, where competing companies will push their technologies, form coalitions, and some will win, some will lose.
• Open standards • Wait and see?
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Wait and see • Of course it is too early for specifics • Staying out will permit a lot of innovation, but also a lot of wheel spinning, and potential domiantion from other countries or regions who just set the standards then. Like GSM, which was inferior to CDMA. Consumer uncertainty. Like with second generation DVDs. • So needs some of both: a framework, like the TCP/IP protocol, or the WWW, and openeness 191 above.
• On the other hand, some braod principles need to be set, or else facts on the ground will overwhelm. – Apple, Google, BBC, Sony, China Central TV– all will oursue their own direction and will try to make their particular organizations interest the country-wide or worldwide system – Or , some countries and regions will push thiwer own industries’ interest 192
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Approaches for Government • Open standards • Wait and see? • Broad principles of public policy
• These principoles should exist on two levels. • First, general principles of societal policy
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Policy Issue: Inclusion
Policy Issue: Inclusion
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http://www.copyblogger.com/images/grandma.jpg
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Policy Issue: Market Power and Entry
Policy Issue: Protection of Traditional Morality
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(http://www.att.com)
(http://ctc.sexzine.net/cgi-bin/ctc/ctc.cgi?63914183::46689417062573::http://www.come.to/sexzine) (http://members.xoom.com/Interleave/frame1.htm)
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Policy Issue: Child Protection Restrictions
Policy Issue: Consumer Protection
http://blog.wired.com/photos/uncategorized/2007/06/20/et_computer_kid_happy_surprised2.jpg
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Source: http://www.tvbuys.org/photos/ShamWow%203.jpg
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Policy Problem: Globalization, and Promotion of National Culture
Policy Issue: Privacy Protection
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(http://channel6000.com/news/stories/news-981004-202141.html)
3 Drivers for Globalization of Next-Gen Content
Approaches for Government
1. The price of international transmission is dropping rapidly. 2. Domestic Internet penetrations are increasing rapidly 3. E-content has economies of scale. 203
• • • •
Open standards Wait and see? Broad principles of public policy interoperability and access
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Issue: Interoperability
• But in particular, it is the issue of interoperability
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• There are numerous interoperation and coordination issues
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• [[add location based elements of mobile]] • Add seamlessness of connectivity and content
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• 3D video requires coordination– producers, filmmakers, tv networks, tv sets
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• For networks, there is a coordination of Prioritization • For the branching or immersive story line: there is a need for coordination of device, of storage, of content coding, of priority, • There is even more interoperability necessary in multi-player, multi-lateral tv
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• In the absence of clear interoperation principles, these things will emerge inside of end-to-end integrator firms. Like apple • Create certainty and confidence. • But will easily lead to end to end control, even into the production side
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Approaches for Government • • • • •
Open standards Wait and see? Broad principles of public policy interoperability and access Technical R&D
• Also, there is a technological function in support of research. Precisely because this is early, and ahs a big multiplier, it should be an area of tech research support
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Approaches for Government • • • • • •
Open standards Wait and see? Broad principles of public policy interoperability and access Technical R&D Cultural R&D
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• And similarly, there is room for ‘cultural R&d” • In past, national cultural support was much oriented to the past cultural treasures. Which was safe • Or to current issues of societal interest. Which could be controversial • But it also needs to aim for the future. Which is risky in an R&D sense of accomplishment or 216 failure.
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• Content interoperability must be matched by technological interoperability and regulatory interoperability
• So this will affect culture in very fundamnetal ways • It will affect politics • It will affect marketing • It will have more of an impact than the original narrowband TV
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• To create these new content forms and genres will take time and creativity and trial and errors • And the implication for the infrastructure providers is – to fill their pipes, they need to start helping for such content to be explored and developed. • Or else they will find themselves having created a huge and expensive ballroom, with nobody there ready to come an dance.
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Thank you! End of Talk noam@columbia.edu
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What Kind of Regulation?
H. What kind of Regulation 223
There are at least 5 Options for the Regulation of Telecom-TV • 1. Internet-Model • 2. Broadcast-Model • 3. “Layered”-Model • 4. The Press and Film Model • 5. Telecom-Model
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• But this is unlikely for two reasons • The first is that the internet community itself has turned away from the notion of deregulation 227
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1st Option is, internet-style regulation: laissez-faire. No Regulation.
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• the internet community has been moving towards a pro-regulation, pro-intervention perspective on several important issues, especially on net-neutrality.
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Source: http://www.mccullagh.org/db9/1ds-8/support-net-neutrality.jpg
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http://actlocallysf.org/blog/talkingpoints/wpcontent/uploads/Image/Free-WiFi.gif
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• Each society has its concerns, problems, issues, traditions, priorities. Americans worry about sex. Europeans worry about violence. Germans worry about racist speech. Canada worries about its national identity. China worries about party control. Italy about Berlusconi control. Brazil about Globo control. Saudi Arabia about women driving cars on TV. And everybody worries about and Bill Gates.
• The second reason why a libertarianism will not prevail in telecom TV is that it the regulation of TV is not really based on scarcity of spectrum. That was just the excuse. 231
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• The main purpose of media regulation is to advance or protect such goals. None of these objectives will vanish just because television signals travel over digital pipes rather than analog airwaves. • It is unlikely that societies will simply give up on their societal priorities just because the video information now takes a different path or is encoded in different way. • Instead, they will simply adjust the tools to the new environment. 233
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• So it is unlikely that societies will leave TV alone, whether analog, digital, or IP, or whether over the air, over cable, or over IP networks or whether there is a bottleneck or not.
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2nd Option: the Broadcast-model Approach to Telecom-TV Regulation
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• And this is the approach one can see coming from Brussels – Protection of children – Protection from hate speech – Protection of national production and national culture – Right of reply – Things like that. All aimed only at “linear” video, at longer video, at provider-edited video
Source: www.wasp-factory.com/
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• And you can see the TV-centric approach in the approach of Korea, where tv broadcaster licenses are required to become a content provider for internet tv. Except that nobody gets a license, so far. 239
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• But this, too, will be temporary approach. Extending the broadcast model to new styles of TV will not work. • It is impractical. How would one distinguish one style of TV from another? You try to write those rules. • It is unenforceable. How would one write and control these content rules? Would one have to license providers?
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• It may well be illegal. under the free speech laws of some countries, at least those of the US, one cannot simply regulate content media for broader social goals, if there is no reason such as scarcity. • It is contradictory. • It is restrictive to international flows of information. How would one prevent off-shore content providers operating under the rules of other countries?
• It is inefficient. If one wants to raise money for public service television – and there is nothing wrong with as a goal– why collect a monthly fee from the owners of every office PC or cellphone unless he can show that he already pays at home for TV? Or that the PC has no modem? Or that the PC has not broken down? It seems much easier instead to levy a tax on broadband connectivity, not on the device per month.
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• It is unnecessary. When it comes to children or racist speech, most countries already have general media laws that apply to magazines and film and whatever. And for libel and obscenity. Why isn't this enough to cover internet tv, too?
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• The only main reasons for this tvcentric approach is that it is politically easier to institute. And it has the support of the public and private broadcasters who don’t want to see their new competitors advantage. • So some of this will happen. • But the impracticalities will in time sink this TV-centric approach.
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The 3rd Option for Telecom-TV Regulation: The “layered” approach
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• The layer approach is beloved by technologists. It is technocratic and it sounds progressive. But it is really a tv-centric approach inside a lot of techno-jargon. • It talks about the ISO hierarchy and transport layers and protocol layers and presentation layers and applications layers. It wants to regulate them separately . So you would have one set of rules for layer 3 and another set of rules for layer 7. And you would be consistent about regulations within a layer horizontally. 247
• All this techno-talk tends to intimidate a lot of people who therefore tend to nod their heads and go along. • But it is really not practical either. • First, it doesn’t really answer the problem, of what kind of regulation there should be on internet tv. It just says that it would be the same for all content. So all internet video content could still be regulated according to the traditional tv rules, expanded to all video, whether linear or interactive, for-profit or user-created. 249
• So much for horizontal symmetry. And now, for the vertical separation. The problem with the layer-approach is that companies and operations cross layers all the time. The neat separation exists only in theory. And the more complex a service, the more layers it is likely to cross. • So regulations that are layer-specific would run right through firms and operations. 251
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• And we haven't even reached newspapers and other print media
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• There is a lot of history here. And it all points to the need, in such situations, for full separations if one wants to regulate different parts of the same firm and same operations in different ways. • And if history is a guide, these separations are not efficient, and usually do not last long. 252
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• The layer-approach suffers from administrative complexity. • But it is useful nevertheless if we favor a simpler, more intuitive, and less comprehensive differentiation.
Differentiate TV between: • Content • Conduit ( Infrastructure) • And have different regulatory approaches for each
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Content Regulation 255
4th option for Telecom-TV: The Film Model for TV Content • Apply General press and media law • almost no regulation of content in free countries • In addition, support of publicly valuable content through public service media institutions– old and new style--, and through film-style subsidies
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Alternative Public Online Institutions • Public funding support and public broadcast institutions are not synonymous.
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• In Britain, Ofcom, the UK regulator, floated for a while the concept of a “Public Service Publisher” (PSP)—as an option to establish a secure, strong, and plural public service system for the online future.[55]
[55] “A new approach to public service content in the digital media age.” Ofcom Office of Communications (24 January 2007). pp. 1-10.
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Social effects, too • Isolation • Group fragmentation
Infrastructure Regulation 261
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The 5th Option for Telecom-TV Regulation: The Telecom-model
• And this brings us to the 5th approach for telecom TV regulation, the telecomcentric approach. 263
www.corbis.com
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• One of the principles of regulatory enforcement is that it most efficient and easiest to regulate the least mobile and least elastic elements, such as land and physical goods. • Infrastructure cannot go away, cannot go offshore, cannot disappear. • Yet everything that reaches the user has to go over some form of infrastructure 265
• A second principle is that it easier to regulate the element with the fewest providers. It’s easier to enforce. • And the number of infrastructure providers is small because of the existence of economies of scale on the supply side and of network effects on the demand side
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Factors Leading to Infrastructure as the Nexus for TV Regulation • 1. Least mobile • 2. Fewest participants
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Factors Leading to Infrastructure as the Nexus for TV Regulation • 1. Least mobile
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• And these economies of scale are actually growing with fiber netowks and more advanced mobile networks, where the fixed upfront investment is higher and the marinal cost of use is low 268
• The third reason is related, that the small number of infrastructure providers means that they have market power, and that this market power needs to be dealt with. 270
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Factors Leading to Infrastructure as the Nexus for TV Regulation • 1. Least mobile • 2. Fewest participants • 3. Market power
• The example now is net-neutrality. • Which would establish common carrier access obligations on telecom carriers and cable companies
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Factors Leading to Infrastructure as the Nexus for TV Regulation • • • •
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Legacy Regulation or Sophisticated Instrument?
1. Least mobile 2. Fewest participants 3. Market power 4. Existing sophisticated regulatory instruments
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• Take the concept of forward looking incremental cost pricing for unbundled network elements. LIRIC. • Neither aviation, pharmacological drugs, environmental controls, or rail transportation, nor electric utilities have anything that comes close in terms of economic sophistication and institutional complexity. • This is not to say that it is a “better’ regulation, just a more complicated one, dealing with numerous factors, and conducted on an economic level of significant theoretical expertise. 275
www.corbis.com
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• Fifth, by regulating the infrastructure one can indirectly reach the edge and its applications. • Make the infrastructure provider the enforcer of more general media policy goals, such as – Protector of Privacy and security – Protector from spam – Blocking provider for harmful content – Geo-Blocking of some foreign content – Blocking of certain advertising – Etc etc. After all, everything travels over the infrastructure
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Factors Leading to Infrastructure as the Nexus for TV Regulation • • • •
1. Least mobile 2. Fewest participants 3. Market power 4. Existing sophisticated regulatory instruments • 5. Enforcer of content restrictions 277
Factors Leading to Infrastructure as the Nexus for TV Regulation • • • •
1. Least mobile 2. Fewest participants 3. Market power 4. Existing sophisticated regulatory tools • 5. Enforcer of content restrictions • 6. Effective revenue source
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• Sixth, the infrastructure provider also becomes, in effect, the tax collector • It provides the source of revenues for societal goals such as program production, digital divide issues, etc. • And it’s on efficient tax collection device. It’s hard to avoid or evade. • And so, it is totally predictable that the providers of the BB infrastructure will be taxed on their revenues in order to provide the money for societal content 278
• Seventh, Infrastructure providers can also be reached to provide “in-kind” services, especially to achieve diversity and pluralism –Allocate capacity for societally favored purposes, such as public access, or disadvantaged social groups
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Factors Leading to Infrastructure as the Nexus for TV Regulation • • • • • • •
1. Least mobile 2. Fewest participants 3. Market power 4. Existing sophisticated regulatory tools 5. Enforcer of content restrictions 6. Effective revenue source 7. Source of In-kind contributions 281
• Eighth, the internet provides a tool for customization of everything, including the customization of regulation. • Internet regulation actually becomes a more powerful regulatory tool.
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Factors Leading to Infrastructure as the Nexus for TV Regulation • • • • • • • •
1. Least mobile 2. Fewest participants 3. Market power 4. Existing sophisticated regulatory tools 5. Enforcer of content restrictions 6. Effective revenue source 7. Source of In-kind contributions 8. Customization of regulation
• These reasons, in combination, create powerful forces in the direction of a regulation of internet TV through the network core, much more than through the content and applications providers
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• Thus, over time the political system will increasingly use the infrastructure providers as, in effect, the tax collector for societal information policy goals such as content production, digital divide issues, etc.
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• This will be an unwelcome message to the infrastructure companies, but it seems likely.
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• People will consume vastly more bits • People will consume vastly more bits per second– a richer content
IV. Conclusions 287
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• • Television services will become, by far, the biggest business for telecom firms • Telecom firms must encourage new styles of content creation in parallel to creating new style of infrastructure 289
The regulatory treatment for television over the three screens must be harmonized
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• But for the telecom infrastructure providers, things will be much more difficult.
The rules for television content will be essentially those of film: free in content, and with some public funding. 291
• Infrastructure providers will become – More regulated in their structure – More regulated in their access requirement – With mandates to police the media and etransaction environment – With mandates to protect various national policies – A required provider for money-losing rural broadband infrastructure – A major funding source for public service content 293
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• At the end of this process, television-specific content regulation would have largely disappeared in content, while that of telecom will not only endure but will be considerably strengthened. 294
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• I reach the conclusion with some concern • But the conclusion is that telecom regulation will be the new way societies will try to control new style television
• Telecom companies will become a combination of network provider, content provider, designated policeman, and cash cow. 295
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Better Than Reality? • And if you think that telecom regulation is political and difficult, you have seen nothing yet. • Just wait till television regulation is applied to telecom.
• In the past, media experience was inferior to “real life” in terms of its sensory “richness” • But this will change
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Mass Media Sensory Richness “Better Than Reality” in 15 years 299
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There will be predictable problems, plus a lot of unpredictable ones
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Impact of Medium on on Content
Impact on Style The cheaper bits are, the more visual the medium becomes. And the cheaper the visual aspects, the more they dominate In contrast, expensive bits favor compressed information like text, novels, poetry. 303
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• Before photography and film, the major medium was print. The print medium was expensive in distribution and was parsimonious in the use of bits. It generated extraordinarily subtle works– novels, poems, with each bit having a lot of content.
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Impact on Style • Visual images require a huge number of bits. The cheaper bits are, the more visual the medium becomes. And the cheaper the visual aspects, the more they dominate • Weaker visual capability favor story line, character development, dialogue.
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• Higher quality film, in comparison to lower TV quality and budget, favored –Action –Spectacles –Sex and violence –Science Fiction –Special effects
Action
http://z.about.com/d/movies/1/0/F/7/P/livefreeordiehardpic6.jpg
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Spectacles
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(http://www.lostcitydemille.com/)
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Science Fiction Themes of Sex & Violence
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Big Screen
Special Effects
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Cinemascope
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3-D
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• Europeans had no budget for visually fancy technology, so they shot black and white films with lots of dialogue and character and issues, and less of action and special effects. • Intellectually interesting, visually boring. • Like a book on screen
Jules & Jim
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“Die Hard”
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http://z.about.com/d/movies/1/0/F/7
“Mission Impossible 3”
http://www.ilmfan.com/articles/2006/todd_vaziri_mission_impossible_3/ima ges/mission_impossible_3.04.jpg
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