xOD Capsule - January 03, 2008

Wed, 01/02/2008 - 7:00pm
Michael Robuck, Senior Editor, CED
   January 03, 2008

Peer 2 Peer

Cable companies have an edge against online video providers
While customers are flocking to Internet video sites like post-Christmas shoppers to malls, the business case of such endeavors is still a work in progress.

Some of the obstacles that retail-based Internet video delivery device companies face include expensive set-top boxes (STBs) – which, in most cases, provide a limited amount of video content – as well as adding additional clutter to consumers' living rooms.

MovieBeam closed up shop last month after Disney sold MovieBeam to Movie Gallery for just fewer than $10 million in March. Despite $100 million in funding, MovieBeam's problems were myriad. The company beamed movies over the air to a STB with an antenna, which meant it was limited to a market of 30 metropolitan areas in the U.S. The cost of a MovieBeam STB was $250, plus a $30 activation fee. Lastly, movies cost from $1.99 to $3.99, with an additional charge of $1 for HD content.

Apple TV
Apple TV

Akimbo also threw in the towel last year when it quit selling its $99 Internet video player. Instead, Akimbo is focusing on selling its VOD service through PCs and multi-use STBs, such as the ones used by AT&T's Homezone service.

Even Apple has struggled in this space. Amid much hoopla by Apple CEO Steve Jobs, the company rolled out its Apple TV box early last year at a cost of $299 per box. Apple's box is designed to take video content from the Internet and play it out on a large-screen TV, but the results have been underwhelming to date. According to a November study by Forrester Research, Apple TV had sold 400,000 of its boxes, which was way below Forrester's original estimate of one million in May

Vudu's movie box, which also ports Internet movies or other video content to TVs, sells for $399, although the company had a holiday promotion in December that threw in the box for free when customers bought certain models of Sharp HDTVs.

ABI Research said last month that retail-based Internet video delivery devices have had difficulty resonating with consumers, but it still predicted shipments of 1.2 million of the devices this year.

Aside from the cost of the devices, ABI said consumers are frustrated with installing the STBs themselves, and by the limited content.

Vudu's STB
Vudu's STB

For companies such as Hulu and Vudu to be successful, they need to offer a service that cable and telco video operators aren't currently providing. When it comes to the cable industry, Comcast has been the leader in this space with the beta launch of Fancast. The Fancast site has content from CBS, Fox and NBC, and Comcast has also hedged its bet with the launch of the Ziddio Web portal. Ziddio's content is based on user-generated videos, similar to YouTube, and it also has contests where the winning amateur videos are played on Comcast's VOD service.

Cable and telco providers are also working on sending video content to DVRs located in different rooms of a household, which is a function that pure Internet video device providers haven't been able to tackle.

Lastly, while user-generated video has been the driving force behind the early adoption of Internet video, a recent survey by ChoiceStream found that professionally produced TV programming beat user-generated videos in popularity by 67 percent for online and mobile viewers. In the end, content will still be king, and the successful companies in this space will offer viewers a mix of user-generated video and professional videos.

  — Michael Robuck, Senior Editor, CED

Download lowdown

RGB presents privacy mode encryption for VOD apps
RGB Networks is offering privacy mode encryption licensing and technology for VOD applications, enabling cable operators to encrypt their VOD programs so that the content can only be viewed by authorized subscribers.

RGB's Dynamic Bandwidth Manager (DBM)
RGB's Dynamic Bandwidth Manager (DBM)

RGB will enable the simultaneous bulk encryption of hundreds of VOD programs on two of its products – the Universal Scalable Modulator (USM) and the Dynamic Bandwidth Manager (DBM) – and RGB will apply privacy mode encryption to the VOD programs as they are processed.

"Privacy mode encryption and the industry-leading processing density of the USM and DBM are ideal combinations, giving cable operators what is needed to dramatically expand their deployments of VOD services while continuing to add more HD VOD offerings," said Jef Graham, CEO of RGB Networks.

Archos connects with Dish Network for video transfers
Dish Network customers will now be able to transfer their favorite movies and TV shows to their Archos portable media players (PMP) with a new plug-in download.

The plug-in is offered exclusively to Dish subscribers with a VIP722 or VIP622 HD receiver, and it is compatible with the Archos 705 Wi-Fi and 605 Wi-Fi players.

"The Dish Network plug-in will allow consumers to transfer content faster than real-time from their Dish Network receiver to an Archos PMP," said Henri Crohas, founder and CEO of Archos. "A two-hour movie can be transferred in just a few minutes."

MovieBeam shutters on-demand video service
MovieBeam's on-demand video serviceMovieBeam, which was originally backed by the Walt Disney Co., has powered down its on-demand video service as its parent company reorganizes after filing for bankruptcy.

Disney sold MovieBeam to Movie Gallery in March for less than $10 million, but MovieBeam went under despite $100 million in funding. Movie Gallery, the nation's second-largest video rental chain, filed for bankruptcy in October.

MovieBeam sent movies over-the-air to a STB with an antenna, which meant it was limited to a market of 30 metropolitan areas in the U.S. The company had just 1,800 subscribers when it ceased operations. The cost of the STB was $250, along with a $30 activation fee, and movies cost anywhere from $1.99 to $3.99, with an additional charge of $1 for HD content.

Wal-Mart shutters OMD service
Wal-Mart Stores Inc. has shuttered its online movie download service that it launched less than a year ago. In 2005, the company abandoned its efforts to build an online DVD rental service.


South Korea approves law allowing telcos to offer IPTV
South Korea's National Assembly has approved a law allowing telcos in the country to offer IPTV over their broadband networks. The IPTV service offers real-time TV programs and interactive services such as e-commerce over the Internet.

KT Corp. and Hanaro Telecom, the country's two largest broadband service operators by sales, are launching IPTV services. As of April, Hanaro had 540,000 hanaTV (VOD IPTV) subscribers. And as of March, KT had 30,000 MegapassTV (VOD IPTV) subscribers.

Liberty Cablevision deploys Everstream systems
Concurrent's Everstream operation said that Liberty Cablevision has deployed its Operational Intelligence solutions. Everstream's products provide operators with near real-time data that they can use for their systems. In 2005, Liberty Cablevision launched VOD in Puerto Rico using equipment from Concurrent.

Building B names startup vet Lundie to CFO
Building B, which offers a VOD entertainment platform, has named Martin Lundie as the company's CFO. Lundie has 20 years of experience with managing, guiding and operating startups. He has served as CFO at several companies, including Picolight Inc., PolyStor Corp., Vixel Corp. and Lightwave Microsystems Corp.

Push it

Nielsen, Invidi join to share data, measure personalized TV ads
The Nielsen Company and INVIDIInvidi Technologies Corp. have entered into a multi-year agreement to share data and discover ways to measure personalized TV ads that are targeted to specific viewers.

Nielsen will provide Invidi with demographic data, enabling Invidi to add the ability to track addressable advertising to its advanced software engine – Advatar.

"Nielsen is anxious to create metrics for measuring targeted advertising, and this agreement with Invidi is an important step forward," said Scott Brown, Nielsen's SVP of media product leadership for digital platforms. "The new digital landscape is changing the way advertising is placed. Working with the industry, we expect to discover more effective ways to measure and confirm advertising success, which is increasingly critical to the needs of both ad buyers and sellers."

Google-DoubleClickFTC releases proposed online ad principles
At the same time that it approved the Google-DoubleClick deal, the FTC released a set of proposed principals that it hopes the online advertising industry will adopt in a fit of self-regulation.

The proposed principals are included in a document that can be found online here.

AOL finishes up Quigo deal
AOL has completed its acquisition of Quigo, a site- and content-targeted ad company. The acquisition allows AOL to expand the use of contextual advertising – which matches ads to the contents of a Web page – across AOL's own Web pages, as well as its third-party networks.

Quigo is the fourth ad-related company that AOL has acquired this year. AOL also purchased Third Screen Media, Adtech and Tacoda.

Study: Consumers more engaged with online ads
A new study by Simmons, a unit of Experian Research Services, finds that U.S. consumers are 47 percent more engaged with online ads that accompany Internet TV programs than they are with ads appearing in standard TV. Consumers are also 25 percent more engaged with the content of Internet TV shows than they are with the shows they watch on TV.

A new survey from Deloitte & Touche shows that about 38 percent of U.S. consumers are watching TV shows online, according to The Hollywood Reporter.

Two-way talk

Cox gets rights for Passport, soon to be its standard IPG
With Cox preparing to expand its use of Gemstar-TV Guide's Passport interactive program guide (IPG) from its Motorola systems to its Scientific Atlanta systems next year, the MSO has negotiated a new multi-year deal with the IPG vendor.

The deal includes product agreements covering Gemstar-TV Guide's native and OCAP versions of Passport. The contract also covers various features and services of My TV Guide, including remote record. Cox also negotiated for an IPG patent license.

Part of the promise of OCAP (now "OpenCable," and soon to be "Tru2way") is the ability to support any software on any box. One of the most prominent examples envisioned by MSOs has been propagating a single IPG across their entire footprints to provide a consistent look-and-feel and brand identity, and a consistent interface for common features and applications.

Backchannelmedia demos 1st televised click-through
Backchannelmedia Inc.Backchannelmedia Inc., a Boston-based digital TV ad serving and response capture company, has successfully demonstrated what the company said is the first televised click-through – where a viewer can interact via a standard TV remote control with a TV ad.

With Backchannelmedia's patented technology, a viewer watching a live TV show or a recorded show from a DVR will be able to click-through and transfer content and information in advertisements directly to a personalized home page on the Internet (without interrupting the viewing experience). Products can then be ordered online, and the content can also be downloaded, purchased, bookmarked and/or viewed on the Web with the click of a button on the TV remote.

The company also announced that it will begin trials of the technology, which has been under development for 10 years in anticipation of the 2009 digital conversion, with at least one major market affiliate during Q2.

AT&T's U-verse adds features in Wisconsin
AT&T's U-verse customers in Wisconsin now have access to new TV features: AT&T U-bar, which brings customizable weather, stock, sports and traffic information to the TV screen; TV, a new way to search for local businesses and other information on the TV; and AT&T Yahoo! Games, which are also available on the TV screen.

Heard on the 'Net

• Microsoft to serve ads on Viacom sites, reported by the Associated Press.

• AOL, Fox ex-executives join venture, reported by The Wall Street Journal.

Company: TellyTopia
Santa Clara, Calif.
CEO: Kshitij Kumar

Claim to fame: TellyTopia provides systems and applications for cable operators and IPTV providers. TellyTopia's solutions allow operators to leverage their investment in access technologies by enabling revolutionary new services for consumers.

Recent news of note: The recent startup emerged at this year's SCTE Cable-Tec Expo and has yet to release information about upcoming product announcements or partnerships.


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