Posts for 'Comcast'

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!

Though TV Everywhere ("TVE") is still in a nascent stage, with trials either underway or not even yet started, there has been no shortage of hype around it. I've been among those who have argued that if these trials work as intended and the rollouts ensue, TVE would be a big win for video service providers (cable, satellite, telco), content providers and consumers. But recently I've started to think there's another TVE angle that has not really been explored - the possibility that "TVE 2.0" could enable certain cable operators and telcos themselves to become the biggest players in "over-the-top" (OTT) video.

(For those not familiar with the term OTT, it refers to the idea of video being delivered to homes over a broadband network that isn't owned by the video provider itself. So for example, when you watch Hulu in your home over a Comcast broadband connection, Hulu is going "over-the-top" of Comcast. Hulu doesn't own the underlying network, it just rides on top of the one that's there, in effect competing with Comcast's own video service.)

To date TVE has been positioned by incumbent video service providers as an online adjunct solely available to their traditional, paying multichannel subscribers. While Comcast has been most emphatic on this point, no other operator that has announced TVE trials has deviated from this approach either.

But what if, at some point down the road, TVE was "unbundled," meaning that you could subscribe just to TVE, and not the traditional video service? Cable operators and telcos have little incentive to do this within their current service or "franchise" areas, but the lure to offer TVE 2.0 to households outside their franchises could prove irresistible. If pursued, this could actually turn cable and telcos into the biggest over-the-top players themselves, potentially dwarfing those typically thought of as key OTT competitors (e.g. CE companies like Sony or computing companies like Apple, or aggregators like Netflix or Hulu). In a TVE 2.0 world, the hunted could become the hunters.

The franchise concept is key to understanding how the cable and telco video distribution business work. In short, a cable or telco needs to win an agreement with the "franchising authority" - typically a municipal government - to offer video service in the municipality. Agreements are required because the video distributor needs legal access to rights-of-way to operate (to hang its wires on poles, dig up streets when necessary, etc.). Franchising may seem anachronistic in the digital age, but it remains the essential determinant of where cable companies or telcos operate (note that because satellite companies don't require rights-of-way, they operate nationally, outside the franchising domain).

Now put yourselves in the shoes of Comcast, for example. You've worked hard to wring every possible dollar out of subscribers who live in your franchise areas, by successfully introducing triple-play video/voice/Internet bundles, digital tiers, sports tiers, movie channels, HD, additional outlets, DVRs, etc. With all of these services, the average revenue per home serviced today is a multiple of what it was just 15 or 20 years ago.

But growth is slowing, and new competition from OTT providers looms. So where does the biggest new growth opportunity exist? Answer: outside traditional franchise areas. To get a sense of how big this opportunity is, even Comcast, the largest U.S. cable operator, serves only about 25% of the country, meaning almost three-quarters of American homes are currently out of its reach. To grow their addressable universes, Comcast and others traditionally bought other cable operators. In fact, fearful of the power any one cable company could gain, the FCC imposed a 30% ownership cap. Coincidentally that cap was just overturned by a U.S. Court of Appeals a few weeks ago.

In the traditional video distribution business, buying other operators was the only way to build an operator's footprint. But with TVE 2.0, a company like Comcast could use broadband so that, for the first time, it could operate everywhere. They key is being willing to unbundle TVE from core cable service so that a consumer can subscribe solely to TVE service.

Doing so would in effect pit Comcast, for example, against other cable operators, a major breach of cultural etiquette in the clubby cable industry. But faced with the choice of acquiring other operators for around $5,000 per sub, or just introducing a capital-efficient and high-quality linear/on-demand OTT service over broadband, powered by Move Networks (as one option) it wouldn't even be a close call. In fact, Comcast could cherry pick the incumbent's video customers, in turn driving that company's valuation down and thus opening up the option for it to eventually swoop in and acquire the incumbent operator for far less. Or it could decide not acquire, and instead just focus on rolling up OTT subs.

Will cable and telco go over the top? Who knows. They will surely have what it takes - TVE expertise, requisite technology, content relationships, private video delivery networks, customer care facilities and deep pockets. All that's really needed is the motivation to proceed. For now, operators are rightfully focused on getting TVE working right for their own subs. But I suspect the business cases for TVE 2.0 are already being run.

(Note - we'll explore this subject and others at both VideoSchmooze in NYC on Oct. 13th and at VideoNuze's CTAM Summit breakfast on Oct. 26th.)

What do you think? Post a comment now.

Following are 4 news items worth noting from the week of August 24th:

1. Time Warner Cable, Verizon launch TV Everywhere trials - Little surprise that Time Warner Cable announced its own TV Everywhere trial yesterday, given that former sister company Time Warner has been one of its biggest proponents. More interesting was Verizon launching a TV Everywhere initiative, which I regard as a pretty strong indicator that most or all service providers will eventually get on board. (The Hollywood Reporter has a story that DirecTV is in talks too for online distribution of TBS and TNT to start).

I have to give credit to Time Warner CEO Jeff Bewkes, TV Everwhere's key champion, who's clearly generated a groundswell of support. While some critics see TV Everywhere as being at odds with the "open Internet" ethos, I continue to think of it as a big win for consumers eager to get online access to their favorite cable programs. Assuming authentication is proven in during the trials I expect a speedy rollout.

2. Conde Nast distributes through boxee - I was intrigued by news that Conde Nast Digital will begin distributing video from its Wired.com and Style.com sites through boxee. boxee and others who connect broadband to TVs are valuable for magazines and other content providers who have long been shut out of the cable/satellite/telco distribution ecosystem, thereby unable to reach viewers' TVs. Years ago special interest magazines missed big opportunities to get into cable programming, allowing upstart cable networks to grow into far larger businesses (consider ESPN vs. Sports Illustrated, Food Network vs. Gourmet or CNBC vs. Forbes). Broadband gives magazines, belatedly, an opportunity to get back into the game.

3. Amazon announces 5 finalists in UGC ad contest - Have you seen the 5 finalists' ads in Amazon's "Your Amazon Ad" contest, announced this week? They're quite clever, with some amazing special effects. The contest is another great example of how brands are tapping users' talents, posing new competition to ad agencies. I haven't written about this in a while, but I continue to be impressed with how different brands are pursuing this path. Doritos has been the most visible and successful with its user-generated Super Bowl ads.

4. Microprojectors open up mobile video sharing opportunities - Maybe I've been living under a rock because I just read about "microprojectors" for the first time this week (I have a decent excuse since as I non-iPhone owner I wouldn't have a use for one, yet). As the name suggests, these are pocket-size projectors that allow you to output the video from your iPhone to project onto a large surface like a wall or ceiling. According to this NY Times review the quality is quite respectable, and is no doubt only going to improve. The mind boggles at what this could imply for sharing mobile video. Imagine bringing a kit - consisting of an iPhone, portable speakers and microprojector - to your friend's house, then plugging in and projecting either a live stream or an on-demand program for all to see.

Enjoy your weekend!

Following are 4 news items worth noting from the week of August 17th:

CBS's Smith says authentication is a 5 year rollout - I had a number of people forward me the link to PaidContent's in-depth coverage of CBS Interactive CEO Quincy Smith's comments at the B&C/Multichannel News panel in which he asserted that TV Everywhere/authentication won't gain critical mass until 2014.

I was asked what I thought of that timeline, and my response is that I think Smith is probably in the right ballpark. However, these rollouts will happen on a company by company basis so timing will vary widely. Assuming Comcast's authentication trial works as planned, I think it's likely to expect that Comcast will have its "On Demand Online" version of TV Everywhere rolled out to its full sub base within 12 months or so. Time Warner Cable is likely to be the 2nd most aggressive in pursuing TV Everywhere. For other cable operators, telcos and satellite operators, it will almost certainly be a multi-year exercise.

NFL makes its own broadband moves - While MLB has been getting a lot of press for its recent broadband and mobile initiatives, I was intrigued by 2 NFL-related announcements this week that show the league deepening its interest in broadband distribution. First, as USA Today reported, DirecTV will offer broadband users standalone access to its popular "Sunday Ticket" NFL package. The caveat is that you have to live in an area where satellite coverage is unattainable. The offer, which is being positioned as a trial, runs $349 for the season. With convergence devices like Roku hooking up with MLB.TV, it has to be just a matter of time before the a la carte version of Sunday Ticket comes to TVs via broadband as well.

Following that, yesterday the NFL and NBC announced that for the 2nd season in a row, the full 17 game Sunday night schedule will be streamed live on NBCSports.com and NFL.com. Both will use an HD-quality video player and Microsoft's Silverlight. They will also use Microsoft's Smooth Streaming adaptive bit rate (ABR) technology. All of this should combine to deliver a very high-quality streaming experience. But with all these games available for free online, I have to wonder, are NBC and the NFL leaving money on the table here? It sure seems like there must have been some kind of premium they could have charged, but maybe I'm missing something.

Metacafe grows to 12 million unique viewers in July - More evidence that independent video aggregators are hanging in there, as Metacafe announced uniques were up 67% year-over-year and 10% over June (according to comScore). I've been a Metacafe fan for a while, and their recent redesign around premium "entertainment hubs" has made the site cleaner and far easier to use. Metacafe's news follows last week's announcement by Babelgum that it grew to almost 1.7 million uniques in July since its April launch. Combined, these results show that while the big whales like YouTube and Hulu continue to capture a lot of the headlines, the minnows are still making swimming ahead.

Kodak introduces contest to (re)name its new Zi8 video camera - It's not every day (or any day for that matter) that I get to write how a story in a struggling metro newspaper had the mojo to influence a sexy new consumer electronic product being brought to market by an industrial-era goliath, so I couldn't resist seizing this opportunity.

It turns out that a review Boston Globe columnist Hiawatha Bray wrote, praising Kodak's new Zi8 pocket video camera, but panning its dreadful name, prompted Kodak Chief Marketing Officer Jeffrey Hayzlett to launch an online contest for consumers to submit ideas for a new name for the device, which it intends to be a Flip killer. Good for Hayzlett for his willingness to change course at the last minute, and also try to build some grass roots pre-launch enthusiasm for the product. And good for the Globe for showing it's still relevant. Of course, a new name will not guarantee Kodak success, but it's certainly a good start.

Enjoy your weekend!

Following are 4 news items worth noting from the week of August 10th:

Discovery Channel signs onto Comcast On Demand Online trial - Comcast added yet another cable programmer this week to the roster of those participating in its TV Everywhere trial. Discovery will make available episodes of "Man vs. Wild," "Swords," "Stormchasers" and "Verminators" though with some delayed windows that take a little edge off their appeal. Comcast has made a ton of progress corralling networks for its trial, but 4 of the big 5 cable network owners - Disney, Fox, NBCU and Viacom - remain holdouts. No coincidence that the first 3 are Hulu's owners.

Swarmcast powers MLB.TV on Roku, introduces "Autobahn Live for CE" - Following on Roku's announcement this week that it is offering MLB.TV, Swarmcast announced it was powering the service through a new offering called "Autobahn Live for CE." Swarmcast's COO Chad Tippin explained to me that integrating with CE devices that drive broadband/TV convergence is a key company goal. Chad is confident that Swarmcast's high-quality, scalable HTTP streaming service will work on these various CE devices, and that as the number of them deployed swells, a new "long tail of live sports" will flourish. Live sports and events (e.g. concerts) could be a significant contributor to device adoption. For example, picture getting a coupon for $50 off the purchase of a Roku when you buy a pay-per-view of a streaming blockbuster concert.

Babelgum grows to nearly 1.7 million unique visitors in July, 2009 - I heard from Michael Rosen, EVP and Chief Revenue Officer at Babelgum this week, with news that the site has grown to nearly 1.7 million unique visitors in July (comScore), following its U.S. launch in April. I profiled Babelgum back in April and was cautiously optimistic about its approach to curate high-quality, independently-produced video into 5 channels (music, film, comedy, Our Earth and Metropolis). The site is fully ad-supported. Babelgum's growth comes on top of a slew of made-for-broadband video initiatives I detailed recently. The NY Times also had a great story this week on how independent filmmakers are taking distribution into their own hands. Despite the recession, this corner of the broadband market seems to be hanging in there.

Zune HD coming Sept 15th - Microsoft at last announced this week that the Zune HD digital media player will be in retail on Sept 15th, with pre-orders now being accepted. Zune HD introduces a touch-screen interface, 720p video playback, HD radio and other goodies. It is sure to raise the visibility of high-quality portable video another notch. But I find myself wondering: as the iPhone and other smartphones incorporate video playback (and recording) into one device, how large is the market for standalone high-end media players like Zune? Related, the iPhone's risk of cannibalizing the iPod has become a hot topic recently. Things to ponder: will users want to carry 2 devices? Or might they appreciate the ability to drain their battery watching video without risking the loss of their cell phone? Lots of different things in play.

Yesterday's announcement by Netflix that it will be adding to its Watch Instantly library past seasons ABC's "Lost," "Desperate Housewives," "Grey's Anatomy" and "Legend of the Seeker" is another step forward for Netflix in strengthening its online competitiveness.

At a broader level though, I think it's also further evidence that the near-term success of Watch Instantly and other "over-the-top" broadband video services is going to be tied largely to deals with broadcast TV networks, rather than film studios, cable TV networks or independently-produced video sources.

Key fault lines are beginning to develop in how premium programming will be distributed in the broadband era. Content providers who have traditionally been paid by consumers or distributors in one way or another are redoubling their determination to preserve these models. Examples abound: the TV Everywhere initiative Comcast/Time Warner are espousing that now has 20+ other networks involved; Epix, the new premium movie service backed by Viacom, Lionsgate and MGM; new distribution deals by the premium online service ESPN360.com, bringing its reach to 41 million homes; MLB's MLB.TV and At Bat subscription offerings; and Disney's planned subscription services. As I wrote last week in "Subscription Overload is On the Horizon," I expect these trends will only accelerate (though whether they'll succeed is another question).

On the other hand, broadcast TV networks, who have traditionally relied on advertising, continue mainly to do so in the broadband world, whether through aggregators like Hulu, or through their own web sites. However, ABC's deal with Netflix, coming on top of its prior deals with CBS and NBC, shows that broadcast networks are both motivated and flexible to mine new opportunites with those willing to pay.

That's a good thing, because as Netflix tries to build out its Watch Instantly library beyond the current 12,000 titles, it is bumping up against two powerful forces. First, in the film business, well-defined "windows" significantly curtail distribution of new films to outlets trying to elbow their way in. And second, in the cable business, well-entrenched business relationships exist that disincent cable networks from offering programs outside the traditional linear channel affiliate model to new players like Netflix. These disincentives are poised to strengthen with the advent of TV Everywhere.

In this context, broadcast networks represent Netflix's best opportunity to grow and differentiate Watch Instantly. Last November in "Netflix Should be Aggressively Pursuing Broadcast Networks for Watch Instantly Service," I outlined all the reasons why. The ABC deal announced yesterday gives Netflix a library of past seasons' episodes, which is great. But it doesn't address where Netflix could create the most value for itself: as commercial-free subscription option for next-day (or even "next-hour") viewing of all prime-time broadcast programs. That is the end-state Netflix should be striving for.

I'm not suggesting for a moment that this will be easy to accomplish. But if it could, Netflix would really enhance the competitiveness of Watch Instantly and its underlying subscription services. It would obviate the need for Netflix subscribers to record broadcast programs, making their lives simpler and freeing up room on their DVRs. It would be jab at both traditional VOD services and new "network DVR" service from Cablevision. It would also be a strong competitor to sites like Hulu, where comparable broadcast programs are available, but only with commercial interruptions. And Hulu still has limited options for viewing on TVs, whereas Netflix's Watch Instantly options for viewing on TVs includes Roku, Xbox, Blu-ray players, etc. Last but not least, it would also be a powerful marketing hook for Netflix to use to bulk up its underlying subscription base that it intends to transition to online-only in the future.

Beyond next-day or next-hour availability, Netflix could also offer things like higher-quality full HD delivery or download options for offline consumption. Broadcasters, who continue to be pinched on the ad side, should be plenty open to all of the above, assuming Netflix is willing to pay.

I continue to believe Netflix is one of the strongest positions to create a compelling over-the-top service offering. But with numerous barriers in its way to gain online distribution rights to films and cable programs, broadcast networks remain its key source of premium content. So keep an eye for more deals like the one announced with ABC yesterday, hopefully including fast availability of current, in-season episodes.

What do you think? Post a comment now.

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

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

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

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

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

Last week when the primetime Emmy award nominees were announced, cable programs turned in another strong performance, garnering 272 of the 487 nominations. The Emmys and other awards illustrate one of the key challenges for would-be cord-cutters: outside of per-program download options (e.g. iTunes) that will persist, in the coming TV Everywhere world, virtually none of cable's award-winning programming will be accessible online unless you subscribe to a cable/satellite/telco service provider. This is a critical fact in understanding how the broadband video world is going to unfold.

One of the reasons TV Everywhere is so compelling is that it offers cable networks an on-ramp to online distribution while preserving their existing - and increasingly valuable - dual revenue (monthly affiliate fees and advertising) business model. As more content executives are concluding that advertising alone will not be sufficient for profitable long-form program distribution online, the payments cable networks receive from cable/satellite/telco providers is more valuable than ever. TV Everywhere's online access will inevitably lead to heavier viewership and enhanced loyalty.

The Emmy nominations show the expanding breadth of cable's quality. As the below chart depicts, this year 26 different cable networks' programs were nominated, with HBO, the perennial leader picking up 99 nominations (it should be noted that last week HBO signed on to Comcast's On Demand Online technical trial, further entrenching HBO in the cable world, therefore dimming the notion that HBO will ever be available outside the traditional premium subscription model).

Cable's strength is even better understood by looking at the major Emmy award categories. For example, in the outstanding drama series category, cable got 5 of 7 nominations (AMC-2, FX, HBO, Showtime). In the outstanding children's program category, cable got all 3 nominations (Disney Channel-2 and Nickelodeon). In the outstanding reality program series category, cable got 5 of 6 nominations (A&E, Bravo, Discovery-2, NGC). Even in outstanding comedy series, cable got 3 of 7 nominations (HBO-2, Showtime).

When TV Everywhere gets fully rolled out, cable networks will have little-to-no incentive to make much of their programming available to non-paying video subscribers. That means that the Hulus of the world will have to content themselves with a catalog of broadcast programs, older movies and made-for-broadband series. As broadcast's Emmy nominations show, that still means there's plenty of popular content to drive online audience. But until Hulu figures out a subscription model, it (and its content suppliers) will be economically disadvantaged to cable both on-air and online. This is no small issue given each TV program episode now costs $2-3 million to produce.

Meanwhile, consumers will make their own video choices. If they choose to cut the cord they won't have subscription-based online access to programs like Entourage, Weeds, MythBusters, Hannah Montana, Mad Men or Dexter, not to mention top-shelf sports from ESPN, TNT and others. For some people eager to cut the cord, that will be just fine. But I'm betting that for the majority of viewers that would be unacceptable and they'll continue to choose to subscribe. TV Everywhere can use cable programs' popularity to blunt cord-cutting before it ever takes off and cement cable's appeal in the broadband era.

What do you think? Post a comment now.

Paid video forecast to surpass free - A Strategy Analytics forecast that got attention this week says that the global paid online video market will be worth $3.8B in 2009, exceeding the global free online video segment which will total $3.5B. I haven't seen the details of the forecast, but I'm very curious what's being included in each of these numbers as both seem way too high to me. The firm forecasts the two segments to grow at comparable rates (37% and 39%), suggesting that their size will remain relatively even. I suspect we're going to be seeing a lot of other research suggesting the paid market is going to be far larger than the ad-supported market as sentiment seems to be shifting toward subscriptions and paid downloads.

Consumer generated video contests remain popular - VideoNuze readers know I've been intrigued for a while now about contests that brands are regularly running which incent consumers to create and submit their own videos. Just this week I read about two more brands jumping on the bandwagon: Levi's and Daffy's retail stores. NewTeeVee had a good write-up on the subject, citing new research from Forrester which reviewed 102 different contests and found the average prize valued at $4,505. I see no end in sight for these campaigns as the YouTube generation realizes it's more lucrative to pour their time into these contests than training their cats to skateboard. Brands too are recognizing the wealth of amateur (read cheap!) talent out there and are moving to harness it.

MySpace has lots of work ahead to become a meaningful entertainment portal - The WSJ ran a piece on Monday based on an interview with Rupert Murdoch in which he was quoted as saying MySpace will be refocused "as an entertainment portal." That may be the winning ticket for MySpace, but I'm not totally convinced. MySpace has been in a downward spiral lately, with a 5% decline in audience over the past year, a 30% headcount reduction and an executive suite housecleaning. While always strong in music, according to comScore, its 48 million video viewers in April '09 were less than half YouTube's 108 million, while its 387 million video views were about 5% of YouTube's 6.8 billion. Clearly MySpace has a very long way to go to give YouTube serious competition. It will be interesting to see if the new management team Murdoch has installed at MySpace can pull off this transition.

Amid the chatter over the past few days about Amazon possibly buying Netflix, Kara Swisher at All Things Digital today instead suggested that Microsoft would make a better Netflix acquirer. Her sentiments echoed my Dec '08 prediction that Microsoft would acquire Netflix at some point in '09. It was admittedly a "long ball" call on my part (especially since I had zero inside dope), but one which actually makes even more sense 7 months later.

Why? Because Comcast and the cable industry's aggressive new TV Everywhere/On Demand Online initiatives make Netflix more valuable than ever for any company looking to offer a subscription-based, broadband-delivered video service. Outside the cable/satellite/telco industries themselves, Netflix - with its 10 million+ current DVD-by-mail subscribers - is the only serious subscription video provider. Its recent stellar performance shows the durability of its model even in the face of the ongoing recession. And it continues to build out its streaming service with various device partners (including notably Xbox 360).

If Comcast succeeds with On Demand Online (and since the technical trial hasn't even begun yet, that's still a big "if"), and other cable operators quickly follow suit, the broadband video industry is poised for a fundamental shift away from ad-only business models to hybrid models where subscriptions are key. Any current or aspiring premium video provider that does not have an established subscription approach is going to be disadvantaged in its access to high-quality programming and ongoing product development resources. CBS's addition to Comcast's trial shows that even broadcasters are beginning to position themselves in the subscription mix.

My full rationale for why Netflix is so appealing for Microsoft is laid out in the Dec post, so I won't restate it here. Of course nobody outside the companies involved knows if any of the M&A chatter is for real. But if it is, my bet is still that Microsoft is the acquirer to watch, not Amazon. I suspect we'll see other analysts making a similar case if things heat up.

What do you think? Post a comment now.

Another day, another flurry of announcements from Comcast with news of more networks participating in its On Demand Online technical trial. Newly on board are CBS (also the first broadcast network to participate) and 17 more cable networks such as A&E, AMC, BBC America, Food Network, History Channel, Sundance and others. Together with those already announced, there are now over 20 networks in the trial.

The cable networks' interest isn't surprising. I've been saying for a while that On Demand Online will be a real boon to them, providing a secure, scalable on-ramp to online distribution, new ad impressions and most important, significant enhanced value to their viewers. Still, despite all of Comcast's progress, most of the big cable network groups (e.g. NBCU, Fox, Disney, Viacom, Discovery) have not yet publicly signed on. I think that's just a matter of time.

There's no question Comcast is building real industry momentum for On Demand Online. But given the trial hasn't even begun yet, all of these announcements are really raising the visibility of the trial - and of course the pressure to make sure its "authentication" processes work as intended. No doubt each of these announcements is creating a lot of sweaty palms among Comcast's technical staff - the people who are responsible for proving authentication works. With all the PR buildup, if for some reason all does not go according to plan, Comcast will have lots of people looking for answers.

What do you think? Post a comment now.

The list of cable networks participating in Comcast's upcoming technical trial of On Demand Online continues to grow. This afternoon HBO and Cinemax announced that initially they will provide 750 hours a month of programming, which will expand over time.

Full length episodes of True Blood, Hung, Entourage, etc, along with recent movies such as Transformers, The Dark Knight, Atonement and classics like Jurassic Park, Speed and Rosemary's Baby will all be available. Some programs will be available in HD and immediately after they're shown on the linear networks.

HBO/Cinemax follows last week's announcement that Starz is on board with the trial, which itself followed the launch announcement that Time Warner networks TNT and TBS were participating. The list will no doubt grow further in the coming weeks.

I've been bullish on Comcast's On Demand Online initiative from the outset, and HBO/Cinemax's perfectly illustrates the power of the model. As the most popular premium TV network, HBO would confer a lot of additional value to its subscribers by making its programs conveniently available online. But to date the only real option for doing so has been to sell them on a per program download basis through outlets like iTunes. The problem is that HBO subscribers end up paying twice for the same content.

On Demand Online gives HBO a mechanism, finally, to give its subscribers online access without additional fees. This is accomplished through Comcast's "authentication," which queries its database to enable online viewing privileges. The upcoming technical trial is intended to prove that the authentication process actually works. It must, as the stakes are quite high when premium networks like HBO are in the mix. The last thing they want is to have unauthorized broadband users watching their coveted shows instead of subscribing to the monthly service.

All of the details of On Demand Online are not yet understood, but I continue to believe that if it's executed properly, it will be a game-changer for the cable and broadband industries.

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.

Hulu plans September bow in U.K.

Rise of Web Video, Beyond 2-Minute Clips

Update on New Channels

ABC Content Now on Hulu

Nielsen Online: Kids Flocking to the Web

Amid Upfronts, Brands Experiment Online

Clippz Launches Mobile Channel for White House Videos

Prepare Yourself for iPod Video

Study: Web Video "Protail" As Entertaining As TV

In-Stat: 15% of Video Downloads are Legal

Kazaa still kicking, bringing HD video to the Pre?

Office Depot's Circuitous Route: Takes "Circular" Online, Launches "Specials" on Hulu

Upload Videos From Your iPhone to Facebook Right Now with VideoUp

Some Claims in YouTube lawsuit dismissed

Concurrent, Clearleap Team on VOD, Advanced Ads

Generating CG Video Submissions

MJ Funeral Drives Live Video Views Online

Qik Raises $5.5 Million

Why Hulu Succeeded as Other Video Sites Failed

YouTube's Pitch to Hollywood

Invodo Secures Series B Funding

Comcast, USOC Eye Dedicated Olympic Service in 2010

Consumer Groups Push FTC For Broader Broadband Oversight

Crackle to Roll Out "Peacock" Promotion

Earlier Tests Hot Trend with "Kideos" Launch

Mobile entertainment seeking players, payment

Netflix Streams Into Sony Bravia HDTVs

Akamai Announces First Quarter 2009 State of the Internet Report

Starz to Join Comcast's On-Demand Online Test

For ManiaTV, a Second Attempt to be the Next Viacom

Feeling Tweety in "Web Side Story"

Most Online Videos Found Via Blogs, Industry Report

Cox to Turn "MyPrimeTime" Dial to 100

How to Start a Company (and Kiss Like Angelina)

Below is the 22nd edition of the VideoNuze Report podcast, for June 26, 2009.

This week Daisy and I discuss the TV Everywhere and OnDemand Online initiative that Comcast and Time Warner unveiled this week. As I wrote in this post on Wednesday, the companies are beginning a trial in July for 5,000 Comcast subscribers, who will gain online access to a selection of TNT and TBS programs. The primary purpose of the trial is to test security of the content. The companies anticipate that other cable networks will join the trial too, and that other video service providers will begin their own trials in the near future.

In the podcast we explore further why granting cable subscribers online access is an important step forward in the evolution of the broadband video medium, and what it means to the overall ecosystem. There are a lot of unknowns about how TV Everywhere/OnDemand Online will work; Time Warner's and Comcast's CEO were candid about that. For now they released a set of "principles" to guide their pursuits. There will be much more to come on this story.

Click here to listen to the podcast (15 minutes, 27 seconds)

Click here for previous podcasts

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

This morning I listened in on the press conference with Comcast CEO Brian Roberts and Time Warner Inc. CEO Jeff Bewkes where they announced a 5,000 subscriber technical trial of TV Everywhere/OnDemand Online starting in July along with a set of "principles" guiding their efforts. Primarily the trial will test the security of the authentication technology.

TW will make available TNT and TBS programs in the trial, and will offer additional programs over time. Comcast plans to bring in other networks too. Both executives emphatically stated that for cable subscribers there will be no additional charge for online access. The companies clearly hope to use the trial and the publicity that will surround it to galvanize interest from other cable operators and programmers.

The partnership effectively unifies the companies' disparate initiatives so that paying video subscribers will be "authenticated" to receive certain cable network programming online. Up until now Comcast has been pursuing its own vision of online access under a plan it dubbed "OnDemand Online," while TW has been pursuing a plan it called "TV Everywhere." The essential difference between the two, as I wrote about here, was that Comcast planned to only make programs available on its owned sites (at least initially), which TW talked of multiple third parties gaining access as well, right off the bat.

I've been critical of TW's approach to date as I thought it was wildly ambitious and under-estimated the technical challenges involved in pulling off third party integration. On the other hand, Comcast's walk-before-you-run attitude seemed far more practical. On the call, Mr. Bewkes in particular continued to downplay the difficulty of authenticating third parties, a position I think is unrealistic.

Regardless, I've been supportive of the general idea that paying video subscribers gain online access to cable programs. While some decry this as antithetical to the open, free-flowing Internet ethos, and a plot by evil cable companies to control video on the 'net, I've seen it differently.

The key is finding a model that's attractive to cable programmers (e.g. MTV, USA, CNN, etc) and consumers. Programmers benefit because they'd be provided with a viable online extension of their proven hybrid (monthly affiliate fee + advertising) business model. Until now they've been largely shut out of online distribution. That's because doing so for free would antagonize their cable/satellite/telco distributors who pay them around $25B/year. And that's before the point that free, ad-supported premium sites like Hulu have not yet proven themselves economically viable. Meanwhile, aside from a la carte paid download sites like iTunes/Unbox/others there hasn't been an online subscription model available to programmers.

These are some of the real, but often not well-understood business issues. Everyone wants something-for-nothing, and the Internet has too often set those expectations. But cable programmers need to get paid for their efforts so they can continue to deliver the quality programming consumers have grown accustomed to. The newspaper industry's woes offer tangible proof of what happens to an industry when its proven business model gets stripped away.

Despite what some skeptics say, consumers also stand to gain. All that great cable programming that's been locked to the set-top box in the home would now be available online. It sort of like cable's version of on demand Sling, but without any upfront or monthly charge (at least that's what we're hearing for now).

With TV Everywhere/OnDemand Online, Comcast and Time Warner are taking a solid step forward in delivering more value to their subscribers who increasingly live their lives online. Now they need to tamp down the hype and just focus on executing in a logical, user-friendly way.

What do you think? Post a comment now.

Remember "two great tastes that taste great together," the slogan from the classic Reese's ads featuring the mixing of peanut butter and chocolate? Recent developments suggest that independently produced/made-for-broadband video and Video-on-Demand could be another Reese's-like combination, bringing together two disparate worlds that have attracted loyal audiences in an offering that could have significant consumer appeal.

Consider, last week Multichannel News reported that Verizon plans to bring over 7 million broadband video clips from providers like blip.tv, Veoh and Dailymotion to its FiOS service, which users can browse with their set-top boxes. Also last week, AnySource Media, a software company that powers broadband-connected TVs, announced content deals with TheStreet.com, Break.com, Revision3 and Next New Networks, creating hundreds of "virtual VOD channels." And yesterday, Clearleap, a startup technology platform I recently profiled, announced its own deals with blip.tv, Revision3 and Next New Networks, providing content that cable operators can meld with their VOD offerings.

This push among made-for-broadband producers, technology companies and incumbent video service providers is not coincidental. While they each have their own motivations, their alignment could signal a winning proposition for viewers.

For the indie content producers, on-demand access on TVs augments their viewing experience and access to their programming. Given how difficult the environment has become for independents (Daisy had a good piece on this topic yesterday) on-demand access is a real differentiator. For cable operators and telcos, popular indie video gives them a targeted pitch to the tech-savvy, younger audiences who have become loyal fans of indie content. Down the road this group is probably most up-for-grabs for alternative "over-the-top" services, so focusing on defending them is smart. And for technology providers, a big market opportunity looms trying to connect the previously disparate worlds of broadband and VOD.

In fact, in a conversation I had last week with Braxton Jarratt, CEO/founder of Clearleap, he explained that cable operators get all this. They're looking for quality "mid-tail" video from broadband producers, including clips and short-form programs. The company's technology is currently feeding broadband video to a couple hundred thousand cable VOD homes, with a backlog of "double digit" markets pending deployment. Braxton has a lot of content deals on Clearleap's docket, creating a menu for its cable customers to pick and choose from to incorporate into their VOD offerings. Clearleap also offers an ad insertion platform, so indie video can be monetized, not just offered as a value add.

Meanwhile, VOD has long proven itself popular with viewers. Comcast recently announced it has delivered 11B views since it launched VOD. It has continued to augment its library and add more HD titles. While VOD hasn't really been a money-maker itself, it has become a strong part of the digital value proposition and a defensive move against other viewing alternatives. By incorporating popular broadband video into its VOD choices, its appeal is only strengthened.

While the tectonic plates of "convergence" continue to shift, examples of broadband video making its way to the TV continue to happen. TiVo has been at this for a while with its "TiVoCast" service, along with technology providers like ActiveVideo Networks and others. The likelihood for independently-produced broadband video and VOD to get together seems poised to increase.

What do you think? Post a comment now.

Below is the 16th edition of the VideoNuze Report podcast, for May 15, 2009.

This week I provide some further detail on a post I wrote earlier this week, "Comcast's Sam Schwartz Offers Some Insights into OnDemand Online Authentication Plans." Comcast's and Time Warner Cable's intention to make cable programs available online to their paying subscribers would be a big leap forward for the video and broadband industries. A key piece of how to bring this to life is "authentication" - how to ensure users are who they are, and that they gain access to programs they're supposed to. Sam explains how Comcast is approaching authentication and what we can expect later this year.

Meanwhile Daisy talks about her post on Beet.tv, "CBS Expanding Original Web Video for New Personal Finance Site," which explores how CBS is pulling video together from its online content group, news division and local stations to beef up the video available at its recently-launched financial destination site, CBSMoneyWatch.com. Also, with the demise of TV Week as a print publication, Daisy talks about the range of industry coverage she's providing at other online and print pubs.

Click here to listen to the podcast (14 minutes, 40 seconds)

Click here for previous podcasts

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

I've written a number of times (here, here, here) over the last few months about the recently disclosed plans from Comcast and Time Warner to deliver cable programs online to their paying subscribers. In general I'm a big fan, as these plans offer the potential for users to watch cable shows online that are mostly available through in-home set-top boxes only today. I'm also encouraged that cable operators seem to be going on the offensive to satisfy their subscribers' desire for anytime, anyplace access to content they're already paying for. Being offensive will certainly help mitigate "cord-cutting" tendencies.

However, if there's a fly in the ointment in these plans, it's how the cable subscriber will be "authenticated," or recognized as qualified to access that particular content at the web site where he/she's trying to watch. This is a crucial step because again, these cable operators only plan to provide access to paying subscribers of their traditional video services. To understand this how Comcast is approaching authentication, last week I spoke to Sam Schwartz, Comcast Interactive Media's EVP of Strategy and Development, and president of Comcast Interactive Capital, who is a point man for the company's OnDemand Online initiative.

Overall, Sam explained that the company is still working through how best to authenticate online users and keep content secure. Users will need to log in and then have their credentials checked to ascertain what programming they're entitled to. So the crucial step here is opening up traditional cable billing systems for access by web sites serving up the desired content. This isn't trivial because these billing systems weren't originally built to do this. Therefore there's a need for some type of entitlement database which must be pinged with the user's credentials to verify content access.

To prevent leakage in the authentication process Sam said the company is studying best practices from other digital providers. iTunes is one model which limits content availability to 5 devices. Alternatively, if access is within the home, then Comcast, as a large broadband ISP, would be able to verify IP addresses. Yet another method would be to require a credit card, which would disincent credentials sharing by subscribers. Two Comcast companies, thePlatform and Plaxo are playing key roles in supporting both the content management/distribution and user identification.

All of this is magnified because Comcast's programming partners rightfully expect that any content Comcast is distributing will be done so in a fully secure manner. In the digital TV realm, this has traditionally been handled by the set-top box and "conditional access" software in the headend (a cable operator's distribution hub). Paid online services which are connected to incumbent video services present new issues which free ad-supported sites like Hulu and YouTube haven't had to address.

Sam said pulling all of this together has been a major project, involving 100+ people throughout the company. The complexity becomes quickly apparent as this initiative touches so many different areas - video product management, technology, operations, billing, content acquisition, customer service, online media, etc. Partly as a result of this complexity, Sam explained that at the outset simply enabling its own sites like Fancast or Comcast.net is the goal. Other 3rd party sites may come on board later, only after the model is proven in.

Though it's evident that Comcast is taking a "walk before we run" approach, Sam emphasized the company is moving this along as fast as possible. Its goal is to be in the market this year with OnDemand Online. While the utopian gadflies are already decrying these kinds of paid access services, I think they balance multiple interests well, and will help to preserve the multi-billion dollar video value chain from decomposing into a free but profitless quagmire (like other media sectors have already). If all this ends up working properly, it will be a major milestone for the video industry in general and broadband video specifically.

What do you think? Post a comment now.

(Side note: I was also encouraged to see Time Warner move Turner Broadcasting System veteran Andy Heller to vice chairman yesterday overseeing its networks' push for "TV Everywhere." His role as champion of TV Everywhere gives the initiative added heft. Still, the bottom line here, as explained above, is that the back-end technology must be in place before any programming starts to flow. I hope he has this priority in his new role.)

Yet when I read Mr. Bewkes's comments about TV Everywhere and its implementation, he inevitably points to what Time Warner Cable (btw, not the company he runs any longer with the spinoff now almost complete) is doing with HBO in Milwaukee. By continuing to do so, I believe he is trivializing how complicated implementing something like TV Everywhere would be across the industry and across the country.

Mr. Bewkes's sketchiness with the details of how TV Everywhere would work is obvious in his interview with PaidContent's Staci Kramer here and here. There are plenty of generalizations and descriptions of the end-state, but little offered about how this would all be accomplished. One example: "...all of the video providers would have a link in their software where they could be pinged to see if the person is a video subscriber. That's not a complicated thing. It's simply a software program that asks does anybody have Staci as a sub and then Charter says, yes, I've got her and bang."

Meanwhile because the details have been so sparse, the media has been left to come to its own confusing and often conspiratorial conclusions about what TV Everywhere really means to consumers. Here's a sample of the recent headlines: "TV Everywhere - As Long As You Pay for It," "Time Warner Goes Over the Top," "Some Online Shows Could Go Subscription-Only" and "Pay Cable Tests Online Delivery." Talk about message mismanagement...

Meanwhile cable networks are also being hurt by TV Everywhere's hype. They are being forced to respond in public (as Disney's Bob Iger did in his keynote yesterday) to these vague ideas. But it is a PR nightmare-in-the-making for them, as they need to defend why consumers will have to continue paying subscription fees to watch their programs online, while broadcast TV network programs are freely available. That's a thankless job for them, and reading through Mr. Iger's speech yesterday, you could almost sense his resentment at being forced into this position.

Why Mr. Bewkes isn't modulating his comments about TV Everywhere in light of all this eludes me. Anyone who's ever created a product knows about "roadmaps," where product features are added over time, and customers are methodically messaged about enhancements to come. With TV Everywhere, it's as if all that matters to Mr. Bewkes is talking about the glorious end state, thereby erasing meaningful online benefits that can be delivered along the way. Contrast this with Comcast's OnDemand Online plan that offers the simple, but still highly-valuable near-term proposition of online cable programs on its own sites, and possibly the networks' as well.

Blockbuster and TiVo have announced that Blockbuster OnDemand movies will be available on TiVo devices. Though I'm all for creating more choice for viewers to gain access to the content they seek, in this case I don't see the deal creating a ton of new value in the market, as it comes 6 months after Netflix and TiVo announced that Netflix's Watch Instantly service would be available on TiVo devices and nearly 2 years after Amazon and TiVo made Amazon's Unbox titles available for purchase and download to TiVo users. It looks like the main differentiator here is that Blockbuster will begin selling TiVos in their network of physical stores.

The deal underscores the flurry of partnership activity now underway (which I think will accelerate) between aggregators/content providers and companies with some kind of device enabling broadband access to TVs. I believe the key to these deals actually succeeding rests on 2 main factors: the content offering some new consumer value (selection, price, convenience, exclusivity, etc.) and the access device gaining a sufficiently large footprint. Absent both of these, the new deals will likely find only limited success.

Consumers now have no shortage of options to download or stream movies, meaning that announcements along the lines of Blockbuster-TiVo break little new ground. To me, a far more fertile area to create new consumer value is offering online access to cable networks' full-length programs. As I survey the landscape of how premium quality video content has or has not moved online, this is the category that has made the least progress so far. That's one of the reasons I think the recent Comcast/Time Warner Cable plans are so exciting.

With these plans in the works, but no timetables yet announced, non-cable operators need to be thinking about how they too can gain select distribution rights. There's still a lot of new consumer value to be created in this space. Given lucrative existing affiliate deals between cable networks and cable/satellite/telco operators, I admit this won't be easy. However, Hulu's access to Comedy Central's "Daily Show" and "Colbert Report" does prove it's possible.

We're well into the phase where premium video content is delivered to TVs via broadband. Those that bring distinctive content to large numbers of consumers as easily as possible will be the winners.

What do you think? Post a comment now.