April 23, 2007
Volume 17, Issue 6
INTENT MediaWorks Attracts $10 Million
INTENT MediaWorks this week closed its Series B Funding to help accelerate growth as the company experiences a sharp increase in demand for its fully integrated digital distribution platform among content owners and advertisers.
INTENT’s financing was led by Greycroft Partners, SoftBank Capital, Bertelsmann Digital Media Investments (BDMI), and Allen & Co. The additional capital will be used for product development, infrastructure build-out, and marketing to support rapidly growing adoption of the company’s service offerings.
INTENT MediaWorks, co-founded by Les Ottolenghi and Glenn Martin, is the first company to enable providers of digital entertainment to effectively deliver licensed music, video, film, games, and software via the Internet across multiple distribution channels in a profitable and consumer-friendly manner. INTENT’s digital platform uniquely delivers authorized music and video to the millions of people using open peer-to-peer (P2P) applications, websites, social networks, blogs, and IPTV.
"The entertainment industry and advertising communities have not scratched the surface of the market opportunities that exist on P2P and online social networks. INTENT, however, is transforming the business of digital entertainment," said Drew Lipsher, Partner with Greycroft.
"INTENT MediaWorks gives content owners and advertisers an unprecedented opportunity to implement specific distribution, marketing, and monetization strategies for each market or channel they choose to pursue. With INTENT, consumers can acquire licensed music and video on their terms, content owners are compensated for their work, and advertisers reach a vast and attractive audience. INTENT is poised to revolutionize the online distribution of music and video."
INTENT will leverage the new investment to capitalize on significant growing industry demand for its proprietary platform, which distributes and monetizes online music and video over P2P and social networks. INTENT currently works with content providers like Nettwerk Music Group (Barenaked Ladies, Sarah McLachlan and Avril Lavigne), Violator Management (50 Cent, Diddy, Three 6 Mafia and Papoose), SLAMjamz (Public Enemy), and KOCH Entertainment, America’s largest independently distributed record label.
In addition to artists and entertainment content owners, advertisers are eager to take advantage of the enormous market shift to a digital lifestyle. INTENT makes this possible by bringing the advertiser’s message directly to consumers where they are accessing, downloading, and sharing digital music and video. INTENT’s content-level approach to advertising produces much more attractive economics and more precise measurements than have been available previously through traditional TV, radio, or print media.
"We’re privileged to have Greycroft, SoftBank, BDMI, and Allen as investors. They are among the most prominent in the media and venture industries," said Gregg Freishtat, CEO of INTENT MediaWorks.
"There are extraordinary opportunities for businesses that effectively engage the millions of fans around the world that have grown accustomed to acquiring and sharing music and video online. Rather than asking these consumers to change their behavior, INTENT has developed technologies and business models that leverage consumers existing behaviors and expectations while protecting the legal rights of content providers."
"INTENT offers artists, content owners, and advertisers the unique ability to tap into and capitalize upon the explosive growth of P2P and social networks. With the support of our distinguished investment team, INTENT will be at the forefront of the movement to make P2P and social networks the dominant distribution channels for mainstream, legitimate media."
INTENT MediaWorks was named Best New Digital Technology at the 2006 Digital Music Conference and was the recipient of the 2006 DCIA Innovator’s Award.
Report from CEO Marty Lafferty
 On behalf of participating DCIA Members, thank you to the Interactive Television Alliance (ITA), and especially its CEO Allison Dollar and President Ben Mendelson, for inviting us to co-sponsor the highly successful ITA Content Incubator at this week’s National Association of Broadcasters Convention (NAB2007).
Javien, Oversi, and RawFlow joined ITA members in exhibiting at a special Content Village pavilion and taking part in an ITA luncheon roundtable and a press conference with media partner The Hollywood Reporter.
Javien delivers total commerce technology to content providers for online and mobile sales of digital content and physical goods. The most flexible, comprehensive solution available, the Javien platform powers sales for leading companies in entertainment, media, and publishing.
Oversi offers innovative solutions for P2P networks in today’s fast-growing Internet TV and video age. Oversi’s solutions enable ISPs to optimize their network performance, ease P2P traffic pressure, and save on bandwidth.
RawFlow is a leading provider of live P2P streaming technology that enables broadcasters, online communities, content delivery networks (CDNs), and webcasters to maximize the scalability and quality of their Internet broadcasts without increasing risk or cost.
Other DCIA exhibitors and attendees of note at NAB included Abacast, Azureus, INTENT MediaWorks, Octoshape, and VeriSign.
"NAB2007 provided a very exciting opportunity for DCIA Members to present our service offerings to the broadcast industry and was highly successful for us," noted Mike King, CEO of Abacast.
Tim Russert represented NBC’s "Meet the Press," which was inducted into the NAB Broadcasting Hall of fame during the Television Luncheon. Radio personality, Rick Dees was inducted into the hall of fame for his syndicated top 40 radio show during the Radio Luncheon.
Turning now to new business, at the P2P MEDIA SUMMIT NY, the DCIA-sponsored P2P Digital Watermarking Working Group (PDWG) reconfirmed the willingness and desire of its participants to move forward to design proof-of-concept testing and market trials with digital watermarking vendors and content providers. The testing design process remains open and is under the guidance of respective trade associations as was the white paper.
Two new DCIA-sponsored working groups were also named: one to begin to investigate fingerprinting, metadata, hash-code, and potentially other individual P2P content management solutions; and one to serve as an oversight content management solutions working group to bring together and integrate the various individual P2P solutions.
We would now like to invite qualified participants to join in a tightly focused proof-of-concept test addressing a single critical aspect of P2P distribution channel development that these efforts have individually identified and jointly prioritized.
This is a call-to-action for content rights holders, Internet service providers (ISPs), and technology solutions firms, as well as the leading trade bodies that represent such interests, to join in a narrowly defined demonstration of P2P anti-piracy and content monetization methods involving off-premise control mechanisms. Specifically, this technical trial will focus on broadband ISP point-of-presence (POP) and router-level solutions.
To put such a demo into perspective, it is intended as an early stage component proof-of-concept test, undertaken with the acknowledgment that much work remains to be done in terms of integration, adoption, and establishment of related business practices.
What is clear at this early stage, however, is that P2P is vastly superior to other distribution technologies for both live and archived content from a quality, cost, and efficiency perspective. Each content file (aka torrent) can be globally transmitted commencing with its initial live or world-premiere presentation, and immediately made available for playback to as large an audience as its popularity justifies, with practically no incremental delivery costs.
Each title can simultaneously be offered for free with interactive advertising or branded sponsorship(s), as part of subscription offering(s), as an a la carte paid download, or in innovative combinations of multiple means of monetization. And each file can also be controlled in terms of destination devices owned by each viewer. Different terms-and-conditions can be established for different time-from-release windows as well as geographic territories.
In order for results of the contemplated technology proof-of-concept test to have value to industry development, revenue sharing models must be solidified that recognize and reward the necessary participants in the P2P distribution channel. At the simplest level, these participants include the ISP in the role of wholesaler or transmission facility and the P2P client in the role of retailer or user interface.
Consideration should be given to each party that "touches" a licensed content file (or part of it, with swarming software applications) as it is redistributed among audience members via P2P technologies. This includes those who perform roles in ensuring the efficient delivery of the content file (caching and content acceleration, for example) and those who perform roles in preventing copyright infringement.
Within the larger public networks environment, which involves hand-offs among different ISPs, such as between wired and wireless carriers, and between public and private LANs, systems need to be established to optimize the quality, efficiency, and integrity of the distribution of P2P content, both from professionally produced and user-generated sources. Collaboration among participants and standardized business practices will ensure that channel capacity factors, including bandwidth and storage facilities, are best utilized for all parties.
The DCIA believes that advancing commercial development of the P2P distribution channel can best be supported with a series of working groups focused on specific areas culled from the above considerations, plus other to-be-determined needs, constituted openly to ensure broad industry sector representation from qualified parties, with clearly defined deliverables and timelines for producing needed results.
As noted, we are now supporting and helping to facilitate several of these, and are developing others where interests coalesce; and we encourage you to participate and have a voice in the development of this enormously promising distribution channel. The international proof-of-concept technical test that is now being developed has roles for content rights holders, technology solutions providers, ISPs, as well as related representative trade associations. Please contact me for more information at 410-476-7965. Share wisely, and take care.
Kinetech Acquired by BDE & Altnet
Brilliant Digital Entertainment (BDE) and its subsidiary, Altnet, have acquired ownership of the TrueName patent portfolio through the acquisition of Kinetech.
The portfolio represents primary inventions that are the cornerstones of open P2P indexing and file-transfer protocols on the Internet. Among many stated uses, TrueName technology covers the use of file hashes in the identification and accessing of content used by P2P and fingerprinting applications, ISP web caching devices, and numerous others.
The usefulness of TrueName technology is reinforced by the growing number of companies around the world that rely on it as a basis for their products. For example, Global File Registry uses TrueNames to discover and police unlicensed content on the Internet and enables websites, search engines, P2P applications, and Internet Service Providers (ISPs) to remove those files from their systems rapidly and with 100% accuracy.
BDE is licensing the TrueNames patents and technologies in a variety of fields including P2P, application service providers (ASPs), ISPs, web caching and content management, and operators of large databases for data storage. Current licensees of TrueName include Level 3 Communications for content distribution networks (CDNs), Iron Mountain for data storage and backup systems, and Sharman Networks for P2P networks.
More than 200 companies have been notified of their unlicensed use of TrueName technology. Litigation for infringement of the patents is currently pending against StreamCast Networks. Patent infringement cases against the Recording Industry Association of America (RIAA), Media Sentry, and Overpeer have been settled.
"This acquisition further secures our business in the global reduction of content piracy to free-up Internet bandwidth and improve quality of services as a prerequisite to user-paid content models billed through ISPs and websites. This acquisition expands the ability of BDE and Altnet to collaborate with those businesses at the forefront of the content protection and distribution industries," said CEO Kevin Bermeister.
RightsLine Adds Online Licensing Solution
RightsLine, in conjunction with Tryarc, has developed a low-cost, scalable solution for online media licensing. Named "Online Rights Marketplace," this new offering can be implemented in as little as four weeks, with the baseline solution offered for $20,000, with an ongoing monthly fee of $100 per internal user per month. Online Rights Marketplace provides a simple, scalable web solution that reduces liability and monetizes existing assets.
"With the explosion of online media, the way that content is delivered has increased the necessity for a wider rights distribution model. Organizations that utilize our Online Rights Marketplace are able to license content to a broader audience, dramatically increasing revenue," said Tryarc Partner Rob Delf.
With the recently awarded patent for integrated media management and rights distribution, new customers who see the value in licensing their content online are implementing the RightsLine solution. They join the ranks of existing clients like NBC Universal, National Geographic, EMI Music, and Sprint Nextel in increasing revenue and decreasing risk.
Companies with little to no IT resources can implement the Online Rights Marketplace and quickly start turning rights into revenue.
Cisco Serves Small Business Market
Excerpted from Business Week Report by Kimberly Weisul
At the keynote address of the National Venture Capital Association’s (NVCA) annual conference in Washington, DC this week, Charles Giancarlo, Senior Vice President & Chief Development Officer for Cisco Systems, provided some insight into what small companies can expect from the tech giant – both as a vendor and as a potential acquirer.
Giancarlo, who used to head up the small business group at Cisco, dropped plenty of references to what he referred to as "small and medium enterprises" or "commercial customers" for the hundreds of venture investors in attendance.
And he let on that servicing smaller companies isn’t something he feels the company has always succeeded at, even though he says the segment has historically shown the steadiest growth of any of Cisco’s customer groups.
He described Cisco’s efforts to unify voice, data, and other communications in its products for large companies and then said, "You might think that if you can do that for enterprises, you can do it for small and medium businesses. Turns out that’s a tough job." He said that Cisco had repeatedly stuffed its small business products with additional capabilities, but that "at the end of the day, that was self-defeating."
The resulting products were "too complex," not only for small businesses themselves but for the Cisco partners that were supposed to help small businesses install and use the products.
As an acquirer, Giancarlo said Cisco is looking, as always, for start-ups with great technology and great talent. But he said the company’s strategy has broadened to include companies that don’t necessarily fit with Cisco’s existing business model. He said that building a go-to-market strategy for a start-up can be just as difficult as developing a great technology, especially in a large company with 15,000 salespeople.
"How do you get them to pay attention to a $10 million technology?" he asked rhetorically.
Giancarlo, who said he came to Cisco as part of its second acquisition, says the company is also paying particular attention to the so-called "golden handcuffs" that tie an acquired company’s talent to its new owner.
These generous agreements are meant to persuade talent to stay on board after an acquisition. Golden handcuffs are important, Giancarlo said, "because we can’t win their hearts for a couple of years. After that, if we can’t keep them, it’s our own fault."
Abacast & WhiteBlox Partner on P2PTV
Abacast and WhiteBlox announced at NAB2007 a partnership whereby video content will be delivered efficiently and effectively through the WhiteBlox Internet television solutions suite using Abacast’s hybrid P2P video streaming technology.
WhiteBlox’s innovative broadband television solutions allow companies to leverage video assets into profits by providing live multi-camera capabilities, on-demand programming, interactive advertising, e-commerce, and unprecedented levels of community interactivity all within one online media player. WhiteBlox’ suite is an end-to-end solution, from encoding to integration, enhancements and delivery.
WhiteBlox’s solutions will now also include Abacast’s patented hybrid P2P streaming technology for the highest quality and most efficient, cost-effective delivery. Abacast’s distributed streaming technology not only reduces live video streaming costs by up to 98% but also provides end-to-end quality of service monitoring and a measurable improvement in the end-users’ experience.
"We are thrilled to be partnering with Abacast," said WhiteBlox CTO, Serge Stein. "Abacast has terrific technology that provides high-quality yet cost-effective delivery. The integration of our offerings will provide increased options and even higher revenue generating potential for clients looking to monetize their content."
WhiteBlox clients will now have an option when setting up live streaming events to choose standard unicast streaming technology or the higher quality, more affordable hybrid P2P streaming from Abacast.
Further, the Abacast media player plug-in has been integrated into the WhiteBlox player so there is no need for a plug-in download by the end user. Thus, the end-user’s experience will be exactly the same regardless of which delivery option is chosen. This high degree of integration between the two companies’ offerings will make the combined solution extremely powerful in the marketplace.
"We are very excited about this partnership. WhiteBlox has a great solution for helping clients encode, brand and monetize their video events. Now with Abacast delivery technology these events will be even more profitable," said Mike King, CEO of Abacast, "while at the same time improving the quality of the end-product."
VeriSign Three-Screen Solution & Services
VeriSign, the leading provider of digital infrastructure for the networked world, announced at NAB2007 the launch of its Three-Screen Solution and Global Consulting Services for Media and Entertainment Companies.
VeriSign has combined its proven expertise in digital infrastructure solutions and professional services with market leaders ExtendMedia and Organic to enable media and entertainment companies to provide consumers with an unmatched digital experience across multiple screens.
"With a trend toward high-quality, long-form content and a consumer that is more mobile and demanding than ever, media and entertainment brands are having to rethink and retool their approach – developing new digital distribution channels and experiences for their consumers," said Stratton Sclavos, Chairman & CEO, VeriSign.
"VeriSign has the global digital infrastructure, industry partnerships, and proven expertise to help companies quickly and economically meet this need, so they can focus on developing creative and engaging rich-media content for their targeted audiences."
The VeriSign Three-Screen Solution enables media and entertainment companies to accelerate time-to-market and drive new revenue streams by helping them offer end-users an enhanced digital experience.
The VeriSign Three-Screen platform includes the following features: VeriSign Intelligent Content Delivery Network, VeriSign Interactive TV and Applications, and VeriSign Content Portal Services.
VeriSign Global Consulting Services for Media and Entertainment delivers market expertise and skills in strategy, design, and development of solutions as well as technical implementation that enable customers to get content to their consumers and capture new revenue streams across every new-media consumer touch-point.
P2P Now for Pretty Much Everything
Excerpted from GigaOM Report
At the dawn of the broadband era, P2P technology became closely associated with music file sharing, thanks to programs like Napster and Kazaa.
Later, the emergence of protocols such as BitTorrent linked P2P to movie and television downloads. P2P became a red flag for MPAA, RIAA, and other content rights-owner groups worldwide.
Over the years, P2P has found many legitimate uses and has found a way into everyday life. Even Akamai, which had scoffed at P2P, decided to acquire Red Swoosh in a deal announced last week.
"P2P is not just a file-sharing technology," Mikkel Dissing, CEO of RawFlow, said recently. RawFlow is a 6-year-old company that has developed a P2P streaming software platform for sharing live video-streams. It is currently developing a personal broadcasting technology called Selfcast, also based on P2P technologies.
P2P has become pervasive in our lives.
Skinkers Launches P2PTV at NAB2007
Also at NAB2007, Skinkers unveiled LiveStation, a P2P Internet broadcast technology co-developed with Microsoft Research.
LiveStation integrates Microsoft Silverlight (previously called "WPF/E") with Skinker’s P2P technologies to set a new standard for cost effective delivery of high-quality live video content.
LiveStation uses Silverlight to create a rich interactive user experience for live video delivery. The P2P approach ensures bandwidth usage is minimized and removes the need for powerful, expensive server farms to stream live TV shows and events.
"Skinkers welcomes the introduction of Microsoft Silverlight with capabilities to enable our customers to deliver interactive web video experiences that blend media, graphics, and animation," said Matteo Berlucchi, Co-founder and CEO, Skinkers. "Silverlight’s cross platform approach will enable us to deliver consistent experiences to both Mac and Windows users on a variety of browsers."
"Internet broadcasting is the new frontier for content owners and there is clearly a market for the many video-on-demand (VOD) providers currently emerging," said Berlucchi. "We also know there is an enormous demand to stream live TV-like experiences to the desktop. Sports, concerts and breaking news have all proven popular online. Current streaming techniques require vast infrastructure demands to serve relatively small audiences. With LiveStation, broadcasters can scale up to audiences of millions for a fraction of the cost while guaranteeing a rich user experience with minimal latency and no buffering. By adding Silverlight to the mix we’ll be able to deliver experiences that transcend conventional broadcast capabilities."
LiveStation users simply click on the LiveStation viewer, which can be embedded in a browser, installed from a website or distributed on physical media. The LiveStation viewer enables audiences to view live content on their PC and switch between channels if multiple live TV streams are offered. When running the LiveStation viewer, the user’s PC will join the "cloud" of P2P nodes watching the same channel and helping each other to stream the live content effectively and efficiently. This all happens without impacting the performance of the user’s PC.
Spike Develops Taste for Babelgum
Excerpted from C21 Media Report
Global Internet P2PTV start-ups Babelgum and Joost were vying for the attention of the television establishment gathered in Cannes this week.
Spike Lee brought a sprinkling of Hollywood stardust to the launch of Babelgum, which created a buzz at this year’s MipTV.
The outspoken US director granted Babelgum a three-month exclusive window to a short film he made about HIV, originally commissioned in 2005 by Unicef. It’s the first time "Jesus Children of America" has been publicly available.
It was a nostalgic trip for Lee, whose credits include "Do The Right Thing," "Clockers," and "Malcolm X." "It was 20 years ago last year that my first film – "She’s Gotta Have It" - had its premiere here in Cannes. It won the Prix de Jeunnesse and that started it all," he said. "For a filmmaker at my age that was how you got seen - by film festivals."
But technology has come along in leaps and bounds since Lee was a student some 30 years ago. "When I went to film school it wasn’t so I could get a master of fine arts. I went to film school because I wanted the equipment. Now, my students edit their films on their laptops. The problem is distribution. You have to somehow get your work seen."
This is where the Internet comes in. "As an artist it gives you a chance to share your work with people all around the world who otherwise might not have known you existed," said Lee. "Babelgum is a great opportunity to get your work seen, not just so you can get a job but just so you can share your vision of the world with the rest of the world."
This is the long-term view. Babelgum, like its main rival Joost, which was hosting a reception at the same time at another venue around the corner, is still in beta testing and will remain that way till early next year. Both services are using P2P technology. Both are operating on an ad-supported free-to-view streaming model.
The difference between the two companies’ events was marked, however. Joost’s was a low-key, understated, and intimate affair, on a sun-kissed rooftop overlooking Cannes, with a steady stream of representatives from major studios, broadcasters, smaller distributors and Internet giants.
The Babelgum launch, meanwhile, was an expensive heavily stage-managed extravaganza in a cavernous hotel room along the Croisette. The star presence was a pull for the broader audience. Lee was there to help Babelgum in the PR battle.
Joost has benefited from the awe inspired by having a couple of young dotcom billionaire founders with a history of disrupting traditional businesses - through their previous ventures, the music-sharing service Kazaa and Internet telephony business Skype. As a result the doors of TV’s elite opened early on to Niklas Zennström and Janus Friis and, when top execs are impressed by what they see, word travels fast without the need for any razzamatazz. Viacom, CBS, National Geographic, and Endemol have all hopped on board.
Even when it’s ready for a full-blown commercial launch, Joost isn’t likely to spend big bucks on marketing, drawing on the viral nature of the Internet to spread the buzz, only inviting those in who are genuinely interested in the service, says CEO Fredrik de Wahl. Potential ad partners have already been registering their interest, with Coca Cola among those courting the company.
Babelgum CEO Lumer doesn’t believe Joost is at any particular advantage at the moment. "In reality we’re pretty much at the same stage. We started pretty much at the same time. They’ve started earlier in terms of marketing and creating expectation, but in terms of development we’re fairly close," he says.
"They’ve made a few deals with major studios and the press loves to talk about those. We’re working on similar deals, but our focus is primarily on developing a lot of the untapped market of professional video content that is not readily available on other channels."
Aside from the promotional power of Spike Lee, Babelgum’s current list of content partners is slightly slimmer and with fewer big names attached. Associated Press, Reuters, IMG, and Shine are among those involved but the breadth and offering will inevitably expand.
"Joost is a very strong player. At this stage we tend to think that because it’s a new market they’re really helping to develop that market and it’s good for us to have another player. How that will pan out it’s very early to say," says Lumer.
Babelgum may not have the billions behind it that Joost does, but the company’s Chairman, Silvio Scaglia, isn’t short of a bob or two. He previously founded and still chairs FastWeb and has set aside $288 million from the sale of a 6.3% stake in the Italian IPTV business to get his new venture off the ground.
Ultimately, the success of Babelgum, Joost, or any number of similar ventures springing up will largely rest on the marketing effort, on creating a buzz whether by overt or underground means.
On the surface, there’s little difference between their sleek user interfaces but to truly become a "global Internet TV platform" requires scale. This in turn requires the kind of content that will draw the greatest number of people or those that are most dedicated and can be effectively shuffled into advertiser-friendly niches.
As MySpace and YouTube have proved, the audience is king, but whereas these sites grew organically by virtue of their original nature, the challenge for the P2PTV providers is to get people glued in the first place using more traditional content.
Some, like MGM COO Rick Sands, have accused Joost and the like of being no more than mere "pipes." But there’s a lot of highly developed technology behind these pipes and content companies haven’t even begun to scratch the surface of the innovations they could play out on them, not to mention the new breed of laptop-armed film students emerging from Lee’s tutelage or those determined to simply break out on their own.
Joost Adds Indie Film & TV Content
Joost, the world’s first broadcast-quality Internet television platform, also announced at MipTV that it has signed distribution partnerships with critically-acclaimed independent film and television producers ALL3MEDIA International, Alliance Atlantis, September Films, and Wall to Wall; as well as independent distributors IndieFlix and Shorts International.
"With Joost, our film-makers and artists have a greater opportunity than ever before to showcase their remarkable talents and to reach new audiences," said Carter Pilcher, CEO of Shorts International, which will bring Joost viewers a taste of their English, French, and Spanish short film channels: SHORTSTV, SHORTSTV France, and SHORTSTV Corto.
"Joost’s secure, global platform is ideal for our artists as it ensures that the films are viewed with the level of quality which was intended by their creators."
Content creators and owners of all sizes are utilizing Joost’s high-quality, piracy-proof Internet platform, enabling premium interactive video experiences while guaranteeing copyright protection. Independent producers and distributors are gaining particular value from this unprecedented global broadcast opportunity.
"Giving independent film producers and distributors a cost-effective, global outlet is one of the coolest things about Joost," said Yvette Alberdingk Thijm, Executive Vice President, Content Strategy and Acquisition for Joost.
"Joost empowers independent content owners to reach new audiences and generate additional revenue in a community-driven environment, while ensuring that all programs are fully protected from copyright infringement."
Over 100 Million US Online Video Users
Excerpted from MediaPost Report by Jack Loechner
According to recent findings released by Ipsos Insight from a study of digital video behaviors, at the end of 2006, 58% of Americans age 12 or older with Internet access had streamed some form of video content online – 100 million Americans, or 44% of the overall US population age 12 or older.
Brian Cruikshank, Executive Vice President of Ipsos Insight Technology & Communications, said, "The YouTube phenomenon has caught on with Americans, and given their appetite for video, the ability to select and watch exactly what you want online has become a strong lure for many consumers. And it’s instant gratification for entertainment lovers."
The report goes further to say that 28% of Americans age 12+ have downloaded a digital video file, with a significant amount of overlap between these two types of digital video formats - so many consumers who stream video also experiment with downloading video online.
Teens and young adults are the most likely to stream video online: three in four of all teens age 12-17 and young adults age 18-24 in the US have ever streamed digital video content online. The demographic of the typical video streamer skews younger, are more likely to have higher incomes, and be highly educated.
Today, teens and young adults, on average, have stored 20% of their entire video library either digitally (stored on a hard drive) and/or have burned this content onto DVD-R, says the report. The size of consumers’ digital video libraries will continue to grow as the streaming and downloading market matures.
Shorter video clips are by far the most preferred type of video file accessed today by Internet users. Three quarters of all digital video streamers have streamed short news or sports clips, while two thirds have streamed amateur or homemade video clips.
40% of those that have streamed or downloaded video content have accessed YouTube, and many in the past 30 days. Other video file sharing sites such as MySpace and Google Video are also common destinations for video streamers, with about one in five ever having accessed these two sites overall.
Most Americans still have never streamed or downloaded a full-length TV show or movie. However, despite the relatively low prevalence levels of downloading movies and TV shows among US adults today, many appear to find the idea appealing: 43% of all digital video downloaders and streamers express some level of interest in downloading full-length movies in the near future, while 38% express interest in full-length TV show downloads.
The most common barriers to downloading are users’ unwillingness to pay for this content, as well as a perceived difficulty or inability to burn these files onto DVD. For the complete report summary, please visit Ipsos here.
Can IPTV and Internet TV Co-Exist
Excerpted from Daily IPTV Report by David Cotriss
In an age where online content is proliferating, and an ever-growing number of viewers are watching online movies, TV shows, and user-created clips – all with interactive capabilities – many are asking how this will affect traditional television, not to mention newer cable-like services such as IPTV. The obvious answer is that the two will continue to co-exist, at least in the short term, despite corporate shakeups and changes in the ad industry. But what about down the road?
"At present, where IPTV and Internet TV offer the same content – which is not and will not always be the case – these two camps essentially provide a choice in the method for watching a particular piece of content," said Ovum technology analyst Annelise Berendt. "This choice is based on a trade-off between price, convenience, and the quality of the experience.
It takes effort to search and pull content towards you, and there are plenty of consumers ready to receive pre-packaged content on the couch without having to think too much about or seek out their viewing experience.
There are of course market niches that are tech savvy, prepared to accept a lower quality experience and more inconvenience in order to avoid paying directly for what they watch. For them Internet TV is the answer. However, it is not likely that these consumers are target customers for IPTV services."
Berendt said things will change down the road, however. "Longer term, there may be more competition between the two mediums. Players such as Joost are certainly raising the game in terms of quality and ease of use. The consumer electronics vendors are working hard to take web TV to the TV set – a vital requirement to take the medium mass market. If quality and ease of use are addressed, this means that in the future, some Internet TV services will represent greater competition for IPTV operators."
With online content, there has always been a sparked debate about copyrights and legality. Under pressure from studios and networks, many legal download and rental options exist today such as Movielink, Netflix and WatchNow, and even the P2P service BitTorrent has a licensed content download site. P2P networks reduce hardware and hosting costs along with bandwidth resources by spreading distribution across the user base. Yet unauthorized sites operate in parallel, and the P2P world is not necessarily separate from IPTV.
"They are connected worlds in that many of the telecom operators deploying IPTV services are also carrying and delivering the Internet traffic that includes the content distributed via P2P networks," said Berendt. "Many telecom operators will be working for Internet TV providers, if indirectly, in terms of distributing their traffic. The ‘net neutrality’ issue comes in when telecom operators are themselves aiming to sell content services to consumers and find themselves delivering the content of third parties with no kind of compensation."
Berendt says that in the next 5 years, one medium will not necessarily win out over the other, but changes will slowly occur.
"A variety of IP platforms for video services will operate in parallel and will do so for a long time to come, alongside the traditional terrestrial, satellite, and cable TV platforms. IPTV and Internet TV will tend to cater to different requirements and different customer segments – both the ‘sit forward’ and ‘lean back’ environments will continue to co-exist.
"But we do expect to see a closer working relationship between IPTV and Internet TV," said Berendt. "Telcos will look increasingly to both services and players on the open Internet, sometimes bringing them into the IPTV garden, as is the case with Verizon and YouTube, and with BT and PodShow.
In essence, they will offer an ‘extended garden.’ Many will also set up their own Internet TV offerings in parallel, perhaps aimed at different customer segments by leveraging brand, relationships and content across both. BT Vision, with its IPTV platform and web portal, including a download store for on-demand content and physical DVD purchase, is but one example."
Despite any negatives, many factors will draw consumers to IPTV.
"Quality, consistency and the safe environment of the IPTV service with the walled garden (main navigation page) at its center should in fact be presented as a core differentiator by IPTV operators," said Berendt. "Ease of use is another important factor, both in terms of the consumer being presented with content-on-a-plate rather than having to go out and search for it, and in terms of the actual technology set up in the home. Brand may also be an advantage depending on the maturity of the IPTV service and the operator involved. But IPTV will certainly have to be one step ahead in terms of quality, convenience, functionality, and of course in terms of the content being offered itself."
With the limited number of IPTV rollouts at present, the web will continue to play a vital role in providing interactive content. But once rollouts invade a large part of the marketplace, things are likely to get a lot more interesting.
Delivering the Digital Goods: iTunes Vs. P2P
Excerpted from Working Knowledge Report
Apple’s iTunes music download store and unauthorized P2P music downloads offer two contrasting approaches to delivering digital content to users.
Can Apple and the recording industry seriously compete against free? Do iTunes and P2P help each other in some ways? Professor Ramon Casadesus-Masanell and collaborator Andres Hervas-Drane discuss their recent research on competition in digital distribution. Key concepts include:
ITunes demonstrates that to compete effectively against free P2P networks, online digital distribution must deliver experiences to consumers that cannot be easily matched by decentralized, self-sustained P2P networks.
In designing new models, managers must consider how robust a given design is to models of other industry participants with which they interact.
Managers must also ponder how aggressive their business models are toward those of other players and ask whether or not complementarities are exploited.
The "scarce" resource in digital goods distribution through P2P networks is not content, but bandwidth. As a consequence, ISPs will have a more visible role in shaping industry structure.
Wilco Drummer Supports P2P
Excerpted from Zeropaid.com Report
The band actually admires the enthusiasm of file sharers.
In an interview with Australia’s X-Press Online, Wilco drummer Glenn Kotche makes some interesting comments about his thoughts on file sharing and how he feel about his albums getting downloaded for free.
We’ve heard tons of comments from music artists that lament about how file sharers have stolen food from their kids’ mouths, puts people out of work, etc., but, we rarely hear about music artists that give it a thumbs up.
Now artists don’t really make that much money off of CDs anyway, it’s usually in the area of only a dollar or two depending on the financial arrangement made with the recording company. The bulk of an artist’s income comes from concert touring and merchandising where they get to keep all the money they make.
Yet still, when was the last time you heard of an artist saying that "It is way more important for the music to be heard than for us to get a little money off of every CD" as he does in this interview?
ISPs Must Come Clean on Traffic Shaping
Excerpted from Toronto Star Report by Michael Geist
With well over a million subscribers, Rogers is universally recognized as one of Canada’s leading Internet service providers (ISPs).The company offers several tiers of service, including the "Extreme" package that boasts of "blistering speed for sharing large files and much more." The package offers fast downloads, somewhat slower uploads, and a monthly cap of 100 gigabytes for data transfers.
Despite the promises of fast speeds and large file-sharing capabilities, there are growing concerns among many consumers that the service delivers far less than advertised. Rogers actively engages in "traffic shaping," a process that limits the amount of bandwidth available for certain applications. Although this was initially limited to P2P file-sharing applications, there is mounting speculation that the practice may be affecting basic functionality such as e-mail and the use of virtual private networks (VPNs).
For the past eighteen months, Rogers traffic shaping has been an open secret. While Rogers at first denied the practice, it effectively acknowledged it in late 2005, arguing that P2P file sharing was using a disproportionate percentage of network resources and that the traffic shaping was needed to maintain the functionality of core services such as e-mail and web browsing.
In response to the implementation of traffic shaping, many file-sharing applications now employ encryption to make it difficult to detect the contents of data packets. This has led to a technical "cat-and-mouse" game, with Rogers now believed to be one of the only ISPs in the world to simply degrade encrypted traffic. The traffic-shaping issue raises several important concerns. >From a consumer perspective, it is difficult to reconcile how the company can promote a service offering specific speeds and a maximum cap on data transfers, yet secretly hamper the ability for consumers to make full use of the service for which they have paid. Moreover, the failure to disclose the practice - a comprehensive search of the Rogers website does not yield a single mention of traffic shaping or limits on P2P applications - may bring consumer-protection statutes into play.
Rogers’ traffic-shaping practices have also raised concern among network-neutrality advocates, who fear that the company could limit bandwidth to competing content or services. Some customers note that the bandwidth consumed by customers of Rogers Internet phone service does not count against the monthly cap, though the same is not true for competing Internet telephony services. Further, traffic shaping of file-sharing applications - particularly those that use the BitTorrent protocol - targets a protocol that is relied upon by a growing number of small businesses. These include Canadian artists and film makers who use BitTorrent to circulate their work and open source software developers who depend on BitTorrent to distribute their programs in a cost-effective manner.
In addition to the consumer and competition concerns, there is now speculation that the traffic shaping is rendering it difficult for certain computer users to use e-mail applications from home.
The University of Ottawa uses a persistent SSL encryption technology for the thousands of professors and students who access their e-mail from off-campus. There is speculation that Rogers is mistakenly treating the encrypted e-mail traffic as encrypted BitTorrent traffic, thereby creating noticeable slowdowns. Indeed, the university computer help desk has received a steady stream of complaints from Rogers customers about off-campus e-mail service.
If true, this form of network interference - implemented with virtually no transparency and now affecting basic Internet services such as e-mail - could well extend beyond just e-mail to include a host of other core applications that rely upon encrypted data transfers. For example, many businesses depend upon encryption to create VPNs that enable employees to log-in from remote locations into company servers. If Rogers is degrading encrypted traffic, it could render such applications virtually unusable.
Notwithstanding the steady flow of complaints, the lack of transparency from Rogers, and the potential threat to core communications activities, there has seemingly been no action from any governmental authorities. In fact, earlier this month, a telecommunications deregulation plan moved forward over the objection of a parliamentary committee that studied the issue.
While the government has announced plans for a new consumer complaints commission, providing a sounding board for consumers is not enough. The solution lies in requiring full disclosure of traffic shaping and provisions to ensure that essential communications tools such as e-mail are not surreptitiously degraded.
Justice Department Infringement Conviction
A fifth defendant has pleaded guilty in connection with Operation D-Elite, a criminal enforcement action targeting individuals committing copyright infringement on a P2P network using BitTorrent technology.
The guilty plea was entered in response to a two-count felony charge for conspiracy to commit and actual commission of criminal copyright infringement in violation of the Family Entertainment Copyright Act (FECA). The guilty party faces up to five years in prison, a fine of $250,000, and three years of supervised release.
This is the fifth in a series of convictions arising from Operation D-Elite, an ongoing federal crackdown against the unauthorized distribution of copyrighted movies, software, games, and music over P2P networks employing the BitTorrent file-sharing technology.
Operation D-Elite targeted leading members of a technologically sophisticated P2P network known as Elite Torrents. At its prime, the Elite Torrents network attracted more than 133,000 members and facilitated the unlicensed distribution of more than 17,800 titles – including movies, software, music, and games – which were downloaded over two million times.
The virtually unlimited content selection available on the Elite Torrents network often included copies of copyrighted works before they were available in retail stores or movie theatres. The convicted uploader was responsible for supplying the network with the first copies of movies and other content that was then made available to the entire network for downloading.
In May 2005, federal agents shut down the Elite Torrents network by taking control of its main server. After seizing the server, authorities replaced the existing web-page with a law enforcement message announcing that "This Site Has Been Permanently Shut Down by the Federal Bureau of Investigation (FBI) and US Immigration and Customs Enforcement (ICE)."
Within a week, the law enforcement message was viewed over half a million times. Operation D-Elite is a joint investigation by ICE and the FBI as part of the Computer and Technology Crime High Tech Response Team (CATCH), a San Diego task force of specially trained prosecutors and law enforcement officers who focus on high-tech crime.
Federal and state member agencies of CATCH include ICE, the FBI, the Department of Justice, the San Diego District Attorney’s Office, San Diego Police Department, the San Diego Sheriff’s Department, and San Diego County Probation. The Motion Picture Association of America (MPAA) provided substantial assistance to this investigation.
Coming Events of Interest
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MUSEXPO – An unprecedented group of global entertainment executives will congregate in West Hollywood, CA April 29th - May 2nd for A&R WORLDWIDE’s international music and media forum. Designated "a united nations of the music industry," top tier music, media and technology global executives unite to participate in a series of timely industry forums kicked-off by a round-table keynote event moderated by Emmy Award-winning CNN host Larry King.
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CONNECTIONS 2007 – May 1st-3rd in Santa Clara, CA. Now in its eleventh year, CONNECTIONS: The Digital Living Conference and Showcase, produced by Parks Associates in partnership with the Consumer Electronics Association (CEA), is the largest executive conference and showcase dedicated to advanced digital lifestyle solutions for residential and mobile environments.
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Streaming Media East - The Business & Technology of Online Video - May 15th-16th at the Hilton New York, NY. Streaming Media East is the only trade show dedicated to coverage of both the business of video on the net and the technology of streaming, downloading, IPTV and mobile video delivery. The DCIA is a show sponsor, and DCIA Member BUYDRM’s Christopher Levy will speak on the P2P for Large Scale Video Delivery panel.
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P2P MEDIA SUMMIT LA – June 11th in Santa Monica, CA. This is the DCIA’s must-attend event for everyone interested in P2P. Keynotes, panels, and workshops on the latest breakthroughs. Held in conjunction with the new Digital Hollywood Spring conference and exposition.
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Digital Hollywood Spring – June 12th–14th in Santa Monica, CA. Now expanded to Le Merigot as well as Loews Anatole Hotel. With many new sessions and feature events, this has become the premiere digital entertainment conference and expositions. DCIA Members will exhibit and speak on a number of panels.
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NXTcomm – June 18th–20th in Chicago, IL. The next-generation global forum and marketplace for the business of information, communications, and entertainment technology. The forces that drive communication and the solutions to harness it converge here. The DCIA will participate with Digital Hollywood.
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International Broadcasting Convention (IBC) – September 6th-11th in Amsterdam, Holland. IBC is committed to providing the world’s best event for everyone involved in the creation, management, and delivery of content for the entertainment industry, including DCIA Members. Run by the industry for the industry, convention organizers are drawn from participating companies.
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PT/EXPO COMM – October 23rd-27th at the China International Exhibition Center in Beijing, China. The largest telecommunications/IT industry event in the world’s fastest growing telecom sector. PT/EXPO COMM offers DCIA participants from all over the world a high profile promotional platform in a sales environment that is rich in capital investment.
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