The Writing’s On The Wall

Only the most ignorant among us can’t see that something big needs to happen in terms of copyright and ownership rights. Whether it be music, movies, or video games, the Internet has opened up a new market which needs to have its potential tapped rather than impeded at every turn.

The record companies and movie studios have had since the emergence and eventual shutdown of Napster to realize the writing is on the wall. But rather than accept the inevitability of the need for change, and embracing the Web as a means of distribution, they’re hanging on to their dying business model by their fingertips.

Urgent Need To Act

Even now, when companies ate slowly deciding they want in, there are too many restrictions being put in place, be it territorially, concerned with money, or control. This lack of willingness to start again to meet the needs of a new generation could cost media companies dearly.

And we’re not talking long-term either. An article about peer-to-peer and BitTorrent sharing by Johan Pouwelse expounds a theory which could mean media companies are in serious trouble. Now.

Pirates and Samaritans

According to NewTeeVee, the Netherlands-based Pouwelse is in charge of developing the social BitTorrent client Tribler. That’s on top of being a P2P researcher. In the 21-page article titled ‘Pirates and Samaritans: a Decade of Measurements on Peer Production and their Implications for Net Neutrality and Copyright’, he claims the idea of copyright could be dead in the space of two years.

The theory comes from looking at the social aspects of the Web and how they’ve grown substantially in recent times. Sites such as Facebook and YouTube allow people to have build long and fruitful friends lists. These then generate masses of examples of “peer production” or user-based collaboration.

Social Darknets

Video-sharing sites such as YouTube are built around a social fabric which allows users to share content with networks of friends. Combine this trend with the emergence of “darknets” (file-sharing networks with no danger of identities being revealed to the outside) and you have a potent combination which could lead to the death of copyright as we know it.

The social aspects of file-sharing haven’t really been explored in any big way but this article shows that Hollywood and other media outlets may have missed a big danger to their wellbeing. A solution clearly needs to be found before media companies find themselves without a business to save.

Over the last few months here on Web TV Wire, we’ve looked at the seemingly never-ending debate as to whether online video can be a profitable business by way of monetization in some depth.

Google and YouTube

Most of this has been regarding YouTube, and Google’s attempts at making some of the $1.65 billion it invested in the video sharing site back by use of advertising.

Google has considered the use of pre-roll and post-roll advertising on videos, but that’s only possible on videos that have been checked for copyright violations – about 4% of the total video content uploaded to YouTube.

We then asked if pre-vetting all videos would help Google’s monetization cause, but argued that bringing this measure in would do more harm than good in terms of user satisfaction and viewer numbers.

TubeMogul – Web Analytics

The question as to how Web video will become profitable rumbles on, but TubeMogul, a Web analytics company that helps video content producers track their videos performance over a number of sites may have the answer.

According to Alley Insider, TubeMogul conducted a survey amongst 12,000 of its members. The respondents gave answers concerning monetization, CPM, and the use of particular advertising methods.

Surprising Results

51% are monetizing their videos, and those that are succeeding report that the average CPM (cost per 1000 video views) paid by an advertiser is a not too shabby at $12.39.

Overlay adverts proved to be the most popular form of advertising used, while 23.4% of respondents claimed to be monetizing on their own rather than with a partner program such as Revver.

Hope For A Viable Business Model

While the data is hardly conclusive, with only 1,114 people responding, the fact that the majority of this number are monetizing is a sign that many certainly see it as a viable business option.

The CPM rate of $12 also shows that those who are doing it are doing it well, which should give hope to those who haven’t yet tried to monetize their video content but are looking to do so in the future.

The question over monetization won’t be answered quickly but by research such as this survey, we can at least start to get a picture of the possibilities for serious money to be made in the future. Whether Google can turn this in to a viable model for YouTube is another matter.

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Computers and the Web are becoming an increasingly important part of how television shows are being distributed. Whether it be via legal methods such as Hulu and Joost, or illegal peer-to-peer sharing of torrents, the trend is on the rise.

Online Video Up

We’ve already seen online video viewing as a whole grow massively over the first half of 2008, with comScore data for May showing 12 billion videos were watched in the US alone.

This figure obviously includes all forms of videos, with YouTube being the highest percentage of views. But even in the niche of episodic content, especially prime time shows such as Lost and Heroes, the figures are stacking up.

Prime Content On The Web

According to new research by Integrated Media Measurement Inc. (IMMI), as much as 20% of prime episodic content is now watched via the Web, and this is instead of, rather than as well as, being watched on traditional television.

Television networks keen to keep their advertisers interested will insist that online viewing of shows is only really in addition to television watching, with people only watching repeats or certain episodes they have missed.

Instead Not In Addition

The latest consumer research says otherwise though, with IMMI claiming 50% of online viewers seeing the Web as a direct replacement to watching television.

The other 50% is made of 31.3% who use streaming episodes as catch-up, with the other 18.7% streaming episodes to fill in full or part episodes they missed on TV, or re-watch something they’ve already seen.

Prime Demographic

IMMI also looked at the demographics of people who choose to watch online. The age group most likely to use the Web for TV viewing is 25-44. They are also likely to be female, caucasian, college-educated, and earning between $40K and $80K a year.

While this data is in no way categorical, it does at least signify a move towards people viewing the Web as an increasingly viable option for watching television shows on, often at the expense of sitting in front of the goggle box.

Heads In The Sand

TV networks can now choose to either stick their heads in the sand and do nothing, or embrace the technology by making their shows accessible on the Web. As usual, the sticking problem is how to make money by doing this.

The only real options are from advertising or charging for content, neither of which are particularly popular with viewers. Until a solution is found, BitTorrent trackers will continue to rule the roost.

[Hot Hardware]

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Solutions Research Group recently conducted a study in to the state of Hulu, as reported by TVWeek. It shows the demographic who are watching, and the customer satisfaction ratings.

Struggling To Gain Traction

Most importantly, it seems that despite being heavily promoted, the majority of Americans still don’t know about the Fox/NBC-owned Hulu, with just 15% of the online US population having ever heard of the site.

The average age of a Hulu user is 32, while two-thirds are male. Interestingly, their average income is 22% higher than the US average.

High Satisfaction Rating

Hulu users gave the thumbs up to the main thrust of the site, being able to watch an old episode of a classic TV show, and being able to watch recent episodes they may have missed. They also love that it’s free, naturally.

The only real complaint is that only the most recent episodes of certain shows are available. Personally, my complaint is that Hulu is only available in the US, meaning I can’t even sample the offerings.

The company has published its first Visual Networking Index, (PDF) and the results show that while video currently already accounts for a quarter of all Internet traffic, that figure is set to rise year-on-year until it surpasses 50% by 2012.

Video To PC and TV

Video to PC traffic will make up the majority of this figure by that date, but video to TV is also expected to rise massively over the same period, which gives set-top-box makers a great opportunity to be at the forefront of a rapidly growing market.

These sort of numbers make it even more important for TV studios, networks and programme-makers to get their plans in place over how they are going to utilise the popularity of the Web or they risk losing out altogether.

Changing The Landscape

As Om Malik also states in his analysis, these figures make the recent push for metered broadband moves by U.S. ISPs all the more ominous, as that could completely change the landscape of online video.

What is clear is that we are still just at the start of a very big push for online video to become the dominant force. The future is Web-based, and both ISPs and TV companies need to realise that before its too late.

With YouTube leading the way, video viewing over the Internet is growing around the world, and according to a new research paper, that growth is going to carry on and even speed up over the next five years.

A Billion Viewers

A paper called Over-the-Top Internet Video Strategies for Carriers by ABI Research predicts a quadrupling of viewers with at least a billion people accessing video over the Web by the year 2013.

Senior analyst Cesar Bachelet said:

“The rapid expansion of broadband video creates opportunities across a number of market sectors.”

“A wide variety of actors aim to gain a share of this fast-growing market: not only content owners such as the BBC and NBC Universal, and Internet portals such as AOL and Yahoo!, but also a range of new entrants including user-generated content sites such as YouTube and Dailymotion, broadband video sites such as CinemaNow and Lovefilm, and Internet TV providers such as Apple and Zattoo.”

The paper goes on to explore how traditional TV networks will have to choose an if you can’t beat them, join them kind of approach or risk losing a huge slice of the television market.

Bandwidth Costs

I still think there’s a big problem in that ISPs are going to be unwilling or unable to soak up the bandwidth costs associated with streaming television services. The BBC have already been criticised for costing British ISPs money, and that is surely only going to get worse.

If a solution is found for that, whether by advertising or subscription charging for individual programmes, then Web video looks to have a rosy future ahead, with everyone due to climb on the bandwagon before long.

Hulu is a joint venture between NBC Universal and News Corporation which offers multiple online videos. 

As listed on their blog, while announcing the launch:

“Today we are excited to leave our private beta and open Hulu.com to everyone in the U.S.”

So what is the Hulu experience? That depends on your expectations and starting point. I’m going to start with the technical experience since that is how I approached de-constructing the site.

Speed Tests

The picture below illustrates there is a fair amount of distance between the user and the media, 12 hops with an average of 168 ms in my ping test.

I emailed Jason kilar, CEO of Hulu to inquire if they are using edge servers or any form of P2P network (since they are good at moving large files) however, he did not respond.

The speed tests I ran (East Coast, West Coast and that Middle part at 6:00am shows my bandwidth is not constrained which has me wondering why the 1280×720 HD delivery would not play without stuttering? 

The smaller size (360 or 480p) played without any problems. According to that part of the site, Flash 9 and a 2.5MB connection are the minimum requirements; processor/memory is not an issue with my workstation and I used FireFox 2.0 in my tests.

Having tested the technical quality and transport of Hulu content, both in SD and HD, I was satisfied with SD delivery and quality but unsatisfied with HD, this due to too much shuttering of the 1280×720 video, quality was good.

User Interface

On to UI. The experience was as I have read elsewhere, clean and easy to navigate. Logical with lists by; Popular movies, popular movie clips, Alphabetical, Genre and Studio.

The main player has a very clean grey on black and reminds me of the front of one of the old Sony broadcast monitors, which had pressure buttons on the front. Some of the features are worth noting, both good and not so good.

List Of Features

• Chapter points: When the user mouse’s over a pop up window appears and if you click, it plays from that part of the content or you get a spot though I have not determined if there is any methodology behind this. The pop-up windows are cute but would be better served if they were user definable for future reference/playback or for sharing with others, this does not enhance the experience in any meaningful way.
• Lower lights: very nice feature, which dims the rest of the desktop to make the player prominent, works as, advertised.
• Timer for Ads: In the upper left portion of the player window, you are informed how long until your content will resume and with a notice of limited commercial interruption, nice! Certainly a feature to allay concerns you are going to be in for the kind of commercial pummelling one gets when watching American Idol.
• Video is intended for mature audiences, both in text and with a VO: Tipper Gore would be proud.
• Details window: limited information so far but needs to be there.
• Share: Covers most of the top-level share and comment sites to reach most people in the blogosphere.
• The landing page, for Sideways as example has limited information about the cast, user feedback, etc… How cool would it have been if they had struck a deal with IMDB to spawn out to their site, or embed some of the content within the Hulu page? The irony of course is that Hulu spawns out to Amazon if you are interested in buying a film…since Amazon owns IMDB this seems like a big misstep.
• Pop-up undocked window: Good if you want to watch while multi-tasking.
• Ouch, Edited for TV and Pan Scan? Are Sideways and other titles cut down in length? “to run in the time allotted”.

Conclusions

In summary, the user experience was positive and this is still version 1.0 for all intensive purposes. I will likely use this on my pc, which I dedicated to our large screen like Netflix, which I stream to the set. 

However, most consumers do not have the sophistication to connect such devices and a simple solution would have been to work with platforms such as the SanDisk Sansa TakeTV so people can move to their large screens.

The ITV experience is getting better, an evolutionary process and Hulu gets props for what is does well, let’s see if they can lean back for a larger audience…

[Content in whole or part adapted from IPTVe and is licensed under Creative Commons, no addition derivative works may be copied from this article without prior permission from IPTVe and Web TV Wire]

The role of traditional TV is being altered on a daily basis, as consumers ready themselves for a dramatic changing of the goalposts.

The interactive television company Ensequence has recently announced the results of an Harris Interactive online survey which shows that consumers are more than ready to change the way they interact with their televisions in 2008. 

Nearly 3,000 Opinions Counted

Harris asked 2,949 adults aged 18 and over a series of questions, and then weighted the results where necessary to bring them into line with their actual proportions in the population.

According to the survey, 72 percent of viewers indicated that they are currently using their remote controls for simple tasks such as finding favorite programs using the on-screen TV guide, scheduling or selecting DVR recordings and for viewing content on-demand. 

Now consumers are ready to take their television viewing experience a leap further and they want more from their cable and satellite providers in 2008.

The Results Of The Survey

• 72 percent of those who watch reality TV shows want to interact with those shows
• 65 percent of those who watch sporting events on TV want to interact with those events
• 66 percent of viewers want to interact with commercial advertising
• 70 percent of TV viewers would consider signing up for another cable or satellite provider if they offered advanced interactivity at no extra charge
• 50 percent of those who watch drama TV shows indicated that they would be interested in interacting with those shows

Conclusions

Companies like Ensequence have a built in advantage over on-line companies as set-top boxes are already in place in people’s homes. 

The challenge for companies like Netflix, Apple, Sandisk and others is how to make the connection between content (lean forward) and viewing (lean back) as simple and enjoyable as possible.

I think Netflix is in the best position versus Apple with plans to integrate their platform into TVs, DVRs and the like from companies such as LG and others. System on chip is the answer. Apple’s plans are underwhelming and sound more like a “me too” approach. 

Despite the fact that Steve Jobs wants to get into the movie business, I doubt studio execs will feel it is their responsibility to give him a new business model.

[Content in whole or part adapted from IPTVe and is licensed under Creative Commons, no addition derivative works may be copied from this article without prior permission from IPTVe and Web TV Wire]

Hopefully we’ll be able to see in to the future, and predict the outlook for IPTV over the next year.

NewTeeVee has already came out with their list of online video predictions for 2008 and GigaOm has their list of the top five trends for the forthcoming year. 

And of course there is all of the product news around mobile and IPTV as well as content deals coming out of the CES show in Las Vegas, leaving us to ponder and wonder what’s in store for 2008?

2008 Will Be THE Year

We think this will be the year that video takes a large leap toward realizing the vision of video ubiquity, gaining traction in becoming a viable choice for consumers on all “3 screens”. 

In particular we think this will be the year of the low resolution revolution. As handsets and networks improve, we’ll see more and more content creators, syndicators and UGC sites implementing mobile initiatives to move beyond the PC and package their video for the portable, personal mobile market.  

This gives them an opportunity to extend the reach of content that they currently have and opens up other revenue streams for monetizing that content.

Transcoding And Advertising

Also, I personally believe that this is the year that you will hear transcoding and pre/post roll advertising in the same sentence. 

Operators are pushing the boundaries to monetize more and more online videos and pre/post roll advertising, although hated, is still the overall leader in revenue generation.  

This year you will see many announcements on unique applications in transcoding technologies and advertising strategies.

And Finally

And finally, here are kudos to some new innovations like SlingMedia’s announcement to release SlingPlayer for the popular BlackBerry devices, the anticipated 3G version of the iPhone and the prospect of carriers like Verizon opening their networks to any device give us early hope that 2008 will indeed be a pivotal year for Internet and mobile video.

Originally written by Brendon Mills of the RipCode Blog. RipCode offers on-demand video transcoding solutions to ease the process of re-purposing video into multiple viewing formats.

Two pieces of reliable data are now pointing very clearly to the fact that it has, and that online video has increased its market share since the strike started.

Traffic To Video Sites Has Doubled

Number one: According to the BBC, Nielsen says that traffic to some online video sites has doubled since the Hollywood writers’ strike in October turned the TV into a wasteland of reruns and unfunny late-night talk shows (although it may be stretching things to call the Nielsen figure a data point, since I can’t find a report that has those numbers in it).

Number two: A report from the Pew Internet Research project, a reliable and independent research group, indicates that almost 50 per cent of those surveyed had been to video-sharing sites such as YouTube (up from 38 per cent last year) and daily traffic to such sites has doubled in the past year. The number of people who said they had been to such a site within a day of being asked almost doubled to 15 per cent.

Two Sides To The Argument

Ever since the strike began, there has been a debate about how much of a benefit online video might get as the fresh content on television became more and more scarce. 

Some have argued that most online video is crap, and therefore the boost would likely be minimal. 

Others argue that much of what is on TV is also crap, although the production values might be slightly higher, and that the strike might help to push some content creators to remake the industry in Silicon Valley’s image.

Conclusions

I don’t know where things will end up, but I do know one thing: I am hearing from more and more “average” people — i.e., not geeks — that they are watching more video online, and that they are finding things there they can’t on television. 

The writers’ strike may be one of the forces that are pushing people to do that, but it’s not the only one. Increasingly, the boundaries between TV and online are blurring.

Written by Mathew Ingram, a technology journalist. Catch his views on the intersection between media and the web at MathewIngram.com. This post is licensed under the Creative Commons.