We're doing it for consumers (not)

Last February, Comcast announced that it had agreed to acquire Time Warner Cable for a bit over $45 billion. The Comcast press release announcing the deal had the sub-head "Transaction Creates Multiple Pro-Consumer and Pro-Competitive Benefits, Including for Small and Medium-Sized Businesses." The press release had three discussions of the benefits that the merger would bring to consumers, and in subsequent Congressional hearings, both Comcast and Time Warner Cable executives have touted how their merger will benefit consumers.

Last Sunday, AT&T announced that it has agreed to acquire DirecTV for $49 billion. The joint AT&T/DIRECTV press release mentioned consumer benefits twelve times, including this quote from DIRECTV President and CEO Mike White: “This compelling and complementary combination will bring significant benefits to all consumers, shareholders and DIRECTV employees."

Earlier today, the National Association of Broadcasters, which represents the major broadcast networks, as well as radio and television station owners, issued its own press release questioning the consumer benefits of the AT&T/DirecTV deal, while emphasizing its own interest in looking out for consumers. NAB executive VP Dennis Wharton was quoted as saying “AT&T’s proposed merger with DirecTV demands a hard look in an increasingly consolidated broadband and pay television marketplace. It is hard to see how decreasing competitors in the pay TV marketplace – while increasing regulatory restraints on local TV stations – truly benefits consumers.”

Let's be clear: AT&T, Comcast, DIRECTV, the National Association of Broadcasters and Time Warner Cable couldn't give a damn about consumers. They're saying what they think they need to say in order to get the appropriate governmental agencies to approve or block the mergers. Let's look at what the parties really want or are afraid could happen:

• Comcast wants Time Warner Cable's subscribers in order to increase its subscriber count to 30 million households, or about a third of all households in the U.S. that watch television. The merger will increase Comcast's revenues and profits dramatically, after years of little or no subscriber growth. It will also make it much riskier for broadcast and basic cable networks to threaten to black Comcast's channels out during retransmission negotiations, because losing Comcast's households would mean immediately losing a third of their viewers, and substantially more than that from major markets controlled by Comcast. That would directly impact ratings and force networks to make up the lost viewership to advertisers.
• AT&T gets a national footprint by acquiring DIRECTV. It will be able to sell TV service, and to bundle mobile and TV service, anywhere in the U.S. It will be able to sell DIRECTV out of every AT&T mobile retail store. The merged company will have roughly 26 million subscribers--second only to the merged Comcast/Time Warner Cable. That will give AT&T the same leverage in retransmission negotiations that Comcast will have. AT&T also gets access to DIRECTV's unique programming, including NFL Sunday Ticket, which generates $300 of revenue per subscribing household each year.
• The National Association of Broadcasters fears its members' loss of leverage in retransmission negotiations as much as Comcast and AT&T are looking forward to it. Instead of negotiating with ten big cable operators, two big satellite providers and two big IPTV providers (AT&T and Verizon,) broadcasters' negotiating partners are going to be Comcast, AT&T and everyone else. Broadcasters are afraid that Comcast and AT&T will squelch their ability to raise retransmission fees, and may even be able to lower them.
• Smaller cable operators (represented by the American Cable Association) are concerned that if the broadcast and basic cable networks can't get the money they're looking for from Comcast and AT&T, they'll try to get it from the smaller cable operators, which have far less negotiating leverage.

None of this has anything to do with improving service or lowering costs for consumers. As Bloomberg Television pointed out yesterday, Comcast and AT&T could do something that would be of great benefit to consumers: For far less than the $45 to $49 billion that each merger will cost, they could dramatically increase consumers' Internet speeds to 1 Gigabit per second. That would give customers near-instantaneous access to Internet content and services. However, Comcast and AT&T are only planning to offer 1 Gigabit service in those markets where Google Fiber either already offers it or plans to offer it in the future.

NAB 2011 Part 1: Cameras, Recorders and Lighting

The overarching theme of NAB 2011, at least for me, was "Price is no longer an obstacle". Other people might focus on 3D, which was everywhere in its headache-inducing splendor, but for me, the story was that you can do more for less money than ever before. In the next few posts, I'll deal with some of the most interesting trends and products I saw at the show.

DSLRs, Interchangeable-Lens Camcorders and Accessories

The DSLR trend was very much alive and well at NAB, but individual vendors dealt with it in different ways. For the first time, Canon gave over large portions of its booth to its DSLRs, even though it didn't make any new announcements. You could shoot video of models using 7Ds, 5D Mark IIs and 1D Mark IVs on tripods with cinema heads, alongside Canon's camcorders.

On the other hand, you'd be hard-pressed to know that Sony or Panasonic even makes DSLRs (or EVILs, or whatever acronym you want to use) from what they showed in their booths. However, Sony extensively featured its new F3 and FS100 camcorders that use the E-mount lenses designed for its NEX family of still cameras, as did Panasonic with its AF100 camcorders that use its Micro Four-Thirds sensor and lenses. Sony is clearly trying to make up for lost time against Panasonic; FS100s could be found in booths all over the show floor, even though it isn't officially shipping.

I sat in on a presentation by Gale Tattersall, the Director of Photography for Fox's "House", on Monday as he showed some of the footage shot using Canon 5D Mark IIs for last season's final episode. He stressed that price had absolutely no consideration in his or the producers' decision to go with the Canon DSLRs--it was the quality of the images and the flexibility that the cameras' small size gave for getting shots in extremely cramped locations. Tattersall was back in the booth on Tuesday shooting video with a Canon DSLR and handheld rig.

Every major lens manufacturer was showing prime lenses (and in some cases, zoom lenses as well) for DSLRs: Zeiss, ARRI, Thales Angenieux, Schneider, Cooke and Leica were all well-represented. The words "bargain" and "lens" usually don't go together, although Zeiss was recommending that DSLR users who find its CP.2 line of video prime lenses too expensive should consider using its still prime lenses for video work.

Anyone interested in DSLR rigs could find them in abundance on the show floor. Zacuto, Redrock Micro, Ikan, Cinevate, Genus, D|Focus, Jag35 and Shape were exhibiting, and most of their booths were jammed when I visited. Competition for rigs, follow focuses and viewfinders is intense, driving prices down and product variety up.

In fact, that last sentence could be a summary of the entire market for DSLRs and related products. You can start with a body, such as a Canon T3i or Panasonic GH2 for under $1,000 (U.S.) and add components as you need them. Lenses can be rented as needed and purchased over time. In fact, you're probably better off not buying the top-of-the-line in any component (with the exception of lenses), because prices are falling and capabilities are being added so fast that what's "top-of-the-line" today will be significantly less expensive a year from now.

On-Camera Recorders

Companies such as Vitec's Focus Enhancements and AJA Video have made on-camera recorders for a number of years that are designed to supplement or replace tape and flash memory, enabling longer record times and more reliability. Record times are a particular problem with some DSLRs that permit as little as seven to 14 minutes of recording at a time onto flash memory cards.

At NAB, we saw the next wave: Low-cost, high-resolution recorders that do double (or triple) duty: They also serve as viewfinders and, in some cases, compressors for immediate ingest into editing systems. Here are a few examples:

• Atomos' Ninja can convert 8- or 10-bit HDMI video and audio, compress it on the fly using Apple's ProRes codec, and store it on any 2.5" SATA hard drive or SSD. It's also got 480 x 270 display that can be used for monitoring or playback. U.S. list price is $995.
• Atomos' Samurai has the same basic design and capabilities, but it has a HD-SDI interface instead of HDMI, an 800 x 480 display, and improved audio monitoring capabilities. U.S. list price is $1,495.
• Fast Forward Video's SideKick comes with both HDMI and HD-SDI interfaces, can capture uncompressed 8- or 10-bit 4:2:2 video at up to 220Mbps, can compress on the fly to Apple's ProRes codec, and has a 480 x 272 display. It uses the same 2.5" SATA SSDs as Atomos (it doesn't support hard drives), but unlike Atomos, FFV ships the SideKick with a 128GB SSD, so it's immediately usable right out of the box. U.S. list price is $2,495.00.
• Convergent Design's Gemini 4:4:4 has both HDMI and HD-SDI interfaces, and records 8- or 10-bit 4:2:2 or 4:4:4 video at up to 280Mbps onto one or two (hence the name Gemini) 1.8" SATA SSDs. Video and audio can be recorded on both drives simultaneously (for safety) or can span the two drives for longer recording times. The Gemini also has some sophisticated processing capabilities, including over- and under-cranking and the ability to apply 1D user-definable LUTs. It has a 800 x 480 display. U.S. list price is $5,995.00.

One final option: If you don't want a built-in display or compression, Blackmagic Design introduced the HyperDeck Shuttle, which has both HDMI and HD-SDI interfaces and stores uncompressed 8- or 10-bit 4:2:2 video onto a 2.5" SATA SSD. The SSDs slide into and out of the HyperDeck easily, so they can be swapped in the field. Recorded SSDs can be plugged into any external eSATA or USB dock, leaving the Shuttle mounted on the camera. Best of all, the price of the HyperDeck Shuttle is only $345. (Blackmagic Design introduced so many new products that I'll be covering their announcements in a separate post.)

Lighting

If there was any question that LED lighting has gone mainstream, this year's NAB settled it. Every lighting manufacturer I saw on the floor had LED models. Vitec's Litepanels remains the model for most of the industry, although no one has yet cloned their Sola LED Fresnels. "Clone" is a good word for a lot of the LED lights, especially knock-offs of more-expensive designs built by Chinese manufacturers. There were a number of clones on the floor that are variations of the tunable color temperature designs pioneered by Zylight and Litepanels.

Whether it's fixed color or bi-color, with or without dimming, competition is driving LED prices down into the range of fluorescent lights, and fluorescent prices have dropped into the incandescent range. The color quality of fluorescent bulbs continues to improve--especially compact fluorescents that can replace incandescent bulbs in existing fixtures with much less heat and power consumption. In fact, fluorescents are the best price/performance compromise for a lot of applications--similar power consumption and heat output as LEDs and a much lower price.

In Part 2, I'll review some new products from Blackmagic Design that will redefine customer expectations about what video technology can do, and more importantly, how it should be priced.

Free exhibit pass to NAB 2010, April 10th-15th in Las Vegas

Most of my readers are probably familiar with the National Association of Broadcasters' annual convention in Las Vegas, to be held this year from April 10th through 15th. It's the premier broadcasting technology conference in North America, and along with IBC, held every September in Amsterdam, one of the world's two top broadcasting conferences. This year, they'll have exhibit space dedicated to over-the-top video and IPTV on broadband networks, along with the show's usual focus on audio and video production and post-production hardware, software and services.

I've both spoken at and attended NAB over the years, and if you have anything to do with audio or video production, post-production or distribution, it's well worth attending. They're giving away free exhibit-only passes; to register, visit http://ow.ly/13TL9 or the main NAB Show website at http://nabshow.com/register with the code A913. (If you decide to go, I'd suggest that you register for a hotel room early; even with the poor economy, hotels tend to fill up quickly.)