ABI Research says "placeshifting" technology could threaten mobile services

ABI Research says “placeshifting” products, such as the Slingbox and Orb Networks, could adversely effect cellular video services as subscribers stream/download videos to their phones without using the cellular operators’ content.

The research firm discusses its conclusions in its study, “Placeshifting Hardware, Software and Services.”

Placeshiftng has been a hot topic among cellular operators and techie analysts/journalists. 

From techie to mass market

The Slingbox hardware and Orb software are still relatively esoteric but the operators already are upset that some subscribers are transmitting and receiving large amounts of data under what the operators have called — falsely, apparently — “unlimited” wireless data plans.

Indeed, the Wall Street Journal yesterday discusses this issue, reporting that, “Leading U.S. wireless operators have spent billions of dollars to offer consumers the ability to connect to the Internet on the go, but now that such services are gaining popularity, the companies are taking steps to make sure subscribers don’t use them too much.”

The article notes, “The wireless carriers say they are taking this approach because cellphone networks, which transmit signals over radio waves, inherently have far less capacity than land-line networks.”

ABI says…

The research group’s press release notes, “The ability to stream pay TV from a set-top box and digital content from a home PC over the Internet to a variety of devices has the potential to disrupt new content services being delivered by mobile operators.”

Michael Wolf, principal analyst at ABI, says in the release, “With placeshifting, we believe the biggest opponents will be mobile operators who see these solutions as rogue network applications that could potentially paralyze their cellular networks, as well as keeping consumers from paying for mobile video offerings being offered over new mobile video networks.”

The good news, according to Wolf, is that placeshifting products could be used as servers as well as client software in wireless devices. 

“ABI Research believes that mobile clients will see some of the strongest adoption of placeshifting capabilities, as smart phones and Wi-Fi-enabled mobile media players integrate the technology to enable streaming of live TV and digital music.”

Resistance is futile?

The press release says, “While some carriers will resist placeshifting, others may see it as a way to capture additional ARPU.

“Video service providers may also see placeshifting as an additional service revenue opportunity, in much the same way that they charge for PVR services today, while some wireless carriers may support placeshifting as a way to sell more high-end data plans.”

There’s no doubt in my mind that increased use of data is an incentive for cellular subscribers to purchase unlimited (but what is “unlimited” to a cellular operator?!) data plans.  Indeed, if you look at some of the wireless podcasting sites, as an example, you’ll see they strongly encourage unlimited data plans for people who want to stream or download podcasts.

Serious issues

While it’s easy to lambast the cellular operators, it’s also important to understand that the operators don’t have unlimited bandwidth.  But now that the “unlimited use” plan is out of the bottle, how should the wireless industry deal with it?

Perhaps one way is for operators to consider changing the name of the plan from “unlimited” to “high use” with bandwidth limitations.  For most users, “high use” probably is “unlimited.”

But a minority of users will exceed the “high use” and have to be charged or have their service terminated.

What to do?

I test lots of cellular phones and almost always don’t have to pay for airtime charges.  I do enjoy watching live and archived television programs and videos as well as listening to podcasts.

I use phones as modems when I don’t have access to a broadband landline or WiFi connection.  When I use the modem capabilities the same way I use those two other connection methods, including streaming music and watching videos.

With 1xEV-DO, there’s generally no performance problem watching videos, including, I seem to remember, all the episodes of a PBS series on quantum mechanics (“The Elegant Universe”)  as well as Nova Science Now programs.

Congestion woes

I certainly would pay for unlimited access.  But I wonder whether my single-person usage would sometimes raise an alarm with the Cellular Bandwidth Police.

For years — more than two decades, actually — I had been been waiting for “The Year of Wireless Data.”  Well, it’s already here and the wireless industry is trying to wrestle with “problems” (i.e., lots of use) that many years ago it dreamed about having.

I remember cellular operators laughing about how they would “love” to have the problem of coping with so many wireless data users that they adversely effected the network.  Well, now they have that problem and any heavy-handed tactics are going to land them in hot water.