Thursday, January 20, 2011, 10:21 AM ET|Amazon announced this morning that it has bought the remaining 58% of European DVD-by-mail and online subscription service LOVEFiLM. Amazon gained its stake in 2008 when LOVEFiLM acquired Amazon's European DVD rental business (Amazon also invested in LOVEFiLM as part of the deal). Given Amazon's position, the new deal, said to be worth around $320 million, was widely rumored.
Though the companies offered no insight in the press release as to what prompted the move, I think it can be interpreted as a bid by Amazon to make Netflix's expansion into the European market much harder. Netflix expanded into Canada last September with a streaming-only service and has continued to beef up the content selection offered there, even as stories have emerged that Canadian broadband ISPs' consumption caps can generate incremental fees for heavy Netflix users. Nonetheless, Netflix has been bullish about its near-term profitability expectations in Canada and executives have made no secret of the company's intention to expand further internationally, with Europe certainly in the bullseye.
Friday, January 14, 2011, 10:51 AM ET|Even though I was very focused this week on the CES "takeaways" series, there was still plenty of news happening in the online and mobile video industries. So as in the past, I'm pleased to offer VideoNuze's end-of-week feature highlighting 5-6 interesting online/mobile video industry news items that we weren't able to cover this week. Enjoy!
Level 3 fights on in Comcast traffic dispute
Level 3 is showing no signs of relenting on its accusations that Comcast is unfairly trying to charge the CDN for Internet traffic it delivers to Comcast's network. In an interview this week, Level 3 said it may use the "Open Internet" provisions of the FCC's new network neutrality rules to press its case. Level 3's challenge is coming at the 11th hour of the FCC's approval process of the Comcast-NBCU deal; it's not really clear if Level 3 is having any impact on slowing the approval, which appears imminent.
Comcast-NBCU deal challenged over online video proposal
Speaking of challenges to the Comcast-NBCU deal, word emerged this week that Disney is voicing concern over the FCC's proposed deal condition that would force Comcast to offer NBC programming to any party that had concluded a deal with one of NBC's competitors for online distribution. The Disney concern appears to be that the condition would have an undue influence on how the online video market evolves and how Disney's own deals would be impacted. While the FCC should be setting conditions to the deal, the Disney concerns highlights how, in a nascent, fast-moving market like online video, government intervention can cause unintended side effects.
YouTube is notching 200 million mobile video views/day
As if on cue with my CES takeaway #3, that mobility is video's next frontier, YouTube revealed this week that it is now delivering 200 million mobile views per day, tripling its volume in 2010. That would equal about 6 billion views per month, which is remarkable. And that amount is poised to increase, as YouTube launched music video site VEVO for Android devices. YouTube clearly sees the revenue potential in all this mobile video activity; it also said that it would append a pre-roll ad in Android views for tens of thousands of content partners.
Google creates video codec dust-up
Google stirred up a hornet's nest this week by announcing that it was dropping support for the widely popular H.264 video codec in its Chrome browser, in favor of its own WebM codec, in an attempt to drive open standards. Though Chrome only represents about 10% market share among browsers (doubling in 2010 though), for these users, it means they'll need to use Flash to view non-WebM ended video. There are a lot of downstream implications of Google's move, but for space reasons, rather than enumerating them here, check out some of the great in-depth coverage the issue has received this week (here, here, here, here).
Netflix usage drives up Canadian broadband bills
An interesting test of Canadian Netflix streaming showed that a user there might have to pay an incremental $12/month under one ISP's consumption cap. That would be more than the $7.99/mo that the Netflix subscription itself costs, leading to potential cord-shaving behavior. This type of upcharge hasn't become an issue here in the U.S. because even ISPs that have caps have set them high relative to most users' current consumption. But if streaming skyrockets as many think it will, and the FCC allows usage-based billing, this could fast become a reality in the U.S. as well.
Thursday, December 9, 2010, 10:21 AM ET|Yesterday, China's Youku, which started as a YouTube-style user-uploaded video site, but has evolved to a Hulu-style distributor of professional video, went public on the New York Stock Exchange. It offered 15.85 million American Depositary Receipts, or "ADRs," which represent ownership shares in non-U.S. companies, at $12.80 apiece, raising over $200 million. When the market closed, the ADRs stood at $33.44, up 161%, the best one-day performance for a U.S. IPO in the last 5 years (they're up another $5 today as well). Youku, which recorded $35 million in revenue for the first nine months of this year (and a $25 million loss), had an end of day valuation of $3 billion+.
Yes, I know what you're thinking - this is crazy, the bubble days have returned and there's a huge "China factor" multiplier at work for Youku. All of that is no doubt true. But here's something else that's true - while the global economy and stock markets have undergone wrenching change and volatility over the last 2+ years, the online video market has boomed. For certain kinds of investors (both professional and non-professional) who value growth over everything else, there are few sectors which have more appealing characteristics. As tens of millions of people have adopted online and mobile video, devices for viewing online video on TVs have proliferated, premium content has become available and business models have firmed, investors have taken notice.
Tuesday, November 23, 2010, 4:51 PM ET|vzaar, an online video platform company based in England has announced the director Oliver Stone has invested an undisclosed sum as part of its most recent financing round. Stone was so enthusiastic about the company that he recorded a short commercial for no fee (see below) in which he says that "vzaar is one of those lightning bolts that hit me right between the eyes" in a serious yet somewhat menacing tone.
vzaar's CEO Stephen McCluskey told me that Stone got involved via one of vzaar's key investors John Moreton. Stephen himself joined the company in March of this year and turned its focus onto profession and mid-sized users in vertical markets including fashion, media, corporate communications, sports and government, as well as for direct marketing applications. The company recently raised its entry tier from $15/mo to $49/mo and 60% of its customers are in the U.S. Stephen said that monthly revenue is growing by 20-30% and is already more than the whole of last year.
Wednesday, November 10, 2010, 9:34 AM ET|Brightcove is announcing this morning an expansion of its Asia-Pacific operations, with a new sales office in Seoul, Korea to be led by James Yoon, a former 24/7 Real Media sales executive. He'll report into VP of APAC Dennis Rose. Separately Brightcove reported adding 4 new Korean customers, Autodesk Korea, Cheil Worldwide, Overture Korea and Proctor & Gamble Korea.
Korea seems like a natural place to expand given its historically high broadband penetration (ranked #5 in the world), leadership in mobile and headquarters for both Samsung, which is making a very strong push into online and mobile video, and LG. There should be no shortage of opportunities for helping manage online and mobile video.
Monday, October 11, 2010, 10:06 AM ET|Sezmi is expanding into Malaysia, partnering with YTL Communications to provide the digital television service component of YTL's hybrid broadcast-wireless 4G "quadruple play" that also includes voice and data services. For Sezmi, the move is its first significant international deal, and could serve as a template for partnership deals in other developing countries that don't have or can't affordably build extensive wired broadband networks.
Importantly, the YTL deal also provides a possible glimpse of Sezmi's value as a partner to domestic U.S. carriers rolling out 4G service who might seek to offer a competitive over the top TV service. 4G is gaining momentum in the U.S. Just last week Verizon announced that it would introduce its 4G "LTE" service in 38 markets around the U.S. by the end of the year, with data speeds of 5-12 megabits per second. Both Clearwire and Sprint have already rolled out 4G services to over 50 market each and T-Mobile is in over 60 (albeit none of these always have 100% market coverage just yet). AT&T is planning to launch an extensive 4G network by mid-2011.
Wednesday, September 22, 2010, 11:16 AM ET|As expected, this morning Netflix officially announced its first non-U.S. offering, a streaming-only service in Canada, priced at CDN $7.99, including a 1-month trial. Netflix also announced Canadian content licensing deals with U.S. studios Lionsgate, MGM, Paramount, Sony, 20th Century Fox and Universal, plus Canadian distributors Alliance Films, Maple Pictures, eOne and Mongrel. In particular, Netflix called out the availability of movies like "Superbad," "A Beautiful Mind" and "Slumdog Millionaire" plus back episodes of AMC's "Mad Men" which are not available in the U.S. Conversely, some content available in the U.S. for streaming won't yet be available in Canada.
Monday, September 20, 2010, 2:25 PM ET|It looks like Netflix is set to launch its streaming-only service in Canada this Wednesday, according to a report in The Hollywood Reporter, which says CEO Reed Hastings will do the unveiling in Toronto. Netflix announced on July 19th that it would launch in Canada, its first non-U.S. market.
There are pros and cons to Netflix entering the Canada without offering DVDs-by-mail. The main pros are that Netflix avoids the expense associated with both building out the DVD warehouses/delivery centers and the postage expense to send discs. The cons are that the content selection will be drastically lower than what's available in the U.S., which could disappoint Canadians eager to have the same American service. Even though Netflix has been aggressively adding to its streaming catalog, it's still a fraction of what's on DVD. And it's not clear yet whether all the streaming deals Netflix has recently cut include Canadian distribution rights.
Hastings has been candid in the past that Netflix will proceed cautiously with international expansion. There are a lot of new variables outside the U.S., including competition. Over the weekend there was a report that Amazon may be looking to acquire the remaining part of U.K.'s LoveFilm that it doesn't already own.
What do you think? Post a comment now (no sign-in required).
Tuesday, September 14, 2010, 9:15 AM ET|Video ad manager Auditude is announcing this morning that it has scored its first Asian deal, with Allied Pacific Sports Network, which in turn has exclusive rights to distribute certain Major League Baseball content in China and other Asian countries. Under the deal, APSN will use Auditude to dynamically insert video ads into live MLB games. Mike Gaffney, Auditude's Chief Revenue Officer explained to me yesterday that the deal mirrors one which the company has with Yahoo, in which the latter sells and places adds in live domestic MLB video streams.
For Auditude, the APSN deal is its first foray into Asia. The move appears to be opportunistic as the company has been mainly focused on building up its European business through an office in London. Mike said that Dailymotion, the large aggregator site in France is a key reason for its European push. The APSN deal came about due to MLB's recommendation.
Auditude is differentiating itself based on its ability to serve ads in live streams where there's more uncertainty around the length of each stream and the time allocated to ads, making pre-determined ad insertion harder to execute than in on-demand viewing. Live sports are a perfect example of this. Live streaming is expanding dramatically as comScore noted recently, and with YouTube now testing its technology to enable its partners to live stream more growth is surely ahead. As more video providers jump into live and require ad serving, Auditude is positioned to benefit.
What do you think? Post a comment now (no sign-in required).
Thursday, May 27, 2010, 10:19 AM ET|While most of my focus is on the U.S. market for online video, I recently had a chance to catch up with Simon Orme, GM, Content Services Group of BT Wholesale, who gave me a deep dive update on what's happening in the U.K. market. Simon's specific focus has been a 2-year long project for BT to roll out CDN services to broadband ISPs who lease BT's network. The project is now moving into trial.
The U.K. video industry has robust satellite and cable competition, and more recently the BT Retail side has been rolling out its BT Vision IPTV service as a competitor to both. BT is also involved in "Project Canvas" a partnership of the major U.K. broadcasters and several communications companies to roll out broadband content.
A key challenge for Simon has been how to enhance the value of these CDN services for the ISPs who in turn offer them to content providers. Simon believes that a key driver is end-to-end quality of service. To deliver this BT is using Skytide, a U.S. provider of reporting and analytics software.
Simon explained that ISPs are already relatively sophisticated about how they manage their networks, yet traditionally they haven't had a lot of insight into what data is running on their networks. Therefore, the opportunity is to marry CDN services to these networks. In Simon's view, since most content providers are already using CDNs, the ISP must further distinguish itself in order to gain business. Doing so requires deeper insight about quality of service through a reporting and analytics layer. This is why BT is offering Skytide as part of its CDN service offering.
Skytide ingests multiple data sources in real time and then crunches the data, presenting it in various dashboard views, which might include for example network capacity utilization, volume of traffic by customer and distribution of traffic. Having evaluated multiple options, Simon said BT chose Skytide as the best of breed. The goal is to give its ISP customers all the potential levers to adjust in order to maintain the highest quality of service to their content customers.
There are currently a lot of moving pieces in video delivery in the U.K. and it will be worth keeping an eye on to see how they unfold.
(Note if you want to hear Simon talk in more detail about the U.K market and CDN dynamics, here is a recent interview he did with Murali Nemani from Cisco.)
Monday, May 17, 2010, 8:50 AM ET|A heads-up that the Silverlight team has just posted 4 great case studies detailing different aspects of their international media partners' experiences delivering the 2010 Winter Olympics online. The partners are CTV (Canada), NBC (US), NRK (Norway) and France Televisions (France). All were using Microsoft's Silverlight and IIS Smooth Streaming.
The case studies dig into 4 topics: online viewing times, effective ad monetization, broadcast reach and quality experience. I've only had an opportunity to skim each of the 4 case studies, but they are packed with in-depth information and details that I have not seen before. For those interested in learning more about how a high-profile live event like this was executed and some of the key performance metrics, this is super valuable info.
Monday, April 5, 2010, 9:50 AM ET|At least $277.4 million was raised by global private video companies in Q1 '10 according to company news releases I received and public sources I track. Of the $277.4 million, $175.4 million was raised by 19 U.S. companies and $102 million by 5 internationally-based companies. The financings ranged in size from $775K for Wistia to $50 million for Qiyi, which is the Chinese search engine Baidu's new online video company. Once again companies across the ecosystem, including content aggregation, chips, advertising, encoding, live streaming and consumer devices were represented.
For the U.S. only, the quarterly total was in the middle of the last 3 quarters, coming in ahead of Q4 '09 ($150.1M) and behind Q3 '09 ($180.9M). Investments in the video space remain very healthy, as the economy gradually recovers from the recession and the opportunity for going public brightens a bit. In the last 4 quarters, U.S. video companies have raised at least $570.2 million.
In addition to private financings, there were a number of video-oriented deals announced in Q1 '10. This list includes the acquisition of Quattro Wireless by Apple for $275 million, Vudu by Walmart for $100 million (rumored), StudioNow by AOL for $36.5 million and Multicast Media by KIT Digital for $18 million. In addition, during the quarter broadband equipment maker Calix went public, raising about $82 million, video ringtone company Vringo filed to go public to raise $64.3 million, independent video producer EQAL bought out its investor Spark Capital and Deluxe bought the assets of MediaRecall. The big negative of Q1 was Veoh's bankruptcy after raising more than $70 million. Looking ahead, Q2 '10 got off to a fast start with Vidyo raising $25 million.
Following are the financings that I tracked during the quarter, the date disclosed and new investors identified if applicable. Links are provided to the companies' press releases, or to relevant media coverage if none could be found (note that I haven't verified media coverage with companies themselves). If I've missed anything or you find an inaccuracy, please post a comment.
Mo-DV ($3.6M) - Jan 5 - Existing investors
Transpera ($2M) - Jan 14 - Existing investors
Beezag ($2.5M) - Jan 24 - Angel investors
Ustream ($20M) - Feb 2 - Softbank (potential eventual investment - $75M)
BrightRoll ($10M) - Feb 3 - Scale Venture Partners, existing investors
IVT ($5.5M) - Feb 9 - Syncom Venture Partners, Barshop Ventures, existing investors
Encoding.com ($1.25M) - Feb 10 - Metamorphic Ventures, angels
Zenverge (Undisclosed) - Feb 10 - Motorola Ventures, existing investors
TidalTV ($16M) - Feb 16 - Comcast Interactive Capital, NEA, Valhalla Partners
YuMe ($25M) - Feb 17 - Menlo Ventures, existing investors
Clicker ($11M) - Feb 18 - JAFCO Ventures, exiting investors
Vook ($2.5M) - Feb 19 - Angel investors
Quantenna ($15M) - Feb 24 - Existing investors
ZillionTV ($10M) - Feb 24 - Qwest
Ubicom ($1.8M) - Mar 8 - Existing investors
SiBEAM ($36.5M) - Mar 9 - Foundation Capital, existing investors
Panvidea ($2M) - Mar 18 - DFJ Gotham Ventures, existing investors
Avaak ($10M) - Mar 22 - Qualcomm, existing investors
Wistia ($775K) - Mar 24 - Angel investors
Siano ($23.5M) - Jan 11 - Existing investors
Guvera ($20M) - Jan 18 - AMMA Private Investment
Voddler ($3.5M) - Feb 8 - Eqvitec Partners
Qiyi/Baidu - ($50M) - Feb 26 - Providence Equity Partners
Videoplaza ($5M) Mar 18 - Creandum, Northzone
Friday, February 26, 2010, 10:45 AM ET|
Google's recently-announced fiber-to-the-home experiment (which I estimated could cost the company $750 million or more) looks even sillier in the context of continued announcements by cable operators of faster broadband deployments. As an example, this week brought news that Virgin Media, a large U.K. cable operator, is launching 100 megabit/second service by the end of this year, and also intends to expand its trial of 200 megabits/second service. Virgin's announcements came on top of Shaw Communications (a large Canadian cable operator) news from last week that it would soon test expanding its current 100 megabit/second service to 1 gigabit/second, a 10x increase. And big U.S. cable operators themselves continue deploying "DOCSIS 3.0" equipment to offer ever-faster broadband services.
Google pegged one gigabit as the target for its fiber-to-the-home project, but doesn't the question beg - if cable operators (and telcos) themselves are continuing to improve the speeds of their broadband services to approach 1 gigabit, what is the point of a small, isolated Google experiment? As I pointed out, consumers have benefited from continuous improvements in bandwidth over the years and, even absent net neutrality regulations, enjoy open, unfettered access to all legal content and services. What Google is contributing to the broadband ISP business with its fiber trial remains a complete mystery to me. At some point I have to believe Google shareholders and Wall Street analysts covering the company are going to want more clarity too.
What do you think? Post a comment now (no sign-in required).
Friday, February 26, 2010, 10:15 AM ET|
The brinksmanship between Disney and the 3 largest U.K. theater chains over whether they would show Tim Burton's new "Alice in Wonderland" film is officially done, with all 3 chains now signed on. As I described last week in "In Trying to Preserve DVD Sales, Studios Are in a Tight Spot," in a bid to boost DVD sales, Disney was looking to trim the DVD release of "Alice" to just 12 1/2 weeks after its opening, from the customary 16 1/2. British and other European theaters revolted, angry that the move would diminish their box-office take, a particular hot-button in light of significant investments they've recently made in digital technologies.
Specific details of the Disney-U.K. deals aren't known, but as the Guardian reported, it appears that Disney has agreed to cap the number of movies that will get earlier-than-usual DVD releases and provided some improved financial terms. Despite the U.K. resolution, some other European chains are still holding out, as is the AMC chain in the U.S. Regardless of the final outcome of the "Alice" situation, early DVD releases are going to remain a priority for Hollywood studios who are desperate to stanch the fall-off in DVD sales brought about by the recession and the shift by consumers to rental, subscription and online viewing options. There are many more chapters to be written in this saga.
What do you think? Post a comment now (no sign-in required).
Wednesday, January 13, 2010, 8:43 AM ET|
Online video platform provider Ooyala unveiled a partnership yesterday with NTT SMARTCONNECT that expands the company into Japan. Under the non-exclusive deal, the two companies will collaborate to create a localized and co-branded version of Ooyala's Backlot platform. Marketing and sales are set to begin in February.
As part of the announcement Ooyala also provided some 2009 updates: contracted customers grew from 30 to 300, self-serve customers grew five-fold, the Ooyala player now delivers hundreds of millions of streams/mo to 50 million unique users/mo, it transcodes 60K hours of video/mo and the company now has 70+ employees.
Ooyala also said that 50% of its customers are marketers, and outside of the traditional media space. The company cited Electronic Arts, for which it powers video on 30 different properties, General Mills and Cerner. The non-media focus parallels what Brightcove recently told me, that over half its business now comes from non-media customers (e.g. business, government and education).
As I wrote recently, despite all the growth in the online video platform space, it's still relatively early days. To be in the top tier as the market matures will require providers to scale their operations, including international expansion and serving customers outside the core media market. It looks like Ooyala understands this as well.
What do you think? Post a comment now.
Monday, December 7, 2009, 9:48 AM ET|
It's hard not to be fascinated by the Tiger Woods "transgressions" scandal and the drip-drip-drip revelations that are keeping the story alive. Amid the hubbub, the big mystery remains what actually happened on the fateful night that Tiger plowed his Escalade into a neighbor's fire hydrant and tree.
As the NY Times reported over the weekend, the animation unit of the Taiwanese "infotainment" newspaper Apple Daily (owned by Hong Kong-based media company Next Media) has created an animated video re-enactment of the events. The video is available on YouTube, where it has already drawn 2 million+ views. Non-Chinese speakers are out of luck on what the narrator's saying, but the animation provides the gist. As many suspect to be the case, there's Elin chasing Tiger's car down the street bashing its rear window with a golf club, causing a distracted Tiger to lose control and run off the road.
Compared to animated feature films, the quality is pretty amateurish. But that's the least of its problems; more significant is that the events shown are not based on the police reports or known facts, but rather on the animators' conception of what happened. So while Daisy Li, the Apple Daily manager overseeing the animated videos is quoted as saying that the idea of the animated videos is to make news more accessible to young people who don't like to read newspapers, by any standard, the video cannot be considered a journalistic pursuit.
Notwithstanding, the significance of the Tiger animated video and the whole idea of animated video re-enactments in general is that they have the potential to hugely influence public opinion about actual news events. By publishing videos like this to sites such as YouTube that have global reach, non-journalistic animators can vie with bona fide news outlets to inform audiences. For purists that will feel alarming, though it should be remembered that this is hardly the first time performance has influenced opinion - consider for example, that many people formed an opinion of Sarah Palin last year not on her remarks, but on Tina Fey's imitation of them on SNL.
Whether it is fact, fiction or something in between, video's power lies in its ability to tell a story better than any other medium. The animators at Apple Daily appear to understand this, as will others who will inevitably try to emulate their success. Audiences beware.
What do you think? Post a comment now.
4 Items Worth Noting for the Oct 12th Week (Bell's TMN, BlackArrow-Comcast, Net neutrality opposition, hockey's wunderkind)Friday, October 16, 2009, 10:08 AM ET|
Following are 4 items worth noting from the week of Oct 12th week:
1. Bell Canada is first to offer "TV Everywhere" type service - While U.S. operators have been busy with their TV Everywhere trials, Bell Canada, which has 1.8 million linear video subscribers, has jumped into the lead, announcing this week the launch of "TMN Online." The service, available through the Bell TV Online portal, allows subscribers to The Movie Network premium channel to gain online access to about 130 hours of content.
I spoke briefly with Peter Wilcox, Bell TV's director of product strategy, who explained that ExtendMedia's OpenCASE is being used for content management, in conjunction with Microsoft's Silverlight and PlayReady DRM. Users login with their Bell user name and password and are authenticated against the billing database as valid TMN subs. Only 1 simultaneous log-in is allowed, and Bell is also geo-blocking, so for example, there's no accessing TMN Online from outside Canada. The launch is part of what Bell calls "TV Anywhere" - a broader context for eventual distribution to its mobile subscribers, and further content being added. The deployment is the first milestone in what promises to be a busy 2010 on the TV Everywhere news front.
2. BlackArrow launches ad insertion for Comcast video-on-demand - BlackArrow, the multiplatform ad technology provider, announced its first customer deployment this week, with Comcast's Jacksonville, FL operation. I talked to company CEO Dean Denhart and President Nick Troiano, who gave me an update on how the company dynamically inserts ads in long-form premium content across TV, broadband and mobile. As I wrote 2 years ago, BlackArrow has bitten off the hardest challenge first: working with cable operators to get its system into their headends/data centers. Dean and Nick believe that if the company can succeed in this goal then it will have created formidable differentiation that can be leveraged for the other two platforms.
The key risk is that cable operators are famous for grinding down promising technology startups with their endless testing and brutal negotiating tactics (I say this from personal experience with a promising technology startup earlier this decade, Narad Networks). Robust VOD ad insertion is plenty strategic for the industry, but years since cable operators launched free VOD, the fact that it still isn't widely deployed is a telling sign, particularly while ad insertion technology in broadband is now fully mature. Comcast's role as an investor in BlackArrow should help its odds of success. I'm rooting for BlackArrow; their holistic approach to multiplatform advertising is right on. Whether they have the juice to fully succeed remains the big question.
3. Political battle over net neutrality is heating up - This week brought fresh complaints from Republican Senators who are coalescing to fend off new FCC chairman Julius Genachowski's plan to introduce net neutrality regulations for both broadband ISPs and wireless carriers. B&C reported that 18 Republican senators wrote to Mr. Genachowski concerned that the FCC's process is "outcome driven" and unsupported by data.
I rarely find my views aligning with Republicans, but net neutrality is an exception. As I wrote last month in "Why the FCC's Net Neutrality Plans Should Go Nowhere," Mr. Genachowski's plan is deeply flawed and completely illogical. The core premise of the new regulations - that they're needed to ensure continued broadband investment and innovation - misses the reality that the market is already functioning well. As one example, investment in broadband-related technology is continuing apace. By my calculations, over $180 million was raised in Q3 '09 by video-related companies whose very viability depends on open broadband and wireless networks. The sector's potential is amplified by the fact that venture capital fundraising itself is at its lowest level since 2003, with new capital raised by the industry in 2009 down 58% from 2008. Despite the VC industry's troubles, it continues to bet big on video. Why do we need new Internet regulations to sustain innovation?
4. Have you seen the 9 year-old hockey player's trick goal? On a lighter note, you have to love the serendipity of online video sharing. For example, though I don't consider myself a hockey fan, when a friend sent me this video clip of a 9 year-old hockey player pulling off this incredible trick shot, I was reminded just how much fun online video is and promptly passed the clip on to my circle (it's also now all over YouTube). See for yourself, it's just amazing. And nothing fake about it either.
Enjoy the weekend!
Friday, September 11, 2009, 10:14 AM ET|
Following are 4 news items worth noting from the week of Sept. 7th:
1. Hulu's boss says it needs to charge for content - Bloomberg ran a story this week quoting Chase Carey, deputy chairman of News Corp (Fox's owner, and therefore a part-owner of Hulu) as saying at a BofA investor conference, "Ad-supported only is going to be a tough place in a fractured world....You want a mix of pay and free."
VideoNuze readers know that while I've admired Hulu's user experience from the start, I've long been critical of its thin ad model, which falls well short of generating revenue/program/viewer parity with traditional on-air program delivery. That lack of parity has caused Hulu's owners to cordon off access to Hulu on TVs for most viewers. But the networks' fear of cannibalizing their own P&Ls only frustrates loyal Hulu users, who neither understand nor care about such legacy concerns. All of this and more led me months ago to conclude a subscription offering is inevitable from Hulu. The impending TV Everywhere launches, which further marginalize ad-only business models, and now Carey's public remarks, solidify my thinking. We'll soon see some type of Hulu subscription tier.
2. Move Networks notches a win with Cable and Wireless deal - Score one for Move Networks, which this week announced Cable and its first tier 1 telco customer. Move enables C&W to deliver an HD, linear multichannel video service, plus on-demand and broadband content to its broadband customers, all through existing DSL connections. Move's repositioning, which I wrote about recently, obviates telcos' need to invest billions in upgrading their networks to get into the IPTV business. Indeed, Roxanne Austin, Move's CEO told me yesterday that C&W has for years considered all the various options for getting into video, but has never pulled the trigger until now. The deal covers up to 7 million homes and interestingly, rather than getting a license fee, Move will be paid a share of subscriber revenue. Roxanne says another big deal will be announced shortly.
3. iPod Nano gets video, battle with Cisco's Flip escalates - As you likely know, Steve Jobs unveiled the new iPod Nano this week, which incorporates an SD video camera. Following the iPhone 3GS adding video recording capability, I think it's pretty clear that Apple has decided video is the next big thing for its devices. As I suggested recently, Apple's embrace is going to drive user-generated video - and YouTube, as the undisputed home for it - to a whole new level.
But one wonders what this all means for Cisco's recently-acquired Flip video camera, and others from Creative, Sony, Kodak, etc? Cisco in particular has a lot on the line since it just shelled out almost $600M for Flip's parent Pure Digital. Granted Apple's devices are still SD, while Flip now emphasizes HD, but still, getting video recording "for free" as Jobs put it at the launch is pretty compelling for consumers. Even if the Flip deal doesn't work out as planned, Cisco will still be selling a whole lot more routers to handle all of this newly-generated broadband video, so it's a winner either way.
4. AT&T Wireless adding 3G capacity - In last Friday's "4 Items" post, I noted a great story the NY Times ran showcasing the frustrations that AT&T Wireless customers are experiencing due to the millions of data-intensive iPhones clogging up the network. AT&T has been hearing complaints from all sides, and this week announced 3G network upgrades in 6 cities this year, with plans to cover 25 of the top 30 U.S. cities by the end of next year, and 90% of its current 3G footprint by the end of 2011. These upgrades can't come soon enough for iPhone users. Meanwhile the company's YouTube video, featuring "Seth the blogger guy" explaining how AT&T is addressing network issues itself came under attack, as AdAge reported. There's no pleasing everyone.
Enjoy the weekend!
Wednesday, September 2, 2009, 9:56 AM ET|
Convergence devices that bring broadband video and Internet applications to the TV (e.g. Roku, Xbox, Apple TV, Vudu, etc.) are a white-hot area of interest as many industry participants - including me - believe their eventual mass adoption will provide a major catalyst to broadband video usage and prompt further disruption in the value chain.
Intel has eyed a big role in this emerging market for a while, becoming a strong public proponent of the "digital home" concept. Building momentum over the past year, Intel has made announcements with Yahoo (for the "Widget Channel" framework), Adobe (to port and optimize Flash for TV viewing) and with a number of large content providers (demonstrating enhanced viewer experiences).
At the heart of Intel's early initiatives is the company's much-heralded Media Processor CE3100, the first in a family of "system on a chip" convergence-oriented processors. Next week the first CE3100-powered device, the "Mediaconnect TV" will be shown at the IBC show in Amsterdam. The box is a collaboration between a Dutch company, Metrological Media Innovations and a British interactive services provider, Miniweb (a spinoff of BSkyB). This has been previewed recently and is sure to gain more visibility next week. To learn more about Intel's convergence vision, yesterday I spoke to Wilfred Martis, the GM of Connected AV Products for Intel's Digital Home Group.
Intel sees 4 different types of home products that can be fitted with its media processor chips: set-top boxes, digital TVs, optical players (e.g. Blu-ray devices) and "connected AV" products, which are defined as standalone boxes that connect broadband to the TV, but without any guaranteed quality of service (QoS) for the video. This segmentation actually closely follows a slide I've been presenting lately which maps the various efforts for bringing broadband to the TV.
The connected AV devices are of course what "over-the-top" providers like Netflix, Amazon, iTunes, YouTube, etc. are counting on to deliver their services into the home over open broadband connections. On the one hand, Intel seems to be looking to empower these providers. As Wilfred says, Intel is trying to create a standard toolset and app environment akin to what we've seen on leading smartphones (mainly the iPhone) that helps drive creative new TV-based applications. Yet at the same time, as Wilfred notes, Intel wants to be a friend to incumbent video service providers, allowing them to deliver broadband content side-by-side with their walled-garden channels in their set-top boxes.
While Intel is clearly in this for the long haul, and has the resources to cultivate the market, other non-Intel devices continue to get a foothold. It's interesting to contrast, for example, the success that Roku is enjoying to date and ponder how the convergence device market will develop over the next several years. As I detailed a few weeks ago, Roku is successfully pursuing a classic "Crossing the Chasm" strategy, leveraging low pricing and loyalty to its content partners' brands to move lots of its product.
Still, integrating with Roku - and other current convergence devices - requires a one-off integration that assumes resources and prioritization (even when APIs exist). Some content providers will determine integrating is worthwhile, while others will not.
Intel's strategy is meant build on existing technologies and applications, making it more straightforward for content providers and applications developers to deploy on its devices (it's worth noting that Amazon, Blockbuster, Facebook and others plan to launch Widget Channel apps imminently). As Wilfred explains, when Intel's architecture is in convergence devices, incumbent software like browsers, plug-ins, drivers and the like are intended to work seamlessly. In addition, by providing abundant processing power, developers don't have to go through the arduous task of de-optimizing their apps for slower environments. And they get the performance headroom to continuously add updates.
The price for all this is of course, price. I don't know what the unit cost of the CE3100 is at volume, but my guess is that whatever it is would quickly sink any manufacturer's prospects of selling their box at anything close to a $99 price point, as Roku is. It's an age-old computing dilemma: beneficial as it is to have lots of processing power, there's a cost to it.
This raises the fundamental question of how the convergence device market will shape up over the next several years: will low-cost, "powerful-enough" devices continue to gain, or will boxes with robust processing render them obsolete at some point soon? My guess is that in the short term at least, low cost is going to lead the way. However, over the long term, it's hard to avoid the idea of significant computing power sitting next to the TV. However the business model for who pays to get it there remains in question.
What do you think? Post a comment now.
Monday, July 13, 2009, 9:47 AM ET|
I'm back in the saddle after an amazing 10 day trip to Israel with my family. On the assumption that I wasn't the only one who's been out of the office around the recent July 4th holiday, I've collected a batch of industry news links below so you can quickly get caught up (caveat, I'm sure I've missed some). Daily publication of VideoNuze begins again today.