If you have read my blog long enough you probably know by now that I absolutely hate it when the media sets wrong expectations in the industry. First it was their notion that ISP caps would kill the online video industry, yet that didn't happen. Then it was the promise of TV everywhere being some kind of new monetization platform, yet so far, almost no TV everywhere services even exist. Next up was the idea that cord cutting was a big trend about to disrupt the cable TV providers, but as we have seen, that's had no impact on the market and MSO's are still making a lot of money and not losing a lot of subscribers. Yet even with all of these hard facts and figures in the market, it still does not stop a large portion of the media from writing post after post about how the cable industry is getting their butt kicked. In reality, most of these blogs are simply picking headlines that sound good, but offer nothing in the way of evidence to back it up and many of the authors of these posts are completely out of touch with reality.

The latest article on the "cable is dead or dying" topic appears on Venture Beat entitled "How Roku is kicking the cable industry’s butt & where it’s going next [exclusive]". The first problem with the article is that there is nothing "exclusive" about it. The information Roku's CEO gave out and what he's quoted as saying in the article is the same info he has given out to many members of the media. There is nothing "exclusive" about what is reported or what is said, yet many bloggers seem to put the word "exclusive" in their post simply as bait. I think many bloggers spend more time crafting the title to their post than the actual post itself (Updated: Here's another article that just came out in the last hour entitled "TV Everywhere: How the Internet is Killing Cable". Useless drivel)

No where in the article does the author compare the numbers of cable TV subscribers to Roku's install base. While it says that Roku has sold 2.5M boxes to date (note that's boxes, not unique users) and "expects to sell 19 million boxes over the next three to four years", those numbers mean nothing unless you compare it to the cable TV install base, which is over 100M in North America today. And while it's nice to see it reported that Roku did $100M in revenue for last year, that pales in comparison to just one MSO like Comcast who generates more than $1B in profit each quarter. While I personally like Roku and think it's the best $99 box on the market, it's not kicking cables butt. In fact, Roku's CEO even says that Roku is a compliment to cable TV, not a replacement, yet the author of the post still tries to imply that Roku is replacing cable TV.

When Apple came out with the first Apple TV model, the media said it would kill off DVDs. That's didn't happen so when Apple came out with Apple TV 2, the media then said it would be different this time as this model was only $99. To date, Apple has sold less than 5M devices and it has not had any impact on the overall advancement of the market or disrupted any competitors. Yet, now the media wants to talk about how an all-in-one Apple TV will "disrupt" the market, because they want to imply that the current way of doing things is outdated or dead. Cable TV is not dying.

While this latest Venture Beat article is the one I am using as an example of my point, there are many like it. Each week I read members of the media saying things like, "cord cutting is now a reality", "cable companies are antiquated", or they imply that any service that comes to the market is a "Netflix killer". In the real-world, none of this could be further from the truth and it is clear that most of the authors writing these posts don't even use these devices, services and platforms they are writing about. You almost never ever see them give out any numbers in the post either, saying just how many cable TV subscribers there are. When the media was all frenzied about the number of cable TV subscribers MSOs lost last year, especially in one quarter, I didn't read a single article that put those numbers in context. They are quick to put in the title of their post numbers in the hundreds of thousands, because it sounds big, but put that into context of the total number of cable subscribers and those numbers were less than 1% of the total market. But of course, saying less than 1% in the title of the post would not be dramatic enough, so they leave that out from the title and the post.

As I have complained about before, too many blogs don't want to tell a story or include complete data and do their research. They simply want to write as many 700 word posts as they can in one day, with explosive titles to bait readers and then move on to the next "hot" topic. Case in point. Just think about how many blog posts you have seen about the all-in-one Apple TV. Post after post from people "speculating" what it will, won't or could do when it is released. How many sites need to say the exact same thing over and over again, yet add absolutely nothing to the discussion, about a product that DOES NOT EVEN EXIST. We've been reading posts about this with predictions for three years now. That's not news.

Why are members of the media so adamant in trying to convince others of things that are not happening? Why are they so insistent on trying to push their views on others? That's not their job. Any good blogger should know that their job is to provide data on what is really happening in the market, give readers the full picture and then let them make their decision on what it means for the industry. While there is nothing wrong with any blogger saying what they think it means, or giving their opinion, they have to back it up with reasoning. Simply saying cable TV is dead because I say it is, even in the face of all the data that shows otherwise, is not responsible.

This problem with the media is never going to go away because many authors are paid and given a financial incentive to push quantity over quality. And that's why, in most cases, some of the best authors and blogs on the web that cover this industry are from those who aren't motivated by money and aren't operating a blog to push page views. So for all the bloggers out there saying that, "cord cutting is now a reality" or "the cable TV model is dead", you're not living in the real-world. Yes, many of you can write more eloquently than me or have a journalism background, but you are not eating, sleeping and breathing these technologies and it shows. In most cases, you have never even used the product you are writing about. You are doing a dis-service to your readers and more importantly, to the industry. But since most don't care about the industry and don't feel any responsibility to it, they keep writing posts that push hype and fantasy over reality.

If I sound bitter, I am. Myself and many others actually care about this industry and for those who were around in the 2000 time frame, we saw our industry die due to all the wrong expectations set by members of the media and vendors in the market. Projections for products and services in the market were set that could not be met under any circumstances. It was a ticking time bomb. This is very dangerous and setting false expectations, that are then realized as being false, stops the advancement of the entire market. So when bloggers want to imply or insist that one service is replacing another or putting someone or something out of business, when in reality it's not, it changes people's perception of what's actually taking place. And many times, perception can quickly become reality and that's never good.

I wish it was a requirement that any blogger writing about a consumer service, product or device should be required to have to use the product or service, at length, before they could write about it. I do many interviews with members of the media and I am always amazed at how many are writing about services, even something like Netflix, that they then say they have never even used before. It shows.

Hyping any aspect of this industry when it's not actually taking place and wrong expectations get set. And when that happens, VCs invest money into companies who won't survive, companies change the focus of their business based on misguided data and the value of the products and services in the industry get inflated beyond reality. We've had this problem as an industry in the past and when you set wrong expectations with consumers, the end result is even worse.

Don't let the hype in this industry become the metrics for how we judge true success in the market.

For those that I know are going to want to argue with me on this, feel free to, but debate the facts of what's really taking place in the market, because reality, not percetpion is all that matters. Look at ALL of the numbers and don't cherry pick pieces of the data that don't tell the full story. You have to separate facts from opinions.

Related:

- Judge The Success Of This Industry On Real Business, Not Hype Like "Cord Cutting"

- Internet Video Distribution Will Not Displace Cable TV: "Cord Cutting" Is Hype

- Latest Results From Cord Cutting Survey Flawed, Does Anyone Care About Real Numbers?

I've just added a new session to the Streaming Media East program, taking place May 15-16 in NYC and have opened it up to speaker suggestions. Below are details on the session and if you're interested in being considered to speak on this round-table panel, please send me an email with a pitch.

Will Internet TV Accelerate Online Video's Growth or Keep Television Stronger than Ever?
Tuesday, May 15, 2012 4:00 p.m. – 5:00 p.m.
While cord cutting has yet to make any real impact on the cable TV business, in the future all devices will be connected and more content choices will be available. Traditional television still remains as strong as ever while online video has, in some ways, failed to disrupt the broadcast industry. In this session, content owners and CE manufactures will debate whether over-the-top (OTT) connected devices and platforms will accelerate the flow of consumers away from television and onto the web and outline what OTT services have the best shot at disrupting cable TV.

Since last year, Akamai has been working on developing an operator based content delivery product and this morning, the company officially announced the launch of their new managed CDN offering, which they have branded as Aura Network Solutions. While the company was light on details on how it works, what it costs and which customers they have signed up, they did provide me with their thoughts on the market and some details on their plans for a federated CDN model.

Like many of the CDN vendors in this industry, most notably EdgeCast and Limelight Networks, Akamai plans to have two operator CDN products, one managed and one licensed. Today, Akamai is offering a managed CDN offering only and next month, plans to have their licensed software model in trials. One interesting piece of information the company divulged is that when launched, their licensed CDN product will have transparent caching functionality build in. That's an interesting development because Akamai's platform would then offer all three services to an operator, those being on-net services/software, off-net delivery and transparent caching. (more on why that is important here)

Akamai said they have 6-10 paying customers for the managed CDN offering today, with three of those customers being operators and three more being government institutions. While Akamai has been deploying edge boxes inside of private networks for years, the company said their managed CDN technology is something completely different and has been designed just for operators. Akamai was not able to mention any customers by name, but said they expect to be able to give out more details before too long. The company said they are in discussions with most of the major operators, as well as some who are conducting trials, but it's too early for me to know how far along they are until we start hearing directly from customers.

Akamai said that 100% of the technology for their managed and licensed CDN products have been developed in-house and that they have built a "new" software solution for carriers as well as a team of people inside of Akamai to support them. What effect their managed and licensed CDN products will have on their bulk delivery business is unknown, but I could see many carriers competing with Akamai's CDN business over time. The cost of the managed/licensed offerings might offset that, but it's really too early to know since I don't yet have details from any customers on what Akamai is charging for these new products. The company also said they plan to offer a federated CDN model, which they will call "Akamai Instant Federation", with all of their managed and licensed CDN customers, but it's really too early to know what that may look like.

There is only so much myself or anyone else can write about Akamai's new managed CDN offering because we don't just yet know how it works, if it works, or what it truly looks like. But if Akamai does in fact announce a bunch of operators as customers and those operators start discussing details, we're going to have a pretty good idea what kind of disruption they could have in the market. Naturally, their partnership with Ericsson should help as Akamai also announced that Ericsson is selling their Smart Cloud Acceleration solutions to mobile and operator networks, which will be bundled with Akamai's CDN software.

As I have written about before, the greatest challenge that Akamai faces is in convincing operators that their intentions are pure, and that this is not principally a strategy to gain valuable real estate inside the ISP network. Fifteen or so years ago, Akamai sold web caching to ISPs, and used that position to gain an upper hand in the nascent world of CDN. As the value to the ISP began to shrink, network operators began to view Akamai as someone who consumed massive amounts of bandwidth and got a free ride.

Now they have to convince the operators that this time is different, and that the offering is genuinely for licensing technology to the ISP to delivery video and other content. There certainly is a growing market for these services and software, but from many conversations that I have had, network operators are not yet convinced that Akamai is the answer to their problems; both technically, but more important strategically. But if Akamai can show the market that they have customers for these services and be more transparent than they have been in the past on how the technology works, they may change operator's perception.

Akamai wasn't able to share with me what the size of the market opportunity for managed and licensed CDN services is today, or what it may grow to, and I don't know the size of the market either. By my estimates, it's well less than $100M this year, but it is expected to grow pretty quickly over the next few years. At some point soon, I will put out market sizing data for the licensed CDN market like I have done for the video CDN and transparent caching markets.

If you want to learn more about the managed and licensed CDN business and hear directly from carriers and operators deploying these solutions as well as transparent caching products, then check out the Content Delivery Summit, taking place May 14th in NYC. We'll have carriers from all over the world speaking as well as all the major vendors showcasing how their solutions and services work.

Related Posts:

– Akamai Developing A Licensed CDN (LCDN) Offering For Telcos and Carriers

– A Closer Look At Akamai's Strengths & Weakness For A Licensed CDN (LCDN) Offering

– Limelight Launches Managed CDN Offering For Carriers, Is A Deal With F5 Next?

– Transparent Caching & CDN Merging: Juniper Licenses BitGravity's CDN Technology

– EdgeCast and PeerApp Team Up To Combine CDN With Transparent Caching

I'm working on placing speakers for the East show, so I'm a bit behind on blogging this week, but there have been a lot of really interesting news stories over the past few days. Here's what I've found most interesting and I've tried to highlight ones that didn't get picked up as much and might have been missed by mainstream outlets.

• Reed Hastings on Netflix's Recent Rise and Fall : Still bloodied by one of the worst self-inflicted corporate disasters in recent memory—last year’s $12 billion wipeout—Netflix C.E.O. Reed Hastings remains adamant about his goal: moving from red envelopes to streaming video. With Hollywood hailing his vision and needing his business, Netflix has started to rebound. But not everyone is sold. – vnty.fr/zupEFi – @WilliamCohan

• Google: Please Don’t Kill Video on the Web: Yesterday, Microsoft filed a formal competition law complaint with the European Commission (EC) against Motorola Mobility and Google. You probably take for granted that you can view videos on your smartphone, tablet, PC, or DVD/Blu-ray player and connect to the Internet without being tied to a cable. That works because the industry came together years ago to define common technical standards that every firm can use to build compatible products for video and Wi-Fi. Motorola and all the other firms that contributed to these standards also made a promise to one another: that if they had any patents essential to the standards, they would make their patents available on fair and reasonable terms, and would not use them to block competitors from shipping their products. Motorola has broken its promise. – bit.ly/z9nwMQ

• Ex-Apple Man Streams Flash Onto the iPad: On Wednesday, OnLive unveiled a new version of OnLive Desktop — an iPad application that lets users access a virtual Windows desktop and Windows applications housed on servers in the proverbial cloud — and this new version includes a browser equipped with Adobe Flash. Famously, Apple doesn’t allow the Flash player to run locally on the iPad, but OnLive is offering a way around the restriction. – bit.ly/xoNCtQ – @CalebGarling

• Google Releases Fifth Generation VP8 Hardware Encoder: The fifth generation of the widely adopted H1 hardware encoder for VP8, internally known as “Evergreen”, has become available for licensing. In particular, Google has enabled temporal and spatial scalability for VP8 video coding, a valuable feature for live streaming, multi-way video conferencing and security applications. To their knowledge, there are no companies offering H.264/SVC (scalable video coding) hardware encoders for chipset manufacturers at the moment. With this release, VP8 now offers scalable coding at the hardware level. – bit.ly/yi01BQ – @webm

• Why TV Isn't Free (And Never Really Will Be): Every other month or so it seems, I read another article on TechCrunch or some other fast breaking tech site that showcases a company like Aereo (formerly Bamboom) that has just launched their idea to deliver live over-the-air TV to your computer, through the cloud, over a dime size antenna, blah blah blah. While I applaud any amount of entrepreneurship, regardless of its shortsightedness, their powers and ingenuity would be best used on something else. But what most consumers (and by most I mean well over 90%) don’t realize is how the business of TV works. – bit.ly/yz3n9b – @FourElementsMed

• Google, Microsoft, and Netflix's HTML video copy protection proposal draws criticism from Mozilla and W3C: A new Web standard proposal authored by Google, Microsoft, and Netflix seeks to bring copy protection mechanisms to the Web. The Encrypted Media Extensions draft defines a framework for enabling the playback of protected media content in the Web browser. The proposal is controversial and has raised concern among some parties that are participating in the standards process. In a discussion on the W3C HTML mailing list, critics questioned whether the proposed framework would really provide the level of security demanded by content providers. – bit.ly/x9qMSp – @segphault

• Adobe and Google Partnering for Flash Player on Linux: As discussed in the just released Adobe roadmap for the Flash runtimes, Adobe has been working closely with Google to develop a single modern API for hosting plugins within the browser (one which could replace the current Netscape plugin API being used by the Flash Player). Because of this work, Adobe has been able to partner with Google in providing a “Pepper” implementation of Flash Player for all x86/64 platforms supported by the Google Chrome browser. Google will begin distributing this new Pepper-based Flash Player as part of Chrome on all platforms, including Linux, later this year. – adobe.ly/Ay1YbV – @air

• Starz Movies Leaving Netflix, Prioritizing Your Instant Queue: At the end of this month, the agreement for Starz supplied content on Netflix Instant video streaming expires. Last year, Netflix and Starz were not able to negotiate an extension to keep Starz original series and movies on Netflix streaming. That means that just over 840 movies that are currently on Netflix streaming will no longer be available come March 1st. – bit.ly/xB1cKq – @TechOfTheHub

• Forget the Amazon Kindle Fire, the BB PlayBook is now the best low cost tablet: Thanks in large part to the success of the Amazon Kindle Fire, the Android tablet market is finally heating up and starting to impact Apple iPad market share. With the new OS 2.0 update available for the BB PlayBook, people should seriously consider one for $199 instead of the $199 Amazon Kindle Fire if they are looking for more of a tablet than an ebook reader. – zd.net/xI8DjK – @palmsolo

• Flash roadmap reveals new features, improved GPU support, lack of retirement plans: Flash for mobile may just be a spectator at its own wake at this point, but the desktop browser plug-in is still alive and (reasonably) well. In fact, Adobe has a host of plans for its flagship multimedia platform, as outlined in its 2012 roadmap. It all starts with 11.2, which should be landing sooner, rather than later, with support for right and left mouse clicks, multithreaded video decoding and improved GPU acceleration support. That will be followed by Cyril and Dolores, which will also expand the list of hardware-accelerated video cards, as well as improve overall performance and add a few welcome tweaks, like supporting keyboard input in full screen mode. – engt.co/A14SiG – @engadget

• Half of Internet TVs Aren't Connected: Internet TVs have been available for several years, but sales have been taking off just in the past year. Still, only about half of the people who buy the sets are using the devices' Internet capabilities. And Internet TVs aren't yet an alternative to cable. Just 3% of subscribers are planning to drop their cable or satellite services, according to a recent study. – bit.ly/z3jzLq – @TechNewsDaily

• Video Streaming standards coming with MPEG-DASH: Over 50 key industry leaders have launched an initiative to promote a standard video delivery format based on MPEG-DASH (ISO/IEC 23009) that will help reduce video delivery fragmentation to enable broadcasters and video publishers to bring more video online. The MPEG-DASH promoters group will help demonstrate and drive industry adoption towards a video streaming format standard profile called DASH-264. DASH-264 profile is based on the same fMP4 (Part 12) foundation that both Adobe and Microsoft have developed Adobe HTTP Dynamic Streaming (HDS) and Microsoft Smooth Streaming on. – bit.ly/wPJWxV

I will try to publish a list like this every week and all of these stories come from my Twitter feed. So if you want to see what I am reading in real-time, follow me on Twitter (@DanRayburn).

On Tuesday, Barry Diller introduced a new company and service called Aereo that will offer consumers in the NYC area the ability to get live broadcast TV stations via the Internet, with DVR in the cloud, for a subscription fee of $12 a month. Unfortunately for Barry's IAC/InterActiveCorp, who invested $20.5M in the company, this is going to be another example of an executive bringing a product to the market, simply because of their ego. Aereo has no shot at succeeding let alone disrupting the current cable and satellite market like they imply.

Consumers are not asking for this service, aren't demanding it and certainly aren't willing to pay for it. Aside from the fact that the service gets no cable channels, will only be available in NYC to those who have a NYC based billing address and IP and might face legal issues, the biggest problem is that it won't work as well as Aereo implies. While the company lists the Roku as one of the devices it will support, when I inquired for more details, a representative said Aereo will work with a Roku provided you link it to a browser based iOS device such as an iPad and use it to control it. So now I need two devices to make it work on one?

Aereo will only work on devices that have a HTML5 compatible browser, not via apps, so getting this via an Xbox 360 or PS3 is out of the question. While the company has claimed it will offer "HD quality", so far, they have not defined what they classify as HD, what bitrate it will be encoded in, who is delivering the video or what kind of streaming technology, like adaptive bitrate, might be used. So while Aereo is trying to make the service sound really easy to use, they have yet to provide any real technical details which will determine how good the video really looks and how well it will be delivered.

Of course anyone can already get the channels that Aereo is offering by simply getting a TV antenna for over-the-air broadcasts, so they will have a hard time selling the same thing for $12 a month. Some might argue that the real value is that Aereo offers a DVR service in the cloud, but since all of the content being offered is from the major broadcast networks, it's not exactly hard to find their shows on the web after they air. Others might argue that the real value with Aereo is that you can watch live TV on mobile devices, but you'd blow through your wireless cap pretty fast if you watched enough TV via a 3G or 4G connection. And so far, consumers in the U.S. have not shown any real interest in wanting to watch live TV on mobile devices, outside of some very specific content.

Another big problem for Aereo that no one has mentioned is the amount of money they would need to spend to market and support their service. The cable and satellite companies have huge marketing budgets for TV, radio, print and web and Aereo won't be able to reach the same audience without raising a lot more money. New customer acquisition costs would be very high and support costs will also put a burden on the company. What happens when users call up complaining that they can't get the content due to them not realizing it's a problem with their device or their connection? Aereo is going to have to spend a lot of time helping customers with tech issues that the cable and satellite companies don't have. For the most part, cable TV always works and Internet based streaming services don't have the same level of reliability or simplicity that cable TV has and are more expensive to support.

There are more than 100M consumers in the U.S. that pay for TV via cable and satellite and Aereo has implied that a big market to them would be about 300,000 subscribers. That's not even one half of one percent of the total number of cable/satellite TV subscribers in America. Yet they think their service will somehow disrupt the cable TV market or make cable companies change their practices? They aren't being realistic.

Whether the technology works or not is irrelevant as this is not a service consumers want, are demanding or will be willing to pay for, in any real quantity. This thing is dead before it even gets off the ground.

The 2012 Streaming Media East show (May 15-16 in NYC) will feature a special broadband-enabled device pavilion, allowing thousands of attendees to get hands-on with more than 50 of today’s leading streaming devices and Over-The-Top video content platforms. It is the only show where you can try out all of these devices and platforms in action, compare them side-by-side and get your questions answered – all for free.

Simply register for an exhibits only pass and come test out any combination of gaming consoles, stand-alone streaming boxes, smart TVs, connected Blu-ray players and tablets that you want. Additional devices and platforms will be added leading up to the show. Confirmed devices/platforms include:

• OTT PLATFORMS: Netflix, Hulu Plus, HBO GO, iTunes, VUDU, Xbox LIVE, Amazon Prime Streaming, DISH/Blockbuster, Sony PlayStation Network, Google TV, MLB.TV, NHL, EPIX, UFC, ESPN, YouTube, OnLive.

• DEVICES: Apple TV, Boxee Box (with Live TV dongle), Xbox 360 (with Kinect), Nintendo Wii, Roku XDS, Seagate GoFlex TV, Sony PS3, Sony SMP-N200, TiVo Premiere, ViewSonic NexTV, Vizio Stream Player, WD TV Live, WD TV Live Hub.

• TABLETS: Amazon Kindle Fire, Apple iPad, ASUS Transformer Prime, B&N Nook Tablet, BlackBerry PlayBook, Dell Streak, HP TouchPad, HTC Flyer, Motorola Xoom 2, Motorola Xyboard, Samsung Galaxy Tab, Sony Tablet S, Vizio Tablet.

• CONNECTED TV PLATFORMS: From Sony (BRAVIA Internet Video), Vizio (V.I.A.), LG (NetCast), Panasonic (Viera Connect), Philips (NetTV), Samsung Smart TV, Sharp (Aquos Net+), Toshiba (NetTV). 

• CONNECTED BLU-RAY PLAYERS: From Samsung, Philips, Sony, Vizio, LG, Panasonic, Sharp, Toshiba, Magnavox and Sylvania

Attendees will also have the chance to win many of these devices and other giveaways during the two-days of the show so register online and come get free access to the largest collection of OTT devices and platforms all in one room.

Boston based Yottaa (pronounced "Yo-ta") has announced a new dynamic site acceleration service aimed at the small and medium sized business (SMB) market. For those who have never heard of the company before, Yotta was founded in 2009 and for the last year, has primarily been offering a website performance monitoring service. The company raised $4M in a Series A round and now employees 40 people.

Unlike many of the larger CDNs who target enterprise customers with their DSA offering, Yottaa is going after small and medium sized customers who can't afford a larger vendor like Akamai. Yottaa says they have more than 75,000 websites that use their website performance monitoring service, with the typical paying customer spending about $500 a month. The company says 36% of their customers are small e-commerce websites and 40% of their revenue comes from outside the U.S.

Yottaa's new dynamic site acceleration platform is deployed across 20 data centers in North America, Europe, Asia and Australia and the company is adding a location in Sao Paulo later this year. The company offers a pay-as-you-go model and doesn't require long-term contracts. Below is a slide that outlines the features of their new DSA service.

Yottaa sells their services direct to customers but most of their business comes from partnerships with hosting companies and cloud providers who act as re-sellers. While Yottaa's revenue was a "few million" dollars last year, the company expects they can more than double revenue this year as they see continued demand for their new DSA service.

The CDN space sure is getting crowded and we're going to see even more companies entering the market with dynamic site acceleration services later this year.