VideoNuze Posts

Two conversations yesterday, one with a broadcaster and one with a cable operator, had the same basic theme with regard to broadband video: "hey, we understand this broadband stuff is happening, but we don't see it as a threat to our core business YET, so we're not going to be very aggressive in pursuing it for now." Instead they are each focusing most of their resources on defending their incumbent businesses, while only dabbling in broadband projects.

With broadband revenues still nascent (the biggest concern I hear), is it wrong to "play defense" by focusing on defending current businesses instead of investing more aggressively in broadband? I think so as it leaves these companies quite vulnerable down the road.

At least three macro trends suggest that ALL companies currently in the video business should be aggressive with broadband:

Consumer behavior is changing: consumers love broadband for its convenience and choice. Just last week, TNS and The Conference Board released a study indicating that 16% of Internet users now watch TV online. Usage will only increase going forward, the "horse is out of the barn."

Technology risk is minimal: broadband video already works well, is accessible to tens of millions of users without any further investments by them and video quality is improving all the time.

Competition is escalating: capital is flowing into the industry to fund more competition. Not all of these will become winners, but at a minimum they will create lots of headaches for incumbents.

For these reasons and more, I think it's essential for companies involved in video to play offense and invest accordingly to ensure they're properly positioned for the coming broadband era.

I saw an early version of this product at the NAB Futures Summit last April (CNET's Brian Cooley brought one along) and for simplicity it's hard to beat. You download the Fanfare software (a snap), plug the device into your USB, download files, and then plug the device into its cradle, which is connected to your TV. What I haven't seen is the UI for the TV, so I can't comment on that.

Considering I witnessed my 8 year-old nephew figure out how to plug his digital camera into his TV to do slide shows, I'd expect Sansa TakeTV to appeal to a pretty wide audience of non-techies. And at $100 for the 4GB model (saves about 5 hours of video), it's a solid "stocking stuffer" for the upcoming holiday season.

Sansa TakeTV is another example of the limitless innovation underway to converge the PC/broadband video world with the TV world. To date most of the solutions here (except AppleTV and Xbox probably) have been pretty techie, requiring some degree of user intervention to marry the PC and the TV over the home wireless or wired network. It's safe to say that none of these devices has yet caught on.

Sansa TakeTV's issue is whether it can be anything more than a short term, low end solution. A lot of the answer is wrapped up whether USB Flash storage can scale up to inexpensively handle lots of video. For example, the low-end AppleTV holds 40 GB and costs $299, while the 16GB USB Flash drives I found online approach $200 alone, never mind the software and other component costs in the Sansa Take TV package. (see below).

However, if anyone's going to figure out how to make USB Flash storage competitive for video, it'll be SanDisk. In the meantime, there's nothing wrong with accepting Sansa Take TV for what it is - an easy-to-use, low end product for the masses to watch high-quality broadband video on their TVs.

Ok, pardon me for a minor diversion from the all-important subject of broadband video.

But up here in New England, in Red Sox Nation, there's no more important priority. We're all sleepy but exuberant after our awesome Sox came back from being down 3 games to 1 to crush the Indians 11-2 last night. Next stop Colorado. Hey, Sox in the Series, Patriots 7-0 and by the way it's going to be 79 degrees on Monday. Alright, enough gloating.

And just to prove that everything comes back to broadband, credit to FoxSports.com for its post game show that continued the celebration after the game. For fans the opportunity to see the player interviews, catch the replays and just bask in the glorious win, FoxSports.com delivered a great package.

As Friday winds down, I wanted to share a few quick thoughts on VideoNuze's first week.

First, a huge thanks to the many of you who have emailed or called with positive feedback on VideoNuze. It looks like the site's analyses and news aggregation are addressing real marketplace needs, as I hoped they would. It's also been gratifying to hear favorable reactions to the site's design and usability, about which my development team and I sweated every detail. I'm a big believer that no matter how great the content, if it's not easy to find and digest, it just doesn't matter.

A number of folks have called out the "Categories" feature on the site as especially useful for doing research, while others have cited the Search feature on the main nav, which returns results from both the Analyses and News Roundup sections of the site, as very handy. Type your company's name in and see!

Meanwhile, on the "needs improvement" side, I've heard from a number of you that you're receiving multiple copies of the daily email. Please contact me if this is happening to you. I'm troubleshooting this now with my email vendor and it's possible that it's an Outlook issue. If so, there's a fix.

Some of you have contacted me about email formatting issues. Regrettably, this is an agonizing area which can never be 100% resolved. Outlook '07 does not support many basic formatting functions, while other email programs also have limitations. We're working to optimize as much as possible, but in the meantime, I've found Yahoo and Gmail seem to handle formatting the best. If you have an account with one of them you may want to receive VideoNuze there. Or you can sign up for the VideoNuze RSS feeds or just come to the web site (also good alternatives if a daily email is too much to handle).

I've received recommendations for analyses from quite a few of you. Keep those coming, I'm always eager to hear your ideas. I can't act on all, but will do my best.

Lastly, I've heard lots of positive reaction from current sponsors and expressions of interest from potential sponsors. Sponsor support is of course critical to VideoNuze's success, so if reaching a highly engaged, broadband video decision-maker audience is key to your business plan, by all means drop me a line.

I have lots more exciting things planned for VideoNuze in the coming weeks and months, so please keep on visiting. And don't be shy about giving me your feedback!

However, a bigger picture question that Dailyshow.com's launch raises is how these direct-to-consumer initiatives work vis-a-vis third-party distribution deals. With media companies newly empowered to engage directly with their audiences using the Internet and broadband, many analysts have predicted the result will be diminishing relevance of third-party aggregators, including everyone from Comcast to Yahoo to Joost to you name 'em.

It's pretty apparent that MTVN/Comedy Central is coming down on the side of heavily emphasizing direct-to-consumer as its broadband video strategy when you combine Viacom's ongoing lawsuit against Google/YouTube, MTVN EVP Erik Flannigan's comment ("People should be reacting to 'The Daily Show' on its own site...God bless them for doing it everywhere else, but this should be the epicenter of it") and a company spokesman's comment ("that a few selected clips could become available on sites through syndication deals").

Count me among those who think this is both the wrong approach and one that will ultimately under-optimize the value of the Daily Show and other franchises in the broadband era. Quite simply, building out a strong direct-to-consumer presence like Dailyshow.com is NOT an either/or decision relative to also developing strong third-party distribution relationships.

In fact, the reality is that strong third-party distribution is essential in the Internet era, because Internet usage is both highly distributed among millions of web sites and also concentrated at a few large portals. Media companies' goal should be to proliferate their content (under the right deals of course) into all the nooks and crannies of the Internet while also striking deals with big portals to maximize exposure, usage and ad revenue.

But don't think distributors get a free ride in the Internet era. They need to prove they can leverage their audience devotion and traffic to drive value for content providers. Those that do will succeed. Proof of this is already emerging. One senior broadband executive recently told me that over 80% of his traffic comes from YouTube and other distribution partners, with his own site's traffic in the minority.

Not aggressively pursuing third-party distribution, as it appears is MTVN's plan, in essence requires that users reorient their behavior to come solely to one uber destination site like Dailyshow.com. To me this smacks of classic traditional media thinking where consumer convenience or preference gets short shrift in the name of what's supposedly "best" for the brand. My guess is if you asked Jon Stewart off the record what his preference is, he'd likely say, "make my stuff available everywhere!"

So kudos to the folks behind Dailyshow.com. But don't let your good works end now. Go out and find the best third-party distributors you can and let them help you extend the Daily Show franchise even further.

It's funny how often I'll be talking to someone and they will casually start interchanging the terms "IPTV" and "broadband video/online video/Internet TV".

The fact that many people, including some that are actually well-informed, continue doing so is a reminder of how nascent these delivery platforms still are, and how common terms of use and understandings have yet to be established.

Yet it's important to clarify that there are differences and they do matter. While some of the backend IP transport technology is common between IPTV and broadband video, the front end technology, business models and content approaches are quite different.

In presentations I do, I distinguish that, to me at least, "IPTV" refers to the video rollouts now being pursued by large telcos (AT&T, etc.) here in the U.S. and internationally. These use IPTV-enabled set-top boxes which deliver video as IP packets right to the box, where they are converted to analog video to be visible to the viewer. IPTV set tops have more capabilities and features than traditional MPEG set-tops, and telcos are trying this as a point of differentiation.

However, at a fundamental level, receiving IPTV-based video service is akin to subscribing to traditional cable TV - there are still multi-channel tiers the consumer subscribes to. And IPTV is a closed "walled garden" paradigm - video only gets onto the box if a "carriage" deal has been signed with the service provider (AT&T, etc.). IPTV can be viewed as an evolutionary, next-gen technology upgrade to existing video distribution business models.

On the other hand, broadband video/online video/Internet TV (whatever term you prefer) is more of a revolutionary approach because it is an "open" model, just like the Internet itself. In the broadband world, there's no set-top box "control point" governing what's accessible by consumers. As with the Internet, anyone can post video, define a URL and quickly have video available to anyone with a broadband connection.

The catch is that today, displaying broadband-delivered video on a TV set is not straightforward, because most TVs are not connected to a broadband network. There are many solutions trying to solve this problem such as AppleTV, Microsoft Media Extender, Xbox, Internet-enabled TVs from Sony and others, networked TiVo boxes, etc. Each has its pros and cons, and while I believe eventually watching broadband video on your TV will be easy, that day is still some time off.

Thumbing through the latest version of the New Yorker I noticed the ad shown at right (scanned B&W version, a little hard to read online). It's an intriguing invitation to enter something called the "Bud.TV Movies Rock BudTUBE" contest (that's a mouthful). It goes on to ask you to "reinterpret" one of the featured movie scenes on Bud.TV. The winner gets a trip to LA and a possible meeting with producer Stacey Sher.

So I go to Bud.TV to learn more and all I can find is a small icon on the home page that leads to this contest landing page.

It doesn't say when this contest will launch, doesn't ask me to submit an email address or to sign up to be notified when the contest goes live and doesn't provide any additional teaser information beyond what was in the New Yorker ad (like how about at least showing a few of the featured movie scenes?).

At first I thought the New Yorker magazine, with its liberal-minded, somewhat elitist audience, seemed like an odd place to be marketing a contest sponsored by a beer brand, but maybe there was something I was missing. But now seeing this underwhelming landing page, my conclusion is that this whole Bud.TV contest is a misfire so far. Wouldn't you expect a marketer of Anheuser-Busch's stature to execute the details better than this? I would.

Bud.TV has been widely criticized, but it remains a bold attempt by Bud to use broadband to change the marketing equation and improve engagement with its customers. However, if it's going to be effective, it's going to have to execute far better than it has with this contest. A lesson to all brand marketers experimenting with broadband - try your best to create a cohesive and memorable user experience.