Tuesday, September 30, 2008
AT&T's Total Home DVR Service Expanding Rapidly
- Central Texas;
- San Diego;
- Los Angeles;
- Dallas-Ft. Worth; and
- St. Louis.
Tracking Multi-room DVR Deployments
There was an interesting note on their blog about Cablevision's plans to rollout its RS-DVR feature in 2009. An Associated Press report indicates that Cablevision will offer 160 GB of storage per home for this feature. One key benefit to deploying a network-based DVR is that it eliminates the need for the MSO to deploy more expensive set-top DVRs (the article puts their cost at $400). According to another article, Cablevision expects to save about $100 per subscriber that uses the RS-DVR, and officials there have noted that RS-DVR will become a de facto multi-room DVR, as the programming will be available "at every outlet."
Hmmm. We've been writing about multi-room DVR implementations for some time on this blog, but it looks like these solutions are about to take wildly divergent paths (in-home storage versus network-hosted storage), leveraging the strengths that both the telcos and the cable operators have (telcos deploying home networking; cable operators ramping up video-on-demand). What appeared to be a clean win for home networking chipset vendors - particularly those targeting cable providers - may wind up not being such a big market after all.
Wake Up My Phone? It’s Asleep?
Amazon Corrects Unencrypted Content Problem
IGA Worldwide Signs Activision
Rumor says that IGA Worldwide paid a handsome upfront guarantee to EA in order to strike the exclusive deal. Neither companies has confirmed that. However, if the rumor was true, the new deal with Activision probably carries similar terms.
With both EA and Activision in its backpocket, IGA will aggressively pursue other major publishers. Double Fusion, which has Ubisoft, 2K, THQ, Midway, Eidos as clients on the PC platform and a partnership with Sony for advertising on the PS3 platform, must be feeling some pressure now. Although the company has diversified into casual games and won several key clients on the PC platfrom, including NHN and NCSoft, core console games remain important. Double Fusion has to make a couple of big announcements of its own to prove it's still a viable competitor on the PS3 platform.
Monday, September 29, 2008
ChinaQ based on OpenSIM?
I've also downloaded the client and visited the world. When I was there, it was totally dark (presumably night in China) and the world feels very much like Second Life in terms of aesthetics, features and functions. I had a conversation with some of the industry insiders in China, and they told me that ChinaQ seems to be built on top of OpenSIM. There hasn't been any confirmation or denial from Shenzhou Hengji about this. It makes sense given the similarity between ChinaQ and SL. Also, there have been user reports saying that when an error occurs in ChinaQ, the error message says Second Life.
Some experts in China pointed out the limitations of Second Life based world in China. They told me that the bandwidth in China right now has difficulty in supporting the Second Life streaming technology, which is bandwidth hungry.
Labels: Chinaq opensim
Sprinting ahead with WiMAX
If Sprint can successfully pull off the WiMAX launch in Baltimore, it would put the feather in its cap and help to silence the skeptics. What’s even more important, it will keep it from loosing the valuable 2.5GHz spectrum. Perhaps this is why the target city for the first major rollout is Baltimore, Washington DC’s (and FCC’s) back yard.
Baltimore has several other advantages as the launch city, positioning Sprint’s Xohm for success:
•Great scenario to build out a mobility play. A major argument against WiMAX is that it is a poor mobility solution. With WiMAX deployed in Baltimore, mere 40 miles away from Washington DC, deploying WiMAX in DC by the end of the year (as scheduled) would create a sandbox for Sprint to experiment with mobile WiMAX while lighting up another major metro market.
•Good balance of deployment cost and business mix. The cost of deployment in Baltimore would be lower than in many other major urban centers, such as Boston, New York or Philadelphia. Meanwhile, Baltimore has sufficient number of businesses and universities to provide Sprint with vital first customer wins.
•Baltimore is not a focus point for the 3G guys. Mobile broadband was born as a business service, so US major business center, such as New York, Boston and Philadelphia are well covered by 3G networks and have very high penetration of 3G services. They represent the bastions of entrenched 3G customers, vs. Baltimore, which poses a softer target, especially at the $30 price point.
Despite these advantages, Sprint’s team has a long, uphill battle ahead. The company has a cash reserve for about 12-18 months. The 3G carriers use their successful voice cash cows to fund buildouts of their 3G networks. Sprint doesn’t have that luxury. The company is cash-flow negative. It is rapidly burning through the cash it raised from its partners: Comcast, TWC, Brighthous, Intel and Google.
In addition to financial difficulties, at least for the moment, Sprint is at the technological disadvantage. The 3G carriers have older, 2/2.5G networks built out and most of their devices are backwards compatible. Thus when iPhone looses the 3G signal, it can continue using a slower, but reliable EDGE signal and stay connected. Sprint’s WiMAX doesn’t have that luxury. Unless a CE manufacturer embeds both a WiMAX chip and a cellular broadband chip into a device, once the customer is out of the WiMAX range, s/he is disconnected. Although in future CE devices, this flaw will likely be resolved by allowing consumer to fall back to 3G services when out of WiMAX range.
TZero Technologies and UWB for Consumer Electronics
To date, TZero has two announced products:
- In February, TZero announced that Hitachi was using its UWB solution for a line of Ultra Thin (UT) HDTVs. Hitachi has removed the tuner component for these TVs, making them very slim.
- At the CEDIA show, Gefen announced a Wireless for HDMI Extender using TZero's solution. This product is positioned as a cable replacement solution that allows AV devices such as Blu-ray players, AV receivers, and televisions to link via high-quality connections but without the HDMI cables themselves.
As we look at the new wave of wireless and wired solutions for high-definition video streaming, Gefen will be an interesting company to watch. They've hedged their bets in the wireless HDMI space, showing the aforementioned TZero product as well as one from AMIMON (WHDI), a 60 GHz technology. Furthermore, they use Pulse~LINK's proprietary algorithm for an HDMI-over-coax extender. This can distribute an HDMI signal 300 meters.
AT&T dishing it out to DISH
Security flaw allows Amazon.com video on demand content to be copied
My advice? To those who might want to stir up a little trouble on the Web and actually serve the greater good, please join this guy in picking on those guys running those Nigerian bank scams.
What is Paramount Thinking?
Upon reading the news, the first question in my mind was: “What is Paramount thinking?” As if reading my thoughts, I found a quote from Thomas Lesinski, PDE’s president, discussing large amount of experimentation with content length online and how people flock by the millions to watch long-form content on sites like Hulu and Joost.
Let’s consider some of the most prominent examples of aforementioned experimentation:
•Broadcast and cable networks airing linear TV shows on the web. Shows such as The Office and The Simpsons are readily available on sites like Fox.com and Hulu.com. These shows are not original, however. They have been repurposed from linear TV and linear advertising paid for them.
•Content owners creating original, short-form content exclusively for the web. SciFi channel, for example, has been releasing original 5-minute-long webisodes of Battlestar Galactica online to explore plot off-shoots and keep audiences engaged with the show between seasons.
•Producers releasing films online instead of directly to DVD. Movies like Incubus and Waterborne premiered online, instead of in the theater, to build awareness prior to movies’ release on DVD.
Really interested readers will notice that all of the above combine original, short-form content or repurposed online long-form content. None of these attempts to distribute original long-form content online. There is a reason for that and we will explore it in a minute.
Meanwhile, Paramount itself has experimented with online video, releasing Jackass 2.5 online in December of 2007, in partnership with Blockbuster. The movie has been dubbed the first feature-length movie released online.
The appeal of feature-length content online is easy to see:
•Won’t cannibalize linear audiences. A major issue with repurposing linear TV content online is the fear that viewers will opt to watch online, instead of on linear TV, fragmenting linear audience and draining advertising revenue from linear channel. Original web content is not available on linear TV and thus can’t cannibalize linear audiences.
•More premium inventory. A problem with the short-form content is the very small amount of space to insert advertising. Online video still relies predominantly on pre-rolls for monetization. Users are willing to tolerate a few pre-rolls for movies and TV shows, but not for the 5-minute clips. The most egregious offenders insert 1 30-second ad per clip. Average ad insertion rate is 1 ad per 2-3 clips. By comparison, a 2-hour-long feature film will have space for at least 16 ads (assuming 1 pod every 15 minutes and 2 ads per pod).
So, let’s take these benefits and add two Hollywood directors specializing in action flicks and internet shorts. Is this a match filmed in Hollywood Heaven? I don’t think so.
First issue: monetization. There still isn’t a business model for profitable online distribution, especially primary distribution. Almost all of the professional video served online is repurposed and has been paid for through linear windows, including theatrical release, pay-per-view, etc (side note: Kurt Scherf has an excellent report on the topic: Internet Video, Direct to Consumer Services).
Economics of Jackass 2.5 do not apply. The movie was comprised mainly of unreleased Jackass 2 content which has been paid for by linear release of Jackass 2.
To be profit-positive, a movie released exclusively online would have to be one 2-hour-long commercial, have to be released as a pay-per-view or would have to be the lowest-cost Hollywood production known to human kind. None of these options position the movie for success.
Second issue: PC is a secondary screen for the long-form content. Bulk of online viewing of long-form content occurs because viewers want to catch up with a missed episode of a linear show. Even in this instance, the market is TINY. Hulu, one of the most popular full-length programming distributors only clocked 6 million monthly visitors in September of 2008, according to Quantcast.
Bottom line: the internet is not ready for first-run, feature-length, professional content. Neither the audience preferences nor the business models are there for success. If I were Thomas Lesinski, I would focus on two things that internet is good for:
•Augmenting linear revenue with repurposed content (a-la Hulu, etc)
•Augmenting viewer experience with short-form content that markets a show prior to linear launch or keeps viewers engaged with the show while the linear component is on the hiatus (a-la SciFi’s Battlestar Galactica).
Turning your PC into a TiVo
TV recording on the PC has been available with other products for years (notably, the Media Center solutions from Microsoft), but this marks the first time that TiVo itself will be available for use at the PC.
We have some interesting data on Media Center use for television recording thanks for our recently-completed TV 2.0: The Consumer Perspective study (a study of consumers in broadband households in Canada and the U.S.). In the U.S., for example, the percentage of Media Center PC owners who are watching/recording TV programming is 11%. This jives with the estimate that only about 10% of Media Center systems are tuner-equipped. Also, if these tuner-based systems are configured similarly to how I've got mine set at home, many of them will no longer be able to record or watch TV. Verizon has already switched all of its programming to digital, so my Media Center is useless for watching or recording TV programming unless I get a digital converter. That seems like a bit much to go through, so we'll be depending on our DVR, VoD, and Hulu now for time-shifted TV viewing.
In terms of the opportunity for a PC-centric TiVo product to successfully penetrate certain markets in Europe. Although the product is initially positioned for the U.S., Canada, and Mexico, I think that Europe could be an interesting fit, given Nero's strong German presence and the ability for non-service provider television offerings to make a statement with DVB-T terrestrial services widely available. We have another interesting study in the field right now called Entertainment 2.0 in Europe, where we are examining many video-centric entertainment features, including television services, online video, and consumer attitudes toward content acquisition. We have gone to field in five countries at present, and we have data back from the U.K. and Italy (and we'll have data back from France, Germany, Spain shortly). As shown below, PVR/DVR penetration varies significantly from one country to another (the U.S. and Canadian data comes from the TV 2.0: The Consumer Perspective study). In markets where the service providers don't quite have a strong DVR presence, PC or retail-based PVRs could experience solid growth over the next few years.
- U.S.: 40%
- Canada: 25%
- U.K.: 37%
- Italy: 19%
ZVBox working - I'm living the dream
I got the ZVBox to work through a coax splitter, and there was rejoicing when I got the image up on the TV in the living room. Then, the only other big challenge was connecting the video cables from the TV into the AV receiver and figuring out not only where they go, but on what input the AV receiver should be set to get sound in the room. Once I got everything working, I pulled up a Hulu video, and I also pulled up that Internet radio station that I like and got that playing.
Friday, September 26, 2008
IBC - A recap
Wi-Fi for WPAN
The argument that Ozmo - and Aceurity - are making with their pitches is that Wi-Fi is obviously the de facto wireless connection standard, with unsurpassed penetration in thousands of certified products. I was actually checking out the list of Wi-Fi certified products this week and found a number of consumer electronics devices that are spanning well beyond notebooks, routers, gateways, etc. Given Wi-Fi's dominance, Desai tells me that it makes no sense to force consumer electronics vendors to put two or more radios in their devices (he specifically mentioned UWB and the emerging class of other wireless HDMI solutions that use the 5 GHz or 60 GHz band).
That's an interesting point. The conventional wisdom to date has been that Wi-Fi - and even the 802.11n solution - still won't be robust enough to support high-def video streaming in the home. That's why we've seen a number of vendors and consortia emerge that are looking at different ways of transmitting huge amounts of HD content around the home. Can there be solutions that take advantage of the volumes, costs, and interoperability of Wi-Fi and make it a feasible solution for both WPAN and wireless HDMI type of applications? I'd say that's worth investigating.
Verizon One and the tricked-out cordless phone still exists
Paramount Pictures creating full-length movies just for the Web
They're working with two producers - Alexandra Milchan and David van Eyssen - who have some experience in the realm of specially-created Web video. David van Eyssen helped produce BMW Films, a 2001 interactive project that hired Hollywood directors such as Guy Ritchie and John Woo to create short online films that featured the German automaker's vehicles.
Paramount has basically said that this is a big experiment, as they'll be trying all kinds of different models - free, sponsor-supported, ad-supported, and subscription.
I'm interested to see if something like this proves to be feasible. I've been wondering if the television networks could themselves create special production companies to bring shows straight to the Web. Would these prove to be financially feasible? Let's say you have a show like Jericho, which created a small but very faithful primetime television audience. Could a show like this be produced in such a way as to reduce costs and bring it to a loyal Web audience?
Motorola and KDDI's au BOX Service - Content Shifting from Set-top Box to Mobile Device
NY Games Conference
I just finished my panel on Online Games and MMORPGs, which followed John Smedley's Keynote (John is the CEO of SOE-Sony Online Entertainment). During John's keynote, he showed a lot of the interesting stuff they are working on, including Free Realms and DC Universe. What is interesting about Free Realms is not just the target audience, which is a lot younger than the WOW and EQ players, but also the business models and openness of the game. It's free to play, microtransaction based. It's more akin to a gaming-centric virtual world than an MMORPG. RPG is just one of the element of the game-it does have quests, guilds, monsters to fight, etc. In addition, it also have a variety of other types of genres, including puzzle, card, chess, racing, hidden objects, and soon a soccer game. It's flash based and highly accessible. The launch date is January 2009. SOE started developing Free Realms in 2005, so it's four years in the making. John also stressed the high production value of the game and during my panel discussion, he revealed that now the team behind Free Realms is 70+. I asked about the development cost, he won't tell me a number but did say it's easily north of $20 million. Other interesting tidmits during his keynote:
- He showed two people getting married at an EQ Fanfair event in Vegas last year, which was hilarious. I believe he said SOE's CFO also found his love through EQ.
- He also mentioned that Vivox, the VoIP tool in EQ, is being used by more than 70% of the gamers.
- Station voice allows EQ players to dial in from a cell phone into the game through voice or text.
- John's a self-identified geek who grew up with Dungeons and Dragons.
Back to my panel. I had a great lineup.
- Fernando Paiz, Executive Producer, Turbine
- Jon Radoff, CEO, gamerDNA
- John Smedley, President, Sony Online Entertainment
- Matthew Bellows, VP, Consumer Strategy, Vivox
- Jonathan Strietzel, Co-founder/CCO, Big Stage Entertainment
- Min Kim, VP, Marketing, Nexon America
Some key takeaways:
- Freemium games really took off here in the U.S. in the last couple of years. Nexon along is $30 million last year just in the U.S. The popularity of Nexon Games really took off after cash cards appeared at Target last year. Many of the incumbents, including SOE, are also diversifying into other models, including Freemium. Microtransaction models, which account for about 15-20% of the MMO market in the U.S. today, might outgrow subscription-based MMOs in just a few more years.
- The kids space is getting crowed, with many Virtual Worlds and MMOs popping up. Channels, production value, service, and brands will be important differentiators.
- MMO companies, in addition to business model diversification, also need to cater to different demographics, not just the traditional players, who are more likely to be male and 18-34. Turbine and SOE both have 80% male among their existing players.
- Console will become increasingly important. All SOE games in the future will be both PC and PS3, and potentially other platforms. Turbine is betting on the console as well. Nexon is also examining the platform. SOE has modified its MMOs for the console so that the interface is more friendly for the game controllers. All the panelists agree that console will help expand the market, not cannibalizing PC revenue. They also agree that there won't be a cross-platform MMO between PS3 and Xbox 360.
- Maintaining a dual currency system, one earned, and one purchased, is very important for successful Freemium MMOs.
I'm trying to get some notes on the panel from the reporters and bloggers in the room. Stay tuned.
Thursday, September 25, 2008
Broadband World Forum Europe 2008 brings you Parks Associates' Stuart Sikes!
Broadband World Forum Europe 2008 will help you recognize the market potential of the latest broadband content, entertainment, applications, and services for the enterprise and home, delivering the promise of the ultimate connected world.
The market for advanced URCs is catalyzed by increasingly complex and flexible entertainment systems with more components and capabilities. Households are spending more on their entertainment equipment and services and need advanced graphical user interfaces and controllers to access their content. These conditions are driving the emergence of the middle market for advanced URCs, which will continue for at least 5-7 years. Stuart Sikes will provide an overview and future trends for advanced remote controller devices in his presentation “The State of the Remote Control.”
It is the must-attend industry event you cannot afford to miss! And, Parks Associates is glad to be a proud sponsor of this event.
Roku is feeling its oats and my ZVBox story
Okay, now onto the subject of the ZVBox. I've written about digital media adapters for awhile now, and I have been able to play around with a few. Here are a few blog references about my experiences:
- May 2008: Netflix and Roku - The Kick in the Pants the Media Adapter Market Needed
- May 2008: Hulu on the TV? The ZvBox and "Localcasting"
- June 2007: Casting, Shifting, and Serving Simplified
- May 2007: Curses! Foiled Again! (A Sad Story about a Boy, His Media Center, and the Digital Media Adapter that Almost Could)
The main problem I've had with media adapters is that they don't deliver what I want in an "Internet on TV" experience. Look, my needs are simple - I have a couple of Internet radio stations that I'd like to listen to on some in-ceiling speakers we have installed in a few rooms of the house (think Sunday morning before church - that one hour of time I have to read the paper). I also like the idea of Hulu and other Web video programming available on a TV so I can catch up on a show I missed or see an old episode of The A-Team or Battlestar Galatica. And, this is an every-once-in-awhile kind of thing I'd like to do - maybe once a week, the way our schedule is. Perhaps on Tuesday nights, which is - let's face it - a wasteland for TV programming.
[Editor's Note: the views expressed by Kurt Scherf are solely his and not necessarily those of the management of Parks Associates]
This is why the ZVBox sounds appealing to me. Use an in-home network (coax) to turn the HDTVs in the home into second PC monitors. This conceivably lets me as the user make all of the choices I'm making today about what Internet and PC experiences I want to have. The Iowa Hawkeyes radio broadcast on WHO Radio from Des Moines? I can pull that up and have the game playing on the in-home speaker system. The classical radio station from Cincinnati that I like on Sunday mornings? Pull up the Website and start playing classical baroque music. And, while I can interact with the PC through the HDTV and have that freedom, the ZVBox offers the Zviewer, where popular sites such as Hulu, YouTube, and ABC.com can be accessed pretty readily. So, I've got the best of both worlds - optimal freedom and a "walled garden" of sorts that gives me easier access to pretty much most of what I'd want to watch anyway.
After trying initial set-up of the ZVBox last Saturday, I'll say that the experience is uneven so far. The set-up itself is fine, although making the physical connections to get the box up and running is probably going to be at least somewhat intimidating. They supply a filter that gets installed between the main coax feed coming into the house and the main coax splitter. That itself isn't too bad - just required me getting the ladder out and re-reading the instructions at least a few times to make sure I was getting everything correct.
The under-the-desk physical connections are not the most fun thing in the world to do, but I'm used to that. The ZVBox requires a coax connection, as well as VGA connections to both the PC monitor and the PC itself (the ZVBox essentially becomes a monitor bridge between the PC and the HDTVs in the house). A USB connection is also required between the PC and the ZVBox.
Now, what's nice about the setup is that there's no software to separately load onto the PC (no CDs...thanks, ZeeVee!). Once the USB connection is made and the power plugged in, the ZVBox takes care of loading the right software onto the PC.
So far, the uneven aspect about the ZVBox experience has been trying to figure out how to get the device to work through a coax splitter (which it won't in its current configuration). At the location of the main household PC is a coax jack that feeds both the Media Center features for the PC and the Verizon Actiontec Broadband Home Router (BHR). The coax connection is a critical part of the BHR, since video-on-demand and interactive content (like the Verizon Widgets) and EPG updates are fed from the ONT to the set-top boxes through the BHR. To keep both the BHR connected and get the ZVBox hooked up, I installed a two-way splitter. When I went to my HDTV and tried to tune in channel 125 (the specific channel set-up for the "localcast" from the ZVBox), I got no signal. However, when I unplugged the coax connection from the BHR and ran a direct connection from the ZVBox into the wall jack, it works.
I will say that responsiveness from both ZeeVee and Verizon (yeah ... okay ... it helps to be an analyst) has been great, and the Verizon folks are taking a strong interest in my experience, since ZVBox could be one of the first of many "additional passives" that are added to the home network. The last piece of advice I got from ZeeVee's technical support is to try a "forward feeding" connection, where I move the location of the splitter for the connection to the BHR and the ZVBox itself. We'll see ... the weekend is approaching, and I may have some free time to keep playing with it.
To be fair to the ZeeVee folks, once a successful connection is made between the ZVBox and the HDTV, there is a cool factor of pulling up the Zviewer and playing an episode of The A-Team right from the remote controller. Once I get some of these connection bugs worked out, I think I'll enjoy the experience as I begin to play with the functionality.
One other item that I'll need to complete is rigging a new audio connection between the HDTV and the AV receiver in order to get the audio from the ZV service to play through the receiver and into the surround sound system. Right now, I can only play the sound through the TV's speakers, so I'm going to want to enhance that experience. This will mean more crawling around, messing with a boatload of cables behind the entertainment center, and probably sweating (it's still 90 degrees in Dallas in late September). Maybe I can count it as a workout, though.
Verizon: Number One in HD Content?
That's great for New York City, but what about the rest of the non-Yankee universe? Where's our high-def? Actually, as Verizon FiOS subscribers, we were pleasantly surprised by the recent notice that our programming and HD lineups will be expanded to include the Big Ten Network. Since we're square in the middle of Big 12 territory, this may not seem like a big deal. But for a couple of Midwestern ex-pats (University of Iowa and THE Ohio State University ... yeah, gotta play it like the Monday Night Football player introductions), this is a significant stuff. Here's the kicker, though. The channel lineup changes on October 8. That's halfway through the college football season!
Wednesday, September 24, 2008
G1 is born, Stirring up the Smartphone Pot
In Google’s view, the biggest difference is G1’s openness. Andy Rubin, Senior Director of Mobile Platforms for Google, claimed that the phone was "future proof because it has openness built in." I am skeptical that “future-proof” will be the selling-point of G1 in the U.S. In this country, consumers’ replacement cycle for mobile phones is perhaps 18-24 months, similar to their mobile service contract length. Replacement purchases are a good business for handset makers. Making consumers believe their G1s are future-proof is at odds with handset makers’ interest in driving volume growth. “Future-proof” is one of the benefits for being open, but do not alienate yourself from your partners’ interest.
Perhaps Andy’s comment targeted more towards third-party application developers in its Android community than towards consumers, and served as an assurance that even Google and its handset partners move on with G2 or G3 in the future, the open software development environment will still allow G1 owners to benefit from new applications from the developer community. But backward compatibility is virtually the standard in this industry, and “future-proof” does not make Google’s G1 stand tall.
I might take Andy’s words out of context, but I think what he really meant is the promise that the openness of the Android operating system will bring a richer and far better user experience on G1 than any other non-Android smartphones on the market in the future. I will be keenly interested in how successful Google’s strategy will turn out to be in the next year or so. The mobile industry is clearly at the crossroads with the smartphone category sitting right in the eye of the innovation storm. This “future-proof” category (meaning its status as the crown of the digital convergence is well-established) will decide the mobile industry’s direction in the next 10-15 years. The Symbian sect is gradually moving in Android’s direction, but the Blackberry and Apple clans still cling to their proprietary approach. Third-party application developers now have a formidable spokesperson named Google, but will handset makers and carriers ever budge? If they will, who will blink first?
With Android, Google either crashed the party or took over as the new DJ. What a moment!
Tuesday, September 23, 2008
More on thePlatform and The Associated Press
- With AP content distributed to sites all around the world, a content management platform (thePlatform) needs to be able to allow the content producer to easily set geographic and air time restrictions for the video. This is done through a portal that AP accesses to set the distribution rules for the content.
- thePlatform has to be able to move quickly with the video. Since the AP covers breaking news, much of the video publication and syndication has to get done in 15 minutes or less.
- The business policies associated with the different videos have to be set and enforced - and these can vary widely depending on the type of content (news footage versus sports footage, for example).
- Scalability. thePlatform is managing the video player for hundreds of the news outlets, so they have to provide flexibility in how each outlet brands the player for its individual audience.
The interview was interesting not only because of the nature of this announcement, but it also allowed us to gain greater insight into the content management roles that companies such as thePlatform are providing to content producers. It definitely adds depth to what I already had written today regarding companies in the content and ad management space. Marty mentioned transcoding of content, ensuring smooth file transfers to the right CDN, and applying business policies and metadata as three key functions of thePlatform today.
thePlatform is currently working with some of the largest video ad network companies in the space today. I noticed that they issued a press release on September 16 that had added to its advertising partners with the addition of 24/7Real Media, Microsoft's AdManager, DoubleClick In-Stream, Tremor Media, Kiptronic, and LiveRail. These companies are now part of thePlatform Framework, whjch includes advertising campaign management systems, ad sales networks, content delivery networks, content protection, media formats, transcoding engines, payment processors, syndication outlets and video search.
Warhammer Approaching 400,000 subscribers?
EA and Mythic haven't announced any subscriber numbers. However, Gamasutra run a lengthy interview today with Mark Jacobs, Mythic's founder and GM and he leaked out some valuable information.
"Gamasutra: How are Warhammer's numbers?
MJ: We should figure it again, but as of [Thursday] night, we had more people playing the game at the same time in North America than we ever had in Dark Age of Camelot. We have the numbers now to back it up -- so it's not just, "Well, you guys had a nice head start."
No -- we now have more than Camelot ever had, by about 50 percent. That's a significant increase. When you also look at our downtime -- only one patch in almost seven days -- that's a pretty tough record to beat when you look at the launches of every other MMO, including WoW. Especially WoW.
Gamasutra: Can you give that figure?
MJ: No; publicly-traded company. Wish I could. But I can say it was about 50 percent higher than what we had in Camelot."
It's public knowledge that DAC had 250,000 subscribers at peak and the highest peak concurrent was around 50,000, plus or minus. I guess we could assume approximately 75,000 peak concurrent for Warhammer Online. Using a ratio of 1 to 5 PCU to players, we have approximately 375,000 players but using a 1 to 8 ratio, we have 600,000. Since it's a new game and most people are playing off the free month, the ratio should be on the lower end. So I guess it's realistic to assume about 400,000 or so are playing Warhammer Online. Comments welcome. We won't get these numbers confirmed by EA, since it's a "publicly-traded" company...
WirelessHD says to look to CES for product announcements
An actual UWB product announcement!
Alereon and Samsung Techwin today announced NaBee, a wireless connectivity solution for Samsung digital still cameras powered by Alereon's AL5000 Worldwide Wireless USB Chipset. According to the press release, "Samsung's NaBee allows for a simple, high-speed wireless communication between a digital still camera and PC. Plug the miniature dongle into the camera USB connector, and it's [sic] matching dongle into the PC and it connects just like a standard USB cable. NaBee will be available from all major catalog and online resellers, as well as selected retail outlets in December 2008."
Netflix expanding its online video offerings
Netflix Instant Queue content is or will soon be available for direct view at the TV via the following devices:
- The Netflix Player by Roku;
- The Xbox 360; and
- LG Electronic's LG BD300 Network Blu-ray Disc Player
RG, set-top box, and now screen phone?
Now, AT&T has unveiled a platform that is quite similar in form and function to both of the aforementioned devices. The AT&T HomeManager™ has a seven-inch color screen and a wireless handset, and it offers Web-like information in the form of customized news, weather, sports scores, etc. It can also display a contact list and provide visual voicemail messages.
It's been about ten years since the rise (and subsequent rapid fall) of the so-called "Internet/Information Appliance." It seems that these are being resurrected - at least in some form - through service providers and as value-added platforms for voice and information services. We've been wondering if there's room for another federated device - customer premise platforms that tie directly to service provider access offerings. I wonder if these type of devices will be "it"?
Roll-ups in the content delivery space
- Abacast is acquiring Tukati Inc., formally merging the companies that had a partnership the last couple of years.
- Highwinds Network Group has partnered with Octoshape to create a Hybrid Peer-to-Peer Content Delivery Network (Hybrid P2P CDN) solution for streaming live events to millions of concurrent worldwide viewers.
Advanced services for primetime programming key to reducing churn and increasing ARPU
The report states that video-on-demand (VOD) services are the most potent weapons service providers have in preventing churn, attracting new subscribers, and building new revenues.
TV 2.0: The Industry Perspective examines the growth of television services in major markets in Asia, Europe, and North America and analyzes the growth strategies that cable operators, telecommunications, and satellite service providers are adopting in these markets.
For the full press release, visit: http://newsroom.parksassociates.com/article_display.cfm?article_id=5104
More roll-ups in the online video space
- Content management: Deploying content with rules associated with exclusivities, windows, etc. (content producers may only want content up for a limited time as a teaser to their primetime television offerings, for example);
- Content workflow: The ingestion of content and ads and transcoding to ensure a seamless viewing experience;
- Delivery: working with content delivery networks to ensure that video does not experience problems associated with limited bandwidth and to avoid as much as possible network congestion on broadband service provider-owned networks;
- Scaling: Implementing unique solutions to allow for more and higher-quality video (what Move Networks does with their Move Adaptive Stream solution is a good example of a technique used to manage high-quality video traffic);
- Content rules management: These companies take responsibility for ensuring that content gets delivered with the appropriate DRM rules (if necessary) and also for geographic restrictions (content that can only be sent to U.S. viewers cannot be sent to overseas servers, for example)
- Globalization requirements: These can involve inserting appropriate subtitles for certain audiences or transcoding content to fit with international audio and video standards;
- Media players: Develop a player from which video can be viewed; and
- Analytics and reporting: The real-time reporting of viewer analytics is becoming a really critical area in the delivery of video and ad content. With analytics, a content and ad management company can not only be reporting the results of video traffic to customers, but can dynamically adjust content, traffic patterns, and ads as viewer habits and tastes change quickly.
In our report, we profiled a number of the content and ad management companies, including some of the "biggies" such as Anystream, Brightcove, Entriq, ExtendMedia, Maven Networks (now owned by Yahoo!) Move Networks, PermissionTV, and Thomson Technicolor (they made an interesting announcement with premium online video content pioneer CinemaNow to create a video content and ad management platform back in April). These companies continue to add companies to their portfolios that allow them to not only scale their syndication capabilities, but help content producers, publishers, and distributors better monetize the video that is sent over the Internet.
To this end, I read with interest yesterday's news that Anystream is acquiring Voxant, which syndicates online video content across thousands of sites and collects advertising revenue for the content producers. Voxant's main business - it appears - is helping to distribute the video assets of hundreds of news organizations - including The Associated Press, The New York Times, Reuters, and others - while helping to manage the ad assets to monetize the content. It would appear, therefore, that Anystream has added a critical piece to its content management platform by including the direct connection to many different ad networks via Voxant. My colleague Anton Denissov indicates that this sort of roll-up is quite similar to how Move Networks stepped up and basically aggregated the content delivery space. Instead of content producers working directly with the CDNs and other content delivery companies, Move came in and basically created a CDN exchange, where it works with multiple content delivery companies and looks to find the best price for its publishing partners. I'd expect that we may see some more consolidation between online video ad networks and these content and ad management companies.
And at the same time that this consolidation is occuring, it strikes me that the world of online video content and ad delivery is still dynamic enough that there is no such thing as "exclusive dating." Take the Associated Press as an example. Although they use Voxant for syndication and ad monetization of their content, there is an announcement today from thePlatform that they have been selected by the AP to deploy a more enhanced version of its Online Video Network, which distributes video content to more than 2,000 newspaper, broadcast and other media Web sites throughout the U.S.
It certainly appears that the market has plenty of opportunities for companies to develop and deliver more robust content and ad delivery and management solutions. I'm betting that the reporting and analytics area will be a really dynamic space to watch in the next few years, as measuring eyeballs and time spent on video sites - and then dynamically reacting to those metrics with appropriate content and ad insertion - becomes a really critical component of this space.
Thursday, September 18, 2008
Wireless and Powerline Controls Market to exceed $3 billion in revenues by 2012
Consumer demand for intelligent control applications will push U.S. revenues for wireless and powerline controls from $740 million in 2008 to over $3 billion in 2012, according to Opportunities for Wireless & Powerline Controls.
This new report forecasts the installed base for these technologies will skyrocket to nearly 60 million in 2012, thanks in large part to key players entering this market. Companies including Black & Decker, Schlage, Hawking, iControl, and Wayne Dalton have all announced new products targeting access control, remote monitoring, and energy management applications.
Zilog recently announced a new control platform incorporating both wired and wireless connectivity interfaces that provides consumers with remote access and control through WiFi-enabled handheld devices, including the Apple® iPhone™ and the BlackBerry® Curve™.
The report finds entertainment controls, including advanced universal remote controllers, will drive growth in wireless controls. Lighting applications will drive the opportunities for powerline controls.
Wednesday, September 17, 2008
It's Official-Nexon Made $30 Million in the U.S. Last Year
I've heard rumors about Nexon's U.S. revenue for a while now and Min Kim went on record to confirm that Nexon's 2007 revenue in the U.S. was indeed $30 million, compard to less than $1 million in 2005, when microtransaction was almost a foreign concept to MMOs in the U.S.
"In 2005, Nexon America’s revenues were around $650,000. In 2006, when they added Paypal as a payment option, sales rose to $8.457 million, based on item sales. In 2007, once Nexon released its Nexon Cash cards to retail stores, revenue jumped to $29.334 million."
Based on my conversation with industry insiders, F2P, microtransaction based MMOs already represent a business worth $150-200 million in the U.S. Nexon is the leader, followed by companies such as Acclaim ($30 million 2008 revenue expected), K2 Network, Outspark, Three Rings, and many other players. Although the market is still much smaller than subscription-based models--WOW alone makes $0.5 billion in the U.S., the momentum is strong. Our consumer data already shows that among non MMO players, interest in a F2P/Microtransaction based MMO is 6 times more than that in a subscription-based MMO. There's no question Warhammer will do well, but it will mainly draw its audience from WOW alumni and dormant MMO players, not fresh blood.
Interest among developers is also very strong. "Min asked his Austin Game Developers Conference audience how many people were developing or interested in developing free-to-play MMOs -- and roughly 70 percent of the audience raised their hands." In addition, large publishers such as EA have also recently introduced F2P games to the western audience.
With a whole generation of kids growing up with F2P games and virtual worlds like Habbo, Webkinz, and Neopets, microtransaction may overtake subscription to become the predominant MMO model in the U.S. in the next five years.
Min Kim will be on my panel next week at the NY Games conference. I'll surely have my chance to grill him and spur some healthy discussion among my panelists, which represent companies from both camps.
Samsung Bids for SanDisk and Is Denied
Tuesday, September 16, 2008
China Telecom, an 800 Pound Gorilla, Just Landed in Virtual World
Very intrigued, I put aside the report and spent some time digging through ChinaQ's website. First a little bit of background on Enreach Technology, its parent company. Headquartered in San Jose California, Enreach was established 10 years ago as a global provider of digital video entertainment systems for broadband IP networks. According to the company, it develops complete broadband-ready entertainment systems that enable operators to deliver revenue-generating services such as: VOD, TV over IP, DVR, Internet and E-mail. The company also developed the popular real estates website focus.cn, which it sold to Sohu.com in 2004.
While looking through the website and recent press coverage posted, I became confused. First of all, it seems the world has been under-development for a while and it already has virtual islands and spaces branded by BMW, Cisco, Dell, IBM, Nokia, Sony Ericsson, Sony, and Huawei. China Telecom seems to be another brand that has established a virtual presence in its world. This impression was confirmed by the first article covering this event. However, several other articles did make it sound like China Telecom is different from other brand partners and has deeper involvement with ChinaQ. In fact, China Telecom was the only brand featured on the homepage, making it look like ChinaQ is owned by China Telecom. Nevertheless, none of the articles mentioned whether China Telecom had made financial investment into the technology and platform. It could be just a co-promotion. Glancing through the website, it seems ChinaQ's main focus is on social networking. It also has many organized activities to engage users, including several that are game like. Since it's still under closed beta, it's hard to tell how popular it is. The company said it would release 200 accounts and if you know Chinese, you can try your luck by sending an email to firstname.lastname@example.org.
My initial investigation created more questions than answers. I'll surely try to approach the company in the next couple of days and see whether I can find more information. Assuming China Telecom is seriously interested in this, I can see several interesting possibilities. China Telecom, which has a very popular value-added service portal called vnet.com can potentially integrate 3D virtual worlds into its offerings. It could establish a community/social network for its service subscribers and increase customer satisfaction and retention. It can reward loyal customers with virtual goods and loyal virtual world residents with real-world services. It can also provide VoIP services in the world. Assuming it is serious, with the large subscriber base and deep pocket of China Telecom, ChinaQ can pose serious threats for HiPiHi, Novoking, and UOneNet, the three aspiring virtual worlds companies. (Of course, let's not forget CRD, the juggernaut backed by the Beijing Municipal Government) None of them has launched to the public yet so ChinaQ may not be far behind.
Stay tuned. I'll come back with more information if my inquiry goes through...
Feel free to submit your questions through the comments section.
Parks Associates workshop addresses new business opportunities for service providers, silicon and software vendors, and manufacturers
The workshop features Parks Associates’ Kurt Scherf, Vice President, Principal Analyst; Yuanzhe (Michael) Cai, Director, Director, Digital Media and Gaming; and Jayant Dasari, Research Analyst.
Nearly 170 million households worldwide will have a data network in 2008, creating the foundation for new media, entertainment, and communications applications.
The workshop will address the features of next-generation TV services critical in establishing differentiation, creating stickier services, and building revenue. Additional workshop sessions will focus on the consumer decision process when purchasing new products, the market potential for electronic gaming applications, and consumer habits when interacting with digital media, including music, photos, and video.
The workshop will also focus on new advertising opportunities, including forecasts and an overview of the shift in spending from TV to online sources.
The full press release is available here: http://newsroom.parksassociates.com
Monday, September 15, 2008
Hulu is putting the cart before the horse
I feel that Hulu is trying to become profitable before it has completely baked its product, thus putting the cart before the horse. Last night, the ads precluded me from tuning back in. The most egregious offenses included:
•Inserting the same ad for every pod (except for the pre and post-roll)
•Inserting an ad targeting a mother with three kids into a war movie
•Inserting an ad in the middle of the scene (sometimes almost mid-sentence)
Where did Hulu go wrong?
Hulu had a strong start out of the gate. Unlike many other online products, Hulu had a simple interface that was easy to use and a large library. Features like the predictive search were also a nice touch and the simple list of available titles made content easy to find.
Where Hulu fell short is implementing its ad-supported business model. The two main mistakes are:
•Failing to cap ad frequency. Traditionally, ad-frequency refers to how many ads a consumer sees in a piece of content (i.e., 1 per pod, 4 pods per 1 hour of content). Extrapolating TV model to movies, however, Hulu must also cap how many of the same ads the consumer sees in a single piece of content. Showing consumer the same ad 12 times will get them to leave the site, at least for the 30 seconds that the ad is on. This is counterproductive to what Hulu was initially trying to accomplish with shorter pods: reduction of ad avoidance behavior.
•Sacrificing ad relevance for revenue. Hulu is not a charity. Its parents (NBCU and News Corp) expect it to generate profits. However, I would argue that the lack of basic targeting (in my case, to content) is counter-productive. As a 25-34 year old male, watching a war movie, I was subjected to 12+ BestBuy ads targeted at a mother of young children. I generally don’t list myself as an ad-avoiding type (in my line of work, it’s an occupational hazard), but after the third pod of the same creative, even I found myself browsing away from the video once the commercials came on.
Even better example was the HungryMan frozen meal ad right after a particularly-gruesome post-mortem dissection scene on Fox’s criminal drama Bones. Yum.
My guess is Hulu is feeling the pressure to demonstrate ROI, causing it to engage in practices that degrade viewer experience. If they don’t reverse course, these practices will likely kill Hulu. When Hulu first started, the experience was much more enjoyable. Now pods are more frequent and most of them (if not all) are by the same advertiser. Given the large size of a traditional advertising buy, one such contract can probably buy most of the inventory on Hulu. I also understand that given the ad clutter, brands prefer to “own” a piece of content (be the only advertiser featured in it). Ultimately, however, Hulu must remember who matters the most: the consumers. Negatively altering experience increases the appeal of traditional solutions: YouTube, BitTorrent or DVDs. Losing consumers at this point would represent the end of the advertising revenues and the end of the road for Hulu.
One path for Hulu to follow is to limit number of impressions that it sells to a single advertiser. Hulu should also consider adding pay tiers to its ad-supported service. Using those tiers for some of the more expensive movies can help alleviate the need to insert extra ad pods.
Regardless of which path Hulu takes, it must stop putting the cart before the horse. It must stop trying to be profitable before fully-baking its product.
Time Warner Cable Offering Online Video Store
Since Comcast and Time Warner are using the same type of infrastructure, I wonder if this is the start of a Canoe Ventures trend where the major cable MSOs launch similar services in the online video world and share advertising technology to reduce their costs and standardize on ad serving, measurement, and other features?
Friday, September 12, 2008
Energy Management and Home Networking - HomePlug and ZigBee Join Forces
A number of energy utilities are working with both HomePlug and ZigBee to develop a common application layer integrated solution for advanced metering infrastructure (AMI) and home area networks (HAN). This means that utilities will have a choice between wireless or powerline networking when developing their AMI solutions.
The Digital Entertainment Content Ecosystem (DECE)
Particpating companies include:
- Best Buy
- Cisco Systems Inc.
- Fox Entertainment Group
- Lions Gate Entertainment
- NBC Universal
- Paramount Pictures
- Warner Bros. Entertainment
Think that this is another ill-fated attempt at PlaysForSure?
Cable Voice Services #1 in Customer Satisfaction?
Although cable suffers for truly satisfied television subscribers, a recent J.D. Power and Associates report indicates that the cable providers are doing quite well with keeping their voice customers happy. satisfaction averages 641 on a 1,000-point scale among Web users, compared with 626 for telephone users, the study found. The J.D. Power and Associates 2008 Residential Telephone Customer Satisfaction Study measured customer satisfaction with both local and long-distance telephone service. Five factors were examined in determining overall satisfaction; in order of importance, they are: customer service, performance and reliability, cost of service, billing, and offerings and promotions.
This is obviously a disturbing trend for telcos, who obviously should view the cable voice threat as yet one more challenge to overcome in building and retaining their own voice customer base. I had the chance to attend and speak at this week's Occam Networks User Group conference in San Diego. Although Occam's customers are predominantly Tier 2 and Tier 3 carriers (among which many are not competing head-to-head with cable operators for the same customes), the cable threat is very real. Several speakers cited Comcast's iteration that it would like to capture 20% of the small and medium-sized business voice market in the next few years. If carriers choose to ignore this threat, cited both Russ Sharer, Occam's VP of Marketing, and Michael Brown from FairPoint Communications. Telcos should ignore this threat at their peril, noted Andrew Randall from MetaSwitch. He said that 10 million lines have churned from telco to cable just in the last year.
There are some interesting applications occuring with voice services, including fixed-mobile convergence and femtocell deployment (which we cited in a report earlier this year titled Enabling Solutions for a Rich Broadband Experience). EMBARQ™, which is the largest Tier 2 provider, offers a handset called the eGo™ that combines standard calling features (Caller ID, etc.) with widget-like information (customized news, weather, etc.), and local directory search with automated dialing. Randall from MetaSwitch argued that these sort of features - combining the best of the Web with Internet-like applications - will be necessary for telcos to succeed in keeping their voice customers satisfied.
Here come the IPTV multi-room DVR solutions
Entone is announcing a multi-room DVR at IBC. The Janus™ IP Video Gateway can distribute video to other television sets in the home over a variety of in-home networking options including coax, Ethernet, phone lines, powerline, and wireless (802.11n).
Cable VoD and Day-and-Date Results
Thursday, September 11, 2008
Podcast on Virtual Worlds and Enterprises
Here are some excerpts of our conversation:
LinuxInsider: What reasons would a company have for utilizing virtual worlds from a business perspective?
Michael Cai: There are a variety of reasons. First of all, for the brand companies and media companies, they use virtual worlds to market and promote their brands and content and products, and also to interact with their fans. In terms of the enterprise side of the story, there have also been efforts in experimenting with e-commerce through virtual worlds. For instance, a Circuit City or a Sears might be using virtual worlds to promote some of the new products they have, or for experimenting with conducting real-world e-commerce through virtual worlds.And then if we look at what some of the large global companies are doing with virtual worlds: collaboration, customer service, events and meetings -- whether it's internal meetings or external meetings with clients -- training, product and concept development and validation, as well as consumer research. Those all have been done in virtual worlds in the past several years. Also, virtual worlds have been used for serious purposes, such as military training healthcare applications, first-responder training and educational purposes. Actually, a lot of universities have set up a presence in virtual worlds.
LI: It sounds like there's a variety of different companies in the market delivering these services. How old is the virtual world market?
MC: It's been around for more than 10 years, actually. ActiveWorlds started a simple version of virtual worlds back in the early '90s, but Second Life made the virtual world industry known to the public because of all the press coverage they got -- good or bad. And then in terms of really serious use of virtual worlds for enterprise applications, that kind of emerged in the past three years or so, but more so in the past year than before.
LI: You mentioned some applications on the enterprise side for virtual worlds -- like marketing and training and events, and things like that -- but what do you see as the real sweet spot in terms of how virtual worlds can really positively impact business that you haven't talked about?MC: In terms of positive impact on business, I think right now when companies evaluate whether they should invest in virtual worlds and use some of those enterprise applications, I think cost saving is normally an incentive. But right now, because the market is still very early, most of the companies are still experimenting. But not many case studies have been established, so I think that focusing on cost-benefit analysis is probably not the only method for judging whether you should invest or not. It also depends who you are, what kind of business you're in. If you're a technology company, if you're a large global company, yeah, I think it's definitely worthwhile experimenting.
LI:Are large corporations leading the way, or do you see mid-size and smaller companies jumping on board as well in the near future?
MC: I think right now, percentage-wise, we're seeing more large companies, global companies. If you think about IBM, Cisco, Sun Microsystems (Nasdaq: JAVA) and, more recently, Nortel -- all [are] kind of jumping into this and supporting the virtual world industry for enterprise applications. Most of them are not only large global companies, but they're technology companies as well, so they have some vested interest in promoting these.Then, after these kinds of companies, you also have several large global companies that are not directly in the technology space, but because they are so global, geographically distributed, it's hard for them to hold regular events or training exercises or what have you among the employees scattered around the world. So you have Accenture, PWC -- a lot of the consulting companies, as well as Unilever and those kind of global brands -- utilizing virtual worlds for their global employees.In terms of smaller companies, there are small companies kind of experimenting -- not only small enterprise but even SOHO (small office-home office) and entrepreneurs who have very, very small businesses. Some of the applications can include, like, if you're in the design business, you can build a virtual showcase, a 3D showcase, a really fancy version, and show your clients without flying to them and visiting them. You can show them in the virtual world.
Wednesday, September 10, 2008
A Blackberry Apology
I am so, so sorry. I never meant to hurt you or make you feel like last year’s hot item. Will you please take me back?
My little fling with iPhone wasn’t that serious and lasted only four weeks, so surely you can see I was not (very) unfaithful. It wasn’t that I doubted your loyalty and undying service -- it was that sexy screen, you see, with those big, luscious, crisp and clear You Tube videos… everyone was doing it and talking about it. I couldn’t stand the pressure and I, well, just had to try it.
But I would much rather travel with you. You always deliver my emails, anywhere in the world, on time and without all of those fits and delays. She, well, was finicky, requiring all sorts of adjustments in order not to endlessly data roam in Europe and even then, she cost me a fortune while you have always been so frugal overseas.
And how demanding she turned out to be in the car, requiring both of my hands and my full attention even while negotiating heavy traffic. I think she almost killed me – twice. You, Pearl, always understand my voice commands and flawlessly dial hands-free. She never listened, even when I bought special accessories for her from the App Store.
Talk about high maintenance – keeping her energized took an almost daily charge. And while I know I never told you, you have a very nice keyboard – and you have never complained about my large fingers. iPhone howled relentlessly every time I typed even the most basic phrases.
I confess I thought iPhone would make me feel younger and cooler, but alas a middle-aged balding man just looks foolish fumbling to figure out whose call was just dropped.
Pearl, I hope that you understand that this was just a stage in life and that everything will be back to normal soon (as soon as I sell my red convertible). Will you please take me back?
New iPods and Zunes Upcoming, Why Bother and Will Consumers Bite?
One or two days before Apple’s scheduled product showcase, Microsoft announced its third-generation Zune players. Despite the fact that Zune has never reached even one-tenth of iPod sales volume, Microsoft has been patient and persistent in its catching-up game.
Early adopters and tech junkies might already feel bored about the whole MP3 player category. The entire industry’s attention is on the sexy iPhone and its many copycats and would-be killers. True. If you look at MP3 player penetration among all households, it already crossed the 40% mark in early 2008 based on Parks Associates’ National Technology Scan survey. The growth will slow down, inevitably. That’s also true.
But the press and the pundits missed a point. Behind these tiny and shiny gadgets is a gigantic and still-under-tapped digital content distribution market, and portable devices are the first and will continue to be an important platform to groom it till it explodes.
Back to the hardware, both makers have made important upgrades, from form factor to functions, from user interface to experience-enhancing new features. They lowered the prices too. Although the new devices are less alluring in the eyes of technology aficionados, the other 60% of the U.S. households will find bargains and better values after a not-too-long waiting period (two years, perhaps). Yes, the growth curve will flatten out, but 50-60 million iPods a year for Apple is not bad at all, definitely an envy to other players in the field.
Sunday, September 07, 2008
Goodbye, Unbox - Hello, Amazon Video On Demand
Amazon's moves highlight a couple of the key trends we reported in the Internet Video: Direct-to-Consumer Services (Second Edition) report:
- Internet video services that rely soley on transactional revenues should expand to include ad-supported content; and
- Getting content to the TV (through network-connected consumer electronics devices) will be a key factor in growing this business significantly.