VCs believe in Video

That’s good news, isn’ it? Even with monies evaporating all over the place, converting dead loans into dead funds, VCs are still investing in online video. NewTeeVee reports some nice numbers: “This year, 29 startups have already received funding, and the average amount is on the upswing, too, to $7.5 million.“

25.4.2008 von hubert Kommentieren

Looking for Soccer Fan Videos

If you are a) into soccer (or fussball or football …) and b) own a cam corder (or a mobile which handles a video a bit better than my SE K610i), you’re invited to put your fan video on halbzeit.in, which translates into halftime.in and is our little video sharing site.
Why are we doing this? On YouTube, MyVideo, Sevenload, there’s already tons of fan related material. Sure. But a) we like soccer and b) we want to put the stuff on our tv channels (don’t try this with bootlegged flash encoded video material).
And not to forget c). Yes, on YouLoadMySevenVideo, there are already some trillions of uploaded videos. So your pretty cool fan action will have neighbors like this one.

31.10.2007 von hubert Ein Kommentar

TV 2.0?

First thing I have to say: Bertram and Harald did a phantastic job. This is grand. But unfortunately, I’m a bit in a nitpicking mood.

Let’s start with some of the basic assumptions. The assumed basic cost structure for a free tv network doesn’t make too much sense. Yes, the key areas are right: content licensing/production, marketing, and distribution. But distribution is not a variable. At least not, if you need national reach. The more coverage you want, the more you pay. Let’s just assume that German mega broadcaster RTL pays annually about 12 million Euros to reach its tv audience. 9live has almost the same distribution. And therefore pays about the same amount of money. The big difference: RTL has renevnues of round about 2 billion Euros. 9live makes about 60 millions.

This has of course serious implications. The cost of distribution limits the access to the public (as do the technical limitations, e.g. available spectrum). It’s called mass media, because you need the masses to watch (or interact, as it’s the case with 9live). Otherwise, you’re going to be out of business pretty fast.

Pay tv is kind of different. Essentially, as a channel operator you have to convince a gate keeper, that the he should shoulder the cost of distribution, against a revenue share. Joost seems to aim to become some kind of funny in between. A gate keeper for a p2p -based distribution of free tv.

Both approaches pose quite serious barriers of entry. That’s why one of the key factors in tv 2.0 is the lowering of the cost of entry. With web based distribution, you can reach an international audience for zilch. Hey, that’s a start.

Now, what’s going on with this audience? As a side note: tv networks (as most traditional media players) do not like Google. But the media sales organizations of tv networks do not (yet) feel the sting of Google’s AdSense. Yes, Google is a juggernaut. But the bauty of the text ad system has been, that Google found a whole new pot of gold. Google isn’t making it’s billions with the handful of mega brands, that fill the koffers of the tv networks. That’s why traditional media is much more scared of bud.tv and the likes. If the media buyers become audience aggregators of their own … As it turns out, it’s not that easy. Especially, because as a media buyer, you’re buying into consistency of reach. Ventures like bud.tv are, like any new media brand, a risky thing. And don’t forget: one of the heaviest spender in media is media itself.

But back to tv 2.0. OK, web based video lowers the barrier of entry. That’s good. The same reasoning applies to the cost of production. Not because of the web, but because the hard- and software for video production and editing is finally approaching zero. This applies to all areas. With my own company, we’re deploying professional broadcast playouts into cable headends. Unthinkable a couple of years ago. same with professional video editing. HDTV cameras. Post production and 3D animation. You name it.

This is good. But still: producing a video is still quite some effort. Will “moving images replace HTML pages”? Never ever. Producing a video is too much effort for the producer. And, for most parts, watching a video takes is too much equally. Why? Video is a linear medium. You can scan a written page in light speed. Speed watching isn’t that easy.

OK. Enough nitpickin’. Bertram and Harald are of course right. TV is going to change. The means of access to video content are changing. Channels as the main organizers of content access will have to change.

The funny thing is: we really don’t know, what tv really is. Do we define tv by content. Most likely not. Otherwise, we wouldn’t make a difference between tv and DVD. Do we define tv as a technology? That’s probably a bit closer.
It’s tv, if it’s broadcasted and displyed on a tv set. But how about PVRs? With video and DVD, we distinguish between a solid media and ethereal broadcast receptions. PVRs are a virtual broadcast.

tv reception itself won’t change that much. Why? tv is a linerar medium. If it’s good, you watch. If not, you switch. Or tune off. That’s all the interacton you ever need.
What going to change is how you find and access content.

The main difference between tv (as is) and tv (2.0) is the enhanced on Demand factor: on Demand with an URL. Because the URL opens up all other means of access, business models, and social feature you can imagine.

TV2.0 - Digitaler Film

17.7.2007 von hubert 2 Kommentare

Axel Ehssan Springer

OK, that’s a pretty German thing. Bernt von zur Mühlen asks in the media newsletter Medienbote: Where are the Web 2.0 Portal founders? Meaning: old media has had a tradition of reinventing itself from within. And gives some examples. Like Axel Springer (founder of the German multi billion Euro media empire Axel Springer Verlag). Or Helmut Markwort, reinventing for Burda the weekly news mag sector in Germany. Or Helmut Thoma, building up RTL from a softsex pirate station to Germanies leading tv network. His question: has old media now lost its knack? Instead of buildig up their future from scratch again, they buy their future.

Well, we talked about this one before. Real innovation (as in paradigm shifts) has never been the game for the incumbents. At least not in media. So he’s getting something wrong here. The founders are busily starting up their businesses. And the incumbents are busily picking the raisins. And everything’s just fine.

9.1.2007 von hubert Ein Kommentar

Pipe classic, Pipe lite

Yes, I like the virtual pipe (thanks, Bertram, for the pointing me to Andy Kessler). But, uhm, what exactly is a virtual pipe? As opposed to a real pipe, virtual pipes try to emulate a lock-in situation. To understand what he’s talking about, we have to remind ourselves that Andy is a) American and b) a VC. His real media pipe looks like a typical cable walled garden to me. Here’s the media, there’s the pipe, that’s your home. In the US, it’s a billion Dollar market. Break up this lock in situation, and you’ll be offering what VCs are looking for.

A virtual pipe is just trying to emulate this lock-in situation. His prime example is convincing. The business model of console games is about a technologywise totally closed shop, built upon the razor model. The more boxes you sell (in the beginning even at a loss), the bigger your reach. And if everything goes well, you make a killing from the software licenses. BTW, brought into perfection by Microsoft. Not with Xbox, but yer olde Windows. As they outsourced the risk of shipping hardware, just keeping the increasing returns business of peddling software.
As it happens, it’s one of the oldest business ecosystems, in regards of media and technology. Edison and Berliner sold their hardware (OK, I doubt the grammophone was ever a loss leader). And started successful software subsidiaries, whose leftovers are now known as the music industry majors.

Apple’s iTunes takes this model topsy-turvy. The software a.k.a. music is the bait (a loss leader? I doubt that. Maybe micro business). The hardware is the game, and usability, design, and branding the driving forces. The virtual lock-in into the iPodsphere by DRM is actually pretty much non-existent. You won’t see too many poeple filling up their umpteen Gig hard drives with music bought in the iTunes store (S. Jobs could afford that. But could you?). And even then: you still have your desktop application which allows you to unlock the DRMed file. It’s a minor hurdle. But if you bought into the Applespace because of superior usabilty and convenience, this might be the virtual virtual lock in.

Let’s take another step back. Media is a software business. Traditionally, the content is tied to a physical thingy. The model behind is milking a scarce ressource. Spectrum (if you’re a broadcaster), right of way (if you do cable), advertising (hold on - now it’s getting mushy).

Because for some strange reason, capital puts the telco, media, and, entertainment eggs into a single basket. Which only makes sense, if you never worked with a telco AND a media company. Telcos think infrastructure, decadelong depreciations. TV is about yesterdays ratings. And even if there’s sometimes a symbiosis going on, they are as much related to each other as a lactobazillus to my family. Can’t live without both of them, but that doesn’t make me the grand uncle of little acidophilus.

Of course, sometimes the strategic interests of telco and/or hardware companies led them to gobbling up some media properties (what’s content, compared to cash flow?). And, with the notable exception of Time Warner, you won’t see too many fully integrated telco-media-companies. Usually, the telcos wield the stick (Vodafones EBIT dwarfes the combined revenues of the whole music industry). John Malone used to play hardball with his media “partners”, or, remember the Japanes-led invasion of Hollywood? Ted Turner might have been the only media player, who successfully quenched his telco partners for the monies he needed.
In this concert, media plays the second fiddle. And content is as much king as the Green Giant the duke of Broccoli.
Yer olde media equation looks like this:

- raise lots of capital
- hook up with a large entity which controls a scarce ressource (governement, if it’s spectrum or just a license you need, a telco, if it’s cable bandwith, a game console company, if … and so on)
- aggregate/produce and distribute content
- make some money by either selling eyeballs or selling the goods (discs, cable subscriptions, paper …)

With networked media and entertainment, this equation starts to change. The gridlock onto scarce ressources is weakening. Anybody gets global distribution by pressing an upload button. Which might make life kinda complicated for traditional media outfits. But, on the other hand: obviusoly, this new environment seems to serve new media companies Google pretty well.

And so we’re coming back to last posts final question: Is content now really king? Looking out of the window leads to the following idea. Olde media used to pay for content. Google’s positions itself more like an intelligent remote control (at least you do not have to pay for integration, like in the yellow pages). To Google, all content is created equal and just piece of data store in the indices of Google’s server farms. (The YouTube-deal might chance this comfortable postion; suddenyl, it’s all about licensing and copyrights.)

Does this mean, content will be demoted fiscally from lackey to lactobacillus? OK, this might be the logical path from the intern-executed media production style of the early 21st century. But, fair enough. More likely, that’s what happens if you look out of the window and outside everything’s greyish, wet and fall.

Mostly, the de-piping of media means:
- As abundance replaces scarcity as a driving factor, media’s distributional power is reduced to the power of being a brand. Which, in an environment of abundance, ain’t that bad a position.
- Network neutrality assumed, the media’s gatekeeper position won’t be taken over by the telcos. Or, at least, you’ll have a choice which gated (or open) commuinty you’re going to visit today.
- Meta-media like plain search engines, dedicated search engines plus hosting (ASPs like YouTube, Flickr), social networks et al drives the audience to the content. Old media mostly picks up what’s already on their screens.

But what’s the effect on content? The medium is the package. Which, by it’s commercial needs and restrictions, defines the content. TV shows are produced around commercial breaks. A pop album is defined by the capacity of vinyl records and CDs. Which, after this little excuriosn, leads us back again to last next stop: the content value chain ….

11.11.2006 von hubert Ein Kommentar

Is Google run by morons?

Mark Cuban did put it on the map. Only a moron would buy YouTube. Well, here comes Mr. Google, allegedly offering some 1.6 Billion USD. Whoo-hoo, here we go. Is Google run by morons? Probably not. But they have to cater to analysts (which might be even worse).

I still think: as a business, YouTube is worth a nickel and a dime.
As a buying-growth-scenario, the deal might save Google’s mega valuation for a couple of months. Just look at the latest comScore stats.

TRAFFIC DATA
__________________________________________________________
Select Online Video Sites (Note: Not an official ranking)
Total Unique Visitors (000)
August 2006
Total U.S. - Home/Work/University Locations
Source: comScore Media Metrix

Total Unique Visitors (000)
Select Sites Aug-06
———————-

Google Video + YT would guarantee the number 1 spot for at least 6 months. But obviously the people aggregators like MySpace, Yahoo and the like beat Google’s dried up services approach.

Which probably means, they shouldn’t buy YT, but Facebook. But Google buying traffic to save a valuable property? That would be a scary thought. Well anyway. On a mid term perspective, it could always be argumented that it will help solidify Google’s entry as the video ad engine of choice.

7.10.2006 von hubert Ein Kommentar

Old Media as a Commodity

Is Old Media dead? Nope. It just smells a bit funny (to misquote Frank Zappa). But let’s start from the beginning. Media as a business is a mere pipsqueak in the troublesome world of high finance. Exxon Mobile as a single company has probably a large turnover than all media companies combined. And my fav example has always been the music industry, ogling the mobile business - when in fact Vodafone has a larger annual EBITDA than the whole music industrie’s cumulated revenues.

But media as a business has always been really attractive, too. Not just because of the Swarovski-glitz that comes with it (nice for us involved). And the potential of coming from rags to riches (and vice versa). Media mostly lacks direct financial power. But has the incredible leverage of making matters matter. Just ask Silvio Berlusconi. Or any given (former) Russian Oligarch. Or the people at Gazprom. Or, maybe, General Electric.

Sure, Old Media has been a quite good business, too. Maybe a bit volatile (yesterday’s hit is today’s fad). With some superstars milking their companies for the last cent (most investment bankers can relate to that). But if everything runs smoothly, the return was constantly pretty good. And if you’re in production, too, a real hit would mean a serious income peak (at least in movies, publishing or the music).

As any given business, the Old Media is based on scarcity: if you’re a broadcaster, spectrum is finite. If you want to produce movies, you need access to lots of capital, some rare talent and finite distribution. If you’re into books, you better own the printing press and know your distribution channels.

All those ventures did share some things: production and distribution are expensive. Sustainable stability of sales is a matter of expensive branding. And, with the notable exception of film, where you need an army or two to get a movie done, the creative part will be handled by just a handful of people.

And that’s why online media makes most old media companies a little queasy. In a peer to peer system, distribution cost is, well, distributed. There’s no real scarcity of spectrum or shelf space. And the technical expertise needed to setup a blog is worth a cup of Frappuchino per month. OK. Making money is still the hard part. And probably will be for the next foreseable future (AdSense just isn’t enough).

But the effect on media companies, after dabbling a bit in the New Economy bubble, has been quite soberng. Media outfits increasingly are abandoning the pretense of being “growth” companies—like Silicon Valley tech titans—and instead opting to return cash to shareholders, like boring but profitable electric utilities or food companies, writes Robert Marich for Kagan Research.

Meaning: the party’s not over yet. But don’t look for anymore bottles of Bollinger. If you want some sparkle, get used to Prosecco and Pellegrino. Of course, Old Media still means good business. But the old mainstays are eroding. Despite loosing market share, the US broadcast networks still sell their ad inventory for a premium (compared to cable networks). Because their still the only way to reach out to the masses. But those masses reached are shrinking. Local newspapers are still the opinion leaders in their communities. But webbased publishing and user generated are is already making inroads.

Sure, it’s a glacial process. But opinion making is changing from one to many communications to a more distributed process (where one to many still will be a major force, but not the only one).

It’s a process of commodization. But what’s in it for a media company? One reaction cold be: embracing the new media world order. News Corp buys MySpace, German powerhouse Hubert Burda Media picks lots of brains and everybody tries to extend their brands into the digital world. But a completely different thing seems to be going on with Bertelsmann. As, at first glance, the singlemost interesting activity of the company hadn’t been related to media at all.

Entry into ‘Public Service’ Sector in Great Britain is not the stuff you get some headlines out. Essentially, in July 2005 the Bertelsmann subsidiary Arvato took over 500 employees of the County of East Riding (a project, which seems to be running just fine). Is this the future of Old Media? Let’s not forget. Old media is quite good at competitively running large systems for subscriber management and other back end processes, sometimes involving millions of customers and subscribers. And running a town isn’t that new an idea for a media company. In Florida, Disney isn’t just the service provider for a municipality, but wholly owns Celebration. But then, real estate development is a completely different track (so don’t expect TimeWarner to take over New York City any time soon).

23.8.2006 von hubert Ein Kommentar

Pricing Digital Movies

Why are downloads as expensive as physical as the same content burned on a silver disc? Anne Thompson of The Hollywood Reporter has a really interesting piece here. And CinemaTech has got the discussion.

The basic question: with downloads you get instant gratification, but otherwise less. Lower video quality, no bonus material, annoying DRM, no physical goods, no artwork and covers and booklets. OK, convenience has it’s price tag attached. But of course digital downloads and physical goods are not on the same level. It’s pure content versus content plus a thing. Something you can touch, collect, show off, present to somebody.

What got some people steaming, was Ben Feingold’s (Sony’s president of worldwide home entertainment) remark on pricing: Currently there is basic parity in the electronic or physical landscape. That’s what makes sense at this particular time.

Comments like price parity is NUTS are of course on track. From a consumer’s perspective, price parity looks greedy and pointless.

But Anne Thompson’s makes an important point: The reality is that the studios are so invested in such brick-and-mortar video retailers as Wal-Mart and Best Buy and Target that they can’t afford to alienate them. The big box retailers represent about 60% of the studios’ $24.5 billion in annual DVD revenue. At the recent quarterly meeting at Wal-Mart headquarters in Bentonville, Ark., where the studios bid for positioning in their stores, Wal-Mart made clear to the assembled studio home video reps, according to sources, that it does not view digital downloading favorably. And the prospect of Wal-Mart ordering fewer copies of just a title or two sends a chill into studio hearts.

The Grinch lives in Bentonville, Ark.

Via CinemaTech

19.7.2006 von hubert Kommentieren

If you can’t join them: beat them.

Or at least scare them to death. Look at Google’s funny presentation of an interactive TV research paper. The gist: in a perfect world, iTV would be an ubiquos reality, any marketeer’s dream and the perfect pasttime for many a people who’s idea of entertainment isn’t watching a PC scanning itself for viruses. But as we all know, the world is far from perfect (Global Warming, Cialis spam, Cherry Coke - just to mention a few). So since one and a half decades and for the next foreseeable time, iTV can consistently be described as the future of tv (and future it stays).

The reasons are plenty: a hodgepodge of industry interests and players is frequently churning out standards which are practically nowhere deployed (MHP). The computing power of the targeted hardware (A.K.A. settop boxes) is dwarfed by any 10 Dollar wristwatch from a street vendor in Paraguay. And most walled garden of the operators aren’t landscaped after the hanging gardens of Semiramis, but obviuosly more likely with the desert Gobi in mind.

Yes, it’s a mess. But who’s better equipped to fix up a mess than Google? After all, they brought (some) order to the web (which is after all the mother of all messes). Introducing Google TV. Or at least a paper called Social- and Interactive-Television Applications Based on Real-Time Ambient-Audio Identification.

In a nutshell, the idea goes like that. Many people watch tv and surf the web at the same time. Combining those experiences in a somehow converged appliance is still a pipe dream. Connecting PC and STB is mostly not an option. Making people doubleclick to switch a program is the not-so-elegant status quo: first change the channel on the remote control, than switch web sites.

Google’s approach is somehow between big brotherish and ingenious. The only thing you need is a PC with a microphone and a tiny piece of software. The mike listens into the room, the app samples and irreversibly compresses the viewer’s ambient audio to summary statistics. These statistics are streamed from the viewer’s personal computer to the audio-database server for identification of the background audio (e.g., ‘Seinfeld’ episode 6101, minute 3:03). Meaning: transmitted won’t be your stupid talk about nuking your next door neighbor, but just the audio fingerprint of the background noise formerly known as television (and if 10 minutes after you talked about nuking your neighbor 20 square jawed hulks with blackened faces politely knock on your door, you’ll know that somebody has put a trojan onto your system).

Far fetched? Audio fingerprinting is already here. UK-based Shazam recognizes music you play to it, same goes for Fraunhofer Institut’s AudioID. This solution is quite elegant. You get rid of most of the existing complexities, don’t have to care about channel numbers, locations, distribution networks or else. You’re back to the program itself (which even could be a DVD you watch and Google TV will tell you that there’s a guy watching the same movie over and over just like you and you can start to talk, chat or whatever about your mutual obsession).

The paper describes four different types of applications: Personalized Information Layers, Ad-hoc Peer Communities, Real-Time Popularity Ratings, and Video “Bookmarks”. The impact on advertising is partially addressed, too. Well, networks, be aware. Will Google harvest the info clouds surrounding any piece of programming and at the same deliver targeted ads, based on context and consumer behavior (and thereby taking away your bread and butter)? Most likely, not. Even if Don’t piggyback isn’t totally covered by the famous Don’t be evil. But wait for those kind of apps and ads to show up combined with IPTV offerings. Additional lines of contextual content, combined with AdSense for IPTV. To be watched either picture in picture or on a second screen (PC, handset, …).

More to read: Official Google Research Blog: Interactive TV: Conference and Best Paper,
and Chris Riley: Clues on Google TV?

Addendum: The more I think about it, the more obvious it is. The mad professors at the Googleplex are good for many far fetched ideas. But let’s put it like that: the audio part is such an obvious privacy nightmare scenario, that they can’t be serious about it. No way. So we have to divide the paper in two parts. The relevant part for Google is the iTV-backend, with the app and ad serving.
But would have anybody in the whole world noticed just another iTV paper without the harebrained audio scheme attached? Right. And here we go. One paper. And Google positions itself as an interesting player in the TV/iTV market.

8.6.2006 von hubert Ein Kommentar

Get That Movie. Now.

On Ars Technica, Andres Bylund is giving us a real treat: Blockbusted! Movie rentals of today—and tomorrow compares the different means of renting a movie (at least, if you’re US-based; but most things ring quite true for the rest of the western world, too).
It’s a nice round-up. There’s definitely nothing wrong with it, but it’s a bit misleading, too. Because Bylund is comparing Apples to Oranges, and throws in some Bananas, too. The only thing WalMart, Blockbuster, Netflix et al. do have in common is movies. Which is a bit like pedestrians, trucks and a Porsche sharing just one thing: sometimes, you find them on a road. It’s good, but not good enough.

It’s a way of thinking coming straight out of a product world. But the important thing we need to apply is the use case, and the values behind it. In the as-of-today-world, comparing WalMart (DVD buy) and Blockbuster (DVD rental) doesn’t make too much sense. Not, because of WalMart’s target group. It’s just that people, who buy DVDs almost never rent. And vice versa.

I liked the comparison between Blockbuster and the local rental store, and how the latter did carve out its niche. But Neflix is a completely different beast. Not like hey let’s get a beer and rent a movie. It’s more like HBO without a schedule and some preselective choice (I might like to watch this or that movie later this month).

So what about VoD and downloads? Those two could be closely related. But don’t have to. Look at iTunes, as an example. it’s hyperconvenient, the store entrance is always right in front of your PC. You buy your song, you download it, you (kinda) own it. But it’s a dematerialized product. iTunes gift certificates range probably even lower than mail ordering a bunch of flowers. Uhm, thanks for not completetly forgetting my birthday.

Never forget: the physical world has its treats, too. Will VoD replace local rentals? Could be, should be and in all likelihood sooner or later it will dwarf the storebased rental business. But please don’t leave too much nacho crumbles in the matter transmitter.

Addendum: The NY Times on What Netflix Could Teach Hollywood

Which tells partly the tale from the long tail - but gives you a good idea in what kind of business Netflix really is: Out of the 60,000 titles in Netflix’s inventory, I ask, how many do you think are rented at least once on a typical day?

The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?

Well, the actual answer is 35,000 to 40,000. That’s right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer. “Americans’ tastes are really broad,” says Reed Hastings, Netflix’s chief executive. So, while the studios spend their energy promoting bland blockbusters aimed at everyone, Netflix has been catering to what people really want — and helping to keep Hollywood profitable in the process.

Five million families now have Netflix accounts, and the company has basically reinvented the concept of a quick-turnaround mail-order business.

6.6.2006 von hubert Kommentieren