TECH TALK: Video on the Internet: It’s Coming

I was talking to a friend in the US the other day about Web 2.0 and the resurgence of the Internet. He made an interesting remark. He said that unlike 1999, when everything to do with the Internet was hot, this time around, it is primarily only things with the word ‘video’ in them. Video is finally happening on the Internet – both from professional sources and amateurs equipped with digital cameras and mobiles. For users, the broadband connections are finally being put to good use. Even in India, SifyMax has taken an early lead in bringing video to the few hundred thousand connections that they have.

Video on the Internet is where text was in 1995. The tools to publish and browse were made available, and created a positive feedback loop for adoption. Now, the same thing is happening with video. Even though it is still a challenge in India, I do expect that to change with the increase in broadband usage and video servers in data centres closer to users. From an Indian perspective, what we will see is India-centric video available first internationally where broadband is available.

This is, again, similar to what happened in 1995. Then, I had launched IndiaWorld as a portal for Indians outside India. (Commercial Internet access came to India about five months after we launched.) This time around, companies like Rajshri Media (in which I have an investment) will take Indian video content to audiences globally. Then, as broadband becomes more widely available in India, the domestic traffic will start rising. In India, a number of telcos are planning to launch IP-TV services over the next few months.

Video will also come to mobile phones – in fact, it has already started. Short clips of movies, ranging from 30 seconds to a few minutes, are already available for download across many Indian mobile operators. Mobile TV can manifest itself in another form through direct terrestrial broadcasting – much like FM is available on many mobiles phones.

The one interesting element in the growth of video is the role of user-generated content. In the past six months, sites like YouTube have shot up in popularity. Google and Yahoo have launched their own video initiatives. Apple’s video iPod is a popular consumption device. The huge blue ocean of video archives from TV and movies is starting to come online. Every sports event causes an upsurge of interest and brings it with millions of new video consumers on the Internet.

These are the early days of video to the Internet. There are multiple business models being experimented with. It is not clear whether video on the Internet will be subsidized by advertising like much of the text Internet. What is clear, though, is that the ultimate form of human expression is set to begin its reign on the Internet. It should be good for content owners and users, and eventually, businesses who can communicate their messages in a more targeted form to users. It is time to get ready for the Videonet!

Tomorrow: New Media

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TECH TALK: Video on the Internet: New Media

Will Richmond publishes a newsletter entitled “Broadband Directions” with a focus around IP-delivered video. This is what he wrote in one of his recent newsletters: “Things have really heated up in the past six months as broadband has been recognized as a legitimate platform for video distribution and a key ingredient in all media business plans. This has happened because people understand that broadband allows unparalleled targeting, sponsorship and engagement opportunities at a very low (relative) cost.”

Will also summarised some of the recent activity in the US context:

Google, Yahoo, MSN, AOL, Apple — Our firm calls these companies the "Group of Five" as these online behemoths are best-positioned to become next-generation, broadband-centric video distributors.

Cable Programmers — Cable programmers have ramped up their launches of "broadband channels" to create new video-rich destinations for their audiences.

Broadcasters — The major broadcast networks have been eager to position themselves as being multi-platform to exploit all new forms of digital distribution.

Everyone else — Broadband is opening up opportunities for early-stage, niche video programmers (much like cable TV once did) as well as established, non video-oriented media companies (e.g. print media, online publishers, etc.) who want to extend their brands into video. There's also an opportunity for consumer product companies to stake a new claim in video that goes well beyond standard ad units.

Business Week had an interview early this year with Mike Volpi of Cisco. He felt that IPTV happening is only a matter of time. He added: "There will be a lot more user-created video, especially as consumer video recorders and editing technology get better. Just as we reached a tipping point with digital cameras, we'll soon reach a tipping point with digital video recorders. And there will be a lot more ad hoc video content, which is slightly dumbed down but still feels like it was professionally produced. It will be easy and cheap to make, like reality TV. And there will be professional content, but it will allow much more room for user preferences. People will be able to select camera angles or different endings for a show."

Two commonly used words are timeshifting (think TiVo) and placeshifting (think Sling Media). Timeshifting allows users to watch the programmes of their choice at their convenience – where the device (or service) records programmes much like a VCR used to do (or still does for some of us). Placeshifting allows viewers to watch the programming from their home cable networks via the Internet anywhere they want. Take together, both shift control from the broadcaster and distributor to the viewer. That is a common theme in the emergence of video on the Internet.

Tomorrow: New Media (continued)

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TECH TALK: Video on the Internet: New Media (Part 2)

Kevin Werbach captures the essence of the coming Videonet:

I get a lot of skepticism, even from technology enthusiasts, when I talk about the convergence of the Internet and video. People point out all the ways that TV is hard to distribute over today's broadband and wireless networks, and all the business or regulatory challenges new entrants face in trying to replicate the businesses broadcasters and cable TV operators developed over decades.
That's not the goal.

The Internet won't completely replace television as we know it. Instead, it will mutate and extend it. Right now we're seeing the long-promised "convergence" play out on two levels. Big phone companies are deploying digital platforms on fiber optic networks to compete with cable operators, who are rushing to add on-demand features in response. To me, though, that's less interesting than the distributed, bottom-up activity around short video clips on the Net and wireless networks. One is about competition; the other is about transformation.

At some point, thanks to VOIP, most of the voice conversations we engage in across the network won't be phone calls. (That's at least part of what eBay/Skype is about.) Similarly, most of the video content we watch won't be television. Those traditional forms will still be around, but they will become specialized, much like radio after the emergence of television.
This is what the incumbents can never appreciate. They are hard coded to assume that voice = phone calls and video = TV. The two great economic drivers of the communications industry, advertisers and users, will have no trouble adapting. AOL, Yahoo!, and Google, each in its own way, cracked the code for harnessing the text Internet as an advertising medium. Those companies, and perhaps others, are bound to do the same for the video Internet. Once they do, look out.

Media is changing. The likes of Napster and Google have, over the past few years, forced media companies to think hard about the business they are in. Media is being forced to change because the habits of users are changing. The Economist wrote in a recent survey on new media:

Last November, the Pew Internet & American Life Project found that 57% of American teenagers create content for the internet—from text to pictures, music and video. In this new-media culture, says Paul Saffo, a director at the Institute for the Future in California, people no longer passively “consume” media (and thus advertising, its main revenue source) but actively participate in them, which usually means creating content, in whatever form and on whatever scale. This does not have to mean that “people write their own newspaper”, says Jeremy Zawodny, a prominent blogger and software engineer at Yahoo!, an internet portal. “It could be as simple as rating the restaurants they went to or the movie they saw,” or as sophisticated as shooting a home video.

This has profound implications for traditional business models in the media industry, which are based on aggregating large passive audiences and holding them captive during advertising interruptions. In the new-media era, audiences will occasionally be large, but often small, and usually tiny…With participatory media, the boundaries between audiences and creators become blurred and often invisible.

Tomorrow: New Media (continued)

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TECH TALK: Video on the Internet: New Media (Part 3)

In an article about ABC, John Hagel outlined the challenges facing media companies:

The most powerful brands in the media business will be held by successful intermediaries that help to consistently improve return on attention for audiences. In the process, the nature of the brand promise will change in a profound way. It will be a massive opportunity for media companies that understand the shift in economic and competitive dynamics and that focus on the rebundling plays required to build these brands.

There’s another way to frame the strategic opportunity/challenge for media businesses going forward. In addition to unbundling and rebundling of content, media companies face a choice: do they want to remain product businesses or do they want to become audience relationship businesses?

Of course, media companies have elements of both embedded in their companies today, but their hearts and minds are firmly in the product business. Here’s the test: how open is the media company to providing access to third party content on behalf of their audiences? If the answer is not very open, the company is primarily a product business. If the answer is very open, then the company is primarily an audience relationship business.

The Wall Street Journal wrote recently about the convergence between the PC and TV as people spend more time in front of their computer:

Networks are making shows available online, whether on their own sites or through a service such as iTunes. Some are going even further, creating programs exclusively for the Web -- a step that could eventually make the Internet a proving ground for television shows. Meanwhile, creative teams outside the television industry are producing their own online series -- leading some experts to speculate that Internet companies like AOL could morph into de facto networks as well.

From a viewer's perspective, all of this obviously means lots of new choices -- more shows to watch and more say in when you watch them. But the Web also gives the public something more subtle: creative power. Not only can die-hards discuss their favorite shows on message boards, they can create high-tech tributes online, such as "best of" video montages.
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[Advertisers] look forward to a time when they can use the Web's data-gathering capabilities to get a breakdown of who's watching a show and create ads targeted to each demographic segment.
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Along with new viewing choices, the Web lets people get involved with their favorite shows in creative new ways. For years, enthusiasts have gathered online to discuss plot twists, share theories and script alternative endings. Now, thanks to evolving technology and widely available digital content, fans can take snippets of shows and repackage them, drawing thousands of eyeballs in the process.

Tomorrow: New Media (continued)

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TECH TALK: Video on the Internet: New Media (Part 4)

At heart, the Internet is shifting from text to video. An article last September in the New York Times highlighted this:

[Yahoo’s ] Mr. Semel and others are finding that the long-promised convergence of television and computers is happening not by way of elaborate systems created by cable companies, but from the bottom up as video clips on the Internet become easier to use and more interesting. Already, video search engines, run by Yahoo and others, have indexed more than one million clips, and only now are the big media outlets like Viacom and Time Warner moving to put some of their quality video online.

"The basis for content on the Internet is now shifting from text to video," said Michael J. Wolf, a partner at McKinsey & Company. "This allows advertisers to take advantage of the kind of branding advertising they are used to on television."

Mr. Semel thinks that his approach combining content and technology could well make Yahoo the place people go first when they decide what to watch, as well as where to surf.

"You are not going to have 1,000 channels, you will have an unlimited number of channels," Mr. Semel said. "So you aren't going to use a clicker to change channels."

Newsweek wrote in a story on the future of entertainment last September:

Just as all politics is local, all news and entertainment is now personal -- in the digital age, users can manipulate media to do what they want, when they want. Thanks to high-speed broadband pipes and peer-to-peer technology that puts more computing power in the hands of individuals, it's become much easier to create and manipulate media online. In this new world, consumers, as much as creators, are in control.

Secondly, the Internet changes the timeline of entertainment production, broadcast and consumption. Instead of a movie opening on the big screen, then trickling down to television, video and the Internet, it can appear in all formats at once, as 2929 Entertainment plans to do with new Steven Soderbergh releases. At the same time, in a world of digital choice, people can ignore your offerings, but they can also keep watching, reading or listening forever. That concept, famously dubbed the "Long Tail" by Wired editor Chris Anderson, also changes the entire economic model of entertainment, creating hugely successful niche products over longer periods of time.

Esther Dyson write in Release 1.0 last year: “IP TV is not WebTV redux. It is a set of Web-based software and services that allows video content stored on any server to be delivered to any device located anywhere, including the TV in the living room. The point is not to surf the Web from your TV, though consumers may choose to do so. It’s also not to download video to a PC – something that millions do today. The IP TV audience will get video content delivered over the Net to the device of their choosing and anytime they want. They’ll rely on Web-based directory services, program guides and utilities to establish personal preferences and to explore content marketplaces for good stuff to watch. More than that, some members of the audience will participate in the production, editing and remixing of that content… Perhaps the most important difference between the two models is that on network TV, the lion’s share of the content is produced and distributed by established media concerns, whose main concern is to create shows that will become popular enough to sell mass advertising around. On networked TV, anyone with a video camera, a piece of inexpensive (or free) video-editing software and an Internet connection can make and distribute content."

Video on the Internet is a fascinating space. As we begin our journey into understanding what is happening, we will start with a guided tour from one of the experts.

Next Week: Video on the Internet (continued)

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TECH TALK: Video on the Internet: Ramesh Jain’s Views

As we look ahead, it will be useful to get a primer on the video space. I have chosen a few posts from Ramesh Jain, a distinguished professor and entrepreneur. Ramesh is currently teaching at University of California, Irvine. [I have invested in a company built around his vision of tomorrow – the EventWeb. The company is Seraja.]

Ramesh Jain detailed the contours of new world that is emerging around video:

When Video-on-Demand (VoD) was initially proposed, it was suppose to be a vehicle for providing time-shifted TV for popular video content so people could watch any movie or TV show at their convenience in the comfort of their home. The basic idea was to store the content on a video server and develop a distribution network to provide access and delivery of these videos. Since Web has not emerged at that time, much effort was in creating infrastgructure that will allow distribution of movies to homes on TV through a distribution network. In early 1990s, after much optimism and discussion of this concept, the interest slowly disappeared. It was clear that the cost of the infrastructure was too high compared to the demand. VoD slowly became dormant. All the excitement shifted toward the Web, which, in the early stages was all about text.

With high bandwidth connectivity, things are taking a turn toward multimedia on the Web. First there was lot of interest in Voice over IP. Now things are changing and the main driver is becoming video. There is much excitement about IP and TV now. IPTV is basically video on the Internet, which is much potentially much more pervasive and transformative than VoIP. The major difference is that video can be shown on any device including TVs, PCs, and phones.

This is a bigger disruptive change than it appears at first: IPTV is the convergence of communication, computing, and content. People commonly talk about the convergence of communication and computing. In terms of content, people are accustomed to thinking mostly in terms of text and blobs (where a blob could be any media item but it was considered an atomic entity for the information system). Even VoD considers Video to be a blob, not content like pages on the Web. So a three-hour video could be played as a three-hour video but there was no indexing or content-based access possible. In the new world, this won’t be acceptable. Video content will also be stored and accessed at different levels of granularities based on its structure as well as semantics.

IPTV does require advances in infrastructure. Even today, distribution or communication mechanisms used in TV and the Internet are significantly different. They’ve been slowly moving toward each other, but are far from convergence. The TV structure, whether broadcast, cable, or satellite, is primarily based on the push metaphor where all the programs are pushed to the user. The only choice a user has is to change the channel or to turn off the TV. Now PVR is becoming common with cables and has started providing interesting time shift and storage capabilities. On the other hand, the Internet infrastructure is based more on personal choices in access. On the Internet, people combine push and pull depending on their needs and interests. Once video is available on the Internet, people will expect to use all the tools and functionalities that they commonly use with text. The major change required isn’t really the infrastructure, however. It’s making the tools robust yet easy to use. Internet culture will result in people starting to produce lots of video content for many different applications. The “long tail” effect will dominate this area also. People will start producing and placing videos on the Internet that they know will be used by only a limited number of other people—in some cases maybe only five other people. This will happen, however, only if the production tools for editing video will allow people to capture and prepare video to put on the Internet as easily as they author Web pages.

Tomorrow: Ramesh Jain’s View (continued)

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TECH TALK: Video on the Internet: Ramesh Jain’s Views (Part 2)

Ramesh Jain continues his discussion on IPTV and discusses two challenges that need to be addressed going ahead – editing and searching.

Current video editing tools are difficult to use. And, the tools that are easy to use don’t give enough control to author what an amateur producer might want. This is an interesting challenge to the multimedia community—and at the invitation-only Berkeley retreat at the 2003 ACM Multimedia conference, participants (about 30 leading researchers) correctly identified it as a grand challenge for multimedia. Add to authoring environment, addition of tools that will provide tagging for presentation – like HTML did for text. Such tools – let’s call them Video Presentation Markup Language (VPML). These tools will allow any player to take a video and play it as the producer intended it to be played.

The second and equally important problem is how to find videos of interest. Search engines have trained the current generation of Internet users to search for information using easy tools like specifying keywords. How will we search for video on the Internet? Current search techniques on the Internet extend text-based techniques, but they’re still rather limited compared to what we need for accessing video. The multimedia information retrieval research community and the practicing video retrieval community are poles apart. They’re developing more or less disjoint approaches: The research community wants to use only visual characteristics because that’s where interesting research challenges are. Practicing people want to just apply text-based approaches because that’s what they know. Everybody recognizes that to be successful, you must use all knowledge sources and all possible techniques for accessing video information. Unfortunately, that’s where it ends most of the time—just talking about combining multiple sources to solve this puzzle and then going to your workplace and continue what you’ve been doing. We need people who will take this challenge seriously and start developing techniques to access video information using text processing, visual computing, audio recognition, and folksonomy.

In this post, Ramesh Jain discusses why video will replace text as the primary media on the Internet:

I always believed that video is the most dominant medium of expression that humans have developed and will replace text. Video subsumes audio, visual, and textual media and allows appropriate combination of these to express ideas and experiences. At one time, just few years ago, it was so difficult to create, store, and distribute videos that very few people could imagine that video could become a ‘folk medium’ for expression. Even a few years ago it appeared that it would be long time before video could really become a popular expression media.

First internet, then availability of bandwidth, and then explosion in digital camera have resulted in a situation that some people have started calling the next bubble. Well whether bubble is there or not is the market issue, the popularity and explosion in use of video is going to stay as much as internet stays after the last bubble. Video is so powerful medium that people are going to increasingly use it. A very major advantage of video will soon emerge as a powerful unifying force across different language groups. As people dubbed popular movies, tools for adding audio tracks will propagate and popularize videos across languages.

Ramesh Jain discusses the concept of ‘channels’:

Channels on TV used to be broadcast channels in which a company decided what the users should want to see and programmed accordingly. Accordingly, we all became couch potatoes and selected a channel and watched it. When multiple channels became commonplace — we started channel switching and then channel surfing (particularly to avoid commercials).

Now the term channel is starting to take a different meaning. Initially it started by video sites — currently the most popular Youtube — offering special interest channels to which you could subscribe. And now they are taking it further — bringing in more internet culture. On the Web, you are simultaneously both producer and consumer. So in terms of channels you could be both a couch-potato as well as a channel-broadcaster. Moreover you could be remixing contents from different producers — or even from different channels — and producing your own branded channel.

Well it did happen to text so why not to video?

Plenty of food for thought. Moving on, we will take a closer look at the phenomenon of user-generated content.

Tomorrow: User-Generated Content

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TECH TALK: Video on the Internet: User-Generated Content

One of the themes that Ramesh Jain discussed was the emergence of user-generated content. Jeff Jarvis takes this idea to its logical end, suggesting that each of us is a network.

In the future of media, which is now, everybody is a network. In the past, networks were defined by control of content or distribution. But now, you can’t own all distribution and content is controlled where it’s created. So, I wonder, where’s the value and where’s the money in the fully networked world?
What is a network now? Your friend pointing you to something to read or watch is a network. The collection of people putting a YouTube video on their blogs makes a network. BlogAds bringing together 800 blogs for an MSNBC.com ad buy is a network. When you subscribe to a collection of feeds, or when you publish up a blogroll, or when you put a tag on your blog post, or when you use a Flickr tag that others use, you are a network.

Networks are about sharing now; they used to be about control. Networks are two-way; they used to be one-way. Networks are about aggregation more than distribution; they are about finding and being found. Networks are now open while, by their very definition, they used to be closed. You join networks and leave them them at will; you can join any number of networks at once and content can be found via any number of networks, there is no practical limit. Networks used to be static. Now networks are fluid.
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On the business side, the old networks have no end of new competition. The scarcity economy is over; networks cannot continue to raise their rates even as their audiences shrink, because they no longer control the clock; there is always somewhere else to reach audiences — somewhere more efficienct and less expensive, by the way…On the “consumer” side, the people formerly known as viewers have taken control of what, when, and how they watch and they do it without commercials.

Dan Farber wonders if the Web is the new Hollywood:

"The audience is taking over the programming," according to Ted Cohen,senior vice president of Digital Development and Distribution at EMI Music. "A few years ago we looked at litigating it, now we are looking at how to monetize it."
In the last several months, hundreds of video sites have shown up on the Web. However, the big entertainment companies, who fear loss of control, will need to let go to participate in the new media world, Cohen said. With or without permission, users are playing with the video and other content assets–from trailers to full length features–of entertainment companies.
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One major difference with the Internet is that reduction of scarcity is happening on a massive scale, [Brightcove’s Jeremy] Allaire said, and it is becoming more efficient to serve micro-markets. The issue of distribution control came up. Allaire said the most networks–such as MTV, Discovery, and Turner–would rather distribute themselves than ceding it to another gatekeeper. "How to get syndication and aggregation is not figured out," he said.

Tomorrow: YouTube

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TECH TALK: Video on the Internet: YouTube

YouTube is to video what Flickr has been to photos. The Economist wrote about its evolution in April:

In December people were uploading 8,000 clips a day, and watching 3m a day. This month they were uploading 35,000 a day and watching 40m a day. With such amazing growth -- almost all by word of mouth, e-mail and hyperlink -- YouTube already has four times the traffic of Google Video, the online video market of the world's largest search-engine firm, and the nearest thing to a rival.
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The success of YouTube points to another development. People are spending an average of 15 minutes on the site during each visit, enough to view several short, funny clips. This is because they are using YouTube for little breaks during a dull workday. And it is a “lean-forward” experience, as people sit in front of computer screens. This “clip culture”, as Mr Hurley calls it, is quite different from the “lean-back” experience of enjoying a half-hour show while reclining on the sofa.
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About 80% come from rank amateurs, and another 10% from “dedicated amateurs”, such as young comedians hoping to use internet celebrity as a way into a career. Unlike the big media companies looking to recycle their film libraries, Google Video and YouTube are simply giving ordinary people a way to share clips.

Hollywood Reporter captured the early days of YouTube in a March article:

In just a few months, YouTube has generated an inordinate amount of attention for a company with only 20 employees squeezed into a loft above a pizza parlor in San Mateo, Calif. Hurley founded the company in February 2005 with fellow twentysomething Steve Chen; both are former employees at online payment service PayPal.

YouTube is not a peer-to-peer service like Napster, but its video-hosting capabilities allow Internet surfers to stream videos easily from a Web page. Also unlike Napster, most of the video available is not entire TV episodes or movies but short clips no longer than three minutes.

That makes YouTube and its ilk ideal for showcasing homemade video of everything from baby's first steps to frat-house pranks. But many of these sites are positively teeming with copyright-infringing footage snipped from current and past television shows and movies. There is no barrier to entry for illegal videos; users can upload whatever they want in less than a half-hour.

YouTube has become an online juggernaut seemingly overnight. Not long after its soft launch in May, viewers were watching 30 videos a day; by the time the company officially launched in December, it was 3 million. Today, YouTube has twice the traffic of Yahoo! Video and more than three times that of Google Video and AOL Video.

Tomorrow: Tomorrow’s TV

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TECH TALK: Video on the Internet: Tomorrow’s TV

So, does the emergence of video on the Internet mark the passing away of the ‘idiot box’ that has entertained us for so long? The New York Times suggests that TV isn’t going away anytime soon:

The point of all these new video-content deals being struck by networks and studios is, of course, to avoid making the mistakes of the music industry, which focused too much on rear-guard actions like lawsuits and not enough on figuring out new ways to give the fans what they wanted.

The music analogy only goes so far, however. The way music is promoted and sold and listened to bears scant resemblance to TV and video products. Ventures like the one announced by Warner and the big networks are not really an alternative way of receiving conventional TV, but rather an alternative to buying or renting DVD's coupled with an intriguing new market opportunity to reach viewers on their desktop or mobile devices.

David G. Sanderson, who heads the media consulting practice at Bain & Company, offers four reasons most people won't be downloading their favorite shows onto their TV's any time soon: limitations in broadband infrastructure, the degree of readiness among electronics makers to provide a product with mass appeal, the behavior of consumers and the agenda of the players in the TV ecosystem.

Mark Cuban believes there are technical limitations:

The last mile into our homes wont have enough bandwidth to support all that we will want to do via our internet connections at home. There is no moores law for bandwidth to the home. THere is a huge misconception that bandwidth will just continue to experience unlimited expansion for every broadband household. Its what we are used to with hard drives, processors, all technology. It gets faster, cheaper, bigger. Thats not the case for the next decade with bandwidth
The net result is that TV is going to be TV, delivered like TV for a long time to come. (I consider IPTV to be regular TV). There wont be enough bandwidth for it to be any other way.

The problem is that our consumption of digital media at home will continue to grow. The bandwidth we want to consume will many times exceed the bandwidth available to us at that time.

The viewing of internet video will continue to grow. We will upload and download more and more video, consuming increasing amounts of bandwidth. We will want to download movies in High Def quality. Digital pictures will increase in resolution, and we will upload and share our lives through digital pictures that consumes multiple mbs per picture. Too do all of the above without limit, where and when you want to do it just cant happen. For the vast majority of us, there wont be enough bandwidth for at will, unlimited downloads.

Next Week: Video on the Internet (continued)

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TECH TALK: Video on the Internet: Tomorrow’s TV (Part 2)

News.com captured the essence of the future in an article last November:

Imagine a day when you would be in total control of creating your own TV channel lineup.

Instead of subscribing to a service from a cable, satellite or phone company that might offer you hundreds of channels you'll never watch, you would be able to select what you want and watch it on your own schedule.

That day might not be so far away. Slowly but surely, content that's broadcast over cable networks and through satellite providers is being distributed through the public Internet.
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"Producers of content want as many forms of distribution as they can get to reach their audience," said Vito Palermo, founder of a start-up called Portola Networks, which is in the early days of developing technology for content providers to manage the distribution of their content over the Web. "They would love to cut out the middlemen, but the economics must be compelling. Technology is an enabler, but there are a lot of other dynamics around consumer behavior and the business model that need to be in place first."

Much of the infrastructure to provide broadcast quality video directly over the public Internet is now available. Companies, such as Kontiki and EdgeStream, have already developed software to secure content and ensure the quality of streaming video.

Jeff Jarvis had this to say in a column for the Guardian last September entitled “Exploding TV”:

TV networks will not die. But neither will they grow - and in business, isn’t that as good as dying? Their audiences have been steadily falling away for a decade. Network ad revenue is now flat and a host of new gadgets compete for viewers’ attention.

Yet it’s not technology that ultimately will challenge big media’s monopoly. It’s the audience who will do that, for now they - or rather, we - can produce, distribute, and market our own content at a cost media giants cannot beat. Three important developments come together now to make this possible:

Thanks to new tools, anyone can make a show. Just as blogging liberated publishing, cheap gadgets and ever- easier software can turn anyone into a broadcaster. For example, Audacity - a free tool that makes editing audio as easy as cutting-and-pasting - lets us produce podcasts, the radio shows of the people. And even I, a child of print-and-paper, can make TV using a tool called Visual Communicator, which lets me write a script for a teleprompter on my computer screen and then drag-and-drop inserts of graphics and video on to the script so it is all recorded at once - no editing necessary. (To see a demonstration, go to buzzmachine.com/rtnda.)

The internet enables us to distribute what we make to the world. No longer do we have to beg the guy who owns the broadcast tower for time.

We can now market via links. That is how some blogs have built audiences the size of midsize newspapers’. That is how podcasts and vlogs (video blogs) will grow.

There is the real revolution in media: The one-way pipe that was broadcasting is giving way to an open pool that everyone owns, where anyone can play. The end of the network era isn’t just about losing audience or revenue or profits. It’s really about losing control.

One of the themes that has been mentioned around video on the Internet is the ability to target smaller audiences. We will examine this more closely.

Tomorrow: Niche Audiences

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TECH TALK: Video on the Internet: Niche Audiences

The real opportunity with video on the Internet is what the New York Times has called slivercasting.

In the last six months, major media companies have received much attention for starting to move their own programming online, whether downloads for video iPods or streaming programs that can be watched over high-speed Internet connections.

Perhaps more interesting -- and, arguably, more important -- are the thousands of producers whose programming would never make it into prime time but who have very dedicated small audiences. It's a phenomenon that could be called slivercasting.
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Indeed, the Internet's ability to offer an almost infinite selection is part of what makes it so appealing: people can find things that don't sell well enough to warrant shelf space in a neighborhood music store or video rental shop -- think of the obscure books on Amazon.com. The ease of digital video production and the ubiquity of high-speed Internet connections are sending the long tail of video into the living rooms of the world, live and in color.

Another way is to look at it as serving the needs of the long tail. This is what Mark Cuban has to say:

The reality of TV viewing is that people watch the same 15 to 20 channels over and over. They arent going to sit in front of their computers and look for video to replicate the experience of sitting on the couch or laying in bed.

What we did learn at Broadcast.com, is that people will search , even if it takes some work, to find things they are passionate about that arent on TV. If you are into bridge, you will find websites with videos pertaining to bridge. If you are into Tall Ships, Collecting coins, whatever. The beauty of the net is that you can find any and every kind of video. Its the definition of Long Tail.

And those viewers wont care if they are watching on their PC screen, a laptop screen or even an IPOD. Post it and they will find it.

It is now time to take a closer look at the underlying technology that is making video on the Internet happen.

Tomorrow: The Technology

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TECH TALK: Video on the Internet: The Technology

Esther Dyson’s Release 1.0 last year laid out the challenges:

First, consumers need some sort of Internet-ready device (or worse, a combination of devices!) to get high-quality video onto a TV set. The hardware may be a PC running Microsoft Media Center, or a more specialized, less expensive piece of gear such as a TiVo PVR, the Akimbo Player, XTV box or the 2Wire MediaPortal. These devices have on-board hard-drives for stashing content. Traditional cable and satellite boxes might also eventually be linked to the IP network, but without hard drives, they will have to rely on content that is stored and streamed from servers. None of these devices is designed to facilitate burning IP TV content onto DVDs easily.

Next, consumers need to find the available video content. Again, there are parallels to the early Internet, including experimentation with a wide variety of models. Content marketplaces (similar to early portals) aggregate video content from various sources, either by generating it themselves, licensing it from partners, or by offering up (or selling) storage space and content-serving capacity to grassroots content producers.
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The videos are then delivered to the end-user, often relying on content distribution networks such as Akamai, Kontiki,VitalStream and Limelight Networks to speed the delivery of video files to viewers. Depending on the hardware the viewer is using, the content may be streamed to a set-top box for immediate viewing or stored for later.

It is now easy for an individual to put video on the Internet and share it with others. For content owners wanting to put up a digital storefront, the challenges are greater. One needs to worry about digital rights management to ensure that the content is protected. Encoding needs to be at a very good quality so that users are satisfied enough to pay for it. Decisions about pricing are always tricky. How long can users keep content if they download it? Or should streaming be the only option? In addition, bandwidth for video is still not cheap enough to be ignored from the equation. Finally, money needs to be collected.

We have faced a host of similar issues in Rajshri Media (a company I have invested in) as we seek to build a broadband portal. From our reading and understanding, I have concluded that there are three ways to do video over the Internet. The first is via IPTV, which requires the telco to provide a set-top box. The second is the approach used by companies like YouTube, Brightcove and Entriq which deliver video directly to the browser using a plug-in. The third is to use P2P distribution networks like BitTorrent.

Tomorrow: Set-Top Box

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TECH TALK: Video on the Internet: Set-Top-Box

Ars Technica offers a tutorial on the first approach – using special hardware at the customer end in the form of a set-top box (STB):

First things first: the venerable set-top box, on its way out in the cable world, will make a resurgence in IPTV systems. The box will connect to the home DSL line and is responsible for reassembling the packets into a coherent video stream and then decoding the contents. Your computer could do the same job, but most people still don't have an always-on PC sitting beside the TV, so the box will make a comeback. Where will the box pull its picture from? To answer that question, let's start at the source.

Most video enters the system at the telco's national headend, where network feeds are pulled from satellites and encoded if necessary (often in MPEG-2, though H.264 and Windows Media are also possibilities). The video stream is broken up into IP packets and dumped into the telco's core network, which is a massive IP network that handles all sorts of other traffic (data, voice, etc.) in addition to the video. Here the advantages of owning the entire network from stem to stern (as the telcos do) really come into play, since quality of service (QoS) tools can prioritize the video traffic to prevent delay or fragmentation of the signal. Without control of the network, this would be dicey, since QoS requests are not often recognized between operators. With end-to-end control, the telcos can guarantee enough bandwidth for their signal at all times, which is key to providing the "just works" reliability consumers have come to expect from their television sets.

The video streams are received by a local office, which has the job of getting them out to the folks on the couch. This office is the place that local content (such as TV stations, advertising, and video on demand) is added to the mix, but it's also the spot where the IPTV middleware is housed. This software stack handles user authentication, channel change requests, billing, VoD requests, etc.—basically, all of the boring but necessary infrastructure.

In an article on Converge Digest, Ben Wagner and Charlie Gonsalves from Texas Instruments outline the potential of using IP STB:

A prime example of just how compelling IPTV can become is its potential for personalization. The total content offered over IPTV will certainly expand considerably as the marketplace continues to mature. And IP STBs that leverage the flexibility of a programmable architecture will open the door for television channels and services customized to each viewer’s tastes and preferences. Indeed, programming and advertising could be customized demographically for each member of the household. As an example we see so-called micro-market content such as that provided by video blogs and PodCasts which feature personally produced audio, video and still images continue to increase in popularity. These applications clearly illustrate the potential for finely tuned IPTV content that could be delivered upon request of each individual. Other examples of narrowly-defined differentiated content include international or multilingual channels, new formats like HDTV, exclusive sporting events or movies, and repackaged content.

Other symptoms of this drive toward the use of personalized TV content are the increasing deployment of personal video recorders (PVR) which are capable of capturing only the programming the viewer is interested in and video-on-demand applications where users can pick and choose the content they want to view.

The ability of IPTV to support interactive programming is another factor that will differentiate the content provided by next-generation IP STBs from competitive and incumbent services. Gaming, virtual storefronts and multimedia communications are some of the interactive possibilities. In fact, two-way, audio and video capabilities could be put to good use in a video phone or TV phone application, should consumer demand peak in this area.

Besides the telcos, companies like TiVo and Akimbo have taken this approach.

Tomorrow: All-Software

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TECH TALK: Video on the Internet: All-Software

The second approach eschews hardware for an all-software approach. YouTube, video services from Google and Yahoo, Brightcove and Entriq are examples of this approach. The challenge here is to ensure that the content can be protected, necessitating the need for a digital rights management module as part of the software.

Brightcove launched last year and offered content providers a white-label platform to create their own video storefronts. This is what PaidContent had to say following the launch:

The Cambridge-based company wants a hand in all facets of IP video or Internet TV -- creation, delivery and monetization.

Think of it as RealNetworks done right with a consumer video service, a backend service, and other allied services needed for everyone from small publishers, like bloggers, to small-to-mid sized media companies and online VOD startups, develop and distribute video easily and cost-effectively. In essence, an open-publishing model.

[CEO Jeremy] Allaire explains: "The online service will operate with a consumer-facing service that provides access to programming and content published in the service, and will also provide a very rich service to publishers and rights-holders interested in a direct-to-consumer distribution path for video products. The service will also provide tools to website operators generally, who are interested in economically participating in the online video revolution.

Om Malik added: “Instead of developing a hardware platform, the company will base everything it does on open standards, and will essentially be a software platform that will run on any kind of device - Microsoft Media Centers to TiVo to connected DVD players. In other words, he is gunning for a market that is the super nova of consumer-acquired devices.”

Om’s blog post expanded:

Though many might confuse Bright Cove as the culmination of all Long Tail and Exploding TV prayers, in reality, and Allaire was quick to point out that this is really a platform for the little guy. Someone who is interested in video blogging, short form film and other downloadable forms of video. “For live broadcasts, cable and service providers there is no substitute, and it is not feasible,” he says, “Network PVR and connected DVD players and other devices that are connected to open Internet will be able to use this to deliver content.” It is through this consumer electronics proxy, the video content will be delivered to the only screen that matters for video: the television.

Allaire succinctly put it when he says that his model is no different from that of a software developer who writes a program for say Windows or a Mac platform. “We are building all the pieces which are going to be needed including billing and DRM infrastructure,” he says, “We are piggy backing on platform where we don’t need distribution agreements. We are focused on open platforms and ultimately that is the model that is going to succeed.”

Esther Dyson wrote about Brightcove in the March issue of Release 1.0:

Brightcove allows content producers and video rights holders to have a direct relationship with the viewer rather than dealing with intermediaries such as cable operators, distributors or retail stores (in the case of DVD sales). The small guys especially are excited about distributing directly to consumers, but they’re ultimately looking for help with marketing, discovery. . .and frankly,with just getting paid,” says Allaire.

The idea is to use the Internet to eliminate current “scarcities”or bottlenecks, says Allaire: “The limited number of theaters that can support limited studio output, retail constrained by need for physical presence and reach as well as limited physical inventory (biggest retailers have fewest titles), and broadcast and cable limited by spectrum scarcity and scarcity of user-premises devices.”At the same time, Brightcove enables the producer to reach the consumer more directly, whether through a direct sale, an ad-supported channel or Brightcove’s own ad-supported syndicated search service. It parses what it can of the text and data around the videos and supplements that with the producers’ own metatags.

Among other solutions, Entriq’s MediaSphere platform also offers an ASP service for video. Microsoft’s Media Center Platform is in a similar space, providing video playback capabilities on the client (the PC).

Next Week: Video on the Internet (continued)

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TECH TALK: Video on the Internet: P2P

The third leverages the network entirely, focusing on a way to solve the distribution problem posed by very large video files. Robert Cringely wrote a series of articles earlier this year talking about various ways to distribute video on the Internet, with a specific focus on peer-to-peer (P2P) networks. This is from a column in Feburary:

The poster child for television 2.0, it seems to me, is a company like Grid Networks, which might be a new name to you. Like Bit Torrent, Grid has built a peer-to-peer distribution system. Like Mike Homer's Kontiki, Grid has married Digital Rights Management and a business model of sorts to its Torrent-like distribution system. But unlike most of the others, Grid (no, I am not an investor but thanks for asking) most approximates what my Mom thinks of as TV.
Kontiki has been around for a long time, and are definitely first mover in the market. They adopted a subscription model (RSS+P2P=Video), but for that the videos have to be downloaded in entirety, and there really is no "browse, click, watch" functionality in their system (at least yet). It is certainly better than waiting 2 days for NetFlix at the mail box, but it's just not quite user friendly enough in my opinion.

Grid's system, on the other hand, accomplishes two things from the end-user perspective: it is point, click and watch; and it is very very high quality. Using p2p, they can afford to send 1.5Mbps - 2Mbps video over their network because it costs the same as sending 150Kbps-200Kbps video.

BitTorrent remains the solution most synonymous with peer-to-peer video distribution. This is what Fortune wrote last October: “The 30-year-old [Bram] Cohen's invention BitTorrent is the next generation. It makes it simple to download massive, bandwidth intensive files (everything from the Lord of the Rings trilogy to the latest episode of Desperate Housewives in high def to a file containing 400 Amazing Spider-Man comic books). BitTorrent is so popular that it now accounts for at least 20% of the entire volume of the Internet. And it's attracted over 45 million users. For high schoolers and college students, using BitTorrent is as natural as wielding a cell phone.”

An articled in Wired discussed the origins and technology behind BitTorrent:

The problem with P2P file-sharing networks like Kazaa, he reasoned, is that uploading and downloading do not happen at equal speeds. Broadband providers allow their users to download at superfast rates, but let them upload only very slowly, creating a bottleneck: If two peers try to swap a compressed copy of Meet the Fokkers - say, 700 megs - the recipient will receive at a speedy 1.5 megs a second, but the sender will be uploading at maybe one-tenth of that rate. Thus, one-to-one swapping online is inherently inefficient. It's fine for MP3s but doesn't work for huge files.

Cohen realized that chopping up a file and handing out the pieces to several uploaders would really speed things up. He sketched out a protocol: To download that copy of Meet the Fokkers, a user's computer sniffs around for others online who have pieces of the movie. Then it downloads a chunk from several of them simultaneously. Many hands make light work, so the file arrives dozens of times faster than normal.

Paradoxically, BitTorrent's architecture means that the more popular the file is the faster it downloads - because more people are pitching in. Better yet, it's a virtuous cycle. Users download and share at the same time; as soon as someone receives even a single piece of Fokkers, his computer immediately begins offering it to others. The more files you're willing to share, the faster any individual torrent downloads to your computer. This prevents people from leeching, a classic P2P problem in which too many people download files and refuse to upload, creating a drain on the system.

Tomorrow: Business Models

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TECH TALK: Video on the Internet: Business Models

So, how do broadband video companies make money? This is what Mark Cuban has to say:

On the net, the value is in the network aggregator. On tv the value is in the show. The broadcasting network is not really a big deal.

Youtube.com has tons of value because thats where people go to find the new stuff. No one goes to NBC to find the new stuff. They channel surf their channels or check out the EPG to see if there is anyhing of interest.

On standard definition networks, people go purely for the live events, movies and shows ( Because of the limited number of channels, investment in a new tv and differention of presentation , research shows its far different for HD nets. Thats for another post).

Which is a very long way of saying, that 99pct of the sites that are creating broadband “TV on the Internet” channels are making a huge mistake.

How does YouTube, the poster child for Internet video, intend to make money? In an interview to Fortune, the founders discussed their future business model:

Hurley: We're going to sell sponsorships and direct advertisements. But we are building a community, and we don't want to bombard people with advertising.

Chen: If we wanted to, we could instantly turn this into $10 million in revenue per month by running pre-rolls [short video ads] on the videos. But at the same time, we're going to make sure that whatever revenue model we've built is going to be something that's accepted by the users.

Hurley: We're building relationships with studios, networks, and labels because they're looking for ways to reach new audiences, and we have a great platform and a great stage to make that happen.

David Beisel believes that “we’ll see an emergence of a wide variety of pricing schemes emerge (paid and non-paid) that match consumers desires to the content.”

I agree that the ad-supported video model is currently underrepresented and carries huge potential. However, in the medium- and long-term, I believe that we’ll see an array of sustainable digital video pricing models emerge. In the same vein as analog television today, we have ad-supported pricing (broadcast), ad-supported plus subscription (basic cable), subscription (premium cable), pay-per-use (pay-per-view and DVD). The same models break out for other media as well, like print (which has free pubs, periodicals, exclusive newsletters, books, respectively) and music (radio, music magazines, CDs, etc.). What’s interesting to note is that the digital video, unlike modern media radio of and analog television, started with pay-per-use, as opposed to an ad-supported model.

As the field matures, we’ll see a mix of pricing which will discriminate among customers’ tastes for immediacy, location, viewing screen size, and whole number of factors. Ad-supported will likely emerge as the predominant driver of revenue, but the mix among the pricing models will change over time as technology and tastes change evolve.

Tomorrow: PCCW

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TECH TALK: Video on the Internet: PCCW

Om Malik wrote last July about the early lead that Asia has had in IPTV. “South East Asia region is the current leader in IPTV adoption, with seven out of 13 countries already having rolled out some sort of service including PCCW’s NOW, which is the largest IPTV deployment in the world, and accounts for one third of the total global IPTV subscribers. According to Gartner, the number of IPTV subscribers in these countries will double by end of 2005. One of the reasons why IPTV has been quick to take-off in Asia is because of the vailability of new broadband networks that can support higher speed flavors of DSL. The population densities in most Asian cities, and the short distance to central offices is the main reason why you have seen higher deployment of DSL/Broadband in that part of the world. Second reason – there are no legacy cable networks, and people want to see TV. “

An early success has been PCCW’s NOW Service. PCCW is the largest telco in Hong Kong. The Economist wrote in March:

[PCCW] launched a television service over broadband phone lines, called Now Broadband TV, that has been a huge commercial success. It could soon dethrone the local cable-TV firm as the dominant provider of pay-TV services. It is also the largest television-over-broadband deployment in the world. As they worry about the encroachment of new competitors on to their turf and search for new sources of revenue, telecoms operators the world over hope to follow Now’s example.

The combination of security and feedback convinced content providers to agree to an “à la carte” model, in which Now subscribers can choose whether or not to subscribe to each individual channel, rather than being forced to pay for a whole bundle. This was much more flexible than the rival offering from the incumbent cable-TV firm. Now started with ten free channels, and allowed subscribers to choose which additional channels, if any, to pay for on top. Viewers can even sign up for new channels on-screen.

Now also took the unusual step of developing its own set-top box, based on a stripped-down DVD player and produced very cheaply in China. This enabled it to begin its service without waiting for industry standards to emerge. It offered the box free of charge to broadband customers, 93% of whom now take the TV service as well. As its subscriber base grew—it exceeds 500,000, or more than 40% of the market—Now was able to poach valuable content, such as sports rights and film channels, from rival pay-TV operators.

So, what does all this mean for India?

Tomorrow: The Indian Opportunity

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TECH TALK: Video on the Internet: The Indian Opportunity

Business World wrote recently about the various IPTV services being launched this year in India: “Reliance, Bharti, BSNL, MTNL and HFCL Infotel are spending a lot of money to find the answer to a tricky question. What will make you buy television signals from their existing phone lines instead of your traditional cable or DTH (direct-to-home) operator? To find the answer, pilot projects have been launched across the country to test various permutations and combinations of price, technology and content. Sometime this July, MTNL will become the first to launch Internet protocol television (IPTV) service (See ‘How IPTV Stacks Up Against The Others’). By the end of the year, other telecom operators will follow. And early in 2007, the Andhra Pradesh and Goa governments will launch broadband projects that include IPTV.”

The article also provides a wider context:

DTH has already stolen some of IPTV’s thunder. Think about the IPTV differentiators — the ability to offer TV on demand, telephony and Internet. DTH already offers TV on demand and consumers have taken to it. Since its launch in 2003, DTH has hit over 4 million homes going by the numbers that Zee’s Dish TV and DD Direct+ provide. Traditional cable operators like Siti Cable are offering boxes that will continue providing video through the cable wire and other services through an IP or broadband wire. Others like Hathway have had modest success with digital set-top boxes and are offering broadband Internet access.

Why, then, would you buy an IPTV service? IPTV operators answer: ‘triple play’… HFCL will offer a package deal at Rs 699 a month — an IPTV connection, 100 free calls and 500 MB of free data download at 512 kbps. MTNL, on the other hand, will offer two packages — a bundled service as well as a ‘pay as you use’ package.

There is a lot of friction between content owners (broadcasters, music companies or film firms) and telecom companies over the money the latter make from selling these to subscribers. Telcos have simply bulldozed content companies to retain 70 per cent of the revenues against the international norm of about 30 per cent.

Rajshri Media, a company I have invested in, is planning to offer video content over broadband networks in India and internationally. The same issue of Business World carried a preview of the plans: “Rajshri…is looking at the four screens that dominate our lives — the TV, cinema, the PC and the mobile phone — and ways to make money from them…Rajshri is focusing on content across these screens, plus that of the iPods…The company’s new digital media arm, Rajshri Media, has made some bold moves. It now has the Internet and telecom rights to 300 films (including 90 from its own library). Blockbusters like Amar Akbar Anthony, Kashmir Ki Kali or Anari are now available for downloads from the portals of 10 major telecom operators and two mobile aggregators (Indiatimes.com and mauj.com). Although Rajshri has the rights to the entire film, only clips lasting 30-40 seconds can be downloaded because of bandwith limitations. Rajshri also owns the rights to Mahabharata, Baba Ramdev’s yoga programmes, Osho’s discourses and Barbie movies. In the next three months, the group aims to have its own broadband portal with all these available online.”

Tomorrow: A Personal View

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TECH TALK: Video on the Internet: A Personal View

With Rajshri Media’s plans to launch a broadband portal focused on Indians globally, the wheel has come a full circle for me. More than 10 years ago, in March 1995, I launched a portal, IndiaWorld, to offer news and information to Indians worldwide. For the first few years, the primary audience was made up of Non-Resident Indians (NRIs). The same will probably be the case with Rajshri Media’s portal. One aspect of the story of the Internet’s first decade is this evolution from text to video.

I don’t watch a lot of television. Occasional glimpses of cricket on TV is what my viewing is limited to – along with soaking in some of the soap operas my wife, Bhavana, watches. It has been about 18 months since I watched a movie in a theatre – thanks to Abhishek’s birth last April. The coverage by the Indian news channels reminds me too much of that of the newspapers – shallow and tabloid-like. I have little or no interest in the stock market so that eliminates the business channels.

This is not to say that there are no programmes on TV I would not like to watch. The problem is two-fold: discovery and recording. India still does not have an electronic programming guide which lists out what’s on TV now. This makes the search and discovery problem hard. And even if I could find a programme, I probably would not be in front of a TV to watch it then. So, recording it becomes important. Setting a VCR still challenges one’s intellect!

It is in this context that I look ahead to the future. The digitisation of the video content chain will make me want to spend time and money. There are many Hindi movie classics that I’d like to watch. There are some terrific programmes on BBC like Horizon that I’d like to make sure I don’t miss. Whether these are ad-supported or I have to pay for them is a secondary issue. For me, it is about availability and access – when I have the time.

In 2002, I started my blog. That was a first effort at being a ‘content creator.’ Now, as Abhishek grows up, I can also imagine being a ‘producer’ of videos – and sharing them with friends and family. The text to video viewing evolution may have taken a decade. But the content creation evolution from text to video will have probably taken less than half the time. Tomorrow’s world is coming – and its rich with media, created by us, for us.

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