Showing posts with label network effects. Show all posts
Showing posts with label network effects. Show all posts

2011/02/01

IPv4 run-out has started - prepare for IPv6

So, checking technical blogs and tweets this morning, I learn that APNIC have triggered IANA IPv4 exhaustion. What does this mean for the non-technical user? Well, in the short term, nothing - RIRs like RIPE and ARIN still have stocks of IPv4.

In the medium term, it means you have to move to IPv6 soon. Given the rate at which IANA ran out, you have about a year from now before IPv4 is simply unavailable to you, and services will have to be IPv6 enabled or else. If you're buying network-enabled kit that you expect to keep using in 12 months time, make sure it's IPv6 ready. If it's not, talk to your salesman, and tell them that the reason you're delaying the purchase is that you want IPv6 support.

As a product developer, I'm not seeing any pressure from the field to get IPv6 into our Internet enabled devices; it's simply not something that impinges on people who buy equipment. You need to change this now. Within the lifetime of anything you buy today, IPv4 will run out, and you will need your equipment to be IPv6 enabled if it's going to continue working.

Please, put pressure on sales teams to IPv6 enable everything - it won't happen until you do. If you don't, don't be surprised when you're rebuying everything in a year or two, simply because IPv4-only kit is no longer usable for the task you bought it for.

2010/10/30

On funding the BBC

It looks like we're going to see another debate on the future of the BBC in the not too distant future. I happen to believe that the BBC plays two important roles in UK television, so I'm not in favour of anything that guts it; I do, however believe that those two roles could be improved by a change to the BBC's funding.

So, firstly, what do I think the BBC does that's important?

  1. It takes risks. The BBC can do a programme like Sherlock, which could easily have been a complete disaster, because it doesn't have to worry about making a profit on every slot.
  2. It produces programming for minority interests. The BBC can broadcast the Paralympic Games knowing that the majority of people would prefer to watch football or mainstream athletics, because its funding method means that it can do the right thing anyway.

Further, having broadcast risky or minority programmes, the BBC sometimes ends up demonstrating to commercial broadcasters that their intuitions on what's potentially profitable are wrong; thus, it also stops the commercial channels descending into wall-to-wall dross, because they know that their viewers can always switch to the BBC.

Given these priorities, the BBC's funding mechanism needs to give them incentives to take risks rather than play it safe, and to worry about providing something for everyone rather than something for the few. As always when I present a problem, I have an idea to solve it.

To understand my suggestion, you first need to understand the audience measurement concepts of reach and audience size.

Audience size is really simple - just count everyone who watches a programme, or a channel, or a group of channels. There are some slight complexities here, such as deciding when someone counts as having watched a programme, but it's otherwise not hard.

Reach is a much more complex measurement; you have to count the number of unique viewers. The important thing about reach is that you can't just appeal to the same viewers again and again to increase your reach - you have to bring in new people each time.

A very simple example; imagine two TV stations, 1 and 2, and 6 people, A to F, and the following audience figures:

Time of dayStation 1 viewersStation 2 viewers
6pm to 7pmA, B, CD
7pm to 8pmB, C, DE, F
8pm to 9pmC, DA, B
9pm to 10pmA, B, DC, F

By audience size (the most commonly quoted rating), station 1 consistently equals or beats station 2; with the exception of the 8pm to 9pm timeslot, it has more viewers in every timeslot. However, on a reach rating, station 2 beats station 1 - it reaches 100% of the audience over that evening, whereas station 1 keeps attracting the same viewers again and again to get a 67% reach.

With my terms explained (albeit badly), I can explain my proposal. I intend to reuse the BARB reach measurement for TV, and the RAJAR reach measurement for radio, as they're already taken anyway for the benefit of commercial broadcasters. I'm ignoring the BBC's online services completely, for these purposes; I believe that there's enough competition online, and it's easy enough to find, that the BBC is not needed as an aid to competition.

The BBC would have to face two measurements in my world. First, it would be measured on the reach of its television services alone; it must reach 99% of households with a TV licence. This allows for a small number of law-abiding households that don't watch the BBC on philosophical grounds, but still forces the BBC to provide something for everyone. If the BBC fails to achieve this, it has to "buy" ratings from the commercial and state broadcasters until it has the 99% figure; note that because it's buying historic ratings, it has to buy programming that helps it achieve its reach goal, thus giving commercial broadcasters an incentive to find a minority interest that the BBC does not service.

The second measurement includes both TV and radio services, and controls the BBC's future funding. For each of the two figures, you end up with three outcomes:

  1. Reach increased compared to last year.
  2. Reach the same as last year (within error bounds).
  3. Reach decreased compared to last year.

If either reach figure decreases, the BBC is limited to an inflation-only rise in income; if both decrease, the BBC's revenue is not increased at all. This gives the BBC a strong incentive to avoid losing reach - lose reach in one medium, and you're limited to an inflation-only rise in income. Lose reach in both media, and you're making cuts.

If one figure rises, and the other stays the same, the BBC is permitted a small increase over and above inflation - say the lower of 5% or the inflation rate. If the BBC can make both reach figures rise, it's permitted a larger increase - say the lower of 10% or four times the inflation rate. In both cases, the tie to inflation ensures that the BBC never grows rapidly; but by tying increases to reach, the BBC is prevented from growing at all unless it can appeal to more of the population than before.

Obviously, this is just an outline, and thus rather incomplete - but hopefully my thinking is clear.

2010/03/27

How a 1980s telecoms compromise helped set the Bluray video format.

I've mentioned the ATM committee's weird decisions before, when talking about ADSL; this post is meant to make you think about how seemingly small committee decisions can have long term impact.

To recap; in the 1980s, telecoms engineers were setting standards for "fast" data links (45MBit/s and above), to be used to carry voice, fax and data; the decision was made to use small cells, so that even slow links could use the same standard. The resulting standard, ATM, has a 48 byte payload and a 5 byte header on every cell.

There's only one standard set worth considering if you're interested in serious video; the MPEG standards. Both DVD and Bluray are built on MPEG; DVD uses MPEG-2 exclusively, carrying video and audio in an MPEG-2 program stream, extended to add timecode to packets, resulting in the "VOB" file format. This has limitations when it comes to seeking; when an optical disk player seeks, it moves the read head to a location that's approximately right, then reads the disk until it finds the timecode it's after, then either moves the heads again (to a better estimate of the correct place), or resumes playback. Because program stream packets are variable-length, the player can end up reading a significant amount of data, only to discover that the timecode tells it that it's badly off, and it has to seek again.

Bluray escapes this by using MPEG-2 transport streams as the container, but with a 4-byte timecode added to each transport packet. Transport stream packets are fixed in length at 188 bytes, so a Bluray player never needs read more than 192 bytes after seeking before it can decide whether it needs to seek again to a better guess at the correct location, or whether it can just read to the right point.

188 bytes is a rather unusual number; the header is 4 bytes long, and the payload length of 184 bytes is neither a nice number for humans, nor is it a nice number for computers to deal with. So, why did the MPEG-2 committee choose 188 bytes for transport stream packet size? It all comes back round to ATM; when MPEG-2 was being designed, ATM was the telecommunications networking technology of choice, and it was considered important that you should be able to easily carry MPEG-2 transport packets in ATM.

There are two sensible ATM Adaptation Layers for MPEG-2; AAL1, meant for constant bit rate services (such as carrying a multiplex from BBC headquarters to the Freeview transmission sites around the country), and AAL5, for services that can cope with a long delay. AAL1 takes 1 byte from every cell's payload, leaving 47 bytes for the user; 47 times 4 is 188, which is where MPEG-2 gets 188 bytes from. It also works well for AAL5; AAL5 uses 8 bytes from every group of up to 1366 cells, leaving 40 bytes in that cell and 48 bytes in the remaining cells in the group for user data; two 188 byte packets plus 8 bytes of AAL5 overhead fit precisely in 8 cells with no padding.

So, to interoperate well with ATM, the MPEG-2 guys chose 188 bytes for their fixed-packet-length container. MPEG has been wildly successful, so that the Bluray guys didn't want to design their own container format. As a result, a compromise between France (who wanted 32 bytes payload), and the USA (who wanted 64 bytes payload) has influenced the design of the most modern consumer video format to date. Next time you're compromising on a technical issue, think hard; your compromise may live on longer than you expected, and affect more people than you thought it would.

2010/02/14

Market abuse; or, extending control from one market to another

As a geek with an interest in broadcasting, I see an awful lot of people justifying market abuse by Apple, Microsoft and Sky, amongst others. I thought I would jot down my personal views on what is and is not market abuse, and why I don't consider it acceptable.

So, what is market abuse? Market abuse is where you use your power in one market to unreasonably influence another market. In this circumstance, unreasonable means that a competitor who's only playing in the market you're trying to influence cannot possibly match your influence, without first having power in the market you're using.

It's easier to explain by examples of abuse, and not abuse:

Abuse
Tying your web browser in with your OS, and forbidding resellers of your OS from removing your browser or adding another browser.
Not abuse
Giving your web browser away for free, and permitting unlimited distribution of copies without a fee.
Abuse
Tying reception of your TV channels with your TV receiver box.
Not abuse
Tying reception of your TV channels with your encryption card.
Abuse
Tying your mobile phone to a specific provider, and requiring people who want your phone to take out service from your chosen provider.
Not abuse
Permitting mobile providers to subsidise your phone and apply a subsidy lock.

There's a thread running through all of these; when you are engaging in market abuse, there are two separate products being sold. One is worth buying (or getting for free) on its merits, the other is not, so you tie the two together, forcing me to take the poor quality product if I want the good product. But note that there's a slight twist; it's not market abuse if I can get equivalent products elsewhere in the market without the tie.

So, offering me your MP3 player tied to your music player software isn't abuse; I can buy other MP3 players, not tied to your music player easily enough. If I can't get an equivalent to your phone elsewhere in the market (e.g. because your application store means that network effects compel me to have your phone or lose out), it's abuse.

Why do I consider market abuse bad? Simply put, it's because I'm compelled to accept a worse overall experience. Either I accept the poor quality product with the good product, or I lose out on both; it gets really bad when network effects mean that I must accept one of the two products and lose out.

How do companies avoid market abuse? By not tying two products together unreasonably; sell them both separately, and let your immediate customers make decisions for themselves. If you're moving into a new market, don't get tempted to do anything that couldn't be done by a competitor in the new market with enough money. In particular, don't tie your existing product together with your new product, unless a competitor could tie your existing product together with their existing product.