VideoNuze Posts

Here's another example of the multiple cross-currents in the broadband video market.

Just last week I reviewed new Magid research showing that short-form dominates broadband video consumption. Now this week I received news from Swarmcast which provides a high-quality streaming delivery platform, revealing that the average length of live streams it's serving for its customers now averages more than 75 minutes, suggesting the long-form opportunity is now firming up. An apparent contradiction? Yes. An actual contradiction? No.

What's happening is that while short-form still accounts for the vast majority of viewing instances, there are now marquee events from Swarmcast customers like MLB.com being streamed live that are generating sustained viewership. Swarmcast provides multiple examples of events that it has streamed which lead to the 75 minute average:

• July 15 - All-Star Game
• July 14 - Home Run Derby
• July 3-6 - Rothbury Music Festival
• June 28 - Nelson Mandela's 90th Birthday celebration

I think the success in live streaming events speaks to broadband's convenience. While TV is clearly the preferred viewing device, if you don't have access to one when a compelling event is on, or that content provider has chosen to stream it instead of broadcasting it, broadband is incredibly convenient.

Even so, what's traditionally held back longer-form consumption is low-quality delivery. This is the problem Swarmcast has focused on. I've seen examples of some of their events and the quality is impressive, even at scale. So as content providers recognize that they can indeed stream high-quality long-form events, interest will build. The next key challenge of course will be monetize these streams.

MLB has been a poster child for succeeding with the subscription model, leveraging its loyal fan base and exclusive games. While their brand is unique, it seems like there should also be pay-per-view opportunities for high-profile live events, akin to what has worked on cable (e.g. wrestling, boxing, music, etc.). Outside of the paid model, if audiences can be built for free events, advertisers will also take interest.

Swarmcast's customers' success in longer-form live streaming is again showing that despite the current popularity of short-form, broadband is still evolving, opening up diverse opportunities for content providers.

What do you think? Post a comment.

Yesterday, in "Video Usage is Creating a Hairball for Broadband ISPs, Others," I scratched the surface of how ISPs' networks are becoming overwhelmed by the sheer volume of broadband video being consumed each day along with potential solutions currently under experiment.

Today, to help put the problem in some context I'm pleased to offer a dozen slides excerpted from Cisco's recently released Visual Networking Forecast, which shows strong growth ahead for video, as it becomes the predominant type of Internet traffic. To learn more about the forecast and its implications, I recently spoke to Cisco's primary forecasting analyst, Arielle Sumits.

Click here to download the slides.

Arielle explained that Cisco started doing the forecast years ago as an internal project to help inform its own business decisions. As it recognized there was a dearth of this information available publicly, it decided to release the numbers.

Cisco bases its calculations on analyst projections for Internet users, broadband connections, video subscribers, mobile connections and Internet application adoption. As a significant equipment vendor to service providers, it is also able to collect data from these customers to validate its forecast. In fact, Arielle said that in Q4 '08, Cisco will begin supplementing the forecast with actual data from 12-15 service providers, breaking down their users' consumption by video type (professional, UGC, etc.)

The forecast shows that broadband video's growth will continue apace. Cisco is forecasting half a "zettabyte" (definitions are provided) of data will cross the global Internet by 2012, with broadband video accounting for nearly 50% of the total. Accounting for video's rapid expansion, global consumer Internet traffic will quadruple by 2012.

Putting this in perspective, Cisco estimates that in 2012 global broadband video traffic will be 380 times what U.S. Internet backbone traffic was in 2000. Even in 2008, video is already impressive, with Cisco estimating that the video viewed at just 7 sites (YouTube, MySpace, Xbox Live, iTunes, NBC, ABC and Yahoo) is already greater than what U.S. Internet backbone was in 2000. (If you want to read the whole white paper Cisco wrote about the forecast, it is available here.)

While all of this is good news for those pursuing broadband video business opportunities, the forecast again underscores the significant issues facing broadband ISPs, on whom we all rely to actually deliver video across the so-called last mile. Broadband video's growth is dependent on these companies figuring out how to economically keep up with the explosion in video consumption. As I tried to point out yesterday, there are, as yet, no perfect answers to be found.

Click here to download the slides.

What do you think? Post a comment.

The explosion in broadband video consumption is creating a significant and growing hairball for broadband Internet Service Providers, content providers, regulators and others. The core problem is that ISPs' networks are getting overwhelmed by the sheer volume of video being consumed each day.

ISPs have several ways to address the situation, but unfortunately none are perfect. For example, Comcast's approach until recently has been to use network management tools to block or slow certain kinds of traffic, such as peer-to-peer. P2P is a particular issue for cable ISPs because it uses scarce "upstream" bandwidth. Network management is highly technical, making it hard for policy-makers to understand it, let alone legislate it. So Comcast is now facing a sanction from the FCC over its network management practices (which it says it's moving away from anyway), because the FCC didn't consider them "reasonable" by its own vague definition.

Time Warner Cable is experimenting with another approach: tiers of service carrying bandwidth caps for users. This is a little bit like today's cell phone model - you buy a package of minutes, and if you go over, you pay extra. Though that may sound reasonable, it invites all kinds of confusion for consumers (e.g. "do I watch that show on CBS.com? Maybe I'd better not, I think my kids have watched a lot of YouTube clips this week and I don't want to go over my cap."). Content providers are justifiably concerned about this potential scenario. Separately, for its part, AT&T recently tried to clarify what its users can and cannot expect from their broadband subscriptions.

Yet another route is for broadband ISPs to adopt a much more expansive technical approach to how content is hosted in their networks and delivered to their users. Equipment vendors like Alcatel-Lucent and Cisco believe that ISPs could convert the current bandwidth problem into a full-fledged business opportunity. This would involve ISPs deploying hardware and software that would enable "managed services," each to be delivered at a specified quality level and for a specified price. So rather than a consumer buying a tier, they would buy a specific service offering (e.g. unlimited Hulu, with HD delivery guaranteed).

This wouldn't be a totally unfamiliar concept. Content providers have been buying managed hosting/delivery services for years from CDNs like Akamai, Limelight, Level 3 and others which guarantee certain delivery metrics. But these CDNs' guarantees can't reach into the "last mile" the ISPs' networks serve. So as ever-more bandwidth intensive content is launched such as HD and long-form, content providers should have an increasing motivation to see last mile ISPs offer comparable managed services offerings from ISPs as well.

However, ISP managed services would require fundamental changes in how these companies currently work together, and also invites concerns from "net neutrality" advocates that ISPs could bias in favor of one content provider or another when making their deals. Though compelling in concept, there are many details to sort out in the managed services approach, making it a longer-term option.

All of this just scratches the surface of the growing bandwidth hairball. Layer on the free-speech advocates like Free Press and Public Knowledge and the politicians looking to make hay with constituents and it's evident that the debate over bandwidth is only going to intensify.

What do you think? Post a comment now.

Please join me on August 6th at 11am PST / 2pm EST for a complimentary webinar, "Profiting from the Syndicated Video Economy." I'll be sharing thoughts about the trends in broadband video syndication which I first introduced in this post back from March 2008.

Also presenting will be Greg Clayman, Executive Vice President, Digital Distribution and Business Development, MTV Networks, who will explain his company's successful syndication experiences, and Suzanne Johnson, Akamai's, Senior Industry Marketing Manager, who will detail how their offerings are helping facilitate syndication.

It promises to be a packed agenda, full of best practices and useful data. I hope you can join us!

Click here to register

Azuki Systems, a Boston area startup, is poised to ignite the mobile video market with a comprehensive management, publishing and interactivity platform. Mobile video is a space with a lot of buzz, particularly with the recent iPhone launch. However, buzz has not yet translated to anything close to the activity we've seen in broadband as yet.

I spoke with Azuki's VP of Marketing and co-founder John Tremblay and Director of Marketing Communications Laurie Klausner earlier this week to learn more. They are quick to point out the range of issues that has constrained the mobile video market to date: heterogeneous handsets/networks, constrained navigation, slow and inefficient new services creation, download application requirements, lack of interactivity/social media tools, a weak ecosystem and minimal monetization opportunities (that's quite a list...).

Azuki's "MashMedia Platform," a SaaS offering, addresses all of these with a browser-only requirement, meaning content and services can be delivered to 1.8 billion+ handsets immediately(Azuki's estimate). That alone significantly widens the target universe beyond the minority of handsets that today are "video-ready."

But Azuki correctly recognizes that "mobile TV' is not really the market opportunity to chase. Rather, it's the ability to deliver personalized, contextual and snackable video segments that have seamless interactive and social/sharing features. For content providers, Azuki super-charges current WAP offerings. "Facebook-on-your-phone" would be a little inaccurate to describe the experience Azuki enables for both users and content providers, but many elements of web 2.0 and social media have clearly influenced Azuki's product development vision.

John gave me a spin through a sample app created by WheelsTV, an automotive content company. Azuki ingests content from WheelsTV's CMS (or assets could come from a video CMS like thePlatform, Brightcove, etc.), then processes it into media objects. These in turn feed personalized profiles the user can build, or which can help sort content that may have been virally shared by others.

Azuki can use metadata to break down longer segments into mobile-friendly segments, also navigable through a gallery of thumbnails. Posting videos to your Facebook page is one touch away, and videos can be commented on, rated and shared with others through SMS and email. Targeted advertising completes the picture.

Azuki has a big vision which is backed by a blue-chip founding and management team, with past startup successes including ArrowPoint, SightPath, Airvana and Acopia (names very familiar to those in the Boston tech scene). The company will be rolling out beta content and services partners in the coming months, as it pushes toward commercial release later in '08. For content and service providers looking to beef up their mobile video offerings, Azuki is clearly a company to watch.

(Hat tip to Paul Roberts at The 451 Group for steering me to Azuki)

Survey results being released this morning by Frank N. Magid Associates, a research consultancy, and video aggregator Metacafe provide fresh evidence that short-form video dominates online video consumption. Notably, the survey also goes a step further, finding that 28% of respondents who watch online video report watching less TV as a result.

Meanwhile though, on the same day earlier this week that I was talking to Mike Vorhaus, managing director at Magid, and Erick Hachenburg, CEO of Metacafe about this new survey, Mediaweek was reporting a separate Magid survey, commissioned by CBS, which found that "35% of the nearly 50,000 streamers surveyed...reported that they are more likely to view shows on the network as a result of having been exposed to content on the web."

As I learned from Mike, there's no actual contradiction in these 2 surveys' findings, but you do have to squint your eyes a bit to make sure you're understanding the data accurately.

First, the findings on short-form's domination. The Metacafe survey asked respondents about the most commonly viewed types of video and presented them with category choices. The top 5 selected were all short-form oriented: Comedy/jokes/bloopers (37%), music videos (36%), videos shot and uploaded by consumers (33%), news stories (31%) and movie previews (28%). TV shows comes in at #6 (25%), followed by more short-form categories of weather, TV clips and sports clips.

That short-form, snackable video dominates is not really a huge surprise, given YouTube's market share and the preponderance of virally shared clips. Yet Mike emphasized that short-form does not equal UGC, a point that Erick also highlights. Rather, Mike sees short-form as a legitimate alternative entertainment format that creatives are embracing and audiences are adopting. It is causing further audience fragmentation resulting in the TV audience erosion that the survey also uncovered.

Which of course begs how Magid's CBS survey data squares up. Mike explained that the key here is that the CBS survey is based solely on users of CBS.com. These people naturally have a greater affinity for CBS programming and their likelihood of watching CBS shows on TV will be far higher than randomly-selected audiences (such as in the Metacafe survey). Here's the CBS press release for more details.

So the CBS data suggests that networks should be encouraged that streaming their shows builds loyalty and broadcast viewership, and therefore that they should keep on doing it. Nevertheless they need to be mindful that their shows now compete in a far larger universe of video choices, and that short-form - as a new genre - is something they too should be looking to exploit. Appropriately, all the networks, and many studios, are doing exactly that.

There is no shortage of research concerning consumer media behavior floating around these days. As the two Magid surveys show, superficially data may appear to be conflicting, though in reality it is not. Observers need to make sure they're digging in, and taking away the right lessons.

What do you think? Post a comment now!

thePlatform, the video management/publishing company that's been a part of Comcast since early '06, had a very good day yesterday. First it jointly announced with Time Warner Cable a deal to power the #2 cable operator's Road Runner portal. And the Wall Street Journal ran a story stating that it has also signed deals with the cable industry's #3 player Cox Communications and #5 player, Cablevision Systems, which thePlatform corroborates.

Netting all this out, thePlatform will now power 4 of the top 5 cable industry's broadband portals (all except Charter Communications), with a total reach exceeding 28 million broadband homes, according to data collected by Leichtman Research Group. That also equals approximately 44% of all broadband homes in the U.S. And it's a fair bet that thePlatform's industry penetration will further grow.

I caught up with Ian Blaine, thePlatform's CEO yesterday to learn a little more about the deals and whether the industry's semi-standardization around one broadband video management platform harkens a serious, and I'd argue overdue, industry push into broadband video delivery.

Ian noted that of its various customer deals, the ones with distributors like these are particularly valuable because of their potential for "network effects." This concept means that content and application providers are more likely to also adopt thePlatform if their key distributors are already using it themselves. Ian's point is very valid, as I constantly hear from content providers about the costs of complexity in dealing with multiple distributors and their varying management platforms. Yet the potential is only realized if the distributors actually build out and promote their services, offering sizable audiences to would-be content partners.

This of course has been the aching issue in the cable industry. While they've had their portal plays for years, they've been eclipsed in the hearts and minds of users by upstarts ranging from YouTube to Hulu to Metacafe to countless others, each now drawing millions of visitors each month. While solidly utilitarian, cable's portals (with the possible exception of Comcast's Fancast) are not generally regarded as go-to places for high-quality, or even UGC video. That's been a real missed opportunity.

Ian thinks the industry is experiencing an awakening of sorts, now recognizing the massive potential it's sitting on. This includes its content relationships, network ownership and huge customer reach. Of course, all of this was plainly visible in 1998 as broadband was first taking off, yet here we are 10 years later, and it somehow seems discordant to think the industry is only now grasping its strategic strengths.

Some would explain this as the cable industry being more of a "fast follower" than a true pioneer, a posture that has helped the industry avoid hyped-up and costly opportunities others have chased to their early graves. Others would offer a less charitable explanation: the industry's executives have either been asleep at the switch, overly focused on defending traditional closed video models against open broadband's incursion, or both.

In truth, and as I've mentioned repeatedly, the broadband video industry is still very early in its development, making a "fast follower" strategy still quite viable. Semi-standardization on thePlatform gives the industry a huge potential advantage in attracting content providers. It also gives the industry a more streamlined mechanism for bridging broadband video over to the TV, an area of intense interest now being pursued by juggernauts including Microsoft, Apple, Sony, Panasonic and others.