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The future of streaming video – four predictions for 2013

Kun Gao, Crunchyroll — Sun, 16 Dec 2012 18:30:52 +0000

Last week’s multi-year licensing agreement bombshell between Disney and Netflix was a capper to an already dynamic year for streaming media. Clearly we’re at an exciting crossroads, fueled by “make-ups and break-ups” that constantly reshape the industry. Given the activity of the last four quarters, here are a few things to look for in 2013.

Globalization of professional content

The act of taking premium content across borders to reach new audiences has proven to be a boon: It generates meaningful incremental digital dollars through subscription services; it legitimizes a content experience that previously had been dominated by online piracy; and it builds momentum for content and brand equity for the coming years.

Ironically, it is the home market that sometimes moves the slowest. While not all territories are equally profitable, content is traditionally sold in a segmented manner siloed by language and country. Being able to slowly unfragment these rights through global expansion provides scale and future upside that is worth investing in today; this de-fragmentation will continue the efforts to globalize more professional content at an increased pace.

Monetization via subscription

Subscription will continue to be the dominant business model. Viewers have demonstrated that they recognize significant value in having access to premium content across their continuingly connected digital lifestyle – and are much more willing to pay for convenience of access on devices. This month’s retail activity showed all-time highs in consumer spending towards a personal device experience. Monolithic subscription services such as NetFlix and Hulu, which generate $8 ARPU per month, will be challenged in a market where DirecTV and DISH generate on average $80 ARPU per month.

What hasn’t changed is the demand for professionally produced content, which still costs just as much to create. Today’s market data has proven that users are willing to pay top dollar for traditional Hollywood quality content – but a mere $8 a month simply isn’t enough to support creating it in the same volume as we do now. One of the ways to reach a happy medium then is through targeted channels of in-depth content.

Channels of in-depth content

Channels will become much more targeted and personalized. Over 60 years ago, broadcast television introduced channels 1-10 in the U.S., and, furthering this momentum, channelization provided channels 11-1,000 via cable and satellite in the 1980s. As this decade is earmarked by seismic technology and media changes, the next few years will be laser-focused on creating the next 100,000 channels – delivered across a mix of broadcast, cable, mobile and smart TV apps – each tailored for a set of unique lifestyles.

Do you enjoy fly-fishing, building replica battleships, or perfecting your Portuguese? The next 100k channels are all about delivering a deep and targeted experience that was previously not possible, because the audience was fragmented geographically, the high fixed costs of creating a new cable channel were prohibitive, or the behavioral targeting was not possible. Viewers of highly targeted and in-depth content experiences are more than willing to dive in and pay. These experiences are much more than simple online video delivery and make up a unique social and lifestyle experience.

Redefining e-commerce

There will be significant progress made towards a new monetization model beyond the traditional ad-supported and subscription service ones. The American household spends, on average, nearly five hours per day watching video content. As such it is one of the best methods we know for generating product interest.

However, the one-way push model also happens to be grossly inefficient. Online streaming has the opportunity to revolutionize the way products accompany content, and are ultimately introduced to viewers. The opportunities are boundless when one thinks of how awesome an experience it would be if we can realize the full potential of combining streaming video and e-commerce – a next-generation Home Shopping Network layered on top of any content. After all, what is video but a medium for the aspiration of product, lifestyles and experiences?

Kun Gao is CEO and co-founder of Crunchyroll, Inc., a global video network for Japanese anime and Asian media.

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Data isn’t just the new oil, it’s the new money. Ask Zoë Keating

Derrick Harris — Wed, 21 Nov 2012 02:31:13 +0000

People love to call data the new oil, but that might be selling it short. It’s only oil when we’re talking about pools of unrefined data like the stuff web companies collect, which has to be processed and transformed into something useful. There are certain types of data, though — especially data about consumers — that are as good as money in the bank without any work at all. And if you don’t believe me, ask popular cellist Zoë Keating.

As a bill attempting to lower the royalty rates paid to artists by streaming music services such as Pandora works its way through Congress, Keating took to her Tumblr blog last week and offered a solution that both sides should listen to, but won’t. You might have read about her stance in Billboard or ITworld already, or perhaps on Slashdot. If you haven’t, here it is in a nutshell, from Keating’s blog: “The law only demands I be paid in money, which at this point in my career is not as valuable as information. I’d rather be paid in data.”

Leaving aside the entire issue about royalties and copyright (and privacy policies), her statement is still powerful. Keating understands that in order to prosper in a world of digital music — just like in the world of e-commerce, digital publishing, you name it — information is power. The names, email address and perhaps mobile numbers of individuals listening to her music are nice, clean data that Keating could use with little to no analytic effort by reaching out to fans when a new tour is coming to town or a new album drops.

Actually, Keating noted in a subsequent blog post on Tuesday that even less-personal data can have a material impact on a performer’s bottom line. Using postal code data provide to her from iTunes sales, she’s able to plan tours more efficiently because she knows, or can make a safe assumption, that she has paying fans in certain cities.

Touring and merchandise sales remain most artists’ primary means of income, and the current royalty rate of $.0011 per play doesn’t add up fast (at least according to Keating’s math), so it’s easy to see why she — and probably many other up-and-coming or niche performers — would rather have the data that properties like Pandora almost certainly have.

And whether Keating knows it or not, the idea of using data as a substitute for money extends beyond web radio stations and musicians arguing about royalties. A couple weeks ago, I highlighted a handful of attempts to convince consumers to hand over, in exchange for cash rewards or product discounts, valuable data that advertisers can’t collect by tracking their online activity. This is data such as recent and future purchases, personal interests, your web-surfing habits and where you shop in the physical world.

Just like Keating is willing to forgo one-tenth of one cent per play (real money, even if not a lot) in exchange for data, these brands are willing to trade cash or something like it for data they don’t have to run through a Hadoop cluster and seven segmentation algorithms before they can tie it to a real person. They know they have to give a little bit in order to improve upon the status quo that’s good, but not nearly good enough for their purposes.

Previously, the notion that data is the currency of the web meant users gave away their behavior data to web sites in exchange for free services. Slowly but surely, however, that notion seems to be evolving. Maybe Zoë Keating wants data in lieu of royalties for the privilege of streaming her music, and maybe a web site wants my offline location data enough to give me a gift card worth enough that I’d hand it over. Either way, it’s all about the realization that some data is worth its weight — and then some — in cold, hard cash.

Feature image courtesy of Flickr user eschipul.

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Connected consumer third-quarter 2012

Thu, 18 Oct 2012 06:55:33 +0000

The third quarter saw many parts of the traditional media business in flux. New digital platforms that once had confined themselves to user-generated content began to invest in creating professional-quality content. At the same time, TV programmers began to wrestle with both the threat and the opportunity presented by second-screen and social-TV platforms. The period also saw the rollout of new device-based content ecosystems, red flags and red ink for traditional consumer electronics makers, and a resurgence of consumer purchases of movies. This quarterly wrap-up discusses these developments as well as offers trends and topics to watch for the remainder of 2012 and beyond.

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Cisco sees the mobile future and it’s in streaming

Stacey Higginbotham — Tue, 14 Feb 2012 13:00:11 +0000

Cisco, the networking giant, has read the mobile data tea leaves again, and it predicts that this year the global population of mobile users will switch to streaming the majority of their content from “the cloud.” This will represent a shift from downloaded and sideloaded content on their devices to streamed content, such as Netflix movies or Pandora. If you want to know what that looks like, just check out the U.S. which currently hit the tipping point in 2011 with 54 percent of its traffic coming from “the cloud.”

Cisco’s definition of “the cloud” encompasses any service that someone accesses via the web on demand and as you can see in the chart, it will shift globally from a 45/55 percent mix in 2011 to 54/46 percent. And as the years pass the content that will be streamed is likely to be video, since Cisco foresees video comprising 71 percent of all global mobile data traffic. It also sees 71 percent of traffic being streamed from the cloud, although not all video will be streamed and not all streaming content will be video.

The streaming future makes sense. Cisco’s predictions about the growth in download speeds certainly mean our networks will be capable of delivering most content without a hitch (at least on uncrowded networks). And so far, people around the world are tending to use the data in ever-increasing quantities with the average data usage by a smartphone increasing from 92 MB a month in 2011 to 1.2 GB per month in 2016.

Cisco even makes it a point to show how the current top 1 percent of mobile users, will soon be joined by more and more of the remaining 99 percent as time goes by. Cisco notes that the top 20 percent of mobile bandwidth consumers are growing their consumption almost 3 times faster than the top 1 percent. So we have faster networks, people who clearly are using their devices and a lot of video set to hit the mobile network, but Cisco doesn’t really mention a key issue looming like a cliff on the streaming horizon — pricing.

The 10.8 exabytes of data sent over mobile networks per month in 2016 come at a fairly high cost to mobile consumers. And while the average mobile data consumption is predicted to be 1.2 GB per month in 2016, that’s a global figure. In the U.S., Cisco anticipates the average mobile connection will generate 4 GB of mobile data traﬃc per month in 2016, up from 317 megabytes per month in 2011. The key for carriers will be to keep pricing slightly ahead of the demand for streaming content. My hunch is our streaming future sets the stage not for innovation in pricing like I had hoped, but a slow ratcheting up of the monthly fees just ahead of demand.

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Lovefilm lands on LG, Roku up next

Janko Roettgers — Thu, 19 Jan 2012 18:54:59 +0000

British online video service Lovefilm is expanding its device footprint to fend off Netflix, which launched in the country two weeks ago. Lovefilm’s customers will be able to access the service on LG smart TVs, according to an announcement the company sent us via email. The Amazon-owned video service is also gearing up to launch on Roku’s media streaming box once the device starts shipping in the U.K. in early February, according to a reliable source.

Lovefilm’s Instant streaming service, which the company offers in addition to DVD rentals and VOD, costs British Internet users £4.99 per month (around $7.80 USD). The app on LG TVs will also make use of the magic motion remote that some of these devices come with.

It’s unclear yet when exactly Lovefilm will launch on Roku, but it could happen as soon as the first devices begin to ship. Roku plans initially to sell its devices through Amazon in the U.K., and the online retailer currently lists Feb. 3 as the shipping date for the streaming box. Lovefilm and Roku weren’t available for comment on their partnership.

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Akamai seeks to bring UltraViolet to every device

Ryan Lawler — Sun, 08 Jan 2012 17:00:57 +0000

With the number of devices supporting IP video continues to expand, content creators are seeking ways to reach consumers on as many screens and as many devices as possible. That’s the impetus behind cable’s TV Everywhere initiative, as well as Hollywood’s new UltraViolet video format. In order to cater to these customers, Akamai is rolling out new capabilities to its HD Network for video distribution that will make it even easier for content owners to securely distribute content to nearly any device.

While Warner Bros. has spearheaded the launch of UltraViolet-enabled movie titles through the launch of its Flixster applications, the promise of allowing viewers to buy a movie once and stream or download it from multiple retailer websites or applications has yet to fully catch on. That’s why Akamai, which provides content distribution services to a number of different studios and media companies, believes it is well positioned to offer up a solution that provides an easier way to make UltraViolet movies available. Ahead of CES, Akamai is announcing that it has integrated with the UltraViolet Coordinator, which controls access to the digital rights locker and manages entitlements and other information around which movies consumers have bought.

The Akamai for UltraViolet product is designed to connect with the digital rights locker and offer up storage, security and delivery of UltraViolet-enabled digital assets. The idea is to create a common reference point that studios and retailers can point to whenever a consumer tries to access an UltraViolet title. Akamai is pitching the studios first, since they are moving quickly to make these services available.

But as time goes on, and digital storefronts from the likes of Walmart’s Vudu, Best Buy’s CinemaNow or Amazon Prime Video begin supporting the digital rights initiative, having a unified storage and delivery point will simplify access to, and distribution of, UltraViolet movies. That’s because those retailers won’t necessarily have to duplicate the process by storing and managing their own copies of the files — they’ll be able to point to those already under Akamai’s control. That could make things a lot more efficient for everyone involved.

Akamai is also announcing that it’s adding new security features to its HD network to ensure that content owners and retailers can distribute video assets to multiple devices. Akamai’s SecureHD offering provides four layers of protection, including token authorization, player verification, media encryption and content targeting. With those features in place, media customers will be able to optimize their security protection based on the capabilities of the device, while providing the best playback experience regardless of whatever tablet, mobile handset or connected TV that viewers are watching a piece of content on.

Finally, the content delivery network is simplifying the process of streaming on its HD Network by selecting HTTP as its default delivery method and integrating Adobe’s HTTP Dynamic Streaming (HDS) functionality into its product offering. As a result, customers can take advantage of HTTP streaming without having to make changes to their existing Adobe Flash workflow. The Akamai HD Network also supports Apple’s HTTP Live Streaming (HLS) and Microsoft’s Smooth Streaming protocols.

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Connected Consumer 2012: A year of consolidation and integration

Fri, 30 Dec 2011 08:01:12 +0000

Call it the year of lessons learned, if not quite bubbles burst. In 2011, several trends in the connected consumer space that appeared inexorable at the start of the year seemed disorganized by the end. What does that mean for the next 12 months? From cloud-based media storage to daily deals to the fight for the digital living room, 2012 will be a year of consolidation and integration. Both entrepreneurs and investors will figure out that many once-promising standalone business models need to be grounded on more solid, integrated platforms to create real value. Companies mentioned in this report include Hulu, LivingSocial, Netflix and Zynga. For a full list of companies, and to read the full report, sign up for a free trial.

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Getting the most out of your gift: Roku edition

Janko Roettgers — Mon, 26 Dec 2011 08:01:08 +0000

The best thing about the holidays is playing with your new gadgets – and the worst thing is struggling with your new gadgets. But fear no more: We have compiled a few key tips for new owners of the Roku media player to improve their set-up and get the most out of the device. Did you for example know that you can use your Roku as a DVR, and that there are hundreds of channels you won’t find in the channel store? Check out more essential tips below:

Setting up your Roku

One of the biggest issues that people run into with streaming media devices is a slow or inconsistent Wifi connection. Big, solid walls, microwave ovens or cordless phones can ruin your Netflix fun, especially when you are watching in HD. If you have a Roku 2 XS, I’d strongly recommend that you hard-wire the device with an Ethernet cable. And if you don’t want to string a long cord through your living room, adding a HomePlug AV device to the mix might do the trick. Check the end of this article for more details on this kind of accessory.

Unfortunately, the Roku 2 LT, HD and XD devices don’t have an Ethernet port, so you’ll have to make do with Wifi. Try to move the router closer to your TV and avoid unnecessary obstacles if you run into issues, or upgrade to a 802.11n router if nothing else helps. Also, check out the video embedded below for more advice on how to improve your Netflix streaming:

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Watching great content on the Roku

Roku’s media streamers offer access to a few hundred content channels, and hundreds more are available with a little bit of tinkering. Make sure to check out the following choices:

Netflix is a no-brainer: The video subscription service now offers access to more than 57,000 movies and TV show episodes for as little as $8 per month. Check out our Netflix tipps and tricks to get the most out of your Netflix subscrtiption.
Hulu Plus is a great choice to catch up on currently running TV shows.
Amazon now offers free access to thousands of TV shows and movies, including Showtime shows like The Tudors and Fox classics like Arrested Development, to subscribers of its Amazon Prime shipping service.
Roku also offers lots of live sports, religious services, video podcasts and other specialized content through its channel store. Most of these channels are free, but some come with subscription fees. But wait, there’s more: A few hundred additional private channels, including adult content and foreign TV networks, can be accessed through special access codes. Check out this post to learn how you add private channels, and then browse Roku-Channels.com to find all those private channels.
Roku is optimized for online content, but you can also use the device to play your locally-stored photos, music files and home videos. Only the Roku 2 XS comes with a USB port to play content from a thumb drive or hard disk, but you can play videos stored on any PC or Mac in your home network with any Roku model. Check out the video below to learn how:

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Note: The YouTube channel shown in this video is unfortunately not available anymore.

Buying accessories

Funny how good gifts make you want to buy more stuff, isn’t it? The Roku is no exception, and there are a few things worth considering:

As mentioned above, nothing beats a hard-wired connection to stream HD content. HomePlug AV devices like the WD Livewire simply use your home’s electric circuitry to stream video from your router to your Roku, which makes them a great choice for any user of the Roku 2 XS. Check out our detailed review here.
Roku’s media players aren’t just good for streaming, you can also use them to play games like Angry Birds on the big screen TV. The Roku 2 XS already comes with a motion-aware remote control, but new owners of the Roku 2 XD or HD don’t need to miss out either: Roku sells its motion remote online, albeit for a somewhat steep price of $30. So if you really want to play games on your Roku, but you don’t have the option to return the one you got as a gift and exchange it for a Roku 2 XS, this could be one way to go.
The last suggestion may be a little more for tinkerers than your average Roku user, but owners of an EyeTV tuner can turn their Roku into a DVR that works in concert with a Mac in your home network. Check out the video below to learn how:

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Plex app approved for Nook Color and Nook Tablet

Darrell Etherington — Fri, 23 Dec 2011 18:47:43 +0000

Good news for fans of streaming media who also like low-cost tablets: Plex has ben approved for sale in the Barnes & Noble Nook Store(s bks). The app should be downloadable for Nook Tablet and Nook Color users sometime within the next 24 hours, according to Plex.

The version of the Plex app that will be available for Nook devices will be familiar to Android smartphone users; it’s the same app, but the Nook Store has an additional layer of approval process for software titles. Plex has already received approval from the Barnes & Noble app review team, so it should be available soon.

If you’re new to Plex, it’s essentially a centralized media hub you can use to access content from one or more computers on a variety of devices; installing a server application on your Mac or PC allows you to specify folders to share music, movies and video from, as well as making it easy to access your iTunes music library across platforms. Plex also offers a number of web video plug-ins, simplifying the process of delivering media from a range of sources to your tablet or smartphone. Plus, it automatically transcodes various file types, so that you don’t have to convert video to watch it on your mobile device.

Plex arriving in the Nook Store is actually a big boon for Barnes & Noble and its users, since it helps leverage users’ own existing media libraries, providing access to more video and music content, an area where the Nook lags behind Amazon’s Kindle Fire(s amzn). Plex is also available for the Kindle Fire, of course, but its new presence on the Nook tablets is still definitely something users will welcome.

We’ll be sure to let you know when Plex goes live for Nook users. In the meantime, check out these screenshots of the app in action:

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VidScale aims to make TV Everywhere better

Ryan Lawler — Mon, 19 Dec 2011 13:00:06 +0000

Due to the increase in the amount of streaming video content on the Internet, many ISPs are faced with either investing in backbone hardware or trying to add intelligence into the network. It’s an even bigger problem as cable and telecom operators add TV Everywhere services, which expand the amount of streaming content that is available to their users. Enter VidScale, which seeks to make more efficient use of existing infrastructure, by introducing content delivery network and transparent caching technology into their networks.

VidScale’s MediaWarp product is a combination CDN, transparent caching and bandwidth optimization solution aimed at the cable and telco industry, as those players seek to make more content available for streaming to PCs, mobile devices like tablets, Internet-connected TVs and other devices.

That’s one reason MediaWarp was chosen by Avail-TVN, which provides multiplatform, multiscreen video services to Tier 2 and Tier 3 service providers. Avail-TVN’s white-label AnyView product is designed to allow operators to offer additional streaming content to Apple iOS, Android and Roku devices, among other devices. The technology can be used to handle both managed content from partners and unmanaged content from over-the-top streaming services like Netflix on the same server.

The founding team of VidScale comes from other telecom equipment manufacturers — most notably Blackwave, which was sold to Juniper in 2010. Now, rather than creating another hardware company, the VidScale team are focused on building a software-based solution for more efficient video delivery over IP networks. The company’s product can be deployed on any commercial off-the-shelf (COTS) hardware, meaning that customers don’t have to buy specialty servers to take advantage of the technology.

VidScale isn’t the only startup trying to solve this problem: We recently covered Qwilt, which raised $24 million in funding from Accel Partners, Redpoint Ventures, Crescent Point Group and others. And there’s the usual cadre of suppliers like Juniper and Cisco that are trying to provide more intelligent networking equipment to their customers.

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