I recently attended an event in New York presented by videonuze (a highly recommended resource for all things internet video, by the way).  The  evening’s panel discussion tended to focus primarily on three issues:

• Monetization
• Content aggregation
• Whether overall video consumption will continue to grow to accomodate increased internet video usage, or will terrestrial television (cable and broadcast) start to lose market share

Listening to the panelists, I found myself increasingly struck by fact that they all appeared to be laboring under the assumption that as a technology, internet video is necessarily a function of the personal computer and the web browser (and perhaps someday the smartphone).   It wasn’t until moderator Will Richmond explicitly addressed the issue in his final question that what I consider to be the elephant in the room was even mentioned: internet video on the television.

That the subject sat so low on the panelists’ collective radar screen was interesting, only because there happens to be such a major CE push underway right now: a slew of network-enabled hardware was just announced at CES, Adobe’s got Flash running a chip, and several noteworthy cross-industry partnerships have been struck between some pretty heavy hitters – I’ve commented previously on a few of them:

• zillion tv
• yahoo connected tv
• tivo search

The question was put to the panelists: “Do you see internet video coming to the television in two years?”  Answers ranged from a clear “no” to a hedged “it’s a ways off” to an interesting prediction (from a cable executive) that users will likely be frustrated attempting to connect such devices themselves without the high level of customer care they’re used to receiving from their cable company.

The consensus?  That ‘killer app’ internet television solution you’ve been waiting for is probably closer to five years away than two.  While I’m of the opinion that it will come sooner than that (and sooner than might be comfortable for many in the industry), the one thing everyone agrees on is that it is coming.  There are not ‘ifs’ in this conversation – only ‘whens’.  Here then is my take on how it will impact the three core issues listed above:

Monetization: Internet video on the television will mean the high-CPM targeted ads of the internet, and (due to the lean-back, social nature of the television viewing experience) an audience finally willing to tolerate a more traditional (i.e. heavier) ad load.  From the perspective of the advertising industry, this long-awaited combination represents the best of both worlds – and so in the long run, I’m optimistic that internet video on the television will more than solve the monetization issues many industry analysts and executives have struggled to address so far.

Content Aggregation: This is a very interesting topic.  The web (and the web browser) are arguably the killer apps of at least the last several decades (happy 20th birthday, btw), but a wide-open browser paradigm (with all the accompanying complexity, security, and instability issues) is not really an appropriate solution for a CE device such as a television or set-top box (nobody wants to have to worry about their television crashing).  In place of all that convenient web standardization, though, there will be some heavy lifting needed to create more appropriate dedicated solutions.  Unlike the web, the system architecture will be closed and centralized: in other words, the hardware will present the viewer with a user interface containing all necessary controls and content meta data, and upstream communication will be limited to a single service-providing host – even if the actual video data streams are then streamed from an assortment of asset-owning partners and their optimized CDNs.  The goal is an elegant and cohesive user experience that still solves the tricky problem of allowing content search, discovery, and delivery across multiple sources and multiple video formats (TiVo, for one, recognizes the challenge and is taking an interesting search-based approach to solving it).

The Size of the Pie: The prospect of a disruptively successful lean-back internet video experience eating into terrestrial broadcast and cable viewership (and the resulting impact on traditional advertising and cable/satellite subscription revenue models) is on a lot of people’s minds these days.  For example,  note how quickly (and how thoroughly) joint owners Fox and NBCU recently forced hulu to shut down access from the boxee application after it became clear the small startup had plans to release a set-top hardware device (and that people were already installing boxee on their Apple TVs).  To insulate the incumbents from such zero-sum viewership concerns, several recently-announced initiatives (Time Warner’s TV Everywhere and Zillion TV) have announced they plan to require customers maintain at least one concurrent cable or satellite television service contract.  Of course, there’s no technical reason for this policy – it’s just there to prevent viewers from canceling their cable subscription and going “over the top” with only their broadband internet connection.  Long term, such an arbitrary restriction will prove unsustainable in the marketplace, but in the short term it’s a smart move: in a nascent market such as internet-enabled CE, first-mover advantage is huge, and any insurgent internet television solution that makes the cable companies feel at least a little less threatened (even if only for the time being) is going to have an advantage gaining traction quickly.

All in all, aside from the realtively short shrift given to the CE industry’s recent discovery of the internet by the panelists, it was an excellent discussion – and once again, if you’re at all curious about the future of internet video, I highly recommend videonuze.

Who knew? Barack Obama, of all things, now as Microsoft Office Clip Art!

With almost half a billion copies of the software giant’s Office application suite installed around the globe, anyone featured here is likely seen more often than Kim Kardashian on Dancing With the Stars ever will.

Clearly, Microsoft’s clip art has the reach most media outlets crave – a real asset, especially in today’s increasingly disintermediated world.

Which brings up the question, who at Microsoft decides over who’s in (the library) and who stays out?

In lieu of an answer, I was curious enough to check what other contemporary or past celebrity made the cut according to Microsoft’s Clip Art staff.

Turns out, neither George W. Bush nor Bill Clinton are included.

Neither is Adolf Hitler. (Thought I’d check, just to be sure).

But Mahatma Gandhi is.

And so is Abraham Lincoln.

Which brings us right back to Barack Obama, who has recently received much (self-induced) comparison to the iconic 16th US President.

Is someone in Redmond having fun channeling the travails of current-day politics via cliché PC clip art?

Time are tough – maybe you’ve heard, it’s been in all the papers.  Oh wait, there aren’t any more papers – but we’re going to guess that one way or the other, you’ve had more than your share of macro-economic doom and gloom over the past few months anyway.  So we’re starting a new series of posts – think of them as occasional signs of (internet video-related) corporate hope amidst all the (over-leveraged under-regulated financial services) corporate rubble…

• The BBC, having seen a 152% increase in UK usage of their successful iPlayer streaming application over the past 12 months, has just increased their online budget for the next three years by almost 25%.
• The stock of mail-order DVD rental leader (and online pioneer) Netflix is up over 30% over the past 6 months.
• CBS has announced 2.8 million first-day unique users of its Silverlight-powered NCAA Men’s Tournament (March Madness) streams – at 56% increase over last year’s first day numbers.
• Pure Digital Technologies, the privately-funded startup responsible for the easy-to-use “Flip” personal internet video camcorder, is purchased by Cisco for $590 mil.

Hang in there – more good news to come…

Rant alert:   OK, so calls drop way too often (maybe 50% of the time) for me to use my iPhone in half the rooms in my my apartment – an apartment remotely located less than a mile from the sparsely-populated and little-known island of Manhattan….   Occasionally I can’t even use the phone on said island without having to cross the street to get bars… SMS messages occasionally arrive sometime the next day…

As hardware, the Apple iPhone itself is so well-executed that I tend to put up with the terrible AT&T voice network – to grudgingly accept it… but every now and then, I come across articles about other users experiencing similar problems (both voice and data), and I’m once again reminded of how disappointing the coverage is – at least in the New York City metro area.

And such is the case now – I’ve posted before about the poor performance of the AT&T voice/3G data network here in NY/NJ, but a recent article by Matt Richtel in the NY Times compels me to comment again.   A few user and analyst quotes from the article:

• “…the actual experience has been abysmal.”
• “I found myself walking around Manhattan frustrated”
• “AT&T is constantly falling below the threshold”

Strong words. For their part, AT&T has recently announced an $11 bil investment in shoring up their wireless network over the next year, and otherwise appears to be moving directly from the denial phase into the acceptance phase: while in January AT&T was pushing back (claiming one study merely took “anecdotal feedback from only 30 customers to fashion some sweeping generalizations about us in particular” and a similar Consumer Reports article was “based on anecdotal feedback from a self-selected group of subscribers”), this week spokesman Mark Siegel noticeably softened the AT&T stance: “I’m not minimizing the frustration somebody may feel, but I think the improvements in wireless in this country have been extraordinary.”

Maybe.  But there’s one heck of a long way to go.  And that’s OK – on a technical level, these are difficult problems to solve, we understand that.  Meanwhile, though, memo to AT&T (and Apple for that matter): even assuming a best-case 3G coverage scenario, there’s really no excuse for the pure science fiction portrayed in advertisements such as the one above.  It comes down to basic truth in advertising (as someone who’s had a bit of experience in the industry on the music side, it amazes me how they ever got away with airing this, even for a short period of time).

Cisco expects the percentage of mobile data related to internet video to roughly double by 2013, driving overall mobile traffic growth of 100% per year for the foreseeable future.  I frankly don’t see numbers like that happening, at least not based on the performance of the one 3G network I have experience with (I’d be happy just to be able to make a phone call from the bedroom).

It’s time to talk about Zillion TV.  Announced a week or two ago and slated for a 2009 Q4 launch, this set-top box streaming initiative has already received quite a bit of coverage. Here’s our quick take:

What They Got Right

• Investors – One impressive thing about Zillion TV is the stature of the companies behind it:  Visa is a major investor (and will implement the back-end billing transactions for purchasing streams), and content providers Disney/ABC, Fox, NBC Universal, Sony Pictures and Warner Bros. Digital Distribution are all also investors/partners.  In fact, while I’ve read Zillion TV described as the “Hulu” of set-top boxes (due to the innovative cooperation between otherwise competing companies Fox and NBCU), Zillion TV goes Hulu one further, having Sony, Warner Brothers, and even long-time Hulu holdout and rival Disney/ABC on board as primary stakeholders as well.

• Revenue Model – Although television viewers and web browser users have consistently expressed a preference for “free” (ad-supported) content over paying subscription or per-view fees, Zillion TV itself will be agnostic as to which monetization model individual content owners choose, and will be able to support either.  One thing Zillion seems to understand, though, is the game-changing impact targeted advertising will have, given a lean-back audience willing to tolerate the heavier ad-loads typical of traditional TV.  I touched upon this a few weeks ago here – and as Zillion TV’s initial press release puts it: “Gone are the days of mass market, untargeted television commercials.  Through the ZillionTV Service, advertisers clearly will reach a more highly-targeted and engaged audience.  This is a major boon for the advertising industry.”

• User interface - We believe that in the absence of a keyboard on the coffee table (which studies show nobody really wants), the problem of the remote control and the user interface will have to be solved.  One way or another, the current remote paradigm (dozens of never-used dedicated buttons) is going to go away – to be replaced by either a touch-screen iPhone-like device or a Wii-like pointing remote (something I touched upon a few weeks ago here).  While Apple’s been quietly filing for patents on the laser-recognition pointing technology necessary for such remotes, Zillion TV will be the first internet video device to market that actually features one (which, come to think of it, is probably why the Zillion TV “box” has to hang over the top edge of the screen – see image).

• Zillion TV and the Service Provider – Easily the most noteworthy aspect of Zillion TV is that like Time Warner’s “TV Everywhere,” access will be limited to customers with current cable and/or ISP contracts from selected vendors already in place (more on TV Everywhere here).  Could this be an emerging trend – internet video services sharing monetization with carriers?  Possibly – in Zillion TV’s case, the device will be marketed as a hardware value-add available through (as yet unnamed) service provider partners.  The decision to Include the carrier in the revenue stream is huge, because instead of an insurgent over-the-top internet video service threatening to dramatically increase user bandwidth consumption while simultaneously making cable TV access less valuable, Zillion will instead be a business partner.  Of course, as the issue of monetizing internet video remains up for grabs, incumbent service providers remain (to put it mildly) “concerned” over what services running “over the top” could ultimately mean to the business models they’ve come to know and love – but from the service provider’s perspective, Zillion TV will likely be seen as the lessor of several evils, because at least some participation is better than none.  And the arrangement works for Zillion TV, too: the company plans to install caches of video content at your local ISP.  The technical innovation of expanding the content delivery network one step closer out to the user (from the edge of the internet onto the user’s local service provider) is potentially huge- and yet another step in one of our favorite topics, the privatization of the internet (something I touched upon a few weeks ago here).   Which brings us to…

What Could Be A Problem

• Net Neutrality - With Zillion TV content caches sitting out there in ISP data centers, look for this to come up when Zillion TV launches later this year – and look for the issue to be ongoing, because If I’m a Vudu, Roku, TiVo (or any other 4-letter box making company) – or if I’m a Yahoo Connected TV, Amazon VOD (or any other television/set-top streaming service), even if I lose a legal challenge to the Zillion TV business model, I’m going to be out there doing continuous comparative testing to see if there’s any hint of Zillion TV-partnered ISPs slowing down my packets – in other words, it’s going to be a good couple of years to be a media (or antitrust) lawyer.

Conclusions

In short, I’m impressed with Zillion TV – the big players are clearly onboard, I think including the service providers is a smart business move, and I like what little I know about the user interface.  A few things to watch:

• As the year progresses, which MSOs and ISPs will announce they’ll be partnering with Zillion TV?
• WIll the hyper-localized ISP/CDN model offer dramatically enhanced performance over competing solutions using CDNs external to the carrier?
• If so, will the net neutrality/anti-trust challenges be equally forceful?
• Will Zillion TV expand from television content into film as well?

We’ve been going on lately about how much sense netbooks make.  Evidently, some smart people out in Cupertino might think so too: within the last 2 days, the online rumor-mill about all things Apple has kicked into full gear again, this time started by reports that a Taiwanese firm has just signed an agreement to begin supplying large touchscreens to Apple later this year.

What we’re talking about here is essentially a large (9″ or 10″ screen) iPod Touch – physically, it could well end up looking very much like this mock-up concept imagined by gizmodo (at left) – but under the hood (or ‘glass’, rather), I wonder if it will run a stripped-down version of the Apple OS or follow the closed iPhone/iPod Touch “App Store” model – in other words, will it allow traditional fully-installed applications, or will it allow only the more limited (but easier and safer) widget-like software products (running one layer up on a virtual machine) available on the iPhone?

Either way, if unlike the iPhone and iTouch, this device will (finally) run Adobe Flash (the ubiquitous video streaming application behind Hulu and YouTube), then this will be a hee-uge hit..

I’ve written before on what an ill-suited viewing platform I feel the PC and web browser make for viewing internet video. Keeping that in mind, the big unknown about this sleek full-screen “net tablet” is whether it will run Flash. If so, it could make the whole web video experience a lot nicer – and a lot less tied to the workplace and/or deskop…

Having a blog is a lot of work – even if we hadn’t customized our template to the point we ended up knowing a little more about CSS and PHP than we ever cared to, there’s always a post to write, spam comments to delete, and readership to try and grow.

So when we get something right months before it happens, you’ll have to forgive us if we rub it in a bit.

Last September I speculated about the prospect of Howard Stern coming to an iPhone near you – not only due to Sirius’ troubles, but also due to the troubles of the auto industry, which the satellite radio business model was seriously (sorry about that) dependent on.

Well it took a little longer than I had thought, but this just in (from a Sirius conference call earlier today): Howard Stern is coming to an iPhone near you (this spring).

What’s strangely missing from all the press coverage, though, is whether Sirius will be available from iTunes as well from the iPhone.  That would be huge, because I don’t know about other iPhone owners, but the new NPR radio app drains my full battery in no time at all – in fact, the real world usefulness of every iPhone radio app I’ve tried so far is severely limited by the battery drain issue.

Still, it’s good when the future behaves itself and matches our predictions.

Mel, call me.

As you might have noticed, laptop computers are getting more popular.  Users, meanwhile, are demanding more processing power and longer battery life from these machines, while at the same time expecting them to be as compact as possible and run as quietly (i.e. with as little cooling fan noise) as possible: in short, a perfect recipe for heat issues.

Research continues on cooler-running CPUs and longer-life batteries, but these challenges really have more to do with electrical and chemical engineering than with computer science.   Meanwhile, given the intensely competitive low-margin market computer makers find themselves in, companies are are finding themselves bumping up against the laws of physics – and often pushing the envelope (hence the infamous pickup-truck-destroying laptop battery incident).

While a burnt-out truck makes for a good story, the more likely adverse effects of heat fatigue are less dramatic – but still worth avoiding.  Usually, over time excessive heat leads to early hardware failure.  Often this can be an easily replaceable power supply, but just as often, repeated temperature extremes can cause early system circuit board failure (in which case the laptop is usually totaled) or early hard drive failure (and let’s face it, local laptop data tends to get backed up less than desktop data).   And to an unusual extent, it’s up to the consumer to protect themselves – because why wouldn’t a manufacturer (who might be just looking to make the next quarter’s numbers) be tempted to sell you a machine with great specs even if that means it runs hot and is likely to break a year or two sooner than it should?   To the extent that just puts you back in the market for a new laptop that much sooner, it’s kind of a win-win, no?

Conspiracy theories aside, this is all by way of saying that heat is a big issue – and it’s up to the user to be aware of it.  I’m a part-time musician, and for a while, I was doing shows with various groups in New York and Boston using a laptop in a live performance situation.  After that first heat-related shutdown in the middle of a show, I resolved to never suffer that embarrassing nightmare again – so I went online and found an entire cottage industry in primitive-looking but effective laptop cooling racks.  The  concept was simple: elevate the machine for more air flow, and slap on one or more USB-powered fans to help move more of that air through the machine.  I bought one of the first-generation unit shown below, and since then have never had another thermal shutdown (curious house cat purchased separately).

As a firm believer in the long-term benefits of keeping machines (and especially laptops) cool, I was interested to see that Microsoft has just come out with an updated (and much better-looking) cooling rack of their own (at left).  While this device might be met with a few ho-hums from a technology press more accustomed to covering the next world-changing smart phone, kudos to Microsoft – because with the current generation of small, powerful, barely adequately cooled laptops out there (laptops that we all happen to be depending upon more and more, by the way), the time is right for this device.

And hey, it also solves an ergonomic issue by putting the keyboard an a better angle – so it’s good for you and your leeetle friend….

Time Warner CEO Jeff Bewkes in a recent BusinessWeek article:
“We believe in TV everywhere, that consumers should have access on broadband to the same channels they see on television. But the online model has to support, not undermine, the distribution fee and advertising arrangements between programmers and distributors. Those with a subscription to a video service would also get access to shows online.”

“We believe in TV everywhere…” – it happens that TV Everywhere is also the name of a new cross-network, cross-industry initiative Bewkes announced several days earlier in an Ad Age interview. In short, TV Everywhere is designed to enforce the vision of the future Bewkes describes in the BusnessWeek article: to make internet access to cable network content possible only if you can prove you also happen to have a multi-channel  (i.e. cable, satellite or fiber) television account.

To the technical purists among us, this might seem a bit like limiting the availability of the Model T to those who can prove they already own a horse, but it’s worth remembering that an awful lot of money flows from the consumer to the cable carrier and on to the cable network: in fact, it amounts to 50% of the networks’ income.  In other words, the cable networks need the carriers – and they won’t make a truly comprehensive move onto the internet without bringing them along for the ride.

Conversely, the availability of cable network content is the primary value proposition of the cable/satellite industry, especially now that terrestrial networks are broadcasting in HD over the air.  In other words, since good reception of a local affiliate’s broadcast is less dependent on that cable connection, the cable carriers need the networks, now more than ever – and so are doing the heavy lifting of putting the “TV Everywhere” initiative together.

It’s a very lucrative (and interestingly circular) business relationship – and one that both parties have an interest in protecting from the wild-wild-west of the internet.

So, which major players are  on board?  On the network side, we have Viacom and (Hulu co-owner) NBCU, while (Hulu’s other co-owner) News Corp. and (Apple-friendly) Disney are said to be in talks.  On the carrier side, DirecTV and Dish Network have yet to officially announce, but Bewkes clearly intends to include the satellite carriers.  Comcast, meanwhile, plans to stick with their “Fancast” service for now, but has made some friendly remarks about the two services possibly becoming compatible.  Of course, the prospect of an ISP such as Comcast (the largest MSO in the country) selling both their own proprietary internet video walled garden while simultaneously selling internet access raises issues of net neutrality – so in Time Warner’s case, it’s interesting that the conglomeorate that includes cable networks Turner Broadcasting and HBO) will be splitting off the Time Warner Cable subsidiary on March 12th – just one week after announcing the TV Everywhere initiative.

So what exactly is “TV Everywhere” going to look like?  Evidently an identity-based access system running over the top  at “no extra cost”  to the user.  I imagine the pledge to make the service free is based on the fact that recent election-related spikes in internet streams of The Daily Show and SNL clips did not appear to cannibalize broadcast ratings and that all-important symbiotic relationship between the carrier and the cable network.   There’s something most coverage of TV Everywhere misses, though:

The most interesting thing about TV Everywhere is that it’s still only about the PC/web browser/mobile device – conspicuously absent is any mention of network-enabled televisions and set-top boxes.

The next generation of internet-enabled television hardware is the elephant in the room – and the content owners know it: how else to explain NBCU and Fox suddenly forcing Hulu to back out of Boxee once it became clear the service was ultimately aimed not at the (lean-forward) PC but at the (lean-back) TV?  (I would’ve thought the prominent placement of the letters ‘b-o-x’ in the company’s name would’ve been a red flag, but that’s just me.)

The whole TV Everywhere model is intended to preserve the current carrier/cable network revenue stream.  To that extent, it’s intended to prevent (or at least slow down the progress of) access to internet video from the television. That’s going to be difficult, though, because while users really don’t care whether their programs arrive at the TV via a cable stream or via IP packets, what they ultimately will demand is the same freedom from program schedule tyranny they enjoy over on a website – in other words, it’s not about “TV Everywhere” – it’s about “TV Anytime.”

CeBIT, held each year in Hannover (Germany), is the biggest technology show in the world.  What makes it larger than CES is that rather than limit itself to consumer electronics, it includes both home and office technology – in other words, all things digital.  I’m not at the show, but having read a few of the articles starting to show up online (the show’s currently running until March 8th), one company stands out as having at least a few good ideas:  Asus.

I’ve already written about how the time is right for netbooks – Asus has a 60% share of the European market and a 30% share of the worldwide market – so they’ve been doing something right.  In addition, the company has some serious plans for bring the Google Android operation system to the netbook.  It’s worth noting that while Android has had the iPhone headwind to fight in the smartphone market, no such incumbant hands-down winner exists in the netbook operating system market.  In fact, with netbooks gaining traction, Android evolving, and a lightweight netbook version of Windows 7 on the horizon, the netbook OS market could prove to be a major front in the epic battle between you-know-who and you-know-who.

But I digress.  Let’s talk some gizmo. At left is an Asus “concept netbook.”   It starts with the tablet computer concept from a few years back and takes it a step or two further – a completely touch screen-based interface, and a second monitor.  Although not yet commercially available, a few thoughts do come to mind:

• The clamshell design nicely solves the problem of maximizing screen real estate while at the same time protecting the portable device’s touch screens.
• To the extent a touch screen Netbook interface becomes popular, XP Home becomes obsolete as a netbook OS, forcing Microsoft’s hand in getting a Windows 7 Netbook OS out there quickly.
• Is this the perfect Kindle platform, or what??



Speaking of touchscreens – here’s an interesting device, looking very much like the result of crossing a computer keyboard with an iPhone.  While adding a touchscreen to a keyboard is a cool enough idea in and of itself (and as the most cost-effective way to enjoy the next generation of touch-enabled operating systems, probably something we’ll see a lot of), there’s more here than meets the eye: this is actually a netbook running XP Home! With an 802.11g wireless interface and a wireless HDMI interface (that’s a new one on me), you’ve yourself got a cable-free internet streaming solution, as well as a computer for the coffee table and the couch.  It’s my feeling users would be more interested in the former than the latter, but either way, a pretty cool device – and another idea that’s hard to imagining not becoming popular.