Link Your House

Get ready to add the IP multimedia phone to your shopping list. The technology is being touted to become the “fourth screen” in your home due to its ability to marry the Internet and social media applications with voice calling and real-time IP video conferencing.

You may have thought that the PC was going to become the primary method of video teleconferencing. Not according to market researcher In-Stat, which calls the IP phone the “fourth screen” in the home to complement the PC, TV and mobile handset. In-Stat estimates that consumer multimedia phones will generate between $4 billion and $8 billion in annual revenue, worldwide, by 2013.

Driving the influence of multimedia phones is consumers’ desires for the ability to deliver “visual communications.”

Each year, as typical broadband speeds get faster, it makes it easier to deliver real-time applications and real-time video calling.

So an application that was once reserved only for big businesses that could afford the exorbitant equipment and network access costs to support this alternative to corporate business travel, is now ready for the residential market.

Broadband Enables IP Phones More Easily
According to Pew Internet & American Life Project, it is estimated that as of December 2008, 57 percent of adults in the U.S. had broadband access at home, compared with 42 percent in March 2006 and to 30 percent in March 2005.

Products on the market like Grandstream Networks’ GXV3140 IP multimedia phones (suggested retail price $299) enable users to communicate for free right out of the box using plug-and-play, peer-to-peer technology. By plugging the phone into the broadband router at home, within minutes the phone is ready to make video calls with zero configuration.

The key benefits of IP phones are:

• The media phone combines the power of a PC with the always-on functionality of the home telephone.
• Allows you to make free voice and video calls worldwide upon simple plug-in installation.
• Integrated Web browser lets users access personalized RSS feeds of real time online information services, such as news updates, stock updates, weather forecasts, recipes and directory searches.
• One-touch access to Internet radio stations and online music networks such as Last.fm, Yahoo Flickr Web photo album, video and social networks.
• Allows for IM capability with Yahoo/MSN/Google.
• Offers always-on, one-touch access to Internet activities including accessing entertainment content (YouTube videos, movie clips, and music).
• Access to Yahoo! Flickr web photo album, alarm clock, calendar, games, music ring tones.
• Other capabilities include the ability to act as a digital photo frame, calendar and alarm clock, along with multiple language support and the ability to an plug into computer or TV for larger picture display.

June 22 (Bloomberg) -- TiVo Inc., armed with a federal court ruling backing the company’s digital-recording patent, plans to elbow its way onto every U.S. pay-television system to attract millions of new subscribers.

The Alviso, California-based DVR pioneer is in talks with pay-TV providers to sell its recording and playback service to more of the industry’s 103 million U.S. customers or license its technology, according to two people with knowledge of the plans.

“They will leverage this to become a much bigger player,” said Anthony Shaw, a partner and intellectual property litigator at Dewey & LeBoeuf LLP in Washington. “They don’t want to be a patent-holding company.”

The June 2 ruling against Dish Network Corp., the second- largest satellite TV service, gives TiVo a chance to boost revenue by adding to its 3.2 million subscribers. The company, which has struggled to make money, may also become a buyout target for Dish or the larger DirecTV Group Inc. as the satellite companies seek an advantage over each other, said Chris Marangi, an analyst with Gabelli & Co. in Rye, New York.

For $12.95 a month, TiVo subscribers can record, pause and replay shows in progress, and access thousands of movie rentals online from Amazon.com Inc., Netflix Inc. and Blockbuster Inc., all from the living-room TV. That dwarfs the video-on-demand offerings of pay-TV. The company also sells DVRs and provides software in cable and satellite set-top boxes.

Time Warner Talks

TiVo is in talks to provide service through Time Warner Cable Inc., the second-largest U.S. cable-TV provider, Landel Hobbs, the New York-based pay-TV service’s chief operating officer, said on a June 11 conference call. TiVo already has deals with Comcast Corp. and DirecTV, the largest U.S. pay-TV companies.

TiVo declined to comment on its discussions with pay-TV companies, said Mike Boccio, an outside spokesman. Time Warner Cable, which has 13.1 million video customers, wouldn’t elaborate on Hobbs’s comments.

DirecTV declined to discuss TiVo, said Darris Gringeri, a spokesman. Dish, based in Englewood, Colorado, also declined comment, said spokeswoman Kathie Gonzalez.

A federal judge in Texas ruled that Dish and satellite- equipment provider EchoStar Corp., both controlled by Charles Ergen, violated TiVo’s patent on technology that allows viewers to record and play back video at the same time.

‘Come to Terms’

TiVo “can go around to everyone and say, ‘You have to come to terms with us, we have already taken on Dish and our patents withstood,’” said Shaw, who has represented Intel Corp. and Samsung Electronics Co. “If there was an easy way around the patent, Dish would have already adopted one.”

The court ordered Dish to disable offending players and provide notice before attempting a workaround. Dish and EchoStar were ordered to pay $103 million to cover royalties while they continued to provide their DVR product. Both are appealing and have told the court they are developing a DVR that won’t use TiVo technology.

TiVo leapt 53 percent after the ruling. The shares fell 55 cents to $10.50 today in Nasdaq Stock Market trading, giving the company a market value of $1.1 billion. DirecTV, based in El Segundo, California, slid 11 cents to $23.57 on the New York Stock Exchange. Dish declined 66 cents to $14.52.

The legal victories haven’t yet translated into sustainable profit. With about $250 million in annual sales, TiVo lacks the heft of larger pay-TV providers. The company spent more building and marketing its digital-recording devices last year than it received in hardware sales.

TiVo reported its first annual profit of $104 million in March, the result of damages paid earlier by Dish and EchoStar, also based in Englewood. In May, the company recorded a fiscal first-quarter loss of $4.13 million as sales slid 9.7 percent to $54.9 million. Subscribers fell 16 percent.

Litigation ‘Not Preferred’

In a June 8 report, Mark Argento, an analyst at Craig- Hallum Capital Group LLC in Minneapolis, also identified Amazon, Apple Inc., Cisco Systems Inc., Microsoft Corp. and Netflix as possible TiVo suitors. Officials at Seattle-based Amazon and Los Gatos, California-based Netflix declined to comment.

“We do not anticipate any changes in our current working relationship with TiVo,” Terry Alberstein, a spokesman for San Jose, California-based Cisco, said in an e-mail. The company makes set-top boxes and DVRs.

Apple, based in Cupertino, California, and Redmond, Washington-based Microsoft, which operate services that sell movies, music and video games, also declined to comment.

TiVo wants pay-TV companies to let subscribers choose between DVR services, said the people, who declined to be named because the company’s deliberations are private. Alternatively, TiVo may seek licensing or other revenue, they said.

Comcast, DirecTV

Other pay-TV operators may also be infringing, Chief Executive Officer Tom Rogers said on a May 28 conference call.

“Is it certainly possible that we will find ourselves unable, in certain cases, to establish a commercial relationship,” Rogers said. “In those cases, will we consider litigation? Obviously, but that’s not our preferred approach.”

DirecTV plans to offer high-definition TiVo in 2010. The company has more than 18 million U.S. subscribers and could gain an edge over Dish with an exclusive accord with TiVo, Craig Moffett, an analyst at Sanford C. Bernstein & Co., wrote in a June 3 report.

Dish would probably have to pay more than DirecTV or Comcast in a settlement with TiVo, said Marangi. Gabelli held 56,000 TiVo shares as of March 31, according to data compiled by Bloomberg. Philadelphia-based Comcast, with 24.1 million cable subscribers, offers DVRs with TiVo in the Boston area and is expanding the service to Chicago.

‘War Chest’

Spokesman for Verizon Communications Inc. and AT&T Inc. said their TV services don’t infringe TiVo patents. Atlanta- based Cox Communications Inc. has an agreement with TiVo. Bethpage, New York-based Cablevision Systems Corp., which is developing a remote recording system, and Charter Communications Inc., based in St. Louis, declined to comment.

“TiVo is putting a war chest together in case they have to go after other providers in court,” Shaw said. “They probably expect some other providers will put up a fight, too.”

By Andy Fixmer

ATLANTA -- Imagine if you could use the internet anywhere in the city of Atlanta. Imagine no more -- the reality is that Atlanta is now the largest WiFi hotspot in the United States.

It would take you about an hour to drive through it; and it provides internet speeds that play streaming high definition video.

Carol Luther brought her laptop to the Starbucks in Ansley Mall to use their WiFi to get on the internet because a tree took out a phone line at her house.

"In my neighborhood, there are like 3 billion trees," Luther said. "Like they just cut out enough space for the house, okay. So every storm, something's out."

If she had a new WiFi service that will be unveiled in Atlanta on Tuesday, she wouldn't have to worry about where she is. No more being tied to her home for internet.

"Then I want to go to my mother's house and kick it with her, she's 80 years old so you know I'd like to just hang out, but then I can't do anything," she said.

Clearwire Communications has brought wireless internet to the city of Atlanta. For about $40 a month, you can get the internet at three times the speed of phone cards, anywhere within a 1,200 square mile radius.

"It would be like speeds that you get at home or at work. So instead of having to go home or go to use the internet and get those super fast speeds, you get that anywhere you go," said Clearwire GM Marc Brachman.

Clear wireless and its WiMax technology have created the largest hotspot in the United States -- and all it takes to connect is a small USB modem.

Imagine sitting in the back of your car, driving from Cherokee County through Atlanta on the Downtown Connector, all the way to Stockbridge, and having seamless internet on your laptop.