A few weeks I was struck by the unusual sight of a YouTube video embedded on a Yahoo! sports page.  It appears that as video streams are increasingly syndicated across multiple outlets, we’re seeing more signs that video stream hosting and video stream aggregating are developing into two complementary but independent businesses.

YouTube is moving from a core competency in hosting user-generated content into the premium content marketplace via the rapidly growing number of YouTube Channel partnerships.  The business models and monetization processes are still a bit of a work in progress as YouTube explores how much system integration is appropriate and YouTube’s content-owning partners seek a comfort level with how much content to syndicate.  But what is clear is that as YouTube offers more licensed and copyrighted content on its Channel pages, and (as mentioned above) syndicates its hosted streams to often competing destination sites (such as Yahoo), we are seeing the company’s hosting and aggregating business models branch off from each another.


Take ABC/Disney: if you go directly to youtube.com/abc, you’ll find the YouTube ABC Television Channel.  However, it’s still largely a placeholder page, with only limited content available from the Jimmy Kimmel show - and if you didn’t happen to already know the URL and had to search the YouTube site for an “ABC Channel”, you wouldn’t get there at all: instead, you’d get to a public broadcasting station from Australia that happens to be named ABC.  That’s right - the search returns no mention of ABC/Disney whatsoever - clearly, YouTube and ABC are taking it slow here…

There’s also the issue of physical asset control - speaking on a panel the other day, ABC’s Albert Cheng acknowledged that any ABC/Disney content streaming from YouTube is actually being hosted from the ABC/Disney servers.  In other words, rather than host the data and the stream it locally at YouTube, the content is merely pulled in from an external data center and wrapped in a Youtube ’skin’.  Since the ABC streams still use the YouTube Flash player, this is all transparent to the user, but nevertheless, in this case YouTube is merely serving as an aggregator.


Now let’s look at CBS: games from this year’s NCAA  Men’s Basketball Tournament are being streamed live on the YouTube CBS/March Madness channel.  As with ABC, these streams are hosted externally by the content owner (CBS) and are also available for streaming from the network’s own site.  This year, however, streams of live games are being delivered via the Microsoft Silverlight format rather than YouTube’s streaming format of choice, Adobe Flash - a coup for Silverlight, and a first for YouTube (users will have to download and install the Silverlight player if they haven’t already done so). As can be seen from the screenshot at right, to the user accustomed to the familiar look and feel of YouTube’s Flash player, this a much more CBS-branded experieince.

In general, syndication makes a lot of sense: content owners tend to be more comfortable holding on to and hosting their own assets, and if a given partner has their own streaming infrastructure already implemented, there’s little point in reinventing the wheel.   Furthermore, live streaming of events such as the NCAA games is especially demanding, and Silverlight has already proven itself as a very capable live platform during last summer’s Beijing Olympics.

All well and good - but for streaming video to make it to television hardware, these technologies will have to migrate to chipsets.  Adobe already has a standalone version of Flash optimized for use in embedded devices, and the next verison of Silverlight (Silverlight 3, just entering beta testing) will be able to run outside the browser (it’s not known yet if a similar lightweight version of Silverlight for embedded devices is also planned, but I would guess that’s a strong possibility).

Stay tuned…

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.

At Tekserve over on 23rd Street in Manhattan, while waiting for my own MacBook repair, hordes of seemingly “ancient” Apple machines seem to stare at me.

There’s at least fifty of them it seems, spread out side by side on a sizeable wall-to-wall file cabinet waiting for repair.

Think a couple of ailing Macintosh Plus and Macintosh II machines. (Is that possible? They date back to the mid-eighties), plus Quadra 610s, an LC 55, and plenty of the (relatively) newer eMacs and iMacs Flat Panels.

All in, picture the robot warehouse scene from “I, Robot”. These Macs lined up in front of me look similarly alive inside, just intelligent enough to keep still and quiet, probably wise from age.

I am actually still a fairly new member to the Apple “universe”, and not sure what took me so long.

We only recently traded in our Dell machines for a slick(er) MacBook and a MacBook Pro.

Add to that an iPod Touch, a Shuffle, plus an Apple TV STB. (The design alone, I couldn’t resist).

Of course, with iTunes on top, everything integrates exceptionally well, making the user experience as good as advertised.

So, as I am staring at this mass of last-gen and older Macs, clearly their respective owners seem to have held long-lasting emotional bonds to each one of them. 

Almost like a pet hospital, each one of these Macs seems to have a name, had experienced disappointment (an occasional OS crash), and physical injury (cracks from something smashing into the monitor).

In yet another attempt further personalize the Apple experience, there is all these stickers on the side of these Macs. From what I can see, one is promoting world peace (I agree) , another a local pizza place (sure), and a rock band I never heard of in my life.

Clearly a CE marketer’s dream of permanent brand appeal.

Is that how I will soon cling on to my own Apple devices as we jointly age?

While my Tekserve customer service agent is working hard on my particular MacBook “emergency”, I am getting MBA marketing class flash backs; start thinking of J. Gutman’s “means-end-chain” model and how it says our personal purchasing decisions ultimately are driven by a particular emotional need, a visceral bond between yourself and product strong and lasting enough to have you actually expend money.

Clearly, Apple’s done it And they seem poised to carry their lead for time to come.