June 20, 2011
Volume XXXV, Issue 7
Top 10 Consequences of 350 Million Connected TVs In 2015
Excerpted from Online Spin Report by Dave Morgan
As attendees to the Smart TV Summit in San Jose, CA last week learned, it is estimated that by the end of 2015 there will be 350 million computer-driven, Internet-connected televisions in the world.
Even if these estimates are off by 20%, it will still be an enormous number and will likely have extraordinary impact on the media and marketing industry. Today, for fun, I have created my list of the top ten consequences of there being 350 million connected TVs in the world in 2015. Here they are:
1. More TV viewing. Nielsen just told us that live viewing of TV in the US grew once again in Q1 2011 over Q1 2010. Imagine what the numbers are for all TV device usage if you include Netflix, gaming, and over-the-top (OTT) web video viewing? Connectivity and computational power means more content choices and a more robust experience. That means more TV.
2. Video becomes app-packaged. Just as we have seen content and services become "app-packaged" for delivery on smart-phones and connected tablets, so too will we see video become app-packaged on smart, connected TVs. Much of our TV channel paradigm will give way to TV apps.
3. Consumer electronics companies race to become the Apples and Googles of TV. Consumer electronics companies like Sony, Samsung, LG, Vizio, Roku, Microsoft, TiVo and many others will try to emulate what Apple has done in smart-phones and tablets and what Google has done on the web.
4. A la carte programming will pressure the business models of cable and satellite companies. If you're in the business of bundling dozens or hundreds of networks for packaged subscription sale, the inevitable emergence of a la carte programming - HBO Go, ESPN 360, MLB.com, Hulu, YouTube, etc - will create enormous pressure on companies that depend on consumers buying the entire package. The cable companies are already developing stand-alone offerings.
5. Not enough quality video content. As carriers, devices, and networks scale up to serve more video content and services to connected TV users, producers of quality, branded content will find it a seller's market. They will find more buyers than they can serve, and lots of control over margins and pricing.
6. Companion web services to video viewing. Unlike phones and tablets, TVs have enough screen space to support multiple simultaneous services at once. Anticipate a future where we're watching a prime-time show, viewing tweets from our friends, and getting GiltCity offers all at once.
7. Less desktop screen use, which will mean more use of other screens. I am with Steve Jobs on this one. The personal computer as we know it is going to be demoted. People will spend less of their time with computers. TV screens, along with smart-phones and tablets, will be promoted. People will spend much more time with them.
8. More device coordination. With the largest screens in the household now connected, we can expect much more coordination of services among the devices. Smart-phones and tablets will become remote controls. TVs might become video phones (yes, I know Ma Bell started promising us this one 40 years ago, to no avail).
9. TV swallows set-top boxes (STBs). The STB - the bastion of cable company control - may move into the TV, and programming subscriptions may become just another app, like Netflix is today. At the same time, we may see new STBs - maybe in our phones or tables - that will fight for control of the consumer video interface.
10. Disruption to all in the TV and video entertainment industry. The one certain consequence of a world with 350 million connected TVs is that every single company in all industries touching TV and video entertainment will be disrupted. Either they find a way to thrive in this world, or they will not survive.
Will Cloud Kill the Set-Top Box?
Excerpted from GigaOM Report by Ryan Lawler
At the NCTA Cable Show, Comcast CEO Brian Roberts showed off the next generation of the company's TV user interface. Built under the code name Xcalibur, Comcast's new user interface (UI) is already being tested by subscribers in Augusta, GA, with plans to possibly roll it out to more geographies soon.
More important than the UI update, however, is how it has been built and delivered. Behind Xcalibur is a cloud-based platform that moves the intelligence out of the set-top box (STB) and into the network. For consumers, the move to a cloud-based system will largely be seamless. But for Comcast, moving to the cloud means it will be able to build new features, improve the UI and iterate on its product more quickly and easily than if was building for individual STBs.
"What the cloud allows you to do is to have faster innovation," Roberts said. "Boxes have different generations, they become outdated. That doesn't happen in the cloud."
Not just that, but it allows Comcast to deliver TV and on-demand feeds to multiple devices with little extra work put into it. Comcast's plan, essentially, is to make the same UI available across multiple screens and devices within and outside of the homes. Already it has an iPad app, which lets users navigate their channel listings, on-demand video assets, and Xfinity online streaming videos. And it announced a partnership with Samsung at CES to build an app for connected TVs that will be available later this year.
The actual new features that Comcast showed off are pretty impressive, and include:
An improved search interface. Subscribers can use a new alpha-numeric keypad to search for relevant channels, shows and topics across live TV listings and on-demand titles.
More personalization. The interface remembers viewer favorites, including favorite TV shows, actors and sports teams - and can show viewers wherever those favorites are playing.
A better "back" function. Pushing "back" no longer just takes you to the last channel you were watching, but pulls up a list of the last several shows, channels or on-demand video titles you had navigated through.
A graphically rich on-demand UI. Comcast's On Demand assets are now better represented, with movie art and different categories of content.
Recommendations. Have you favorited a show or a movie? Then the new Comcast UI can suggest other titles like it.
Apps. The addition of Internet-enabled applications will let Comcast add more relevant non-TV content to the UI. Roberts showed off Weather, Traffic, Pandora and Facebook apps, but more will likely be added in future iterations.
Social hooks. The new UI allows users to share what they're watching on Facebook and Twitter. And the Facebook app lets them see what their friends like to watch, adding one more level of social recommendations to the system.
Comcast isn't the only video distributor building cloud-based solutions for its UI; Verizon, for instance, has had features like universal search and social features built into its FiOS pay TV offerings for years, as it helpfully reminded us in a press release issued today. Other operators, like Time Warner Cable, Dish Network, and Cablevision are also building cloud-based interfaces that could be viewed across multiple screens. We expect more to follow suit as the technology becomes more widely available.
As we've written before, not only will cloud-based cable interfaces enable operators to reach more screens, but they could potentially replace the STB altogether. After all, who needs a box when the same user experience can be delivered directly to the TV?
Report from CEO Marty Lafferty
 Congratulations to Ned and Paul Sherman and the entire Digital Media Wire (DMW) team on a very valuable and stimulating eighth annual Digital Media Conference East (DMCE).
The DCIA was honored to work with DMW in presenting a very special CONTENT IN THE CLOUD session at DMCE.
CONTENT IN THE CLOUD examined issues now affecting the adoption of technology solutions based on cloud computing for processing, storage, distribution, monetization, and analytics associated with high-value entertainment content delivery over public and private broadband networks.
As part of both the Digital Media and Law & Policy Tracks, CONTENT IN THE CLOUD explored the leading business issues and key legal considerations related to cloud computing solutions for content distribution.
We are very grateful to speakers David Dudas, Vice President of Product Management at Sorenson Media; Sean Jennings, Vice President of Solutions Architecture at Virtustream; Kshitij Kumar, Senior Vice President of Mobile Video at Concurrent; Charles Worthington, Manager of Altman Vilandrie & Company; Sean Sullivan, Media Industry Architect for Verizon Digital Media Services (VDMS); David Steinberg, CEO of SnappCloud; and Mike West, Chief Technology Officer and Co-Founder of GenosTV and the Genos Corporation.
David Dudas outlined Sorenson Media's cloud-based offerings that enable content rights-holders to convert video from one format to another and to access technologies in the cloud. From the law and policy perspective, he sees network neutrality issues as extremely important along with an enormous need for transparency in so-called last-mile connectivity and service parameters.
From the digital media business perspective, David cites the integration of ease-of-deployment; on-demand delivery; and scalability as key trends driven by the adoption of cloud computing in content ecosystems. With on-demand scalability, for example, geometric expansion is possible without purchasing additional servers. Many aspects of post production, special effects, and even digital-dailies delivery, have been radically transformed by Sorenson Media applying cloud solutions. The cloud is a true enabler of digital distribution, including better security, and it dramatically alters work flow.
Sean Jennings summarized Virtustream as an end-to-end cloud service provider with a ten-year history in driving vertical technologies focused on applying virtualization to scale. Among legal considerations, he views privacy protection as a high priority. There need to be assurances that third-parties are not collecting and using personal data without permission and, related to that, there need to be simpler disclosures about the ways online technologies function and clear ways to opt-in to certain functionalities.
Sean notes that many companies now have directives to explore and, if possible, adopt cloud solutions for various functions, and he is working with a number of them to determine the appropriateness of a cloud for their particular workflows.
Kshitij Kumar described how Tellytopia, the company he previously founded, has been integrated with his current company Concurrent, which supports real-time delivery of mobile video. With recent announcements in this space, including Apple's iCloud suite of services, that includes features providing a match for content on a consumer's device with cloud-based delivery of other versions of the same content in the highest possible quality to his/her other devices, there are a host of new legal considerations.
KK says it comes down to leveraging cloud-based technologies in order to put content up once and keep things simple in terms of distribution.
Charles Worthington explained that Altman Vilandrie is a telecommunications and technology consultancy that has executed a number of assignments in the area of consumer interaction with content in the cloud. For progress in this space to continue, ubiquitous broadband access is critical, much of which could be wireless. The FCC is attempting to open up more bandwidth and this can have important implications.
Charles relates business implications to end-user trends, such as how the advent of over-the-top (OTT) video will impact the fundamentals of the television programming business. While so far, there is not a lot of cord cutting going on for OTT alternatives, 18-34 year olds are increasingly considering it. Quality is still very important to consumers; paying customers insist on high-quality product and want to obtain content directly from providers themselves.
Sean Sullivan noted that Verizon introduced Verizon Digital Media Services this year, after three-years of development, to serve the growing market for cloud-based media delivery. The cloud still requires physical assets, and Verizon's data centers feature redundancy and resiliency on scale, which provides notable savings to digital distribution technologies. Cloud delivery can highlight legal and policy considerations that have been points of contention for a long time. Verizon wants to protect the integrity of content delivery and engages in painstaking processes to deliver content to consumers in ways that protect rights-holders.
Sean adds the insight that when entertainment content is acquired by consumers with rights to view or listen to it on multiple devices, which requires transcoding into numerous delivery formats and distribution at various bitrates, cloud technologies are particularly valuable. The younger generations already expect these solutions - for example, seamlessly and instantly to switch from the large fixed-screen viewing experience of a program to mobile reception of it and back again.
David Steinberg talked about his prior experience at SwapCroud in white-label back-up and storage, which grew to a 140 petabytes data center, and was sold to Symantec. Now SnappCloud is focused on defining responsibilities of a vendor holding customers' most valuable data. There is potential litigation coming around these issues. Cloud companies could benefit from the DCIA organizing ideas around these issues and establishing standard industry practices, and he would also like to see end user license agreements (EULAs) made more readable and standardized.
David hopes Apple has figured out a way to compensate rights-holders on an ongoing basis with its new services. "Remote" is a key attribute of cloud-based solutions: remote access to software, remote access to data, remote access to service integration, etc. Along with this, virtualization is expanding and having greater and greater impact on consumer services.
Mike West described GenosTV as an Internet protocol television (IPTV) virtual cable television system, delivered over existing broadband connections, and featuring unlimited channel capacity. The company's primary focus is on the live delivery of mainstream television programming via its cloud-supported technology within a compelling new user interface (UI) that drives very user-friendly navigation functionality. He discussed the need for content rights considerations to be streamlined for advanced digital distribution. Many legacy carriage arrangements need to be updated for new delivery technologies.
Mike sees putting high-value content "into the cloud" and making it accessible everywhere on every device - and doing so securely and with proper management systems and analytics - as not a trivial exercise. There are major implications for many of the seemingly small choices that need to be made in developing and deploying the processes for accomplishing this. Some of these transcend traditional policy and technology considerations and present new problem sets for rights-holders and distributors to solve together.
Audience questions and discussion focused on opportunities for using cloud-based technologies for education. An idea was presented to foster competitions among online virtual students and in-person classroom students, related to the qualitative as well as quantitative aspects of their learning.
From the consumer's standpoint cloud acceptance and adoption is progressing very well. Key concerns remain around transparency and equitable pricing as this evolution continues. Share wisely, and take care.
Warner Bros. Shares Files with BitTorrent
Excerpted from Hollywood Reporter Report
Warner Bros. Home Entertainment Group has become the first major studio to provide licensed video content via BitTorrent. Hollywood Reporter's Chris Marlowe touches on the physical versus digital media issue and notes that Warner Bros. already distributes via a closed peer-to-peer (P2P) network in northern Europe.
NY Times says TV shows will be about a buck each. No figure on movies yet while LA Times notes that BitTorrent is not quite as elegant and easy to use as iTunes.
If the latest Mac rumors are true - that Apple's next operating system will feature built-in BitTorrent support - it will be interesting to see which platform will carry what exclusives and at what prices.
More: In a thunder softening - if not thunder stealing announcement, FOX will begin offering "24," "The Shield," and "Prison Break" for $1.99 per episode on iTunes.
Netflix Is a Growing Threat to TV
Excerpted from Media Life Report by Bill Cromwell
Netflix has always been adamant about defining its services as a complement to traditional television, and not a replacement. The online rental service is dependent on partnerships with TV producers and doesn't want to antagonize them by appearing to be in competition with them.
But a new study finds that for many users, Netflix is not complementary to pay TV service. It's looking more and more like a substitute.
The Diffusion Group, an analysis and market strategy firm, finds that Netflix streamers, those who stream the service to their connected devices, are twice as likely to cut the cord as they were just a year ago, apparently satisfied that they can get all they need from Netflix rather than cable or satellite subscriptions.
Thirty-two percent of respondents said they were likely to downgrade their service over the next six months, compared to just 16 percent last year. The study's authors say that this indicates that Netflix has indeed become a threat to pay TV services, and that the growing use of Netflix will lead to service downgrades and cancellations over the coming years.
"Despite its rhetorical positioning, both Netflix and pay TV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing but antithetical to pay TV subscription levels," says Michael Greeson, TDG Founding Partner and Director of Research.
"The question for realistic observers has been not if this will occur but when. According to our latest research, that time is upon us."
Nearly half of the Netflix streamers surveyed cited economic concerns as the reason for cutting pay TV. But some simply prefer the convenience of the Netflix model. More than one-third said their growing use of online video was the reason for their desire to cut back, and among heavy Netflix streamers that percentage grew to 61%.
This certainly won't help the relationship between Netflix and content providers, which became more strained earlier this year when the online rental service announced plans for its first-ever original TV show, "House of Cards."
Following that acquisition, pay cable network Starz said it would delay the release of new shows on Netflix, while Showtime said it would no longer allow its originals to air on Netflix. Netflix has more than 23.6 million subscribers, more than Showtime or Starz, and added 3.6 million alone during first quarter of this year.
Bewkes: Put All TV on the Internet
Excerpted from Multichannel News Report by Mike Farrell
Time Warner Chairman & CEO Jeff Bewkes had a simple solution for distributors and content owners worried about how new technologies and devices will undermine their business models: make everything available on any device at anytime.
Bewkes, who coined and has championed the concept of TV Everywhere for years, told an audience at the Cable Show 2011 Tuesday that those worried about the impact of online video content and so-called cord-cutting, should just embrace technology and make everything available on any device.
"Put the TV on the Internet," Bewkes said at Tuesday's opening general session "Disruption Central: A Roadmap for Reward in a Shifting Marketplace." "Don't change the business model, don't charge people to use it and present it in a way that people are accustomed to."
Bewkes solution sounded much like Time Warner's own HBO Go product, which is available on any device to subscribers. But it seemed to resonate with other members of the panel.
Viacom CEO Philippe Dauman, who has battled with online distributors over rights to air its programming on the Internet, said copyright issues and ratings issues have to be resolved first.
"If we are ad supported, then we need to have measurement systems in place so we can sell ads," Dauman said. "That's the currency. We need to have the technology obstacles overcome and the monetization obstacles overcome."
But Dauman added that cable distributors and programmers have a long history of working together on joint initiatives like video on demand and products like Start Over and Look Back. That tradition should continue.
"I think it is important for our future success to continue to collaborate," Dauman said. "We need to serve consumers."
Comcast Cable President Neil Smit said that the need to fill consumer needs often gets lost in the debate. But he added that at least in Comcast's territory, customers are using products like the iPad and smart-phones as tools to make their viewing experiences better.
Smit estimated that about 50% of users of its iPad app use it as a tool, like remotely setting their digital video recorder (DVR).
"The iPad is an exciting tool to tie together various platforms," Smit said. "But we programmers and distributors need to be flexible. We need to work together collaboratively."
Bewkes also warned of taking the threat of cord cutting and online content too seriously, adding that the cable industry has managed to stay ahead of the game so far and is continuing to innovate.
"This is not the music industry. This is the cable industry. The reason consumers can get things on tablets and smart-phones is because of what people in this industry did," Bewkes said. "Next to the infrastructure is the most successful content in the world - the best stuff is the content that premiers on cable systems on TV screens."
He added that cable companies should take advantage of that position.
"While things are going great, what we have to do is put content on demand and put on a great interface, using the tools we already have and give it to the consumers that want it," Bewkes said.
Cox Communications CEO Patrick Esser agreed, adding that consumers are already telling operators what they want through their actions. He cited his company's TV Online application, which was downloaded by more than 100,000 people in the first day it was available.
"Consumers are sending us a loud, clear message," Esser said. "They value the products."
News Corp. Chief Operating Officer Chase Carey said that consumers are willing to pay for value and it is up to content providers to keep producing quality content.
Please click here for more Cable Show 2011 coverage.
AlcaLu & thePlatform Take on Cisco's Videoscape
Excerpted from Light Reading Cable Report
Alcatel-Lucent and Comcast-owned thePlatform Inc. have teamed up in an effort to help cable operators and other service providers extend the reach of their pay-TV services to connected TVs, tablets, smart-phones, and PCs.
The move puts the new partnership in direct competition with Cisco Systems, which is pitching a similar message with its Videoscape offering, though AlcaLu and thePlatform claim their ecosystem will be more open and modular than Cisco's. (See also AlcaLu, thePlatform Team On TV Everywhere and Can Videoscape Save Cisco's Set-Top Business?)
The new partners' offering includes AlcaLu's Multiscreen Content Delivery Network, which is based on the company's Velocix content delivery network (CDN) platform, and thePlatform's mpx video publishing and management system. They're also including software-based clients based on AlcaLu's IPTV client and thePlatform's HTML5-based player development kit (PDK) that handle the secure playback of live, linear TV and on-demand video on the target devices, from handheld displays all the way up to IP-connected big-screen TVs.
The system aims to "bring set-top-like protection" and quality to any device, says Derrick Frost, SVP of global IP video solutions at AlcaLu. He says at least one Tier 1 US cable operator is already using AlcaLu's CDN product.
The idea is to help service providers bridge the gap from their old TV-locked systems and "walled gardens" of content to one that can fulfill their vision for TV Everywhere while also supporting content and apps from Web-based sources. The idea is that this can all be done over managed IP infrastructure and CDNs that can be managed by the service operator.
"What we see are those two worlds colliding," Ian Blaine, CEO of thePlatform. "We think the rules of the game are changing worldwide for video and for pay-TV operators."
To keep the video experience consistent, the partners will rely on adaptive streaming, which adjusts bit rates and resolutions based on available bandwidth. In addition, their offering will include AppGlide, AlcaLu's recently launched video analytics tool for OTT video and CDNs. (See also AlcaLu Gets Down With OTT.)
Alcatel-Lucent, which claims to have 60 IPTV and 45 mobile TV deployments, will be taking the lead on selling the integrated system worldwide.
Although they could market this to companies that are eager to become virtual MSOs, delivering pay-TV packages over-the-top of others' infrastructure, the new partnership will initially target traditional service providers that operate their own access networks and infrastructure and are looking to migrate to an IP video platform. (See also Hulu: 'Virtual MSO' in the Making? and Is Roku a 'Virtual MSO'? )
For thePlatform, the deal should give it more traction outside North America and a growth path that extends well beyond its broadband TV background. AlcaLu, meanwhile, is trying to grab cable traction, and its partner happens to be working with several MSOs, including Comcast, Time Warner Cable, Cox Communications, and Rogers Communications among others.
Their tech combination will also apply pressure on Cisco and could make service providers less reliant on third-party CDN partners such as Level 3 Communications and Limelight Networks.
Theoretically, this set-up could enable MSOs to pitch subscription-TV services outside their regular franchise areas, as long as they obtained the rights to do so.
Comcast Develops Cloud-Based Video Storage Offering
Excerpted from Bloomberg News Report by Alex Sherman
Comcast, the largest US cable-TV provider, plans to start testing a video-recording service that lets customers store programs remotely on the company's server computers, rather than on their set-top boxes (STBs).
Comcast will test the so-called cloud-based recording service in some markets late this year or early next year, Chief Technology Officer (CTO) Tony Werner said in an interview at an industry event in Chicago, IL today.
The Philadelphia, PA based company is adding new services after losing basic cable-TV customers for at least four years amid competition from phone companies, satellite-TV providers, and Internet-video sites. A remote-storage service requires cable carriers to boost investment in their data centers, while allowing them to curb spending on STBs.
"We like the idea of a cloud DVR because you can virtually service your customers," Werner said. "We'll start to roll it out, see what the response is and go from there."
Werner said it was too early to know the initial markets or pricing for the new service. Cablevision, the New York, NY area cable operator, said in February it had started providing a remote-storage recording service in the city and that it had stopped buying physical digital video recorders (DVRs).
Comcast shares have gained 8.9% this year.
Verizon's Future Is in the Clouds
Excerpted from CNNMoney Report by Michal Lev-Ram
Verizon Communications is best known for operating cell-phone networks and fiber-optics-based TV and Internet offerings. But over the last couple of years, the company has made a big push in cloud computing services, which it says is key to future growth. That's why, last January, the New York-based carrier shelled out $1.4 billion to buy up cloud provider Terremark.
With the acquisition under its belt, Verizon says it's uniquely positioned to become a leading player in this booming industry. But it's not the only one betting big on the cloud - so is everyone from Hewlett-Packard to rival operator AT&T. And then there's Amazon, the as-of-yet undisputed leader in renting out server capacity. Compared to Amazon, Verizon is late to the game. So how does the carrier plan to catch up? I recently spoke with Chris Gesell, Verizon's chief cloud strategist, to find out where Verizon's cloud business stands today and where it's headed.
Why should companies choose Verizon's cloud computing platform?
We understand and manage global infrastructure and capacity - we've already proven this skill in managing our global networks. And we have the global data center assets to provide our cloud platform internationally. Just look at where our cloud is deployed today - we're already global. Also, this is a capital-intensive business, you need to build in advance of your customers being there. And we have the assets to do that.
What cloud services do you offer today?
About three and a half years ago we started contemplating the notion that IT was going to be moving towards a delivery model where customers pay for what they use. Now we've been in market for two years with the Verizon cloud computing offering. We've had our cloud platform deployed in multiple locations in the United States, Europe and Asia. With the recent acquisition of Terremark, we expanded our presence and added Latin America. We offer infrastructure as a service. But we haven't yet launched the classic definition of cloud storage capabilities - you'll be hearing more about that in the coming weeks.
Who are your customers?
We've targeted large enterprises, government, and medium-sized businesses. But with the Terremark acquisition we have the full suite of customers, from small to large. Customers include Mitsui, CA Technologies, and GWR Medical.
Who do you consider your biggest competitor?
Amazon was the first to market and is generally recognized as the largest revenue generator in the space today. But I think you'll see other companies entering this market. AT&T, from our view, is a couple of years behind us.
Why did you acquire Terremark and what are your plans for the subsidiary?
The Terremark acquisition was complementary to Verizon's current business. We were servicing enterprise customers and had data center customers around the world. But now this rounds out the portfolio nicely and helps give us high-growth markets in Latin America. We'll be talking more in the next few weeks about how we're going to bring these two businesses together.
Is the cloud key to Verizon's future? What kind of resources are you putting on these efforts?
It's absolutely an integral part of our future. Go look at the size of the Terremark acquisition if you want to see how important it is for us. That is a significant move. We spent many years building a strong brand in the consumer world but cloud is certainly critical to our growth and strategy.
Does the move towards being a provider of cloud infrastructure pose challenges for a company used to selling cell-phone service?
We have a long track record here, as Verizon has focused on the business segment for years. In fact, about 96% of the Fortune 500 are already customers that are doing business with Verizon. So we've been participating in the IT segment for a long, long time. And as this market evolves we feel that the cloud delivery model puts us in a better position than before to be in the IT market.
GoDaddy Unveils Its Take on Cloud Computing
Excerpted from GigaOM Report by Derrick Harris
It looks like web hosting giant GoDaddy is now in the cloud computing business with a new service called Data Center on Demand, which could potentially make a dent in the market share of providers such as Amazon Web Services or Rackspace. The service is currently in a limited-release phase and is expected to launch in July.
According to a marketing brochure for the service, GoDaddy plans to offer three options for users. However, all three levels provide fixed resource amounts for a monthly fee, with additional resources available "a la carte." This is a deviation from the standard infrastructure-as-a-service (IaaS) model of charging for resources on an hourly basis and allowing for the number of servers to be spun up or down on demand.
In a fairly major deviation from the standard IaaS value proposition, GoDaddy's offering also "requires technical expertise," so the company suggests customers have a professional IT staff in place. Arguably, IaaS always requires some degree of server administration know-how, but those tasks have been handled largely by developer-friendly APIs and GUIs.
Here's GoDaddy's disclaimer regarding its management process: "Currently, Data Center on Demand machines do not come with control panels installed. This means, to use Data Center on Demand, you should be comfortable managing machines' web services through shell commands (bash) or installing control panels yourself."
A GoDaddy spokesperson informed me that Data Center on Demand will, indeed, include a graphical interface for server management when the service is publicly available. I can attest to this, having seen screenshots of the interface in its current form.
GoDaddy's cloud uses Cloud.com's CloudStack private-cloud software for the resource-orchestration layer, making it one of many service providers white-labeling the Cloud.com product.
GoDaddy's take on IaaS looks like it has some shortcomings in terms of pricing flexibility, but the company does have household-name status and a large contingent of satisfied web-hosting customers from which to pull cloud users.
Not surprisingly coming from a domain-name registrar, too, GoDaddy is hosting the Data Center on Demand at least two URLs: datacenterondemand and elasticdatacenters.
The company's support forums seem to indicate that the service has been available to early users since some time in May.
Cloud Computing Goes Mainstream
Excerpted from USA Today Report by Kim Komando
Lately, we've been hearing a lot about cloud computing. Amazon's and Apple's recently announced cloud computing services have generated a lot of buzz.
But if you don't understand why cloud computing is the future of computers, you're not alone.
The "cloud" simply refers to the Internet. "Cloud computing" refers to software and services that run over the Internet. Webmail like Gmail and Hotmail are considered cloud computing.
You can access cloud computing services and data from virtually any web connection. Let's take a look at Amazon's and Apple's cloud services and the advantages they offer.
Amazon Cloud Drive provides 5 gigabytes of free storage. That holds about 1,000 songs, 2,000 photos, or 20 minutes of high-definition (HD) video. There is a 2 GB size limit per file. You can upload documents, videos, music, photos, and more.
You get unlimited access to your files from up-to-eight devices. Amazon will upgrade your account to 20 GB for a year at no charge. You just have to buy an MP3 album. If you need more storage, Amazon offers paid plans. They start at 20 GB and top-out at 1,000 GB (1 terabyte). You'll pay $1 per gigabyte per year. Plans renew automatically.
There are different ways to upload and download files. You can store MP3s purchased from Amazon on Cloud Drive automatically. Purchased music won't count against your storage limit. You can upload or download single files via your web browser.
To download multiple MP3s, you'll need the Amazon MP3 downloader. It runs on Windows XP, Vista and 7 and OS X. Clicking a music file from your account will open the Amazon Cloud Player. You can listen to your music directly from the web. You can only play MP3 files or AAC (M4A) files that are DRM-free. There's also a Cloud Player app for Android phones and tablets.
iCloud is a new service that replaces MobileMe. It is integrated into apps and iTunes. Some iCloud features appear in iTunes 10.3 beta, but the full roll-out is this fall. iCloud provides 5 GB of storage.
You can also store up to 20,000 songs purchased from iTunes. Other purchased content and photos don't count against your limit.
When you purchase a song from iTunes, you can download it to any of your devices. Past purchases are available, and you can have music downloaded automatically. You can't play music directly from iCloud. You must download it.
You probably have music purchased from another store or ripped from CD. In that case, there's iTunes Match ($25 yearly). It scans your music collection. You can listen to music already in iTunes. If music isn't available, you can upload it from your collection.
iCloud isn't just about music, though. Photo Stream syncs photos taken on your iOS device with other devices. You can view and download photos to other iOS devices, PCs, Macs and Apple TVs. A Photo Stream album containing your last 1,000 photos is created. New photos are stored for 30 days.
iCloud also backs up a variety of other data, like apps, text messages and iWork documents. You get a free email address that works across all your devices. And it stores your calendar and contacts and syncs entries across all your devices. If you choose, you can create a calendar to share with your entire family.
To get all the features of iCloud, you'll need iOS 5 on your iPhone, iPad or iPod touch. Mac users need OS X Lion. It is available in July for $30. Windows users need Vista or Windows 7. Outlook 2007 or 2010 is recommended for accessing contacts and calendars.
As users, we are in the midst of a paradigm shift. No longer are our data, music, media, photos. and documents tied to a particular computer at a specific location. When all this moves into the cloud, access to your files is literally at your fingertips.
Open-Source Cloud Taking Strong Hold
Excerpted from CRN Report by Andrew Hickey
Open Source cloud computing is becoming increasingly more pervasive and is fueling cloud adoption, a recent survey conducted by a trio of cloud vendors recently revealed.
The survey of more than 500 IT pros found that 69% use open-source software whenever possible in their cloud computing environments, while just three percent claim to not use open-source software at all. Additionally, all government cloud users said they use some form of open-source cloud software. The survey was conducted by open-source cloud software provider Cloud.com, cloud hosting provider BitRock, and cloud management player Zenoss.
The survey also revealed that the open-source Linux operating system is the dominant guest OS in the cloud, with 83% of IT pros queried saying they plan to deploy Linux as a guest OS, while 66% will be deploying Windows OSes in the cloud.
Meanwhile, among the users who do not use open-source software, 58% of them said they have no cloud computing strategy, the survey revealed.
Along with highlighting the use of open-source in the cloud, the Cloud.com, BitRock, and Zenoss survey also found that 61% of organizations are currently in the information gathering and planning stages, or have received approval for, but have not yet implemented, a cloud computing strategy. Twenty percent have already implemented cloud, while another
twenty percent have no cloud plans at this point.
As for what's driving cloud adoption, 68% said hardware savings was the No. 1 reason for moving to the cloud, while 66% said faster deployment of infrastructure and 57% said reducing systems management burden was their cloud catalyst.
Among the CTOs surveyed, 71% said scalability was the most popular reason for adopting cloud computing, which was followed by 61 percent citing elasticity or the need to adjust fluctuating resource demands.
Further, the survey revealed that most data center managers prefer private or dedicated cloud infrastructure in favor of public cloud infrastructure. The survey found that 70% of data center managers choose to deploy infrastructure on dedicated resources like dedicated server and data center resources, while 12% prefer to deploy their infrastructure in the public cloud.
Additionally, 57% of participants said they preferred to host their infrastructure on their own hardware; and 36% of respondents indicated that their preference was to run their infrastructure virtually but hosted on dedicated hardware at a managed data center.
Guidelines Expected to Boost Cloud Spending by $50 Billion
Excerpted from Bank Technology News Report by Penny Crossman
What holds banks back from using cloud computing? Confusion about what it is, concerns about security and delivery, and a lack of standards. To resolve that third point, the Open Data Center Alliance (ODCA) has released a set of guidelines for cloud computing vendors.
The Alliance came out with a set of guidelines for cloud providers and their customers this week. "Hopefully this will increase the investment in cloud among our membership and the industry, says Andrew Feig, Executive Director, Technology Advisory Group, GTIS at UBS and board member of the Alliance, who spoke to us yesterday. "Accelerating adoption should accelerate savings" for the members.
The group now has 280 members representing $100 billion in IT spend. These are all large corporations with vast networks of data centers. In addition to UBS, Deutsche Bank, JPMorgan Chase and NAB are members of the steering committee. Contributing members include ING and BBVA. All the firms have committed to using the guidelines in their purchasing decisions and many have already begun using them in their RFPs, RFIs and discussions with their vendors, Feig says.
The group expects to see cloud adoption grow by $50 billion between now and 2015, which should lead to a savings in annual IT spend of $25 billion annually, based on a 15% reduction in operational costs and Bain's $142 billion annual spending estimates.
But Feig sees such savings as a side benefit. "In the end, we want to adopt the best solutions for our businesses and anything that can help us get to those solutions faster, obviously time is money as well," he notes. "Some of the work we've done is in making a lot of the heavy lifting go away so we can focus on more of the real issues. That's really the goal, to take some of these non-differentiating problems we see out there off the table."
"For instance, if we had one way to start and stop a virtual machine across the technology vendors and providers, that's not something that differentiates one thing from another, but there are 10 different ways to do that across 10 different providers. That's 10 times the work we have to do as consumers of these systems. If we can level the playing field for some of these non-differentiating features, it should help us move faster."
The guidelines fall into four categories: security, automation, management-and-policy, and transparency. "These were the areas most outlined by our membership as focus areas," Feig says.
All the ODCA member firms have committed to using the guidelines in their purchasing decisions, Feig says.
The size of the cloud computing market varies by analyst firm. Market Monitor, a market-sizing service from The 451 Group and Tier1 Research, says the market will hit $16.7 billion by 2013, which represents a compound annual growth rate of 24% from 2010.
Gartner estimates that worldwide cloud services revenue will top $148.8 billion in 2014, up from $68.3 billion now, including both public and private cloud services.
IDC estimates that public cloud computing services have already exceeded - as of 2009 - $16 billion, and will reach $55 billion by 2014.
In addition to Intel, which is the initiator of the Alliance, Dell, EMC, Parallels and Redhat have all joined. Dell has a cloud offering, EMC sells a cloud in a box offering with vmWare; Redhat is also active in this space.
The security guidelines try to provide standard definitions. Bronze-level requirements will be for basic security, things like intercepting data in transit. Gold will be for financial organization security and will include more robust data protection. Platinum will be for military and defense level security.
All the guidelines are meant to cover both internal and external cloud deployments. "It's like commercial aviation and private aviation," Feig says. "There are some things that are different, but a lot of things are similar. There are some things that are more geared toward the public side than the private side, but at the end of the day, there's still a model that can be adopted. Moving things in and out of both should become easier."
The guidelines should make it easier for banks and other companies to do apples-to-apples comparisons between vendors, Feig says. "Everyone has an existing way of describing their services," he says. Standard descriptions and units of measure in the guidelines should help make these descriptions more parallel.
And they should help companies avoid vendor lock-in as they buy cloud services. "We're never going to get rid of all vendor lock-in," he acknowledges. "But if we get rid of non-differentiating lock-in and make it more standard, that will prevent some lock-in so I can move from provider A to provider B with minimal pain."
For a bank that's already begun building an internal cloud (as UBS, JPMorgan Chase, Morgan Stanley and many others have), adopting these guidelines shouldn't be too complicated, Feig says. "It depends how far along you are with your internal cloud," he says. "There's nothing in the framework that would be that intrusive. If you have an internal cloud, you probably have some of these things in place, it's just about using common terminology."
Coming Events of Interest
Cloud Leadership Forum - June 20th-21st in Santa Clara, CA. This conference's enterprise-focused agenda, prepared with the help of nearly a dozen IT executives, will bring you case studies and peer insights on how leading organizations are approaching the cloud opportunity - plus much more.
Cloud Computing World Forum - June 21st-22nd in London, England. This third annual event is free to attend and will will feature all of the key players within the cloud computing and software-as-a-service (SaaS) market providing an introduction, discussion and look into the future for the ICT industry.
TransmitCHINA Talks - September 14th-16th at the Great Wall of China. International leaders, thinkers, innovators, and creators will have an exclusive opportunity to hear a cross-section of preeminent thought leaders from some of the world's most innovative organizations in the digital and creative content ecosystem.
Top 10 Consequences of 350 Million Connected TVs In 2015
Excerpted from Online Spin Report by Dave Morgan
As attendees to the Smart TV Summit in San Jose, CA last week learned, it is estimated that by the end of 2015 there will be 350 million computer-driven, Internet-connected televisions in the world.
Even if these estimates are off by 20%, it will still be an enormous number and will likely have extraordinary impact on the media and marketing industry. Today, for fun, I have created my list of the top ten consequences of there being 350 million connected TVs in the world in 2015. Here they are:
1. More TV viewing. Nielsen just told us that live viewing of TV in the US grew once again in Q1 2011 over Q1 2010. Imagine what the numbers are for all TV device usage if you include Netflix, gaming, and over-the-top (OTT) web video viewing? Connectivity and computational power means more content choices and a more robust experience. That means more TV.
2. Video becomes app-packaged. Just as we have seen content and services become "app-packaged" for delivery on smart-phones and connected tablets, so too will we see video become app-packaged on smart, connected TVs. Much of our TV channel paradigm will give way to TV apps.
3. Consumer electronics companies race to become the Apples and Googles of TV. Consumer electronics companies like Sony, Samsung, LG, Vizio, Roku, Microsoft, TiVo and many others will try to emulate what Apple has done in smart-phones and tablets and what Google has done on the web.
4. A la carte programming will pressure the business models of cable and satellite companies. If you're in the business of bundling dozens or hundreds of networks for packaged subscription sale, the inevitable emergence of a la carte programming - HBO Go, ESPN 360, MLB.com, Hulu, YouTube, etc - will create enormous pressure on companies that depend on consumers buying the entire package. The cable companies are already developing stand-alone offerings.
5. Not enough quality video content. As carriers, devices, and networks scale up to serve more video content and services to connected TV users, producers of quality, branded content will find it a seller's market. They will find more buyers than they can serve, and lots of control over margins and pricing.
6. Companion web services to video viewing. Unlike phones and tablets, TVs have enough screen space to support multiple simultaneous services at once. Anticipate a future where we're watching a prime-time show, viewing tweets from our friends, and getting GiltCity offers all at once.
7. Less desktop screen use, which will mean more use of other screens. I am with Steve Jobs on this one. The personal computer as we know it is going to be demoted. People will spend less of their time with computers. TV screens, along with smart-phones and tablets, will be promoted. People will spend much more time with them.
8. More device coordination. With the largest screens in the household now connected, we can expect much more coordination of services among the devices. Smart-phones and tablets will become remote controls. TVs might become video phones (yes, I know Ma Bell started promising us this one 40 years ago, to no avail).
9. TV swallows set-top boxes (STBs). The STB - the bastion of cable company control - may move into the TV, and programming subscriptions may become just another app, like Netflix is today. At the same time, we may see new STBs - maybe in our phones or tables - that will fight for control of the consumer video interface.
10. Disruption to all in the TV and video entertainment industry. The one certain consequence of a world with 350 million connected TVs is that every single company in all industries touching TV and video entertainment will be disrupted. Either they find a way to thrive in this world, or they will not survive.
Will Cloud Kill the Set-Top Box?
Excerpted from GigaOM Report by Ryan Lawler
At the NCTA Cable Show, Comcast CEO Brian Roberts showed off the next generation of the company's TV user interface. Built under the code name Xcalibur, Comcast's new user interface (UI) is already being tested by subscribers in Augusta, GA, with plans to possibly roll it out to more geographies soon.
More important than the UI update, however, is how it has been built and delivered. Behind Xcalibur is a cloud-based platform that moves the intelligence out of the set-top box (STB) and into the network. For consumers, the move to a cloud-based system will largely be seamless. But for Comcast, moving to the cloud means it will be able to build new features, improve the UI and iterate on its product more quickly and easily than if was building for individual STBs.
"What the cloud allows you to do is to have faster innovation," Roberts said. "Boxes have different generations, they become outdated. That doesn't happen in the cloud."
Not just that, but it allows Comcast to deliver TV and on-demand feeds to multiple devices with little extra work put into it. Comcast's plan, essentially, is to make the same UI available across multiple screens and devices within and outside of the homes. Already it has an iPad app, which lets users navigate their channel listings, on-demand video assets, and Xfinity online streaming videos. And it announced a partnership with Samsung at CES to build an app for connected TVs that will be available later this year.
The actual new features that Comcast showed off are pretty impressive, and include:
An improved search interface. Subscribers can use a new alpha-numeric keypad to search for relevant channels, shows and topics across live TV listings and on-demand titles.
More personalization. The interface remembers viewer favorites, including favorite TV shows, actors and sports teams - and can show viewers wherever those favorites are playing.
A better "back" function. Pushing "back" no longer just takes you to the last channel you were watching, but pulls up a list of the last several shows, channels or on-demand video titles you had navigated through.
A graphically rich on-demand UI. Comcast's On Demand assets are now better represented, with movie art and different categories of content.
Recommendations. Have you favorited a show or a movie? Then the new Comcast UI can suggest other titles like it.
Apps. The addition of Internet-enabled applications will let Comcast add more relevant non-TV content to the UI. Roberts showed off Weather, Traffic, Pandora and Facebook apps, but more will likely be added in future iterations.
Social hooks. The new UI allows users to share what they're watching on Facebook and Twitter. And the Facebook app lets them see what their friends like to watch, adding one more level of social recommendations to the system.
Comcast isn't the only video distributor building cloud-based solutions for its UI; Verizon, for instance, has had features like universal search and social features built into its FiOS pay TV offerings for years, as it helpfully reminded us in a press release issued today. Other operators, like Time Warner Cable, Dish Network, and Cablevision are also building cloud-based interfaces that could be viewed across multiple screens. We expect more to follow suit as the technology becomes more widely available.
As we've written before, not only will cloud-based cable interfaces enable operators to reach more screens, but they could potentially replace the STB altogether. After all, who needs a box when the same user experience can be delivered directly to the TV?
Report from CEO Marty Lafferty
Congratulations to Ned and Paul Sherman and the entire Digital Media Wire (DMW) team on a very valuable and stimulating eighth annual Digital Media Conference East (DMCE).
The DCIA was honored to work with DMW in presenting a very special CONTENT IN THE CLOUD session at DMCE.
CONTENT IN THE CLOUD examined issues now affecting the adoption of technology solutions based on cloud computing for processing, storage, distribution, monetization, and analytics associated with high-value entertainment content delivery over public and private broadband networks.
As part of both the Digital Media and Law & Policy Tracks, CONTENT IN THE CLOUD explored the leading business issues and key legal considerations related to cloud computing solutions for content distribution.
We are very grateful to speakers David Dudas, Vice President of Product Management at Sorenson Media; Sean Jennings, Vice President of Solutions Architecture at Virtustream; Kshitij Kumar, Senior Vice President of Mobile Video at Concurrent; Charles Worthington, Manager of Altman Vilandrie & Company; Sean Sullivan, Media Industry Architect for Verizon Digital Media Services (VDMS); David Steinberg, CEO of SnappCloud; and Mike West, Chief Technology Officer and Co-Founder of GenosTV and the Genos Corporation.
David Dudas outlined Sorenson Media's cloud-based offerings that enable content rights-holders to convert video from one format to another and to access technologies in the cloud. From the law and policy perspective, he sees network neutrality issues as extremely important along with an enormous need for transparency in so-called last-mile connectivity and service parameters.
From the digital media business perspective, David cites the integration of ease-of-deployment; on-demand delivery; and scalability as key trends driven by the adoption of cloud computing in content ecosystems. With on-demand scalability, for example, geometric expansion is possible without purchasing additional servers. Many aspects of post production, special effects, and even digital-dailies delivery, have been radically transformed by Sorenson Media applying cloud solutions. The cloud is a true enabler of digital distribution, including better security, and it dramatically alters work flow.
Sean Jennings summarized Virtustream as an end-to-end cloud service provider with a ten-year history in driving vertical technologies focused on applying virtualization to scale. Among legal considerations, he views privacy protection as a high priority. There need to be assurances that third-parties are not collecting and using personal data without permission and, related to that, there need to be simpler disclosures about the ways online technologies function and clear ways to opt-in to certain functionalities.
Sean notes that many companies now have directives to explore and, if possible, adopt cloud solutions for various functions, and he is working with a number of them to determine the appropriateness of a cloud for their particular workflows.
Kshitij Kumar described how Tellytopia, the company he previously founded, has been integrated with his current company Concurrent, which supports real-time delivery of mobile video. With recent announcements in this space, including Apple's iCloud suite of services, that includes features providing a match for content on a consumer's device with cloud-based delivery of other versions of the same content in the highest possible quality to his/her other devices, there are a host of new legal considerations.
KK says it comes down to leveraging cloud-based technologies in order to put content up once and keep things simple in terms of distribution.
Charles Worthington explained that Altman Vilandrie is a telecommunications and technology consultancy that has executed a number of assignments in the area of consumer interaction with content in the cloud. For progress in this space to continue, ubiquitous broadband access is critical, much of which could be wireless. The FCC is attempting to open up more bandwidth and this can have important implications.
Charles relates business implications to end-user trends, such as how the advent of over-the-top (OTT) video will impact the fundamentals of the television programming business. While so far, there is not a lot of cord cutting going on for OTT alternatives, 18-34 year olds are increasingly considering it. Quality is still very important to consumers; paying customers insist on high-quality product and want to obtain content directly from providers themselves.
Sean Sullivan noted that Verizon introduced Verizon Digital Media Services this year, after three-years of development, to serve the growing market for cloud-based media delivery. The cloud still requires physical assets, and Verizon's data centers feature redundancy and resiliency on scale, which provides notable savings to digital distribution technologies. Cloud delivery can highlight legal and policy considerations that have been points of contention for a long time. Verizon wants to protect the integrity of content delivery and engages in painstaking processes to deliver content to consumers in ways that protect rights-holders.
Sean adds the insight that when entertainment content is acquired by consumers with rights to view or listen to it on multiple devices, which requires transcoding into numerous delivery formats and distribution at various bitrates, cloud technologies are particularly valuable. The younger generations already expect these solutions - for example, seamlessly and instantly to switch from the large fixed-screen viewing experience of a program to mobile reception of it and back again.
David Steinberg talked about his prior experience at SwapCroud in white-label back-up and storage, which grew to a 140 petabytes data center, and was sold to Symantec. Now SnappCloud is focused on defining responsibilities of a vendor holding customers' most valuable data. There is potential litigation coming around these issues. Cloud companies could benefit from the DCIA organizing ideas around these issues and establishing standard industry practices, and he would also like to see end user license agreements (EULAs) made more readable and standardized.
David hopes Apple has figured out a way to compensate rights-holders on an ongoing basis with its new services. "Remote" is a key attribute of cloud-based solutions: remote access to software, remote access to data, remote access to service integration, etc. Along with this, virtualization is expanding and having greater and greater impact on consumer services.
Mike West described GenosTV as an Internet protocol television (IPTV) virtual cable television system, delivered over existing broadband connections, and featuring unlimited channel capacity. The company's primary focus is on the live delivery of mainstream television programming via its cloud-supported technology within a compelling new user interface (UI) that drives very user-friendly navigation functionality. He discussed the need for content rights considerations to be streamlined for advanced digital distribution. Many legacy carriage arrangements need to be updated for new delivery technologies.
Mike sees putting high-value content "into the cloud" and making it accessible everywhere on every device - and doing so securely and with proper management systems and analytics - as not a trivial exercise. There are major implications for many of the seemingly small choices that need to be made in developing and deploying the processes for accomplishing this. Some of these transcend traditional policy and technology considerations and present new problem sets for rights-holders and distributors to solve together.
Audience questions and discussion focused on opportunities for using cloud-based technologies for education. An idea was presented to foster competitions among online virtual students and in-person classroom students, related to the qualitative as well as quantitative aspects of their learning.
From the consumer's standpoint cloud acceptance and adoption is progressing very well. Key concerns remain around transparency and equitable pricing as this evolution continues. Share wisely, and take care.
Warner Bros. Shares Files with BitTorrent
Excerpted from Hollywood Reporter Report
Warner Bros. Home Entertainment Group has become the first major studio to provide licensed video content via BitTorrent. Hollywood Reporter's Chris Marlowe touches on the physical versus digital media issue and notes that Warner Bros. already distributes via a closed peer-to-peer (P2P) network in northern Europe.
NY Times says TV shows will be about a buck each. No figure on movies yet while LA Times notes that BitTorrent is not quite as elegant and easy to use as iTunes.
If the latest Mac rumors are true - that Apple's next operating system will feature built-in BitTorrent support - it will be interesting to see which platform will carry what exclusives and at what prices.
More: In a thunder softening - if not thunder stealing announcement, FOX will begin offering "24," "The Shield," and "Prison Break" for $1.99 per episode on iTunes.
Netflix Is a Growing Threat to TV
Excerpted from Media Life Report by Bill Cromwell
Netflix has always been adamant about defining its services as a complement to traditional television, and not a replacement. The online rental service is dependent on partnerships with TV producers and doesn't want to antagonize them by appearing to be in competition with them.
But a new study finds that for many users, Netflix is not complementary to pay TV service. It's looking more and more like a substitute.
The Diffusion Group, an analysis and market strategy firm, finds that Netflix streamers, those who stream the service to their connected devices, are twice as likely to cut the cord as they were just a year ago, apparently satisfied that they can get all they need from Netflix rather than cable or satellite subscriptions.
Thirty-two percent of respondents said they were likely to downgrade their service over the next six months, compared to just 16 percent last year. The study's authors say that this indicates that Netflix has indeed become a threat to pay TV services, and that the growing use of Netflix will lead to service downgrades and cancellations over the coming years.
"Despite its rhetorical positioning, both Netflix and pay TV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing but antithetical to pay TV subscription levels," says Michael Greeson, TDG Founding Partner and Director of Research.
"The question for realistic observers has been not if this will occur but when. According to our latest research, that time is upon us."
Nearly half of the Netflix streamers surveyed cited economic concerns as the reason for cutting pay TV. But some simply prefer the convenience of the Netflix model. More than one-third said their growing use of online video was the reason for their desire to cut back, and among heavy Netflix streamers that percentage grew to 61%.
This certainly won't help the relationship between Netflix and content providers, which became more strained earlier this year when the online rental service announced plans for its first-ever original TV show, "House of Cards."
Following that acquisition, pay cable network Starz said it would delay the release of new shows on Netflix, while Showtime said it would no longer allow its originals to air on Netflix. Netflix has more than 23.6 million subscribers, more than Showtime or Starz, and added 3.6 million alone during first quarter of this year.
Bewkes: Put All TV on the Internet
Excerpted from Multichannel News Report by Mike Farrell
Time Warner Chairman & CEO Jeff Bewkes had a simple solution for distributors and content owners worried about how new technologies and devices will undermine their business models: make everything available on any device at anytime.
Bewkes, who coined and has championed the concept of TV Everywhere for years, told an audience at the Cable Show 2011 Tuesday that those worried about the impact of online video content and so-called cord-cutting, should just embrace technology and make everything available on any device.
"Put the TV on the Internet," Bewkes said at Tuesday's opening general session "Disruption Central: A Roadmap for Reward in a Shifting Marketplace." "Don't change the business model, don't charge people to use it and present it in a way that people are accustomed to."
Bewkes solution sounded much like Time Warner's own HBO Go product, which is available on any device to subscribers. But it seemed to resonate with other members of the panel.
Viacom CEO Philippe Dauman, who has battled with online distributors over rights to air its programming on the Internet, said copyright issues and ratings issues have to be resolved first.
"If we are ad supported, then we need to have measurement systems in place so we can sell ads," Dauman said. "That's the currency. We need to have the technology obstacles overcome and the monetization obstacles overcome."
But Dauman added that cable distributors and programmers have a long history of working together on joint initiatives like video on demand and products like Start Over and Look Back. That tradition should continue.
"I think it is important for our future success to continue to collaborate," Dauman said. "We need to serve consumers."
Comcast Cable President Neil Smit said that the need to fill consumer needs often gets lost in the debate. But he added that at least in Comcast's territory, customers are using products like the iPad and smart-phones as tools to make their viewing experiences better.
Smit estimated that about 50% of users of its iPad app use it as a tool, like remotely setting their digital video recorder (DVR).
"The iPad is an exciting tool to tie together various platforms," Smit said. "But we programmers and distributors need to be flexible. We need to work together collaboratively."
Bewkes also warned of taking the threat of cord cutting and online content too seriously, adding that the cable industry has managed to stay ahead of the game so far and is continuing to innovate.
"This is not the music industry. This is the cable industry. The reason consumers can get things on tablets and smart-phones is because of what people in this industry did," Bewkes said. "Next to the infrastructure is the most successful content in the world - the best stuff is the content that premiers on cable systems on TV screens."
He added that cable companies should take advantage of that position.
"While things are going great, what we have to do is put content on demand and put on a great interface, using the tools we already have and give it to the consumers that want it," Bewkes said.
Cox Communications CEO Patrick Esser agreed, adding that consumers are already telling operators what they want through their actions. He cited his company's TV Online application, which was downloaded by more than 100,000 people in the first day it was available.
"Consumers are sending us a loud, clear message," Esser said. "They value the products."
News Corp. Chief Operating Officer Chase Carey said that consumers are willing to pay for value and it is up to content providers to keep producing quality content.
Please click here for more Cable Show 2011 coverage.
AlcaLu & thePlatform Take on Cisco's Videoscape
Excerpted from Light Reading Cable Report
Alcatel-Lucent and Comcast-owned thePlatform Inc. have teamed up in an effort to help cable operators and other service providers extend the reach of their pay-TV services to connected TVs, tablets, smart-phones, and PCs.
The move puts the new partnership in direct competition with Cisco Systems, which is pitching a similar message with its Videoscape offering, though AlcaLu and thePlatform claim their ecosystem will be more open and modular than Cisco's. (See also AlcaLu, thePlatform Team On TV Everywhere and Can Videoscape Save Cisco's Set-Top Business?)
The new partners' offering includes AlcaLu's Multiscreen Content Delivery Network, which is based on the company's Velocix content delivery network (CDN) platform, and thePlatform's mpx video publishing and management system. They're also including software-based clients based on AlcaLu's IPTV client and thePlatform's HTML5-based player development kit (PDK) that handle the secure playback of live, linear TV and on-demand video on the target devices, from handheld displays all the way up to IP-connected big-screen TVs.
The system aims to "bring set-top-like protection" and quality to any device, says Derrick Frost, SVP of global IP video solutions at AlcaLu. He says at least one Tier 1 US cable operator is already using AlcaLu's CDN product.
The idea is to help service providers bridge the gap from their old TV-locked systems and "walled gardens" of content to one that can fulfill their vision for TV Everywhere while also supporting content and apps from Web-based sources. The idea is that this can all be done over managed IP infrastructure and CDNs that can be managed by the service operator.
"What we see are those two worlds colliding," Ian Blaine, CEO of thePlatform. "We think the rules of the game are changing worldwide for video and for pay-TV operators."
To keep the video experience consistent, the partners will rely on adaptive streaming, which adjusts bit rates and resolutions based on available bandwidth. In addition, their offering will include AppGlide, AlcaLu's recently launched video analytics tool for OTT video and CDNs. (See also AlcaLu Gets Down With OTT.)
Alcatel-Lucent, which claims to have 60 IPTV and 45 mobile TV deployments, will be taking the lead on selling the integrated system worldwide.
Although they could market this to companies that are eager to become virtual MSOs, delivering pay-TV packages over-the-top of others' infrastructure, the new partnership will initially target traditional service providers that operate their own access networks and infrastructure and are looking to migrate to an IP video platform. (See also Hulu: 'Virtual MSO' in the Making? and Is Roku a 'Virtual MSO'? )
For thePlatform, the deal should give it more traction outside North America and a growth path that extends well beyond its broadband TV background. AlcaLu, meanwhile, is trying to grab cable traction, and its partner happens to be working with several MSOs, including Comcast, Time Warner Cable, Cox Communications, and Rogers Communications among others.
Their tech combination will also apply pressure on Cisco and could make service providers less reliant on third-party CDN partners such as Level 3 Communications and Limelight Networks.
Theoretically, this set-up could enable MSOs to pitch subscription-TV services outside their regular franchise areas, as long as they obtained the rights to do so.
Comcast Develops Cloud-Based Video Storage Offering
Excerpted from Bloomberg News Report by Alex Sherman
Comcast, the largest US cable-TV provider, plans to start testing a video-recording service that lets customers store programs remotely on the company's server computers, rather than on their set-top boxes (STBs).
Comcast will test the so-called cloud-based recording service in some markets late this year or early next year, Chief Technology Officer (CTO) Tony Werner said in an interview at an industry event in Chicago, IL today.
The Philadelphia, PA based company is adding new services after losing basic cable-TV customers for at least four years amid competition from phone companies, satellite-TV providers, and Internet-video sites. A remote-storage service requires cable carriers to boost investment in their data centers, while allowing them to curb spending on STBs.
"We like the idea of a cloud DVR because you can virtually service your customers," Werner said. "We'll start to roll it out, see what the response is and go from there."
Werner said it was too early to know the initial markets or pricing for the new service. Cablevision, the New York, NY area cable operator, said in February it had started providing a remote-storage recording service in the city and that it had stopped buying physical digital video recorders (DVRs).
Comcast shares have gained 8.9% this year.
Verizon's Future Is in the Clouds
Excerpted from CNNMoney Report by Michal Lev-Ram
Verizon Communications is best known for operating cell-phone networks and fiber-optics-based TV and Internet offerings. But over the last couple of years, the company has made a big push in cloud computing services, which it says is key to future growth. That's why, last January, the New York-based carrier shelled out $1.4 billion to buy up cloud provider Terremark.
With the acquisition under its belt, Verizon says it's uniquely positioned to become a leading player in this booming industry. But it's not the only one betting big on the cloud - so is everyone from Hewlett-Packard to rival operator AT&T. And then there's Amazon, the as-of-yet undisputed leader in renting out server capacity. Compared to Amazon, Verizon is late to the game. So how does the carrier plan to catch up? I recently spoke with Chris Gesell, Verizon's chief cloud strategist, to find out where Verizon's cloud business stands today and where it's headed.
Why should companies choose Verizon's cloud computing platform?
We understand and manage global infrastructure and capacity - we've already proven this skill in managing our global networks. And we have the global data center assets to provide our cloud platform internationally. Just look at where our cloud is deployed today - we're already global. Also, this is a capital-intensive business, you need to build in advance of your customers being there. And we have the assets to do that.
What cloud services do you offer today?
About three and a half years ago we started contemplating the notion that IT was going to be moving towards a delivery model where customers pay for what they use. Now we've been in market for two years with the Verizon cloud computing offering. We've had our cloud platform deployed in multiple locations in the United States, Europe and Asia. With the recent acquisition of Terremark, we expanded our presence and added Latin America. We offer infrastructure as a service. But we haven't yet launched the classic definition of cloud storage capabilities - you'll be hearing more about that in the coming weeks.
Who are your customers?
We've targeted large enterprises, government, and medium-sized businesses. But with the Terremark acquisition we have the full suite of customers, from small to large. Customers include Mitsui, CA Technologies, and GWR Medical.
Who do you consider your biggest competitor?
Amazon was the first to market and is generally recognized as the largest revenue generator in the space today. But I think you'll see other companies entering this market. AT&T, from our view, is a couple of years behind us.
Why did you acquire Terremark and what are your plans for the subsidiary?
The Terremark acquisition was complementary to Verizon's current business. We were servicing enterprise customers and had data center customers around the world. But now this rounds out the portfolio nicely and helps give us high-growth markets in Latin America. We'll be talking more in the next few weeks about how we're going to bring these two businesses together.
Is the cloud key to Verizon's future? What kind of resources are you putting on these efforts?
It's absolutely an integral part of our future. Go look at the size of the Terremark acquisition if you want to see how important it is for us. That is a significant move. We spent many years building a strong brand in the consumer world but cloud is certainly critical to our growth and strategy.
Does the move towards being a provider of cloud infrastructure pose challenges for a company used to selling cell-phone service?
We have a long track record here, as Verizon has focused on the business segment for years. In fact, about 96% of the Fortune 500 are already customers that are doing business with Verizon. So we've been participating in the IT segment for a long, long time. And as this market evolves we feel that the cloud delivery model puts us in a better position than before to be in the IT market.
GoDaddy Unveils Its Take on Cloud Computing
Excerpted from GigaOM Report by Derrick Harris
It looks like web hosting giant GoDaddy is now in the cloud computing business with a new service called Data Center on Demand, which could potentially make a dent in the market share of providers such as Amazon Web Services or Rackspace. The service is currently in a limited-release phase and is expected to launch in July.
According to a marketing brochure for the service, GoDaddy plans to offer three options for users. However, all three levels provide fixed resource amounts for a monthly fee, with additional resources available "a la carte." This is a deviation from the standard infrastructure-as-a-service (IaaS) model of charging for resources on an hourly basis and allowing for the number of servers to be spun up or down on demand.
In a fairly major deviation from the standard IaaS value proposition, GoDaddy's offering also "requires technical expertise," so the company suggests customers have a professional IT staff in place. Arguably, IaaS always requires some degree of server administration know-how, but those tasks have been handled largely by developer-friendly APIs and GUIs.
Here's GoDaddy's disclaimer regarding its management process: "Currently, Data Center on Demand machines do not come with control panels installed. This means, to use Data Center on Demand, you should be comfortable managing machines' web services through shell commands (bash) or installing control panels yourself."
A GoDaddy spokesperson informed me that Data Center on Demand will, indeed, include a graphical interface for server management when the service is publicly available. I can attest to this, having seen screenshots of the interface in its current form.
GoDaddy's cloud uses Cloud.com's CloudStack private-cloud software for the resource-orchestration layer, making it one of many service providers white-labeling the Cloud.com product.
GoDaddy's take on IaaS looks like it has some shortcomings in terms of pricing flexibility, but the company does have household-name status and a large contingent of satisfied web-hosting customers from which to pull cloud users.
Not surprisingly coming from a domain-name registrar, too, GoDaddy is hosting the Data Center on Demand at least two URLs: datacenterondemand and elasticdatacenters.
The company's support forums seem to indicate that the service has been available to early users since some time in May.
Cloud Computing Goes Mainstream
Excerpted from USA Today Report by Kim Komando
Lately, we've been hearing a lot about cloud computing. Amazon's and Apple's recently announced cloud computing services have generated a lot of buzz.
But if you don't understand why cloud computing is the future of computers, you're not alone.
The "cloud" simply refers to the Internet. "Cloud computing" refers to software and services that run over the Internet. Webmail like Gmail and Hotmail are considered cloud computing.
You can access cloud computing services and data from virtually any web connection. Let's take a look at Amazon's and Apple's cloud services and the advantages they offer.
Amazon Cloud Drive provides 5 gigabytes of free storage. That holds about 1,000 songs, 2,000 photos, or 20 minutes of high-definition (HD) video. There is a 2 GB size limit per file. You can upload documents, videos, music, photos, and more.
You get unlimited access to your files from up-to-eight devices. Amazon will upgrade your account to 20 GB for a year at no charge. You just have to buy an MP3 album. If you need more storage, Amazon offers paid plans. They start at 20 GB and top-out at 1,000 GB (1 terabyte). You'll pay $1 per gigabyte per year. Plans renew automatically.
There are different ways to upload and download files. You can store MP3s purchased from Amazon on Cloud Drive automatically. Purchased music won't count against your storage limit. You can upload or download single files via your web browser.
To download multiple MP3s, you'll need the Amazon MP3 downloader. It runs on Windows XP, Vista and 7 and OS X. Clicking a music file from your account will open the Amazon Cloud Player. You can listen to your music directly from the web. You can only play MP3 files or AAC (M4A) files that are DRM-free. There's also a Cloud Player app for Android phones and tablets.
iCloud is a new service that replaces MobileMe. It is integrated into apps and iTunes. Some iCloud features appear in iTunes 10.3 beta, but the full roll-out is this fall. iCloud provides 5 GB of storage.
You can also store up to 20,000 songs purchased from iTunes. Other purchased content and photos don't count against your limit.
When you purchase a song from iTunes, you can download it to any of your devices. Past purchases are available, and you can have music downloaded automatically. You can't play music directly from iCloud. You must download it.
You probably have music purchased from another store or ripped from CD. In that case, there's iTunes Match ($25 yearly). It scans your music collection. You can listen to music already in iTunes. If music isn't available, you can upload it from your collection.
iCloud isn't just about music, though. Photo Stream syncs photos taken on your iOS device with other devices. You can view and download photos to other iOS devices, PCs, Macs and Apple TVs. A Photo Stream album containing your last 1,000 photos is created. New photos are stored for 30 days.
iCloud also backs up a variety of other data, like apps, text messages and iWork documents. You get a free email address that works across all your devices. And it stores your calendar and contacts and syncs entries across all your devices. If you choose, you can create a calendar to share with your entire family.
To get all the features of iCloud, you'll need iOS 5 on your iPhone, iPad or iPod touch. Mac users need OS X Lion. It is available in July for $30. Windows users need Vista or Windows 7. Outlook 2007 or 2010 is recommended for accessing contacts and calendars.
As users, we are in the midst of a paradigm shift. No longer are our data, music, media, photos. and documents tied to a particular computer at a specific location. When all this moves into the cloud, access to your files is literally at your fingertips.
Open-Source Cloud Taking Strong Hold
Excerpted from CRN Report by Andrew Hickey
Open Source cloud computing is becoming increasingly more pervasive and is fueling cloud adoption, a recent survey conducted by a trio of cloud vendors recently revealed.
The survey of more than 500 IT pros found that 69% use open-source software whenever possible in their cloud computing environments, while just three percent claim to not use open-source software at all. Additionally, all government cloud users said they use some form of open-source cloud software. The survey was conducted by open-source cloud software provider Cloud.com, cloud hosting provider BitRock, and cloud management player Zenoss.
The survey also revealed that the open-source Linux operating system is the dominant guest OS in the cloud, with 83% of IT pros queried saying they plan to deploy Linux as a guest OS, while 66% will be deploying Windows OSes in the cloud.
Meanwhile, among the users who do not use open-source software, 58% of them said they have no cloud computing strategy, the survey revealed.
Along with highlighting the use of open-source in the cloud, the Cloud.com, BitRock, and Zenoss survey also found that 61% of organizations are currently in the information gathering and planning stages, or have received approval for, but have not yet implemented, a cloud computing strategy. Twenty percent have already implemented cloud, while another
twenty percent have no cloud plans at this point.
As for what's driving cloud adoption, 68% said hardware savings was the No. 1 reason for moving to the cloud, while 66% said faster deployment of infrastructure and 57% said reducing systems management burden was their cloud catalyst.
Among the CTOs surveyed, 71% said scalability was the most popular reason for adopting cloud computing, which was followed by 61 percent citing elasticity or the need to adjust fluctuating resource demands.
Further, the survey revealed that most data center managers prefer private or dedicated cloud infrastructure in favor of public cloud infrastructure. The survey found that 70% of data center managers choose to deploy infrastructure on dedicated resources like dedicated server and data center resources, while 12% prefer to deploy their infrastructure in the public cloud.
Additionally, 57% of participants said they preferred to host their infrastructure on their own hardware; and 36% of respondents indicated that their preference was to run their infrastructure virtually but hosted on dedicated hardware at a managed data center.
Guidelines Expected to Boost Cloud Spending by $50 Billion
Excerpted from Bank Technology News Report by Penny Crossman
What holds banks back from using cloud computing? Confusion about what it is, concerns about security and delivery, and a lack of standards. To resolve that third point, the Open Data Center Alliance (ODCA) has released a set of guidelines for cloud computing vendors.
The Alliance came out with a set of guidelines for cloud providers and their customers this week. "Hopefully this will increase the investment in cloud among our membership and the industry, says Andrew Feig, Executive Director, Technology Advisory Group, GTIS at UBS and board member of the Alliance, who spoke to us yesterday. "Accelerating adoption should accelerate savings" for the members.
The group now has 280 members representing $100 billion in IT spend. These are all large corporations with vast networks of data centers. In addition to UBS, Deutsche Bank, JPMorgan Chase and NAB are members of the steering committee. Contributing members include ING and BBVA. All the firms have committed to using the guidelines in their purchasing decisions and many have already begun using them in their RFPs, RFIs and discussions with their vendors, Feig says.
The group expects to see cloud adoption grow by $50 billion between now and 2015, which should lead to a savings in annual IT spend of $25 billion annually, based on a 15% reduction in operational costs and Bain's $142 billion annual spending estimates.
But Feig sees such savings as a side benefit. "In the end, we want to adopt the best solutions for our businesses and anything that can help us get to those solutions faster, obviously time is money as well," he notes. "Some of the work we've done is in making a lot of the heavy lifting go away so we can focus on more of the real issues. That's really the goal, to take some of these non-differentiating problems we see out there off the table."
"For instance, if we had one way to start and stop a virtual machine across the technology vendors and providers, that's not something that differentiates one thing from another, but there are 10 different ways to do that across 10 different providers. That's 10 times the work we have to do as consumers of these systems. If we can level the playing field for some of these non-differentiating features, it should help us move faster."
The guidelines fall into four categories: security, automation, management-and-policy, and transparency. "These were the areas most outlined by our membership as focus areas," Feig says.
All the ODCA member firms have committed to using the guidelines in their purchasing decisions, Feig says.
The size of the cloud computing market varies by analyst firm. Market Monitor, a market-sizing service from The 451 Group and Tier1 Research, says the market will hit $16.7 billion by 2013, which represents a compound annual growth rate of 24% from 2010.
Gartner estimates that worldwide cloud services revenue will top $148.8 billion in 2014, up from $68.3 billion now, including both public and private cloud services.
IDC estimates that public cloud computing services have already exceeded - as of 2009 - $16 billion, and will reach $55 billion by 2014.
In addition to Intel, which is the initiator of the Alliance, Dell, EMC, Parallels and Redhat have all joined. Dell has a cloud offering, EMC sells a cloud in a box offering with vmWare; Redhat is also active in this space.
The security guidelines try to provide standard definitions. Bronze-level requirements will be for basic security, things like intercepting data in transit. Gold will be for financial organization security and will include more robust data protection. Platinum will be for military and defense level security.
All the guidelines are meant to cover both internal and external cloud deployments. "It's like commercial aviation and private aviation," Feig says. "There are some things that are different, but a lot of things are similar. There are some things that are more geared toward the public side than the private side, but at the end of the day, there's still a model that can be adopted. Moving things in and out of both should become easier."
The guidelines should make it easier for banks and other companies to do apples-to-apples comparisons between vendors, Feig says. "Everyone has an existing way of describing their services," he says. Standard descriptions and units of measure in the guidelines should help make these descriptions more parallel.
And they should help companies avoid vendor lock-in as they buy cloud services. "We're never going to get rid of all vendor lock-in," he acknowledges. "But if we get rid of non-differentiating lock-in and make it more standard, that will prevent some lock-in so I can move from provider A to provider B with minimal pain."
For a bank that's already begun building an internal cloud (as UBS, JPMorgan Chase, Morgan Stanley and many others have), adopting these guidelines shouldn't be too complicated, Feig says. "It depends how far along you are with your internal cloud," he says. "There's nothing in the framework that would be that intrusive. If you have an internal cloud, you probably have some of these things in place, it's just about using common terminology."
Coming Events of Interest
Cloud Leadership Forum - June 20th-21st in Santa Clara, CA. This conference's enterprise-focused agenda, prepared with the help of nearly a dozen IT executives, will bring you case studies and peer insights on how leading organizations are approaching the cloud opportunity - plus much more.
Cloud Computing World Forum - June 21st-22nd in London, England. This third annual event is free to attend and will will feature all of the key players within the cloud computing and software-as-a-service (SaaS) market providing an introduction, discussion and look into the future for the ICT industry.
TransmitCHINA Talks - September 14th-16th at the Great Wall of China. International leaders, thinkers, innovators, and creators will have an exclusive opportunity to hear a cross-section of preeminent thought leaders from some of the world's most innovative organizations in the digital and creative content ecosystem.
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