VideoNuze Posts

While much of the world was on vacation last week, yet another Comcast-related fracas broke out in the blogosphere, this time over the company's latest update to its broadband internet access policies. While this latest flap cements Comcast's status as the favorite target of those who put a totally unfettered Internet on a par with life, liberty and the pursuit of happiness, my immediate reaction was more "what's the big deal?"

The latest fracas centers on a seemingly innocuous, yet possibly longer-term significant change in Comcast's "Acceptable Use Policy" which governs how much use you can get out of your Comcast High-Speed Internet service each month. In the past there was no theoretical limit, though Comcast says it always had on eye on its heaviest users (under 1% of its total base of 14 million) who would be contacted when an undisclosed threshold was reached. Last Thursday, Comcast posted a change in its AUP stating that starting October 1st, the usage cap would be 250GB/mo.

The blogosphere's reaction was immediate and sometimes raucously over-the-top (one well-known blogger pronounced the change "the end of the Internet as we know it"). While Comcast tried to translate the 250GB cap into say, how many emails a user could send each month (50 million) or songs that could be downloaded (62,500), others began furiously crunching the numbers to see more extreme scenarios, like how many HD movies/mo you'd be able to download.

For my part, I believe that Comcast's new cap - like much of the swirl surrounding its recent BitTorrent throttling - is much ado about nothing, at least for now. Where others see a raging fire threatening to burn down the Internet, I barely see signs of smoke just yet.

Yesterday I peppered Comcast spokesman Charlie Douglas with questions about the cap. While I had to ask several times whether it is intended to stifle broadband video consumption in any way (a favorite conspiracist belief), Charlie finally did provide an emphatic "no." He cited Comcast's own Fancast broadband portal as a key company priority, which itself would be harmed by any sort of broadband crackdown.

For sure some of you are thinking, "yeah but Will, he's their PR guy, what do you expect him to say?! Why do you believe him?!"

Fair questions. But contrary to the end-of-the-world crowd, I don't think Comcast has any sinister hidden motives with the cap, or with its network management policies. I do however think that Comcast does not take enough care in determining its policies or communicating them to its broadband users and other constituencies. Combined, these feed the distrust and dislike of Comcast that seems to be pervasive.

Even in my conversation with Charlie yesterday I found myself having several "huh?" moments that seem to strain credulity. For example:

Q: Why set a cap and especially one that's so high that it has little practical effect? A: Well, our customer feedback told us we needed to have a cap.

Q: How was the cap size determined? A: We thought it was a generous amount. Q: But the specific size? A: We thought it was a generous amount.

Q: Why release news of the cap in the last week of the summer (when many are on vacation and not paying attention) and in the midst of the ongoing FCC network management issue, instead of rolling out a comprehensive new plan that could be messaged accordingly? A: The cap and the FCC network management have nothing to do with each other, they are separate issues. Q: But in the media's coverage and public's perception, they are all considered part of the same picture. A: The cap and the FCC network management have nothing to do with each other, they are separate issues.

Q: Now that there's a formal cap, how about providing a simple tool so users can monitor their monthly usage, like cell phone companies do? A: Heavy users know how to find these tools; someone just told me last week that a Google search for "bandwidth meter" yields 290,000 hits. Q: Yes, but how about just offering a tool as a "good neighbor" gesture that your customers would appreciate? A: The cap is irrelevant to 99% of our users.

No doubt you'll find these answers as confounding as I do. All I can conclude is that 10+ years into the broadband game, Comcast still hasn't recognized how vital its broadband service is to its users nor how it has become part of a far-larger tableau including freedom of speech, the economy and American competitiveness. Comcast's seeming tone-deafness to all of this was fully evident in its continuously revised responses to the FCC's BitTorrent inquiry earlier this year.

This explanation will strike many as too generous and trusting. However, until I see real evidence of perniciousness on Comcast's part, to think anything else just feels like paranoia to me.

What do you think? Post a comment now.

Welcome to September. Before looking ahead, here's a quick recap of 3 key topics from August:

1. Advertising model remains in flux

Broadband video advertising was a key story line in August, as it seems to be every month. The industry is rightly focused on the ad model's continued evolution as more and more players in the value chain are increasingly dependent on it. This month, in "Pre-Roll Video Advertising Gets a Boost from 3 Research Studies," I noted how recent research is showing that user acceptance and engagement with the omnipresent pre-roll format is already high and is improving. However, as many readers correctly noted, research from industry participants must be discounted, and some of the metrics cited are not necessarily the best ones to use. I expect we'll see plenty more research - on both sides of pre-roll's efficacy - yet to come.

Meanwhile, comScore added to the confusion around the ad model by first highly ranking YuMe, a large ad network, very high in its reach statistics, only to then reverse itself by downgrading YuMe, before regrouping entirely by introducing a whole new metric for measuring reach. In this post, "comScore Gets Its Act Together on Ad Network Traffic Reporting," I tried to unravel some of this mini-saga. Needless to say, without trustworthy and universally accepted traffic reporting, broadband video is going to have a tough slog ahead.

2. Broadband Olympics are triumphant, but accomplishments are overshadowed

And speaking of a tough slog, the first "Broadband Olympics" were a huge triumph for both NBC and all of its technology partners, yet their accomplishments were overshadowed by a post-mortem revenue estimate by eMarketer suggesting NBC actually made very little money for its efforts. This appeared to knock broadband video advertising back on its heels, yet again, as outsiders pondered whether broadband is being overhyped.

The Olympics became a hobbyhorse of mine in the last 2 weeks as I tried to clarify things in 2 posts, "Why NBCOlympics.com's Video Ad Revenues Don't Matter" part 1 and part 2. These posts triggered a pretty interesting debate about whether technology/operational achievements are noteworthy, if substantial revenues are absent. My answer remains a resounding yes. But having exhausted all my arguments in these prior posts, I'll leave it to you to dig in there if you'd like to learn more about why I feel this way.

3. Broadband's impact is wide-ranging

VideoNuze readers know that another favorite topic of mine is how widespread broadband's impact is poised to become, and in fact already is. A number of August's posts illustrated how broadband's influence is already being felt across a diverse landscape.

Here's a brief sampling: "Vogue.TV's Model.Live: A Magazine Bets Big on Broadband" (magazines), "Tanglewood and BSO Pioneer Broadband Use for Arts/Cultural Organizations," (arts/culture), "American Political Conventions are Next Up to Get Broadband Video Treatment," (politics), "Citysearch Offering Local Merchants Video Enhancement," (local advertising) and "1Cast: A Legit Redlasso Has Tall Mountain to Climb" (local news).

I expect this trend will only accelerate, as more and more industries begin to recognize broadband video's potential benefits.

That's it for August and for the busy summer of '08. Lots more action to coming this fall!

As just one metric of the busy summer of '08, approximately 600 broadband-related news items have been posted to VideoNuze since Memorial Day. Each of these items (available here fyi) is tied to a specific product announcement, partnership deal, financing, content initiative or other industry activity. And these 600 are just from the finite number of relevant publications from which VideoNuze aggregates its industry news. There was no doubt more news as well.

In addition, VideoNuze's contributors and I have made almost 100 original analyses/posts on the industry's key trends, products/technologies and research data during this busy summer. Demonstrating the sheer breadth of broadband video's growing influence, consider examples of just a handful of this summer's posts:

• Growth/challenges of pre-roll advertising
• Trends around short vs. long-form video programming
• Broadband ISPs' ongoing struggle to maintain their networks' viability
• Push by aggregators to differentiate themselves and gain market share
• Launch of a fashion magazine's original video series
• How a law firm is using video as a recruitment tool

VideoNuze remains laser-focused on broadband video as a unifying theme of all our analyses and posts. My world view - as most of you are no doubt painfully aware of by now - is that we are in the early stages of a relentless and inevitable shift to an open, broadband-centric era of video delivery, characterized by massive creativity and innovation, fierce competition and unprecedented consumer value.

As we say goodbye to a busy summer, I'm preparing to say hello to an even busier fall. Industry participants have a full plate of product announcements and partnerships pending and I expect the pace of activity will only quicken. VideoNuze will be there to separate the wheat from the chafe, helping all of you better understand what the flurry of news and data should mean to you.

Importantly, this fall also brings an exciting expansion of VideoNuze's mission, as we begin a push into focused, high-impact events. This is a natural progression of VideoNuze's overall value proposition and one which I've been eager to pursue for a while now.

Kicking things off will be our inaugural VideoSchmooze, a first-of-its kind industry networking event to be held on Tues, Sept. 9th in Boston. There are already 200+ people registered, representing virtually every VC firm in the area, all video-focused startups and established companies and loads of entrepreneurs and others tied to the industry. Space is still available for this free event and registration is here.

Then on November 10th I will moderate VideoNuze's first Broadband Video Leadership Breakfast on the first full day of the annual CTAM Summit. Having moderated at dozens of industry conferences over the years, I've tried to bring together best practices I've observed, and have also personally recruited a blockbuster A-list group of executives for what I think will be a must-attend event. I'm excited to share more details later next week and hope you'll be able to join us.

In the meantime, I wish you a safe and restful Labor Day weekend. See you on Tuesday!

Two days ago, I posted "Why NBCOlympics.com's Video Ad Revenues Don't Matter." I'll take the risk today of "beating a dead dog" by writing again about this same topic, for a couple of reasons.

First, there were some great comments on the site and I received many emails both supporting and challenging my arguments. (As a sidenote, I've discovered an interesting dynamic with VideoNuze - though I've repeatedly tried to encourage readers to post comments so all readers are able to see, folks seem more comfortable just emailing me directly for a one-on-one dialogue. I'm not going to resist human nature here, but again, I would love even more if you share your reactions by posting a comment so the whole community benefits!)

Second, the real trigger for writing a follow-up part 2 today is an incident I experienced yesterday. I gave a presentation about broadband video to a group of investors. These were mainly people who are familiar with broadband video, but not necessarily steeped in it. Upon finishing up and opening the Q&A, an early question/comment was, "Hey Will you lay out great points about broadband, yet I just read somewhere earlier this week that even NBC's Olympic video, which should have been a big revenue opportunity if ever there was one, generated little money for NBC and looks like it was a total failure for them. Given that, why should people bother investing in this medium? It doesn't seem promising."

Ugh. Ugh. Ugh. This is exactly the perception that I sensed would be created out of the blogosphere's and mainstream media's coverage of eMarketer's NBCOlympics.com revenue estimate. And why it is so vital that people interested in broadband video not get distracted by this single data point. Instead, maintaining perspective about where the industry stands and what needs to be done to grow should be the real focus.

I totally get the point made by people in their comments and emails that video providers must show they can make real money in the broadband medium. Ultimately, that's paramount. In particular it's key that broadband not get tagged as the "digital pennies" medium, in contrast to the traditional "analog dollars" model.

But I'll continue to insist that the path to industry revenues and profits begins by demonstrating the technical/operational viability of the broadband medium, massive user adoption of it and differentiated engagement with it. To be sure, progress is being made on all fronts. Still, there is still a long road ahead to drive significant shifts in advertiser spending to broadband. If you're a media buyer today, you're very intrigued by broadband and are likely experimenting with it.

But you're looking for more proof points before making bigger spending commitments. Can broadband's architecture scale to handle massive traffic loads, or are the Chicken Littles right that the Internet will crash under video's massive weight? Can broadband video's quality compare with TV, and HD in particular? Given the broadband choice, will users in fact shift their consumption patterns? And if they do, how different will their awareness and engagement with ads be? Importantly, when is broadband video actually going to be widely and easily available on TVs, not just computers?

These are but a few of the questions repeatedly being asked. And many of these are what NBCOlympics.com has helped to answer. NBC could have done lots of things to squeeze more money out of its Olympics video (though my guess is that no matter what revenue they generated cynics would have still said, "Is that all?"). Instead they focused on user value/experience and pushed the broadband envelope considerably. Others are doing the same. More needs to be done, and I believe it will.

As the saying goes, "Rome wasn't built in a day." So too with this exciting new medium. Revenues will not gush immediately. Staying focused on the core building blocks is the key. In short, I'm bullish long-term, but highly realistic short-term.

What do you think? Please post a comment! Or send me an email if you really prefer!

I'll be moderating a session at a new show called "Contentonomics" on October 7th in LA. Started by the gang over at Contentinople, who I've come to know well over the last 6 months, it's shaping up to be a dynamic new educational and networking opportunity for industry participants.

My session is "The Syndicated Video Economy: From Social Networks & Broadband Channels to Blogs" and features four great panelists:

• Gary Baker, Founder and CEO, ClipBlast
• Greg Clayman, EVP, Digital Distribution and Business Development, MTV Networks
• Jimmy Hutcheson, President, EgoTV
• Damon Berger, Director of Programming, Revision3

TheWB.com's curtain is finally going up, with the site set to officially open for public beta at 11am Pacific Time today. Along with fellow analysts and press, I was given a sneak peek at the site and so I'm able to offer some initial impressions. At first blush, and after having some of my specific questions answered by a WB spokesman, my reaction is that the site is executed well, but that its strategy seems fuzzy.

As many of you know, TheWB TV channel went off the air in September, 2006. In April, 2008 Warner Bros. Television Group announced that it would launch TheWB.com as an online network. The new site contains a mix of about 20 classic WB and Warner Bros. programs and a slew of forthcoming original web-only programs created by big-name talent. Many of the classic programs have cult-like followings and will no doubt find an ardent online audience.

In addition, TheWB site has some nifty features such as a mashup capability called "WBlender" powered by Adobe Premiere Express, video search powered by Digitalsmiths (including full scene-by-scene indexing of all programs which allows search at the dialogue, character, location, episode, session and series level) and a pretty deep Facebook app allowing users to share content back and forth.

While these features all will eventually raise the bar for other sites, certain aspects are not yet fully implemented. For example, WBlender today only offers users a paltry 30 or so pre-selected clips and just 6 soundtracks to mash. Later this year the selection will widen when the WBlender is married to the video search feature, allowing all scenes from all shows to be mashed together. It's not clear whether users will be able to clip specific segments themselves from favorite episodes or not.

Overall, the site's execution is solid except for a few minor personal quibbles that aren't worth spending time on here. I believe a far bigger issue is the site's fuzzy strategy. A WB spokesman told me that "TheWB.com is not meant to be an archival library of every episode of every show ever made, but rather an entertainment destination that gives our viewers a lot of great entertainment, along with a reason to come back again tomorrow." This is meant to give "our programmers the ability to create themed programming blocks that mesh with our audience's sensibilities."

 

Yet how TheWB.com actually translates this strategy into which programs and episodes are available on the site at any given time is where I think it's going to generate considerable user frustration, not to mention a lack of competitiveness with its own syndication outlets.

Three shows "Friends," "Buffy the Vampire Slayer" and "Angel" illustrate the point. With "Friends" just 7 episodes are currently available on the site, inexplicably from 7 different seasons. If there's a thematic thread, it is neither stated on the site, nor intuitive to me. If I want to watch a specific episode from a particular season, I'm out of luck. Meanwhile TheWB.com shortchanges "Angel" and "Buffy" fans by offering just the first 5 episodes of each, while Hulu, as one example, already offers 22 and 34 episodes each program, respectively.

I think it will quickly become evident that TheWB.com's strategy to "program" its online network is at odds with the on-demand desires of users seeking unfettered access to the full catalog of all programs. Here we see legacy linear TV thinking being grafted onto a high-potential online platform, with the result being a confusing sub-par user experience.

I know I've said this before, but I continue to believe that Hulu is the reigning broadband video user experience king. Having cracked the code on how to deliver fast growth and user loyalty, TheWB.com would be wise to go to school on Hulu and borrow liberally from lessons it has already learned and acted on well.

Still, in fairness, this is still just the beta of TheWB.com. There's a lot to be excited about here, but getting the site's strategy aligned with user expectations is a key building block to eventual success.

What do you think? Post a comment now.

There was much reporting yesterday of eMarketer's estimate that NBC generated revenue of $5.75 million from its broadband Olympics video. The firm's press release dismissively called the sum "a passable performance." Others, from the blogosphere to mainstream media piled on, characterizing NBC's video revenues as underwhelming, using terms such as "pittance," "piddling," and "unimpressive."

Let's hold on a second here. At the risk of sounding like an irrepressible NBC supporter, I'd like to offer the alternative viewpoint: NBCOlympics.com's video ad revenues actually don't matter.

Don't get me wrong, when it comes to high-stakes Olympics broadcasting - and a sagging economy to boot - every dime counts. Rather, my point is that by focusing on the broadband ad number (which at virtually any level would have been a mere rounding error on NBC's $1 billion+ of overall Olympic ad revenues) we are getting distracted from NBC's real and very valuable broadband accomplishments.

Consider this: there were more on-demand and live sports choices for Olympics viewers than ever, NBC and its technology partners conquered herculean operational challenges without any major snafus and the foundation was laid for broadband to play an increasingly important and integral role in all future iconic programming events.

Focusing just on the operational achievements for a moment, a conversation I had yesterday with Brick Eksten, President of Digital Rapids, the company that provided all of the video encoding and streaming technology for NBC's live streaming events was a reminder of all the complexities NBC and its partners took on. There were up over 100 live simultaneous feeds that needed to be ingested, encoded in multiple bit-rates and delivered in real time across the globe to the right distribution points. All of this had never been done before.

Unlike domestic implementations or those focusing mainly on on-demand delivery, live broadband delivery from China meant spec'ing out all the delivery systems in advance and then shipping all of the gear well in advance of the event itself. There were many unknown variables, beginning with the vast potential range of concurrent users. So long hours were invested by partners modeling different scenarios to meet targeted delivery quality goals. Compounding matters, Brick explained that due to space, manpower and time limitations, Digital Rapids and others were challenged to push their systems to do things not previously done.

Meanwhile, NBC faced a pioneer's balancing act, simultaneously trying to preserve the value for its on-air broadcast rights/supporting advertisers, while meeting consumers' expectations for broadband on-demand access to everything. NBC could have chosen to charge for broadband access (as CBS originally did with March Madness, and as MLB continues to do) or provide only highlights clips or nothing via broadband at all. Instead, it offered up - at no charge - 2,200 hours of live streaming and 3,000 hours of on-demand.

Some fans on the sidelines have groused this wasn't enough. Now some analysts are saying that NBC could have generated more ad revenue if it had opened the broadband spigot further. These comments miss the bigger point: NBC moved the broadband market dramatically forward with its Olympics coverage. Focusing on what NBC proved with the first "Broadband Olympics," rather than what attributable revenue it generated, is what's most important for all of us to remember.

What do you think? Post a comment now.