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Category Archives: Video/Music/Media

Are Marketeers Spinning Viral Video Stats?

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I really like the eMarketer.com newsletter, it’s one of the few that I receive that I read every day.  It’s well formatted, has bite-sized info, presents useful and relevant stats, and gets most of what I want to see above the fold. One of today’s articles was lauding the success of viral video, but unlike typical articles from them, I felt this contains some questionable statistics.  Let’s start with a few quotes:

Next to ‘cool microsites’ and games, viral video is hot.

Video clips got generally good reviews from marketers, with about three in 10 saying they yielded great results, and just 13% admitting their results were dismal.

If you see the fine print, n=2914 “experienced viral marketers”.  At 30% we have about 1000 viral videos of which their marketeers claim “great success.”

I’m either living in a hole or I have a different definition of the adjective great.  Why do I say this?  Well, how about you count the number of “viral videos” you’ve seen that you’d attribute to companies.  Remember, if it’s in this category it cannot include a commercial that aired on TV, nor can it be a clip like “Lazy Sunday”.  I am surprised if anyone’s list exceeds their count of fingers + toes.

My hunch, and I’m up to hear a counterargument on this, is that the surveyed marketeers are answering this way because it is trendy.  Survey bias exists fairly commonly in most segments, but even more so in a field dominated by follow-the-leader activities.  And marketing folks are especially predisposed to report on the success of their activities.  This is especially interesting in light of…

But what are the chances of a video actually going viral? According to an Online Publishers Association (OPA) survey, not that high.

Now I’d prefer if this data was less than a year old, as it was in February 2006 when YouTube’s activities began spiking (again, thanks to Lazy Sunday – I sure hope Chad sent a big bagfull of money to Andy Samberg).  My hunch is there’s a lot more forwarding going on than there used to be.  Of course, there’s a lot more Portland ice storms and people getting haircuts than there are commercially-driven “great success” viral videos.

CBS "gets it", empowers the audience

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Strange things are afoot at the Circle K

The DVD StoreIf the music industry is in a shakeup, then the video industry is in an earthquake (go ahead, make a better analogy, that’s not really my forte anyway).  Full-length TV shows available free on demand on company Web sites.  Episodes can be purchased individually to watch on your iPod.  Consumers can time and place shift any TV show they want, and legally.  You can even buy the boxed set of entire Golden Girls series!

Some networks get it very wrong (I’ll leave them Nameless By Choice).  Some, however, get it right. CBS announced today their intent to launch the “CBS Interactive Audience Network” which includes partnerships with the ‘traditionaly players’ as well as a whole bunch of small/medium technology startups:

Read the press release for all the nitty gritty details, but I am stunned and impressed at these moves.  Will they do it all perfect? Nope!  Will some things utterly bomb or backfire?  Most probably!  But what’s key is they are trying, and even more essential, they are being mindful of their customer base (as opposed to the music industry, for example, who chooses to treat their customers like criminals).

I chatted briefly with Dave Zatz from Sling Media, and from what I understand Sling’s participation is unique in that they will not only have a Web portal, but can also bring CBS content into the SlingPlayer on PCs and in the future, to the SlingCatcher device.  Sling was featured during CBS’s CES 2007 keynote.  Full disclosure here: I am a former employee there, have stock options, still love those guys, and think you should vote for the Slingbox Pro for Engadget’s Entertainment Device of the Year, and admit to being biased!

We have a long road ahead of us as the wave “future of television” has already begun to reach the shore.  It’s safe to say the broadcast industry is being heavily disrupted, and some big players are likely to fall over the long term.  Life for cable affiliates is already becoming challenging, and it wouldn’t surprise me to see some major networks suffer a casualty or two.  The content producers (MGM, Universal, etc) are all working hard as well, pushing their brands to the front.  Amazon Unbox, Netflix streaming, YouTube, etc. 

I can’t tell you who will rise and who will fall, but I believe in this: the companies that focus today on audience appreciation and customer retention are the ones who will be standing tomorrow.

More coverage on the topic: PaidContent, Ars Technica, WSJ (sub req’d), IP Democracy.  I predict this is top-of-techmeme by 1pm PST (as of 10:15 it’s 1/3 down the page).

Comcast makes already mediocre DVR just a bit worse

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I can’t confirm the stat (since I’m making it up), but I’ll go out on a limb and say TiVo’s product satisfaction rate probably hovers around 90%.  Echostar’s DVR is generally very well-liked by many of it’s customers.  Heck, even the tiny fraction of Windows Media Center Edition owners who use their PCs as DVRs claim it’s phenomenal.  And then there’s Comcast.

For HDTV DVR services, Comcast uses the Motorola DCT6412 set-top box, a unit that is simply plagued by defects nationwide.  Ask someone who owns this unit, odds are pretty good they’ll talk about their problems at length, and complan how much they hate it.  My friend Ryan was so frustrated by his unit (which is definitely defective) that he blogged about it.

I walked into my living room this morning to find my wife watching TV and when she pulled up the program guide, I noticed I’d lost about 1/8th of my overall screen space to a new “advertisement slot” (photos below).  Worse yet, I’ve lost 2 (of 6) lines of the visible grid area, meaning I have to spend roughly 1/3 longer than before just to scroll through channels.

ld_comcastguide_withads1ld_comcastguide_withads2

What a terrible, terrible move.  Here are a few simple ways they could make this marginally better (assuming they won’t get rid of it):

  • Reduce the height of the ad to the same height as a grid item, giving me one line back
  • Only have it show up once every XX pages
  • Use the “top area” where the Comcast logo is instead, since that’s pretty much wasted space already
  • Make it slightly bigger, but then let me hide it once I’ve viewed it (it can reappear every XX minutes)

Or just give me the darn TiVo interface already – the one that was announced two years ago. Come on!

Apple TV: Can they dominate the living room too?

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So AppleTV is officially shipping, and as I saw on Engadget, Walt Mossberg has already reviewed it.  Some excerpts:

… we can easily recommend it for people who are yearning for a simple way to show on their big TVs all that stuff trapped on their computers.

Apple is hoping that, just as the iPod trumped earlier, but geekier, rivals, Apple TV can do the same by making a complex task really simple.

The review continues on, and Walt gushes about the device quite a bit.  The only competitor he points out is the Xbox 360, which he dismisses because it’s twice the price.  I think this is a dangerous dismissal, as the price points aren’t really the issue in this category yet.  We are in early early adopter-land, which means the people who really want it, are gonna buy it. $299, $399, $599, whatever.  The bigger question to ask is: is this really a market they can dominate?

In 2 years, over 20 million Xbox 360s have shipped, and as The Online Reporter observes, the biggest Apple TV competitor could already be on the market.  Xbox 360 owners who have the Live service tend to love it, my friend (and fellow blogger and now Sling Media employee) Dave Zatz told me he felt the 360 was the best device he bought last year. Also, the NETGEAR EVA8000, which I reviewed last week boasts a more robust feature set at a similar price point.  I read a lot of conjecture about how “Apple TV is just like iPod year 1” but folks, I’m saying now it’s not anywhere close.

When Apple launched the iPod, the category already existed (even if you ignore other mp3 players, people already were comfortable with buying portable music devices).  The problem then was: there was no really convenient way to get existing and new music collections on to portable MP3 players.  I had a Rio Karma, it was great (like really great), but you had to be pretty savvy to get music onto it, and there was ZERO services on the Internet with new content.  In the living room, on the other hand, it’s not just a question of simplicity and furthermore, there’s tons of content out there.  It’s not hard to get “mainstream” video to a TV set, especially in comparison with the challenge of getting “mainstream” music to an MP3 player (circa 1999).

Now I’m not dismissing the product, nor am I dismissing Apple’s ability to move their marketing muscle into the living room.  But this certainly isn’t a slam dunk.  Take a time out to read Thomas Hawk’s list of why he isn’t interested in the “dongle”, then go check out Phil Swann’s reasons why he thinks Apple TV will “bomb”.  If you aren’t too saturated, I’d also stop by WIRED’s fair and balanced thoughts on why it “rules and sucks”.

Here are some of my specific problems with the product (note that I haven’t used it hands-on, so I have no comments about it’s user interface, which is probably great):

  • No YouTube support.  This is a very questionable move at this stage of Internet/video/PC/TV convergence.  The EVA8000 does it, and after a few days using it, it’s a very fun application. 
  • Widescreen-only.  I love the HDTV market, and about one third of all new TVs sold are flat (which implies widescreen), so that’s a lot of screens (I’ve read before the number of households is in the 20 million range, but cannot find that source to quote here).  But this is the kind of product decision that creates returns, something I have a feeling Apple doesn’t have to deal with in other categories.  Also, there’s a distinct lack of HD content offered at launch, which makes this even more… ironic?
  • A computer must be on all the time.  One thing I like very much about my Sonos and EVA8000 setups are they work directly with my networked hard drive (aka a “NAS“).  With the Apple TV, I need a PC/Mac on all the time, and while this is clearly a growing trend, it’s a requirement I don’t like in a product this expensive (it’s one thing for a $99 media adapter, it’s another at $299). UPDATE: I was corrected (by Ben at EngadgetHD), I misread the usage with it’s internal hard drive.

Is it a good product?  Probably. After all, Walt is a pretty picky guy, and even though he clearly has an affinity for Apple products, he seemed impressed (although he didn’t really talk about video quality in the review, which is an interesting omission).  Also, Apple does tend to make the product experience great, and I’ve got to assume that heavy iTunes customers are going to think this thing was sent down from the stars above.  As Sonos’ worldwide PR manager Thomas Meyer said to me, “Mr. jobs is definitely going to do this right.” 

My hunch is they’ll do a very good job appealing to that core market, but have a tougher time getting beyond.  I don’t think they’ll be as strong in the HDTV segment as they want to be, as even enthusiasts such as Ben Drawbaugh (contributing editor at Engadget HD) who thinks “it’ll be awesome” (and has blogged about wanting one) doesn’t think it’ll be all that useful for HD content.   If I were Apple, I’d be doing everything I could to get associated to HDTV, as betting on the future is more important than the past.

I’d guess they can out-market a company like NETGEAR in this space (but will probably drive them unit sales for some of the reasons I stated above). I think they’ll probably be the #1 leader in “digital media adapters” by the end of this year, and can probably move over 100K units in 2007 alone.  That said, I don’t think they are positioned to utterly dominate the living room the way they do in the portable space. 

NETGEAR EVA8000 Review: Hands on with the Digital Entertainer HD

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IMG_3576 NETGEAR EVA8000 packagingIntro
In 1999 when I cofounded Mediabolic, we had a vision of the “connected home” that we pitched all over the world. In 2000, I first started hearing (and using) the phrase “THIS is the year of the Digital Home” (yes, in all-caps). I’ve heard that phrase every year since, but have yet to see the vision come even close to reality. So when I saw the first demo of NETGEAR’s Digital Entertainer HD at CES 2007, I was fairly impressed, and began pestering them to try it day-in, day-out. With my current role as the company’s current guest blogger, I got exactly that – early access to play with the EVA8000 (which formally launched earlier this week).

Unfortunately, I got my unit with less than 10 hours before I hopped on a flight to the East Coast, but like any good geeky blogger would do, I spent about half the night playing with it. Not only that, I spent most of that time videoing my efforts, and edited it down to about 20 minutes (most of which shows the interaction with the device, it’s GUI, etc). The videos are available on YouTube (in 3 parts, because of their filesize limitation) and you can watch them here (for people in RSS readers, here are direct links to parts 1, 2, and 3):

IMG_3583 NETGEAR EVA8000 contentsProduct Details
For those of you who don’t want to watch the video, here’s a quick summary of the main EVA8000 features:

  • Connects to your TV and your home network
  • Streams music, photos, and videos from connected PCs as well as from the Internet
  • Support for numerous video formats, and stream quality is up to 1080p HDTV resolution
  • Works with YouTube, Flickr, and BitTorrent content, and can display RSS feeds
  • Networked DVR (“TiVo-like”) features to stream live TV from PCs with TV tuner cards
  • Makes a mean bowl of tomato soup

Pretty simple and straightforward, eh?

The product retails for $399, which is probably high in the long-term, but for now is a decent price point. Since we’re still in such an early adopter timeframe for digital home products, I don’t think there is a real urgency to focus on the mass market. Further, if you consider the pricing on HD/BluRay DVD players, it really fits in pretty well (especially since the amount of content it can play is staggering). Obviously sub-$300 prices would be ideal, but, as someone who comes from the other side of the field, I understand exactly why it’s priced this way. Also, don’t forget that it’s always possible to have a sale, but never possible to raise a price…

IMG_3616 NETGEAR EVA8000 powering up screenUsing the Digital Entertainer HD
Onto the EVA8000 itself. I liked the user interface (GUI) in that it’s simple and navigates quickly (much faster than, for example a MovieBeam or Comcast HD-DVR menu). If you’ve ever used a TiVo or Media Center PC, you shouldn’t have any problem getting it up and running. The installation is also quite simple, and the unit has all the important outputs (HDMI, SPDIF, and optical audio) as well as the less-important-but-probably-necessary-ones (component, composite, and stereo audio). For connectivity it has built in wireless 802.11g (with support for all the security formats – excellent), Ethernet and a couple of USB ports as well.

The setup went mostly smoothly (although I think I found a weird bug in the HDMI settings, but that’s a minor thing), and it was able to find my network, get online, download an update, and find my networked hard drive with me just following along with the remote. This is very important people – I didn’t have to install any software, drivers, or anything, and was able to get my music, photos, and videos all streaming in a matter of minutes.

IMG_3586 NETGEAR EVA8000 remote controlThere was one exception to the above: if you want to watch YouTube videos, you do need to have the PC software installed. Furthermore, please remember that I already have a properly configured networked drive (Maxtor Shared Storage Plus) streaming music to my Sonos, so I didn’t have to adjust any settings. If you haven’t ever streamed media on your home network before, this might take you a little longer, and you may need to use the PC software.

Regarding media playback performance for a moment. I looked at quite a few photos, and I didn’t really feel they were being displayed at the maximum resolution possible. This could be a trick of the eyes, but I was expecting the pictures to look “HD-like” since they are all resolutions of 720p (at a minimum), so I’ll have to look into this further to see if it was just user error or if the box can’t display them at full resolution. Music playback was spot-on, with only a minor delay between songs. Again, I need to dive deeper to understand the feature set around queuing music, making playlists, and performance with huge collections, but when I selected “play something” from my 15,000-song MP3 (and WMA) collection, it did exactly that. Last up is video – I didn’t have a chance to really put the HD features to a test, but will do that next week. The videos I played were in a range of formats, and the highest bitrate I used was a 2Mbps WMV clip, which looked perfect (yes, even wirelessly). I am curious to see how it stands up once I get the 6+Mbps videos going, but I don’t have any reasons to doubt its potential there.

IMG_3593 NETGEAR EVA8000 ins and outsOne key set of features with the EVA8000 is its ability to act as an extension of a PC with a TV tuner card. This means you can have a PC in one room of the house and stream its live/recorded TV to the living room. As a Slingbox owner, this wasn’t something I needed personally, but if you do have a TV Tuner and use Orb or another service, you should look into the Digital Entertainer HD. Also, the hardware was designed to support multiple Entertainers on the same network, and even have them control each other (there’s actually a whole suite of “Follow Me” features that I missed out on since I only had the single unit). Naturally, I wasn’t able to try any of these features myself, so I’ll hope to come back and revisit in the future.

One ding to the product is in the PC software. While it was easy to install and seems to have a pretty low impact to performance, it did create a whole new “sound card” in my computer. This means Windows thinks there is another audio output, and it threw off a couple of programs until I realized it had happened. I didn’t see any way to disable this on installation, so once you’ve completed setup, you might want to double-check your PC’s audio settings.

IMG_3609 NETGEAR EVA8000 GUI screenshotI really enjoyed the integration with both YouTube and Flickr. I was browsing through my own content in just a few minutes (you can use the remote control’s 10-key for text entry the same way you use your cell phone’s keypad). While I couldn’t quite navigate the collections and all the settings both services offered, the EVA8000 is remote upgradeable (I’ve already gone through one upgrade process – worked fine), so I’m sure the folks at NETGEAR can react and add new options dwn the road. The unit also is compatible with RSS feeds and has a few built-in offerings, including some weather features that were quite nice (even a snow report for the Tahoe crowds). I didn’t try the BitTorrent services, since I am not a user (believe it or not, I’ve never ‘Torrented).

Conclusion
If you skipped the videos and just read the text, you missed half the story, so here are (again) links to parts 1, 2, and 3. Now Apple TV is coming soon (possibly within days or hours), and the Xbox 360 has a lot of personal media services as well. I like the EVA8000 against Apple specifically because it can play so many different file formats and is focused on open services, while Apple’s will have a much narrower set and is a completely closed platform. It seems like everyone’s utterly ceded control of music to them, I sure hope it doesn’t happen again in the living room. With products like the Digital Entertainer HD, it’s good to see they have a pretty strong set of competitors.

IMG_3592 NETGEAR EVA8000 digital entertainer HDOverall, the product impressed me (a lot more than I was expecting – no knock to NETGEAR, but I’ve just seen so many similar products that were just terrible in the past). Perfect? No, but I’ve yet to see a single product in the “connected home” that is. The interface was clean and simple, and the unit performed as it should. A few nice bells and whistles of Internet content services did a great job rounding out the personal media streaming features. $399 is a little high (it’s $349 on Amazon), but it’s also the only game in town with both full 1080p support and the built-in integration with YouTube content, all delivered direct to the boob tube.

I really have to dive in even deeper to understand the full spectrum of features the unit offers, and figure out which ones I like/dislike, but most importantly – the product’s basic value proposition is definitely delivered in a good way. With the feature set I’ve seen so far, it is a very strong contender (quick and simple setup as well as HD streaming is a huge factor there). So if you are looking to find a way to play your digital videos on your TV, stream your MP3s to your stereo, and bring some Web media services straight to the living room, the EVA8000 is a solid option for you.

Disclosure: At the time of writing, I am working on a consulting project with NETGEAR, but this is of no bearing to this review. Furthermore, my Guest Blogger status merely granted me access to a unit, I was given free reign to write the review as I saw fit.

Can Movie Gallery Save MovieBeam?

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Unit controlsAlmost a year ago I wrote a review of MovieBeam, wherein I described it as a good, but pricey product.  Since then, a few promos to get the box for $49-149 were offered.  Endcaps at Best Buys were installed.  A few other influential people tried it out.  But it doesn’t seem like much has helped get their sales going. 

When I was first sent a unit, I was told Ethernet support would come by the Summer (of 2006).  It didn’t.  Furthermore, the movie selection over the past few months has mirrored what I typically see on United flights: a few good movies I missed in the theaters supplemented with a list of things I would never watch (although I did get a full 23 minutes into Snakes on a Plane before shutting it down).  This combined with a fairly non-competitive price point was a bit of a circle of doom, in my eyes.

Zatz reported today that Movie Gallery (an East Coast movie chain) is buying them (for under $10 million – ouch), and I wonder what they will do.  Here are the “big” options I see:

  • Keep it running as is, tie in the Movie Gallery brand. 
    This is probably the worst option for them.  The current service just isn’t compelling enough against all the new VOD, IPTV, and HD options from a huge variety of players (including Joost, which I’m now trying out – more on that soon).
  • Shut it down, leverage the MovieBeam brand for a new IPTV service.
    Not bad, as the name does have a nice ring to it, and they have already cleared a huge hurdle of IP distribution rights.  $10 million isn’t a bad deal to get all the relationships with Hollywood in the IP arena (which is virtually completely different that running a video store).  Not bad, but also probably doesn’t have enough legs for longevity.
  • Switch the model into service-based, compete with Netflix.
    This might be the most obvious and logical model for the company.  By using the box, they can offer a subscription service with no need for mailing anything.  Granted it still uses the same datacasting system, but with their access to content libraries combined with a huge customer base, offering it up as a $9.99/month (free loaner box) package could be compelling.  Also, the HD content is a nice plus here.
  • Do the above, but add Ethernet for live streaming and community features.
    If the MovieBeam box was able to stream content live, as well as give me a nice suite of personalization and community/social features, I think we’re in the money.  Especially if I can access huge libraries of content, manage my ‘queue’, select movies to watch with friends, etc.  Also, this opens up the notion of partnerships with Joost or even TV studios for new service opportunities.

Now nothing they are going to do will help improve the performance of the remote/box, but that doesn’t mean they can’t spin out a new unit in the next year.  I hope they look at this as a chance to innovate and differentiate.  I hope they see the potential of what could be done in a “digital home gone right” scenario. 

Nobody’s done it right yet, but the Xbox 360 is close, and Apple TV could be a good shot.  We’ll see if MovieBeam comes back with a vengeance, or just fades into the obscurity of interesting convergence ideas gone wrong (where it enjoys the wonderful company of the Audrey).

Trying a New Stereo: Pioneer VSX-80TXV

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IMG_3380 JT's current mess - frontBack before there were many gadgets and gizmos, cool mobile phones and MP3 players, the hot topic of consumer technology centered around audio/video gear.  Personally, my first home surround sound setup involved a HiFi VCR and a Dolby Pro Logic receiver.  We’ve come a long way from there, with 7.1 (or more) channel digital surround sound, pre- and post-processing, digital filters, and more. 

IMG_3381 JT's current mess - backMy current stereo is a Sony DA30ES with 5.1 Dolby Digital and DTS support.  It has a bunch of inputs and outputs, although all are analog.  I received a pretty little (well, not-so-little) package in the mail this week with a new Pioneer VSX-80TXV A/V receiver.  Oooh, integrated HDMI switch!  Ahhh, THX-certified.  Ohhh, so many ins and outs.  Me likey!

IMG_3357 Pioneer VSX-80TXV - back

I’m going to make the switch this coming week, although I’m going to have a little ‘guest panel’ come over beforehand so we can do a little comparison testing.  It’s a little tricky to test since it’s so subjective and based entirely on short-term memory, but we’ll do our best.   Some pictures below, more online here.

IMG_3348 Pioneer VSX-80TXV - backIMG_3364 Pioneer VSX-80TXV - frontIMG_3373 Pioneer VSX-80TXV - microphoneIMG_3378 Pioneer VSX-80TXV - remote control

Is TV really opening up soon?

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I’ve worked in the field of digital media and consumer technology for about 8 years now, and for all eight years, I’ve heard people predicting the imminent change and overhaul of the TV industry.  Back in the late nineties, it was the dawn of interactive television.  In the early 2000s, it was the dawn of IPTV, about to be launched by all the telcos everywhere.  For the last couple of years, it’s the end of TV, as it’ll be completely replaced by streaming Internet video and user-generated content (UGC).

Guess what folks, the one hundred and ten million households (that’s 110,000,000) who consume cable and satellite TV are a lot further away from big change than some experts seem to think.  Steve Rubel wrote a piece yesterday which I feel contains exactly the examples of misplaced hype:

The race is on to turn your TV into an open content platform. This will bring more programming to your set and much of it won’t come from the traditional networks. Conspicuously absent from the game are your local cable and satellite providers. Should they fail to act, they all run the risk of turning into commodity services.

…

If you wanted to, you can already ditch your cable or satellite provider. Wired news ran an experiment a few months back showing that it is possible to get a lot of content on your set without them, though there are still lots of caveats. As the big technologies players continue to refine their IPTV strategy, the need for cable TV programming will diminish.

It is most certainly possible to do such a thing, but in an era of increasing HDTV programming (DirecTV is en route to 100 HD channels this year), why on earth would you make such a change?  I watch Heroes pretty religiously.  Now I can stream every episode from NBC.com, which is a great way for people to catch up with the show, but the viewing experience doesn’t even come close to the one I have now. 

Now I suppose I could find an illegal download of the HDTV version, then hook up a PC to my TV set (or buy one of the upcoming “connected home” devices), then watch it that way.  But that’s a major shlep for the masses, and most certainly, in every way, a worse experience than using even a cable-company provided DVR (because $800 for a Series3 is still too much, no matter how great the product is).

We also saw a report circulate recently claiming YouTube users watch less TV.

Frequent YouTube users said they are spending less time visiting other websites (36 percent) less time watching TV (32 percent), less time on email and other online social networking (20 percent), and, well, less time on just about everything else.

I guess I’m just too much of a disbeliever in studies like these, and for one basic reason:  most people tend to say they watch less TV when polled.  It’s as if all of TV watching were merely a guilty pleasure.  Yet, reports show Americans are watching more TV than ever before (whether you like Nielsen or not, it is still considered the de facto standard in TV viewership information).

Now I do believe in an increase of video consumption, and believe that the use of both PC-based TV watching and Internet-enabled TVs are on the rise.  I believe we will see an increased quantity of diverse options as to how we choose to watch TV.  In fact, after all we accomplished at Sling Media, I was surprised to see articles this week with the non-evil-doing Googlers claiming the Internet can’t deliver TV content yet (recommended reading from GigaOm, ZatzNotFunny, and WebTVWire).  Sure it can, it’s just a question of how it should be used.

In my Mac-PC video debate last month, Fred Davis and I diverted to talking about broadcast vs IPTV delivered television, which Josh Catone chimed in on in his blog as well.  I believe the future on this topic is going to be determined primarily from an economic basis.  At present, we have the infrastructure in place where, if desired, every single household in the US can watch the same TV show live in real-time.  Broadcasting of content requires no new infrastructure build-out (unless, of course, we want a lot more HD stuff, which, of course, we do).  Doing the same thing over IP networks wouldn’t work, and wouldn’t even come close.

So why bother trying to make it work?  It simply doesn’t make sense to build out a massive IP infrastructure to do it.  However, let’s say that at any given time, all 110MM households want to watch a “recent episode” of a show (say, last week’s Heroes).  Best method possible?  Give them all DVRs, use the broadcast pipe to get it to the house, let them watch it time-shifted however they’d like. 

But now let’s say that all 110MM households want to watch radically different content, such as the episode of The Facts of Life where Blair learns a very important lesson, or that very special Blossom.  Then, having access to a personalized, on-demand IP network is ideal.  It’s costly to build, costly to maintain, and time-consuming to construct (not to mention dealing with the graphical user interface complexities), but it’s the right model.

Ultimately, I do believe in a future wherein a hybrid of services are available.  But it’s the future, and not the present, and there is a lot less of a rush to make it happen than we in the technology community might like.  Cable companies have increased billing rates higher than inflation for almost 10 consecutive years (since good old, helpful to consumers deregulation – that’s sarcasm people).  The costs to get an IP service off the ground are staggering (ask the people at companies like Akimbo for validation).

So I’ll end by making my conservative prediction:  the majority of US households will continue to consume television the way they do today for no less than 5 years, and even then the changes will be gradual and evolutionary, not drastic and revolutionary.

Netflix Moves Beyond the Disk

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Netflix, the little DVD rental company that could, announced today that they’d offer a PC-based streaming version of their service (there’s already a video demo online).  It’s launching as a limited beta with a select number of users, with about 1000 titles available immediately.  As it spreads to its now 6-million-user strong customer base, the pricing is based on your monthly bill – for every dollar you spend, you get one hour’s worth of streaming.  More of the basics on PVR Wire, an unimpressed Davis Freeberg, Zatz Not Funny, and the Mercury News.  And don’t miss Dave Winer’s “nyah nyah” to Robert Scoble on the Scripting News. 🙂

There are quite a few important ramifications of this new “Watch Now” feature as I see it.

Hollywood and the Internet
In a nutshell, Hollywood has clearly stripped all public fears of distributing content over the ‘Net.  Sure there’s DRM and it’s not open-platform and people can complain all they want, but the bottom line is: they are trying, and in my opinion putting the right feet forward.  Combine this with last week’s CBS keynote, and you have some fairly daring moves.  This is increasingly important as Joost (my early winner for worst-named new company of 2007) and other attempts to go around the studios launch.  If Hollywood moves fast enough and smart enough they can effectively cripple any illegal offerings from reaching the masses (but go read Mathew Ingram’s more skeptical thoughts on this).

Redefining rental: will the stores survive?
Another aspect of the “traditional business model” that is clearly up for redefinition is the question of “what is a rental?”  In the dark ages (roughly… the 80s) there was almost no personal ownership of videos, and everybody went to their local rental shop to pick up a movie for a night, then paid late fees as it sat on the counter by the door.  Now look at the worlds of possibilities.  Cable companies’ on-demand services give you access to hundreds of movies (many free) instantly for 24 hours, and the satellite guys are pretty much there as well.  DVDs are priced so low that many people buy instead of renting (personally, I buy em used on Amazon, keep them for a while, then resell them).  Blockbuster lets you rent online, return in the store, with no late fees.  There’s no doubt that Blockbuster is here to stay, but the struggling mom+pop stores and smaller chains are about to face a whole new wave of competitive services and products.

Business model
Mike Arrington wrote that Netflix has $40MM budgeted for costs and overhead of the new service.  Since the movies are all being streamed in standard definition (which irks Mr. Scoble, but I think is irrelevant right now as PCs do such a phenomenal job of upscaling video anyway) the bandwidth costs shouldn’t be terribly excessive.  I’d love to see someone really analyze the metrics here, as my hunch is this: they are probably budgeting XX hours of streaming per month per customer, and that XX is a fairly low number when compared across the customer base.  For every user who watches their full 18 hours per month online, I’m sure there are at least 5-10 who watch 0 streaming.  So the important issue is how much of this can they really afford to do, especially if the service takes off?  Is this all about customer attraction or retention?

PC vs TV
From about 1999-2005 I used the phrase “TV is lean back, PC is lean forward” on average 3.4 times a day (I cannot verify that number, but I believe in it), as the company I worked for at the time was providing digital media streaming technologies to consumer electronics manufacturers.  Turns out I wasn’t completely right (gasp).  I plan to write a longer post on this topic, but it seems that many consumers are perfectly willing to lean back at the PC (we’ll see about the other part later this year).  With services like YouTube and products like the Slingbox, consumers are spending more and more time at their PC being entertained.  I’ve been advising my clients recently with one piece of new advice: “you cannot design any convergence product or service that does not anticipate a laptop being used in conjunction with your product.”  In other words, if you have a new interactive-TV play, assume there’s a laptop being used at the same time on the couch.  I wonder to what extent this will continue, but this is one more important piece of the puzzle.  But to get the Netflix Watch Now back to the TV?  Thomas Hawk mentions using the streaming features of the Xbox 360, and Kevin Tofel muses briefly on the SlingCatcher.

Parting Thoughts
While I was once a Netflix customer, I am not one now, and this most certainly isn’t enough to get me back.  I’ll also admit that while I am not anti-Netflix, I have not viewed them as some pariah in the DVD space.  Even with 6 million households, there’s over 60 million more out there they aren’t servicing.  That said, they’ve knocked Walmart’s attempts back to the stone age, and have pushed Blockbuster into exploring new models.  Today they enter a new game, with a compelling service, but new competition and new forces in play.  I’m curious to see what happens next.

Sling Media shows Clip+Sling at CES2007 – CBS Keynote video

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IMG_2713 jason krikorian - cbs keynoteLong long ago (last year), in an office far, far away (San Mateo), Blake Krikorian (Sling Media CEO) had a vision wherein Slingbox owners could easily share clips from favorite TV shows with each other. We knew it was a good idea, but didn’t want to push to far forward due to industry relations, copyright issues, bandwidth issues, etc. Looks like they’ve come a long way in the few months since I left, and a lot of these issues got worked out, which is very exciting. They announced two major new things at CES 2007: SlingCatcher and Clip+Sling.

SlingCatcher coverage is fairly pervasive, and I’ll hold off on adding any commentary of my own until we get closer to product launch. Watch this video or read about it at Zatz Not Funny, Engadget, Crave UK, MobilitySite, or ShinyShiny.

For Clip+Sling I was able to attend Les Moonves’ keynote during CES, and recorded a video of the whole demonstration:

IMG_2758 chad hurley - cbs keynoteIt was great to watch Blake up there, especially as Chad Hurley had been on stage as well. YouTube is definitely great for user-generated content, like the videos we all make with our cameras these days. It’s a real pain for most users, however, when it comes to TV content. Most consumers have no idea how to record video to their PC, or even worse how to edit down to the clips they want. I think Clip+Sling with a centrally hosted server launched in conjunction with CBS and other networks could be extremely disruptive in the online video space. I’m looking forward to the launch later this year.

More Clip+Sling coverage: Engadget, Laptop magazine, PVRWire, SlingCommunity, and Zatz Not Funny.

Disclosure: I am a former Sling Media employee and have some stock. In fact, I just found a couple of videos of me doing Slingbox demos with the nice people at BuyTV (and the Slingbox Pro too)

Also, I video’d the CBS “media” presentation during the keynote.

HD-DVD and Blu-Ray look out, here comes HD-FVD

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warning: this post and video are heavily laden with sarcasm and are not intended for those with a lacking sense of humor (not that ours is necessarily that great either)

Jeremy and I were cruising around the nether regions of CES and next to the Chinese circuit board companies and Roomba knock-offs, we came across the HD-FVD booth. Talk about a dark-horse. If HD-DVD is to VHS, as Blu-Ray is to Beta, then what the heck is HD-FVD. Their library is pretty, pretty, pretty impressive. They had titles ranging from “caterpillar on leaf” to … wait for it … “ladybug on leaf.” Check out this video taken in the booth where Jeremy and I had a little fun.

Not convinced? Read the specs…

IMG_2696 FVD format

See that? There at the bottom of the chart. The huge differentiator. Price: Low.

More on the “Ross Perot of HDTV standards”: The Inquirer and The Gizmo Blog.

CBS keynote: A vision of Media @ CES2007

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I felt the CBS keynote at CES 2007 was one of the more interesting ones last week. It showed a company that is faced with the most daunting challenge: to transform itself in a time of massive change. TV networks and companies have so much competition on the horizon it must be frightening to be at the helm. Attacks come from every side. So to see Les Moonves (who I actually got the chance to meet and speak with at Sling Media’s booth during CES 2006) address the question of “what is media?” and have so many different, compelling answers was a pleasure. Although I could have done without the embarrasingly bad Second Life Star Trek montage. Talk about a selling point against user-generated content!

This video was shown just before Les took the stage.

More coverage of the keynote: Shiny Red Button, Core77, GigaOm (and subsite NewTeeVee), and WebProNews.