VideoNuze Posts

With momentum growing for "TV Everywhere" type services, it's to be expected that technology vendors will begin offering products that meet the evolving range of requirements video service providers will encounter. One example is ExtendMedia, which today is introducing OpenCase "Publisher." With TV Everywhere type services still so new, even labeling the various capabilities video service providers will require to succeed is still a work in process. In a meeting last week, Extend's executives helped me understand what will be needed and what the Publisher product provides.

To date, much attention around TV Everywhere has focused on "authentication" - how a service provider would implement credentials (e.g. logins and passwords) so only authorized users could access its online video catalog. This gatekeeping step has rightly received a lot of focus, because leakage of any premium video must be prevented. Authentication is tricky though, as users must be verified as being who they say they (e.g. passwords haven't been improperly shared). But assuming for a moment that tight authentication processes are implemented, other challenges and opportunities remain.

For example, once authenticated, service providers need to be able to expose only those parts of their overall catalog each specific user is entitled to view (e.g. if I'm not an HBO subscriber, I shouldn't get access to HBO programs online). This notion of "service management and provisioning" means service providers need to create different bundles online, just as they have done offline. And the bundles need to be easy to change: a service provider may want to change a channel lineup and/or a subscriber may want to add a new channel.

Service management and provisioning itself requires that there's a scalable content management system in place. The service provider will need to be able to ingest lots of premium video from many different sources while also and accepting and assigning specific rules to each program as needed (e.g. one program may be available immediately and indefinitely, while another will be available just for a week, but starting at a specified future time). In addition, metadata must be assigned so programs can be tracked, and searched by users.

The above requirements are further complicated because TV Everywhere services are envisioned to work across multiple devices as well. That means that authentication must also work on smartphones, gaming consoles, portable media players, etc. The devices themselves must be registered and recognized so they can be linked to users' accounts. In some cases license terms will further restrict how specific parts of services are accessible, and under what addition terms (in turn possibly requiring DRM).

Last but not least is monetization. Given current plans not to charge extra for TV Everywhere, advertising from online viewing is the main new revenue-generating opportunity. So integrations with ad servers already used by content providers, along with the ability to measure and report on usage, is another crucial capability. Separate, a totally new monetization opportunity will be trying to upsell online subscribers on new services. For instance, HBO might run a promotion offering a sneak peek of a "True Blood" premiere to all TV Everywhere users. The service provider needs to not only support the promotion, but also offer one-click upsell subscription to HBO, and dynamic provisioning of the whole HBO catalog to the new subscriber.

As I've written previously, TV Everywhere is an exciting step forward for both the broadband industry and video service providers. Yet it is a very new world where things get complicated very fast. Vendors like Extend - and other leaders like thePlatform and Irdeto to name two - which have traditionally focused on cross-platform support for video service providers are increasingly going to be called on to turn executives' visions into reality.

What do you think? Post a comment now.

(Note - ExtendMedia and thePlatform are VideoNuze sponsors)

Following are 4 news items worth noting from the week of July 27th:

New Pew research confirms online video's growth - Pew was the latest to offer statistics confirming that online video usage continues to soar. Among the noteworthy findings: Long-form consumption is growing as 35% of respondents say they have viewed a TV show or movie online (up from 16% in '07); watching video is widely popular, draw more people (62%) than social networking (46%), downloading a podcast (19%) or using Twitter (11%); usage is up across all age groups, but still skews young with 90% of 18-29 year olds reporting they watch online vs. 27% of 65+ year olds; and convergence is happening with 23% of people who have watched online reporting they have connected their computers to their TVs.

FreeWheel has a very good week - FreeWheel, the syndicated video ad management company I most recently wrote about here, had a very good week. On Monday, AdAge reported that YouTube has begun a test allowing select premium partners to bring their own ads into YouTube, served by FreeWheel. Then on Wednesday, blip.tv announced that it too had integrated with FreeWheel, so ads could be served for blip's producers across their entire syndication network. I caught up with FreeWheel's co-CEO Doug Knopper yesterday who added that more deals, especially with major content producers, are on the way. FreeWheel is riding the syndication wave in a big way.

Plenty of action with CDNs - CDNs were in the news this week, as Vusion (formerly Jittr Networks) bit the dust, after going through $11 million in VC money. Elsewhere CDN Velocix (formerly CacheLogic) was acquired by Alcatel-Lucent. ALU positioned the deal as fitting with its "Application Enablement" strategy, supporting customers' needs in a "video-centric world." Limelight announced its LimelightREACH and LimelightADS services for mobile media delivery and monetization (both are based on Kiptronic, which it acquired recently). Last but not least, bellwether Akamai reported Q2 '09 earnings, that while up 5% vs. year ago, were down sequentially from Q1. Coupled with a cautious Q3 outlook, the company's stock dropped 20%.

IAC is making big moves into online video - IAC is making no bones about its interest in online video. Last week the company unveiled Notional, a spin-out of CollegeHumor.com, to be headed by that site's former editor-in-chief Ricky Van Veen. Then this week it announced another new video venture, with NBCU's former co-entertainment head Ben Silverman. IAC chief Barry Diller seems determined to push the edge of the envelope, as IAC talks up things like multi-platform distribution and brand integration. With convergence and mobile consumption starting to take hold, the timing may finally be right for these sorts of plays. At a minimum IAC will keep things interesting for industry watchers like me.

Click here to see an aggregation of all of the week's broadband video news

Daisy Whitney and I are pleased to present the 25th edition of the VideoNuze Report podcast, for July 31, 2009.

This week I provide some additional thoughts on the new web site 15 Seconds of Fame (http://15sof.com/), which I posted about yesterday. The site is a broadband, social media-based version of "American Idol," offering multiple online contests. Users pay $1 to enter their 15 second (max) video, which then funds the prizes ranging from $25-$100. It's a great example of what I call "purpose-driven" user generated video, meant to appeal to people who have talent and already have experience uploading video to YouTube and other video sharing sites.

Speaking of YouTube, Daisy picks up on her post about its latest sensation, the "JK Wedding Entrance Dance" which has gained over 12 million views. The video shows a wedding party proceeding down the aisle dancing to Chris Brown's "Forever." The video is a blast to watch, but more importantly, YouTube is highlighting on its blog that the video has also become a big money-maker for its rights-holders. By using YouTube's content management tools and "Click-to-Buy" links, there are now overlay ads to buy the song at Amazon and iTunes. YouTube reports that the click-through rate is 2x the average and helped drive the song to #3 on iTunes and #4 on Amazon. It's a nice win for everyone. Think the bride and groom (interviewed here on NBC's Today Show) are getting a cut?

Click here to listen to the podcast (12 minutes, 58 seconds)

Click here for previous podcasts

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

Andy Warhol's famous quote that "everyone gets their 15 seconds of fame" is the inspiration behind a new web site called 15sof.com that is like a broadband, social media-based version of the hit show "American Idol," but created and promoted at a fraction of the cost.

15sof.com is meant to capitalize on the growing subculture of society (that tends to skew younger) who are either seeking fame and fortune or want to influence the process of who attains it. These motivations have been the key forces behind the explosion of reality-based contest shows now running and arguably drive many of the most outlandish stunts seen on YouTube.

15sof.com's founder/CEO John Bonaccorso explained to me that the site offers aspiring contestants a simple but novel proposition: pay $1 to submit your 15 second (max) video to one of the myriad contests running at any one time on 15sof.com. The community then votes on the submissions and moves a handful of contestants on to subsequent rounds where lengthier videos are accepted. The prize money is funded from the contestants' fees. Contestants can enter as often as they'd like, but precautions are in place to prevent voting fraud. 15sof uses a white-label social media platform from Reality Digital, which I last wrote about here.

With current top prizes in the $25-$100 range, nobody's going to get rich, but they will gain visibility and of course psychic gratification. As John explained, particularly for the high school and college-aged drama crowd, 15sof.com offers them an opportunity to show their stuff, which is plenty enough.

15sof.com is itself a pure social media creation: John said the site hasn't spent any money yet on conventional marketing. Instead it has built awareness and participation solely through Facebook, MySpace, Twitter and other social media platforms. In the world of 15sof.com - and many other social sites and apps launching today - there's no need for tune-in ads, billboards or other expensive marketing tactics. Sites like 15sof.com grow out of the burgeoning social community, dominated by the young. John wouldn't disclose numbers, but said the site beat its first month traffic goal in the first 3 weeks. That's no indication of future success, but it's a good start.

For me, there are 2 other noteworthy aspects of 15sof.com. First, the site reflects yet another example of "purpose-driven" user-generated video, a concept I've explored in the past in connection with Unigo, a start-up trying to use student-created videos to disrupt the college guidebook industry. The "purpose-driven" video idea is to get the multitudes of amateurs whom YouTube introduced to video to turn their newfound skills and passion toward something more remunerative and possibly productive. Purpose-driven video concepts are proliferating. Most notable are the myriad brand-sponsored consumer video contests and also the many sites featuring user-created how-to videos. I continue to believe there will be many bona fide business opportunities based on purpose-driven video.

Meanwhile, if you're expecting to find yours truly belting out a song on 15sof.com, you'll have to keep waiting. I'll be here hiding behind my keyboard.

What do you think? Post a comment now.

Broadband-only producers got a boost yesterday as blip.tv, which provides technology, ad sales and distribution for thousands of online shows, announced a variety of new deals as well as product improvements. The deals offer blip's producers new distribution, new monetization and new access to TVs. In order:

Distribution: blip's new deal with YouTube means that producers using blip can deliver their episodes directly to their YouTube accounts, eliminating the two step process. With YouTube's massive traffic, getting in front of this audience is critical to any independent producer. Since my first conversation with blip's co-founder Mike Hudack several years ago, the company's mantra has been widespread syndication. Blip already distributed its producers' shows to iTunes, AOL Video, MSN Video, Facebook, Twitter, and others. Vimeo is another new distribution partner announced yesterday.

Monetization: A new integration with FreeWheel means that ads blip sells can follow the programs it distributes wherever they may be viewed. I've written about FreeWheel in the past, which offers essential monetization capability for the Syndicated Video Economy. With the blip deal, FreeWheel delivered ads can be inserted on YouTube. This follows news earlier this week that YouTube and FreeWheel had struck an agreement which allows content providers that use FreeWheel and distribute their video on YouTube can have FreeWheel insert their ads on YouTube (slowly but surely YouTube is opening itself up to 3rd parties).

Access to TVs - Last but not least is blip's integration with the Roku player which will help bring blip's shows directly to TVs (adding to deals blip already had with TiVo, Sony Bravia, Verizon FiOS, Boxee and Apple TV). While Roku's footprint is still modest, it is positioned for major growth given current deals with Netflix and Amazon, and others no doubt pending. At $100, Roku is an inexpensive and easy-to-operate convergence device that is a great option for consumers trying to gain broadband access on their TVs. Gaining parity access to TV audiences for its broadband producers is a key value proposition for blip.

In addition to the above, blip also redesigned its dashboard and work flow, making it easier for producers to manage their shows along with their distribution and monetization. An additional deal with TubeMogul announced yesterday allows second by second viewer tracking, providing more insight on engagement.

Taken together the new deals help blip further realize its vision of being a "next generation TV network" and provide much-needed services to broadband-only producers. This group has taken a hit this year, given the tough ad sales and funding environments, so they need every advantage they can get.

What do you think? Post a comment now.

One might think that the depths of the worst economic recession in decades would be a lousy time to begin asking penny-pinching consumers for additional payments to access content. Yet this is exactly what many video providers plan to do, as a variety of broadband-delivered video subscription plans are beginning to take shape. Based on conversations I've been having with industry executives and what I've been reading, various subscription plans are now underway. This leads me to think that "subscription overload" is on the horizon.

Interest in getting consumers to pay has several sources. Many executives have concluded that advertising alone is an insufficient model, even as the cost of delivering broadband video is actually plummeting. Some of this concern relates to the widespread advertising slowdown, where even established players like the big broadcast networks are being forced to accept rate cuts. These declines cannot be made up with greater ad quantity as there's prevailing worry about just how many ads can be loaded into a broadband-delivered program before the viewer gets turned off.

There is also significant fear of not learning from the demise of the U.S. newspaper industry, which largely adopted an ad-only online business model that hasn't worked (causing some like the NY Times to now consider reinstituting subscription services). Newspapers' woes have become a touchstone in practically every conversation I've participated in recently. Last, but not least, there's no small amount of envy toward cable networks, whose dual subscription/advertising revenue model has allowed them to weather the recession better than most.

Subscription plans seek some combination of differentiators: offering premium video in better windows, at better-quality, with deeper selection, across multiple devices and with some degree of exclusivity. The thinking is that these enhancements will allow subscription services to be distinguished from and co-exist with free ad-supported services. The implicit bet is that these differences will be understood and valued by consumers.

Subscription plans are beginning to leak out, as happened last week in remarks by Disney CEO Bob Iger. Many in the industry (including me) anticipate that Hulu will launch a subscription service soon, particularly as it seeks to become a part of cable operators' TV Everywhere initiatives (which themselves seek to enhance the value of current cable subscriptions).

Other plans are on the drawing board. When I read yesterday, for example, about NBC's Ben Silverman jumping to IAC to form a new video venture, I suspect it's almost a given that the venture will consider some type of premium model. The growth of mobile video is another factor fueling subscriptions. This is what MLB is doing with its new At Bat 2009 subscription app for the iPhone, which builds on its highly successful MLB.TV broadband subscription service.

Still, with broadband allowing video providers direct access to their target audiences, their well-known brands as powerful enablers, and the crummy advertising climate showing no letup, it is no surprise that the pendulum is swinging heavily toward subscriptions.

What do you think? Post a comment now.

I highly recommend reading Saul Hansell's piece in last Friday's NY Times, recapping the ridiculously optimistic quotes senior executives at AOL and Time Warner have made over the years (and be sure to peruse readers' consistently vitriolic comments). For anyone who's watched AOL's rise and fall, the quotes are a stroll down memory lane. But while the picture that emerges is that hubris cursed AOL and contributed mightily to its downfall, in reality it was broadband, and AOL's colossal mismanagement in transitioning to it, that crushed the company.

The chart below shows that AOL's dial-up subscribers topped out in Q3 '02 at 26.7 million, and have been in a free-fall ever since, sitting at just 6.3 million at the end of Q1 '09, a drop-off of 20.4 million or 76%. Where did those 20.4 million dial-up subs go, along with tens of millions of other dial-up and new Internet users? To broadband Internet access, supplied by cable companies and telcos. These companies have grown their U.S. broadband subs from 15.2 million in Q3 '02 to 69.2 million in Q1 '09, an astonishing increase of 54 million subscribers in just 7 years.

Cable and telco broadband providers have feasted on the carcasses of AOL and other dial-up services like MSN and Earthlink. But, here's what's both incredible and really sad: had AOL management been less arrogant and more strategic in its approach to broadband, it's quite possible that things could have turned out quite differently.

Back in the mid-to-late '90s, I had a front-row seat at AOL's initial reactions to broadband. In that period I was VP Business Development at Continental Cablevision, then the 3rd largest cable operator in the U.S. with over 5 million video subscribers. We were one of the pioneers in testing and rolling out "high-speed" Internet service. While we thought our speedy and always-on broadband connections were a better mousetrap vs. dial-up, we were very concerned about our lack of online content, video-centric branding and ability to effectively market this exciting new service.

In the pre-@Home days, I pushed to explore how we could partner with AOL to help us get our service off to a faster start. A deal with AOL would have had significant advantages to them as well. AOL at the time had a huge capex burden building out more modem banks to keep up with its swelling subscriber ranks. Even still, there was already plenty of AOL subscriber frustration with the slowness of the AOL network, and often you couldn't even get connected on your first or second tries. At least in our geographic footprint we could unburden them of their network build-out, offer better-quality connections and allow them to focus on content and brand-building. As the 3rd largest cable operator, we also offered them a valuable proof-point that they could use to build industry-wide relationships.

After much preparation and scheduling, we met with one of AOL's most senior executives. After articulating our broadband vision and opportunity to work together, he arrogantly dismissed us as if we were precocious children. To him the opportunity we were describing was far too small, and to illustrate his point he asserted that AOL would have 10 million subscribers before we had our first 100,000 (a prediction that was probably correct!).

Needless to say, no meaningful deal with us - or any other cable operator - every materialized. AOL went on to flounder around with various incarnations of AOL Broadband, none of which ever got any traction. AOL continued to grow its subscribers for a number of years and capitalized on its reach by extracting hundreds of millions of dollars from VC-backed startups eager for access to its massive captive audience (some of those deals would later come under scrutiny, as would AOL's accounting treatment for its subscriber business). AOL then bought Time Warner, and the rest as we know is history.

But what if things had gone differently? What if that AOL executive and others had seen the handwriting on the wall - that broadband would eventually render dial-up obsolete - and decided that AOL needed to figure out how to transition to it, instead of dismissing it? Had that happened, it could have forged partnerships throughout the cable and telco industries that would have let it focus on content and services in an open, broadband environment. In fact, I think it's quite possible that AOL could have pre-empted @Home and the RoadRunner venture that Continental eventually joined from getting traction (why start over when AOL, the 800 pound gorilla is in your corner?).

Instead AOL fell victim to its own arrogance and limited strategic vision. Broadband went on to become the single most powerful enabler of the Internet as we know it today (e.g. billions of spontaneous Google searches, Tweets, Amazon purchases, and more recently video views). AOL is now a crippled mish-mash of mostly second-rate properties, on its umpteenth management team, led by new CEO Tim Armstrong.

In retrospect, those fateful decisions AOL made about broadband 10-15 years ago set the stage for the company's eventual demise.

What do you think? Post a comment now.

Following are 4 news items worth noting from the week of July 20th:

Apple reports blowout iPhone sales in Q2, continuing to drive market - It was another record quarter, as Apple reported selling 5.2 million iPhones, bringing to 21.4 the total sold to date. This despite acknowledging temporary shortages during the quarter. The iPhone continues to revolutionize the mobile market, and from my standpoint is the key catalyst for both recording and consumption of mobile video. This market is poised for significant growth as new smartphones hit the market along with fixed monthly data plans. Apps like MLB.com At Bat 2009, which offers live streams of games, are certain to be hits and emulated widely.

8 minute video of Amazon's Jeff Bezos discussing lessons learned and Zappos acquisition - You couldn't miss news this week of Amazon acquiring Zappos for around $900M, its largest deal ever. Interestingly, Amazon posted a video on YouTube of Bezos discussing the deal, but not until he walked through several maxims of Amazon's success (obsess over customers, think long term, etc.). The video is extremely informal, with Bezos flipping hand-scrawled notes on an easel and improvising funny anecdotes. It has a slightly random feel (until he gets to the Zappos part, you start to wonder, what's the point of all this?), but I give Amazon and Bezos lots of credit for using video in a totally new way to communicate with stakeholders. I'd love to see more CEOs do the same.

Is Disney CEO Bob Iger serious about creating a subscription site for its online video? This week at Fortune's Brainstorm conference, Iger floated the idea that Disney will offer movies, TV shows and games for paying subscribers. The timing seems more than coincidental as Comcast gears up for its On Demand Online trial. Is Iger serious about this, or is it a head fake from Disney so it can try to negotiate incremental payments from Comcast and others seeking to distribute Disney content online? It's hard to tell, but I'd be curious to see what Disney has in mind for its possible subscription service. Consumers hate the idea of paying twice for anything (even paying once is not so popular), so if Disney is somehow going to create another window where they charge for access to content that's still on, or was recently on cable, that would be an awkward model.

"Mad Men" coming to Comcast's On Demand Online trial - Speaking of the Comcast trial, I was thrilled to hear from David Evans, SVP of Broadband at Rainbow Media (owners of AMC, the network behind Mad Men) at yesterday's CTAM Teleseminar that the show will be included in Comcast's trial and presumably in rollout. David is very bullish on online distribution and the larger TV Everywhere concept, though cautioned that there are many rights-related issues still hanging out there. I'm a huge Mad Men fan (whose new season starts on Aug 16th) and the idea that I don't have to worry about recording each episode or managing space on my DVR, and that I can watch remotely when I'm on the road, all underscore TV Everywhere's value.