Web TV / IPTV / Online Video

Liz Gannes on the US experience of Winter Olympic Web TV

NBC knew at the outset of the games it would be losing money on broadcasting them due to licensing costs but still took an extremely cautious approach to making events accessible online, rather than experimenting with the web to goose revenue. To its credit, the network finally opened up a couple of high-profile events toward the end of the Olympics for live streaming, allowing access to users without requiring them to authenticate themselves as paying cable subscribers. But I found it incredibly frustrating that given the major advances in live-streaming video and video advertising since the Beijing Olympics (see my sub req’d story on GigaOM Pro about adaptive bitrate streaming), NBC ratcheted down its content so tightly — offering an estimated 400 hours of live video coverage compared to 2,200 two years ago.

There are two interesting subtexts here:

Firstly, the US stuff was in the same timezone, ideal for the established Web TV "watch later" model to function. In the UK it was on late at night so we were watching it live on conventional TV during the usual "catch up" time late at night. Web TV still can't compete with "real" TV for this, it was a no-brainer to be up a 2.30am watching the BBC

Secondly, there was far more going on at any one time than a few standard TV network channels could cover. This is where Web TV should really complement broadcast TV. The high profile event shown live on Web TV was the Ice Hockey game, with 500,000 streams - but long term I can't really see the point of trying to compete head to head on the main events, as that is not where Web TV economics really work except as a way of goosing revenue (as Liz puts it )

But to me, the really amazing lesson of the Winter Olympics has been how exciting the Curling has been. Partly its been the very close matches, but as the Huffington Post points out, it may also be because so many of the players are so cute

The court case against Google's YouTube / Google Video subsidiary is very interesting. A summary here from the NYT:

Three Google executives were convicted of violating Italian privacy laws on Wednesday, the first case to hold the company’s executives criminally responsible for the content posted on its system.

The verdict, though subject to appeal, could have sweeping implications worldwide for Internet freedom: It suggests that Google is not simply a tool for its users, as it contends, but is effectively no different from any other media company, like newspapers or television, that provides content and could be regulated.

Now as you can imagine, there has been a vociferous outcry in some quarters that this is a crime against the Internet, and in others that this is Big Media attempting to strangle the poor innocents through legal hands around their jugulars.

But its simpler than that - it is a question of "when do you become a publisher" - in short:

Google maintains that the ruling contradicted a European Union directive on electronic commerce that gives service providers safe harbor from liability for the content they host.

But prosecutors argued that because Google handled user data — and used content to generate advertising revenue — it was a content provider, not a service provider, and therefore broke Italian privacy law.

Clearly, searching a large number of other sites and aggregating results (Google Search) is not being a publisher. But once you are holding a large amount of content in your own databases (YouTube, Google Video), and are clearly running a for-profit service that's business model is attracting customers by aggregating and advertising against it, it is not hugely different to any other publisher.

Google Argues:

Common sense dictates that only the person who films and uploads a video to a hosting platform could take the steps necessary to protect the privacy and obtain the consent of the people they are filming.

But imagine if a cinema argued that showing illegal movies was not it's problem as it was merely a hosting plaftorm. One man's publisher is another man's platform and as Web models come closer to looking like "real life" models..... so the question really is - should the Web based publisher be treated differently under law to ones that have come before?

One of the reasons that Web based media has done so well is precisely that they have not yet been put under the same constraints as older media, and while some old shibboleths like IP and Rights need reforming, a levelling of the playing field is also long overdue.

Piece on GigaOm saying "Video changes everything" by the CEO of Skype:

It’s easy to slip into hyperbole. So take it with a pinch of salt when I talk about entering a place of virtual presence that mimics tangible reality, saves time and deletes distance through live video links. Take it with a pinch of salt, too, when IFTF says this new oral society creates a new public sphere. Let’s not forget that it’s still early days. But video already allows Skype users to transcend place and time, whether on the desktop or on a Skype-enabled TV, and some 4 percent of all international calling minutes are now video calling minutes, on Skype.

Video "allows Skype users to transcend place and time" not slipping into hyperbole eh . And what have all those webcamming aficionados being doing since 2003 or so on IM then?

Of course, if you had been reading Broadstuff you would have known all this 18 months ago when we reported on our Broadsight research for Telco 2.0 (if not before as we wrote a few earlier articles suggested by the research program). It was only a matter of time before increasing Bandwidth allowed major VoIP services where V stood for Video.

In fact, we've racked back on Video Futures research for a bit now as its a "given" in our opinion, and are focussing more on other areas like Real Time, Location Based and Smartphone services. Still, nice to see that the mainstream tech blogs have run with it

(Actually, I must say the Liz Gannes from GigaOm is pretty much on the pulse)

Broadstuff - Always Firstest with the Bestest

(this has been an in-blog commercial announcement, usual terms and conditions apply)

The Telco 2.0 Brainstorm conference today witnessed a very rare talk - it used Game Theory to explain the options for the future of the media mediums (Music, TV etc). Professor David Touve of the Williams School of Commerce asked the 100+ assembled people there 5 pithy questions:

1. Is Media a Product or a Service?
The results - 90% thought it was a service, 10% a product. David said it was both, an also an experience, a cultural artifact and a social penomenon - and as it changes so the "money" vein shifts.

2. Do you believe the "3 strikes and you're out" policy will (i) decrease, (ii) increase, or (iii) give no change in Piracy?.
- 20% thought it would decrease, 10% increase, 70% no change

In other words, given that most of the techs know it won't work why would you do this? This goes back to my"Things White People Don't Like - Real Geeks" post. Telco people by and large are real geeks - digerati not chatterati, and as I pointed out in my post, "White" vpeopl tend to ignore their know-how and thus get things wrong. Like 3 strikes and out policies.

But the big picture absurdity of the Meedja was beautifully pinpointed by his next 3 questions:

3. Will a policy of filtering/disconnecting give a better economic outcome than licencing for Media?
result - 20% filtering, 80% licencing

4. Will a policy of filtering/disconnecting give a better economic outcome than licencing for ISPs?
result - 25% filtering, 75% licencing

5. Will a policy of filtering/disconnecting give a better economic outcome than licencing for Telco
result - 25% filtering, 75% licencing

The result is the "prisoners dilemma" game table you see on top, which shows clearly that the "optimal" box for Media rightsholder and ISP is licencing, yet the sad thing is a combination of self-optimisation and sheer pig headedness is driving the industry to a defect "disconnect/filter/net neutrality" fight as both tries to maintain its advantage and wants the other side to cave in.

QED.

Well, we as well as many others felt they had overpaid, and now we know they did - Google valued it at about $600 - 700m when they bought it (see here at Mashable). Paying $1.65bn is a large premium of c 220% assuming the higher valuation. So why did they do it? Schmidt:

It’s simple: if they hadn’t done it, someone else would. Here’s what Schmidt told Viacom’s attorney Stuart Jay Baskin:

“This is a company with very little revenue. (YouTube was) growing quickly with user adoption, growing much faster than Google Video (Google Video), which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer–because of who Google was–paying much more than they were worth…We ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube.”

Was it worth it - Mashable thinks so:

From our perspective – and here at Mashable (Mashable) we focus on the users – it’s a no brainer. Three years after the deal, there’s only one important social video sharing site out there, and it’s YouTube. Somewhere along the line, YouTube may lose its luster, but as it stands right now, it’s one of Google’s most important assets, and that alone says a lot.

A small quibble, if I may - words like Asset, and Value, get badly diluted in Newspeak 2.0. These words' original meanings are based, however, on the basic principle of gaining positive returns at some point. Being important by dint of massive subsidy is, well, its an approach, but its not sustainable, its not creating value at that point, and as for counting it as an Asset - accountants define an asset as something that gains, not loses, a business money.

At the moment, the value in this asset is accounted for by a large amount (120% too much?) of Goodwill and not much else. It needs, really needs, to start to make money.

I like this opener in Mika Salmi's piece on the Future of Media in Paid Content:

Sorry, but the future is destined to remain unclear. Media, and most importantly the distribution of media, has gone digital. That means change will be ongoing, and media will be subject to the same non-stop innovation present in the broader technology sector. The core content - videos, music, games, print, etc. – will in many ways look/sound/play/read like today but everything about the way it is consumed and delivered will continue to change.

Quite right - its at the beginning of a major tech driven change, and there will be a lot of experimentation before the new models emerge. This happens every time a radically more effective technology hits a sector. (And its not new - see this post on steel and steam in ships, for example).

The thing is, in my view its not enough just to batten down hatches for the disruptive period of the storm - one needs to try and work out what the post-disruption world will look like. To use another nautical analogy, when things change you have change tack, reset the sails etc to alter course. Fine and good, but also you need to think about where to alter course to. Running before the wind is the least best strategy. (One of the issues, of course is when on an even keel, many enterprises then get rid of the people who can navigate and execute course changes).

Mike's view is that we are moving to "Media As A Service" (MaaS).

If we don’t know where this all ends up and the business landscape is in constant flux, how can a media business be positioned and structured for the future?

One answer lies in the software industry. Software as a Service (SaaS) has taken that industry by storm. Shipping or downloading a static physical or digital product is a dying business. Pioneers like Salesforce.com, and now Google with their office apps, are showing how a “product” is not a discrete thing. Rather, it’s an ongoing relationship – with continuous updates and two-way communication – with customers and even between customers.

How would this work?:

What if a TV company took the next step and thought of their content as a service? How would they approach their business differently?

Perhaps a TV “show” could become a continuum of short episodes distributed via Facebook, Twitter, or other social and real time means. The “show” could be free on a Facebook page, with standard ad units providing the first level of revenue. The show might contain social elements (pulled from the Facebook page) built into the content, which would connect the content, the user, and their friends more deeply. Additional “fees,” in the form of demographically tailored offers, micropayments, or subscriptions could come from users who want to see a show first, buy products from the show, create avatars, host a viewing party, and on and on.

Once a company, producer or content creator embraces its content/media as a service, the possibilities and ideas on how to approach it multiply. And since the business will be constantly changing, new revenue models and content ideas will emerge. This is not just about computers or mobile phones. The living room television may become the most exciting area for these media services.

It’s no longer just about playing media. It’s about playing with media. Hulu, Blinkbox, BBC, Warner Bros? Who will embrace TV as a Service?

I think there is quite a bit to chew on there - it is also echoed in an article earlier this week that showed WebTV CPM's are waaaay above text and picture CPM's (much to Jeff Jarvis's chagrin )

Of course, its well known that the incumbent industry is always the last to accept the radical shifts (even from its internal reformers). Funny story for you - a few years back, I was asked to write an article for a well known Broadcasting periodical on the "Video Website" - I think what they had in mind was a view of how TV will use the Web. What I wrote instead was an article about how TV will be (over time, and in part) consumed by the Web. It went down like a lead balloon and was never published, and most of it has since come to pass or is in sight.

BBC trying to get social on Facebook - Torygraph?

Speaking at the Social TV Forum 2009, Anthony Rose, the BBC’s controller, vision and online media group, confirmed the corporation was working on developing a Facebook application but “the proposition was not quite there yet”.

The Telegraph understands the application would be free to download and would be the first major move the BBC has made into Facebook applications, which is becoming an increasingly big business.

According to "a source close to the BBC":

“The BBC needs to do this as it’s the next step for making TV really social online. And then the application could be developed for the other social networking sites such as Bebo and MySpace. If the BBC launched this app, ITV and Channel 4 would undoubtedly follow. As far as I understand it, the BBC’s app would allow Facebook users to watch its content without leaving the social networking site."

Twitterers have already adapted that network for real time chat around BBC programs, more could certainly be done with a little API from their friends to increase our watching pleasure. There was a fascinating little point made about commercial opportunities too:

However, according to the source, the BBC has been hesitant about moving quickly on this development due to fear of seeming too aggressively commercial in the digital space. For, outside of the UK, a Facebook application would potentially create a valuable new revenue stream.

Planning for the day the Licence Fee goes away? Interesting to see the BBC out front here - one does wonder what Channel 4 and ITV are doing strategically in all this media maelstrom?

Telecom.TV's Leila Makki and The Really Mobile Project's Vikki Chowney teamed up to do some interviews in this video shot at the TEDxTuttle event (we did quite a bit of the behind the scenes stuff).

Readers of this blog are invited to go back to an article we did earlier this year on YouTube economics, which showed that it swings hugely on the % of its videos (very small today) that can be advertised against. The problem with UGC video is that its seen as very risky, for a variety of reasons (taste, quality, legality). Today, YouTube carries on in its attempts to make money by increasing the % withcuration of the "hit head" of its UGC video collection. :

We decided it was time to spread the wealth. Today we're excited to announce that we're extending the YouTube Partnership Program to include individual popular videos on our site. Now, when you upload a video to YouTube that accumulates lots of views, we may invite you to monetize that video and start earning revenue from it. To determine whether a particular video is eligible for monetization, we look at factors like the number of views, the video's virality and compliance with the YouTube Terms of Service. If your video is eligible for monetization, you will receive an email and see an "Enable Revenue Sharing" message next to your video on the watch page, as well as in other places in your account:

Once you've chosen to enable revenue sharing, YouTube will sell advertising against your video and pay you a revenue share into your Google AdSense account each month.

This is thus an attempt to get the UGC videos that actually could make money to actually make money, by wrapping them in a program that is safe to advertise against, and has proven its quality by the quantity of hits. Videos are more expensive to serve than searches, owing to their bigger file size, so the transaction return per Ad has to be higher - hence the curation only of the "hit head" UGC videos.

By the way, if a proof of the general economic uselessness of the Long Tail in current new media was needed*, this is it. Follow the money, as they say...... in venality veritas.

(*apart from being a large number to bamboozle dumb companies to part with plenty of money to buy your New Media entity, that is )

Techfluff TV (Hermione Way's video vehicle for capturing the fluf... - I mean vibrant and lively - side of Eurostartup technology) has landed on the Torygraph online blogs. First Videoblog is that above. We wish the venture well.

Apart from giving Techfluff.tv the oxygen of publicity they would never get otherwise, (You owe us bigtime, Hermione ) we blog this as it also nicely illustrates a trendlet - ie the non-appearance of Web TV on "print" organs' sites compared with say the BBC's move to online "print" media. The endgame for all media is multimedia we would suggest, and its interesting to see how dominated by text the print media's online sites still are.