November 5, 2007
Volume XIX, Issue 10
Can P2P Become Ad-Supported Marketplace
Excerpted from Online Spin Report by Cory Treffiletti
This week I spoke at the DCIA P2P ADVERTISING UPFRONT in Los Angeles, which was part of Digital Hollywood, to industry professionals working to create an ad-supported marketplace using peer-to-peer (P2P) networks.
It was an interesting opportunity because, as I mentioned to them, P2P is sort of a "dirty word" in advertising circles, for the same reasons that social networking is not yet a mature medium: the content.
In social networking, people are afraid their brands will come up alongside inappropriate content. In P2P, they're afraid their brands will be associated with an unauthorized activity.
The fact is that P2P is quickly becoming a legitimate atmosphere for brands, though there will be no quick fix and no silver bullet to dominate this category. In order to make this a reality, we must first discuss the audience for P2P.
There are two primary components to the audience. The first is the people who love P2P. These folks are heavy users of these networks and they probably rarely, if ever, pay for music. They feel that music and video content should be free and they are probably loyal to one service at a time.
The second audience is people who hate P2P. These people tried to use these networks but had a negative experience. These people believe that P2P is not worth the hassle, and they will happily use iTunes or some other digital service. They may even still go to the store (imagine that)!
Both groups are open to P2P, so long as there is a safe, free, and easy solution. This means there is certainly an opportunity to create a real business here, if done correctly. My headline here is that you need to give the people what they want, not what you want them to have, in the user experience.
The two primary areas for advertising in P2P platforms are audio and video. In audio we have a number of competing models: pay-per-download (LimeWire Music Store), ad-supported graphical (QTRAX), ad-supported audio (We 7), and subscription services (iMesh). In video we have one primary model, which is ad-supported P2PTV with commercials (Joost, Babelgum, and Veoh).
There are a few other opportunities being tested and of course each platform has search; but search is a more targeted opportunity here, unlike commercial search engines.
Video seems most easily understood because the model is like TV. P2PTV services are primarily using pre-roll, mid-roll, and post-roll videos that are basically commercials. In some cases, services are playing with overlays in Flash or other interactive formats. These work and are easy to see taking hold. The question here; will any of them amass a single audience of critical volume, enough to garner strong advertising budgets?
The definition of critical mass requires us to understand that the overall audience is fragmenting - and you may never get more than a 10% share of the total audience inside one single service.
Consumers are in control and they will dictate when, where, and how they will interact with content.
Audio content is where the greatest problems lie and where the most innovation is required, because the models here are the most immature at this time. In some cases, the user will only be shown content that is officially licensed. The problem: you can't keep an audience when you only show them part of the answer! We know that pay-per-download won't be the sole model simply because too many people are used to getting their content for free.
Ad-supported graphical efforts are interesting, but they do not work in the environment where music is played. Most music is put on play and then the user stops looking. If they kept looking, then we would be back to the video format! Plus, most music is not played on the PC, where the graphical efforts can be maintained.
Pandora has done a great job of utilizing this model thus far, running beautiful full-page skins of advertisements, but the user cannot share and the user is not always on the page... they are doing work and listening in the background. What Pandora does have going for it is the rating function, which brings the eyeball of the consumer back regularly. This means that the graphical units have the chance to be viewed, unlike many other streaming sites.
The models are not there yet, but with some tweaking and some patience I do believe we'll see this succeed. Some people will pay for songs while others will be offered content that supplements the songs, thereby providing a forum and an interface for graphical advertising.
In the meantime, start doing your research into the P2P platform, and see if your brands will be interested in the space!
Report from CEO Marty Lafferty
 Thanks to all the participants in our inaugural P2P ADVERTISING UPFRONT LA for providing this newest DCIA initiative with a very auspicious introduction.
FTI Consulting's Bruce Benson set the stage with his strategic opening keynote exploring how the P2P distribution channel needs to evolve to maximize its potential as an advertising medium.
Then he brought together BitTorrent's David Fleck, Comedy Time's David Goldman, Interpublic Group's Scott Wensman, and MediaDefender's Jonathan Lee for an insightful and candid assessment of the current P2P marketplace for sponsorship revenues.
Jennifer Betka, SVP of Marketing & Programming at P2PTV industry leader Veoh Networks - already one of the top ten destinations on the Internet for video content - gave an inspiring presentation on "Advertising in P2P Video: Reaching Tomorrow's Television Viewer."
George Searle, CEO of the industry's most widely used P2P service, LimeWire, made a compelling case for paid search in the P2P advertising market; and OKCupid's Founder & CEO, Sam Yagan, the largest and fastest growing ad-supported online dating service, described examples of personally relevant marketing opportunities that can be developed on unprecedented levels in social networks.
Brilliant Technologies' Chairman & CEO Allan Klepfisz, along with Rebel Digital's Lance Ford and John Connell, shared plans for QTRAX's imminent consumer launch as the first music-industry sanctioned advertising-supported P2P service and how it intends to be "better than free."
In addition to Catalyst President Cory Treffiletti's provocative luncheon keynote, YuMe Networks CEO Jayant Kadambi discussed its offerings for the P2P market.
Brand Asset Digital made its premiere industry appearance following consummation of the merger of Beyond Media and INTENT MediaWorks, led by CEO John Kupice, along with Andy Cooper and Joey Patuleia; and TAG Strategic's Ted Cohen.
Ultramerical Founder & CEO Dana Jones presented a very high-production-value case study and VeriSign VP of Broadband Content Services Jeff Richards offered the final keynote updating attendees on the success of its Kontiki commercial P2P-based Intelligent Content Delivery Network (ICDN).
P2P UPFRONT panelists included Beat9.com's Jay Rifkin, Best New Agency's Michael Boh, BUYDRM's Christopher Levy, Comedy Time's David Goldman, DeviantART's Steve Gonzalez, Fun Little Movies' David Lee, Javien Digital Payment Solutions' Bill Sheehan, KPMG's Paul Baguley, MediaPass Network's Daniel Harris, Nettwerk Music Group's Brent Muhle, PeerApp's Mark Strangio, StreamCast Networks' Michael Weiss, Universal McCann's Elias Plishner, and Wingman Media's David Shor.
For those who could not attend, UPFRONT presentations can now be accessed online.
Congratulations also to Victor Harwood for his great success with the first Digital Hollywood Fall (DHF) at its new location in the Hollywood Renaissance Hotel and Kodak Theater. We are especially grateful to Mark Strangio, Director Channel Marketing, PeerApp; Jonathan Lee, VP, Business Development, MediaDefender; John Dillon, Chief Marketing Officer, CacheLogic; Daniel Harris, Founder, Kendra Initiative; Christopher Levy, CEO, BUYDRM; and Arturo Artom, President and CEO, Your Truman Show; for their participation on the DHF Next Generation P2P panel.
Mark described PeerApp's services as creating a performance platform for Internet service providers (ISPs) and solving problems related to bandwidth congestion. He explained that while the commercial P2P industry is still at a very early stage, it has enormous upside potential. Among the international markets where PeerApp is building its customer base, there are many differences in stages of this development, as well as common needs of carriers to understand and manage significant traffic changes happening on their networks. Acceleration of commercial progress will come as a result of content aggregators and ISPs partnering on solutions.
Jonathan outlined MediaDefender's evolution from purely an open-network anti-piracy solution to a provider of marketing services using promotional content and "redirects." He expressed the view that a rewarding place to start in monetizing open P2P traffic is with the low-hanging fruit of sponsored MP3s because this is what the majority of users are searching for. He described the difficult learning curve that content providers face as their traditional business models are decimated without a clear way for how to replace them. In the coming year, hopefully there will be greater clarity from the majors in terms of positive approaches to commercialization.
John explained the benefits of CacheLogic's offerings in P2P-enabled and hybrid content delivery networks (CDNs). He indicated that there are still many misconceptions surrounding P2P technologies as a result of widespread consumer adoption of unfiltered P2P applications. The success of paid-for content in this channel will in part be a function of raising quality of service (QoS) to higher levels and, in part, a matter of re-education and preconditioning audiences. Viral marketing is particularly well-suited to the open P2P environment. John noted the extreme difficulty faced by rights-holders who have powerful distribution partners as they seek to develop new channels.
Daniel revealed Kendra Initiative's plans for EU funding in 2008 as it expands the drive for an open online marketplace with greater interoperability. P2P applications are increasingly being decoupled from the protocols, which is changing the landscape considerably. Consumers want and will pay for convenience. There will be multiple winners, not a single solution, and a very important need currently is for the entertainment, technology, and telecommunications sectors to work together. Content providers need to decide that exploring new revenue opportunities is a higher priority than ensuring absolute protection of their works. Requirements must be tempered by what is technologically possible.
Christopher characterized BUYDRM as a paid media empowerment company and cited the most recent example of a major content provider, ESPN, embracing and harnessing P2P by using Pando Networks to distribute content secured by BUYDRM. He distinguished between the high potential of DRM to optimize value in the marketplace and less-than-optimal early implementations of it. Consumers aren't customers. The development of the industry is being held back by regulatory entanglements. Nevertheless, the coming year will be marked by several major entertainment DRM-supported P2P initiatives. The major media firms need to look outside their own walls for solutions.
Arturo introduced his video-blogger inspired vision for Your Truman Show that will not only enable users to webcast their lives but also employ widgets to dynamically search across and populate social networks. He noted that Napster could be viewed as the first social network and that a key motivation of users is to seek other users "like themselves." He aims to develop a winning P2P service that will combine aspects of YouTube with MySpace to help users define their most desired communities. He indicated that technology issues remain to be addressed along with the extreme Pareto Principle effect currently with 90% of content being consumed by 2% of consumers.
Audience Q&A centered on how to "compete with free" in the open P2P environments with many constructive suggestions from panelists; how partnering with traditional distributors in a hybrid approach to developing the P2P marketplace might reduce some of the friction and resistance there; and whether a rights-rationalizing entity might add value in accelerating commercial development or, if not, what other changes could propel the channel forward more aggressively. The discussion will continue at the P2P MEDIA SUMMIT LV Conference within CES coming on January 6th. Share wisely, and take care.
Ultramercial on Advertising-Supported P2P
Excerpted from Online Spin Response by Paul Grusche
Cory Treffiletti made a lot of really good points regarding P2P acceptance in the marketplace and the division of people for it and against it. I would add that there is one ad model invented and patented for this very market. It is the value-exchange ad model by Ultramercial.
The entertainment industry is really warming up to this model because unlike IAB type ad units, license rights are protected through the Ultramercial technology until the ad transaction is completed. We also present a choice to buy the content which further enhances the value of the advertiser granting free access.
Users agree to exchange their time with an Ultramercial ad for: music downloads, radio streams, or music videos. With passive display advertising, as Cory points out, you never know if someone is watching. With an honest upfront exchange, the advertiser is guaranteed someone is clicking through and watching their ad on the way to the content.
In the case of a music stream, the user would engage the ad that grants access to the stream first in order to earn a set period of time to listen with the option to renew the stream when that time is up.
The real key however to making P2P work is providing the highest quality, exclusive and surprise & delight entertainment modules.
If someone is used to freely downloading unauthorized songs or videos, we need to wow them. They need to be presented a package from the artist and label that includes: behind the scenes footage, lyrics, photos, fan invites in a well-executed, high quality, freely traded package.
Then, they may just watch one ad to get it. In fact, our initial tests this year with a major label showed a third of the people did watch our ad to gain access to the package.
There are no tricks or disruptive ads here. The value proposition is made very clear to the viewer before they ever see an ad. The viewer remains, as they always have in this space, in complete control.
Brand Asset Digital Debuts at P2P UPFRONT
Beyond Media and INTENT MediaWorks announced their new name this week at the P2P ADVERTISING UPFRONT in Los Angeles: Brand Asset Digital, the most advanced and comprehensive solution available for branded digital media distribution, business intelligence, and live linear streaming for audio and video.
The company's Brand Optimization Engine will provide both content and advertising brands with an integrated marketing, discovery optimization, distributed storefront, business intelligence, and next generation live linear streaming platform, for audio and video, reaching more than 320 million consumers each month, facilitating over 140 million audio and video content downloads and serving more than 2 billion brand impressions for both digital content owners and advertisers.
"This is about connecting brands and content, optimizing brand campaigns for discovery, impressions, consumption and accountability by understanding consumers' digital lifestyle. This is about branding each step in that lifestyle behavior while maintaining the integrity of the content they seek," said Tim Hogan, Brand Asset Digital's Chairman.
Brand Asset Digital has formed a Strategic Partnership with Chris Lighty, CEO of Brand Asset Group, to effectively target specific market segments with branded campaigns. "We feel that the digital extension of a brand campaign into the Internet lifestyle channels where consumers search, share and download most of their content can benefit greatly from the optimization and business intelligence platform provided by Brand Asset Digital. Digital campaigns are an essential part of any 360° brand campaign and the real-time information is invaluable to the overall success of any brand building exercise," said Lighty.
Brand Asset Digital creates an exciting opportunity for content owners and advertisers," added John Kupice, CEO. "Our customers will now have the ability to create new content and brand experiences making the content the new storefront - wherever it goes! For example, content owners can broadcast a live concert to a custom-branded media player while providing the opportunity to buy concert tickets, downloads, and merchandise. With our new offering, the content itself is the new storefront."
Report from Digital Hollywood Confab
Excerpted from MediaShift Report by JD Lasica
When my book Darknet: Hollywood's War Against the Digital Generation came out in 2005, the Hollywood studios were still doing everything in their power to resist the onrushing wave of the personal media revolution.
These days, it's a far different story. Hulu, the online video portal backed by NBC and News Corp., is about to launch, and talk in the hallways at Digital Hollywood this week is all about how to embrace our digital destinies. Talk during the panels is not about how to build a better Facebook but how to build a widget that gains traction on Facebook.
During the "User-Generated Media, Social Networks, and Traditional Media" panel, Eric Alterman, Founder & Chairman of KickApps, talked about how message boards were adopted by only a handful of large sites like AOL but soon became ubiquitous; and the same thing is now happening with widgets and video players. He also pointed to the power of online contests; a magazine site saw 80,000 people sign up for a contest in just a few days, far more traffic than they had seen before that.
Robert Tercek, Founder & President of PeopleJam, talked about two "value control points": profiles and content, the challenge that websites face in bolting them together. If you're a media company and you just "bolt on the community functions," he said, "you're missing the point."
Dmitry Shapiro, the CEO & Founder of Veoh Networks: "Facebook is partly open but it's not open enough. The web is the platform."
"Web 1.0 was about media companies pushing content to us. Web 2.0 was about consumers connecting with each other. Web 2.1 is now about consumers connecting with each other around content."
Shapiro said Veoh started as a client like Joost or Azureus but found that it was hard to get people to download the application, so it created a video on-ramp and tried to distinguish itself from YouTube by giving people publishing tools, striking deals with content providers, and giving users the ability to publish to multiple sites: YouTube, Google Video, and MySpace.
Tercek: "If I were a media company, I wouldn't want to try to erect a big portal. I would try to distribute my content to as many social networking sites and niche sites as possible. Go where your customers already are."
Evaluating P2P Solutions for Your Online Business
Excerpted from Streaming Media Report by Eric Klinker
The demand for rich media delivered via the Internet is exploding as online content quality improves and content gets longer and reaches ever wider audiences. To meet this growing demand, many new solutions for content delivery are coming to market, with an ever-growing number of innovative new solutions, such as P2P and hybrid content delivery networks (CDNs) being offered alongside traditional CDNs. With potential to upend the economics around and ultimately enable high-quality video delivery, P2P holds such promise that if you don't already have a P2P strategy, rest assured your competition does.
As a starting point, it is helpful to understand how peer-based models differ from the traditional content delivery models. In the traditional CDN model, the intelligence and capacity of the system is centralized and located in a core set of servers, while clients are simply dumb consumers in the delivery process. The opposite is true in peer-based systems, where users contribute content they have already consumed back to other users of the application. This allows considerable intelligence to be located at the edge of the network, within the peers, and distributes the resources required for content delivery throughout the internet. The result is a far more efficient delivery model at scale, but it does not guarantee a minimum level of resource availability, as is the case in the centralized CDN. Conversely, the CDN cannot guarantee enough infrastructure is deployed at any given time or place to meet high levels of demand. In the peer model, additional infrastructure is "created" on the spot with high demand in the form of more users. Such are the pros and cons associated with each model.
To harness the strengths of each, commercial solutions are now coming to market that combine elements of traditional CDNs with P2P technology to create a "hybrid" or "peer-assisted" CDN. While there are many categories of pure play P2P technologies, this article will focus on these hybrid offerings, beginning with the typical applications of content delivery.
Peer-based content delivery systems are typically designed to solve specific problems. The four most popular categories of solutions are: 1) download (download, then view); 2) streaming (progressive download audio/video on demand); 3) live or broadcast (concurrent viewing by a single audience); and 4) personal communication (one-to-few transmission of large e-mail attachments). Each faces unique challenges in scale and architecture and targets a particular segment of the marketplace.
Please click here for the rest of this report. Eric Klinker is the Chief Technology Officer (CTO) at BitTorrent.
Babelgum Turns to CacheLogic for P2PTV Streaming
CacheLogic, provider of the world's leading digital asset delivery network, today announced that the next generation P2PTV network Babelgum is using its Velocix network to deliver progressive video streaming of on-demand TV content.
The Velocix Network is designed to enable content owners, movie studios, and broadcasters to deliver video and other large digital assets over the web, with unprecedented performance, breakthrough economics and an asset delivery lifecycle management system that provides content owners the control, analytics, and reporting they need to manage their asset libraries through the digital distribution chain.
Babelgum offers a global TV-on-demand service that enables consumers to view near TV quality, full screen video from professional content owners, covering everything from news and sports to entertainment, documentaries, and lifestyle TV. The Velocix Digital Asset Delivery Network allows Babelgum to provide the consistently high quality of service it is renowned for, regardless of the country in which consumers are viewing content. It will also provide a delivery network able to scale in line with the current growth of the Babelgum service as its audience continues to increase rapidly.
Mallku Caballero, Chief Technology Officer (CTO), Babelgum said, "CacheLogic's Velocix network is a crucial part of our delivery infrastructure, and is fundamental to the high quality of the Babelgum service now and in the future. We collaborated with CacheLogic to create a video delivery capability that blends P2P traffic together with bandwidth from multiple Velocix network caches to guarantee the level of service we need, while at the same time changing the economics of video delivery."
Phill Robinson, CEO, CacheLogic added, "We're delighted that we're helping a ground-breaking web broadcaster succeed with a proposition that's based on quality as well as choice. Traditional content delivery networks weren't built to address the demands of delivering high quality video over the Internet. CacheLogic provides a breakthrough in the performance and economics of online rich media distribution at a time when consumer appetite for video over the internet set to grow exponentially."
PeerApp Announces Support for HTTP Video Streaming
Excerpted from Web Services Journal Report
PeerApp, the innovator in P2P acceleration and caching solutions for Internet service providers (ISPs), this week announced new software that provides higher-quality subscriber experiences with HTTP video streaming traffic from YouTube, Google Video, MySpace, and other video-sharing websites.
The new software, a module for PeerApp's carrier-grade UltraBand solutions, supports the HTTP video streaming protocol and caches traffic from Windows Media Player, Adobe Flash Video, Apple QuickTime, RealNetworks RealPlayer, and other Internet video applications without requiring ISPs to install proxy servers or to change definitions or configurations.
With the addition of this new software, PeerApp now provides concurrent support for caching and accelerating HTTP video streams and P2P video downloads, enabling ISPs to deliver efficient, robust broadband video to their subscribers.
PeerApp's UltraBand solutions provide greater control over network utilization, the quality of broadband video delivery, and the subscriber experience. As a result, ISPs can create new, differentiated service offerings - packages based on throughput, upload/download rates, or network capacity - that can command higher prices and improve operating margins. ISPs should also see immediate and dramatic improvements in network performance, such as reduced congestion, lower latency and less packet loss; and significantly improved efficiencies in network operations, particularly transit links.
"We're advancing the dominant application of the web - broadband video - by enabling video to be delivered at wire speed," said Frank Childs, PeerApp's Vice President of Business Development and Marketing. "Our solutions close the gap between subscribers' demands for faster speeds at the desktop, palm-top, or set-top, and the constraints created by bottlenecks on back-end networks. Now, subscribers can get the full speeds that they are paying for, video service providers can deliver higher-quality content, and ISPs can participate in revenue streams created by Internet video. Everybody wins."
PeerApp's solutions also benefit content producers and content distribution sites. The software supports and improves progressive downloading of HTTP video streams, the predominant method used by video-sharing Web sites to deliver content from servers to clients.
Internap Enhances Leading CDN with P2P Access
Internap Network Services Corporation, a global provider of end-to-end Internet business solutions, this week launched an enterprise-grade P2P access method for its world-class content delivery network (CDN). This new access method, which is planned to be generally available by the end of 2007, is designed to support high-quality delivery of large libraries of content that have a wide range of demand. The P2P service also complements Internap's industry-leading streaming services for Adobe Flash video and Windows Media. The result is a flexible and reliable CDN solution for business and government organizations that supports a broad range of content with new levels of security, reliability, and business intelligence.
Internap co-developed the P2P access service with Pando Networks, a leading provider of managed P2P media distribution services. Using Pando's Video Booster, a highly efficient, thin client for streaming full-screen high-definition (HD) video, Internap is able to achieve the resource efficiencies and cost savings of P2P networking through a client that runs securely and transparently in the background on the viewer's computer. This P2P access method can be a more efficient and cost-effective delivery option for long-form video and large-volume files such as electronic software delivery (ESD) and can be easily combined with Internap's delivery solutions for Adobe Flash video and Windows Media files.
The seamless integration of Pando's Video Booster with Internap's proven CDN means that digital media owners and enterprise applications can now enjoy a secure and reliable CDN solution with multiple access methods and Internap's MediaConsole, a complete toolset for managing, packaging and reporting on streaming content. For those content owners seeking to monetize their media assets, Internap also offers a media asset manager, digital rights management (DRM) controls, credit card processing, a unique ad insertion service that dynamically links web ads with video streams and radio webcasts, and is jointly developing next-generation audio and video players with Microsoft based on their Silverlight platform, which Internap announced on September 12th.
"Until now, P2P networking was an interesting technology that could not meet the requirements of enterprise applications and digital media owners," said Philip N. Kaplan, Chief Strategy Officer at Internap and Co-Founder of VitalStream. "Internap's CDN and content monetization tools combined with flexible delivery methods for P2P, Adobe Flash video and Windows Media provide enterprise-class solutions for digital media content and applications."
Miro Competes with Joost
Excerpted from GetMiro Blog by Nicholas Reville
With the release of Miro Public Preview 3, we feel ready to be held up next to any competition. The company with the most hype right now is Joost. To help prove our point, I put together a chart that details why we think Miro is a better product, better for the Internet, and better for creators: Miro vs. Joost Comparison.
Simply put, I don't think Joost can compete with a world-class open player and I think we'll have more users than they do by January. I think we may already have more active users than they do - despite vastly more media coverage; Joost.com is only a little bit more popular than GetMiro.com according to Alexa.
A little background: Joost is a P2PTV application from the people that developed Skype (now owned by eBay). It's an extremely closed system, with only certain, mostly traditional, publishers being given access. Users can only stream content and everything is locked down with DRM. Joost is trying to build its own proprietary tunnel through the Internet.
Why would a company like Joost want to make an Internet application that's so restrictive? Because if they are successful, they will control both creators and viewers. Creators will have to sign a contract with Joost if they want to reach Joost's audience. Being in the middle of a transaction is a good way to make money. But building a gate-keeping system for Internet TV is a terrible direction for the future of media.
In contrast, Miro is an extremely open system. The software is open-source and can be modified by anyone. Anyone can publish to Miro and nothing comes through our servers. Like a web browser, the connection happens directly between the viewer and the creator. We don't even lock-down the content guide - anyone can create an alternative channel guide for Miro.
But openness isn't just important for social reasons. Miro's openness makes it a better product. In the same way that web was more exciting than closed dial-up networks like Prodigy and AOL, Miro embraces the Internet sandbox in a way that makes P2PTV a whole lot more interesting. Miro has way more channels that Joost (2,600 compared to 250) and because it's a gate-keeper-free system, you can connect to many more that we don't even list in our guide. Just like the web compared to AOL, there's more low-quality content but there's also more good content.
Hulu's Torrent Trouble: Hoarding Sand in the Desert
Excerpted from TV Week Report by James Hibbard
NBC/News Corp.'s Hulu is a significantly evolved step in the right direction for bringing television into the digital age: A user interface that's winning early raves. No added software to install (except Flash, which most users already have). Custom viewing histories and playlists. Video clip sharing enabled. All good.
But, at least from the beta version details, Hulu is still too much of a broadcast product. Episodes are available for only five weeks. Advertisements wander the screen during video playback (how very TNT). Only two major network parents are on board, limiting the amount of product. Plus, it offers only ad-supported streaming, no download-to-own-which means you cannot watch shows offline and cannot use them on portable devices (so forget watching "Heroes" on the plane).
In other words, the product makes the same mistake made by every network that launches a streaming video player: ignoring file-sharing services.
Although YouTube is repeatedly cited as Hulu's most significant competitor, the low-resolution, user-generated content site (in its current form at least) is a different animal from Hulu's polished provider of professionally produced, full-length episodes.
No, Hulu, along with every other network website, competes with P2P services. NBC has the most popular website among the major networks and says its streaming service clocked about 17 million unique users in October. According to a Digital Life America study, 32 million users downloaded television shows from P2P networks during its most recent survey during the month of May.
The reason viewers access television on torrents is because infringement yields an online product that's arguably better than Hulu or anything else the industry has to offer.
Not just a cheaper product (well, free), which is the reason most people in the industry widely assume viewers infringe, but a better service: more portable, a greater variety of use and the best selection available.
Here's what legions of torrent fans already know: If you want to watch TV online, you can go to a Fox.com or CBS.com to view ad-supported streams of the network's most popular shows from the current season (assuming the show is available online in the first place-most are not, particularly cable programs). A fair-sized selection of current and popular shows also is available for download from services like iTunes or Amazon Unbox for a small fee.
Or you can go to a single torrent search engine and download-to-own almost any episode from almost any season of most popular series … for free.
As with the networks' streaming players, you can watch unauthorized shows online. But, like iTunes downloads, you can watch unlicensed shows offline or on portable video players as well. And unlike legitimate services, unauthorized sites have many, many shows that are unavailable anywhere else online (hey look, complete seasons of "Tales of the Gold Monkey" and "The Larry Sanders Show").
An example: You can find online the most recent season of "Hell's Kitchen" on Fox's media player or iTunes. Or you can unlawfully download-to-own the "Kitchen" season-plus the otherwise unavailable first and second seasons. You can also download all four seasons of the UK version of "Kitchen Nightmares" and "Boiling Point."
Another example: On CBS.com, you can watch the most recent four episodes of "CSI," or download the same episodes plus the most recent two seasons on iTunes. But on unauthorized sites, you can download all seven "CSI" seasons.
In other words, you can "own" the Ramsay or "CSI" libraries commercial-free and watch them-as network executives often say on stage at industry conferences-"anytime, anywhere."
That's how far behind the digital curve the television industry is right now. Networks and studios sweat every digital release, when most of their popular content is already available-they're just not making money off it. They're hoarding sand in a desert.
When Fox said it was pulling its "Family Guy" parody of "Star Wars" offline, one reaction from readers (as posted on this board and others) contained variations of, "I guess this is Fox's way of telling us, 'Please download this episode via BitTorrent.'" It's a pouty and felonious response that reflects an extraordinary degree of viewer entitlement: Give us what we want or we'll infringe. But, right or wrong, it also reflects the way an increasing number of young online viewers see the marketplace.
The biggest advantage of the network players (aside from their authorized status, of course) remains ease of use. You go to the site, point and click, streams start instantly. With torrents, users complain of having to sometimes wait hours for a download, while the availability of content is constantly shifting.
Hulu moves the network model forward by combining NBC and News Corp.'s efforts into a single site, and it likely will kick-start some of NBC Universal's cable networks' offering more online content. Right now, one of the biggest problems with streaming is that every network is so protective of its content that users have to surf to a half-dozen sites to watch TV shows on a half-dozen different media players.
Until the industry finds a way to shut down unauthorized sites, or offers a similarly fully stocked, one-stop-shopping product, they're asking consumers to patronize a bunch of local boutique stores and avoid the infringers' Wal-Mart.
P2P Start-up GridNetworks: $9.5 Million
Excerpted from Red Herring Report by Justin Moresco
The Internet will be televised.
GridNetworks on Tuesday said it snagged a $9.5 million first round of funding to back its P2P delivery of Internet-based content for TV.
The Seattle, WA-based company's software, dubbed GridCasting, helps shuttle Internet-based video to TVs. By means of a network-friendly, managed-service type of P2P technology, GridNetworks enables broadcast-quality streaming of Internet television to the desktop or TV set.
Its GridCasting service is a delivery solution for major television networks, movie distributors, and web portals. GridNetworks' software will enable millions of viewers to simultaneously watch broadband-delivered programming without interruptions.
Menlo Park, CA-based Panorama Capital led the funding, which had contributions from two strategic investors to be named later.
"What we're going to do is make Internet television possible," GridNetworks CEO Tony Naughtin said. "We make a true television experience that is compelling."
Mr. Naughtin said he hopes to persuade some of the largest studios to embrace GridCasting. The company would also like to embed its software into consumer devices.
The market for Internet-based video is poised to surge, according to analyst firm In-Stat. There were 540 million users last year, said analyst Gerry Kaufhold, and he estimates that number will grow to 4 billion by the end of the decade. Analysts said viewing Internet video on TV could prove a next logical step.
Many people will also be viewing it on mobile devices. Half of the new traffic is expected to come from handheld device users - not television sets - according to In-Stat research.
GridCasting uses P2P technology, which has increasingly found its way into legitimate forms of businesses beyond its early days of unauthorized sharing of music files.
LiveStation Gets $16 Million Infusion
Excerpted from MediaPost Report by Gavin O'Malley
LiveStation, the P2PTV service being readied by Microsoft and Skinkers, a British software developer, has received a boost in the form of a $16 million investment.
The funding - being provided by Acacia Capital, Spark Ventures, and internal management - is expected to help expedite the launch of LiveStation.
Presently in controlled beta testing, LiveStation is an extension of Microsoft's recently launched Silverlight plug-in media player, and is seen as a potential threat to recent P2PTV entrants like Joost and Veoh.
"Live TV, this isn't recorded TV being re-broadcast ... it is live, without delay," Don Dodge, a search manager and director of business development for Microsoft's emerging business team, wrote on his blog this summer. "Of course the technology could be modified to stream recorded shows or other types of content."
Microsoft is not the first blue-chip company to enlist Skinkers' services. In 2005, Dow Jones' Wall Street Journal Online launched a Desktop News Alerts service - which, with Skinkers' software, delivered business, tech, and news alerts directly to consumers' desktops.
"We believe Skinkers' innovative approach to the delivery of priority information gives them a unique position in the market," said Hitesh Mehta, General Partner at Acacia Capital Partners.
Better established in the UK, Skinkers has also worked with BBC News, BBC Sport, and Sky News.
The live streaming nature of LiveStation clearly differentiates it from rivals like Joost, which currently streams pre-recorded content, but has announced plans to introduce live TV in 2008.
"TV on your cell phone?" asked Dodge. "Silverlight runs on cell phones, so in the future LiveStation could deliver live TV directly to your cell phone or mobile device."
LiveStation currently rebroadcasts the BBC live, and is built on two research technologies, Pastry and SplitStream, from Microsoft's Cambridge Research Lab.
"Pastry is a type of P2P system called a 'distributed hash table,' which makes it easier for computers to find and store information, and to organize themselves for collaborative tasks," he explained.
"SplitStream is an application built on top of Pastry which allows real-time streams such as live video to be robustly distributed peer-to-peer."
Microsoft earlier this year launched Silverlight - a plug-in for playing media files and displaying interactive Web applications - as part of a full suite of cross-platform Web development tools for both Windows and Mac operating systems.
The company now faces the daunting task of convincing consumers that Silverlight is superior to established players like Adobe's omnipresent Flash.
Other companies that have offered live television over P2P include RawFlow, MediaZone, and Zattoo.
Cisco Plans New $100 Million Venture Fund
Excerpted from EETimes Report
Cisco Systems said Tuesday it will invest another $100 million in early-stage Indian technology companies, doubling venture funding it announced two years ago as part of its $1.1 billion investment plan here.
Opening the company's Globalization Center East campus here, Wim Elfrink, Cisco's Chief Globalization Officer, said, "India is at the heart of our globalization vision and provides a platform for Cisco to capitalize on the growth potential and lead market transitions in the emerging world."
The new Cisco facility will encourage collaboration for developing products for customers in emerging markets such as India, China, West Asia, Africa, Asia and Latin America.
The $50 million campus houses the largest data center outside the US, and will act as a focal point to show next-generation virtualization technologies and service-oriented network architectures.
Internet Tax Ban Bill Heads to White House
Excerpted from IDG News Report by Grant Gross
The US House of Representatives this week approved a bill that would extend the expiring moratorium on Internet taxes by seven years, the final step before the legislation heads to President Bush for his signature.
The House voted 402-0 to accept a version of the moratorium extension bill that was passed by the Senate last Thursday. The Senate proposed the seven-year extension, amending an earlier iteration of the bill that the House had approved with a four-year extension.
The current ban on access taxes and other Internet-only levies was scheduled to expire Thursday. The moratorium, which doesn't prevent the imposition of online sales taxes, has been in effect since 1998, except for a lapse during most of 2004.
President Bush is expected to sign the extension bill, which is officially named the Internet Tax Freedom Act Amendments Act. The President has supported the idea of an outright ban on Internet taxes, and he signed the last extension of the moratorium after it was passed by Congress in late 2004.
Many supporters of the moratorium had called for a permanent tax ban to be enacted now, but some lawmakers as well as state and local government groups voiced concerns that a permanent ban could hamper the future ability of government entities to raise money. Opponents also questioned whether telecommunications carriers would try to expand a permanent ban to cover services such as voice over IP (VoIP).
Senator John Sununu (R-NH) praised the House for approving the seven-year extension, which he jointly proposed along with Senator Tom Carper (D-DE) during the Senate's deliberations last week. The amendment put forward by Sununu and Carper also modified the original House bill to specifically exempt e-mail and instant messaging (IM) from any potential usage taxes.
"It's great to see Congress act on time for a change and take an enormous step for Internet tax freedom - banning access taxes and protecting e-mails and instant messaging for the next seven years," Sununu said in a statement. "I will continue to fight for a permanent ban on access taxes, but this is a strong step forward. Taxing the Internet is wrong for consumers and wrong for the economy."
The United States Telecom Association, a Washington-based trade group, and Verizon Communications both praised Congress for approving the proposed extension. Proponents of extending the moratorium say that continuing it will help promote the adoption of broadband services, which in turn should create new jobs and help drive the US economy.
File Sharing is Good for Big Music
Excerpted from Globe and Mail Report by Jack Kapica
Industry Canada, a ministry of the federal government, this week released a surprising study of P2P file sharing on the music industry.
The study is called The Impact of Music Downloads and P2P File-Sharing on the Purchase of Music: A Study for Industry Canada, and was written by Brigitte Andersen and Marion Frenz, of the Department of Management at the University of London in England.
Its conclusion: P2P file sharing does not put downward pressure on purchasing music, as the music industry has insisted for years. In fact, it does just the opposite: It tends to increase music purchasing. What?
This is, after all, a study released with the blessings of the federal government, not some self-serving poll commissioned by the music industry.
And this is from the same federal government that has indicated it wants to upset the balance that is so necessary to good copyright law to fall in line with what music and Tellywood industry lobbyists want.
The study said that in Canada, for every 12 P2P downloaded songs, music purchases increased by 0.44 CDs.
That means, the study's authors say, "downloading the equivalent of approximately one CD increases purchasing by about half of a CD."
Moreover, Industry Canada said it was "unable to find evidence of any relationship between P2P file sharing and purchases of electronically delivered music tracks such as iTunes."
The study concluded that about half of all P2P tracks were downloaded because individuals wanted to hear songs before buying them or because they wanted to avoid purchasing the whole bundle of songs on the associated CDs. Another quarter were downloaded because they were just not available in music stores.
The study said that the effect of a 1 per cent increase of downloading songs that were not available in stores was associated with nearly a 4 per cent increase in CD purchases, which suggests that people are really interested in buying CDs that the recording industry is not interested in promoting.
Needless to say, industry lobbyists will dismiss the study immediately; they have invested far took much time, money and effort mounting an intense campaign against the effect of the Internet on their businesses.
But this would not be the way to fight Industry Canada's study. To answer Industry Canada, the Canadian Recording Industry Association would have to do two things: It would have to come clean about the formula it uses to calculate the damage allegedly being done to its business by file-sharing, and it would have to come up with a manifestly independent study of its own, and release the entire thing to the public.
And I don't mean its study to be some quickie job done by the research arm of CRIA's public-relations company, which has produced several "studies" that have supported everything the industry claims.
There is another interesting issue here. Since the study was created with heavy input from Industry Canada (though there is a disclaimer in it that says the study's conclusions are not necessarily shared by the federal government), the government will be put in an interesting position should it cave into industry demands and craft a new copyright law that throws the entire copyright system out of balance, in favour of big business.
Or perhaps the government can use the study as a reason to balance proposed legislation. This will be interesting.
US Creating New P2P Network to Supersede Web
Excerpted from ZeroPaid.com Report
The US government is currently funding the development of a new P2P network that may someday supersede the web itself.
Dubbed the Infrastructure for Resilient Internet Systems (IRIS), the goal of this super-P2P network is to speed up searches and information transfer over the Internet and to discourage denial of service (DOS) attacks by hackers.
What the network aims to do is make information as redundant as possible so that users don't have to rely on a single server for data. They can instead rely on its popularity and the resulting duplication that thereby shares the traffic load over a number of hosts.
"It will stop servers from crashing under DOS attacks," said Hari Balakrishnan, a computer scientist based at MIT and a principal researcher on the project.
The technical problems evident in existing P2P networks that the team seeks to overcome center mainly around the fact that their decentralized nature make search queries slow and irregular. With no central server in place keeping track of all the data, users are tasked to fill the gap, with sometimes less than optimal results.
IRIS' design criteria is three-fold: 1) that as long as there is no physical break in the network the target file will always be found; 2) that adding more information to the network will not affect its performance; and 3) that machines can be added and removed from the network without any noticeable adverse affects.
"There is no single network that meets all these three properties as yet," said Balakrishnan.
Balakrishnan and his colleagues are developing a new search algorithm that will find a file on IRIS quickly with minimal increases in search time as total data storage size grows with the popularity of the network.
Balakrishnan hopes that IRIS will eventually be adopted globally as a default standard for information exchange. "We think IRIS should be used for more than just file sharing," he says.
The IRIS team is going to great lengths to develop algorithms that will prevent censorship and content filtering to ensure the free flow of information. "People are working in our team to prevent removal of information," he said. "I am not interested in censoring the publishing of information."
This means that file sharing will have a home in IRIS making its debut all the more anticipated.
IRIS will be developed over the next five years by researchers from five colleges and universities that include MIT and the University of California at Berkeley using a $12 million USD grant funded by the National Science Foundation.
Following on reports that China appears to be leading the way in P2P due to its relaxed regulatory environment, this is welcome news. The US may continue to be one of the pioneers in P2P and file-sharing services after all.
Stay tuned. We may just be entering a new file-sharing age, one where data is transferred quickly, anonymously, and on a global scale. Lookout BitTorrent, IRIS is coming!
Ohio University Hosts Forum on File Sharing
Excerpted from Chronicle of Higher Education Report
Earlier this year, Ohio University finished atop the recording industry's infamous list of institutions receiving the most copyright-infringement notices. But these days the university is singing a much happier tune: Campus officials say a ban on unauthorized P2P networking has cut down on infringement without restricting licensed file sharing.
Now that it's no longer perched on top of the music industry's most-wanted list, Ohio seems eager to join the debate over campus song swapping. Yesterday the university played host to a forum - called "P2P File Sharing: A 360° Perspective" - on its Athens campus, and it has posted video of the event online.
The discussion included veterans from both sides of the file-sharing wars, but it devoted considerable time to remarks from several musicians, songwriters, and agents - who argued that copyright infringement hurts not just platinum-selling artists and record-company CEO's, but also industry members who aren't nearly so well paid. As some of the speakers acknowledged, that argument can be a hard sell: Stewart Harris, president of Edisto Sound, bemoaned the fact that some college students in the crowd shook their heads when he referred to copyright infringement as "stealing."
Many college file swappers say they would like to offer financial support to the musicians they enjoy, according to officials at Illinois State University, which is conducting a series of in-depth campus-infringement studies. But the same students often say they have no desire to support the recording industry itself. Clearly, the industry's controversial lawsuit campaign has caused a backlash, and the Ohio event was at its most interesting when panelists discussed that theme.
Jonathan Lamy, a spokesman for the Recording Industry Association of America (RIAA), argued that the lawsuits jump-started "a national conversation, as painful as it may have been at times, that has generated a better understanding of the law."
"If our marketplace is the digital marketplace," he said, alluding to the rise of MP3s and the decline in CD sales, "we need to protect that."
But Timothy Vonville, President of the university's Student Senate, said the RIAA's methods of protecting its turf had deeply damaged the group's standing with college students. "The real problem is with the procedure and attitude adopted by organizations like the RIAA," he said. "Students feel intimidated. That's the truth."
And college students might start to act on their distaste for the recording industry, according to Mr. Vonville. Some college groups are considering a plan to protest the lawsuits, he said, by refusing to bring to their campuses any musical acts represented by the RIAA.
Groups Hit Comcast with Complaint for P2P Blocking
Excerpted from AppScout Report
Internet advocacy groups are none too pleased with Comcast. The Save the Internet coalition and several academics on Thursday filed a complaint with the FCC calling on the commission to stop Comcast from violating customer rights in the wake of reports that the ISP is cutting off service to file-sharing services.
Comcast earlier this year came under fire and last month the Associated Press printed a story in which it accused Comcast of using software from Sandvine to block customer access to P2P services like BitTorrent and Gnutella. Comcast admitted to "delaying" P2P traffic when traffic levels were high, but denied that P2P access was being blocked.
That "network management" explanation apparently didn't sit well with Internet advocates. "Comcast's defense is bogus," said Ben Scott, Policy Director of Free Press.
The FCC needs to declare the blocking of P2P networks a violation of an FCC Internet policy that guarantees consumer access to all content, applications, and services, according to a petition filed with the FCC.
"Comcast does not, has not, and will not block any websites or online applications, including P2P services, and no one has demonstrated otherwise," David L. Cohen, Executive Vice President at Comcast, said in a statement. "We engage in reasonable network management to provide all of our customers with a good Internet experience, and we do so consistently with FCC policy."
The FCC's Internet policy acknowledges that the web is subject to reasonable network management, Cohen said. "The commission clearly recognized that network management is necessary by ISPs for the good of all customers."
"The Commission has a choice," said Gigi Sohn, President & Co-Founder of Public Knowledge. "It can either protect consumers from the abuses of cable companies, or it can walk away and let cable companies chip away at the free and open Internet little by little until they can control consumer use of the network as they please."
The petition was filed by Free Press, Public Knowledge, Media Access Project, Consumer Federation of America, Consumers Union, the Information Society Project at Yale Law School, Charles Nesson of Harvard Law School and the Berkman Center for Internet & Society, and Barbara von Shewick of Stanford Law School and the Stanford Center for Internet & Society.
Free Press and Public Knowledge also filed a separate complaint against Comcast that asks the FCC to impose fines on Comcast for blocking P2P networks.
Coming Events of Interest
Streaming Media West - November 6th-8th in San Jose, CA. Streaming Media conferences have become the premier online video events in the world. Streaming Media West is totally focused on the business and technology of online video. The DCIA will participate featuring industry leading P2PTV providers and support services.
P2P MEDIA SUMMIT LV - January 6th in Las Vegas, NV. 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. The Conference will take place in N260 in the North Hall of the Las Vegas Convention Center and the Conference Luncheon in N262-264. This DCIA flagship event is a Conference within CES - the Consumer Electronics Show.
CCNC 2008 - The Fifth Annual IEEE Consumer Communications & Networking Conference, January 10th-12th at Harrahs, Las Vegas, NV. Now co-promoted by the DCIA. The latest research developments and technical solutions in the areas of home networking, consumer networking, enabling technologies (including middleware), and novel applications and services. See www.ieee-ccnc.org for details.
P2P ADVERTISING UPFRONT NY - Sponsored by the DCIA March 11th in New York, NY in conjunction with the Media Summit New York (MSNY). The industry's premiere marketplace focused on the unique global advertising, sponsorship, and cross-promotional opportunities available in the steadily growing universe of open and closed P2P, file-sharing, P2PTV, and social networks, as well as peer-assisted content delivery networks (CDNs).
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