Posts for 'Broadcasters'

Bob Pittman will be presenting at next week's NATPE conference. A long time media executive, he is a founding member of Pilot Group LLC, a consumer brand focused private investment firm based in New York. Among other prior roles, he's served as President and COO of America Online and was also a co-founder of MTV and later CEO of MTV Networks.

Yesterday I caught up with him for a pre-NATPE briefing. Read on to learn why he's bullish on broadcast TV stations, skeptical about broadband video's impact on the TV business and emphatic that convenience rules.

VideoNuze: Pilot has been a buyer of broadcast stations. That's somewhat contrarian. What do you see in the industry?

Bob Pittman: Broadcast stations are greatly unappreciated. TV is America's hobby. Look at any category, the biggest is always the most important. So we want to invest in place where most people are. It is a fantastic advertising medium. There's no substitute for TV advertising. It works like nothing else. It's still wildly cheap - for the most part it's a $7-8 CPM, compared with newspapers and magazines which are $25-30, and it outperforms by every measurement - reach, time spent, effectiveness. It's still wildly underpriced.

We have focused on small market television, where local advertising is the predominant revenue stream. We have done that because we believe national advertisers will slow down spending in economic downturns, whereas in local market when you're dealing with a local retailer he still has to sell everything that's on the shelf, come good times or bad. And we believe that in small markets, newspapers and yellow pages are getting wildly disproportionate share of the revenue, so we think there's a great growth opportunity as well. In smaller markets the station's coverage area nicely matches the advertiser's reach goals. It's also a fantastic free cash flow business.

VN: Is broadband video a net positive or a net negative for broadcast stations, or is it not clear yet?

BP: We have to be really careful about broadband video, it's still a very small percentage of use for most people. Most of what people talk about is still 3 minutes or shorter clips on YouTube, many sent to you by a friend in email. The idea of people sitting down and watching their computer is a small part of the overall audience. So we have to be careful not to talk about fringe uses as if they're going to be major uses.

However, we think it presents an opportunity for our stations and we've pursued that, by setting up what are in essence "newspapers online." And in our smaller markets, we're not competing with Google or MSN, so we can get large local audiences, which allow us to better serve our advertisers. But I don't think broadband is competitive with TV, putting TV shows on the Internet is nice, but you're talking about small audiences.

VN: What will the impact of services like Hulu and CBS's Audience Network on broadcast stations' audience size?

BP: Well, you may occasionally watch a program online if you can't get to your TV, or it wasn't available, or you're a little geeky, but as a replacement offering, I don't think so. TVs are big screen, public viewing devices, computers are not. They're 18 inches away and are private experiences, you don't want people looking over your shoulder at it. They're completely separate uses and devices, so to try to put the wrong kind of programming on either one limits your audience severely.

BP: If it's completely invisible to the consumer then yes things change, but if people have to do a whole lot of work then it's not going to be big. The one thing that motivates the consumer through every product category is convenience. The easiest thing to get is what people will use, even if the quality is lower.

I think it's going to be pretty hard to get something in the home that's easier to use than pushing a button on my TV set that I already know how to do and I'm set up to do. To start connecting a box and moving stuff around, then my rule of thumb is about 10% of the population will adopt new technology because it's cool and neat, but it will be hard to get past that threshold.

VN: So it sounds out like you're not that bullish on these new boxes succeeding?

BP: Right now these require a step or two more, and my experience from the Internet is that just one more click means a lot less response. You think, well it's just one more click. But for example, when I was at Time Warner, we had 2 options for ordering PPV - one to click a button and one to call an 800 number. The response rate for the former was three times the latter - that's the power of ease of use and convenience.

VN: How about broadband's larger impact on the video industry - who's helped and who's hurt?

BP: Short form appears to be working very well. If there's a nifty little video that's great, but get above 3 mintues and you start to lose people - certainly you lose me. So who's advantaged - people who have short clips that they can build a business out of. But I still think the best thing to do online is to read and write, because it's quiet, it's personal, you can do it with others in the room. Importantly, it's not sequential. Internet is like a newspaper - it's random access - if I don't like sports I can skip that section. But video by its nature is sequential, it's linear, you have to have a story arc, you have to sit through the whole thing. So I think you're asking people to make a different sort of commitment.

VN: Your take on user-generated video?

BP: I think it's great. Probably 99.9% of it is crap, but the rest of it is brilliant. If you have a way of editing it down to the brilliant stuff and also allowing people to discover it easily, then it can be very appealing. So when you look at YouTube for example, and you can look at the "most viewed" and can skip my neighbor's kid's birthday party, that's great.

VN: Does user-generated video compete at any point with professionally produced content?

BP: Well, what's happening with the level of technology that's now in the hands of consumers plus their ability and knowledge of how to edit makes you ask the question, "who's really the professional now?" So I think you're going to see some shows on TV by what were once considered "amateurs." Professionals are anyone that has a good idea and other people want to see their stuff.

So I think the world is opening up and that's very healthy. When the studios have a set list of actors, writers and directors, by definition you're limiting the innovation process. When you've got those capabilities in the hands of everyone, you're now opening up to the possibility of some real breakthrough innovations. And that's good for the TV business, because if they do it in a 30 or 60 minute form, the best way to watch it is on the TV. And that's the medium that can pay the most for it, and has the biggest audience.

VN: What's your message to NATPE attendees?

BP: I'll be trying to put broadcast television into perspective. You hear so many negative stories yet I think it's one of the most misunderstood mediums out there today. So the idea is to try to point out how it relates to Internet, newspapers, magazines, what the trendlines are and explain why believe it's actually a very good business with a brilliant future.

People keep talking about Internet as if it's competing with TV. But what the Internet has really done is replace print - things like yellow pages, newspapers and traditional research books. It's also replaced communications - phone calls, voice mail. So when you hear these stories about the Internet replacing TV, I think they've got it all wrong.

VN: Thank you and see you in Las Vegas.

(Bob Pittman's NATPE presentation is Tues, Jan 29th at 10am)

OK, one last post related to CES, and then I promise to shut up about the show.

Observing the goings-on this week, it is evident that both content and consumer electronics firms have come to the same basic conclusion: each industry's success is inextricably tied to the other's. Each recognizes that the business dynamics of the future requires a new way of differentiating their products than they are accustomed. That means, for example, that TV makers can no longer just boast about better pictures. And that content companies can no longer bank on bigger stars or funnier sitcoms to deliver audiences and profits.

Rather, both industries recognize that we are moving into what I would call the "experience era" for video. That's to say, success with consumers is going to rest more on these industries' ability to deliver superior experiences which integrate content and technology in new and compelling ways. Rather than oohing and ahhing about their new TV's picture quality or how hilarious a certain episode was, going forward consumers will increasingly cite "how cool" something is.

"How cool" are code words for "how compelling is the experience". The new currency of video hipness will require that when I invite friends to my house and want to show off, I need to have more than just a honking-big screen or a digital collection of old programs - those will be commonplace. Instead, the experiences are what will matter. Things like seamlessly accessing broadband content on my TV, interacting with it -- along with other viewers -- from my couch, and moving it around my house for playback anywhere, in a snap. Delivering these types of experiences (and more) is the new competitive bar that content and technology firms should be aiming for.

My sense is these industry executives know this, and the partnerships we saw unveiled -- and those yet to come -- demonstrate this recognition. Listen to what Bob Scaglione, Sharp's SVP Marketing said in this NY Times piece: "We already all have beautiful HD televisions. How do you differentiate? One way to provide some really unique differentiation is to provide new content. That's why we're fighting to find the right content providers."

And then what Beth Comstock, president of NBC Universal Integrated Media said: "You can't talk about consumer electronics without talking about content.....We try every new technology that comes along."

In his CES keynote today, Comcast CEO Brian Roberts will outline several Comcast's initiatives (under the umbrella "Project Infinity") to stay competitive in the fast-changing video arena.

These include:

"Wideband"- New "wideband" broadband technology which allows much faster downloads (this is impressive, though was previously displayed at '07 National Cable Show). Wideband is aimed at blunting criticism that telcos' fiber networks have more capacity and faster speeds.

HD expansion - Plans for a 10-fold increase in the number of HD movies available in its VOD library to 3,000, with at least 6,000 total titles, including SD programming, eventually available. This is all meant to offset the widely held view that satellite and telco have surpassed cable in current HD offerings, a key value prop to millions of Americans now bringing home shiny new HD TV sets.

Fancast - Comcast's video portal will include 3,000 hours of streaming TV content, from NBC, Fox, CBS and others. These moves will help bring Fancast to parity with other syndicated partners of the networks which are themselves trying to proliferate their programs everywhere. Fancast will also allows remote scheduling of DVRs (both Comcast's and TiVo's), a feature that has been widely available at sites like TiVo.com and Yahoo for years now.

All of these actions are intended to help restore Comcast's reputation as the leading provider of entertainment programming, amid the swirl of changes that have enveloped the company. Despite its formidable size, Comcast is fighting competitive fires on virtually every front: fierce multichannel competition from satellite and telcos, rising expectations of HD content, consumer behavior shifts to broadband video consumption (premium and UGC) and place-shifting/time-shifting/device-shifting. The list goes on. Amid these changes, and with a slowing of the American economy, Wall Street has punished Comcast's stock price, cutting it in half in the last year.

While I applaud today's announcements, there is still one big strategic piece missing which Comcast has yet to comprehensively address: what are its plans to allow subscribers using its digital set-top boxes to seamlessly watch broadband video content as they do broadcast and cable programs?

As many of you know, I have been on a "broadband-to-the-TV" jag recently (see here, here and here) analyzing different options and their potential, or lack thereof. I continue to maintain that incumbents with boxes already in the home - mainly cable, satellite, telcos - are best-positioned to bridge the current divide between broadband and TV.

A breakthrough value proposition for Comcast would be allowing its subscribers to gain easy access on their TVs to YouTube, Break.com, Metacafe, NYTimes.com and all the others broadband sites that have surged in popularity. In theory, Comcast and other cable operators have always been about providing more video choices to subscribers. But the caveat has been those choices are only offered when Comcast makes a deal to carry these new channels. With broadband it's a wide open world. Any video provider - deal or no deal would gain access. This "openness" is a fundamental paradigm change for Comcast and other "walled garden" loyalists.

Surmounting this change to its business and cultural model are in fact Comcast's #1 strategic challenge. How to effectively respond to customers' broadband desires, while maintaining a robust economic and competitive model? When Brian Roberts, and others in the cable industry are finally ready to address the question of how they'll integrate broadband into their TV-based user experience, that will be a keynote well worth watching.

Microsoft grabbed the early PR spotlight at the Consumer Electronics Show (CES), now underway in Las Vegas, announcing a variety of deals across the broadband video spectrum. The deals, announced by Bill Gates in his traditional night 1 keynote, reinforce Microsoft's intentions to play multiple roles in what Gates calls the "first true Digital Decade."

Here's a look at Microsoft's deals and why they matter:

NBCU 2008 Olympics on MSN, using Silverlight

Microsoft and NBC, which has the broadcast rights to the '08 Summer Games from Beijing, announced that MSN would be the exclusive partner for NBCOlympics.com including thousands of hours of live video coverage, and that Silverlight, which is Microsoft's "Flash-killer", would be used. As I mentioned in my "6 Predictions for 2008", the '08 games are going to be the biggest broadband video event yet. The deal gains MSN lots of traffic and Silverlight lots of exposure and downloads, not to mention serious validation as a live streaming platform if it executes well.

ABC/Disney and MGM content on XBox LIVE

In a further move to bolster the premium-quality content available in XBox LIVE (the content offering that accompanies XBox 360), Microsoft announced that both ABC/Disney and MGM would now be providing both SD and HD content. These moves bring XBox LIVE's catalog closer to parity with iTunes, while keeping up the competition with Amazon Unbox and other stores. Separately, Microsoft said that XBox racked up 17.7 million units sold during the '07 holiday season.(correction, Microsoft press release misstated this number. Holiday sales were actually 4.3 million units, bringing cumulative units sold to date to 17.7 million, thx Karl)

XBox users have been remarkable active purchasers and downloaders using XBox LIVE, and previous briefings I've conducted with XBox executives suggest that the initiative has been particularly successful with HD. Since Xbox is purchased primarily as a gaming platform, it serves as a great Trojan horse opportunity for Microsoft to gain broadband access to the TV. Meanwhile, XBox LIVE has served as the deal unit for Zune's library as well, so these moves are important to watch as they benefit Microsoft's efforts to dislodge iPod from its perch as the leading digital media player. Only disappointment here is no ad-supported counterpart was announced for ABC programs, leaving AOL as ABC's only announced broadband syndication partner, as best I can tell.

BT and XBox 360 Integration

Microsoft leveraged Xbox 360 for another convergence play, announcing with BT that the company's "BT Vision" IPTV service would be available for XBox 360 owners as an integrated service offering. This means that no separate set-top box would be required for BT Vision subs. Though the box won't roll out until mid '08, this concept has compelling upside for both sides and could be a nice blueprint for future IPTV deals. It eliminates set-top capex for BT, while providing strong marketing benefits to both parties, helping drive broadband/TV convergence on the back of the popular XBox gaming console.

Showtime, TNT and CNN with new apps on Mediaroom, Samsung supporting Extender

Elsewhere, Microsoft announced that Showtime, TNT and CNN would be creating new apps for Microsoft's Mediaroom IPTV platform, which it says is now installed on 1M set-tops globally. And lastly, that Samsung will support Extender for Windows Media Center, which means that HD content can be sent over wired or wireless-N networks from PC to TV. Extender hasn't caught on yet, but Microsoft is continuing to push it as a bridge device. I've yet to test it, but have that on my list of to-do's.

Taken together, these announcements from Microsoft show the company's vast resources allow it to play a role in all aspects of the broadband era - software, devices, services, content, gaming, etc. Less pronounced in these deals was the company's recently added online advertising prowess, which will soon be applied to broadband video as well. Stay tuned for news on this front as '08 unfolds.

Last night I had a first-hand experience about why high-quality video delivery matters so much.

Ok, so credit to Charlie Rose that the full episode was offered (commercial free btw, this being PBS), and that it was highlighted right at the top of the home page. But that's about the only thing right about the experience. No exaggeration, the video probably hung at least 20 times and completely failed at least half a dozen times. It ranked as one of the worst broadband video experiences I've had in recent memory.

That said, I stayed with it the entire way, because how else would I get to see the episode? However, only a tiny fraction of viewers would be as patient as I was in this situation, even despite the fact that the site still says "beta."

So memo to all content providers: if you're going to put your top assets and talent online, make sure you have a quality delivery infrastructure in place to do them justice and please your fans. Second chances are hard to come by in the online world.

Driving home yesterday I caught a pretty interesting interview on NPR with Quarterlife's co-creator Marshall Herskovitz. It's only about 15 minutes, but the last 1/3 is quite insightful as Herskovitz expounds on the problems with today's Hollywood system and what he and partner Edward Zwick are doing with Quarterlife and NBC. You can listen to it here.

Last week a journalist interviewing me for a story asked: "Which industry or industries are potentially threatened the most by the rise of broadband video and on-demand usage?"

It's a tough question to answer because there are so many different variables at play. However, if pressed, my answer would have to be local broadcast TV stations. Taking aside the current WGA strike which exposes yet another industry vulnerability, local TV stations find themselves on the short end of just about every macro trend being driven by broadband and on-demand adoption. To thrive in the future, stations are going to have to radically reinvent their business models. It's by no means an impossible task, but it is going to require savvy and aggressive strategic moves.

Consider the perfect storm local stations are up against:

1. Broadcast networks (ABC, CBS, FOX, NBC) are avidly pursuing broadband distribution of their hit shows, creating competition to the traditional model of geographic programming exclusivity for local stations. Initiatives such as Hulu and CBS's Audience Network can be thought of as 'digital replicas" of the old analog affiliate model. Networks have gotten broadband religion; notwithstanding their finessed protestations, they're only going to be increasing their digital bets, leaving their affiliates with new competition for eyeballs at every turn.

2. On demand viewing is shattering prime time viewership and the all important "lead-in" to late news broadcasts. Between DVRs and VOD, more and more of the world is habituating itself to watching programs when they want to, not when they originally ran. So appointment viewing is out and along with it the concept of audience aggregation. Strip out prime time and the local station needs to build audience for its own shows and newscasts by itself.

3. Local news, weather and sports content are the mainstays of local newscasts, yet the availability of this kind of content is becoming pervasive and conveniently accessible. Remember when you had to stay up late to find out what the scores were? Doesn't that seem quaint now? These days every spec of information about these key categories is just a click away, further undermining local newscasts' value.

4. Advertisers have more options than ever and are gradually going to move spending to approaches that are both more ROI-centric (e.g. Google) and a better match for their customers' media behavior. Think about it - if you're a Honda, Scion or Volkswagen dealer targeting younger demos, is local TV really the best way to reach this audience? The range of options for local advertisers is already robust and is only going to become more so in the future.

All of this said, however, all is not lost by any stretch. With the right leadership, I happen to believe that local stations can find ways to manage their way through the chaotic days ahead. Tops on my list would be embracing broadband as a new programming platform to leverage their local expertise, blasting their content out through every possible distribution path, radically re-training their ad sales teams to be Internet-literate, cross platform-obsessed warriors and re-creating their brands' perceptions for the broadband and on-demand era.

Broadcast TV stations need to look no further than their cross-town rival newspapers to understand the gale-force competitive winds coming their way. Hopefully with these examples plainly visible, they'll prepare themselves appropriately.

This piece in today's Hollywood Reporter about a newly-released survey ("Broadband Won't Overtake TV, Execs Say") caught my eye because it continues a highly speculative, and largely irrelevant debate pervasive throughout the industry about future video consumption patterns.

Why's the debate highly speculative? Because truly, none of us has any idea how people will consume video in 2012. There are just too many variables and too many unknowns to make an accurate prediction. Here's a point of comparison: let's say 5 years ago, in 2002, you were asked what percentage of Americans would consume broadband video in a given month? How many (or few!) of us would have predicted a whopping 75%? (the correct answer according to comScore in July '07). Better yet, how many of us would have guessed that over 25% of this consumption would be at just one site (YouTube) - a site that didn't even exist in 2002? Given these examples, who's to predict what 2012 will bring?

And why's the debate largely irrelevant?

Read on by clicking here...

Why's the debate highly speculative? Because truly, none of us has any idea how people will consume video in 2012. There are just too many variables and too many unknowns to make an accurate prediction. Here's a point of comparison: let's say 5 years ago, in 2002, you were asked what percentage of Americans would consume broadband video in a given month? How many (or few!) of us would have predicted a whopping 75%? (the correct answer according to comScore in July '07). Better yet, how many of us would have guessed that over 25% of this consumption would be at just one site (YouTube) - a site that didn't even exist in 2002? Given these examples, who's to predict what 2012 will bring?

And why's the debate largely irrelevant? Because, in my opinion, it presupposes a continuation of the existing paradigm: an either/or choice of TV consumption OR broadband consumption. Yet these traditional lines of demarcation are already fading. Broadband programming is starting to migrate to networks, as in the recent case of Quarterlife's move from MySpace to NBC, while at the same time network TV programming is increasingly being consumed online. Meanwhile shorter form programming, not bound by traditional advertising pods is on the rise, further confusing industry definitions. Sites like Metacafe, blip.tv, Veoh and others are driving a whole new category of video that could eventually be a more popular format than 30 or 60 minute programs.

These days consumers themselves are driving this "broadband or TV" debate into irrelevance. They're busy accessing programming on demand - whether "broadband" or "TV" - through a host of devices and services whose popularity is only going to skyrocket in the future. These include TiVo, Xbox, Netflix, Amazon Unbox and many others. Yet traditional thinking is still pervasive. For example, just this week, the chairman of the FCC has attempted to enact new regulations governing how cable programming might be unbundled. Fortunately this initiative collapsed, but take heed, market forces will eventually cause cable operators to offer programming as consumers want it, not how tradition dictates.

I think Jim Denney, a TiVo product management VP whom I spoke with yesterday hit the nail on the head. Jim said TiVo's philosophy is to have their users "not worry about where any particular video's coming from, but rather just have all choices easily available." That strikes me as a winning business approach for the turbulent and converging 5 years that lie ahead. In my view, those companies which think about how to deliver value to consumers on their terms, rather than being guided by increasingly artificial distinctions, will be the ones to emerge as the winners in 2012.

Does TV programming beget broadband video programming or is it the other way around?

If you were expecting a simple answer, recent evidence suggests that none will be forthcoming. Step away from the relatively straightforward model of streamed or downloaded TV episodes, and the question of how original video content will be produced and distributed between broadband and TV is whole lot more complicated. Layer on the writers' strike and the world only fogs up further.

For those who see broadband as a pathway to TV, Quarterlife's deal announced last Friday with NBC to bring their new Quarterlife series to the network following its run on MySpace offers encouragement that Internet programming can move to the TV (bear in mind that Quarterlife was originally pitched as a TV series however).

Another example is TMZ.com, which has been successfully syndicated as TMZ TV this fall by Warner Bros. TMZ shows us that a brand that was created and built solely online can make the leap to TV. And just last week TV Week reported that Twentieth Television and Yahoo were close to a deal to create a new syndicated series based on popular broadband videos that they've collected.

On the flip side, there is plenty of evidence of opportunities for TV programs spinning off broadband programming, or existing TV producers with assets and skills pushing into broadband as a first outlet for their work.

Consider Sony's Minisode Network, with distribution on MySpace, Joost, AOL and Crackle. In an effort to squeeze more life out of its library of classics, in June Sony launched abbreviated versions, for broadband "snacking". This initiative is being closely watched as a model for how to repurpose existing assets to make them more palatable for attention-challenged online audiences.

And Endemol's recent deal with Bebo to produce "The Gap Year" series for exclusively for Bebo's audience shows that a successful TV producer is turning its sites on broadband as a first outlet.

All of these deals underscore broadband's disruptive nature - its ability to create new opportunities for incumbent players, and also for new entrants. My read is that most (though not all) broadband producers would love to make the leap to the TV. In the mean time, broadband offers a low-cost, interactive distribution path to experiment with more engaged audiences.

Red Lasso is a stealthy company that's been around for about 2 years, though only now coming up to the surface. I did a phone briefing earlier this week with Kevin O'Kane, President/founder and Al McGowan, COO. They also gave me access to the private beta and I've been playing around with it for the last couple of days.

Red Lasso's goal is "to help broadcasters extend the life of their content, legitimately." They're positioning themselves as "an anti-YouTube", allowing broadcasters to proactively contribute long form video and audio, which users can then search and clip for exactly the content they're looking for. The video can simply be watched or it can be embedded. Though they don't want to be seen as an "online DVR", it is tempting to see them as such. Monetization is most likely through advertising, though a licensing model is possible as well.

Red Lasso's playing in the same basic space as Voxant (note: a VideoNuze sponsor) and Clip Syndicate (see this for more), with a key differentiator being the long form content availability and clipping feature. Red Lasso is currently taking 150 different broadcast feeds from around the country, and their ability to get the industry to cooperate is helped by the fact that Al and Kevin are broadcast veterans.

Red Lasso is trying to appeal to at least 3 types of users: broadcasters seeking to flexibly publish specific video clips on their own sites, independent web sites trying to feature key segments of their own video (e.g. sports teams) and bloggers seeking to embed video. They believe this third group is the most fertile territory and I agree.

Bloggers across the spectrum (politics, entertainment, sports, etc.) have been hungry for video clips to enhance their sites. I believe this demand will only increase. If you're a blogger looking just for the "money quote", clipping from long form assets provides a lot of value. I did some searching and clipping (below is one result).

I found the clipping pretty straightforward, and I liked the fact that I could save mine, which I can also publish to the community for widespread viral use if I choose to. The searching is based on phonetic and closed caption text. It was not quite as accurate as I hoped, but video search is a very tough nut to crack, and so I'd expect room for improvement there.

At a strategic level, Red Lasso again demonstrates how broadband's influence is going to be felt in the broadcast TV industry. I think traditional concepts of appointment viewing, geographic constraints and local ad sales are all going to seem quaint as broadband allows quality video to fly around the net. I'd urge broadcasters to be looking closely at all the players in this space.

While the majority of my focus is on media companies' use of broadband video, a presentation by executives of Wachovia Bank last week at the VeriSign customers' meeting served as a reminder that broadband is being used successfully by non-media companies as well.

Wachovia, which is America's third largest bank by deposits, is making strong use of broadband, particularly as an internal communications vehicle, now turning out 800 individual video "programs" per year. These include, "Take 5," a five minute daily broadcast on their internal "V-Net" network, continuous video pumped into all of their branches, customer podcasts and support for live shots of their analysts from Wachovia's trading floors when interviewed on business news broadcasts.

All of this is managed by an impressive staff of 18 full-time staffers, 10 full-time contractors and 20-30 freelancers. They're managing a state-of-the-art digital production facility in Charlotte that is likely comparable to anything found in the broadcast industry. The company has also deployed 80,000 desktops using VeriSign's Kontiki commercial P2P platform, which it says is highly reliable and scalable.

Patty Perkins, a Wachovia VP who's been the key evangelist for video's growth, noted in her presentation that senior executives video consider video a critical mechanism in keeping the bank's far-flung employee base informed and up-to-date. In fact, Patty said that in internal surveys, the Take 5 program is consistently cited as the number 1 driver of employees feeling more connected to the bank and its goals.

Patty and many of the others in Wachovia's enterprise video group are broadcast veterans. This got me to thinking, maybe with there's a new revenue opportunity for broadcast professionals to help enterprises understand how to leverage broadband for internal communications. If Wachovia's any example, there may be a lot of upside.

I'm now back from Digital Hollywood and I've had an opportunity to give Hulu 1.0 a spin as part of its private beta. I've also looked the Hulu offering at AOL which is not yet comparable (less content, fewer features) to the one at Hulu.com. So I think that for now using Hulu through the private beta is the only way to get the full 1.0 experience.

My initial reactions are positive and I give Hulu 1.0 a solid B+, with many of the fundamentals well done, but with certain features needing improvement, as to be expected from a beta launch. All in all, considering the short development window in which Hulu was created, the Hulu team deserves much credit.

Hulu 1.0 should more than silence those who snarkily pre-labeled it "Clown Co" and misunderstood it to be a "YouTube killer", which it is not. Hulu has not embarrassed its primary investors (and content providers) NBC and News Corp in any way, and in fact, has set the stage for taking back control of how its full-length content and clips are distributed online. This was of course the investors' main motivation - creating a legitimate platform for them to control their online destiny and capture the lion's share of the economics.

Once clicking into a clip or full length video, the video player experience was excellent. Not only is the player consistent for all videos, but the quality was as well. I never experienced any delays, re-buffering, pixelation, audio/video out of synch or other typical video issues. In full screen mode there was a little degradation, but was certainly above the acceptable-quality bar.

The biggest knock on the content is its inconsistency. For example, click on "24" and you can choose from 3 episodes from Season 1 and one from Season 6. Battlestar Galactica gives all of Season 1, but nothing else. Same for a classic like The Mary Tyler Moore Show. Huh? All of this makes it confusing for the user to know what to expect. If all this is due to rights or other limitations, it would be good for Hulu to signal or explain this somehow.

Of course, the bigger question is whether this limited amount of advertising is sufficient to make Hulu's economic model work, especially if sometime down the road, online consumption cannibalizes on-air consumption.

Yet for now the create a clip capability is buried in the "Share" feature, which seemingly only allows the custom clip to be emailed. And pinning down your desired start and stop points is very tough. Since custom clips are the only UGC-like opportunity in Hulu, these should be given more prominence. Ideas could include showcasing a users' gallery of favorites, allowing them to be saved to playlists, syndicating them to partners' sites and allowing them to be mashed up.

Not breaking news now, but Hulu lifted the veil of secrecy a bit today, releasing some screen shots and setting up a private beta (I'm trying to yank some strings to get access), in advance of a planned public launch early next year.

Hulu's been surrounded by a bunch of naysayers from the beginning, though much of the nay-ing has been based on little else than cheap shots about the name, delayed launch, etc. Things that in the grand scheme of things mean virtually nothing in my opinion and only serve to distract attention from the real question at hand: can Hulu become NBC and Fox's (for now) formula for success in the broadband video era?

Now it's time for Hulu to silence the rabble. Until I get my own hands on it, I'm going to reserve in-depth commentary. But at least several things that look intriguing:

• Shorter commercial breaks and overlays - Looks like the tension between user focus vs. advertiser focus is skewing toward users. A welcome change from traditional media thinking.
• Widespread distribution - I've been a big fan of this from the start. Deals with AOL, Yahoo, MySpace, Comcast, etc. ensures that Hulu content is widely available where users already are.
• More content deals - One of the knocks on Hulu was that neither CBS nor ABC joined up front. However, recent deals with Sony and MGM show Hulu continues to gain traction with other premium providers.
• Features - Beyond the standard range of embed, full-screen, send-to-friend features, it looks like there's an interesting "custom clip" capability to let users crop out scenes from favorite shows to pass along. This user control could enable massive new short form video inventory and could be a precursor to more interesting and creative user-generated mashups. All of this is highly monetizable.

More thoughts on Hulu to come.

As I have written repeatedly, robust syndication is a crucial piece of the broadband video economy. That's because advertising is going to be the main business model for a long time to come. And the only way to make the ad business work is through massive traffic increases, and of course improved ad monetization methods.

There's no better way to scale up traffic than through turnkey syndication. Google's ability to harness AdSense as a combination video syndication engine and monetization platform for content providers (by eventually marrying video units to AdWords) is unmatchable by anyone else.

As Google expands this initiative, it will be simultaneously alluring and threatening to others. Trying to capture the same benefits without the same underlying technology infrastructure and far-reaching distribution network is going to be very challenging to replicate.

Take for example, Hulu, the News Corp/NBCU JV, meant to regain control over their broadcast TV programs. Hulu has been striking its own distribution deals and will no doubt monetize its traffic with a "feet-on-the-street" ad sales approach. While there are benefits to this approach to aggregate the biggest sites as partners, Google's one-stop syndication/monetization capability provides the turnkey, hands-off approach needed to gather up the all the rest of the market (i.e. the Long Tail).

Depending how Google chooses to split the revenues between AdSense partners and content providers, Google/YouTube could well become a dominant part of the broadband-centric video value chain that is now taking shape.

Today I had the privilege of speaking to a top broadcast TV group's senior executives at their annual offsite. Their president has seen my presentation at the NAB Futures Summit 6 months ago and invited me in to speak.

It's important to recognize there's a bit of a schism happening in the broadcast TV industry, fueled by broadband. One the one hand, broadcast networks (ABC, CBS, FOX, NBC) are rushing headlong into broadband distribution. It's hard to remember, but it's been less than 2 years since Disney/ABC did its first digital distribution deal with iTunes. Since that time all networks have struck iTunes and other download deals, have put made most of their hit shows available for streaming, and more recently have plowed into new ventures (Hulu, CBS IAN, etc.) meant to dramatically broaden their digital reach. In short, the networks have smelled the coffee - they are moving to create what I've called a "digital replica" of the traditional broadcast industry.

None of this is good news for local TV broadcasters, until recently the only place to go for networks' hit programs. Naturally these digital alternatives will further fragment audiences jeopardizing lead-ins for late news and undermining ad revenues. On the bright side, many broadcasters aren't sitting still. In recent research Broadband Directions completed, we found that 46 of 50 (92%) stations we've been tracking now offer broadband video at their web sites. And of the 46, 39 (85%) are selling some kind of ads (pre-roll, display, sponsorships) against their video.

While this is encouraging, there's a long way to go. By and large local broadcasters' broadband video is a collection of newsclips, offering little personalization, targeted ads or widespread syndication. These and other areas offer broadcasters ample opportunity. Broadband is a real game-changer for local broadcasters, who need to gird themselves for its coming onslaught. But with sufficient willingness to adapt their models, they should be beneficiaries as well.

CM is offering Syndicaster free for 2 main reasons, first because they want to incent broadcasters to use it widely, in turn helping CM's Clip Syndicate unit build a gigantic library of clips to syndicate around the web (as Sean says "to lubricate the digital broadcast syndication market"), and second, because they can. How? Because Critical Mention already takes video feeds from 240+ broadcasters covering 85%+ of the U.S. population, digitizing them for its CriticalTV search and monitoring system. I'm assuming that beyond development, there's little incremental cost in running Syndicaster.

Sound a little confusing? To simplify, there's a web of product offerings, all powered from the same underlying infrastructure. Actually, it's a very cool example of the scale opportunities in digital media. Once you've collected the data (in this case video, which is also transcribed into text), there are multiple products, markets and customers to serve. And it also shows that traditional hardware/software solutions continue to be at risk in the Internet age.

Syndicaster's now being offered to 450 initial broadcasters. Soon, others can sign up too. Sean and Sharon also gave me a sneak peek into some other upcoming stuff. All very interesting. Keep an eye out for more soon.