Content Discovery

For anyone who has foregone Cable TV for an extended period of time or have friends that have done this, you generally find they become quickly out of touch regarding "what" is on TV. Hulu & TV.com haven't solved this issue as to consume VOD you need to understand what is scheduled. While many doubt the future of linear, the fact is many consumers would not understand how to discover content sans network/ cable promos.

Enter Netflix. Reed Hasting's Netflix CEO stated that:

Hastings said the future of video watching is not linear channels, it’s “closer to Facebook and YouTube” than it is to a standard grid view (presumably he means the way you scroll through TV channels now), and it will cater to the Internet generation.

My thoughts started flying when I read this as at the highest level Netflix has already solved the "way to watch" problem present within the Movie Rental business with a strong recommendation algorhythym. It is entirely possible that in the future, we would see their ability to recommend content to users applied to more than just DVDs. Why couldn't Netflix work in a STB, Mobile Phone, etc?

Consider that a Netflix enabled STB could organize itself with recommendations in a very similar nature to way Netflix.com works today. This is a model that has been widely adopted by the younger generation Hasting's speaks of in his quote above, however even they have been trained to consume/ view 'linear television.' It will take years to change embedded consumer behaviors, but just as Netflix changed the DVD rental business a well placed disruptor could accelerate this time line.

Last Night's NY Video Meetup

I attended last night's NY Video Meetup where HD Cloud, Mogulus, Boxee, and KickApps were showcasing various innovations. Each in detail:

• Mogulus - Demoed a very impressive live streaming product that was able to mix both an external video source and elemnts on the PC (such as a game, PowerPoint, etc). The feaure that seemed to wow the crowd was when the CEO demonstrated the ability to zoom into elements on the screen such as a chart in a presentation. The downside: Mogulus appears to use Adobe FMS for live streams, and it shows (quality/buffering/stalls, etc)
• Boxee - CEO and Co-Founder Avner demonstrated the Boxee interface and new partners in their API/ App Store program. During the Q&A section a Time Warner executive gave Avner a brief lecture on the as-is state of the industry relative to content rights. Avner listened to the comments and responded with a witty off topic "but broadband caps are mean."
• KickApps - Really impressive demo here (didn't catch the name of the demonstrator). They have created a WYSIWYG editor for video players; cool stuff.

The 4th company that presented at the event was HD Cloud, an Amazon Web Services based transcoding provider. The service utilizes EC2 to split a file into many parts and transcode across many Ec2 intances. In theory it seems like a good idea, but the details:

• Cost is $2 per GB transcoded
• Doesn't appear there is any IP what-so-ever; in fact anyone that has developers on staff could use FFMPEG or similar to do the same
• Security? The HD Cloud team said they anticipate handling high value content but they'll need to prove that they can secure the content outside of Amazon's existing model.
• File transfer today is done via. FTP; no Aspera or Signiant to speed AND secure delivery.

Doesn't look too good for HD Cloud, and at the prices they are charging for many it will be cheaper just to have a local transcode solution in their data center.

MSO Authentication taking off

As if we needed more validation that the MSOs are asserting their power in the industry, NewTeeVee reports that NBCU will be tightening their authentication methods for the 2010 Olympics. This is not so much as interesting for the Olympics but for the industry at large. The big question I have:

Is someone/ some entity creating a middleware layer that will assert entitlement on behalf of all of the MSOs?

This entire business of entitlement is similar to what Microsoft Passport, Facebook Connect, OpenID and other global authentication systems have tried to achieve. There are technical challenges that cannot be ignored most importantly scale and security (ask anyone who has been involved with SSO projects). IF we assume that the MSOs are successful in building these systems we then must theorize how will the business models take shape. Consider the following:

• The NBC Olympics model is one where multiple MSOs work around one destination
• Comcast's On Demand Online is a 1:1 relationship with a Comcast consumer and a Comcast owned portal
• Time Warner Cable appears to be building a set of middleware that will allow for content companies to build/ maintain their own entitlement products (less work than Comcast, but what impact will this have to the end user experience? Did we learn nothing from Hulu?)

While the Comcast model is relatively straightforward, if we dive into the Time Warner model the scenario gets more interesting. If TWC can easily assert a users cable subscription/ rights, will this allow sites like BravoTV.com, Discovery.com, and others to unlock their long form content for these subscribers in an on site player? Will it then force other MSOs to pursue a similar model? Finally how do you track/ analyze behavior across such a diffuse set of properties?

Interesting to say the least...

Quick links...

Hello everyone happy Monday! For your reading enjoyment...

• Why MLB ditched Silverlight: http://www.flashcomguru.com/index.cfm/2009/4/6/why-mlb-dropped-silverlight (rumors)
• YouTube to lose projected $470 million: http://www.contentagenda.com/article/CA6649280.html?nid=3798 (what no news on Hulu's rumored losses?)
• On the Hulu note, I did see the new ad format and can't say I'm a fan, forcing me to chose between two products with a 15 second countdown ahead of video? Meh, not impressed.
• Convergence Consulting says TV networks made $1.63 billion online last year: http://newteevee.com/2009/04/06/tvs-web-revenues-163b-in-2008/

Enjoy!