May 14, 2007
Volume 17, Issue 9
CBS & Viacom Give Joost $45 Million Boost
Excerpted from E-Commerce Times Report by Chris Maxcer
Joost, a peer-to-peer television (P2PTV) service that promises high-quality streaming of licensed TV content, got a big hand Thursday from industry heavyweights CBS and Viacom. The two companies, along with three venture capital firms, invested a collective US $45 million in Joost.
Joost, which is still in its beta phase, says the funds are earmarked to accelerate product development, global expansion, localization, and service offerings.
Janus Friis and Niklas Zennstrom founded Joost in January 2006. The two previously co-founded the peer-to-peer (P2P) music file-sharing network Kazaa and the Skype P2P Internet telephony network. Skype was bought by eBay for a cool $2.6 billion.
Joost started out with a handful of people outside Amsterdam but has grown to more than 100 engineers, web experts, and media visionaries in Europe and North America. The company is currently serving up content free to a growing number of beta users.
The company is working out mass communication delivery logistics.
"As you might have discovered already, we’re having some problems with the central servers in Luxembourg," Joost CEO Fredrik de Wahl recently noted on the Joost Blog. "We’ve been flooded with demand, which is fabulous and ultimately will make the system stronger, but since it’s unaccustomed to this level of usage, it’s stumbling a bit, whereas we’d like it to be sprinting."
Joost will be advertiser-supported and free-to-users, with the goal to stream copyright-protected content in both long and short form. While Google’s YouTube lets users post their own content and promises to quickly remove copyrighted videos, Joost will obtain permission to all the videos, television shows, and movies it will host; hence, no copyright hassles.
In March, NBC and News Corp. announced their own online video portal, which is yet-to-be delivered.
Index Ventures, Sequoia Capital, Li Ka Shing Foundation, CBS, and Viacom all participated in this round of funding. As previously announced by Joost, CBS and Viacom are also content partners and will provide television shows and movies for Internet viewing via Joost.
"This funding represents a tremendous vote of confidence in Joost’s platform," said Friis. "We’ve carefully selected these investors from a variety of interested parties, as they are best-in-class in their respective arenas and bring unique assets to Joost that will enable us to significantly accelerate growth and development of the company."
Viacom’s Paramount Pictures will provide full-length feature films from its catalog of classics and recent releases, which would include "Mission: Impossible," "How to Lose a Guy in 10 Days," "The SpongeBob SquarePants Movie," "World Trade Center," and many more, including the upcoming "Shrek the Third." While details on delivery dates and how the library will be offered via Joost are not yet available, Joost may become the first major provider to offer advertising-supported "free" feature-length movies.
The Joost investment by Viacom brings up the question of whether the company will continue to offer its content at competing sites online.
"We can and will be on every other website and platform that makes sense for us," Jeremy Zweig, a Viacom spokesperson, told the E-Commerce Times. "So we’ll stay on iTunes – we’ll be everywhere that we’ve been before."
While advertising is the dominant way that television content is paid for – and will likely remain the dominant method no matter how it’s delivered – Joost is fighting for the pole position in the race to establish the ad-supported web video portal of the future, James McQuivey, an analyst and Vice President of Research for Forrester Research, told the E-Commerce Times.
"While Joost has been busily working on the technology to make its vision real, content partners have shifted from selective distribution of their content to what NBC and News Corp. have called ‘ubiquitous distribution,’ meaning that whatever is available on Joost will surely be available elsewhere, making it harder to acquire customers with promises of exclusive content," McQuivey explained.
"Meanwhile, the cable companies see Joost’s long-term aspirations as conflicting with their hold on millions of TVs and will do their best to package and deliver at least as compelling a video package as Joost can."
DCINFO Editor’s Note: Joost and Paramount Pictures will have featured speakers at P2P MEDIA SUMMIT LA.
Report from CEO Marty Lafferty
 We are very pleased to announce participating companies and sponsors of the upcoming P2P MEDIA SUMMIT LA.
This second annual DCIA Los Angeles Conference & Exposition is being held in conjunction with Digital Hollywood Spring, and is scheduled for June 11th–14th in Santa Monica CA.
Our will focus be on P2PTV, the industry’s newest high-growth phenomenon.
P2PTV refers to video distribution on the Internet using P2P technologies.Many DCIA Member companies now offer solutions to help content rights holders, ISPs, client applications, and other participants in this rapidly emerging distribution channel, accomplish this at astonishingly low costs and with astoundingly high quality of service (QoS).
Our keynotes include senior executives from Babelgum, BitTorrent, INTENT MediaWorks, Joost, Pando, Raketu, QTRAX, Swapper, and VeriSign.
A highlight of this summit will be its closing "DRM Interoperability" session. Representatives of BUYDRM, Coral, Digimarc, Entriq, and the Motion Picture Association of America (MPAA) will discuss the next frontier – business practices and open standards. What are consumers seeking in terms of DRM interoperability? What different models are envisioned to achieve DRM interoperability, and what industry efforts should go on in this space? How can participants in the P2P distribution channel contribute?
P2P MEDIA SUMMIT LA sponsors include FTI Consulting , INTENT MediaWorks, Altnet, Nettwerk Music Group, and Javien Digital Payment Solutions.
For more information, please visit www.dcia.info/P2PMSLA2007. Early registration rates, which save attendees up to $250, end June 1st. To register, please visit www.dcia.info/P2PMSLA2007/register.html.
The Monday June 11th Conference features keynotes from top P2P software distributors, panels of industry leaders, award presentations, and valuable workshops. There will be a continental breakfast, luncheon, and networking cocktail reception with live entertainment.
Our Conference Luncheon Speaker and other special sessions, including a presentation from AT&T, will be announced shortly.
The June 12th-14th Exposition is being held in conjunction with Digital Hollywood Spring, and registration for the full DCIA Conference & Exposition includes that event as well.
The Policy Track will feature representatives of Dreier, MasurLaw, the MPAA, the Recording Industry Association of America (RIAA), and Vandenberg & Felieu, and will address the post MGM v. Grokster world – new rules for P2P.
The Technology Track will feature representatives of Abacast, BigChampagne, CacheLogic, PeerApp, and Podzinger, and will address P2P file sharing – the evolving distribution chain.
The Marketing Track will feature representatives of Javien, MediaDefender, SafeNet, Skyrider, and Ultramercial, and will address P2P business models – what’s working and what’s not.
The Content Distribution panel will feature representatives of MediaPass Network, Nettwerk Music Group, The Orchard, Paramount Pictures, and Revver and will address the perspective of media producers and rights holders – P2P for content providers.
The Solutions Development showcase will feature representatives of Digital Containers, RawFlow, and Unlimited Media and will address advancement – creating the commercial P2P ecosystem.
Our live entertainer for the post-conference networking cocktail reception, courtesy of Nettwerk Music Group, will be Shotgun Honeymoon.
Registration can be done either by calling 410-476-7965 or by registering online at www.dcia.info/P2PMSLA2007/register.html. For sponsor packages and speaker information, please contact Karen Kaplowitz, DCIA Member Services, at 888-890-4240 or karen@dcia.info. Share wisely, and take care.
A Roadmap for DRM
Dr. Andrew Currah has recently authored a report for Strategy Analytics on the subject of digital rights management (DRM), which brings together material from his discussions with executives across the media, entertainment, and consumer electronics industries – including the DCIA and representatives of DCIA Member companies.
This report charts a road map for DRM technologies. Extensive research in the music and video spaces indicates that DRM will increasingly undergo a process of recalibration rather than abandonment or perfection.
In a balanced and interoperable form, DRM will provide the technological architecture for new business development in the "digital ecosystem."
The road ahead will foster new services for consumers and new revenues for creators and investors. Ultimately, DRM is needed to harness the commercial value of the "rip, mix, burn, and share" culture.
Please click here to download "A Roadmap for DRM: Business Impact for Content Owners and Technology Vendors."
Babelgum: A Joost Competitor
Excerpted from Business 2.0 Report
Joost is not the only P2P, full-screen, Internet TV platform that is about to launch. Another European startup called Babelgum is working on the same concept, and is getting ready to open up its beta on May 31st.
Today, there are 4,000 active users in a closed beta, and 15,000 more on a waiting list. Since Babelgum is basically offering free TV from AP, Reuters, the BBC, the music labels, and shorts from Spike Lee, those numbers should expand rapidly once the service opens up this summer.
Babelgum is founded and backed by Italian billionaire Silvio Scaglia, who recently sold his Italian ISP Fastweb for $5 billion to Swisscom (the deal was just approved by the European Commission this week).
Fastweb is a triple-play ISP in Italy that delivers broadband Internet, phone, and IPTV over fiber-optic lines. With AT&T and other telcos getting into the IPTV business, it occurred to Scaglia that he could avoid the costly build-out that requires (laying fiber to the home, installing new set-top boxes, etc.) by using existing Internet connections and P2P delivery.
Using a hybrid of P2P and Internet server technologies, Babelgum says it can deliver long-form video over the web at TV-quality. "The browser was never designed to do this," says CEO Erik Lumer, who is making the media rounds in the US.
It’s clear that he is gunning after the current TV industry more than he is worried about Joost: "The set-top box is a useless monster. Eventually you will just connect your PC to the TV set."
The Skype founders behind Joost have the same idea, and they are further along with five-hundred thousand beta users, much more hype, and much more money having just raised $45 million from the likes of CBS, Viacom, Sequoia, and Index Ventures. Joost is making a more concerted effort to attract mainstream TV content, while Babelgum is sticking to more niche-oriented fare for now.
In the end, whoever can gather the best content and the biggest audience will win. While there may be room for more than one P2PTV platform appealing to different audience segments, there isn’t room for more than three or four. Network effects will create a gorilla in this space rather quickly.
Babelgum started in July 2005.Lumer wasn’t surprised that the Skype guys were onto the same idea, but he was surprised by how both groups independently arrived at a very similar interface: "The thing that was striking, when I first saw screen shots, is how similar it was in terms of basics. Different groups converge on the same premise. But we haven’t changed anything. In our view this is the start of a new market, and it is a long journey."
For more on Babelgum, check out CNN Money’s video interview.
DCINFO Editor’s Note: Babelgum CEO Erik Lumer will keynote at P2P MEDIA SUMMIT LA.
A Diet of Continuous Images and Chat
Excerpted from NY Times Report by Louise Story
In the short history of the Internet, most online videos have been funny, fleeting clips lasting only a few minutes – sometimes just seconds. Websites like YouTube and MySpace are populated with bite-size videos that the youngster down the street whipped up in his spare time. And media companies like Viacom and NBC have posted abridged versions of popular shows on their websites.
But the future of online television may lie with longer programs, the kind that merit curling up on your couch rather than watching from your office chair. Most video viewing, after all, is still on television sets, and many people turn them on for hours at a time. In contrast, Nielsen Net/Ratings finds that consumers visit YouTube on average for only 11.5 minutes at a time.
With this in mind, my husband and I logged on to two new services last week that portray themselves as the future of television – they stream long-form content mimicking television, but they also let viewers use their computers while watching.
We wanted to see how long we could stay interested in TV online – how long it could keep us from turning on our BlackBerrys, our other laptop, or regular television. To give the services a fighting chance, we plugged our computer into the overhead projector that normally connects to our cable box, dimmed our lights, and poured some drinks.
We visited Joost, founded by the team that first created Kazaa, a P2P music network, and then introduced Skype, an Internet phone service now owned by eBay.
Joost has been available in trial form to a small group of web users for a few months, as has Babelgum, a service backed by the Italian telecommunications magnate Silvio Scaglia. It will open its doors in a broader test run for consumers on May 31st.
Both services require a quick download to get started and a continuous Internet connection. Babelgum runs on the QuickTime program, which can also be downloaded free. Babelgum will be available only for PCs at first, but by the end of the summer, a product is planned for Macs.
The main difference between these services and YouTube is the nature of the content: it is full-length and professionally edited. Like YouTube, the content is free. Yet, as we all know, nothing is ever really free. Joost required me to register my age, gender, and other details, and both services say they will monitor your viewing patterns. Joost says it does this so it can produce "personalized television supported by advertisements that are most likely to interest you."
In the advertising industry, services that ask for user data upfront are a treasure trove for companies that want their brands pitched to just the right people at just the right time. Joost has already signed up more than 30 major advertisers, including Microsoft, Unilever, and United Airlines.
Within a few minutes of logging on to Joost, Motorola, Hewlett-Packard, and Kraft all zapped ads at us. Babelgum will not have ads until later in the year and is planning to make its ads skippable during the trial period – an option that consumers will appreciate, but advertisers will begrudge.
Joost’s interface is flashy – colorful globs float by, converting the screen into the equivalent of a giant lava lamp. Babelgum has a more streamlined look, with black screens framing programs as they load. Babelgum viewers will be able to rate shows they watch, and sign up for "smart channels" that recommend programs based on past viewing. Joost has more gadgets to play with for now, including TiVo-like controls to pause and fast-forward while you watch, but finding them can be confusing until you are accustomed to the system.
Joost features programs from television brands like Comedy Central, National Geographic, Adult Swim, and Sports Illustrated (yes, there is a swimsuit channel).
Babelgum is staking out its turf with television programming that is popular overseas – BBC documentaries and sports events sponsored by Red Bull are two examples – and niche content made by independent producers in the United States.
As we watch the Guinness World Records TV channel on Joost, my husband pulls up his favorite technology site alongside Joost. Soon, he pulls out his laptop, too, and turns on the regular television.
Time passes – and I reach for my BlackBerry to check e-mail. But wait. Joost and Babelgum have solutions for the multi-tasker generation. Even as they mimic television, these services incorporate the social networking and communication tools of cyberspace. Television programs on Joost are played in windows overlaid with screens that allow the communication addict in us to IM our friends within Joost.
Salvation. I send my friend Aaron an e-mail invitation to join Joost.
We meet in the Live@Much channel. There are 19 programs here — all interviews with musicians. First we watch Beyoncé, then Nelly Furtado, then John Mayer. Aaron tells me what he is switching to as he clicks through (we spend about an hour doing this but I’m sparing you from a full transcription).
Babelgum plans to introduce a chat tool this summer.
If you are below a certain age, your eyes can’t resist shifting from screen to screen on multiple devices. By the time we turned off Joost and Babelgum last week, we also had turned on our regular television, two laptops, and BlackBerrys.
Traditional television is competing with newer technologies for our attention, even while we watch, because TV is a one-way medium. Our experience with Joost and Babelgum made us think that the services should add more television-like content to expand the range of people who might watch.
They also should probably stick to their strengths as television services where consumers can multi-task while watching. At least for me, they have the potential to refocus my attention in the living room on fewer screens – maybe even (perish the thought) just one.
Selfcast to Democratize P2PTV
Selfcast, developed by RawFlow, is a new portal for live TV and radio streaming that is set to launch in its beta version this month. The portal will focus on live user-generated content (UGC) and be FREE for ALL to use. This will revolutionize online broadcasting as we know it: all you will need is a webcam to set up your own live TV channel!
Selfcast will also feature professionally produced content to attract wider usage. Broadcasters of live content on the Internet will be invited to showcase their channels for the launch of Selfcast at no cost whatsoever.
Content providers keep the copyright to their content, and feed Selfcast with a link to their broadcasts. Their content can then be accessed from selfcast.com and appear in personally branded web pages with information about the channels and links back to the broadcasters’ sites.
There is no requirement for broadcasters to do anything other then give RawFlow permission to showcase their content. All production work will be undertaken by RawFlow, Selfcast’s developer.
Prior to publishing a channel on Selfcast, RawFlow will provide the opportunity to check the content and request amendments, and if the rights holder decides to withdraw its consent at anytime, RawFlow will simply not publish its channel page. Selfcast.com is not live yet, but you can see a preview here of a broadcaster page (for visualization purposes only – note that page features are not enabled). Selfcast’s launch date is fast approaching, so interested parties should respond as soon as possible. All you need do to sign up for a free featured broadcast on selfcast.com is to fill out this form: www.rawflow.com/selfcast/pro_trial.
The Selfcast.com site is now being tested internally and will be available to the public soon. RawFlow will send links to participating broadcaster micro-sites and log in details within a few days of receiving their details.
Long live freedom to broadcast!
RawFlow will have a featured speaker at P2P MEDIA SUMMIT LA.
Transfer & Share: Hands-On with Pando
Excerpted from Appscout Report by Alan Henry
P2P file sharing is a method to spread-out file transfers over several people’s bandwidth by downloading bits of the same files from multiple computers, or using other people’s bandwidth to send-and-receive files. Several technologies are now bringing P2P file sharing mainstream.
Pando is one of these services, using P2P technology to do things like download audio and video podcasts, IPTV shows, MP3s, and RSS feeds. Pando also lets users send files to their friends via e-mail, web-mail, or instant message (IM).
Pando supports both Windows and Mac OS, and the client itself is free to download. As for web-mail services or IM clients, Pando currently supports Yahoo! Mail and Messenger, MSN Hotmail, AOL Mail, GMail, Microsoft Outlook, and Skype. Support for AIM, GTalk, MSN Messenger, and more may also be on the way, since their e-mail platforms are supported.
Once you have the Pando client installed, you can immediately begin receiving files that another Pando user may have sent you, or immediately begin sending files to friends and family using the Pando network. If you receive an e-mail with a .pando file extension, the Pando client will immediately associate the file extension and begin downloading it. You’ll see a roster of files you’ve downloaded in the Pando client.
When you’re ready to send files, Pando gives you a wizard to provide the recipient’s e-mail address and add the files you’d like to send. Customize the message your friends receive when you send them the files, and away they go.
Pando free accounts have a file size limit of 1GB, which beats most standard e-mail and web-mail services. Paid members get up to 50GB file transfers, depending on the subscription level. Where free members can only download their e-mail or IM package for 7 days and e-mail packages for 30 days, subscribers get longer file retention, with the highest level offering unlimited retention, encrypted, or password-protected file postings, tech support, and the removal of banner ads at the bottom of the Pando client. Subscription accounts range from $40 per year all the way up to $420 per year.
When you’ve sent your message to a friend or family member, the cycle starts again: your recipients get an e-mail with a link in it to download a .pando file. If they don’t have the Pando client, they’re instructed to download it so they can receive it, and the Pando network gains additional users. If you’re more interested in posting a file on your website, you can post to the web, and the Pando client will generate a widget that you can add to your website, or paste into a supported IM client. The widget will give viewers a link to download your file, display whether or not it’s currently being shared, how long the file has been available, and how large the file is.
It’s this widget-making ability for the web and IM that is one of Pando’s strongest suits. Being able to e-mail files is no big deal, and while being able to give people automatic hosting for large files like videos and audio clips without worrying about their e-mail storage quotas is a great feature, other services already do this.
What’s truly innovative about Pando’s take on social downloading and P2P file sharing is that it’s making a point to make files easily accessible over the web, and bring P2P out of the shadows with a free, easy-to-use client. Using Pando’s widget-creation feature, musicians can add songs to their websites or e-mail them to their fans without paying for lots of bandwidth. DJs can send mixes to their audiences or post them to their websites, and family members can share batches of photos without worrying about overloading someone’s in-box.
Pando’s features don’t stop with transferring large files among friends. Pando also comes with a plug-in for iTunes that will allow you to subscribe to Pando-specific content like video downloads from NBC and MTV, and subscribe to video podcasts like Tiki Bar TV, Rocketboom, and the Onion News Network. When you use Pando to subscribe to your favorite video podcasts and media, they’re downloaded through the Pando P2P network instead of draining the bandwidth on your regular Internet connection.
Pando does a lot, and does it all well. By bringing podcasts and video to Pando and giving users the power to choose what files are moved over the Pando network and how they’re transferred among friends and family, the folks behind Pando have given users a powerful yet easy-to-use method to move large files among individuals without having to set up servers, find web storage, send large attachments, or physically exchange drives or media.
Vudu Service Uses Private P2P Net
Excerpted from Video Business Report by Jennifer Netherby
A week after P2PTV upstart Vudu said it will make 5,000 major studio movies available this summer, more details have become available about the set-top box it says offers instantaneous playback.
Vudu said last week that it had inked download deals with every major studio but Sony Pictures to offer new release and catalog films. Vudu service will be offered through a proprietary set-top box that movies are streamed to for instantaneous viewing.
Vudu is keeping mum on where those boxes will be sold and at what price.
Vudu operates as a P2P service. In a P2P network, movies or other large files are downloaded from a number of fellow P2P users with a computer connected to the Internet that already have the file on their computers. This means that files can be sent faster than those downloaded from one central server.
On Vudu’s service, files will be transferred across a private P2PTV network. Vudu will send bits of files of popular movies to different users’ Vudu boxes. When a user clicks to watch a movie, the file is then sent from those other Vudu boxes. Since the files are sent between Vudu boxes only, the company says they can provide better copy-protection and ensure a file is sent with the pieces in order so that the user can watch right away.
"We are fundamentally aligned with the interests of the studios in terms of protecting the content," VP of marketing Patrick Cosson said. "We’re providing a lot of access to consumers so that we remove the moral justification for copyright infringement."
Movies are streamed, though some can be downloaded and saved on the box for future viewing. Only movies downloaded from Vudu will play on the Vudu box.
Films will be transferred in DVD quality and up-converted by Vudu boxes to high-definition (HD), similar to the way an up-converting DVD player works.
Cosson said the box also allows for easy navigation. A user could do a search for a favorite actor to find his filmography and choose a film to watch from the list. When users click on a film, it also gives the option of pulling up similar films.
The company is the latest to bridge the gap between the computer and the TV, something many in the industry view as the key to developing the download business.
It faces big-name competitors. Microsoft, Amazon, and Apple all recently launched new ways to deliver downloads to the TV. And MovieBeam and Akimbo have offered downloads on their own proprietary set-top boxes.
But Vudu believes its movie selection, instantaneous viewing, and navigational features will set it apart, said Cosson.
Vudu doesn’t expect to replace DVDs, but sees itself as an additional piece of the movie-watching puzzle, where people rent some movies at the video store, buy other DVDs, and download others.
Vudu is now beta-testing its boxes and preparing for its summer launch. The company plans to offer movie rentals and downloads but isn’t saying how it plans to price movies or whether it will offer a subscription service.
Roo Group Raises $25 Million
Excerpted from Digital Media Wire Report by Mark Heflinger
ROO Group, a provider of online video distribution services, announced that it has raised $25 million in new financing through a private placement of its shares, with mostly existing investors.
New York-based ROO Group provides video distribution services for content providers, advertisers, and websites. Customers include Verizon, Excite, and MTVu in the US, and the UK newspapers The Sun, The Times, and The Mirror. The company will use the proceeds to fund ongoing operations, pursue previously announced acquisitions, including P2P service Peer Impact, further develop its video platform, and expand sales and marketing resources.
AT&T to Pump $1.4 Billion into IPTV
Excerpted from Smart Brief Report by Andrew Wallenstein
AT&T is raising its bet on TV by more than $1 billion.
The telco giant has revised the estimated expenditure for its IPTV offering known as U-Verse for this year and 2008, according to a 10-Q filed Friday. In addition, the target subscriber base has been set at 18 million homes.
The latest estimate envisions AT&T dishing out $4.5 billion over the next two years, which amounts to a $1.4 billion increase over the original cost projection.
AT&T has reported 20,000 U-Verse subscribers to date, a drop in the bucket compared with the cable industry’s sizable advantage in the multi-channel category. Meanwhile Verizon Communications’ FiOS TV service added 141,000 net new subscribers in the first quarter to end it with 348,000, according to the company. It also recently reported that the number of net additions per business day has risen compared with the fourth quarter.
In addition, cable executives indirectly gave Verizon shares a boost when they signaled that their subscriber growth momentum and especially their user churn, or customer turnover, has been somewhat affected by the competition from FiOS. Cablevision Systems COO Tom Rutledge said in a quarterly earnings call that he believes his company’s churn has been impacted by FiOS. Similarly, Comcast COO Stephen Burke said at his company’s analyst and investor day that some of his firm’s customers seem to have moved to FiOS.
Some analysts took these comments as a sign that Verizon is making more inroads against cable operators than AT&T and that its big infrastructure investment is starting to pay off.
Verizon has estimated it will have to spend $18 billion between 2004 and 2010 to roll out the fiber network needed for FiOS.
IPTV Lessons from China
Excerpted from Telephony Online Report by Carol Wilson
On the surface – and even several layers down – there appears to be very little about the Chinese IPTV market that applies to the US.
After all, the Chinese companies that are delivering IPTV are all government-owned, including the two China telecom operators, China Netcom in the North and China Telecom in the South, and the IPTV licensees, led by the first national IPTV license holder, Shanghai Media Group (SMG).
Although it isn’t entirely clear what government subsidies might be flowing through the operators, the fact that the Chinese government is backing their IPTV initiative takes away some of the profit pressures that US operators face. Both China Netcom and China Telecom are able to operate their services with average revenue per user (ARPU) of less than $10 a month, something a US operator could not do.
"The basic motivations are really different," said Steven Hawley, senior IPTV analyst with Multimedia Research Group. "We assume there is a profit motive and there are a lot of content competitors who make money off content. In China, everything is state sponsored and locally produced.
The ARPU is in single digits even for a full range of services. There is not a lot of money to be made in that market. From a revenue perspective, the two markets are very different."
"The government has said they want to be world leaders, and they are willing to fund it," said Danny Briere, President of the TeleChoice consultancy.
Just as importantly, Hawley added, the structure of the Chinese IPTV market is also different. In China, as in countries such as the UK and France, the telecom network operators aren’t allowed to own content and bundle it with their network operations as US cable companies and now telecom companies do.
"Unbundled local loops are off the table in the US," he said. "If someone wants to compete, they have to build their own or partner with the cable company, which isn’t happening. This approach has really hamstrung the US market. If you look at a market like France, where there are seven or eight companies, all using France Telecom’s infrastructure, there is much more IPTV available."
The Chinese operators also are delivering service in a market starved for content, where there is no satellite service and cable TV is provided by thousands of small cable operators, many municipally owned, and none approaching the kind of service taken for granted by cable consumers in the US. Where US service providers have to deliver a more robust video product from the outset, the Chinese can get started with a more modest video offering and still look better than the existing service.
"Competition adds another level of cost to the product," Briere said. "The competition is much stiffer in the US and it creates some table stakes the Chinese don’t have."
Content licensing and control issues are also different in China. Both the China Netcom and the China Telecom offerings are delivered over an integrated infrastructure, and feature network-based digital video recording capabilities, which are not legal in the US following the March court decision against Cablevision, in a lawsuit brought by a group of content providers.
By delivering network-based DVR services, UTStarcom’s RollingStream broadband TV and video-on-demand system enables the Chinese to deploy set-top boxes that require less storage and are much less expensive than the high-end set-top boxes that are part of Uverse, FiOS, and other US offerings.
"All of us technology-oriented people like the idea of using complicated consumer devices for TV," Hawley said. "UTStarcom is out there with a $15 to $20 set-top box – in some parts of the world, that’s expensive, but here it’s almost a giveaway. They are being pushed by markets that don’t tolerate expensive consumer premise equipment (CPE), and that could really change the equation in the US. IPTV is imminently possible and quite acceptable if you are willing to forego some fancy services."
"They don’t see themselves as sacrificing storage on a local drive because they don’t have the copyright laws that prevent them from doing things in the network," Briere added.
But perhaps the greatest difference between the way the Chinese view IPTV and the way the service is being viewed in the US is more fundamental. In China, it’s the Internet part of IPTV that may have the most impact, not the video entertainment piece.
"For them, it’s more about interactivity," said Brian Caskey, Vice President of Worldwide Marketing for UTStarcom. "They want to click on the TV to vote in a reality show. They are looking at this as a new means of communication. And for some households, the TV absolutely becomes the way they will surf the Internet. We think that television will drive broadband growth and subsequently Internet access."
Ownership of personal computers is much lower in China and in nearby countries such as India, so IPTV can represent a means of access to Internet-based information and social networking services. SMG is already offering a service to consumers who want to upload their own video content, said Minnie Huang, CTO of BesTV, the IPTV joint venture of SMG and China Telecom.
"We call it Personal TV – you have your own space for your pictures and user up-loaded content," she said. "We screen out content that is not healthy, but the other user content is loaded, and everyone can see it. You can then rate the content by giving it stars. Eventually, the set-top box will have a USB port and you will upload the content from there."
BesTV also is working with local banks to develop a bill-paying service and is prototyping a service that lets investors in the red-hot Chinese stock market track their stock portfolios. With health care a major concern in the country, BesTV is also working on a service that would allow consumers to get health-care advice and to make doctors’ appointments.
"China is probably one of the few countries, if not the only country, in the world where TV is not the killer app," Briere said. "With censorship, the paucity of Hollywood content that is allowed, their content is more staid. So they are putting a much greater emphasis on next-generation applications, and in those applications, they are probably in advance of the rest of the world."
Under the terms of the partnership with their IPTV license-holder, SMG, both China Telecom and China Netcom can develop their own value-added services such as personal videoconferencing. Within its Hangzhou facility, UTStarcom is developing videophones and IP cameras that can be offered as separate devices or integrated into the service to deliver a person-to-person video service. It is also developing a telephone handset that can work as the remote control for the set-top box.
"They had things over there I haven’t seen over here, like the telephone remote control and videophone calling," Briere said. "I think we can learn a lot. We have gotten into this mode where the Asian companies are doing a lot of neat stuff first – wireless, WiBRO, and now the IPTV next-gen apps are interesting to watch in China."
Briere believes having an integrated end-to-end IPTV system that is built to scale has enabled the Chinese to more rapidly roll out their service.
"That’s been one of the major challenges in the US, the integration of all the pieces of the technology," he said. "That’s been the challenge for AT&T and its major vendors, Alcatel-Lucent, and Microsoft, and it’s been the challenge for smaller telcos as well. Eighty percent of the problems have been involved in end-to-end integration."
But it’s uncertain US companies would adopt the Chinese approach.
"I would think some smaller telcos would be interested in what UTStarcom and the Chinese are doing," Hawley said.
To date, UTStarcom hasn’t been focused on the US market, primarily because it sees such great opportunities elsewhere, including in China, India, and Latin America, Caskey said, but the company isn’t closing the door on the US.
Cisco Quarterly Earnings Soar 34%
Excerpted from NY Times Report by Laurie Flynn
Cisco Systems, the network equipment maker, reported a 34 percent gain in quarterly profit on Tuesday that it attributed to strong demand for high-speed networking, particularly in international markets.
The company sells routers, switches, and other network equipment to telecommunications businesses and large corporations. Cisco reported profit of $1.87 billion, or 30 cents a share, for the third quarter, which ended April 28th. That was up from $1.4 billion, or 22 cents a share.
Excluding one-time charges, Cisco earned 34 cents a share, a penny higher than analysts had forecast.
"Momentum remains very strong," said John T. Chambers, Cisco’s Chairman and chief executive, in a conference call with analysts. "Although competition remains robust, we believe we are gaining share from all our competitors."
He said Cisco was benefiting from continued demand for network bandwidth to handle video transmissions.
Quarterly revenue increased 21 percent, to $8.87 billion from $7.32 billion a year ago, beating the $8.76 billion in revenue expected by analysts surveyed by Thomson Financial.
Mark Sue, an analyst with RBC Capital Markets, said that the quarter was a strong one, with good growth in most segments.
"They’re a balanced company," he said. "Over all they are executing very well. There will be times when some sectors outperform others."
Cisco executives said developing countries were creating a growing opportunity, accounting for more than a third of Cisco’s sales during the quarter. "It is very possible we can maintain 35 percent to 45 percent growth in the emerging markets," Mr. Chambers told analysts.
Cisco, based in San Jose, CA, reported gross margins of about 64.5 percent during the third quarter, and executives expect that to remain flat in the fourth quarter.
Cisco executives said gross margins had been reduced by the acquisition of Scientific Atlanta, a maker of cable equipment, which competes in a market with typically lower margins.
Online Entertainment’s Explosive Growth
User-generated content (UGC) has created an emerging source of video that is beginning to compete with professionally-produced content. The major broadcast TV networks, pay-TV specialty networks, and local TV stations, along with others, are all moving their content to online entertainment services. PC-TV tuners are creating a "third front" that permits consumers to capture TV content and manipulate it.
Social networking, advanced search services, and addressable advertising approaches are creating a frothy mix of professional, user-generated, and combination content that will take many years to sort out.
Please click here to download a new white paper from In-Stat Research that explores this explosive evolution in online entertainment.
It answers questions such as: How is UGC evolving? In what regions is it growing? What are the six vectors of growth facing professional video content companies? What do TV networks need to do to support dozens of new usage models? Will the same adjustments need to be made to portable, mobile, and VOD services?
It also includes the following tables and figures: PC-TV tuner annual value by region showing relative trend lines; key characteristics of growth vectors compared to show complexity; a graphical depiction of interaction among social networks, search, TV, and movie program planning and production, and addressable advertising; overview diagram of Synacor’s innovative portal solution; relative value of each online entertainment infrastructure category from 2006 to 2011; recent survey respondents’ attitudes towards types of online advertisements; and user-generated video views by geographic region.
Skinkers Taps Silverlight for P2P Delivery
Skinkers, the market leader in push technology, has unveiled LiveStation, a P2P Internet broadcast technology co-developed by Skinkers and Microsoft Research. LiveStation integrates Microsoft Silverlight (previously called "WPF/E") with Skinker’s P2P technologies to set a new standard for cost-effective delivery of high-quality live video content.
LiveStation uses Silverlight to create a rich interactive user experience for live video delivery. The P2P approach ensures bandwidth usage is minimized and removes the need for powerful, expensive server farms to stream live TV shows and events.
"Skinkers welcomes the introduction of Microsoft Silverlight with capabilities to enable our customers to deliver interactive web video experiences that blend media, graphics, and animation," said Matteo Berlucchi, Co-founder & CEO, Skinkers. "Silverlight’s cross-platform approach will enable us to deliver consistent experiences to both Mac and Windows users on a variety of browsers."
"Internet broadcasting is the new frontier for content owners and there is clearly a market for the many video-on-demand (VOD) providers currently emerging," said Berlucchi. "We also know there is an enormous demand to stream live TV-like experiences to the desktop. Sports, concerts, and breaking news have all proven popular online. Current streaming techniques require vast infrastructure demands to serve relatively small audiences. With LiveStation, broadcasters can scale up to audiences of millions for a fraction of the cost while guaranteeing a rich user experience with minimal latency and no buffering. By adding Silverlight to the mix we’ll be able to deliver experiences that transcend conventional broadcast capabilities." LiveStation users simply click on the LiveStation viewer, which can be embedded in a browser, installed from a website, or distributed on physical media. The LiveStation viewer enables audiences to view live content on their PCs and switch among channels if multiple live TV streams are offered. When running the LiveStation viewer, the user’s PC will join the "cloud" of P2P nodes watching the same channel and helping each other to stream the live content effectively and efficiently. This all happens without impacting the performance of the user’s PC.
"Silverlight’s support for web standards and industry leading Windows Media technologies enables it to easily integrate with both existing infrastructures and entirely new technologies like LiveStation," said Forest Key, Director of User Experience and Web Platform at Microsoft. "The combination of Silverlight and LiveStation represents a powerful solution for content providers looking to harness the delivery of rich media experiences online."
LiveStation is built on technology co-developed by Skinkers and Microsoft Research, which entered into a pioneering "technology for equity" collaboration in June 2006.
The software represents the most advanced structured P2P technology for high-speed content delivery available today. From the results of this research, Skinkers has developed the Live Delivery Network, a fully productized enterprise-class software environment designed to support P2P applications. LiveStation is the first product that leverages the unique characteristics provided by the Live Delivery Network.
Microsoft Silverlight is a new cross-platform, cross-browser plug-in for delivering the next generation of media experiences and rich interactive applications for the web. Microsoft Silverlight integrates with existing web technologies and assets like LiveStation to provide higher quality experiences with lower costs for media delivery. Delivered to end-users through a seamless, fast installation, Silverlight offers consistent experiences to both Mac and Windows users on a variety of browsers including Internet Explorer, FireFox, and Safari.
The opportunity for broadcasters is significant. "For any broadcaster keen to build their brand in the online arena and harness the power of rich interactive media experiences, our LiveStation pairing with Silverlight is the perfect solution," concluded Berlucchi. "It allows broadcasters to simulcast their program schedules to new audiences, thus opening new streams of potential revenue. As the broadcasting industry continues to rapidly evolve for Internet distribution, LiveStation and rich capabilities of Silverlight represent a significant opportunity to lead the field."
P2P Tungle Secures $1.5 Million
Tungle, the world’s first P2P meeting coordinator, has secured $1.5 million of venture financing from leading Canadian venture funds JLA Ventures and Desjardins Venture Capital. It has also received an investment from Alex Karakozoff, a US angel investor. The funds will be used to accelerate the company’s marketing and engineering activities.
"Building a great company requires the right team, and that includes the investment team," said Marc Gingras, CEO & Founder of Tungle. "We could not have chosen a better set of investors to join Tungle. They bring tremendous entrepreneurial experience and an extensive business network. We share the same fanatical belief in providing a great customer experience for our users."
One of the most frustrating and time-consuming activities for a professional is trying to coordinate a meeting with one or more co-workers, business associates, or friends without knowing their availability. Businesses and individuals need a simple solution that enables them to coordinate meetings independent of the application or platform they use or the software used by the people they wish to meet. Tungle provides the feature set and ease-of-use to meet those needs.
"Coordinating meetings has always been a headache. I sit on several boards of private and public companies. Sometimes, it takes more time coordinating a meeting than actually having it," said Pierre Donaldson, Partner at JLA Ventures. "When Marc and his team showed us their solution, we were amazed by its simplicity and effectiveness. We strongly believe in the viral nature of the product and in the team’s ability to execute."
Tungle is a light, but powerful, P2P meeting coordinator. People can use Tungle to arrange meetings with friends, co-workers, or business associates no matter where they are or what groupware or calendaring software they use.
"The Tungle solution fills a need that the market has endured for many years. We have confidence in the Tungle management team, to answer these needs," said Fabrice Lucherini, Vice President, Technologies with Desjardins Venture Capital.
Tungle uses a state-of-the-art, P2P architecture to keep users’ information secure. Users’ calendars are not stored on a central server – only on their computers and those of the people they choose to share their calendars with. Tungle’s P2P Engine manages the secure transmission of information and uses advanced authentication and encryption measures to protect users’ privacy and maintain the integrity of the network.
"Simply ingenious and wildly innovative. Tungle’s strategy of leveraging a P2P architecture provides full-calendar compatibility inside and outside the enterprise without violating corporate security and technology standards. Even Oracle, where I was a senior executive, or Microsoft, could learn a few things from Tungle," said Alex Karakozoff, a leading US-based angel investor who has provided technology infrastructure to the Global 2000 for more than 30 years.
Congress Stares Down YouTube & HDNet
Excerpted from PC Magazine Report by Chloe Albanesius
Members of Congress on Thursday tangled with leading video providers over how to preserve the open architecture of the Internet while improving its quality and protecting intellectual property rights.
Representatives from YouTube, Sling Media, HDNet, and others appeared before a House Energy and Commerce subcommittee to discuss the future of video entertainment. Providers and lawmakers have grappled with a variety of issues that could change the way consumers access online video content, including net neutrality, copyright concerns, and bandwidth issues.
Inadequate bandwidth is the main reason that online video content is largely complimentary to television programming and will not threaten the livelihood of TV in the near future, according to Mark Cuban, founder of HDNet, a television station that broadcasts solely in high-definition (HD).
"In our current bandwidth constrained environment, the concept of Internet video replacing TV is laughable," Cuban said. "Replacing HDTV with online content isn’t even on the radar. There is certainly a market for video content on PCs, but it’s a complimentary market, not a primary market."
Telecom companies need to work up to a 1 GB switch to the home, Cuban said. When asked how such an endeavor might be financed, Cuban pointed to market forces. Such a radical improvement in bandwidth would make online endeavors even more attractive, attract investment, and essentially pay for itself, he said.
Cuban urged Members to view access to bandwidth as a utility. But Congressman Gene Green (D-TX) pointed out that, "A utility needs to be regulated," and said that Congress tried to eliminate regulation in the industry with the 1996 Telecommunications Act.
"The real problem is the actual capacity of the lines to your home," Cuban responded. "It’s hard to say if Congress needs to intervene on that point," he said, but, "if we don’t go much further than where we are, we won’t be able to compete in a global environment."
"I think the future of video will depend on how we resolve" the issue of net neutrality, said Congresswoman Anna Eshoo (D-CA). "Consumers must be able to access that content in the manner in which they choose."
The term "net neutrality" refers to the idea that every website on the Internet, whether it be a major company’s portal or a homemade storefront, has the same right to speed and access. Chief executives of some major Internet service providers, however, have voiced support for a system that would allow them to provide quicker download times or site access for those willing to pay for it.
Net neutrality problems "go away completely if bandwidth constraint goes away," Cuban said.
Chad Hurley, chief executive and co-founder of YouTube, and Blake Krikorian, Chairman & CEO of Sling Media, were skeptical and said the success of their businesses is contingent upon the open architecture of the Internet.
"Because of the open Internet … we were able to develop a service that could compete with much larger competitors in the market," Hurley said.
If Sling, which ports television programming to computers and other mobile devices, had to gain approval from providers before it started, "We would’ve just been kicked in the pants out the door," Krikorian said.
YouTube’s Hurley denied that his company was working to improve the quality of its video in order to compete with TV offerings.
"We’re offering a different experience than the TV," Hurley said. "We’re offering real quality short clips that can be viewed by everyone. It’s far from full-length, high-quality TV programming."
YouTube directs viewers to TV programming more than it does steal them away, Hurley said. "CBS publicly stated that YouTube has helped increase their ratings by 5 percent" via posted clips of select shows, he said.
Members of Congress did not appear convinced of this happy marriage between YouTube and major media providers and grilled Hurley on possible intellectual property violations.
YouTube provides "tools to our users" to alert the company to any copyright snafus, but "Visually, you can’t tell who owns the rights" to a certain video, Hurley said.
"That’s probably true" in some instances, but, "Clearly, if someone puts a clip of a movie or a show from FOX," that is a copyright violation, said Congressman Mike Ferguson (R-NJ).
YouTube works with "thousands of partners" with the rights to certain material who have given permission for the site to post their material, Hurley replied. In all other instances, YouTube relies and copyright owners to flag it as a violation, he said.
Ferguson was dubious and said that he could search on YouTube at that very moment and find thousands of clips posted by users who clearly do not own the rights to the material. "Why don’t you take that stuff down?" he asked.
Hurley pointed to the Digital Millennium Copyright Act (DMCA), which is supposed to provide intellectual property protection for online material.
YouTube "goes above and beyond the baseline requirements for DMCA," Hurley said, but said that the DMCA relies upon "cooperation among players."
YouTube and its new owner Google do not "have the right to hide behind the DMCA," Cuban said. "It’s a misapplication of the DMCA."
Cuban was an executive producer on movies like "Good Night and Good Luck" and he said he has people "continuously monitor" sites like YouTube for unauthorized clips. "For smaller movies, we spend more time monitoring websites than we spent on the movies."
Darknets Live on After P2P Ban
Excerpted from Ars Technica Report by Ken Fisher
It’s a lesson that goes back as far as the early days of the Roman Empire: stamp out the leadership of a rebel movement and new leadership forms. The next thing you know, you’ve got a rebellion in Judea.
Such is the lesson that the RIAA is learning as their quest to stamp out P2P results in more and more users moving to so-called darknets. In the early days of the original Napster, P2P crackdowns gave birth to what one might call "FTP on steroids": private networks, usually requiring authentication and thus "insider" contacts, loaded with digital content. These so-called "darknets" are typically P2P in nature (though not always). Their most significant feature is that they are not public and thus are much harder to eavesdrop on without infiltrating the network.
Darknets are on the rise as a result of the RIAA’s new campaign against file sharing on US college campuses. Darknets are popular with students at Harvard University and MIT, and we’ve also heard from students at dozens of other schools where darknets are either on the rise or have long existed.
Take the case of Ohio University, which earned its place on the RIAA’s dishonor roll by being the recipient of almost 1,300 copyright infringement notices. The school reacted by banning P2P on campus, a move that’s being watched by other schools.
When we first reported on the Ohio U moves, we heard from a few students at the school who said that they had long since moved to darknets because of the fear of getting caught. As it turns out, despite Ohio U’s ban on P2P, darknet Direct Connect hubs are running on campus.
The question is, will they last? The student-run newspaper at Ohio U reports that when the school banned P2P on campus, fears were running high among file sharers. One student the paper talked to took over a DC++ hub late last month when another admin decided that that it was getting too risky to stay involved. Another former admin expressed concerns that the DC++ hub won’t survive into next year.
Of course, what the article doesn’t point out explicitly is that when those admins wanted to step down, there was someone there to take their place. Such is the way of life on these underground hubs, where it can often fall to a select few people to choose to keep pressing their luck with covert file-sharing to keep a hub up for others.
One student at Brown who talked to Ars earlier this week said that his DC++ hub just completed a merge with another hub at another school not only to boost the amount of shared material available online, but to spread out the administrative duties of running the site. The student, who didn’t want to be identified for obvious reasons, said that he believed that some students were sweating the onslaught brought by the RIAA, saying that "no one wants to lose a degree over it," but his confidence was high that the network would never be infiltrated. Yet this was the risk that they had to consider before merging networks, he said.
The "security" of many darknets rests on two principles: obscurity and insider access. When hubs merge, these two principles are tested, the student told us. The darknet is less obscure because as its membership grows, so does awareness of it. This in turn raises the possibility of network infiltration from students who "can’t be trusted," he said, but he also said that this is why most hubs require all people with access to upload files as well. "It’s not a perfect solution, but it’s better than being on public P2P," he said.
Coming Events of Interest
-
Streaming Media East - The Business & Technology of Online Video - May 15th-16th at the Hilton New York, NY. Streaming Media East is the only trade show dedicated to coverage of both the business of video on the net and the technology of streaming, downloading, IPTV, and mobile video delivery. The DCIA is a show sponsor, and DCIA Member BUYDRM’s Christopher Levy will speak on the P2P for Large Scale Video Delivery panel.
-
P2P MEDIA SUMMIT LA – June 11th in Santa Monica, CA. This is the DCIA’s must-attend event for everyone interested in monetizing content using P2P and related technologies. Keynotes, panels, and workshops on the latest breakthroughs. Held in conjunction with the new Digital Hollywood Spring conference and exposition.
-
Digital Hollywood Spring – June 12th–14th in Santa Monica, CA. Now expanded to Le Merigot as well as Loews Anatole Hotel. With many new sessions and feature events, this has become the premiere digital entertainment conference and expositions. DCIA Members will exhibit and speak on a number of panels.
-
NXTcomm – June 18th–20th in Chicago, IL. The next-generation global forum and marketplace for the business of information, communications, and entertainment technology. The forces that drive communication and the solutions to harness it converge here. The DCIA will participate with Digital Hollywood.
-
International Broadcasting Convention (IBC) – September 6th-11th in Amsterdam, Holland. IBC is committed to providing the world’s best event for everyone involved in the creation, management, and delivery of content for the entertainment industry, including DCIA Members. Run by the industry for the industry, convention organizers are drawn from participating companies.
-
PT/EXPO COMM – October 23rd-27th at the China International Exhibition Center in Beijing, China. The largest telecommunications/IT industry event in the world’s fastest growing telecom sector. PT/EXPO COMM offers DCIA participants from all over the world a high profile promotional platform in a sales environment that is rich in capital investment.
|
