Democracy in Media

Resurrection

Back in August last year I wrote the last entry to this blog. I was fully intending to maintain a once a week (or two) pace to my posts, but between balancing the tasks of starting a new business (CozmoTV) and raising a 2 year old, blogging simply became less and less important.

Well, I have finally offloaded most of the CozmoTV tasks that prevented me from having the time to post and, frankly, just posting for the CozmoTV blog alone is pretty boring. There are so many issues out there that I want to address I feel that I can no longer sit silent and watch the parade go by. So, I’m back, and I’ve got a lot to say…

Why IPTV is DOA

I’ve had a few conversations with folks at different companies servicing the IPTV space over the past few weeks. These conversations have hardened my prior opinion. IPTV is nothing more than cable in sheep’s clothing and cable isn’t going to be the wolf much longer.

IPTV has a major problem (and lots of smaller ones); it is a closed proprietary delivery mechanism.

While IPTV uses new technology to deliver video to the consumer, the problem is not in how to get the video to the consumer, it’s in how to get the consumer to the right video. Telecom providers, like the cable and satellite systems before them, want to control every piece of video that reaches you through their approved device. But this is like looking at AOL’s business model in 1998 and saying that’s the ideal Web content delivery model. (Yeah they make a lot of money doing that, but who would you rather be today, AOL or Yahoo?) The market for video content in ten years is going to be like the market for any other Web content; you won’t want someone to limit your access to what they deem relevant any more than Web surfers were happy being spoon fed content from within AOL’s “walled garden.”

The fact is, the cable hub-and-spoke delivery model that has been so pervasive for decades has run it’s course and is about to die. It might not die tomorrow, but it’s going to die pretty soon. Open, packet-based, decentralized delivery is simply going to dominate all data communications, not just text and audio communications. If you can access all your data over a single open network like the Internet, why wouldn’t you?

We’ve heard it everywhere recently. This is the age of consumer empowerment. Consumers want access to any content, any time, any where that they want. Cable and satellite simply cannot provide this type of flexibility in delivery. And once content owners begin to realize the tremendous potential of this open network (like AOL seems to be belatedly realizing) and begin to make all of their mass-market content available over broadband, there will be nothing to keep customers from defecting. After all, it’s a business model issue, not a technical issue.

To see this in action, you can also look at the VoIP market. It should give you a sense of the path all data communications is taking; complete disaggregation of the supply chain. The VoIP market is evolving into:

1. a bunch of companies providing physical delivery infrastructure (these are your wired and wireless broadband Internet providers such as your SBCs and Comcasts and Sprints),
2. a bunch of companies providing hardware solutions that comply with open standards for integration with any service (these will be your Nokias and your D-Link’s and your Ciscos, etc.), and
3. a bunch of software solutions that reside on the network and tie physical delivery to the device in ways that make the consumer happy (these will be your Skypes and your Microsofts and your Yahoos).

Everyone is free to innovate and compete within their slice of the supply chain. You may still buy a bundled offering from one company, but increasingly you’ll find that you want to be able to shift between different hardware, software, or broadband service providers to get access to new features, better prices, etc. and the providers will be forced to lower those barriers to switching in order to compete. Add in the provision of multiple services over the same infrastructure with a little less FCC oversight and the number of providers in each slice is going to explode.

So, again, why exactly do I want to lock myself into another closed delivery channel that ties me to the same devices and pushes the same content I can already get from two existing proprietary networks for the same price? So I can get it all on the same bill? Oh wait, it must be access to the world-class customer service at SBC (which you’ll be using a lot with their IPTV service). The bottom line is that telecom providers are essentially trying to replicate the cable hub-and-spoke model over a packet switched network. Why? So they can maintain security and scarcity in the network. They want to keep the network closed and all the services bundled together.  But I don’t think this is what consumers really want, and eventually consumers always get what they want.

IPTV is going to be hitting its “stride” in about five years, but in those five years, the world will have changed dramatically. People will be downloading/streaming vast quantities of video directly from content owners over open IP networks to any device with broadband access, local storage and a display (hell, they’re already doing it). They will be able to buy these devices in myriad form factors that make use of thousands of potential open standard Web-based services. IPTV will simply look like a bad experiment that occurred during a rapid and profound change in the way communications services are delivered.

Without delivering any quantum improvement in benefits to consumers, IPTV will ultimately fail. And with its’ failure, the last nail in the coffin of closed network distribution will be driven home.

UPDATE: Michael Parekh wrote a good post about this some time ago that I’m just catching up to.

Tags | iptv , closednetworks , aol

CozmoTV Progress

Well, I’ve been a bit consumed with getting our software into Alpha as of late. I took a quick look at Bloglines yesterday and saw 3,000 odd unread posts. Even this number seemed to be limited by Bloglines’ 200 message limit per feed (which has been hit by about a dozen feeds). Anyway, I’ve got some catching up to do…

As for our progress… we’ve had our website up for a couple of months and we’ve been kicking it around a bit. I still hate navigating through the text of the site, but I feel that the Demos finally do their job; although, like all things I do, they’re a little long winded.  Anyway, here is a link to our demo about CozmoTV and CozmoTV Networks (which we should be releasing early next year). This week I’m going to spend some more time talking to people about the site and getting people ready for our product launch (which looks like it’s probably going to occur in mid August.)

The application is coming along beautifully. We made some last minute changes to the interface which has pushed back our ultimate delivery date by a couple of weeks, but the changes have been well worth the effort and delay. I’m really excited to get some feedback from the community on the project. The plan is to release to a group of Alpha’s in the next few weeks (basically friends and family), before releasing it to the Beta’s that have signed up through our site. If you have an interest in participating, simply click on the big yellow button that says “Sign up for our Beta” on the right hand side of our site. You can’t miss it. (And we really are going to give away a TiVo to someone. Since the Beta list is still less than 150 people, your chances of winning are pretty solid.)

We also got a mention in the San Jose Mercury News a couple weeks back as a result of an Elevator Pitch that I tagged for Fred Wilson. Not exactly what we had planned, but we’ll take the free (if premature) PR.

The whole CozmoTV team (all two of us) is really looking forward to changing the way people think about TV. I think you’re going to like what we’ve done.

Tags | cozmotv , siliconbeat

KCRW’s National Stage

The LA Times had a recent article on KCRW’s recent success with an iTunes-fueled podcast explosion. Supposedly KCRW’s daily podcast downloads went from approximately 3,500/day to over 100,000/day since launch of 4.9. This is great news for KCRW’s reach and provides a national stage for their content (something that would have been impossible before podcasts).

My brother produces both “Which Way LA” and “To the Point” (#31 on the iTunes top 100). I had been bugging him for several months to look more closely at Podcasts and how he might be able to contribute to the network. (He also produces music reviews for NPR’s Day to Day.) He felt that balancing an additional “broadcast schedule” on top of everything else would be very challenging. I guess he’s podcasting now whether he has the time or not.

Anyway, it’s great news for KCRW and demonstrates how effective podcasting can be for early adopters. Getting a similar bump in subscriptions will be difficult to muster for other producers once podcasts become more mainstream and competition for those top spots intensifies. KCRW (and my bro) should be delighted (although I guess the bandwidth costs could be a killer.)

Tags | kcrw , podcasts , itunes

Radio Silence

Well, I’ve been in NYC for the last 5 days attending the 40^th birthday party of my brother-in-law and watching the fireworks from the middle of the Hudson. We had a great time, although the timing could have been better. Anyway, the R&R is always nice. 

I’ll be posting a bit again tonight, although the posts over the next week or two are going to be a bit light. We’re getting down to some final strokes on the CozmoTV application and gearing up to go Beta at the end of the month (maybe beginning of August). I’ll also be wrapping up changes to our website in the next few days. We should be good to launch that this coming Monday. 

Anyway, for a two person organization, there is a lot going on.

Tags | cozmotv

Techdirt

First of all, I love Techdirt. I subscribe to a ton of different feeds at this point, but like everyone I tend to read some more closely than others. Techdirt is definitely on this list. Mike is almost always right on the money and he always seems to manage this in a nice tight package. I wish I could do the same.

Mike wrote yesterday about Doubleclick’s protests regarding ad blocking software and the potential negative implications to a consumer’s “subsidized” online experience. It’s just amazing that people in the online advertising world feel this way given the tools they have to work with. Online advertising is all about relevant conversation and not about yelling to grab your attention. I do believe that advertising is a critical component of the open network economy, but this advertising is going to look radically different than what you see today on TV, and even the Web. Until people want to watch the ads, the advertiser has not done their job, nor has the intermediary.

I’m going to post more extensively about what open network advertising should look like later.

Tags | techdirt , doubleclick , opennetwork , advertising

Format Wars Don’t Disappear with Broadband IP Delivery

The NYT had a recent article (and The Register here) on the impending market entry of HD DVD and the recent breakdown in negotiations between the HD DVD camp and the Blu-ray camp. While both parties appeared willing to negotiate at the twelfth hour, technological limitations prevented a low-cost compromise. So, we’ll see the slow adoption of HD video disc content in much the same way as Betamax and VHS incompatibility slowed initial adoption of video cassette tapes.

Marc Cuban has proclaimed that this format war will essentially be the dying gasp of portable disc-based video distribution. The problem is there are even worse format incompatibilities on the Broadband distribution side. The primary formats are Windows Media Player (WMP), Real Player, and Quicktime. It could be argued that WinAmp and DivX belong in this group, but they really don’t have the kind of reach that these other formats have (although P2P distribution could change that considerably in the coming year.) Anyway, bottom line is that three different codecs currently dominate the field. On a PC, this doesn’t matter too much. As long as you have all three installed (they’re all free) you can download and play most videos. But this is a problem as you begin to use the PC to rebroadcast video to other devices. TiVo, for example, only supports MPEG-2 video. Windows Media Center only accepts WMP.

As a video producer, if I want to deliver video to those platforms I have to post in both formats. (I can rely on an intermediary PC transcoding the content, but you’ll only have to see one transcode of a moderate quality WMP into a pitiful MPEG-2 to realize that this is not an ideal solution.) But posting a video file in multiple formats for different delivery platforms is a pain in the ass.

None of these companies want to give up their proprietary codec. Each knows what is at stake. Unfortunately for Real, this contest does not favor them. Both Apple and MSFT are willing to invest heavily in the development of their codecs without any direct return on that investment. Real doesn’t share this luxury. Ask Netscape how that all works out in the end. It’s tough to compete with free. So, this will probably boil down to Quicktime vs. WMP. (Although maybe something like the BBC's Dirac (and here) will come out of nowhere, but it doesn’t seem to hold that potential right now).

I would think that Microsoft has the clear advantage in this contest. While Apple is going to give Redmond a run for their money in the home entertainment space, Microsoft has made significant inroads into Hollywood and the set-top box markets that will be tough to overcome this late in the game. As choice narrows and users (sorry, the media industrial complex) are forced to pick a preference, it would appear that the world is likely to collapse into the WMP camp and they’ll serve up the winning codec. This will dramatically simplify the process of publishing video for any platform, but it will put Microsoft in an unfortunately powerful position in the burgeoning democratic media space.

They’re not the greatest technology partner when it comes to open network delivery, but they’re significantly more open than Apple. Anyway, I’ll be rooting for Dirac. It’s a stupid name and a long shot, but hell, a kid can dream can’t he?

Tags | hddvd , bluray , codec , wmp , quicktime , realone

UPDATE: I just noticed Om's post on MPEG4 popularity with IPTV providers in the telecom space.  Certainly something to watch.

Why Satellite Isn’t Compatible With an Open Network World

I was listening to an NPR Day to Day piece on Rupert Murdoch’s plans to deliver video on demand via his 20 million PVRs. A lot of the interview revolved around the idea that Rupert was going to have problems delivering this video within the 45 day “Wal-Mart Window.” (Wal-Mart has an agreement with the major studios that says they will delay release of their movies through video-on-demand, over the Internet, etc. until 45 days after those movies have been released to video stores, such as Wal-Mart. Failure to comply with this agreement would result in the removal of that studio’s movies from Wal-Mart’s shelves.) I agree that this is an issue, but it seems to ignore the other larger issues that face News Corps as we move rapidly closer to a world driven by open network distribution.

The problem with satellite is that it cannot deliver a video on-demand to a consumer (for a variety of technical reasons.) It is inherently a broadcast medium with no real two-way communication. So, to achieve his goal of video-on-demand, Rupert is going to download and cache movies on these PVRs using a reserved segment of drive space, approximately 80 Gigs). The selection of available movies will be limited to those that will fit on that drive. Since Rupert’s aiming for the HDTV market, that means about a dozen titles unless he compresses the hell out of them (which he probably won’t do since many (most?) of the existing set-top boxes only accept MPEG-2 streams.)

As we head into this age of open networks it is amazing to me how badly News seems to be missing the boat here. Now, it’s not that I think blockbusters are going away, as I’ve said before, but I do believe that any video-on-demand service that only delivers the very tip of the long tail head is doomed to failure. It won’t take much for consumers to realize that the selection they receive from DirecTV is a tiny sliver of a fraction of what they can get through cable, which in turn is a tiny sliver of a fraction of what they can get through the various IP deliver platforms that will be springing up as DirecTV rolls out this service. DirecTV is assuming that the hits are all that matter. Well, they may bring in the most money, but it won’t stop consumers from abandoning the service for other more flexible platforms that do at least give you the option of seeing more than the top-ten movie releases.

I’m a DirecTV subscriber and I love the service. But for me, it’s mostly about the quality of the broadcast and the interface TiVo has provided. Cable is now rivaling this quality and IP-based delivery mechanisms will soon surpass it. TiVo’s interface will be there whatever my source of content. As more content becomes available, why exactly am I motivated to stay with DirecTV again? What’s the real killer value?

Satellite has been kicking cable’s ass over the last decade. But that process is going to start going the other way. Unless satellite makes the enormous investment into turning their birds into fat pipe IP delivery stations, their attractiveness as a delivery platform for content is going to start fading fast. We’ve seen the heyday of satellite and that heyday was yesterday.

Tags | npr , directv , dvr , opennetwork

Looking Back to See What Stuck

Well, I’ve been blogging now for several months. It’s been a blast and quite a bit of work (and very difficult to accomplish while balancing the responsibilities of a new baby and a fledgling enterprise). But the process has also been enormously rewarding. In the past few months I’ve gained a deeper understanding of this market and amassed some great relationships. Neither of these two benefits would have been achieved to the same degree without blogging.

The process has also taught me first hand about the power of niche content. I’m afraid to admit it, but I tend to read books like the DaVinci Code, listen to 105.3, and watch movies like Spiderman 2. I’ve always understood that there was an enormous market in niche media, but I always felt that it was for people other than me. Well, three months later I realize that it is less about the quality of niche sources (although it has great exceeded my expectations) and more about the process of finding them. I essentially didn’t read/listen to/watch this stuff because I simply was too lazy to go through the process of finding it. Sure, I would stumble upon a few small Web sites, but for the most part I was the guy that was sticking to the 15 bookmarks.

Today I review 100 odd feeds using Bloglines (including a dozen or so tag-based feeds through Del.icio.us.) I have become a full fledged consumer of niche media. The amazing thing is that I have almost entirely drifted away from mass media on the Web. Most of my online experience is reading various sources with fewer than 1,000 subscribers in Bloglines. In fact, I would say that most of my subscriptions I share with less than 100 people. And it wasn’t that the content got so much better over the past 6 months. What changed was my adoption of Typepad, Bloglines, del.icio.us, and Firefox. There is some amazing stuff out there written by very smart people about very pertinent stuff (at least to me). But I never would have found them, regardless of how good they were, without these basic technologies.

My biggest complaint is that I feel more and more like a freeloader of the system. (I’ll blog a bit more about this in the next few days). I consume more than I contribute. I find myself with 10 or 15 open Word drafts just waiting to get fleshed out, most of which wind up being abandoned as the subject matter becomes increasingly stale (which can happen is a matter of days, or hours…) I still find it amazing that many of you contribute what you do every day. I feel like my own processes leave a lot to be desired.

So, I’m going to double my efforts and contribute more to this blog (while at the same time trying to consume less – RSS aggregators remind me of my first e-mail clients and the subsequent e-mail addiction that continues to this day.) I’m going to try to post more frequently and more succinctly. But the process is still harder than it should be and I’m hoping that the tools continue to improve at the rate we’ve seen over the past year. Anyway, the point is, blogging has been an enormously successful investment of my time and attention. I just hope the equation isn’t so one-sided in the future.

Tags | blogs , bloglines , del.icio.us , firefox , rss

AOL Embracing Open Networks

The recent announcement that AOL will begin focusing more attention on making content and services available to the general public (as opposed to members only) is a testament to the power of open networks over closed. 

The problem that AOL has been facing is that it is still charging a bunch of people for access to services (mostly content). Meanwhile, the rest of the world has moved on to free ad-supported models (Yahoo, Google, MSN, etc.) This trend has only accelerated as AOL’s customers moved from dial-up to broadband. Bundling access with content can be compelling for some, but once they’re paying SBC or Comcast for access, the content bundle becomes less compelling in the face of all that free competition. In other words, the “walled garden” approach doesn’t work in an open distribution system. 

While AOL’s response to this realization has been less than inspirational, it does demonstrate the power of this shift. AOL is literally gambling billions of dollars in steady cash flow in an effort to capture a potential revenue flow that they believe will be large enough to justify the risk. They think open market distribution of services and content is going to be a very big market indeed.

But what is also interesting is that AOL appears to be trying to leapfrog Yahoo et al with the focus on audio and video. Their description of a “Video Hub” as a TV Guide for the Web will be something to check out. It should be available on the 21^st.

Tags: aol , opennetworks