xOD Capsule Newsletter - April 11, 2007

Tue, 04/10/2007 - 8:00pm
   APRIL 11, 2007

Come again
There were a lot of interactive TV companies trying to do business seven years ago, and not so many now. Which is why it's fascinating to learn a single unidentified vencap operation just pumped $40 million into 7-year-old interactive startup Ensequence.

For a little perspective, in 2006 venture capitalists invested $25.5 billion in 3,416 companies, according to the MoneyTree Report by PricewaterhouseCoopers and the National Venture Capital Association.

That averages to a little more than $7.4 million each. The bundle Esequence was just bequeathed is more than five times last year's average. Some might read that as indication that interactive TV has some upside potential.

Ensequence CEO Dalen Harrison said the company is going to use the money to expand its international presence and migrate its interactive technologies to the mobile market. The key, he explained, isn't just to make an interactive application for mobile devices. Ensequence plans to give content owners the tools to create and manage content that viewers can interact with regardless of the device they're watching it on.

Major League Baseball is using Ensequence technology to run its broadband-based MLB.TV service, and it's impressive. It gives viewers access to every single game this season. A brand-new capability lets viewers watch 6 games at a time. The applications also lets them access individual players' stats (which is Rotisserie League heaven), plus gives viewers access to every single game in the last three years.

Harrison says other sports leagues are looking at doing likewise, but explained that with some other leagues, it's not clear who owns broadband rights. MLB did something smart - the league negotiated ownership of the broadband rights to all games, which makes it easy for MLB to do MLB.TV.

(This from the idiots who schedule league championship and World Series games so late that some adults can't make it to the end-let alone kids, and then wonder why they're losing popularity. That's my observation, not Harrison's.).

The application - any Ensequence application - can be on the PC, it can be resident in the STB. Ensequence technology runs across almost any platform, explained Aslam Khader, Ensequence VP of marketing and strategy.

"The triple play is no longer about everything on one bill," Khader said. "Now it's about the services." Before, if a subscriber switched triple play providers, the only thing that changed was the logo on top of his or her bill. If an operator were to start offering compelling - that is to say, interactive - applications, then when the sub thinks about switching, he or she has to think twice about whether they want to give up their favorite services too.

Comcast and Cox are working with Ensequence on interactive applications, as are Sprint and AT&T Wireless, Bell ExpressVu and the Dish Network, several IPTV providers, and many other providers around the world.

"In a few years, interactivity will be table stakes," Khader said. "MSOs will have to enable it for TV. If they don't, the applications will all migrate to mobile, or to satellite."

Big companies like Comcast and TimeWarner Cable cannot wait to migrate their entire subscriber base to OCAP - the middleware technology that will allow any application to run on any set-top. They need something that will run on legacy systems today, Khader explained, and that's why he expects Ensequence will soon start picking up business - a little bit at a time.

"It's still a little slow-moving for us - it's not a train coming down the tracks just yet, but it's moving," Khader said. He said operators are doing technology trials now, plan to start user trials by the end of this year, and should begin widescale commercial deployments of interactive applications in Q3 of 2008.

In the next 24 months, he said, there will be at least 60 million pay-TV subscribers with access to interactive applications - 30 million in satellite, and 30 million in cable. Any IPTV subscribers would just be added on top of those numbers.

Maybe interactive TV's time is finally coming. Somebody just bet $40 million on it.

 —Brian Santo, Senior Editor, CED


Dishing up Disney
EchoStar and Walt Disney Studios are hooking up following an agreement that will allow Dish Network to carry catalog movie titles from Disney on EchoStar's VOD platform, Dish On Demand, and through its Pay-Per-View services.

Through Disney's Buena Vista VOD distribution network, movies such as Pirates of the Caribbean: Dead Man's Chest and Invincible will be available via DISH Network.

"The addition of feature films from The Walt Disney Studios now allows us to offer customers movies from seven out of nine major studios," said Susan Arnold, vice president of programming for EchoStar, in a prepared statement.

Some of those studios include Touchstone, Hollywood Pictures and Miramax Films.

Why the agreement? Competitive pressures in the VOD space, of course. But with the widening of distribution channels for movie content, including mobile and Internet, content indeed remains king.

Akimbo stretches on demand services to include Vista
Akimbo Systems is beta-releasing its Internet VOD service for Windows XP and Vista-based PCs. The move will allow consumers access to thousands of videos for viewing on their PCs, Akimbo said.

The Horror Channel, indie channels and sports videos, including full-length Stanley Cup Playoffs, classic games and weekly highlights from the NHL, will be featured.

"Although Akimbo is widely available on TV through the RCA Akimbo Player set-top box and through the AT&T Homezone entertainment service, it's very significant that consumers now have the option to enjoy their favorite videos in full TV-quality on any Windows PC," said Thomas Frank, Akimbo's CEO, in a written statement.

And why the release to Vista? Another example of the expanding distribution chain and companies like Akimbo locking up channel distribution outlets.

Will 2007 be THE year for on demand?
Digital addressable advertising, predicted to be a key component in the growth curve for the cable industry, should have a breakout year in 2007, and in the years to come will be a key, long-term growth driver for hardware, software and service vendors, said research group, In-Stat.

The worldwide annual value of Digital Addressable Advertising equipment, software, systems, and services is likely to exceed $540 million during 2011, In-Stat reported.

"There are over 8,000 headends in the US cable TV market, and probably that many more throughout the world. Many of these headends are older, analog systems that are not likely to provide digital addressable advertising capabilities. In-Stat believes that well over 4,000 cable headends throughout the world will have two-way, digital capabilities by the end of 2011," said Gerry Kaufhold, In-Stat analyst.

Other key digital addressable advertising findings include:

  • Digital addressable ads will help to expand the market for cable TV advertising services.
  • VOD and HDTV will provide long-term growth for cable TV addressable advertising products.

With switched Digital Video (SDV), cable operators will find an expanding market for digital addressable advertising that supports "narrowcast" TV program streams.

BigBand's Cuda to Big China
BigBand Networks, a provider of broadband multimedia infrastructure for video, voice and data, reports that its Cuda CMTS is now being used by Xiamen CATV for its news, sports and local video content production for on demand subscribers, the company said.

Xiamen serves more than 400,000 subs in southeastern China's Fujian province. "Xiamen is really pushing the envelope with new services such as IP video. It's an exciting time for the cable industry in China," said Johnny Cheung, BigBand's senior director of the Asia-Pacific region.

Exciting indeed, particularly with Xiamen aggressively trying to expand it service portfolio with VOD services and its strategy of becoming a multi-service provider.

Imagine a SeaChange partner
Imagine Communications, which develops digital video platforms, is now a member of SeaChange's Certified Partner Program.

"Imagine has developed a very innovative solution for the industry, which will help operators expand their VOD offerings in a much more bandwidth-efficient manner. This is especially important as HD-VOD demand continues to ramp up. Our initial interoperability testing is showing they're right on track," said Tom Rosenstein, vice president of business development for SeaChange in a written statement.

SeaChange's partner program ensures that the VOD and IPTV industry's top technology and service providers can interoperate with SeaChange's VOD solution.

EchoStar, Google aim to revolutionize TV advertising
EchoStar Communications Corp. and Google Inc. are collaborating on a new approach to TV advertising that upends the traditional model.

The two plan to introduce an automated system for buying, selling, delivering and measuring television ads on EchoStar's Dish Network's 125 national satellite programming channels. The financial components of the deal were not revealed.

Google will have access to a portion of Dish Network's advertising inventory that spans across all channels and time slots. EchoStar and Google are working together to provide automated online campaign planning, scheduling, delivery and measurement of ads on the Dish Network. In practice, it appears the two will auction ad slots.

In Demand or On Demand,
marketers better pay attention to 40 plus boomers

Nearly 108 million people are over the age of 45 in the US. And their buying power is enormous. So if you want to interest them in VOD, or any type of on demand services, you'd better pay close attention to them. At least that's the recommendation from ThirdAge Inc. and JWT BOOM's first online survey.

That group of 45 plussers represents 70 percent of the US net worth, controlling $9 trillion. And, in the next 15 years, the 50-64 age population will grow by 50 percent and the 65-plus population will grow 32 percent, while the traditionally coveted 18-40 Gen-X and Gen-Y populations will grow only three percent combined.

The clear message? "Many marketers are doing an ineffective job of building a trusted relationship with people over 40," said Sharon Whiteley, CEO of ThirdAge. "The conventional wisdom that Boomers and mid-lifers are set in their purchasing habits and resistant to marketing messages is a very costly myth."

And the other clear message? Better trust the over 40 boomer crowd when it comes to marketing services such as VOD and on demand.

LodgeNet completes acquisition of On Command
LodgeNet Entertainment Corp. has completed its acquisition of Ascent Entertainment Group Inc., the owner of all capital stock of On Command Corp., for a purchase price of $380 million.

The new combo creates a network delivering interactive solutions to more than 1.8 million hotel rooms in the U.S., Canada and Mexico.

"Over the past several years we have grown from a company that primarily focused on video on-demand to a company that delivers a wide variety of interactive solutions that connect, inform and entertain customers of visitor and guest-based businesses," said Scott C. Petersen, president and CEO of LodgeNet, in a statement.

LodgeNet purchased Ascent from Liberty Media Corp. and its Liberty Satellite & Technology Inc. subsidiary (the "Transaction"). The purchase price was paid with $332 million in cash and by the issuance of 2.05 million shares of LodgeNet common stock, which were valued at $23.35 per share by the parties at the time of the stock purchase agreement in December, making Liberty a 9.2 percent shareholder in LodgeNet, the company said.

TWC, Disney enter content agreements
Time Warner Cable (TWC) and The Walt Disney Co. ( have entered into multi-year distribution agreements, including retransmission consent.

The companies have also agreed to make various TWC "Start Over" programming available. Start Over gives some TWC digital cable subs the ability to restart certain live programs that are in progress.

TWC will also launch ESPN2 HD and ESPNU later this year, and certain systems will offer Disney Channel on-demand, subscription VOD and ESPN Deportes.

Disney will provide content from certain networks to TWC's Quick Clips platform. The Quick Clips service provides additional video for a specific program or real-time updates for a program in progress.

The retransmission consent pertains to the ABC-owned broadcast TV stations carried by TWC systems, and it will provide carriage of some Disney networks and services, including ABC Family, Disney Channel, ESPN, ESPN HD, ESPN2, ESPN Classic, ESPNEWS, ESPN Pay-Per-View, SOAPnet and Toon Disney, Disney said.

When they become available next year, three new HD services from Disney and ESPN Media Networks-ABC Family HD, Disney Channel HD and ESPNEWS HD-will launch in TWC systems.

Additional terms of the agreements were not disclosed.

Camiant launches new UERM for bandwidth efficiency
Policy control specialist Camiant announced its new Universal Edge Resource Manager (UERM), designed to enable cable operators to maximize bandwidth efficiency across services, including VOD and switched digital video.

Traditionally, cable networks have been architected with dedicated QAMs tied to a particular channel or service, such as VOD, VoIP or high-speed Internet. This architecture resulted in inefficient use of network resources as unused bandwidth remained idle during periods when it could have been utilized to deliver more popular services or programming.

Camiant's UERM enables QAM sharing, enabling bandwidth to be distributed as needed across an expanded host of services including switched digital video or Modular-CMTS.

The edge resource manager plays a significant role in switched digital video and VOD deployments, ensuring that bandwidth is made available in dynamic response to those programs being actively requested by subscribers.

SeaChange backs Montana cable operator's VOD rollout
Backed by solutions from SeaChange International Inc., St. Joseph Cablevision has launched on-demand services and expanded its multichannel advertising business to digital cable.

The service runs on SeaChange's VOD System, with Axiom Core on-demand infrastructure software, to the cable operator's subscribers in St. Joseph, Mont.

St. Joseph-a division of the MSO NPG Cable Inc. —will initially offer 2,000 hours of movies, subscription on-demand packages, and free local and network content.

St. Joseph has run its local advertising insertion business on SeaChange Spot Systems since 1998. Its total "insertable" channel lineup will grow from 24 analog channels to 50 digital and analog channels, making digital tier networks available to local advertisers, the company said.

SeaChange will demonstrate Axiom Core and its advertising solutions at The Cable Show in Las Vegas, May 7-9.

thePlatform launches broadband video presentation software
thePlatform —a broadband video ASP— is moving from the "back end" to the presentation front. The Comcast Corp. subsidiary has introduced a new software suite enabling content companies to create custom video players for delivering broadband and mobile video to consumers.

thePlatform is also offering companies the capability to generate their own branded desktop software that allows consumers to download and manage music, videos and other digital media files. mpsPresent permits broadband video channels to be designed and deployed for playback on PCs, mobile phones and set-top devices, the company said.

thePlatform currently manages and publishes online video for businesses including ABC News, A&E, Amp'd Mobile, CNBC, College Sports TV, Court TV, Comcast Corp., E!, Hearst, Microsoft, the Oxygen Network, Primedia, Scripps, Sony/BMG Music, Ruckus, Vongo, Telstra and Verizon Wireless.

Patents on VOD, set-tops, networking to be auctioned
An auction of patents to be held later this month will include a grab-bag of intellectual property that applies to any number of products and services employed by operators and vendors in the cable industry and communications business at large.

Included in the auction will be a lot of five patents that apply to VOD storage and distribution (Lot 20), a lot of another five patents pertaining to MPEG compression (Lot 17), a single patent on set-tops (Lot 19; Set-Top-Box Capable of Two-Way Communication with a Central Information Source), and a lot of eight patents on switches used to scale existing networks (Lot 36).

Ocean Tomo Auctions will sell 26 lots in all related to various aspects of telecommunications technology at an auction at April 19 at the Union League Club of Chicago.

The full catalog can be viewed online at Ocean Tomo's Web site.

Video Web site acts like TV channel
Vibe Solutions Group is now offering a video channel aggregation service that allows consumers to watch, personalize and share a broad range of online video channels.

The free Web-based service, called Pyro.TV, allows users to specify the types of video content they'd like to see. The company then transmits a steady stream of content that matches the user's specifications.

Pyro.TV hopes to prosper by avoiding content ownership arguments. It says it has mechanisms in place for sharing revenue with content owners, as well as providing them with visibility and control over their media assets through an administrative interface.

The company said its Pyro.TV Engine accommodates a range of video content, including RSS video feeds, user-submitted channels and content directly provisioned from networks.

ExtendMedia extends funding, adds to board
ExtendMedia has received $12 million in a Series B venture capital funding round led by TVM Capital.

The funds will be used to accelerate sales, marketing and product development efforts for both direct-to-consumer and ad-supported digital content business, the company said. ExtendMedia's platform enables content rights holders and distributors to create, manage, secure and monetize content services via broadband, TV and mobile devices.

The company's OpenCASE solutions aid in powering media commerce for Hewlett-Packard, SHOWTIME, ClickStar, Cablevision, Bell Canada and Manitoba Telecom.

The round tails an $11 million Series A round, bringing the total funding to $23 million. ExtendMedia investors Atlas Venture and Venrock Associates also participated in the new round.

Boston-based ExtendMedia has also appointed Edward Braginsky, TVM Capital's general partner, to its Board of Directors.

IMAKE moves on to Vietnam
IMAKE is opening a new office in Ho Chi Minh City, Vietnam, a move that will allow the IPTV and on demand provider to offer VOD and IPTV services to consumers in Southeast Asia.

The announcement signals IMAKE's intention of taking its on demand services to a global audience, said the company's Chairman, Mark Schaszberger. "This is just the first stage of IMAKE's global expansion into regions that include Asia, India and Europe," he said.
(See xOD Spotlight)

Kulabyte, a provider of audio and video processing technologies, has obtained a licensing agreement for On2 Technologies' VP6 compression schemes for its Kulabyte Professional Encoding Suite. On2 VP6 compression schemes, for live and on-demand encoding, are used by Adobe Flash Player 8 and 9. The suite, with On2 VP6, will debut at the NAB convention in Las Vegas on April 16. The company expects the product to be available Q2 2007.

• A Kaufman Bros. analyst said OpenTV Corp.'s technology will be key to a partnership between Google Inc. and EchoStar Communications Corp. (, according to the Associated Press.

 —Traci Patterson and Craig Kuhl contributed to this issue of xOD Capsule

Current Issue

April 2007
Issue Contents

Company: IMAKE Software and Solutions, Inc.
Headquarters: Bethesda, Md.
Founded: 1993
Mark Schaszberger

Claim To Fame: Provides Open, Intelligent Solutions And Integration Services That Enable The Seamless End-To-End Delivery Of Broadband Digital Media, Vod And Iptv Content.

News Of Note: Recently unveiled its OpenVision 4.2 newest generation of Products for VOD and IPTV with the release of its targeted Advertising solution, Ad Exchange.

April 14-19, 2007
Las Vegas, Nev.
More info: Click Here 

China Broadband
Triple Play/IPTV Forum 2007

April 18-19, 2007
Hong Kong
More info: Click Here 

China DSL Forum 2007
April 18-19, 2007
Hong Kong
More info: Click Here 

The Cable Show 2007
May 7-9, 2007
Mandalay Bay - Las Vegas
More info: Click Here 

May 22-24, 2007
More info: Click Here 

China VoIP
Conference & Expo 2007

May 23-24, 2007
Hong Kong
More info: Click Here 

SCTE Cable-Tec Expo 2007
June 19-22, 2007
Orlando, Fla.
More info: Click Here 

C-COR Global IP Summit
June 28-29, 2007
Cannes, France
More info: Click Here 

Wireless & Mobile
Expo & Conference

July 17-18, 2007
Toronto, Canada
More info: Click Here

CTAM Summit 2007
July 23-25, 2007
Washington Convention Center
Washington, D.C.
More info: Click Here

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