HmmConvenient Daily

Content Discovery

2009-04-30T04:35:00.001-07:00

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

2009-04-15T13:01:00.001-07:00

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

2009-04-14T09:05:00.001-07:00

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...

2009-04-06T16:54:00.000-07:00

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!

Will FOX or NBC dot com ever just use the Hulu player?

2009-03-29T16:22:00.001-07:00

I find it quite interesting that ever after the creation of Hulu, NBC Universal and News Corp continue to dump what are probably millions (product development, headcount, ad sales, streaming costs) into parallel broadband video products. I've heard the argument numerous times "consumers still want a brand focused experience" - sure, some do, a small percentage. What most consumers want is easy access to the content that is free of barriers. It's no surprise to me that NBC.com and Fox.com continue to thrive because they are still given the bulk of on air promotion (snipes, ads, etc). It goes without saying that as Hulu's media campaign becomes more robust, their traffic will increase (February numbers confirm this).

Yes, I acknowledge that those inside of each of these companies beleive the Media Brand is king, even though consumers TV patters don't support this. Who really sits down and JUST watches ABC, CBS, or Fox anymore without changing the channel to a show brand that they care about?

There are some large leadership changes taking place at News Corp, with Jon Miller to become the head of everything-and-anything-digital. Will he be the first to look at the digital P&Ls, and in a recession make the "wise" choice to shed products that mirror what News Corp/ NBC Universal are already invested in with Hulu? Fox could easily use the white label version of the Hulu player that sites such as Comcast's Fancast.com implement. They can still keep the brand - and ditch the headcount, product investment, vendor cost, etc. etc. Not a shocking strategy, but it would be a large endorsement of Hulu as the future both in terms of technology and setting the bar on monetization.

I might be off base with this theory as NewTeeVee ran an article this morning touting that "Big Media is getting ready to eat its young." Of course if this was the case then why would Disney be looking to get an equity stake in Hulu? It is very possible that Big Media will decide streaming at their dot coms is worth ditching in support of one global platform.

Netflix streaming woes are anything but

2009-03-24T07:46:00.000-07:00

Neil Hunt, the Chief Product Officer at Netflix has been under attack for "streaming" problems that are affecting some Netflix users (Neil's response here). It's nearly impossible to determine what is affecting the users at the edge, but we can narrow it down to a few issues that reflect the state of streaming as is:

Limited CDN Capacity for streaming media servers for Adobe, Microsoft, Etc.
Regional/ Local/ In Home Network Congestion
Unicast streaming protocols (RTMP/ RTSP) don't deal well with congestion and/or latency at all.
Using highly unproven and beta products for streaming to the PC/ Mac (Silverlight)
The marketing risk of labeling any product as HD; consumers expect HD at all times, not realizing it is a qualifying statement (You can get HD, but if the following happens...)
Naive consumers who don't and won't understand the nature of open networks

There isn't a good way for Netflix to troubleshoot these issues - and frankly consumers who say they are "leaving Netflix" are doing so without any understanding of how the Internet works. It is also questionable how much Netflix cares about quality issues. Streaming problems only enhance the need for their core product of physical media distribution. Then there is the fact that most of the content available is of the B/C range (A to F scale); no "great" assets that create immediate demand outside of convenience.

We'll keep an eye on this one... but don't expect anything too drastic one way or the other.

Yes, It's been a while

2009-03-17T05:43:00.000-07:00

I have no excuses for going ~90 days without a post only to say that everything has been very busy lately, the economy not excluded. I'll be getting back on the horse and updating more frequently starting today.

I have seen a lot of lip service lately paid to Hulu, Boxee, and others who are bringing content to TVs, usually by hooking a PC up via. an HDMI or DVI cable. *Yawn* - no one is focusing on Netflix, why? While Hulu was out aggregating content and basically doing what-every-single-dot-com-had-done-for-years (ABC.com, NBC.com, etc); Netflix brought streaming to devices. There is a brilliance in the Netflix strategy that is subtle, consider:

They have created a working device ecosystem (Console, TVs, BluRay Players)
They are actively bringing cable content (e.g., Discovery, History Channel, etc) to a 10ft experience
It almost appears that Netflix has found a solution to domain DRM; I can register an Xbox, PC, an LG TV, etc. to receive Netflix streaming content. Take this statement lightly as I acknowledge it is not "true" domain DRM.
The subscription model greatly expands the available content they can license and make available, avoiding contractual conflicts with ad supported sites such as Hulu

Indeed, Netflix is the biggest risk to both sites like Hulu and the Cable Companies alike. If Netflix is able to accelerate their content acquisition plans, they could easily build a lower cost competitor to the recently publicized Comcast On Demand Online. In the recession, lower cost will trump premium services as consumers trade down to control their personal budgets.

Discovery validates thePirateBay model

2008-12-17T12:08:00.000-08:00

On December 12th, Broadcast & Cable ran an article about Discovery Channel taking their long form content offline because it was not a significant driver of their business. From the article:

Discovery CEO David Zaslav, speaking at the conference, said that despite the large content library that Discovery owns, viewers are unlikely to find any of it online in the near future.
"You won't find our long form content on the Web," Zaslav said. "There is no long form business model yet, we will be really careful [in that area]."
Cable networks also have affiliate agreements that often prevent them from syndicating their content online in a timely manner or at all.

I totally appreciate the fact that they are reacting to the Cable Industry as is and due to their carriage agreements are restricted in what they can make available. However, by cutting off the legal channels by which consumers can acquire content digitally they are doing nothing more than validating the model of sites such as The Pirate Bay. Going forward it appears many will have to "steal" their favorite Discovery shows instead of having them available as an ad supported streaming option.

Many cable channels will likely make similar decisions as ad sales teams find it difficult to monetize the available inventory for video products. It's a very music industry like move and to be honest one that is bad for both the consumer (who is becoming more trained to look for streaming media) and the cable network(s) alike.

About those Hulu numbers...

2008-12-15T10:00:00.000-08:00

NewTeeVee has a post diving into the Hulu numbers for October/November numbers that raise a lot of questions. I see the internet as providing (for the first time) a valid method to measure audience, reach, and engagement that analog via. Nielsen has failed to do for years. On Nielsen specifically do I believe that a "diary" or other method is a real way to measure what people watch (who would write down all of their channel surfing during commercials?)

On that premise, the high level details we understand is that Tina Fey spawned a significant amount of viewing via. 3rd party embeds/ distribution partners. All of that short form viewing is great but I would be very curious to understand how much long form viewing occurs at Hulu vs. their distribution partners. Since Hulu tends to offer a higher quality experience through their HD Gallery coupled with easy to understand navigation I would assume that more users are visiting the destination for a time shifted experience. On my initial opening point it is highly disappointing that we are still unable to understand the "real" numbers that expose how consumers are viewing content online.

I am positive that Hulu internally has strong analytics/ tracking and this is driving their overall business strategy. They have proven able to monetize their distribution partners inventory very effectively but do they suffer from another YouTube problem which is monetizing embeds? Does Hulu retain a high CPM for a Tina Fey clip that is embedded in this blog or any other? Their strong content library gives them significant leverage on the ad buying industry and if they are able to monetize all channels at a high CPM that would prove impressive. An ad sales strategy focused on reach, especially for Hulu, would prove to be a hidden advantage that their competitors may not be focusing on.

As you read more press about Hulu keep some of the above points in mind; they are slowly changing the paradigm not only for the consumer but for advertisers. All of this of course based on the theory that they are closely watching how you view content.

"Open Social" for BrightCove?

2008-12-08T14:07:00.000-08:00

As if TechCrunch didn't provide enough coverage of BrightCove as it was, they threw this one over the fence today. Now, here is the thought I want to provoke: it appears to me that BrightCove is trying to create an "Open Social"-esque platform for end users to develop extensions/apps. Thoughts? If this is true it will be an interesting way for them to drive their business and differentiate it from other competitors. If we have learned anything this year from Apple and Facebook, getting a lot of developers on board (who then get you free press via. their innovations and new features) is an all around good move.

A rapdily changing CDN market awaits us!

2008-12-05T17:18:00.000-08:00

First it has been a LONG time since I had time to write an update, for those of you that have been checking in thanks for coming back, and I promise to keep this site updated more moving forward.

--

So let's discuss the interesting dynamic that is emerging as the economy falls and the plethora of CDN companies compete for a shrinking amount of opportunities and business. I see a few key fundamental trends that will allow large companies with significant traffic to reap healthy contracts to minimize content distribution cost:

1) Akamai will become more price competitive and will attempt to keep a strong hold in accounts where they already have a presence. After their dismal earnings report, I believe they are moving to a loss lead strategy to put pressure on the CDN market as a whole and will use the recession to drive some of their competition to acquisition (or out of business entirely).

2) Smaller CDNs will start to disappear at a rapid rate. Many will be forced to give away their services in light of competition from Akamai, LLNW, L3, etc; with many startups taking staff reductions their ability to perform under load will be challenged.

3) Rollout of new "dynamic streaming" technologies will be pressured by the CAPEX outlay to enable these new networks. Adobe, Microsoft, and others that are pushing new technology through in this economy will find themselves footing the bill for large scale CDN deployments.

4) An ad downturn will impact the ability to deliver HD content conceptually, but CDN price deflation will end up reducing this barrier. I think this will be the most interesting paradigms to emerge, will most major networks (and sites like Hulu) push MORE HD as their CDN economics become more advantageous?

5) P2P becomes irrelevant. Back to point #1, as far as professional level content distribution goes CDNs will be forced to become price competitive to these technologies.

It's going to be very interesting, and I'll revisit this topic as details emerge from within the industry.

Hulu vs. Joost has nothing to do with tech and everything with brand

2008-09-23T08:21:00.001-07:00

There is a lot of buzz this morning surrounding the announcement the Hulu is becoming more and more like a network site (e.g., social features around a particular show). But make no mistake, what Hulu is doing is continuing work to create the brand for distribution and aggregation of professional online content.

Hulu's position as a strong brand is important because they are not a leader in the following areas:
- Quality of the video experience
- Content library (it is wide horizontally, but within each series it is generally shallow)
- Features of the video player
- Opportunity to download/ port content to a device
- Internationally accessibility

This puts other competitors at an interesting intersection because they must overcome the strength of the Hulu brand to attract viewers. The easiest comparision is made to Joost, who originally launched with a plug in and now seem hell beant on blaming the plug in for their failed launch. Joost's failure had absolutely nothing to do with technology and instead can be squarely blamed on a lack of consumer understanding of 1) why go to Joost and 2) why download the software. If people knew why to go to Joost (exclusive content, high quality experience, differentiation) they would download the software. It. Is. That. Simple.

The dynamic that many video startups will find themselves in is that as the Hulu brand gains wide adoptance they will be challenged to create a compelling story to pull users away unless they themselves (like Hulu) have exclusive content rights. I'd suggest that startups should look to obscure international sports, live events, "second tier" content (ala Revision3), and other outlets to build an audience.

I'd predict that Joost will soon go away, but the real competition for Hulu remains Fox.com, NBC.com, and the remaining Broadcast Supported Digital P&Ls.

Joost relaunch is the yawn heard round the world

2008-09-18T06:18:00.000-07:00

We talk on length at this blog about barriers to consumption, plug in installs, etc. According to this article on TechCrunch this AM; Joost will be re-launching sans the need for a browser plug in.

So now Joost competes directly with every single other site that uses Flash video. The really ridiculous situation that most video companies find themselves in is that as they standardize on Flash as the platform, they will all reach the same quality and the only differentiation becomes the user experience. If the world did not already have Hulu, and had Hulu's brand AND experience not become so powerful, then maybe Joost would have an opportunity to succeed. The reality is that users will increasingly need to understand why to use one service over another; and quality alone will not provide that win.

One good decision that Joost made is that they are going to make tiers of video quality so users have a compelling reason to take the Joost plug in. IMO, this strategy will yield great results for them; while many on the internet act as if "no one will install a plug in", etc. data shows otherwise. Given the right content and/or value add to the user, they will take on the payload of software to have a better experience. One of the failures of the original Joost strategy was that users did not understand why they had to download software because there was no low quality alternative (other than the web itself) or experience to drive the action.

I wish Joost the best but their market is crowded with the successes of Veoh and Hulu; both of whom have built businesses sans a high quality experience (aside from limited HD Galleries). The reality we face is that web users still don't perceive the Internet as a medium by which to attain HD (or near HD) content via. streaming. I personally don't think Joost alone will change this consumer belief.

The business of barriers to consumption

2008-09-10T05:14:00.001-07:00

The root of a successful digital video platform play is embracing an event where there is a known, well visible, barrier to consumption. With MLB, it is time of games and the frequency with which games occur. Olympics, while not a large success, many of the live feeds that were available were not being broadcast on television (however, it is worth noting that online got the "less desirable" events). Contrast this to the NBC/NFL Sunday Night Football player, where there is relatively no barrier to viewing the game as it is available via. the local NBC Affiliate. Based on these examples a barrier to consumption can include:

- Time of day that an event occurs
- Lack of availability within the traditional channel
- Notion of "premium" value
- Concurrency (e.g, multiple events within a genre taking place at or near the same time)
- Exclusivity

Each of these is an area where a well defined business can solve a problem for the consumer. Another way to look at this dilemma is Joost. Joost ultimately failed in their "1.0" download based model not because of a bad user experience, but due to lack of content and an understanding by consumers of what total value the product offered them. As Joost recasts itself on the web, they are still ignoring the fundamentals that lead to failure on their first try... instead they felt it was a "platform" or "download" issue (which other success stories would negate). P2P as a buzzword for delivery does not solve a single problem for the consumer, in other words, Joost fails to address or overcome any barriers to consumption. Hulu on the other hand, continues to push to overcome exclusivity, quality, and other barriers that directly impact the consumer.

Fox Interactive also seems to understand their consumer; NewTeeVee reports that their SVP of Mobile says Live has been a success on mobile. Not really a surprising result; based on our definitions above Live content allows a user to have access to the content, in real time, when they want it. This is a quantifiable value add to a viewer and therefore has a high propensity to be succesful. Fox Interactive gets additional credit for realizing it is not enough just to put a live stream online, it must be in the channel where it solves a problem for the consumer (especially since, much like NBC, Fox Broadcast content has low barriers to consumption).

NBC Sports will do anything to promote broadcast

2008-09-07T20:10:00.000-07:00

...that's my assessment after the second week with the NFL live stream powered by Adobe. After Move Networks proved to the world via. the Democratic Convention that live events can have multiple camera angles, be in HD, and scale; NBC Sports continues to put a "2000" calendar year experience online.

Seriously, what gives? It would be one thing if what they were doing was new and/ or innovative... but it is not. Live streaming has become more pervasive and consumers should be demanding an experience that has matured with the rest of the web. I do believe that users want better quality, but the continued prorogation of large scale live events that are wrapped in a poor experience does nothing but drive them BACK to the television set. It also lowers their relative expectations; which ultimately lowers relative CPMs for the content. In the case of NBC Sports, it appears they just take the technology that comes with the business terms (e.g., Microsoft for Olympics, now Adobe for NFL), so they show no signs of innovative technical forethought or passion for the Internet.

NBC Sports, my hats off to you for once again proving why television is the preferred medium (at least for NBC originated events)!

Kudos to ESPN360, who continue to demonstrate that the Internet is a perfect compliment and in some cases substitute for broadcast television.

Downloading content, again, seriously?

2008-09-03T16:31:00.000-07:00

TechCrunch reports today that Fancast (the Comcast owned Hulu competitor) has enabled downloads for content. *Sigh* -- this strikes to the heart of one of the core problems with digital distribution. Do consumers want downloadable content with restrictive DRM -or- do they want rights to their content across a variety of platforms?

If we truely believe that Internet will be available anywhere; there downloading or the notion of owning content is rather dated. Instead, consumers will push to own the "rights" to their content in the cloud and will demand unrestricted access to it either in a free-on-demand model and/or as a subscription/ paid service. I am challenged to believe that consumers understand that they must download software for one experience but then use the web for a "streaming" experience. NBC Universal tried this with NBC Direct and that has also fallen flat.

The people that are downloading content are using torrents or other methods; this is the behavior that content owners have yet to address/ change. Why would a consumer choose to use a heavy client with restrictions when Torrents offer the same content sans commercials in higher quality? Torrents are also updated more frequently; and long tail content (old shows/ seasons) are generally available with a quick search. A new process for acquiring content must offer significant value over the existing channels that have been established by pirates.

These download products ignore many of the issues that are at the core of why they fail, and until they change we will continue to see a wide parade of failures.

Most are focusing on small details around Comcast...

2008-08-30T07:50:00.000-07:00

...and are failing to see the much bigger picture that this presents to the industry at large. I believe Comcast will create a notion of "on network" (within Comcast peers) vs. "off network" (outbound public internet). Here are the realities that are not being discussed as they (bloggers) stress about a (at present) generous 250 Gigabyte monthly cap:

Comcast must develop and make available additional "on network" features as an offensive move against Verizon FiOS and other competitors
Comcast already owns Fancast... what does Fancast turn into? If users are going to be "restricted" from viewing content at other sites due to the cap will Fancast morph into something more than just an extension of Hulu?
A new business model where Comcast can charge 3rd party bandwidth consumers (e.g., P2P, Hulu, etc.) a cost to act as an "on" network provider (thereby evading the bandwidth cost).
Spurs innovation of technologies that take into account the realities of the internet. I've seen so many saying this somehow stifles innovation; what good is innovation if it breaks the intended medium? We've known for years that networks have constraints; this is a step towards responsible product development! Limiting consumption does not address other issues such as concurrency (Multicast anyone?) but does change the paradigm/ thought...

The foundation for the three points above follows the logic that Comcast cannot remain competitive unless they offer the same perceived value as a FiOS. Therefore, if the cap inhibits the ability to stream or acquire HD content via. the web it would be a loser; if it limits P2P it will win since many users do not participate in this activity (to date).

On the point around business models; with the success of the BBC iPlayer (which is P2P enabled), and NBC Universal's disastrous attempt to replicate with NBC Direct, Comcast certainly does not want to absorb cost avoided by Big Media without some residual benefit. Comcast could look to charge for "CDN" type activity on their network (P2P nodes), could license an approved P2P technology, or may look to create a platform for peer enabled content distribution. All speculation of course.

The minor PR ding that Comcast has taken, in the bigger picture is easily mitigated as Comcast will open several new business and revenue sources. What's funny is that most users with an iPhone, AT&T 3G, or Verizon AirCard are unaware that their "unlimited" plans are metered over 5 Gigabytes a month.

Coverage from around the web:

Forget revenue, what did NBCU's Olympics Video Cost?

2008-08-28T10:22:00.000-07:00

It is now well publicized that NBCU left a lot of money on the table for the Olympics online... but what was spent to deliver the Silverlight enabled experience? The following numbers provided by NewTeeVee gives us a high level model to estimate what was paid:

75.5 Million Streams
9.9 Million Hours (594 million minutes)
Average unique viewed saw ~7.86 minutes of video
Average stream 700k

Given the assumptions above, the average user "consumed" 40 megabytes of video delivered from a CDN; total delivery of ~2.9 million gigabytes. Let's consider the following cost per gigabyte calculations:

5 Cents: $145,000
8 Cents: $232,000
10 Cents: $290,000
12 Cents: $348,000

Any estimates on what the "true" cost was?

Positiv-ish DRM news for a change

2008-08-27T05:28:00.000-07:00

DRM is one of those ideas that unfairly penalizes digital platforms as if they are somehow less secure than say any of the following... optical media, broadcast television, cable television... we could make a very long list. The news on Techcrunch that the industry is looking to create a standard framework for DRM for use across all devices is in one word, intriguing.

The reason that I am opposed to DRM differs from many consumers and/or techies; I see the value of content owners protecting their content but have never fully understood why they take so many measures to secure digital content when most pirated content (today) originates from other, unsecured channels. Apple's brilliance in their approach to DRM is that it is fully obfuscated from the user; most iPod owners are unaware that their content is protected because it will playback on their personal computer, etc.

I've always argued that in order for Big Media to be successful in new media they must rapidly make their content available before "piracy" or another consumer behavior becomes the predominant standard. To date, most digital initiatives within large media companies get hung up on issues of DRM and content delivery. A standard framework is brilliant if it allows new media channels to be deemed "protected" without going through years of scrutiny; this will realize the goal of being able to flood new channels as demand increases.

Given that signing partnerships is key to the success of such a model and studio backing will not create a standard alone (e.g., Widevine, Cinema Now)... this probably has a 50/50 chance of actually working in the end. Regardless, as consumers this could have significant impact on our expectations and experience around content in the future.

Blame YouTube

2008-08-26T15:15:00.000-07:00

I often wonder why so many have a bad perception of web video or believe it can never really be a replacement for HDTV (Mark Cuban, looking your direction). Then I started looking at the recent video traffic numbers released by Nielsen and discovered what I believe is the answer. It's very simple and rather obvious, but never having given it much thought it wasn't entirely clear: YouTube.

That's right, the largest video site on the web also presents the user with the most limited video playback "experience" (if you can call it that), little excuse to go full screen, and to boot varying levels of quality. As most web video consumers will probably see more YouTube videos than say videos at an ABC, NBC, etc... it is no surprise that so many have such few hopes for this medium. A quick look at the Democratic Convention coverage shows just how shocked many are at the quality that the web can provide. Consumers have learned a pattern that involves "snack" on video for a short period of time, do not engage because the quality is poor, and move to the next thing. What percentage of viewers of YouTube regularly use the go full screen option as a behavior?

It's worsended by the fact that NBC let us down with the Olympics; for one of the more heavily promoted live events they had the opportunity to showcase the power of the web but chose not to. I've written about this extensively but it is a frustration point as the more people that are exposed to high quality, the more that will demand it from content owners and producers.

We should be raising our expectations of the web video experience online; so I implore you to look at the DNC stream and imagine what it would be like if every live event was like this online!

Microsoft's big swing and a...

2008-08-26T05:01:00.001-07:00

Miss, home run? Time will tell, but investing in Move Networks was an extremely strategic push in the right direction for the following reasons:

Entrance into existing accounts that Move Networks holds (ABC, Fox, Discovery, The CW) plus international properties
Integration of Move Networks into Silverlight; giving Microsoft adaptive video playback that is CDN agnostic very early in the game relative to the age of their platform
"Acquisition" of Move Networks team to work on video initiatives while allowing Silverlight team to focus on the core platform
Open door to explore buying significant portion of Move Networks

What is really intriguing about this investment is that with all of the buzz about P2P companies delivering cost reductions the "major" players in the space do not seem fully bought in. Move Networks is not a P2P play, so I assume that as Microsoft assessed the landscape and current state of policy they determined it was better to stick with a company that supported the existing online delivery content value chain (CDNs, ISPs, etc) instead of breaking off into new territory.

The Move Networks investment is not without risk however as many companies are looking to challenge Move's value (not the least of which, Adobe). Move Networks must continue to innovate to outpace competitors and stretch the net benefit that their customers see from a client side plug in. This could include additional metrics or products that drive further monetization of content (ala Ooyala).

Move Networks is currently streaming the Democratic Convention in HD.

Conviva: How Unfortunate...

2008-08-25T05:31:00.000-07:00

So news broke this AM of Conviva raising a $20MM round to fund future development of their "C3" platform, articles below:

While details of Conviva's platform are not widely known, it is yet another company bringing technology to a business problem. I am sure that Conviva will end up throwing around popular buzz items of interest such as "lower cost, increased quality", etc.; they don't address fundamentals of the online video business. Live events remain in their infancy online and it is challenging to get millions of people to use a digital platform as it requires heavy promotion through traditional channels (even NBC didn't nail this with the Olympics).

There are some large scale live events taking place this week, The Democrats will be streaming their convention live via. Level3, Silverlight, and Move Networks. NBCU just completed streaming the Olympics live via. Silverlight. This fall the NFL will be streaming their games online with multiple camera angles. Conviva has yet to break into any of these large accounts... and ultimately the success of any video startup will hinge on buy in by a major media conglomerate to supply both content and an industry "check" of approval.

Then there is the "Akamai Problem"; that is do I believe the incumbent CDNs will allow a startup to take away traffic from their networks? Absolutely not; and I would look for Akamai and others to continue to sign and push for strong contracts that limit the total traffic that can be carried on 3rd party networks. I also would assume that increased pricing pressure within the global CDN market may push the cost per minute/gig and associated 95/5 models to at or below what the delivery cost via. Conviva may ultimately be.

As I mentioned in my last post, in this market you have to be more than technology to be successful. Conviva would be wise to learn from Ooyala, Brightcove, and Move Networks...

Clearing up the very common misconceptions about "Online Video" companies

2008-08-24T11:50:00.000-07:00

One of the key focuses of this blog is deciphering and providing the "truth" behind what other blogs write as it relates to the online video industry. TechCrunch ran an article this weekend celebrating Brightcove and giving a general update on their platform; however they went into no details on what Brightcove actually is. This is important because TechCrunch also mentions Move Networks and Ooyala at the end of the article as competitors. Of course, there is no analysis or commentary what-so-ever that explains how these companies compete, allow me to help:

Brightcove makes a workflow & CMS product that uses Flash progressive download and streaming (FMS) video. The experience is driven by a set of templates (which are primarily Brightcove defined). There - that's it. It's funny that each time an article about Brightcove runs many developers are quick to point out that the functionality would be rather easy to mimick...
Ooyala, much like Brightcove, makes a workflow & CMS product that uses Flash progressive download and streaming (FMS) video. I give Ooyala a nod for focusing on one of the most important issues in the online video space: monetization. It is my asseration that Ooyala will position themselves against their competitors by rapidly creating and vetting new online business models (ad formats, etc). This view is strengthed by the fact that the core founders previously worked at the king of such business models, Google.
Move Networks does not use Adobe and instead requires a client side plugin for delivery of their video. The ideaology behind Move Networks is that the plugin allows for client control of the experience; thereby ensuring high quality. Move Networks also focuses on data collection and I am certain their plugin returns an order of magnitude more data than a traditional Flash based player. Interestingly, Move Networks announced the hiring of Tom Morgan from BlackArrow earlier this year... so some type of advertising based products (?) seem to be on their roadmap as well.

So there you have it, a quick summary of where each company stands competitively. I'll be curious to see if Ooyala and Brightcove ever embrace Move Networks and/or Microsoft Silverlight as alternate delivery platforms... what is to keep Adobe from entering their market and releasing a full player SDK/toolkit?

It's interesting that the "YouTube" problem of monetization is really driving growth in this industry... hopefully with the 3 companies ahead focused on such issues we will see rapid innovation and additional growth.

NBCOlympics.com ad revenue: $5 Million

2008-08-22T10:36:00.000-07:00

...and that's it, according to this report. In a previous post I highlighted that the Olympics was not living up to expectations, but where I strongly disagree with the cited article is that they highlight a "download" as the hurdle.

That is *hardly* the issue. First bloggers at large seem to forget that Adobe Flash is itself a Plug-In... ABC.com requires a plug-in and delivered record traffic... so while that is the easy scape goat, the real issue is navigation and experience.

I myself have tried to navigate through the content that NBCOlympics.com has only to be fully turned off by the experience. If video HAD been easier to find I would have consumed more. But after using a search engine which displays results in a 90's-esque design (i.e., thumbnail grid) I can hardly say this is intuitive or useful.

Technology is easy to blame, but in this case it IS the experience!

Hulu International with US Content? Nope...

2008-08-21T06:16:00.000-07:00

Two stories here and here about Hulu hiring and/or launching an international platform. Unless Hulu has somehow resolved the incredibly ridiculous rights situation in the US there is *no* way their international plans include US content. Rather, I would argue that what Hulu is looking to do is acquire content in key markets (e.g., UK, China, Latin America, etc) and use their platform to launch Hulu-esque experiences.

So my prediction: Hulu launches geo-filtered experiences for specific countries with a subset of the US content but mostly made up of newly acquired content from a region. That's it. It won't be radically different from what we have today. Everyone prepared to be both disappointed, confused, and pissed.

Olympics digital video disappointment

2008-08-18T07:23:00.000-07:00

As I continue to look at the traffic numbers that are released for NBCOlympics.com I am going to call them as they are right now: disappointing. Specifically, consider the numbers that PaidContent.com referened below as of August 15th, 2008:

—31.2 million video streams delivered totaling 4.7 million hours.

-- 31 million unique visitors; 6.5 million daily uniques.

-- Users spend approximately 13 minutes per visit.

These numbers pale in comparison to ABC.com who recently announced that they had streamed 815 million minutes of video in May of 2008 (http://www.lostremote.com/2008/07/14/abccom-reaches-record-video-traffic/). I have a hypothesis that sports that are not followed by a core audience of fans (e.g, MLB, NHL, etc) will have trouble growing an audience online. The Olympics demonstrates challenges the NFL may have online this fall with their video product for Sunday Night Football, specifically:

Games are readily available with no clear barriers to consumption in traditional media channels (e.g, blackouts, scheduling)
Much like watching Phelps, the event is very much "lean back" as viewers do not want to risk missing action taking place live
Online quality, even in HD, does not present a clear value add above the HD signal most can receive from their television provider

I would predict that the NFL will see much success with post game replays and content consumption but live will fall short of their internal projections (which I assume are relatively high). I have yet to see a company create what I would describe as clear value for digital as a substitute for traditional broadcast when the event has limited barriers to consumption. Will the addition of social and/or interactive features drive viewers to a digital platform? What content and experience will be online to create clear value?

If the NFL is able to address key barriers to building this platform they will make a significant demonstration to other companies with similar aspirations.

Who do we thank for the Olympics online?

2008-08-17T10:57:00.000-07:00

A lot has been made in the blogosphere about NBC's Olympics coverage online (see any of the myriad of posts at PaidContent.org, AlleyInsider.com, NewTeeVee.com, etc). While everyone is judging, critizing, or drawing conclusions from what NBC has done or not done with the content and rights they have, consider this. Who is to thank for the 2200 hours of content and multiple live streams made available online?

Many are quick to draw comparisions to the Beijing games vs. Athens... which I feel is inherently flawed. At the core of any networks decision to put content online is a single goal: revenue. Without a revenue driver there is no incentive for a large media company to make their content available on a new media platform as the traditional "analog" outlets have established ad models that ad sales teams can sell.

Here in lies the magic of NBCOlympics.com; we really need to look over the fence and thank MICRSOFT not NBC for what we see online today. In 04, 06, and other years... the major barrier to putting the Olympics online was certainly the challenge of selling the available video inventory at a premium that would cover the costs of the platform. When you look at the entire cost structure for digtizing the games (site build, production staff, CDN, player technology build, scaling partners)... it's a large undertaking without a guarantee or solidified revenue model.

If it had not been for Silverlight and Microsoft's aggressive need to gain both installs, exposure, and proof of scale to compete against Flash there is no telling what the experience would have been like; but one can assume it would be diminished.