January 23, 2012
Volume XXXVIII, Issue 2
The Day the Internet Struck Back
Excerpted from Social Media Insider Report by Catharine Taylor
When your 14-year-old son and the check-out guy at the supermarket are thoroughly conversant with the latest attempt at Internet-controlling legislation, you know someone, somewhere, succeeded with their communications.
And so it was this week, with the forces unleashed through the most powerful Internet companies in the world - which, in a movement that built up to one big day of protest, effectively killed SOPA and PIPA (aka the Stop Online Piracy Act and the Protect IP Act). But, of course, this wasn't just about the power of Internet companies; it was about all of us, using the technologies they created, pointing out the ludicrousness of both bills.
I'm probably not as well-versed in either as I should be, but I know enough about them to know this: that Wednesday, in the US, we crossed the Rubicon. It was the day where we proved the online world's power as a social medium in a way that no amount of wildly popular cat videos ever could. As Wikipedia went black for the day, and other sites obscured their logos (Google), or became points of distribution for protest (Twitter), the Internet showed the true reach and force of its intensely interconnected world.
In a world where power has usually meant money and connections, yesterday was a breakout in terms of permanently altering those concepts. In fact, on one cable news show last night, the hostess mused whether - despite all the coverage the issue had gotten yesterday in traditional media - it was actually needed to spread the word about what was going on at all. She rightly guessed "no." Ditto to all those who went to K Street thinking money and connections would get these bills passed. What's money and connections when pitted against hundreds of millions of people with the ability to express themselves?
Just how powerful is the online world? Well, I went to the supermarket right after I noticed that Mark Zuckerberg's status update on Facebook on the topic had received almost 300,000 "Likes" in three hours (he has slightly over 10 million Facebook followers). That's when, as I was loading frosting and cupcake mix into my bag, I heard the college-aged guy at the check-out counter next to me going to great lengths to explain the evils of SOPA and PIPA to a customer, who, in case you were wondering, was listening quite intently. Surely this was a first for DeCicco Family Markets.
So maybe I shouldn't have been surprised that when I got home, I discovered on nytimes.com that as the Washington elite was closing down for the day, it was also effectively caving on its proposed legislation. The updated headline on the same story late in the evening put it best: In Fight Over Piracy Bills, New Economy Rises Against Old. Wow, that was fast! While at the same time being very, very slow. A search on Wikipedia about SOPA (that page was not blacked out) led to sources confirming what was already clear: the legislators who drafted these bills had little appreciation for, or understanding of, technology, and - no coincidence - also little appreciation for the new-world economy and all of the jobs, innovation, and passion it has brought to our country for the last 16 or 17 years. While this was apparent in the drafting of the bills, the point was made ever more so in how people and companies online mobilized against the bills using the very technology that Congress doesn't get.
While no reputable Internet company is for online piracy, the devil is in the details. Imagine if Facebook had to police everything posted by its hundreds of millions of US users. Well, it couldn't, of course, but that's essentially what such legislation would do. It's astonishing that in 2012, none of the above was apparent to anyone involved with these bills. One can only assume that the old-world power of old-world media had blinded legislators from seeing the world as it really is. How else to explain that no one with the technical expertise to understand the ramifications of these bills was involved?
I don't have a great closer here, except to state what readers of this column have thought all along: Power to the people - and the almost-entirely US-based Internet companies who enable them.
Ad Industry Rails Against Prospect of Costly SOPA/PIPA Compliance
Excerpted from Online Media Daily Report by Laurie Sullivan
It would cost ad networks, payment processors, hosting services, search engines, and others in the online advertising supply chain estimated billions to monitor content and links embedded on web pages to comply with proposed Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) US legislation, claim industry executives.
The opposition says the proposed legislation will force venture capitalists to pull investments earmarked for online companies, suppress social media advertising, and reverse growth for online ads. eMarketer estimates US ad sales grew 23% to $32 billion in 2011, and should reach $39.5 billion this year, outpacing spending on print newspapers and magazines.
Ad execs said it will become "incredibly costly" to monitor every piece of content contributed to a website. Kara Nortman, SVP of publishing at CityGrid, which supports Citysearch and Urbanspoon, likens SOPA to The Sarbanes-Oxley (SOX) Act of 2002, which set a new reporting standard for all US boards, management, and public accounting firms in the wake of the Enron, Tyco, and WorldCom scandals.
The SOX stipulations cost companies millions in compliance; industry insiders believe SOPA could do something similar.
The CPA Journal reported the results of a 2004 survey revealing the total costs of first-year SOX compliance with section 404 could exceed $4.6 million for each of the largest US companies, with more than $5 billion in annual revenue.
On Sunday, Marty Lafferty, CEO of the Distributed Computing Industry Association (DCIA), who calls SOPA "a misguided SOX on steroids," plans to chronicle events on the trade association's website that led to the current conflict surrounding the proposed SOPA/PIPA legislation.
"If the combined bills would have passed years ago, YouTube, Facebook, and Twitter would have been shut down before the companies made it through their first week of operations," he said. "Moreover, these bills would damage the Internet by attacking the domain name system (DNS), which is a fundamental protocol underlying how the web essentially works."
If Amazon refuses to shut down a website hosted through its cloud services after a client gets accused of copyright infringement, that business unit could be in jeopardy of being sued or shut down, too. Amazon becomes liable for damages through the legal court process if it chooses not to take down the site.
"The burden of proof showing they did not infringe copyrights goes to the defendants," said Eric Orme, CTO of Remark Media, a global digital media company focused on developing social media businesses. He explained that any company accused of aiding in copyright infringement would run the risk of being served under the same court order.
For a social network like Facebook with more than 600 million users, Orme estimated the price tag at millions to create services that would moderate user comment, photos, and videos. "I don't think you can stop piracy by suing the platform somehow associated with it."
The Motion Picture Association of America (MPAA), which has been striving to stop digital piracy of movies for nearly a decade, said in a blog post that websites taking action on Wednesday rest on the false premise that legislation would target them. Paul Hortenstine pointed to a "fact sheet" stating why we sites like YouTube, Facebook, Twitter, and Wikipedia would not be affected.
The Hollywood Reporter noted that Chairman & CEO of the MPAA and former Connecticut Senator Christopher Dodd "finds himself in the middle of a war."
Report from CEO Marty Lafferty
 The questions I've been asked the most this week came from unlikely sources - people not professionally involved in the distributed computing industry - who were surprised to find themselves outraged, activated, and swept up in an unprecedented national protest.
The targets of their dissent were the woefully misguided and ill-conceived PIPA and SOPA bills in the US Senate and House of Representatives.
When did all this start? How did it reach the point where proposed remedies were worse than the disease they were supposed to cure? Where does this insanity end, and what should be done instead?
The sad truth is that this has been going on for more than a decade. We can trace the routes of the current conflict to the birth of Napster in 1999.
File sharing exposed the record industry's unpreparedness for a disruptively transformative technology facilitating the creation of perfect digital replicas of musical tracks and their virtually cost-free distribution to billions of listeners globally. For the motion picture community, history began to repeat itself about five years later as that industry started to move to digital cinema.
Since then, traditional entertainment companies have been increasingly overwhelmed by the ongoing pace of technological advancement. Truth be told, their preference would have been to turn the Internet off until new business models could be developed to address such a radical change in their distribution infrastructures. And to date, on many levels, they have not progressed very far.
The technology sector, in stark contrast, has experienced a period of extraordinary advancement and unparalleled growth thanks to the Internet. The exuberance of this latter group of innovators and entrepreneurs has been dampened by the typical responses of content rights-holders, however, which ranges from being inexplicably inaccessible when it comes to licensing new entrants, to being unexpectedly litigious against newcomers for alleged contributory copyright infringement.
It should not come us a surprise, therefore, that conflict between the entertainment and technology sectors manifests itself from time to time in ways such as this week's explosive protest against SOPA and PIPA. But how did this escalate so dramatically - and are there any clues that could lead to constructive alternatives?
In May 2011, we noted with concern simultaneous introductions at the behest of the movie industry in the US Senate of S.978 the "Anti-Streaming" Act (New Bill Would Criminalize Unauthorized TV Show Streaming) and S. 968 - the "Protect-IP" or PIPA Act.
A week later, record labels backed a warrantless search bill in California, purportedly aimed at CD duplication companies, but with troubling threats to Fourth Amendment rights. Even more disturbing, the record industry "took the cloud to court" by subpoenaing cloud-based storage and sharing site, Box.net, to determine the identity of music-sharing users.
In June, the entertainment sector pressured Internet service providers (ISPs) to impose a range of punishments on file sharers. Users could find themselves throttled to slower speeds - or unable to access popular websites - until they stopped exchanging unlicensed files, and it wasn't clear how falsely targeted consumers could appeal accusations before having penalties imposed upon them.
However well-intentioned this effort may have been, it was impractical and rife with serious legal problems. And while it wouldn't have much of an effect on curtailing infringement, it would have multiple negative consequences for broadband network operators and consumers.
Our take on this was, "It would be much more effective to pursue advanced technological solutions - led by state-of-the-art filtering systems - and, above all, new business models." Given the very promising developments over the past several years in both areas, wouldn't approaches along those lines be more fruitful at this juncture?"
Nevertheless, by July, it was clear that this new "Copyright Alerts" scheme could launch in 2012. While potentially useful within the context of a larger commercial framework, it exemplified two classic errors in strategy: "putting the cart before the horse" and emphasizing "the stick" in the absence of a truly viable "carrot."
Partly in response, the DCIA joined the Entertainment Consumers Association (ECA) in opposing S. 978, being fast-tracked through Congress without adequate opportunities for critical review. In plain language, under this bill if you streamed your videogame play, your child dancing to a favorite song, your poking fun at a recent movie scene, or your latest practice session on a musical instrument, and it was viewed by one or more friends, you could go to jail for up-to-five years and face a very large fine. Among other actions, we participated in a letter-writing protest campaign. A week later, the Electronic Frontier Foundation (EFF) joined the ECA and DCIA with a similar program.
In August, the judicial system proved itself to be more rational and deliberative than the legislative branch of government. A district court judgment in favor of MP3tunes augured well for cloud-based content services by among other things validating the practice of "scan and match" - whereby music tracks can be organized and tagged so that only one actual copy needs to be stored on a server for access by many authorized users on various devices. This obviously avoids costly duplication, and is essential for services like iCloud going forward.
With this ruling, we predicted that record labels and movie studios would continue to have difficulties keeping abreast of web-based innovation. Due to the extreme disruptiveness of technological advances to their established business models and operating practices, they would seek greater control of the pace of progress by having the laws changed upon which such court decisions were based.
To counter this growing threat, just after Labor Day, the DCIA joined more than one-hundred technology executives and entrepreneurs in opposing PIPA, which by then, despite having been sharply criticized by the Center for Democracy & Technology (CDT), EFF, leading law professors, Public Knowledge, and top Internet engineers among others, was still progressing through Congress with strong Hollywood backing.
While we fully support the objectives of upholding copyright and combating infringement, we didn't believe that this bill would be effective in accomplishing either of those goals; and the dangers of collateral damage and unintended consequences, which would significantly harm many legitimate Internet-based businesses, did not justify the risks of proceeding with it.
In October, the DCIA turned to the House of Representatives hoping for a more reasonable version of PIPA that we could support. Instead, what emerged under sponsorship by entertainment interests was the extremely disappointing and in many ways even worse "HR 3261 - SOPA, the "blacklist" bill that would "effectively eliminate" the DMCA. Almost immediately, Public Knowledge sounded the alarm bell, calling for consumer advocates and technology industry participants alike to "ACT NOW - because this bill seriously screws with the Internet!"
By November, with growing awareness of the overt threat these measures posed to the fundamental operation of the Internet - by attacking its domain name system (DNS) protocol - the conflict was gaining heat with battle lines drawn more and more sharply between entertainment and technology interests.
We supported David Post's analysis that PIPA was a bill that threatened the Internet and our freedom and SOPA was even more draconian; and agreed with Mike Masnick's History of Hyperbolic Overreaction to Copyright Issues. Streaming Media covered the issue particularly well with its Internet Raises Alarm over HR 3261, Allowing Sites to Be Shut Down. And the EFF's Corynne McSherry did a great job articulating why SOPA would hurt start-ups, not pirates.
The DCIA mounted a call-in campaign targeting the Senate, and we supported the Protect Innovation open letter from major technology sector players. At Thanksgiving, finally, Senator Ron Wyden (D-OR) indicated his willingness to filibuster PIPA.
We commended Fight for the Future, a new organization that, with very little lead time, mounted American Censorship Day in opposition to SOPA & PIPA with the battle-cry "Don't Break the Internet" noting that if these over-reaching laws had been passed ten years ago, we would not have such innovative services as YouTube, Facebook, and Twitter. The start-ups that aspired to become these companies would have been forced to spend impractically large sums of money in order to try to avoid prosecution - and ultimately would have been shut down anyway.
The massive grassroots support that came out to protest SOPA & PIPA included over a million e-mails to Congress and close to 100 thousand phone-calls.
By December, we could point to Susan Landau's blog in Huffington Post Hollywood and the Internet: Time for the Sequel and an alternative legislative proposal from Senator Wyden and Congressman Darrel Issa (R-CA), the Online Protection and Enforcement of Digital Trade (OPEN) Act. The new measure would much more sensibly target copyright infringement by empowering the International Trade Commission (ITC) to take action against foreign websites dedicated to unlawful activity and not cavalierly destroy the integrity of the domain name system (DNS), a fundamental Internet protocol.
Tensions mounted further leading up to the holidays, with attacks becoming increasingly negative, such as Tom's Guide and others reporting that major movie studios had been caught pirating competitors' content online. The OECD called for detente and urged its members to defend Internet freedoms.
We covered the House Judiciary Committee's surreal spectacle "Full Committee Markup" of SOPA, which to the chagrin of Chairman Lamar Smith (R-TX) increasingly and at times in astonishing ways discredited the US House of Representatives; and afterward we endorsed Joshua Kopstein's Dear Congress: It's No Longer OK to Not Know How the Internet Works.
On December 19th, the DCIA joined with a coalition of nine of the most highly regarded global Internet companies in backing the Online Protection and Enforcement of Digital Trade (OPEN) Act, a sane replacement for both PIPA and SOPA.
And then, largely because of the work of many rank-and-file Internet users organized by Demand Progress, Chairman Smith had to acknowledge that in the face of growing public concerns the Committee would adjourn for 2011 without holding a vote. We offered DCINFO readers What You Need to Know About SOPA in 2012 by Alexander Howard.
This month, the issue finally came to a head, with Rackspace and other cloud and Internet companies coming out strongly against SOPA and Mike Masnick asking, "Shouldn't there be significant punishment for bogus copyright claims?"
We explained why we agree with the growing group of thought leaders - ranging from Rackspace CEO Lanham Napier to Secretary of State Hillary Clinton in urging the US Congress to change its behavior towards the Internet to the way professional physicians behave toward patients: first, do no harm.
Two weeks ago, we asked whether Amazon, Google, and Wikipedia should "nuke" the web to stop SOPA and underscored Stacey Higginbotham's view that we need a political litmus test for tech and SOPA isn't it.
Last week, we welcomed Senator Wyden and Congressman Issa at CES, and encouraged industry participants to support the Congressman's scheduled SOPA hearing this week. As events unfolded, the combined forces of more than 10,000 website blackouts in protest of SOPA and PIPA and the growing public outcry expressed through popular social networks and ultimately - and ironically - the mainstream media, led to that hearing's cancellation and the current retrenchment by lawmakers.
By Friday, Senate Majority Leader Harry Reid (D-NV) cancelled the planned January 24th vote on PIPA. Moments later, House Judiciary Chairman Smith shelved SOPA.
It's not over yet, however. We need to keep the movement growing and back the OPEN Act. Backward-looking approaches that deny the full capabilities of new distribution platforms are doomed to fail. And above all, in "lieu of ludicrous luddite legislating," we need to encourage innovative technological and business solutions.
Success in protecting content provider IP in the digital realm will involve embracing, not shackling, powerful new technologies like cloud computing. This has to be approached as a joint optimization problem, not continue as an incredibly protracted and divisive conflict. Share wisely, and take care.
Issa Claims OPEN Act Has More House Sponsors than SOPA
Excerpted from International Business Times by David Zielenziger
Congressman Darrell Issa (R-CA) said Tuesday his bill rivaling the controversial SOPA, which as of the publication of this report, was still pending in the US Congress, now has more co-sponsors than SOPA.
Issa, Chairman of the US House Committee on Oversight and Guidance, told a Washington meeting and webcast organized by SOPA opponents he will formally introduce his competing Online Enforcement and Protection of Digital Trade Act (OPEN) on Wednesday "and it will have more co-sponsors in the House than SOPA has in the House."
Last week, Issa and his co-sponsor, Senator Ron Wyden (D-OR) told International Business Times they were optimistic their law would prevail against SOPA and the companion Senate bill, PIPA.
Issa briefly joined a webcast convened by the Progressive Change Campaign Committee to marshal support against both SOPA and PIPA, charging they would restrict free speech, stifle Internet innovation, and squelch domestic job creation.
On the webcast, Veoh founder Dmitry Shapiro, an immigrant from the former Soviet Union, recounted how his streaming content media site was effectively ruined by litigation brought by Universal Music Group for alleged copyright infringement. Investors, including former Walt Disney CEO Michael Eisner, were sued as individuals.
Shapiro said the lawsuits "choked the company to death" and ultimately forced its sale. He warned that either SOPA or PIPA would have the same effect on other Internet start-ups.
Still more harmful would be a system that would permit copyright holders alleging infringement to seek a US magistrate's permission to "get an order to shut down a whole business" without a court hearing, said Jayme White, Senior Staff Director for the Senate Finance Committee on International Trade.
Wyden is Chairman of that Subcommittee.
Other Internet pioneers, including Craigslist founder Craig Newmark, Reddit co-founder Alexis Ohanian, and Jared Friedman of Scribd, all condemned SOPA and said it is a threat to free speech and communications.
The controversial bill was proposed last year by Congressman Lamar Smith (R-TX), Chairman of the House Judiciary Committee, after complaints about copyright infringement from major publishers and Hollywood studios like Viacom and News Corp.
Smith held one hearing on the law last November, during which Google Chairman Eric Schmidt was berated.
Subsequently opponents mounted a campaign which led to the Wyden-Issa bill, which would send copyright disputes to the US International Trade Commission.
IBM at CONTENT IN THE CLOUD Conference
CES was as much about the software as the devices this year. And the cloud was the "invisible" star of the show.
Much of the newness was in the software and new experiences which are often enabled by the cloud - as illustrated in IBM's white-paper, and discussed in the CONTENT IN THE CLOUD Conference within CES panel discussion featuring IBM's Saul Berman.
Tech Giants Back Standard for Cloud Portability
Excerpted from InfoWorld Report by Ted Samson
Among the allures of cloud computing is the promise of easily and seamlessly moving services from one cloud to another. Realizing that kind of portability, however, is difficult. Every cloud service has its own distinct requirements, such as security, governance, and compliance, as well its constituent parts, including web server, database, storage, and networking requirements.
In an effort to make cloud service more portable, a group of tech giants that includes IBM, Cisco, EMC, CA, SAP, and Red Hat today unveiled the first draft of open interoperability specification called Topology and Orchestration Specification for Cloud Applications (TOSCA). Capgemini, Citrix, NetApp, PwC, Software AG, Virtunomic, and WSO2, among others, are also contributors.
TOSCA aims to let companies create interoperable descriptions - in a sense, templates - of their application and infrastructure services, the relationships between the parts of the service, and the operational behavior of the services. The open nature of the standard is intended to ensure service interoperability, regardless of supplier, provider, or host technology.
Chris Ferris, CTO of Cloud Standards at IBM, described TOSCA as a step up the cloud stack, following such open cloud standards as CDMI and OVF. "A number of initiatives are ongoing to help cloud standards," he said. "This is another standard along that progression, but it goes beyond just infrastructure. We're getting into provisioning of more comprehensive services."
One benefit of the standard, according to Ferris, is that it will better enable organizations to embrace the allure of hybrid clouds. For example, were a company to move a service in an SAP environment from a private cloud to a public cloud, it could use the standards to develop a template - a description of all the moving parts that enable that service - to significantly ease the transition between clouds.
Absent from the list of contributors to TOSCA are Amazon and Microsoft. "They were invited," said Ferris. "We welcome any other companies to come. We feel that we have a fairly good constituency involved."
Notably, neither Microsoft nor Amazon backed the IBM-led Cloud Manifesto, a document released in 2009 in support of cloud computing interoperability. Microsoft deemed the document "flawed" when it came out and accused its supporters of developing it in secret.
An OASIS TOSCA technical committee will further develop the specification within the open standards process.
BitTorrent Tests Video Streaming
Excerpted from Wall Street Journal Report by Nick Clayton
The BitTorrent peer-to-peer (P2P) file sharing protocol designed by Bram Cohen has proved to be one of the great disruptive inventions of the Internet. Removing the need for a large central data source means large files can be distributed efficiently with minimal strain on the network.
BitTorrent is now widely used as a very efficient way of distributing files.
Web Pro News reports that Mr. Cohen has turned his attention to developing a more efficient means of video streaming, again using P2P methods. The first major public test will be a live stream from the NAMM Jam which takes place this weekend in California.
The event will be a testing ground for BitTorrent's new live P2P streaming protocol invented by Bram Cohen, BitTorrent's Founder and Chief Scientist. The protocol promises to solve the fundamental challenges of live streaming media over the Internet by eliminating the need for expensive server infrastructure and dramatically reducing latency.
Cohen said, "While the live protocol is still in the testing phases, it's proving to be incredibly stable. We need to push the limits and see what happens when large numbers of people join a live swarm."
The BitTorrent live stream distributes the workload among peers viewing the stream. Peer-based architectures take advantage of the computing, storage, and network resources of each person, the more people who join a stream the better it performs.
Code 42 Gets $52.5 Million in Funding
Excerpted from Sys-Con Media Report by Maureen O'Gara
Code 42, the Minneapolis, MN start-up that peddles CrashPlan, the automatic real-time PC and mobile backup and recovery service aimed at consumers, SMBs and the enterprise, has gotten a $52.5 million investment from round leader Accel Partners and Split Rock Partners.
It's the company's first investment. It's reportedly been profitable since it launched the widgetry in 2007.
Accel dipped into its new $100 million Big Data Fund for the first time for its share.
Code 42 says it's got some 4,000 enterprise customers including Adobe, Google, Groupon, HP, LinkedIn and NASA and 100PT of data stowed in the cloud: its cloud or private clouds, other computers or devices or some combination or all of these options. That represents a total of 100 billion file and it reportedly gets 250 million unique new files a day.
It's got eight data centers worldwide and is supposed to use the money to raise its profile and go international.
GigaOM says it wants to be known as an "information management provider" and "a way for corporations to understand what data and how data was moving between employees and the devices they use." It can see who's got which files.
Code 42 competes with Carbonite, Box.net, Mozy, Dropbox, Iron Mountain et al. Enterprises pay $5-$10 a month for each computer and consumers pay $6 a month.
Cloud Server Shipments to Skyrocket in 2012
Excerpted from GigaOM Report by Barb Darrow
For anyone needing yet another data point to show that cloud computing is driving IT, check out new projections from IHS.
The researcher predicts that unit shipments of "cloud servers" - computers used to power public and private cloud computing infrastructure - will soar to 875,000 in 2012, up a whopping 35 percent from 647,000 units shipped last year. This server segment has nearly doubled since 2010, when 460,000 such boxes sold, according to IHS, formerly known as iSuppli.
These numbers bolster other research showing that the cloud computing juggernaut continues to roll. For example, recent CB Insights data found that venture capital investment in cloud computing companies accounted for more than a quarter of all Internet-related deals and more than a third of Internet investment dollars last year.
Servers typically used to run cloud data centers have to be easy to maintain and configure, so they can be connected and disconnected with minor disruption as they fail or more need to be added as workloads grow.
That means, according to the IHS iSuppli Compute Platforms topical report, that "performance is not the key metric here; what counts instead is expandability, energy efficiency and low cost."
The report went on to say: "Because physical footprint is valuable in a data center, the type of equipment that will find the greatest adoption in the space likely will include both rack-optimized servers and highly condensed blade servers, with their modular setup made up of a single motherboard incorporating microprocessors, memory and a network interface."
For this report, IHS analyst Peter Lin included servers used to run consumer-oriented clouds like Apple iCloud, Google Services, and Amazon Web Services as well as more enterprise-oriented cloud platforms that target business applications. The problem for server vendors is that these huge cloud purveyors seek commodity boxes with rock-bottom prices as opposed to more pricey high-end offerings.
Lin does not expect this growth to be short-lived; he expects this cloud-server category to become the fastest growing segment in the server industry by 2015.
Video Content Is King - Especially in the Cloud
Excerpted from Report by Peter Csathy, President & CEO, Sorenson Media
The era of long-predicted video ubiquity is now upon us. It has been inevitable. Now here it is, thanks in large part to the power of the cloud. This new reality is welcome to both consumers and to premium video content owners and creators (including the major studios).
For consumers, cloud-based access to premium motion picture and television content gives tremendous freedom and flexibility to buy once, consume anywhere, anytime, on any device, and even seamlessly shift viewing from one device to another.
For content creators, the cloud opens up tremendous new power to reach those consumers -- anywhere, anytime, and on any device. This means that premium video content can touch - and touches - all of our lives more relentlessly than ever before. And, this means that cloud delivery opens up unprecedented new ways for content owners to drive (and monetize!) significantly broader video consumption. While this may surprise some, content will be king like never before.
It is no wonder then that major premium content distribution outlets like Netflix and Apple already have been joined in the scrum by Amazon, Google, Wal-Mart (Vudu), Hulu, Comcast and a host of others large and small. Others, like Redbox, are waiting in the wings to pounce soon. The core strategies of these companies are founded on, or at least significantly influenced by, the need to be a force in video distribution. Much is at stake to "win" in the distribution game. Due to competition from these behemoths to button up and market the deepest pool of scarce (unique) motion picture and television content in a never-ending quest for differentiation, major studios and other content owners and creators are starting to see the first real green (as in money) shoots sprouting up in this brave new cloud-enabled world. Just recently, most of these over-the-top (OTT) and "TV Everywhere" providers have ponied up big bucks to license necessary rights to distribute that premium video content.
In this midst of this cloud distribution revolution, yes, there is significant disruption to existing business models. As examples, the major studios and cable operators have long relied upon established and cozy business terms which ultimately limited access to premium content to those consumers willing to shell out significant fees for programming packages. Cloud-based distribution challenges these established rules of the game and overall economics. Why? Because consumers are demanding it for all the reasons noted above. That means there absolutely will be new winners and losers here. For one, "big" cable likely will lose its power over time as a principle source for premium video content - and likely will fall instead to the long-feared "dumb pipe" status (although fear not MSOs, more OTT distribution requires ever-fatter pipes!).
For content owners, this fundamentally different cloud-based distribution model leads to ever-increasing complexity. New video formats. Variable network conditions. New mobile devices. New smart TVs. And, a new "renting" versus "owning" delivery paradigm that means less direct control over how all of this happens. There is tremendous freedom in "letting go" of all this complexity and handing it over to a service provider, of course, but there is also justifiable ambivalence. Can the service provider give the studio the security it needs? Is the service provider buttoned up with regard to all licensing and patent issues? Even more fundamentally, is the service provider funded for the long term? As President & CEO of a company that has been on the leading edge of the online video eco-system for more than a decade, I have seen that scenario play out time and time again.
We here at Sorenson Media have all of these issues covered for content owners of all stripes (including media companies large and small) so that they can focus on what they do best - their craft of video creativity. Our job is to handle this ever-increasing complexity. That is our expertise. Sorenson Media's innovative cloud, on-premise and hybrid cloud/on-premise transcoding and delivery solutions offer content creators the quality, power, flexibility, ease, automation, and cost-effectiveness they need and for which we have long been known.
Peter Csathy is the CEO of Sorenson Media, a leading provider of encoding and transcoding solutions, and authors the Digital Media Update blog.
CLOUD COMPUTING CONFERENCE at NAB
The new CLOUD COMPUTING CONFERENCE coming April 16th to the 2012 NAB show will gather senior executives from media and enterprise companies to explore this rapidly emerging technology that promises to help manage proliferating devices, improve scalability for IT solutions, and deliver higher speeds, better workflow and efficient storage solutions.
If IPTV or online delivery is in your current or future operating plans, you won't want to miss these discussions focused on cloud-delivered content and its impact on consumers, television manufacturers, telecom industries, and the media.
For information on sponsorship opportunities, please contact advertising@nab.org.
CLOUD COMPUTING PAVILION at NAB
If you are a cloud services provider to digital media, NAB Show's new Cloud Computing Pavilion offers an affordable and professionally-produced turnkey package to showcase your cloud solutions.
Become an exhibitor and position your innovative technology and ideas squarely in the center of this multi-billion dollar marketplace. Contact exhibits@nab.org for more information.
Dispelling the Cloud's Myths
Excerpted from PCWorld Report by Dallon Christensen,
The pace of cloud computing will only accelerate in 2012. The increasing development of information technology, and the intense focus on cost reduction, are highlighting the benefits of moving IT administration off-site. And one cloud computing expert wants CFOs to be aware of the short-term challenges and long-term benefits to organizations.
"Large enterprises must realize cloud computing will not in all cases provide immediate cost benefits to their organizations," Sada Singam, Global Vice President, Cloud Computing, of HCL Technologies, said in a recent interview. CEOs and CFOs "must understand how cloud computing technologies will drive long-term benefits two to three years following the initial implementation."
Many organizations look for cloud computing technologies to provide immediate and sustainable cost benefits to drive bottom-line improvements. However, there are a number of implementation and security issues that CFOs must address with their IT departments before a successful cloud migration takes place.
Finance chiefs and their controllers must look at information security measures beyond the minimum standards required by legal and regulatory requirements. "We consider Statement on Auditing Standards (SAS 70) as a basic standard for cloud computing security efforts," Singam says. "Companies must recognize the value and importance of their data and ensure they have multiple backups to protect their data and information."
Cloud computing gives companies of all sizes the opportunity to quickly scale their IT operations, and minimize the fixed costs traditionally associated with major implementation efforts.
However, moving to the cloud does present a unique set of challenges for organizations of all sizes. With many IT departments now reporting to the CFO, cost often becomes the key consideration during cloud implementations. When looking for the right cloud technologies, CFOs must focus on long-term productivity and value to their companies. Cloud computing is more than a passing fad, and companies must make sure they are focused on more than the next quarter's financial results when making their decisions on the future of their IT operations.
"Hard is soft and soft is hard when considering major changes," Singam asserts when advising CFOs on the key factors for cloud computing decisions. Organizations must focus on so much more than the hard, short-term costs when identify the right opportunities for their organizational IT.
Coming Events of Interest
Social Media Insider Summit - January 22nd-25th in Key Largo, FL. Attendees will hear case studies from leading brands who have been able to turn social media campaigns into results.
Cloud Connect - February 13th-16th in Santa Clara, CA. The premier technology event for cloud computing, features the latest technologies, platforms, strategies, and innovations within cloud computing.
Cloud Computing Imperative 2012 - March 12th-13th in Dubai, UAE. Strategies to implement IaaS, PaaS, SaaS, and XaaS. Plan the shift of IT responsibilities, get fresh perspective on managing project budgets, build a strong ROI for cloud computing, understand the shift from managed services to the cloud, master the cloud infrastructure and see cloud security from a hacker's perspective.
Cloud Computing Summit - March 23rd in London, England. This conference provides you the chance to meet and share views with some of the IT and cloud computing industry's biggest and most innovative organizations. From global software, platform, and infrastructure providers to leading security, application, and virtualization deliverers, this forum will put you on the shop floor with the people that matter in cloud computing.
2012 NAB Show - April 14th-19th in Las Vegas, NV. From Broadcasting to Broader-casting, the NAB Show has evolved over the last eight decades to continually lead this ever-changing industry. From creation to consumption, the NAB Show has proudly served as the incubator for excellence - helping to breathe life into content everywhere.
CLOUD COMPUTING CONFERENCE at NAB - April 16th in Las Vegas, NV. Don't miss this full-day conference focusing on the impact of cloud computing solutions on all aspects of production, storage, and delivery of television programming and video.
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