Posts for 'Downloads'

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This morning video technology company Sonic Solutions is announcing that Sears (which also owns K-Mart), will be the latest company to license its RoxioNow platform, a customizable white-label electronic sell-through (EST) and VOD rental service delivering a large library of premium new release studio content through a variety of connected devices. The deal shows momentum for the fledgling platform that has within the past year signed Blockbuster, Best Buy, and Boxee, while amassing a library of over 30,000 download to own and 5,000 new release studio titles.

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Everywhere I look there are companies doing innovative, clever things to bring broadband video to the TV and to mobile devices.

Yesterday brought another great example, from Vuze, a company with roots as a BitTorrent client that has evolved to an aggregator of hi-def niche broadband video using its desktop application for discovery, download and playback. Vuze announced an update that enables users to drag-and-drop downloaded videos for playback on non-PC devices such as Xbox, PS3 and - via an integration with iTunes - to the iPhone, Apple TV and iPods. It's a pretty cool extension of the Vuze client experience and I spoke with Vuze's CEO Gilles BianRosa and Sr. Director of Marketing Chris Thun to learn more.

Without getting too far into the technical details, what Vuze has done is capitalized on hooks that have existed in these various devices, making videos downloaded via Vuze visible in these devices' interfaces. As Gilles explained it, these hooks have been available for a while, but only the super-technical would have invested the time and effort to benefit from them.

The connections to Xbox (installed base of 30M) and PS3 (installed base of 23M) are quite complimentary to Vuze, which has 10M unique visitors/mo and about 50M downloads to date, because its content library is heavily skewed toward SciFi, animation, games and comedy (all HD btw) along with its user base. In other words, there's an affinity audience who will immediately benefit from being able to watch Vuze's content on their big screens and on-the-go. In fact, in a recent survey of its users for how they'd want to connect their PCs to TV and mobile, Vuze got 30K responses with a strong emphasis on gaming and Apple devices.

In prior conversations with Gilles I've raised a concern about the viability of Vuze's (or anyone's) client download model given the ever-increasing quality of browser-based streaming. But these integrations do shed new light on the value proposition of having a desktop presence. With its update, Vuze actually goes one step further by automatically transcoding downloaded videos into the format appropriate for the target device, often in real-time, thus eliminating playback issues.

Gilles noted that this is a beta release however, and that one current limitation is that ads cannot be passed through. This is a not insignificant gap for an ad-supported site. Vuze hopes to have ads up and running within a month or so. It also has its eye on integrating with additional devices. My bet is that TiVo is next up given that TiVo founder Mike Ramsey sits on Vuze's board.

For now Vuze's content is relatively nichey and Gilles concedes that despite ongoing negotiations with major studios and TV networks, they're still getting comfortable with Vuze's P2P platform. Given the crowded video aggregator space, Vuze's ongoing challenge is to bolster its content library to broaden its appeal.

But Vuze's new update, sure to mimicked by others, which comes on top of Netflix reporting 1M Watch Instantly users connecting to their Xboxes and consuming 1.5 billion in the first 2 months of its availability, Boxee's multiple integrations and other PC-to-TV convergence initiatives underway, shows the huge pent-up interest users have in watching broadband video on their TVs. The genie is way out of the bottle and content providers need to begin adapting to the coming landscape where video flows between PC, TV and mobile, offering unprecedented convenience to users.

What do you think? Post a comment now.

Amazon and Roku announced yesterday that Amazon's VOD service will soon be available on Roku's $99 Digital Video Player. The deal starts to make good on Roku CEO Anthony Woods's intentions about "opening up the platform to anyone who wants to put their video service on this box."

With Amazon VOD's 40,000+ TV programs and movies added to the 12,000 titles already available to Netflix subscribers via its Watch Instantly service (plus more content deals yet to come), little Roku is starting to look like a potentially important link in the evolving "over-the-top" video distribution value chain.

More interesting though, is that I think we're starting to see the battle lines drawn for supremacy in the download-to-own/download-to-rent premium video category between Amazon on one side and Apple on the other. Though Apple dominates this market today, having sold 200 million TV programs alone, there are ample reasons to believe competition is going to stiffen.

Apple is of course in the video download business for the same reasons it was in the music download business: to drive sales of the iPod and more recently - and to a lesser extent - the iPhone. According to the latest info I could find, iTunes now has 32,000+ TV programs and movies, including a growing number in HD. For now that's slightly less than Amazon VOD, but my guess is that over time the two libraries will be virtually identical.

While Apple has a near monopoly on portable viewing via the iPod and iPhone, it is a laggard in bridging broadband-to-the-TV. Its Apple TV device, introduced in January, 2007, and meant to give iTunes access on the TV, has been an underperformer. Certainly a detractor has been price, with the 40GB lower-end model still running $229. But more importantly, as an iTunes-only box, Apple TV perpetuates a closed, "walled-garden" paradigm that consumers are increasingly rejecting (as companies like Roku astutely understand).

For Amazon, the world's largest online retailer, video downloads are a rich growth market. The company brings significant advantages to the table, starting with tens of millions of existing customer relationships with credit cards or other payment options just waiting to be charged for video downloads. Amazon has strong brand name recognition and trust. And of course, it has a near-limitless ability to cross-promote downloads with DVDs and other products.

Determined not to be left behind in the great race to get broadband delivered video all the way to the TV, it has been integrating its VOD service with 3rd party devices like TiVo, Sony's Bravia Internet Video Link, Xbox 360 and Windows Media Center PCs. Its latest deal with Roku is far from its last.

Amazon VOD's adoption will benefit from the fact that there are many non-Amazon reasons that people will be buying these devices. For example, consider Roku, TiVo and Xbox 360. With Roku, Netflix is fueling sales. As Netflix subscribers realize that new releases are generally not available in Watch Instantly, but are through Amazon VOD on Roku, they'll be prone to give Amazon VOD a try (the Netflix limitation is course due to Hollywood's windowing, and another reason why I believe it's crucial for Netflix to make deals with broadcast networks for online distribution of their hit programs). For TiVo and Xbox 360, each has a well-defined value proposition for consumers to purchase. Amazon VOD's availability is a pure bonus for buyers.

Apple and Amazon hardly have the market to themselves though. Others like Microsoft Xbox LIVE, Vudu and Sezmi are vying for a place in the market. And then of course there are the VOD offerings from the cable/satellite/telco video service providers, who have big-time incumbency advantages. Not to be forgotten in all of this is consumer inertia around the robust DVD market, which to a large extent all of these video download options seek to supplant.

In the middle of all this are Joe and Jane Consumer - soon to be overwhelmed by a barrage of competing and confusing offers for how to get on-demand TV program and movie downloads in better, faster and cheaper ways. In this market, I believe simplicity, content choices, brand and especially price will determine the eventual winners and losers. These are front and center considerations for Amazon, Apple and all the others going forward.

What do you think? Post a comment now.

Looking back over two dozen posts in May and countless industry news items, I have synthesized 3 key topics below. I'll have more on all of these in the coming months.

1. Broadband-delivered movies inch forward - breakthroughs still far out

In May there was incremental progress in the holy grail-like pursuit of broadband-delivered movies. Apple established day-and-date deals with the major studios for iTunes. Netlix and Roku announced a new lightweight box for delivering Netlix's "Watch Now" catalog of 10,000 titles to TVs. Bell Canada launched its Bell Video Store, complete with day-and-date Paramount releases, with others to come soon. And Starz announced a deal with Verizon to market "Starz Play" a newly branded version of its Vongo broadband subscription and video-on-demand service.

Taken together, these deals suggest that studios are warming to the broadband opportunity. This is certainly influenced by slowing DVD sales. Yet as I explained in "iTunes Film Deals Not a Game Changer" and "Online Move Delivery Advances, Big Hurdles Still Loom" broadband movies are still bedeviled by a lack of mass PC-TV connectivity, no real portability, well-defined consumer behavior around DVDs and the studios' well-entrenched, window-driven business model. Despite May's progress, major breakthroughs in the broadband movie business are still way out on the horizon.

2. Broadcast TV networks are embracing broadband delivery - but leading to what?

Unlike the film studios, the broadcast TV networks are plowing headlong into broadband delivery, yet it's not at all clear where this leads. In "Does Broadband Video Help or Hurt Broadcast TV Networks" and "Fox's 'Remote-Free TV': Broadband's First Adverse Impact on Networks?" I laid out an initial analysis about broadband's pluses and minuses for networks. I'll have more on this in the coming weeks, including more in-depth financial analysis.

On the plus side, in "2009 Super Bowl Ads to Hit $3 Million, Broadband's Role Must Grow," "Sunday Morning Talk Shows Need Broadband Refresh" and "Today Show Interview with McClellan Showcases Broadband's Power," I illustrated some opportunities broadband is creating. On the other hand, "Bebo Pursues Distinctive Original Programming Model" and "More Questions than Answers at Digital Hollywood" explained how exciting new programming approaches are taking hold, challenging traditional TV production models. Broadcasters are in the eye of the broadband storm.

3. Advertising's evolution fueled by innovation and resources

Last, but hardly least, I continued on one of my favorite topics: the impact broadband video is having on the advertising industry. Over the last 10 years the Internet, with its targetability, interactivity and measurability has caused major shifts in marketers' thinking. With broadband further extending these capabilities to video, the traditional TV ad business is now ripe for budget-shifting. We'll be exploring a lot of this at a panel I'm moderating at Advertising 2.0 this Thursday.

In "Tremor, Adap.tv Introduce New Ad Platforms" and "All Eyes on Cable Industry's 'Project Canoe'" (from Mugs Buckley), key players' innovations were described along with how the cable industry plans to compete. Content providers are being presented with more and more options for monetizing their video, a trend which will only accelerate. Yet as I wrote in "Key Themes from My 2 Panel Discussions Last Week," many issues remain, and with so many content start-ups reliant on ads, there may be some disappointment looming when people realize the ad market is not as mature as they had hoped.

That's it for May. Lots more coming in June. Please stay tuned.

Online movie delivery is back in the news, but dramatic change is still well down the road in this space as usability, rights issues and incumbent business models/consumer behaviors pose formidable hurdles.

Yesterday Netflix announced a $99 appliance with Roku, enabling the company's "Watch Instantly" streaming service on TVs. That news follows Apple's deals with a number of big studios in early May obtaining "day-and-date" access to current titles. And today brings news that Bell Canada, that country's largest telco, is formally launching its Bell Video Store, also providing day-and-date delivery, of Paramount titles to start (and soon others), plus portable viewing on Archos devices.

Netflix, which I last wrote about here, took a shot across the bow of Apple TV and Vudu by introducing the Roku box, the lowest-priced broadband movies appliance yet. Apples-to-apples comparisons aren't fair as the stripped-down Netflix/Roku box doesn't have a hard-drive or equivalent processing. That inevitably means lower quality delivery vs. locally-stored content with the others, plus uncertainty about HD-delivery. Netflix/Roku's big advantage is that it's a value-add service for current Netflix subscribers, meaning no new fees as with the Apple TV/Vudu approaches.

However, Watch Instantly has older titles and amounts to less than 10% of Netflix's total catalog. I don't see that changing much; Watch Instantly runs smack into studios' incumbent windowing approach and deals with HBO, Showtime and Starz for premium TV. Netflix's model is built on the home video window, so new online delivery rights must be obtained which will be a tough road. However, with Paramount, MGM, Lionsgate and others splintering from Showtime recently to set up their own premium channel, it's possible that some studios' rights may loosen up, but of course at a price.

Still, I don't see the Netflix/Roku box breaking 10% penetration of Netflix's sub base any time soon, barring a box giveaway. Enlarging the value proposition by licensing the Roku technology for inclusion in other devices (e.g. Blu-ray) could also help drive adoption.

Meanwhile, today Bell Canada is announcing the formal launch of its Bell Video Store. In beta since late '07, it offers 1,500 titles, now including day-and-date delivery from Paramount (and others soon according to Michael Freeman, Bell's director of product management who I spoke to yesterday). This is noteworthy, as it appears to be the first time a service provider has received day-and-date online access from any studio. If other providers follow suit we may finally witness some internal competition with sacrosanct-to-date Video on Demand initiatives.

By using ExtendMedia's platform, Bell is also enabling downloads-to-own directly to Archos portable devices. With a couple million satellite homes and fiber IPTV fiber-based deployments continuing, there are multiple three screen options looming for Bell. Yet for now these are limited. Michael confirmed Bell has no plans to offer a branded movie appliance a la Netflix/Roku, meaning it will dependent on XBoxes and other PC-TV bridge devices.

In the last few days there's been a lot of attention paid to Apple's deals with Disney, Fox, Warner Bros, Paramount, Universal, Sony, Lionsgate, Imagine and First Look Studios giving iTunes day-and-date access to these studios' current films.

As an advocate of the broadband medium, naturally I'm delighted to see studios put broadband distribution on a par with DVD release. The deals should rightly be interpreted as another step in the maturation of the broadband medium.

However, these deals, in and of themselves, do not constitute a game-changing event for paid downloads of feature films. That's because until there's mass connectivity between PCs and TVs and much-improved portability, consumers' willingness to buy is going to be significantly muted. Consumers' inability to easily watch a feature film on their widescreen TV or easily grab-these- movies-to-go (as with DVDs) are a huge drag on the download value proposition, easily swamping its new convenience benefits.

I believe that lack of mass connectivity between PCs and TVs is the last major hurdle to unlocking broadband video's ultimate potential. It is also the firewall that's preserving a lot of incumbents' business models (cable operators, broadcasters, etc.). No question, Apple and iTunes are powerful marketing partners for the studios, and their download revenue will certainly increase from its current modest base. But not even Apple's mighty brand (and certainly not its anemic AppleTV device) is enough to compensate for broadband's current deficiency.

Yesterday brought the public release of Adobe Media Player 1.0, first announced almost a year ago. AMP enters a very crowded space of other media players including its own Flash player, plus Windows Media Player, RealPlayer, QuickTime, SilverLight and others.

At a time when the broadband video industry in general and mainstream users in particular crave standardization and simplicity, can another media player, with a "walled garden" content strategy to boot, add new value? While it's awfully tempting to say "no," I think there are reasons why AMP could well matter, subject to how well Adobe delivers on its vision. Here's why:

AMP offers 2 things that, in my opinion, the market still needs. First, a widely used downloadable app that specializes in delivering on FREE video content. Before some of you jump up and say, "Will, what about iTunes?" keep in mind that iTunes offers primarily a PAID video catalog (though to be sure there are some free video podcasts). Second, and related, AMP' provides a download environment in which advertising can be properly inserted, measured and reported on.

These are important because together they open up an entirely new consumer use case for broadband video: offline, free, ad-supported viewing. I've been saying for a while that an odd dichotomy has taken root in the broadband industry, particularly for network programs: users can get either free, ad-supported streamed video at lots of places (provided they're online) OR they can get paid, downloaded video (iTunes model) which allows offline viewing. But this has meant that someone who wants to watch a show offline, but isn't willing to pay for the pleasure of doing so is out of luck (one exception is NBC Direct). Having media stored locally in AMP would allow the offline, free use case I'm describing. This would open up a boatload of premium ad inventory that advertisers savor.

If that's AMP's opportunity, then the question is how well are they executing on it? Though it's never fair to judge a version 1.0 on its first day, my experience with AMP shows there's room for improvement. First is the currently thin content selection that needs to be massively built out to be appealing and competitive. Second is an inconsistent user experience in which some shows are downloadable, yet many are not (e.g. CSI, Hawaii Five-O, Melrose Place). Third are getting the basics right. In my case, when I did download some episodes successfully (blip.tv's "DadLabs" and "Goodnight Burbank") they didn't show up in my download section at all. Ugh. I'm hopeful that Adobe will be able to address all of these.

On the ad side, I think there will be plenty of enthusiasm from ad technology firms to integrate with AMP as Adobe proves it can drive millions of AMP downloads (in fact Kiptronic announced its integration yesterday and other will surely follow). Plus, advertisers should be expected to get on board.

It should be noted however, that even for a mighty brand like Adobe, winning the hearts and minds of users to download and use AMP isn't a trivial undertaking. I have some personal experience with this from my early days consulting at Maven Networks, which offered an eerily similar download app as AMP when the company started up. Though that was in the Mesozoic broadband era of 2003 and Maven was an unknown entity, the company never got much traction with its download app and eventually transitioned over to a streaming model. Since then I've come to believe that premium content must drive the download process, not vice-versa. One successful example of this is ABC.com using its shows to drive millions of downloads of the Move Networks player.

Net, net, AMP is a timely product that could well matter. How well Adobe executes on its vision will determine to what extent it does.

Today, I'm pleased to welcome the first post from Colin Dixon, Practice Manager, Broadband Media at The Diffusion Group, who is also a longtime industry executive.

I also want to highlight that as part of The Diffusion Group's 4th anniversary today, it is offering a special promotion for new clients of 4 reports for $4,000 (reports are usually $2,500 apiece) which also includes a 30 minute consult with founder/principal analyst Michael Greeson. The opportunity will be available for 4 hours, 4 minutes, from 12 noon U.S. Central Time today. Enjoy!

BBC's iPlayer a Model for U.S. Networks?

by Colin Dixon, The Diffusion Group

There's a lot of angst in Hollywood at the moment over broadband video. With video advertising models online in their infancy, the content providers are rightfully concerned about cannibalizing their linear channel ad revenue for unproven broadband models. Will eyeballs follow if a content provider puts all of its shows online? What's the right balance between too little and too much online content? With the variable quality of broadband connections, should a viewer be able to download the show for free rather than streaming it? Questions such as these are the source of much hand-wringing.

But what would happen if a major network were to throw caution to the wind and put everything they broadcast online and let their viewers download the shows for free to watch when and where they liked? Perhaps we can learn some lessons from the UK where the BBC, unfettered by the profit motive, is doing just that.

Late last year the BBC released its iPlayer through broadband connections to the British public. This proprietary client, available on PCs and iPods throughout the UK, makes available for free download every show broadcast on all of the BBC's many radio and television channels. Once downloaded, a show can be watched, ad free, anytime over the following 30 days (although once you start to watch a show, you have 7 days to finish viewing it.)

The British public, apparently, love it. In January, they downloaded some 11 million shows with usage of the service peaking at over a half million downloads in one day. Over 2 million people are perfectly comfortable relaxing in front of the PC catching up with the latest episode of "Doctor Who" or "EastEnders." And because the show is downloaded, not streamed, the quality is always great and the shows can be watched when and where it's convenient.

But perhaps this is just a British thing. Surely the same rules don't apply to the US market? Far from it. As we found when we surveyed broadband video users, there is strong evidence that US users will embrace online delivery with the same fervor as their UK brethren. When we surveyed nearly 2000 US broadband users, we found that 40% were watching an hour or more of broadband video. More amazing still is that 12% of broadband users were watching 25% or more of their television online. If you have a teenager in your home, I'm sure this will not come as a surprise to you!

Numbers like this are noteworthy in themselves. But it's important to remember that, in comparison to the BBC's iPlayer, the online viewing experience in the US is a mess. Shows are scattered over multiple websites and free ad supported show downloads are rare indeed. Broadband video viewing is an incredibly variable, often frustrating experience. What is clear is that given the same circumstances, the BBC's experience is likely to be repeated here.

The message for US content providers is clear: if you put it all online for free, and let people download and watch whatever, wherever and whenever they want, the eyeballs will follow. But with large numbers of people already devoting 25% or more of their TV viewing online, the issue of cannibalizing existing linear broadcast ad revenues is rapidly becoming irrelevant. The ad revenues will migrate to the Internet anyway!

One can only speculate what can happen when, as we predict for 2011, there are over 100 million households worldwide that are watching broadband video not from their PCs, but from broadband-enabled TVs.

What do you think? Post a comment and let everyone know!

I had 3 key takeaways from the 2008 Media Summit which just wrapped up in NYC. The event just keeps getting better - great keynotes, terrific informal hallway chit-chats/networking and tons of well-directed energy. Though the event's agenda is broad, I was focused on the video-related elements. Here are 3 takeaways:

1. Iger and Moonves Get Tech; Lots of Innovation/Growth Ahead

A clear highlight for all attendees was the 2 morning keynote interviews, day 1 with Disney CEO Bob Iger and day 2 with CBS CEO Leslie Moonves. Both were ably conducted by senior Businessweek editors. Until a couple years ago, big media was in a defensive crouch regarding technology's uninvited incursion into their businesses. No more. Iger and Moonves are obviously convinced that technology, the Internet and broadband video delivery are now their companies' friends. Iger in particular really pounded this theme home.

An example of how technology helps which Iger repeatedly touched on was how Disney will leverage the platform of Club Penguin, its recent acquisition, to build communities for other properties (e.g. "Cars", "Pirates," etc.). These moves are intended to engender ever-greater levels of engagement. By the way, if you're a parent of youngsters and you've ever bemoaned how Disney's gotten its hooks deeply into your kids, you ain't seen nothing yet!

Moonves was emphatic that the Internet extends the value of CBS properties. March Madness was an example he offered. Three years ago it generated $250K of broadband subscription revenue. Two years ago CBS converted to ad-support and generated $4M. Then last year it generated $10M and this year is projected for $23M. And as Moonves pointed out, other than bandwidth, it's all incremental profit for the company. Echoing another conference theme, he further added that "the Internet should not be used to just regurgitate TV," but rather for the medium's unique capabilities.

Iger's and Moonves's mantras are no doubt being sent down to the troops from the executive suite. That suggests we can all expect a whole lot of tech-based innovation springing from these media giants.

2. Engagement and Originality: Buzzwords or More?

Two touchstones in many sessions were "engagement" and "originality." Both reflect the evolving viewpoint that broadband video has its own unique capabilities and that breaking through requires going far beyond traditional, passive programming approaches. With respect to engagement, the concept of introducing "social media" opportunities was often cited as the key tactic. An amorphous term, social media refers to all manner of user participation: content sharing, interactivity, personalization, mashups, uploading, commenting, rating and so on. Basically it's anything that gets viewers to do more than just sit back and enjoy the show. (For those looking to learn more, note next week's webinar on social media, presented by VideoNuze sponsors KickApps and Akamai)

Regarding originality, this relates back to Moonves's comment about not using the medium for regurgitation of TV shows (though to be sure there's value to that). Many people echoed that theme, emphasizing broadband must be used for original programming. The proliferation of independent "broadband studios" is encouraging early evidence that the originality bar will keep rising, prompting established and startup players to harness broadband's limitless possibilities.

3. Missing in Action: Paid business models

It wasn't that long ago that discussions about broadband video business models focused evenly on paid and ad-supported. No more. The paid model was completely missing in action at the event. I think I can count on one hand the number of times the concept was raised in sessions. Also MIA was DRM, the paid model's enabler (or torturer, depending on your perspective).

I detect a broad consensus that the broadband video industry has hitched its wagon to free ad-supported video for the foreseeable future. Many of you know I've been a long-time and enthusiastic proponent of this approach and I'm extremely happy to see things unfold this way. Though the broadband video ad model is still immature, all macro trends point to a bright future. One in particular is video syndication, which I wrote about 2 days ago. Syndication was a dominant theme, as panel representatives from both large and small content providers enthusiastically embraced it. See my post earlier this week, "Welcome to the Syndicated Video Economy" for more on this.

Ok, there you have it. There's plenty more tidbits I took away from the summit, so feel free to ping me if you'd like. And if you attended, post a comment and share your takeaways as well!

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.

Happy New Year and welcome to 2008!

With many of you taking last week off, a quick review of what you might have missed is in order:

1. iTunes-Fox download-to-rent movie deal rumors

The FT (reg. required) reported that Apple and Fox are close to announcing a deal under which Fox movies would be available for download-to-rent on iTunes. This would be a deviation from Apple's policy of download-to-own only. Call me a skeptic, but while some analysts think this deal is a big breakthrough, for me it's more of a ho-hum, for at least the following reasons.

Download-to-rent offerings have been around for a while (e.g. Movielink, CinemaNow, Amazon Unbox, etc.) and none have been grand slams. Admittedly none have enabled playback on an iPod. Yet, while many think iPod ubiquity is a killer advantage for iTunes rentals I disagree. It's one thing to watch a 30 or maybe a 60 minute TV show, but watching a 2 hour movie on an iPod? That's only appealing for a tiny minority of iPod owners. Further, while the rumored $2.99 or so price point is attractive, download-to-rent movies will come with the same cumbersome business rules (e.g. 24 hour viewing, window limitations, finite device sharing, etc.) that cause significant customer inconvenience. And DVDs, available for rental or purchase still offer superior portability and flexibility to any download model. Movie downloads' time will come, just not yet.

2. Wal-Mart Folds its Video Download Store

And speaking of download challenges, Wal-Mart decided to unceremoniously close its video download store less than a year since its launch. While it pointed its finger at its vendor HP, which decided to discontinue support for the technology underlying the Wal-Mart store, there are certainly other white label platform alternatives available if Wal-Mart had conviction about the download store's potential. It clearly didn't and so it folded its tent. More evidence of the challenges facing paid downloads.

3. YouTube's Top 2007 Videos Announced

Meanwhile over in YouTube land, the hits keep coming. YouTube released its top 10 list and the year's most popular video, with almost 23 million views, was "Battle at Kruger", which shows the fight to save a baby water buffalo from a group of lions and a crocodile. It's fascinating if you haven't seen it. Other top videos on the list were "Chocolate Rain", "Obama Girl" and "Leave Britney Alone", among others. If nothing else, this diverse group of videos shows that UGC is alive and well.

4. Queen Elizabeth and Roger Clemens Seek Out YouTube

And UGC wasn't for pure amateurs either. YouTube's reach was once again recognized as 2 celebrities, Queen Elizabeth and Roger Clemens posted videos serving their individual purposes. In a first for the 81 year-old queen, she posted her popular Christmas message on YouTube, augmenting its traditional broadcast. The Royal Channel - "The Official Channel of the British Monarchy" - also launched on YouTube.

Clemens, who's been fingered in baseball's steroid controversy, saw fit to post his proclamation of innocence on YouTube. Clemens is adamant in his own defense, and clearly believes that reaching out to fans with video instead of the usual press release is more compelling.

Trivia question: whose video do you think drew more views?

Answer: It's not even close: 741,000 for the queen vs. 274,000 for Clemens.

5. MTV Delivers 1.2 Billion Streams in '07

MTV self-reported that MTV.com, VH1.com and CMT.com delivered more than 1.2 billion video streams in '07, an increase of 30% vs. '06. It also reported the top 30 music videos it streamed, and number 1 was Gimme More by Britney Spears. Broadband is offering MTV an opportunity to return to its brand roots as the go-to destination for music videos even as more and more of the on-air experience is dominated by non-music video fare. As I wrote a couple months ago, music videos are becoming a sought-after new revenue stream for labels and aggregators. We'll see more emphasis on music videos in '08.

This morning Zipidee, a company formed earlier this year, is announcing its acquisition of TotalVid from Landmark Communications. With the deal Zipidee is gunning to become the king of the long tail, enthusiast video, using a strictly paid model. Yesterday I spoke with Zipidee CEO Henry Wong, and TotalVid President Karl Quist about the deal and the opportunity going forward.

Zipidee's strategy is to create a digital marketplace for video, audio and ebooks. As Henry puts it, we're "eBay meets iTunes", enabling content providers to set the business rules around how their content can be accessed. Like TotalVid, Zipidee's intent is to open up the broadband distribution market to the many smaller, independent producers who have traditionally relied on inefficient and hard-to-access DVD distribution channels.

I am very familiar with TotalVid, having worked as a part-time biz dev consultant for them for a while, helping pull together a number of distribution deals. TotalVid started up in the relatively early days of broadband video, almost 4 years ago. Karl and his team did a fabulous job gaining access to specialty video in tons of categories such as action sports, martial arts, instruction, etc, eventually aggregating over 500 different content providers providing over 5,500 different titles. This library is very complimentary to Zipidee, which itself has done hundreds of content deals aggregating a library of over 5,000 titles. As Henry explained it, there is virtually zero duplication.

Henry resolutely believes that the paid approach for accessing this type of longer-form, specialty content is preferable to ad-supported. In general I agree with him - this kind of stuff isn't just random low-quality clips and consumers should expect that it won't come free.

However, as many VideoNuze readers know, I believe there are real challenges succeeding with the paid model right now. Chief among them is that the Internet is awash with free video, continuously raising the bar for how to get users to crack open their wallets and pay for anything, no matter how useful or sought after it might be. So this leads to a real marketing and customer acquisition challenge. Meanwhile DVD is a robust format and few people are yet familiar or comfortable with how a paid download works (e.g. is it portable? how does it get moved to other machines, can it be watched on TV?) So there's a big customer education challenge.

Nonetheless, I'm rooting for Zipidee. If they can surmount these and other challenges, they'll have created a hugely valuable digital distribution franchise.

Yesterday I received the below email from Movielink promoting a "Steal of a Deal" offer with Target. Here's how it works: I purchase an Ocean's Thirteen DVD at a Target store and I receive a code that then entitles me to download Ocean's Thirteen from Movielink.

Maybe I'm missing something (and please let me know if I am), but this promotion makes no sense to me and instead seems to possibly undermine the value of the Movielink service.

As with all marketing and promotional efforts, the starting point must always be "What's our objective?" So what is Movielink's objective here?

To expose people to the Movielink brand and service? That wouldn't make sense since I only received the email because I was on their email list in the first place.

To demonstrate there's consumer appetite for downloading the same that was just bought on DVD? That seems like a silly and sort of pointless thing to prove in the first place if you believe the ultimate opportunity for digital downloads is to be a DVD substitute, not a compliment.

To expose people to the breadth of Movielink's service? That's worthy, but the offer is limited to downloading the same title that was purchased, so the user isn't incented to browse and see the full breadth of the Movielink catalog.

Maybe there's another objective, but if so I don't see it. Instead I think the campaign ends up detracting from Movielink by confusing the user and not creating any really new distinctive value. Think about it - if you're a consumer that just bought the Ocean's Thirteen DVD, what new value is the download providing you? (Let me know if you can think of anything, I can't)

Movielink could have enhanced this campaign to greater effect in lots of different ways. Ideas: Open the download choice to anything in the catalog. Or make the download easily giftable to a friend to virally increase Movielink's awareness. Or create a rewards-style program that gives DVD purchasers credits toward subsequent downloads. And so on.