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SBC: 'Let Us Entertain You!'

SBC Communications Inc. (NYSE: SBC) announced a joint venture on Monday with 2Wire Inc. as it launched a home entertainment service to DSL and satellite customers.

The joint venture is called SBC Media Solutions LLC, and its new CEO will be Ed Cholerton, the VP of DSL for SBC. Brian Hinman, 2Wire's president and CEO, will assume the role of president of the new venture, which exists to develop and market the MediaPortal set-top box.

The new SBC Home Entertainment Service (HES), expected to be rolled out in SBC’s territories by mid-year, will integrate satellite TV programming, video on demand (VOD), music on demand, digital video recording (DVR), caller ID, and digital photo sharing through 2Wire’s MediaPortal set-top box. The MediaPortal box is a satellite and digital TV receiver, a digital video recorder, and a PC-type device that allows Web surfing, emailing, and CD/DVD burning.

A future enhancement to the MediaPortal box will include remote access through Cingular Wireless phones. That feature allows a consumer to listen to music and view photos stored on his MediaPortal devices (or his home network) from a cell phone (or any Web-connected device).

SBC, which already offers satellite TV service through a partnership with EchoStar Communications Corp., sees the new service and joint venture as a way to improve the customer experience by tying together the TV and the PC through the DSL connection. “We’re always looking at ways to make our service even better,” says SBC spokesman Michael Coe.

Coe says that a content partner for the VOD service has not been announced yet.

"For this type of integrated [entertainment] service, there’s lots of moving parts and everything needs to work together -- Echostar, Yahoo, DSL -- and that’s not our core competency, and we wanted to make sure the end user experience is good,” Coe says. The new home entertainment service is the first step in SBC’s plans to offer users access to IPTV services over an advanced fiber network (see SBC Sheds Light on 'Lightspeed').

The ultimate goal for SBC -- and its cable competitors -- is to get as much of each customer's entertainment and communications budget that it can. That's what's causing the carrier to partner with consumer electronics vendors, online content providers, and other companies that push it further out of the world of being just a phone company. It also has led them to tease future features such as SBC Unified Communications, a service that combines all of a customer's wireline and wireless voice mail, email, and faxes into one mailbox.

Coe says pricing for the complete entertainment package, including SBC Yahoo DSL, SBC|DISH satellite TV service, SBC phone service and the 2Wire set-top with DVR has not been determined, but “just like all our services, the more you buy, the more you save.”

— Chris Somerville, Senior Editor, Next-Generation Services

alchemy 12/5/2012 | 3:30:51 AM
re: SBC: 'Let Us Entertain You!' jim_smith writes:
I think Prof. Odlyzko's article was in the context of the Internet. If we are talking about web surfing, then I agree, content owners are not king, connectivity is. That's why ISPs that have a large customer base are so powerful.

If those web sites you surf to had no content, you wouldn't surf there. If you flip to a TV channel and it's displaying a test pattern, you don't watch that channel.

All that programming content is aired on a fee basis. If the RBOCs offer the Golf Channel or E!. Comcast gets money. It ain't like the web and an RBOC would get sued for offering copyrighted programming without payin the appropriate royalties.
rjmcmahon 12/5/2012 | 3:30:57 AM
re: SBC: 'Let Us Entertain You!' Consider how much of the programming content is owned or partly owned by the MSOs. Time-Warner has huge holdings. The Discovery Channel is owned by Liberty, Cox, and Advanced Newhouse. Comcast owns E! and the Golf channel. It's no surprise that Comcast tried to buy Disney last year to add to their porfolio.

The RBOCs seem to be positioning themselves to offer a dumb pipe that mostly offers content owned by the MSOs. Which position would you rather be in?


The following gives one answer to your question.

http://en.wikipedia.org/wiki/C...

Content is Not King
From Wikipedia, the free encyclopedia.

Content is Not King is a paper by Andrew Odlyzko in which he argues that:

o The entertainment industry is a small industry compared with other industries, notably the telecommunications industry
o People are more interested in communication than entertainment
o And therefore that entertainment "content" is not the killer app for the Internet
jim_smith 12/5/2012 | 3:30:57 AM
re: SBC: 'Let Us Entertain You!' ... Content is Not King ... Andrew Odlyzko ...

We have been down this road before, with Prof. Odlyzko himself contributing to the discussion. I don't remember the title of the thread, but I came away convinced that content is not only the king, but it is also the emperor, master, and overlord.

I think Prof. Odlyzko's article was in the context of the Internet. If we are talking about web surfing, then I agree, content owners are not king, connectivity is. That's why ISPs that have a large customer base are so powerful.

But, as far as video content is concerned, content providers are totally in charge. That's why cable cos. that have the best programming are so powerful.

Also, creating a web page that is worth visiting is much cheaper than creating a video that is worth watching. So, even if everyone is connected via fiber, I don't think the content providers are going to lose their power.

Here's my prediction: 99% of the non-media-conglomerate video traffic will be amateur porn.
alchemy 12/5/2012 | 3:30:58 AM
re: SBC: 'Let Us Entertain You!' eltooguru writes:
Anyone who tinks the "cable cos" are brilliant strategists who are set to disembowel the RBOCs knows nothing about the cable tv business.

Consider how much of the programming content is owned or partly owned by the MSOs. Time-Warner has huge holdings. The Discovery Channel is owned by Liberty, Cox, and Advanced Newhouse. Comcast owns E! and the Golf channel. It's no surprise that Comcast tried to buy Disney last year to add to their porfolio.

The RBOCs seem to be positioning themselves to offer a dumb pipe that mostly offers content owned by the MSOs. Which position would you rather be in?
keelhaul42 12/5/2012 | 3:31:01 AM
re: SBC: 'Let Us Entertain You!' Anyone who tinks the "cable cos" are brilliant strategists who are set to disembowel the RBOCs knows nothing about the cable tv business.

Also, the 2Wire device SBC will sell supports satellite and IP/Ethernet. As SBC deploys fiber, they have CPE in-place to manage the transition to their lines, and growing revenue.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I wouldn't characterize the cable companies as brilliant. Their services are far from perfect.
I would characterize them as having identified a market and invested the capital to serve that market. Thanks to them many of us now have broadband internet access. (and more ...)

This is not something I can say about the RBOC's. Words like inept come to mind when I think about their attempts to establish DSL services at several different locations where I wanted broadband internet access. I say "attempts" because they never succeeded - and not solely because of physical transmission problems.

If this is the crew you are counting on to provide reliable and robust broadband IP services I am here to tell you that you are going to be disappointed.
Their mindset for years was to cash in on their residential voice services and to do a half-hearted job of anything else.

Now they must compete in a market that could have been theirs to begin with but they lacked the vision to pursue it. Their brilliant strategists spent buckets of capital to offer long distance voice services in the last few years. Tell me the ROI on that what with LD prices in free fall. They have to be the only people on planet Earth who couldn't see that coming.

You should wish them luck. They will need it because they have never developed a competency in the very services they must now offer to survive.
Simply stated, the cable companies aren't going to disembowel the RBOC's. The RBOC's will do it to themselves.

-kh
eltooguru 12/5/2012 | 3:31:03 AM
re: SBC: 'Let Us Entertain You!' Anyone who tinks the "cable cos" are brilliant strategists who are set to disembowel the RBOCs knows nothing about the cable tv business.

Also, the 2Wire device SBC will sell supports satellite and IP/Ethernet. As SBC deploys fiber, they have CPE in-place to manage the transition to their lines, and growing revenue.

keelhaul42 12/5/2012 | 3:31:06 AM
re: SBC: 'Let Us Entertain You!' Jim_Smith:
I don't know how much you have interacted with RBOC engineering, but they despise the whole "IP world." At least the old guard. Things are changing though. Unfortunately, it might be too late now.
>>>>>>>>>>>>>>>
Some, and I agree: they despise the IP world.
They also despise it because it's upsetting their neatly planned & regulated existence. They're shocked - shocked! - that they actually have to compete for my business.
When I first entered the telecom world some years ago all the talk was about the last mile (or first mile if you prefer). More than a decade later it was still all about the last mile. I was amazed at how little had been accomplished and at the endless list of reasons for doing nothing. (Or very little as in the half baked DSL rollouts.)

Now the cable companies are delivering broadband IP services and the RBOC's are finally starting what they said they couldn't do for years.
Too little, too late? Could be. At this point the only use I have for them is to keep my cable provider honest.

-kh
jim_smith 12/5/2012 | 3:31:07 AM
re: SBC: 'Let Us Entertain You!' ... or maybe you're referring to the RBOC's stubbornly clinging to their TDM/voice services?

That's basically what I was refering to, and the attitude that the cable cos. will take a long time to become a serious threat because this IP crap is never going to fly, etc.

I don't know how much you have interacted with RBOC engineering, but they despise the whole "IP world." At least the old guard. Things are changing though. Unfortunately, it might be too late now.
New York 12/5/2012 | 3:31:10 AM
re: SBC: 'Let Us Entertain You!' This is an amazing example of how inept the Bells are when it comes to anything that deviates from running their monopolies.
Without full blown FTTH, the Bells really appear to be in trouble, and this appears to be a good indication that FTTH is simply not feasible in the short-term (or another indication that the Bells just dont get it).
SoftBank appears to be the most innovative service provider on the planet...
lastmile 12/5/2012 | 3:31:11 AM
re: SBC: 'Let Us Entertain You!' The offering will be available to customers who have both SBC | DISH Network and SBC Yahoo! DSL services.
That's a lot of entertainment indeed. I need SBC DSL with yahoo and a dish and a dedicated phone line for all the entertainment.
BobbyMax where are you?
jim_smith 12/5/2012 | 3:31:11 AM
re: SBC: 'Let Us Entertain You!' SBC seems to be desperately playing catchup to the cable cos. Which means SBC has accepted defeat.

Finally an end - a bloody end, to be precise - is in sight for these RBOC dinosaurs.
gtchavan 12/5/2012 | 3:31:11 AM
re: SBC: 'Let Us Entertain You!' How many hints does SBC has to give out for it to be obvious to the news media that they have made a trust with Echostar about the satellite offering of broadband on their turf.

Lets me connect the dots for the discering media folks:

1) SBC sells satellite dishes that can compete in their broadband service
2) satellite broadband is terribly expensive in areas that SBC covers dispite the sheer volume of users who have sattelite dishes
3) satellite does not even advertise broadband in areas that SBC offers broadband
4) satellite used to advertise broadband in areas that SBC offers broadband before SBC started selling Dishnetwork's satellite TV.

Can someone confirm that Echostar and SBC are still separate companies? I have been out of the country for a while.
stawdema 12/5/2012 | 3:31:11 AM
re: SBC: 'Let Us Entertain You!' Just reading these announcements is entertainment enough :)

Why would I just not head off to my cable company and get all these from them. I can just imagine my plight when dealing with services coming jointly from SBC, Yahoo, Echostar, Cingular, 2 Wire and God knows who else...


keelhaul42 12/5/2012 | 3:31:11 AM
re: SBC: 'Let Us Entertain You!' I'm not sure of your reasoning about accepting defeat - or maybe you're referring to the RBOC's stubbornly clinging to their TDM/voice services?

Irrespective I agree the RBOC's may indeed be meeting their corporate Waterloo -- and it couldn't happen to a more deserving bunch.
If you can imagine a corporate graveyard it has to be littered with companies that had very good ideas/products for transitioning to the future of broadband services but died waiting for the RBOC's to do something in that direction.

-kh
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