xOD Capsule - October 25, 2005
www.cedmagazine.com | CED Broadband Direct | Current Issue | Subscriptions Oct. 25, 2005 Short-order televisionA Web surfing scene from the not-so-distant future… Browser: "Welcome to Podcast King. May I take your order?" Me: "Yeah, I'll take the latest episode of 'Survivor,' and a side order of 'The Soup Nazi' episode of 'Seinfeld.'" Browser: "Thank you for your order. That will be $4.50. Please hold on while we download your selection." That scenario doesn't sound that far-fetched anymore, does it? Thanks to the introduction of Apple's new video iPod, portability is suddenly being touted as "the next big thing." Even Time has jumped on the bandwagon with both feet. The 10/24 issue has a photo of Steve Jobs holding his latest creation and standing behind an iMac. The look on his face says, "I know what you want. Come and get it." There's no doubt that portable video will be big, but just how big, and how soon? Judging from the Time story, it's poised to take over the world. I'm taking a more pragmatic view at this point, and I don't expect what Apple is doing with new iPod (with the iTunes component) to change the face of television this year or next year, or even the year after that. It's a new twist on the a la carte argument, but it could get really expensive really fast if you were to watch everything this way. EchoStar is taking a different approach: for "free," customers can transfer DVR recordings to the PocketDISH. Consumers may be willing to pay for convenience and portability, but not for every single show they watch. It's like fast food. It's there for when you're away from home or on the run. It's unlikely that every meal will come from there. I take my portable DVD player with me on trips. But when I'm at home, I'd much rather watch "Lost" on my big screen TV. But it does speak to the adage that people watch shows, not networks. And this is what has some broadcasters a bit scared. Some ABC affiliates are complaining about the new iPod, arguing that they should get a piece of the revenue when consumers download an episode of "Desperate Housewives." Of course, this shouldn't come a big surprise to anyone, since it marks an attack on a core element of their business. But that's just the beginning. Other programmers are embracing the idea. CBS just announced a big podcast effort. National Geographic has launched a new unit that will focus squarely on the distribution of short-form videos over the Internet. But just how much business is out there? By 2009, quite a bit, according to research firm In-Stat, which shares the same parent company as CED. It predicts that "non-adult" (read: "non-porn") video content delivered via the Internet (via subscription or pay-per-download) will have a global retail value of $2.6 billion in about four years. It called Apple's latest venture "a major turning point" for Internet-distributed video. I'm not yet willing to make that call, but it's grabbed the attention of some local broadcasters, and that speaks to the long-term disruptive potential that's ahead of us.—Jeff Baumgartner Time Warner, NBC hit 'Start Over' buttonNBC Universal Cable (NBCU) and NBC will allow Time Warner Cable to incorporate "Start Over" as part of a new distribution agreement with the MSO. As a new twist on video-on-demand, Start Over will enable viewers to backup to the start of a program that is already in progress. The MSO is expected to launch Start Over later this year. Under the deal, Time Warner Cable will be allowed to Start Over-enable "select" programming from NBC and NBCU cable properties such as USA Networks, CNBC, MSNBC, Bravo, and SCI FI. NBC is believed to be the first broadcaster to sign up for the MSO's Start Over service. Some shows that run on NBC's networks are not owned by the company, and, therefore, won't apply to Start Over at the get-go. NBC series that do qualify include "Las Vegas" and "The Office." Hits such as USA Networks' "Monk" and SCI FI's "Battlestar Galactica" will also be available for Start Over. Of special interest to programmers is that viewers who engage Start Over are not permitted to fast-forward through the commercials. "We expect Start Over will help deliver more engaged viewers to our advertisers," said NBCU President David Zaslav, in a release. The agreement also gives the operator the on-demand rights to NBC News shows (including "Nightly News" and "Meet the Press") and, for the first time, "Hardball with Chris Mathews" and "The Abrahms Report"; and CNBC's "Mad Money" and "Closing Bell with Maria Bartiromo." NBC noted it would cooperate with Time Warner on some "interactive opportunities," and participate in some upcoming iTV technology trials. AgileTV gives Sunflower a voice in digital navigationMemorizing the numbers of their favorite channels will become a thing of the past for some of Sunflower Broadband's digital customers. Soon, many of them will be able to simply navigate the wide, wide world of digital programming with simple voice commands that are uttered into a special remote. The Kansas-based cable operator has teamed up with AgileTV Corp. to try out the company's voice-activated navigation system. Under a "predeployment agreement" announced Monday, Sunflower will begin to place AgileTV's technology in customer homes, and support it with a marketing campaign. Sunflower General Manager Patrick Knorr admits that he has been following the progress of AgileTV's voice-enable navigation platform, and has been "fairly excited about the thought of it." Sunflower is not just thinking, but doing, something about it. With AgileTV's "Promptu" platform, Sunflower hopes to remove the historical limitations of the electronic program guide as linear video products grow more difficult to navigate, and as operators introduce larger video-on-demand libraries and digital video recorders with broader storage. In the home, AgileTV's Promptu platform uses an IR remote with a built-in push-to-talk button and a set-top "sidecar." The headend, however, is where all of the heavy lifting is done. There, an off-the-shelf Dell server deciphers and cross-sections commands received from the consumer with a massive database that contains more than 100,000 phrases. "I think this is an elegant solution that problem, and opens the door to more advanced services," including those offered via a whole-home network platform, Knorr said. Presently, AgileTV can voice-enable an operator's broadcast lineup, but support for VOD and DVR is on the roadmap. "We're service-centric," said AgileTV Co-Founder and Senior Vice President David Hanson said. "As new aspects come in, we can load new software into the set-tops to voice-enable additional products." Initially, Sunflower will test AgileTV's technology on Motorola set-top models such as the DCT2500 and all-digital DCT-700, and the Gemstar-TV Guide iGuide IPG. Sunflower also markets Digeo Inc. -Motorola "Moxi" media centers, but doesn't plan to offer AgileTV support on those right away. The operator also intends to test out some marketing concepts to find out how the technology resonates with consumers. The campaign is using the tagline: "Talk to your TV." Sunflower will also see how AgileTV will fit into the operator's business plan. Knorr, who views voice-enabled navigation as a "core premium service," said his company could charge about $2 per month for a special remote that houses a microphone and AgileTV's software. Although Sunflower is starting out with trials, the company fully expects to offer it across the board by next summer. "We're small…we can't afford to trail anything unless we have an intent to deploy it," Knorr explains. Sunflower serves more than 30,000 customers in Lawrence and northeast Kansas. Boiling down what the product does is one key challenge, Knorr said. The other will be meeting the demand as the capability is more widely deployed, he added. AgileTV's inherent two-way architecture will give Sunflower a competitive weapon to wield against DBS competition. OneVideo Technology uses a scheme whereby the platform relies on a set-top or television, rather than a two-way network, but has yet to announce any trials or deployments. Sunflower marks the latest, but most ambitious operator, to work with AgileTV. Comcast Cable, an AgileTV investor, has conducted technology trials in the Philadelphia area. Insight Communications and Cequel III have also given AgileTV a test drive. SeaChange adds memory optionSeaChange International has unveiled a blade that will enable operators to add memory to legacy disk-based video servers, a move that would essentially turn them into hybrid memory-disk servers. The forthcoming Memory Streaming Blade touches on a growing trend in video-on-demand, in which memory storage is used for heavily-trafficked popular titles, and disk-based storage is used for less popular, library fare. SeaChange said the Memory Blade can hook into "many" of its MediaCluster video server chassis already deployed. In March, SeaChange began shipping a hybrid MediaCluster that houses both disk- and memory-based technology. The new memory blade is for use in older servers that contain only disk-based storage. SeaChange said it will demonstrate the product at the 2006 SCTE Emerging Technology Conference in January. Customer shipments are expected to begin in early 2006, the company said. Providing a memory option now will help operators handle the forthcoming demands of on-demand fare, especially when a single piece is required to handle thousands of simultaneous views, explained Yvette, Kanouff, SeaChange's senior vice president of corporate strategy. Although that day has yet to dawn, it's never too early to prepare for it, apparently. "The reality of VOD is in the largest deployments with the largest amount of content, we're not streaming anywhere close to those rates," she said. She estimates that only five percent of the content in today's on-demand systems would qualify for memory-based storage. In SeaChange's view, the majority of VOD content will be stored and streamed from disk, but some memory-based storage will be required for a few top titles. That's a departure from Broadbus Technologies' strategy, which calls for servers to be outfitted with DRAM. Kanouff said many of SeaChange's customers are more interested in the economics the hybrid server approach, rather than installing memory servers from a separate vendor and setting those next to existing disk servers. Concurrent laments cable spending cycle in Q1Concurrent Computer Corp. had its share of good and not-so-good news in Q1. On the good side, the company narrowed its net loss to $2.2 million (3 cents per share), from $5 million (8 cents a year ago). But the loss was widened from $1.1 million (2 cents per share) in the previous period. On-demand-related revenues hit $7.3 million in Q1, down 37.3 percent from the previous quarter, and down 14.3 percent from last year. Concurrent blamed the decrease on a "low capital spending cycle" with some major cable customers as they prep plans for 2006. "We knew this would be a down quarter for us due to cutbacks in end of year spending by some cable MSOs and delays on some projects in our real-time business," said Concurrent President & CEO Gary Trimm, in a statement. The company did shed some light on where it hopes to obtain more VOD business down the road. Last week, Concurrent hooked up with Capella Telecommunications Inc. to help it expand its VOD footprint in Canada. There, Capella will handle sales, sales support and installation help for all of Concurrent's VOD gear, including its MediaHawk 4000 Series servers. Concurrent is not foreign to lands north of the border, however. Cogeco and Videotron presently use Concurrent VOD servers and software. Digeo becomes and OCAP 'insider'Digeo Inc. obtained a license for the OpenCable Application Platform (OCAP), but, perhaps more importantly, said it will supply some of its intellectual property to the CableLabs —specified middleware. Among that IP, Digeo plans to offer some of its multi-room DVR, user interface and 3-D graphics technology, said Digeo CTO Toby Farrand. Digeo's technology, he noted, will help cable develop advanced set-top applications and move beyond "good-enough" DVRs. In addition to becoming an OCAP implementer, the agreement enables Digeo to become an OCAP "insider," Farrand said. Earlier this year, Digeo signed the CableLabs CableCARD Host Interface Licensing Agreement (CHILA), which gave the company the ability to interface with two-way devices (TVs and set-tops) that support the removable CableCARD security module. GoldPocket weighed offers over the yearsThe way GoldPocket Interactive CEO Scott Newnam tells it, you'd think he had to carry a stick to fend off all those offers he's had for his company over the last six years. "We've had people knocking on our door…trying to buy the company," Newnam said. But finding the right buyer was a "personal issue," he added, noting that he believes he found a suitor that fit well with GoldPocket's product and culture. GoldPocket is a rarity in that it was one of a few fledgling interactive television firms to make it through the hype-filled times of the late 1990s, and come out of it as a leader in the field, once the sector began to catch fire again. In a move that cemented GoldPocket's future, a much larger company, Tandberg Television, put up $78.5 million to acquire the iTV company, which specializes in interactive advertising and enhanced television. Once the deal is closed, Newnam will continue to run the company from its Los Angeles headquarters. GoldPocket hopes the deal will expand its global presence. Currently, all of its customers are in North America. Tandberg, by comparison, is strong in regions such as Europe and Asia. For Tandberg, which bought VOD firm N2 Broadband in 2004, the addition of GoldPocket will expand its portfolio further, and better position it for the future, said Reggie Bradford, president of Tandberg's Americas unit. "We felt that interactivity was something that had reached a stage to reach scale in the marketplace. We think [GoldPocket] is a natural extension for us," Bradford said. GoldPocket's advertising acumen will also kick in as so-called "free" VOD formulates a better business model, he added. GoldPocket also has relationships with several major programmers, something that Tandberg was lacking. Netflix shelves download movie plansNetflix has suspended plans to move ahead with a movie download service that would piggyback on high-speed data connections. Reuters, citing Netflix CEO Reed Hastings, reported that the company has encountered problems obtaining deals with Hollywood studios. He added that the company will continue to develop the infrastructure to support such a service when "the content climate begins to thaw." We are making changes and additions (including international deployments) to ourWeb-based "living" deployment chart. If you have a new deployment to report for the VOD Scorecard and the Web-based deployment chart, please contact CED EditorJeff Baumgartner. October 2005 Issue Contents » Company: EGT Inc. Headquarters: Atlanta, GA URL: www.egtinc.com CEO: Greg Nicholson Claim to fame: Digital video encoding and The company kicked things off with a new family of closed- and open-loop MPEG-2 encoders. EGT has also introduced a new encoding platform based on H.264/MPEG-4. Earlier this year, the company launched an Emerging Applications division helmed by former Starz Encore Group exec Greg DePrez. Recent news of note:Last week, EGT forged an integration deal with Concurrent Computer Corp., marking EGT's second relationship with a big VOD vendor. The other, SeaChange International, is an EGT reseller. Company: Aptiv Digital Inc. Headquarters: Burbank, CA URL: www.pioneerdigital.com CEO: Tim Takahashi Company claim to fame:Formerly known as Pioneer Digital Technologies, Aptiv makes a wide range of set-top applications, including the Passport line of navigation and digital video recording software. Recent news of note:Aptiv recently revealed that it had broken away from Pioneer to operate as a closely-held software company. Interactive '05—istartDeveloper Conference Atlanta, Ga. Oct. 20-21Registration information:www.itaas.com/istart Telecom '05Las Vegas, Nev.October 22-26, 2005www.usta.org CED WebcastGearing up forPacketCable Multimedia Oct. 27, 2005 at 11 a.m. ET Cost: Free Registration information: www.cedmagazine.com CTAM Seminar "Program Promotion in an On Demand World"Oct. 27, 2005Marriott Marques Hotel Time Square, New York Citywww.ctam.com TelcoTV Conference& Expo 2005 San Diego, Calif. Nov. 8-10, 2005 www.telcotvonline.com Copyright © 2005 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.