3D TV; First Failure of the New Decade

No Consumer Demand For Expensive Sets

The flurry of  press releases following CES 2010 extolling the virtues of 3D in the living room reminds me of sage advertising advice;  “Don’t believe your own hype!”

A Harder Mountain to Climb: As stated in a recent article in Broadband TV News:  “The road from HD to 3D is ‘a harder mountain to climb’, according to the US based research institute NSR, because ‘equipment required to bring 3D from the cinema into the living room is neither on the shelves, nor on wish lists of the general viewing public’.  Difficult facts to ignore.

HD has gained market share not only because of the quality of the image (although most in the US with HD sets do not subscribe to HD services) but because of the large screen, thin profile, built in ATSC, improved energy efficiency, surround sound, etc.  And one of the most compelling reason; their old tube sets were finally wearing out.  Even though the price of the 36″ to 50” screens have come down, they still represent more than just an impulse buy.

Economics 101: Least anyone forget, the world is still mired in an economic crisis.  The US is still experiencing 10% unemployment overall with some regions much higher.  Foreclosures are still rising with no end in sight and retirement investments have yet to recover from being halved in the last 2 years.  Yes, we may be climbing out, but with predictions of no new jobs until 2012, and credit card limits trimmed, aside from those getting bonuses from bailed out banks and Wall Street Robber-Barons, where will the cash come from?  Or are we supposed to think that consumers will lease their next TV from the ‘Bank of Sony’?

Embracing the New Technology – Why? So whatever would possess the “average consumer” to replace their new HD big screen TV with a 3D set so they can get two or three channels in 3D on a sporadic basis?  Will the subscription tier for 3D programming drive their cable bill over $200/month?  Or will 3D programs only be ‘events’ like the Ultimate Fighting Death Matches available for ‘only’ $69.95?

Forget About the Remote, Where Did I Put Those G– D— Glasses? !!!!! A recent NY Times article gave a rundown of the 3D glasses available to movie houses – from sleek $50 models to cheap ones for 65 cents.  Which gets one to thinking about the feasibility of putting on a strange set of glasses every time you want to watch TV.  There are some anecdotal accounts of viewers getting headaches and difficulty putting 3D glasses over the top of their prescription lenses.  (Perhaps Best Buy will include a coupon for Lasik Surgery with every new set.)  And how many pairs will each household need?  Ok, you have one for Mom, Dad and each of the kids (child sized, of course).  So it looks like your out of luck when you want to show off your new toy to the neighbors.  Unless they stop at a Radio Shack on the way to get their own pair.

The economic news will get better (someday) and consumers will want to upgrade their living room TVs.  But the consumer electronics marketplace is filled with many more serious contenders than it was when TV was king.  3D TV may have a place in the market, but for now, it just a novelty, attracting the attention of the early adopters.

Keep Pushing Forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for consulting or full time employment opportunities.]

2009 Digital Media Conference West Review

Peanut Labs and Survey Monkey Offer an Alternative to Ad Clicks

Digital Media Wire’s DMC West in SF last week was a small but informative event.  However, the items which interested this blogger were not the prognostications on the next mobile or IPTV delivery platform.  The growing wave of user profile data collection tools and using them to drive revenue may prove to be a significant business model for OTT Video and online game sites who are tired of pre-roll, post-roll, pop-up and banner ads cluttering their sites.

Dave Goldberg, CEO of Survey Monkey and Murtaza (“Murty”) Hussain, President of Peanut Labs were very forthcoming in their remarks on the first panel of the day.  This was especially welcome after a very boring morning “keynote conversation” about commuting between the East and West Coast, how to ship your reptiles when you move and why “DIGG” has two Gs instead of one – who cares?

150 of the Fortune 500 Companies Have Used Peanut Labs, according to Hussain.  Goldberg revealed that Survey Monkey’s revenue comes from large corporations who have multiple “premium” accounts.  The hook of free survey tools brings in department heads who want to capture their own data and not share it with other departments.

Gold from Survey Responses Instead of Ad Clicks:  So just how can content distribution and gaming sites make money from surveys?  Peanut Labs can place survey click banners on VOD or gaming sites which allow subscribers to rack up purchase points instead of paying cash.  When a survey is available which matches the subscriber profile, the user has an option to take the survey or not.  And when they do take it, “ca-ching”.  The site owner and the survey company split the revenue.

How Much is a Survey Response Worth? Murty Hussain stated that Microsoft was willing to pay $10-$15 per respondent for a survey about a new computer game.  Knowing if the subscriber is male or female will increase the CPM by as much as 60%.  With this type of payoff available, who would ever bother with pennies per ad click?

Protection from the “D” response to all questions:  Peanut Labs screens the responses and will flag a user who they believe is trying to scam their system by using “bad behavior”.  How? By getting the MAC address from the computer used to answer the survey questions.  If someone just takes survey after survey and answers all questions with the same response they are prevented from further participation.

What About Privacy? Both companies admitted that they collect consumer data from those who take their surveys.  And, the consumer has no clue if and when data is being collected, who can see it, where it is stored, and if it will be sold to the highest bidder.  Of course, there are the standard responses that “they” would never do this;  “their” data always purged; “they” never offer your data for sale.  But the veracity of these responses must be weighed against two known facts; 1)  They admitted to associating your data with the MAC address of your device; 2)  Selling data is their only source of revenue.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for consulting or full time employment opportunities.]

Cisco, Rovi, TDG and Verimatrix at STB 2009

Turner, AccuWeather and Sky Angel in Attendance

Last week’s STB 2009 in San Jose was a well received, quality event in the heart of Silicon Valley.  Greg Fawson and his X Media Research staff put on this 3^rd annual conference which attracts a select, albeit, small crowd for 2 days of presentations.  The 300 or so attendees were exposed to a wide cross section of the Digital TV and entertainment eco-system with trends and predictions explained by key insiders.

Notable Attendees: Aside from the speakers, key players from the entertainment and technology sectors were there to hear from their competitors and collaborators about the state of the industry and the predictions for near term changes.  Magnum Semi and NXP Semi were rubbing shoulders with their SoC customers and prospects while AccuWeather and Turner Network were looking for clues to which areas of distribution represent the best bet for content licensing.

Hybrid TV Is Here To Stay:  Several speakers including Cisco’s Ken Morse, CTO for Video, and TDG’s Colin Dixon, Practice Manager for Broadband Media, extolled the virtues and increased adoption rates of hybrid TV.  Set Top Boxes which connect to the net for OTT (Over The Top) video content along with Free to Air ( in EU) and ATSC in the US, give consumers an opportunity to cut their cable or satellite bill and subscribe to only the premium OTT channels they really want.  Though no one is predicting a complete cutting of the cable or satellite cord just yet, these MSOs may see a significant number of their subs going to a lower tier of service.  Why purchase a premium package with HBO and Showtime in a large bundle with 200 channels you never watch when you can purchase basic service and buy a Roku box for Netflix movies at less than $10/month extra?

Sky Angel Soars: The darling of the OTT business model in the US seems to be the “Family Friendly” content provided by Sky Angel.  Using the IPTV distribution services of NeuLion, Sky Angle was cited by speakers as  a prime example of the OTT threat to cable, satellite and telco subscription services.  And sitting in the audience at the conference to hear the accolades first hand was Sky Angle’s Sr. VP of Engineering, Sherrod Munday.  Sherrod enlightened me with some of the details of their very serious investment in infrastructure and content licensing that is not just a ‘flash in the pan.”  With their headquarters located in Florida,  the satellite downlink site, encoding and distribution center is in Cleveland, Tennessee.  Sherrod explained that their family subscribers are also looking for mainstream entertainment, though nothing approaching an R rating.  Sports, weather, and news channels are already included in their lineup.  And there may be plans to add other channels of general interest to the home improvement, travel and cooking audiences.  (See my previous postings on “Godcasts” to get more information on the religious OTT services.)

Widgets, Widgets and More Widgets: “This Will Be A Blu-ray Christmas” -  TDGs Colin Dixon delivered that quote to drive home the fact that net connected Blu-ray players will introduce even more consumers to the growing OTT market.  He also noted the significance of Intel’s newly announced Atom CE4100 processor enabling Flash 10 playback of widget launched, videos on non-PC devices.  Netflix, Amazon and CinemaNow are increasing their stable of widgets supplied to CE device manufactures to be used as part of their on-screen UI.  These simple buttons showing up on the screen of a net connected TV can instantly transport a viewer to more entertainment purchasing portals than they ever dreamed were available.

More Blu-ray Features to Come:  Glenn Algie, Video Solutions Architect for Nortel (no they are not dead), filled me in on some forward progress being made on the Blu-ray coding front.  According to Glenn, a significant number of out of work Java programmers have been busy at the major movie studios writing BD-J code for Blu-ray DVDs.  BD-J allows bonus content on Blu-ray Disc titles including network access, picture-in-picture and access to expanded local storage.  These “Bonus View” and “BD Live” programs allow DVDs to take over the runtime of the box and present a unique set of menus, widgets, and net links once the DVD is loaded.   Glenn also mentioned the work being done by RCDb to deploy networked applications on Internet connected Blu-ray players.  A player can now dynamically load and unload applications and connect to third party services and content offerings controlled by the player manufacturers and their retail partners.

“The Integrated TV May Be The Next Trojan Horse”:  Richard Bullwinkle, Chief Evangelist for Rovi presented their market findings on how consumers interact with their various devices for entertainment.  [He also explained that “Rovi”, the new name for Macrovision, was created by taking the 4 middle letters of the old company name.]  Again, the network connected TV with an array of widgets may be a powerful device to lead viewers into the ever expanding video marketplace.   It may lead to cable and satellite disconnects – that is if there is another outlet for time sensitive programs such as Idol, awards shows and sports.

Verimatrix “Multi-Rights” and Watermarking:  With this move toward non-traditional distribution of content, license holders have employed a variety of competing, and non-compatible, security solutions.   Steve Christian, VP of Marketing at Verimatrix, explained their recently introduced “Multi-Rights” system during his presentation.  By combining several DRM licenses into one bundled package, Verimatrix can detect, decode and transmit secure video files from a variety purchasing sources to either PC, TV or Mobile output devices for the consumer.  This technology is absolutely required to give consumers the choice of purchasing methods and playback devices.

For lower value paid content protection, the Verimatrix hidden video watermark provides a degree of deterrence.   Steve explained that the main value of the watermark is to make the casual illegal copier think twice about their actions if they know the content they downloaded and posted for others to copy can be traced back to them.  It also gives license holders a tool to track down serious pirates once they locate illegal copies of their product on the net.  Verimatrix will decode the watermark and provide customer information to the license holder for potential legal action.

Odds & Ends – Ads and Search: There were actually too many topics covered at this show to report in one post.  However it is worth noting that Targeted Advertising and Simple Content Search remain hot topics of conversation.  Monetizing the viewer experience may more and more depend on specific ads which, hopefully,  keep viewers tuned into the message.  And the need for a viewer friendly search and recommendation engine for the growing amount of content has never been more evident.

One Last Thought on Cisco’s Home Video Conferencing:  With their recent purchase of Tandberg, Cisco’s Ken Morse did say they were definitely expanding their video conferencing offerings to include the average consumer.  This blogger is still not convinced that there is a business there.  As stated in previous posts regarding the Verizon / Cisco collaboration on this product offering, everyone who has tried to crack this nut has failed.  From the “Picture Phone” to the most recent offering by Telmex, network video conferencing has not been made appealing to the everyday consumer.  For business, yes; the expense can be justified by a reduction in travel and carbon footprint associated with trips to clients and remote offices.   Instead of attaching a camera to the living room TV, why not use the video camera in almost every cell phone?  Or, maybe a “cell phone dock” for the TV would do the trick?  Perhaps it will be unveiled at STB 2010.  I can’t wait.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for consulting or full time employment opportunities.]

Intel, Adobe and CBS Tout IPTV Widgets

Kudelski Group Jumps on the Intel Bandwagon Selling DRM Licenses

Intel’s New IPTV SoC for the Digital Home: In announcing their new IPTV SoC, Eric Kim, Senior VP and GM, Intel Digital Home Group said, “At the center of the TV evolution is the CE4100 media processor, a new architecture that meets the critical requirements for connected CE devices.” then followed up by saying:   “This is the tip of the iceberg. With widgets and Flash on the TV you’ll see a similar effect to that which we saw with smartphones.”

Adobe Flash Player 10 Port: According to their latest press release, Intel is working with Adobe to port Adobe Flash Player 10 to the family of Intel CE media processors to optimize the playback of graphics and H.264 video to enable for the first time a wide array of Flash-based content on the television.  “As TVs become more interactive, Adobe Flash is an important enabling technology to help content developers blend together video, 3-D animation and rich graphics.”

Widgets = The Next Killer App? The combination of a capable processor and interactive Flash widgets could spark a growing subset of TV-specific apps for accessing premium content, games, music, and the web. Intel wants developers to target the new chip and use it in conjunction with Flash, which Adobe is making easier to use on such devices.

CBS Extols the Virtue of TV Widgets and Interactive TV Applications: Broadcast networks such as CBS are exploring TV widgets to help their viewers find and connect to premium content.  “Navigation is the No. 1 challenge for today’s television viewers,” said George Schweitzer, president, CBS Marketing. “Intel’s CE technology and our new TV Widget platform are designed to help people find the shows they want and discover new programs that are relevant to their interests. What’s more, the TV Widget gives us another platform to connect and interact with our audience while delivering an exciting new television experience.”

Kudelski Licenses DRM to Intel: Nagravision, a Kudelski Group company, announced they have signed a technology licensing agreement with Intel on Sept. 25.  According to the release, the agreement will see compatibility between Nagravision’s NOCS technology and Intel’s CE media processors, allowing Intel’s CE industrial customers to design hybrid IPTV set-top boxes and secure digital video home products for service operators.

Devices licenses sold through Intel is a very smart move for Kudelski.  There are lots of choices for DRM and chips.  Having your DRM already coded into a SoC is a sure way of reaching a much larger audience with a better known brand name.

Intel Still Needs to Make the Sales:  Even with this stellar lineup of partners and features, Intel still must make the case that they can beat Broadcom, Motorola, NXP, ST, Sigma, TI and a host of fabless semiconductor houses in an IPTV market which is getting very crowded.

Time to Market is the Name of the Game:  If all SoC offerings are perceived as having a similar suite of features, then it comes down to service, price, and availability.  As most of us know, press releases and marketing hype fall flat if working production units with debugged software are not available for building your CE prototypes and conducting your lab trials.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[Jeff is available for consulting and full time employment opportunities.]

FCC Fires Up Net Neutrality Rules

“The FCC must be a smart cop on the beat preserving a free and open Internet” FCC Chairman Julius Genachowski.  September 21, 2009

“Preserving a Free and Open Internet”:  Just the title of the speech today at the Brookings Institutes by FCC Chairman, Julius Genachowski, puts an end to any speculation about where he stands on Net Neutrality.  Stating that “Congress and the President have charged the FCC with developing a National Broadband Plan to ensure that every American has access to open and robust broadband,” he went on to say, “The FCC must be a smart cop on the beat preserving a free and open Internet.”

Openness Has Created Opportunities: Quoting Tim Berners-Lee  that the Internet is a “blank canvas – allowing anyone to contribute and to innovate without permission.”   The Chairman reminded listeners that Netscape, Wikipedia and EBay were all able to thrive because there was no single entity picking winners and losers.   “This is the power of the Internet: distributed innovation and ubiquitous entrepreneurship, the potential for jobs and opportunity everywhere there is broadband.”

New Rules Proposed: Today, the Chairman stated he wanted to have the 4 existing FCC principals, known as the “Four Freedoms” made into law:  Network operators cannot prevent users from accessing the lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.  Of particular note is the use of Skype, Vonnage and other VoIP services which use broadband pipes to compete with the owners of those pipes for telephone customers.

Net Management Practices to Be Transparent: In addition there would be a ban on those who discriminate against particular content or applications and that “providers of broadband Internet access must be transparent about their network management practices.”  In other words the FCC does not want to be the last to know what an ISP is doing to throttle bandwidth. Genachowski reminded us that the case involving a cable provider [Comcast] thwarting peer-peer downloading was brought to light by an engineer and hobbyist living in Oregon realized that his attempts to share public domain recordings of old barbershop quartet songs over a home Internet connection were being frustrated. He complained to the media and the FCC was forced to investigate.

Wireless Will Be Subject to the Same Neutrality Rules: If the wireless industry thought that they were skating under the radar, they got a wake up call today.   Citing new and wonderful wireless Internet access devices like WiFi cards and Smart Phones, the Chairman indicated that there would be no difference between cable, telephone line, satellite or wireless Internet access for the application of his new Net Neutrality Rules.

More Than Just Protecting Funny Video Streaming: Health-related Internet distributed applications, can help bring down health care costs and improve medical service. “Four out of five Americans who are online have accessed medical information over the Internet, and most say this information affected their decision-making” according to Genachowski.  He added that “the Internet is helping enable smart grid technologies, which promise to reduce carbon dioxide emissions by hundreds of millions of metric tons.”

Political Speech Will Be Protected Too: The open Internet enables much more than commerce. The use of YouTube and Twitter to tell the world of democratic movements around the world need to be protected.  We do not need AT&T, Verizon, Comcast, Rupert Murdock or any other self anointed censor setting the social and political agenda for the world.  I for one, commend Chairman Genachowski for being straightforward and clear in his approach to protect the public assets controlled by private enterprise.

Further Information: You can read Genachowski’s complete prepared remarks on the Brookings’ site.  A short video explanation of Net Neutrality (in plain English) is posted on my YouTube Channel - http://tinyurl.com/jviptv

Keep pushing forward.

Jeff Vinson

jeff_vinson@sbcglobal.net

[Jeff is available for consulting and full time employment opportunities.]

ZillionTV = ZERO $$$

Launch Delayed:  After spending unknown “zillions” of dollars, the long awaited launch of ZillionTV has hit a snag.  The latest hope is to get something launched “in the second half of next year” according to this weeks press quotes attributed to CEO, Mitch Berman.  Unfortunately in the ever crowded space of IPTV VOD services, hope is not a very compelling business strategy.

Tier 1 Telcos Have Existing VOD Plans in Place: Convincing a major Telco (Verizon or AT&T) to scrap their existing IPTV VOD service because you can give their customers “the richest, creamiest” video is laughable.  MSOs don’t care about the cream, they want the milk.  And they already have plenty of cows (movies and TV shows) from lots of farms (studios) providing endless quantities of milk and butter for their major markets.

An Idea Whose Time Has Come and Gone (Along with the VC Cash): Anyone who has worked with any of the major MSO or Telco knows that they are loath to make a decision, any decision which may tend to impact their service to their customer base.  Subscriber churn and calls for service are the bane of this business.  So there are lots and lots of roadblocks thrown up to prevent some crackpot from throwing a spanner in the works.  You need to get the CTO to agree it fits within their existing and planned network architecture.  Then you need to show the business owners how they will make tons of money with no service interruptions to their existing suckers – I mean, subscribers.

Net Neutrality Issues: If Zillion’s point of difference in the market is to work together with ISPs to provide priority packets for better QoS, they may also have to convince the FCC that this is a great idea for American consumers.  The confirmation this past June of Julius Genachowski as FCC chairman was reportedly applauded by proponents of net neutrality, who hope the FCC will move decisively to limit what MSOs (Comcast?) and telcos can and cannot do with internet traffic on their networks.  This could curdle Zillion’s cream.

Potential for Tier 3 Telcos.  If Zillion were to market their content licenses and set top boxes as a “me too” VOD service to smaller telcos (as they are now indicating), they may have a shot.  It may not be sexy but it could throw some water on the burn rate of their VC cash.  It could also buy them time to build a decent size trial market to test their “customer selected advertising” business model.

Another Crowded Market: But then again, there are easier IPTV movie rental choices for Tier 3 customers to make:  Hulu, Netflix, Boxee, Amazon Unbox, etc.  But, these services bypass the ISP altogether and go directly to the consumer.  And these other contenders all have their own, proven backend billing, DRM, and streaming systems in place.  Hummm…I wonder if you can resell ‘never used’ content distribution licenses on EBay?

Keep pushing forward.

Jeff Vinson

jeff_vinson@sbcglobal.net

[Please contact Jeff directly to discuss any full time or consulting business propositions.]

3D TV Is Not a STB with a 3D UI

What BSkyB Started:  It seems all of Europe is buzzing with the hopes of seeing actual 3D content on their telly next year based on the BSkyB announcement in July that it will launch Europe’s first 3D TV channel programming in 2010.  The frenzy was further stoked by the Guardian Newspaper’s “Question of the Week” asking readers “Will 3D TV be a Hit?” So the new buzz word in the television industry must be “3D”.

Mob Mentality: Yes, 3D TV has been anointed in the press as the next killer app. Guaranteed to wipe out all other types of programming. Driving hoards of customers to their local struggling retailer, waiving fists full of cash (or debit cards) screaming for new 3D TV sets to see all of their favorite shows in 3D.

How Can STB Manufactures Take Advantage of the 3D TV Hysteria? Easy, just market a 3D Set Top Box! Never mind that format, encoding and transmission standards are still being debated by standards bodies.  What codec will be used for transmission?  What bandwidth will it require?  What QoS is acceptable?  Will they require glasses?  Shutter, Polarized or Dual Color?

Battle of the EU Trade Show Press Releases: Just in time for IFA and IBC we have company after company jumping on the 3D bandwagon.  A few examples:

Pace To Unveil New 3D Set Top Box Thursday, September 10 2009,“Pace has announced that it will showcase a new set top box with a 3D-enabled user interface (UI) at IBC 2009, which gets under way tomorrow in Amsterdam.”

SoftAtHome: World’s First End-to-End TV Solution with 3D User Interface Ready for Deployment on IP-Hybrid Networks “…It enables service providers to accelerate time to market to deliver a new TV offering with a 3D HD user interface on broadcast, IPTV or hybrid networks (DVB-S/C/T+IP)”

Bluestreak Technology Unveils New 3D Flash® User Experiences for Set-top Boxes and Mobile Devices at IBC 2009 “…today unveiled support for new 3D Flash user experiences that offer consumers visually dynamic ways to search for and discover multimedia content and web services on their television set-top boxes…”

NXP Brings Unrivalled Performance to Mainstream HD DVRs and Set-top Boxes “The NXP PNX847x/8x/9x also features an advanced Imagination Technologies POWERVR 3D graphics processing unit (GPU) to render advanced programming navigation user interfaces, games and other 3D content.”

ADB to Focus on New Technologies and Exciting 3D Applications at IPTV World Forum: “Our solution consists of a suite of applications using our open standard middleware, based on GEM technology, several hundreds of applications based on our patent pending EGG™-3D user interface.”

Broadcom BCM93740 – Advanced 3D Set-Top Box Development Platform: The Broadcom BCM93740 is an advanced set-top box development platform supporting high definition television (HDTV), dual standard definition decoding and broadband cable modem internet access. It is a highly integrated, cost-effective design built on the latest generation of Broadcom silicon and software offering low risk and quick time to market for the next generation of interactive set-top boxes.”

Just use 3D in your marketing and everyone will assume you mean decoding and playback of actual 3D TV content.

SENSIO and Sagem Win The Best 3D Marketing Hype Award at IBC: I really had to read and re-read this one to make sure I understood what was being offered.  These providers have claimed, in writing, to actually convert “any type of broadcast” into 3D playback on “any 2D or 3D TV” — and if you keep it in your barn you can spin straw into gold!

SENSIO and Sagem Communications Showcase a 3D Digital Terminal at IBC “Thanks to this integrated solution, service providers will soon be able to reach all subscribers, equipped with 3DTVs or not, via one and unique signal, regardless of the type of broadcast network. Since the set-top box is agnostic to any type of 3D display technology implemented within TVs, it can support any type of 2D or 3D TVs thus allowing service providers to easily migrate from 2D to 3D services.”

Back To Reality:  I have no doubt that 3D TV will be available in most markets within the next 5 years (the minimum sales cycle for replacement TVs).  In a time when MSOs are struggling with bandwidth usage and downgrading HDTV, it seems like there are still a few challenges standing in the way.  Marketing a new dimension in television before it is really available seems like a fool’s errand.  Is everyone too young to remember the Sony BetaMax vs. VHS battles?  Surely we have not forgotten the recent ceasefire in the Blu-ray and HD-DVD video CD format war.

These recent forays into the world of hype remind me of a quote from my former boss at OpenTV and the current Head of TV Technology at Google, Vincent Dureau:  “The killer app for television is watching TV!”

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[Jeff is currently seeking a full time position in the IPTV and Connected Home ecosystem.]

South Korea IPTV Grows with Fewer Govt Controls

In recent published reports, the South Korean Government has removed strict controls on IPTV content available for broadcast to its citizens.  The previous requirement that only Korean majority owned companies could provide IPTV content for broadcast has been eliminated.

This breath of fresh air comes at a time when the South Koreans are experiencing a surge in IPTV subscriptions.  Press releases indicate that the current total IPTV subscriber base exceeded the 700,ooo user milestone with more than 100,000 new subs in the month of August.  Current take rates are said to be growing daily and are now pegged at 7,000 per day according to an article in IPTV News.

To prevent churn, service providers (KT, SK Broadband and LG Dacom) must assure viewers that fresh content will be available once the novelity of the new delivery platform wears off.

Once again, governments are finding that putting content controls in place results in limited content availability for their citizens and can prevent the adoption and growth of new delivery technologies.  New delivery platforms must be allowed to flourish in an atmosphere where the market winners and losers are determined by the viewing public, not by government edict.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for consulting and tradeshow speaking engagements]

Verizon [VZN] Joins RVU Alliance

RVU Alliance to Promote New Remote User Interface Based on DLNA

EL SEGUNDO, Calif., Sept. 2, 2009 – The RVU Alliance announced today that Verizon will become its fifth Founding Promoter.

Verizon joins Broadcom, Cisco, DIRECTV and Samsung, in the alliance to develop a specification for a new “pixel accurate” Remote User Interface (RUI) that will form the core of the new RVU home networking technology. The objective is to make it simple and easy for consumers to connect multiple electronic devices to create powerful home entertainment systems.

“Joining the Alliance gives us the chance to help lead the industry to an ever-simpler process for integrating consumer electronics into the home entertainment experience,” said Richard Lynch, CTO of Verizon. “Verizon is working to let our customers enjoy their advanced FiOS TV experience throughout the home on any device simply and easily. When adopted by consumer electronics manufacturers, RVU will enable that vision.”

Henry Derovanessian, chairman of the RVU Alliance board of directors and vice president at DIRECTV Inc., said, “Verizon is a perfect fit within the RVU Alliance leadership, strengthening the RVU technology by ensuring it meets the needs of a larger complement of content service provider networks.”

The Alliance’s RVU technology approach, which uses DLNA as its foundation, will be to serve content via a single server in the home that then communicates via IP links with networked devices in the home. Key benefits of this client-server-based, home-network architecture include elimination of set-top boxes, resulting in reduced clutter for consumers and reduced costs for operators, and flexibility for the consumer to view television on any device on the home network while maintaining a common user-experience.

AT&T Cruisecast: 22 Live TV Channels in Your Car

AT&T for TV On The Go:  Our friends at AT&T are beating the drums louder for their in car satellite live TV service called “CruiseCast” since their nationwide US launch date on June 1, 2009.  And with the rather steep installation price of just under $1,300 their success will be a sure sign that consumer spending is up and the economy is really rebounding.

RaySat Broadcasting Leads the Charge: RaySat, a Dallas based privately held U.S. company, has been enlisted to introduce total in-car entertainment to the marketplace with the innovative AT&T CruiseCast service. RaySat capitalizes on the creation of a small, compact antenna for use on cars, trucks and SUVs that provides continual coverage on-the-go.  Unbroken video signals are accomplished using a two-minute buffer of the satellite signal to compensate for signals blocked by overpasses, buildings, trees or tunnels.

Not the Only Game In Town: AT&T are in the mix with other mobile MSOs including DirecTV’s offering using TrackVision A7 from KVH Industries and boat, RV and trailer offerings from King Controls. The DirecTV subscribers are offered more viewing choices: 185 channels vs. 22 for AT&T.  SIRIUS offers Backseat TV™ equipment for  $470 if purchased with a new Chrysler or $299.99 as an aftermarket install, providing you already have a video entertainment system in the car. With only 3 channels (are they serious?) Backseat TV™ costs $6.99 per month in addition to a SIRIUS Radio subscription totaling $19.94 per month. SIRIUS Backseat TV™ is only be available to SIRIUS Satellite Radio subscribers.

The Divided Market: As with any market, competitors are looking for the best edge to make their numbers.  It appears that DirecTV is attacking the RV and Trailer market while Sirius is focused on Chrysler factory installed systems.  Instead of (or in addition to) the RV and travel trailer market, AT&T seems be going for the families with kids who already have rear seat entertainment systems installed in their car or SUV.  With millions of vehicles on the road with simple DVD video systems already installed, this represents a sizeable live TV upgrade market to tackle.

Is a $1,299 Antenna and $28/mo Fee Too Much? If you like to take long car trips with the kids, or you’re a real road warrior logging thousands of miles, the expense could be justified.  And what about those tailgate parties?  You can get all of the pre-game hype while cooking up your burgers in the parking lot.  It may not be a product for everyone, but it certainly looks like there’s a large enough base to support one or two dominant players.

For a video of the CruiseCast service, check out my IPTV YouTube channel:  http://www.youtube.com/user/JeffVinsonIPTV

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for consulting and trade show speaking events.]

Cisco & Verizon Video Chat?

Looks like the rumors of the past 4 months are true:  Cisco and Verizon are teaming up to bring Video Chat to your living room TV.  (They’ve been collaborating for small business video solutions for the past 2 or 3 years. ) According to the SJMerc News this new CE direction is necessary because Cisco can’t sell enough of its high end Telepresence® gear to its business customers.

A New Telco Revenue Source? While I applaud Verizon for looking into new and exciting applications for their subscriber base, I wonder if this is just another video phone pipe dream?  According to Wikipedia, the idea was first conceived in 1878!  And where are all of the AT&T Picturephones® that were going to make telephones obsolete in 1974?  The Nokia N Series phones have had video chat features built in for the past few years, but the feature is inoperable in the US market.

What Will Drive The Consumer Demand? In business the desire to have a virtual face to face meeting makes sense to cut travel expenses.  Having experienced Telepresence® myself, I must admit, Cisco has done a great job to improve the overall experience.  However, the reason Cisco is said to be looking for a new market is because those business customers are not buying.  Can a market be sustained after all of the early adopters buy one (or 2) and the novelty wears thin?

The Telmex Experience: Verizon marketeers may want to visit Telmex and get some first hand data from their video phone launch in 2005.  According to Jos Otero, president of Signals Telecom Consulting:

“If you asked me if this new service [for Telmex] is going to be good in terms of marketing and positioning… I’d say yes. But if you asked me is it going to have a huge positive impact on operator revenues, I’d say no.”

Key to Success? Significant advances have been made in the availability of bandwidth and the acceptance of worldwide social connections.  Perhaps it will get some traction if it links to a 99 cent Apple iPhone® app. running on Facebook.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

Sony & Netflix Offer Streaming VOD

Netflix in Over-the-Top-TV Deal with Sony

Sony has joined the Netflix stable of device suppliers who will offer consumers a direct TV to Internet viewing experience.  In this case, its the Netflix lineup of more than 12k movies available for their subscribers viewing pleasure.  At $8.99/month, its not a bad deal.

Not the First:  But Sony is not the first, nor will it be the last to make their LAN or WiFi connected living room devices really useful.  The Microsoft X-Box 360, LG, Samsung, and Vizio TVs as well as Roku Set Top Boxes (the $99 Netflix box) have previously signed on for this streaming VOD subscriber service.

Early Market Consolidation: I believe we’re seeing the embronic stages of a market consolidation for living room devices.  Consumers have been befuddled by the number of internet connection devices and their unique functions.  Do I need a special box to browse the Net on my TV?  Can I stream internet content directly from my PC.  I have a game player already hooked up to my TV and my broadband service, what else can I see on my TV from the net?

Keep it Simple: The key to consumer acceptance (and increased sales) may be to keep the conversation simple.  When Polaroid introduced a prototype “Connected TV” at CES in 2008, it had a vast array of capabilities built in; EPG, DLNA picture – mp3 -video display, Parental Controls, Internet Browser, and on, and on.  To their credit they only wanted to show one use case:  Pause Live TV.

Retailers Need a Simple Story: If a consumer is ready to purchase a new LCD TV, just having one unique (and easy to explain) feature, Pause Live TV, could clinch the sale.  Unfortunately, Polaroid’s fortunes were decided by events not tied to their marketing prowess.

Show the Difference: Differentiation of consumer entertainment experiences will get the early adoptors’ attention (and cash).  If successful, these will become the standard and ‘must have’ features of these device classes.

Netflix might want to take a bit more time preparing their ‘prepared statement’:  “…blah, blah, blah,… new and exciting ways for Netflix members to instantly watch movies and TV episodes in their living rooms on their TV’s.” WOW with Netflix I can now watch TV on a TV!  Who writes this stuff?

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

Netflix Sale to Microsoft – Not Today

Rumors on the net in the last few days suggest that Netflix is dusting off the “For Sale” sign and getting ready to move to Redmond.

WHY SELL ?: Why would Reed Hastings consider selling Netflix to Microsoft?  He’s already on the Microsoft Board of Directors and has created a very successful company which is now utilizing IPTV technology to cut mailing costs and provide that ‘instant video fix’ for its growing base of more than 10 million subs.

Sales of successful companies are driven by founders who are ready to say “enough” and cash in to start another dream.  Most are either sold or go public within the first five years to repay the initial VC investors.  Netflix has already rewarded its initial investors with a stock price which keeps on climbing.  So now, it would only be for a deal so sweet that only a fool would say no.

WHAT ABOUT THE MAJOR SHARE HOLDERS ?:  And why would the institutional and mutual fund investors who control 97% of the stock want to sell a rising stock in a great technology sector?  Where would they find a replacement?  Would they trade for MSFT shares?

WHAT PREMIUM COULD IT COMMAND?:  In today’s rough and tumble economy, would there be enough cash available for someone (even MSFT) to pony up 20 or 30% premium over their existing market cap of about $2.5 Billion?  Yes, MSFT is sitting on a HUGE vault of cash (about 10 x Netflix market cap) but a deal must make sense to both parties.  I hardly think a hostile takeover would even be considered.

CONFERENCE CALL: The Netflix conference call on July 23rd should put the rumors to rest.  My bet is they will show continued growth in subscribers, revenue and profits.  And, Reed will announce, at least for now, they are not for sale.

Netflix EU ?: I think the next big news from Netflix will be to take advantage of their IPTV delivery system for an international offering.  Perhaps with the BBC, another leader in online video.  BBC programming would be available for consumption to existing Netflix subs and the BBC could get a rev share from new UK Netflix subscribers.  A gambit into a new market would make sense for a company who’s Board of Directors includes representatives from 5 VC firms.

I could be dead wrong, but my tea leaves do not predict the creation of ‘MicroFlix”

Keep pushing forward

Jeff Vinson
jeff_vinson@sbcglobal.net

Roku and Ustream.TV Cashin’ In on OTT Video

The Money Machine is Working for the Over The Top Video Market

Press stories based on SEC filings show that two of the premier OTT providers have turned on their money magnets:  Roku has raised at least $24 million over four financing rounds, including a $6 million investment from Netflix (NSDQ: NFLX) according to Paid Content.Org. In the meantime, Ustream.TV pulled in another $2M for their live streaming service.  Not bad when times are still considered tight.

Takin’ the Net to the TV: Roku will also offer Major League Baseball’s  MLB.TV streaming service with live and on-demand games through the $99 Roku Player.   The MLB service starts at $34.95 for the whole year.  What a bargain! With Amazon Unbox and Netflix movies and TV shows already in it’s partnership stable, Roku is poised to really set the OTT market on fire.

Ustream.TV Coming On Strong:  Pulling in another round of venture funding is just one of the recent accomplishments for this UGC (User Generated Content) streaming service.  Besides their extensive lineup of YouTube puppy channels and the latest stupid human tricks, they also offer an extensive array of professionally produced live entertainment and political events on the web.

Watershed is the private label version of Ustream.TV’s flash-based live, interactive webcasting product.  Its geared toward those who want to create a semi-pro or very professional web video presence on the net.  Channel hosting services with a ‘pay-as-you-go” option allow newbies to test the waters before making a major monthly cash commitment.  Channel costs increase as viewer hours and recorded storage space is increased.

How to Monetize Video on the Net: Both of these small start-ups are showing the big boys how to make money by presenting video on the net with either a service or simple broadband to TV box.  Perhaps Anthony Wood at Roku and John Ham at Ustream.TV should get together.  Ustream.TV on a Roku box seems like a great idea.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for Consulting or Trade Show speaking engagements]

TellyTopia Launches 2nd Digital UGC TV Channel.

No New Set Top Box Required for This Silicon Valley Service.

i2TV Broadcasts UGC on TV Channels:  If you’re serious about getting a local audience to see your latest video creation, why not upload it to a TV station and have it broadcast for everyone to see on their TV?  i2TV is TellyTopia’s viewer video upload platform which allows the next Spielberg or Tarantino to showcase their video productions on a broadcast TV channel not just on YouTube.

Everybody Gets Paid! Once again, this is not a philanthropic endeavor.  TellyTopia’s server engine supports banner ads which appear under the videos at 30 second intervals.  What makes this different from most ad based UGC programs is the money split:  some for the broadcaster, some for TellyTopia and some for the PRODUCER!  So now there’s  a business model for those film students, soccer moms and semi-pro video studios.   Advertisers are getting actual TV exposure for a local audience at a rate of $300 – $500/month – which is far below what the big networks cost.

Silicon Valley is the Second TellyTopia Launch: : After successfully launching i2TV on Sacramento Telco SureWest’s IPTV service in December 2008, TellyTopia launched their “Make Me A TV Star” service on a free ATSC digital channel KAXT 22.8 in the San Francisco Bay Area on August 1, 2009.  New TV moguls simply upload their finished products to the website which reviews it for suitability and puts it into a broadcast loop.  The author is sent an email with a time window of when their program will be broadcast.  Authors can then post a tweet or announcement on Facebook to let their friends know when to watch.

Local Youth Sports on TV:  In April 2009, SureWest extended the i2TV network with a focus on local youth sports.  On channel 702, which can be viewed by any SureWest subscriber, young athletes and parents can watch game highlights on their TVs and online.  “Sacramento residents have been demanding a show like this due to the enthusiasm surrounding youth and high school sports,” said Peter Drozdoff, SureWest’s VP of Marketing. Instead of just sponsoring the local soccer team with an ad on the backs of their shirts, the local pizza parlor (or car dealer or bank or car wash) can put an ad banner on the video highlights of their team’s greatest games.

Shaking Up the Status Quo: According to Dr. Ram Srinivasan, VP of TellyTopia, they have a library of 50,000 videos from 5,000 content producers ready for broadcast.  Whether or not this is enough content or the right mix to ensure TellyTopia will be successful is not for me to predict.  What I like about their approach is that once again, small players are taking risks and creating new entertainment consumption models.  Their enthusiasm and creativity is just what the television industry needs to stay fresh, current and viable.

Keep pushing forward

Jeff Vinson

jeff_vinson@sbcglobal.net

[You may contact Jeff directly for consulting and trade show speaking events.]