VideoNuze Posts

The folks at Microsoft are determined to make Xbox 360 a winner in the free-for-all to bridge broadband-delivered video to the TV. Yesterday at E3, Microsoft announced a number of enhancements for Xbox and Xbox LIVE (the console's gaming and content marketplace), further blurring the lines between gaming and entertainment, and raising the stakes for other single-purpose convergence boxes. The new features include:

• Instant-on streaming of 1080p HD video with 5.1 channel surround sound using proprietary Microsoft adaptive bit rate streaming technology
• Smooth fast-forward and rewind, comparable to DVD
• "Movie Parties" - avatar-based shared/social viewing in virtual theaters
• Live on-demand BSKyB through Xbox in UK and Ireland
• Rebranding of Xbox LIVE Video Marketplace as Zune Video Marketplace, which joins the 2 brands in anticipation of the upcoming launch of Zune HD; additional content planned.
• Expansion to 10 new regions, bringing the total number of countries able to access TV shows and movies through XBox to 18
• Facebook, Twitter and Last.fm integrations

Of course, Xbox 360's key advantage in moving into entertainment is that it has a huge installed base of early-adopter gamers to leverage; in fast Microsoft said last week that it has sold over 30M Xbox 360 consoles to date and that there are over 20M active members in the Xbox LIVE community (not only a subset are Gold members able to access some of the entertainment offerings like Netflix streaming). Little has been disclosed about Netflix Watch Instantly consumption since February when the companies said that 1M LIVE Gold members had consumed 1.5B minutes of video in the first 3 months of availability.

Microsoft isn't forgetting that Xbox is still primarily a gaming platform; yesterday it rolled out a slew of games for Xbox, including "The Beatles: Rock Band" with Ringo and Paul making personal appearances. Xbox also unveiled its "Project Natal" a controller-less, 3D sensor that detects a gameplayer's movements. All of these will continue to drive console unit sales.

No doubt there are plenty of other things the Xbox 360 team has planned to make the console a highly attractive "over the top" option for those considering cutting the cord on their current video service provider, though Xbox 360 is not being positioned this way - yet.

What do you think? Post a comment now.

Grab Networks has announced a new $12M round of debt and equity financing from existing investors Softbank Capital, SCP Capital, Longworth Venture Partners and Court Square Partners. Horizon Technology Finance led the venture debt piece.

I've written about Grab (formed from the merger of Anystream and Voxant) several times on VideoNuze, and have been impressed with the demos I've seen of their new hosted solution which includes, among other things, auto-generated clips, metadata creation/management and syndication. For now the foundation of the business is still Anystream's traditional licensed transcoding product, but the new end-to-end solution pushes the company far beyond this base, into what I've called the "syndicated video economy." Among others, local broadcasters are a key target market.

This round continues the financing momentum that broadband video companies have experienced despite the financial meltdown. In Q1 '09, industry companies raised over $80M, which came on top of another $80M or so in the Fall '08. Skittish investors are clearly still optimistic about broadband's potential.

(Note, at the end of June I'll be participating in a webinar Grab Networks in organizing about video syndication. More details to come shortly.)

What do you think? Post a comment now.

Following are 3 key themes from VideoNuze in May:

1. Hulu Moves to Center Stage

Already on a roll, Hulu gained lots of mind share in May. After YouTube it is clearly the most-buzzed about video site - not a bad accomplishment for a site that just celebrated its one year anniversary.

The month began with the announcement that Disney would invest in Hulu, at last making available ABC and other programs in Hulu's ever-growing portal. Hulu gained stature during the month as the statistic from comScore released in late April - that Hulu was now the #3 most-popular video site, with 380 million video views in March - was repeatedly recirculated. (Hulu was separately disputing data released from Nielsen showing a far-smaller audience.)

In addition to the Disney content, Hulu also announced its first live event, tonight's concert from the Dave Matthews Band. Capping the month was last week's Hulu Labs announcement, showcasing the desktop app that moves Hulu one step closer to being TV-ready.

Hulu's growth and top-notch user experience continue to set the pace in the online video world. Still, as I noted in my post about the Disney deal, what's still unproven is the Hulu business model and how it plans to navigate the convergence of broadband and TV. The spin coming from its owners is that financial progress is being made, yet Hulu's per program viewed revenues continue to be a fraction of those derived from on-air viewership. Sooner than later, I predict the Hulu growth story is going to start to give way to the Hulu financial story, which may yet include subscriptions.

2. Susan Boyle Shows Power and Conundrum of Viral Video

It was hard to miss the Susan Boyle phenomenon in May. As of last Thursday (before the finale of "Britain's Got Talent" in which she placed second) her original video had generated over 235 million views, according to tracking firm Visible Measures. Ms. Boyle's sensational performance has mainstreamed the term "viral video." The idea that you can become a worldwide personality is truly a broadband-only invention.

Yet 3 1/2 years after SNL's "Lazy Sunday" video became the first bona fide big media YouTube hit (despite NBC's efforts), the process for copyright holders and distributors to monetize these viral wonders remains immature. The NY Times described the interplay over the Boyle viral videos between YouTube, Fremantle, ITV and others, and why those hundreds of millions of views are still under-monetized. But with broadband distribution's increasing importance, this won't last; viral monetization rights are inevitably going to become a key part of the upfront negotiating mix.

3. Mobile video growth

Mobile video continued to get a lot of attention from content providers, service providers and handset makers in May, with initiatives from NBC, NBA, E!, Samsung, Sling, among others (a full listing of mobile video news is here). The mobile video ecosystem is responding to data indicating surging consumer acceptance, primarily driven by the iPhone. In May Nielsen released a report indicating mobile user growth from Feb '07 to Feb '09 was 74%, and that iPhone users are 6 times more likely to consume mobile video. The crush of new smartphones coming in the 2nd half of '09 promises that mobile video usage is going to continue growing rapidly. Limelight's acquisition of mobile ad insertion company Kiptronic is likely the tip of the deal iceberg as companies position themselves for mobile.

What do you think? Post a comment now.

Below is the 18th edition of the VideoNuze Report podcast, for May 29, 2009.

This week I review the Q1 '09 Nielsen A2/M2 Three Screen Report data recently released, comparing it to Q1 '08 data. My comments pick up on a post I wrote earlier this week, "Video Behavior Changes Suggest Evolution, Not Revolution For Now."

Don't get me wrong, video consumption on alternative platforms (i.e. broadband, mobile, DVR) is continuing to grow briskly. But the reality is that when you look at the numbers, they suggest steady rather than dramatic, overnight change is what's really happening in the market. This reality is sometimes missed in the ongoing hype.

Meanwhile Daisy adds more detail to a post she wrote, "Fox's Prison Break Finale Demonstrates the Power of Social Media," which describes how Fox cleverly used social media to promote a DVD with 2 additional episodes following the on-air finale. Fox used various social media sites to release a teaser picture from the new episodes and began promoting the DVD which will be available on July 21 on DVD and for purchase on iTunes. It's an intriguing way for the studio to migrate users beyond traditional TV consumption and generate additional revenue.

Click here to listen to the podcast (13 minutes, 37 seconds)

Click here for previous podcasts

The VideoNuze Report is available in iTunes...subscribe today!

Yesterday Hulu announced Hulu Labs - "a place to try out experimental projects from Hulu and share your feedback while they're still in development." Four current projects are listed, "Hulu Desktop," "Video Panel Designer," "Recommendations" and "Time-Based Browsing."

Hulu Desktop, a browser-less app for surfing videos with a Windows Media Center or Apple remote controls moves Hulu yet another step closer to the proverbial "10 foot" or TV-like experience. Yet as Peter Kafka at AllThingsD rightly notes, Hulu continues to draw a seemingly arbitrary distinction between screens. It's fine with the Hulu folks to use Desktop to watch on a large monitor connected to your computer. But if you want to watch on an actual TV (via Boxeee, for example) that's a no-no.

So even as Hulu admiringly pushes the bounds to improve its users' experiences, it is going to continue to find itself in wrapped around the axle trying to explain itself. What would change all this and make Hulu's owners agnostic to whether you watch Hulu's programs on PCs or TVs? Simple: Hulu demonstrating it can generate ad revenue at parity (or better) with traditional on-air delivery. Once it can do that, then these distinctions will melt away. Problem is, despite Jeff Zucker asserting that Hulu is ahead of plan, the reality is that Hulu is nowhere close to achieving parity (nor has it shared a roadmap for doing so).

Until this happens, things like Hulu Desktop are neat, but will only cause more head-scratching among Hulu's tech-savvy early-adopter audiences.

What do you think? Post a comment now.

Far, far from the world of big media, where broadband delivery is causing multi-billion dollar tectonic plate shifts, there is a Seattle-based husband-and-wife team who are demonstrating that video is truly a wide open playing field for entrepreneurs with clever new ideas and the pluck to pursue them. Big media's broadband pursuits provide ample grist for my daily VideoNuze posts, but periodic detours describing entrepreneurial companies like Common Craft show how fundamentally empowering broadband video has become.

I discovered Common Craft last week when I noticed a prompt at the top of Twitter.com for a video explaining "Twitter in Plain English." I clicked and found myself watching a short video with simple paper cutouts acting out how Twitter works, along with a voice-over providing simple but detailed narration. It perfectly explained what Twitter is about in 2 1/2 minutes.

Intrigued, I followed the producer's link to CommonCraft.com and found an entire library of similarly formatted videos, on topics such as technology, society, money and green. I tweeted how cool I thought the videos were and 20 minutes later, Chris Savage at Wistia sent me an email saying he saw my tweet. He said he knows the Common Craft founders and offered an introduction. Shortly thereafter I found myself talking to Lee LeFever, half of the Common Craft team. (as an aside, talk about the power of Twitter to connect people!).

The whole Common Craft story is well-laid out here, but the abbreviated version is that Lee's on-the-job experience prompted him to write blog posts explaining RSS and Wikis in "plain English." On a hunch, he and his wife Sachi turned the RSS post into a short video, sort of stumbling onto the idea of the paper cutouts (which they call "paperworks") and narration. When it was posted in April, 2007, it was promoted on Digg and got tons of views. Next they turned the wikis post into a successful video and Lee discovered his knack for productizing explanation (to date Lee says their videos have racked up 10M+ views and have been translated into 50+ languages).

Given the Common Craft team's lack of video experience, their videos might get thrown into the "user generated" category. But the quality and power of their videos instantly blurs the distinction between what is UGC and what is "premium." Lee explained to me that it was in fact their lack of formal video training that freed them to do things that "professionals' likely wouldn't have done, allowing them to create their own authentic style.

The capper to the Common Craft story is that not only have the LeFevers figured out how to make quality video, they've figured out an effective way to promote and monetize it. Eschewing the custom video path (which they started to gain traction with), they've instead focused on licensing their videos for training and educational purposes. Lee says they're already generating $15K/mo in license fees. The key is still using YouTube and their own site to offer full length free viewing, with prompts to transact. They've also leveraged their reach by creating something called the "Explainer Network" which provides referrals to a handful of custom video companies.

I'm drawn to the Common Craft story because it is a business model completely rooted in the broadband video economy. The LeFevers demonstrate that broadband really does enable "amateurs" to found successful video businesses that in the past would have been prohibitively costly and untenable. I have no doubt we'll see plenty more success stories like Common Craft's in the years to come, as broadband becomes an ever more pervasive part of our economy.

What do you think? Post a comment now.

Today Ooyala is officially releasing its updated video player, named "Swift," with a lighter-weight, more modular design intended to deliver faster loading/playback for users and improved integration of advanced features for its content provider customers. Sean Knapp, one of Ooyala's 3 co-founders, and head of technology shared more details of the new player with me last week, and also provided a perspective on the coming entry of Adobe's Strobe video player framework, which will undoubtedly impact all of the video player/content management companies.

A key focus of the Swift's development has been modularizing its code, so that only what's required for that particular user experience is downloaded to the user. Faster response times and better playback are critical drivers in the user experience, as we've all no doubt endured the wait for a video, only to end up clicking away. It's no surprise that Ooyala - with a cadre of people from Google, where cutting milliseconds from the time to deliver search results is an obsession - should be focusing on response times.

Playback quality is another focus of the new player, with improved bandwidth detection that supports Ooyala's adaptive bit rate ("ABR") or "dynamic video" delivery. ABR/dynamic video has become a competitive battleground lately, with companies like Move Networks (an ABR pioneer), Microsoft, Adobe, Brightcove and others all touting ABR delivery.

ABR delivery detects on a moment-to-moment basis the user's available bandwidth and computer processing capability so that an appropriately encoded video file can be dynamically delivered. Sean said that via an HTTP delivery workaround it created over a year ago, Ooyala has been able to offer ABR in Flash, thereby preceding Flash Media Server 3.5 (FMS 3.5 was released last November as the first Flash server to support dynamic streaming; it has only recently been deployed by CDNs).

Sean explained that the new player's design approach aligns with the coming entry of Adobe's "Strobe" video player framework later this year, which he welcomes. From his perspective, Strobe has the potential to address a lot of the core video functions that Ooyala and other video player companies have had to develop themselves. If successful, Strobe will provide a standardized foundation layer ("getting us out of the muck" as Sean happily said) that would free up Ooyala to focus on supporting higher value components such as advanced monetization (e.g. micro-payments, subscriptions). Ooyala has not yet announced support for Strobe, but it plans to.

This is basically how Adobe itself would like Strobe to be perceived. In a recent conversation with Sumner Paine, Strobe's product manager, he explained to me that Strobe's tools and frameworks are intended to accelerate the development of custom Flash players, to better support content providers' specific objectives (and of course reinforce the Flash value proposition).

Key to Strobe are third party plug-ins from the growing video ecosystem meant to replace the duplicative process of each video player company having to integrate with each third party. Sumner sees video player companies with freed-up resources being able to move up the stack, for example, to provide tighter integrations with customers' content management systems.

Strobe's Q3 entry is going to be another milestone in the ongoing maturation of the broadband video industry. Adobe is trying to create additional industry scalability and drive further customization while defending its turf against Silverlight and other potential entrants. If Strobe is successful, the bevy of video players on the market will need to find new ways to innovate to differentiate themselves, such as Ooyala's trying to do here with Swift. With so many moving parts this is going to be a closely watched space.

What do you think? Post a comment now.