VideoNuze Posts

Early bird discounted tickets to VideoNuze's next "VideoSchmooze" Broadband Video Leadership Evening on Oct. 13th, 6-9pm in NYC, will end next Tuesday, and then revert to their standard prices. Save by registering today! An early bird ticket for $60 includes hors' d'oeuvres and a drink (cash bar to follow), the panel discussion plus great industry networking.

We have no shortage of topics to discuss and dig into. For example, how are TV Everywhere trials progressing, and what will it take to get all cable networks on board; how are sports leagues like the NFL and MLB benefiting from their aggressive push into broadband video; what are independent video producers doing to weather the advertising downturn; how threatening are "over-the-top" video services to incumbents, and plenty more. There will be lots of time for audience Q&A as well!

Following the panel, we'll have networking and cocktails from 7:45-9:00pm. It will be a great opportunity to meet the panelists and industry colleagues. This is a highly targeted and valuable networking opportunity - past VideoSchmooze attendees have repeatedly told me about new partners, customers and job leads they've gained from VideoSchmooze.

VideoSchmooze will be held at the Hudson Theater, a beautifully renovated turn-of-the-century venue on West 44th Street just off Times Square. NATPE, VideoNuze's partner since launch, is teaming up with VideoNuze for the event. And I'm extremely grateful to lead sponsor Microsoft Silverlight and supporting sponsors Akamai Technologies, Digitalsmiths, FAST (a Microsoft subsidiary), FreeWheel, Horn Group and mPoint for making the evening possible.

Space is filling up fast for this must-attend event....I encourage you to register now to secure a spot and save with the early bird discount.

Click here to learn more and register for the early bird discount

I look forward to seeing you on Oct. 13th!

I'll be participating in 2 complimentary upcoming webinars that will be of interest to VideoNuze readers.

First, this Thurs, Sept. 23rd, Colin Dixon, Senior Partner at The Diffusion Group and I will present "The Terror of Terminology: Demystifying Broadband TV." Colin is a savvy broadband analyst, with whom I often compare notes on the market. We've both been hearing similar types of questions in the market, so we've decided take on 5-6 items and address misunderstandings that linger.

We'll discuss the difference between "broadband TV" and "Internet TV," whether online video ads can support long-form premium content, why so many cable programs are available online, but so few cable programs are, what's the difference between hybrid set-top boxes and Internet set-top boxes, and why TV Everywhere is so significant. Expect a fun and educational conversation, with plenty of time for audience Q&A. Learn more and register.

Then on Wed, Sept. 30th I'll be participating in a Brightcove-sponsored webinar, "New Video Distribution Strategies - Taking Video Beyond the PC." Other speakers include Chris Little, Technology Director at Brightcove and Rich Ezekial, Director of Strategic Partnerships, Connected TV, Yahoo. Accessing online video on other devices like TVs and smartphones is one of the hottest areas of the broadband video landscape, and we'll be digging in to key trends, best practices and monetization opportunities. In particular, we'll hear specifics about Yahoo's Connected TV strategy. Learn more and register.

I look forward to seeing you on one or both of these exciting webinars!

VuClip has an ambitious goal of making video search available to all video-enabled mobile handsets. Yesterday the company announced a $6 million Series B round, led by Jafco Ventures, with participation by prior investor NEA. The round brings to $14.2 million the total amount raised to date. I caught up with Craig Gatarz, VuClip's Chief Administrative Officer yesterday to learn more.

VuClip offers a direct-to-consumer search portal, which the company plans to have account for 60-70% of its business, and a white-label solution to power video search for content provider partners' WAP sites which will account for the remainder. VuClip brings a couple of differentiators to the market. First is an ability to detect the type of handset you're using and its specific multimedia capabilities. This allows VuClip to serve video in a format compatible with and optimized for 3,000 different handsets in 150 different countries.

VuClip does this by keeping a database of User Agent Profiles ("UAProf") which most handset manufacturers offer. But with this data scattered about, it isn't trivial to build a database like VuClip's (which it calls "Devicepedia"). Once the handset type is detected and the video selected from among the search results, VuClip then does an on-the-fly transcode to suit that phone's particular capabilities.

I did a little test and VuClip passed. I have a Blackberry Pearl, which does not support Flash, from Verizon Wireless. I did a search on VuClip on my BlackBerry for "David Pogue" and found a result at Metacafe. Separately I found the same result online at Metacafe.com and verified it was in Flash. I clicked play on the VuClip result, and sure enough, the same original Flash video played out. It took a few seconds for it to start and though it wasn't full-screen, it worked.

While VuClip appears to succeed on the technical side, its business approach is still confusing to me. For the portal, Craig said VuClip has indexed over 100 million videos. But an important caveat is that VuClip has not indexed any content from any premium providers unless it has a partnership deal with them. In India and China, where VuClip's main focus has been, it has signed a number of the major providers (plus wireless carriers for promotion). But in the U.S. where it is less used, Craig identified only CBS and Versaly Entertainment as current partners, with others in the hopper. This explains why when I searched for David Pogue I didn't get any results at NYTimes.com, which would have been most logical.

You might ask why a company positioning itself to be a search leader would proactively decide not to index all video content that's available, since doing so inevitably creates a highly incomplete search experience for users? As best I understood, it's because VuClip wants to be part of the ad revenue stream associated with the video view. It has developed something it calls "Dynamic ad stitching" which allows it to pull ads from different ad servers and properly transcode those as well. Absent this step, if the content provider has an existing pre-roll ad it has a hit-or-miss chance of being viewable on that particular handset. Dynamic ad stitching allows VuClip to approach content partners with the proposition that it can not only enhance viewership of their videos, but also help monetize them.

While it will take VuClip time to build its U.S. content partnerships, the company seems to address well the thorny problems of the highly heterogeneous mobile video market (different handset capabilities, browsers, operating systems, wireless networks, etc.) which have handicapped video's growth. Conversely, on the wired broadband side, these things have been largely non-issues, significantly contributing to the market's strong growth.

What do you think? Post a comment now.

My hopes that the FCC, under its new chairman Julius Genachowski, would undergo a much-needed course correction with respect to net neutrality, were dashed yesterday. VideoNuze readers will remember that my 3rd prediction for 2009 was that net neutrality, under President Obama's pragmatic leadership, would likely remain dormant.

Mr. Genachowski's policy address, "Preserving a Free and Open Internet: A Platform for Innovation, Opportunity, and Prosperity" made clear that regrettably, he will be a forceful advocate for unprecedented Internet regulation. Mr. Genachowski has proposed codifying the FCC's four existing principles into Commission rules, and adding two new, additional principles. But read beyond the high-minded rhetoric about "preserving the openness and freedom of the Internet" and need for "fair rules of the road," and what you'll instead find is a jumble of illogical premises, inflammatory and threatening admonitions and pre-emptive, non fact-based conclusions.

I know my opposition to net neutrality regulations will bother many of you. So before I'm accused of being a cranky regulatory libertarian with nothing but distaste for government intervention, let me assure you I am anything but. In fact, I'm a strong believer that when market failures occur, the government should aggressively intervene. If you've had the experience of hearing my rants on the gross incompetence of our nation's financial regulators in contributing to our recent near catastrophic market meltdown, you will have no doubt about the sincerity of my beliefs.

That said, I'm also a fierce proponent of allowing market forces and competition to work in determining winners and losers, and that when this occurs, government influence, which is often distortive, should remain in check. If ever there was an example of a well-functioning market, it is the Internet, which since bursting into the public's consciousness 15 years ago has operated virtually regulation-free. This open and free Internet has spawned myriad innovative services that consumers enjoy today. And while the Internet has created billions of dollars of wealth for astute investors and entrepreneurs, it has also ruthlessly gobbled up many other billions of dollars ventured on ideas of illusory potential. In this respect, it could be argued that among the Internet's many marvels, it is likely the most efficient capital allocation mechanism we human beings have ever created.

By far the most sizable capital investment in the Internet landscape has been in the so-called "last mile" of broadband access. The 70 million American homes, thousands of educational institutions and countless businesses of every size that receive fast, affordable broadband Internet access is largely attributable to the hundreds of billions of dollars of investments that cable operators and telephone companies have made in upgrading their networks over the past 15 years - upgrades that continue to this day and are planned well into the future. Investments, it should be noted, that were made without a penny of government subsidies, tax breaks or bailout funds. These companies were driven by robust supply and demand forces, quantifiable business cases, vigorous competition, technological innovation and supportive lenders and shareholders. It is not an exaggeration to say that the broadband networks these companies built are the very foundation of our 21st century economy.

You might think that in a major policy speech premised on the importance of the Internet to our daily lives and commerce, the new FCC chairman might dwell for a few minutes on these contributions, if for no other reason than to demonstrate his understanding of what's truly at the core of today's Internet experience. But you would be wrong; instead the new FCC chairman used just over 50 words in a passing reference. You might also think that these companies' track records of being market driven might also influence the new chairman with regard to whether decisive regulatory action, particularly in the thorny area of network management, is now necessary. Here again you'd be wrong.

In fact, with yesterday's remarks, Mr. Genachowski has picked up where his predecessor, Kevin Martin left off: pre-emptively tagging the nation's cable and telco broadband ISPs as untrustworthy conspirators plotting to wall-off the Internet to all but their own favored services. Though professing to "ensure that the (FCC's) rulemaking process will be fair, transparent, fact-based and data-driven," by first proposing the rules be adopted, before evidence of their very need has been established, the chairman has only ensured that the rule-making process will be anything but what he says he wants it to be. Deciding that net neutrality regulations are essential, after being officially on the job for less than 90 days and absent supporting data to point to, does not inspire confidence about the likely fairness of the Genachowski-led Commission.

Mr. Genachowski further upped the ante by suggesting that if such regulatory action is not taken, perilous consequences to the Internet's openness await. His choice of words - that we could see "the Internet's doors shut to entrepreneurs," "the spirit of innovation stifled," "a full and free flow of information compromised" and that "if we wait too long to preserve a free and open Internet, it will be too late" - represent the kind of inflammatory, unjustified hyperbole that only serves to distract from the facts and data yet to be reported. Such comments virtually guarantee that the debate will be transformed quickly into an escalating war of opinionated arm-waving (as have prior FCC open sessions). Did we not just witness our crucially important health care debate devolve into just this sort of spectacle? And did candidate Obama not remind us, rightfully, that "words matter?"

But worst of all is that despite the new chairman's lengthy service in the private sector, his remarks suggest a fundamental misunderstanding of how product innovation and the broadband market actually work. His view is that the government must pre-emptively step up to the plate to ensure that the Internet remains free and open, or innovation and investment will be curtailed, is just plain wrong.

The reality is that aside from random acts, no pattern of broadband ISP misconduct has ever been proven. Major industry players know this and their actions suggest they are utterly untroubled by the current state of laissez-faire Internet regulation. Consider recent deals predicated on the belief that the Internet will remain open and bandwidth plentiful: NBC, Fox and Providence Equity Partners (and later Disney) invested $100M in Hulu at a $1B pre-launch valuation; Cisco acquired Pure Digital, maker of the Flip video camera for $600M in a bid to further fuel user-generated video; and Marc Andreessen's investment firm is participating in a buyout of Skype valuing the firm at $2.75B. Then there's Apple, which has invested untold tens of millions of dollars upgrading the iPhone and iPod Nano to have video capabilities. And let's not forget Netflix, Intel, Sony, Microsoft and many others who are moving aggressively forward with bandwidth-heavy broadband video products and services. Looking ahead, as I suggested last week looms "TV Everywhere 2.0," portending massive over-the-top video competition.

But it's not just the giants that are investing. By my analysis, early and mid-stage broadband video-related companies raised almost $220M over the last 3 quarters, in the midst of the worst venture capital slump in memory. And as I'll report next week, Q3 '09 has been the highest fund-raising quarter of the last four. Deals are being done because history has repeatedly shown investors that in order to remain competitive and meet surging consumer demand, network operators are certain to continue to invest in upgrading their networks. When I helped start Continental Cablevision's high-speed Internet business 15 years ago, 1.5 mbps service was breakthrough; now 100 mbps or more is the state-of-art for wireline broadband.

Contrary to Mr. Genachowski's fear that the market will be immobilized absent FCC intervention, industry participants are moving briskly forward, confident that market and competitive forces will compel network operators to continue creating abundant, open bandwidth to support their new services.

This phenomenon appears to be true in the mobile space as well. AT&T's recent decision to accelerate its 3G wireless buildout is due mainly to high iPhone data traffic. And it should be noted that Apple's rejection of the Google Voice app (which continues a pattern of unfettered App Store selectivity by the company) raises the important question of who's the real gatekeeper when it comes to open wireless services - the network operator or the handset maker? How does Apple's newfound power figure into the FCC's regulatory paradigm?

Let's be clear: it is absolutely essential that the Internet remain open. But imposing new net neutrality and Internet regulation is not the way to ensure this. Instead, net neutrality remains a solution in search of a problem. With brushfires burning in every corner of the American economy, Washington's policy-makers would be wise to focus on real problems, not imaginary ones. The Internet has worked magnificently to date and there's every reason to believe it will continue to do so. The last thing we need are the unintended consequences that government intervention often brings. For now, FCC vigilance is required, but new regulations are not.

What do you think? Post a comment now.

Another building block for delivering video applications to the home through broadband connections is being announced this morning by ActiveVideo Networks and Videon Central. The companies are unveiling a partnership in which AVN's client software will be embedded in Videon's middleware stack used in millions of CE devices. I talked to AVN's SVP of Marketing Edgar Villalpando and Videon's VP of Business Development Michael Daulerio last week to learn more.

For those not familiar with AVN, it is a cloud-based provider of interactive video applications, with customers like Showtime, Fox Reality, HSN and others. AVN initially focused on delivering apps to service providers' set-top boxes, but has also expanded into the Internet-connected CE space. Videon provides middleware to semiconductor and CE manufacturers, driving user interface and navigation in various devices. As an example, its middleware can be found in over 2M Blu-ray players from Samsung, LG, Insignia and others.

As Edgar and Michael explained, the goal of the partnership is to enable content providers and others to deliver up-to-date video apps to the growing universe of connected-CE homes. In some ways this is comparable to what Intel and Yahoo are doing with the Widget Channel and other industry initiatives.

To understand how this works, think of a consumer who rents The Dark Knight Blu-ray disc. The disc itself has additional content like Director's cuts, etc. The problem is that the disc's content is fixed, whereas there's always new Dark Knight-related content being produced (e.g. branded entertainment, product-tie ins, games, user-generated content, etc.). Simply using a bumper to promote the Dark Knight's URL on the disc is a start, but it leaves a lot to be desired in terms of specific promotion. Given the amount of money now involved in ancillary revenue streams, Warner Bros, the Dark Knight's distributor, is highly motivated to drive stronger engagement.

Once implemented, a Blu-ray player with AVN/Videon that's connected to the web allows additional video apps and targeted advertising to be presented seamlessly. The idea of joining offline and online media is a powerful draw for content providers trying to build larger franchises around specific titles. The apps are built with AVN's tools that use web standards like JavaScript and HTML. And with cloud-based delivery, storage needs are minimal and content updates can be frequent. Of course, this is not just restricted to Blu-ray players; Michael explained that Videon's middleware is being included in Internet-enabled TVs and other devices as well.

There is much speculation about how convergence between broadband and TVs is going to unfold. A big sticking point is how the convergence device gets into the home and who pays for it - consumer, content provider or both. From my perspective, building blocks like AVN-Videon are important because they open up new revenue opportunities for content providers and others to help offset the cost of the device. I expect these kinds of initiatives throughout the ecosystem will only accelerate, bringing the convergence era ever closer.

What do you think? Post a comment now.

The partnership between Magnify.net and American Business Media announced last week is further evidence that online video is gaining ground in b-to-b media, and that video shouldn't be looked upon as solely consumer-centric.

For those not familiar with ABM, it's a professional association for 300 business information companies, comprising 6,000 print and online titles, plus trade shows and databases that reach over 100 million professionals. Late last week Magnify's Steve Rosenbaum gave me more details about the deal.

Magnify has focused consistently on helping vertical publishers create engaging video offerings. It does so with tools to curate and aggregate all video relevant to the publisher's audience, rather than requiring the publisher to create all of the video itself. I originally wrote about Magnify's approach a year ago and how it was powering Taste of Home magazine's video initiative.

For editors, the challenge - and opportunity - is to evolve from the mindset of controlling all editorial, and instead think of the web as a rich trove of content that can be sorted through so that the best nuggets can be offered to their audiences. With the cost of creating high-quality original video still relatively high, the economy suffering, and product companies and users getting better at creating worthwhile video, this approach makes a lot of sense.

In the ABM deal, Magnify will initially power ABM's own web site, but the more important part of the deal is that it gives Magnify a stamp of approval to seek out ABM members to power their video offerings. Many of these companies, which focus on niche markets, have long offered their IP in multiple forms - print, online, email, databases, conferences, etc. Video is the newest media opportunity for them, and Magnify's goal is not only to support original video they create, but also educate them about how to harness video that's available from 3rd party sources.

In general, video is becoming more central to b-to-b media. For example, just last week, the WSJ, long an online video leader among business media, launched the News Hub, a twice-per-day show featuring its reporters and guests. As a side note, the show feels a lot like cable with its split screens, fast cuts and guests talking over each other. The News Hub joins sibling FoxBusiness.com which offers a robust video section. Moving a little more into the consumer space, CNNMoney.com continues building on its leadership. There are scores of other video suppliers as well.

Increasingly b-to-b media seem to be recognizing that with their audiences spending more and more time on sites like YouTube and Hulu, it is essential to reach them with video as well. I see no let up in this trend.

What do you think? Post a comment now.

Following are 4 news items worth noting from the week of Sept. 14th:

1. Ad spending slowdown continues - TNS Media Intelligence reported that 1st half '09 U.S. ad spending declined 14.3% vs. a year ago, to $60.87 billion. Spending in Q2 '09 alone was down 13.9% vs. a year ago, the 5th straight declining quarter. The only bright spots TNS reported were Internet display ads (up 6.5%) and Free Standing Inserts (up 4.6%).

Rupert Murdoch and others in the industry have lately been suggesting that advertising is starting to improve and that the worst is behind us. But TNS SVP Research Jon Swallen was less sanguine, saying only that "Early data from third quarter hint at possible improvements for some media due to easy comparisons against distressed levels of year ago expenditures." While the online video ad sector has held up far better than most, the ad spending crash has caused many in the industry to re-evaluate whether ad-only models are viable, particularly for long-form premium content online. Subscription-oriented initiatives will only intensify the longer the ad slowdown lasts.

2. Veoh's court victory is important for all in the industry - I'd be remiss not to note the significance of U.S. District Judge A. Howard Matz's granting of Veoh's motion for summary judgment, effectively throwing out Universal Music's suit alleging Veoh had infringed UMG's copyrights. Judge Matz articulated the specific reasons he believed Veoh operated within the "safe harbor" provisions of the DMCA.

As a content producer myself (albeit at a completely different level than a music publisher or film studio!), I've generally been a huge advocate of copyright protection. But the fact is that DMCA - for better or worse - set out the rules for digital copyright use and they must be enforced clearly and forcefully. Anything less leaves the market in a state of confusion, with industry participants wary of inviting costly, time-consuming legal action (Veoh has said the UMG suit cost it millions of dollars in legal fees). For online video to thrive the rules of the road need to be well-understood; Judge Matz's ruling made an important contribution toward that goal.

3. Digitalsmiths announces new senior level hires - This week Digitalsmiths announced that it has brought on board Josh Wiggins as its new VP, Business Development, West Coast and two others, who will collectively be the company's first L.A.-based presence. They'll report in to Bob Bryson, SVP of Sales and Business Development.

I caught up with Digitalsmiths' CEO Ben Weinberger briefly, who explained that with tier 1 film/TV studios and other content owners (news, sports, etc.) the company's major focus, it was essential to have a full-time presence there staffed with people who know the industry cold. Ben reported that the company has honed in on target customers who have very large files, have video as their core business/revenue center, require sophisticated metadata management and often need a rapid video capture, processing and playout workflow. Digitalsmiths is proving a solid example of how to effectively differentiate through product and customer focus in a very crowded space. Announced customers include Warner Bros., Telepictures and TMZ.com, others are in the hopper (note Digitalsmiths is a VideoNuze sponsor).

4. New EmmyTVLegends.org site is a worth its weight in gold - On a somewhat lighter note, this week the Academy of Television Arts & Sciences Foundation unveiled EmmyTVLegends.org, which offers thoughtful, introspective video interviews with a wide range of TV's most influential personalities. If you have nostalgia for the classic TV shows from your youth, or just appreciate the amazing talent that has made the medium what it is, this site is for you. It is remarkably well-organized and accessible and brilliant proof of online video's power in presenting invaluable material that was previously available only to a lucky few.

I happily got lost in the site listening to Alan Alda talk about the fabulous writers of M*A*S*H and Steven Bochco describing the magic of "Hill Street Blues." I searched by "Happy Days" and quickly found the exact clips of Ron Howard talking about the role of his "Richie Cunningham" character in the show's arc and Henry Winkler revealing the influence of Sylvester Stallone on how he developed the voice of "Fonzie." Mary Tyler Moore is irresistible discussing specific scenes of the Mary Tyler Moore show and her poignant memories of Mary Richards navigating the working world. Kudos to the Academy, the site is a gem.

Enjoy the weekend and L'shanah tova (Happy New Year) to those of you, who like me, will be observing Rosh Hashanah this weekend!

Daisy Whitney and I are pleased to present the 32nd edition of the VideoNuze Report podcast, for September 18, 2009.

This week Daisy and I first discuss my post from earlier this week, "How TV Everywhere Could Turn Cable Operators and Telcos Into Over-the-Top's Biggest Players," which has become one of the most popular posts I've written in the past 2 years.

In the post I asserted that if certain cable operators and telcos were to unbundle their TV Everywhere ("TVE") offering from their video subscription requirement, they could offer a "TVE 2.0" service outside their current geographic areas. In effect they'd be going over the top of their industry counterparts, invading new service territories.

It would be a bold move, but one that I suggested might be irresistible. Between slowing growth in their existing markets and new competitors rolling out OTT services nationwide, big cable operators and telcos could face the prospect of being turned into marginalized, geographically-bound players. I've heard from lots of folks this week about the TVE 2.0 concept - some who think it's inevitable; some who think it's inconceivable. I explain more in the post and on the podcast. You decide.

Meanwhile, Daisy provides an update from this week's iMedia Brand Summit, where marketers and agencies spent a lot of time discussing the effectiveness of traditional TV advertising vs. online video advertising. Daisy shares some very interesting statistics she gathered at the conference concerning how some industries are overspending in TV and getting underperformance. As Daisy explains, the key to advertising is no longer reach, but targeting. Listen in to learn more.

Click here for previous podcasts

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