Analysis for 'Technology'
Monday, July 13, 2009, 9:47 AM ET|
I'm back in the saddle after an amazing 10 day trip to Israel with my family. On the assumption that I wasn't the only one who's been out of the office around the recent July 4th holiday, I've collected a batch of industry news links below so you can quickly get caught up (caveat, I'm sure I've missed some). Daily publication of VideoNuze begins again today.
Thursday, December 11, 2008, 9:59 AM ET|
Back on December 16, 2007, I offered up 6 predictions for 2008. As the year winds down, it's fair to review them and see how my crystal ball performed. But before I do, a quick editorial note: each day next week I'm going to offer one of five predictions for the broadband video market in 2009. (You may detect the predictions getting increasingly bolder...that's by design to keep you coming back!)
Now a review of my '08 predictions:
1. Advertising business model gains further momentum
I saw '08 as a year in which the broadband ad model continued growing in importance as the paid model remained in the back seat, at least for now. I think that's pretty much been borne out. We've seen countless new video-oriented sites launch in '08. To be sure many of them are now scrambling to stay afloat in the current ad-crunched environment, and there will no doubt be a shakeout among these sites in '09. However, the basic premise, that users mainly expect free video, and that this is the way to grow adoption, is mostly conventional wisdom now.
The exception on the paid front continues to be iTunes, which announced in October that it has sold 200 million TV episode downloads to date. At $1.99 apiece, that would imply iTunes TV program downloads exceed all ad-supported video sites to date. The problem of course is once you get past iTunes things fall off quickly. Other entrants like Xbox Live, Amazon and Netflix are all making progress with paid approaches, but still the market is held back by at least 3 challenges: lack of mass broadband-to-the-TV connectivity, a robust incumbent DVD model, and limited online delivery rights. That means advertising is likely to dominate again in '09.
2. Brand marketers jump on broadband bandwagon
I expected that '08 would see more brands pursue direct-to-consumer broadband-centric campaigns. Sure enough, the year brought a variety of initiatives from a diverse range of companies like Shell, Nike, Ritz-Carlton, Lifestyles Condoms, Hellman's and many others.
What I didn't foresee was the more important emphasis that many brands would place on user-generated video contests. In '08 there were such contests from Baby Ruth, Dove, McDonald's, Klondike and many others. Coming up in early '09 is Doritos' splashy $1 million UGV Super Bowl contest, certain to put even more emphasis on these contests. I see no letup in '09.
3. Beijing Summer Olympics are a broadband blowout
I was very bullish on the opportunity for the '08 Summer Games to redefine how broadband coverage can add value to live sporting events. Anyone who experienced any of the Olympics online can certainly attest to the convenience broadband enabled (especially given the huge time zone difference to the U.S.), but without sacrificing any video quality. The staggering numbers certainly attested to their popularity.
Still, some analysts were chagrined by how little revenue the Olympics likely brought in for NBC. While I'm always in favor of optimizing revenues, I tried to take the longer view as I wrote here and here. The Olympics were a breakthrough technical and operational accomplishment which exposed millions of users to broadband's benefits. For now, that's sufficient reward.
4. 2008 is the "Year of the broadband presidential election"
With the '08 election already in full swing last December (remember the heated primaries?), broadband was already making its presence known. It only continued as the year and the election drama wore on. As I recently summarized, broadband was felt in many ways in this election cycle. President-elect Obama seems committed to continuing broadband's role with his weekly YouTube updates and behind-the-scenes clips. Still, as important as video was in the election, more important was the Internet's social media capabilities being harnessed for organizing and fundraising. Obama has set a high bar for future candidates to meet.
5. WGA Strike fuels broadband video proliferation
Here's one I overstated. Last December, I thought the WGA strike would accelerate interest in broadband as an alternative to traditional outlets. While it's fair to include initiatives like Joss Wheedon's Dr. Horrible and Strike.TV as directly resulting from the strike, the reality is that I believe there was very little embrace of broadband that can be traced directly to the strike (if I'm missing something here, please correct me). To be sure, lots of talent is dipping its toes into the broadband waters, but I think that's more attributable to the larger climate of interest, not the WGA strike specifically.
6. Broadband consumption remains on computers, but HD delivery proliferates
I suggested that "99.9% of users who start the year watching broadband video on their computers will end the year no closer to watching broadband video on their TVs." My guess is that's turned out to be right. If you totaled up all the Rokus, AppleTVs, Vudus, Xbox's accessing video and other broadband-to-the-TV devices, that would equal less than .1% of the 147 million U.S. Internet users who comScore says watched video online in October.
However, there are some positive signs of progress for '09. I've been particularly bullish on Netflix's recent moves (particularly with Xbox) and expect some other good efforts coming as well. It's unlikely that '09 will end with even 5% of the addressable broadband universe watching on their TVs, but even that would be a good start.
Meanwhile, HD had a banner year. Everyone from iTunes to Hulu to Xbox to many others embraced online HD delivery. As I mentioned here, there are times when I really do catch myself saying, "it's hard to believe this level of video quality is now available online." For sure HD will be more widely embraced in '09 and quality will get even better.
OK, that's it for '08. On Monday the focus turns to what to expect in '09.
What do you think? Post a comment now.
Wednesday, November 5, 2008, 9:59 AM ET|
Periodically VideoNuze makes complimentary research available that is beneficial to our audience of broadband decision-makers.
Today I'm pleased to offer for complimentary download a handy one page digital media workflow "snapshot" created by Marketing Mechanics, a consulting and market intelligence firm run by Ellen Grace Henson. The snapshot identifies features and capabilities for over 20 broadband technology companies.
Ellen has been in and around the digital media industry for many years in product management and marketing roles and has lately consulted with Kontiki and Move Networks among others. She reached out recently to familiarize me with her work and to share the snapshot. Though she readily concedes the document is not meant to be comprehensive, it provides a very good framework for making sense of the crowded broadband landscape.
The ecosystem of companies supplying necessary products and services to content creators who want to capitalize on broadband's rise is complex and dynamic. I'm often asked for data and comparisons of industry vendors; I think the snapshot can begin to fill that role. It will no doubt evolve over time, as the industry changes and customer requirements grow.
The snapshot dates to when Ellen was consulting for Kontiki (when it was owned by VeriSign), but it was updated as of September 2008. Ellen pulled together the information by talking directly to the companies cited; by definition that means readers will need to carefully assess the data in the context of their own experience and knowledge.
Readers will also quickly notice that not all companies in the space are included; the snapshot is very much a work in process and Ellen will continue adding companies and information to it. In fact she envisions a hybrid business model where paying market intelligence subscribers would get more granular and complete competitive detail. For more information, please feel free to contact Ellen directly. Also, keep an eye on the firm's web site (where this download is also available) for future updates.
Companies: Marketing Mechanics
Wednesday, July 30, 2008, 10:17 AM ET|
Here's another example of the multiple cross-currents in the broadband video market.
Just last week I reviewed new Magid research showing that short-form dominates broadband video consumption. Now this week I received news from Swarmcast which provides a high-quality streaming delivery platform, revealing that the average length of live streams it's serving for its customers now averages more than 75 minutes, suggesting the long-form opportunity is now firming up. An apparent contradiction? Yes. An actual contradiction? No.
What's happening is that while short-form still accounts for the vast majority of viewing instances, there are now marquee events from Swarmcast customers like MLB.com being streamed live that are generating sustained viewership. Swarmcast provides multiple examples of events that it has streamed which lead to the 75 minute average:
- July 15 - All-Star Game
- July 14 - Home Run Derby
- July 3-6 - Rothbury Music Festival
- June 28 - Nelson Mandela's 90th Birthday celebration
I think the success in live streaming events speaks to broadband's convenience. While TV is clearly the preferred viewing device, if you don't have access to one when a compelling event is on, or that content provider has chosen to stream it instead of broadcasting it, broadband is incredibly convenient.
Even so, what's traditionally held back longer-form consumption is low-quality delivery. This is the problem Swarmcast has focused on. I've seen examples of some of their events and the quality is impressive, even at scale. So as content providers recognize that they can indeed stream high-quality long-form events, interest will build. The next key challenge of course will be monetize these streams.
MLB has been a poster child for succeeding with the subscription model, leveraging its loyal fan base and exclusive games. While their brand is unique, it seems like there should also be pay-per-view opportunities for high-profile live events, akin to what has worked on cable (e.g. wrestling, boxing, music, etc.). Outside of the paid model, if audiences can be built for free events, advertisers will also take interest.
Swarmcast's customers' success in longer-form live streaming is again showing that despite the current popularity of short-form, broadband is still evolving, opening up diverse opportunities for content providers.
What do you think? Post a comment.
Thursday, October 18, 2007, 12:42 PM ET|
It's funny how often I'll be talking to someone and they will casually start interchanging the terms "IPTV" and "broadband video/online video/Internet TV".
Yet it's important to clarify that there are differences and they do matter. While some of the backend IP transport technology is common between IPTV and broadband video, the front end technology, business models and content approaches are quite different.
In presentations I do, I distinguish that, to me at least, "IPTV" refers to the video rollouts now being pursued by large telcos (AT&T, etc.) here in the U.S. and internationally. These use IPTV-enabled set-top boxes which deliver video as IP packets right to the box, where they are converted to analog video to be visible to the viewer. IPTV set tops have more capabilities and features than traditional MPEG set-tops, and telcos are trying this as a point of differentiation.
However, at a fundamental level, receiving IPTV-based video service is akin to subscribing to traditional cable TV - there are still multi-channel tiers the consumer subscribes to. And IPTV is a closed "walled garden" paradigm - video only gets onto the box if a "carriage" deal has been signed with the service provider (AT&T, etc.). IPTV can be viewed as an evolutionary, next-gen technology upgrade to existing video distribution business models.
On the other hand, broadband video/online video/Internet TV (whatever term you prefer) is more of a revolutionary approach because it is an "open" model, just like the Internet itself. In the broadband world, there's no set-top box "control point" governing what's accessible by consumers. As with the Internet, anyone can post video, define a URL and quickly have video available to anyone with a broadband connection.
The catch is that today, displaying broadband-delivered video on a TV set is not straightforward, because most TVs are not connected to a broadband network. There are many solutions trying to solve this problem such as AppleTV, Microsoft Media Extender, Xbox, Internet-enabled TVs from Sony and others, networked TiVo boxes, etc. Each has its pros and cons, and while I believe eventually watching broadband video on your TV will be easy, that day is still some time off.Many people ask, "Which approach will win?" My standard reply is there won't be a "winner take all" ending. Some people will always prefer the traditional multichannel subscription approach (IPTV or otherwise), while others will enjoy the flexibility and features broadband's model offers. However, for those in the traditional video world, it's important to recognize that over time broadband is certainly going to encroach on their successful models. Signs of change are all around us, and many content companies are now seizing on broadband as the next great medium.UPDATE: Mark Ellison, who is the SVP of Business Affaris and General Counsel at the NRTC (National Rural Telecommunications Cooperative, an organization which delivers telecom solutions to rural utilities) emailed to clarify that it's not just LARGE telcos that are pursuing IPTV, but many SMALLER ones as well. Point well taken Mark, it was an oversight to suggest that IPTV is solely the province of large telcos like AT&T.
Video Research Around the Web
- Disney Plus Will Surpass Netflix in Customers by 2026, Research Company Says Next TV
- Tubi Says Streaming Rose 58% In 2020, With Half Of Viewers Younger Than 35 Deadline
- U.S. SVOD Revenue Spiked 39% in Q3 to $5.5 Billion Next TV
- What Are Consumers Willing To Pay For Ad-Free TV Content? Mediapost
- What Streaming Wars? Five Services Control 83% of Connected TV Viewing Next TV
- PwC Study: Global Media, Entertainment Revenues To Sink 5.6% in 2020 Mediapost
- What the world watched in a day Think with Google
- U.S. Streaming Minutes Up 85% From Late March Through Early June Mediapost