Service and business model innovation seemed to be the theme in residential video this week, kicking off with the news that AT&T is adding out-of-home access to live programming to its TV Everywhere strategy. The U-verse application already offers the ability to watch more than 100 channels on iOS and Android (News - Alert) devices and via the Web when within the home zone, but now a limited number of channels will also be offered when on the go. CMO for AT&T Home Solutions, Mel Coker, talked about the benefits of the new upgrades in a recent release, saying, “By making live TV content available across devices we're enabling our customers to watch TV on their terms when and where they want it. U-verse has always been about delivering a TV experience built around our customers, and this enhancement gives them even more flexibility and control.” In addition to live television programming, the out-of-home aspects of the application now give access to movies and television shows on demand, as well as work as a replacement for the regular remote. Customers will be able to search for shows on their tablet or smartphone and direct their DVRs to record programs they want to save for later.

Such perks are becoming increasingly important as over-the-top (OTT) video content continues to make headway. OTT, delivered on connected devices using the Internet, has become the most prominent way of accessing video content among those 18- to 34-year-olds who also have connected TVs, according to the NPD Group. About 75 percent of those 18- to 34-year-olds report watching OTT services, such as YouTube and Netflix. But, 68 percent also use their connected TV to watch programming from their cable, satellite, or telecom TV provider. The big takeaway there is the preference, though still relatively small, for non-traditional programming sources. That apparent preference for OTT video from non-traditional outlets might be the key finding. What remains less clear is whether it is unique or differentiated OTT content providing the value, the on-demand availability or some other combination of factors. In the case of YouTube, unique content is key; for Netflix on-demand access to movies and older TV series, content likely is the main draw.

OTT options continue to proliferate and grow as well. For instance, take Aereo, the Barry Diller-backed over-the-top video streaming company, which has won a legal challenge in Boston, just as it undertakes a new challenge in Utah. Aereo is facing lawsuits from content companies and broadcasters that are claiming copyright infringement because they allege that the company retransmits local TV affiliate feeds via the Internet without paying retransmission fees. Aereo has counter-argued that because it provides dime-sized antennae to its subscribers—who pay $8 per month for access to a couple dozen channels—it constitutes an over-the-air, rabbit-ears based service, which is exempt from retrans. In Boston, Federal Judge Nathaniel M. Gorton issued a ruling in the United States District Court for the District of Massachusetts denying plaintiff Hearst Stations (WCVB-TV) its motion for a preliminary injunction against Aereo. In his decision, Judge Gorton concluded, “After considering the relevant factors, the Court finds that a preliminary injunction is unwarranted. Hearst has not demonstrated a sufficient likelihood of success on the merits nor the requisite irreparable harm and therefore it is not entitled to that ‘extraordinary and drastic remedy.’” Meanwhile though, Fox Broadcasting Co., Sinclair Broadcast Group and Local TV filed suit in federal court in Utah against Aereo in U.S. District Court. The plaintiffs in Utah said that "no amount of technological gimmickry by Aereo changes the fundamental principle of law that those who wish to retransmit copyrighted broadcasts may do so only with the copyright owners' authority."

With OTT heating up and video subscriptions declining for cable MSOs, traditional triple-play operators are looking beyond their basic set of services for new revenue opportunities. For instance, the ability to control home systems using a smartphone or tablet is becoming a new line of business for U.S. cable TV companies and telcos as legacy services become less lucrative over time. Infonetics (News - Alert) Research found that 70 percent of the operators will offer home automation services by the end of 2013. And there’s plenty of opportunity: Marketsandmarkets.com said that the global home security solutions market is expected to grow from $20.64 billion in 2011 to $34.46 billion in 2017 at a compound annual growth rate of 9.1 percent from 2012 to 2017. One new wrinkle is the provisioning of these services in an over-the-top fashion, divorced from carrier networks. “One of the more interesting trends we’re seeing in the home automation market is the concept of a provider offering services to end customers over another operator’s broadband connection,” said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research (News - Alert). “Verizon has been experimenting with trials of over-the-top (OTT) home automation services as a way to secure revenue from out-of-market customers.” Infonetics predicts that by 2015, the percentage of operators offering OTT home automation services more than doubles.

Eyeing the lure of enterprise service revenue, Time Warner Cable Inc. announced that it had reached a definitive agreement with Duke Energy (News - Alert) Corp. to buy fiber-based carrier DukeNet Communications for $600 million in cash. The payment includes the repayment of debt. It is expected that the new transaction will close in the first quarter of 2014. DukeNet is a regional fiber optic network company based in Charlotte, N.C. It serves customers in North Carolina and South Carolina, as well as five other states located in the Southeast. Its optic network stretches 8,700 miles and provides data and bandwidth services to the government, data center, enterprise customers and wireless carriers. "Business services is a key growth area for Time Warner Cable and this acquisition will greatly enhance our already growing fiber network to better serve customers, particularly those in key markets in the Carolinas," said Phil Meeks, COO of Business Services for Time Warner Cable. The company reported a stronger second quarter earning amidst higher business service revenue in August.

Of course, for pay-TV operators, advertising is still a big cash cow. And when it comes to television ratings, it would be nice to leverage a next-generation set-top box (STB) to monitor exactly what everyone is watching, all the time. But technology hasn’t caught up with the wish-list, and ratings measurement is still often conducted using self-reporting via diaries and phone surveys. The actual sample sizes used for determining ratings tends to be fairly small too, so statistical accuracy is the key to effectiveness. But whether the samples are actually representative of the viewing public remains a question. “No one has ever asked me to write down what I watch,” you may hear someone say. And anecdotally, how many people does the average person know who have been tapped to provide TV viewing information to Nielsen? The Council for Research Excellence (CRE) just completed a two-year project to evaluate sample quality for ratings measurement, and found that those that contribute to the measurement database are not necessarily representative of the U.S. demographic makeup, particularly when it comes to age and ethnicity.

Looking for a better way, Kantar Media is introducing an advanced television audience measurement service that provides precise second-by-second data projectable to a national footprint of nearly 100 million households representing subscribers across Multichannel Program Distributors. Officials with Kantar Media said that the syndicated service, Kantar Media Audience (News - Alert) Advisor, utilizes second-by-second Return Path Data (RPD) from more than one million multiple provider households to provide deep insights into consumer viewing behavior, including program engagement and commercial ratings. “Audience Advisor is a natural evolution of the audience measurement work that Kantar Media began when it pioneered RPD for analysis of television viewing behavior,” said George Shababb, president of Kantar Media Audiences. Earlier in September, Kantar Media announced that it is rolling out the first in a suite of applications to enable broadcast audience data to be viewed on mobile devices.

Have a great weekend!