Partnerships Profit From Gaming Consoles

By Alan Smodic

It’s no secret that online streaming content is quickly becoming the first choice for many viewers and the battle to expand that beyond the computer screen continues to build.

Microsoft’s Xbox 360 and Sony’s PlayStation 3 stand at the forefront to provide consumers with a set-top box that offers a complete multimedia experience as a gaming console, DVD or BluRay player, online content provider and social media aggregator.

Both consoles attempt to stay on top of the game, and one step ahead of the other, in this venture. But as they do, who stands to benefit the most?

A prime example of the possibilities was brought forth by Xbox last month when it was reported that the system may soon reach a deal to stream ESPN-televised sporting events, for a per-subscriber fee.

CNET gaming writer Jeff Bakalar says that setup should be a no-brainer for TV networks. “Theoretically, a TV network could reach millions of people with an Xbox Live ‘channel.’ Microsoft has sold 39 million consoles worldwide, with half of those systems hooked into Xbox Live,” he says. “With numbers like that, it’s no wonder cable companies are looking to game consoles as another outlet.”

The content provides added value to the hardware for consoles like the Xbox 360, PS3 and Nintendo Wii, which benefits each company. For Xbox, it also allows the company to charge a premium for the extra content such as its current setup with Netflix streaming movies.

On the other hand, the content creators are able to reach another mass audience without much effort, thus displaying its ads to many more eyes.

Currently, however, the top streaming site, Hulu, limits its video sharing, which was not always the case. Hulu had been made previously available through applications like Boxee (a media-aggregator application for Windows, Mac or Linux) or the PS3’s browser. But that fact is leaving a number of people perplexed, including the U.S. Government, which asked NBC Universal CEO Jeff Zucker about the decision during a recent congressional hearing. Hulu is a joint venture between NBC, Fox, ABC and others.

Zucker’s response to the questioning didn’t clarify a thing. “This was a decision made by the Hulu management to, uh, what Boxee was doing was illegally taking the content that was on Hulu without any business deal. And, you know, all, all the, we have several distributors, actually many distributors of the Hulu content that we have legal distribution deals with so we don’t preclude distribution deals. What we preclude are those who illegally take that content,” he says.

Boxee issued a response almost instantly, stating that it uses a browser to access the content, just as anyone with a computer or PS3 was already doing and wasn’t stealing a thing. It even offered to speak with Zucker and noted that Hulu should be taking advantage of Boxee’s userbase.

“There are now close to a million people using Boxee,” Boxee says in a statement. “When they watch shows from Hulu they are watching the ads and generate real revenues to NBC. We hope we will be able to work with NBC and offer more content and value to Boxee users as we believe a good number of our users will also be willing to pay one-time or subscription fees to access NBC’s content.”

Boxee, in addition to its computer software, has plans to release its own set-top box later this year, which will provide direct competition to the gaming consoles — minus the gaming factor.

The high number of consoles already sold (a reported 60 percent of American homes have at least one console), though, gives the PS3 and Xbox 360 a nice headstart. But, as Hulu is showing, providing that content can be tricky.

“We want to offer the best entertainment on Xbox Live in as many countries as we can,” Xbox corporate VP John Schappert told G4 at E3. “But it takes a while to get these deals done, it takes a while to form these relationships, form these partnerships and find a great experience for [all] of our partners.”

In addition to streaming other videos, both Microsoft and Sony have offered their own direct-to-console shows - The Guild, which airs exclusively on Xblox LIVE; and The Tester, a free reality TV show that will debut on PlayStation 3 and PlayStation Portable this month.

The success of these two ventures for the gaming giants opens another realm of content distribution. With that in mind, they both are poised to serve as a be-all, end-all box-top system.

That success, however, may lie with whomever secures the better partnerships first and that answer could come soon enough.

YahooTV: Paving the Way to an Open IPTV?

By Sheila Shayon

IPTV is spreading, slowly, across the globe. By year end 2009 the universe of homes that were receiving IPTV services was 26 million. By year end 2014 that number is expected to reach 70 million worldwide.

The greatest growth in IPTV is in countries with established high-speed Internet technologies including the Netherlands, South Korea, Hong Kong and France. As technology progresses, still developing countries like China will catch up quickly in subscription numbers.

Dashboard widgets first hit the market with Mac OS X Tiger. They are very small applets designed to convey quick bites of information or a quick change of setting. Some familiar forms of widgets include clocks, event countdowns, auction-tickers, stock market tickers, flight arrival information, daily weather. A.k.a. gadget, badge, module, webjit, capsule, snippet, mini and flake, Web widgets most often use Adobe Flash.

Last year, Yahoo made the bold promise that Internet TV widgets would be the major phenomenon of the year. Launched as Connected TV in 2009, Internet-enabled widgets allow viewers with compatible TVs to access Twitter, Facebook and certain news feeds.

That prediction did not materialize, but Yahoo has now upped the ante and launched a new TV widget chip ready for installation in set-top boxes. Having entered into a deal with chip manufacturers MIPS and Sigma, Yahoo widgets can now be installed in a range of hardware. Yahoo widgets enable Internet-connected TVs access to online video with one or two clicks on the remote. The widgets show up as snippets in a “dock” at the bottom of the TV screen or via a widget directory in a panel at the left of the screen.

Yahoo’s latest partners include: Netflix, VUDU, Amazon VOD, Showtime, CBS, CinemaNow/Blockbuster and video catalogs from FrameChannel, Brightcove, Zinc and 1Cast. Previously available only on newly manufactured HDTVs, a new device that will carry Yahoo widgets was introduced at CES: the ViewSonic media server, VMP80. Yahoo’s Widget development kit is now publicly available.

It seems as if Internet-ready TV manufacturers are no longer controlling the Web-surfing experience — and Yahoo has opened the doors.

Sheila Shayon is president/founder of Third Eye Media, third-eyemedia.com, multimedia production with core competencies in broadband production, creative design and execution, and social media. Shayon has several decades of multimedia experience working for companies like Time Warner Cable and Home Box Office.

Exclusive Content No More: IPTV Free Market Opens Floodgates

By John Greaves

Exclusivity in IPTV was once standard industry practice. Device manufacturers could differentiate themselves from their competition a la the Xbox 360 deal with Netflix and people who purchased a device were potential customers for content producers. “Content companies traditionally made money by controlling distribution,” says Rob Green, senior vice president of business development for Imagine Communications, which serves the traditional HDTV and SDTV digital broadcast markets as well as emerging areas such as VOD, Internet Video and IPTV. “In the past you had to sit in front of the TV, you had to buy newspapers to get news. Companies tried to continue this model because it’s very profitable.”

However, the free market abhors exclusivity. FierceIPTV recently reported that French Telecom’s Orange has been given the thumbs down because of its anti-competition approach to on-demand content. It’s debatable how that affects the U.S. market but indicators show companies are copying Netflix’s decision to court both Microsoft and Sony.

This isn’t necessarily bad for the consumer or for business. Boxee, which is currently the only open source platform of its kind, has been very successful with the open model and according to Andrew Kippen, vice president of marketing, feels no pressure to revert to the traditional approach. “You’re able to get much more content to your users and much more quickly. Certainly we do have agreements with providers like Netflix, Pandora and Major League Baseball to access their content on Boxee, but what we’re able to do is bring in content from smaller independent sites [that] also have great content,” Kippen says.

Although Boxee has chosen complete openness, Green says the immediate future will feature either short-term exclusive agreements or what he calls licensing agreements.

“You have WiMax, cable boxes, modems, IPTV, DSL - so many of these network types and they all need content. Content companies have started to do far less exclusive agreements and far more licensing agreements for different devices. If you do see exclusivity it’s usually a short-term agreement almost from a promotional standpoint,” Green says.

These short-term agreements and licensing agreements can lead to intricate relationships among the industry players. For example, Amazon is the exclusive supplier of the Moxi HD DVR. Amazon also provides its video-on-demand service to Yahoo-equipped TVs made by various manufacturers. Yahoo, meanwhile, has also announced it will make BrightCove available on Yahoo-connected TVs, which compete with Roku and Boxee. Amazon the retailer competes with Wal-Mart, which is buying Vudu — a similar business to Boxee (but is more of a video rental entity).

Insiders say this is simply the free market operating the way it should in response to market pressure. “People are trying to cram functionality into devices without increasing cost. I’m a big believer that we’re going to end up in the space where everyone will have access to the same content,” says Keith Kocho, president and founder of ExtendMedia, which provides services that enable content providers and distributors to create, deliver, manage and monetize online content offerings over many devices. “I think when you turn your device on there should be any number of icons,” Kocho says.

Kippen agrees. “The goal for us is to be the OS that runs your living room whether we’re on a TV, set top box, or game console; we want to work with all those manufacturers. We want you to be able to buy a Sony TV and have Boxee installed on it,” he says.

According to Kocho, the trend is toward a market where price and value to the consumer will be how companies set themselves apart. “How you present a search engine and user interface to enable the user to find what they want, bundling content and what you have to offer from a price point and how it can be delivered to other devices you have will be critical to help users differentiate between your service and others,” Kocho says.

Providers will likely differ on how to accomplish this due to cost and the need to protect their intellectual property. “Most of these projects are proprietary so what Google and Yahoo are doing is different than what Boxee is doing,” Kocho adds.

Industry experts predict the two hotly contested areas will be consumer living rooms and mobile devices with monetization at the heart of what providers offer and how.

“I suspect that’s what’s going to happen is all of these guys want to aggregate the user experience in the living room and they will want to bill for it. They’ll want to upgrade the customer from what is a free service where they don’t have much participation in advertising revenue to a premium content,” Kocho says.

An early example of this is Boxee’s new payment platform that will enable users to purchase content online. Kippen says Boxee plans to pay for this by collecting a percentage of the payment for content. This is in addition to its planned offering that will attempt to link social networks with television viewership. “We’re building a new feature so you can pull information from social networks in to Boxee. You will be able to come home and see what your friends are doing on your TV,” he says.

Despite the furor over streaming content, Kocho cautions that no one should write off traditional providers. “I think the main thing from a strategy point is I don’t think anyone is going to wake up tomorrow and cancel their cable subscription, there’s a whole lot of technical reasons that won’t happen, but we’ll see companies like Boxee and Netflix start to erode that,” Kocho says.

Green agrees. “I think consumers want the content they want, how they want, where they want it. What system that delivers that [content] I don’t think they care - whether it’s streamed or pre packaged in devices. The trend is that there will be more avenues, more devices and more opportunities to get content,” he says.

DECE and Disney Race Toward Universal Video Standards

By Barbara Gengler

In the race to take the guesswork out of digital distribution of films, two advancements have been made public that will allow consumers to buy movies and other digital content once and play them almost anywhere on any type of device.

The advancements result from efforts by the Walt Disney Company and the Digital Entertainment Content Ecosystem (DECE) consortium.

Disney, which at this time is the only major Hollywood studio not a part of DECE, rolled out a technology called KeyChest that would allow consumers to pay a single price for a movie or TV show and then access it from the Web, iPhone or on-demand cable services.

Disney is planning to deploy the technology before the end of 2010 as it is pretty much complete. Disney says KeyChest will neither be a Disney-only venture not will it be governed by Disney.

“As for partners, we continue to engage in discussion with a number of companies across various industries,” says Disney spokesman Eric Maehara.

According to Maehara, KeyChest does not compete with DECE as both technologies aim to allow people to watch the content they purchase on any device they own. KeyChest is not a competitor to DECE rather it can work with it.

“It is our understanding that DECE is developing what is commonly known as a format/ecosystem,” he says. “KeyChest is not a format nor an ecosystem. It is an interoperability solution that will empower formats and ecosystems to work together.”

The aim of KeyChest is to create widespread adoption of standards for digital media based on existing Digital Rights Management (DRM).

DECE, on the other hand, is a coalition with support from various industries involved in digital entertainment. The system will provide a new way for consumers to share their purchased content on a number of devices in the home or by streaming them over the Internet to other gear such as cell phones or laptops.

Twenty-one companies joined DECE in 2009 including Adobe, Cox Communications, Motorola, Netflix, Nokia and Tesco bringing the total to 48. Philips Electronics, Sony, Hewlett Packard and Cisco Systems are among the group’s founding members.

Surprisingly missing from the group is Apple, a key player in the rapidly growing world of digital distribution, although it is still possible the company may one day join.

“DECE has taken a significant first step toward creating an open market that will shift the digital distribution model and make ‘Buy Once, Play Anywhere’ a reality for consumers,” says Mitch Singer, president of DECE. “Our ultimate goal is to take the guesswork out of buying, downloading and playing digital entertainment.”

The cross-industry initiative revealed an agreement on a Common File Format, an open specification for digital entertainment, which will be released in the first half of 2010; approval of five DRM solutions that will be DECE-compatible and a cloud-based authentication service called Digital Rights Locker that allows consumers rights access to their digital entertainment.

The five DRM solutions, which will ensure content can be played back by streaming or downloading on a variety of services and devices, include Adobe Flash Access, CMLA-OMA V2, the Marlin DRM Open Standard, Microsoft PlayReady and Widevine.

DECE has also selected Neustar to provide a digital rights locker that will authenticate rights to view content from multiple services, with multiple devices and manage content and registration of devices. DECE says devices that are DECE-compatible may be available to consumers in 2011.

While there are still challenges ahead, the pace is expected to step up significantly and both services are expected to go live before the end of the year.

The Pros and Cons of Data Streaming

By James Zipadelli

Watching streaming video on a mobile phone or Internet-ready television continues to be perfected and is a trend that will continue. It’s a big win for the consumer, Akamai Technologies Suzanne Johnson says, because “Consumers are dictating when they want to consume content, where they want to consume content and on what device.”

Benefits of streaming
“The most exciting thing that has come to mobile audience is live video,” Johnson continues. “Not only can you watch clips on demand but broadcasting live events to your phone, so it’s almost like mobile TV. Apple has built in their OS to do this type of video. Akamai has built a service that allows content providers to use our servers and our network to deliver videos to the iPhone.”

Johnson says the iPhone has developed technology to make video accessible though carriers. “The iPhone has really opened it up for video,” Johnson says. “Content owners are excited to put content on the iPhone. Apple has introduced a new technology called adaptive rate technology. Because the technology fluctuates, you get three or four different stream rates and the iPhone is smart enough to play each one. Not only have they done what they’ve done with form factor of the device, but they’ve also introduced new technology to ensure playback experience is optimal, called adaptive bit rate streaming.”

Cyle Gage, a developer for Emerson College, also says there are several benefits to streaming. “One of the benefits of streaming is that it can automatically determine which quality is best to stream to the end user, creating a more seamless experience,” Gage says. “While streaming usually requires more disk space for varying qualities of files for streaming, it allows for users to view content on their own computer that would normally require a TiVo or a DVD to watch. Thanks to the advantages of streaming, sites like Median could be created to securely allow students at Emerson College to share their work under protected conditions, and we can watch movies over Netflix without having to rent the physical media.”

Challenges of streaming
“For mobile devices, the biggest challenges are still network quality and inconsistent network coverage,” says Bob Mason, chief technology officer for Cambridge-based Brightcove. “With Internet-connected TVs, there’s no standards on how to connect the video streaming services to the TV. Each manufacturer has a different process. If you’re interested in the Yahoo! TV Widget, they’re trying to create a consistent platform for connected Internet television. The issue is that not all TV manufacturers support Yahoo!’s platform yet.”

Emerson’s Gage says academic institutions have to consider copyright protections, licensing and fair use limitations. “The traditional method of progressively downloading media as the user watches it is easily exploitable and has never been a viable option for large distribution companies that demand their work be strictly copyrighted and protected,” Gage says. “Likewise, it has never been an adequate solution for academic institutions, since the limits of copyright and fair use are still very uncertain. Streaming makes it much more difficult for the end user to capture and save what they’re watching, which is why services like Netflix, Hulu and even more independent sites like South Park Studios, stream their protected content over the Internet rather than allow it to be viewed on a site like YouTube, which does not stream media.

“The challenge of streaming is putting in place those security measures beyond streaming itself, i.e. encrypting the stream so only certain players can play it, or making the website inaccessible to the public (like Netflix). Another challenge is having to deal with the wide range of users’ bandwidth. South Park Studios, for example, has three different streaming quality automatically-switched options depending upon the bandwidth available to the user, and each setting changes the clarity of the streaming picture. Typically with normal progressively downloaded videos like on YouTube, the end user merely downloads the video as fast as their bandwidth allows, which may mean waiting for the little progress bar to fill up before you can watch the movie. YouTube allows you to download a higher-quality version, but this is a choice on the user end.”

Brightcove’s Mason adds, “For most content owners at this stage, there are not many technical challenges they have to work through. An online video platform like Brightcove can allow a simple turnkey solution for media companies to do online streaming directly to consumers.

All experts agree that the benefits of streaming outweigh its challenges.

The War Over White Space: FCC Gets Involved

By John Greaves

Armed with a congressional mandate and stimulus funds, the FCC is working on a National Broadband Plan to ensure the digital media technology industry has sufficient broadband to spur economic growth. The FCC unveiled a sneak peek on Dec. 17 of what it will report to Congress by the Feb. 17, 2010, deadline. Applause was not deafening.

Although Mark Wigfield, the FCC spokesman for the National Broadband Plan says, “I think everybody thinks it’s a good idea to look at who’s not getting service and figure out ways to get it to them,” not everybody seems to agree on how to achieve this goal.

Wigfield says the issue is a critical one, because an explosion of mobile devices and apps for those devices is exponentially draining the available broadband spectrum. “The International Telecom Union said we need 760 - 840 MHz of broadband. Right now we have about 500MHz and we’ve got only about 50 MHz in the pipeline,” Wigfield says. Typically according to an FCC presentation it takes about six to 13 years to release more spectrum.

Tech expert Emily Nagle Green agrees. “Appetites for broadband in both wire line and wireless networks are booming. But that’s been the story since the very dawn of digital networks — demand cyclically threatens to swamp supply as we find new ideas for using the network,” says Green, who is author of ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business and CEO of the tech research and consulting firm the Yankee Group.

The National Broadband Plan seeks to expand infrastructure through the Universal Service Fund, which subsidizes rural phone service and low-income consumers while looking for ways to maximize our current available spectrum. That means reallocation of unused spectrum and possible channel sharing among broadcasters. There is some agreement on government subsidy for infrastructure expansion but broadcasters are drawing a line in the sand over the last two items.

The National Association of Broadcasters (NAB) and the Association for Maximum Service Television (MSTV) say taking away spectrum to give to wireless ignores the public service aspects of broadcast. Quoted in Broadcast Engineering, the associations say, “core public interest goals, like providing local news, emergency information, universal service and educational programs, must be taken into account.”

Another issue is the hefty cost of the recent switch to digital programming. “Consumers have spent more than $25 billion in HDTV receivers and more than $2 billion dollars - subsidized by government coupons - on DTV converter boxes. Additionally, broadcasters have invested billions in converting their infrastructure to support DTV,” say the NAB and MSTV.

Nevertheless, Wigfield says the FCC isn’t taking away spectrum. “Nobody is talking about taking away spectrum from TV, we want to find out how they can be fairly compensated for spectrum they’re not using.”

Industry experts say statistics show that broadcast is no longer the major supplier of TV programming. “Only about 14 percent of households with TVs get TV from over-the-air broadcast,” says Rick Rotondo, chief marketing officer and co-founder of Spectrum Bridge, a company that seeks to make spectrum available and productive. “Even that 14 percent may be overstated, because if you take total houses with TV, subtract out those who get TV from cable and satellite, those who get it over the Internet and those who use their TVs only for DVDs and gaming you might get a lower number,” Rotondo adds. “Broadcasters have been fighting making white space available for years because they’re afraid of interference, now since the FCC is talking about taking it, thought leaders in the broadcast industry are saying let’s embrace it.”

White space can be an important rural solution for the shortfall in middle mile infrastructure. Rather than physical lines connecting local nodes, towers and Telco back offices to the big network, Rotondo says the city of Claudville, Va., used unlicensed white space to fill in the middle mile, which actually led to higher speeds than neighboring areas.

Unfortunately, unlicensed white space is more prevalent in rural areas than urban ones. So while white space can help solve the problem of adding access to places that do not currently have it, it doesn’t address the high urban demand for more spectrum. “If you look at urban areas there are more TV stations using more parts of the spectrum but also more mobile Internet usage such as iPhones,” Rotondo says.

To address this issue, the FCC is investigating the feasibility of increased channel sharing. However, entities such as Occam Networks, a rural broadband access provider, are concerned about the customer service implications of channel sharing. “The issue we see is, if we have one station and it’s corrupted, I know where to go for help,” says Russ Sharer, VP of marketing for Occam. “Sharing bears with it the burden of better digital tools to see who’s at fault when there is a problem.”

Industry players are wary of stifling private sector motivation to expand and improve. “In particular in the US due to the apparent causes of the economic crisis, we seem headed for more regulation than I personally think is healthy,” Green says.

Sharer agrees. “We need to design an economic model that makes the networks want to get involved. What happened with Verizon’s FiOS is a great example of how it could work,” Sharer says.

Rotondo also points out that wireless providers should be spectrum efficient. My iPhone automatically switches to Wi-Fi if I’m downloading something that’s bigger than 10MB,” he says. “I think Verizon is starting to realize the savings of using Wi-Fi where available instead of relying just on their broadband network.”

Everyone interviewed by DMB agrees it’s past time to address this issue. “At the highest level Occam believes we’ll all communicate in two ways, antenna and fiber. Anything that makes that antenna more effective and encourages deployment of more fiber is good,” Sharer says.

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