July 14, 2014
Volume XLVIII, Issue 11
Join Thought Leaders at CLOUD DEVELOPERS SUMMIT & EXPO 2014
The all new CLOUD DEVELOPERS SUMMIT & EXPO 2014 (CDSE:2014), jointly presented by the DCIA and CCA on Wednesday October 1st and Thursday October 2nd in Austin, TX, will provide fresh and exciting perspectives on the rapidly accelerating advancement of cloud computing.
Numerous hands-on instructional workshops and special seminars will take place side-by-side with a business strategy conference along with an interactive exhibit hall featuring the latest cloud solutions demos.
If you're a cloud solutions provider and would like to speak at this major event, please contact DCIA CEO Marty Lafferty at your earliest convenience.
The debut of Tim Hayden's forthcoming book The Mobile Commerce Revolution will lead-off the discussions at CDSE:2014.
With more than 20 years of marketing and business leadership experience, Tim Hayden has been a founding member of new ventures (such as NION Interactive, GamePlan, and 44Doors) and been a catalyst for innovative change in some of the world's largest brands (AMD, Bacardi, Dell, Edelman, ExxonMobil, Hilton Worldwide, Kraft Foods, and others). Part social anthropologist, part strategic marketing executive, Tim studies communications behavior and how new media and mobility are reshaping all of business.
This will be followed by a fascinating presentation on how Sense Corp., a customer of OutSystems, is leveraging cloud-solutions for the College Bound initiative.
Wes Carberry, Partner and General Manager of Technology at Sense Corp., has strongly contributed to the growth of the company for fourteen years. Wes has developed an unparalleled level of expertise across IT strategy and implementation. He has more than 50 success stories with clients that range from startups to the largest companies in the world. He understands the breadth and depth of technology, and communicates so well that he's the guy who gets picked first for the board room.
OnRamp represents another example of the kind of innovative and insightful thought leadership that will be represented at CDSE:2014.
OnRamp's Founder Chad Kissinger will discuss "HIPAA in the Cloud: How to Collaborate with Cloud Providers."
Chad Kissinger is a Texas Internet pioneer. In 1994, Chad founded OnRamp as one of Texas' first Internet operations companies that provided enterprises the ability to connect to and effectively utilize the Internet. Over the years, OnRamp has grown into a leading data center operations company that delivers a full suite of services designed to help its customers effectively maintain the confidentiality, availability, and integrity of their information technology (IT) operations without the cost or effort of building and maintaining data center and IT infrastructure.
Healthcare businesses are rapidly adopting new cloud technologies to more effectively address their business' data requirements, but are finding that the flexibility delivered by these technologies often obscures the traditional boundaries used to secure sensitive information. This discussion will cover how cloud developers in the healthcare and supporting industries can effectively use cloud computing while maintaining HIPAA compliance.
John Thurik, On Ramp's Chief Architect, will address "The Agility of the Private Cloud."
John Thurik is a distinguished IT architect with extensive experience in hosting, security, network, and storage architecture. He has accomplished success with analysis, design, implementation, and troubleshooting of complex technology solutions. John is a results oriented individual with proven abilities to implement standards, procedures, and processes that improve performance and meet compliance requirements.
Virtualization brings benefits in efficiency and economics, but trusting your sensitive company data to a public cloud may itself bring a cloud of uncertainty. While cloud computing does offer redundancy and mobility, you may not feel the risk is worth it. Private clouds, however, offer all the flexibility and scalability benefits of a traditional cloud hosted environment with one exception, they are housed on dedicated equipment. This discussion will focus on the many advantages of a private cloud environment when the privacy and security of your data and systems is critical.
Cloud logistics customers, big data users, and mobile cloud clients as well as leading representatives of end-users in these three key verticals: media and entertainment, healthcare and life sciences, and government and military, will all present case studies at CDSE:2014.
Report from CEO Marty Lafferty
 Reuters reported this week that Aereo, the subscription service which retransmitted local television stations via digital streaming over the Internet to viewers, but lost a US Supreme Court (SCOTUS) Case for violating copyright law, has made a new filing with District Judge Alison Nathan, stating in part:
"Although Aereo has temporarily suspended operations, Aereo believes that it can still operate in accordance with the terms of the Supreme Court's decision and intends to do so."
Based on SCOTUS' characterization of Aereo as "substantially similar to a cable system," the company now argues that it should be eligible to negotiate for the carriage of TV signals.
"If Aereo is a 'cable system' as that term is defined in the Copyright Act, it is eligible for a statutory license, and its transmissions may not be enjoined preliminarily or otherwise," Bruce Keller of Debevoise & Plimpton wrote in the joint letter with the plaintiffs.
Aereo reports that it will file the necessary statements of account and pay royalty fees, based on the Copyright Act, Title 17, Section 111.
Not surprisingly, the plaintiff broadcasters do not intend to accept this approach.
"Aereo never before pled much less litigated Section 111 as an affirmative defense. Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court's decision automatically transformed Aereo into a 'cable system' under Section 111 given its prior statements to this Court and the Supreme Court," Keller's letter also states.
And indeed, retransmission of TV station signals under Section 111 is "permissible under the rules, regulations, or authorizations of the Federal Communications Commission (FCC)," provided that, in accordance with its Code 47 of Federal Regulations Section 76.64(a), "no multichannel video programming distributor (MVPD) shall retransmit the signal of any commercial broadcasting station without the express authority of the originating station."
If history serves as a guide, Aereo will not be granted "express authority" by broadcasters; the legal dispute has been too bitter for that.
And Aereo's copyright infringement up to this point in the thirteen markets it served carries potential damages awards to broadcasters that could be ruinous to the company.
Aereo, however, further argues:
"If the Court finds Section 111 inapplicable and determines that it should enter a preliminary injunction, that injunction must be limited to the conduct the Supreme Court carved out from Cablevision's general rule: the simultaneous or near-simultaneous streaming of over-the-air television programs."
"The Supreme Court opinion did nothing to prohibit — and indeed reaffirms the vitality of — non-simultaneous playback from copies created by consumers."
But again, this ignores the needs to obtain express authority and to pay restitution.
While it's extremely unlikely that Aereo itself will overcome such seemingly insurmountable obstacles to survival, the DCIA sees the potential for progress for the technology sector, the broadcast television industry, and consumers based on this pioneering effort.
There's no question that, from a tech perspective, Internet protocol television (IPTV), cloud-based storage, digital streaming technologies, and related solutions now make it possible for every television station to securely retransmit its signal real-time in high quality over the Internet, to charge license fees for reception and playback, and to provide time-shifted cloud DVR functionality.
It also seems clear that TV broadcasters now rely on subscription royalties to supplement their advertising revenue: the vast majority of their carriage is via MVPDs, which pay such fees, and not by means of free over-the-air delivery; and non-broadcast TV programmers carried by MVPDs, which compete with TV stations for viewership, enjoy such a dual revenue stream.
And finally, consumers increasingly demand greater flexibility in viewing options, seeking to watch what they want, when they want, on the devices they want; and express frustration over the large bundled linear channel line-ups offered by incumbent MVPDs — as manifest in the cord-cutting trend now growing among younger viewers especially.
As a straw-man proposal, we ask, would there be a market for an IPTV service priced in the $15-to-$20 per month range that would offer viewers six-to-ten live major network affiliate and independent local TV stations in HD with cloud DVR?
Such a service would generate $5-to-$10 to the aggregator/provider and $1-to-$2 per viewer per month to each local television station.
This new service would showcase underlying technologies, help drive their adoption, reposition traditional broadcasters in the forefront of technological advancement, and provide consumers with an option they are very vocally seeking.
The addition of distant broadcast signals from other markets and non-broadcast television programmers over time on an a la carte basis for additional fees could enhance this package.
If this proposal seems deja vu, there's a reason for that.
In the late seventies and early eighties, cable TV operators offered customers a sub-basic "lifeline" service of local broadcast stations only.
But that was in an era when viewing options did not yet include Netflix, Hulu, Amazon Prime, YouTube, and more coming online every week.
More than anything, Aereo suggests it could be time to recycle and rebuild. Share wisely, and take care.
Connected TVs Surpass 1 Billion Globally
Excerpted from TechCrunch Report by Darrell Etherington
A new report from Strategy Analytics puts the global market for connected TV devices at over 1 billion currently installed units, which include smart TVs, set-top boxes (STBs) like the Apple TV, game consoles, connected Blu-ray players, and more. The market is predicted to double in size between now and 2018, reaching the 2 billion mark, with smart TVs carrying embedded platforms as the main segment to watch.
STBs are the other type of device poised to lead the growth, and Google has announced that its new project Android TV will be a platform available to both categories. Android TV is Google's second stab at the connected TV device market, after it first tried the waters with Google TV beginning a few years ago. That effort met with tepid response from consumers, but Android TV is a complete rethink of its connected media device strategy.
The new platform puts an emphasis on content first, highlighting stuff you're likely to watch from various sources installed on your platform. Apps take second stage, and games round out the content-delivery package. But what Android TV has going for it above all other competing solutions is the simplicity of the interface, and the similarity it has to the relatively mindless experience of idly browsing TV to watch via traditional cable and satellite delivery methods.
From the Strategy Analytics report, we learn that Apple TV is the current leader of the market, with around 35 percent of the 2013 share of devices. Google and Roku each had shares in the teens, with the research firm predicting a surge by Google because of the success of the Chromecast, and opportunities presented by the Android TV boxes coming up from Razer and Asus this fall. Pricing and availability will determine how much influence those have, however.
In the end, Google has learned a lot from Google TV and Chromecast, and Android TV clearly has input from both experiences. To capitalize on the growth coming up in the next few years, it'll have to make sure Android TV comes in at the price point and with the convenience factor (i.e., preinstalled on a variety of new devices) that consumers appreciate with the company's increasingly powerful streaming stick.
Aereo: Round 2
Excerpted from GigaOM Report by Paul Sweeting
It turns out Aereo has a Plan B after all. Two weeks after losing at the Supreme Court, which found that Aereo infringed broadcasters' copyrights by retransmitting their signals without permission, the startup is back in court with a brand new legal theory for why it should be allowed to continue to operate. If it prevails, the implications could be nearly as far-reaching as if Aereo had won in the Supreme Court.
Last month's Supreme Court ruling concerned the lower court's denial of a preliminary injunction against Aereo. The court ruled that the broadcasters were entitled to an injunction based on Aereo's ongoing infringement but it didn't resolve the underlying litigation. Instead, the case was remanded to the district court to sort out how to proceed.
In a letter to the district court this week, Aereo raised a new argument it said was based on the Supreme Court's holding. Since the court said it was just like a cable TV system, Aereo argued, that must mean it is entitled to the compulsory license that allows cable systems to retransmit copyrighted programming without securing individual licenses by paying a statutory fee to the US Copyright Office:
The Supreme Court has now ruled that "having considered the details of Aereo's practices, we find them highly similar to those of the CATV systems in Fortnightly and Teleprompter. And those are activities that the 1976 amendments sought to bring within the scope of the Copyright Act…. Accordingly, Aereo is entitled to a compulsory license under the Copyright Act, 17 USC S 111. And because Aereo is entitled to a license under Section 111, the transmissions Plaintiffs have sought to enjoin do not infringe Plaintiffs' rights under the Copyright Act.
It's an audacious as well as very subtle legal argument. It's audacious because Aereo had not previously invoked Section 111 of the Copyright Act, which applies specifically to cable systems, in its defense. In fact, it expressly rejected a Section 111 defense, in the district court and at oral arguments at the Supreme Court, because that section concerns retransmission by cable operators and Aereo was arguing that it was its users, not Aereo, that were doing the transmitting. To raise it at this late stage in the game is certainly unorthodox and perhaps even "astonishing," as the broadcasters called it in their own letter to the district court.
It's also debatable whether, as a legal matter, the Supreme Court really held that Aereo qualifies as a cable TV service. The majority opinion never actually said that in so many words — only that Aereo looks like and acts like a cable system — and it's not clear the court could make such a determination unilaterally in any case.
Aereo's argument is quite subtle, however, in that it attempts to thread the needle between two distinct legal authorities concerning the definition of a cable system.
Both the Copyright Act and the Communications Act (as amended by the Cable Act) define what they mean by a "cable TV system." The definitions do not quite align, however, because the two laws address different aspects of what a cable system does.
The Copyright Act governs the programming contained in TV broadcasts, and Section 111 of the Act establishes a compulsory license for that programming available to cable operators. The compulsory license was created because any given TV channel generally includes programming from many different copyright holders, and forcing cable operators to negotiate separately for the right to retransmit each particular show would be prohibitively expense and logistically difficult. Instead, operators that qualify as "cable TV systems" as defined by the Act can invoke the compulsory license and pay a nominal royalty to the Copyright Office, which disperses the fees to the copyright owners.
The Communications Act governs the actual signals sent out by broadcasters, irrespective of the programming contained in them, and establishes rules for their retransmission. The most salient of those rules, which are overseen by the FCC, are "must-carry" and "retransmission content," under which cable operators and other multichannel video program distributors (MVPDs) are generally required to pay broadcasters to retransmit their signals.
With its new legal strategy, Aereo appears to be gambling that it can qualify for the compulsory license under the Copyright Act by paying the nominal royalties, while avoiding being subject to the must-carry and retransmission consent rules in the Communications Act, which would come at a much steeper price and likely make Aereo's business model economically non-viable.
Could it work? The US Copyright Office, which administers Section 111, has held in the past that online video providers are not cable TV systems for the purposes of the Copyright Act, and therefore do not qualify for the compulsory license. The case that put the question most directly involved ivi, a Seattle based startup that retransmitted broadcast TV signals over the Internet to paying subscribers. In that case, the US Second Circuit Court of Appeals adopted the Copyright Office's reasoning in ruling that ivi was not a cable TV system and therefore did not qualify for the compulsory license and was, in fact, infringing broadcasters' copyrights. Ivi appealed to the Supreme Court by but court let the Second Circuit's ruling stand.
As attorney Gus Hurwitz points out in avery useful explainer on the American Enterprise Institute's blog, however, ivi operated nationally and piped distant signals into local markets, whereas the Section 111 compulsory license concerns only the local retransmission of local broadcast signals. Aereo, on the other hand, uses geo-location to restrict its retransmissions to only those markets capable a receiving a particular over-the-air broadcast signal, so it might be able to differentiate itself from Aereo.
In its letter to the district court, in fact, Aereo insists the Supreme Court actually overruled ivi, ) "to the extent it might apply to Aereo." We'll see.
The more interesting issue concerns the applicability of the Communications Act to Aereo. Unlike the Copyright Office, the FCC has never formally ruled on whether online video services qualify as MVPDs, a category that includes cable systems, satellite services and telco TV systems, although it has been asked.
The case the put the question most squarely concerns Sky Angel, a Christian IPTV service that offered a package of family friendly of channels over the Internet. In 2010 it reached an impasse in negotiations with Discovery over carriage of several Discovery-owned networks and Sky Angel filed a program access complaint with the FCC. The IPTV service claimed Discovery was violating FCC regulations that generally require networks to make their programming available to all MVPDs on fair and reasonable terms.
In response, the FCC opened a proceeding in 2012 asking for input on whether an online service such as Sky Angel could qualify as a MVPD under the Communications Act. As can be seen in the FCC's Notice of Inquiry in the matter, however, the question is anything but straightforward. It raises a host of other, complicated questions involving the definition of a "channel" and of "video programming" that, depending on how it came out could have a major impact on traditional cable and satellite services. Two years on, the FCC is yet to issue a ruling in the matter, although the proceeding officially remains open.
Aereo seems to be betting that it can get a resolution on the Section 111 question by raising it in court, giving it access to the compulsory license, while the FCC delays indefinitely a ruling on whether to apply must-carry and retransmission consent rules to online service providers.
If Aereo manages to square that circle (still a major "if" since the court is not obliged to let it litigate an entirely new legal argument at this point) the broadcasters could find themselves in a position as bad as if they had lost in the Supreme Court. Aereo — and what would likely be a stampede of imitators — could legally retransmit their shows for a nominal fee without being subject to retransmission consent rules.
If, on the other hand, Aereo's new strategy were somehow to force the FCC's hand, leading to a ruling that online services can qualify as MVPDs, it would hold huge implications for incumbent cable and satellite providers. Over-the-top competitors would gain the benefit of program access rules, allowing them to offer a comparable bundle of channels without the huge capital costs associated with maintaining a cable or satellite system.
Say this for Aereo: It's determined to disrupt something, even if it has to change its entire strategy to do it.
Texas Cable Operator Fined $2.25 Million for Retrans Violation
Excerpted from TV Technology Report by Deborah McAdams
A Texas cable operator has been fined $2.25 million for violating retransmission consent rules. The Federal Communications Commission issued the Forfeiture Order (FO) this week to TV Max of Houston for "willfully and repeatedly" violating Section 325 of the Communications Act "by retransmitting the signals of six Houston, TX area full-power commercial television broadcast stations without 'the express authority' of the originating stations."
The six stations involved include ABC affiliate KTRK-TV, NBC affiliate KPRC-TV, MyNetwork affiliate KTXH-TV and Fox O&O KRIV-TV in Houston; Univision affiliate KXLN-DT in Rosenberg, Texas; and UniMas affiliate KFTH-DT in Alvin.
TV Max serves around 10,000 subscribers in 245 apartment buildings the Houston designated market area. TV Max had retrans deals in place with the stations that expired between the end of 2011 and March, 2012, according to the order, "after which TV Max continued to retransmit the signals of the stations without extending or renewing the agreements. Each of the licensees notified TV Max that such retransmission without its consent was illegal and demanded that it cease and, after TV Max ignored these demands and continued retransmitting the Stations, each filed a complaint with the commission."
The commission notified TV Max it was in violation of retrans law via a letter sent in December of 2012. "Nevertheless, TV Max continued its rebroadcast of the Stations, using the spin-off of its Houston cable operations and fiber network to two related companies under its common ownership and control in an apparent effort to evade responsibility for its unlawful actions, which continued," the order states. The commission then sent TV Max a Notice of Apparent Liability—essentially a notification that the FCC would level a fine unless TV Max ceased retransmitting the stations and explained itself sufficiently.
The NAL in the amount of $2.25 million was issued in June of 2013. TV Max didn't deny that it was retransmitting stations without a license, but said that it was doing so under the FCC's master antenna television exception. It had, however, been retransmitting from its headend before installing master antennas at the apartment buildings it served.
TV Max said it had "hoped to complete the installations before the first of the retransmission consent agreements expired on Dec. 31, 2011," but fewer than half of its half of its 245 buildings had been outfitted with MATVs by January 1, 2012.
As of mid-July that year, 19 buildings were still served by the headend, and even after the installations were complete, Max TV acknowledged that it continued to deliver the signals via its headend fiber ring. The commission's base fine for the violations would have resulted in a $16.425 million forfeiture, but was adjusted downward based on TV Max's "relative small size and limited operations." The FO is available here.
Aereo's Cloud of Confusion: Where Now for Cloud Computing Services?
Excerpted from Clayton Utz Report by Timothy Webb and Nicole Landerer
The Aereo decision has generated confusion in relation to what implications, if any, it will have for other cloud computing services.
The recent United States Supreme Court ruling in American Broadcasting Companies v Aereo has raised questions about the legality of some cloud computing services based in the USA. By a 6-3 majority, the court held that the Aereo TV streaming service "performs" copyrighted works "publicly" and therefore violates US copyright law.
Aereo is a technology company which streams TV programs to its subscribers over the Internet without permission from the copyright owners of those programs.
Aereo enables its subscribers to watch the programs on various devices by assigning each subscriber a miniature, remotely-controlled antenna through which to receive broadcast shows and a remote DVR drive through which to record, store and stream those broadcasts. When subscribers log on to their account on Aereo's website, they are presented with a list of programs currently airing and can select the show they want to watch. Aereo's system then directs the antenna assigned to the individual subscriber to the broadcast carrying the selected show, translates the signals into transmittable data, saves the data onto the subscriber's folder on Aereo's hard drive and streams the show to the subscriber's screen.
The petitioners, a group of American broadcasting companies, brought copyright infringement proceedings against Aereo. They sought a preliminary injunction, alleging that Aereo infringed their right to perform their copyrighted works publicly. This was denied at first instance, and again upon appeal to the US Court of Appeals for the Second Circuit. That Court found that Aereo did not infringe the petitioners' copyright in the broadcasts, citing the Cablevision case, which established the legal basis for cloud-based video storage and playback systems.
The petitioners appealed to the Supreme Court and, unusually, Aereo supported the appeal, seeking a definitive decision on the lawfulness of its business model.
The Supreme Court reversed the lower court decisions and held that Aereo infringes the petitioners' copyright by performing their works publicly within the meaning of US copyright law.
The US Copyright Act grants copyright owners several exclusive rights including the right to "perform the copyrighted work publicly". This includes the right to "transmit or otherwise communicate a performance … of the [copyrighted] work to a place open to the public … by means of any device or process, whether the members of the public … receive it in the same place or in separate places and at the same time or at different times".
The two questions dealt with by the majority were whether Aereo "performs" and, if so, whether it does so "publicly".
Does Aereo "perform"?
The majority held that by operating its service, Aereo "performs" within the meaning of the Copyright Act and does not, as it contended, merely provide equipment that enables others to do so. This conclusion was influenced by Congress' amendment of the Copyright Act in 1976 to overcome a prior Supreme Court ruling that the activities of community antenna television (CATV) providers fell outside the Act's ambit. The majority held that Aereo's activities are "substantially similar to those of the CATV companies that Congress amended the Act to reach" and therefore fall within the scope of the Copyright Act.
It did suggest that in other cases involving different kinds of services or technologies, a user's involvement in the operation of the provider's equipment and selection of the content transmitted may well bear on whether the provider "performs".
Does Aereo perform "publicly"?
The majority considered whether the fact that each transmission is only to one subscriber precludes the transmission from being "to the public". Again citing Congress' legislative objectives, the majority held that these behind-the-scenes technological features did not sufficiently distinguish Aereo's system from other cable systems caught by the Act.
Additionally, the majority held that Aereo's subscribers constitute "the public" since Aereo transmits the same contemporaneously perceptible sounds and images to a large number of people who do not know one another. It therefore held that Aereo does transmit a performance "to the public".
The decision has generated considerable confusion in relation to what implications, if any, it will have for other cloud computing services.
While the majority emphasized that its decision is a narrow one, and not intended to stifle technological development, it made no meaningful distinction between Aereo and other cloud computing services. It is unclear whether the decision means that an Aereo-like service could be rendered legal by making a few technical changes, or that future courts will be forced to liken new cloud computing services to earlier cable services irrespective of the behind-the-scenes technological differences between them. As Justice Scalia asserts in his dissenting opinion, the majority provides no criteria for determining when its "cable-TV-lookalike" test applies.
The legality of similar services under Australian law remains unclear, particularly given the outcome of the recent TV Now litigation. The exclusive rights afforded to copyright owners under the Copyright Act 1968 (Cth) include the right to communicate works, films and broadcasts to the public. Communicate is defined as "make available online or electronically transmit".
In the TV Now litigation, Justice Rares held that there had been no communication to the public held that there had been no communication to the public by Optus since the user clicked the "play" button to watch the recorded film — essentially communicating to him or herself, not "to the public". In overturning the first instance judgment, the Full Federal Court did not specifically deal with the issue of communicating to the public, therefore leaving the issue open.
This is unfortunate, since this is really a key issue. Courts here could be influenced by the US Supreme Court's analysis of "the public", or they could follow Justice Rares' lead in TV Now. It will be interesting to see how, if at all, this decision will impact upon future decisions of Australian courts.
Cloud Computing's Effect on Old Media
Excerpted from Datamation Report by Ted Navarro
Cloud computing is one of the most disruptive technologies the Internet has ever seen. In just a few years, it's changed the enterprise, opening the door for scores of new vendors and overhauling communication and application distribution. With cloud virtualization, businesses can scale and expand their infrastructure with a level of ease that would have been impossible a decade ago; this technology also brings unprecedented agility to load balancing and traffic management.
The disruptiveness of the cloud extends far beyond the IT department. Our personal lives have also been impacted by the technology. Thanks to a combination of cloud and mobile technology, connecting and accessing our data from anywhere is becoming entirely reasonable as ever more cloud applications make their debut into the consumer world.
This has had a significant impact on many fields, but none so much as the entertainment industry. Thanks to improved connection speeds, technologies such as video streaming and cloud music have become entirely viable. As a result, the face of old media has been changed forever.
To understand how far-reaching the cloud's impact on the entertainment space has been, one need only examine Netflix. Originally established back in 1997, the company began offering subscription-based digital video in 1999. It was somewhat ahead of its time — connections back then weren't generally fast enough for it to be practical. As networking technology improved and the cloud began to gain in popularity, however, Netflix experienced a period of explosive growth. By 2011, it had over 26 million subscribers worldwide. By 2013, that number had nearly doubled to 40.4 million.
As Netflix gained in popularity, other video streaming services began to surface as well.
The end result of all this growth shook the very foundations of both the television and film industry. Suddenly, instead of having to wait for a particular show to be on the air — slogging through a host of irritating advertisements in the process — viewers could watch on their terms, whenever they saw fit. Instead of having to spend upwards of $20 on a DVD or $10 on a rental, they could simply tune in from the comfort of their own home.
As they so often do when confronted with a groundbreaking new technology, consumer expectations underwent a radical shift. They came to expect this level of convenience with all media. They questioned why they should bother spending money to rent or buy when they could simply subscribe. Not surprisingly, this ultimately destroyed the very core of the physical video rental industry — last November, Blockbuster — once one of the largest video rental stores in the world — closed its doors for good. Only a few services, like Redbox, survived this coup.
TV companies weren't immune to the cloud's effects, either. American subscribers across the entire television industry fell by a quarter of a million in 2013, dropping to 100 million total, while a new generation of young adults questions the need to even bother paying for cable (I count myself among them; my Netflix subscription serves me well enough). This decline might be even more pronounced, had the industry not taken steps to mitigate it.
One of these steps involves services such as TV recording and video-on-demand. This, coupled with the fact that many programs are only available through a cable subscription, has served to stave off what many see as the death of traditional television. Even if this death doesn't eventually come, the fact that cloud computing has changed the field is undeniable.
These developments haven't yet impacted ad spending to any noteworthy degree, though I suspect this will change in the future. Although the cable market still represents a large advertising demographic, it is nevertheless still a market in decline, with — as MarketingCharts puts it — "stagnant reach."
The story is more or less the same in the film and music industry, as well: widespread disruption. Although sales of physical media remain relatively constant in music, more and more artists are eschewing record labels in favor of services like Pandora, Soundcloud, and Bandcamp. Meanwhile in Hollywood, movie attendance is rapidly declining as many viewers forgo the exorbitantly expensive viewing experience in favor of their own homes.
The disruption caused by the cloud in the entertainment industry extends beyond its changes to content consumption. It's also bringing about an evolution in how media organizations do business.
For example; Hollywood has fully embraced cloud computing, making use of cloud vendors to streamline the filmmaking process and tap into big data in order to get a clearer picture of audience preferences and desires (the cloud is an integral element in the analysis and organization of such data). Radio has soared to new heights as many traditional stations embrace the Internet as a delivery medium. Applications like Spotify, meanwhile, give users immediate access to millions of different tracks and feature discovery services which allow listeners to track down artists which they might otherwise never have heard of.
Cloud computing will continue to be highly disruptive. Though that disruption may have caused more than a few migraines for executives in the entertainment industry, the effects of the cloud on old media have been overwhelmingly positive, changing both the creation and consumption of content. And though a few organizations might be left in the dust as their industry shifts around them, it's no great loss — they simply weren't able or willing to adapt to a technology that offered nothing but benefits.
BitTorrent Sync Makes TIME Top 50
Excerpted from BitTorrent Blog by Kevin Fu
First in our hearts, top fifty on TIME! Jared Newman and Doug Aamoth released their picks for the 50 best Android apps of 2014. Two scrolls down and BOOM, BitTorrent Sync made the list! The team was ecstatic, honored and now all hella motivated. It's yet another push for us to continue making the best product and experience for our users.
For the full list, have a look here.
Here's what TIME said about Sync:
Cloud storage is great for accessing files from anywhere, but sometimes you want something more secure that isn't subject to recurring subscription costs.
BitTorrent Sync fulfills that need by automatically syncing any folder from your phone to your tablet or PC — or vice-versa — over your local Wi-Fi network.
Set it up for your phone's photo folder and your precious memories will always be backed up on your computer's hard drive.
Smartphone App Revenue Dominated By Handful of Developers
Excerpted from Forbes Report by Ewan Spence
Smartphone watchers are happy to describe the current third-party developer ecosystem as 'an app world', but new research suggests that it is 'a gaming world' instead, and you're going to need large pockets if you are going to attempt to take on the big names.
Midia Research looked at the top grossing iOS and Android apps during May 2014 from seven territories (America, Canada, France, Germany, Italy, Spain, and the United Kingdom) for "The Superstar App Economy: Dissecting the Global App Store Marketplace". This covers 700 applications, and while it is only the very tip of a rather long tail of applications, the trends found in the most profitable apps show that the established players can maintain their high profit levels and it's going to be very difficult for new entrants to break into the top app charts.
Where the profits are concentrated makes for interesting reading. 84.9% of the 700 top grossing apps were games, and 81% of the top grossing apps originate from just fifty companies.
Part of this dominance by games can be explained by the nature of freemium. Over the last few years freemium gaming, thanks to improved in-app purchasing methods and a greater acceptance of this style of 'free download, pay for extras', has been behind some of the largest revenue streams for a number of developers.
The smart developers have been creating positive feedback loops by using the revenues from the freemium sales to finance the marketing and acquisition costs of new players… who will start using IAP and increase the funds available for more marketing.
That means the top earners are easily able to pull away and generate astonishing levels of revenue (Finland's Supercell reported $829 million in revenue last year). The runaway levels of revenue for the top companies such as Supercell, King (Candy Crush Saga) and Zynga, give them the ability to stay in the top charts in the app stores, and make it harder for new entrants to build up enough momentum to create a profitable financial feedback loop.
That's not to say that smaller developers should ignore this strategy. The freemium gaming scene can have a huge turnover of players, and it is no longer enough to have a hit game. Take Flappy Bird, which was generating $50,00 a day at the peak of its viral success. That could have been re-invested to acquire users, rather than taking the game down, but it would not have come close to levels of the top titles.
Supercell's $829 million breaks to almost $2.27 million per day. The true number is now likely much higher, with reports of $5 million per day in revenue and $1 million of that invested back into a daily marketing budget.
There is a significant amount of money spent on mobile gaming, but it is concentrated in a handful of companies and their own games. Unless new developers can match that level of spending, they are going to find it hard to get anywhere close to the top 100 app charts. It's very likely that the next wave of 'hit games' are going to come from the same established set of developers and publishers we have at the moment.
Amazon Web Services Launches New Capabilities for Mobile Developers
Amazon Web Services today announced several new capabilities to make it easier for developers to build, deploy, and scale mobile applications. Amazon Cognito is a new service that provides simple user identity and data synchronization that lets developers create apps that authenticate users through popular public login providers, and then keep app data such as user preferences and game state synced between devices.
The new Amazon Mobile Analytics service allows developers to easily collect and analyze app usage data, up to billions of events per day from millions of users, and delivers usage reports within an hour of data being sent by the app.
AWS is also introducing a new unified Mobile Software Development Kit (SDK) that makes it easy for iOS, Android, and Fire OS developers to access the new Amazon Cognito and Amazon Mobile Analytics services as well as popular AWS services like Amazon S3 and Amazon DynamoDB. To get started with AWS Mobile Services, visit here.
Today, many app developers around the world use the AWS Cloud as infrastructure building blocks for the back-end services that power their mobile applications.
Still, these mobile app developers have had to spend valuable time on undifferentiated heavy lifting like connecting apps to storage and database services and integrating core functionality such as authentication, user management, notifications, and usage data analytics. With Amazon Cognito, Amazon Mobile Analytics, and the AWS Mobile SDK, developers are now able to focus more of their energy on what matters, the differentiated functionality of their app that attracts and retains end users.
With Google Offer, Cloud Storage Gets Closer to Free
Excerpted from Wall St. Journal Report by Alistair Barr
Google Wednesday fired another shot in the price wars for cloud-computing services, offering businesses more free storage in an effort to compete with industry leader Amazon Web Services.
Google Cloud Platform offered two terabytes of free storage for a year, through one of its partners, a startup called Panzura.
The move highlights the battle among Google, Amazon and Microsoft to provide companies with remote storage, computing power and other technology services, which reduce companies' need to buy and run their own equipment. Some industry insiders predict storage will soon be free.
By comparison, Amazon offers a service for infrequently accessed data at one cent per gigabyte per month, which would equate to $120 a year for one terabyte of storage. Microsoft's Azure service offers business the first terabyte of data storage for as little as 2.4 cents a gigabyte per month.
"Storage is a race to the bottom on pricing," said Rajesh Abhyankar, CEO of MediaAgility, a cloud consulting firm that works with Google. "The money will be in software and services that sit and run on top of these companies' cloud platforms."
Abhyankar said Google's free storage offer with Panzura is part of an effort to grab business customers from Amazon. "Google is trying really hard to catch up with AWS," he said. "These types of offers may persuade users to move their data."
Abhyankar said Google can combine cheap cloud services with other products that companies pay for, such as its Maps Engine Pro service that displays corporate data on digital maps.
Research firm Gartner in March estimated companies' spending on outsourced computing services like those provided by Google and Amazon would rise 45% this year to $13.3 billion.
Panzura, the startup working with Google, helps companies store data remotely in Amazon, Google and Microsoft data centers and provides tools that let them access the files from multiple locations with existing software programs. The Google offer covers access from one location using a free Panzura service. If companies need access from multiple locations, they have to pay Panzura, although Google will still charge nothing for the storage for a year.
"This is a way for customers to try something new, especially if they have had some kind of aversion to using the cloud in the past," said Chris Rimer, global head of partners at Google's Cloud Platform business.
He said Google wants to encourage businesses to move more of their computing to the cloud. "We want to make sure potential customers are not worried about cost as a barrier to entry," Rimer said.
Cloud storage companies Box and Dropbox also offer free storage plans, but these typically focus on individual users and have storage limits that range from a few gigabytes to 100 gigabytes.
"There are free offers out there for gigabytes of storage, but terabytes is where it starts to get interesting for companies," said Rimer.
How Rackspace Is Creating Gold Standard in Cloud Computing
Excerpted from Economic Times Report by Chiranjoy Sen
When Ajit Melarkode joined Rackspace as Asia Pacific chief a few months back, he was expecting teething trouble. "Based on some earlier joining experiences, I was expecting not-so-friendly co-workers initially," he says. "Instead, I was greeted by collaborative colleagues ready to discuss mistakes and work out solutions together."
One more 'Racker' (an endearing prseudonym for a Rackspace staffer) was born. Teamwork at Rackspace is not just a word, but a template that sets this cloud computing firm apart from its peers. Yet another strategic pillar that helps Rackspace thrive is what co-founder and CEO Graham Weston calls 'fanatical support' — creating a gold standard in customer service through an empowered team.
Rackspace operates in a competitive cloud hosting space dominated by Amazon, Google and Microsoft and needs to be 'brave and smart' to succeed. Its approach is different than that of the public cloud providers who essentially rent out access to raw IT infrastructure. Rackspace provides specialized expertise to manage the infrastructure and the complex applications and tools that run on top of it. Unlike simple hosting, cloud service has become so complex that users need partners to help them manage products.
Weston, who founded the San Antonio based firm in 1998, says: "Amid a group of very similar commodity cloud providers, we have built a clear position...as the leader in managed cloud services. We have a differentiated strategy built around our strengths in fanatical Support, hybrid cloud and open technologies."
The bottom line? A product and platform firm morphing into a niche services organization and aiming to be one of the best, Rackspace has to build stickiness among its customers and employees into its strategic core. Fanatical Support is a key lever in keeping clients from bolting. Support is not about only solving problems but "extends to everything that we do — from providing 99.999% uptime in our data centers, to helping customers architect, deploy, run and adapt their most critical IT environments," says Weston. It attracts many clients to launch their business with Rackspace, because Rackspace allows them to innovate and change with them — and stay on.
An US-based analyst said in a GigaOM. com blog that he has seen a Rackspace marketer refuse to promote a new service until its support metrics improved. Rackers are also empowered to use their judgment to do what's best for customers, without asking permission — typical in a tiered call center — resulting in more agility.
To make it dynamic, Fanatical Support is being expanded to include expertise in areas where today's customers need help — data services, digital marketing and managed virtualization, says Nigel Brighton, VP of technology and product.
But how does Fanatical Support seep in? Weston explains "when we decided to build our company around Fanatical Support, not long after Rackspace was founded, we realized that great customer service can't be commanded. It must be volunteered."
Rackspace started to build a culture where people would take pride in helping customers and enjoy spending time with colleagues. Open and honest discussions as well as transparency — employee swipe cards list out their key professional strengths — were core values driving Rackers to take ownership of the company, its culture and its results.
It hires for attitude and aptitude and then train people for skills - even experienced engineers are drafted in only if they fit into the culture. "We accept a lower percentage of our applicants than does Harvard University. Every Racker is employed because of the aptitude and temperament and character that he or she contributes to help us achieve our vision."
Like Melarkode, new recruit Milie Kwan's first week started with 'New Racker' balloon and warm welcome greetings followed by training and pressure-free hands-on experiences. No surprises that Rackspace has been consistently featuring in the top half of several global great places to work list -- number 29 across US in Fortune's 100 great places to work, sixth in the UK and twelfth in Hong Kong.
Going the extra mile for both colleagues and customers is paying off. "Our high workplace engagement results in lower employee turnover, ours is among the lowest in the industry. Plus, we believe our culture encourages productivity and innovation.
Those are hard to measure, but we know that Rackers have come up with highly valuable ways to use technology so that each of them can support more customers. Our ratio of Rackers to servers under management continues to fall."
Coming Events of Interest
Silicon Valley Innovation Summit — July 29th-30th in Mountain View, CA.AlwaysOn's 12th annual SVIS is a two-day executive gathering that highlights the significant economic, political, and commercial trends affecting the global technology industries. SVIS features the most innovative companies, eminent technologists, influential investors, and journalists in keynote presentations, panel debates, and private company CEO showcases.
International Conference on Internet and Distributed Computing Systems — September 22nd in Calabria, Italy. IDCS 2014 conference is the sixth in its series to promote research in diverse fields related to Internet and distributed computing systems. The emergence of web as a ubiquitous platform for innovations has laid the foundation for the rapid growth of the Internet.
CLOUD DEVELOPERS SUMMIT & EXPO 2014 — October 1st-2nd in Austin, TX. CDSE:2014 will feature co-located instructional workshops and conference sessions on six tracks facilitated by more than one-hundred industry leading speakers and world-class technical trainers.
International Conference on Cloud Computing Research & Innovation — October 29th-30th in Singapore. ICCRI:2014 covers a wide range of research interests and innovative applications in cloud computing and related topics. The unique mix of R&D, end-user, and industry audience members promises interesting discussion, networking, and business opportunities in translational research & development.
PDCAT 2014 — December 9th-11th in Hong Kong. The 16th International Conference on Parallel and Distributed Computing, Applications and Technologies (PDCAT 2014) is a major forum for scientists, engineers, and practitioners throughout the world to present their latest research, results, ideas, developments and applications in all areas of parallel and distributed computing.
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