Week In Review: Aereo’s Chet Kanojia Looks To Disrupt WiFi With Starry; CNN Cancels Its Snapchat Show “The Update”

1. Aereo’s Chet Kanojia Looks To Disrupt WiFi With Starry

Having narrowly failed in his attempt to disrupt the broadcast television industry, Chet Kanojia, the founder of Aereo, launched a satellite WiFi network this week that could have a similarly disruptive effect on broadband.

Dubbed “Starry”, the system relies on a series of “Starry Beam” base stations with a range of 2 km that connect to “Starry Point” receivers installed on apartment buildings and houses (right now Starry is looking at densely populated areas, the initial test in Boston is being expanded to LA and DC this week.)  The Starry Points then connect to touchscreen Starry Station WiFi hubs in users homes.

Starry, which currently can reach speeds of 200 mbps will initially cost $50/month, but the company is saying that price could drop if more users sign up and they’re able to create more connections from each Starry Point or Starry Beam.

Why It Matters

Because Competition.

Right now broadband is a monopoly in 55% of the US, and a duopoly in the rest. That means that consumers have no options, that whoever owns the broadband connection effectively owns pay TV as they can set prices for double play packages well below that of standalone broadband.

They can also screw with the lack of net neutrality rules, as there is no free market.

If Starry is successful, it should succeed in bringing wifi prices down and speeds up, as companies scramble for users business.

It’s also significant because 5G is coming, the mobile based standard that can handle speeds of up to 1G. That will put at least three new players into the mix, maybe more. More competition will always be a good thing for consumers and will create the sort of open market that spurs innovation. One area where we can hope to see real innovation is in free public wifi, of the sort found in other countries, which will allow for advances in areas like augmented reality and artificial intelligence.

While it’s still not clear how well Starry will work when it’s rolled out at scale, early reports from Boston seem promising and unlike Aereo, Starry is not pushing any legal hot buttons.

What You Need To Do About It

If you’re an MVPD that supplies broadband, now’s the time to up your game, both in terms of tech and in terms of customer service. Competition is coming,  both from Starry and from 5G and you’ll want to get your ducks in a row, including IP delivery for your pay TV service. (Think addressable and cross platform advertising.)

If you’re a broadcast, cable or OTT network, this is good news for you—more places for viewers to watch and more ways to run advanced advertising units.

If you’re an advertiser, that piece about “more ways to run advanced advertising units” is good news to you too and a sign you should jump on that particular bandwagon if you haven’t already.

2. CNN Cancels Its Snapchat Show “The Update”

This happened in the waning days of 2017, but it’s worth addressing. CNN pulled the plug on its four month-old show "The Update," which it produced exclusively for Snapchat Discover. The reason, according to inside sources was that “there wasn’t a clear enough path to make money.”

Why That Matters

Because False Assumptions.

As we mentioned in our 2018 predictions, there seems to be a severe disconnect between the way Snapchat thinks people use Snapchat and the way they actually do.

The Gen Zees and younger Millennials who favor the platform use it as a chat app, a convenient and fun place to text with their friends. The odds of them swiping over to the Discover portion are not high and, to call up the whole “Context Matters” meme the TV industry has been harping on for a while now, it does.

If you’re on the app to snap your friend to check out how ugly Principal Smith’s shirt is (remember, we’re talking a whole lot of 15 year old girls here) then you’re probably not in a state of mind to watch a CNN news show. Or any sort of video programming, for that matter. 

Snapchat has an adult problem—Discover content is well done and spam and #FakeNews free. But Snap needs to figure out how to get users over the age of 25 to look at it if it wants to succeed and that’s going to take a major UX overhaul and corresponding marketing effort. Not just a few minor tweaks.

What You Need To Do About It

If you’re a network or other content producer or an advertiser, think long and hard about Discover. While there are definitely some success stories, think about who Snapchat’s typical user is and what they’re likely to be using the app for, and then decide whether it’s the best place to spend your money.

If you’re Evan Spiegel, all is not lost. The tweaks you’ll need to make aren’t all that overwhelming and you’ll be hitting the market at a time when Facebook is allegedly giving up on publishers, or at least putting them in the back seat.

Consider spinning Discover out into a separate app, one that doesn’t have Snapchat’s baggage with adult users.

And good luck.