Gary Arlen's blog

Theater Owners Pressure Comcast To Abandon $60 Premium VOD Test

Comcast customers in Portland, Ore. and Atlanta may not get the opportunity to spend $59.99 to watch Tower Heist in late November.

Regal Theaters has joined the Cinemark movie chain, threatening not to exhibit the Ben Stiller-Eddie Murphy action comedy if Universal Pictures (now a subsidiary of Comcast) goes ahead with its plan to offer the movie as a premium video-on-demand feature just three weeks after its November 4 theatrical debut.

Universal may withdraw the plan this week, according to a savvy Washington entertainment insider who was privy to the negotiations. The two big chains control about 60% of U.S. theatrical screens.

Moreover, Comcast’s announcement last week of the Thanksgiving weekend VOD screening apparently riled the film’s director Brent Rattner; he had opposed previous plans for VOD offers that cut into the traditional three-month theatrical release window before DVD distribution. Although Universal claimed that Rattner had approved the early Tower Heist VOD release, Rattner now says that the first he heard of the plan was when the studio announced the deal, according to my sources.

Corporate executives didn’t return calls seeking comment over the holiday weekend.

About 500,000 Comcast subscribers in the two cities would be able to buy the VOD movie and watch as frequently as they (and their families and guests) cared to see it during a 48-hour purchase window. The very high price for a movie that has not yet been reviewed was double the $29.99 that DirecTV tested in April for an Adam Sandler movie, Just Go with It. Buy rates for that venture have never been revealed, suggesting that viewers didn’t care to pay that fee for a lackluster film.

When Universal announced the Comcast $59.95 plan last week, it said, “This experiment will allow the two companies to sample consumer appetite for this film in this window at this price while allowing the film to achieve its full potential at the box office.”

Universal has even indicated that it would seek a way to compensate theatres for revenue lost to the VOD delivery, although no details are available about the compensation process. Theater owners are also worried that cable home viewing of a three-week old movie during the Thanksgiving weekend would keep audiences away from theaters to see other movies they are showing at that time.

Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

Steve Jobs = Leader; We Need More

In the pre-obituary tributes to Steve Jobs — a month ago when he resigned as Apple CEO and we all knew that the end was near — one memorable homage quoted him as saying that he saw his role as “leader.”

Not a manager or chief executive, but “leader” - a term that is bandied around all too frequently in the media-telecom-political-tech world, but is rarely applied accurately.

As many of today’s Jobs’ testimonials acknowledge, the Apple co-founder was a tough, opinionated decision-maker. He was an inspiration to many. He was not focused on the next financial quarter, but rather he was a visionary who was comfortable committing to a long view.

For many years, I’ve lamented the disappearance of iconic “leaders” in the media and telecom industries. Not that we need too many Murdochs, who are household names. But it was grand when the industry had “Malone” and “Turner” to inspire (of instill fear) - and to let the world know what was coming next in cable. No individual should or can speak for the whole industry (OK, maybe the lobbyists think they can do that). But true leaders’ visions can build great enterprises, and they lend a face to put with those ventures. Let’s see if “Pittman” brings a face to Clear Channel as he did, sort of, at MTV and AOL, but not so much at Century 21 Real Estate or Six Flags.

It’s not that the current crop of media CEOs isn’t up to the tasks they face. And it’s not necessary for them all to attain household name status. Yet the complexity of the new media/telecom eco-system would benefit from a few identifiable leaders. The tech sector rode high on names such as Gates, Ellison and Grove during its climb. Now Sergey and Larry at Google are the closest thing that Silicon Valley has to human faces.

The entertainment/communications/information sector was built on names who epitomized their companies and the business they were in: Hearst, Pulitzer, Luce, Sarnoff, Paley, Fox (William, the original studio mogul), Zanuck and the brothers Warner. Customers knew who they were back in an era which didn’t have the kind of business or social reporting we see today. Yet, these leaders were familiar “brands” and customers knew what they were getting — like it or not — from those tycoons’ companies.

Most important, they (or their promoters) created a legendary presence for themselves and their products. So did Steve Jobs.

Jobs never paid much attention to the cable industry. Unlike Gates/Microsoft, Jobs never tried to buy his way into the industry. There was once an Apple cable set-top box prototype, which may have been Jobs’ experiment in feeling out the cable industry - and then leading his company elsewhere. Does anyone think that if Apple actually produced an STB, it would carry a co-branded label or that customers would think of it as device from their faceless MSO?

There’s a lot written about business (and political) leadership these days. I’ll remember Steve Jobs as the leading representative in a world that needs more true leaders who earn public respect for what they accomplish and what they envision.

Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com

That's Right: Just Keep Regulators More Clueless Than They Already Are

Imagine a trade show where tech-policy issues are being discussed, but no government policy makers are allowed into the hall. That’s a likely result of the plan proposed by the Office of Government Ethics, which seeks to keep lobbyists as far away as possible from the civil servants who regulate their industries.

More specifically, the proposed “Standards of Ethical Conduct for Employees of the Executive Branch” would extend restrictions on federal employees, who would be barred from attending events where registered lobbyists are present. The standard would cut off attendance at “widely attended events” such as trade shows like the annual cable TV conventions and at smaller showcase events in Washington and on the road.

In a politically well-intentioned, but economically short-sighted move, the White House is plugging gaps in the “Ethics Commitments by Executive Branch Personnel” (Executive Order 13490), which were posted on the first full day of the Obama administration in 2009. The only exception to the new plan would allow public officials who are speaking at a meeting or conference to attend other sessions and visit the trade show floor.

The OGE proposal obviously and instantly raised ire on K Street. Even the advocacy group Common Cause, which endorsed the overall concept, conceded that the proposal to bar trade show visits (along with new prohibitions of gifts valued at less than $20) avoids the biggest problem in the regulator/legislator/lobbyist relationship: campaign contributions. The proposal also offers few clues about how any of these limitations will be enforced.

Although the major cable lobbying associations had no immediate comment on the OGE proposal, the Consumer Electronics Association - like many other technology-oriented groups - came out swinging against it.

“The present White House restrictions on political appointee participation are embarrassing, problematic and not helpful to our hosting responsibilities,” said CEA president and CEO Gary Shapiro, referring to the existing limits on federal employee attendance at the big International Consumer Electronics Show and at CEA’s DC-based tech events. “Extending this requirement to career civil servants would deny government employees the ability to learn about what is happening in business, forge relationships and understand how their actions impact jobs-creating businesses.”

The self-serving opposition of associations, media companies and even any “scientific organization or learned society” (which are also are covered by the restriction) is understandable and appropriate. OGE’s valid anti-lobbying objective off-sets the educational value of acquainting regulators with the complexities of technology and systems. Sure, there is plenty of room for abuse in regulated industries ranging from energy to pharmaceuticals to transportation to communications/media. But in the decades I’ve rubbed shoulders with good civil servants, I’ve also found a huge appetite on their behalf to see how things work, to touch and feel the systems they’re supposed to oversee.

Technology is a “show, not a tell.” The best descriptions and schematics in legal filings rarely make up for a few minutes in front of the device or a walk-around the actual hardware and system software, even amidst the hubbub of a trade show floor. The ethics proposal should include more “exceptions” that will allow guvvies to get up-close to the technologies they oversee. Regulated companies and, more importantly, their consumers will benefit from the increased knowledge of the civil servants who decide on how systems should operate.

To put a blanket prohibition on seeing how things work paves the way for clueless regulation. Which is exactly what we don’t need in the new economy.

Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

TV War: Microsoft Vs. Apple

Silicon Valley has been abuzz for more than a week about two separate approaches to TV.

Microsoft confirmed that it will introduce a TV product before this Christmas shopping season, while rumors about an Apple TV set (not just a Web-accessible set top box) escalated, with most speculation focused on delivery for the 2012 holiday season.

Among many other questions, a fundamental curiosity about these two story threads evolves: Exactly what is television?

For both Microsoft and Apple, the core opportunity is packaging and selling access to video content, including on-demand IP programs and conventional linear shows. It’s not necessarily about TV sets as we now know them.

In Apple’s case, of course, there is the possibility of an actual TV tuner/receiver, certainly achievable for a company that already manufactures (via contractors’ factories) plenty of flat-panel display monitors for its computer business. The necessary video reception components can easily be embedded behind such screens.

For Microsoft, which is fundamentally a software, not a hardware, supplier, building and selling TV sets is far less likely. That’s why the latest Microsoft TV venture focuses on using the company’s Xbox 360 game console as the access device and its poplar Kinect gesture-controlled interface as a navigation tool.

While it’s tantalizing to ponder going into a Best Buy or Wal-Mart store next year for side-by-side comparison shopping of an Apple or Microsoft TV set, that’s unlikely scenario. The current rumor mill is pointing to plenty of differentiating evidence, such as Apple’s recent patent on “no-glasses” 3D and Microsoft’s deal with Jinni for program search and discovery across platforms. Such features will make comparisons even harder at the hardware level. Microsoft’s recent alliance with ESPN3 to showcase college football games exemplifies the kind of deals Microsoft will make to line up popular programming for Xbox delivery.

Apple can build on its massive library of titles sold (rented) through its App Stores. Among the “knowing” details (i.e. guesswork) are suggestions that Apple would aim for the small- and mid-sized TV market (let’s say 20-inch monitors give or take 5 inches), targeted at dorm rooms or kitchens, and thus not competing with Samsung, Sony, Vizio or Panasonic for the main large-screen TV set in the home. Apple’s TV would run a variant of the iOS operating system.

For Microsoft, if it opts to get into the TV monitor business, it could work with Samsung or Panasonic, among others, where it already has relationships based on TV Apps and tablet technology.

On the other hand, skeptics contend that the notoriously low-margin consumer electronics commodity category will not appeal to Apple, despite the obvious embrace it would receive from fan-boys, who cannot resist any device that carries the pomaceous fruit logo.

Fueling Mircosoft’s TV initiative is the strength of its rug-top box: More than 55 million Xbox consoles are in homes around the world, and in less than a year, 10 million Kinect peripherals have flown off shelves.

In today’s fluid environment, with NetFlix and countless other broadband video sources plus the rise of TV Apps now appearing on “smart TV” sets, the looming arrival of Apple and Microsoft could become game changers - especially if their credibility encourages more viewers and Web surfers to cut or trim their cable cords.

What makes this all so fascinating is the competition or collaboration with exiting cable operations. Microsoft has been negotiating with MSOs for years, seeking in this case to let customers access programming they pay for via the Xbox receiver, not just the traditional set-top box. Apple historically disdains cable operations.

To make the upcoming year even more complicated, these Apple and Microsoft adventures into TV will come just as Google - burdened by its own failures to launch Google TV - begins to integrate its Motorola acquisition. It all gives deeper meaning to the concept of a “new TV season.”

Don't Believe Everything on the Web

You knowingly scoff at people who believe everything they see on the Internet, especially those who naively still say, “They wouldn’t post it if it weren’t true.” Yes, you - and everybody should - know better than that.

Yet the ongoing outbreaks of disinformation and pure lies (usually indistinguishable) can affect the strongest media organizations. It’s a reminder of the complex evolving digital culture and further evidence that the immediacy of electronic communications opens the door to egregious errors.

The latest flare-up involved CBSNews.com, which since May has hosted the Web series “What’s Trending,” independently produced by Shira Lazar Productions and the Disrupt Group, which Lazar co-founded. On Thursday, the group Tweeted that Steve Jobs was dead, “news” that immediately flew through the blogosphere. If you didn’t look closely, the Tweet looked like official CBS coverage, giving it an imprimatur of reality. With many apologies from both Lazar and CBS, the posting came down quickly, and the next day CBS cut off its relationship.

The Lazar incident comes in the midst of a veritable digital death watch over Steve Jobs, including a macabre, and frankly creepy, site which answers the question “Is Steve Jobs Dead?”

On Friday, as CBS was purging all Lazar connections, the NBC News Twitter account was hit by a massive hack attack. For a few minutes, until NBC officials caught the false Tweets and took them down, the feed said that a commercial airplane had crashed into New York’s Ground Zero area. Again the timing of the message, during the tense build-up to the memorial weekend, triggered a blogosphere explosion of its own.  The FBI’s cyber-crimes unit is investigating the case. The network had to issue apologies for something it had not done. NBC Nightly News anchor Brian Williams offered an explanation on Friday night’s newscast.

NBC says that “Script Kiddies,” anonymous computer pranksters split off from earlier hacker groups, was responsible for Friday’s Twitter hacks. Script Kiddies acknowledges that its main goal is to embarrass news organizations. In July it hacked into Fox News’ Twitter account.

Last week’s cases - the Jobs story apparently from ignorance and the NBC Tweets for malicious purpose - offer a warning of what’s to come as social TV provides even more platforms to encourage viewers and get out the word, even if it is the wrong, or dangerous word.

And it doesn’t merely apply to news. Today’s contentious business environment, especially in the media and telecom sectors, provides bad actors with plenty of opportunities to spread “faux news.” Moreover the encouragement of user-generated content for local and special-interest reports means that more untrained “producers” will pour their opinions and puff into the digital dialogue, often under the marquee of respected brands, such as yours.

Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

Ads Moving to Mobile: Where Does Cable Fit?

You know how much I disdain dueling data: those commissioned research reports that come up with whatever finding fits the financial or political objectives of the study’s sponsors.

Typically, competing interests come to completely opposite conclusions from their “independent” research. Contrarily, there are the mash-up gems that emerge from studies conducted for completely unrelated purposes.

By putting together the findings, you can come up with some valuable perceptions of where we’re heading - and, inevitably, generate a reason for even more studies.

Two reports that caught my eye this week: one about digital advertising migration from BIA/Kelsey and another from Yahoo! and Ipsos about the effectiveness of mobile ads.

The BIA/Kelsey study concludes that within four years, 70% of the ad spend by small and medium-sized businesses (which includes lots of local advertisers) will go to mobile, online and social platforms. More significantly, most of those digital dollars will come from current budgets for traditional media, including cable as well as broadcast, print and out-of-home advertising.

No matter how inflated this expectation for shifting funds from old to new media, the message is clear. Cable ad sales managers should start preparing for new competitors for local ad budgets. That means begin figuring out how to bring more of those online and social media ad buys into the broadband services that cable can deliver.

The Yahoo/Ipsos study poses a bigger challenge with its focus on “recall” and “engagement” of mobile ads, including location-based messages. The study finds that ads on smartphones generate extraordinary levels of awareness and engagement. For example, when a mobile user is in the midst of shopping, mobile ad recall is 65%. More than a third of smartphone users say they’d likely buy the product being advertised. The study shows similarly high levels of ad recall for information and entertainment content delivered via iPhone, Android and Blackberry mobile handsets.

That makes mobile a tougher ad market for cable to crack, since viewers are watching a home-tethered screen. Perhaps the proposed collaborations with mobile/wireless providers will give cable operators and programmers a better hook into the growing mobile commerce opportunity.

Meanwhile, another recent piece of Yahoo research offers a glimmer of hope. It indicates that one-third of “mobile” phone time is actually spent at home, often while watching TV. As Comcast, Time Warner Cable and other MSOs are finding - and trying to exploit - split-screen attention (simultaneous viewing of the TV set and the tablet or other wireless handset) may be the best way for cable operators to become part of the inevitable mobile juggernaut.

We’ll look into that.

Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com

Gang Way: 4 for the Apocalypse

Outlined against the blue-gray October sky, the Gang of Four is riding hard.

Within less than a fortnight, Apple introduced iPhone 5; Amazon shook up the portable screen world with its four new Kindles, notably the near-tablet-featured “Fire”; Facebook unleashed a slew of overhauls; and Google’s Zeitgeist conference included introspection about the impact of Google’s Motorola acquisition.

Ever since Google chairman Eric Schmidt defined this new-tech “Gang of Four” at the All Things Digital conference in May, I’ve been pondering the role of these new “titans of tech,” as The Washington Post characterized the fabulous four. The Post’s “collision grid” illustrated how the multi-billion-dollar behemoths are clashing against each other, adding to the business drama now playing out with countless implications on cable and other industries.

In his May remarks, Schmidt dumped the “old tech” gang of four - IBM, Intel, Microsoft and Oracle - into an historic murk.

That prompts even deeper thoughts into what distinguishes the new titans from the old. For one thing, the new four are primarily consumer-facing companies, brand names that customer bring into their homes. (Oh yes, there’s Intel “Inside” many products, but the only way to get it home is buy buying those devices.)

Among the previous gang, only IBM and Microsoft have products directly used by consumers. Oracle and Microsoft, along with many SiliVally old guard firms such as Sun and Silicon Graphics, tried to buy their way into the home via deals with cable TV operators for set-top box technology. We all know where those projects wound up. (Hint, for those who came in late: nowhere.)

The other major commonality amongst the new Gang of Four is their focus on wireless services and devices. All of their major products and projects creeping into the marketplace involve mobile and wireless capabilities. At the very least (and it’s a BIG “least”), this points customers toward the untethered world - as if most users need a push in that direction. The repeated reminders that wireless is dominant are a challenge to broadband operators still hooked on wired connections.

Even MSOs that are forging wireless connectivity relationships should realize they’ll be butting heads against convergence visions that the Gang of Four intends to control.

One more thing: although geographic location means little in today’s border-free ecosystem, all four gang members are based on the west coast: three in Silicon Valley plus Amazon in Seattle. In the former Gang, two were headquartered in SiliValley (Intel and Oracle), one near Seattle (Microsoft) and the other outside of New York (IBM). Most significantly in this tech-centric assault, all of the leaders operate far distant, intellectually as well as physically, from media headquarters in New York and, now, Philadelphia.

The new Gang of Four, “outlined against that blue-gray October sky,” may not be as terrifying as the 1924 Notre Dame “four horsemen, immortalized by Grantland Rice in his description of their gridiron victory against Army on October 18, 1924.

They may not be as horrific as the apocalyptic four horsemen of Revelations to whom Rice alluded in his famous report. Today’s tech Gang of Four may be as revolutionary as the Chinese radicals of the late 1960s who opposed Mao Zedong’s policies, thus inspiring the name for the British post-punk music group.

But today’s Gang of Four has the ability to affect the communications and information businesses in countless ways: setting agendas, establishing consumer relationships, directing policy debates, forging alliances. That can be as bone-crushing as that 1924 afternoon at the Polo Grounds. Cable operators and programmers, along with music, publishing and production companies, better suit up for a hellish battle.

As Rice observed about the Four, “in dramatic lore their names are Death, Destruction, Pestilence, and Famine.” We can now begin forming our opinions about which of those classic riders match the roles of Apple, Amazon, Google and Facebook.
Gary Arlen is president of Arlen Communications LLC in Bethesda, MD, and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

Picture This for Apple TV

Why should we believe Jean-Louis Gassée’s impressions about Apple’s plan for its interactive TV service? What’s so special about one man’s opinion about the much-hyped (much-feared?) Apple entry into the living room?

After all Gassée is merely another former Apple employee. True, he was president of the Apple Products Division in the late ‘80s and ran Macintosh development, a job previously held by Steve Jobs. More importantly, after a couple decades of Silicon Valley entrepreneurship, he’s now a venture capitalist, plugged into the ideas of digital companies pursuing video projects for America’s homes.

So it’s worth paying attention to the napkin scribbles that Gassée posted this week about the much-rumored Apple iTV plan. In his blog, Gassée - and his doodles - portray several ways that Apple will offer viewers an inexpensive way to bypass cable TV sAppleiTVubscriptions, dump their set-top boxes and still get most of their favorite programs via TV apps via an á là carte approach.

Admittedly, Gassée hedges his vision by acknowledging that Apple is unlikely to manufacture a TV set, but rather focus on its own set-top box, integrated with the apps being developed for iPad and iPhone devices. Nonetheless, he suggest that we “consider the iTV as a separate module …[that] would …’swallow’ the set-top box, DVR included.”

After examining several hybrid possibilities (including the one unveiled last year by Comcast, in which an iPad becomes the remote control and other functions for the STB), Gassée focuses on “channels as apps.” His drawings sketch ways in which handheld devices use Wi-Fi to control the iTV module.

“Not all channels will adapt equally well or equally quickly, but as ‘channel apps’ evolve, we’ll see new ways of using the medium,” he suggests. “Delivering channels as apps liberates our ‘viewing experience’ in two ways: It breaks today’s narrow channel delivery format and it bypasses the set-top box. … With channels as apps, all you need is a net connection (sometimes provided by the cable operator). You can throw the set-top box away.”

Gassée coyly acknowledges that “there’s the notorious ‘simple matter of implementation.’ Someone has to write the apps that encapsulate the channels. But once the movement gains strength and tools become widespread and understood, it will be easier than you might think. 500,000 iOS apps attest to the availability of institutional knowledge.”

At the heart of Gassée’s vision is a pay-as-you watch economic model - anathema to the cable industry, but not repugnant to the tens of millions of iPad, iPhone and Android device users today. Although he may not be channeling the precise grand plan of his long-ago boss Steve Jobs, Gassée does offer a convincing view of what’s coming next.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com

Bad Data: Return to Sender

In this era of supposedly sophisticated database management, it’s downright amusing (and costly to the sender) when I get a postcard like the one shown here. It’s addressed to my office in Bethesda, Maryland, and it comes from Discover. It presents an attractive offer to sign up for Charter’s triple play and lock in a good rate for two years.

Charter Discover postcardThere are only two problems: it’s a consumer offer coming to a business address, and I’m at least 160 miles from the nearest Charter headend, more than 300 miles from its closest cluster of systems.

That the snail-mail came from Discover is understandable: I have a Discover Business card, billed via this office address. But what a mailing list gaffe! I can only assume that many of my Discover-using neighbors (and maybe many others) here inside the Beltway got a similar Charter offer. Who knows how many others around the country got similar wrong offers.

I didn’t call Comcast (my local provider) to see if it would match Charter’s “offer.” I did call the Charter customer service number on the postcard. The CSR said I was his third such call today, and his supervisor asked him and other CSRs to keep track of how many out-of-territory” responses they get today. I can’t find anyone at Discover card to talk about the mailing list gaffe, but I’m guessing that Charter’s marketing team is already all over Discover’s mailing list manager.

In the scheme of industry challenges, a bad mailing list ranks near the bottom. Nonetheless, it’s yet another reminder that the computer (or more likely the human who selected the lists) is not infallible. At a time when customers are confused enough about multichannel video providers, these kinds of goofs, however rare, add to the confusion. As it is, I’m getting about 10 direct mail offers per month from Verizon FiOS (with regularly revised “deals”), plus countless FiOS inserts that drop out of local newspapers and magazines. Not to mention constant digital offers and conventional advertising.

Marketing is inevitably a mysterious art. For many prospective customers, the Discover offer on behalf of Charter just adds to the mystery.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

No Patience about Patents: 'Biggest' IP Issue by 2014

Patent wars will trigger “the biggest debate two from now” in the intellectual property arena, says Christine Varney, the former Assistant Attorney General for Antitrust and Federal Trade Commissioner.

She puts patent battles into the same contentious category as piracy and privacy, and bluntly declared “Patent wars are coming,” during her keynote address at the annual “State of the Net” conference, run by the Congressional Internet Caucus.

Varney’s views on looming patent battles weigh heavily on the cable and communications industries, which are living through high-profile and expensive patent cases — with the likelihood of more to come. The much-anticipated Apple TV project is expected to have network digital video recording capabilities, according to Apple patents that recently surfaced. New Comcast patents for program recommendation engines and interactive overlays, including personalized suggestions, are being field tested.

While these specific patents may not be challenged, cable companies’ recent record of intellectual property litigation augurs a combative environment living up to Varney’s expectations. Tivo continues to sue companies that allegedly infringe its DVR patents; it has beat Dish and AT&T and has a lawsuit pending against Verizon. In an International Trade Commission ruling, Cablevision Systems prevailed against a Verizon assault regarding its use of Cisco set-top boxes for interactive TV programming. In a series of summer and autumn rulings, a federal court found that Verizon violated ActiveVideo Network patents for video-on-demand and remote control access.

Amongst suppliers of interactive services infrastructure, Invidi Technologies Corp. is accusing Visible World and Cablevision of infringing on its patents for advanced advertising technologies.

The complexity and nuances of digital technologies — and their broad deployment — promise to keep the patent issue prominent, and to feed lawyer’s coffers.

Hence Varney’s comments take on great significance. Varney, now a partner in the Cravath Swaine & Moore law firm’s antitrust practice, stressed the privacy and piracy issues - timely amidst this month’s brouhaha about SOPA and PIPA (the now-stalled Stop Online Piracy Act and Protect Intellectual Property Act). But she waxed most emphatically on the patent issue.

She cited the complications of patents “in the global [landscape] where commerce knows no bounds.” Varney also insisted that patents will be “particularly problematic” and predicted that lawsuits will be used both offensively and defensively. Cautioning that “it will be very hard” for some cases, given the potential differing viewpoints “of the U.S. Congress and World International Property Organization in a world without borders.”

Varney expects that companies will aggregate patent rights, and she wondered aloud if such accumulation itself “becomes a market.” She cited recent activities in the pharmacology industry as a model for what may happen in the information technology and communications sectors.

With the clamor for “innovation” and the avalanche of “me-too” products and services, operators and technology suppliers better be ready to lawyer-up for an era of prolonged patent battles.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com

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