Esther Dysons 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.
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
TECH TALK Video on the Internet+T