VideoNuze Posts

Today’s announcement from NBC and News Corp, that they have set up a venture to distribute full length programs plus promotional clips through 4 major distributors (with more to come) heralds a potentially new, and radically different era, for the broadcast, and possibly the cable TV industries.

In one fell swoop, 2 of the major broadcast networks have granted distribution rights to four of the Internet’s most-trafficked sites. If one assumes that it is inevitable that the broadband/PC world will be linked up with consumers’ living room TVs (whether through AppleTVs, Xboxes, Slingcatchers, etc.), then it sure seems to me as though we are on the brink of seeing a full-scale digital replica of the analog broadcast TV affiliate model being born. If that’s the case, what does that mean for existing players, most notably local broadcast TV stations? And how about cable TV and satellite operators, who have long relied on retransmitting high-quality feeds local broadcast feeds of network programming as a staple of their value proposition?

I’ve been writing about how the video distribution value chain is being impacted by broadband video for a while now. My March 2006 newsletter, “How Broadband is Changing Video Distribution” recapped my firm’s Q1 2006 report, “How Broadband is Creating a New Generation of Video Distributors: The Market Opportunity for Google, Yahoo, Microsoft, AOL, Apple and Others”. In this report we identified these companies as a so-called ‘Group of 5” which were best-positioned to benefit as new broadband-centric distributors and explained our reasons for this conclusion.

Flash forward one year. Today’s announcement cements the distribution heft of 3 of the 5 (Yahoo, MSN and AOL). Meanwhile, Google’s acquisition of YouTube has strengthened its distribution prowess. If it can build on initial partnerships with the many content providers with which it works, its power will only grow. And of course, Apple now boasts almost 60 TV networks and content producers providing programming to iTunes. Its launch of AppleTV strengthens its hand as the hardware provider-of-choice in linking up the broadband and TV worlds.

We’re exploring all of this in a report we’re (quite coincidentally) working on right now, which examines broadband’s impact on the video distribution value chain. It both updates the Q1 2006 report, and also expands it to include the roles of emerging players such as Joost, BitTorrent, Wal-Mart and others. We’ve been very fortunate to have access to many of the players in the space to gain unparalleled insights into their plans. The report is due out soon. I’ll keep you posted on its progress.

Pretty gushy review today from Walt Mossberg at the WSJ regarding his 10 day experience with AppleTV. I originally offered my opinions on AppleTV's prospects (then called "iTV") back in my December '06 newsletter ("7 Broadband Video Trends for 2007"). I thought AppleTV was likely a winner, but contingent on its content strategy. If it offered buyers access to iTunes content only then its appeal would be much more limited than if it opened up the box to all broadband video sources.

When Steve Jobs offered more details in his Macworld keynote I downgraded my enthusiasm, as they chose the former content strategy, precluding (for now) AppleTV's role as THE bridge between PC/broadband and TV. Walt reiterates this point ("Apple TV's most important limitation is that it can't stream much video or audio directly from the Internet -- yet.") but hints that this capability will be available in gen2 boxes.

I reiterate my opinion - for now AppleTV is ultracool, but will likely find only a limited audience to fork over $299 mainly to watch iTunes content on their TVs, plus manipulate music and photos. When AppleTV allows easy access to the rest of the world of broadband video, then it's going to be a big hit.

I'm heading off to Pebble Beach on Sunday morning, where I'm delivering one of the keynotes at the NAB Futures Summit (a small executive-level annual gathering) there, entitled, "Profiting from Broadband Video's Disruptive Impact".

We released a report in Q4 '06 analyzing the broadcast industry's (both networks and local stations) broadband video initiatives, and one of the report's key conclusions was that local stations' broadband efforts are all over the board. Many have embraced broadband video big time, while others are still at the starting line. I'll be sharing thoughts on how broadband is transforming the video distribution value chain, and where local stations' most attractive opportunities lie.

Unfortunately, my golf shoes are not making the trip with me...hopefully they will next time!

Was of course Viacom's $1 billion suit against Google. I must say, all eyes are riveted on this one. My take is that it's hard to believe there isn't a business deal to be made between these two companies that wouldn't be better for both than having the lawyers slugging it out.

Sure YouTube traffic is up since pulling down many of the Viacom clips, but really what does that prove except that YouTube's rapid growth rate can compensate for these kinds of hiccups? For YouTube to maintain its position as the ultimate video destination, it can't afford to have gaps in its clips springing up here and there. So it should be motivated to make a deal, not just with Viacom, but with all big media companies.

As for Viacom, it's inconceivable to me that they are better off not being a part of YouTube. Exhibit A is the free promotion and exposure The Daily Show has received over the last year from YouTube. Viacom's going to have to lock a muzzle on Jon Stewart to prevent him from lambasting his corporate parent's decision.

None of us knows how courts will interpret the DMCA in this case. The legal scholars' comments I've followed this week certainly don't form a consensus. So I continue to believe, as I wrote about last November ("Big Media's Most Vexing Challenge"), that big media companies' traditional copyright control mentalities are causing them to underoptimize their broadband opportunities. The sooner they loosen their traditional copyright approaches, the sooner they'll be able to fully exploit broadband's potential.

The vast majority of my own broadband video experiences are work-related. So it's always a pleasant reminder of broadband's value when someone close to me uses it for something a little more personal.

Such was the case tonight. Our elementary school age daughter was invited to a birthday party which includes attending a PG-rated movie. Motivated to make sure it would be age-appropriate, my wife jumped online, Googled the movie's title and immediately found the link to the movie's web site. There she was able to watch a series of video clips that provided a good sense of the movie's content, obviating the need to trust an unknown reviewer's written opinion. Satisfied, she closed down her browser. Time elapsed: 5 minutes. Isn't broadband great?

This article in today's Boston Globe points out the looming bandwidth issue that cable ISP customers will be facing as usage of video becomes more widespread. Most people don't realize there are "acceptable use" policies in the user agreements we all sign. That's because today the vast majority of us (99%+) don't come anywhere close to crossing the maximum usage line. However, as this story points out, some people are getting snagged. How many more will cross the line as video usage (particularly from P2P services like Joost and BitTorrent) rises in the coming years?

After our recent report on the broadcast industry's broadband video initiatives, my antennae are up looking for examples of broadcasters' innovation in the broadband video space. So I was pleased to see Today get more immersed in the both broadband and online with its site update announced this week. There's video galore from the program, my only complaint is that it seems like UCG opportunities are limited to uploading photos and also the message boards and blogs. Where are the UGV opportunities??

Lots of scorn flying around the net this week criticizing Oscar's takedown notices to YouTube combined with their miserly video offering at their own site. I'm just going to pile on here. What's happening is totally consistent with the findings of our Q4 '06 report on the broadcast industry and broadband video. A key conclusion of that report was that today networks look at broadband as essentially a new distribution path for existing shows. The 2 options are consumer paid downloads (dominated by iTunes) and free streaming episodes.

What they haven't done yet is create robust clip areas complete with interactivity. This area has been dominated by YouTube and others. As I said in Variety, as a result of networks' inactivity, a vacuum has been created which YouTube is filling. Consumers want clips and they want to interact. The networks should be creating these offerings on their own sites. And they should be working with YouTube. But to do neither is ostrich-like. Their inactions suggest they just wish this whole broadband/community thing would just pass already.