VideoNuze Posts

Daisy Whitney and I are pleased to present the 28th edition of the VideoNuze Report podcast, for August 21, 2009.

In this week's podcast, Daisy and I first tackle the subject of the Southeastern Conference's new media policy fumble that I wrote about on Wednesday this week. For the upcoming football season, the SEC first banned all social media in the stadiums by game attendees, and later revised it to just exclude fan-generated video of game action.

I took the SEC to task, suggesting that the policy was wrongheaded because it limits the role that fan video could play in expanding the game experience and incorrectly assumes that fan video might actually compete with live game feeds from partners ESPN and CBS. Further, the policy is completely impractical to enforce, requiring security officers to frisk entering students and examine cell phones for video capability.

Daisy raises the example of when YouTube posted the infamous SNL "Lazy Sunday" clip, and NBC ordered it to take the clip down, foregoing tons of free promotion. That incident occurred almost 4 years ago, and since then major media companies have come a long way in adopting the role of user-generated video and video sharing as a promotional tool (see this week's Time Warner-YouTube clip deal as further evidence). On the other hand, the SEC still appears to be living in the stone ages. Somebody there needs to get their game on.

Shifting gears, Daisy explores the idea of how technology is helping video producers collaborate far more extensively than ever before. Producers and creators are now able to share images and raw footage to an unprecedented degree, which is making the creative process far more efficient. That in turn leads to more extensive creative output. Daisy identifies a slew of technology providers who are active in this emerging space.

Click here to listen to the podcast (13 minutes, 50 seconds)

Click here for previous podcasts

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If your family or extended family is like most, then someone in your home is what Josh Grotstein, CEO of Motionbox, refers to as a "Chief Memory Officer" or family "CMO." That's the person who's responsible for toting the camera/camcorder, uploading, developing and distributing the family's photos and videos to family and friends, and storing the treasures for future use.

And just as the proliferation of digital cameras launched Ofoto, Shutterfly and SnapFish (plus sites like Flickr, Picassa, etc.), who targeted the family CMO to help manage and create further value from their growing digital photo collections, the advent of inexpensive video cameras is creating a new set of companies looking to help CMOs manage their family's video assets.

While still early days, the impending explosion of video-capable smartphones, coupled with cheaper HD camcorders and popular low-end video cameras (e.g. Flip, etc.), all suggests this is yet another growing corner of the market fueled by broadband video's adoption. To learn more I spoke last week with Josh and with Andres Espineira, President and co-founder of Pixorial, which recently emerged from private beta.

The primary play here is to get the CMO engaged in the act of editing raw video footage, to stay organized and/or optimize their memories. Sharing becomes a pretty logical extension though, as does getting other stakeholders involved. For example, these stakeholders could include other moms/dads uploading video from their kids' soccer games to multiple wedding guests who shot their own video. Getting these people to mix and edit (and then share and order hard goods/gifts) is the behavior these companies hope to engender. Since most people don't fancy themselves as video editors, the online tools need to be extremely easy-to-use.

Another point of commonality is that these companies all use some type of "freemium" model, where a base level of service is offered for free, with the goal of converting a percentage of freebies to paid services tiers. The freemium model has become widely used online, and has been further popularized recently by Chris Anderson's new book "Free," which contends "freemium" is the way of the future.

Yet as Josh explained, freemium creates a delicate balance, where user behavior must be carefully monitored. The biggest cost driver is storage, so as more free users look to these services as providing back-up redundancy, a higher percentage of them need to be converted to paying in order to make the whole model work. Josh explained that Motionbox (which has raised $17M to date and is the granddaddy of the category with 2M+ registered users) has continuously tweaked its model to optimize the conversion process. It is moving to a model where free users get a finite number of free uploads, and then beyond that you have to pay. In a world where YouTube is the free standard for video sharing, creating and effectively communicating the value of being a premium sub is all-important.

Assuming this hurdle can be surmounted, the proliferation of convergence devices suggests even more tailwind for the category. Think about being able to easily share and access your movies online through devices like Roku, Xbox, Internet-connected TVs, etc. Even incumbent service providers (cable/satellite/telco) could find value in offering personal video services, white-labeled by these companies.

While video is a more complex media format than photos, as more CMOs shoot more video that they want to save and share, it's likely this category will continue to see plenty of growth.

What do you think? Post a comment now.

The college football season hasn't yet officially begun, but the Southeastern Conference (SEC) has already fumbled the ball a couple of times with its confusing new media policy which bans fan-generated videos at games.

The confusion began when the SEC told its member universities that "Ticketed fans can't produce or disseminate (or aid in producing or disseminating) any material or information about the Event, including, but not limited to, any account, description, picture, video, audio, reproduction or other information concerning the Event." As Mashable and others noted, the policy effectively - and bizarrely - barred all social media activity at games. The policy was widely translated to mean that Facebook updates, Tweets, photo uploads and of course YouTube clips would be verboten.

But, faced with a sharp backlash, the SEC softened its stance, allowing "personal messages and updates of scores or other brief descriptions of the competition throughout the Event." Further, it allowed photos to be taken, as long as their "distributed solely for personal use..." But while Twitter, Facebook and the like would be allowed under the new policy, fan-recorded game action videos would still be prohibited.

In an interview with The Buzz Manager Blog, Charles Bloom, the SEC's Associate Commissioner of Media Relations explained, "the intent of the policy....is trying to protect our video rights, as they pertain to our television and media partners. So, someone in the stadium can enter Twitter feeds or Facebook entries and photographs, but the game footage video is something that we will try to protect." He added further "We're in the new year, the first year of our television and digital rights agreement, so there was a feeling that we needed to push this through pretty quickly..."

The SEC indeed has two big money contracts - a $2 billion, 15 year deal with ESPN, and an $800M+, 15 year deal with CBS, which includes an assortment of wireless, VOD, and data rights. The SEC also recently announced a partnership with XOS Digital to launch the SEC Digital Network, intended to be the "largest online library of exclusive and comprehensive SEC sports content available anytime, anywhere." With so much on the line, the SEC pursued the hardline path - pre-emptively prohibiting fan-generated video.

Is this a smart policy? Does fan-generated video really "compete" with professionally-captured video? And is the policy even enforceable? I'd argue the answers are no, no and no, making the SEC look both paranoid and out of touch.

First off, fan video serves to enhance the overall event experience, a key goal of the sports-crazy SEC. One can imagine fans at various locations in the stadium capturing compelling new angles that the TV producers may have missed or edited out. A curated collection of these clips could be added to the SEC Digital Network, possibly in a well-marked, "Fan Zone." Note this would be free content the SEC would be getting, that could also be monetized.

Second, it's ridiculous to think fan-generated video "competes" with the networks' feed. The limited zoom and audio capabilities of an iPhone or Flip video camera mean the fan videos captured in a raucous 90,000+ seat stadium are going to be iffy at best. That's not to say these videos won't have value, but please - nobody is going to turn off their HDTV to watch some fan's live stream. At some point technology may evolve so that a fan's inexpensive video camera can produce comparable video to a professional's; but that point is still a ways off.

Third, the video policy is impossible to enforce. Is security at the stadiums going to frisk students before entering and then confiscate phones with video capabilites, while letting others pass through? All while it tries to hustle tens of thousands of rambunctious fans through the gates? Bedlam would result.

While the SEC rightfully wants to protect the value of its TV contracts, its lack of understanding for how its policy plays out in the real world is plainly obvious. If the SEC - and others - looked at social media and user-generated video as an opportunity rather than a threat then the policies they created would make a lot more sense.

What do you think? Post a comment now.

VideoNuze readers will recall that back in Dec '08, my 2nd prediction for 2009 was that mobile video was finally going to take off. Among the drivers I identified, the main one was clearly the massive, and growing, popularity of the iPhone. But despite all of its gee-whiz capabilities, the iPhone 3G, which was then the latest one on the market, and was running the iPhone OS 2.0, still wasn't really optimized for video.

Flash forward to June '09 and the release of the iPhone OS 3.0, which is downloadable to iPhone 3G, and pre-installed on the iPhone 3GS, and we can see that Apple now has the architecture in place to fuel a massive takeoff of mobile video streaming.

Following is a deep dive explanation of why that is, based on a detailed conversation I had John Bishop, SVP of Business Development & Strategy at Inlet Technologies, an encoding company that's involved with recent iPhone video apps, an excellent new white paper from Akamai, "HTTP Streaming for iPhone Best Practices" and other research I conducted. (For those that want to get further into the weeds, note also that Akamai, Inlet and Turner Sports have an upcoming webinar on this topic.) If you're a video provider looking to capitalize on mobile video distribution, and the iPhone in particular, all of this is crucial to understand.

The most important video-related elements Apple has released are support for HTTP streaming, a new protocol for adaptive bit rate (ABR) streaming and a new iPhone media player that can handle both. In addition, a significant increase in battery life (especially important to retain phone functionality) is enabled by a hardware-based video decoder. And the iPhone supports "HSDPA," an enhanced 3G protocol AT&T is rolling out, which provides up to 7.2 megabit per second delivery, guaranteeing outstanding video quality. All of these elements, when combined with the iPhone's open (well, relatively at least) App Store and web browsing, offer video providers a breakthrough mobile video environment.

Apple's new ABR streaming protocol means a far superior user experience that obviates disruptive buffering and users having to make confusing choices like "hi res" or "low res." ABR streaming was pioneered by Move Networks. Microsoft and Adobe now each have their own ABR streaming approaches.

Importantly, because the iPhone supports H.264, video providers can use existing encoding vendors like Inlet to simply create multiple iPhone-compatible video files encoded at different bit rates that are then delivered to their CDN for iPhone distribution. No intermediary "encapsulation" step needs to be taken to support Flash for example. As the iPhone's media player auto-detects available mobile bandwidth, it continuously re-selects the optimal video file to stream. Inlet makes a key contribution in this process by doing "key frame alignment" - essentially allowing the new file being streamed to start at the same frame where the old file left off. Pretty cool stuff.

From the content provider's standpoint, iPhone-directed video can either be embedded in a web page, or as part of an app, for distribution in the iPhone's gigantic app store. The open web approach of course means it's available for all to see. On the other hand, the app route means greater control of the brand, user experience and business model (e.g. free, paid, authenticated, etc.), though it will involve time and money is needed for development.

This whole paradigm is still so new that we've only begun seeing the first iPhone video apps come to market. Examples include the updated version of MLB.com's At Bat app, the live Aug. 7th concert from Underworld, the PGA Championship app from Turner Sports and the PGA, and yesterday, the launch of the HSN "shop app." I can relate to the value of the PGA app - I was in a car on my way back to Boston on Sunday afternoon, furiously - and unsuccessfully - trying to follow the Yang-Woods showdown shot-by-shot on my Blackberry (I'm a Verizon sub, so no iPhone for me, grrrr....). If I'd had an iPhone, would I have spontaneously paid $1.99 for the PGA app so I could watch the action? In a heartbeat.

What do you think? Post a comment now.

When boxee announced it raised a $6M second round last week it caught my attention for two reasons. First, it was further evidence that broadband video-related companies are continuing to raise money right through the current economic meltdown (industry companies raised at least $64M in Q2 '09, $75M in Q1 '09 and $78M in Q4 '08).

Second, and more noteworthy to me was how much industry experience and insight now backs boxee. The new lead investor in the round was Boston venture firm General Catalyst Partners (joining prior investors Spark Capital and Union Square Ventures), whose portfolio includes broadband video companies like Brightcove, DECA, EveryZing, Maven Networks (acquired by Yahoo), ScanScout, ViTrue and Visible Measures.

Spark also has many investments in the industry, including 5Min, Adap.tv, EQAL, KickApps, Next New Networks, thePlatform (acquired by Comcast) and Veoh. And Union Square is one of the most active firms in the online media/advertising industry with stakes in MeetUp, OddCast, Twitter (with Spark), Tacoda (acquired by AOL) and others.

Beyond the firms themselves are the individuals helping steer boxee. Joining its board from GC is Neil Sequeira, a veteran of the cable industry, who was most recently Managing Director, Technology of AOL Time Warner Ventures. Already on the board is Spark's Bijan Sabet who knows the cable/satellite ecosystem equally well, having done stints at Moxi, WebTV and Apple and Union Square's Fred Wilson, who is deeply immersed in online media and writes a hugely popular blog.

I corralled Neil and Bijan (two old friends) for a phone interview late last week to explain boxee's future and where it fits into the current video ecosystem. Following is an edited transcript.

VideoNuze: What attracted you to invest in boxee?

Neil Sequeira: Three things. The boxee team, the market opportunity and our ability to be a great partner. We think boxee has the potential to be the next generation "Firefox for media," a widely- used consumer platform. That's incredibly exciting to us.

Bijan Sabet: We've been involved with boxee for a while now, and we're convinced the time is right for something like this. boxee has the right ingredients: it is open source and includes social media capabilities, an app store and a huge community of users/developers.

VideoNuze: boxee has gained a loyal following, but it doesn't have a business model yet. What do you see as boxee's business model and it what time frame must it develop it in order to succeed?

BS: boxee's still a very young company, but we have a number of ideas around business models. But the key is patience. The company has a very low burn rate, with around 16 people or so , most of whom are in Israel. The focus for now is building the product and the user base. And the company's been very successful doing that. Last year boxee had 10,000 users, now it has 600,000.

NS: It also has a very excited developer community. But I agree - patience is needed here. Too often companies can get themselves focused to early on a specific business model, which then constrains them. With the new funding, box has room to see how things evolve.

VideoNuze: Hulu recently told boxee to remove its content. What do you think boxee needs to do to win Hulu (and others) onto its platform?

NS: At a high level boxee we believe boxee is an incredible friend to content providers, and we want to work with everyone. We're big believers that consumers want access to everything and that's where the market will go over time.

BS: All of us are Hulu fans and of course would love to have Hulu on boxee. But each content provider has its own business model, and has to decide what works best for them. boxee will continue to be a content provider-friendly platform, where different business models can be used and different technologies integrated. We think that's powerful.

VideoNuze: How should established video service providers (i.e. cable/satellite/telco) regard boxee - as friend, foe, or something else?

NS: We want boxee to be regarded as friend and we think boxee can add a lot of value to the ecosystem. Consider for example, the case of TiVo. Early on it looked like a foe. But now see how Comcast is integrating TiVo into its set-top boxes and driving incremental revenue. boxee brings great search, apps and context to the broadband viewing experience. All that will drive usage of broadband Internet connections, which in turn helps "fill the pipe" making cable and telco Internet access services that much more valuable to users - and to their providers.

BS: Agreed. We believe that in an IP world, these things aren't either/or, mutually exclusive. Again look at Comcast, which has great assets like Fancast, and is now working on entitlements with TV Everywhere. boxee can help drive more value from them. This is especially true for certain user segments, like new college grads, for whom the Internet is now far more important than is traditional TV. The point is traditional service providers need to figure out how to delight a variety of user segments. We believe boxee can help.

VideoNuze: You guys and your firms have deep relationships in the cable/satellite/telco industries. How are those folks reacting to boxee?

NS: People in the ecosystem are taking a "wait-and-see" approach. There's a certain amount of fascination, and though we don't see any impending deals, Avner (Ronen, boxee's founder/CEO) has multiple conversations ongoing with the industry.

VideoNuze: Who are boxee's primary competitors?

BS: What Apple and Microsoft are doing is most competitive, though their approaches include both hardware and software. We think of boxee like Android (Google's mobile OS), sort of the "inside-out" version of Apple TV. And we believe convergence device/hardware providers want alternatives.

VideoNuze: How about Roku?

NS: We believe Roku should be partners with boxee. Hardware companies have core competencies and typically those don't include open source media platforms. So boxee can help devices like Roku be even better. We'll have a number of device deals to announce soon.

VideoNuze: A lot has been written about "over-the-top" services. Are they starting to succeed, and if so, what must happen for them to gain further success?

NS: Well, yes, when we look at what Netflix and others are doing already, we do believe over-the-top services are starting to succeed. And we think this isn't necessarily a bad thing for cable operators for example. That's because the video business has had margin compression due to rising programming costs, whereas broadband Internet service has been incredibly profitable for them.

Consider that that cable operators didn't offer DVR or voice services just 10-11 years ago, but now they are a significant driver of ARPU (average revenue per unit). There's a lot more that cable operators can derive from broadband services than they currently are, considering the IP connection is now - for many - the most important connection they have. Content providers know this and are looking for more, not fewer, ways to distribute their content.

BS: Agreed, look at an example like CNBC, whose ratings are down something like 30% year-over-year. What's causing this? Is there demo changing? Is the web providing alternatives? Some of both? The point is content providers need to figure out how to control their destiny. That doesn't mean they have to give their stuff away for free. But it does mean they need to figure out how to distribute as effectively as possible. We want to help them do that. You can't go backwards here. Broadband is too interesting and too important to too many people.

VideoNuze: Thanks guys.

Following are 4 news items worth noting from the week of August 10th:

Discovery Channel signs onto Comcast On Demand Online trial - Comcast added yet another cable programmer this week to the roster of those participating in its TV Everywhere trial. Discovery will make available episodes of "Man vs. Wild," "Swords," "Stormchasers" and "Verminators" though with some delayed windows that take a little edge off their appeal. Comcast has made a ton of progress corralling networks for its trial, but 4 of the big 5 cable network owners - Disney, Fox, NBCU and Viacom - remain holdouts. No coincidence that the first 3 are Hulu's owners.

Swarmcast powers MLB.TV on Roku, introduces "Autobahn Live for CE" - Following on Roku's announcement this week that it is offering MLB.TV, Swarmcast announced it was powering the service through a new offering called "Autobahn Live for CE." Swarmcast's COO Chad Tippin explained to me that integrating with CE devices that drive broadband/TV convergence is a key company goal. Chad is confident that Swarmcast's high-quality, scalable HTTP streaming service will work on these various CE devices, and that as the number of them deployed swells, a new "long tail of live sports" will flourish. Live sports and events (e.g. concerts) could be a significant contributor to device adoption. For example, picture getting a coupon for $50 off the purchase of a Roku when you buy a pay-per-view of a streaming blockbuster concert.

Babelgum grows to nearly 1.7 million unique visitors in July, 2009 - I heard from Michael Rosen, EVP and Chief Revenue Officer at Babelgum this week, with news that the site has grown to nearly 1.7 million unique visitors in July (comScore), following its U.S. launch in April. I profiled Babelgum back in April and was cautiously optimistic about its approach to curate high-quality, independently-produced video into 5 channels (music, film, comedy, Our Earth and Metropolis). The site is fully ad-supported. Babelgum's growth comes on top of a slew of made-for-broadband video initiatives I detailed recently. The NY Times also had a great story this week on how independent filmmakers are taking distribution into their own hands. Despite the recession, this corner of the broadband market seems to be hanging in there.

Zune HD coming Sept 15th - Microsoft at last announced this week that the Zune HD digital media player will be in retail on Sept 15th, with pre-orders now being accepted. Zune HD introduces a touch-screen interface, 720p video playback, HD radio and other goodies. It is sure to raise the visibility of high-quality portable video another notch. But I find myself wondering: as the iPhone and other smartphones incorporate video playback (and recording) into one device, how large is the market for standalone high-end media players like Zune? Related, the iPhone's risk of cannibalizing the iPod has become a hot topic recently. Things to ponder: will users want to carry 2 devices? Or might they appreciate the ability to drain their battery watching video without risking the loss of their cell phone? Lots of different things in play.

Daisy Whitney and I are pleased to present the 27th edition of the VideoNuze Report podcast, for August 14, 2009.

In this week's podcast, Daisy and I discuss "The Future of Internet Video," a new research report released this week by eMarketer. Coincidentally, we had each read the press release about the report and found ourselves disagreeing with its conclusions.

As Daisy explains, the report essentially asserts that for online video advertising to continue to grow, the viewing experience between the computer and TV must converge. The logic is that TV's "lean-back" viewing mode is a preferred context for advertisers, and therefore for advertising against online video to grow, the video must be accessible on TVs.

Daisy takes issue with this, arguing that while convergence is great, there are indeed times when watching on a computer is preferred by consumers. A "new norm" has emerged with the computer as a parallel viewing platform. Rather than looking at this as an obstacle, advertisers should embrace consumers' behavior, and capitalize on it.

My main disagreement is that eMarketer believes that a "lean-back" TV viewing mode is preferred by advertisers over the "lean-forward" computer viewing mode. While eMarketer argues the computer mode creates viewer distraction and incents clicking away from ads, I see it the other way around: when watching video on computers, ads cannot be skipped, calls to action can be easily implemented (e.g. "click here to receive....) and everything of course can be measured. Contrast this with the rampant ad-skipping that now occurs in DVR-enabled homes.

Listen in and draw your own conclusions.

Separately, I can't resist touching on the topic of "authenticity" of broadband video I wrote about earlier this week in "How I Got Punked by the Megawoosh Waterslide Video." I received lots of feedback on this post, with plenty of people 'fessing up that they got punked too, while others called me the "poster child for gullibility!" Either way, authenticity of broadband video is a fascinating topic.

Click here to listen to the podcast (13 minutes, 58 seconds)

Click here for previous podcasts

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Please save the date for 2 amazing VideoNuze events coming up in October.

First, on Tuesday, Oct. 13th, VideoNuze will host its next "VideoSchmooze" broadband video leadership evening at the magnificent Hudson Theater in New York City. Microsoft Silverlight is the lead sponsor of the evening, with Akamai, FAST Search & Transfer and mPoint currently on board as supporting sponsors. Once again, NATPE is partnering with VideoNuze for the event.

As with the March '09 VideoSchmooze, the evening will run from 6-9pm and feature great industry networking plus a discussion I'll moderate with an awesome group of industry executives:

• Dina Kaplan - COO and co-founder, blip.tv
• George Kliavkoff - EVP & Deputy Group Head, Hearst Entertainment & Syndication (and formerly Chief Digital Officer, NBCU)
• Perkins Miller - SVP, Digital Media and GM, NBCU Sports & Olympics
• Matt Strauss - SVP, New Media, Comcast

Each of the panelists and their companies are playing a key role in broadband video's growth and evolution. The title of the discussion is "Realizing Broadband Video's Potential" and we'll dig deep into all of the key technology, business model and strategy topics that I write about each day, while also allowing ample time for audience Q&A.

Early bird registration will open soon. At the last VideoSchmooze in March, we had 270+ attendees, so if you're interested in joining us, I encourage you to register early to secure a spot.

Then on Monday morning, October 26th, VideoNuze will host its second "Broadband Video Leadership Breakfast" at the CTAM Summit, this year in Denver, CO. thePlatform is the lead sponsor of the breakfast, with Akamai, ExtendMedia and KickApps currently on board as supporting sponsors. During the sit-down continental breakfast, I'll moderate a panel titled "How Cable Succeeds in the Broadband Video Era" with:

• Ian Blaine - CEO, thePlatform
• Rebecca Glashow - SVP, Digital Media Distribution, Discovery Communications
• Bruce Leichtman - President and Principal Analyst, Leichtman Research Group (the leading broadband and cable industry market research firm)
• Plus 1 other executive

As VideoNuze readers know, the cable TV industry - both operators and networks - is a central player in broadband video's ongoing development. You can expect to hear an in-depth and data-driven discussion of TV Everywhere, walled-garden vs. open video distribution strategies, paid vs. ad-supported business models, changing consumer viewing preferences and behaviors, viability of "over-the-top" competition and recent technology/convergence device developments.

I look forward to seeing you at one or both of these exciting industry events!