PTV market faces new problems as regulators try to prevent "stupid tax"

Hello and Happy Friday! It’s all go – or rather stop – in the interactive TV market. As revealed in our new newsletter out today, Ofcom has pounced with some spot checks on broadcasters who run interactive services, demanding to see the audits that were supposed to be carried out last year.

Surprisingly, a large proportion of tier two broadcasters haven’t done them yet and have called in people to get them done… and what have they found? Most of these broadcasters would fail and Ofcom inspection.

It turns out that many of these companies – and none of them have been named, but it isn’t the ITVs of this world – just have bad processes in place. A lot of them state “terms and conditions apply” but don’t say what they are, many don’t have any process in place to show that picking winners is done fairly (though we assured that it is) and many have issues with when competitions actually close (is midnight on the 21^st 11:59:59 or 12:00:00, which is technically the 22^nd?).

There is also the ongoing problem that many of these companies agree how services will be run over the telephone with service providers, with no written record of who said what. Not in itself a problem, but could be an issue if someone does complain.

And that’s the issue you see: complaints. And refunds. Ofcom (and PPP) are being very tight about making sure consumers get refunds if they complain. All well and good, but it isn’t such a cut and dried issue is it.

Rumour has it that the much vaunted return of PSMS voting for TV shows by Christmas is now unlikely to happen – largely because the rules as they now stand insist that anyone who complains that their vote was charged for and not counted gets a refund.

All well and good, but what about those people who, despite repeatedly being told that the lines are closing at a certain time, still send it a text vote? Surely there has to be some leeway?

This is going to be a hotly debated issue over the coming months – and one which through our many outlets we intend to cover in detail – and is likely to continue to drag out the continued closure of a potentially massive mass market interactive service.

It seems to me that, while something certainly needed to be done about the scams in the PTV world, we have – as ever, once the regulator is provoked into action – ended up with something too draconian to work. And everyone loses: the TV companies, the SPs, the telcos – and most importantly the consumer, in who’s name this is all being done.

It’s an age old question about regulation: how do you tackle the fine balance between protecting people from unscrupulous practices and protecting them from their own stupidity. Personally, I think “stupid tax” is the way to go, but what do I know?

Apps really are here to stay – and could save telemedia

Hello and Happy Friday! The news this week that independent apps store GetJar has surpassed the 500million download mark is remarkable news. For all the naysayers out there who think that apps are a passing fad, this does tend to show that mobile users the world over do want apps.

GetJar is not only flogging apps in the UK and US either – there is a growing market for them in development markets such as India and Indonesia where they offer the chance for users to do all sorts of things that we in the west take for granted with our PCs on their mobiles. They make use of the processing power in the phone, you see, not what your MNO offers you via its network.

Sure, there will always be a role of online content and services, as well as the mobile web offering a great opportunity for delivering content, services and so on, but apps so far tick all the boxes. GetJar believes that the two will happily coexist, but that apps have a distinct advantage to users the world over – certainly for the foreseeable future.

You see the thing about apps is that they reside on the handset; mobile web services, in a cloud, reside on a network – and networks are always way less advanced than the handsets that sit on them. This is why, until the networks bridge the generational gap between themselves and handsets, the more apps will become a dominant business model for getting sophisticated content and services out to people.

Apps are also much quicker to develop, test, disseminate and update. And with the advances that are coming along in terms of in app advertising as launched by 4^th Screen this week and in-app billing as rolled out by Netsize, the telemedia industry is certainly backing the apps model.

I am sure that as things improve in the networks around the world, the industry will also start looking at how to exploit the mobile web (as discussed at last week’s AIME seminar), so the future is bright for mobile users…

… so long as the networks play ball. For there is, as ever, a fly in the oinment. Both the apps store model and the m-web model basically mark the first tentative step in turning network operators in to smart pipes, rather than content companies – a move that MNOs themselves have started to (grudgingly?) embrace: witness Vodafone announcing the end of its Vodafone Live! brand as it shifts more towards an open web portal to be called My Web. But that in itself is going to be a huge challenge for network operators.

A report out this week by analysts Ovum suggests that – surprise, surprise – the MNOs are already starting to over-hype the fact that they want to now be smart enablers. What Ovum suggests is that this move is not going to be a commercial magic bullet, rather it will be a hugely challenging cultural shift – and some won’t survive the transition.

What operators need to embrace, says Ovum, is that their networks, connections, customer data and all there other ‘assets’ are commercial propositions that they need to share with third parties to get value from in a smart pipe world: a major shift in how they look at what they do that some may not be able to embrace.

In the meantime, I suspect that the third parties that Ovum sites (that’s you telemedia!) will get on with making apps work, monetising them and embracing the raft of new alt.billing mechanisms that are coming on line and perhaps we won’t need smart pipes at all, just wi-fi. Who’d want to be an operator these days eh?

German SMS market in crisis

Hello and Happy Friday! In a week when AIME publishes its 12 step programme for termination providers (TP) to mitigate the punitive impact of PPP’s mad regulation that seeks to punish the carrier of a dodgy service rather than the service itself (and charges them for the pleasure of policing this policy), news reaches us that, for all the turmoil in the UK market, we must all spare a thought for our German counterparts: they are having a really torrid time.

Late last month a dodgy SMS chat service run by a company called MintNet got picked up by the regulator for purporting to connect users to real people’s mobile numbers for saucy chat, when really it was putting them through to an agent at the end of a PRS number. OK, not very nice, but pretty basic stuff.

However, the scam has unleashed a deluge of regulatory stick waving and, in turn, a massive underwear-browning among service providers, TPs and network operators about what they can and can’t do with SMS chat in Germany. As a consequence, the German SMS chat market has pretty much collapsed overnight.

German regulators and the government have introduced drastic new regulations overnight, which compel service providers to categorically state not only the price of services, but also whether they are being connected to a real person or an agent. While this takes some of the mystery/fantasy out of the process for the punters, the real issue is that ads for these services will have to physically be bigger than before, costing a lot more money. And this the industry can ill afford.

While this is bad news for the chat sector, the vortex that this seemingly minor incident has created is sucking in everything from TV voting to voice chat services. The industry has got the willies across the board as to what they have to state regarding services, charges, minimum charges and so on. As a consequence mobile is being forced out of the interactive TV space and other services are under growing pressure. And all this at a time when economic woe is mounting.

Companies have already started going to the wall and the industry, through its union FST, is lobbying the government – both at a state and a federal level – to at least give it some time before introducing more regulation: at least until things pick up. Network operators are behind them, but with federal elections coming up in September, there is every chance that this will become a political football.

Here in the UK we have had our fair share of regulatory issues – heck, you STILL can’t use SMS voting on TV (for now) – but could the UK market face similar issues to what is happening in Germany?

Things seem reasonably stable in the UK regulatory environment currently. AIME has its 12 point guidelines which has attracted some industry buy in already and the MEF has set up a series of regulatory workshops to help the industry help PPP develop its next code of conduct. So far, so stable.

My worry, though, is that as times get hard and Quangos such as Ofcom and PPP seek to justify their existence they will increase regulatory pressure. And the only place this can go is into things that it currently doesn’t regulate – that new fangled Internet thing. Perhaps we are facing our winter of discontent along with the Germans? Anyway, more on this in the coming weeks and look out for an in depth piece in the next issue of Telemedia magazine out in September.

From next week, these weekly missives you have been receiving will be posted on our website as a blog, so check that out from next week at www.telemedia-news.com. Have a good summer!

Regulation: time for a change?

Hello and Happy Friday! As Chancellor Alistair “Move Over” Darling seeks to stiffen the regulation of the Financial Industry, leader of the opposition, David “Dave” Cameron has been calling for the curtailing – or at the very least streamlining – of Quangos (Quasi-Non Governmental Groups, or “Regulators” as we know and love them) to save the public money.

One of the key Quangos singled out by Cameron has been Ofcom, which he perceives as being over staffed, possibly over-reaching in its scope and frankly overpaid – Cameron reserving particular ire for Ofcom head Colette Bowe, who at £200,000pa for a three day week, earns more than the Prime Minister: a gripe guaranteed to chime with all politicians as they get used to having fewer tax-payers readies to bandy about on duck houses et al.

But beyond the obvious political machinations that Darling and Dave’s contrasting views on regulation, possible prime minister in waiting Cameron may have hit on something. Its not news that the telemedia industry isn’t a fan of regulation (which business sector is?), but telecoms is in a particularly strange position in terms of regulation, having as it does sets of national, European and global regs to content with – many of which apply in unison and contradict each other.

The problem with regulatory overlap – and, indeed, regulator over burdening – has been brought to the fore this week by Mobile Entertainment Forum (MEF), which has talked to its members and found that the UK mobile media market currently faces the most regulations of any country in the world and is tying itself in knots over which ones take precedence over others. And if that wasn’t enough, there are even more in the pipeline.

Currently, says the MEF, the UK telecoms industry is subject to the following consultations on yet more regs: BCAP/CAP consultations [recently closed]; Ofcom scope review [currently open]; Ofcom Audience Participation in Radio Programming – the use of PRS [currently open]; Ofcom Broadcast Codes Review [currently open]; PPP Discussion paper on next Code [currently open].

All this offers reinforcement of EU rules (both current and pending), as well as delivering new regs that apply to operations in the UK. Between them they lead to confusing messages as to what regulations telemedia firms need to obey. For example, some of the proposed changes to the CAP/BCAP Codes clash with the PPP Code.

Then there is the issue that in the UK we also have a range of bodies, all of which claim some jurisdiction over what the industry does: Ofcom, the ASA, PPP, the OFT and the ICO all have Codes or regulations that apply to the mobile media industry. Any ambiguity is likely to cause serious regulatory uncertainty and as a consequence, the regulatory burden on companies that run the serious risk of becoming disproportionate.

All this is a mess. But a mess that fits very neatly with what I wrote about the week before last: while all this ‘telecoms’ regulation is being superseded anyway. While the old skool telecoms regulators try and fit the square peg of current services into the round hole of their old way of looking at telemedia, the industry is moving on, looking to use IP-based technologies over the web (which is fixed and wireless these days) and is, as such, dodging current regulatory thinking.

The MEF believes that the current Ofcom scope review may well address this, I wonder whether, as the political will in the UK shifts towards cutting public spending, whether we may just miss a massive regulatory shake up. If that is the case, then we could see a burst of innovation in the telemedia sector in the coming months. If, on the other hand, we see a last gasp attempt by the old world to regulate the new, we may end up with a badly fitting regulatory environment that stifles innovation at a time when we really need it.

Welcome to Telemedia's new blog

Ever keen to keep up with the modern world, Telemedia-news is blogging. Instead of getting your weekly missive emailed to you on a friday (sooo 2007), we are blogging it each Friday – and in between when there are things that really need to be said – and pushing links to it through our presence on Facebook and of course Twitter... and whatever else comes along between now and when we decide to do something else.

The move to blogging not only reflects that fact that we think that its more in keeping with the world we operate in today, but also gives us the flexibility to comment on what is going on in the industry with greater agility. Moreover, it gives you, the telemedia community the chance to comment and interact with us, your fellow readers and the wider telecoms world.

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